II 

114TH CONGRESS 

2D SESSION S. 3354 

To amend the Internal Revenue Code of 1986 to exclude income attributable 

to certain real property from gross income. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 20, 2016 

Mr. KIRK (for himself and Mr. MANCHIN) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to exclude 

income attributable to certain real property from gross 

income. 

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 ‘‘Bringing Business 

5 Back Act of 2016’’. 

6 SEC. 2. EXCLUSION FOR INCOME ATTRIBUTABLE TO CER7 TAIN REAL PROPERTY. 

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting after section 139F the following new section: 


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1 ‘‘SEC. 139G. INCOME ATTRIBUTABLE TO QUALIFIED REAL 

2 PROPERTY EXCLUDED FROM GROSS INCOME. 

3 ‘‘(a) IN GENERAL.—Gross income shall not include 

4 income or gain attributable to qualified real property for 

5 any taxable year beginning during the exclusion period. 

6 ‘‘(b) QUALIFIED REAL PROPERTY.—For purposes of 

7 this section— 

8 ‘‘(1) IN GENERAL.— 

9 ‘‘(A) DEFINITION.—The term ‘qualified 

10 real property’ means any real property— 

11 ‘‘(i) which is certified by the State or 

12 local zoning authority, and any economic 

13 development board, with respect to such 

14 property as meeting the requirements of 

15 subparagraph (B), and 

16 ‘‘(ii) with respect to which an election 

17 has been made (at such time and in such 

18 form and manner as the Secretary shall by 

19 regulation prescribe) to have this section 

20 apply. 

21 ‘‘(B) REQUIREMENTS.—Property meets 

22 the requirements of this subparagraph if such 

23 property— 

24 ‘‘(i) is zoned for commercial use, 


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1 ‘‘(ii) has been undeveloped and vacant 

2 during the 2-year period ending on the 

3 date of certification, and 

4 ‘‘(iii) is located within a qualified cen5 sus tract. 

6 ‘‘(2) QUALIFIED CENSUS TRACT.—The term 

7 ‘qualified census tract’ means— 

8 ‘‘(A) any census tract— 

9 ‘‘(i) which— 

10 ‘‘(I) has an average poverty rate 

11 exceeding the national average poverty 

12 rate, or 

13 ‘‘(II) has an unemployment rate 

14 above the national unemployment 

15 rate, and 

16 ‘‘(ii) exhibits another condition of dis17 tress, such as deteriorating infrastructure 

18 or population decline, or 

19 ‘‘(B) any qualified rural census tract. 

20 ‘‘(3) QUALIFIED RURAL CENSUS TRACT.—The 

21 term ‘qualified rural census tract’ means any census 

22 tract— 

23 ‘‘(A) which is located in a rural commu24 nity, 


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1 ‘‘(B) which has an unemployment rate of 

2 not less than 6 percent, and 

3 ‘‘(C) in which not less than 50 percent of 

4 the houses were constructed before 1980. 

5 ‘‘(4) RULES RELATING TO POVERTY AND UNEM6 PLOYMENT RATES.—For purposes of paragraphs (2) 

7 and (3), poverty rates shall be determined by using 

8 2010 census data, and unemployment rates shall be 

9 determined by reference to the rate of unemploy10 ment announced by the Bureau of Labor Statistics 

11 of the Department of Labor for the months in the 

12 two most recently ended calendar quarters. 

13 ‘‘(5) ECONOMIC DEVELOPMENT BOARD.—The 

14 term ‘economic development board’ means, with re15 spect to any property, any entity established by law 

16 to oversee the economic development of an area 

17 within which such property is located. 

18 ‘‘(c) EXCLUSION PERIOD.—The term ‘exclusion pe19 riod’ means, with respect to a taxable year, the 1-taxable20 year period beginning with the first taxable year beginning 

21 after the date of the enactment of this section for which 

22 the income attributable to the qualified real property ex23 ceeds the pre-depreciation expenses attributable to such 

24 real property. 


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1 ‘‘(d) SPECIAL RULES.—For purposes of this sec2 tion— 

3 ‘‘(1) SUBSEQUENT TAXPAYERS.—Subsection (a) 

4 shall only apply to a taxpayer who has an ownership 

5 interest in the qualified real property on the first 

6 day of the exclusion period with respect to such 

7 property. 

8 ‘‘(2) LIMITATION ON APPLICATION OF SEC9 TION.—An election to have this section apply may 

10 only be made once with respect to any property. 

11 ‘‘(3) TAX-EXEMPT USE PROPERTY.—This sec12 tion shall not apply to any property which is tax-ex13 empt use property (as defined in section 168(h)). 

14 ‘‘(e) REGULATIONS.—The Secretary may prescribe 

15 such regulations as may be necessary or appropriate to 

16 carry out the purposes of this section, including methods 

17 for allocating income and expenses to property and rules 

18 to prevent abuse of this section.’’. 

19 (b) CLERICAL AMENDMENT.—The table of parts for 

20 part III of subchapter B of chapter 1 of such Code is 

21 amended by inserting after the item relating to section 

22 139F the following new item: 

‘‘Sec. 139G. Income attributable to qualified real property excluded from gross 

income.’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

Æ 


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