II 

115TH CONGRESS 

1ST SESSION S. 548 

To amend the Internal Revenue Code of 1986 to reform the low-income 

housing credit, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 7, 2017 

Ms. CANTWELL (for herself, Mr. HATCH, Mr. WYDEN, Mr. SCHUMER, Mr. 

SCHATZ, Mr. LEAHY, Mr. HELLER, Mr. MERKLEY, Mr. BOOKER, Ms. 

MURKOWSKI, Mr. YOUNG, Ms. COLLINS, and Mr. BENNET) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to reform 

the low-income housing credit, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Affordable Housing Credit Improvement Act of 2017’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REFORM OF STATE ALLOCATION FORMULAS 


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Sec. 101. Increases in State allocations. 

TITLE II—REFORMS RELATING TO TENANT ELIGIBILITY 

Sec. 201. Average income test. 

Sec. 202. Uniform income eligibility for rural projects. 

Sec. 203. Codification of rules relating to increased tenant income. 

Sec. 204. Modification of student occupancy rules. 

Sec. 205. Tenant voucher payments taken into account as rent for certain purposes. 

TITLE III—CREDIT RATE AND OTHER RULES RELATING TO 

CREDIT ELIGIBILITY AND DETERMINATION 

Sec. 301. Minimum credit rate. 

Sec. 302. Reconstruction or replacement period after casualty loss. 

Sec. 303. Modification of rights relating to building purchase. 

Sec. 304. Modification of 10-year rule; limitation on acquisition basis. 

Sec. 305. Certain relocation costs taken into account as rehabilitation expenditures. 

Sec. 306. Repeal of qualified census tract population cap. 

Sec. 307. Determination of community revitalization plan to be made by housing credit agency. 

Sec. 308. Prohibition of local approval and contribution requirements. 

Sec. 309. Increase in credit for certain projects designated to serve extremely 

low-income households. 

Sec. 310. Increase in credit for bond-financed projects designated by State 

agency. 

Sec. 311. Elimination of basis reduction for low-income housing properties receiving certain energy benefits. 

Sec. 312. Restriction of planned foreclosures. 

Sec. 313. Increase of population cap for difficult development areas. 

TITLE IV—REFORMS RELATING TO NATIVE AMERICAN 

ASSISTANCE 

Sec. 401. Selection criteria under qualified allocation plans. 

Sec. 402. Inclusion of Indian areas as difficult development areas for purposes 

of certain buildings. 

TITLE V—AFFORDABLE HOUSING TAX CREDIT 

Sec. 501. Affordable housing tax credit. 

1 TITLE I—REFORM OF STATE 

2 ALLOCATION FORMULAS 

3 SEC. 101. INCREASES IN STATE ALLOCATIONS. 

4 (a) PHASE-IN OF INCREASES.— 


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1 (1) IN GENERAL.—Clause (ii) of section 

2 42(h)(3)(C) of the Internal Revenue Code of 1986 

3 is amended— 

4 (A) by striking ‘‘$1.75’’ in subclause (I) 

5 and inserting ‘‘the per capita dollar amount’’, 

6 and 

7 (B) by striking ‘‘$2,000,000’’ in subclause 

8 (II) and inserting ‘‘the minimum ceiling 

9 amount’’. 

10 (2) PER CAPITA DOLLAR AMOUNT; MINIMUM

11 CEILING AMOUNT.—Subparagraph (I) of section 

12 42(h)(3) of such Code is amended to read as follows: 

13 ‘‘(I) PER CAPITA DOLLAR AMOUNT; MIN14 IMUM CEILING AMOUNT.—For purposes of this 

15 paragraph— 

16 ‘‘(i) PER CAPITA DOLLAR AMOUNT.— 

17 The per capita dollar amount is— 

18 ‘‘(I) for calendar year 2017, 

19 $2.35, 

20 ‘‘(II) for calendar year 2018, 

21 $2.59, 

22 ‘‘(III) for calendar year 2019, 

23 $2.82, 

24 ‘‘(IV) for calendar year 2020, 

25 $3.06, 


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1 ‘‘(V) for calendar year 2021, 

2 $3.29, and 

3 ‘‘(VI) $3.53 thereafter. 

4 ‘‘(ii) MINIMUM CEILING AMOUNT.— 

5 The minimum ceiling amount is— 

6 ‘‘(I) for calendar year 2017, 

7 $2,710,000, 

8 ‘‘(II) for calendar year 2018, 

9 $2,981,000, 

10 ‘‘(III) for calendar year 2019, 

11 $3,252,000, 

12 ‘‘(IV) for calendar year 2020, 

13 $3,523,000, 

14 ‘‘(V) for calendar year 2021, 

15 $3,794,000, and 

16 ‘‘(VI) $4,065,000 thereafter.’’. 

