II

103D CONGRESS

1ST SESSION S. 211

To amend the Internal Revenue Code of 1986 to provide tax credits for

Indian investment and employment, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 26 (legislative day, JANUARY 5), 1993

Mr. MCCAIN (for himself, Mr. INOUYE, Mr. DOMENICI, Mr. SIMON, Mr.

DASCHLE, Mr. GORTON, Mr. BOREN, Mr. MURKOWSKI, Mr. BAUCUS, Mr.

CAMPBELL, and Mr. BINGAMAN) 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

tax credits for Indian investment and employment, and

for other purposes.

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 ‘‘Indian Employment

5 and Investment Act of 1993’’.

6 SEC. 2. INVESTMENT TAX CREDIT FOR PROPERTY ON IN7 DIAN RESERVATIONS.

8 (a) ALLOWANCE OF INDIAN RESERVATION CRED9 IT.—Section 46 of the Internal Revenue Code of 1986 (re-
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1 lating to investment credits) is amended by striking ‘‘and’’

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

3 end of paragraph (3) and inserting ‘‘, and’’, and by adding

4 after paragraph (3) the following new paragraph:

5 ‘‘(4) the Indian reservation credit.’’.

6 (b) AMOUNT OF INDIAN RESERVATION CREDIT.—

7 (1) IN GENERAL.—Section 48 of such Code (re8 lating to the energy credit and the reforestation

9 credit) is amended by adding after subsection (b)

10 the following new subsection:

11 ‘‘(c) INDIAN RESERVATION CREDIT.—

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

13 the Indian reservation credit for any taxable year is

14 the Indian reservation percentage of the qualified in15 vestment in qualified Indian reservation property

16 placed in service during such taxable year, deter17 mined in accordance with the following table:

‘‘In the case of qualified

Indian reservation property The Indian reservation

which is: percentage is:

Reservation personal property ............................... 10

New reservation construction property ................. 15

Reservation infrastructure investment .................. 15.

18 ‘‘(2) QUALIFIED INVESTMENT IN QUALIFIED

19 INDIAN RESERVATION PROPERTY DEFINED.—For

20 purposes of this subpart—

21 ‘‘(A) IN GENERAL.—The term ‘qualified

22 Indian reservation property’ means property—
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1 ‘‘(i) which is—

2 ‘‘(I) reservation personal prop3 erty,

4 ‘‘(II) new reservation construc5 tion property, or

6 ‘‘(III) reservation infrastructure

7 investment, and

8 ‘‘(ii) not acquired (directly or indi9 rectly) by the taxpayer from a person who

10 is related to the taxpayer (within the

11 meaning of section 465(b)(3)(C)).

12 The term ‘qualified Indian reservation property’

13 does not include any property (or any portion

14 thereof) placed in service for purposes of con15 ducting or housing class I, II, or III gaming (as

16 defined in section 4 of the Indian Regulatory

17 Act (25 U.S.C. 2703)).

18 ‘‘(B) QUALIFIED INVESTMENT.—The term

19 ‘qualified investment’ means—

20 ‘‘(i) in the case of reservation infra21 structure investment, the amount expended

22 by the taxpayer for the acquisition or con23 struction of the reservation infrastructure

24 investment; and
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1 ‘‘(ii) in the case of all other qualified

2 Indian reservation property, the taxpayer’s

3 basis for such property.

4 ‘‘(C) RESERVATION PERSONAL PROP5 ERTY.—The term ‘reservation personal prop6 erty’ means qualified personal property which is

7 used by the taxpayer predominantly in the ac8 tive conduct of a trade or business within an

9 Indian reservation. Property shall not be treat10 ed as ‘reservation personal property’ if it is

11 used or located outside the Indian reservation

12 on a regular basis.

