I 

117TH CONGRESS 

1ST SESSION H. R. 2573 

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

housing credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 15, 2021 

Ms. DELBENE (for herself, Mr. BEYER, Mrs. WALORSKI, and Mr. 

WENSTRUP) 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 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 2021’’. 

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 

Sec. 101. Increases in State allocations. 

TITLE II—REFORMS RELATING TO TENANT ELIGIBILITY 


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Sec. 201. Average income test applicability to exempt facility bonds. 

Sec. 202. Codification of rules relating to increased tenant income. 

Sec. 203. Modification of student occupancy rules. 

Sec. 204. Tenant voucher payments taken into account as rent for certain purposes. 

Sec. 205. Requirement that low-income housing credit-supported housing protect victims of domestic abuse. 

Sec. 206. Clarification of general public use requirement relating to veterans, 

etc. 

TITLE III—RULES RELATING TO CREDIT ELIGIBILITY AND 

DETERMINATION 

Sec. 301. Reconstruction or replacement period after casualty loss. 

Sec. 302. Modification of previous ownership rules; limitation on acquisition 

basis. 

Sec. 303. Certain relocation costs taken into account as rehabilitation expenditures. 

Sec. 304. Repeal of qualified census tract population cap. 

Sec. 305. Determination of community revitalization plan to be made by housing credit agency. 

Sec. 306. Prohibition of local approval and contribution requirements. 

Sec. 307. Increase in credit for certain projects designated to serve extremely 

low-income households. 

Sec. 308. Increase in credit for bond-financed projects designated by State 

agency. 

Sec. 309. Elimination of basis reduction for low-income housing properties receiving certain energy benefits. 

Sec. 310. Restriction of planned foreclosures. 

Sec. 311. Increase of population cap for difficult development areas. 

Sec. 312. Increased cost oversight and accountability. 

Sec. 313. Tax-exempt bond financing requirement. 

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—REFORMS RELATING TO RURAL ASSISTANCE 

Sec. 501. Inclusion of rural areas as difficult development areas. 

Sec. 502. Uniform income eligibility for rural projects. 

TITLE VI—EXEMPT FACILITY BONDS 

Sec. 601. Revision and clarification of the treatment of refunding issues. 

TITLE VII—AFFORDABLE HOUSING TAX CREDIT 

Sec. 701. Affordable housing tax credit. 


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1 TITLE I—REFORM OF STATE 

2 ALLOCATION FORMULAS 

3 SEC. 101. INCREASES IN STATE ALLOCATIONS. 

4 (a) IN GENERAL.—Clause (ii) of section 42(h)(3)(C) 

5 of the Internal Revenue Code of 1986 is amended— 

6 (1) by striking ‘‘$1.75’’ in subclause (I) and in7 serting ‘‘$4.47 ($3.52 in the case of calendar year 

8 2021)’’, and 

9 (2) by striking ‘‘$2,000,000’’ in subclause (II) 

10 and inserting ‘‘$5,154,965 ($4,057,031 in the case 

11 of calendar year 2021)’’. 

12 (b) COST-OF-LIVING ADJUSTMENT.—Subparagraph 

13 (H) of section 42(h)(3) of such Code is amended— 

14 (1) by striking ‘‘2002’’ in clause (i) and insert15 ing ‘‘2022’’, 

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

17 amounts in subparagraph (C)’’ in clause (i) and in18 serting ‘‘the dollar amounts applicable to such cal19 endar year under subclauses (I) and (II) of subpara20 graph (C)(ii)’’, 

21 (3) by striking ‘‘2001’’ in clause (i)(II) and in22 serting ‘‘2021’’, 

23 (4) by striking ‘‘$2,000,000 amount’’ in clause 

24 (ii)(I) and inserting ‘‘amount under subparagraph 

25 (C)(ii)(II)’’, and 


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1 (5) by striking ‘‘$1.75 amount’’ in clause 

2 (ii)(II) and inserting ‘‘amount under subparagraph 

3 (C)(ii)(I)’’. 

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

5 this section shall apply to calendar years beginning after 

6 December 31, 2020. 

7 TITLE II—REFORMS RELATING 

8 TO TENANT ELIGIBILITY 

9 SEC. 201. AVERAGE INCOME TEST APPLICABILITY TO EX10 EMPT FACILITY BONDS. 

11 (a) IN GENERAL.—Paragraph (1) of section 142(d) 

12 of the Internal Revenue Code of 1986 is amended— 

13 (1) by striking ‘‘(A) or (B)’’ and inserting ‘‘(A), 

14 (B), or (C)’’, and 

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

17 ‘‘(C) AVERAGE INCOME TEST.—A project 

18 meets the requirements of this subparagraph if 

19 it meets the minimum requirements of section 

20 42(g)(1)(C).’’. 

