[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1493 Introduced in Senate (IS)]
107th CONGRESS
1st Session
S. 1493
To forgive interest payments for a 2-year period on certain disaster
loans to small business concerns in the aftermath of the terrorist
attacks perpetrated against the United States on September 11, 2001, to
amend the Internal Revenue Code of 1986 to provide tax relief for small
business concerns, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
October 3, 2001
Mr. Bond introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To forgive interest payments for a 2-year period on certain disaster
loans to small business concerns in the aftermath of the terrorist
attacks perpetrated against the United States on September 11, 2001, to
amend the Internal Revenue Code of 1986 to provide tax relief for small
business concerns, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small Business
Leads to Economic Recovery Act of 2001''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--SMALL BUSINESS EMERGENCY LOAN ASSISTANCE
Sec. 101. Short title.
Sec. 102. Definitions.
Sec. 103. Deferment of disaster loan payments.
Sec. 104. Refinancing existing disaster loans.
Sec. 105. Emergency relief loan program.
Sec. 106. Economic recovery loan and financing programs.
TITLE II--SMALL BUSINESS TAX PROVISIONS FOR ECONOMIC STIMULUS
Sec. 201. Amendment of 1986 Code.
Sec. 202. Increase in expense treatment of certain depreciable business
assets for small businesses.
Sec. 203. Expensing of computer software.
Sec. 204. Modification of depreciation rules for computers and
software.
Sec. 205. Adjustments to depreciation limits for business vehicles.
Sec. 206. Increased deduction for business meal expenses.
Sec. 207. Modification of unrelated business income limitation on
investment in certain debt-financed
properties.
Sec. 208. Repeal of alternative minimum tax on individuals.
Sec. 209. Exemption from alternative minimum tax for small
corporations.
TITLE III--SMALL BUSINESS PROCUREMENTS
Sec. 301. Expansion of opportunity for small businesses to be awarded
department of defense contracts for
architectural and engineering services and
construction design.
Sec. 302. Procurements of property and services in amounts not in
excess of $100,000 from small businesses.
Sec. 303. Sole source procurements of property and services under the
2001 Emergency Supplemental Appropriations
Act for Recovery From and Response To
Terrorist Attacks on the United States.
TITLE I--SMALL BUSINESS EMERGENCY LOAN ASSISTANCE
SEC. 101. SHORT TITLE.
This title may be cited as the ``Small Business Emergency Loan
Assistance Act of 2001''.
SEC. 102. DEFINITIONS.
In this title--
(1) the term ``Administration'' means the Small Business
Administration;
(2) the term ``covered loan'' means a loan made by the
Administration to a small business concern--
(A) under section 7(b) of the Small Business Act
(15 U.S.C. 636(b)); and
(B) located in an area which the President has
designated as a disaster area as a result of the
terrorist attacks perpetrated against the United States
on September 11, 2001; and
(3) the term ``small business concern'' has the same
meaning as in section 3 of the Small Business Act (15 U.S.C.
632).
SEC. 103. DEFERMENT OF DISASTER LOAN PAYMENTS.
(a) In General.--Notwithstanding any other provision of law,
payments of principal or interest on a covered loan shall be deferred,
and no interest shall accrue with respect to a covered loan, during the
2-year period following the date of issuance of the covered loan.
(b) Resumption of Payments.--At the end of the 2-year period
described in subsection (a), the payment of periodic installments of
principal and interest shall be required with respect to a covered
loan, in the same manner and subject to the same terms and conditions
as would otherwise be applicable to a loan made under section 7(b) of
the Small Business Act (15 U.S.C. 636(b)).
SEC. 104. REFINANCING EXISTING DISASTER LOANS.
(a) In General.--Any loan made under section 7(b) of the Small
Business Act (15 U.S.C. 636(b)) that was outstanding as to principal or
interest on September 11, 2001, may be refinanced by a small business
concern that is also eligible to receive a covered loan under this Act,
and the refinanced amount shall be considered to be part of the covered
loan for purposes of this title.
(b) No Affect on Eligibility.--A refinancing under subsection (a)
by a small business concern shall be in addition to any covered loan
eligibility for that small business concern under this title.
SEC. 105. EMERGENCY RELIEF LOAN PROGRAM.
