Amends the Internal Revenue Code to allow corporate taxpayers with unused alternative minimum tax credits from prior years to use such credits against current-year alternative minimum tax liability. Establishes an ordering rule for applying such credit.
Eliminates intangible drilling costs and percentage depletion as tax preference items for independent producers of oil and gas properties, with limitations.
Declares that depreciation adjustments do not apply to environmental improvement assets.
HR 4476 IH 102d CONGRESS 2d Session H. R. 4476 To amend the Internal Revenue Code of 1986 to provide for the use of unused alternative minimum tax credits, to repeal certain alternative minimum tax preferences for energy production, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 17, 1992 Mr. ANDREWS 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 provide for the use of unused alternative minimum tax credits, to repeal certain alternative minimum tax preferences for energy production, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. CREDIT FOR PRIOR YEAR MINIMUM TAX. (a) IN GENERAL- Section 53(c) of the Internal Revenue Code of 1986 (relating to limitation) is amended by adding at the end thereof the following new paragraph: `(2) SPECIAL RULE FOR TAXPAYERS WITH UNUSED MINIMUM TAX CREDITS- If, during the 5-taxable year period ending with the current taxable year, a taxpayer has an unused minimum tax credit for at least 3 of the taxable years in such period (determined without regard to the application of this paragraph to the current taxable year or any such prior taxable year within such 5-taxable year period)-- `(A) paragraph (1) shall not apply to the current taxable year, and `(B) the unused minimum tax credit allowable under subsection (a) for the current taxable year shall be equal to 90 percent of the excess (if any) of-- `(i) the sum of the regular tax liability and the net minimum tax for such taxable year, over `(ii) the sum of the credits allowable under subparts A, B, D, E, and F of this part.' (b) ORDERING RULE- Section 53(d) of such Code (relating to definitions) is amended by adding at the end thereof the following new paragraph: `(3) ORDERING RULE- The credit allowed by subsection (a) shall be applied first against the excess of the taxpayer's regular tax liability over the sum of the credits allowable under subpart A, B, D, E, and F of this part for such taxable year, and second against the taxpayer's net minimum tax liability for such taxable year.' (c) CONFORMING AMENDMENTS- Section 53(c) of such Code (as in effect before the amendment made by subsection (a)) is amended-- (1) by striking `The' and inserting: `(1) IN GENERAL- Except as provided in paragraph (2), the', and (2) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B). (d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1991, and to any taxable year beginning on or before such date to the extent necessary to apply section 53(c)(2) of the Internal Revenue Code of 1986 (as added by subsection (a)). SEC. 2. REPEAL OF CERTAIN MINIMUM TAX PREFERENCES RELATING TO ENERGY PRODUCTION. (a) DEPLETION- Paragraph (1) of section 57(a) of the Internal Revenue Code of 1986 (relating to depletion) is amended by adding at the end the following new sentence: `This paragraph shall not apply to any oil and gas property (within the meaning of section 613A).' (b) SPECIAL RULES FOR INDEPENDENT PRODUCERS- (1) PREFERENCE ITEM- Section 57(a)(2) of such Code is amended by adding at the end the following new subparagraph: `(E) EXCEPTION FOR INDEPENDENT PRODUCERS- `(i) IN GENERAL- Except as provided in clause (ii), this paragraph shall not apply to any taxpayer other than an integrated oil company (as defined in section 291(b)(4)). `(ii) LIMITATION ON AGGREGATE BENEFIT- The amount of the aggregate reduction in alternative minimum taxable income by reason of clause (i) for any taxable year shall not exceed 90 percent of alternative minimum taxable income for such year determined without regard to clause (i) and the alternative tax net operating loss deduction under subsection (a)(4).' (2) ADJUSTED CURRENT EARNINGS- (A) INTANGIBLE DRILLING COSTS- Clause (i) of section 56(g)(4)(D) of such Code is amended to read as follows: `(i) INTANGIBLE DRILLING COSTS- `(I) GENERAL RULE- Except as provided in clause (ii), the adjustments provided in section 312(n)(2)(A) shall apply in the case of amounts paid or incurred in taxable years beginning after December 31, 1989. `(II) EXCEPTION FOR INDEPENDENT PRODUCERS- In the case of taxable years beginning after December 31, 1991, subclause (I) shall not apply to any taxpayer other than an integrated oil company (as defined in section 291(b)(4)).' (B) DEPLETION- Subparagraph (F) of section 56(g)(4) of such Code is amended to read as follows: `(F) DEPLETION- `(i) GENERAL RULE- The allowance for depletion with respect to any property placed in service in a taxable year beginning