I 

108TH CONGRESS 

2D SESSION H. R. 4128 

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, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 2, 2004 

Mr. WELLER (for himself, Mr. NEAL of Massachusetts, Mr. UPTON, Mr. 

TIAHRT, and Mr. ENGLISH) 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, 

and for other purposes. 

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), as 
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1 amended by section 201 of the Jobs and Growth Tax Re2 lief Reconciliation Act of 2003, is amended to read as fol3 lows: 

4 ‘‘(B) 50-PERCENT BONUS DEPRECIATION

5 PROPERTY.—For purposes of this subsection, 

6 the term ‘50-percent bonus depreciation prop7 erty’ means property described in paragraph 

8 (2)(A)(i)— 

9 ‘‘(i) the original use of which com10 mences with the taxpayer after May 5, 

11 2003, and 

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

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

14 binding contract for the acquisition was in 

15 effect before May 6, 2003.’’. 

16 (b) REPEAL OF TERMINATION DATES FOR 30-PER17 CENT BONUS DEPRECIATION PROPERTY.—Subparagraph 

18 (A) of section 168(k)(2) of such Code, as so amended, is 

19 amended by adding ‘‘and’’ at the end of clause (ii) and 

20 by striking clauses (iii) and (iv) and inserting the following 

21 new clause: 

22 ‘‘(iii) which is— 

23 ‘‘(I) acquired by the taxpayer 

24 after September 10, 2001, but only if 

25 no written binding contract for the ac-
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1 quisition was in effect before Sep2 tember 11, 2001, or 

3 ‘‘(II) acquired by the taxpayer 

4 pursuant to a written binding contract 

5 which was entered into after Sep6 tember 10, 2001.’’. 

7 (c) TECHNICAL AMENDMENTS.— 

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

9 Code is amended by striking subparagraph (B) and 

10 by redesignating the succeeding subparagraphs ac11 cordingly. 

12 (2) Clause (i) of section 168(k)(2)(C), as redes13 ignated by paragraph (1), is amended by striking 

14 ‘‘and before January 1, 2005’’. 

15 (3) The subsection heading for section 168(k) is 

16 amended by striking ‘‘, AND BEFORE JANUARY 1, 

17 2005’’. 

18 SEC. 2. LONG-TERM CONTRACT ACCOUNTING. 

19 (a) IN GENERAL.—Section 168(k)(2) of the Internal 

20 Revenue Code of 1986 is amended by adding after sub21 paragraph (E), as redesignated by section 1, the following 

22 new subparagraph: 

23 ‘‘(F) LONG-TERM CONTRACT ACCOUNT24 ING.—The percentage of completion method 
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1 under section 460 shall be applied as if this 

2 subsection had not been enacted.’’ 

3 SEC. 3. ELECTION TO INCREASE MINIMUM TAX CREDIT 

4 LIMITATION IN LIEU OF BONUS DEPRECIA5 TION. 

6 (a) IN GENERAL.—Section 53 of the Internal Rev7 enue Code of 1986 (relating to credit for prior year min8 imum tax liability) is amended by adding at the end of 

9 the following new subsection: 

10 ‘‘(e) ADDITIONAL CREDIT IN LIEU OF BONUS DE11 PRECIATION.— 

12 ‘‘(1) IN GENERAL.—In the case of a corpora13 tion making an election under this subsection for a 

14 taxable year, the limitation under subsection (c) 

15 shall be increased by an amount equal to the bonus 

16 depreciation amount. 

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

18 purposes of paragraph (1), the bonus depreciation 

19 amount for any taxable year is an amount equal to 

20 the product of— 

21 ‘‘(A) 35 percent, and 

22 ‘‘(B) the excess (if any) of— 

23 ‘‘(i) the aggregate amount of depre24 ciation which would be determined under 

25 section 168 for property placed in service 
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1 during such taxable year if no election 

2 under this subsection were made, over 

3 ‘‘(ii) the aggregate allowance for de4 preciation allowable with respect to such 

5 property placed in service for such taxable 

6 year. 

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

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

9 property placed in service during a taxable year by 

10 a corporation making an election under this sub11 section for such taxable year. An election under this 

12 subsection may only be revoked with the consent of 

13 the Secretary. 

14 ‘‘(4) CREDIT REFUNDABLE.—The aggregate in15 crease in the credit allowed by this section for any 

16 taxable year by reason of this subsection shall for 

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

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

19 taxpayer under subpart C.’’. 

20 (b) CONFORMING AMENDMENTS.—Subsection (k) of 

21 section 168 is amended by adding at the end the following 

22 new paragraph: 
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1 ‘‘(5) CROSS REFERENCE.— 

‘‘For an election to claim certain minimum tax 

credits in lieu of the allowance determined under 

this subsection, see section 53(e).’’. 

2 SEC. 4. EFFECTIVE DATE. 

3 The amendments made by this Act shall apply to tax4 able years ending after May 5, 2003. 

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