,,ii #aafth ,,congress #b;d ,session ,s4 #djgc ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #be1 #bjbj,mr4 ,cardin 7for himself1 ,mr4 ,portman1 ,mr4 ,coons1 ,mr4 ,young1 ,mr4 ,brown1 and ,mr4 ,scott of ,south ,carolina7 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 credit against tax for neighborhood revitalization1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,neighborhood ,homes ,investment ,act4 #b4 ,neighborhood homes credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #db the following new section3 #db;,a4 ,neighborhood homes credit 7a7 ,allowance of credit ,for purposes of section #ch1 the amount of the neighborhood homes credit determined under this section for a taxable year for a qualified project shall be1 with respect to each qualified residence that is part of such qualified project and that experiences a qualified completion event during such taxable year1 an amount equal to-- 7#a7 in the case of an affordable sale1 with respect to the seller1 the excess of-- 7,a7 the qualified development cost incurred by such seller for such qualified residence1 over 7,b7 the sale price of such qualified residence1 or 7#b7 in the case of any other qualified completion event1 with respect to a taxpayer other than the owner of the qualified residence 7or a related person with respect to such owner71 the excess of-- 7,a7 the development cost incurred by such taxpayer for such qualified residence1 over 7,b7 the amount received by such taxpayer as payment for such rehabilitation4 7b7 ,limitations 7#a7 ,amount ,the amount determined under subsection 7a7 with respect to a qualified residence shall not exceed #ce percent of the lesser of-- 7,a7 the qualified development cost1 or 7,b7 #hj percent of the national median sale price for new homes 7as determined pursuant to the most recent census data available as of the date on which the neighborhood homes credit agency makes an allocation for the qualified project74 7#b7 ,allocations 7,a7 ,in general ,the amount determined under subsection 7a7 with respect to a qualified residence that is part of a qualified project and that experiences a qualified completion event shall not exceed the excess of-- 7i7 the amount determined under subparagraph 7,b71 over 7ii7 the amounts previously determined under subsection 7a7 with respect to such qualified project4 7,b7 ,allocation amount ,the amount determined under this paragraph with respect to a qualified residence that is part of a qualified project and that experiences a qualified completion event is the least of-- 7i7 the amount allocated to such project by the neighborhood homes credit agency under this section1 7ii7 pursuant to subparagraph 7,c71 the amount such agency determines at the time of the qualified completion event is necessary to ensure the financial feasibility of the project1 or 7iii7 in the case of a qualified completion event that occurs after the #e-year period beginning on the date of the allocation referred to in clause 7i71 #j4 7,c7 ,financial feasability ,for purposes of subparagraph 7,b77ii71 the neighborhood homes credit agency shall consider-- 7i7 the sources and uses of funds and the total financing planned for the qualified project1 7ii7 any proceeds or receipts expected to be generated by reason of tax benefits1 7iii7 the percentage of the amount allocated to such project under this section used for project costs other than the cost of intermediaries1 and 7iv7 the reasonableness of the developmental costs and fees of the qualified project4 7c7 ,qualified development cost ,for purposes of this section-- 7#a7 ,in general ,the term qualified development cost means1 with respect to a qualified residence1 so much of the allowable development cost as the neighborhood homes credit agency certifies1 at the time of the completion event1 meets the standards promulgated under subsection 7h77#a77;,c74 7#b7 ,allowable development cost ,the term allowable development cost means-- 7,a7 the cost of construction1 substantial rehabilitation1 demolition of any structure1 and environmental remediation1 and 7,b7 in the case of an affordable sale1 so much of the cost of acquiring buildings and land as does not exceed an amount equal to #ge percent of the costs described in subparagraph 7,a74 7#c7 ,condominium and cooperative housing units ,in the case of a qualified residence described in subparagraph 7,b7 or 7,c7 of subsection 7f77#a71 the allowable development cost of such qualified residence shall be an amount equal to the total allowable development cost of the entire condominium or cooperative housing property in which such qualified residence is located1 multiplied