Affordable Housing Credit Improvement Act of 2023

Subjects: Taxation


<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1557 Introduced in Senate (IS)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                S. 1557

  To amend the Internal Revenue Code of 1986 to reform the low-income 
                housing credit, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 11, 2023

 Ms. Cantwell (for herself, Mr. Young, Mr. Wyden, and Mrs. Blackburn) 
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 reform the low-income 
                housing credit, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Affordable Housing 
Credit Improvement Act of 2023''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--REFORM OF STATE ALLOCATION FORMULAS

Sec. 101. Increases in State allocations.
            TITLE II--REFORMS RELATING TO TENANT ELIGIBILITY

Sec. 201. Average income test applicability to exempt facility bonds.
Sec. 202. Codification of rules relating to increased tenant income.
Sec. 203. Modification of student occupancy rules.
Sec. 204. Tenant voucher payments taken into account as rent for 
                            certain purposes.
Sec. 205. Requirement that low-income housing credit-supported housing 
                            protect victims of domestic abuse.
Sec. 206. Clarification of general public use requirement relating to 
                            veterans, etc.
   TITLE III--RULES RELATING TO CREDIT ELIGIBILITY AND DETERMINATION

Sec. 301. Reconstruction or replacement period after casualty loss.
Sec. 302. Modification of previous ownership rules; limitation on 
                            acquisition basis.
Sec. 303. Certain relocation costs taken into account as rehabilitation 
                            expenditures.
Sec. 304. Repeal of qualified census tract population cap.
Sec. 305. Determination of community revitalization plan to be made by 
                            housing credit agency.
Sec. 306. Prohibition of local approval and contribution requirements.
Sec. 307. Increase in credit for certain projects designated to serve 
                            extremely low-income households.
Sec. 308. Increase in credit for bond-financed projects designated by 
                            State agency.
Sec. 309. Elimination of basis reduction for low-income housing 
                            properties energy efficient commercial 
                            building deduction.
Sec. 310. Restriction of planned foreclosures.
Sec. 311. Increase of population cap for difficult development areas.
Sec. 312. Increased cost oversight and accountability.
Sec. 313. Tax-exempt bond financing requirement.
        TITLE IV--REFORMS RELATING TO NATIVE AMERICAN ASSISTANCE

Sec. 401. Selection criteria under qualified allocation plans.
Sec. 402. Inclusion of Indian areas as difficult development areas for 
                            purposes of certain buildings.
             TITLE V--REFORMS RELATING TO RURAL ASSISTANCE

Sec. 501. Inclusion of rural areas as difficult development areas.
Sec. 502. Uniform income eligibility for rural projects.
                    TITLE VI--EXEMPT FACILITY BONDS

Sec. 601. Revision and clarification of the treatment of refunding 
                            issues.
                TITLE VII--AFFORDABLE HOUSING TAX CREDIT

Sec. 701. Affordable housing tax credit.
                   TITLE VIII--DATA AND TRANSPARENCY

Sec. 801. Sense of Congress.

              TITLE I--REFORM OF STATE ALLOCATION FORMULAS

SEC. 101. INCREASES IN STATE ALLOCATIONS.

    (a) In General.--Clause (ii) of section 42(h)(3)(C) of the Internal 
Revenue Code is amended--
            (1) in subclause (I), by striking ``$1.75'' and inserting 
        ``the per capita amount'', and
            (2) in subclause (II), by striking ``$2,000,000'' and 
        inserting ``the minimum amount''.
    (b) Per Capita Amount; Minimum Amount.--Section 42(h)(3) of the 
Internal Revenue Code of 1986 is amended by striking subparagraphs (H) 
and (I) and inserting the following:
                    ``(H) Per capita amount.--For purposes of 
                subparagraph (C)(ii)(I), the per capita amount shall be 
                determined as follows:
                            ``(i) Calendar year 2023.--For calendar 
                        year, 2023, the per capita amount is $3.90.
                            ``(ii) Calendar year 2024.--For calendar 
                        year 2024, the per capita amount is the product 
                        of--
                                    ``(I) 1.25, and
                                    ``(II) the dollar amount under 
                                clause (i) increased by an amount equal 
                                to--
                                            ``(aa) such dollar amount, 
                                        multiplied by
                                            ``(bb) the cost-of-living 
                                        adjustment determined under 
                                        section 1(f)(3) for such 
                                        calendar year, determined by 
                                        substituting `calendar year 
                                        2022' for `calendar year 2016' 
                                        in subparagraph (A)(ii) 
                                        thereof.
                                If the amount determined after 
                                application of the preceding sentence 
                                is not a multiple of $5,000, such 
                                amount shall be rounded to the next 
                                lowest multiple of $5,000.
                            ``(iii) Calendar years after 2024.--In the 
                        case of any calendar year after 2024, the per 
                        capita amount is the dollar amount determined 
                        under clause (ii) increased by an amount equal 
                        to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year, 
                                determined by substituting `calendar 
                                year 2023' for `calendar year 2016' in 
                                subparagraph (A)(ii) thereof.
                        Any amount increased under the preceding 
                        sentence which is not a multiple of 5 cents 
                        shall be rounded to the next lowest multiple of 
                        5 cents.
                    ``(I) Minimum amount.--For purposes of subparagraph 
                (C)(ii)(II), the minimum amount shall be determined as 
                follows:
                            ``(i) Calendar year 2023.--For calendar 
                        year, 2023, the minimum amount is $4,495,000.
                            ``(ii) Calendar year 2024.--For calendar 
                        year 2024, the minimum amount is the product 
                        of--
                                    ``(I) 1.25, and
                                    ``(II) the dollar amount under 
                                clause (i) increased by an amount equal 
                                to--
                                            ``(aa) such dollar amount, 
                                        multiplied by
                                            ``(bb) the cost-of-living 
                                        adjustment determined under 
                                        section 1(f)(3) for such 
                                        calendar year, determined by 
                                        substituting `calendar year 
                                        2022' for `calendar year 2016' 
                                        in subparagraph (A)(ii) 
                                        thereof.
                                If the amount determined after 
                                application of the preceding sentence 
                                is not a multiple of 5 cents, such 
                                amount shall be rounded to the next 
                                lowest multiple of 5 cents.
                            ``(iii) Calendar years after 2024.--In the 
                        case of any calendar year after 2024, the 
                        minimum amount is the dollar amount determined 
                        under clause (ii) increased by an amount equal 
                        to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year, 
                                determined by substituting `calendar 
                                year 2023' for `calendar year 2016' in 
                                subparagraph (A)(ii) thereof.
                        Any amount increased under the preceding 
                        sentence which is not a multiple of $5,000 
                        shall be rounded to the next lowest multiple of 
                        $5,000.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years beginning after December 31, 2022.

