I 

114TH CONGRESS 

1ST SESSION H. R. 2510 

To amend the Internal Revenue Code of 1986 to modify and make permanent 

bonus depreciation. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2015 

Mr. TIBERI (for himself, Mr. SMITH of Missouri, Mr. BUCHANAN, Mr. KELLY

of Pennsylvania, Mr. REED, Mr. NUNES, Mrs. BLACK, Mr. BRADY of 

Texas, Mr. REICHERT, Mr. MEEHAN, Mr. MARCHANT, Mr. YOUNG of Indiana, Mr. PAULSEN, Mr. RENACCI, Mrs. NOEM, Mr. DOLD, Mr. ROSKAM, Ms. JENKINS of Kansas, Mr. BOUSTANY, Mr. HOLDING, Ms. 

SINEMA, Mr. HUIZENGA of Michigan, Mr. WALBERG, and Mr. 

MOOLENAAR) introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on the 

Budget, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

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.— 


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1 (1) IN GENERAL.—Section 168(k)(2) of the In2 ternal Revenue Code of 1986 is amended to read as 

3 follows: 

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

5 this subsection— 

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

7 property’ means property— 

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

9 which has a recovery period of 20 years or 

10 less, 

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

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

13 a deduction is allowable under section 

14 167(a) without regard to this subsection, 

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

16 or 

17 ‘‘(IV) which is qualified improvement 

18 property, and 

19 ‘‘(ii) the original use of which com20 mences with the taxpayer. 

21 ‘‘(B) EXCEPTION FOR ALTERNATIVE DE22 PRECIATION PROPERTY.—The term ‘qualified 

23 property’ shall not include any property to 

24 which the alternative depreciation system under 

25 subsection (g) applies, determined— 


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

2 of subsection (g) (relating to election to 

3 have system apply), and 

4 ‘‘(ii) after application of section 

5 280F(b) (relating to listed property with 

6 limited business use). 

7 ‘‘(C) SPECIAL RULES.— 

8 ‘‘(i) SALE-LEASEBACKS.—For pur9 poses of clause (ii) and subparagraph 

10 (A)(ii), if property is— 

11 ‘‘(I) originally placed in service 

12 by a person, and 

13 ‘‘(II) sold and leased back by 

14 such person within 3 months after the 

15 date such property was originally 

16 placed in service, 

17 such property shall be treated as originally 

18 placed in service not earlier than the date 

19 on which such property is used under the 

20 leaseback referred to in subclause (II). 

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

22 subparagraph (A)(ii), if— 

23 ‘‘(I) property is originally placed 

24 in service by the lessor of such prop25 erty, 


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1 ‘‘(II) such property is sold by 

2 such lessor or any subsequent pur3 chaser within 3 months after the date 

4 such property was originally placed in 

5 service (or, in the case of multiple 

6 units of property subject to the same 

7 lease, within 3 months after the date 

8 the final unit is placed in service, so 

9 long as the period between the time 

10 the first unit is placed in service and 

11 the time the last unit is placed in 

12 service does not exceed 12 months), 

13 and 

14 ‘‘(III) the user of such property 

15 after the last sale during such 3- 

16 month period remains the same as 

17 when such property was originally 

18 placed in service, 

19 such property shall be treated as originally 

20 placed in service not earlier than the date 

21 of such last sale. 

22 ‘‘(D) COORDINATION WITH SECTION

23 280F.—For purposes of section 280F— 

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

25 passenger automobile (as defined in section 


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1 280F(d)(5)) which is qualified property, 

2 the Secretary shall increase the limitation 

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

4 ‘‘(ii) LISTED PROPERTY.—The deduc5 tion allowable under paragraph (1) shall be 

6 taken into account in computing any re7 capture amount under section 280F(b)(2). 

8 ‘‘(iii) INFLATION ADJUSTMENT.—In 

9 the case of any taxable year beginning in 

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

11 amount in clause (i) shall be increased by 

12 an amount equal to— 

13 ‘‘(I) such dollar amount, multi14 plied by 

15 ‘‘(II) the automobile price infla16 tion adjustment determined under sec17 tion 280F(d)(7)(B)(i) for the calendar 

18 year in which such taxable year begins 

19 by substituting ‘2014’ for ‘1987’ in 

20 subclause (II) thereof. 

21 If any increase under the preceding sen22 tence is not a multiple of $100, such in23 crease shall be rounded to the nearest mul24 tiple of $100. 