by a fraction-- 7,a7 the numerator of which is the total floor space of such qualified residence1 and 7,b7 the denominator of which is the total floor space of all residences within such property4 7d7 ,qualified project ,for purposes of this section1 the term qualified project means a project that-- 7#a7 a neighborhood homes credit agency certifies will build or substantially rehabilitate #a or more qualified residences located in one or more qualified census tracts1 and 7#b7 is designated by such agency as a qualified project under this section and is allocated 7before such building or substantial rehabilitation begins7 a portion of the amount allocated to such agency under subsection 7g74 7e7 ,qualified census tract ,for purposes of this section-- 7#a7 ,in general ,the term qualified census tract means a census tract-- 7,a7 with-- 7i7 a median gross income which does not exceed #hj percent of the applicable area median gross income1 7ii7 a poverty rate that is not less than #acj percent of the applicable area poverty rate1 and 7iii7 a median value for owner-occupied homes that does not exceed applicable area median value for owner-occupied homes1 7,b7 which is located in a city with a population of not less than #ej1jjj and a poverty rate that is not less than #aej percent of the applicable area poverty rate1 and which has-- 7i7 a median gross income which does not exceed the applicable area median gross income1 and 7ii7 a median value for owner-occupied homes that does not exceed #hj percent of the applicable area median value for owner-occupied homes1 or 7,c7 which is located in a nonmetropolitan county and which has-- 7i7 a median gross income which does not exceed the applicable area median gross income1 and 7ii7 been designated by a neighborhood homes credit agency under this clause4 7#b7 ,additional census tracts for substantial rehabilitation ,in the case of a qualified residence that is intended for substantial rehabilitation described in subsection 7f77#e77;,b71 the term qualified census tract includes a census tract that meets the requirements of paragraph 7#a77;,a71 without regard to clause 7iii71 and that is designated by the neighborhood homes credit agency under this paragraph4 7#c7 ,list of qualified census tracts ,the ,secretary of ,housing and ,urban ,development shall1 for each year1 make publicly available a list of qualified census tracts under-- 7,a7 on a combined basis1 subparagraphs 7,a7 and 7,b7 of paragraph 7#a71 7,b7 subparagraph 7,c7 of such paragraph1 and 7,c7 paragraph 7#b74 7f7 ,other definitions ,for purposes of this section-- 7#a7 ,qualified residence ,the term qualified residence means a residence that consists of-- 7,a7 a single-family home containing #d or fewer residential units1 7,b7 a condominium unit1 or 7,c7 a house or an apartment owned by a cooperative housing corporation 7as defined in section #baf7;b774 7#b7 ,affordable sale 7,a7 ,in general 7i7 ,in general ,the term affordable sale means a sale to a qualified homeowner of a qualified residence that the neighborhood homes credit agency certifies as meeting the standards promulgated under subsection 7h77#a77;,d7 for a price that does not exceed-- 7,i7 in the case of any qualified residence not described in subclause 7,,ii71 7,,iii71 or 7,,iv71 the amount equal to the product of #d multiplied by the applicable area median gross income1 7,,ii7 in the case of a single-family home containing two residential units1 #abe percent of the amount described in subclause 7,i71 7,,iii7 in the case of a single-family home containing three residential units1 #aej percent of the amount described in subclause 7,i71 or 7,,iv7 in the case of a single-family home containing four residential units1 #age percent of the amount described in subclause 7,i74 7ii7 ,related persons 7,i7 ,in general ,a sale between related persons shall not be treated as an affordable sale4 7,,ii7 ,definition ,for purposes of this section1 a person 7in this clause referred to as the related person7 is related to any person if the related person bears a relationship to such person specified in section #bfg7;b7 or #gjg7;b77#a71 or the related person and such person are engaged in trades or businesses under common control 7within the meaning of subsections 7a7 and 7b7 of section #eb74 ,for purposes of the preceding sentence1 in applying section #bfg7;b7 or #gjg7;b77#a71 #aj percent shall be substituted for #ej percent4 7#c7 ,applicable area ,the term applicable area means-- 7,a7 in the case of a metropolitan census tract1 the metropolitan area in which such census tract is located1 and 7,b7 in the case of a census tract other