            TITLE II--REFORMS RELATING TO TENANT ELIGIBILITY

SEC. 201. AVERAGE INCOME TEST APPLICABILITY TO EXEMPT FACILITY BONDS.

    (a) In General.--Paragraph (1) of section 142(d) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``(A) or (B)'' and inserting ``(A), (B), or 
        (C)'', and
            (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Average income test.--A project meets the 
                requirements of this subparagraph if it meets the 
                minimum requirements of section 42(g)(1)(C).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to elections made under section 142(d)(1) of the Internal Revenue 
Code of 1986 after March 23, 2018.

SEC. 202. CODIFICATION OF RULES RELATING TO INCREASED TENANT INCOME.

    (a) In General.--Clause (i) of section 42(g)(2)(D) of the Internal 
Revenue Code of 1986 is amended by striking ``clauses (ii), (iii), and 
(iv)'' and all that follows and inserting ``clauses (ii), (iii), (iv), 
and (vi), notwithstanding an increase in the income of the occupants 
above the income limitation applicable under paragraph (1)--
                                    ``(I) a low-income unit shall 
                                continue to be treated as a low-income 
                                unit if the income of such occupants 
                                initially was 60 percent or less of 
                                area median gross income and such unit 
                                continues to be rent-restricted, and
                                    ``(II) a unit to which, at the time 
                                of initial occupancy by such occupants, 
                                any Federal, State, or local government 
                                income restriction applied, and which 
                                subsequently becomes part of a building 
                                with respect to which rehabilitation 
                                expenditures are taken into account 
                                under subsection (e), shall be treated 
                                as a low-income unit if the income of 
                                such occupants initially was 60 percent 
                                or less of area median gross income and 
                                does not exceed 120 percent of area 
                                median gross income as of the date of 
                                acquisition of the property by the 
                                taxpayer.''.
    (b) Exception.--Subparagraph (D) of section 42(g)(2) of the 
Internal Revenue Code of 1986, as amended by this Act, is further 
amended by adding at the end the following new clause:
                            ``(vi) Exception to rule relating to 
                        increased tenant income.--In the case of an 
                        occupant of a low-income unit who initially 
                        qualified to occupy such unit by reason of 
                        paragraph (1)(C) with an income in excess of 60 
                        percent of area median gross income but not in 
                        excess of 80 percent of area median gross 
                        income, clause (i) shall be applied for 
                        substituting `80 percent' for `60 percent' each 
                        place it appears.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2022.

SEC. 203. MODIFICATION OF STUDENT OCCUPANCY RULES.

