Buy-American Investment Incentive Act

Summary: Buy-American Investment Incentive Act - Amends the Internal Revenue Code to allow an incremental investment credit in an amount equal to ten percent of the excess of the aggregate bases of qualified investment credit properties placed in service over 80 percent of the base amount. 
Excludes:  (1) property if completed outside the United States or if less than 75 percent of the basis of the property is attributable to value added within the United States; and (2) passenger automobiles and office furnishings. 
Establishes formulas for determining the base amount. 
Makes the incremental investment credit inapplicable to any property to which the energy or rehabilitation credit would apply unless the taxpayer waives the application of such credits. 
Establishes special rules for the incremental investment credit in relation to limitations based on the amount of tax.  Applies such limitations and provisions concerning carryback and carryforward of unused credits separately, in the case of a C corporation:  (1) first with respect to the credit allowed as is not attributable to the incremental investment credit; and (2) then with respect to such credit.  Limits the credit, in lieu of current limitations, to the net chapter 1 tax.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Buy-American Investment Incentive 
Act''.

SEC. 2. INCREMENTAL INVESTMENT CREDIT.

    (a) Allowance of Credit.--Section 46 of the Internal Revenue Code 
of 1986 (relating to amount of investment credit) is amended by 
striking ``and'' at the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ``, and'', and by adding at the 
end thereof the following new paragraph:
            ``(4) the incremental investment credit.''
    (b) Amount of Credit.--Section 48 of such Code is amended by adding 
at the end thereof the following new subsection:
    ``(c) Incremental Investment Credit.--
            ``(1) In general.--For purposes of section 46, the 
        incremental investment credit for any taxable year is an amount 
        equal to 10 percent of the excess (if any) of--
                    ``(A) the aggregate bases of qualified investment 
                credit properties placed in service during such taxable 
                year, over
                    ``(B) 80 percent of the base amount.
            ``(2) Qualified investment credit property.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `qualified investment 
                credit property' means any eligible property--
                            ``(i) which is tangible property to which 
                        section 168 applies,
                            ``(ii) which is section 1245 property (as 
                        defined in section 1245(a)(3)), and
                            ``(iii)(I) the construction, 
                        reconstruction, or erection of which is 
                        completed by the taxpayer, or
                            ``(II) which is acquired by the taxpayer if 
                        the original use of such property commences 
                        with the taxpayer.
                    ``(B) Eligible property.--
                            ``(i) In general.--Except as otherwise 
                        provided in this subparagraph, the term 
                        `eligible property' means tangible property 
                        (other than a building, its structural 
                        components, or an air conditioning or heating 
                        unit), but only if such property--
                                    ``(I) is used as an integral part 
                                of manufacturing, production (including 
                                agriculture), or extraction or of 
                                furnishing transportation, 
                                communications, electrical energy, gas, 
                                water, waste disposal, or pollution 
                                control services,
                                    ``(II) constitutes a research 
                                facility or research equipment used in 
                                connection with any of the activities 
                                referred to in subclause (I), or
                                    ``(III) constitutes a facility used 
                                in connection with any of the 
                                activities referred to in subclause (I) 
                                for the bulk storage of fungible 
                                commodities (including commodities in a 
                                liquid or gaseous state).
                            ``(ii) Imported property not eligible.--
                        Property shall not be treated as eligible 
                        property if--
                                    ``(I) such property was completed 
                                outside the United States, or
                                    ``(II) less than 75 percent of the 
                                basis of such property is attributable 
                                to value added within the United 
                                States.
                        For purposes of this clause, the term `United 
                        States' includes the Commonwealth of Puerto 
                        Rico and the possessions of the United States.
                            ``(iii) Certain property not eligible.--Any 
                        passenger automobile and any office furnishings 
                        shall not be treated as eligible property.
            ``(3) Base amount.--For purposes of paragraph (1)(B)--
                    ``(A) In general.--The term `base amount' means the 
                product of--
                            ``(i) the fixed-base percentage, and
                            ``(ii) the average annual gross receipts of 
                        the taxpayer for the 4 taxable years preceding 
                        the taxable year for which the credit is being 
                        determined (hereafter in this subsection 
                        referred to as the `credit year').
                    ``(B) Minimum base amount.--In no event shall the 
                base amount be less than 50 percent of the amount 
                determined under paragraph (1)(A).
                    ``(C) Fixed-base percentage.--
                            ``(i) In general.--The fixed-base 
                        percentage is the percentage which the 
                        aggregate amounts described in paragraph (1)(A) 
                        for taxable years beginning after December 31, 
                        1987, and before January 1, 1993, is of the 
                        aggregate gross receipts of the taxpayer for 
                        such taxable years.
                            ``(ii) Rounding.--The percentages 
                        determined under clause (i) shall be rounded to 
                        the nearest \1/100\ of 1 percent.
                    ``(D) Other rules.--Rules similar to the rules of 
                paragraphs (4) and (5) of section 41(c) shall apply for 
                purposes of this paragraph.
            ``(4) Coordination with other credits.--This subsection 
        shall not apply to any property to which the energy credit or 
        rehabilitation credit would apply unless the taxpayer elects to 
        waive the application of such credits to such property.
            ``(5) Certain progress expenditure rules made applicable.--
        Rules similar to rules of subsection (c)(4) and (d) of section 
        46 (as in effect on the day before the date of the enactment of 
        the Revenue Reconciliation Act of 1990) shall apply for 
        purposes of this subsection.''
    (c) Incremental Investment Credit Allowable Against Entire Regular 
Tax and Alternative Minimum Tax.--
            (1) Subsection (c) of section 38 of such Code (relating to 
        limitation based on amount of tax) is amended by adding at the 
        end thereof the following new paragraph:
            ``(3) Special rules for incremental investment credit.--
                    ``(A) In general.--In the case of a C corporation, 
                this section and section 39 shall be applied 
                separately--
                            ``(i) first with respect to so much of the 
                        credit allowed by subsection (a) as is not 
                        attributable to the incremental investment 
                        credit, and
                            ``(ii) then with respect to the incremental 
                        investment credit.
                    ``(B) Rules for application of incremental 
                investment credit.--
                            ``(i) In general.--In the case of the 
                        incremental investment credit, in lieu of 
                        applying the preceding paragraphs of this 
                        subsection, the amount of such credit allowed 
                        under subsection (a) for any taxable year shall 
                        not exceed the net chapter 1 tax for such year.
                            ``(ii) Net chapter 1 tax.--For purposes of 
                        clause (i), the term `net chapter 1 tax' means 
                        the sum of the regular tax liability for the 
                        taxable year and the tax imposed by section 55 
                        for the taxable year, reduced by the sum of the 
                        credits allowable under this part for the 
                        taxable year (other than under section 34 and 
                        other than the incremental investment credit).
                    ``(C) Incremental investment credit.--For purposes 
                of this paragraph, the term `incremental investment 
                credit' means the credit allowable under subsection (a) 
                by reason of section 48(c).''
            (2) Paragraph (2) of section 55(c) of such Code is amended 
        to read as follows:
            ``(2) Cross references.--

