II 

117TH CONGRESS 

1ST SESSION S. 2554 

To amend the Internal Revenue Code of 1986 to provide a refundable tax 

credit to taxpayers who provide reductions in rent to their tenants 

under State rental reduction programs, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2021 

Mr. BROWN (for himself and Mr. WYDEN) 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 

a refundable tax credit to taxpayers who provide reductions in rent to their tenants under State rental reduction programs, 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. 

4 This Act may be cited as the ‘‘Renters Tax Credit 

5 Act of 2021’’. 

6 SEC. 2. RENTERS CREDIT. 

7 (a) IN GENERAL.—Subpart C of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986 is amended by inserting after section 36B the fol2 lowing new section: 

3 ‘‘SEC. 36C. RENTERS CREDIT. 

4 ‘‘(a) DETERMINATION OF CREDIT AMOUNT.— 

5 ‘‘(1) IN GENERAL.—There shall be allowed as a 

6 credit against the tax imposed by this subtitle for 

7 any taxable year an amount equal to the sum of the 

8 amounts determined under paragraph (2) for all 

9 qualified buildings with a credit period which in10 cludes months occurring during the taxable year. 

11 ‘‘(2) QUALIFIED BUILDING AMOUNT.—The 

12 amount determined under this paragraph with re13 spect to any qualified building for any taxable year 

14 shall be an amount equal to the lesser of— 

15 ‘‘(A) the aggregate qualified rental reduc16 tion amounts for all eligible units within such 

17 building for months occurring during the tax18 able year which are within the credit period for 

19 such building, or 

20 ‘‘(B) the rental reduction credit amount al21 located to such building for such months. 

22 ‘‘(3) QUALIFIED BUILDING.—For purposes of 

23 this section— 

24 ‘‘(A) IN GENERAL.—The term ‘qualified 

25 building’ means any building which is residenVerDate Sep 11 2014 01:46 Aug 03, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2554.IS S2554

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1 tial rental property (as defined in section 

2 168(e)(2)(A)) of the taxpayer with respect to 

3 which— 

4 ‘‘(i) a rental reduction credit amount 

5 has been allocated by a rental reduction 

6 credit agency of a State, and 

7 ‘‘(ii) a qualified rental reduction 

8 agreement is in effect. 

9 ‘‘(B) BUILDING NOT DISQUALIFIED BY

10 OTHER ASSISTANCE.—A building shall not fail 

11 to be treated as a qualified building merely be12 cause— 

13 ‘‘(i) a credit was allowed under section 

14 42 with respect to such building or there 

15 was any other Federal assistance in the 

16 construction or rehabilitation of such 

17 building, 

18 ‘‘(ii) the rehabilitation credit deter19 mined under section 47 was allowed under 

20 section 38 with respect to such building, or 

21 ‘‘(iii) Federal rental assistance was 

22 provided for such building during any pe23 riod preceding the credit period. 

24 ‘‘(b) QUALIFIED RENTAL REDUCTION AMOUNT.— 

25 For purposes of this section— 


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1 ‘‘(1) IN GENERAL.—The term ‘qualified rental 

2 reduction amount’ means, with respect to any eligi3 ble unit for any month, an amount equal to the ap4 plicable percentage (as determined under subsection 

5 (e)(1)) of the excess of— 

6 ‘‘(A) the applicable rent for such unit, over 

7 ‘‘(B) the family rental payment required 

8 for such unit. 

9 ‘‘(2) APPLICABLE RENT.— 

10 ‘‘(A) IN GENERAL.—The term ‘applicable 

11 rent’ means, with respect to any eligible unit 

12 for any month, the lesser of— 

13 ‘‘(i) the amount of rent which would 

14 be charged for a substantially similar unit 

15 with the same number of bedrooms in the 

16 same building which is not an eligible unit, 

17 or 

18 ‘‘(ii) an amount equal to the market 

19 rent standard for such unit. 

20 ‘‘(B) MARKET RENT STANDARD.— 

21 ‘‘(i) IN GENERAL.—The market rent 

22 standard with respect to any eligible unit 

23 is— 

24 ‘‘(I) the small area fair market 

25 rent determined by the Secretary of 


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1 Housing and Urban Development for 

2 units with the same number of bed3 rooms in the same zip code tabulation 

4 area, or 

5 ‘‘(II) if there is no rent described 

6 in subclause (I) for such area, the fair 

7 market rent determined by such Sec8 retary for units with the same number 

9 of bedrooms in the same county. 

10 ‘‘(ii) STATE OPTION.—A State may in 

11 its rental reduction allocation plan provide 

12 that the market rent standard for all (or 

13 any part) of a zip code tabulation area or 

14 county within the State shall be equal to a 

15 percentage (not less than 75 nor more 

16 than 125) of the amount determined under 

17 clause (i) (after application of clause (iii)) 

18 for such area or county. 

19 ‘‘(iii) MINIMUM AMOUNT.—Notwith20 standing clause (i), the market rent stand21 ard with respect to any eligible unit for 

22 any year in the credit period after the first 

23 year in the credit period for such unit shall 

24 not be less than the market rent standard 

25 determined for such first year. 


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1 ‘‘(3) FAMILY RENTAL PAYMENT REQUIRE2 MENTS.— 

3 ‘‘(A) IN GENERAL.—Each qualified rental 

4 reduction agreement with respect to any quali5 fied building shall require that the family rental 

6 payment for an eligible unit within such build7 ing for any month shall be equal to the lesser 

8 of— 

9 ‘‘(i) 30 percent of the monthly family 

10 income of the residents of the unit (as de11 termined under subsection (e)(5)), or 

12 ‘‘(ii) the applicable rent for such unit. 

13 ‘‘(B) UTILITY COSTS.—Any utility allow14 ance (determined by the Secretary in the same 

15 manner as under section 42(g)(2)(B)(ii)) paid 

16 by residents of an eligible unit shall be taken 

17 into account as rent in determining the family 

18 rental payment for such unit for purposes of 

19 this paragraph. 

