I 

109TH CONGRESS 

2D SESSION H. R. 5420 

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 

MAY 18, 2006 

Mr. CARNAHAN (for himself, Mr. RANGEL, Mr. SOUDER, Mrs. JONES of Ohio, 

Ms. CARSON, Mr. CLAY, Mr. CLEAVER, Mr. GORDON, Ms. HARRIS, Mr. 

HOLT, Mr. JENKINS, Mr. LEWIS of Georgia, Mrs. MALONEY, Mr. 

MICHAUD, Mr. MOORE of Kansas, Mr. NADLER, Mr. PAYNE, Mr. ROTHMAN, and Mr. SKELTON) 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 ‘‘Preserve Historic 

5 America Act of 2006’’. 


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1 SEC. 2. EXPANSION OF INCENTIVES FOR BUILDING REHA2 BILITATION. 

3 (a) INCREASED CREDIT FOR CERTIFIED HISTORIC

4 STRUCTURES.—Paragraph (2) of section 47(a) of the In5 ternal Revenue Code of 1986 (relating to rehabilitation 

6 credit) is amended by striking ‘‘20 percent’’ and inserting 

7 ‘‘25 percent’’. 

8 (b) 50-YEAR OLD BUILDINGS ELIGIBLE FOR CRED9 IT.—Subparagraph (B) of section 47(c)(1) of such Code 

10 (relating to building must be first placed in service before 

11 1936) is amended to read as follows: 

12 ‘‘(B) BUILDING MUST BE AT LEAST 50

13 YEARS OLD.—In the case of a building other 

14 than a certified historic structure, a building 

15 shall not be a qualified rehabilitated building 

16 unless the building was first placed in service at 

17 least 50 years before the beginning of the reha18 bilitation.’’. 

19 (c) USE AS LODGING NOT TO DISQUALIFY CERTAIN

20 PROPERTY FOR REHABILITATION CREDIT.—Subpara21 graph (C) of section 50(b)(2) of such Code (relating to 

22 property eligible for the investment credit) is amended by 

23 striking ‘‘certified historic structure’’ and inserting ‘‘quali24 fied rehabilitated building’’. 

25 (d) ONLY 50-PERCENT BASIS REDUCTION FOR

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1 ING CREDIT AND THE REHABILITATION CREDIT ARE AL2 LOWED.—Paragraph (3) of section 50(c) of such Code (re3 lating to special rules for determining basis) is amended 

4 by inserting ‘‘and in the case of the credits under sections 

5 42 and 47 which are allowed for the same taxable year 

6 with respect to the same building’’ after ‘‘energy credit’’. 

7 (e) INCREASE IN REHABILITATION CREDIT FOR

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

9 subsection 47(c) of such Code (defining qualified rehabili10 tation expenditures) is amended by adding at the end the 

11 following new subparagraph: 

12 ‘‘(E) INCREASE IN CREDIT FOR BUILDINGS

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

14 qualified rehabilitated building located in a 

15 qualified census tract, or difficult development 

16 area, which is designated for purposes of sec17 tion 42(d)(5)C), the qualified rehabilitation ex18 penditures taken into account under this section 

19 shall be 130 percent of such expenditures deter20 mined without regard to this subparagraph.’’. 

21 (f) INCREASE IN REHABILITATION CREDIT FOR CER22 TAIN SMALLER PROJECTS.—Section 47 of such Code (re23 lating to rehabilitation credit) is amended by adding at 

24 the end the following new subsection: 


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1 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER

2 PROJECTS.— 

3 ‘‘(1) IN GENERAL.—In the case of an eligible 

4 small rehabilitation of nonresidential real property 

5 or residential rental property— 

6 ‘‘(A) subsection (a) shall be applied by 

7 substituting ‘35 percent’ for the otherwise ap8 plicable percentage, and 

9 ‘‘(B) clause (i) of subsection (c)(1)(C) 

10 shall be applied— 

11 ‘‘(i) by substituting ‘50 percent of the 

12 adjusted basis’ for ‘the adjusted basis’, and 

13 ‘‘(ii) by substituting ‘$3,000’ for 

14 ‘$5,000’. 

15 ‘‘(2) ELIGIBLE SMALL REHABILITATION.—For 

16 purposes of this subsection, the term ‘eligible small 

17 rehabilitation’ means any rehabilitation if— 

18 ‘‘(A) the qualified rehabilitation expendi19 tures taken into account for purposes of this 

20 section with respect to such rehabilitation are 

21 not over $2,000,000, and 

22 ‘‘(B) no credit was allowed under this sec23 tion during any of the 2 preceding taxable years 

24 (determined without regard to subsection (d)) 


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1 with respect to the building to which such ex2 penditures relate.’’. 

