article: SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE. (a) Short Title.--This Act may be cited as the ``Minimum Tax Reform Act of 1993''. (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. DEPRECIATION ADJUSTMENT USED IN COMPUTING ALTERNATIVE MINIMUM TAXABLE INCOME. (a) 150-Percent Declining Balance Method.-- (1) In general.--Paragraph (1) of section 56(a) (relating to depreciation) is amended to read as follows: ``(1) Depreciation.-- ``(A) 150-percent declining balance method.-- ``(i) In general.--In the case of property not described in clause (ii), the depreciation deduction allowable under section 167 shall be determined as provided in section 168(a), except that the applicable depreciation method under section 168(a)(1) shall be-- ``(I) the 150-percent declining balance method (200-percent declining balance method in the case of computer or peripheral equipment (as defined in section 168(i)(2)(B)), ``(II) switching to the straight line method for the 1st taxable year for which using the straight line method with respect to the adjusted basis as of the beginning of the year will yield a higher allowance. ``(ii) Property not using 150-percent method.--Property described in this clause is section 1250 property (as defined in section 1250(c)) or any other property if the depreciation deduction determined under section 168 with respect to such other property for purposes of the regular tax is determined by using the straight line method. ``(B) Normalization rules.--With respect to public utility property described in section 168(i)(10), the Secretary shall prescribe the requirements of a normalization method of accounting for this section.''. (2) No adjustment for adjusted current earnings system.-- Clause (i) of section 56(g)(4)(A) (relating to depreciation adjustments for computing adjusted current earnings) is amended by adding at the end the following new sentence: ``The preceding sentence shall not apply to property placed in service in taxable years beginning after December 31, 1992, and the depreciation deduction with respect to such property shall be determined under the rules of subsection (a)(1)(A).''. (b) Exception for Environmental Property.-- (1) In general.--Section 56(a)(1) (relating to depreciation adjustments), as amended by subsection (a)(1), is amended by adding at the end the following new subparagraph: ``(C) Environmental improvement assets.--This paragraph shall not apply to environmental improvement assets (as defined in section 59(k)).''. (2) Environmental improvement assets.--Section 59 (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), the term `environmental improvement asset' means tangible property which is-- ``(A) of a character subject to the allowance for depreciation provided in section 167; ``(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, including requirements with respect to noise pollution such as the reduction of aircraft noise level to stage 3 noise level (as defined in 14 CFR Sec. 36.1(f)(5)), ``(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) except in the case of property used for the reduction of aircraft noise levels described in subparagraph (B)(v), 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) Solid waste minimization.--The term `solid 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) Effective Date.--The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 1992. SEC. 3. PRE-1993 MINIMUM TAX ALLOWED AS CREDIT AGAINST MINIMUM TAX FOR CERTAIN TAXPAYERS. (a) In General.--Section 53(c) (relating to limitation) is amended by adding at the end the following new paragraph: ``(2) Special rule for certain taxpayers with pre-1993 unused minimum tax credits.-- ``(A) In general.--If a taxpayer had an unused minimum tax credit for at least 3 of the taxable years in the testing period, then, subject to the limitation of subparagraph (B), the limitation under paragraph (1) for any taxable year following the testing period shall in no event be less than 50 percent of the excess (if any) of-- ``(I) the tentative 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) Limitation.-- ``(i) In general.--The aggregate increases in the limitation under paragraph (1) by reason of subparagraph (A) shall not exceed the pre- 1993 unused minimum tax credits. ``(ii) Ordering rule.--For purposes of clause (i), any credit under subsection (a) for taxable years following the testing period shall be treated as allocated to pre-1993 unused minimum tax credits until such credits are used up. ``(C) Definitions.--For purposes of this paragraph-- ``(i) Testing period.--The term `testing period' means the 5-taxable year period ending with the taxpayer's last taxable year beginning in 1992. ``(ii) Pre-1993 unused minimum tax credits.--The term `pre-1993 unused minimum tax credits' means the credits allowable under subsection (a) remaining unused as of the close of the testing period.''. (b) Conforming Amendments.--Section 53(c) (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). (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1992. SEC. 4. ALLOWANCE OF GENERAL BUSINESS CREDIT AGAINST PORTION OF MINIMUM TAX. (a) In General.--Subparagraph (A) of section 38(c)(1) (relating to limitation based on amount of tax) is amended by inserting ``75 percent of'' before ``the tentative minimum tax''. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 1992.
summary: Minimum Tax Reform Act of 1993 - Amends the Internal Revenue Code to revise adjustments in computing alternative minimum taxable income and allow companies to use the 150-percent declining balance method to compute depreciation, except for environmental assets. Allow s a 200 percent declining balance method in the case of computer or peripheral equipment. Allows companies to use pre-1993 minimum tax credits against alternative tax liability for up to 50 percent of that liability, with limitations. Allows businesses to reduce up to 25 percent of their minimum tax liabilty with general business credits.