II 

113TH CONGRESS 

2D SESSION S. 2681 

To amend the Internal Revenue Code of 1986 to provide incentives for 

businesses to keep jobs in the United States. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2014 

Mr. PRYOR (for himself and Mr. WALSH) 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 provide 

incentives for businesses to keep jobs in the United States. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Keeping Jobs in Amer5 ica Act’’. 

6 SEC. 2. INBOUND INVESTMENT PROGRAM TO RECRUIT 

7 JOBS TO THE UNITED STATES. 

8 (a) DEFINITIONS.—In this section: 

9 (1) DISTRESSED.—The term ‘‘distressed’’, with 

10 respect to an area, means an area in the United 


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1 States that, on the date on which the program is es2 tablished under subsection (b)— 

3 (A) is included in the most recent classi4 fication of labor surplus areas by the Secretary 

5 of Labor; and 

6 (B) has an unemployment rate equal to or 

7 greater than 110 percent of the unemployment 

8 rate of the United States. 

9 (2) ELIGIBLE ENTITY.—The term ‘‘eligible enti10 ty’’ means an entity that employs not fewer than 50 

11 full-time equivalent employees in high-value jobs. 

12 (3) ELIGIBLE FACILITY.—The term ‘‘eligible fa13 cility’’ means a facility at which— 

14 (A) an eligible entity employs not fewer 

15 than 50 full-time equivalent employees in high16 value jobs; 

17 (B) with respect to a rural or distressed 

18 area, the mean of the wages provided by the eli19 gible entity to individuals employed at such fa20 cility is greater than the mean wage for the 

21 county in which the rural or distressed area is 

22 located; and 

23 (C) derives at least the majority of its rev24 enues from— 

25 (i) goods production; or 


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1 (ii) providing product design, engi2 neering, marketing, or information tech3 nology services. 

4 (4) HIGH-VALUE JOB DEFINED.—The term 

5 ‘‘high-value job’’ means a job that— 

6 (A) exists within an eligible facility; and 

7 (B) has a North American Industrial Clas8 sification that corresponds with manufacturing, 

9 software publishers, computer systems design, 

10 or related codes, and is higher than the mean 

11 hourly wage in the country. 

12 (5) RURAL.—The term ‘‘rural’’, with respect to 

13 an area, means any area in the United States which, 

14 as confirmed by the latest decennial census, is not 

15 located within— 

16 (A) a city or town that has a population of 

17 greater than 50,000 inhabitants; or 

18 (B) an urbanized area contiguous and ad19 jacent to a city or town described in subpara20 graph (A). 

21 (b) PROGRAM REQUIRED.—Not later than 180 days 

22 after the date of the enactment of this Act, the Secretary 

23 of Commerce shall establish a program to award grants 

24 to States that are recruiting high-value jobs. Grants 

25 awarded under this section may be used to issue forgivable 


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1 loans to eligible entities that are deciding whether to locate 

2 eligible facilities in the United States to assist such enti3 ties in locating such facilities in rural or distressed areas. 

4 (c) FEDERAL GRANTS TO STATES.— 

5 (1) IN GENERAL.—The Secretary shall carry 

6 out the program through the award of grants to 

7 States to provide loans and loan guarantees de8 scribed in subsection (d). 

9 (2) APPLICATION.— 

10 (A) IN GENERAL.—A State seeking a 

11 grant under the program shall submit an appli12 cation to the Secretary in such manner and 

13 containing such information as the Secretary 

14 may require. Once the program is operational, 

15 any State may apply for a grant on an ongoing 

16 basis, until funds are exhausted. The Secretary 

17 may also establish a process for pre-clearing ap18 plications from States. The Secretary shall no19 tify all States of this grant opportunity once the 

20 program is operational. All information about 

21 the program and the State application process 

22 must be online and must be in a format that 

23 is easily understood and is widely accessible. 


