Short title

This Act may be cited as the

Job Creation Economic Stimulus Act of 2008

Adoption of the high productivity investment deduction

(a)

In General

Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to itemized deductions for individuals and corporations) is amended by inserting after section 168 the following new section:

168A.

High productivity investment deduction

(a)

Treatment as Expenses

A taxpayer may elect to treat the cost of any high productivity property as an expense not chargeable to capital account. Any cost so treated shall be allowed as a deduction in the taxable year in which the high productivity property is placed in service. (b)

Definition of High Productivity Property

(1)

In general

Except as provided in paragraph (3), the term high productivity property means any— (A)computer, (B)computer related peripheral equipment, (C)computer based machinery, (D)electronic diagnostic equipment, (E)electronic control equipment, (F)other electronic, electromechanical, laser or computer based equipment, (G)computer software, (H)equipment used in the manufacture of semiconductors, (I)high technology medical equipment, (J)advanced technology communications equipment, (K)optical fiber and photonics equipment, (L)advanced environmental products, (M)advanced life science products, or (N)new high productivity assets. (2)

Definitions

For purposes of this subsection: (A)

Computer

The term computer means a programmable electronically activated device which— (i)is capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes, and (ii)consists of a central processing unit containing extensive storage, logic, arithmetic and control capabilities. (B)

Computer related peripheral equipment

The term computer related peripheral equipment means any auxiliary machine or other equipment (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer (as determined without regard to whether such machine or equipment is an integral part of other property which is not a computer). (C)

Computer based machinery

The term computer based machinery means any machine which— (i)cuts, forms, shapes, drills, bores, mixes, paints, seals, welds, or otherwise transforms material, or (ii)handles, conveys, assembles, or packages materials or products,

by responding to electronically stored information and programmed commands.

(D)

Electronic diagnostic equipment

The term electronic diagnostic equipment means equipment that uses electronic components to sense or monitor location, size, volume, surface characteristics, pressure, temperature, speed, chemical composition, or other similar characteristics. (E)

Electronic control equipment

The term electronic control equipment means equipment that electronically controls pressure, temperature, size, volume, composition purity or other similar characteristics. (F)

High technology medical equipment

The term high technology medical equipment means any electronic, electromechanical, or computer-based high technology equipment used in the screening, monitoring, observation, diagnosis, or treatment of patients in a laboratory, medical, or hospital environment. (G)

Advanced technology communications equipment

The term advanced technology communications equipment means equipment used in the transmission or reception of voice, data, video, paging, messaging, or other communications services that are delivered using packet technology. A packet is a unit of data, or sequence of binary digits, that is routed between an origin and a destination on a packet-switched network. (H)

Optical fiber and photonics equipment

The term optical fiber and photonics equipment means optical fiber and the equipment and materials used to generate, manipulate and direct light particles over such fiber. (I)

Advanced environmental products

The term advanced environmental product means any high cell density ceramic or other device used for the control of nitrogen oxide and particulate emissions. (J)

Advanced life sciences products

The term advanced life sciences product means any polymer, ceramic or high-purity glass product used in biological research. (K)

New high productivity assets

(i)

In general

The term new high productivity assets means any asset utilizing 1 or more technological or scientific processes which were not in common commercial use before January 1, 2007. (ii)

Determinations

The Secretary shall establish procedures pursuant to which taxpayers can seek a public ruling that a particular class of assets qualifies as new high productivity assets. The procedures shall require the Secretary to provide a determination within 90 days of receipt of a properly completed request for a public ruling. (3)

Excluded property

The term high productivity property shall not include— (A)an entire car, locomotive, aircraft, ship or other vehicle solely because the vehicle is controlled in whole or part by a computer or other electronic equipment, (B)any equipment of a kind used primarily for entertainment or amusement of the user, and (C)typewriters, calculators, copiers, duplication equipment, and other similar equipment. (c)

Election

An election under this section for any taxable year shall— (1)be made on an asset by asset basis, and (2)be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. (d)

Special Rules

(1)

Cost

For purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring such property. (2)

Antichurning rules

(A)

In general

This section shall not apply to any property acquired by the taxpayer after December 31, 2007, if— (i)the property was owned or used at any time during the period beginning on January 1, 2007, and ending on December 31, 2007, by the taxpayer or a related person, (ii)the property was owned or used at any time during the period described in clause (i), and, as part of the transaction, the user of the property does not change, (iii)the taxpayer leases such property to a person (or a person related to such person) who owned or used such property at any time during the period described in clause (i), or (iv)the property is acquired in a transaction as part of which the user of such property does not change and the property was acquired from a person to which clause (ii) or clause (iii) applies. (B)

Applicable cost recovery rules

Section 168 shall apply to any property to which this section does not apply by reason of this paragraph. (C)

Special rules

For purposes of this paragraph— (i)property shall not be treated as owned before it is placed in service, and (ii)whether the user of a property changes will be determined in accordance with regulations prescribed by the Secretary. (3)

Recapture in certain cases

The Secretary shall, by regulations, provide for the recapturing the benefit under any deduction allowable under subsection (a) with respect to any property which is not used predominantly in a trade or business at any time. (4)

Alternative depreciation system applies

The election under subsection (a) may not be made with respect to property which at any time during the taxable year in which such property is placed in service is— (A)described in paragraph (1) of section 168A(g), or (B)listed propertynot predominantly used in a qualified business use as such terms apply for purposes of paragraph (1) of 280F(b). (e)

Termination

This section shall only apply to property which is— (1)acquired by the taxpayer after December 31, 2007, and before January 1, 2009, but only if no written binding contract for the acquisition was in effect before January 1, 2008, or (2)(A)acquired by the taxpayer pursuant to a written binding contract which was entered into after December 31, 2007, and before January 1, 2009, and (B)placed in service in taxable years beginning after December 31, 2009.

