[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5156 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5156
To amend the Internal Revenue Code of 1986 to enhance the low-income
housing tax credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 24, 2024
Mr. Whitehouse (for himself and Mr. Reed) 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 enhance the low-income
housing tax credit, 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 ``Affordable Housing Construction
Act''.
SEC. 2. INCREASE IN STATE HOUSING CREDIT CEILING.
(a) In General.--Section 42(h)(3)(C)(ii) of the Internal Revenue
Code of 1986 is amended--
(1) by striking ``$1.75'' in subclause (I) and inserting
``$9.79'', and
(2) by striking ``$2,000,000'' in subclause (II) and
inserting ``$11,340,000''.
(b) Inflation Adjustments.--Section 42(h)(3)(H) is amended--
(1) by striking ``In the case of a calendar year after
2002, the $2,000,000 and $1.75 amounts in subparagraph (C)'' in
clause (i) and inserting ``In the case of a calendar year after
2025, the $16,542,968 and $9.79 amounts in subparagraph (C)'',
(2) by striking ``calendar year 2001'' in clause (i)(II)
and inserting ``calendar year 2024'',
(3) by striking ``$2,000,000'' in clause (ii)(I) and
inserting ``$11,340,000'', and
(4) by striking ``$1.75'' in clause (ii)(II) and inserting
``$9.79''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2024.
SEC. 3. INCREASED CREDIT AMOUNTS AND CREDIT ALLOCATION SET-ASIDES FOR
CERTAIN BUILDINGS.
(a) Increased Credit Amounts.--
(1) In general.--Section 42(d)(5) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
subparagraphs:
``(C) Increase in credit for prevailing wage
buildings.--
``(i) In general.--In the case of any
building which pays applicable laborers at
rates not less than the prevailing rates for
construction, alteration, or repair of a
similar character in the locality in which such
facility is located as most recently determined
by the Secretary of Labor, in accordance with
subchapter IV of chapter 31 of title 40, United
States Code, and which is designated by the
housing credit agency as requiring the increase
in credit under this subparagraph in order for
such payments to be financially feasible as
part of a qualified low-income housing
project--
``(I) in the case of a new
building, the eligible basis of such
building shall be increased by 50
percent of such basis determined
without regard to this subparagraph and
subparagraphs (B), (D), (E), (F), and
(G), and
``(II) in the case of an existing
building, the rehabilitation
expenditures taken into account under
subsection (e) shall be increased by 50
percent of such expenditures determined
without regard to this subparagraph and
subparagraphs (B), (D), (E), (F), and
(G).
``(ii) Applicable laborers.--For purposes
of this clause, the term `applicable laborers'
means, with respect to any building, any
laborers employed by the taxpayer, or any
contractor or subcontractor, in the
construction, alteration, or repair of the
building.
``(D) Increase in credit for buildings powered by
renewable energy.--
``(i) In general.--In the case of any
building which utilizes renewable energy (as
defined in section 203(b)(2) of the Energy
Policy Act of 2005), and which is designated by
the housing credit agency as requiring the
increase in credit under this subparagraph in
order for such renewable energy use to be
financially feasible as part of a qualified
low-income housing project--
``(I) in the case of a new
building, the eligible basis of such
building shall be increased by the
applicable percentage of such basis
determined without regard to this
subparagraph and subparagraphs (B),
(C), (E), (F), and (G), and
``(II) in the case of an existing
building, the rehabilitation
expenditures taken into account under
subsection (e) shall be increased by
the applicable percentage of such
expenditures determined without regard
to this subparagraph and subparagraphs
(B), (C), (E), (F), and (G).
``(ii) Applicable percentage.--For purposes
of this subparagraph, the applicable percentage
is 50 percent of the percentage of the energy
utilized by such building which is from
renewable energy (as so defined).
``(E) Increase in credit for buildings near public
transportation.--
``(i) In general.--In the case of any
building which is located in a public
transportation zone and which is designated by
the housing credit agency as requiring the
increase in credit under this subparagraph in
order for such building to be financially
feasible as part of a qualified low-income
housing project--
``(I) in the case of a new
building, the eligible basis of such
building shall be increased by 25
percent of such basis determined
without regard to this subparagraph and
subparagraphs (B), (C), (D), (F), and
(G), and
``(II) in the case of an existing
building, the rehabilitation
expenditures taken into account under
subsection (e) shall be increased by 25
percent of such expenditures determined
without regard to this subparagraph and
subparagraphs (B), (C), (D), (F), and
(G).
``(ii) Public transportation zone.--For
purposes of this subparagraph, a building is
located in a public transportation zone if--
``(I) the building is within one-
half mile of an existing commuter rail,
light rail, or subway station,
``(II) the building is within one-
quarter mile of one or more existing
public bus stops, or
``(III) the building is located in
a census tract--
``(aa) designated by the
Administrator of the
Environmental Protection Agency
as having above average
walkability, or
``(bb) which is adjacent to
2 or more such census tracts
described in item (aa).
