1566 
(as defined by the Secretary) to the physician’s 
or practitioner’s own patients as part of the 
physician’s or practitioner’s professional serv-
ice.’’. 
(f) EXCLUSION MODIFICATIONS.—Section 1862(a) of 
the Social Security Act (42 U.S.C. 1395y(a)) is amend-
ed— 
(1) in paragraph (1)— 
(A) in subparagraph (O), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (P), by striking the 
semicolon at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(Q) in the case of dental and oral health serv-
ices (as defined in section 1861(lll)) that are preven-
tive and screening services described in paragraph 
(2) of such section, which are furnished more fre-
quently than provided under section 1834(z)(3) or 
under circumstances other than circumstances deter-
mined appropriate under subparagraph (C) of such 
section;’’; and 
(2) in paragraph (12), by inserting before the 
semicolon at the end the following: ‘‘and except that 
payment may be made under part B for dental and 
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oral health services that are covered under section 
1861(s)(2)(II) and for dentures under section 
1861(s)(8)’’. 
(g) CERTAIN NON-APPLICATION.— 
(1) IN GENERAL.—Paragraphs (1) and (4) of 
section 1839(a) of the Social Security Act (42 
U.S.C. 1395r(a)) are amended by adding at the end 
of each such paragraphs the following: ‘‘In applying 
this paragraph there shall not be taken into account 
benefits and administrative costs attributable to the 
amendments made by section 134401 (other than 
subsection (g)) of An Act to provide for reconcili-
ation pursuant to title II of S. Con. Res. 14 and the 
Government contribution under section 1844(a)(5)’’. 
(2) PAYMENT.—Section 1844(a) of such Act 
(42 U.S.C. 1395w(a)) is amended— 
(A) in paragraph (4), by striking the pe-
riod at the end and inserting ‘‘; plus’’; 
(B) by adding at the end the following new 
paragraph: 
‘‘(5) a Government contribution equal to the 
amount that is estimated to be payable for benefits 
and related administrative costs incurred that are 
attributable to the amendments made by section 
134401 (other than subsection (g)) of the An Act to 
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provide for reconciliation pursuant to title II of S. 
Con. Res. 14.’’; and 
(C) in the flush matter at the end, by 
striking ‘‘paragraph (4)’’ and inserting ‘‘para-
graphs (4) and (5)’’. 
(h) IMPLEMENTATION.— 
(1) FUNDING.— 
(A) IN GENERAL.—In addition to amounts 
otherwise available, the Secretary of Health and 
Human Services (in this subsection referred to 
as the ‘‘Secretary’’) shall provide for the trans-
fer from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
the Social Security Act (42 U.S.C. 1395t) to 
the Centers for Medicare & Medicaid Services 
Program Management Account of— 
(i) $20,000,000 for each of fiscal 
years 2022 through 2028 for purposes of 
implementing the amendments made by 
this section; and 
(ii) such sums as determined appro-
priate by the Secretary for each subse-
quent fiscal year for purposes of admin-
istering the provisions of such amend-
ments. 
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(B) AVAILABILITY AND ADDITIONAL USE 
OF
FUNDS.—Funds transferred pursuant to 
subparagraph (A) shall remain available until 
expended and may be used, in addition to the 
purpose specified in subparagraph (A)(i), to im-
plement the amendments made by sections 
134402 and 134403. 
(2) ADMINISTRATION.—Notwithstanding any 
other provision of law, the Secretary may implement, 
by program instruction or otherwise, any of the pro-
visions of, or amendments made by, this section. 
(3) PAPERWORK REDUCTION ACT.—Chapter 35 
of title 44, United States Code, shall not apply to 
the provisions of, or the amendments made by, this 
section. 
SEC. 134402. PROVIDING COVERAGE FOR HEARING CARE 
UNDER THE MEDICARE PROGRAM. 
(a) PROVISION
OF AURAL REHABILITATION
AND 
TREATMENT SERVICES BY QUALIFIED AUDIOLOGISTS.— 
Section 1861(ll)(3) of the Social Security Act (42 U.S.C. 
1395x(ll)(3)) is amended by inserting ‘‘(and, beginning 
October 1, 2023, such aural rehabilitation and treatment 
services)’’ after ‘‘assessment services’’. 
(b) COVERAGE OF HEARING AIDS.— 
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(1) INCLUSION
OF
HEARING
AIDS
AS
PROS-
THETIC DEVICES.—Section 1861(s)(8) of the Social 
Security Act (42 U.S.C. 1395x(s)(8)) is amended by 
inserting ‘‘, and including hearing aids (as described 
in section 1834(h)(7)) furnished on or after October 
1, 2023, to individuals diagnosed with profound or 
severe hearing loss’’ before the semicolon at the end. 
(2) PAYMENT
LIMITATIONS
FOR
HEARING 
AIDS.—Section 1834(h) of the Social Security Act 
(42 U.S.C. 1395m(h)), as amended by section 
134401(e)(2)(A), is further amended by adding at 
the end the following new paragraph: 
‘‘(7) LIMITATIONS FOR HEARING AIDS.— 
‘‘(A) IN
GENERAL.—Payment may be 
made under this part with respect to an indi-
vidual, with respect to hearing aids furnished 
on or after October 1, 2023— 
‘‘(i) not more than once during a 5- 
year period; 
‘‘(ii) only for types of such hearing 
aids that are not over-the-counter hearing 
aids (as defined in section 520(q)(1) of the 
Federal Food, Drug, and Cosmetic Act) 
and that are determined appropriate by 
the Secretary; and 
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‘‘(iii) only if furnished pursuant to a 
written order of a physician or qualified 
audiologist 
(as 
defined 
in 
section 
1861(ll)(4)(B)). 
‘‘(B) LIMITATION ON JUDICIAL REVIEW.— 
There shall be no administrative or judicial re-
view under section 1869 or otherwise of— 
‘‘(i) the determination of the types of 
hearing aids paid for under subparagraph 
(A)(ii); or 
‘‘(ii) the determination of fee schedule 
rates for hearing aids described in this 
paragraph.’’. 
(3) APPLICATION
OF
COMPETITIVE
ACQUISI-
TION.— 
(A) IN GENERAL.—Section 1834(h)(1)(H) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395m(h)(1)(H)), 
as 
amended 
by 
section 
134401(e)(2)(B)(i), is further amended— 
(i) in the header, by inserting ‘‘, 
HEARING AIDS’’ after ‘‘DENTURES’’; 
(ii) by inserting ‘‘, of hearing aids de-
scribed in paragraph (2)(E) of such sec-
tion,’’ after ‘‘paragraph (2)(D) of such sec-
tion’’; and 
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(iii) in clause (i), by inserting ‘‘, such 
hearing aids’’ after ‘‘such dentures’’. 
(B) CONFORMING AMENDMENT.— 
(i) IN GENERAL.—Section 1847(a)(2) 
of the Social Security Act (42 U.S.C. 
1395w–3(a)(2)), as amended by section 
134401(e)(2)(B)(ii), is further amended by 
adding at the end the following new sub-
paragraph: 
‘‘(E) HEARING
AIDS.—Hearing aids de-
scribed in section 1861(s)(8) for which payment 
would 
otherwise 
be 
made 
under 
section 
1834(h).’’. 
(ii) EXEMPTION
OF
CERTAIN
ITEMS 
FROM
COMPETITIVE
ACQUISITION.—Sec-
tion 1847(a)(7) of the Social Security Act 
(42 U.S.C. 1395w–3(a)(7)), as amended 
by section 134401(e)(2)(B)(iii), is further 
amended by adding at the end the fol-
lowing new subparagraph: 
‘‘(D) CERTAIN
HEARING
AIDS.—Those 
items and services described in paragraph 
(2)(E) if furnished by a physician or other 
practitioner (as defined by the Secretary) to the 
physician’s or practitioner’s own patients as 
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part of the physician’s or practitioner’s profes-
sional service.’’. 
(4) INCLUSION OF AUDIOLOGISTS AS CERTAIN 
PRACTITIONERS TO RECEIVE PAYMENT ON AN AS-
SIGNMENT-RELATED
BASIS.—Section 
1842(b)(18)(C) of the Social Security Act (42 
U.S.C. 1395u(b)(18)(C)), as amended by section 
134401(d)(4), is further amended by adding at the 
end the following new clause: 
‘‘(viii) Beginning October 1, 2023, a 
qualified audiologist (as defined in section 
1861(ll)(4)(B)).’’. 
(c) EXCLUSION MODIFICATION.—Section 1862(a)(7) 
of the Social Security Act (42 U.S.C. 1395y(a)(7)) is 
amended by inserting ‘‘(except such hearing aids or exami-
nations therefor as described in and otherwise allowed 
under section 1861(s)(8))’’ after ‘‘hearing aids or exami-
nations therefor’’. 
(d) CERTAIN NON-APPLICATION.— 
(1) IN GENERAL.—The last sentence of section 
1839(a)(1) of the Social Security Act (42 U.S.C. 
1395r(a)(1)), as added by section 134401(g)(1), is 
amended by striking ‘‘section 134401 (other than 
subsection (g))’’ and inserting ‘‘sections 134401 
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(other than subsection (g)), 134402 (other than sub-
section (d))’’. 
(2) 
PAYMENT.—Paragraph 
(4) 
of 
section 
1844(a) of such Act (42 U.S.C. 1395w(a)), as added 
by section 134401(g)(2), is amended by striking 
‘‘section 134401 (other than subsection (g))’’ and 
inserting ‘‘sections 134401 (other than subsection 
(g)), 134402 (other than subsection (d))’’. 
(e) IMPLEMENTATION.— 
(1) FUNDING.— 
(A) IN GENERAL.—In addition to amounts 
otherwise available, the Secretary of Health and 
Human Services (in this subsection referred to 
as the ‘‘Secretary’’) shall provide for the trans-
fer from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
the Social Security Act (42 U.S.C. 1395t) to 
the Centers for Medicare & Medicaid Services 
Program Management Account of— 
(i) $20,000,000 for each of fiscal 
years 2022 through 2023 for purposes of 
implementing the amendments made by 
this section; and 
(ii) such sums as determined appro-
priate by the Secretary for each subse-
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quent fiscal year for purposes of admin-
istering the provisions of such amend-
ments. 
(B) AVAILABILITY AND ADDITIONAL USE 
OF
FUNDS.—Funds transferred pursuant to 
subparagraph (A) shall remain available until 
expended and may be used, in addition to the 
purpose specified in subparagraph (A)(i), to im-
plement the amendments made by sections 
134401 and 134403. 
(2) ADMINISTRATION.—Notwithstanding any 
other provision of law, the Secretary may implement, 
by program instruction or otherwise, any of the pro-
visions of, or amendments made by, this section. 
(3) PAPERWORK REDUCTION ACT.—Chapter 35 
of title 44, United States Code, shall not apply to 
the provisions of, or the amendments made by, this 
section. 
SEC. 134403. PROVIDING COVERAGE FOR VISION CARE 
UNDER THE MEDICARE PROGRAM. 
(a) COVERAGE.—Section 1861(s)(2) of the Social Se-
curity Act (42 U.S.C. 1395x(s)(2)), as amended by section 
134401(a), is further amended— 
(1) in subparagraph (HH), by striking ‘‘and’’ 
after the semicolon at the end; 
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(2) in subparagraph (II), by striking the period 
at the end and adding ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(JJ) vision services (as defined in subsection 
(mmm));’’. 
(b) VISION SERVICES DEFINED.—Section 1861 of 
the Social Security Act (42 U.S.C. 1395x), as amended 
by section 134401(b), is further amended by adding at 
the end the following new subsection: 
‘‘(mmm) VISION SERVICES.—The term ‘vision serv-
ices’ means— 
‘‘(1) routine eye examinations to determine the 
refractive state of the eyes, including procedures per-
formed during the course of such examination; and 
‘‘(2) contact lens fitting services; 
furnished on or after October 1, 2022, by or under the 
direct supervision of an ophthalmologist or optometrist 
who is legally authorized to furnish such examinations, 
procedures, or fitting services (as applicable) under State 
law (or the State regulatory mechanism provided by State 
law) of the State in which the examinations, procedures, 
or fitting services are furnished.’’. 
(c) PAYMENT LIMITATIONS.—Section 1834 of the 
Social Security Act (42 U.S.C. 1395m), as amended by 
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section 134401(c)(2), is further amended by adding at the 
end the following new subsection: 
‘‘(aa) LIMITATION FOR VISION SERVICES.—With re-
spect to vision services (as defined in section 1861(mmm)) 
and an individual, payment may be made under this part 
for only 1 routine eye examination described in paragraph 
(1) of such section and 1 contact lens fitting service de-
scribed in paragraph (2) of such section during a 2-year 
period.’’. 
(d) PAYMENT UNDER PHYSICIAN FEE SCHEDULE.— 
Section 1848(j)(3) of the Social Security Act (42 U.S.C. 
