[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3144 Introduced in House (IH)]







107th CONGRESS
  1st Session
                                H. R. 3144

   To amend the Internal Revenue Code of 1986 to provide a temporary 
   incentive for investing in tangible property in the United States.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 16, 2001

 Mr. Reynolds 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 a temporary 
   incentive for investing in tangible property in 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 ``Investment Tax Credit Act of 2001''.

SEC. 2. INVESTMENT TAX CREDIT.

    (a) Allowance of Credit.--Section 46 of the Internal Revenue Code 
of 1986 (relating to amount of investment credit) is amended by 
striking ``and'' at the end of paragraph (2), by striking the period at 
the end of paragraph (3) and inserting ``, and'', and by adding at the 
end thereof the following new paragraph:
            ``(4) the investment credit.''
    (b) Amount of Credit.--Section 48 of such Code is amended by adding 
at the end thereof the following new subsection:
    ``(c) Investment Credit.--
            ``(1) In general.--For purposes of section 46, the 
        investment credit for any taxable year is an amount equal to 25 
        percent of the qualified investment for such taxable year.
            ``(2) Qualified investment.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the qualified investment for any taxable year is the 
                aggregate of--
                            ``(i) the applicable percentage of the 
                        basis of each new investment credit property 
                        placed in service by the taxpayer during such 
                        taxable year, plus
                            ``(ii) the applicable percentage of the 
                        cost of each used investment credit property 
                        placed in service by the taxpayer during such 
                        taxable year.
                    ``(B) Applicable percentage.--For purposes of 
                subparagraph (A), the applicable percentage for any 
                property shall be determined under paragraphs (2) and 
                (7) of section 46(c) (as in effect on the day before 
                the date of the enactment of the Revenue Reconciliation 
                Act of 1990).
                    ``(C) Certain rules relating to new and used 
                property made applicable.--The provisions of 
                subsections (b) and (c) of section 48 (as in effect on 
                the day before the date of the enactment of the Revenue 
                Reconciliation Act of 1990) shall apply for purposes of 
                this paragraph.
                    ``(D) Temporary duration of credit.--For purposes 
                of this subsection, property shall be treated as 
                investment credit property only--
                            ``(i) in any case in which the rules of 
                        paragraph (6) do not apply to such property, 
                        only if--
                                    ``(I) the construction, 
                                reconstruction, or erection of the 
                                property is completed by the taxpayer 
                                during the 18-month period beginning on 
                                the date of enactment of this 
                                subsection, but only to the extent of 
                                the basis attributable to the 
                                construction, reconstruction, or 
                                erection during such period, or
                                    ``(II) acquired by the taxpayer 
                                during such period and placed in 
                                service during such period, or
                            ``(ii) to which the rules of paragraph (6) 
                        apply, but only to the extent of the qualified 
                        investment with respect to qualified progress 
                        expenditures made during such period.
            ``(3) Investment credit property.--For purposes of this 
        subsection, the term `investment credit property' means--
                    ``(A) tangible personal property, or
                    ``(B) other tangible property (not including a 
                building and its structural components) but only if 
                such property--
                            ``(i) is used as an integral part of 
                        manufacturing, production, or extraction or of 
                        furnishing transportation, communications, 
                        electrical energy, gas, water, or sewage 
                        disposal services, or
                            ``(ii) constitutes a research facility used 
                        in connection with any of the activities 
                        referred to in clause (i), or
                            ``(iii) constitutes a facility used in 
                        connection with any of the activities referred 
                        to in clause (i) for the bulk storage of 
                        fungible commodities (including commodities in 
                        a liquid or gaseous state), or
                    ``(C) elevators and escalators, but only if--
                            ``(i) the construction, reconstruction, or 
                        erection of the elevator or escalator is 
                        completed by the taxpayer, or
                            ``(ii) the original use of such elevator or 
                        escalator commences with the taxpayer, or
                    ``(D) single purpose agricultural or horticultural 
                structures; or
                    ``(E) a storage facility (not including a building 
                and its structural components) used in connection with 
                the distribution of petroleum or any primary product of 
                petroleum.
        Such term includes only property to which section 168 applies 
        without regard to any useful life and any other property with 
respect to which depreciation (or amortization in lieu of depreciation) 
is allowable and having a useful life (determined as of the time such 
property is placed in service) of 3 years or more.
            ``(4) Exclusion of other property.--Rules similar to the 
        rules of paragraphs (6), (7), and (10) of section 48(a) (as in 
        effect on the day before the date of the enactment of the 
        Revenue Reconciliation Act of 1990) shall apply.
            ``(5) Coordination with other credits.--This subsection 
        shall not apply to any property to which the energy credit or 
        rehabilitation credit would apply unless the taxpayer elects to 
        waive the application of such credits to such property.
            ``(6) Certain progress expenditure rules made applicable.--
        Rules similar to rules of subsection (c)(4) and (d) of section 
        46 (as in effect on the day before the date of the enactment of 
        the Revenue Reconciliation Act of 1990) shall apply for 
        purposes of this subsection.
            ``(7) Certain rules relating to vessels made applicable.--
        Rules similar to rules of subsection (g) of section (46) (as in 
        effect on the day before the date of the enactment of the 
        Revenue Reconciliation Act of 1990) shall apply for purposes of 
        this subsection.''
    (c) Application of Other Rules.--
            (1) At risk rules.--Subparagraph (C) of section 49(a)(1) of 
        such Code is amended by striking ``and'' at the end of clause 
        (ii), by striking the period at the end of clause (iii) and 
        inserting ``, and'', and by adding at the end thereof the 
        following new clause:
                            ``(iv) the basis of any new investment 
                        credit property and the cost of any used 
                        investment credit property.''
            (2) Recapture rules.--
                    (A) Subparagraph (E) of section 50(a)(2) of such 
                Code is amended by inserting ``or 48(c)(9)'' before the 
                period at the end thereof.
                    (B) Paragraph (5) of section 50(a) of such Code is 
                amended by adding at the end thereof the following new 
                subparagraph:
                    ``(D) Special rules for certain property.--In the 
                case of any investment credit property which is 3-year 
                property (within the meaning of section 168(e))--
                            ``(i) the percentage set forth in clause 
                        (ii) of the table contained in paragraph (1)(B) 
                        shall be 66 percent,
                            ``(ii) the percentage set forth in clause 
                        (iii) of such table shall be 33 percent, and
                            ``(iii) clauses (iv) and (v) of such table 
                        shall not apply.''
    (d) Conforming Amendments.--
            (1) Section 39(d) of such Code is amended by adding at the 
        end the following new paragraph:
            ``(11) Investment tax credit.--No portion of the unused 
        business credit which is attributable to the credit determined 
        under section 48(c) (relating to investment credit) may be 
        carried to any taxable year ending before the date of enactment 
        of this paragraph.''
            (2) Section 1033(g)(3)(A) of such Code is amended by 
        inserting ``with respect to which the investment credit 
        determined under section 48(c) is or has been claimed or,'' 
        before ``with respect to which''.
            (3)(A) The section heading for section 48 of such Code is 
        amended to read as follows:

``SEC. 48. OTHER CREDITS.''

            (B) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by striking 
        the item relating to section 48 and inserting the following:

                              ``Sec. 48. Other credits.''
    (e) Effective Date.--The amendments made by this section shall 
apply to periods after the date of the enactment of this Act under 
rules similar to the rules of section 48(m) of the Internal Revenue 
Code of 1986 (as in effect on the day before the date of the enactment 
of the Revenue Reconciliation Act of 1990).
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