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

22 this section shall apply to elections made under section 

23 142(d)(1) of the Internal Revenue Code of 1986 after 

24 March 23, 2018. 


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1 SEC. 202. 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 is amended by strik5 ing ‘‘clauses (ii), (iii), and (iv)’’ and all that follows and 

6 inserting ‘‘clauses (ii), (iii), (iv), and (vi), notwithstanding 

7 an increase in the income of the occupants above the in8 come limitation applicable under paragraph (1)— 

9 ‘‘(I) a low-income unit shall con10 tinue to be treated as a low-income 

11 unit if the income of such occupants 

12 initially was 60 percent or less of area 

13 median gross income and such unit 

14 continues to be rent-restricted, and 

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

16 of initial occupancy by such occu17 pants, any Federal, State, or local 

18 government income restriction ap19 plied, and which subsequently becomes 

20 part of a building with respect to 

21 which rehabilitation expenditures are 

22 taken into account under subsection 

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

24 unit if the income of such occupants 

25 initially was 60 percent or less of area 

26 median gross income and does not exVerDate Sep 11 2014 06:02 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2573.IH H2573

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1 ceed 120 percent of area median gross 

2 income as of the date of acquisition of 

3 the property by the taxpayer.’’. 

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

5 42(g)(2) of the Internal Revenue Code of 1986, as amend6 ed by this Act, is further amended by adding at the end 

7 the following new clause: 

8 ‘‘(vi) EXCEPTION TO RULE RELATING

9 TO INCREASED TENANT INCOME.—In the 

10 case of an occupant of a low-income unit 

11 who initially qualified to occupy such unit 

12 by reason of paragraph (1)(C) with an in13 come in excess of 60 percent of area me14 dian gross income but not in excess of 80 

15 percent of area median gross income, 

16 clause (i) shall be applied for substituting 

17 ‘80 percent’ for ‘60 percent’ each place it 

18 appears.’’. 

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

20 this section shall apply to taxable years beginning after 

21 December 31, 2020. 

22 SEC. 203. MODIFICATION OF STUDENT OCCUPANCY RULES. 

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

24 42(i)(3) of the Internal Revenue Code of 1986 is amended 

25 to read as follows: 


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1 ‘‘(D) RULES RELATING TO STUDENTS.— 

2 ‘‘(i) IN GENERAL.—A unit occupied 

3 solely by individuals who— 

4 ‘‘(I) have not attained age 24, 

5 and 

6 ‘‘(II) are enrolled in a full-time 

7 course of study at an institution of 

8 higher education (as defined in section 

9 3304(f)), 

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

11 ‘‘(ii) EXCEPTION FOR CERTAIN FED12 ERAL PROGRAMS.—In the case of a feder13 ally-assisted building (as defined in sub14 section (d)(6)(C)(i)), clause (i) shall not 

15 apply to a unit all of the occupants of 

16 which meet all applicable requirements 

17 under the housing program described in 

18 such subsection through which the building 

19 is assisted, financed, or operated. 

20 ‘‘(iii) OTHER EXCEPTIONS.—An indi21 vidual shall not be treated as described in 

22 clause (i) if the individual meets the in23 come limitation applicable under subsection 

24 (g)(1) to the project of which the building 

25 is a part and— 


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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 1 or more qualifying 

10 children (as defined in section 

11 152(c)), 

12 ‘‘(V) is or has been a victim or 

13 threatened victim of domestic violence, 

14 dating violence, sexual assault, or 

15 stalking (as defined in section 40002 

16 of the Violence Against Women Act of 

17 1994), 

18 ‘‘(VI) is or has been a victim of 

19 any form of human trafficking, or 

20 ‘‘(VII) is, or was prior to attain21 ing the age of majority— 

22 ‘‘(aa) an emancipated minor 

23 or in legal guardianship as deter24 mined by a court of competent 


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1 jurisdiction in the individual’s 

2 State of legal residence, 

3 ‘‘(bb) under the care and 

4 placement responsibility of the 

5 State agency responsible for ad6 ministering a plan under part B 

7 or part E of title IV of the Social 

8 Security Act, or 

9 ‘‘(cc) an unaccompanied 

10 youth (within the meaning of sec11 tion 725(6) of the McKinney12 Vento Homeless Assistance Act 

13 (42 U.S.C. 11434a(6))) or a 

14 homeless child or youth (within 

15 the meaning of section 725(2) of 

16 such Act (42 U.S.C. 

17 11434a(2))). 

18 For purposes of subclause (VI), an in19 dividual is or has been a victim of 

20 human trafficking if such individual 

21 was subjected to an act or practice de22 scribed in paragraph (11) or (12) of 

23 section 103 of the Trafficking Victims 

24 Protection Act of 2000.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2021. 

4 SEC. 204. TENANT VOUCHER PAYMENTS TAKEN INTO AC5 COUNT AS RENT FOR CERTAIN PURPOSES. 

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

7 42(g)(2) of the Internal Revenue Code of 1986 is amended 

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

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

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

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

12 applies, clause (i) shall not apply with respect to any ten13 ant-based assistance (as defined in section 8(f)(7) of the 

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

15 1437f(f)(7))).’’. 

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

17 this section shall apply to rent paid in taxable years begin18 ning after December 31, 2021. 

