Washington Watch - July 1, 2009

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Washington Watch - July 1, 2009

Legislative Notes: Energy Bill Passes House, Another Home Office Deduction Bill Introduced

Energy, energy, energy - The House recently and narrowly passed sweeping climate legislation (HR 2454). Among others, the components of the bill include steep cuts in greenhouse gas emissions, requirements for energy production companies to replace a portion of their output with electricity derrived from renewable resources and a directive to reduce energy usage in commercial and residential buildings.

Home Office Deduction, Take 2 - U.S. Senators Olympia J. Snowe (R-Maine) and Kent Conrad (D-N.D.), as well as Rep. Charles A. Gonzalez (D-Texas) announced the Home Office Tax Deduction Simplification and Improvement Act of 2009, which would establish an optional home office deduction. A similar bill was introduced in March by Congressman Kurt Schrader (D-OR), Chairman of the Finance and Tax Subcommittee of the House Small Business Committee, and Congressman John M. McHugh (R- N.Y.). The earlier bill was the Home Office Deduction Simplification Act (H.R. 1509).

Small Biz Health Care Roundup

The health care reform debate is constantly evolving. Here are some of the week’s top health care headlines to help keep you up-to-date on what’s being said:

Healthcare Reform Debate Heats Up In The House (The Small Business Watchdog)
Power player, the House Ways and Means Committee, debates the idea of a public option.

Health reform FAQ: Cutting through the noise (CNN Money)
Confused about what health care reform would look like and how it would change your world? You're not alone.

Little Known Info About the Self-Employed and Health Reform [Survey](NASE on Micro-Business)

President Obama Comments on Self-Employed and Health Reform (ABC News)
His comments on the self-employed and health care reform start at the 4:00 mark of this video clip of the interview.

HHS Secretary Presses Congress on Health Care Reform, Rules Out Increased Deficit Spending (Fox News)
Health and Human Services Secretary Kathleen Sebelius told lawmakers Wednesday that President Barack Obama is willing to listen to suggestions on how to pay for a health care overhaul, as long as they don't increase the deficit.

Bipartisan Health Bill Gets Cold Shoulder (Roll Call)
With President Barack Obama and lawmakers in both parties continuing to struggle for a bipartisan health care reform deal, sweeping legislation — pushed by a bipartisan Senate duo — that would fundamentally restructure the way Americans get their health insurance has been gathering dust.

Small Businesses See Changes to SBA 504 Loan Program

Officials are hoping that recent changes the popular federal 504 loan program will help increase access to capital for small businesses. The modifications will allow small businesses to restructure eligible debt to help improve their cash flow which, in turn, will enhance their viability and support growth and job creation. The 504 loan program can be used to purchase business real estate or fixed assets, such as heavy equipment or machinery, and expand current development projects.

The 504 loan program is administered through 271 Certified Development Companies across the nation and the changes include the following:

  • Debt Refinancing: Legislation allows 504 program projects to include a limited amount of debt refinancing if there is a business expansion and the debt refinanced does not exceed 50 percent of the projected cost of the expansion. “Expansion” includes any project that involves the acquisition, construction or improvement of land, building or equipment for use by the small business. The following are some of the conditions under which borrowers will be eligible for refinancing:
    • The debt being refinanced was incurred to acquire land, to construct a building or to purchase equipment. The assets acquired must be eligible for financing under the 504 program.
    • The existing debt is collateralized by fixed assets.
    • The existing debt was incurred for the benefit of the small business.
    • The new financing provides a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are taken into account.
    • The borrower has been current on all payments of existing debt for one year prior to the date of refinancing.

Visit www.recovery.gov or www.sba.gov/recovery for more information on loans and eligibility.

Reminder: Federal Energy Incentives for Businesses

Here are some of the major energy provisions of the American Investment and Recovery Act that apply to small- and micro-businesses:

  1. Extension of Renewable Energy Production Tax Credit: This law extends the “eligibility dates” of a tax credit for business facilities that use wind, closed-loop biomass, open-loop biomass, geothermal energy, municipal solid waste, qualified hydropower and marine and hydrokinetic renewable energy. The "placed in service date” is now Dec. 31, 2012 for wind facilities and Dec. 31, 2013 for the other facilities.
  2. Election of Investment Credit in Lieu of Production Credit: Businesses that operate facilities that produce electricity from wind and some other renewable resources after Dec. 31, 2008 can now choose either the energy investment tax credit or the production tax credit.
  3. Repeal of Certain Limits on Business Credits for Renewable Energy Property: ARRA repeals the $4,000 limit on the 30 percent tax credit for small wind energy property and the limitation on property financed by subsidized energy financing for property placed in service after Dec. 31, 2008.
  4. Coordination with Renewable Energy Grants: Business taxpayers can apply for a grant in lieu of claiming either the energy investment tax credit or the renewable energy production tax credit for property placed in service in 2009 or 2010.
  5. Temporary Increase in Credit for Alternative Fuel Vehicle Refueling Property: Qualified property placed in service in 2009 and 2010 is now eligible for a 50 percent credit, and the per-business location limit increases to $50,000. Property relating to hydrogen remains at the 30 percent rate, but the per-business location limit rises to $200,000.

Find more information on tax incentives for businesses at www.irs.gov/newsroom.

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