[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3670 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 3670

To amend the Internal Revenue Code of 1986 to expand the incentives for 
    the rehabilitation of older buildings, including owner-occupied 
                              residences.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 29, 2009

 Mr. Carnahan (for himself, Mr. Turner, Ms. Schwartz, Ms. Berkley, Mr. 
  Crowley, Mr. Hinchey, Mr. Langevin, Mr. Cohen, Mr. Van Hollen, Mr. 
   Skelton, Mr. Blumenauer, Mr. Capuano, Mr. Delahunt, Mr. Clay, Mr. 
Cleaver, Mr. Braley of Iowa, Mr. Loebsack, Mr. Ryan of Ohio, Mr. Holt, 
 Mr. Boucher, Mr. Kennedy, Mr. Gonzalez, Mr. Gordon of Tennessee, Mr. 
  Boswell, and Mr. Higgins) 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 expand the incentives for 
    the rehabilitation of older buildings, including owner-occupied 
                              residences.

    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 ``Historic Homeowners Revitalization 
Act of 2009''.

SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25D the 
following new section:

``SEC. 25E. HISTORIC HOMEOWNERSHIP REHABILITATION CREDIT.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 20 percent of the qualified 
rehabilitation expenditures made by the taxpayer with respect to a 
qualified historic home.
    ``(b) Dollar Limitation.--The credit allowed by subsection (a) with 
respect to any residence of a taxpayer shall not exceed $60,000 
($30,000 in the case of a married individual filing a separate return).
    ``(c) Qualified Rehabilitation Expenditure.--For purposes of this 
section--
            ``(1) In general.--The term `qualified rehabilitation 
        expenditure' means any amount properly chargeable to capital 
        account--
                    ``(A) in connection with the certified 
                rehabilitation of a qualified historic home, and
                    ``(B) for property for which depreciation would be 
                allowable under section 168 if the qualified historic 
                home were used in a trade or business.
            ``(2) Certain expenditures not included.--
                    ``(A) Exterior.--Such term shall not include any 
                expenditure in connection with the rehabilitation of a 
                building unless at least 5 percent of the total 
                expenditures made in the rehabilitation process are 
                allocable to the rehabilitation of the exterior of such 
                building.
                    ``(B) Other rules to apply.--Rules similar to the 
                rules of clauses (ii) and (iii) of section 47(c)(2)(B) 
                shall apply.
            ``(3) Mixed use or multifamily building.--If only a portion 
        of a building is used as the principal residence of the 
        taxpayer, only qualified rehabilitation expenditures which are 
        properly allocable to such portion shall be taken into account 
        under this section.
    ``(d) Certified Rehabilitation.--For purposes of this section, the 
term `certified rehabilitation' has the meaning given such term by 
section 47(c)(2)(C).
    ``(e) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified historic home.--The term `qualified 
        historic home' means a certified historic structure--
                    ``(A) which has been substantially rehabilitated, 
                and
                    ``(B) which (or any portion of which)--
                            ``(i) is owned by the taxpayer, and
                            ``(ii) is used (or will, within a 
                        reasonable period, be used) by such taxpayer as 
                        his principal residence.
            ``(2) Substantially rehabilitated.--The term `substantially 
        rehabilitated' has the meaning given such term by section 
        47(c)(1)(C).
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
            ``(4) Certified historic structure.--
                    ``(A) In general.--The term `certified historic 
                structure' means any building (and its structural 
                components) which--
                            ``(i) is listed in the National Register, 
                        or
                            ``(ii) is located in a registered historic 
                        district (as defined in section 47(c)(3)(B)) 
                        and is certified by the Secretary of the 
                        Interior as being of historic significance to 
                        the district.
            ``(5) Rehabilitation not complete before certification.--A 
        rehabilitation shall not be treated as complete before the date 
        of the certification referred to in subsection (d).
            ``(6) Tenant-stockholder in cooperative housing 
        corporation.--If the taxpayer holds stock as a tenant-
        stockholder (as defined in section 216) in a cooperative 
        housing corporation (as defined in such section), such 
        stockholder shall be treated as owning the house or apartment 
        which the taxpayer is entitled to occupy as such stockholder.
            ``(7) Allocation of expenditures relating to exterior of 
        building containing cooperative or condominium units.--The 
        percentage of the total expenditures made in the rehabilitation 
        of a building containing cooperative or condominium residential 
        units allocated to the rehabilitation of the exterior of the 
        building shall be attributed proportionately to each 
        cooperative or condominium residential unit in such building 
        for which a credit under this section is claimed.
            ``(8) Carryback and carryforward of credit unused by reason 
        of limitation based on tax liability.--
                    ``(A) In general.--If the credit allowable under 
                subsection (a) for any taxable year exceeds the 
                applicable tax limit for such taxable year, such excess 
                shall be a carryback to the preceding taxable year and 
                a carryforward to each of the 3 succeeding taxable 
                years and, subject to the limitations of subparagraph 
                (B), shall be added to the credit allowable by 
                subsection (a) for such preceding or succeeding taxable 
                year, as the case may be.
                    ``(B) Amount carried to each year.--Rules similar 
                to the rules of section 39(a)(2) shall apply for 
                purposes of this paragraph.
                    ``(C) Limitation.--The amount of the unused credit 
                which may be taken into account under subparagraph (A) 
                for any taxable year shall not exceed the amount (if 
                any) by which the applicable tax limit for such taxable 
                year exceeds the sum of--
                            ``(i) the credit allowable under subsection 
                        (a) for such taxable year determined without 
                        regard to this paragraph, and
                            ``(ii) the amounts which, by reason of this 
                        paragraph, are carried to such taxable year and 
                        are attributable to taxable years before the 
                        unused credit year.
                    ``(D) Applicable tax limit.--For purposes of this 
                paragraph, the term `applicable tax limit' means--
                            ``(i) in the case of a taxable year to 
                        which section 26(a)(2) applies, the limitation 
