erty (as the case may be) bears to his aggregate qualified investment.

If the proportion referred to in clause (ii) is 75 percent or more, the applicable percentage of the taxpayer for the taxable year shall be 90 percent (80 percent in the case of a taxable year ending in 1980).

"(C) TENTATIVE PERCENTAGE.-For purposes of subparagraph (B), the tentative percentage shall be determined under the following table:

"If the taxable year

1979

1980

ends in:

The tentative percentage is:

40 30

"(D) RAILROAD PROPERTY DEFINED.-For purposes of this paragraph, the term 'railroad property' means section 38 property used by the taxpayer directly in connection with the trade or business carried on by the taxpayer of operating a railroad (including a railroad switching or terminal company).

“(E) AIRLINE PROPERTY DEFINED.-For purposes of this paragraph, the term 'airline property' means section 38 property used by the taxpayer directly in connection with the trade or business carried on by the taxpayer of the furnishing or sale of transportation as a common carrier by air subject to the jurisdiction of the Civil Aeronautics Board or the Federal Aviation Administration."

(c) REPEAL OF CERTAIN OBSOLETE PROVISIONS.

(1) Subsections (h), (i), and (j) of section 48 and sections 49 and 50 are hereby repealed.

(2) Paragraphs (1) and (2) of section 46(f) and subparagraph (B) of section 48(a)(7) are each amended by striking out "described in section 50".

(3) Subparagraph (A) of section 48(a)(7) is amended by striking out "(other than pre-termination property)".

(4) Subsection (i) of section 167 is hereby repealed.

(5) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended by striking out the items relating to sections 49 and 50.

(d) EFFECTIVE DATE.-The amendments made by this section shall apply to taxable years ending after December 31, 1978.

SEC. 313. INVESTMENT CREDIT FOR POLLUTION CONTROL FACILITIES.

(a) IN GENERAL.-Paragraph (5) of section 46(c) (relating to applicable percentage in the case of certain pollution control facilities) is amended to read as follows:

"(5) APPLICABLE PERCENTAGE IN THE CASE OF CERTAIN POLLUTION CONTROL FACILITIES.

(A) IN GENERAL.-Notwithstanding paragraph (2), in the case of property

"(i) with respect to which an election under section 169 applies, and

"(ii) the useful life of which (determined without regard to section 169) is not less than 5 years.

100 percent shall be the applicable percentage for purposes of applying paragraph (1) with respect to so much of the adjusted basis of the property as (after the application of section 169(f)) constitutes the amortizable basis for purposes of section 169.

"(B) SPECIAL RULE WHERE PROPERTY IS FINANCED BY INDUSTRIAL DEVELOPMENT BONDS.-To the extent that any property is financed by the proceeds of an industrial development bond (within the meaning of section 103(b)(2)) the interest on which is exempt from tax under section 103, subparagraph (A) shall be applied by substituting '50 percent' for '100 percent'."

(b) EFFECTIVE DATE.-The amendment made by subsection (a) shall apply to

(1) property acquired by the taxpayer after December 31, 1978, and

(2) property the construction, reconstruction, or erection of which was completed by the taxpayer after December 31, 1978 (but only to the extent of the basis thereof attributable to construction, reconstruction, or erection after such date).

SEC. 314. INVESTMENT CREDIT FOR CERTAIN SINGLE PURPOSE AGRICULTURAL OR HORTICULTURAL STRUCTURES.

(a) GENERAL RULE.-Paragraph (1) of section 48(a) (defining section 38 property) is amended by striking out the period at the end of subparagraph (C) and inserting in lieu thereof ", or" and by inserting after subparagraph (C) the following new subparagraph:

"(D) single purpose agricultural or horticultural structures."

(b) DEFINITION OF SINGLE PURPOSE AGRICULTURAL OR HORTICULTURAL STRUCTURES.-Section 48 is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection:

"(p) SINGLE PURPOSE AGRICULTURAL OR HORTICULTURAL STRUCTURE DEFINED.-For purposes of this section

"(1) IN GENERAL.-The term 'single purpose agricultural or horticultural structure' means

"(A) a single purpose livestock structure, and
"(B) a single purpose horticultural structure.

“(2) SINGLE PURPOSE LIVESTOCK STRUCTURE.-The term 'single purpose livestock structure' means any enclosure or structure specifically designed, constructed, and used

"(A) for housing, raising, and feeding a particular type of livestock and their produce, and

"(B) for housing the equipment (including any replacements) necessary for the housing, raising, and feeding referred to in subparagraph (A).

