Sen. Evan Bayh and U.S. Rep. Joe Donnelly, both Democrats representing Indiana, have introduced two pieces of legislation supporting the RV industry.
Donnelly and Bayh were successful in including a tax deduction for new motorhomes in last year’s American Recovery and Reinvestment Act, but the benefit expired at the end of 2009. To continue to protect jobs throughout Indiana’s important RV industry, Thursday (Feb. 25) they introduced legislation that would renew for two more years the tax benefit for new motorhomes and also expand it to include new towable RVs and truck campers, according to a joint release by the officials.
The legislation would make amounts paid on state sales and excise taxes deductible and could be claimed on up to $49,500 of the price of a new purchase. The tax relief could be claimed by both itemizers and non-itemizers, and they could save up to $1,100.
“Making new RVs more affordable for two additional years will assist the RV industry in bouncing back from this recession,” said Donnelly, whose congressional district includes Elkhart County. “We are seeing positive results from last year’s tax benefit, but we’re not out of the woods yet. By continuing to provide tax relief to new customers, we will protect and create jobs in north central Indiana.”
“With the RV industry adding jobs and showing signs of recovery, now is the time to ensure the momentum continues,” Bayh said. “Elkhart County is the ‘RV capital of the world,’ and Congress must do more to nurture the industry’s recovery. This legislation builds on last year’s important tax relief to protect and grow RV sales and create jobs for the hard-working Hoosiers who keep this industry moving forward.”
“Continuing the sales and excise tax deductions for motorhomes and expanding this provision to include travel trailers and truck campers are exactly what the RV industry needs,” said Recreation Vehicle Industry Association (RVIA) President Richard Coon. “It will improve the economic environment in our industry, stimulate RV sales and help speed the RV market’s recovery.”
Bayh and Donnelly also introduced HR 1073/SR 410, a resolution honoring the 100th anniversary of RVs.
“I’m proud to represent the ‘RV capital of the world,’ which has benefited the north central Indiana economy for years,” said Donnelly. “I am pleased to recognize the 100th anniversary of a vehicle that has brought both jobs and recreation to our area.”
“The RV industry is an important driver of Indiana’s economy and an important source of recreation for families across the country,” Bayh said. “I congratulate the RV industry on its first 100 years, and I look forward to even more success in the years to come.”
In 2009, Bayh received the National Legislative Award from the RVIA.
Donnelly is seeking re-election this year. Bayh announced earlier he will not seek re-election.
Several federal initiatives to make Small Business Administration (SBA) loans more affordable, more flexible and more appealing to banks and businesses have been extended for two months after the program ran out of money because of its success.
New legislation signed last week by President Obama includes $125 million to maintain the enhancements for SBA lending under this February’s $780 billion American Recovery and Reinvestment Act, or ARRA, according to the Buffalo (N.Y.) News.
Those enhancements include higher government loan guarantees of up to 90% on the SBA’s primary 7(a) and 504 loan programs, as well as fee waivers on most of those loans. The original economic-stimulus legislation provided $730 million to the SBA, including $375 million to increase the guarantee and waive fees, but those funds were used up Nov. 23, the SBA said.
During the life of the program, more than 1,200 lenders came back to SBA loan programs, which provided more than $16.5 billion to small businesses. Weekly loan volume for the agency also increased by more than 75% when compared to the beginning of the year, before the stimulus.
The SBA now estimates that the added funding will support an additional $4.5 billion in lending.
“The extension of these programs through February is important to continuing our path toward recovery and will mean thousands more small business owners have access to the credit they need,” SBA Administrator Karen G. Mills said in a news release.
The extensions of the benefits, included in a Defense Department appropriations bill, authorizes the 90% guarantees through Feb. 28, while the fee relief extends until the funding is used up or the fiscal year ends, whichever is first. The guarantees returned to the usual 75% to 85% after the money was used up.
Loans that have already been approved are sometimes canceled or not funded for various reasons. So when funding ran out last month, the SBA created a Recovery Loan Queue so eligible small businesses and their lenders could put themselves on the list for an ARRA loan if funding became available.
There are currently 1,069 loans totaling $530 million in that queue. Those on the list will be the first to benefit from the new money, followed by new loan approvals starting today (Dec. 29), the agency said. Once the funding is used up, the SBA will restore the queue.
Any loans funded between Nov. 23 and today cannot get the benefits retroactively; nor can they be canceled and resubmitted. Other SBA programs under the stimulus act are not affected, including the agency’s America’s Recovery Capital loans or its microloans, the SBA said.
The higher guarantees and fee waivers are among several efforts by the agency and the Obama administration to free up credit markets and boost small businesses. Such firms are widely seen as the engine of the nation’s economy because they make up the vast majority of employers and generate nearly two-thirds of all new jobs.
However, small businesses have been struggling to get the credit they need to expand and add jobs because nonbank sources of capital dried up and fearful banks have sharply tightened their lending standards. Officials hope that by getting money into the hands of small businesses and spurring them to growth, they can drive a stronger economic recovery overall.
Among the most significant efforts were successful attempts to loosen up credit markets that had frozen a year ago because of fear about rising losses from bad loans. Through a credit line known as TALF, the Treasury Department and the Federal Reserve financed more than $1 billion in purchases of investment securities backed by SBA loans. Officials later unveiled a secondary market purchase program promising more liquidity for lenders if they made new loans.
The government also passed several tax cuts and other tax benefits in the stimulus law to add to businesses’ cash flow. And it has been monitoring small business lending by the 22 largest banks every month, with hopes of working with regulators to require all banks to report small business lending every quarter starting next year.
In addition, SBA expanded eligibility for its loan programs to more than 70,000 businesses through new size standards while supporting $30 million in floor-plan inventory financing for auto, recreational vehicle and boat dealerships.
And the administration announced initiatives to support small business lending by community-development financial institutions and to provide lower-cost capital to community banks that submit plans to increase small-business lending. Officials have also called for increasing the maximum size of SBA 7(a) loans to $5 million and increasing the guarantees for Section 504 loans.
Finally, a bipartisan group of U. S. senators has introduced legislation to allow credit unions to make more business loans. Under current law, credit unions’ business loans cannot exceed 12.25% of total assets. The bill would double that to 25% and increase the maximum loan to $250,000, from $50,000.
The credit union trade group projects that this would add $10 billion in business funding and yield more than 100,000 new jobs just in the first year.
“If we’re going to create new jobs and rebuild our economy for the long term, small businesses need more access to credit,” Gillibrand said in a news release.
U.S. Rep. Joe Donnelly, D-Ind., introduced legislation last week to extend an expiring tax deduction for state and local sales or excise taxes on the purchase of new motorhomes.
Donnelly and Sen. Evan Bayh, D-Ind., authored the original provision and got it included in the American Recovery and Reinvestment Act, but it only covers vehicles purchased in calendar year 2009.
“A strong recreational vehicle industry is crucial to north central Indiana, and especially Elkhart County,” Donnelly said in a news release. “Despite tumultuous times for RV makers, sales have begun to rebound and local companies are starting to hire again. I think the deduction has played a role in the comeback of the industry. I introduced this legislation to help continue the trend in rising RV purchases and new production.”