WASHINGTON – Sen. John F. Kerry (D-Mass.), Ranking Member of the Committee on Small Business and Entrepreneurship, today announced the approval of amendments designed to restore the American manufacturing base, foster job growth, and encourage venture capital investment in small businesses. The Kerry provisions were included in the Jumpstart Our Business Strength (JOBS) Act (S.1637) that recently passed the Senate Committee on Finance.

The first Kerry amendment accepted by the Finance Committee extends the JOBS Act’s tax provisions to include small employers that file as sole proprietors and partnerships. The legislation will provide a tax cut to U.S. manufacturers to soften the blow that domestic manufacturers will face in the absence of Extraterritorial Income (ETI) Act -- which was recently found by the World Trade Organization to violate international trade laws.

“This country’s manufacturing base continues to lose ground, lose jobs, and lose hope,” Kerry said. “This legislation will stop the assault on U.S. manufacturing by leveling the playing field for a sector that is finding it impossible to participate in a global economy with international competitors that don’t play by the same rules. With this legislation we will have secured and strengthened our nation’s manufacturers, increased job creation, and helped speed up the economic recovery.”

The second amendment Kerry successfully fought to include in the JOBS Act would increase venture capital investment in small businesses by exempting debenture Small Business Investment Companies (SBICs) from the unrelated business taxable income (UBTI) rules, which will allow them to gain greater access to institutional investors.

In a letter to the Finance Committee, Senator Kerry requested the UBTI exemption be included in the JOBS Act as a means of increasing investment in the small business and manufacturing sectors. Senator Olympia J. Snowe (R-Maine), Chair of the Committee on Small Business and Entrepreneurship, also signed the letter.

“This will create jobs by increasing venture capital investments that fuel high-growth small businesses, which are among the nation’s best job creators,” Kerry said. “SBICs that are funded through debentures will now be able to attract more institutional investors and provide financing to more cutting-edge small businesses and small manufacturers.”

The current UBTI rules have deterred some potential investors from investing in Debenture SBICs, reducing the amount investment capital available for small businesses, particularly small domestic manufacturers. Almost 32 percent of all SBIC investments have occurred in manufacturing companies, totaling $6.4 billion over the last five years. The Kerry provision would generate $500-$600 million in new capital from SBICs, according to industry estimates, which would be invested directly in small businesses and small manufacturers.