26 U.S.C. § 168: Accelerated cost recovery system

the applicable depreciation method, the applicable recovery period, and the applicable convention. the 200 percent declining balance method, switching to the straight line method for the 1st taxable year for which using the straight line method with respect to the adjusted basis as of the beginning of such year will yield a larger allowance. any 15-year or 20-year property not referred to in paragraph (3), any property (other than property described in paragraph (3)) which is a qualified smart electric meter or qualified smart electric grid system, or any property (other than property described in paragraph (3)) with respect to which the taxpayer elects under paragraph (5) to have the provisions of this paragraph apply. Nonresidential real property. Residential rental property. Any railroad grading or tunnel bore. Property with respect to which the taxpayer elects under paragraph (5) to have the provisions of this paragraph apply. Property described in subsection (e)(3)(D)(ii). Water utility property described in subsection (e)(5). Qualified improvement property described in subsection (e)(6). Salvage value shall be treated as zero. An election under paragraph (2)(D) 1 or (3)(D) may be made with respect to 1 or more classes of property for any taxable year and once made with respect to any class shall apply to all property in such class placed in service during such taxable year. Such an election, once made, shall be irrevocable. 1 See References in Text note below. For purposes of this section, the applicable recovery period shall be determined in accordance with the following table: In the case of: The applicable recovery period is: 3-year property 3 years 5-year property 5 years 7-year property 7 years 10-year property 10 years 15-year property 15 years 20-year property 20 years Water utility property 25 years Residential rental property 27.5 years Nonresidential real property 39 years. Any railroad grading or tunnel bore 50 years. Except as otherwise provided in this subsection, the applicable convention is the half-year convention. nonresidential real property, residential rental property, and any railroad grading or tunnel bore, the aggregate bases of property to which this section applies placed in service during the last 3 months of the taxable year, exceed 40 percent of the aggregate bases of property to which this section applies placed in service during such taxable year, any nonresidential real property, residential rental property, and railroad grading or tunnel bore, and any other property placed in service and disposed of during the same taxable year. The half-year convention is a convention which treats all property placed in service during any taxable year (or disposed of during any taxable year) as placed in service (or disposed of) on the mid-point of such taxable year. The mid-month convention is a convention which treats all property placed in service during any month (or disposed of during any month) as placed in service (or disposed of) on the mid-point of such month. The mid-quarter convention is a convention which treats all property placed in service during any quarter of a taxable year (or disposed of during any quarter of a taxable year) as placed in service (or disposed of) on the mid-point of such quarter. Except as otherwise provided in this subsection, property shall be classified under the following table: Property shall be treated as: If such property has a class life (in years) of: 3-year property 4 or less 5-year property More than 4 but less than 10 7-year property 10 or more but less than 16 10-year property 16 or more but less than 20 15-year property 20 or more but less than 25 20-year property 25 or more. 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. 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 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. residential rental property, or property with a class life of less than 27.5 years. which is placed in service before January 1, 2022 , and which is placed in service after December 31, 2021 , and which is more than 2 years old at the time such horse is placed in service by such purchaser, any horse other than a race horse which is more than 12 years old at the time it is placed in service, and any qualified rent-to-own property. any automobile or light general purpose truck, any semi-conductor manufacturing equipment, any computer-based telephone central office switching equipment, any qualified technological equipment, any section 1245 property used in connection with research and experimentation, is described in paragraph (15) of section 48( l ) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) and has a power production capacity of not greater than 80 megawatts, or is described in section 48( l )(3)(A)(ix) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990), any machinery or equipment (other than any grain bin, cotton ginning asset, fence, or other land improvement) which is used in a farming business (as defined in section 263A(e)(4)), the original use of which commences with the taxpayer after December 31, 2017 , and any qualified facility (as defined in section 45Y(b)(1)(A)), any qualified property (as defined in subsection (b)(2) of section 48E) which is a qualified investment (as defined in subsection (b)(1) of such section), or any energy storage technology (as defined in subsection (c)(2) of such section). any railroad track, any motorsports entertainment complex, any Alaska natural gas pipeline, any natural gas gathering line the original use of which commences with the taxpayer after April 11, 2005 , and does not have a class life, and is not otherwise classified under paragraph (2) or this paragraph. any single purpose agricultural or horticultural structure (within the meaning of subsection (i)(13)), any tree or vine bearing fruit or nuts, any qualified smart electric meter, and any qualified smart electric grid system. any municipal wastewater treatment plant, any telephone distribution plant and comparable equipment used for 2-way exchange of voice and data communications, any section 1250 property which is a retail motor fuels outlet (whether or not food or other convenience items are sold at the outlet), initial clearing and grading land improvements with respect to gas utility property, any section 1245 property (as defined in section 1245(a)(3)) used in the transmission at 69 or more kilovolts of electricity for sale and the original use of which commences with the taxpayer after April 11, 2005 , any natural gas distribution line the original use of which commences with the taxpayer after April 11, 2005 , and which is placed in service before January 1, 2011 , and any qualified improvement property. The term “20-year property” means initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant. The term “railroad grading or tunnel bore” means all improvements resulting from excavations (including tunneling), construction of embankments, clearings, diversions of roads and streams, sodding of slopes, and from similar work necessary to provide, construct, reconstruct, alter, protect, improve, replace, or restore a roadbed or right-of-way for railroad track. which is an integral part of the gathering, treatment, or commercial distribution of water, and which, without regard to this paragraph, would be 20-year property, and any municipal sewer. The term “qualified improvement property” means any improvement made by the taxpayer 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. the enlargement of the building, any elevator or escalator, or the internal structural framework of the building. the taxpayer elects to exclude such property from the application of this section, and for the 1st taxable year for which a depreciation deduction would be allowable with respect to such property in the hands of the taxpayer, the property is properly depreciated under the unit-of-production method or any method of depreciation not expressed in a term of years (other than the retirement-replacement-betterment method or similar method). Any public utility property (within the meaning of subsection (i)(10)) if the taxpayer does not use a normalization method of accounting. Any motion picture film or video tape. Any works which result from the fixation of a series of musical, spoken, or other sounds, regardless of the nature of the material (such as discs, tapes, or other phonorecordings) in which such sounds are embodied. described in paragraph (4) of section 168(e) (as in effect before the amendments made by the Tax Reform Act of 1986), or which would be described in such paragraph if such paragraph were applied by substituting “1987” for “1981” and “1986” for “1980” each place such terms appear. any residential rental property or nonresidential real property, the amount allowable as a deduction under this section (as in effect before the date of the enactment of this paragraph) with respect to such property is greater than, the amount allowable as a deduction under this section (as in effect on or after such date and using the half-year convention) for such taxable year, or any property to which this section (as amended by the Tax Reform Act of 1986) applied in the hands of the trans­feror. In the case of any property to which this section would apply but for this paragraph, the depreciation deduction under section 167 shall be determined under the provisions of this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986. any tangible property which during the taxable year is used predominantly outside the United States, any tax-exempt use property, any tax-exempt bond financed property, any imported property covered by an Executive order under paragraph (6), any property to which an election under paragraph (7) applies, any property described in paragraph (8), and any property with a recovery period of 10 years or more which is held by an electing farming business (as defined in section 163(j)(7)(C)), the straight line method (without regard to salvage value), the applicable convention determined under subsection (d), and a recovery period determined under the following table: In the case of: The recovery period shall be: (i) Property not described in clause (ii) or (iii) The class life. (ii) Personal property with no class life 12 years. (iii) Residential rental property 30 years (iv) Nonresidential real property 40 years (v) Any railroad grading or tunnel bore or water utility property 50 years In the case of any tax-exempt use property subject to a lease, the recovery period used for purposes of paragraph (2) shall (notwithstanding any other subparagraph of this paragraph) in no event be less than 125 percent of the lease term. For purposes of paragraph (2), in the case of property described in any of the following subparagraphs of subsection (e)(3), the class life shall be determined as follows: If property is described in subparagraph: The class life is: (A)(iii) 4 (B)(ii) 5 (B)(iii) 9.5 (B)(vii) 10 (C)(i) 10 (C)(iii) 22 (C)(iv) 14 (D)(i) 15 (D)(ii) 20 (E)(i) 24 (E)(ii) 24 (E)(iii) 20 (E)(iv) 20 (E)(v) 30 (E)(vi) 35 (E)(vii) 20 (F) 25 In the case of any qualified technological equipment, the recovery period used for purposes of paragraph (2) shall be 5 years. In the case of any automobile or light general purpose truck, the recovery period used for purposes of paragraph (2) shall be 5 years. In the case of any section 1245 property which is real property with no class life, the recovery period used for purposes of paragraph (2) shall be 40 years. any aircraft which is registered by the Administrator of the Federal Aviation Agency and which is operated to and from the United States or is operated under contract with the United States; of a rail carrier subject to part A of subtitle IV of title 49, or of a United States person (other than a corporation described in clause (i)) but only if the rolling stock is not leased to one or more foreign persons for periods aggregating more than 12 months in any 24-month period; any vessel documented under the laws of the United States which is operated in the foreign or domestic commerce of the United States; any motor vehicle of a United States person (as defined in section 7701(a)(30)) which is operated to and from the United States; any container of a United States person which is used in the transportation of property to and from the United States; any property (other than a vessel or an aircraft) of a United States person which is used for the purpose of exploring for, developing, removing, or transporting resources from the outer Continental Shelf (within the meaning of section 2 of the Outer Continental Shelf Lands Act, as amended and supplemented; ( 43 U.S.C. 1331 )); any property which is owned by a domestic corporation or by a United States citizen (other than a citizen entitled to the benefits of section 931 or 933) and which is used predominantly in a possession of the United States by such a corporation or such a citizen, or by a corporation created or organized in, or under the law of, a possession of the United States; any communications satellite (as defined in section 103(3) of the Communications Satellite Act of 1962, 47 U.S.C. 702(3) ), or any interest therein, of a United States person; any cable, or any interest therein, of a domestic corporation engaged in furnishing telephone service to which section 168(i)(10)(C) applies (or of a wholly owned domestic subsidiary of such a corporation), if such cable is part of a submarine cable system which constitutes part of a communication link exclusively between the United States and one or more foreign countries; any property (other than a vessel or an aircraft) of a United States person which is used in international or territorial waters within the northern portion of the Western Hemisphere for the purpose of exploring for, developing, removing, or transporting resources from ocean waters or deposits under such waters; any property described in section 48( l )(3)(A)(ix) (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990) which is owned by a United States person and which is used in international or territorial waters to generate energy for use in the United States; and any satellite (not described in subparagraph (H)) or other spacecraft (or any interest therein) held by a United States person if such satellite or other spacecraft was launched from within the United States. Except as otherwise provided in this paragraph, the term “tax-exempt bond financed property” means any property to the extent such property is financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103(a). For purposes of subparagraph (A), the proceeds of any obligation shall be treated as used to finance property acquired in connection with the issuance of such obligation in the order in which such property is placed in service. The term “tax-exempt bond financed property” shall not include any qualified residential rental project (within the meaning of section 142(a)(7)). maintains nontariff trade restrictions, including variable import fees, which substantially burden United States commerce in a manner inconsistent with provisions of trade agreements, or engages in discriminatory or other acts (including tolerance of international cartels) or policies unjustifiably restricting United States commerce, such property was completed outside the United States, or less than 50 percent of the basis of such property is attributable to value added within the United States. If the taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, the alternative depreciation system under this subsection shall apply to all property in such class placed in service during such taxable year. Notwithstanding the preceding sentence, in the case of nonresidential real property or residential rental property, such election may be made separately with respect to each property. An election under subparagraph (A), once made, shall be irrevocable. The property described in this paragraph shall consist of any nonresidential real property, residential rental property, and qualified improvement property held by an electing real property trade or business (as defined in 163(j)(7)(B)). Except as otherwise provided in this subsection, the term “tax-exempt use property” means that portion of any tangible property (other than nonresidential real property) leased to a tax-exempt entity. In the case of nonresidential real property, the term “tax-exempt use property” means that portion of the property leased to a tax-exempt entity in a disqualified lease. part or all of the property was financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103(a) and such entity (or a related entity) participated in such financing, under such lease there is a fixed or determinable price purchase or sale option which involves such entity (or a related entity) or there is the equivalent of such an option, such lease has a lease term in excess of 20 years, or such lease occurs after a sale (or other transfer) of the property by, or lease of the property from, such entity (or a related entity) and such property has been used by such entity (or a related entity) before such sale (or other transfer) or lease. Clause (i) shall apply to any property only if the portion of such property leased to tax-exempt entities in disqualified leases is more than 35 percent of the property. For purposes of this subparagraph, improvements to a property (other than land) shall not be treated as a separate property. Subclause (IV) of clause (ii) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity). Property shall not be treated as tax-exempt use property merely by reason of a short-term lease. less than 3 years, and less than the greater of 1 year or 30 percent of the property’s present class life. The term “tax-exempt use property” shall not include any portion of a property if such portion is predominantly used by the tax-exempt entity (directly or through a partnership of which such entity is a partner) in an unrelated trade or business the income of which is subject to tax under section 511. For purposes of subparagraph (B)(iii), any portion of a property so used shall not be treated as leased to a tax-exempt entity in a disqualified lease. For purposes of this paragraph, the term “nonresidential real property” includes residential rental property. the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing, an organization (other than a cooperative described in section 521) which is exempt from tax imposed by this chapter, any foreign person or entity, and any Indian tribal government described in section 7701(a)(40). subject to tax under this chapter, or included under section 951 in the gross income of a United States shareholder for the taxable year with or within which ends the taxable year of the controlled foreign corporation in which such income was derived. any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, and any person who is not a United States person. all of the activities of such corporation are subject to tax under this chapter, and a majority of the board of directors of such corporation is not selected by the United States or any State or political subdivision thereof. For purposes of this subsection, an organization shall be treated as an organization described in subparagraph (A)(ii) with respect to any property (other than property held by such organization) if such organization was an organization (other than a cooperative described in section 521) exempt from tax imposed by this chapter at any time during the 5-year period ending on the date such property was first used by such organization. The preceding sentence and subparagraph (D)(ii) shall not apply to the Federal Home Loan Mortgage Corporation. In the case of an organization formerly exempt from tax under section 501(a) as an organization described in section 501(c)(12), clause (i) shall not apply to such organization with respect to any property if such organization elects not to be exempt from tax under section 501(a) during the tax-exempt use period with respect to such property. For purposes of subclause (I), the term “tax-exempt use period” means the period beginning with the taxable year in which the property described in subclause (I) is first used by the organization and ending with the close of the 15th taxable year following the last taxable year of the applicable recovery period of such property. Any election under subclause (I), once made, shall be irrevocable. Any organization which is engaged in activities substantially similar to those engaged in by a predecessor organization shall succeed to the treatment under this subparagraph of such predecessor organization. when the property is first placed in service under a lease to such organization, or in the case of property leased to (or held by) a partnership (or other pass-thru entity) in which the organization is a member, the later of when such property is first used by such partnership or pass-thru entity or when such organization is first a member of such partnership or pass-thru entity. For purposes of this section, the term “tax-exempt use property” shall not include any qualified technological equipment if the lease to the tax-exempt entity has a lease term of 5 years or less. Notwithstanding subsection (i)(3)(A)(i), in determining a lease term for purposes of the preceding sentence, there shall not be taken into account any option of the lessee to renew at the fair market value rent determined at the time of renewal; except that the aggregate period not taken into account by reason of this sentence shall not exceed 24 months. part or all of the property was financed (directly or indirectly) by an