20 ‘‘(c) RENTAL REDUCTION CREDIT AMOUNT.—For 

21 purposes of this section— 

22 ‘‘(1) DETERMINATION OF AMOUNT.— 

23 ‘‘(A) IN GENERAL.—The term ‘rental re24 duction credit amount’ means, with respect to 

25 any qualified building, the dollar amount which 


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1 is allocated to such building (and to eligible 

2 units within such building) under this sub3 section. Such dollar amount shall be allocated 

4 to months in the credit period with respect to 

5 such building (and such units) on the basis of 

6 the estimates described in paragraph (2)(B). 

7 ‘‘(B) ALLOCATION ON PROJECT BASIS.—In 

8 the case of a project which includes (or will in9 clude) more than 1 building, the rental reduc10 tion credit amount shall be the dollar amount 

11 which is allocated to such project for all build12 ings included in such project. Subject to the 

13 limitation under subsection (e)(3)(B), such 

14 amount shall be allocated among such buildings 

15 in the manner specified by the taxpayer unless 

16 the qualified rental reduction agreement with 

17 respect to such project provides for such alloca18 tion. 

19 ‘‘(2) STATE ALLOCATION.— 

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph (C), each rental reduction credit 

22 agency of a State shall each calendar year allo23 cate its portion of the State rental reduction 

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1 ance with the State rental reduction allocation 

2 plan. 

3 ‘‘(B) ALLOCATIONS TO EACH BUILDING.— 

4 The rental reduction credit amount allocated to 

5 any qualified building shall not exceed the ag6 gregate qualified rental reduction amounts 

7 which such agency estimates will occur over the 

8 credit period for eligible units within such 

9 building, based on reasonable estimates of 

10 rents, family incomes, and vacancies in accord11 ance with procedures established by the State 

12 as part of its State rental reduction allocation 

13 plan. 

14 ‘‘(C) SPECIFIC ALLOCATIONS.— 

15 ‘‘(i) NONPROFIT ORGANIZATIONS.—At 

16 least 25 percent of the State rental reduc17 tion credit ceiling for any State for any 

18 calendar year shall be allocated to qualified 

19 buildings in which a qualified nonprofit or20 ganization (as defined in section 

21 42(h)(5)(C)) owns (directly or through a 

22 partnership) an interest and materially 

23 participates (within the meaning of section 

24 469(h)) in the operation of the building 

25 throughout the credit period. A State may 


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1 waive or lower the requirement under this 

2 clause for any calendar year if it deter3 mines that meeting such requirement is 

4 not feasible. 

5 ‘‘(ii) RURAL AREAS.— 

6 ‘‘(I) IN GENERAL.—The State 

7 rental reduction credit ceiling for any 

8 State for any calendar year shall be 

9 allocated to buildings in rural areas 

10 (as defined in section 520 of the 

11 Housing Act of 1949) in an amount 

12 which, as determined by the Secretary 

13 of Housing and Urban Development, 

14 bears the same ratio to such ceiling as 

15 the number of extremely low-income 

16 households with severe rent burdens 

17 in such rural areas bears to the total 

18 number of such households in the 

19 State. 

20 ‘‘(II) ALTERNATIVE 5-YEAR

21 TESTING PERIOD.—In the case of the 

22 5-calendar year period beginning in 

23 2021, a State shall not be treated as 

24 failing to meet the requirements of 

25 subclause (I) for any calendar year in 


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1 such period if, as determined by the 

2 Secretary, the average annual amount 

3 allocated to such rural areas during 

4 such period meets such requirements. 

5 ‘‘(3) APPLICATION OF ALLOCATED CREDIT

6 AMOUNT.— 

7 ‘‘(A) AMOUNT AVAILABLE TO TAXPAYER

8 FOR ALL MONTHS IN CREDIT PERIOD.—Any 

9 rental reduction credit amount allocated to any 

10 qualified building out of the State rental reduc11 tion credit ceiling for any calendar year shall 

12 apply to such building for all months in the 

13 credit period ending during or after such cal14 endar year. 

15 ‘‘(B) CEILING FOR ALLOCATION YEAR RE16 DUCED BY ENTIRE CREDIT AMOUNT.—Any 

17 rental reduction credit amount allocated to any 

18 qualified building out of an allocating agency’s 

19 State rental reduction credit ceiling for any cal20 endar year shall reduce such ceiling for such 

21 calendar year by the entire amount so allocated 

22 for all months in the credit period (as deter23 mined on the basis of the estimates under para24 graph (2)(B)) and no reduction shall be made 

25 in such agency’s State rental reduction credit 


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1 ceiling for any subsequent calendar year by rea2 son of such allocation. 

3 ‘‘(4) STATE RENTAL REDUCTION CREDIT CEIL4 ING.— 

5 ‘‘(A) IN GENERAL.—The State rental re6 duction credit ceiling applicable to any State for 

7 any calendar year shall be an amount equal to 

8 the sum of— 

9 ‘‘(i) the greater of— 

10 ‘‘(I) the per capita dollar amount 

11 multiplied by the State population, or 

12 ‘‘(II) the minimum ceiling 

13 amount, plus 

14 ‘‘(ii) the amount of the State rental 

15 reduction credit ceiling returned in the cal16 endar year. 

17 ‘‘(B) RETURN OF STATE CEILING

18 AMOUNTS.—For purposes of subparagraph 

19 (A)(ii), except as provided in subsection (d)(2), 

20 the amount of the State rental reduction credit 

21 ceiling returned in a calendar year equals the 

22 amount of the rental reduction credit amount 

23 allocated to any building which, after the close 

24 of the calendar year for which the allocation is 

25 made— 


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1 ‘‘(i) is canceled by mutual consent of 

2 the rental reduction credit agency and the 

3 taxpayer because the estimates made under 

4 paragraph (2)(B) were substantially incor5 rect, or 

6 ‘‘(ii) is canceled by the rental reduc7 tion credit agency because the taxpayer 

8 violates the qualified rental reduction 

9 agreement and, under the terms of the 

10 agreement, the rental reduction credit 

11 agency is authorized to cancel all (or any 

12 portion) of the allocation by reason of the 

13 violation. 