19 SEC. 205. REQUIREMENT THAT LOW-INCOME HOUSING 

20 CREDIT-SUPPORTED HOUSING PROTECT VIC21 TIMS OF DOMESTIC ABUSE. 

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

23 42(h)(6) of the Internal Revenue Code of 1986 is amended 

24 by striking ‘‘and’’ at the end of clause (v), by striking the 


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1 period at the end of clause (vi) and inserting ‘‘, and’’, and 

2 by adding at the end the following new clause: 

3 ‘‘(vii) which— 

4 ‘‘(I) prohibits the refusal to lease 

5 to, or termination of a lease by, a per6 son solely on the basis of criminal ac7 tivity directly relating to domestic vio8 lence, dating violence, sexual assault, 

9 or stalking that is engaged in by a 

10 member of the household of the ten11 ant or any guest or other person 

12 under the control of the tenant, if the 

13 tenant or an affiliated individual of 

14 the tenant is the victim or threatened 

15 victim of such domestic violence, dat16 ing violence, sexual assault, or stalk17 ing, and 

18 ‘‘(II) allows prospective, present, 

19 or former occupants of the building 

20 the right to enforce in any State court 

21 the prohibition of subclause (I).’’. 

22 (b) BIFURCATION.— 

23 (1) IN GENERAL.—Subparagraph (B) of section 

24 42(h)(6) of the Internal Revenue Code of 1986, as 


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1 amended by subsection (a), is further amended by 

2 adding at the end the following new flush sentence: 

3 ‘‘For purposes of clause (vii)(I), rules similar to 

4 the rules of section 41411(b)(3)(B) of the Vio5 lence Against Women Act of 1994 shall apply 

6 with respect to the owner or manager of a 

7 building.’’. 

8 (2) EFFECT OF BIFURCATION.—Paragraph (2) 

9 of section 42(g) of such Code is amended by adding 

10 at the end the following new subparagraph: 

11 ‘‘(F) TREATMENT OF BIFURCATION IN

12 CASES OF DOMESTIC VIOLENCE.—In any case 

13 in which— 

14 ‘‘(i) an occupant is evicted or removed 

15 from a low-income unit because such occu16 pant has engaged in criminal activity di17 rectly relating to domestic violence, dating 

18 violence, sexual assault, or stalking against 

19 an affiliated individual or other individual 

20 on the basis of criminal activity directly re21 lating to domestic violence, dating violence, 

22 sexual assault, or stalking, and 

23 ‘‘(ii) the lease on such unit is bifur24 cated as provided in the last sentence of 

25 subsection (h)(6)(B), 


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1 then the remaining occupants of such low-in2 come unit shall not be treated as a new tenant 

3 for purposes of this section.’’. 

4 (c) CLARIFICATION OF GENERAL PUBLIC USE RE5 QUIREMENT.—Paragraph (9) of section 42(g) of the Inter6 nal Revenue Code of 1986 is amended by striking ‘‘or’’ 

7 at the end of subparagraph (B), by striking the period 

8 at the end of subparagraph (C) and inserting ‘‘, or’’, and 

9 by adding at the end the following new subparagraph: 

10 ‘‘(D) who are victims or threatened victims 

11 of criminal activity directly relating to domestic 

12 violence, dating violence, sexual assault, or 

13 stalking.’’. 

14 (d) EFFECTIVE DATES.— 

15 (1) IN GENERAL.—Except as provided in para16 graph (2), the amendments made by this section 

17 shall apply to agreements executed or modified on or 

18 after the date that is 30 days after the date of the 

19 enactment of this Act. 

20 (2) PUBLIC USE REQUIREMENT.—The amend21 ments made by subsection (c) shall apply to build22 ings placed in service before, on, or after the date 

23 of the enactment of this Act. 


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1 SEC. 206. CLARIFICATION OF GENERAL PUBLIC USE RE2 QUIREMENT RELATING TO VETERANS, ETC. 

3 (a) IN GENERAL.—Paragraph (9) of section 42(g) of 

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

5 205, is further amended by adding at the end the following 

6 flush language: 

7 ‘‘Any veteran of the Armed Forces shall be treated 

8 as a member of a specified group under a Federal 

9 program for purposes of subparagraph (B).’’. 

10 (b) QUALIFIED RESIDENTIAL RENTAL PROJECTS.— 

11 Paragraph (2) of section 142(d) of the Internal Revenue 

12 Code of 1986 is amended by adding at the end the fol13 lowing new subparagraph: 

14 ‘‘(F) CLARIFICATION OF GENERAL PUBLIC

15 USE REQUIREMENT.—A unit shall not fail to 

16 meet the general public use requirement solely 

17 because of occupancy restrictions or pref18 erences, if such restrictions or preferences meet 

19 the general public use requirement of section 

20 42.’’. 

21 (c) EFFECTIVE DATES.— 

22 (1) IN GENERAL.—The amendment made by 

23 subsection (a) shall apply to buildings placed in serv24 ice before, on, or after the date of the enactment of 

25 this Act. 


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1 (2) QUALIFIED RESIDENTIAL RENTAL

2 PROJECTS.—The amendment made by subsection (b) 

3 shall apply to bonds issued before, on, or after the 

4 date of the enactment of this Act. 

