Community Development Homeownership Tax Credit Act - Amends the Internal Revenue Code to allow homebuilders and investors a general business tax credit for building or substantially rehabilitating residences for low and moderate-income individuals in certain areas, including a rural area, an Indian reservation, or an area of chronic economic distress. Sets forth rules for the calculation of such credit and its administration and allocation by the States.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 859 Introduced in Senate (IS)]
109th CONGRESS
1st Session
S. 859
To amend the Internal Revenue Code of 1986 to allow an income tax
credit for the provision of homeownership and community development,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 20, 2005
Mr. Santorum (for himself, Mr. Kerry, Mr. Smith, Ms. Stabenow, Mr.
Allard, and Mr. Sarbanes) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow an income tax
credit for the provision of homeownership and community development,
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; ETC.
(a) Short Title.--This Act may be cited as the ``Community
Development Homeownership Tax Credit Act''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
SEC. 2. COMMUNITY HOMEOWNERSHIP CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
is amended by inserting after section 42 the following new section:
``SEC. 42A. COMMUNITY HOMEOWNERSHIP CREDIT.
``(a) Allowance of Credit.--For purposes of section 38, the amount
of the homeownership credit determined under this section for any
taxable year in the credit period shall be an amount equal to the
applicable percentage of the eligible basis of each qualified
residence.
``(b) Applicable Percentage.--For purposes of this section--
``(1) In general.--The term `applicable percentage' means
the appropriate percentage prescribed by the Secretary for the
month in which the taxpayer and the homeownership credit agency
enter into an agreement with respect to such residence (which
is binding on such agency, the taxpayer, and all successors in
interest) as to the homeownership credit dollar amount to be
allocated to such residence.
``(2) Method of prescribing percentage.--The percentage
prescribed by the Secretary for any month shall be the
percentage which will yield over a 5-year period amounts of
credit under subsection (a) which have a present value equal to
50 percent of the eligible basis of a qualified residence.
``(3) Method of discounting.--The present value under
paragraph (2) shall be determined--
``(A) as of the last day of the 1st year of the 5-
year period referred to in paragraph (2),
``(B) by using a discount rate equal to 72 percent
of the annual Federal mid-term rate applicable under
section 1274(d)(1) to the month applicable under
paragraph (1) and compounded annually, and
``(C) by assuming that the credit allowable under
this section for any year is received on the last day
of such year.
``(c) Qualified Residence.--For purposes of this section--
``(1) In general.--The term `qualified residence' means any
residence--
``(A) which is located--
``(i) in a census tract which has a median
gross income which does not exceed 80 percent
of the greater of area or state-wide median
gross income,
``(ii) in a rural area (as defined under
section 520 of the Housing Act of 1949),
``(iii) on a reservation for a federally
recognized Indian tribe, or
``(iv) in an area of chronic economic
distress, and
``(B) which is purchased by a qualified buyer.
For purposes of subparagraph (A)(iv), an area is an area of
chronic economic distress if it is approved for designation as
such under section 143(j)(3); except that such designation
shall not require the approval of the Secretary, shall be
deemed to be approved by the Secretary of Housing and Urban
Development if not approved or disapproved by the Secretary of
Housing and Urban Development within 90 days after submission
for approval for purposes of section 143(j)(3)(A)(ii), and
shall cease to apply after the end of the 5th calendar year
after the calendar year in which the designation is made.
``(2) Residence.--
``(A) In general.--For purposes of paragraph (1),
the term `residence' means--
``(i) a single-family home containing 1 to
4 housing units,
``(ii) a condominium unit, or
``(iii) stock in a cooperative housing
corporation (as defined in section 216(b)).
``(B) Factory-built homes included.--For purposes
of clause (i), (ii), or (iii) of subparagraph (A), such
term shall include any factory-built home.
``(3) Timing of determination.--For purposes of paragraph
(1), the determination of whether a residence is a qualified
residence shall be made at the time a binding commitment for an
allocation of credit is awarded by the homeownership credit
agency; except that the determination of whether a purchaser is
a qualified buyer shall be made at the time the residence is
sold.
``(4) Median gross income.--For purposes of this section,
median gross income shall be determined consistent with section
143(f)(2).
