I 

115TH CONGRESS 

1ST SESSION H. R. 1661 

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

housing credit, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 21, 2017 

Mr. TIBERI (for himself, Mr. NEAL, Mr. MEEHAN, Mr. BLUMENAUER, Mr. 

KELLY of Pennsylvania, Ms. SA ́NCHEZ, Mr. PAULSEN, Mr. CROWLEY, 

Mr. REICHERT, Mr. THOMPSON of California, Mr. SMITH of Missouri, 

Mr. DANNY K. DAVIS of Illinois, Mr. CURBELO of Florida, Mr. MEEKS, 

Mr. FASO, Mr. KATKO, Mr. PASCRELL, and Mr. RENACCI) 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 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—REFORMS RELATING TO TENANT ELIGIBILITY 


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Sec. 101. Average income test. 

Sec. 102. Uniform income eligibility for rural projects. 

Sec. 103. Codification of rules relating to increased tenant income. 

Sec. 104. Modification of student occupancy rules. 

Sec. 105. Tenant voucher payments taken into account as rent for certain purposes. 

TITLE II—CREDIT RATE AND OTHER RULES RELATING TO 

CREDIT ELIGIBILITY AND DETERMINATION 

Sec. 201. Minimum credit rate. 

Sec. 202. Reconstruction or replacement period after casualty loss. 

Sec. 203. Modification of rights relating to building purchase. 

Sec. 204. Modification of 10-year rule; limitation on acquisition basis. 

Sec. 205. Certain relocation costs taken into account as rehabilitation expenditures. 

Sec. 206. Repeal of qualified census tract population cap. 

Sec. 207. Determination of community revitalization plan to be made by housing credit agency. 

Sec. 208. Prohibition of local approval and contribution requirements. 

Sec. 209. Increase in credit for certain projects designated to serve extremely 

low-income households. 

Sec. 210. Increase in credit for bond-financed projects designated by State 

agency. 

Sec. 211. Elimination of basis reduction for low-income housing properties receiving energy credit benefits. 

Sec. 212. Restriction of planned foreclosures. 

Sec. 213. Increase of population cap for difficult development areas. 

TITLE III—REFORMS RELATING TO NATIVE AMERICAN 

ASSISTANCE 

Sec. 301. Selection criteria under qualified allocation plans. 

Sec. 302. Inclusion of Indian areas as difficult development areas for purposes 

of certain buildings. 

TITLE IV—AFFORDABLE HOUSING TAX CREDIT 

Sec. 401. Affordable housing tax credit. 

1 TITLE I—REFORMS RELATING 

2 TO TENANT ELIGIBILITY 

3 SEC. 101. AVERAGE INCOME TEST. 

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

5 the Internal Revenue Code of 1986 is amended— 

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

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


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1 (2) by inserting after subparagraph (B) the fol2 lowing new subparagraph: 

3 ‘‘(C) AVERAGE INCOME TEST.— 

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

5 the minimum requirements of this sub6 paragraph if 40 percent or more (25 per7 cent or more in the case of a project de8 scribed in section 142(d)(6)) of the resi9 dential units in such project are both rent10 restricted and occupied by individuals 

11 whose income does not exceed the imputed 

12 income limitation designated by the tax13 payer with respect to the respective unit. 

14 ‘‘(ii) SPECIAL RULES RELATING TO

15 INCOME LIMITATION.—For purposes of 

16 clause (i)— 

17 ‘‘(I) DESIGNATION.—The tax18 payer shall designate the imputed in19 come limitation of each unit taken 

20 into account under such clause. 

21 ‘‘(II) AVERAGE TEST.—The aver22 age of the imputed income limitations 

23 designated under subclause (I) shall 

24 not exceed 60 percent of area median 

25 gross income. 


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1 ‘‘(III) 10-PERCENT INCRE2 MENTS.—The designated imputed in3 come limitation of any unit under sub4 clause (I) shall be 20 percent, 30 per5 cent, 40 percent, 50 percent, 60 per6 cent, 70 percent, or 80 percent of 

7 area median gross income.’’. 

