Disaster Savings and Resilient Construction Act of 2020

I 116TH CONGRESS 2D SESSION H. R. 7979 To amend the Internal Revenue Code of 1986 to provide a credit for owning certain disaster resilient property. IN THE HOUSE OF REPRESENTATIVES AUGUST 7, 2020 Mr. PASCRELL (for himself, Mr. REED, Mr. DEFAZIO, and Mr. DIAZ-BALART) 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 credit for owning certain disaster resilient property. 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 ‘‘Disaster Savings and 4 Resilient Construction Act of 2020’’. 5 SEC. 2. DISASTER RESILIENT PROPERTY TAX CREDIT. 6 (a) IN GENERAL.—Subpart B of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 1986 is amended by inserting after section 30D the fol- 9 lowing new section: 10 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 7979 IH ‘‘SEC. 30E. DISASTER RESILIENT PROPERTY. 1 ‘‘(a) GENERAL RULE.—There shall be allowed as a 2 credit against the tax imposed by this chapter for the tax- 3 able year an amount equal to the applicable amount for 4 each qualified building placed in service during the taxable 5 year. 6 ‘‘(b) APPLICABLE AMOUNT.—For purposes of sub- 7 section (a)— 8 ‘‘(1) COMMERCIAL PROPERTY.—ln the case of a 9 qualified commercial property, the applicable amount 10 is the lesser of— 11 ‘‘(A) 1 percent of the cost of the building, 12 or 13 ‘‘(B) $25,000 per building. 14 ‘‘(2) RESIDENTIAL PROPERTY.—ln the case of a 15 qualified residential property, the applicable amount 16 is the lesser of— 17 ‘‘(A) 1 percent of the cost of the property, 18 or 19 ‘‘(B) $3,000 per property. 20 ‘‘(c) QUALIFIED BUILDING.—For purposes of sub- 21 section (a)— 22 ‘‘(1) IN GENERAL.—The term ‘qualified build- 23 ing’ means a building— 24 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 7979 IH ‘‘(A) owned by the taxpayer in a disaster 1 area determined as a result of a federally de- 2 clared major disaster, 3 ‘‘(B) the construction of which began after 4 the date of such disaster in that area, 5 ‘‘(C) which— 6 ‘‘(i) is qualified commercial property 7 placed in service for commercial purposes, 8 or 9 ‘‘(ii) is qualified residential property 10 placed in service for residential purposes, 11 and 12 ‘‘(D) for which a certificate of occupancy is 13 issued before the end of the 3-year period be- 14 ginning on the date of such disaster declaration 15 in that area. 16 ‘‘(2) QUALIFIED COMMERCIAL PROPERTY.—The 17 term ‘qualified commercial property’ means a build- 18 ing that is— 19 ‘‘(A) located in the United States, 20 ‘‘(B) defined in the scope of the most re- 21 cent International Building Code published by 22 the International Code Council, and 23 ‘‘(C) designed and constructed to meet re- 24 silient construction requirements. 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 7979 IH ‘‘(3) QUALIFIED RESIDENTIAL PROPERTY.— 1 The term ‘qualified residential property’ means a 2 building that is— 3 ‘‘(A) located in the United States, 4 ‘‘(B) defined in the scope of the most re- 5 cent International Residential Code published 6 by the International Code Council, and 7 ‘‘(C) designed and constructed to meet re- 8 silient construction requirements. 9 ‘‘(d) RESILIENT CONSTRUCTION REQUIREMENTS.— 10 For purposes of this section— 11 ‘‘(1) IN GENERAL.—The resilient construction 12 requirements with respect to a property are that the 13 property is designed and constructed to— 14 ‘‘(A) resist hazards brought on by a major 15 disaster and continues to provide its primary 16 functions after a major disaster, 17 ‘‘(B) reduce the magnitude or duration of 18 a disruptive event, and 19 ‘‘(C) have the absorptive capacity, adaptive 20 capacity, and recoverability to withstand a po- 21 tentially disruptive event. 22 ‘‘(2) TREATED AS MEETING RESILIENCY RE- 23 QUIREMENTS.—For purposes of paragraph (1)— 24 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 7979 IH ‘‘(A) in the case of a qualified commercial 1 property, the property shall be treated as meet- 2 ing the requirements specified in paragraph (1) 3 if the property is a building which— 4 ‘‘(i) was designed to meet the require- 5 ments of the most recent International 6 Building Code published by the Inter- 7 national Code Council and meets the FOR- 8 TIFIED Commercial Wind Standard pub- 9 lished by the Insurance Institute for Busi- 10 ness and Home Safety, or the most recent 11 International Wildland Urban Interface 12 Code published by the International Code 13 Council, 14 ‘‘(ii) in the case of a substantial ren- 15 ovation, such renovation meets the require- 16 ments of— 17 ‘‘(I) the most recent Inter- 18 national Building Code published by 19 the International Code Council and 20 the FORTIFIED Commercial Wind 21 Standard published by the Insurance 22 Institute for Business and Home 23 Safety, or 24 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 7979 IH ‘‘(II) the most recent Inter- 1 national Wildland Urban Interface 2 Code published by the International 3 Code Council, or 4 ‘‘(iii) in the case of a qualified com- 5 mercial property in a high seismic hazard 6 zone, was designed and built to achieve a 7 reduction in the earthquake risks relative 8 to code-designed buildings by minimizing 9 building damage and promoting contin- 10 gency planning for utility disruption and 11 other threats to functional recovery that 12 are described in the U.S. Resiliency Coun- 13 cil Rating System with specific design cri- 14 teria achieving the Platinum or Gold rat- 15 ing, and 16 ‘‘(B) in the case of a qualified residential 17 property, the property shall be treated as meet- 18 ing the requirements specified in paragraph (1) 19 if— 20 ‘‘(i) the property is a building 21 which— 22 ‘‘(I) was designed to meet the re- 23 