[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4718 Engrossed in House (EH)]

113th CONGRESS
  2d Session
                                H. R. 4718

_______________________________________________________________________

                                 AN ACT


 
To amend the Internal Revenue Code of 1986 to modify and make permanent 
                          bonus depreciation.

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

SECTION 1. BONUS DEPRECIATION MODIFIED AND MADE PERMANENT.

    (a) Made Permanent; Inclusion of Qualified Retail Improvement 
Property.--Section 168(k)(2) of the Internal Revenue Code of 1986 is 
amended to read as follows:
            ``(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,
                            ``(IV) which is qualified leasehold 
                        improvement property, or
                            ``(V) which is qualified retail improvement 
                        property, and
                            ``(ii) the original use of which commences 
                        with the taxpayer.
                    ``(B) Exception for alternative depreciation 
                property.--The term `qualified property' shall not 
                include any property to which the alternative 
                depreciation system under subsection (g) applies, 
                determined--
                            ``(i) without regard to paragraph (7) of 
                        subsection (g) (relating to election to have 
                        system apply), and
                            ``(ii) after application of section 280F(b) 
                        (relating to listed property with limited 
                        business use).
                    ``(C) Special rules.--
                            ``(i) Sale-leasebacks.--For purposes of 
                        clause (ii) and subparagraph (A)(ii), if 
                        property is--
                                    ``(I) originally placed in service 
                                by a person, and
                                    ``(II) sold and leased back by such 
                                person within 3 months after the date 
                                such property was originally placed in 
                                service,
                        such property shall be treated as originally 
                        placed in service not earlier than the date on 
                        which such property is used under the leaseback 
                        referred to in subclause (II).
                            ``(ii) Syndication.--For purposes of 
                        subparagraph (A)(ii), if--
                                    ``(I) property is originally placed 
                                in service by the lessor of such 
                                property,
                                    ``(II) such property is sold by 
                                such lessor or any subsequent purchaser 
                                within 3 months after the date such 
                                property was originally placed in 
                                service (or, in the case of multiple 
                                units of property subject to the same 
                                lease, within 3 months after the date 
                                the final unit is placed in service, so 
                                long as the period between the time the 
                                first unit is placed in service and the 
                                time the last unit is placed in service 
                                does not exceed 12 months), and
                                    ``(III) the user of such property 
                                after the last sale during such 3-month 
                                period remains the same as when such 
                                property was originally placed in 
                                service,
                        such property shall be treated as originally 
                        placed in service not earlier than the date of 
                        such last sale.
                    ``(D) Coordination with section 280f.--For purposes 
                of section 280F--
                            ``(i) Automobiles.--In the case of a 
                        passenger automobile (as defined in section 
                        280F(d)(5)) which is qualified property, the 
                        Secretary shall increase the limitation under 
                        section 280F(a)(1)(A)(i) by $8,000.
                            ``(ii) Listed property.--The deduction 
                        allowable under paragraph (1) shall be taken 
                        into account in computing any recapture amount 
                        under section 280F(b)(2).
                            ``(iii) Inflation adjustment.-- In the case 
                        of any taxable year beginning in a calendar 
                        year after 2014, the $8,000 amount in clause 
                        (i) shall be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the automobile price 
                                inflation adjustment determined under 
                                section 280F(d)(7)(B)(i) for the 
                                calendar year in which such taxable 
                                year begins by substituting `2013' for 
                                `1987' in subclause (II) thereof.
                         If any increase under the preceding sentence 
                        is not a multiple of $100, such increase shall 
                        be rounded to the nearest multiple of $100.
                    ``(E) Deduction allowed in computing minimum tax.--
                For purposes of determining alternative minimum taxable 
                income under section 55, the deduction under section 
                167 for qualified property shall be determined without 
                regard to any adjustment under section 56.''.
    (b) Expansion of Election to Accelerate Amt Credits in Lieu of 
Bonus Depreciation.--Section 168(k)(4) of such Code is amended to read 
as follows:
            ``(4) Election to accelerate amt credits in lieu of bonus 
        depreciation.--
                    ``(A) In general.--If a corporation elects to have 
                this paragraph apply for any taxable year--
                            ``(i) paragraphs (1)(A), (2)(D)(i), and 
                        (5)(A)(i) shall not apply for such taxable 
                        year,
                            ``(ii) the applicable depreciation method 
                        used under this section with respect to any 
                        qualified property shall be the straight line 