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

9 Subparagraph (D) of section 42(g)(2) of the Internal Rev10 enue Code of 1986 is amended— 

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

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

13 (2) in clause (ii)— 

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

15 case of a project with respect to which the tax16 payer elects the requirements of subparagraph 

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

18 (B) by striking the second sentence, and 

19 (C) by striking ‘‘NEXT AVAILABLE UNIT

20 MUST BE RENTED TO LOW-INCOME TENANT IF

21 INCOME RISES ABOVE 140 PERCENT OF INCOME

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

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

24 40–60 TEST’’, and 


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

2 clauses: 

3 ‘‘(iii) RENTAL OF NEXT AVAILABLE

4 UNIT IN CASE OF AVERAGE INCOME

5 TEST.—In the case of a project with re6 spect to which the taxpayer elects the re7 quirements of subparagraph (C) of para8 graph (1), if the income of the occupants 

9 of the unit increases above 140 percent of 

10 the greater of— 

11 ‘‘(I) 60 percent of area median 

12 gross income, or 

13 ‘‘(II) the imputed income limita14 tion designated with respect to the 

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

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

17 unit if any residential rental unit in the 

18 building (of a size comparable to, or small19 er than, such unit) is occupied by a new 

20 resident whose income exceeds the limita21 tion described in clause (v). 

22 ‘‘(iv) DEEP RENT SKEWED

23 PROJECTS.—In the case of a project de24 scribed in section 142(d)(4)(B), clause (ii) 

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


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1 applied by substituting ‘170 percent’ for 

2 ‘140 percent’, and— 

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

4 substituting ‘any low-income unit in 

5 the building is occupied by a new resi6 dent whose income exceeds 40 percent 

7 of area median gross income’ for ‘any 

8 residential rental unit’ and all that 

9 follows in such clause, and 

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

11 by substituting ‘any low-income unit 

12 in the building is occupied by a new 

13 resident whose income exceeds the 

14 lesser of 40 percent of area median 

15 gross income or the imputed income 

16 limitation designated with respect to 

17 such unit under paragraph 

18 (1)(C)(ii)(I)’ for ‘any residential rent19 al unit’ and all that follows in such 

20 clause. 

21 ‘‘(v) LIMITATION DESCRIBED.—For 

22 purposes of clause (iii), the limitation de23 scribed in this clause with respect to any 

24 unit is— 


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1 ‘‘(I) the imputed income limita2 tion designated with respect to such 

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

4 the case of a unit which was taken 

5 into account as a low-income unit 

6 prior to becoming vacant, and 

7 ‘‘(II) the imputed income limita8 tion which would have to be des9 ignated with respect to such unit 

10 under such paragraph in order for the 

11 project to continue to meet the re12 quirements of paragraph 

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

14 unit.’’. 

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

16 this section shall apply to elections made under section 

17 42(g)(1) of the Internal Revenue Code of 1986 after the 

18 date of the enactment of this Act. 

19 SEC. 102. UNIFORM INCOME ELIGIBILITY FOR RURAL 

20 PROJECTS. 

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

22 the Internal Revenue Code of 1986 is amended by striking 

23 the second sentence. 


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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, 2017. 

4 SEC. 103. CODIFICATION OF RULES RELATING TO IN5 CREASED TENANT INCOME. 

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

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

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

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

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

11 occupants above the income limitation applicable under 

12 paragraph (1)— 

13 ‘‘(I) a low-income unit shall con14 tinue to be treated as a low-income 

15 unit if the income of such occupants 

16 initially was 60 percent or less of area 

17 median gross income and such unit 

18 continues to be rent-restricted, and 

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

20 of initial occupancy by such occu21 pants, any Federal, State, or local 

22 government income restriction ap23 plied, and which subsequently becomes 

24 part of a building with respect to 

25 which rehabilitation expenditures are 


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1 taken into account under subsection 

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

3 unit if the income of such occupants 

4 initially was 60 percent or less of area 

5 median gross income and does not ex6 ceed 120 percent of area median gross 

7 income as of the date of acquisition of 

8 the property by the taxpayer.’’. 

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

10 42(g)(2) of the Internal Revenue Code of 1986, as amend11 ed by this Act, is amended by adding at the end the fol12 lowing new clause: 

13 ‘‘(vi) EXCEPTION TO RULE RELATING

14 TO INCREASED TENANT INCOME.—In the 

15 case of an occupant of a low-income unit 

16 who initially qualified to occupy such unit 

17 by reason of paragraph (1)(C) with an in18 come in excess of 60 percent of area me19 dian gross income but not in excess of 80 

20 percent of area median gross income, 

21 clause (i) shall be applied for substituting 

22 ‘80 percent’ for ‘60 percent’ each place it 

23 appears.’’. 