``(d) Eligible Basis.--For purposes of this section--
``(1) New qualified residences.--
``(A) In general.--The eligible basis of a new
qualified residence is--
``(i) in the case of a qualified residence
which is sold in a transaction which meets the
requirements of subparagraph (B), its adjusted
basis (excluding land) immediately before such
sale, and
``(ii) zero in any other case.
``(B) Requirements.--A sale of a qualified
residence meets the requirements of this subparagraph
if--
``(i) the buyer acquires the qualified
residence by purchase (as defined in section
179(d)(2)),
``(ii) the buyer of the qualified residence
is not a related person with respect to the
seller, and
``(iii) in the case of a seller who
materially participates in the development of
the residence, the buyer's debt financing is
originated by a third party who is not a
related person with respect to the seller.
``(2) Existing qualified residences.--
``(A) In general.--The eligible basis of an
existing qualified residence is--
``(i) in the case of a qualified residence
which is sold in a transaction which meets the
requirements of subparagraph (B), its adjusted
basis (excluding land) immediately before such
sale, and
``(ii) zero in any other case.
``(B) Requirements.--A sale of a qualified
residence meets the requirements of this subparagraph
if--
``(i) the buyer acquires the qualified
residence by purchase (as defined in section
179(d)(2)),
``(ii) the qualified residence has
undergone substantial rehabilitation in
connection with the sale described in clause
(i),
``(iii) the buyer of the qualified
residence is not a related person with respect
to the seller, and
``(iv) in the case of a seller who
materially participates in the development of
the residence, the buyer's debt financing is
originated by a third party who is not a
related person with respect to the seller.
``(C) Substantial rehabilitation.--
``(i) In general.--For purposes of
subparagraph (B), substantial rehabilitation
means rehabilitation expenditures paid or
incurred with respect to a qualified residence
that are at least $25,000.
``(ii) Inflation adjustment.--In the case
of a calendar year after 2005, the dollar
amount contained in clause (i) shall be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year by
substituting `calendar year 2004' for
`calendar year 1992' in subparagraph
(B) thereof.
Any increase under this clause (ii) which is
not a multiple of $1,000 shall be rounded to
the next lowest multiple of $1,000.
``(D) Limitation of acquisition basis.--The
eligible basis of an existing qualified residence may
not exceed 150 percent of the qualified rehabilitation
expenditures.
``(3) Effect of subsequent sale, etc.--A subsequent sale,
assignment, rental, or refinancing of the qualified residence
by the buyer or the subsequent sale, assignment, or pooling of
the buyer's financing by the originator shall not be considered
in determining whether or not the prior sales transaction
satisfied the requirements of subparagraph (B) of paragraph (1)
or (2).
``(4) Special rules relating to determination of adjusted
basis.--For purposes of this subsection--
``(A) In general.--Except as provided in
subparagraph (B), the adjusted basis of any qualified
residence--
``(i) shall not include so much of the
basis of such qualified residence as is
determined by reference to the basis of other
property held at any time by the person
acquiring the residence, and
``(ii) shall be determined without regard
to the adjusted basis of any property which is
not part of such qualified residence.
``(B) Basis of property in common areas, etc.,
included.--The adjusted basis of any qualified
residence shall be determined by taking into account
(on a pro rata basis) the adjusted basis of property
(other than land) used in common areas or provided as
comparable amenities to all residences within a
project.
``(5) Special rules for determining eligible basis.--
``(A) Related person, etc.--For purposes of this
section, a person (in this clause referred to as the
`related person') is related to any person if the
related person bears a relationship to such person
specified in section 267(b) or 707(b)(1), or the
related person and such person are engaged in trades or
businesses under common control (within the meaning of
subsections (a) and (b) of section 52). For purposes of
the preceding sentence, in applying section 267(b) or
707(b)(1), `10 percent' shall be substituted for `50
percent'.
``(B) Nonresidential space excluded.--No portion of
the eligible basis of a qualified residence shall
include costs attributable to nonresidential space.
``(C) Limitation.--The eligible basis of any
residence may not exceed the mortgage limit for Federal
Housing Administration insured mortgages for single
family homes in the area in which such residence is
located.
``(e) Definition and Special Rules Relating to Credit Period.--
``(1) Credit period defined.--For purposes of this section,
the term `credit period' means, with respect to any qualified
residence, the period of 5 taxable years beginning with the
taxable year in which the sale of the qualified residence
occurs satisfying the requirements of subsection (d)(1)(B) or
(d)(2)(B).
