I
103D CONGRESS
1ST SESSION
H. R. 681
To amend the Internal Revenue Code of 1986 to provide tax relief for
small businesses.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 27, 1993
Mrs. JOHNSON of Connecticut 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
tax relief for small businesses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Small Business En-
hancement Act of 1993’’.
TITLE I—INCREMENTAL INVEST-
MENT TAX CREDIT FOR PRO-
DUCTIVE PROPERTY
SEC. 101. INCREMENTAL INVESTMENT CREDIT.
(a) ALLOWANCE OF CREDIT.—Section 46 of the In-
ternal Revenue Code of 1986 (relating to amount of in-
vestment credit) is amended by striking ‘‘and’’ at the end
of paragraph (2), by striking the period at the end of para-
graph (3) and inserting ‘‘, and’’, and by adding at the
end thereof the following new paragraph:
‘‘(4) in the case of a small business (as defined
in section 48(c)), the general investment credit.’’
(b) AMOUNT OF CREDIT.—Section 48 of such Code
is amended by adding at the end thereof the following new
subsection:
‘‘(c) GENERAL INVESTMENT CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 46,
in the case of a small business, the general invest-
ment credit for any taxable year is an amount equal
to 10 percent of the excess (if any) of—
‘‘(A) the qualified investment for such tax-
able year, over
‘‘(B) the qualified investment for the tax-
able year which begins in 1991 or 1992, which-
ever is selected by the taxpayer.
The selection under subparagraph (B), once made,
shall be irrevocable.
‘‘(2) SMALL BUSINESS.—For purposes of this
subsection, the term ‘small business’ means any tax-
payer actively engaged in a trade or business if the
average number of individuals employed by the tax-
payer during the taxable year is less than 500.
‘‘(3) QUALIFIED INVESTMENT.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the qualified investment for any tax-
able year is the aggregate of—
‘‘(i) the applicable percentage of the
basis of each new productive property
placed in service by the taxpayer during
such taxable year, plus
‘‘(ii) the applicable percentage of the
cost of each used productive property
placed in service by the taxpayer during
such taxable year.
‘‘(B) 
APPLICABLE
PERCENTAGE.—For
purposes of subparagraph (A), the applicable
percentage for any property shall be determined
under paragraphs (2) and (7) of section 46(c)
(as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of
1990).
‘‘(C) CERTAIN
RULES
MADE
APPLICA-
BLE.—The provisions of subsections (b) and (c)
of section 48 (as in effect on the day before the
date of the enactment of the Revenue Reconcili-
ation Act of 1990) shall apply for purposes of
this paragraph.
‘‘(4) PRODUCTIVE PROPERTY.—For purposes of
this subsection, the term ‘productive property’
means any tangible property to which section 168
applies (not including a building and its structural
components)—
‘‘(A) which is used as an integral part of
manufacturing, production, or extraction, or
‘‘(B) which is a motor vehicle.
‘‘(5) COORDINATION WITH OTHER CREDITS.—
This subsection shall not apply to any property to
which the energy credit or rehabilitation credit
would apply unless the taxpayer elects to waive the
application of such credits to such property.
‘‘(6) CERTAIN PROGRESS EXPENDITURE RULES
MADE APPLICABLE.—Rules similar to rules of sub-
section (c)(4) and (d) of section 46 (as in effect on
the day before the date of the enactment of the Rev-
enue Reconciliation Act of 1990) shall apply for pur-
poses of this subsection.
‘‘(7) SPECIAL RULES.—
‘‘(A) CONTROLLED
GROUPS.—For pur-
poses of this subsection—
‘‘(i) all taxpayers treated as a single
employer under subsection (a) or (b) of
section 52 shall be treated as a single tax-
payer, and
‘‘(ii) the credit (if any) determined
under this subsection with respect to each
such taxpayer shall be its proportionate
share of the basis of the productive prop-
erty giving rise to such credit.
