I
104TH CONGRESS
1ST SESSION
H. R. 41
To amend the Internal Revenue Code of 1986 to provide taxpayers engaged
in certain agriculture-related activities a credit against income tax for
property used to control environmental pollution and for soil and water
conservation expenditures.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. HERGER (for himself, Mr. BREWSTER, Mr. BAKER of Louisiana, Mr.
BUNNING of Kentucky, Mr. CRAPO, Mr. WALSH, Mr. COMBEST, Mr.
GILCHREST, Mr. CANADY, Mr. CAMP, Mr. MCCRERY, Mr. GEKAS, Mr.
DEAL of Georgia, Mr. HEFNER, Ms. DANNER, Mr. BARRETT of Ne-
braska, Mr. MINGE, Mr. KINGSTON, Mr. EMERSON, Mr. BEREUTER, Mr.
ROBERTS, Mr. BURTON of Indiana, Mr. HOUGHTON, Mr. POMEROY, Mr.
HOEKSTRA, Mr. PARKER, Mr. LIGHTFOOT, Mr. OXLEY, Mr. CALVERT,
Mr. CRANE, Mr. HUTCHINSON, and Mr. SOLOMON) introduced the follow-
ing bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide
taxpayers engaged in certain agriculture-related activities
a credit against income tax for property used to control
environmental pollution and for soil and water conserva-
tion expenditures.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR PROPERTY USED IN CERTAIN AG-
RICULTURE-RELATED ACTIVITIES TO CON-
TROL ENVIRONMENTAL POLLUTION AND FOR
SOIL AND WATER CONSERVATION EXPENDI-
TURES.
(a) IN GENERAL.—Section 46 of the Internal Reve-
nue Code of 1986 (relating to amount of investment cred-
it) is amended by striking ‘‘and’’ at the end of paragraph
(2), by striking the period at the end of paragraph (3)
and inserting ‘‘, and’’, and by adding at the end thereof
the following paragraph:
‘‘(4) in the case of an eligible taxpayer (as de-
fined in section 48(c)), the agricultural environ-
mental credit.’’
(b) AGRICULTURAL ENVIRONMENTAL CREDIT.—Sec-
tion 48 of such Code is amended by adding at the end
thereof the following new subsection:
‘‘(c) AGRICULTURAL ENVIRONMENTAL CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 46,
in the case of an eligible taxpayer, the agricultural
environmental credit for any taxable year is—
‘‘(A) 15 percent of the portion of the basis
of each agricultural environmental property
placed in service by the taxpayer during such
taxable year, and
‘‘(B) 15 percent of the amount allowed as
a deduction under section 175 (determined
without regard to paragraph (4)(B)) for such
taxable year.
‘‘(2) ELIGIBLE TAXPAYER.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, the term ‘eligible taxpayer’ means
any taxpayer primarily engaged in a farming-
related business.
‘‘(B) FARMING-RELATED BUSINESS.—For
purposes of this subsection, the term ‘farming-
related business’ means—
‘‘(i) a farming business (as defined in
section 263A(e)(4)),
‘‘(ii) a trade or business of mixing fer-
tilizers from purchased fertilizer materials,
and
‘‘(iii) a trade or business of the whole-
sale distribution of animal feeds, fertilizers,
agricultural chemicals, pesticides, seeds, or
other farm supplies (other than grains).
‘‘(3) AGRICULTURAL
ENVIRONMENTAL
PROP-
ERTY.—
‘‘(A) IN GENERAL.—For purposes of this
subsection, the term ‘agricultural environmental
property’ means any new identifiable treatment
facility—
‘‘(i) which is used in a farming-related
business for the primary purpose of com-
plying with Federal, State, and local envi-
ronmental laws dealing with the abatement
or control of water, soil, or atmospheric
pollution or contamination by removing, al-
tering, disposing, storing, or preventing the
creation or emission of pollutants, contami-
nants, wastes, or heat, and
‘‘(ii) which does not significantly—
‘‘(I) increase the output or capac-
ity, extend the useful life, or reduce
the total operating costs of plant or
property to which such facility relates,
or
‘‘(II) alter the nature of any
manufacturing or production process
or facility.
‘‘(B) NEW IDENTIFIABLE TREATMENT FA-
CILITY.—The term ‘new identifiable treatment
facility’ has the meaning given such term by
section 169(d)(4)(A), determined by substitut-
ing ‘December 31, 1994’ for ‘December 31,
1968’.
‘‘(4) SPECIAL RULES.—
‘‘(A) COORDINATION
WITH
ENERGY
AND
REHABILITATION
CREDITS.—This 
subsection
shall not apply to—
‘‘(i) any property to the extent the
basis of such property is attributable to
qualified rehabilitation expenditures (as de-
fined in section 47(c)(2)), or
‘‘(ii) energy property.
‘‘(B) COORDINATION
WITH
DEDUCTION
FOR SOIL AND WATER CONSERVATION EXPEND-
ITURES.—The amount which would (but for
this subparagraph) be allowed as a deduction
under section 174 for any taxable year shall be
reduced by the amount of the credit allowed by
paragraph (1)(B) for such year.
‘‘(C) COORDINATION WITH AMORTIZATION
OF
POLLUTION
CONTROL
FACILITIES.—This
subsection shall not apply to any property to
the extent an election is made under section
169 with respect to the basis of such property.’’
(c) CLERICAL AMENDMENTS.—
(1) The section heading for section 48 of such
Code is amended to read as follows:
‘‘SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; AGRI-
CULTURAL ENVIRONMENTAL CREDIT.’’
(2) The item relating to section 48 in the table
of sections for subpart E of part IV of subchapter
A of chapter 1 of such Code is amended to read as
follows:
‘‘Sec. 48. Energy credit; reforestation credit; agricultural environ-
mental credit.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
1994, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990).
Æ