II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE 

4 PERMANENT. 

5 (a) MADE PERMANENT; APPLICABLE TO QUALIFIED

6 IMPROVEMENT PROPERTY.— 

7 (1) IN GENERAL.—Section 168(k)(2) of the In8 ternal Revenue Code of 1986 is amended to read as 

9 follows: 


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1 ‘‘(2) QUALIFIED PROPERTY.—For purposes of 

2 this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 property’ means property— 

5 ‘‘(i)(I) to which this section applies 

6 which has a recovery period of 20 years or 

7 less, 

8 ‘‘(II) which is computer software (as 

9 defined in section 167(f)(1)(B)) for which 

10 a deduction is allowable under section 

11 167(a) without regard to this subsection, 

12 ‘‘(III) which is water utility property, 

13 or 

14 ‘‘(IV) which is qualified improvement 

15 property, and 

16 ‘‘(ii) the original use of which com17 mences with the taxpayer. 

18 ‘‘(B) EXCEPTION FOR ALTERNATIVE DE19 PRECIATION PROPERTY.—The term ‘qualified 

20 property’ shall not include any property to 

21 which the alternative depreciation system under 

22 subsection (g) applies, determined— 

23 ‘‘(i) without regard to paragraph (7) 

24 of subsection (g) (relating to election to 

25 have system apply), and 


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1 ‘‘(ii) after application of section 

2 280F(b) (relating to listed property with 

3 limited business use). 

4 ‘‘(C) SPECIAL RULES.— 

5 ‘‘(i) SALE-LEASEBACKS.—For pur6 poses of clause (ii) and subparagraph 

7 (A)(ii), if property is— 

8 ‘‘(I) originally placed in service 

9 by a person, and 

10 ‘‘(II) sold and leased back by 

11 such person within 3 months after the 

12 date such property was originally 

13 placed in service, 

14 such property shall be treated as originally 

15 placed in service not earlier than the date 

16 on which such property is used under the 

17 leaseback referred to in subclause (II). 

18 ‘‘(ii) SYNDICATION.—For purposes of 

19 subparagraph (A)(ii), if— 

20 ‘‘(I) property is originally placed 

21 in service by the lessor of such prop22 erty, 

23 ‘‘(II) such property is sold by 

24 such lessor or any subsequent pur25 chaser within 3 months after the date 


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1 such property was originally placed in 

2 service (or, in the case of multiple 

3 units of property subject to the same 

4 lease, within 3 months after the date 

5 the final unit is placed in service, so 

6 long as the period between the time 

7 the first unit is placed in service and 

8 the time the last unit is placed in 

9 service does not exceed 12 months), 

10 and 

11 ‘‘(III) the user of such property 

12 after the last sale during such 3- 

13 month period remains the same as 

14 when such property was originally 

15 placed in service, 

16 such property shall be treated as originally 

17 placed in service not earlier than the date 

18 of such last sale. 

19 ‘‘(D) COORDINATION WITH SECTION

20 280F.—For purposes of section 280F— 

21 ‘‘(i) AUTOMOBILES.—In the case of a 

22 passenger automobile (as defined in section 

23 280F(d)(5)) which is qualified property, 

24 the Secretary shall increase the limitation 

25 under section 280F(a)(1)(A)(i) by $8,000. 


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1 ‘‘(ii) LISTED PROPERTY.—The deduc2 tion allowable under paragraph (1) shall be 

3 taken into account in computing any re4 capture amount under section 280F(b)(2). 

5 ‘‘(iii) INFLATION ADJUSTMENT.—In 

6 the case of any taxable year beginning in 

7 a calendar year after 2015, the $8,000 

8 amount in clause (i) shall be increased by 

9 an amount equal to— 

10 ‘‘(I) such dollar amount, multi11 plied by 

12 ‘‘(II) the automobile price infla13 tion adjustment determined under sec14 tion 280F(d)(7)(B)(i) for the calendar 

15 year in which such taxable year begins 

16 by substituting ‘2014’ for ‘1987’ in 

17 subclause (II) thereof. 

