I 

112TH CONGRESS 

2D SESSION H. R. 3780 

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. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 18, 2012 

Mr. DAVIS of Kentucky introduced the following bill; which was referred to 

the Committee on Ways and Means 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. ORDINARY AND NECESSARY BUSINESS EX4 PENSE DEDUCTION FOR CONTRIBUTIONS TO 

5 REGIONAL INFRASTRUCTURE IMPROVEMENT 

6 ZONES. 

7 (a) IN GENERAL.—Section 162 of the Internal Rev8 enue Code of 1986 (relating to trade or business expenses) 


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1 is amended by redesignating subsection (p) as subsection 

2 (q) and by inserting after subsection (o) the following new 

3 subsection: 

4 ‘‘(p) CONTRIBUTIONS TO REGIONAL INFRASTRUC5 TURE IMPROVEMENT ZONES.—For purposes of this sub6 title— 

7 ‘‘(1) IN GENERAL.—At the election of the tax8 payer, any qualified regional infrastructure improve9 ment zone contribution made by such taxpayer in 

10 any taxable year— 

11 ‘‘(A) shall be treated as an ordinary and 

12 necessary expense paid or incurred during such 

13 taxable year in carrying on a trade or business, 

14 ‘‘(B) shall not be treated as chargeable to 

15 capital account, and 

16 ‘‘(C) shall not be treated as a charitable 

17 contribution for purposes of section 170. 

18 ‘‘(2) QUALIFIED REGIONAL INFRASTRUCTURE

19 IMPROVEMENT ZONE CONTRIBUTION.—For purposes 

20 of this subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘qualified 

22 regional infrastructure improvement zone con23 tribution’ means any contribution to a qualified 

24 regional infrastructure improvement zone— 


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1 ‘‘(i) by a taxpayer using real property 

2 (whether owned or leased) within such 

3 zone, 

4 ‘‘(ii) used for public infrastructure lo5 cated within such zone— 

6 ‘‘(I) which is provided for in the 

7 long-range infrastructure plans for 

8 such zone approved by the multi-juris9 dictional regional planning organiza10 tion which created and designated 

11 such zone, or 

12 ‘‘(II) which is consistent with any 

13 other long-range plans and is certified 

14 by the chief executive of, and the local 

15 governments represented by, such or16 ganization as appropriate and clearly 

17 beneficial to the public. 

18 ‘‘(B) QUALIFIED REGIONAL INFRASTRUC19 TURE IMPROVEMENT ZONE.— 

20 ‘‘(i) IN GENERAL.—The term ‘quali21 fied regional infrastructure improvement 

22 zone’ means any zone— 

23 ‘‘(I) created and designated by a 

24 multi-jurisdictional regional planning 

25 organization empowered under FedVerDate Mar 15 2010 23:58 Jan 18, 2012 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3780.IH H3780

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1 eral, State or local laws to perform 

2 such planning, through the filing of a 

3 certificate of designation with the Sec4 retary or the Secretary’s designee and 

5 with the Attorney General of each 

6 State in which the proposed zone is to 

7 be located, 

8 ‘‘(II) located only within the 

9 boundaries of the political subdivisions 

10 represented by such organization, and 

11 ‘‘(III) administered by an incor12 porated or unincorporated association 

13 designated by the such organization, 

14 the members of which are businesses 

15 and individuals— 

16 ‘‘(aa) located within the pro17 posed zone or political subdivi18 sions the boundaries of which in19 clude all or any portion of the 

20 proposed zone, and 

21 ‘‘(bb) who voluntarily join 

22 such association. 

23 ‘‘(ii) ZONE ESTABLISHMENT IN AB24 SENCE OF MULTI-JURISDICTIONAL RE25 GIONAL PLANNING ORGANIZATION.—In the 


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1 absence of a multi-jurisdictional regional 

2 planning organization, such term means 

3 any zone created and designated by any 

4 local government or consortia of local gov5 ernments certifying to the Secretary or the 

6 Secretary’s designee that such zone meets 

7 the criteria to be a qualified regional infra8 structure improvement zone in that the 

9 projects within the zone are— 

10 ‘‘(I) under the auspices of a local 

11 governmental agency, 

12 ‘‘(II) pursuant to a plan of that 

13 agency, 

14 ‘‘(III) managed by the agency’s 

15 fiscal agent to ensure the implementa16 tion complies with all Federal, State 

17 and local laws, and 

18 ‘‘(IV) subject to public review 

19 through at least 2 public hearings. 

