Short title; findings; purpose

(a)

Short title

This Act may be cited as the

Home Lead Safety Tax Credit Act of 2005

. (b)

Findings

Congress finds that: (1)Of the 98,000,000 housing units in the United States, 38,000,000 have lead-based paint. (2)Of the 38,000,000 housing units with lead-based paint, 25,000,000 pose a hazard, as defined by Environmental Protection Agency and Department of Housing and Urban Development standards, due to conditions such as peeling paint and settled dust on floors and windowsills that contain lead at levels above Federal safety standards. (3)Though the number of children in the United States ages 1 through 5 with blood levels higher than the Centers for Disease Control action level of 10 micrograms per deciliter has declined to 300,000, lead poisoning remains a serious, entirely preventable threat to a child’s intelligence, behavior, and learning. (4)The Secretary of Health and Human Services has established a national goal of ending childhood lead poisoning by 2010. (5)Current Federal lead abatement programs, such as the Lead Hazard Control Grant Program of the Department of Housing and Urban Development, only have resources sufficient to make approximately 7,000 homes lead-safe each year. In many cases, when State and local public health departments identify a lead-poisoned child, resources are insufficient to reduce or eliminate the hazards. (6)Old windows typically pose significant risks because wood trim is more likely to be painted with lead-based paint, moisture causes paint to deteriorate, and friction generates lead dust. The replacement of old windows that contain lead based paint significantly reduces lead poisoning hazards in addition to producing significant energy savings. (7)Childhood lead poisoning can be dramatically reduced by the abatement or complete removal of all lead-based paint. Empirical studies also have shown substantial reductions in lead poisoning when the affected properties have undergone so-called interim control measures that are far less costly than abatement. (c)

Purpose

The purpose of this section is to encourage the safe removal of lead hazards from homes and thereby decrease the number of children who suffer reduced intelligence, learning difficulties, behavioral problems, and other health consequences due to lead-poisoning.

Home lead hazard reduction activity tax credit

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to foreign tax credit, etc.) is amended by adding at the end the following new section:

30D.

Home lead hazard reduction activity

(a)

Allowance of credit

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 50 percent of the lead hazard reduction activity cost paid or incurred by the taxpayer during the taxable year for each eligible dwelling unit. (b)

Limitation

The amount of the credit allowed under subsection (a) for any eligible dwelling unit for any taxable year shall not exceed— (1)either— (A)$3,000 in the case of lead hazard reduction activity cost including lead abatement measures described in clauses (i), (ii), (iv) and (v) of subsection (c)(1)(A), or (B)$1,000 in the case of lead hazard reduction activity cost including interim lead control measures described in clauses (i), (iii), (iv), and (v) of subsection (c)(1)(A), reduced by (2)the aggregate lead hazard reduction activity cost taken into account under subsection (a) with respect to such unit for all preceding taxable years. (c)

Definitions and special rules

For purposes of this section: (1)

Lead hazard reduction activity cost

(A)

In general

The term lead hazard reduction activity cost means, with respect to any eligible dwelling unit— (i)the cost for a certified risk assessor to conduct an assessment to determine the presence of a lead-based paint hazard, (ii)the cost for performing lead abatement measures by a certified lead abatement supervisor, including the removal of paint and dust, the permanent enclosure or encapsulation of lead-based paint, the replacement of painted surfaces, windows, or fixtures, or the removal or permanent covering of soil when lead-based paint hazards are present in such paint, dust, or soil, (iii)the cost for performing interim lead control measures to reduce exposure or likely exposure to lead-based paint hazards, including specialized cleaning, repairs, maintenance, painting, temporary containment, ongoing monitoring of lead-based paint hazards, and the establishment and operation of management and resident education programs, but only if such measures are evaluated and completed by a certified lead abatement supervisor using accepted methods, are conducted by a qualified contractor, and have an expected useful life of more than 10 years, (iv)the cost for a certified lead abatement supervisor, those working under the supervision of such supervisor, or a qualified contractor to perform all preparation, cleanup, disposal, and clearance testing activities associated with the lead abatement measures or interim lead control measures, and (v)costs incurred by or on behalf of any occupant of such dwelling unit for any relocation which is necessary to achieve occupant protection (as defined under section 35.1345 of title 24, Code of Federal Regulations). (B)

Limitation

The term lead hazard reduction activity cost does not include any cost to the extent such cost is funded by any grant, contract, or otherwise by another person (or any governmental agency). (2)

