[Congressional Record Volume 149, Number 6 (Tuesday, January 14, 2003)]
[Senate]
[Pages S299-S300]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Mr. Bond):
  S. 158. A bill to amend the Internal Revenue Code of 1986 to expand 
the depreciation benefits available to small business, and for other 
purposes; to the Committee on Finance.
  Ms. SNOWE. Mr. President, I rise today to introduce the Small 
Business Expensing Improvement Act of 2003 on behalf of the Nation's 
millions of small businesses and self-employed individuals. I am 
pleased to be joining with my colleague in the House, Congressman Wally 
Herger, to move this important initiative for small business toward 
enactment.
  This legislation embodies a leading provision of the President's 
economic recovery package for small businesses and entrepreneurs in 
this country. By enabling small firms to expense more of the equipment 
they purchase, this bill provides a tailor-made incentive for the small 
business sector of our economy to invest in new technology and expand 
their operations.
  We should never under-state the role that small businesses play in 
our economy. They represent 99 percent of all employers, employ 51 
percent of the private-sector workforce, provide about 75 percent of 
the net new jobs, contribute 51 percent of the private-sector output, 
and represent 96 percent of all exporters of goods. In short, size

[[Page S300]]

is the only ``small'' aspect of small business.
  The bill I introduce today recognizes the vitality of the small 
business and entrepreneurs in America. Regrettably, when we enacted 
stimulus legislation last year, we missed a tremendous opportunity to 
improve a provision of the tax law aimed directly at small firms, 
Section 179 of the Internal Revenue Code, which enables small 
businesses to write off the cost of new equipment, rather than 
depreciate it over a period of years. During the Senate's consideration 
of last year's stimulus bill, we approved an increase to the expensing 
limits by a vote of 90-2. Sadly, that provision was dropped from the 
final package that was sent to the President.
  As the incoming Chair of the Senate Committee on Small Business and 
Entrepreneurship, I intend to correct that error by responding to the 
calls from small businesses in my State of Maine and from across the 
country for greater expensing of new equipment. I applaud the President 
for making this issue a key part of his economic recovery proposal.
  By tripling the current expensing limit to $75,000, broadening the 
phaseout of this provision, and indexing these amounts for inflation, 
this bill will achieve two important objectives. First, qualifying 
businesses will be able to write off more of the equipment purchases 
today, instead of waiting five, seven or more years to recover their 
costs through depreciation.
  That represents substantial savings both in dollars and in the time 
small businesses would otherwise have to spend complying with the 
complex depreciation rules. Moreover, new equipment will contribute to 
continued productivity growth in the business community, which Federal 
Reserve Chairman Alan Greenspan has repeatedly stressed is essential to 
the long-term vitality of our economy.
  Second, as a result of this bill, more businesses will qualify for 
this benefit because the phase-out limit will be increased from the 
current $200,000 to $325,000 in new equipment purchases. At the same 
time, small business capital investment will be pumping more money into 
the retail-sector of the economy. Accordingly, this is a win-win for 
small business and the economy as a whole.
  I am confident that small businesses will lead us out of the current 
economic problems as they have in past downturns. We have a tremendous 
opportunity to help small enterprises succeed by providing an incentive 
for reinvestment and leaving them more of their earnings to do just 
that. I urge my colleagues to join me in supporting this important 
legislation as we work with the President to enact this bill into law.
  I ask unanimous consent that following my statement, the text of the 
bill and an explanation of its provisions be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 S. 158

       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 Expensing 
     Improvement Act of 2003''.

     SEC. 2. MODIFICATIONS TO EXPENSING UNDER SECTION 179.

       (a) Increase of Amount Which May Be Expensed.--
       (1) In general.--Paragraph (1) of section 179(b) of the 
     Internal Revenue Code of 1986 (relating to dollar limitation) 
     is amended to read as follows:
       ``(1) Dollar limitation.--The aggregate cost which may be 
     taken into account under subsection (a) for any taxable year 
     shall not exceed $75,000.''
       (2) Increase in phaseout threshold.--Paragraph (2) of 
     section 179(b) of such Code is amended by striking 
     ``$200,000'' and inserting ``$325,000''.
       (3) Inflation adjustment of dollar amounts.--Subsection (b) 
     of section 179 of such Code is amended by adding at the end 
     the following new paragraph:
       ``(5) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 2003, each dollar 
     amount contained in paragraph (1) or (2) shall 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 by substituting `calendar year 2002' for 
     `calendar year 1992' in subparagraph (B) thereof.

     If any amount, as adjusted under the preceding sentence, is 
     not a multiple of $1,000 ($10,000 in the case of the dollar 
     amount contained in paragraph (2)), such amount shall be 
     rounded to the nearest multiple of $1,000 or $10,000, as the 
     case may be.''
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service in taxable years 
     beginning after December 31, 2002.
                                  ____


      Small business Works Act of 2001--Description of Provisions

       The bill amends section 179 of the Internal Revenue Code to 
     increase the amount of equipment purchases that small 
     businesses may expense each year from the current $25,000 to 
     $75,000. This change will eliminate the complexity and 
     burdensome recordkeeping involved in depreciating such 
     equipment and free up capital for small businesses to grow 
     and create jobs.
       The bill also increases the phase-out limitation for 
     equipment expensing from the current $200,000 to $325,000, 
     thereby expanding the number of small businesses that can 
     qualify for section 179 expensing and the value of equipment 
     that can be expensed currently. This limitation along with 
     the annual expensing amount will be indexed for inflation 
     under the bill beginning in 2004.
       The equipment-expensing provisions will be effective for 
     equipment placed in service in taxable years beginning after 
     December 31, 2002.
                                 ______