[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2725 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 2725
To amend the Internal Revenue Code of 1986 to reform the low-income
housing credit, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 8, 2025
Mr. LaHood (for himself, Ms. DelBene, Ms. Tenney, Mr. Beyer, Mr.
Feenstra, Mr. Panetta, Mr. Buchanan, Mr. Larson of Connecticut, Mr.
Kelly of Pennsylvania, Mr. Davis of Illinois, Mr. Estes, Ms. Sanchez,
Mrs. Miller of West Virginia, Ms. Sewell, Mr. Murphy, Ms. Chu, Mr.
Kustoff, Ms. Moore of Wisconsin, Mr. Fitzpatrick, Mr. Evans of
Pennsylvania, Mr. Moore of Utah, Mr. Schneider, Ms. Malliotakis, Mr.
Gomez, Mr. Carey, Mr. Horsford, Mr. Yakym, Mr. Suozzi, Mr. Miller of
Ohio, Mr. Lieu, Mr. Emmer, Mr. Neguse, Mr. Hudson, Mr. Mrvan, Mr.
Reschenthaler, Ms. McCollum, Mrs. Houchin, Ms. McBride, Mr. Flood, Ms.
Kelly of Illinois, Mr. Finstad, Ms. Schakowsky, Mr. Kiley of
California, Ms. Omar, Ms. Salazar, Mr. Peters, Mr. Huizenga, Mrs.
Ramirez, Mr. Balderson, Ms. Budzinski, Mr. Moolenaar, Mr. Pappas, Mr.
Gooden, Mrs. Beatty, Mr. LaMalfa, Mr. Garcia of California, Mr.
Bergman, Ms. Goodlander, Mr. Fleischmann, Mrs. Dingell, Mrs. Kim, Mr.
Casten, Mr. Garbarino, Ms. DeGette, Mr. Cole, Mr. Vargas, Mr. Valadao,
Ms. Barragan, Mr. Carter of Georgia, Ms. Tlaib, Mr. Walberg, Mr. Bera,
Mr. Calvert, Mr. Costa, Mr. Rouzer, Ms. Houlahan, Mr. Barr, Mr. Foster,
Mr. Lawler, Mr. Quigley, Mr. Guest, Ms. Dean of Pennsylvania, Mr.
Taylor, Mr. Goldman of New York, Mr. Evans of Colorado, Mr. Morelle,
Ms. Maloy, Mr. Torres of New York, Mr. Zinke, Mr. Crow, Mr. Sessions,
Ms. Pettersen, Mr. Issa, Mr. Mullin, Mr. Nunn of Iowa, Mr. Vasquez, Mr.
Langworthy, Ms. Stevens, Mr. Guthrie, Mr. Cleaver, Mrs. Hinson, Mr.
Deluzio, Mr. Wittman, Mr. Magaziner, Mr. Johnson of South Dakota, Ms.
Matsui, Mrs. Kiggans of Virginia, Mr. Thanedar, Mr. Comer, Mrs. McIver,
Mr. Rogers of Kentucky, Mr. Amo, Mr. Mann, Ms. Balint, Mr. Bost, Mr.
Huffman, Mr. Ezell, Ms. Craig, and Mr. Stauber) 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 reform the low-income
housing 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; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Affordable Housing
Credit Improvement Act of 2025''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--REFORM OF STATE ALLOCATION FORMULAS
Sec. 101. Increases in State allocations.
TITLE II--REFORMS RELATING TO TENANT ELIGIBILITY
Sec. 201. Average income test applicability to exempt facility bonds.
Sec. 202. Codification of rules relating to increased tenant income.
Sec. 203. Modification of student occupancy rules.
Sec. 204. Tenant voucher payments taken into account as rent for
certain purposes.
Sec. 205. Requirement that low-income housing credit-supported housing
protect victims of domestic abuse.
Sec. 206. Clarification of general public use requirement relating to
veterans, etc.
TITLE III--RULES RELATING TO CREDIT ELIGIBILITY AND DETERMINATION
Sec. 301. Reconstruction or replacement period after casualty loss.
Sec. 302. Modification of previous ownership rules; limitation on
acquisition basis.
Sec. 303. Certain relocation costs taken into account as rehabilitation
expenditures.
