World Library  
Flag as Inappropriate
Email this Article

Small Business Job Protection Act of 1996

Article Id: WHEBN0031737297
Reproduction Date:

Title: Small Business Job Protection Act of 1996  
Author: World Heritage Encyclopedia
Language: English
Subject: Adoption tax credit, Fair Labor Standards Act, United States Department of Labor, Presidency of Bill Clinton
Publisher: World Heritage Encyclopedia

Small Business Job Protection Act of 1996

The Small Business Job Protection Act of 1996 (Pub.L. 104–188, H.R. 3448, 110 Stat. 1755, enacted August 20, 1996) is a United States federal law. It was sponsored by Rep. Bill Archer (R-TX) and it was signed into law by President Bill Clinton.

The stated intent of the bill is:

"To provide tax relief for small businesses, to protect jobs, to create opportunities,to increase the take home pay of workers, to amend the Portal-to-Portal Act of 1947 relating to the payment of wages to employees who use employer owned vehicles, and to amend the Fair Labor Standards Act of 1938 to increase the minimum wage rate and to prevent job loss by providing flexibility to employers in complying with minimum wage and overtime requirements under that Act."

Effects of Act


The Act created a simplified 401(k) retirement plan to make it easier for small businesses to offer pension plans to their employees.


A nonrefundable tax credit of up to $5,000 per child for adoption expenses and $6,000 for children with special needs was established.

Entitled "Removal of Barriers to Interethnic Adoption," this portion of the act is known as the Interethnic Placement Act (or IEPA).[1][2][3] Its amendments strengthened and clarified the Multi-Ethnic Placement Act of 1994 (also known as MEPA).[1][2][3]

IEPA eliminated some unclear language in MEPA about cultural considerations in the foster care and adoption processes.[1][2][3][4] IEPA's primary purpose was to eliminate racial discrimination during federally funded foster care and adoption placements so that children will not be delayed nor denied placement based on their race, color, or national origin.[1][2][3][4] This protection against discrimination also extends to foster and adoptive parents.[2][3] IEPA established financial penalties for states that do not comply with these provisions.[1][2][3][4] IEPA also reiterated MEPA's requirement that agencies need to recruit more racially diverse foster and adoptive parents in order to reflect the diverse children in need of placements.[2][3][4]

Capital expense

The maximum amount claimed for capital expenses allowed by small businesses was increased by $7,000. The full amount was phased in over time.

Education tax incentive

Small businesses were allowed to exclude as much as $5,250 from an employee's taxable income for educational assistance provided by the employer. This incentive was through May 1997.

Minimum wage

The Act increased minimum wage in two steps, from $4.25 per hour to $4.75 effective October 1, 1996 and then to $5.15 on September 1, 1997.

Research tax credit

The Research tax credit had expired on July 1, 1995. This Act extended the credit through May 1997 but did not allow it to be retroactive.

Work opportunity tax credit

The Targeted Jobs Tax Credit was replaced with the Work opportunity tax credit.


Section 1621 created the financial asset securitization investment trust (FASIT), a type of special purpose entity used for securitization of any debt and issuance of asset-backed securities.[5] In the Enron scandal, Enron used FASITs to avoid Subpart F rules on foreign income,[6] and because of their inherent abuse potential,[7] were repealed under section 835 of the American Jobs Creation Act of 2004.


  1. ^ a b c d e McCarthy, J., Marshall, A., Collins, J., Arganza, G., Deserly, K., & Milon, J. (2003). Relevant Federal Laws/Policies. In A Family’s Guide to the Child Welfare System (pp. 111-116). Retrieved from
  2. ^ a b c d e f g Removal of Barriers to Interethnic Adoption Law & Legal Definition. (n.d.) Retrieved from
  3. ^ a b c d e f g The Interethnic Provisions of 1996 – P.L. 104-188. (n.d.). In Major Federal Legislation Index and Search. Administration for Children & Families. Retrieved from Legislation.viewLegis&id=47
  4. ^ a b c d Removal of Barriers to Interethnic Adoption, Pub. L. 104-188. Small Business Job Protection Act of 1996 § 1808. Retrieved from
  5. ^ Ferst, Joseph L.; Miyashiro, Milton K. (1999). "Federal Income Taxation of REMICs and CMBS". The Handbook of Mortgage Backed Securities (2nd ed.). Fabozzi and Jacob. p. 441. 
  6. ^ Niskanen, William A. (2007). After Enron: Lessons for Public Policy. Rowman & Littlefield. pp. 306–307.  
  7. ^ Report of Investigation of Enron Corporation and Related Entities Regarding Federal Tax and Compensation Issues, and Policy Recommendations,  

External links

  • Full text of Act
  • Presidential statement
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from World eBook Library are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.