Disaster resilient property tax credit

(a)

In general

Subpart B of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 30D the following new section:

30E.

Disaster resilient property

(a)

General rule

There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the applicable amount for each qualified building placed in service during the taxable year.(b)

Applicable amount

For purposes of subsection (a)—(1)

Commercial property

ln the case of a qualified commercial property, the applicable amount is the lesser of—(A)1 percent of the cost of the building, or (B)$25,000 per building.(2)

Residential property

ln the case of a qualified residential property, the applicable amount is the lesser of—(A)1 percent of the cost of the property, or (B)$3,000 per property.(c)

Qualified Building

For purposes of subsection (a)—(1)

In general

The term qualified building means a building—(A)owned by the taxpayer in a disaster area determined as a result of a federally declared major disaster, (B)the construction of which began after the date of such disaster in that area,(C)which—(i)is qualified commercial property placed in service for commercial purposes, or (ii)is qualified residential property placed in service for residential purposes, and (D)for which a certificate of occupancy is issued before the end of the 3-year period beginning on the date of such disaster declaration in that area.(2)

Qualified commercial property

The term qualified commercial property means a building that is—(A)located in the United States,(B)defined in the scope of the most recent International Building Code published by the International Code Council, and(C)designed and constructed to meet resilient construction requirements.(3)

Qualified residential property

The term qualified residential property means a building that is—(A)located in the United States,(B)defined in the scope of the most recent International Residential Code published by the International Code Council, and(C)designed and constructed to meet resilient construction requirements.(d)

Resilient Construction Requirements

For purposes of this section—(1)

In general

The resilient construction requirements with respect to a property are that the property is designed and constructed to—(A)resist hazards brought on by a major disaster and continues to provide its primary functions after a major disaster, (B)reduce the magnitude or duration of a disruptive event, and(C)have the absorptive capacity, adaptive capacity, and recoverability to withstand a potentially disruptive event. (2)

Treated as meeting resiliency requirements

For purposes of paragraph (1)—(A)in the case of a qualified commercial property, the property shall be treated as meeting the requirements specified in paragraph (1) if the property is a building which—(i)was designed to meet the requirements of the most recent International Building Code published by the International Code Council and meets the FORTIFIED Commercial Wind Standard published by the Insurance Institute for Business and Home Safety, or the most recent International Wildland Urban Interface Code published by the International Code Council, (ii)in the case of a substantial renovation, such renovation meets the requirements of—(I)the most recent International Building Code published by the International Code Council and the FORTIFIED Commercial Wind Standard published by the Insurance Institute for Business and Home Safety, or(II)the most recent International Wildland Urban Interface Code published by the International Code Council, or (iii)in the case of a qualified commercial property in a high seismic hazard zone, was designed and built to achieve a reduction in the earthquake risks relative to code-designed buildings by minimizing building damage and promoting contingency planning for utility disruption and other threats to functional recovery that are described in the U.S. Resiliency Council Rating System with specific design criteria achieving the Platinum or Gold rating, and (B)in the case of a qualified residential property, the property shall be treated as meeting the requirements specified in paragraph (1) if—(i)the property is a building which—(I)was designed to meet the requirements of the most recent International Residential Code published by the International Code Council, and received a FORTIFIED Roof, FORTIFIED Silver, or FORTIFIED Gold designation from the Insurance Institute for Business and Home Safety, or(II)was designed to meet or exceed the requirements of the most recent Standard for Residential Construction in High-Wind Regions or International Wildland Urban Interface Code published by the International Code Council, or(ii)in the case of a substantial renovation, such renovation meets—(I)the requirements of the most recent International Residential Code published by the International Code Council and the requirements of the FORTIFIED Roof Standards published by the Insurance Institute for Business and Home Safety, or(II)the requirements of the most recent Standard for Residential Construction in High-Wind Regions or International Wildland Urban Interface Code published by the International Code Council.(3)

Absorptive capacity

The term absorptive capacity means the ability of the construction to endure a disruption without significant deviation from normal operating performance. (4)

Adaptive capacity

The term adaptive capacity means the ability of the construction to adapt to a drastic change in normal operating conditions. (5)

Recoverability

The term recoverability means the ability of the construction to recover quickly, and at low cost, from potentially disruptive events.(e)

Other Definitions

For purposes of this section: (1)

Construction

The term construction includes new construction and reconstruction and rehabilitation that meets resilient construction requirements.(2)

Federally declared major disaster

The term federally declared major disaster means a disaster subsequently determined by the President to be a major disaster that warrants assistance by the Federal Government under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. (3)

Disaster area

The term disaster area means the area so determined to warrant such assistance.(4)

Most recent editions

The term most recent means, with respect to relevant national consensus-based codes, and specifications and standards referenced therein, either of the two most recent published editions, including, if any, amendments made by State, local, tribal, or territorial governments during the adoption process, that incorporate the latest natural hazard-resistant designs and establish criteria for the design, construction, and maintenance of structures and facilities that may be eligible for assistance under this section for the purposes of protecting the health, safety, and general welfare of a building’s users against disasters.(f)

Application With Other Credits

(1)

Business credit treated as part of general business credit

So much of the credit which would be allowed under subsection (a) for any taxable year (determined without regard to this subsection) that is attributable to property of a character subject to an allowance for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and not allowed under subsection (a)). (2)

Personal credit

For purposes of this title, the credit allowed under subsection (a) for any taxable year (determined after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year. (g)

Basis Reduction

For purposes of this subtitle, the basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit so allowed.(h)

Termination

This section shall not apply to any property for which a certificate for occupancy is issued after December 31, 2023.

(b)

Credit Made Part of General Business Credit

Section 38(b) of such Code is amended by striking plus at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting , plus, and by adding at the end the following new paragraph:

(34)the portion of the disaster resilient property credit described in section 30E(f)(1).

(c)

Basis adjustment

Section 1016(a) of such Code is amended by striking and at the end of paragraph (37), by striking the period at the end of paragraph (38) and inserting , and, and by adding at the end the following new paragraph:

(39)to the extent provided in section 30E(g), in the case of amounts with respect to which a credit has been allowed under section 30E.

(d)

Clerical Amendment

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 30D the following new item:

Sec. 30E. Disaster resilient property.

(e)

Effective Date

The amendments made by this section shall apply to property for which a certificate of occupancy is issued after the date of the enactment of this Act.