I 
109TH CONGRESS 
2D SESSION 
H. R. 4913 
To amend the Internal Revenue Code of 1986 to encourage the use of 
corrosion prevention and mitigation measures in the construction and 
maintenance of business property. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 9, 2006 
Mr. FITZPATRICK of Pennsylvania (for himself and Mr. AL GREEN of Texas) 
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 encourage 
the use of corrosion prevention and mitigation measures 
in the construction and maintenance of business prop-
erty. 
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 ‘‘Corrosion Prevention 
Act of 2006’’. 
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SEC. 2. CREDIT FOR CORROSION PREVENTION AND MITI-
GATION MEASURES. 
(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. 45N. CORROSION PREVENTION AND MITIGATION 
MEASURES. 
‘‘(a) IN GENERAL.—For purposes of section 38, the 
corrosion prevention and mitigation credit determined 
under this section for the taxable year is an amount equal 
to 50 percent of the excess of— 
‘‘(1) qualified corrosion prevention and mitiga-
tion expenditures with respect to qualified property, 
over 
‘‘(2) the amount such expenditures would have 
been, taking into account amounts paid or incurred 
to satisfy Federal, State, or local requirements. 
‘‘(b) QUALIFIED CORROSION PREVENTION AND MITI-
GATION EXPENDITURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified corro-
sion prevention and mitigation expenditures’ means 
amounts paid or incurred by the taxpayer during the 
taxable year for engineering design, materials, and 
application and installation of corrosion prevention 
and mitigation technology. 
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‘‘(2) CERTIFICATION MAY BE REQUIRED.—The 
Secretary shall require by regulation that no amount 
be taken into account under paragraph (1) for any 
design, material, application, or installation unless 
such design, material, application, or installation 
meets such certification requirements as the Sec-
retary shall require. Such requirements shall provide 
for accreditation of certifying persons by an inde-
pendent entity with expertise in corrosion prevention 
and mitigation technology. 
‘‘(3) CORROSION PREVENTION AND MITIGATION 
TECHNOLOGY.—Corrosion prevention and mitigation 
technology includes a system comprised of at least 
one of the following: a corrosion-protective coating 
or paint; chemical treatment; corrosion-resistant 
metals; and cathodic protection. The Secretary from 
time to time by regulations or other guidance modify 
the list contained in the predecing sentence to reflect 
changes in corrosion prevention and mitigation tech-
nology. 
‘‘(4) QUALIFIED PROPERTY.—The term ‘quali-
fied property’ means property which is— 
‘‘(A) comprised primarily of a metal sus-
ceptible to corrosion, 
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‘‘(B) of a character subject to the allow-
ance for depreciation, 
‘‘(C) originally placed in service by the tax-
payer, and 
‘‘(D) located in the United States. 
‘‘(c) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—If, as of the close of any 
taxable year, there is a recapture event with respect 
to any qualified property for which a credit was al-
lowed under subsection (a), the tax of the taxpayer 
under this chapter for such taxable year shall be in-
creased by an amount equal to the product of— 
‘‘(A) the applicable recapture percentage, 
and 
‘‘(B) the aggregate decrease in the credits 
allowed under section 38 for all prior taxable 
years which would have resulted if the qualified 
corrosion prevention and mitigation expendi-
tures of the taxpayer with respect to such prop-
erty had been zero. 
‘‘(2) APPLICABLE RECAPTURE PERCENTAGE.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the applicable recapture percentage 
shall be determined from the following table: 
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‘‘If the property ceases to be quali-
fied property within: 
The recapture 
percentage is: 
(i) One full year after placed in service .......
100
(ii) One full year after the close of the pe-
riod described in clause (i) .......................
(iii) One full year after the close of the pe-
riod described in clause (ii) ......................
(iv) One full year after the close of the pe-
riod described in clause (iii) .....................
(v) One full year after the close of the pe-
riod described in clause (iv) .....................
20.
