I

103D CONGRESS

1ST SESSION H. R. 1686

To amend the Internal Revenue Code of 1986 to put tools in the hands

of American workers by reinstating a 10-percent investment tax credit

for property used in manufacturing, production, extraction, or related

purposes in the United States.

IN THE HOUSE OF REPRESENTATIVES

APRIL 2, 1993

Mr. TORKILDSEN (for himself, Mr. MCCANDLESS, Mr. STUMP, Mr. ZIMMER,

Mr. DOOLITTLE, Mr. INHOFE, Mr. LEVY, Mr. BLUTE, Mr. SOLOMON,

Mr. BAKER of Louisiana, Mr. FISH, Mr. TALENT, and Mr. ZELIFF) 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 put tools

in the hands of American workers by reinstating a 10-

percent investment tax credit for property used in manufacturing, production, extraction, or related purposes in

the United States.

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 1993’’.
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1 SEC. 2. INVESTMENT TAX CREDIT.

2 (a) ALLOWANCE OF CREDIT.—Section 46 of the In3 ternal Revenue Code of 1986 (relating to amount of in4 vestment credit) is amended by striking ‘‘and’’ at the end

5 of paragraph (2), by striking the period at the end of para6 graph (3) and inserting ‘‘, and’’, and by adding at the

7 end thereof the following new paragraph:

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

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

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

11 subsection:

12 ‘‘(c) GENERAL INVESTMENT CREDIT.—

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

14 the general investment credit for any taxable year is

15 an amount equal to 10 percent of the qualified in16 vestment for such taxable year.

17 ‘‘(2) QUALIFIED INVESTMENT.—

18 ‘‘(A) IN GENERAL.—For purposes of para19 graph (1), the qualified investment for any tax20 able year is the aggregate of—

21 ‘‘(i) the applicable percentage of the

22 basis of each new qualified investment tax

23 credit property placed in service by the

24 taxpayer during such taxable year, plus

25 ‘‘(ii) the applicable percentage of the

26 cost of each used qualified investment tax
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1 credit property placed in service by the

2 taxpayer during such taxable year.

3 ‘‘(B) APPLICABLE PERCENTAGE.—For

4 purposes of subparagraph (A), the applicable

5 percentage for any property shall be determined

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

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

8 enactment of the Revenue Reconciliation Act of

9 1990).

10 ‘‘(C) CERTAIN RULES MADE APPLICA11 BLE.—The provisions of subsections (b) and (c)

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

13 date of the enactment of the Revenue Reconcili14 ation Act of 1990) shall apply for purposes of

15 this paragraph.

16 ‘‘(3) QUALIFIED INVESTMENT TAX CREDIT

17 PROPERTY.—The term ‘qualified investment tax

18 credit property’ means tangible property (other than

19 a building, its structural components, or an air con20 ditioning or heating unit), but only if such prop21 erty—

22 ‘‘(A) is used as an integral part of manu23 facturing, production (including agriculture), or

24 extraction or of furnishing transportation, com-
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1 munications, electrical energy, gas, water, waste

2 disposal, or pollution control services,

3 ‘‘(B) constitutes a research facility or re4 search equipment used in connection with any

5 of the activities referred to in subparagraph

6 (A), or

7 ‘‘(C) constitutes a facility used in connec8 tion with any of the activities referred to in

9 subparagraph (A) for the bulk storage of fun10 gible commodities (including commodities in a

11 liquid or gaseous state).

12 Such term includes only property to which section

13 168 applies without regard to any useful life and

14 any other property with respect to which deprecia15 tion (or amortization in lieu of depreciation) is al16 lowable and having a useful life (determined as of

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

18 years or more.

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

20 This subsection shall not apply to any property to

21 which the energy credit or rehabilitation credit

22 would apply unless the taxpayer elects to waive the

23 application of such credits to such property.

24 ‘‘(5) CERTAIN PROGRESS EXPENDITURE RULES

25 MADE APPLICABLE.—Rules similar to rules of sub-
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1 sections (c)(4) and (d) of section 46 (as in effect on

2 the day before the date of the enactment of the Rev3 enue Reconciliation Act of 1990) shall apply for pur4 poses of this subsection.’’

5 (c) CREDIT ALLOWED AGAINST MINIMUM TAX.—

6 Section 38(c) of such Code is amended by redesignating

7 paragraph (2) as paragraph (3) and inserting after para8 graph (1) the following new paragraph:

9 ‘‘(2) NEW INVESTMENT TAX CREDIT MAY OFF10 SET 100 PERCENT OF MINIMUM TAX.—

11 ‘‘(A) IN GENERAL.—In the case of a C

12 corporation, the amount determined under

13 paragraph (1)(A) shall be reduced (but not

14 below zero) by the lesser of—

15 ‘‘(i) the portion of the new investment

16 tax credit not used against the regular lim17 itation, or

18 ‘‘(ii) 100 percent of the taxpayer’s

19 tentative minimum tax for the taxable

20 year.

21 ‘‘(B) PORTION OF NEW INVESTMENT TAX

22 CREDIT NOT USED AGAINST REGULAR LIMIT.—

23 For purposes of subparagraph (A), the portion

24 of the new investment tax credit for any taxable
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1 year not used against the regular limitation is

2 the excess (if any) of—

3 ‘‘(i) the portion of the credit under

4 subsection (a) which is attributable to the

5 application of the general investment credit

6 under section 48(c), over

7 ‘‘(ii) the limitation of paragraph (1)

8 (determined without regard to this para9 graph) reduced by the portion of the credit

10 under subsection (a) which is not so attrib11 utable.

12 ‘‘(C) LIMITATION.—In no event shall this

13 paragraph permit the allowance of a credit

14 which would result in a net chapter 1 tax less

15 than an amount equal to 10 percent of the

16 amount determined under section 55(b)(1)(A)

17 without regard to the alternative tax net operat18 ing loss deduction. For purposes of the preced19 ing sentence, the term ‘net chapter 1 tax’

20 means the sum of the regular tax liability for

21 the taxable year and the tax imposed by section

22 55 for the taxable year, reduced by the sum of

23 the credits allowable under this part for the

24 taxable year (other than under section 34).’’

25 (d) TECHNICAL AMENDMENTS.—
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1 (1) Subparagraph (C) of section 49(a)(1) of

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

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

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

5 the end thereof the following new clause:

6 ‘‘(iv) the basis of any new qualified in7 vestment tax credit property and the cost

8 of any used qualified investment tax credit

9 property.’’

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

11 such Code is amended by inserting ‘‘or 48(c)(5)’’ be12 fore the period at the end thereof.

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

14 is amended by adding at the end thereof the follow15 ing new subparagraph:

16 ‘‘(D) SPECIAL RULES FOR CERTAIN PROP17 ERTY.—In the case of any qualified investment

18 tax credit property which is 3-year property

19 (within the meaning of section 168(e))—

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

21 (ii) of the table contained in paragraph

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

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

24 (iii) of such table shall be 33 percent, and
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1 ‘‘(iii) clauses (iv) and (v) of such table

2 shall not apply.’’

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

4 such Code is amended to read as follows:

5 ‘‘SEC. 48. OTHER CREDITS.’’

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

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

8 amended by striking the item relating to section 48

9 and inserting the following:

‘‘Sec. 48. Other credits.’’

10 (e) EFFECTIVE DATE.—The amendments made by

11 this section shall apply to periods after December 31,

12 1992, under rules similar to the rules of section 48(m)

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

14 day before the date of the enactment of the Revenue Rec15 onciliation Act of 1990).

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