(b)

Conforming Amendment

The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by adding after section 168 the following new item:

Sec. 168A. High productivity investment deduction.

(c)

Effective Date

The amendments made by this section shall apply to property placed in service after December 31, 2007, with respect to taxable years beginning after such date.

50 percent allowance for depreciation for certain property acquired during 2008

(a)

In general

Paragraph (4) of section 168(k) of the Internal Revenue Code of 1986 (relating to 50-percent bonus for certain property) is amended— (1)by striking May 5, 2003 each place it appears and inserting December 31, 2007, (2)by striking January 1, 2005 each place it appears and inserting January 1, 2009, (3)by striking May 6, 2003 in subparagraph (B)(ii)(I) and inserting January 1, 2008, (4)by striking January 1, 2006 in subparagraph (B)(iii) and inserting January 1, 2010, and (5)by striking

of 30-percent bonus

in the heading for subparagraph (E). (b)

Repeal of basis limitation for certain property

Subparagraph (B) of section 168(k)(2) of such Code is amended by striking clause (ii) and redesignating clause (iii) as clause (ii). (c)

Syndications

Paragraph (4) of section 168(k) of such Code (relating to 50-percent depreciation for certain property) is amended by adding at the end the following:

(F)

Syndications

For purposes of applying paragraph (2)(A)(ii) by reason of this paragraph, if property— (i)is treated as originally placed in service after December 31, 2007, either directly or by a lessor of such property or pursuant to paragraph (2)(D)(ii), and (ii)is sold within 6 months after such property is so placed in service,

such property shall be treated as originally placed in service not earlier than the date of such sale.

(d)

Effective date

(1)

In general

The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2007. (2)

Exception for certain property

The amendments made by this section shall not apply to any property to which section 105 of the Gulf Opportunity Zone Act of 2005 applies.

Depreciation rules not modified for purposes of alternative minimum tax

(a)

Determination of Alternative Taxable Income

Paragraph (1) of section 56(a) of the Internal Revenue Code of 1986 (relating to depreciation) is amended by adding at the end the following new subparagraph:

(E)

Termination

This paragraph shall not apply to property placed in service in a taxable year beginning in 2008 or 2009.

(b)

Determination of Adjusted Current Earnings

Subparagraph (A) of section 56(g)(4) of such Code (relating to depreciation) is amended by adding at the end the following new clause:

(vi)

Termination

This subparagraph shall not apply to property placed in service in a taxable year beginning in 2008 or 2009.

(c)

Effective Date

The amendments made by this section shall apply to property placed in service after December 31, 2007, in taxable years beginning after such date.

Long-term contract accounting

(a)

In general

Section 168(k)(2) of the Internal Revenue Code of 1986 is amended by adding after subparagraph (G) the following new subparagraph:

(H)

Long-term contract accounting

The percentage of completion method under section 460 shall be applied as if this subsection had not been enacted.

(b)

Effective date

The amendment made by subsection (a) shall apply to property placed in service after the date of the enactment of this Act in taxable years ending after such date.

Long-term unused credits allowed against minimum tax

(a)

In general

Subsection (c) of section 53 of the Internal Revenue Code of 1986 (relating to limitation) is amended by adding at the end the following new paragraph:

(2)

Special rule for corporations with long-term unused credits

(A)

In general

If a corporation to which section 56(g) applies has a long-term unused minimum tax credit for a taxable year, the credit allowable under subsection (a) for the taxable year shall not exceed the greater of— (i)the limitation determined under paragraph (1) for the taxable year, or (ii)the least of the following for the taxable year: (I)The sum of the tax imposed by section 55 and the regular tax reduced by the sum of the credits allowed under subparts A, B, D, E, and F of this part. (II)The long-term unused minimum tax credit. (III)The sum of— (aa)50 percent of qualified investment, plus (bb)the qualified investment carryover to the taxable year. (B)

Long-term unused minimum tax credit

For purposes of this paragraph— (i)

In general

The long-term unused minimum tax credit for any taxable year is the portion of the minimum tax credit determined under subsection (b) attributable to the adjusted net minimum tax for taxable years beginning after 1986 and ending before the 3rd taxable year immediately preceding the taxable year for which the determination is being made. (ii)

First-in, first-out ordering rule

For purposes of clause (i), credits shall be treated as allowed under subsection (a) on a first-in, first-out basis. (C)

Qualified investment and qualified investment carryover

For purposes of this paragraph— (i)

Qualified investment

Qualified investment is property described in section 1245(a)(3) placed in service in the taxable year. (ii)

Qualified investment carryover

The qualified investment carryover is the amount by which 50 percent of qualified investment exceeds the amount of tax in paragraph (2)(A)(ii)(I). The qualified investment carryover may be carried only to the first taxable year following the current year. (D)

Termination

Subparagraph (A) shall not apply to any taxable year beginning after December 31, 2008.

(b)

Conforming amendments

Section 53(c) of such Code is amended— (1)by striking The and inserting the following:

(1)

In general

The

; and

(2)by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively.