II 

111TH CONGRESS 

2D SESSION S. 3141 

To amend the Internal Revenue Code of 1986 to provide special rules for 

treatment of low-income housing credits, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 18, 2010 

Mr. BINGAMAN (for himself, Mr. MENENDEZ, Mr. KERRY, Ms. CANTWELL, 

Ms. STABENOW, and Mr. SCHUMER) 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 

special rules for treatment of low-income housing credits, 

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 ‘‘Low Income Housing 

5 Tax Credit Recovery Act of 2010’’. 


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1 SEC. 2. FIVE-YEAR CARRYBACK OF LOW-INCOME HOUSING 

2 CREDIT. 

3 (a) IN GENERAL.—Subsection (a) of section 39 of the 

4 Internal Revenue Code of 1986 is amended by adding at 

5 the end the following new paragraph: 

6 ‘‘(4) 5-YEAR CARRYBACK OF LOW-INCOME

7 HOUSING CREDIT.— 

8 ‘‘(A) IN GENERAL.—In the case of an ap9 plicable low-income housing credit (within the 

10 meaning of section 38(c)(6)(C))— 

11 ‘‘(i) this section shall be applied sepa12 rately from the business credit (other than 

13 the low-income housing credit), and 

14 ‘‘(ii) paragraph (1) shall be applied by 

15 substituting ‘each of the 5 taxable years’ 

16 for ‘the taxable year’ in subparagraph (A) 

17 thereof.’’. 

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

19 this section shall apply to taxable years beginning after 

20 December 31, 2007, and to carrybacks of credits from 

21 such taxable years. 

22 SEC. 3. CARRYBACK OF NEW INVESTMENTS. 

23 (a) IN GENERAL.—Section 42(f) of the Internal Rev24 enue Code of 1986 is amended by adding at the end the 

25 following new paragraph: 


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1 ‘‘(6) SPECIAL RULE FOR CERTAIN INVEST2 MENTS IN 2010 AND 2011.— 

3 ‘‘(A) IN GENERAL.—In the case of a tax4 payer who enters into an agreement described 

5 in section 38(c)(6)(D)(i)(I) (without regard to 

6 the applicable date), which satisfies the require7 ment of section 38(c)(6)(D)(i)(II), after Decem8 ber 31, 2009, and before January 1, 2012, then 

9 solely for purposes of determining the taxable 

10 year in which the low-income housing credit 

11 under this section may be taken into account 

12 for purposes of section 38, and the amount of 

13 the credit so taken into account— 

14 ‘‘(i) the preceding paragraphs of this 

15 subsection shall not apply, 

16 ‘‘(ii) the credit period with respect to 

17 the housing credit dollar amount to be allo18 cated under such agreement shall be the 1 

19 taxable year in which the taxpayer enters 

20 into such agreement, 

21 ‘‘(iii) subsections (b) and (c)(1) shall 

22 not apply, and 

23 ‘‘(iv) the amount of the credit under 

24 this section which is taken into account in 

25 the taxable year described in clause (ii) 


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1 shall be the housing credit dollar amount 

2 to be allocated under such agreement. 

3 ‘‘(B) REQUIREMENTS OF SECTION UNAF4 FECTED.—Except as provided in subparagraph 

5 (A), the provisions of this section shall apply to 

6 any building to which an agreement described 

7 in subparagraph (A) applies as if such subpara8 graph had not been enacted. 

9 ‘‘(C) RECAPTURE OF EXCESS CREDIT.—If, 

10 at the end of the credit period with respect to 

11 any building (without regard to subparagraph 

12 (A)), the amount of the credit taken into ac13 count under subparagraph (A)(iv) with respect 

14 to such building exceeds the total amount of the 

15 credit which would have been allowed under this 

16 section with respect to such building during 

17 such credit period but for the application of 

18 subparagraph (A), then the amount of such ex19 cess shall be recaptured as if it were included 

20 in the credit recapture amount under subsection 

21 (j).’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2009. 