13 ‘‘(D) QUALIFIED PERSONAL PROPERTY.—

14 The term ‘qualified personal property’ means

15 property—

16 ‘‘(i) for which depreciation is allow17 able under section 168,

18 ‘‘(ii) which is not—

19 ‘‘(I) nonresidential real property,

20 ‘‘(II) residential rental property,

21 or

22 ‘‘(III) real property which is not

23 described in (I) or (II) and which has

24 a class life of more than 12.5 years.
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1 For purposes of this subparagraph, the terms

2 ‘nonresidential real property’, ‘residential rental

3 property’, and ‘class life’ have the respective

4 meanings given such terms by section 168.

5 ‘‘(E) NEW RESERVATION CONSTRUCTION

6 PROPERTY.—The term ‘new reservation con7 struction property’ means qualified real prop8 erty—

9 ‘‘(i) which is located in an Indian res10 ervation,

11 ‘‘(ii) which is used by the taxpayer

12 predominantly in the active conduct of a

13 trade or business within an Indian reserva14 tion, and

15 ‘‘(iii) which is originally placed in

16 service by the taxpayer.

17 ‘‘(F) QUALIFIED REAL PROPERTY.—The

18 term ‘qualified real property’ means property

19 for which depreciation is allowable under sec20 tion 168 and which is described in clause (I),

21 (II), or (III) of subparagraph (D)(ii).

22 ‘‘(G) RESERVATION INFRASTRUCTURE IN23 VESTMENT.—

24 ‘‘(i) IN GENERAL.—The term ‘reserva25 tion infrastructure investment’ means
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1 qualified personal property or qualified real

2 property which—

3 ‘‘(I) benefits the tribal infrastruc4 ture,

5 ‘‘(II) is available to the general

6 public, and

7 ‘‘(III) is placed in service in con8 nection with the taxpayer’s active con9 duct of a trade or business within an

10 Indian reservation.

11 ‘‘(ii) PROPERTY MAY BE LOCATED

12 OUTSIDE THE RESERVATION.—Qualified

13 personal property and qualified real prop14 erty used or located outside an Indian res15 ervation shall be reservation infrastructure

16 investment only if its purpose is to connect

17 to existing tribal infrastructure in the res18 ervation, and shall include, but not be lim19 ited to, roads, power lines, water systems,

20 railroad spurs, and communications facili21 ties.

22 ‘‘(H) COORDINATION WITH OTHER CRED23 ITS.—The term ‘qualified Indian reservation

24 property’ shall not include any property with re-
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1 spect to which the energy credit or the rehabili2 tation credit is allowed.

3 ‘‘(3) REAL ESTATE RENTALS.—For purposes of

4 this section, the rental to others of real property lo5 cated within an Indian reservation shall be treated

6 as the active conduct of a trade or business in an

7 Indian reservation.

8 ‘‘(4) INDIAN RESERVATION DEFINED.—For

9 purposes of this subpart, the term ‘Indian reserva10 tion’ means a reservation, as defined in—

11 ‘‘(A) section 3(d) of the Indian Financing

12 Act of 1974 (25 U.S.C. 1452(d)), or

13 ‘‘(B) section 4(10) of the Indian Child

14 Welfare Act of 1978 (25 U.S.C. 1903(10)).

15 ‘‘(5) LIMITATION BASED ON UNEMPLOY16 MENT.—

17 ‘‘(A) GENERAL RULE.—The Indian res18 ervation credit allowed under section 46 for any

19 taxable year shall equal—

20 ‘‘(i) if the Indian unemployment rate

21 on the applicable Indian reservation for

22 which the credit is sought exceeds 300 per23 cent of the national average unemployment

24 rate at any time during the calendar year

25 in which the property is placed in service
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1 or during the immediately preceding 2 cal2 endar years, 100 percent of such credit,

3 ‘‘(ii) if such Indian unemployment

4 rate exceeds 150 percent but not 300 per5 cent, 50 percent of such credit, and

6 ‘‘(iii) if such Indian unemployment

7 rate does not exceed 150 percent, 0 per8 cent of such credit.

