I 
111TH CONGRESS 
1ST SESSION H. R. 1763 
To provide tax relief for small businesses, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 26, 2009 
Mr. LATTA (for himself and Mr. CANTOR) introduced the following bill; which 
was referred to the Committee on Ways and Means 
A BILL 
To provide tax relief for small businesses, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Responsible Reinvest-
ment 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. 
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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 adjust-
ments) 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. 
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SEC. 4. ACCELERATED DEPRECIATION FOR MANUFAC-
TURING 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 property ................
1 year 
(b) QUALIFIED MANUFACTURING OR AGRICULTURAL 
PROPERTY.—Subsection (e) of section 168 of such Code 
is amended by adding at the end the following new para-
graph: 
‘‘(9) QUALIFIED MANUFACTURING OR AGRICUL-
TURAL
PROPERTY.—The term ‘qualified manufac-
turing or agricultural property’ means any tangible 
personal property which is used in the trade or busi-
ness 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 IN-
COME. 
(a) IN GENERAL.—Paragraph (1) of section 199(a) 
of the Internal Revenue Code of 1986 is amended to read 
as follows: 
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‘‘(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 with-
out regard to this section) for the taxable 
year, and 
‘‘(B) in the case of a qualified small busi-
ness for a taxable year beginning in 2009 or 
2010, 20 percent of the lesser of— 
‘‘(i) the qualified small business in-
come of the taxpayer for the taxable year, 
or 
‘‘(ii) taxable income (determined with-
out regard to this section) for the taxable 
year.’’. 
(b) QUALIFIED SMALL BUSINESS; QUALIFIED SMALL 
BUSINESS INCOME.—Section 199 of such Code is amend-
ed by adding at the end the following new subsection: 
‘‘(e) QUALIFIED
SMALL
BUSINESS; QUALIFIED 
SMALL BUSINESS INCOME.— 
‘‘(1) QUALIFIED SMALL BUSINESS.— 
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‘‘(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 num-
ber 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 de-
fined by section 382(g) in respect of a corpora-
tion, or by applying principles analogous to 
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such ownership change in the case of a tax-
payer 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 in-
come’ 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. 
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‘‘(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 sub-
paragraph (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.’’. 
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(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 AC-
COUNTS, AND SIMPLIFIED EMPLOYEE PEN-
SIONS. 
(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 individ-
uals) 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 AL-
LOWED
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: 
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‘‘(16) the deduction provided by section 223 
with respect to amounts paid to a health savings ac-
count 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
CON-
TRIBUTIONS.—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 deter-
mined 
without 
any 
reduction 
under 
section 
1402(a)(12).’’ 
(3) CONTRIBUTIONS
ALLOWED
IN
DETER-
MINING SELF-EMPLOYMENT TAX.—Subsection (a) of 
section 1402 of such Code (as amended by sub-
section (b)) is amended by redesignating paragraphs 
(17) and (18) as paragraphs (18) and (19) and by 
inserting after paragraph (16) the following new 
paragraph: 
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‘‘(17) the deduction provided by section 404 
with respect to amounts paid to a simplified em-
ployee 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. 
Æ 
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