1395w–4(j)(3)), as amended by section 134401(d)(1), is 
further amended by inserting ‘‘(2)(JJ),’’ before ‘‘(3)’’. 
(e) COVERAGE OF CONVENTIONAL EYEGLASSES AND 
CONTACT LENSES.— 
(1) IN
GENERAL.—Section 1861(s)(8) of the 
Social Security Act (42 U.S.C. 1395x(s)(8)), as 
amended by section 134402(b)(1), is further amend-
ed by striking ‘‘, and including one pair of conven-
tional eyeglasses or contact lenses furnished subse-
quent to each cataract surgery with insertion of an 
intraocular lens’’ and inserting ‘‘, including one pair 
of conventional eyeglasses or contact lenses fur-
nished subsequent to each cataract surgery with in-
sertion of an intraocular lens, if furnished before Oc-
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tober 1, 2022, and including conventional eyeglasses 
or 
contact 
lenses 
(as 
described 
in 
section 
1834(h)(8)), whether or not furnished subsequent to 
such a surgery, if furnished on or after October 1, 
2022’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
1842(b)(11)(A) of the Social Security Act (42 
U.S.C. 1395u(b)(11)(A)) is amended by inserting 
‘‘furnished prior to October 1, 2022,’’ after ‘‘relating 
to them,’’. 
(f) SPECIAL PAYMENT RULES FOR EYEGLASSES AND 
CONTACT LENSES.— 
(1) LIMITATIONS.—Section 1834(h) of the So-
cial Security Act (42 U.S.C. 1395m(h)), as amended 
by 
section 
134401(e)(2)(A) 
and 
section 
134402(b)(2), is further amended by adding at the 
end the following new paragraph: 
‘‘(8) PAYMENT LIMITATIONS FOR EYEGLASSES 
AND CONTACT LENSES.— 
‘‘(A) IN GENERAL.—With respect to eye-
glasses and contact lenses furnished to an indi-
vidual on or after October 1, 2022, subject to 
subparagraph (B), payment may be made under 
this part only— 
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‘‘(i) during a 2-year period, for either 
1 pair of eyeglasses (including lenses and 
frames) or not more than a 2-year supply 
of contact lenses; 
‘‘(ii) with respect to amounts attrib-
utable to the lenses and frames of such a 
pair of eyeglasses or amounts attributable 
to such a 2-year supply of contact lenses, 
in an amount not greater than— 
‘‘(I) for a pair of eyeglasses fur-
nished in, or a 2-year supply of con-
tact lenses beginning in, 2022— 
‘‘(aa) $85 for the lenses of 
such pair of eyeglasses and $85 
for the frames of such pair of 
eyeglasses; or 
‘‘(bb) $85 for such 2-year 
supply of contact lenses; and 
‘‘(II) for the lenses and frames of 
a pair of eyeglasses furnished in, or a 
2-year supply of contact lenses begin-
ning in, a subsequent year, the dollar 
amounts specified under this subpara-
graph for the previous year, increased 
by the percentage change in the con-
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sumer price index for all urban con-
sumers (United States city average) 
for the 12-month period ending with 
June of the previous year; 
‘‘(iii) if furnished pursuant to a writ-
ten order of a physician described in sec-
tion 1861(lll); and 
‘‘(iv) if during the 2-year period de-
scribed in clause (i), the individual did not 
already receive (as described in subpara-
graph (B)) one pair of conventional eye-
glasses or contact lenses subsequent to a 
cataract surgery with insertion of an intra-
ocular lens furnished during such period. 
‘‘(B) EXCEPTION.—With respect to a 2- 
year period described in subparagraph (A)(i), in 
the case of an individual who receives cataract 
surgery with insertion of an intraocular lens, 
notwithstanding subparagraph (A), payment 
may be made under this part for one pair of 
conventional eyeglasses or contact lenses fur-
nished subsequent to such cataract surgery dur-
ing such period. 
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‘‘(C) LIMITATION ON JUDICIAL REVIEW.— 
There shall be no administrative or judicial re-
view under section 1869 or otherwise of— 
‘‘(i) the determination of the types of 
eyeglasses and contact lenses covered 
under this paragraph; or 
‘‘(ii) the determination of fee schedule 
rates under this subsection for eyeglasses 
and contact lenses.’’. 
(2) APPLICATION
OF
COMPETITIVE
ACQUISI-
TION.— 
(A) IN GENERAL.—Section 1834(h)(1)(H) 
of 
the 
Social 
Security 
Act 
(42 
U.S.C. 
1395m(h)(1)(H)), 
as 
amended 
by 
section 
134401(e)(2)(B)(i) 
and 
section 
134402(b)(3)(A), is further amended— 
(i) in the header by inserting ‘‘, EYE-
GLASSES, AND
CONTACT
LENSES’’ after 
‘‘HEARING AIDS’’; 
(ii) by inserting ‘‘and of eyeglasses 
and contact lenses described in paragraph 
(2)(F) of such section,’’ after ‘‘paragraph 
(2)(E) of such section,’’; and 
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(iii) in clause (i), by inserting ‘‘, or 
such eyeglasses and contact lenses’’ after 
‘‘such hearing aids’’. 
(B) CONFORMING AMENDMENT.— 
(i) IN GENERAL.—Section 1847(a)(2) 
of the Social Security Act (42 U.S.C. 
1395w–3(a)(2)), as amended by section 
134401(e)(2)(B)(ii) 
and 
section 
134402(b)(3)(B)(i), is further amended by 
adding at the end the following new sub-
paragraph: 
‘‘(F) 
EYEGLASSES
AND
CONTACT 
LENSES.—Eyeglasses and contact lenses de-
scribed in section 1861(s)(8) for which payment 
would 
otherwise 
be 
made 
under 
section 
1834(h).’’. 
(ii) EXEMPTION
OF
CERTAIN
ITEMS 
FROM
COMPETITIVE
ACQUISITION.—Sec-
tion 1847(a)(7) of the Social Security Act 
(42 U.S.C. 1395w–3(a)(7)), as amended 
by section 134401(e)(2)(B)(iii) and section 
134402(b)(3)(B)(ii), is further amended by 
adding at the end the following new sub-
paragraph: 
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‘‘(E) CERTAIN EYEGLASSES AND CONTACT 
LENSES.—Those items and services described in 
paragraph (2)(F) if furnished by a physician or 
other practitioner (as defined by the Secretary) 
to the physician’s or practitioner’s own patients 
as part of the physician’s or practitioner’s pro-
fessional service.’’. 
(g) EXCLUSION MODIFICATIONS.—Section 1862(a) 
of the Social Security Act (42 U.S.C. 1395y(a)), as 
amended by section 134401(f), is further amended— 
(1) in paragraph (1)— 
(A) in subparagraph (P), by striking 
‘‘and’’ at the end; 
(B) in subparagraph (Q), by striking the 
semicolon at the end and inserting ‘‘, and’’; and 
(C) by adding at the end the following new 
subparagraph: 
‘‘(R) in the case of vision services (as defined 
in section 1861(mmm)) that are routine eye exami-
nations and contact lens fitting services (as de-
scribed in paragraph (1) or (2), respectively, of such 
section), which are furnished more frequently than 
once during a 2-year period;’’; and 
(2) in paragraph (7)— 
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(A) by inserting ‘‘(other than such an ex-
amination that is a vision service that is cov-
ered under section 1861(s)(2)(JJ))’’ after ‘‘eye 
examinations’’; and 
(B) by inserting ‘‘(other than such a proce-
dure that is a vision service that is covered 
under section 1861(s)(2)(JJ))’’ after ‘‘refractive 
state of the eyes’’. 
(h) CERTAIN NON-APPLICATION.— 
(1) IN GENERAL.—The last sentence of section 
1839(a)(1) of the Social Security Act (42 U.S.C. 
1395r(a)(1)), as added by section 134401(g)(1) and 
amended by section 134402(d)(1), is further amend-
ed by inserting ‘‘, and 134403 (other than sub-
section (h))’’ after ‘‘134402 (other than subsection 
(d))’’. 
(2) 
PAYMENT.—Paragraph 
(4) 
of 
section 
1844(a) of such Act (42 U.S.C. 1395w(a)), as added 
by section 134401(g)(2) and amended by section 
134402(d)(2), is further amended by inserting ‘‘, 
and 134403 (other than subsection (h))’’ after 
‘‘134402 (other than subsection (d))’’. 
(i) IMPLEMENTATION.— 
(1) FUNDING.— 
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(A) IN GENERAL.—In addition to amounts 
otherwise available, the Secretary of Health and 
Human Services (in this subsection referred to 
as the ‘‘Secretary’’) shall provide for the trans-
fer from the Federal Supplementary Medical 
Insurance Trust Fund under section 1841 of 
the Social Security Act (42 U.S.C. 1395t) to 
the Centers for Medicare & Medicaid Services 
Program Management Account of— 
(i) $20,000,000 for each of fiscal 
years 2022 and 2023 for purposes of im-
plementing the amendments made by this 
section; and 
(ii) such sums as determined appro-
priate by the Secretary for each subse-
quent fiscal year for purposes of admin-
istering the provisions of such amend-
ments. 
(B) AVAILABILITY AND ADDITIONAL USE 
OF
FUNDS.—Funds transferred pursuant to 
subparagraph (A) shall remain available until 
expended and may be used, in addition to the 
purpose specified in subparagraph (A)(i), to im-
plement the amendments made by sections 
134401 and 134402. 
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(2) ADMINISTRATION.—Notwithstanding any 
other provision of law, the Secretary may implement, 
by program instruction or otherwise, any of the pro-
visions of, or amendments made by, this section. 
(3) PAPERWORK REDUCTION ACT.—Chapter 35 
of title 44, United States Code, shall not apply to 
the provisions of, or the amendments made by, this 
section. 
Subtitle F—Infrastructure Financ-
ing and Community Develop-
ment 
SEC. 135001. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this subtitle an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
PART 1—INFRASTRUCTURE FINANCING 
Subpart A—Bond Financing 
SEC. 135101. CREDIT TO ISSUER FOR CERTAIN INFRA-
STRUCTURE BONDS. 
(a) IN GENERAL.—Subchapter B of chapter 65 is 
amended by inserting before section 6432 the following 
new section: 
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‘‘SEC. 6431A. CREDIT ALLOWED TO ISSUER FOR QUALIFIED 
INFRASTRUCTURE BONDS. 
‘‘(a) IN GENERAL.—In the case of a qualified infra-
structure bond, the issuer of such bond shall be allowed 
a credit with respect to each interest payment under such 
bond which shall be payable by the Secretary as provided 
in subsection (b). 
‘‘(b) PAYMENT OF CREDIT.— 
‘‘(1) IN
GENERAL.—The Secretary shall pay 
(contemporaneously with each date on which interest 
is paid, including any interest paid after the origi-
nally scheduled payment date) to the issuer of such 
bond (or, at the direction of the issuer, to any per-
son who makes such interest payments on behalf of 
such issuer) an amount equal to the applicable per-
centage of such interest so paid. 
‘‘(2) APPLICABLE PERCENTAGE.—For purposes 
of this subsection, except as provided in subsection 
(d), the applicable percentage with respect to any 
bond shall be determined under the following table: 
‘‘In the case of a bond issued 
during calendar year: 
The applicable percentage is: 
2022 through 2024 ......................................................................
35% 
2025 .............................................................................................
32% 
2026 .............................................................................................
30% 
2027 and thereafter .....................................................................
28% 
‘‘(3) LIMITATION.— 
‘‘(A) IN GENERAL.—The amount of any 
interest payment taken into account under 
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paragraph (1) with respect to a bond for any 
payment date shall not exceed the amount of 
interest which would have been payable under 
such bond for such payment date if interest 
were determined at the applicable credit rate 
multiplied by the applicable amount for such 
bond for such payment date. 
‘‘(B) APPLICABLE
CREDIT
RATE.—For 
purposes of subparagraph (A)— 
‘‘(i) IN
GENERAL.—The applicable 
credit rate is the rate which the Secretary 
estimates will permit the issuance of quali-
fied infrastructure bonds with a specified 
maturity or redemption date without dis-
count and without additional interest cost 
to the issuer. 
‘‘(ii) DATE OF DETERMINATION.—The 
applicable credit rate with respect to any 
qualified infrastructure bond shall be de-
termined as of the first day on which there 
is a binding, written contract for the sale 
or exchange of the bond. 
‘‘(C) APPLICABLE AMOUNT.— 
‘‘(i) BONDS
WITH
MORE
THAN
DE 
MINIMIS
ORIGINAL
ISSUE
DISCOUNT.—In 
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the case of any bond that has more than 
a de minimis amount of original issue dis-
count (determined under the rules of sec-
tion 1273(a)(3)), the applicable amount for 
a payment date is the issue price of such 
bond (within the meaning of section 148), 
as adjusted for any principal payments 
made prior to such date. 
