Rebuilding and Renewing Rural America Act of 2016

To amend the Internal Revenue Code of 1986 to help rebuild and renew rural communities, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Rebuilding and Renewing Rural America Act of 2016 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Revitalizing Rural Communities Subtitle A—Philanthropic Facilitation Sec. 101. Facilitation of program-related investments. Sec. 102. Declaratory judgment remedy. Sec. 103. Information returns. Sec. 104. Publicity of information. Sec. 105. Conforming amendments. Sec. 106. Regulations. Sec. 107. Effective date. Subtitle B—Rebuilding Rural Main Street Sec. 111. Tax credits for reduction of lead, radon, and asbestos hazards in rural commercial structures. Subtitle C—Renewing rural America Sec. 121. Additional new markets tax credit for rural renewal communities. Subtitle D—Job creator credits Sec. 131. Expensing for rural renewal community businesses. Sec. 132. Reduced payroll taxes for individuals and businesses in rural renewal communities. Subtitle E—Encouraging small business start ups Sec. 141. Renewal community business start-up savings accounts. TITLE II—Setting Rural America Free from Overregulation Sec. 201. Short title. Sec. 202. Reducing excessive Government in rural America. I Revitalizing Rural Communities A Philanthropic Facilitation 101. Facilitation of program-related investments Subsection (c) of section 4944 (c) Program-Related investments (1) Treatment of program-related investments For purposes of this subchapter, program-related investments— (A) are not investments which jeopardize the carrying out of one or more purposes described in section 170(c)(2)(B), (B) are not business holdings under section 4943, and (C) may be qualifying distributions under section 4942. (2) Program-related investments defined (A) In general For purposes of this subchapter and chapter 61, an investment made by a private foundation constitutes a program-related investment if— (i) the primary purpose of the investment is to accomplish one or more of the purposes described in section 170(c)(2)(B), (ii) no significant purpose of the investment is the production of income or the appreciation of property, and (iii) no purpose of the investment is to accomplish one or more of the purposes described in section 170(c)(2)(D). (B) Special rules For purposes of subparagraph (A)— (i) determinations of whether an investment qualifies as a program-related investment shall be based on consideration of all relevant facts and circumstances, and (ii) the fact that the entity produces significant income or capital appreciation shall not, in the absence of other factors, be conclusive evidence of a significant purpose involving the production of income or the appreciation of property. (3) Safe harbor determinations The Secretary shall establish a procedure which shall be substantially similar to the processes for recognition of exemption under section 501(a) or 4945(g) and under which an entity seeking to receive program-related investments may petition the Secretary for a determination that, based on consideration of all relevant facts and circumstances, investments by private foundations in such entity will be program-related investments meeting the requirements of paragraph (2). Under this procedure, the Secretary shall rule on all requests within 120 days of submission. (4) Effect of determination Once a determination has been made that investments in an entity qualify as program-related investments, organizations making such investments shall be entitled to rely on the determination, unless and until the Secretary publishes notice of revocation of the determination. (5) Voluntary nature of process Entities seeking program-related investments are not required to seek a determination under paragraph (3), and the absence of such a determination shall not affect the ability of a private foundation to make a program-related investment based on its own determination that the investment qualifies as a program-related investment. (6) Organizations treated as private foundations For purposes of this subsection and section 6104A, all references to private foundations include organizations that are treated as private foundations under any of the provisions of sections 4940 through 4948, inclusive, whether created under State law or the law of any federally recognized tribe. . 102. Declaratory judgment remedy Paragraph (1) of section 7428(a) or (E) with respect to whether investments in an entity are program-related investments (as described in section 4944(c)(2)), or . 103. Information returns Part III of subchapter A of chapter 61 6033A. Information reporting by for-profit organizations receiving program-related investments (a) Organizations required To file If investments in an entity have been determined to be program-related investments through a determination of the Internal Revenue Service pursuant to section 4944(c)(3) or by a determination of a court pursuant to section 7428(a), the entity shall, in addition to any other applicable filing obligations, file an annual return providing the information specified in subsection (b) for any taxable year in which it receives or retains one or more program-related investments (as defined in section 4944(c)(2)). (b) Required reporting The return described in subsection (a) shall provide, in such manner and at such time as the Secretary may by forms or regulations prescribe, the following information— (1) the organization’s gross income for the year, (2) its expenses attributable to such income incurred within the year, (3) its disbursements within the year for one or more purposes described in section 170(c)(2)(B), together with a narrative statement describing the results obtained from the use of those assets for such one or more purposes described in section 170(c)(2)(B), (4) a balance sheet showing its assets, liabilities, and net worth as of the beginning and end of such year, (5) the names and addresses of all private foundations holding program-related investments in the organization, (6) a statement of the portion of its liabilities and net worth that represent capitalization obtained by means of program-related investments as of the beginning and end of such year, (7) a statement of any interest, dividends, or other distributions paid with respect to any program-related investments during the year, and (8) such other information as may be necessary for the return described in subsection (a) to satisfy the annual financial reporting required by the expenditure responsibility rules pursuant to the regulations under section 4945 or as the Secretary may by forms or regulations prescribe. . 