H.R. 4861

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4861 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 4861

To amend the Internal Revenue Code of 1986 to provide a credit for 
hazard mitigation projects in connection with certain working 
waterfront property.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

August 1, 2025

Ms. Pingree (for herself and Mr. Murphy) 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 provide a credit for 
hazard mitigation projects in connection with certain working 
waterfront property.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Working Waterfront Disaster 
Mitigation Tax Credit Act''.

SEC. 2. WORKING WATERFRONT DISASTER MITIGATION PROJECT CREDIT.

(a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 48E the following new section:

``SEC. 48F. WORKING WATERFRONT DISASTER MITIGATION PROJECT CREDIT.

``(a) In General.--For purposes of section 46, the working 
waterfront disaster mitigation project for any taxable year is an 
amount equal to 30 percent of the qualified investment for such taxable 
year.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--The amount of the credit allowed 
under this section with respect to any taxpayer shall 
not exceed $300,000.
``(B) Aggregation rules.--All taxpayers treated as 
a single employer under subsection (a) or (b) of 
section 52 or subsection (m) or (o) of section 414 
shall be treated as a single taxpayer for purposes of 
subparagraph (A).
``(C) Inflation adjustment.--In the case of any 
taxable year beginning after December 31, 2026, the 
$300,000 dollar amount in subparagraph (A) shall be 
increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment 
determined under section 1(f)(3) for the 
calendar year in which the taxable year begins, 
by substituting `calendar year 2025' for 
`calendar year 2017' in subparagraph (A)(ii) 
thereof.
If any amount as increased under the preceding sentence 
is not a multiple of $10,000, such amount shall be 
rounded to the nearest multiple of $10,000.
``(2) Time limitation.--No credit shall be allowed to a 
taxpayer for a taxable year if such taxpayer has been allowed a 
credit under this section (other than qualified progress 
expenditures allowed under subsection (c)(3)) for any taxable 
year in the 10-year period ending with the last day of such 
taxable year.
``(c) Qualified Investment.--
``(1) In general.--For purposes of this section, the 
qualified investment for any taxable year is the basis of 
eligible property placed in service by the taxpayer during such 
taxable year which is part of a qualifying working waterfront 
disaster mitigation project.
``(2) Eligible property.--For purposes of this subsection, 
the term `eligible property' means property--
``(A) which is tangible property,
``(B) with respect to which depreciation (or 
amortization in lieu of depreciation) is allowable, and
``(C) which is--
``(i) constructed, reconstructed, or 
erected by the taxpayer, or
``(ii) acquired by the taxpayer if the 
original use of such property commences with 
the taxpayer.
``(3) Certain qualified progress expenditures rules made 
applicable.--Rules similar to the rules of subsections (c)(4) 
and (d) of section 46 (as in effect on the day before the 
enactment of the Revenue Reconciliation Act of 1990) shall 
apply for purposes of this section.
``(4) Coordination with rehabilitation credit.--The 
qualified investment with respect to any qualifying working 
waterfront disaster mitigation project for any taxable year 
shall not include that portion of the basis of any project 
which is attributable to qualified rehabilitation expenditures 
(as defined in section 47(c)(2)).
``(d) Qualifying Working Waterfront Disaster Mitigation Project.--
For purposes of this section--
``(1) In general.--The term `qualifying working waterfront 
disaster mitigation project' means any project--
``(A) which is substantially designed in compliance 
with--
``(i) in the case of any project placed in 
service before January 1, 2033, the 2021 
International Code Council International 
Building Code, and
``(ii) in the case of any project placed in 
service on or after such date, the most recent 
applicable International Code Council model 
code which has been affirmed by the Secretary 
for purposes of this section not later than 5 
years before the date such project is placed in 
service, and
``(B) which designed to prevent or mitigate damage 
to working waterfront property from natural hazards 
using one or more of the following:
``(i) Structural elevation.--The elevation 
of continuous foundation walls, the elevation 
of structures on open foundations (such as 
piles, piers, posts or columns), the elevation 
of structures on fill, the conversion of the 
second story, and other methods involving 
structural elevation as the Secretary may 
prescribe.
``(ii) Flood risk reduction.--Stormwater 
management (including the construction, 
installation or modification of culverts, 
drainage pipes, pumping stations, floodgates, 
bioswales, detention and retention basins, and 
other stormwater management facilities), flood 
diversion and storage measures, slope 
stabilization or grading to direct flood waters 
away from businesses, flood protection measures 
for water and sanitary sewer systems or other 
utility systems, vegetation management for 
shoreline stabilization (coastal, riverine, 
riparian and other littoral zones), flood 
protection and stabilization measures for roads 
and bridges, and such other flood risk 
reduction methods as the Secretary may 
prescribe.
``(iii) Shoreline stabilization.--Reducing 
the risk to structures or infrastructure from 
erosion and landslides (including through the 
