I 

112TH CONGRESS 

1ST SESSION H. R. 2479 

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

credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 8, 2011 

Mr. SCHOCK (for himself and Mr. BLUMENAUER) 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 rehabilitation credit, and for other purposes. 

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 ‘‘Creating American 

5 Prosperity through Preservation Act of 2011’’. 

6 SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR 

7 CERTAIN SMALLER PROJECTS. 

8 (a) IN GENERAL.—Section 47 of the Internal Rev9 enue Code of 1986 (relating to rehabilitation credit) is 


smartinez on DSK6TPTVN1PROD with BILLS
2 

•HR 2479 IH

1 amended by adding at the end the following new sub2 section: 

3 ‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER

4 PROJECTS.— 

5 ‘‘(1) IN GENERAL.—In the case of any qualified 

6 rehabilitated building or portion thereof— 

7 ‘‘(A) which is placed in service after the 

8 date of the enactment of this subsection, and 

9 ‘‘(B) which is a smaller project, 

10 subsection (a)(2) shall be applied by substituting ‘30 

11 percent’ for ‘20 percent’. 

12 ‘‘(2) MAXIMUM CREDIT.—The credit deter13 mined under this subsection with respect to any 

14 smaller project for all taxable years shall not exceed 

15 $1,500,000. 

16 ‘‘(3) SMALLER PROJECT DEFINED.— 

17 ‘‘(A) IN GENERAL.—For purposes of this 

18 subsection, the term ‘smaller project’ means 

19 any qualified rehabilitated building or portion 

20 thereof if— 

21 ‘‘(i) the qualified rehabilitation ex22 penditures taken into account for purposes 

23 of this section (or would have been so 

24 taken into account if this subsection had 

25 been in effect for all prior periods) with reVerDate Mar 15 2010 03:40 Jul 09, 2011 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2479.IH H2479

smartinez on DSK6TPTVN1PROD with BILLS
3 

•HR 2479 IH

1 spect to the rehabilitation are not over 

2 $7,500,000, and 

3 ‘‘(ii) no credit was allowed under this 

4 section for either of the 2 prior taxable 

5 years with respect to such building. 

6 ‘‘(B) PROGRESS EXPENDITURES.—Credit 

7 allowable by reason of subsection (d) shall not 

8 be taken into account under subparagraph 

9 (A)(ii).’’. 

10 (b) EFFECTIVE DATE.—The amendment made by 

11 this section shall apply to periods after the date of the 

12 enactment of this Act, under rules similar to the rules of 

13 section 48(m) of the Internal Revenue Code of 1986 (as 

14 in effect on the day before the date of the enactment of 

15 the Revenue Reconciliation Act of 1990). 

16 SEC. 3. ADDITION OF ENERGY EFFICIENCY SUPPLEMENT 

17 TO REHABILITATION CREDIT. 

18 (a) IN GENERAL.—Subsection (a) of section 47 of the 

19 Internal Revenue Code of 1986 is amended by striking 

20 ‘‘and’’ at the end of paragraph (1), by striking the period 

21 at the end of paragraph (2) and inserting ‘‘, and’’, and 

22 by adding at the end the following new paragraph: 

23 ‘‘(3) 2 percent of the qualified rehabilitation ex24 penditures if the building is a qualified energy effi25 cient rehabilitated building.’’. 


smartinez on DSK6TPTVN1PROD with BILLS
4 

•HR 2479 IH

1 (b) QUALIFIED ENERGY EFFICIENT REHABILITATED

2 BUILDING.—Section 47 of such Code, as amended by sec3 tion 2, is amended by adding at the end the following new 

4 subsection: 

5 ‘‘(f) QUALIFIED ENERGY EFFICIENT REHABILI6 TATED BUILDING.— 

7 ‘‘(1) IN GENERAL.—The term ‘qualified energy 

8 efficient rehabilitated building’ means any building 

9 (and its structural components) if— 

10 ‘‘(A) the building is a qualified rehabili11 tated building, and 

12 ‘‘(B)(i) the rehabilitation is certified (in 

13 accordance with paragraph (4)) as being de14 signed to achieve at least a 30 percent energy 

15 use reduction in the building’s energy use, or 

16 ‘‘(ii) the building meets the requirements 

17 of paragraph (2)(B)(ii) and is determined under 

18 paragraph (2)(B) to achieve at least a 30 per19 cent energy use reduction after being rehabili20 tated. 

