State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 61

PL 98–369 (HR 4170), PL 98–369, July 18, 1984, 98 Stat 494

“‘(1) the sum of the credits allowable for such taxable year under sections 38, 40, 44B, 443, and 44G (as in effect before
enactment of the Tax Reform Act of 1984), plus', and
“(B) for purposes of section 38(c) the net tax liability for such taxable year shall be the tax liability (as so defined in
section 25(b)) reduced by the sum of the credits allowable for such taxable year under sections 33, 37, 41, 44A, 44C,
44D, 44F, and 44H (as so in effect).”
SEC. 474. TECHNICAL AND CONFORMING AMENDMENTS.
(a) REFERENCES TO OLD AND NEW PROVISIONS. — Whenever in this section reference is made to an old
or new section or other provision, the reference is to the provision before (in the case of “old”) or after (in the case of
“new”) the changes made by section 471 of this Act.
(b) OLD SECTION 21. —
(1) REDESIGNATION. — Old section 21 (relating to effect of changes) is redesignated as section 15.
(2) CONFORMING AMENDMENTS. — Sections 441(f)(2)(A) and 6013( c) are each amended by striking out “21”
and inserting in lieu thereof “15”.
(3) TABLE OF SECTIONS. — The table of sections for part III of subchapter A of chapter 1 is amended by striking
out the item relating to section 21 and inserting in lieu thereof the following:
“Sec. 15. Effect of changes.”
(c) NEW SECTION 21. — New section 21 (relating to expenses for household and dependent care services necessary
for gainful employment is amended —
(1) by striking out subsection (b) and by redesignating subsections (c), (d), (e), (f), and (g) as subsections (b), (c), (d),
(e), and (f), respectively,
(2) by striking out “subsection (c)(1)” in subsection (a) and inserting in lieu thereof “subsection (b)(1)”,
(3) by striking out “subsection (c)(2)” in subsection (a) and inserting in lieu thereof “subsection (b)(2)”,
(4) by striking out “subsection (c)(1)(C)” in paragraph (2) of subsection (d) (as redesignated by paragraph (1)) and
inserting in lieu thereof “subsection (b)(1)(C)”,
(5) by striking out “subsection (d)(1)” in subparagraph (A) of subsection (d)(2) (as redesignated by paragraph (1)) and
inserting in lieu thereof, “subsection (c)(1)”,
(6) by striking out “subsection (d)(2)” in subparagraph (B) os subsection (d)(2) (as redesignated by paragraph (1)) and
inserting in lieu thereof “subsection (c)(2)”, and
(7) by striking out “subsection (c)(1)” in subsection (e)(5) (as redesignated by paragraph (1)) and inserting in lieu
thereof “subsection (b)(1)”.
(d) NEW SECTION 22. — New Section 22 (relating to the credit for the elderly and the permanently and totally
disabled) is amended —
(1) by striking out “Section 37 amount” each place it appears in the text and inserting in lieu thereof “section 22
amount”,
(2) by striking out the heading of subsection (c) and inserting in lieu thereof “(c) SECTION 22 AMOUNT. — “, and
(3) by amending subsection (d) to read as follows:
“(d) ADJUSTED GROSS INCOME LIMITATION. — If the adjusted gross income of the taxpayer exceeds —
“(1) $7,500 in the case of a single individual,
“(2) $10,000 in the case of a joint return, or
“(3) $5,000 in the case of a married individual filing a separate return,
the section 22 amount shall be reduced by one-half of the excess of the adjusted gross income over $7,500, $10,000, or
$5,000, as the case may be.”
(e) NEW SECTION 23. — Subsection (b) of new section 23 (relating to residential energy credit) is amended by striking
out paragraphs (5) and (6) and inserting in lieu thereof the following:
“(5) CARRYFORWARD OF UNUSED CREDIT. —
“(A) IN GENERAL. — If the credit allowable under subsection (a) for any taxable year exceeds the limitation
imposed by section 25(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other

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than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under
subsection (a) for such succeeding taxable year.
“(B) NO CARRYFORWARD TO TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1987. — No
amount may be carried under supbaragraph (A) to any taxable year beginning after December 31, 1987.”
(f) NEW SECTION 24. — Subsection (b) ofnew section 24 (relating to contributions to candidates for political office)
is amended by striking out paragraph (2) and by redesignating paragraph (3) as paragraph (2).
