I
#
103D CONGRESS
1ST SESSION
H. R. 1108
To amend the Internal Revenue Code of 1986 to provide small businesses
a credit for the cost of complying with Federal regulations.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 24, 1993
Mr. LIGHTFOOT (for himself, Mr. BAKER of Louisiana, Mr. BURTON of Indi-
ana, Mr. CLINGER, Mr. DELAY, Mr. DORNAN, Mr. DREIER, Mr. EMER-
SON, Mr. FIELDS of Texas, Mr. GALLEGLY, Mr. GALLO, Mr. GILMAN,
Mr. GINGRICH, Mr. GOODLING, Mr. HERGER, Mr. HOKE, Mr. HUNTER,
Mr. INHOFE, Mr. KOLBE, Mr. LEWIS of Florida, Mrs. LLOYD, Mr.
MCHUGH, Mr. MACHTLEY, Ms. NORTON, Mr. OXLEY, Mr. PARKER, Mr.
ROBERTS, Mr. SAXTON, Mr. SENSENBRENNER, Mr. SKEEN, Mr. SOLO-
MON, Mr. SUNDQUIST, Mr. THOMAS of Wyoming, Mr. UPTON, and Mr.
WYNN) 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
small businesses a credit for the cost of complying with
Federal regulations.
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 Regu-
latory Cost Relief Act of 1993’’.
•HR 1108 IH1S
SEC. 2. TAX CREDIT FOR CERTAIN REGULATORY COSTS.
(a) GENERAL RULE.—Section 44 of the Internal
Revenue Code of 1986 is amended to read as follows:
‘‘SEC. 44. SMALL BUSINESS REGULATORY COSTS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
in the case of a qualified small business, the regulatory
cost credit determined under this section for any taxable
year is 50 percent of so much of the qualified regulatory
costs for the taxable year as exceed $250.
‘‘(b) QUALIFIED SMALL BUSINESS.—For purposes of
this section, the term ‘qualified small business’ means any
person if—
‘‘(1)(A) such person is a small business concern
as defined in section 3(a) of the Small Business Act
and the regulations thereunder, or
‘‘(B) a certification that such person is a small
business concern under section 8(b)(6) of the Small
Business Act (15 U.S.C. 637(b)(6)) is in effect as
of the close of the taxable year, and
‘‘(2) such person elects the application of this
section for the taxable year.
‘‘(c) QUALIFIED REGULATORY COSTS.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The term ‘qualified regu-
latory costs’ means the sum of the following
amounts paid or incurred during the taxable year:
•HR 1108 IH1S
‘‘(A) The federally required nonproductive
expenditures.
‘‘(B) The product approval costs.
‘‘(2) FEDERALLY
REQUIRED
NONPRODUCTIVE
EXPENDITURES.—
‘‘(A) IN
GENERAL.—The term ‘federally
required nonproductive expenditure’ means any
amount which is paid or incurred by the tax-
payer in connection with any plant or other
property operated by the taxpayer and which—
‘‘(i) is certified by the Federal certify-
ing authority to the Secretary as being
necessary or appropriate for the operation
of such plant or property to be in compli-
ance with—
‘‘(I) the requirements of any reg-
ulation issued pursuant to any Fed-
eral law, or
‘‘(II) the requirements of any
regulation issued pursuant to a State
law which was adopted to meet a re-
quirement of such Federal law;
‘‘(ii) does not significantly—
‘‘(I) increase the output or capac-
ity, extend the useful life, or reduce
•HR 1108 IH1S
the total operating costs of any prop-
erty, or
‘‘(II) alter the nature of any
manufacturing or production process,
and
‘‘(iii) cannot reasonably be expected to
be recovered over its useful life by reason
of profits derived through the recovery of
wastes or otherwise.
‘‘(B) EXPENSES WITH RESPECT TO NEW
PROPERTY NOT ELIGIBLE.—The term ‘federally
required nonproductive expenditure’ does not
include any amount paid or incurred in connec-
tion with any property first placed in service
after the later of—
‘‘(i) the date on which the regulation
became final, or
‘‘(ii) the date of the enactment of the
Small Business Regulatory Cost Relief Act
of 1993.
‘‘(C) FEDERAL CERTIFYING AUTHORITY.—
The term ‘Federal certifying authority’ means
the head of the Federal agency which has the
primary jurisdiction over the Federal law re-
ferred to in subparagraph (A)(i)(I).
•HR 1108 IH1S
‘‘(3) PRODUCT
APPROVAL
COSTS.—The term
‘product approval costs’ means amounts paid or in-
curred by the taxpayer in connection with determin-
ing the safety or effectiveness of any product or
service in order to comply with the requirements of
any Federal law.
‘‘(d) SPECIAL RULES.—
‘‘(1) TREATMENT OF EXPENDITURES TO PRO-
VIDE ACCESS TO DISABLED INDIVIDUALS.—For pur-
poses of this section, the term ‘qualified regulatory
costs’ includes any eligible access expenditures as de-
fined in this section as in effect on the day before
the date of the enactment of the Small Business
Regulatory Cost Relief Act of 1993.
‘‘(2) DENIAL OF DOUBLE BENEFIT.—If a credit
is determined under this section with respect to any
qualified regulatory cost—
‘‘(A) no deduction or credit shall be al-
lowed under any other provision of this chapter
for the credit portion of such cost, and
‘‘(B) no increase in the adjusted basis of
any property shall result from the credit portion
of such cost.
For purposes of the preceding sentence, the term
‘credit portion’ means, with respect to any qualified
•HR 1108 IH1S
regulatory cost for any taxable year, the amount
which bears the same ratio to the credit determined
under this section for such taxable year as the
amount of such cost bears to the entire amount of
qualified regulatory costs for such taxable year.’’
(b) CREDIT PART OF GENERAL BUSINESS CREDIT.—
Paragraph (7) of section 38(b) of such Code is amended
to read as follows:
‘‘(7) in the case of a qualified small business
(as defined in section 44(b)), the regulatory cost
credit determined under section 44(a), plus.’’
(c) CONFORMING AMENDMENT.—The paragraph of
section 39(d) of such Code which relates to the credit
under section 44 is amended by adding at the end thereof
the following new sentence: ‘‘No portion of the unused
business credit for any taxable year which is attributable
to the additional credit determined under section 44 by
reason of the Small Business Regulatory Cost Relief Act
of 1993 may be carried back to taxable year ending before
the date of the enactment of such Act.’’
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by striking the item relating to
section 44 and inserting the following:
‘‘Sec. 44. Small business regulatory costs.’’
•HR 1108 IH1S
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred after
the date of the enactment of this Act in taxable years end-
ing after such date of enactment.
Æ