                        imposed by section 26(a)(2) for the taxable 
                        year reduced by the sum of the credits 
                        allowable under this subpart (other than this 
                        section), and
                            ``(ii) in the case of a taxable year to 
                        which section 26(a)(2) does not apply, the 
                        limitation imposed by section 26(a)(1) for the 
                        taxable year reduced by the sum of the credits 
                        allowable under this subpart (other than this 
                        section and sections 23, 24, 25A(i), 25B, 25D, 
                        30, 30B, 30D).
            ``(9) Credit may be assigned.--The amount of qualified 
        rehabilitation expenditures 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')--
                    ``(A) may be taken into account by any other person 
                to whom such expenditures are assigned by the initial 
                taxpayer, and
                    ``(B) shall not be taken to account by initial 
                taxpayer.
        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.
    ``(f) When Expenditures Taken Into Account.--In the case of a 
building other than a building to which subsection (g) applies, 
qualified rehabilitation expenditures shall be treated for purposes of 
this section as made--
            ``(1) on the date the rehabilitation is completed, or
            ``(2) to the extent provided by the Secretary by 
        regulation, when such expenditures are properly chargeable to 
        capital account.
Regulations under paragraph (2) shall include a rule similar to the 
rule under section 50(a)(2) (relating to recapture if property ceases 
to qualify for progress expenditures).
    ``(g) Allowance of Credit for Purchase of Rehabilitated Historic 
Home.--
            ``(1) In general.--In the case of a qualified purchased 
        historic home, the taxpayer shall be treated as having made (on 
        the date of purchase) the expenditures made by the seller of 
        such home. For purposes of the preceding sentence, expenditures 
        made by the seller shall be deemed to be qualified 
        rehabilitation expenditures if such expenditures, if made by 
        the purchaser, would be qualified rehabilitation expenditures.
            ``(2) Qualified purchased historic home.--For purposes of 
        this subsection, the term `qualified purchased historic home' 
        means any substantially rehabilitated certified historic 
        structure purchased by the taxpayer if--
                    ``(A) the taxpayer is the first purchaser of such 
                structure after the date rehabilitation is completed, 
                and the purchase occurs within 5 years after such date,
                    ``(B) the structure (or a portion thereof) will, 
                within a reasonable period, be the principal residence 
                of the taxpayer,
                    ``(C) no credit was allowed to the seller under 
                this section or section 47 with respect to such 
                rehabilitation, and
                    ``(D) the taxpayer is furnished with such 
                information as the Secretary determines is necessary to 
                determine the credit under this subsection.
    ``(h) Recapture.--
            ``(1) In general.--If, before the end of the 5-year period 
        beginning on the date on which the rehabilitation of the 
        building is completed (or, if subsection (g) applies, the date 
        of purchase of such building by the taxpayer)--
                    ``(A) the taxpayer disposes of such taxpayer's 
                interest in such building, or
                    ``(B) such building ceases to be used as the 
                principal residence of the taxpayer or ceases to be a 
                certified historic structure, the taxpayer's tax 
                imposed by this chapter for the taxable year in which 
                such disposition or cessation occurs shall be increased 
                by the recapture percentage of the credit allowed under 
                this section for all prior taxable years with respect 
                to such rehabilitation.
            ``(2) Recapture percentage.--For purposes of paragraph (1), 
        the recapture percentage shall be determined in accordance with 
        the table under section 50(a)(1)(B), deeming such table to be 
        amended--
                    ``(A) by striking `If the property ceases to be 
                investment credit property within--' and inserting `If 
                the disposition or cessation occurs within--', and
                    ``(B) in clause (i) by striking `One full year 
                after placed in service' and inserting `One full year 
                after the taxpayer becomes entitled to the credit'.
            ``(3) Transfer between spouses or incident to divorce.--In 
        the case of any transfer described in subsection (a) of section 
        1041 (relating to transfers between spouses or incident to 
        divorce)--
                    ``(A) the foregoing provisions of this subsection 
                shall not apply, and
                    ``(B) the same tax treatment under this subsection 
                with respect to the transferred property shall apply to 
                the transferee as would have applied to the transferor.
    ``(i) Basis Adjustments.--For purposes of this subtitle, if a 
credit is allowed under this section for any expenditure with respect 
to any property (including any purchase under subsection (g)), the 
increase in the basis of such property which would (but for this 
subsection) result from such expenditure shall be reduced by the amount 
of the credit so allowed.
    ``(j) Processing Fees.--Any State may impose a fee for the 
processing of applications for the certification of any rehabilitation 
under this section provided that the amount of such fee is used only to 
defray expenses associated with the processing of such applications.
    ``(k) Denial of Double Benefit.--No credit shall be allowed under 
this section for any amount for which credit is allowed under section 
47.
    ``(l) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including regulations where less than all of a building is used as a 
principal residence and where more than 1 taxpayer use the same 
dwelling unit as their principal residence.''
    (b) Conforming Amendments.--
            (1)(A) Paragraph (1) of section 23(c) of such Code is 
        amended by inserting ``, 25E,'' after ``25D''.
            (B) Subparagraph (C) of section 25(e)(1) of such Code is 
        amended by inserting ``25E,'' after ``sections 25D,''.
            (C) Subparagraph (A) of section 25D(2) of such Code is 
        amended by inserting ``and section 25E'' after ``(other than 
        this section''.
            (D) Paragraph (1) of section 1400C(d) of such Code is 
        amended by striking ``section 25D'' and inserting ``sections 
        25D and 25E''.
            (2)(A) Clause (ii) of section 25(e)(1)(C) of such Code is 
        amended by inserting ``25E,'' after ``25D,''.
            (B) Paragraph (2) of section 1400C of such Code is amended 
        by inserting ``25E,'' after ``25D,''.
            (3) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (36), by striking 
        the period at the end of paragraph (37) and inserting ``, 
        and'', and by adding at the end the following new item:
            ``(38) to the extent provided in section 25E(i).''
    (c) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 25D the following new 
item:

