I 
109TH CONGRESS 
1ST SESSION H. R. 2319 
To amend the Internal Revenue Code of 1986 to allow taxpayers to expense 
property eligible for bonus depreciation. 
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 allow 
taxpayers to expense property eligible for bonus depreciation. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXPENSING OF PROPERTY ELIGIBLE FOR 
BONUS DEPRECIATION. 
(a) IN GENERAL.—So much of subsection (k) of sec-
tion 168 of the Internal Revenue Code of 1986 (relating 
to special allowance for certain property acquired after 
September 10, 2001, and before January 1, 2005) as pre-
cedes paragraph (2)(D) thereof is amended to read as fol-
lows:
‘‘(k) EXPENSING OF CERTAIN PROPERTY ACQUIRED 
AFTER MAY 12, 2005.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
property— 
‘‘(A) the depreciation deduction provided 
by section 167(a) for the taxable year in which 
such property is placed in service shall include 
an allowance equal to 100 percent of the ad-
justed basis of the qualified property, and 
‘‘(B) the adjusted basis of the qualified 
property shall be reduced by the amount of 
such deduction before computing the amount 
otherwise allowable as a depreciation deduction 
under this chapter for such taxable year and 
any subsequent taxable year. 
‘‘(2) QUALIFIED PROPERTY.— For purposes of 
this subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
property’ means property— 
‘‘(i)(I) to which this section applies 
which has a recovery period of 20 years or 
less, 
‘‘(II) which is computer software (as 
defined in section 167(f)(1)(B)) for which
a deduction is allowable under section 
167(a) without regard to this subsection, 
‘‘(III) which is water utility property, 
or 
‘‘(IV) which is qualified leasehold im-
provement property, 
‘‘(ii) the original use of which com-
mences with the taxpayer after May 12, 
2005, 
‘‘(iii) which is acquired by the tax-
payer after such date, but only if no writ-
ten binding contract for the acquisition 
was in effect on or before such date. 
‘‘(B) 
CERTAIN
AIRCRAFT.—The 
term 
‘qualified property’ includes property— 
‘‘(i) which meets the requirements of 
clauses (ii) and (iii) of subparagraph (A), 
‘‘(ii) which is an aircraft which is not 
used in the trade or business of trans-
porting persons or property other than for 
agricultural or firefighting purposes, 
‘‘(iii) which is purchased and on which 
such purchaser, at the time of the contract 
for purchase, has made a nonrefundable 
deposit of the lesser of—
‘‘(I) 10 percent of the cost, or 
‘‘(II) $100,000, and 
‘‘(iv) which has— 
‘‘(I) an estimated production pe-
riod exceeding 4 months, and 
‘‘(II) 
a 
cost 
exceeding 
$200,000.’’. 
(b) TECHNICAL AMENDMENTS.— 
(1) Paragraph (2) of section 168(k) of such 
Code is amended by redesignating subparagraphs 
(D), (E), (F), and (G) as subparagraphs (C), (D), 
(E), and (F), respectively. 
(2) Subparagraph (C) of section 168(k)(2) of 
such Code, as redesignated by paragraph (1), is 
amended by striking the last sentence of clause (iii), 
by striking clause (ii), and by redesignating clause 
(iii) as clause (ii). 
(3) Clause (i) of section 168(k)(2)(D) of such 
Code, as so redesignated, is amended by striking 
‘‘and before January 1, 2005’’. 
(4) Subparagraph (D) of section 168(k)(2) of 
such Code, as so redesignated, is amended by strik-
ing ‘‘September 10, 2001’’ each place it appears and 
inserting.
(5) Clause (i) of section 168(k)(2)(E) of such 
Code, as so redesignated, is amended by striking 
‘‘$4,600’’ and inserting ‘‘$14,540’’. 
(6) Section 168(k) of such Code is amended by 
striking paragraph (4). 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
May 12, 2005. 
SEC. 2. LONG-TERM CONTRACT ACCOUNTING. 
(a) IN GENERAL.—Section 168(k)(2) of the Internal 
Revenue Code of 1986 is amended by adding after sub-
paragraph (F), as redesignated by section 1, the following 
new subparagraph: 
‘‘(F) LONG-TERM
CONTRACT
ACCOUNT-
ING.—The percentage of completion method 
under section 460 shall be applied as if this 
subsection had not been enacted.’’. 
SEC. 3. ELECTION TO INCREASE MINIMUM TAX CREDIT 
LIMITATION IN LIEU OF BONUS DEPRECIA-
TION. 
(a) IN GENERAL.—Section 53 of the Internal Rev-
enue Code of 1986 (relating to credit for prior year min-
imum tax liability) is amended by adding at the end of 
the following new subsection:
‘‘(e) ADDITIONAL CREDIT IN LIEU OF BONUS DE-
PRECIATION.— 
‘‘(1) IN GENERAL.—In the case of a corpora-
tion making an election under this subsection for a 
taxable year, the limitation under subsection (c) 
shall be increased by an amount equal to the bonus 
depreciation amount. 
‘‘(2) BONUS
DEPRECIATION
AMOUNT.—For 
purposes of paragraph (1), the bonus depreciation 
amount for any taxable year is an amount equal to 
the product of— 
‘‘(A) 35 percent, and 
‘‘(B) the excess (if any) of— 
‘‘(i) the aggregate amount of depre-
ciation which would be determined under 
section 167 for property placed in service 
during such taxable year if no election 
under this subsection were made, over 
‘‘(ii) the aggregate allowance for de-
preciation allowable with respect to such 
property placed in service for such taxable 
year. 
‘‘(3) ELECTION.—Section 168(k) (other than 
paragraph (2)(E) thereof) shall not apply to any 
property placed in service during a taxable year by
a corporation making an election under this sub-
section for such taxable year. An election under this 
subsection may only be revoked with the consent of 
the Secretary. 
‘‘(4) CREDIT REFUNDABLE.—The aggregate in-
crease in the credit allowed by this section for any 
taxable year by reason of this subsection shall for 
purposes of this title (other than subsection (b)(2) 
of this section) be treated as a credit allowed to the 
taxpayer under subpart C.’’. 
(b) CONFORMING AMENDMENTS.—Subsection (k) of 
section 168 of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(4) CROSS REFERENCE.—For an election to 
claim certain minimum tax credits in lieu of the al-
lowance determined under this subsection, see sec-
tion 53(e).’’. 
SEC. 4. EFFECTIVE DATE. 
The amendments made by this Act shall apply to tax-
able years ending after May 12, 2005. 
Æ