[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 2107 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 2107
To amend the Internal Revenue Code of 1986 to establish the
semiconductor manufacturing investment credit.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 17, 2021
Mr. Wyden (for himself, Mr. Crapo, Mr. Warner, Mr. Cornyn, Ms.
Stabenow, and Mr. Daines) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to establish the
semiconductor manufacturing investment credit.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Facilitating American-Built
Semiconductors Act'' or the ``FABS Act''.
SEC. 2. SEMICONDUCTOR MANUFACTURING INVESTMENT CREDIT.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 48C the following new section:
``SEC. 48D. SEMICONDUCTOR MANUFACTURING INVESTMENT CREDIT.
``(a) In General.--For purposes of section 46, the semiconductor
manufacturing investment credit for any taxable year is an amount equal
to the sum of--
``(1) 25 percent of the qualified investment for such
taxable year with respect to any semiconductor manufacturing
facility, and
``(2) 25 percent of the qualified investment for such
taxable year with respect to any semiconductor manufacturing
property.
``(b) Qualified Investment With Respect to Semiconductor
Manufacturing Facilities.--
``(1) In general.--For purposes of subsection (a)(1), the
qualified investment with respect to any semiconductor
manufacturing facility for any taxable year is the basis of any
qualified property placed in service by the taxpayer during
such taxable year which is part of a semiconductor
manufacturing facility.
``(2) Qualified property.--For purposes of this subsection,
the term `qualified property' means property--
``(A) which is tangible property (including a
building or its structural components) which is an
integral part of a semiconductor manufacturing
facility,
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable,
``(C) which is--
``(i) constructed, reconstructed, or
erected by the taxpayer, or
``(ii) acquired by the taxpayer if the
original use of such property commences with
the taxpayer, and
``(D) which is necessary for the manufacturing or
processing of, or performing research with respect to,
semiconductors or semiconductor tooling equipment.
``(3) Semiconductor manufacturing facility.--For purposes
of this subpart, the term `semiconductor manufacturing
facility' means a facility for which the primary purpose is the
manufacturing or processing of, or performing research with
respect to, semiconductors or semiconductor tooling equipment.
``(4) Coordination with rehabilitation credit and
semiconductor manufacturing property.--The qualified investment
with respect to any semiconductor manufacturing facility for
any taxable year shall not include that portion of the basis of
any property which is--
``(A) attributable to qualified rehabilitation
expenditures (as defined in section 47(c)(2)), or
``(B) semiconductor manufacturing property (as
defined in subsection (c)(2)).
``(c) Qualified Investment With Respect to Semiconductor
Manufacturing Property.--
``(1) In general.--For purposes of subsection (a)(2), the
qualified investment with respect to semiconductor
manufacturing property for any taxable year is the basis of any
semiconductor manufacturing property placed in service by the
taxpayer during such taxable year.
``(2) Semiconductor manufacturing property.--For purposes
of this subpart, the term `semiconductor manufacturing
property' means tangible property--
``(A) for which the primary purpose is to
manufacture or process, or perform research with
respect to, semiconductors or semiconductor tooling
equipment,
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable, and
``(C) which is--
``(i) constructed, reconstructed, or
erected by the taxpayer, or
``(ii) acquired by the taxpayer if the
original use of such property commences with
the taxpayer.
``(d) Certain Progress Expenditure Rules Made Applicable.--Rules
similar to the rules of subsections (c)(4) and (d) of section 46 (as in
effect on the day before the date of the enactment of the Revenue
Reconciliation Act of 1990) shall apply for purposes of subsection (a).
``(e) Regulations and Guidance.--The Secretary shall prescribe such
regulations or other guidance as may be necessary or appropriate to
carry out the purposes of this section, including regulations or other
guidance with respect to--
``(1) determining the basis of qualified property and
semiconductor manufacturing property,
``(2) any such measures as are deemed appropriate to avoid
abuse or fraud with respect to the credit allowed under this
section, and
``(3) ensuring that such credit is not allowed to multiple
taxpayers.''.
(b) Election for Direct Payment.--Section 48D of the Internal
Revenue Code of 1986, as added by subsection (a), is amended by adding
at the end the following:
``(f) Election for Direct Payment.--
``(1) In general.--In the case of any qualified property or
semiconductor manufacturing property placed in service during
any taxable year (with the exception of any such property to
which subsection (d) applied)), the amount of any credit
determined under subsection (a) with respect to such property
for such taxable year shall, at the election of the taxpayer,
be treated as a payment equal to such amount which is made by
the taxpayer against the tax imposed by chapter 1 for such
taxable year (regardless of whether such tax would have been on
such taxpayer).
``(2) Form and effect of election.--An election under
paragraph (1) shall be made prior to the date on which the
qualified property or semiconductor manufacturing property is
placed in service and in such manner as the Secretary may
prescribe. Such election, once made, shall--
``(A) be irrevocable with respect to the qualified
property or semiconductor manufacturing property to
which such election applies, and
``(B) reduce the amount of the credit which would
(but for this subsection) be allowable under this
section with respect to such property for the taxable
year in which such property is placed in service to
zero.
``(3) Application to partnerships and s corporations.--In
the case of a partnership or S corporation which makes an
election under paragraph (1)--
``(A) such paragraph shall apply with respect to
such partnership or corporation without regard to the
fact that no tax is imposed by chapter 1 on such
partnership or corporation, and
``(B)(i) in the case of a partnership, each
partner's distributive share of the credit determined
under subsection (a) with respect to the qualified
property or semiconductor manufacturing property shall
be deemed to be zero, and
``(ii) in the case of a S corporation, each
shareholder's pro rata share of the credit determined
under subsection (a) with respect to such property
shall be deemed to be zero.''.
(c) Conforming Amendments.--
(1) Section 46 of the Internal Revenue Code of 1986 is
amended--
(A) by striking ``and'' at the end of paragraph
(5),
(B) by striking the period at the end of paragraph
(6) and inserting ``, and'', and
(C) by adding at the end the following new
paragraph:
``(7) the semiconductor manufacturing investment credit.''.
(2) Section 49(a)(1)(C) of such Code is amended--
(A) by striking ``and'' at the end of clause (iv),
(B) by striking the period at the end of clause (v)
and inserting a comma, and
(C) by adding at the end the following new clauses:
``(vi) the basis of any qualified property
(as defined in section 48D(b)(2)) which is part
of a semiconductor manufacturing facility, and
``(vii) the basis of any semiconductor
manufacturing property.''.
(3) Section 50(a)(2)(E) of such Code is amended by striking
``or 48C(b)(2)'' and inserting ``48C(b)(2), or 48D(d)''.
(4) Section 59A(b)(1)(B)(ii) of such Code is amended--
(A) in subclause (I), by striking ``plus'',
(B) by redesignating subclause (II) as subclause
(III), and
(C) by inserting after subclause (I) the following:
``(II) the credit allowed under
section 38 for the taxable year which
is properly allocable to the portion of
the investment credit determined under
section 46 that is properly allocable
to section 48D(a), plus''.
(5) The table of sections for subpart E of part IV of
subchapter A of chapter 1 of such Code is amended by inserting
after the item relating to section 48C the following new item:
``48D. Semiconductor manufacturing investment credit.''.
(d) Effective Date.--
(1) In general.--Except as provided under paragraph (2),
the amendments made by this section shall apply to property
placed in service after December 31, 2021, under rules similar
to the rules of section 48(m) of the Internal Revenue Code of
1986 (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990).
(2) Election for direct payment.--The amendments made by
subsection (b) shall be effective with respect to any election
made after December 31, 2021.
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