``Sec. 25E. Historic homeownership rehabilitation credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to rehabilitations the physical work on which begins 
after the date of enactment of this Act.

SEC. 3. EXPANSION OF INCENTIVES FOR BUILDING REHABILITATION.

    (a) Increase in Rehabilitation Credit for Buildings in High Cost 
Areas.--Paragraph (2) of subsection 47(c) of such Code (defining 
qualified rehabilitation expenditures) is amended by adding at the end 
the following new subparagraph:
                    ``(E) Increase in credit for buildings in high cost 
                areas.--In the case of any qualified rehabilitated 
                building which is residential rental property (as 
                defined in paragraph (2)(D)) located in a qualified 
                census tract or difficult development area which is 
                designated for purposes of section 42(d)(5)(C), the 
                qualified rehabilitation expenditures taken into 
                account under this section shall be 130 percent of such 
                expenditures determined without regard to this 
                subparagraph.''.
    (b) Rehabilitation Credit May Be Transferred.--
            (1) In general.--Subsection (b) of section 47 of such Code 
        (relating to when expenditures taken into account) is amended 
        by adding at the end the following new paragraph:
            ``(3) Credit may be assigned.--The amount of qualified 
        rehabilitation expenditures with respect to property described 
        in subsection (c)(1)(A)(iv)(II) 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')--
                    ``(A) may be taken into account by any other person 
                to whom such expenditures are assigned by the initial 
                taxpayer, and
                    ``(B) shall not be taken to account by initial 
                taxpayer.
        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.''.
            (2) Conforming amendment.--The heading for such subsection 
        (b) is amended by inserting ``; Eligibility for Credit May Be 
        Assigned'' after ``Account''.
    (c) Applicability to Buildings Held for Sale.--
            (1) In general.--
                    (A) Clause (iv) of section 47(c)(1)(A) of such Code 
                is amended to read as follows:
                            ``(iv) depreciation (or amortization in 
                        lieu of depreciation)--
                                    ``(I) is allowable with respect to 
                                such building, or
                                    ``(II) in the case of a residential 
                                property, would be allowable with 
                                respect to such building but for the 
                                building being held for sale.''.
                    (B) Paragraph (2) of section 47(c) of such Code is 
                amended by adding at the end the following new 
                subparagraph:
                    ``(E) Special rule for certain property held for 
                sale.--For purposes of this paragraph, in the case of a 
                qualified rehabilitated building described in paragraph 
                (1)(A)(iv)(II), such building shall be treated as owned 
                by the taxpayer as rental property with respect to 
                which the straight line depreciation method is used 
                over a recovery period determined under subsection (c) 
                or (g) of section 168.''.
            (2) Conforming amendment.--Paragraph (4) of section 50(a) 
        of such Code is amended by striking ``or'' at the end of 
        subparagraph (A), but striking the period at the end of 
        subparagraph (B) and inserting ``, or'', and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) property described in section 
                47(c)(1)(A)(iv)(II) that has not otherwise ceased to be 
                investment property.''.
    (d) Effective Date.--The amendments made by this section shall 
apply with respect to rehabilitations the physical work on which begins 
after the date of enactment of this Act.
                                 <all>