[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1186 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1186

 To amend the Internal Revenue Code of 1986 to repeal the alternative 
                              minimum tax.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 9, 2005

Mr. English of Pennsylvania (for himself, Mr. McCrery, Mr. Hulshof, Mr. 
Culberson, Mr. Simmons, Mr. McCaul of Texas, Mr. Shaw, Mr. Gillmor, Mr. 
 King of New York, Mr. Fossella, Mr. Hostettler, Mr. Baker, Mr. Paul, 
  Mr. Beauprez, Mr. Norwood, Ms. Hart, Mr. Sensenbrenner, and Mr. Sam 
Johnson of Texas) 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 repeal the alternative 
                              minimum tax.

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

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Alternative 
Minimum Tax Repeal Act of 2005''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.

SEC. 2. ALTERNATIVE MINIMUM TAX.

    (a) In General.--Part VI of subchapter A of chapter 1 (relating to 
alternative minimum tax) is hereby repealed.
    (b) Use of Credit for Prior Year Minimum Tax Liability.--Subsection 
(c) of section 53 is amended to read as follows:
    ``(c) Limitations.--The credit allowable under subsection (a) for 
any taxable year shall not exceed 90 percent of the regular tax 
liability of the taxpayer for such taxable year reduced by the sum of 
the credits allowable under subparts A, B, D, E, and F of this part.''.
    (c) Conforming Amendments.--
            (1) Subparagraph (B) of section 1(g)(7) (relating to 
        election to claim certain unearned income of child on parent's 
        return) is amended--
                    (A) by inserting ``and'' at the end of clause (i),
                    (B) by striking ``and'' at the end of clause (ii) 
                and inserting a period, and
                    (C) by striking clause (iii).
            (2) Subsection (d) of section 2 (relating to taxes imposed 
        on nonresident aliens) is amended by striking ``sections 1 and 
        55'' and inserting ``section 1''.
            (3) Subsection (a) of section 5 (relating to cross 
        references relating to tax on individuals) is amended by 
        striking paragraph (4).
            (4) Subsection (d) of section 11 (relating to taxes imposed 
        on foreign corporations) is amended by striking ``the taxes 
        imposed by subsection (a) and section 55'' and inserting ``the 
        tax imposed by subsection (a)''.
            (5) Section 12 (relating to cross references relating to 
        tax on corporations) is amended by striking paragraph (7).
            (6) Subsection (b)(4) of section 23 (relating to adoption 
        expenses) is amended by striking ``plus the tax imposed by 
        section 55''.
            (7) Subsection (b)(3) of section 24 (relating to child tax 
        credit) is amended by striking ``plus the tax imposed by 
        section 55''.
            (8) Section 25(g)(1) (relating to limitation based on 
        amount of tax) is amended by striking ``plus the tax imposed by 
        section 55''.
            (9) Section 26 (relating to limitation based on tax 
        liability; definition of tax liability) is amended--
                    (A) by amending subsection (a) to read as follows:
    ``(a) Limitation Based on Amount of Tax.--The aggregate amount of 
credits allowed by this subpart (other than sections 23, 24, and 25B) 
for the taxable year shall not exceed the taxpayer's regular tax 
liability for the taxable year.'',
                    (B) in subsection (b)(2), by striking subparagraph 
                (A) and by redesignating subparagraphs (B) through (S) 
                as subparagraphs (A) through (R), respectively, and
                    (C) by striking subsection (c).
            (10) Paragraph (6) of section 29(b) (relating to credit for 
        producing fuel from a nonconventional source) is amended 
        striking ``the excess'' and all that follows and inserting 
        ``the regular tax for the taxable year reduced by the sum of 
        the credits allowable under subpart A and section 27.''
            (11) Paragraph (3) of section 30(b) (relating to credit for 
        qualified electric vehicles) is amended by striking ``the 
        excess'' and all that follows and inserting ``the regular tax 
        for the taxable year reduced by the sum of the credits 
        allowable under subpart A and sections 27 and 29.''
            (12) Subsection (c) of section 38 (relating to general 
        business credit) is amended--
                    (A) by amending paragraph (1) to read as follows:
            ``(1) In general.--The credit allowed under subsection (a) 
        for any taxable year shall not exceed the excess (if any) of--
                    ``(A) the taxpayer's net regular tax liability, 
                over
                    ``(B) 25 percent of so much of the taxpayer's net 
                regular tax liability as exceeds $25,000.