‘‘(ii) OTHER BONDS.—In the case of 
any other bond, the applicable amount for 
a payment date is the outstanding prin-
cipal amount of such bond on such pay-
ment date (determined without taking into 
account any principal payment on such 
bond on such date). 
‘‘(c) QUALIFIED INFRASTRUCTURE BOND.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified infrastructure bond’ means 
any bond (other than a private activity bond) issued 
as part of an issue if— 
‘‘(A) 100 percent of the excess of available 
project proceeds of such issue over the amounts 
in a reasonably required reserve (within the 
meaning of section 150(a)(3)) with respect to 
such issue are to be used for— 
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‘‘(i) capital expenditures or operations 
and maintenance expenditures in connec-
tion with property the acquisition, con-
struction, or improvement of which would 
be a capital expenditure, or 
‘‘(ii) payments made by a State or po-
litical subdivision of a State to a custodian 
of a rail corridor for purposes of the trans-
fer, lease, sale, or acquisition of an estab-
lished railroad right-of-way consistent with 
section 8(d) of the National Trails Act of 
1968, but only if the Surface Transpor-
tation Board has issued a certificate of in-
terim trail use or notice of interim trail use 
for purposes of authorizing such transfer, 
lease, sale, or acquisition, 
‘‘(B) the interest on such bond would (but 
for this section) be excludable from gross in-
come under section 103, 
‘‘(C) the issue price has not more than a 
de minimis amount (determined under rules 
similar to the rules of section 1273(a)(3)) of 
premium over the stated principal amount of 
the bond, and 
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‘‘(D) prior to the issuance of such bond, 
the issuer makes an irrevocable election to have 
this section apply. 
‘‘(2) APPLICABLE RULES.—For purposes of ap-
plying paragraph (1)— 
‘‘(A) NOT TREATED AS FEDERALLY GUAR-
ANTEED.—For purposes of section 149(b), a 
qualified infrastructure bond shall not be treat-
ed as federally guaranteed by reason of the 
credit allowed under this section. 
‘‘(B) 
APPLICATION
OF
ARBITRAGE 
RULES.—For purposes of section 148, the yield 
on a qualified infrastructure bond shall be re-
duced by the credit allowed under this section, 
except that no such reduction shall apply in de-
termining the amount of gross proceeds of an 
issue that qualifies as a reasonably required re-
serve or replacement fund. 
‘‘(d) DEFINITION AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) INTEREST
INCLUDIBLE
IN
GROSS
IN-
COME.—For purposes of this title, interest on any 
qualified infrastructure bond shall be includible in 
gross income. 
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‘‘(2) AVAILABLE
PROJECT
PROCEEDS.—The 
term ‘available project proceeds’ means— 
‘‘(A) the excess of— 
‘‘(i) the proceeds from the sale of an 
issue, over 
‘‘(ii) issuance costs financed by the 
issue (to the extent that such costs do not 
exceed 2 percent of such proceeds), and 
‘‘(B) the proceeds from any investment of 
the excess described in subparagraph (A). 
‘‘(3) CURRENT REFUNDINGS ALLOWED.— 
‘‘(A) IN GENERAL.—In the case of a bond 
issued to refund a qualified infrastructure bond, 
such refunding bond shall not be treated as a 
qualified infrastructure bond for purposes of 
this section unless— 
‘‘(i) the average maturity date of the 
issue of which the refunding bond is a part 
is not later than the average maturity date 
of the bonds to be refunded by such issue, 
‘‘(ii) the amount of the refunding 
bond does not exceed the outstanding 
amount of the refunded bond, 
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‘‘(iii) the refunded bond is redeemed 
not later than 90 days after the date of the 
issuance of the refunding bond, and 
‘‘(iv) the refunded bond was issued 
more than 30 days after the date of the 
enactment of this section. 
‘‘(B) APPLICABLE
PERCENTAGE
LIMITA-
TION.—The applicable percentage with respect 
to any bond to which subparagraph (A) applies 
shall be 28 percent. 
‘‘(C) DETERMINATION OF AVERAGE MATU-
RITY.—For purposes of subparagraph (A)(i), 
average maturity shall be determined in accord-
ance with section 147(b)(2)(A). 
‘‘(4) APPLICATION
OF
DAVIS-BACON
ACT
RE-
QUIREMENTS WITH RESPECT TO QUALIFIED INFRA-
STRUCTURE BONDS.—Subchapter IV of chapter 31 
of title 40, United States Code, shall apply to 
projects financed with the proceeds of qualified in-
frastructure bonds. 
‘‘(e) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section.’’. 
(b) GROSS-UP OF PAYMENT TO ISSUERS IN CASE OF 
SEQUESTRATION.—In the case of any payment under sec-
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tion 6431A of the Internal Revenue Code of 1986 made 
after the date of the enactment of this Act to which se-
questration applies, the amount of such payment shall be 
increased to an amount equal to— 
(1) such payment (determined before such se-
questration), multiplied by 
(2) the quotient obtained by dividing 1 by the 
amount by which 1 exceeds the percentage reduction 
in such payment pursuant to such sequestration. 
For purposes of this subsection, the term ‘‘sequestration’’ 
means any reduction in direct spending ordered in accord-
ance with a sequestration report prepared by the Director 
of the Office and Management and Budget pursuant to 
the Balanced Budget and Emergency Deficit Control Act 
of 1985 or the Statutory Pay-As-You-Go Act of 2010. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1324(b)(2) of title 31, United 
States Code, is amended by striking ‘‘or 6431’’ and 
inserting ‘‘6431, or 6431A’’. 
(2) The table of sections for subchapter B of 
chapter 65 is amended by inserting before the item 
relating to section 6432 the following new item: 
‘‘Sec. 6431A. Credit allowed to issuer for qualified infrastructure bonds.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after December 
31, 2021. 
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SEC. 135102. ADVANCE REFUNDING BONDS. 
(a) IN GENERAL.—Section 149(d) is amended— 
(1) by striking ‘‘to advance refund another 
bond.’’ in paragraph (1) and inserting ‘‘as part of 
an issue described in paragraph (2), (3), or (4).’’, 
(2) by redesignating paragraphs (2) and (3) as 
paragraphs (5) and (7), respectively, 
(3) by inserting after paragraph (1) the fol-
lowing new paragraphs: 
‘‘(2) CERTAIN PRIVATE ACTIVITY BONDS.—An 
issue is described in this paragraph if any bond 
(issued as part of such issue) is issued to advance 
refund a private activity bond (other than a qualified 
501(c)(3) bond). 
‘‘(3) OTHER BONDS.— 
‘‘(A) IN GENERAL.—An issue is described 
in this paragraph if any bond (issued as part of 
such issue), hereinafter in this paragraph re-
ferred to as the ‘refunding bond’, is issued to 
advance refund a bond unless— 
‘‘(i) the refunding bond is only— 
‘‘(I) the first advance refunding 
of the original bond if the original 
bond is issued after 1985, or 
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‘‘(II) the first or second advance 
refunding of the original bond if the 
original bond was issued before 1986, 
‘‘(ii) in the case of refunded bonds 
issued before 1986, the refunded bond is 
redeemed not later than the earliest date 
on which such bond may be redeemed at 
par or at a premium of 3 percent or less, 
‘‘(iii) in the case of refunded bonds 
issued after 1985, the refunded bond is re-
deemed not later than the earliest date on 
which such bond may be redeemed, 
‘‘(iv) the initial temporary period 
under section 148(c) ends— 
‘‘(I) with respect to the proceeds 
of the refunding bond not later than 
30 days after the date of issue of such 
bond, and 
‘‘(II) with respect to the proceeds 
of the refunded bond on the date of 
issue of the refunding bond, and 
‘‘(v) in the case of refunded bonds to 
which section 148(e) did not apply, on and 
after the date of issue of the refunding 
bond, the amount of proceeds of the re-
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funded bond invested in higher yielding in-
vestments (as defined in section 148(b)) 
which are nonpurpose investments (as de-
fined in section 148(f)(6)(A)) does not ex-
ceed— 
‘‘(I) the amount so invested as 
part of a reasonably required reserve 
or replacement fund or during an al-
lowable temporary period, and 
‘‘(II) the amount which is equal 
to the lesser of 5 percent of the pro-
ceeds of the issue of which the re-
funded bond is a part or $100,000 (to 
the extent such amount is allocable to 
the refunded bond). 
‘‘(B) 
SPECIAL
RULES
FOR
REDEMP-
TIONS.— 
‘‘(i) ISSUER MUST REDEEM ONLY IF 
DEBT SERVICE SAVINGS.—Clause (ii) and 
(iii) of subparagraph (A) shall apply only 
if the issuer may realize present value debt 
service savings (determined without regard 
to administrative expenses) in connection 
with the issue of which the refunding bond 
is a part. 
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‘‘(ii) REDEMPTIONS
NOT
REQUIRED 
BEFORE
90TH
DAY.—For purposes of 
clauses (ii) and (iii) of subparagraph (A), 
the earliest date referred to in such clauses 
shall not be earlier than the 90th day after 
the date of issuance of the refunding bond. 
‘‘(4) ABUSIVE
TRANSACTIONS
PROHIBITED.— 
An issue is described in this paragraph if any bond 
(issued as part of such issue) is issued to advance 
refund another bond and a device is employed in 
connection with the issuance of such issue to obtain 
a material financial advantage (based on arbitrage) 
apart from savings attributable to lower interest 
rates.’’, and 
(4) by inserting after paragraph (5) (as so re-
designated) the following new paragraph: 
‘‘(6) SPECIAL RULES FOR PURPOSES OF PARA-
GRAPH (3).—For purposes of paragraph (3), bonds 
issued before October 22, 1986, shall be taken into 
account under subparagraph (A)(i) thereof except— 
‘‘(A) a refunding which occurred before 
1986 shall be treated as an advance refunding 
only if the refunding bond was issued more 
than 180 days before the redemption of the re-
funded bond, and 
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‘‘(B) a bond issued before 1986, shall be 
treated as advance refunded no more than once 
before March 15, 1986.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
148(f)(4)(C) is amended by redesignating clauses (xiv) 
through (xvi) as clauses (xv) to (xvii), respectively, and 
by inserting after clause (xiii) the following new clause: 
‘‘(xiv) DETERMINATION
OF
INITIAL 
TEMPORARY
PERIOD.—For purposes of 
this subparagraph, the end of the initial 
section temporary period shall be deter-
mined 
without 
regard 
to 
section 
149(d)(3)(A)(iv).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to advance refunding bonds issued 
more than 30 days after the date of the enactment of this 
Act. 
SEC. 
135103. 
PERMANENT 
MODIFICATION 
OF 
SMALL 
ISSUER EXCEPTION TO TAX-EXEMPT INTER-
EST EXPENSE ALLOCATION RULES FOR FI-
NANCIAL INSTITUTIONS. 
(a) PERMANENT INCREASE IN LIMITATION.—Sub-
paragraphs (C)(i), (D)(i), and (D)(iii)(II) of section 
265(b)(3) are each amended by striking ‘‘$10,000,000’’ 
and inserting ‘‘$30,000,000’’. 
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(b) PERMANENT MODIFICATION OF OTHER SPECIAL 
RULES.—Section 265(b)(3) is amended— 
(1) by redesignating clauses (iv), (v), and (vi) 
of subparagraph (G) as clauses (ii), (iii), and (iv), 
respectively, and moving such clauses to the end of 
subparagraph (H) (as added by paragraph (2)), and 
(2) by striking so much of subparagraph (G) as 
precedes such clauses and inserting the following: 
‘‘(G) QUALIFIED 501(c)(3) BONDS TREATED 
AS ISSUED BY EXEMPT ORGANIZATION.—In the 
case of a qualified 501(c)(3) bond (as defined 
in section 145), this paragraph shall be applied 
by treating the 501(c)(3) organization for 
whose benefit such bond was issued as the 
issuer. 
‘‘(H) SPECIAL
RULE
FOR
QUALIFIED 
FINANCINGS.— 
‘‘(i) IN GENERAL.—In the case of a 
qualified financing issue— 
‘‘(I) subparagraph (F) shall not 
apply, and 
‘‘(II) any obligation issued as a 
part of such issue shall be treated as 
a qualified tax-exempt obligation if 
the requirements of this paragraph 
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are met with respect to each qualified 
portion of the issue (determined by 
treating each qualified portion as a 
separate issue which is issued by the 
qualified borrower with respect to 
which such portion relates).’’. 
(c) INFLATION ADJUSTMENT.—Section 265(b)(3), as 
amended by subsection (b), is amended by adding at the 
end the following new subparagraph: 
‘‘(I) INFLATION
ADJUSTMENT.—In the 
case of any calendar year after 2021, the 
$30,000,000 amounts contained in subpara-
graphs (C)(i), (D)(i), and (D)(iii)(II) shall each 
be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for such 
calendar year, determined by substituting 
‘calendar year 2020’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
Any increase determined under the preceding 
sentence shall be rounded to the nearest mul-
tiple of $100,000.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 135104. MODIFICATIONS TO QUALIFIED SMALL ISSUE 
BONDS. 