104. Publicity of information Subchapter B of chapter 61 6104A. Publicity of information regarding organizations receiving program-related investments (a) Inspection of petitions for determination of program-Related investment status If an entity seeks a determination pursuant to section 4944(c)(3) that investments by private foundations in such organization will be program-related investments, the petition seeking such a determination, together with any documents submitted in support of such petition and any determination or other document issued by the Internal Revenue Service with respect to such petition, shall be open to public inspection at the national office of the Internal Revenue Service. (b) Inspection of annual information returns The information required to be furnished by section 6033A, together with the names and addresses of such entity, shall be made available to the public at such times and in such places as the Secretary may prescribe. (c) Public inspection of petitions and annual information returns Any entity that receives a determination from the Internal Revenue Service that private foundation investments shall be program-related investments pursuant to section 4944(c)(3) shall make copies available at the organization’s principal office, during regular business hours, of the petition for such determination (together with supporting materials provided with the petition and documents issued by the Internal Revenue Service with respect to such petition), as well as the annual returns required by section 6033A filed by such organization. Upon request of an individual made at such principal office, copies of such petition materials and annual reports shall be provided to such individual without charge other than a reasonable fee for any reproduction and mailing costs. The inspection and duplication rights granted in this subsection shall apply to an annual return only during the three-year period beginning on the last day prescribed for filing such return (determined with regard to any extension of time for filing). (d) Limitation on providing copies Paragraph (c) shall not apply to any request if, in accordance with regulations promulgated by the Secretary, the entity has made the requested documents widely available, or the Secretary determines, upon application by an entity, that such request is part of a harassment campaign and that compliance with such request is not in the public interest. . 105. Conforming amendments (a) Conforming change to section 501( n Paragraph (4)(A) of section 501(n) paragraph (2) of section 4944(c). (b) Conforming change to section 514( b Paragraph (1) of section 514(b) (D) any property owned or treated as owned by a private foundation by virtue of its having made an investment in an entity that has received a determination from the Internal Revenue Service pursuant to section 4944(c)(3), or by a court pursuant to section 7428(a), that such investments in such entity qualify as program-related investments; . (c) Conforming change to section 4943( d Paragraph (3) of section 4943(d) or (B) any program-related investment, as defined in section 4944(c)(2), or . 106. Regulations The Secretary of the Treasury shall, not later than 1 year after the date of the enactment of this Act, amend any applicable regulations as may be necessary or appropriate to implement any amendments contained in this subtitle or to carry out the purposes of this subtitle, including providing additional examples of qualifying program-related investments. 107. Effective date The amendments made by this subtitle shall apply to investments made after the date of the enactment of this Act in taxable years ending after such date. B Rebuilding Rural Main Street 111. Tax credits for reduction of lead, radon, and asbestos hazards in rural commercial structures (a) In general Subpart D of part IV of subchapter A of chapter 1 45S. Lead hazard reduction activity (a) Allowance of credit There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 10 percent of the lead hazard reduction activity cost paid or incurred by the taxpayer during the taxable year for each eligible commercial structure. (b) Limitation The amount of the credit allowed under subsection (a) for any eligible commercial structure for any taxable year shall not exceed $1,000. (c) Definitions For purposes of this section: (1) Certified lead abatement supervisor The term certified lead abatement supervisor (2) Certified inspector The term certified inspector (3) Certified risk assessor The term certified risk assessor (4) Eligible commercial structure The term eligible commercial structure (A) within the scope of Standard 90.1–2007 (as defined in section 179(c)(2)), (B) placed in service before 2002, and (C) located in a rural renewal community (as defined in section 45D(f)(4)(C)). (5) Lead hazard reduction activity cost (A) In general The term lead hazard reduction activity cost (i) the cost for a certified risk assessor to conduct an assessment to determine the presence of lead pipes or a lead-based paint hazard, (ii) the cost for performing lead abatement measures by a certified lead abatement supervisor, including the removal of lead pipes, the removal of paint and dust, the permanent enclosure or encapsulation of lead-based paint, the replacement of painted surfaces, windows, or fixtures, or the removal or permanent covering of soil when lead-based paint hazards are present in such paint, dust, or soil, and (iii) the cost for a certified lead abatement supervisor, those working under the supervision of such supervisor, or a qualified contractor to perform all preparation, cleanup, disposal, and clearance testing activities associated with the lead abatement measures. (B) Limitations (i) Other funding The term lead hazard reduction activity cost (ii) Initial costs must be incurred before 2020 In the case of an eligible commercial structure for which no significant lead hazard reduction activity cost has been incurred before January 1, 2020, the term lead hazard reduction activity cost (6) Lead-based paint hazard The term lead-based paint hazard (7) Qualified contractor The term qualified contractor (d) Special rules (1) Documentation required for credit allowance No credit shall be allowed under subsection (a) with respect to any eligible commercial structure for any taxable year unless— (A) after lead hazard reduction activity is complete, a certified inspector or certified risk assessor provides written documentation to the taxpayer that includes— (i) evidence that the eligible commercial structure meets lead hazard evaluation criteria established by the Environmental Protection Agency or under an authorized State or local program, and (ii) documentation showing that the lead hazard reduction activity meets the requirements of this section, and (B) the taxpayer files with the appropriate State agency and attaches to the tax return for the taxable year— (i) the documentation described in subparagraph (A), (ii) documentation of the lead hazard reduction activity costs paid or incurred during the taxable year with respect to the eligible commercial structure, and (iii) a statement certifying that the commercial structure qualifies as an eligible commercial structure for such taxable year. (2) Basis reduction The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit. (3) No double benefit Any deduction allowable for costs taken into account in computing the amount of the credit for lead-based paint abatement shall be reduced by the amount of such credit attributable to such costs. 