HR 1770 IHCommentsClose CommentsPermalink

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.CommentsClose CommentsPermalink

March 29, 2007

Mr. CONAWAY (for himself, Mrs. JONES of Ohio, Mr. CULBERSON, Mr. ROGERS of Michigan, and Mr. BARTLETT of Maryland) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

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.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Corrosion Prevention Act of 2007'.CommentsClose CommentsPermalink

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:CommentsClose CommentsPermalink

`SEC. 45O. 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--CommentsClose CommentsPermalink





`(1) qualified corrosion prevention and mitigation expenditures with respect to qualified property, overCommentsClose CommentsPermalink





`(2) the amount such expenditures would have been, taking into account--CommentsClose CommentsPermalink





`(A) amounts paid or incurred to satisfy Federal, State, or local requirements, andCommentsClose CommentsPermalink





`(B) amounts paid for corrosion prevention practices, as certified by a person certified pursuant to subsection (b)(2).CommentsClose CommentsPermalink





`(b) Qualified Corrosion Prevention and Mitigation Expenditures- For purposes of this section--CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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. Such requirements shall provide for accreditation of certifying persons by an independent entity with expertise in corrosion prevention and mitigation technology.CommentsClose CommentsPermalink





`(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 may modify the list contained in the preceding sentence to reflect changes in corrosion prevention and mitigation technology.CommentsClose CommentsPermalink





`(4) QUALIFIED PROPERTY- The term `qualified property' means property which is--CommentsClose CommentsPermalink





`(A) comprised primarily of a metal susceptible to corrosion,CommentsClose CommentsPermalink





`(B) of a character subject to the allowance for depreciation,CommentsClose CommentsPermalink





`(C) originally placed in service or owned by the taxpayer, andCommentsClose CommentsPermalink





`(D) located in the United States.CommentsClose CommentsPermalink





`(c) Recapture of Credit-CommentsClose CommentsPermalink





`(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--CommentsClose CommentsPermalink





`(A) the applicable recapture percentage, andCommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(2) APPLICABLE RECAPTURE PERCENTAGE-CommentsClose CommentsPermalink





`(A) IN GENERAL- For purposes of this subsection, the applicable recapture percentage shall be determined from the following table:CommentsClose CommentsPermalink

(i) One full year after placed in serviceCommentsClose CommentsPermalink

--100CommentsClose CommentsPermalink

(ii) One full year after the close of the period described in clause (i)CommentsClose CommentsPermalink

--80CommentsClose CommentsPermalink

(iii) One full year after the close of the period described in clause (ii)CommentsClose CommentsPermalink

--60CommentsClose CommentsPermalink

(iv) One full year after the close of the period described in clause (iii)CommentsClose CommentsPermalink

--40CommentsClose CommentsPermalink

(v) One full year after the close of the period described in clause (iv)CommentsClose CommentsPermalink

--20.CommentsClose CommentsPermalink

`(B) RECAPTURE EVENT DEFINED- For purposes of this subsection, the term `recapture event' means--CommentsClose CommentsPermalink





`(i) CESSATION OF USE- The cessation of use of the qualified property.CommentsClose CommentsPermalink





`(ii) CHANGE IN OWNERSHIP-CommentsClose CommentsPermalink





`(I) IN GENERAL- Except as provided in subclause (II), the disposition of a taxpayer's interest in the qualified property with respect to which the credit described in subsection (a) was allowable.CommentsClose CommentsPermalink





`(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).CommentsClose CommentsPermalink





`(III) SPECIAL RULE FOR TAX EXEMPT ENTITIES- Subclause (II) shall not apply to any tax exempt entity (as defined in section 168(h)(2)).CommentsClose CommentsPermalink





`(iii) SPECIAL RULES-CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(d) Denial of Double Benefit- For purposes of this subtitle--CommentsClose CommentsPermalink





`(1) BASIS ADJUSTMENTS-CommentsClose CommentsPermalink





`(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.CommentsClose CommentsPermalink





`(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).CommentsClose CommentsPermalink





`(2) OTHER DEDUCTIONS AND CREDITS- No deduction or credit shall be allowed under this chapter for any expense taken into account under this section.CommentsClose CommentsPermalink





`(e) Regulations- The Secretary shall prescribe such regulations as may be appropriate to carry out this section.CommentsClose CommentsPermalink





`(f) Termination- This section shall not apply to any taxable year beginning after December 31, 2017.'.CommentsClose CommentsPermalink





(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 (30), by striking the period at the end of paragraph (31) and inserting `, plus', and by adding at the end thereof the following new paragraph:CommentsClose CommentsPermalink





`(32) Corrosion prevention and mitigation credit determined under section 45O(a).'.CommentsClose CommentsPermalink





(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 45N the following new item:CommentsClose CommentsPermalink





`Sec. 45O. Corrosion prevention and mitigation measures.'.CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.CommentsClose CommentsPermalink