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. 
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 ‘‘Creating American 
Prosperity through Preservation Act of 2011’’. 
SEC. 2. INCREASE IN THE REHABILITATION CREDIT FOR 
CERTAIN SMALLER PROJECTS. 
(a) IN GENERAL.—Section 47 of the Internal Rev-
enue Code of 1986 (relating to rehabilitation credit) is 
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amended by adding at the end the following new sub-
section: 
‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER 
PROJECTS.— 
‘‘(1) IN GENERAL.—In the case of any qualified 
rehabilitated building or portion thereof— 
‘‘(A) which is placed in service after the 
date of the enactment of this subsection, and 
‘‘(B) which is a smaller project, 
subsection (a)(2) shall be applied by substituting ‘30 
percent’ for ‘20 percent’. 
‘‘(2) MAXIMUM
CREDIT.—The credit deter-
mined under this subsection with respect to any 
smaller project for all taxable years shall not exceed 
$1,500,000. 
‘‘(3) SMALLER PROJECT DEFINED.— 
‘‘(A) IN GENERAL.—For purposes of this 
subsection, the term ‘smaller project’ means 
any qualified rehabilitated building or portion 
thereof if— 
‘‘(i) the qualified rehabilitation ex-
penditures taken into account for purposes 
of this section (or would have been so 
taken into account if this subsection had 
been in effect for all prior periods) with re-
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spect to the rehabilitation are not over 
$7,500,000, and 
‘‘(ii) no credit was allowed under this 
section for either of the 2 prior taxable 
years with respect to such building. 
‘‘(B) PROGRESS
EXPENDITURES.—Credit 
allowable by reason of subsection (d) shall not 
be taken into account under subparagraph 
(A)(ii).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to periods after the date of the 
enactment of this Act, under rules similar to the rules of 
section 48(m) of the Internal Revenue Code of 1986 (as 
in effect on the day before the date of the enactment of 
the Revenue Reconciliation Act of 1990). 
SEC. 3. ADDITION OF ENERGY EFFICIENCY SUPPLEMENT 
TO REHABILITATION CREDIT. 
(a) IN GENERAL.—Subsection (a) of section 47 of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘and’’ at the end of paragraph (1), by striking the period 
at the end of paragraph (2) and inserting ‘‘, and’’, and 
by adding at the end the following new paragraph: 
‘‘(3) 2 percent of the qualified rehabilitation ex-
penditures if the building is a qualified energy effi-
cient rehabilitated building.’’. 
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(b) QUALIFIED ENERGY EFFICIENT REHABILITATED 
BUILDING.—Section 47 of such Code, as amended by sec-
tion 2, is amended by adding at the end the following new 
subsection: 
‘‘(f) QUALIFIED
ENERGY
EFFICIENT
REHABILI-
TATED BUILDING.— 
‘‘(1) IN GENERAL.—The term ‘qualified energy 
efficient rehabilitated building’ means any building 
(and its structural components) if— 
‘‘(A) the building is a qualified rehabili-
tated building, and 
‘‘(B)(i) the rehabilitation is certified (in 
accordance with paragraph (4)) as being de-
signed to achieve at least a 30 percent energy 
use reduction in the building’s energy use, or 
‘‘(ii) the building meets the requirements 
of paragraph (2)(B)(ii) and is determined under 
paragraph (2)(B) to achieve at least a 30 per-
cent energy use reduction after being rehabili-
tated. 
‘‘(2) DETERMINATION OF ENERGY USE REDUC-
TION.—For purposes of paragraph (1)— 
‘‘(A) DESIGN-BASED STANDARDS.— 
‘‘(i) BUILDINGS WITHIN THE SCOPE 
OF STANDARD 90.1–2007.—If the building 
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is within the scope of Standard 90.1–2007, 
the designed reduction in energy use shall 
be determined using methods of calculation 
under paragraph (3) in comparison to a 
reference building which meets the min-
imum requirements of such standard. 
‘‘(ii) RESNET
BUILDINGS.—If the 
building is within the scope of RESNET, 
the designed reduction in energy use shall 
be determined using methods prescribed by 
the Secretary which are based on the Resi-
dential Energy Services Network Technical 
Guidelines. 