‘‘(B) ALLOCATION
OF
BASIS
ADJUST-
MENT.—The reduction required by section
50(c) for any taxable year shall be allocated
among the productive property in proportion to
the respective bases of such property.
‘‘(C) RECAPTURE.—In applying section
50(a) to any property which ceases to be pro-
ductive property, the credit determined under
this subsection with respect to such property
shall be treated as being equal to 10 percent of
the lesser of—
‘‘(i) the excess referred to in para-
graph (1) for the taxable year in which
such property was determined, or
‘‘(ii) the qualified investment in such
property which was taken into account
under paragraph (1).’’
(c) TECHNICAL AMENDMENTS.—
(1) Subparagraph (C) of section 49(a)(1) of
such Code is amended by striking ‘‘and’’ at the end
of clause (ii), by striking the period at the end of
clause (iii) and inserting ‘‘, and’’, and by adding at
the end thereof the following new clause:
‘‘(iv) the basis of any new productive
property and the cost of any used produc-
tive property.’’
(2) Subparagraph (E) of section 50(a)(2) of
such Code is amended by inserting ‘‘or 48(c)(5)’’ be-
fore the period at the end thereof.
(3) Paragraph (5) of section 50(a) of such Code
is amended by adding at the end thereof the follow-
ing new subparagraph:
‘‘(D) SPECIAL RULES FOR CERTAIN PROP-
ERTY.—In the case of any productive property
which is 3-year property (within the meaning of
section 168(e))—
‘‘(i) the percentage set forth in clause
(ii) of the table contained in paragraph
(1)(B) shall be 66 percent,
‘‘(ii) the percentage set forth in clause
(iii) of such table shall be 33 percent, and
‘‘(iii) clauses (iv) and (v) of such table
shall not apply.’’
(4)(A) The section heading for section 48 of
such Code is amended to read as follows:
‘‘SEC. 48. OTHER CREDITS.’’
(B) The table of sections for subpart E of part
IV of subchapter A of chapter 1 of such Code is
amended by striking the item relating to section 48
and inserting the following:
‘‘Sec. 48. Other credits.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
1992, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990).
TITLE 
II—INCREASE 
IN
EXPENSING 
FOR 
PRODUC-
TIVE PROPERTY
SEC. 201. CHANGES IN ELECTION TO EXPENSE CERTAIN DE-
PRECIABLE BUSINESS ASSETS.
(a) INCREASE IN LIMIT FOR PRODUCTIVE EQUIP-
MENT.—Paragraph (1) of section 179(b) of the Internal
Revenue Code of 1986 (relating to election to expense cer-
tain depreciable property) is amended by striking
‘‘$10,000.’’ and inserting ‘‘$10,000 ($50,000 in the case
of section 179 property for use as an integral part of man-
ufacturing, production, or extraction).’’
(b) MEDIUM-SIZED COMPANIES ELIGIBLE.—Para-
graph (2) of section 179(b) of such Code is amended by
striking 
‘‘$200,000.’’ 
and 
inserting 
‘‘$200,000
($1,000,000 in the case of section 179 property for use
as an integral part of manufacturing, production, or ex-
traction).’’
(c) DEDUCTIONS UNDER SECTION 179 EXCLUDED
FROM MINIMUM TAX.—
(1) Paragraph (1) of section 56(a) of such Code
is amended by adding at the end thereof the follow-
ing new subparagraph:
‘‘(E) SPECIAL
RULE
FOR
SECTION
179
PROPERTY.—In the case of section 179 prop-
erty (as defined in section 179(d)), the deduc-
tion allowable under section 179 shall be treat-
ed as allowable under the alternative system of
section 168(g).’’
(2) Subparagraph (A) of section 56(g)(4) of
such Code is amended by adding at the end thereof
the following new clause:
‘‘(vi) SPECIAL RULE FOR SECTION 179
PROPERTY.—In the case of section 179
property (as defined in section 179(d)), the
deduction allowable under section 179 shall
be treated as allowable under the alter-
native system of section 168(g).’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1992.
Æ