45T. Radon hazard reduction activity (a) Allowance of credit There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 10 percent of the radon hazard reduction activity cost paid or incurred by the taxpayer during the taxable year for each eligible commercial structure. (b) Limitation The amount of the credit allowed under subsection (a) for any eligible commercial structure for any taxable year shall not exceed $1,000. (c) Definitions For purposes of this section: (1) Eligible commercial structure The term eligible commercial structure (A) within the scope of Standard 90.1–2007 (as defined in section 179(c)(2)), (B) placed in service before 2002, and (C) located in a rural renewal community (as defined in section 45D(f)(4)(C)). (2) Qualified radon measurement professional The term qualified radon measurement professional (A) a certification standard promulgated by the American National Standards Institute or International Organization for Standardization, (B) a State, local or other governmental licensing (or equivalent) program, or (C) any other recognized or accredited certification process as determined by the Secretary. (3) Qualified radon mitigation professional The term qualified radon mitigation professional (A) a certification standard promulgated by the American National Standards Institute or International Organization for Standardization, (B) a State, local or other governmental licensing (or equivalent) program, or (C) any other recognized or accredited certification process as determined by the Secretary. (4) Radon The term radon Toxic Substances Control Act 15 U.S.C. 2662 (5) Radon hazard reduction activity cost (A) In general The term radon hazard reduction activity cost (i) the cost for a qualified radon measurement professional to conduct an assessment to determine the indoor radon level of the commercial structure, and (ii) if the indoor radon level of the commercial structure is not less than 2 picocuries per liter of air, as determined by a qualified radon measurement professional, the cost for performing radon abatement measures by a qualified radon mitigation professional. (B) Limitations (i) Other funding The term radon hazard reduction activity cost (ii) Initial costs must be incurred before 2020 In the case of an eligible commercial structure for which no significant radon hazard reduction activity cost has been incurred before January 1, 2020, the term radon hazard reduction activity cost (d) Special rules (1) Documentation required for credit allowance No credit shall be allowed under subsection (a) with respect to any eligible commercial structure for any taxable year unless— (A) after radon hazard reduction activity is complete, a qualified radon measurement professional provides written documentation to the taxpayer that includes— (i) evidence that the eligible commercial structure meets radon hazard evaluation criteria established under an authorized State or local program, and (ii) documentation showing that the radon hazard reduction activity meets the requirements of this section, and (B) the taxpayer files with the appropriate State agency and attaches to the tax return for the taxable year— (i) the documentation described in subparagraph (A), (ii) documentation of the radon hazard reduction activity costs paid or incurred during the taxable year with respect to the eligible commercial structure, and (iii) a statement certifying that the commercial structure qualifies as an eligible commercial structure for such taxable year. (2) Basis reduction The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit. (3) No double benefit Any deduction allowable for costs taken into account in computing the amount of the credit for radon abatement shall be reduced by the amount of such credit attributable to such costs. 45U. Asbestos hazard reduction activity (a) Allowance of credit There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 10 percent of the asbestos hazard reduction activity cost paid or incurred by the taxpayer during the taxable year for each eligible commercial structure. (b) Limitation The amount of the credit allowed under subsection (a) for any eligible commercial structure for any taxable year shall not exceed $1,000. (c) Definitions For purposes of this section: (1) Accredited asbestos abatement contractor or supervisor The term accredited asbestos abatement contractor or supervisor (2) Accredited asbestos inspector The term accredited asbestos inspector (3) Asbestos The term asbestos Toxic Substances Control Act 15 U.S.C. 2642 (4) Asbestos hazard The term asbestos hazard imminent hazard to the health and safety 20 U.S.C. 3610 (5) Asbestos hazard reduction activity cost (A) In general The term asbestos hazard reduction activity cost (i) the cost for an accredited asbestos inspector to conduct an assessment to determine the presence of a asbestos hazard, (ii) the cost for performing asbestos abatement measures by an accredited asbestos abatement contractor or supervisor, (iii) the cost for performing interim asbestos control measures to reduce exposure or likely exposure to asbestos hazards, but only if such measures are evaluated and completed by an accredited asbestos abatement contractor or supervisor using accepted methods, are conducted by an accredited asbestos abatement contractor or supervisor, and have an expected useful life of more than 10 years, and (iv) the cost for an accredited asbestos abatement supervisor, those working under the supervision of such supervisor, or an accredited asbestos abatement contractor or supervisor to perform all preparation, cleanup, disposal, and clearance testing activities associated with the asbestos abatement measures or interim asbestos control measures. (B) Limitations (i) Other funding The term