II 

118TH CONGRESS 

2D SESSION S. 4693 

To amend the Internal Revenue Code of 1986 to provide an investment 

credit for converting non-residential buildings to affordable housing. 

IN THE SENATE OF THE UNITED STATES 

JULY 11 (legislative day, JULY 10), 2024 

Ms. STABENOW (for herself, Mr. BROWN, Mr. PETERS, and Mr. PADILLA) 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 provide 

an investment credit for converting non-residential buildings to affordable housing. 

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 ‘‘Revitalizing Down5 towns and Main Streets Act’’. 


ssavage on LAPJG3WLY3PROD with BILLS
2 

•S 4693 IS

1 SEC. 2. INVESTMENT CREDIT FOR CONVERSION OF NON2 RESIDENTIAL BUILDING TO AFFORDABLE 

3 HOUSING. 

4 (a) IN GENERAL.—Subpart E of part IV of sub5 chapter A of chapter 1 of subtitle A of the Internal Rev6 enue Code of 1986 is amended by inserting after section 

7 48E the following new section: 

8 ‘‘SEC. 48F. AFFORDABLE HOUSING CONVERSION CREDIT. 

9 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec10 tion 46, the affordable housing conversion credit for any 

11 taxable year is an amount equal to 20 percent of the quali12 fied conversion expenditures of the taxpayer with respect 

13 to a qualified affordable housing building placed in service 

14 by the taxpayer during the taxable year. 

15 ‘‘(b) QUALIFIED CONVERSION EXPENDITURES.—For 

16 purposes of this section— 

17 ‘‘(1) IN GENERAL.—The term ‘qualified conver18 sion expenditures’ means, with respect to any quali19 fied affordable housing building, any amount prop20 erly chargeable to capital account— 

21 ‘‘(A) for property for which depreciation is 

22 allowable under section 168, and 

23 ‘‘(B) in connection with the qualified con24 version of a qualified affordable housing build25 ing. 


ssavage on LAPJG3WLY3PROD with BILLS
3 

•S 4693 IS

1 ‘‘(2) CERTAIN EXPENDITURES NOT IN2 CLUDED.—The term ‘qualified conversion expendi3 tures’ does not include— 

4 ‘‘(A) LIMITATION ON PERIOD OF CONVER5 SION.—Except as provided in subsection (f), 

6 any amount paid or incurred other than during 

7 the 2-year period ending on the date on which 

8 the taxpayer places the qualified affordable 

9 housing building in service. 

10 ‘‘(B) COST OF ACQUISITION.—The cost of 

11 acquiring any building or interest therein. 

12 ‘‘(3) SPECIAL RULE FOR BROWNFIELDS.— 

13 Paragraph (1)(A) shall not apply with respect to any 

14 expenditure for clean up of qualifying brownfield 

15 property (as defined in section 512(b)(19)). 

16 ‘‘(4) COORDINATION WITH REHABILITATION

17 CREDIT.—In the case of any qualified conversion ex18 penditures which are taken into account for pur19 poses of determining the rehabilitation credit under 

20 section 47, the amount of such expenditures taken 

21 into account under this section (determined without 

22 regard to this paragraph) shall be reduced by 50 

23 percent. 

24 ‘‘(c) QUALIFIED CONVERSION.—For purposes of this 

25 section— 


ssavage on LAPJG3WLY3PROD with BILLS
4 

•S 4693 IS

1 ‘‘(1) IN GENERAL.—The term ‘qualified conver2 sion’ means the conversion of an eligible commercial 

3 building into a qualified affordable housing building 

4 if the qualified conversion expenditures of the tax5 payer with respect to such conversion exceed the 

6 greater of— 

7 ‘‘(A) an amount equal to 50 percent of the 

8 adjusted basis of such building (determined im9 mediately prior to such conversion), or 

10 ‘‘(B) $100,000. 

11 ‘‘(2) ELIGIBLE COMMERCIAL BUILDING.—The 

12 term ‘eligible commercial building’ means any build13 ing which, with respect to any conversion— 

14 ‘‘(A) was originally placed in service not 

15 less than 20 years before the date on which 

16 such conversion begins, and 

17 ‘‘(B) immediately prior to such conversion, 

18 was nonresidential real property (as defined in 

19 section 168). 