9 ‘‘(B) SPECIAL RULE FOR LARGE

10 PROJECTS.—In the case of a qualified Indian

11 reservation property which has (or is a compo12 nent of a project which has) a projected con13 struction period of more than 2 years or a cost

14 of more than $1,000,000, subparagraph (A)

15 shall apply by substituting ‘during the earlier of

16 the calendar year in which the taxpayer enters

17 into a binding agreement to make a qualified

18 investment or the first calendar year in which

19 the taxpayer has expended at least 10 percent

20 of the taxpayer’s qualified investment, or the

21 preceding calendar year’ for ‘during the cal22 endar year in which the property is placed in

23 service or during the immediately preceding 2

24 calendar years’.
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1 ‘‘(C) DETERMINATION OF INDIAN UNEM2 PLOYMENT.—For purposes of this paragraph,

3 with respect to any Indian reservation, the In4 dian unemployment rate shall be based upon

5 Indians unemployed and able to work, and shall

6 be certified by the Secretary of the Interior.

7 ‘‘(6) COORDINATION WITH NONREVENUE

8 LAWS.—Any reference in this subsection to a provi9 sion not contained in this title shall be treated for

10 purposes of this subsection as a reference to such

11 provision as in effect on the date of the enactment

12 of this paragraph.’’.

13 (2) LODGING TO QUALIFY.—Paragraph (2) of

14 section 50(b) of such Code (relating to property used

15 for lodging) is amended—

16 (A) by striking ‘‘and’’ at the end of sub17 paragraph (C),

18 (B) by striking the period at the end of

19 subparagraph (D) and inserting ‘‘; and’’ and

20 (C) by adding at the end thereof the fol21 lowing subparagraph:

22 ‘‘(E) new reservation construction prop23 erty.’’.

24 (c) RECAPTURE.—Subsection (a) of section 50 of

25 such Code (relating to recapture in case of dispositions,
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1 etc.), is amended by adding at the end thereof the follow2 ing new paragraph:

3 ‘‘(6) SPECIAL RULES FOR INDIAN RESERVATION

4 PROPERTY.—

5 ‘‘(A) IN GENERAL.—If, during any taxable

6 year, property with respect to which the tax7 payer claimed an Indian reservation credit—

8 ‘‘(i) is disposed of, or

9 ‘‘(ii) in the case of reservation per10 sonal property—

11 ‘‘(I) otherwise ceases to be in12 vestment credit property with respect

13 to the taxpayer, or

14 ‘‘(II) is removed from the Indian

15 reservation, converted or otherwise

16 ceases to be Indian reservation prop17 erty,

18 the tax under this chapter for such taxable year

19 shall be increased by the amount described in

20 subparagraph (B).

21 ‘‘(B) AMOUNT OF INCREASE.—The in22 crease in tax under subparagraph (A) shall

23 equal the aggregate decrease in the credits al24 lowed under section 38 by reason of section

25 48(c) for all prior taxable years which would
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1 have resulted had the qualified investment

2 taken into account with respect to the property

3 been limited to an amount which bears the

4 same ratio to the qualified investment with re5 spect to such property as the period such prop6 erty was held by the taxpayer bears to the ap7 plicable recovery period under section 168(g).

8 ‘‘(C) COORDINATION WITH OTHER RECAP9 TURE PROVISIONS.—In the case of property to

10 which this paragraph applies, paragraph (1)

11 shall not apply and the rules of paragraphs (3),

12 (4), and (5) shall apply.’’.

13 (d) BASIS ADJUSTMENT TO REFLECT INVESTMENT

14 CREDIT.—Paragraph (3) of section 50(c) of such Code

15 (relating to basis adjustment to investment credit prop16 erty) is amended by striking ‘‘energy credit or reforest17 ation credit’’ and inserting ‘‘energy credit, reforestation

18 credit or Indian reservation credit other than with respect

19 to any expenditure for new reservation construction prop20 erty’’.

