SECTION 1. CREDIT FOR PROPERTY USED IN CERTAIN AGRICULTURE-RELATED 
              ACTIVITIES TO CONTROL ENVIRONMENTAL POLLUTION AND FOR 
              SOIL AND WATER CONSERVATION EXPENDITURES.

    (a) In General.--Section 46 of the Internal Revenue Code of 1986 
(relating to amount of investment credit) is amended by striking 
``and'' at the end of paragraph (2), by striking the period at the end 
of paragraph (3) and inserting ``, and'', and by adding at the end 
thereof the following paragraph:
            ``(4) in the case of an eligible taxpayer (as defined in 
        section 48(c)), the agricultural environmental credit.''
    (b) Agricultural Environmental Credit.--Section 48 of such Code is 
amended by adding at the end thereof the following new subsection:
    ``(c) Agricultural Environmental Credit.--
            ``(1) In general.--For purposes of section 46, in the case 
        of an eligible taxpayer, the agricultural environmental credit 
        for any taxable year is equal to the lesser of--
                    ``(A) the sum of--
                            ``(i) 15 percent of the portion of the 
                        basis of each agricultural environmental 
                        property placed in service by the taxpayer 
                        during such taxable year, and
                            ``(ii) 15 percent of the amount allowed as 
                        a deduction under section 175 (determined 
                        without regard to paragraph (4)(B)) for such 
                        taxable year, or
                    ``(B) the lesser of--
                            ``(i) $15,000, or
                            ``(ii) the excess of--
                                    ``(I) $150,000, over
                                    ``(II) the amount of the credit 
                                taken into account under this section 
                                by the taxpayer for taxable years 
                                preceding the taxable year.
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--For purposes of this 
                subsection,the term `eligible taxpayer' means any 
                taxpayer primarily engaged in a farming-related 
                business.
                    ``(B) Farming-related business.--For purposes of 
                this subsection, the term `farming-related business' 
                means--
                            ``(i) a farming business (as defined in 
                        section 263A(e)(4)),
                            ``(ii) a trade or business of mixing 
                        fertilizers from purchased fertilizer 
                        materials, and
                            ``(iii) a trade or business of the 
                        wholesale distribution of animal feeds, 
                        fertilizers, agricultural chemicals, 
                        pesticides, seeds, or other farm supplies 
                        (other than grains).
            ``(3) Agricultural environmental property.--
                    ``(A) In general.--For purposes of this subsection, 
                the term `agricultural environmental property' means 
                any new identifiable treatment facility--
                            ``(i) which is used in a farming-related 
                        business for the primary purpose of complying 
                        with Federal, State, and local environmental 
                        laws dealing with the abatement or control of 
                        water, soil, or atmospheric pollution or 
                        contamination by removing, altering, disposing, 
                        storing, or preventing the creation or emission 
                        of pollutants, contaminants, wastes, or heat, 
                        and
                            ``(ii) which does not significantly--
                                    ``(I) increase the output or 
                                capacity, extend the useful life, or 
                                reduce the total operating costs of 
                                plant or property to which such 
                                facility relates, or
                                    ``(II) alter the nature of any 
                                manufacturing or production process or 
                                facility.
                    ``(B) New identifiable treatment facility.--The 
                term `new identifiable treatment facility' has the 
                meaning given such term by section 169(d)(4)(A), 
                determined by substituting `December 31, 1993' for 
                `December 31, 1968'.
            ``(4) Special rules.--
                    ``(A) Coordination with energy and rehabilitation 
                credits.--This subsection shall not apply to--
                            ``(i) any property to the extent the basis 
                        of such property is attributable to qualified 
                        rehabilitation expenditures (as defined in 
                        section 47(c)(2)), or
                            ``(ii) energy property.
                    ``(B) Coordination with deduction for soil and 
                water conservation expenditures.--The amount which 
                would (but for this subparagraph) be allowed as a 
                deduction under section 175 for any taxable year shall 
                be reduced by the amount of the credit allowed by 
                paragraph (1)(B) for such year.
                    ``(C) Coordination with amortization of pollution 
                control facilities.--This subsection shall not apply to 
                any property to the extent an election is made under 
                section 169 with respect to the basis of such 
                property.''
    (c) Clerical Amendments.--
            (1) The section heading for section 48 of such Code is 
        amended to read as follows:

``SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; AGRICULTURAL 
              ENVIRONMENTAL CREDIT.''

            (2) The item relating to section 48 in the table of 
        sections for subpart E of part IV of subchapter A of chapter 1 
        of such Code is amended to read as follows:

                              ``Sec. 48. Energy credit; reforestation 
                                        credit; agricultural 
                                        environmental credit.''
    (d) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 1993, 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).
Amends the Internal Revenue Code to allow taxpayers primarily engaged in a farming-related business an investment tax credit for a percentage of:  (1) the costs of agricultural environmental property; and (2) the amount allowed as a deduction for soil and water conservation expenditures.
A bill to amend the Internal Revenue Code of 1986 to provide taxpayers engaged in certain agriculture-related activities a credit against income tax for property used to control environmental pollution and for soil and water conservation expenditures.