To create additional tax relief for businesses, and for other purposes.

SA 3338. Mr. THUNE submitted an amendment intended to be proposed to
amendment SA 3336 proposed by Mr. Baucus) to the bill H.R. 4213, to
amend the Internal Revenue Code of 1986 to extend certain expiring
provisions, and for other purposes; as follows:

At the end, insert the following:
TITLE ----ADDITIONAL BUSINESS TAX RELIEF
Subtitle A--General Provisions

SEC. --01. PERMANENT INCREASE IN LIMITATIONS ON EXPENSING OF
CERTAIN DEPRECIABLE BUSINESS ASSETS.

(a) Permanent Increase.--Subsection (b) of section 179 is
amended--
(1) by striking ``$25,000'' and all that follows in
paragraph (1) and inserting ``$500,000.'',
(2) by striking ``$200,000'' and all that follows in
paragraph (2) and inserting ``$2,000,000'',

[[Page S889]]

(3) by striking ``after 2007 and before 2011, the $120,000
and $500,000'' in paragraph (5)(A) and inserting ``after
2009, the $500,000 and the $2,000,000'',
(4) by striking ``2006'' in paragraph (5)(A)(ii) and
inserting ``2008'', and
(5) by striking paragraph (7).
(b) Permanent Expensing of Computer Software.--Section
179(d)(1)(A)(ii) is amended by striking ``and before 2011''.
(c) Effective Date.--The amendments made by subsections (b)
and (c) shall apply to taxable years beginning after December
31, 2008.

SEC. --02. EXTENSION OF ADDITIONAL FIRST-YEAR DEPRECIATION
FOR 50 PERCENT OF THE BASIS OF CERTAIN
QUALIFIED PROPERTY.

(a) In General.--Paragraph (2) of section 168(k), as
amended by the American Recovery and Reinvestment Tax Act of
2009, is amended--
(1) by striking ``January 1, 2011'' in subparagraph (A)(iv)
and inserting ``January 1, 2012'', and
(2) by striking ``January 1, 2010'' each place it appears
and inserting ``January 1, 2011''.
(b) Conforming Amendments.--
(1) The heading for subsection (k) of section 168, as
amended by the American Recovery and Reinvestment Tax Act of
2009, is amended by striking ``January 1, 2010'' and
inserting ``January 1, 2011''.
(2) The heading for clause (ii) of section 168(k)(2)(B), as
so amended, is amended by striking ``Pre-january 1, 2010''
and inserting ``Pre-january 1, 2011''.
(3) Subparagraph (D) of section 168(k)(4) is amended by
striking ``and'' at the end of clause (ii), by striking the
period at the end of clause (iii) and inserting a comma, and
by adding at the end the following new clauses:
``(iv) `January 1, 2011' shall be substituted for `January
1, 2012' in subparagraph (A)(iv) thereof, and
``(v) `January 1, 2010' shall be substituted for `January
1, 2011' each place it appears in subparagraph (A)
thereof.''.
(4) Subparagraph (B) of section 168(l)(5), as so amended,
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(5) Subparagraph (C) of section 168(n)(2), as so amended,
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(6) Subparagraph (D) of section 1400L(b)(2) is amended by
striking ``January 1, 2010'' and inserting ``January 1,
2011''.
(7) Subparagraph (B) of section 1400N(d)(3), as so amended,
is amended by striking ``January 1, 2010'' and inserting
``January 1, 2011''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2009.

SEC. --03. INCREASED EXCLUSION AND OTHER MODIFICATIONS
APPLICABLE TO QUALIFIED SMALL BUSINESS STOCK.