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1 (B) ELEMENTS.—Each application sub2 mitted by a State under subparagraph (A) shall 

3 include— 

4 (i) a description of the eligible entity 

5 the State proposes to assist in locating an 

6 eligible facility in a rural or distressed area 

7 of the State; 

8 (ii) a description of such facility, in9 cluding the number of high-value jobs re10 lating to such facility; 

11 (iii) a description of such rural or dis12 tressed area; 

13 (iv) a description of the resources of 

14 the State that the State has committed to 

15 assisting such corporation in locating such 

16 facility, including tax incentives provided, 

17 bonding authority exercised, and land 

18 granted; and 

19 (v) such other elements as the Sec20 retary considers appropriate. 

21 (C) NOTICE.—As soon as practicable after 

22 establishing the program under subsection (b), 

23 the Secretary shall notify all States of the 

24 grants available under the program and the 

25 process for applying for such grants. 


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1 (D) ONLINE SUBMISSION OF APPLICA2 TIONS.—The Secretary shall establish a mecha3 nism for the electronic submission of applica4 tions under subparagraph (A). Such mechanism 

5 shall utilize an Internet website and all infor6 mation on such website shall be in a format 

7 that is easily understood and widely accessible. 

8 (E) CONFIDENTIALITY.—The Secretary 

9 may not make public any information submitted 

10 by a State to the Secretary under this para11 graph regarding the efforts of such State to as12 sist an eligible entity in locating an eligible fa13 cility in such State without the express consent 

14 of the State. 

15 (3) SELECTION.—The Secretary shall award 

16 grants under the program on a competitive basis to 

17 States that— 

18 (A) the Secretary determines are most 

19 likely to succeed with a grant under the pro20 gram in assisting an eligible entity in locating 

21 an eligible facility in a rural or distressed area; 

22 (B) if successful in assisting an eligible en23 tity as described in subparagraph (A), will cre24 ate the greatest number of high-value jobs in 

25 rural or distressed areas; 


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1 (C) have committed significant resources, 

2 to the extent of their ability as determined by 

3 the Secretary, to assisting eligible entities in lo4 cating eligible facilities in a rural or distressed 

5 areas; or 

6 (D) meet such other criteria as the Sec7 retary considers appropriate, including criteria 

8 relating to marketing plans, benefits to ongoing 

9 regional or State strategies for economic devel10 opment, and job growth. 

11 (4) LIMITATION ON COMPETITION BETWEEN

12 STATES.—The Secretary may not award a grant to 

13 a State under the program to assist an eligible enti14 ty— 

15 (A) in locating an eligible facility in such 

16 State if another State is already seeking to as17 sist such eligible entity in locating such eligible 

18 facility in such other State; or 

19 (B) from relocating an eligible facility from 

20 one State to another State. 

21 (5) AVAILABILITY OF GRANT AMOUNTS.—For 

22 each grant awarded to a State under the program, 

23 the Secretary shall make available to such State the 

24 amount of such grant not later than 30 days after 

25 the date on which the Secretary awarded the grant. 


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1 The total amount of grants awarded under this pro2 gram may not exceed $100,000,000. 

3 (d) LOANS AND LOAN GUARANTEES FROM STATES

4 TO CORPORATIONS.— 

5 (1) IN GENERAL.—Amounts received by a State 

6 under the program shall be used to provide assist7 ance to an eligible entity to locate an eligible facility 

8 in a rural or distressed area of the State. 

9 (2) LOANS AND LOAN GUARANTEES.—A State 

10 receiving a grant under the program may provide as11 sistance under paragraph (1) in the form of— 

12 (A) a single loan to a single eligible entity 

13 as described in paragraph (1) to cover the costs 

14 incurred by the eligible entity in locating the el15 igible facility as described in such paragraph; or 

16 (B) a single loan guarantee to a financial 

17 institution making a single loan to a single eli18 gible entity as described in paragraph (1) to 

19 cover the costs incurred by the eligible entity in 

20 locating the eligible facility as described in such 

21 paragraph. 

22 (3) TERMS AND CONDITIONS.—Each loan or 

23 loan guarantee provided under paragraph (2) shall 

24 have a term of 5 years and shall bear interest at 

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1 tion 1274(d)(1)(C) of the Internal Revenue Code of 

2 1986. 

3 (4) AMOUNT.—The amount of a loan or loan 

4 guarantee issued to an eligible entity under the pro5 gram for the location of an eligible facility shall be 

6 an amount equal to not more than $5,000 per full7 time equivalent employee to be employed at such fa8 cility. 