``(2) Special rule for 1st year of credit period.--
``(A) In general.--The credit allowable under
subsection (a) with respect to any qualified residence
for the 1st taxable year of the credit period shall be
determined by multiplying the eligible basis under
subsection (d) by the fraction--
``(i) the numerator of which is the sum of
the number of remaining whole months in such
1st taxable year after the sale of the
qualified residence, and
``(ii) the denominator of which is 12.
``(B) Disallowed 1st year credit allowed in 6th
year.--Any reduction by reason of subparagraph (A) in
the credit allowable (without regard to subparagraph
(A)) for the 1st taxable year of the credit period
shall be allowable under subsection (a) for the 1st
taxable year following the credit period.
``(f) Limitation on Aggregate Credit Allowable With Respect to
Qualified Residences Located in a State.--
``(1) Credit may not exceed credit dollar amount allocated
to qualified residence.--
``(A) In general.--The amount of the credit
determined under this section for any taxable year with
respect to any qualified residence shall not exceed the
homeownership credit dollar amount allocated to such
qualified residence under this subsection.
``(B) Time for making allocation.--
``(i) An allocation shall be taken into
account under subparagraph (A) only if it is
made not later than the close of the calendar
year in which the qualified residence is sold.
``(ii) A homeownership credit agency may
allocate available homeownership credit dollar
amounts to a qualified residence prior to the
year of sale of such qualified residence if--
``(I) the taxpayer owns fee title
or a leasehold interest of not less
than 50 years in the site of the
qualified residence as of the later of
the date which is 6 months after the
date that the allocation was made or
the close of the calendar year in which
the allocation is made, and
``(II) such qualified residence is
completed not later than the close of
the second calendar year following the
calendar year in which the allocation
was made.
``(C) Vested right to credit dollar amount.--Once a
homeownership credit allocation is received by a
taxpayer, the right to such credit is vested in such
taxpayer and is not subject to recapture, except as
provided in paragraph (5)(B).
``(2) Homeownership credit dollar amount for agencies.--
``(A) In general.--The aggregate homeownership
credit dollar amount which a homeownership credit
agency may allocate for any calendar year is the
portion of the State homeownership credit ceiling
allocated under this paragraph for such calendar year
to such agency.
``(B) State ceiling initially allocated to state
homeownership credit agencies.--Except as provided in
subparagraphs (D) and (E), the State homeownership
credit ceiling for each calendar year shall be
allocated to the homeownership credit agency of such
State. If there is more than 1 homeownership credit
agency of a State, all such agencies shall be treated
as a single agency.
``(C) State homeownership credit ceiling.--The
State homeownership credit ceiling applicable to any
State for any calendar year shall be an amount equal to
the sum of--
``(i) the unused State homeownership credit
ceiling (if any) of such State for the
preceding calendar year,
``(ii) the greater of--
``(I) $1.80 multiplied by the State
population, or
``(II) $2,000,000,
``(iii) the amount of State homeownership
credit ceiling returned in the calendar year,
plus
``(iv) the amount (if any) allocated under
subparagraph (D) to such State by the
Secretary.
For purposes of clause (i), the unused State
homeownership 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
homeownership credit dollar amount allocated for such
year. For purposes of clause (iii), the amount of State
homeownership credit ceiling returned in the calendar
year equals the homeownership credit dollar amount
previously allocated within the State to any qualified
residence with respect to which an allocation is
canceled by mutual consent of the homeownership credit
agency and the allocation recipient.
``(D) Unused homeownership credit carryovers
allocated among certain states.--
``(i) In general.--The unused homeownership
credit carryover of a State for any calendar
year shall be assigned to the Secretary for
allocation among qualified States for the
succeeding calendar year.
``(ii) Unused homeownership credit
carryover.--For purposes of this subparagraph,
the unused homeownership credit carryover of a
State for any calendar year is the excess (if
any) of--
``(I) the unused State
homeownership credit ceiling for the
year preceding such year, over
``(II) the aggregate homeownership
credit dollar amount allocated for such
year.
``(iii) Formula for allocation of unused
homeownership credit carryovers among qualified
states.--The amount allocated under this
subparagraph to a qualified State for any
calendar year shall be the amount determined by
the Secretary to bear the same ratio to the
aggregate unused homeownership credit
carryovers of all States for the preceding
calendar year as such State's population for
the calendar year bears to the population of
all qualified States for the calendar year.