14 ‘‘(C) PER CAPITA DOLLAR AMOUNT; MIN15 IMUM CEILING AMOUNT.—For purposes of this 

16 paragraph— 

17 ‘‘(i) PER CAPITA DOLLAR AMOUNT.— 

18 The per capita dollar amount is— 

19 ‘‘(I) for calendar year 2021, 

20 $12.30, 

21 ‘‘(II) for calendar year 2022, 

22 $24.50, and 

23 ‘‘(III) for calendar years 2023 

24 and thereafter, $36.75. 


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1 ‘‘(ii) MINIMUM CEILING AMOUNT.— 

2 The minimum ceiling amount is— 

3 ‘‘(I) for calendar year 2021, 

4 $14,000,000, 

5 ‘‘(II) for calendar year 2022, 

6 $28,000,000, and 

7 ‘‘(III) for calendar years 2023 

8 and thereafter, $42,000,000. 

9 ‘‘(iii) COST-OF-LIVING ADJUST10 MENT.—In the case of a calendar year be11 ginning after 2023, the $36.75 and 

12 $42,000,000 amounts in clauses (i)(III) 

13 and (ii)(III) shall each be increased by an 

14 amount equal to— 

15 ‘‘(I) such dollar amount, multi16 plied by 

17 ‘‘(II) the cost-of-living adjust18 ment determined under section 1(f)(3) 

19 for such calendar year by substituting 

20 ‘calendar year 2022’ for ‘calendar 

21 year 2016’ in subparagraph (A)(ii) 

22 thereof. 

23 In the case of the $42,000,000 amount, 

24 any increase under this clause which is not 

25 a multiple of $5,000 shall be rounded to 


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1 the next lowest multiple of $5,000 and in 

2 the case of the $36.75 amount, any in3 crease under this clause which is not a 

4 multiple of 5 cents shall be rounded to the 

5 next lowest multiple of 5 cents. 

6 ‘‘(D) POPULATION.—For purposes of this 

7 paragraph, population shall be determined in 

8 accordance with section 146(j). 

9 ‘‘(E) UNUSED RENTAL REDUCTION CREDIT

10 ALLOCATED AMONG CERTAIN STATES.— 

11 ‘‘(i) IN GENERAL.—The unused rental 

12 reduction credit of a State for any cal13 endar year shall be assigned to the Sec14 retary for allocation among qualified 

15 States for the succeeding calendar year. 

16 ‘‘(ii) UNUSED RENTAL REDUCTION

17 CREDIT.—For purposes of this subpara18 graph, the unused rental reduction credit 

19 of a State for any calendar year is the ex20 cess (if any) of— 

21 ‘‘(I) the State rental reduction 

22 credit ceiling for the year preceding 

23 such year, over 


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1 ‘‘(II) the aggregate rental reduc2 tion credit amounts allocated for such 

3 year. 

4 ‘‘(iii) FORMULA FOR ALLOCATION OF

5 UNUSED CREDIT AMONG QUALIFIED

6 STATES.—The amount allocated under this 

7 subparagraph to a qualified State for any 

8 calendar year shall be the amount deter9 mined by the Secretary to bear the same 

10 ratio to the aggregate unused rental reduc11 tion credits of all States for the preceding 

12 calendar year as such State’s population 

13 for the calendar year bears to the popu14 lation of all qualified States for the cal15 endar year. For purposes of the preceding 

16 sentence, population shall be determined in 

17 accordance with section 146(j). 

18 ‘‘(iv) QUALIFIED STATE.—For pur19 poses of this subparagraph, the term 

20 ‘qualified State’ means, with respect to a 

21 calendar year, any State— 

22 ‘‘(I) which allocated its entire 

23 State rental reduction credit ceiling 

24 for the preceding calendar year, and 


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1 ‘‘(II) for which a request is made 

2 (at such time and in such manner as 

3 the Secretary may prescribe) to re4 ceive an allocation under clause (iii). 

5 ‘‘(5) OTHER DEFINITIONS.—For purposes of 

6 this section— 

7 ‘‘(A) RENTAL REDUCTION CREDIT AGEN8 CY.—The term ‘rental reduction credit agency’ 

9 means any agency authorized by a State to 

10 carry out this section. Such authorization shall 

11 include the jurisdictions within the State where 

12 the agency may allocate rental reduction credit 

13 amounts. 

14 ‘‘(B) POSSESSIONS TREATED AS STATES.— 

15 The term ‘State’ includes a possession of the 

16 United States. 

17 ‘‘(C) FAMILY.—The term ‘family’ has the 

18 same meaning as when used in the United 

19 States Housing Act of 1937. 

20 ‘‘(d) MODIFICATIONS TO CORRECT INACCURATE

21 AMOUNTS DUE TO INCORRECT ESTIMATES.— 

22 ‘‘(1) ESTABLISHMENT OF RESERVES.— 

23 ‘‘(A) IN GENERAL.—Each rental reduction 

24 credit agency of a State shall establish a reserve 

25 for the transfer and reallocation of amounts 


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1 pursuant to this paragraph, and notwith2 standing any other provision of this section, the 

3 rental reduction credit amount allocated to any 

4 building by such agency shall be zero unless 

5 such agency has in effect such a reserve at the 

6 time of the allocation of such credit amount. 

7 ‘‘(B) TRANSFERS TO RESERVE.— 

8 ‘‘(i) IN GENERAL.—If, for any taxable 

9 year, a taxpayer would (but for this sub10 paragraph) not be able to use the entire 

11 rental reduction credit amount allocated to 

12 a qualified building by a rental reduction 

13 credit agency of a State for the taxable 

14 year because of a rental reduction short15 fall, then the taxpayer shall for the taxable 

16 year transfer to the reserve established by 

17 such agency under subparagraph (A) an 

18 amount equal to such rental reduction 

19 shortfall. 

