,,ii #aafth ,,congress #ast ,session ,s4 #bega ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #bf1 #bjai,mrs4 ,shaheen 7for herself and ,ms4 ,smith7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow a business credit for gain from the sale of real property for use as a manufactured home community1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,manufactured ,housing ,community ,sustainability ,act of #bjai4 #b4 ,findings ,the ,congress finds that-- 7#a7 more than #ag1jjj1jjj people live in manufactured homes and benefit from high-quality affordable homes which provide stability2 7#b7 owners of manufactured homes have disproportionately low-income households1 and in #bjac1 the median annual household income for living in manufactured housing was #bh1djj2 7#c7 approximately #ge percent of manufactured home households earn less than #ej1jjj per year2 7#d7 more than #aj percent of veterans in the ,united ,states live in manufactured homes2 7#e7 in late #aiij1 manufactured housing represented #b_/c of the new affordable housing produced in the ,united ,states and remains a significant source of unsubsidized affordable housing in the ,united ,states2 7#f7 in #bjae1 the average cost per square foot for a new manufactured home was #dh dollars1 less than half of the cost per square foot for a new-site built1 structure-only home1 which was #aja2 7#g7 in #bjji1 #dc percent of all new homes that sold for less than #aej1jjj were manufactured homes2 7#h7 manufactured homes account for #bc percent of new home sales under #bjj1jjj2 7#i7 more than #ej1jjj manufactured home communities1 also referred to as mobile home parks1 exist throughout the ,united ,states2 7#aj7 more than #b1ijj1jjj manufactured homes are placed in manufactured home communities2 7#aa7 manufactured home communities provide critical affordable housing1 but receive very little ,federal1 ,state1 or local funds to subsidize the cost of manufactured homes2 7#ab7 manufactured home owners in such communities may own the home1 but they do not own the land under the home1 which leaves the home owners vulnerable to rent increases1 arbitrary rule enforcement1 and in the case of a manufactured home community owner converting the land to some other use1 community closure2 7#ac7 an eviction or closure of a manufactured home community is very disruptive to a resident 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 home2 7#ad7 in an effort to preserve a crucial source of affordable housing within the past two decades1 a national network of housing providers has helped residents purchase and own the land under the manufactured home community1 and manage the manufactured home community2 7#ae7 nationwide1 there are more than #a1jjj stable1 permanent ownership cooperatives or nonprofit-owned developments in more than a dozen ,states2 7#af7 members of manufactured home communities continue to own such homes individually1 own an equal share of the land beneath the entire manufactured home community1 participate in the governing of the community1 and elect a board of directors who make major decisions within the manufactured home community by a democratic vote2 7#ag7 in ,new ,hampshire1 more than #cj percent of manufactured home communities are owned by residents2 7#ah7 resident-owned cooperatives and nonprofit owned communities have also flourished in ,vermont1 ,massachusetts1 ,rhode ,island1 ,washington1 ,oregon1 and ,minnesota2 7#ai7 nationwide1 only #b percent of all manufactured home communities are resident or nonprofit-owned2 7#bj7 manufactured home community owners often prefer to devise such property tax free1 rather than selling the community1 in order to avoid capital gain taxes2 7#ba7 when the owner of a manufactured home community dies1 the heirs of the owner frequently sell the community to the highest bidder which results in displacement for dozens and sometimes hundreds of families2 and 7#bb7 in order to preserve manufactured home communities in the future1 a ,federal tax benefit should be established to induce manufactured home community owners to sell such properties to residents that the owners have known for decades1 or to nonprofit organizations4 #c4 ,tax credit for manufactured home community sale to residents or nonprofit entity 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to business related credits7 is amended by adding at the end the following new section3 #de,t4 ,manufactured home community sale to residents or nonprofit entity 7a7 ,allowance of credit ,for purposes of section #ch1 the manufactured home community sale credit determined under this section for any taxable year is an amount equal to #ge percent of the qualified gain received by the taxpayer during the taxable year4 7b7 ,definitions ,for purposes of this section-- 7#a7 ,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-- 7,a7 the real property is acquired for use as a manufactured home community1 7,b7 the seller 7or any related person7 owned the property for the entire #b-year period ending on the day before the sale or exchange1 and 7,c7 the property is transferred subject to a binding covenant that the