HR 3715 IHCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to expand the rehabilitation credit, and for other purposes.CommentsClose CommentsPermalink

October 1, 2009CommentsClose CommentsPermalink

Ms. SCHWARTZ (for herself, Mr. TIBERI, Mr. CARNAHAN, Mr. GORDON of Tennessee, Ms. BERKLEY, Mr. WELCH, Mr. LARSON of Connecticut, Mr. HIGGINS, Mr. NEAL of Massachusetts, Mr. PASCRELL, Mr. DAVIS of Illinois, Mr. YARMUTH, Mr. LEWIS of Georgia, Mr. FATTAH, Mr. BLUMENAUER, Mr. LANGEVIN, Mr. CONNOLLY of Virginia, Mr. HOLT, Mr. DOYLE, Mr. TURNER, Mr. ALTMIRE, Mr. COURTNEY, Mr. PRICE of North Carolina, Mr. TONKO, Mr. ARCURI, Ms. KAPTUR, Ms. SHEA-PORTER, Ms. SUTTON, Mr. MCGOVERN, Mr. ETHERIDGE, Ms. DELAURO, Ms. SCHAKOWSKY, Mr. MICHAUD, Mr. COSTELLO, Mr. ABERCROMBIE, Mr. TIERNEY, Ms. TSONGAS, Mr. ANDREWS, Mr. BRADY of Pennsylvania, Mr. SERRANO, and Mr. SESTAK) introduced the following bill; which was referred to the Committee on Ways and MeansCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to expand the rehabilitation credit, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Community Restoration and Revitalization Act of 2009’.CommentsClose CommentsPermalink

SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR CERTAIN SMALLER PROJECTS.

(a) In General- Section 47 of the Internal Revenue Code of 1986 (relating to rehabilitation credit) is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) Special Rule Regarding Certain Smaller Projects-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of any qualified rehabilitated building or portion thereof--CommentsClose CommentsPermalink





‘(A) which is placed in service after the date of the enactment of this subsection, andCommentsClose CommentsPermalink





‘(B) which is a smaller project,CommentsClose CommentsPermalink





subsection (a)(2) shall be applied by substituting ‘30 percent’ for ‘20 percent’.CommentsClose CommentsPermalink





‘(2) MAXIMUM CREDIT- The credit determined under this subsection with respect to any smaller project for all taxable years shall not exceed $1,500,000.CommentsClose CommentsPermalink





‘(3) SMALLER PROJECT DEFINED-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of this subsection, the term ‘smaller project’ means any qualified rehabilitated building or portion thereof if--CommentsClose CommentsPermalink





‘(i) the qualified rehabilitation expenditures taken into account for purposes of this section (or would have been so taken into account if this subsection had been in effect for all prior periods) with respect to the rehabilitation are not over $7,500,000, andCommentsClose CommentsPermalink





‘(ii) no credit was allowed under this section for either of the 2 prior taxable years with respect to such building.CommentsClose CommentsPermalink





‘(B) SPECIAL RULES-CommentsClose CommentsPermalink





‘(i) ENERGY EFFICIENCY EXPENDITURES NOT TAKEN INTO ACCOUNT- Amounts that are qualified rehabilitation expenditures solely by reason of subsection (c)(2)(E) shall not be taken into account under subparagraph (A)(i).CommentsClose CommentsPermalink





‘(ii) PROGRESS EXPENDITURES- Credit allowable by reason of subsection (d) shall not be taken into account under subparagraph (A)(ii).’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to periods after the date of the enactment of this Act, 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).CommentsClose CommentsPermalink

SEC. 3. USE FOR LODGING NOT TO DISQUALIFY FOR REHABILITATION CREDIT PROPERTY WHICH IS NOT A CERTIFIED HISTORIC STRUCTURE.

(a) In General- Subparagraph (C) of section 50(b)(2) of the Internal Revenue Code of 1986 (relating to property eligible for the investment credit) is amended by striking ‘certified historic structure’ and inserting ‘qualified rehabilitated building’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. DATE BY WHICH BUILDING MUST BE FIRST PLACED IN SERVICE.

(a) In General- Subparagraph (B) of section 47(c)(1) of the Internal Revenue Code of 1986 (relating to the date by which building must be first placed in service) is amended--CommentsClose CommentsPermalink





(1) by striking ‘BUILDING MUST BE FIRST PLACED IN SERVICE BEFORE 1936’ and inserting ‘DATE BY WHICH BUILDING MUST FIRST BE PLACED IN SERVICE’, andCommentsClose CommentsPermalink





(2) by striking ‘before 1936’ at the end of the subparagraph and inserting ‘no less than 50 years prior to the year in which qualified rehabilitation expenditures are taken into account under subsection (b)(1)’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 5. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT USE PROPERTY.