(a) MANUFACTURING FACILITIES TO INCLUDE PRO-
DUCTION OF INTANGIBLE PROPERTY AND FUNCTIONALLY 
RELATED
FACILITIES.—Subparagraph (C) of section 
144(a)(12) is amended to read as follows: 
‘‘(C) 
MANUFACTURING
FACILITY.—For 
purposes of this paragraph— 
‘‘(i) IN GENERAL.—The term ‘manu-
facturing 
facility’ 
means 
any 
facility 
which— 
‘‘(I) is used in the manufacturing 
or production of tangible personal 
property (including the processing re-
sulting in a change in the condition of 
such property), 
‘‘(II) is used in the creation or 
production 
of 
intangible 
property 
which 
is 
described 
in 
section 
197(d)(1)(C)(iii), or 
‘‘(III) is functionally related and 
subordinate to a facility described in 
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subclause (I) or (II) if such facility is 
located on the same site as the facility 
described in subclause (I) or (II). 
‘‘(ii) 
CERTAIN
FACILITIES
IN-
CLUDED.—The term ‘manufacturing facil-
ity’ includes facilities that are directly re-
lated and ancillary to a manufacturing fa-
cility (determined without regard to this 
clause) if— 
‘‘(I) those facilities are located on 
the same site as the manufacturing 
facility, and 
‘‘(II) not more than 25 percent 
of the net proceeds of the issue are 
used to provide those facilities. 
‘‘(iii) 
LIMITATION
ON
OFFICE 
SPACE.—A rule similar to the rule of sec-
tion 142(b)(2) shall apply for purposes of 
clause (i). 
‘‘(iv) LIMITATION
ON
REFUNDINGS 
FOR CERTAIN PROPERTY.—Subclauses (II) 
and (III) of clause (i) shall not apply to 
any bond issued on or before the date of 
the enactment of the Act to provide for 
reconciliation pursuant to title II of S. 
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Con. Res. 14, or to any bond issued to re-
fund a bond issued on or before such date 
(other than a bond to which clause (iii) of 
this subparagraph (as in effect before the 
date of the enactment of such Act) ap-
plies), either directly or in a series of 
refundings.’’. 
(b) INCREASE IN LIMITATIONS.—Section 144(a)(4) is 
amended— 
(1) 
in 
subparagraph 
(A)(i), 
by 
striking 
‘‘$10,000,000’’ and inserting ‘‘$30,000,000’’, and 
(2) in the heading, by striking ‘‘$10,000,000’’ and 
inserting ‘‘$30,000,000’’. 
(c) 
ADJUSTMENT
FOR
INFLATION.—Section 
144(a)(4) is amended by adding at the end the following 
new subparagraph: 
‘‘(H) ADJUSTMENT
FOR
INFLATION.—In 
the case of any calendar year after 2021, the 
$30,000,000 amount in subparagraph (A) shall 
be increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
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‘calendar year 2020’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
If any amount as increased under the preceding 
sentence is not a multiple of $100,000, such 
amount shall be rounded to the nearest multiple 
of $100,000.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after the date 
of the enactment of this Act. 
SEC. 135105. EXPANSION OF CERTAIN EXCEPTIONS TO THE 
PRIVATE ACTIVITY BOND RULES FOR FIRST- 
TIME FARMERS. 
(a) INCREASE IN DOLLAR LIMITATION.— 
(1) IN
GENERAL.—Section 147(c)(2)(A) is 
amended by striking ‘‘$450,000’’ and inserting 
‘‘$552,500’’. 
(2) REPEAL OF SEPARATE LOWER DOLLAR LIM-
ITATION
ON
USED
FARM
EQUIPMENT.—Section 
147(c)(2) is amended by striking subparagraph (F) 
and by redesignating subparagraphs (G) and (H) as 
subparagraphs (F) and (G), respectively. 
(3) QUALIFIED SMALL ISSUE BOND LIMITATION 
CONFORMED TO INCREASED DOLLAR LIMITATION.— 
Section 144(a)(11)(A) is amended by striking 
‘‘$250,000’’ and inserting ‘‘$552,500’’. 
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(4) INFLATION ADJUSTMENT.— 
(A) IN
GENERAL.—Section 147(c)(2)(G), 
as redesignated by paragraph (2), is amended— 
(i) by striking ‘‘after 2008, the dollar 
amount in subparagraph (A) shall be in-
creased’’ and inserting ‘‘after 2021, the 
dollar amounts in subparagraph (A) and 
section 144(a)(11)(A) shall each be in-
creased’’, and 
(ii) in clause (ii), by striking ‘‘2007’’ 
and inserting ‘‘2020’’. 
(B) 
CROSS-REFERENCE.—Section 
144(a)(11) is amended by adding at the end the 
following new subparagraph: 
‘‘(D) INFLATION ADJUSTMENT.—For infla-
tion adjustment of dollar amount contained in 
subparagraph (A), see section 147(c)(2)(G).’’. 
(b) SUBSTANTIAL
FARMLAND
DETERMINED
ON 
BASIS
OF AVERAGE RATHER THAN MEDIAN FARM 
SIZE.—Section 147(c)(2)(E) is amended by striking ‘‘me-
dian’’ and inserting ‘‘average’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
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SEC. 135106. CERTAIN WATER AND SEWAGE FACILITY 
BONDS EXEMPT FROM VOLUME CAP ON PRI-
VATE ACTIVITY BONDS. 
(a) IN GENERAL.—Section 146(g) is amended by 
striking ‘‘and’’ at the end of paragraph (3), striking the 
period at the end of paragraph (4) and inserting ‘‘, and’’, 
and inserting after paragraph (4) the following new para-
graph: 
‘‘(5) any exempt facility bond issued as part of 
an issue described in paragraph (4) or (5) of section 
142(a) if 95 percent or more of the net proceeds of 
such issue are to be used to provide facilities 
which— 
‘‘(A) will be used— 
‘‘(i) by a person who was, as of July 
1, 2020, engaged in operation of a facility 
described in such paragraph, and 
‘‘(ii) to provide service within the area 
served by such person on such date (or 
within a county or city any portion of 
which is within such area), or 
‘‘(B) will be used by a successor in interest 
to such person for the same use and within the 
same service area as described in subparagraph 
(A).’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
SEC. 135107. EXEMPT FACILITY BONDS FOR ZERO-EMISSION 
VEHICLE INFRASTRUCTURE. 
(a) IN GENERAL.—Section 142 is amended— 
(1) in subsection (a)— 
(A) in paragraph (14), by striking ‘‘or’’ at 
the end, 
(B) in paragraph (15), by striking the pe-
riod at the end and inserting ‘‘, or’’, and 
(C) by adding at the end the following new 
paragraph: 
‘‘(16) zero-emission vehicle infrastructure.’’, 
and 
(2) by adding at the end the following new sub-
section: 
‘‘(n) ZERO-EMISSION VEHICLE INFRASTRUCTURE.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a)(16), the term ‘zero-emission vehicle infrastruc-
ture’ means any property (not including a building 
and its structural components) if such property is 
part of a unit which— 
‘‘(A) is used to charge or fuel zero-emis-
sions vehicles, 
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‘‘(B) is located where the vehicles are 
charged or fueled, 
‘‘(C) is of a character subject to the allow-
ance for depreciation (or amortization in lieu of 
depreciation), 
‘‘(D) is made available for use by members 
of the general public, 
‘‘(E) accepts payment via a credit card 
reader, including a credit card reader that uses 
contactless technology, and 
‘‘(F) is capable of charging or fueling vehi-
cles produced by more than one manufacturer 
(within the meaning of section 30D(d)(3)). 
‘‘(2) INCLUSION OF UTILITY SERVICE CONNEC-
TIONS, ETC.—The term ‘zero-emission vehicle infra-
structure’ shall include any utility service connec-
tions, utility panel upgrades, line extensions and 
conduit, transformer upgrades, or similar property, 
in connection with property meeting the require-
ments of paragraph (1). 
‘‘(3) ZERO-EMISSIONS
VEHICLE.—The term 
‘zero-emissions vehicle’ means— 
‘‘(A) a zero-emission vehicle as defined in 
section 88.102–94 of title 40, Code of Federal 
Regulations, or 
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‘‘(B) a vehicle that produces zero exhaust 
emissions of any criteria pollutant (or precursor 
pollutant) or greenhouse gas under any possible 
operational modes and conditions. 
‘‘(4) ZERO-EMISSIONS
VEHICLE
INFRASTRUC-
TURE
LOCATED
WITHIN
OTHER
FACILITIES
OR 
PROJECTS.—For purposes of subsection (a), any 
zero-emission vehicle infrastructure located within— 
‘‘(A) a facility or project described in sub-
section (a), or 
‘‘(B) an area adjacent to a facility or 
project described in subsection (a) that pri-
marily serves vehicles traveling to or from such 
facility or project, 
shall be treated as described in the paragraph in 
which such facility or project is described. 
‘‘(5) EXCEPTION
FOR
REFUELING
PROPERTY 
FOR
FLEET
VEHICLES.—Subparagraphs (D), (E), 
and (F) of paragraph (1) shall not apply to property 
which is part of a unit which is used exclusively by 
fleets of commercial or governmental vehicles.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to obligations issued after Decem-
ber 31, 2021. 
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SEC. 135108. APPLICATION OF DAVIS-BACON ACT REQUIRE-
MENTS WITH RESPECT TO CERTAIN EXEMPT 
FACILITY BONDS. 
(a) IN GENERAL.—Section 142(b) is amended by 
adding at the end the following new paragraph: 
‘‘(3) APPLICATION
OF
DAVIS-BACON
ACT
RE-
QUIREMENTS WITH RESPECT TO CERTAIN EXEMPT 
FACILITY BONDS.—If any proceeds of any issue are 
used for construction, alteration, or repair of any fa-
cility otherwise described in paragraph (4), (5), (15), 
or (16) of subsection (a), such facility shall be treat-
ed for purposes of subsection (a) as described in 
such paragraph only if each entity that receives such 
proceeds to conduct such construction, alteration, or 
repair agrees to comply with the provisions of sub-
chapter IV of chapter 31 of title 40, United States 
Code with respect to such construction, alteration, or 
repair.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to bonds issued after the date of 
the enactment of this Act. 
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Subpart B—Other Provisions Related to 
Infrastructure Financing 
SEC. 135111. CREDIT FOR OPERATIONS AND MAINTENANCE 
COSTS 
OF 
GOVERNMENT-OWNED 
BROADBAND. 
(a) IN GENERAL.—Subchapter B of chapter 65, as 
amended by the preceding provisions of this Act, is amend-
ed by inserting before section 6432 the following new sec-
tion: 
‘‘SEC. 6431B. CREDIT FOR OPERATIONS AND MAINTENANCE 
COSTS 
OF 
GOVERNMENT-OWNED 
BROADBAND. 
‘‘(a) IN GENERAL.—In the case of any eligible gov-
ernmental entity, there shall be allowed a credit equal to 
the applicable percentage of the qualified broadband ex-
penses paid or incurred by such entity during the taxable 
year which credit shall be payable by the Secretary as pro-
vided in subsection (b). 
‘‘(b) PAYMENT OF CREDIT.—Upon receipt from an 
eligible governmental entity of such information as the 
Secretary may require for purposes of carrying out this 
section, the Secretary shall pay to such entity the amount 
of the credit determined under subsection (a) for the tax-
able year. 
‘‘(c) 
LIMITATION.—The 
amount 
of 
qualified 
broadband expenses taken into account under this section 
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for any taxable year with respect to any qualified 
broadband network shall not exceed the product of $400 
multiplied by the number of qualified households sub-
scribed to the qualified broadband service provided by 
such network (determined as of any time during such tax-
able year). 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) APPLICABLE
PERCENTAGE.—The term 
‘applicable percentage’ means— 
‘‘(A) in the case of any taxable year begin-
ning in 2021 through 2026, 30 percent, 
‘‘(B) in the case of any taxable year begin-
ning in 2027, 26 percent, and 
‘‘(C) in the case of any taxable year begin-
ning in 2028, 24 percent. 
‘‘(2) ELIGIBLE GOVERNMENTAL ENTITY.—The 
term ‘eligible governmental entity’ means— 
‘‘(A) any State, local, or Indian tribal gov-
ernment, 
‘‘(B) any political subdivision or instru-
mentality of any government described in sub-
paragraph (A), and 
‘‘(C) any entity wholly owned by one or 
more entities described in subparagraph (A) or 
(B). 
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For purposes of this paragraph, the term ‘State’ in-
cludes any possession of the United States. 
‘‘(3) QUALIFIED BROADBAND EXPENSES.—The 
term ‘qualified broadband expenses’ means so much 
of the amounts paid or incurred for the operation 
and maintenance of a qualified broadband network 
as are properly allocable to qualified households sub-
scribed to the qualified broadband service provided 
by such network. 