21 ‘‘(2) DETERMINATION OF ENERGY USE REDUC22 TION.—For purposes of paragraph (1)— 

23 ‘‘(A) DESIGN-BASED STANDARDS.— 

24 ‘‘(i) BUILDINGS WITHIN THE SCOPE

25 OF STANDARD 90.1–2007.—If the building 


smartinez on DSK6TPTVN1PROD with BILLS
5 

•HR 2479 IH

1 is within the scope of Standard 90.1–2007, 

2 the designed reduction in energy use shall 

3 be determined using methods of calculation 

4 under paragraph (3) in comparison to a 

5 reference building which meets the min6 imum requirements of such standard. 

7 ‘‘(ii) RESNET BUILDINGS.—If the 

8 building is within the scope of RESNET, 

9 the designed reduction in energy use shall 

10 be determined using methods prescribed by 

11 the Secretary which are based on the Resi12 dential Energy Services Network Technical 

13 Guidelines. 

14 ‘‘(iii) OTHER BUILDINGS.—If neither 

15 clause (i) or (ii) apply to the building, the 

16 designed reduction in energy use shall be 

17 determined using methods of calculation 

18 prescribed by the Secretary in a manner 

19 which is consistent with principles under 

20 paragraph (3). 

21 ‘‘(B) MEASURED REDUCTIONS.— 

22 ‘‘(i) IN GENERAL.—In the case of 

23 buildings which meet the requirements of 

24 clause (ii), the taxpayer may determine the 

25 reduction in energy usage by comparing 


smartinez on DSK6TPTVN1PROD with BILLS
6 

•HR 2479 IH

1 the energy usage during the period selected 

2 by the taxpayer under clause (ii)(I) with 

3 the energy usage during the period selected 

4 by the taxpayer under clause (ii)(II). 

5 ‘‘(ii) BUILDING REQUIREMENTS.—A 

6 building meets the requirements of this 

7 clause if— 

8 ‘‘(I) the building is at least 75 

9 percent occupied during any period 

10 (but not less than 12 months) selected 

11 by the taxpayer which ends during the 

12 5-year period ending on the date that 

13 the rehabilitation begins, and 

14 ‘‘(II) the building is at least 75 

15 percent occupied during the com16 parable period selected by the tax17 payer which begins during the 5-year 

18 period beginning on the date that the 

19 rehabilitation is completed. 

20 ‘‘(iii) ENERGY STAR BUILDINGS.—The 

21 reduction in energy use for buildings with22 in the scope of Energy Start Portfolio 

23 Manager may be determined for purposes 

24 of this subparagraph by using the Energy 


smartinez on DSK6TPTVN1PROD with BILLS
7 

•HR 2479 IH

1 Star Portfolio Manager Buildings Bench2 mark Tool. 

3 ‘‘(iv) SPECIAL RULES.—The Secretary 

4 shall prescribe regulations which preclude 

5 the use of this subparagraph, or modify 

6 the methods otherwise applicable under 

7 this subparagraph, in circumstance where 

8 vacancies, changes in use, and other fac9 tors which might otherwise yield in materi10 ally misleading results. 

11 ‘‘(v) YEAR CREDIT ALLOWABLE.—In 

12 the case of a building which is a qualified 

13 energy efficient rehabilitated building sole14 ly by reason of this subparagraph, the in15 crease in the credit under subsection (a)(3) 

16 with respect to such building shall be 

17 taken into account for the taxable year 

18 which includes the end of the period se19 lected by the taxpayer under clause (ii)(II) 

20 in lieu of the taxable year in which the re21 habilitated building is placed in service. 