(a) In General- Clause (I) of section 47(c)(2)(B)(v) of the Internal Revenue Code of 1986 (relating to tax-exempt use property) is amended by inserting ‘and subclauses (I), (II), and (III) of section 168(h)(1)(B)(ii) shall not apply’ after ‘thereof’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 6. REHABILITATION CREDIT MAY BE TRANSFERRED.

(a) In General- Subsection (b) of section 47 of the Internal Revenue Code of 1986 (relating to when expenditures taken into account) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(3) CREDIT MAY BE ASSIGNED- The amount of qualified rehabilitation expenditures, not to exceed $5,000,000, which would (but for this paragraph) be taken into account under subsection (a) for any taxable year by any person (hereafter in this paragraph referred to as the ‘initial taxpayer’)--CommentsClose CommentsPermalink





‘(A) may be taken into account by any other person to whom such expenditures are assigned by the initial taxpayer, andCommentsClose CommentsPermalink





‘(B) shall not be taken to account by the initial taxpayer.CommentsClose CommentsPermalink





Any person to whom such expenditures are assigned under subparagraph (A) shall be treated for purposes of this title as the taxpayer with respect to such expenditures.’.CommentsClose CommentsPermalink





(b) Conforming Amendment- The heading for such subsection (b) is amended by inserting ‘; Eligibility for Credit May Be Assigned’ after ‘Account’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply with respect to rehabilitations the physical work on which begins after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 7. CREDIT FOR MODERATE REHABILITATIONS.

(a) In General- Subclause (I) of section 47(c)(1)(C)(i) of the Internal Revenue Code of 1986 (defining substantially rehabilitated) is amended by inserting ‘50 percent of’ before ‘the adjusted basis’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply with respect to rehabilitations the physical work on which begins after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 8. ADDITION OF ENERGY EFFICIENCY SUPPLEMENT TO REHABILITATION CREDIT.

(a) In General- Subsection (a) of section 47 of the Internal Revenue Code of 1986 is amended by striking ‘and’ at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting ‘, and’, and by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(3) in the case of a qualified rehabilitated building designed to achieve at least a 30 percent qualified energy use reduction as a result of being substantially rehabilitated (determined under subsection (e)), the energy efficiency supplement with respect to such building.’.CommentsClose CommentsPermalink





(b) Energy Efficiency Supplement- Section 47 of such Code is amended by adding at the end the following new subsection:CommentsClose CommentsPermalink





‘(e) Energy Efficiency Supplement-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (a)(3), the energy efficiency supplement shall be determined in accordance with the following table.CommentsClose CommentsPermalink

‘If the achieved qualifiedCommentsClose CommentsPermalink

At least 30 percent but not over 35 percentCommentsClose CommentsPermalink

--$2.00CommentsClose CommentsPermalink

Over 35 percent but not over 40 percentCommentsClose CommentsPermalink

--$2.67CommentsClose CommentsPermalink

Over 40 percent but not over 45 percentCommentsClose CommentsPermalink

--$3.42CommentsClose CommentsPermalink

Over 45 percent but not over 50 percentCommentsClose CommentsPermalink

--$4.18CommentsClose CommentsPermalink

Over 50 percentCommentsClose CommentsPermalink

--$5.00.CommentsClose CommentsPermalink

‘(2) LIMITATION- In no event shall the energy efficiency supplement exceed 50 percent of the qualified rehabilitation expenditures with respect to the qualified rehabilitated building.CommentsClose CommentsPermalink





‘(3) PARTIAL ALLOWANCE-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In order to encourage implementation of building retrofits, the Secretary shall prescribe by regulations the conditions under which a taxpayer may receive a partial energy efficiency supplement corresponding to the actual qualified energy use reduction achieved.CommentsClose CommentsPermalink





‘(B) TAXPAYER ELIGIBILITY- This paragraph shall apply to a taxpayer only if--CommentsClose CommentsPermalink





‘(i) the taxpayer certifies to the Secretary that the rehabilitation was undertaken as part of a plan to achieve a qualified energy use reduction of at least 30 percent, andCommentsClose CommentsPermalink





‘(ii) such reduction is not substantiated under any certification process prescribed by the Secretary, but a qualified energy use reduction of at least 25 percent is so substantiated.CommentsClose CommentsPermalink