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

2 this section shall apply to taxable years beginning after 

3 December 31, 2016. 

4 SEC. 104. MODIFICATION OF STUDENT OCCUPANCY RULES. 

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

6 42(i)(3) of the Internal Revenue Code of 1986 is amended 

7 to read as follows: 

8 ‘‘(D) RULES RELATING TO STUDENTS.— 

9 ‘‘(i) IN GENERAL.—A unit occupied 

10 solely by individuals who— 

11 ‘‘(I) have not attained age 24, 

12 and 

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

14 course of study at an institution of 

15 higher education (as defined in section 

16 3304(f)), 

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

18 ‘‘(ii) EXCEPTION FOR CERTAIN FED19 ERAL PROGRAMS.—In the case of a feder20 ally assisted building (as defined in sub21 section (d)(6)(C)(i)), clause (i) shall not 

22 apply to a unit the occupants of which 

23 meet all requirements applicable under the 

24 housing program described in subsection 


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

2 assisted, financed, or operated. 

3 ‘‘(iii) OTHER EXCEPTIONS.—Clause 

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

5 individual who— 

6 ‘‘(I) is married, 

7 ‘‘(II) is a person with disabilities 

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

9 the United States Housing Act of 

10 1937), 

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

12 section 101(2) of title 38, United 

13 States Code), 

14 ‘‘(IV) has one or more qualifying 

15 children (as defined in section 

16 152(c)), or 

17 ‘‘(V) meets the income limitation 

18 applicable under subsection (g)(1) to 

19 the project of which the building is a 

20 part and is, or was immediately prior 

21 to attaining 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) was 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 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2017. 

21 SEC. 105. TENANT VOUCHER PAYMENTS TAKEN INTO AC22 COUNT AS RENT FOR CERTAIN PURPOSES. 

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

24 42(g)(2) of the Internal Revenue Code of 1986 is amended 

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


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

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

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

4 applies, clause (i) shall not apply with respect to any ten5 ant-based assistance (as defined in section 8(f)(7) of the 

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

7 1437f(f)(7))).’’. 

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

9 this section shall apply to rent paid in taxable years begin10 ning after December 31, 2017. 

11 TITLE II—CREDIT RATE AND 

12 OTHER RULES RELATING TO 

13 CREDIT ELIGIBILITY AND DE14 TERMINATION 

15 SEC. 201. MINIMUM CREDIT RATE. 

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

17 Internal Revenue Code of 1986 is amended— 

18 (1) by redesignating paragraph (3) as para19 graph (4), and 

20 (2) by inserting after paragraph (2) the fol21 lowing new paragraph: 

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

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

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


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1 taxpayer after December 31, 2016, the applicable 

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

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

4 this section shall apply to buildings placed in service after 

5 December 31, 2016. 

6 SEC. 202. RECONSTRUCTION OR REPLACEMENT PERIOD 

7 AFTER CASUALTY LOSS. 

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

9 42(j)(4) of the Internal Revenue Code of 1986 is amended 

10 by striking ‘‘a reasonable period established by the Sec11 retary’’ and inserting ‘‘a reasonable period established by 

12 the applicable housing credit agency (not to exceed 25 

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

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

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

16 by a casualty loss until the period described in the pre17 ceding sentence with respect to such property has ex18 pired.’’. 

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

20 this section shall apply to casualty losses arising after the 

21 date of the enactment of this Act. 


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1 SEC. 203. MODIFICATION OF RIGHTS RELATING TO BUILD2 ING PURCHASE. 

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

4 42(i)(7) of the Internal Revenue Code of 1986 is amend5 ed— 

6 (1) by striking ‘‘a right of 1st refusal’’ and in7 serting ‘‘an option’’, and 

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

9 ‘‘the property or a partnership interest relating to 

10 the property’’. 

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

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

13 is amended by adding at the end the following new sen14 tence: ‘‘In the case of a purchase of a partnership interest, 

15 the minimum purchase price is an amount equal to such 

16 interest’s ratable share of the amount determined under 

17 the first sentence of this subparagraph.’’. 

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

19 this section shall apply to agreements entered into or 

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

21 SEC. 204. MODIFICATION OF 10-YEAR RULE; LIMITATION ON 

22 ACQUISITION BASIS. 

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

24 of the Internal Revenue Code of 1986 is amended by in25 serting ‘‘, or the taxpayer elects the application of sub26 paragraph (C)(ii)’’ after ‘‘service’’. 


