H. R. 2488—68 
‘‘(ii) in such manner as the Secretary prescribes 
in such regulations. 
‘‘(6) INVESTMENT IN COLLECTIBLES TREATED AS DISTRIBU-
TIONS.—Rules similar to the rules of section 408(m) shall apply 
for purposes of this section. 
‘‘(h) PENALTY FOR DISTRIBUTIONS NOT USED FOR QUALIFIED 
FAMILY DEVELOPMENT EXPENSES.— 
‘‘(1) IN
GENERAL.—If any amount is distributed from a 
family development account and is not used exclusively to pay 
qualified family development expenses for the holder of the 
account or the spouse or dependent (as defined in section 152) 
of such holder, the tax imposed by this chapter for the taxable 
year of such distribution shall be increased by 10 percent 
of the portion of such amount which is includible in gross 
income. 
‘‘(2) EXCEPTION
FOR
CERTAIN
DISTRIBUTIONS.—Paragraph 
(1) shall not apply to distributions which are— 
‘‘(A) made on or after the date on which the account 
holder attains age 591⁄2, 
‘‘(B) made to a beneficiary (or the estate of the account 
holder) on or after the death of the account holder, or 
‘‘(C) attributable to the account holder’s being disabled 
within the meaning of section 72(m)(7). 
‘‘(i) APPLICATION
OF SECTION.—This section shall apply to 
amounts paid to a family development account for any taxable 
year beginning after December 31, 2000, and before January 1, 
2008. 
‘‘SEC. 1400I. DESIGNATION OF EARNED INCOME TAX CREDIT PAY-
MENTS 
FOR 
DEPOSIT 
TO 
FAMILY 
DEVELOPMENT 
ACCOUNT. 
‘‘(a) IN GENERAL.—With respect to the return of any qualified 
individual (as defined in section 1400H(f )) for the taxable year 
of the tax imposed by this chapter, such individual may designate 
that a specified portion (not less than $1) of any overpayment 
of tax for such taxable year which is attributable to the earned 
income tax credit shall be deposited by the Secretary into a family 
development account of such individual. The Secretary shall so 
deposit such portion designated under this subsection. 
‘‘(b) MANNER AND TIME OF DESIGNATION.—A designation under 
subsection (a) may be made with respect to any taxable year— 
‘‘(1) at the time of filing the return of the tax imposed 
by this chapter for such taxable year, or 
‘‘(2) at any other time (after the time of filing the return 
of the tax imposed by this chapter for such taxable year) speci-
fied in regulations prescribed by the Secretary. 
Such designation shall be made in such manner as the Secretary 
prescribes by regulations. 
‘‘(c) PORTION ATTRIBUTABLE TO EARNED INCOME TAX CREDIT.— 
For purposes of subsection (a), an overpayment for any taxable 
year shall be treated as attributable to the earned income tax 
credit to the extent that such overpayment does not exceed the 
credit allowed to the taxpayer under section 32 for such taxable 
year. 
‘‘(d) OVERPAYMENTS TREATED AS REFUNDED.—For purposes of 
this title, any portion of an overpayment of tax designated under 
subsection (a) shall be treated as being refunded to the taxpayer 
VerDate Aug 31 2005 
11:41 May 08, 2006
Jkt 049200
PO 00000
Frm 00068
Fmt 6655
Sfmt 6501
E:\PICKUP\H2488.ENR
H2488
erjones on PROD1PC71 with BILLS
H. R. 2488—69 
as of the last date prescribed for filing the return of tax imposed 
by this chapter (determined without regard to extensions) or, if 
later, the date the return is filed. 
‘‘(e) TERMINATION.—This section shall not apply to any taxable 
year beginning after December 31, 2007. 
‘‘PART IV—ADDITIONAL INCENTIVES 
‘‘Sec. 1400K. Commercial revitalization deduction. 
‘‘Sec. 1400L. Increase in expensing under section 179. 
‘‘SEC. 1400K. COMMERCIAL REVITALIZATION DEDUCTION. 
‘‘(a) GENERAL RULE.—At the election of the taxpayer, either— 
‘‘(1) one-half of any qualified revitalization expenditures 
chargeable to capital account with respect to any qualified 
revitalization building shall be allowable as a deduction for 
the taxable year in which the building is placed in service, 
or 
‘‘(2) a deduction for all such expenditures shall be allowable 
ratably over the 120-month period beginning with the month 
in which the building is placed in service. 
