I 

111TH CONGRESS 

1ST SESSION H. R. 3670 

To amend the Internal Revenue Code of 1986 to expand the incentives 

for the rehabilitation of older buildings, including owner-occupied residences. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2009 

Mr. CARNAHAN (for himself, Mr. TURNER, Ms. SCHWARTZ, Ms. BERKLEY, 

Mr. CROWLEY, Mr. HINCHEY, Mr. LANGEVIN, Mr. COHEN, Mr. VAN

HOLLEN, Mr. SKELTON, Mr. BLUMENAUER, Mr. CAPUANO, Mr. 

DELAHUNT, Mr. CLAY, Mr. CLEAVER, Mr. BRALEY of Iowa, Mr. 

LOEBSACK, Mr. RYAN of Ohio, Mr. HOLT, Mr. BOUCHER, Mr. KENNEDY, 

Mr. GONZALEZ, Mr. GORDON of Tennessee, Mr. BOSWELL, and Mr. HIGGINS) introduced the following bill; which was referred to the Committee 

on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to expand 

the incentives for the rehabilitation of older buildings, 

including owner-occupied residences. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Historic Homeowners 

5 Revitalization Act of 2009’’. 


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1 SEC. 2. HISTORIC HOMEOWNERSHIP REHABILITATION 

2 CREDIT. 

3 (a) IN GENERAL.—Subpart A of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 (relating to nonrefundable personal credits) is 

6 amended by inserting after section 25D the following new 

7 section: 

8 ‘‘SEC. 25E. HISTORIC HOMEOWNERSHIP REHABILITATION 

9 CREDIT. 

10 ‘‘(a) GENERAL RULE.—In the case of an individual, 

11 there shall be allowed as a credit against the tax imposed 

12 by this chapter for the taxable year an amount equal to 

13 20 percent of the qualified rehabilitation expenditures 

14 made by the taxpayer with respect to a qualified historic 

15 home. 

16 ‘‘(b) DOLLAR LIMITATION.—The credit allowed by 

17 subsection (a) with respect to any residence of a taxpayer 

18 shall not exceed $60,000 ($30,000 in the case of a married 

19 individual filing a separate return). 

20 ‘‘(c) QUALIFIED REHABILITATION EXPENDITURE.— 

21 For purposes of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘qualified reha23 bilitation expenditure’ means any amount properly 

24 chargeable to capital account— 

25 ‘‘(A) in connection with the certified reha26 bilitation of a qualified historic home, and 


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1 ‘‘(B) for property for which depreciation 

2 would be allowable under section 168 if the 

3 qualified historic home were used in a trade or 

4 business. 

5 ‘‘(2) CERTAIN EXPENDITURES NOT IN6 CLUDED.— 

7 ‘‘(A) EXTERIOR.—Such term shall not in8 clude any expenditure in connection with the re9 habilitation of a building unless at least 5 per10 cent of the total expenditures made in the reha11 bilitation process are allocable to the rehabilita12 tion of the exterior of such building. 

13 ‘‘(B) OTHER RULES TO APPLY.—Rules 

14 similar to the rules of clauses (ii) and (iii) of 

15 section 47(c)(2)(B) shall apply. 

16 ‘‘(3) MIXED USE OR MULTIFAMILY BUILDING.— 

17 If only a portion of a building is used as the prin18 cipal residence of the taxpayer, only qualified reha19 bilitation expenditures which are properly allocable 

20 to such portion shall be taken into account under 

21 this section. 

22 ‘‘(d) CERTIFIED REHABILITATION.—For purposes of 

23 this section, the term ‘certified rehabilitation’ has the 

24 meaning given such term by section 47(c)(2)(C). 


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1 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur2 poses of this section— 

3 ‘‘(1) QUALIFIED HISTORIC HOME.—The term 

4 ‘qualified historic home’ means a certified historic 

5 structure— 

6 ‘‘(A) which has been substantially rehabili7 tated, and 

8 ‘‘(B) which (or any portion of which)— 

9 ‘‘(i) is owned by the taxpayer, and 

10 ‘‘(ii) is used (or will, within a reason11 able period, be used) by such taxpayer as 

12 his principal residence. 

