II

107TH CONGRESS

1ST SESSION S. 1292

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

income tax for dry and wet cleaning equipment which uses non-hazardous

primary process solvents.

IN THE SENATE OF THE UNITED STATES

AUGUST 1, 2001

Mr. EDWARDS 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 allow a

credit against income tax for dry and wet cleaning equipment which uses non-hazardous primary process solvents.

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 ‘‘Small Business Pollu5 tion Prevention Opportunity Act of 2001’’.
2

•S 1292 IS

1 SEC. 2. CREDIT FOR DRY OR WET CLEANING EQUIPMENT

2 USING NONHAZARDOUS PRIMARY PROCESS

3 SOLVENTS.

4 (a) IN GENERAL.—Section 46 of the Internal Rev5 enue Code of 1986 (relating to amount of credit) is

6 amended by striking ‘‘and’’ at the end of paragraph (2),

7 by striking the period at the end of paragraph (3) and

8 inserting ‘‘, and’’, and by adding at the end thereof the

9 following paragraph:

10 ‘‘(4) the dry or wet cleaning equipment credit.’’.

11 (b) DRY OR WET CLEANING EQUIPMENT CREDIT.—

12 Section 48 of the Internal Revenue Code of 1986 (relating

13 to energy credit; reforestation credit) is amended by add14 ing at the end the following new subsection:

15 ‘‘(c) DRY OR WET CLEANING EQUIPMENT USING

16 NONHAZARDOUS PRIMARY PROCESS SOLVENTS.—

17 ‘‘(1) IN GENERAL.—For purposes of section 46,

18 the dry or wet cleaning equipment credit for any

19 taxable year is 20 percent of the basis of each quali20 fied dry or wet cleaning property placed in service

21 during the taxable year (40 percent of such basis in

22 the case of such property placed in service in an em23 powerment zone, enterprise community, or renewal

24 community).

25 ‘‘(2) LIMITATION.—The credit under this sub26 section for the taxable year shall apply to qualified
3

•S 1292 IS

1 dry or wet cleaning property placed in service during

2 such year at each business premise of the taxpayer.

3 ‘‘(3) QUALIFIED DRY OR WET CLEANING PROP4 ERTY.—For purposes of this subsection, the term

5 ‘qualified dry or wet cleaning property’ means equip6 ment designed primarily to clean textiles by profes7 sionals using special technology, detergents and ad8 ditives to minimize potential for adverse effects, or

9 appropriately dry or apply restorative finishing pro10 cedures to such textiles if—

11 ‘‘(A) such equipment does not use any haz12 ardous solvent as the primary process solvent,

13 ‘‘(B) the original use of such property

14 commences with the taxpayer, and

15 ‘‘(C) with respect to which depreciation (or

16 amortization in lieu of depreciation) is allow17 able.

18 ‘‘(4) PRIMARY PROCESS SOLVENT.—For pur19 poses of paragraph (3), the term ‘primary process

20 solvent’ means the primary liquid in which clothing,

21 other fabric, and sensitive textiles are cleaned or

22 which is used to appropriately dry or apply restora23 tive finishing procedures to textiles, cleaned, exclud24 ing detergent formulations.
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1 ‘‘(5) HAZARDOUS SOLVENT.—For purposes of

2 paragraph (3), the term ‘hazardous solvent’ means

3 any solvent any portion of which consists of a

4 chlorinated solvent, a volatile organic compound, or

5 any other hazardous regulated substance, or which

6 contains any substance determined by the Adminis7 trator of the Environmental Protection Agency, the

8 Director of the National Institute for Occupational

9 Safety and Health, the Director of the International

10 Agency for Research on Cancer, the Director of the

11 National Institute of Environmental Health

12 Sciences’ National Toxicology Program, or the direc13 tor of any other appropriate Federal agency to

14 possess—

15 ‘‘(A) carcinogenic potential in humans, or

16 ‘‘(B) bioaccumulative properties.’’.

17 (c) CREDIT ALLOWED AGAINST REGULAR AND MIN18 IMUM TAX.—

19 (1) IN GENERAL.—Section 38(c) of the Internal

20 Revenue Code of 1986 (relating to limitation based

21 on amount of tax) is amended by redesignating

22 paragraph (3) as paragraph (4) and by inserting

23 after paragraph (2) the following:

24 ‘‘(3) SPECIAL RULES FOR DRY OR WET CLEAN25 ING EQUIPMENT CREDIT.—
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•S 1292 IS

1 ‘‘(A) IN GENERAL.—In the case of the dry

2 or wet cleaning equipment credit—

3 ‘‘(i) this section and section 39 shall

4 be applied separately with respect to the

5 credit, and

6 ‘‘(ii) in applying paragraph (1) to the

7 credit—

8 ‘‘(I) subparagraph (A) thereof

9 shall not apply, and

10 ‘‘(II) the limitation under para11 graph (1) (as modified by subclause

12 (I)) shall be reduced by the credit al13 lowed under subsection (a) for the

14 taxable year (other than the dry or

15 wet cleaning equipment credit).

16 ‘‘(B) DRY OR WET CLEANING EQUIPMENT

17 CREDIT.—For purposes of this subsection, the

18 term ‘dry or wet cleaning equipment credit’

19 means the credit allowable under subsection (a)

20 by reason of section 46(4).’’.

21 (2) CONFORMING AMENDMENT.—Subclause (II)

22 of section 38(c)(2)(A)(ii) of such Code is amended

23 by inserting ‘‘or the dry or wet cleaning equipment

24 credit’’ after ‘‘employment credit’’.

25 (d) CLERICAL AMENDMENTS.—
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•S 1292 IS

1 (1) The section heading for section 48 of the

2 Internal Revenue Code of 1986 is amended to read

3 as follows:

4 ‘‘SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; DRY

5 OR WET CLEANING EQUIPMENT CREDIT.’’.

6 (2) The item relating to section 48 in the table

7 of sections for subpart E of part IV of subchapter

8 A of chapter 1 of such Code is amended to read as

9 follows:

‘‘Sec. 48. Energy credit; reforestation credit; dry or wet cleaning

equipment credit.’’.

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

11 this section shall apply to property placed in service on

12 or after January 1, 2001.

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