INCREASE AND EXTENSION OF BONUS DEPRECIATION.

SEC. 201. INCREASE AND EXTENSION OF BONUS DEPRECIATION.(a) In General.—Section 168(k) (relating to special allowance for certain property acquired after September 10, 2001, and before September 11, 2004) is amended by adding at the end the following new paragraph:“(4) 50-percent bonus depreciation for certain property.—“(A) In general.—In the case of 50-percent bonus depreciation property—“(i) paragraph (1)(A) shall be applied by substituting ‘50 percent’ for ‘30 percent’, and“(ii) except as provided in paragraph (2)(C), such property shall be treated as qualified property for purposes of this subsection.“(B) 50-percent bonus depreciation property.—For purposes of this subsection, the term ‘50-percent bonus depreciation property’ means property described in paragraph (2)(A)(i)—“(i) the original use of which commences with the taxpayer after May 5, 2003, “(ii) which is acquired by the taxpayer after May 5, 2003, and before January 1, 2005, but only if no written binding contract for the acquisition was in effect before May 6, 2003, and “(iii) which is placed in service by the taxpayer before January 1, 2005, or, in the case of property described in paragraph (2)(B) (as modified by subparagraph (C) of this paragraph), before January 1, 2006.“(C) Special rules.—Rules similar to the rules of subparagraphs (B) and (D) of paragraph (2) shall apply for purposes of this paragraph; except that references to September 10, 2001, shall be treated as references to May 5, 2003.“(D) Automobiles.—Paragraph (2)(E) shall be applied by substituting ‘$7,650’ for ‘$4,600’ in the case of 50-percent bonus depreciation property.“(E) Election of 30-percent bonus.—If a taxpayer makes an election under this subparagraph with respect to any class of property for any taxable year, subparagraph (A)(i) shall not apply to all property in such class placed in service during such taxable year.”. (b) Extension of Certain Dates for 30-Percent Bonus Depreciation Property.—(1) Portion of basis taken into account.—(A) Subparagraphs (B)(ii) and (D)(i) of section 168(k)(2) are each amended by striking “September 11, 2004” each place it appears in the text and inserting “January 1, 2005”.117 STAT. 757(B) Clause (ii) of section 168(k)(2)(B) is amended by striking “pre-september 11, 2004” in the heading and inserting “pre-january 1, 2005”.(2) Acquisition date.—Clause (iii) of section 168(k)(2)(A) is amended by striking “September 11, 2004” each place it appears and inserting “January 1, 2005”.(3) Election.—Clause (iii) of section 168(k)(2)(C) is amended by adding at the end the following: “The preceding sentence shall be applied separately with respect to property treated as qualified property by paragraph (4) and other qualified property.”.(c) Conforming Amendments.—(1) The subsection heading for section 168(k) is amended by striking “September 11, 2004” and inserting “January 1, 2005”.(2) The heading for clause (i) of section 1400L(b)(2)(C) is amended by striking “30-percent additional allowance property” and inserting “Bonus depreciation property under section 168(k)”.(d) Effective Date.—The amendments made by this section shall apply to taxable years ending after May 5, 2003.