I
104TH CONGRESS
1ST SESSION
H. R. 1519
To amend the Internal Revenue Code of 1986 to allow a credit for the
construction and renovation of nonresidential buildings in distressed areas.
IN THE HOUSE OF REPRESENTATIVES
APRIL 7, 1995
Ms. WATERS 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 allow a
credit 
for 
the 
construction 
and 
renovation 
of
nonresidential buildings in distressed areas.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Low Income Commu-
nity Development Tax Credit Act of 1995’’.
SEC. 2. CREDIT FOR NONRESIDENTIAL BUILDINGS CON-
STRUCTED OR RENOVATED IN DISTRESSED
AREAS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45C. CREDIT FOR NONRESIDENTIAL BUILDINGS IN
DISTRESSED AREAS.
‘‘(a) IN GENERAL.—For purposes of section 38, the
amount of the distressed area building credit determined
under this section for any taxable year in the credit period
shall be an amount equal to—
‘‘(1) the applicable percentage of
‘‘(2) the eligible basis of each qualified dis-
tressed area building.
‘‘(b) APPLICABLE
PERCENTAGE: 
PERCENT
PRESENT VALUE CREDIT FOR CERTAIN NEW BUILDINGS;
30 PERCENT PRESENT VALUE CREDIT
FOR CERTAIN
OTHER BUILDINGS.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘applicable per-
centage’ means the appropriate percentage pre-
scribed by the Secretary for the earlier of—
‘‘(A) the month in which such building is
placed in service, or
‘‘(B) at the election of the taxpayer—
‘‘(i) the month in which the taxpayer
and the credit allocating agency enter into
an agreement with respect to such building
(which is binding on such agency, the tax-
payer, and all successors in interest) as to
the building credit dollar amount to be al-
located to such building, or
‘‘(ii) in the case of any building to
which the rules of section 42(h)(4)(B)
apply, the month in which the tax-exempt
obligations are issued.
A month may be elected under clause (ii) only if the
election is made not later than the 5th day after the
close of such month. Such an election, once made,
shall be irrevocable.
‘‘(2) METHOD
OF
PRESCRIBING
PERCENT-
AGES.—
‘‘(A) IN GENERAL.—The percentages pre-
scribed by the Secretary for any month shall be
percentages which will yield over a 10-year pe-
riod amounts of credit under subsection (a)
which have a present value equal to—
‘‘(i) 70 percent of the eligible basis of
a new building, and
‘‘(ii) 30 percent of the eligible basis of
an existing building.
‘‘(B) INCREASED CREDIT FOR BUILDINGS
IN MORE DISTRESSED AREAS.—In the case of
buildings located in a census tract which would
‘‘(B) DATE OF DETERMINATION.—The de-
termination under subparagraph (A) shall be
made as of the close of the 1st taxable year in
the credit period with respect to such expendi-
tures.
‘‘(4) SPECIAL
RULES.—Rules similar to the
rules of paragraph (4)(A) and (5) of section 42(e)
shall apply for purposes of this subsection.
‘‘(f) DEFINITION AND SPECIAL RULES RELATING TO
CREDIT PERIOD.—
‘‘(1) CREDIT PERIOD DEFINED.—For purposes
of this section, the term ‘credit period’ means, with
respect to any building, the period of 10 taxable
years beginning with—
‘‘(A) the taxable year in which the building
is placed in service, or
‘‘(B) at the election of the taxpayer, the
succeeding taxable year,
but only if the building is a qualified distressed area
building as of the close of the 1st year of such pe-
riod. The election under subparagraph (B), once
made, shall be irrevocable.
‘‘(2) SPECIAL
RULES.—Rules similar to the
rules of paragraphs (3), (4), and (5) of section 42(f)
shall apply for purposes of this subsection.
‘‘(g) LIMITATION ON AGGREGATE CREDIT ALLOW-
ABLE WITH RESPECT TO BUILDINGS LOCATED
IN
A
STATE.—
‘‘(1) CREDIT
MAY
NOT
EXCEED
CREDIT
AMOUNT ALLOCATED TO BUILDING.—
‘‘(A) IN
GENERAL.—The amount of the
credit determined under this section for any
taxable year with respect to any building shall
not exceed the distressed area building credit
dollar amount allocated to such building under
this subsection.
‘‘(B) TIME
FOR
MAKING
ALLOCATION.—
Rules similar to the rules of subparagraphs (B)
through (F) of section 42(h)(1) shall apply for
purposes of this paragraph.
‘‘(2) ALLOCATED CREDIT AMOUNT TO APPLY
TO ALL TAXABLE YEARS ENDING DURING OR AFTER
CREDIT
ALLOCATION
YEAR.—Any distressed area
building credit dollar amount allocated to any build-
ing for any calendar year—
‘‘(A) shall apply to such building for all
taxable years in the credit period ending during
or after such calendar year, and
‘‘(B) shall reduce the aggregate distressed
area building credit dollar amount of the credit
allocating agency only for such calendar year.
‘‘(3) DISTRESS AREA BUILDING CREDIT DOL-
LAR AMOUNT FOR AGENCIES.—
‘‘(A) IN
GENERAL.—The aggregate dis-
tressed area building credit dollar amount
which a credit agency may allocate for any cal-
endar year is the portion of the State distressed
area building credit ceiling allocated under this
paragraph for such calendar year to such agen-
cy.
‘‘(B) STATE
CEILING
INITIALLY
ALLO-
CATED
TO
STATE
HOUSING
CREDIT
AGEN-
CIES.—The State distressed area building credit
ceiling for each calendar year shall be allocated
to the housing credit agency of such State. If
there is more than 1 housing credit agency of
a State, all such agencies shall be treated as a
single agency.
‘‘(C) STATE DISTRESSED AREA BUILDING
CREDIT
CEILING.—The State distressed area
building credit ceiling applicable to any State
for any calendar year shall be an amount equal
to the sum of—
‘‘(i) $1.25 multiplied by the State
population,
‘‘(ii) the unused State distressed area
building credit ceiling (if any) of such
State for the preceding calendar year,
‘‘(iii) the amount of State distressed
area building credit ceiling returned in the
calendar year, plus
‘‘(iv) the amount (if any) allocated
under subparagraph (D) to such State by
the Secretary.
For purposes of clause (ii), the unused State
distressed area building credit ceiling for any
calendar year is the excess (if any) of the sum
of the amounts described in clauses (i) and (iii)
over the aggregate distressed area building
credit dollar amount allocated for such year.
‘‘(D) UNUSED CREDIT CARRYOVERS ALLO-
CATED AMONG CERTAIN STATES.—Rules similar
to the rules of section 42(h)(2)(D) shall apply
for purposes of this paragraph.
‘‘(4) OTHER RULES TO APPLY.—Rules similar
to the rules of subparagraphs (E), (F), and (G) of
section 42(h)(2), and paragraphs (4), (5), and (7) of