13 ‘‘(2) SUBSTANTIALLY REHABILITATED.—The 

14 term ‘substantially rehabilitated’ has the meaning 

15 given such term by section 47(c)(1)(C). 

16 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin17 cipal residence’ has the same meaning as when used 

18 in section 121. 

19 ‘‘(4) CERTIFIED HISTORIC STRUCTURE.— 

20 ‘‘(A) IN GENERAL.—The term ‘certified 

21 historic structure’ means any building (and its 

22 structural components) which— 

23 ‘‘(i) is listed in the National Register, 

24 or 


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1 ‘‘(ii) is located in a registered historic 

2 district (as defined in section 47(c)(3)(B)) 

3 and is certified by the Secretary of the In4 terior as being of historic significance to 

5 the district. 

6 ‘‘(5) REHABILITATION NOT COMPLETE BEFORE

7 CERTIFICATION.—A rehabilitation shall not be treat8 ed as complete before the date of the certification re9 ferred to in subsection (d). 

10 ‘‘(6) TENANT-STOCKHOLDER IN COOPERATIVE

11 HOUSING CORPORATION.—If the taxpayer holds 

12 stock as a tenant-stockholder (as defined in section 

13 216) in a cooperative housing corporation (as de14 fined in such section), such stockholder shall be 

15 treated as owning the house or apartment which the 

16 taxpayer is entitled to occupy as such stockholder. 

17 ‘‘(7) ALLOCATION OF EXPENDITURES RELAT18 ING TO EXTERIOR OF BUILDING CONTAINING COOP19 ERATIVE OR CONDOMINIUM UNITS.—The percentage 

20 of the total expenditures made in the rehabilitation 

21 of a building containing cooperative or condominium 

22 residential units allocated to the rehabilitation of the 

23 exterior of the building shall be attributed propor24 tionately to each cooperative or condominium resiVerDate Nov 24 2008 05:21 Sep 30, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3670.IH H3670

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1 dential unit in such building for which a credit 

2 under this section is claimed. 

3 ‘‘(8) CARRYBACK AND CARRYFORWARD OF

4 CREDIT UNUSED BY REASON OF LIMITATION BASED

5 ON TAX LIABILITY.— 

6 ‘‘(A) IN GENERAL.—If the credit allowable 

7 under subsection (a) for any taxable year ex8 ceeds the applicable tax limit for such taxable 

9 year, such excess shall be a carryback to the 

10 preceding taxable year and a carryforward to 

11 each of the 3 succeeding taxable years and, sub12 ject to the limitations of subparagraph (B), 

13 shall be added to the credit allowable by sub14 section (a) for such preceding or succeeding 

15 taxable year, as the case may be. 

16 ‘‘(B) AMOUNT CARRIED TO EACH YEAR.— 

17 Rules similar to the rules of section 39(a)(2) 

18 shall apply for purposes of this paragraph. 

19 ‘‘(C) LIMITATION.—The amount of the un20 used credit which may be taken into account 

21 under subparagraph (A) for any taxable year 

22 shall not exceed the amount (if any) by which 

23 the applicable tax limit for such taxable year 

24 exceeds the sum of— 


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1 ‘‘(i) the credit allowable under sub2 section (a) for such taxable year deter3 mined without regard to this paragraph, 

4 and 

5 ‘‘(ii) the amounts which, by reason of 

6 this paragraph, are carried to such taxable 

7 year and are attributable to taxable years 

8 before the unused credit year. 

9 ‘‘(D) APPLICABLE TAX LIMIT.—For pur10 poses of this paragraph, the term ‘applicable 

11 tax limit’ means— 

12 ‘‘(i) in the case of a taxable year to 

13 which section 26(a)(2) applies, the limita14 tion imposed by section 26(a)(2) for the 

15 taxable year reduced by the sum of the 

16 credits allowable under this subpart (other 

17 than this section), and 

18 ‘‘(ii) in the case of a taxable year to 

19 which section 26(a)(2) does not apply, the 

20 limitation imposed by section 26(a)(1) for 

21 the taxable year reduced by the sum of the 

22 credits allowable under this subpart (other 

23 than this section and sections 23, 24, 

24 25A(i), 25B, 25D, 30, 30B, 30D). 


