Frank Adelmann Manufactured Housing Community Sustainability Act

Summary: Frank Adelmann Manufactured Housing Community Sustainability Act  This bill amends the Internal Revenue Code to allow a business-related tax credit equal to 75% of the gain from the sale or exchange of real property to a qualified manufactured home community cooperative or corporation if: (1) the property is acquired for use as a manufactured home community, (2) the seller (or any related person) owned the property for at least two years before the sale or exchange, and (3) the property is transferred subject to a binding covenant that the property will be used as a manufactured home community for at least 50 years.  A &quot;qualified manufactured home community cooperative or corporation&quot; is a cooperative or a nonprofit corporation established pursuant to the laws of the state in which the property is located. The bill specifies membership and governance requirements for the communities owned by the cooperative or nonprofit corporation. The bill also imposes a tax on buyers who violate the covenant to use the property for manufactured housing for at least 50 years. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Frank Adelmann Manufactured Housing 
Community Sustainability Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
            (1) more than 17 million people live in manufactured homes, 
        benefitting from high-quality affordable homes that can provide 
        them stability;
            (2) owners of manufactured homes are disproportionately 
        low-income households: in 2013, the median annual household 
        income for those living in manufactured housing was $28,400;
            (3) about 75 percent of manufactured home households earn 
        less than $50,000;
            (4) over 10 percent of United States veterans live in 
        manufactured homes;
            (5) in the late 1990s, manufactured housing represented 
        two-thirds of the new affordable housing produced in the United 
        States, and it remains the largest source of unsubsidized 
        affordable housing in the country;
            (6) as of 2015, the average cost per square foot for a new 
        manufactured home was $48, less than half the $101 per square 
        foot of the structure-only cost of a new site-built home;
            (7) in 2009, 43 percent of all new homes that sold for less 
        than $150,000 were manufactured homes;
            (8) manufactured homes accounts for 23 percent of new home 
        sales under $200,000;
            (9) more than 50,000 manufactured home communities, or 
        ``mobile home parks'', exist throughout the United States;
            (10) more than 2.9 million manufactured homes are placed in 
        manufactured home communities;
            (11) manufactured home communities provide critical 
        affordable housing but receive very little local, State, or 
        Federal funds subsidizing the cost of these homes;
            (12) manufactured home owners in communities may own the 
        home, but they do not own the land under their homes, leaving 
        them vulnerable to rent increases, arbitrary rule enforcement, 
        and even closure of the community if the community owner 
        decides to convert the land to some other use;
            (13) eviction or closure of manufactured home communities 
        is very disruptive to residents who may be unable to pay the 
        thousands of dollars it takes to move their home or even find a 
        new location for their home;
            (14) in the past two decades, a national network of housing 
        providers has helped residents purchase and own the land and 
        manage the community in order to preserve a crucial source of 
        affordable housing;
            (15) nationwide, there are more than 1,000 of these stable, 
        permanent ownership cooperatives or nonprofit-owned 
        developments in more than a dozen States;
            (16) members continue to own their own homes individually 
        and an equal share of the land beneath the entire neighborhood 
        where everyone has a say in the way the resident-owned 
        community is run, and major decisions are made by democratic 
        vote by a member-elected board of directors;
            (17) in New Hampshire, more than 20 percent of manufactured 
        home communities are owned by residents;
            (18) in Vermont, Massachusetts, Rhode Island, Washington, 
        Oregon, and Minnesota, resident-owned cooperatives and 
        nonprofit ownership have flourished;
            (19) nationwide, only 2 percent of all manufactured home 
        communities are resident- or nonprofit-owned;
            (20) owners are frequently reluctant to sell the community 
        because they would prefer to pass the property on to their 
        heirs tax free and avoid capital gains taxes;
            (21) when the owner dies, the heirs frequently sell the 
        community to the highest bidder resulting in displacement for 
        dozens and sometimes hundreds of families; and
            (22) a Federal tax benefit needs to be established to 
        induce owners to sell to residents they have known for decades 
        or to nonprofit organizations in order to preserve the 
        community for years to come.

SEC. 3. TAX CREDIT FOR MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR 
              NONPROFIT ENTITY.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45S. MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR NONPROFIT 
              ENTITY.

