[Congressional Record Volume 158, Number 49 (Monday, March 26, 2012)]
[Senate]
[Pages S2032-S2033]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. REID:
  S. 2237. A bill to provide a temporary income tax credit for 
increased payroll and extend bonus depreciation for an additional year, 
and for other purposes; read the first time.
  Mr. REID. Mr. President, I ask unanimous consent that the text of the 
bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record as follows:

                                S. 2237

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Jobs and Tax 
     Relief Act''.

     SEC. 2. TEMPORARY TAX CREDIT FOR INCREASED PAYROLL.

       (a) In General.--In the case of a qualified employer who 
     elects the application of this section, there shall be 
     allowed as a credit against the tax imposed by chapter 1 of 
     the Internal Revenue Code of 1986 for the taxable year which 
     includes December 31, 2012, an amount equal to 10 percent of 
     the excess (if any) of--
       (1) the sum of the wages and compensation paid by such 
     qualified employer for qualified services during calendar 
     year 2012, over
       (2) the sum of such wages and compensation paid during 
     calendar year 2011.
       (b) Limitation.--The amount of the excess taken into 
     account under subsection (a) with respect to any qualified 
     employer shall not exceed $5,000,000.
       (c) Wages and Compensation.--For purposes of this section--
       (1) Wages.--The term ``wages'' has the meaning given such 
     term under section 3121 of the Internal Revenue Code of 1986 
     for purposes of the tax imposed by section 3111(a) of such 
     Code.
       (2) Compensation.--The term ``compensation'' has the 
     meaning given such term under section 3231 of such Code for 
     purposes of the portion of the tax imposed by section 3221(a) 
     of such Code that corresponds to the tax imposed by section 
     3111(a) of such Code.
       (3) Application of contribution and benefit base to 
     calendar year 2011.--For purposes of determining wages and 
     compensation under subsection (a)(2), the contribution and 
     benefit base as determined under section 230 of the Social 
     Security Act shall be such amount as in effect for calendar 
     year 2012.
       (4) Special rule when no wages or compensation in 2011.--In 
     any case in which the sum of the wages and compensation paid 
     by a qualified employer for qualified services during 
     calendar year 2011 is zero, then the amount taken into 
     account under subsection (a)(2) shall be 80 percent of the 
     amount taken into account under subsection (a)(1).
       (5) Coordination with other employment credits.--The amount 
     of the excess taken into account under subsection (a) shall 
     be reduced by the sum of all other Federal tax credits 
     determined with respect to wages or compensation paid in 
     calendar year 2012.
       (d) Other Definitions.--
       (1) Qualified employer.--For purposes of this section--
       (A) In general.--The term ``qualified employer'' has the 
     meaning given such term under section 3111(d)(2) of the 
     Internal Revenue Code of 1986, determined by substituting 
     ``section 101 of the Higher Education Act of 1965'' for 
     ``section 101(b) of the Higher Education Act of 1965'' in 
     subparagraph (B) thereof.
       (B) Aggregation rules.--Rules similar to the rules of 
     sections 414(b), 414(c), 414(m), and 414(o) of such Code 
     shall apply to determine when multiple entities shall be 
     treated as a single employer, and rules with respect to 
     predecessor and successor employers may be applied, in such 
     manner as may be prescribed by the Secretary of the Treasury 
     or the Secretary's designee (in this section referred to as 
     the ``Secretary'').
       (2) Qualified services.--The term ``qualified services'' 
     means services performed by an individual who is not 
     described in section 51(i)(1) of such Code (applied by 
     substituting ``qualified employer'' for ``taxpayer'' each 
     place it appears)--
       (A) in a trade or business of the qualified employer, or
       (B) in the case of a qualified employer exempt from tax 
     under section 501(a) of such Code, in furtherance of the 
     activities related to the purpose or function constituting 
     the basis of the employer's exemption under section 501 of 
     such Code.
       (e) Application of Certain Rules.--Rules similar to the 
     rules of sections 280C(a) and 6501(m) of the Internal Revenue 
