[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1660 Introduced in Senate (IS)]
114th CONGRESS
1st Session
S. 1660
To amend the Internal Revenue Code of 1986 to modify and make permanent
bonus depreciation.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 24, 2015
Mr. Roberts (for himself, Mr. Isakson, Mr. Blunt, and Mr. Toomey)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify and make permanent
bonus depreciation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE PERMANENT.
(a) Made Permanent; Applicable to Qualified Improvement Property.--
(1) In general.--Section 168(k)(2) of the Internal Revenue
Code of 1986 is amended to read as follows:
``(2) Qualified property.--For purposes of this
subsection--
``(A) In general.--The term `qualified property'
means property--
``(i)(I) to which this section applies
which has a recovery period of 20 years or
less,
``(II) which is computer software (as
defined in section 167(f)(1)(B)) for which a
deduction is allowable under section 167(a)
without regard to this subsection,
``(III) which is water utility property, or
``(IV) which is qualified improvement
property, and
``(ii) the original use of which commences
with the taxpayer.
``(B) Exception for alternative depreciation
property.--The term `qualified property' shall not
include any property to which the alternative
depreciation system under subsection (g) applies,
determined--
``(i) without regard to paragraph (7) of
subsection (g) (relating to election to have
system apply), and
``(ii) after application of section 280F(b)
(relating to listed property with limited
business use).
``(C) Special rules.--
``(i) Sale-leasebacks.--For purposes of
clause (ii) and subparagraph (A)(ii), if
property is--
``(I) originally placed in service
by a person, and
``(II) sold and leased back by such
person within 3 months after the date
such property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date on
which such property is used under the leaseback
referred to in subclause (II).
``(ii) Syndication.--For purposes of
subparagraph (A)(ii), if--
``(I) property is originally placed
in service by the lessor of such
property,
``(II) such property is sold by
such lessor or any subsequent purchaser
within 3 months after the date such
property was originally placed in
service (or, in the case of multiple
units of property subject to the same
lease, within 3 months after the date
the final unit is placed in service, so
long as the period between the time the
first unit is placed in service and the
time the last unit is placed in service
does not exceed 12 months), and
``(III) the user of such property
after the last sale during such 3-month
period remains the same as when such
property was originally placed in
service,
such property shall be treated as originally
placed in service not earlier than the date of
such last sale.
``(D) Coordination with section 280f.--For purposes
of section 280F--
``(i) Automobiles.--In the case of a
passenger automobile (as defined in section
280F(d)(5)) which is qualified property, the
Secretary shall increase the limitation under
section 280F(a)(1)(A)(i) by $8,000.
``(ii) Listed property.--The deduction
allowable under paragraph (1) shall be taken
into account in computing any recapture amount
under section 280F(b)(2).
``(iii) Inflation adjustment.--In the case
of any taxable year beginning in a calendar
year after 2015, the $8,000 amount in clause
(i) shall be increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the automobile price
inflation adjustment determined under
section 280F(d)(7)(B)(i) for the
calendar year in which such taxable
year begins by substituting `2014' for
`1987' in subclause (II) thereof.
If any increase under the preceding sentence is
not a multiple of $100, such increase shall be
rounded to the nearest multiple of $100.
``(E) Deduction allowed in computing minimum tax.--
For purposes of determining alternative minimum taxable
income under section 55, the deduction under section
167 for qualified property shall be determined without
regard to any adjustment under section 56.''.
(2) Qualified improvement property.--Section 168(k)(3) of
such Code is amended to read as follows:
``(3) Qualified improvement property.--For purposes of this
subsection--
``(A) In general.--The term `qualified improvement
property' means any improvement to an interior portion
of a building which is nonresidential real property if
such improvement is placed in service after the date
such building was first placed in service.
``(B) Certain improvements not included.--Such term
shall not include any improvement for which the
expenditure is attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator, or
``(iii) the internal structural framework
of the building.''.
(b) Expansion of Election To Accelerate AMT Credits in Lieu of
Bonus Depreciation.--Section 168(k)(4) of such Code is amended to read
as follows:
``(4) Election to accelerate amt credits in lieu of bonus
depreciation.--
``(A) In general.--If a corporation elects to have
this paragraph apply for any taxable year--
``(i) paragraphs (1) and (2)(D) shall not
apply to any qualified property placed in
service during such taxable year,
``(ii) the applicable depreciation method
used under this section with respect to such
property shall be the straight line method, and
``(iii) the limitation imposed by section
53(c) for such taxable year shall be increased
by the bonus depreciation amount which is
determined for such taxable year under
subparagraph (B).