20 ‘‘(ii) RENTAL REDUCTION SHORT21 FALL.—For purposes of this subpara22 graph, the rental reduction shortfall for 

23 any qualified building for any taxable year 

24 is the amount by which the aggregate 

25 amount of the excesses determined under 


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1 subsection (b)(1) for all eligible units with2 in such building are less than such aggre3 gate amount estimated under subsection 

4 (c)(2)(B) for the taxable year. 

5 ‘‘(iii) TREATMENT OF TRANSFERRED

6 AMOUNT.—For purposes of subsection 

7 (a)(2)(A), the aggregate qualified rental 

8 reduction amounts for all eligible units 

9 within a qualified building with respect to 

10 which clause (i) applies for any taxable 

11 year shall be increased by an amount equal 

12 to the applicable percentage (determined 

13 under subsection (e)(1) for the building) of 

14 the amount of the transfer to the reserve 

15 under clause (i) with respect to such build16 ing for such taxable year. 

17 ‘‘(C) REALLOCATION OF AMOUNTS TRANS18 FERRED.— 

19 ‘‘(i) IN GENERAL.—If, for any taxable 

20 year— 

21 ‘‘(I) the aggregate qualified rent22 al reduction amounts for all eligible 

23 units within a qualified building for 

24 the taxable year exceed 


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1 ‘‘(II) the rental reduction credit 

2 amount allocated to such building by 

3 a rental reduction credit agency of a 

4 State for the taxable year (determined 

5 after any increase under paragraph 

6 (2)), 

7 the rental reduction credit agency shall, 

8 upon application of the taxpayer, pay to 

9 the taxpayer from the reserve established 

10 by such agency under subparagraph (A) 

11 the amount which, when multiplied by the 

12 applicable percentage (determined under 

13 subsection (e)(1) for the building), equals 

14 such excess. If the amount in the reserve 

15 is less than the amounts requested by all 

16 taxpayers for taxable years ending within 

17 the same calendar year, the agency shall 

18 ratably reduce the amount of each pay19 ment otherwise required to be made. 

20 ‘‘(ii) EXCESS RESERVE AMOUNTS.—If 

21 a rental reduction credit agency of a State 

22 determines that the balance in its reserve 

23 is in excess of the amounts reasonably 

24 needed over the following 5 calendar years 

25 to make payments under clause (i), the 


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1 agency may withdraw such excess but only 

2 to— 

3 ‘‘(I) reduce the rental payments 

4 of eligible tenants in a qualified build5 ing in units other than eligible units, 

6 or of eligible tenants in units in a 

7 building other than a qualified build8 ing, to amounts no higher than the 

9 sum of rental payments required for 

10 eligible tenants in qualified buildings 

11 under subsection (b)(3) and any rent12 al charges to such tenants in excess of 

13 the market rent standard; or 

14 ‘‘(II) address maintenance and 

15 repair needs in qualified buildings 

16 that cannot reasonably be met using 

17 other resources available to the own18 ers of such buildings. 

19 ‘‘(D) ADMINISTRATION.—Each rental re20 duction credit agency of a State shall establish 

21 procedures for the timing and manner of trans22 fers and payments made under this paragraph. 

23 ‘‘(E) SPECIAL RULE FOR PROJECTS.—In 

24 the case of a rental reduction credit allocated to 

25 a project consisting of more than 1 qualified 


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1 building, a taxpayer may elect to have this 

2 paragraph apply as if all such buildings were 1 

3 qualified building if the applicable percentage 

4 for each such building is the same. 

5 ‘‘(F) ALTERNATIVE METHODS OF TRANS6 FER AND REALLOCATION.—Upon request to, 

7 and approval by, the Secretary, a State may es8 tablish an alternative method for the transfer 

9 and reallocation of amounts otherwise required 

10 to be transferred to, and allocated from, a re11 serve under this paragraph. Any State adopting 

12 an alternative method under this subparagraph 

13 shall, at such time and in such manner as the 

14 Secretary prescribes, provide to the Secretary 

15 and the Secretary of Housing and Urban Devel16 opment detailed reports on the operation of 

17 such method, including providing such informa18 tion as such Secretaries may require. 

19 ‘‘(2) ALLOCATION OF RETURNED STATE CEIL20 ING AMOUNTS.—In the case of any rental reduction 

21 credit amount allocated to a qualified building which 

22 is canceled as provided in subsection (c)(4)(B)(i), 

23 the rental reduction credit agency may, in lieu of 

24 treating such allocation as a returned credit amount 

25 under subsection (c)(4)(A)(ii), elect to allocate, upon 


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1 the request of the taxpayer, such amount to any 

2 other qualified building for which the credit amount 

3 allocated in any preceding calendar year was too 

4 small because the estimates made under subsection 

5 (c)(2)(B) were substantially incorrect. 

6 ‘‘(3) RENTING TO NONELIGIBLE TENANTS.—If, 

7 after the application of paragraphs (1)(C) (or any 

8 similar reallocation under paragraph (1)(F)) and 

9 (2), a rental reduction credit agency of a State de10 termines that, because of the incorrect estimates 

11 under subsection (c)(2)(B), the aggregate qualified 

12 rental reduction amounts for all eligible units within 

13 a qualified building will (on an ongoing basis) exceed 

14 the rental reduction credit amount allocated to such 

15 building, a taxpayer may elect, subject to subsection 

16 (g)(2) and only to the extent necessary to eliminate 

17 such excess, rent vacant eligible units without regard 

18 to the requirements that such units be rented only 

19 to eligible tenants and at the rental rate determined 

20 under subsection (b)(3). 