obligation the interest on which is exempt from tax under section 103(a), such lease occurs after a sale (or other transfer) of the property by, or lease of such property from, such entity (or related entity) and such property has been used by such entity (or a related entity) before such sale (or other transfer) or lease, or such tax-exempt entity is the United States or any agency or instrumentality of the United States. Subclause (II) of clause (i) shall not apply to any property which is leased within 3 months after the date such property is first used by the tax-exempt entity (or a related entity). Each governmental unit and each agency or instrumentality of a governmental unit is related to each other such unit, agency, or instrumentality which directly or indirectly derives its powers, rights, and duties in whole or in part from the same sovereign authority. For purposes of clause (i), the United States, each State, and each possession of the United States shall be treated as a separate sovereign authority. significant common purposes and substantial common membership, or directly or indirectly substantial common direction or control. An entity is related to another entity if either entity owns (directly or through 1 or more entities) a 50 percent or greater interest in the capital or profits of the other entity. For purposes of clause (i), entities treated as related under subparagraph (A) or (B) shall be treated as 1 entity. An entity is related to another entity with respect to a transaction if such transaction is part of an attempt by such entities to avoid the application of this subsection. In the case of any property which is leased to a partnership, the determination of whether any portion of such property is tax-exempt use property shall be made by treating each tax-exempt entity partner’s proportionate share (determined under paragraph (6)(C)) of such property as being leased to such partner. Rules similar to the rules of subparagraph (A) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities. Unless it is otherwise established to the satisfaction of the Secretary, it shall be presumed that the partners of a foreign partnership (and the beneficiaries of any other foreign pass-thru entity) are persons who are not United States persons. any property which (but for this subparagraph) is not tax-exempt use property is owned by a partnership which has both a tax-exempt entity and a person who is not a tax-exempt entity as partners, and any allocation to the tax-exempt entity of partnership items is not a qualified allocation, is consistent with such entity’s being allocated the same distributive share of each item of income, gain, loss, deduction, credit, and basis and such share remains the same during the entire period the entity is a partner in the partnership, and has substantial economic effect within the meaning of section 704(b)(2). For purposes of subparagraph (A), a tax-exempt entity’s proportionate share of any property owned by a partnership shall be determined on the basis of such entity’s share of partnership items of income or gain (excluding gain allocated under section 704(c)), whichever results in the largest proportionate share. For purposes of clause (i), if a tax-exempt entity’s share of partnership items of income or gain (excluding gain allocated under section 704(c)) may vary during the period such entity is a partner in the partnership, such share shall be the highest share such entity may receive. For purposes of this subsection, in the case of any property which is owned by a partnership which has both a tax-exempt entity and a person who is not a tax-exempt entity as partners, the determination of whether such property is used in an unrelated trade or business of such an entity shall be made without regard to section 514. Rules similar to the rules of subparagraphs (A), (B), (C), and (D) shall also apply in the case of any pass-thru entity other than a partnership and in the case of tiered partnerships and other entities. For purposes of this paragraph and paragraph (5), except as otherwise provided in this subparagraph, any tax-exempt controlled entity shall be treated as a tax-exempt entity. such entity shall not be treated as a tax-exempt entity for purposes of this paragraph and paragraph (5), and any gain recognized by a tax-exempt entity on any disposition of an interest in such entity (and any dividend or interest received or accrued by a tax-exempt entity from such tax-exempt controlled entity) shall be treated as unrelated business taxable income for purposes of section 511. The term “tax-exempt controlled entity” means any corporation (which is not a tax-exempt entity determined without regard to this subparagraph and paragraph (2)(E)) if 50 percent or more (in value) of the stock in such corporation is held by 1 or more tax-exempt entities (other than a foreign person or entity). For purposes of subclause (I), in the case of a corporation the stock of which is publicly traded on an established securities market, stock held by a tax-exempt entity shall not be taken into account unless such entity holds at least 5 percent (in value) of the stock in such corporation. For purposes of this subclause, related entities (within the meaning of paragraph (4)) shall be treated as 1 entity. For purposes of this clause, a tax-exempt entity shall be treated as holding stock which it holds through application of section 318 (determined without regard to the 50-percent limitation contained in subsection (a)(2)(C) thereof). shall set forth the proper treatment for partnership guaranteed payments, and may provide for the exclusion or segregation of items. For purposes of this subsection, the term “lease” includes any grant of a right to use property. The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this subsection. Except as provided in this section, the term “class life” means the class life (if any) which would be applicable with respect to any property as of January 1, 1986 , under subsection (m) of section 167 (determined without regard to paragraph (4) and as if the taxpayer had made an election under such subsection). The Secretary, through an office established in the Treasury, shall monitor and analyze actual experience with respect to all depreciable assets. 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. any computer or peripheral equipment, any high technology telephone station equipment installed on the customer’s premises, and any high technology medical equipment. any computer, and any related peripheral equipment. is capable of accepting information, applying prescribed processes to the information, and supplying the results of these processes with or without human intervention, and consists of a central processing unit containing extensive storage, logic, arithmetic, and control capabilities. The term “related peripheral equipment” means any auxiliary machine (whether on-line or off-line) which is designed to be placed under the control of the central processing unit of a computer. any equipment which is an integral part of other property which is not a computer, typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment, and equipment of a kind used primarily for amusement or entertainment of the user. For purposes of this paragraph, 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. there shall be taken into account options to renew, which is part of the same transaction (or series of related transactions) which includes the lease, and which is with respect to the property subject to the lease or substantially similar property, and 2 or more successive leases which are part of the same transaction (or a series of related transactions) with respect to the same or substantially similar property shall be treated as 1 lease. For purposes of clause (i) of subparagraph (A), in the case of nonresidential real property or residential rental property, there shall not be taken into account any option to renew at fair market value, determined at the time of renewal. Under regulations, a taxpayer may maintain 1 or more general asset accounts for any property to which this section applies. Except as provided in regulations, all proceeds realized on any disposition of property in a general asset account shall be included in income as ordinary income. The Secretary shall, by regulations, provide for the method of determining the deduction allowable under section 167(a) with respect to any tangible property for any taxable year (and the succeeding taxable years) during which such property changes status under this section but continues to be held by the same person. any deduction under subsection (a) for such addition or improvement shall be computed in the same manner as the deduction for such property would be computed if such property had been placed in service at the same time as such addition or improvement, and the date on which such addition (or improvement) is placed in service, or the date on which the property with respect to which such addition (or improvement) was made is placed in service. In the case of any property transferred in a transaction described in subparagraph (B), the transferee shall be treated as the transferor for purposes of computing the depreciation deduction determined under this section with respect to so much of the basis in the hands of the transferee as does not exceed the adjusted basis in the hands of the transferor. In any case where this section as in effect before the amendments made by section 201 of the Tax Reform Act of 1986 applied to the property in the hands of the transferor, the reference in the preceding sentence to this section shall be treated as a reference to this section as so in effect. any transaction described in section 332, 351, 361, 721, or 731, and any transaction between members of the same affiliated group during any taxable year for which a consolidated return is made by such group. Under regulations, property which is disposed of and then reacquired by the taxpayer shall be treated for purposes of computing the deduction allowable under subsection (a) as if such property had not been disposed of. In the case of any building erected (or improvements made) on leased property, if such building or improvement is property to which this section applies, the depreciation deduction shall be determined under the provisions of this section. which is made by the lessor of leased property for the lessee of such property, and which is irrevocably disposed of or abandoned by the lessor at the termination of the lease by such lessee, For treatment of qualified long-term real property constructed or improved in connection with cash or rent reduction from lessor to lessee, see section 110(b). the taxpayer must, in computing its tax expense for purposes of establishing its cost of service for ratemaking purposes and reflecting operating results in its regulated books of account, use a method of depreciation with respect to such property that is the same as, and a depreciation period for such property that is no shorter than, the method and period used to compute its depreciation expense for such purposes; and if the amount allowable as a deduction under this section with respect to such property (respecting all elections made by the taxpayer under this section) differs from the amount that would be allowable as a deduction under section 167 using the method (including the period, first and last year convention, and salvage value) used to compute regulated tax expense under clause (i), the taxpayer must make adjustments to a reserve to reflect the deferral of taxes resulting from such difference. One way in which the requirements of subparagraph (A) are not met is if the taxpayer, for ratemaking purposes, uses a procedure or adjustment which is inconsistent with the requirements of subparagraph (A). The procedures and adjustments which are to be treated as inconsistent for purposes of clause (i) shall include any procedure or adjustment for ratemaking purposes which uses an estimate or projection of the taxpayer’s tax expense, depreciation expense, or reserve for deferred taxes under subparagraph (A)(ii) unless such estimate or projection is also used, for ratemaking purposes, with respect to the other 2 such items and with respect to the rate base. The Secretary may by regulations prescribe procedures and adjustments (in addition to those specified in clause (ii)) which are to be treated as inconsistent for purposes of clause (i). In the case of any public utility property to which this section does not apply by reason of subsection (f)(2), the allowance for depreciation under section 167(a) shall be an amount computed using the method and period referred to in subparagraph (A)(i). electrical energy, water, or sewage disposal services, gas or steam through a local distribution system, 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 transportation of gas or steam by pipeline, The term “research and experimentation” has the same meaning as the term research and experimental has under section 174. The terms “section 1245 property” and “section 1250 property” have the meanings given such terms by sections 1245(a)(3) and 1250(c), respectively. a single purpose livestock structure, and a single purpose horticultural structure. for housing, raising, and feeding a particular type of livestock and their produce, and for housing the equipment (including any replacements) necessary for the housing, raising, and feeding referred to in subclause (I). a greenhouse specifically designed, constructed, and used for the commercial production of plants, and a structure specifically designed, constructed, and used for the commercial production of mushrooms. the stocking, caring for, or collecting of livestock or plants (as the case may be) or their produce, the maintenance of the enclosure or structure, and the maintenance or replacement of the equipment or stock enclosed or housed therein. The term “livestock” includes poultry. The term “qualified rent-to-own property” means property held by a rent-to-own dealer for purposes of being subject to a rent-to-own contract. The term “rent-to-own dealer” means a person that, in the ordinary course of business, regularly enters into rent-to-own contracts with customers for the use of consumer property, if a substantial portion of those contracts terminate and the property is returned to such person before the receipt of all payments required to transfer ownership of the property from such person to the customer. The term “consumer property” means tangible personal property of a type generally used within the home for personal use. is titled “Rent-to-Own Agreement” or “Lease Agreement with Ownership Option,” or uses other similar language, provides for level (or decreasing where no payment is less than 40 percent of the largest payment), regular periodic payments (for a payment period which is a week or month), provides that legal title to such property remains with the rent-to-own dealer until the customer makes all the payments described in clause (ii) or early purchase payments required under the contract to acquire legal title to the item of property, provides a beginning date and a maximum period of time for which the contract may be in effect that does not exceed 156 weeks or 36 months from such beginning date (including renewals or options to extend), provides for payments within the 156-week or 36-month period that, in the aggregate, generally exceed the normal retail price of the consumer property plus interest, provides for payments under the contract that, in the aggregate, do not exceed $10,000 per item of consumer property, provides that the customer does not have any legal obligation to make all the payments referred to in clause (ii) set forth under the contract, and that at the end of each payment period the customer may either continue to use the consumer property by making the payment for the next payment period or return such property to the rent-to-own dealer in good working order, in which case the customer does not incur any further obligations under the contract and is not entitled to a return of any payments previously made under the contract, and provides that the customer has no right to sell, sublease, mortgage, pawn, pledge, encumber, or otherwise dispose of the consumer property until all the payments stated in the contract have been made. is permanently situated on land, and during the 36-month period following the first day of the month in which the asset is placed in service, hosts 1 or more racing events for automobiles (of any type), trucks, or motorcycles which are open to the public for the price of admission. ancillary facilities and land improvements in support of the complex’s activities (including parking lots, sidewalks, waterways, bridges, fences, and landscaping), support facilities (including food and beverage retailing, souvenir vending, and other nonlodging accommodations), and appurtenances associated with such facilities and related attractions and amusements (including ticket booths, race track surfaces, suites and hospitality facilities, grandstands and viewing structures, props, walls, facilities that support the delivery of entertainment services, other special purpose structures, facades, shop interiors, and buildings). Such term shall not include any transportation equipment, administrative services assets, warehouses, administrative buildings, hotels, or motels. Such term shall not include any property placed in service after December 31, 2025 . has a capacity of more than 500,000,000,000 Btu of natural gas per day, and placed in service after December 31, 2013 , or treated as placed in service on January 1, 2014 , if the taxpayer who places such system in service before January 1, 2014 , elects such treatment. the pipe, equipment, and appurtenances determined to be a gathering line by the Federal Energy Regulatory Commission, and a gas processing plant, an interconnection with a transmission pipeline for which a certificate as an interstate transmission pipeline has been issued by the Federal Energy Regulatory Commission, an interconnection with an intrastate transmission pipeline, or a direct interconnection with a local distribution company, a gas storage facility, or an industrial consumer. is placed in service by a taxpayer who is a supplier of electric energy or a provider of electric energy services, and does not have a class life (determined without regard to subsection (e)) of less than 16 years. measures and records electricity usage data on a time-differentiated basis in at least 24 separate time segments per day, provides for the exchange of information between supplier or provider and the customer’s electric meter in support of time-based rates or other forms of demand response, provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and provides net metering. is used as part of a system for electric distribution grid communications, monitoring, and management placed in service by a taxpayer who is a supplier of electric energy or a provider of electric energy services, and does not have a class life (determined without regard to subsection (e)) of less than 16 years. sensing, collecting, and monitoring data of or from all portions of a utility’s electric distribution grid, providing real-time, two-way communications to monitor or manage such grid, and providing real time analysis of and event prediction based upon collected data that can be used to improve electric distribution system reliability, quality, and performance. For purposes of subsection (a), the applicable recovery period for qualified Indian reservation property shall be determined in accordance with the table contained in paragraph (2) in lieu of the table contained in subsection (c). For purposes of paragraph (1)— In the case of: The applicable recovery period is: 3-year property 2 years 5-year property 3 years 7-year property 4 years 10-year property 6 years 15-year property 9 years 20-year property 12 years Nonresidential real property 22 years. For purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified Indian reservation property shall be determined under this section without regard to any adjustment under section 56. used by the taxpayer predominantly in the active conduct of a trade or business within an Indian reservation, not used or located outside the Indian reservation on a regular basis, not acquired (directly or indirectly) by the taxpayer from a person who is related to the taxpayer (within the meaning of section 465(b)(3)(C)), and not property (or any portion thereof) placed in service for purposes of conducting or housing class I, II, or III gaming (as defined in section 4 of the Indian Regulatory Act ( 25 U.S.C. 2703 )). without regard to subsection (g)(7) (relating to election to use alternative depreciation system), and after the application of section 280F(b) (relating to listed property with limited business use). Subparagraph (A)(ii) shall not apply to qualified infrastructure property located outside of the Indian reservation if the purpose of such property is to connect with qualified infrastructure property located within the Indian reservation. benefits the tribal infrastructure, is available to the general public, and is placed in service in connection with the taxpayer’s active conduct of a trade or business within an Indian reservation. For purposes of this subsection, the rental to others of real property located within an Indian reservation shall be treated as the active conduct of a trade or business within an Indian reservation. section 3(d) of the Indian Financing Act of 1974 ( 25 U.S.C. 1452(d) ), or section 4(10) of the Indian