Title: Residential Recovery Zone Act
Policy area: Taxation

Summary:
Residential Recovery Zone Act
This bill allows a new tax credit for the purchase of a principal residence in a residential recovery zone. The credit is equal to 10% of the purchase price of the residence, which may not exceed $1.5 million. The dollar amount of the credit is limited to $8,000 in a taxable year.
The bill allows the chief executive officer (e.g., governor) of a state to designate certain population census tracts in areas related to federally declared disasters as opportunity zones. This makes investments in the areas eligible for various tax incentives.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3790 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 3790

  To amend the Internal Revenue Code of 1986 to provide for a credit 
    against tax for homebuyers purchasing residences in residential 
                recovery zones, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 17, 2019

   Mr. Dunn introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committee on 
 Financial Services, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide for a credit 
    against tax for homebuyers purchasing residences in residential 
                recovery zones, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Residential Recovery Zone Act''.

SEC. 2. RESIDENTIAL RECOVERY ZONE HOMEBUYER CREDIT.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 25D the following new section:

``SEC. 25E. RESIDENTIAL RECOVERY ZONE HOMEBUYER CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--In the case of an individual who 
        purchases a principal residence in a residential recovery zone 
        during a taxable year, there shall be allowed as a credit 
        against the tax imposed by this subtitle for such taxable year 
        an amount equal to 10 percent of the purchase price of the 
        residence.
            ``(2) Timing.--At the election of an individual, the credit 
        allowed under subsection (a) for a taxable year may be allowed 
        instead during any one on the subsequent 3 taxable years.
    ``(b) Limitations.--
            ``(1) Dollar limitation.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the credit allowed under subsection (a) 
                shall not exceed $8,000.
                    ``(B) Married individuals filing separately.--In 
                the case of a married individual filing a separate 
                return, subparagraph (A) shall be applied by 
                substituting `$4,000' for `$8,000'.
                    ``(C) Other individuals.--If two or more 
                individuals who are not married purchase a principal 
                residence, the amount of the credit allowed under 
                subsection (a) shall be allocated among such 
                individuals in such manner as the Secretary may 
                prescribe, except that the total amount of the credits 
                allowed to all such individuals shall not exceed 
                $8,000.
            ``(2) Limitation based on purchase price.--No credit shall 
        be allowed under subsection (a) for the purchase of any 
        residence if the purchase price of such residence exceeds 
        $1,500,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Residential recovery zone defined.--
                    ``(A) In general.--The term `residential recovery 
                zone' means, with respect to a Federally declared 
                disaster, a population census tract that is--
                            ``(i) in the disaster area related to such 
                        disaster, and
                            ``(ii) designated under subparagraph (B).
                    ``(B) Designation.--A population census tract is 
                designated under this paragraph with respect to a 
                Federally declared disaster if, during the period 
                beginning on the earliest incident date specified in 
                the declaration to which such area relates and ending 
                on the date that is one year after such date--
                            ``(i) the chief executive officer of the 
                        State in which the tract is located--
                                    ``(I) nominates the tract for 
                                designation as a residential recovery 
                                zone, and
                                    ``(II) notifies the Secretary in 
                                writing of such nomination, and
                            ``(ii) the Secretary certifies such 
                        nomination and designates such tract as a 
                        residential recovery zone.
                    ``(C) Duration of designation.--A designation under 
                subparagraph (B) shall terminate on the date that is 3 
                years after the date of the certification described in 
                subparagraph (B)(ii).
                    ``(D) State; federally declared disaster; disaster 
                area.--The term `State' has the meaning given such 
                terms in section 1400Z-1, and `Federally declared 
                disaster' and `disaster area' have the meaning given 
                such terms in section 165(i).
            ``(2) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
            ``(3) Purchase; purchase price.--The term `purchase' and 
        `purchase price' have the meanings given such terms in section 
        36(c).
    ``(d) Exceptions.--No credit under subsection (a) shall be allowed 
to any taxpayer for any taxable year with respect to the purchase of a 
residence if--
            ``(1) a deduction under section 151 with respect to such 
        taxpayer is allowable to another taxpayer for such taxable 
        year, or
            ``(2) the taxpayer fails to attach to the return of tax for 
        such taxable year a properly executed copy of the settlement 
        statement used to complete such purchase.
    ``(e) Recapture of Credit.--
            ``(1) In general.--If a residence with respect to which a 
        credit was allowed under subsection (a) ceases to be the 
        principal residence of the taxpayer before the end of the 3-
        year period beginning on the date of the purchase of such 
        residence the tax imposed by this chapter for the taxable year 
        of cessation shall be increased by the amount of the credit so 
        allowed and claimed.
            ``(2) Exceptions.--
                    ``(A) Death of taxpayer.--Paragraph (1) shall not 
                apply if the cessation is attributable to the 
                taxpayer's death.
                    ``(B) Involuntary conversion.--Paragraph (1) shall 
                not apply if the cessation is attributable to a 
                compulsorily or involuntarily conversion (within the 
                meaning of section 1033(a)) and the taxpayer acquires a 
                new principal residence during the 2-year period 
                beginning on the date of such cessation.
                    ``(C) Special rule for members of the armed forces, 
                etc.--
                            ``(i) In general.--Paragraph (1) shall not 
                        apply if the cessation is attributable to 
                        Government orders received by such individual, 
                        or such individual's spouse, for service on 
                        qualified official extended duty as--
                                    ``(I) a member of the uniformed 
                                services,
                                    ``(II) a member of the Foreign 
                                Service of the United States, or
                                    ``(III) an employee of the 
                                intelligence community.
                            ``(ii) Definitions.--Any term used in this 
                        subparagraph which is also used in section 
                        121(d)(9) shall have the same meaning as when 
                        used in such paragraph.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 25D the 
following new item:

