I 
111TH CONGRESS 
2D SESSION 
H. R. 4687 
To provide grants to States for low-income housing projects in lieu of low- 
income housing credits. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 24, 2010 
Ms. LINDA T. SA´NCHEZ of California introduced the following bill; which was 
referred to the Committee on Financial Services, and in addition to the 
Committee on Ways and Means, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To provide grants to States for low-income housing projects 
in lieu of low-income housing credits. 
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 ‘‘Low Income Housing 
Tax Credit Exchange Expansion and Job Creation Act of 
2010’’. 
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SEC. 2. GRANTS TO STATES FOR LOW-INCOME HOUSING 
PROJECTS IN LIEU OF LOW-INCOME HOUS-
ING CREDIT ALLOCATIONS FOR 2010. 
(a) IN GENERAL.—The Secretary of the Treasury 
shall make a grant to the housing credit agency of each 
State in an amount equal to such State’s low-income hous-
ing credit allocation election amount. 
(b) LOW-INCOME HOUSING CREDIT ALLOCATION 
ELECTION AMOUNT.—For purposes of this section, the 
term ‘‘low-income housing credit allocation election 
amount’’ means, with respect to any State, such amount 
as the State may elect which does not exceed 85 percent 
of the product of— 
(1) the sum of— 
(A) 100 percent of the State housing credit 
ceiling for 2010 which is attributable to 
amounts described in clauses (i) and (iii) of sec-
tion 42(h)(3)(C) of the Internal Revenue Code 
of 1986, plus 
(B) 40 percent of the State housing credit 
ceiling for 2010 which is attributable to 
amounts described in clauses (ii) and (iv) of 
such section, multiplied by 
(2) 10. 
(c) SUBAWARDS FOR LOW-INCOME BUILDINGS.— 
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(1) IN GENERAL.—A State housing credit agen-
cy receiving a grant under this section shall use such 
grant to make subawards to finance the construction 
or acquisition and rehabilitation of qualified low-in-
come buildings. A subaward under this section may 
be made to finance a qualified low-income building 
with or without an allocation under section 42 of the 
Internal Revenue Code of 1986, except that a State 
housing credit agency may make subawards to fi-
nance qualified low-income buildings without an allo-
cation only if it makes a determination that such use 
will increase the total funds available to the State to 
build and rehabilitate affordable housing. In com-
plying with such determination requirement, a State 
housing credit agency shall establish a process in 
which applicants that are allocated credits are re-
quired to demonstrate good faith efforts to obtain 
investment commitments for such credits before the 
agency makes such subawards. 
(2) SUBAWARDS SUBJECT TO SAME REQUIRE-
MENTS AS LOW-INCOME HOUSING CREDIT ALLOCA-
TIONS.—Any such subaward with respect to any 
qualified low-income building may be in the form of 
a grant or a loan of any duration and shall be made 
in the same manner and shall be subject to the same 
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limitations (including rent, income, and use restric-
tions on such building) as an allocation of housing 
credit dollar amount allocated by such State housing 
credit agency under section 42 of the Internal Rev-
enue Code of 1986, except that such subawards shall 
not be limited by, or otherwise affect (except as pro-
vided in subsection (i)(9) of such section), the State 
housing credit ceiling applicable to such agency. 
(3) COMPLIANCE AND ASSET MANAGEMENT.— 
The State housing credit agency shall perform asset 
management functions to ensure compliance with 
section 42 of the Internal Revenue Code of 1986 
and the long-term viability of buildings funded by 
any subaward under this section. The State housing 
credit agency may collect reasonable fees from a 
subaward recipient to cover expenses associated with 
the performance of its duties under this paragraph, 
including the reasonable costs of administering such 
subawards. The State housing credit agency may re-
tain an agent or other private contractor to satisfy 
the requirements of this paragraph. 
(4) RECAPTURE.—The State housing credit 
agency shall impose conditions or restrictions, in-
cluding a requirement providing for recapture, on 
any subaward under this section so as to assure that 
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the building with respect to which such subaward is 
made remains a qualified low-income building during 
the compliance period. Any amounts of recapture 
shall be proportional to the length of time of the 
noncompliance compared to the 15-year compliance 
period and the percentage of qualified basis out of 
compliance compared to the total qualified basis. 
Any such recapture shall be payable to the Secretary 
of the Treasury for deposit in the general fund of 
the Treasury and may be enforced by means of liens 
or such other methods as the Secretary of the Treas-
ury determines appropriate. A State housing credit 
agency may subordinate any such lien (or other se-
curity interest) to other loans made by third parties. 
(d) RETURN OF UNUSED GRANT FUNDS.—Any grant 
funds not used to make subawards under this section be-
fore January 1, 2012, shall be returned to the Secretary 
of the Treasury on such date. The portion of any 
subaward which is not disbursed before such date shall 
be returned to the Secretary of the Treasury on such date 
unless the subawardee has paid or incurred before Janu-
ary 1, 2012, at least 30 percent of the subawardee’s total 
adjusted basis in land and depreciable property that is 
reasonably expected to be part of the low-income housing 
building with respect to which such subaward is made. 
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(b) 
LOW-INCOME
BOND-SUBSIDIZED
HOUSING 
ELECTION AMOUNT.—For purposes of this section— 
(1) IN GENERAL.—The term ‘‘low-income bond- 
subsidized housing election amount’’ means, with re-
spect to any State, such amount as the State may 
elect which does not exceed 85 percent of the State’s 
bond-subsidized credit amount. 