    (a) In General.--Subparagraph (D) of section 42(i)(3) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(D) Rules relating to students.--
                            ``(i) In general.--A unit occupied solely 
                        by individuals who--
                                    ``(I) have not attained age 24, and
                                    ``(II) are enrolled in a full-time 
                                course of study at an institution of 
                                higher education (as defined in section 
                                3304(f)),
                        shall not be treated as a low-income unit.
                            ``(ii) Exception for certain federal 
                        programs.--In the case of a federally-assisted 
                        building (as defined in subsection 
                        (d)(6)(C)(i)), clause (i) shall not apply to a 
                        unit all of the occupants of which meet all 
                        applicable requirements under the housing 
                        program described in such subsection through 
                        which the building is assisted, financed, or 
                        operated.
                            ``(iii) Other exceptions.--An individual 
                        shall not be treated as described in clause (i) 
                        if the individual meets the income limitation 
                        applicable under subsection (g)(1) to the 
                        project of which the building is a part and--
                                    ``(I) is married,
                                    ``(II) is a person with 
                                disabilities (as defined in section 
                                3(b)(3)(E) of the United States Housing 
                                Act of 1937),
                                    ``(III) is a veteran (as defined in 
                                section 101(2) of title 38, United 
                                States Code),
                                    ``(IV) has 1 or more qualifying 
                                children (as defined in section 
                                152(c)),
                                    ``(V) is or has been a victim or 
                                threatened victim of domestic violence, 
                                dating violence, sexual assault, or 
                                stalking (as defined in section 40002 
                                of the Violence Against Women Act of 
                                1994),
                                    ``(VI) is or has been a victim of 
                                any form of human trafficking, or
                                    ``(VII) is, or was prior to 
                                attaining the age of majority--
                                            ``(aa) an emancipated minor 
                                        or in legal guardianship as 
                                        determined by a court of 
                                        competent jurisdiction in the 
                                        individual's State of legal 
                                        residence,
                                            ``(bb) under the care and 
                                        placement responsibility of the 
                                        State agency responsible for 
                                        administering a plan under part 
                                        B or part E of title IV of the 
                                        Social Security Act, or
                                            ``(cc) an unaccompanied 
                                        youth (within the meaning of 
                                        section 725(6) of the McKinney-
                                        Vento Homeless Assistance Act 
                                        (42 U.S.C. 11434a(6))) or a 
                                        homeless child or youth (within 
                                        the meaning of section 725(2) 
                                        of such Act (42 U.S.C. 
                                        11434a(2))).
                                For purposes of subclause (VI), an 
                                individual is or has been a victim of 
                                human trafficking if such individual 
                                was subjected to an act or practice 
                                described in paragraph (11) or (12) of 
                                section 103 of the Trafficking Victims 
                                Protection Act of 2000.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2023.

SEC. 204. TENANT VOUCHER PAYMENTS TAKEN INTO ACCOUNT AS RENT FOR 
              CERTAIN PURPOSES.

    (a) In General.--Subparagraph (B) of section 42(g)(2) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new sentence: ``In the case of a project with respect to 
which the taxpayer elects the requirements of subparagraph (C) of 
paragraph (1), or the portion of a project to which subsection 
(d)(5)(C) applies, clause (i) shall not apply with respect to any 
tenant-based assistance (as defined in section 8(f)(7) of the United 
States Housing Act of 1937 (42 U.S.C. 1437f(f)(7))).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to rent paid in taxable years beginning after December 31, 2023.

SEC. 205. REQUIREMENT THAT LOW-INCOME HOUSING CREDIT-SUPPORTED HOUSING 
              PROTECT VICTIMS OF DOMESTIC ABUSE.

    (a) In General.--Subparagraph (B) of section 42(h)(6) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (v), by striking the period at the end of clause (vi) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(vii) which--
                                    ``(I) prohibits the refusal to 
                                lease to, or termination of a lease by, 
                                a person solely on the basis of 
                                criminal activity directly relating to 
                                domestic violence, dating violence, 
                                sexual assault, or stalking that is 
                                engaged in by a member of the household 
                                of the tenant or any guest or other 
                                person under the control of the tenant, 
                                if the tenant or an affiliated 
                                individual of the tenant is the victim 
                                or threatened victim of such domestic 
                                violence, dating violence, sexual 
                                assault, or stalking, and
                                    ``(II) allows prospective, present, 
                                or former occupants of the building the 
                                right to enforce in any State court the 
                                prohibition of subclause (I).''.
    (b) Bifurcation.--
            (1) In general.--Subparagraph (B) of section 42(h)(6) of 
        the Internal Revenue Code of 1986, as amended by subsection 
        (a), is further amended by adding at the end the following new 
        flush sentence:
                ``For purposes of clause (vii)(I), rules similar to the 
                rules of section 41411(b)(3)(B) of the Violence Against 
                Women Act of 1994 shall apply with respect to the owner 
                or manager of a building.''.
            (2) Effect of bifurcation.--Paragraph (2) of section 42(g) 
        of such Code is amended by adding at the end the following new 
        subparagraph:
                    ``(F) Treatment of bifurcation in cases of domestic 
                violence.--In any case in which--
                            ``(i) an occupant is evicted or removed 
                        from a low-income unit because such occupant 
                        has engaged in criminal activity directly 
                        relating to domestic violence, dating violence, 
                        sexual assault, or stalking against an 
                        affiliated individual or other individual on 
                        the basis of criminal activity directly 
                        relating to domestic violence, dating violence, 
                        sexual assault, or stalking, and
                            ``(ii) the lease on such unit is bifurcated 
                        as provided in the last sentence of subsection 
                        (h)(6)(B),
                then the remaining occupants of such low-income unit 
                shall not be treated as a new tenant for purposes of 
                this section.''.
    (c) Clarification of General Public Use Requirement.--Paragraph (9) 
of section 42(g) of the Internal Revenue Code of 1986 is amended by 
striking ``or'' at the end of subparagraph (B), by striking the period 
at the end of subparagraph (C) and inserting ``, or'', and by adding at 
the end the following new subparagraph:
                    ``(D) who are victims or threatened victims of 
                criminal activity directly relating to domestic 
                violence, dating violence, sexual assault, or 
                stalking.''.
    (d) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to agreements 
        executed or modified on or after the date that is 30 days after 
        the date of the enactment of this Act.
            (2) Public use requirement.--The amendments made by 
        subsection (c) shall apply to buildings placed in service 
        before, on, or after the date of the enactment of this Act.

SEC. 206. CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT RELATING TO 
              VETERANS, ETC.