after 1989 shall be cost depletion. `(ii) EXCEPTION FOR OIL AND GAS PROPERTY OF NONINTEGRATED OIL AND GAS PRODUCERS- In the case of taxable years beginning after December 31, 1991, clause (i) shall not apply to property with respect to which the allowance for depletion is computed under section 613A(c).' (C) CONFORMING AMENDMENTS- (i) Subsection (h) of section 56 of such Code is repealed. (ii) Subparagraph (A) of section 56(d)(1) of such Code is amended-- (I) by striking `the deduction under subsection (h)' in clause (i) and inserting `section 57(a)(2)(E)', and (II) by striking clause (ii) and inserting: `(ii) the aggregate reduction (if any) in alternative minimum taxable income by reason of section 57(a)(2)(E).' (iii) Clause (ii) of section 59(a)(2)(A) of such Code is amended by striking `the alternative tax energy preference deduction under section 56(h)' and inserting `section 57(a)(2)(E)'. (c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 1991. SEC. 3. DEPRECIATION ADJUSTMENTS NOT TO APPLY TO ENVIRONMENTAL PROPERTY. (a) IN GENERAL- Subparagraph (B) of section 56(a)(1) of the Internal Revenue Code of 1986 (relating to depreciation adjustments) is amended to read as follows: `(B) EXCEPTION- This paragraph shall not apply to-- `(i) property described in paragraph (1), (2), (3), or (4) of section 168(f), or `(ii) environmental improvement assets (as defined in section 59(k)).' (b) ENVIRONMENTAL IMPROVEMENT ASSETS- Section 59 of such Code (relating to definition and special rules) is amended by adding at the end the following new subsection: `(k) ENVIRONMENTAL IMPROVEMENT ASSETS- `(1) IN GENERAL- For purposes of section 56(a)(1)(B)(ii), the term `environmental improvement asset' means tangible property which is-- `(A) of a character subject to the allowance for depreciation provided in section 167 or is nondepreciable real property; `(B) used for, or is functionally related to property used for, one or more of the following purposes-- `(i) source reduction, `(ii) solid waste minimization, `(iii) waste conversion or recycling, `(iv) reduction of environmental hazards, `(v) compliance with environmental permits, rules, and similar requirements, `(vi) prevention, containment or control of unplanned releases, or `(vii) the manufacture, distribution and sale of alternate fuels and blending stocks or fuel additives for reformulated fuels, and `(C) located and used exclusively in the United States during the taxable year. If only a portion of property described in subparagraphs (A) and (C) is described in subparagraph (B), such portion shall be treated as an environmental improvement asset. `(2) OTHER DEFINITIONS- For purposes of this subsection-- `(A) SOURCE REDUCTION- The term `source reduction' means reduction of the amount of regulated substances or other pollutants from fixed or mobile sources released into the environment if such reduction reduces hazards to public health or environment. `(B) WASTE MINIMIZATION- The term `waste minimization' means the reduction in the generation of, or the recovery of commercially usable products from, residual materials which are classified as, or which if disposed would be classified as, solid wastes (within the meaning of the Resource Conservation and Recovery Act). `(C) WASTE CONVERSION OR RECYCLING- The term `waste conversion or recycling' means the processing or conversion of liquid, solid, or gaseous wastes into fuel, energy, or other commercially usable products, and the production of such products if production occurs at the same facility as the conversion. `(D) ABATEMENT OF ENVIRONMENTAL HAZARDS- The term `abatement of environmental hazards' includes the abatement, reduction, monitoring, or stabilization of potential human exposure to toxic chemicals, hazardous or extremely hazardous substances, or harmful radiation. `(E) UNPLANNED RELEASES- The term `unplanned releases' means any release of regulated substances (except federally permitted releases), including indoor releases. `(F) REGULATED SUBSTANCE- The term `regulated substance' includes any substance the release or emission of which is prohibited, limited, or regulated by Federal or State law or by Federal regulations (as determined without regard to whether a particular release would have been prohibited or limited). `(G) RELEASE- The term `release' means any spilling, leaking, pouring, discharging, escaping, dumping, or disposing into the environment, including the abandonment or discarding of barrels or other closed receptacles.' (c) CONFORMING AMENDMENT- Subparagraph (A) of section 56(g)(4) of such Code is amended by adding at the end the following new clause: `(vi) This subparagraph shall not apply to environmental improvement assets (as defined in section 59(k)).' (d) EFFECTIVE DATE- The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 1991.
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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