public utilities commission - we are down for … · public utilities commission 505 van ness...

STATE OF CALIFORNIA Edmund G. Brown Jr., Governor

PUBLIC UTILITIES COMMISSION 505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

February 11, 2016

Advice Letter 207-G/3337-E

Russell G. Worden Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, CA 91770

SUBJECT: Changes to The Income Tax Component of Contribution Tax Factors

Dear Mr. Worden: Advice Letter 207-G/3337-E is effective as of January 1, 2016.

Sincerely,

Edward Randolph Director, Energy Division

P.O. Box 800 8631 Rush Street Rosemead, California 91770 (626) 302-4177 Fax (626) 302-4829

Russell G. Worden Managing Director, State Regulatory Operations

December 30, 2015

ADVICE 207-G/3337-E (U 338-E)

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA ENERGY DIVISION

SUBJECT: Changes to the Income Tax Component of Contribution Tax Factors

Southern California Edison Company (SCE) hereby submits for filing the following changes to its tariffs. The revised tariff sheets are listed on Attachment A and are attached hereto.

PURPOSE

This advice filing notifies the California Public Utilities Commission (Commission or CPUC) that the Income Tax Component of Contribution (ITCC) Tax Factor currently reflected in SCE’s Electric Preliminary Statement Part M, Income Tax Component of Contribution Provision, and Gas Preliminary Statement Part H, Income Tax Component of Contribution Provision, as 0.35 (35 percent) has been changed (1) retroactively to 0.22 (22 percent) for the time period of January 1, 2015 through December 31, 2015, (2) to 0.22 (22 percent) for the time period of January 1, 2016 through December 31, 2017, (3) to 0.24 (24 percent) for the time period of January 1, 2018 through December 31, 2018, (4) to 0.27 (27 percent) for the time period of January 1, 2019 through December 31, 2019, and (5) to revert back to 35 percent for the time period of January 1, 2020 and beyond due to the Protecting Americans from Tax Hikes Act of 2015 (Act). As such, SCE will be providing applicable refunds to customers and agencies that have paid the 35 percent ITCC Tax Factor during 2015.

BACKGROUND

SCE’s Electric Preliminary Statement Part M and Gas Preliminary Statement Part H provide that Contributions in Aid of Construction and Advances for Construction (Contributions) consist of two components: the ITCC and the Balance of the Contribution (Balance of Contribution). The ITCC is calculated by multiplying the Balance of Contribution by the Tax Factor. The Tax Factor is established using Method 5 as set forth in and pursuant to Decision (D.)87-09-026 and D.87-12-028 in Order Instituting Investigation (OII) 86-11-019.

ADVICE 207-G/3337-E (U 338-E) - 2 - December 30, 2015

SCE filed Advice 196-G/3158-E to reflect an ITCC Tax Factor of 22 percent for Contributions received by SCE between January 1, 2014 and December 31, 2014. The 35 percent Tax Factor was applicable to Contributions received by SCE on or after January 1, 2015. This advice filing was filed to reflect the implications from the extension of the Federal Bonus Depreciation Provisions of the Internal Revenue Code (IRC) made by the Tax Increase Prevention Act of 2014 that was signed into law on December 19, 2014, as well as to reflect the expiration of the bonus depreciation provisions as of January 1, 2015.

On December 18, 2015, President Obama signed into law legislation (H.R. 2029), the Act, which extends a number of temporary tax incentives that had lapsed at the close of 2014. Specifically, the applicable portion of the Act, attached hereto as Attachment B, extended the Federal 50 percent Bonus Depreciation Provisions of the IRC retroactively from January 1, 2015 through December 31, 2017, provides a 40 percent Bonus Depreciation Provision effective January 1, 2018 through December 31, 2018, and a 30 percent Bonus Depreciation Provision effective January 1, 2019 through December 31, 2019. Bonus Depreciation is set to expire on January 1, 2020. As a result, the ITCC Tax Factor will be (1) 22 percent for electric and gas Contributions received from January 1, 2015 through December 31, 2017, (2) 24 percent for electric and gas Contributions received from January 1, 2018 through December 31, 2018, and (3) 27 percent for electric and gas Contributions received from January 1, 2019 through December 31, 2019. The ITCC Tax Factor will revert back to 35 percent for electric and gas Contributions received from January 1, 2020 and beyond. The ITCC Tax Factors have been calculated, as set forth in Attachment C, by using Method 5 as described in D.87-09-026 and D.87-12-028 in OII 86-11-019.

PROPOSED TARIFF CHANGES

This advice filing revises Section 3.a of Electric Preliminary Statement Part M and Section 3.a of Gas Preliminary Statement Part H to reflect the revised ITCC Tax Factors as described above applicable to Contributions received on or after January 1, 2015.

Under D.87-09-026, SCE is obligated to collect the ITCC pursuant to the appropriate ITCC Tax Factors and, therefore, requests prompt Energy Division disposition of this advice filing.

No cost information is required for this advice filing.

Except as noted above, this filing will not increase or decrease any rate or charge, conflict with any other schedules or rules, or cause the withdrawal of service.

TIER DESIGNATION

Pursuant to General Order (GO) 96-B, Energy Industry Rule 5.1(1) and 5.1(3), this advice letter is submitted with a Tier 1 designation.


EFFECTIVE DATE

Consistent with Section 7.3.1 of GO 96-B, this advice filing will become effective as of January 1, 2016.

NOTICE

Anyone wishing to protest this advice filing may do so by letter via U.S. Mail, facsimile, or electronically, any of which must be received no later than 20 days after the date of this advice filing. Protests should be submitted to:

CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102 E-mail: [email protected]

Copies should also be mailed to the attention of the Director, Energy Division, Room 4004 (same address above).

In addition, protests and all other correspondence regarding this advice letter should also be sent by letter and transmitted via facsimile or electronically to the attention of:

Russell G. Worden Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Facsimile: (626) 302-4829 E-mail: [email protected]

Michael R. Hoover Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail: [email protected]

There are no restrictions on who may file a protest, but the protest shall set forth specifically the grounds upon which it is based and must be received by the deadline shown above.

In accordance with General Rule 4 of GO 96-B, SCE is serving copies of this advice filing to the interested parties shown on the attached Electric and Gas GO 96-B service lists.


Address change requests to the GO 96-B service lists should be directed by electronic mail to [email protected] or at (626) 302-3719. For changes to all other service lists, please contact the Commission’s Process Office at (415) 703-2021 or by electronic mail at [email protected].

Further, in accordance with Public Utilities Code Section 491, notice to the public is hereby given by filing and keeping the advice filing at SCE’s corporate headquarters. To view other SCE advice letters filed with the Commission, log on to SCE’s web site at https://www.sce.com/wps/portal/home/regulatory/advice-letters.

For questions, please contact Alfred Lopez at (626) 302-8797 or Grace Chi at (626) 302-3397 or by electronic mail at [email protected] or [email protected].

Southern California Edison Company

/s/ Russell G. Worden Russell G. Worden

RGW:al/gc/ep:cm Enclosures

CALIFORNIA PUBLIC UTILITIES COMMISSION

ADVICE LETTER FILING SUMMARY ENERGY UTILITY

MUST BE COMPLETED BY UTILITY (Attach additional pages as needed)

Company name/CPUC Utility No.: Southern California Edison Company (U 338-E)

Utility type: Contact Person: Darrah Morgan

ELC GAS Phone #: (626) 302-2086

PLC HEAT WATER E-mail: [email protected]

E-mail Disposition Notice to: [email protected]

EXPLANATION OF UTILITY TYPE

ELC = Electric GAS = Gas PLC = Pipeline HEAT = Heat WATER = Water

(Date Filed/ Received Stamp by CPUC)

Advice Letter (AL) #: 207-G/3337-E Tier Designation: 1

Subject of AL: Changes to the Income Tax Component of Contribution Tax Factors

Keywords (choose from CPUC listing): Taxes

AL filing type: Monthly Quarterly Annual One-Time Other

If AL filed in compliance with a Commission order, indicate relevant Decision/Resolution #:

Does AL replace a withdrawn or rejected AL? If so, identify the prior AL:

Summarize differences between the AL and the prior withdrawn or rejected AL:

Confidential treatment requested? Yes No

If yes, specification of confidential information: Confidential information will be made available to appropriate parties who execute a nondisclosure agreement. Name and contact information to request nondisclosure agreement/access to confidential information:

Resolution Required? Yes No

Requested effective date: 1/1/2016 No. of tariff sheets: -6-

Estimated system annual revenue effect: (%):

Estimated system average rate effect (%):

When rates are affected by AL, include attachment in AL showing average rate effects on customer classes (residential, small commercial, large C/I, agricultural, lighting).