9 (5) REPAYMENT.—Repayment of a loan issued 

10 by a State to an eligible entity under the program 

11 shall be repaid in accordance with such schedule as 

12 the State shall establish in accordance with such 

13 rules as the Secretary shall prescribe for purposes of 

14 the program. Such rules shall provide for the fol15 lowing: 

16 (A) Forgiveness of all or a portion of the 

17 loan, the amount of such forgiveness depending 

18 upon the following: 

19 (i) The performance of the borrower. 

20 (ii) The number or quality of the jobs 

21 at the facility located under the program. 

22 (B) Repayment of principal or interest, if 

23 any, at the end of the term of the loan. 

24 (e) ASSESSMENT AND RECOMMENDATIONS.— 


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1 (1) ONGOING ASSESSMENT.—The Secretary 

2 shall conduct an ongoing assessment of the program. 

3 (2) RECOMMENDATIONS.—The Secretary may 

4 submit to Congress recommendations for such legis5 lative action as the Secretary considers appropriate 

6 to improve the program, including with respect to 

7 any findings of the Secretary derived by comparing 

8 the program established under subsection (b) with 

9 the programs and policies of governments of other 

10 countries used to recruit high-value jobs. 

11 SEC. 3. CREDIT FOR INSOURCING EXPENSES. 

12 (a) IN GENERAL.—Subpart D of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of 

14 1986 is amended by adding at the end the following new 

15 section: 

16 ‘‘SEC. 45S. CREDIT FOR INSOURCING EXPENSES. 

17 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

18 insourcing expenses credit for any taxable year is an 

19 amount equal to 20 percent of the eligible insourcing ex20 penses of the taxpayer which are taken into account in 

21 such taxable year under subsection (d). 

22 ‘‘(b) ELIGIBLE INSOURCING EXPENSES.—For pur23 poses of this section— 

24 ‘‘(1) IN GENERAL.—The term ‘eligible 

25 insourcing expenses’ means— 


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1 ‘‘(A) eligible expenses paid or incurred by 

2 the taxpayer in connection with the elimination 

3 of any business unit of the taxpayer (or of any 

4 member of any expanded affiliated group in 

5 which the taxpayer is also a member) located 

6 outside the United States, and 

7 ‘‘(B) eligible expenses paid or incurred by 

8 the taxpayer in connection with the establish9 ment of any business unit of the taxpayer (or 

10 of any member of any expanded affiliated group 

11 in which the taxpayer is also a member) located 

12 within the United States, 

13 if such establishment constitutes the relocation of 

14 the business unit so eliminated. For purposes of the 

15 preceding sentence, a relocation shall not be treated 

16 as failing to occur merely because such elimination 

17 occurs in a different taxable year than such estab18 lishment. 

19 ‘‘(2) ELIGIBLE EXPENSES.—The term ‘eligible 

20 expenses’ means— 

21 ‘‘(A) any amount for which a deduction is 

22 allowed to the taxpayer under section 162, and 

23 ‘‘(B) permit and license fees, lease broker24 age fees, equipment installation costs, and, to 


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1 the extent provided by the Secretary, other 

2 similar expenses. 

3 Such term does not include any compensation which 

4 is paid or incurred in connection with severance 

5 from employment and, to the extent provided by the 

6 Secretary, any similar amount. 

7 ‘‘(3) BUSINESS UNIT.—The term ‘business unit’ 

8 means— 

9 ‘‘(A) any trade or business, and 

10 ‘‘(B) any line of business, or functional 

11 unit, which is part of any trade or business. 

12 ‘‘(4) EXPANDED AFFILIATED GROUP.—The 

13 term ‘expanded affiliated group’ means an affiliated 

14 group as defined in section 1504(a), determined 

15 without regard to section 1504(b)(3) and by sub16 stituting ‘more than 50 percent’ for ‘at least 80 per17 cent’ each place it appears in section 1504(a). A 

18 partnership or any other entity (other than a cor19 poration) shall be treated as a member of an ex20 panded affiliated group if such entity is controlled 

21 (within the meaning of section 954(d)(3)) by mem22 bers of such group (including any entity treated as 

23 a member of such group by reason of this para24 graph). 


