1.This Act may be cited as the
Creating American Prosperity through
Preservation Act of 2012
.
2.Increase in the
rehabilitation credit for certain smaller projects
(a)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 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 30 percent
for 20
percent
.(2)The credit determined under this subsection with respect
to any smaller project for all taxable years shall not exceed
$1,500,000.
(3)
(A)For purposes of this subsection, the term smaller
project means any qualified rehabilitated building or portion thereof
if—
(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, and
(ii)no credit was allowed under this section
for either of the 2 prior taxable years with respect to such building.
(B)Credit allowable by reason of subsection (d) shall
not be taken into account under subparagraph
(A)(ii).
.
(b)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).
3.Addition of
energy efficiency supplement to rehabilitation credit
(a)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:
(3)2 percent of the qualified rehabilitation
expenditures if the building is a qualified energy efficient rehabilitated
building.
.
(b)Qualified energy
efficient rehabilitated buildingSection 47 of such Code, as amended by
section 2, is amended by adding at the end the following new subsection:
(f)Qualified energy
efficient rehabilitated building
(1)The term qualified energy efficient rehabilitated
building means any building (and its structural components) if—
(A)the building is a qualified rehabilitated
building, and
(B)(i)the rehabilitation is
certified (in accordance with paragraph (4)) as being designed to achieve at
least a 30 percent energy use reduction in the building’s energy use, or
(ii)the building meets the
requirements of paragraph (2)(B)(ii) and is determined under paragraph (2)(B)
to achieve at least a 30 percent energy use reduction after being
rehabilitated.
(2)Determination of
energy use reductionFor purposes of paragraph (1)—
(A)
(i)Buildings within
the scope of standard 90.1–2007If the building is within the
scope of Standard 90.1–2007, the designed reduction in energy use shall be
determined using methods of calculation under paragraph (3) in comparison to a
reference building which meets the minimum requirements of such
standard.
(ii)If the building is within the scope of RESNET, the
designed reduction in energy use shall be determined using methods prescribed
by the Secretary which are based on the Residential Energy Services Network
Technical Guidelines.
(iii)If neither clause (i) or (ii) apply to the building,
the designed reduction in energy use shall be determined using methods of
calculation prescribed by the Secretary in a manner which is consistent with
principles under paragraph (3).
(B)
(i)In the case of buildings which meet the requirements of
clause (ii), the taxpayer may determine the reduction in energy usage by
comparing the energy usage during the period selected by the taxpayer under
clause (ii)(I) with the energy usage during the period selected by the taxpayer
under clause (ii)(II).
(ii)A building meets the requirements of this clause
if—
(I)the building is at
least 75 percent occupied during any period (but not less than 12 months)
selected by the taxpayer which ends during the 5-year period ending on the date
that the rehabilitation begins, and
(II)the building is
at least 75 percent occupied during the comparable period selected by the tax-
payer which begins during the 5-year period beginning on the date that the
rehabilitation is completed.
(iii)The reduction in energy use for buildings within the
scope of Energy Start Portfolio Manager may be determined for purposes of this
subparagraph by using the Energy Star Portfolio Manager Buildings Benchmark
Tool.
(iv)The Secretary shall prescribe regulations which preclude
the use of this subparagraph, or modify the methods otherwise applicable under
this subparagraph, in circumstance where vacancies, changes in use, and other
factors which might otherwise yield in materially misleading results.
(v)In the case of a building which is a qualified energy
efficient rehabilitated building solely by reason of this subparagraph, the
increase in the credit under subsection (a)(3) with respect to such building
shall be taken into account for the taxable year which includes the end of the
period selected by the taxpayer under clause (ii)(II) in lieu of the taxable
year in which the rehabilitated building is placed in service.
(3)
(A)The Secretary, after consultation with the Secretary of
Energy, shall promulgate regulations which describe in detail methods for
calculating and verifying energy and power consumption and cost, based on
Appendix G of Standard 90.1–2007 (or any subsequent version of such Appendix
which is in effect at the time of the certification).
(B)
(i)Any calculation under subparagraph (A) shall be prepared
by qualified computer software.
(ii)Qualified
computer softwareFor purposes of subparagraph (A), the term
qualified computer software means software—
(I)which is included (at the time of the
certification) on the published list of qualified software by the Department of
Energy, and
(II)which provides
such information as the Secretary may require, including information that
allows the user to document the energy efficiency features of the building and
its projected annual energy costs, and
(III)which provides
standardized outputs for building energy performance and, to the maximum extent
practicable, relies on industry best practices and existing guidelines.
(4)
(A)The Secretary shall prescribe the manner and method for
the making of certifications under this subsection.
(B)The
Secretary shall include as part of the certification process procedures for
inspection and testing by qualified individuals described in subparagraph (C)
to ensure compliance of buildings with energy-savings plans and targets. Such
procedures shall be comparable, given the difference between commercial and
residential buildings, to the requirements in the Mortgage Industry National
Accreditation Procedures for Home Energy Rating Systems.
(C)Individuals qualified to determine compliance shall
be only those individuals who are recognized by an organization certified by
the Secretary for such purposes. For purposes of the preceding sentence, an
individual shall not be qualified with respect to a building unless the
individual is—
(i)a
registered professional engineer,
(ii)not a direct
employee of the owner of the commercial building or multifamily building,
and
(iii)licensed in the
State in which such building is located.
(5)For purposes of this subsection, the term
Standard 90.1–2007 means Standard 90.1–2007 of the American
Society of Heating, Refrigerating, and Air Conditioning Engineers and the
Illuminating Engineering Society of North America (or any subsequent version of
such Standard which is in effect at the time of the certification).