(a) Business Loan Authority.--Section 7(a) of the Small Business
Act (15 U.S.C. 636(a)) is amended by adding at the end the following:
``(31) Temporary loan authority following terrorist
attacks.--
``(A) In general.--During the 1-year period
beginning on the date of enactment of this paragraph,
the Administration may make loans under this subsection
to a small business concern that has suffered, or that
is likely to suffer, significant economic injury as a
result of the terrorist attacks perpetrated against the
United States on September 11, 2001.
``(B) Loan terms.--With respect to a loan under
this paragraph--
``(i) for purposes of paragraph (2)(A),
participation by the Administration shall be
equal to 95 percent of the balance of the
financing outstanding at the time of
disbursement of the loan;
``(ii) no fee may be required or charged
under paragraph (18);
``(iii) the applicable rate of interest
shall not exceed a rate that is one percentage
point above the prime rate as published in a
national financial newspaper published each
business day;
``(iv) no such loan shall be made if the
total amount outstanding and committed (by
participation or otherwise) to the borrower
under this paragraph would exceed $1,000,000;
``(v) upon request of the borrower,
repayment of principal due on a loan made under
this paragraph shall be deferred during the 1-
year period beginning on the date of issuance
of the loan; and
``(vi) the repayment period shall not
exceed 7 years, including any period of
deferment under clause (v).
``(C) Applicability.--The loan terms described in
subparagraph (B) shall apply to a loan under this
paragraph notwithstanding any other provision of this
subsection, and except as specifically provided in this
paragraph, a loan under this paragraph shall otherwise
be subject to the same terms and conditions as any
other loan under this subsection.
``(D) Significant economic injury.--In this
paragraph, the term `substantial economic injury' means
an economic harm to a small business concern that
results in the inability of the small business
concern--
``(i) to meet its obligations as they
mature;
``(ii) to pay its ordinary and necessary
operating expenses; or
``(iii) to market, produce, or provide a
product or service ordinarily marketed,
produced, or provided by the business
concern.''.
SEC. 106. ECONOMIC RECOVERY LOAN AND FINANCING PROGRAMS.
(a) One-Year Suspension of Section 7(a) Fees.--Section 7(a)(18) of
the Small Business Act (15 U.S.C. 636(a)(18)) is amended by adding at
the end the following:
``(C) One-year waiver of fees following terrorist
attacks.--No fee may be collected or charged, and no
fee shall accrue under this paragraph during the 1-year
period beginning on the date of enactment of the Small
Business Terrorism Relief and Economic Stimulus Act of
2001.''.
(b) One-Year Increase in Participation Levels.--Section 7(a)(2) of
the Small Business Act (15 U.S.C. 636(a)(2)) is amended--
(1) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (E)''; and
(2) by adding at the end the following:
``(E) Temporary participation levels following
terrorist attacks.--During the 1-year period beginning
on the date of enactment of the Small Business
Terrorism Relief and Economic Stimulus Act of 2001,
clauses (i) and (ii) of subparagraph (A) shall be
construed to read as follows:
```(i) 85 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such balance
exceeds $150,000; or
```(ii) 90 percent of the balance of the
financing outstanding at the time of
disbursement of the loan, if such balance is
less than or equal to $150,000.'.''.
(c) One-Year Suspension of Other Fees.--Section 503 of the Small
Business Investment Act of 1958 (15 U.S.C. 697) is amended--
(1) in subsection (b)(7)(A), by striking ``which amount
shall'' and inserting ``which amount shall not be assessed or
collected, and no amount shall accrue, during the 1-year period
beginning on the date of enactment of the Small Business
Terrorism Relief and Economic Stimulus Act of 2001, and which
amount shall otherwise''; and
(2) in subsection (d)(2), by adding at the end the
following: ``No fee may be assessed or collected under this
paragraph, and no fee shall accrue, during the 1-year period
beginning on the date of enactment of the Small Business
Terrorism Relief and Economic Stimulus Act of 2001.''.
TITLE II--SMALL BUSINESS TAX PROVISIONS FOR ECONOMIC STIMULUS
SEC. 201. AMENDMENT OF 1986 CODE.
Except as otherwise expressly provided, whenever in this title an
amendment or repeal is expressed in terms of an amendment to, or repeal
of, a section or other provision, the reference shall be considered to
be made to a section or other provision of the Internal Revenue Code of
1986.
SEC. 202. INCREASE IN EXPENSE TREATMENT OF CERTAIN DEPRECIABLE BUSINESS
ASSETS FOR SMALL BUSINESSES.
