I

103D CONGRESS

1ST SESSION H. R. 2107

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

cost of installing automatic fire sprinkler systems in certain buildings.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1993

Mr. MAZZOLI 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 for the cost of installing automatic fire sprinkler

systems in certain buildings.

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 INSTALLATION OF SPRINKLER

4 SYSTEMS.

5 (a) GENERAL RULE.—Subpart D of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to business-related credits) is amended by

8 adding at the end thereof the following new section:
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1 ‘‘SEC. 45A. EXPENDITURES TO INSTALL AUTOMATIC FIRE

2 SPRINKLER SYSTEMS.

3 ‘‘(a) GENERAL RULE.—For purposes of section 38,

4 the sprinkler system installation credit determined under

5 this section for any taxable year is 15 percent of the quali6 fied sprinkler system expenditures for such taxable year.

7 ‘‘(b) QUALIFIED SPRINKLER SYSTEM EXPENDI8 TURES.—For purposes of this section—

9 ‘‘(1) IN GENERAL.—The term ‘qualified sprin10 kler system expenditure’ means any amount which is

11 properly chargeable to capital account in connection

12 with the installation of a qualified sprinkler system

13 in a qualified building but only if such installation

14 is not in connection with the original construction of

15 such building. Any such expenditure shall be taken

16 into account for the taxable year in which it is prop17 erly chargeable to capital account.

18 ‘‘(2) QUALIFIED SPRINKLER SYSTEM.—The

19 term ‘qualified sprinkler system’ means any auto20 matic fire sprinkler system which meets the require21 ments of National Fire Protection Association

22 Standard Number 13.

23 ‘‘(3) QUALIFIED BUILDING.—The term ‘quali24 fied building’ means any building if—

25 ‘‘(A) such building has one or more floors

26 which are more than 75 feet above the lowest
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1 level of fire department vehicle access and are

2 used in a manner requiring the presence of in3 dividuals, and

4 ‘‘(B) the installation of a qualified sprin5 kler system in such building would be required

6 if such building were being constructed on the

7 date of the installation referred to in paragraph

8 (1).

9 ‘‘(c) DENIAL OF DOUBLE BENEFIT.—

10 ‘‘(1) OTHER CREDITS.—No credit shall be al11 lowed under any other provision of this chapter for

12 any expenditure taken into account in determining

13 the amount of the credit under this section.

14 ‘‘(2) BASIS ADJUSTMENT.—For purposes of

15 this subtitle, if any expenditure with respect to any

16 property is taken into account under subsection (a),

17 the increase in the basis of such property which

18 would (but for this paragraph) result from such ex19 penditure shall be reduced by the amount of the

20 credit determined under subsection (a) with respect

21 to such expenditure.

22 ‘‘(d) TERMINATION.—This section shall not apply to

23 any expenditure made on or after January 1, 1999.’’

24 (b) CREDIT MADE PART OF GENERAL BUSINESS

25 CREDIT.—Subsection (b) of section 38 of such Code is
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1 amended by striking ‘‘plus’’ at the end of paragraph (7),

2 by striking the period at the end of paragraph (8) and

3 inserting ‘‘, plus’’, and by adding at the end thereof the

4 following new paragraph:

5 ‘‘(9) the sprinkler system installation credit de6 termined under section 45A(a).’’

7 (c) DEDUCTION FOR UNUSED CREDIT.—Subsection

8 (c) of section 196 of such Code is amended by striking

9 ‘‘and’’ at the end of paragraph (4), by striking the period

10 at the end of paragraph (5) and inserting ‘‘, and’’, and

11 by adding at the end thereof the following new paragraph:

12 ‘‘(6) the sprinkler system installation credit de13 termined under section 45A(a).’’

14 (d) LIMITATION ON CARRYBACKS.—Subsection (d) of

15 section 39 of such Code is amended by adding at the end

16 thereof the following new paragraph:

17 ‘‘(4) NO CARRYBACK OF SECTION 45A CREDIT

18 BEFORE ENACTMENT.—No portion of the unused

19 business credit for any taxable year which is attrib20 utable to the sprinkler system installation credit de21 termined under section 45A(a) may be carried to a

22 taxable year ending before January 1, 1993.’’

23 (e) CLERICAL AMENDMENT.—The table of sections

24 for subpart D of part IV of subchapter A of chapter 1
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1 of such Code is amended by adding at the end thereof

2 the following new item:

‘‘Sec. 45A. Expenditures to install automatic fire-prevention

sprinkler systems.’’

3 (f) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to expenditures made after Decem5 ber 31, 1992.

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