22 ‘‘(3) METHODS OF CALCULATIONS.— 

23 ‘‘(A) IN GENERAL.—The Secretary, after 

24 consultation with the Secretary of Energy, shall 

25 promulgate regulations which describe in detail 


smartinez on DSK6TPTVN1PROD with BILLS
8 

•HR 2479 IH

1 methods for calculating and verifying energy 

2 and power consumption and cost, based on Ap3 pendix G of Standard 90.1–2007 (or any subse4 quent version of such Appendix which is in ef5 fect at the time of the certification). 

6 ‘‘(B) COMPUTER SOFTWARE.— 

7 ‘‘(i) IN GENERAL.—Any calculation 

8 under subparagraph (A) shall be prepared 

9 by qualified computer software. 

10 ‘‘(ii) QUALIFIED COMPUTER SOFT11 WARE.—For purposes of subparagraph 

12 (A), the term ‘qualified computer software’ 

13 means software— 

14 ‘‘(I) which is included (at the 

15 time of the certification) on the pub16 lished list of qualified software by the 

17 Department of Energy, and 

18 ‘‘(II) which provides such infor19 mation as the Secretary may require, 

20 including information that allows the 

21 user to document the energy efficiency 

22 features of the building and its pro23 jected annual energy costs, and 

24 ‘‘(III) which provides standard25 ized outputs for building energy perVerDate Mar 15 2010 03:40 Jul 09, 2011 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2479.IH H2479

smartinez on DSK6TPTVN1PROD with BILLS
9 

•HR 2479 IH

1 formance and, to the maximum extent 

2 practicable, relies on industry best 

3 practices and existing guidelines. 

4 ‘‘(4) CERTIFICATIONS.— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 prescribe the manner and method for the mak7 ing of certifications under this subsection. 

8 ‘‘(B) PROCEDURES.—The Secretary shall 

9 include as part of the certification process pro10 cedures for inspection and testing by qualified 

11 individuals described in subparagraph (C) to 

12 ensure compliance of buildings with energy-sav13 ings plans and targets. Such procedures shall 

14 be comparable, given the difference between 

15 commercial and residential buildings, to the re16 quirements in the Mortgage Industry National 

17 Accreditation Procedures for Home Energy 

18 Rating Systems. 

19 ‘‘(C) QUALIFIED INDIVIDUALS.—Individ20 uals qualified to determine compliance shall be 

21 only those individuals who are recognized by an 

22 organization certified by the Secretary for such 

23 purposes. For purposes of the preceding sen24 tence, an individual shall not be qualified with 

25 respect to a building unless the individual is— 


smartinez on DSK6TPTVN1PROD with BILLS
10 

•HR 2479 IH

1 ‘‘(i) a registered professional engineer, 

2 ‘‘(ii) not a direct employee of the 

3 owner of the commercial building or multi4 family building, and 

5 ‘‘(iii) licensed in the State in which 

6 such building is located. 

7 ‘‘(5) STANDARD 90.1–2007.—For purposes of 

8 this subsection, the term ‘Standard 90.1–2007’ 

9 means Standard 90.1–2007 of the American Society 

10 of Heating, Refrigerating, and Air Conditioning En11 gineers and the Illuminating Engineering Society of 

12 North America (or any subsequent version of such 

13 Standard which is in effect at the time of the certifi14 cation). 

15 ‘‘(6) ALLOCATION OF CREDIT FOR TAX-EXEMPT

16 PROPERTY.—Paragraphs (3) and (4) of section 

17 50(b), and clause (v) of subsection (c)(2)(B), shall 

18 not apply to those qualified rehabilitation expendi19 tures that are taken into account for purposes of 

20 certifying a building as a qualified energy efficient 

21 rehabilitated building under subsection (f). Any re22 habilitation credit which is allowable by reason of 

23 the preceding sentence may be assigned to any other 

24 person, and such other person shall be treated as the 

25 taxpayer with respect thereto. 


smartinez on DSK6TPTVN1PROD with BILLS
11 

•HR 2479 IH

1 ‘‘(7) COORDINATION.—The Secretary shall des2 ignate processes for tracking the numbers and loca3 tions of buildings claiming the rehabilitation by rea4 son of this subsection, as well as providing informa5 tion on projected and actual savings of energy and 

6 its value over time in coordination with the Depart7 ment of Energy. 