(a) In General.--Section 179(b)(1) (relating to dollar limitation)
is amended to read as follows:
``(1) Dollar limitation.--
``(A) In general.--The aggregate cost which may be
taken into account under subsection (a) for any taxable
year shall not exceed $100,000.
``(B) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2001,
the dollar amount contained in subparagraph (A) shall
be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
by substituting ``calendar year 2000'' for
``calendar year 1992'' in subparagraph (B)
thereof.
If any amount as adjusted under this subparagraph is
not a multiple of $1,000, such amount shall be rounded
to the nearest multiple of $1,000.''.
(b) Expansion of Phase-Out of Limitation.--Section 179(b)(2) is
amended to read as follows:
``(2) Reduction in limitation.--
``(A) In general.--The limitation under paragraph
(1) for any taxable year shall be reduced (but not
below zero) by the amount by which the cost of section
179 property for which a deduction is allowable
(without regard to this subsection) under subsection
(a) for such taxable year exceeds $500,000.''
``(B) Inflation adjustment.--In the case of any
taxable year beginning in a calendar year after 2001,
the dollar amount contained in subparagraph (A) shall
be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
by substituting ``calendar year 2000'' for
``calendar year 1992'' in subparagraph (B)
thereof.
If any amount as adjusted under this subparagraph is
not a multiple of $10,000, such amount shall be rounded
to the nearest multiple of $10,000.''.
(c) Time of Deduction.--The second sentence of section 179(a)
(relating to election to expense certain depreciable business assets)
is amended by inserting ``(or, if the taxpayer elects, the preceding
taxable year if the property was purchased in such preceding year)''
after ``service''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 203. EXPENSING OF COMPUTER SOFTWARE.
(a) Computer Software Eligible for Expensing.--The heading and
first sentence of section 179(d)(1) (relating to section 179 property)
are amended to read as follows:
``(1) Section 179 property.--For purposes of this section,
the term `section 179 property' means property--
``(A) which is--
``(i) tangible property to which section
168 applies, or
``(ii) computer software (as defined in
section 197(e)(3)(B)) to which section 167
applies,
``(B) which is section 1245 property (as defined in
section 1245(a)(3)), and
``(C) which is acquired by purchase for use in the
active conduct of a trade or business.''.
(b) No Computer Software Included as Section 197 Intangible.--
(1) In general.--Section 197(e)(3)(A) is amended to read as
follows:
``(A) In general.--Any computer software.''.
(2) Conforming amendment.--Section 167(f)(1)(B) is amended
by striking ``; except that such term shall not include any
such software which is an amortizable section 197 intangible''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2000.
SEC. 204. MODIFICATION OF DEPRECIATION RULES FOR COMPUTERS AND
SOFTWARE.
(a) 2-Year Applicable Recovery Period for Depreciation of Computers
and Peripheral Equipment.--
(1) In general.--Section 168(c) (relating to applicable
recovery period) is amended by adding at the end the following
flush sentence:
``In the case of 5-year property which is a computer or peripheral
equipment, the applicable recovery period shall be 2 years.''.
(2) Conforming amendments.--
(A) Section 168(g)(3)(C) (relating to alternative
depreciation system for certain property) is amended to
read as follows:
``(C) Qualified technological equipment.--
``(i) In general.--Except as provided in
clause (ii), in the case of any qualified
technological equipment, the recovery period
used for purposes of paragraph (2) shall be 5
years.
``(ii) Computers or peripheral equipment.--
In the case of any computer or peripheral
equipment, the recovery period used for
purposes of paragraph (2) shall be 2 years.''.
(B) Section 168(j)(2) (relating to depreciation of
property on Indian reservations) is amended by adding
at the end the following flush sentence:
``In the case of 5-year property which is a computer or peripheral
equipment, the applicable recovery period shall be 1 year.''.
(C) Section 467(e)(3)(A) (relating to certain
payments for the use of property or services) is
amended by adding at the end the following flush
sentence:
``In the case of 5-year property which is a computer or peripheral
equipment, the applicable recovery period shall be 2 years.''.
(b) 2-Year Depreciation Period for Computer Software.--Section
167(f)(1)(A) of the Internal Revenue Code of 1986 is amended by
striking ``36 months'' and inserting ``24 months''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2000.
SEC. 205. ADJUSTMENTS TO DEPRECIATION LIMITS FOR BUSINESS VEHICLES.