‘‘(iii) OTHER BUILDINGS.—If neither 
clause (i) or (ii) apply to the building, the 
designed reduction in energy use shall be 
determined using methods of calculation 
prescribed by the Secretary in a manner 
which is consistent with principles under 
paragraph (3). 
‘‘(B) MEASURED REDUCTIONS.— 
‘‘(i) IN
GENERAL.—In the case of 
buildings which meet the requirements of 
clause (ii), the taxpayer may determine the 
reduction in energy usage by comparing 
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the energy usage during the period selected 
by the taxpayer under clause (ii)(I) with 
the energy usage during the period selected 
by the taxpayer under clause (ii)(II). 
‘‘(ii) BUILDING
REQUIREMENTS.—A 
building meets the requirements of this 
clause if— 
‘‘(I) the building is at least 75 
percent occupied during any period 
(but not less than 12 months) selected 
by the taxpayer which ends during the 
5-year period ending on the date that 
the rehabilitation begins, and 
‘‘(II) the building is at least 75 
percent occupied during the com-
parable period selected by the tax- 
payer which begins during the 5-year 
period beginning on the date that the 
rehabilitation is completed. 
‘‘(iii) ENERGY STAR BUILDINGS.—The 
reduction in energy use for buildings with-
in the scope of Energy Start Portfolio 
Manager may be determined for purposes 
of this subparagraph by using the Energy 
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Star Portfolio Manager Buildings Bench-
mark Tool. 
‘‘(iv) SPECIAL RULES.—The Secretary 
shall prescribe regulations which preclude 
the use of this subparagraph, or modify 
the methods otherwise applicable under 
this subparagraph, in circumstance where 
vacancies, changes in use, and other fac-
tors which might otherwise yield in materi-
ally misleading results. 
‘‘(v) YEAR CREDIT ALLOWABLE.—In 
the case of a building which is a qualified 
energy efficient rehabilitated building sole-
ly by reason of this subparagraph, the in-
crease in the credit under subsection (a)(3) 
with respect to such building shall be 
taken into account for the taxable year 
which includes the end of the period se-
lected by the taxpayer under clause (ii)(II) 
in lieu of the taxable year in which the re-
habilitated building is placed in service. 
‘‘(3) METHODS OF CALCULATIONS.— 
‘‘(A) IN GENERAL.—The Secretary, after 
consultation with the Secretary of Energy, shall 
promulgate regulations which describe in detail 
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methods for calculating and verifying energy 
and power consumption and cost, based on Ap-
pendix G of Standard 90.1–2007 (or any subse-
quent version of such Appendix which is in ef-
fect at the time of the certification). 
‘‘(B) COMPUTER SOFTWARE.— 
‘‘(i) IN
GENERAL.—Any calculation 
under subparagraph (A) shall be prepared 
by qualified computer software. 
‘‘(ii) QUALIFIED
COMPUTER
SOFT-
WARE.—For purposes of subparagraph 
(A), the term ‘qualified computer software’ 
means software— 
‘‘(I) which is included (at the 
time of the certification) on the pub-
lished list of qualified software by the 
Department of Energy, and 
‘‘(II) which provides such infor-
mation as the Secretary may require, 
including information that allows the 
user to document the energy efficiency 
features of the building and its pro-
jected annual energy costs, and 
‘‘(III) which provides standard-
ized outputs for building energy per-
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formance and, to the maximum extent 
practicable, relies on industry best 
practices and existing guidelines. 
‘‘(4) CERTIFICATIONS.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe the manner and method for the mak-
ing of certifications under this subsection. 
‘‘(B) PROCEDURES.—The Secretary shall 
include as part of the certification process pro-
cedures for inspection and testing by qualified 
individuals described in subparagraph (C) to 
ensure compliance of buildings with energy-sav-
ings plans and targets. Such procedures shall 
be comparable, given the difference between 
commercial and residential buildings, to the re-
quirements in the Mortgage Industry National 
Accreditation Procedures for Home Energy 
Rating Systems. 
‘‘(C) QUALIFIED
INDIVIDUALS.—Individ-
uals qualified to determine compliance shall be 
only those individuals who are recognized by an 
organization certified by the Secretary for such 
purposes. For purposes of the preceding sen-
tence, an individual shall not be qualified with 
respect to a building unless the individual is— 
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‘‘(i) a registered professional engineer, 
‘‘(ii) not a direct employee of the 
owner of the commercial building or multi-
family building, and 
‘‘(iii) licensed in the State in which 
such building is located. 
