To provide tax relief for small businesses, and for other purposes.

Summary: Responsible Reinvestment Act of 2009 - Makes permanent the repeal of the estate tax.

Amends the Internal Revenue Code to: (1) increase to $500,000 the maximum expensing allowance for depreciable business assets; (2) allow first-year expensing of manufacturing and agricultural property; (3) allow a 20% tax deduction for qualified small business income; (4) allow a deduction from self-employment income for health insurance, health savings account contributions, and simplified employee pension plan contributions; and (5) increase the limit on the tax deduction for contributions to a simplified employee pension plan.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Responsible Reinvestment Act of 
2009''.

SEC. 2. ESTATE TAX REPEAL MADE PERMANENT.

    Section 901 of the Economic Growth and Tax Relief Reconciliation 
Act of 2001 shall not apply to title V of such Act.

SEC. 3. INCREASED EXPENSING FOR SMALL BUSINESS.

    (a) Dollar Limitation.--Paragraph (1) of section 179(b) of the 
Internal Revenue Code of 1986 (relating to dollar limitation) is 
amended by striking ``$25,000 ($125,000 in the case of taxable years 
beginning after 2006 and before 2011)'' and inserting ``$500,000''.
    (b) Increase in Qualifying Investment at Which Phaseout Begins.--
Paragraph (2) of section 179(b) of such Code (relating to reduction in 
limitation) is amended by striking ``$200,000 ($500,000 in the case of 
taxable years beginning after 2006 and before 2011)'' and inserting 
``$500,000''.
    (c) Inflation Adjustments.--Section 179(b)(5)(A) of such Code 
(relating to inflation adjustments) is amended--
            (1) by striking ``and before 2011'', and
            (2) by striking ``$125,000 and''.
    (d) Revocation of Election.--Section 179(c)(2) of such Code 
(relating to election irrevocable) is amended by striking ``and before 
2011''.
    (e) Computer Software.--Clause (ii) of section 179(d)(1)(A) of such 
Code is amended by striking ``and before 2011''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.

SEC. 4. ACCELERATED DEPRECIATION FOR MANUFACTURING AND AGRICULTURAL 
              PROPERTY.

    (a) In General.--The table contained in section 168(c) of the 
Internal Revenue Code of 1986 is amended by inserting before the row 
relating to 3-year property the following new row:


 
 
------------------------------------------------------------------------
Any qualified manufacturing or agricultural     1 year
 property.
------------------------------------------------------------------------

    (b) Qualified Manufacturing or Agricultural Property.--Subsection 
(e) of section 168 of such Code is amended by adding at the end the 
following new paragraph:
            ``(9) Qualified manufacturing or agricultural property.--
        The term `qualified manufacturing or agricultural property' 
        means any tangible personal property which is used in the trade 
        or business of manufacturing or agriculture.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after the date of the enactment of 
this Act.

SEC. 5. DEDUCTION FOR QUALIFIED SMALL BUSINESS INCOME.

