To amend the Internal Revenue Code of 1986 to allow an ordinary and necessary business expense deduction for contributions to regional infrastructure improvement zones, and for other purposes.

SECTION 1. 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.

Summary: Amends the Internal Revenue Code to allow a taxpayer to elect, during the five-year period after the enactment of this Act, to treat any contribution to a qualified regional infrastructure improvement zone as a tax deductible ordinary and necessary business expense. Defines qualified regional infrastructure improvement zone as any zone created and designated by a multi-jurisdictional regional planning organization to undertake public infrastructure improvement projects.