WASHINGTON, D.C. - Senators John F. Kerry (D-Mass.) and Olympia Snowe (R-Maine)today introduced bi-partisan tax legislation to aid emerging growth businesses, the BRIDGE (Business Retained Income During Growth and Expansion) Act. Reps. Jim DeMint (R-S.C.), and Brian Baird (D-Wash.) introduced the measure in the House in early October.

"With banks tightening their credit and a slumping economy taking its toll, emerging- growth companies have nowhere to turn," said Sen. John F. Kerry (D-Mass). "The BRIDGE Act will ensure that rapidly growing small businesses have resources to finance their growth and the capital needed to continue producing new jobs and new opportunities."

The BRIDGE Act of 2002, would allow a rapidly growing business to elect to defer up to $250,000 in federal taxes for two years to allow the business to reinvest, expand, and continue to create new jobs. In addition to Senators Kerry and Snowe, the bill is cosponsored by Senators Joe Lieberman (D-CT) ,Jeff Bingaman (D-NM) and Sen. Robert Bennett (R-UT) . The bill is supported by a coalition of business trade organizations which includes the National Commission on Entrepreneurship, the Council of Growing Companies, the Small Business Legislative Council, and the Small Business Survival Committee.

"In our role as CFOs for hundreds of emerging growth businesses nationwide, we have seen again and again how difficult it can be for companies to raise money when their funding needs fall between $250,000 and $1 million. These businesses are effectively in 'No Man's Land' when it comes to capital needs, and the BRIDGE Act is designed to help them survive this critical growth period," said Douglass Tatum, CEO of Tatum CFO Partners, LLP.

The BRIDGE Act is projected to generate a net gain of $1.1 billion for the government over a 10-year period, according to estimates by the Joint Committee on Taxation and is designed to help small and medium-sized businesses without long-term revenue losses for the federal government. The BRIDGE Act would assist growing businesses that have up to $10 million in annual sales (gross receipts) and use accrual accounting for tax purposes. Firms with gross receipts of 10 percent or more above their average revenues for the previous two years would be allowed to defer up to $250,000 in federal income tax liability for two years. Deferred taxes would be repayable with interest at the federal underpayment rate over a four-year period. The tax-deferred amount would be deposited in a separate trust account -- a BRIDGE account -- and the firm could borrow against the deferred amount, as collateral, for business purposes. To allow for Congressional review of the new law and a General Accounting Office study of its effectiveness, no tax deferrals would be permitted after December 31, 2005.