Tariff schedules affected: See Gas and Electric Attachment A

Service affected and changes proposed1:

Pending advice letters that revise the same tariff sheets: N/A

1 Discuss in AL if more space is needed.

Protests and all other correspondence regarding this AL are due no later than 20 days after the date of

this filing, unless otherwise authorized by the Commission, and shall be sent to:

CPUC, Energy Division Attention: Tariff Unit 505 Van Ness Avenue San Francisco, California 94102

E-mail: [email protected]

Russell G. Worden Managing Director, State Regulatory Operations Southern California Edison Company 8631 Rush Street Rosemead, California 91770 Facsimile: (626) 302-4829 E-mail: [email protected] Michael R. Hoover Director, State Regulatory Affairs c/o Karyn Gansecki Southern California Edison Company 601 Van Ness Avenue, Suite 2030 San Francisco, California 94102 Facsimile: (415) 929-5544 E-mail: [email protected]

Gas Tariff Sheets

Public Utilities Commission 207-G Attachment A

Cal. P.U.C. Sheet No. Title of Sheet

Cancelling Cal. P.U.C. Sheet No.

1

Revised 1891-G Preliminary Statement Part H Revised 1727-G Revised 1892-G Preliminary Statement Part H Revised 1396-G Revised 1893-G Table of Contents Revised 1846-G

Southern California Edison Revised Cal. PUC Sheet No. 1891-G

Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. 1727-G

PRELIMINARY STATEMENT Sheet 1

(Continued)

(To be inserted by utility) Issued by (To be inserted by Cal. PUC)

Advice 207-G R.O. Nichols Date Filed Dec 30, 2015

Decision Senior Vice President Effective Jan 1, 2016

1H13 Resolution

H. INCOME TAX COMPONENT OF CONTRIBUTION PROVISION

1. General. All Contributions in Aid of Construction and Advances For Construction

(Contributions) made to SCE pursuant to its tariffs shall include a cost component to

cover SCE’s estimated liability for Federal Income Tax resulting there from. California

Corporate Franchise Tax (CCFT) shall be collected beginning January 10, 1992.

2. Definitions.

a. Contributions: Contributions shall include, but are not limited to, cash,

services, facilities, labor, property, and income taxes thereon provided to SCE

by a person or agency. The value of all contributions shall be based on SCE’s

estimates. Contributions shall consist of two components as follows:

(1) Income Tax Component of Contribution (ITCC); and

(2) The balance of the Contribution (Balance of Contribution).

b. Government Agency: For purposes of administering this part of the

Preliminary Statement, a Government Agency shall be a California state,

county, or local government agency.

c. Public Benefit: Where, in the opinion of SCE, a benefit to the public as a

whole is clearly shown by the Government Agency making the Contribution

for a project.

3. Determination of ITCC.

a. The ITCC shall be calculated by multiplying the Balance of the Contribution by

the applicable Tax Factor, as follows. For Contributions received by SCE on

or after January 1, 2016 through December 31, 2017, the Tax Factor shall be

0.22 (22%); for Contributions received by SCE on or after January 1, 2018

through December 31, 2018, the Tax Factor shall be 0.24 (24%); for

Contributions received by SCE on or after January 1, 2019 through December

31, 2019, the Tax Factor shall be 0.27 (27%); and, for Contributions received

by SCE on or after January 1, 2020, the Tax Factor shall be 0.35 (35%).

Contributions received prior to the effective date of Advice 207-G will be

subject to the applicable ITCC factors approved by the California Public

Utilities Commission.1/

1/ Pursuant to the Protecting Americans from Tax Hikes Act of 2015, which retroactively

extended the Federal 50% Bonus Depreciation Provisions of the Internal Revenue Code

through December 31, 2015, the Tax Factor of 0.22 (22%) is applicable to Contributions

received by SCE between January 1, 2015 and December 31, 2015.

(C)

|

|

|

|

|

|

(C)

(L)

(N) | | (N)




(Continued)




2C12 Resolution

H. INCOME TAX COMPONENT OF CONTRIBUTION PROVISION (Continued) 3. Determination of ITCC. (Continued)

b. The tax factors included herein are established using Method 5 as set forth in and pursuant to the Commission's Decision No. 87-09-026 as modified by Decision No. 87-12-028. Should the Internal Revenue Service (IRS) deem Method 5 to be a violation of the tax normalization rules, any penalties, interest or taxes incurred by SCE shall be recovered through general rates.

4. Applicability. The ITCC shall apply to contributions under the tariffs, including but not

limited to, Rules 13, 15, and 16. 5. State Taxes. Under the current California state law, Contributions are not taxable at

the time of the Contribution. In the event legislation is enacted to conform state law to federal law, SCE may increase the amount it collects from the Contributor to include its estimate of the tax resulting therefrom. In the event state law is applied retroactively, SCE may collect such tax for the retroactive period through general rates.

6. Interest Rate. When interest is payable under this Part of the Preliminary Statement

by the Contributor to SCE or by SCE to the Contributor, the Interest Rate shall be 1/12 of the most recent month's interest rate on Commercial Paper (prime, three months), published in the Federal Reserve Statistical Release, G.13. Should publication of the interest rate on Commercial Paper (prime, three months) be discontinued, interest will so accrue at the rate of 1/12 of the most recent month's interest rate on Commercial Paper, which most closely approximates the rate that was discontinued and which is published in the Federal Reserve Statistical Release, G.13, or its successor publication.

(L) | | | (L)



1846-G

TABLE OF CONTENTS Sheet 1

(Continued)




1H9 Resolution

Cal. P.U.C.

Sheet No.

TITLE PAGE .................................................................................................................................... 131-G

TABLE OF CONTENTS - RATE SCHEDULES ........................................................................... 1893-G

TABLE OF CONTENTS - LIST OF CONTRACTS AND DEVIATIONS ...................................... 1893-G

TABLE OF CONTENTS - RULES ................................................................................................. 1830-G

TABLE OF CONTENTS - SAMPLE FORMS ............................................................................... 1830-G

PRELIMINARY STATEMENT:

A. Territory Served by the Utility ............................................................................................... 1388-G

B. Types and Classes of Service ............................................................................................. 1388-G

C. Procedure to Obtain Service ................................................................................................ 1388-G

D. Interest ................................................................................................................................... 1388-G

E. Symbols ................................................................................................................................ 1388-G

F. Baseline Service .......................................................................................................... 1389-1826-G

G. Santa Catalina Island Gas Cost Adjustment Clause (GCAC) ................. 1391-1392-1393-1841-G

H. Income Tax Component of Contributions Provision ................................................... 1891-1892-G

SERVICE AREA MAP ......................................................................................................................... 3-G

RATE SCHEDULES

Schedule Cal. P.U.C.

No. Title of Sheet No.

DE Domestic Service to Utility Employees .................................................................. 1398-G

G-1 Domestic Service ........................................................................................... 1877-1843-G

G-1-CARE Domestic Service ........................................................................................... 1844-1132-G

G-2 General Service ............................................................................................. 1878-1401-G

G-OBR Santa Catalina Island On-Bill Repayment Pilot Program………1632-1633-1634-1635-G

............................................... ………………………………1636-1637-1638-1813-1814-G

GM Domestic Service, Multifamily Accommodation ..................................................... 1402-G

G-SE Service Establishment Charge ............................................................................... 1403-G

RF-G Surcharge to Fund Public Utilities Commission Reimbursement Fee .................. 1879-G

LIST OF CONTRACTS AND DEVIATIONS

Cal. P.U.C.

Sheet No.

List of Contracts and Deviations ...................................................................................................... 696-G

(T)

(T)

Electric Tariff Sheets

Public Utilities Commission 3337-E Attachment A

Cal. P.U.C. Sheet No. Title of Sheet

Cancelling Cal. P.U.C. Sheet No.