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1 (b) LIMITATION ON ACQUISITION BASIS.—Subpara2 graph (C) of section 42(d)(2) of the Internal Revenue 

3 Code of 1986 is amended— 

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

5 (A), the adjusted basis’’ and inserting ‘‘For pur6 poses of subparagraph (A)— 

7 ‘‘(i) IN GENERAL.—The adjusted 

8 basis’’, and 

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

10 clauses: 

11 ‘‘(ii) BUILDINGS IN SERVICE WITHIN

12 PREVIOUS 10 YEARS.—If the period be13 tween the date of acquisition of the build14 ing by the taxpayer and the date the build15 ing was last placed in service is less than 

16 10 years, the taxpayer’s basis attributable 

17 to the acquisition of the building which is 

18 taken into account in determining the ad19 justed basis shall not exceed the sum of— 

20 ‘‘(I) the lowest amount paid for 

21 acquisition of the building by any per22 son during the 10 years preceding the 

23 date of the acquisition of the building 

24 by the taxpayer, adjusted as provided 

25 in clause (iii), and 


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1 ‘‘(II) the value of any capital im2 provements made by the person who 

3 sells the building to the taxpayer 

4 which are reflected in such seller’s 

5 basis. 

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

7 a basis determination made in any taxable 

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

9 shall be increased by an amount equal to— 

10 ‘‘(I) such amount, multiplied by 

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

12 determined in the same manner as 

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

14 year in which the taxable year begins 

15 by taking into account the acquisition 

16 year in lieu of calendar year 1992. 

17 For purposes of the preceding sentence, 

18 the acquisition year is the calendar year in 

19 which the lowest amount referenced in 

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

21 of the building.’’. 

22 (c) CONFORMING AMENDMENTS.—Clause (i) of sec23 tion 42(d)(2)(D) of the Internal Revenue Code of 1986 

24 is amended— 


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

2 the heading, and 

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

4 matter preceding subclause (I) and inserting ‘‘sub5 paragraph (B)(ii) or (C)(ii)’’. 

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

7 this section shall apply to buildings placed in service after 

8 December 31, 2016. 

9 SEC. 205. CERTAIN RELOCATION COSTS TAKEN INTO AC10 COUNT AS REHABILITATION EXPENDITURES. 

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

12 the Internal Revenue Code of 1986 is amended by adding 

13 at the end the following new subparagraph: 

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

15 the case of a rehabilitation of a building to 

16 which section 280B does not apply, costs relat17 ing to the relocation of occupants, including— 

18 ‘‘(i) amounts paid to occupants, 

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

20 services relating to such relocation, and 

21 ‘‘(iii) amounts paid for temporary 

22 housing for occupants, 

23 shall be treated as chargeable to capital account 

24 and taken into account as rehabilitation ex25 penditures.’’. 


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

2 this section shall apply to expenditures paid or incurred 

3 after December 31, 2016. 

4 SEC. 206. REPEAL OF QUALIFIED CENSUS TRACT POPU5 LATION CAP. 

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

7 of the Internal Revenue Code of 1986 is amended— 

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

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

10 ‘‘(I) IN GENERAL.—The term’’, 

11 and inserting ‘‘QUALIFIED CENSUS TRACT.—The 

12 term’’. 

13 (b) TECHNICAL CORRECTIONS.—Sections 

14 42(d)(4)(C)(i) and 42(m)(1)(B)(ii)(III) of the Internal 

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

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

17 in paragraph (5)(B)(ii)’’. 

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

19 subsection (a) shall apply to designations of qualified cen20 sus tracts under section 42(d)(5)(B)(ii) of the Internal 

21 Revenue Code of 1986 after December 31, 2017. 


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1 SEC. 207. DETERMINATION OF COMMUNITY REVITALIZA2 TION PLAN TO BE MADE BY HOUSING CREDIT 

3 AGENCY. 

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

5 42(m)(1)(B)(ii) of the Internal Revenue Code of 1986 is 

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

7 credit agency according to criteria established by such 

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

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

10 the Internal Revenue Code of 1986 is amended by adding 

11 at the end the following new subparagraph: 

12 ‘‘(E) CRITERIA FOR DETERMINATION RE13 LATING TO CONCERTED COMMUNITY REVITAL14 IZATION PLAN.—For purposes of subparagraph 

15 (B)(ii)(III), the criteria which shall be estab16 lished by a housing credit agency for deter17 mining whether the development of a project 

18 contributes to a concerted community develop19 ment plan shall take into account any factors 

20 the agency deems appropriate, including the ex21 tent to which the proposed plan— 

22 ‘‘(i) is geographically specific, 

23 ‘‘(ii) outlines a clear plan for imple24 mentation and goals for outcomes, 

25 ‘‘(iii) includes a strategy for applying 

26 for or obtaining commitments of public or 


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1 private investment (or both) in nonhousing 

2 infrastructure, amenities, or services, and 

3 ‘‘(iv) demonstrates the need for com4 munity revitalization.’’. 

