text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Investment Tax Incentive Act of 
  1993''.
  
  SEC. 2. DEPRECIATION ADJUSTMENT FOR CERTAIN PROPERTY PLACED IN SERVICE 
                IN TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1992.
  
      (a) In General.--Section 168 of the Internal Revenue Code of 1986 
  (relating to accelerated cost recovery system) is amended by adding at 
  the end thereof the following new subsection:
      ``(j) Deduction Adjustment To Allow Equivalent of Expensing For 
  Certain Property Placed in Service in Taxable Years Beginning After 
  December 31, 1992.--
              ``(1) In general.--In the case of tangible property placed 
          in service in a taxable year beginning after December 31, 1992, 
          the deduction allowable under this section with respect to such 
          property for any taxable year (after the taxable year during 
          which the property is placed in service) shall be--
                      ``(A) the amount so allowable for such taxable year 
                  without regard to this subsection, multiplied by
                      ``(B) the applicable neutral cost recovery ratio 
                  for such taxable year.
          For purposes of subparagraph (A), paragraphs (1) and (2) of 
          section 168(b) shall be applied by substituting `150 percent' 
          for `200 percent'.
              ``(2) Applicable neutral cost recovery ratio.--For purposes 
          of paragraph (1), the applicable neutral cost recovery ratio 
          for any taxable year is the number determined by--
                      ``(A) dividing--
                              ``(i) the gross national product deflator 
                          for the calendar quarter ending in such taxable 
                          year which corresponds to the calendar quarter 
                          during which the property was placed in service 
                          by the taxpayer, by
                              ``(ii) the gross national product deflator 
                          for the calendar quarter during which the 
                          property was placed in service by the taxpayer, 
                          and
                      ``(B) then multiplying the number determined under 
                  subparagraph (A) by the number equal to 1.035 to the 
                  nth power where `n' is the number of full years in the 
                  period beginning on the 1st day of the calendar quarter 
                  during which the property was placed in service by the 
                  taxpayer and ending on the day before the beginning of 
                  the corresponding calendar quarter ending during such 
                  taxable year.
          The applicable neutral cost recovery ratio shall not be taken 
          into account unless it is greater than 1. The applicable 
          neutral cost recovery ratio shall be rounded to the nearest 
          one-tenth of 1 percent.
              ``(3) Gross national product deflator.--For purposes of 
          paragraph (2), the gross national product deflator for any 
          calendar quarter is the implicit price deflator for the gross 
          national product for such quarter (as shown in the first 
          revision thereof).
              ``(4) Election not to have subsection apply.--This 
          subsection shall not apply to any property if the taxpayer 
          elects not to have this subsection apply to such property. Such 
          an election, once made, shall be irrevocable.''
      (b) Minimum Tax Treatment.--Paragraph (1) of section 56(a) of such 
  Code is amended by adding at the end thereof the following new 
  subparagraph:
                      ``(E) Use of Neutral Cost Recovery Ratio.--In the 
                  case of tangible property placed in service in a 
                  taxable year beginning after December 31, 1992, the 
                  deduction allowable under this paragraph with respect 
                  to such property for any taxable year (after the 
                  taxable year during which the property is placed in 
                  service) shall be--
                              ``(i) the amount so allowable for such 
                          taxable year without regard to this 
                          subparagraph, multiplied by
                              ``(ii) the applicable neutral cost recovery 
                          ratio for such taxable year (as determined 
                          under section 168(j)).
                  This subparagraph shall not apply to any property with 
                  respect to which there is an election in effect not to 
                  have section 168(j) apply.''
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 1992.
  
  SEC. 3. REPEAL OF SPECIAL DEPRECIATION RULES APPLICABLE UNDER THE 
                ADJUSTED CURRENT EARNINGS PROVISIONS OF THE MINIMUM TAX.
  
      (a) In General.--Subparagraph (A) of section 56(g)(4) of the 
  Internal Revenue Code of 1986 (relating to adjustments) is amended to 
  read as follows:
                      ``(A) Depreciation.--
                              ``(i) In general.--The depreciation 
                          deduction with respect to any property for any 
                          taxable year beginning after December 31, 1992, 
                          shall be the same as the depreciation deduction 
                          allowable in computing alternative minimum 
                          taxable income for such taxable year.
                              ``(ii) Basis rules.--Notwithstanding 
                          subparagraph (I), the adjusted basis of any 
                          depreciable property held by the taxpayer as of 
                          the beginning of the taxpayer's first taxable 
                          year beginning after December 31, 1992, shall 
                          be determined as if the provisions of clause 
                          (i) had also applied to taxable years beginning 
                          in 1990, 1991, or 1992.
                              ``(iii) Lost basis recovered over 5 
                          years.--The amount determined under clause (iv) 
                          shall be allowed as a deduction ratably over 
                          the 60-month period beginning with the first 
                          month of the taxpayer's first taxable year 
                          beginning after December 31, 1992.
                              ``(iv) Amount of lost basis.--The amount 
                          determined under this clause is the excess of--
                                      ``(I) the aggregate adjusted bases 
                                  of depreciable property held by the 
                                  taxpayer as of the beginning of the 
                                  taxpayer's first taxable year beginning 
                                  after December 31, 1992, which would 
                                  have been determined (as of such time) 
                                  under subparagraph (I) without regard 
                                  to clause (ii), over
                                      ``(II) the aggregate adjusted bases 
                                  of such property (as of such time) as 
                                  determined under the rules of clause 
                                  (ii).''
      (b) Effective Date.--The amendment made by subsection (a) shall 
  apply to taxable years beginning after December 31, 1992.
target: Investment Tax Incentive Act of 1993 - Amends the Internal Revenue Code to allow the depreciation deduction to be computed based on a neutral recovery basis for property placed in service after December 31, 1992. 
  Repeals the special depreciation rules applicable under the adjusted current earnings provisions of the minimum tax.
feat_title: Investment Tax Incentive Act of 1993