``(iv) Qualified state.--For purposes of
this subparagraph, the term `qualified State'
means, with respect to a calendar year, any
State--
``(I) which allocated its entire
State homeownership credit ceiling for
the preceding calendar year, and
``(II) for which a request is made
(not later than May 1 of the calendar
year) to receive an allocation under
clause (iii).
``(E) State may provide for different allocation.--
Rules similar to the rules of section 146(e) (other
than paragraph (2)(B) thereof) shall apply for purposes
of this paragraph.
``(F) Population.--For purposes of this paragraph,
population shall be determined in accordance with
section 146(j).
``(G) Cost-of-living adjustment.--
``(i) In general.--In the case of a
calendar year after 2005, the $2,000,000 and
$1.80 amounts in subparagraph (C) shall each be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year by
substituting `calendar year 2004' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--
``(I) In the case of the $2,000,000
amount, any increase under clause (i)
which is not a multiple of $5,000 shall
be rounded to the next lowest multiple
of $5,000.
``(II) In the case of the $1.80
amount, any increase under clause (i)
which is not a multiple of 5 cents
shall be rounded to the next lowest
multiple of 5 cents.
``(3) Portion of state ceiling set-aside for certain
projects involving qualified nonprofit organizations.--
``(A) In general.--Not more than 92.5 percent of
the State homeownership credit ceiling for any State
for any calendar year shall be allocated to projects
other than qualified nonprofit housing projects
described in subparagraph (B).
``(B) Projects involving qualified nonprofit
organizations.--For purposes of subparagraph (A), a
qualified nonprofit housing project is described in
this subparagraph if a qualified nonprofit organization
is to own an interest in the project (directly or
through a partnership) and materially participate
(within the meaning of section 469(h)) in the
development and operation of the project throughout the
credit period.
``(C) Qualified nonprofit organization.--For
purposes of this paragraph, the term `qualified
nonprofit organization' means any organization if--
``(i) such organization is described in
paragraph (3) or (4) of section 501(c) and is
exempt from tax under section 501(a),
``(ii) such organization is determined by
the State homeownership credit agency not to be
affiliated with or controlled by a for-profit
organization, and
``(iii) 1 of the exempt purposes of such
organization includes the fostering of low-
income housing.
``(D) Treatment of certain subsidiaries.--
``(i) In general.--For purposes of this
paragraph, a qualified nonprofit organization
shall be treated as satisfying the ownership
and material participation test of subparagraph
(B) if any qualified corporation in which such
organization holds stock satisfies such test.
``(ii) Qualified corporation.--For purposes
of clause (i), the term `qualified corporation'
means any corporation if 100 percent of the
stock of such corporation is held by 1 or more
qualified nonprofit organizations at all times
during the period such corporation is in
existence.
``(E) State may not override set-aside.--Nothing in
subparagraph (E) of paragraph (2) shall be construed to
permit a State not to comply with subparagraph (A) of
this paragraph.
``(4) Limitation on allocations to areas of chronic
economic distress.--No more than 50 percent of a homeownership
credit agency's portion of the State homeownership credit
ceiling for a calendar year may be allocated to residences
located in areas that--
``(A) are designated as areas of chronic economic
distress in accordance with paragraph (1) of subsection
(c), and
``(B) do not meet the requirements of clause (i),
(ii), or (iii) of subsection (c)(1)(A).
``(5) Special rules.--
``(A) Residence must be located within jurisdiction
of credit agency.--A homeownership credit agency may
allocate its aggregate homeownership credit dollar
amount only to qualified residences located in the
jurisdiction of the governmental unit of which such
agency is a part.
``(B) Agency allocations in excess of limit.--If
the aggregate homeownership credit dollar amounts
allocated by a homeownership credit agency for any
calendar year exceed the portion of the State
homeownership credit ceiling allocated to such agency
for such calendar year, the homeownership credit dollar
amounts so allocated shall be reduced (to the extent of
such excess) for residences in the reverse of the order
in which the allocations of such amounts were made.
``(g) Definitions and Special Rules.--For purposes of this
section--
``(1) Completed.--The term `completed' means the point in
time where a qualified residence is first placed in a condition
or state of readiness and availability for occupancy.