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1 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

2 MINIMUM TAX.—For purposes of determining 

3 alternative minimum taxable income under sec4 tion 55, the deduction under section 167 for 

5 qualified property shall be determined without 

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

7 (2) QUALIFIED IMPROVEMENT PROPERTY.— 

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

9 as follows: 

10 ‘‘(3) QUALIFIED IMPROVEMENT PROPERTY.— 

11 For purposes of this subsection— 

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

13 improvement property’ means any improvement 

14 to an interior portion of a building which is 

15 nonresidential real property if such improve16 ment is placed in service after the date such 

17 building was first placed in service. 

18 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN19 CLUDED.—Such term shall not include any im20 provement for which the expenditure is attrib21 utable to— 

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

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

24 ‘‘(iii) the internal structural frame25 work of the building.’’. 


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1 (b) EXPANSION OF ELECTION TO ACCELERATE AMT 

2 CREDITS IN LIEU OF BONUS DEPRECIATION.—Section 

3 168(k)(4) of such Code is amended to read as follows: 

4 ‘‘(4) ELECTION TO ACCELERATE AMT CREDITS

5 IN LIEU OF BONUS DEPRECIATION.— 

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

7 to have this paragraph apply for any taxable 

8 year— 

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

10 not apply to any qualified property placed 

11 in service during such taxable year, 

12 ‘‘(ii) the applicable depreciation meth13 od used under this section with respect to 

14 such property shall be the straight line 

15 method, and 

16 ‘‘(iii) the limitation imposed by section 

17 53(c) for such taxable year shall be in18 creased by the bonus depreciation amount 

19 which is determined for such taxable year 

20 under subparagraph (B). 

21 ‘‘(B) BONUS DEPRECIATION AMOUNT.— 

22 For purposes of this paragraph— 

23 ‘‘(i) IN GENERAL.—The bonus depre24 ciation amount for any taxable year is an 


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1 amount equal to 20 percent of the excess 

2 (if any) of— 

3 ‘‘(I) the aggregate amount of de4 preciation which would be allowed 

5 under this section for qualified prop6 erty placed in service by the taxpayer 

7 during such taxable year if paragraph 

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

9 in the case of any such property which 

10 is a passenger automobile (as defined 

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

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

13 over 

14 ‘‘(II) the aggregate amount of 

15 depreciation which would be allowed 

16 under this section for qualified prop17 erty placed in service by the taxpayer 

18 during such taxable year if para19 graphs (1) and (2)(D) did not apply 

20 to any such property. 

21 The aggregate amounts determined under 

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

23 without regard to any election made under 

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

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


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1 ‘‘(ii) LIMITATION.—The bonus depre2 ciation amount for any taxable year shall 

3 not exceed the lesser of— 

4 ‘‘(I) 50 percent of the minimum 

5 tax credit under section 53(b) for the 

6 first taxable year ending after Decem7 ber 31, 2014, or 

8 ‘‘(II) the minimum tax credit 

9 under section 53(b) for such taxable 

10 year determined by taking into ac11 count only the adjusted net minimum 

12 tax for taxable years ending before 

13 January 1, 2015 (determined by 

14 treating credits as allowed on a first15 in, first-out basis). 

16 ‘‘(iii) AGGREGATION RULE.—All cor17 porations which are treated as a single em18 ployer under section 52(a) shall be treat19 ed— 

20 ‘‘(I) as 1 taxpayer for purposes 

21 of this paragraph, and 

22 ‘‘(II) as having elected the appli23 cation of this paragraph if any such 

24 corporation so elects. 


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1 ‘‘(C) CREDIT REFUNDABLE.—For pur2 poses of section 6401(b), the aggregate increase 

3 in the credits allowable under part IV of sub4 chapter A for any taxable year resulting from 

5 the application of this paragraph shall be treat6 ed as allowed under subpart C of such part 

7 (and not any other subpart). 

8 ‘‘(D) OTHER RULES.— 

9 ‘‘(i) ELECTION.—Any election under 

10 this paragraph may be revoked only with 

11 the consent of the Secretary. 

12 ‘‘(ii) PARTNERSHIPS WITH ELECTING

13 PARTNERS.—In the case of a corporation 

14 which is a partner in a partnership and 

15 which makes an election under subpara16 graph (A) for the taxable year, for pur17 poses of determining such corporation’s 

18 distributive share of partnership items 

19 under section 702 for such taxable year— 

20 ‘‘(I) paragraphs (1) and (2)(D) 

21 shall not apply to any qualified prop22 erty placed in service during such tax23 able year, and 

24 ‘‘(II) the applicable depreciation 

25 method used under this section with 


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1 respect to such property shall be the 

2 straight line method. 