Child Welfare Act of 1978 ( 25 U.S.C. 1903(10) ). Any reference in this subsection to a provision not contained in this title shall be treated for purposes of this subsection as a reference to such provision as in effect on the date of the enactment of this paragraph. If a taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, paragraph (1) shall not apply to all property in such class placed in service during such taxable year. Such election, once made, shall be irrevocable. This subsection shall not apply to property placed in service after December 31, 2021 . the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 100 percent of the adjusted basis of the qualified property, and the adjusted basis of the qualified property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year. to which this section applies which has a recovery period of 20 years or less, 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, which is water utility property, or 2 2 So in original. The word “or” probably should not appear. which is a qualified film or television production (as defined in subsection (d) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection, which is a qualified live theatrical production (as defined in subsection (e) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection, and or 3 3 So in original. which is a qualified sound recording production (as defined in subsection (f) of section 181) for which a deduction would have been allowable under section 181 without regard to subsections (a)(2) and (h) of such section or this subsection, and the original use of which begins with the taxpayer or the acquisition of which by the taxpayer meets the requirements of clause (i) of subparagraph (E). meets the requirements of clauses (i) and (ii) of subparagraph (A), has a recovery period of at least 10 years or is transportation property, is subject to section 263A, and 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))). For purposes of this subparagraph, the term “transportation property” means tangible personal property used in the trade or business of transporting persons or property. This subparagraph shall not apply to any property which is described in subparagraph (C). which meets the requirements of subparagraph (A)(ii), which is an aircraft which is not a transportation property (as defined in subparagraph (B)(ii)) other than for agricultural or firefighting purposes, 10 percent of the cost, or $100,000, and an estimated production period exceeding 4 months, and a cost exceeding $200,000. without regard to paragraph (7) of subsection (g) (relating to election to have system apply), and after application of section 280F(b) (relating to listed property with limited business use). such property was not used by the taxpayer at any time prior to such acquisition, and the acquisition of such property meets the requirements of paragraphs (2)(A), (2)(B), (2)(C), and (3) of section 179(d). property is used by a lessor of such property and such use is the lessor’s first use of such property, 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 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, 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. The deduction allowable under paragraph (1) shall be taken into account in computing any recapture amount under section 280F(b)(2). in the case of an automobile placed in service during 2018, $6,400, and in the case of an automobile placed in service during 2019, $4,800. For purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified property shall be determined without regard to any adjustment under section 56. a qualified film or television production shall be considered to be placed in service at the time of initial release or broadcast, a qualified live theatrical production shall be considered to be placed in service at the time of the initial live staged performance, and a qualified sound recording production shall be considered to be placed in service at the time of initial release or broadcast. a depreciation deduction equal to 100 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 the adjusted basis of such specified plant shall be reduced by the amount of such deduction. any tree or vine which bears fruits or nuts, and any other plant which will have more than one crop or 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 a marketable crop or yield of fruits or nuts. An election under this paragraph may be revoked only with the consent of the Secretary. If this paragraph applies to any specified plant, such specified plant shall not be treated as qualified property in the taxable year in which placed in service. Rules similar to the rules of paragraph (2)(G) shall apply for purposes of this paragraph. If a taxpayer makes an election under this paragraph with respect to any class of property for any taxable year, paragraphs (1) and (2)(F) shall not apply to any qualified property in such class placed in service during such taxable year. An election under this paragraph may be revoked only with the consent of the Secretary. any property which is primarily used in a trade or business described in clause (iv) of section 163(j)(7)(A), or any property used in a trade or business that has had floor plan financing indebtedness (as defined in paragraph (9) of section 163(j)), if the floor plan financing interest related to such indebtedness was taken into account under paragraph (1)(C) of such section. in the case of property which is not described in clause (ii), by substituting “40 percent” for “100 percent”, or in the case of property which is described in subparagraph (B) or (C) of paragraph (2), by substituting “60 percent” for “100 percent”. In the case of any specified plant planted or grafted by the taxpayer during the first taxable year ending after January 19, 2025 , if the taxpayer elects to have this paragraph apply for such taxable year, paragraph (5)(A)(i) shall be applied by substituting “40 percent” for “100 percent”. Any election under this paragraph shall be made at such time and in such form and manner as the Secretary may prescribe. the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 50 percent of the adjusted basis of such property, and the adjusted basis of such property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year. which is used in the United States solely to produce second generation biofuel (as defined in section 40(b)(6)(E)), the original use of which commences with the taxpayer after the date of the enactment of this subsection, which is acquired by the taxpayer by purchase (as defined in section 179(d)) after the date of the enactment of this subsection, but only if no written binding contract for the acquisition was in effect on or before the date of the enactment of this subsection, and which is placed in service by the taxpayer before January 1, 2021 . Such term shall not include any property to which subsection (k) applies. Such term shall not include any property described in subsection (k)(2)(D). Such term shall not include any property any portion of which is financed with the proceeds of any obligation the interest on which is exempt from tax under section 103. If a taxpayer makes an election under this subparagraph with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year. For purposes of this subsection, rules similar to the rules of subsection (k)(2)(E) shall apply. For purposes of this subsection, rules similar to the rules of subsection (k)(2)(G) shall apply. For purposes of this subsection, rules similar to the rules under section 179(d)(10) shall apply with respect to any qualified second generation biofuel plant property which ceases to be qualified second generation biofuel plant property. Paragraph (1) shall not apply to any qualified second generation biofuel plant property with respect to which an election has been made under section 179C (relating to election to expense certain refineries). the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 50 percent of the adjusted basis of the qualified reuse and recycling property, and the adjusted basis of the qualified reuse and recycling property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year. to which this section applies, which has a useful life of at least 5 years, the original use of which commences with the taxpayer after August 31, 2008 , and acquired by purchase (as defined in section 179(d)(2)) by the taxpayer after August 31, 2008 , but only if no written binding contract for the acquisition was in effect before September 1, 2008 , or acquired by the taxpayer pursuant to a written binding contract which was entered into after August 31, 2008 . The term “qualified reuse and recycling property” shall not include any property to which subsection (k) (determined without regard to paragraph (4) thereof) applies. The term “qualified reuse and recycling property” shall not include any property to which the alternative depreciation system under subsection (g) applies, determined without regard to paragraph (7) of subsection (g) (relating to election to have system apply). If a taxpayer makes an election under this clause with respect to any class of property for any taxable year, this subsection shall not apply to all property in such class placed in service during such taxable year. In the case of a taxpayer manufacturing, constructing, or producing property for the taxpayer’s own use, the requirements of clause (iv) of subparagraph (A) shall be treated as met if the taxpayer begins manufacturing, constructing, or producing the property after August 31, 2008 . For purposes of determining alternative minimum taxable income under section 55, the deduction under subsection (a) for qualified reuse and recycling property shall be determined under this section without regard to any adjustment under section 56. The term “reuse and recycling property” means any machinery and equipment (not including buildings or real estate), along with all appurtenances thereto, including software necessary to operate such equipment, which is used exclusively to collect, distribute, or recycle qualified reuse and recyclable materials. Such term does not include rolling stock or other equipment used to transport reuse and recyclable materials. The term “qualified reuse and recyclable materials” means scrap plastic, scrap glass, scrap textiles, scrap rubber, scrap packaging, recovered fiber, scrap ferrous and nonferrous metals, or electronic scrap generated by an individual or business. any cathode ray tube, flat panel screen, or similar video display device with a screen size greater than 4 inches measured diagonally, or any central processing unit. The term “recycling” or “recycle” means that process (including sorting) by which worn or superfluous materials are manufactured or processed into specification grade commodities that are suitable for use as a replacement or substitute for virgin materials in manufacturing tangible consumer and commercial products, including packaging. the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 100 percent of the adjusted basis of the qualified production property, and the adjusted basis of the qualified production property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year. to which this section applies, which is used by the taxpayer as an integral part of a qualified production activity, which is placed in service in the United States or any possession of the United States, the original use of which commences with the taxpayer, the construction of which begins after January 19, 2025 , and before January 1, 2029 , which is designated by the taxpayer in the election made under this subsection, and which is placed in service before January 1, 2031 . such property was not used in a qualified production activity (determined without regard to the second sentence of subparagraph (D)) by any person at any time during the period beginning on January 1, 2021 , and ending on May 12, 2025 , such property was not used by the taxpayer at any time prior to such acquisition, and the acquisition of such property meets the requirements of paragraphs (2)(A), (2)(B), (2)(C), and (3) of section 179(d). whether such property is acquired before the period described in subparagraph (A)(v), such property shall be treated as acquired not later than the date on which the taxpayer enters into a written binding contract for such acquisition, and whether such property is acquired after such period, such property shall be treated as acquired not earlier than such date. The term “qualified production property” shall not include that portion of any nonresidential real property which is used for offices, administrative services, lodging, parking, sales activities, research activities, software development or engineering activities, or other functions unrelated to the manufacturing, production, or refining of tangible personal property. The term “qualified production activity” means the manufacturing, production, or refining of a qualified product. The activities of any taxpayer do not constitute manufacturing, production, or refining of a qualified product unless the activities of such taxpayer result in a substantial transformation of the property comprising the product. The term “production” shall not include activities other than agricultural production and chemical production. The term “qualified product” means any tangible personal property if such property is not a food or beverage prepared in the same building as a retail establishment in which such property is sold. For purposes of subparagraph (A)(iv), rules similar to the rules of subsection (k)(2)(E)(iii) shall apply. The Secretary may extend the date under subparagraph (A)(vii) with respect to any property that meets the requirements of clauses (i) through (vi) of subparagraph (A) if the Secretary determines that an act of God (as defined in section 101(1) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980) prevents the taxpayer from placing such property in service before such date. For purposes of determining alternative minimum taxable income under section 55, the deduction under section 167 for qualified production property shall be determined under this section without regard to any adjustment under section 56. qualified production property shall be treated as a separate class of property, and the taxpayer shall be treated as having made an election under such subsections with respect to such class. The term “qualified production property” shall not include any property to which the alternative depreciation system under subsection (g) applies. For purposes of subsection (g)(7)(A), qualified production property to which this subsection applies shall be treated as separate nonresidential real property. by treating such property as having been disposed of by the taxpayer as of the first time such property is so used in a productive use not described in paragraph (2)(A)(ii), and by treating the amount described in subparagraph (B) of section 1245(a)(1) with respect to such disposition as being not less than the amount described in subparagraph (A) of such section, and the basis of the taxpayer in such property, and the taxpayer’s allowance for depreciation with respect to such property, shall be appropriately adjusted to take into account amounts recognized by reason of subparagraph (A). specify the nonresidential real property subject to the election and the portion of such property designated under paragraph (2)(A)(vi), and except as otherwise provided by the Secretary, be made on the taxpayer’s return of the tax imposed by this chapter for the taxable year. Any election made under this subsection, and any specification contained in any such election, may not be revoked except with the consent of the Secretary (and the Secretary shall provide such consent only in extraordinary circumstances). providing rules for regarding what constitutes substantial transformation of property which are consistent with guidance provided under section 954(d), and providing for the application of paragraph (5) with respect to a change in use described in such paragraph by a transferee following a fully or partially tax free transfer of qualified production property. Except as otherwise provided in this subsection, the amendments made by this section [amending this section and section 460 of this title ] shall apply to property acquired after January 19, 2025 . Except as provided in paragraph (3), in the case of any specified plant (as defined in section 168(k)(5)(B) of the Internal Revenue Code of 1986, as amended by this section), the amendments made by this section shall apply to such plants which are planted or grafted after January 19, 2025 . The amendment made by subsection (b)(3) [amending this section] shall apply to taxable years ending after January 19, 2025 . For purposes of paragraph (1), property shall not be treated as acquired after the date on which a written binding contract is entered into for such acquisition.” For purposes of applying section 168(k) of the Internal Revenue Code of 1986, as in effect on the day before the date of the enactment of Public Law 115–97 [ Dec. 22, 2017 ], with respect to property acquired before September 28, 2017 , paragraph (6) thereof shall be treated as reading as follows (and as having been included in section 143 of the Protecting Americans from Tax Hikes Act of 2015 [ Pub. L. 114–113 ]): “ ‘(6) Phase-down .—In the case of qualified property placed in service by the taxpayer after December 31, 2017 ( December 31, 2018 , in the case of property described in subparagraph (B) or (C) of paragraph (2)), paragraph (1)(A) shall be applied by substituting for “50 percent”— “ ‘(A) “40 percent” in the case of— “ ‘(i) property placed in service in 2018 (other than property described in subparagraph (B) or (C) of paragraph (2)), and “ ‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2019, and “ ‘(B) “30 percent” in the case of— “ ‘(i) property placed in service in 2019 (other than property described in subparagraph (B) or (C) of paragraph (2)), and “ ‘(ii) property described in subparagraph (B) or (C) of paragraph (2) which is placed in service in 2020.’ by substituting ‘paragraphs (1), (2)(F), and (4)’ for ‘paragraphs (1) and (2)(F)’, and as if the application of such substitution had been included in section 143 of the Protecting Americans from Tax Hikes Act of 2015.” is acquired after September 27, 2017 , and is placed in service after such date. The amendments made by this section shall apply to specified plants planted or grafted after September 27, 2017 .” Except as provided in paragraphs (2) and (3), the amendments made by this section [amending this section] shall apply to property placed in service after December 31, 2017 . The amendments made by subsection (a)(3)(A) [amending this section] shall apply to taxable years beginning after December 31, 2017 . which was placed in service before January 1, 2018 , which is held by an electing real property trade or business (as defined in section 163(j)(7)(B) of the Internal Revenue Code of 1986), and for which subparagraph (A), (B), (C), (D), or (E) of section 168(g)(1) of the Internal Revenue Code of 1986 did not apply prior to such date, the amendments made by subsection (a)(3)(C) shall apply to taxable years beginning after December 31, 2017 .” Except as provided in subparagraph (B), the amendments made by this subsection [amending this section and section 460 of this title ] shall apply to property placed in service after December 31, 2014 , in taxable years ending after such date. The amendments made by paragraph (3) [amending this section] shall apply to taxable years ending after December 31, 2014 .” Except as otherwise provided in this paragraph, the amendments made by this subsection [amending this section and sections 263A and 460 of this title] shall apply to property placed in service after December 31, 2015 , in taxable years ending after such date. the maximum increase amount (within the meaning of section 168(k)(4)(C)(iii) of such Code, as in effect before the amendments made by this subsection), multiplied by a fraction the numerator of which is the number of days in the taxable year before January 1, 2016 , and the denominator of which is the number of days in the taxable year, plus such limitation (determined without regard to this subparagraph), multiplied by a fraction the numerator of which is the number of days in the taxable year after December 31, 2015 , and the denominator of which is the number of days in the taxable year. The amendments made by paragraph (4) [amending this section] (other than subparagraph (A) thereof) shall apply to specified plants (as defined in section 168(k)(5)(B) of the Internal Revenue Code of 1986, as amended by this subsection) planted or grafted after December 31, 2015 .” The amendment made by subsection (a) [amending this section] shall apply to property placed in service after December 31, 2014 . The amendments made by subsection (b) [amending this section] shall apply to taxable years beginning after December 31, 2015 .” Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1400L and 1400N of this title] shall apply to property placed in service after December 31, 2010 , in taxable years ending after such date. The amendment made by subsection (b) [amending this section] shall apply to property placed in service after September 8, 2010 , in taxable years ending after such date.” Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 1400N and 6211 of this title] shall apply to property placed in service after December 31, 2008 , in taxable years ending after such date. The amendments made by subsections (a)(3) [amending this section and section 6211 of this title ] and (b)(2) [amending section 6211 of this title ] shall apply to taxable years ending after March 31, 2008 .” The amendments made by this section [amending this section] shall apply to property placed in service after April 11, 2005 . The amendments made by this section [amending this section] shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before April 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date.” The amendments made by this section [amending this section] shall apply to property placed in service after April 11, 2005 . The amendments made by this section [amending this section] shall not apply to any property with respect to which the taxpayer or a related party has entered into a binding contract for the construction thereof on or before April 11, 2005 , or, in the case of self-constructed property, has started construction on or before such date.” The amendments made by this section [amending this section] shall apply to any property placed in service after the date of the enactment of this Act [ Oct. 22, 2004 ]. In the case of race track facilities placed in service after the date of the enactment of this Act, such facilities shall not be treated as theme and amusement facilities classified under asset class 80.0. Nothing in this section or the amendments made by this section shall be construed to affect the treatment of property placed in service on or before the date of the enactment of this Act.” with respect to property (with an applicable recovery period under section 168(j) of the Internal Revenue Code of 1986 of 6 years or less) held by the taxpayer if the taxpayer claimed the benefits of section 168(j) of such Code with respect to such property on a return filed before March 18, 1997 , but only if such return is the first return of tax filed for the taxable year in which such property was placed in service, or with respect to wages for which the taxpayer claimed the benefits of section 45A of such Code for a taxable year on a return filed before March 18, 1997 , but only if such return was the first return of tax filed for such taxable year.” Except as provided in paragraph (2), the amendment made by subsection (a) [amending this section] shall apply to property placed in service by the taxpayer on or after May 13, 1993 . the taxpayer or a qualified person entered into a binding written contract to purchase or construct such property before May 13, 1993 , or the construction of such property was commenced by or for the taxpayer or a qualified person before May 13, 1993 . Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after December 31, 1988 . is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on July 14, 1988 , or is constructed or reconstructed by the taxpayer and such construction or reconstruction began by July 14, 1988 .” Except as provided in paragraph (2), the amendments made by this section [amending this section] shall apply to property placed in service after December 31, 1988 . is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on July 14, 1988 , or is constructed or reconstructed by the taxpayer and such construction or reconstruction began by July 14, 1988 .” Except as provided in this section, section 204, and section 251(d) [set out as a note under section 46 of this title ], the amendments made by section 201 [amending sections 46, 167, 168, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall apply to property placed in service after December 31, 1986 , in taxable years ending after such date. A taxpayer may elect (at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe) to have the amendments made by section 201 apply to any property placed in service after July 31, 1986 , and before January 1, 1987 . No election may be made under this subparagraph with respect to property to which section 168 of the Internal Revenue Code of 1986 would not apply by reason of section 168(f)(5) of such Code if such property were placed in service after December 31, 1986 . The amendments made by section 202 [amending section 179 of this title ] shall apply to property placed in service after December 31, 1986 , in taxable years ending after such date. the limitation of section 179(b)(1) of the Internal Revenue Code of 1986 (as amended by section 202) shall be reduced by the aggregate deduction under section 179 (as in effect on the day before the date of the enactment of the Tax Reform Act of 1986 [ Oct. 22, 1986 ]) for section 179 property placed in service during such taxable year and before January 1, 1987 , the limitation of section 179(b)(2) of such Code (as so amended) shall be applied by taking into account the cost of all section 179 property placed in service during such taxable year, and the limitation of section 179(b)(3) of such Code shall be applied by taking into account the taxable income for the entire taxable year reduced by the amount of any deduction under section 179 of such Code for property placed in service during such taxable year and before January 1, 1987 . any property which is constructed, reconstructed, or acquired by the taxpayer pursuant to a written contract which was binding on March 1, 1986 , the lesser of (I) $1,000,000, or (II) 5 percent of the cost of such property has been incurred or committed by March 1, 1986 , and the construction or reconstruction of such property began by such date, or an equipped building or plant facility if construction has commenced as of March 1, 1986 , pursuant to a written specific plan and more than one-half of the cost of such equipped building or facility has been incurred or committed by such date. Paragraph (1) and section 204(a) (other than paragraph (8) or (12) thereof) shall not apply to any property unless such property has a class life of at least 7 years and is placed in service before the applicable date determined under the following table: “In the case of property The applicable with a class life of: date is: At least 7 but less than 20 years January 1, 1989 20 years or more January 1, 1991 . In the case of residential rental property and nonresidential real property, the applicable date is January 1, 1991 . the class life of property to which section 168(g)(3)(B) of the Internal Revenue Code of 1986 (as added by section 201) applies shall be the class life in effect on January 1, 1986 , except that computer-based telephone central office switching equipment described in section 168(e)(3)(B)(iii) of such Code shall be treated as having a class life of 6 years, property described in section 204(a) shall be treated as having a class life of 20 years, and property with no class life shall be treated as having a class life of 12 years. If any provision of this Act [see Tables for classification] substitutes a date for an applicable date, this paragraph shall be applied by using such date. in whose hands such property met the requirements of paragraphs (1) and (2) or section 204(a) (or would have met such requirements if placed in service by such person), or who placed the property in service before January 1, 1987 , a self-contained single operating unit or processing operation, located on a single site, and identified as a single unitary project as of March 1, 1986 . Except as otherwise provided in this subsection or section 204, subparagraph (C) of section 168(g)(1) of the Internal Revenue Code of 1986 (as added by this Act) shall apply to property placed in service after December 31, 1986 , in taxable years ending after such date, to the extent such property is financed by the proceeds of an obligation (including a refunding obligation) issued after March 1, 1986 . the original use of which commences with the taxpayer, and the construction, reconstruction, or rehabilitation of which began before March 2, 1986 , and was completed on or after such date, with respect to which a binding contract to incur significant expenditures for construction, reconstruction, or rehabilitation was entered into before March 2, 1986 , and some of such expenditures are incurred on or after such date, or acquired on or after March 2, 1986 , pursuant to a binding contract entered into before such date, and described in an inducement resolution or other comparable preliminary approval adopted by the issuing authority (or by a voter referendum) before March 2, 1986 . Except as provided in clause (ii), in the case of property placed in service after December 31, 1986 , which is financed by the proceeds of an obligation which is issued solely to refund another obligation which was issued before March 2, 1986 , subparagraph (C) of section 168(g)(1) of such Code (as so added) shall apply only with respect to an amount equal to the basis in such property which has not been recovered before the date such refunded obligation is issued. In the case of facilities the original use of which commences with the taxpayer and with respect to which significant expenditures are made before January 1, 1987 , subparagraph (C) of section 168(g)(1) of such Code (as so added) shall not apply with respect to such facilities to the extent such facilities are financed by the proceeds of an obligation issued solely to refund another obligation which was issued before March 2, 1986 . In the case of an inducement resolution or other comparable preliminary approval adopted by an issuing authority before March 2, 1986 , for purposes of subparagraphs (A) and (B)(ii) with respect to obligations described in such resolution, the term ‘facilities’ means the facilities described in such resolution. For purposes of this paragraph, the term ‘significant expenditures’ means expenditures greater than 10 percent of the reasonably anticipated cost of the construction, reconstruction, or rehabilitation of the facility involved. In the case of any taxable year beginning before October 1, 1987 in which property to which the amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] do not apply is placed in service, such property shall be taken into account in determining whether section 168(d)(3) of the Internal Revenue Code of 1986 (as added by section 201) applies for such taxable year to property to which such amendments apply. The preceding sentence shall only apply to property which would be taken into account if such amendments did apply. A normalization method of accounting shall not be treated as being used with respect to any public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 1986 if the taxpayer, in computing its cost of service for ratemaking purposes and reflecting operating results in its regulated books of account, reduces the excess tax reserve more rapidly or to a greater extent than such reserve would be reduced under the average rate assumption method. the reserve for deferred taxes (as described in section 167( l )(3)(G)(ii) or 168(e)(3)(B)(ii) of the Internal Revenue Code of 1954 as in effect on the day before the date of the enactment of this Act [ Oct. 22, 1986 ]), over the amount which would be the balance in such reserve if the amount of such reserve were determined by assuming that the corporate rate reductions provided in this Act [see Tables for classification] were in effect for all prior periods. the ratio of the aggregate deferred taxes for the property to the aggregate timing differences for the property as of the beginning of the period in question, by the amount of the timing differences which reverse during such period. The amendments made by section 201 [amending this section and sections 46, 167, 178, 179, 280F, 291, 312, 465, 467, 514, 751, 1245, 4162, 6111, and 7701 of this title] shall not apply to any property which is an integral part of any qualified urban renovation project. described in subparagraph (C), (D), (E), or (G) which before March 1, 1986 , was publicly announced by a political subdivision of a State for a renovation of an urban area within its jurisdiction, described in subparagraph (C), (D) or (G) which before March 1, 1986 , was identified as a single unitary project in the internal financing plans of the primary developer of the project, described in subparagraph (C) or (D), which is not substantially modified on or after March 1, 1986 , and described in subparagraph (F) or (H). a political subdivision granted on July 11, 1985 , development rights to the primary developer-purchaser of such project, and such project was the subject of a development agreement between a political subdivision and a bridge authority on December 19, 1984 . A project is described in this clause if the development agreement with respect thereto was entered into during April 1984 and the estimated cost of the project is approximately $194,000,000. A project is described in this clause if the development agreement with respect thereto was entered into during May 1984 and the estimated cost of the project is approximately $190,000,000. A project is described in this clause if the project has an estimated cost of approximately $92,000,000 and at least $7,000,000 was spent before September 26, 1985 , with respect to such project. A project is described in this clause if the estimated project cost is approximately $39,000,000 and at least $2,000,000 of construction cost for such project were incurred before September 26, 1985 . A project is described in this clause if the development agreement with respect thereto was entered into before September 26, 1985 , and the estimated cost of the project is approximately $150,000,000. A project is described in this clause if the board of directors of the primary developer approved such project in December 1982, and the estimated cost of such project is approximately $107,000,000. A project is described in this clause if the board of directors of the primary developer approved such project in December 1982, and the estimated cost of such project is approximately $59,000,000. A project is described in this clause if the Board of Directors of the primary developer approved such project in December 1983, following selection of the developer by a city council on September 26, 1983 , and the estimated cost of such project is approximately $107,000,000. a State or an agency, instrumentality, or political subdivision thereof approved the filing of a general project plan on June 18, 1981 , and on October 4, 1984 , a State or an agency, instrumentality, or political subdivision thereof confirmed such plan, the project plan as confirmed on October 4, 1984 , included construction or renovation of office buildings, a hotel, a trade mart, theaters, and a subway complex, and significant segments of such project were the subject of one or more conditional designations granted by a State or an agency, instrumentality, or political subdivision thereof to one or more developers before January 1, 1985 . is to be used by both a National Hockey League team and a National Basketball Association team; is to be constructed on a platform utilizing air rights over land acquired by a State authority and identified as site B in a report dated May 30, 1984 , prepared for a State urban development corporation; and is eligible for real property tax, and power and energy benefits pursuant to the provisions of State legislation approved and effective July 7, 1982 . to be constructed above a public railroad station utilized by the national railroad passenger corporation and commuter railroads serving two States; and will include the reconstruction of such station so as to make it a more efficient transportation center and to better integrate the station with the development above, such reconstruction plans to be prepared in cooperation with a State transportation authority. an inducement resolution was passed on March 9, 1984 , for the issuance of obligations with respect to such project, such resolution was extended by resolutions passed on August 14, 1984 , April 2, 1985 , August 13, 1985 , and July 8, 1986 , an application was submitted on January 31, 1984 , for an Urban Development Action Grant with respect to such project, and an Urban Development Action Grant was preliminarily approved for all or part of such project on July 3, 1986 . A project is described in this subparagraph if it is a redevelopment project, with respect to which $10,000,000 in industrial revenue bonds were approved by a State Development Finance Authority on January 15, 1986 , a village transferred approximately $4,000,000 of bond volume authority to the State in June 1986, and a binding Redevelopment Agreement was executed between a city and the development team on June 30, 1986 . which is certified by the Federal Energy Regulatory Commission before March 2, 1986 , as a qualifying facility for purposes of the Public Utility Regulatory Policies Act of 1978 [see Short Title note set out under 16 U.S.C. 2601 ], which was granted before March 2, 1986 , a hydroelectric license for such project by the Federal Energy Regulatory Commission, or which is a hydroelectric project of less than 80 megawatts that filed an application for a permit, exemption, or license with the Federal Energy Regulatory Commission before March 2, 1986 . The amendments made by section 201 shall not apply to any property which is readily identifiable with and necessary to carry out a written supply or service contract, or agreement to lease, which was binding on March 1, 1986 . to property described in section 12(c)(2) (as amended by the Technical and Miscellaneous Revenue Act of 1988), 31(g)(5), or 31(g)(17)(J) of the Tax Reform Act of 1984 [sections 12(c)(2) and 31(g)(5), (17)(J) of Pub. L. 98–369 , set out below], to property described in section 209(d)(1)(B) of the Tax Equity and Fiscal Responsibility Act of 1982, as amended by the Tax Reform Act of 1984 [ section 209(d)(1)(B) of Pub. L. 97–248 , as amended, set out below], and to property described in section 216(b)(3) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 216(b)(3) of Pub. L. 97–248 , set out below]. the project involves production platforms for offshore drilling, oil and gas pipeline to shore, process and storage facilities, and a marine terminal, and at least $900,000,000 of the costs of such project were incurred before September 26, 1985 . such project involves a fiber optic network of at least 20,000 miles, and before September 26, 1985 , construction commenced pursuant to the master plan and at least $85,000,000 was spent on construction. such project passes through at least 10 States and involves intercity communication links (including one or more repeater sites, terminals and junction stations for microwave transmissions, regenerators or fiber optics and other related equipment), the lesser of $150,000,000 or 5 percent of the total project cost has been expended, incurred, or committed before March 2, 1986 , by one or more taxpayers each of which is a member of the same affiliated group (as defined in section 1504(a) [of the Internal Revenue Code of 1986]), and a November 5, 1985 , presentation made to and accepted by the Chairman of the Board and the president of the taxpayer, or the approvals by the Board of Directors of the parent company of the taxpayer on May 3, 1985 , and September 22, 1985 , and of the executive committee of said board on December 23, 1985 . such project is part of a flat rolled product modernization plan which was initially presented to the Board of Directors of the taxpayer on July 8, 1983 , such program will be carried out at 3 locations, and such project will involve a total estimated minimum capital cost of at least $250,000,000. the project includes a production line which applies a thin coating to glass in the manufacture of energy efficient residential products, if approved by the management committee of the corporation on January 29, 1986 , the project is a turbogenerator which was approved by the president of such corporation and at least $1,000,000 of the cost of which was incurred or committed before such date, the project is a waste-to-energy disposal system which was initially approved by the management committee of the corporation on March 29, 1982 , and at least $5,000,000 of the cost of which was incurred before September 26, 1985 , the project, which involves the expansion of an existing service facility and the addition of new lab facilities needed to accommodate topcoat and undercoat production needs of a nearby automotive assembly plant, was approved by the corporation’s management committee on March 5, 1986 , or the project is part of a facility to consolidate and modernize the silica production of such corporation and the project was approved by the president of such corporation on August 19, 1985 . such project involves a port terminal and oil pipeline extending generally from the area of Los Angeles, California, to the area of Midland, Texas, and before September 26, 1985 , there is a binding contract for dredging and channeling with respect thereto and a management contract with a construction manager for such project. the project is a newspaper printing and distribution plant project with respect to which a contract for the purchase of 8 printing press units and related equipment to be installed in a single press line was entered into on January 8, 1985 , and the contract price for such units and equipment represents at least 50 percent of the total cost of such project. A project is described in this subparagraph if it is the second phase of a project involving direct current transmission lines spanning approximately 190 miles from the United States-Canadian border to Ayer, Massachusetts, alternating current transmission lines in Massachusetts from Ayers to Millbury to West Medway, DC–AC converted terminals to Monroe, New Hampshire, and Ayer, Massachusetts, and other related equipment and facilities. A project is described in this subparagraph if it involves