1

Revised 58419-E Preliminary Statement Part M Revised 56077-E Revised 58420-E Preliminary Statement Part M Revised 27632-E Revised 58421-E Table of Contents Revised 57729-E

Southern California Edison Revised Cal. PUC Sheet No. 58419-E

Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. 56077-E


(Continued)


Advice 3337-E R.O. Nichols Date Filed Dec 30, 2015


1H16 Resolution

M. INCOME TAX COMPONENT OF CONTRIBUTION PROVISION

1. General. All Contributions in Aid of Construction and Advances For Construction (Contributions) made to SCE pursuant to its tariffs shall include a cost component to cover SCE's estimated liability for Federal and State Income Tax resulting there from. SCE shall collect the Federal Income Tax on Contributions made on or after February 11, 1987 for unit costs under Rule 15, and January 1, 1987 for all other Contributions. California Corporate Franchise Tax (CCFT) shall be collected beginning January 1, 1992.

2. Definitions.

a. Contributions: Contributions shall include, but are not limited to, cash,

services, facilities, labor, property, and income taxes thereon provided to SCE by a person or agency. The value of all contributions shall be based on SCE's estimates. Contributions shall consist of two components as follows:

(1) Income Tax Component of Contribution (ITCC); and

(2) The balance of the Contribution (Balance of Contribution).

b. Government Agency: For purposes of administering this part of the

Preliminary Statement, a Government Agency shall be a California state, county, or local government agency.

c. Public Benefit: Where, in the opinion of SCE, a benefit to the public as a

whole is clearly shown by the Government Agency making the Contribution for a project.

3. Determination of ITCC.

a. The ITCC shall be calculated by multiplying the Balance of the Contribution

by the applicable Tax Factor, as follows. For Contributions received by SCE on or after January 1, 2016 through December 31, 2017, the Tax Factor shall be 0.22 (22%); for Contributions received by SCE on or after January 1, 2018 through December 31, 2018, the Tax Factor shall be 0.24 (24%); for Contributions received by SCE on or after January 1, 2019 through December 31, 2019, the Tax Factor shall be 0.27 (27%); and, for Contributions received by SCE on or after January 1, 2020, the Tax Factor shall be 0.35 (35%). Contributions received prior to the effective date of Advice 3337-E will be subject to the applicable ITCC factors approved by the California Public Utilities Commission.1/

1/ Pursuant to the Protecting Americans from Tax Hikes Act of 2015, which retroactively extended the Federal 50% Bonus Depreciation Provisions of the Internal Revenue Code through December 31, 2015, the Tax Factor of 0.22 (22%) is applicable to Contributions received by SCE between January 1, 2015 and December 31, 2015.

(C) | | | | | |

(C)

(L)

(N) | | (N)

Southern California Edison Revised Cal. PUC Sheet No. 58420-E

Rosemead, California (U 338-E) Cancelling Revised Cal. PUC Sheet No. 27632-E


(Continued)


Advice 3337-E R.O. Nichols Date Filed Dec 30, 2015


2H16 Resolution

M. INCOME TAX COMPONENT OF CONTRIBUTION PROVISION (Continued)

3. Determination of ITCC. (Continued)

b. The Tax Factor is established using Method 5 as set forth in and pursuant to

the Commission's Decision No. 87-09-026. Should the Internal Revenue

Service (IRS) deem Method 5 to be a violation of the tax normalization rules,

any penalties, interest or taxes incurred by SCE shall be recovered through

general rates.

c. SCE will file an Advice Letter for any changes which would cause an increase

or decrease of five percentage points or more in the ITCC Tax Factor.

4. Applicability. The ITCC shall apply to contributions under the tariffs, including but not

limited to, street and area lighting rate schedules and Rules 2, 13, 14, 15, 16, 20, and

21.

5. Interest Rate. When interest is payable under this Part of the Preliminary Statement by

the Contributor to SCE or by SCE to the Contributor, the Interest Rate shall be 1/12 of

the most recent month's interest rate on Commercial Paper (prime, three months),

published in the Federal Reserve Statistical Release, G.13. Should publication of the

interest rate on Commercial Paper (prime, three months) be discontinued, interest will

so accrue at the rate of 1/12 of the most recent month's interest rate on Commercial

Paper, which most closely approximates the rate that was discontinued and which is

published in the Federal Reserve Statistical Release, G.13, or its successor publication.

(L)

|

|

|

|

|

|

(L)

Attachment B

H. R. 2029

One Hundred Fourteenth Congress of the

United States of America AT THE FIRST SESSION

Begun and held at the City of Washington on Tuesday, the sixth day of January, two thousand and fifteen

An Act Making appropriations for military construction, the Department of Veterans Affairs,

and related agencies for the fiscal year ending September 30, 2016, 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 ‘‘Consolidated Appropriations Act, 2016’’. SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Short title. Sec. 2. Table of contents. Sec. 3. References. Sec. 4. Explanatory statement. Sec. 5. Statement of appropriations. Sec. 6. Availability of funds. Sec. 7. Technical allowance for estimating differences. Sec. 8. Corrections. Sec. 9. Adjustments to compensation.

DIVISION A—AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Agricultural Programs Title II—Conservation Programs Title III—Rural Development Programs Title IV—Domestic Food Programs Title V—Foreign Assistance and Related Programs Title VI—Related Agencies and Food and Drug Administration Title VII—General Provisions

DIVISION B—COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Department of Commerce Title II—Department of Justice Title III—Science Title IV—Related Agencies Title V—General Provisions

DIVISION C—DEPARTMENT OF DEFENSE APPROPRIATIONS ACT, 2016 Title I—Military Personnel Title II—Operation and Maintenance Title III—Procurement Title IV—Research, Development, Test and Evaluation Title V—Revolving and Management Funds Title VI—Other Department of Defense Programs Title VII—Related Agencies Title VIII—General Provisions Title IX—Overseas Contingency Operations/Global War on Terrorism

H. R. 2029—2

DIVISION D—ENERGY AND WATER DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Corps of Engineers—Civil Title II—Department of the Interior Title III—Department of Energy Title IV—Independent Agencies Title V—General Provisions

DIVISION E—FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2016

Title I—Department of the Treasury Title II—Executive Office of the President and Funds Appropriated to the President Title III—The Judiciary Title IV—District of Columbia Title V—Independent Agencies Title VI—General Provisions—This Act Title VII—General Provisions—Government-wide Title VIII—General Provisions—District of Columbia

DIVISION F—DEPARTMENT OF HOMELAND SECURITY APPROPRIATIONS ACT, 2016

Title I—Departmental Management and Operations Title II—Security, Enforcement, and Investigations Title III—Protection, Preparedness, Response, and Recovery Title IV—Research, Development, Training, and Services Title V—General Provisions

DIVISION G—DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Department of the Interior Title II—Environmental Protection Agency Title III—Related Agencies Title IV—General Provisions

DIVISION H—DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Department of Labor Title II—Department of Health and Human Services Title III—Department of Education Title IV—Related Agencies Title V—General Provisions

DIVISION I—LEGISLATIVE BRANCH APPROPRIATIONS ACT, 2016 Title I—Legislative Branch Title II—General Provisions

DIVISION J—MILITARY CONSTRUCTION AND VETERANS AFFAIRS, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Department of Defense Title II—Department of Veterans Affairs Title III—Related Agencies Title IV—General Provisions

DIVISION K—DEPARTMENT OF STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS ACT, 2016

Title I—Department of State and Related Agency Title II—United States Agency for International Development Title III—Bilateral Economic Assistance Title IV—International Security Assistance Title V—Multilateral Assistance Title VI—Export and Investment Assistance Title VII—General Provisions Title VIII—Overseas Contingency Operations/Global War on Terrorism Title IX—Other Matters

DIVISION L—TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS ACT, 2016

Title I—Department of Transportation

H. R. 2029—3

Title II—Department of Housing and Urban Development Title III—Related Agencies Title IV—General Provisions—This Act

DIVISION M—INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2016

DIVISION N—CYBERSECURITY ACT OF 2015

DIVISION O—OTHER MATTERS

DIVISION P—TAX-RELATED PROVISIONS

DIVISION Q—PROTECTING AMERICANS FROM TAX HIKES ACT OF 2015

SEC. 3. REFERENCES.

Except as expressly provided otherwise, any reference to ‘‘this Act’’ contained in any division of this Act shall be treated as referring only to the provisions of that division. SEC. 4. EXPLANATORY STATEMENT.

The explanatory statement regarding this Act, printed in the House of Representatives section of the Congressional Record on or about December 17, 2015 by the Chairman of the Committee on Appropriations of the House, shall have the same effect with respect to the allocation of funds and implementation of divisions A through L of this Act as if it were a joint explanatory statement of a committee of conference. SEC. 5. STATEMENT OF APPROPRIATIONS.

