Home Lead Safety Tax Credit Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 2875 To amend the Internal Revenue Code of 1986 to provide a tax credit for taxpayers who remove lead-based hazards. IN THE HOUSE OF REPRESENTATIVES APRIL 28, 2021 Mr. COHEN (for himself and Mr. MCKINLEY) 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 provide a tax credit for taxpayers who remove lead-based hazards. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE; FINDINGS; PURPOSE. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Home Lead Safety Tax Credit Act of 2021’’. 5 (b) FINDINGS.—Congress finds that: 6 (1) Lead is a metal that can produce a wide 7 range of health effects in humans when ingested. 8 Children are more vulnerable to lead poisoning than 9 adults. 10 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2875 IH (2) Lead poisoning is a serious, entirely pre- 1 ventable threat to a child’s intelligence, behavior, 2 and learning. In severe cases, lead poisoning can re- 3 sult in death. 4 (3) According to the Department of Housing 5 and Urban Development, approximately 22,000,000 6 housing units nationwide have at least 1 lead paint 7 hazard. 8 (4) While appropriated Federal lead abatement 9 programs, such as the Lead Hazard Control and 10 Healthy Homes grant programs, have helped reduce 11 childhood lead poisoning, funding constraints have 12 limited their impact to only about 400,000 homes 13 since 1993. 14 (5) Childhood lead poisoning can be dramati- 15 cally reduced by the abatement or complete removal 16 of all lead-based hazards. Empirical studies also 17 have shown substantial reductions in lead poisoning 18 when the affected properties have undergone ‘‘in- 19 terim control measures’’ that are less costly than 20 abatement. 21 (c) PURPOSE.—The purpose of this section is to en- 22 courage the safe removal of lead hazards from homes and 23 thereby decrease the number of children who suffer re- 24 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2875 IH duced intelligence, learning difficulties, behavioral prob- 1 lems, and other health consequences due to lead poisoning. 2 SEC. 2. HOME LEAD HAZARD REDUCTION ACTIVITY TAX 3 CREDIT. 4 (a) IN GENERAL.—Subpart C of part IV of sub- 5 chapter A of chapter 1 of the Internal Revenue Code of 6 1986 is amended by inserting after section 36B the fol- 7 lowing new section: 8 ‘‘SEC. 36C. HOME LEAD HAZARD REDUCTION ACTIVITY. 9 ‘‘(a) ALLOWANCE OF CREDIT.— 10 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 11 there shall be allowed as a credit against the tax im- 12 posed by this subtitle for the taxable year an amount 13 equal to 50 percent of the lead hazard reduction ac- 14 tivity cost paid or incurred by the taxpayer during 15 the taxable year for each eligible dwelling unit. 16 ‘‘(2) ELECTION TO APPLY COSTS TO PRIOR 17 YEAR.—For purposes of this section, a taxpayer may 18 elect to treat any lead hazard reduction activity cost 19 paid or incurred by the taxpayer during the taxable 20 year as having been paid or incurred during the pre- 21 ceding taxable year. 22 ‘‘(b) LIMITATIONS.— 23 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 24 the amount of the credit allowed under subsection 25 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2875 IH (a) for any eligible dwelling unit for any taxable year 1 shall not exceed— 2 ‘‘(A) $3,000 in the case of lead hazard re- 3 duction activity cost including lead abatement 4 measures described in clauses (i), (ii), (iv), or 5 (v) of subsection (c)(1)(A), and 6 ‘‘(B) $1,000 in the case of lead hazard re- 7 duction activity cost including interim lead con- 8 trol measures described in clauses (i), (iii), (iv), 9 and (v) of subsection (c)(1)(A). 10 ‘‘(2) OTHER TAX CREDITS.—In the case of any 11 credit against State or local tax liabilities which is 12 allowable under the laws of any State or political 13 subdivision thereof to a taxpayer with respect to any 14 costs paid or incurred by the taxpayer which would 15 otherwise qualify as lead hazard reduction activity 16 costs under this section, the amount of the credit al- 17 lowed under subsection (a) for any eligible dwelling 18 unit for any taxable year (determined after applica- 19 tion of paragraph (1)) shall not exceed an amount 20 equal to the excess, if any, of— 21 ‘‘(A) the lead hazard reduction activity 22 cost paid or incurred by the taxpayer during 23 the taxable year for such unit, over 24 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2875 IH ‘‘(B) the amount of such State or local tax 1 credit. 2 ‘‘(3) LIMITATION PER RESIDENCE.—The cumu- 3 lative amount of the credit allowed under subsection 4 (a) for an eligible dwelling unit for all taxable years 5 shall not exceed $4,000. 6 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur- 7 poses of this section— 8 ‘‘(1) LEAD HAZARD REDUCTION ACTIVITY 9 COST.— 10 ‘‘(A) IN GENERAL.