IN THE SENATE OF THE UNITED STATES
January 28, 2021
Ms. Rosen (for herself and Mr. Cramer) introduced the following bill; which was read twice and referred to the Committee on Finance
To provide a credit against payroll taxes to businesses and nonprofit organizations that purchase or upgrade ventilation and air filtration systems to help prevent the spread of COVID–19 and other airborne communicable diseases.
This Act may be cited as the
Filtering and Retrofitting the Environment for Safe and Healthy Activities Indoors and Revenue (FRESH AIR) for Businesses Act.
Business ventilation tax credit
In the case of an employer, there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 50 percent of the qualified ventilation, zoning, and air filtration and purification expenses paid or incurred by the employer during such calendar quarter.
Limitations and refundability
Overall dollar limitation on credit
The amount of the credit allowed under subsection (a) with respect to any employer for all calendar quarters with respect to any qualified location shall not exceed $15,000.
Credit limited to employment taxes
The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes (reduced by any credits allowed under subsections (e) and (f) of section 3111 of the Internal Revenue Code of 1986, sections 7001 and 7003 of the Families First Coronavirus Response Act, and section 2301 of the CARES Act) on the wages paid with respect to the employment of all the employees of the employer for such calendar quarter.
Refundability of excess credit
If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Internal Revenue Code of 1986.
Treatment of payments
For purposes of section 1324 of title 31, United States Code, any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.
Qualified ventilation, zoning, and air filtration and purification expenses; qualified location
For purposes of this section—
The term qualified ventilation, zoning, and air filtration and purification expenses means amounts paid or incurred by the employer for—
the purchase and installation of a heating, ventilation, and air conditioning system—
which is placed in service at a qualified location,
which includes indoor air quality sensors and controls, and
is designed to filter air at a rate equivalent to or in excess of a MERV 13 or equivalent level of filtration,
uses UV-based purification, or
provides a fresh air supply at least 17 cubic feet per minute per occupant, the ability to conduct zoning and sub-zoning, and the ability to direct air via directional and controlled air outlets in order to minimize draft air exchange between neighboring occupants or zones,
upgrading a heating, ventilation, and air conditioning system at a qualified location which does not meet the requirements of any item of subparagraph (A)(iii) so that the system meets such requirements,
the purchase of any—
which is used in a heating, ventilation, and air conditioning system at a qualified location, and
which filters air at a rate equivalent to or in excess of a MERV 13 or equivalent level of filtration, or
UV light bulb which is used in a heating, ventilation, and air conditioning system at a qualified location,
the purchase of any stand alone air cleaner or air purifier—
which is placed in service at such qualified location by the employer,
which is capable of providing at least 5 air changes per hour at such qualified location, and
is capable of using HEPA filters,
uses UV-based purification, or
uses electronic air cleaners or ionizers to clean air at a rate equivalent to a HEPA filter, and
the purchase of any—
HEPA filter used in an air cleaner described in subparagraph (D)(iii)(I),
UV light bulb used in an air purifier described in subparagraph (D)(iii)(II), or
purification component used in an air purifier described in subparagraph (D)(iii)(III).
Such term shall not include any expenses for property placed in service after December 31, 2021.
For purposes of this section—
Applicable employment taxes
The term applicable employment taxes means the following:
The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986.
So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code.
The term qualified location means any location in the United States—
which is leased or owned by the employer, and
at which an employer conducts business.
Except where the context clearly indicates otherwise, any reference in this section to COVID–19 shall be treated as including a reference to the virus which causes COVID–19.
The term Secretary means the Secretary of the Treasury or such Secretary’s delegate.
Any term used in this section which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter.
Certain governmental employers
This section shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing.
Rules relating to employer, etc
All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or (o) of section 414 of such Code, shall be treated as one employer for purposes of this section.
Any credit allowed under subsection (a) shall be treated as a credit described in section 3511(d)(2) of such Code.
Treatment of deposits
The Secretary shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of any applicable employment taxes if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under subsection (a).
Denial of double benefit
For purposes of chapter 1 of such Code—
the gross income of any employer, for the taxable year which includes the last day of any calendar quarter with respect to which a credit is allowed under this section, shall be increased by the amount of such credit, and
no deduction or other benefit shall be denied or reduced by reason of expenses taking into account for purposes of determining the amount of the credit allowed under this section.
Election not To have section apply
This section shall not apply with respect to any employer for any calendar quarter if such employer elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply.
Transfers to certain trust funds
There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n–1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted.
Regulations and guidance
The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out the purposes of this section, including—
with respect to the application of the credit under subsection (a) to third-party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of the Internal Revenue Code of 1986), regulations or other guidance allowing such payors to submit documentation necessary to substantiate the amount of the credit allowed under subsection (a),
regulations or other guidance for recapturing the benefit of credits determined under subsection (a) in cases where there is a subsequent adjustment to the credit determined under such subsection, and
regulations or other guidance to prevent abuse of the purposes of this section.
This section shall only apply to amounts paid or incurred after January 31, 2020, and before January 1, 2022.
Special rule for certain amounts paid or incurred in calendar quarters ending before the date of the enactment of this Act
For purposes of this section, in the case of any amount paid or incurred after January 31, 2020, and on or before the last day of the last calendar quarter ending before the date of the enactment of this Act, such amount shall be treated as paid or incurred on such date of enactment.
Not later than 90 days after the date of the enactment of this Act, the Administrator of the Environmental Protection Agency, in consultation with the Director of the Centers for Disease Control and Prevention and other appropriate agencies, shall establish a framework and guidelines for a voluntary label to certify that air pressure ventilation, zoning, fresh air intake, purification, or filtration systems meet the applicable standards provided under subsection (c)(1).