-CITE-
26 USC Subchapter X - Renewal Communities 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
-HEAD-
SUBCHAPTER X - RENEWAL COMMUNITIES
-MISC1-
Part
I. Designation.
II. Renewal community capital gain; renewal community
business.
III. Additional incentives.
-End-
-CITE-
26 USC PART I - DESIGNATION 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART I - DESIGNATION
-HEAD-
PART I - DESIGNATION
-MISC1-
Sec.
1400E. Designation of renewal communities.
-End-
-CITE-
26 USC Sec. 1400E 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART I - DESIGNATION
-HEAD-
Sec. 1400E. Designation of renewal communities
-STATUTE-
(a) Designation
(1) Definitions
For purposes of this title, the term "renewal community" means
any area -
(A) which is nominated by 1 or more local governments and the
State or States in which it is located for designation as a
renewal community (hereafter in this section referred to as a
"nominated area"), and
(B) which the Secretary of Housing and Urban Development
designates as a renewal community, after consultation with -
(i) the Secretaries of Agriculture, Commerce, Labor, and
the Treasury; (!1) the Director of the Office of Management
and Budget, and the Administrator of the Small Business
Administration, and
(ii) in the case of an area on an Indian reservation, the
Secretary of the Interior.
(2) Number of designations
(A) In general
Not more than 40 nominated areas may be designated as renewal
communities.
(B) Minimum designation in rural areas
Of the areas designated under paragraph (1), at least 12 must
be areas -
(i) which are within a local government jurisdiction or
jurisdictions with a population of less than 50,000,
(ii) which are outside of a metropolitan statistical area
(within the meaning of section 143(k)(2)(B)), or
(iii) which are determined by the Secretary of Housing and
Urban Development, after consultation with the Secretary of
Commerce, to be rural areas.
(3) Areas designated based on degree of poverty, etc.
(A) In general
Except as otherwise provided in this section, the nominated
areas designated as renewal communities under this subsection
shall be those nominated areas with the highest average ranking
with respect to the criteria described in subparagraphs (B),
(C), and (D) of subsection (c)(3). For purposes of the
preceding sentence, an area shall be ranked within each such
criterion on the basis of the amount by which the area exceeds
such criterion, with the area which exceeds such criterion by
the greatest amount given the highest ranking.
(B) Exception where inadequate course of action, etc.
An area shall not be designated under subparagraph (A) if the
Secretary of Housing and Urban Development determines that the
course of action described in subsection (d)(2) with respect to
such area is inadequate.
(C) Preference for enterprise communities and empowerment zones
With respect to the first 20 designations made under this
section, a preference shall be provided to those nominated
areas which are enterprise communities or empowerment zones
(and are otherwise eligible for designation under this
section).
(4) Limitation on designations
(A) Publication of regulations
The Secretary of Housing and Urban Development shall
prescribe by regulation no later than 4 months after the date
of the enactment of this section, after consultation with the
officials described in paragraph (1)(B) -
(i) the procedures for nominating an area under paragraph
(1)(A),
(ii) the parameters relating to the size and population
characteristics of a renewal community, and
(iii) the manner in which nominated areas will be evaluated
based on the criteria specified in subsection (d).
(B) Time limitations
The Secretary of Housing and Urban Development may designate
nominated areas as renewal communities only during the period
beginning on the first day of the first month following the
month in which the regulations described in subparagraph (A)
are prescribed and ending on December 31, 2001.
(C) Procedural rules
The Secretary of Housing and Urban Development shall not make
any designation of a nominated area as a renewal community
under paragraph (2) unless -
(i) the local governments and the States in which the
nominated area is located have the authority -
(I) to nominate such area for designation as a renewal
community,
(II) to make the State and local commitments described in
subsection (d), and
(III) to provide assurances satisfactory to the Secretary
of Housing and Urban Development that such commitments will
be fulfilled,
(ii) a nomination regarding such area is submitted in such
a manner and in such form, and contains such information, as
the Secretary of Housing and Urban Development shall by
regulation prescribe, and
(iii) the Secretary of Housing and Urban Development
determines that any information furnished is reasonably
accurate.