asbestos hazard reduction activity cost (ii) Initial costs must be incurred before 2020 In the case of an eligible commercial structure for which no significant asbestos hazard reduction activity cost has been incurred before January 1, 2020, the term asbestos hazard reduction activity cost (6) Eligible commercial structure The term eligible commercial structure (A) within the scope of Standard 90.1–2007 (as defined in section 179(c)(2)), (B) placed in service before 2002, and (C) located in a rural renewal community (as defined in section 45D(f)(4)(C)). (d) Special rules (1) Documentation required for credit allowance No credit shall be allowed under subsection (a) with respect to any eligible commercial structure for any taxable year unless— (A) after asbestos hazard reduction activity is complete, an accredited asbestos inspector provides written documentation to the taxpayer that includes— (i) evidence that the eligible commercial structure meets asbestos hazard evaluation criteria established under an authorized State or local program, and (ii) documentation showing that the asbestos hazard reduction activity meets the requirements of this section, and (B) the taxpayer files with the appropriate State agency and attaches to the tax return for the taxable year— (i) the documentation described in subparagraph (A), (ii) documentation of the asbestos hazard reduction activity costs paid or incurred during the taxable year with respect to the eligible commercial structure, and (iii) a statement certifying that the commercial structure qualifies as an eligible commercial structure for such taxable year. (2) Basis reduction The basis of any property for which a credit is allowable under subsection (a) shall be reduced by the amount of such credit. (3) No double benefit Any deduction allowable for costs taken into account in computing the amount of the credit for asbestos abatement shall be reduced by the amount of such credit attributable to such costs. . (b) Technical amendments (1) Section 38(b) is amended— (A) in paragraph (35), by striking plus (B) in paragraph (36), by striking the period at the end and inserting a comma, and (C) by adding at the end the following new paragraphs: (37) the lead hazard reduction activity credit determined under section 45S(a), (38) the radon hazard reduction activity credit determined under section 45T(a), plus (39) the asbestos hazard reduction activity credit determined under section 45U(a). . (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new items: Sec. 45S. Lead hazard reduction activity. Sec. 45T. Radon hazard reduction activity. Sec. 45U. Asbestos hazard reduction activity. . (c) Effective date The amendments made by this section shall apply to costs incurred after December 31, 2016, in taxable years ending after that date. C Renewing rural America 121. Additional new markets tax credit for rural renewal communities (a) Allocations designated for rural renewal Section 45D(f) (4) Additional limitation for rural renewal communities (A) In general The new markets tax credit limitation otherwise determined under paragraph (1) shall be increased by $3,500,000,000 for 2017, 2018, and 2019. A qualified community development entity shall be eligible for an allocation under paragraph (2) of the increase described in the preceding sentence only if a significant mission of such entity is serving, or providing investment capital for, rural renewal communities. (B) Application of carryover Paragraph (3) shall be applied separately with respect to the increase provided under this paragraph. (C) Rural renewal community For purposes of this paragraph, the term rural renewal community (i) which— (I) has a population of at least 200 people but not more than 25,000 people, and (II) is not located in a metropolitan area which has a population of 200,000 or more, or (ii) which is entirely within an Indian reservation (as determined by the Secretary of the Interior). . (b) Effective date The amendment made by this section shall apply to calendar years beginning after December 31, 2016. D Job creator credits 131. Expensing for rural renewal community businesses (a) In general Part IV of subchapter B of chapter 1 179F. Expensing for rural renewal community businesses (a) In general A rural renewal community business may elect to treat the cost of any qualified property as property which is not chargeable to capital account. Any cost so treated shall be allowed as a deduction for the taxable year in which the qualified property is placed in service. (b) Qualified property For purposes of this section, the term qualified property (1) which is— (A) tangible property (to which section 168 applies), or (B) computer software (as defined in section 197(e)(3)(B)) which is described in section 197(e)(3)(A)(i) and to which section 167 applies, (2) which is section 1245 property (as defined in section 1245(a)(3)), and (3) which is acquired by purchase (as defined in section 179(d)(2)) for use in the active conduct of a trade or business. Such term shall not include any property described in section 50(b). (c) Rural renewal community business For purposes of this section— (1) In general The term rural renewal community business (A) any rural renewal community business entity, and (B) any rural renewal community proprietorship. (2) Rural renewal community business entity The term rural renewal community business entity (A) every trade or business of such entity is the active conduct of a qualified business within a rural renewal community, (B) at least 50 percent of the total gross income of such entity is derived from the active conduct of such business, (C) a substantial portion of the use of the tangible property of such entity (whether owned or leased) is within an rural renewal community, (D) a substantial portion of the intangible property of such entity is used in the active conduct of any such business, (E) a substantial portion of the services performed for such entity by its employees are performed in a rural renewal community, (F) at least 35 percent of its employees are residents of a rural renewal community, (G) less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and (H) less than 5 percent of the average of the aggregate unadjusted bases of the property of such entity is attributable to nonqualified financial property (as defined in section 1397C(e)). (3) Rural renewal community proprietorship The term rural renewal community proprietorship (A) at least 50 percent of the total gross income of such individual from such business is derived from the active conduct of such business in a rural renewal community, (B) a substantial portion of the use of the tangible