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1 ‘‘(5) EXPENSES MUST BE PURSUANT TO

2 INSOURCING PLAN.—Amounts shall be taken into ac3 count under paragraph (1) only to the extent that 

4 such amounts are paid or incurred pursuant to a 

5 written plan to carry out the relocation described in 

6 paragraph (1). 

7 ‘‘(6) OPERATING EXPENSES NOT TAKEN INTO

8 ACCOUNT.—Any amount paid or incurred in connec9 tion with the on-going operation of a business unit 

10 shall not be treated as an amount paid or incurred 

11 in connection with the establishment or elimination 

12 of such business unit. 

13 ‘‘(c) INCREASED DOMESTIC EMPLOYMENT REQUIRE14 MENT.—No credit shall be allowed under this section un15 less the number of full-time equivalent employees of the 

16 taxpayer for the taxable year for which the credit is 

17 claimed exceeds the number of full-time equivalent em18 ployees of the taxpayer for the last taxable year ending 

19 before the first taxable year in which such eligible 

20 insourcing expenses were paid or incurred. For purposes 

21 of this subsection, full-time equivalent employees has the 

22 meaning given such term under section 45R(d) (and the 

23 applicable rules of section 45R(e)). All employers treated 

24 as a single employer under subsection (b), (c), (m), or (o) 


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1 of section 414 shall be treated as a single employer for 

2 purposes of this subsection. 

3 ‘‘(d) CREDIT ALLOWED UPON COMPLETION OF

4 INSOURCING PLAN.— 

5 ‘‘(1) IN GENERAL.—Except as provided in para6 graph (2), eligible insourcing expenses shall be taken 

7 into account under subsection (a) in the taxable year 

8 during which the plan described in subsection (b)(5) 

9 has been completed and all eligible insourcing ex10 penses pursuant to such plan have been paid or in11 curred. 

12 ‘‘(2) ELECTION TO APPLY EMPLOYMENT TEST

13 AND CLAIM CREDIT IN FIRST FULL TAXABLE YEAR

14 AFTER COMPLETION OF PLAN.—If the taxpayer 

15 elects the application of this paragraph, eligible 

16 insourcing expenses shall be taken into account 

17 under subsection (a) in the first taxable year after 

18 the taxable year described in paragraph (1). 

19 ‘‘(e) POSSESSIONS TREATED AS PART OF THE

20 UNITED STATES.—For purposes of this section, the term 

21 ‘United States’ shall be treated as including each posses22 sion of the United States (including the Commonwealth 

23 of Puerto Rico and the Commonwealth of the Northern 

24 Mariana Islands). 


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1 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

2 such regulations or other guidance as may be necessary 

3 or appropriate to carry out the purposes of this section.’’. 

4 (b) CREDIT TO BE PART OF GENERAL BUSINESS

5 CREDIT.—Subsection (b) of section 38 of such Code is 

6 amended by striking ‘‘plus’’ at the end of paragraph (35), 

7 by striking the period at the end of paragraph (36) and 

8 inserting ‘‘, plus’’, and by adding at the end the following 

9 new paragraph: 

10 ‘‘(37) the insourcing expenses credit determined 

11 under section 45S(a).’’. 

12 (c) CLERICAL AMENDMENT.—The table of sections 

13 for subpart D of part IV of subchapter A of chapter 1 

14 of such Code is amended by adding at the end the fol15 lowing new item: 

‘‘Sec. 45S. Credit for insourcing expenses.’’. 

16 (d) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to amounts paid or incurred after 

18 the date of the enactment of this Act. 

19 (e) APPLICATION TO UNITED STATES POSSES20 SIONS.— 

21 (1) PAYMENTS TO POSSESSIONS.— 

22 (A) MIRROR CODE POSSESSIONS.—The 

23 Secretary of the Treasury shall make periodic 

24 payments to each possession of the United 

25 States with a mirror code tax system in an 


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1 amount equal to the loss to that possession by 

2 reason of section 45S of the Internal Revenue 

3 Code of 1986. Such amount shall be determined 

4 by the Secretary of the Treasury based on in5 formation provided by the government of the re6 spective possession. 

