,i #aacth ,,congress #b;d ,session ,h4 ,r4 #efee ,,in ,,the ,,house ,,of ,,representatives ,september #ah1 #bjad ,mr4 ,schock 7for himself1 ,mr4 ,blumenauer1 ,mr4 ,kelly of ,pennsylvania1 and ,mr4 ,kind7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to expand the rehabilitation credit1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,creating ,american ,prosperity through ,preservation ,act4 #b4 ,increase in the rehabilitation credit for certain smaller projects 7a7 ,in general ,section #dg of the ,internal ,revenue ,code of #aihf 7relating to rehabilitation credit7 is amended by adding at the end the following new subsection3 7e7 ,special rule regarding certain smaller projects 7#a7 ,in general ,in the case of any qualified rehabilitated building or portion thereof-- 7,a7 which is placed in service after the date of the enactment of this subsection1 and 7,b7 which is a smaller project1 subsection 7a77#b7 shall be applied by substituting #cj percent for #bj percent4 7#b7 ,maximum credit ,the credit determined under this subsection with respect to any smaller project for all taxable years shall not exceed #a1ejj1jjj4 7#c7 ,smaller project defined 7,a7 ,in general ,for purposes of this subsection1 the term smaller project means any qualified rehabilitated building or portion thereof if-- 7i7 the qualified rehabilitation expenditures taken into account for purposes of this section 7or would have been so taken into account if this subsection had been in effect for all prior periods7 with respect to the rehabilitation are not over #g1ejj1jjj1 and 7ii7 no credit was allowed under this section for either of the #b prior taxable years with respect to such building4 7,b7 ,progress expenditures ,credit allowable by reason of subsection 7d7 shall not be taken into account under subparagraph 7,a77ii74 4 7b7 ,effective ,date ,the amendment made by this section shall apply to periods after the date of the enactment of this ,act1 under rules similar to the rules of section #dh7m7 of the ,internal ,revenue ,code of #aihf 7as in effect on the day before the date of the enactment of the ,revenue ,reconciliation ,act of #aiij74 #c4 ,addition of energy efficiency supplement to rehabilitation credit 7a7 ,in general ,subsection 7a7 of section #dg of the ,internal ,revenue ,code of #aihf is amended by striking and at the end of paragraph 7#a71 by striking the period at the end of paragraph 7#b7 and inserting 1 and1 and by adding at the end the following new paragraph3 7#c7 #b percent of the qualified rehabilitation expenditures if the building is a qualified energy efficient rehabilitated building4 4 7b7 ,qualified energy efficient rehabilitated building ,section #dg of such ,code1 as amended by section #b1 is amended by adding at the end the following new subsection3 7f7 ,qualified energy efficient rehabilitated building 7#a7 ,in general ,the term qualified energy efficient rehabilitated building means any building 7and its structural components7 if-- 7,a7 the building is a qualified rehabilitated building1 and 7,b7 7i7 the rehabilitation is certified 7in accordance with paragraph 7#d77 as being designed to achieve at least a #cj percent energy use reduction in the building's energy use1 or 7ii7 the building meets the requirements of paragraph 7#b77;,b77ii7 and is determined under paragraph 7#b77;,b7 to achieve at least a #cj percent energy use reduction after being rehabilitated4 7#b7 ,determination of energy use reduction ,for purposes of paragraph 7#a7-- 7,a7 ,design-based standards 7i7 ,buildings within the scope of standard #ij4a-bjjg ,if the building is within the scope of ,standard #ij4a-bjjg1 the designed reduction in energy use shall be determined using methods of calculation under paragraph 7#c7 in comparison to a reference building which meets the minimum requirements of such standard4 7ii7 ,,resnet buildings ,if the building is within the scope of ,,resnet1 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 ,guidelines4 7iii7 ,other buildings ,if neither clause 7i7 or 7ii7 apply to the building1 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 7#c74 7,b7 ,measured reductions 7i7 ,in general ,in the case of buildings which meet the requirements of clause 7ii71 the taxpayer may determine the reduction in energy usage by comparing the energy usage during the period selected by the taxpayer under clause 7ii77,i7 with the energy usage during the period selected by the taxpayer under clause 7ii77,,ii74 7ii7 ,building requirements ,a building meets the requirements of this clause if-- 7,i7 the building