I 

117TH CONGRESS 

1ST SESSION H. R. 2688 

To amend the Internal Revenue Code of 1986 to permanently allow a tax 

deduction for the mining, reclaiming, or recycling of critical minerals 

and metals from the United States, and to support the development 

of domestic supply chains for rare earth elements and other critical 

materials essential to United States technology, manufacturing, energy, 

healthcare and advanced medical devices, broadband infrastructure, 

transportation, and national defense. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 20, 2021 

Mr. GOODEN of Texas (for himself and Mr. VICENTE GONZALEZ of Texas) 

introduced the following bill; which was referred to the Committee on 

Ways and Means, and in addition to the Committee on Natural Resources, for a period to be subsequently determined by the Speaker, in 

each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to permanently 

allow a tax deduction for the mining, reclaiming, or 

recycling of critical minerals and metals from the United 

States, and to support the development of domestic supply chains for rare earth elements and other critical 

materials essential to United States technology, manufacturing, energy, healthcare and advanced medical devices, 

broadband infrastructure, transportation, and national 

defense. 


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

3 SECTION 1. PERMANENT FULL EXPENSING FOR PROPERTY 

4 USED TO EXTRACT CRITICAL MINERALS AND 

5 METALS WITHIN THE UNITED STATES. 

6 (a) IN GENERAL.—Section 168(k) of the Internal 

7 Revenue Code of 1986 is amended by adding at the end 

8 the following: 

9 ‘‘(11) SPECIAL RULE FOR PROPERTY USED FOR

10 MINING OF CRITICAL MINERALS AND METALS WITH11 IN THE UNITED STATES.— 

12 ‘‘(A) IN GENERAL.—In the case of any 

13 qualified property which is substantially in14 volved in the mining, reclaiming, or recycling of 

15 critical minerals and metals from deposits in 

16 the United States— 

17 ‘‘(i) paragraph (2)(A)(iii) shall not 

18 apply, and 

19 ‘‘(ii) the applicable percentage shall be 

20 100 percent. 

21 ‘‘(B) CRITICAL MINERALS AND METALS.— 

22 For purposes of this paragraph, the term ‘crit23 ical minerals and metals’ means cerium, cobalt, 

24 dysprosium, erbium, europium, gadolinium, 

25 graphite, holmium, lanthanum, lithium, luteVerDate Sep 11 2014 23:37 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2688.IH H2688

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1 tium, manganese, neodymium, praseodymium, 

2 promethium, samarium, scandium, terbium, 

3 thulium, vanadium, ytterbium, and yttrium.’’. 

4 (b) EFFECTIVE DATE.—The amendment made by 

5 this section shall apply to property placed in service after 

6 December 31, 2020. 

7 SEC. 2. PERMANENT FULL EXPENSING FOR NONRESIDEN8 TIAL REAL PROPERTY USED FOR MINING OF 

9 CRITICAL MINERALS AND METALS WITHIN 

10 THE UNITED STATES. 

11 (a) IN GENERAL.—Section 168 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subsection: 

14 ‘‘(n) SPECIAL ALLOWANCE FOR NONRESIDENTIAL

15 REAL PROPERTY USED FOR MINING OF CRITICAL MIN16 ERALS AND METALS WITHIN THE UNITED STATES.— 

17 ‘‘(1) NEW STRUCTURES.—In the case of any 

18 qualified real property— 

19 ‘‘(A)(i) if such property is placed in service 

20 on or after the date of enactment of this sub21 section, the depreciation deduction provided by 

22 section 167(a) for the taxable year in which 

23 such property is placed in service shall include 

24 an allowance equal to 100 percent of the ad25 justed basis of such property, or 


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1 ‘‘(ii) if such property was placed in service 

2 before the date of enactment of this subsection, 

3 the depreciation deduction provided by section 

4 167(a) for the first taxable year beginning after 

5 such date shall include an allowance equal to 

6 100 percent of the adjusted basis of such prop7 erty, and 

8 ‘‘(B) the adjusted basis of such property 

9 shall be reduced by the amount of such deduc10 tion before computing the amount otherwise al11 lowable as a depreciation deduction under this 

12 chapter for such taxable year and any subse13 quent taxable year. 

