,,ii #aadth ,,congress #ast ,session ,s4 #affj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bd1 #bjae,mr4 ,roberts 7for himself1 ,mr4 ,isakson1 ,mr4 ,blunt1 and ,mr4 ,toomey7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to modify and make permanent bonus depreciation4 #a4 ,bonus depreciation modified and made permanent 7a7 ,made permanent2 applicable to qualified improvement property 7#a7 ,in general ,section #afh7k77#b7 of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7#b7 ,qualified property ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified property means property-- 7i7 7,i7 to which this section applies which has a recovery period of #bj years or less1 7,,ii7 which is computer software 7as defined in section #afg7;f77#a77;,b77 for which a deduction is allowable under section #afg7;a7 without regard to this subsection1 7,,iii7 which is water utility property1 or 7,,iv7 which is qualified improvement property1 and 7ii7 the original use of which commences with the taxpayer4 7,b7 ,exception for alternative depreciation property ,the term qualified property shall not include any property to which the alternative depreciation system under subsection 7g7 applies1 determined-- 7i7 without regard to paragraph 7#g7 of subsection 7g7 7relating to election to have system apply71 and 7ii7 after application of section #bhj;,f7b7 7relating to listed property with limited business use74 7,c7 ,special rules 7i7 ,sale-leasebacks ,for purposes of clause 7ii7 and subparagraph 7,a77ii71 if property is-- 7,i7 originally placed in service by a person1 and 7,,ii7 sold and leased back by such person within #c months after the date such property was originally placed in service1 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 7,,ii74 7ii7 ,syndication ,for purposes of subparagraph 7,a77ii71 if-- 7,i7 property is originally placed in service by the lessor of such property1 7,,ii7 such property is sold by such lessor or any subsequent purchaser within #c months after the date such property was originally placed in service 7or1 in the case of multiple units of property subject to the same lease1 within #c months after the date the final unit is placed in service1 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 #ab months71 and 7,,iii7 the user of such property after the last sale during such #c-month period remains the same as when such property was originally placed in service1 such property shall be treated as originally placed in service not earlier than the date of such last sale4 7,d7 ,coordination with section #bhj;,f ,for purposes of section #bhj;,f-- 7i7 ,automobiles ,in the case of a passenger automobile 7as defined in section #bhj;,f7d77#e77 which is qualified property1 the ,secretary shall increase the limitation under section #bhj;,f7a77#a77;,a77i7 by #h1jjj4 7ii7 ,listed property ,the deduction allowable under paragraph 7#a7 shall be taken into account in computing any recapture amount under section #bhj;,f7b77#b74 7iii7 ,inflation adjustment ,in the case of any taxable year beginning in a calendar year after #bjae1 the #h1jjj amount in clause 7i7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the automobile price inflation adjustment determined under section #bhj;,f7d77#g77;,b77i7 for the calendar year in which such taxable year begins by substituting #bjad for #aihg in subclause 7,,ii7 thereof4 ,if any increase under the preceding sentence is not a multiple of #ajj1 such increase shall be rounded to the nearest multiple of #ajj4 7,e7 ,deduction allowed in computing minimum tax ,for purposes of determining alternative minimum taxable income under section #ee1 the deduction under section #afg for qualified property shall be determined without regard to any adjustment under section #ef4 4 7#b7 ,qualified improvement property ,section #afh7k77#c7 of such ,code is amended to read as follows3 7#c7 ,qualified improvement property ,for purposes of this subsection-- 7,a7 ,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 service4 7,b7 ,certain improvements not included ,such term shall not include any improvement for which the expenditure is attributable to-- 7i7 the enlargement of the building1 7ii7 any elevator or escalator1 or 7iii7 the internal structural framework of the building4 4 7b7 ,expansion of ,election ,to ,accelerate ,,amt ,credits in ,lieu of ,bonus ,depreciation ,section #afh7k77#d7 of such ,code is amended to read as follows3 7#d7 ,election to accelerate amt credits in lieu of bonus depreciation 7,a7 ,in general ,if a corporation elects to have this paragraph apply for any taxable year-- 7i7 paragraphs 7#a7 and 7#b77;,d7 shall not apply to any qualified property placed in service during such taxable year1 7ii7 the applicable depreciation method used under this section with respect to such property shall be the straight line method1 and 7iii7 the limitation imposed by section #ec7;c7 for such taxable year shall be increased by the bonus depreciation amount which is determined for such taxable year under subparagraph 7,b74 7,b7 ,bonus depreciation amount ,for purposes of this paragraph-- 7i7 ,in general ,the bonus depreciation amount for any taxable year is an amount equal to #bj percent of the excess 7if any7 of-- 7,i7 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 