property of such individual in such business (whether owned or leased) is within a rural renewal community, (C) a substantial portion of the intangible property of such business is used in the active conduct of such business, (D) a substantial portion of the services performed for such individual in such business by employees of such business are performed in a rural renewal community, (E) at least 35 percent of such employees are residents of a rural renewal community, (F) less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to collectibles (as defined in section 408(m)(2)) other than collectibles that are held primarily for sale to customers in the ordinary course of such business, and (G) less than 5 percent of the average of the aggregate unadjusted bases of the property of such individual which is used in such business is attributable to nonqualified financial property. For purposes of this paragraph, the term employee (4) Rural renewal community The term rural renewal community (5) Treatment of businesses straddling census tract lines For purposes of paragraphs (2) and (3), rules similar to the rules of section 1397C(f) shall apply. (d) Special rules For purposes of this section— (1) Cost Rules similar to the rules of section 179(d)(3) shall apply. (2) Recapture Rules similar to the rules of section 179(d)(10) shall apply. (e) Termination This section shall not apply to property placed in service after December 31, 2019. . (b) Conforming amendments (1) Section 263(a)(1) or , or (M) expenditures for which a deduction is allowed under section 179F. . (2) Subparagraph (B) of section 312(k)(3) is amended by striking or 179E 179E, or 179F (3) Paragraphs (2)(C) and (3)(C) of section 1245(a) of such Code are each amended by inserting 179F, 179E, (4) The table of contents for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 179E the following new item: Sec. 179F. Expensing for rural renewal community businesses. . (c) Effective date The amendments made by this section shall apply to property placed in service after December 31, 2016. 132. Reduced payroll taxes for individuals and businesses in rural renewal communities (a) In General (1) Employees In the case of employment during 2017, 2018, and 2019, the rate of tax under 3101(a) of the Internal Revenue Code of 1986 (including for purposes of determining the applicable percentage under sections 3201(a) and 3211(a)(1) of such Code) shall be 4.2 percent for any remuneration received during any period in which the individual's principal residence (within the meaning of section 121 of such Code) is located in a rural renewal community. (2) Employers (A) In general In the case of employment during 2017, 2018, and 2019, the rate of tax under section 3111(a) (B) Qualified services For purposes of this section, the term qualified services (i) in a trade or business of a rural renewal community business entity, or (ii) in the case of a rural renewal community business entity exempt from tax under section 501(a) (3) Self-employed individuals In the case of self-employment income for taxable years beginning in 2017, 2018, or 2019 which is attributable to a rural renewal community proprietorship, the rate of tax under section 1401(a) shall be 8.40 percent. (b) Definitions For purposes of this section— (1) Rural renewal community The term rural renewal community section 45D(f)(4)(C) (2) Rural renewal community business entity The term rural renewal community business entity section 179F(c)(2) (3) Rural renewal community proprietorship The term rural renewal community proprietorship section 179F(c)(3) (c) Transfers of Funds (1) Transfers to federal old-age and survivors insurance trust fund There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act ( 42 U.S.C. 401 (2) Transfers to social security equivalent benefit account There are hereby appropriated to the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 ( 45 U.S.C. 231n–1(a) (3) Coordination with other federal laws For purposes of applying any provision of Federal law other than the provisions of the Internal Revenue Code of 1986, the rate of tax in effect under section 3101(a) shall be determined without regard to the reduction in such rate under this section. E Encouraging small business start ups 141. Renewal community business start-up savings accounts (a) In general Part VIII of subchapter B of chapter 1 224. Renewal community business start-up savings accounts (a) Allowance of deduction In the case of an individual, there shall be allowed as a deduction for the taxable year an amount equal to amount of contributions made to the rural renewal community business start-up savings account of such individual. (b) Rural renewal community business start-Up savings account The term rural renewal community business start-up savings account (1) Except in the case of a rollover contribution described in subsection (d)(4), no contribution will be accepted unless it is in cash, and contributions will not be accepted if such contribution would result in aggregate contributions to all rural renewal community business start-up savings account of the individual for such taxable year and all prior taxable years exceeding $50,000. (2) The trustee is a bank (as defined in section 408(n)) or such other person who demonstrates to the satisfaction of the Secretary that the manner in which such other person will administer the trust will be consistent with the requirements of this section. (3) No part of the trust funds will be invested in life insurance contracts. (4) The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund. (c) Tax treatment of accounts (1) In general A rural renewal community business start-up savings account shall be exempt from taxation under this subtitle. Notwithstanding the preceding sentence, the renewal community business start-up savings account shall be subject to the taxes imposed by section 511 (relating to imposition of tax on unrelated business income of charitable organizations). (2) Account terminations Rules similar to the rules of paragraphs (2) and (4) of section 408(e) shall apply to rural renewal community business start-up savings accounts, and any amount treated as distributed under such rules shall be treated as not used to pay for eligible costs. (d) Tax treatment of distributions (1) Qualified distributions (A) In general Any qualified distribution from a rural renewal community business start-up savings account shall not be included in gross income. (B) Qualified distribution For purposes of this section, the term qualified distribution (i) the eligible costs paid or incurred by the taxpayer during the taxable year which are made not later than