I
107TH CONGRESS
1ST SESSION
H. R. 437
To amend the Internal Revenue Code of 1986 to repeal the alternative
minimum tax.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 6, 2001
Mr. ENGLISH 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 repeal
the alternative minimum tax.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Alternative Minimum Tax Repeal Act of 2001’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
SEC. 2. ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Part VI of subchapter A of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
alternative minimum tax) is hereby repealed.
(b) EXPEDITED USE OF CREDIT FOR PRIOR YEAR
MINIMUM
TAX
LIABILITY
OF
CORPORATIONS.—Sub-
section (c) of section 53 of such Code is amended to read
as follows:
‘‘(c) LIMITATIONS.—
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), the credit allowable under subsection (a)
for any taxable year shall not exceed the excess (if
any) of—
‘‘(A) the regular tax liability of the tax-
payer for such taxable year reduced by the sum
of the credits allowable under subparts A, B, D,
E, and F of this part, over
‘‘(B) the tentative minimum tax for the
taxable year.
‘‘(2) CORPORATIONS.—In the case of a corpora-
tion, the credit allowable under subsection (a) for
any taxable year shall not exceed 90 percent of the
regular tax liability of the taxpayer for such taxable
year reduced by the sum of the credits allowable
under subparts B, D, E, and F of this part.’’.
(c) CONFORMING AMENDMENTS.—
(1) Subparagraph (B) of section 1(g)(7) (relat-
ing to election to claim certain unearned income of
child on parent’s return) is amended—
(A) by inserting ‘‘and’’ at the end of clause
(i),
(B) by striking ‘‘and’’ at the end of clause
(ii) and inserting a period, and
(C) by striking clause (iii).
(2) Subsection (d) of section 2 (relating to
taxes imposed on nonresident aliens) is amended by
striking ‘‘sections 1 and 55’’ and inserting ‘‘section
1’’.
(3) Subsection (a) of section 5 (relating to cross
references relating to tax on individuals) is amended
by striking paragraph (4).
(4) Subsection (d) of section 11 (relating to
taxes imposed on foreign corporations) is amended
by striking ‘‘the taxes imposed by subsection (a) and
section 55’’ and inserting ‘‘the tax imposed by sub-
section (a)’’.
(5) Section 12 (relating to cross references re-
lating to tax on corporations) is amended by striking
paragraph (7).
(6) Subsection (d) of section 24 (relating to
child tax credit) is amended by striking paragraph
(2) and redesignating paragraph (3) as paragraph
(2).
(7) Section 26 (relating to limitation based on
tax liability; definition of tax liability) is amended—
(A) by amending subsection (a) to read as
follows:
‘‘(a) LIMITATION BASED ON AMOUNT OF TAX.—The
aggregate amount of credits allowed by this subpart for
the taxable year shall not exceed the taxpayer’s regular
tax liability for the taxable year.’’,
(B) in subsection (b)(2), by striking sub-
paragraph (A) and by redesignating subpara-
graphs (B) through (N) as subparagraphs (A)
through (M), respectively, and
(C) by striking subsection (c).
(8) Paragraph (6) of section 29(b) (relating to
credit for producing fuel from a nonconventional
source) is amended striking ‘‘the excess’’ and all
that follows and inserting ‘‘the regular tax for the
taxable year reduced by the sum of the credits allow-
able under subpart A and section 27.’’
(9) Paragraph (3) of section 30(b) (relating to
credit for qualified electric vehicles) is amended by
striking ‘‘the excess’’ and all that follows and insert-
ing ‘‘the regular tax for the taxable year reduced by
the sum of the credits allowable under subpart A
and sections 27 and 29.’’
(10) Subsection (h) of section 32 (relating to
reduction of credit to taxpayers subject to alter-
native minimum tax) is hereby repealed.
(11) Subsection (c) of section 38 (relating to
general business credit) is amended—
(A) by striking paragraphs (1) and (2) and
inserting the following new paragraph:
‘‘(1) IN GENERAL.—The credit allowed under
subsection (a) for any taxable year shall not exceed
25 percent of so much of the taxpayer’s net regular
tax liability as exceeds $25,000. For purposes of the
preceding sentence, the term ‘net regular tax liabil-
ity’ means the regular tax liability reduced by the
sum of the credits allowable under subparts A and
B of this part.’’, and
(B) by redesignating paragraph (3) as
paragraph (2).
(12) Paragraph (4) of section 45A(d) (relating
to Indian employment credit) is amended by striking
‘‘for purposes’’ and all that follows and inserting
‘‘for purposes of determining the amount of any
credit allowable under this chapter.’’
(13) Subparagraph (B) of section 45D(g)(4)
(relating to new markets tax credit) is amended by
striking ‘‘or for purposes of section 55’’.
