Residential Recovery Zone Act

I 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 Serv- ices, 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 resi- dences in residential recovery zones, and for other pur- poses. 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 ‘‘Residential Recovery 4 Zone Act’’. 5 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 3790 IH SEC. 2. RESIDENTIAL RECOVERY ZONE HOMEBUYER CRED- 1 IT. 2 (a) IN GENERAL.—Subpart A of part IV of sub- 3 chapter A of chapter 1 of the Internal Revenue Code of 4 1986 is amended by inserting after section 25D the fol- 5 lowing new section: 6 ‘‘SEC. 25E. RESIDENTIAL RECOVERY ZONE HOMEBUYER 7 CREDIT. 8 ‘‘(a) ALLOWANCE OF CREDIT.— 9 ‘‘(1) IN GENERAL.—In the case of an individual 10 who purchases a principal residence in a residential 11 recovery zone during a taxable year, there shall be 12 allowed as a credit against the tax imposed by this 13 subtitle for such taxable year an amount equal to 10 14 percent of the purchase price of the residence. 15 ‘‘(2) TIMING.—At the election of an individual, 16 the credit allowed under subsection (a) for a taxable 17 year may be allowed instead during any one on the 18 subsequent 3 taxable years. 19 ‘‘(b) LIMITATIONS.— 20 ‘‘(1) DOLLAR LIMITATION.— 21 ‘‘(A) IN GENERAL.—Except as otherwise 22 provided in this paragraph, the credit allowed 23 under subsection (a) shall not exceed $8,000. 24 ‘‘(B) MARRIED INDIVIDUALS FILING SEPA- 25 RATELY.—In the case of a married individual 26 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 3790 IH filing a separate return, subparagraph (A) shall 1 be applied by substituting ‘$4,000’ for ‘$8,000’. 2 ‘‘(C) OTHER INDIVIDUALS.—If two or 3 more individuals who are not married purchase 4 a principal residence, the amount of the credit 5 allowed under subsection (a) shall be allocated 6 among such individuals in such manner as the 7 Secretary may prescribe, except that the total 8 amount of the credits allowed to all such indi- 9 viduals shall not exceed $8,000. 10 ‘‘(2) LIMITATION BASED ON PURCHASE 11 PRICE.—No credit shall be allowed under subsection 12 (a) for the purchase of any residence if the purchase 13 price of such residence exceeds $1,500,000. 14 ‘‘(c) DEFINITIONS.—For purposes of this section— 15 ‘‘(1) RESIDENTIAL RECOVERY ZONE DE- 16 FINED.— 17 ‘‘(A) IN GENERAL.—The term ‘residential 18 recovery zone’ means, with respect to a Feder- 19 ally declared disaster, a population census tract 20 that is— 21 ‘‘(i) in the disaster area related to 22 such disaster, and 23 ‘‘(ii) designated under subparagraph 24 (B). 25 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 3790 IH ‘‘(B) DESIGNATION.—A population census 1 tract is designated under this paragraph with 2 respect to a Federally declared disaster if, dur- 3 ing the period beginning on the earliest incident 4 date specified in the declaration to which such 5 area relates and ending on the date that is one 6 year after such date— 7 ‘‘(i) the chief executive officer of the 8 State in which the tract is located— 9 ‘‘(I) nominates the tract for des- 10 ignation as a residential recovery 11 zone, and 12 ‘‘(II) notifies the Secretary in 13 writing of such nomination, and 14 ‘‘(ii) the Secretary certifies such nomi- 15 nation and designates such tract as a resi- 16 dential recovery zone. 17 ‘‘(C) DURATION OF DESIGNATION.—A des- 18 ignation under subparagraph (B) shall termi- 19 nate on the date that is 3 years after the date 20 of the certification described in subparagraph 21 (B)(ii). 22 ‘‘(D) STATE; FEDERALLY DECLARED DIS- 23 ASTER; DISASTER AREA.—The term ‘State’ has 24 the meaning given such terms in section 25 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 3790 IH 1400Z–1, and ‘Federally declared disaster’ and 1 ‘disaster area’ have the meaning given such 2 terms in section 165(i). 3 ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin- 4 cipal residence’ has the same meaning as when used 5 in section 121. 6 ‘‘(3) PURCHASE; PURCHASE PRICE.—The term 7 ‘purchase’ and ‘purchase price’ have the meanings 8 given such terms in section 36(c). 9 ‘‘(d) EXCEPTIONS.—No credit under subsection (a) 10 shall be allowed to any taxpayer for any taxable year with 11 respect to the purchase of a residence if— 12 ‘‘(1) a deduction under section 151 with respect 13 to such taxpayer is allowable to another taxpayer for 14 such taxable year, or 15 ‘‘(2) the taxpayer fails to attach to the return 16 of tax for such taxable year a properly executed copy 17 of the settlement statement used to complete such 18 purchase. 19 ‘‘(e) RECAPTURE OF CREDIT.— 20 ‘‘(1) IN GENERAL.—If a residence with respect 21 to which a credit was allowed under subsection (a) 22 ceases to be the principal residence of the taxpayer 23 before the end of the 3-year period beginning on the 24 date of the purchase of such residence the tax im- 25 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 3790 IH posed by this chapter for the taxable year of ces- 1 sation shall be increased by the amount of the credit 2 so allowed and claimed. 