``(2) Project.--The term `project' means 1 or more
residences together with functionally related and subordinate
facilities developed and made available to inhabitants of such
residences, including recreational facilities and parking
areas. To constitute a project, each residence must--
``(A) be developed by the same taxpayer pursuant to
common planning and feasibility studies,
``(B) be financed through a common plan of
construction financing, and
``(C) have common ownership prior to sale.
For purposes of this paragraph, it is not necessary that all
residences within a project be contiguous or that all
residences consist only of either new residences or existing
residences and it is not necessary that each residence within a
project be a qualified residence.
``(3) Qualified buyer.--
``(A) In general.--The term `qualified buyer' means
a buyer if at the time of the acquisition of the
qualified residence, the buyer--
``(i) is 1 or more individuals whose income
does not exceed 80 percent of the area median
gross income (70 percent for families of less
than 3 members), and
``(ii) intends to occupy the residence as
the buyer's principal residence (within the
meaning of section 121).
``(B) Special rules in qualified census tracts.--
With respect to residences located in qualified census
tracts (as defined in section 42), subparagraph (A)
shall be applied by substituting `100 percent' for `80
percent' and `90 percent' for `70 percent'.
``(C) Determination of income.--For purposes of
this paragraph, a buyer's income shall be determined in
accordance with section 143(f)(4), except that
subparagraph (B) of such section shall be applied
substituting `the national median gross income' for
`the statewide median gross income for the State in
which such residence is located'.
``(4) New qualified residence.--The term `new qualified
residence' means a qualified residence the original ownership
of which begins with the taxpayer.
``(5) Existing qualified residence.--The term `existing
qualified residence' means any qualified residence which is not
a new qualified residence.
``(6) Homeownership credit agency.--The term `homeownership
credit agency' means any agency authorized to carry out this
section.
``(7) Possessions treated as states.--The term `State'
includes the District of Columbia and a possession of the
United States.
``(8) Application to estates and trusts.--In the case of an
estate or trust, the amount of the credit determined under
subsection (a) shall be apportioned between the estate or trust
and the beneficiaries on the basis of the income of the estate
or trust allocable to each.
``(h) Reduction in Tax Benefits.--
``(1) Recapture of credit.--If within the 5-year period
beginning on the date of the original purchase of a qualified
residence, the residence is sold, the qualified buyer--
``(A) shall deduct and withhold an amount equal to
the recapture amount from the amount realized on such
sale, and
``(B) shall transfer such amount to the
homeownership credit agency which allocated the
homeownership credit dollar amount to such residence.
``(2) Recapture amount.--For purposes of paragraph (1), the
recapture amount is the amount equal to--
``(A) 100 percent of the gain from the sale
referred to in paragraph (1) in the 1st or 2nd year,
``(B) 80 percent of the gain from such sale in the
3rd year,
``(C) 70 percent of the gain from such sale in the
4th year, or
``(D) 60 percent of the gain from such sale in the
5th year.
``(3) Denial of deductions if converted to rental
housing.--If a qualified residence is converted to rental
housing within the 5-year period beginning on the date of the
original purchase of a qualified residence, no deduction for
amortization or depreciation under this chapter shall be
permitted with respect to such residence during such period.
``(i) Application of At-Risk Rules.--For purposes of this section,
rules of section 465 shall not apply in determining the eligible basis
of any qualified residence.
``(j) Reports to the Secretary.--
``(1) From the taxpayer.--The Secretary may require
taxpayers to submit an information return (at such time and in
such form and manner as the Secretary prescribes) for each
taxable year setting forth--
``(A) the eligible basis for the taxable year of
each qualified residence with respect to which the
taxpayer is claiming a credit under this section,
``(B) the amount of all homeownership credit
allocations received by the taxpayer from any and all
State homeownership credit agencies, and
``(C) such other information as the Secretary may
require.
The penalty under section 6652(j) shall apply to any failure to
submit the return required by the Secretary under the preceding
sentence on the date prescribed therefor.
``(2) From homeownership credit agencies.--Each agency
which allocates any homeownership credit dollar amount to any
residence for any calendar year shall submit to the Secretary
(at such time and in such form and manner as the Secretary
shall prescribe) an annual report specifying--
``(A) the amount of the homeownership credit dollar
amount allocated to each residence for such year,
``(B) sufficient information to identify each such
residence and the taxpayer initially entitled to claim
the credit under this section with respect thereto, and
``(C) such other information as the Secretary may
require.
