section 42(h), shall apply for purposes of this sub-
section.
‘‘(5) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) CREDIT ALLOCATING AGENCY.—The
term ‘credit allocating agency’ means any agen-
cy authorized to carry out this subsection.
‘‘(B) POSSESSIONS TREATED AS STATES.—
The term ‘State’ includes a possession of the
United States.
‘‘(h) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section —
‘‘(1) NEW BUILDING.—The term ‘new building’
means a building the original use of which begins
with the taxpayer.
‘‘(2) EXISTING BUILDING.—The term ‘existing
building’ means any building which is not a new
building.
‘‘(3) APPLICATION TO ESTATES AND TRUSTS.—
In the case of an estate or trust, the amount of the
credit determined under subsection (a) shall be ap-
portioned between the estate or trust and the bene-
ficiaries on the basis of the income of the estate or
trust allocable to each.
‘‘(i) APPLICATION OF AT-RISK RULES.—Rules simi-
lar to the rules of section 42(j) shall apply for purposes
of this section.
‘‘(j) CERTIFICATIONS AND OTHER REPORTS TO SEC-
RETARY.—
‘‘(1) CERTIFICATION
WITH
RESPECT
TO
1ST
YEAR OF CREDIT PERIOD.—Following the close of
the 1st taxable year in the credit period with respect
to any qualified distressed area building, the tax-
payer shall certify to the Secretary (at such time
and in such form and in such manner as the Sec-
retary prescribes)—
‘‘(A) the taxable year, and calendar year,
in which such building was placed in service,
‘‘(B) the adjusted basis and eligible basis
of such building as of the close of the 1st year
of the credit period,
‘‘(C) the maximum applicable percentage
and eligible basis permitted to be taken into ac-
count by the appropriate credit allocating agen-
cy, and
‘‘(D) such other information as the Sec-
retary may require.
In the case of a failure to make the certification re-
quired by the preceding sentence on the date pre-
scribed therefor, unless it is shown that such failure
is due to reasonable cause and not to willful neglect,
no credit shall be allowable by reason of subsection
(a) with respect to such building for any taxable
year ending before such certification is made.
‘‘(2) REPORTS TO THE SECRETARY.—The Sec-
retary may require taxpayers and credit allocating
agencies to submit such reports as the Secretary de-
termines necessary or appropriate to carry out the
purposes of this section.
‘‘(k) CREDIT ALLOCATED TO BUILDING NOT TO EX-
CEED AMOUNT NECESSARY TO ASSURE PROJECT FEA-
SIBILITY.—
‘‘(1) IN GENERAL.—The distressed area build-
ing credit dollar amount allocated to a building shall
not exceed the amount the credit allocating agency
determines is necessary for the financial feasibility
of the building throughout the credit period.
‘‘(2) AGENCY EVALUATION.—In making the de-
termination under paragraph (1), the credit allocat-
ing agency shall consider—
‘‘(A) the sources and uses of funds and the
total financing planned for the building,
‘‘(B) any proceeds or receipts expected to
be generated by reason of tax benefits, and
‘‘(C) the percentage of the distressed area
building credit dollar amount used for building
costs other than the cost of intermediaries.
Subparagraph (C) shall not be applied so as to im-
pede the development of buildings in hard-to-develop
areas. Such a determination shall not be construed
to be a representation or warranty as to the feasibil-
ity or viability of the building.
‘‘(3) DETERMINATION
MADE
WHEN
CREDIT
AMOUNT
APPLIED
FOR
AND
WHEN
BUILDING
PLACED IN SERVICE.—
‘‘(A) 
IN
GENERAL.—A 
determination
under paragraph (1) shall be made as of each
of the following times:
‘‘(i) The application for the distressed
area building credit dollar amount.
‘‘(ii) The allocation of the distressed
area building credit dollar amount.
‘‘(iii) The date the building is placed
in service.
‘‘(B) CERTIFICATION AS TO AMOUNT OF
OTHER SUBSIDIES.—Prior to each determina-
tion under subparagraph (A), the taxpayer shall
certify to the credit allocating agency the full
extent of all Federal, State, and local subsidies
which apply (or which the taxpayer expects to
apply) with respect to the building.
‘‘(l) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section.’’
(b) CREDIT TO BE PART OF GENERAL BUSINESS
CREDIT.—
(1) Subsection (b) of section 38 of such Code
is amended by striking ‘‘plus’’ at the end of para-
graph (10), by striking the period at the end of
paragraph (11) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph:
‘‘(12) the distressed area building credit deter-
mined under section 45C(a).’’
(2) Subsection (d) of section 39 of such Code
is amended by adding at the end the following new
paragraph:
‘‘(7) DISTRESSED
AREA
BUILDING
CREDIT.—
No portion of the unused business credit which is at-
tributable to the credit determined under section
45C (relating to distressed area building credit) may
be carried to any taxable year ending before January
1, 1996.’’
(3) Subsection (c) of section 196 of such Code
(relating to deduction for certain unused business
credits) is amended by striking ‘‘and’’ at the end of
paragraph (6), by striking the period at the end of
paragraph (7) and inserting ‘‘, and’’, and by adding
at the end the following new paragraph:
‘‘(8) the distressed area building credit deter-
mined under section 45C(a).’’
(c) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the follow-
ing new item:
‘‘Sec. 45C. Credit for nonresidential buildings in distressed
areas.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
December 31, 1995.
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