[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2138 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2138

  To amend the Internal Revenue Code of 1986 to extend and modify the 
 credits for businesses operating in Puerto Rico and other possessions 
                         of the United States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 10, 1999

Mr. Crane (for himself, Mr. Rangel, Mr. Romero-Barcelo, and Mr. Weller) 
 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 extend and modify the 
 credits for businesses operating in Puerto Rico and other possessions 
                         of the United States.

    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 ``Puerto Rico Economic Activity Credit 
Improvement Act of 1999''.

SEC. 2. MODIFICATIONS OF PUERTO RICO ECONOMIC ACTIVITY CREDIT.

    (a) Credit Not Limited to Existing Claimants.--Subsection (a) of 
section 30A of the Internal Revenue Code of 1986 is amended by striking 
paragraphs (2) and (3) and inserting the following new paragraphs:
            ``(2) Qualified domestic corporation.--For purposes of 
        paragraph (1), the term `qualified domestic corporation' means 
        a domestic corporation with respect to which section 
        936(a)(4)(B) does not apply for the taxable year.
            ``(3) Separate application.--For purposes of determining 
        the amount of the credit allowed under this section, this 
        section (and so much of section 936 as relates to this section) 
        shall be applied separately with respect to Puerto Rico.''
    (b) Repeal of Base Period Cap.--Section 30A(a)(1) of such Code is 
amended by striking the last sentence.
    (c) Application of Credit.--Section 30A(g) of such Code is amended 
to read as follows:
    ``(g) Application of Section.--
            ``(1) In general.--This section shall apply to taxable 
        years beginning after December 31, 1995, and before the 
        termination date.
            ``(2) Termination date.--For purposes of paragraph (1)--
                    ``(A) In general.--The termination date is the 
                first day of the 4th calendar year following the close 
                of the first period for which a certification is issued 
                by the Secretary under subparagraph (B).
                    ``(B) Certification.--
                            ``(i) In general.--The Secretary shall 
                        issue a certification under this subparagraph 
                        for the first 3-consecutive calendar year 
                        period beginning after December 31, 1999, for 
                        which the Secretary determines that Puerto Rico 
                        has met the requirements of clause (ii) for 
                        each calendar year within the period.
                            ``(ii) Requirements.--The requirements of 
                        this clause are met with respect to Puerto Rico 
                        for any calendar year if--
                                    ``(I) the average monthly rate of 
                                unemployment in Puerto Rico does not 
                                exceed 150 percent of the average 
                                monthly rate of unemployment for the 
                                United States for such year,
                                    ``(II) the per capita income of 
                                Puerto Rico is at least 66 percent of 
                                the per capita income of the United 
                                States, and
                                    ``(III) the poverty level within 
                                Puerto Rico does not exceed 30 
                                percent.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 3. COMPARABLE TREATMENT FOR OTHER CREDITS.

    (a) Credit Not Limited to Existing Claimants.--
            (1) Subparagraph (A) of section 936(j)(2) of the Internal 
        Revenue Code of 1986 is amended to read as follows:
                    ``(A) Economic activity credit.--The credit 
                determined under subsection (a)(1)(A)--
                            ``(i) with respect to a possession other 
                        than Puerto Rico, and
                            ``(ii) for a taxpayer to which subsection 
                        (a)(4)(B) does not apply,
                shall be allowed for taxable years beginning after 
                December 31, 1995, and before January 1, 2002.''
            (2) Paragraphs (2)(B)(i) and (8)(A) of section 936(j) of 
        such Code are each amended by striking ``an existing claimant'' 
        and inserting ``a taxpayer''.
    (b) Additional Restricted Credit Not Limited to Existing Claimants; 
Repeal of Base Period Cap.--
            (1) In general.--Subparagraph (A) of section 936(j)(3) of 
        such Code is amended to read as follows:
                    ``(A) In general.--The credit under subsection 
                (a)(1)(A) shall be allowed for the period beginning 
                with the first taxable year after the last taxable year 
                to which subparagraph (A) or (B) of paragraph (2), 
                whichever is appropriate, applied and ending with the 
                last taxable year beginning before January 1, 2006.''
            (2) Conforming amendments.--
                    (A) Subsection (j) of section 936 of such Code is 
                amended by striking paragraphs (4), (5), (6), (7), and 
                (9) and by redesignating paragraphs (8) and (10) as 
                paragraphs (4) and (5), respectively.
                    (B) Paragraph (5) of section 936(j) of such Code 
                (as redesignated by subparagraph (A)) is amended to 
                read as follows:
            ``(5) Separate application to each possession.--For 
        purposes of determining the amount of the credit allowed under 
        this section, this subsection (and so much of this section as 
        relates to this subsection) shall be applied separately with 
        respect to each possession.''
    (c) Application of Credit.--
            (1) In general.--Section 936(j)(3)(A) of such Code (as 
        amended by subsection (b)) is amended by striking ``January 1, 
        2006'' and inserting ``the termination date (as defined in 
        paragraph (6))''.
            (2) Certain other possessions.--Section 936(j)(4)(A) of 
        such Code (as redesignated by subsection (b)) is amended by 
        striking ``January 1, 2006'' and inserting ``the termination 
        date (as defined in paragraph (6))''.
            (3) Termination date.--Section 936(j) of such Code (as 
        amended by subsection (b)) is amended by adding at the end the 
        following new paragraph.
            ``(6) Termination date.--For purposes of paragraphs (3)(A) 
        and (4)(A)--
                    ``(A) In general.--The termination date for any 
                possession is the first day of the 4th calendar year 
                following the close of the first period for which a 
                certification is issued by the Secretary under 
                subparagraph (B).
                    ``(B) Certification.--
                            ``(i) In general.--The Secretary shall 
                        issue a certification for a possession under 
                        this subparagraph for the first 3-consecutive 
                        calendar year period beginning after December 
                        31, 1999, for which the Secretary determines 
                        that the possession has met the requirements of 
                        clause (ii) for each calendar year within the 
                        period.
                            ``(ii) Requirements.--The requirements of 
                        this clause are met with respect to a 
                        possession for any calendar year if--
                                    ``(I) the average monthly rate of 
                                unemployment in the possession does not 
                                exceed 150 percent of the average 
                                monthly rate of unemployment for the 
                                United States for such year,
                                    ``(II) the per capita income of the 
                                possession is at least 66 percent of 
                                the per capita income of the United 
                                States, and
                                    ``(III) the poverty level within 
                                the possession does not exceed 30 
                                percent.''
    (d) Election Not To Claim Reduced Credit.--Clause (ii) of section 
936(j)(2)(B) of such Code is amended--
            (1) by striking ``1997'' in the heading and inserting 
        ``2005'', and
            (2) by striking ``unless'' in the text and all that follows 
        and inserting ``unless it is revoked for a taxable year before 
        the taxpayer's first taxable year beginning in 2006 and applies 
        to the taxable year for which revoked and all subsequent 
        taxable years.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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