``(B) Bonus depreciation amount.--For purposes of
this paragraph--
``(i) In general.--The bonus depreciation
amount for any taxable year is an amount equal
to 20 percent of the excess (if any) of--
``(I) the aggregate amount of
depreciation which would be allowed
under this section for qualified
property placed in service by the
taxpayer during such taxable year if
paragraph (1) applied to all such
property (and, in the case of any such
property which is a passenger
automobile (as defined in section
280F(d)(5)), if paragraph (2)(D)
applied to such automobile), over
``(II) the aggregate amount of
depreciation which would be allowed
under this section for qualified
property placed in service by the
taxpayer during such taxable year if
paragraphs (1) and (2)(D) did not apply
to any such property.
The aggregate amounts determined under
subclauses (I) and (II) shall be determined
without regard to any election made under
subparagraph (A) or subsection (b)(2)(D),
(b)(3)(D), or (g)(7).
``(ii) Limitation.--The bonus depreciation
amount for any taxable year shall not exceed
the lesser of--
``(I) 50 percent of the minimum tax
credit under section 53(b) for the
first taxable year ending after
December 31, 2014, or
``(II) the minimum tax credit under
section 53(b) for such taxable year
determined by taking into account only
the adjusted net minimum tax for
taxable years ending before January 1,
2015 (determined by treating credits as
allowed on a first-in, first-out
basis).
``(iii) Aggregation rule.--All corporations
which are treated as a single employer under
section 52(a) shall be treated--
``(I) as 1 taxpayer for purposes of
this paragraph, and
``(II) as having elected the
application of this paragraph if any
such corporation so elects.
``(C) Credit refundable.--For purposes of section
6401(b), the aggregate increase in the credits
allowable under part IV of subchapter A for any taxable
year resulting from the application of this paragraph
shall be treated as allowed under subpart C of such
part (and not any other subpart).
``(D) Other rules.--
``(i) Election.--Any election under this
paragraph may be revoked only with the consent
of the Secretary.
``(ii) Partnerships with electing
partners.--In the case of a corporation which
is a partner in a partnership and which makes
an election under subparagraph (A) for the
taxable year, for purposes of determining such
corporation's distributive share of partnership
items under section 702 for such taxable year--
``(I) paragraphs (1) and (2)(D)
shall not apply to any qualified
property placed in service during such
taxable year, and
``(II) the applicable depreciation
method used under this section with
respect to such property shall be the
straight line method.
``(iii) Certain partnerships.--In the case
of a partnership in which more than 50 percent
of the capital and profits interests are owned
(directly or indirectly) at all times during
the taxable year by 1 corporation (or by
corporations treated as 1 taxpayer under
subparagraph (B)(iii)), each partner shall
compute its bonus depreciation amount under
clause (i) of subparagraph (B) by taking into
account its distributive share of the amounts
determined by the partnership under subclauses
(I) and (II) of such clause for the taxable
year of the partnership ending with or within
the taxable year of the partner.''.
(c) Special Rules for Certain Plants Bearing Fruits and Nuts.--
Section 168(k) of such Code is amended--
(1) by striking paragraph (5), and
(2) by inserting after paragraph (4) the following new
paragraph:
``(5) Special rules for certain plants bearing fruits and
nuts.--
``(A) In general.--In the case of any specified
plant which is planted, or is grafted to a plant that
has already been planted, by the taxpayer in the
ordinary course of the taxpayer's farming business (as
defined in section 263A(e)(4)) during a taxable year
for which the taxpayer has elected the application of
this paragraph--
``(i) a depreciation deduction equal to 50
percent of the adjusted basis of such specified
plant shall be allowed under section 167(a) for
the taxable year in which such specified plant
is so planted or grafted, and
``(ii) the adjusted basis of such specified
plant shall be reduced by the amount of such
deduction.
``(B) Specified plant.--For purposes of this
paragraph, the term `specified plant' means--
``(i) any tree or vine which bears fruits
or nuts, and
``(ii) any other plant which will have more
than one yield of fruits or nuts and which
generally has a period of more than 2 years
from the time of planting or grafting to the
time at which such plant begins bearing fruits
or nuts.
Such term shall not include any property which is
planted or grafted outside of the United States.
``(C) Election revocable only with consent.--An
election under this paragraph may be revoked only with
the consent of the Secretary.
``(D) Additional depreciation may be claimed only
once.--If this paragraph applies to any specified
plant, such specified plant shall not be treated as
qualified property in the taxable year in which placed
in service.
``(E) Deduction allowed in computing minimum tax.--
Rules similar to the rules of paragraph (2)(E) shall
apply for purposes of this paragraph.''.
(d) Conforming Amendments.--
(1) Section 168(e)(6) of such Code is amended--
(A) by redesignating subparagraphs (A) and (B) as
subparagraphs (D) and (E), respectively,
(B) by striking all that precedes subparagraph (D)
(as so redesignated) and inserting the following:
``(6) Qualified leasehold improvement property.--For
purposes of this subsection--
``(A) In general.--The term `qualified leasehold
improvement property' means any improvement to an
interior portion of a building which is nonresidential
real property if--
``(i) such improvement is made under or
pursuant to a lease (as defined in subsection
(h)(7))--
``(I) by the lessee (or any
sublessee) of such portion, or
``(II) by the lessor of such
portion,
``(ii) such portion is to be occupied
exclusively by the lessee (or any sublessee) of
such portion, and
``(iii) such improvement is placed in
service more than 3 years after the date the
building was first placed in service.
