I

104TH CONGRESS

1ST SESSION H. R. 392

To amend the Internal Revenue Code of 1986 to reinstate a 10-percent

domestic investment tax credit, to provide a credit for the purchase

of domestic durable goods, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. TRAFICANT introduced the following bill; which was referred to the Committee on Ways and Means and, in addition, to the Committee on Commerce, for a period to be subsequently determined by the Speaker, in

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Internal Revenue Code of 1986 to reinstate

a 10-percent domestic investment tax credit, to provide

a credit for the purchase of domestic durable goods,

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 ‘‘Investment for Amer5 ica Act’’.
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1 SEC. 2. REINSTATEMENT OF 10-PERCENT DOMESTIC IN2 VESTMENT TAX CREDIT.

3 (a) ALLOWANCE OF CREDIT.—Section 46 of the In4 ternal Revenue Code of 1986 (relating to amount of in5 vestment credit) is amended by striking ‘‘and’’ at the end

6 of paragraph (2), by striking the period at the end of para7 graph (3) and inserting ‘‘, and’’, and by adding at the

8 end thereof the following new paragraph:

9 ‘‘(4) the domestic investment credit.’’

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

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

12 subsection:

13 ‘‘(c) DOMESTIC INVESTMENT CREDIT.—

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

15 the domestic investment credit for any taxable year

16 is an amount equal to 10 percent of the qualified in17 vestment for such taxable year.

18 ‘‘(2) QUALIFIED INVESTMENT.—

19 ‘‘(A) IN GENERAL.—For purposes of para20 graph (1), the qualified investment for any tax21 able year is the aggregate of—

22 ‘‘(i) the applicable percentage of the

23 basis of each new domestic section 38

24 property placed in service by the taxpayer

25 during such taxable year, plus
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1 ‘‘(ii) the applicable percentage of the

2 cost of each used domestic section 38 prop3 erty placed in service by the taxpayer dur4 ing such taxable year.

5 ‘‘(B) APPLICABLE PERCENTAGE.—For

6 purposes of subparagraph (A), the applicable

7 percentage for any property shall be determined

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

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

10 enactment of the Revenue Reconciliation Act of

11 1990).

12 ‘‘(C) CERTAIN RULES MADE APPLICA13 BLE.—The provisions of subsections (b) and (c)

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

15 date of the enactment of the Revenue Reconcili16 ation Act of 1990) shall apply for purposes of

17 this paragraph.

18 ‘‘(3) DOMESTIC SECTION 38 PROPERTY.—For

19 purposes of this subsection, the term ‘domestic sec20 tion 38 property’ means any section 38 property if—

21 ‘‘(A) the property was completed in the

22 United States, and

23 ‘‘(B) at least 60 percent of the basis of the

24 property is attributable to value added within

25 the United States.
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1 For purposes of the preceding sentence, the term

2 ‘United States’ includes the Commonwealth of Puer3 to Rico and the possessions of the United States.

4 ‘‘(4) SECTION 38 PROPERTY.—For purposes of

5 this subsection, the term ‘section 38 property’

6 means—

7 ‘‘(A) tangible personal property (other

8 than an air conditioning or heating unit), or

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

10 a building and its structural components) but

11 only if such property—

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

13 manufacturing, production, or extraction

14 or of furnishing transportation, commu15 nications, electrical energy, gas, water, or

16 sewage disposal services, or

17 ‘‘(ii) constitutes a research facility

18 used in connection with any of the activi19 ties referred to in clause (i), or

20 ‘‘(iii) constitutes a facility used in

21 connection with any of the activities re22 ferred to in clause (i) for the bulk storage

23 of fungible commodities (including com24 modities in a liquid or gaseous state), or

25 ‘‘(C) elevators and escalators, but only if—
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1 ‘‘(i) the construction, reconstruction,

2 or erection of the elevator or escalator is

3 completed by the taxpayer, or

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

5 or escalator commences with the taxpayer,

6 or

7 ‘‘(D) single purpose agricultural or horti8 cultural structures; or

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

10 building and its structural components) used in

11 connection with the distribution of petroleum or

12 any primary product of petroleum.

