I 

108TH CONGRESS 

1ST SESSION H. R. 3562

To amend the Internal Revenue Code of 1986 to allow businesses a credit 

for security devices, assessments, and other security-related expenses. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 20, 2003

Mr. SHUSTER 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 businesses a credit for security devices, assessments, and 

other security-related expenses.

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Prevent Act of 2003’’. 

5 SEC. 2. BUSINESS CREDIT FOR SECURITY DEVICES, ASSESS6 MENTS, AND OTHER SECURITY-RELATED EX7 PENSES. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 
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1 1986 (relating to business related credits) is amended by 

2 adding at the end the following new section: 

3 ‘‘SEC. 45G. CERTAIN BUSINESS SECURITY EXPENDITURES. 

4 ‘‘(a) IN GENERAL.—For purposes of section 38, the 

5 building security credit determined under this section is 

6 an amount equal to the sum of—

7 ‘‘(1) 20 percent of the cost of each qualified 

8 building securities device placed in service by the 

9 taxpayer during the taxable year, 

10 ‘‘(2) 30 percent of the qualified security assess11 ment expenses paid or incurred by the taxpayer dur12 ing the taxable year, and 

13 ‘‘(3) 30 percent of the co-location property 

14 placed in service by the taxpayer during the taxable 

15 year. 

16 ‘‘(b) QUALIFIED BUILDING SECURITY DEVICE.—For 

17 purposes of this section—

18 ‘‘(1) QUALIFIED BUILDING SECURITY DE19 VICE.—The term ‘qualified building security device’ 

20 means a security device (to which section 168 ap21 plies)—

22 ‘‘(A) which is acquired by purchase (as de23 fined in section 179(d)(2)), and 
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1 ‘‘(B) which is used to provide security for 

2 any building used by the taxpayer in any trade 

3 or business. 

4 ‘‘(2) SECURITY DEVICE.—The term ‘security 

5 device’ means any of the following: 

6 ‘‘(A) An electronic access control device or 

7 system. 

8 ‘‘(B) Biometric identification or 

9 verification device or system. 

10 ‘‘(C) Closed-circuit television or other sur11 veillance and security cameras and equipment. 

12 ‘‘(D) Locks for doors and windows, includ13 ing tumbler, key, and numerical or other coded 

14 devices. 

15 ‘‘(E) Computers and software used to com16 bat cyberterrorism. 

17 ‘‘(F) Electronic alarm systems to provide 

18 detection notification and off-premises trans19 mission of an unauthorized entry, attack, or 

20 fire. 

21 ‘‘(G) An electronic device capable of track22 ing or verifying the presence of assets. 

23 ‘‘(H) High efficiency air filtering systems. 

24 ‘‘(I) Mechanical and non-mechanical vehi25 cle arresting barricades. 
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1 ‘‘(J) Metal detectors. 

2 ‘‘(K) Signal repeating devices for emer3 gency response personnel wireless communica4 tion systems. 

5 ‘‘(L) Components, wiring, system displays, 

6 terminals, auxiliary power supplies, computer 

7 systems, software, networking infrastructure 

8 and other equipment necessary or incidental to 

9 the operation of any item described in any of 

10 the preceding subparagraphs. 

11 ‘‘(c) QUALIFIED SECURITY ASSESSMENT EX12 PENSES.—For purposes of this section, the term ‘qualified 

13 security assessment expenses’ means, with respect to any 

14 business premises of the taxpayer, expenses for a security 

15 analysis of such premises, including—

16 ‘‘(1) the susceptibility of such premises to secu17 rity threats, 

18 ‘‘(2) the extent to which such threats can dam19 age or interrupt business operations at such prem20 ises, and 

21 ‘‘(3) identifying processes that ensure the con22 tinuity of business operations following such damage 

23 or interruption at such premises. 

24 ‘‘(d) CO-LOCATION PROPERTY.—The term ‘co-loca25 tion property’ means buildings and equipment the exclu-
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1 sive purpose of which is to replicate business operations 

2 of the taxpayer in the event of damage or interruption of 

3 such operations by a terrorism-related disaster, including 

4 all computer network, telecommunication network and 

5 business process equipment or any fraction thereof as con6 sidered necessary by the business. 

7 ‘‘(e) RECAPTURE OF CREDIT IN CERTAIN CASES.—

8 ‘‘(1) IN GENERAL.—If the taxpayer uses co-lo9 cation property for a purpose other than the purpose 

10 described in subsection (d) at any time during the 

11 5-year period beginning on the date that such prop12 erty is placed in service, then the tax imposed under 

13 this chapter for the taxable year in which such use 

14 occurs is increased by the credit recapture amount. 

15 ‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur16 poses of paragraph (1), the credit recapture amount 

17 is an amount equal to the sum of—

18 ‘‘(A) the aggregate decrease in the credits 

19 allowed to the taxpayer under section 38 for all 

20 prior taxable years which would have resulted if 

21 no credit had been determined under this sec22 tion with respect to such property, plus 

23 ‘‘(B) interest at the underpayment rate es24 tablished under section 6621 on the amount de25 termined under subparagraph (A) for each 
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1 prior taxable year for the period beginning on 

2 the due date for filing the return for the prior 

3 taxable year involved. 

4 No deduction shall be allowed under this chapter for 

5 interest described in subparagraph (B). 

6 ‘‘(3) SPECIAL RULES.—

7 ‘‘(A) TAX BENEFIT RULE.—The tax for 

8 the taxable year shall be increased under para9 graph (1) only with respect to credits allowed 

10 by reason of this section which were used to re11 duce tax liability. In the case of credits not so 

12 used to reduce tax liability, the carryforwards 

13 and carrybacks under section 39 shall be appro14 priately adjusted. 

15 ‘‘(B) NO CREDITS AGAINST TAX.—Any in16 crease in tax under this subsection shall not be 

17 treated as a tax imposed by this chapter for 

18 purposes of determining the amount of any 

19 credit under this chapter or for purposes of sec20 tion 55.’’. 

21 (b) CREDIT TREATED AS BUSINESS CREDIT.—Sec22 tion 38(b) of such Code is amended by striking ‘‘plus’’ 

23 at the end of paragraph (14), by striking the period at 

24 the end of paragraph (15) and inserting ‘‘, plus’’, and by 

25 adding at the end the following new paragraph: 
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1 ‘‘(16) the building security credit determined 

2 under section 45G(a).’’. 

3 (c) NO CARRYBACKS.—Subsection (d) of section 39 

4 of such Code (relating to carryback and carryforward of 

5 unused credits) is amended by adding at the end the fol6 lowing: 

7 ‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT

8 BEFORE EFFECTIVE DATE.—No portion of the un9 used business credit for any taxable year which is 

10 attributable to the building security credit deter11 mined under section 45G may be carried back to a 

12 taxable year ending before the date of the enactment 

13 of section 45G.’’. 

14 (d) CLERICAL AMENDMENT.—The table of sections 

15 for subpart D of part IV of subchapter A of chapter 1 

16 of such Code is amended by adding at the end the fol17 lowing new item:

‘‘45G. Certain business security expenditures.’’.

18 (e) EFFECTIVE DATE.—

19 (1) IN GENERAL.—Except as provided in para20 graph (2), the amendments made by this section 

21 shall apply to property placed in service after the 

22 date of the enactment of this Act in taxable years 

23 ending after such date. 

24 (2) ASSESSMENT EXPENSES.—The amendments 

25 made by this section shall apply to qualified security 
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1 assessment expenses paid or incurred after the date 

2 of the enactment of this Act in taxable years ending 

3 after such date.

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