I

104TH CONGRESS

1ST SESSION H. R. 41

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 HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. HERGER (for himself, Mr. BREWSTER, Mr. BAKER of Louisiana, Mr.

BUNNING of Kentucky, Mr. CRAPO, Mr. WALSH, Mr. COMBEST, Mr.

GILCHREST, Mr. CANADY, Mr. CAMP, Mr. MCCRERY, Mr. GEKAS, Mr.

DEAL of Georgia, Mr. HEFNER, Ms. DANNER, Mr. BARRETT of Nebraska, Mr. MINGE, Mr. KINGSTON, Mr. EMERSON, Mr. BEREUTER, Mr.

ROBERTS, Mr. BURTON of Indiana, Mr. HOUGHTON, Mr. POMEROY, Mr.

HOEKSTRA, Mr. PARKER, Mr. LIGHTFOOT, Mr. OXLEY, Mr. CALVERT,

Mr. CRANE, Mr. HUTCHINSON, and Mr. SOLOMON) 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 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,
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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—

22 ‘‘(A) 15 percent of the portion of the basis

23 of each agricultural environmental property

24 placed in service by the taxpayer during such

25 taxable year, and
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1 ‘‘(B) 15 percent of the amount allowed as

2 a deduction under section 175 (determined

3 without regard to paragraph (4)(B)) for such

4 taxable year.

5 ‘‘(2) ELIGIBLE TAXPAYER.—

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

7 subsection, the term ‘eligible taxpayer’ means

8 any taxpayer primarily engaged in a farming9 related business.

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

11 purposes of this subsection, the term ‘farming12 related business’ means—

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

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

15 ‘‘(ii) a trade or business of mixing fer16 tilizers from purchased fertilizer materials,

17 and

18 ‘‘(iii) a trade or business of the whole19 sale distribution of animal feeds, fertilizers,

20 agricultural chemicals, pesticides, seeds, or

21 other farm supplies (other than grains).

22 ‘‘(3) AGRICULTURAL ENVIRONMENTAL PROP23 ERTY.—

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

25 subsection, the term ‘agricultural environmental
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1 property’ means any new identifiable treatment

2 facility—

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

4 business for the primary purpose of com5 plying with Federal, State, and local envi6 ronmental laws dealing with the abatement

7 or control of water, soil, or atmospheric

8 pollution or contamination by removing, al9 tering, disposing, storing, or preventing the

10 creation or emission of pollutants, contami11 nants, wastes, or heat, and

12 ‘‘(ii) which does not significantly—

13 ‘‘(I) increase the output or capac14 ity, extend the useful life, or reduce

15 the total operating costs of plant or

16 property to which such facility relates,

17 or

18 ‘‘(II) alter the nature of any

19 manufacturing or production process

20 or facility.

21 ‘‘(B) NEW IDENTIFIABLE TREATMENT FA22 CILITY.—The term ‘new identifiable treatment

23 facility’ has the meaning given such term by

24 section 169(d)(4)(A), determined by substitut-
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1 ing ‘December 31, 1994’ for ‘December 31,

2 1968’.

3 ‘‘(4) SPECIAL RULES.—

4 ‘‘(A) COORDINATION WITH ENERGY AND

5 REHABILITATION CREDITS.—This subsection

6 shall not apply to—

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

8 basis of such property is attributable to

9 qualified rehabilitation expenditures (as de10 fined in section 47(c)(2)), or

11 ‘‘(ii) energy property.

12 ‘‘(B) COORDINATION WITH DEDUCTION

13 FOR SOIL AND WATER CONSERVATION EXPEND14 ITURES.—The amount which would (but for

15 this subparagraph) be allowed as a deduction

16 under section 174 for any taxable year shall be

17 reduced by the amount of the credit allowed by

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

19 ‘‘(C) COORDINATION WITH AMORTIZATION

20 OF POLLUTION CONTROL FACILITIES.—This

21 subsection shall not apply to any property to

22 the extent an election is made under section

23 169 with respect to the basis of such property.’’

24 (c) CLERICAL AMENDMENTS.—
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1 (1) The section heading for section 48 of such

2 Code is amended to read as follows:

3 ‘‘SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; AGRI4 CULTURAL ENVIRONMENTAL CREDIT.’’

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

6 of sections for subpart E of part IV of subchapter

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

8 follows:

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

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

10 this section shall apply to periods after December 31,

11 1994, under rules similar to the rules of section 48(m)

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

13 day before the date of the enactment of the Revenue Rec14 onciliation Act of 1990).

Æ