3 (g) REHABILITATION CREDIT FOR CERTIFIED HIS4 TORIC STRUCTURE EXEMPT FROM PASSIVE LOSS

5 RULES.—Subsection (d) of section 469 of such Code (re6 lating to passive activity losses and credits limited) is 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(3) SECTION NOT TO APPLY TO CREDIT FOR

10 REHABILITATION OF HISTORIC STRUCTURES.—The 

11 amount of the passive activity credit shall be deter12 mined without regard to the amount of credit deter13 mined under section 47 with respect to any certified 

14 historic structure (as defined in section 47(c)(3)).’’. 

15 (h) REHABILITATION CREDIT MAY BE TRANS16 FERRED.— 

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

18 of such Code (relating to when expenditures taken 

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

20 following new paragraph: 

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

22 of qualified rehabilitation expenditures which would 

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

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


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1 (hereafter in this paragraph referred to as the ‘ini2 tial taxpayer’)— 

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

4 other person to whom such expenditures are as5 signed by the initial taxpayer, and 

6 ‘‘(B) shall not be taken to account by ini7 tial taxpayer. 

8 Any person to whom such expenditures are assigned 

9 under subparagraph (A) shall be treated for pur10 poses of this title as the taxpayer with respect to 

11 such expenditures.’’. 

12 (2) CONFORMING AMENDMENT.—The heading 

13 for such subsection (b) is amended by inserting 

14 ‘‘ELIGIBILITY FOR CREDIT MAY BE ASSIGNED’’ 

15 after ‘‘ACCOUNT’’. 

16 (i) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply with respect to rehabilitations the 

18 physical work on which begins after the date of enactment 

19 of this Act. 

20 SEC. 3. HISTORIC HOMEOWNERSHIP REHABILITATION 

21 CREDIT. 

22 (a) IN GENERAL.—Subpart A of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of 

24 1986 (relating to nonrefundable personal credits) is 


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1 amended by inserting after section 25D the following new 

2 section: 

3 ‘‘SEC. 25E. HISTORIC HOMEOWNERSHIP REHABILITATION 

4 CREDIT. 

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

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

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

8 20 percent of the qualified rehabilitation expenditures 

9 made by the taxpayer with respect to a qualified historic 

10 home. 

11 ‘‘(b) DOLLAR LIMITATION.— 

12 ‘‘(1) IN GENERAL.—The credit allowed by sub13 section (a) with respect to any residence of a tax14 payer shall not exceed $40,000 ($20,000 in the case 

15 of a married individual filing a separate return). 

16 ‘‘(2) CARRYFORWARD OF CREDIT UNUSED BY

17 REASON OF LIMITATION BASED ON TAX LIABIL18 ITY.—If the credit allowable under subsection (a) for 

19 any taxable year exceeds the limitation imposed by 

20 section 26(a) for such taxable year reduced by the 

21 sum of the credits allowable under this subpart 

22 (other than this section), such excess shall be carried 

23 to the succeeding taxable year and added to the 

24 credit allowable under subsection (a) for such suc25 ceeding taxable year. 


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1 ‘‘(c) QUALIFIED REHABILITATION EXPENDITURE.— 

2 For purposes of this section: 

3 ‘‘(1) IN GENERAL.—The term ‘qualified reha4 bilitation expenditure’ means any amount properly 

5 chargeable to capital account— 

6 ‘‘(A) in connection with the certified reha7 bilitation of a qualified historic home, and 

8 ‘‘(B) for property for which depreciation 

9 would be allowable under section 168 if the 

10 qualified historic home were used in a trade or 

11 business. 

12 ‘‘(2) CERTAIN EXPENDITURES NOT IN13 CLUDED.— 

14 ‘‘(A) EXTERIOR.—Such term shall not in15 clude any expenditure in connection with the re16 habilitation of a building unless at least 5 per17 cent of the total expenditures made in the reha18 bilitation process are allocable to the rehabilita19 tion of the exterior of such building. 

20 ‘‘(B) OTHER RULES TO APPLY.—Rules 

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

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

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

24 If only a portion of a building is used as the prin25 cipal residence of the taxpayer, only qualified rehaVerDate Aug 31 2005 22:30 May 22, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5420.IH H5420

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1 bilitation expenditures which are properly allocable 

2 to such portion shall be taken into account under 

3 this section. 

