I 

116TH CONGRESS 

1ST SESSION H. R. 2832 

To amend the Internal Revenue Code of 1986 to allow a business credit 

for gain from the sale of real property for use as a manufactured 

home community, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 17, 2019 

Ms. OMAR (for herself, Ms. LEE of California, Mr. NEGUSE, Mr. POCAN, Mr. 

PAPPAS, Ms. KUSTER of New Hampshire, Mr. DEFAZIO, and Mr. 

KHANNA) 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 allow a 

business credit for gain from the sale of real property 

for use as a manufactured home community, 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 ‘‘Frank Adelmann Man5 ufactured Housing Community Sustainability Act’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds that— 


kjohnson on DSK79L0C42 with BILLS
2 

•HR 2832 IH

1 (1) more than 17 million people live in manu2 factured homes, benefitting from high-quality afford3 able homes that can provide them stability; 

4 (2) owners of manufactured homes are dis5 proportionately low-income households: in 2013, the 

6 median annual household income for those living in 

7 manufactured housing was $28,400; 

8 (3) about 75 percent of manufactured home 

9 households earn less than $50,000; 

10 (4) over 10 percent of United States veterans 

11 live in manufactured homes; 

12 (5) in the late 1990s, manufactured housing 

13 represented two-thirds of the new affordable housing 

14 produced in the United States, and it remains the 

15 largest source of unsubsidized affordable housing in 

16 the country; 

17 (6) as of 2015, the average cost per square foot 

18 for a new manufactured home was $48, less than 

19 half the $101 per square foot of the structure-only 

20 cost of a new site-built home; 

21 (7) in 2009, 43 percent of all new homes that 

22 sold for less than $150,000 were manufactured 

23 homes; 

24 (8) manufactured homes accounts for 23 per25 cent of new home sales under $200,000; 


kjohnson on DSK79L0C42 with BILLS
3 

•HR 2832 IH

1 (9) more than 50,000 manufactured home com2 munities, or ‘‘mobile home parks’’, exist throughout 

3 the United States; 

4 (10) more than 2.9 million manufactured homes 

5 are placed in manufactured home communities; 

6 (11) manufactured home communities provide 

7 critical affordable housing but receive very little 

8 local, State, or Federal funds subsidizing the cost of 

9 these homes; 

10 (12) manufactured home owners in commu11 nities may own the home, but they do not own the 

12 land under their homes, leaving them vulnerable to 

13 rent increases, arbitrary rule enforcement, and even 

14 closure of the community if the community owner 

15 decides to convert the land to some other use; 

16 (13) eviction or closure of manufactured home 

17 communities is very disruptive to residents who may 

18 be unable to pay the thousands of dollars it takes to 

19 move their home or even find a new location for 

20 their home; 

21 (14) in the past two decades, a national net22 work of housing providers has helped residents pur23 chase and own the land and manage the community 

24 in order to preserve a crucial source of affordable 

25 housing; 


kjohnson on DSK79L0C42 with BILLS
4 

•HR 2832 IH

1 (15) nationwide, there are more than 1,000 of 

2 these stable, permanent ownership cooperatives or 

3 nonprofit-owned developments in more than a dozen 

4 States; 

5 (16) members continue to own their own homes 

6 individually and an equal share of the land beneath 

7 the entire neighborhood where everyone has a say in 

8 the way the resident-owned community is run, and 

9 major decisions are made by democratic vote by a 

10 member-elected board of directors; 

11 (17) in New Hampshire, more than 20 percent 

12 of manufactured home communities are owned by 

13 residents; 

14 (18) in Vermont, Massachusetts, Rhode Island, 

15 Washington, Oregon, and Minnesota, resident-owned 

16 cooperatives and nonprofit ownership have flour17 ished; 

18 (19) nationwide, only 2 percent of all manufac19 tured home communities are resident- or nonprofit20 owned; 

21 (20) owners are frequently reluctant to sell the 

22 community because they would prefer to pass the 

23 property on to their heirs tax free and avoid capital 

24 gains taxes; 


kjohnson on DSK79L0C42 with BILLS
5 

•HR 2832 IH

1 (21) when the owner dies, the heirs frequently 

2 sell the community to the highest bidder resulting in 

3 displacement for dozens and sometimes hundreds of 

4 families; and 

5 (22) a Federal tax benefit needs to be estab6 lished to induce owners to sell to residents they have 

7 known for decades or to nonprofit organizations in 

8 order to preserve the community for years to come. 

