[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1844 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1844

To amend the Internal Revenue Code of 1986 to clarify the treatment of 
 aircraft maintenance and repair expenditures required by the Federal 
                        Aviation Administration.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 10, 1997

 Mr. Collins 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 clarify the treatment of 
 aircraft maintenance and repair expenditures required by the Federal 
                        Aviation Administration.

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

SECTION 1. CLARIFICATION OF TREATMENT OF FAA-REQUIRED AIRWORTHINESS 
              MAINTENANCE AND REPAIR.

    (a) FAA Mandated Maintenance and Repair Not To Be Capitalized.--
Section 263 of the Internal Revenue Code of 1986 (relating to 
nondeductibility of certain costs) is amended by inserting after 
subsection (d) the following new subsection:
    ``(e) Aircraft Expenditures Necessary for Maintaining 
Airworthiness.--
            ``(1) In general.--Notwithstanding subsection (a), any 
        required aircraft maintenance expenditures shall be deemed to 
        be deductible repairs under section 162 or 212 and shall not be 
        chargeable to capital account.
            ``(2) Definitions.--For purposes of this subsection--
                    ``(A) Required aircraft maintenance expenditures.--
                The term `required aircraft maintenance expenditures' 
                means amounts paid or incurred for maintenance and 
                repair of aircraft airframes, engines, and on-board 
                aircraft equipment, if--
                            ``(i) performed under a government 
                        airworthiness maintenance program, or
                            ``(ii) performed as a result of an 
                        inspection conducted under such a government 
                        airworthiness maintenance program.
                    ``(B) Government airworthiness maintenance program 
                defined.--The term `government airworthiness 
                maintenance program' means a maintenance or repair 
                program established by, or required to be submitted to 
                and approved by, the Federal Aviation Administration of 
                the Department of Transportation. Such term shall also 
                include any other comparable airworthiness maintenance 
                or repair program of a foreign government.
            ``(3) Limitations.--For any taxable year, paragraph (1)--
                    ``(A) shall only apply with respect to amounts paid 
                or incurred to either (i) restore any aircraft, engine, 
                or on-board equipment to airworthiness that has not 
                been previously placed in service by the taxpayer, or 
                (ii) make major design changes to the aircraft, engine, 
                or equipment.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to any property placed in service before, on, or after the date 
of the enactment of this Act with respect to any taxable year for which 
claim for credit or refund has not expired by such date of enactment.
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