13 Such term includes only property to which section

14 168 applies without regard to any useful life and

15 any other property with respect to which deprecia16 tion (or amortization in lieu of depreciation) is al17 lowable and having a useful life (determined as of

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

19 years or more.

20 ‘‘(5) COORDINATION WITH OTHER CREDITS.—

21 This subsection shall not apply to any property to

22 which the energy credit or rehabilitation credit

23 would apply unless the taxpayer elects to waive the

24 application of such credits to such property.
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1 ‘‘(6) CERTAIN PROGRESS EXPENDITURE RULES

2 MADE APPLICABLE.—Rules similar to rules of sub3 section (c)(4) and (d) of section 46 (as in effect on

4 the day before the date of the enactment of the Rev5 enue Reconciliation Act of 1990) shall apply for pur6 poses of this subsection.’’

7 (c) TECHNICAL AMENDMENTS.—

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

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

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

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

12 the end thereof the following new clause:

13 ‘‘(iv) the basis of any new domestic

14 section 38 property and the cost of any

15 used domestic section 38 property.’’

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

17 such Code is amended by inserting ‘‘or 48(c)(6)’’ be18 fore the period at the end thereof.

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

20 is amended by adding at the end thereof the follow21 ing new subparagraph:

22 ‘‘(D) SPECIAL RULES FOR CERTAIN PROP23 ERTY.—In the case of any domestic section 38

24 property which is 3-year property (within the

25 meaning of section 168(e))—
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1 ‘‘(i) the percentage set forth in clause

2 (ii) of the table contained in paragraph

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

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

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

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

7 shall not apply.’’

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

9 such Code is amended to read as follows:

10 ‘‘SEC. 48. OTHER CREDITS.’’

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

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

13 amended by striking the item relating to section 48

14 and inserting the following:

‘‘Sec. 48. Other credits.’’

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

16 this section shall apply to periods after December 31,

17 1994, under rules similar to the rules of section 48(m)

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

19 day before the date of the enactment of the Revenue Rec20 onciliation Act of 1990).

21 SEC. 3. CREDIT FOR PURCHASES OF DOMESTIC DURABLE

22 GOODS.

23 (a) IN GENERAL.—Subpart A of part IV of sub24 chapter A of chapter 1 of the Internal Revenue Code of

25 1986 (relating to nonrefundable personal credits) is
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1 amended by inserting after section 22 the following new

2 section:

3 ‘‘SEC. 23. PURCHASES OF DOMESTIC DURABLE GOODS.

4 ‘‘(a) GENERAL RULE.—In the case of an individual,

5 there shall be allowed as a credit against the tax imposed

6 by this chapter for the taxable year an amount equal to

7 7 percent of the aggregate amount paid during the taxable

8 year for the purchase of domestic durable goods.

9 ‘‘(b) DOMESTIC DURABLE GOODS.—For purposes of

10 this section—

11 ‘‘(1) IN GENERAL.—The term ‘domestic durable

12 good’ means any durable good if—

13 ‘‘(A) the property was completed in the

14 United States, and

15 ‘‘(B) at least 60 percent of the basis of the

16 property is attributable to value added within

17 the United States.

18 ‘‘(2) UNITED STATES.—The term ‘United

19 States’ includes the Commonwealth of Puerto Rico

20 and the possessions of the United States.

21 ‘‘(c) LIMITATION.—The amount of the credit allowed

22 under subsection (a) for any taxable year shall not exceed

23 $1,000.’’
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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for such subpart A is amended by inserting after

3 the item relating to section 22 the following new item:

‘‘Sec. 23. Purchases of domestic durable goods.’’

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to taxable years beginning after

6 December 31, 1994.

7 SEC. 4. CREDIT FOR CERTAIN COSTS INCURRED IN PUR8 CHASING AN AMERICAN-MADE PASSENGER

9 VEHICLE.

10 (a) IN GENERAL.—Subpart A of part IV of sub11 chapter A of chapter 1 of the Internal Revenue Code of

12 1986 (relating to nonrefundable personal credits) is

13 amended by inserting after section 23 (as added by section

14 3 of this Act) the following new section:

15 ‘‘SEC. 24. CERTAIN COSTS INCURRED IN PURCHASING AN

16 AMERICAN-MADE PASSENGER VEHICLE.

17 ‘‘(a) IN GENERAL.—In the case of an individual,

18 there shall be allowed as a credit against the tax imposed

19 by this chapter for the taxable year an amount equal to

20 the qualified payments made by the taxpayer during such

21 year.