17 (3) MODIFICATION OF COST-OF-LIVING ADJUST18 MENT.—Subparagraph (H) of section 42(h)(3) of 

19 such Code is amended— 

20 (A) by striking ‘‘2002’’ in clause (i) and 

21 inserting ‘‘2017’’, 

22 (B) by striking ‘‘the $2,000,000 and $1.75 

23 amounts in subparagraph (C)’’ in clause (i) and 

24 inserting ‘‘the dollar amounts applicable to such 


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1 calendar year under clauses (i) and (ii) of sub2 paragraph (I)’’, 

3 (C) by striking ‘‘2001’’ in clause (i)(II) 

4 and inserting ‘‘2016’’, 

5 (D) by striking ‘‘$2,000,000’’ in clause 

6 (ii)(I) and inserting ‘‘minimum ceiling’’, and 

7 (E) by striking ‘‘$1.75’’ in clause (ii)(II) 

8 and inserting ‘‘per capita dollar’’. 

9 (4) EFFECTIVE DATE.—The amendments made 

10 by this subsection shall apply to calendar years be11 ginning after December 31, 2017. 

12 (b) PERMANENT INCREASES.— 

13 (1) IN GENERAL.—Clause (ii) of section 

14 42(h)(3)(C) of the Internal Revenue Code of 1986, 

15 as amended by subsection (a)(1), is amended— 

16 (A) by striking ‘‘the per capita dollar 

17 amount’’ in subclause (I) and inserting 

18 ‘‘$3.53’’, and 

19 (B) by striking ‘‘the minimum ceiling 

20 amount’’ in subclause (II) and inserting 

21 ‘‘$4,065,000’’. 

22 (2) CONFORMING AMENDMENT.—Paragraph (3) 

23 of section 42(h) of such Code is amended by striking 

24 subparagraph (I), as amended by subsection (a)(2). 


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1 (3) COST-OF-LIVING ADJUSTMENT.—Subpara2 graph (H) of section 42(h)(3) of such Code, as 

3 amended by subsection (a)(3), is amended— 

4 (A) by striking ‘‘the dollar amounts appli5 cable to such calendar year under clauses (i) 

6 and (ii) of subparagraph (I)’’ in clause (i) and 

7 inserting ‘‘the $4,065,000 and $3.53 amounts 

8 in subparagraph (C)’’, 

9 (B) by striking ‘‘minimum ceiling’’ in 

10 clause (ii)(I) and inserting ‘‘$4,065,000’’, and 

11 (C) by striking ‘‘per capita dollar’’ in 

12 clause (ii)(II) and inserting ‘‘$3.53’’. 

13 (4) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to calendar years be15 ginning after December 31, 2022. 

16 TITLE II—REFORMS RELATING 

17 TO TENANT ELIGIBILITY 

18 SEC. 201. AVERAGE INCOME TEST. 

19 (a) IN GENERAL.—Paragraph (1) of section 42(g) of 

20 the Internal Revenue Code of 1986 is amended— 

21 (1) by striking ‘‘subparagraph (A) or (B)’’ and 

22 inserting ‘‘subparagraph (A), (B), or (C)’’, and 

23 (2) by inserting after subparagraph (B) the fol24 lowing new subparagraph: 

25 ‘‘(C) AVERAGE INCOME TEST.— 


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1 ‘‘(i) IN GENERAL.—The project meets 

2 the minimum requirements of this sub3 paragraph if 40 percent or more (25 per4 cent or more in the case of a project de5 scribed in section 142(d)(6)) of the resi6 dential units in such project are both rent7 restricted and occupied by individuals 

8 whose income does not exceed the imputed 

9 income limitation designated by the tax10 payer with respect to the respective unit. 

11 ‘‘(ii) SPECIAL RULES RELATING TO

12 INCOME LIMITATION.—For purposes of 

13 clause (i)— 

14 ‘‘(I) DESIGNATION.—The tax15 payer shall designate the imputed in16 come limitation of each unit taken 

17 into account under such clause. 

18 ‘‘(II) AVERAGE TEST.—The aver19 age of the imputed income limitations 

20 designated under subclause (I) shall 

21 not exceed 60 percent of area median 

22 gross income. 

23 ‘‘(III) 10-PERCENT INCRE24 MENTS.—The designated imputed in25 come limitation of any unit under subVerDate Sep 11 2014 03:52 Mar 10, 2017 Jkt 069200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S548.IS S548

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1 clause (I) shall be 20 percent, 30 per2 cent, 40 percent, 50 percent, 60 per3 cent, 70 percent, or 80 percent of 

4 area median gross income.’’. 

5 (b) RULES RELATING TO NEXT AVAILABLE UNIT.— 

6 Subparagraph (D) of section 42(g)(2) of the Internal Rev7 enue Code of 1986 is amended— 

8 (1) in clause (i), by striking ‘‘clause (ii)’’ and 

9 inserting ‘‘clauses (ii), (iii), and (iv)’’, 

10 (2) in clause (ii)— 

11 (A) by striking ‘‘If’’ and inserting ‘‘In the 

12 case of a project with respect to which the tax13 payer elects the requirements of subparagraph 

14 (A) or (B) of paragraph (1), if’’, 

15 (B) by striking the second sentence, and 

16 (C) by striking ‘‘NEXT AVAILABLE UNIT

17 MUST BE RENTED TO LOW-INCOME TENANT IF

18 INCOME RISES ABOVE 140 PERCENT OF INCOME

19 LIMIT’’ in the heading and inserting ‘‘RENTAL

20 OF NEXT AVAILABLE UNIT IN CASE OF 20–50 OR

21 40–60 TEST’’, and 

22 (3) by adding at the end the following new 

23 clauses: 