    (a) In General.--Paragraph (9) of section 42(g) of the Internal 
Revenue Code of 1986, as amended by section 205, is further amended by 
adding at the end the following flush language:
        ``Any veteran of the Armed Forces shall be treated as a member 
        of a specified group under a Federal program for purposes of 
        subparagraph (B).''.
    (b) Qualified Residential Rental Projects.--Paragraph (2) of 
section 142(d) of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subparagraph:
                    ``(F) Clarification of general public use 
                requirement.--A unit shall not fail to meet the general 
                public use requirement solely because of occupancy 
                restrictions or preferences, if such restrictions or 
                preferences meet the general public use requirement of 
                section 42.''.
    (c) Effective Dates.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply to buildings placed in service before, on, or after the 
        date of the enactment of this Act.
            (2) Qualified residential rental projects.--The amendment 
        made by subsection (b) shall apply to bonds issued before, on, 
        or after the date of the enactment of this Act.

   TITLE III--RULES RELATING TO CREDIT ELIGIBILITY AND DETERMINATION

SEC. 301. RECONSTRUCTION OR REPLACEMENT PERIOD AFTER CASUALTY LOSS.

    (a) No Recapture Following Casualty Loss.--Subparagraph (E) of 
section 42(j)(4) of the Internal Revenue Code of 1986 is amended to 
read as follows:
                    ``(E) No recapture by reason of casualty loss.--
                            ``(i) In general.--The increase in tax 
                        under this subsection shall not apply to a 
                        reduction in qualified basis by reason of a 
                        casualty loss to the extent such loss is 
                        restored by reconstruction or replacement 
                        within a reasonable period established by the 
                        applicable housing credit agency, not to exceed 
                        25 months from the date on which the qualified 
                        casualty loss arises.
                            ``(ii) Qualified casualty losses.--In the 
                        case of a qualified casualty loss, the period 
                        described in clause (i) may be extended, but 
                        not in excess of 12 months, if the applicable 
                        housing credit agency determines the qualified 
                        casualty arose by reason of an event which was 
                        not discrete to the building and which made a 
                        reconstruction or replacement within 25 months 
                        impractical. In the event the applicable 
                        housing credit agency determines a period in 
                        excess of 25 months is necessary for such 
                        reconstruction or replacement, the compliance 
                        period shall be increased by any such 
                        additional time.
                            ``(iii) Application.--The determination 
                        under paragraph (1) shall not be made with 
                        respect to a property the basis of which is 
                        affected by a qualified casualty loss until the 
                        period described in clause (i) (as modified by 
                        clause (ii), if applicable) with respect to 
                        such property has expired.
                            ``(iv) Qualified casualty loss.--For 
                        purposes of this subparagraph, the term 
                        `qualified casualty loss' means a casualty loss 
                        that is the result of a Federally declared 
                        disaster (as defined in section 165(i)(5)).''.
    (b) Qualified Basis Following Casualty Loss.--Paragraph (1) of 
section 42(c) of the Internal Revenue Code of 1986 is amended by adding 
at the end the following new subparagraph:
                    ``(F) Qualified basis following casualty loss.--If 
                a casualty causes the qualified basis of a building in 
                any year to be less than the qualified basis in the 
                immediately preceding year then, in the year of such 
                casualty and each succeeding year until such building 
                or the units affected by the casualty are reconstructed 
                or replaced (but only through the last year of the 
                period permitted for reconstruction or replacement 
                under subsection (j)(4)(E))--
                            ``(i) the qualified basis of such building 
                        shall be equal to the qualified basis of such 
                        building as of the last day of the year 
                        preceding the year in which such casualty 
                        occurred,
                            ``(ii) if such building is not 
                        reconstructed or replaced by the expiration of 
                        the applicable period for such reconstruction 
                        or replacement under subsection (j)(4), then 
                        the recapture amount provided for in subsection 
                        (j)(1) shall include the amount of any credit 
                        claimed under this section by reason of the 
                        application of clause (i), and
                            ``(iii) a building which was a qualified 
                        low-income building as of the last day of the 
                        year preceding the year in which such casualty 
                        occurred shall not cease to be a qualified low-
                        income building solely because of such 
                        casualty.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to casualties occurring after the date which is 25 months before 
the date of the enactment of this Act.

SEC. 302. MODIFICATION OF PREVIOUS OWNERSHIP RULES; LIMITATION ON 
              ACQUISITION BASIS.