8 ‘‘(8) REGULATIONS.—The Secretary, after con9 sultation with the Administrator of the Environ10 mental Protection Agency and the Secretary of the 

11 Interior, shall promulgate such regulations as may 

12 be necessary or appropriate to carry out the pur13 poses of this subsection, including regulations— 

14 ‘‘(A) to take into account new technologies 

15 regarding energy efficiency and renewable en16 ergy for purposes of determining energy effi17 ciency and savings under this subsection, and 

18 ‘‘(B) to provide for a recapture of the cred19 it determined under this subsection if the de20 sign referred to in paragraph (1)(B) is not fully 

21 implemented.’’. 

22 (c) SUBSTANTIAL REHABILITATION REQUIREMENT

23 NOT TO APPLY TO ENERGY EFFICIENCY SUPPLEMENT.— 

24 Subparagraph (A) of section 47(c)(1) of such Code (definVerDate Mar 15 2010 03:40 Jul 09, 2011 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2479.IH H2479

smartinez on DSK6TPTVN1PROD with BILLS
12 

•HR 2479 IH

1 ing qualified rehabilitated building) is amended by adding 

2 at the end the following new flush sentence: 

3 ‘‘Clause (i) shall not apply to so much of the rehabili4 tation credit as is determined under subsection (a)(3).’’. 

5 (d) EFFECTIVE DATES.— 

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the amendments made by this section 

8 shall apply to property placed in service after the 

9 date of the enactment of this Act. 

10 (2) WAIVER OF SUBSTANTIAL REHABILITATION

11 REQUIREMENT.—The waiver of the requirement of 

12 section 47(c)(1)(A)(i) of the Internal Revenue Code 

13 of 1986 made by section 47(f)(1)(A) of such Code, 

14 as added by this Act, shall apply with respect to re15 habilitations the physical work on which begins after 

16 the date of the enactment of this Act. 

17 SEC. 4. MODIFICATION TO DEFINITION OF QUALIFIED RE18 HABILITATION EXPENDITURE. 

19 (a) IN GENERAL.—Clause (i) of section 47(c)(2)(A) 

20 of the Internal Revenue Code of 1986 (relating to the defi21 nition of qualified rehabilitation expenditures) is amended 

22 by striking ‘‘or’’ at the end of subclause (III), by striking 

23 subclause (IV), and by inserting after subclause (III) the 

24 following new subclauses: 


smartinez on DSK6TPTVN1PROD with BILLS
13 

•HR 2479 IH

1 ‘‘(IV) rehabilitated building en2 ergy efficiency property, or 

3 ‘‘(V) an addition or improvement 

4 to property described in subclause (I), 

5 (II), (III), or (IV), and’’. 

6 (b) REHABILITATED BUILDING ENERGY EFFICIENCY

7 PROPERTY.—Section 47(c)(2) of such Code is amended by 

8 adding at the end the following new subparagraph: 

9 ‘‘(E) REHABILITATED BUILDING ENERGY

10 EFFICIENCY PROPERTY.— 

11 ‘‘(i) IN GENERAL.—For purposes of 

12 subparagraph (A), the term ‘rehabilitated 

13 building energy efficiency property’ means 

14 property which is certified as being— 

15 ‘‘(I) affixed to, adjacent to, or in16 tegral to the provision of renewable 

17 energy to a qualified rehabilitated 

18 building, or 

19 ‘‘(II) installed as part of a plan 

20 designed to achieve any qualified en21 ergy use reduction (as defined in sub22 section (e)(4)) or a reduction in water 

23 use. 


smartinez on DSK6TPTVN1PROD with BILLS
14 

•HR 2479 IH

1 Subparagraph (B)(i) shall not apply to re2 habilitated building energy efficiency prop3 erty. 

4 ‘‘(ii) CERTIFICATION.—The Secretary 

5 shall prescribe the manner and method for 

6 the making of certifications under clause 

7 (i).’’. 