24 ‘‘(iii) RENTAL OF NEXT AVAILABLE

25 UNIT IN CASE OF AVERAGE INCOME


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1 TEST.—In the case of a project with re2 spect to which the taxpayer elects the re3 quirements of subparagraph (C) of para4 graph (1), if the income of the occupants 

5 of the unit increases above 140 percent of 

6 the greater of— 

7 ‘‘(I) 60 percent of area median 

8 gross income, or 

9 ‘‘(II) the imputed income limita10 tion designated with respect to the 

11 unit under paragraph (1)(C)(ii)(I), 

12 clause (i) shall cease to apply to any such 

13 unit if any residential rental unit in the 

14 building (of a size comparable to, or small15 er than, such unit) is occupied by a new 

16 resident whose income exceeds the limita17 tion described in clause (v). 

18 ‘‘(iv) DEEP RENT SKEWED

19 PROJECTS.—In the case of a project de20 scribed in section 142(d)(4)(B), clause (ii) 

21 or (iii), whichever is applicable, shall be 

22 applied by substituting ‘170 percent’ for 

23 ‘140 percent’, and— 

24 ‘‘(I) in the case of clause (ii), by 

25 substituting ‘any low-income unit in 


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1 the building is occupied by a new resi2 dent whose income exceeds 40 percent 

3 of area median gross income’ for ‘any 

4 residential rental unit’ and all that 

5 follows in such clause, and 

6 ‘‘(II) in the case of clause (iii), 

7 by substituting ‘any low-income unit 

8 in the building is occupied by a new 

9 resident whose income exceeds the 

10 lesser of 40 percent of area median 

11 gross income or the imputed income 

12 limitation designated with respect to 

13 such unit under paragraph 

14 (1)(C)(ii)(I)’ for ‘any residential rent15 al unit’ and all that follows in such 

16 clause. 

17 ‘‘(v) LIMITATION DESCRIBED.—For 

18 purposes of clause (iii), the limitation de19 scribed in this clause with respect to any 

20 unit is— 

21 ‘‘(I) the imputed income limita22 tion designated with respect to such 

23 unit under paragraph (1)(C)(ii)(I), in 

24 the case of a unit which was taken 


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1 into account as a low-income unit 

2 prior to becoming vacant, and 

3 ‘‘(II) the imputed income limita4 tion which would have to be des5 ignated with respect to such unit 

6 under such paragraph in order for the 

7 project to continue to meet the re8 quirements of paragraph 

9 (1)(C)(ii)(II), in the case of any other 

10 unit.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to elections made under section 

13 42(g)(1) of the Internal Revenue Code of 1986 after the 

14 date of the enactment of this Act. 

15 SEC. 202. UNIFORM INCOME ELIGIBILITY FOR RURAL 

16 PROJECTS. 

17 (a) IN GENERAL.—Paragraph (8) of section 42(i) of 

18 the Internal Revenue Code of 1986 is amended by striking 

19 the second sentence. 

20 (b) EFFECTIVE DATE.—The amendment made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2017. 


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1 SEC. 203. CODIFICATION OF RULES RELATING TO IN2 CREASED TENANT INCOME. 

3 (a) IN GENERAL.—Clause (i) of section 42(g)(2)(D) 

4 of the Internal Revenue Code of 1986, as amended by this 

5 Act, is amended by striking ‘‘clauses (ii), (iii), and (iv)’’ 

6 and all that follows and inserting ‘‘clauses (ii), (iii), (iv), 

7 and (vi), notwithstanding an increase in the income of the 

8 occupants above the income limitation applicable under 

9 paragraph (1)— 

10 ‘‘(I) a low-income unit shall con11 tinue to be treated as a low-income 

12 unit if the income of such occupants 

13 initially was 60 percent or less of area 

14 median gross income and such unit 

15 continues to be rent-restricted, and 

16 ‘‘(II) a unit to which, at the time 

17 of initial occupancy by such occu18 pants, any Federal, State, or local 

19 government income restriction ap20 plied, and which subsequently becomes 

21 part of a building with respect to 

22 which rehabilitation expenditures are 

23 taken into account under subsection 

24 (e), shall be treated as a low-income 

25 unit if the income of such occupants 

26 initially was 60 percent or less of area 


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1 median gross income and does not ex2 ceed 120 percent of area median gross 

3 income as of the date of acquisition of 

4 the property by the taxpayer.’’. 

5 (b) EXCEPTION.—Subparagraph (D) of section 

6 42(g)(2) of the Internal Revenue Code of 1986, as amend7 ed by this Act, is amended by adding at the end the fol8 lowing new clause: 

9 ‘‘(vi) EXCEPTION TO RULE RELATING

10 TO INCREASED TENANT INCOME.—In the 

11 case of an occupant of a low-income unit 

12 who initially qualified to occupy such unit 

13 by reason of paragraph (1)(C) with an in14 come in excess of 60 percent of area me15 dian gross income but not in excess of 80 

16 percent of area median gross income, 

17 clause (i) shall be applied for substituting 

18 ‘80 percent’ for ‘60 percent’ each place it 

19 appears.’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to taxable years beginning after 

22 December 31, 2016. 


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1 SEC. 204. MODIFICATION OF STUDENT OCCUPANCY RULES. 

