II

103D CONGRESS

1ST SESSION S. 1684

To amend the Internal Revenue Code of 1986 to allow a taxpayer a deduction

for equipment used for environmental purposes.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 18 (legislative day, NOVEMBER 2), 1993

Mr. MURKOWSKI 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

taxpayer a deduction for equipment used for environmental 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. SHORT TITLE.

4 This Act may be cited as the ‘‘Environmental Protec5 tion Encouragement Act of 1993’’.

6 SEC. 2. ELECTION TO EXPENSE CERTAIN ENVIRONMENTAL

7 PROPERTY.

8 (a) IN GENERAL.—Part VI of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended

10 by adding after section 179A the following new section:
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1 ‘‘SEC. 179. ELECTION TO EXPENSE CERTAIN ENVIRON2 MENTAL IMPROVEMENT PROPERTY.

3 ‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may

4 elect to treat the cost of any environmental improvement

5 property as an expense which is not chargeable to capital

6 account. Any cost so treated shall be allowed as a deduc7 tion for the taxable year in which the environmental im8 provement property is placed in service.

9 ‘‘(b) ENVIRONMENTAL IMPROVEMENT PROPERTY.—

10 For purposes of this subsection—

11 ‘‘(1) IN GENERAL.—The term ‘environmental

12 improvement property’ means tangible property

13 which is acquired by purchase for use in the active

14 conduct of a trade or business and which is—

15 ‘‘(A) of a character subject to the allow16 ance for depreciation provided in section 167,

17 ‘‘(B) used for one or more of the following

18 purposes—

19 ‘‘(i) source reduction,

20 ‘‘(ii) solid waste minimization,

21 ‘‘(iii) waste conversion or recycling,

22 ‘‘(iv) reduction of environmental haz23 ards,

24 ‘‘(v) compliance with environmental

25 permits, rules, and similar requirements,
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1 ‘‘(vi) prevention, containment, or con2 trol of unplanned releases, or

3 ‘‘(vii) the manufacture, distribution,

4 and sale of alternate fuels and blending

5 stocks or fuel additives for reformulated

6 fuels, and

7 ‘‘(C) located and used exclusively in the

8 United States during the taxable year.

9 If only a portion of property described in subpara10 graphs (A) and (C) is described in subparagraph

11 (B), such portion shall be treated as environmental

12 improvement property. For purposes of this para13 graph, the term ‘United States’ has the meaning

14 given such term by paragraph (1) of section 638 (re15 lating to continental shelf areas).

16 ‘‘(2) OTHER DEFINITIONS.—For purposes of

17 this subsection—

18 ‘‘(A) SOURCE REDUCTION.—The term

19 ‘source reduction’ means reduction of the

20 amount of regulated substances or other pollut21 ants from fixed or mobile sources released into

22 the environment if such reduction reduces haz23 ards to public health or environment.

24 ‘‘(B) SOLID WASTE MINIMIZATION.—The

25 term ‘solid waste minimization’ means the re-
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1 duction in the generation of, or the recovery of

2 commercially usable products from, residual

3 materials which are classified as, or which if

4 disposed would be classified as, solid wastes

5 (within the meaning of the Resource Conserva6 tion and Recovery Act).

7 ‘‘(C) WASTE CONVERSION OR RECY8 CLING.—The term ‘waste conversion or recy9 cling’ means the processing or conversion of liq10 uid, solid, or gaseous wastes into fuel, energy,

11 or other commercially usable products, and the

12 production of such products if production oc13 curs at the same facility as the conversion.

14 ‘‘(D) ABATEMENT OF ENVIRONMENTAL

15 HAZARDS.—The term ‘abatement of environ16 mental hazards’ includes the abatement, reduc17 tion, monitoring, or stabilization of potential

18 human exposure to toxic chemicals, hazardous

19 or extremely hazardous substances, or harmful

20 radiation.

21 ‘‘(E) UNPLANNED RELEASES.—The term

22 ‘unplanned releases’ means any release of regu23 lated substances (except federally permitted re24 leases), including indoor releases.
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1 ‘‘(F) REGULATED SUBSTANCE.—The term

2 ‘regulated substance’ includes any substance

3 the release or emission of which is prohibited,

4 limited, or regulated by Federal or State law or

5 by Federal regulations (as determined without

6 regard to whether a particular release would

7 have been prohibited or limited).

8 ‘‘(G) RELEASE.—The term ‘release’ means

9 any spilling, leaking, pouring, discharging, es10 caping, dumping, or disposing into the environ11 ment, including the abandonment or discarding

12 of barrels or other closed receptacles.

13 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur14 poses of this section—

15 ‘‘(1) PURCHASE.—The term ‘purchase’ has the

16 meaning given such term by section 179(d)(2).

17 ‘‘(2) COST.—The cost of property shall not in18 clude so much of the basis of the property as is de19 termined by reference to the basis of other property

20 held at any time by the person acquiring the

21 property.

22 ‘‘(3) COORDINATION WITH OTHER PROVI23 SIONS.—This section shall not apply with respect to

24 any property with respect to which an election under

25 section 169 or 179 applies.’’
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1 (b) CONFORMING AMENDMENT.—The table of sec2 tions for part VI of subchapter B of chapter 1 of such

3 Code is amended by adding after the item relating to sec4 tion 179A the following new item:

‘‘Sec. 179B. Election to expense certain environmental improvement property.’’.

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

6 this section applies to property placed in service in taxable

7 years beginning after December 31, 1993.

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