20 ‘‘(d) QUALIFIED AFFORDABLE HOUSING BUILD21 ING.—For purposes of this section— 

22 ‘‘(1) IN GENERAL.—The term ‘qualified afford23 able housing building’ means any residential building 

24 if during the 30-year period beginning on the date 

25 on which such building is placed in service by the 


ssavage on LAPJG3WLY3PROD with BILLS
5 

•S 4693 IS

1 taxpayer, not less than 20 percent of the residential 

2 units in the building are both rent-restricted and re3 served for individuals whose income is 80 percent or 

4 less of the area median income. 

5 ‘‘(2) RENT AND INCOME LIMITATION.—For 

6 purposes of this subsection, rules similar to the rules 

7 of subsection (g) of section 42 shall apply to deter8 mine whether a unit is rent-restricted, treatment of 

9 units occupied by individuals whose incomes rise 

10 above the limit, and the treatment of units where 

11 Federal rental assistance is reduced as tenant’s in12 come increases. 

13 ‘‘(e) LIMITATION ON AGGREGATE CREDIT ALLOW14 ABLE.— 

15 ‘‘(1) CREDIT MAY NOT EXCEED CREDIT

16 AMOUNT ALLOCATED TO BUILDING.— 

17 ‘‘(A) IN GENERAL.—The amount of the 

18 credit determined under this section with re19 spect to any building shall not exceed the quali20 fied conversion credit dollar amount allocated to 

21 such building under this subsection by the 

22 housing credit agency of the State in which 

23 such building is located. 

24 ‘‘(B) TIME FOR MAKING ALLOCATION.— 

25 Except in the case of an allocation which meets 


ssavage on LAPJG3WLY3PROD with BILLS
6 

•S 4693 IS

1 the requirements of subparagraph (C), an allo2 cation shall be taken into account under sub3 paragraph (A) only if it is made not later than 

4 the close of the calendar year in which the 

5 building is placed in service. 

6 ‘‘(C) EXCEPTION WHERE BINDING COM7 MITMENT.—An allocation meets the require8 ments of this subparagraph if there is a binding 

9 commitment (not later than the close of the cal10 endar year in which the building is placed in 

11 service) by the housing credit agency to allocate 

12 a specified housing credit dollar amount to such 

13 building beginning in a later taxable year. 

14 ‘‘(2) STATE LIMITATION.— 

15 ‘‘(A) IN GENERAL.—The aggregate quali16 fied conversion credit dollar amount which a 

17 housing credit agency of any State may allocate 

18 is the sum of— 

19 ‘‘(i) the amount which bears the same 

20 ratio to the national qualified conversion 

21 credit limitation as— 

22 ‘‘(I) the population of such State, 

23 bears to 

24 ‘‘(II) the population of all States, 

25 plus 


ssavage on LAPJG3WLY3PROD with BILLS
7 

•S 4693 IS

1 ‘‘(ii) the sum of any amounts deter2 mined under subparagraph (C). 

3 ‘‘(B) NATIONAL QUALIFIED CONVERSION

4 CREDIT LIMITATION.—The national qualified 

5 conversion credit limitation is $12,000,000,000. 

6 ‘‘(C) ADDITIONAL AMOUNTS PROVIDED

7 FOR CERTAIN BUILDINGS IN ECONOMICALLY

8 DISTRESSED AREAS.— 

9 ‘‘(i) IN GENERAL.—For purposes of 

10 subparagraph (A)(ii), in any case in 

11 which— 

12 ‘‘(I) the housing credit agency of 

13 a State allocates an amount to a 

14 building which is located in an eco15 nomically distressed area, and 

16 ‘‘(II) the Secretary subsequently 

17 designates such amount for purposes 

18 of this paragraph, 

19 the amount determined under this para20 graph with respect to such building shall 

21 be the amount originally allocated by the 

22 housing credit agency of the State under 

23 clause (i). 

24 ‘‘(ii) LIMITATION.—The aggregate 

25 amount which the Secretary may designate 


ssavage on LAPJG3WLY3PROD with BILLS
8 

•S 4693 IS

1 under clause (i)(II) shall not exceed 

2 $3,000,000,000. 

3 ‘‘(iii) MANNER OF DESIGNATION.— 

4 Not later than 120 days after the date of 

5 the enactment of this section, the Sec6 retary shall establish a program for deter7 mining the designation of amounts that 

8 may be designated under this subpara9 graph. 