7 (B) OTHER POSSESSIONS.—The Secretary 

8 of the Treasury shall make annual payments to 

9 each possession of the United States which does 

10 not have a mirror code tax system in an 

11 amount estimated by the Secretary of the 

12 Treasury as being equal to the aggregate bene13 fits that would have been provided to residents 

14 of such possession by reason of section 45S of 

15 such Code if a mirror code tax system had been 

16 in effect in such possession. The preceding sen17 tence shall not apply with respect to any posses18 sion of the United States unless such possession 

19 has a plan, which has been approved by the 

20 Secretary of the Treasury, under which such 

21 possession will promptly distribute such pay22 ment to the residents of such possession. 

23 (2) COORDINATION WITH CREDIT ALLOWED

24 AGAINST UNITED STATES INCOME TAXES.—No cred25 it shall be allowed against United States income 


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1 taxes under section 45S of such Code to any per2 son— 

3 (A) to whom a credit is allowed against 

4 taxes imposed by the possession by reason of 

5 such section, or 

6 (B) who is eligible for a payment under a 

7 plan described in paragraph (1)(B). 

8 (3) DEFINITIONS AND SPECIAL RULES.— 

9 (A) POSSESSIONS OF THE UNITED

10 STATES.—For purposes of this section, the 

11 term ‘‘possession of the United States’’ includes 

12 the Commonwealth of Puerto Rico and the 

13 Commonwealth of the Northern Mariana Is14 lands. 

15 (B) MIRROR CODE TAX SYSTEM.—For pur16 poses of this section, the term ‘‘mirror code tax 

17 system’’ means, with respect to any possession 

18 of the United States, the income tax system of 

19 such possession if the income tax liability of the 

20 residents of such possession under such system 

21 is determined by reference to the income tax 

22 laws of the United States as if such possession 

23 were the United States. 

24 (C) TREATMENT OF PAYMENTS.—For pur25 poses of section 1324(b)(2) of title 31, United 


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1 States Code, the payments under this section 

2 shall be treated in the same manner as a refund 

3 due from sections referred to in such section 

4 1324(b)(2). 

5 SEC. 4. DENIAL OF DEDUCTION FOR OUTSOURCING EX6 PENSES. 

7 (a) IN GENERAL.—Part IX of subchapter B of chap8 ter 1 of the Internal Revenue Code of 1986 is amended 

9 by adding at the end the following new section: 

10 ‘‘SEC. 280I. OUTSOURCING EXPENSES. 

11 ‘‘(a) IN GENERAL.—No deduction otherwise allow12 able under this chapter shall be allowed for any specified 

13 outsourcing expense. 

14 ‘‘(b) SPECIFIED OUTSOURCING EXPENSE.—For pur15 poses of this section— 

16 ‘‘(1) IN GENERAL.—The term ‘specified out17 sourcing expense’ means— 

18 ‘‘(A) any eligible expense paid or incurred 

19 by the taxpayer in connection with the elimi20 nation of any business unit of the taxpayer (or 

21 of any member of any expanded affiliated group 

22 in which the taxpayer is also a member) located 

23 within the United States, and 

24 ‘‘(B) any eligible expense paid or incurred 

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1 lishment of any business unit of the taxpayer 

2 (or of any member of any expanded affiliated 

3 group in which the taxpayer is also a member) 

4 located outside the United States, 

5 if such establishment constitutes the relocation of 

6 the business unit so eliminated. For purposes of the 

7 preceding sentence, a relocation shall not be treated 

8 as failing to occur merely because such elimination 

9 occurs in a different taxable year than such estab10 lishment. 

11 ‘‘(2) APPLICATION OF CERTAIN DEFINITIONS

12 AND RULES.— 

13 ‘‘(A) DEFINITIONS.—For purposes of this 

14 section, the terms ‘eligible expenses’, ‘business 

15 unit’, and ‘expanded affiliated group’ shall have 

16 the respective meanings given such terms by 

17 section 45S(b). 

18 ‘‘(B) OPERATING EXPENSES NOT TAKEN

19 INTO ACCOUNT.—A rule similar to the rule of 

20 section 45S(b)(6) shall apply for purposes of 

21 this section. 

