IN THE HOUSE OF REPRESENTATIVES
Mr. Hall (for himself and Mr. Cavalieri, with thanks to Mr. Edwards) introduced the following bill;
To amend the Internal Revenue Code of 1986 to put tools in the hands of American workers by reinstating after 1987 a 10-percent investment tax credit for property used in manufacturing, production, extraction, or related purposes in the United States.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
The Act may be cited as the `Jobs, Growth, and Competitiveness Act of 1987'.
SEC. 2. INVESTMENT TAX CREDIT.
(a) REINSTATEMENT OF 10-PERCENT INVESTMENT TAX CREDIT AFTER 1987 FOR CERTAIN PROPERTY Subsection (a) of section 49 of the Internal Revenue Code of 1986 (relating to termination of regular percentage) is amended to read as follows:
(a) AMOUNT OF INVESTMENT TAX CREDIT-
(1) GENERAL RULE- For purposes of determining the amount of the investment tax credit determined under section 46, the regular percentage shall not apply to any property placed in service after December 31, 1985.
(2) SPECIAL RULE- With respect to any qualified investment tax credit property placed in service after December 31, 1987, paragraph (1) and subsections (c) and (d) shall not apply and paragraph (1) of section 46(b) (relating to regular percentage) shall apply.
(3) QUALIFIED INVESTMENT TAX CREDIT PROPERTY- The term `qualified investment tax credit property' means tangible property (other than a building, its structural components, or an air conditioning or heating unit), but only if such property—
(A) is used as an integral part of manufacturing, production (including agriculture), or extraction or of furnishing transportation, communications, electrical energy, gas, water, waste disposal, or pollution control services,
(B) constitutes a research facility or research equipment used in connection with any of the activities referred to in subparagraph (A), or
(C) constitutes a facility used in connection with any of the activities referred to in subparagraph (A) for the bulk storage of fungible commodities (including commodities in a liquid or gaseous state).'
(b) CREDIT ALLOWED AGAINST MINIMUM TAX-
(1) CREDIT ALLOWED- Section 38(c) of the Internal Revenue Code of 1986 is amended by relabeling paragraph (3) as paragraph (4) and inserting the following new paragraph (3):
(3) NEW INVESTMENT TAX CREDIT MAY OFFSET 100 PERCENT OF MINIMUM TAX-
(A) IN GENERAL- In the case of a C corporation, the amount determined under paragraph (1)(A) as reduced by paragraph (2) shall be further reduced (but not below zero) by the lesser of--
(i) the portion of the new investment tax credit not used against the regular limitation, or
(ii) 100 percent of the taxpayer's tentative minimum tax for the taxable year.
(B) PORTION OF NEW INVESTMENT TAX CREDIT NOT USED AGAINST REGULAR LIMIT-
For purposes of subparagraph (A), the portion of the new investment taxcredit for any taxable year not used against the regular limitation is the excess (if any) of--
(i) the portion of the credit under subsection (a) which is attributable to the application of the regular percentage under section 46 to property described in section 49 (a)(3), over
(ii) the limitation of paragraph (1) (taking into account paragraph (2) but without regard to this paragraph) reduced by the portion of the credit under subsection (a) which is not so attributable.
(C) LIMITATION- In no event shall this paragraph permit the allowance of a credit which would result in a net chapter 1 tax less than an amount equal to 10 percent of the amount determined under section 55(b)(1)(A) without regard to the alternative tax net operating loss deduction. For purposes of the preceding sentence, the term `net chapter 1 tax' means the sum of the regular tax liability for the taxable year and the tax imposed 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).'
(2) AMENDMENT TO ORDERING RULE-
Paragraph (2) of section 38(d) of the Internal Revenue Code of 1986 is amended by inserting at the end thereof the following new sentence: `Credits under section 46(a)(1) attributable to property described in section 49(a)(3) shall be treated as used after credits under section 46(a)(1) which are not so attributable.'
(c) CONFORMING AMENDMENTS-
(1) The section heading of section 49 of such Code is amended by striking out `termination of' and inserting in lieu thereof `special rules for'.
(2) The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by striking out `Termination of' and inserting in lieu thereof `Special rule for'.