Transit Oriented Development Act of 2022
Bill: H.R.8401 | Sponsor: Rep. Kahele, Kaiali'i (D-HI)
Policy area: Taxation

Summary:
Transit Oriented Development Act of 2022
This bill increases the low-income housing tax credit for buildings in transit-oriented development areas. The bill defines a transit-oriented development area as a designated area located within 1/2 mile from a rail, bus, harbor, or waterway station and zoned for high density. It also provides for an increase in the credit for buildings in high cost areas in non-contiguous states (i.e., Alaska and Hawaii) and U.S. possessions.
The bill directs the Department of Housing and Urban Development to study cost-of-living differences throughout the United States based on geographic location and proximity and accessibility to transit.

To amend the Internal Revenue Code of 1986 to modify the low-income 
   housing tax credit to incentivize affordable and transit-oriented 
development and development in certain difficult development areas, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transit Oriented Development Act of 
2022''.

SEC. 2. LOW-INCOME HOUSING TAX CREDIT FOR TRANSIT-ORIENTED DEVELOPMENT 
              AREAS.

    (a) In General.--Section 42(d)(5) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new subparagraph:
                    ``(C) Increase in credit for buildings in transit-
                oriented development areas.--
                            ``(i) In general.--In the case of any 
                        building located in a transit-oriented 
                        development area which is designated for 
                        purposes of this subparagraph--
                                    ``(I) in the case of a new 
                                building, the eligible basis of such 
                                building shall be 180 percent of such 
                                basis determined without regard to this 
                                subparagraph, and
                                    ``(II) in the case of an existing 
                                building, the rehabilitation 
                                expenditures taken into account under 
                                subsection (e) shall be 180 percent of 
                                such expenditures determined without 
                                regard to this subparagraph.
                            ``(ii) Transit-oriented development area.--
                        For purposes of this subparagraph, the term 
                        `transit-oriented development area' means an 
                        area designated by the Secretary of Housing and 
                        Urban Development and State housing credit 
                        agency as located in an area within \1/2\ of a 
                        mile from a rail, bus, harbor, or waterway 
                        station and as zoned for high-density.
                            ``(iii) Limit on areas designated.--The 
                        portions of metropolitan statistical areas 
                        which may be designated for purposes of this 
                        subparagraph shall not exceed an aggregate area 
                        having 20 percent of the population of such 
                        metropolitan statistical areas. A comparable 
                        rule shall apply to nonmetropolitan statistical 
                        areas.
                            ``(iv) Coordination with high cost areas.--
                        If the eligible basis of a new building, or the 
                        rehabilitation expenditures with respect to an 
                        existing building, are determined pursuant to 
                        subparagraph (B), such building shall not be 
                        treated as located in a transit-oriented 
                        development area for purposes of this 
                        subparagraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to buildings placed in service after the date of the enactment of this 
Act.

SEC. 3. LOW-INCOME HOUSING TAX CREDIT FOR DIFFICULT DEVELOPMENT AREAS 
              IN NON-CONTIGUOUS STATES AND POSSESSIONS.

    (a) In General.--Section 42(d)(5)(B) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new clause:
                            ``(vi) Special rule for non-contiguous 
                        states and possessions.--In the case of Hawaii, 
                        Alaska, and any possession of the United 
                        States, subclauses (I) and (II) of clause (i) 
                        shall each be applied by substituting `170 
                        percent' for `130 percent'.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to buildings placed in service after the date of the enactment of this 
Act.

SEC. 4. HUD STUDY REGARDING ADJUSTMENT OF TAX CREDIT ALLOCATIONS TO 
              REFLECT GEOGRAPHIC COST-OF-LIVING DIFFERENCES.

    The Secretary of Housing and Urban Development shall conduct a 
study to identify cost-of-living differences throughout the United 
States based on geographic location and proximity and accessibility to 
transit. Not later than the expiration of the 1-year period beginning 
on the date of the enactment of this Act, the Secretary shall submit a 
report to the Congress setting forth the results and conclusions of the 
study and recommending formulas for the adjustment of annual 
allocations to the States of low-income housing tax credits under 
section 42 of the Internal Revenue Code of 1986 (26 U.S.C. 42) to 
reflect such cost-of -living differences.
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