[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 461 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 461
To amend the Internal Revenue Code of 1986 to allow accelerated
depreciation for equipment used to manufacture advanced materials or to
develop advanced technologies, to reduce capital gains taxes, and to
impose a minimum tax on foreign and foreign-owned corporations
operating in the United States.
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IN THE HOUSE OF REPRESENTATIVES
January 6, 1993
Mr. Hunter 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 allow accelerated
depreciation for equipment used to manufacture advanced materials or to
develop advanced technologies, to reduce capital gains taxes, and to
impose a minimum tax on foreign and foreign-owned corporations
operating 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. 3-YEAR DEPRECIABLE LIFE FOR SEMICONDUCTOR MANUFACTURING
EQUIPMENT AND EQUIPMENT USED TO MANUFACTURE ADVANCED
MATERIALS OR TO DEVELOP ADVANCED TECHNOLOGIES.
(a) In General.--Subparagraph (A) of section 168(e)(3) of the
Internal Revenue Code of 1986 (relating to classification of property)
is amended by striking ``and'' at the end of clause (i), by striking
the period at the end of clause (ii) and inserting a comma, and by
adding at the end thereof the following:
``(iii) any semiconductor manufacturing
equipment, and
``(iv) any equipment used to manufacture
advanced materials or to develop advanced
technologies.
Clause (iv) shall not apply if the taxpayer elects not
to apply such clause. Such an election shall apply to
the taxable year for which made and all subsequent
taxable years and, once made, shall be irrevocable.''
(b) Advanced Materials and Technologies.--Subsection (e) of section
168 of such Code (relating to classification of property) is amended by
adding at the end thereof the following new paragraph:
``(5) Advanced materials and technologies.--For purposes of
paragraph (3)(A)(iv)--
``(A) In general.--The determination of whether any
material is an advanced material or whether any
technology is an advanced technology shall be made as
of the date the equipment referred to in such paragraph
is placed in service.
``(B) Initial list of advanced materials and
technologies.--
``(i) In general.--The term `advanced
material' and `advanced technology' mean any
material or technology listed in clause (ii)
and determined by the Secretary to be an
advanced material or technology.
``(ii) Initial list.--
Advanced structural materials
Electronic and photonic materials
Biotechnologies
Materials processing
Environmental technologies
Design and engineering tools
Commercialization and production systems
Advanced process equipment
Networks and communications
Powertrain
Propulsion
``(C) Modifications to list.--Materials and
technologies may be added to or deleted from the list
in subparagraph (B)(ii) based on recommendations of
experts selected by the Secretary. Any deletion from
such list shall not take effect before the date which
is 5 years after the date the decision to make such
deletion is published in the Federal Register.''
(b) Conforming Amendments.--
(1) Subparagraph (B) of section 168(e)(3) of such Code is
amended by striking clause (ii) and by redesignating the
succeeding clauses accordingly.
(2) Subparagraph (B) of section 168(g)(3) of such Code is
amended by striking the following:
``(B)(ii) ....................... 5''
and inserting in lieu thereof the following:
``(A)(iii) ........................3
``(A)(iv) .........................3.''
(c) Effective Date.--The amendments made by this section shall
apply to equipment placed in service after the date of the enactment of
this Act.
SEC. 2. REDUCTION IN INDIVIDUAL CAPITAL GAINS RATE.
(a) General Rule.--Subsection (h) of section 1 of the Internal
Revenue Code of 1986 (relating to maximum capital gains rate) is
amended to read as follows:
``(h) Maximum Capital Gains Rate.--
``(1) In general.--If a taxpayer has a net capital gain for
any taxable year, then the tax imposed by this section shall
not exceed the sum of--
``(A) a tax computed at the rates and in the same
manner as if this subsection had not been enacted on
the taxable income reduced by the net capital gain,
plus
``(B) a tax equal to the sum of--
``(i) 7.5 percent of so much of the net
capital gain as does not exceed--
``(I) the maximum amount of taxable
income to which the 15-percent rate
applies under the table applicable to
the taxpayer, reduced by
``(II) the taxable income to which
subparagraph (A) applies, plus
``(ii) 15 percent of the net capital gain
in excess of the net capital gain to which
clause (i) applies.
``(2) Transitional rule.--In the case of a taxable year
which includes the date of the enactment of this paragraph, the
amount of the net capital gain for purposes of paragraph (1)
shall not exceed the net capital gain determined by only taking
into account gains and losses properly taken into account for
the portion of the taxable year after such date.''
(b) Technical Amendments.--
(1) Paragraph (1) of section 170(e) of such Code is amended
by striking ``the amount of gain'' in the material following
subparagraph (B)(ii) and inserting ``13/28 (19/34 in the case
of a corporation) of the amount of gain''.
