[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 498 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 498

 To amend the Internal Revenue Code of 1986 to allow a credit against 
  income tax for the purchase and installation of water conservation 
                         systems on farm land.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 21, 1993

Mr. Condit (for himself and Mr. Dooley) 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 a credit against 
  income tax for the purchase and installation of water conservation 
                         systems on farm land.

    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 ``Agricultural Water Conservation Act 
of 1993''.

SEC. 2. CONGRESSIONAL FINDINGS.

    The Congress finds that--
            (1) the Federal Government has an historic commitment to 
        assisting areas of the Nation in need of developing adequate 
        water supplies,
            (2) water is becoming increasingly scarce and expensive in 
        many parts of the United States, which is compounded when 
        multiple years of drought occur,
            (3) in most areas of the United States, farms are 
        overwhelmingly the largest water consumers, and
            (4) it is in the national interest for farmers to implement 
        water conservation measures which are a least-cost approach to 
        addressing critical water needs and for the Federal Government 
        to promote such conservation measures.

SEC. 3. CREDIT FOR PURCHASE AND INSTALLATION OF WATER CONSERVATION 
              SYSTEMS ON FARM LAND.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to foreign tax credit, 
etc.) is amended by adding at the end the following new section:

``SEC. 30A. PURCHASE AND INSTALLATION OF WATER CONSERVATION SYSTEMS ON 
              FARM LAND.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to 75 percent of the water conservation system expenses paid or 
incurred by the taxpayer during such year.
    ``(b) Water Conservation System Expenses.--For purposes of this 
section--
            ``(1) In general.--The term `water conservation system 
        expenses' means expenses for the purchase and installation of 
        materials or equipment which are primarily designed to 
        substantially conserve water on farm land.
            ``(2) Farm land.--The term `farm land' means land used in a 
        trade or business by the taxpayer or a tenant of the taxpayer 
        for--
                    ``(A) the production of crops, fruits, or other 
                agricultural products,
                    ``(B) the raising, harvesting, or growing of trees, 
                or
                    ``(C) the sustenance of livestock.
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) Liability for tax.--The credit allowable under 
        subsection (a) for any taxable year shall not exceed the excess 
        (if any) of--
                    ``(A) the regular tax for the taxable year, reduced 
                by the sum of the credits allowable under subpart A and 
                the preceding sections of this subpart, over
                    ``(B) the tentative minimum tax for the taxable 
                year.
            ``(2) Carryforward of unused credit.--If the amount of the 
        credit allowable under subsection (a) for any taxable year 
        exceeds the limitation under paragraph (1) for the taxable 
        year, the excess shall be carried to the succeeding taxable 
        year and added to the amount allowable as a credit under 
        subsection (a) for such succeeding taxable year.
    ``(d) Additional Limitations.--
            ``(1) Approved water conservation plan.--Subsection (a) 
        shall not apply to any expense unless--
                    ``(A) the taxpayer has in effect a water 
                conservation plan which has been reviewed and approved 
                by the Soil Conservation Service of the Department of 
                Agriculture, and
                    ``(B) such expense is consistent with such plan.
            ``(2) Drought area.--Subsection (a) shall not apply to any 
        expense unless the land on which the water conservation system 
        is installed is entirely in an area which has been identified, 
        in the taxable year or in any of the 3 preceding taxable years, 
        as an area of extreme drought severity on the Palmer Drought 
        Severity Index published by the National Oceanic and 
        Atmospheric Administration.
    ``(e) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter with respect to any expense which is taken into 
account in determining the credit under this section, and any increase 
in the basis of any property which would (but for this subsection) 
result from such expense shall be reduced by the amount of credit 
allowed under this section for such expense.''
    (b) Technical Amendment.--Subsection (a) of section 1016 of such 
Code is amended by striking ``and'' at the end of paragraph (25), by 
striking the period at the end of paragraph (26) and inserting ``; 
and'', and by adding at the end thereof the following new paragraph:
            ``(27) to the extent provided in section 30A(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 30A.''
    (c) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

                              ``Sec. 30A. Purchase and installation of 
                                        water conservation systems on 
                                        farm land.''
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act, in taxable years ending after such date.

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