(14) Subsection (d) of section 53 (relating to
credit for prior year minimum tax liability) is
amended by adding at the end the following:
‘‘For purposes of this subsection, references to sections
55, 56, and 59 shall be treated as references to such sec-
tions as in effect on the day before the date of the enact-
ment of the Alternative Minimum Tax Repeal Act of
2001.’’.
(15) Subsection (b) of section 59A (relating to
environmental tax) is amended by adding at the end
the following:
‘‘For purposes of this subsection, references to sections
55 and 56 shall be treated as references to such sections
as in effect on the day before the date of the enactment
of the Alternative Minimum Tax Repeal Act of 2001.’’.
(16)(A) Paragraph (2) of section 148(b) (relat-
ing to higher yield investments) is amended by add-
ing at the end the following new flush sentence:
‘‘Such term shall not include any tax-exempt bond.’’
(B) Paragraph (3) of section 148(b) is hereby
repealed.
(17) Subparagraph (B) of section 149(g)(3)
(relating to hedge bonds) is amended—
(A) in the heading, by striking ‘‘BONDS
NOT SUBJECT TO MINIMUM TAX.—’’ and insert-
ing ‘‘BONDS.—’’, and
(B) by striking all that follows ‘‘invested in
bonds’’ and inserting ‘‘the interest on which is
not includible in gross income under section
103.’’
(18) Subsection (j) of section 168 (relating to
accelerated cost recovery system) is amended by
striking paragraph (3).
(19) Section 173 (relating to circulation ex-
penditures) is amended by striking ‘‘(a) GENERAL
RULE.—’’ and by striking subsection (b).
(20) Subsection (f) of section 174 (relating to
research and experimental expenditures) is amended
to read as follows:
‘‘(f) CROSS REFERENCE.—
‘‘For adjustments to basis of property for amounts
allowed as deductions as deferred expenses under
subsection (b), see section 1016(a)(14).’’
(21) Subsection (c) of section 263 (relating to
capital expenditures) is amended by striking ‘‘59(e)
or’’.
(22) Subsection (c) of section 263A (relating to
capitalization and inclusion in inventory costs of cer-
tain expenses) is amended by striking paragraph (6).
(23) Section 382(l) (relating to limitation on
net operating loss carryforwards and certain built-in
losses following ownership change) is amended by
striking paragraph (7) and by redesignating para-
graph (8) as paragraph (7).
(24) Section 443 (relating to returns for a pe-
riod of less than 12 months) adjustment in com-
puting minimum tax and tax preferences) is amend-
ed by striking subsection (d) and by redesignating
subsection (e) as subsection (d).
(25) Section 616 (relating to development ex-
penditures) is amended by striking subsection (e).
(26) Section 617 (relating to deduction and re-
capture of certain mining exploration expenditures)
is amended by striking subsection (i).
(27) Subsection (c) of section 641 (relating to
imposition of tax) is amended—
(A) in paragraph (2) by striking subpara-
graph (B) and redesignating subparagraphs (C)
and (D) as subparagraphs (B) and (C), respec-
tively, and
(B) in paragraph (3), by striking ‘‘para-
graph 
(2)(C)’’ 
and 
inserting 
‘‘paragraph
(2)(B)’’.
(28) Subsections (b) and (c) of section 666 (re-
lating to accumulation distribution allocated to pre-
ceding years) are each amended by striking ‘‘(other
than the tax imposed by section 55)’’.
(29)(A) Subsection (a) of section 772 (relating
to simplified flow-through) is amended by striking
paragraph (5) and redesignating paragraphs (6),
(7), (8), (9), (10), and (11) as paragraphs (5), (6),
(7), (8), (9), and (10), respectively.
(B) Subsection (c) of section 772 is amended—
(i) in paragraph (2), by striking ‘‘para-
graphs (3)(A) and (5)(A)’’ and inserting ‘‘para-
graph (3)(A)’’,
(ii) by striking paragraph (5), and
(iii) by redesignating paragraph (6) as
paragraph (5), and in that paragraph by strik-
ing ‘‘paragraph (6) of subsection (a)’’ and in-
serting ‘‘paragraph (5) of subsection (a)’’.
(C) Subsection (d) of section 772 is amended—
(i) by striking paragraph (3) and redesig-
nating paragraphs (4), (5), and (6) as para-
graphs (3), (4), and (5), respectively, and
(ii) in subparagraph (A) of paragraph (3),
as so redesignated, by striking ‘‘subsection
(a)(11)’’ and inserting ‘‘subsection (a)(10)’’.
(30) Paragraph (2) of section 815(c) (relating
to distributions to shareholders from pre-1984 pol-
icyholders surplus account) is amended by striking
the last sentence.
(31) Section 847 (relating to special estimated
tax payments) is amended—
(A) in paragraph (9), by striking the last
sentence;
(B) in paragraph (10), by inserting ‘‘and’’
at the end of subparagraph (A) and by striking
subparagraph (B) and redesignating subpara-
graph (C) as subparagraph (B).
