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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. CREDIT FOR INSTALLATION OF SPRINKLER
SYSTEMS.
(a) GENERAL RULE.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end thereof the following new section:
‘‘SEC. 45A. EXPENDITURES TO INSTALL AUTOMATIC FIRE
SPRINKLER SYSTEMS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the sprinkler system installation credit determined under
this section for any taxable year is 15 percent of the quali-
fied sprinkler system expenditures for such taxable year.
‘‘(b) QUALIFIED
SPRINKLER
SYSTEM
EXPENDI-
TURES.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified sprin-
kler system expenditure’ means any amount which is
properly chargeable to capital account in connection
with the installation of a qualified sprinkler system
in a qualified building but only if such installation
is not in connection with the original construction of
such building. Any such expenditure shall be taken
into account for the taxable year in which it is prop-
erly chargeable to capital account.
‘‘(2) QUALIFIED
SPRINKLER
SYSTEM.—The
term ‘qualified sprinkler system’ means any auto-
matic fire sprinkler system which meets the require-
ments of National Fire Protection Association
Standard Number 13.
‘‘(3) QUALIFIED BUILDING.—The term ‘quali-
fied building’ means any building if—
‘‘(A) such building has one or more floors
which are more than 75 feet above the lowest
level of fire department vehicle access and are
used in a manner requiring the presence of in-
dividuals, and
‘‘(B) the installation of a qualified sprin-
kler system in such building would be required
if such building were being constructed on the
date of the installation referred to in paragraph
(1).
‘‘(c) DENIAL OF DOUBLE BENEFIT.—
‘‘(1) OTHER CREDITS.—No credit shall be al-
lowed under any other provision of this chapter for
any expenditure taken into account in determining
the amount of the credit under this section.
‘‘(2) BASIS
ADJUSTMENT.—For purposes of
this subtitle, if any expenditure with respect to any
property is taken into account under subsection (a),
the increase in the basis of such property which
would (but for this paragraph) result from such ex-
penditure shall be reduced by the amount of the
credit determined under subsection (a) with respect
to such expenditure.
‘‘(d) TERMINATION.—This section shall not apply to
any expenditure made on or after January 1, 1999.’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code is
amended by striking ‘‘plus’’ at the end of paragraph (7),
by striking the period at the end of paragraph (8) and
inserting ‘‘, plus’’, and by adding at the end thereof the
following new paragraph:
‘‘(9) the sprinkler system installation credit de-
termined under section 45A(a).’’
(c) DEDUCTION FOR UNUSED CREDIT.—Subsection
(c) of section 196 of such Code is amended by striking
‘‘and’’ at the end of paragraph (4), by striking the period
at the end of paragraph (5) and inserting ‘‘, and’’, and
by adding at the end thereof the following new paragraph:
‘‘(6) the sprinkler system installation credit de-
termined under section 45A(a).’’
(d) LIMITATION ON CARRYBACKS.—Subsection (d) of
section 39 of such Code is amended by adding at the end
thereof the following new paragraph:
‘‘(4) NO CARRYBACK OF SECTION 45A CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the sprinkler system installation credit de-
termined under section 45A(a) may be carried to a
taxable year ending before January 1, 1993.’’
(e) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1