21 ‘‘(e) TERMS RELATING TO RENTAL REDUCTION

22 CREDIT AND REQUIREMENTS.—For purposes of this sec23 tion— 

24 ‘‘(1) APPLICABLE PERCENTAGE.— 


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1 ‘‘(A) IN GENERAL.—The term ‘applicable 

2 percentage’ means, with respect to any qualified 

3 building, the percentage (not greater than 110 

4 percent) set by the rental reduction credit agen5 cy at the time it allocates the rental reduction 

6 dollar amount to such building. 

7 ‘‘(B) HIGHER PERCENTAGE FOR HIGH-OP8 PORTUNITY AREAS.—The rental reduction cred9 it agency may set a percentage under subpara10 graph (A) up to 120 percent for any qualified 

11 building which— 

12 ‘‘(i) targets its eligible units for rental 

13 to families with children, and 

14 ‘‘(ii) is located in a neighborhood 

15 which has a poverty rate of no more than 

16 10 percent. 

17 ‘‘(2) CREDIT PERIOD.— 

18 ‘‘(A) IN GENERAL.—The term ‘credit pe19 riod’ means, with respect to any qualified build20 ing, the 15-year period beginning with the first 

21 month for which the qualified rental reduction 

22 agreement is in effect with respect to such 

23 building. 

24 ‘‘(B) STATE OPTION TO REDUCE PE25 RIOD.—A rental reduction credit agency may 


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1 provide a credit period for any qualified build2 ing which is less than 15 years. 

3 ‘‘(3) ELIGIBLE UNIT.— 

4 ‘‘(A) IN GENERAL.—The term ‘eligible 

5 unit’ means, with respect to any qualified build6 ing, a unit— 

7 ‘‘(i) which is occupied by an eligible 

8 tenant, 

9 ‘‘(ii) the rent of which for any month 

10 equals 30 percent of the monthly family in11 come of the residents of such unit (as de12 termined under paragraph (5)), 

13 ‘‘(iii) with respect to which the tenant 

14 is not concurrently receiving rental assist15 ance under any other Federal program, 

16 and 

17 ‘‘(iv) which is certified to the rental 

18 reduction credit agency as an eligible unit 

19 for purposes of this section and the quali20 fied rental reduction agreement. 

21 Notwithstanding clause (iii), a State may pro22 vide in its State rental reduction allocation plan 

23 that an eligible unit shall also not include a unit 

24 with respect to which any resident is receiving 


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1 rental assistance under a State or local pro2 gram. 

3 ‘‘(B) LIMITATION ON NUMBER OF

4 UNITS.— 

5 ‘‘(i) IN GENERAL.—The number of 

6 units which may be certified as eligible 

7 units with respect to any qualified building 

8 under subparagraph (A)(iv) at any time 

9 shall not exceed the greater of— 

10 ‘‘(I) 40 percent of the total units 

11 in such building, or 

12 ‘‘(II) 25 units. 

13 In the case of an allocation to a project 

14 under subsection (c)(1)(B), the limitation 

15 under the preceding sentence shall be ap16 plied on a project basis and the certifi17 cation of such eligible units shall be allo18 cated to each building in the project, ex19 cept that if buildings in such project are 

20 on non-contiguous tracts of land, buildings 

21 on each such tract shall be treated as a 

22 separate project for purposes of applying 

23 this sentence. 

24 ‘‘(ii) BUILDINGS RECEIVING PREVIOUS

25 FEDERAL RENTAL ASSISTANCE.—If, at any 


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1 time prior to the entering into of a quali2 fied rental reduction agreement with re3 spect to a qualified building, tenants in 

4 units within such building had been receiv5 ing project-based rental assistance under 

6 any other Federal program, then, notwith7 standing clause (i), the maximum number 

8 of units which may be certified as eligible 

9 units with respect to the building under 

10 subparagraph (A)(iv) shall not be less than 

11 the sum of— 

12 ‘‘(I) the maximum number of 

13 units in the building previously receiv14 ing such assistance at any time before 

15 the agreement takes effect, plus 

16 ‘‘(II) the amount determined 

17 under clause (i) without taking into 

18 account the units described in sub19 clause (I). 

20 ‘‘(4) ELIGIBLE TENANT.— 

21 ‘‘(A) IN GENERAL.—The term ‘eligible ten22 ant’ means any individual if the individual’s 

23 family income does not exceed the greater of— 


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1 ‘‘(i) 30 percent of the area median 

2 gross income (as determined under section 

3 42(g)(1)), or 

4 ‘‘(ii) the applicable poverty line for a 

5 family of the size involved. 

6 ‘‘(B) TREATMENT OF INDIVIDUALS WHOSE

7 INCOMES RISE ABOVE LIMIT.— 

8 ‘‘(i) IN GENERAL.—Notwithstanding 

9 an increase in the family income of resi10 dents of a unit above the income limitation 

11 applicable under subparagraph (A), such 

12 residents shall continue to be treated as el13 igible tenants if the family income of such 

14 residents initially met such income limita15 tion and such unit continues to be certified 

16 as an eligible unit under this section. 

17 ‘‘(ii) NO RENTAL REDUCTION FOR AT

18 LEAST 2 YEARS.—A qualified rental reduc19 tion agreement with respect to a qualified 

20 building shall provide that if, by reason of 

21 an increase in family income described in 

22 clause (i), there is no qualified rental re23 duction amount with respect to the dwell24 ing unit for 2 consecutive years, the tax25 payer shall rent the next available unit to 


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1 an eligible tenant (without regard to 

2 whether such unit is an eligible unit under 

3 this section). 

4 ‘‘(C) APPLICABLE POVERTY LINE.—The 

5 term ‘applicable poverty line’ means the most 

6 recently published poverty line (within the 

7 meaning of section 2110(c)(5) of the Social Se8 curity Act (42 U.S.C. 1397jj(c)(5))) as of the 

9 time of the determination as to whether an in10 dividual is an eligible tenant. 

11 ‘‘(5) FAMILY INCOME.— 

12 ‘‘(A) IN GENERAL.—Family income shall 

13 be determined in the same manner as under 

14 section 8 of the United States Housing Act of 

15 1937. 