18 If any increase under the preceding sen19 tence is not a multiple of $100, such in20 crease shall be rounded to the nearest mul21 tiple of $100. 

22 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

23 MINIMUM TAX.—For purposes of determining 

24 alternative minimum taxable income under sec25 tion 55, the deduction under section 167 for 


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1 qualified property shall be determined without 

2 regard to any adjustment under section 56.’’. 

3 (2) QUALIFIED IMPROVEMENT PROPERTY.— 

4 Section 168(k)(3) of such Code is amended to read 

5 as follows: 

6 ‘‘(3) QUALIFIED IMPROVEMENT PROPERTY.— 

7 For purposes of this subsection— 

8 ‘‘(A) IN GENERAL.—The term ‘qualified 

9 improvement property’ means any improvement 

10 to an interior portion of a building which is 

11 nonresidential real property if such improve12 ment is placed in service after the date such 

13 building was first placed in service. 

14 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN15 CLUDED.—Such term shall not include any im16 provement for which the expenditure is attrib17 utable to— 

18 ‘‘(i) the enlargement of the building, 

19 ‘‘(ii) any elevator or escalator, or 

20 ‘‘(iii) the internal structural frame21 work of the building.’’. 

22 (b) EXPANSION OF ELECTION TO ACCELERATE AMT 

23 CREDITS IN LIEU OF BONUS DEPRECIATION.—Section 

24 168(k)(4) of such Code is amended to read as follows: 


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1 ‘‘(4) ELECTION TO ACCELERATE AMT CREDITS

2 IN LIEU OF BONUS DEPRECIATION.— 

3 ‘‘(A) IN GENERAL.—If a corporation elects 

4 to have this paragraph apply for any taxable 

5 year— 

6 ‘‘(i) paragraphs (1) and (2)(D) shall 

7 not apply to any qualified property placed 

8 in service during such taxable year, 

9 ‘‘(ii) the applicable depreciation meth10 od used under this section with respect to 

11 such property shall be the straight line 

12 method, and 

13 ‘‘(iii) the limitation imposed by section 

14 53(c) for such taxable year shall be in15 creased by the bonus depreciation amount 

16 which is determined for such taxable year 

17 under subparagraph (B). 

18 ‘‘(B) BONUS DEPRECIATION AMOUNT.— 

19 For purposes of this paragraph— 

20 ‘‘(i) IN GENERAL.—The bonus depre21 ciation amount for any taxable year is an 

22 amount equal to 20 percent of the excess 

23 (if any) of— 

24 ‘‘(I) the aggregate amount of de25 preciation which would be allowed 


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1 under this section for qualified prop2 erty placed in service by the taxpayer 

3 during such taxable year if paragraph 

4 (1) applied to all such property (and, 

5 in the case of any such property which 

6 is a passenger automobile (as defined 

7 in section 280F(d)(5)), if paragraph 

8 (2)(D) applied to such automobile), 

9 over 

10 ‘‘(II) the aggregate amount of 

11 depreciation which would be allowed 

12 under this section for qualified prop13 erty placed in service by the taxpayer 

14 during such taxable year if para15 graphs (1) and (2)(D) did not apply 

16 to any such property. 

17 The aggregate amounts determined under 

18 subclauses (I) and (II) shall be determined 

19 without regard to any election made under 

20 subparagraph (A) or subsection (b)(2)(D), 

21 (b)(3)(D), or (g)(7). 

22 ‘‘(ii) LIMITATION.—The bonus depre23 ciation amount for any taxable year shall 

24 not exceed the lesser of— 


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1 ‘‘(I) 50 percent of the minimum 

2 tax credit under section 53(b) for the 

3 first taxable year ending after Decem4 ber 31, 2014, or 

5 ‘‘(II) the minimum tax credit 

6 under section 53(b) for such taxable 

7 year determined by taking into ac8 count only the adjusted net minimum 

9 tax for taxable years ending before 

10 January 1, 2015 (determined by 

11 treating credits as allowed on a first12 in, first-out basis). 

13 ‘‘(iii) AGGREGATION RULE.—All cor14 porations which are treated as a single em15 ployer under section 52(a) shall be treat16 ed— 

17 ‘‘(I) as 1 taxpayer for purposes 

18 of this paragraph, and 

19 ‘‘(II) as having elected the appli20 cation of this paragraph if any such 

21 corporation so elects. 

22 ‘‘(C) CREDIT REFUNDABLE.—For pur23 poses of section 6401(b), the aggregate increase 

24 in the credits allowable under part IV of sub25 chapter A for any taxable year resulting from 


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1 the application of this paragraph shall be treat2 ed as allowed under subpart C of such part 

3 (and not any other subpart). 

4 ‘‘(D) OTHER RULES.— 

5 ‘‘(i) ELECTION.—Any election under 

6 this paragraph may be revoked only with 

7 the consent of the Secretary. 

8 ‘‘(ii) PARTNERSHIPS WITH ELECTING

9 PARTNERS.—In the case of a corporation 

10 which is a partner in a partnership and 

11 which makes an election under subpara12 graph (A) for the taxable year, for pur13 poses of determining such corporation’s 

14 distributive share of partnership items 

15 under section 702 for such taxable year— 

16 ‘‘(I) paragraphs (1) and (2)(D) 

17 shall not apply to any qualified prop18 erty placed in service during such tax19 able year, and 

20 ‘‘(II) the applicable depreciation 

21 method used under this section with 

22 respect to such property shall be the 

23 straight line method. 

24 ‘‘(iii) CERTAIN PARTNERSHIPS.—In 

25 the case of a partnership in which more 


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1 than 50 percent of the capital and profits 

2 interests are owned (directly or indirectly) 

3 at all times during the taxable year by 1 

4 corporation (or by corporations treated as 

5 1 taxpayer under subparagraph (B)(iii)), 

6 each partner shall compute its bonus de7 preciation amount under clause (i) of sub8 paragraph (B) by taking into account its 

9 distributive share of the amounts deter10 mined by the partnership under subclauses 

11 (I) and (II) of such clause for the taxable 

12 year of the partnership ending with or 

13 within the taxable year of the partner.’’. 

14 (c) SPECIAL RULES FOR CERTAIN PLANTS BEARING

15 FRUITS AND NUTS.—Section 168(k) of such Code is 

16 amended— 

17 (1) by striking paragraph (5), and 

18 (2) by inserting after paragraph (4) the fol19 lowing new paragraph: 

20 ‘‘(5) SPECIAL RULES FOR CERTAIN PLANTS

21 BEARING FRUITS AND NUTS.— 

22 ‘‘(A) IN GENERAL.—In the case of any 

23 specified plant which is planted, or is grafted to 

24 a plant that has already been planted, by the 

25 taxpayer in the ordinary course of the taxVerDate Sep 11 2014 23:10 Jun 26, 2015 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1660.IS S1660

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1 payer’s farming business (as defined in section 

2 263A(e)(4)) during a taxable year for which the 

3 taxpayer has elected the application of this 

4 paragraph— 

5 ‘‘(i) a depreciation deduction equal to 

6 50 percent of the adjusted basis of such 

7 specified plant shall be allowed under sec8 tion 167(a) for the taxable year in which 

9 such specified plant is so planted or graft10 ed, and 

11 ‘‘(ii) the adjusted basis of such speci12 fied plant shall be reduced by the amount 

13 of such deduction. 

14 ‘‘(B) SPECIFIED PLANT.—For purposes of 

15 this paragraph, the term ‘specified plant’ 

16 means— 

17 ‘‘(i) any tree or vine which bears 

18 fruits or nuts, and 

19 ‘‘(ii) any other plant which will have 

20 more than one yield of fruits or nuts and 

21 which generally has a period of more than 

22 2 years from the time of planting or graft23 ing to the time at which such plant begins 

24 bearing fruits or nuts. 