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

6 this section shall apply to allocations of housing credit dol7 lar amounts made under qualified allocation plans (as de8 fined in section 42(m)(1)(B) of the Internal Revenue Code 

9 of 1986) adopted after December 31, 2017. 

10 SEC. 208. PROHIBITION OF LOCAL APPROVAL AND CON11 TRIBUTION REQUIREMENTS. 

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

13 of the Internal Revenue Code of 1986, as amended by sec14 tion 207, is further amended— 

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

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

17 clauses (ii) and (iii), and 

18 (2) by adding at the end the following new sub19 paragraph: 

20 ‘‘(F) LOCAL APPROVAL OR CONTRIBUTION

21 NOT TAKEN INTO ACCOUNT.—The selection cri22 teria under a qualified allocation plan shall not 

23 include consideration of— 


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1 ‘‘(i) any support or opposition with re2 spect to the project from local or elected 

3 officials, or 

4 ‘‘(ii) any local government contribu5 tion to the project, except to the extent 

6 such contribution is taken into account as 

7 part of a broader consideration of the 

8 project’s ability to leverage outside funding 

9 sources, and is not prioritized over any 

10 other source of outside funding.’’. 

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

12 this section shall apply to allocations of housing credit dol13 lar amounts made after December 31, 2017. 

14 SEC. 209. INCREASE IN CREDIT FOR CERTAIN PROJECTS 

15 DESIGNATED TO SERVE EXTREMELY LOW-IN16 COME HOUSEHOLDS. 

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

18 the Internal Revenue Code of 1986 is amended by adding 

19 at the end the following new subparagraph: 

20 ‘‘(C) INCREASE IN CREDIT FOR PROJECTS

21 DESIGNATED TO SERVE EXTREMELY LOW-IN22 COME HOUSEHOLDS.—In the case of any build23 ing— 

24 ‘‘(i) 20 percent or more of the resi25 dential units in which are designated by 


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1 the taxpayer for occupancy by households 

2 the aggregate household income of which 

3 does not exceed the greater of— 

4 ‘‘(I) 30 percent of area median 

5 gross income, or 

6 ‘‘(II) 100 percent of an amount 

7 equal to the Federal poverty line 

8 (within the meaning of section 

9 36B(d)(3)), and 

10 ‘‘(ii) which is designated by the hous11 ing credit agency as requiring the increase 

12 in credit under this subparagraph in order 

13 for such building to be financially feasible 

14 as part of a qualified low-income housing 

15 project, 

16 subparagraph (B) shall not apply to the portion 

17 of such building which is comprised of such 

18 units, and the eligible basis of such portion of 

19 the building shall be 150 percent of such basis 

20 determined without regard to this subpara21 graph.’’. 

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

23 this section shall apply to buildings placed in service after 

24 December 31, 2016. 


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1 SEC. 210. INCREASE IN CREDIT FOR BOND-FINANCED 

2 PROJECTS DESIGNATED BY STATE AGENCY. 

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

4 of the Internal Revenue Code of 1986 is amended by strik5 ing the second sentence. 

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

7 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

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

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

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

11 and inserting ‘‘housing credit agency’’. 

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

13 this section shall apply to buildings placed in service after 

14 December 31, 2016. 

15 SEC. 211. ELIMINATION OF BASIS REDUCTION FOR LOW-IN16 COME HOUSING PROPERTIES RECEIVING EN17 ERGY CREDIT BENEFITS. 

18 (a) IN GENERAL.—Paragraph (3) of section 50(c) of 

19 the Internal Revenue Code of 1986 is amended— 

20 (1) by striking ‘‘and’’ at the end of subpara21 graph (A), 

22 (2) by striking the period at the end of sub23 paragraph (B) and inserting ‘‘, and’’, and 

24 (3) by adding at the end the following new sub25 paragraph: 


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

2 property with respect to which a credit is al3 lowed under section 42.’’. 

