Filtering and Retrofitting the Environment for Safe and Healthy Activities Indoors and Revenue (FRESH AIR) for Businesses Act

II 116TH CONGRESS 2D SESSION S. 5067 To provide a credit against payroll taxes to businesses and nonprofit organiza- tions that purchase or upgrade ventilation and air filtration systems to help prevent the spread of COVID–19 and other airborne commu- nicable diseases. IN THE SENATE OF THE UNITED STATES DECEMBER 18, 2020 Ms. ROSEN (for herself and Mr. CRAMER) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To provide a credit against payroll taxes to businesses and nonprofit organizations that purchase or upgrade ventila- tion and air filtration systems to help prevent the spread of COVID–19 and other airborne communicable diseases. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Filtering and Retro- 4 fitting the Environment for Safe and Healthy Activities 5 Indoors and Revenue (FRESH AIR) for Businesses Act’’. 6 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 5067 IS SEC. 2. BUSINESS VENTILATION TAX CREDIT. 1 (a) IN GENERAL.—In the case of an employer, there 2 shall be allowed as a credit against applicable employment 3 taxes for each calendar quarter an amount equal to 50 4 percent of the qualified ventilation, zoning, and air filtra- 5 tion and purification expenses paid or incurred by the em- 6 ployer during such calendar quarter. 7 (b) LIMITATIONS AND REFUNDABILITY.— 8 (1) OVERALL DOLLAR LIMITATION ON CRED- 9 IT.—The amount of the credit allowed under sub- 10 section (a) with respect to any employer for all cal- 11 endar quarters with respect to any qualified location 12 shall not exceed $15,000. 13 (2) CREDIT LIMITED TO EMPLOYMENT 14 TAXES.—The credit allowed by subsection (a) with 15 respect to any calendar quarter shall not exceed the 16 applicable employment taxes (reduced by any credits 17 allowed under subsections (e) and (f) of section 18 3111 of the Internal Revenue Code of 1986, sections 19 7001 and 7003 of the Families First Coronavirus 20 Response Act, and section 2301 of the CARES Act) 21 on the wages paid with respect to the employment 22 of all the employees of the employer for such cal- 23 endar quarter. 24 (3) REFUNDABILITY OF EXCESS CREDIT.— 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 5067 IS (A) IN GENERAL.—If the amount of the 1 credit under subsection (a) exceeds the limita- 2 tion of paragraph (2) for any calendar quarter, 3 such excess shall be treated as an overpayment 4 that shall be refunded under sections 6402(a) 5 and 6413(b) of the Internal Revenue Code of 6 1986. 7 (B) TREATMENT OF PAYMENTS.—For pur- 8 poses of section 1324 of title 31, United States 9 Code, any amounts due to the employer under 10 this paragraph shall be treated in the same 11 manner as a refund due from a credit provision 12 referred to in subsection (b)(2) of such section. 13 (c) QUALIFIED VENTILATION, ZONING, AND AIR FIL- 14 TRATION AND PURIFICATION EXPENSES; QUALIFIED LO- 15 CATION.—For purposes of this section— 16 (1) IN GENERAL.—The term ‘‘qualified ventila- 17 tion, zoning, and air filtration and purification ex- 18 penses’’ means amounts paid or incurred by the em- 19 ployer for— 20 (A) the purchase and installation of a 21 heating, ventilation, and air conditioning sys- 22 tem— 23 (i) which is placed in service at a 24 qualified location, 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 5067 IS (ii) which includes indoor air quality 1 sensors and controls, and 2 (iii) which— 3 (I) is designed to filter air at a 4 rate equivalent to or in excess of a 5 MERV 13 or equivalent level of filtra- 6 tion, 7 (II) uses UV-based purification, 8 or 9 (III) provides a fresh air supply 10 at least 17 cubic feet per minute per 11 occupant, the ability to conduct zon- 12 ing and sub-zoning, and the ability to 13 direct air via directional and con- 14 trolled air outlets in order to minimize 15 draft air exchange between neigh- 16 boring occupants or