8 (c) ENLARGEMENTS.—Clause (iii) of section 

9 47(c)(2)(B) of such Code is amended by adding at the 

10 end the following new sentence: ‘‘The preceding sentence 

11 shall not apply to any rehabilitated building energy effi12 ciency property which is an addition or improvement to 

13 a building.’’. 

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

15 this section shall apply to qualified rehabilitated buildings 

16 placed in service after the date of the enactment of this 

17 Act. 

18 SEC. 5. COORDINATION OF ENERGY CREDIT WITH REHA19 BILITATION CREDIT. 

20 (a) IN GENERAL.—Paragraph (2) of section 48(a) of 

21 the Internal Revenue Code of 1986 is amended by striking 

22 subparagraph (B). 

23 (b) BASIS REDUCTION.—Paragraph (3) of section 

24 50(c) of such Code is amended by adding at the end the 

25 following new flush sentence: ‘‘In the case of property that 


smartinez on DSK6TPTVN1PROD with BILLS
15 

•HR 2479 IH

1 qualifies for both the energy credit and the rehabilitation 

2 credit, the preceding sentence shall be applied by sub3 stituting ‘none’ for ‘only 50 percent’ each place it ap4 pears.’’. 

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

6 this section shall apply to property placed in service after 

7 the date of the enactment of this Act. 

8 SEC. 6. DATE BY WHICH BUILDING MUST BE FIRST PLACED 

9 IN SERVICE. 

10 (a) IN GENERAL.—Subparagraph (B) of section 

11 47(c)(1) of the Internal Revenue Code of 1986 (relating 

12 to the date by which building must be first placed in serv13 ice) is amended— 

14 (1) by striking ‘‘BUILDING MUST BE FIRST

15 PLACED IN SERVICE BEFORE 1936’’ and inserting 

16 ‘‘DATE BY WHICH BUILDING MUST FIRST BE

17 PLACED IN SERVICE’’, and 

18 (2) by striking ‘‘before 1936’’ and inserting ‘‘no 

19 less than 50 years prior to the year in which quali20 fied rehabilitation expenditures are taken into ac21 count under subsection (b)(1)’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to property placed in service after 

24 the date of the enactment of this Act. 


smartinez on DSK6TPTVN1PROD with BILLS
16 

•HR 2479 IH

1 SEC. 7. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT 

2 USE PROPERTY. 

3 (a) IN GENERAL.—Clause (I) of section 

4 47(c)(2)(B)(v) of the Internal Revenue Code of 1986 (re5 lating to tax-exempt use property) is amended by inserting 

6 ‘‘and subclauses (I), (II), and (III) of section 

7 168(h)(1)(B)(ii) shall not apply’’ after ‘‘thereof’’. 

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

9 this section shall apply to property placed in service after 

10 the date of the enactment of this Act. 

11 SEC. 8. SPECIAL RULES FOR DISPOSITIONS OF STATE HIS12 TORIC TAX CREDITS. 

13 (a) IN GENERAL.—Part III of subchapter B of chap14 ter 1 of the Internal Revenue Code of 1986 (relating to 

15 items specifically excluded from gross income) is amended 

16 by inserting after section 139D the following new section: 

17 ‘‘SEC. 139E. DISPOSITIONS OF STATE HISTORIC TAX CRED18 ITS. 