    (a) In General.--Clause (ii) of section 42(d)(2)(B) of the Internal 
Revenue Code of 1986 is amended by inserting ``, or the taxpayer elects 
the application of subparagraph (C)(ii)'' after ``service''.
    (b) Limitation on Acquisition Basis.--Subparagraph (C) of section 
42(d)(2) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``For purposes of subparagraph (A), the 
        adjusted basis'' and inserting ``For purposes of subparagraph 
        (A)--
                            ``(i) In general.--The adjusted basis'', 
                        and
            (2) by adding at the end the following new clauses:
                            ``(ii) Buildings in service within previous 
                        10 years.--If the period between the date of 
                        acquisition of the building by the taxpayer and 
                        the date the building was last placed in 
                        service is less than 10 years, the taxpayer's 
                        basis attributable to the acquisition of the 
                        building which is taken into account in 
                        determining the adjusted basis shall not exceed 
                        the sum of--
                                    ``(I) the lowest amount paid for 
                                acquisition of the building by any 
                                person during the 10 years preceding 
                                the date of the acquisition of the 
                                building by the taxpayer, adjusted as 
                                provided in clause (iii), and
                                    ``(II) the value of any capital 
                                improvements made by the person who 
                                sells the building to the taxpayer 
                                which are reflected in such seller's 
                                basis.
                            ``(iii) Adjustment.--With respect to a 
                        basis determination made in any taxable year, 
                        the amount described in clause (ii)(I) shall be 
                        increased by an amount equal to--
                                    ``(I) such amount, multiplied by
                                    ``(II) a cost-of-living adjustment, 
                                determined in the same manner as under 
                                section 1(f)(3) for the calendar year 
                                in which the taxable year begins by 
                                taking into account the acquisition 
                                year in lieu of calendar year 1992.
                        For purposes of the preceding sentence, the 
                        acquisition year is the calendar year in which 
                        the lowest amount referenced in clause (ii)(I) 
                        was paid for the acquisition of the 
                        building.''.
    (c) Conforming Amendments.--Clause (i) of section 42(d)(2)(D) of 
the Internal Revenue Code of 1986 is amended--
            (1) by striking ``for subparagraph (b)'' in the heading, 
        and
            (2) by striking ``subparagraph (B)(ii)'' in the matter 
        preceding subclause (I) and inserting ``subparagraph (B)(ii) or 
        (C)(ii)''.
    (d) Modification of Placed in Service Rule.--Clause (iii) of 
section 42(d)(2)(B) of the Internal Revenue Code of 1986 is amended to 
read as follows:
                            ``(iii) the building was not owned by the 
                        taxpayer or by any person related (as of the 
                        date of acquisition by the taxpayer) to the 
                        taxpayer at any time during the 5-year period 
                        ending on the date of acquisition by the 
                        taxpayer, and''.
    (e) Effective Date.--The amendments made by this section shall 
apply to buildings placed in service after December 31, 2022.

SEC. 303. CERTAIN RELOCATION COSTS TAKEN INTO ACCOUNT AS REHABILITATION 
              EXPENDITURES.

    (a) In General.--Paragraph (2) of section 42(e) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Certain relocation costs.--In the case of a 
                rehabilitation of a building to which section 280B does 
                not apply, costs relating to the relocation of 
                occupants, including--
                            ``(i) amounts paid to occupants,
                            ``(ii) amounts paid to third parties for 
                        services relating to such relocation, and
                            ``(iii) amounts paid for temporary housing 
                        for occupants,
                shall be treated as chargeable to capital account and 
                taken into account as rehabilitation expenditures.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to expenditures paid or incurred after December 31, 2022.
    (c) No Inference.--Nothing in the amendment made by this section 
shall be construed to create any inference with respect to the 
treatment of relocation costs paid or incurred before December 31, 
2022.

SEC. 304. REPEAL OF QUALIFIED CENSUS TRACT POPULATION CAP.

    (a) In General.--Clause (ii) of section 42(d)(5)(B) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking subclauses (II) and (III), and
            (2) by striking ``Qualified census tract.--
                                    ``(I) In general.--The term'',
        and inserting ``Qualified census tract.--The term''.
    (b) Effective Date.--The amendments made by this section shall 
apply to designations of qualified census tracts under section 
42(d)(5)(B)(ii) of the Internal Revenue Code of 1986 after December 31, 
2023.

SEC. 305. DETERMINATION OF COMMUNITY REVITALIZATION PLAN TO BE MADE BY 
              HOUSING CREDIT AGENCY.

    (a) In General.--Subclause (III) of section 42(m)(1)(B)(ii) of the 
Internal Revenue Code of 1986 is amended by inserting ``, as determined 
by the housing credit agency according to criteria established by such 
agency,'' after ``(d)(5)(B)(ii)) and''.
    (b) Criteria.--Paragraph (1) of section 42(m) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(E) Criteria for determination relating to 
                concerted community revitalization plan.--For purposes 
                of subparagraph (B)(ii)(III), the criteria which shall 
                be established by a housing credit agency for 
                determining whether the development of a project 
                contributes to a concerted community development plan 
                shall take into account any factors the agency deems 
                appropriate, including the extent to which the proposed 
                plan--
                            ``(i) is geographically specific,
                            ``(ii) outlines a clear plan for 
                        implementation and goals for outcomes,
                            ``(iii) includes a strategy for applying 
                        for or obtaining commitments of public or 
                        private investment (or both) in nonhousing 
                        infrastructure, amenities, or services, and
                            ``(iv) demonstrates the need for community 
                        revitalization.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to allocations of housing credit dollar amounts made under 
qualified allocation plans (as defined in section 42(m)(1)(B) of the 
Internal Revenue Code of 1986) adopted after December 31, 2023.

SEC. 306. PROHIBITION OF LOCAL APPROVAL AND CONTRIBUTION REQUIREMENTS.

