I
103D CONGRESS
1ST SESSION
H. R. 461
To amend the Internal Revenue Code of 1986 to allow accelerated deprecia-
tion for equipment used to manufacture advanced materials or to develop
advanced technologies, to reduce capital gains taxes, and to impose
a minimum tax on foreign and foreign-owned corporations operating
in the United States.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1993
Mr. HUNTER 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 allow accel-
erated depreciation for equipment used to manufacture
advanced materials or to develop advanced technologies,
to reduce capital gains taxes, and to impose a minimum
tax on foreign and foreign-owned corporations operating
in the United States.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. 3-YEAR DEPRECIABLE LIFE FOR SEMICONDUC-
TOR 
MANUFACTURING 
EQUIPMENT 
AND
EQUIPMENT USED TO MANUFACTURE AD-
VANCED MATERIALS OR TO DEVELOP AD-
VANCED TECHNOLOGIES.
(a) IN GENERAL.—Subparagraph (A) of section
168(e)(3) of the Internal Revenue Code of 1986 (relating
to classification of property) is amended by striking ‘‘and’’
at the end of clause (i), by striking the period at the end
of clause (ii) and inserting a comma, and by adding at
the end thereof the following:
‘‘(iii) any semiconductor manufactur-
ing equipment, and
‘‘(iv) any equipment used to manufac-
ture advanced materials or to develop ad-
vanced technologies.
Clause (iv) shall not apply if the taxpayer elects
not to apply such clause. Such an election shall
apply to the taxable year for which made and
all subsequent taxable years and, once made,
shall be irrevocable.’’
(b) ADVANCED MATERIALS AND TECHNOLOGIES.—
Subsection (e) of section 168 of such Code (relating to
classification of property) is amended by adding at the end
thereof the following new paragraph:
‘‘(5) 
ADVANCED
MATERIALS
AND
TECH-
NOLOGIES.—For purposes of paragraph (3)(A)(iv)—
‘‘(A) IN GENERAL.—The determination of
whether any material is an advanced material
or whether any technology is an advanced tech-
nology shall be made as of the date the equip-
ment referred to in such paragraph is placed in
service.
‘‘(B) INITIAL LIST OF ADVANCED MATE-
RIALS AND TECHNOLOGIES.—
‘‘(i) IN
GENERAL.—The term ‘ad-
vanced material’ and ‘advanced technology’
mean any material or technology listed in
clause (ii) and determined by the Secretary
to be an advanced material or technology.
‘‘(ii) INITIAL LIST.—
Advanced structural materials
Electronic and photonic materials
Biotechnologies
Materials processing
Environmental technologies
Design and engineering tools
Commercialization and production systems
Advanced process equipment
Networks and communications
Powertrain
Propulsion
‘‘(C) MODIFICATIONS TO LIST.—Materials
and technologies may be added to or deleted
from the list in subparagraph (B)(ii) based on
recommendations of experts selected by the Sec-
retary. Any deletion from such list shall not
take effect before the date which is 5 years
after the date the decision to make such dele-
tion is published in the Federal Register.’’
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (B) of section 168(e)(3) of
such Code is amended by striking clause (ii) and by
redesignating the succeeding clauses accordingly.
(2) Subparagraph (B) of section 168(g)(3) of
such Code is amended by striking the following:
‘‘(B)(ii) ....................... 5’’
and inserting in lieu thereof the following:
‘‘(A)(iii) ........................3
‘‘(A)(iv) .........................3.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to equipment placed in service
after the date of the enactment of this Act.
SEC. 2. REDUCTION IN INDIVIDUAL CAPITAL GAINS RATE.
(a) GENERAL RULE.—Subsection (h) of section 1 of
the Internal Revenue Code of 1986 (relating to maximum
capital gains rate) is amended to read as follows:
‘‘(h) MAXIMUM CAPITAL GAINS RATE.—
‘‘(1) IN GENERAL.—If a taxpayer has a net
capital gain for any taxable year, then the tax im-
posed by this section shall not exceed the sum of—
‘‘(A) a tax computed at the rates and in
the same manner as if this subsection had not
been enacted on the taxable income reduced by
the net capital gain, plus
‘‘(B) a tax equal to the sum of—
‘‘(i) 7.5 percent of so much of the net
capital gain as does not exceed—
‘‘(I) the maximum amount of
taxable income to which the 15-per-
cent rate applies under the table ap-
plicable to the taxpayer, reduced by
‘‘(II) the taxable income to which
subparagraph (A) applies, plus
‘‘(ii) 15 percent of the net capital gain
in excess of the net capital gain to which
clause (i) applies.
‘‘(2) TRANSITIONAL RULE.—In the case of a
taxable year which includes the date of the enact-
ment of this paragraph, the amount of the net cap-
ital gain for purposes of paragraph (1) shall not ex-
ceed the net capital gain determined by only taking
into account gains and losses properly taken into ac-
count for the portion of the taxable year after such
date.’’
(b) TECHNICAL AMENDMENTS.—
(1) Paragraph (1) of section 170(e) of such
Code is amended by striking ‘‘the amount of gain’’
in the material following subparagraph (B)(ii) and
inserting ‘‘13/28 (19/34 in the case of a corporation)
of the amount of gain’’.
