[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3694 Introduced in Senate (IS)]
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116th CONGRESS
2d Session
S. 3694
To amend the Internal Revenue Code of 1986 to permanently allow a tax
deduction at the time an investment is made in property used to extract
critical minerals and metals from the United States, to modify the
prohibition on the acquisition of certain sensitive materials from non-
allied foreign nations, and for other purposes.
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IN THE SENATE OF THE UNITED STATES
May 12, 2020
Mr. Cruz introduced the following bill; which was read twice and
referred to the Committee on Finance
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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 to extract
critical minerals and metals from the United States, to modify the
prohibition on the acquisition of certain sensitive materials from non-
allied foreign nations, and for other purposes.
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 ``Onshoring Rare Earths Act of 2020''
or the ``ORE Act''.
SEC. 2. PERMANENT FULL EXPENSING FOR PROPERTY USED TO EXTRACT CRITICAL
MINERALS AND METALS WITHIN THE UNITED STATES.
(a) In General.--Section 168(k) of the Internal Revenue Code of
1986 is amended by adding at the end the following:
``(11) Special rule for property used in the extraction of
critical minerals and metals within the united states.--
``(A) In general.--In the case of any qualified
property which is directly involved in extracting
critical minerals and metals from deposits in the
United States--
``(i) paragraph (2)(A)(iii) shall not
apply, and
``(ii) the applicable percentage shall be
100 percent.
``(B) Critical minerals and metals.--For purposes
of this paragraph, the term `critical minerals and
metals' means cerium, cobalt, dysprosium, erbium,
europium, gadolinium, graphite, holmium, lanthanum,
lithium, lutetium, manganese, neodymium, praseodymium,
promethium, samarium, scandium, terbium, thulium,
ytterbium, and yttrium.''.
(b) Effective Date.--The amendment made by this section shall apply
to property placed in service after December 31, 2019.
SEC. 3. PERMANENT FULL EXPENSING FOR NONRESIDENTIAL REAL PROPERTY USED
IN THE EXTRACTION OF CRITICAL MINERALS AND METALS WITHIN
THE UNITED STATES.
(a) In General.--Section 168 of the Internal Revenue Code of 1986
is amended by adding at the end the following new subsection:
``(n) Special Allowance for Nonresidential Real Property Used in
the Extraction of Critical Minerals and Metals Within the United
States.--
``(1) New structures.--In the case of any qualified real
property--
``(A)(i) if such property is placed in service on
or after the date of enactment of this subsection, the
depreciation deduction provided by section 167(a) for
the taxable year in which such property is placed in
service shall include an allowance equal to 100 percent
of the adjusted basis of such property, or
``(ii) if such property was placed in service
before the date of enactment of this subsection, the
depreciation deduction provided by section 167(a) for
the first taxable year beginning after such date shall
include an allowance equal to 100 percent of the
adjusted basis of such property, and
``(B) the adjusted basis of such property shall be
reduced by the amount of such deduction before
computing the amount otherwise allowable as a
depreciation deduction under this chapter for such
taxable year and any subsequent taxable year.
``(2) Qualified real property.--For purposes of this
subsection, the term `qualified real property' means any
nonresidential real property which is directly involved in
extracting critical minerals and metals (as defined in
subsection (k)(11)(B)) from deposits in the United States.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2019.
SEC. 4. DEDUCTION FOR PURCHASE OF CRITICAL MINERALS AND METALS
EXTRACTED WITHIN THE UNITED STATES.
(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section 176
the following new section:
``SEC. 177. DEDUCTION FOR PURCHASE OF CRITICAL MINERALS AND METALS
EXTRACTED WITHIN THE UNITED STATES.
``(a) Allowance of Deduction.--There shall be allowed as a
deduction for the taxable year an amount equal to 200 percent of the
cost paid or incurred by the taxpayer for the purchase or acquisition
of critical minerals and metals (as defined in section 168(k)(11)(B))
which have been extracted from deposits in the United States.
``(b) Application With Other Deductions.--No deduction shall be
allowed under any other provision of this chapter with respect to any
expenditure with respect to which a deduction is allowed or allowable
under this section to the taxpayer.''.
(b) Conforming Amendment.--The table of sections for part VI of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to section 176 the
following new item:
``Sec. 177. Deduction for purchase of critical minerals and metals
extracted within the United States.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 2019.
SEC. 5. MODIFICATION OF PROHIBITION ON ACQUISITION OF CERTAIN SENSITIVE
MATERIALS.
(a) Extension of Prohibition to Mined, Refined, and Separated
Materials.--Subsection (a)(1) of section 2533c of title 10, United
States Code, is amended by striking ``melted or produced'' and
inserting ``mined, refined, separated, melted, or produced''.
(b) Commercially Available Off-the-Shelf Item Exception.--
Subsection (c)(3)(A)(i) of such section is amended by striking ``50
percent or more tungsten'' and inserting ``50 percent or more covered
material''.
SEC. 6. GRANT PROGRAM FOR DEVELOPMENT OF CRITICAL MINERALS AND METALS.
(a) Establishment.--The Secretary of Defense, in consultation with
the Secretary of the Interior, shall establish a grant program to
finance pilot projects for the development of critical minerals and
metals in the United States.
(b) Limitation on Grant Awards.--A grant awarded under subsection
(a) may not exceed $10,000,000.
(c) Economic Viability.--In awarding grants under subsection (a),
the Secretary of Defense shall give priority to projects the Secretary
determines are likely to be economically viable over the long term.
(d) Secondary Recovery.--In awarding grants under subsection (a)
during a fiscal year, the Secretary of Defense shall seek to award not
less than 30 percent of the total amount of grants awarded during that
fiscal year for projects relating to secondary recovery of critical
minerals and metals.
(e) Authorization of Appropriations.--There are authorized to be
appropriated to the Secretary of Defense $50,000,000 for each of fiscal
years 2021 through 2024 to carry out the grant program established
under subsection (a).
(f) Definitions.--In this section:
(1) Critical minerals and metals.--The term ``critical
minerals and metals'' means cerium, cobalt, dysprosium, erbium,
europium, gadolinium, graphite, holmium, lanthanum, lithium,
lutetium, manganese, neodymium, praseodymium, promethium,
samarium, scandium, terbium, thulium, ytterbium, and yttrium.
(2) Secondary recovery.--The term ``secondary recovery''
means the recovery of minerals and metals from discarded end-
use products or from waste products produced during the metal
refining and manufacturing process, including from mine waste
piles, acid mine drainage sludge, or byproducts produced
through legacy mining and metallurgy activities.
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