[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3237 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 3237

  To amend the Internal Revenue Code of 1986 to increase the expense 
   treatment under section 179 of such Code for the first 3 years a 
business is in existence and to allow an income tax credit for one-half 
               of an individual's self-employment taxes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 7, 1993

   Mr. Bonilla (for himself, Mr. Hall of Texas, Mr. Livingston, Mr. 
McCollum, Mr. Barton of Texas, Mr. Pombo, and Ms. Dunn) 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 increase the expense 
   treatment under section 179 of such Code for the first 3 years a 
business is in existence and to allow an income tax credit for one-half 
               of an individual's self-employment taxes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Development Act of 
1993''.

SEC. 2. INCREASE IN EXPENSE TREATMENT FOR STARTUP BUSINESSES.

    (a) In General.--Paragraph (1) of section 179(b) of the Internal 
Revenue Code of 1986 (relating to election to expense certain 
depreciable assets) is amended to read as follows:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the aggregate cost which may be taken 
                into account under subsection (a) for any taxable year 
                shall not exceed $17,500.
                    ``(B) Higher limitation for first 3 years taxpayer 
                engaged in business.--
                            ``(i) In general.--Subparagraph (A) shall 
                        be applied by substituting `$30,000' for 
                        `$17,500' for the taxpayer's startup year and 
                        the following 2 taxable years.
                            ``(ii) Startup year.--For purposes of 
                        clause (i), the term `startup year' means the 
                        first taxable year that the taxpayer is engaged 
                        in an active trade or business (within the 
                        meaning of section 195(c)).
                            ``(iii) Controlled groups.--For purposes of 
                        this subparagraph, if the taxpayer is a member 
                        of a controlled group, the taxpayer shall be 
                        treated as engaged in an active trade or 
                        business beginning on the earliest date any 
                        member of such group was engaged in an active 
                        trade or business. For purposes of the 
                        preceding sentence, the term `controlled group' 
                        means all persons treated as a single employer 
                        under subsection (b) or (c) of section 52.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 3. CREDIT FOR ONE-HALF OF SELF-EMPLOYMENT TAXES.

    (a) General Rule.--Subpart C of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 (relating to refundable credits) 
is amended by redesignating section 35 as section 36 and by inserting 
after section 34 the following new section:

``SEC. 35. CREDIT FOR ONE-HALF OF SELF-EMPLOYMENT TAXES.

    ``In the case of an individual, there shall be allowed as a credit 
against the tax imposed by this subtitle for the taxable year an amount 
equal to 50 percent of the taxes imposed by section 1401 for the 
taxable year.''
    (b) Repeal of Deduction.--
            (1) Section 164 of such Code is amended by striking 
        subsection (f) and by redesignating subsection (g) as 
        subsection (f).
            (2) Section 1402(a) of such Code is amended by striking 
        paragraph (12) and by redesignating paragraphs (13), (14), and 
        (15) as paragraphs (12), (13), and (14), respectively.
    (c) Clerical Amendment.--The table of sections for subpart C of 
part IV of subchapter A of chapter 1 of such Code is amended by 
striking the last item and inserting the following new items:

                              ``Sec. 35. Credit for one-half of self-
                                        employment taxes.
                              ``Sec. 36. Overpayments of tax.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

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