not more than two natural gas-fired combined cycle electric generating units each having a net electrical capability of approximately 233 megawatts, and a sales contract for approximately one-half of the output of the 1st unit was entered into in December 1985. the project involves an automobile manufacturing facility (including equipment and incidental appurtenances) to be located in the United States, and the project was the subject of a memorandum of understanding between 2 automobile manufacturers that was signed before September 25, 1985 , the automobile manufacturing facility (including equipment and incidental appurtenances) will involve a total estimated cost of approximately $750,000,000, and will have an annual production capacity of approximately 240,000 vehicles or the Board of Directors of an automobile manufacturer approved a written plan for the conversion of existing facilities to produce new models of a vehicle not currently produced in the United States, such facilities will be placed in service by July 1, 1987 , and such Board action occurred in July 1985 with respect to a $602,000,000 expenditure, a $438,000,000 expenditure, and a $321,000,000 expenditure. the project involves a joint venture between a utility company and a paper company for a supercalendered paper mill, and at least $50,000,000 was incurred or committed with respect to such project before March 1, 1986 , or the project involves a paper mill for the manufacture of newsprint (including a cogeneration facility) is generally based on a written design and feasibility study that was completed on December 15, 1981 , and will be placed in service before January 1, 1991 , or the project is undertaken by a Maine corporation and involves the modernization of pulp and paper mills in Millinocket and/or East Millinocket, Maine, or the project involves the installation of a paper machine for production of coated publication papers, the modernization of a pulp mill, and the installation of machinery and equipment with respect to related processes, as of December 31, 1985 , in excess of $50,000,000 was incurred for the project, as of July 1986, in excess of $150,000,000 was incurred for the project, and the project is located in Pine Bluff, Arkansas, or the project involves property of a type described in ADR classes 26.1, 26.2, 25, 00.3 and 00.4 included in a paper plant which will manufacture and distribute tissue, towel or napkin products; is located in Effingham County, Georgia; and is generally based upon a written General Description which was submitted to the Georgia Department of Revenue on or about June 13, 1985 . a letter of intent with respect to such project was executed on June 4, 1985 , and a 5-percent downpayment was made in connection with such project for 2 10-unit press lines and related equipment. the project involves the retrofit of ammonia plants, as of March 1, 1986 , more than $390,000 had been expended for engineering and equipment, and more than $170,000 was expensed in 1985 as a portion of preliminary engineering expense. more than $2,290,000 of expenditures were made before March 1, 1986 , with respect to a project involving up to 300 platforms, or more than $95,000 of expenditures were made before March 1, 1986 , with respect to a project involving up to 850 platforms. the project involves the production and transportation of oil and gas from a well located north of the Arctic Circle, and more than $200,000,000 of cost had been incurred or committed before September 26, 1985 . a commitment letter was entered into with a financial institution on January 23, 1986 , for the financing of the project, the project involves intercity communication links (including microwave and fiber optics communications systems and related property), Omaha, Nebraska, and Council Bluffs, Iowa, Waterloo, Iowa and Sioux City, Iowa, Davenport, Iowa and Springfield, Illinois, and the estimated cost of such project is approximately $13,000,000. such project is a mining modernization project involving mining, transport, and milling operations, before September 26, 1985 , at least $20,000,000 was expended for engineering studies which were approved by the Board of Directors of the taxpayer on January 27, 1983 , and such project will involve a total estimated minimum cost of $350,000,000. such project is a dragline acquired in connection with a 3-stage program which began in 1980 to increase production from a coal mine, at least $35,000,000 was spent before September 26, 1985 , on the 1st 2 stages of the program, and at least $4,000,000 was spent to prepare the mine site for the dragline. convertible subordinated debentures were issued in August 1985, to finance the project, construction of the project was authorized by the Board of Directors of the taxpayer on or before December 31, 1985 , at least $750,000 was paid or incurred with respect to the project on or before December 31, 1985 , and the project is placed in service on or before December 31, 1986 . the approximate cost of which is $675,000,000, of which approximately $400,000,000 was spent on off-site construction, the approximate cost of which is $445,000,000, of which approximately $400,000,000 was spent on off-site construction and more than 50 percent of the project cost was spent prior to December 31, 1985 , or the approximate cost of which is $375,000,000, of which approximately $260,000,000 was spent on off-site construction. A project is described in this subparagraph if it involves the connecting of existing retail stores in the downtown area of a city to a new covered area, the total project will be 250,000 square feet, a formal Memorandum of Understanding relating to development of the project was executed with the city on July 2, 1986 , and the estimated cost of the project is $18,186,424. A project is described in this subparagraph if it includes a 200,000 square foot office tower, a 200-room hotel, a 300,000 square foot retail center, an 800-space parking facility, the total cost is projected to be $60,000,000, and $1,250,000 was expended with respect to the site before August 25, 1986 . is developed within certain air space rights and upon real property exchanged for such joint use and development project which is owned or acquired by a state department of transportation, a regional mass transit district in a county with a population of at least 5,000,000 and a community redevelopment agency; such project affects an existing, approximately 40 acre public mass transportation bus-way terminal facility located adjacent to an interstate highway; a memorandum of understanding with respect to such joint use and development project is executed by a state department of transportation, such a county regional mass transit district and a community redevelopment agency on or before December 31, 1986 , and a major portion of such joint use and development project is placed in service by December 31, 1990 . it is an $8,000,000 project to provide advanced control technology for adipic acid at a plant, which was authorized by the company’s Board of Directors in October 1985, at December 31, 1985 , $1,400,000 was committed and $400,000 expended with respect to such project, or it is an $8,300,000 project to achieve compliance with State and Federal regulations for particulates emissions, which was authorized by the company’s Board of Directors in December 1985, by March 31, 1986 , $250,000 was committed and $250,000 was expended with respect to such project, or it is a $22,000,000 project for the retrofit of a plant that makes a raw material for aspartame, which was approved in the company’s December 1985 capital budget, if approximately $3,000,000 of the $22,000,000 was spent before August 1, 1986 . A project is described in this subparagraph if such project passes through at least 9 States and involves an intercity communication link (including multiple repeater sites and junction stations for microwave transmissions and amplifiers for fiber optics); the link from Buffalo to New York/Elizabeth was completed in 1984; the link from Buffalo to Chicago was completed in 1985; and the link from New York to Washington is completed in 1986. such project involves a fiber optic network of at least 475 miles, passing through Minnesota and Wisconsin; and before January 1, 1986 , at least $15,000,000 was expended or committed for electronic equipment or fiber optic cable to be used in constructing the network. 3 applications for the construction of such pipeline were filed with the Federal Energy Regulatory Commission before November 22, 1985 (and 2 of which were filed before September 26, 1985 ), and such pipeline has 1 of its terminal points near Bakersfield, California. the lessee or an affiliate is the original lessee of each building in which such property is to be used, such lessee is obligated to lease the building under an agreement to lease entered into before September 26, 1985 , and such property is provided for such building, and such buildings are to serve as world headquarters of the lessee and its affiliates. there is a binding written contract between a service recipient and a service provider with respect to the operation of such facility to pay for the services to be provided by such facility, a service recipient or governmental unit (or any entity related to such recipient or unit) made a financial commitment of at least $200,000 for the financing or construction of such facility, such facility is the Tri-Cities Solid Waste Recovery Project involving Fremont, Newark, and Union City, California, and has received an authority to construct from the Environmental Protection Agency or from a State or local agency authorized by the Environmental Protection Agency to issue air quality permits under the Clean Air Act [ 42 U.S.C. 7401 et seq.], a bond volume carryforward election was made for the facility and the facility is for Chattanooga, Knoxville, or Kingsport, Tennessee, or such facility is to serve Haverhill, Massachusetts. In the case of a binding contract entered into on October 30, 1984 , for the purchase of 6 semi-submersible drilling units at a cost of $425,000,000, such units shall be treated as having an applicable date under subsection [section] 203(b)(2) of January 1, 1991 . site preparation for such facility commenced before September 1985, and a parish council approved a service agreement with respect to such facility on December 4, 1985 ; a city-parish advertised in September 1985, for bids for construction of secondary treatment improvements for such facility, in May 1985, the city-parish received statements from 16 firms interested in privatizing the wastewater treatment facilities, and the metropolitan council selected a privatizer at its meeting on November 20, 1985 , and adopted a resolution authorizing the Mayor to enter into contractual negotiation with the selected privatizer; the property is part of a wastewater treatment facility serving Greenville, South Carolina with respect to which a binding service agreement between a privatizer and the Western Carolina Regional Sewer Authority with respect to such facility was signed before January 1, 1986 ; or such property is part of a wastewater treatment facility (located in Cameron County, Texas, within one mile of the City of Harlingen), an application for a wastewater discharge permit was filed with respect to such facility on December 4, 1985 , and a City Commission approved a letter of intent relating to a service agreement with respect to such facility on August 7, 1986 ; or a wastewater facility (located in Harlingen, Texas) which is a subject of such letter of intent and service agreement and the design of which was contracted for in a letter of intent dated January 23, 1986 . the aircraft is manufactured in the United States. For purposes of this subparagraph, an aircraft is ‘manufactured’ at the point of its final assembly, the aircraft was in inventory or in the planned production schedule of the final assembly manufacturer, with orders placed for the engine(s) on or before August 16, 1986 , and the aircraft is purchased or subject to a binding contract on or before December 31, 1986 , and is delivered and placed in service by the purchaser, before July 1, 1987 . an agreement to launch was in existence on that date, or on or before August 5, 1983 , the Federal Communications Commission had authorized the construction and for which the authorized party has a specific although undesignated agreement to launch in existence on January 28, 1986 ; by order adopted on July 25, 1985 , the Federal Communications Commission granted the taxpayer an orbital slot and authorized the taxpayer to launch and operate 2 satellites with a cost of approximately $300,000,000; or the International Telecommunications Satellite Organization or the International Maritime Satellite Organization entered into written binding contracts before May 1, 1985 . The amendments made by section 201 shall not apply to property that is part of a nonwire line system in the Domestic Public Cellular Radio Telecommunications Service for which the Federal Communications Commission has issued a construction permit before September 26, 1985 , but only if such property is placed in service before January 1, 1987 . at least $100,000 was paid or incurred with respect to the project before March 1, 1986 , a memorandum of understanding was executed on September 13, 1985 , and the project is placed in service before January 1, 1989 , at least $500,000 was paid or incurred with respect to the projects before May 6, 1986 , the projects involve a 22-megawatt combined cycle gas turbine plant and a 45-megawatt coal waste plant, and applications for qualifying facility status were filed with the Federal Energy Regulatory Commission on March 5, 1986 , the project cost approximates $125,000,000 to $140,000,000 and an application was made to the Federal Energy Regulatory Commission in July 1985, an inducement resolution for such facility was adopted on September 10, 1985 , a development authority was given an inducement date of September 10, 1985 , for a loan not to exceed $80,000,000 with respect to such facility, and such facility is expected to have a capacity of approximately 30 megawatts of electric power and 70,000 pounds of steam per hour, at least $1,000,000 was incurred with respect to the project before May 6, 1986 , the project involves a 52-megawatt combined cycle gas turbine plant and a petition was filed with the Connecticut Department of Public Utility Control to approve a power sales agreement with respect to the project on March 27, 1986 , the project has a planned scheduled capacity of approximately 38,000 kilowatts, the project property is placed in service before January 1, 1991 , and the project is operated, established, or constructed pursuant to certain agreements, the negotiation of which began before 1986, with public or municipal utilities conducting business in Massachusetts, or the Board of Regents of Oklahoma State University took official action on July 25, 1986 , with respect to the project. a tax-exempt entity will own an equity interest in all property included in the project (except the coal mine equipment), and at least $72,000,000 was expended in the acquisition of coal leases, land and water rights, engineering studies, and other development costs before May 6, 1986 . The amendments made by section 201 shall not apply to up to $20,000,000 of improvements made by a lessee of any indoor sports facility pursuant to a lease from a State commission granting the right to make limited and specified improvements (including planned seat explanations), if architectural renderings of the project were commissioned and received before December 22, 1985 . The amendments made by section 201 shall not apply to any property which is part of an arena constructed for professional sports activities in a metropolitan area, provided that such arena is capable of seating no less than 18,000 spectators and a binding contract to incur significant expenditures for its construction was entered into before June 1, 1986 . The amendments made by section 201 shall not apply to 2 agricultural waste-to-energy powerplants (and required transmission facilities), in connection with which a contract to sell 100 megawatts of electricity to a city was executed in October 1984. the Board of Directors of an electric power cooperation authorized the investigation of a sale leaseback of a nuclear generation facility by resolution dated January 22, 1985 , and a loan was extended by the Rural Electrification Administration on February 20, 1986 , which contained a covenant with respect to used property leasing from unit II. The amendments made by section 201 shall not apply to a light rail transit system, the approximate cost of which is $235,000,000, if, with respect to which, the board of directors of a corporation (formed in September 1984 for the purpose of developing, financing, and operating the system) authorized a $300,000 expenditure for a feasibility study in April 1985. The amendments made by section 201 shall not apply to any project for rehabilitation of regional railroad rights of way and properties including grade crossings which was authorized by the Board of Directors of such company prior to October 1985; and/or was modified, altered or enlarged as a result of termination of company contracts, but approved by said Board of Directors no later than January 30, 1986 , and which is in the public interest, and which is subject to binding contracts or substantive commitments by December 31, 1987 . The amendments made by section 201 shall not apply to a laundry detergent manufacturing facility, the approximate cost of which is $13,200,000, with respect to which a project agreement was fully executed on March 17, 1986 . The amendments made by section 201 shall not apply to any of 3 resource recovery plants, the aggregate cost of which approximates $300,000,000, if an industrial development authority adopted a bond resolution with respect to such facilities on December 17, 1984 , and the projects were approved by the department of commerce of a Commonwealth on December 27, 1984 . The amendments made by section 201 shall not apply to a computer and office support center building in Minneapolis, with respect to which the first contract, with an architecture firm, was signed on April 30, 1985 , and a construction contract was signed on March 12, 1986 . The amendments made by section 201 shall not apply to pipes, mains, and related equipment included in district heating and cooling facilities, with respect to which the development authority of a State approved the project through an inducement resolution adopted on October 8, 1985 , and in connection with which approximately $11,000,000 of tax-exempt bonds are to be issued. The amendments made by section 201 shall not apply to any offshore vessel the construction contract for which was signed on February 28, 1986 , and the approximate cost of which is $9,000,000. the estimated cost of reconstruction is approximately $39,000,000; reconstruction was commenced prior to December 1, 1985 ; at least $17,000,000 was expended before December 31, 1985 ; and The amendments made by section 201 shall not apply to two new automobile carrier vessels which will cost approximately $47,000,000 and will be constructed by a United States-flag carrier to operate, under the United States-flag and with an American crew, to transport foreign automobiles to the United States, in a case where negotiations for such transportation arrangements commenced in April 1985, formal contract bids were submitted prior to the end of 1985, and definitive transportation contracts were awarded in May 1986. The amendments made by section 201 shall not apply to a 562-foot passenger cruise ship, which was purchased in 1980 for the purpose of returning the vessel to United States service, the approximate cost of refurbishment of which is approximately $47,000,000. The amendments made by section 201 shall not apply to the Muskegon, Michigan, Cross-Lake Ferry project having a projected cost of approximately $7,200,000. The amendments made by section 201 shall not apply to a new automobile carrier vessel, the contract price for which is no greater than $28,000,000, and which will be constructed for and placed in service by OSG Car Carriers, Inc., to transport, under the United States flag and with an American crew, foreign automobiles to North America in a case where negotiations for such transportation arrangements commenced in 1985, and definitive transportation contracts were awarded before June 1986. a 26.5 megawatt plant in Fresno, California, and a 26.5 megawatt plant in Rocklin, California. The amendments made by section 201 shall not apply to property which is a geothermal project of less than 20 megawatts that was certified by the Federal Energy Regulatory Commission on July 14, 1986 , as a qualifying small power production facility for purposes of the Public Utility Regulatory Policies Act of 1978 [see Short Title note set out under 16 U.S.C. 2601 ] pursuant to an application filed with the Federal Energy Regulatory Commission on April 17, 1986 . A mixed use development on the East River the total cost of which is approximately $400,000,000, with respect to which a letter of intent was executed on January 24, 1984 , and with respect to which approximately $2.5 million had been spent by March 1, 1986 . A 356-room hotel, banquet, and conference facility (including 540,000 square feet of office space) the approximate cost of which is $158,000,000, with respect to which a letter of intent was executed on June 1, 1984 , and with respect to which an inducement resolution and bond