22 ‘‘(b) QUALIFIED PAYMENTS.—For purposes of this

23 section, the term ‘qualified payments’ means any payment

24 of—
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1 ‘‘(1) any State or local sales tax imposed on the

2 purchase by the taxpayer of any qualified auto3 mobile, and

4 ‘‘(2) any interest on any loan which is secured

5 by a qualified automobile and which was incurred by

6 the taxpayer to purchase such automobile.

7 ‘‘(c) QUALIFIED AUTOMOBILE.—For purposes of this

8 section, the term ‘qualified automobile’ means any auto9 mobile (as defined in section 4064(b))—

10 ‘‘(1) which is purchased after December 31,

11 1994,

12 ‘‘(2) which is domestically produced,

13 ‘‘(3) the original use of which begins with the

14 taxpayer, and

15 ‘‘(4) substantially all of the use of which is for

16 personal, nonbusiness purposes.

17 For purposes of the preceding sentence, an automobile is

18 domestically produced if more than 60 percent of the auto19 mobile is produced in the United States and its final as20 sembly occurs in the United States.

21 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction

22 or credit shall be allowed under any other provision of this

23 title for any payment for which a credit is allowable under

24 this section.’’
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1 (b) CLERICAL AMENDMENT.—The table of sections

2 for such subpart A is amended by inserting after the item

3 relating to section 23 the following new item:

‘‘Sec. 24. Certain costs incurred in purchasing an American-made

passenger vehicle.’’

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall apply to taxable years ending after De6 cember 31, 1994.

7 SEC. 5. PLACEMENT OF MADE IN AMERICA LABELS ON

8 PRODUCTS.

9 (a) REQUIREMENTS FOR USE OF LABELS.—No prod10 uct may bear a label which states or suggests that the

11 product was made in America unless—

12 (1) the product has been registered with the

13 Department of Commerce under subsection (b); and

14 (2) the Secretary of Commerce has determined

15 that—

16 (A) 60 percent of the product was manu17 factured in the United States; and

18 (B) final assembly of the product took

19 place in the United States.

20 (b) REGISTRY OF AMERICAN-MADE PRODUCTS.—

21 Not later than 12 months after the Secretary has promul22 gated regulations regarding the registration of products

23 with the Department of Commerce under this section, a

24 person shall register with the Department of Commerce
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1 any product on which there is or will be affixed a label

2 which states or suggests that the product was made in

3 America.

4 (c) PENALTIES FOR FRAUDULENT USE OF LA5 BELS.—

6 (1) CIVIL FINE.—Any person who, with an in7 tent to defraud or mislead, places on a product a

8 label which states or suggests that the product was

9 ‘‘made in America’’ in violation of this section may

10 be assessed a civil penalty by the Secretary of not

11 more than $100,000. The Secretary may issue an

12 order assessing such civil penalty only after notice

13 and an opportunity for an agency hearing on the

14 record. The validity of such order may not be re15 viewed in an action to collect such civil penalty.

16 (2) INJUNCTIVE RELIEF.—The Secretary may

17 bring an action to enjoin the violation of, or to com18 pel compliance with, this section, whenever the Sec19 retary believes that such a violation has occurred or

20 is about to occur.

21 (d) REGULATIONS.—Not later than 12 months after

22 the date of the enactment of this Act, the Secretary shall

23 promulgate regulations establishing procedures under

24 which a person shall register a product under this section.

25 (e) DEFINITIONS.—For purposes of this section:
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1 (1) LABEL.—The term ‘‘label’’ means any writ2 ten, printed, or graphic matter on, or attached to,

3 a product or any of its containers or wrappers.

4 (2) SECRETARY.—The term ‘‘Secretary’’ means

5 the Secretary of Commerce.

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