5 TITLE III—RULES RELATING TO 

6 CREDIT ELIGIBILITY AND DE7 TERMINATION 

8 SEC. 301. RECONSTRUCTION OR REPLACEMENT PERIOD 

9 AFTER CASUALTY LOSS. 

10 (a) NO RECAPTURE FOLLOWING CASUALTY LOSS.— 

11 Subparagraph (E) of section 42(j)(4) of the Internal Rev12 enue Code of 1986 is amended to read as follows: 

13 ‘‘(E) NO RECAPTURE BY REASON OF CAS14 UALTY LOSS.— 

15 ‘‘(i) IN GENERAL.—The increase in 

16 tax under this subsection shall not apply to 

17 a reduction in qualified basis by reason of 

18 a casualty loss to the extent such loss is 

19 restored by reconstruction or replacement 

20 within a reasonable period established by 

21 the applicable housing credit agency, not to 

22 exceed 25 months from the date on which 

23 the qualified casualty loss arises. 

24 ‘‘(ii) QUALIFIED CASUALTY LOSSES.— 

25 In the case of a qualified casualty loss, the 


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1 period described in clause (i) may be ex2 tended, but not in excess of 12 months, if 

3 the applicable housing credit agency deter4 mines the qualified casualty arose by rea5 son of an event which was not discrete to 

6 the building and which made a reconstruc7 tion or replacement within 25 months im8 practical. In the event the applicable hous9 ing credit agency determines a period in 

10 excess of 25 months is necessary for such 

11 reconstruction or replacement, the compli12 ance period shall be increased by any such 

13 additional time. 

14 ‘‘(iii) APPLICATION.—The determina15 tion under paragraph (1) shall not be 

16 made with respect to a property the basis 

17 of which is affected by a qualified casualty 

18 loss until the period described in clause (i) 

19 (as modified by clause (ii), if applicable) 

20 with respect to such property has expired. 

21 ‘‘(iv) QUALIFIED CASUALTY LOSS.— 

22 For purposes of this subparagraph, the 

23 term ‘qualified casualty loss’ means a cas24 ualty loss that is the result of a Federally 


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1 declared disaster (as defined in section 

2 165(i)(5)).’’. 

3 (b) QUALIFIED BASIS FOLLOWING CASUALTY

4 LOSS.—Paragraph (1) of section 42(c) of the Internal 

5 Revenue Code of 1986 is amended by adding at the end 

6 the following new subparagraph: 

7 ‘‘(F) QUALIFIED BASIS FOLLOWING CAS8 UALTY LOSS.—If a casualty causes the qualified 

9 basis of a building in any year to be less than 

10 the qualified basis in the immediately preceding 

11 year then, in the year of such casualty and each 

12 succeeding year until such building or the units 

13 affected by the casualty are reconstructed or re14 placed (but only through the last year of the pe15 riod permitted for reconstruction or replace16 ment under subsection (j)(4)(E))— 

17 ‘‘(i) the qualified basis of such build18 ing shall be equal to the qualified basis of 

19 such building as of the last day of the year 

20 preceding the year in which such casualty 

21 occurred, 

22 ‘‘(ii) if such building is not recon23 structed or replaced by the expiration of 

24 the applicable period for such reconstruc25 tion or replacement under subsection 


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1 (j)(4), then the recapture amount provided 

2 for in subsection (j)(1) shall include the 

3 amount of any credit claimed under this 

4 section by reason of the application of 

5 clause (i), and 

6 ‘‘(iii) a building which was a qualified 

7 low-income building as of the last day of 

8 the year preceding the year in which such 

9 casualty occurred shall not cease to be a 

10 qualified low-income building solely be11 cause of such casualty.’’. 

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

13 this section shall apply to casualties occurring after the 

14 date which is 25 months before the date of the enactment 

15 of this Act. 

16 SEC. 302. MODIFICATION OF PREVIOUS OWNERSHIP RULES; 

17 LIMITATION ON ACQUISITION BASIS. 

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

19 of the Internal Revenue Code of 1986 is amended by in20 serting ‘‘, or the taxpayer elects the application of sub21 paragraph (C)(ii)’’ after ‘‘service’’. 

22 (b) LIMITATION ON ACQUISITION BASIS.—Subpara23 graph (C) of section 42(d)(2) of the Internal Revenue 

24 Code of 1986 is amended— 


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

2 (A), the adjusted basis’’ and inserting ‘‘For pur3 poses of subparagraph (A)— 

4 ‘‘(i) IN GENERAL.—The adjusted 

5 basis’’, and 

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

7 clauses: 

8 ‘‘(ii) BUILDINGS IN SERVICE WITHIN

9 PREVIOUS 10 YEARS.—If the period be10 tween the date of acquisition of the build11 ing by the taxpayer and the date the build12 ing was last placed in service is less than 

13 10 years, the taxpayer’s basis attributable 

14 to the acquisition of the building which is 

15 taken into account in determining the ad16 justed basis shall not exceed the sum of— 

17 ‘‘(I) the lowest amount paid for 

18 acquisition of the building by any per19 son during the 10 years preceding the 

20 date of the acquisition of the building 

21 by the taxpayer, adjusted as provided 

22 in clause (iii), and 

23 ‘‘(II) the value of any capital im24 provements made by the person who 

25 sells the building to the taxpayer 


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1 which are reflected in such seller’s 

2 basis. 