21 (e) CERTAIN GOVERNMENTAL USE PROPERTY TO

22 QUALIFY.—Paragraph (4) of section 50(b) of such Code

23 (relating to property used by governmental units or for24 eign persons or entities) is amended by redesignating sub25 paragraphs (D) and (E) as subparagraphs (E) and (F),
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1 respectively, and inserting after subparagraph (C) the fol2 lowing new subparagraph:

3 ‘‘(D) EXCEPTION FOR RESERVATION IN4 FRASTRUCTURE INVESTMENT.—This paragraph

5 shall not apply for purposes of determining the

6 Indian reservation credit with respect to res7 ervation infrastructure investment.’’.

8 (f) APPLICATION OF AT-RISK RULES.—Subpara9 graph (C) of section 49(a)(1) of such Code is amended

10 by striking ‘‘and’’ at the end of clause (ii), by striking

11 the period at the end of clause (iii) and inserting ‘‘, and’’,

12 and by adding at the end the following new clause:

13 ‘‘(iv) the qualified investment in quali14 fied Indian reservation property.’’.

15 (g) CLERICAL AMENDMENTS.—

16 (1) Section 48 of such Code is amended by

17 striking the heading and inserting the following:

18 ‘‘SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; IN19 DIAN RESERVATION CREDIT.’’.

20 (2) The table of sections for subpart E of part

21 IV of subchapter A of chapter 1 is amended by

22 striking out the item relating to section 48 and in23 serting the following:

‘‘Sec. 48. Energy credit; reforestation credit; Indian reservation

credit.’’.
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1 (h) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to property placed in service after

3 December 31, 1993.

4 SEC. 3. INDIAN EMPLOYMENT CREDIT.

5 (a) ALLOWANCE OF INDIAN EMPLOYMENT CRED6 IT.—Section 38(b) of the Internal Revenue Code of 1986

7 (relating to general business credits) is amended by strik8 ing ‘‘plus’’ at the end of paragraph (6), by striking the

9 period at the end of paragraph (7) and inserting ‘‘, plus’’,

10 and by adding after paragraph (7) the following new para11 graph:

12 ‘‘(8) the Indian employment credit as deter13 mined under section 45(a).’’.

14 (b) AMOUNT OF INDIAN EMPLOYMENT CREDIT.—

15 Subpart D of Part IV of subchapter A of chapter 1 of

16 such Code (relating to business related credits) is amended

17 by adding at the end thereof the following new section:

18 ‘‘SEC. 45. INDIAN EMPLOYMENT CREDIT.

19 ‘‘(a) AMOUNT OF CREDIT.—

20 ‘‘(1) IN GENERAL.—For purposes of section 38,

21 the amount of the Indian employment credit deter22 mined under this section with respect to any em23 ployer for any taxable year is 10 percent (30 percent

24 in the case of an employer with at least 85 percent
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1 Indian employees throughout the taxable year) of

2 the sum of—

3 ‘‘(A) the qualified wages paid or incurred

4 during such taxable year, plus

5 ‘‘(B) qualified employee health insurance

6 costs paid or incurred during such taxable year.

7 In no event shall the amount of the Indian employ8 ment credit for any taxable year exceed the credit

9 limitation amount determined under subsection (e)

10 for such taxable year.

11 ‘‘(2) INDIAN EMPLOYEE.—For purposes of

12 paragraph (1), the term ‘Indian employee’ means an

13 employee who is an enrolled member of an Indian

14 tribe or the spouse of such a member.

15 ‘‘(b) QUALIFIED WAGES; QUALIFIED EMPLOYEE

16 HEALTH INSURANCE COSTS.—For purposes of this sec17 tion—

18 ‘‘(1) QUALIFIED WAGES.—

19 ‘‘(A) IN GENERAL.—The term ‘qualified

20 wages’ means any wages paid or incurred by an

21 employer for services performed by an employee

22 while such employee is a qualified employee.