property will be used as a manufactured home community for not less than #ej years 7or1 in the case of a manufactured home community located in a ,state the laws of which restrict such covenant to a lesser term1 the maximum permissible term allowed under such ,state laws74 7#b7 ,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 corporation4 7#c7 ,qualified manufactured home community cooperative or corporation 7,a7 ,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 located1 and which-- 7i7 in the case of a community owned by a nonprofit corporation whose membership interests are sold on a nonappreciating basis1 has only #a class of membership and such class consists solely of residents1 and 7ii7 in the case of a community owned by a cooperative1 has not more than #b classes of membership1 and such classes consist solely of residents and a tax-exempt organization4 7,b7 ,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 members4 7,c7 ,member ,the term member means-- 7i7 an individual who-- 7,i7 has attained the age of #ah1 7,,ii7 is entitled to be a member by reason of-- 7aa7 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 individual1 or 7bb7 permission from the manufactured community cooperative or corporation1 the member's trust1 or other entity1 and 7,,iii7 is a resident of the manufactured home community1 and 7ii7 a tax exempt organization4 7#d7 ,membership interest ,the term membership interest means-- 7,a7 an ownership interest in a manufactured home community cooperative or corporation1 or 7,b7 a membership interest in a manufactured home community nonprofit corporation4 7#e7 ,manufactured home ,the term manufactured home means a structure which is transportable in one or more sections1 which-- 7,a7 in traveling mode1 is #h body feet or more in width and #dj body feet or more in length1 or1 when erected on site1 is #cbj square feet or more1 7,b7 is built on a permanent chassis and designed to be used as a dwelling 7with or without a permanent foundation when connected to required utilities7 and includes plumbing1 heating1 and electrical heating systems1 and 7,c7 in the case of a structure manufactured after ,june #ae1 #aigf1 is certified as meeting the ,manufactured ,home ,construction and ,safety ,standards issued under the ,national ,manufactured ,housing ,construction and ,safety ,standards ,act of #aigd 7#db ,u4,s4,c4 #edja et seq47 by the ,department of ,housing and ,urban ,development and displays a label of such certification on the exterior of each transportable section4 7c7 ,special rules 7#a7 ,related person ,for purposes of subsection 7b77#a77;,b71 a person is related to the seller if-- 7,a7 such person bears a relationship to the seller as specified in section #bfg7;b7 or #gjg7;b77#a71 or 7,b7 such person and the seller are engaged in trades or businesses under common control within the meanings of subsections 7a7 and 7b7 of section #eb4 7#b7 ,election by both seller and buyer ,the credit is allowable under this section only if-- 7,a7 both the seller and the purchaser of the real property execute an affidavit representing that the sale meets the requirements of subsection 7b77#a71 and the purchaser acknowledges liability for the recapture of the credit under subsection 7d7 in case of any violation described in such subsection1 7,b7 the purchaser of the real property records the affidavit1 and 7,c7 the affidavit is referenced in the deed to the real property4 7#c7 ,requirement ,the seller shall include a copy of the affidavit representing the sale with the return of tax4 7d7 ,tax upon violation of covenant ,there is imposed a tax on the buyer for a violation of the covenant specified in subsection 7b77#a77;,c74 ,the amount of such tax shall be #bj percent of the net proceeds after settlement for the sale or exchange of the real property referred to in subsection 7b77#a74 ,for purposes of section #eja7;a71 the tax imposed by this subsection shall not be treated as a tax imposed by this subtitle4 7e7 ,regulations ,the ,secretary shall issue such regulations or other guidance as may be necessary to carry out this section1 including the recapture under subsection 7d74 4 7b7 ,credit allowed as part of general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended-- 7#a7 by striking plus at the end of paragraph 7#ca72 7#b7 by striking the period at the end of paragraph 7#cb7 and inserting 1 plus2 and 7#c7 by adding at the end the following new paragraph3 7#cc7 the manufactured home community sale credit determined under section #de,t7a74 4 7c7 ,conforming amendments 7#a7 ,subsection 7c7 of section #aif of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 by striking and at the end of paragraph 7#ac72 7,b7 by striking the period at the end of paragraph 7#ad7 and inserting 1 and2 and 7,c7 by adding at the end the following new paragraph3 7#ae7 the manufactured home community sale credit determined under section #de,t7a74 4 7#b7 ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new item3 ,sec4 #de,t4 ,manufactured home community sale to residents or nonprofit entity4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjai4