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103D CONGRESS

1ST SESSION H. R. 2613

To amend the Internal Revenue Code of 1986 to deny certain tax benefits

in the case of buildings constructed with Japanese services.

IN THE HOUSE OF REPRESENTATIVES

JULY 1, 1993

Mr. STARK 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 deny certain

tax benefits in the case of buildings constructed with

Japanese services.

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

3 SECTION 1. DEFERRAL OF DEPRECIATION DEDUCTION.

4 Section 167 of the Internal Revenue Code of 1986

5 (relating to depreciation) is amended by redesignating

6 subsection (s) as subsection (t) and by inserting after sub7 section (r) the following new subsection:

8 ‘‘(s) DEFERRAL OF DEPRECIATION FOR BUILDINGS

9 CONSTRUCTED WITH JAPANESE SERVICES.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other

2 provision of this title, the deduction for depreciation

3 or amortization which would (but for this sub4 section) by allowable for any taxable year with re5 spect to any Japanese-constructed building shall not

6 be allowable for such year but shall be allowable for

7 the 10th taxable year thereafter.

8 ‘‘(2) JAPANESE-CONSTRUCTED BUILDING.—For

9 purposes of this subsection, the term ‘Japanese-con10 structed building’ means any building if 1 percent or

11 more of the cost of such building (determined as of

12 the completion of its construction) is attributable to

13 services performed by Japanese persons.

14 ‘‘(3) JAPANESE PERSON.—For purposes of this

15 subsection, the term ‘Japanese person’ means—

16 ‘‘(A) any citizen or national of Japan,

17 ‘‘(B) any corporation, partnership, or other

18 entity created or organized under the laws of

19 Japan or any subdivision thereof,

20 ‘‘(C) any instrumentality of Japan or a

21 subdivision thereof, and

22 ‘‘(D) any corporation, partnership, or

23 other entity owned or controlled (directly or in24 directly) by 1 or more persons or entities de25 scribed in subparagraph (A), (B), or (C)’’.
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1 SEC. 2. DEFERRAL OF LOSS DEDUCTION.

2 Section 1231 of the Internal Revenue Code of 1986

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

4 subsection:

5 ‘‘(d) DEFERRAL OF RECOGNITION OF LOSS ON JAPA6 NESE-CONSTRUCTED BUILDINGS.—Notwithstanding any

7 other provision of this title, any loss which would (but for

8 this subsection) be recognized for any taxable year with

9 respect to any Japanese-constructed building (as defined

10 in section 167(s)(2)) shall not be recognized for such year

11 but shall be recognized for the 15th taxable year there12 after’’.

13 SEC. 3. DENIAL OF USE OF TAX-EXEMPT BONDS.

14 Section 149 of the Internal Revenue Code is amended

15 by adding at the end thereof the following new subsection:

16 ‘‘(h) FACILITIES CONSTRUCTED WITH JAPANESE

17 SERVICES.—

18 ‘‘(1) IN GENERAL.—Nothing in section 103(a)

19 or any other provision of law shall be construed to

20 provide an exemption from Federal income tax for

21 interest on any bond issued as part of an issue 1

22 percent or more of the proceeds of which are to be

23 used to provide Japanese-constructed facilities.

24 ‘‘(2) JAPANESE-CONSTRUCTED FACILITY.—For

25 purposes of this subsection, the term ‘Japanese-con26 structed facility’ means any facility if 1 percent or
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1 more of the cost of such facility (determined as of

2 the completion of its construction) is attributable to

3 services performed by Japanese persons (as defined

4 in section 167(s)(3)’’.

5 SEC. 4. EFFECTIVE DATE.

6 The amendments made by this Act shall apply to

7 property the construction of which begins after December

8 31, 1993.

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