To amend the Internal Revenue Code of 1986 to permanently allow a tax deduction at the time an investment is made in property used for the mining, reclaiming, or recycling of critical minerals and metals from the United States, and for other purposes.

I 116TH CONGRESS 2D SESSION H. R. 8143 To amend the Internal Revenue Code of 1986 to permanently allow a tax deduction at the time an investment is made in property used for the mining, reclaiming, or recycling of critical minerals and metals from the United States, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 1, 2020 Mr. GOODEN (for himself, Mr. GONZALEZ of Texas, Mr. HURD of Texas, Mr. CUELLAR, Mr. OLSON, Mr. WILLIAMS, and Mr. WEBER of Texas) intro- duced 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 com- mittee concerned A BILL To amend the Internal Revenue Code of 1986 to permanently allow a tax deduction at the time an investment is made in property used for the mining, reclaiming, or recycling of critical minerals and metals from the United States, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 8143 IH SECTION 1. PERMANENT FULL EXPENSING FOR PROPERTY 1 USED TO EXTRACT CRITICAL MINERALS AND 2 METALS WITHIN THE UNITED STATES. 3 (a) IN GENERAL.—Section 168(k) of the Internal 4 Revenue Code of 1986 is amended by adding at the end 5 the following: 6 ‘‘(11) SPECIAL RULE FOR PROPERTY USED FOR 7 MINING OF CRITICAL MINERALS AND METALS WITH- 8 IN THE UNITED STATES.— 9 ‘‘(A) IN GENERAL.—In the case of any 10 qualified property which is substantially in- 11 volved in the mining, reclaiming, or recycling of 12 critical minerals and metals from deposits in 13 the United States— 14 ‘‘(i) paragraph (2)(A)(iii) shall not 15 apply, and 16 ‘‘(ii) the applicable percentage shall be 17 100 percent. 18 ‘‘(B) CRITICAL MINERALS AND METALS.— 19 For purposes of this paragraph, the term ‘crit- 20 ical minerals and metals’ means cerium, cobalt, 21 dysprosium, erbium, europium, gadolinium, 22 graphite, holmium, lanthanum, lithium, lute- 23 tium, manganese, neodymium, praseodymium, 24 promethium, samarium, scandium, terbium, 25 thulium, ytterbium, and yttrium.’’. 26 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 8143 IH (b) EFFECTIVE DATE.—The amendment made by 1 this section shall apply to property placed in service after 2 December 31, 2019. 3 SEC. 2. PERMANENT FULL EXPENSING FOR NONRESIDEN- 4 TIAL REAL PROPERTY USED FOR MINING OF 5 CRITICAL MINERALS AND METALS WITHIN 6 THE UNITED STATES. 7 (a) IN GENERAL.—Section 168 of the Internal Rev- 8 enue Code of 1986 is amended by adding at the end the 9 following new subsection: 10 ‘‘(n) SPECIAL ALLOWANCE FOR NONRESIDENTIAL 11 REAL PROPERTY USED FOR MINING OF CRITICAL MIN- 12 ERALS AND METALS WITHIN THE UNITED STATES.— 13 ‘‘(1) NEW STRUCTURES.—In the case of any 14 qualified real property— 15 ‘‘(A)(i) if such property is placed in service 16 on or after the date of enactment of this sub- 17 section, the depreciation deduction provided by 18 section 167(a) for the taxable year in which 19 such property is placed in service shall include 20 an allowance equal to 100 percent of the ad- 21 justed basis of such property, or 22 ‘‘(ii) if such property was placed in service 23 before the date of enactment of this subsection, 24 the depreciation deduction provided by section 25 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 8143 IH 167(a) for the first taxable year beginning after 1 such date shall include an allowance equal to 2 100 percent of the adjusted basis of such prop- 3 erty, and 4 ‘‘(B) the adjusted basis of such property 5 shall be reduced by the amount of such deduc- 6 tion before computing the amount otherwise al- 7 lowable as a depreciation deduction under this 8 chapter for such taxable year and any subse- 9 quent taxable year. 10 ‘‘(2) QUALIFIED REAL PROPERTY.