(5) Nomination process for Indian reservations
For purposes of this subchapter, in the case of a nominated
area on an Indian reservation, the reservation governing body (as
determined by the Secretary of the Interior) shall be treated as
being both the State and local governments with respect to such
area.
(b) Period for which designation is in effect
(1) In general
Any designation of an area as a renewal community shall remain
in effect during the period beginning on January 1, 2002, and
ending on the earliest of -
(A) December 31, 2009,
(B) the termination date designated by the State and local
governments in their nomination, or
(C) the date the Secretary of Housing and Urban Development
revokes such designation.
(2) Revocation of designation
The Secretary of Housing and Urban Development may revoke the
designation under this section of an area if such Secretary
determines that the local government or the State in which the
area is located -
(A) has modified the boundaries of the area, or
(B) is not complying substantially with, or fails to make
progress in achieving, the State or local commitments,
respectively, described in subsection (d).
(3) Earlier termination of certain benefits if earlier
termination of designation
If the designation of an area as a renewal community terminates
before December 31, 2009, the day after the date of such
termination shall be substituted for "January 1, 2010" each place
it appears in sections 1400F and 1400J with respect to such area.
(c) Area and eligibility requirements
(1) In general
The Secretary of Housing and Urban Development may designate a
nominated area as a renewal community under subsection (a) only
if the area meets the requirements of paragraphs (2) and (3) of
this subsection.
(2) Area requirements
A nominated area meets the requirements of this paragraph if -
(A) the area is within the jurisdiction of one or more local
governments,
(B) the boundary of the area is continuous, and
(C) the area -
(i) has a population of not more than 200,000 and at least
-
(I) 4,000 if any portion of such area (other than a rural
area described in subsection (a)(2)(B)(i)) is located
within a metropolitan statistical area (within the meaning
of section 143(k)(2)(B)) which has a population of 50,000
or greater, or
(II) 1,000 in any other case, or
(ii) is entirely within an Indian reservation (as
determined by the Secretary of the Interior).
(3) Eligibility requirements
A nominated area meets the requirements of this paragraph if
the State and the local governments in which it is located
certify in writing (and the Secretary of Housing and Urban
Development, after such review of supporting data as he deems
appropriate, accepts such certification) that -
(A) the area is one of pervasive poverty, unemployment, and
general distress,
(B) the unemployment rate in the area, as determined by the
most recent available data, was at least 1 1/2 times the
national unemployment rate for the period to which such data
relate,
(C) the poverty rate for each population census tract within
the nominated area is at least 20 percent, and
(D) in the case of an urban area, at least 70 percent of the
households living in the area have incomes below 80 percent of
the median income of households within the jurisdiction of the
local government (determined in the same manner as under
section 119(b)(2) of the Housing and Community Development Act
of 1974).
(4) Consideration of other factors
The Secretary of Housing and Urban Development, in selecting
any nominated area for designation as a renewal community under
this section -
(A) shall take into account -
(i) the extent to which such area has a high incidence of
crime, or
(ii) if such area has census tracts identified in the May
12, 1998, report of the General Accounting Office regarding
the identification of economically distressed areas, and
(B) with respect to 1 of the areas to be designated under
subsection (a)(2)(B), may, in lieu of any criteria described in
paragraph (3), take into account the existence of outmigration
from the area.
(d) Required State and local commitments
(1) In general
The Secretary of Housing and Urban Development may designate
any nominated area as a renewal community under subsection (a)
only if -
(A) the local government and the State in which the area is
located agree in writing that, during any period during which
the area is a renewal community, such governments will follow a
specified course of action which meets the requirements of
paragraph (2) and is designed to reduce the various burdens
borne by employers or employees in such area, and
(B) the economic growth promotion requirements of paragraph
(3) are met.