3 ‘‘(iii) CERTAIN PARTNERSHIPS.—In 

4 the case of a partnership in which more 

5 than 50 percent of the capital and profits 

6 interests are owned (directly or indirectly) 

7 at all times during the taxable year by 1 

8 corporation (or by corporations treated as 

9 1 taxpayer under subparagraph (B)(iii)), 

10 each partner shall compute its bonus de11 preciation amount under clause (i) of sub12 paragraph (B) by taking into account its 

13 distributive share of the amounts deter14 mined by the partnership under subclauses 

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

16 year of the partnership ending with or 

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

18 (c) SPECIAL RULES FOR CERTAIN PLANTS BEARING

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

20 amended— 

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

22 (2) by inserting after paragraph (4) the fol23 lowing new paragraph: 

24 ‘‘(5) SPECIAL RULES FOR CERTAIN PLANTS

25 BEARING FRUITS AND NUTS.— 


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

2 specified plant which is planted, or is grafted to 

3 a plant that has already been planted, by the 

4 taxpayer in the ordinary course of the tax5 payer’s farming business (as defined in section 

6 263A(e)(4)) during a taxable year for which the 

7 taxpayer has elected the application of this 

8 paragraph— 

9 ‘‘(i) a depreciation deduction equal to 

10 50 percent of the adjusted basis of such 

11 specified plant shall be allowed under sec12 tion 167(a) for the taxable year in which 

13 such specified plant is so planted or graft14 ed, and 

15 ‘‘(ii) the adjusted basis of such speci16 fied plant shall be reduced by the amount 

17 of such deduction. 

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

19 this paragraph, the term ‘specified plant’ 

20 means— 

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

22 fruits or nuts, and 

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

24 more than one yield of fruits or nuts and 

25 which generally has a period of more than 


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1 2 years from the time of planting or graft2 ing to the time at which such plant begins 

3 bearing fruits or nuts. 

4 Such term shall not include any property which 

5 is planted or grafted outside of the United 

6 States. 

7 ‘‘(C) ELECTION REVOCABLE ONLY WITH

8 CONSENT.—An election under this paragraph 

9 may be revoked only with the consent of the 

10 Secretary. 

11 ‘‘(D) ADDITIONAL DEPRECIATION MAY BE

12 CLAIMED ONLY ONCE.—If this paragraph ap13 plies to any specified plant, such specified plant 

14 shall not be treated as qualified property in the 

15 taxable year in which placed in service. 

16 ‘‘(E) DEDUCTION ALLOWED IN COMPUTING

17 MINIMUM TAX.—Rules similar to the rules of 

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

19 this paragraph.’’. 

20 (d) CONFORMING AMENDMENTS.— 

21 (1) Section 168(e)(6) of such Code is amend22 ed— 

23 (A) by redesignating subparagraphs (A) 

24 and (B) as subparagraphs (D) and (E), respec25 tively, 


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1 (B) by striking all that precedes subpara2 graph (D) (as so redesignated) and inserting 

3 the following: 

4 ‘‘(6) QUALIFIED LEASEHOLD IMPROVEMENT

5 PROPERTY.—For purposes of this subsection— 

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

7 leasehold improvement property’ means any im8 provement to an interior portion of a building 

9 which is nonresidential real property if— 

10 ‘‘(i) such improvement is made under 

11 or pursuant to a lease (as defined in sub12 section (h)(7))— 

13 ‘‘(I) by the lessee (or any subles14 see) of such portion, or 

15 ‘‘(II) by the lessor of such por16 tion, 

17 ‘‘(ii) such portion is to be occupied ex18 clusively by the lessee (or any sublessee) of 

19 such portion, and 

20 ‘‘(iii) such improvement is placed in 

21 service more than 3 years after the date 

22 the building was first placed in service. 

23 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN24 CLUDED.—Such term shall not include any imVerDate Sep 11 2014 03:56 May 28, 2015 Jkt 049200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2510.IH H2510

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1 provement for which the expenditure is attrib2 utable to— 

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

4 ‘‘(ii) any elevator or escalator, 

5 ‘‘(iii) any structural component bene6 fitting a common area, or 

7 ‘‘(iv) the internal structural frame8 work of the building. 

