108TH CONGRESS
1ST SESSION
H. R. 2
AN ACT
To provide for reconciliation pursuant to section
201 of the concurrent resolution on the budget
for fiscal year 2004.
108TH CONGRESS
1ST SESSION
H. R. 2
AN ACT
To provide for reconciliation pursuant to section 201 of
the concurrent resolution on the budget for fiscal year 2004.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CON-
TENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Jobs and Growth Reconciliation Tax Act of 2003’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
(c) TABLE OF CONTENTS.—The table of contents of
this Act is as follows:
Sec. 1. Short title; references; table of contents.
TITLE I—ACCELERATION OF CERTAIN PREVIOUSLY ENACTED
TAX REDUCTIONS
Sec. 101. Acceleration of increase in child tax credit.
Sec. 102. Acceleration of 15-percent individual income tax rate bracket expan-
sion for married taxpayers filing joint returns.
Sec. 103. Acceleration of increase in standard deduction for married taxpayers
filing joint returns.
Sec. 104. Acceleration of 10-percent individual income tax rate bracket expan-
sion.
Sec. 105. Acceleration of reduction in individual income tax rates.
Sec. 106. Minimum tax relief to individuals.
TITLE II—GROWTH INCENTIVES FOR BUSINESS
Sec. 201. Increase and extension of bonus depreciation.
Sec. 202. Increased expensing for small business.
Sec. 203. 5-year carryback of certain net operating losses.
TITLE III—REDUCTIONS IN TAXES ON DIVIDENDS AND CAPITAL
GAINS
Sec. 301. Reduction in capital gains rates for individuals; repeal of 5-year hold-
ing period requirement.
Sec. 302. Dividends of individuals taxed at capital gain rates.
Sec. 303. Sunset of title.
TITLE IV—CORPORATE ESTIMATED TAX PAYMENTS FOR 2003
Sec. 401. Time for payment of corporate estimated taxes.
TITLE 
I—ACCELERATION 
OF
CERTAIN 
PREVIOUSLY 
EN-
ACTED TAX REDUCTIONS
SEC. 101. ACCELERATION OF INCREASE IN CHILD TAX
CREDIT.
(a) IN GENERAL.—The items relating to calendar
years 2001 through 2008 in the table contained in para-
graph (2) of section 24(a) (relating to per child amount)
are amended to read as follows:
‘‘2003, 2004, 2005 ..................................................................
$1,000
2006, 2007, or 2008 ..............................................................
700’’.
(b) ADVANCE PAYMENT OF PORTION OF INCREASED
CREDIT IN 2003.—
(1) IN GENERAL.—Subchapter B of chapter 65
(relating to abatements, credits, and refunds) is
amended by inserting after section 6428 the fol-
lowing new section:
‘‘SEC. 6429. ADVANCE PAYMENT OF PORTION OF IN-
CREASED CHILD CREDIT FOR 2003.
‘‘(a) IN GENERAL.—Each taxpayer who claimed a
credit under section 24 on the return for the taxpayer’s
first taxable year beginning in 2002 shall be treated as
having made a payment against the tax imposed by chap-
ter 1 for such taxable year in an amount equal to the child
tax credit refund amount (if any) for such taxable year.
‘‘(b) CHILD TAX CREDIT REFUND AMOUNT.—For
purposes of this section, the child tax credit refund
amount is the amount by which the aggregate credits al-
lowed under part IV of subchapter A of chapter 1 for such
first taxable year would have been increased if—
‘‘(1) the per child amount under section
24(a)(2) for such year were $1,000,
‘‘(2) only qualifying children (as defined in sec-
tion 24(c)) of the taxpayer for such year who had
not attained age 17 as of December 31, 2003, were
taken into account, and
‘‘(3) section 24(d)(1)(B)(ii) did not apply.
‘‘(c) TIMING OF PAYMENTS.—In the case of any over-
payment attributable to this section, the Secretary shall,
subject to the provisions of this title, refund or credit such
overpayment as rapidly as possible and, to the extent prac-
ticable, before October 1, 2003. No refund or credit shall
be made or allowed under this section after December 31,
2003.
‘‘(d) COORDINATION WITH CHILD TAX CREDIT.—
‘‘(1) IN
GENERAL.—The amount of credit
which would (but for this subsection and section 26)
be allowed under section 24 for the taxpayer’s first
taxable year beginning in 2003 shall be reduced (but
not below zero) by the payments made to the tax-
payer under this section. Any failure to so reduce
the credit shall be treated as arising out of a mathe-
matical or clerical error and assessed according to
section 6213(b)(1).
‘‘(2) JOINT RETURNS.—In the case of a pay-
ment under this section with respect to a joint re-
turn, half of such payment shall be treated as hav-
ing been made to each individual filing such return.
‘‘(e) NO INTEREST.—No interest shall be allowed on
any overpayment attributable to this section.’’.
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subchapter B of chapter 65 is amended by
adding at the end the following new item:
‘‘Sec. 6429. Advance payment of portion of increased child credit for
2003.’’.
(c) EFFECTIVE DATES.—
(1) SUBSECTION (a).—The amendment made
by subsection (a) shall apply to taxable years begin-
ning after December 31, 2002.
(2) SUBSECTION (b).—The amendments made
by subsection (b) shall take effect on the date of the
enactment of this Act.
