SECTION 1. CREDIT FOR RECYCLING OR REMANUFACTURING EQUIPMENT.

    (a) In General.--Section 46 of the Internal Revenue Code of 1986 
(relating to amount of investment credit) is amended by striking 
``and'' at the end of paragraph (3), by striking the period at the end 
of paragraph (4) and inserting ``, and'', and by adding at the end the 
following new paragraph:
            ``(5) the reclamation credit.''.
    (b) Reclamation Credit.--Subpart E of part IV of subchapter A of 
chapter 1 of such Code (relating to rules for computing investment 
credit) is amended by inserting after section 48B the following new 
section:

``SEC. 48C. RECYCLING OR REMANUFACTURING EQUIPMENT.

    ``(a) In General.--For purposes of section 46, the reclamation 
credit for any taxable year is 20 percent of the basis of each 
qualified reclamation property placed in service during the taxable 
year.
    ``(b) Qualified Reclamation Property.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified reclamation property' means property--
                    ``(A) which is qualified recycling property or 
                qualified remanufacturing property,
                    ``(B) which is tangible property (not including a 
                building and its structural components),
                    ``(C) with respect to which depreciation (or 
                amortization in lieu of depreciation) is allowable,
                    ``(D) which has a useful life of at least 5 years, 
                and
                    ``(E) which is--
                            ``(i) acquired by purchase (as defined in 
                        section 179(d)(2)) by the taxpayer if the 
                        original use of such property commences with 
                        the taxpayer, or
                            ``(ii) constructed by or for the taxpayer.
            ``(2) Dollar limitation.--
                    ``(A) In general.--The basis of qualified 
                reclamation property taken into account under paragraph 
                (1) for any taxable year shall not exceed $10,000,000 
                for a taxpayer.
                    ``(B) Treatment of controlled group.--For purposes 
                of subparagraph (A)--
                            ``(i) all component members of a controlled 
                        group shall be treated as one taxpayer, and
                            ``(ii) the Secretary shall apportion the 
                        dollar limitation in such subparagraph among 
                        the component members of such controlled group 
                        in such manner as he shall by regulation 
                        prescribe.
                    ``(C) Treatment of partnerships and s 
                corporations.--In the case of a partnership, the dollar 
                limitation in subparagraph (A) shall apply with respect 
                to the partnership and with respect to each partner. A 
                similar rule shall apply in the case of an S 
                corporation and its shareholders.
                    ``(D) Controlled group defined.--For purposes of 
                subparagraph (B), the term `controlled group' has the 
                meaning given such term by section 1563(a), except that 
                `more than 50 percent' shall be substituted for `at 
                least 80 percent' each place it appears in section 
                1563(a)(1).
    ``(c) Certain Progress Expenditure 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 date of the enactment of the Revenue 
Reconciliation Act of 1990) shall apply for purposes of this 
subsection.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Qualified recycling property.--The term `qualified 
        recycling property' means equipment used exclusively to 
        collect, distribute, or sort used ferrous or nonferrous metals. 
        The term does not include equipment used to collect, 
        distribute, or sort precious metals such as gold, silver, or 
        platinum unless such use is coincidental to the collection, 
        distribution, or sorting of other used ferrous or nonferrous 
        metals.
            ``(2) Qualified remanufacturing property.--The term 
        `qualified remanufacturing property' means equipment used 
        primarily by the taxpayer in the business of rebuilding or 
        remanufacturing a used product or part, but only if--
                    ``(A) the rebuilt or remanufactured product or part 
                includes 50 percent or less virgin material, and
                    ``(B) the equipment is not used primarily in a 
                process occurring after the product or part is rebuilt 
                or remanufactured.
    ``(e) Coordination With Rehabilitation and Energy Credits.--For 
purposes of this section--
            ``(1) the basis of any qualified reclamation property shall 
        be reduced by that portion of the basis of any property which 
        is attributable to qualified rehabilitation expenditures (as 
        defined in section 47(c)(2)) or to the energy percentage of 
        energy property (as determined under section 48(a)), and
            ``(2) expenditures taken into account under either section 
        47 or 48(a) shall not be taken into account under this 
        section.''.
    (c) Special Basis Adjustment Rule.--Paragraph (3) of section 50(c) 
of such Code (relating to basis adjustment to investment credit 
property) is amended by inserting ``or reclamation credit'' after 
``energy credit''.
    (d) Clerical Amendment.--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 48B the following new 
item:

``Sec. 48C. Recycling or remanufacturing equipment.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to property placed in service on or after January 1, 2007.
Amends the Internal Revenue Code to allow a tax credit for investment in qualified reclamation property. Defines "qualified reclamation property" as tangible depreciable recycling or remanufacturing property with a useful life of at least five years. Limits the amount of such credit to 20% of the basis (not exceeding $10 million) of qualified reclamation property placed in service during a taxable year.
To amend the Internal Revenue Code of 1986 to allow a credit against income tax for recycling or remanufacturing equipment.