resolution was adopted on August 20, 1985 . Phase 1 of a 4-phase project involving the construction of laboratory space and ground-floor retail space the estimated cost of which is $22,000,000 and with respect to which a memoradum [sic] of understanding was made on August 29, 1983 . A project involving the development of a 490,000 square foot mixed-use building at 152 W. 57th Street, New York, New York, the estimated cost of which is $100,000,000, and with respect to which a building permit application was filed in May 1986. A mixed-use project containing a 300 unit, 12-story hotel, garage, two multi-rise office buildings, and also included a park, renovated riverboat, and barge with festival marketplace, the capital outlays for which approximate $68,000,000. The construction of a three-story office building that will serve as the home office for an insurance group and its affiliated companies, with respect to which a city agreed to transfer its ownership of the land for the project in a Redevelopment Agreement executed on September 18, 1985 , once certain conditions are met. A commercial bank formed under the laws of the State of New York which entered into an agreement on September 5, 1985 , to construct its headquarters at 60 Wall Street, New York, New York, with respect to such headquarters. Any property which is part of a commercial and residential project, the first phase of which is currently under construction, to be developed on land which is the subject of an ordinance passed on July 20, 1981 , by the city council of the city in which such land is located, designating such land and the improvements to be placed thereon as a residential-business planned development, which development is being financed in part by the proceeds of industrial development bonds in the amount of $62,600,000 issued on December 4, 1985 . A 600,000 square foot mixed use building known as Flushing Center with respect to which a letter of intent was executed on March 26, 1986 . the purchase and renovation of which was approved by a committee of the Board of Directors on February 22, 1985 , and as of December 31, 1985 , more than $20,000,000 was incurred or committed with respect to the renovation. an inducement resolution with respect to such project was adopted by the State housing development authority on January 25, 1985 , and such project was the subject of a law suit filed on October 25, 1985 . The amendments made by section 201 shall not apply to a 30 megawatt electric generating facility fueled by geothermal and wood waste, the approximate cost of which is $55,000,000, and with respect to which a 30-year power sales contract was executed on March 22, 1985 . The amendments made by section 201 shall not apply to railroad maintenance-of-way equipment, with respect to which a Boston bank entered into a firm binding contract with a major northeastern railroad before March 2, 1986 , to finance $10,500,000 of such equipment, if all of the equipment was placed in service before August 1, 1986 . a facility constructed on approximately seven acres of land located on Ogle’s Poso Creek Oil field, the primary fuel of which will be bituminous coal from Utah or Wyoming, with respect to which an application for an authority to construct was filed on December 26, 1985 , an authority to construct was issued on July 2, 1986 , and a prevention of significant deterioration permit application was submitted in May 1985, a facility constructed on approximately seven acres of land located on Teorco’s Jasmin oil field, the primary fuel of which will be bituminous coal from Utah or Wyoming, with respect to which an authority to construct was filed on December 26, 1985 , an authority to construct was issued on July 2, 1986 , and a prevention of significant deterioration permit application was submitted in July 1985, the Mountain View Apartments, in Hadley, Massachusetts, a facility expected to have a capacity of not less than 65 megawatts of electricity, the steam from which is to be sold to a pulp and paper mill, with respect to which application was made to the Federal Regulatory Commission for certification as a qualified facility on November 1, 1985 , and received such certification on January 24, 1986 , $5,000,000 of equipment ordered in 1986, in connection with a 60,000 square foot plant in Masontown, Pennsylvania, that was completed in 1983, a magnetic resonance imaging machine, with respect to which a binding contract to purchase was entered into in April 1986, in connection with the construction of a magnetic resonance imaging clinic with respect to which a Determination of Need certification was obtained from a State Department of Public Health on October 22, 1985 , if such property is placed in service before December 31, 1986 , a company located in Salina, Kansas, which has been engaged in the construction of highways and city streets since 1946, but only to the extent of $1,410,000 of investment in new section 38 property, a $300,000 project undertaken by a small metal finishing company located in Minneapolis, Minnesota, the first parts of which were received and paid for in January 1986, with respect to which the company received Board approval to purchase the largest piece of machinery it has ever ordered in 1985, A $1,200,000 finishing machine that was purchased on April 2, 1986 and placed into service in September 1986 by a company located in Davenport, Iowa, A 25 megawatt small power production facility, with respect to which Qualifying Facility status numbered QF86–593–000 was granted on March 5, 1986 , A 250 megawatt coal-fired electric plant in northeastern Nevada estimated to cost $600,000,000 and known as the Thousand Springs project, on which the Sierra Pacific Power Company, a subsidiary of Sierra Pacific Resources, began in 1980 work to design, finance, construct, and operate (and section 203(b)(2) shall be applied with respect to such plant by substituting ‘ January 1, 1995 ’ for ‘ January 1, 1991 ’), 128 units of rental housing in connection with the Point Gloria Limited Partnership, property which is part of the Kenosha Downtown Redevelopment Project and which is financed with the proceeds of bonds issued pursuant to section 1317(6)(W) [set out as a note under section 141 of this title ], Lakeland Park Phase II, in Baton Rouge, Louisiana, the Santa Rosa Hotel, in Pensacola, Florida, the Sheraton Baton Rouge, in Baton Rouge, Louisiana, $300,000 of equipment placed in service in 1986, in connection with the renovation of the Best Western Townhouse Convention Center in Cedar Rapids, Iowa, the segment of a nationwide fiber optics telecommunications network placed in service by SouthernNet, the total estimated cost of which is $37,000,000, two cogeneration facilities, to be placed in service by the Reading Anthracite Coal Company (or any subsidiary thereof), costing approximately $110,000,000 each, with respect to which filings were made with the Federal Energy Regulatory Commission by December 31, 1985 , and which are located in Pennsylvania, a portion of a fiber optics network placed in service by LDX NET after December 31, 1988 , but only to the extent the cost of such portion does not exceed $25,000,000, 3 newly constructed fishing vessels, and one vessel that is overhauled, constructed by Mid Coast Marine, but only to the extent of $6,700,000 of investment, $350,000 of equipment acquired in connection with the reopening of a plant in Bristol, Rhode Island, which plant was purchased by Buttonwoods, Ltd., Associates on February 7, 1986 , $4,046,000 of equipment placed in service by Brendle’s Incorporated, acquired in connection with a Distribution Center, a multi-family mixed-use housing project located in a home rule city, the zoning for which was changed to residential business planned development on November 26, 1985 , and with respect to which both the home rule city on December 4, 1985 , and the State housing finance agency on December 20, 1985 , adopted inducement resolutions, the Myrtle Beach Convention Center, in South Carolina, to the extent of $25,000,000 of investment, and railroad cars placed in service by the Pullman Leasing Company, pursuant to an April 3, 1986 purchase order, costing approximately $10,000,000. $400,000 of equipment placed in service by Super Key Market, if such equipment is placed in service before January 1, 1987 , the Trolley Square project, the total project cost of which is $24,500,000, and the amount of depreciable real property of which is $14,700,000. a waste-to-energy project in Derry, New Hampshire, costing approximately $60,000,000, and a waste-to-energy project in Manchester, New Hampshire, costing approximately $60,000,000, the City of Los Angeles Co-composting project, the estimated cost of which is $62,000,000, with respect to which, on July 17, 1985 , the California Pollution Control Financing Authority issued an initial resolution in the maximum amount of $75,000,000 to finance this project, the St. Charles, Missouri Mixed-Use Center, Oxford Place in Tulsa, Oklahoma, an amount of investment generating $20,000,000 of investment tax credits attributable to property used on the Illinois Diversatech Campus, $25,000,000 of equipment used in the Melrose Park Engine Plant that is sold and leased back by Navistar, 80,000 vending machines, for a cost approximating $3,400,000 placed into service by Folz Vending Co., A 25.85 megawatt alternative energy facility located in Deblois, Maine, with respect to which certification by the Federal Energy Regulatory Commission was made on April 3, 1986 , Burbank Manors, in Illinois, and a cogeneration facility to be built at a paper company in Turners Falls, Massachusetts, with respect to which a letter of intent was executed on behalf of the paper company on September 26, 1985 . Certain trucks, etc .—The amendments made by section 201 shall not apply to trucks, tractor units, and trailers which a privately held truck leasing company headquartered in Des Moines, Iowa, contracted to purchase in September 1985 but only to the extent the aggregate reduction in Federal tax liability by reason of the application of this paragraph does not exceed $8,500,000. a 2-year supply contract was signed by the taxpayer and a customer on November 1, 1985 , such contract further obligated the customer to purchase beverage containers for an additional 5-year period if physical signs of construction of the plant are present before September 1986, ground clearing for such plant began before August 1986, and construction is completed, the equipment is installed, and operations are commenced before July 1, 1987 . The amendments made by section 201 shall not apply to any property which is part of the multifamily housing at the Columbia Point Project in Boston, Massachusetts. A project shall be treated as not described in the preceding sentence and as not described in section 252(f)(1)(D) [set out as a note under section 42 of this title ] unless such project includes at substantially all times throughout the compliance period (within the meaning of section 42(i)(1) of the Internal Revenue Code of 1986), a facility which provides health services to the residents of such project for fees commensurate with the ability of such individuals to pay for such services. in July of 1984 an initial binding construction contract was entered into for such facility, in June of 1986, certain Department of Energy recommended contract changes required a change of contractor, and in September of 1986, a new contract to construct such facility, consistent with such recommended changes, was entered into. The amendments made by section 201 shall not apply to any property which is part of a sewage treatment facility if, prior to January 1, 1986 , the City of Conyers, Georgia, selected a privatizer to construct such facility, received a guaranteed maximum price bid for the construction of such facility, signed a letter of intent and began substantial negotiations of a service agreement with respect to such facility. a $28,000,000 wood resource complex for which construction was authorized by the Board of Directors on August 9, 1985 , an electrical cogeneration plant in Bethel, Maine which is to generate 2 megawatts of electricity from the burning of wood residues, with respect to which a contract was entered into on July 10, 1984 , and with respect to which $200,000 of the expected $2,000,000 cost had been committed before June 15, 1986 , a mixed income housing project in Portland, Maine which is known as the Back Bay Tower and which is expected to cost $17,300,000, the Eastman Place project and office building in Rochester, New York, which is projected to cost $20,000,000, with respect to which an inducement resolution was adopted in December 1986, and for which a binding contract of $500,000 was entered into on April 30, 1986 , the Marquis Two project in Atlanta, Georgia which has a total budget of $72,000,000 and the construction phase of which began under a contract entered into on March 26, 1986 , a 166-unit continuing care retirement center in New Orleans, Louisiana, the construction contract for which was signed on February 12, 1986 , and is for a maximum amount not to exceed $8,500,000, the expansion of the capacity of an oil refining facility in Rosemont, Minnesota from 137,000 to 207,000 barrels per day which is expected to be completed by December 31, 1990 , and a project in Ransom, Pennsylvania which will burn coal waste (known as ‘culm’) with an approximate cost of $64,000,000 and for which a certification from the Federal Energy Regulatory Commission was received on March 11, 1986 . The amendments made by section 201 shall not apply to any facility for the manufacture of an improved particle board if a binding contract to purchase such equipment was executed March 3, 1986 , such equipment will be placed in service by January 1, 1988 , and such facility is located in or near Moncure, North Carolina. The provisions of section 168(f)(8) of the Internal Revenue Code of 1954 (as amended by section 209 of the Tax Equity and Fiscal Responsibility Act of 1982) shall continue to apply to any transaction permitted by reason of section 12(c)(2) of the Tax Reform Act of 1984 or section 209(d)(1)(B) of the Tax Equity and Fiscal Responsibility Act of 1982 (as amended by the Tax Reform Act of 1984) [ section 12(c)(2) of Pub. L. 98–369 and section 209(d)(1)(B) of Pub. L. 97–248 , respectively, set out below]. in the case of a 2-unit nuclear powered electric generating plant (and equipment and incidental appurtenances), located in Pennsylvania and constructed pursuant to contracts entered into by the owner operator of the facility before December 31, 1975 , including contracts with the engineer/constructor and the nuclear steam system supplier, such contracts shall be treated as contracts described in section 203(b)(1)(A), a cogeneration facility with respect to which an application with the Federal Energy Regulatory Commission was filed on August 2, 1985 , and approved October 15, 1985 . in the case of a 1,300 megawatt coal-fired steam powered electric generating plant (and related equipment and incidental appurtenances), which the three owners determined in 1984 to convert from nuclear power to coal power and for which more than $600,000,000 had been incurred or committed for construction before September 25, 1985 , except that no investment tax credit will be allowable under section 49(d)(3) added by section 211(a) of this Act [ section 49(d) of this title does not contain a par. (3)] for any qualified progress expenditures made after December 31, 1990 . Section 203(b)(2) shall be applied by substituting ‘ April 1, 1992 ’ for the applicable date that would otherwise apply, in the case of the second unit of a twin steam electric generating facility and related equipment which was granted a certificate of public convenience and necessity by a public service commission prior to January 1, 1982 , if the first unit of the facility was placed in service prior to January 1, 1985 , and before September 26, 1985 , more than $100,000,000 had been expended toward the construction of the second unit. new commercial passenger aircraft used by a domestic airline, if a binding contract with respect to such aircraft was entered into on or before April 1, 1986 , and such aircraft has a present class life of 12 years, a pumped storage hydroelectric project with respect to which an application was made to the Federal Energy Regulatory Commission for a license on February 4, 1974 , and license was issued August 1, 1977 , the project number of which is 2740, and a newsprint mill in Pend Oreille county, Washington, costing about $290,000,000. Arena project, Michigan, but only with respect to $78,000,000 of investments. Campbell Soup Company, Pennsylvania, California, North Carolina, Ohio, Maryland, Florida, Nebraska, Michigan, South Carolina, Texas, New Jersey, and Delaware, but only with respect to $9,329,000 of regular investment tax credits. The Southeast Overtown/Park West development, Florida, but only with respect to $200,000,000 of investments. Equipment placed in service and operated by Leggett and Platt before July 1, 1987 , but only with respect to $2,000,000 of regular investment tax credits, and subsections (c) and (d) of section 49 of the Internal Revenue Code of 1986 shall not apply to such equipment. East Bank Housing Project. $1,561,215 of investments by Standard Telephone Company. Five aircraft placed in service before January 1, 1987 , by Presidential Air. A rehabilitation project by Ann Arbor Railroad, but only with respect to $2,900,000 of investments. Property that is part of a cogeneration project located in Ada, Michigan, but only with respect to $30,000,000 of investments. Anchor Store Project, Michigan, but only with respect to $21,000,000 of investments. A waste-fired electrical generating facility of Biogen Power, but only with respect to $34,000,000 of investments. $14,000,000 of television transmitting towers placed in service by Media General, Inc., which were subject to binding contracts as of January 21, 1986 , and will be placed in service before January 1, 1988 , Interests of Samuel A. Hardage (whether owned individually or in partnership form). Two aircraft of Mesa Airlines with an aggregate cost of $5,723,484. Yarn-spinning equipment used at Spray Cotton Mills, but only with respect to $3,000,000 of investments. 328 units of low-income housing at Angelus Plaza, but only with respect to $20,500,000 of investments. One aircraft of Continental Aviation Services with a cost of approximately $15,000,000 that was purchased pursuant to a contract entered into during March of 1983 and that is placed in service by December 31, 1988 . In the case of expenditures for railroad grading and tunnel bores which were incurred by a common carrier by railroad to replace property destroyed in a disaster occurring on or about April 17, 1983 , near Thistle, Utah, such expenditures, to the extent not in excess of $15,000,000, shall be treated as recovery property which is 5-year property under section 168 of the Internal Revenue Code of 1954 (as in effect before the amendments made by this Act) and which is placed in service at the time such expenditures were incurred. Business interruption proceeds received for loss of use, revenues, or profits in connection with the disaster described in paragraph (1) and devoted by the taxpayer described in paragraph (1) to the construction of replacement track and related grading and tunnel bore expenditures shall be treated as constituting an amount received from the involuntary conversion of property under section 1033(a)(2) of such Code. This subsection shall apply to taxable years ending after April 17, 1983 . shall not apply to any property placed in service during 1987 or 1988, or shall apply to any property placed in service during 1985 or 1986, This section shall apply to a flood which occurred on November 3 through 7, 1985, and which was declared a natural disaster area by the President of the United States.” Except as otherwise provided in this clause, the amendment made by clause (i) [amending this section] shall apply to property placed in service after September 27, 1985 ; except that such amendment shall not apply to any property acquired pursuant to a binding written contract in effect on such date (and at all times thereafter). If an election under this subclause is made with respect to any property, the amendment made by clause (i) shall apply to such property whether or not placed in service on or before September 27, 1985 .” Except as otherwise provided in this subsection, the amendments made by section 103 [amending this section and sections 47, 48, 57, 312, and 1245 of this title] shall apply with respect to property placed in service by the taxpayer after May 8, 1985 . the taxpayer or a qualified person entered into a binding contract to purchase or construct such property before May 9, 1985 , or construction of such property was commenced by or for the taxpayer or a qualified person before May 9, 1985 . For purposes of applying section 168(f)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by section 103) to components placed in service after December 31, 1986 , property to which paragraph (2) of this subsection applies shall be treated as placed in service by the taxpayer before May 9, 1985 . The amendment made by paragraph (6) of section 103(b) [amending section 47 of this title ] shall apply as if included in the amendments made by section 111 of the Tax Reform Act of 1984 [ Pub. L. 98–369 , see Effective Date of 1984 Amendment note below]. The amendment made by paragraph (5) of section 103(b) to section 48(g)(2)(B)(v) of the Internal Revenue Code of 1986 shall not