‘‘(ii)(I) the Secretary shall make no
adjustment to the $14,000 initial bracket
amount for any taxable year beginning be-
fore January 1, 2004,
‘‘(II) the cost-of-living adjustment
used in making adjustments to the
$14,000 initial bracket amount for any
taxable year beginning during 2004 or
2005 shall be determined under subsection
(f)(3) by substituting ‘2002’ for ‘1992’ in
subparagraph (B) thereof, and
‘‘(III) the cost-of-living adjustment
used in making adjustments to the
$14,000 initial bracket amount for any
taxable year beginning after December 31,
2008, shall be determined under subsection
(f)(3) by substituting ‘2007’ for ‘1992’ in
subparagraph (B) thereof, and
‘‘(iii) the adjustments under clause
(ii) shall not apply to the amount referred
to in subparagraph (B)(iii).
If any amount after adjustment under the pre-
ceding sentence is not a multiple of $50, such
amount shall be rounded to the next lowest
multiple of $50.’’.
(c) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendments made by
this section shall apply to taxable years beginning
after December 31, 2002.
(2) TABLES FOR 2003.—The Secretary of the
Treasury shall modify each table which has been
prescribed under section 1(f) of the Internal Rev-
enue Code of 1986 for taxable years beginning in
2003 and which relates to the amendment made by
this section to reflect such amendment.
SEC. 105. ACCELERATION OF REDUCTION IN INDIVIDUAL
INCOME TAX RATES.
(a) IN GENERAL.—The table in paragraph (2) of sec-
tion 1(i) (relating to reductions in rates after June 30,
2001) is amended to read as follows:
‘‘In the case of taxable years
beginning during calendar year:
The corresponding percentages
shall be substituted for
the following percentages:
28%
31%
36%
39.6%
2001 ..........................................................................
27.5%
30.5%
35.5%
39.1%
2002 ..........................................................................
27.0%
30.0%
35.0%
38.6%
2003 and thereafter ..................................................
25.0%
28.0%
33.0%
35.0%’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 2002.
SEC. 106. MINIMUM TAX RELIEF TO INDIVIDUALS.
(a) IN GENERAL.—
(1) Subparagraph (A) of section 55(d)(1) is
amended by striking ‘‘$49,000 in the case of taxable
years beginning in 2001, 2002, 2003, and 2004’’
and inserting ‘‘$64,000 in the case of taxable years
beginning in 2003, 2004, and 2005’’.
(2) Subparagraph (B) of section 55(d)(1) is
amended by striking ‘‘$35,750 in the case of taxable
years beginning in 2001, 2002, 2003, and 2004’’
and inserting ‘‘$43,250 in the case of taxable years
beginning in 2003, 2004, and 2005’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to taxable years beginning after
December 31, 2002.
TITLE II—GROWTH INCENTIVES
FOR BUSINESS
SEC. 201. INCREASE AND EXTENSION OF BONUS DEPRECIA-
TION.
(a) IN GENERAL.—Section 168(k) (relating to special
allowance for certain property acquired after September
10, 2001, and before September 11, 2004) is amended by
adding at the end the following new paragraph:
‘‘(4) 50-PERCENT
BONUS
DEPRECIATION
FOR
CERTAIN PROPERTY.—
‘‘(A) IN GENERAL.—In the case of 50-per-
cent bonus depreciation property—
‘‘(i) paragraph (1)(A) shall be applied
by substituting ‘50 percent’ for ‘30 per-
cent’, and
‘‘(ii) except as provided in paragraph
(2)(C), such property shall be treated as
qualified property for purposes of this sub-
section.
‘‘(B) 50-PERCENT
BONUS
DEPRECIATION
PROPERTY.—For purposes of this subsection,
the term ‘50-percent bonus depreciation prop-
erty’ means property described in paragraph
(2)(A)(i)—
‘‘(i) the original use of which com-
mences with the taxpayer after May 5,
2003,
‘‘(ii) which is acquired by the taxpayer
after May 5, 2003, and before January 1,
2006, but only if no written binding con-
tract for the acquisition was in effect be-
fore May 6, 2003, and
‘‘(iii) which is placed in service by the
taxpayer before January 1, 2006, or, in
the case of property described in para-
graph (2)(B) (as modified by subpara-
graph (C) of this paragraph), before Janu-
ary 1, 2007.
‘‘(C) SPECIAL
RULES.—Rules similar to
the rules of subparagraphs (B) and (D) of
paragraph (2) shall apply for purposes of this
paragraph; except that references to September
10, 2001, shall be treated as references to May
5, 2003.
‘‘(D) AUTOMOBILES.—Paragraph (2)(E)
shall be applied by substituting ‘$9,200’ for
‘$4,600’ in the case of 50-percent bonus depre-
ciation property.
‘‘(E) ELECTION OF 30 PERCENT BONUS.—
If a taxpayer makes an election under this sub-
paragraph with respect to any class of property
for any taxable year, subparagraph (A)(i) shall
not apply to all property in such class placed in
service during such taxable year.’’.
(b) EXTENSION
OF PLACED
IN SERVICE DATES,
ETC. FOR 30-PERCENT BONUS DEPRECIATION PROP-
ERTY.—
(1) IN
GENERAL.—Clause (iv) of section
168(k)(2)(A) is amended—
(A) by striking ‘‘January 1, 2005’’ and in-
serting ‘‘January 1, 2006’’, and