19 ‘‘(a) EXCLUSION FROM INCOME; BASIS REDUC20 TION.— 

21 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

22 who receives a State historic tax credit and transfers 

23 such credit by sale, allocation, or otherwise, or re24 ceives a refund of all or a portion of such credit, no 

25 portion of the net proceeds of such allocation, disVerDate Mar 15 2010 03:40 Jul 09, 2011 Jkt 099200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\H2479.IH H2479

smartinez on DSK6TPTVN1PROD with BILLS
17 

•HR 2479 IH

1 position, or refund of such credit shall constitute in2 come to such taxpayer under section 61(a). 

3 ‘‘(2) DETERMINATION OF REDUCTION IN

4 BASIS.—The reduction in basis under paragraph (1) 

5 shall be applied— 

6 ‘‘(A) first, against the basis in the land, 

7 ‘‘(B) second, against so much of the basis 

8 of any building or interest therein as was not 

9 treated as a qualified rehabilitation expenditure 

10 by reason of clause (ii) or (iii) of section 

11 47(c)(2)(B), and 

12 ‘‘(C) third, against the remaining basis in 

13 the property. 

14 ‘‘(D) ADJUSTMENT IN BASIS OF INTEREST

15 IN PARTNERSHIP OR S CORPORATION.—The ad16 justed basis of— 

17 ‘‘(i) a partner’s interest in a partner18 ship, or 

19 ‘‘(ii) stock in an S corporation (as de20 fined in section 1361(a)(1)), 

21 shall be appropriately adjusted to take into ac22 count adjustments made under this subsection 

23 in the basis of property held by the partnership 

24 or S corporation (if any). 

25 ‘‘(b) ELECTION TO INCLUDE IN INCOME.— 


smartinez on DSK6TPTVN1PROD with BILLS
18 

•HR 2479 IH

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

2 who elects to have this subsection apply, the net pro3 ceeds of the allocation, disposition, or refund de4 scribed in subsection (a) received by such taxpayer 

5 shall constitute income to such taxpayer under sec6 tion 61(a). 

7 ‘‘(2) MAKING OF ELECTION.—An election under 

8 this subsection shall be made at such time and in 

9 such manner as the Secretary of the Treasury may 

10 by regulation prescribe. Such election shall apply for 

11 the taxable year for which it is made and for all sub12 sequent taxable years and may be revoked only with 

13 the consent of the Secretary of the Treasury. 

14 ‘‘(c) EFFECT ON QUALIFIED REHABILITATION EX15 PENDITURES AND REHABILITATION CREDITS.—For pur16 poses of determining the rehabilitation credit allowable to 

17 a taxpayer under section 47, the transfer or allocation of 

18 State historic tax credits with respect to any property by 

19 a taxpayer shall not affect or reduce the amount of quali20 fied rehabilitation expenditures (as defined in section 

21 47(c)(2)) incurred in connection with such property, nor 

22 shall such transfer or disposition, nor any basis adjust23 ments under subsection (a), be treated as an early disposi24 tion of investment credit property for purposes of the re25 capture provisions of section 50. 


smartinez on DSK6TPTVN1PROD with BILLS
19 

•HR 2479 IH

1 ‘‘(d) STATE HISTORIC TAX CREDITS DEFINED.—For 

2 purposes of this section, the term ‘State historic tax credit’ 

3 means any credit against State or local tax liabilities 

4 which— 

5 ‘‘(1) is allowable under the laws of any State or 

6 political subdivision thereof to a taxpayer with re7 spect to expenditures made for the rehabilitation of 

8 property identified by such laws, and 

9 ‘‘(2) can be allocated, disposed, or refunded 

10 under such laws.’’. 

11 (b) CLERICAL AMENDMENT.—The table of sections 

12 for such part III is amended by inserting after the item 

13 relating to section 139D the following new item: 

‘‘Sec. 139E. Dispositions of State historic tax credits.’’. 

14 (c) EFFECTIVE DATE.—This section shall apply to 

15 transfers or dispositions made, or refunds received, after 

16 the date of the enactment of this Act. 

Æ 


smartinez on DSK6TPTVN1PROD with BILLS