I 
111TH CONGRESS 
1ST SESSION H. R. 2963 
To amend the Internal Revenue Code of 1986 to provide incentives for 
improving small manufacturers’ computer technology. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 19, 2009 
Mrs. DAHLKEMPER (for herself, Mr. TIM MURPHY of Pennsylvania, Mr. CAR-
NEY, Mr. WELCH, Mr. TONKO, Mr. BRALEY of Iowa, Mr. HONDA, Mr. 
BRIGHT, Ms. EDDIE BERNICE JOHNSON of Texas, Mr. KISSELL, Mr. 
CHILDERS, Ms. FUDGE, Mr. KAGEN, Mr. FATTAH, Mr. BOSWELL, Ms. 
KAPTUR, Mr. MASSA, Mr. ALTMIRE, Mr. SIRES, Mr. CONNOLLY of Vir-
ginia, Ms. WASSERMAN SCHULTZ, Mr. MORAN of Virginia, and Mr. DIN-
GELL) introduced the following bill; which was referred to the Committee 
on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
incentives for improving small manufacturers’ computer 
technology. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SMALL MANUFACTURERS’ COMPUTER HARD-
WARE AND SOFTWARE TAX CREDIT IN LIEU 
OF EXPENSING. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
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1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45R. SMALL MANUFACTURERS COMPUTER HARD-
WARE AND SOFTWARE TAX CREDIT. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
small manufacturers’ computer hardware and software 
credit determined under this section for the taxable year 
is the lesser of— 
‘‘(1) 50 percent of the amount paid or incurred 
by the taxpayer during the taxable year for qualified 
computer hardware and software property; or 
‘‘(2) $35,000.00. 
‘‘(b) QUALIFIED COMPUTER HARDWARE AND SOFT-
WARE PROPERTY.—For purposes of this section, the term 
‘qualified computer hardware and software property’ 
means any computer hardware and software property for 
use in any small manufacturer located in the United 
States— 
‘‘(1) the original use of which commences with 
the taxpayer; 
‘‘(2) which is property of a character subject to 
the allowance for depreciation; and 
‘‘(3) which is placed in service by the taxpayer 
after the date of the enactment of this section. 
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‘‘(c) COMPUTER HARDWARE.—For purposes of this 
section, the term ‘computer hardware’ includes disk 
drives, integrated circuits, display screens, cables, 
modems, speakers, and printers. 
‘‘(d) COMPUTER SOFTWARE.—For purposes of this 
section, the term ‘computer software’ means programs, 
programming languages, data that direct the operations 
of a computer system or network, enterprise resource 
planning software, manufacturing resource planning soft-
ware, materials requirements planning software and soft-
ware designed to enhance Internet capabilities. 
‘‘(e) SMALL MANUFACTURER.—For purposes of this 
section: 
‘‘(1) IN GENERAL.—The term ‘small manufac-
turer’ means— 
‘‘(A) any unincorporated business, any 
partnership, or for-profit corporation; 
‘‘(B) with respect to a taxable year, any 
which employed an average of 50 or fewer em-
ployees on business days during the preceding 
calendar year. For purposes of the preceding 
sentence, a preceding calendar year may be 
taken into account only if the small business 
was in existence throughout such year. 
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‘‘(2) SMALL MANUFACTURERS NOT IN EXIST-
ENCE IN PRECEDING TAXABLE YEAR.—In the case 
of a small manufacturer which was not in existence 
throughout the preceding calendar year, the deter-
mination under paragraph (1) shall be based on the 
average number of employees that it is reasonably 
expected such employer or sole proprietor will em-
ploy on business days in the current calendar year. 
‘‘(f) CALCULATION OF NUMBER OF EMPLOYEES.— 
For purposes of subsection (e), the number of employees 
of a subsidiary of a wholly owned corporation includes the 
employees of— 
‘‘(1) a parent corporation; and 
‘‘(2) any other subsidiary corporation of that 
parent corporation. 
‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub-
title, if a credit is determined under this section in connec-
tion with any expenditure for any property, the increase 
in the basis of such property which would (but for this 
subsection) result from such expenditure shall be reduced 
by the amount of the credit so determined. 
‘‘(h) TERMINATION.—This section shall not apply 
with respect to any property placed in service after Decem-
ber 31, 2011.’’. 
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(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of such Code is amended by strik-
ing ‘‘plus’’ at the end of paragraph (34), by striking the 
period at the end of paragraph (35) and inserting ‘‘, plus’’, 
and by adding at the end the following new paragraph: 
‘‘(36) the small manufacturers’ computer hard-
ware and software credit determined under section 
45R(a).’’. 
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of 
such Code is amended by adding at the end the following 
new subsection: 
‘‘(f) SMALL MANUFACTURERS COMPUTER HARD-
WARE AND SOFTWARE CREDIT.—No deduction shall be al-
lowed for that portion of the expenses otherwise allowable 
as a deduction for the taxable year which is equal to the 
amount of the credit determined for the taxable year 
under section 45R.’’. 
(d) ALLOWANCE OF CREDIT AGAINST ALTERNATIVE 
MINIMUM TAX.—Subparagraph (B) of section 38(c)(4) of 
such Code is amended by striking ‘‘and’’ at the end of 
clause (vii), by striking the period at the end of clause 
(viii) and insert ‘‘, and’’, and by inserting after clause 
(viii) the following new clause: 
‘‘(ix) the credit determined under sec-
tion 45R.’’. 
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(e) TRANSFERABILITY OF CREDIT.—Nothing in any 
law or rule shall be construed to limit the transferability, 
through sale and repurchase agreements, of the credit al-
lowed by reason of section 45R. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years ending after De-
cember 31, 2008. 
Æ 
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