(2) Course of action
(A) In general
A course of action meets the requirements of this paragraph
if such course of action is a written document, signed by a
State (or local government) and neighborhood organizations,
which evidences a partnership between such State or government
and community-based organizations and which commits each
signatory to specific and measurable goals, actions, and
timetables. Such course of action shall include at least 4 of
the following:
(i) A reduction of tax rates or fees applying within the
renewal community.
(ii) An increase in the level of efficiency of local
services within the renewal community.
(iii) Crime reduction strategies, such as crime prevention
(including the provision of crime prevention services by
nongovernmental entities).
(iv) Actions to reduce, remove, simplify, or streamline
governmental requirements applying within the renewal
community.
(v) Involvement in the program by private entities,
organizations, neighborhood organizations, and community
groups, particularly those in the renewal community,
including a commitment from such private entities to provide
jobs and job training for, and technical, financial, or other
assistance to, employers, employees, and residents from the
renewal community.
(vi) The gift (or sale at below fair market value) of
surplus real property (such as land, homes, and commercial or
industrial structures) in the renewal community to
neighborhood organizations, community development
corporations, or private companies.
(B) Recognition of past efforts
For purposes of this section, in evaluating the course of
action agreed to by any State or local government, the
Secretary of Housing and Urban Development shall take into
account the past efforts of such State or local government in
reducing the various burdens borne by employers and employees
in the area involved.
(3) Economic growth promotion requirements
The economic growth promotion requirements of this paragraph
are met with respect to a nominated area if the local government
and the State in which such area is located certify in writing
that such government and State (respectively) have repealed or
reduced, will not enforce, or will reduce within the nominated
area at least 4 of the following:
(A) Licensing requirements for occupations that do not
ordinarily require a professional degree.
(B) Zoning restrictions on home-based businesses which do not
create a public nuisance.
(C) Permit requirements for street vendors who do not create
a public nuisance.
(D) Zoning or other restrictions that impede the formation of
schools or child care centers.
(E) Franchises or other restrictions on competition for
businesses providing public services, including taxicabs,
jitneys, cable television, or trash hauling.
This paragraph shall not apply to the extent that such regulation
of businesses and occupations is necessary for and well-tailored
to the protection of health and safety.
(e) Coordination with treatment of empowerment zones and enterprise
communities
For purposes of this title, the designation under section 1391 of
any area as an empowerment zone or enterprise community shall cease
to be in effect as of the date that the designation of any portion
of such area as a renewal community takes effect.
(f) Definitions and special rules
For purposes of this subchapter -
(1) Governments
If more than one government seeks to nominate an area as a
renewal community, any reference to, or requirement of, this
section shall apply to all such governments.
(2) Local government
The term "local government" means -
(A) any county, city, town, township, parish, village, or
other general purpose political subdivision of a State, and
(B) any combination of political subdivisions described in
subparagraph (A) recognized by the Secretary of Housing and
Urban Development.
(3) Application of rules relating to census tracts
The rules of section 1392(b)(4) shall apply.
(4) Census data
Population and poverty rate shall be determined by using 1990
census data.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-589.)
-REFTEXT-
REFERENCES IN TEXT
The date of the enactment of this section, referred to in subsec.
(a)(4)(A), is the date of enactment of Pub. L. 106-554, which was
approved Dec. 21, 2000.
Section 119(b)(2) of the Housing and Community Development Act of
1974, referred to in subsec. (c)(3)(D), is classified to section
5318(b)(2) of Title 42, The Public Health and Welfare.
-MISC1-
AUDIT AND REPORT
Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(c)], Dec. 21,
2000, 114 Stat. 2763, 2763A-599, provided that: "Not later than
January 31 of 2004, 2007, and 2010, the Comptroller General of the
United States shall, pursuant to an audit of the renewal community
program established under section 1400E of the Internal Revenue
Code of 1986 (as added by subsection (a)) and the empowerment zone
and enterprise community program under subchapter U of chapter 1 of
such Code, report to Congress on such program and its effect on
poverty, unemployment, and economic growth within the designated
renewal communities, empowerment zones, and enterprise
communities."