2 (a) IN GENERAL.—Subparagraph (D) of section 

3 42(i)(3) of the Internal Revenue Code of 1986 is amended 

4 to read as follows: 

5 ‘‘(D) RULES RELATING TO STUDENTS.— 

6 ‘‘(i) IN GENERAL.—A unit occupied 

7 solely by individuals who— 

8 ‘‘(I) have not attained age 24, 

9 and 

10 ‘‘(II) are enrolled in a full-time 

11 course of study at an institution of 

12 higher education (as defined in section 

13 3304(f)), 

14 shall not be treated as a low-income unit. 

15 ‘‘(ii) EXCEPTION FOR CERTAIN FED16 ERAL PROGRAMS.—In the case of a feder17 ally assisted building (as defined in sub18 section (d)(6)(C)(i)), clause (i) shall not 

19 apply to a unit the occupants of which 

20 meet all requirements applicable under the 

21 housing program described in subsection 

22 (d)(6)(C)(i) through which the building is 

23 assisted, financed, or operated. 

24 ‘‘(iii) OTHER EXCEPTIONS.—Clause 

25 (i) shall not apply to a unit occupied by an 

26 individual who— 


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1 ‘‘(I) is married, 

2 ‘‘(II) is a person with disabilities 

3 (as defined in section 3(b)(3)(E) of 

4 the United States Housing Act of 

5 1937), 

6 ‘‘(III) is a veteran (as defined in 

7 section 101(2) of title 38, United 

8 States Code), 

9 ‘‘(IV) has one or more qualifying 

10 children (as defined in section 

11 152(c)), or 

12 ‘‘(V) meets the income limitation 

13 applicable under subsection (g)(1) to 

14 the project of which the building is a 

15 part and is, or was immediately prior 

16 to attaining the age of majority— 

17 ‘‘(aa) an emancipated minor 

18 or in legal guardianship as deter19 mined by a court of competent 

20 jurisdiction in the individual’s 

21 State of legal residence, 

22 ‘‘(bb) under the care and 

23 placement responsibility of the 

24 State agency responsible for ad25 ministering a plan under part B 


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1 or part E of title IV of the Social 

2 Security Act, or 

3 ‘‘(cc) was an unaccompanied 

4 youth (within the meaning of sec5 tion 725(6) of the McKinney6 Vento Homeless Assistance Act 

7 (42 U.S.C. 11434a(6))) or a 

8 homeless child or youth (within 

9 the meaning of section 725(2) of 

10 such Act (42 U.S.C. 

11 11434a(2))).’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to taxable years beginning after 

14 December 31, 2017. 

15 SEC. 205. TENANT VOUCHER PAYMENTS TAKEN INTO AC16 COUNT AS RENT FOR CERTAIN PURPOSES. 

17 (a) IN GENERAL.—Subparagraph (B) of section 

18 42(g)(2) of the Internal Revenue Code of 1986 is amended 

19 by adding at the end the following new sentence: ‘‘In the 

20 case of a project with respect to which the taxpayer elects 

21 the requirements of subparagraph (C) of paragraph (1), 

22 or the portion of a project to which subsection (d)(5)(C) 

23 applies, clause (i) shall not apply with respect to any ten24 ant-based assistance (as defined in section 8(f)(7) of the 


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1 United States Housing Act of 1937 (42 U.S.C. 

2 1437f(f)(7))).’’. 

3 (b) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to rent paid in taxable years begin5 ning after December 31, 2017. 

6 TITLE III—CREDIT RATE AND 

7 OTHER RULES RELATING TO 

8 CREDIT ELIGIBILITY AND DE9 TERMINATION 

10 SEC. 301. MINIMUM CREDIT RATE. 

11 (a) IN GENERAL.—Subsection (b) of section 42 of the 

12 Internal Revenue Code of 1986 is amended— 

13 (1) by redesignating paragraph (3) as para14 graph (4), and 

15 (2) by inserting after paragraph (2) the fol16 lowing new paragraph: 

17 ‘‘(3) MINIMUM CREDIT RATE.—In the case of 

18 any new or existing building to which paragraph (2) 

19 does not apply and which is placed in service by the 

20 taxpayer after December 31, 2016, the applicable 

21 percentage shall not be less than 4 percent.’’. 

22 (b) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to buildings placed in service after 

24 December 31, 2016. 


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1 SEC. 302. RECONSTRUCTION OR REPLACEMENT PERIOD 

2 AFTER CASUALTY LOSS. 

3 (a) IN GENERAL.—Subparagraph (E) of section 

4 42(j)(4) of the Internal Revenue Code of 1986 is amended 

5 by striking ‘‘a reasonable period established by the Sec6 retary’’ and inserting ‘‘a reasonable period established by 

7 the applicable housing credit agency (not to exceed 25 

8 months from the date on which the casualty loss arises). 

