[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5141 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 5141
To amend the Internal Revenue Code of 1986 to encourage investment in
high productivity property, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 28, 2008
Mr. English of Pennsylvania introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to encourage investment in
high productivity property, and for other purposes.
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 ``Job Creation Economic Stimulus Act
of 2008''.
SEC. 2. ADOPTION OF THE HIGH PRODUCTIVITY INVESTMENT DEDUCTION.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to itemized deductions for
individuals and corporations) is amended by inserting after section 168
the following new section:
``SEC. 168A. HIGH PRODUCTIVITY INVESTMENT DEDUCTION.
``(a) Treatment as Expenses.--A taxpayer may elect to treat the
cost of any high productivity property as an expense not chargeable to
capital account. Any cost so treated shall be allowed as a deduction in
the taxable year in which the high productivity property is placed in
service.
``(b) Definition of High Productivity Property.--
``(1) In general.--Except as provided in paragraph (3), the
term `high productivity property' means any--
``(A) computer,
``(B) computer related peripheral equipment,
``(C) computer based machinery,
``(D) electronic diagnostic equipment,
``(E) electronic control equipment,
``(F) other electronic, electromechanical, laser or
computer based equipment,
``(G) computer software,
``(H) equipment used in the manufacture of
semiconductors,
``(I) high technology medical equipment,
``(J) advanced technology communications equipment,
``(K) optical fiber and photonics equipment,
``(L) advanced environmental products,
``(M) advanced life science products, or
``(N) new high productivity assets.
``(2) Definitions.--For purposes of this subsection:
``(A) Computer.--The term `computer' means a
programmable electronically activated device which--
``(i) is capable of accepting information,
applying prescribed processes to the
information, and supplying the results of those
processes, and
``(ii) consists of a central processing
unit containing extensive storage, logic,
arithmetic and control capabilities.
``(B) Computer related peripheral equipment.--The
term `computer related peripheral equipment' means any
auxiliary machine or other equipment (whether on-line
or off-line) which is designed to be placed under the
control of the central processing unit of a computer
(as determined without regard to whether such machine
or equipment is an integral part of other property
which is not a computer).
``(C) Computer based machinery.--The term `computer
based machinery' means any machine which--
``(i) cuts, forms, shapes, drills, bores,
mixes, paints, seals, welds, or otherwise
transforms material, or
``(ii) handles, conveys, assembles, or
packages materials or products,
by responding to electronically stored information and
programmed commands.
``(D) Electronic diagnostic equipment.--The term
`electronic diagnostic equipment' means equipment that
uses electronic components to sense or monitor
location, size, volume, surface characteristics,
pressure, temperature, speed, chemical composition, or
other similar characteristics.
``(E) Electronic control equipment.--The term
`electronic control equipment' means equipment that
electronically controls pressure, temperature, size,
volume, composition purity or other similar
characteristics.
``(F) High technology medical equipment.--The term
`high technology medical equipment' means any
electronic, electromechanical, or computer-based high
technology equipment used in the screening, monitoring,
observation, diagnosis, or treatment of patients in a
laboratory, medical, or hospital environment.
``(G) Advanced technology communications
equipment.--The term `advanced technology
communications equipment' means equipment used in the
transmission or reception of voice, data, video,
paging, messaging, or other communications services
that are delivered using packet technology. A packet is
a unit of data, or sequence of binary digits, that is
routed between an origin and a destination on a packet-
switched network.
``(H) Optical fiber and photonics equipment.--The
term `optical fiber and photonics equipment' means
optical fiber and the equipment and materials used to
generate, manipulate and direct light particles over
such fiber.
``(I) Advanced environmental products.--The term
`advanced environmental product' means any high cell
density ceramic or other device used for the control of
nitrogen oxide and particulate emissions.
``(J) Advanced life sciences products.--The term
`advanced life sciences product' means any polymer,
ceramic or high-purity glass product used in biological
research.
``(K) New high productivity assets.--
``(i) In general.--The term `new high
productivity assets' means any asset utilizing
1 or more technological or scientific processes
which were not in common commercial use before
January 1, 2007.
``(ii) Determinations.--The Secretary shall
establish procedures pursuant to which
taxpayers can seek a public ruling that a
particular class of assets qualifies as new
high productivity assets. The procedures shall
require the Secretary to provide a
determination within 90 days of receipt of a
properly completed request for a public ruling.
