House set to complete work on small business bill

The House is expected to complete work Thursday on legislation that creates a $30 billion fund to boost lending to small businesses struggling to get credit. 

The measure, which is designed to help small businesses hire and expand operations during the economic downturn, was briefly delayed when it headed back to the House Rules Committee Wednesday for minor technical tweaks to a couple of amendments. 

The legislation is set for floor action Thursday, according to a Democratic aide. 

The $30 billion fund could provide as much as $300 billion in lending to small businesses, according to the Independent Community Bankers Association. 

Banks will less than $1 billion in assets could receive capital investments up to 5 percent of their risk-weighted assets. Those with between $1 billion and $10 billion in assets could receive up to 3 percent. 

The bill "has important incentives to encourage greater small business lending by reducing the dividend rate community banks pay on the capital as they increase their lending," according to a supportive release from the Independent Community Bankers of America. 

Community banks would repay the capital over time. The bill is separate from the Troubled Asset Relief Program and oversight is mandated by Congress, the General Accountability Office and the Treasury Department. 

The bill is moving almost in tandem with another measure that provides tax breaks to small businesses. 

The House voted 247-170 on Tuesday to advance that bill. 

That portion of the bill temporarily excludes from taxation the sale of qualified C corporation stock, and provides penalty relief for small businesses that invest in certain listed transactions. 

It also increases tax by limiting the use of Grantor Retained Annuity Trusts and making the highly corrosive fuel called "crude tall oil" ineligible for a cellulosic biofuel producer credit.