ADVISORY COUNCIL ON COMMUNITY RENEWAL
Pub. L. 106-554, Sec. 1(a)(7) [title I, subtitle E, part II],
Dec. 21, 2000, 114 Stat. 2763, 2763A-622, as amended by Pub. L.
107-147, title IV, Sec. 417(21), Mar. 9, 2002, 116 Stat. 57,
provided that:
"SEC. 151. SHORT TITLE.
"This part may be cited as the 'Advisory Council on Community
Renewal Act'.
"SEC. 152. ESTABLISHMENT.
"There is established an advisory council to be known as the
'Advisory Council on Community Renewal' (in this part referred to
as the 'Advisory Council').
"SEC. 153. DUTIES OF ADVISORY COUNCIL.
"The Advisory Council shall advise the Secretary of Housing and
Urban Development (in this part referred to as the 'Secretary') on
the designation of renewal communities pursuant to the amendment
made by section 101 [adding this subchapter and amending section
469 of this title] and on the exercise of any other authority
granted to the Secretary pursuant to the amendments made by this
title [see Tables for classification].
"SEC. 154. MEMBERSHIP.
"(a) Number and Appointment. - The Advisory Council shall be
composed of 7 members appointed by the Secretary.
"(b) Chairperson. - The Chairperson of the Advisory Council (in
this part referred to as the 'Chairperson') shall be designated by
the Secretary at the time of the appointment.
"(c) Terms. - Each member shall be appointed for the life of the
Advisory Council.
"(d) Basic Pay. -
"(1) Chairperson. - The Chairperson shall be paid at a rate
equal to the daily rate of basic pay for level III of the
Executive Schedule for each day (including travel time) during
which the Chairperson is engaged in the actual performance of
duties vested in the Advisory Council.
"(2) Other members. - Members other than the Chairperson shall
each be paid at a rate equal to the daily rate of basic pay for
level IV of the Executive Schedule for each day (including travel
time) during which they are engaged in the actual performance of
duties vested in the Advisory Council.
"(e) Travel Expenses. - Each member shall receive travel
expenses, including per diem in lieu of subsistence, in accordance
with applicable provisions under subchapter I of chapter 57 of
title 5, United States Code.
"(f) Quorum. - Four members of the Advisory Council shall
constitute a quorum but a lesser number may hold hearings.
"(g) Meetings. - The Advisory Council shall meet at the call of
the Secretary or the Chairperson.
"SEC. 155. POWERS OF ADVISORY COUNCIL.
"(a) Hearings and Sessions. - The Advisory Council may, for the
purpose of carrying out this part, hold hearings, sit and act at
times and places, take testimony, and receive evidence as the
Advisory Council considers appropriate. The Advisory Council may
administer oaths or affirmations to witnesses appearing before it.
"(b) Powers of Members and Agents. - Any member or agent of the
Advisory Council may, if authorized by the Advisory Council, take
any action which the Advisory Council is authorized to take by this
section.
"(c) Obtaining Official Data. - The Advisory Council may secure
directly from any department or agency of the United States
information necessary to enable it to carry out this part. Upon
request of the Chairperson of the Advisory Council, the head of
that department or agency shall furnish that information to the
Advisory Council.
"SEC. 156. REPORTS.
"(a) Annual Reports. - The Advisory Council shall submit to the
Secretary an annual report for each fiscal year.
"(b) Interim Reports. - The Advisory Council may submit to the
Secretary such interim reports as the Advisory Council considers
appropriate.
"(c) Final Report. - The Advisory Council shall transmit a final
report to the Secretary not later [than] September 30, 2003. The
final report shall contain a detailed statement of the findings and
conclusions of the Advisory Council, together with any
recommendations for legislative or administrative action that the
Advisory Council considers appropriate.