        For purposes of the preceding sentence, the term `net regular 
        tax liability' means the regular tax liability reduced by the 
        sum of the credits allowable under subparts A and B of this 
        part.'',
                    (B) in paragraph (2)(A)(ii) by striking ``credit--
                '' and all that follows and inserting ``credit, the 
                limitation under paragraph (1) shall be reduced by the 
                credit allowed under subsection (a) for the taxable 
                year (other than the empowerment zone employment credit 
                or the New York Liberty Zone business employee 
                credit).'',
                    (C) in paragraph (3)(A)(ii) by striking ``credit--
                '' and all that follows and inserting ``credit, the 
                limitation under paragraph (1) shall be reduced by the 
                credit allowed under subsection (a) for the taxable 
                year (other than the New York Liberty Zone business 
                employee credit).'',
                    (D) in paragraph (4)(A)(ii) by striking ``credits--
                '' and all that follows and inserting ``credits, the 
                limitation under paragraph (1) (as modified by 
                subclause (I)) shall be reduced by the credit allowed 
                under subsection (a) for the taxable year (other than 
                the specified credits).''.
            (13) Section 40(g)(6)(B)(iii)(II) is amended by striking `` 
        or for purposes of section 55''.
            (14) Paragraph (4) of section 45A(d) (relating to Indian 
        employment credit) is amended by striking ``for purposes'' and 
        all that follows and inserting ``for purposes of determining 
        the amount of any credit allowable under this chapter.''.
            (15) Subparagraph (B) of section 45D(g)(4) (relating to new 
        markets tax credit) is amended by striking ``or for purposes of 
        section 55''.
            (16) Subparagraph (B) of section 45F(d)(4) (relating to 
        employer-provided child care credit) is amended by striking 
        ``or for purposes of section 55''.
            (17) Subparagraph (B) of section 45H(g)(3) (relating to 
        credit for production of low sulfur diesel fuel) is amended by 
        striking ``or for purposes of section 55''.
            (18) Subsection (d) of section 53 (relating to credit for 
        prior year minimum tax liability) is amended to read as 
        follows:
    ``(d) Definitions.--For purposes of this section--
            ``(1) Net minimum tax.--The term `net minimum tax' means 
        the tax imposed by section 55.
            ``(2) Credit not allowed for exclusion preferences.--
                    ``(A) Adjusted net minimum tax.--Except as provided 
                in subparagraph (C), the adjusted net minimum tax for 
                any taxable year is--
                            ``(i) the amount of the net minimum tax for 
                        such taxable year, reduced by
                            ``(ii) the amount which would be the net 
                        minimum tax for such taxable year if the only 
                        adjustments and items of tax preference taken 
                        into account were those specified in 
                        subparagraph (B) and if section 59(a)(2) did 
                        not apply.
                    ``(B) Specified items.--The following are specified 
                in this subparagraph--
                            ``(i) the adjustments provided for in 
                        subsection (b)(1) of section 56, and
                            ``(ii) the items of tax preference 
                        described in paragraphs (1), (5) and (7) of 
                        section 57(a).
                    ``(C) Credit allowable for exclusion preferences of 
                corporations.--In the case of a corporation, the 
                adjusted net minimum tax for any taxable year is the 
                amount of the net minimum tax for such year.
            ``(3) Treatment of references.--For purposes of this 
        subsection, references to sections 55, 56, 57, and 59 shall be 
        treated as references to such sections as in effect on the day 
        before the date of the enactment of the Alternative Minimum Tax 
        Repeal Act of 2005.''.
            (19) Subsection (b) of section 59A (relating to 
        environmental tax) is amended by adding at the end the 
        following:
 ``For purposes of this subsection, references to sections 55 and 56 
shall be treated as references to such sections as in effect on the day 
before the date of the enactment of the Alternative Minimum Tax Repeal 
Act of 2005.''.
            (20)(A) Paragraph (2) of section 148(b) (relating to higher 
        yield investments) is amended by adding at the end the 
        following new flush sentence:
 ``Such term shall not include any tax-exempt bond.''
            (B) Paragraph (3) of section 148(b) is hereby repealed.
            (21) Subparagraph (B) of section 149(g)(3) (relating to 
        hedge bonds) is amended--
                    (A) in the heading, by striking ``bonds not subject 
                to minimum tax.--'' and inserting ``bonds.--'', and
                    (B) by striking all that follows ``invested in 
                bonds'' and inserting ``the interest on which is not 
                includible in gross income under section 103.''
            (22) Subsection (j) of section 168 (relating to accelerated 
        cost recovery system) is amended by striking paragraph (3).
            (23) Paragraph (2) of section 168(k) (relating to special 
        allowance for certain property acquired after September 10, 
        2001, and before January 1, 2005) is amended by striking 
        subparagraph (G).
