Title VII, SEC. 7802. EXPENSING OF MEDICAL EQUIPMENT. (a) In General. Paragraph (1) of section 179(b) (relating to dollar limitation on expensing of certain depreciable business assets) is amended to read as follows: ``(1) Dollar limitation. ``(A) General rule. The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $17,500. ``(B) Health care property. The aggregate cost which may be taken into account under subsection (a) shall be increased by the lesser of ``(i) the cost of section 179 property which is health care property placed in service during the taxable year, or ``(ii) $10,000.'' (b) Definition. Section 179(d) (relating to definitions) is amended by adding at the end the following new paragraph: ``(11) Health care property. For purposes of this section, the term `health care property' means section 179 property ``(A) which is medical equipment used in the screening, monitoring, observation, diagnosis, or treatment of patients in a laboratory, medical, or hospital environment, ``(B) which is owned (directly or indirectly) and used by a physician (as defined in section 1861(r) of the Social Security Act) in the active conduct of such physician's full-time trade or business of providing primary health services (as defined in section 330(b)(1) of the Public Health Service Act) in a health professional shortage area (as defined in section 332(a)(1)(A) of the Public Health Service Act), and ``(C) substantially all the use of which is in such area.'' (c) Effective Date. The amendments made by this section shall apply to property placed in service after December 31, 1994.