                                ``(A) For provisions providing that 
certain credits are not allowable against the tax imposed by this 
section, see sections 26(a), 28(d)(2), 29(b)(5), and 38(c).
                                ``(B) For provision allowing 
incremental investment credit against the tax imposed by this section, 
see section 38(c)(3).''
    (d) Technical Amendments.--
            (1) Clause (ii) of section 49(a)(1)(C) of such Code is 
        amended by inserting ``or qualified investment credit 
        property'' after ``energy property''.
            (2) Subparagraph (E) of section 50(a)(2) of such Code is 
        amended by inserting ``or 48(c)(5)'' before the period at the 
        end thereof.
            (3) Paragraph (5) of section 50(a) of such Code is amended 
        by adding at the end thereof the following new subparagraph:
                    ``(D) Special rules for certain property.--In the 
                case of any qualified investment credit property which 
                is 3-year property (within the meaning of section 
                168(e))--
                            ``(i) the percentage set forth in clause 
                        (ii) of the table contained in paragraph (1)(B) 
                        shall be 66 percent,
                            ``(ii) the percentage set forth in clause 
                        (iii) of such table shall be 33 percent, and
                            ``(iii) clauses (iv) and (v) of such table 
                        shall not apply.''
            (4)(A) The section heading for section 48 of such Code is 
        amended to read as follows:

``SEC. 48. OTHER CREDITS.''

            (B) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 48 and inserting the following:

                              ``Sec. 48. Other credits.''
    (e) Effective Date.--The amendments made by this section shall 
apply to--
            (1) property acquired by the taxpayer after December 3, 
        1992, and
            (2) property the construction, reconstruction, or erection 
        of which is completed by the taxpayer after December 3, 1992, 
        but only to the extent of the basis thereof attributable to 
        construction, reconstruction, or erection after such date.