I 
108TH CONGRESS 
1ST SESSION H. R. 3562
To amend the Internal Revenue Code of 1986 to allow businesses a credit 
for security devices, assessments, and other security-related expenses. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 20, 2003
Mr. SHUSTER 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 busi-
nesses a credit for security devices, assessments, and 
other security-related expenses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Prevent Act of 2003’’. 
SEC. 2. BUSINESS CREDIT FOR SECURITY DEVICES, ASSESS-
MENTS, AND OTHER SECURITY-RELATED EX-
PENSES. 
(a) IN GENERAL.—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 the following new section: 
‘‘SEC. 45G. CERTAIN BUSINESS SECURITY EXPENDITURES. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
building security credit determined under this section is 
an amount equal to the sum of—
‘‘(1) 20 percent of the cost of each qualified 
building securities device placed in service by the 
taxpayer during the taxable year, 
‘‘(2) 30 percent of the qualified security assess-
ment expenses paid or incurred by the taxpayer dur-
ing the taxable year, and 
‘‘(3) 30 percent of the co-location property 
placed in service by the taxpayer during the taxable 
year. 
‘‘(b) QUALIFIED BUILDING SECURITY DEVICE.—For 
purposes of this section—
‘‘(1) QUALIFIED
BUILDING
SECURITY
DE-
VICE.—The term ‘qualified building security device’ 
means a security device (to which section 168 ap-
plies)—
‘‘(A) which is acquired by purchase (as de-
fined in section 179(d)(2)), and
‘‘(B) which is used to provide security for 
any building used by the taxpayer in any trade 
or business. 
‘‘(2) SECURITY
DEVICE.—The term ‘security 
device’ means any of the following: 
‘‘(A) An electronic access control device or 
system. 
‘‘(B) 
Biometric 
identification 
or 
verification device or system. 
‘‘(C) Closed-circuit television or other sur-
veillance and security cameras and equipment. 
‘‘(D) Locks for doors and windows, includ-
ing tumbler, key, and numerical or other coded 
devices. 
‘‘(E) Computers and software used to com-
bat cyberterrorism. 
‘‘(F) Electronic alarm systems to provide 
detection notification and off-premises trans-
mission of an unauthorized entry, attack, or 
fire. 
‘‘(G) An electronic device capable of track-
ing or verifying the presence of assets. 
‘‘(H) High efficiency air filtering systems. 
‘‘(I) Mechanical and non-mechanical vehi-
cle arresting barricades.
‘‘(J) Metal detectors. 
‘‘(K) Signal repeating devices for emer-
gency response personnel wireless communica-
tion systems. 
‘‘(L) Components, wiring, system displays, 
terminals, auxiliary power supplies, computer 
systems, software, networking infrastructure 
and other equipment necessary or incidental to 
the operation of any item described in any of 
the preceding subparagraphs. 
‘‘(c) 
QUALIFIED
SECURITY
ASSESSMENT
EX-
PENSES.—For purposes of this section, the term ‘qualified 
security assessment expenses’ means, with respect to any 
business premises of the taxpayer, expenses for a security 
analysis of such premises, including—
‘‘(1) the susceptibility of such premises to secu-
rity threats, 
‘‘(2) the extent to which such threats can dam-
age or interrupt business operations at such prem-
ises, and 
‘‘(3) identifying processes that ensure the con-
tinuity of business operations following such damage 
or interruption at such premises. 
‘‘(d) CO-LOCATION PROPERTY.—The term ‘co-loca-
tion property’ means buildings and equipment the exclu-
sive purpose of which is to replicate business operations 
of the taxpayer in the event of damage or interruption of 
such operations by a terrorism-related disaster, including 
all computer network, telecommunication network and 
business process equipment or any fraction thereof as con-
sidered necessary by the business. 
‘‘(e) RECAPTURE OF CREDIT IN CERTAIN CASES.—
‘‘(1) IN GENERAL.—If the taxpayer uses co-lo-
cation property for a purpose other than the purpose 
described in subsection (d) at any time during the 
5-year period beginning on the date that such prop-
erty is placed in service, then the tax imposed under 
this chapter for the taxable year in which such use 
occurs is increased by the credit recapture amount. 
‘‘(2) CREDIT RECAPTURE AMOUNT.—For pur-
poses of paragraph (1), the credit recapture amount 
is an amount equal to the sum of—
‘‘(A) the aggregate decrease in the credits 
allowed to the taxpayer under section 38 for all 
prior taxable years which would have resulted if 
no credit had been determined under this sec-
tion with respect to such property, plus 
‘‘(B) interest at the underpayment rate es-
tablished under section 6621 on the amount de-
termined under subparagraph (A) for each
prior taxable year for the period beginning on 
the due date for filing the return for the prior 
taxable year involved. 
No deduction shall be allowed under this chapter for 
interest described in subparagraph (B). 
‘‘(3) SPECIAL RULES.—
‘‘(A) TAX
BENEFIT
RULE.—The tax for 
the taxable year shall be increased under para-
graph (1) only with respect to credits allowed 
by reason of this section which were used to re-
duce tax liability. In the case of credits not so 
used to reduce tax liability, the carryforwards 
and carrybacks under section 39 shall be appro-
priately adjusted. 
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under this subsection shall not be 
treated as a tax imposed by this chapter for 
purposes of determining the amount of any 
credit under this chapter or for purposes of sec-
tion 55.’’. 
(b) CREDIT TREATED AS BUSINESS CREDIT.—Sec-
tion 38(b) of such Code is amended by striking ‘‘plus’’ 
at the end of paragraph (14), by striking the period at 
the end of paragraph (15) and inserting ‘‘, plus’’, and by 
adding at the end the following new paragraph:
‘‘(16) the building security credit determined 
under section 45G(a).’’. 
(c) NO CARRYBACKS.—Subsection (d) of section 39 
of such Code (relating to carryback and carryforward of 
unused credits) is amended by adding at the end the fol-
lowing: 
‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT 
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is 
attributable to the building security credit deter-
mined under section 45G may be carried back to a 
taxable year ending before the date of the enactment 
of section 45G.’’. 
(d) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘45G. Certain business security expenditures.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to property placed in service after the 
date of the enactment of this Act in taxable years 
ending after such date. 
(2) ASSESSMENT EXPENSES.—The amendments 
made by this section shall apply to qualified security
assessment expenses paid or incurred after the date 
of the enactment of this Act in taxable years ending 
after such date.
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