16 ‘‘(B) TIME FOR DETERMINING INCOME.— 

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in this subparagraph, family income 

19 shall be determined at least annually on 

20 the basis of income for the preceding cal21 endar year. 

22 ‘‘(ii) FAMILIES ON FIXED INCOME.—If 

23 at least 90 percent of the family income of 

24 the residents of a unit at the time of any 

25 determination under clause (i) is derived 


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1 from payments under title II or XVI of the 

2 Social Security Act (or any similar fixed 

3 income amounts specified by the Sec4 retary), the taxpayer may elect to treat 

5 such payments (or amounts) as the family 

6 income of such residents for the year of 

7 the determination and the 2 succeeding 

8 years, except that the taxpayer shall, in 

9 such manner as the Secretary may pre10 scribe, adjust such amount for increases in 

11 the cost of living. 

12 ‘‘(iii) INITIAL INCOME.—The Sec13 retary may allow a State to provide that 

14 the family income of residents at the time 

15 such residents first rent a unit in a quali16 fied building may be determined on the 

17 basis of current or anticipated income. 

18 ‘‘(iv) SPECIAL RULES WHERE FAMILY

19 INCOME IS REDUCED.— If residents of a 

20 unit establish (in such manner as the rent21 al reduction credit agency provides) that 

22 their family income has been reduced by at 

23 least 10 percent below such income for the 

24 determination year— 


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1 ‘‘(I) such residents may elect, at 

2 such time and in such manner as such 

3 agency may prescribe, to have their 

4 family income redetermined, and 

5 ‘‘(II) clause (ii) shall not apply to 

6 any of the 2 succeeding years de7 scribed in such clause which are speci8 fied in the election. 

9 ‘‘(f) STATE RENTAL REDUCTION ALLOCATION

10 PLAN.— 

11 ‘‘(1) ADOPTION OF PLAN REQUIRED.— 

12 ‘‘(A) IN GENERAL.—For purposes of this 

13 section— 

14 ‘‘(i) each State shall, before the allo15 cation of its State rental reduction credit 

16 ceiling, establish and have in effect a State 

17 rental reduction allocation plan, and 

18 ‘‘(ii) notwithstanding any other provi19 sion of this section, the rental reduction 

20 credit amount allocated to any building 

21 shall be zero unless such amount was allo22 cated pursuant to a State rental reduction 

23 allocation plan. 


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1 Such plan shall only be adopted after such plan 

2 is made public and at least 60 days has been 

3 allowed for public comment. 

4 ‘‘(B) STATE RENTAL REDUCTION ALLOCA5 TION PLAN.—For purposes of this section, the 

6 term ‘State rental reduction allocation plan’ 

7 means, with respect to any State, any plan of 

8 the State meeting the requirements of para9 graphs (2) and (3). 

10 ‘‘(2) GENERAL PLAN REQUIREMENTS.—A plan 

11 shall meet the requirements of this paragraph only 

12 if— 

13 ‘‘(A) the plan sets forth the criteria and 

14 priorities which a rental reduction credit agency 

15 of the State shall use in allocating the State 

16 rental reduction credit ceiling to eligible units 

17 within a building, 

18 ‘‘(B) the plan provides that no credit allo19 cation shall be made which is not in accordance 

20 with the criteria and priorities set forth under 

21 subparagraph (A) unless such agency provides 

22 a written explanation to the general public for 

23 any credit allocation which is not so made and 

24 the reasons why such allocation is necessary, 

25 and 


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1 ‘‘(C) the plan provides that such agency is 

2 required to prioritize the renewal of existing 

3 credit allocations at the time of the expiration 

4 of the qualified rental reduction agreement with 

5 respect to the allocation, including, where ap6 propriate, a commitment within a qualified 

7 rental reduction agreement that the credit allo8 cation will be renewed if the terms of the agree9 ment have been met and sufficient new credit 

10 authority is available. 

11 ‘‘(3) SPECIFIC REQUIREMENTS.—A plan shall 

12 meet the requirements of this paragraph only if— 

13 ‘‘(A) the plan provides methods for deter14 mining— 

15 ‘‘(i) the amount of rent which would 

16 be charged for a substantially similar unit 

17 in the same building which is not an eligi18 ble unit for purposes of subsection 

19 (b)(2)(A)(i), including whether such deter20 mination may be made by self-certification 

21 or by undertaking rent reasonableness as22 sessments similar to assessments required 

23 under section 8(o)(10) of the United 

24 States Housing Act of 1937 (42 U.S.C. 

25 1437f(o)(10)), 


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1 ‘‘(ii) the qualified rental reduction 

2 amounts under subsection (c)(2)(B), and 

3 ‘‘(iii) the applicable percentage under 

4 subsection (e)(1), 

5 ‘‘(B) the plan provides a procedure that 

6 the rental reduction credit agency (or an agent 

7 or other private contractor of such agency) will 

8 follow in monitoring for— 

9 ‘‘(i) noncompliance with the provisions 

10 of this section and the qualified rental re11 duction agreement and in notifying the In12 ternal Revenue Service of any such non13 compliance of which such agency becomes 

14 aware, and 

15 ‘‘(ii) noncompliance with habitability 

16 standards through regular site visits, 

17 ‘‘(C) the plan requires a person receiving a 

18 credit allocation to report to the rental reduc19 tion credit agency such information as is nec20 essary to ensure compliance with the provisions 

21 of this section and the qualified rental reduction 

22 agreement, and 

23 ‘‘(D) the plan provides methods by which 

24 any excess reserve amounts which become avail25 able under subsection (d)(1)(C)(ii) will be used 


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1 to reduce rental payments of eligible tenants or 

2 to address maintenance and repair needs in 

3 qualified buildings, including how such assist4 ance will be allocated among eligible tenants 

5 and qualified buildings. 

