I
103D CONGRESS
1ST SESSION
H. R. 2064
To amend the Internal Revenue Code of 1986 to allow a tax credit for
defense conversion.
IN THE HOUSE OF REPRESENTATIVES
MAY 11, 1993
Ms. HARMAN (for herself, Mr. MATSUI, Mr. BROWN of California, Mr.
MCKEON, Mr. LEWIS of California, and Mr. HUNTER) introduced the fol-
lowing bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow a
tax credit for defense conversion.
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 ‘‘Defense Reinvestment
and High-Tech Job Creation Act of 1993’’.
SEC. 2. DEFENSE CONVERSION CREDIT.
(a) GENERAL RULE.—Section 46 of the Internal
Revenue Code of 1986 (relating to amount of investment
credit) is amended—
(1) by striking ‘‘and’’ at the end of paragraph
(2),
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘, and’’, and
(3) by adding at the end thereof the following
new paragraph:
‘‘(4) the defense conversion credit.’’
(b) DEFENSE CONVERSION CREDIT.—Section 48 of
such Code is amended by adding at the end thereof the
following new subsection:
‘‘(c) DEFENSE CONVERSION CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 46,
the defense conversion credit for any taxable year is
the sum of—
‘‘(A) the defense conversion employment
credit for the taxable year, and
‘‘(B) the defense conversion investment
credit for the taxable year.
‘‘(2) 
DEFENSE
CONVERSION
EMPLOYMENT
CREDIT.—
‘‘(A) IN GENERAL.—The defense conver-
sion employment credit for any taxable year is
10 percent of the qualified wages paid or in-
curred by a qualified employer during such
year.
‘‘(B) QUALIFIED WAGES.—For purposes of
this subsection—
‘‘(i) IN GENERAL.—The term ‘quali-
fied wages’ means the wages (as defined in
clause (ii)) paid or incurred by the quali-
fied employer during the taxable year to,
and amounts paid or incurred by the quali-
fied employer to third parties for retrain-
ing expenses with respect to, qualified con-
version employees during the period com-
mencing on July 31, 1993, and ending on
December 31, 1995 (‘the qualified period’).
‘‘(ii) WAGES
DEFINED.—Except as
provided in subparagraph (C)(ii), the term
‘wages’ has the meaning given to such
term by subsection (b) of section 3306 (de-
termined without regard to any dollar limi-
tation contained in such section), but the
amount of wages during any taxable year
which may be taken into account with re-
spect to any individual shall not exceed 25
percent of the wages (determined without
regard to this subsection) paid to such in-
dividual during such taxable year or por-
tion thereof included within the qualified
period.
‘‘(iii) RETRAINING
EXPENSES.—The
term ‘retraining expenses’ includes all
amounts paid or incurred with respect to
educational or training programs in which
a qualified conversion employee partici-
pates to learn or improve skills necessary
or useful to such employee’s employment in
the qualified employer’s nondefense-related
business.
‘‘(C) QUALIFIED
CONVERSION
EMPLOY-
EES.—
‘‘(i) IN
GENERAL.—For purposes of
this subsection, the term ‘qualified conver-
sion employees’ means an employee of a
qualified employer who had been employed
by the qualified employer or another em-
ployer in a defense-related business and
who is employed by the qualified employer
in a nondefense-related business during the
taxable year.
‘‘(ii) PRORATION
IN
CASE
OF
DUAL
EMPLOYMENT.—If a qualified conversion
employee is employed by the qualified em-