[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 681 Introduced in House (IH)]
103d CONGRESS
1st Session
H. R. 681
To amend the Internal Revenue Code of 1986 to provide tax relief for
small businesses.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 27, 1993
Mrs. Johnson of Connecticut 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 relief for
small businesses.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Enhancement Act of
1993''.
TITLE I--INCREMENTAL INVESTMENT TAX CREDIT FOR PRODUCTIVE PROPERTY
SEC. 101. INCREMENTAL 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 thereof the following new paragraph:
``(4) in the case of a small business (as defined in
section 48(c)), 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, in the case
of a small business, the general investment credit for any
taxable year is an amount equal to 10 percent of the excess (if
any) of--
``(A) the qualified investment for such taxable
year, over
``(B) the qualified investment for the taxable year
which begins in 1991 or 1992, whichever is selected by
the taxpayer.
The selection under subparagraph (B), once made, shall be
irrevocable.
``(2) Small business.--For purposes of this subsection, the
term `small business' means any taxpayer actively engaged in a
trade or business if the average number of individuals employed
by the taxpayer during the taxable year is less than 500.
``(3) 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 productive property placed in
service by the taxpayer during such taxable
year, plus
``(ii) the applicable percentage of the
cost of each used productive 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.
``(4) Productive property.--For purposes of this
subsection, the term `productive property' means any tangible
property to which section 168 applies (not including a building
and its structural components)--
``(A) which is used as an integral part of
manufacturing, production, or extraction, or
``(B) which is a motor vehicle.
``(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 credits 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.
``(7) Special rules.--
``(A) Controlled groups.--For purposes of this
subsection--
``(i) all taxpayers treated as a single
employer under subsection (a) or (b) of section
52 shall be treated as a single taxpayer, and
``(ii) the credit (if any) determined under
this subsection with respect to each such
taxpayer shall be its proportionate share of
the basis of the productive property giving
rise to such credit.
``(B) Allocation of basis adjustment.--The
reduction required by section 50(c) for any taxable
year shall be allocated among the productive property
in proportion to the respective bases of such property.
``(C) Recapture.--In applying section 50(a) to any
property which ceases to be productive property, the
credit determined under this subsection with respect to
such property shall be treated as being equal to 10
percent of the lesser of--
``(i) the excess referred to in paragraph
(1) for the taxable year in which such property
was determined, or
``(ii) the qualified investment in such
property which was taken into account under
paragraph (1).''
(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 thereof the following new
clause:
``(iv) the basis of any new productive
property and the cost of any used productive
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 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 productive 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 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).
TITLE II--INCREASE IN EXPENSING FOR PRODUCTIVE PROPERTY
SEC. 201. CHANGES IN ELECTION TO EXPENSE CERTAIN DEPRECIABLE BUSINESS
ASSETS.
(a) Increase in Limit for Productive Equipment.--Paragraph (1) of
section 179(b) of the Internal Revenue Code of 1986 (relating to
election to expense certain depreciable property) is amended by
striking ``$10,000.'' and inserting ``$10,000 ($50,000 in the case of
section 179 property for use as an integral part of manufacturing,
production, or extraction).''
(b) Medium-Sized Companies Eligible.--Paragraph (2) of section
179(b) of such Code is amended by striking ``$200,000.'' and inserting
``$200,000 ($1,000,000 in the case of section 179 property for use as
an integral part of manufacturing, production, or extraction).''
(c) Deductions Under Section 179 Excluded From Minimum Tax.--
(1) Paragraph (1) of section 56(a) of such Code is amended
by adding at the end thereof the following new subparagraph:
``(E) Special rule for section 179 property.--In
the case of section 179 property (as defined in section
179(d)), the deduction allowable under section 179
shall be treated as allowable under the alternative
system of section 168(g).''
(2) Subparagraph (A) of section 56(g)(4) of such Code is
amended by adding at the end thereof the following new clause:
``(vi) Special rule for section 179
property.--In the case of section 179 property
(as defined in section 179(d)), the deduction
allowable under section 179 shall be treated as
allowable under the alternative system of
section 168(g).''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
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