installation of geosynthetics, surface and 
subsurface drainage, stabilizing sod, and 
vegetative buffer strips), preserving mature 
vegetation, decreasing slope angles, 
stabilizing with riprap and other means of 
slope anchoring, and other shoreline 
stabilization methods as the Secretary may 
prescribe.
``(iv) Floodproofing.--Creating a space 
that is protected by walls that are 
substantially impermeable and resistant to 
flood loads, the use of flood-damage-resistant 
materials and construction techniques to 
minimize flood damage to areas below the flood 
protection level of a structure.
``(v) Retrofitting.--Changes made to an 
existing structure to reduce or eliminate the 
possibility of damage to that structure from 
flooding, erosion, extreme temperatures, high 
winds, or other hazards.
``(vi) Warning systems.--Equipment and 
systems to warn residents of impending hazards 
(including enhanced or reversed 911 systems), 
weather stations, rain gauges, flood alarms, 
and such other warning systems as the Secretary 
may prescribe.
``(2) Working waterfront property.--The term `working 
waterfront property' means real property--
``(A) which is located within the United States or 
a possession of the United States, and
``(B) which is used by the taxpayer to carry on an 
active trade or business--
``(i) which meets the gross receipts test 
of paragraph (3), and
``(ii) which--
``(I) provides access to navigable 
waters to persons engaged in commercial 
fishing, recreational fishing and 
boating, boatbuilding, aquaculture, 
dredging, or other water-dependent 
activities, and
``(II) is used for or supports 
activities described in subclause (I).
``(3) Gross receipts test.--
``(A) In general.--A trade or business meets the 
gross receipts test of this paragraph if the average 
annual gross receipts of such trade or business for the 
3-taxable-year period preceding such taxable year does 
not exceed $47,000,000.
``(B) Aggregation rules.--All trades or business of 
a taxpayer that are treated as a single employer under 
subsection (a) or (b) of section 52 or subsection (m) 
or (o) of section 414 shall be treated as one trade or 
business for purposes of subparagraph (A).
``(C) Other rules.--Rules similar to the rules of 
section 448(c)(3) shall apply for purposes of this 
paragraph.
``(D) Inflation adjustment.--In the case of any 
taxable year beginning after December 31, 2026, the 
dollar amount in subparagraph (A) shall be increased by 
an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment 
determined under section 1(f)(3) for the 
calendar year in which the taxable year begins, 
by substituting `calendar year 2025' for 
`calendar year 2017' in subparagraph (A)(ii) 
thereof.
If any amount as increased under the preceding sentence 
is not a multiple of $1,000,000, such amount shall be 
rounded to the nearest multiple of $1,000,000.
``(e) Regulations.--The Secretary, in consultation with the 
Administrator of the Federal Emergency Management Agency, shall issue 
such regulations or other guidance as may be necessary or appropriate 
to carry out the purposes of this section.''.
(b) Inclusion in Investment Credit.--Section 46 of the Internal 
Revenue Code of 1986 is amended by striking ``and'' at the end of 
paragraph (5), by striking the period at the end of paragraph (6) and 
inserting ``, and'', and by adding at the end the following new 
paragraph:
``(7) the working waterfront disaster mitigation project 
credit.''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) of the Internal Revenue Code of 
1986 is amended by striking ``and'' at the end of clause (v), 
by striking the period at the end of clause (vi) and inserting 
``, and'', and by adding at the end the following:
``(vii) the basis of any property which is 
part of a qualifying working waterfront 
disaster mitigation project (as defined in 
section 48F(d)(2)).''.
(2) Section 50(a)(2)(E) of such Code is amended by striking 
``or 48E(e)'' and inserting ``48E(e), or 48F(c)(2)''.
(3) The table of sections for subpart E of part IV of 
subchapter A of chapter 1 of such Code is amended by inserting 
after the item relating to section 48E the following new item:

``Sec. 48F. Working waterfront disaster mitigation project credit.''.
(d) Treatment of Possessions.--
(1) Payments to possessions with mirror code tax systems.--
The Secretary of the Treasury shall pay to each possession of 
the United States which has a mirror code tax system amounts 
equal to the loss (if any) to that possession by reason of the 
amendments made by this section. Such amounts shall be 
determined by the Secretary of the Treasury based on 
information provided by the government of the respective 
possession.
(2) Payments to other possessions.--The Secretary of the 
Treasury shall pay to each possession of the United States 
which does not have a mirror code tax system amounts estimated 
by the Secretary of the Treasury as being equal to the 
aggregate benefits (if any) that would have been provided to 
residents of such possession by reason of the amendments made 
by this section if a mirror code tax system had been in effect 
in such possession. The preceding sentence shall not apply 
unless the respective possession has a plan, which has been 
approved by the Secretary of the Treasury, under which such 
possession will promptly distribute such payments to its 
residents.
(e) Effective Date.--The amendments made by this section shall 
apply to periods after December 31, 2025, in taxable years ending after 
such date, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before the date 
of the enactment of the Revenue Reconciliation Act of 1990).
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