I 
108TH CONGRESS 
1ST SESSION H. R. 3485
To amend the Internal Revenue Code of 1986 to provide an incentive to 
preserve affordable housing in multifamily housing units which are sold 
or exchanged. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 12, 2003
Mr. RAMSTAD (for himself and Mr. CARDIN) 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 provide 
an incentive to preserve affordable housing in multifamily 
housing units which are sold or exchanged.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Affordable Housing 
Preservation Tax Relief Act of 2003’’. 
SEC. 2. AFFORDABLE HOUSING PRESERVATION CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by 
inserting after section 42 the following new section: 
‘‘SEC. 42A. AFFORDABLE HOUSING PRESERVATION CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
the affordable housing preservation credit determined 
under this section for the taxable year is an amount equal 
to the preservation allocation amount for the taxable year. 
‘‘(b) LIMITATIONS.—The amount allowed as a credit 
to a taxpayer under subsection (a) with respect to a quali-
fied preservation sale shall not exceed the gain recognized 
by the taxpayer from such sale. 
‘‘(c) PRESERVATION ALLOCATION AMOUNT.—For 
purposes of subsection (a)—
‘‘(1) IN GENERAL.—The term ‘preservation al-
location amount’ means the amount allocated to the 
taxpayer from a qualified preservation sale by a 
housing credit agency. 
‘‘(2) LIMITATION.—The amount allocated under 
paragraph (1) shall not exceed the excess of—
‘‘(A) the product of—
‘‘(i) the maximum rate tax under sec-
tion 1 in the case of an individual or sec-
tion 11 in the case of a corporation, multi-
plied by
‘‘(ii) the gain recognized by the tax-
payer from the qualified preservation sale, 
over 
‘‘(B) the amount of cash or the fair mar-
ket value of other property received by the tax-
payer with respect to the sale. 
‘‘(d) QUALIFIED PRESERVATION SALE.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The term ‘qualified preser-
vation sale’ means a sale of eligible multifamily 
housing property to or an exchange of such property 
with a preservation entity which agrees to maintain 
affordability and use restrictions regarding the prop-
erty that are—
‘‘(A) for a term of not less than the ex-
tended use period, 
‘‘(B) legally enforceable, and 
‘‘(C) consistent with the long-term physical 
and financial viability and character of such 
housing as affordable housing. 
Such restrictions shall be binding on all successors 
of the preservation entity and shall be recorded as 
a restrictive covenant on the property pursuant to 
State law.
‘‘(2) ELIGIBLE MULTIFAMILY HOUSING PROP-
ERTY.—The term ‘eligible multifamily housing prop-
erty’ means—
‘‘(A) 
property 
assisted 
under 
section 
221(d)(3) or section 236 of the National Hous-
ing Act and with respect to which the owner is 
subject to the restrictions described in section 
1039(b)(1)(B) of such Act (as in effect on the 
day before the date of the enactment of the 
Revenue Reconciliation Act of 1990), 
‘‘(B) 
property 
described 
in 
section 
512(2)(B) of the Multifamily Assisted Housing 
Reform and Affordability Act of 1997 (42 
U.S.C. 1437f note), 
‘‘(C) property with respect to which a loan 
is made or insured under title V of the Housing 
Act of 1949, and 
‘‘(D) property that either received an allo-
cation of low-income housing tax credit pursu-
ant to paragraph (1) of section 42(h) or was 
exempted from such paragraph by paragraph 
(4) of such section. 
‘‘(3) AFFORDABLE
HOUSING.—The term ‘af-
fordable housing’ means housing which is a qualified
low-income housing project (as defined in section 
42(g)). 
‘‘(4) EXTENDED USE PERIOD.—The term ‘ex-
tended use period’ means the period beginning on 
the date of sale and ending on the earlier of—
‘‘(A) 30 years after the close of the sale, 
or 
‘‘(B) the date that the property is acquired 
by foreclosure (or instrument in lieu of fore-
closure). 
Subparagraph (B) shall not apply if the Secretary 
determines that the acquisition described therein is 
part of an arrangement with the owner a purpose of 
which is to terminate the extended use period. 
‘‘(5) PRESERVATION ENTITY.—The term ‘pres-
ervation entity’ means a housing credit agency or an 
organization approved by a housing credit agency 
that has the capacity and commitment to success-
fully acquire and preserve eligible multifamily hous-
ing property. Such preservation entity shall be inde-
pendent from the seller partnership or its affiliates. 
‘‘(e) ALLOCATION BY HOUSING CREDIT AGENCY.—
For purposes of this section—
‘‘(1) IN GENERAL.—The aggregate preservation 
credit dollar amount which a housing credit agency