Renters Tax Credit Act of 2014

Summary: Renters Tax Credit Act of 2014 - Amends the Internal Revenue Code to allow a business-related tax credit for a portion of the rent paid by a qualified renter.  Defines &quot;qualified renter&quot; as a family unit with income not greater than the higher of 60% of local median income or 150% of the federal poverty line.  Establishes the amount of such credit as the rent reduction amount, which: (1) is the amount by which the fair market rent for a rental unit exceeds the rent charged to the qualified renter; and (2) shall not exceed the excess of the rent charged to the qualified renter (or, if lower, specified modest rent) over 30% of the qualified renter's income (prorated monthly).

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Renters Tax Credit Act of 2014''.

SEC. 2. RENTERS TAX CREDIT.

    (a) In General.--Subpart D 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:

``SEC. 45S. RENTERS CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of a 
qualified credit recipient, the renters credit for any taxable year is 
an amount equal to the sum of the renter's credit amounts allocated to 
such qualified credit recipient under this section for months ending 
during the taxable year.
    ``(b) Renter's Credit Amount.--
            ``(1) In general.--For purposes of this section, the term 
        `renters credit amount' means the rent reduction amount with 
        respect to each rental unit which is occupied by a qualified 
        renter.
            ``(2) Qualified renter.--For purposes of this section, the 
        term `qualified renter' means a family unit with income not 
        greater than the higher of--
                    ``(A) 60 percent of local median income, or
                    ``(B) 150 percent of the Federal poverty line,
        in each case as determined by the Secretary of Housing and 
        Urban Development for a family of the size involved.
            ``(3) Rent reduction amount.--For purposes of this 
        section--
                    ``(A) In general.--The term `rent reduction amount' 
                is the amount by which the fair market rent for the 
                unit involved exceeds the rent charged to the qualified 
                renter.
                    ``(B) Limitation.--The rent reduction amount taken 
                into account under this section shall not exceed the 
                excess of--
                            ``(i) the rent charged to the qualified 
                        renter (or, if lower, specified modest rent), 
                        over
                            ``(ii) 30 percent of the qualified renter's 
                        income (prorated monthly) as determined by the 
                        renters credit agency of the State.
                    ``(C) Specified modest rent.--The term `specified 
                modest rent' means--
                            ``(i) the Fair Market Rent determined by 
                        the Secretary of Housing and Urban Development 
                        for the zip code (if the unit is located in a 
                        metropolitan area) or non-metropolitan county, 
                        or
                            ``(ii) such amount as may be determined by 
                        the State with respect to the area in which the 
                        unit is located if such amount is within 25 
                        percent of the amount determined under clause 
                        (i) with respect to such unit.
                    ``(D) Utilities.--The renters credit agency of the 
                State may determine whether and how to take into 
                account the cost of utilities in determining the rent 
                reduction amount.
                    ``(E) Credit adjustment.--The renters credit agency 
                of the State may elect to increase the rent reduction 
                amount such that such amount does not exceed 110 
                percent of such amount as determined without regard to 
                this subparagraph.
    ``(c) Qualified Credit Recipient.--For purposes of this section, 
the term `qualified credit recipient' means, with respect to any rental 
unit occupied by a qualified renter, the owner of such unit but only to 
the extent of the renters credit amounts which have been allocated to 
such person by the renters credit agency. In lieu of the owner of the 
unit, the renters credit agency may treat the lender of any loan to 
such owner as the qualified credit recipient if such unit secures such 
loan.
    ``(d) Allocations by Renters Credit Agency to Credit Recipients.--
            ``(1) In general.--The renters credit agency may make 
        allocations of renters credit amounts to qualified credit 
        recipients under this section on the basis of--
                    ``(A) the identity of the qualified renter, such 
                that the renters credit amount is allowed to the owner 
                of any rental unit which such qualified renter occupies 
                (or the lender referred to in subsection (c)) for any 
                month, or
                    ``(B) one or more rental units, such that the 
                renters credit amount is allowed to the owner of such 
                units (or the lender referred to in subsection (c)) for 
                such months as such units are occupied by a qualified 
                renter.
            ``(2) Restrictions on unit based allocations.--A renters 
        credit agency may make allocations of renters credit as 
        described in paragraph (1)(B) only if--
                    ``(A) such units are part of a project or building 
                in which not more than 40 percent of the units receive 
                allocations under this section (the Secretary may 
                provide such exceptions to the requirement of this 
                subparagraph as the Secretary determines appropriate 
                for small buildings or buildings with respect to which 
                more than 40 percent of the units were previously 
                subsidized under other Federal programs), and
                    ``(B) the Secretary has approved a mobility plan 
                submitted by such renters credit agency which provides 
                for an adequate method to ensure that qualified renters 
                have the ability to move from a unit which is eligible 
                for credit under this section without losing the rent 
                subsidy provided by this section.
    ``(e) Allocations of Credit Authority to State Agencies.--
            ``(1) Renters credit dollar amount for agencies.--
                    ``(A) State limitation.--The aggregate credit 
                amounts which a renters credit agency may allocate for 
                any calendar year is the portion of the State renters 
                credit ceiling allocated under this paragraph for such 
                calendar year to such agency.
                    ``(B) State ceiling initially allocated to state 
                housing credit agencies.--Except as provided in 
                subparagraphs (D) and (E), the State renters credit 