is at least #ge percent occupied during any period 7but not less than #ab months7 selected by the taxpayer which ends during the #e-year period ending on the date that the rehabilitation begins1 and 7,,ii7 the building is at least #ge percent occupied during the comparable period selected by the tax- payer which begins during the #e-year period beginning on the date that the rehabilitation is completed4 7iii7 ,energy star buildings ,the reduction in energy use for buildings within the scope of ,energy ,star ,portfolio ,manager may be determined for purposes of this subparagraph by using the ,energy ,star ,portfolio ,manager ,buildings ,benchmark ,tool4 7iv7 ,special rules ,the ,secretary shall prescribe regulations which preclude the use of this subparagraph1 or modify the methods otherwise applicable under this subparagraph1 in circumstance where vacancies1 changes in use1 and other factors which might otherwise yield in materially misleading results4 7v7 ,year credit allowable ,in the case of a building which is a qualified energy efficient rehabilitated building solely by reason of this subparagraph1 the increase in the credit under subsection 7a77#c7 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 7ii77,,ii7 in lieu of the taxable year in which the rehabilitated building is placed in service4 7#c7 ,methods of calculations 7,a7 ,in general ,the ,secretary1 after consultation with the ,secretary of ,energy1 shall promulgate regulations which describe in detail methods for calculating and verifying energy and power consumption and cost1 based on ,appendix ,g of ,standard #ij4a-bjjg 7or any subsequent version of such ,appendix which is in effect at the time of the certification74 7,b7 ,computer software 7i7 ,in general ,any calculation under subparagraph 7,a7 shall be prepared by qualified computer software4 7ii7 ,qualified computer software ,for purposes of subparagraph 7,a71 the term qualified computer software means software-- 7,i7 which is included 7at the time of the certification7 on the published list of qualified software by the ,department of ,energy1 7,,ii7 which provides such information as the ,secretary may require1 including information that allows the user to document the energy efficiency features of the building and its projected annual energy costs1 and 7,,iii7 which provides standardized outputs for building energy performance and1 to the maximum extent practicable1 relies on industry best practices and existing guidelines4 7#d7 ,certifications 7,a7 ,in general ,the ,secretary shall prescribe the manner and method for the making of certifications under this subsection4 7,b7 ,procedures ,the ,secretary shall include as part of the certification process procedures for inspection and testing by qualified individuals described in subparagraph 7,c7 to ensure compliance of buildings with energy-savings plans and targets4 ,such procedures shall be comparable1 given the difference between commercial and residential buildings1 to the requirements in the ,mortgage ,industry ,national ,accreditation ,procedures for ,home ,energy ,rating ,systems4 7,c7 ,qualified individuals ,individuals qualified to determine compliance shall be only those individuals who are recognized by an organization certified by the ,secretary for such purposes4 ,for purposes of the preceding sentence1 an individual shall not be qualified with respect to a building unless the individual is-- 7i7 a registered professional engineer1 7ii7 not a direct employee of the owner of the commercial building or multifamily building1 and 7iii7 licensed in the ,state in which such building is located4 7#e7 ,standard #ij4a-bjjg ,for purposes of this subsection1 the term ,standard #ij4a-bjjg means ,standard #ij4a-bjjg of the ,american ,society of ,heating1 ,refrigerating1 and ,air ,conditioning ,engineers and the ,illuminating ,engineering ,society of ,north ,america 7or any subsequent version of such ,standard which is in effect at the time of the certification74 7#f7 ,allocation of credit for tax-exempt property ,paragraphs 7#c7 and 7#d7 of section #ej7;b71 and clause 7v7 of subsection 7c77#b77;,b71 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 subsection4 ,any rehabilitation credit which is allowable by reason of the preceding sentence may be assigned to any other person1 and such other person shall be treated as the taxpayer with respect thereto4 7#g7 ,coordination ,the ,secretary shall designate processes for tracking the numbers and locations of buildings claiming the rehabilitation by reason of this subsection1 as well as providing information on projected and actual savings of energy and its value over time in coordination with the ,department of ,energy4 7#h7 ,regulations ,the ,secretary1 after consultation with the ,administrator of the ,environmental ,protection ,agency and the ,secretary of the ,interior1 shall promulgate such regulations as may be necessary or appropriate to carry out the purposes of this subsection1 including regulations-- 7,a7 to take into account new technologies regarding energy efficiency and renewable energy for purposes of determining energy efficiency and savings under this subsection1 and 7,b7 to provide for a recapture of the credit determined under this subsection if the design referred to in paragraph 7#a77;,b7 is not fully implemented4 4 7c7 ,substantial rehabilitation requirement not ,to apply to energy efficiency supplement ,subparagraph 7,a7 of section #dg7;c77#a7 of such ,code 7defining qualified rehabilitated building7 is amended by adding at the end the following new flush sentence3 ,clause 7i7 shall not apply to so much of the rehabilitation credit as is determined under subsection 7a77#c74 4 7d7 ,effective dates 7#a7 ,in general ,except as provided in paragraph 7#b71 the amendments made by this section shall apply to property placed in service after the date of the enactment of this ,act4 7#b7 ,waiver of substantial rehabilitation requirement ,the waiver of the requirement of section #dg7;c77#a77;,a77i7 of the ,internal ,revenue ,code of #aihf made by section #dg7;f77#a77;,a7 of such ,code1 as added by this ,act1 shall apply with respect to rehabilitations the physical work on which begins after the date of the enactment of this ,act4 #d4 ,modification to definition of qualified rehabilitation expenditure 7a7 ,in general ,clause 7i7 of section #dg7;c77#b77;,a7 of the ,internal ,revenue ,code of #aihf 7relating to the definition of qualified rehabilitation expenditures7 is amended by striking or at the end of subclause 7,,iii71 by striking subclause 7,,iv71 and by inserting after subclause 7,,iii7 the following new subclauses3 7,,iv7 rehabilitated building energy efficiency property1 or 7,v7 an addition or improvement to property described in subclause 7,i71 7,,ii71 7,,iii71 or 7,,iv71 and 4 7b7 ,rehabilitated building energy efficiency property ,section #dg7;c77#b7 of such ,code is amended by adding at the end the following new subparagraph3 7,e7 ,rehabilitated building energy efficiency property 7i7 ,in general ,for purposes of subparagraph 7,a71 the term rehabilitated building energy efficiency property means property which is certified as being-- 7,i7 affixed to1 adjacent to1 or integral to the provision of renewable energy to a qualified rehabilitated building1 or 7,,ii7 installed as part of a plan designed to achieve any energy use reduction 7within the meaning of subsection 7f774 ,subparagraph 7,b77i7 shall not apply to rehabilitated building energy efficiency property4 7ii7 ,certification ,the ,secretary shall prescribe the manner and method for the making of certifications under clause 7i74 4 7c7 ,enlargements ,clause 7iii7 of section #dg7;c77#b77;,b7 of such ,code is amended by adding at the end the following new sentence3 ,the preceding sentence shall not apply to any rehabilitated building energy efficiency property which is an addition or improvement to a building44 7d7 ,effective date ,the amendments made by this section shall apply to qualified rehabilitated buildings placed in service after the date of the enactment of this ,act4 #e4 ,coordination of energy credit with rehabilitation credit 7a7 ,in general ,paragraph 7#b7 of section #dh7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking subparagraph 7,b74 7b7 ,conforming amendments ,paragraph 7#b7 of section #dh7;a7 of such ,code is amended-- 7#a7 by redesignating subparagraph 7,a77ii7 as subparagraph 7,b7 and moving such subparagraph #b ems to the left1 7#b7 by redesignating subclauses 7,i7 through 7,,iv7 of subparagraph 7,a77i7 as clauses 7i7 through 7iv71 respectively1 and by moving such clauses #b ems to the left1 and 7#c7 by striking so much of such paragraph as precedes #cj percent in the case of-- and inserting the following3 7#b7 ,energy percentage ,the energy percentage is-- 7,a7 #cj percent in the case of-- 4 7c7 ,basis reduction ,paragraph 7#c7 of section #ej7;c7 of such ,code is amended by adding at the end the following new flush sentence3 ,in the case of property that qualifies for both the energy credit and the rehabilitation credit1 the preceding sentence shall be applied by substituting