[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2347 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2347

  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

                             June 24, 1999

  Mr. English (for himself, Mr. Hill of Montana, and Mr. Nethercutt) 
 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.--Paragraph (3) of section 460(b) of the Internal 
Revenue Code of 1986 (relating to special rules for look-back method) 
is amended by adding at the end the following new subparagraph:
                    ``(C) Look-back method not to apply to construction 
                contracts.--Paragraph (1)(B) shall not apply to any 
                construction contract (as defined in subsection 
                (e)(4)).''
    (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, 1999.
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