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1 SEC. 4. ALLOWING LOW-INCOME HOUSING CREDITS TO 

2 OFFSET 100 PERCENT OF FEDERAL INCOME 

3 TAX LIABILITY. 

4 (a) IN GENERAL.—Subsection (c) of section 38 is 

5 amended by adding at the end the following new para6 graph: 

7 ‘‘(6) ALLOWING LOW-INCOME HOUSING CREDIT

8 TO OFFSET 100 PERCENT OF FEDERAL INCOME TAX

9 LIABILITY.— 

10 ‘‘(A) IN GENERAL.—In the case of applica11 ble low-income housing credits— 

12 ‘‘(i) this section shall be applied sepa13 rately with respect to such credits, 

14 ‘‘(ii) in applying paragraph (1) to 

15 such credits— 

16 ‘‘(I) the tentative minimum tax 

17 shall be treated as being zero, and 

18 ‘‘(II) the limitation under para19 graph (1) (as modified by subclause 

20 (I)) shall be the net income tax (as 

21 defined in paragraph (1)) reduced by 

22 the credit allowed under subsection 

23 (a) for the taxable year (other than 

24 the applicable low-income housing 

25 credits), and 


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1 ‘‘(iii) the excess credit for such tax2 able year shall, solely for purposes of de3 termining the amount of such excess credit 

4 which may be carried back to a preceding 

5 taxable year, be increased by the amount 

6 of business credit carryforwards which are 

7 carried to such taxable year, to which this 

8 subparagraph applies, and which are not 

9 allowed for such taxable year by reason of 

10 the limitation under paragraph (1) (as 

11 modified by clause (ii)). 

12 ‘‘(B) INCREASE IN LIMITATION FOR TAX13 ABLE YEARS TO WHICH EXCESS APPLICABLE

14 LOW-INCOME HOUSING CREDITS ARE CARRIED

15 BACK.— 

16 ‘‘(i) IN GENERAL.—Solely for pur17 poses of determining the portion of any ex18 cess credit described in subparagraph 

19 (A)(iii) for which credit will be allowed 

20 under subsection (a)(3) for any preceding 

21 taxable year, except as provided in clause 

22 (ii), the limitation under paragraph (1) for 

23 such preceding taxable year shall be deter24 mined under rules similar to the rules de25 scribed in subparagraph (A). 


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1 ‘‘(ii) ORDERING RULE.—If the excess 

2 credit described in subparagraph (A)(iii) 

3 includes business credit carryforwards 

4 from preceding taxable years, such excess 

5 credit shall be treated as allowed for any 

6 preceding taxable year on a first-in first7 out basis. 

8 ‘‘(C) APPLICABLE LOW-INCOME HOUSING

9 CREDITS.—For purposes of this subpart, the 

10 term ‘applicable low-income housing credits’ 

11 means the credit determined under section 42— 

12 ‘‘(i) to the extent attributable to 

13 buildings placed in service after the date of 

14 the enactment of this subparagraph, and 

15 ‘‘(ii) in the case of any other build16 ings, for taxable years beginning in 2008, 

17 2009, and 2010 (and to business credit 

18 carryforwards with respect to such build19 ings carried to such taxable years) to the 

20 extent provided in subparagraph (D). 

21 ‘‘(D) PREVIOUSLY PLACED IN SERVICE

22 BUILDINGS.— 

23 ‘‘(i) IN GENERAL.—Subparagraph 

24 (C)(ii) shall apply to such credits for such 

25 a taxable year only— 


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1 ‘‘(I) if the taxpayer has entered 

2 into a binding commitment to invest 

3 equity not later than the applicable 

4 date, with respect to an investment in 

5 a future project (which is binding on 

6 the taxpayer and all successors in in7 terest) which specifies the dollar 

8 amount of such investment, and 

9 ‘‘(II) to the extent such credits 

10 do not exceed the dollar amount of 

11 such proposed investment. 

12 ‘‘(ii) APPLICABLE DATE.—For pur13 poses of this subparagraph, the applicable 

14 date is— 

15 ‘‘(I) in the case of taxable years 

16 beginning in 2008 and 2009, Sep17 tember 15, 2010, or 

18 ‘‘(II) in the case of a taxable 

19 year beginning in 2010, the due date 

20 (including extensions of time) for fil21 ing the taxpayer’s return for such tax22 able year.’’. 

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

24 this section shall apply to taxable years beginning after 


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1 December 31, 2007, and to carrybacks of credits from 

2 such taxable years. 

Æ 


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