9 The determination under paragraph (1) shall not be made 

10 with respect to a property the basis of which is affected 

11 by a casualty loss until the period described in the pre12 ceding sentence with respect to such property has ex13 pired.’’. 

14 (b) EFFECTIVE DATE.—The amendment made by 

15 this section shall apply to casualty losses arising after the 

16 date of the enactment of this Act. 

17 SEC. 303. MODIFICATION OF RIGHTS RELATING TO BUILD18 ING PURCHASE. 

19 (a) IN GENERAL.—Subparagraph (A) of section 

20 42(i)(7) of the Internal Revenue Code of 1986 is amend21 ed— 

22 (1) by striking ‘‘a right of 1st refusal’’ and in23 serting ‘‘an option’’, and 

24 (2) by striking ‘‘the property’’ and inserting 

25 ‘‘the property or a partnership interest relating to 

26 the property’’. 


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1 (b) CONFORMING AMENDMENT.—Subparagraph (B) 

2 of section 42(i)(7) of the Internal Revenue Code of 1986 

3 is amended by adding at the end the following new sen4 tence: ‘‘In the case of a purchase of a partnership interest, 

5 the minimum purchase price is an amount equal to such 

6 interest’s ratable share of the amount determined under 

7 the first sentence of this subparagraph.’’. 

8 (c) EFFECTIVE DATE.—The amendments made by 

9 this section shall apply to agreements entered into or 

10 amended after the date of the enactment of this Act. 

11 SEC. 304. MODIFICATION OF 10-YEAR RULE; LIMITATION ON 

12 ACQUISITION BASIS. 

13 (a) IN GENERAL.—Clause (ii) of section 42(d)(2)(B) 

14 of the Internal Revenue Code of 1986 is amended by in15 serting ‘‘, or the taxpayer elects the application of sub16 paragraph (C)(ii)’’ after ‘‘service’’. 

17 (b) LIMITATION ON ACQUISITION BASIS.—Subpara18 graph (C) of section 42(d)(2) of the Internal Revenue 

19 Code of 1986 is amended— 

20 (1) by striking ‘‘For purposes of subparagraph 

21 (A), the adjusted basis’’ and inserting ‘‘For pur22 poses of subparagraph (A)— 

23 ‘‘(i) IN GENERAL.—The adjusted 

24 basis’’, and 


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1 (2) by adding at the end the following new 

2 clauses: 

3 ‘‘(ii) BUILDINGS IN SERVICE WITHIN

4 PREVIOUS 10 YEARS.—If the period be5 tween the date of acquisition of the build6 ing by the taxpayer and the date the build7 ing was last placed in service is less than 

8 10 years, the taxpayer’s basis attributable 

9 to the acquisition of the building which is 

10 taken into account in determining the ad11 justed basis shall not exceed the sum of— 

12 ‘‘(I) the lowest amount paid for 

13 acquisition of the building by any per14 son during the 10 years preceding the 

15 date of the acquisition of the building 

16 by the taxpayer, adjusted as provided 

17 in clause (iii), and 

18 ‘‘(II) the value of any capital im19 provements made by the person who 

20 sells the building to the taxpayer 

21 which are reflected in such seller’s 

22 basis. 

23 ‘‘(iii) ADJUSTMENT.—With respect to 

24 a basis determination made in any taxable 


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1 year, the amount described in clause (ii)(I) 

2 shall be increased by an amount equal to— 

3 ‘‘(I) such amount, multiplied by 

4 ‘‘(II) a cost-of-living adjustment, 

5 determined in the same manner as 

6 under section 1(f)(3) for the calendar 

7 year in which the taxable year begins 

8 by taking into account the acquisition 

9 year in lieu of calendar year 1992. 

10 For purposes of the preceding sentence, 

11 the acquisition year is the calendar year in 

12 which the lowest amount referenced in 

13 clause (ii)(I) was paid for the acquisition 

14 of the building.’’. 

15 (c) CONFORMING AMENDMENTS.—Clause (i) of sec16 tion 42(d)(2)(D) of the Internal Revenue Code of 1986 

17 is amended— 

18 (1) by striking ‘‘FOR SUBPARAGRAPH (B)’’ in 

19 the heading, and 

20 (2) by striking ‘‘subparagraph (B)(ii)’’ in the 

21 matter preceding subclause (I) and inserting ‘‘sub22 paragraph (B)(ii) or (C)(ii)’’. 

23 (d) EFFECTIVE DATE.—The amendments made by 

24 this section shall apply to buildings placed in service after 

25 December 31, 2016. 


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1 SEC. 305. CERTAIN RELOCATION COSTS TAKEN INTO AC2 COUNT AS REHABILITATION EXPENDITURES. 

