II 

118TH CONGRESS 

2D SESSION S. 4871 

To amend the Internal Revenue Code of 1986 to provide a credit for hazard 

mitigation projects in connection with certain working waterfront property. 

IN THE SENATE OF THE UNITED STATES 

JULY 31, 2024 

Mr. KING (for himself and Mr. CASSIDY) 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 provide 

a credit for hazard mitigation projects in connection with 

certain working waterfront property. 

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 ‘‘Working Waterfront 

5 Disaster Mitigation Tax Credit Act’’. 

6 SEC. 2. WORKING WATERFRONT DISASTER MITIGATION 

7 PROJECT CREDIT. 

8 (a) IN GENERAL.—Subpart E of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 48E the fol2 lowing new section: 

3 ‘‘SEC. 48F. WORKING WATERFRONT DISASTER MITIGATION 

4 PROJECT CREDIT. 

5 ‘‘(a) IN GENERAL.—For purposes of section 46, the 

6 working waterfront disaster mitigation project for any tax7 able year is an amount equal to 30 percent of the qualified 

8 investment for such taxable year. 

9 ‘‘(b) LIMITATIONS.— 

10 ‘‘(1) DOLLAR LIMITATION.— 

11 ‘‘(A) IN GENERAL.—The amount of the 

12 credit allowed under this section with respect to 

13 any taxpayer shall not exceed $300,000. 

14 ‘‘(B) AGGREGATION RULES.—All taxpayers 

15 treated as a single employer under subsection 

16 (a) or (b) of section 52 or subsection (m) or (o) 

17 of section 414 shall be treated as a single tax18 payer for purposes of subparagraph (A). 

19 ‘‘(C) INFLATION ADJUSTMENT.—In the 

20 case of any taxable year beginning after Decem21 ber 31, 2025, the $300,000 dollar amount in 

22 subparagraph (A) shall be increased by an 

23 amount equal to— 

24 ‘‘(i) such dollar amount, multiplied by 


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1 ‘‘(ii) the cost-of-living adjustment de2 termined under section 1(f)(3) for the cal3 endar year in which the taxable year be4 gins, by substituting ‘calendar year 2024’ 

5 for ‘calendar year 2016’ in subparagraph 

6 (A)(ii) thereof. 

7 If any amount as increased under the preceding 

8 sentence is not a multiple of $10,000, such 

9 amount shall be rounded to the nearest multiple 

10 of $10,000. 

11 ‘‘(2) TIME LIMITATION.—No credit shall be al12 lowed to a taxpayer for a taxable year if such tax13 payer has been allowed a credit under this section 

14 (other than qualified progress expenditures allowed 

15 under subsection (c)(3)) for any taxable year in the 

16 10-year period ending with the last day of such tax17 able year. 

18 ‘‘(c) QUALIFIED INVESTMENT.— 

19 ‘‘(1) IN GENERAL.—For purposes of this sec20 tion, the qualified investment for any taxable year is 

21 the basis of eligible property placed in service by the 

22 taxpayer during such taxable year which is part of 

23 a qualifying working waterfront disaster mitigation 

24 project. 


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1 ‘‘(2) ELIGIBLE PROPERTY.—For purposes of 

2 this subsection, the term ‘eligible property’ means 

3 property— 

4 ‘‘(A) which is tangible property, 

5 ‘‘(B) with respect to which depreciation (or 

6 amortization in lieu of depreciation) is allow7 able, and 

8 ‘‘(C) which is— 

9 ‘‘(i) constructed, reconstructed, or 

10 erected by the taxpayer, or 

11 ‘‘(ii) acquired by the taxpayer if the 

12 original use of such property commences 

13 with the taxpayer. 

14 ‘‘(3) CERTAIN QUALIFIED PROGRESS EXPENDI15 TURES RULES MADE APPLICABLE.—Rules similar to 

16 the rules of subsections (c)(4) and (d) of section 46 

17 (as in effect on the day before the enactment of the 

18 Revenue Reconciliation Act of 1990) shall apply for 

19 purposes of this section. 

20 ‘‘(4) COORDINATION WITH REHABILITATION

21 CREDIT.—The qualified investment with respect to 

22 any qualifying working waterfront disaster mitiga23 tion project for any taxable year shall not include 

24 that portion of the basis of any project which is atVerDate Sep 11 2014 04:56 Aug 28, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4871.IS S4871

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1 tributable to qualified rehabilitation expenditures (as 

2 defined in section 47(c)(2)). 