(g) NEW SECTION 28. —
(1) New section 28 is amended —
(A) by striling out, “section 44F” each place it appears and inserting in lieu thereof “section 30”, and
(B) by striking out “section 44F(b)” in subsection (c)(2) and inserting in lieu thereof “section 30(b),” and
(C) by striking out “section 44F(f)” in subsection (d)(4) and inserting in lieu thereof “section 30(f)”.
(2) Pargraph (2) of new section 28(d) is amended to read as follows:
“(2) LIMITATION BASED ON AMOUNT OF TAX. — The credit allowed by this section for any taxable year shall
not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits
allowable under subpart A and section 27.”
(h) NEW SECTION 20. — Paragraph (5) of new section 29(b) (relating to credit for producing fuel from a
nonconvential source) is amended to read as follows:
“(5) APPLICATION WITH OTHER CREDITS. — The credit allowed by subsection (a) for a taxable year shall not
exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum of the credits
allowable under subpart A and sections 27 and 28.”
(i) NEW SECTION 30. —
(1) New section 30 (relating to credit for increasing research activities) is amended —
(A) by striking out “in computing the credit under section 40 or 44B” in subsection (b)(2)(D)(iii) and inserting in lieu
thereof “in determining the targeted jobs credit under section 51(a)”, and
(B) by amending subparagraph (A) of subsection (g)(1) to read as follows:
“(A) IN GENERAL. — Except as provided in subparagraph (B), the credit allowed by subsection (a) for any taxable
year shall not exceed the taxpayer's tax liability for the taxable year (as defined in section 25(b)), reduced by the sum
of the credits allowable under subpart A and sections 27, 28, and 29.”
(2) NEW SECTION 30 TREATED AS CONTINUATION OF OLD SECTION 44F. — For purposes of determining
—
(A) whether any excess credit under old section 44F for a taxable year beginning before January 1, 1984, is allowable
as a carryover under new section 30, and
(A) the period during which new section 30 is in effect, new section 30 shall be treated as a continuation of old section
44F (and shall apply only to the extent old section 44F would have applied).
(j) NEW SECTION 33. — New section 33 (relating to tax withheld at source on nonresident aliens and foreign
corporations and on tax-free covenant bonds) is amended to read as follows:
“SEC. 33. TAX WITHHELD AT SOURCE ON NONRESIDENT ALIENS AND FOREIGN CORPORATIONS.
“There shall be allowed as a credit against the tax imposed by this subtitle the amount of tax withheld at source under
subchapter A of chapter 3 (relating to withholding of tax on nonresident aliens and on foreign corporations).”
(k) NEW SECTION 40. — New section 40 (relating to alcohol used as fuel) is amended —
(1) by amending subsection (a) to read as follows:
“(a) GENERAL RULE. — For purposes of section 38, the alcohol fuels credit determined under this section for the
taxable year is an amount equal to the sum of —
“(1) the alcohol mixture credit, plus
“(2) the alcohol credit.”,
(2) by striking out “the credit allowable under this section” in subsection (c) and inserting in lieu thereof “the credit
determined under this section”,

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(3) by striking out “credit was allowable” each place it appears in paragraph (3) of subsection (d) and inserting in lieu
thereof “credit was determined”,
(4) by striking out subsection (e) and redesignating subsection (f) as subsection (e),
(5) by amending paragraph (2) of subsection (e) (as redesignated by paragraph (4)) to read as follows:
“(2) NO CARRYOVERS TO YEARS AFTER 1984. — No amount may be carried under section 39 by reason of
this section (treating the amount allowed by reason of this section as the first amount allowed by this subpart) to any
taxable year beginning after December 31, 1994.”, and
(6) by adding at the end thereof the following new subsection:
“(f) ELECTION TO HAVE ALCOHOL FUELS CREDIT NOT APPLY. —
“(1) IN GENERAL. — A taxpayer may elect to have this section not apply for any taxable year.
“(2) TIME FOR MAKING ELECTION. — An election under paragraph (1) for any taxable year may be made (or
revoked) at any time before the expiration of the 3–year period beginning on the last date prescribed by law for filing
the return for such taxable year (determined without regard to extensions).
“(3) MANNER OF MAKING ELECTION. — An election under paragraph (1) (or revocation thereof) shall be made
in such manner as the Secretary may by regulations prescribe.”