7#a7 applied to all such property 7and1 in the case of any such property which is a passenger automobile 7as defined in section #bhj;,f7d77#e771 if paragraph 7#b77;,d7 applied to such automobile71 over 7,,ii7 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 7#a7 and 7#b77;,d7 did not apply to any such property4 ,the aggregate amounts determined under subclauses 7,i7 and 7,,ii7 shall be determined without regard to any election made under subparagraph 7,a7 or subsection 7b77#b77;,d71 7b77#c77;,d71 or 7g77#g74 7ii7 ,limitation ,the bonus depreciation amount for any taxable year shall not exceed the lesser of-- 7,i7 #ej percent of the minimum tax credit under section #ec7;b7 for the first taxable year ending after ,december #ca1 #bjad1 or 7,,ii7 the minimum tax credit under section #ec7;b7 for such taxable year determined by taking into account only the adjusted net minimum tax for taxable years ending before ,january #a1 #bjae 7determined by treating credits as allowed on a first-in1 first-out basis74 7iii7 ,aggregation rule ,all corporations which are treated as a single employer under section #eb7;a7 shall be treated-- 7,i7 as #a taxpayer for purposes of this paragraph1 and 7,,ii7 as having elected the application of this paragraph if any such corporation so elects4 7,c7 ,credit refundable ,for purposes of section #fdja7;b71 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 7and not any other subpart74 7,d7 ,other rules 7i7 ,election ,any election under this paragraph may be revoked only with the consent of the ,secretary4 7ii7 ,partnerships with electing partners ,in the case of a corporation which is a partner in a partnership and which makes an election under subparagraph 7,a7 for the taxable year1 for purposes of determining such corporation's distributive share of partnership items under section #gjb for such taxable year-- 7,i7 paragraphs 7#a7 and 7#b77;,d7 shall not apply to any qualified property placed in service during such taxable year1 and 7,,ii7 the applicable depreciation method used under this section with respect to such property shall be the straight line method4 7iii7 ,certain partnerships ,in the case of a partnership in which more than #ej percent of the capital and profits interests are owned 7directly or indirectly7 at all times during the taxable year by #a corporation 7or by corporations treated as #a taxpayer under subparagraph 7,b77iii771 each partner shall compute its bonus depreciation amount under clause 7i7 of subparagraph 7,b7 by taking into account its distributive share of the amounts determined by the partnership under subclauses 7,i7 and 7,,ii7 of such clause for the taxable year of the partnership ending with or within the taxable year of the partner4 4 7c7 ,special rules for certain plants bearing fruits and nuts ,section #afh7k7 of such ,code is amended-- 7#a7 by striking paragraph 7#e71 and 7#b7 by inserting after paragraph 7#d7 the following new paragraph3 7#e7 ,special rules for certain plants bearing fruits and nuts 7,a7 ,in general ,in the case of any specified plant which is planted1 or is grafted to a plant that has already been planted1 by the taxpayer in the ordinary course of the taxpayer's farming business 7as defined in section #bfc;,a7e77#d77 during a taxable year for which the taxpayer has elected the application of this paragraph-- 7i7 a depreciation deduction equal to #ej percent of the adjusted basis of such specified plant shall be allowed under section #afg7;a7 for the taxable year in which such specified plant is so planted or grafted1 and 7ii7 the adjusted basis of such specified plant shall be reduced by the amount of such deduction4 7,b7 ,specified plant ,for purposes of this paragraph1 the term specified plant means-- 7i7 any tree or vine which bears fruits or nuts1 and 7ii7 any other plant which will have more than one yield of fruits or nuts and which generally has a period of more than #b years from the time of planting or grafting to the time at which such plant begins bearing fruits or nuts4 ,such term shall not include any property which is planted or grafted outside of the ,united ,states4 7,c7 ,election revocable only with consent ,an election under this paragraph may be revoked only with the consent of the ,secretary4 7,d7 ,additional depreciation may be claimed only once ,if this paragraph applies to any specified plant1 such specified plant shall not be treated as qualified property in the taxable year in which placed in service4 7,e7 ,deduction allowed in computing minimum tax ,rules similar to the rules of paragraph 7#b77;,e7 shall apply for purposes of this paragraph4 4 7d7 ,conforming amendments 7#a7 ,section #afh7;e77#f7 of such ,code is amended-- 7,a7 by redesignating subparagraphs 7,a7 and 7,b7 as subparagraphs 7,d7 and 7,e71 respectively1 7,b7 by striking all that precedes subparagraph 7,d7 7as so redesignated7 and inserting the following3 7#f7 ,qualified leasehold improvement property ,for purposes of this subsection-- 7,a7 ,in general ,the term qualified leasehold improvement property means any improvement to an interior portion of a building which is nonresidential real property if-- 7i7 such improvement is made under or pursuant to a lease 7as defined in subsection 7h77#g77-- 