[Congressional Record Volume 148, Number 24 (Thursday, March 7, 2002)]
[Senate]
[Pages S1677-S1678]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Ms. STABENOW
S. 2000. A bill to amend the Internal Revenue Code of 1986 to provide
for a special depreciation allowance for certain property acquired
after December 31, 2001, and before January 1, 2004; to the Committee
on Finance.
Ms. STABENOW. Mr. President, recently we passed legislation to
protect families hurt in this recession by extending unemployment
protection for an additional 13 weeks.
It was the right thing to do. Now let's finish the job by helping
them get back to work. Let's pass a stimulus bill that will jump start
the economy and create more employment.
I am introducing a bill that will encourage business investment in
new equipment and technology by offering a 30-percent depreciation
bonus on capital goods with a depreciation life of 20 years for less as
defined by IRS.
The bonus would apply to purchases made by the end of 2003 to
encourage spending now, not years from now.
This depreciation bonus is a broad-based incentive that would help
businesses both large and small in almost every sector of our economy.
The IRS list of qualifying industries and equipment runs nine pages
in very small type and there's not much that isn't covered.
It would help industries from autos to agriculture, from construction
to computers, from energy to electronics, and more.
And not only would this bill help the manufacturing industries that
make these products, spurring employment, but it would also help the
businesses that buy these products by making their workers more
productive.
I count this as a win/win situation. Let me give you an example of
how this depreciation bonus would work. To keep the math simple, let's
talk about a business that buys a computer for $1,000. Under IRS
regulations, computers have a 5-year deduction life.
With the depreciation bonus, the business would immediately take a
30-percent deduction on the $1,000 computer, a deduction of $300,
making the computer now worth $700.
Now the business would take all the standard depreciation deductions
allowed over the 5-years, but at the $700 value. For a computer that
would mean another 20-percent deduction in the first year. That's
another $140.
That means a total deduction of $440, or 44 percent, in just the
first year.
I support this bill because it is not targeted to specific industries
or companies or individuals. Almost every business in America, large,
small and in between, can benefit from this depreciation bonus.
I support this bill because it would be a needed short-term shot in
the arm for the economy, without shooting holes in our long-term goal
of fiscal responsibility.
I support this bill because it would create jobs, and support
existing jobs, bolstering the consumer economy, which is two thirds of
our Gross Domestic Product and vital to getting us out of this
recession.
This bill has the support of a broad range of business and industrial
groups. I urge my colleagues to support this legislation as well. Let's
rev up the economy without running up debt.
I ask unanimous consent that a copy of this bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 2000
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
[[Page S1678]]
SECTION 1. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN
PROPERTY ACQUIRED AFTER DECEMBER 31, 2001, AND
BEFORE JANUARY 1, 2004.
(a) In General.--Section 168 of the Internal Revenue Code
of 1986 (relating to accelerated cost recovery system) is
amended by adding at the end the following new subsection:
``(k) Special Allowance for Certain Property Acquired After
December 31, 2001, and Before January 1, 2004.--
``(1) Additional allowance.--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 30 percent of the
adjusted 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 or which is water utility
property,
``(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 qualified leasehold improvement property,
or
``(IV) which is eligible for depreciation under section
167(g),
``(ii) the original use of which commences with the
taxpayer after December 31, 2001,
``(iii) which is--
``(I) acquired by the taxpayer after December 31, 2001, and
before January 1, 2004, but only if no written binding
contract for the acquisition was in effect before January 1,
2002, or
``(II) acquired by the taxpayer pursuant to a written
binding contract which was entered into after December 31,
2001, and before January 1, 2004, and
``(iv) which is placed in service by the taxpayer before
January 1, 2004, or, in the case of property described in
subparagraph (B), before January 1, 2005.
