Urban Competitiveness Act - Amends the Internal Revenue Code to exclude from gross income any capital gain from the sale or exchange of a stock, partnership, or business property interest invested in an enterprise zone area which had an average unemployment rate of not less than 150% of the national average rate during the preceding calendar year and which experienced a population loss of at least 20% during the 10-year period beginning in 2000.
[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6658 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 6658
To amend the Internal Revenue Code of 1986 to provide a zero capital
gains rate for certain new investments in specified areas made during a
temporary period.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 13, 2012
Mr. Clarke of Michigan (for himself, Mr. Franks of Arizona, and Mr.
Hultgren) 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 zero capital
gains rate for certain new investments in specified areas made during a
temporary period.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Urban Competitiveness Act''.
SEC. 2. ZERO CAPITAL GAINS RATE FOR CERTAIN NEW INVESTMENTS IN
SPECIFIED AREAS.
(a) In General.--Subchapter Y of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following new part:
``PART IV--CERTAIN NEW INVESTMENTS IN SPECIFIED AREAS
``Sec. 1400V. Zero capital gains rate for certain new investments.
``SEC. 1400V. ZERO CAPITAL GAINS RATE FOR CERTAIN NEW INVESTMENTS.
``(a) In General.--Gross income does not include any qualified
capital gain from the sale or exchange of a specified new investment
held for more than 1 year.
``(b) Specified New Investment.--For purposes of this section--
``(1) In general.--The term `specified new investment'
means--
``(A) any qualified stock,
``(B) any qualified partnership interest, and
``(C) any qualified business property.
``(2) Qualified stock.--
``(A) In general.--Except as provided in
subparagraph (B), the term `qualified stock' means any
stock in a domestic corporation if--
``(i) such stock is acquired by the
taxpayer during the 1-year period beginning on
the date of the enactment of this section, at
its original issue (directly or through an
underwriter) from the corporation solely in
exchange for cash,
``(ii) as of the time such stock was
issued, such corporation was a specified area
business (or, in the case of a new corporation,
such corporation was being organized for
purposes of being a specified area business),
and
``(iii) during substantially all of the
taxpayer's holding period for such stock, such
corporation qualified as a specified area
business.
``(B) Redemptions.--A rule similar to the rule of
section 1202(c)(3) shall apply for purposes of this
paragraph.
``(3) Qualified partnership interest.--The term `qualified
partnership interest' means any capital or profits interest in
a domestic partnership if--
``(A) such interest is acquired by the taxpayer
during the 1-year period beginning on the date of the
enactment of this section, from the partnership solely
in exchange for cash,
``(B) as of the time such interest was acquired,
such partnership was a specified area business (or, in
the case of a new partnership, such partnership was
being organized for purposes of being a specified area
business), and
``(C) during substantially all of the taxpayer's
holding period for such interest, such partnership
qualified as a specified area business.
A rule similar to the rule of paragraph (2)(B) shall apply for
purposes of this paragraph.
``(4) Qualified business property.--
``(A) In general.--The term `qualified business
property' means tangible property if--
``(i) such property was acquired by the
taxpayer by purchase (as defined in section
179(d)(2)) during the 1-year period beginning
on the date of the enactment of this section,
``(ii) the original use of such property in
the specified area commences with the taxpayer,
and
``(iii) during substantially all of the
taxpayer's holding period for such property,
substantially all of the use of such property
was in a specified area business of the
taxpayer.
``(B) Special rule for substantial improvements.--
The requirements of clauses (i) and (ii) of
subparagraph (A) shall be treated as satisfied with
respect to--
``(i) property which is substantially
improved by the taxpayer before the end of the
period described in subparagraph (A)(i), and
``(ii) any land on which such property is
located.
The determination of whether a property is
substantially improved shall be made under clause (ii)
of section 1400B(b)(4)(B), except that `the date of the
enactment of section 1400V' shall be substituted for
`December 31, 1997' in such clause.
``(c) Qualified Capital Gain.--For purposes of this section--
``(1) In general.--Except as otherwise provided in this
subsection, the term `qualified capital gain' means any gain
recognized on the sale or exchange of--
``(A) a capital asset, or
``(B) property used in the trade or business (as
defined in section 1231(b)).
``(2) Gain before enactment not qualified.--The term
`qualified capital gain' shall not include any gain
attributable to periods before the date of the enactment of
this section.
``(3) Certain rules to apply.--Rules similar to the rules
of paragraphs (3), (4), and (5) of section 1400B(e) shall apply
for purposes of this subsection.
``(d) Specified Area Business.--For purposes of this section, the
term `specified area business' means any enterprise zone business (as
defined in section 1397C), determined--
``(1) without regard to subsections (b)(6) and (c)(5)
thereof,
``(2) by substituting `80 percent' for `50 percent' in
subsections (b)(2) and (c)(1) thereof,
``(3) by treating each specified area as an empowerment
zone (and by treating no area other than a specified area as an
empowerment zone).
``(e) Specified Area.--For purposes of this section, the term
`specified area' means any principal city of a metropolitan statistical
area (as determined by the Office of Management and Budget)--
``(1) which had an average unemployment rate of not less
than 150 percent of the national average rate for the last
calendar year ending before the calendar year which includes
the date of the enactment of this Act, and
``(2) which experienced a population loss of at least 20
percent during the 10-year period beginning with calendar year
2000.
``(f) Certain Rules To Apply.--For purposes of this section, rules
similar to the rules of paragraphs (6) and (7) of subsection (b), and
subsections (f) and (g), of section 1400B shall apply; except that for
such purposes section 1400B(g)(2) shall be applied by substituting
`before the date of the enactment of section 1400V' for `before January
1, 1998, or after December 31, 2014'.
``(g) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out the purposes of this section,
including regulations to prevent the abuse of the purposes of this
section.''.
(b) Clerical Amendment.--The table of parts for subchapter Y of
chapter 1 of such Code is amended by adding at the end the following
new item:
``Part IV. Certain New Investments in Specified Areas.''.
(c) Effective Date.--The amendments made by this section shall
apply to property acquired after the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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