A bill to amend sections 46(f) and 167(l) of the Internal Revenue Code of 1954 with respect to the treatment of public utility property.

(Reported to Senate from the Committee on Finance with amendment, S. Rept. 97-643)

Amends the Internal Revenue Code to provide that public utilities which utilize for rate-making purposes a procedure or adjustment which is inconsistent with methods used in estimating or projecting tax expenses, depreciation expenses, or reserves for deferred taxes shall not be considered to have complied with the normalization method of accounting required for computing the accelerated depreciation, accelerated cost recovery, and investment tax credit amounts of such utilities.

Authorizes the Secretary of the Treasury to prescribe regulations which define other procedures and adjustments which are inconsistent with the normalization method of accounting.

Provides that violations of normalization requirements shall not result in a public utility's loss of eligibility for accelerated depreciation or the investment tax credit if: (1) such violations involved the use of estimates, projections, or adjustments to the utility's rate of return; and (2) such estimates, adjustments, or projections only applied for periods ending prior to March 1, 1980, and were included in certain specified orders of a public utility commission.

Amends the Internal Revenue Code to allow an income tax deduction for the current fair market value of a literary, musical, or artistic composition created by the personal efforts of the taxpayer and contributed to a charitable organization. Disallows a fair market value deduction for a contribution of property which was produced while the taxpayer was a Government officer or employee if such property arose out of the performance of the taxpayer's duties.

Requires, as a condition of eligibility for a fair market value deduction, a statement by the donee of such property that the donee will use the property in a manner consistent with the purpose of its organization. Requires the taxpayer to get a written appraisal of the value of the property and attach it to the tax return.

Specifies the treatment of such deduction for purposes of the minimum tax.

Amends the Internal Revenue Code to reduce from one year to six months the holding period requirement for purposes of long-term capital gain treatment.