[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4584 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 4584
To amend the Internal Revenue Code of 1986 to allow a business credit
for gain from the sale of real property for use as a manufactured home
community, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 18, 2024
Mrs. Shaheen (for herself, Mr. Tester, and Mr. Blumenthal) 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 a business credit
for gain from the sale of real property for use as a manufactured home
community, 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 ``Manufactured Housing Community
Sustainability Act of 2024''.
SEC. 2. FINDINGS.
Congress finds that--
(1) more than 22,000,000 people live in HUD-code
manufactured homes;
(2) there are approximately 6,700,000 occupied manufactured
homes in the United States, representing about 6 percent of the
Nation's housing stock, 9 percent of the single-family housing
stock, and more than 12 percent of all new single-family homes
sold in 2021;
(3) owners of manufactured homes are disproportionately
low-income households, and in 2020, the median annual household
income for living in manufactured housing was $35,000;
(4) over one-quarter of manufactured homeowners earn less
than $20,000 annually, and two-thirds earn less than $50,000
annually;
(5) more than half of all manufactured homes are located in
rural areas around the country, and manufactured homes make up
13 percent of all occupied homes in rural and small-town
communities;
(6) the average sales price of a new manufactured home
(excluding land) in 2019 was $81,700, and as of December 2023,
that average sales price had increased to $121,300, an increase
of 48.5 percent over the preceding 5 years;
(7) despite this sharp increase, the average manufactured
home costs roughly half the price per square foot of the
average site-built home;
(8) manufactured home communities provide critical
affordable housing, but receive very little Federal, State, or
local funds to subsidize the cost of manufactured homes;
(9) an estimated 43,000 manufactured home communities, also
referred to as ``mobile home parks'', exist throughout the
United States;
(10) owners of manufactured homes in such communities may
own the home, but they do not own the land under the home,
which leaves the homeowners vulnerable to rent increases, dis-
investment, changes in land use, and community closure;
(11) an eviction or closure of a manufactured home
community is very disruptive and can be financially devastating
to a homeowner who may be unable to pay the thousands of
dollars it takes to move the manufactured home or find a new
location for the manufactured home;
(12) manufactured housing where the consumer does not own
the land generally does not promote wealth building via
homeownership;
(13) for more than a decade, in an effort to preserve a
crucial source of affordable housing and aid low-income
homeowners, a national network of housing providers has helped
residents purchase and own the land under the manufactured home
community, and manage the manufactured home community as
limited equity cooperatives;
(14) nationwide, there are more than 1,000 cooperative
manufactured home communities, of which more than 300, located
in more than 20 States, are permanently preserved as affordable
communities through limited equity cooperative or nonprofit
ownership;
(15) members of manufactured home community cooperatives
continue to own such homes individually, own an equal share of
the land beneath the entire manufactured home community,
participate in the governing of the community, and elect a
board of directors who make major decisions within the
manufactured home community by a democratic vote;
(16) site fee increases in limited equity resident-owned
communities average just 0.9 percent per year, compared to 5.9
percent per year in commercially owned communities;
(17) in New Hampshire, more than 40 percent of manufactured
home communities are owned by residents;
(18) resident-owned cooperatives and nonprofit owned
communities have also flourished in Colorado, Vermont,
Massachusetts, Montana, Rhode Island, Washington, Oregon, and
Minnesota;
(19) nationwide, only 2.4 percent of all manufactured home
communities are resident or nonprofit owned;
(20) 19 States have adopted some protection when a
community is sold, and 8 States have strong notification and
resident purchase opportunities, which provide homeowners in
those States an opportunity to purchase the manufactured home
community when it is put up for sale; and
(21) in order to preserve manufactured home communities and
help low-income homeowners live securely, safely, and build
wealth through homeownership in the future, a Federal tax
benefit should be established to induce manufactured home
community owners to sell such properties to the residents when
those residents or a nonprofit commits to preserving the
community long term.
SEC. 3. TAX CREDIT FOR MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR
NONPROFIT ENTITY.
(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 adding at the end the following new section:
``SEC. 45BB. MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR NONPROFIT
ENTITY.
``(a) Allowance of Credit.--For purposes of section 38, the
manufactured home community sale credit determined under this section
for any taxable year is an amount equal to 75 percent of the qualified
gain received by the taxpayer during the taxable year.
``(b) Definitions.--For purposes of this section--
``(1) Qualified gain.--The term `qualified gain' means gain
from the sale or exchange of real property to a qualified
manufactured home community cooperative or corporation if--
``(A) the real property is acquired for use as a
manufactured home community,
``(B) the seller (or any related person) owned the
property for the entire 2-year period ending on the day
before the sale or exchange, and
``(C) the property is transferred subject to a
binding covenant that the property will be used as a
manufactured home community for not less than 50 years
(or, in the case of a manufactured home community
located in a State the laws of which restrict such
covenant to a lesser term, the maximum permissible term
allowed under such State laws).