the last day of the 5th taxable year beginning after the initial distribution from the account, or (ii) $50,000. For purposes of clause (i), a taxpayer shall be treated as having paid or incurred the taxpayer’s allocable share of eligible costs of any entity in which the taxpayer directly holds stock or a capital or profits interest. (C) Eligible costs (i) In general For purposes of this section, the term eligible costs (ii) Designated rural renewal community business For purposes of clause (i), the term designated rural renewal community business (I) any rural renewal community business entity (as defined in section 179F(c)) in which the taxpayer is a shareholder or partner and which is designated by the taxpayer for purposes of this section, or (II) any rural renewal community proprietorship of which the taxpayer is the owner and which is designated by the taxpayer for purposes of this section. Any designation made under this clause, once made, may not be revoked. (D) Disallowance of excluded amounts as deduction, credit, or exclusion No deduction, credit, or exclusion shall be allowed to the taxpayer under any other section of this chapter for any qualified distribution to the extent taken into account in determining the amount of the exclusion under this paragraph. (2) Nonqualified distributions (A) In general Any amount paid or distributed out of a rural renewal community business start-up savings account which is not a qualified distribution, including any amount paid out pursuant to a termination of such an account, shall be included in the gross income of the taxpayer as provided in section 72. (B) Treatment of amounts remaining in account Any remaining amount in a small business start-up savings account following the date described in paragraph (1)(B)(i) shall be treated as distributed during the taxable year following such date and such distribution shall not be treated as a qualified distribution. (C) Additional tax (i) In general The tax imposed by this chapter on the account beneficiary for any taxable year in which there is a payment or distribution from a rural renewal community business start-up savings account of such beneficiary which is includible in income under subparagraph (A) shall be increased by 10 percent of the amount which is so includible. (ii) Exception Clause (i) shall not apply if the payment or distribution is made after the account beneficiary becomes disabled within the meaning of section 72(m)(7) or dies. (3) Excess contributions returned before due date of return (A) In general If any excess contribution is contributed for a taxable year to any rural renewal community business start-up savings account of an individual, paragraph (2) shall not apply to distributions from the rural renewal community business start-up savings accounts of such individual (to the extent such distributions do not exceed the aggregate excess contributions to all such accounts of such individual for such year) if— (i) such distribution is received by the individual on or before the last day prescribed by law (including extensions of time) for filing such individual’s return for such taxable year, and (ii) such distribution is accompanied by the amount of net income attributable to such excess contribution. (B) Excess contribution For purposes of subparagraph (A), the term excess contribution (4) Rollover contribution Paragraph (2) shall not apply to any amount paid or distributed from a rural renewal community business start-up savings account to the account beneficiary to the extent the amount received is paid into a rural renewal community business start-up savings account for the benefit of such beneficiary not later than the 60th day after the day on which the beneficiary receives the payment or distribution. For purposes of this paragraph, rules similar to the rules of section 408(d)(3)(D) shall apply. (5) Transfer of account incident to divorce The transfer of an individual’s interest in a rural renewal community business start-up savings account to an individual’s spouse or former spouse under a divorce or separation instrument described in subparagraph (A) of section 71(b)(2) shall not be considered a taxable transfer made by such individual notwithstanding any other provision of this subtitle, and such interest shall, after such transfer, be treated as a rural renewal community business start-up savings account with respect to which such spouse is the account beneficiary. (6) Treatment after death of account beneficiary (A) Treatment if designated beneficiary is spouse If the account beneficiary’s surviving spouse acquires such beneficiary’s interest in a rural renewal community business start-up savings account by reason of being the designated beneficiary of such account at the death of the account beneficiary, such account shall be treated as if the spouse were the account beneficiary. (B) Other cases (i) In general If, by reason of the death of the account beneficiary, any person acquires the account beneficiary’s interest in a rural renewal community business start-up savings account in a case to which subparagraph (A) does not apply— (I) such account shall cease to be a rural renewal community business start-up savings account as of the date of death, and (II) an amount equal to the fair market value of the assets in such account on such date shall be includible, if such person is not the estate of such beneficiary, in such person’s gross income for the taxable year which includes such date, or if such person is the estate of such beneficiary, in such beneficiary’s gross income for the last taxable year of such beneficiary. (ii) Special rules (I) Reduction of inclusion for predeath expenses The amount includible in gross income under clause (i) by any person (other than the estate) shall be reduced by the amount of qualified distributions which were paid or incurred by the decedent before the date of the decedent’s death and paid by such person within 1 year after such date. (II) Deduction for estate taxes An appropriate deduction shall be allowed under section 691(c) to any person (other than the decedent or the decedent’s spouse) with respect to amounts included in gross income under clause (i) by such person. (e) Community property laws This section shall be applied without regard to any community property laws. (f) Reports The trustee of a rural renewal community business start-up savings account shall make such reports regarding such account to the Secretary and to the individual for whom the account is, or is to be, maintained with respect to contributions (and the years to which they relate) and distributions aggregating $10 or more in any calendar