[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2722 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2722

  To amend the Internal Revenue Code of 1986 to provide that the look-
 back method shall not apply to construction contracts required to use 
                  the percentage of completion method.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 6, 1995

 Mr. Christensen 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 that the look-
 back method shall not apply to construction contracts required to use 
                  the percentage of completion method.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. FINDINGS.

    The Congress finds that--
            (1) eliminating the application of the look-back method to 
        nonresidential construction contracts is revenue neutral and 
        will save the time and money being expended by construction 
        contractors in applying such method,
            (2) the look-back method is not needed as an enforcement 
        mechanism in the construction industry, and
            (3) the look-back method does not provide the relief from 
        the percentage of completion method that it was intended to 
        provide to construction contractors because compliance costs 
        far outweigh overpayments repaid to taxpayers by the Internal 
        Revenue Service.

SEC. 2. LOOK-BACK METHOD NOT TO APPLY TO CONSTRUCTION CONTRACTS 
              REQUIRED TO USE THE PERCENTAGE OF COMPLETION METHOD.

    (a) In General.--Subparagraph (B) of section 460(b)(3) of the 
Internal Revenue Code of 1986 (relating to look-back method not to 
apply to certain contracts) is amended by striking ``shall not apply to 
any contract'' and inserting ``shall not apply to any construction 
contract (as defined in subsection (e)(4)) and to any other contract''.
    (b) Minimum Tax Treatment.--Paragraph (3) of section 56(a) of such 
Code is amended by striking the second sentence and inserting the 
following new sentence: ``For purposes of applying the preceding 
sentence to a construction contract (as defined in section 460(e)(4)), 
section 460(b)(1)(B) shall not apply.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending on or after December 31, 1994.
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