< Back to S. 2897 (106th Congress, 1999–2000)

Text of A bill to amend the Internal Revenue Code of 1986 to allow the use of completed contract method of accounting ...

...method of accounting in the case of certain long-term naval vessel construction contracts.

This bill was introduced on July 20, 2000, in a previous session of Congress, but was not enacted. The text of the bill below is as of Jul 20, 2000 (Introduced).

Source: GPO

S 2897 IS

106th CONGRESS

2d Session

S. 2897

To amend the Internal Revenue Code of 1986 to allow the use of completed contract method of accounting in the case of certain long-term naval vessel construction contracts.

IN THE SENATE OF THE UNITED STATES

July 20, 2000

Mr. ROBB (for himself Mr. BREAUX, Ms. LANDRIEU, Ms. SNOWE, and Mr. WARNER) 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 allow the use of completed contract method of accounting in the case of certain long-term naval vessel construction contracts.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. MODIFICATION OF ACCOUNTING RULES FOR CERTAIN NAVAL LONG-TERM CONSTRUCTION CONTRACTS.

    (a) IN GENERAL- Section 460(e)(1) of the Internal Revenue Code of 1986 (relating to exception for certain construction contracts) is amended by striking ‘or’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ‘, or’, and by inserting after subparagraph (B) the following new subparagraph:

        ‘(C) a qualified naval construction contract for which an election is made under paragraph (7).’.

    (b) QUALIFIED NAVAL CONSTRUCTION CONTRACT- Section 460(e) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

      ‘(7) QUALIFIED NAVAL CONSTRUCTION CONTRACT-

        ‘(A) IN GENERAL- A taxpayer may elect to use the completed contract method of accounting with respect to any qualified naval construction contract.

        ‘(B) DEFINITION- For purposes of paragraph (1), the term ‘qualified naval construction contract’ means a contract--

          ‘(i) entered into by the taxpayer with the Federal Government for the building, construction, reconstruction, or rehabilitation of a naval vessel, and

          ‘(ii) which the taxpayer estimates (at the time such contract is entered into) will be completed more than 24 months after the contract commencement date of such contract.

        ‘(C) EFFECT OF ELECTION- An election under this paragraph shall apply to all contracts of the taxpayer which are entered into during the taxable year in which the election is made or any subsequent taxable year.

        ‘(D) SEPARATE CONTRACT- For purposes of applying this paragraph, in the case of a qualified naval construction contract which covers more than 1 vessel, each vessel covered by the contract shall be treated as covered by a separate contract.

        ‘(E) EARNINGS AND PROFITS- Section 312(n)(6) shall not apply to a taxpayer which has made an election under this paragraph with respect to a qualified naval construction contract.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply with respect to contracts entered into on or after January 1, 2000.