23 ‘‘(B) COORDINATION WITH TARGETED

24 JOBS CREDIT.—The term ‘qualified wages’ shall

25 not include wages attributable to service ren-
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1 dered during the 1-year period beginning with

2 the day the individual begins work for the em3 ployer if any portion of such wages is taken

4 into account in determining the credit under

5 section 51.

6 ‘‘(2) QUALIFIED EMPLOYEE HEALTH INSUR7 ANCE COSTS.—

8 ‘‘(A) IN GENERAL.—The term ‘qualified

9 employee health insurance costs’ means any

10 amount paid or incurred by an employer for

11 health insurance to the extent such amount is

12 attributable to coverage provided to any em13 ployee while such employee is a qualified em14 ployee.

15 ‘‘(B) EXCEPTION FOR AMOUNTS PAID

16 UNDER SALARY REDUCTION ARRANGEMENTS.—

17 No amount paid or incurred for health insur18 ance pursuant to a salary reduction arrange19 ment shall be taken into account under sub20 paragraph (A).

21 ‘‘(c) QUALIFIED EMPLOYEE.—For purposes of this

22 section—

23 ‘‘(1) IN GENERAL.—Except as otherwise pro24 vided in this subsection, the term ‘qualified em-
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1 ployee’ means, with respect to any period, any em2 ployee of an employer if—

3 ‘‘(A) substantially all of the services per4 formed during such period by such employee for

5 such employer are performed within an Indian

6 reservation,

7 ‘‘(B) the principal place of abode of such

8 employee while performing such services is on

9 or near the reservation in which the services are

10 performed, and

11 ‘‘(C) the employee began work for such

12 employer on or after January 1, 1994.

13 ‘‘(2) CREDIT ALLOWED ONLY FOR FIRST 7

14 YEARS.—An employee shall not be treated as a

15 qualified employee for any period after the date 7

16 years after the day on which such employee first

17 began work for the employer.

18 ‘‘(3) INDIVIDUALS RECEIVING WAGES IN EX19 CESS OF $30,000 NOT ELIGIBLE.—An employee shall

20 not be treated as a qualified employee for any tax21 able year of the employer if the total amount of the

22 wages paid or incurred by such employer to such

23 employee during such taxable year (whether or not

24 for services within an Indian reservation) exceeds

25 the amount determined at an annual rate of
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1 $30,000. The Secretary shall adjust the $30,000

2 amount contained in the preceding sentence for

3 years beginning after 1993 at the same time and in

4 the same manner as under section 415(d).

5 ‘‘(4) EMPLOYMENT MUST BE TRADE OR BUSI6 NESS EMPLOYMENT.—An employee shall be treated

7 as a qualified employee for any taxable year of the

8 employer only if more than 50 percent of the wages

9 paid or incurred by the employer to such employee

10 during such taxable year are for services performed

11 in a trade or business of the employer. Any deter12 mination as to whether the preceding sentence ap13 plies with respect to any employee for any taxable

14 year shall be made without regard to subsection

15 (f)(2).

16 ‘‘(5) CERTAIN EMPLOYEES NOT ELIGIBLE.—

17 The term ‘qualified employee’ shall not include—

18 ‘‘(A) any individual described in subpara19 graph (A), (B), or (C) of section 51(i)(1),

20 ‘‘(B) any 5-percent owner (as defined in

21 section 416(i)(1)(B)),

22 ‘‘(C) any individual who is neither an en23 rolled member of an Indian tribe nor the spouse

24 of an enrolled member of an Indian tribe, and
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1 ‘‘(D) any individual if the services per2 formed by such individual for the employer in3 volve the conduct of class I, II, or III gaming

4 as defined in section 4 of the Indian Gaming

5 Regulatory Act (25 U.S.C. 2703), or are per6 formed in a building housing such gaming ac7 tivity.

8 ‘‘(6) INDIAN TRIBE DEFINED.—The term ‘In9 dian tribe’ means any Indian tribe, band, nation,

10 pueblo, or other organized group or community, in11 cluding any Alaska Native village, or regional or vil12 lage corporation, as defined in, or established pursu13 ant to, the Alaska Native Claims Settlement Act (43

14 U.S.C. 1601 et seq.) which is recognized as eligible

15 for the special programs and services provided by

16 the United States to Indians because of their status

17 as Indians.