    (a) In General.--Paragraph (1) of section 42(m) of the Internal 
Revenue Code of 1986, as amended by section 305, is further amended--
            (1) by striking clause (ii) of subparagraph (A) and by 
        redesignating clauses (iii) and (iv) thereof as clauses (ii) 
        and (iii), and
            (2) by adding at the end the following new subparagraph:
                    ``(F) Local approval or contribution not taken into 
                account.--The selection criteria under a qualified 
                allocation plan shall not include consideration of--
                            ``(i) any support or opposition with 
                        respect to the project from local or elected 
                        officials, or
                            ``(ii) any local government contribution to 
                        the project, except to the extent such 
                        contribution is taken into account as part of a 
                        broader consideration of the project's ability 
                        to leverage outside funding sources, and is not 
                        prioritized over any other source of outside 
                        funding.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to allocations of housing credit dollar amounts made under 
qualified allocation plans (as defined in section 42(m)(1)(B) of the 
Internal Revenue Code of 1986) adopted after December 31, 2023.

SEC. 307. INCREASE IN CREDIT FOR CERTAIN PROJECTS DESIGNATED TO SERVE 
              EXTREMELY LOW-INCOME HOUSEHOLDS.

    (a) In General.--Paragraph (5) of section 42(d) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
subparagraph:
                    ``(C) Increase in credit for projects designated to 
                serve extremely low-income households.--In the case of 
                any building--
                            ``(i) 20 percent or more of the residential 
                        units (determined as if the imputed income 
                        limitation applicable to such units were 30 
                        percent of area median gross income) in which 
                        are designated by the taxpayer for occupancy by 
                        households the aggregate household income of 
                        which does not exceed the greater of--
                                    ``(I) 30 percent of area median 
                                gross income, or
                                    ``(II) 100 percent of an amount 
                                equal to the Federal poverty line 
                                (within the meaning of section 
                                36B(d)(3)), and
                            ``(ii) which is designated by the housing 
                        credit agency as requiring the increase in 
                        credit under this subparagraph in order for 
                        such building to be financially feasible as 
                        part of a qualified low-income housing project,
                subparagraph (B) shall not apply to the portion of such 
                building which is comprised of such units (determined 
                in a manner similar to the unit fraction under 
                subsection (c)(1)(C)), and the eligible basis of such 
                portion of the building shall be 150 percent of such 
                basis determined without regard to this 
                subparagraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to buildings which receive allocations of housing credit dollar amount 
after the date of enactment of this Act or, in the case of buildings 
financed as described in section 42(h)(4)(B) of the Internal Revenue 
Code of 1986, to buildings financed by obligations which are part of an 
issue the issue date of which is after December 31, 2023.

SEC. 308. INCREASE IN CREDIT FOR BOND-FINANCED PROJECTS DESIGNATED BY 
              STATE AGENCY.

    (a) In General.--Clause (v) of section 42(d)(5)(B) of the Internal 
Revenue Code of 1986 is amended by striking the second sentence.
    (b) Technical Amendment.--Clause (v) of section 42(d)(5)(B) of the 
Internal Revenue Code of 1986, as amended by subsection (a), is further 
amended--
            (1) by striking ``State'' in the heading, and
            (2) by striking ``State housing credit agency'' and 
        inserting ``housing credit agency''.
    (c) Effective Date.--The amendments made by this section shall 
apply to buildings described in section 42(h)(4)(B) of the Internal 
Revenue Code of 1986 which are financed by obligations which are part 
of an issue the issue date of which is after December 31, 2023.

SEC. 309. ELIMINATION OF BASIS REDUCTION FOR LOW-INCOME HOUSING 
              PROPERTIES ENERGY EFFICIENT COMMERCIAL BUILDING 
              DEDUCTION.

    (a) Energy Efficient Commercial Buildings Deduction.--Subsection 
(e) of section 179D of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``Reduction.--For purposes'' and inserting 
        ``Reduction.--
            ``(1) In general.--For purposes'', and
            (2) by adding at the end the following new paragraph:
            ``(2) Exception for affordable housing properties.--
        Paragraph (1) shall not apply for purposes of determining 
        eligible basis under section 42.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to buildings which receive allocations of housing credit dollar 
amount after the date of the enactment of this Act or, in the case of 
buildings financed as described in section 42(h)(4)(B) of the Internal 
Revenue Code of 1986, to buildings financed by obligations which are 
part of an issue the issue date of which is after December 31, 2023.

SEC. 310. RESTRICTION OF PLANNED FORECLOSURES.

    (a) In General.--Subclause (I) of section 42(h)(6)(E)(i) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                                    ``(I) on the 61st day after the 
                                taxpayer (or a successor in interest) 
                                provides notice to the Secretary and 
                                the housing credit agency that the 
                                building has been acquired by 
                                foreclosure (or instrument in lieu of 
                                foreclosure) and that the taxpayer 
                                intends the termination of such period, 
                                unless, before such date, the Secretary 
                                or the housing credit agency determines 
                                that such acquisition is part of an 
                                arrangement with the taxpayer a purpose 
                                of which is to terminate such period, 
                                or''.
    (b) Conforming Amendment.--The second sentence of clause (i) of 
section 42(h)(6)(E) of the Internal Revenue Code of 1986 is amended by 
striking ``Subclause (II)'' and inserting ``Subclauses (I) and (II)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to acquisitions by foreclosure (or instrument in lieu of 
foreclosure) after December 31, 2022.

SEC. 311. INCREASE OF POPULATION CAP FOR DIFFICULT DEVELOPMENT AREAS.