``(2) Manufactured home community.--The term `manufactured
home community' means a community comprised primarily of
manufactured homes used solely for residential purposes and
owned by a manufactured home community cooperative or
corporation.
``(3) Qualified manufactured home community cooperative or
corporation.--
``(A) In general.--The term `qualified manufactured
home community cooperative or corporation' means a
cooperative or a nonprofit corporation established
pursuant to the laws of the State in which the property
used as a manufactured home community is located, and
which--
``(i) in the case of a community owned by a
nonprofit corporation whose membership
interests are sold on a nonappreciating basis,
has only 1 class of membership and such class
consists solely of residents, and
``(ii) in the case of a community owned by
a cooperative, has not more than 2 classes of
membership, and such classes consist solely of
residents and a tax-exempt organization.
``(B) Governance.--An entity shall not be treated
as a qualified manufactured home community cooperative
or corporation unless governance of the entity is
carried out by members elected to a board of directors
with voting structured equitably among all members.
``(C) Member.--The term `member' means--
``(i) an individual who--
``(I) has attained the age of 18,
``(II) is entitled to be a member
by reason of--
``(aa) the membership
interest of the individual to
execute an occupancy agreement
with the manufactured home
community cooperative nonprofit
with respect to a site in the
manufactured home community in
order to establish a
manufactured home which is
owned by the individual, or
``(bb) permission from the
manufactured community
cooperative or corporation, the
member's trust, or other
entity, and
``(III) is a resident of the
manufactured home community, and
``(ii) a tax-exempt organization.
``(4) Membership interest.--The term `membership interest'
means--
``(A) an ownership interest in a manufactured home
community cooperative or corporation, or
``(B) a membership interest in a manufactured home
community nonprofit corporation.
``(5) Manufactured home.--The term `manufactured home'
means a structure which is transportable in one or more
sections, which--
``(A) in traveling mode, is 8 body feet or more in
width and 40 body feet or more in length, or, when
erected on site, is 320 square feet or more,
``(B) is built on a permanent chassis and designed
to be used as a dwelling (with or without a permanent
foundation when connected to required utilities) and
includes plumbing, heating, and electrical heating
systems, and
``(C) in the case of a structure manufactured after
June 15, 1976, is certified as meeting the Manufactured
Home Construction and Safety Standards issued under the
National Manufactured Housing Construction and Safety
Standards Act of 1974 (42 U.S.C. 5401 et seq.) by the
Department of Housing and Urban Development and
displays a label of such certification on the exterior
of each transportable section.
``(c) Special Rules.--
``(1) Related person.--For purposes of subsection
(b)(1)(B), a person is related to the seller if--
``(A) such person bears a relationship to the
seller as specified in section 267(b) or 707(b)(1), or
``(B) such person and the seller are engaged in
trades or businesses under common control within the
meanings of subsections (a) and (b) of section 52.
``(2) Election by both seller and buyer.--The credit is
allowable under this section only if--
``(A) both the seller and the purchaser of the real
property execute an affidavit representing that the
sale meets the requirements of subsection (b)(1), and
the purchaser acknowledges liability for the recapture
of the credit under subsection (d) in case of any
violation described in such subsection,
``(B) the purchaser of the real property records
the affidavit, and
``(C) the affidavit is referenced in the deed to
the real property.
``(3) Requirement.--The seller shall include a copy of the
affidavit representing the sale with the return of tax.
``(d) Tax Upon Violation of Covenant.--There is imposed a tax on
the buyer for a violation of the covenant specified in subsection
(b)(1)(C). The amount of such tax shall be 20 percent of the net
proceeds after settlement for the sale or exchange of the real property
referred to in subsection (b)(1). For purposes of section 501(a), the
tax imposed by this subsection shall not be treated as a tax imposed by
this subtitle.
``(e) Regulations.--The Secretary shall issue such regulations or
other guidance as may be necessary to carry out this section, including
the recapture under subsection (d).''.
(b) Credit Allowed as Part of General Business Credit.--
Section 38(b) of the Internal Revenue Code of 1986 is
amended--
(1) by striking ``plus'' at the end of paragraph (40);
(2) by striking the period at the end of paragraph (41) and
inserting ``, plus''; and
(3) by adding at the end the following new paragraph:
``(42) the manufactured home community sale credit
determined under section 45BB(a).''.
(c) Conforming Amendments.--
(1) Subsection (c) of section 196 of the Internal Revenue
Code of 1986 is amended--
(A) by striking ``and'' at the end of paragraph
(13);
(B) by striking the period at the end of paragraph
(14) and inserting ``, and''; and
(C) by adding at the end the following new
paragraph:
``(15) the manufactured home community sale credit
determined under section 45BB(a).''.
(2) The table of sections for subpart D of part IV of
subchapter A of chapter 1 of such the Internal Revenue Code of
1986 is amended by adding at the end the following new item:
``Sec. 45BB. Manufactured home community sale to residents or nonprofit
entity.''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2023.
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