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

4 a basis determination made in any taxable 

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

6 shall be increased by an amount equal to— 

7 ‘‘(I) such amount, multiplied by 

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

9 determined in the same manner as 

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

11 year in which the taxable year begins 

12 by taking into account the acquisition 

13 year in lieu of calendar year 1992. 

14 For purposes of the preceding sentence, 

15 the acquisition year is the calendar year in 

16 which the lowest amount referenced in 

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

18 of the building.’’. 

19 (c) CONFORMING AMENDMENTS.—Clause (i) of sec20 tion 42(d)(2)(D) of the Internal Revenue Code of 1986 

21 is amended— 

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

23 the heading, and 


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

2 matter preceding subclause (I) and inserting ‘‘sub3 paragraph (B)(ii) or (C)(ii)’’. 

4 (d) MODIFICATION OF PLACED IN SERVICE RULE.— 

5 Clause (iii) of section 42(d)(2)(B) of the Internal Revenue 

6 Code of 1986 is amended to read as follows: 

7 ‘‘(iii) the building was not owned by 

8 the taxpayer or by any person related (as 

9 of the date of acquisition by the taxpayer) 

10 to the taxpayer at any time during the 5- 

11 year period ending on the date of acquisi12 tion by the taxpayer, and’’. 

13 (e) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to buildings placed in service after 

15 December 31, 2020. 

16 SEC. 303. CERTAIN RELOCATION COSTS TAKEN INTO AC17 COUNT AS REHABILITATION EXPENDITURES. 

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

19 the Internal Revenue Code of 1986 is amended by adding 

20 at the end the following new subparagraph: 

21 ‘‘(C) CERTAIN RELOCATION COSTS.—In 

22 the case of a rehabilitation of a building to 

23 which section 280B does not apply, costs relat24 ing to the relocation of occupants, including— 

25 ‘‘(i) amounts paid to occupants, 


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

2 services relating to such relocation, and 

3 ‘‘(iii) amounts paid for temporary 

4 housing for occupants, 

5 shall be treated as chargeable to capital account 

6 and taken into account as rehabilitation ex7 penditures.’’. 

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

9 this section shall apply to expenditures paid or incurred 

10 after December 31, 2020. 

11 (c) NO INFERENCE.—Nothing in the amendment 

12 made by this section shall be construed to create any infer13 ence with respect to the treatment of relocation costs paid 

14 or incurred before December 31, 2020. 

15 SEC. 304. REPEAL OF QUALIFIED CENSUS TRACT POPU16 LATION CAP. 

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

18 of the Internal Revenue Code of 1986 is amended— 

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

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

21 ‘‘(I) IN GENERAL.—The term’’, 

22 and inserting ‘‘QUALIFIED CENSUS TRACT.—The 

23 term’’. 

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

25 this section shall apply to designations of qualified census 


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1 tracts under section 42(d)(5)(B)(ii) of the Internal Rev2 enue Code of 1986 after December 31, 2021. 

3 SEC. 305. DETERMINATION OF COMMUNITY REVITALIZA4 TION PLAN TO BE MADE BY HOUSING CREDIT 

5 AGENCY. 

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

7 42(m)(1)(B)(ii) of the Internal Revenue Code of 1986 is 

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

9 credit agency according to criteria established by such 

10 agency,’’ after ‘‘(d)(5)(B)(ii)) and’’. 

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

12 the Internal Revenue Code of 1986 is amended by adding 

13 at the end the following new subparagraph: 

14 ‘‘(E) CRITERIA FOR DETERMINATION RE15 LATING TO CONCERTED COMMUNITY REVITAL16 IZATION PLAN.—For purposes of subparagraph 

17 (B)(ii)(III), the criteria which shall be estab18 lished by a housing credit agency for deter19 mining whether the development of a project 

20 contributes to a concerted community develop21 ment plan shall take into account any factors 

22 the agency deems appropriate, including the ex23 tent to which the proposed plan— 

24 ‘‘(i) is geographically specific, 


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1 ‘‘(ii) outlines a clear plan for imple2 mentation and goals for outcomes, 

3 ‘‘(iii) includes a strategy for applying 

4 for or obtaining commitments of public or 

5 private investment (or both) in nonhousing 

6 infrastructure, amenities, or services, and 

7 ‘‘(iv) demonstrates the need for com8 munity revitalization.’’. 

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

10 this section shall apply to allocations of housing credit dol11 lar amounts made under qualified allocation plans (as de12 fined in section 42(m)(1)(B) of the Internal Revenue Code 

13 of 1986) adopted after December 31, 2021. 