3 (a) IN GENERAL.—Paragraph (2) of section 42(e) of 

4 the Internal Revenue Code of 1986 is amended by adding 

5 at the end the following new subparagraph: 

6 ‘‘(C) CERTAIN RELOCATION COSTS.—In 

7 the case of a rehabilitation of a building to 

8 which section 280B does not apply, costs relat9 ing to the relocation of occupants, including— 

10 ‘‘(i) amounts paid to occupants, 

11 ‘‘(ii) amounts paid to third parties for 

12 services relating to such relocation, and 

13 ‘‘(iii) amounts paid for temporary 

14 housing for occupants, 

15 shall be treated as chargeable to capital account 

16 and taken into account as rehabilitation ex17 penditures.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to expenditures paid or incurred 

20 after December 31, 2016. 

21 SEC. 306. REPEAL OF QUALIFIED CENSUS TRACT POPU22 LATION CAP. 

23 (a) IN GENERAL.—Clause (ii) of section 42(d)(5)(B) 

24 of the Internal Revenue Code of 1986 is amended— 

25 (1) by striking subclauses (II) and (III), and 

26 (2) by striking ‘‘QUALIFIED CENSUS TRACT.— 


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1 ‘‘(I) IN GENERAL.—The term’’, 

2 and inserting ‘‘QUALIFIED CENSUS TRACT.—The 

3 term’’. 

4 (b) TECHNICAL CORRECTIONS.—Sections 

5 42(d)(4)(C)(i) and 42(m)(1)(B)(ii)(III) of the Internal 

6 Revenue Code of 1986 are each amended by striking ‘‘as 

7 defined in paragraph (5)(C)’’ and inserting ‘‘as defined 

8 in paragraph (5)(B)(ii)’’. 

9 (c) EFFECTIVE DATE.—The amendment made by 

10 subsection (a) shall apply to designations of qualified cen11 sus tracts under section 42(d)(5)(B)(ii) of the Internal 

12 Revenue Code of 1986 after December 31, 2017. 

13 SEC. 307. DETERMINATION OF COMMUNITY REVITALIZA14 TION PLAN TO BE MADE BY HOUSING CREDIT 

15 AGENCY. 

16 (a) IN GENERAL.—Subclause (III) of section 

17 42(m)(1)(B)(ii) of the Internal Revenue Code of 1986 is 

18 amended by inserting ‘‘, as determined by the housing 

19 credit agency according to criteria established by such 

20 agency,’’ after ‘‘(d)(5)(C)) and’’. 

21 (b) CRITERIA.—Paragraph (1) of section 42(m) of 

22 the Internal Revenue Code of 1986 is amended by adding 

23 at the end the following new subparagraph: 

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1 IZATION PLAN.—For purposes of subparagraph 

2 (B)(ii)(III), the criteria which shall be estab3 lished by a housing credit agency for deter4 mining whether the development of a project 

5 contributes to a concerted community develop6 ment plan shall take into account any factors 

7 the agency deems appropriate, including the ex8 tent to which the proposed plan— 

9 ‘‘(i) is geographically specific, 

10 ‘‘(ii) outlines a clear plan for imple11 mentation and goals for outcomes, 

12 ‘‘(iii) includes a strategy for applying 

13 for or obtaining commitments of public or 

14 private investment (or both) in nonhousing 

15 infrastructure, amenities, or services, and 

16 ‘‘(iv) demonstrates the need for com17 munity revitalization.’’. 

18 (c) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to allocations of housing credit dol20 lar amounts made under qualified allocation plans (as de21 fined in section 42(m)(1)(B) of the Internal Revenue Code 

22 of 1986) adopted after December 31, 2017. 


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1 SEC. 308. PROHIBITION OF LOCAL APPROVAL AND CON2 TRIBUTION REQUIREMENTS. 

3 (a) IN GENERAL.—Paragraph (1) of section 42(m) 

4 of the Internal Revenue Code of 1986, as amended by sec5 tion 307, is further amended— 

6 (1) by striking clause (ii) of subparagraph (A) 

7 and by redesignating clauses (iii) and (iv) thereof as 

8 clauses (ii) and (iii), and 

9 (2) by adding at the end the following new sub10 paragraph: 

11 ‘‘(F) LOCAL APPROVAL OR CONTRIBUTION

12 NOT TAKEN INTO ACCOUNT.—The selection cri13 teria under a qualified allocation plan shall not 

14 include consideration of— 

15 ‘‘(i) any support or opposition with re16 spect to the project from local or elected 

17 officials, or 

18 ‘‘(ii) any local government contribu19 tion to the project, except to the extent 

20 such contribution is taken into account as 

21 part of a broader consideration of the 

22 project’s ability to leverage outside funding 

23 sources, and is not prioritized over any 

24 other source of outside funding.’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to allocations of housing credit dol3 lar amounts made after December 31, 2017. 