    ``(a) Allowance of Credit.--For purposes of section 38, the 
manufactured home community sale credit determined under this section 
for any taxable year is an amount equal to 75 percent of the qualified 
gain received by the taxpayer during the taxable year.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified gain.--The term `qualified gain' means gain 
        from the sale or exchange of real property to a qualified 
        manufactured home community cooperative or corporation if--
                    ``(A) the real property is acquired for use as a 
                manufactured home community, and
                    ``(B) the requirements of paragraph (2) are met.
            ``(2) Requirements.--The requirements of this paragraph are 
        met if--
                    ``(A) the seller (or any related person) owned the 
                property for not less than the 2-year period ending 
                before the sale or exchange, and
                    ``(B) the property is transferred subject to a 
                binding covenant that the property will be used as a 
                manufactured home community for not less than 50 years.
            ``(3) Manufactured home community.--The term `manufactured 
        home community' means a community comprised primarily of 
        manufactured homes used solely for residential purposes and 
        owned by a manufactured home community cooperative or 
        corporation.
            ``(4) Manufactured home community cooperative or 
        corporation.--
                    ``(A) In general.--The term `qualified manufactured 
                home community cooperative or corporation' means a 
                cooperative or a nonprofit corporation established 
                pursuant to the laws of the State in which the property 
                used as a manufactured home community is located and 
                which--
                            ``(i) in the case of a community owned by a 
                        nonprofit corporation whose membership 
                        interests are sold on a nonappreciating basis, 
                        has only one class of membership consisting of 
                        residents, and
                            ``(ii) in the case of a community owned by 
                        a cooperative, has no more than two classes of 
                        membership, which includes both members and a 
                        tax-exempt organization actively engaged in 
                        supporting affordable housing and resident-
                        owned manufactured home communities.
                    ``(B) Governance.--An entity shall not be treated 
                as a qualified manufactured home community cooperative 
                or corporation for purposes of subparagraph (A) unless 
                governance of the entity is carried out by members 
                elected to a board of directors with voting structured 
                equitably among all members.
                    ``(C) Member.--The term `member' means--
                            ``(i) an individual--
                                    ``(I) has attained the age of 18,
                                    ``(II) is entitled by reason of the 
                                individual's membership interest to 
                                execute an occupancy agreement with the 
                                manufactured home community cooperative 
                                nonprofit with respect to one site in 
                                the manufactured home community for the 
                                purposes of situating a manufactured 
                                home owned by the member or, as 
                                permitted by the manufactured community 
                                cooperative or corporation, the 
                                member's trust or other entity, and
                                    ``(III) is a resident of the 
                                manufactured home community, and
                            ``(ii) a tax exempt organization.
            ``(5) Membership interest.--The term `membership interest' 
        means an ownership interest in a manufactured home community 
        cooperative or corporation or a membership interest in a 
        manufactured home community nonprofit corporation.
            ``(6) Manufactured home.--The term `manufactured home' 
        means a structure, transportable in one or more sections, 
        which--
                    ``(A) in the traveling mode, is 8 body feet or more 
                in width and 40 body feet or more in length, or when 
                erected on site, is 320 square feet or more,
                    ``(B) is built on a permanent chassis and designed 
                to be used as a dwelling (with or without a permanent 
                foundation when connected to required utilities) and 
                includes plumbing, heating, and electrical heating 
                systems, and
                    ``(C) in the case of a structure manufactured after 
                June 15, 1976, is certified as meeting the Manufactured 
                Home Construction and Safety Standards issued under the 
                National Manufactured Housing Construction and Safety 
                Standards Act of 1974 (42 U.S.C. 5401-5426) by the 
                Department of Housing and Urban Development and 
                displays a label of such certification on the exterior 
                of each transportable section.
    ``(c) Special Rules.--
            ``(1) Related person.--For purposes of subsection 
        (b)(2)(A), a person (hereafter in this subparagraph referred to 
        as the `related person') is related to the seller if--
                    ``(A) the related person bears a relationship to 
                the seller specified in section 267(b) or 707(b)(1), or
                    ``(B) the related person and the seller are engaged 
                in trades or businesses under common control (within 
                the meaning of subsections (a) and (b) of section 52).
            ``(2) Election by both seller and buyer.--The credit is 
        allowable under this section only if--
                    ``(A) elected by both the seller and the buyer of 
                the real property and evidenced by an affidavit 
                executed by both parties, and
                    ``(B) the buyer of the real property records the 
                affidavit and the affidavit is referenced in its deed 
                to the real property.
        The seller shall elect the credit under this section on its 
        return of tax.
    ``(d) Tax Upon Violation of Covenant.--There is imposed a tax on 
the buyer for a violation of the covenant specified in subsection 
(b)(2)(B). The amount of such tax shall be 20 percent of the net 
proceeds after settlement for the sale or exchange of the real property 
referred to in subsection (b)(2). For purposes of section 501(a), the 
tax imposed by this subsection shall not be treated as a tax imposed by 
this subtitle.
    ``(e) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary to carry out this section, including 
the recapture of the tax benefit under this section in any case in 
which the real property described in subsection (b) is not used as a 
manufactured home community for at least 50 years.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) 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 manufactured home community sale credit 
        determined under section 45S(a).''.
    (c) Conforming Amendments.--
            (1) Subsection (c) of section 196 of such Code is amended 
        by striking ``and'' at the end of paragraph (13), by striking 
        the period at the end of paragraph (14) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(15) the manufactured home community sale credit 
        determined under section 45S(a).''.
            (2) 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. Manufactured home community sale to residents or nonprofit 
                            entity.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2017.