zones, 17 (B) upgrading a heating, ventilation, and 18 air conditioning system at a qualified location 19 which does not meet the requirements of any 20 item of subparagraph (A)(iii) so that the sys- 21 tem meets such requirements, 22 (C) the purchase of any— 23 (i) air filter— 24 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 5067 IS (I) which is used in a heating, 1 ventilation, and air conditioning sys- 2 tem at a qualified location, and 3 (II) which filters air at a rate 4 equivalent to or in excess of a MERV 5 13 or equivalent level of filtration, or 6 (ii) UV light bulb which is used in a 7 heating, ventilation, and air conditioning 8 system at a qualified location, 9 (D) the purchase of any stand alone air 10 cleaner or air purifier— 11 (i) which is placed in service at such 12 qualified location by the employer, 13 (ii) which is capable of providing at 14 least 5 air changes per hour at such quali- 15 fied location, and 16 (iii) which— 17 (I) is capable of using HEPA fil- 18 ters, 19 (II) uses UV-based purification, 20 or 21 (III) uses electronic air cleaners 22 or ionizers to clean air at a rate 23 equivalent to a HEPA filter, and 24 (E) the purchase of any— 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 5067 IS (i) HEPA filter used in an air cleaner 1 described in subparagraph (D)(iii)(I), 2 (ii) UV light bulb used in an air puri- 3 fier described in subparagraph (D)(iii)(II), 4 or 5 (iii) purification component used in an 6 air purifier described in subparagraph 7 (D)(iii)(III). 8 (2) TERMINATION.—Such term shall not in- 9 clude any expenses for property placed in service 10 after December 31, 2021. 11 (d) OTHER DEFINITIONS.—For purposes of this sec- 12 tion— 13 (1) APPLICABLE EMPLOYMENT TAXES.—The 14 term ‘‘applicable employment taxes’’ means the fol- 15 lowing: 16 (A) The taxes imposed under section 17 3111(a) of the Internal Revenue Code of 1986. 18 (B) So much of the taxes imposed under 19 section 3221(a) of such Code as are attrib- 20 utable to the rate in effect under section 21 3111(a) of such Code. 22 (2) QUALIFIED LOCATION.—The term ‘‘quali- 23 fied location’’ means any location in the United 24 States— 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 5067 IS (A) which is leased or owned by the em- 1 ployer, and 2 (B) at which an employer conducts busi- 3 ness. 4 (3) COVID–19.—Except where the context 5 clearly indicates otherwise, any reference in this sec- 6 tion to COVID–19 shall be treated as including a 7 reference to the virus which causes COVID–19. 8 (4) SECRETARY.—The term ‘‘Secretary’’ means 9 the Secretary of the Treasury or such Secretary’s 10 delegate. 11 (5) OTHER TERMS.—Any term used in this sec- 12 tion which is also used in chapter 21 or 22 of the 13 Internal Revenue Code of 1986 shall have the same 14 meaning as when used in such chapter. 15 (e) CERTAIN GOVERNMENTAL EMPLOYERS.—This 16 section shall not apply to the Government of the United 17 States, the government of any State or political subdivi- 18 sion thereof, or any agency or instrumentality of any of 19 the foregoing. 20 (f) RULES RELATING TO EMPLOYER, ETC.— 21 (1) AGGREGATION RULE.—All persons treated 22 as a single employer under subsection (a) or (b) of 23 section 52 of the Internal Revenue Code of 1986, or 24 subsection (m) or (o) of section 414 of such Code, 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 5067 IS shall be treated as one employer for purposes of this 1 section. 2 (2) THIRD-PARTY PAYORS.—Any credit allowed 3 under subsection (a) shall be treated as a credit de- 4 scribed in section 3511(d)(2) of such Code. 5 (g) TREATMENT OF DEPOSITS.—The Secretary shall 6 waive any penalty under section 6656 of the Internal Rev- 7 enue Code of 1986 for any failure to make a deposit of 8 any applicable employment taxes if the Secretary deter- 9 mines that such failure was due to the reasonable anticipa- 10 tion of the credit allowed under subsection (a). 11 (h) DENIAL OF DOUBLE BENEFIT.