(l) NEW SECTION 41. — New section 41 (relating to employee stock ownership plan) is amended —
(1) by amending paragraph (1) of subsection (a) to read as follows:
“(1) AMOUNT OF CREDIT. — In the case of a corporation which elects to have this section apply for the taxable
year and which meets the requirements of subsection (c)(1), for purposes of section 38, the amount of the employee
stock ownership credit determined under this section for the taxable year is an amount equal to the amount of the credit
determined under paragraph (2) for such taxable year.”,
(2) by amending subsection (b) to read as follows:
“(b) CERTAIN REGULATED COMPANIES. — No credit attributable to compensation taken into account for the
ratemaking purposes involved shall be determined under this section with respect to a taxpayer if —
“(1) the taxpayer's cost of service for ratemaking purposes or in its regulated books of account is reduced by reason of
any portion of such credit which results from the transfer of employer securities or cash to a tax credit employee stock
ownership plan which meets the requirements of section 409;
“(2) the base to which the taxpayer's rate of return for ratemaking purposes is applied is reduced by reason of any
portion of such credit which results from a transfer described in paragraph (1) to such employee stock ownership plan; or
“(3) any portion of the amount of such credit which results from a transfer described in paragraph (1) to such employee
stock ownership plan is treated for ratemaking purposes in any way other than as though it had been contributed by
the taxpayer's common shareholders.
Under regulations prescribed by the Secretary, rules similar to the rules of paragraphs (4) and (7) of section 46(f) shall
apply for purposes of the preceding sentence.”, and
(3) by striking out “the credit allowed under this section” in subsection (c)(3) and inserting in lieu thereof “the credit
determined under this section”.
(m) REPEAL OF CERTAIN OLD PROVISIONS. —
(1) Old sections 28, 40, 44, and 44B are hereby repealed.
(2) Old subpart C of part IV of subchapter A of chapter 1 is hereby repealed.
(n) REDESIGNATION OF OLD SUBPARTS. —
(1) Old subparts B and D of part IV of subchapter A of chapter 1 are redesignated as subparts E and F, respectively.
(2) The subpart heading for subpart F of part IV of subchapter A of chapter 1 (as so redesignated) is amended to
read as follows:
“Subpart F — Rules for Computing Targeted Jobs Credit”.
(3) The table of subparts for such part IV (as amended by subsection (a) of section 471) is amended by adding at the
end thereof the following:
“Subpart E. Rules for computing credit for investment in certain depreciable property.
“Subpart F. Rules for computing targeted jobs credit.”

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(o) INVESTMENT TAX CREDIT. —
(1) Section 46 (relating to amount of investment tax credit) is
amended by striking out subsections (a) and (b) and inserting in lieu thereof the following:
“(a) AMOUNT OF INVESTMENT CREDIT. — For purposes of section 38, the amount of the investment credit
determined under this section for any taxable year shall be an amount equal to the sum of the following percentages of
the qualified investment (as determined under subsections (c) and (d)):
“(1) the regular percentage,
“(2) in the case of energy property, the energy percentage, and
“(3) in the case of that portion of the basis of any property which is attributable to qualified rehabilitation expenditures,
the rehabilitation percentage.
“(b) DETERMINATION OF PERCENTAGES. — For purposes of subsection (a) —
“(1) REGULAR PERCENTAGE. — The regular percentage is 10 percent.
“(2) ENERGY PERCENTAGE. —
“(A) IN GENERAL. — The energy percentage shall be determined in accordance with the following table:
TABLE OMITTED
“(B) PERIODS FOR WHICH PERCENTAGE NOT SPECIFIED. — In the case of any energy property, the energy
percentage shall be zero for any period for which an energy percentage is not specified for such property under
subparagraph (A) (as modified by subparagraphs (C) and (D)).
“(C) LONGER PERIOD FOR CERTAIN LONG–TERM PROJECTS. — For the purpose of applying the energy
percentage contained in clause (i) of subparagrah (A) with respect to property which is part of a project with a normal
construction period of 2 years or more (within the meaning of subsection (d)(2)(A) (i)), ‘December 31, 1990’ shall be
substituted for ‘December 31, 1982’ if —
“(i) before January 1, 1983, all engineering studies in connection with the commencement of the construction of the
project have been completed and all environmental and construction permits required under Federal, State, or local
law in connection with the commencement of the construction of the project have been applied for, and
“(ii) before January 1, 1986, the taxpayer has entered into binding contracts for the acquisition, construction,
reconstruction, or erection of equipment specially designed for the project and the aggregate cost to the taxpayer of
that equipment is at least 50 percent of the reasonably estimated cost for all such equipment which is to be placed in
service as part of the project upon its completion.