‘‘(4) 
QUALIFIED
HOUSEHOLD.—The 
term 
‘qualified household’ means a personal residence 
which— 
‘‘(A) is located in a low-income community 
(as defined in section 45D(e)), and 
‘‘(B) did not have access to qualified 
broadband service from the eligible govern-
mental entity (determined as of the beginning 
of the taxable year of such entity). 
‘‘(5) QUALIFIED BROADBAND NETWORK.—The 
term ‘qualified broadband network’ means property 
owned by an eligible governmental entity and used 
for the purpose of providing qualified broadband 
service. 
‘‘(6) QUALIFIED
BROADBAND
SERVICE.—The 
term ‘qualified broadband service’ means fixed, ter-
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restrial broadband service providing downloads at a 
speed of at least 25 megabits per second and 
uploads at a speed of at least 3 megabits per second. 
‘‘(7) TAXABLE YEAR.—Except as otherwise pro-
vided by the Secretary, the term ‘taxable year’ 
means, with respect to any eligible governmental en-
tity, the fiscal year of such entity. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) ALLOCATIONS.—For purposes of sub-
section (d)(3), amounts shall be treated as properly 
allocated if allocated ratably among the subscribers 
of the qualified broadband service. 
‘‘(2) DENIAL OF DOUBLE BENEFIT.—Qualified 
broadband expenses shall not include any amount 
which is paid or reimbursed (directly or indirectly) 
by any grant from the Federal Government. 
‘‘(f) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section. 
‘‘(g) TERMINATION.—No credit shall be allowed 
under this section for any taxable year beginning after De-
cember 31, 2028.’’. 
(b) PAYMENTS MADE UNDER SECTION 6431B(b) OF 
INTERNAL REVENUE CODE OF 1986.—Section 255(h) of 
the Balanced Budget and Emergency Deficit Control Act 
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of 1985 (2 U.S.C. 905(h)) is amended by inserting: ‘‘Pay-
ments made under section 6431B(b) of the Internal Rev-
enue Code of 1986’’ after the item related to Payments 
for Foster Care and Permanency. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1324(b)(2) of title 31, United 
States Code, as amended by the preceding provisions 
of this Act, is amended by striking ‘‘or 6431A’’ and 
inserting ‘‘6431A, or 6431B’’. 
(2) The table of sections for subchapter B of 
chapter 65, as amended by the preceding provisions 
of this Act, is amended by inserting before the item 
relating to section 6432 the following new item: 
‘‘Sec. 6431B. Credit for operations and maintenance costs of government- 
owned broadband.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
PART 2—NEW MARKETS TAX CREDIT 
SEC. 135201. PERMANENT EXTENSION OF NEW MARKETS 
TAX CREDIT. 
(a) TEMPORARY LIMIT INCREASE AND PERMANENT 
EXTENSION.—Section 45D(f)(1) is amended by striking 
‘‘and’’ at the end of subparagraph (G) and by striking 
subparagraph (H) and inserting the following new sub-
paragraphs: 
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‘‘(H) $5,000,000,000 for each of calendar 
years 2020 and 2021, 
‘‘(I) $7,000,000,000 for calendar year 
2022, 
‘‘(J) $6,000,000,000 for calendar year 
2023, and 
‘‘(K) $5,000,000,000 for calendar year 
2024 and each calendar year thereafter.’’. 
(b) ALTERNATIVE MINIMUM TAX RELIEF.—Section 
38(c)(4)(B) is amended— 
(1) by redesignating clauses (v) through (xii) as 
clauses (vi) through (xiii), respectively, and 
(2) by inserting after clause (iv) the following 
new clause: 
‘‘(v) the credit determined under sec-
tion 45D, but only with respect to credits 
determined with respect to qualified equity 
investments (as defined in section 45D(b)) 
initially made after December 31, 2021,’’. 
(c) INFLATION ADJUSTMENT.—Section 45D(f) is 
amended by adding at the end the following new para-
graph: 
‘‘(4) INFLATION ADJUSTMENT.— 
‘‘(A) IN GENERAL.—In the case of any cal-
endar year beginning after 2024, the dollar 
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amount paragraph (1)(H) shall be increased by 
an amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year, determined by substituting 
‘calendar year 2023’ for ‘calendar year 
2016’ in subparagraph (A)(ii) thereof. 
‘‘(B) ROUNDING
RULE.—Any increase 
under subparagraph (A) which is not a multiple 
of $1,000,000 shall be rounded to the nearest 
multiple of $1,000,000.’’. 
(d) CONFORMING AMENDMENT.—Section 45D(f)(3) 
is amended by striking the last sentence. 
(e) EFFECTIVE DATES.— 
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by 
this section shall apply to new markets tax credit 
limitation determined for calendar years after 2021. 
(2) ALTERNATIVE MINIMUM TAX RELIEF.—The 
amendments made by subsection (b) shall apply to 
credits determined with respect to qualified equity 
investments (as defined in section 45D(b) of the In-
ternal Revenue Code of 1986) initially made after 
December 31, 2021. 
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PART 3—REHABILITATION TAX CREDIT 
SEC. 135301. DETERMINATION OF CREDIT PERCENTAGE. 
(a) IN GENERAL.—Section 47(a)(2) is amended by 
striking ‘‘20 percent’’ and inserting ‘‘the applicable per-
centage’’. 
(b) APPLICABLE PERCENTAGE.—Section 47(a) is 
amended by adding at the end the following new para-
graph: 
‘‘(3) APPLICABLE PERCENTAGE.—For purposes 
of this subsection, the term ‘applicable percentage’ 
means the percentage determined in accordance with 
the following table: 
‘‘In the case of taxable years begin-
ning: 
The applicable percentage is: 
Before 2020 ..........................................
20 percent 
In 2020 through 2025 .........................
30 percent 
In 2026 .................................................
26 percent 
In 2027 .................................................
23 percent 
After 2027 ............................................
20 percent 
‘‘(4) APPLICATION OF PERCENTAGES TO YEAR 
OF EXPENDITURE.—In the case of qualified rehabili-
tation expenditures with respect to the qualified re-
habilitated building that are paid or incurred in 2 or 
more taxable years for which there is a different ap-
plicable percentage under paragraph (3), the ratable 
share shall be determined by applying to such ex-
penditures the applicable percentage corresponding 
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to the taxable year in which such expenditures were 
paid or incurred.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
March 31, 2021. 
SEC. 135302. INCREASE IN THE REHABILITATION CREDIT 
FOR CERTAIN SMALL PROJECTS. 
(a) IN GENERAL.—Section 47 is amended by adding 
at the end the following new subsection: 
‘‘(e) SPECIAL RULE REGARDING CERTAIN SMALLER 
PROJECTS.— 
‘‘(1) IN GENERAL.—In the case of any smaller 
project— 
‘‘(A) the applicable percentage determined 
under subsection (a)(3) shall be 30 percent, and 
‘‘(B) the qualified rehabilitation expendi-
tures taken into account under this section with 
respect to such project shall not exceed 
$2,500,000. 
‘‘(2) SMALLER PROJECT.—For purposes of this 
subsection, the term ‘smaller project’ means the re-
habilitation of any qualified rehabilitated building 
if— 
‘‘(A) the qualified rehabilitation expendi-
tures taken into account under this section (or 
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which would be so taken into account but for 
paragraph (1)(B)) with respect to such rehabili-
tation do not exceed $3,750,000, 
‘‘(B) no credit was allowed under this sec-
tion with respect to such building to any tax-
payer for either of the 2 taxable years imme-
diately preceding the first taxable year in which 
expenditures described in subparagraph (A) 
were paid or incurred, and 
‘‘(C) the taxpayer elects (at such time and 
manner as the Secretary may provide) to have 
this subsection apply with respect to such reha-
bilitation.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
December 31, 2021. 
SEC. 135303. MODIFICATION OF DEFINITION OF SUBSTAN-
TIALLY REHABILITATED. 
(a) IN
GENERAL.—Section 47(c)(1)(B)(i)(I) is 
amended by inserting ‘‘50 percent of’’ before ‘‘the ad-
justed basis’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to determinations with respect 
to 24-month periods (referred to in clause (i) of section 
47(c)(1)(B) of the Internal Revenue Code of 1986) and 
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60-month periods (referred to in clause (ii) of such sec-
tion) which end after December 31, 2021. 
SEC. 135304. ELIMINATION OF REHABILITATION CREDIT 
BASIS ADJUSTMENT. 
(a) IN GENERAL.—Section 50(c) is amended by add-
ing at the end the following new paragraph: 
‘‘(6) EXCEPTION FOR REHABILITATION CRED-
IT.—In the case of the rehabilitation credit, para-
graph (1) shall not apply.’’. 
(b) TREATMENT IN CASE OF CREDIT ALLOWED TO 
LESSEE.—Section 50(d) is amended by adding at the end 
the following: ‘‘In the case of the rehabilitation credit, 
paragraph (5)(B) of the section 48(d) referred to in para-
graph (5) of this subsection shall not apply.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property placed in service after 
December 31, 2022. 
SEC. 135305. MODIFICATIONS REGARDING CERTAIN TAX-EX-
EMPT USE PROPERTY. 
(a) IN GENERAL.—Section 47(c)(2)(B)(v) is amend-
ed by adding at the end the following new subclause: 
‘‘(III) 
DISQUALIFIED
LEASE 
RULES TO APPLY ONLY IN CASE OF 
GOVERNMENT ENTITY.—For purposes 
of subclause (I), except in the case of 
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a tax-exempt entity described in sec-
tion 168(h)(2)(A)(i) (determined with-
out regard to the last sentence of sec-
tion 168(h)(2)(A)), the determination 
of whether property is tax-exempt use 
property shall be made under section 
168(h) without regard to whether the 
property is leased in a disqualified 
lease 
(as 
defined 
in 
section 
168(h)(1)(B)(ii)).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to leases entered into after Decem-
ber 31, 2021. 
SEC. 135306. QUALIFICATION OF REHABILITATION EXPEND-
ITURES FOR PUBLIC SCHOOL BUILDINGS 
FOR REHABILITATION CREDIT. 
(a) IN GENERAL.—Section 47(c)(2)(B)(v), as amend-
ed by the preceding provisions of this Act, is amended by 
adding at the end the following new subclause: 
‘‘(IV) CLAUSE NOT TO APPLY TO 
PUBLIC SCHOOLS.—This clause shall 
not apply in the case of the rehabilita-
tion of any building which was used 
as a qualified public educational facil-
ity (as defined in section 142(k)(1), 
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determined without regard to sub-
paragraph (B) thereof) at any time 
during the 5-year period ending on 
the date that such rehabilitation be-
gins and which is used as such a facil-
ity immediately after such rehabilita-
tion.’’. 
(b) REPORT.—Not later than the date which is 5 
years after the date of the enactment of this Act, the Sec-
retary of the Treasury, after consultation with the heads 
of appropriate Federal agencies, shall report to Congress 
on the effects resulting from the amendment made by sub-
section (a), including— 
(1) the number of qualified public education fa-
cilities rehabilitated (stated separately with respect 
to each State) and the number of students using 
such facilities (stated separately with respect to each 
such State), 
(2) the number of qualified public education fa-
cilities rehabilitated in low income communities (as 
section 45D(e)(1) of the Internal Revenue Code of 
1986) and the number of students using such facili-
ties, 
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(3) the amount of qualified rehabilitation ex-
penditures for each qualified public education facility 
rehabilitated, and 
(4) and any other data determined by the Sec-
retary to be useful in evaluating the impact of such 
amendment. 
(c) EFFECTIVE DATE.—The amendment made by 
this section shall apply to property placed in service after 
December 31, 2021. 
PART 4—DISASTER AND RESILIENCY 
SEC. 135401. EXCLUSION OF AMOUNTS RECEIVED FROM 
STATE-BASED CATASTROPHE LOSS MITIGA-
TION PROGRAMS. 
(a) IN GENERAL.—Section 139 is amended by redes-
ignating subsection (h) as subsection (i) and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) STATE-BASED CATASTROPHE LOSS MITIGATION 
PROGRAMS.— 
‘‘(1) IN GENERAL.—Gross income shall not in-
clude any amount received by an individual as a 
qualified catastrophe mitigation payment under a 
program established by a State, or a political sub-
division or instrumentality thereof, for the purpose 
of making such payments. 
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‘‘(2) QUALIFIED
CATASTROPHE
MITIGATION 
PAYMENT.—For purposes of this section, the term 
‘qualified catastrophe mitigation payment’ means 
any amount which is received by an individual to 
make improvements to such individual’s residence 
for the sole purpose of reducing the damage that 
would be done to such residence by a windstorm, 
earthquake, or wildfire. 
‘‘(3) NO INCREASE IN BASIS.—Rules similar to 
the rules of subsection (g)(3) shall apply in the case 
of this subsection.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 139(d) is amended by striking ‘‘and 
qualified’’ and inserting ‘‘, qualified catastrophe 
mitigation payments, and qualified’’. 
