Supermarket Tax Credit for Underserved Areas Act

I 116TH CONGRESS 1ST SESSION H. R. 3123 To amend the Internal Revenue Code of 1986 to provide tax incentives for the establishment of supermarkets in certain underserved areas. IN THE HOUSE OF REPRESENTATIVES JUNE 5, 2019 Mr. COHEN (for himself, Ms. NORTON, Ms. CLARKE of New York, Mr. GRI- JALVA, Mr. RASKIN, Ms. LEE of California, Ms. KELLY of Illinois, Mr. RUSH, Ms. SCHAKOWSKY, and Mr. KHANNA) 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 tax incentives for the establishment of supermarkets in certain underserved areas. 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. 3 This Act may be cited as the ‘‘Supermarket Tax 4 Credit for Underserved Areas Act’’. 5 VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS 2 •HR 3123 IH SEC. 2. TAX INCENTIVES FOR ESTABLISHMENT OF SUPER- 1 MARKETS IN CERTAIN UNDERSERVED AREAS. 2 (a) IN GENERAL.—Subchapter Y of chapter 1 of the 3 Internal Revenue Code of 1986 is amended by adding at 4 the end the following new part: 5 ‘‘PART IV—TAX INCENTIVES FOR SUPERMARKETS 6 IN UNDERSERVED AREAS 7 ‘‘Sec. 1400V–1. Increased rehabilitation credit. ‘‘Sec. 1400V–2. Increased work opportunity tax credit. ‘‘Sec. 1400V–3. Credit for sales of locally grown fresh fruits and vegetables. ‘‘Sec. 1400V–4. Definitions. ‘‘SEC. 1400V–1. INCREASED REHABILITATION CREDIT. 8 ‘‘(a) IN GENERAL.—In the case of a qualified reha- 9 bilitated building (as defined in section 47) which is an 10 underserved area supermarket, subsection (a) of section 11 47 shall be applied— 12 ‘‘(1) by substituting ‘12 percent’ for ‘10 per- 13 cent’ in paragraph (1), and 14 ‘‘(2) by substituting ‘24 percent’ for ‘20 per- 15 cent’ in paragraph (2). 16 ‘‘(b) UNDERSERVED AREA SUPERMARKET.—For 17 purposes of subsection (a), a qualified rehabilitated build- 18 ing shall be treated as meeting the requirements of sub- 19 paragraphs (A), (B), (C), and (D) of section 1400V– 20 4(a)(2) if it is reasonable to believe that such building will 21 meet such requirements as of the close of the taxable year 22 in which such building is placed in service. 23 VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS 3 •HR 3123 IH ‘‘(c) TERMINATION.—Subsection (a) shall only apply 1 to buildings placed in service after December 31, 2019, 2 and before January 1, 2022. 3 ‘‘SEC. 1400V–2. INCREASED WORK OPPORTUNITY TAX CRED- 4 IT. 5 ‘‘(a) IN GENERAL.—In the case of an individual em- 6 ployed in the trade or business of operating a new under- 7 served area supermarket, the limitation otherwise in effect 8 under paragraph (3) of section 51(b) with respect to such 9 individual shall be increased by $1,000. 10 ‘‘(b) TERMINATION.—Subsection (a) shall only apply 11 to wages paid in taxable years beginning after December 12 31, 2019, and before January 1, 2025. 13 ‘‘SEC. 1400V–3. CREDIT FOR SALES OF LOCALLY GROWN 14 FRESH FRUITS AND VEGETABLES. 15 ‘‘(a) IN GENERAL.—For purposes of section 38, the 16 underserved area supermarket fruit and vegetable credit 17 determined under this section for the taxable year is 15 18 percent of the gross receipts from the retail sale of locally 19 grown fresh fruits and vegetables in the trade or business 20 of operating a new underserved area supermarket. 21 ‘‘(b) TERMINATION.—Subsection (a) shall only apply 22 to taxable years beginning after December 31, 2020, and 23 before January 1, 2025. 24 VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS 4 •HR 3123 IH ‘‘SEC. 1400V–4. DEFINITIONS. 1 ‘‘For purposes of this part— 2 ‘‘(1) UNDERSERVED AREA SUPERMARKET.— 3 The term ‘underserved area supermarket’ means any 4 supermarket located in an underserved area. 5 ‘‘(2) NEW UNDERSERVED AREA SUPER- 6 MARKET.—The term ‘new underserved area super- 7 market’ means any underserved area supermarket 8 which— 9 ‘‘(A) is placed in service after December 10 31, 2019, and 11 ‘‘(B) was not a supermarket at any time 12 during the 3-year period ending on the date 13 such underserved area supermarket is placed in 14 service. 15 ‘‘(3) SUPERMARKET.—The term ‘supermarket’ 16 means any building if— 17 ‘‘(A) not less than 12,000 square feet and 18 not more than 80,000 square feet of such build- 19 ing is used for selling items at retail, 20 ‘‘(B) at least 7 percent of the square feet 21 of such building which is used for selling items 22 at retail is used for selling produce, meat, fish, 23 deli, and dairy items, 24 VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS 5 •HR 3123 IH ‘‘(C) gross sales of items sold at retail 1 from such building exceed $2,000,000 annually, 2 and 3 ‘‘(D) at least 7 percent of such gross sales 4 are attributable to sales of produce, meat, fish, 5 deli, and dairy items. 6 ‘‘(4) UNDERSERVED AREA.—The term ‘under- 7 served area’ means— 8 ‘‘(A) any enterprise community or em- 9 powerment zone with respect to which a des- 10 ignation was in effect under section 1391 on 11 December 31, 2014, and 12 ‘‘(B) any renewal community with respect 13 to which a designation was in effect under sec- 14 tion 1400E on December 31, 2009.’’. 15 (b) CREDIT TO BE PART OF GENERAL BUSINESS 16 CREDIT.—Section 38(b) of such Code is amended by strik- 17 ing ‘‘plus’’ at the end of paragraph (31), by striking the 18 period at the end of paragraph (32) and inserting ‘‘, plus’’, 19 and by adding at the end the following new paragraph: 20 ‘‘(33) the underserved area supermarket fruit 21 and vegetable credit determined under section 22 1400V–3.’’. 23 VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS 6 •HR 3123 IH (c) CLERICAL AMENDMENT.—The table of parts for 1 subchapter Y of chapter 1 of such Code is amended by 2 adding at the end the following new item: 3 ‘‘PART IV. TAX INCENTIVES FOR SUPERMARKETS IN UNDERSERVED AREAS’’. (d) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2019. 6 Æ VerDate Sep 11 2014 01:57 Jun 13, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3123.IH H3123 kjohnson on DSK79L0C42 with BILLS