[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2453 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 2453
To amend the Internal Revenue Code of 1986 to provide tax incentives to
encourage the conversion of the defense industry to commercial
endeavors, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 17, 1993
Mr. Machtley 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 tax incentives to
encourage the conversion of the defense industry to commercial
endeavors, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. TAX CREDIT FOR HIRING LONG-TERM UNEMPLOYED DEFENSE AND
SHIPBUILDING INDUSTRY WORKERS.
(a) Allowance of Credit.--Paragraph (1) of section 51(d) of the
Internal Revenue Code of 1986 (defining members of targeted groups) is
amended by striking ``or'' at the end of subparagraph (I), by striking
the period at the end of subparagraph (J) and inserting ``, or'', and
by adding at the end the following new subparagraph:
``(K) a long-term unemployed defense or shipbuilding
industry worker.''
(b) Long-Term Unemployed Defense or Shipbuilding Industry Worker.--
Section 51(d) of such Code is amended by adding at the end thereof the
following new paragraph:
``(17) Long-term unemployed defense or shipbuilding
industry worker.--
``(A) In general.--The term `long-term unemployed
defense or shipbuilding industry worker' means an
individual certified by the designated local agency as
having been employed in the defense or shipbuilding
industry and--
``(i) who has been receiving unemployment
compensation at all times during the 6-month
period ending with the last day of the month
preceding the hiring date, or
``(ii) who--
``(I) was receiving unemployment
compensation but exhausted all rights
to such compensation, and
``(II) has remained unemployed
during the period beginning on the date
such rights were exhausted and ending
on the day before the hiring date.
``(B) Employment in defense or shipbuilding
industry.--For purposes of subparagraph (A), an
individual shall be treated as employed--
``(i) in the defense industry if such
individual's services were performed pursuant
to any defense contract (as defined in section
48(c)(4)), and
``(ii) in the shipbuilding industry if such
individual's services were performed pursuant
to any contract for the construction or
reconstruction of any ship or any subcontract
in connection with such construction or
reconstruction.
``(C) Unemployment compensation.--For purposes of
this paragraph, the term `unemployment compensation'
has the meaning given such term by section 85(b).''
(c) Certain Individuals Not Eligible.--Section 51(i) of such Code
(relating to certain individuals ineligible) is amended by adding at
the end the following new paragraph:
``(4) Special rules for long-term unemployed defense and
shipbuilding industry workers.--No wages shall be taken into
account under subsection (a) with respect to any long-term
unemployed defense or shipbuilding industry worker (as defined
in subsection (d)(17)) unless--
``(A) notwithstanding paragraph (3), the individual
is employed by the employer at least 120 days, and
``(B) the employer certifies on the return of tax
for the taxable year for which credit is claimed that--
``(i) the individual was hired after the
employer took reasonable actions to
specifically recruit long-term unemployed
defense or shipbuilding industry workers, and
``(ii) the individual was not hired to
replace an employee who was involuntarily
separated from employment by the employer
without cause.''
(d) Credit for Hiring Long-Term Unemployed Defense or Shipbuilding
Industry Workers Made Permanent.--Paragraph (4) of section 51(c) of
such Code is amended by adding at the end thereof the following new
sentence: ``The preceding sentence shall not apply to wages paid or
incurred to any long-term unemployed defense or shipbuilding industry
worker (as defined in subsection (d)(17)).''
(e) Effective Date.--The amendments made by this section shall
apply to individuals hired on and after the date of the enactment of
this Act.
SEC. 2. TECHNOLOGY TRANSFER TAX 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 thereof the following new paragraph:
``(4) in the case of an eligible taxpayer (as defined in
section 48(c)), the nondefense production and manufacturing
equipment credit.''
(b) Amount of Credit.--Section 48 of such Code is amended by adding
at the end thereof the following new subsection:
``(c) Nondefense Production and Manufacturing Equipment Credit.--
``(1) In general.--For purposes of section 46, in the case
of an eligible taxpayer, the nondefense production and
manufacturing equipment 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 qualified nondefense
production and manufacturing equipment property
placed in service by the taxpayer during such
taxable year, plus
``(ii) the applicable percentage of the
cost of each used qualified nondefense
production and manufacturing equipment 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 paragraph.
``(3) Qualified nondefense production and manufacturing
equipment property.--For purposes of this subsection, the term
`qualified nondefense production and manufacturing equipment
property' means any property--
``(A) which is used as an integral part of the
manufacture or production of nondefense tangible
personal property,
``(B) which is tangible property to which section
168 applies, and
``(C) which is section 1245 property (as defined in
section 1245(a)(3)).
``(4) Eligible taxpayer.--
``(A) In general.--A taxpayer is an eligible
taxpayer for purposes of this subsection if more than
50 percent of the gross revenues of such taxpayer for
the taxable year are attributable to defense contracts.
``(B) Defense contract.--For purposes of this
paragraph, the term `defense contract' means any
contract or subcontract entered into between the
taxpayer and a defense agency to provide material or
defense related operations.
``(C) Defense agency.--For purposes of this
paragraph, the term `defense agency' means the
Department of Defense, the nuclear weapons division of
the Department of Energy, the National Aeronautics and
Space Administration, the Coast Guard, and any other
agency of the Government to the extent such agency
conducts military or other defense related operations.
``(5) 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 credit to such property.
``(6) 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) Clause (ii) of section 49(a)(1)(C) of such Code is
amended by inserting ``or qualified nondefense production and
manufacturing equipment property'' after ``energy property''.
(2) Subparagraph (E) of section 50(a)(2) of such Code is
amended by inserting ``or 48(c)(4)'' before the period at the
end thereof.
(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 qualified nondefense production and
manufacturing equipment 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 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 December 31, 1992, 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
Reconciliation Act of 1990).
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