year, and such other matters as the Secretary may require. The reports required by this subsection— (1) shall be filed at such time and in such manner as the Secretary prescribes, and (2) shall be furnished to individuals— (A) not later than January 31 of the calendar year following the calendar year to which such reports relate, and (B) in such manner as the Secretary prescribes. (g) Regulations The Secretary shall issue such regulations or other guidance as may be necessary to carry out this section, including for purposes of subsection (d)(1)(B)(i) the making reports by regarding eligible costs of an entity in which the taxpayer directly holds stock or a capital or profits interest. . (b) Deduction allowed whether or not individual itemizes deductions Section 62(a) (22) Rural renewal community business start-up savings accounts The deduction allowed by section 224. . (c) Tax on prohibited transactions (1) In general Paragraph (1) of section 4975(e) or (G) a rural renewal community business start-up savings account described in section 224, or . (2) Special rule Subsection (c) of section 4975 of such Code is amended by adding at the end of subsection (c) the following new paragraph: (7) Special rule for rural renewal community business start-up savings accounts An individual for whose benefit a rural renewal community business start-up savings account is established and any contributor to such account shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if section 224(d)(2) applies with respect to such transaction. . (d) Failure To Provide Reports on rural renewal community business start-Up savings accounts Paragraph (2) of section 6693(a) (D) section 224(f) (relating to rural renewal community business start-up savings accounts), . (e) Excess contributions Section 4973 (1) in subsection (a), by striking or or (7) a rural renewal community business start-up savings account (within the meaning of section 224(c)), , and (2) by adding at the end the following new subsection: (i) Excess contributions to rural renewal community business start-Up savings accounts For purposes of this section, in the case of contributions to a rural renewal community business start-up savings account (within the meaning of section 224(b)), the term excess contributions (1) the excess (if any) of— (A) the amount contributed for the taxable year to such accounts (other than a rollover contribution described in section 224(d)(4)), over (B) the amount allowable as a contribution under section 224(b)(1), and (2) the amount determined under this subsection for the preceding taxable year, reduced by the sum of— (A) the distributions out of the accounts for the taxable year, and (B) the excess (if any) of the maximum amount allowable as a contribution under sections 224(b)(1) for the taxable year over the amount contributed to the accounts for the taxable year. For purposes of this subsection, any contribution which is distributed from a rural renewal community business start-up savings account in a distribution described in section 224(d)(3) shall be treated as an amount not contributed. . (f) Clerical amendment The table of contents for part VIII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as relating to section 225 and by inserting after the item relating to section 223 the following new item: Sec. 224. Rural renewal community business start-up savings accounts. . (g) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. II Setting Rural America Free from Overregulation 201. Short title This title may be cited as the Reducing Excessive Government in Rural America Act of 2016 202. Reducing excessive Government in rural America (a) Definitions In this section— (1) the term cost to rural America (2) the term joint resolution (A) reported by the Committee on the Budget of the Senate or the House of Representatives in accordance with subsection (b)(3); (B) which does not have a preamble; (C) the title of which is as follows: Joint resolution relating to repeal of costly rules for rural America. (D) the matter after the resolving clause of which is as follows: That the following rules shall have no force or effect: _______. (E) that will result in a reduction of the cost to rural America of all rules of not less than 10 percent during the 10-fiscal-year period beginning with the next full fiscal year; (3) the term major rule affecting rural America (4) the term rule (5) the term rural area (A) has a population of not less than 200 individuals and not more than 25,000 individuals; and (B) is not located with a metropolitan statistical area which has a population of more than 200,000 individuals. (b) Action by committees (1) In general Not later than 6 months after the date of enactment of this Act, each committee of the Senate and the House of Representatives shall submit to the Committee on the Budget of its House a list of the rules that— (A) are within the jurisdiction of the committee; (B) the committee determines are major rules affecting rural America; and (C) the committee recommends should be repealed. (2) Considerations In determining whether to recommend repealing major rules affecting rural America within its jurisdiction, a committee of the Senate or the House of Representatives shall consider— (A) whether the major rule affecting rural America achieved, or has been ineffective in achieving, the original purpose of the major rule affecting rural America; (B) any adverse effects that could materialize if the major rule affecting rural America is repealed, in particular if those adverse effects are the reason the major rule affecting rural America was originally enacted; (C) whether the costs of the major rule affecting rural America outweigh any benefits of the major rule affecting rural America to the United States; (D) whether the major rule affecting rural America has become obsolete due to changes in technology, economic conditions, market practices, or any other factors; and (E) whether the major rule affecting rural America overlaps with another rule. (3) Combining of recommendations The Committee on the Budget of the Senate and the Committee on the Budget of the House of Representatives, upon receiving recommendations from all relevant committees under paragraph (1), shall report to its House a joint resolution carrying out all such recommendations without any substantive revision, if the committee determines the joint resolution meets the requirement under subsection (a)(2)(E). (c) Expedited procedures (1) Consideration in House of Representatives (A) Placement on calendar Upon a joint resolution being reported by the Committee on the Budget of the House of Representatives, or upon receipt