(32) Section 848 (relating to capitalization of
certain policy acquisition expenses) is amended by
striking subsection (i) and by redesignating sub-
section (j) as subsection (i).
(33) Subsection (a) of section 860E (relating to
treatment of income in excess of daily accruals on
residual interests) is amended by striking paragraph
(4).
(34) Section 860J (relating to non-FASIT
losses not to offset certain FASIT inclusions) is
amended by striking subsection (c) and redesig-
nating subsection (d) as subsection (c).
(35) Paragraph (1) of section 871(b) (relating
to tax on nonresident alien individuals) is amended
by striking ‘‘or 55’’.
(36) Subsection (b) of section 877 (relating to
expatriation to avoid tax) is amended by striking ‘‘or
55’’.
(37) Paragraph (1) of section 882(a) (relating
to tax on income of foreign corporations connected
with United States business) is amended by striking
‘‘55,’’.
(38) Subsection (a) of section 897 (relating to
disposition of investment in United States real prop-
erty) is amended to read as follows:
‘‘(a) TREATMENT
AS EFFECTIVELY CONNECTED
WITH UNITED STATES TRADE OR BUSINESS.—For pur-
poses of this title, gain or loss of a nonresident alien indi-
vidual or a foreign corporation from the disposition of a
United States real property interest shall be taken into
account—
‘‘(1) in the case of a nonresident alien indi-
vidual, under section 871(b)(1), or
‘‘(2) in the case of a foreign corporation, under
section 882(a)(1),
as if the taxpayer were engaged in a trade or business
within the United States during the taxable year and as
if such gain or loss were effectively connected with such
trade or business.’’
(39) Subsection (k) of section 904 (relating to
limitation on credit) is amended to read as follows:
‘‘(k) CROSS REFERENCE.—
‘‘For increase of limitation under subsection (a)
for taxes paid with respect to amounts received
which were included in the gross income of the tax-
payer for a prior taxable year as a United States
shareholder with respect to a controlled foreign cor-
poration, see section 960(b).’’
(40) Paragraph (1) of section 962(a) (relating
to election by individuals to be subject to tax at cor-
porate rates) is amended—
(A) by striking ‘‘sections 1 and 55’’ and
inserting ‘‘section 1’’, and
(B) by striking ‘‘sections 11 and 55’’ and
inserting ‘‘section 11’’.
(41) Paragraph (20) of section 1016(a) (relat-
ing to adjustments to basis) is amended by inserting
‘‘, as in effect on the day before the date of the en-
actment of the Alternative Minimum Tax Repeal Act
of 2001’’ after ‘‘preferences)’’.
(42) Paragraph (4) of section 1260(b) (relating
to gains from constructive ownership transactions) is
amended by striking ‘‘for purposes’’ and all that fol-
lows and inserting ‘‘for purposes of determining the
amount of any credit allowable under this chapter.’’
(43) Paragraph (1) of section 1397E(c) (relat-
ing to credit to holders of qualified zone academy
bonds) is amended by striking ‘‘plus the tax imposed
by section 55’’.
(44) Subsection (f) of section 1400I (relating to
commercial revitalization deduction) is amended by
striking paragraph (4).
(45) Subsection (a) of section 1561 (relating to
limitations on certain multiple tax benefits in the
case of certain controlled corporations) is amended
by striking the last sentence.
(46) Subparagraph (B) of section 6015(d)(2)
(relating to relief from joint and several liability on
joint return) is amended by striking ‘‘or 55’’.
(47) Subparagraph (A) of section 6425(c)(1)
(defining income tax liability) is amended—
(A) by inserting ‘‘plus’’ at the end of
clause (i), and
(B) by striking clause (ii) and redesig-
nating clause (iii) as clause (ii).
(48) Section 6654(d)(2) (relating to failure by
individual 
to 
pay 
estimated 
income 
tax) 
is
amended—
(A) in clause (i) of subparagraph (B), by
striking ‘‘, alternative minimum taxable in-
come,’’, and
(B) in clause (i) of subparagraph (C), by
striking ‘‘, alternative minimum taxable in-
come,’’.
(49) Subparagraph (A) of section 6655(g)(1)
(relating to failure by corporation to pay estimated
income tax) is amended—
(A) by striking clause (ii), and
(B) by redesignating clauses (iii) and (iv)
as clauses (ii) and (iii), respectively.
(50) Subparagraph (C) of section 6662(e)(3)
(relating to imposition of accuracy-related penalty)
is amended by inserting ‘‘, as in effect on the day
before the date of the enactment of the Alternative
Minimum Tax Repeal Act of 2001’’ after ‘‘55(c)’’.
(d) CLERICAL AMENDMENT.—The table of parts for
subchapter A of chapter 1 is amended by striking the item
relating to part VI.