none for only #ej percent each place it appears4 4 7d7 ,effective date ,the amendments made by this section shall apply to property placed in service after the date of the enactment of this ,act4 #f4 ,date by which building must be first placed in service 7a7 ,in ,general ,subparagraph 7,b7 of section #dg7;c77#a7 of the ,internal ,revenue ,code of #aihf 7relating to the date by which building must be first placed in service7 is amended-- 7#a7 by striking ,building must be first placed in service before #aicf and inserting ,date by which building must first be placed in service1 and 7#b7 by striking before #aicf and inserting no less than #ej years prior to the year in which qualified rehabilitation expenditures are taken into account under subsection 7b77#a74 7b7 ,effective ,date ,the amendment made by this section shall apply to property placed in service after the date of the enactment of this ,act4 #g4 ,modifications regarding certain tax-exempt use property 7a7 ,in ,general ,subclause 7,i7 of section #dg7;c77#b77;,b77v7 of the ,internal ,revenue ,code of #aihf 7relating to tax-exempt use property7 is amended by inserting and subclauses 7,i71 7,,ii71 and 7,,iii7 of section #afh7;h77#a77;,b77ii7 shall not apply after thereof4 7b7 ,effective ,date ,the amendments made by this section shall apply to property placed in service after the date of the enactment of this ,act4 #h4 ,special rules for dispositions of ,state historic tax credits 7a7 ,in general ,part ,,iii of subchapter ,b of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to items specifically excluded from gross income7 is amended by inserting after section #aci;,d the following new section3 #aci;,e4 ,dispositions of ,state historic tax credits 7a7 ,exclusion from income2 basis reduction 7#a7 ,in general ,in the case of a taxpayer who receives a ,state historic tax credit and transfers such credit by sale1 allocation1 or otherwise1 or receives a refund of all or a portion of such credit-- 7,a7 no portion of the net proceeds of such allocation1 disposition1 or refund of such credit shall constitute income to such taxpayer under section #fa7;a71 and 7,b7 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 7#b74 7#b7 ,determination of reduction in basis ,the reduction in basis under paragraph 7#a7 shall be applied-- 7,a7 first1 against the basis in the land1 7,b7 second1 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 7ii7 or 7iii7 of section #dg7;c77#b77;,b71 and 7,c7 third1 against the remaining basis in the property4 7,d7 ,adjustment in basis of interest in partnership or s corporation ,the adjusted basis of-- 7i7 a partner's interest in a partnership1 or 7ii7 stock in an ,s corporation 7as defined in section #acfa7;a77#a771 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 7if any74 7b7 ,election ,to include in income 7#a7 ,in general ,in the case of a taxpayer elects to have this subsection apply-- 7,a7 the net proceeds of the allocation1 disposition1 or refund described in subsection 7a7 received by such taxpayer shall constitute income to such taxpayer under section #fa7;a71 and 7,b7 subsection 7a77#a77;,b7 shall not apply4 7#b7 ,making of election ,an election under this subsection shall be made at such time and in such manner as the ,secretary of the ,treasury may by regulation prescribe4 ,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 ,treasury4 7c7 ,effect on qualified rehabilitation expenditures and rehabilitation credits ,for purposes of determining the rehabilitation credit allowable to a taxpayer under section #dg1 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 7as defined in section #dg7;c77#b77 incurred in connection with such property1 nor shall such transfer or disposition1 nor any basis adjustments under subsection 7a71 be treated as an early disposition of investment credit property for purposes of the recapture provisions of section #ej4 7d7 ,state historic tax credits defined ,for purposes of this section1 the term ,state historic tax credit means any credit against ,state or local tax liabilities which-- 7#a7 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 laws1 and 7#b7 can be allocated1 disposed1 or refunded under such laws4 4 7b7 ,clerical amendment ,the table of sections for such part ,,iii is amended by inserting after the item relating to section #aci;,e the following new item3 ,sec4 #aci;,e4 ,dispositions of ,state historic tax credits44 7c7 ,effective ,date ,this section shall apply to transfers or dispositions made1 or refunds received1 after the date of the enactment of this ,act4