[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 1109 Introduced in Senate (IS)]
103d CONGRESS
1st Session
S. 1109
To amend the Internal Revenue Code of 1986 to provide that the
deduction for depreciation shall be computed on a neutral cost recovery
basis, and for other purposes.
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IN THE SENATE OF THE UNITED STATES
June 15, 1993
Mr. Pressler 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 provide that the
deduction for depreciation shall be computed on a neutral cost recovery
basis, 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.
This Act may be cited as the ``Investment Tax Incentive Act of
1993''.
SEC. 2. DEPRECIATION ADJUSTMENT FOR CERTAIN PROPERTY PLACED IN SERVICE
IN TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1992.
(a) In General.--Section 168 of the Internal Revenue Code of 1986
(relating to accelerated cost recovery system) is amended by adding at
the end thereof the following new subsection:
``(j) Deduction Adjustment To Allow Equivalent of Expensing For
Certain Property Placed in Service in Taxable Years Beginning After
December 31, 1992.--
``(1) In general.--In the case of tangible property placed
in service in a taxable year beginning after December 31, 1992,
the deduction allowable under this section with respect to such
property for any taxable year (after the taxable year during
which the property is placed in service) shall be--
``(A) the amount so allowable for such taxable year
without regard to this subsection, multiplied by
``(B) the applicable neutral cost recovery ratio
for such taxable year.
For purposes of subparagraph (A), paragraphs (1) and (2) of
section 168(b) shall be applied by substituting `150 percent'
for `200 percent'.
``(2) Applicable neutral cost recovery ratio.--For purposes
of paragraph (1), the applicable neutral cost recovery ratio
for any taxable year is the number determined by--
``(A) dividing--
``(i) the gross national product deflator
for the calendar quarter ending in such taxable
year which corresponds to the calendar quarter
during which the property was placed in service
by the taxpayer, by
``(ii) the gross national product deflator
for the calendar quarter during which the
property was placed in service by the taxpayer,
and
``(B) then multiplying the number determined under
subparagraph (A) by the number equal to 1.035 to the
nth power where `n' is the number of full years in the
period beginning on the 1st day of the calendar quarter
during which the property was placed in service by the
taxpayer and ending on the day before the beginning of
the corresponding calendar quarter ending during such
taxable year.
The applicable neutral cost recovery ratio shall not be taken
into account unless it is greater than 1. The applicable
neutral cost recovery ratio shall be rounded to the nearest
one-tenth of 1 percent.
``(3) Gross national product deflator.--For purposes of
paragraph (2), the gross national product deflator for any
calendar quarter is the implicit price deflator for the gross
national product for such quarter (as shown in the first
revision thereof).
``(4) Election not to have subsection apply.--This
subsection shall not apply to any property if the taxpayer
elects not to have this subsection apply to such property. Such
an election, once made, shall be irrevocable.''
(b) Minimum Tax Treatment.--Paragraph (1) of section 56(a) of such
Code is amended by adding at the end thereof the following new
subparagraph:
``(E) Use of Neutral Cost Recovery Ratio.--In the
case of tangible property placed in service in a
taxable year beginning after December 31, 1992, the
deduction allowable under this paragraph with respect
to such property for any taxable year (after the
taxable year during which the property is placed in
service) shall be--
``(i) the amount so allowable for such
taxable year without regard to this
subparagraph, multiplied by
``(ii) the applicable neutral cost recovery
ratio for such taxable year (as determined
under section 168(j)).
This subparagraph shall not apply to any property with
respect to which there is an election in effect not to
have section 168(j) apply.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 3. REPEAL OF SPECIAL DEPRECIATION RULES APPLICABLE UNDER THE
ADJUSTED CURRENT EARNINGS PROVISIONS OF THE MINIMUM TAX.
(a) In General.--Subparagraph (A) of section 56(g)(4) of the
Internal Revenue Code of 1986 (relating to adjustments) is amended to
read as follows:
``(A) Depreciation.--
``(i) In general.--The depreciation
deduction with respect to any property for any
taxable year beginning after December 31, 1992,
shall be the same as the depreciation deduction
allowable in computing alternative minimum
taxable income for such taxable year.
``(ii) Basis rules.--Notwithstanding clause
(i), the adjusted basis of any depreciable
property held by the taxpayer as of the
beginning of the taxpayer's first taxable year
beginning after December 31, 1992, shall be
determined as if the provisions of clause (i)
had also applied to taxable years beginning in
1990, 1991, and 1992.
``(iii) Lost basis recovered over 5
years.--The amount determined under clause (iv)
shall be allowed as a deduction ratably over
the 60-month period beginning with the first
month of the taxpayer's first taxable year
beginning after December 31, 1992.
``(iv) Amount of lost basis.--The amount
determined under this clause is the excess of--
``(I) the aggregate adjusted bases
of depreciable property held by the
taxpayer as of the beginning of the
taxpayer's first taxable year beginning
after December 31, 1992, which would
have been determined (as of such time)
under clause (i) without regard to
clause (ii), over
``(II) the aggregate adjusted bases
of such property (as of such time) as
determined under the rules of clause
(ii).''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1992.
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