20 ‘‘(C) MULTI-JURISDICTIONAL REGIONAL

21 PLANNING ORGANIZATION.— 

22 ‘‘(i) IN GENERAL.—The term ‘multi23 jurisdictional regional planning organiza24 tion’ means any regional planning organi25 zation which— 


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1 ‘‘(I) is governed by a policy board 

2 of local government officials from 

3 units of general local government with 

4 additional representation of other 

5 State, local, business, and community 

6 leaders, 

7 ‘‘(II) represents all or part of a 

8 metropolitan statistical area or 

9 micropolitan statistical area, 

10 ‘‘(III) is authorized under Fed11 eral, State, or local law to carry out 

12 planning activities. 

13 ‘‘(ii) ORGANIZATIONS SPECIFICALLY

14 INCLUDED.—Such term shall include— 

15 ‘‘(I) any metropolitan planning 

16 organization (as defined by section 

17 134(b) of title 23, United States 

18 Code, or section 5303(b) of title 49, 

19 United States Code), 

20 ‘‘(II) any multi-service regional 

21 organization with State and locally de22 fined boundaries that is accountable 

23 to a unit of general local government, 

24 administers more than one Federal, 

25 State, or local program, performs 


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1 planning functions, and provides pro2 fessional technical assistance to the 

3 public and the local governments to 

4 which it is accountable, 

5 ‘‘(III) any organization of local 

6 elected officials and representatives 

7 that cooperates with the State within 

8 which it is located to plan networks, 

9 and advise officials on planning, in 

10 rural areas that are not represented 

11 by a metropolitan planning organiza12 tion and have a population of at least 

13 5,000, 

14 ‘‘(IV) any economic development 

15 district (as defined in section 3 of the 

16 Public Works and Economic Develop17 ment Act of 1965 (42 U.S.C. 3122), 

18 and 

19 ‘‘(V) any local development dis20 trict (as defined in section 15101(2) 

21 of title 40, United States Code). 

22 ‘‘(D) INFRASTRUCTURE.—The term ‘infra23 structure’ means publicly owned and operated 

24 assets, including— 


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1 ‘‘(i) any highways, roadway, bridges, 

2 public transit systems, or intermodal trans3 portation, 

4 ‘‘(ii) any wastewater, drinking water, 

5 or storm water treatment facility (or facil6 ity related to such a facility), and 

7 ‘‘(iii) any green infrastructure relating 

8 to any facility described in clause (ii). 

9 ‘‘(3) TERMINATION.—No election with respect 

10 to any contribution may be made under this sub11 section for any taxable year beginning more than 5 

12 years after the date of the enactment of this sub13 section.’’. 

14 (b) CONFORMING AMENDMENTS.— 

15 (1) Section 162(b) of the Internal Revenue 

16 Code is amended by striking ‘‘No deduction’’ and in17 serting ‘‘Except as provided under subsection (p), no 

18 deduction’’. 

19 (2) Section 263(a)(1) of such Code is amended 

20 by striking ‘‘or’’ at the end of subparagraph (K), by 

21 striking the period at the end of subparagraph (L) 

22 and inserting ‘‘, or’’, and by adding at the end the 

23 following new subparagraph: 


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1 ‘‘(M) expenditures for which a deduction is 

2 allowed by reason of an election under section 

3 162(p).’’. 

4 (3) Section 170(c) of such Code is amended by 

5 adding at the end the following new paragraph: 

6 ‘‘(6) Except as provided in section 

7 162(p)(1)(C), a qualified regional infrastructure im8 provement zone (as defined in subsection 162(p)) for 

9 a purpose described in section 162(p)(2)(A)(ii).’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to contributions made after the 

12 date of the enactment of this Act. 

Æ 


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