(6)Allocation of
credit for tax-exempt propertyParagraphs (3) and (4) of section 50(b),
and clause (v) of subsection (c)(2)(B), shall not apply to those qualified
rehabilitation expenditures that are taken into account for purposes of
certifying a building as a qualified energy efficient rehabilitated building
under this subsection. Any rehabilitation credit which is allowable by reason
of the preceding sentence may be assigned to any other person, and such other
person shall be treated as the taxpayer with respect thereto.
(7)The
Secretary shall designate processes for tracking the numbers and locations of
buildings claiming the rehabilitation by reason of this subsection, as well as
providing information on projected and actual savings of energy and its value
over time in coordination with the Department of Energy.
(8)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
this subsection, including regulations—
(A)to take into
account new technologies regarding energy efficiency and renewable energy for
purposes of determining energy efficiency and savings under this subsection,
and
(B)to provide for a
recapture of the credit determined under this subsection if the design referred
to in paragraph (1)(B) is not fully
implemented.
.
(c)Substantial
rehabilitation requirement not To apply to energy efficiency
supplementSubparagraph (A) of section 47(c)(1) of such Code
(defining qualified rehabilitated building) is amended by adding at the end the
following new flush sentence:
Clause
(i) shall not apply to so much of the rehabilitation credit as is determined
under subsection
(a)(3)..
(d)
(1)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.
(2)Waiver of
substantial rehabilitation requirementThe waiver of the
requirement of section 47(c)(1)(A)(i) of the Internal Revenue Code of 1986 made
by section 47(f)(1)(A) of such Code, as added by this Act, shall apply with
respect to rehabilitations the physical work on which begins after the date of
the enactment of this Act.
4.Modification to
definition of qualified rehabilitation expenditure
(a)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:
(IV)rehabilitated
building energy efficiency property, or
(V)an addition or
improvement to property described in subclause (I), (II), (III), or (IV),
and
.
(b)Rehabilitated
building energy efficiency propertySection 47(c)(2) of such Code
is amended by adding at the end the following new subparagraph:
(E)Rehabilitated
building energy efficiency property
(i)For purposes of subparagraph (A), the term
rehabilitated building energy efficiency property means property
which is certified as being—
(I)affixed to,
adjacent to, or integral to the provision of renewable energy to a qualified
rehabilitated building, or
(II)installed as part
of a plan designed to achieve any energy use reduction (within the meaning of
subsection (f)).
Subparagraph
(B)(i) shall not apply to rehabilitated building energy efficiency
property.(ii)The
Secretary shall prescribe the manner and method for the making of
certifications under clause
(i).
.
(c)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.
.
(d)The amendments made by this section shall apply to qualified
rehabilitated buildings placed in service after the date of the enactment of
this Act.
5.Coordination of
energy credit with rehabilitation credit
(a)Paragraph (2) of section 48(a) of the Internal Revenue
Code of 1986 is amended by striking subparagraph (B).
(b)Paragraph (2) of section 48(a) of such Code is
amended—
(1)by redesignating
subparagraph (A)(ii) as subparagraph (B) and moving such subparagraph 2 ems to
the left,
(2)by redesignating
subclauses (I) through (IV) of subparagraph (A)(i) as clauses (i) through (iv),
respectively, and by moving such clauses 2 ems to the left, and
(3)by striking so
much of such paragraph as precedes 30 percent in the case of—
and inserting the following:
(2)The energy percentage is—
(A)30 percent in the
case
of—
.
(c)Paragraph (3) of section 50(c) of such Code is amended
by adding at the end the following new flush sentence: 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.
.
(d)The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.
6.Date by which
building must be first placed in service
(a)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
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)The amendment made by this section shall apply to property
placed in service after the date of the enactment of this Act.
7.Modifications
regarding certain tax-exempt use property
(a)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
.
(b)The amendments made by this section shall apply to property
placed in service after the date of the enactment of this Act.
8.Special rules for
dispositions of State historic tax credits
(a)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 139D the following new section:
139E.Dispositions
of State historic tax credits
(a)Exclusion from
income; basis reduction
(1)In the case of a
taxpayer who receives a State historic tax credit and transfers such credit by
sale, allocation, or otherwise, or receives a refund of all or a portion of
such credit—
(A)no portion of the net proceeds of such
allocation, disposition, or refund of such credit shall constitute income to
such taxpayer under section 61(a), and
(B)the taxpayer's
basis in the property with respect to which the State historic tax credit is
allowed shall be reduced as determined under paragraph (2).
(2)Determination of
reduction in basisThe reduction in basis under paragraph (1)
shall be applied—
(A)first, against the
basis in the land,
(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),
and
(C)third, against the
remaining basis in the property.
(D)Adjustment in
basis of interest in partnership or s corporationThe adjusted
basis of—
(i)a
partner’s interest in a partnership, or
(ii)stock in an S
corporation (as defined in section 1361(a)(1)),
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).(b)Election To
include in income
(1)In the case of a
taxpayer elects to have this subsection apply—
(A)the net proceeds of the allocation,
disposition, or refund described in subsection (a) received by such taxpayer
shall constitute income to such taxpayer under section 61(a), and
(B)subsection
(a)(1)(B) shall not apply.
(2)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.
(c)Effect on
qualified rehabilitation expenditures and rehabilitation
creditsFor purposes of determining the rehabilitation credit
allowable to a taxpayer under section 47, the transfer or allocation 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.
(d)State historic
tax credits definedFor purposes of this section, the term
State historic tax credit means any credit against State or local
tax liabilities which—
(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, and
(2)can be allocated, disposed, or refunded
under such
laws.
.
(b)The table of
sections for such part III is amended by inserting after the item relating to
section 139D the following new item:
Sec. 139E. Dispositions of State
historic tax credits.
.
(c)This section shall apply to transfers or dispositions made,
or refunds received, after the date of the enactment of this Act.