"(3) SINGLE PURPOSE HORTICULTURAL STRUCTURE.-The term 'single purpose horticultural structure' means

"(A) a greenhouse specifically designed, constructed, and used for the commerical production of plants, and

"(B) a structure specifically designed, constructed and used for the commercial production of mushrooms.

"(4) STRUCTURES WHICH INCLUDE WORK SPACE.-An enclosure or structure which provides work space shall be treated as a single purpose agricultural or horticultural structure only if such work space is solely for

"(A) the stocking, caring for, or collecting of livestock or plants (as the case may be) or their produce,

"(B) the maintenance of the enclosure or structure, and "(C) the maintenance or replacement of the equipment or stock enclosed or housed therein.

“(5) SPECIAL RULE FOR APPLYING SECTION 47.-For purposes of section 47, any single purpose agricultural or horticultural structure shall be treated as meeting the requirements of this subsection for any period during which such structure is held for the use under which it qualified under this subsection.

"(6) LIVESTOCK.-The term 'livestock' includes poultry. (c) EFFECTIVE DATE.-The amendments made by subsections (a) and (b) shall apply to taxable years ending after August 15, 1971.

SEC. 315. INVESTMENT CREDIT ALLOWED FOR CERTAIN REHABILITATED BUILDINGS.

(a) IN GENERAL.-Paragraph (1) of section 48(a) (defining section 38 property) is amended by striking out the period at the end of subparagraph (D) and by inserting in lieu thereof "; or" and the following new subparagraph:

"(E) in the case of a qualified rehabilitated building, that portion of the basis which is attributable to qualified rehabilitation expenditures (within the meaning of subsection (g))."

(b) QUALIFIED REHABILITATED BUILDINGS DEFINED.-Section 48 is amended by inserting after subsection (f) the following new subsection:

"(g) SPECIAL RULES FOR QUALIFIED REHABILITATED BUILDINGS.-For purposes of this subpart

“(1) QUALIFIED REHABILITATED BUILDING DEFINED.

(A) IN GENERAL.-The term 'qualified rehabilitated building' means any building (and its structural components)— "(i) which has been rehabilitated,

"(ii) which was placed in service before the beginning of the rehabilitation, and

"(iii) 75 percent or more of the existing external walls of which are retained in place as external walls in the rehabilitation process.

"(B) 20 YEARS MUST HAVE ELAPSED SINCE CONSTRUCTION OR PRIOR REHABILITATION.-A building shall not be a qualified rehabilitated building unless there is a period of at least 20 years between—

"(i) the date the physical work on this rehabilitation of the building began, and

“(ii) the later of—

"(I) the date such building was first placed in service, or

"(II) the date such building was placed in service in connection with a prior rehabilitation with respect to which a credit was allowed by reason of subsection (a)(1)(E).

"(C) MAJOR PORTION TREATED AS SEPARATE BUILDING IN CERTAIN CASES.-Where there is a separate rehabilitation of a major portion of a building, such major portion shall be treated as a separate building.

"(D) REHABILITATION INCLUDES RECONSTRUCTION.-Rehabilitation includes reconstruction.

"(2) QUALIFIED REHABILITATION EXPENDITURE DEFINED.—

"(A) IN GENERAL.-The term 'qualified rehabilitation expenditure' means any amount properly chargeable to capital account which is incurred after October 31, 1978

"(i) for property (or additions or improvements to property) with a useful life of 5 years or more, and

"(ii) in connection with the rehabilitation of a qualified rehabilitated building.

"(B) CERTAIN EXPENDITURES NOT INCLUDED.—The term 'qualified rehabilitation expenditure' does not include

“(i) PROPERTY OTHERWISE SECTION 38 PROPERTY.—Any expenditure for property which constitutes section 38 property (determined without regard to subsection (a)(1)E).

"(ii) COST OF ACQUISITION.-The cost of acquiring any building or any interest therein.

"(iii) ENLARGEMENTS.-Any expenditure attributable to the enlargement of the existing building.

“(iv) CERTIFIED HISTORIC STRUCTURES.-Any expenditure attributable to the rehabilitation of a certified historic structure (within the meaning of section 191(d)(1)), unless the rehabilitation is a certified rehabilitation (within the meaning of section 191(d)(4)). "(3) PROPERTY TREATED AS NEW SECTION 38 PROPERTY.-Property which is treated as section 38 property by reason of subsection (a)(1)(E) shall be treated as new section 38 property."