Eligible dwelling unit

(A)

In general

The term eligible dwelling unit means, with respect to any taxable year, any dwelling unit— (i)placed in service before 1960, (ii)located in the United States, (iii)in which resides, for a total period of not less than 50 percent of the taxable year, at least 1 child who has not attained the age of 6 years or 1 woman of child-bearing age, and (iv)each of the residents of which during such taxable year has an adjusted gross income of less than 185 percent of the poverty line (as determined for such taxable year in accordance with criteria established by the Director of the Office of Management and Budget). (B)

Dwelling unit

The term dwelling unit has the meaning given such term by section 280A(f)(1). (3)

Lead-based paint hazard

The term lead-based paint hazard has the meaning given such term by section 745.61 of title 40, Code of Federal Regulations. (4)

Certified lead abatement supervisor

The term certified lead abatement supervisor means an individual certified by the Environmental Protection Agency pursuant to section 745.226 of title 40, Code of Federal Regulations, or an appropriate State agency pursuant to section 745.325 of title 40, Code of Federal Regulations. (5)

Certified inspector

The term certified inspector means an inspector certified by the Environmental Protection Agency pursuant to section 745.226 of title 40, Code of Federal Regulations, or an appropriate State agency pursuant to section 745.325 of title 40, Code of Federal Regulations. (6)

Certified risk assessor

The term certified risk assessor means a risk assessor certified by the Environmental Protection Agency pursuant to section 745.226 of title 40, Code of Federal Regulations, or an appropriate State agency pursuant to section 745.325 of title 40, Code of Federal Regulations. (7)

Qualified contractor

The term qualified contractor means any contractor who has successfully completed a training course on lead safe work practices which has been approved by the Department of Housing and Urban Development and the Environmental Protection Agency. (8)

Documentation required for credit allowance

No credit shall be allowed under subsection (a) with respect to any eligible dwelling unit for any taxable year unless— (A)after lead hazard reduction activity is complete, a certified inspector or certified risk assessor provides written documentation to the taxpayer that includes— (i)evidence that— (I)the eligible dwelling unit passes the clearance examinations required by the Department of Housing and Urban Development under part 35 of title 40, Code of Federal Regulations, (II)the eligible dwelling unit does not contain lead dust hazards (as defined by section 745.227(e)(8)(viii) of such title 40), or (III)the eligible dwelling unit meets lead hazard evaluation criteria established under an authorized State or local program, and (ii)documentation showing that the lead hazard reduction activity meets the requirements of this section, and (B)the taxpayer files with the appropriate State agency and attaches to the tax return for the taxable year— (i)the documentation described in subparagraph (A), (ii)documentation of the lead hazard reduction activity costs paid or incurred during the taxable year with respect to the eligible dwelling unit, and (iii)a statement certifying that the dwelling unit qualifies as an eligible dwelling unit for such taxable year. (9)

Basis reduction

The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit (determined without regard to subsection (d)). (10)

No double benefit

Any deduction allowable for costs taken into account in computing the amount of the credit for lead-based paint abatement shall be reduced by the amount of such credit attributable to such costs. (d)

Limitation based on amount of tax

The credit allowed under subsection (a) for the taxable year shall not exceed the excess of— (1)the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over (2)the sum of the credits allowable under subpart A and sections 27, 29, 30, 30A, 30B, and 30C for the taxable year. (e)

Carryforward allowed

(1)

In general

If the credit amount allowable under subsection (a) for a taxable year exceeds the amount of the limitation under subsection (d) for such taxable year (referred to as the unused credit year in this subsection), such excess shall be allowed as a credit carryforward for each of the 20 taxable years following the unused credit year. (2)

Rules

Rules similar to the rules of section 39 shall apply with respect to the credit carryforward under paragraph (1).

(b)

Conforming amendments

(1)Section 1016(a) of the Internal Revenue Code of 1986 is amended by striking and in paragraph (36), by striking the period and inserting , and in paragraph (37), and by inserting at the end the following new paragraph:

(38)in the case of an eligible dwelling unit with respect to which a credit for any lead hazard reduction activity cost was allowed under section 30D, to the extent provided in section 30D(c)(9).

(2)The table of sections for subpart B of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 30C the following new item:

Sec. 30D. Home lead hazard reduction activity.

(c)

Effective date

The amendments made by this section shall apply to lead hazard reduction activity costs incurred after December 31, 2005, in taxable years ending after that date.