"SEC. 157. TERMINATION.
"(a) In General. - The Advisory Council shall terminate 30 days
after submitting its final report under section 156(c).
"(b) Extension. - Notwithstanding subsection (a), the Secretary
may postpone the termination of the Advisory Council for a period
not to exceed 3 years after the Advisory Council submits its final
report under section 156(c).
"SEC. 158. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.
"The Federal Advisory Committee Act (5 U.S.C. App.) shall not
apply to the Advisory Council.
"SEC. 159. RESOURCES.
"The Secretary shall provide to the Advisory Council appropriate
resources so that the Advisory Council may carry out its duties and
functions under this part.
"SEC. 160. EFFECTIVE DATE.
"This part shall be effective 30 days after the date of its
enactment [Dec. 21, 2000]."
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 1391 of this title.
-FOOTNOTE-
(!1) So in original. The semicolon probably should be a comma.
-End-
-CITE-
26 USC PART II - RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL
COMMUNITY BUSINESS 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART II - RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
-HEAD-
PART II - RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY
BUSINESS
-MISC1-
Sec.
1400F. Renewal community capital gain.
1400G. Renewal community business defined.
-End-
-CITE-
26 USC Sec. 1400F 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART II - RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
-HEAD-
Sec. 1400F. Renewal community capital gain
-STATUTE-
(a) General rule
Gross income does not include any qualified capital gain from the
sale or exchange of a qualified community asset held for more than
5 years.
(b) Qualified community asset
For purposes of this section -
(1) In general
The term "qualified community asset" means -
(A) any qualified community stock,
(B) any qualified community partnership interest, and
(C) any qualified community business property.
(2) Qualified community stock
(A) In general
Except as provided in subparagraph (B), the term "qualified
community stock" means any stock in a domestic corporation if -
(i) such stock is acquired by the taxpayer after December
31, 2001, and before January 1, 2010, at its original issue
(directly or through an underwriter) from the corporation
solely in exchange for cash,
(ii) as of the time such stock was issued, such corporation
was a renewal community business (or, in the case of a new
corporation, such corporation was being organized for
purposes of being a renewal community business), and
(iii) during substantially all of the taxpayer's holding
period for such stock, such corporation qualified as a
renewal community business.
(B) Redemptions
A rule similar to the rule of section 1202(c)(3) shall apply
for purposes of this paragraph.
(3) Qualified community partnership interest
The term "qualified community partnership interest" means any
capital or profits interest in a domestic partnership if -
(A) such interest is acquired by the taxpayer after December
31, 2001, and before January 1, 2010, from the partnership
solely in exchange for cash,
(B) as of the time such interest was acquired, such
partnership was a renewal community business (or, in the case
of a new partnership, such partnership was being organized for
purposes of being a renewal community business), and
(C) during substantially all of the taxpayer's holding period
for such interest, such partnership qualified as a renewal
community business.
A rule similar to the rule of paragraph (2)(B) shall apply for
purposes of this paragraph.
(4) Qualified community business property
(A) In general
The term "qualified community business property" means
tangible property if -
(i) such property was acquired by the taxpayer by purchase
(as defined in section 179(d)(2)) after December 31, 2001,
and before January 1, 2010,
(ii) the original use of such property in the renewal
community commences with the taxpayer, and
(iii) during substantially all of the taxpayer's holding
period for such property, substantially all of the use of
such property was in a renewal community business of the
taxpayer.
(B) Special rule for substantial improvements
The requirements of clauses (i) and (ii) of subparagraph (A)
shall be treated as satisfied with respect to -
(i) property which is substantially improved by the
taxpayer before January 1, 2010, and
(ii) any land on which such property is located.
The determination of whether a property is substantially
improved shall be made under clause (ii) of section
1400B(b)(4)(B), except that "December 31, 2001" shall be
substituted for "December 31, 1997" in such clause.
