I 
118TH CONGRESS 
1ST SESSION H. R. 6650 
To amend the Internal Revenue Code of 1986 to provide a credit for 
investment in Community Development Financial Institutions. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 6, 2023 
Mr. THANEDAR introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Finan-
cial Services, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a credit for investment in Community Development Fi-
nancial Institutions. 
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 ‘‘Community Develop-
ment Investment Tax Credit Act of 2023’’. 
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SEC. 2. COMMUNITY DEVELOPMENT FINANCIAL INSTITU-
TION INVESTMENT TAX CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
section: 
‘‘SEC. 45BB. COMMUNITY DEVELOPMENT FINANCIAL INSTI-
TUTION INVESTMENT TAX CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of section 38, 
in the case of a taxpayer who holds a qualified 
CDFI investment on a credit allowance date of such 
investment which occurs during the taxable year, the 
CDFI investment credit determined under this sec-
tion for such taxable year is an amount equal to the 
applicable percentage of the amount paid to the 
qualified community development financial institu-
tion for such investment at its original issue. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1)— 
‘‘(A) IN
GENERAL.—The applicable per-
centage is— 
‘‘(i) 3 percent with respect to the first 
10 credit allowance dates, and 
‘‘(ii) 4 percent with respect to the 10 
credit allowance dates following the last 
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credit allowance date to which clause (i) 
applies. 
‘‘(B) INCREASED
AMOUNT
FOR
CERTAIN 
INVESTMENTS.—In the case of a qualified 
CDFI investment which does not have a fixed 
term or duration, the applicable percentage for 
any credit allowance date shall be increased by 
one percentage point. 
‘‘(3) CREDIT ALLOWANCE DATE.— 
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘credit allowance date’ 
means, with respect to any qualified CDFI in-
vestment— 
‘‘(i) the date which is one year after 
the date on which such investment is ini-
tially made, and 
‘‘(ii) each of the 19 anniversary dates 
of such date thereafter. 
‘‘(B) LIMITATION.—Notwithstanding sub-
paragraph (A), a date shall not be treated as a 
credit allowance date with respect to any quali-
fied CDFI investment if such date occurs after 
any date on which— 
‘‘(i) the financial institution in which 
such CDFI investment is made ceases to 
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be a qualified community development fi-
nancial institution, or 
‘‘(ii) such investment is redeemed, re-
purchased, or otherwise repaid by the 
qualified community development financial 
institution which issued such investment. 
‘‘(b) QUALIFIED CDFI INVESTMENT.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified CDFI 
investment’ means any investment in a qualified 
community development financial institution if— 
‘‘(A) such investment is acquired by the 
taxpayer at its original issue (directly or 
through an underwriter) solely in exchange for 
cash, 
‘‘(B) such investment is in the form of— 
‘‘(i) non-voting stock or an equity 
equivalent investment, 
‘‘(ii) an interest in an entity which is 
a partnership, or 
‘‘(iii) an obligation described in sec-
tion 279(b)(2) which has a term of 10 
years or longer, 
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‘‘(C) such investment has not been des-
ignated as a qualified equity investment for 
purposes of section 45D, and 
‘‘(D) such investment is designated for 
purposes of this section by the qualified com-
munity development financial institution. 
Such term shall not include any investment issued 
by a qualified community development financial in-
stitution more than 5 years after the date that such 
financial institution receives an allocation under sub-
section (d)(3). Any allocation not used within such 
5-year period may be reallocated by the Secretary 
under subsection (d). 
‘‘(2) LIMITATION.—The maximum amount of 
investments issued by a qualified community devel-
opment financial institution which may be des-
ignated under paragraph (1)(D) by such financial 
institution shall not exceed the portion of the limita-
tion amount allocated under subsection (d) to such 
financial institution. 
‘‘(3) 
TREATMENT
OF
SUBSEQUENT
PUR-
CHASERS.—The term ‘qualified CDFI investment’ 
includes any investment which would (but for para-
graph (1)(A)) be a qualified CDFI investment in the 
hands of the taxpayer if such investment was a 
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qualified CDFI investment in the hands of a prior 
holder. 
‘‘(4) REDEMPTIONS.—A rule similar to the rule 
of section 1202(c)(3) shall apply for purposes of this 
subsection. 
‘‘(5) EQUITY EQUIVALENT INVESTMENT.—For 
purposes of this paragraph, the term ‘equity equiva-
lent investment’ means an obligation of a qualified 
community 
development 
financial 
institution 
which— 
‘‘(A) is carried as an investment on the in-
vestor’s balance sheet in accordance with Gen-
erally Accepted Accounting Principles, 
‘‘(B) is not secured by any of the assets of 
the qualified community development financial 
institution, 
‘‘(C) is fully subordinated to the right of 
repayment of all of the other creditors of the 
qualified community development financial in-
stitution, 
‘‘(D) does not give the investor the right to 
accelerate payment unless the qualified commu-
nity development financial institution ceases its 
normal operations, 
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