10 ‘‘(D) REALLOCATION OF CERTAIN

11 AMOUNTS.— 

12 ‘‘(i) IN GENERAL.—Notwithstanding 

13 subparagraph (A)— 

14 ‘‘(I) no amount may be allocated 

15 under paragraph (1) by a housing 

16 credit agency of an undersubscribed 

17 State after December 31, 2027, and 

18 ‘‘(II) the dollar amount deter19 mined under subparagraph (A) with 

20 respect to any oversubscribed State 

21 after such date shall be increased by 

22 such State’s share of the reallocation 

23 amount. 

24 ‘‘(ii) STATE SHARE.—For purposes of 

25 clause (i), an oversubscribed State’s share 


ssavage on LAPJG3WLY3PROD with BILLS
9 

•S 4693 IS

1 of the reallocation amount is the amount 

2 which bears the same ratio to the realloca3 tion amount as— 

4 ‘‘(I) the population of such State, 

5 bears to 

6 ‘‘(II) the population of all over7 subscribed States. 

8 ‘‘(iii) DEFINITIONS.—For purposes of 

9 this subparagraph— 

10 ‘‘(I) UNDERSUBSCRIBED

11 STATE.—The term ‘undersubscribed 

12 State’ means any State that is not an 

13 oversubscribed State. 

14 ‘‘(II) OVERSUBSCRIBED

15 STATE.—The term ‘oversubscribed 

16 State’ means any State the housing 

17 credit agency of which has allocated 

18 all of the qualified conversion credit 

19 dollar amount which may be allocated 

20 by it before the date described in 

21 clause (i)(I). 

22 ‘‘(III) REALLOCATION

23 AMOUNT.—The term ‘reallocation 

24 amount’ means the sum of the 

25 amounts described in subparagraph 


ssavage on LAPJG3WLY3PROD with BILLS
10 

•S 4693 IS

1 (A) which have not been allocated by 

2 undersubscribed States before the 

3 date described in clause (i)(I). 

4 ‘‘(3) MANNER OF ALLOCATION.— 

5 ‘‘(A) PLAN FOR ALLOCATION.— 

6 ‘‘(i) IN GENERAL.—Notwithstanding 

7 any other provision of this section, the 

8 qualified conversion credit dollar amount 

9 with respect to any building shall be zero 

10 unless such amount was allocated pursuant 

11 to a conversion credit allocation plan of the 

12 housing credit agency which is approved by 

13 the governmental unit (in accordance with 

14 rules similar to the rules of section 

15 147(f)(2) (other than subparagraph (B)(ii) 

16 thereof)) of which such agency is a part. 

17 ‘‘(ii) CONVERSION CREDIT ALLOCA18 TION PLAN.—For purposes of this sub19 paragraph, the term ‘conversion credit allo20 cation plan’ means a plan— 

21 ‘‘(I) which sets selection criteria 

22 for allocations, taking into account— 

23 ‘‘(aa) whether the credit is 

24 needed to assure the financial 

25 feasibility of the conversion, 


ssavage on LAPJG3WLY3PROD with BILLS
11 

•S 4693 IS

1 ‘‘(bb) the extent to which 

2 the conversion results in the cre3 ation of affordable housing, 

4 ‘‘(cc) the extent to which the 

5 conversion results in the creation 

6 of housing near transportation, 

7 employment, and commercial op8 portunities, 

9 ‘‘(dd) the extent to which 

10 the conversion will support small 

11 businesses and economic revital12 ization in the surrounding area, 

13 ‘‘(ee) the degree of local gov14 ernment support for the conver15 sion, and 

16 ‘‘(ff) the readiness of the 

17 building for a qualified conver18 sion, and 

19 ‘‘(II) which provides a procedure 

20 that the agency (or an agent or other 

21 private contractor of such agency) will 

22 follow in monitoring for noncompli23 ance with the requirements of sub24 section (d) and in notifying the InterVerDate Sep 11 2014 19:03 Aug 19, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S4693.IS S4693

ssavage on LAPJG3WLY3PROD with BILLS
12 

•S 4693 IS

1 nal Revenue Service of such non2 compliance. 

