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[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.
                                 <all>
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