9 SEC. 3. TAX CREDIT FOR MANUFACTURED HOME COMMU10 NITY SALE TO RESIDENTS OR NONPROFIT 

11 ENTITY. 

12 (a) IN GENERAL.—Subpart D of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of 

14 1986 (relating to business related credits) is amended by 

15 adding at the end the following new section: 

16 ‘‘SEC. 45T. MANUFACTURED HOME COMMUNITY SALE TO 

17 RESIDENTS OR NONPROFIT ENTITY. 

18 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec19 tion 38, the manufactured home community sale credit de20 termined under this section for any taxable year is an 

21 amount equal to 75 percent of the qualified gain received 

22 by the taxpayer during the taxable year. 

23 ‘‘(b) DEFINITIONS.—For purposes of this section— 

24 ‘‘(1) QUALIFIED GAIN.—The term ‘qualified 

25 gain’ means gain from the sale or exchange of real 


kjohnson on DSK79L0C42 with BILLS
6 

•HR 2832 IH

1 property to a qualified manufactured home commu2 nity cooperative or corporation if— 

3 ‘‘(A) the real property is acquired for use 

4 as a manufactured home community, and 

5 ‘‘(B) the requirements of paragraph (2) 

6 are met. 

7 ‘‘(2) REQUIREMENTS.—The requirements of 

8 this paragraph are met if— 

9 ‘‘(A) the seller (or any related person) 

10 owned the property for not less than the 2-year 

11 period ending before the sale or exchange, and 

12 ‘‘(B) the property is transferred subject to 

13 a binding covenant that the property will be 

14 used as a manufactured home community for a 

15 term of not less than 50 years (or, in the case 

16 of a manufactured home community located in 

17 a State the laws of which restrict such covenant 

18 to a lesser term, the maximum permissible term 

19 allowed under such State laws). 

20 ‘‘(3) MANUFACTURED HOME COMMUNITY.—The 

21 term ‘manufactured home community’ means a com22 munity comprised primarily of manufactured homes 

23 used solely for residential purposes and owned by a 

24 manufactured home community cooperative or cor25 poration. 


kjohnson on DSK79L0C42 with BILLS
7 

•HR 2832 IH

1 ‘‘(4) MANUFACTURED HOME COMMUNITY COOP2 ERATIVE OR CORPORATION.— 

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

4 manufactured home community cooperative or 

5 corporation’ means a cooperative or a nonprofit 

6 corporation established pursuant to the laws of 

7 the State in which the property used as a man8 ufactured home community is located and 

9 which— 

10 ‘‘(i) in the case of a community owned 

11 by a nonprofit corporation whose member12 ship interests are sold on a nonappre13 ciating basis, has only one class of mem14 bership consisting of residents, and 

15 ‘‘(ii) in the case of a community 

16 owned by a cooperative, has no more than 

17 two classes of membership, which includes 

18 both members and a tax-exempt organiza19 tion actively engaged in supporting afford20 able housing and resident-owned manufac21 tured home communities. 

22 ‘‘(B) GOVERNANCE.—An entity shall not 

23 be treated as a qualified manufactured home 

24 community cooperative or corporation for pur25 poses of subparagraph (A) unless governance of 


kjohnson on DSK79L0C42 with BILLS
8 

•HR 2832 IH

1 the entity is carried out by members elected to 

2 a board of directors with voting structured eq3 uitably among all members. 

4 ‘‘(C) MEMBER.—The term ‘member’ 

5 means— 

6 ‘‘(i) an individual— 

7 ‘‘(I) has attained the age of 18, 

8 ‘‘(II) is entitled by reason of the 

9 individual’s membership interest to 

10 execute an occupancy agreement with 

11 the manufactured home community 

12 cooperative nonprofit with respect to 

13 one site in the manufactured home 

14 community for the purposes of situ15 ating a manufactured home owned by 

16 the member or, as permitted by the 

17 manufactured community cooperative 

18 or corporation, the member’s trust or 

19 other entity, and 

20 ‘‘(III) is a resident of the manu21 factured home community, and 

22 ‘‘(ii) a tax exempt organization. 

23 ‘‘(5) MEMBERSHIP INTEREST.—The term 

24 ‘membership interest’ means an ownership interest 

25 in a manufactured home community cooperative or 


kjohnson on DSK79L0C42 with BILLS
9 

•HR 2832 IH

1 corporation or a membership interest in a manufac2 tured home community nonprofit corporation. 