14 ‘‘(2) QUALIFIED REAL PROPERTY.—For pur15 poses of this subsection, the term ‘qualified real 

16 property’ means any nonresidential real property 

17 which is substantially involved in the mining, re18 claiming, or recycling of critical minerals and metals 

19 (as defined in subsection (k)(11)(B)) from deposits 

20 in the United States.’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this section shall apply to taxable years beginning after 

23 December 31, 2020. 


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1 SEC. 3. DEDUCTION FOR PURCHASE OF CRITICAL MIN2 ERALS AND METALS EXTRACTED WITHIN THE 

3 UNITED STATES. 

4 (a) IN GENERAL.—Part VI of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 is amended 

6 by inserting after section 176 the following new section: 

7 ‘‘SEC. 177. DEDUCTION FOR PURCHASE OF CRITICAL MIN8 ERALS AND METALS EXTRACTED WITHIN THE 

9 UNITED STATES. 

10 ‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be 

11 allowed as a deduction for the taxable year an amount 

12 equal to 200 percent of the cost paid or incurred by the 

13 taxpayer for the purchase or acquisition of critical min14 erals and metals (as defined in section 168(k)(11)(B)) 

15 which have been extracted from deposits in the United 

16 States. 

17 ‘‘(b) APPLICATION WITH OTHER DEDUCTIONS.—No 

18 deduction shall be allowed under any other provision of 

19 this chapter with respect to any expenditure with respect 

20 to which a deduction is allowed or allowable under this 

21 section to the taxpayer.’’. 

22 (b) CONFORMING AMENDMENT.—The table of sec23 tions for part VI of subchapter B of chapter 1 of the Inter24 nal Revenue Code of 1986 is amended by inserting after 

25 the item relating to section 176 the following new item: 


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‘‘Sec. 177. Deduction for purchase of critical minerals and metals extracted 

within the United States.’’. 

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

2 this section shall apply to amounts paid or incurred after 

3 December 31, 2020. 

4 SEC. 4. INCREASE IN RATE OF PERCENTAGE DEPLETION 

5 FOR CRITICAL MINERALS AND METALS FROM 

6 DEPOSITS IN THE UNITED STATES. 

7 (a) IN GENERAL.—Section 613(b)(1) of the Internal 

8 Revenue Code of 1986 is amended by striking ‘‘and’’ at 

9 the end of subparagraph (A), by striking the period at 

10 the end of subparagraph (B) and inserting ‘‘; and’’, and 

11 by adding at the end the following new subparagraph: 

12 ‘‘(C) critical minerals and metals (as de13 fined in section 168(k)(11)(B)) from deposits in 

14 the United States.’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2020. 

18 SEC. 5. GRANT PROGRAM FOR DEVELOPMENT OF CRITICAL 

19 MINERALS AND METALS. 

20 (a) ESTABLISHMENT.—The Secretary of the Interior 

21 shall establish a grant program to finance pilot projects 

22 for the development of critical minerals and metals in the 

23 United States. 


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1 (b) LIMITATION ON GRANT AWARDS.—A grant 

2 awarded under subsection (a) may not exceed 

3 $10,000,000. 

4 (c) ECONOMIC VIABILITY.—In awarding grants 

5 under subsection (a), the Secretary of the Interior shall 

6 give priority to projects the Secretary determines are likely 

7 to be economically viable over the long term. 

8 (d) SECONDARY RECOVERY.—In awarding grants 

9 under subsection (a) during a fiscal year, the Secretary 

10 of the Interior shall seek to award not less than 30 percent 

11 of the total amount of grants awarded during that fiscal 

12 year for projects relating to secondary recovery of critical 

13 minerals and metals. 

14 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

15 are authorized to be appropriated to the Secretary of the 

16 Interior $50,000,000 for each of fiscal years 2022 through 

17 2025 to carry out the grant program established under 

18 subsection (a). 

19 (f) DEFINITIONS.—In this section: 

20 (1) CRITICAL MINERALS AND METALS.—The 

21 term ‘‘critical minerals and metals’’ means cerium, 

22 cobalt, dysprosium, erbium, europium, gadolinium, 

23 graphite, holmium, lanthanum, lithium, lutetium, 

24 manganese, neodymium, praseodymium, proVerDate Sep 11 2014 23:37 Jun 02, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2688.IH H2688

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1 methium, samarium, scandium, terbium, thulium, 

2 vanadium, ytterbium, and yttrium. 

3 (2) SECONDARY RECOVERY.—The term ‘‘sec4 ondary recovery’’ means the recovery of minerals 

5 and metals from discarded end-use products or from 

6 waste products produced during the metal refining 

7 and manufacturing process, including from mine 

8 waste piles, acid mine drainage sludge, or byprod9 ucts produced through legacy mining and metallurgy 

10 activities. 

Æ 


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