                        method, and
                            ``(iii) the limitation imposed by section 
                        53(c) for such taxable year shall be increased 
                        by the bonus depreciation amount which is 
                        determined for such taxable year under 
                        subparagraph (B).
                    ``(B) Bonus depreciation amount.--For purposes of 
                this paragraph--
                            ``(i) In general.--The bonus depreciation 
                        amount for any taxable year is an amount equal 
                        to 20 percent of the excess (if any) of--
                                    ``(I) the aggregate amount of 
                                depreciation which would be allowed 
                                under this section for qualified 
                                property placed in service by the 
                                taxpayer during such taxable year if 
                                paragraph (1) applied to all such 
                                property, over
                                    ``(II) the aggregate amount of 
                                depreciation which would be allowed 
                                under this section for qualified 
                                property placed in service by the 
                                taxpayer during such taxable year if 
                                paragraph (1) did not apply to any such 
                                property.
                        The aggregate amounts determined under 
                        subclauses (I) and (II) shall be determined 
                        without regard to any election made under 
                        subsection (b)(2)(D), (b)(3)(D), or (g)(7) and 
                        without regard to subparagraph (A)(ii).
                            ``(ii) Limitation.--The bonus depreciation 
                        amount for any taxable year shall not exceed 
                        the lesser of--
                                    ``(I) 50 percent of the minimum tax 
                                credit under section 53(b) for the 
                                first taxable year ending after 
                                December 31, 2013, or
                                    ``(II) the minimum tax credit under 
                                section 53(b) for such taxable year 
                                determined by taking into account only 
                                the adjusted net minimum tax for 
                                taxable years ending before January 1, 
                                2014 (determined by treating credits as 
                                allowed on a first-in, first-out 
                                basis).
                            ``(iii) Aggregation rule.--All corporations 
                        which are treated as a single employer under 
                        section 52(a) shall be treated--
                                    ``(I) as 1 taxpayer for purposes of 
                                this paragraph, and
                                    ``(II) as having elected the 
                                application of this paragraph if any 
                                such corporation so elects.
                    ``(C) Credit refundable.--For purposes of section 
                6401(b), the aggregate increase in the credits 
                allowable under part IV of subchapter A for any taxable 
                year resulting from the application of this paragraph 
                shall be treated as allowed under subpart C of such 
                part (and not any other subpart).
                    ``(D) Other rules.--
                            ``(i) Election.--Any election under this 
                        paragraph may be revoked only with the consent 
                        of the Secretary.
                            ``(ii) Partnerships with electing 
                        partners.--In the case of a corporation which 
                        is a partner in a partnership and which makes 
                        an election under subparagraph (A) for the 
                        taxable year, for purposes of determining such 
                        corporation's distributive share of partnership 
                        items under section 702 for such taxable year--
                                    ``(I) paragraphs (1)(A), (2)(D)(i), 
                                and (5)(A)(i) shall not apply, and
                                    ``(II) the applicable depreciation 
                                method used under this section with 
                                respect to any qualified property shall 
                                be the straight line method.
                            ``(iii) Certain partnerships.--In the case 
                        of a partnership in which more than 50 percent 
                        of the capital and profits interests are owned 
                        (directly or indirectly) at all times during 
                        the taxable year by 1 corporation (or by 
                        corporations treated as 1 taxpayer under 
                        subparagraph (B)(iii)), each partner shall 
                        compute its bonus depreciation amount under 
                        clause (i) of subparagraph (B) by taking into 
                        account its distributive share of the amounts 
                        determined by the partnership under subclauses 
                        (I) and (II) of such clause for the taxable 
                        year of the partnership ending with or within 
                        the taxable year of the partner.''.
    (c) Special Rules for Trees and Vines Bearing Fruits and Nuts.--
Section 168(k) of such Code is amended--
            (1) by striking paragraph (5), and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Special rules for trees and vines bearing fruits and 
        nuts.--
                    ``(A) In general.--In the case of any tree or vine 
                bearing fruits or nuts which is planted, or is grafted 
                to a plant that has already been planted, by the 
                taxpayer in the ordinary course of the taxpayer's 
                farming business (as defined in section 263A(e)(4))--
                            ``(i) a depreciation deduction equal to 50 
                        percent of the adjusted basis of such tree or 
                        vine shall be allowed under section 167(a) for 
                        the taxable year in which such tree or vine is 
                        so planted or grafted, and