    (a) In General.--Subclause (II) of section 42(d)(5)(B)(iii) of the 
Internal Revenue Code of 1986 is amended by striking ``20 percent'' and 
inserting ``30 percent''.
    (b) Effective Date.--The amendment made by this section shall apply 
to designations made under section 42(d)(5)(B)(iii) of the Internal 
Revenue Code of 1986 after December 31, 2023.

SEC. 312. INCREASED COST OVERSIGHT AND ACCOUNTABILITY.

    (a) In General.--Subparagraph (C) of section 42(m)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (ix), by striking the period at the end of clause (x) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(xi) the reasonableness of the 
                        development costs of the project.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to allocations of credits under section 42 of the Internal 
Revenue Code of 1986 made after December 31, 2023.

SEC. 313. TAX-EXEMPT BOND FINANCING REQUIREMENT.

    (a) In General.--Subparagraph (B) of section 42(h)(4) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new sentence: ``In the case of buildings financed by an 
obligation first taken into account under section 146 in calendar years 
beginning after the date of the enactment of the Affordable Housing 
Credit Improvement Act of 2023, the preceding sentence shall be applied 
by substituting `25 percent' for `50 percent'.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to any building some portion of which, or of the land on which the 
building is located, is financed by an obligation which is described in 
section 42(h)(4)(A) of the Internal Revenue Code of 1986 and which is 
part of an issue the issue date of which is after December 31, 2023.

        TITLE IV--REFORMS RELATING TO NATIVE AMERICAN ASSISTANCE

SEC. 401. SELECTION CRITERIA UNDER QUALIFIED ALLOCATION PLANS.

    (a) In General.--Subparagraph (C) of section 42(m)(1) of the 
Internal Revenue Code of 1986, as amended by section 312, is further 
amended by striking ``and'' at the end of clause (x), by striking the 
period at the end of clause (xi) and inserting ``, and'', and by adding 
at the end the following new clause:
                            ``(xii) the affordable housing needs of 
                        individuals in the State who are--
                                    ``(I) enrolled members of a tribe 
                                with respect to an Indian tribal 
                                government (including any agencies or 
                                instrumentalities of an Indian tribal 
                                government and any Alaska Native 
                                regional or village corporation, as 
                                defined in, or established pursuant to, 
                                the Alaska Native Claims Settlement Act 
                                (43 U.S.C. 1601 et seq.), or
                                    ``(II) described in section 801(9) 
                                of the Native American Housing 
                                Assistance and Self-Determination Act 
                                of 1996 (25 U.S.C. 4221(9)).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to allocations of credits under section 42 of the Internal 
Revenue Code of 1986 made after December 31, 2023.

SEC. 402. INCLUSION OF INDIAN AREAS AS DIFFICULT DEVELOPMENT AREAS FOR 
              PURPOSES OF CERTAIN BUILDINGS.

    (a) In General.--Subclause (I) of section 42(d)(5)(B)(iii) of the 
Internal Revenue Code of 1986 is amended by inserting before the period 
the following: ``, and any Indian area''.
    (b) Indian Area.--Clause (iii) of section 42(d)(5)(B) of the 
Internal Revenue Code of 1986 is amended by redesignating subclause 
(II) as subclause (III) and by inserting after subclause (I) the 
following new subclause:
                                    ``(II) Indian area.--For purposes 
                                of subclause (I), the term `Indian 
                                area' means any Indian area (as defined 
                                in section 4(11) of the Native American 
                                Housing Assistance and Self 
                                Determination Act of 1996 (25 U.S.C. 
                                4103(11))) and any housing area (as 
                                defined in section 801(5) of such Act 
                                (25 U.S.C. 4221(5))).''.
    (c) Eligible Buildings.--Clause (iii) of section 42(d)(5)(B) of the 
Internal Revenue Code of 1986, as amended by subsection (b), is further 
amended by adding at the end the following new subclause:
                                    ``(IV) Special rule for buildings 
                                in indian areas.--In the case of an 
                                area which is a difficult development 
                                area solely because it is an Indian 
                                area, a building shall not be treated 
                                as located in such area unless such 
                                building is assisted or financed under 
                                the Native American Housing Assistance 
                                and Self Determination Act of 1996 (25 
                                U.S.C. 4101 et seq.) or the project 
                                sponsor is an Indian tribe (as defined 
                                in section 45A(c)(6)), a tribally 
                                designated housing entity (as defined 
                                in section 4(22) of such Act (25 U.S.C. 
                                4103(22))), or wholly owned or 
                                controlled by such an Indian tribe or 
                                tribally designated housing entity.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to buildings placed in service after December 31, 2023.

             TITLE V--REFORMS RELATING TO RURAL ASSISTANCE

SEC. 501. INCLUSION OF RURAL AREAS AS DIFFICULT DEVELOPMENT AREAS.

    (a) In General.--Subclause (I) of section 42(d)(5)(B)(iii) of the 
Internal Revenue Code of 1986, as amended by section 402, is further 
amended by inserting ``, any rural area'' after ``median gross 
income''.
    (b) Rural Area.--Clause (iii) of section 42(d)(5)(B) of the 
Internal Revenue Code of 1986, as amended by section 402, is further 
amended by redesignating subclause (III) as subclause (IV) and by 
inserting after subclause (II) the following new subclause:
                                    ``(III) Rural area.--For purposes 
                                of subclause (I), the term `rural area' 
                                means any non-metropolitan area, or any 
                                rural area as defined by section 520 of 
                                the Housing Act of 1949, which is 
                                identified by the qualified allocation 
                                plan under subsection (m)(1)(B).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to buildings placed in service after December 31, 2023.

