Affordable Housing Preservation Tax Relief Act of 2003 - Amends the Internal Revenue Code to establish an affordable housing credit for the qualified preservation sale or exchange of an eligible multifamily property to or with a preservation entity which agrees to maintain specified affordability and use restrictions regarding the property.
[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3485 Introduced in House (IH)]
108th CONGRESS
1st Session
H. R. 3485
To amend the Internal Revenue Code of 1986 to provide an incentive to
preserve affordable housing in multifamily housing units which are sold
or exchanged.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 12, 2003
Mr. Ramstad (for himself and Mr. Cardin) introduced the following bill;
which was referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide an incentive to
preserve affordable housing in multifamily housing units which are sold
or exchanged.
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 ``Affordable Housing Preservation Tax
Relief Act of 2003''.
SEC. 2. AFFORDABLE HOUSING PRESERVATION CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to business-related
credits) is amended by inserting after section 42 the following new
section:
``SEC. 42A. AFFORDABLE HOUSING PRESERVATION CREDIT.
``(a) General Rule.--For purposes of section 38, the affordable
housing preservation credit determined under this section for the
taxable year is an amount equal to the preservation allocation amount
for the taxable year.
``(b) Limitations.--The amount allowed as a credit to a taxpayer
under subsection (a) with respect to a qualified preservation sale
shall not exceed the gain recognized by the taxpayer from such sale.
``(c) Preservation Allocation Amount.--For purposes of subsection
(a)--
``(1) In general.--The term `preservation allocation
amount' means the amount allocated to the taxpayer from a
qualified preservation sale by a housing credit agency.
``(2) Limitation.--The amount allocated under paragraph (1)
shall not exceed the excess of--
``(A) the product of--
``(i) the maximum rate tax under section 1
in the case of an individual or section 11 in
the case of a corporation, multiplied by
``(ii) the gain recognized by the taxpayer
from the qualified preservation sale, over
``(B) the amount of cash or the fair market value
of other property received by the taxpayer with respect
to the sale.
``(d) Qualified Preservation Sale.--For purposes of this section--
``(1) In general.--The term `qualified preservation sale'
means a sale of eligible multifamily housing property to or an
exchange of such property with a preservation entity which
agrees to maintain affordability and use restrictions regarding
the property that are--
``(A) for a term of not less than the extended use
period,
``(B) legally enforceable, and
``(C) consistent with the long-term physical and
financial viability and character of such housing as
affordable housing.
Such restrictions shall be binding on all successors of the
preservation entity and shall be recorded as a restrictive
covenant on the property pursuant to State law.
``(2) Eligible multifamily housing property.--The term
`eligible multifamily housing property' means--
``(A) property assisted under section 221(d)(3) or
section 236 of the National Housing Act and with
respect to which the owner is subject to the
restrictions described in section 1039(b)(1)(B) of such
Act (as in effect on the day before the date of the
enactment of the Revenue Reconciliation Act of 1990),
``(B) property described in section 512(2)(B) of
the Multifamily Assisted Housing Reform and
Affordability Act of 1997 (42 U.S.C. 1437f note),
``(C) property with respect to which a loan is made
or insured under title V of the Housing Act of 1949,
and
``(D) property that either received an allocation
of low-income housing tax credit pursuant to paragraph
(1) of section 42(h) or was exempted from such
paragraph by paragraph (4) of such section.
``(3) Affordable housing.--The term `affordable housing'
means housing which is a qualified low-income housing project
(as defined in section 42(g)).
``(4) Extended use period.--The term `extended use period'
means the period beginning on the date of sale and ending on
the earlier of--
``(A) 30 years after the close of the sale, or
``(B) the date that the property is acquired by
foreclosure (or instrument in lieu of foreclosure).
Subparagraph (B) shall not apply if the Secretary determines
that the acquisition described therein is part of an
arrangement with the owner a purpose of which is to terminate
the extended use period.
``(5) Preservation entity.--The term `preservation entity'
means a housing credit agency or an organization approved by a
housing credit agency that has the capacity and commitment to
successfully acquire and preserve eligible multifamily housing
property. Such preservation entity shall be independent from
the seller partnership or its affiliates.
