[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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