II

103D CONGRESS

1ST SESSION S. 1691

To amend the Internal Revenue Code of 1986 to provide taxpayers engaged

in certain agriculture-related activities a credit against income tax for

property used to control environmental pollution and for soil and water

conservation expenditures.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 19 (legislative day, NOVEMBER 2), 1993

Mr. CONRAD (for himself, Mr. DASCHLE, and Mr. GRASSLEY) introduced the

following bill; which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

taxpayers engaged in certain agriculture-related activities

a credit against income tax for property used to control

environmental pollution and for soil and water conservation expenditures.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

S 1691 IS

1 SECTION 1. CREDIT FOR PROPERTY USED IN CERTAIN AG2 RICULTURE-RELATED ACTIVITIES TO CON3 TROL ENVIRONMENTAL POLLUTION AND FOR

4 SOIL AND WATER CONSERVATION EXPENDI5 TURES.

6 (a) IN GENERAL.—Section 46 of the Internal Reve7 nue Code of 1986 (relating to amount of investment cred8 it) is amended by striking ‘‘and’’ at the end of paragraph

9 (2), by striking the period at the end of paragraph (3)

10 and inserting ‘‘, and’’, and by adding at the end thereof

11 the following paragraph:

12 ‘‘(4) in the case of an eligible taxpayer (as de13 fined in section 48(c)), the agricultural environ14 mental credit.’’

15 (b) AGRICULTURAL ENVIRONMENTAL CREDIT.—Sec16 tion 48 of such Code is amended by adding at the end

17 thereof the following new subsection:

18 ‘‘(c) AGRICULTURAL ENVIRONMENTAL CREDIT.—

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

20 in the case of an eligible taxpayer, the agricultural

21 environmental credit for any taxable year is equal to

22 the lesser of—

23 ‘‘(A) the sum of—

24 ‘‘(i) 15 percent of the portion of the

25 basis of each agricultural environmental
3

S 1691 IS

1 property placed in service by the taxpayer

2 during such taxable year, and

3 ‘‘(ii) 15 percent of the amount allowed

4 as a deduction under section 175 (deter5 mined without regard to paragraph (4)(B))

6 for such taxable year, or

7 ‘‘(B) the lesser of—

8 ‘‘(i) $15,000, or

9 ‘‘(ii) the excess of—

10 ‘‘(I) $150,000, over

11 ‘‘(II) the amount of the credit

12 taken into account under this section

13 by the taxpayer for taxable years pre14 ceding the taxable year.

15 ‘‘(2) ELIGIBLE TAXPAYER.—

16 ‘‘(A) IN GENERAL.—For purposes of this

17 subsection,the term ‘eligible taxpayer’ means

18 any taxpayer primarily engaged in a farming19 related business.

20 ‘‘(B) FARMING-RELATED BUSINESS.—For

21 purposes of this subsection, the term ‘farming22 related business’ means—

23 ‘‘(i) a farming business (as defined in

24 section 263A(e)(4)),
4

S 1691 IS

1 ‘‘(ii) a trade or business of mixing fer2 tilizers from purchased fertilizer materials,

3 and

4 ‘‘(iii) a trade or business of the whole5 sale distribution of animal feeds, fertilizers,

6 agricultural chemicals, pesticides, seeds, or

7 other farm supplies (other than grains).

8 ‘‘(3) AGRICULTURAL ENVIRONMENTAL PROP9 ERTY.—

10 ‘‘(A) IN GENERAL.—For purposes of this

11 subsection, the term ‘agricultural environmental

12 property’ means any new identifiable treatment

13 facility—

14 ‘‘(i) which is used in a farming-related

15 business for the primary purpose of com16 plying with Federal, State, and local envi17 ronmental laws dealing with the abatement

18 or control of water, soil, or atmospheric

19 pollution or contamination by removing, al20 tering, disposing, storing, or preventing the

21 creation or emission of pollutants, contami22 nants, wastes, or heat, and

23 ‘‘(ii) which does not significantly—

24 ‘‘(I) increase the output or capac25 ity, extend the useful life, or reduce
5

S 1691 IS

1 the total operating costs of plant or

2 property to which such facility relates,

3 or

4 ‘‘(II) alter the nature of any

5 manufacturing or production process

6 or facility.

7 ‘‘(B) NEW IDENTIFIABLE TREATMENT FA8 CILITY.—The term ‘new identifiable treatment

9 facility’ has the meaning given such term by

10 section 169(d)(4)(A), determined by substitut11 ing ‘December 31, 1993’ for ‘December 31,

12 1968’.

13 ‘‘(4) SPECIAL RULES.—

14 ‘‘(A) COORDINATION WITH ENERGY AND

15 REHABILITATION CREDITS.—This subsection

16 shall not apply to—

17 ‘‘(i) any property to the extent the

18 basis of such property is attributable to

19 qualified rehabilitation expenditures (as de20 fined in section 47(c)(2)), or

21 ‘‘(ii) energy property.

22 ‘‘(B) COORDINATION WITH DEDUCTION

23 FOR SOIL AND WATER CONSERVATION EXPEND24 ITURES.—The amount which would (but for

25 this subparagraph) be allowed as a deduction
6

S 1691 IS

1 under section 175 for any taxable year shall be

2 reduced by the amount of the credit allowed by

3 paragraph (1)(B) for such year.

4 ‘‘(C) COORDINATION WITH AMORTIZATION

5 OF POLLUTION CONTROL FACILITIES.—This

6 subsection shall not apply to any property to

7 the extent an election is made under section

8 169 with respect to the basis of such property.’’

9 (c) CLERICAL AMENDMENTS.—

10 (1) The section heading for section 48 of such

11 Code is amended to read as follows:

12 ‘‘SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; AGRI13 CULTURAL ENVIRONMENTAL CREDIT.’’

14 (2) The item relating to section 48 in the table

15 of sections for subpart E of part IV of subchapter

16 A of chapter 1 of such Code is amended to read as

17 follows:

‘‘Sec. 48. Energy credit; reforestation credit; agricultural environmental credit.’’

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

19 this section shall apply to periods after December 31,

20 1993, under rules similar to the rules of section 48(m)

21 of the Internal Revenue Code of 1986 (as in effect on the

22 day before the date of the enactment of the Revenue Rec23 onciliation Act of 1990).

Æ