When you are a small or medium sized business, obtaining credit remains challenging, and therefore expansion and hiring is a scary proposition. Congress and the White House already have passed legislation intended to spur the economy and create new jobs – but from the SMB perspective, there is still a lot of work to be done.
Currently, there’s talk of a “Jobs III” bill taking shape in the Senate, but the timing, political will and focus of such legislation remains unclear. Here’s a quick recap on recent legislative actions intended to spur economic growth and job creation – and then foreshadow potential legislation that you should be aware of.
Jobs I. In 2009, Congress passed the “American Recovery and Reinvestment Act of 2009 (“ARRA”). This “stimulus” legislation included spending and tax cuts which will continue to roll out for a number of years to come. Of note for CompTIA members was funding for broadband infrastructure and incentives for health care professionals to adopt health IT. CompTIA has worked to inform its membership of the business opportunities growing out of this legislation and also formed a Health Information Technology Special Interest Group (“HIT SIG”) which focuses on developing training and marketing strategies for members who seek to enter this burgeoning market.
Jobs II. In March Congress passed the “Hiring Incentives to Restore Employment Act” (the HIRE Act). This $18 billion bill included, among other provisions, a retroactive increase in the §179 small business asset expensing provision (increased from $125,000 to $250,000 for the 2010 tax year). This legislation also included provisions that would exempt employers from paying social security tax (6.2%) for hiring unemployed workers or retaining workers hired in 2010 for at least 52 weeks.
Jobs III. Even with the recent enactment of Jobs II (the HIRE Act), many on Capitol Hill are pushing for another jobs bill, tentatively referred to as “Jobs III.” We initially anticipated this legislation would be introduced before or shortly after the Memorial Day recess. However, with the Congress now working on Financial Reform, a Supreme Court nomination in process, the potential of immigration reform, and mid-term elections in November, the timing and exact shape for Jobs III are uncertain. However, it is anticipated that at least five existing proposals will be bundled up and will serve as the basis of a bill. CompTIA has been meeting with both the House Small Business Committee and Senate Small Business and Entrepreneurship Committee, and we believe that the following will be included in a legislative proposal:
- Increase SBA loan limits for certain loan programs; reduce or eliminate some SBA loan fees; and encourage the SBA to make lending information – a list of lenders and loan rates – more readily available. Further, certain small businesses would be allowed to use a SBA loan to refinance a previous business debt.
- Seek to boost SMB exports by improving access to loans, counseling programs and coordination of existing federal export assistance resources.
- Direct federal agencies to make the government acquisition process more hospitable to SMBs by addressing a persistent complaint that contracts set aside for small businesses actually are being awarded to large firms. Legislation may require an annual certification from a small business that it meets the federal requirements for small business procurement awards.
- “Small Business Community Partner Relief Act of 2010” allows the SBA to waive the requirement for certain micro-loans that the lender obtain a percentage of the loan amount in cash or in-kind contributions from non-federal sources.
- Reauthorize and increase R&D funding for SMB tech firms through 2023 for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This approach would remove the uncertainty surrounding the program due to temporary extensions.
More Jobs & Capital. While some of these are well-intended approaches, CompTIA has met with Senate staff to ask for the inclusion of two additional provisions: eliminate the 3% withholding tax requirement on government contracts (which will begin in 2012), and create a government-backed debt fund to support promising small technology companies. We also are working on a proposal that would more clearly define “small business” and would ensure that the federal government contracting goal of 23% is actually awarded to small businesses. We hope to get some concrete action on this contracting proposal when the small business committees take up contracting legislation.
More, as we search for additional opportunities to assist our membership, we welcome your insights, suggestions and discussion. We are curious:
- Did ARRA provide any relief or new business opportunities to you as a small business? If not, what is the biggest impediment of ARRA in terms of reaping funding and procurement opportunities?
- As a tech SMB, what has been your experience with respect to federal government procurement? If there is a problem, is it because the process is too cumbersome or that there is not enough understanding of the options and opportunities that exist, or both?
- Have you taken advantage of the §179 small business asset expensing provision or the provisions that would exempt employers from paying their share of social security tax for hiring unemployed workers and for retaining workers hired in 2010 for at least 52 weeks?
- Looking at the Jobs III possibilities what would be of greatest benefit to your company? What’s missing?
Tell us what you think. We are here to advocate on your behalf.