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

5 this section: 

6 ‘‘(1) IN GENERAL.—Except as otherwise pro7 vided in this subsection, the term ‘certified rehabili8 tation’ has the meaning given such term by section 

9 47(c)(2)(C). 

10 ‘‘(2) FACTORS TO BE CONSIDERED IN THE

11 CASE OF TARGETED AREA RESIDENCES, ETC.— 

12 ‘‘(A) IN GENERAL.—For purposes of ap13 plying section 47(c)(2)(C) under this section 

14 with respect to the rehabilitation of a building 

15 to which this paragraph applies, consideration 

16 shall be given to— 

17 ‘‘(i) the feasibility of preserving exist18 ing architectural and design elements of 

19 the interior of such building, 

20 ‘‘(ii) the risk of further deterioration 

21 or demolition of such building in the event 

22 that certification is denied because of the 

23 failure to preserve such interior elements, 

24 and 


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1 ‘‘(iii) the effects of such deterioration 

2 or demolition on neighboring historic prop3 erties. 

4 ‘‘(B) BUILDINGS TO WHICH THIS PARA5 GRAPH APPLIES.—This paragraph shall apply 

6 with respect to any building— 

7 ‘‘(i) any part of which is a targeted 

8 area residence within the meaning of sec9 tion 143(j)(1), or 

10 ‘‘(ii) which is located within an enter11 prise community or empowerment zone as 

12 designated under section 1391, or a re13 newal community designated under section 

14 1400(e), 

15 but shall not apply with respect to any building 

16 which is listed in the National Register. 

17 ‘‘(3) APPROVED STATE PROGRAM.—The term 

18 ‘certified rehabilitation’ includes a certification made 

19 by— 

20 ‘‘(A) a State Historic Preservation Officer 

21 who administers a State Historic Preservation 

22 Program approved by the Secretary of the Inte23 rior pursuant to section 101(b)(1) of the Na24 tional Historic Preservation Act, or 


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1 ‘‘(B) a local government, certified pursuant 

2 to section 101(c)(1) of the National Historic 

3 Preservation Act and authorized by a State 

4 Historic Preservation Officer, or the Secretary 

5 of the Interior where there is no approved State 

6 program, subject to such terms and conditions 

7 as may be specified by the Secretary of the In8 terior for the rehabilitation of buildings within 

9 the jurisdiction of such officer (or local govern10 ment) for purposes of this section. 

11 ‘‘(e) DEFINITIONS AND SPECIAL RULES.—For pur12 poses of this section— 

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

14 ‘qualified historic home’ means a certified historic 

15 structure— 

16 ‘‘(A) which has been substantially rehabili17 tated, and 

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

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

20 ‘‘(ii) is used (or will, within a reason21 able period, be used) by such taxpayer as 

22 his principal residence. 

23 ‘‘(2) SUBSTANTIALLY REHABILITATED.—The 

24 term ‘substantially rehabilitated’ has the meaning 

25 given such term by section 47(c)(1)(C); except that, 


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1 in the case of any building described in subsection 

2 (d)(2), clause (i)(I) thereof shall not apply. 

3 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin4 cipal residence’ has the same meaning as when used 

5 in section 121. 

6 ‘‘(4) CERTIFIED HISTORIC STRUCTURE.— 

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

8 historic structure’ means any building (and its 

9 structural components) which— 

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

11 or 

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

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

14 within which only qualified census tracts 

15 (or portions thereof) are located, and is 

16 certified by the Secretary of the Interior as 

17 being of historic significance to the dis18 trict. 

19 ‘‘(B) CERTAIN STRUCTURES INCLUDED.— 

20 Such term includes any building (and its struc21 tural components) which is designated as being 

22 of historic significance under a statute of a 

23 State or local government, if such statute is 

24 certified by the Secretary of the Interior to the 

25 Secretary as containing criteria which will subVerDate Aug 31 2005 22:30 May 22, 2006 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5420.IH H5420

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1 stantially achieve the purpose of preserving and 

2 rehabilitating buildings of historic significance. 

3 ‘‘(C) QUALIFIED CENSUS TRACTS.—For 

4 purposes of subparagraph (A)(ii)— 

5 ‘‘(i) IN GENERAL.—The term ‘quali6 fied census tract’ means a census tract in 

7 which the median income is less than twice 

8 the statewide median family income. 

9 ‘‘(ii) DATA USED.—The determination 

10 under clause (i) shall be made on the basis 

11 of the most recent decennial census for 

12 which data are available. 

