ELIMINATION OF OBSOLETE PROVISIONS IN SECTION 167.

SEC. 11812. ELIMINATION OF OBSOLETE PROVISIONS IN SECTION 167. (a) General Rule.— Section 167 is amended— (1) by striking subsections (b), (c), (d), (e), (f), (j), (k), (1), (m), (p), and (q) and by redesignating subsections (g), (h), (r), and (s) as subsections (c), (d), (e), and (f), respectively, and (2) by inserting after subsection (a) the following new subsection: “(b) Cross Reference.— “For determination of depreciation deduction in case of property to which section 168 applies, see section 168.” (b) Conforming Amendments.— (1) Subsection (e) of section 167 (as redesignated by subsection (a)) is amended by striking “(h)” each place it appears in paragraphs (3)(B) and (4)(B) and inserting “(d)”. (2) (A) Subparagraph (A) of section 168(e)(2) is amended to read as follows: “(A) Residential rental property.— “(i) Residential rental property.— The term ‘residential rental property’ means any building or structure if 80 percent or more of the gross rental income from such building or structure for the taxable year is rental income from dwelling units. “(ii) Definitions.— For purposes of clause (i)— “(I) the term ‘dwelling unit’ means a house or apartment used to provide living accommodations in a building or structure, but does not include a unit in a hotel, motel, or other establishment more than one-half of the units in which are used on a transient basis, and “(II) if any portion of the building or structure is occupied by the taxpayer, the gross rental income from such building or structure shall include the rental value of the portion so occupied.” 104 STAT. 1388–535 (B) Paragraph (10) of section 168(i) is amended to read as follows: “(10) Public utility property.— The term ‘public utility property’ means property used predominantly in the trade or business of the furnishing or sale of— “(A) electrical energy, water, or sewage disposal services, “(B) gas or steam through a local distribution system, “(C) telephone services, or other communication services if furnished or sold by the Communications Satellite Corporation for purposes authorized by the Communications Satellite Act of 1962 (47 U.S.C. 701), or “(D) transportation of gas or steam by pipeline, if the rates for such furnishing or sale, as the case may be, have been established or approved by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision thereof.” (C) Paragraph (2) of section 168(f) is amended by striking “section 167(1)(3)(A)” and inserting “subsection (i)(10)”. (D) Paragraph (1) of section 168(i) is amended by adding at the end thereof the following new sentence: “The reference in this paragraph to subsection (m) of section 167 shall be treated as a reference to such subsection as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.” (E) Clause (ii) of section 168(i)(9)(A) is amended by striking “(determined without regard to section 167(1))”. (3) Sections 42(d)(2)(D)(i)(I) and 42(d)(5)(B) are each amended by striking “section 167(k)” and inserting “section 167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)”, (4) Subparagraph (D) of section 56(a)(1) is amended by striking “section 167(1)(3)(A)” and inserting “section 168(i)(10)”. (5) Paragraph (2) of section 312(k) is amended to read as follows: “(2) Exception.— If for any taxable year a method of depreciation was used by the taxpayer which the Secretary has determined results in a reasonable allowance under section 167(a) and which is the unit-of-production method or other method not expressed in a term of years, then the adjustment to earnings and profits for depreciation for such year shall be determined under the method so used (in lieu of the straight line method).” (6) (A) Paragraph (6) of section 381(c) is amended by striking “subsections (b), (j), and (k) of section 167” and inserting “sections 167 and 168”. (B) Subsection (c) of section 381 is amended by striking paragraph (24) and redesignating paragraphs (25) and (26) as paragraphs (24) and (25), respectively. (7) Subparagraph (C) of section 404(a)(1) is amended by striking “section 167Q)(3)(A)(iii)” and inserting “section 168(i)(10)(C)”. (8) Clause (i) of section 460(e)(6)(A) is amended by striking “section 167(k)” and inserting “section 168(e)(2)(A)(ii)”. (9) Subsection (e) of section 642 is amended by striking “167(h)” and inserting “167(d)”. (10) Paragraph (2) of section 1016(a) is amended by striking “under section 167(b)(D” and inserting “under the straight line method”. 104 STAT. 1388–536 (11) Subsection (a) of section 1250 is amended by redesignating paragraph (4) as paragraph (5) and by inserting after paragraph (3) the following new paragraph: “(4) Special rule.—For purposes of this subsection, any reference to section 167(k) or 1676)(2)(8) shall be treated as a reference to such section as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990.” (12) Paragraph (4) of section 1250(b) is amended by striking “167(k)” each place it appears and inserting “167(k) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990)”. (13) Subparagraph (B) of section 7701(e)(5) is amended by inserting before the period at the end thereof the following: “(as in effect on the day before the date of the enactment of the Revenue Reconcilation Act of 1990)”, (c) Effective Date.— (1) In general.— Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after the date of the enactment of this Act. (2) Exception.— The amendments made by this section shall not apply to any property to which section 168 of the Internal Revenue Code of 1986 does not apply by reason of subsection (f)(5) thereof. (3) Exception for previously grandfather expenditures.— The amendments made by this section shall not apply to rehabilitation expenditures described in section 252(f)(5) of the Tax Reform Act of 1986 (as added by section 1002(1)(31) of the Technical and Miscellaneous Revenue Act of 1988).