``(3) Excluded property.--The term `high productivity
property' shall not include--
``(A) an entire car, locomotive, aircraft, ship or
other vehicle solely because the vehicle is controlled
in whole or part by a computer or other electronic
equipment,
``(B) any equipment of a kind used primarily for
entertainment or amusement of the user, and
``(C) typewriters, calculators, copiers,
duplication equipment, and other similar equipment.
``(c) Election.--An election under this section for any taxable
year shall--
``(1) be made on an asset by asset basis, and
``(2) be made on the taxpayer's return of the tax imposed
by this chapter for the taxable year.
``(d) Special Rules.--
``(1) Cost.--For purposes of this section, the cost of
property does not include so much of the basis of such property
as is determined by reference to the basis of other property
held at any time by the person acquiring such property.
``(2) Antichurning rules.--
``(A) In general.--This section shall not apply to
any property acquired by the taxpayer after December
31, 2007, if--
``(i) the property was owned or used at any
time during the period beginning on January 1,
2007, and ending on December 31, 2007, by the
taxpayer or a related person,
``(ii) the property was owned or used at
any time during the period described in clause
(i), and, as part of the transaction, the user
of the property does not change,
``(iii) the taxpayer leases such property
to a person (or a person related to such
person) who owned or used such property at any
time during the period described in clause (i),
or
``(iv) the property is acquired in a
transaction as part of which the user of such
property does not change and the property was
acquired from a person to which clause (ii) or
clause (iii) applies.
``(B) Applicable cost recovery rules.--Section 168
shall apply to any property to which this section does
not apply by reason of this paragraph.
``(C) Special rules.--For purposes of this
paragraph--
``(i) property shall not be treated as
owned before it is placed in service, and
``(ii) whether the user of a property
changes will be determined in accordance with
regulations prescribed by the Secretary.
``(3) Recapture in certain cases.--The Secretary shall, by
regulations, provide for the recapturing the benefit under any
deduction allowable under subsection (a) with respect to any
property which is not used predominantly in a trade or business
at any time.
``(4) Alternative depreciation system applies.--The
election under subsection (a) may not be made with respect to
property which at any time during the taxable year in which
such property is placed in service is--
``(A) described in paragraph (1) of section
168A(g), or
``(B) `listed property' `not predominantly used in
a qualified business use' as such terms apply for
purposes of paragraph (1) of 280F(b).
``(e) Termination.--This section shall only apply to property which
is--
``(1) acquired by the taxpayer after December 31, 2007, and
before January 1, 2009, but only if no written binding contract
for the acquisition was in effect before January 1, 2008, or
``(2)(A) acquired by the taxpayer pursuant to a written
binding contract which was entered into after December 31,
2007, and before January 1, 2009, and
``(B) placed in service in taxable years beginning after
December 31, 2009.''.
(b) Conforming Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of such Code is amended by adding after
section 168 the following new item:
``Sec. 168A. High productivity investment deduction.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2007, with
respect to taxable years beginning after such date.
SEC. 3. 50 PERCENT ALLOWANCE FOR DEPRECIATION FOR CERTAIN PROPERTY
ACQUIRED DURING 2008.
(a) In General.--Paragraph (4) of section 168(k) of the Internal
Revenue Code of 1986 (relating to 50-percent bonus for certain
property) is amended--
(1) by striking ``May 5, 2003'' each place it appears and
inserting ``December 31, 2007'',
(2) by striking ``January 1, 2005'' each place it appears
and inserting ``January 1, 2009'',
(3) by striking ``May 6, 2003'' in subparagraph (B)(ii)(I)
and inserting ``January 1, 2008'',
(4) by striking ``January 1, 2006'' in subparagraph
(B)(iii) and inserting ``January 1, 2010'', and
(5) by striking ``of 30-percent bonus'' in the heading for
subparagraph (E).
(b) Repeal of Basis Limitation for Certain Property.--Subparagraph
(B) of section 168(k)(2) of such Code is amended by striking clause
(ii) and redesignating clause (iii) as clause (ii).