of a joint resolution from the Senate, the joint resolution shall be placed immediately on the calendar. (B) Proceeding to consideration (i) In general It shall be in order, not later than 60 days after the date on which a joint resolution is reported by the Committee on the Budget of the House of Representatives, to move to proceed to consider a joint resolution in the House of Representatives. (ii) Procedure For a motion to proceed to consider a joint resolution— (I) all points of order against the motion are waived; (II) such a motion shall not be in order after the House of Representatives has disposed of a motion to proceed to the joint resolution; (III) the previous question shall be considered as ordered on the motion to its adoption without intervening motion; (IV) the motion shall not be debatable; and (V) a motion to reconsider the vote by which the motion is disposed of shall not be in order. (C) Consideration The House of Representatives shall establish rules for consideration of a joint resolution in the House of Representatives. (2) Expedited consideration in Senate (A) Placement on calendar Upon a joint resolution being reported by the Committee on the Budget of the Senate, or upon receipt of a joint resolution from the House of Representatives, the joint resolution shall be placed immediately on the calendar. (B) Proceeding to consideration (i) In general Notwithstanding rule XXII of the Standing Rules of the Senate, it is in order, not later than 60 days after the date on which a joint resolution is reported by the Committee on the Budget of the Senate (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of a joint resolution. (ii) Procedure For a motion to proceed to the consideration of a joint resolution— (I) all points of order against the motion are waived; (II) the motion is not debatable; (III) the motion is not subject to a motion to postpone; (IV) a motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order; and (V) if the motion is agreed to, the joint resolution shall remain the unfinished business until disposed of. (C) Floor consideration generally If the Senate proceeds to consideration of a joint resolution— (i) all points of order against the joint resolution (and against consideration of the joint resolution) are waived; (ii) consideration of the joint resolution, and all amendments thereto and debatable motions and appeals in connection therewith, shall be limited to not more than 10 hours, which shall be divided equally between the majority and minority leaders or their designees; (iii) a motion to postpone or a motion to commit the joint resolution is not in order; and (iv) a motion to proceed to the consideration of other business is not in order. (D) Requirements for amendments (i) In general No amendment that is not germane to the provisions of a joint resolution shall be considered. (ii) Repeal of major rules affecting rural America Notwithstanding clause (i) or any other rule, an amendment or series of amendments to a joint resolution shall always be in order if such amendment or series of amendments proposes to repeal a major rule affecting rural America that would result in a decrease in the total cost to rural America of all rules during the 10-fiscal-year period beginning with the next full fiscal year. (E) Vote on passage The vote on passage shall occur immediately following the conclusion of the consideration of a joint resolution, and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the Senate. (F) Rulings of the chair on procedure Appeals from the decisions of the Chair relating to the application of this subsection or the rules of the Senate, as the case may be, to the procedure relating to a joint resolution shall be decided without debate. (3) Consideration after passage If the President vetoes the joint resolution, consideration of a veto message in the Senate under this section shall be not more than 2 hours equally divided between the majority and minority leaders or their designees. (4) Rules of House of Representatives and Senate This subsection is enacted by Congress— (A) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such is deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution, and supersede other rules only to the extent that they are inconsistent with such rules; and (B) with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House. (d) Effect of joint resolution (1) In general A major rule affecting rural America shall cease to have force or effect if Congress enacts a joint resolution repealing the major rule affecting rural America. (2) Limitation on subsequent rulemaking A rule that ceases to have force or effect under paragraph (1) may not be reissued in substantially the same form, and a new rule that is substantially the same as such a rule may not be issued, unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution repealing the original rule.

Summary: Rebuilding and Renewing Rural America Act of 2016 This bill modifies: (1) tax and regulatory policies that affect certain rural communities, and (2) tax rules that apply to private foundations. The bill amends the Internal Revenue Code, with respect to program-related investments made by private foundations for a charitable purpose, to: modify the definition of and requirements for program-related investments; allow a declaratory judgment remedy to determine whether investments in any entity are program-related investments; expand reporting requirements for for-profit entities that receive program-related investments; and allow public inspection of petitions seeking a determination of program-related investment status and annual information returns. The bill also includes several tax provisions that apply to rural renewal communities, which are low-income communities that: (1) have a population of at least 200 people but not more than 25,000 people, and are not located in a metropolitan area which has a population of 200,000 or more; or (2) are entirely within an Indian reservation. With respect to such communities, the bill: allows tax credits for a portion of the costs of reducing lead, radon, or asbestos hazards in rural commercial structures; expands the new markets tax credit; allows expensing of certain depreciable business assets; reduces payroll taxes; and allows tax-preferred rural renewal community business start-up savings accounts. Reducing Excessive Government in Rural America Act of 2016 Congress must consider legislation to reduce the regulatory cost to rural America by at least 10% over 10 years by repealing certain regulations. The legislation must be considered using expedited legislative procedures specified in the bill.