    (a) In General.--Paragraph (1) of section 199(a) of the Internal 
Revenue Code of 1986 is amended to read as follows:
            ``(1) In general.--There shall be allowed as a deduction an 
        amount equal to the sum of--
                    ``(A) 9 percent of the lesser of--
                            ``(i) the qualified production activities 
                        income of the taxpayer for the taxable year, or
                            ``(ii) taxable income (determined without 
                        regard to this section) for the taxable year, 
                        and
                    ``(B) in the case of a qualified small business for 
                a taxable year beginning in 2009 or 2010, 20 percent of 
                the lesser of--
                            ``(i) the qualified small business income 
                        of the taxpayer for the taxable year, or
                            ``(ii) taxable income (determined without 
                        regard to this section) for the taxable 
                        year.''.
    (b) Qualified Small Business; Qualified Small Business Income.--
Section 199 of such Code is amended by adding at the end the following 
new subsection:
    ``(e) Qualified Small Business; Qualified Small Business Income.--
            ``(1) Qualified small business.--
                    ``(A) In general.--For purposes of this section, 
                the term `qualified small business' means any taxpayer 
                for any taxable year if the annual average number of 
                employees employed by such taxpayer during such taxable 
                year was 500 or fewer.
                    ``(B) Aggregation rule.--For purposes of 
                subparagraph (A), any person treated as a single 
                employer under subsection (a) or (b) of section 52 
                (applied without regard to section 1563(b)) or 
                subsection (m) or (o) of section 414 shall be treated 
                as 1 taxpayer for purposes of this subsection.
                    ``(C) Special rule.--If a taxpayer is treated as a 
                qualified small business for any taxable year, the 
                taxpayer shall not fail to be treated as a qualified 
                small business for any subsequent taxable year solely 
                because the number of employees employed by such 
                taxpayer during such subsequent taxable year exceeds 
                500. The preceding sentence shall cease to apply to 
                such taxpayer in the first taxable year in which there 
                is an ownership change (as defined by section 382(g) in 
                respect of a corporation, or by applying principles 
                analogous to such ownership change in the case of a 
                taxpayer that is a partnership) with respect to the 
                stock (or partnership interests) of the taxpayer.
            ``(2) Qualified small business income.--
                    ``(A) In general.--For purposes of this section, 
                the term `qualified small business income' means the 
                excess of--
                            ``(i) the income of the qualified small 
                        business which--
                                    ``(I) is attributable to the actual 
                                conduct of a trade or business,
                                    ``(II) is income from sources 
                                within the United States (within the 
                                meaning of section 861), and
                                    ``(III) is not passive income (as 
                                defined in section 904(d)(2)(B)), over
                            ``(ii) the sum of--
                                    ``(I) the cost of goods sold that 
                                are allocable to such income, and
                                    ``(II) other expenses, losses, or 
                                deductions (other than the deduction 
                                allowed under this section), which are 
                                properly allocable to such income.
                    ``(B) Exceptions.--The following shall not be 
                treated as income of a qualified small business for 
                purposes of subparagraph (A):
                            ``(i) Any income which is attributable to 
                        any property described in section 1400N(p)(3).
                            ``(ii) Any income which is attributable to 
                        the ownership or management of any professional 
                        sports team.
                            ``(iii) Any income which is attributable to 
                        a trade or business described in subparagraph 
                        (B) of section 1202(e)(3).
                            ``(iv) Any income which is attributable to 
                        any property with respect to which records are 
                        required to be maintained under section 2257 of 
                        title 18, United States Code.
                    ``(C) Allocation rules, etc.--Rules similar to the 
                rules of paragraphs (2), (3), (4)(D), and (7) of 
                subsection (c) shall apply for purposes of this 
                paragraph.
            ``(3) Special rules.--Except as otherwise provided by the 
        Secretary, rules similar to the rules of subsection (d) shall 
        apply for purposes of this subsection.''.
    (c) Conforming Amendment.--Section 199(a)(2) of such Code is 
amended by striking ``paragraph (1)'' and inserting ``paragraph 
(1)(A)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 6. SMALL BUSINESS MODIFICATIONS RELATED TO HEALTH INSURANCE, 
              HEALTH SAVINGS ACCOUNTS, AND SIMPLIFIED EMPLOYEE 
              PENSIONS.

    (a) Health Insurance Deduction Allowed in Determining Self-
Employment Tax.--Section 162(l) of the Internal Revenue Code of 1986 
(relating to special rules for health insurance costs of self-employed 
individuals) is amended by striking paragraph (4) (relating to 
deduction not allowed for self-employment tax purposes) and 
redesignating paragraph (5) as paragraph (4).
    (b) Health Savings Account Contributions Allowed in Determining 
Self-Employment Tax.--Subsection (a) of section 1402 of such Code is 
amended by redesignating paragraphs (16) and (17) as paragraphs (17) 
and (18) and by inserting after paragraph (15) the following new 
paragraph:
            ``(16) the deduction provided by section 223 with respect 
        to amounts paid to a health savings account of the individual 
        shall be allowed;''.
    (c) Simplified Employee Pensions.--
            (1) Increase in limitation on deduction for 
        contributions.--Subparagraph (C) of section 404(h)(1) of such 
        Code is amended by inserting ``(100 percent in the case of an 
        owner-employee as defined in section 401(c)(3))'' after ``25 
        percent'' both places it appears.
            (2) Modification on limitation on contributions.--
        Subsection (j) of section 408 of such Code is amended by adding 
        at the end the following: ``For purposes of applying the 
        preceding sentence, net earnings from self-employment shall be 
        determined without any reduction under section 1402(a)(12).''
            (3) Contributions allowed in determining self-employment 
        tax.--Subsection (a) of section 1402 of such Code (as amended 
        by subsection (b)) is amended by redesignating paragraphs (17) 
        and (18) as paragraphs (18) and (19) and by inserting after 
        paragraph (16) the following new paragraph:
            ``(17) the deduction provided by section 404 with respect 
        to amounts paid to a simplified employee pension of the 
        individual shall be allowed;''.
    (d) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.