—The term ‘lead hazard 11 reduction activity cost’ means, with respect to 12 any eligible dwelling unit— 13 ‘‘(i) the cost for a certified risk asses- 14 sor to conduct an assessment to determine 15 the presence of a lead-based hazard (as 16 such terms are defined by the Secretary, in 17 consultation with the Administrator of the 18 Environmental Protection Agency), 19 ‘‘(ii) the cost for performing lead 20 abatement measures by a certified lead 21 abatement supervisor (as such term is de- 22 fined by the Secretary, in consultation with 23 the Administrator of the Environmental 24 Protection Agency), including the removal 25 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2875 IH of paint, dust, or pipes, the permanent en- 1 closure or encapsulation of lead-based 2 paint or pipes, the replacement of painted 3 surfaces, windows, or fixtures, or the re- 4 moval or permanent covering of soil when 5 lead-based hazards are present, 6 ‘‘(iii) the cost for performing interim 7 lead control measures to reduce exposure 8 or likely exposure to lead-based hazards, 9 including specialized cleaning, repairs, 10 maintenance, painting, temporary contain- 11 ment, ongoing monitoring of lead-based 12 hazards, and the establishment and oper- 13 ation of management and resident edu- 14 cation programs, but only if such measures 15 are evaluated and completed by a certified 16 lead abatement supervisor using accepted 17 methods, are conducted by a qualified con- 18 tractor, and have an expected useful life of 19 more than 10 years, 20 ‘‘(iv) the cost for a certified lead 21 abatement supervisor, persons working 22 under the supervision of such supervisor, 23 or a qualified contractor to perform all 24 preparation, cleanup, disposal, and clear- 25 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2875 IH ance testing activities associated with the 1 lead abatement measures or interim lead 2 control measures, and 3 ‘‘(v) costs incurred by or on behalf of 4 any occupant of such dwelling unit for any 5 relocation which is necessary to achieve oc- 6 cupant protection (as such term is defined 7 by the Secretary, in consultation with the 8 Administrator of the Environmental Pro- 9 tection Agency). 10 ‘‘(B) LIMITATION.—The term ‘lead hazard 11 reduction activity cost’ does not include any 12 cost to the extent such cost is funded by any 13 grant, contract, or otherwise by another person 14 or any governmental agency. 15 ‘‘(2) ELIGIBLE DWELLING UNIT.— 16 ‘‘(A) IN GENERAL.—The term ‘eligible 17 dwelling unit’ means any dwelling unit— 18 ‘‘(i) which was placed in service before 19 1978, and 20 ‘‘(ii) which is located in the United 21 States, 22 without regard to whether such dwelling unit is 23 subsidized or assisted under any Federal pro- 24 gram. 25 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2875 IH ‘‘(B) DWELLING UNIT.—The term ‘dwell- 1 ing unit’ has the meaning given such term by 2 section 280A(f)(1). 3 ‘‘(3) QUALIFIED CONTRACTOR.—The term 4 ‘qualified contractor’ means any contractor who has 5 successfully completed a training course on lead safe 6 work practices which has been approved by the De- 7 partment of Housing and Urban Development and 8 the Environmental Protection Agency. 9 ‘‘(4) DOCUMENTATION REQUIRED FOR CREDIT 10 ALLOWANCE.—No credit shall be allowed under sub- 11 section (a) with respect to any eligible dwelling unit 12 for any taxable year unless, after lead hazard reduc- 13 tion activity is complete, a certified inspector (as 14 such term is defined by the Secretary, in consulta- 15 tion with the Administrator of the Environmental 16 Protection Agency) or certified risk assessor pro- 17 vides written documentation to the taxpayer that in- 18 cludes— 19 ‘‘(A) evidence that— 20 ‘‘(i) the eligible dwelling unit meets 21 the lead hazard reduction criteria defined 22 by the Secretary, in consultation with the 23 Administrator of the Environmental Pro- 24 tection Agency, or 25 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2875 IH ‘‘(ii) the eligible dwelling unit meets 1 lead hazard evaluation criteria established 2 under an authorized State or local pro- 3 gram, and 4 ‘‘(B) documentation showing that the lead 5 hazard reduction activity meets the require- 6 ments of this section. 7 ‘‘(5) BASIS REDUCTION.—The basis of any 8 property for which a credit is allowable under sub- 9 section (a) shall be reduced by the amount of such 10 credit. 11 ‘‘(6) NO DOUBLE BENEFIT.—Any deduction al- 12 lowable for costs taken into account in computing 13 the amount of the credit for lead hazard reduction 14 activity shall be reduced by the amount of such cred- 15 it attributable to such costs. 16 ‘‘(d) INFLATION ADJUSTMENT.—In the case of any 17 taxable year beginning in a calendar year after 2021, each 18 of the dollar amounts in subsection (b) shall be increased 19 by an amount equal to— 20 ‘‘(1) such dollar amount, multiplied by 21 ‘‘(2) the cost-of-living adjustment determined 22 under section 1(f)(3) for the calendar year in which 23 the taxable year begins, determined by substituting 24 VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2875 IH ‘calendar year 2020’ for ‘calendar year 2016’ in sub- 1 paragraph (A)(ii) thereof. 2 Any increase determined under the preceding sentence 3 shall be rounded to the nearest multiple of $100. 4 ‘‘(e) TERMINATION.—This section shall not apply to 5 any amount paid or incurred after December 31, 2024.’’. 6 (b) CONFORMING AMENDMENTS.— 7 (1) Section 1324(b)(2) of title 31, United 8 States Code, is amended by inserting ‘‘, 36C’’ after 9 ‘‘36B’’. 10 (2) The table of sections for subpart C of part 11 IV of subchapter A of chapter 1 of the Internal Rev- 12 enue Code of 1986 is amended by inserting before 13 the item relating to section 37 the following new 14 item: 15 ‘‘Sec. 36C. Home lead hazard reduction activity.’’. (c) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to lead hazard reduction activity 17 costs incurred after December 31, 2020, in taxable years 18 ending after such date. 19 Æ VerDate Sep 11 2014 04:34 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H2875.IH H2875 kjohnson on DSK79L0C42PROD with BILLS