Ordinary and necessary business expense deduction for contributions to regional infrastructure improvement zones

(a)

In general

Section 162 of the Internal Revenue Code of 1986 (relating to trade or business expenses) is amended by redesignating subsection (p) as subsection (q) and by inserting after subsection (o) the following new subsection:

(p)

Contributions to regional infrastructure improvement zones

For purposes of this subtitle— (1)

In general

At the election of the taxpayer, any qualified regional infrastructure improvement zone contribution made by such taxpayer in any taxable year— (A)shall be treated as an ordinary and necessary expense paid or incurred during such taxable year in carrying on a trade or business, (B)shall not be treated as chargeable to capital account, and (C)shall not be treated as a charitable contribution for purposes of section 170. (2)

Qualified regional infrastructure improvement zone contribution

For purposes of this subsection— (A)

In general

The term qualified regional infrastructure improvement zone contribution means any contribution to a qualified regional infrastructure improvement zone— (i)by a taxpayer using real property (whether owned or leased) within such zone, (ii)used for public infrastructure located within such zone— (I)which is provided for in the long-range infrastructure plans for such zone approved by the multi-jurisdictional regional planning organization which created and designated such zone, or (II)which is consistent with any other long-range plans and is certified by the chief executive of, and the local governments represented by, such organization as appropriate and clearly beneficial to the public. (B)

Qualified regional infrastructure improvement zone

(i)

In general

The term qualified regional infrastructure improvement zone means any zone— (I)created and designated by a multi-jurisdictional regional planning organization empowered under Federal, State or local laws to perform such planning, through the filing of a certificate of designation with the Secretary or the Secretary's designee and with the Attorney General of each State in which the proposed zone is to be located, (II)located only within the boundaries of the political subdivisions represented by such organization, and (III)administered by an incorporated or unincorporated association designated by the such organization, the members of which are businesses and individuals— (aa)located within the proposed zone or political subdivisions the boundaries of which include all or any portion of the proposed zone, and (bb)who voluntarily join such association. (ii)

Zone establishment in absence of multi-jurisdictional regional planning organization

In the absence of a multi-jurisdictional regional planning organization, such term means any zone created and designated by any local government or consortia of local governments certifying to the Secretary or the Secretary's designee that such zone meets the criteria to be a qualified regional infrastructure improvement zone in that the projects within the zone are— (I)under the auspices of a local governmental agency, (II)pursuant to a plan of that agency, (III)managed by the agency's fiscal agent to ensure the implementation complies with all Federal, State and local laws, and (IV)subject to public review through at least 2 public hearings. (C)

Multi-jurisdictional regional planning organization

(i)

In general

The term multi-jurisdictional regional planning organization means any regional planning organization which— (I)is governed by a policy board of local government officials from units of general local government with additional representation of other State, local, business, and community leaders, (II)represents all or part of a metropolitan statistical area or micropolitan statistical area, (III)is authorized under Federal, State, or local law to carry out planning activities. (ii)

Organizations specifically included

Such term shall include— (I)any metropolitan planning organization (as defined by section 134(b) of title 23, United States Code, or section 5303(b) of title 49, United States Code), (II)any multi-service regional organization with State and locally defined boundaries that is accountable to a unit of general local government, administers more than one Federal, State, or local program, performs planning functions, and provides professional technical assistance to the public and the local governments to which it is accountable, (III)any organization of local elected officials and representatives that cooperates with the State within which it is located to plan networks, and advise officials on planning, in rural areas that are not represented by a metropolitan planning organization and have a population of at least 5,000, (IV)any economic development district (as defined in section 3 of the Public Works and Economic Development Act of 1965 (42 U.S.C. 3122), and (V)any local development district (as defined in section 15101(2) of title 40, United States Code). (D)

Infrastructure

The term infrastructure means publicly owned and operated assets, including— (i)any highways, roadway, bridges, public transit systems, or intermodal transportation, (ii)any wastewater, drinking water, or storm water treatment facility (or facility related to such a facility), and (iii)any green infrastructure relating to any facility described in clause (ii). (3)

Termination

No election with respect to any contribution may be made under this subsection for any taxable year beginning more than 5 years after the date of the enactment of this subsection.

(b)

Conforming amendments

(1)Section 162(b) of the Internal Revenue Code is amended by striking No deduction and inserting Except as provided under subsection (p), no deduction. (2)Section 263(a)(1) of such Code is amended by striking or at the end of subparagraph (K), by striking the period at the end of subparagraph (L) and inserting , or, and by adding at the end the following new subparagraph:

(M)expenditures for which a deduction is allowed by reason of an election under section 162(p).

(3)Section 170(c) of such Code is amended by adding at the end the following new paragraph:

(6)Except as provided in section 162(p)(1)(C), a qualified regional infrastructure improvement zone (as defined in subsection 162(p)) for a purpose described in section 162(p)(2)(A)(ii).

(c)

Effective date

The amendments made by this section shall apply to contributions made after the date of the enactment of this Act.