``(B) Certain property having longer production periods
treated as qualified property.--
``(i) In general.--The term `qualified property' includes
property--
``(I) which meets the requirements of clauses (i), (ii),
and (iii) of subparagraph (A),
``(II) which has a recovery period of at least 10 years or
is transportation property, and
``(III) which is subject to section 263A by reason of
clause (ii) or (iii) of subsection (f)(1)(B) thereof.
``(ii) Only pre-january 1, 2004, basis eligible for
additional allowance.--In the case of property which is
qualified property solely by reason of clause (i), paragraph
(1) shall apply only to the extent of the adjusted basis
thereof attributable to manufacture, construction, or
production before January 1, 2004.
``(iii) Transportation property.--For purposes of this
subparagraph, the term `transportation property' means
tangible personal property used in the trade or business of
transporting persons or property.
``(C) Exceptions.--
``(i) 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).
``(ii) Election out.--If a taxpayer makes an election under
this clause 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 during such taxable year.
``(D) Special rules.--
``(i) Self-constructed property.--In the case of a taxpayer
manufacturing, constructing, or producing property for the
taxpayer's own use, the requirements of clause (iii) of
subparagraph (A) shall be treated as met if the taxpayer
begins manufacturing, constructing, or producing the property
after December 31, 2001, and before January 1, 2004.
``(ii) Sale-leasebacks.--For purposes of subparagraph
(A)(ii), if property--
``(I) is originally placed in service after December 31,
2001, 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).
``(E) 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 $4,600.
``(ii) Listed property.--The deduction allowable under
paragraph (1) shall be taken into account in computing any
recapture amount under section 280F(b)(2).
``(3) Qualified leasehold improvement property.--For
purposes of this subsection--
``(A) In general.--The term `qualified leasehold
improvement property' means any improvement to an interior
portion of a building which is nonresidential real property
if--
``(i) such improvement is made under or pursuant to a lease
(as defined in subsection (h)(7))--
``(I) by the lessee (or any sublessee) of such portion, or
``(II) by the lessor of such portion,
``(ii) such portion is to be occupied exclusively by the
lessee (or any sublessee) of such portion, and
``(iii) such improvement is placed in service more than 3
years after the date the building was first placed in
service.
``(B) Certain improvements not included.--Such term shall
not include any improvement for which the expenditure is
attributable to--
``(i) the enlargement of the building,
``(ii) any elevator or escalator,
``(iii) any structural component benefiting a common area,
and
``(iv) the internal structural framework of the building.
``(C) Definitions and special rules.--For purposes of this
paragraph--
``(i) Binding commitment to lease treated as lease.--A
binding commitment to enter into a lease shall be treated as
a lease, and the parties to such commitment shall be treated
as lessor and lessee, respectively.
``(ii) Related persons.--A lease between related persons
shall not be considered a lease. For purposes of the
preceding sentence, the term `related persons' means--
``(I) members of an affiliated group (as defined in section
1504), and
``(II) persons having a relationship described in
subsection (b) of section 267; except that, for purposes of
this clause, the phrase `80 percent or more' shall be
substituted for the phrase `more than 50 percent' each place
it appears in such subsection.
``(D) Improvements made by lessor.--In the case of an
improvement made by the person who was the lessor of such
improvement when such improvement was placed in service, such
improvement shall be qualified leasehold improvement property
(if at all) only so long as such improvement is held by such
person.''.
(b) Allowance Against Alternative Minimum Tax.--
(1) In general.--Section 56(a)(1)(A) of the Internal
Revenue Code of 1986 (relating to depreciation adjustment for
alternative minimum tax) is amended by adding at the end the
following new clause:
``(iii) Additional allowance for certain property acquired
after december 31, 2001, and before january 1, 2004.--The
deduction under section 168(k) shall be allowed.''
(2) Conforming amendment.--Clause (i) of section
56(a)(1)(A) of the Internal Revenue Code of 1986 is amended
by striking ``clause (ii)'' both places it appears and
inserting ``clauses (ii) and (iii)''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
2001, in taxable years ending after such date.
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