I 
117TH CONGRESS 
2D SESSION 
H. R. 8401 
To amend the Internal Revenue Code of 1986 to modify the low-income 
housing tax credit to incentivize affordable and transit-oriented develop-
ment and development in certain difficult development areas, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 15, 2022 
Mr. KAHELE (for himself and Mr. CASE) 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 modify 
the low-income housing tax credit to incentivize afford-
able and transit-oriented development and development 
in certain difficult development areas, and for other pur-
poses. 
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 ‘‘Transit Oriented De-
velopment Act of 2022’’. 
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SEC. 2. LOW-INCOME HOUSING TAX CREDIT FOR TRANSIT- 
ORIENTED DEVELOPMENT AREAS. 
(a) IN GENERAL.—Section 42(d)(5) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(C) INCREASE IN CREDIT FOR BUILDINGS 
IN
TRANSIT-ORIENTED
DEVELOPMENT 
AREAS.— 
‘‘(i) IN GENERAL.—In the case of any 
building located in a transit-oriented devel-
opment area which is designated for pur-
poses of this subparagraph— 
‘‘(I) in the case of a new build-
ing, the eligible basis of such building 
shall be 180 percent of such basis de-
termined without regard to this sub-
paragraph, and 
‘‘(II) in the case of an existing 
building, the rehabilitation expendi-
tures taken into account under sub-
section (e) shall be 180 percent of 
such expenditures determined without 
regard to this subparagraph. 
‘‘(ii) TRANSIT-ORIENTED
DEVELOP-
MENT AREA.—For purposes of this sub-
paragraph, the term ‘transit-oriented de-
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velopment area’ means an area designated 
by the Secretary of Housing and Urban 
Development and State housing credit 
agency as located in an area within 1⁄2 of 
a mile from a rail, bus, harbor, or water-
way station and as zoned for high-density. 
‘‘(iii) 
LIMIT
ON
AREAS
DES-
IGNATED.—The portions of metropolitan 
statistical areas which may be designated 
for purposes of this subparagraph shall not 
exceed an aggregate area having 20 per-
cent of the population of such metropolitan 
statistical areas. A comparable rule shall 
apply to nonmetropolitan statistical areas. 
‘‘(iv) COORDINATION WITH HIGH COST 
AREAS.—If the eligible basis of a new 
building, or the rehabilitation expenditures 
with respect to an existing building, are 
determined pursuant to subparagraph (B), 
such building shall not be treated as lo-
cated in a transit-oriented development 
area for purposes of this subparagraph.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to buildings placed in service after 
the date of the enactment of this Act. 
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SEC. 3. LOW-INCOME HOUSING TAX CREDIT FOR DIFFICULT 
DEVELOPMENT AREAS IN NON-CONTIGUOUS 
STATES AND POSSESSIONS. 
(a) IN GENERAL.—Section 42(d)(5)(B) of the Inter-
nal Revenue Code of 1986 is amended by adding at the 
end the following new clause: 
‘‘(vi) SPECIAL
RULE
FOR
NON-CON-
TIGUOUS
STATES
AND
POSSESSIONS.—In 
the case of Hawaii, Alaska, and any pos-
session of the United States, subclauses (I) 
and (II) of clause (i) shall each be applied 
by substituting ‘170 percent’ for ‘130 per-
cent’.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to buildings placed in service after 
the date of the enactment of this Act. 
SEC. 4. HUD STUDY REGARDING ADJUSTMENT OF TAX 
CREDIT ALLOCATIONS TO REFLECT GEO-
GRAPHIC COST-OF-LIVING DIFFERENCES. 
The Secretary of Housing and Urban Development 
shall conduct a study to identify cost-of-living differences 
throughout the United States based on geographic loca-
tion and proximity and accessibility to transit. Not later 
than the expiration of the 1-year period beginning on the 
date of the enactment of this Act, the Secretary shall sub-
mit a report to the Congress setting forth the results and 
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conclusions of the study and recommending formulas for 
the adjustment of annual allocations to the States of low- 
income housing tax credits under section 42 of the Inter-
nal Revenue Code of 1986 (26 U.S.C. 42) to reflect such 
cost-of -living differences. 
Æ 
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