[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4871 Introduced in Senate (IS)]

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118th CONGRESS
  2d Session
                                S. 4871

  To amend the Internal Revenue Code of 1986 to provide a credit for 
     hazard mitigation projects in connection with certain working 
                          waterfront property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 31, 2024

 Mr. King (for himself and Mr. Cassidy) 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 provide a credit for 
     hazard mitigation projects in connection with certain working 
                          waterfront 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 ``Working Waterfront Disaster 
Mitigation Tax Credit Act''.

SEC. 2. WORKING WATERFRONT DISASTER MITIGATION PROJECT CREDIT.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48E the following new section:

``SEC. 48F. WORKING WATERFRONT DISASTER MITIGATION PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the working 
waterfront disaster mitigation project for any taxable year is an 
amount equal to 30 percent of the qualified investment for such taxable 
year.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--
                    ``(A) In general.--The amount of the credit allowed 
                under this section with respect to any taxpayer shall 
                not exceed $300,000.
                    ``(B) Aggregation rules.--All taxpayers treated as 
                a single employer under subsection (a) or (b) of 
                section 52 or subsection (m) or (o) of section 414 
                shall be treated as a single taxpayer for purposes of 
                subparagraph (A).
                    ``(C) Inflation adjustment.--In the case of any 
                taxable year beginning after December 31, 2025, the 
                $300,000 dollar amount in subparagraph (A) shall be 
                increased by an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `calendar year 2024' for 
                        `calendar year 2016' in subparagraph (A)(ii) 
                        thereof.
                If any amount as increased under the preceding sentence 
                is not a multiple of $10,000, such amount shall be 
                rounded to the nearest multiple of $10,000.
            ``(2) Time limitation.--No credit shall be allowed to a 
        taxpayer for a taxable year if such taxpayer has been allowed a 
        credit under this section (other than qualified progress 
        expenditures allowed under subsection (c)(3)) for any taxable 
        year in the 10-year period ending with the last day of such 
        taxable year.
    ``(c) Qualified Investment.--
            ``(1) In general.--For purposes of this section, the 
        qualified investment for any taxable year is the basis of 
        eligible property placed in service by the taxpayer during such 
        taxable year which is part of a qualifying working waterfront 
        disaster mitigation project.
            ``(2) Eligible property.--For purposes of this subsection, 
        the term `eligible property' means property--
                    ``(A) which is tangible property,
                    ``(B) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable, and
                    ``(C) which is--
                            ``(i) constructed, reconstructed, or 
                        erected by the taxpayer, or
                            ``(ii) acquired by the taxpayer if the 
                        original use of such property commences with 
                        the taxpayer.
            ``(3) Certain qualified progress expenditures rules made 
        applicable.--Rules similar to the rules of subsections (c)(4) 
        and (d) of section 46 (as in effect on the day before the 
        enactment of the Revenue Reconciliation Act of 1990) shall 
        apply for purposes of this section.
            ``(4) Coordination with rehabilitation credit.--The 
        qualified investment with respect to any qualifying working 
        waterfront disaster mitigation project for any taxable year 
        shall not include that portion of the basis of any project 
        which is attributable to qualified rehabilitation expenditures 
        (as defined in section 47(c)(2)).
    ``(d) Qualifying Working Waterfront Disaster Mitigation Project.--
For purposes of this section--
            ``(1) In general.--The term `qualifying working waterfront 
        disaster mitigation project' means any project--
                    ``(A) which is substantially designed in compliance 
                with--
                            ``(i) in the case of any project placed in 
                        service before January 1, 2032, the 2021 
                        International Code Council International 
                        Building Code, and
                            ``(ii) in the case of any project placed in 
                        service on or after such date, the most recent 
                        applicable International Code Council model 
                        code which has been affirmed by the Secretary 
                        for purposes of this section not later than 5 
                        years before the date such project is placed in 
                        service, and
                    ``(B) which designed to prevent or mitigate damage 
                to working waterfront property from natural hazards 
                using one or more of the following:
                            ``(i) Structural elevation.--The elevation 
                        of continuous foundation walls, the elevation 
                        of structures on open foundations (such as 
                        piles, piers, posts or columns), the elevation 
                        of structures on fill, the conversion of the 
                        second story, and other methods involving 
                        structural elevation as the Secretary may 
                        prescribe.
                            ``(ii) Flood risk reduction.--Stormwater 
                        management (including the construction, 
                        installation or modification of culverts, 
                        drainage pipes, pumping stations, floodgates, 
                        bioswales, detention and retention basins, and 
                        other stormwater management facilities), flood 
                        diversion and storage measures, slope 
                        stabilization or grading to direct flood waters 
                        away from businesses, flood protection measures 
                        for water and sanitary sewer systems or other 
                        utility systems, vegetation management for 
                        shoreline stabilization (coastal, riverine, 
                        riparian and other littoral zones), flood 
                        protection and stabilization measures for roads 
                        and bridges, and such other flood risk 
                        reduction methods as the Secretary may 
                        prescribe.
                            ``(iii) Shoreline stabilization.--Reducing 