3 ‘‘(d) QUALIFYING WORKING WATERFRONT DIS4 ASTER MITIGATION PROJECT.—For purposes of this sec5 tion— 

6 ‘‘(1) IN GENERAL.—The term ‘qualifying work7 ing waterfront disaster mitigation project’ means 

8 any project— 

9 ‘‘(A) which is substantially designed in 

10 compliance with— 

11 ‘‘(i) in the case of any project placed 

12 in service before January 1, 2032, the 

13 2021 International Code Council Inter14 national Building Code, and 

15 ‘‘(ii) in the case of any project placed 

16 in service on or after such date, the most 

17 recent applicable International Code Coun18 cil model code which has been affirmed by 

19 the Secretary for purposes of this section 

20 not later than 5 years before the date such 

21 project is placed in service, and 

22 ‘‘(B) which designed to prevent or mitigate 

23 damage to working waterfront property from 

24 natural hazards using one or more of the fol25 lowing: 


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1 ‘‘(i) STRUCTURAL ELEVATION.—The 

2 elevation of continuous foundation walls, 

3 the elevation of structures on open founda4 tions (such as piles, piers, posts or col5 umns), the elevation of structures on fill, 

6 the conversion of the second story, and 

7 other methods involving structural ele8 vation as the Secretary may prescribe. 

9 ‘‘(ii) FLOOD RISK REDUCTION.— 

10 Stormwater management (including the 

11 construction, installation or modification of 

12 culverts, drainage pipes, pumping stations, 

13 floodgates, bioswales, detention and reten14 tion basins, and other stormwater manage15 ment facilities), flood diversion and storage 

16 measures, slope stabilization or grading to 

17 direct flood waters away from businesses, 

18 flood protection measures for water and 

19 sanitary sewer systems or other utility sys20 tems, vegetation management for shoreline 

21 stabilization (coastal, riverine, riparian and 

22 other littoral zones), flood protection and 

23 stabilization measures for roads and 

24 bridges, and such other flood risk reducVerDate Sep 11 2014 04:56 Aug 28, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4871.IS S4871

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1 tion methods as the Secretary may pre2 scribe. 

3 ‘‘(iii) SHORELINE STABILIZATION.— 

4 Reducing the risk to structures or infra5 structure from erosion and landslides (in6 cluding through the installation of 

7 geosynthetics, surface and subsurface 

8 drainage, stabilizing sod, and vegetative 

9 buffer strips), preserving mature vegeta10 tion, decreasing slope angles, stabilizing 

11 with riprap and other means of slope an12 choring, and other shoreline stabilization 

13 methods as the Secretary may prescribe. 

14 ‘‘(iv) FLOODPROOFING.—Creating a 

15 space that is protected by walls that are 

16 substantially impermeable and resistant to 

17 flood loads, the use of flood-damage-resist18 ant materials and construction techniques 

19 to minimize flood damage to areas below 

20 the flood protection level of a structure. 

21 ‘‘(v) RETROFITTING.—Changes made 

22 to an existing structure to reduce or elimi23 nate the possibility of damage to that 

24 structure from flooding, erosion, extreme 


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1 temperatures, high winds, or other haz2 ards. 

3 ‘‘(vi) WARNING SYSTEMS.—Equip4 ment and systems to warn residents of im5 pending hazards (including enhanced or re6 versed 911 systems), weather stations, rain 

7 gauges, flood alarms, and such other warn8 ing systems as the Secretary may pre9 scribe. 

10 ‘‘(2) WORKING WATERFRONT PROPERTY.—The 

11 term ‘working waterfront property’ means real prop12 erty— 

13 ‘‘(A) which is located within the United 

14 States or a possession of the United States, and 

15 ‘‘(B) which is used by the taxpayer to 

16 carry on an active trade or business— 

17 ‘‘(i) which meets the gross receipts 

18 test of paragraph (3), and 

19 ‘‘(ii) which— 

20 ‘‘(I) provides access to navigable 

21 waters to persons engaged in commer22 cial fishing, recreational fishing and 

23 boating, boatbuilding, aquaculture, 

24 dredging, or other water-dependent 

25 activities, and 


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1 ‘‘(II) is used for or supports ac2 tivities described in subclause (I). 

3 ‘‘(3) GROSS RECEIPTS TEST.— 

4 ‘‘(A) IN GENERAL.—A trade or business 

5 meets the gross receipts test of this paragraph 

6 if the average annual gross receipts of such 

7 trade or business for the 3-taxable-year period 

8 preceding such taxable year does not exceed 

9 $47,000,000. 

