,,ii #aahth ,,congress #b;d ,session ,s4 #efjg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #ai 7legislative day1 ,december #af71 #bjbd,mrs4 ,capito 7for herself and ,mr4 ,warner7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to enhance the rehabilitation credit for buildings in rural areas4 #a4 ,short title ,this ,act may be cited as the ,rural ,historic ,tax ,credit ,improvement ,act4 #b4 ,enhancement of rehabilitation credit for buildings in rural areas 7a7 ,in general ,section #dg7;a7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 in paragraph 7#a71 by striking ,for purposes and inserting ,except as provided in paragraph 7#c71 for purposes1 and 7#b7 by adding at the end the following new paragraphs3 7#c7 ,applicable rural projects 7,a7 ,in general ,in the case of any applicable rural project-- 7i7 paragraph 7#a7 shall not apply for any qualified rehabilitation expenditures with respect to such project1 and 7ii7 for the taxable year in which such project is placed in service1 the rehabilitation credit for such taxable year is an amount equal to-- 7,i7 in the case of a project which is an affordable housing project1 #dj percent of the qualified rehabilitation expenditures with respect to such project1 or 7,,ii7 in the case of a project which is not an affordable housing project1 #cj percent of the qualified rehabilitation expenditures with respect to such project4 7,b7 ,applicable rural project 7i7 ,in general ,for purposes of this section1 the term applicable rural project means a qualified rehabilitated building which is located in a rural area4 7ii7 ,limitation ,in the case of any applicable rural project1 the total amount of qualified rehabilitation expenditures which may be taken into account under this section with respect to such project may not exceed #e1jjj1jjj4 7iii7 ,rural area ,for purposes of this paragraph1 the term rural area means any area other than-- 7,i7 a city or town that has a population of greater than #ej1jjj inhabitants1 or 7,,ii7 the urbanized area contiguous and adjacent to a city or town described in subclause 7,i71 as defined by the ,bureau of the ,census based on the latest decennial census of the ,united ,states4 7,c7 ,affordable housing project 7i7 ,in general ,for purposes of this paragraph1 the term affordable housing project means a project-- 7,i7 in which-- 7aa7 not less than #ej percent of the aggregate square feet of the completed project is housing1 and 7bb7 with respect to the housing described in item 7aa71 not less than #ej percent of the aggregate square feet of such housing-- 7,,aa7 is new affordable housing1 or 7,,bb7 continues to provide affordable housing1 or 7,,ii7 in which not less than #cc percent of the aggregate square feet of the completed project-- 7aa7 is new affordable housing1 or 7bb7 continues to provide affordable housing4 7ii7 ,affordable housing ,for purposes of this paragraph1 the term affordable housing means a decent1 safe1 and sanitary dwelling1 apartment1 or other living accommodation for a household whose income does not exceed #fj percent of the median income for the market area 7as defined by the ,secretary of ,housing and ,urban ,development under section #h of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f774 7#d7 ,transfer of credit for applicable rural projects 7,a7 ,in general ,subject to subparagraph 7,b7 and such regulations or other guidance as the ,secretary may provide1 the taxpayer may transfer all or a portion of the credit determined under paragraph 7#c7 for an applicable rural project4 7,b7 ,certification 7i7 ,in general ,a transfer under subparagraph 7,a7 shall be accompanied by a certificate which includes-- 7,i7 the certification for the certified historic structure referred to in subsection 7c77#c71 7,,ii7 the taxpayer's name1 address1 tax identification number1 date of project completion1 and the amount of credit being transferred1 7,,iii7 the transferee's name1 address1 tax identification number1 and the amount of credit being transferred1 and 7,,iv7 such other information as may be required by the ,secretary4 7ii7 ,transferability of certificate ,a certificate issued under this section to a taxpayer shall be transferable to any other taxpayer4 7,c7 ,tax treatment relating to certificate 7i7 ,disallowance of deduction ,no deduction shall be allowed for the amount of consideration paid or incurred by the transferee4 7ii7 ,allowance of credit ,the amount of credit transferred under subparagraph 7,a7-- 7,i7 shall not be allowed to the transferor for any taxable year1 and 7,,ii7 shall be allowable to the transferee as a credit determined