4 SEC. 309. INCREASE IN CREDIT FOR CERTAIN PROJECTS 

5 DESIGNATED TO SERVE EXTREMELY LOW-IN6 COME HOUSEHOLDS. 

7 (a) IN GENERAL.—Paragraph (5) of section 42(d) of 

8 the Internal Revenue Code of 1986 is amended by adding 

9 at the end the following new subparagraph: 

10 ‘‘(C) INCREASE IN CREDIT FOR PROJECTS

11 DESIGNATED TO SERVE EXTREMELY LOW-IN12 COME HOUSEHOLDS.—In the case of any build13 ing— 

14 ‘‘(i) 20 percent or more of the resi15 dential units in which are designated by 

16 the taxpayer for occupancy by households 

17 the aggregate household income of which 

18 does not exceed the greater of— 

19 ‘‘(I) 30 percent of area median 

20 gross income, or 

21 ‘‘(II) 100 percent of an amount 

22 equal to the Federal poverty line 

23 (within the meaning of section 

24 36B(d)(3)), and 


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1 ‘‘(ii) which is designated by the hous2 ing credit agency as requiring the increase 

3 in credit under this subparagraph in order 

4 for such building to be financially feasible 

5 as part of a qualified low-income housing 

6 project, 

7 subparagraph (B) shall not apply to the portion 

8 of such building which is comprised of such 

9 units, and the eligible basis of such portion of 

10 the building shall be 150 percent of such basis 

11 determined without regard to this subpara12 graph.’’. 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall apply to buildings placed in service after 

15 December 31, 2016. 

16 SEC. 310. INCREASE IN CREDIT FOR BOND-FINANCED 

17 PROJECTS DESIGNATED BY STATE AGENCY. 

18 (a) IN GENERAL.—Clause (v) of section 42(d)(5)(B) 

19 of the Internal Revenue Code of 1986 is amended by strik20 ing the second sentence. 

21 (b) TECHNICAL AMENDMENT.—Clause (v) of section 

22 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

23 amended by subsection (a), is further amended— 

24 (1) by striking ‘‘STATE’’ in the heading, and 


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1 (2) by striking ‘‘State housing credit agency’’ 

2 and inserting ‘‘housing credit agency’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to buildings placed in service after 

5 December 31, 2016. 

6 SEC. 311. ELIMINATION OF BASIS REDUCTION FOR LOW-IN7 COME HOUSING PROPERTIES RECEIVING 

8 CERTAIN ENERGY BENEFITS. 

9 (a) NEW ENERGY EFFICIENT HOME CREDIT.—Sub10 section (e) of section 45L of the Internal Revenue Code 

11 of 1986 is amended— 

12 (1) by striking ‘‘ADJUSTMENT.—For purposes’’ 

13 and inserting ‘‘ADJUSTMENT.— 

14 ‘‘(1) IN GENERAL.—For purposes’’, and 

15 (2) by adding at the end the following new 

16 paragraph: 

17 ‘‘(2) EXCEPTION FOR AFFORDABLE HOUSING

18 PROPERTIES.—Paragraph (1) shall not apply to any 

19 property with respect to which a credit is allowed 

20 under section 42.’’. 

21 (b) ENERGY EFFICIENT COMMERCIAL BUILDINGS

22 DEDUCTION.—Subsection (e) of section 179D of the In23 ternal Revenue Code of 1986 is amended— 

24 (1) by striking ‘‘REDUCTION.—For purposes’’ 

25 and inserting ‘‘REDUCTION.— 


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1 ‘‘(1) IN GENERAL.—For purposes’’, and 

2 (2) by adding at the end the following new 

3 paragraph: 

4 ‘‘(2) EXCEPTION FOR AFFORDABLE HOUSING

5 PROPERTIES.—Paragraph (1) shall not apply to any 

6 property with respect to which a credit is allowed 

7 under section 42.’’. 

8 (c) ENERGY CREDIT.—Paragraph (3) of section 

9 50(c) of the Internal Revenue Code of 1986 is amended— 

10 (1) by striking ‘‘and’’ at the end of subpara11 graph (A), 

12 (2) by striking the period at the end of sub13 paragraph (B) and inserting ‘‘, and’’, and 

14 (3) by adding at the end the following new sub15 paragraph: 

16 ‘‘(C) paragraph (1) shall not apply to any 

17 property with respect to which a credit is al18 lowed under section 42.’’. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to property placed in service after 

21 December 31, 2016. 

22 SEC. 312. RESTRICTION OF PLANNED FORECLOSURES. 

23 (a) IN GENERAL.—Subclause (I) of section 

24 42(h)(6)(E)(i) of the Internal Revenue Code of 1986 is 

25 amended to read as follows: 


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1 ‘‘(I) on the 61st day after the 

2 taxpayer (or a successor in interest) 

3 provides notice to the housing credit 

4 agency that the building has been ac5 quired by foreclosure (or instrument 

6 in lieu of foreclosure) and that the 

7 taxpayer intends the termination of 

8 such period, unless the housing credit 

9 agency determines that such acquisi10 tion is part of an arrangement with 

11 the taxpayer a purpose of which is to 

12 terminate such period, or’’. 

13 (b) CONFORMING AMENDMENT.—The second sen14 tence of clause (i) of section 42(h)(6)(E) of the Internal 

15 Revenue Code of 1986 is amended by striking ‘‘Subclause 

16 (II)’’ and inserting ‘‘Subclauses (I) and (II)’’. 

17 (c) EFFECTIVE DATE.—The amendments made by 

18 this section shall apply to acquisitions by foreclosure (or 

19 instrument in lieu of foreclosure) after December 31, 

20 2017. 