(a) In General.--
(1) Increase in limitation.--Section 280F(a)(1)(A)
(relating to limitation on amount of depreciation for luxury
automobiles) is amended--
(A) by striking ``$2,560'' in clause (i) and
inserting ``$5,400'';
(B) by striking ``$4,100'' in clause (ii) and
inserting ``$8,500'';
(C) by striking ``$2,450'' in clause (iii) and
inserting ``$5,100''; and
(D) by striking ``$1,475'' in clause (iv) and
inserting ``$3,000''.
(2) Conforming amendment.--Section 280F(a)(1)(B)(ii)
(relating to disallowed deductions allowed for years after
recovery period) is amended by striking ``$1,475'' each place
that it appears and inserting ``$3,000''.
(b) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2000.
SEC. 206. INCREASED DEDUCTION FOR BUSINESS MEAL EXPENSES.
(a) In General.--Section 274(n)(1) (relating to only 50 percent of
meal and entertainment expenses allowed as deduction) is amended by
striking ``50 percent'' in the text and inserting ``the allowable
percentage''.
(b) Allowable Percentage.--Section 274(n) is amended by
redesignating paragraphs (2) and (3) as paragraphs (3) and (4),
respectively, and by inserting after paragraph (1) the following new
paragraph:
``(2) Allowable percentage.--For purposes of paragraph (1),
the allowable percentage is--
``(A) in the case of amounts for items described in
paragraph (1)(B), 50 percent, and
``(B) in the case of expenses for food or
beverages, 100 percent.''.
(c) Clarification of Special Rule for Individuals Subject to
Federal Hours of Service.--Section 274(n)(4) (relating to limited
percentages of meal and entertainment expenses allowed as deduction),
as redesignated by subsection (b), is amended to read as follows:
``(4) Special rule for individuals subject to federal hours
of service.--In the case of any expenses for food or beverages
consumed while away from home (within the meaning of section
162(a)(2)) by an individual during, or incident to, the period
of duty subject to the hours of service limitations of the
Department of Transportation, paragraph (2)(B) shall apply to
such expenses.''.
(d) Conforming Amendment.--The heading for subsection (n) of
section 274 is amended by striking ``50 Percent'' and inserting
``Limited Percentages''.
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 207. MODIFICATION OF UNRELATED BUSINESS INCOME LIMITATION ON
INVESTMENT IN CERTAIN DEBT-FINANCED PROPERTIES.
(a) In General.--Section 514(c)(6) (relating to acquisition
indebtedness) is amended--
(1) by striking ``include an obligation'' and inserting
``include--
``(A) an obligation'',
(2) by striking the period at the end and inserting ``,
or'', and
(3) by adding at the end the following:
``(B) indebtedness incurred by a small business
investment company licensed under the Small Business
Investment Act of 1958 which is evidenced by a
debenture--
``(i) issued by such company under section
303(a) of such Act, or
``(ii) held or guaranteed by the Small
Business Administration.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to acquisitions made on or after the date of the enactment of
this Act.
SEC. 208. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDIVIDUALS.
(a) In General.--
(1) Repeal.--Section 55(a) (relating to alternative minimum
tax) is amended by adding at the end the following new flush
sentence:
``For purposes of this title, the tentative minimum tax on any taxpayer
other than a corporation for any taxable year beginning after December
31, 2000, shall be zero.''.
(2) Nonrefundable personal credits fully allowed against
regular tax liability.--
(A) In general.--Section 26(a) (relating to
limitation based on amount of tax) is amended to read
as follows:
``(a) Limitation Based on Amount of Tax.--The aggregate amount of
credits allowed by this subpart for the taxable year shall not exceed
the taxpayer's regular tax liability for the taxable year.''.
(B) Child credit.--Section 24(d) is amended by
striking paragraph (2) and by redesignating paragraph
(3) as paragraph (2).
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 209. EXEMPTION FROM ALTERNATIVE MINIMUM TAX FOR SMALL
CORPORATIONS.
(a) In General.--Section 55(e)(1)(A) (relating to exemption for
small corporations) is amended to read as follows:
``(A) $10,000,000 gross receipts test.--The
tentative minimum tax of a corporation shall be zero
for any taxable year if the corporation's average
annual gross receipts for all 3-taxable-year periods
ending before such taxable year does not exceed
$10,000,000. For purposes of the preceding sentence,
only taxable years beginning after December 31, 1997,
shall be taken into account.''.
