I 

109TH CONGRESS 

1ST SESSION H. R. 2320 

To amend the Internal Revenue Code of 1986 to permanently extend the 

50-percent bonus depreciation added by the Jobs and Growth Tax Relief 

Reconciliation Act of 2003. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 12, 2005 

Mr. WELLER introduced the following bill; which was referred to the 

Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to permanently 

extend the 50-percent bonus depreciation added by the 

Jobs and Growth Tax Relief Reconciliation Act of 2003. 

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

3 SECTION 1. PERMANENT EXTENSION OF 50-PERCENT 

4 BONUS DEPRECIATION. 

5 (a) IN GENERAL.—Subparagraph (B) of section 

6 168(k)(4) of the Internal Revenue Code of 1986 (relating 

7 to special allowance for certain property acquired after 

8 September 10, 2001, and before January 1, 2005) is 

9 amended to read as follows: 
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1 ‘‘(B) 50-PERCENT BONUS DEPRECIATION

2 PROPERTY.—For purposes of this subsection, 

3 the term ‘50-percent bonus depreciation prop4 erty’ means property described in paragraph 

5 (2)(A)(i)— 

6 ‘‘(i) the original use of which com7 mences with the taxpayer after May 5, 

8 2003, and 

9 ‘‘(ii) which is acquired by the taxpayer 

10 after May 5, 2003, but only if no written 

11 binding contract for the acquisition was in 

12 effect before May 6, 2003.’’ 

13 (b) REPEAL OF TERMINATION DATES FOR 30-PER14 CENT BONUS DEPRECIATION PROPERTY.—Subparagraph 

15 (A) of section 168(k)(2) of such Code is amended by add16 ing ‘‘and’’ at the end of clause (ii) and by striking clauses 

17 (iii) and (iv) and inserting the following new clause: 

18 ‘‘(iii) which is— 

19 ‘‘(I) acquired by the taxpayer 

20 after September 10, 2001, but only if 

21 no written binding contract for the ac22 quisition was in effect before Sep23 tember 11, 2001, or 

24 ‘‘(II) acquired by the taxpayer 

25 pursuant to a written binding contract 
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1 which was entered into after Sep2 tember 10, 2001.’’ 

3 (c) TECHNICAL AMENDMENTS.— 

4 (1) Paragraph (2) of section 168(k) of such 

5 Code is amended by striking subparagraph (B) and 

6 by redesignating the succeeding subparagraphs ac7 cordingly. 

8 (2) Clause (i) of section 168(k)(2)(D) of such 

9 Code, as redesignated by paragraph (1), is amended 

10 by striking ‘‘and before January 1, 2005’’. 

11 (3) The subsection heading for section 168(k) 

12 of such Code is amended by striking ‘‘, AND BEFORE

13 JANUARY 1, 2005’’. 

14 SEC. 2. LONG-TERM CONTRACT ACCOUNTING. 

15 Section 168(k)(2) of the Internal Revenue Code of 

16 1986 is amended by adding after subparagraph (F), as 

17 redesignated by section 1, the following new subpara18 graph: 

19 ‘‘(F) LONG-TERM CONTRACT ACCOUNT20 ING.—The percentage of completion method 

21 under section 460 shall be applied as if this 

22 subsection had not been enacted.’’. 
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1 SEC. 3. ELECTION TO INCREASE MINIMUM TAX CREDIT 

2 LIMITATION IN LIEU OF BONUS DEPRECIA3 TION. 

4 (a) IN GENERAL.—Section 53 of the Internal Rev5 enue Code of 1986 (relating to credit for prior year min6 imum tax liability) is amended by adding at the end of 

7 the following new subsection: 

8 ‘‘(e) ADDITIONAL CREDIT IN LIEU OF BONUS DE9 PRECIATION.— 

10 ‘‘(1) IN GENERAL.—In the case of a corpora11 tion making an election under this subsection for a 

12 taxable year, the limitation under subsection (c) 

13 shall be increased by an amount equal to the bonus 

14 depreciation amount. 

15 ‘‘(2) BONUS DEPRECIATION AMOUNT.—For 

16 purposes of paragraph (1), the bonus depreciation 

17 amount for any taxable year is an amount equal to 

18 the product of— 

19 ‘‘(A) 35 percent, and 

20 ‘‘(B) the excess (if any) of— 

21 ‘‘(i) the aggregate amount of depre22 ciation which would be determined under 

23 section 168 for property placed in service 

24 during such taxable year if no election 

25 under this subsection were made, over 
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1 ‘‘(ii) the aggregate allowance for de2 preciation allowable with respect to such 

3 property placed in service for such taxable 

4 year. 

5 ‘‘(3) ELECTION.—Section 168(k) (other than 

6 paragraph (2)(E) thereof) shall not apply to any 

7 property placed in service during a taxable year by 

8 a corporation making an election under this sub9 section for such taxable year. An election under this 

10 subsection may only be revoked with the consent of 

11 the Secretary. 

12 ‘‘(4) CREDIT REFUNDABLE.—The aggregate in13 crease in the credit allowed by this section for any 

14 taxable year by reason of this subsection shall for 

15 purposes of this title (other than subsection (b)(2) 

16 of this section) be treated as a credit allowed to the 

17 taxpayer under subpart C.’’. 

18 (b) CONFORMING AMENDMENT.—Subsection (k) of 

19 section 168 of such Code is amended by adding at the 

20 end the following new paragraph: 

21 ‘‘(5) CROSS REFERENCE.—For an election to 

22 claim certain minimum tax credits in lieu of the al23 lowance determined under this subsection, see sec24 tion 53(e).’’. 
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1 SEC. 4. EFFECTIVE DATE. 

2 The amendments made by this Act shall apply to tax3 able years ending after December 31, 2004. 

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