The following sums in this Act are appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2016. SEC. 6. AVAILABILITY OF FUNDS.

Each amount designated in this Act by the Congress for Over-seas Contingency Operations/Global War on Terrorism pursuant to section 251(b)(2)(A)(ii) of the Balanced Budget and Emergency Deficit Control Act of 1985 shall be available (or rescinded, if applicable) only if the President subsequently so designates all such amounts and transmits such designations to the Congress. SEC. 7. TECHNICAL ALLOWANCE FOR ESTIMATING DIFFERENCES.

If, for fiscal year 2016, new budget authority provided in appro-priations Acts exceeds the discretionary spending limit for any category set forth in section 251(c) of the Balanced Budget and Emergency Deficit Control Act of 1985 due to estimating differences with the Congressional Budget Office, an adjustment to the discre-tionary spending limit in such category for fiscal year 2016 shall be made by the Director of the Office of Management and Budget in the amount of the excess but the total of all such adjustments shall not exceed 0.2 percent of the sum of the adjusted discretionary spending limits for all categories for that fiscal year. SEC. 8. CORRECTIONS.

The Continuing Appropriations Act, 2016 (Public Law 114– 53) is amended—

(1) by changing the long title so as to read: ‘‘Making con-tinuing appropriations for the fiscal year ending September 30, 2016, and for other purposes.’’;

(2) by inserting after the enacting clause (before section 1) the following: ‘‘DIVISION A—TSA OFFICE OF INSPEC-TION ACCOUNTABILITY ACT OF 2015’’;

H. R. 2029—799

‘‘(3) in the case of property placed in service after December 31, 2020, and before January 1, 2022, 22 percent.’’. (b) EFFECTIVE DATE.—The amendments made by this section

shall take effect on January 1, 2017. SEC. 305. TREATMENT OF TRANSPORTATION COSTS OF INDEPENDENT

REFINERS.

(a) IN GENERAL.—Paragraph (3) of section 199(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

‘‘(C) TRANSPORTATION COSTS OF INDEPENDENT REFINERS.—

‘‘(i) IN GENERAL.—In the case of any taxpayer who is in the trade or business of refining crude oil and who is not a major integrated oil company (as defined in section 167(h)(5)(B), determined without regard to clause (iii) thereof) for the taxable year, in computing oil related qualified production activities income under subsection (d)(9)(B), the amount allocated to domestic production gross receipts under paragraph (1)(B) for costs related to the transportation of oil shall be 25 percent of the amount properly allocable under such paragraph (determined without regard to this subpara-graph).

‘‘(ii) TERMINATION.—Clause (i) shall not apply to any taxable year beginning after December 31, 2021.’’.

(b) EFFECTIVE DATE.—The amendment made by this section shall apply to taxable years beginning after December 31, 2015.

DIVISION Q—PROTECTING AMERICANS FROM TAX HIKES ACT OF 2015

SECTION 1. SHORT TITLE, ETC.

(a) SHORT TITLE.—This division may be cited as the ‘‘Protecting Americans from Tax Hikes Act of 2015’’.

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly provided, whenever in this division an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

(c) TABLE OF CONTENTS.—The table of contents for this division is as follows:

DIVISION Q—PROTECTING AMERICANS FROM TAX HIKES ACT OF 2015 Sec. 1. Short title, etc.

TITLE I—EXTENDERS

Subtitle A—Permanent Extensions

PART 1—TAX RELIEF FOR FAMILIES AND INDIVIDUALS Sec. 101. Enhanced child tax credit made permanent. Sec. 102. Enhanced American opportunity tax credit made permanent. Sec. 103. Enhanced earned income tax credit made permanent. Sec. 104. Extension and modification of deduction for certain expenses of elemen-

tary and secondary school teachers. Sec. 105. Extension of parity for exclusion from income for employer-provided mass

transit and parking benefits.

H. R. 2029—800

Sec. 106. Extension of deduction of State and local general sales taxes.

PART 2—INCENTIVES FOR CHARITABLE GIVING Sec. 111. Extension and modification of special rule for contributions of capital gain

real property made for conservation purposes. Sec. 112. Extension of tax-free distributions from individual retirement plans for

charitable purposes. Sec. 113. Extension and modification of charitable deduction for contributions of

food inventory. Sec. 114. Extension of modification of tax treatment of certain payments to control-

ling exempt organizations. Sec. 115. Extension of basis adjustment to stock of S corporations making chari-

table contributions of property.

PART 3—INCENTIVES FOR GROWTH, JOBS, INVESTMENT, AND INNOVATION Sec. 121. Extension and modification of research credit. Sec. 122. Extension and modification of employer wage credit for employees who

are active duty members of the uniformed services. Sec. 123. Extension of 15-year straight-line cost recovery for qualified leasehold im-

provements, qualified restaurant buildings and improvements, and qualified retail improvements.

Sec. 124. Extension and modification of increased expensing limitations and treat-ment of certain real property as section 179 property.

Sec. 125. Extension of treatment of certain dividends of regulated investment com-panies.

Sec. 126. Extension of exclusion of 100 percent of gain on certain small business stock.

Sec. 127. Extension of reduction in S-corporation recognition period for built-in gains tax.

Sec. 128. Extension of subpart F exception for active financing income.

PART 4—INCENTIVES FOR REAL ESTATE INVESTMENT Sec. 131. Extension of minimum low-income housing tax credit rate for non-Feder-

ally subsidized buildings. Sec. 132. Extension of military housing allowance exclusion for determining wheth-

er a tenant in certain counties is low-income. Sec. 133. Extension of RIC qualified investment entity treatment under FIRPTA.

Subtitle B—Extensions Through 2019 Sec. 141. Extension of new markets tax credit. Sec. 142. Extension and modification of work opportunity tax credit. Sec. 143. Extension and modification of bonus depreciation. Sec. 144. Extension of look-thru treatment of payments between related controlled

foreign corporations under foreign personal holding company rules.

Subtitle C—Extensions Through 2016

PART 1—TAX RELIEF FOR FAMILIES AND INDIVIDUALS Sec. 151. Extension and modification of exclusion from gross income of discharge of

qualified principal residence indebtedness. Sec. 152. Extension of mortgage insurance premiums treated as qualified residence

interest. Sec. 153. Extension of above-the-line deduction for qualified tuition and related ex-

penses.

PART 2—INCENTIVES FOR GROWTH, JOBS, INVESTMENT, AND INNOVATION Sec. 161. Extension of Indian employment tax credit. Sec. 162. Extension and modification of railroad track maintenance credit. Sec. 163. Extension of mine rescue team training credit. Sec. 164. Extension of qualified zone academy bonds. Sec. 165. Extension of classification of certain race horses as 3-year property. Sec. 166. Extension of 7-year recovery period for motorsports entertainment com-

plexes. Sec. 167. Extension and modification of accelerated depreciation for business prop-

erty on an Indian reservation. Sec. 168. Extension of election to expense mine safety equipment. Sec. 169. Extension of special expensing rules for certain film and television pro-

ductions; special expensing for live theatrical productions. Sec. 170. Extension of deduction allowable with respect to income attributable to

domestic production activities in Puerto Rico.

H. R. 2029—815

Subtitle B—Extensions Through 2019 SEC. 141. EXTENSION OF NEW MARKETS TAX CREDIT.

(a) IN GENERAL.—Section 45D(f)(1)(G) is amended by striking ‘‘for 2010, 2011, 2012, 2013, and 2014’’ and inserting ‘‘for each of calendar years 2010 through 2019’’.

(b) CARRYOVER OF UNUSED LIMITATION.—Section 45D(f)(3) is amended by striking ‘‘2019’’ and inserting ‘‘2024’’.

(c) EFFECTIVE DATE.—The amendments made by this section shall apply to calendar years beginning after December 31, 2014. SEC. 142. EXTENSION AND MODIFICATION OF WORK OPPORTUNITY

TAX CREDIT.

(a) IN GENERAL.—Section 51(c)(4) is amended by striking ‘‘December 31, 2014’’ and inserting ‘‘December 31, 2019’’.