``Sec. 25E. Residential recovery zone homebuyer credit.''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to purchases in taxable years beginning after the 
date that is 1 year before the date of the enactment of this Act.

SEC. 3. TREATMENT AS OPPORTUNITY ZONES.

    (a) In General.--Section 1400Z-1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subsection:
    ``(g) Certain Disaster Zones.--
            ``(1) Designation.--With respect to a Federally declared 
        disaster, the chief executive officer of a State may designate 
        under this paragraph not more than 5 percent of the applicable 
        disaster tracts in such State with respect to such disaster.
            ``(2) No effect on limitation on number of designations.--
        An applicable disaster tract designated under paragraph (1) 
        shall not be taken into account in determining the limitation 
        under subsection (d).
            ``(3) Applicable disaster tract.--The term `applicable 
        disaster tract' means, with respect to a Federally declared 
        disaster, a population census tract in the disaster area 
        related to such disaster.
            ``(4) Federally declared disaster; disaster area.--In this 
        subsection, the term `Federally declared disaster' and the term 
        `disaster area' have the meaning given such terms in section 
        165(i).
            ``(5) Applicable start date.--
                    ``(A) Qualified opportunity fund businesses and 
                property.--In the case of an applicable disaster tract 
                designated under paragraph (1), subparagraphs 
                (B)(i)(I), (C)(i), and (D)(i)(I) of section 1400Z-
                2(d)(2) shall each be applied by substituting `the 
                applicable start date' for `December 31, 2017'.
                    ``(B) Extension of determination period.--In the 
                case of an applicable disaster tract designated under 
                paragraph (1), section (c)(2)(B) shall be applied by 
                substituting `the applicable start date' for `the date 
                of the enactment of the Tax Cuts and Jobs Act'.
                    ``(C) Applicable start date.--The term `applicable 
                start date' means, with respect to a disaster area, the 
                earliest incident date specified in the declaration to 
                which such area relates.''.
    (b) Effective Date.--The amendments made by this section shall 
apply with respect to Federally declared disasters declared after the 
date of the enactment of this Act.

SEC. 4. CREDIT UNDER THE COMMUNITY REINVESTMENT ACT OF 1977 FOR LENDING 
              IN A RESIDENTIAL RECOVERY ZONE.

    Section 804 of the Community Reinvestment Act of 1977 (12 U.S.C. 
2903) is amended by adding at the end the following:
    ``(e) Residential Recovery Zone Loans.--In assessing and taking 
into account, under subsection (a), the record of a financial 
institution, the appropriate Federal financial supervisory agency shall 
consider as a factor lending activities to individuals and businesses 
that are located in a residential recovery zone (as defined under 
section 36A(c) of the Internal Revenue Code of 1986).''.
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