(2) BOND-SUBSIDIZED CREDIT AMOUNT.—The 
term ‘‘bond-subsidized credit amount’’ means, with 
respect to any State, the aggregate amount of low- 
income housing credits which the State determines 
would, but for section 42(i)(9) of the Internal Rev-
enue Code of 1986, be awarded under section 
42(h)(4)(B) of such Code times 10 with respect to 
qualified low-income buildings receiving an allocation 
of qualified residential rental project bonds of such 
State during 2010. 
(3) QUALIFIED RESIDENTIAL RENTAL PROJECT 
BONDS.—The term ‘‘qualified residential rental 
project bond’’ means, with respect to any State, any 
qualified bond (as defined in section 141(e) of the 
Internal Revenue Code of 1986) if such bond— 
(A) is issued as part of an issue 95 percent 
or more of the net proceeds of which are to be 
used to provide qualified residential rental 
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projects (within the meaning of section 142 of 
such Code), and 
(B) is taken into account under section 
146 of such Code with respect to the State ceil-
ing applicable to such State. 
(c) SUBAWARDS FOR LOW-INCOME BUILDINGS.— 
(1) IN GENERAL.—A State receiving a grant 
under this section shall use such grant to make sub-
awards to finance the construction or acquisition 
and rehabilitation of qualified low-income buildings 
which have received the corresponding allocation of 
qualified residential rental project bonds referred to 
in subsection (b)(2). 
(2) SUBAWARDS SUBJECT TO SAME REQUIRE-
MENTS AS LOW-INCOME HOUSING CREDIT ALLOCA-
TIONS.—Any such subaward with respect to any 
qualified low-income building may be in the form of 
a grant or a loan of any duration and shall be made 
in the same manner and shall be subject to the same 
limitations (including rent, income, and use restric-
tions on such building) as an allocation of housing 
credit dollar amount allocated by the State housing 
credit agency of such State under section 42 of the 
Internal Revenue Code of 1986, except that such 
subawards shall not be limited by, or otherwise af-
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fect, the State housing credit ceiling applicable to 
such agency. 
(3) COMPLIANCE AND ASSET MANAGEMENT.—A 
State receiving a grant under this section shall per-
form asset management functions to ensure compli-
ance with section 42 of the Internal Revenue Code 
of 1986 and the long-term viability of buildings 
funded by any subaward under this section. A State 
may collect reasonable fees from a subaward recipi-
ent to cover expenses associated with the perform-
ance of its duties under this paragraph, including 
the reasonable costs of administering such sub-
awards. A State may retain an agent or other pri-
vate contractor to satisfy the requirements of this 
paragraph. 
(4) RECAPTURE.—A State receiving a grant 
under this section shall impose conditions or restric-
tions, including a requirement providing for recap-
ture, on any subaward under this section so as to 
assure that the building with respect to which such 
subaward is made remains a qualified low-income 
building during the compliance period. Any amounts 
of recapture shall be proportional to the length of 
time of the noncompliance compared to the 15-year 
compliance period and the percentage of qualified 
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basis out of compliance compared to the total quali-
fied basis. Any such recapture shall be payable to 
the Secretary of the Treasury for deposit in the gen-
eral fund of the Treasury and may be enforced by 
means of liens or such other methods as the Sec-
retary of the Treasury determines appropriate. A 
State housing credit agency may subordinate any 
such lien (or other security interest) to other loans 
made by third parties. 
(d) REALLOCATION OF BOND AUTHORITY.—A State 
housing credit agency shall establish a process in which 
applicants that are allocated bonds and receive a subaward 
pursuant to subsection (c) are required to demonstrate 
good faith efforts to obtain purchasers for such bonds. If 
a subawardee is unable to obtain purchasers or if the State 
makes a determination that reallocation of bond authority 
will increase the total funds available to the State to build 
and rehabilitate affordable housing, a subawardee may re-
turn its bond allocation to the State without affecting its 
subaward under subsection (c) and the State may reallo-
cate such bond authority only for qualified residential 
rental projects. Reallocated bonds shall not be taken into 
account for purposes of determining eligibility for low-in-
come housing credits under section 42(h)(4) of the Inter-
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nal Revenue Code of 1986 or for purposes of determining 
eligibility for grants under subsection (c). 
(e) RETURN OF UNUSED GRANT FUNDS.—Any grant 
funds not used to make subawards under this section be-
fore January 1, 2012, shall be returned to the Secretary 
of the Treasury on such date. The portion of any 
subaward which is not disbursed before such date shall 
be returned to the Secretary of the Treasury on such date 
unless the subawardee has paid or incurred before Janu-
ary 1, 2012, at least 30 percent of the subawardee’s total 
adjusted basis in land and depreciable property that is 
reasonably expected to be part of the low-income housing 
building with respect to which such subaward is made. 
The portion of any subaward which is not disbursed before 
January 1, 2013, shall be returned to the Secretary of 
the Treasury on such date. Any subawards returned to 
the State housing credit agency on or after January 1, 
2012, shall be promptly returned to the Secretary of the 
Treasury. Any amounts returned to the Secretary of the 
Treasury under this subsection shall be deposited in the 
general fund of the Treasury. 
(f) DEFINITIONS.—Any term used in this section 
which is also used in section 42 of the Internal Revenue 
Code of 1986 shall have the same meaning for purposes 
of this section as when used in such section 42. Any ref-
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