SEC. 502. UNIFORM INCOME ELIGIBILITY FOR RURAL PROJECTS.

    (a) In General.--Paragraph (8) of section 42(i) of the Internal 
Revenue Code of 1986 is amended by striking the second sentence.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2022.

                    TITLE VI--EXEMPT FACILITY BONDS

SEC. 601. REVISION AND CLARIFICATION OF THE TREATMENT OF REFUNDING 
              ISSUES.

    (a) In General.--Subparagraph (A) of section 146(i)(6) of the 
Internal Revenue Code of 1986 is amended to read as follows:
                    ``(A) In general.--During the 12-month period 
                beginning on the date of a repayment of a loan financed 
                by an issue 95 percent or more of the net proceeds of 
                which are used to provide projects described in section 
                142(d), if such repayment is used to provide a new loan 
                for any project described in section 142(a)(7) or for 
                any purpose described in subsection (a)(2)(A) or (b) of 
                section 143, any bond which is issued to refinance such 
                issue shall be treated as a refunding issue. Any issue 
                treated as a refunding issue by reason of the preceding 
                sentence shall be so treated only to the extent the 
                principal amount of such refunding issue does not 
                exceed the principal amount of the bonds refunded.''.
    (b) Removal of One-Refunding Limit.--Subparagraph (B) of section 
146(i)(6) of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``4 years'' in clause (i) and inserting 
        ``10 years'',
            (2) by striking ``was issued'' in clause (ii) and inserting 
        ``is issued'',
            (3) by redesignating clauses (i) (as so amended), (ii) (as 
        so amended), and (iii) as subclauses (I), (II), and (III), 
        respectively, and by moving such subclauses 2 ems to the right,
            (4) by striking ``Limitations.--Subparagraph (A) shall 
        apply to only one refunding of the original issue and'' and 
        inserting ``Limitations.--
                            ``(i) In general.--Subparagraph (A) shall 
                        apply to a bond'', and
            (5) by adding at the end the following new clause:
                            ``(ii) Source of loan repayment.--
                        Subparagraph (A) shall not apply to any 
                        repayment of a loan which is--
                                    ``(I) made by a repayment of 
                                another loan, or
                                    ``(II) financed by an issue treated 
                                as a refunding issue under subparagraph 
                                (A).''.
    (c) Conforming Amendment.--The heading of paragraph (6) of section 
146(i) of the Internal Revenue Code of 1986 is amended by striking 
``residential rental project bonds as refunding bonds irrespective of 
obligor'' and inserting ``bonds as refunding bonds''.
    (d) Effective Dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (c) shall apply to bonds issued on or after the date of the 
        enactment of this Act.
            (2) Removal of one-refunding limit.--The amendments made by 
        subsection (b) shall apply to repayments of loans received 
        after July 30, 2008.

                TITLE VII--AFFORDABLE HOUSING TAX CREDIT

SEC. 701. AFFORDABLE HOUSING TAX CREDIT.

    (a) In General.--The heading of section 42 of the Internal Revenue 
Code of 1986 is amended by striking ``low-income'' and inserting 
``affordable''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 42 of the Internal Revenue 
        Code of 1986 is amended by striking ``low-income'' and 
        inserting ``affordable''.
            (2) Paragraph (5) of section 38(b) of such Code is amended 
        by striking ``low-income'' and inserting ``affordable''.
            (3) The heading of subparagraph (D) of section 469(i)(3) of 
        such Code is amended by striking ``low-income'' and inserting 
        ``affordable''.
            (4) The heading of subparagraph (B) of section 469(i)(6) of 
        such Code is amended by striking ``low-income'' and inserting 
        ``affordable''.
            (5) Paragraph (7) of section 772(a) of such Code is amended 
        by striking ``low-income'' and inserting ``affordable''.
            (6) Paragraph (5) of section 772(d) of such Code is amended 
        by striking ``low-income'' and inserting ``affordable''.
    (c) Clerical Amendment.--The item relating to section 42 in the 
table of sections for subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended to read as follows:

``Sec. 42. Affordable housing credit.''.

                   TITLE VIII--DATA AND TRANSPARENCY

SEC. 801. SENSE OF CONGRESS.

    (a) Transparency.--It is the sense of Congress that in addition to 
expanding and strengthening the affordable housing credit through the 
provisions in the Affordable Housing Credit Improvement Act of 2023, 
subsequent steps should also be taken to share data and identify other 
ways to increase the transparency of the program, and the House of 
Representatives and the Senate should work together with Federal 
agencies to identify data sources that can be shared.
    (b) Discriminatory Land Use Policies.--It is the Sense of Congress 
that action should be taken to discourage the use of discriminatory 
land use policies and remove barriers to making housing more affordable 
to further the original intent of the affordable housing credit 
program. The House and Senate should work together to develop 
incentives within the affordable housing credit program to encourage 
states and localities to remove or reform burdensome land use and 
zoning regulations and facilitate the adoption or continuation of 
inclusive land use and zoning policies to increase housing supply and 
affordability.
                                 &lt;all&gt;
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