                ceiling for each calendar year shall be allocated to 
                the renters credit agency of such State. If there is 
                more than 1 renters credit agency of a State, all such 
                agencies shall be treated as a single agency.
                    ``(C) State renters credit ceiling.--The State 
                renters credit ceiling applicable to any State and any 
                calendar year shall be an amount equal to the sum of--
                            ``(i) the unused State renters credit 
                        ceiling (if any) of such State for the 
                        preceding calendar year,
                            ``(ii) the greater of--
                                    ``(I) $17.50 multiplied by the 
                                State population, or
                                    ``(II) $20,000,000,
                            ``(iii) the amount of State renters credit 
                        ceiling returned in the calendar year, plus
                            ``(iv) the amount (if any) allocated under 
                        subparagraph (D) to such State by the 
                        Secretary.
                For purposes of clause (i), the unused State renters 
                credit ceiling for any calendar year is the excess (if 
                any) of the sum of the amounts described in clauses 
                (ii) through (iv) over the aggregate renters credit 
                dollar amount allocated for such year.
                    ``(D)  Unused renters credit carryovers allocated 
                among certain states.--
                            ``(i) In general.--The unused renters 
                        credit carryover of a State for any calendar 
                        year shall be assigned to the Secretary for 
                        allocation among qualified States for the 
                        succeeding calendar year.
                            ``(ii) Unused renters credit carryover.--
                        For purposes of this subparagraph, the unused 
                        renters credit carryover of a State for any 
                        calendar year is the excess (if any) of--
                                    ``(I) the unused State renters 
                                credit ceiling for the year preceding 
                                such year, over
                                    ``(II) the aggregate renters credit 
                                dollar amount allocated for such year.
                            ``(iii) Formula for allocation of unused 
                        housing credit carryovers among qualified 
                        states.--The amount allocated under this 
                        subparagraph to a qualified State for any 
                        calendar year shall be the amount determined by 
                        the Secretary to bear the same ratio to the 
                        aggregate unused renters credit carryovers of 
                        all States for the preceding calendar year as 
                        such State's population for the calendar year 
                        bears to the population of all qualified States 
                        for the calendar year. For purposes of the 
                        preceding sentence, population shall be 
                        determined in accordance with section 146(j).
                            ``(iv)  Qualified state.--For purposes of 
                        this subparagraph, the term `qualified State' 
                        means, with respect to a calendar year, any 
                        State--
                                    ``(I) which allocated its entire 
                                State renters credit ceiling for the 
                                preceding calendar year, and
                                    ``(II) for which a request is made 
                                (not later than May 1 of the calendar 
                                year) to receive an allocation under 
                                clause (iii).
                    ``(E) Application of certain rules.--For purposes 
                of this paragraph, rules similar to the rules of 
                subparagraphs (E), (F), and (G) of section 42(h)(3) 
                shall apply.
                    ``(F) Inflation adjustment.--
                            ``(i) In general.--In the case of a 
                        calendar year after 2013, the $20,000,000 and 
                        $17.50 amounts in subparagraph (C) shall each 
                        be increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year by 
                                substituting `calendar year 2001' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--
                                    ``(I) In the case of the 
                                $20,000,000 amount, any increase under 
                                clause (i) which is not a multiple of 
                                $50,000 shall be rounded to the next 
                                lowest multiple of $50,000.
                                    ``(II) In the case of the $17.50 
                                amount, any increase under clause (i) 
                                which is not a multiple of 50 cents 
                                shall be rounded to the next lowest 
                                multiple of 50 cents.
    ``(f) Other Definitions.--For purposes of this section--
            ``(1) Renters credit agency.--The term `renters credit 
        agency' means, with respect to any State, the housing credit 
        agency of such State (as defined in section 42(h)(8)(A)) or 
        such other agency as is authorized to carry out the activities 
        of the renters credit agency under this section.
            ``(2) Possessions treated as states.--The term `State' 
        includes a possession of the United States.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section.''.
    (b) Credit To Be Part of General Business Credit.--
            (1) In general.--Subsection (b) of section 38 of such Code 
        is amended by striking ``plus'' at the end of paragraph (35), 
        by striking the period at the end of paragraph (36) and 
        inserting ``, plus'', and by adding at the end the following 
        new paragraph:
            ``(37) the renters credit determined under section 
        45S(a).''.
            (2) Credit allowable against alternative minimum tax.--
        Subparagraph (B) of section 38(c)(4) of such Code is amended by 
        redesignating clauses (vii) through (ix) as clauses (viii) 
        through (x), respectively, and by inserting after clause (vi) 
        the following new clause:
                            ``(vii) the credit determined under section 
                        45S,''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by adding 
at the end the following new item:

``Sec. 45S. Renters credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to allocations made for calendar years after 2014 and to taxable 
years ending after December 31, 2014.