3 ‘‘(2) EXCEPTIONS.— 4 ‘‘(A) DEATH OF TAXPAYER.—Paragraph 5 (1) shall not apply if the cessation is attrib- 6 utable to the taxpayer’s death. 7 ‘‘(B) INVOLUNTARY CONVERSION.—Para- 8 graph (1) shall not apply if the cessation is at- 9 tributable to a compulsorily or involuntarily 10 conversion (within the meaning of section 11 1033(a)) and the taxpayer acquires a new prin- 12 cipal residence during the 2-year period begin- 13 ning on the date of such cessation. 14 ‘‘(C) SPECIAL RULE FOR MEMBERS OF 15 THE ARMED FORCES, ETC.— 16 ‘‘(i) IN GENERAL.—Paragraph (1) 17 shall not apply if the cessation is attrib- 18 utable to Government orders received by 19 such individual, or such individual’s 20 spouse, for service on qualified official ex- 21 tended duty as— 22 ‘‘(I) a member of the uniformed 23 services, 24 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 3790 IH ‘‘(II) a member of the Foreign 1 Service of the United States, or 2 ‘‘(III) an employee of the intel- 3 ligence community. 4 ‘‘(ii) DEFINITIONS.—Any term used 5 in this subparagraph which is also used in 6 section 121(d)(9) shall have the same 7 meaning as when used in such para- 8 graph.’’. 9 (b) CLERICAL AMENDMENT.—The table of sections 10 for subpart A of part IV of subchapter A of chapter 1 11 of the Internal Revenue Code of 1986 is amended by in- 12 serting after the item relating to section 25D the following 13 new item: 14 ‘‘Sec. 25E. Residential recovery zone homebuyer credit.’’. (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply with respect to purchases in tax- 16 able years beginning after the date that is 1 year before 17 the date of the enactment of this Act. 18 SEC. 3. TREATMENT AS OPPORTUNITY ZONES. 19 (a) IN GENERAL.—Section 1400Z–1 of the Internal 20 Revenue Code of 1986 is amended by adding at the end 21 the following new subsection: 22 ‘‘(g) CERTAIN DISASTER ZONES.— 23 ‘‘(1) DESIGNATION.—With respect to a Feder- 24 ally declared disaster, the chief executive officer of 25 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 3790 IH a State may designate under this paragraph not 1 more than 5 percent of the applicable disaster tracts 2 in such State with respect to such disaster. 3 ‘‘(2) NO EFFECT ON LIMITATION ON NUMBER 4 OF DESIGNATIONS.—An applicable disaster tract 5 designated under paragraph (1) shall not be taken 6 into account in determining the limitation under 7 subsection (d). 8 ‘‘(3) APPLICABLE DISASTER TRACT.—The term 9 ‘applicable disaster tract’ means, with respect to a 10 Federally declared disaster, a population census 11 tract in the disaster area related to such disaster. 12 ‘‘(4) FEDERALLY DECLARED DISASTER; DIS- 13 ASTER AREA.—In this subsection, the term ‘Feder- 14 ally declared disaster’ and the term ‘disaster area’ 15 have the meaning given such terms in section 165(i). 16 ‘‘(5) APPLICABLE START DATE.— 17 ‘‘(A) QUALIFIED OPPORTUNITY FUND 18 BUSINESSES AND PROPERTY.—In the case of an 19 applicable disaster tract designated under para- 20 graph (1), subparagraphs (B)(i)(I), (C)(i), and 21 (D)(i)(I) of section 1400Z–2(d)(2) shall each be 22 applied by substituting ‘the applicable start 23 date’ for ‘December 31, 2017’. 24 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 3790 IH ‘‘(B) EXTENSION OF DETERMINATION PE- 1 RIOD.—In the case of an applicable disaster 2 tract designated under paragraph (1), section 3 (c)(2)(B) shall be applied by substituting ‘the 4 applicable start date’ for ‘the date of the enact- 5 ment of the Tax Cuts and Jobs Act’. 6 ‘‘(C) APPLICABLE START DATE.—The term 7 ‘applicable start date’ means, with respect to a 8 disaster area, the earliest incident date specified 9 in the declaration to which such area relates.’’. 10 (b) EFFECTIVE DATE.—The amendments made by 11 this section shall apply with respect to Federally declared 12 disasters declared after the date of the enactment of this 13 Act. 14 SEC. 4. CREDIT UNDER THE COMMUNITY REINVESTMENT 15 ACT OF 1977 FOR LENDING IN A RESIDENTIAL 16 RECOVERY ZONE. 17 Section 804 of the Community Reinvestment Act of 18 1977 (12 U.S.C. 2903) is amended by adding at the end 19 the following: 20 ‘‘(e) RESIDENTIAL RECOVERY ZONE LOANS.—In as- 21 sessing and taking into account, under subsection (a), the 22 record of a financial institution, the appropriate Federal 23 financial supervisory agency shall consider as a factor 24 lending activities to individuals and businesses that are lo- 25 VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 3790 IH cated in a residential recovery zone (as defined under sec- 1 tion 36A(c) of the Internal Revenue Code of 1986).’’. 2 Æ VerDate Sep 11 2014 19:28 Jul 27, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H3790.IH H3790 pamtmann on DSKBFK8HB2PROD with BILLS