BASE PERIOD CATASTROPHE.

SEC. 517. BASE PERIOD CATASTROPHE. Section 459, as added by section 516 of this Act, is hereby amended by adding after subsection (a) thereof the following new subsection: “(b) Base Period Catastrophe.— “(1) Eligibility requirements.— A taxpayer shall be entitled to the benefits of this subsection only if it was engaged throughout its base period primarily in manufacturing and if— “(A) the taxpayer suffered during the last thirty-six months of its base period a catastrophe by fire, storm, explosion, or other casualty which destroyed or rendered inoperative a production facility constituting a complete plant or plants having in the hands of the taxpayer immediately prior to the catastrophe an adjusted basis equal to 15 per centum or more of the adjusted basis of all the taxpayer’s production facilities at such time; “(B) as a result of such catastrophe the taxpayer’s normal production or operation was substantially interrupted for a period of more than twelve consecutive months; and “(C) the taxpayer, prior to the end of its base period, replaced such production facility with a production facility which at the end of its base period had in its hands an adjusted basis not less than the adjusted basis immediately prior to the catastrophe of the production facility destroyed or rendered inoperative. “(2) Computation.— The taxpayer’s base period net income determined under this subsection shall be the amount computed under subparagraph (A) or the amount computed under subparagraph (B), whichever results in the lesser tax under this subchapter for the taxable year for which the tax is being computed: “(A) The amount computed under section 435 (d) by substituting for the excess profits net income for each month in the taxable year in which the catastrophe described in paragraph (1) occurred an amount equal to the aggregate, divided by the number of months in the base period preceding such taxable year, of the excess profits net income for each month (computed under section 435 (d) (1)) in the base period preceding such taxable year. The average base period net income computed under this subparagraph shall, for the purpose of section 435 (a) (1) (B), be considered an average base period net income determined under section 435 (d). “(B) The amount computed under section 435 (e) (2) (G) (i) and (ii).”