than a census tract described in subparagraph 7,a71 the ,state4 7#d7 ,substantial rehabilitation ,the term substantial rehabilitation means rehabilitation efforts involving qualified development costs that are not less than the greater of-- 7,a7 #bj1jjj1 or 7,b7 #bj percent of the cost of acquiring buildings and land4 7#e7 ,qualified completion event ,the term qualified completion event means-- 7,a7 in the case of a qualified residence that is built or substantially rehabilitated as part of a qualified project and sold1 an affordable sale1 or 7,b7 in the case of a qualified residence that is substantially rehabilitated as part of a qualified project and owned by the same qualified homeowner throughout such rehabilitation1 the completion of such rehabilitation 7as determined by the neighborhood homes credit agency7 to the standards promulgated under subsection 7h77#a77;,d74 7#f7 ,qualified homeowner 7,a7 ,in general ,the term qualified homeowner means1 with respect to a qualified residence1 an individual-- 7i7 who owns and uses such qualified residence as the principal residence of such individual1 and 7ii7 whose income is #adj percent or less of the applicable area median gross income for the location of the qualified residence4 7,b7 ,ownership ,for purposes of a cooperative housing corporation 7as such term is defined in section #baf7;b771 a tenant-stockholder shall be treated as owning the house or apartment which such person is entitled to occupy4 7,c7 ,income ,for purposes of this paragraph1 income shall be a determined in accordance with section #adc7;f77#b7 and #adc7;f77#d74 7,d7 ,timing ,for purposes of this paragraph1 the income of a taxpayer shall be determined-- 7i7 in the case of a qualified residence that is built or substantially rehabilitated as part of a qualified project and sold1 at the time a binding contract for purchase is made1 or 7ii7 in the case of a qualified residence that is occupied by a qualified homeowner and intended to be substantially rehabilitated as part of a qualified project1 at the time a binding contract to undertake such rehabilitation is made4 7#g7 ,neighborhood homes credit agency ,the term neighborhood homes credit agency means the agency designated by the governor of a ,state as the neighborhood homes credit agency of the ,state4 7g7 ,allocation 7#a7 ,state neighborhood homes credit ceiling ,the ,state neighborhood homes credit amount for a ,state for a calendar year is an amount equal to the greater of-- 7,a7 the product of #f1 multiplied by the ,state population 7determined in accordance with section #adf7;j771 or 7,b7 #h1jjj1jjj4 7#b7 ,unused amount ,the ,state neighborhood homes credit amount for a calendar year shall be increased by the sum of-- 7,a7 any amount certified by the neighborhood homes credit agency of the ,state as having been previously allocated to a qualified project and not used during the #e-year period described in subsection 7b77#b77;,b77iii71 plus 7,b7 sum of the amount by which the amount determined under paragraph 7#a7 7without application of this paragraph7 exceeded the amount allocated to qualified projects in each of the three immediately preceding calendar years4 7#c7 ,portion of state credit ceiling for certain projects involving qualified nonprofit organizations ,rules similar to the rules of section #db7;h77#e7 shall apply4 7h7 ,responsibilities of neighborhood homes credit agencies 7#a7 ,in general ,notwithstanding subsection 7g71 the ,state neighborhood homes credit dollar amount shall be zero for a calendar year unless the neighborhood homes credit agency of the ,state-- 7,a7 allocates such amount pursuant to a qualified allocation plan of the neighborhood homes credit agency1 7,b7 allocates not more than #bj percent of such amount for the previous year to projects with respect to qualified residences in census tracts under subsection 7e77#a77;,c7 or 7e77#b71 7,c7 promulgates standards with respect to reasonable qualified development costs and fees1 7,d7 promulgates standards with respect to construction quality1 and 7,e7 submits to the ,secretary 7at such time and in such manner as the ,secretary may prescribe7 an annual report specifying-- 7i7 the amount of the neighborhood homes credits allocated to each qualified project for the previous year1 7ii7 with respect to each qualified residence completed in the preceding calendar year-- 7,i7 the census tract in which such qualified residence is located1 7,,ii7 with respect to the qualified project that includes such qualified residence1 the year in which such project received an allocation under this section1 7,,iii7 whether such qualified residence was