HR3549-119

What This Bill Does

The Critical Businesses Preparedness Act adds new Internal Revenue Code section 45BB. A specified taxpayer receives a qualified disaster preparedness electric generator expenses credit equal to 30 percent of qualified expenses paid or incurred during the taxable year. A specified taxpayer is a trade or business Treasury determines, after consulting FEMA, to be critical after a flood or hurricane; the bill says this must include hospitals, nursing homes, grocery stores, and gas stations. Qualified expenses are amounts paid or incurred for an electric generator, including installation costs, placed in service in a high-risk disaster area and used in the critical business. High-risk disaster areas are areas Treasury determines, after FEMA consultation, to be at high risk of flooding or hurricanes. Expenses receiving the credit cannot also receive another deduction or credit to the extent of the credit, and the property's basis is reduced by the credit amount.

Who Benefits and How

Hospitals in high-risk flood or hurricane areas benefit from a 30 percent credit for generator and installation costs. Nursing homes benefit from tax support for backup power that protects residents during disasters. Grocery stores benefit from lower after-tax costs for generators that keep food and supplies available after storms. Gas stations benefit from generator support that can preserve fuel access after hurricanes or floods.

Who Bears the Burden and How

Treasury tax staff must define critical businesses and high-risk disaster areas after FEMA consultation. FEMA staff must support Treasury determinations about critical businesses and disaster-risk areas. Businesses claiming the credit must track qualified expenses, avoid double benefits, and reduce basis. Federal revenue falls by the amount of allowed generator credits.

Key Provisions

• Creates a 30 percent tax credit for qualified disaster preparedness electric generator expenses.
• Includes generator purchase and installation costs placed in service in high-risk flood or hurricane areas.
• Requires Treasury to determine critical businesses after consulting FEMA and includes hospitals, nursing homes, grocery stores, and gas stations.
• Prohibits double deductions or credits for credited expenses and reduces property basis by the credit amount.