Sec. 304. Repeal of qualified census tract population cap.
Sec. 305. Determination of community revitalization plan to be made by
housing credit agency.
Sec. 306. Prohibition of local approval and contribution requirements.
Sec. 307. Increase in credit for certain projects designated to serve
extremely low-income households.
Sec. 308. Increase in credit for bond-financed projects designated by
State agency.
Sec. 309. Elimination of basis reduction for low-income housing
properties energy efficient commercial
building deduction.
Sec. 310. Restriction of planned foreclosures.
Sec. 311. Increase of population cap for difficult development areas.
Sec. 312. Increased cost oversight and accountability.
Sec. 313. Tax-exempt bond financing requirement.
TITLE IV--REFORMS RELATING TO NATIVE AMERICAN ASSISTANCE
Sec. 401. Selection criteria under qualified allocation plans.
Sec. 402. Inclusion of Indian areas as difficult development areas for
purposes of certain buildings.
TITLE V--REFORMS RELATING TO RURAL ASSISTANCE
Sec. 501. Inclusion of rural areas as difficult development areas.
Sec. 502. Uniform income eligibility for rural projects.
TITLE VI--EXEMPT FACILITY BONDS
Sec. 601. Revision and clarification of the treatment of refunding
issues.
TITLE VII--AFFORDABLE HOUSING TAX CREDIT
Sec. 701. Affordable housing tax credit.
TITLE VIII--DATA AND TRANSPARENCY
Sec. 801. Sense of Congress.
TITLE I--REFORM OF STATE ALLOCATION FORMULAS
SEC. 101. INCREASES IN STATE ALLOCATIONS.
(a) In General.--Clause (ii) of section 42(h)(3)(C) of the Internal
Revenue Code of 1986 is amended--
(1) in subclause (I), by striking ``$1.75'' and inserting
``the per capita amount'', and
(2) in subclause (II), by striking ``$2,000,000'' and
inserting ``the minimum amount''.
(b) Per Capita Amount; Minimum Amount.--Section 42(h)(3) of the
Internal Revenue Code of 1986 is amended by striking subparagraphs (H)
and (I) and inserting the following:
``(H) Per capita amount.--For purposes of
subparagraph (C)(ii)(I), the per capita amount shall be
determined as follows:
``(i) Calendar year 2025.--For calendar
year 2025, the per capita amount is $4.25.
``(ii) Calendar year 2026.--For calendar
year 2026, the per capita amount is the product
of--
``(I) 1.25, and
``(II) the dollar amount under
clause (i) increased by an amount equal
to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) for such
calendar year, determined by
substituting `calendar year
2024' for `calendar year 2016'
in subparagraph (A)(ii)
thereof.
If the amount determined after
application of the preceding sentence
is not a multiple of $5,000, such
amount shall be rounded to the next
lowest multiple of $5,000.
``(iii) Calendar years after 2026.--In the
case of any calendar year after 2026, the per
capita amount is the dollar amount determined
under clause (ii) 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,
determined by substituting `calendar
year 2025' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any amount increased under the preceding
sentence which is not a multiple of 5 cents
shall be rounded to the next lowest multiple of
5 cents.
``(I) Minimum amount.--For purposes of subparagraph
(C)(ii)(II), the minimum amount shall be determined as
follows:
``(i) Calendar year 2025.--For calendar
year 2025, the minimum amount is $4,876,000.
``(ii) Calendar year 2026.--For calendar
year 2026, the minimum amount is the product
of--
``(I) 1.25, and
``(II) the dollar amount under
clause (i) increased by an amount equal
to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) for such
calendar year, determined by
substituting `calendar year
2024' for `calendar year 2016'
in subparagraph (A)(ii)
thereof.
If the amount determined after
application of the preceding sentence
is not a multiple of 5 cents, such
amount shall be rounded to the next
lowest multiple of 5 cents.
``(iii) Calendar years after 2026.--In the
case of any calendar year after 2026, the
minimum amount is the dollar amount determined
under clause (ii) 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,
determined by substituting `calendar
year 2025' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any amount increased under the preceding
sentence which is not a multiple of $5,000
shall be rounded to the next lowest multiple of
$5,000.''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2024.