            (24) Section 173 (relating to circulation expenditures) is 
        amended by striking ``(a) General Rule.--'' and by striking 
        subsection (b).
            (25) Subsection (f) of section 174 (relating to research 
        and experimental expenditures) is amended to read as follows:
    ``(f) Cross Reference.--For adjustments to basis of property for 
amounts allowed as deductions as deferred expenses under subsection 
(b), see section 1016(a)(14).''.
            (26) Section 199(d) (relating to income attributable to 
        domestic production activities) is amended by striking 
        paragraph (6) and redesignating paragraph (7) as paragraph (6).
            (27) Subsection (c) of section 263 (relating to capital 
        expenditures) is amended by striking ``59(e) or''.
            (28) Subsection (c) of section 263A (relating to 
        capitalization and inclusion in inventory costs of certain 
        expenses) is amended by striking paragraph (6).
            (29) Section 382(l) (relating to limitation on net 
        operating loss carryforwards and certain built-in losses 
        following ownership change) is amended by striking paragraph 
        (7) and by redesignating paragraph (8) as paragraph (7).
            (30) Section 443 (relating to returns for a period of less 
        than 12 months) is amended by striking subsection (d) and by 
        redesignating subsection (e) as subsection (d).
            (31) Section 616 (relating to development expenditures) is 
        amended by striking subsection (e).
            (32) Section 617 (relating to deduction and recapture of 
        certain mining exploration expenditures) is amended by striking 
        subsection (i).
            (33) Subsection (c) of section 641 (relating to imposition 
        of tax) is amended--
                    (A) in paragraph (2) by striking subparagraph (B) 
                and redesignating subparagraphs (C) and (D) as 
                subparagraphs (B) and (C), respectively, and
                    (B) in paragraph (3), by striking ``paragraph 
                (2)(C)'' and inserting ``paragraph (2)(B)''.
            (34) Subsections (b) and (c) of section 666 (relating to 
        accumulation distribution allocated to preceding years) are 
        each amended by striking ``(other than the tax imposed by 
        section 55)''.
            (35)(A) Subsection (a) of section 772 (relating to 
        simplified flow-through) is amended by striking paragraph (5) 
        and redesignating paragraphs (6), (7), (8), (9), (10), and (11) 
        as paragraphs (5), (6), (7), (8), (9), and (10), respectively.
            (B) Subsection (c) of section 772 is amended--
                    (i) in paragraph (2), by striking ``paragraphs 
                (3)(A) and (5)(A)'' and inserting ``paragraph (3)(A)'',
                    (ii) by striking paragraph (5), and
                    (iii) by redesignating paragraph (6) as paragraph 
                (5), and in that paragraph by striking ``paragraph (6) 
                of subsection (a)'' and inserting ``paragraph (5) of 
                subsection (a)''.
            (C) Subsection (d) of section 772 is amended--
                    (i) by striking paragraph (3) and redesignating 
                paragraphs (4), (5), and (6) as paragraphs (3), (4), 
                and (5), respectively, and
                    (ii) in subparagraph (A) of paragraph (3), as so 
                redesignated, by striking ``subsection (a)(11)'' and 
                inserting ``subsection (a)(10)''.
            (36) Paragraph (2) of section 815(c) (relating to 
        distributions to shareholders from pre-1984 policyholders 
        surplus account) is amended by striking the last sentence.
            (37) Section 847 (relating to special estimated tax 
        payments) is amended--
                    (A) in paragraph (9), by striking the last 
                sentence;
                    (B) in paragraph (10), by inserting ``and'' at the 
                end of subparagraph (A), by striking subparagraph (B), 
                and by redesignating subparagraph (C) as subparagraph 
                (B).
            (38) Section 848 (relating to capitalization of certain 
        policy acquisition expenses) is amended by striking subsection 
        (i) and by redesignating subsection (j) as subsection (i).
            (39) Subsection (a) of section 860E (relating to treatment 
        of income in excess of daily accruals on residual interests) is 
        amended by striking paragraph (4).
            (40) Section 860J (relating to non-FASIT losses not to 
        offset certain FASIT inclusions) is amended by striking 
        subsection (c) and redesignating subsection (d) as subsection 
        (c).
            (41) Paragraph (1) of section 871(b) (relating to tax on 
        nonresident alien individuals) is amended by striking ``or 
        55''.
            (42) Subsection (b) of section 877 (relating to 
        expatriation to avoid tax) is amended by striking ``or 55''.
