I

104TH CONGRESS

2D SESSION H. R. 2983

To amend the Internal Revenue Code of 1986 to restore the 10 percent

investment credit.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 28, 1996

Mr. FOX of Pennsylvania introduced the following bill; which was referred to

the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to restore

the 10 percent investment credit.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. RESTORATION OF INVESTMENT CREDIT.

4 (a) ALLOWANCE OF CREDIT.—Section 46 of the In5 ternal Revenue Code of 1986 (relating to amount of in6 vestment credit) is amended by striking ‘‘and’’ at the end

7 of paragraph (2), by striking the period at the end of para8 graph (3) and inserting ‘‘, and’’, and by adding at the

9 end the following new paragraph:

10 ‘‘(4) the general investment credit.’’
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1 (b) AMOUNT OF CREDIT.—Section 48 of such Code

2 is amended by adding at the end thereof the following new

3 subsection:

4 ‘‘(c) GENERAL INVESTMENT CREDIT.—

5 ‘‘(1) IN GENERAL.—For purposes of section 46,

6 the general investment credit for any taxable year is

7 an amount equal to 10 percent of the qualified in8 vestment for such taxable year.

9 ‘‘(2) QUALIFIED INVESTMENT.—

10 ‘‘(A) IN GENERAL.—For purposes of para11 graph (1), the qualified investment for any tax12 able year is the aggregate of—

13 ‘‘(i) the applicable percentage of the

14 basis of each new section 38 property

15 placed in service by the taxpayer during

16 such taxable year, plus

17 ‘‘(ii) the applicable percentage of the

18 cost of each used section 38 property

19 placed in service by the taxpayer during

20 such taxable year.

21 ‘‘(B) APPLICABLE PERCENTAGE.—For

22 purposes of subparagraph (A), the applicable

23 percentage for any property shall be determined

24 under paragraphs (2) and (7) of section 46(c)

25 (as in effect on the day before the date of the
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1 enactment of the Revenue Reconciliation Act of

2 1990).

3 ‘‘(C) CERTAIN RULES MADE APPLICA4 BLE.—The provisions of subsections (b) and (c)

5 of section 48 (as in effect on the day before the

6 date of the enactment of the Revenue Reconcili7 ation Act of 1990) shall apply for purposes of

8 this part.

9 ‘‘(3) SECTION 38 PROPERTY.—For purposes of

10 this subsection, the term ‘section 38 property’

11 means—

12 ‘‘(A) tangible personal property (other

13 than an air conditioning or heating unit), or

14 ‘‘(B) other tangible property (not including

15 a building and its structural components) but

16 only if such property—

17 ‘‘(i) is used as an integral part of

18 manufacturing, production, or extraction

19 or of furnishing transportation, commu20 nications, electrical energy, gas, water, or

21 sewage disposal services, or

22 ‘‘(ii) constitutes a research facility

23 used in connection with any of the activi24 ties referred to in clause (i), or
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1 ‘‘(iii) constitutes a facility used in

2 connection with any of the activities re3 ferred to in clause (i) for the bulk storage

4 of fungible commodities (including com5 modities in a liquid or gaseous state), or

6 ‘‘(C) elevators and escalators, but only if—

7 ‘‘(i) the construction, reconstruction,

8 or erection of the elevator or escalator is

9 completed by the taxpayer, or

10 ‘‘(ii) the original use of such elevator

11 or escalator commences with the taxpayer,

12 or

13 ‘‘(D) single purpose agricultural or horti14 cultural structures; or

15 ‘‘(E) a storage facility (not including a

16 building and its structural components) used in

17 connection with the distribution of petroleum or

18 any primary product of petroleum.

19 Such term includes only property to which section

20 168 applies without regard to any useful life and

21 any other property with respect to which deprecia22 tion (or amortization in lieu of depreciation) is al23 lowable and having a useful life (determined as of

24 the time such property is placed in service) of 3

25 years or more.
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1 ‘‘(4) COORDINATION WITH OTHER CREDITS.—

2 This subsection shall not apply to any property to

3 which the energy credit or rehabilitation credit

4 would apply unless the taxpayer elects to waive the

5 application of such credits to such property.

6 ‘‘(5) CERTAIN PROGRESS EXPENDITURE RULES

7 MADE APPLICABLE.—Rules similar to rules of sub8 section (c)(4) and (d) of section 46 (as in effect on

9 the day before the date of the enactment of the Rev10 enue Reconciliation Act of 1990) shall apply for pur11 poses of this subsection.’’

12 (c) TECHNICAL AMENDMENTS.—

13 (1) Subparagraph (C) of section 49(a)(1) of

14 such Code is amended by striking ‘‘and’’ at the end

15 of clause (ii), by striking the period at the end of

16 clause (iii) and inserting ‘‘, and’’, and by adding at

17 the end the following new clause:

18 ‘‘(iv) the basis of any new section 38

19 property and the cost of any used section

20 38 property.’’

21 (2) Subparagraph (E) of section 50(a)(2) of

22 such Code is amended by inserting ‘‘or 48(c)(5)’’ be23 fore the period at the end.
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1 (3) Paragraph (5) of section 50(a) of such Code

2 is amended by adding at the end thereof the follow3 ing new subparagraph:

4 ‘‘(D) SPECIAL RULES FOR CERTAIN PROP5 ERTY.—In the case of any section 38 property

6 which is 3-year property (within the meaning of

7 section 168(e))—

8 ‘‘(i) the percentage set forth in clause

9 (ii) of the table contained in paragraph

10 (1)(B) shall be 66 percent,

11 ‘‘(ii) the percentage set forth in clause

12 (iii) of such table shall be 33 percent, and

13 ‘‘(iii) clauses (iv) and (v) of such table

14 shall not apply.’’

15 (4)(A) The section heading for section 48 of

16 such Code is amended to read as follows:

17 ‘‘SEC. 48. OTHER CREDITS.’’

18 (B) The table of sections for subpart E of part

19 IV of subchapter A of chapter 1 of such Code is

20 amended by striking the item relating to section 48

21 and inserting the following:

‘‘Sec. 48. Other credits.’’

22 (d) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to periods after the date of the

24 enactment of this Act under rules similar to the rules of

25 section 48(m) of such Code (as in effect on the day before
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1 the date of the enactment of the Revenue Reconciliation

2 Act of 1990).

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