(b) Gross Receipts Test for First 3-Year Period.--Section
55(e)(1)(B) is amended to read as follows:
``(B) $7,500,000 gross receipts test for first 3-
year period.--Subparagraph (A) shall be applied by
substituting `$7,500,000' for `$10,000,000' for the
first 3-taxable-year period (or portion thereof) of the
corporation which is taken into account under
subparagraph (A).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
TITLE III--SMALL BUSINESS PROCUREMENTS
SEC. 301. EXPANSION OF OPPORTUNITY FOR SMALL BUSINESSES TO BE AWARDED
DEPARTMENT OF DEFENSE CONTRACTS FOR ARCHITECTURAL AND
ENGINEERING SERVICES AND CONSTRUCTION DESIGN.
Section 2855(b)(2) of title 10, United States Code, is amended by
striking ``$85,000'' and inserting ``$300,000''.
SEC. 302. PROCUREMENTS OF PROPERTY AND SERVICES IN AMOUNTS NOT IN
EXCESS OF $100,000 FROM SMALL BUSINESSES.
(a) Small Business Set-Asides.--Section 15 of the Small Business
Act (15 U.S.C. 644) is amended by adding at the end the following:
``(q) Procurements of Property and Services not in Excess of
$100,000.--
``(1) Federal supply schedule items.--The head of an agency
procuring items listed on a Federal Supply Schedule in a total
amount not in excess of $100,000 shall procure the items from a
small business.
``(2) Other property and services.--The head of an agency
procuring property or services not listed on a Federal Supply
Schedule in a total amount not in excess of $100,000 shall
procure the property or services from a small business
registered on PRO-Net or the Centralized Contractor
Registration System. Competitive procedures shall be used in
the selection of sources for procurements from small businesses
under this subsection.''.
(b) Phased Implementation.--
(1) First 2 years.--During the 2-year period beginning on
the effective date determined under subsection (c), the
requirement of subsection (q)(1) of section 15 of the Small
Business Act (as added by subsection (a) of this section) shall
apply with respect to 25 percent of the procurements described
in that subsection (determined on the basis of amount), and the
requirement in subsection (q)(2) of that section shall apply
with respect to 25 percent of the procurements described in
subsection (q)(2) (determined on the basis of amount).
(2) Ensuing 2 years.--During the 2-year period beginning on
the day after the expiration of the period described in
paragraph (1), the requirement of subsection (q)(1) of section
15 of the Small Business Act (as added by subsection (a) of
this section) shall apply with respect to 50 percent of the
procurements described in that subsection (determined on the
basis of amount), and the requirement in subsection (q)(2) of
that section shall apply with respect to 50 percent of the
procurements described in subsection (q)(2) (determined on the
basis of amount).
(c) Effective Date.--Section 15(q) of the Small Business Act (as
added by subsection (a) of this section) shall take effect on the first
day of the first month that begins not less than 180 days after the
date of enactment of this Act.
SEC. 303. SOLE SOURCE PROCUREMENTS OF PROPERTY AND SERVICES UNDER THE
2001 EMERGENCY SUPPLEMENTAL APPROPRIATIONS ACT FOR
RECOVERY FROM AND RESPONSE TO TERRORIST ATTACKS ON THE
UNITED STATES.
Notwithstanding the provisions of sections 8(a)(1)(D)(i)(II) and
subclauses (I) and (II) of section 31(b)(2)(A)(ii)( of the Small
Business Act (15 U.S.C. 637(a)(1)(D)(i)(II), 658(b)(2)(A)(ii)(I), and
658 (b)(2)(A)(ii)(II), respectively), a contracting officer may award
non-competitive contracts with the budget authority provided by the
2001 Emergency Supplemental Appropriations Act for Recovery From and
Response To Terrorist Attacks on the United States (Public Law 107-38)
or by subsequent emergency appropriations bill adopted pursuant
thereto, if--
(1) such contracts are to be awarded to an eligible Program
Participant under section 8(a) or to a qualified HUBZone small
business concern under section 3(p)(5) of the Small Business
Act (15 U.S.C. 637(a) and 632(p)(5)), and
(2) the head of the procuring agency certifies that the
property or services needed by the agency are of such an
unusual and compelling urgency that the United States would be
seriously harmed by use of competitive procedures, pursuant
to--
(A) section 2304(c)(2) of title 10, United States
Code, or
(B) section 303(c)(2) of the Federal Property and
Administrative Services Act of 1949 (41 U.S.C.
253(c)(2)).
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