            (43) Paragraph (1) of section 882(a) (relating to tax on 
        income of foreign corporations connected with United States 
        business) is amended by striking ``55,''.
            (44) Subsection (a) of section 897 (relating to disposition 
        of investment in United States real property) is amended to 
        read as follows:
    ``(a) Treatment as Effectively Connected With United States Trade 
or Business.--For purposes of this title, gain or loss of a nonresident 
alien individual or a foreign corporation from the disposition of a 
United States real property interest shall be taken into account--
            ``(1) in the case of a nonresident alien individual, under 
        section 871(b)(1), or
            ``(2) in the case of a foreign corporation, under section 
        882(a)(1),
as if the taxpayer were engaged in a trade or business within the 
United States during the taxable year and as if such gain or loss were 
effectively connected with such trade or business.''.
            (45) Subsection (k) of section 904 (relating to limitation 
        on credit) is amended to read as follows:
    ``(k) Cross Reference.--For increase of limitation under subsection 
(a) for taxes paid with respect to amounts received which were included 
in the gross income of the taxpayer for a prior taxable year as a 
United States shareholder with respect to a controlled foreign 
corporation, see section 960(b).''.
            (46) Paragraph (1) of section 962(a) (relating to election 
        by individuals to be subject to tax at corporate rates) is 
        amended--
                    (A) by striking ``sections 1 and 55'' and inserting 
                ``section 1'', and
                    (B) by striking ``sections 11 and 55'' and 
                inserting ``section 11''.
            (47) Paragraph (1) of section 965(e) (relating to temporary 
        dividends received deduction) is amended by striking 
        ``determining--'' and all that follows and inserting 
        ``determining the amount of any credit allowable under this 
        chapter.''.
            (48) Paragraph (20) of section 1016(a) (relating to 
        adjustments to basis) is amended by inserting ``, as in effect 
        on the day before the date of the enactment of the Alternative 
        Minimum Tax Repeal Act of 2005'' after ``preferences)''.
            (49) Paragraph (4) of section 1260(b) (relating to gains 
        from constructive ownership transactions) is amended by 
        striking ``for purposes'' and all that follows and inserting 
        ``for purposes of determining the amount of any credit 
        allowable under this chapter.''
            (50) Paragraph (1) of section 1397E(c) (relating to credit 
        to holders of qualified zone academy bonds) is amended by 
        striking ``plus the tax imposed by section 55''.
            (51) Subsection (f) of section 1400I (relating to 
        commercial revitalization deduction) is amended by striking 
        paragraph (4).
            (52) Paragraph (2) of section 1400L(b) (relating to tax 
        benefits for New York Liberty Zone) is amended by striking 
        subparagraph (E).
            (53) Subsection (a) of section 1561 (relating to 
        limitations on certain multiple tax benefits in the case of 
        certain controlled corporations) is amended by striking the 
        last sentence.
            (54) Subparagraph (B) of section 6015(d)(2) (relating to 
        relief from joint and several liability on joint return) is 
        amended by striking ``or 55''.
            (55) Subparagraph (A) of section 6425(c)(1) (defining 
        income tax liability) is amended--
                    (A) by inserting ``plus'' at the end of clause (i), 
                and
                    (B) by striking clause (ii) and redesignating 
                clause (iii) as clause (ii).
            (56) Section 6654(d)(2) (relating to failure by individual 
        to pay estimated income tax) is amended--
                    (A) in clause (i) of subparagraph (B), by striking 
                ``, alternative minimum taxable income,'', and
                    (B) in clause (i) of subparagraph (C), by striking 
                ``, alternative minimum taxable income,''.
            (57) Subparagraph (A) of section 6655(g)(1) (relating to 
        failure by corporation to pay estimated income tax) is 
        amended--
                    (A) by striking clause (ii), and
                    (B) by redesignating clauses (iii) and (iv) as 
                clauses (ii) and (iii), respectively.
            (58) Subparagraph (C) of section 6662(e)(3) (relating to 
        imposition of accuracy-related penalty) is amended by inserting 
        ``, as in effect on the day before the date of the enactment of 
        the Alternative Minimum Tax Repeal Act of 2005'' after 
        ``55(c)''.
            (59) Paragraph (3) of section 7874(e) (relating to rules 
        relating to expatriated entities and their foreign parents) is 
        amended to read as follows:
            ``(3) Coordination with section 172.--Rules similar to the 
        rules of section 860E(a)(3) shall apply for purposes of 
        subsection (a). ''.
    (d) Clerical Amendment.--The table of parts for subchapter A of 
chapter 1 is amended by striking the item relating to part VI.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.
                                 <all>