(c) Syndications.--Paragraph (4) of section 168(k) of such Code
(relating to 50-percent depreciation for certain property) is amended
by adding at the end the following:
``(F) Syndications.--For purposes of applying
paragraph (2)(A)(ii) by reason of this paragraph, if
property--
``(i) is treated as originally placed in
service after December 31, 2007, either
directly or by a lessor of such property or
pursuant to paragraph (2)(D)(ii), and
``(ii) is sold within 6 months after such
property is so placed in service,
such property shall be treated as originally placed in
service not earlier than the date of such sale.''.
(d) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to property placed in service in taxable years beginning
after December 31, 2007.
(2) Exception for certain property.--The amendments made by
this section shall not apply to any property to which section
105 of the Gulf Opportunity Zone Act of 2005 applies.
SEC. 4. DEPRECIATION RULES NOT MODIFIED FOR PURPOSES OF ALTERNATIVE
MINIMUM TAX.
(a) Determination of Alternative Taxable Income.--Paragraph (1) of
section 56(a) of the Internal Revenue Code of 1986 (relating to
depreciation) is amended by adding at the end the following new
subparagraph:
``(E) Termination.--This paragraph shall not apply
to property placed in service in a taxable year
beginning in 2008 or 2009.''.
(b) Determination of Adjusted Current Earnings.--Subparagraph (A)
of section 56(g)(4) of such Code (relating to depreciation) is amended
by adding at the end the following new clause:
``(vi) Termination.--This subparagraph
shall not apply to property placed in service
in a taxable year beginning in 2008 or 2009.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2007, in taxable
years beginning after such date.
SEC. 5. LONG-TERM CONTRACT ACCOUNTING.
(a) In General.--Section 168(k)(2) of the Internal Revenue Code of
1986 is amended by adding after subparagraph (G) the following new
subparagraph:
``(H) Long-term contract accounting.--The
percentage of completion method under section 460 shall
be applied as if this subsection had not been
enacted.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to property placed in service after the date of the enactment of
this Act in taxable years ending after such date.
SEC. 6. LONG-TERM UNUSED CREDITS ALLOWED AGAINST MINIMUM TAX.
(a) In General.--Subsection (c) of section 53 of the Internal
Revenue Code of 1986 (relating to limitation) is amended by adding at
the end the following new paragraph:
``(2) Special rule for corporations with long-term unused
credits.--
``(A) In general.--If a corporation to which
section 56(g) applies has a long-term unused minimum
tax credit for a taxable year, the credit allowable
under subsection (a) for the taxable year shall not
exceed the greater of--
``(i) the limitation determined under
paragraph (1) for the taxable year, or
``(ii) the least of the following for the
taxable year:
``(I) The sum of the tax imposed by
section 55 and the regular tax reduced
by the sum of the credits allowed under
subparts A, B, D, E, and F of this
part.
``(II) The long-term unused minimum
tax credit.
``(III) The sum of--
``(aa) 50 percent of
qualified investment, plus
``(bb) the qualified
investment carryover to the
taxable year.
``(B) Long-term unused minimum tax credit.--For
purposes of this paragraph--
``(i) In general.--The long-term unused
minimum tax credit for any taxable year is the
portion of the minimum tax credit determined
under subsection (b) attributable to the
adjusted net minimum tax for taxable years
beginning after 1986 and ending before the 3rd
taxable year immediately preceding the taxable
year for which the determination is being made.
``(ii) First-in, first-out ordering rule.--
For purposes of clause (i), credits shall be
treated as allowed under subsection (a) on a
first-in, first-out basis.
``(C) Qualified investment and qualified investment
carryover.--For purposes of this paragraph--
``(i) Qualified investment.--Qualified
investment is property described in section
1245(a)(3) placed in service in the taxable
year.
``(ii) Qualified investment carryover.--The
qualified investment carryover is the amount by
which 50 percent of qualified investment
exceeds the amount of tax in paragraph
(2)(A)(ii)(I). The qualified investment
carryover may be carried only to the first
taxable year following the current year.
``(D) Termination.--Subparagraph (A) shall not
apply to any taxable year beginning after December 31,
2008.''.
(b) Conforming Amendments.--Section 53(c) of such Code is amended--
(1) by striking ``The'' and inserting the following:
``(1) In general.--The''; and
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively.
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