“(D) LONGER PERIOD FOR CERTAIN HYDROELECTRIC GENERATING PROPERTY. — If an application
has been docketed by the Federal Energy Regulatory Commission before January 1, 1986, with respect to the installation
of any qualified hydroelectric generating property, for purposes of applying the energy percentage contained in clause
(iv) of subparagraph (A) with respect to such property, ‘December 31, 1988’ shall be substituted for ‘December 31, 1985’.
“(3) SPECIAL RULE FOR CERTAIN ENERGY PROPERTY. — The regular percentage shall not apply to
any energy property which, but for section 48(l)(1), would not be section 38 property. In the case of any qualified
hydroelectric generating property which is a fish passageway, the preceding sentence shall not apply to any period after
1979 for which the energy percentage for such property is greater than zero.
“(4) REHABILITATION PERCENTAGE. —
“(A) IN GENERAL. —
TABLE OMITTED
“(B) REGULAR AND ENERGY PERCENTAGES NOT TO APPLY. — The regular percentages and the energy
percentages shall not apply to that portion of the basis of any property which is attributable to qualified rehabilitation
expenditures.
“(C) DEFINITIONS. — For purposes of this paragraph —
“(i) 30–YEAR BUILDING. — The term '30–year building' means a qualified rehabilitated building other than a 40–
year building and other than a certified historic structure.
“(ii) 40–YEAR BUILDING. — The term '40–year building' means a qualified rehabilitated building (other than a
certified historic structure) which would meet the requirements of section 48(g)(1)( B) if ‘40’ were substituted for ‘30’
each place it appears in subparagraph (B) thereof.
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“(iii) CERTIFIED HISTORIC STRUCTURE. — The term ‘certified historic structure’ means a qualified
rehabilitated building which meets the requirements of section 48(g)(3).”
(2) Subclause (II) of section 46(c)(8)(F)(ii) is amended by striking out “section 46(a)(2)(C)” and inserting in lieu
thereof “subsection (b)(2)”.
(3)(A) Paragraph (1) of section 46(e) is amended —
(i) by striking out “and the $25,000 amount specified under subparagraphs (A) and (B) of subsection (a)(3)”, and
(ii) by striking out “such items” and inserting in lieu thereof “such qualified investment”.
(B) Paragraph (2) of section 46(e) is amended by striking out “the items described therein” and inserting in lieu thereof
“qualified investment”.
(4)(A) Paragraphs (1) and (2) of section 46(f) are each amended by striking out “no credit shall be allowed by section
38” and inserting in lieu thereof “no credit determined under subsection (a) shall be allowed by section 38”
(B) Paragraphs (1) and (2) of section 46(f) are each amended by striking out “the credit allowable by section 38” each
place it appears and inserting in lieu thereof “the credit determined under subsection (a) and allowable by section 38”.
(C) Subparagraph (B) of section 46(f)(4) is amended by striking out “the credit allowed by section 38” and inserting
in lieu thereof “the credit determined under subsection (a) and allowed by section 38”.
(5) Paragraph (8) of section 46(f) is amended —
(A) by striking out “the credit allowable under section 38” each place it appears and inserting in lieu thereof “the credit
determined under subsection (a) and allowable under section 38”, and
“(B) by striking out “(within the meaning of subsection (a)( 7)(C))” and inserting in lieu thereof “(within the meaning
of the first sentence of subsection (c)(3)(B))”.
(6) Paragraph (2) of section 46(g) is amended by striking out “the limitation of subsection (a)(3)” and inserting in lieu
thereof “the limitation of section 38(c)”.
(7) Paragraph (1) of section 46(h) is amended —
(A) by striking out “the credit allowable to the organization under section 38” and inserting in lieu thereof “the credit
determined under subsection (a) and allowable to the organization under section 38”, and
(B) by striking out “the limitation contained in subsection (a)(3)” and inserting in lieu thereof “the limitation contained
in section 38(c)”.
(8) Paragraphs (5) and (6) of section 47(a) are each amended by striking out “under section 46(b)” and inserting in
lieu thereof “under section 39”.
(9) Subsection (c) of section 47 is amended by strking out “subpart A” and inserting in lieu thereof “subpart A, B, or D”.
(10) Subparagraph (B) of section 48(c)(3) is amended by striking out “section 46(b)” and inserting in lieu thereof
“section 39”.