``(e) Allocation by Housing Credit Agency.--For purposes of this
section--
``(1) In general.--The aggregate preservation credit dollar
amount which a housing credit agency may allocate for any
calendar year is the portion of the State preservation credit
ceiling allocated under this subsection for such calendar year
to such agency.
``(2) State ceiling initially allocated to housing credit
agencies.--Except as provided in paragraph (4), the State
preservation credit ceiling for each calendar year shall be
allocated to the housing credit agency of such State. If there
is more than 1 housing credit agency of a State, all such
agencies shall be treated as a single agency.
``(3) State preservation credit ceiling.--The State
preservation credit ceiling applicable to any State and any
calendar year shall be an amount equal to the sum of--
``(A) the unused State preservation credit ceiling
(if any) of such State for the preceding calendar year,
``(B) the sum of--
``(i) $1.00 multiplied by the State
population,
``(ii) $1,000,000,
``(iii) the amount of State preservation
credit ceiling returned in the calendar year,
plus
``(iv) the amount (if any) allocated under
paragraph (4) to such State by the Secretary.
For purposes of clause (i), the unused State
preservation credit ceiling for any calendar year is
the excess (if any) of the sum of the amounts described
in clauses (ii) through (iv) over the aggregate
preservation credit dollar amount allocated for such
year.
``(4) Unallocated credit.--
``(A) In general.--In the event that a State does
not allocate all of its preservation credit, such
unallocated credit shall be allocated among qualified
States for the succeeding calendar year.
``(B) Qualified state.--For purposes of
subparagraph (A), the term `qualified State' means,
with respect to a calendar year, any State which
allocates its entire State preservation credit from the
preceding calendar year and for which a request is made
to receive an allocation under subparagraph (C).
``(C) Unused preservation credit carryover.--For
purposes of this paragraph, the unused preservation
credit carryover of a State for any calendar year is
the excess (if any) of--
``(i) the unused State preservation credit
ceiling for the year preceding such year, over
``(ii) the aggregate preservation credit
dollar amount allocated for such year.
``(D) Allocated amount.--The amount allocated under
this paragraph is the amount determined by the
Secretary to bear the same ratio to the aggregate
unused preservation credit carryover of all States from
the preceding calendar year as the population of the
State bears to the population of all qualified States
for the calendar year. For purpose of the preceding
sentence, population shall be determined in accordance
with section 146(j).
``(5) Housing credit agency defined.--The term `housing
credit agency' has the meaning given such term by section
42(h)(8)(A).
``(f) Responsibilities of Housing Credit Agency.--The housing
credit agency (or an agent or other private contractor of such agency)
shall--
``(1) determine whether the preservation entity's plan for
rehabilitation (if any) and operation of the eligible
multifamily housing property is viable for no less than 30
years,
``(2) monitor the affordability and use restrictions for
the eligible multifamily housing property, and
``(3) notify the Internal Revenue Service as to any portion
of such property which is out of compliance.
``(g) Recapture for Noncompliance.--If the Secretary determines
that all or a portion of the multifamily housing property is out of
compliance with the requirements of this section, the taxpayer's tax
under this chapter for the taxable year shall be increased by the sum
of--
``(1) an amount equal to the amount which bears the same
ratio to the total credit allowed to the taxpayer under
subsection (a) as the taxpayer's share of the portion of such
property which is out of compliance bears to the entire
property, plus
``(2) interest at the underpayment rate established under
section 6621 on the amount determined under paragraph (1) for
each prior taxable year for the period beginning on the due
date for filing the return for the taxable year for which the
credit was allowed under subsection (a).
No deduction shall be allowed under this chapter for interest described
in paragraph (2).''.
(b) Credit to Be Part of General Business Credit.--Subsection (b)
of section 38 of such Code (relating to general business credit) is
amended by striking ``plus'' at the end of paragraph (14), by striking
the period at the end of paragraph (15) and inserting ``, plus'', and
by adding at the end the following new paragraph:
``(16) the affordable housing preservation credit
determined under section 42A(a).''.
(c) Conforming Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 of such Code is amended by
inserting after the item relating to section 45F the following new
item:
``Sec. 42A. Affordable housing preservation credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2003.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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