3 ‘‘(B) BINDING ALLOCATION AGREEMENTS; 

4 REPORTING.—In making allocations of qualified 

5 conversion credit dollar amounts, each housing 

6 credit agency shall— 

7 ‘‘(i) enter into binding agreements 

8 with taxpayers for the allocation of quali9 fied conversion credit dollar amounts, 

10 which agreements shall specify the amount 

11 of qualified conversion credit dollar amount 

12 allocated to the building and the terms for 

13 any modifications or withdrawal of such al14 location, and 

15 ‘‘(ii) report to the Secretary, at such 

16 time and in such manner as the Secretary 

17 may require, the amount of allocations 

18 made with respect to any building. 

19 ‘‘(C) STATE EXTENDED USE REQUIRE20 MENTS PERMITTED PAST 30 YEARS.—For pur21 poses of this paragraph, a housing credit agen22 cy’s plan shall not fail to be treated as a con23 version credit allocation plan merely because it 

24 includes, and nothing in this section shall be 

25 construed to limit a binding allocation agreeVerDate Sep 11 2014 19:03 Aug 19, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S4693.IS S4693

ssavage on LAPJG3WLY3PROD with BILLS
13 

•S 4693 IS

1 ment from including, affordability or rent re2 striction requirements with respect to the build3 ing that apply for a longer period than the 30- 

4 year period described in subsections (d) and 

5 (g)(1)(B). 

6 ‘‘(4) DEFINITIONS AND OTHER RULES.— 

7 ‘‘(A) HOUSING CREDIT AGENCY.—The 

8 term ‘housing credit agency’ means, with re9 spect to any State, the housing credit agency 

10 authorized under section 42(h)(8) or such other 

11 agency as authorized by the State for purposes 

12 of this section. 

13 ‘‘(B) ECONOMICALLY DISTRESSED AREA.— 

14 The term ‘economically distressed area’ means 

15 any area which— 

16 ‘‘(i) which has been designated as a 

17 qualified census tract under section 

18 42(d)(5)(B)(ii) or as a difficult develop19 ment area under section 42(d)(5)(B)(iii), 

20 or 

21 ‘‘(ii) which meets the requirement of 

22 section 301(a)(3) of the Public Works and 

23 Economic Development Act of 1965. 

24 ‘‘(C) STATE.—The term ‘State’ includes a 

25 possession of the United States. 


ssavage on LAPJG3WLY3PROD with BILLS
14 

•S 4693 IS

1 ‘‘(D) OTHER RULES.—Rules similar to the 

2 rules of subparagraphs (A) and (B) of section 

3 42(h)(7) shall apply for purposes of this sec4 tion. 

5 ‘‘(f) PROGRESS EXPENDITURES.—If the Secretary 

6 determines, on the basis of architectural plans and speci7 fications that a qualified conversion is reasonably expected 

8 to exceed 2 years, rules similar to the rules of section 

9 47(d) shall apply with respect to such conversion for pur10 poses of this section. 

11 ‘‘(g) SPECIAL RULES FOR CERTAIN AREAS.— 

12 ‘‘(1) QUALIFIED CENSUS TRACTS AND DIF13 FICULT DEVELOPMENT AREAS.—In the case of a 

14 qualified affordable housing building— 

15 ‘‘(A) which is located in any area which is 

16 designated as a qualified census tract under 

17 section 42(d)(5)(B)(ii) or as a difficult develop18 ment area under section 42(d)(5)(B)(iii)), and 

19 ‘‘(B) with respect to which during 30-year 

20 period beginning on the date on which such 

21 building is placed in service by the taxpayer, 

22 not less than 20 percent of the residential units 

23 in the building are both rent-restricted and re24 served for individuals whose income is 60 per25 cent or less of the area median income, 


ssavage on LAPJG3WLY3PROD with BILLS
15 

•S 4693 IS

1 subsection (a) shall be applied by substituting ‘30 

2 percent’ for ‘20 percent’. 

3 ‘‘(2) HISTORIC PRESERVATION IN RURAL

4 AREAS.— 

5 ‘‘(A) IN GENERAL.—In the case of a quali6 fied affordable housing building which is in a 

7 rural area and is part of an historic preserva8 tion project, the taxpayer may elect to sub9 stitute ‘35 percent’ for ‘20 percent’ under sub10 section (a) with respect to such portion of the 

11 aggregate qualified conversion expenditures 

12 taken into account under such subsection as 

13 does not exceed $2,000,000. 