(11) Subparagraph (B) of section 48(d)(1) is amended by striking out “section 46(a)(6)” and inserting in lieu thereof
“section 38(c)(3)(B)”.
(12) Subsection (f) of section 48 is amended —
(A) by adding “and” at the end of paragraph (1),
(B) striking out “, and” at the end of paragraph (2) and inserting in lieu thereof a period, and
(C) by striking out paragraph (3).
(13) Paragraph (1) or section 48(l) is amended by striking out “section 46(a)(2)(C)” and inserting in lieu thereof “section
46( b)(2)”.
(14) Subsection (m) of section 48 is amended by striking out “subsection (a)(2)” and inserting in lieu thereof “subsection
(b)”.
(15) Subsection (n) of section 48 (relating to requirements for allowance of employee plan percentage) is hereby
repealed; except that paragraph (4) of section 48(n) of the Internal Revenue Code of 1954 (as in effect before its repeal
by this paragraph) shall continue to apply in the case of any recapture under section 47(f) of such Code of a credit
allowable for a taxable year beginning before January 1, 1984.
(16) Subsection (o) of section 48 (defining certain credits) is amended by striking out paragraphs (3), (4), (5), (6), and
(7) and by redesignating paragraph (8) as paragraph (3).
(17) Subsection (q) of section 48 is amended —

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(A) by striking out “section 46(a)(2)” each place it appears and inserting in lieu thereof “section 46(a)”, and
(B) by striking out “section 46(a)(2)(B)” each place it appears and inserting in lieu thereof “section 46(b)(1)”.
(18) Subsection (r) of section 48 is amended by striking our “section 381(c)(23)” and inserting in lieu thereof “section
381( c)(26)”.
(p) TARGETED JOBS CREDIT. —
(1) Subsection (a) of section 51 (relating to amount of targeted jobs credit) is amended to read as follows:
“(a) DETERMINATION OF AMOUNT. — For purposes of section 38, the amount of the targeted jobs credit
determined under this section for the taxable year shall be the sum of —
“(1) 50 percent of the qualified first-year wages for such year, and
“(2) 25 percent of the qualified second-year wages for such year.”
(2) Subsection (g) of section 51 is amended by striking out “the credit provided by section 44B” and inserting in lieu
thereof “the targeted jobs credit determined under this subpart”.
(3) Section 51 is amended by adding at the end thereof the following new subsection:
“(j) ELECTION TO HAVE TARGETED JOBS CREDIT NOT APPLY. —
“(1) IN GENERAL. — A taxpayer may elect to have this section not apply for any taxable year.
“(2) TIME FOR MAKING ELECTION. — An election under paragraph (1) for any taxable year may be made (or
revoked) at any time before the expiration of the 3–year period beginning on the last date prescribed by law for filing
the return for such taxable year (determined without regard to extensions).
“(3) MANNER OF MAKING ELECTION. — An election under paragraph (1) (or revocation thereof) shall be made
in such manner as the Secretary may by regulations prescribe.”
(4) Subsection (a) of section 52 is amended by striking out “the credit (if any) allowable by section 44B to each such
member” and inserting in lieu thereof “the credit (if any) determined under section 51(a) with respect to each such
member”.
(5) Subsection (b) of section 52 is amended by striking out “the credit (if any) allowable by section 44B” and inserting
in lieu thereof “the credit (if any) determined under section 51( a)”.
(6) Subsection (c) of section 52 is amended by striking out “credit shall be allowed under section 44B” and inserting in
lieu thereof “credit shall be allowed under section 38 for any targeted jobs credit determined under this subpart”.
(7) Paragraph (2) of section 52(d) is amended by striking out “, subject to section 53, a credit under section 44B” and
inserting in lieu thereof “, subject to section 38(c), a credit under section 38(a)”.
(8) Section 53 (relating to limitation based on amount of tax) is hereby repealed.
(9) The table of sections for old subpart D of part IV of subchapter A of chapter 1 is amended by striking out the
item relating to section 53.
(q) SECTION 55. —
(1) Paragraph (1) of section 55(c) (relating to credits) is amended —
(A) by striking out “subpart A of part IV” and inserting in lieu thereof “subpart A, B, or D of part IV”, and
(B) by striking out “section 33(a)” each place it appears and inserting in lieu thereof “section 27(a)”.