``(F) Increase in credit for buildings serving
households with people with disabilities.--
``(i) In general.--In the case of any
building which has low-income units that meet
the applicable design standards for occupancy
by persons with mental, physical, sensory, or
developmental disabilities, and which is
designated by the housing credit agency as
requiring the increase in credit under this
subparagraph in order for such building to be
financially feasible as part of a qualified
low-income housing project--
``(I) in the case of a new
building, the eligible basis of such
building shall be increased by the
applicable percentage of such basis
determined without regard to this
subparagraph and subparagraphs (B),
(C), (D), (D), and (G), and
``(II) in the case of an existing
building, the rehabilitation
expenditures taken into account under
subsection (e) shall be increased by
the applicable percentage of such
expenditures determined without regard
to this subparagraph and subparagraphs
(B), (C), (D), (E), and (G).
``(ii) Design standards.--For purposes of
clause (i), the term `applicable design
standards' means the principles and standards
of adaptable design as detailed in the Uniform
Federal Accessibility Standards, or any
successor standard designated by the Secretary.
``(iii) Applicable percentage.--For
purposes of this subparagraph, the term
`applicable percentage' means the number of
percentage points (not to exceed 50 percentage
points) by which--
``(I) the ratio (expressed as a
percentage and rounded to the nearest
percent) of the number of low-income
units in the building that meet the
applicable design standards for
occupancy by persons with mental,
physical, sensory, or developmental
disabilities bears to the total number
of units in the building, exceeds
``(II) 5 percentage points.
``(G) Increase in credit for buildings serving
extremely low-income families.--
``(i) In general.--In the case of any
building in which 20 percent of the units are
occupied by extremely low-income families and
which is designated by the housing credit
agency as requiring the increase in credit
under this subparagraph in order for such
building to be financially feasible as part of
a qualified low-income housing project--
``(I) in the case of a new
building, the eligible basis of such
building shall be increased by 50
percent of such basis determined
without regard to this subparagraph and
subparagraphs (B), (C), (D), (E), and
(F), and
``(II) in the case of an existing
building, the rehabilitation
expenditures taken into account under
subsection (e) shall be increased by 50
percent of such expenditures determined
without regard to this subparagraph and
subparagraphs (B), (C), (D), (E), and
(F).
``(ii) Extremely low-income families.-- For
purposes of this subparagraph, the term
`extremely low-income families' means families
whose annual incomes do not exceed 30 percent
of the area median gross income, as determined
in consultation with the Secretary of Health
and Human Services.
``(H) Limitation.--Notwithstanding subparagraphs
(B), (C), (D), (E), (F), and (G)--
``(i) the eligible basis of any building
shall not exceed an amount equal to 250 percent
of such basis determined without regard to
subparagraphs (B), (C), (D), (E), (F), and (G),
and
``(ii) the rehabilitation expenditures
taken into account under subsection (e) shall
not exceed 250 percent of such expenditures
determined without regard to subparagraphs (B),
(C), (D), (E), (F), and (G).''.
(2) Conforming amendments.--Section 42(d)(5)(B)(i) of such
Code is amended--
(A) by striking ``shall be 130 percent of'' each
place it appears in subclauses (I) and (II) and
inserting ``shall be increased by 30 percent of'', and
(B) by striking ``this subparagraph'' each place it
appears in subclauses (I) and (II) and inserting ``this
subparagraph and subparagraphs (B), (C), (D), (E), (F),
and (G)''.
(3) Effective date.--The amendments made by this subsection
shall apply to buildings placed in service after the date of
the enactment of this Act.
(b) Set-Aside for Certain Projects.--
(1) In general.--Section 42(h) of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
paragraph:
``(9) Portion of state ceiling set-aside for certain
projects.--
``(A) In general.--Not more than two-thirds of the
State housing credit ceiling for any State for any
calendar year shall be allocated to projects other than
qualified low-income housing projects described in
subparagraphs (C), (D), (E), (F), and (G) of subsection
(d)(5).
``(B) State may not override set-aside.--Nothing in
subparagraph (F) of paragraph (3) shall be construed to
permit a State not to comply with subparagraph (A) of
this paragraph.''.
(2) Effective date.--The amendments made by this subsection
shall apply to calendar years beginning after the date of the
enactment of this Act.
SEC. 4. TAX-EXEMPT BOND FINANCING REQUIREMENT.
(a) In General.--Section 42(h)(4) of the Internal Revenue Code of
1986 is amended by striking subparagraph (B) and inserting the
following:
``(B) Special rule where minimum percent of
buildings is financed with tax-exempt bonds subject to
volume cap.--For purposes of subparagraph (A),
paragraph (1) shall not apply to any portion of the
credit allowable under subsection (a) with respect to a
building if--
``(i) 50 percent or more of the aggregate
basis of such building and the land on which
the building is located is financed by 1 or
more obligations described in subparagraph (A),
or
``(ii)(I) 15 percent or more of the
aggregate basis of such building and the land
on which the building is located is financed by
1 or more qualified obligations, and
``(II) 1 or more of such qualified
obligations--
``(aa) are part of an issue
the issue date of which is
after December 31, 2023, and
``(bb) provide the
financing for not less than 5
percent of the aggregate basis
of such building and the land
on which the building is
located.
``(C) Qualified obligation.--For purposes of
subparagraph (B)(ii), the term `qualified obligation'
means an obligation which is described in subparagraph
(A) and