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1 ‘‘(9) CREDIT MAY BE ASSIGNED.—The amount 

2 of qualified rehabilitation expenditures which would 

3 (but for this paragraph) be taken into account under 

4 subsection (a) for any taxable year by any person 

5 (hereafter in this paragraph referred to as the ‘ini6 tial taxpayer’)— 

7 ‘‘(A) may be taken into account by any 

8 other person to whom such expenditures are as9 signed by the initial taxpayer, and 

10 ‘‘(B) shall not be taken to account by ini11 tial taxpayer. 

12 Any person to whom such expenditures are assigned 

13 under subparagraph (A) shall be treated for pur14 poses of this title as the taxpayer with respect to 

15 such expenditures. 

16 ‘‘(f) WHEN EXPENDITURES TAKEN INTO AC17 COUNT.—In the case of a building other than a building 

18 to which subsection (g) applies, qualified rehabilitation ex19 penditures shall be treated for purposes of this section as 

20 made— 

21 ‘‘(1) on the date the rehabilitation is completed, 

22 or 

23 ‘‘(2) to the extent provided by the Secretary by 

24 regulation, when such expenditures are properly 

25 chargeable to capital account. 


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1 Regulations under paragraph (2) shall include a rule simi2 lar to the rule under section 50(a)(2) (relating to recap3 ture if property ceases to qualify for progress expendi4 tures). 

5 ‘‘(g) ALLOWANCE OF CREDIT FOR PURCHASE OF RE6 HABILITATED HISTORIC HOME.— 

7 ‘‘(1) IN GENERAL.—In the case of a qualified 

8 purchased historic home, the taxpayer shall be treat9 ed as having made (on the date of purchase) the ex10 penditures made by the seller of such home. For 

11 purposes of the preceding sentence, expenditures 

12 made by the seller shall be deemed to be qualified 

13 rehabilitation expenditures if such expenditures, if 

14 made by the purchaser, would be qualified rehabili15 tation expenditures. 

16 ‘‘(2) QUALIFIED PURCHASED HISTORIC

17 HOME.—For purposes of this subsection, the term 

18 ‘qualified purchased historic home’ means any sub19 stantially rehabilitated certified historic structure 

20 purchased by the taxpayer if— 

21 ‘‘(A) the taxpayer is the first purchaser of 

22 such structure after the date rehabilitation is 

23 completed, and the purchase occurs within 5 

24 years after such date, 


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1 ‘‘(B) the structure (or a portion thereof) 

2 will, within a reasonable period, be the principal 

3 residence of the taxpayer, 

4 ‘‘(C) no credit was allowed to the seller 

5 under this section or section 47 with respect to 

6 such rehabilitation, and 

7 ‘‘(D) the taxpayer is furnished with such 

8 information as the Secretary determines is nec9 essary to determine the credit under this sub10 section. 

11 ‘‘(h) RECAPTURE.— 

12 ‘‘(1) IN GENERAL.—If, before the end of the 5- 

13 year period beginning on the date on which the reha14 bilitation of the building is completed (or, if sub15 section (g) applies, the date of purchase of such 

16 building by the taxpayer)— 

17 ‘‘(A) the taxpayer disposes of such tax18 payer’s interest in such building, or 

19 ‘‘(B) such building ceases to be used as the 

20 principal residence of the taxpayer or ceases to 

21 be a certified historic structure, the taxpayer’s 

22 tax imposed by this chapter for the taxable year 

23 in which such disposition or cessation occurs 

24 shall be increased by the recapture percentage 

25 of the credit allowed under this section for all 


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1 prior taxable years with respect to such reha2 bilitation. 

