I

103D CONGRESS

2D SESSION H. R. 4879

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

regular investment tax credit.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 1, 1994

Mr. MCHALE 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 regular investment tax 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. SHORT TITLE.

4 This Act may be cited as the ‘‘Investment Tax Credit

5 Act of 1994’’.

6 SEC. 2. RESTORATION OF INVESTMENT CREDIT.

7 (a) ALLOWANCE OF CREDIT.—Section 46 of the In8 ternal Revenue Code of 1986 (relating to amount of in9 vestment credit) is amended by striking ‘‘and’’ at the end

10 of paragraph (2), by striking the period at the end of para-
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1 graph (3) and inserting ‘‘, and’’, and by adding at the

2 end thereof the following new paragraph:

3 ‘‘(4) the general investment credit.’’

4 (b) AMOUNT OF CREDIT.—Section 48 of such Code

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

6 subsection:

7 ‘‘(c) GENERAL INVESTMENT CREDIT.—

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

9 the general investment credit for any taxable year is

10 an amount equal to 10 percent of the qualified in11 vestment for such taxable year.

12 ‘‘(2) QUALIFIED INVESTMENT.—

13 ‘‘(A) IN GENERAL.—For purposes of para14 graph (1), the qualified investment for any tax15 able year is the aggregate of—

16 ‘‘(i) the applicable percentage of the

17 basis of each new section 38 property

18 placed in service by the taxpayer during

19 such taxable year, plus

20 ‘‘(ii) the applicable percentage of the

21 cost of each used section 38 property

22 placed in service by the taxpayer during

23 such taxable year.

24 ‘‘(B) APPLICABLE PERCENTAGE.—For

25 purposes of subparagraph (A), the applicable
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1 percentage for any property shall be determined

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

3 (as in effect on the day before the date of the

4 enactment of the Revenue Reconciliation Act of

5 1990).

6 ‘‘(C) CERTAIN RULES MADE APPLICA7 BLE.—The provisions of subsections (b) and (c)

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

9 date of the enactment of the Revenue Reconcili10 ation Act of 1990) shall apply for purposes of

11 this paragraph.

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

13 this subsection, the term ‘section 38 property’

14 means—

15 ‘‘(A) tangible personal property (other

16 than an air conditioning or heating unit), or

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

18 a building and its structural components) but

19 only if such property—

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

21 manufacturing, production, or extraction

22 or of furnishing transportation, commu23 nications, electrical energy, gas, water, or

24 sewage disposal services,
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1 ‘‘(ii) constitutes a research facility

2 used in connection with any of the activi3 ties referred to in clause (i), or

4 ‘‘(iii) constitutes a facility used in

5 connection with any of the activities re6 ferred to in clause (i) for the bulk storage

7 of fungible commodities (including com8 modities in a liquid or gaseous state), or

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

10 ‘‘(i) the construction, reconstruction,

11 or erection of the elevator or escalator is

12 completed by the taxpayer, or

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

14 or escalator commences with the taxpayer,

15 or

16 ‘‘(D) single purpose agricultural or horti17 cultural structures; or

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

19 building and its structural components) used in

20 connection with the distribution of petroleum or

21 any primary product of petroleum.

22 Such term includes only property to which section

23 168 applies without regard to any useful life and

24 any other property with respect to which deprecia25 tion (or amortization in lieu of depreciation) is al-
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1 lowable and having a useful life (determined as of

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

3 years or more.

4 ‘‘(4) COORDINATION WITH OTHER CREDITS.—

5 This subsection shall not apply to any property to

6 which the energy credit or rehabilitation credit

7 would apply unless the taxpayer elects to waive the

8 application of such credits to such property.

9 ‘‘(5) CERTAIN PROGRESS EXPENDITURE RULES

10 MADE APPLICABLE.—Rules similar to rules of sub11 section (c)(4) and (d) of section 46 (as in effect on

12 the day before the date of the enactment of the Rev13 enue Reconciliation Act of 1990) shall apply for pur14 poses of this subsection.’’

15 (c) TECHNICAL AMENDMENTS.—

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

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

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

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

20 the end thereof the following new clause:

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

22 property and the cost of any used section

23 38 property.’’
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1 (2) Subparagraph (E) of section 50(a)(2) of

2 such Code is amended by inserting ‘‘or 48(c)(5)’’ be3 fore the period at the end thereof.

4 (3) Paragraph (5) of section 50(a) of such Code

5 is amended by adding at the end thereof the follow6 ing new subparagraph:

7 ‘‘(D) SPECIAL RULES FOR CERTAIN PROP8 ERTY.—In the case of any section 38 property

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

10 section 168(e))—

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

12 (ii) of the table contained in paragraph

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

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

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

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

17 shall not apply.’’

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

19 such Code is amended to read as follows:

20 ‘‘SEC. 48. OTHER CREDITS.’’

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

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

23 amended by striking the item relating to section 48

24 and inserting the following:

‘‘Sec. 48. Other credits.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

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

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

4 section 48(m) of the Internal Revenue Code of 1986 (as

5 in effect on the day before the date of the enactment of

6 the Revenue Reconciliation Act of 1990).

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