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1 Such term shall not include any property which 

2 is planted or grafted outside of the United 

3 States. 

4 ‘‘(C) ELECTION REVOCABLE ONLY WITH

5 CONSENT.—An election under this paragraph 

6 may be revoked only with the consent of the 

7 Secretary. 

8 ‘‘(D) ADDITIONAL DEPRECIATION MAY BE

9 CLAIMED ONLY ONCE.—If this paragraph ap10 plies to any specified plant, such specified plant 

11 shall not be treated as qualified property in the 

12 taxable year in which placed in service. 

13 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

14 MINIMUM TAX.—Rules similar to the rules of 

15 paragraph (2)(E) shall apply for purposes of 

16 this paragraph.’’. 

17 (d) CONFORMING AMENDMENTS.— 

18 (1) Section 168(e)(6) of such Code is amend19 ed— 

20 (A) by redesignating subparagraphs (A) 

21 and (B) as subparagraphs (D) and (E), respec22 tively, 

23 (B) by striking all that precedes subpara24 graph (D) (as so redesignated) and inserting 

25 the following: 


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1 ‘‘(6) QUALIFIED LEASEHOLD IMPROVEMENT

2 PROPERTY.—For purposes of this subsection— 

3 ‘‘(A) IN GENERAL.—The term ‘qualified 

4 leasehold improvement property’ means any im5 provement to an interior portion of a building 

6 which is nonresidential real property if— 

7 ‘‘(i) such improvement is made under 

8 or pursuant to a lease (as defined in sub9 section (h)(7))— 

10 ‘‘(I) by the lessee (or any subles11 see) of such portion, or 

12 ‘‘(II) by the lessor of such por13 tion, 

14 ‘‘(ii) such portion is to be occupied ex15 clusively by the lessee (or any sublessee) of 

16 such portion, and 

17 ‘‘(iii) such improvement is placed in 

18 service more than 3 years after the date 

19 the building was first placed in service. 

20 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN21 CLUDED.—Such term shall not include any im22 provement for which the expenditure is attrib23 utable to— 

24 ‘‘(i) the enlargement of the building, 

25 ‘‘(ii) any elevator or escalator, 


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1 ‘‘(iii) any structural component bene2 fitting a common area, or 

3 ‘‘(iv) the internal structural frame4 work of the building. 

5 ‘‘(C) DEFINITIONS AND SPECIAL RULES.— 

6 For purposes of this paragraph— 

7 ‘‘(i) COMMITMENT TO LEASE TREAT8 ED AS LEASE.—A commitment to enter 

9 into a lease shall be treated as a lease, and 

10 the parties to such commitment shall be 

11 treated as lessor and lessee, respectively. 

12 ‘‘(ii) RELATED PERSONS.—A lease be13 tween related persons shall not be consid14 ered a lease. For purposes of the preceding 

15 sentence, the term ‘related persons’ 

16 means— 

17 ‘‘(I) members of an affiliated 

18 group (as defined in section 1504), 

19 and 

20 ‘‘(II) persons having a relation21 ship described in subsection (b) of 

22 section 267; except that, for purposes 

23 of this clause, the phrase ‘80 percent 

24 or more’ shall be substituted for the 

25 phrase ‘more than 50 percent’ each 


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1 place it appears in such subsection.’’, 

2 and 

3 (C) by striking ‘‘subparagraph (A)’’ in 

4 subparagraph (E) (as so redesignated) and in5 serting ‘‘subparagraph (D)’’. 

6 (2) Section 168(e)(7)(B) of such Code is 

7 amended by striking ‘‘qualified leasehold improve8 ment property’’ and inserting ‘‘qualified improve9 ment property’’. 

10 (3) Section 168(e)(8) of such Code is amended 

11 by striking subparagraph (D). 

12 (4) Section 168(k) of such Code is amended by 

13 adding at the end the following new paragraph: 

14 ‘‘(6) ELECTION OUT.—If a taxpayer makes an 

15 election under this paragraph with respect to any 

16 class of property for any taxable year, paragraphs 

17 (1) and (2)(D) shall not apply to any qualified prop18 erty in such class placed in service during such tax19 able year. An election under this paragraph may be 

20 revoked only with the consent of the Secretary.’’. 