     Code of 1986 shall apply with respect to the credit 
     determined under this section.
       (f) Treatment of Credit.--For purposes of the Internal 
     Revenue Code of 1986--
       (1) Taxable employers.--
       (A) In general.--The credit allowed under subsection (a) 
     with respect to qualified services described in subsection 
     (d)(2)(A) for any taxable year shall be added to the current 
     year business credit under section 38(b) of such Code for 
     such taxable year and shall be treated as a credit allowed 
     under subpart D of part IV of subchapter A of chapter 1 of 
     such Code.
       (B) Limitation on carrybacks.--No portion of the unused 
     business credit under section 38 of such Code for any taxable 
     year which is attributable to an increase in the current year 
     business credit by reason of subparagraph (A) may be carried 
     to a taxable year beginning before the date of the enactment 
     of this section.
       (2) Tax-exempt employers.--
       (A) In general.--The credit allowed under subsection (a) 
     with respect to qualified services described in subsection 
     (d)(2)(B) for any taxable year--
       (i) shall be treated as a credit allowed under subpart C of 
     part IV of subchapter A of chapter 1 of such Code, and
       (ii) shall be added to the credits described in 
     subparagraph (A) of section 6211(b)(4) of such Code.
       (B) Conforming amendment.--Section 1324(b)(2) of title 31, 
     United States Code, is amended by inserting ``or due under 
     section 2 of the Small Business Jobs and Tax Relief Act'' 
     after ``the Housing Assistance Tax Act of 2008''.
       (g) Treatment of Possessions.--
       (1) Payments to possessions.--
       (A) Mirror code possessions.--The Secretary shall pay to 
     each possession of the United States with a mirror code tax 
     system amounts equal to the loss to that possession by reason 
     of the application of subsections (a) through (f). Such 
     amounts shall be determined by the Secretary based on 
     information provided by the government of the respective 
     possession of the United States.
       (B) Other possessions.--The Secretary shall pay to each 
     possession of the United States which does not have a mirror 
     code tax system the amount estimated by the Secretary as 
     being equal to the loss to that possession that would have 
     occurred by reason of the application of subsections (a) 
     through (f) if a mirror code tax system had been in effect in 
     such possession. The preceding sentence shall not apply with 
     respect to any possession of the United States unless such 
     possession establishes to the satisfaction of the Secretary 
     that the possession has implemented (or, at the discretion of 
     the Secretary, will implement) an income tax benefit which is 
     substantially equivalent to the income tax credit allowed 
     under such subsections.
       (2) Coordination with credit allowed against united states 
     income taxes.--No increase in the credit determined under 
     section 38(b) of the Internal Revenue Code of 1986 against 
     United States income taxes for any taxable year determined by 
     reason of subsection (f)(1)(A) shall be taken into account 
     with respect to any person--
       (A) to whom a credit is allowed against taxes imposed by 
     the possession by reason of this section for such taxable 
     year, or
       (B) who is eligible for a payment under a plan described in 
     paragraph (1)(B) with respect to such taxable year.
       (3) Definitions and special rules.--
       (A) Possession of the united states.--For purposes of this 
     subsection, the term ``possession of the United States'' 
     includes American Samoa, Guam, the Commonwealth of the 
     Northern Mariana Islands, the Commonwealth of Puerto Rico, 
     and the United States Virgin Islands.
       (B) Mirror code tax system.--For purposes of this 
     subsection, the term ``mirror code tax system'' means, with 
     respect to any possession of the United States, the income 
     tax system of such possession if the income tax liability of 
     the residents of such possession under such system is 
     determined by reference to the income tax laws of the United 
     States as if such possession were the United States.
       (C) Treatment of payments.--For purposes of section 
     1324(b)(2) of title 31, United States Code, the payments 
     under this subsection shall be treated in the same manner as 
     a refund due from credit provisions described in such 
     section.

