[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 858 Introduced in Senate (IS)]
103d CONGRESS
1st Session
S. 858
To amend the Internal Revenue Code of 1986 to modify the alternative
minimum tax system, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 30 (legislative day, April 19), 1993
Mr. Boren (for himself and Mr. Danforth) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to modify the alternative
minimum tax system, 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. SHORT TITLE; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Minimum Tax Reform
Act of 1993''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. DEPRECIATION ADJUSTMENT USED IN COMPUTING ALTERNATIVE MINIMUM
TAXABLE INCOME.
(a) 150-Percent Declining Balance Method.--
(1) In general.--Paragraph (1) of section 56(a) (relating
to depreciation) is amended to read as follows:
``(1) Depreciation.--
``(A) 150-percent declining balance method.--
``(i) In general.--In the case of property
not described in clause (ii), the depreciation
deduction allowable under section 167 shall be
determined as provided in section 168(a),
except that the applicable depreciation method
under section 168(a)(1) shall be--
``(I) the 150-percent declining
balance method,
``(II) switching to the straight
line method for the 1st taxable year
for which using the straight line
method with respect to the adjusted
basis as of the beginning of the year
will yield a higher allowance.
``(ii) Property not using 150-percent
method.--Property described in this clause is
section 1250 property (as defined in section
1250(c)) or any other property if the
depreciation deduction determined under section
168 with respect to such other property for
purposes of the regular tax is determined by
using the straight line method.
``(B) Normalization rules.--With respect to public
utility property described in section 168(i)(10), the
Secretary shall prescribe the requirements of a
normalization method of accounting for this section.''.
(2) No adjustment for adjusted current earnings system.--
Clause (i) of section 56(g)(4)(A) (relating to depreciation
adjustments for computing adjusted current earnings) is amended
by adding at the end the following new sentence: ``The
preceding sentence shall not apply to property placed in
service in taxable years beginning after December 31, 1992, and
the depreciation deduction with respect to such property shall
be determined under the rules of subsection (a)(1)(A).''.
(b) Exception for Environmental Property.--
(1) In general.--Section 56(a)(1) (relating to depreciation
adjustments), as amended by subsection (a)(1), is amended by
adding at the end the following new subparagraph:
``(C) Environmental improvement assets.--This
paragraph shall not apply to environmental improvement
assets (as defined in section 59(k)).''.
(2) Environmental improvement assets.--Section 59 (relating
to definition and special rules) is amended by adding at the
end the following new subsection:
``(k) Environmental Improvement Assets.--
``(1) In general.--For purposes of section 56(a)(1)(B), the
term `environmental improvement asset' means tangible property
which is--
``(A) of a character subject to the allowance for
depreciation provided in section 167;
``(B) used for, or is functionally related to
property used for, one or more of the following
purposes--
``(i) source reduction,
``(ii) solid waste minimization,
``(iii) waste conversion or recycling,
``(iv) reduction of environmental hazards,
``(v) compliance with environmental
permits, rules, and similar requirements,
including requirements with respect to noise
pollution such as the reduction of aircraft
noise level to stage 3 noise level (as defined
in 14 CFR Sec. 36.1(f)(5)),
``(vi) prevention, containment or control
of unplanned releases, or
``(vii) the manufacture, distribution and
sale of alternate fuels and blending stocks or
fuel additives for reformulated fuels, and
``(C) except in the case of property used for the
reduction of aircraft noise levels described in
subparagraph (B)(v), located and used exclusively in
the United States during the taxable year.
If only a portion of property described in subparagraphs (A)
and (C) is described in subparagraph (B), such portion shall be
treated as an environmental improvement asset.
``(2) Other definitions.--For purposes of this subsection--
``(A) Source reduction.--The term `source
reduction' means reduction of the amount of regulated
substances or other pollutants from fixed or mobile
sources released into the environment if such reduction
reduces hazards to public health or environment.
``(B) Solid waste minimization.--The term `solid
waste minimization' means the reduction in the
generation of, or the recovery of commercially usable
products from, residual materials which are classified
as, or which if disposed would be classified as, solid
wastes (within the meaning of the Resource Conservation
and Recovery Act).
``(C) Waste conversion or recycling.--The term
`waste conversion or recycling' means the processing or
conversion of liquid, solid, or gaseous wastes into
fuel, energy, or other commercially usable products,
and the production of such products if production
occurs at the same facility as the conversion.
``(D) Abatement of environmental hazards.--The term
`abatement of environmental hazards' includes the
abatement, reduction, monitoring, or stabilization of
potential human exposure to toxic chemicals, hazardous
or extremely hazardous substances, or harmful
radiation.
``(E) Unplanned releases.--The term `unplanned
releases' means any release of regulated substances
(except federally permitted releases), including indoor
releases.
``(F) Regulated substance.--The term `regulated
substance' includes any substance the release or
emission of which is prohibited, limited, or regulated
by Federal or State law or by Federal regulations (as
determined without regard to whether a particular
release would have been prohibited or limited).
``(G) Release.--The term `release' means any
spilling, leaking, pouring, discharging, escaping,
dumping, or disposing into the environment, including
the abandonment or discarding of barrels or other
closed receptacles.''.
(c) Effective Date.--The amendments made by this section shall
apply to property placed in service in taxable years beginning after
December 31, 1992.
SEC. 3. PRE-1993 MINIMUM TAX ALLOWED AS CREDIT AGAINST MINIMUM TAX FOR
CERTAIN TAXPAYERS.
(a) In General.--Section 53(c) (relating to limitation) is amended
by adding at the end the following new paragraph:
``(2) Special rule for certain taxpayers with pre-1993
unused minimum tax credits.--
``(A) In general.--If a taxpayer had an unused
minimum tax credit for at least 3 of the taxable years
in the testing period, then, subject to the limitation
of subparagraph (B), the limitation under paragraph (1)
for any taxable year following the testing period shall
in no event be less than 50 percent of the excess (if
any) of--
``(I) the tentative minimum tax for
such taxable year, over
``(II) the sum of the credits
allowable under subparts A, B, D, E,
and F of this part.
``(B) Limitation.--
``(i) In general.--The aggregate increases
in the limitation under paragraph (1) by reason
of subparagraph (A) shall not exceed the pre-
1993 unused minimum tax credits.
``(ii) Ordering rule.--For purposes of
clause (i), any credit under subsection (a) for
taxable years following the testing period
shall be treated as allocated to pre-1993
unused minimum tax credits until such credits
are used up.
``(C) Definitions.--For purposes of this
paragraph--
``(i) Testing period.--The term `testing
period' means the 5-taxable year period ending
with the taxpayer's last taxable year beginning
in 1992.
``(ii) Pre-1993 unused minimum tax
credits.--The term `pre-1993 unused minimum tax
credits' means the credits allowable under
subsection (a) remaining unused as of the close
of the testing period.''.
(b) Conforming Amendments.--Section 53(c) (as in effect before the
amendment made by subsection (a)) is amended--
(1) by striking ``The'' and inserting:
``(1) In general.--Except as provided in paragraph (2),
the'', and
(2) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 4. ALLOWANCE OF GENERAL BUSINESS CREDIT AGAINST PORTION OF MINIMUM
TAX.
(a) In General.--Subparagraph (A) of section 38(c)(1) (relating to
limitation based on amount of tax) is amended by inserting ``75 percent
of'' before ``the tentative minimum tax''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 1992.
<all>