(2) Clause (i) of section 55(c)(2)(B) is amended by striking out “section 33(a)” and inserting in lieu thereof “section
27( a)”.
(3) Paragraph (3) of section 55(c) is amended to read as follows:
“(3) CARRYOVER AND CARRYBACK OF CERTAIN CREDITS. — In the case of any taxable year for which
a tax is imposed by this section, for purposes of determining the amount of any carryover or carryback to any other
taxable year of any credit allowable under section 23, 30, or 38, the amount of the limitation under section 25, 30(g),
or 38(c) (as the case may be) shall be deemed to be —
“(A) the amount of such limitation for such taxable year (determined without regard to this paragraph), reduced (but
not below zero) by
“(B) the amount of the tax imposed by this section for the taxable year, reduced by —
“(i) the amount of the credit allowable under section 27(a),
“(ii) in the case of the limitation under section 30(g), the amount of such tax taken into account under this
subparagraph with respect to the limitation under section 25, and

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“(iii) in the case of the limitation under section 38(c), the amount of such tax taken into account under this
subparagraph with respect to limitations under sections 25 and 30(g).”
(4) Paragraph (2) of section 55(f) is amended by striking out “allowable under subpart A of part IV of this subchapter
(other than under sections 31, 39, and 43)” and inserting in lieu thereof “allowable under subparts A, B, and D of
part IV of this subchapter”.
(r) TECHNICAL AND CONFORMING AMENDMENTS TO OTHER PROVISIONS. —
(1) SECTION 56. —
(A) Subsection (c) of section 56 (defining regular tax deduction) is amended —
(i) by striking out “subpart A of part IV other than sections 39 and 44G” and inserting in lieu thereof “subparts A,
B, and D of part IV”, and
(ii) by amending the last sentence to read as follows: “For purposes of the preceding sentence, the amount of the credit
determined under section 38 for any taxable year shall be determined without regard to the employee stock ownership
credit determined under section 41.”
(B) Subparagraph (A) of section 56(e)(1) is amended by striking out clauses (i), (ii), (iii), and (iv) and inserting in lieu
thereof the following:
“(i) section 27 (relating to foreign tax credit), and
“(ii) section 38 (relating to general business credit), exceed”.
(2) SECTION 86. — Paragraph (1) of section 86(f) (relating to treatment as pension or annuity for certain purposes)
is amended by striking out “section 43(c)(2)” and inserting in lieu thereof “section 32(c)(2)”.
(3) SECTION 87. — Section 87 (relating to alcohol fuel credit included in income) is amended to read as follows:
“SEC 87. ALCOHOL FUEL CREDIT.
“Gross income includes the amount of the alcohol fuel credit determined with respect to the taxpayer for the taxable
year under section 40(a).”
(4) SECTION 103. — Clause (iv) of section 103(b)(6)(F) (relating to certain capital expenditures not taken into
account) is amended by striking out “section 44F(b)(2)(A)” and inserting in lieu thereof “section 30(b)(2)(A)”.
(5) SECTION 108. — Subparagraph (B) of section 108(b)(2) (relating to reduction of tax attributes in title 11 case
or insolvency) is amended to read as follows:
“(B) RESEARCH CREDIT AND GENERAL BUSINESS CREDIT. — Any carryover to or from the taxable year
of a discharge of an amount for purposes of determining the amount allowable as a credit under —
“(i) section 30 (relating to credit for increasing research activities), or
“(ii) section 38 (relating to general business credit). For purposes of this subparagraph, there shall not be taken into
account any portion of a carryover which is attributable to the employee stock ownership credit determined under
section 41.”
(6) SECTION 129. —
(A) Paragraph (2) of section 129(b) (relating to earned income limitation) is amended by striking out “section 44A(e)
(2)” and inserting in lieu thereof “section 21(d)(2)”.
(B) Paragraph (1) of section 129(e) (defining dependent care assistance) is amended by striking out “section 44A(c)
(2)” and inserting in lieu thereof “section 21(b)(2)”.
(C) Paragraph (2) of section 129(e) (defining earned income) is amended by striking out “section 43(c)(2)” and inserting
in lieu thereof “section 32(c)(2)”.
(7) SECTION 168. —
(A) Clause (i) of section 168(i)(1)(D), as added by section 208(a) of the Tax Equity and Fiscal Responsibility Act of
1982, is amended by striking out “subpart A of part IV” and inserting in lieu thereof “subparts A, B, and D of part IV”.

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