I 

109TH CONGRESS 

1ST SESSION H. R. 1723 

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

income tax for recycling or remanufacturing equipment, and for other 

purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 20, 2005 

Mr. BRADLEY of New Hampshire 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 a 

credit against income tax for recycling or remanufacturing equipment, 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. CREDIT FOR RECYCLING OR REMANUFAC4 TURING EQUIPMENT. 

5 (a) IN GENERAL.—Section 46 of the Internal Rev6 enue Code of 1986 (relating to amount of investment cred7 it) is amended by striking ‘‘and’’ at the end of paragraph 

8 (1), by striking the period at the end of paragraph (2) 
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1 and inserting ‘‘, and’’, and by adding at the end the fol2 lowing new paragraph: 

3 ‘‘(3) the reclamation credit.’’ 

4 (b) RECLAMATION CREDIT.—Section 48 of such Code 

5 (relating to energy credit) is amended by adding at the 

6 end the following new subsection: 

7 ‘‘(c) RECLAMATION CREDIT.— 

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

9 the reclamation credit for any taxable year is 20 

10 percent of the basis of each qualified reclamation 

11 property placed in service during the taxable year. 

12 ‘‘(2) QUALIFIED RECLAMATION PROPERTY.— 

13 ‘‘(A) IN GENERAL.—For purposes of this 

14 subsection, the term ‘qualified reclamation 

15 property’ means property— 

16 ‘‘(i) which is qualified recycling prop17 erty or qualified remanufacturing property, 

18 ‘‘(ii) which is tangible property (not 

19 including a building and its structural 

20 components), 

21 ‘‘(iii) with respect to which deprecia22 tion (or amortization in lieu of deprecia23 tion) is allowable, 

24 ‘‘(iv) which has a useful life of at least 

25 5 years, and 
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1 ‘‘(v) which is— 

2 ‘‘(I) acquired by purchase (as de3 fined in section 179(d)(2)) by the tax4 payer if the original use of such prop5 erty commences with the taxpayer, or 

6 ‘‘(II) constructed by or for the 

7 taxpayer. 

8 ‘‘(B) DOLLAR LIMITATION.— 

9 ‘‘(i) IN GENERAL.—The basis of quali10 fied reclamation property taken into ac11 count under paragraph (1) for any taxable 

12 year shall not exceed $10,000,000 for a 

13 taxpayer. 

14 ‘‘(ii) TREATMENT OF CONTROLLED

15 GROUP.—For purposes of clause (i)— 

16 ‘‘(I) all component members of a 

17 controlled group shall be treated as 

18 one taxpayer, and 

19 ‘‘(II) the Secretary shall appor20 tion the dollar limitation in such 

21 clause among the component members 

22 of such controlled group in such man23 ner as he shall by regulation pre24 scribe. 
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1 ‘‘(iii) TREATMENT OF PARTNERSHIPS

2 AND S CORPORATIONS.—In the case of a 

3 partnership, the dollar limitation in clause 

4 (i) shall apply with respect to the partner5 ship and with respect to each partner. A 

6 similar rule shall apply in the case of an 

7 S corporation and its shareholders. 

8 ‘‘(iv) CONTROLLED GROUP DE9 FINED.—For purposes of clause (ii), the 

10 term ‘controlled group’ has the meaning 

11 given such term by section 1563(a), except 

12 that ‘more than 50 percent’ shall be sub13 stituted for ‘at least 80 percent’ each place 

14 it appears in section 1563(a)(1). 

15 ‘‘(3) CERTAIN PROGRESS EXPENDITURE RULES

16 MADE APPLICABLE.—Rules similar to the rules of 

17 subsections (c)(4) and (d) of section 46 (as in effect 

18 on the day before the date of the enactment of the 

19 Revenue Reconciliation Act of 1990) shall apply for 

20 purposes of this subsection. 

21 ‘‘(4) DEFINITIONS.—For purposes of this sub22 section— 

23 ‘‘(A) QUALIFIED RECYCLING PROPERTY.— 

24 The term ‘qualified recycling property’ means 

25 equipment used exclusively to collect, distribute, 
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1 or sort used ferrous or nonferrous metals. The 

2 term does not include equipment used to collect, 

3 distribute, or sort precious metals such as gold, 

4 silver, or platinum unless such use is coinci5 dental to the collection, distribution, or sorting 

6 of other used ferrous or nonferrous metals. 

7 ‘‘(B) QUALIFIED REMANUFACTURING

8 PROPERTY.—The term ‘qualified remanufac9 turing property’ means equipment used pri10 marily by the taxpayer in the business of re11 building or remanufacturing a used product or 

12 part, but only if— 

13 ‘‘(i) the rebuilt or remanufactured 

14 product or part includes 50 percent or less 

15 virgin material, and 

16 ‘‘(ii) the equipment is not used pri17 marily in a process occurring after the 

18 product or part is rebuilt or remanufac19 tured. 

20 ‘‘(5) COORDINATION WITH REHABILITATION

21 AND ENERGY CREDITS.—For purposes of this sec22 tion— 

23 ‘‘(A) the basis of any qualified reclamation 

24 property shall be reduced by that portion of the 

25 basis of any property which is attributable to 
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1 qualified rehabilitation expenditures (as defined 

2 in section 47(c)(2)) or to the energy percentage 

3 of energy property (as determined under section 

4 48(a)), and 

5 ‘‘(B) expenditures taken into account 

6 under either section 47 or 48(a) shall not be 

7 taken into account under this section.’’. 

8 (c) SPECIAL BASIS ADJUSTMENT RULE.—Paragraph 

9 (3) of section 50(c) of such Code (relating to basis adjust10 ment to investment credit property) is amended by insert11 ing ‘‘or reclamation credit’’ after ‘‘energy credit’’. 

12 (d) CLERICAL AMENDMENTS.— 

13 (1) The section heading for section 48 of such 

14 Code is amended to read as follows: 

15 ‘‘SEC. 48. ENERGY CREDIT; RECLAMATION CREDIT.’’ 

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

17 of sections for subpart E of part IV of subchapter 

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

19 follows: 

‘‘Sec. 48. Energy credit; reclamation credit.’’. 

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

21 this section shall apply to property placed in service on 

22 or after January 1, 2006. 
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1 SEC. 2. STUDY ON EFFECTIVENESS OF RECYCLED AUTO2 MOBILE AIRBAGS. 

3 (a) STUDY.—The Secretary of Transportation, 

4 through the appropriate agency, shall conduct a study on 

5 the performance and safety of recycled, non-deployed 

6 original equipment manufacturer airbags and airbag mod7 ules compared to new, original equipment manufacturer 

8 airbags and airbag modules used in automobiles. 

9 (b) REPORT.—Not later than 1 year after the date 

10 of enactment of this Act, the Secretary of Transportation 

11 shall transmit to Congress a report on the results of the 

12 study conducted pursuant to subsection (a). 

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