‘‘(5) STANDARD
90.1–2007.—For purposes of 
this subsection, the term ‘Standard 90.1–2007’ 
means Standard 90.1–2007 of the American Society 
of Heating, Refrigerating, and Air Conditioning En-
gineers and the Illuminating Engineering Society of 
North America (or any subsequent version of such 
Standard which is in effect at the time of the certifi-
cation). 
‘‘(6) ALLOCATION OF CREDIT FOR TAX-EXEMPT 
PROPERTY.—Paragraphs (3) and (4) of section 
50(b), and clause (v) of subsection (c)(2)(B), shall 
not apply to those qualified rehabilitation expendi-
tures that are taken into account for purposes of 
certifying a building as a qualified energy efficient 
rehabilitated building under subsection (f). Any re-
habilitation credit which is allowable by reason of 
the preceding sentence may be assigned to any other 
person, and such other person shall be treated as the 
taxpayer with respect thereto. 
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‘‘(7) COORDINATION.—The Secretary shall des-
ignate processes for tracking the numbers and loca-
tions of buildings claiming the rehabilitation by rea-
son of this subsection, as well as providing informa-
tion on projected and actual savings of energy and 
its value over time in coordination with the Depart-
ment of Energy. 
‘‘(8) REGULATIONS.—The Secretary, after con-
sultation with the Administrator of the Environ-
mental Protection Agency and the Secretary of the 
Interior, shall promulgate such regulations as may 
be necessary or appropriate to carry out the pur-
poses of this subsection, including regulations— 
‘‘(A) to take into account new technologies 
regarding energy efficiency and renewable en-
ergy for purposes of determining energy effi-
ciency and savings under this subsection, and 
‘‘(B) to provide for a recapture of the cred-
it determined under this subsection if the de-
sign referred to in paragraph (1)(B) is not fully 
implemented.’’. 
(c) SUBSTANTIAL REHABILITATION REQUIREMENT 
NOT TO APPLY TO ENERGY EFFICIENCY SUPPLEMENT.— 
Subparagraph (A) of section 47(c)(1) of such Code (defin-
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ing qualified rehabilitated building) is amended by adding 
at the end the following new flush sentence: 
‘‘Clause (i) shall not apply to so much of the rehabili-
tation credit as is determined under subsection (a)(3).’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall apply to property placed in service after the 
date of the enactment of this Act. 
(2) WAIVER OF SUBSTANTIAL REHABILITATION 
REQUIREMENT.—The waiver of the requirement of 
section 47(c)(1)(A)(i) of the Internal Revenue Code 
of 1986 made by section 47(f)(1)(A) of such Code, 
as added by this Act, shall apply with respect to re-
habilitations the physical work on which begins after 
the date of the enactment of this Act. 
SEC. 4. MODIFICATION TO DEFINITION OF QUALIFIED RE-
HABILITATION EXPENDITURE. 
(a) IN GENERAL.—Clause (i) of section 47(c)(2)(A) 
of the Internal Revenue Code of 1986 (relating to the defi-
nition of qualified rehabilitation expenditures) is amended 
by striking ‘‘or’’ at the end of subclause (III), by striking 
subclause (IV), and by inserting after subclause (III) the 
following new subclauses: 
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‘‘(IV) rehabilitated building en-
ergy efficiency property, or 
‘‘(V) an addition or improvement 
to property described in subclause (I), 
(II), (III), or (IV), and’’. 
(b) REHABILITATED BUILDING ENERGY EFFICIENCY 
PROPERTY.—Section 47(c)(2) of such Code is amended by 
adding at the end the following new subparagraph: 
‘‘(E) REHABILITATED BUILDING ENERGY 
EFFICIENCY PROPERTY.— 
‘‘(i) IN
GENERAL.—For purposes of 
subparagraph (A), the term ‘rehabilitated 
building energy efficiency property’ means 
property which is certified as being— 
‘‘(I) affixed to, adjacent to, or in-
tegral to the provision of renewable 
energy to a qualified rehabilitated 
building, or 
‘‘(II) installed as part of a plan 
designed to achieve any qualified en-
ergy use reduction (as defined in sub-
section (e)(4)) or a reduction in water 
use. 
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