(b) CREDIT FOR HIRING LONG-TERM UNEMPLOYMENT RECIPI-ENTS.—

(1) IN GENERAL.—Section 51(d)(1) is amended by striking ‘‘or’’ at the end of subparagraph (H), by striking the period at the end of subparagraph (I) and inserting ‘‘, or’’, and by adding at the end the following new subparagraph:

‘‘(J) a qualified long-term unemployment recipient.’’. (2) QUALIFIED LONG-TERM UNEMPLOYMENT RECIPIENT.—Sec-

tion 51(d) is amended by adding at the end the following new paragraph:

‘‘(15) QUALIFIED LONG-TERM UNEMPLOYMENT RECIPIENT.— The term ‘qualified long-term unemployment recipient’ means any individual who is certified by the designated local agency as being in a period of unemployment which—

‘‘(A) is not less than 27 consecutive weeks, and ‘‘(B) includes a period in which the individual was

receiving unemployment compensation under State or Fed-eral law.’’.

(c) EFFECTIVE DATES.— (1) EXTENSION.—The amendment made by subsection (a)

shall apply to individuals who begin work for the employer after December 31, 2014.

(2) MODIFICATION.—The amendments made by subsection (b) shall apply to individuals who begin work for the employer after December 31, 2015.

SEC. 143. EXTENSION AND MODIFICATION OF BONUS DEPRECIATION.

(a) EXTENDED FOR 2015.— (1) IN GENERAL.—Section 168(k)(2) is amended—

(A) by striking ‘‘January 1, 2016’’ in subparagraph (A)(iv) and inserting ‘‘January 1, 2017’’, and

(B) by striking ‘‘January 1, 2015’’ each place it appears and inserting ‘‘January 1, 2016’’. (2) SPECIAL RULE FOR FEDERAL LONG-TERM CONTRACTS.—

Section 460(c)(6)(B)(ii) is amended by striking ‘‘January 1, 2015 (January 1, 2016’’ and inserting ‘‘January 1, 2016 (January 1, 2017’’.

(3) EXTENSION OF ELECTION TO ACCELERATE AMT CREDIT IN LIEU OF BONUS DEPRECIATION.—

(A) IN GENERAL.—Section 168(k)(4)(D)(iii)(II) is amended by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 2016’’.

H. R. 2029—816

(B) ROUND 5 EXTENSION PROPERTY.—Section 168(k)(4) is amended by adding at the end the following new subpara-graph:

‘‘(L) SPECIAL RULES FOR ROUND 5 EXTENSION PROP-ERTY.—

‘‘(i) IN GENERAL.—In the case of round 5 extension property, in applying this paragraph to any taxpayer—

‘‘(I) the limitation described in subparagraph (B)(i) and the business credit increase amount under subparagraph (E)(iii) thereof shall not apply, and

‘‘(II) the bonus depreciation amount, maximum amount, and maximum increase amount shall be computed separately from amounts computed with respect to eligible qualified property which is not round 5 extension property. ‘‘(ii) ELECTION.—

‘‘(I) A taxpayer who has an election in effect under this paragraph for round 4 extension prop-erty shall be treated as having an election in effect for round 5 extension property unless the taxpayer elects to not have this paragraph apply to round 5 extension property.

‘‘(II) A taxpayer who does not have an election in effect under this paragraph for round 4 exten-sion property may elect to have this paragraph apply to round 5 extension property. ‘‘(iii) ROUND 5 EXTENSION PROPERTY.—For purposes

of this subparagraph, the term ‘round 5 extension prop-erty’ means property which is eligible qualified prop-erty solely by reason of the extension of the application of the special allowance under paragraph (1) pursuant to the amendments made by section 143(a)(1) of the Protecting Americans from Tax Hikes Act of 2015 (and the application of such extension to this paragraph pursuant to the amendment made by section 143(a)(3) of such Act).’’.

(4) CONFORMING AMENDMENTS.— (A) The heading for section 168(k) is amended by

striking ‘‘JANUARY 1, 2015’’ and inserting ‘‘JANUARY 1, 2016’’.

(B) The heading for section 168(k)(2)(B)(ii) is amended by striking ‘‘PRE-JANUARY 1, 2015’’ and inserting ‘‘PRE- JANUARY 1, 2016’’. (5) EFFECTIVE DATE.—

(A) IN GENERAL.—Except as provided in subparagraph (B), the amendments made by this subsection shall apply to property placed in service after December 31, 2014, in taxable years ending after such date.

(B) ELECTION TO ACCELERATE AMT CREDIT.—The amendments made by paragraph (3) shall apply to taxable years ending after December 31, 2014.

(b) EXTENDED AND MODIFIED FOR 2016 THROUGH 2019.— (1) IN GENERAL.—Section 168(k)(2), as amended by sub-

section (a), is amended to read as follows: ‘‘(2) QUALIFIED PROPERTY.—For purposes of this sub-

section—

H. R. 2029—817

‘‘(A) IN GENERAL.—The term ‘qualified property’ means property—

‘‘(i)(I) to which this section applies which has a recovery period of 20 years or less,

‘‘(II) which is computer software (as defined in section 167(f)(1)(B)) for which a deduction is allowable under section 167(a) without regard to this subsection,

‘‘(III) which is water utility property, or ‘‘(IV) which is qualified improvement property, ‘‘(ii) the original use of which commences with

the taxpayer, and ‘‘(iii) which is placed in service by the taxpayer

before January 1, 2020. ‘‘(B) CERTAIN PROPERTY HAVING LONGER PRODUCTION

PERIODS TREATED AS QUALIFIED PROPERTY.— ‘‘(i) IN GENERAL.—The term ‘qualified property’

includes any property if such property— ‘‘(I) meets the requirements of clauses (i) and

(ii) of subparagraph (A), ‘‘(II) is placed in service by the taxpayer before

January 1, 2021, ‘‘(III) is acquired by the taxpayer (or acquired

pursuant to a written contract entered into) before January 1, 2020,

‘‘(IV) has a recovery period of at least 10 years or is transportation property,

‘‘(V) is subject to section 263A, and ‘‘(VI) meets the requirements of clause (iii)

of section 263A(f)(1)(B) (determined as if such clause also applies to property which has a long useful life (within the meaning of section 263A(f))). ‘‘(ii) ONLY PRE-JANUARY 1, 2020 BASIS ELIGIBLE FOR

ADDITIONAL ALLOWANCE.—In the case of property which is qualified property solely by reason of clause (i), paragraph (1) shall apply only to the extent of the adjusted basis thereof attributable to manufacture, construction, or production before January 1, 2020.

‘‘(iii) TRANSPORTATION PROPERTY.—For purposes of this subparagraph, the term ‘transportation property’ means tangible personal property used in the trade or business of transporting persons or property.

‘‘(iv) APPLICATION OF SUBPARAGRAPH.—This subparagraph shall not apply to any property which is described in subparagraph (C). ‘‘(C) CERTAIN AIRCRAFT.—The term ‘qualified property’

includes property— ‘‘(i) which meets the requirements of subparagraph

(A)(ii) and subclauses (II) and (III) of subparagraph (B)(i),

‘‘(ii) which is an aircraft which is not a transpor-tation property (as defined in subparagraph (B)(iii)) other than for agricultural or firefighting purposes,

‘‘(iii) which is purchased and on which such pur-chaser, at the time of the contract for purchase, has made a nonrefundable deposit of the lesser of—

‘‘(I) 10 percent of the cost, or ‘‘(II) $100,000, and

H. R. 2029—818

‘‘(iv) which has— ‘‘(I) an estimated production period exceeding

4 months, and ‘‘(II) a cost exceeding $200,000.

‘‘(D) EXCEPTION FOR ALTERNATIVE DEPRECIATION PROP-ERTY.—The term ‘qualified property’ shall not include any property to which the alternative depreciation system under subsection (g) applies, determined—

‘‘(i) without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and

‘‘(ii) after application of section 280F(b) (relating to listed property with limited business use). ‘‘(E) SPECIAL RULES.—

‘‘(i) SELF-CONSTRUCTED PROPERTY.—In the case of a taxpayer manufacturing, constructing, or producing property for the taxpayer’s own use, the requirements of subclause (III) of subparagraph (B)(i) shall be treated as met if the taxpayer begins manufacturing, con-structing, or producing the property before January 1, 2020.

‘‘(ii) SALE-LEASEBACKS.—For purposes of clause (iii) and subparagraph (A)(ii), if property is—

‘‘(I) originally placed in service by a person, and

‘‘(II) sold and leased back by such person within 3 months after the date such property was originally placed in service,

such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in subclause (II).