(a) Increased Exclusion.--
(1) In general.--Subsection (a) of section 1202 is amended
to read as follows:
``(a) Exclusion.--
``(1) In general.--In the case of a taxpayer other than a
corporation, gross income shall not include the applicable
percentage of any gain from the sale or exchange of qualified
small business stock held for more than 5 years.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 50 percent, in the case of stock issued after August
10, 1993, and on or before February 18, 2009,
``(B) 75 percent, in the case of stock issued after
February 18, 2009, and on or before the date of the enactment
of the American Workers, State, and Business Relief Act of
2010, and
``(C) 100 percent, in the case of stock issued after the
date of the enactment of the American Workers, State, and
Business Relief Act of 2010.
``(3) Empowerment zone businesses.--
``(A) In general.--In the case of qualified small business
stock acquired after December 21, 2000, and on or before
February 18, 2009, in a corporation which is a qualified
business entity (as defined in section 1397C(b)) during
substantially all of the taxpayer's holding period for such
stock, paragraph (2)(A) shall be applied by substituting `60
percent' for `50 percent'.
``(B) Certain rules to apply.--Rules similar to the rules
of paragraphs (5) and (7) of section 1400B(b) shall apply for
purposes of this paragraph.
``(C) Gain after 2014 not qualified.--Subparagraph (A)
shall not apply to gain attributable to periods after
December 31, 2014.
``(D) Treatment of dc zone.--The District of Columbia
Enterprise Zone shall not be treated as an empowerment zone
for purposes of this paragraph.''.
(2) Conforming amendments.--
(A) The heading for section 1202 is amended by striking
``PARTIAL''.
(B) The item relating to section 1202 in the table of
sections for part I of subchapter P of chapter 1 is amended
by striking ``Partial exclusion'' and inserting
``Exclusion''.
(C) Section 1223(13) is amended by striking
``1202(a)(2),''.
(b) Repeal of Minimum Tax Preference.--Paragraph (7) of
section 57(a) is amended by adding at the end the following:
``The preceding sentence shall not apply to stock issued
after the date of the enactment of the American Workers,
State, and Business Relief Act of 2010.''.
(c) Increase in Limitation.--
(1) In general.--Subparagraph (A) of section 1202(b)(1) is
amended by striking ``$10,000,000'' and inserting
``$15,000,000''.
(2) Married individuals.--Subparagraph (A) of section
1202(b)(3) is amended by striking ``paragraph (1)(A) shall be
applied by substituting `$5,000,000' for `$10,000,000' '' and
inserting ``the amount under paragraph (1)(A) shall be half
of the amount otherwise in effect''.
(d) Modification of Definition of Qualified Small
Business.--Section 1202(d)(1) is amended by striking
``$50,000,000'' each place it appears and inserting
``$75,000,000''.
(e) Inflation Adjustments.--Section 1202 is amended by
redesignating subsection (k) as subsection (l) and by
inserting after subsection (j) the following new subsection:
``(k) Inflation Adjustment.--
``(1) In general.--In the case of any taxable year
beginning after 2010, the $15,000,000 amount in subsection
(b)(1)(A), the $75,000,000 amount in subsection (d)(1)(A),
and the $75,000,000 amount in subsection (d)(1)(B) shall each
be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost of living adjustment determined under
section 1(f)(3) for the calendar year in which the taxable
year begins, determined by substituting `calendar year 2009'
for `calendar year 1992' in subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $1,000,000 such amount shall be
rounded to the next lowest multiple of $1,000,000.''.
(f) Effective Dates.--
(1) In general.--The amendments made by subsections (a),
(b), and (d) shall apply to stock acquired after the date of
the enactment of this Act.
(2) Limitation; inflation adjustment.--The amendments made
by subsections (c) and (e) shall apply to taxable years
ending after the date of the enactment of this Act.

SEC. --04. DEDUCTION FOR ELIGIBLE SMALL BUSINESS INCOME.

(a) In General.--Paragraph (1) of section 199(a) 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 an eligible small business for any
taxable year beginning after 2009, 20 percent of the lesser
of--
``(i) the eligible 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) Eligible Small Business; Eligible Small Business
Income.--Section 199 is amended by adding at the end the
following new subsection:
``(e) Eligible Small Business; Eligible Small Business
Income.--
``(1) Eligible small business.--For purposes of this
section, the term `eligible small business' means, with
respect to any taxable year--
``(A) a corporation the stock of which is not publicly
traded, or
``(B) a partnership,
which meets the gross receipts test of section 448(c)
(determined by substituting `$50,000,000' for `$5,000,000'
each place it appears in such section) for the taxable year
(or, in the case of a sole proprietorship, which would meet
such test if such proprietorship were a corporation).
``(2) Eligible small business income.--
``(A) In general.--For purposes of this section, the term
`eligible small business income' means the excess of--
``(i) the income of the eligible 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 an eligible 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) 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,
2009.

[[Page S890]]

SEC. --05. NONAPPLICATION OF CERTAIN LABOR STANDARDS.

Section 1601 of the American Recovery and Reinvestment Tax
Act of 2009 is hereby repealed.
Subtitle B--Transfer of Stimulus Funds

SEC. --11. TRANSFER OF STIMULUS FUNDS.

Notwithstanding section 5 of the American Recovery and
Reinvestment Act of 2009 (Pub. Law 111-5), from the amounts
appropriated or made available and remaining unobligated
under such Act, the Director of the Office of Management and
Budget shall transfer from time to time to the general fund
of the Treasury an amount equal to the sum of the amount of
any net reduction in revenues and the amount of any net
increase in spending resulting from the enactment of this
Act.
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