``(B) Certain improvements not included.--Such term
shall not include any improvement for which the
expenditure is attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component
benefitting a common area, or
``(iv) the internal structural framework of
the building.
``(C) Definitions and special rules.--For purposes
of this paragraph--
``(i) Commitment to lease treated as
lease.--A commitment to enter into a lease
shall be treated as a lease, and the parties to
such commitment shall be treated as lessor and
lessee, respectively.
``(ii) Related persons.--A lease between
related persons shall not be considered a
lease. For purposes of the preceding sentence,
the term `related persons' means--
``(I) members of an affiliated
group (as defined in section 1504), and
``(II) persons having a
relationship described in subsection
(b) of section 267; except that, for
purposes of this clause, the phrase `80
percent or more' shall be substituted
for the phrase `more than 50 percent'
each place it appears in such
subsection.'', and
(C) by striking ``subparagraph (A)'' in
subparagraph (E) (as so redesignated) and inserting
``subparagraph (D)''.
(2) Section 168(e)(7)(B) of such Code is amended by
striking ``qualified leasehold improvement property'' and
inserting ``qualified improvement property''.
(3) Section 168(e)(8) of such Code is amended by striking
subparagraph (D).
(4) Section 168(k) of such Code is amended by adding at the
end the following new paragraph:
``(6) Election out.--If a taxpayer makes an election under
this paragraph with respect to any class of property for any
taxable year, paragraphs (1) and (2)(D) shall not apply to any
qualified property in such class placed in service during such
taxable year. An election under this paragraph may be revoked
only with the consent of the Secretary.''.
(5) Section 168(l)(3) of such Code is amended--
(A) by striking ``section 168(k)'' in subparagraph
(A) and inserting ``subsection (k)'', and
(B) by striking ``section 168(k)(2)(D)(i)'' in
subparagraph (B) and inserting ``subsection
(k)(2)(B)''.
(6) Section 168(l)(4) of such Code is amended by striking
``subparagraph (E) of section 168(k)(2)'' and all that follows
and inserting ``subsection (k)(2)(C) shall apply.''.
(7) Section 168(l)(5) of such Code is amended by striking
``section 168(k)(2)(G)'' and inserting ``subsection
(k)(2)(E)''.
(8) Section 263A(c) of such Code is amended by adding at
the end the following new paragraph:
``(7) Coordination with section 168(k)(5).--This section
shall not apply to any amount allowed as a deduction by reason
of section 168(k)(5) (relating to special rules for certain
plants bearing fruits and nuts).''.
(9) Section 460(c)(6)(B) of such Code is amended by
striking ``which--'' and all that follows and inserting ``which
has a recovery period of 7 years or less.''.
(10) Section 168(k) of such Code is amended by striking
``Acquired After December 31, 2007, and Before January 1,
2014'' in the heading thereof.
(e) Effective Dates.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this subsection shall apply
to property placed in service after December 31, 2014, in
taxable years ending after such date.
(2) Expansion of election to accelerate amt credits in lieu
of bonus depreciation.--
(A) In general.--The amendment made by subsection
(b) shall apply to taxable years ending after December
31, 2014.
(B) Transitional rule.--In the case of any taxable
year beginning before January 1, 2015, and ending after
December 31, 2014, the limitation under section
168(k)(4)(B)(ii) of the Internal Revenue Code of 1986
(as amended by this section) shall be the sum of--
(i) the product of--
(I) the maximum increase amount
(within the meaning of section
168(k)(4)(C)(iii) of such Code, as in
effect before the amendments made by
this section), multiplied by
(II) a fraction the numerator of
which is the number of days in the
taxable year before January 1, 2015,
and the denominator of which is the
number of days in the taxable year,
plus
(ii) the product of--
(I) such limitation (determined
without regard to this subparagraph),
multiplied by
(II) a fraction the numerator of
which is the number of days in the
taxable year after December 31, 2014,
and the denominator of which is the
number of days in the taxable year.
(3) Special rules for certain plants bearing fruits and
nuts.--The amendments made by subsection (c) (other than
paragraph (1) thereof) shall apply to specified plants (as
defined in section 168(k)(5)(B) of the Internal Revenue Code of
1986, as amended by this section) planted or grafted after
December 31, 2014.
SEC. 2. BUDGETARY EFFECTS.
The budgetary effects of this Act shall not be entered on either
PAYGO scorecard maintained pursuant to section 4(d) of the Statutory
Pay-As-You-Go Act of 2010.
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