‘‘(iii) SYNDICATION.—For purposes of subparagraph (A)(ii), if—

‘‘(I) property is originally placed in service by the lessor of such property,

‘‘(II) such property is sold by such lessor or any subsequent purchaser within 3 months after the date such property was originally placed in service (or, in the case of multiple units of property subject to the same lease, within 3 months after the date the final unit is placed in service, so long as the period between the time the first unit is placed in service and the time the last unit is placed in service does not exceed 12 months), and

‘‘(III) the user of such property after the last sale during such 3-month period remains the same as when such property was originally placed in service,

such property shall be treated as originally placed in service not earlier than the date of such last sale. ‘‘(F) COORDINATION WITH SECTION 280F.—For purposes

of section 280F— ‘‘(i) AUTOMOBILES.—In the case of a passenger

automobile (as defined in section 280F(d)(5)) which is qualified property, the Secretary shall increase the limitation under section 280F(a)(1)(A)(i) by $8,000.

H. R. 2029—819

‘‘(ii) LISTED PROPERTY.—The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2).

‘‘(iii) PHASE DOWN.—In the case of a passenger automobile placed in service by the taxpayer after December 31, 2017, clause (i) shall be applied by sub-stituting for ‘$8,000’—

‘‘(I) in the case of an automobile placed in service during 2018, $6,400, and

‘‘(II) in the case of an automobile placed in service during 2019, $4,800.

‘‘(G) DEDUCTION ALLOWED IN COMPUTING MINIMUM TAX.—For purposes of determining alternative minimum taxable income under section 55, the deduction under sec-tion 167 for qualified property shall be determined without regard to any adjustment under section 56.’’. (2) QUALIFIED IMPROVEMENT PROPERTY.—Section 168(k)(3)

is amended to read as follows: ‘‘(3) QUALIFIED IMPROVEMENT PROPERTY.—For purposes of

this subsection— ‘‘(A) IN GENERAL.—The term ‘qualified improvement

property’ means any improvement to an interior portion of a building which is nonresidential real property if such improvement is placed in service after the date such building was first placed in service.

‘‘(B) CERTAIN IMPROVEMENTS NOT INCLUDED.—Such term shall not include any improvement for which the expenditure is attributable to—

‘‘(i) the enlargement of the building, ‘‘(ii) any elevator or escalator, or ‘‘(iii) the internal structural framework of the

building.’’. (3) EXPANSION OF ELECTION TO ACCELERATE AMT CREDITS

IN LIEU OF BONUS DEPRECIATION.—Section 168(k)(4), as amended by subsection (a), 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) paragraphs (1) and (2)(F) shall not apply to any qualified property placed in service during 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 tax-able 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

H. R. 2029—820

qualified property placed in service by the taxpayer during such taxable year if paragraph (1) applied to all such property (and, in the case of any such property which is a passenger automobile (as defined in section 280F(d)(5)), if paragraph (2)(F) applied to such automobile), over

‘‘(II) the aggregate amount of depreciation which would be allowed under this section for qualified property placed in service by the taxpayer during such taxable year if paragraphs (1) and (2)(F) 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 subparagraph (A) or subsection (b)(2)(D), (b)(3)(D), or (g)(7).

‘‘(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, 2015, or

‘‘(II) the minimum tax credit under section 53(b) for such taxable year determined by taking into account only the adjusted net minimum tax for taxable years ending before January 1, 2016 (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 para-graph, and

‘‘(II) as having elected the application of this paragraph if any such corporation so elects.

‘‘(C) 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).

‘‘(D) 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 which is a partner in a partnership and which makes an election under subparagraph (A) for the taxable year, for purposes of determining such corporation’s distributive share of partnership items under section 702 for such taxable year—

‘‘(I) paragraphs (1) and (2)(F) shall not apply to any qualified property placed in service during such taxable year, 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

H. R. 2029—821

capital and profits interests are owned (directly or indirectly) at all times during the taxable year by 1 corporation (or by corporations treated as 1 taxpayer under subparagraph (B)(iii)), each partner shall com-pute its bonus depreciation amount under clause (i) of subparagraph (B) by taking into account its distribu-tive share of the amounts determined by the partner-ship under subclauses (I) and (II) of such clause for the taxable year of the partnership ending with or within the taxable year of the partner.’’.

(4) SPECIAL RULES FOR CERTAIN PLANTS BEARING FRUITS AND NUTS.—Section 168(k) is amended—

(A) by striking paragraph (5), and (B) by inserting after paragraph (4) the following new

paragraph: ‘‘(5) SPECIAL RULES FOR CERTAIN PLANTS BEARING FRUITS

AND NUTS.— ‘‘(A) IN GENERAL.—In the case of any specified plant

which is planted before January 1, 2020, or is grafted before such date to a plant that has already been planted, by the taxpayer in the ordinary course of the taxpayer’s farming business (as defined in section 263A(e)(4)) during a taxable year for which the taxpayer has elected the application of this paragraph—

‘‘(i) a depreciation deduction equal to 50 percent of the adjusted basis of such specified plant shall be allowed under section 167(a) for the taxable year in which such specified plant is so planted or grafted, and

‘‘(ii) the adjusted basis of such specified plant shall be reduced by the amount of such deduction. ‘‘(B) SPECIFIED PLANT.—For purposes of this paragraph,

the term ‘specified plant’ means— ‘‘(i) any tree or vine which bears fruits or nuts,

and ‘‘(ii) any other plant which will have more than

one yield of fruits or nuts and which generally has a pre-productive period of more than 2 years from the time of planting or grafting to the time at which such plant begins bearing fruits or nuts.

Such term shall not include any property which is planted or grafted outside of the United States.

‘‘(C) ELECTION REVOCABLE ONLY WITH CONSENT.—An election under this paragraph may be revoked only with the consent of the Secretary.

‘‘(D) ADDITIONAL DEPRECIATION MAY BE CLAIMED ONLY ONCE.—If this paragraph applies to any specified plant, such specified plant shall not be treated as qualified prop-erty in the taxable year in which placed in service.

‘‘(E) DEDUCTION ALLOWED IN COMPUTING MINIMUM TAX.—Rules similar to the rules of paragraph (2)(G) shall apply for purposes of this paragraph.

‘‘(F) PHASE DOWN.—In the case of a specified plant which is planted after December 31, 2017 (or is grafted to a plant that has already been planted before such date), subparagraph (A)(i) shall be applied by substituting for ‘50 percent’—

H. R. 2029—822

‘‘(i) in the case of a plant which is planted (or so grafted) in 2018, ‘40 percent’, and

‘‘(ii) in the case of a plant which is planted (or so grafted) during 2019, ‘30 percent’.’’.

(5) PHASE DOWN OF BONUS DEPRECIATION.—Section 168(k) is amended by adding at the end the following new paragraph:

‘‘(6) PHASE DOWN.—In the case of qualified property placed in service by the taxpayer after December 31, 2017, paragraph (1)(A) shall be applied by substituting for ‘50 percent’—

‘‘(A) in the case of property placed in service in 2018 (or in the case of property placed in service in 2019 and described in paragraph (2)(B) or (C) (determined by sub-stituting ‘2019’ for ‘2020’ in paragraphs (2)(B)(i)(III) and (ii) and paragraph (2)(E)(i)), ‘40 percent’,

‘‘(B) in the case of property placed in service in 2019 (or in the case of property placed in service in 2020 and described in paragraph (2)(B) or (C), ‘30 percent’.’’. (6) CONFORMING AMENDMENTS.—

(A) Section 168(e)(6) is amended— (i) by redesignating subparagraphs (A) and (B)

as subparagraphs (D) and (E), respectively, (ii) by striking all that precedes subparagraph (D)

(as so redesignated) and inserting the following: ‘‘(6) QUALIFIED LEASEHOLD IMPROVEMENT PROPERTY.—For

purposes of this subsection— ‘‘(A) IN GENERAL.—The term ‘qualified leasehold

improvement property’ means any improvement to an interior portion of a building which is nonresidential real property if—

‘‘(i) such improvement is made under or pursuant to a lease (as defined in subsection (h)(7))—

‘‘(I) by the lessee (or any sublessee) of such portion, or

‘‘(II) by the lessor of such portion, ‘‘(ii) such portion is to be occupied exclusively by

the lessee (or any sublessee) of such portion, and ‘‘(iii) such improvement is placed in service more

than 3 years after the date the building was first placed in service. ‘‘(B) CERTAIN IMPROVEMENTS NOT INCLUDED.—Such

term shall not include any improvement for which the expenditure is attributable to—

‘‘(i) the enlargement of the building, ‘‘(ii) any elevator or escalator, ‘‘(iii) any structural component benefitting a

common area, or ‘‘(iv) the internal structural framework of the

building. ‘‘(C) DEFINITIONS AND SPECIAL RULES.—For purposes

of this paragraph— ‘‘(i) COMMITMENT TO LEASE TREATED AS LEASE.—

A commitment to enter into a lease shall be treated as a lease, and the parties to such commitment shall be treated as lessor and lessee, respectively.