TITLE II--REFORMS RELATING TO TENANT ELIGIBILITY
SEC. 201. AVERAGE INCOME TEST APPLICABILITY TO EXEMPT FACILITY BONDS.
(a) In General.--Paragraph (1) of section 142(d) of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``(A) or (B)'' and inserting ``(A), (B), or
(C)'', and
(2) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Average income test.--A project meets the
requirements of this subparagraph if it meets the
minimum requirements of section 42(g)(1)(C).''.
(b) Effective Date.--The amendments made by this section shall
apply to elections made under section 142(d)(1) of the Internal Revenue
Code of 1986 after March 23, 2018.
SEC. 202. CODIFICATION OF RULES RELATING TO INCREASED TENANT INCOME.
(a) In General.--Clause (i) of section 42(g)(2)(D) of the Internal
Revenue Code of 1986 is amended by striking ``clauses (ii), (iii), and
(iv)'' and all that follows and inserting ``clauses (ii), (iii), (iv),
and (vi), notwithstanding an increase in the income of the occupants
above the income limitation applicable under paragraph (1)--
``(I) a low-income unit shall
continue to be treated as a low-income
unit if the income of such occupants
initially was 60 percent or less of
area median gross income and such unit
continues to be rent-restricted, and
``(II) a unit to which, at the time
of initial occupancy by such occupants,
any Federal, State, or local government
income restriction applied, and which
subsequently becomes part of a building
with respect to which rehabilitation
expenditures are taken into account
under subsection (e), shall be treated
as a low-income unit if the income of
such occupants initially was 60 percent
or less of area median gross income and
does not exceed 120 percent of area
median gross income as of the date of
acquisition of the property by the
taxpayer.''.
(b) Exception.--Subparagraph (D) of section 42(g)(2) of the
Internal Revenue Code of 1986, as amended by this Act, is further
amended by adding at the end the following new clause:
``(vi) Exception to rule relating to
increased tenant income.--In the case of an
occupant of a low-income unit who initially
qualified to occupy such unit by reason of
paragraph (1)(C) with an income in excess of 60
percent of area median gross income but not in
excess of 80 percent of area median gross
income, clause (i) shall be applied for
substituting `80 percent' for `60 percent' each
place it appears.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2024.
SEC. 203. MODIFICATION OF STUDENT OCCUPANCY RULES.
(a) In General.--Subparagraph (D) of section 42(i)(3) of the
Internal Revenue Code of 1986 is amended to read as follows:
``(D) Rules relating to students.--
``(i) In general.--A unit occupied solely
by individuals who--
``(I) have not attained age 24, and
``(II) are enrolled in a full-time
course of study at an institution of
higher education (as defined in section
3304(f)),
shall not be treated as a low-income unit.
``(ii) Exception for certain federal
programs.--In the case of a federally-assisted
building (as defined in subsection
(d)(6)(C)(i)), clause (i) shall not apply to a
unit all of the occupants of which meet all
applicable requirements under the housing
program described in such subsection through
which the building is assisted, financed, or
operated.
``(iii) Other exceptions.--An individual
shall not be treated as described in clause (i)
if the individual meets the income limitation
applicable under subsection (g)(1) to the
project of which the building is a part and--
``(I) is married,
``(II) is a person with
disabilities (as defined in section
3(b)(3)(E) of the United States Housing
Act of 1937),
``(III) is a veteran (as defined in
section 101(2) of title 38, United
States Code),
``(IV) has 1 or more qualifying
children (as defined in section
152(c)),
``(V) is or has been a victim or
threatened victim of domestic violence,
dating violence, sexual assault, or
stalking (as defined in section 40002
of the Violence Against Women Act of
1994),
``(VI) is or has been a victim of
any form of human trafficking, or
``(VII) is, or was prior to
attaining the age of majority--
``(aa) an emancipated minor
or in legal guardianship as
determined by a court of
competent jurisdiction in the
individual's State of legal
residence,
``(bb) under the care and
placement responsibility of the
State agency responsible for
administering a plan under part
B or part E of title IV of the
Social Security Act, or
``(cc) an unaccompanied
youth (within the meaning of
section 725(6) of the McKinney-
Vento Homeless Assistance Act
(42 U.S.C. 11434a(6))) or a
homeless child or youth (wit