22 ‘‘(c) SPECIAL RULES.— 

23 ‘‘(1) APPLICATION TO DEDUCTIONS FOR DE24 PRECIATION AND AMORTIZATION.—In the case of 

25 any portion of a specified outsourcing expense which 


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1 is not deductible in the taxable year in which paid 

2 or incurred, such portion shall neither be chargeable 

3 to capital account nor amortizable. 

4 ‘‘(2) POSSESSIONS TREATED AS PART OF THE

5 UNITED STATES.—For purposes of this section, the 

6 term ‘United States’ shall be treated as including 

7 each possession of the United States (including the 

8 Commonwealth of Puerto Rico and the Common9 wealth of the Northern Mariana Islands). 

10 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

11 such regulations or other guidance as may be necessary 

12 or appropriate to carry out the purposes of this section, 

13 including regulations which provide (or create a rebuttable 

14 presumption) that certain establishments of business units 

15 outside the United States will be treated as relocations 

16 (based on timing or such other factors as the Secretary 

17 may provide) of business units eliminated within the 

18 United States.’’. 

19 (b) LIMITATION ON SUBPART F INCOME OF CON20 TROLLED FOREIGN CORPORATIONS DETERMINED WITH21 OUT REGARD TO SPECIFIED OUTSOURCING EXPENSES.— 

22 Subsection (c) of section 952 of such Code is amended 

23 by adding at the end the following new paragraph: 

24 ‘‘(4) EARNINGS AND PROFITS DETERMINED

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1 PENSES.—For purposes of this subsection, earnings 

2 and profits of any controlled foreign corporation 

3 shall be determined without regard to any specified 

4 outsourcing expense (as defined in section 

5 280I(b)).’’. 

6 (c) CLERICAL AMENDMENT.—The table of sections 

7 for part IX of subchapter B of chapter 1 of such Code 

8 is amended by adding at the end the following new item: 

‘‘Sec. 280I. Outsourcing expenses.’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to amounts paid or incurred after 

11 the date of the enactment of this Act. 

12 SEC. 5. EXTENSION OF BONUS DEPRECIATION. 

13 (a) IN GENERAL.—Paragraph (2) of section 168(k) 

14 of the Internal Revenue Code of 1986 is amended— 

15 (1) by striking ‘‘January 1, 2015’’ in subpara16 graph (A)(iv) and inserting ‘‘January 1, 2019’’, and 

17 (2) by striking ‘‘January 1, 2014’’ each place 

18 it appears and inserting ‘‘January 1, 2018’’. 

19 (b) SPECIAL RULE FOR FEDERAL LONG-TERM CON20 TRACTS.—Clause (ii) of section 460(c)(6)(B) of such Code 

21 is amended by striking ‘‘January 1, 2014 (January 1, 

22 2015’’ and inserting ‘‘January 1, 2018 (January 1, 

23 2019’’. 

24 (c) EXTENSION OF ELECTION TO ACCELERATE THE

25 AMT CREDIT IN LIEU OF BONUS DEPRECIATION.— 


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1 (1) IN GENERAL.—Subclause (II) of section 

2 168(k)(4)(D)(iii) of such Code is amended by strik3 ing ‘‘2014’’ and inserting ‘‘2018’’. 

4 (2) ROUND 4 EXTENSION PROPERTY.—Para5 graph (4) of section 168(k) of such Code is amended 

6 by adding at the end the following new subpara7 graph: 

8 ‘‘(K) SPECIAL RULES FOR ROUND 4 EX9 TENSION PROPERTY.— 

10 ‘‘(i) IN GENERAL.—In the case of 

11 round 4 extension property, in applying 

12 this paragraph to any taxpayer— 

13 ‘‘(I) the limitation described in 

14 subparagraph (B)(i) and the business 

15 credit increase amount under sub16 paragraph (E)(iii) thereof shall not 

17 apply, and 

18 ‘‘(II) the bonus depreciation 

19 amount, maximum amount, and max20 imum increase amount shall be com21 puted separately from amounts com22 puted with respect to eligible qualified 

23 property which is not round 4 exten24 sion property. 