3 ‘‘(2) RECAPTURE PERCENTAGE.—For purposes 

4 of paragraph (1), the recapture percentage shall be 

5 determined in accordance with the table under sec6 tion 50(a)(1)(B), deeming such table to be amend7 ed— 

8 ‘‘(A) by striking ‘If the property ceases to 

9 be investment credit property within—’ and in10 serting ‘If the disposition or cessation occurs 

11 within—’, and 

12 ‘‘(B) in clause (i) by striking ‘One full year 

13 after placed in service’ and inserting ‘One full 

14 year after the taxpayer becomes entitled to the 

15 credit’. 

16 ‘‘(3) TRANSFER BETWEEN SPOUSES OR INCI17 DENT TO DIVORCE.—In the case of any transfer de18 scribed in subsection (a) of section 1041 (relating to 

19 transfers between spouses or incident to divorce)— 

20 ‘‘(A) the foregoing provisions of this sub21 section shall not apply, and 

22 ‘‘(B) the same tax treatment under this 

23 subsection with respect to the transferred prop24 erty shall apply to the transferee as would have 

25 applied to the transferor. 


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1 ‘‘(i) BASIS ADJUSTMENTS.—For purposes of this 

2 subtitle, if a credit is allowed under this section for any 

3 expenditure with respect to any property (including any 

4 purchase under subsection (g)), the increase in the basis 

5 of such property which would (but for this subsection) re6 sult from such expenditure shall be reduced by the amount 

7 of the credit so allowed. 

8 ‘‘(j) PROCESSING FEES.—Any State may impose a 

9 fee for the processing of applications for the certification 

10 of any rehabilitation under this section provided that the 

11 amount of such fee is used only to defray expenses associ12 ated with the processing of such applications. 

13 ‘‘(k) DENIAL OF DOUBLE BENEFIT.—No credit shall 

14 be allowed under this section for any amount for which 

15 credit is allowed under section 47. 

16 ‘‘(l) REGULATIONS.—The Secretary shall prescribe 

17 such regulations as may be appropriate to carry out the 

18 purposes of this section, including regulations where less 

19 than all of a building is used as a principal residence and 

20 where more than 1 taxpayer use the same dwelling unit 

21 as their principal residence.’’ 

22 (b) CONFORMING AMENDMENTS.— 

23 (1)(A) Paragraph (1) of section 23(c) of such 

24 Code is amended by inserting ‘‘, 25E,’’ after ‘‘25D’’. 


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1 (B) Subparagraph (C) of section 25(e)(1) of 

2 such Code is amended by inserting ‘‘25E,’’ after 

3 ‘‘sections 25D,’’. 

4 (C) Subparagraph (A) of section 25D(2) of 

5 such Code is amended by inserting ‘‘and section 

6 25E’’ after ‘‘(other than this section’’. 

7 (D) Paragraph (1) of section 1400C(d) of such 

8 Code is amended by striking ‘‘section 25D’’ and in9 serting ‘‘sections 25D and 25E’’. 

10 (2)(A) Clause (ii) of section 25(e)(1)(C) of such 

11 Code is amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

12 (B) Paragraph (2) of section 1400C of such 

13 Code is amended by inserting ‘‘25E,’’ after ‘‘25D,’’. 

14 (3) Subsection (a) of section 1016 of such Code 

15 is amended by striking ‘‘and’’ at the end of para16 graph (36), by striking the period at the end of 

17 paragraph (37) and inserting ‘‘, and’’, and by add18 ing at the end the following new item: 

19 ‘‘(38) to the extent provided in section 25E(i).’’ 

20 (c) CLERICAL AMENDMENT.—The table of sections 

21 for subpart A of part IV of subchapter A of chapter 1 

22 of such Code is amended by inserting after the item relat23 ing to section 25D the following new item: 

‘‘Sec. 25E. Historic homeownership rehabilitation credit.’’. 

24 (d) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply with respect to rehabilitations the 


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1 physical work on which begins after the date of enactment 

2 of this Act. 