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

10 For purposes of this paragraph— 

11 ‘‘(i) COMMITMENT TO LEASE TREAT12 ED AS LEASE.—A commitment to enter 

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

14 the parties to such commitment shall be 

15 treated as lessor and lessee, respectively. 

16 ‘‘(ii) RELATED PERSONS.—A lease be17 tween related persons shall not be consid18 ered a lease. For purposes of the preceding 

19 sentence, the term ‘related persons’ 

20 means— 

21 ‘‘(I) members of an affiliated 

22 group (as defined in section 1504), 

23 and 

24 ‘‘(II) persons having a relation25 ship described in subsection (b) of 


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1 section 267; except that, for purposes 

2 of this clause, the phrase ‘80 percent 

3 or more’ shall be substituted for the 

4 phrase ‘more than 50 percent’ each 

5 place it appears in such subsection.’’, 

6 and 

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

8 subparagraph (E) (as so redesignated) and in9 serting ‘‘subparagraph (D)’’. 

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

11 amended by striking ‘‘qualified leasehold improve12 ment property’’ and inserting ‘‘qualified improve13 ment property’’. 

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

15 by striking subparagraph (D). 

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

17 adding at the end the following new paragraph: 

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

19 election under this paragraph with respect to any 

20 class of property for any taxable year, paragraphs 

21 (1) and (2)(D) shall not apply to any qualified prop22 erty in such class placed in service during such tax23 able year. An election under this paragraph may be 

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


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1 (5) Section 168(l)(3) of such Code is amend2 ed— 

3 (A) by striking ‘‘section 168(k)’’ in sub4 paragraph (A) and inserting ‘‘subsection (k)’’, 

5 and 

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

7 in subparagraph (B) and inserting ‘‘subsection 

8 (k)(2)(B)’’. 

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

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

11 and all that follows and inserting ‘‘subsection 

12 (k)(2)(C) shall apply.’’. 

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

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

15 ‘‘subsection (k)(2)(E)’’. 

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

17 by adding at the end the following new paragraph: 

18 ‘‘(7) COORDINATION WITH SECTION

19 168(k)(5).—This section shall not apply to any 

20 amount allowed as a deduction by reason of section 

21 168(k)(5) (relating to special rules for certain plants 

22 bearing fruits and nuts).’’. 

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

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


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

2 years or less.’’. 

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

4 by striking ‘‘ACQUIRED AFTER DECEMBER 31, 

5 2007, AND BEFORE JANUARY 1, 2014’’ in the head6 ing thereof. 

7 (e) EFFECTIVE DATES.— 

8 (1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the amendments made by 

10 this subsection shall apply to property placed in 

11 service after December 31, 2014, in taxable years 

12 ending after such date. 

13 (2) EXPANSION OF ELECTION TO ACCELERATE

14 AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 

15 (A) IN GENERAL.—The amendment made 

16 by subsection (b) shall apply to taxable years 

17 ending after December 31, 2014. 

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

19 any taxable year beginning before January 1, 

20 2015, and ending after December 31, 2014, the 

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

22 Internal Revenue Code of 1986 (as amended by 

23 this section) shall be the sum of— 

24 (i) the product of— 


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1 (I) the maximum increase 

2 amount (within the meaning of sec3 tion 168(k)(4)(C)(iii) of such Code, as 

4 in effect before the amendments made 

5 by this section), multiplied by 

6 (II) a fraction the numerator of 

7 which is the number of days in the 

8 taxable year before January 1, 2015, 

9 and the denominator of which is the 

10 number of days in the taxable year, 

11 plus 

12 (ii) the product of— 

13 (I) such limitation (determined 

14 without regard to this subparagraph), 

15 multiplied by 

16 (II) a fraction the numerator of 

17 which is the number of days in the 

18 taxable year after December 31, 2014, 

19 and the denominator of which is the 

20 number of days in the taxable year. 

21 (3) SPECIAL RULES FOR CERTAIN PLANTS

22 BEARING FRUITS AND NUTS.—The amendments 

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

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

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


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

2 grafted after December 31, 2014. 

3 SEC. 2. BUDGETARY EFFECTS. 

4 The budgetary effects of this Act shall not be entered 

5 on either PAYGO scorecard maintained pursuant to sec6 tion 4(d) of the Statutory Pay-As-You-Go Act of 2010. 

Æ 


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