21 (5) Section 168(l)(3) of such Code is amend22 ed— 

23 (A) by striking ‘‘section 168(k)’’ in sub24 paragraph (A) and inserting ‘‘subsection (k)’’, 

25 and 


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1 (B) by striking ‘‘section 168(k)(2)(D)(i)’’ 

2 in subparagraph (B) and inserting ‘‘subsection 

3 (k)(2)(B)’’. 

4 (6) Section 168(l)(4) of such Code is amended 

5 by striking ‘‘subparagraph (E) of section 168(k)(2)’’ 

6 and all that follows and inserting ‘‘subsection 

7 (k)(2)(C) shall apply.’’. 

8 (7) Section 168(l)(5) of such Code is amended 

9 by striking ‘‘section 168(k)(2)(G)’’ and inserting 

10 ‘‘subsection (k)(2)(E)’’. 

11 (8) Section 263A(c) of such Code is amended 

12 by adding at the end the following new paragraph: 

13 ‘‘(7) COORDINATION WITH SECTION

14 168(k)(5).—This section shall not apply to any 

15 amount allowed as a deduction by reason of section 

16 168(k)(5) (relating to special rules for certain plants 

17 bearing fruits and nuts).’’. 

18 (9) Section 460(c)(6)(B) of such Code is 

19 amended by striking ‘‘which—’’ and all that follows 

20 and inserting ‘‘which has a recovery period of 7 

21 years or less.’’. 

22 (10) Section 168(k) of such Code is amended 

23 by striking ‘‘ACQUIRED AFTER DECEMBER 31, 

24 2007, AND BEFORE JANUARY 1, 2014’’ in the head25 ing thereof. 


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1 (e) EFFECTIVE DATES.— 

2 (1) IN GENERAL.—Except as otherwise pro3 vided in this subsection, the amendments made by 

4 this subsection shall apply to property placed in 

5 service after December 31, 2014, in taxable years 

6 ending after such date. 

7 (2) EXPANSION OF ELECTION TO ACCELERATE

8 AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 

9 (A) IN GENERAL.—The amendment made 

10 by subsection (b) shall apply to taxable years 

11 ending after December 31, 2014. 

12 (B) TRANSITIONAL RULE.—In the case of 

13 any taxable year beginning before January 1, 

14 2015, and ending after December 31, 2014, the 

15 limitation under section 168(k)(4)(B)(ii) of the 

16 Internal Revenue Code of 1986 (as amended by 

17 this section) shall be the sum of— 

18 (i) the product of— 

19 (I) the maximum increase 

20 amount (within the meaning of sec21 tion 168(k)(4)(C)(iii) of such Code, as 

22 in effect before the amendments made 

23 by this section), multiplied by 

24 (II) a fraction the numerator of 

25 which is the number of days in the 


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1 taxable year before January 1, 2015, 

2 and the denominator of which is the 

3 number of days in the taxable year, 

4 plus 

5 (ii) the product of— 

6 (I) such limitation (determined 

7 without regard to this subparagraph), 

8 multiplied by 

9 (II) a fraction the numerator of 

10 which is the number of days in the 

11 taxable year after December 31, 2014, 

12 and the denominator of which is the 

13 number of days in the taxable year. 

14 (3) SPECIAL RULES FOR CERTAIN PLANTS

15 BEARING FRUITS AND NUTS.—The amendments 

16 made by subsection (c) (other than paragraph (1) 

17 thereof) shall apply to specified plants (as defined in 

18 section 168(k)(5)(B) of the Internal Revenue Code 

19 of 1986, as amended by this section) planted or 

20 grafted after December 31, 2014. 

21 SEC. 2. BUDGETARY EFFECTS. 

22 The budgetary effects of this Act shall not be entered 

23 on either PAYGO scorecard maintained pursuant to sec24 tion 4(d) of the Statutory Pay-As-You-Go Act of 2010. 

Æ 


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