(c) Qualified capital gain
For purposes of this section -
(1) In general
Except as otherwise provided in this subsection, the term
"qualified capital gain" means any gain recognized on the sale or
exchange of -
(A) a capital asset, or
(B) property used in the trade or business (as defined in
section 1231(b)).
(2) Gain before 2002 or after 2014 not qualified
The term "qualified capital gain" shall not include any gain
attributable to periods before January 1, 2002, or after December
31, 2014.
(3) Certain rules to apply
Rules similar to the rules of paragraphs (3), (4), and (5) of
section 1400B(e) shall apply for purposes of this subsection.
(d) Certain rules to apply
For purposes of this section, rules similar to the rules of
paragraphs (5), (6), and (7) of subsection (b), and subsections (f)
and (g), of section 1400B shall apply; except that for such
purposes section 1400B(g)(2) shall be applied by substituting
"January 1, 2002" for "January 1, 1998" and "December 31, 2014" for
"December 31, 2008".
(e) Regulations
The Secretary shall prescribe such regulations as may be
appropriate to carry out the purposes of this section, including
regulations to prevent the abuse of the purposes of this section.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-594.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 45D, 1223, 1397B, 1400E
of this title.
-End-
-CITE-
26 USC Sec. 1400G 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART II - RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
-HEAD-
Sec. 1400G. Renewal community business defined
-STATUTE-
For purposes of this subchapter, the term "renewal community
business" means any entity or proprietorship which would be a
qualified business entity or qualified proprietorship under section
1397C if references to renewal communities were substituted for
references to empowerment zones in such section.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-596.)
-End-
-CITE-
26 USC PART III - ADDITIONAL INCENTIVES 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART III - ADDITIONAL INCENTIVES
-HEAD-
PART III - ADDITIONAL INCENTIVES
-MISC1-
Sec.
1400H. Renewal community employment credit.
1400I. Commercial revitalization deduction.
1400J. Increase in expensing under section 179.
-End-
-CITE-
26 USC Sec. 1400H 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART III - ADDITIONAL INCENTIVES
-HEAD-
Sec. 1400H. Renewal community employment credit
-STATUTE-
(a) In general
Subject to the modification in subsection (b), a renewal
community shall be treated as an empowerment zone for purposes of
section 1396 with respect to wages paid or incurred after December
31, 2001.
(b) Modification
In applying section 1396 with respect to renewal communities -
(1) the applicable percentage shall be 15 percent, and
(2) subsection (c) thereof shall be applied by substituting
"$10,000" for "$15,000" each place it appears.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-596.)
-End-
-CITE-
26 USC Sec. 1400I 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART III - ADDITIONAL INCENTIVES
-HEAD-
Sec. 1400I. Commercial revitalization deduction
-STATUTE-
(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.
(b) Qualified revitalization buildings and expenditures
For purposes of this section -
(1) Qualified revitalization building
The term "qualified revitalization building" means any building
(and its structural components) if -
(A) the building is placed in service by the taxpayer in a
renewal community and the original use of the building begins
with the taxpayer, or
(B) in the case of such building not described in
subparagraph (A), such building -
(i) is substantially rehabilitated (within the meaning of
section 47(c)(1)(C)) by the taxpayer, and
(ii) is placed in service by the taxpayer after the
rehabilitation in a renewal community.
(2) Qualified revitalization expenditure
(A) In general
The term "qualified revitalization expenditure" means any
amount properly chargeable to capital account for property for
which depreciation is allowable under section 168 (without
regard to this section) and which is -
(i) nonresidential real property (as defined in section
168(e)), or
(ii) section 1250 property (as defined in section 1250(c))
which is functionally related and subordinate to property
described in clause (i).
(B) Certain expenditures not included
(i) Acquisition cost
In the case of a building described in paragraph (1)(B),
the cost of acquiring the building or interest therein shall
be treated as a qualified revitalization expenditure only to
the extent that such cost does not exceed 30 percent of the
aggregate qualified revitalization expenditures (determined
without regard to such cost) with respect to such building.