13 ‘‘(5) REHABILITATION NOT COMPLETE BEFORE

14 CERTIFICATION.—A rehabilitation shall not be treat15 ed as complete before the date of the certification re16 ferred to in subsection (d). 

17 ‘‘(6) LESSEES.—A taxpayer who leases his 

18 principal residence shall, for purposes of this section, 

19 be treated as the owner thereof if the remaining 

20 term of the lease (as of the date determined under 

21 regulations prescribed by the Secretary) is not less 

22 than such minimum period as the regulations re23 quire. 

24 ‘‘(7) TENANT-STOCKHOLDER IN COOPERATIVE

25 HOUSING CORPORATION.—If the taxpayer holds 


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

2 216) in a cooperative housing corporation (as de3 fined in such section), such stockholder shall be 

4 treated as owning the house or apartment which the 

5 taxpayer is entitled to occupy as such stockholder. 

6 ‘‘(8) ALLOCATION OF EXPENDITURES RELAT7 ING TO EXTERIOR OF BUILDING CONTAINING COOP8 ERATIVE OR CONDOMINIUM UNITS.—The percentage 

9 of the total expenditures made in the rehabilitation 

10 of a building containing cooperative or condominium 

11 residential units allocated to the rehabilitation of the 

12 exterior of the building shall be attributed propor13 tionately to each cooperative or condominium resi14 dential unit in such building for which a credit 

15 under this section is claimed. 

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) HISTORIC REHABILITATION MORTGAGE CREDIT

12 CERTIFICATE.— 

13 ‘‘(1) IN GENERAL.—The taxpayer may elect, in 

14 lieu of the credit otherwise allowable under this sec15 tion, to receive a historic rehabilitation mortgage 

16 credit certificate. An election under this paragraph 

17 shall be made— 

18 ‘‘(A) in the case of a building to which 

19 subsection (g) applies, at the time of purchase, 

20 or 

21 ‘‘(B) in any other case, at the time reha22 bilitation is completed. 

23 ‘‘(2) HISTORIC REHABILITATION MORTGAGE

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1 section, the term ‘historic rehabilitation mortgage 

2 credit certificate’ means a certificate— 

3 ‘‘(A) issued to the taxpayer, in accordance 

4 with procedures prescribed by the Secretary, 

5 with respect to a certified rehabilitation, 

6 ‘‘(B) the face amount of which shall be 

7 equal to the credit which would (but for this 

8 subsection) be allowable under subsection (a) to 

9 the taxpayer with respect to such rehabilitation, 

10 ‘‘(C) which may only be transferred by the 

11 taxpayer to a lending institution (including a 

12 nondepository institution) in connection with a 

13 loan— 

14 ‘‘(i) that is secured by the building 

15 with respect to which the credit relates, 

16 and 

17 ‘‘(ii) the proceeds of which may not be 

18 used for any purpose other than the acqui19 sition or rehabilitation of such building, 

20 and 

21 ‘‘(D) in exchange for which such lending 

22 institution provides to the taxpayer— 

23 ‘‘(i) a reduction in the rate of interest 

24 on the loan which results in interest pay25 ment reductions which are substantially 


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1 equivalent on a present value basis to the 

2 face amount of such certificate, or 

3 ‘‘(ii) if the taxpayer so elects with re4 spect to a specified amount of the face 

5 amount of such a certificate relating to a 

6 building— 

7 ‘‘(I) which is a targeted area res8 idence (within the meaning of section 

9 143(j)(1)), or 

10 ‘‘(II) which is located in an en11 terprise community or empowerment 

12 zone as designated under section 

13 1391, or a renewal community as des14 ignated under section 1400(e), a pay15 ment which is substantially equivalent 

16 to such specified amount to be used to 

17 reduce the taxpayer’s cost of pur18 chasing the building (and only the re19 mainder of such face amount shall be 

20 taken into account under clause (i)). 

21 ‘‘(3) METHOD OF DISCOUNTING.—The present 

22 value under paragraph (2)(D)(i) shall be deter23 mined— 

24 ‘‘(A) for a period equal to the term of the 

25 loan referred to in subparagraph (D)(i), 


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1 ‘‘(B) by using the convention that any pay2 ment on such loan in any taxable year within 

3 such period is deemed to have been made on 

4 the last day of such taxable year, 

5 ‘‘(C) by using a discount rate equal to 65 

6 percent of the average of the annual Federal 

7 mid-term rate and the annual Federal long8 term rate applicable under section 1274(d)(1) 

9 to the month in which the taxpayer makes an 

10 election under paragraph (1) and compounded 

11 annually, and 

12 ‘‘(D) by assuming that the credit allowable 

13 under this section for any year is received on 

14 the last day of such year. 