‘(C) MAXIMUM PARTIAL ALLOWANCE- The energy efficiency supplement allowable by reason of this paragraph shall not exceed the product of--CommentsClose CommentsPermalink





‘(i) $2.00, andCommentsClose CommentsPermalink





‘(ii) a fraction--CommentsClose CommentsPermalink





‘(I) the numerator of which is the number of percentage points of the achieved qualified energy use reduction, andCommentsClose CommentsPermalink





‘(II) the denominator of which is 30.CommentsClose CommentsPermalink





‘(4) QUALIFIED ENERGY USE REDUCTION- For purposes of this subsection, the term ‘qualified energy use reduction’ means, for buildings or aggregation of buildings, improvement in energy performance with reference to the energy consumption during the previous year of the building or aggregation of buildings being rehabilitated, while adjusting for other relevant factors including prior vacancy, introduction of modern technologies and systems, and changes in use and occupancy loads.CommentsClose CommentsPermalink





‘(5) REGULATIONS- The Secretary, after consultation with the Administrator of the Environmental Protection Agency and the Secretary of the Interior, shall promulgate such regulations as may be necessary or appropriate to carry out the purposes of the energy efficiency supplement, including prescribing the manner and method for calculating, verifying, and certifying qualified energy use reductions. Such regulations shall provide that a qualified energy use reduction shall be determined by using an established energy benchmarking tool which shall, to the maximum extent feasible, take into account the requirements necessary to become a certified rehabilitation and shall include an approach that determines success in energy efficiency based on actual measured savings after a retrofit is complete.CommentsClose CommentsPermalink





‘(6) COORDINATION- The Secretary shall designate processes for tracking the numbers and locations of buildings claiming the energy efficiency supplement, with information on projected and actual savings of energy and its value over time in coordination with the Department of Energy.’.CommentsClose CommentsPermalink





(c) Substantial Rehabilitation Requirement Not to Apply to Energy Efficiency Supplement- Subparagraph (A) of section 47(c)(1) (defining qualified rehabilitated building) is amended by adding at the end the following new flush sentence:CommentsClose CommentsPermalink





‘Clause (i) shall not apply to so much of the rehabilitation credit as is attributable to the energy efficiency supplement under subsection (a)(3).’.CommentsClose CommentsPermalink





(d) Effective Dates-CommentsClose CommentsPermalink





(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink





(2) WAIVER OF SUBSTANTIAL REHABILITATION REQUIREMENT- The amendment made by subsection (c) shall apply with respect to rehabilitations the physical work on which begins after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 9. MODIFICATION TO DEFINITION OF QUALIFIED REHABILITATION EXPENDITURE.

(a) In General- Clause (i) of section 47(c)(2)(A) of the Internal Revenue Code of 1986 (relating to the definition of qualified rehabilitation expenditures) is amended by striking ‘or’ at the end of subclause (III), by striking subclause (IV), and by inserting after subclause (III) the following new subclauses:CommentsClose CommentsPermalink





‘(IV) rehabilitated building energy efficiency property, orCommentsClose CommentsPermalink





‘(V) an addition or improvement to property described in subclause (I), (II), (III), or (IV), and’.CommentsClose CommentsPermalink





(b) Rehabilitated Building Energy Efficiency Property- Section 47(c)(2) of such Code is amended by adding at the end the following new subparagraph:CommentsClose CommentsPermalink





‘(E) REHABILITATED BUILDING ENERGY EFFICIENCY PROPERTY-CommentsClose CommentsPermalink





‘(i) IN GENERAL- For purposes of subparagraph (A), the term ‘rehabilitated building energy efficiency property’ means property which is certified as being--CommentsClose CommentsPermalink





‘(I) affixed to, adjacent to, or integral to the provision of renewable energy to a qualified rehabilitated building, orCommentsClose CommentsPermalink





‘(II) installed as part of a plan designed to achieve any qualified energy use reduction (as defined in subsection (e)(4)) or a reduction in water use.CommentsClose CommentsPermalink





Subparagraph (B)(i) shall not apply to rehabilitated building energy efficiency property.CommentsClose CommentsPermalink





‘(ii) CERTIFICATION- The Secretary shall prescribe the manner and method for the making of certifications under clause (i).’.CommentsClose CommentsPermalink





(c) Enlargements- Clause (iii) of section 47(c)(2)(B) of such Code is amended by adding at the end the following new sentence: ‘The preceding sentence shall not apply to any rehabilitated building energy efficiency property which is an addition or improvement to a building.’CommentsClose CommentsPermalink





(d) Effective Date- The amendments made by this section shall apply to qualified rehabilitated buildings placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 10. COORDINATION OF ENERGY CREDIT WITH REHABILITATION CREDIT.