The deduction provided by this section with respect to such expendi-
ture shall be in lieu of any depreciation deduction otherwise allow-
able on account of such expenditure. 
‘‘(b) QUALIFIED
REVITALIZATION
BUILDINGS
AND
EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) QUALIFIED REVITALIZATION BUILDING.—The term ‘quali-
fied revitalization building’ means any building (and its struc-
tural components) if— 
‘‘(A) such building is located in a renewal community 
and is placed in service after December 31, 2000; 
‘‘(B) a commercial revitalization deduction amount is 
allocated to the building under subsection (d); and 
‘‘(C) depreciation (or amortization in lieu of deprecia-
tion) is allowable with respect to the building (without 
regard to this section). 
‘‘(2) QUALIFIED REVITALIZATION EXPENDITURE.— 
‘‘(A) IN GENERAL.—The term ‘qualified revitalization 
expenditure’ means any amount properly chargeable to cap-
ital account— 
‘‘(i) for property for which depreciation is allowable 
under section 168 (without regard to this section) and 
which is— 
‘‘(I) nonresidential real property; or 
‘‘(II) an addition or improvement to property 
described in subclause (I); 
‘‘(ii) in connection with the construction of any 
qualified revitalization building which was not pre-
viously placed in service or in connection with the 
substantial rehabilitation (within the meaning of sec-
tion 47(c)(1)(C)) of a building which was placed in 
service before the beginning of such rehabilitation; and 
‘‘(iii) for land (including land which is functionally 
related to such property and subordinate thereto). 
‘‘(B) DOLLAR
LIMITATION.—The aggregate amount 
which may be treated as qualified revitalization expendi-
tures with respect to any qualified revitalization building 
for any taxable year shall not exceed the excess of— 
VerDate Aug 31 2005 
11:41 May 08, 2006
Jkt 049200
PO 00000
Frm 00069
Fmt 6655
Sfmt 6501
E:\PICKUP\H2488.ENR
H2488
erjones on PROD1PC71 with BILLS
H. R. 2488—70 
‘‘(i) $10,000,000, reduced by 
‘‘(ii) any such expenditures with respect to the 
building taken into account by the taxpayer or any 
predecessor in determining the amount of the deduc-
tion under this section for all preceding taxable years. 
‘‘(C) CERTAIN EXPENDITURES NOT INCLUDED.—The term 
‘qualified revitalization expenditure’ does not include— 
‘‘(i) ACQUISITION
COSTS.—The costs of acquiring 
any building or interest therein and any land in connec-
tion with such building to the extent that such costs 
exceed 30 percent of the qualified revitalization 
expenditures determined without regard to this clause. 
‘‘(ii) CREDITS.—Any expenditure which the tax-
payer may take into account in computing any credit 
allowable under this title unless the taxpayer elects 
to take the expenditure into account only for purposes 
of this section. 
‘‘(c) WHEN EXPENDITURES TAKEN INTO ACCOUNT.—Qualified 
revitalization expenditures with respect to any qualified revitaliza-
tion building shall be taken into account for the taxable year 
in which the qualified revitalization building is placed in service. 
For purposes of the preceding sentence, a substantial rehabilitation 
of a building shall be treated as a separate building. 
‘‘(d) LIMITATION ON AGGREGATE DEDUCTIONS ALLOWABLE WITH 
RESPECT TO BUILDINGS LOCATED IN A STATE.— 
‘‘(1) IN GENERAL.—The amount of the deduction determined 
under this section for any taxable year with respect to any 
building shall not exceed the commercial revitalization deduc-
tion amount (in the case of an amount determined under sub-
section (a)(2), the present value of such amount as determined 
under the rules of section 42(b)(2)(C) by substituting ‘100 per-
cent’ for ‘72 percent’ in clause (ii) thereof) allocated to such 
building under this subsection by the commercial revitalization 
agency. Such allocation shall be made at the same time and 
in the same manner as under paragraphs (1) and (7) of section 
42(h). 
