[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4913 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 4913
To amend the Internal Revenue Code of 1986 to encourage the use of
corrosion prevention and mitigation measures in the construction and
maintenance of business property.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 9, 2006
Mr. Fitzpatrick of Pennsylvania (for himself and Mr. Al Green of Texas)
introduced the following bill; which was referred to the Committee on
Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to encourage the use of
corrosion prevention and mitigation measures in the construction and
maintenance of business property.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Corrosion Prevention Act of 2006''.
SEC. 2. CREDIT FOR CORROSION PREVENTION AND MITIGATION MEASURES.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by adding at the end the following new section:
``SEC. 45N. CORROSION PREVENTION AND MITIGATION MEASURES.
``(a) In General.--For purposes of section 38, the corrosion
prevention and mitigation credit determined under this section for the
taxable year is an amount equal to 50 percent of the excess of--
``(1) qualified corrosion prevention and mitigation
expenditures with respect to qualified property, over
``(2) the amount such expenditures would have been, taking
into account amounts paid or incurred to satisfy Federal,
State, or local requirements.
``(b) Qualified Corrosion Prevention and Mitigation Expenditures.--
For purposes of this section--
``(1) In general.--The term `qualified corrosion prevention
and mitigation expenditures' means amounts paid or incurred by
the taxpayer during the taxable year for engineering design,
materials, and application and installation of corrosion
prevention and mitigation technology.
``(2) Certification may be required.--The Secretary shall
require by regulation that no amount be taken into account
under paragraph (1) for any design, material, application, or
installation unless such design, material, application, or
installation meets such certification requirements as the
Secretary shall require. Such requirements shall provide for
accreditation of certifying persons by an independent entity
with expertise in corrosion prevention and mitigation
technology.
``(3) Corrosion prevention and mitigation technology.--
Corrosion prevention and mitigation technology includes a
system comprised of at least one of the following: a corrosion-
protective coating or paint; chemical treatment; corrosion-
resistant metals; and cathodic protection. The Secretary from
time to time by regulations or other guidance modify the list
contained in the predecing sentence to reflect changes in
corrosion prevention and mitigation technology.
``(4) Qualified property.--The term `qualified property'
means property which is--
``(A) comprised primarily of a metal susceptible to
corrosion,
``(B) of a character subject to the allowance for
depreciation,
``(C) originally placed in service by the taxpayer,
and
``(D) located in the United States.
``(c) Recapture of Credit.--
``(1) In general.--If, as of the close of any taxable year,
there is a recapture event with respect to any qualified
property for which a credit was allowed under subsection (a),
the tax of the taxpayer under this chapter for such taxable
year shall be increased by an amount equal to the product of--
``(A) the applicable recapture percentage, and
``(B) the aggregate decrease in the credits allowed
under section 38 for all prior taxable years which
would have resulted if the qualified corrosion
prevention and mitigation expenditures of the taxpayer
with respect to such property had been zero.
``(2) Applicable recapture percentage.--
``(A) In general.--For purposes of this subsection,
the applicable recapture percentage shall be determined
from the following table:
``If the property ceases to be qualified property The recapture
within: percentage is:
(i) One full year after placed in service......... 100
(ii) One full year after the close of the period 80
described in clause (i)..........................
(iii) One full year after the close of the period 60
described in clause (ii).........................
(iv) One full year after the close of the period 40
described in clause (iii)........................
(v) One full year after the close of the period 20.
described in clause (iv).........................
``(B) Recapture event defined.--For purposes of
this subsection, the term `recapture event' means--
``(i) Cessation of use.--The cessation of
use of the qualified property.
``(ii) Change in ownership.--
``(I) In general.--Except as
provided in subclauses (II), the
disposition of a taxpayer's interest in
the qualified property with respect to
which the credit described in
subsection (a) was allowable.
``(II) Agreement to assume
recapture liability.--Subclause (I)
shall not apply if the person acquiring
the qualified property agrees in
writing to assume the recapture
liability of the person disposing of
the qualified property. In the event of
such an assumption, the person
acquiring the qualified property shall
be treated as the taxpayer for purposes
of assessing any recapture liability
(computed as if there had been no
change in ownership).
``(III) special rule for tax
exempt entities.--Subclause (II) shall
not apply to any tax exempt entity (as
defined in section 168(h)(2)).
``(iii) Special rules.--
``(I) Tax benefit rule.--The tax
for the taxable year shall be increased
under paragraph (1) only with respect
to credits allowed by reason of this
section which were used to reduce tax
liability. In the case of credits not
so used to reduce tax liability, the
carryforwards and carrybacks under
section 39 shall be appropriately
adjusted.
``(II) No credits against tax.--Any
increase in tax under this subsection
shall not be treated as a tax imposed
by this chapter for purposes of
determining the amount of any credit
under this chapter or for purposes of
section 55.
``(III) No recapture by reason of
casualty loss.--The increase in tax
under this subsection shall not apply
to a cessation of operation of the
property as qualified property by
reason of a casualty loss to the extent
such loss is restored by reconstruction
or replacement within a reasonable
period established by the Secretary.
``(d) Denial of Double Benefit.--For purposes of this subtitle--
``(1) Basis adjustments.--
``(A) In general.--If a credit is determined under
this section for any expenditure with respect to any
property, the increase in the basis of such property
which would (but for this subsection) result from such
expenditure shall be reduced by the amount of the
credit so allowed.
``(B) Certain dispositions.--If, during any taxable
year, there is a recapture amount determined with
respect to any property the basis of which was reduced
under subparagraph (A), the basis of such property
(immediately before the event resulting in such
recapture) shall be increased by an amount equal to
such recapture amount. For purposes of the preceding
sentence, the term `recapture amount' means any
increase in tax (or adjustment in carrybacks or
carryovers) determined under subsection (c).
``(2) Other deductions and credits.--No deduction or credit
shall be allowed under this chapter for any expense taken into
account under this section.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out this section.''.
(b) Credit Made Part of General Business Credit.--Subsection (b) of
section 38 of such Code (relating to current year business credit) is
amended by striking ``plus'' at the end of paragraph (29), by striking
the period at the end of paragraph (30) and inserting ``, plus'', and
by adding at the end thereof the following new paragraph:
``(31) Corrosion prevention and mitigation credit
determined under section 45N(a).''.
(c) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45M the following new
item:
``Sec. 45N. Corrosion prevention and mitigation measures.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
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