(2)(A) The second sentence of section 7518(g)(6)(A) of such
Code is amended by striking ``28 percent (34 percent in the
case of a corporation)'' and inserting ``15 percent''.
(B) The second sentence of section 607(h)(6)(A) of the
Merchant Marine Act, 1936, is amended by striking ``28 percent
(34 percent in the case of a corporation)'' and inserting ``15
percent''.
(c) Effective Date.--The amendments made by this section shall
apply to sales and exchanges occurring after the date of the enactment
of this Act in taxable years ending after such date.
SEC. 3. REDUCTION IN CORPORATE CAPITAL GAINS RATE.
(a) General Rule.--Section 1201 of the Internal Revenue Code of
1986 (relating to alternative tax for corporations) is amended by
redesignating subsection (b) as subsection (c), and by striking
subsection (a) and inserting the following:
``(a) General Rule.--If for any taxable year a corporation has a
net capital gain, then, in lieu of the tax imposed by section 11, 511,
or 831(a) (whichever applies), there is hereby imposed a tax (if such
tax is less than the tax imposed by such section) which shall consist
of the sum of--
``(1) a tax computed on the taxable income reduced by the
net capital gain, at the same rates and in the same manner as
if this subsection had not been enacted, plus
``(2) a tax of 15 percent of the net capital gain.
``(b) Transitional Rule.--In the case of a taxable year which
includes the date of the enactment of this paragraph, the amount of the
net capital gain for purposes of subsection (a) shall not exceed the
net capital gain determined by only taking into account gains and
losses properly taken into account for the portion of the taxable year
after such date.''
(b) Technical Amendments.--
(1) Clause (iii) of section 852(b)(3)(D) of such Code is
amended by striking ``66 percent'' and inserting ``85
percent''.
(2) Paragraphs (1) and (2) of section 1445(e) of such Code
are each amended by striking ``34 percent'' and inserting ``15
percent''.
(c) Effective Date.--The amendments made by this section shall
apply to sales and exchanges occurring after the date of the enactment
of this Act in taxable years ending after such date.
SEC. 4. REDUCTION OF MINIMUM TAX RATE ON CAPITAL GAINS.
(a) In General.--Subparagraph (A) of section 55(b)(1) of the
Internal Revenue Code of 1986 (relating to tentative minimum tax) is
amended to read as follows:
``(A) the sum of--
``(i) 15 percent of the lesser of--
``(I) the net capital gain
(determined with the adjustments
provided in this part and (to the
extent applicable) the limitations of
sections 1(h)(2) and 1201(b)), or
``(II) so much of the alternative
minimum taxable income for the taxable
year as exceeds the exemption amount,
plus
``(ii) 20 percent (24 percent in the case
of a taxpayer other than a corporation) of the
amount (if any) by which the excess referred to
in clause (i)(II) exceeds the net capital gain
(as so determined), reduced by''.
(b) Effective Date.--The amendment made by this section shall apply
to sales and exchanges occurring after the date of the enactment of
this Act in taxable years ending after such date.
SEC. 5. MINIMUM TAX ON FOREIGN AND FOREIGN-OWNED CORPORATIONS.
(a) In General.--Subchapter A of chapter 1 of the Internal Revenue
Code of 1986 (relating to determination of tax liability) is amended by
adding at the end thereof the following new part:
``PART VIII--MINIMUM TAX ON CERTAIN FOREIGN AND FOREIGN-OWNED
CORPORATIONS
``Sec. 59B. Minimum tax on certain
foreign and foreign-owned
corporations.
``SEC. 59B. MINIMUM TAX ON CERTAIN FOREIGN AND FOREIGN-OWNED
CORPORATIONS.
``(a) Imposition of Tax.--In the case of a corporation to which
this section applies, there is hereby imposed (in addition to any other
tax imposed by this subtitle) a tax equal to the excess (if any) of--
``(1) 34 percent of the product of--
``(A) 5 percent, and
``(B) the gross receipts of the taxpayer from the
sale or leasing of property manufactured by the
taxpayer or by any foreign person that is a related
party of the taxpayer, over
``(2) the aggregate tax imposed under sections 11, 55, and
1201 for such year.
``(b) Taxpayers to Which Section Applies.--This section shall apply
to a corporation for the taxable year if such corporation is--
``(1) a domestic corporation which is 25-percent foreign-
owned, or
``(2) a foreign corporation engaged in a trade or business
within the United States.
``(c) Definitions.--For purposes of this section, the term `25-
percent foreign-owned', `foreign person', and `related party' have the
respective meanings given such terms by section 6038A(c).''
(b) Clerical Amendment.--The table of parts for such subchapter A
is amended by adding at the end thereof the following new item:
``Part VIII. Minimum tax on certain
foreign and foreign-owned
corporations.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
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