To amend the Internal Revenue Code of 1986 to restore the 10 percent investment credit.

SECTION 1. RESTORATION OF INVESTMENT CREDIT.

    (a) Allowance of Credit.--Section 46 of the Internal Revenue Code 
of 1986 (relating to amount of investment credit) 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 the following new paragraph:
            ``(4) the general investment credit.''
    (b) Amount of Credit.--Section 48 of such Code is amended by adding 
at the end thereof the following new subsection:
    ``(c) General Investment Credit.--
            ``(1) In general.--For purposes of section 46, the general 
        investment credit for any taxable year is an amount equal to 10 
        percent of the qualified investment for such taxable year.
            ``(2) Qualified investment.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the qualified investment for any taxable year is the 
                aggregate of--
                            ``(i) the applicable percentage of the 
                        basis of each new section 38 property placed in 
                        service by the taxpayer during such taxable 
                        year, plus
                            ``(ii) the applicable percentage of the 
                        cost of each used section 38 property placed in 
                        service by the taxpayer during such taxable 
                        year.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for any 
                property shall be determined under paragraphs (2) and 
                (7) of section 46(c) (as in effect on the day before 
                the date of the enactment of the Revenue Reconciliation 
                Act of 1990).
                    ``(C) Certain rules made applicable.--The 
                provisions of subsections (b) and (c) of section 48 (as 
                in effect on the day before the date of the enactment 
                of the Revenue Reconciliation Act of 1990) shall apply 
                for purposes of this part.
            ``(3) Section 38 property.--For purposes of this 
        subsection, the term `section 38 property' means--
                    ``(A) tangible personal property (other than an air 
                conditioning or heating unit), or
                    ``(B) other tangible property (not including a 
                building and its structural components) but only if 
                such property--
                            ``(i) is used as an integral part of 
                        manufacturing, production, or extraction or of 
                        furnishing transportation, communications, 
                        electrical energy, gas, water, or sewage 
                        disposal services, or
                            ``(ii) constitutes a research facility used 
                        in connection with any of the activities 
                        referred to in clause (i), or
                            ``(iii) constitutes a facility used in 
                        connection with any of the activities referred 
                        to in clause (i) for the bulk storage of 
                        fungible commodities (including commodities in 
                        a liquid or gaseous state), or
                    ``(C) elevators and escalators, but only if--
                            ``(i) the construction, reconstruction, or 
                        erection of the elevator or escalator is 
                        completed by the taxpayer, or
                            ``(ii) the original use of such elevator or 
                        escalator commences with the taxpayer, or
                    ``(D) single purpose agricultural or horticultural 
                structures; or
                    ``(E) a storage facility (not including a building 
                and its structural components) used in connection with 
                the distribution of petroleum or any primary product of 
                petroleum.
        Such term includes only property to which section 168 applies 
        without regard to any useful life and any other property with 
        respect to which depreciation (or amortization in lieu of 
        depreciation) is allowable and having a useful life (determined 
        as of the time such property is placed in service) of 3 years 
        or more.
            ``(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 subsection (c)(4) and (d) of section 
        46 (as in effect on the day before the date of the enactment of 
        the Revenue Reconciliation Act of 1990) shall apply for 
        purposes of this subsection.''
    (c) Technical Amendments.--
            (1) Subparagraph (C) of section 49(a)(1) of such Code is 
        amended by striking ``and'' at the end of clause (ii), by 
        striking the period at the end of clause (iii) and inserting 
        ``, and'', and by adding at the end the following new clause:
                            ``(iv) the basis of any new section 38 
                        property and the cost of any used section 38 
                        property.''
            (2) Subparagraph (E) of section 50(a)(2) of such Code is 
        amended by inserting ``or 48(c)(5)'' before the period at the 
        end.
            (3) Paragraph (5) of section 50(a) of such Code is amended 
        by adding at the end thereof the following new subparagraph:
                    ``(D) Special rules for certain property.--In the 
                case of any section 38 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.''
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act under 
rules similar to the rules of section 48(m) of such Code (as in effect 
on the day before the date of the enactment of the Revenue 
Reconciliation Act of 1990).

Summary: Amends the Internal Revenue Code to reinstate the ten-percent investment tax credit for property used as an integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electrical energy, gas, water, and sewage disposal services.