(a) In General- Paragraph (2) of section 48(a) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B).CommentsClose CommentsPermalink





(b) Basis Reduction- Paragraph (3) of section 50(c) of such Code is amended by adding at the end the following new flush sentence:CommentsClose CommentsPermalink





‘In the case of property that qualifies for both the energy credit and the rehabilitation credit, the preceding sentence shall be applied by substituting ‘none’ for ‘only 50 percent’ each place it appears.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 11. SPECIAL RULES FOR DISPOSITIONS OF STATE HISTORIC TAX CREDITS.

(a) In General- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139C the following new section:CommentsClose CommentsPermalink

‘SEC. 139D. DISPOSITIONS OF STATE HISTORIC TAX CREDITS.

‘(a) Exclusion From Income; Basis Reduction-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of a taxpayer who receives a State historic tax credit and transfers or disposes of such credit, or receives a refund of all or a portion of such credit--CommentsClose CommentsPermalink





‘(A) no portion of the net proceeds of such transfer or disposition or of such refund shall constitute income to such taxpayer under section 61(a), andCommentsClose CommentsPermalink





‘(B) the taxpayer’s adjusted basis in the property with respect to which the State historic tax credit is allowed shall be reduced by an amount equal to such net proceeds or refund received by such taxpayer,CommentsClose CommentsPermalink





unless the taxpayer makes an election under subsection (b).CommentsClose CommentsPermalink





‘(2) DETERMINATION OF REDUCTION IN BASIS- The reduction in basis under paragraph (1) shall be applied--CommentsClose CommentsPermalink





‘(A) first, against the basis in the land,CommentsClose CommentsPermalink





‘(B) second, against so much of the basis of any building or interest therein as was not treated as a qualified rehabilitation expenditure by reason of clause (ii) or (iii) of section 47(c)(2)(B), andCommentsClose CommentsPermalink





‘(C) third, against the remaining basis in the property.CommentsClose CommentsPermalink





‘(D) ADJUSTMENT IN BASIS OF INTEREST IN PARTNERSHIP OR S CORPORATION- The adjusted basis of--CommentsClose CommentsPermalink





‘(i) a partner’s interest in a partnership, orCommentsClose CommentsPermalink





‘(ii) stock in an S corporation (as defined in section 1361(a)(1)),CommentsClose CommentsPermalink





shall be appropriately adjusted to take into account adjustments made under this subsection in the basis of property held by the partnership or S corporation (if any).CommentsClose CommentsPermalink





‘(b) Election To Include in Income-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of a taxpayer who elects to have this subsection apply, the net proceeds of the transfer or disposition or the refund described in subsection (a) received by such taxpayer shall constitute income to such taxpayer under section 61(a).CommentsClose CommentsPermalink





‘(2) MAKING OF ELECTION- An election under this subsection shall be made at such time and in such manner as the Secretary of the Treasury may by regulation prescribe. Such election shall apply for the taxable year for which it is made and for all subsequent taxable years and may be revoked only with the consent of the Secretary of the Treasury.CommentsClose CommentsPermalink





‘(c) Effect on Qualified Rehabilitation Expenditures and Rehabilitation Credits- For purposes of determining the rehabilitation credit allowable to a taxpayer under section 47, the transfer or disposition of State historic tax credits with respect to any property by a taxpayer shall not affect or reduce the amount of qualified rehabilitation expenditures (as defined in section 47(c)(2)) incurred in connection with such property, nor shall such transfer or disposition, nor any basis adjustments under subsection (a), be treated as an early disposition of investment credit property for purposes of the recapture provisions of section 50.CommentsClose CommentsPermalink





‘(d) State Historic Tax Credits Defined- For purposes of this section, the term ‘State historic tax credit’ means any credit against State or local tax liabilities which--CommentsClose CommentsPermalink





‘(1) is allowable under the laws of any State or political subdivision thereof to a taxpayer with respect to expenditures made for the rehabilitation of property identified by such laws, andCommentsClose CommentsPermalink





‘(2) is transferable or refundable under such laws.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for such part III is amended by inserting after the item relating to section 139C the following new item:CommentsClose CommentsPermalink





‘Sec. 139D. Dispositions of State historic tax credits.’.CommentsClose CommentsPermalink





(c) Effective Date- This section shall apply to transfers or dispositions made, or refunds received, after the date of the enactment of this Act.CommentsClose CommentsPermalink