25 ‘‘(ii) ELECTION.— 


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1 ‘‘(I) A taxpayer who has an elec2 tion in effect under this paragraph for 

3 round 3 extension property shall be 

4 treated as having an election in effect 

5 for round 4 extension property unless 

6 the taxpayer elects to not have this 

7 paragraph apply to round 4 extension 

8 property. 

9 ‘‘(II) A taxpayer who does not 

10 have an election in effect under this 

11 paragraph for round 3 extension prop12 erty may elect to have this paragraph 

13 apply to round 4 extension property. 

14 ‘‘(iii) ROUND 4 EXTENSION PROP15 ERTY.—For purposes of this subpara16 graph, the term ‘round 4 extension prop17 erty’ means property which is eligible 

18 qualified property solely by reason of the 

19 extension of the application of the special 

20 allowance under paragraph (1) pursuant to 

21 the amendments made by section 5(a) of 

22 the Keeping Jobs in America Act (and the 

23 application of such extension to this para24 graph pursuant to the amendment made 

25 by section 5(c) of such Act).’’. 


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1 (d) CONFORMING AMENDMENTS.— 

2 (1) The heading for subsection (k) of section 

3 168 of such Code is amended by striking ‘‘JANUARY

4 1, 2014’’ and inserting ‘‘JANUARY 1, 2018’’. 

5 (2) The heading for clause (ii) of section 

6 168(k)(2)(B) of such Code is amended by striking 

7 ‘‘PRE-JANUARY 1, 2014’’ and inserting ‘‘PRE-JANU8 ARY 1, 2018’’. 

9 (3) Subparagraph (C) of section 168(n)(2) of 

10 such Code is amended by striking ‘‘January 1, 

11 2014’’ and inserting ‘‘January 1, 2018’’. 

12 (4) Subparagraph (D) of section 1400L(b)(2) 

13 of such Code is amended by striking ‘‘January 1, 

14 2014’’ and inserting ‘‘January 1, 2018’’. 

15 (5) Subparagraph (B) of section 1400N(d)(3) 

16 of such Code is amended by striking ‘‘January 1, 

17 2014’’ and inserting ‘‘January 1, 2018’’. 

18 (e) TECHNICAL AMENDMENT RELATING TO SECTION

19 331 OF THE AMERICAN TAXPAYER RELIEF ACT OF

20 2012.— 

21 (1) IN GENERAL.—Clause (iii) of section 

22 168(k)(4)(J) of such Code is amended by striking 

23 ‘‘any taxable year’’ and inserting ‘‘its first taxable 

24 year’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall take effect as if included in 

3 the provision of the American Taxpayer Relief Act 

4 of 2012 to which it relates. 

5 (f) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to property placed in service after 

7 December 31, 2013, in taxable years ending after such 

8 date. 

9 SEC. 6. INCREASED EXPENSING LIMITATIONS AND TREAT10 MENT OF CERTAIN REAL PROPERTY AS SEC11 TION 179 PROPERTY. 

12 (a) IN GENERAL.— 

13 (1) DOLLAR LIMITATION.—Paragraph (1) of 

14 section 179(b) of the Internal Revenue Code of 1986 

15 is amended by striking ‘‘shall not exceed—’’ and all 

16 that follows and inserting ‘‘shall not exceed 

17 $500,000.’’. 

18 (2) REDUCTION IN LIMITATION.—Paragraph 

19 (2) of section 179(b) of such Code is amended by 

20 striking ‘‘exceeds—’’ and all that follows and insert21 ing ‘‘exceeds $2,000,000.’’. 

22 (b) COMPUTER SOFTWARE.—Clause (ii) of section 

23 179(d)(1)(A) of such Code is amended by striking ‘‘, to 

24 which section 167 applies, and which is placed in service 


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1 in a taxable year beginning after 2002 and before 2014’’ 

2 and inserting ‘‘and to which section 167 applies’’. 

3 (c) ELECTION.—Paragraph (2) of section 179(c) of 

4 such Code is amended— 

5 (1) by striking ‘‘may not be revoked’’ and all 

6 that follows through ‘‘and before 2014’’, and 

7 (2) by striking ‘‘IRREVOCABLE’’ in the heading 

8 thereof. 

