Bustos, Garbarino, Crow, Rice Unveil New Business Succession Planning Legislation

Press Release

TodayRepresentatives Cheri Bustos (IL-17), Andrew Garbarino (NY-02), Jason Crow (CO-06) and Tom Rice (SC-07) unveiled new bipartisan legislation that would provide small business owners the support needed to create a business succession plan.

In 2019, Representative Bustos held economic roundtables with community leaders in Canton, Freeport, Galesburg and Sterling, Illinois. One common theme heard across these communities was that owners needed help passing along their small businesses after they move on to new opportunities, retire or pass away.

"When even one small business closes, an entire community loses. With the global pandemic forcing many of our small business owners to take a new approach to keeping their business healthy, succession planning has become more critical than ever before," said Rep. Bustos. "I am proud to introduce the Small Business Succession Planning Act today with Reps. Garbarino, Crow and Rice. This bipartisan legislation will help give our small businesses the tools they need to build a healthy financial future for themselves and their communities."

"As a third-generation Long Islander and small business owner, I know first-hand the blood, sweat, and tears small businesses owners pour into ensuring their businesses are a success. Unfortunately, more than half of our nation's small business owners do not have a succession plan in place -- leaving small businesses, which are pillars in our communities, vulnerable to closure," said Rep. Garbarino. "I'm proud to join my colleagues in introducing commonsense legislation to better equip our small business community with tools to develop succession plans and build-upon framework I've laid out as a former assemblyman and private practice attorney."

"Small businesses are not just the lifeblood of our economy -- they help families build wealth and security, especially underserved and immigrant business owners," said Rep. Crow. "But too many small businesses do not have a plan for succession, resulting in business closures or forced sales. Small business owners work hard and often spend their lives building their businesses. This bipartisan legislation gives them the tools they need to plan for the future."

"In the United States there are nearly 30 million small businesses, but less than 42% have succession plans. Incentivizing succession plans through a small tax credit will not only benefit the business, but will also benefit the business's community," said Rep. Rice. "Small businesses are the backbone of our economy. I am proud to introduce this legislation that focuses on the future and gives small businesses access to the tools they need to succeed, no matter what life throws at them."

A small business closing can have a significant impact on the larger town or city where the business is located. Small businesses drive local economies and offer employment opportunities, services to other businesses and build wealth for the community as a whole.

Currently, more than 58 percent of business owners have no succession plan and 47 percent of business owners over the age of 65 have no plan. That includes Baby Boomers, who own 2.34 million small businesses in the U.S. and employ more than 25 million people.

READ: One-pager on the Small Business Succession Planning Act

The Small Business Succession Planning Act would:

Direct the Small Business Administration (SBA) to create an online business succession planning toolkit that walks small businesses through the process of creating a business succession plan with the help of SBA or resource partners. It would also require the SBA to provide trained staff or partners to help small businesses create their plan;
Encourage the SBA to hold business succession planning workshops or events across the country;
Create a plan to increase business succession plans among small businesses, including among minority-owned businesses, through the SBA;
Incentivize small businesses owners to create their own plan through multiple tax breaks for businesses:
This includes a one-time $250 tax break to create a business succession plan and an additional one-time $250 tax break when the succession plan is executed.
READ: One-pager on the Small Business Succession Planning Act

The legislation is endorsed by 18 national, state and local-level small business organizations, including:

The National Small Business Association (NSBA), Illinois Farm Bureau (IFB), Rockford Chamber of Commerce, Quad Cities Chamber of Commerce, Peoria Chamber of Commerce, Greater Quad Cities Hispanic Chamber of Commerce, the East Peoria Chamber of Commerce, Sauk Valley Area Chamber of Commerce, Monmouth Area Chamber of Commerce, Northwestern Illinois Economic Development, the Knox County Area Partnership for Economic Development, Mercer County Better Together, Spoon River Partnership for Economic Development, Greater Sterling Development Corporation, Kewanee Chamber of Commerce, Hanover Chamber of Commerce, Pekin Area Chamber of Commerce and Freeport Area Chamber of Commerce.