6 ‘‘(g) QUALIFIED RENTAL REDUCTION AGREE7 MENT.—For purposes of this section— 

8 ‘‘(1) IN GENERAL.—The term ‘qualified rental 

9 reduction agreement’ means, with respect to any 

10 building which is residential rental property (as de11 fined in section 168(e)(2)(A)), a written, binding 

12 agreement between a rental reduction credit agency 

13 and the taxpayer which specifies— 

14 ‘‘(A) the number of eligible units within 

15 such building for which a rental reduction cred16 it amount is being allocated, 

17 ‘‘(B) the credit period for such building, 

18 ‘‘(C) the rental reduction credit amount al19 located to such building (and dwelling units 

20 within such building) and the portion of such 

21 amount allocated to each month within the 

22 credit period under subsection (c)(2)(B), 

23 ‘‘(D) the applicable percentage to be used 

24 in computing the qualified rental reduction 

25 amounts with respect to the building, 


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1 ‘‘(E) the method for determining the 

2 amount of rent which may be charged for eligi3 ble units within the building, and 

4 ‘‘(F) whether— 

5 ‘‘(i) the agency commits to entering 

6 into a new agreement with the taxpayer if 

7 the terms of the agreement have been met 

8 and sufficient new credit authority is avail9 able for such new agreement, and 

10 ‘‘(ii) the taxpayer is required to accept 

11 such new agreement. 

12 ‘‘(2) TENANT PROTECTIONS.—A qualified rent13 al reduction agreement shall provide the following: 

14 ‘‘(A) NON-DISPLACEMENT OF NON-ELIGI15 BLE TENANTS.—A taxpayer receiving a rental 

16 reduction credit amount may not refuse to 

17 renew the lease of or evict (other than for good 

18 cause) a tenant of a unit who is not an eligible 

19 tenant at any time during the credit period and 

20 such unit shall not be treated as an eligible unit 

21 while such tenant resides there. 

22 ‘‘(B) ONLY GOOD CAUSE EVICTIONS OF

23 ELIGIBLE TENANTS.—A taxpayer receiving a 

24 rental reduction credit amount may not refuse 

25 to renew the lease of or evict (other than for 


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1 good cause) an eligible tenant of an eligible 

2 unit. 

3 ‘‘(C) MOBILITY.—A taxpayer receiving a 

4 rental reduction credit amount shall— 

5 ‘‘(i) give priority to rent any available 

6 unit of suitable size to tenants who are eli7 gible tenants who are moving from another 

8 qualified building where such tenants had 

9 lived at least 1 year and were in good 

10 standing, and 

11 ‘‘(ii) inform eligible tenants within the 

12 building of their right to move after 1 year 

13 and provide a list maintained by the State 

14 of qualified buildings where such tenants 

15 might move. 

16 ‘‘(iii) FAIR HOUSING AND CIVIL

17 RIGHTS.—If a taxpayer receives a rental 

18 reduction credit amount— 

19 ‘‘(I) such taxpayer shall comply 

20 with the Fair Housing Act with re21 spect to the building, and 

22 ‘‘(II) the receipt of such amount 

23 shall be treated as the receipt of Fed24 eral financial assistance for purposes 


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1 of applying any Federal civil rights 

2 laws. 

3 ‘‘(iv) ADMISSIONS PREFERENCES.—A 

4 taxpayer receiving a rental reduction credit 

5 amount shall comply with any admissions 

6 preferences established by the State for 

7 tenants within particular demographic 

8 groups eligible for health or social services. 

9 ‘‘(3) COMPLIANCE REQUIREMENTS.—A quali10 fied rental reduction agreement shall provide that a 

11 taxpayer receiving a rental reduction credit amount 

12 shall comply with all reporting and other procedures 

13 established by the State to ensure compliance with 

14 this section and such agreement. 

15 ‘‘(4) PROJECTS.—In the case of a rental reduc16 tion credit allocated to a project consisting of more 

17 than 1 building, the rental reduction credit agency 

18 may provide for a single qualified rental reduction 

19 agreement which applies to all buildings which are 

20 part of such project. 

21 ‘‘(h) CERTIFICATIONS AND OTHER REPORTS TO SEC22 RETARY.— 

23 ‘‘(1) CERTIFICATION WITH RESPECT TO 1ST

24 YEAR OF CREDIT PERIOD.—Following the close of 

25 the 1st taxable year in the credit period with respect 


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1 to any qualified building, the taxpayer shall certify 

2 to the Secretary (at such time and in such form and 

3 in such manner as the Secretary prescribes)— 

4 ‘‘(A) the information described in sub5 section (g)(1) required to be contained in the 

6 qualified rental reduction agreement with re7 spect to the building, and 

8 ‘‘(B) such other information as the Sec9 retary may require. 

10 In the case of a failure to make the certification re11 quired by the preceding sentence on the date pre12 scribed therefor, unless it is shown that such failure 

13 is due to reasonable cause and not to willful neglect, 

14 no credit shall be allowable by reason of subsection 

15 (a) with respect to such building for any taxable 

16 year ending before such certification is made. 

17 ‘‘(2) ANNUAL REPORTS TO THE SECRETARY.— 

18 The Secretary may require taxpayers to submit an 

19 information return (at such time and in such form 

20 and manner as the Secretary prescribes) for each 

21 taxable year setting forth— 

22 ‘‘(A) the information described in para23 graph (1)(A) for the taxable year, and 

24 ‘‘(B) such other information as the Sec25 retary may require. 


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1 The penalty under section 6652(j) shall apply to any 

2 failure to submit the return required by the Sec3 retary under the preceding sentence on the date pre4 scribed therefor. 