14 SEC. 306. PROHIBITION OF LOCAL APPROVAL AND CON15 TRIBUTION REQUIREMENTS. 

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

17 of the Internal Revenue Code of 1986, as amended by sec18 tion 305, is further amended— 

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

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

21 clauses (ii) and (iii), and 

22 (2) by adding at the end the following new sub23 paragraph: 

24 ‘‘(F) LOCAL APPROVAL OR CONTRIBUTION

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1 teria under a qualified allocation plan shall not 

2 include consideration of— 

3 ‘‘(i) any support or opposition with re4 spect to the project from local or elected 

5 officials, or 

6 ‘‘(ii) any local government contribu7 tion to the project, except to the extent 

8 such contribution is taken into account as 

9 part of a broader consideration of the 

10 project’s ability to leverage outside funding 

11 sources, and is not prioritized over any 

12 other source of outside funding.’’. 

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

14 this section shall apply to allocations of housing credit dol15 lar amounts made under qualified allocation plans (as de16 fined in section 42(m)(1)(B) of the Internal Revenue Code 

17 of 1986) adopted after December 31, 2021. 

18 SEC. 307. INCREASE IN CREDIT FOR CERTAIN PROJECTS 

19 DESIGNATED TO SERVE EXTREMELY LOW-IN20 COME HOUSEHOLDS. 

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

22 the Internal Revenue Code of 1986 is amended by adding 

23 at the end the following new subparagraph: 

24 ‘‘(C) INCREASE IN CREDIT FOR PROJECTS

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1 COME HOUSEHOLDS.—In the case of any build2 ing— 

3 ‘‘(i) 20 percent or more of the resi4 dential units in which are designated by 

5 the taxpayer for occupancy by households 

6 the aggregate household income of which 

7 does not exceed the greater of— 

8 ‘‘(I) 30 percent of area median 

9 gross income, or 

10 ‘‘(II) 100 percent of an amount 

11 equal to the Federal poverty line 

12 (within the meaning of section 

13 36B(d)(3)), and 

14 ‘‘(ii) which is designated by the hous15 ing credit agency as requiring the increase 

16 in credit under this subparagraph in order 

17 for such building to be financially feasible 

18 as part of a qualified low-income housing 

19 project, 

20 subparagraph (B) shall not apply to the portion 

21 of such building which is comprised of such 

22 units, and the eligible basis of such portion of 

23 the building shall be 150 percent of such basis 

24 determined without regard to this subpara25 graph.’’. 


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

2 this section shall apply to buildings which receive alloca3 tions of housing credit dollar amount or, in the case of 

4 projects financed by tax-exempt obligations as described 

5 in section 42(h)(4) of the Internal Revenue Code of 1986, 

6 which are first taken into account under section 146 of 

7 such Code, after the date of the enactment of this Act. 

8 SEC. 308. INCREASE IN CREDIT FOR BOND-FINANCED 

9 PROJECTS DESIGNATED BY STATE AGENCY. 

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

11 of the Internal Revenue Code of 1986 is amended by strik12 ing the second sentence. 

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

14 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

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

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

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

18 and inserting ‘‘housing credit agency’’. 

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

20 this section shall apply to buildings which receive a deter21 mination of housing credit dollar amount after the date 

22 of the enactment of this Act. 


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1 SEC. 309. ELIMINATION OF BASIS REDUCTION FOR LOW-IN2 COME HOUSING PROPERTIES RECEIVING 

3 CERTAIN ENERGY BENEFITS. 

4 (a) NEW ENERGY EFFICIENT HOME CREDIT.—Sub5 section (e) of section 45L of the Internal Revenue Code 

6 of 1986 is amended— 

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

8 and inserting ‘‘ADJUSTMENT.— 

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

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

11 paragraph: 

12 ‘‘(2) EXCEPTION FOR AFFORDABLE HOUSING

13 PROPERTIES.—Paragraph (1) shall not apply for 

14 purposes of determining eligible basis under section 

15 42.’’. 

16 (b) ENERGY EFFICIENT COMMERCIAL BUILDINGS

17 DEDUCTION.—Subsection (e) of section 179D of the In18 ternal Revenue Code of 1986 is amended— 

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

20 and inserting ‘‘REDUCTION.— 

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

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

23 paragraph: 

24 ‘‘(2) EXCEPTION FOR AFFORDABLE HOUSING

25 PROPERTIES.—Paragraph (1) shall not apply for 


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1 purposes of determining eligible basis under section 

2 42.’’. 

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

4 50(c) of the Internal Revenue Code of 1986 is amended— 

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (A), 

7 (2) by striking the period at the end of sub8 paragraph (B) and inserting ‘‘, and’’, and 

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

11 ‘‘(C) paragraph (1) shall not apply for pur12 poses of determining eligible basis under section 

13 42.’’. 

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

15 this section shall apply to buildings which receive alloca16 tions of housing credit dollar amount or, in the case of 

17 projects financed by tax-exempt obligations as described 

18 in section 42(h)(4) of the Internal Revenue Code of 1986, 

19 which are first taken into account under section 146 of 

20 such Code, after the date of the enactment of this Act. 

21 SEC. 310. RESTRICTION OF PLANNED FORECLOSURES. 

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

23 42(h)(6)(E)(i) of the Internal Revenue Code of 1986 is 

24 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 Secretary and 

4 the housing credit agency that the 

5 building has been acquired by fore6 closure (or instrument in lieu of fore7 closure) and that the taxpayer intends 

8 the termination of such period, unless, 

9 before such date, the Secretary or the 

10 housing credit agency determines that 

11 such acquisition is part of an arrange12 ment with the taxpayer a purpose of 

13 which is to terminate such period, 

14 or’’. 