(2) Section 139(i) (as redesignated by sub-
section (a)) is amended by striking ‘‘or qualified’’ 
and inserting ‘‘, qualified catastrophe mitigation 
payment, or qualified’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2020. 
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SEC. 135402. REPEAL OF TEMPORARY LIMITATION ON PER-
SONAL CASUALTY LOSSES. 
(a) IN GENERAL.—Section 165(h) is amended by 
striking paragraph (5). 
(b) EXTENSION OF PERIOD OF LIMITATION ON FIL-
ING CLAIM IN CERTAIN CIRCUMSTANCES.—In the case of 
a claim for credit or refund which is properly allocable 
to a loss which is— 
(1) deductible under section 165(a) of the In-
ternal Revenue Code of 1986, 
(2) described in Revenue Procedure 2017-60 
(as modified by Revenue Procedure 2018-14), and 
(3) claimed for a taxable year beginning after 
December 31, 2016, 
the period of limitation prescribed in section 6511 of the 
Internal Revenue Code of 1986 for the filing of such claim 
shall be treated as not expiring earlier than the date that 
is 1 year after the date of the enactment of this Act. 
(c) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to losses incurred in taxable 
years beginning after December 31, 2017. 
(d) REGULATIONS.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall issue such regulations 
or other guidance as are necessary to implement the 
amendment made by this section, including regulations or 
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guidance consistent with Revenue Procedure 2017–60 (as 
so modified). 
SEC. 135403. CREDIT FOR QUALIFIED WILDFIRE MITIGA-
TION EXPENDITURES. 
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 27 the following new section: 
‘‘SEC. 28. QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES. 
‘‘(a) IN GENERAL.—There shall be allowed as a cred-
it against the tax imposed by this chapter for the taxable 
year an amount equal to 30 percent of the qualified wild-
fire mitigation expenditures paid or incurred by the tax-
payer during such taxable year with respect to real prop-
erty owned or leased by the taxpayer. 
‘‘(b) QUALIFIED WILDFIRE MITIGATION EXPENDI-
TURES.—For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified wildfire 
mitigation expenditures’ means any specified wildfire 
mitigation expenditure made pursuant to a qualified 
State wildfire mitigation program of a State which 
requires expenditures for wildfire mitigation to be 
paid both by the taxpayer and such State. Such 
term shall not include any item of expenditure un-
less the ratio of the State’s expenditure for such 
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item to the sum of the State’s and taxpayer’s ex-
penditures for such item is not less than 25 percent. 
‘‘(2) SPECIFIED
WILDFIRE
MITIGATION
EX-
PENDITURE.—The term ‘specified wildfire mitigation 
expenditure’ means, with respect to any real prop-
erty owned or leased by the taxpayer, any amount 
paid or incurred to reduce the risk of wildfire by re-
moving accumulations of vegetation (including estab-
lishing, expanding, or maintaining fuel breaks to 
serve as fire breaks) on such real property. 
‘‘(3) QUALIFIED STATE WILDFIRE MITIGATION 
PROGRAM.—The term ‘qualified State wildfire miti-
gation program’ means any program of a State the 
primary purpose of which is to mitigate the risk of 
wildfires in such State. 
‘‘(4) TREATMENT OF REIMBURSEMENTS.—Any 
amount originally paid or incurred by the taxpayer 
which is reimbursed by a State under a qualified 
wildfire mitigation program of such State shall be 
treated as paid by such State (and not by such tax-
payer). 
‘‘(c) APPLICATION WITH OTHER CREDITS.— 
‘‘(1) BUSINESS CREDIT TREATED AS PART OF 
GENERAL BUSINESS CREDIT.—So much of the credit 
which would be allowed under subsection (a) for any 
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taxable year (determined without regard to this sub-
section) that is attributable to expenditures made in 
the ordinary course of the taxpayer’s trade or busi-
ness (or, in the case of expenditures made by a 
State, would have been expenditures made in the or-
dinary course of the taxpayer’s trade or business if 
made by the taxpayer) shall be treated as a credit 
listed in section 38(b) for taxable year (and not al-
lowed under subsection (a)). 
‘‘(2) PERSONAL CREDIT.—For purposes of this 
title, the credit allowed under subsection (a) for any 
taxable year (determined after application of para-
graph (1)) shall be treated as a credit allowable 
under subpart A for such taxable year. 
‘‘(d) REDUCTION OF CREDIT PERCENTAGE WHERE 
TAXPAYER EXPENDITURES LESS THAN 30 PERCENT.— 
‘‘(1) IN GENERAL.—If the expenditure percent-
age with respect to any item of qualified wildfire 
mitigation expenditure is less than 30 percent, sub-
section (a) shall be applied by substituting ‘the ex-
penditure percentage’ for ‘30 percent’ with respect 
to such item of expenditure. 
‘‘(2) EXPENDITURE
PERCENTAGE.—For pur-
poses of this section, the term ‘expenditure percent-
age’ means, with respect to any item of qualified 
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wildfire mitigation expenditure any portion of which 
is paid or incurred by a State, the ratio (expressed 
as a percentage) of— 
‘‘(A) the taxpayer’s expenditure for such 
item, divided by 
‘‘(B) the sum of the taxpayer’s and such 
State’s expenditures for such item. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) TREATMENT OF EXPENDITURES RELATED 
TO MARKETABLE TIMBER.—An expenditure shall not 
be taken into account for purposes of this section 
(whether made by the taxpayer or a State pursuant 
to a qualified State wildfire mitigation program of 
such State) if such expenditure is properly allocable 
to timber which is sold or exchanged by the tax-
payer. The preceding sentence shall not apply to the 
extent that such amount exceeds the gain on such 
sale or exchange. 
‘‘(2) BASIS REDUCTION.—For purposes of this 
subtitle, if the basis of any property would (but for 
this paragraph) be determined by taking into ac-
count any qualified wildfire mitigation expenditure, 
the basis of such property shall be reduced by the 
amount of the credit allowed under subsection (a) 
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with respect to such expenditure (determined with-
out regard to subsection (c)). 
‘‘(3) DENIAL
OF
DOUBLE
BENEFIT.—The 
amount of any deduction or other credit allowable 
under this chapter for any expenditure for which a 
credit is allowable under subsection (a) shall be re-
duced by the amount of credit allowed under such 
subsection for such expenditure (determined without 
regard to subsection (c)).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 38(b), as amended by the preceding 
provisions of this Act, is amended by striking ‘‘plus’’ 
at the end of paragraph (33), by striking the period 
at the end of paragraph (34) and inserting ‘‘, plus’’, 
and by adding at the end the following new para-
graph: 
‘‘(35) the portion of the qualified wildfire miti-
gation expenditures credit to which section 28(c)(1) 
applies.’’. 
(2) Section 1016(a) is amended by redesig-
nating paragraphs (35) through (38) as paragraphs 
(36) through (39), respectively, and by inserting 
after paragraph (34) the following new paragraph: 
‘‘(35) to the extent provided in section 
28(e)(2),’’. 
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(3) The table of sections for subpart B of part 
IV of subchapter A of chapter 1 is amended by in-
serting after the item relating to section 27 the fol-
lowing new item: 
‘‘Sec. 28. Qualified wildfire mitigation expenditures.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to expenditures paid or incurred 
after the date of the enactment of this Act, in taxable 
years ending after such date. 
PART 5—HOUSING 
Subpart A—Low Income Housing Tax Credit 
SEC. 135501. INCREASES IN STATE ALLOCATIONS. 
(a) IN GENERAL.—Section 42(h)(3)(I) is amended to 
read as follows: 
‘‘(I) INCREASE IN STATE HOUSING CREDIT 
CEILING FOR 2022 THROUGH 2028.— 
‘‘(i) IN GENERAL.—In the case of cal-
endar years 2022 through 2028, the dollar 
amounts under subclauses (I) and (II) of 
subparagraph (C)(ii) for any such calendar 
shall be determined under clause (ii) and 
in accordance with the following table: 
‘‘In the case of calendar year: 
The sub-
clause (I) 
amount 
shall be: 
The sub-
clause (II) 
amount 
shall be: 
2022 ........................................................................
$3.22 
$3,711,575 
2023 ........................................................................
$3.70 
$4,269,471 
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‘‘In the case of calendar year: 
The sub-
clause (I) 
amount 
shall be: 
The sub-
clause (II) 
amount 
shall be: 
2024 ........................................................................
$4.25 
$4,901,620 
2025 ........................................................................
$4.88 
$5,632,880 
‘‘(ii) INFLATION
ADJUSTMENT
FOR 
2026, 2027, AND 2028.—In the case of 
calendar years 2026, 2027, and 2028, the 
subclause (I) and (II) dollar amounts shall 
be the respective dollar amounts cor-
responding to calendar year 2025 in the 
table under clause (i) each increased by an 
amount equal to— 
‘‘(I) such dollar amount, multi-
plied by 
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3) 
for such calendar year by substituting 
‘calendar year 2025’ for ‘calendar 
year 2016’ in paragraph (A)(ii) there-
of. 
Any increase under this clause shall be 
rounded to the nearest cent in the case of 
the subclause (I) amount and the nearest 
dollar in the case of the subclause (II) 
amount.’’. 
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(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to calendar years beginning after 
December 31, 2021. 
SEC. 135502. TAX-EXEMPT BOND FINANCING REQUIRE-
MENT. 
(a) IN GENERAL.—Section 42(h)(4)(B) is amended 
by adding at the end the following: ‘‘The preceding sen-
tence shall be applied by substituting ‘25 percent’ for ‘50 
percent’ in the case of any building which is financed by 
any obligation issued in calendar year 2022, 2023, 2024, 
2025, 2026, 2027, or 2028 (and not by any obligation on 
which the application of this subparagraph is based during 
any taxable year beginning during calendar year 2019, 
2020, or 2021).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to buildings placed in service in 
taxable years beginning after December 31, 2021. 
SEC. 135503. BUILDINGS DESIGNATED TO SERVE EX-
TREMELY LOW-INCOME HOUSEHOLDS. 
(a) RESERVED STATE ALLOCATION.— 
(1) IN GENERAL.—Section 42(h) is amended— 
(A) by redesignating paragraphs (6), (7), 
and (8) as paragraphs (7), (8), and (9), respec-
tively, and 
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(B) by inserting after paragraph (5) the 
following new paragraph: 
‘‘(6) PORTION
OF
STATE
CEILING
SET-ASIDE 
FOR PROJECTS DESIGNATED TO SERVE EXTREMELY 
LOW-INCOME HOUSEHOLDS.— 
‘‘(A) IN
GENERAL.—Not more than 90 
percent of the portion of the State housing 
credit ceiling amount described in paragraph 
(3)(C)(ii) for any State for any calendar year 
shall be allocated to buildings other than build-
ings described in subparagraph (B). 
‘‘(B) BUILDINGS DESCRIBED.—A building 
is described in this subparagraph if 20 percent 
or more of the residential units in such building 
are rent-restricted (determined as if the im-
puted income limitation applicable to such units 
were 30 percent of area median gross income) 
and are designated by the taxpayer for occu-
pancy by households the aggregate household 
income of which does not exceed the greater 
of— 
‘‘(i) 30 percent of area median gross 
income, or 
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‘‘(ii) 100 percent of an amount equal 
to the Federal poverty line (within the 
meaning of section 36B(d)(3)). 
‘‘(C) STATE
MAY
NOT
OVERRIDE
SET- 
ASIDE.—Nothing in subparagraph (F) of para-
graph (3) shall be construed to permit a State 
not to comply with subparagraph (A) of this 
paragraph. 
‘‘(D) 
TERMINATION.—This 
paragraph 
shall not apply to allocations after December 
31, 2031.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
42(b)(4)(C) is amended by striking ‘‘(h)(7)’’ and in-
serting ‘‘(h)(8)’’. 
(b) INCREASE IN CREDIT.—Paragraph (5) of section 
42(d) is amended by adding at the end the following new 
subparagraph: 
‘‘(C) INCREASE IN CREDIT FOR PROJECTS 
DESIGNATED
TO
SERVE
EXTREMELY
LOW-IN-
COME HOUSEHOLDS.— 
‘‘(i) IN GENERAL.—In the case of any 
building— 
‘‘(I) which is described in sub-
section (h)(6)(B), and 
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‘‘(II) which is designated by the 
housing credit agency as requiring the 
increase in credit under this subpara-
graph in order for such building to be 
financially feasible as part of a quali-
fied low-income housing project, 
subparagraph (B) shall not apply to the 
portion of such building which is comprised 
of such units, and the eligible basis of such 
portion of the building shall be 150 per-
cent of such basis determined without re-
gard to this subparagraph. 