15 ‘‘(4) USE OF CERTIFICATE BY LENDER.—The 

16 amount of the credit specified in the certificate shall 

17 be allowed to the lender only to offset the regular 

18 tax (as defined in section 55(c)) of such lender. The 

19 lender may carry forward all unused amounts under 

20 this subsection until exhausted. 

21 ‘‘(5) HISTORIC REHABILITATION MORTGAGE

22 CREDIT CERTIFICATE NOT TREATED AS TAXABLE IN23 COME.—Notwithstanding any other provision of law, 

24 no benefit accruing to the taxpayer through the use 

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1 cate shall be included in gross income for purposes 

2 of this title. 

3 ‘‘(i) RECAPTURE.— 

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

5 year period beginning on the date on which the reha6 bilitation of the building is completed (or, if sub7 section (g) applies, the date of purchase of such 

8 building by the taxpayer)— 

9 ‘‘(A) the taxpayer disposes of such tax10 payer’s interest in such building, or 

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

12 principal residence of the taxpayer or ceases to 

13 be a certified historic structure, the taxpayer’s 

14 tax imposed by this chapter for the taxable year 

15 in which such disposition or cessation occurs 

16 shall be increased by the recapture percentage 

17 of the credit allowed under this section for all 

18 prior taxable years with respect to such reha19 bilitation. 

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

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

22 determined in accordance with the table under sec23 tion 50(a)(1)(B), deeming such table to be amend24 ed— 


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

2 be investment credit property within—’ and in3 serting ‘If the disposition or cessation occurs 

4 within—’, and 

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

6 after placed in service’ and inserting ‘One full 

7 year after the taxpayer becomes entitled to the 

8 credit’. 

9 ‘‘(3) TRANSFER BETWEEN SPOUSES OR INCI10 DENT TO DIVORCE.—In the case of any transfer de11 scribed in subsection (a) of section 1041 (relating to 

12 transfers between spouses or incident to divorce)— 

13 ‘‘(A) the foregoing provisions of this sub14 section shall not apply, and 

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

16 subsection with respect to the transferred prop17 erty shall apply to the transferee as would have 

18 applied to the transferor. 

19 ‘‘(j) BASIS ADJUSTMENTS.—For purposes of this 

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

21 expenditure with respect to any property (including any 

22 purchase under subsection (g) and any transfer under sub23 section (h)), the increase in the basis of such property 

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1 penditure shall be reduced by the amount of the credit 

2 so allowed. 

3 ‘‘(k) PROCESSING FEES.—Any State may impose a 

4 fee for the processing of applications for the certification 

5 of any rehabilitation under this section provided that the 

6 amount of such fee is used only to defray expenses associ7 ated with the processing of such applications. 

8 ‘‘(l) DENIAL OF DOUBLE BENEFIT.—No credit shall 

9 be allowed under this section for any amount for which 

10 credit is allowed under section 47. 

11 ‘‘(m) REGULATIONS.—The Secretary shall prescribe 

12 such regulations as may be appropriate to carry out the 

13 purposes of this section, including regulations where less 

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

15 where more than 1 taxpayer use the same dwelling unit 

16 as their principal residence.’’ 

17 (b) CONFORMING AMENDMENTS.— 

18 (1) Paragraph (4) of section 23(c) of such Code 

19 is amended by inserting ‘‘and section 25E’’ after 

20 ‘‘this section 1400C’’. 

21 (2) Subparagraph (C) of section 25(e)(1) of 

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

23 ‘‘sections 25D’’. 


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1 (3) Subsection (d) of section 1400C of such 

2 Code is amended by striking ‘‘and 25B’’ and insert3 ing ‘‘25B, and 25E)’’. 

4 (4) Subsection (a) of section 1016 of such Code 

5 is amended by striking ‘‘and’’ at the end of para6 graph (36), by striking the period at the end of 

7 paragraph (37) and inserting ‘‘, and’’, and by add8 ing at the end the following new item: 

9 ‘‘(38) to the extent provided in section 25E(j).’’ 

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

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

12 of such Code is amended by inserting after the item relat13 ing to section 25D the following new item: 

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

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

15 this section shall apply with respect to rehabilitations the 

16 physical work on which begins after the date of enactment 

17 of this Act. 

Æ 


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