10 ‘‘(B) AGGREGATION RULES.—All trades or 

11 business of a taxpayer that are treated as a sin12 gle employer under subsection (a) or (b) of sec13 tion 52 or subsection (m) or (o) of section 414 

14 shall be treated as one trade or business for 

15 purposes of subparagraph (A). 

16 ‘‘(C) OTHER RULES.—Rules similar to the 

17 rules of section 448(c)(3) shall apply for pur18 poses of this paragraph. 

19 ‘‘(D) INFLATION ADJUSTMENT.—In the 

20 case of any taxable year beginning after Decem21 ber 31, 2025, the dollar amount in subpara22 graph (A) shall be increased by an amount 

23 equal to— 

24 ‘‘(i) such dollar amount, multiplied by 


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1 ‘‘(ii) the cost-of-living adjustment de2 termined under section 1(f)(3) for the cal3 endar year in which the taxable year be4 gins, by substituting ‘calendar year 2024’ 

5 for ‘calendar year 2016’ in subparagraph 

6 (A)(ii) thereof. 

7 If any amount as increased under the preceding 

8 sentence is not a multiple of $1,000,000, such 

9 amount shall be rounded to the nearest multiple 

10 of $1,000,000. 

11 ‘‘(e) REGULATIONS.—The Secretary, in consultation 

12 with the Administrator of the Federal Emergency Man13 agement Agency, shall issue such regulations or other 

14 guidance as may be necessary or appropriate to carry out 

15 the purposes of this section.’’. 

16 (b) INCLUSION IN INVESTMENT CREDIT.—Section 46 

17 of the Internal Revenue Code of 1986 is amended by strik18 ing ‘‘and’’ at the end of paragraph (6), by striking the 

19 period at the end of paragraph (7) and inserting ‘‘, and’’, 

20 and by adding at the end the following new paragraph: 

21 ‘‘(8) the working waterfront disaster mitigation 

22 project credit.’’. 

23 (c) CONFORMING AMENDMENTS.— 

24 (1) Section 49(a)(1)(C) of the Internal Revenue 

25 Code of 1986 is amended by striking ‘‘and’’ at the 


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1 end of clause (vii), by striking the period at the end 

2 of clause (viii) and inserting ‘‘, and’’, and by adding 

3 at the end the following: 

4 ‘‘(ix) the basis of any property which 

5 is part of a qualifying working waterfront 

6 disaster mitigation project (as defined in 

7 section 48F(d)(2)).’’. 

8 (2) Section 50(a)(2)(E) of such Code is amend9 ed by striking ‘‘or 48E(e)’’ and inserting ‘‘48E(e), 

10 or 48F(c)(2)’’. 

11 (3) The table of sections for subpart E of part 

12 IV of subchapter A of chapter 1 of such Code is 

13 amended by inserting after the item relating to sec14 tion 48E the following new item: 

‘‘Sec. 48F. Working waterfront disaster mitigation project credit.’’. 

15 (d) TREATMENT OF POSSESSIONS.— 

16 (1) PAYMENTS TO POSSESSIONS WITH MIRROR

17 CODE TAX SYSTEMS.—The Secretary of the Treas18 ury shall pay to each possession of the United States 

19 which has a mirror code tax system amounts equal 

20 to the loss (if any) to that possession by reason of 

21 the amendments made by this section. Such 

22 amounts shall be determined by the Secretary of the 

23 Treasury based on information provided by the gov24 ernment of the respective possession. 


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1 (2) PAYMENTS TO OTHER POSSESSIONS.—The 

2 Secretary of the Treasury shall pay to each posses3 sion of the United States which does not have a mir4 ror code tax system amounts estimated by the Sec5 retary of the Treasury as being equal to the aggre6 gate benefits (if any) that would have been provided 

7 to residents of such possession by reason of the 

8 amendments made by this section if a mirror code 

9 tax system had been in effect in such possession. 

10 The preceding sentence shall not apply unless the re11 spective possession has a plan, which has been ap12 proved by the Secretary of the Treasury, under 

13 which such possession will promptly distribute such 

14 payments to its residents. 

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

16 this section shall apply to periods after December 31, 

17 2024, in taxable years ending after such date, under rules 

18 similar to the rules of section 48(m) of the Internal Rev19 enue Code of 1986 (as in effect on the day before the date 

20 of the enactment of the Revenue Reconciliation Act of 

21 1990). 

Æ 


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