‘‘(ii) RELATED PERSONS.—A lease between related persons shall not be considered a lease. For purposes

Attachment C

(A) (B) (C) (D) (E) (F) (G) (H) (I) (J) (K) (L) (M) (N) (O)TAX DISCOUNTED

PMT/(BEN) REVENUE REVENUEREFLECTING CALIFORNIA STATE MODIFIED FEDERAL FEDERAL REMAINING WTD. AVG. RATE REQUIREMENT DISCOUNT REQUIREMENT

CIAC TAX DEPRECIATION CALIFORNIA TAX MACRS TAX TAX CIAC UNRECOVERED OF ON REMAINING FACTOR ON REMAININGYEAR OF $1,000 BASIS RATES RATES BENEFIT RATES RATE BENEFIT PAYABLE TAX PMT. RETURN INVESTMENT 0.12 INVESTMENT

1 438.40 1,000 3.334% 8.840% 2.9473 51.875% 35.00% 181.5625 253.8902 346.1451 17.000% 58.8447 0.8929 52.5424 1 (0.8929)2 (30.94) 6.445% 5.6974 3.610% 11.6018 205.6511 229.7707 17.000% 39.0610 0.7972 31.1392 2 (0.7972)3 6.016% 5.3181 3.339% 9.6907 190.6422 198.1466 17.000% 33.6849 0.7118 23.9762 3 (0.7118)4 5.615% 4.9637 3.089% 8.9484 176.7302 183.6862 17.000% 31.2267 0.6355 19.8451 4 (0.6355)5 5.241% 4.6330 2.857% 8.2605 163.8366 170.2834 17.000% 28.9482 0.5674 16.4260 5 (0.5674)6 4.892% 4.3245 2.643% 7.6272 151.8849 157.8608 17.000% 26.8363 0.5066 13.5961 6 (0.5066)7 4.566% 4.0363 2.444% 7.0404 140.8081 146.3465 17.000% 24.8789 0.4523 11.2540 7 (0.4523)8 4.261% 3.7667 2.261% 6.5008 130.5406 135.6744 17.000% 23.0646 0.4039 9.3154 8 (0.4039)9 3.977% 3.5157 2.231% 6.4901 120.5349 125.5377 17.000% 21.3414 0.3606 7.6959 9 (0.3606)10 3.712% 3.2814 2.231% 6.5763 110.6771 115.6060 17.000% 19.6530 0.3220 6.3277 10 (0.3220)11 3.465% 3.0631 2.231% 6.6600 100.9541 105.8156 17.000% 17.9887 0.2875 5.1713 11 (0.2875)12 3.234% 2.8589 2.231% 6.7347 91.3605 96.1573 17.000% 16.3467 0.2567 4.1958 12 (0.2567)13 3.018% 2.6679 2.231% 6.8079 81.8847 86.6226 17.000% 14.7258 0.2292 3.3748 13 (0.2292)14 2.817% 2.4902 2.231% 6.8730 72.5215 77.2031 17.000% 13.1245 0.2046 2.6855 14 (0.2046)15 2.630% 2.3249 2.231% 6.9369 63.2597 67.8906 17.000% 11.5414 0.1827 2.1086 15 (0.1827)16 2.455% 2.1702 2.231% 6.9931 54.0963 58.6780 17.000% 9.9753 0.1631 1.6272 16 (0.1631)17 2.367% 2.0924 2.231% 7.0489 44.9550 49.5257 17.000% 8.4194 0.1456 1.2262 17 (0.1456)18 2.367% 2.0924 2.231% 7.0745 35.7881 40.3716 17.000% 6.8632 0.1300 0.8925 18 (0.1300)19 2.367% 2.0924 2.231% 7.0762 26.6195 31.2038 17.000% 5.3046 0.1161 0.6159 19 (0.1161)20 2.367% 2.0924 2.231% 7.0745 17.4525 22.0360 17.000% 3.7461 0.1037 0.3883 20 (0.1037)21 2.367% 2.0924 1.116% 3.1720 12.1881 14.8203 17.000% 2.5195 0.0926 0.2332 21 (0.0926)22 2.367% 2.0924 (0.7323) 10.8280 11.5080 17.000% 1.9564 0.0826 0.1617 22 (0.0826)23 2.367% 2.0924 (0.7323) 9.4679 10.1479 17.000% 1.7251 0.0738 0.1273 23 (0.0738)24 2.367% 2.0924 (0.7323) 8.1077 8.7878 17.000% 1.4939 0.0659 0.0984 24 (0.0659)25 2.367% 2.0924 (0.7323) 6.7476 7.4277 17.000% 1.2627 0.0588 0.0743 25 (0.0588)26 2.367% 2.0924 (0.7323) 5.3875 6.0675 17.000% 1.0315 0.0525 0.0542 26 (0.0525)27 2.367% 2.0924 (0.7323) 4.0273 4.7074 17.000% 0.8003 0.0469 0.0375 27 (0.0469)28 2.367% 2.0924 (0.7323) 2.6672 3.3473 17.000% 0.5690 0.0419 0.0238 28 (0.0419)29 2.367% 2.0924 (0.7323) 1.3071 1.9871 17.000% 0.3378 0.0374 0.0126 29 (0.0374)30 2.367% 2.0924 (0.7323) (0.0530) 0.6270 17.000% 0.1066 0.0334 0.0036 30 (0.0334)31 1.184% 1.0467 (0.7323) (0.3674) (0.2102) 17.000% (0.0357) 0.0298 -0.0011 31 (0.0298)32 0.0000 (0.3663) (0.0011) (0.1843) 17.000% (0.0313) 0.0266 -0.0008 32 (0.0266)

100.000% 88.4000 100.000% 319.0611 427.3112 215.2289

215.2289 / 1000 21.5200%407.46 407.4611

22.0000%

CIAC GROSS-UP COMPUTATION INCLUDING CALIFORNIA TAXESFOR 2015 - 2017

WITH 50% BONUS DEPRECIATION ON 20 YEAR PROPERTY (ELECTRIC AND GAS)