quirements of the most recent Inter- 24 national Residential Code published 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 7979 IH by the International Code Council, 1 and received a FORTIFIED Roof, 2 FORTIFIED Silver, or FORTIFIED 3 Gold designation from the Insurance 4 Institute for Business and Home 5 Safety, or 6 ‘‘(II) was designed to meet or ex- 7 ceed the requirements of the most re- 8 cent Standard for Residential Con- 9 struction in High-Wind Regions or 10 International Wildland Urban Inter- 11 face Code published by the Inter- 12 national Code Council, or 13 ‘‘(ii) in the case of a substantial ren- 14 ovation, such renovation meets— 15 ‘‘(I) the requirements of the most 16 recent International Residential Code 17 published by the International Code 18 Council and the requirements of the 19 FORTIFIED Roof Standards pub- 20 lished by the Insurance Institute for 21 Business and Home Safety, or 22 ‘‘(II) the requirements of the 23 most recent Standard for Residential 24 Construction in High-Wind Regions 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 7979 IH or International Wildland Urban 1 Interface Code published by the Inter- 2 national Code Council. 3 ‘‘(3) ABSORPTIVE CAPACITY.—The term ‘ab- 4 sorptive capacity’ means the ability of the construc- 5 tion to endure a disruption without significant devi- 6 ation from normal operating performance. 7 ‘‘(4) ADAPTIVE CAPACITY.—The term ‘adaptive 8 capacity’ means the ability of the construction to 9 adapt to a drastic change in normal operating condi- 10 tions. 11 ‘‘(5) RECOVERABILITY.—.The term 12 ‘recoverability’ means the ability of the construction 13 to recover quickly, and at low cost, from potentially 14 disruptive events. 15 ‘‘(e) OTHER DEFINITIONS.—For purposes of this 16 section: 17 ‘‘(1) CONSTRUCTION.—The term ‘construction’ 18 includes new construction and reconstruction and re- 19 habilitation that meets resilient construction require- 20 ments. 21 ‘‘(2) FEDERALLY DECLARED MAJOR DIS- 22 ASTER.—The term ‘federally declared major dis- 23 aster’ means a disaster subsequently determined by 24 the President to be a ‘major disaster’ that warrants 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 7979 IH assistance by the Federal Government under the 1 Robert T. Stafford Disaster Relief and Emergency 2 Assistance Act. 3 ‘‘(3) DISASTER AREA.—The term ‘disaster area’ 4 means the area so determined to warrant such as- 5 sistance. 6 ‘‘(4) MOST RECENT EDITIONS.—The term 7 ‘most recent’ means, with respect to relevant na- 8 tional consensus-based codes, and specifications and 9 standards referenced therein, either of the two most 10 recent published editions, including, if any, amend- 11 ments made by State, local, tribal, or territorial gov- 12 ernments during the adoption process, that incor- 13 porate the latest natural hazard-resistant designs 14 and establish criteria for the design, construction, 15 and maintenance of structures and facilities that 16 may be eligible for assistance under this section for 17 the purposes of protecting the health, safety, and 18 general welfare of a building’s users against disas- 19 ters. 20 ‘‘(f) APPLICATION WITH OTHER CREDITS.— 21 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF 22 GENERAL BUSINESS CREDIT.—So much of the credit 23 which would be allowed under subsection (a) for any 24 taxable year (determined without regard to this sub- 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 7979 IH section) that is attributable to property of a char- 1 acter subject to an allowance for depreciation shall 2 be treated as a credit listed in section 38(b) for such 3 taxable year (and not allowed under subsection (a)). 4 ‘‘(2) PERSONAL CREDIT.—For purposes of this 5 title, the credit allowed under subsection (a) for any 6 taxable year (determined after application of para- 7 graph (1)) shall be treated as a credit allowable 8 under subpart A for such taxable year. 9 ‘‘(g) BASIS REDUCTION.—For purposes of this sub- 10 title, the basis of any property for which a credit is allow- 11 able under subsection (a) shall be reduced by the amount 12 of such credit so allowed. 13 ‘‘(h) TERMINATION.—This section shall not apply to 14 any property for which a certificate for occupancy is issued 15 after December 31, 2022.’’. 16 (b) CREDIT MADE PART OF GENERAL BUSINESS 17 CREDIT.—Section 38(b) of such Code is amended by strik- 18 ing ‘‘plus’’ at the end of paragraph (31), by striking the 19 period at the end of paragraph (32) and inserting ‘‘, plus’’, 20 and by adding at the end the following new paragraph: 21 ‘‘(33) the portion of the disaster resilient prop- 22 erty credit described in section 30E(f)(1).’’. 23 (c) BASIS ADJUSTMENT.—Section 1016(a) of such 24 Code is amended by striking ‘‘and’’ at the end of para- 25 VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 7979 IH graph (37), by striking the period at the end of paragraph 1 (38) and inserting ‘‘, and’’, and by adding at the end the 2 following new paragraph: 3 ‘‘(39) to the extent provided in section 30E(g), 4 in the case of amounts with respect to which a credit 5 has been allowed under section 30E.’’. 6 (d) CLERICAL AMENDMENT.—The table of sections 7 for subpart B of part IV of subchapter A of chapter 1 8 of such Code is amended by inserting after the item relat- 9 ing to section 30D the following new item: 10 ‘‘Sec. 30E. Disaster resilient property.’’. (e) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to property for which a certificate 12 of occupancy is issued after the date of the enactment of 13 this Act. 14 Æ VerDate Sep 11 2014 23:55 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H7979.IH H7979 pamtmann on DSKBC07HB2PROD with BILLS