269 of the basis of such property which is properly attributable to construction, reconstruction, or erection by the taxpayer on or before December 31, 1969), or “(ii) which was acquired by the taxpayer and the use of which commences with the tax payer on or before December 31, 1969. "(B) NORMALIZATION METHOD OF ACCOUNTING.-A taxpayer uses the normalization method of accounting if, and only if, he— "(i) computes his tax expense for purposes of establishing his cost of service (or of reflecting operating results in his regulated books of account) by using a method of depreciation other than the method he used for purposes of computing his allowance for depreciation under this section, and "(ii) makes adjustments to a reserve for deferred taxes to reflect the deferral of taxes resulting from the use of such different methods of depreciation. "(C) STRAIGHT LINE METHOD.-The term 'straight line method' includes any method determined by the Secretary or his delegate to result in a reasonable allowance under subsection (a), other 1 2 3 4 5 270 than (i) a declining balance method, (ii) the sum of the years-digits method or, (iii) any other method allowable solely by reason of the application of subsection (b) (4) or paragraph (1) (C) of sub section (j)." 6 (b) EFFECTIVE DATE.-The amendment made by sub7 section (a) shall apply with respect to taxable years ending 8 after July 22, 1969. 9 SEC. 452. EFFECT ON EARNINGS AND PROFITS. 10 Section 312 (relating to effect on earnings and profits) 11 is amended by adding at the end thereof the following new 12 subsection: "(m) EFFECT ON EARNINGS AND PROFITS OF DEPRE "(1) For the purpose of computing its earnings and profits with respect to any taxable year beginning after June 30, 1972, a corporation shall use the aggregate amount of depreciation which would be allowable with respect to such year if depreciation had been computed under "(A) the straight line method, or "(B) a method determined by the Secretary or 1 2 3 4 5 6 7 8 9 10 11 12 13 271 his delegate to result in a reasonable allowance under section 167 (a), not including or "(i) any declining balance method, "(ii) the sum of the years-digits method, 66 "(iii) any other method allowable solely by reason of the application of subsection (b) (4), (j) (1) (C), or (m) of section 167. "(2) The provisions of paragraph (1) shall apply notwithstanding the use, by a corporation, of methods of depreciation otherwise allowable under section 167 or 179, and notwithstanding an election, by a corporation, of the amortization deduction under section 168." 14 Subtitle G-Alternative Capital Gain 15 Rate for Corporations 16 SEC. 461. INCREASE OF RATE. 17 (a) IN GENERAL.-Section 1201 (a) (relating to alter 18 native tax in the case of corporations) is amended by striking 19 out the last sentence of subsection (a), and by amending 20 paragraph (2) to read as follows: 21 "(2) an amount equal to 30 percent of such excess" 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 272 (1) Section 802 (a) (2) (B) (relating to alternative tax in case of capital gains of life insurance com panies) is amended by striking out "25 percent" and inserting in lieu thereof "30 percent". (2) Section 852 (b) (3) (relating to method of taxation of regulated investment companies and their shareholders in the case of capital gains) is amended: (A) by striking out "25 percent", wherever it appears in subparagraphs (A) and (D) (ii) of such section, and inserting in lieu thereof "30 percent", and (B) by striking out "75 percent", in subparagraph (D) (iii) of such section, and inserting in lieu thereof "70 percent". (3) Section 857 (b) (3) (A) (relating to imposition of tax in the case of capital gains of real estate investment trusts) is amended by striking "25 percent" and inserting in lieu thereof "30 percent". (c) EFFECTIVE DATE.-The amendments made by this 20 section shall apply to sales and other dispositions after July 21 31, 1969. In the case of a taxable year beginning before and 22 ending after July 31, 1969, the amendments made by this 23 section shall be applied in a manner to be prescribed by the 24 Secretary of the Treasury or his delegate. 273 1 TITLE V-ADJUSTMENTS AFFECT 2 3 4 ING INDIVIDUALS AND CORPO RATIONS Subtitle A-Natural Resources 5 SEC. 501. NATURAL RESOURCES. 6 7 8 9 10 (a) PERCENTAGE DEPLETION. (1) RATES.-Subsection (b) of section 613 (re lating to percentage depletion) is amended to read as follows: "(b) PERCENTAGE DEPLETION RATES.-The mines, 11 wells, and other natural deposits, and the percentages, re12 ferred to in subsection (a) are as follows: 23 13 14 15 16 "(1) 20 percent-oil and gas wells located in the United States, in its possessions, in the Commonwealth of Puerto Rico, or on the Outer Continental Shelf (within the meaning of section 2 of the Outer Conti 17 nental Shelf Lands Act, as amended and supplemented; 43 U.S.C. 1331). "(2) 17 percent— "(A) sulfur and uranium; and "(B) if from deposits in the United Statesanorthosite, clay, laterite, and nephelite syenite (to the extent that alumina and aluminum compounds |