21 SEC. 313. INCREASE OF POPULATION CAP FOR DIFFICULT 

22 DEVELOPMENT AREAS. 

23 (a) IN GENERAL.—Subclause (II) of section 

24 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 


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1 amended by striking ‘‘20 percent’’ and inserting ‘‘30 per2 cent’’. 

3 (b) EFFECTIVE DATE.—The amendment made by 

4 this section shall apply to designations made under section 

5 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 

6 after December 31, 2017. 

7 TITLE IV—REFORMS RELATING 

8 TO NATIVE AMERICAN AS9 SISTANCE 

10 SEC. 401. SELECTION CRITERIA UNDER QUALIFIED ALLO11 CATION PLANS. 

12 (a) IN GENERAL.—Subparagraph (C) of section 

13 42(m)(1) of the Internal Revenue Code of 1986 is amend14 ed by striking ‘‘and’’ at the end of clause (ix), by striking 

15 the period at the end of clause (x) and inserting ‘‘, and’’, 

16 and by adding at the end the following new clause: 

17 ‘‘(xi) the affordable housing needs of 

18 individuals in the State who are members 

19 of Indian tribes (as defined in section 

20 45A(c)(6)).’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to allocations of credits under sec23 tion 42 of the Internal Revenue Code of 1986 made after 

24 December 31, 2017. 


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1 SEC. 402. INCLUSION OF INDIAN AREAS AS DIFFICULT DE2 VELOPMENT AREAS FOR PURPOSES OF CER3 TAIN BUILDINGS. 

4 (a) IN GENERAL.—Subclause (I) of section 

5 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

6 amended by inserting before the period the following: ‘‘, 

7 and any Indian area’’. 

8 (b) INDIAN AREA.—Clause (iii) of section 

9 42(d)(5)(B) of the Internal Revenue Code of 1986 is 

10 amended by redesignating subclause (II) as subclause 

11 (III) and by inserting after subclause (I) the following new 

12 subclause: 

13 ‘‘(II) INDIAN AREA.—For pur14 poses of subclause (I), the term ‘In15 dian area’ means any Indian area (as 

16 defined in section 4(11) of the Native 

17 American Housing Assistance and 

18 Self Determination Act of 1996 (25 

19 U.S.C. 4103(11)).’’. 

20 (c) ELIGIBLE BUILDINGS.—Clause (iii) of section 

21 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

22 amended by subsection (b), is amended by adding at the 

23 end the following new subclause: 

24 ‘‘(IV) SPECIAL RULE FOR BUILD25 INGS IN INDIAN AREAS.—In the case 

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1 ment area solely because it is an In2 dian area, a building shall not be 

3 treated as located in such area unless 

4 such building is assisted or financed 

5 under the Native American Housing 

6 Assistance and Self Determination 

7 Act of 1996 (25 U.S.C. 4101 et seq.) 

8 or the project sponsor is an Indian 

9 tribe (as defined in section 

10 45A(c)(6)), a tribally designated hous11 ing entity (as defined in section 4(22) 

12 of such Act (25 U.S.C. 4103(22))), or 

13 wholly owned or controlled by such an 

14 Indian tribe or tribally designated 

15 housing entity.’’. 

16 (d) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to buildings placed in service after 

18 December 31, 2017. 

19 TITLE V—AFFORDABLE 

20 HOUSING TAX CREDIT 

21 SEC. 501. AFFORDABLE HOUSING TAX CREDIT. 

22 (a) IN GENERAL.—The heading of section 42 of the 

23 Internal Revenue Code of 1986 is amended by striking 

24 ‘‘LOW-INCOME’’ and inserting ‘‘AFFORDABLE’’. 

25 (b) CONFORMING AMENDMENTS.— 


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1 (1) Subsection (a) of section 42 of the Internal 

2 Revenue Code of 1986 is amended by striking ‘‘low3 income’’ and inserting ‘‘affordable’’. 

4 (2) Paragraph (5) of section 38(b) of such Code 

5 is amended by striking ‘‘low-income’’ and inserting 

6 ‘‘affordable’’. 

7 (3) The heading of subparagraph (D) of section 

8 469(i)(3) of such Code is amended by striking 

9 ‘‘LOW-INCOME’’ and inserting ‘‘AFFORDABLE’’. 

10 (4) The heading of subparagraph (B) of section 

11 469(i)(6) of such Code is amended by striking 

12 ‘‘LOW-INCOME’’ and inserting ‘‘AFFORDABLE’’. 

13 (5) Paragraph (7) of section 772(a) of such 

14 Code is amended by striking ‘‘low-income’’ and in15 serting ‘‘affordable’’. 

16 (6) Paragraph (5) of section 772(d) of such 

17 Code is amended by striking ‘‘low-income’’ and in18 serting ‘‘affordable’’. 

19 (c) CLERICAL AMENDMENT.—The item relating to 

20 section 42 in the table of sections for subpart D of part 

21 IV of subchapter A of chapter 1 of the Internal Revenue 

22 Code of 1986 is amended to read as follows: 

‘‘Sec. 42. Affordable housing credit.’’. 

Æ 


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