3 ‘‘(6) MANUFACTURED HOME.—The term ‘man4 ufactured home’ means a structure, transportable in 

5 one or more sections, which— 

6 ‘‘(A) in the traveling mode, is 8 body feet 

7 or more in width and 40 body feet or more in 

8 length, or when erected on site, is 320 square 

9 feet or more, 

10 ‘‘(B) is built on a permanent chassis and 

11 designed to be used as a dwelling (with or with12 out a permanent foundation when connected to 

13 required utilities) and includes plumbing, heat14 ing, and electrical heating systems, and 

15 ‘‘(C) in the case of a structure manufac16 tured after June 15, 1976, is certified as meet17 ing the Manufactured Home Construction and 

18 Safety Standards issued under the National 

19 Manufactured Housing Construction and Safety 

20 Standards Act of 1974 (42 U.S.C. 5401–5426) 

21 by the Department of Housing and Urban De22 velopment and displays a label of such certifi23 cation on the exterior of each transportable sec24 tion. 

25 ‘‘(c) SPECIAL RULES.— 


kjohnson on DSK79L0C42 with BILLS
10 

•HR 2832 IH

1 ‘‘(1) RELATED PERSON.—For purposes of sub2 section (b)(2)(A), a person (hereafter in this sub3 paragraph referred to as the ‘related person’) is re4 lated to the seller if— 

5 ‘‘(A) the related person bears a relation6 ship to the seller specified in section 267(b) or 

7 707(b)(1), or 

8 ‘‘(B) the related person and the seller are 

9 engaged in trades or businesses under common 

10 control (within the meaning of subsections (a) 

11 and (b) of section 52). 

12 ‘‘(2) ELECTION BY BOTH SELLER AND

13 BUYER.—The credit is allowable under this section 

14 only if— 

15 ‘‘(A) elected by both the seller and the 

16 buyer of the real property and evidenced by an 

17 affidavit executed by both parties, and 

18 ‘‘(B) the buyer of the real property records 

19 the affidavit and the affidavit is referenced in 

20 its deed to the real property. 

21 The seller shall elect the credit under this section on 

22 its return of tax. 

23 ‘‘(d) TAX UPON VIOLATION OF COVENANT.—There 

24 is imposed a tax on the buyer for a violation of the cov25 enant specified in subsection (b)(2)(B). The amount of 


kjohnson on DSK79L0C42 with BILLS
11 

•HR 2832 IH

1 such tax shall be 20 percent of the net proceeds after set2 tlement for the sale or exchange of the real property re3 ferred to in subsection (b)(2). For purposes of section 

4 501(a), the tax imposed by this subsection shall not be 

5 treated as a tax imposed by this subtitle. 

6 ‘‘(e) REGULATIONS.—The Secretary shall issue such 

7 regulations or other guidance as may be necessary to carry 

8 out this section, including the recapture of the tax benefit 

9 under this section in any case in which the real property 

10 described in subsection (b) is not used as a manufactured 

11 home community for at least 50 years.’’. 

12 (b) CREDIT ALLOWED AS PART OF GENERAL BUSI13 NESS CREDIT.—Section 38(b) of such Code is amended 

14 by striking ‘‘plus’’ at the end of paragraph (31), by strik15 ing the period at the end of paragraph (32) and inserting 

16 ‘‘, plus’’, and by adding at the end the following new para17 graph: 

18 ‘‘(33) the manufactured home community sale 

19 credit determined under section 45T(a).’’. 

20 (c) CONFORMING AMENDMENTS.— 

21 (1) Subsection (c) of section 196 of such Code 

22 is amended by striking ‘‘and’’ at the end of para23 graph (13), by striking the period at the end of 

24 paragraph (14) and inserting ‘‘, and’’, and by add25 ing at the end the following new paragraph: 


kjohnson on DSK79L0C42 with BILLS
12 

•HR 2832 IH

1 ‘‘(15) the manufactured home community sale 

2 credit determined under section 45T(a).’’. 

3 (2) The table of sections for subpart D of part 

4 IV of subchapter A of chapter 1 of such Code is 

5 amended by adding at the end the following new 

6 item: 

‘‘Sec. 45T. Manufactured home community sale to residents or nonprofit entity.’’. 

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

8 this section shall apply to taxable years beginning after 

9 December 31, 2019. 

Æ 


kjohnson on DSK79L0C42 with BILLS