I

104TH CONGRESS

1ST SESSION H. R. 186

To amend the Internal Revenue Code of 1986 to facilitate the rehabilitation

of public housing using the low-income housing credit.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mrs. COLLINS of Illinois 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 facilitate

the rehabilitation of public housing using the low-income

housing credit.

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.

4 This Act may be cited as the ‘‘Public Housing Reha5 bilitation Equity Act’’.

6 SEC. 2. HOUSING CREDIT AVAILABLE FOR REHABILITA7 TION OF PUBLIC HOUSING.

8 (a) IN GENERAL.—Subsection (i) of section 42 of the

9 Internal Revenue Code of 1986 (relating to definitions and
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1 special rules) is amended by adding at the end thereof the

2 following new paragraph:

3 ‘‘(8) SPECIAL RULES FOR CERTAIN LEASES.—

4 ‘‘(A) IN GENERAL.—In the case of an

5 agreement with respect to public housing, if all

6 of the parties to the agreement characterize

7 such agreement as a lease and elect to have the

8 provisions of this paragraph apply with respect

9 to such agreement, and if the requirements of

10 subparagraph (B) are met, then, for purposes

11 of this subtitle—

12 ‘‘(i) such agreement shall be treated

13 as a lease entered into by the parties (and

14 any lessor shall be deemed to have entered

15 into the lease in the course of carrying on

16 its trade or business), and

17 ‘‘(ii) the lessor shall be treated as the

18 owner of the property and the lessee shall

19 be treated as the lessee of the property.

20 ‘‘(B) CERTAIN REQUIREMENTS MUST BE

21 MET.—The requirements of this subparagraph

22 are met if—

23 ‘‘(i) the lessee is a public housing

24 agency (as defined in section 3(b)(6) of the

25 United States Housing Act of 1937),
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1 ‘‘(ii) the lessor agrees to incur suffi2 cient rehabilitation expenditures to be al3 lowed a credit by reason of subsection (e)

4 not later than the 2d year after entering

5 into the lease,

6 ‘‘(iii) the term of the lease ends at the

7 close of the compliance period for the

8 building, and

9 ‘‘(iv) at the end of the lease term—

10 ‘‘(I) all of the property subject to

11 the lease is owned by the public hous12 ing agency, and

13 ‘‘(II) in the case of property in

14 existence on the date of the enactment

15 of this paragraph, the applicable frac16 tion for the property (relating to low17 income occupancy) is not less than the

18 applicable fraction for such property

19 on such date.

20 ‘‘(C) PUBLIC HOUSING.—The term ‘public

21 housing’ has the meaning given such term by

22 section 3(b)(1) of the United States Housing

23 Act of 1937.

24 ‘‘(D) NO OTHER FACTORS TAKEN INTO AC25 COUNT IN DETERMINING WHETHER THERE IS A
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1 LEASE.—If the requirements of subparagraphs

2 (A) and (B) are met with respect to any trans3 action described in subparagraph (A), no other

4 factors shall be taken into account in making a

5 determination as to whether subparagraph

6 (A)(i) or (ii) applies with respect to the trans7 action.

8 ‘‘(E) 10-YEAR RULE NOT TO APPLY.—Sub9 section (d)(2)(B)(ii) shall not apply to any

10 property which is the subject of a transaction to

11 which subparagraph (A) applies.’’

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

13 subsection (a) shall apply to agreements entered into after

14 December 31, 1995.

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