                        the risk to structures or infrastructure from 
                        erosion and landslides (including through the 
                        installation of geosynthetics, surface and 
                        subsurface drainage, stabilizing sod, and 
                        vegetative buffer strips), preserving mature 
                        vegetation, decreasing slope angles, 
                        stabilizing with riprap and other means of 
                        slope anchoring, and other shoreline 
                        stabilization methods as the Secretary may 
                        prescribe.
                            ``(iv) Floodproofing.--Creating a space 
                        that is protected by walls that are 
                        substantially impermeable and resistant to 
                        flood loads, the use of flood-damage-resistant 
                        materials and construction techniques to 
                        minimize flood damage to areas below the flood 
                        protection level of a structure.
                            ``(v) Retrofitting.--Changes made to an 
                        existing structure to reduce or eliminate the 
                        possibility of damage to that structure from 
                        flooding, erosion, extreme temperatures, high 
                        winds, or other hazards.
                            ``(vi) Warning systems.--Equipment and 
                        systems to warn residents of impending hazards 
                        (including enhanced or reversed 911 systems), 
                        weather stations, rain gauges, flood alarms, 
                        and such other warning systems as the Secretary 
                        may prescribe.
            ``(2) Working waterfront property.--The term `working 
        waterfront property' means real property--
                    ``(A) which is located within the United States or 
                a possession of the United States, and
                    ``(B) which is used by the taxpayer to carry on an 
                active trade or business--
                            ``(i) which meets the gross receipts test 
                        of paragraph (3), and
                            ``(ii) which--
                                    ``(I) provides access to navigable 
                                waters to persons engaged in commercial 
                                fishing, recreational fishing and 
                                boating, boatbuilding, aquaculture, 
                                dredging, or other water-dependent 
                                activities, and
                                    ``(II) is used for or supports 
                                activities described in subclause (I).
            ``(3) Gross receipts test.--
                    ``(A) In general.--A trade or business meets the 
                gross receipts test of this paragraph if the average 
                annual gross receipts of such trade or business for the 
                3-taxable-year period preceding such taxable year does 
                not exceed $47,000,000.
                    ``(B) Aggregation rules.--All trades or business of 
                a taxpayer that are treated as a single employer under 
                subsection (a) or (b) of section 52 or subsection (m) 
                or (o) of section 414 shall be treated as one trade or 
                business for purposes of subparagraph (A).
                    ``(C) Other rules.--Rules similar to the rules of 
                section 448(c)(3) shall apply for purposes of this 
                paragraph.
                    ``(D) Inflation adjustment.--In the case of any 
                taxable year beginning after December 31, 2025, the 
                dollar amount in subparagraph (A) shall be increased by 
                an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins, 
                        by substituting `calendar year 2024' for 
                        `calendar year 2016' in subparagraph (A)(ii) 
                        thereof.
                If any amount as increased under the preceding sentence 
                is not a multiple of $1,000,000, such amount shall be 
                rounded to the nearest multiple of $1,000,000.
    ``(e) Regulations.--The Secretary, in consultation with the 
Administrator of the Federal Emergency Management Agency, shall issue 
such regulations or other guidance as may be necessary or appropriate 
to carry out the purposes of this section.''.
    (b) Inclusion in Investment Credit.--Section 46 of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
paragraph (6), by striking the period at the end of paragraph (7) and 
inserting ``, and'', and by adding at the end the following new 
paragraph:
            ``(8) the working waterfront disaster mitigation project 
        credit.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) of the Internal Revenue Code of 
        1986 is amended by striking ``and'' at the end of clause (vii), 
        by striking the period at the end of clause (viii) and 
        inserting ``, and'', and by adding at the end the following:
                            ``(ix) the basis of any property which is 
                        part of a qualifying working waterfront 
                        disaster mitigation project (as defined in 
                        section 48F(d)(2)).''.
            (2) Section 50(a)(2)(E) of such Code is amended by striking 
        ``or 48E(e)'' and inserting ``48E(e), or 48F(c)(2)''.
            (3) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 48E the following new item:

``Sec. 48F. Working waterfront disaster mitigation project credit.''.
    (d) Treatment of Possessions.--
            (1) Payments to possessions with mirror code tax systems.--
        The Secretary of the Treasury shall pay to each possession of 
        the United States which has a mirror code tax system amounts 
        equal to the loss (if any) to that possession by reason of the 
        amendments made by this section. Such amounts shall be 
        determined by the Secretary of the Treasury based on 
        information provided by the government of the respective 
        possession.
            (2) Payments to other possessions.--The Secretary of the 
        Treasury shall pay to each possession of the United States 
        which does not have a mirror code tax system amounts estimated 
        by the Secretary of the Treasury as being equal to the 
        aggregate benefits (if any) that would have been provided to 
        residents of such possession by reason of the amendments made 
        by this section if a mirror code tax system had been in effect 
        in such possession. The preceding sentence shall not apply 
        unless the respective possession has a plan, which has been 
        approved by the Secretary of the Treasury, under which such 
        possession will promptly distribute such payments to its 
        residents.
    (e) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2024, in taxable years ending after 
such date, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 1990).
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