(2)(A) 
The 
second 
sentence 
of 
section
7518(g)(6)(A) of such Code is amended by strik-
ing ‘‘28 percent (34 percent in the case of a corpora-
tion)’’ and inserting ‘‘15 percent’’.
(B) 
The 
second 
sentence 
of 
section
607(h)(6)(A) of the Merchant Marine Act, 1936, is
amended by striking ‘‘28 percent (34 percent in the
case of a corporation)’’ and inserting ‘‘15 percent’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges occurring
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 3. REDUCTION IN CORPORATE CAPITAL GAINS RATE.
(a) GENERAL RULE.—Section 1201 of the Internal
Revenue Code of 1986 (relating to alternative tax for cor-
porations) is amended by redesignating subsection (b) as
subsection (c), and by striking subsection (a) and inserting
the following:
‘‘(a) GENERAL RULE.—If for any taxable year a cor-
poration has a net capital gain, then, in lieu of the tax
imposed by section 11, 511, or 831(a) (whichever applies),
there is hereby imposed a tax (if such tax is less than
the tax imposed by such section) which shall consist of
the sum of—
‘‘(1) a tax computed on the taxable income re-
duced by the net capital gain, at the same rates and
in the same manner as if this subsection had not
been enacted, plus
‘‘(2) a tax of 15 percent of the net capital gain.
‘‘(b) TRANSITIONAL RULE.—In the case of a taxable
year which includes the date of the enactment of this para-
graph, the amount of the net capital gain for purposes
of subsection (a) shall not exceed the net capital gain de-
termined by only taking into account gains and losses
properly taken into account for the portion of the taxable
year after such date.’’
(b) TECHNICAL AMENDMENTS.—
(1) Clause (iii) of section 852(b)(3)(D) of such
Code is amended by striking ‘‘66 percent’’ and in-
serting ‘‘85 percent’’.
(2) Paragraphs (1) and (2) of section 1445(e)
of such Code are each amended by striking ‘‘34 per-
cent’’ and inserting ‘‘15 percent’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to sales and exchanges occurring
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 4. REDUCTION OF MINIMUM TAX RATE ON CAPITAL
GAINS.
(a) IN GENERAL.—Subparagraph (A) of section
55(b)(1) of the Internal Revenue Code of 1986 (relating
to tentative minimum tax) is amended to read as follows:
‘‘(A) the sum of—
‘‘(i) 15 percent of the lesser of—
‘‘(I) the net capital gain (deter-
mined with the adjustments provided
in this part and (to the extent appli-
cable) the limitations of sections
1(h)(2) and 1201(b)), or
‘‘(II) so much of the alternative
minimum taxable income for the tax-
able year as exceeds the exemption
amount, plus
‘‘(ii) 20 percent (24 percent in the
case of a taxpayer other than a corpora-
tion) of the amount (if any) by which the
excess referred to in clause (i)(II) exceeds
the net capital gain (as so determined), re-
duced by’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to sales and exchanges occurring
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 5. MINIMUM TAX ON FOREIGN AND FOREIGN-OWNED
CORPORATIONS.
(a) IN GENERAL.—Subchapter A of chapter 1 of the
Internal Revenue Code of 1986 (relating to determination
of tax liability) is amended by adding at the end thereof
the following new part:
‘‘PART VIII—MINIMUM TAX ON CERTAIN FOREIGN
AND FOREIGN-OWNED CORPORATIONS
‘‘Sec. 59B. Minimum tax on certain foreign and foreign-owned
corporations.
‘‘SEC. 59B. MINIMUM TAX ON CERTAIN FOREIGN AND FOR-
EIGN-OWNED CORPORATIONS.
‘‘(a) IMPOSITION OF TAX.—In the case of a corpora-
tion to which this section applies, there is hereby imposed
(in addition to any other tax imposed by this subtitle) a
tax equal to the excess (if any) of—
‘‘(1) 34 percent of the product of—
‘‘(A) 5 percent, and
‘‘(B) the gross receipts of the taxpayer
from the sale or leasing of property manufac-
tured by the taxpayer or by any foreign person
that is a related party of the taxpayer, over
‘‘(2) the aggregate tax imposed under sections
11, 55, and 1201 for such year.
‘‘(b) TAXPAYERS TO WHICH SECTION APPLIES.—
This section shall apply to a corporation for the taxable
year if such corporation is—
‘‘(1) a domestic corporation which is 25-percent
foreign-owned, or
‘‘(2) a foreign corporation engaged in a trade or
business within the United States.
‘‘(c) DEFINITIONS.—For purposes of this section, the
term ‘25-percent foreign-owned’, ‘foreign person’, and ‘re-
lated party’ have the respective meanings given such terms
by section 6038A(c).’’
(b) CLERICAL AMENDMENT.—The table of parts for
such subchapter A is amended by adding at the end there-
of the following new item:
‘‘Part VIII. Minimum tax on certain foreign and foreign-owned
corporations.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1992.
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