—For pur- 11 poses of this subsection, the term ‘qualified real 12 property’ means any nonresidential real property 13 which is substantially involved in the mining, re- 14 claiming, or recycling of critical minerals and metals 15 (as defined in subsection (k)(11)(B)) from deposits 16 in the United States.’’. 17 (b) EFFECTIVE DATE.—The amendment made by 18 this section shall apply to taxable years beginning after 19 December 31, 2019. 20 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 8143 IH SEC. 3. DEDUCTION FOR PURCHASE OF CRITICAL MIN- 1 ERALS AND METALS EXTRACTED WITHIN THE 2 UNITED STATES. 3 (a) IN GENERAL.—Part VI of subchapter B of chap- 4 ter 1 of the Internal Revenue Code of 1986 is amended 5 by inserting after section 176 the following new section: 6 ‘‘SEC. 177. DEDUCTION FOR PURCHASE OF CRITICAL MIN- 7 ERALS AND METALS EXTRACTED WITHIN THE 8 UNITED STATES. 9 ‘‘(a) ALLOWANCE OF DEDUCTION.—There shall be 10 allowed as a deduction for the taxable year an amount 11 equal to 200 percent of the cost paid or incurred by the 12 taxpayer for the purchase or acquisition of critical min- 13 erals and metals (as defined in section 168(k)(11)(B)) 14 which have been extracted from deposits in the United 15 States. 16 ‘‘(b) APPLICATION WITH OTHER DEDUCTIONS.—No 17 deduction shall be allowed under any other provision of 18 this chapter with respect to any expenditure with respect 19 to which a deduction is allowed or allowable under this 20 section to the taxpayer.’’. 21 (b) CONFORMING AMENDMENT.—The table of sec- 22 tions for part VI of subchapter B of chapter 1 of the Inter- 23 nal Revenue Code of 1986 is amended by inserting after 24 the item relating to section 176 the following new item: 25 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 8143 IH ‘‘Sec. 177. Deduction for purchase of critical minerals and metals extracted within the United States.’’. (c) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to amounts paid or incurred after 2 December 31, 2019. 3 SEC. 4. GRANT PROGRAM FOR DEVELOPMENT OF CRITICAL 4 MINERALS AND METALS. 5 (a) ESTABLISHMENT.—The Secretary of the Interior 6 shall establish a grant program to finance pilot projects 7 for the development of critical minerals and metals in the 8 United States. 9 (b) LIMITATION ON GRANT AWARDS.—A grant 10 awarded under subsection (a) may not exceed 11 $10,000,000. 12 (c) ECONOMIC VIABILITY.—In awarding grants 13 under subsection (a), the Secretary of the Interior shall 14 give priority to projects the Secretary determines are likely 15 to be economically viable over the long term. 16 (d) SECONDARY RECOVERY.—In awarding grants 17 under subsection (a) during a fiscal year, the Secretary 18 of the Interior shall seek to award not less than 30 percent 19 of the total amount of grants awarded during that fiscal 20 year for projects relating to secondary recovery of critical 21 minerals and metals. 22 (e) AUTHORIZATION OF APPROPRIATIONS.—There 23 are authorized to be appropriated to the Secretary of the 24 VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 8143 IH Interior $50,000,000 for each of fiscal years 2021 through 1 2024 to carry out the grant program established under 2 subsection (a). 3 (f) DEFINITIONS.—In this section: 4 (1) CRITICAL MINERALS AND METALS.—The 5 term ‘‘critical minerals and metals’’ means cerium, 6 cobalt, dysprosium, erbium, europium, gadolinium, 7 graphite, holmium, lanthanum, lithium, lutetium, 8 manganese, neodymium, praseodymium, pro- 9 methium, samarium, scandium, terbium, thulium, 10 ytterbium, and yttrium. 11 (2) SECONDARY RECOVERY.—The term ‘‘sec- 12 ondary recovery’’ means the recovery of minerals 13 and metals from discarded end-use products or from 14 waste products produced during the metal refining 15 and manufacturing process, including from mine 16 waste piles, acid mine drainage sludge, or byprod- 17 ucts produced through legacy mining and metallurgy 18 activities. 19 Æ VerDate Sep 11 2014 17:01 Sep 05, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\H8143.IH H8143 pbinns on DSKJLVW7X2PROD with BILLS