apply to leases entered into before May 22, 1985 , but only if the lessee signed the lease before May 17, 1985 .” to property placed in service by the taxpayer after May 23, 1983 , in taxable years ending after such date, and to property placed in service by the taxpayer on or before May 23, 1983 , if the lease to the tax-exempt entity is entered into after May 23, 1983 . a lease entered into on or before May 23, 1983 (or a sublease under such a lease), or any renewal or extension of a lease entered into on or before May 23, 1983 , if such renewal or extension is pursuant to an option exercisable by the tax-exempt entity which was held by the tax-exempt entity on May 23, 1983 . the taxpayer (or his predecessor in interest under the contract) to acquire, construct, reconstruct, or rehabilitate such property, and the tax-exempt entity (or a tax-exempt predecessor thereof) to be the lessee of such property. such property was acquired by such partnership on or before October 21, 1983 , or such partnership entered into a written binding contract which, on October 21, 1983 , and at all times thereafter, required the partnership to acquire or construct such property. on or before May 23, 1983 , the taxpayer (or his predecessor in interest under the contract) or the tax-exempt entity entered into a written binding contract to acquire, construct, reconstruct, or rehabilitate such property and such property had not previously been used by the tax-exempt entity, or the taxpayer or the tax-exempt entity acquired the property after June 30, 1982 , and on or before May 23, 1983 , or completed the construction, reconstruction, or rehabilitation of the property after December 31, 1982 , and on or before May 23, 1983 , and if such lease is pursuant to a written binding contract entered into before January 1, 1985 , which requires the tax-exempt entity to be the lessee of such property. on or before November 1, 1983 , there was significant official governmental action with respect to the project or its design, and the lease to the tax-exempt entity is pursuant to a written binding contract entered into before January 1, 1985 , which requires the tax-exempt entity to be the lessee of the property. For purposes of subparagraph (A), the term ‘significant official governmental action’ does not include granting of permits, zoning changes, environmental impact statements, or similar governmental actions. such credit union shall not be treated as an agency or instrumentality of the United States; and clause (ii) of subparagraph (A) shall be applied by substituting ‘ January 1, 1987 ’ for ‘ January 1, 1985 ’. For purposes of this paragraph, significant official governmental action taken by the Greenville County Auditorium Board of Greenville, South Carolina, before May 23, 1983 , shall be treated as significant official governmental action with respect to the coliseum facility subject to a binding contract to lease which was in effect on January 1, 1985 . on June 16, 1982 , the legislative body of the local governmental unit adopted a bond ordinance to provide funds to renovate elevators in a deteriorating building owned by the local governmental unit and listed in the National Register, and the chief executive officer of the local governmental unit, in connection with the renovation of such building, made an application on June 1, 1983 , to a State agency for a Federal historic preservation grant and made an application on June 17, 1983 , to the Economic Development Administration of the United States Department of Commerce for a grant, such vehicle is placed in service before January 1, 1988 , or pursuant to a binding contract or commitment entered into before April 1, 1983 , and solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee. The amendments made by this section shall not apply to any property described in section 208(d)(3)(E) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 208(d)(3)(E) of Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note below]. The amendments made by this section shall not apply with respect to any facilities described in clause (ii) of section 168(f)(12)(C) of the Internal Revenue Code of 1986 (relating to certain sewage or solid waste disposal facilities), as in effect on the day before the date of the enactment of this Act [ July 18, 1984 ], if a ruling request with respect to the lease of such facility to the tax-exempt entity was filed with the Internal Revenue Service on or before May 23, 1983 . In the case of any property (other than 15-year real property) which is part of a qualified sewage facility, the recovery period used for purposes of paragraph (1) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall be 12 years. For purposes of the preceding sentence, the term ‘15-year real property’ includes 18-year real property. on June 15, 1983 , the City Council approved a resolution under which the city authorized the procurement of equity investments for such facility, and on July 12, 1983 , the Industrial Development Board of the city approved a resolution to issue a $100,000,000 industrial development bond issue to provide funds to purchase such facility. In the case of property used by the United States Postal Service, paragraphs (1) and (2) shall be applied by substituting ‘October 31’ for ‘May 23’. an express appropriation has been made for rentals under such lease for the fiscal year 1983 before May 23, 1983 , and the United States or an agency or instrumentality thereof has not provided an indemnification against the loss of all or a portion of the tax benefits claimed under the lease or service contract. Paragraph (9) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any property acquired, directly or indirectly, before January 1, 1985 , by any partnership described in subparagraph (B). before October 21, 1983 , the partnership was organized, a request for exemption with respect to such partnership was filed with the Department of Labor, and a private placement memorandum stating the maximum number of units in the partnership that would be offered had been circulated, the interest in the property to be acquired, directly or indirectly (including through acquiring an interest in another partnership) by such partnership was described in such private placement memorandum, and the marketing of partnership units in such partnership is completed not later than two years after the later of the date of the enactment of this Act [ July 18, 1984 ] or the date of publication in the Federal Register of such exemption by the Department of Labor and the aggregate number of units in such partnership sold does not exceed the amount described in clause (i). Paragraph (9) of section 168(j) of the Internal Revenue Code of 1986 (as added by this section) shall not apply to any property acquired directly or indirectly, before January 1, 1986 , by any partnership described in subparagraph (D). For purposes of this subparagraph, property shall be deemed to have been acquired prior to January 1, 1986 , if the partnership had entered into a written binding contract to acquire such property prior to January 1, 1986 and the closing of such contract takes place within 6 months of the date of such contract (24 months in the case of new construction). before March 6, 1984 , the partnership was organized and publicly announced the maximum amount (as shown in the registration statement, prospectus or partnership agreement, whichever is greater) of interests which would be sold in the partnership, and the marketing or partnership interests in such partnership was completed not later than the 90th day after the date of the enactment of this Act [ July 18, 1984 ] and the aggregate amount of interest in such partnership sold does not exceed the maximum amount described in clause (i). The amendment made by subsection (c)(2) [amending section 48(g)(2)(B)(i) of this title ] to the extent it relates to subsection (f)(12) of section 168 of the Internal Revenue Code of 1986 shall take effect as if it had been included in the amendments made by section 216(a) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 216(a) of Pub. L. 97–248 , which amended this section]. such contract or other arrangement if such contract or other arrangement was entered into before November 5, 1983 , or any renewal or other extension of such contract or other arrangement pursuant to an option contained in such contract or other arrangement on November 5, 1983 . ‘ November 5, 1983 ’ for ‘ May 23, 1983 ’ and ‘ November 1, 1983 ’, as the case may be, and ‘organization described in section 593 of the Internal Revenue Code of 1986’ for ‘tax-exempt entity’. is placed in service by the taxpayer before January 1, 1984 , and is used by such foreign person or entity pursuant to a lease entered into before January 1, 1984 . If tax-exempt use property is being used by a foreign person or entity pursuant to a sublease under a lease described in subparagraph (A)(ii), subparagraph (A) shall apply to such property only if such property was used before January 1, 1984 , by any foreign person or entity pursuant to such lease. on or before May 23, 1983 , the taxpayer (or a predecessor in interest under the contract) or the foreign person or entity entered into a written binding contract to acquire, construct, or rehabilitate such property and such property had not previously been used by the foreign person or entity, or the taxpayer or the foreign person or entity acquired the property or completed the construction, reconstruction, or rehabilitation of the property after December 31, 1982 and on or before May 23, 1983 , and if such lease is pursuant to a written binding contract entered into before January 1, 1984 , which requires the foreign person or entity to be the lessee of such property. on or before November 1, 1983 , the foreign person or entity entered into a written binding contract to acquire such aircraft, and such aircraft is originally placed in service by such foreign person or entity (or its successor in interest under the contract) after May 23, 1983 , and before January 1, 1986 . Qualified container equipment placed in service before January 1, 1984 , which is used before such date by a foreign person shall not, for purposes of section 47 of the Internal Revenue Code of 1986, be treated as ceasing to be section 38 property by reason of the use of such equipment before January 1, 1985 , by a foreign person or entity. For purposes of this subparagraph, the term ‘qualified container equipment’ means any container, container chassis, or container trailer of a United States person with a present class life of not more than 6 years. An organization may make the election under section 168(j)(4)(E)(ii) of the Internal Revenue Code of 1986 (relating to election not to have rules relating to previously tax-exempt organizations apply) only if such organization elects the tax treatment of exempt arbitrage profits described in subparagraph (B). In the case of an organization which elects the application of this subparagraph, there is hereby imposed a tax on the exempt arbitrage profits of such organization. shall be the amount of tax which would be imposed by section 11 of such Code if the exempt arbitrage profits were taxable income (and there were no other taxable income), and shall be imposed for the first taxable year of the tax-exempt use period (as defined in section 168(j)(4)(E)(ii) of such Code). associated with property described in section 168(j)(4)(E)(i), and issued before January 1, 1985 . For purposes of this paragraph, section 103(b)(6) of such Code shall apply to obligations issued before January 1, 1985 , but the amount described in clauses (i) and (ii) of subparagraph (D) thereof shall be determined without regard to clauses (i)(II) and (ii) of subparagraph (F) thereof. Except as provided in clause (ii), all provisions of law, including penalties, applicable with respect to the tax imposed by section 11 of such Code shall apply with respect to the tax imposed by this paragraph. part VI of subchapter A of chapter 1 of such Code (relating to minimum tax for tax preferences), and determining the amount of any credit allowable under subpart A of part IV of such subchapter. shall be made at such time and in such manner as the Secretary may prescribe, shall apply to any successor organization which is engaged in substantially similar activities, and once made, shall be irrevocable. on June 16, 1983 , the Board of Administrators of the university adopted a resolution approving the rehabilitation of the property in connection with an overall campus development program; and the property houses a basketball arena and university offices. on August 21, 1981 , the charitable organization acquired the property, with a view towards rehabilitating the property; and on June 12, 1982 , an arson fire caused substantial damage to the property, delaying the planned rehabilitation. which was entered into on August 3, 1983 ; and under which the corporation first occupied the property on December 22, 1983 . in November 1982, an architect was engaged to design a planned renovation; in January 1983, the architectural plans were completed; in December 1983, a demolition contract was entered into; and in March 1984, a renovation contract was entered into. in October 1981, the college purchased the property with a view towards renovating the property; renovation plans were delayed because of a zoning dispute; and in May 1983, the court of highest jurisdiction in the State in which the college is located resolved the zoning dispute in favor of the college. in August 1982, the university retained attorneys to advise the university regarding the rehabilitation of the property; on January 21, 1983 , the governing body of the university established a committee to develop rehabilitation plans; on January 10, 1984 , the governor of the state in which the university is located approved historic district designation for an area that includes the property; and on February 2, 1984 , historic preservation certification applications for the property were filed with a historic landmarks commission. on January 5, 1977 , a certificate of incorporation was filed with the appropriate authority of the state in which the retirement community is located; and on November 22, 1983 , the Board of Trustees adopted a resolution evidencing the intention to begin immediate construction of the property. in July 1982, the Board of Trustees of the university adopted a master plan for the financing of the property; and as of August 1, 1983 , at least $60,000 in private expenditures had been expended in connection with the property. Property is described in this subparagraph if such property is used by a university as a fine arts center and the Board of Trustees of such university authorized the sale-leaseback agreement with respect to such property on March 7, 1984 . prior to 1982, an environmental impact study for such property was completed; on June 24, 1981 , a developer made a written commitment to provide one-third of the financing for the development of such property; and on October 20, 1983 , such developer was approved by the Board of Directors of the tax-exempt entity. Property is described in this subparagraph if such property is used by university of osteopathic medicine and health sciences, and on or before December 31, 1983 , the Board of Trustees of such university approved the construction of such property. such use is pursuant to a lease with a taxpayer which placed substantial improvements in service; on May 23, 1983 , there existed architectural plans and specifications (within the meaning of sec. 48(g)(1)(C)(ii) of the Internal Revenue Code of 1986); and prior to May 23, 1983 , at least 10 percent of the total cost of such improvements was actually paid or incurred. Property is described in this subparagraph if such property is used as a convention center and on June 2, 1983 , the City Council of the city in which the center is located provided for over $6 million for the project. leased by the taxpayer on or before November 1, 1983 , or leased by the taxpayer after November 1, 1983 , if on or before such date the taxpayer entered into a written binding contract requiring the taxpayer to lease such property. Subparagraph (A) shall apply to the amendment made by subsection (c)(1) only to the extent such amendment relates to property described in subclause (II), (III), or (IV) of section 168(j)(3)(B)(ii) of the Internal Revenue Code of 1986 (as added by this section). The amendments made by subsection (e) [amending section 7701 of this title ] shall not apply to property used pursuant to an energy management contract that was entered into prior to May 1, 1984 . For purposes of subparagraph (A), the term ‘energy management contract’ means a contract for the providing of energy conservation or energy management services. The term ‘tax-exempt entity’ has the same meaning as when used in section 168(j) of the Internal Revenue Code of 1986 (as added by this section), except that such term shall include any related entity (within the meaning of such section). For purposes of this subsection, an improvement to property shall not be treated as a separate property unless such improvement is a substantial improvement with respect to such property. by substituting ‘property’ for ‘building’ each place it appears therein, by substituting ‘20 percent’ for ‘25 percent’ in clause (ii) thereof, and without regard to clause (iii) thereof. The term ‘foreign person or entity’ has the meaning given to such term by subparagraph (C) of section 168(j)(4) of such Code (as added by this section). For purposes of this subparagraph and subparagraph (A), such subparagraph (C) shall be applied without regard to the last sentence thereof. The determination of whether there is a lease or sublease to a tax-exempt entity shall take into account sections 168(j)(6)(A), 168(j)(8)(A), and 7701(e) of the Internal Revenue Code of 1986 (as added by this section).” on or before March 28, 1985 , the taxpayer (or a predecessor in interest under the contract) or the tax-exempt entity entered into a written binding contract to acquire, construct, or rehabilitate the property, or the taxpayer or the tax-exempt entity began the construction, reconstruction, or rehabilitation of the property on or before March 28, 1985 .” Except as otherwise provided in this subsection, the amendments made by this section [amending this section and sections 48, 51, 312, and 1245 of this title] shall apply with respect to property placed in service by the taxpayer after March 15, 1984 . the taxpayer or a qualified person entered into a binding contract to purchase or construct such property before March 16, 1984 , or construction of such property was commenced by or for the taxpayer or a qualified person before March 16, 1984 . is held by a person as property described in section 1221(1) [ 26 U.S.C. 1221(1) ], and is disposed of by such person before January 1, 1985 , bonds were issued to finance such property before 1984, and an architectural contract was entered into before March 16, 1984 , For purposes of applying section 168(f)(1)(B) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this section) to components placed in service after December 31, 1986 , property to which paragraph (2) applies shall be treated as placed in service by the taxpayer before March 16, 1984 . paragraph (1) shall be applied by substituting ‘ June 22, 1984 ’ for ‘ March 15, 1984 ’, and paragraph (2) shall be applied by substituting ‘ June 23, 1984 ’ for ‘ March 15, 1984 ’ each place it appears.” any qualified film placed in service by the taxpayer before March 15, 1984 , if the taxpayer treated such film as recovery property for purposes of section 168 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] on a return of tax under chapter 1 of such Code filed before March 16, 1984 , or 20 percent or more of the production costs of such film were incurred before March 16, 1984 , and the taxpayer treats such film as recovery property for purposes of section 168 of such Code. The amendment made by paragraph (2) and (3) of subsection (b) [amending this section and sections 46 and 48 of this title] shall apply as if included in the amendments made by section 201(a), 211(a)(1), and 211(f)(1) of the Economic Recovery Tax Act of 1981 [sections 201(a), 211(a)(1), and 211(f)(1) of Pub. L. 97–34 , enacting this section and amending section 46 of this title ]. The amendment made by paragraph (4) of subsection (b) [amending section 48 of this title ] shall take effect as if included in the amendments made by section 205(a)(1) of the Tax Equity and Fiscal Responsibility Act of 1982 [ section 205(a)(1) of Pub. L. 97–248 , amending section 48 of this title ]. For purposes of this paragraph, the terms ‘qualified film’ and ‘production costs’ have the same respective meanings as when used in section 48(k) of the Internal Revenue Code of 1986.” Except as otherwise provided in this subsection, the amendments made by subsections (a) and (b) of this section [amending this section and section 47 of this title ] shall apply to agreements entered into after July 1, 1982 , or to property placed in service after July 1, 1982 . The amendments made by subsections (a) and (b) [amending this section and section 47 of this title ] shall not apply to transitional safe harbor lease property. Subparagraph (A) shall not apply with respect to the provisions of paragraph (6) of section 168(i) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by subsection (a)(1)), to the provisions of section 168(f)(8)(J) of such Code (as added by subsection (b)(4)), or to the amendment made by subsection (b)(1). with respect to such property a binding contract to acquire or to construct such property was entered into by the lessee after December 31, 1980 , and before July 2, 1982 , or such property was acquired by the lessee, or construction of such property was commenced by or for the lessee, after December 31, 1980 , and before July 2, 1982 . an agreement to which section 168(f)(8)(A) of the Internal Revenue Code of 1986 applies was entered into before August 15, 1982 , and the lessee under such agreement is a qualified lessee (within the meaning of paragraph (6)). such property is used principally by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacture of automobiles or light-duty trucks, such property is automotive manufacturing property, and such property would be described in subparagraph (A) if ‘October 1’ were substituted for ‘January 1’. For purposes of this subparagraph, the term ‘light-duty truck’ means any truck with a gross vehicle weight of 13,000 pounds or less. Such term shall not include any truck tractor. For purposes of this subparagraph, the term ‘automotive manufacturing property’ means machinery, equipment, and special tools of the type included in the former asset depreciation range guideline classes 37.11 and 37.12. For purposes of this subparagraph, any special tools owned by a taxpayer described in subclause (I) of clause (i) which are used by a vendor solely for the production of component parts for sale to the taxpayer shall be treated as automotive manufacturing property used directly by such taxpayer. is a commercial passenger aircraft (other than a helicopter), and would be described in subparagraph (A) if ‘ January 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. is a turbine or boiler of a cooperative organization engaged in the furnishing of electric energy to persons in rural areas, and would be property described in subparagraph (A) if ‘July 1’ were substituted for ‘January 1’. is used by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacture or production of steel, and would be described in subparagraph (A) if ‘ January 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. is used directly in connection with the manufacture or production of low sulfur gaseous fuel from coal, and would be described in subparagraph (A) if ‘ July 1, 1984 ’ were substituted for ‘ January 1, 1983 ’. For purposes of determining whether property described in this subparagraph is described in subparagraph (A), such property shall be treated as having been acquired during the period referred to in subparagraph (A)(ii) if at least 20 percent of the cost of such property is paid during such period. 