``(k) Responsibilities of Homeownership Credit Agencies.--
``(1) Plans for allocation of credit among residences.--
``(A) In general.--Notwithstanding any other
provision of this section, the homeownership credit
dollar amount with respect to any qualified residence
shall be zero unless such amount was allocated pursuant
to a qualified allocation plan of the homeownership
credit agency which is approved by the governmental
unit (in accordance with rules similar to the rules of
section 147(f)(2) (other than subparagraph (B)(ii)
thereof)) of which such agency is a part.
``(B) Qualified allocation plan.--For purposes of
this paragraph, the term `qualified allocation plan'
means any plan which sets forth selection criteria to
be used to determine the homeownership development
priorities of the homeownership credit agency which are
appropriate to local conditions.
``(C) Certain homeownership development criteria
must be used.--The development criteria set forth in a
qualified allocation plan must include--
``(i) contribution of the development to
community stability and revitalization,
``(ii) community and local government
support for the development,
``(iii) need for homeownership development
within the area,
``(iv) sponsor capability, and
``(v) long-term sustainability of the
project as owner-occupied residences.
``(2) Credit allocated to residence not to exceed amount
necessary to assure feasibility.--
``(A) In general.--The homeownership credit dollar
amount allocated to a residence shall not exceed the
amount the homeownership credit agency determines is
necessary for the feasibility of the residence.
``(B) Agency evaluation.--In making the
determination under subparagraph (A), the homeownership
credit agency shall consider--
``(i) the sources and uses of funds and the
total financing planned for the residence,
``(ii) any proceeds or receipts expected to
be generated by reason of tax benefits,
``(iii) the anticipated appraised value of
the residence,
``(iv) the reasonableness of the
developmental costs of the residence,
``(v) the affordability to a reasonable
range of prospective qualified buyers, and
``(vi) whether the residence addresses the
need for affordable homes for families with
children.
``(C) Determination made when credit dollar amount
applied for.--A determination under subparagraph (A)
shall be made as of each of the following times:
``(i) The application for the homeownership
credit dollar amount.
``(ii) The allocation of the homeownership
credit dollar amount.
``(3) Lien for recapture amount.--A homeownership credit
dollar amount may be allocated by a homeownership credit agency
to a residence only if such agency has a lien on such residence
for the payment of any amount potentially required to be paid
under subsection (h) to such agency.
``(l) Regulations.--The Secretary shall prescribe such regulations
as may be necessary or appropriate to carry out the purposes of this
section, including regulations--
``(1) dealing with--
``(A) projects which include more than 1 residence
or only a portion of a residence, and
``(B) buildings which are completed in portions,
``(2) providing for the application of this section to
short taxable years,
``(3) preventing the avoidance of the rules of this
section, and
``(4) providing the opportunity for homeownership credit
agencies to correct administrative errors and omissions with
respect to allocations and record keeping within a reasonable
period after their discovery, taking into account the
availability of regulations and other administrative guidance
from the Secretary.''.
(b) Current Year Business Credit Calculation.--Section 38(b)
(relating to current year business credit) is amended by redesignating
paragraphs (6) through (19) as paragraphs (7) through (20),
respectively, and by inserting after paragraph (5) the following new
paragraph:
``(6) the homeownership credit determined under section
42A(a),''.
(c) Conforming Amendments.--
(1) Section 55(c)(1) is amended by inserting ``or
subsection (h) or (i) of section 42A'' after ``section 42''.
(2) Subsections (i)(3)(D), (i)(6)(B)(i), and (k)(1) of
section 469 are each amended by inserting ``or 42A'' after
``section 42''.
(3) Section 772(a) is amended by striking ``and'' at the
end of paragraph (10), by redesignating paragraph (11) as
paragraph (12), and by inserting after paragraph (10) the
following:
``(11) the homeownership credit determined under section
42A, and''.
(4) Section 774(b)(4) is amended by inserting ``, 42A(h),''
after ``section 42(j)''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by inserting after the
item relating to section 42 the following:
``Sec. 42A. Community homeownership credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to qualified residences sold in taxable years beginning after the
date of the enactment of this Act.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S 4031)
Read twice and referred to the Committee on Finance.
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