‘‘(2) COMMERCIAL REVITALIZATION DEDUCTION AMOUNT FOR 
AGENCIES.— 
‘‘(A) IN GENERAL.—The aggregate commercial revital-
ization deduction amount which a commercial revitalization 
agency may allocate for any calendar year is the amount 
of the State commercial revitalization deduction ceiling 
determined under this paragraph for such calendar year 
for such agency. 
‘‘(B) STATE
COMMERCIAL
REVITALIZATION
DEDUCTION 
CEILING.—The State commercial revitalization deduction 
ceiling applicable to any State— 
‘‘(i) for each calendar year after 2000 and before 
2008 is $6,000,000 for each renewal community in 
the State; and 
‘‘(ii) zero for each calendar year thereafter. 
‘‘(C) COMMERCIAL REVITALIZATION AGENCY.—For pur-
poses of this section, the term ‘commercial revitalization 
agency’ means any agency authorized by a State to carry 
out this section. 
‘‘(e) RESPONSIBILITIES OF COMMERCIAL REVITALIZATION AGEN-
CIES.— 
VerDate Aug 31 2005 
11:41 May 08, 2006
Jkt 049200
PO 00000
Frm 00070
Fmt 6655
Sfmt 6501
E:\PICKUP\H2488.ENR
H2488
erjones on PROD1PC71 with BILLS
H. R. 2488—71 
‘‘(1) PLANS FOR ALLOCATION.—Notwithstanding any other 
provision of this section, the commercial revitalization deduc-
tion amount with respect to any building shall be zero unless— 
‘‘(A) such amount was allocated pursuant to a qualified 
allocation plan of the commercial revitalization agency 
which is approved (in accordance with rules similar to 
the rules of section 147(f )(2) (other than subparagraph 
(B)(ii) thereof)) by the governmental unit of which such 
agency is a part; and 
‘‘(B) such agency notifies the chief executive officer 
(or its equivalent) of the local jurisdiction within which 
the building is located of such allocation and provides such 
individual a reasonable opportunity to comment on the 
allocation. 
‘‘(2) QUALIFIED
ALLOCATION
PLAN.—For purposes of this 
subsection, the term ‘qualified allocation plan’ means any 
plan— 
‘‘(A) which sets forth selection criteria to be used to 
determine priorities of the commercial revitalization agency 
which are appropriate to local conditions; 
‘‘(B) which considers— 
‘‘(i) the degree to which a project contributes to 
the implementation of a strategic plan that is devised 
for a renewal community through a citizen participa-
tion process; 
‘‘(ii) the amount of any increase in permanent, 
full-time employment by reason of any project; and 
‘‘(iii) the active involvement of residents and non-
profit groups within the renewal community; and 
‘‘(C) which provides a procedure that the agency (or 
its agent) will follow in monitoring compliance with this 
section. 
‘‘(f ) REGULATIONS.—For purposes of this section, the Secretary 
shall, by regulations, provide for the application of rules similar 
to the rules of section 49 and subsections (a) and (b) of section 
50. 
‘‘(g) TERMINATION.—This section shall not apply to any building 
placed in service after December 31, 2007. 
‘‘SEC. 1400L. INCREASE IN EXPENSING UNDER SECTION 179. 
‘‘(a) GENERAL RULE.—In the case of a renewal community busi-
ness (as defined in section 1400G), for purposes of section 179— 
‘‘(1) the limitation under section 179(b)(1) shall be increased 
by the lesser of— 
‘‘(A) $35,000; or 
‘‘(B) the cost of section 179 property which is qualified 
renewal property placed in service during the taxable year; 
and 
‘‘(2) the amount taken into account under section 179(b)(2) 
with respect to any section 179 property which is qualified 
renewal property shall be 50 percent of the cost thereof. 
‘‘(b) RECAPTURE.—Rules similar to the rules under section 
179(d)(10) shall apply with respect to any qualified renewal property 
which ceases to be used in a renewal community by a renewal 
community business. 
‘‘(c) QUALIFIED RENEWAL PROPERTY.—For purposes of this sec-
tion— 
VerDate Aug 31 2005 
11:41 May 08, 2006
Jkt 049200
PO 00000
Frm 00071
Fmt 6655
Sfmt 6501
E:\PICKUP\H2488.ENR
H2488
erjones on PROD1PC71 with BILLS