7,i7 by the lessee 7or any sublessee7 of such portion1 or 7,,ii7 by the lessor of such portion1 7ii7 such portion is to be occupied exclusively by the lessee 7or any sublessee7 of such portion1 and 7iii7 such improvement is placed in service more than #c years after the date the building was first placed in service4 7,b7 ,certain improvements not included ,such term shall not include any improvement for which the expenditure is attributable to-- 7i7 the enlargement of the building1 7ii7 any elevator or escalator1 7iii7 any structural component benefitting a common area1 or 7iv7 the internal structural framework of the building4 7,c7 ,definitions and special rules ,for purposes of this paragraph-- 7i7 ,commitment to lease treated as lease ,a commitment to enter into a lease shall be treated as a lease1 and the parties to such commitment shall be treated as lessor and lessee1 respectively4 7ii7 ,related persons ,a lease between related persons shall not be considered a lease4 ,for purposes of the preceding sentence1 the term related persons means-- 7,i7 members of an affiliated group 7as defined in section #aejd71 and 7,,ii7 persons having a relationship described in subsection 7b7 of section #bfg2 except that1 for purposes of this clause1 the phrase #hj percent or more shall be substituted for the phrase more than #ej percent each place it appears in such subsection4 1 and 7,c7 by striking subparagraph 7,a7 in subparagraph 7,e7 7as so redesignated7 and inserting subparagraph 7,d74 7#b7 ,section #afh7;e77#g77;,b7 of such ,code is amended by striking qualified leasehold improvement property and inserting qualified improvement property4 7#c7 ,section #afh7;e77#h7 of such ,code is amended by striking subparagraph 7,d74 7#d7 ,section #afh7k7 of such ,code is amended by adding at the end the following new paragraph3 7#f7 ,election out ,if a taxpayer makes an election under this paragraph with respect to any class of property for any taxable year1 paragraphs 7#a7 and 7#b77;,d7 shall not apply to any qualified property in such class placed in service during such taxable year4 ,an election under this paragraph may be revoked only with the consent of the ,secretary4 4 7#e7 ,section #afh7l77#c7 of such ,code is amended-- 7,a7 by striking section #afh7k7 in subparagraph 7,a7 and inserting subsection 7k71 and 7,b7 by striking section #afh7k77#b77;,d77i7 in subparagraph 7,b7 and inserting subsection 7k77#b77;,b74 7#f7 ,section #afh7l77#d7 of such ,code is amended by striking subparagraph 7,e7 of section #afh7k77#b7 and all that follows and inserting subsection 7k77#b77;,c7 shall apply44 7#g7 ,section #afh7l77#e7 of such ,code is amended by striking section #afh7k77#b77;,g7 and inserting subsection 7k77#b77;,e74 7#h7 ,section #bfc;,a7c7 of such ,code is amended by adding at the end the following new paragraph3 7#g7 ,coordination with section #afh7k77#e7 ,this section shall not apply to any amount allowed as a deduction by reason of section #afh7k77#e7 7relating to special rules for certain plants bearing fruits and nuts74 4 7#i7 ,section #dfj7;c77#f77;,b7 of such ,code is amended by striking which-- and all that follows and inserting which has a recovery period of #g years or less44 7#aj7 ,section #afh7k7 of such ,code is amended by striking acquired after ,december #ca1 #bjjg1 and before ,january #a1 #bjad in the heading thereof4 7e7 ,effective dates 7#a7 ,in general ,except as otherwise provided in this subsection1 the amendments made by this subsection shall apply to property placed in service after ,december #ca1 #bjad1 in taxable years ending after such date4 7#b7 ,expansion of election to accelerate amt credits in lieu of bonus depreciation 7,a7 ,in general ,the amendment made by subsection 7b7 shall apply to taxable years ending after ,december #ca1 #bjad4 7,b7 ,transitional rule ,in the case of any taxable year beginning before ,january #a1 #bjae1 and ending after ,december #ca1 #bjad1 the limitation under section #afh7k77#d77;,b77ii7 of the ,internal ,revenue ,code of #aihf 7as amended by this section7 shall be the sum of-- 7i7 the product of-- 7,i7 the maximum increase amount 7within the meaning of section #afh7k77#d77;,c77iii7 of such ,code1 as in effect before the amendments made by this section71 multiplied by 7,,ii7 a fraction the numerator of which is the number of days in the taxable year before ,january #a1 #bjae1 and the denominator of which is the number of days in the taxable year1 plus 7ii7 the product of-- 7,i7 such limitation 7determined without regard to this subparagraph71 multiplied by 7,,ii7 a fraction the numerator of which is the number of days in the taxable year after ,december #ca1 #bjad1 and the denominator of which is the number of days in the taxable year4 7#c7 ,special rules for certain plants bearing fruits and nuts ,the amendments made by subsection 7c7 7other than paragraph 7#a7 thereof7 shall apply to specified plants 7as defined in section #afh7k77#e77;,b7 of the ,internal ,revenue ,code of #aihf1 as amended by this section7 planted or grafted after ,december #ca1 #bjad4 #b4 ,budgetary effects ,the budgetary effects of this ,act shall not be entered on either ,,paygo scorecard maintained pursuant to section #d7;d7 of the ,statutory ,pay-,as-,you-,go ,act of #bjaj4