—For purposes of 12 chapter 1 of such Code— 13 (1) the gross income of any employer, for the 14 taxable year which includes the last day of any cal- 15 endar quarter with respect to which a credit is al- 16 lowed under this section, shall be increased by the 17 amount of such credit, and 18 (2) no deduction or other benefit shall be de- 19 nied or reduced by reason of expenses taking into 20 account for purposes of determining the amount of 21 the credit allowed under this section. 22 (i) ELECTION NOT TO HAVE SECTION APPLY.—This 23 section shall not apply with respect to any employer for 24 any calendar quarter if such employer elects (at such time 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 5067 IS and in such manner as the Secretary may prescribe) not 1 to have this section apply. 2 (j) TRANSFERS TO CERTAIN TRUST FUNDS.—There 3 are hereby appropriated to the Federal Old-Age and Sur- 4 vivors Insurance Trust Fund and the Federal Disability 5 Insurance Trust Fund established under section 201 of 6 the Social Security Act (42 U.S.C. 401) and the Social 7 Security Equivalent Benefit Account established under 8 section 15A(a) of the Railroad Retirement Act of 1974 9 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in 10 revenues to the Treasury by reason of this section (without 11 regard to this subsection). Amounts appropriated by the 12 preceding sentence shall be transferred from the general 13 fund at such times and in such manner as to replicate 14 to the extent possible the transfers which would have oc- 15 curred to such Trust Fund or Account had this section 16 not been enacted. 17 (k) REGULATIONS AND GUIDANCE.—The Secretary 18 shall prescribe such regulations and other guidance as 19 may be necessary or appropriate to carry out the purposes 20 of this section, including— 21 (1) with respect to the application of the credit 22 under subsection (a) to third-party payors (including 23 professional employer organizations, certified profes- 24 sional employer organizations, or agents under sec- 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 5067 IS tion 3504 of the Internal Revenue Code of 1986), 1 regulations or other guidance allowing such payors 2 to submit documentation necessary to substantiate 3 the amount of the credit allowed under subsection 4 (a), 5 (2) regulations or other guidance for recap- 6 turing the benefit of credits determined under sub- 7 section (a) in cases where there is a subsequent ad- 8 justment to the credit determined under such sub- 9 section, and 10 (3) regulations or other guidance to prevent 11 abuse of the purposes of this section. 12 (l) APPLICATION.— 13 (1) IN GENERAL.—This section shall only apply 14 to amounts paid or incurred after January 31, 2020, 15 and before January 1, 2022. 16 (2) SPECIAL RULE FOR CERTAIN AMOUNTS 17 PAID OR INCURRED IN CALENDAR QUARTERS END- 18 ING BEFORE THE DATE OF THE ENACTMENT OF 19 THIS ACT.—For purposes of this section, in the case 20 of any amount paid or incurred after January 31, 21 2020, and on or before the last day of the last cal- 22 endar quarter ending before the date of the enact- 23 ment of this Act, such amount shall be treated as 24 paid or incurred on such date of enactment. 25 VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 5067 IS (m) VOLUNTARY LABELING.—Not later than 90 days 1 after the date of the enactment of this Act, the Adminis- 2 trator of the Environmental Protection Agency, in con- 3 sultation with the Director of the Centers for Disease Con- 4 trol and Prevention and other appropriate agencies, shall 5 establish a framework and guidelines for a voluntary label 6 to certify that air pressure ventilation, zoning, fresh air 7 intake, purification, or filtration systems meet the applica- 8 ble standards provided under subsection (c)(1). 9 Æ VerDate Sep 11 2014 02:15 Jan 10, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S5067.IS S5067 pbinns on DSKJLVW7X2PROD with BILLS