18 ‘‘(7) INDIAN RESERVATION DEFINED.—The

19 term ‘Indian reservation’ means a reservation, as de20 fined in—

21 ‘‘(A) section 3(d) of the Indian Financing

22 Act of 1974 (25 U.S.C. 1452(d)), or

23 ‘‘(B) section 4(10) of the Indian Child

24 Welfare Act of 1978 (25 U.S.C. 1903 (10)).
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1 ‘‘(d) EARLY TERMINATION OF EMPLOYMENT BY EM2 PLOYER.—

3 ‘‘(1) IN GENERAL.—If the employment of any

4 employee is terminated by the taxpayer before the

5 day 1 year after the day on which such employee

6 began work for the employer—

7 ‘‘(A) no wages (or qualified employee

8 health insurance costs) with respect to such em9 ployee shall be taken into account under sub10 section (a) for the taxable year in which such

11 employment is terminated, and

12 ‘‘(B) the tax under this chapter for the

13 taxable year in which such employment is ter14 minated shall be increased by the aggregate

15 credits (if any) allowed under section 38(a) for

16 prior taxable years by reason of wages (or

17 qualified employee health insurance costs) taken

18 into account with respect to such employee.

19 ‘‘(2) CARRYBACKS AND CARRYOVERS AD20 JUSTED.—In the case of any termination of employ21 ment to which paragraph (1) applies, the carrybacks

22 and carryovers under section 39 shall be properly

23 adjusted.

24 ‘‘(3) SUBSECTION NOT TO APPLY IN CERTAIN

25 CASES.—
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1 ‘‘(A) IN GENERAL.—Paragraph (1) shall

2 not apply to—

3 ‘‘(i) a termination of employment of

4 an employee who voluntarily leaves the em5 ployment of the taxpayer,

6 ‘‘(ii) a termination of employment of

7 an individual who before the close of the

8 period referred to in paragraph (1) be9 comes disabled to perform the services of

10 such employment unless such disability is

11 removed before the close of such period

12 and the taxpayer fails to offer reemploy13 ment to such individual, or

14 ‘‘(iii) a termination of employment of

15 an individual if it is determined under the

16 applicable State unemployment compensa17 tion law that the termination was due to

18 the misconduct of such individual.

19 ‘‘(B) CHANGES IN FORM OF BUSINESS.—

20 For purposes of paragraph (1), the employment

21 relationship between the taxpayer and an em22 ployee shall not be treated as terminated—

23 ‘‘(i) by a transaction to which section

24 381(a) applies if the employee continues to
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1 be employed by the acquiring corporation,

2 or

3 ‘‘(ii) by reason of a mere change in

4 the form of conducting the trade or busi5 ness of the taxpayer if the employee con6 tinues to be employed in such trade or

7 business and the taxpayer retains a sub8 stantial interest in such trade or business.

9 ‘‘(4) SPECIAL RULE.—Any increase in tax

10 under paragraph (1) shall not be treated as a tax

11 imposed by this chapter for purposes of—

12 ‘‘(A) determining the amount of any credit

13 allowable under this chapter, and

14 ‘‘(B) determining the amount of the tax

15 imposed by section 55.

16 ‘‘(e) CREDIT LIMITATION AMOUNT.—For purposes of

17 this section—

18 ‘‘(1) CREDIT LIMITATION AMOUNT.—The credit

19 limitation amount for a taxable year shall be an

20 amount equal to the credit rate (10 or 30 percent

21 as determined under subsection (a)) multiplied by

22 the increased credit base.