14 ‘‘(B) DEFINITIONS.—For purposes of this 

15 paragraph— 

16 ‘‘(i) RURAL AREA.—The term ‘rural 

17 area’ shall have the meaning given such 

18 term under section 1393(a)(2). 

19 ‘‘(ii) HISTORIC PRESERVATION

20 PROJECT.—The term ‘historic preservation 

21 project’ means a qualified conversion which 

22 involves the certified rehabilitation of a 

23 certified historic structure. Whether con24 version of a certified historic structure in25 volves certified rehabilitation shall be deVerDate Sep 11 2014 19:03 Aug 19, 2024 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S4693.IS S4693

ssavage on LAPJG3WLY3PROD with BILLS
16 

•S 4693 IS

1 termined under rules similar to the rules of 

2 section 47(c)(2)(C). 

3 ‘‘(h) REGULATIONS.—The Secretary shall issue such 

4 regulations or other guidance as may be necessary or ap5 propriate to carry out the purposes of this section, includ6 ing regulations or other guidance— 

7 ‘‘(1) providing for the recapture of the credit 

8 determined under subsection (a) if the qualified af9 fordable housing building ceases to be a qualified af10 fordable housing building during the 30-year period 

11 beginning on the date that such building is placed 

12 in service by the taxpayer, 

13 ‘‘(2) detailing any certifications required from 

14 the taxpayer or any housing credit agency of a 

15 State, 

16 ‘‘(3) with respect to the application of sub17 section (b)(4), 

18 ‘‘(4) with respect to information reporting on 

19 allocations of qualified conversion credit dollar 

20 amounts, 

21 ‘‘(5) providing rules for making a determination 

22 as to whether an area is described in subsection 

23 (e)(4)(B), and 

24 ‘‘(6) which encourages housing credit agencies 

25 to allocate, to the extent practicable, qualified conVerDate Sep 11 2014 19:03 Aug 19, 2024 Jkt 049200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S4693.IS S4693

ssavage on LAPJG3WLY3PROD with BILLS
17 

•S 4693 IS

1 version credit dollar amounts to non-metropolitan 

2 counties within the State in proportion to the non3 metropolitan population of the State, but only to the 

4 extent it is demonstrated within such non-metropoli5 tan counties that there are sufficient qualified con6 version expenditures to warrant such allocations.’’. 

7 (b) TRANSFERABILITY OF CREDIT.—Section 

8 6418(f)(1)(A) of such Code is amended by adding at the 

9 end the following new clause: 

10 ‘‘(xii) The affordable housing conver11 sion credit determined under section 

12 48F.’’. 

13 (c) CONFORMING AMENDMENTS.— 

14 (1) Section 46 of such Code is amended in 

15 paragraph (6) by striking ‘‘and’’ at the end, in para16 graph (7) by striking the period at the end and in17 serting ‘‘, and’’, and by adding at the end the fol18 lowing new paragraph: 

19 ‘‘(8) the affordable housing conversion credit.’’. 

20 (2) Section 49(a)(1)(C) of such Code is amend21 ed by striking ‘‘and’’ at the end of clause (vii), by 

22 striking the period at the end of clause (viii), and by 

23 adding at the end the follow new clause: 


ssavage on LAPJG3WLY3PROD with BILLS
18 

•S 4693 IS

1 ‘‘(ix) the basis of any property which 

2 is being converted as part of a qualified 

3 conversion under section 48F.’’. 

4 (3) Section 50(a)(2)(E) of such Code is amend5 ed by striking ‘‘or 48E(e)’’ and inserting ‘‘48E(e), 

6 or 48F(f)’’. 

7 (4) The table of sections for subpart E of part 

8 IV of subchapter A of chapter 1 of subtitle A of 

9 such Code is amended by adding at the end the fol10 lowing new item: 

‘‘Sec. 48F. Affordable housing conversion credit.’’. 

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

12 this section shall apply to qualified affordable housing 

13 buildings (as defined in section 48F of the Internal Rev14 enue Code of 1986, as added by this section) placed in 

15 service after the date of the enactment of this Act. 

Æ 


ssavage on LAPJG3WLY3PROD with BILLS