Sec. 2. Credit to holders of qualified urban demolition bonds
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Subpart I of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: For purposes of this subchapter, the term qualified urban demolition bond means any bond issued as part of an issue if— 100 percent of the available project proceeds of such issue are to be used for expenditures incurred after the date of the enactment of this section for 1 or more qualified projects pursuant to an allocation of such proceeds to such project or projects by a qualified issuer, the bond is issued by a qualified issuer and is in registered form (within the meaning of section 149(a)), the qualified issuer designates such bond for purposes of this section, the term of each bond which is part of such issue does not exceed 30 years, such bond is issued during the 5-year period beginning on the date of the enactment of this section, and the issue meets the requirements of subsection (e).
The maximum aggregate face amount of bonds which may be designated under subsection
(a)by a State shall not exceed the qualified urban demolition bond limitation amount allocated to such State under paragraph (3). There is a national qualified urban demolition bond limitation amount of $4,000,000,000. The national qualified urban demolition bond limitation shall be allocated by the Secretary among the States on the following basis and in such manner so as to ensure that all of such limitation amount is allocated before the date which is 3 months after the date of the enactment of this section: $2,000,000,000 to be allocated among the qualified States in accordance with subparagraph (B), and $2,000,000,000 to be equally allocated among all States. The amount allocated to a State under subparagraph (A)(i) shall be an amount equal to the amount specified in subparagraph (A)(i) multiplied by the ratio that the nonseasonal vacant properties in the State bears to the total nonseasonal vacant properties of all qualified States. For purposes of clause (i), nonseasonal vacant properties shall be determined by the Secretary on the basis of 2010 decennial census. The limitation amount allocated to a State under paragraph
(3)shall be allocated by the State to qualified issuers within such State. If at the end of the 2-year period beginning on the date of the enactment of this section, the national qualified urban demolition bond limitation amount under paragraph
(2)exceeds the total amount of qualified urban demolition bonds issued during such period, such excess shall be reallocated among the qualified States in such manner as the Secretary determines appropriate so as to ensure to the extent possible that all of such limitation amount is issued in the form of qualified urban demolition bonds before the end of the 5-year period beginning on the date of the enactment of this section. For purposes of this section, the term qualified project means the direct and indirect demolition costs properly attributable to any project proposed and approved by a qualified issuer, but does not include costs of operation or maintenance with respect to such project. In lieu of section 54A(b)(3), for purposes of section 54A(b)(2), the applicable credit rate with respect to an issue under this section is the rate equal to an average market yield (as of the day before the date of sale of the issue) on outstanding long-term corporate debt obligations (determined in such manner as the Secretary prescribes). In lieu of subparagraphs
(A)and
(B)of section 54A(d)— An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the qualified issuer reasonably expects— at least 100 percent of the available project proceeds of such issue are to be spent for 1 or more qualified projects within the 5-year expenditure period beginning on such date, and to incur a binding commitment with a third party to spend at least 10 percent of the proceeds of such issue with respect to such projects within the 12-month period beginning on such date. To the extent that less than 100 percent of the available project proceeds of such issue are expended by the close of the 5-year expenditure period beginning on the date of issuance, the qualified issuer shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142. If any bond which when issued purported to be a qualified urban demolition bond ceases to be such a bond, the qualified issuer shall pay to the United States (at the time required by the Secretary) an amount equal to the sum of— the aggregate of the credits allowable under section 54A with respect to such bond (determined without regard to section 54A(c)) for taxable years ending during the calendar year in which such cessation occurs and each succeeding calendar year ending with the calendar year in which such bond is redeemed by the land bank, and interest at the underpayment rate under section 6621 on the amount determined under paragraph
(1)for each calendar year for the period beginning on the first day of such calendar year. For purposes of this section— The term qualified issuer means— a State-authorized land bank, or with respect a State that does not have one or more State-authorized land banks, the State or any political subdivision or instrumentality thereof. The term State-authorized land bank means a special unit of government or public purpose corporation— expressly charged under State law with the reclamation, repurposing and redevelopment of vacant and abandoned land, enabled under State law to conduct large scale demolition projects, organized in a State which has enacted legislation allowing for the expedited tax foreclosure of vacant, abandoned, and tax delinquent property, and which may include a joint venture among 2 or more State-authorized land banks or among other entities with whom such special unit of government or public purpose corporation is authorized to enter into a joint venture. The term qualified State means a State— in which at least 49 percent of the State’s total housing units in the State were built before 1980, according to the 2010 census, and which meets 3 of the following 4 requirements: The State ranks in the top 20 among all States in percentage change in nonseasonal vacancies in the time period between the 2000 decennial census and the 2010 decennial census. The State ranks in the top 25 among all States in unemployment rate (seasonally adjusted) for the most recent January through November period beginning before the issuance of the qualified urban demolition bond. The State ranks in the top 25 among all States in percentages of mortgages in foreclosure for the 3rd quarter of 2012. The State ranks in the top 20 among all States in the lowest percentage change in population growth in the time period between the 2000 decennial census and the 2010 decennial census. Notwithstanding in any law or rule of law shall be construed to limit the transferability of the credit or bond allowed by this section through sale and repurchase agreements. . Paragraph
(1)of section 54A(d) of such Code is amended by striking or at the end of subparagraph (D), by inserting or at the end of subparagraph (E), and by inserting after subparagraph
(E)the following new subparagraph: a qualified urban demolition bond, . Subparagraph
(C)of section 54A(d)(2) is amended by striking and at the end of clause (iv), by striking the period at the end of clause
(v)and inserting , and , and by adding at the end the following new clause: in the case of a qualified urban demolition bond, a purpose specified in section 54G(a)(1). . The table of sections for subpart I of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item: Sec. 54G. Qualified urban demolition bonds. . The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.