15 (b) CONFORMING AMENDMENT.—The second sen16 tence of clause (i) of section 42(h)(6)(E) of the Internal 

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

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

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

20 this section shall apply to acquisitions by foreclosure (or 

21 instrument in lieu of foreclosure) after December 31, 

22 2020. 


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1 SEC. 311. INCREASE OF POPULATION CAP FOR DIFFICULT 

2 DEVELOPMENT AREAS. 

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

4 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

5 amended by striking ‘‘20 percent’’ and inserting ‘‘30 per6 cent’’. 

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

8 this section shall apply to designations made under section 

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

10 after December 31, 2021. 

11 SEC. 312. INCREASED COST OVERSIGHT AND ACCOUNT12 ABILITY. 

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

14 42(m)(1) of the Internal Revenue Code of 1986 is amend15 ed by striking ‘‘and’’ at the end of clause (ix), by striking 

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

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

18 ‘‘(xi) the reasonableness of the devel19 opment costs of the project.’’. 

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

21 this section shall apply to allocations of credits under sec22 tion 42 of the Internal Revenue Code of 1986 made after 

23 December 31, 2021. 

24 SEC. 313. TAX-EXEMPT BOND FINANCING REQUIREMENT. 

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

26 42(h)(4) of the Internal Revenue Code of 1986 is amended 


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

2 case of buildings financed by an obligation first taken into 

3 account under section 146 in calendar years beginning 

4 after the date of the enactment of the Affordable Housing 

5 Credit Improvement Act of 2021, the preceding sentence 

6 shall be applied by substituting ‘25 percent’ for ‘50 per7 cent’.’’. 

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

9 this section shall apply to buildings placed in service in 

10 taxable years beginning after December 31, 2020. 

11 TITLE IV—REFORMS RELATING 

12 TO NATIVE AMERICAN AS13 SISTANCE 

14 SEC. 401. SELECTION CRITERIA UNDER QUALIFIED ALLO15 CATION PLANS. 

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

17 42(m)(1) of the Internal Revenue Code of 1986, as 

18 amended by section 312, is further amended by striking 

19 ‘‘and’’ at the end of clause (x), by striking the period at 

20 the end of clause (xi) and inserting ‘‘, and’’, and by adding 

21 at the end the following new clause: 

22 ‘‘(xii) the affordable housing needs of 

23 individuals in the State who are— 

24 ‘‘(I) enrolled members of a tribe 

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1 ernment (including any agencies or in2 strumentalities of an Indian tribal 

3 government and any Alaska Native re4 gional or village corporation, as de5 fined in, or established pursuant to, 

6 the Alaska Native Claims Settlement 

7 Act (43 U.S.C. 1601 et seq.), or 

8 ‘‘(II) described in section 801(9) 

9 of the Native American Housing As10 sistance and Self-Determination Act 

11 of 1996 (25 U.S.C. 4221(9)).’’. 

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

13 this section shall apply to allocations of credits under sec14 tion 42 of the Internal Revenue Code of 1986 made after 

15 December 31, 2021. 

16 SEC. 402. INCLUSION OF INDIAN AREAS AS DIFFICULT DE17 VELOPMENT AREAS FOR PURPOSES OF CER18 TAIN BUILDINGS. 

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

20 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

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

22 and any Indian area’’. 

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

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

25 amended by redesignating subclause (II) as subclause 


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

2 subclause: 

3 ‘‘(II) INDIAN AREA.—For pur4 poses of subclause (I), the term ‘In5 dian area’ means any Indian area (as 

6 defined in section 4(11) of the Native 

7 American Housing Assistance and 

8 Self Determination Act of 1996 (25 

9 U.S.C. 4103(11))) and any housing 

10 area (as defined in section 801(5) of 

11 such Act (25 U.S.C. 4221(5))).’’. 

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

13 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

14 amended by subsection (b), is further amended by adding 

15 at the end the following new subclause: 

16 ‘‘(IV) SPECIAL RULE FOR BUILD17 INGS IN INDIAN AREAS.—In the case 

18 of an area which is a difficult develop19 ment area solely because it is an In20 dian area, a building shall not be 

21 treated as located in such area unless 

22 such building is assisted or financed 

23 under the Native American Housing 

24 Assistance and Self Determination 

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


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1 or the project sponsor is an Indian 

2 tribe (as defined in section 

3 45A(c)(6)), a tribally designated hous4 ing entity (as defined in section 4(22) 

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

6 wholly owned or controlled by such an 

7 Indian tribe or tribally designated 

8 housing entity.’’. 

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

10 this section shall apply to buildings placed in service after 

11 December 31, 2021. 

12 TITLE V—REFORMS RELATING 

13 TO RURAL ASSISTANCE 

14 SEC. 501. INCLUSION OF RURAL AREAS AS DIFFICULT DE15 VELOPMENT AREAS. 

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

17 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986, as 

18 amended by section 402, is further amended by inserting 

19 ‘‘, any rural area’’ after ‘‘median gross income’’. 