                            ``(ii) the adjusted basis of such tree or 
                        vine shall be reduced by the amount of such 
                        deduction.
                    ``(B) Election out.--If a taxpayer makes an 
                election under this subparagraph for any taxable year, 
                this paragraph shall not apply to any tree or vine 
                planted or grafted during such taxable year. An 
                election under this subparagraph may be revoked only 
                with the consent of the Secretary.
                    ``(C) Additional depreciation may be claimed only 
                once.--If this paragraph applies to any tree or vine, 
                such tree or vine shall not be treated as qualified 
                property in the taxable year in which placed in 
                service.
                    ``(D) Coordination with election to accelerate amt 
                credits.--If a corporation makes an election under 
                paragraph (4) for any taxable year, the amount under 
                paragraph (4)(B)(i)(I) for such taxable year shall be 
                increased by the amount determined under subparagraph 
                (A)(i) for such taxable year.
                    ``(E) Deduction allowed in computing minimum tax.--
                Rules similar to the rules of paragraph (2)(E) shall 
                apply for purposes of this paragraph.''.
    (d) Conforming Amendments.--
            (1) Section 168(e)(8) of such Code is amended by striking 
        subparagraph (D).
            (2) Section 168(k) of such Code is amended by adding at the 
        end the following new paragraph:
            ``(6) Election out.--If a taxpayer makes an election under 
        this paragraph with respect to any class of property for any 
        taxable year, this subsection shall not apply to all property 
        in such class placed in service (or, in the case of paragraph 
        (5), planted or grafted) during such taxable year. An election 
        under this paragraph may be revoked only with the consent of 
        the Secretary.''.
            (3) Section 168(l)(5) of such Code is amended by striking 
        ``section 168(k)(2)(G)'' and inserting ``section 
        168(k)(2)(E)''.
            (4) Section 263A(c) of such Code is amended by adding at 
        the end the following new paragraph:
            ``(7) Coordination with section 168(k)(5).--This section 
        shall not apply to any amount allowable as a deduction by 
        reason of section 168(k)(5) (relating to special rules for 
        trees and vines bearing fruits and nuts).''.
            (5) Section 460(c)(6)(B) of such Code is amended by 
        striking ``which--'' and all that follows and inserting ``which 
        has a recovery period of 7 years or less.''.
            (6) Section 168(k) of such Code is amended by striking 
        ``Acquired After December 31, 2007, and Before January 1, 
        2014'' in the heading thereof.
    (e) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by this section shall apply to 
        property placed in service after December 31, 2013.
            (2) Expansion of election to accelerate amt credits in lieu 
        of bonus depreciation.--
                    (A) In general.--The amendment made by subsection 
                (b) (other than so much of such amendment as relates to 
                section 168(k)(4)(D)(iii) of such Code, as added by 
                such amendment) shall apply to taxable years ending 
                after December 31, 2013.
                    (B) Transitional rule.--In the case of a taxable 
                year beginning before January 1, 2014, and ending after 
                December 31, 2013, the bonus depreciation amount 
                determined under section 168(k)(4) of such Code for 
                such year shall be the sum of--
                            (i) such amount determined without regard 
                        to the amendments made by this section and--
                                    (I) by taking into account only 
                                property placed in service before 
                                January 1, 2014, and
                                    (II) by multiplying the limitation 
                                under section 168(k)(4)(C)(ii) of such 
                                Code (determined without regard to the 
                                amendments made by this section) by a 
                                fraction the numerator of which is the 
                                number of days in the taxable year 
                                before January 1, 2014, and the 
                                denominator of which is the number of 
                                days in the taxable year, and
                            (ii) such amount determined after taking 
                        into account the amendments made by this 
                        section and--
                                    (I) by taking into account only 
                                property placed in service after 
                                December 31, 2013, and
                                    (II) by multiplying the limitation 
                                under section 168(k)(4)(B)(ii) of such 
                                Code (as amended by this section) by a 
                                fraction the numerator of which is the 
                                number of days in the taxable year 
                                after December 31, 2013, and the 
                                denominator of which is the number of 
                                days in the taxable year.
            (3) Special rules for certain trees and vines.--The 
        amendment made by subsection (c)(2) shall apply to trees and 
        vines planted or grafted after December 31, 2013.

SEC. 2. BUDGETARY EFFECTS.

    (a) Statutory Pay-As-You-Go Scorecards.--The budgetary effects of 
this Act shall not be entered on either PAYGO scorecard maintained 
pursuant to section 4(d) of the Statutory Pay-As-You-Go Act of 2010.
    (b) Senate PAYGO Scorecards.--The budgetary effects of this Act 
shall not be entered on any PAYGO scorecard maintained for purposes of 
section 201 of S. Con. Res. 21 (110th Congress).

            Passed the House of Representatives July 11, 2014.

            Attest:

                                                                 Clerk.
113th CONGRESS

  2d Session

                               H. R. 4718

_______________________________________________________________________

                                 AN ACT

To amend the Internal Revenue Code of 1986 to modify and make permanent 
                          bonus depreciation.