under this section for the taxable year of the transferee in which such credit is transferred4 7iii7 ,exclusion ,gross income shall not include any amount received in connection with the transfer of the certificate4 7,d7 ,recapture and other special rules ,the taxpayer who claims a credit determined under this section by reason of a transfer of an amount of credit under subparagraph 7,a7 with respect to an applicable rural project shall be treated as the taxpayer with respect to such project for purposes of section #ej4 7,e7 ,information reporting ,the transferor and the transferee shall each make such reports regarding the transfer of an amount of credit under paragraph 7,a7 and containing such information as the ,secretary may require4 ,the reports required by this subsection shall be filed at such time and in such manner as may be required by the ,secretary4 7,f7 ,regulations ,the ,secretary shall prescribe regulations or other guidance to carry out this paragraph in a manner which is consistent with applicable requirements with respect to transfer of credits under section #fdah4 4 7b7 ,recapture for failure to comply with affordable housing requirements 7#a7 ,in general ,section #ej7;a7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by redesignating paragraphs 7#d7 through 7#f7 as paragraphs 7#e7 through 7#g71 respectively1 and 7,b7 by inserting after paragraph 7#c7 the following new paragraph3 7#d7 ,failure to comply with affordable housing requirements under rehabilitation credit 7,a7 ,in general ,in the case of any applicable rural project which is an affordable housing project 7as such terms are defined in section #dg7;a77#c77 which is eligible for the rehabilitation credit under section #dg7;a71 if such project violates the requirements under section #dg7;a77#c77;,c7 before the close of the recapture period 7as described in paragraph 7#a771 then the tax under this chapter for the taxable year in which such violation occurs shall be increased by #ajj percent of the aggregate decrease in the credits allowed under section #ch for all prior taxable years which would have resulted solely from reducing to zero any credit determined under section #df which is attributable to the rehabilitation credit under section #dg7;a7 with respect to such project4 7,b7 ,exception ,subparagraph 7,a7 shall not apply if the taxpayer demonstrates to the satisfaction of the ,secretary that the violation of the requirements under section #dg7;a77#c77;,c7 has been rectified within #de days of a determination and notice by the ,secretary4 7,c7 ,regulations and guidance ,the ,secretary shall issue such regulations or other guidance as the ,secretary determines necessary or appropriate to carry out the purposes of this paragraph1 including regulations or other guidance which provide for requirements for recordkeeping or information reporting for purposes of administering the requirements of this paragraph4 4 7#b7 ,conforming amendments 7,a7 ,section #ej7;a77#e7 of such ,code1 as redesignated by paragraph 7#a71 is amended-- 7i7 by striking or any applicable transaction to which paragraph 7#c77;,a7 applies and inserting any applicable transaction to which paragraph 7#c77;,a7 applies1 or any violation to which paragraph 7#d77;,a7 applies1 and 7ii7 by striking cessation or applicable transaction and inserting cessation1 applicable transaction1 or violation4 7,b7 ,section #ej7;a77#g77;,c7 of such ,code1 as redesignated by paragraph 7#a71 is amended by striking or 7#c7 and inserting 7#c71 or 7#d74 7,c7 ,section #acga7;d77#a7 of such ,code is amended by striking section #ej7;a77#e7 and inserting section #ej7;a77#f74 7c7 ,effective date ,the amendments made by this section shall apply to property placed in service after ,december #ca1 #bjbd4 #c4 ,elimination of rehabilitation credit basis adjustment 7a7 ,in general ,section #ej7;c7 of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new paragraph3 7#f7 ,exception for rehabilitation credit ,in the case of the rehabilitation credit with respect to any applicable rural project 7as defined in section #dg7;a77#c771 paragraph 7#a7 shall not apply4 4 7b7 ,treatment in case of credit allowed to lessee ,section #ej7;d7 of such ,code is amended by adding at the end the following3 ,in the case of the rehabilitation credit with respect to any applicable rural project 7as defined in section #dg7;a77#c771 paragraph 7#e77;,b7 of the section #dh7;d7 referred to in paragraph 7#e7 of this subsection shall not apply44 7c7 ,effective date ,the amendments made by this section shall apply to property placed in service after ,december #ca1 #bjbd4