117 HR 2688 IH: To amend the Internal Revenue Code of 1986 to permanently allow a tax deduction for the mining, reclaiming, or recycling of critical minerals and metals from the United States, and to support the development of domestic supply chains for rare earth elements and other critical materials essential to United States technology, manufacturing, energy, healthcare and advanced medical devices, broadband infrastructure, transportation, and national defense. U.S. House of Representatives 2021-04-20 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
I117th CONGRESS1st SessionH. R. 2688IN THE HOUSE OF REPRESENTATIVESApril 20, 2021Mr. Gooden of Texas (for himself and Mr. Vicente Gonzalez of Texas) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Natural Resources, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concernedA BILLTo amend the Internal Revenue Code of 1986 to permanently allow a tax deduction for the mining, reclaiming, or recycling of critical minerals and metals from the United States, and to support the development of domestic supply chains for rare earth elements and other critical materials essential to United States technology, manufacturing, energy, healthcare and advanced medical devices, broadband infrastructure, transportation, and national defense.
1.
Permanent full expensing for property used to extract critical minerals and metals within the United States
(a)
In general
Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following:(11)
Special rule for property used for mining of critical minerals and metals within the United States
(A)
In general
In the case of any qualified property which is substantially involved in the mining, reclaiming, or recycling of critical minerals and metals from deposits in the United States—(i)paragraph (2)(A)(iii) shall not apply, and(ii)the applicable percentage shall be 100 percent.(B)
Critical minerals and metals
For purposes of this paragraph, the term critical minerals and metals means cerium, cobalt, dysprosium, erbium, europium, gadolinium, graphite, holmium, lanthanum, lithium, lutetium, manganese, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, vanadium, ytterbium, and yttrium..(b)
Effective date
The amendment made by this section shall apply to property placed in service after December 31, 2020.
2.
Permanent full expensing for nonresidential real property used for mining of critical minerals and metals within the United States
(a)
In general
Section 168 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:(n)
Special allowance for nonresidential real property used for mining of critical minerals and metals within the United States
(1)
New structures
In the case of any qualified real property—(A)(i)if such property is placed in service on or after the date of enactment of this subsection, the depreciation deduction provided by section 167(a) for the taxable year in which such property is placed in service shall include an allowance equal to 100 percent of the adjusted basis of such property, or(ii)if such property was placed in service before the date of enactment of this subsection, the depreciation deduction provided by section 167(a) for the first taxable year beginning after such date shall include an allowance equal to 100 percent of the adjusted basis of such property, and(B)the adjusted basis of such property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year.(2)
Qualified real property
For purposes of this subsection, the term qualified real property means any nonresidential real property which is substantially involved in the mining, reclaiming, or recycling of critical minerals and metals (as defined in subsection (k)(11)(B)) from deposits in the United States..(b)
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2020.
3.
Deduction for purchase of critical minerals and metals extracted within the United States
(a)
In general
Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 176 the following new section:
177.
Deduction for purchase of critical minerals and metals extracted within the United States
(a)
Allowance of deduction
There shall be allowed as a deduction for the taxable year an amount equal to 200 percent of the cost paid or incurred by the taxpayer for the purchase or acquisition of critical minerals and metals (as defined in section 168(k)(11)(B)) which have been extracted from deposits in the United States.(b)
Application with other deductions
No deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed or allowable under this section to the taxpayer.
.(b)
Conforming amendment
The table of sections for part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 176 the following new item: Sec. 177. Deduction for purchase of critical minerals and metals extracted within the United States..(c)
Effective date
The amendments made by this section shall apply to amounts paid or incurred after December 31, 2020.
4.
Increase in rate of percentage depletion for critical minerals and metals from deposits in the United States
(a)
In general
Section 613(b)(1) of the Internal Revenue Code of 1986 is amended by striking and at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ; and, and by adding at the end the following new subparagraph: (C)critical minerals and metals (as defined in section 168(k)(11)(B)) from deposits in the United States..(b)
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2020.
5.
Grant program for development of critical minerals and metals
(a)
Establishment
The Secretary of the Interior shall establish a grant program to finance pilot projects for the development of critical minerals and metals in the United States.(b)
Limitation on grant awards
A grant awarded under subsection (a) may not exceed $10,000,000.(c)
Economic viability
In awarding grants under subsection (a), the Secretary of the Interior shall give priority to projects the Secretary determines are likely to be economically viable over the long term.(d)
Secondary recovery
In awarding grants under subsection (a) during a fiscal year, the Secretary of the Interior shall seek to award not less than 30 percent of the total amount of grants awarded during that fiscal year for projects relating to secondary recovery of critical minerals and metals.(e)
Authorization of appropriations
There are authorized to be appropriated to the Secretary of the Interior $50,000,000 for each of fiscal years 2022 through 2025 to carry out the grant program established under subsection (a).(f)
Definitions
In this section:(1)
Critical minerals and metals
The term critical minerals and metals means cerium, cobalt, dysprosium, erbium, europium, gadolinium, graphite, holmium, lanthanum, lithium, lutetium, manganese, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, vanadium, ytterbium, and yttrium.(2)
Secondary recovery
The term secondary recovery means the recovery of minerals and metals from discarded end-use products or from waste products produced during the metal refining and manufacturing process, including from mine waste piles, acid mine drainage sludge, or byproducts produced through legacy mining and metallurgy activities.