1 438.40 1,000 3.334% 8.840% 2.9473 42.250% 35.00% 147.8750 287.5777 362.9889 17.000% 61.7081 0.8929 55.0992 1 (0.8929)2 (30.94) 6.445% 5.6974 4.331% 14.1284 236.8120 262.1949 17.000% 44.5731 0.7972 35.5334 2 (0.7972)3 6.016% 5.3181 4.006% 12.0276 219.4662 228.1391 17.000% 38.7836 0.7118 27.6054 3 (0.7118)4 5.615% 4.9637 3.706% 11.1103 203.3923 211.4292 17.000% 35.9430 0.6355 22.8424 4 (0.6355)5 5.241% 4.6330 3.428% 10.2600 188.4992 195.9457 17.000% 33.3108 0.5674 18.9014 5 (0.5674)6 4.892% 4.3245 3.171% 9.4769 174.6978 181.5985 17.000% 30.8717 0.5066 15.6406 6 (0.5066)7 4.566% 4.0363 2.933% 8.7512 161.9102 168.3040 17.000% 28.6117 0.4523 12.9425 7 (0.4523)8 4.261% 3.7667 2.713% 8.0835 150.0600 155.9851 17.000% 26.5175 0.4039 10.7100 8 (0.4039)9 3.977% 3.5157 2.677% 8.0518 138.4926 144.2763 17.000% 24.5270 0.3606 8.8447 9 (0.3606)10 3.712% 3.2814 2.677% 8.1376 127.0735 132.7830 17.000% 22.5731 0.3220 7.2679 10 (0.3220)11 3.465% 3.0631 2.677% 8.2217 115.7888 121.4312 17.000% 20.6433 0.2875 5.9345 11 (0.2875)12 3.234% 2.8589 2.677% 8.2960 104.6339 110.2114 17.000% 18.7359 0.2567 4.8090 12 (0.2567)13 3.018% 2.6679 2.677% 8.3696 93.5964 99.1152 17.000% 16.8496 0.2292 3.8615 13 (0.2292)14 2.817% 2.4902 2.677% 8.4343 82.6719 88.1342 17.000% 14.9828 0.2046 3.0658 14 (0.2046)15 2.630% 2.3249 2.677% 8.4986 71.8484 77.2601 17.000% 13.1342 0.1827 2.3996 15 (0.1827)16 2.455% 2.1702 2.677% 8.5544 61.1237 66.4861 17.000% 11.3026 0.1631 1.8437 16 (0.1631)17 2.367% 2.0924 2.677% 8.6106 50.4207 55.7722 17.000% 9.4813 0.1456 1.3809 17 (0.1456)18 2.367% 2.0924 2.677% 8.6358 39.6925 45.0566 17.000% 7.6596 0.1300 0.9961 18 (0.1300)19 2.367% 2.0924 2.677% 8.6379 28.9622 34.3273 17.000% 5.8356 0.1161 0.6776 19 (0.1161)20 2.367% 2.0924 2.677% 8.6358 18.2339 23.5981 17.000% 4.0117 0.1037 0.4159 20 (0.1037)21 2.367% 2.0924 1.339% 3.9528 12.1887 15.2113 17.000% 2.5859 0.0926 0.2393 21 (0.0926)22 2.367% 2.0924 (0.7323) 10.8286 11.5086 17.000% 1.9565 0.0826 0.1617 22 (0.0826)23 2.367% 2.0924 (0.7323) 9.4685 10.1485 17.000% 1.7252 0.0738 0.1273 23 (0.0738)24 2.367% 2.0924 (0.7323) 8.1083 8.7884 17.000% 1.4940 0.0659 0.0984 24 (0.0659)25 2.367% 2.0924 (0.7323) 6.7482 7.4283 17.000% 1.2628 0.0588 0.0743 25 (0.0588)26 2.367% 2.0924 (0.7323) 5.3881 6.0681 17.000% 1.0316 0.0525 0.0542 26 (0.0525)27 2.367% 2.0924 (0.7323) 4.0279 4.7080 17.000% 0.8004 0.0469 0.0375 27 (0.0469)28 2.367% 2.0924 (0.7323) 2.6678 3.3479 17.000% 0.5691 0.0419 0.0238 28 (0.0419)29 2.367% 2.0924 (0.7323) 1.3077 1.9877 17.000% 0.3379 0.0374 0.0126 29 (0.0374)30 2.367% 2.0924 (0.7323) (0.0524) 0.6276 17.000% 0.1067 0.0334 0.0036 30 (0.0334)31 1.184% 1.0467 (0.7323) (0.3668) (0.2096) 17.000% (0.0356) 0.0298 -0.0011 31 (0.0298)32 0.0000 (0.3663) (0.0005) (0.1837) 17.000% (0.0312) 0.0266 -0.0008 32 (0.0266)

100.000% 88.4000 100.000% 319.0605 481.8595 241.6028

241.6028 / 1000 24.1600%407.46 407.4605

24.0000%

CIAC GROSS-UP COMPUTATION INCLUDING CALIFORNIA TAXESFOR 2018





1 438.40 1,000 3.334% 8.840% 2.9473 32.625% 35.00% 114.1875 321.2652 379.8326 17.000% 64.5715 0.8929 57.6559 1 (0.8929)2 (30.94) 6.445% 5.6974 5.053% 16.6540 267.9739 294.6196 17.000% 50.0853 0.7972 39.9277 2 (0.7972)3 6.016% 5.3181 4.674% 14.3649 248.2908 258.1323 17.000% 43.8825 0.7118 31.2347 3 (0.7118)4 5.615% 4.9637 4.324% 13.2726 230.0546 239.1727 17.000% 40.6594 0.6355 25.8398 4 (0.6355)5 5.241% 4.6330 3.999% 12.2592 213.1623 221.6084 17.000% 37.6734 0.5674 21.3769 5 (0.5674)6 4.892% 4.3245 3.700% 11.3284 197.5094 205.3359 17.000% 34.9071 0.5066 17.6850 6 (0.5066)7 4.566% 4.0363 3.422% 10.4634 183.0096 190.2595 17.000% 32.3441 0.4523 14.6308 7 (0.4523)8 4.261% 3.7667 3.165% 9.6648 169.5781 176.2939 17.000% 29.9700 0.4039 12.1044 8 (0.4039)9 3.977% 3.5157 3.123% 9.6121 156.4504 163.0142 17.000% 27.7124 0.3606 9.9934 9 (0.3606)10 3.712% 3.2814 3.123% 9.7000 143.4689 149.9596 17.000% 25.4931 0.3220 8.2081 10 (0.3220)11 3.465% 3.0631 3.123% 9.7820 130.6239 137.0464 17.000% 23.2979 0.2875 6.6976 11 (0.2875)12 3.234% 2.8589 3.123% 9.8584 117.9066 124.2653 17.000% 21.1251 0.2567 5.4223 12 (0.2567)13 3.018% 2.6679 3.123% 9.9299 105.3088 111.6077 17.000% 18.9733 0.2292 4.3482 13 (0.2292)14 2.817% 2.4902 3.123% 9.9967 92.8219 99.0654 17.000% 16.8411 0.2046 3.4460 14 (0.2046)15 2.630% 2.3249 3.123% 10.0589 80.4381 86.6300 17.000% 14.7271 0.1827 2.6906 15 (0.1827)16 2.455% 2.1702 3.123% 10.1168 68.1510 74.2946 17.000% 12.6301 0.1631 2.0602 16 (0.1631)17 2.367% 2.0924 3.123% 10.1709 55.8877 62.0194 17.000% 10.5433 0.1456 1.5356 17 (0.1456)18 2.367% 2.0924 3.123% 10.1982 43.5971 49.7424 17.000% 8.4562 0.1300 1.0996 18 (0.1300)19 2.367% 2.0924 3.123% 10.1982 31.3065 37.4518 17.000% 6.3668 0.1161 0.7392 19 (0.1161)20 2.367% 2.0924 3.123% 10.1982 19.0158 25.1612 17.000% 4.2774 0.1037 0.4434 20 (0.1037)21 2.367% 2.0924 1.562% 4.7347 12.1887 15.6023 17.000% 2.6524 0.0926 0.2455 21 (0.0926)22 2.367% 2.0924 (0.7323) 10.8286 11.5086 17.000% 1.9565 0.0826 0.1617 22 (0.0826)23 2.367% 2.0924 (0.7323) 9.4685 10.1485 17.000% 1.7252 0.0738 0.1273 23 (0.0738)24 2.367% 2.0924 (0.7323) 8.1083 8.7884 17.000% 1.4940 0.0659 0.0984 24 (0.0659)25 2.367% 2.0924 (0.7323) 6.7482 7.4283 17.000% 1.2628 0.0588 0.0743 25 (0.0588)26 2.367% 2.0924 (0.7323) 5.3881 6.0681 17.000% 1.0316 0.0525 0.0542 26 (0.0525)27 2.367% 2.0924 (0.7323) 4.0279 4.7080 17.000% 0.8004 0.0469 0.0375 27 (0.0469)28 2.367% 2.0924 (0.7323) 2.6678 3.3479 17.000% 0.5691 0.0419 0.0238 28 (0.0419)29 2.367% 2.0924 (0.7323) 1.3077 1.9877 17.000% 0.3379 0.0374 0.0126 29 (0.0374)30 2.367% 2.0924 (0.7323) (0.0524) 0.6276 17.000% 0.1067 0.0334 0.0036 30 (0.0334)31 1.184% 1.0467 (0.7323) (0.3668) (0.2096) 17.000% (0.0356) 0.0298 -0.0011 31 (0.0298)32 0.0000 (0.3663) (0.0005) (0.1837) 17.000% (0.0312) 0.0266 -0.0008 32 (0.0266)

100.000% 88.4000 100.000% 319.0605 536.4069 267.9765

267.9765 / 1000 26.8000%407.46 407.4605

27.0000%

CIAC GROSS-UP COMPUTATION INCLUDING CALIFORNIA TAXESFOR 2019


public utilities commission - we are down for … · public utilities commission 505 van ness...

Documents