"Often, small business owners don't realize how important succession planning is until it's too late and they're ready to move on," said NSBA President and CEO Todd McCracken. "Elevating awareness and providing affordable, reliable resources that can help hard-working small businesses plan for the future can greatly help people avoid this end-of-ownership cliff. I applaud Congresswoman Bustos on her leadership on this issue."

"Illinois Farm Bureau policy supports legislation or programs that would incentivize farm succession planning," said IFB president Richard Guebert, Jr. "That's why Farm Bureau's pleased to support Rep. Bustos' Small Business Succession Planning Act. Our members would benefit from the bill's tax incentives that would allow them to cover the costs of writing farm succession plans, which is something we all have to do."

"The Rockford Chamber welcomes this proposed legislation to encourage small businesses to engage in succession planning," said Einar Forsman President and CEO, Rockford Chamber of Commerce. "All too frequently businesses that are valuable to a community are ill-prepared for a legacy transition. Keeping local businesses local is a top priority for any community."

"As we talk with businesses in the Quad Cities, it is clear succession planning is a key concern employers have for a steady financial future," said Paul Rumler, President & CEO, Quad Cities Chamber of Commerce. "The Small Business Succession Planning Act will help to incentivize businesses to consider their next steps to remain viable, and will keep the Quad Cities' economy strong by retaining job-creators for years to come."

"The Greater Quad Cities Hispanic Chamber of Commerce endorses the Small Business Succession Planning Act. Its focus on establishing a toolkit to help small businesses develop and implement a plan in the instance that they need help passing along their business after they move on to new opportunities, retire or pass away, will allow small businesses to prosper in the community by creating an economic impact," said Janessa Calderon, Executive Director, Greater Quad Cities Hispanic Chamber of Commerce. "This bill is in agreement with the The Greater Quad Cities Hispanic Chambers' mission to support, promote and enhance the growth and success of our local businesses and to leverage the community's assets, contributions and unique Hispanic Cultural identity to generate new business."

"The East Peoria Chamber of Commerce supports the efforts to help our small business community," Rick Swan Executive Director, The East Peoria Chamber of Commerce. "Planning and succession resources are important for the longevity of a community, and making these available will bring continued benefits to our small businesses, in both the current recovery period and beyond."

"Small Business succession planning is a critical component to the vitality of rural America" said Kris Noble, Executive Director, Sauk Valley Area Chamber of Commerce. "Any assistance and resources, such at that which would be provided by the Small Business Succession Planning Act, would be great tools for small business owners."

"Retirement is one of the top reasons for business closure in northern Illinois," said Emily Legel, Executive Director, Northwestern Illinois Economic Development. This credit will give businesses the resources they need to prepare, and save some legacy businesses (and local economies) in the process."

"The lack of a succession strategy jeopardizes the continuity of small businesses all across the United States," said Ken Springer, President, The Knox County Area Partnership for Economic Development. "This bill would create a federal tax incentive for small business owners to conduct succession planning, which will help more small businesses address this issue proactively. The Knox County Area Partnership for Economic Development supports the efforts by Congresswoman Bustos to create a federal tax credit for small business succession planning."

"Our rural communities include a strong base of entrepreneurs who have a personal relationship with the businesses they built," said Mercer County Better Together (MCBT) Executive Director Kyle McEwen. "At the same time, people with that same entrepreneurial spirit have the tools and skills to lead these businesses into the next generation. The key is to incentivize these transitions and make them as seamless as possible. This bill aims to do just that."

"The Greater Sterling Development Corporation is pleased Congresswoman Bustos has put forth the Small Businesses Succession Planning Act bill to assist businesses in what seems to be an issue often left open," said Heather A. Sotelo, Executive Director, Greater Sterling Development Corporation. "With the particular subject of business succession, planning prior to the time of need is essential. We thank Congresswoman Bustos thinking outside the normal box of the SBA, and creating a grant opportunity for small businesses."

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