5 ‘‘(3) ANNUAL REPORTS FROM RENTAL REDUC6 TION CREDIT AGENCY.— 

7 ‘‘(A) REPORTS.—Each rental reduction 

8 credit agency which allocates any rental reduc9 tion credit amount to 1 or more buildings for 

10 any calendar year shall submit to the Secretary 

11 (at such time and in such manner as the Sec12 retary shall prescribe) an annual report speci13 fying— 

14 ‘‘(i) the amount of rental reduction 

15 credit amounts allocated to each such 

16 building for such year, 

17 ‘‘(ii) sufficient information to identify 

18 each such building and the taxpayer with 

19 respect thereto, 

20 ‘‘(iii) information as to the demo21 graphic and income characteristics of eligi22 ble tenants of all such buildings to which 

23 such amounts were allocated, and 

24 ‘‘(iv) such other information as the 

25 Secretary may require. 


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1 ‘‘(B) PENALTY.—The penalty under sec2 tion 6652(j) shall apply to any failure to submit 

3 the report required by subparagraph (A) on the 

4 date prescribed therefor. 

5 ‘‘(C) INFORMATION MADE PUBLIC.—The 

6 Secretary shall, in consultation with Secretary 

7 of Housing and Urban Development, make in8 formation reported under this paragraph for 

9 each qualified building available to the public 

10 annually to the greatest degree possible without 

11 disclosing personal information about individual 

12 tenants. 

13 ‘‘(i) SPECIAL RULE FOR PAYMENTS TO PARTNER14 SHIPS AND S CORPORATIONS.—For purposes of this sub15 title, in the case of any qualified building directly held by 

16 any partnership or S corporation, the payment under sec17 tion 6433 shall be made in lieu of the credit determined 

18 under this section with respect to such building. 

19 ‘‘(j) REGULATIONS AND GUIDANCE.—The Secretary 

20 shall prescribe such regulations or guidance as may be 

21 necessary to carry out the purposes of this section, includ22 ing— 

23 ‘‘(1) providing necessary forms and instruc24 tions, and 


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1 ‘‘(2) providing for proper treatment of projects 

2 for which a credit is allowed both under this section 

3 and section 42.’’. 

4 (b) PAYMENT TO PARTNERSHIPS AND S CORPORA5 TIONS IN LIEU OF CREDIT.— 

6 (1) IN GENERAL.— Subchapter B of chapter 65 

7 of the Internal Revenue Code of 1986 is amended by 

8 adding at the end the following new section: 

9 ‘‘SEC. 6433. PAYMENTS IN LIEU OF RENTERS CREDIT FOR 

10 PARTNERSHIPS AND S CORPORATIONS. 

11 ‘‘(a) IN GENERAL.—In the case of any qualified 

12 building (as defined in section 36C(a)(3)) directly held by 

13 any partnership or S corporation, the Secretary shall pay 

14 to such partnership or S corporation for any taxable year 

15 an amount equal to the amount of the credit which, but 

16 for section 36C(i), would be allowed under section 36C 

17 with respect to such building. 

18 ‘‘(b) REGULATORY AUTHORITY.—The Secretary shall 

19 prescribe such regulations, rules, and guidance as may be 

20 necessary to carry out section 36C(i), section 92, and this 

21 section, including regulations, rules, and guidance pro22 viding for— 

23 ‘‘(1) the application of the rules under section 

24 36C with respect to payments under this section in 


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1 the same manner as such rules apply for purposes 

2 of the credit under section 36C, 

3 ‘‘(2) the time and manner of payments under 

4 subsection (a), and 

5 ‘‘(3) the determination of a partner’s distribu6 tive share, or an S corporation shareholder’s pro 

7 rata share, of any payment under subsection (a).’’. 

8 (2) CONFORMING AMENDMENT.—The table of 

9 sections for subchapter B of chapter 65 of the Inter10 nal Revenue Code of 1986 is amended by adding at 

11 the end the following new item: 

‘‘Sec. 6433. Payments in lieu of renters credit for partnerships and S corporations.’’. 

12 (c) CREDIT INCLUDIBLE IN GROSS INCOME.— 

13 (1) IN GENERAL.—Part II of subchapter B of 

14 chapter 1 of the Internal Revenue Code of 1986 is 

15 amended by adding at the end the following new sec16 tion: 

17 ‘‘SEC. 92. INCLUSION IN INCOME OF RENTERS CREDIT AND 

18 PAYMENTS. 

19 ‘‘Gross income includes the amount of the credit al20 lowed to the taxpayer under section 36C for the taxable 

21 year and the amount of any payment in lieu of such credit 

22 under section 6433.’’. 


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1 (2) INCOME DISREGARDED FOR ALTERNATIVE

2 MINIMUM TAXABLE INCOME.—Section 56(a) of such 

3 Code is amended by adding at the end the following: 

4 ‘‘(8) SECTION 92 NOT APPLICABLE.—Section 92 

5 (relating to inclusion in income of renters credit) 

6 shall not apply.’’. 

7 (3) CONFORMING AMENDMENT.—The table of 

8 sections for part II of subchapter B of chapter 1 of 

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

‘‘Sec. 92. Inclusion in income of renters credit and payments.’’. 

11 (d) ADMINISTRATIVE FEES.— No provision of, or 

12 amendment made by, this Act shall be construed to pre13 vent a rental reduction credit agency of a State from im14 posing fees to cover its costs or from levying any such fee 

15 on a taxpayer applying for or receiving a rental reduction 

16 credit amount. 

17 (e) OTHER CONFORMING AMENDMENTS.— 

18 (1) Section 6211(b)(4) of the Internal Revenue 

19 Code of 1986 is amended by inserting ‘‘36C (includ20 ing any related payment under section 6433),’’ after 

21 ‘‘36B,’’. 

22 (2) Paragraph (2) of section 1324(b) of title 

23 31, United States Code, is amended by inserting 

24 ‘‘36C (including any related payment under section 

25 6433),’’ after ‘‘36B,’’. 


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1 (3) The table of sections for subpart C of part 

2 IV of subchapter A of chapter 1 of the Internal Rev3 enue Code of 1986 is amended by inserting after the 

4 item relating to section 36B the following new item: 

‘‘Sec. 36C. Renters credit.’’. 

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

6 this section shall apply to taxable years beginning after 

7 December 31, 2020. 

Æ 


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