,i  #aahth ,,congress  #ast ,session    
,h4 ,r4 #cgdi  ,,in ,,the ,,house ,,of  
,,representatives  ,may #cj1 #bjbc,mr4  
,la,hood 7for himself and ,mr4          
,schneider7 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 modify the treatment 
of certain rents received by real estate
 investment trusts from related parties4
  #a4 ,short title ,this ,act may be    
cited as the ,retail ,revitalization    
,act of #bjbc4  #b4 ,modification of    
treatment of certain rents received by  
real estate investment trust from       
related parties  7a7 ,special rule for  
distressed tenants  7#a7 ,in general    
,section #hef7;d7 of the ,internal      
,revenue ,code of #aihf is amended by   
adding at the end the following new     
paragraph3  7#aj7 ,special rule for     
distressed tenants  7,a7 ,in general    
,except as otherwise provided by the    
,secretary1 in the case of a real estate

 investment trust which makes a         
qualified acquisition of a qualified    
tenant during the #d-year period        
beginning on the date of the enactment  
of this paragraph1 paragraph 7#b77;,b7  
shall be applied with respect to such   
tenant by substituting #ej percent for  
#aj percent each place it appears       
therein4  7,b7 ,qualified acquisition   
,for purposes of this paragraph-- 7i7   
,in general ,the term qualified         
acquisition means the acquisition by a  
real estate investment trust of stock1  
assets1 or net profits in connection    
with the bankruptcy1 insolvency 7within 
the meaning of section #ajh7;d77#c771 or
 cash flow insolvency of a qualified    
tenant4  7ii7 ,cash flow insolvency ,for
 purposes of clause 7i71 a qualified    
tenant shall be treated as having cash  
flow insolvency following a reasonable  
determination by the real estate        
investment trust1 based upon an         
examination of the facts and            
circumstances1 that such tenant's       

revenue is insufficient to cover its    
debt service payments based on such     
tenant's applicable financial statement 
7as defined in section #dea7;b77#c774   
7,c7 ,qualified tenant ,for purposes of 
this paragraph-- 7i7 ,in general ,the   
term qualified tenant means1 with       
respect to any acquisition referred to  
in subparagraph 7,b71 any person from   
which the real estate investment trust  
received or accrued rents from real     
property pursuant to a lease which was  
in effect on the date of the enactment  
of this paragraph4  7ii7 ,renewals1     
etc41 of existing leases ,for purposes  
of clause 7i71 a lease shall be treated 
as in effect on the date of the         
enactment of this paragraph if the      
conditions of paragraph 7#i77;,c7 are   
satisfied4  7iii7 ,successors ,the term 
qualified tenant shall include a person 
if such person is a successor to a      
qualified tenant within the meaning of  
subsection 7g7 7without regard to such  
person's status as a real estate        

investment trust or any continuity of   
shareholder interest requirement7 or for
 purposes of section #cha4  7,d7        
,limitation on period for which         
treatment applies ,with respect to any  
qualified acquisition1 subparagraph 7,a7
 shall apply only to amounts received or
 accrued during the #g-taxable-year     
period beginning with the taxable year  
which includes the date of such         
acquisition4  7,e7 ,coordination with   
certain other provisions ,for purposes  
of clauses 7i7 and 7v7 of paragraph     
7#h77;,a71 whether a person is described
 in paragraph 7#b77;,b7 shall be        
determined after application of         
subparagraph 7,a7 of this paragraph4  4 
7#b7 ,conforming amendment ,section     
#hef7;d77#b77;,b7 of such ,code is      
amended by striking paragraph 7#h7 and  
inserting paragraphs 7#h7 and 7#aj74    
7#c7 ,effective date ,the amendments    
made by this subsection shall apply to  
qualified acquisitions 7as defined in   
section #hef7;d77#aj77;,b7 of the       

,internal ,revenue ,code of #aihf1 as   
added by this subsection7 after the date
 of the enactment of this ,act1 in      
taxable years ending after such date4   
7b7 ,increase in percentage of ownership
 at which rents are generally           
disqualified  7#a7 ,in general ,section 
#hef7;d77#b77;,b7 of such ,code is      
amended by striking #aj percent each    
place it appears and inserting #cj      
percent4  7#b7 ,effective date ,the     
amendment made by this subsection shall 
apply to taxable years ending after the 
date of the enactment of this ,act4  7c7
 ,increase in percentage of ownership at
 which constructive ownership rules     
begin ,to apply  7#a7 ,in general       
,section #hef7;d77#e7 of such ,code is  
amended-- 7,a7 by striking #aj percent  
in subparagraph 7,a7 and inserting #cj  
percent1 and  7,b7 by striking #be      
percent in subparagraph 7,b7 and        
inserting #cj percent4  7#b7 ,effective 
date ,the amendments made by this       
subsection shall apply to taxable years 

ending after the date of the enactment  
of this ,act4  7d7 ,limitation on       
application of constructive ownership   
rules  7#a7 ,in general ,section        
#hef7;d77#e7 of such ,code is amended by
 striking and at the end of subparagraph
 7,a71 by striking the period at the end
 of subparagraph 7,b7 and inserting 1   
and1 and by adding at the end the       
following3  7,c7 except as otherwise    
provided by the ,secretary1 stock1      
assets1 and net profits constructively  
owned by a partnership1 estate1 trust1  
or corporation by reason of the         
application of section #cah7;a77#c7     
7after application of subparagraphs 7,a7
 and 7,b77 shall not be considered as   
owned by it for purposes of again       
applying such section in order to make  
another person the constructive owner of
 such stock1 assets1 or net profits4    
,subparagraph 7,c7 shall not prevent any
 person from being the constructive     
owner of stock1 assets1 or net profits  
of any person as the result of any other

 application of section #cah7;a7 7as    
modified by this paragraph74 4  7#b7 ,no
 inference ,nothing in the amendments   
made by paragraph 7#a7 shall be         
construed to create any inference with  
respect to the proper application of    
section #cah of the ,internal ,revenue  
,code of #aihf to cases other than cases
 to which such amendments apply4  7#c7  
,effective date ,the amendments made by 
this subsection shall apply to taxable  
years ending after the date of the      
enactment of this ,act4  7e7            
,modification of rental exception for   
taxable ,,reit subsidiaries  7#a7 ,in   
general ,section #hef7;d77#h77;,a77i7 of
 such ,code is amended to read as       
follows3  7i7 ,in general ,the          
requirements of this subparagraph are   
met with respect to any property if--   
7,i7 not more than #cj percent of the   
leasable space of such property is      
rented to taxable ,,reit subsidiaries   
and other persons described in paragraph
 7#b77;,b7 7determined without regard to

 paragraph 7#aj771 and  7,,ii7 not more 
than #ej percent of the leasable space  
of such property is rented to taxable   
,,reit subsidiaries and other persons   
described in paragraph 7#b77;,b7        
7determined after the application of    
paragraph 7#aj774  4  7#b7 ,effective   
date ,the amendment made by this        
subsection shall apply to taxable years 
ending after the date of the enactment  
of this ,act4