‘‘(B) RECAPTURE EVENT DEFINED.—For 
purposes of this subsection, the term ‘recapture 
event’ means— 
‘‘(i) CESSATION
OF
USE.—The ces-
sation of use of the qualified property. 
‘‘(ii) CHANGE IN OWNERSHIP.— 
‘‘(I) IN
GENERAL.—Except as 
provided in subclauses (II), the dis-
position of a taxpayer’s interest in the 
qualified property with respect to 
which the credit described in sub-
section (a) was allowable. 
‘‘(II) AGREEMENT
TO
ASSUME 
RECAPTURE
LIABILITY.—Subclause 
(I) shall not apply if the person ac-
quiring the qualified property agrees 
in writing to assume the recapture li-
ability of the person disposing of the 
qualified property. In the event of 
such an assumption, the person ac-
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quiring the qualified property shall be 
treated as the taxpayer for purposes 
of assessing any recapture liability 
(computed as if there had been no 
change in ownership). 
‘‘(III) SPECIAL
RULE
FOR
TAX 
EXEMPT
ENTITIES.—Subclause (II) 
shall not apply to any tax exempt en-
tity (as defined in section 168(h)(2)). 
‘‘(iii) SPECIAL RULES.— 
‘‘(I) TAX
BENEFIT
RULE.—The 
tax for the taxable year shall be in-
creased under paragraph (1) only with 
respect to credits allowed by reason of 
this section which were used to reduce 
tax liability. In the case of credits not 
so used to reduce tax liability, the 
carryforwards and carrybacks under 
section 39 shall be appropriately ad-
justed. 
‘‘(II) 
NO
CREDITS
AGAINST 
TAX.—Any increase in tax under this 
subsection shall not be treated as a 
tax imposed by this chapter for pur-
poses of determining the amount of 
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any credit under this chapter or for 
purposes of section 55. 
‘‘(III) NO RECAPTURE BY REA-
SON
OF
CASUALTY
LOSS.—The in-
crease in tax under this subsection 
shall not apply to a cessation of oper-
ation of the property as qualified 
property by reason of a casualty loss 
to the extent such loss is restored by 
reconstruction or replacement within a 
reasonable period established by the 
Secretary. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—For purposes 
of this subtitle— 
‘‘(1) BASIS ADJUSTMENTS.— 
‘‘(A) IN GENERAL.—If a credit is deter-
mined under this section for any expenditure 
with respect to any property, the increase in the 
basis of such property which would (but for this 
subsection) result from such expenditure shall 
be reduced by the amount of the credit so al-
lowed. 
‘‘(B) CERTAIN DISPOSITIONS.—If, during 
any taxable year, there is a recapture amount 
determined with respect to any property the 
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basis of which was reduced under subparagraph 
(A), the basis of such property (immediately be-
fore the event resulting in such recapture) shall 
be increased by an amount equal to such recap-
ture amount. For purposes of the preceding 
sentence, the term ‘recapture amount’ means 
any 
increase 
in 
tax 
(or 
adjustment 
in 
carrybacks or carryovers) determined under 
subsection (c). 
‘‘(2) OTHER DEDUCTIONS AND CREDITS.—No 
deduction or credit shall be allowed under this chap-
ter for any expense taken into account under this 
section. 
‘‘(e) REGULATIONS.—The Secretary shall prescribe 
such regulations as may be appropriate to carry out this 
section.’’. 
(b) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of such Code (re-
lating to current year business credit) is amended by strik-
ing ‘‘plus’’ at the end of paragraph (29), by striking the 
period at the end of paragraph (30) and inserting ‘‘, plus’’, 
and by adding at the end thereof the following new para-
graph: 
‘‘(31) Corrosion prevention and mitigation cred-
it determined under section 45N(a).’’. 
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(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
of such Code is amended by inserting after the item relat-
ing to section 45M the following new item: 
‘‘Sec. 45N. Corrosion prevention and mitigation measures.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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