‘‘(ii) ALLOCATION RULES APPLICABLE 
TO PROJECTS TO WHICH CLAUSE (i) AP-
PLIES.— 
‘‘(I) STATE
HOUSING
CREDIT 
CEILING.—For any calendar year, the 
housing credit agency shall not allo-
cate more than 15 percent of the por-
tion of the State housing credit ceiling 
amount 
described 
in 
subsection 
(h)(3)(C)(ii) to buildings to which 
clause (i) applies, and 
‘‘(II) PRIVATE
ACTIVITY
BOND 
VOLUME CAP.—In the case of projects 
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financed by tax-exempt bonds as de-
scribed in subsection (h)(4), for any 
calendar year, the State shall not 
issue more than 10 percent of the pri-
vate activity bond volume cap as de-
scribed in section 146(d)(1) to build-
ings to which clause (i) applies. 
‘‘(iii) TERMINATION.—This subpara-
graph shall not apply to allocations after 
December 31, 2031.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to allocations, and determinations, 
of housing credit dollar amount after December 31, 2021. 
SEC. 135504. INCLUSION OF RURAL AREAS AS DIFFICULT 
DEVELOPMENT AREAS. 
(a) 
IN
GENERAL.—Subclause 
(I) 
of 
section 
42(d)(5)(B)(iii) is amended by inserting before the period 
the following: ‘‘, and any rural area’’. 
(b) 
RURAL
AREA.—Clause 
(iii) 
of 
section 
42(d)(5)(B) is amended by redesignating subclause (II) 
as subclause (III) and by inserting after subclause (I) the 
following new subclause: 
‘‘(II) RURAL
AREA.—For pur-
poses of subclause (I), the term ‘rural 
area’ means any non-metropolitan 
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area, or any rural area as defined by 
section 520 of the Housing Act of 
1949, which is identified by the quali-
fied 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, 2021. 
SEC. 135505. REPEAL OF QUALIFIED CONTRACT OPTION. 
(a) TERMINATION OF OPTION FOR CERTAIN BUILD-
INGS.— 
(1) IN
GENERAL.—Subclause (II) of section 
42(h)(7)(E)(i), as redesignated by section 135503, is 
amended by inserting ‘‘in the case of a building de-
scribed in clause (iii),’’ before ‘‘on the last day’’. 
(2) 
BUILDINGS
DESCRIBED.—Subparagraph 
(E) of section 42(h)(7), as so redesignated, is 
amended by adding at the end the following new 
clause: 
‘‘(iii) 
BUILDINGS
DESCRIBED.—A 
building described in this clause is a build-
ing— 
‘‘(I) which received its allocation 
of housing credit dollar amount before 
January 1, 2022, or 
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‘‘(II) in the case of a building 
any portion of which is financed as 
described in paragraph (4), which re-
ceived before January 1, 2022, a de-
termination from the issuer of the 
tax-exempt bonds or the housing cred-
it agency that the building is eligible 
to receive an allocation of housing 
credit dollar amount under the rules 
of paragraphs (1) and (2) of sub-
section (m).’’. 
(b) RULES RELATING TO EXISTING PROJECTS.— 
Subparagraph (F) of section 42(h)(7), as redesignated by 
section 135503, is amended by striking ‘‘the nonlow-in-
come portion’’ and all that follows and inserting ‘‘the 
nonlow-income portion and the low-income portion of the 
building for fair market value (determined by the housing 
credit agency by taking into account the rent restrictions 
required for the low-income portion of the building to con-
tinue to meet the standards of paragraphs (1) and (2) of 
subsection (g)). The Secretary shall prescribe such regula-
tions as may be necessary or appropriate to carry out this 
paragraph.’’. 
(c) CONFORMING AMENDMENTS.— 
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(1) Paragraph (7) of section 42(h), as redesig-
nated by section 135503, is amended by striking 
subparagraph (G) and by redesignating subpara-
graphs (H), (I), (J), and (K) as subparagraphs (G), 
(H), (I), and (J), respectively. 
(2) Subclause (II) of section 42(h)(7)(E)(i), as 
so redesignated and as amended by subsection (a), 
is further amended by striking ‘‘subparagraph (I)’’ 
and inserting ‘‘subparagraph (H)’’. 
(d) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section 
shall take effect on the date of the enactment of this 
Act. 
(2) SUBSECTION (b).—The amendments made 
by subsection (b) shall apply to buildings with re-
spect to which a written request described in section 
42(h)(7)(H) of the Internal Revenue Code of 1986, 
as redesignated by section 135503 and subsection 
(c), is submitted after the date of the enactment of 
this Act. 
SEC. 
135506. 
MODIFICATION 
AND 
CLARIFICATION 
OF 
RIGHTS RELATING TO BUILDING PURCHASE. 
(a) MODIFICATION OF RIGHT OF FIRST REFUSAL.— 
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(1) IN GENERAL.—Subparagraph (A) of section 
42(i)(7) is amended by striking ‘‘a right of 1st re-
fusal’’ and inserting ‘‘an option’’. 
(2) CONFORMING AMENDMENT.—The heading 
of paragraph (7) of section 42(i) is amended by 
striking ‘‘RIGHT
OF
1ST
REFUSAL’’ and inserting 
‘‘OPTION’’. 
(b) CLARIFICATION WITH RESPECT TO RIGHT OF 
FIRST REFUSAL AND PURCHASE OPTIONS.— 
(1) PURCHASE OF PARTNERSHIP INTEREST.— 
Subparagraph (A) of section 42(i)(7), as amended 
by subsection (a), is amended by striking ‘‘the prop-
erty’’ and inserting ‘‘the property or all of the part-
nership interests (other than interests of the person 
exercising such option or a related party thereto 
(within the meaning of section 267(b) or 707(b)(1))) 
relating to the property’’. 
(2) PROPERTY INCLUDES ASSETS RELATING TO 
THE BUILDING.—Paragraph (7) of section 42(i) is 
amended by adding at the end the following new 
subparagraph: 
‘‘(C) PROPERTY.—For purposes of sub-
paragraph (A), the term ‘property’ may include 
all or any of the assets held for the develop-
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ment, operation, or maintenance of a build-
ing.’’. 
(3) EXERCISE OF RIGHT OF FIRST REFUSAL 
AND
PURCHASE
OPTIONS.—Subparagraph (A) of 
section 42(i)(7), as amended by subsection (a) and 
paragraph (1)(A), is amended by adding at the end 
the following: ‘‘For purposes of determining whether 
an option, including a right of first refusal, to pur-
chase property or partnership interests holding (di-
rectly or indirectly) such property is described in the 
preceding sentence— 
‘‘(i) such option or right of first re-
fusal shall be exercisable with or without 
the approval of any owner of the project 
(including any partner, member, or affili-
ated organization of such an owner), and 
‘‘(ii) a right of first refusal shall be 
exercisable in response to any offer to pur-
chase the property or partnership interests, 
including an offer by a related party.’’. 
(c) CONFORMING AMENDMENTS.—Subparagraph (B) 
of section 42(i)(7) is amended by striking ‘‘the sum of’’ 
and all that follows and inserting ‘‘the principal amount 
of outstanding indebtedness secured by the building (other 
than indebtedness incurred within the 5-year period end-
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ing on the date of the sale to the tenants). In the case 
of a purchase of a partnership interest, the minimum pur-
chase price is an amount not less than such interest’s rat-
able share of the amount determined under the first sen-
tence of this subparagraph.’’. 
(d) EFFECTIVE DATES.— 
(1) MODIFICATION
OF
RIGHT
OF
FIRST
RE-
FUSAL.—The amendments made by subsections (a) 
and (c) shall apply to agreements entered into or 
amended after the date of the enactment of this Act. 
(2) CLARIFICATION.—The amendments made 
by subsection (b) shall apply to agreements among 
the owners of the project (including partners, mem-
bers, and their affiliated organizations) and persons 
described in section 42(i)(7)(A) of the Internal Rev-
enue Code of 1986 entered into before, on, or after 
the date of the enactment of this Act. 
(3) NO EFFECT ON AGREEMENTS.—None of the 
amendments made by this section is intended to su-
persede express language in any agreement with re-
spect to the terms of a right of first refusal or op-
tion permitted by section 42(i)(7) of the Internal 
Revenue Code of 1986 in effect on the date of the 
enactment of this Act. 
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SEC. 135507. INCREASE IN CREDIT FOR BOND-FINANCED 
PROJECTS DESIGNATED BY HOUSING CREDIT 
AGENCY. 
(a) IN GENERAL.—Section 42(d)(5)(B)(v) is amend-
ed by striking ‘‘The preceding sentence’’ and inserting ‘‘In 
the case of determinations of housing credit dollar amount 
after December 31, 2028, the preceding sentence’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to buildings which receive a deter-
mination of housing credit dollar amount pursuant to sec-
tion 42(m)(2)(D) of the Internal Revenue Code of 1986 
after the date of the enactment of this Act. 
Subpart B—Neighborhood Homes Investment Act 
SEC. 135511. NEIGHBORHOOD HOMES CREDIT. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 is amended by inserting after sec-
tion 42 the following new section: 
‘‘SEC. 42A. NEIGHBORHOOD HOMES CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec-
tion 38, the neighborhood homes credit determined under 
this section for the taxable year is, with respect to each 
qualified residence sold by the taxpayer during such tax-
able year in an affordable sale, the lesser of— 
‘‘(1) the excess (if any) of— 
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‘‘(A) the reasonable development costs paid 
or incurred by the taxpayer with respect to such 
qualified residence, over 
‘‘(B) the sale price of such qualified resi-
dence (reduced by any reasonable expenses paid 
or incurred by the taxpayer in connection with 
such sale), or 
‘‘(2) 35 percent of the lesser of— 
‘‘(A) the eligible development costs paid or 
incurred by the taxpayer with respect to such 
qualified residence, or 
‘‘(B) 80 percent of the national median 
sale price for new homes (as determined pursu-
ant to the most recent census data available as 
of the date on which the neighborhood homes 
credit agency makes an allocation for the quali-
fied project). 
‘‘(b) DEVELOPMENT COSTS.—For purposes of this 
section— 
‘‘(1) REASONABLE DEVELOPMENT COSTS.— 
‘‘(A) IN GENERAL.—The term ‘reasonable 
development costs’ means amounts paid or in-
curred for the acquisition of buildings and land, 
construction, substantial rehabilitation, demoli-
tion of structures, or environmental remedi-
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ation, to the extent that the neighborhood 
homes credit agency determines that such 
amounts meet the standards specified pursuant 
to subsection (f)(1)(C) (as of the date on which 
construction or substantial rehabilitation is sub-
stantially complete, as determined by such 
agency) and are necessary to ensure the finan-
cial feasibility of such qualified residence. 
‘‘(B) CONSIDERATIONS IN MAKING DETER-
MINATION.—In making the determination under 
subparagraph (A), the neighborhood homes 
credit agency shall consider— 
‘‘(i) the sources and uses of funds and 
the total financing, 
‘‘(ii) any proceeds or receipts gen-
erated or expected to be generated by rea-
son of tax benefits, and 
‘‘(iii) the reasonableness of the devel-
opmental costs and fees. 
‘‘(2) ELIGIBLE
DEVELOPMENT
COSTS.—The 
term ‘eligible development costs’ means the amount 
which would be reasonable development costs if the 
amounts taken into account as paid or incurred for 
the acquisition of buildings and land did not exceed 
75 percent of such costs determined without regard 
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to any amount paid or incurred for the acquisition 
of buildings and land. 
‘‘(3) 
SUBSTANTIAL
REHABILITATION.—The 
term ‘substantial rehabilitation’ means amounts paid 
or incurred for rehabilitation of a qualified residence 
if such amounts exceed the greater of— 
‘‘(A) $20,000, or 
‘‘(B) 20 percent of the amounts paid or in-
curred by the taxpayer for the acquisition of 
buildings and land with respect to such quali-
fied residence. 
‘‘(4) CONSTRUCTION
AND
REHABILITATION 
ONLY AFTER ALLOCATION TAKEN INTO ACCOUNT.— 
‘‘(A) IN GENERAL.—The terms ‘reasonable 
development costs’ and ‘eligible development 
costs’ shall not include any amount paid or in-
curred before the date on which an allocation is 
made to the taxpayer under subsection (e) with 
respect to the qualified project of which the 
qualified residence is part unless such amount 
is paid or incurred for the acquisition of build-
ings or land. 
‘‘(B) LAND
AND
BUILDING
ACQUISITION 
COSTS.—Amounts paid or incurred for the ac-
quisition of buildings or land shall be included 
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under paragraph (A) only if paid or incurred 
not more than 3 years before the date on which 
the allocation referred to in subparagraph (A) 
is made. If the taxpayer acquired any building 
or land from an entity (or any related party to 
such entity) that holds an ownership interest in 
the taxpayer, then such entity must also have 
acquired such property within such 3-year pe-
riod, and the acquisition cost included under 
subparagraph (A) with respect to the taxpayer 
shall not exceed the amount such entity paid or 
incurred to acquire such property. 