23 ‘‘(2) INCREASED CREDIT BASE.—The increased

24 credit base for a taxable year shall be the excess

25 of—
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1 ‘‘(A) the sum of any qualified wages and

2 qualified employee health insurance costs paid

3 or incurred by the employer during the taxable

4 year with respect to employees whose wages

5 (paid or incurred by the employer) during the

6 taxable year do not exceed the amount deter7 mined under paragraph (3) of subsection (c),

8 over

9 ‘‘(B) the sum of any qualified wages and

10 qualified employee health insurance costs paid

11 or incurred by the employer (or any prede12 cessor) during calendar year 1993 with respect

13 to employees whose wages (paid or incurred by

14 the employer or any predecessor) during 1993

15 did not exceed $30,000.

16 ‘‘(3) SPECIAL RULE FOR SHORT TAXABLE

17 YEARS.—For any taxable year having less than 12

18 months—

19 ‘‘(A) the amounts paid or incurred by the

20 employer shall be annualized for purposes of de21 termining the increased credit base, and

22 ‘‘(B) the credit limitation amount shall be

23 multiplied by a fraction, the numerator of which

24 is the number of days in the taxable year and

25 the denominator of which is 365.
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1 ‘‘(f) OTHER DEFINITIONS AND SPECIAL RULES.—

2 For purposes of this section—

3 ‘‘(1) WAGES.—The term ‘wages’ has the same

4 meaning given to such term in section 51.

5 ‘‘(2) CONTROLLED GROUPS.—

6 ‘‘(A) All employers treated as a single em7 ployer under section (a) or (b) of section 52

8 shall be treated as a single employer for pur9 poses of this section.

10 ‘‘(B) The credit (if any) determined under

11 this section with respect to each such employer

12 shall be its proportionate share of the wages

13 and qualified employee health insurance costs

14 giving rise to such credit.

15 ‘‘(3) CERTAIN OTHER RULES MADE APPLICA16 BLE.—Rules similar to the rules of section 51(k)

17 and subsections (c), (d), and (e) of section 52 shall

18 apply.

19 ‘‘(4) COORDINATION WITH NONREVENUE

20 LAWS.—Any reference in this section to a provision

21 not contained in this title shall be treated for pur22 poses of this section as a reference to such provision

23 as in effect on the date of the enactment of this

24 paragraph.’’.
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1 (c) DENIAL OF DEDUCTION FOR PORTION OF WAGES

2 EQUAL TO INDIAN EMPLOYMENT CREDIT.—

3 (1) Subsection (a) of section 280C of such Code

4 (relating to rule for targeted jobs credit) is amended

5 by striking ‘‘51(a)’’ and inserting ‘‘45(a), 51(a),

6 and’’.

7 (2) Subsection (c) of section 196 of such Code

8 (relating to deduction for certain unused business

9 credits) is amended by striking ‘‘and’’ at the end of

10 paragraph (5), by striking the period at the end of

11 paragraph (6) and inserting ‘‘, and’’, and by adding

12 at the end the following new paragraph:

13 ‘‘(7) the Indian employment credit determined

14 under section 45(a).’’.

15 (d) DENIAL OF CARRYBACKS TO PREENACTMENT

16 YEARS.—Subsection (d) of section 39 of such Code is

17 amended by adding at the end thereof the following new

18 paragraph:

19 ‘‘(4) NO CARRYBACK OF SECTION 45 CREDIT

20 BEFORE ENACTMENT.—No portion of the unused

21 business credit for any taxable year which is attrib22 utable to the Indian employment credit determined

23 under section 45 may be carried to a taxable year

24 ending before the date of the enactment of section

25 45.’’.
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1 (e) CLERICAL AMENDMENT.—The table of sections

2 for subpart D of part IV of subchapter A of chapter 1

3 of such Code is amended by adding at the end thereof

4 the following:

‘‘Sec. 45. Indian employment credit.’’.

5 (f) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to wages paid or incurred after

7 December 31, 1993.

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