Community Restoration and Revitalization Act of 2005 - Amends the Internal Revenue Code to: (1) allow an increased rehabilitation tax credit for certain low-income buildings; (2) allow a basis reduction adjustment for property eligible for the credit; (3) increase the credit for certain smaller buildings; (4) allow property eligible for the credit to be used for lodging purposes; (5) modify placed-in-service rules for credit property; (6) modify qualification rules for credit property that is tax-exempt use property; (7) increase the credit for buildings in high cost areas; and (8) exempt certain condominium transactions from rehabilitation tax credit recapture requirements.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3159 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 3159
To amend the Internal Revenue Code of 1986 to modify the rehabilitation
credit and the low-income housing credit.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 30, 2005
Mr. English of Pennsylvania (for himself, Mr. Jefferson, Mr. McCrery,
Mr. Turner, Mrs. Jones of Ohio, Mrs. Johnson of Connecticut, Mr.
Carnahan, Mr. McGovern, Mr. Udall of Colorado, Mr. Jenkins, Mr. Miller
of North Carolina, Mr. Miller of Florida, Mr. Andrews, Mr. Menendez,
Mr. Neal of Massachusetts, Mr. Wolf, Mr. Lewis of Georgia, Mr. Ross,
Mr. Baker, Mr. Paul, Mr. Davis of Alabama, Ms. Herseth, and Mr.
Boehlert) 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 modify the rehabilitation
credit and the low-income housing credit.
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 ``Community Restoration and
Revitalization Act of 2005''.
SEC. 2. MODIFICATIONS TO RULES FOR DETERMINING THE APPLICABLE
PERCENTAGE FOR CERTAIN BUILDINGS ELIGIBLE FOR LOW-INCOME
HOUSING CREDIT.
(a) In General.--Subparagraph (B) of section 42(b)(2) of the
Internal Revenue Code of 1986 (relating to the method of prescribing
the applicable percentage) is amended by striking ``and'' at the end of
clause (i), by striking the period at the end of clause (ii) and
inserting a comma, and by adding at the end the following new clauses:
``(iii) 87.5 percent of the qualified basis
of a building described in paragraph (1)(A), if
the basis of the building is subject to the
basis adjustment for rehabilitation credit
property required under section 50(c), and
``(iv) 37.5 percent of the qualified basis
of a building described in paragraph (1)(B), if
the basis of the building is subject to the
basis adjustment for rehabilitation credit
property required under section 50(c).''.
(b) Effective Date.--The amendments made by this section shall
apply to--
(1) housing credit dollar amounts allocated after December
31, 2004, and
(2) buildings placed in service after such date to the
extent paragraph (1) of section 42(h) of the Internal Revenue
Code of 1986 does not apply to any building by reason of
paragraph (4) thereof, but only with respect to bonds issued
after such date.
SEC. 3. MODIFICATION TO BASIS ADJUSTMENT RULE.
(a) In General.--Paragraph (3) of subsection 50(c) of the Internal
Revenue Code of 1986 (relating to special rules for determining basis)
is amended by striking ``energy credit or reforestation credit'' and
inserting ``energy credit, reforestation credit, or rehabilitation
credit''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2004.
SEC. 4. 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:
``(e) Special Rule Regarding Certain Smaller Projects.--
``(1) In general.--In the case of any qualified
rehabilitated building or portion thereof--
``(A) which is placed in service after the date of
the enactment of this subsection, and
``(B) which is a smaller project,
subsection (a)(2) shall be applied by substituting `40 percent'
for `20 percent' with respect to qualified rehabilitation
expenditures not over $1,000,000, and `20 percent' with respect
to qualified rehabilitation expenditures of over $1,000,000.
``(2) Smaller project defined.--For purposes of this
section, the term `smaller project' means any qualified
rehabilitated building or portion thereof as to which--
``(A) the qualified rehabilitation expenditures
reported by the taxpayer for purposes of calculating
the credit under this section are not over $2,000,000,
except that for purposes of making this determination,
qualified rehabilitation expenditures attributable to
the provisions of subsection (c)(2)(E) shall be
disregarded, and
``(B) no credit was allowable under this section
during any of the two prior taxable years, provided
that this subparagraph shall not apply to any building
as to which the election provided for in subsection
(d)(5) shall have been made.
``(3) Coordination with subsection (d).--With respect to
any building as to which the election provided for in
subsection (d)(5) shall have been made, such building shall be
deemed a smaller project only if the qualified rehabilitation
expenditures reported by the taxpayer for purposes of
calculating the credit under this section with respect to the
taxable years to which such election shall apply are, in the
aggregate, not over $2,000,000.''.
(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.
SEC. 5. 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''.
(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.
SEC. 6. 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--
(1) by striking ``Building must be first placed in service
before 1936'' and inserting ``Date by which building must first
be placed in service'', and
(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)''.
(b) Effective Date.--The amendments made by section shall apply to
property placed in service after the date of the enactment of this Act.
SEC. 7. 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 striking the period at the end and inserting
``(1)(B)(ii)(IV), except that for purposes of this clause, `50 percent'
shall be substituted for `35 percent' in applying section
168(h)(1)(B)(iii))''.
(b) Effective Date.--The amendments made by section shall apply to
property placed in service after the date of the enactment of this Act.
SEC. 8. INCREASE IN REHABILITATION CREDIT FOR BUILDINGS IN HIGH COST
AREAS.
(a) In General.--Paragraph (2) of subsection 47(c) of the Internal
Revenue Code of 1986 (relating to the definition of qualified
rehabilitation expenditures) is amended by adding at the end the
following new subparagraph:
``(E) Increase in credit for buildings in high cost
areas.--
``(i) In general.--In the case of any
qualified rehabilitated building located in a
qualified census tract or difficult development
area which is designated for purposes of this
subparagraph, the qualified rehabilitation
expenditures for purposes of this section shall
be 130 percent of such expenditures determined
without regard to this subparagraph.
``(ii) Rules.--For purposes of clause (i),
rules similar to the rules of section
42(d)(5)(C) (excluding clause (i) thereof)
shall be applied.''.
(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.
SEC. 9. RECAPTURE OF REHABILITATION CREDIT FOR CERTIFIED HISTORIC
STRUCTURE NOT TRIGGERED BY CONDOMINIUM TRANSACTION.
(a) In General.--Subsection (a) of section 50 of the Internal
Revenue Code of 1986 (relating to recapture of credits upon disposition
of property) is amended by adding at the end thereof the following new
paragraph:
``(6) Special rule for certified historic structures.--In
the case of the rehabilitation credit determined under section
47(a)(2), paragraphs (1) and (2) shall not apply to a
transaction in which a portion of the building is transferred
as a condominium unit.''.
(b) Effective Date.--The amendment made by this section shall apply
to transfers after the date of enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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