(c) TECHNICAL AMENDMENT.-Paragraph (8) of section 48(a) (relating to amortized property) is amended by striking out “or 188" and inserting in lieu thereof "188, or 191".

(d) EFFECTIVE DATE.-The amendments made by this section shall apply to taxable years ending after October 31, 1978; except that the amendment made by subsection (c) shall only apply with respect to property placed in service after such date.

SEC. 316. TAX TREATMENT OF THE INVESTMENT CREDIT IN THE CASE OF COOPERATIVE ORGANIZATIONS.

(a) IN GENERAL.-Section 46 (relating to amount of credit) is amended by adding at the end thereof the following new subsection: "(h) SPECIAL RULES FOR COOPERATIVES.-In the case of a cooperative organization described in section 1381(a)—

"(1) that portion of the credit allowable to the organization under section 38 which the organization cannot use for the taxable year to which the qualified investment is attributable because of the limitation contained in subsection (a)(3) shall be allocated to the patrons of the organization,

"(2) section 47 (relating to certain dispositions, etc., of section 38 property) shall be applied as if any allocated portion of the credit had been retained by the organization, and

"(3) the rules necessary to carry out the purposes of this subsection shall be determined under regulations prescribed by the Secretary."

(b) CONFORMING AMENDMENTS.—

(1) Paragraph (1) of section 46(e) (relating to limitations in case of certain persons) is amended

(A) by adding "and" at the end of subparagraph (A), (B) by striking out "and" at the end of subparagraph (B), and

(C) by striking out subparagraph (C).

(2) Paragraph (2) of section 46(e) is amended

(A) by adding "and" at the end of subparagraph (A), (B) by striking out, ", and" at the end of subparagraph (B) and inserting in lieu thereof a period, and

(C) by striking out subparagraph (C).

(3) Section 1388 (relating to definitions and special rules for cooperative organizations) is amended by adding at the end thereof the following new subsection.

"(j) CROSS REFERENCE.

"For provisions relating to the apportionment of the investment credit between cooperative organizations and their patrons, see section 46(h).” (c) EFFECTIVE DATE.-The amendments made by this section shall apply to taxable years ending after October 31, 1978.

SEC. 317. TRANSFERS TO CONRAIL NOT TREATED AS DISPOSITIONS FOR PURPOSES OF THE INVESTMENT CREDIT.

(a) IN GENERAL.-Subsection (b) of section 47 (relating to certain disposition, etc., of section 38 property) is amended by striking out "or" at the end of paragraph (1), by striking out the period at the end of paragraph (2) and inserting in lieu thereof ", or", and by inserting after paragraph (2) the following new paragraph:

"(3) a transfer to which subsection (c) of section 374 (relating to exchanges under the final system plan for ConRail) applies.' (b) EFFECTIVE DATE.-The amendments made by subsection (a) shall apply to taxable years ending after March 31, 1976.

Subtitle C-Targeted Jobs Credit; WIN Credit

SEC. 321. TARGETED JOBS CREDIT.

(a) IN GENERAL.-Section 51 (relating to amount of credit) is amended to read as follows:

"SEC. 51. AMOUNT OF CREDIT.

"(a) DETERMINATION OF AMOUNT.-The amount of the credit allowable by section 44B 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. "(b) QUALIFIED WAGES DEFINED.-For purposes of this subpart"(1) IN GENERAL.-The term 'qualified wages' means the wages paid or incurred by the employer during the taxable year to individuals who are members of a targeted group.

"(2) QUALIFIED FIRST-YEAR WAGES.-The term 'qualified firstyear wages' means, with respect to any individual, qualified wages attributable to service rendered during the 1-year period beginning with the day the individual begins work for the employer (or, in the case of a vocational rehabilitation referral, the day the individual begins work for the employer on or after the beginning of such individual's rehabilitation plan).

"(3) QUALIFIED SECOND-YEAR WAGES.-The term 'qualified second-year wages' means, with respect to any individual, the qualified wages attributable to service rendered during the 1year period beginning on the day after the last day of the 1-year period with respect to such individual determined under paragraph (2).

"(4) ONLY FIRST $6,000 OF WAGES PER YEAR TAKEN INTO ACCOUNT.-The amount of the qualified first-year wages, and the amount of the qualified second-year wages, which may be taken into account with respect to any individual shall not exceed $6,000 per year.

"(c) WAGES DEFINED.-For purposes of this subpart