text: 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.
target: 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.
feat_title: Minimum Tax Reform Act of 1993