(ii) Credits
The term "qualified revitalization expenditure" does not
include any expenditure which the taxpayer 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) Dollar limitation
The aggregate amount which may be treated as qualified
revitalization expenditures with respect to any qualified
revitalization building shall not exceed the lesser of -
(1) $10,000,000, or
(2) the commercial revitalization expenditure amount allocated
to such building under this section by the commercial
revitalization agency for the State in which the building is
located.
(d) Commercial revitalization expenditure amount
(1) In general
The aggregate commercial revitalization expenditure amount
which a commercial revitalization agency may allocate for any
calendar year is the amount of the State commercial
revitalization expenditure ceiling determined under this
paragraph for such calendar year for such agency.
(2) State commercial revitalization expenditure ceiling
The State commercial revitalization expenditure ceiling
applicable to any State -
(A) for each calendar year after 2001 and before 2010 is
$12,000,000 for each renewal community in the State, and
(B) for each calendar year thereafter is zero.
(3) Commercial revitalization agency
For purposes of this section, the term "commercial
revitalization agency" means any agency authorized by a State to
carry out this section.
(4) Time and manner of allocations
Allocations under this section shall be made at the same time
and in the same manner as under paragraphs (1) and (7) of section
42(h).
(e) Responsibilities of commercial revitalization agencies
(1) Plans for allocation
Notwithstanding any other provision of this section, the
commercial revitalization expenditure 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 participation 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 nonprofit
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) Special rules
(1) Deduction in lieu of depreciation
The deduction provided by this section for qualified
revitalization expenditures shall -
(A) with respect to the deduction determined under subsection
(a)(1), be in lieu of any depreciation deduction otherwise
allowable on account of one-half of such expenditures, and
(B) with respect to the deduction determined under subsection
(a)(2), be in lieu of any depreciation deduction otherwise
allowable on account of all of such expenditures.
(2) Basis adjustment, etc.
For purposes of sections 1016 and 1250, the deduction under
this section shall be treated in the same manner as a
depreciation deduction. For purposes of section 1250(b)(5), the
straight line method of adjustment shall be determined without
regard to this section.
(3) Substantial rehabilitations treated as separate buildings
A substantial rehabilitation (within the meaning of section
47(c)(1)(C)) of a building shall be treated as a separate
building for purposes of subsection (a).
(4) Clarification of allowance of deduction under minimum tax
Notwithstanding section 56(a)(1), the deduction under this
section shall be allowed in determining alternative minimum
taxable income under section 55.
(g) Termination
This section shall not apply to any building placed in service
after December 31, 2009.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-596.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 469 of this title.
-End-
-CITE-
26 USC Sec. 1400J 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter X - Renewal Communities
PART III - ADDITIONAL INCENTIVES
-HEAD-
Sec. 1400J. Increase in expensing under section 179
-STATUTE-
(a) In general
For purposes of section 1397A -
(1) a renewal community shall be treated as an empowerment
zone,
(2) a renewal community business shall be treated as an
enterprise zone business, and
(3) qualified renewal property shall be treated as qualified
zone property.
(b) Qualified renewal property
For purposes of this section -
(1) In general
The term "qualified renewal property" means any property to
which section 168 applies (or would apply but for section 179) if
-
(A) such property was acquired by the taxpayer by purchase
(as defined in section 179(d)(2)) after December 31, 2001, and
before January 1, 2010, and
(B) such property would be qualified zone property (as
defined in section 1397D) if references to renewal communities
were substituted for references to empowerment zones in section
1397D.
(2) Certain rules to apply
The rules of subsections (a)(2) and (b) of section 1397D shall
apply for purposes of this section.
-SOURCE-
(Added Pub. L. 106-554, Sec. 1(a)(7) [title I, Sec. 101(a)], Dec.
21, 2000, 114 Stat. 2763, 2763A-598.)
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 1400E of this title.
-End-
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