[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3316 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3316

  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 SENATE OF THE UNITED STATES

                             July 23, 2008

   Mr. Brown introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 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 2008''.

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. 45Q. 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--
                    ``(A) amounts paid or incurred to satisfy Federal, 
                State, or local requirements, and
                    ``(B) amounts paid for corrosion prevention 
                practices, as certified by a person certified pursuant 
                to subsection (b)(2).
    ``(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 may provide. 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 may modify the 
        list contained in the preceding 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 or owned 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                            The recapture
  qualified property within:                             percentage is:
        (i) One full year after such property is placed in         100 
            service.
        (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 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.
                                    ``(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.
    ``(f) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 2017.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 (relating to current 
year business credit) is amended--
            (1) by striking ``plus'' at the end of paragraph (31),
            (2) by striking the period at the end of paragraph (32) and 
        inserting ``, plus'', and
            (3) by adding at the end the following new paragraph:
            ``(33) the corrosion prevention and mitigation credit 
        determined under section 45Q(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 45P the 
following new item:

``Sec. 45Q. Corrosion prevention and mitigation measures.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.
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