I
103D CONGRESS
1ST SESSION
H. R. 947
To amend the Internal Revenue Code of 1986 to allow a permanent
incremental investment credit.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 17, 1993
Mr. LIPINSKI 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 a
permanent incremental investment credit.
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 ‘‘Buy-American Invest-
ment Incentive Act’’.
SEC. 2. 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) the incremental investment credit.’’
(b) AMOUNT OF CREDIT.—Section 48 of such Code
is amended by adding at the end thereof the following new
subsection:
‘‘(c) INCREMENTAL INVESTMENT CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 46,
the incremental investment credit for any taxable
year is an amount equal to 10 percent of the excess
(if any) of—
‘‘(A) the aggregate bases of qualified in-
vestment credit properties placed in service dur-
ing such taxable year, over
‘‘(B) 80 percent of the base amount.
‘‘(2) QUALIFIED
INVESTMENT
CREDIT
PROP-
ERTY.—For purposes of this subsection—
‘‘(A) IN
GENERAL.—The term ‘qualified
investment credit property’ means any eligible
property—
‘‘(i) which is tangible property to
which section 168 applies,
‘‘(ii) which is section 1245 property
(as defined in section 1245(a)(3)), and
‘‘(III) constitutes a facility used
in connection with any of the activities
referred to in subclause (I) for the
bulk storage of fungible commodities
(including commodities in a liquid or
gaseous state).
‘‘(ii) IMPORTED PROPERTY NOT ELIGI-
BLE.—Property shall not be treated as eli-
gible property if—
‘‘(I) such property was completed
outside the United States, or
‘‘(II) less than 75 percent of the
basis of such property is attributable
to value added within the United
States.
For purposes of this clause, the term
‘United States’ includes the Common-
wealth of Puerto Rico and the possessions
of the United States.
‘‘(iii) CERTAIN PROPERTY NOT ELIGI-
BLE.—Any passenger automobile and any
office furnishings shall not be treated as
eligible property.
‘‘(3) BASE
AMOUNT.—For purposes of para-
graph (1)(B)—
‘‘(A) 
IN
GENERAL.—The 
term 
‘base
amount’ means the product of—
‘‘(i) the fixed-base percentage, and
‘‘(ii) the average annual gross receipts
of the taxpayer for the 4 taxable years pre-
ceding the taxable year for which the cred-
it is being determined (hereafter in this
subsection referred to as the ‘credit year’).
‘‘(B) MINIMUM
BASE
AMOUNT.—In no
event shall the base amount be less than 50
percent of the amount determined under para-
graph (1)(A).
‘‘(C) FIXED-BASE PERCENTAGE.—
‘‘(i) IN
GENERAL.—The fixed-base
percentage is the percentage which the ag-
gregate amounts described in paragraph
(1)(A) for taxable years beginning after
December 31, 1987, and before January 1,
1993, is of the aggregate gross receipts of
the taxpayer for such taxable years.
‘‘(ii) ROUNDING.—The percentages
determined under clause (i) shall be round-
ed to the nearest 1⁄100 of 1 percent.
‘‘(D) OTHER RULES.—Rules similar to the
rules of paragraphs (4) and (5) of section 41(c)
shall apply for purposes of this paragraph.
‘‘(4) 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.
‘‘(5) 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.’’
(c) INCREMENTAL INVESTMENT CREDIT ALLOWABLE
AGAINST ENTIRE REGULAR TAX AND ALTERNATIVE MIN-
IMUM TAX.—
(1) Subsection (c) of section 38 of such Code
(relating to limitation based on amount of tax) is
amended by adding at the end thereof the following
new paragraph:
‘‘(3) SPECIAL
RULES
FOR
INCREMENTAL
IN-
VESTMENT CREDIT.—
‘‘(A) IN GENERAL.—In the case of a C
corporation, this section and section 39 shall be
applied separately—
‘‘(i) first with respect to so much of
the credit allowed by subsection (a) as is
not attributable to the incremental invest-
ment credit, and
‘‘(ii) then with respect to the incre-
mental investment credit.
‘‘(B) RULES FOR APPLICATION OF INCRE-
MENTAL INVESTMENT CREDIT.—
‘‘(i) IN GENERAL.—In the case of the
incremental investment credit, in lieu of
applying the preceding paragraphs of this
subsection, the amount of such credit al-
lowed under subsection (a) for any taxable
year shall not exceed the net chapter 1 tax
for such year.
‘‘(ii) NET CHAPTER 1 TAX.—For pur-
poses of clause (i), the term ‘net chapter 1
tax’ means the sum of the regular tax li-
ability for the taxable year and the tax im-
posed by section 55 for the taxable year,
reduced by the sum of the credits allowable
under this part for the taxable year (other
than under section 34 and other than the
incremental investment credit).
‘‘(C) INCREMENTAL
INVESTMENT
CRED-
IT.—For purposes of this paragraph, the term
‘incremental investment credit’ means the credit
allowable under subsection (a) by reason of sec-
tion 48(c).’’
(2) Paragraph (2) of section 55(c) of such Code
is amended to read as follows:
‘‘(2) CROSS REFERENCES.—
‘‘(A) For provisions providing that certain credits
are not allowable against the tax imposed by this
section, see sections 26(a), 28(d)(2), 29(b)(5), and
38(c).
‘‘(B) For provision allowing incremental invest-
ment credit against the tax imposed by this section,
see section 38(c)(3).’’
(d) TECHNICAL AMENDMENTS.—
(1) Clause (ii) of section 49(a)(1)(C) of such
Code is amended by inserting ‘‘or qualified invest-
ment credit property’’ after ‘‘energy 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 qualified investment
credit 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.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to—
(1) property acquired by the taxpayer after De-
cember 3, 1992, and
(2) property the construction, reconstruction, or
erection of which is completed by the taxpayer after
December 3, 1992, but only to the extent of the
basis thereof attributable to construction, recon-
struction, or erection after such date.