[[Page S2033]]

       (h) Regulations.--The Secretary shall prescribe such 
     regulations or guidance as are necessary to carry out the 
     provisions of this section.

     SEC. 3. EXTENSION OF ALLOWANCE FOR BONUS DEPRECIATION FOR 
                   CERTAIN BUSINESS ASSETS.

       (a) Extension of 100 Percent Bonus Depreciation.--
       (1) In general.--Paragraph (5) of section 168(k) of the 
     Internal Revenue Code of 1986 is amended--
       (A) by striking ``January 1, 2012'' each place it appears 
     and inserting ``January 1, 2013'', and
       (B) by striking ``January 1, 2013'' and inserting ``January 
     1, 2014''.
       (2) Conforming amendments.--
       (A) The heading for paragraph (5) of section 168(k) of such 
     Code is amended by striking ``pre-2012 periods'' and 
     inserting ``pre-2013 periods''.
       (B) Clause (ii) of section 460(c)(6)(B) of such Code is 
     amended by striking ``January 1, 2011 (January 1, 2012'' and 
     inserting ``January 1, 2013 (January 1, 2014''.
       (3) Effective dates.--
       (A) In general.--Except as provided in subparagraph (B), 
     the amendments made by this section shall apply to property 
     placed in service after December 31, 2011.
       (B) Conforming amendment.--The amendment made by paragraph 
     (2)(B) shall apply to property placed in service after 
     December 31, 2010.
       (b) Expansion of Election To Accelerate AMT Credits in Lieu 
     of Bonus Depreciation.--
       (1) In general.--Paragraph (4) of section 168(k) of the 
     Internal Revenue Code of 1986 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) paragraph (1) shall not apply to any eligible 
     qualified property placed in service by the taxpayer in such 
     taxable year,
       ``(ii) the applicable depreciation method used under this 
     section with respect to such 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 eligible 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 eligible 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, 
     2011, reduced (but not below zero) by the sum of the bonus 
     depreciation amounts for all taxable years ending after such 
     date for which an election under this paragraph was made 
     which precede the taxable year for which the determination is 
     made (other than amounts determined with respect to property 
     placed in service by the taxpayer on or before such date), or
       ``(II) the minimum tax credit under section 53(b) for such 
     taxable year determined by taking into account only the 
     adjusted minimum tax for taxable years ending before January 
     1, 2012 (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) Eligible qualified property.--For purposes of this 
     paragraph, the term `eligible qualified property' means 
     qualified property under paragraph (2), except that in 
     applying paragraph (2) for purposes of this paragraph--
       ``(i) `March 31, 2008' shall be substituted for `December 
     31, 2007' each place it appears in subparagraph (A) and 
     clauses (i) and (ii) of subparagraph (E) thereof,
       ``(ii) `April 1, 2008' shall be substituted for `January 1, 
     2008' in subparagraph (A)(iii)(I) thereof, and
       ``(iii) only adjusted basis attributable to manufacture, 
     construction, or production--

       ``(I) after March 31, 2008, and before January 1, 2010, and
       ``(II) after December 31, 2010, and before January 1, 2013, 
     shall be taken into account under subparagraph (B)(ii) 
     thereof.

       ``(D) 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).
       ``(E) 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 making an election under subparagraph (A) and 
     which is a partner in a partnership, for purposes of 
     determining such corporation's distributive share of 
     partnership items under section 702--

       ``(I) paragraph (1) shall not apply to any eligible 
     qualified property, and
       ``(II) the applicable depreciation method used under this 
     section with respect to such 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 one corporation (or by 
     corporations treated as 1 taxpayer under subparagraph 
     (B)(iii)), for purposes of subparagraph (B), each partner 
     shall take into account its distributive share of the amounts 
     determined by the partnership under subclauses (I) and (II) 
     of clause (i) of such subparagraph for the taxable year of 
     the partnership ending with or within the taxable year of the 
     partner. The preceding sentence shall apply only to amounts 
     determined with respect to property placed in service after 
     December 31, 2011.
       ``(iv) Special rule for passenger aircraft.--In the case of 
     any passenger aircraft, the written binding contract 
     limitation under paragraph (2)(A)(iii)(I) shall not apply for 
     purposes of subparagraphs (B)(i)(I) and (C).''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to taxable years ending after December 31, 2011.
       (3) Transitional rule.--In the case of a taxable year 
     beginning before January 1, 2012, and ending after December 
     31, 2011, the bonus depreciation amount determined under 
     paragraph (4) of section 168(k) of the Internal Revenue Code 
     of 1986 for such year shall be the sum of--
       (A) such amount determined under such paragraph as in 
     effect on the date before the date of enactment of this Act--
       (i) taking into account only property placed in service 
     before January 1, 2012, and
       (ii) multiplying the limitation under subparagraph (C)(ii) 
     of such paragraph (as so in effect) by a fraction the 
     numerator of which is the number of days in the taxable year 
     before January 1, 2012, and the denominator of which is the 
     number of days in the taxable year, and
       (B) such amount determined under such paragraph as amended 
     by this Act--
       (i) taking into account only property placed in service 
     after December 31, 2011, and
       (ii) multiplying the limitation under subparagraph (B)(ii) 
     of such paragraph (as so in effect) by a fraction the 
     numerator of which is the number of days in the taxable year 
     after December 31, 2011, and the denominator of which is the 
     number of days in the taxable year.

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