[Congressional Record Volume 150, Number 103 (Thursday, July 22, 2004)]
[Extensions of Remarks]
[Page E1506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    THE ISSUE OF BONUS DEPRECIATION

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                           HON. JERRY WELLER

                              of illinois

                    in the house of representatives

                        Thursday, July 22, 2004

  Mr. WELLER. Mr. Speaker, thank you for the opportunity to address an 
important issue. Over the past 2-3 years, the issue of bonus 
depreciation has been very important to American companies and American 
workers as our economy recovers from the recent recession.
  On March 9, 2002, President Bush signed the Job Creation and Worker 
Assistance Act of 2002 into law. This law allows businesses to 
accelerate the depreciation of equipment they purchase between 
September 11, 2001 and December 31, 2004. They get to accelerate 30 
percent more in the first year. Before this law, a $1,000 computer 
would be depreciated equally over 5 years. $200 each year. With this 
change, businesses get $200 in the first year, plus a 30 percent bonus. 
So, they depreciate $500 in the first year and the remaining $500 over 
the next four years ($125 each year for four years). In 2003, President 
Bush signed legislation to increase the 30 percent bonus depreciation 
to 50 percent. There is evidence that bonus depreciation is helping to 
drive the U.S. economic recovery.
  Fifty percent bonus depreciation will expire on December 31, 2004. I 
personally will continue working to try to extend this important 
provision. For some industries, such small aircraft manufacturers, this 
provision will expire much sooner than December 2004. Because of the 
relatively long period of time it takes to build these airplanes, many 
manufacturers cannot promise delivery by the end of this year. Because 
of this, new orders are drying up.
  Why is this important? Well, building new airplanes requires workers. 
Increased orders requires increased workers. In May 2004, Cessna 
announced they would be hiring back 400 workers to meet increased 
demand.
  Both the House and Senate versions of the JOBS bill includes a 
provision extending the period for placing in service certain 
noncommercial business aircraft. Under the provision, if such an 
aircraft is ordered in 2004 and certain additional requirements are 
met, then a taxpayer would have until the end of 2005 to place the 
aircraft in service.
  I believe it is important that Congress enact this provision, either 
in the JOBS bill or through another vehicle, as soon as possible. I 
look forward to working with my colleagues to help make this happen.

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