I 

108TH CONGRESS 

1ST SESSION H. R. 3610

To amend the Internal Revenue Code of 1986 to replace the recapture 

bond provisions of the low income housing tax credit program. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2003

Mr. HOUGHTON (for himself, Mrs. JOHNSON of Connecticut, Mr. RANGEL, 

and Mr. NEAL of Massachusetts) 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 replace 

the recapture bond provisions of the low income housing 

tax credit program.

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

3 SECTION 1. REPEAL OF RECAPTURE BOND RULE. 

4 (a) IN GENERAL.—Paragraph (6) of section 42(j) of 

5 the Internal Revenue Code of 1986 (relating to recapture 

6 of credit) is amended to read as follows: 

7 ‘‘(6) NO RECAPTURE ON DISPOSITION OF

8 BUILDING (OR INTEREST THEREIN) REASONABLY
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1 EXPECTED TO CONTINUE AS A QUALIFIED LOW-IN2 COME BUILDING.—

3 ‘‘(A) IN GENERAL.—In the case of a dis4 position of a building or an interest therein, the 

5 taxpayer shall be discharged from liability for 

6 any additional tax under this subsection by rea7 son of such disposition if it is reasonably ex8 pected that such building will continue to be op9 erated as a qualified low-income building for 

10 the remaining compliance period with respect to 

11 such building. 

12 ‘‘(B) STATUTE OF LIMITATIONS.—

13 ‘‘(i) EXTENSION OF PERIOD.—The pe14 riod for assessing a deficiency attributable 

15 to the application of subparagraph (A) 

16 with respect to a building (or interest 

17 therein) during the compliance period with 

18 respect to such building shall not expire 

19 before the expiration of 3 years after the 

20 end of such compliance period. 

21 ‘‘(ii) ASSESSMENT.—Such deficiency 

22 may be assessed before the expiration of 

23 the 3-year period referred to in clause (i) 

24 notwithstanding the provisions of any 
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1 other law or rule of law which would other2 wise prevent such assessment.’’. 

3 (b) INFORMATION REPORTING.—

4 (1) IN GENERAL.—Subpart B of part III of 

5 subchapter A of chapter 61 of such Code (relating 

6 to information concerning transactions with other 

7 persons) is amended by inserting after section 

8 6050T the following new section: 

9 ‘‘SEC. 6050U. RETURNS RELATING TO PAYMENT OF LOW-IN10 COME HOUSING CREDIT REPAYMENT 

11 AMOUNT. 

12 ‘‘(a) REQUIREMENT OF REPORTING.—Every person 

13 who, at any time during the taxable year, is an owner of 

14 a building (or an interest therein)—

15 ‘‘(1) which is in the compliance period at any 

16 time during such year, and 

17 ‘‘(2) with respect to which recapture is required 

18 by section 42(j), 

19 shall, at such time as the Secretary may prescribe, make 

20 the return described in subsection (b). 

21 ‘‘(b) FORM AND MANNER OF RETURNS.—A return 

22 is described in this subsection if such return—

23 ‘‘(1) is in such form as the Secretary may pre24 scribe, and 

25 ‘‘(2) contains—
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1 ‘‘(A) the name, address, and TIN of each 

2 person who, with respect to such building or in3 terest, was formerly an investor in such owner 

4 at any time during the compliance period, 

5 ‘‘(B) the amount (if any) of any credit re6 capture amount required under section 42(j), 

7 and 

8 ‘‘(C) such other information as the Sec9 retary may prescribe. 

10 ‘‘(c) STATEMENTS TO BE FURNISHED TO PERSONS

11 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.—

12 Every person required to make a return under subsection 

13 (a) shall furnish to each person whose name is required 

14 to be set forth in such return a written statement show15 ing—

16 ‘‘(1) the name and address of the person re17 quired to make such return and the phone number 

18 of the information contact for such person, and 

19 ‘‘(2) the information required to be shown on 

20 the return with respect to such person. 

21 The written statement required under the preceding sen22 tence shall be furnished on or before March 31 of the year 

23 following the calendar year for which the return under 

24 subsection (a) is required to be made. 
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1 ‘‘(d) COMPLIANCE PERIOD.—For purposes of this 

2 section, the term ‘compliance period’ has the meaning 

3 given such term by section 42(i).’’. 

4 (2) ASSESSABLE PENALTIES.—

5 (A) Subparagraph (B) of section 

6 6724(d)(1) of such Code (relating to defini7 tions) is amended by redesignating clauses (xii) 

8 through (xviii) as clauses (xiii) through (xix), 

9 respectively, and by inserting after clause (xi) 

10 the following new clause: 

11 ‘‘(xii) section 6050U (relating to re12 turns relating to payment of low-income 

13 housing credit repayment amount),’’. 

14 (B) Paragraph (2) of section 6724(d) of 

15 such Code is amended by striking ‘‘or’’ at the 

16 end of subparagraph (AA), by striking the pe17 riod at the end of subparagraph (BB) and in18 serting ‘‘, or’’, and by adding after subpara19 graph (BB) the following new subparagraph: 

20 ‘‘(CC) section 6050U (relating to returns 

21 relating to payment of low-income housing cred22 it repayment amount).’’. 

23 (C) CLERICAL AMENDMENT.—The table of 

24 sections for subpart B of part III of subchapter 

25 A of chapter 61 of such Code is amended by in-
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1 serting after the item relating to section 6050S 

2 the following new item:

‘‘Sec. 6050U. Returns relating to payment of low-income housing credit repayment amount.’’.

3 (c) EFFECTIVE DATE.—

4 (1) IN GENERAL.—The amendments made by 

5 this section shall apply with respect to any liability 

6 for the credit recapture amount under section 42(j) 

7 of the Internal Revenue Code of 1986 that arises 

8 after the date of the enactment of this Act. 

9 (2) SPECIAL RULE FOR LOW-INCOME HOUSING

10 BUILDINGS SOLD BEFORE DATE OF ENACTMENT OF

11 THIS ACT.—In the case of a building disposed of be12 fore the date of the enactment of this Act with re13 spect to which the taxpayer posted a bond (or alter14 native form of security) under section 42(j) of the 

15 Internal Revenue Code of 1986 (as in effect before 

16 the enactment of this Act), the taxpayer may elect 

17 (by notifying the Secretary of the Treasury in writ18 ing)—

19 (A) to cease to be subject to the bond re20 quirements under section 42(j)(6) of such Code 

21 (as in effect before the enactment of this Act), 

22 and 
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1 (B) to be subject to the requirements of 

2 section 42(j) of such Code (as amended by this 

3 Act).

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