9 (d) AIR CONDITIONING AND HEATING UNITS.— 

10 Paragraph (1) of section 179(d) of such Code is amended 

11 by striking ‘‘and shall not include air conditioning or heat12 ing units’’. 

13 (e) QUALIFIED REAL PROPERTY.—Subsection (f) of 

14 section 179 of such Code is amended— 

15 (1) by striking ‘‘beginning in 2010, 2011, 2012, 

16 or 2013’’ in paragraph (1), and 

17 (2) by striking paragraphs (3) and (4). 

18 (f) INFLATION ADJUSTMENT.—Subsection (b) of sec19 tion 179 of such Code is amended by adding at the end 

20 the following new paragraph: 

21 ‘‘(6) INFLATION ADJUSTMENT.— 

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

23 taxable year beginning after 2014, the dollar 

24 amounts in paragraphs (1) and (2) shall each 

25 be increased by an amount equal to— 


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1 ‘‘(i) such dollar amount, multiplied by 

2 ‘‘(ii) the cost-of-living adjustment de3 termined under section 1(c)(2)(A) for such 

4 calendar year, determined by substituting 

5 calendar year 2013 for calendar year 2012 

6 in clause (ii) thereof. 

7 ‘‘(B) ROUNDING.—The amount of any in8 crease under subparagraph (A) shall be round9 ed to the nearest multiple of $10,000.’’. 

10 (g) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to taxable years beginning after 

12 December 31, 2013. 

13 SEC. 7. PERMANENT EXTENSION OF NEW MARKETS TAX 

14 CREDIT. 

15 (a) EXTENSION.— 

16 (1) IN GENERAL.—Subparagraph (G) of section 

17 45D(f)(1) of the Internal Revenue Code of 1986 is 

18 amended by striking ‘‘, 2011, 2012, and 2013’’ and 

19 inserting ‘‘and each calendar year thereafter’’. 

20 (2) CONFORMING AMENDMENT.—Section 

21 45D(f)(3) of such Code is amended by striking the 

22 last sentence. 

23 (b) INFLATION ADJUSTMENT.—Subsection (f) of sec24 tion 45D of the Internal Revenue Code of 1986 is amend25 ed by adding at the end the following new paragraph: 


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1 ‘‘(4) INFLATION ADJUSTMENT.— 

2 ‘‘(A) IN GENERAL.—In the case of any cal3 endar year beginning after 2013, the dollar 

4 amount in paragraph (1)(G) shall be increased 

5 by an amount equal to— 

6 ‘‘(i) such dollar amount, multiplied by 

7 ‘‘(ii) the cost-of-living adjustment de8 termined under section 1(f)(3) for the cal9 endar year, determined by substituting 

10 ‘calendar year 2000’ for ‘calendar year 

11 1992’ in subparagraph (B) thereof. 

12 ‘‘(B) ROUNDING RULE.—Any increase 

13 under subparagraph (A) which is not a multiple 

14 of $1,000,000 shall be rounded to the nearest 

15 multiple of $1,000,000.’’. 

16 (c) ALTERNATIVE MINIMUM TAX RELIEF.—Subpara17 graph (B) of section 38(c)(4) of the Internal Revenue 

18 Code of 1986 is amended— 

19 (1) by redesignating clauses (v) through (ix) as 

20 clauses (vi) through (x), respectively, and 

21 (2) by inserting after clause (iv) the following 

22 new clause: 

23 ‘‘(v) the credit determined under sec24 tion 45D, but only with respect to credits 

25 determined with respect to qualified equity 


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1 investments (as defined in section 45D(b)) 

2 initially made before January 1, 2014,’’. 

3 (d) EFFECTIVE DATES.— 

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section 

6 shall take effect on the date of the enactment of this 

7 Act. 

8 (2) ALTERNATIVE MINIMUM TAX RELIEF.—The 

9 amendments made by subsection (c) shall apply to 

10 credits determined with respect to qualified equity 

11 investments (as defined in section 45D(b) of the In12 ternal Revenue Code of 1986) initially made after 

13 the date of the enactment of this Act. 

Æ 


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