‘‘(c) QUALIFIED RESIDENCE.—For purposes of this 
section— 
‘‘(1) IN GENERAL.—The term ‘qualified resi-
dence’ means a residence that— 
‘‘(A) is real property affixed on a perma-
nent foundation, 
‘‘(B) is— 
‘‘(i) a house which is comprised of 4 
or fewer residential units, 
‘‘(ii) a condominium unit, or 
‘‘(iii) a house or an apartment owned 
by a cooperative housing corporation (as 
defined in section 216(b)), 
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‘‘(C) is part of a qualified project with re-
spect to the neighborhood homes credit agency 
has made an allocation under subsection (e), 
and 
‘‘(D) is located in a qualified census tract 
(determined as of the date of such allocation). 
‘‘(2) QUALIFIED CENSUS TRACT.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
census tract’ means a census tract— 
‘‘(i) which— 
‘‘(I) has a median family income 
which does not exceed 80 percent of 
the median family income for the ap-
plicable area, 
‘‘(II) has a poverty rate that is 
not less than 130 percent of the pov-
erty rate of the applicable area, and 
‘‘(III) has a median value for 
owner-occupied homes that does not 
exceed the median value for owner-oc-
cupied homes in the applicable area, 
‘‘(ii) which— 
‘‘(I) is located in a city which has 
a population of not less than 50,000 
and such city has a poverty rate that 
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is not less than 150 percent of the 
poverty rate of the applicable area, 
‘‘(II) has a median family income 
which does not exceed the median 
family income for the applicable area, 
and 
‘‘(III) has a median value for 
owner-occupied homes that does not 
exceed 80 percent of the median value 
for owner-occupied homes in the ap-
plicable area, 
‘‘(iii) which— 
‘‘(I) is located in a nonmetropoli-
tan county, 
‘‘(II) has a median family income 
which does not exceed the median 
family income for the applicable area, 
and 
‘‘(III) has been designated by a 
neighborhood homes credit agency 
under this clause, or 
‘‘(iv) which is not otherwise a quali-
fied census tract and is located in a dis-
aster 
area 
(as 
defined 
in 
section 
7508A(d)(3)), but only with respect to 
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credits allocated in any period during 
which the President of the United States 
has determined that such area warrants in-
dividual or individual and public assistance 
by the Federal Government under the Rob-
ert T. Stafford Disaster Relief and Emer-
gency Assistance Act. 
‘‘(B) APPLICABLE AREA.—The term ‘appli-
cable area’ means— 
‘‘(i) in the case of a metropolitan cen-
sus tract, the metropolitan area in which 
such census tract is located, and 
‘‘(ii) in the case of a census tract 
other than a census tract described in 
clause (i), the State. 
‘‘(d) AFFORDABLE SALE.—For purposes of this sec-
tion— 
‘‘(1) IN GENERAL.—The term ‘affordable sale’ 
means a sale to a qualified homeowner of a qualified 
residence that the neighborhood homes credit agency 
certifies as meeting the standards promulgated 
under subsection (f)(1)(D) for a price that does not 
exceed— 
‘‘(A) in the case of any qualified residence 
not described in subparagraph (B), (C), or (D), 
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the amount equal to the product of 4 multiplied 
by the median family income for the applicable 
area (as determined pursuant to the most re-
cent census data available as of the date of the 
contract for such sale), 
‘‘(B) in the case of a house comprised of 
2 residential units, 125 percent of the amount 
described in subparagraph (A), 
‘‘(C) in the case of a house comprised of 
3 residential units, 150 percent of the amount 
described in subparagraph (A), or 
‘‘(D) in the case of a house comprised of 
4 residential units, 175 percent of the amount 
described in subparagraph (A). 
‘‘(2) 
QUALIFIED
HOMEOWNER.—The 
term 
‘qualified homeowner’ means, with respect to a 
qualified residence, an individual— 
‘‘(A) who owns and uses such qualified res-
idence as the principal residence of such indi-
vidual, and 
‘‘(B) whose family income (determined as 
of the date that a binding contract for the af-
fordable sale of such residence is entered into) 
is 140 percent or less of the median family in-
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come for the applicable area in which the quali-
fied residence is located. 
‘‘(e) CREDIT CEILING AND ALLOCATIONS.— 
‘‘(1) CREDIT LIMITED BASED ON ALLOCATIONS 
TO QUALIFIED PROJECTS.— 
‘‘(A) IN
GENERAL.—The credit allowed 
under subsection (a) to any taxpayer for any 
taxable year with respect to one or more quali-
fied residences which are part of the same 
qualified project shall not exceed the excess (if 
any) of— 
‘‘(i) the amount allocated by the 
neighborhood homes credit agency under 
this paragraph to such taxpayer with re-
spect to such qualified project, over 
‘‘(ii) the aggregate amount of credit 
allowed under subsection (a) to such tax-
payer with respect to qualified residences 
which are a part of such qualified project 
for all prior taxable years. 
‘‘(B) DEADLINE
FOR
COMPLETION.—No 
credit shall be allowed under subsection (a) 
with respect to any qualified residence unless 
the affordable sale of such residence is during 
the 5-year period beginning on the date of the 
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allocation to the qualified project of which such 
residence is a part (or, in the case of a qualified 
residence to which subsection (i) applies, the re-
habilitation of such residence is completed dur-
ing such 5-year period). 
‘‘(2) LIMITATIONS ON ALLOCATIONS TO QUALI-
FIED PROJECTS.— 
‘‘(A) ALLOCATIONS
LIMITED
BY
STATE 
NEIGHBORHOOD HOMES CREDIT CEILING.—The 
aggregate amount allocated to taxpayers with 
respect to qualified projects by the neighbor-
hood homes credit agency of any State for any 
calendar year shall not exceed the State neigh-
borhood homes credit amount of such State for 
such calendar year. 
‘‘(B) SET-ASIDE FOR CERTAIN PROJECTS 
INVOLVING QUALIFIED NONPROFIT ORGANIZA-
TIONS.—Rules similar to the rules of section 
42(h)(5) shall apply for purposes of this sec-
tion. 
‘‘(3) DETERMINATION
OF
STATE
NEIGHBOR-
HOOD HOMES CREDIT CEILING.— 
‘‘(A) IN GENERAL.—The State neighbor-
hood homes credit amount for a State for a cal-
endar year is an amount equal to the sum of— 
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‘‘(i) the greater of— 
‘‘(I) the product of $6, multiplied 
by the State population (determined 
in accordance with section 146(j)), or 
‘‘(II) $8,000,000, and 
‘‘(ii) any amount previously allocated 
to any taxpayer with respect to any quali-
fied project by the neighborhood homes 
credit agency of such State which can no 
longer be allocated to any qualified resi-
dence because the 5-year period described 
in paragraph (1)(B) expires during cal-
endar year. 
‘‘(B) 3-YEAR CARRYFORWARD OF UNUSED 
LIMITATION.—The State neighborhood homes 
credit amount for a State for a calendar year 
shall be increased by the excess (if any) of the 
State neighborhood homes credit amount for 
such State for the preceding calendar year over 
the aggregate amount allocated by the neigh-
borhood homes credit agency of such State dur-
ing such preceding calendar year. Any amount 
carried forward under the preceding sentence 
shall not be carried past the third calendar year 
after the calendar year in which such credit 
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amount originally arose, determined on a first- 
in, first-out basis. 
‘‘(f) RESPONSIBILITIES OF NEIGHBORHOOD HOMES 
CREDIT AGENCIES.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(e), the State neighborhood homes credit dollar 
amount shall be zero for a calendar year unless the 
neighborhood homes credit agency of the State— 
‘‘(A) allocates such amount pursuant to a 
qualified allocation plan of the neighborhood 
homes credit agency, 
‘‘(B) allocates not more than 20 percent of 
amounts allocated in the previous year (or for 
allocations made in 2022, not more than 20 
percent of the neighborhood homes credit ceil-
ing for such year) to projects with respect to 
qualified residences which— 
‘‘(i) are located in census tracts de-
scribed 
in 
subsection 
(c)(2)(A)(iii), 
(c)(2)(A)(iv), (i)(5), or 
‘‘(ii) are not located in a qualified 
census tract but meet the requirements of 
(i)(8), 
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‘‘(C) promulgates standards with respect 
to reasonable qualified development costs and 
fees, 
‘‘(D) promulgates standards with respect 
to construction quality, 
‘‘(E) in the case of any neighborhood 
homes credit agency which makes an allocation 
to a qualified project which includes any quali-
fied residence to which subsection (i) applies, 
promulgates standards with respect to pro-
tecting the owners of such residences, including 
the capacity of such owners to pay rehabilita-
tion costs not covered by the credit provided by 
this section and providing for the disclosure to 
such owners of their rights and responsibilities 
with respect to the rehabilitation of such resi-
dences, and 
‘‘(F) submits to the Secretary (at such 
time and in such manner as the Secretary may 
prescribe) an annual report specifying— 
‘‘(i) the amount of the neighborhood 
homes credits allocated to each qualified 
project for the previous year, 
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‘‘(ii) with respect to each qualified 
residence completed in the preceding cal-
endar year— 
‘‘(I) the census tract in which 
such qualified residence is located, 
‘‘(II) with respect to the qualified 
project that includes such qualified 
residence, the year in which such 
project received an allocation under 
this section, 
‘‘(III) whether such qualified res-
idence was new, substantially rehabili-
tated and sold to a qualified home-
owner, or substantially rehabilitated 
pursuant to subsection (i), 
‘‘(IV) the eligible development 
costs of such qualified residence, 
‘‘(V) the amount of the neighbor-
hood homes credit with respect to 
such qualified residence, 
‘‘(VI) the sales price of such 
qualified residence, if applicable, and 
‘‘(VII) the family income of the 
qualified homeowner (expressed as a 
percentage of the applicable area me-
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dian family income for the location of 
the qualified residence), and 
‘‘(iii) such other information as the 
Secretary may require. 
‘‘(2) QUALIFIED ALLOCATION PLAN.—For pur-
poses of this subsection, the term ‘qualified alloca-
tion plan’ means any plan which— 
‘‘(A) sets forth the selection criteria to be 
used to prioritize qualified projects for alloca-
tions of State neighborhood homes credit dollar 
amounts, including— 
‘‘(i) the need for new or substantially 
rehabilitated owner-occupied homes in the 
area addressed by the project, 
‘‘(ii) the expected contribution of the 
project to neighborhood stability and revi-
talization, including the impact on neigh-
borhood residents, 
‘‘(iii) the capability and prior perform-
ance of the project sponsor, and 
‘‘(iv) the likelihood the project will re-
sult in long-term homeownership, 
‘‘(B) has been made available for public 
comment, and 
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‘‘(C) provides a procedure that the neigh-
borhood homes credit agency (or any agent or 
contractor of such agency) shall follow for pur-
poses of— 
‘‘(i) identifying noncompliance with 
any provisions of this section, and 
‘‘(ii) notifying the Internal Revenue 
Service of any such noncompliance of 
which the agency becomes aware. 
‘‘(g) REPAYMENT.— 
‘‘(1) IN GENERAL.— 
‘‘(A) SOLD DURING 5-YEAR PERIOD.—If a 
qualified residence is sold during the 5-year pe-
riod beginning immediately after the affordable 
sale of such qualified residence referred to in 
subsection (a), the seller (with respect to the 
sale during such 5-year period) shall transfer 
an amount equal to the repayment amount to 
the relevant neighborhood homes credit agency. 
‘‘(B) USE OF REPAYMENTS.—A neighbor-
hood homes credit agency shall use any amount 
received pursuant to subparagraph (A) only for 
purposes of qualified projects. 
‘‘(2) REPAYMENT AMOUNT.—For purposes of 
paragraph (1)(A), the repayment amount is an 
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amount equal to 50 percent of the gain from the 
sale to which the repayment relates, reduced by 20 
percent for each year of the 5-year period referred 
to in paragraph (1)(A) which ends before the date 
of such sale. 
‘‘(3) LIEN
FOR
REPAYMENT
AMOUNT.—A 
neighborhood homes credit agency receiving an allo-
cation under this section shall place a lien on each 
qualified residence that is built or rehabilitated as 
part of a qualified project for an amount such agen-
cy deems necessary to ensure potential repayment 
pursuant to paragraph (1)(A). 
‘‘(4) DENIAL OF DEDUCTIONS IF CONVERTED 
TO RENTAL HOUSING.—If, during the 5-year period 
described in paragraph (1), an individual who owns 
a qualified residence fails to use such qualified resi-
dence as such individual’s principal residence for any 
period of time, no deduction shall be allowed for ex-
penses paid or incurred by such individual with re-
spect to renting, during such period of time, such 
qualified residence. 
‘‘(5) WAIVER.—The neighborhood homes credit 
agency may waive the repayment required under 
paragraph (1)(A) in the case of homeowner experi-
encing a hardship. 
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