20 (b) RURAL AREA.—Clause (iii) of section 

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

22 amended by section 402, is further amended by redesig23 nating subclause (III) as subclause (IV) and by inserting 

24 after subclause (II) the following new subclause: 


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1 ‘‘(III) RURAL AREA.—For pur2 poses of subclause (I), the term ‘rural 

3 area’ means any non-metropolitan 

4 area, or any rural area as defined by 

5 section 520 of the Housing Act of 

6 1949, which is identified by the quali7 fied allocation plan under subsection 

8 (m)(1)(B).’’. 

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

10 this section shall apply to buildings placed in service after 

11 December 31, 2021. 

12 SEC. 502. UNIFORM INCOME ELIGIBILITY FOR RURAL 

13 PROJECTS. 

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

15 the Internal Revenue Code of 1986 is amended by striking 

16 the second sentence. 

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

18 this section shall apply to taxable years beginning after 

19 December 31, 2020. 


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1 TITLE VI—EXEMPT FACILITY 

2 BONDS 

3 SEC. 601. REVISION AND CLARIFICATION OF THE TREAT4 MENT OF REFUNDING ISSUES. 

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

6 146(i)(6) of the Internal Revenue Code of 1986 is amend7 ed to read as follows: 

8 ‘‘(A) IN GENERAL.—During the 12-month 

9 period beginning on the date of a repayment of 

10 a loan financed by an issue 95 percent or more 

11 of the net proceeds of which are used to provide 

12 projects described in section 142(d), if such re13 payment is used to provide a new loan for any 

14 project described in section 142(a)(7) or for 

15 any purpose described in subsection (a)(2)(A) 

16 or (b) of section 143, any bond which is issued 

17 to refinance such issue shall be treated as a re18 funding issue. Any issue treated as a refunding 

19 issue by reason of the preceding sentence shall 

20 be so treated only to the extent the principal 

21 amount of such refunding issue does not exceed 

22 the principal amount of the bonds refunded.’’. 

23 (b) REMOVAL OF ONE-REFUNDING LIMIT.—Sub24 paragraph (B) of section 146(i)(6) of the Internal Rev25 enue Code of 1986 is amended— 


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1 (1) by striking ‘‘4 years’’ in clause (i) and in2 serting ‘‘10 years’’, 

3 (2) by striking ‘‘was issued’’ in clause (ii) and 

4 inserting ‘‘is issued’’, 

5 (3) by redesignating clauses (i) (as so amend6 ed), (ii) (as so amended), and (iii) as subclauses (I), 

7 (II), and (III), respectively, and by moving such sub8 clauses 2 ems to the right, 

9 (4) by striking ‘‘LIMITATIONS.—Subparagraph 

10 (A) shall apply to only one refunding of the original 

11 issue and’’ and inserting ‘‘LIMITATIONS.— 

12 ‘‘(i) IN GENERAL.—Subparagraph (A) 

13 shall apply to a bond’’, and 

14 (5) by adding at the end the following new 

15 clause: 

16 ‘‘(ii) SOURCE OF LOAN REPAY17 MENT.—Subparagraph (A) shall not apply 

18 to any repayment of a loan which is— 

19 ‘‘(I) made by a repayment of an20 other loan, or 

21 ‘‘(II) financed by an issue treated 

22 as a refunding issue under subpara23 graph (A).’’. 

24 (c) CONFORMING AMENDMENT.—The heading of 

25 paragraph (6) of section 146(i) of the Internal Revenue 


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1 Code of 1986 is amended by striking ‘‘RESIDENTIAL

2 RENTAL PROJECT BONDS AS REFUNDING BONDS IRRE3 SPECTIVE OF OBLIGOR’’ and inserting ‘‘BONDS AS RE4 FUNDING BONDS’’. 

5 (d) EFFECTIVE DATES.— 

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

7 subsections (a) and (c) shall apply to obligations 

8 issued on or after the date of the enactment of this 

9 Act. 

10 (2) REMOVAL OF ONE-REFUNDING LIMIT.—The 

11 amendments made by subsection (b) shall apply to 

12 repayments of loans received after July 30, 2008. 

13 TITLE VII—AFFORDABLE 

14 HOUSING TAX CREDIT 

15 SEC. 701. AFFORDABLE HOUSING TAX CREDIT. 

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

17 Internal Revenue Code of 1986 is amended by striking 

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

19 (b) CONFORMING AMENDMENTS.— 

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

21 Revenue Code of 1986 is amended by striking ‘‘low22 income’’ and inserting ‘‘affordable’’. 

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

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

25 ‘‘affordable’’. 


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

2 469(i)(3) of such Code is amended by striking 

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

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

5 469(i)(6) of such Code is amended by striking 

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

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

8 Code is amended by striking ‘‘low-income’’ and in9 serting ‘‘affordable’’. 

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

11 Code is amended by striking ‘‘low-income’’ and in12 serting ‘‘affordable’’. 

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

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

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

16 Code of 1986 is amended to read as follows: 

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

Æ 


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