Small Business Succession Planning Act
Bill: H.R.971 | Sponsor: Rep. Bustos, Cheri (D-IL)
Policy area: Commerce

Summary:
Small Business Succession Planning Act
This bill requires the Small Business Administration (SBA) to establish a program to assist small businesses with developing and implementing business succession plans. The bill also provides a tax credit for a business that establishes a succession plan or that successfully carries out such a plan.
A business succession plan identifies who will assume the ownership responsibilities of a small business upon the owner's death or retirement, and it includes an operational description of the small business to ensure the continuation of operations.
To carry out the program, the SBA must develop and make publicly available a toolkit to assist small business with succession planning. Further, it must train resource partners on the toolkit, educate small businesses about the program, and ensure that each SBA district office and each resource partner employs someone to counsel small businesses on using the toolkit.

To require the Administrator of the Small Business Administration to 
   establish a program to encourage small business concerns to make 
           business succession plans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Succession Planning 
Act''.

SEC. 2. BUSINESS SUCCESSION PLANS FOR SMALL BUSINESS CONCERNS.

    (a) In General.--The Administrator of the Small Business 
Administration shall establish a program to help small business 
concerns develop and implement business succession plans.
    (b) Toolkit.--The Administrator, in consultation with resource 
partners, shall develop a toolkit to assist small business concerns in 
establishing a business succession plan. Such toolkit shall be made 
available on a public website of the Administration.
    (c) Program Components.--The Administrator--
            (1) shall train resource partners on using the toolkit 
        described in subsection (b) with small business concerns;
            (2) shall educate small business concerns about the program 
        established under this section;
            (3) shall ensure that each district office of the 
        Administration and each resource partner described in 
        subparagraphs (B) through (E) has an employee with the specific 
        job responsibility of providing counseling, in person or 
        virtually, to small business concerns on use of the toolkit 
        described in subsection (b); and
            (4) may hold workshops or events on business succession 
        planning.
    (d) Plan.--Not later than 120 days after the date of the enactment 
of this Act, the Administrator shall submit to the appropriate 
committees a plan for increasing the amount of small business concerns 
that have business succession plans. Such plan shall include a 
description of methods to increase the frequency and use of business 
succession plans by small business concerns owned and controlled by 
socially and economically disadvantaged individuals (as defined in 
section 8(d)(3)(C) of the Small Business Act (15 U.S.C. 637(d)(3)(C))).
    (e) Tax Credit for Small Business Concerns Which Complete a 
Business Succession Plan.--
            (1) In general.--Subpart D of part IV of subchapter A of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        adding at the end the following new section:

``SEC. 45U. BUSINESS SUCCESSION PLAN CREDIT.

    ``(a) In General.--For purposes of section 38, the business 
succession plan credit determined under this section is--
            ``(1) $250 for the first taxable year during which the 
        Administrator of the Small Business Administration certifies 
        that the taxpayer has established a business succession plan, 
        that the taxpayer is a small business concern at the time that 
        such plan is established, and that such plan does not provide 
        for substantially all of the interests or assets of small 
        business concern to be acquired by one or more entities which 
        are not small business concerns, and
            ``(2) $250 for the first taxable year during which such 
        Administrator certifies that the taxpayer has successfully 
        completed a succession of responsibilities pursuant to a 
        business succession plan which was certified under paragraph 
        (1), that the taxpayer is a small business concern immediately 
        after such succession, and that the business with respect to 
        which such business succession plan relates was a small 
        business concern immediately prior to such succession.
    ``(b) Recapture of Credits.--
            ``(1) Recapture of credit for establishment of plan.--If, 
        during the 3-year period beginning on the date of the 
        establishment of a business succession plan described in 
        subsection (a)(1), substantially all of the equity interests in 
        the taxpayer or substantially all of the assets of the taxpayer 
        are acquired by one or more entities which are not small 
        business concerns, the taxpayer's tax imposed under this 
        chapter for the taxable year during which such interest or 
        assets are so acquired shall be increased by amount of the 
        credit allowed to the taxpayer under subsection (a)(1) for such 
        taxable year or any prior taxable year.
            ``(2) Recapture of credit for completion of succession.--
        If, during the 3-year period beginning on the date of the 
        completion of a succession of responsibilities described in 
        subsection (a)(2), substantially all of the equity interests in 
        the taxpayer or substantially all of the assets of the taxpayer 
        are acquired by one or more entities which are not small 
        business concerns, the taxpayer's tax imposed under this 
        chapter for the taxable year during which such interests or 
        assets are so acquired shall be increased by amount of the 
        credit allowed to the taxpayer under subsection (a)(2) for such 
        taxable year or any prior taxable year.
    ``(c) Definitions.--For purposes of this section, the terms `small 
business concern' and `business succession plan' have the respective 
meanings given such terms under section 2(g) of the Small Business 
Succession Planning Act.''.
            (2) Credit allowed as part of general business credit.--
        Section 38(b) is amended by striking ``plus'' at the end of 
        paragraph (32), by striking the period at the end of paragraph 
        (33) and inserting ``, plus'', and by adding at the end the 
        following new paragraph:
            ``(34) the business succession plan credit determined under 
        section 45U(a).''.
            (3) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 of such Code is 
        amended by adding at the end the following new item:

``Sec. 45U. Business succession plan credit.''.
            (4) Report to congress.--Not later than 90 days after the 
        date of the enactment of this Act, the Secretary of the 
        Treasury (or the Secretary's delegate) shall submit a report to 
        the Committee on Ways and Means of the House of Representatives 
        and the Committee on Finance of the Senate describing the steps 
        which will be taken to enforce the recapture provisions of 
        section 45U(b) of the Internal Revenue Code of 1986, as added 
        by this section.
            (5) Effective date.--The amendments made by this subsection 
        shall apply to taxable years ending after the date of the 
        enactment of this Act.
    (f) Authorization of Appropriations.--There is authorized to be 
appropriated to the Administrator such sums as may be necessary for 
fiscal years 2021 through 2026 to carry out the requirements of this 
section.
    (g) Definitions.--In this section:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) Administration.--The term ``Administration'' means the 
        Small Business Administration.
            (3) Appropriate committees.--The term ``appropriate 
        committees'' means--
                    (A) the Committee on Small Business and 
                Entrepreneurship and the Committee on Appropriations of 
                the Senate; and
                    (B) the Committee on Small Business and the 
                Committee on Appropriations of the House of 
                Representatives.
            (4) Business succession plan.--The term ``business 
        succession plan'' means a document that--
                    (A) identifies an individual who will assume the 
                responsibilities of the owner to a small business 
                concern upon the death or retirement of such owner, 
                along with the legal documents necessary; and
                    (B) includes an operational description of the 
                small business concern to ensure the continuation of 
                operations of such concern.
            (5) Resource partners.--The term ``resource partners'' 
        means--
                    (A) any office of the Administration;
                    (B) small business development centers (defined in 
                section 3 of the Small Business Act (15 U.S.C. 632));
                    (C) women's business centers (described under 
                section 29 of such Act (15 U.S.C. 656));
                    (D) chapters of the Service Corps of Retired 
                Executives (established under section 8(b)(1)(B) of 
                such Act (15 U.S.C. 637(b)(1)(B)));
                    (E) Veteran Business Outreach Centers (described 
                under section 32 of such Act (15 U.S.C. 657b)); and
                    (F) any other entity, as determined by the 
                Administrator.
            (6) Small business concern.--The term ``small business 
        concern'' has the meaning given under section 3 of the Small 
        Business Act (15 U.S.C. 632).
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