3 SEC. 3. EXPANSION OF INCENTIVES FOR BUILDING REHA4 BILITATION. 

5 (a) INCREASE IN REHABILITATION CREDIT FOR

6 BUILDINGS IN HIGH COST AREAS.—Paragraph (2) of 

7 subsection 47(c) of such Code (defining qualified rehabili8 tation expenditures) is amended by adding at the end the 

9 following new subparagraph: 

10 ‘‘(E) INCREASE IN CREDIT FOR BUILDINGS

11 IN HIGH COST AREAS.—In the case of any 

12 qualified rehabilitated building which is residen13 tial rental property (as defined in paragraph 

14 (2)(D)) located in a qualified census tract or 

15 difficult development area which is designated 

16 for purposes of section 42(d)(5)(C), the quali17 fied rehabilitation expenditures taken into ac18 count under this section shall be 130 percent of 

19 such expenditures determined without regard to 

20 this subparagraph.’’. 

21 (b) REHABILITATION CREDIT MAY BE TRANS22 FERRED.— 

23 (1) IN GENERAL.—Subsection (b) of section 47 

24 of such Code (relating to when expenditures taken 


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1 into account) is amended by adding at the end the 

2 following new paragraph: 

3 ‘‘(3) CREDIT MAY BE ASSIGNED.—The amount 

4 of qualified rehabilitation expenditures with respect 

5 to property described in subsection (c)(1)(A)(iv)(II) 

6 which would (but for this paragraph) be taken into 

7 account under subsection (a) for any taxable year by 

8 any person (hereafter in this paragraph referred to 

9 as the ‘initial taxpayer’)— 

10 ‘‘(A) may be taken into account by any 

11 other person to whom such expenditures are as12 signed by the initial taxpayer, and 

13 ‘‘(B) shall not be taken to account by ini14 tial taxpayer. 

15 Any person to whom such expenditures are assigned 

16 under subparagraph (A) shall be treated for pur17 poses of this title as the taxpayer with respect to 

18 such expenditures.’’. 

19 (2) CONFORMING AMENDMENT.—The heading 

20 for such subsection (b) is amended by inserting ‘‘; 

21 ELIGIBILITY FOR CREDIT MAY BE ASSIGNED’’ after 

22 ‘‘ACCOUNT’’. 

23 (c) APPLICABILITY TO BUILDINGS HELD FOR

24 SALE.— 

25 (1) IN GENERAL.— 


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1 (A) Clause (iv) of section 47(c)(1)(A) of 

2 such Code is amended to read as follows: 

3 ‘‘(iv) depreciation (or amortization in 

4 lieu of depreciation)— 

5 ‘‘(I) is allowable with respect to 

6 such building, or 

7 ‘‘(II) in the case of a residential 

8 property, would be allowable with re9 spect to such building but for the 

10 building being held for sale.’’. 

11 (B) Paragraph (2) of section 47(c) of such 

12 Code is amended by adding at the end the fol13 lowing new subparagraph: 

14 ‘‘(E) SPECIAL RULE FOR CERTAIN PROP15 ERTY HELD FOR SALE.—For purposes of this 

16 paragraph, in the case of a qualified rehabili17 tated building described in paragraph 

18 (1)(A)(iv)(II), such building shall be treated as 

19 owned by the taxpayer as rental property with 

20 respect to which the straight line depreciation 

21 method is used over a recovery period deter22 mined under subsection (c) or (g) of section 

23 168.’’. 

24 (2) CONFORMING AMENDMENT.—Paragraph (4) 

25 of section 50(a) of such Code is amended by striking 


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1 ‘‘or’’ at the end of subparagraph (A), but striking 

2 the period at the end of subparagraph (B) and in3 serting ‘‘, or’’, and by inserting after subparagraph 

4 (B) the following new subparagraph: 

5 ‘‘(C) property described in section 

6 47(c)(1)(A)(iv)(II) that has not otherwise 

7 ceased to be investment property.’’. 

8 (d) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply with respect to rehabilitations the 

10 physical work on which begins after the date of enactment 

11 of this Act. 

Æ 


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