50 percent of the cost basis of such property, or $67,500,000. such property shall be treated as placed in service when the taxpayer receives an operating permit with respect to such property from a State environmental protection agency, and the term of the lease with respect to such property shall be treated as being 5 years. The provisions of paragraph (6) of section 168(i) of such Code (as added by subsection (a)(1)), and the amendment made by subsection (b)(1) [amending this section] shall apply to leases entered into after February 19, 1982 , in taxable years ending after such date. is placed in service before January 1, 1988 , or pursuant to a binding contract or commitment entered into before April 1, 1983 , and solely because of conditions which, as determined by the Secretary of the Treasury or his delegate, are not within the control of the lessor or lessee. had net operating losses in each of the three most recent taxable years ending before July 1, 1982 , and had an aggregate net operating loss for the five most recent taxable years ending before July 1, 1982 , and the taxpayer produced less than 5 percent of the total number of units (or value) of such products during the period covering the three most recent taxable years of the taxpayer ending before July 1, 1982 , and four or fewer United States persons (including as one person an affiliated group as defined in section 1504(a)) other than the taxpayer manufactured 85 percent or more of the total number of all units (or value) within such class of products manufactured and produced in the United States during such period. the term ‘class of products’ means any of the categories designated and numbered as a ‘class of products’ in the 1977 Census of Manufacturers compiled and published by the Secretary of Commerce under title 13 of the United States Code, and compiled or published by the Secretary of Commerce, as part of or in connection with the Statistical Abstract of the United States or the Census of Manufacturers, regarding the number of units (or value) of a class of products manufactured and produced in the United States during any period, or if information under subclause (I) is not available, so compiled or published with respect to the number of such units shipped or sold by such manufacturers during any period, No addition to the tax shall be made under section 6655 of the Internal Revenue Code of 1954 (relating to failure by corporation to pay estimated income tax) for any period before October 15, 1982 , with respect to any underpayment of estimated tax by a taxpayer with respect to any tax imposed by chapter 1 of such Code to the extent that such underpayment was created or increased by any provision of this section. Subparagraph (J) of section 168(f)(8) of the Internal Revenue Code of 1986 (as added by subsection (b)(4)) shall take effect as provided in such subparagraph (J).” Except as provided in subparagraph (B) and paragraph (2), the amendments made by this section [amending this section and section 48 of this title ] shall apply to agreements entered into after December 31, 1987 . The amendments made by subsection (a) [amending this section] shall also apply to any agreement entered into after July 1, 1982 , and before January 1, 1988 , if the property subject to such agreement is section 38 property which is used for farming purposes (within the meaning of section 2032A(e)(5)). the cost basis of the property subject to the agreement, plus the cost basis of any property subject to an agreement to which this subparagraph previously applied, which was entered into during the same calendar year, and with respect to which the lessee was the lessee of the agreement described in subclause (I) (or any related person within the meaning of section 168(e)(4)(D)), The amendment made by subsection (c) [amending section 48 of this title ] shall apply to property placed in service after December 31, 1983 .” Except as otherwise provided in this subsection, the amendments made by this section [amending this section] shall apply with respect to property placed in service after December 31, 1982 , to the extent such property is financed by the proceeds of an obligation (including a refunding obligation) issued after June 30, 1982 . the construction, reconstruction, or rehabilitation of which began before July 1, 1982 , or with respect to which a binding agreement to incur significant expenditures was entered into before July 1, 1982 . Except as provided in clause (ii), in the case of property placed in service after December 31, 1982 which is financed by the proceeds of an obligation which is issued solely to refund another obligation which was issued before July 1, 1982 , the amendments made by this section [amending this section] shall apply only with respect to the basis in such property which has not been recovered before the date such refunding obligation is issued. In the case of facilities the original use of which commences with the taxpayer and with respect to which significant expenditures are made before January 1, 1983 , the amendments made by this section shall not apply with respect to such facilities to the extent such facilities are financed by the proceeds of an obligation issued solely to refund another obligation which was issued before July 1, 1982 . For purposes of clause (i) of section 168(f)(12)(C) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section), any obligation issued to finance a project described in the table contained in paragraph (1) of section 1104(n) of the Mortgage Subsidy Bond Tax Act of 1980 [ section 1104(n) of Pub. L. 96–499 , set out as a note under section 103A of this title ] shall be treated as an obligation described in section 103(b)(4)(A) of the Internal Revenue Code of 1986.” Except as otherwise provided in this section, the amendments made by this subtitle [subtitle A (§§ 201–209) of title II of Pub. L. 97–34 , enacting this section, amending sections 44E, 46, 50A, 53, 57, 167, 172, 179, 263, 312, 381, 453, 812, 825, 964, 1033, 1245, and 1250 of this title, and enacting provisions set out as notes under this section and sections 46 and 167 of this title] shall apply to property placed in service after December 31, 1980 , in taxable years ending after such date. The amendment made by subsection (c) of section 203 [amending section 167 of this title and enacting provisions set out as notes under section 167 of this title ] shall take effect on January 1, 1981 , and shall apply with respect to taxable years ending after such date. Except as provided in subparagraph (B), the amendments made by subsections (a) and (b) of section 207 [amending sections 172, 812, and 825 of this title] shall apply to net operating losses in taxable years ending after December 31, 1975 . The amendments made by subparagraph (B)(i) of section 207(a)(2) [amending section 172 of this title ] shall take effect as if they had been included in the amendments made by section 1(a) of Public Law 96–595 [amending section 172 of this title ]; except that the amendments made by such subparagraph shall apply only to net operating losses in taxable years ending after December 31, 1972 . If any net operating loss for any taxable year ending on or before December 31, 1975 , could be a net operating loss carryover to a taxable year ending in 1981 by reason of subclause (II) of section 172(b)(1)(E)(ii) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as in effect on the day before the date of the enactment of this Act [ Aug. 13, 1981 ] and as modified by section 1(b) of Public Law 96–595 [set out as an Effective Date of 1980 Amendment note under section 172 of this title ]), such net operating loss shall be a net operating loss carryover under section 172 of such Code to each of the 15 taxable years following the taxable year of such loss. The amendments made by subsection (c)(1) of section 207 [amending sections 46 and 50A of this title] shall apply to unused credit years ending after December 31, 1973 . The amendment made by subsection (c)(2) of section 207 [amending section 53 of this title ] shall apply to unused credit years beginning after December 31, 1976 . The amendments made by subsection (c)(3) of section 207 [amending section 44E of this title ] shall apply to unused credit years ending after September 30, 1980 . The amendments made by subsections (a), (b), and (c) of section 207 [amending sections 44E, 46, 50A, 53, 172, 812, and 825 of this title] shall not apply to any amount which, under the law in effect on the day before the date of the enactment of this Act [ Aug. 13, 1981 ], could not be carried to a taxable year ending in 1981.” A normalization method of accounting shall not be treated as being used with respect to any public utility property for purposes of section 167 or 168 of the Internal Revenue Code of 1986 if the taxpayer, in computing its cost of service for ratemaking purposes and reflecting operating results in its regulated books of account, reduces the excess tax reserve more rapidly or to a greater extent than such reserve would be reduced under the average rate assumption method. the taxpayer was required by a regulatory agency to compute depreciation for public utility property on the basis of an average life or composite rate method, and the taxpayer’s books and underlying records did not contain the vintage account data necessary to apply the average rate assumption method, the reserve for deferred taxes (as described in section 168(i)(9)(A)(ii) of the Internal Revenue Code of 1986) as of the day before the corporate rate reductions provided in the amendments made by this section [amending this section and sections 11, 12, 280C, 453A, 527, 535, 594, 691, 801, 831, 832, 834, 852, 857, 860E, 882, 904, 1374, 1381, 1445, 1446, 1561, 6425, 6655, 7518, and 7874 of this title and repealing sections 1201 and 1551 of this title] take effect, over the amount which would be the balance in such reserve if the amount of such reserve were determined by assuming that the corporate rate reductions provided in this Act [see Tables for classification] were in effect for all prior periods. the ratio of the aggregate deferred taxes for the property to the aggregate timing differences for the property as of the beginning of the period in question, by the amount of the timing differences which reverse during such period. computes the excess tax reserve on all public utility property included in the plant account on the basis of the weighted average life or composite rate used to compute depreciation for regulatory purposes, and reduces the excess tax reserve ratably over the remaining regulatory life of the property. the taxpayer’s tax for the taxable year shall be increased by the amount by which it reduces its excess tax reserve more rapidly than permitted under a normalization method of accounting, and such taxpayer shall not be treated as using a normalization method of accounting for purposes of subsections (f)(2) and (i)(9)(C) of section 168 of the Internal Revenue Code of 1986.” shall conduct a comprehensive study of the recovery periods and depreciation methods under section 168 of the Internal Revenue Code of 1986, and not later than March 31, 2000 , shall submit the results of such study, together with recommendations for determining such periods and methods in a more rational manner, to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.” any partnership or grantor trust is the lessor under a specified agreement, such partnership or grantor trust met the requirements of section 168(f)(8)(C)(i) of the Internal Revenue Code of 1954 (relating to special rules for finance leases) when the agreement was entered into, and a person became a partner in such partnership (or a beneficiary in such trust) after its formation but before September 26, 1985 , an agreement dated as of December 20, 1982 , as amended and restated as of February 1, 1983 , involving approximately $8,734,000 of property at December 31, 1983 , an agreement dated as of December 15, 1983 , as amended and restated as of January 3, 1984 , involving approximately $13,199,000 of property at December 31, 1984 , or an agreement dated as of October 25, 1984 , as amended and restated as of December 1, 1984 , involving approximately $966,000 of property at December 31, 1984 .” any reference in any amendment made by this subsection [amending this section and sections 57 and 312 of this title] to 19-year real property shall be treated as a reference to 18-year real property, and section 168(f)(12)(B)(ii) of the Internal Revenue Code of 1954 [now 1986] (as amended by paragraph (4)(A)) shall be applied by substituting ‘18 years’ for ‘19 years’.” a binding contract to acquire or to construct such property was entered into by or for the lessee before March 7, 1984 , or such property was acquired by the lessee, or the construction of such property was begun, by or for the lessee, before March 7, 1984 . which is automotive manufacturing property, and with respect to which the lessee is a qualified lessee (within the meaning of section 208(d)(6) of the Tax Equity and Fiscal Responsibility Act of 1982) [ Pub. L. 97–248 , set out as an Effective Date of 1982 Amendments note above]. the cost basis of the property subject to the agreement, plus the cost basis of any property subject to an agreement to which subparagraph (A) previously applied and with respect to which the lessee was the lessee under the agreement described in clause (i) (or any related person within the meaning of section 168(e)(4)(D) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954]), property used principally by the taxpayer directly in connection with the trade or business of the taxpayer of the manufacturing of automobiles or trucks (other than truck tractors) with a gross vehicle weight of 13,000 pounds or less, machinery, equipment, and special tools of the type included in former depreciation range guideline classes 37.11 and 37.12, and any special tools owned by the taxpayer which are used by a vendor solely for the production of component parts for sale to the taxpayer. for which an application for certification was filed with the Federal Energy Regulatory Commission on December 30, 1983 , for which an application for a construction permit was filed with a State environmental protection agency on February 20, 1984 , and which is placed in service before January 1, 1988 .” In the case of any qualified motor vehicle agreement entered into on or before the 90th day after the date of the enactment of the Tax Reform Act of 1984 [ July 18, 1984 ], the fact that such agreement contains a terminal rental adjustment clause shall not be taken into account in determining whether such agreement is a lease. the enactment of any law, or the publication by the Secretary of the Treasury or his delegate of any regulation, is personally liable for the repayment of, or has pledged property (but only to the extent of the net fair market value of the lessor’s interest in such property), other than property subject to the agreement or property directly or indirectly financed by indebtedness secured by property subject to the agreement, as security for, with respect to which the lessee under the agreement uses the property subject to the agreement in a trade or business or for the production of income. The term ‘terminal rental adjustment clause’ means a provision of an agreement which permits or requires the rental price to be adjusted upward or downward by reference to the amount realized by the lessor under the agreement upon sale or other disposition of such property. Such term also includes a provision of an agreement which requires a lessee who is a dealer in motor vehicles to purchase the motor vehicle for a predetermined price and then resell such vehicle where such provision achieves substantially the same results as a provision described in the preceding sentence. Subsection (a) shall not apply to deny a deduction for interest paid or accrued claimed by a lessee with respect to a qualified motor vehicle agreement on a return of tax imposed by chapter 1 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] which was filed before the date of the enactment of this Act [ Sept. 3, 1982 ] or to deny a credit for investment in depreciable property claimed by the lessee on such a return pursuant to an agreement with the lessor that the lessor would not claim the credit.” Except as provided in paragraph (2), paragraph (8) of section 168(f) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (relating to special rule for leases) shall not apply with respect to an agreement unless a return, signed by the lessor and lessee and containing the information required to be included in the return pursuant to subsection (b), has been filed with the Internal Revenue Service not later than the 30th day after the date on which the agreement is executed. In the case of an agreement executed before January 1, 1982 , such agreement shall cease on February 1, 1982 , to be treated as a lease under section 168(f)(8) unless a return, signed by the lessor and containing the information required to be included in subsection (b), has been filed with the Internal Revenue Service not later than January 31, 1982 . If the lessor does not file a return under subparagraph (A), the return requirement under subparagraph (A) shall be satisfied if such return is filed by the lessee before January 31, 1982 . a lessor or lessee fails to file any return within the time prescribed by this subsection, and such failure is shown to be due to reasonable cause and not due to willful neglect, The name, address, and taxpayer identifying number of the lessor and the lessee (and parent company if a consolidated return is filed); The district director’s office with which the income tax returns of the lessor and lessee are filed; A description of each individual property with respect to which the election is made; The date on which the lessee places the property in service, the date on which the lease begins and the term of the lease; The recovery property class and the ADR midpoint life of the leased property; The payment terms between the parties to the lease transaction; Whether the ACRS deductions and the investment tax credit are allowable to the same taxpayer; The aggregate amount paid to outside parties to arrange or carry out the transaction; For the lessor only: the unadjusted basis of the property as defined in section 168(d)(1); For the lessor only: if the lessor is a partnership or a grantor trust, the name, address, and taxpayer identifying number of the partners or the beneficiaries, and the district director’s office with which the income tax return of each partner or beneficiary is filed; and Such other information as may be required by the return or its instructions. In the case of agreements executed after December 31, 1982 , to the extent provided in regulations prescribed by the Secretary of the Treasury or his delegate, the provisions of this section shall be modified to coordinate such provisions with the other information requirements of the Internal Revenue Code of 1986.”