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

5 this section shall apply to property placed in service after 

6 December 31, 2016. 

7 SEC. 212. RESTRICTION OF PLANNED FORECLOSURES. 

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

9 42(h)(6)(E)(i) of the Internal Revenue Code of 1986 is 

10 amended to read as follows: 

11 ‘‘(I) on the 61st day after the 

12 taxpayer (or a successor in interest) 

13 provides notice to the housing credit 

14 agency that the building has been ac15 quired by foreclosure (or instrument 

16 in lieu of foreclosure) and that the 

17 taxpayer intends the termination of 

18 such period, unless the housing credit 

19 agency determines that such acquisi20 tion is part of an arrangement with 

21 the taxpayer a purpose of which is to 

22 terminate such period, or’’. 

23 (b) CONFORMING AMENDMENT.—The second sen24 tence of clause (i) of section 42(h)(6)(E) of the Internal 


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

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

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

4 this section shall apply to acquisitions by foreclosure (or 

5 instrument in lieu of foreclosure) after December 31, 

6 2017. 

7 SEC. 213. INCREASE OF POPULATION CAP FOR DIFFICULT 

8 DEVELOPMENT AREAS. 

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

10 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

11 amended by striking ‘‘20 percent’’ and inserting ‘‘30 per12 cent’’. 

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

14 this section shall apply to designations made under section 

15 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 

16 after December 31, 2017. 

17 TITLE III—REFORMS RELATING 

18 TO NATIVE AMERICAN AS19 SISTANCE 

20 SEC. 301. SELECTION CRITERIA UNDER QUALIFIED ALLO21 CATION PLANS. 

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

23 42(m)(1) of the Internal Revenue Code of 1986 is amend24 ed by striking ‘‘and’’ at the end of clause (ix), by striking 


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

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

3 ‘‘(xi) the affordable housing needs of 

4 individuals in the State who are members 

5 of Indian tribes (as defined in section 

6 45A(c)(6)).’’. 

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

8 this section shall apply to allocations of credits under sec9 tion 42 of the Internal Revenue Code of 1986 made after 

10 December 31, 2017. 

11 SEC. 302. INCLUSION OF INDIAN AREAS AS DIFFICULT DE12 VELOPMENT AREAS FOR PURPOSES OF CER13 TAIN BUILDINGS. 

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

15 42(d)(5)(B)(iii) of the Internal Revenue Code of 1986 is 

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

17 and any Indian area’’. 

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

19 42(d)(5)(B) of the Internal Revenue Code of 1986 is 

20 amended by redesignating subclause (II) as subclause 

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

22 subclause: 

23 ‘‘(II) INDIAN AREA.—For pur24 poses of subclause (I), the term ‘In25 dian area’ means any Indian area (as 


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1 defined in section 4(11) of the Native 

2 American Housing Assistance and 

3 Self Determination Act of 1996 (25 

4 U.S.C. 4103(11)).’’. 

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

6 42(d)(5)(B) of the Internal Revenue Code of 1986, as 

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

8 end the following new subclause: 

9 ‘‘(IV) SPECIAL RULE FOR BUILD10 INGS IN INDIAN AREAS.—In the case 

11 of an area which is a difficult develop12 ment area solely because it is an In13 dian area, a building shall not be 

14 treated as located in such area unless 

15 such building is assisted or financed 

16 under the Native American Housing 

17 Assistance and Self Determination 

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

19 or the project sponsor is an Indian 

20 tribe (as defined in section 

21 45A(c)(6)), a tribally designated hous22 ing entity (as defined in section 4(22) 

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

24 wholly owned or controlled by such an 


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1 Indian tribe or tribally designated 

2 housing entity.’’. 

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

4 this section shall apply to buildings placed in service after 

5 December 31, 2017. 

6 TITLE IV—AFFORDABLE 

7 HOUSING TAX CREDIT 

8 SEC. 401. AFFORDABLE HOUSING TAX CREDIT. 

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

10 Internal Revenue Code of 1986 is amended by striking 

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

12 (b) CONFORMING AMENDMENTS.— 

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

14 Revenue Code of 1986 is amended by striking ‘‘low15 income’’ and inserting ‘‘affordable’’. 

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

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

18 ‘‘affordable’’. 

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

20 469(i)(3) of such Code is amended by striking 

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

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

23 469(i)(6) of such Code is amended by striking 

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


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

2 Code is amended by striking ‘‘low-income’’ and in3 serting ‘‘affordable’’. 

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

5 Code is amended by striking ‘‘low-income’’ and in6 serting ‘‘affordable’’. 

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

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

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

10 Code of 1986 is amended to read as follows: 

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

Æ 


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