new or substantially rehabilitated1 7,,iv7 the eligible basis of such qualified residence1 7,v7 the amount of the neighborhood homes credit with respect to such qualified residence1 7,,vi7 the sales price of such qualified residence or1 in the case of a qualified residence that is substantially rehabilitated as part of a qualified project and is owned by the same qualified homeowner during the entirety of such rehabilitation1 the cost of the substantial rehabilitation1 and 7,,vii7 the income of the qualified homeowner 7expressed as a percentage of the applicable area median gross income for the location of the qualified residence71 and 7iii7 such other information as the ,secretary may require4 7#b7 ,qualified allocation plan ,for purposes of this subsection1 the term qualified allocation plan means any plan which-- 7,a7 sets forth the selection criteria to be used to prioritize qualified projects for allocations of ,state neighborhood homes credit dollar amounts1 including-- 7i7 the need for new or substantially rehabilitated owner-occupied homes in the area addressed by the project1 7ii7 the expected contribution of the project to neighborhood stability and revitalization1 7iii7 the capability of the project sponsor1 and 7iv7 the likelihood the project will result in long-term homeownership1 7,b7 has been made available for public comment1 and 7,c7 provides a procedure that the neighborhood homes credit agency 7or any agent or contractor of such agency7 shall follow for purposes of-- 7i7 identifying noncompliance with any provisions of this section1 and 7ii7 notifying the ,internal ,revenue ,service of any such noncompliance of which the agency becomes aware4 7i7 ,possessions treated as states ,for purposes of this section1 the term ,state includes the ,district of ,columbia and a possession of the ,united ,states4 7j7 ,repayment 7#a7 ,in general 7,a7 ,sold during #e-year period ,if a qualified residence is sold during the #e-year period beginning on the date of the qualified completion event described in subsection 7a7 with respect to such qualified residence1 the seller shall transfer an amount equal to the repayment amount from the amount realized on such sale to the relevant neighborhood homes credit agency4 7,b7 ,use of repayments ,a neighborhood homes credit agency shall use any amount received pursuant to subparagraph 7,a7 only for purposes of qualified projects4 7#b7 ,repayment amount ,for purposes of paragraph 7#a77;,a71 the repayment amount is an amount equal to #ej percent of the gain from such resale1 reduced by #bj percent for each year of the #e-year period referred to in paragraph 7#a77;,a7 which ends before the date of the sale referred to in such paragraph4 7#c7 ,lien for repayment amount ,a neighborhood homes credit agency receiving an allocation under this section shall place a lien on each qualified residence that is built or rehabilitated as part of a qualified project for an amount such agency deems necessary to ensure potential repayment pursuant to paragraph 7#a77;,a74 7#d7 ,denial of deductions if converted to rental housing ,if1 during the #e-year period beginning on the date of the qualified completion event described in subsection 7a71 an individual who owns a qualified residence fails to use such qualified residence as such individual's principal residence for any period of time1 no deduction shall be allowed for expenses paid or incurred by such individual with respect to renting1 during such period of time1 such qualified residence4 7#e7 ,waiver ,the neighborhood homes credit agency may waive the repayment required under paragraph 7#a77;,a7 in the case of homeowner experiencing a hardship4 7k7 ,report 7#a7 ,in general ,the ,secretary shall annually issue a report1 to be made available to the public1 which contains the information submitted pursuant to subsection 7h77#a77;,e74 7#b7 ,de-identification ,the ,secretary shall ensure that any information made public pursuant to paragraph 7#a7 excludes any information that would allow for the identification of qualified homeowners4 7l7 ,inflation adjustment 7#a7 ,in general ,in the case of a calendar year after #bjbj1 the dollar amounts in this section shall be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjai for calendar year #bjaf in subparagraph 7,a77ii7 thereof4 7#b7 ,rounding 7,a7 ,substantial rehabilitation ,in the case of the dollar amount in subsection 7f77#d71 any increase under the preceding sentence which is not a multiple of #a1jjj shall be rounded to the nearest multiple of #a1jjj4 7,b7 ,in the case of the dollar amount in subsection 7g77#a77;,a71 any increase under the preceding sentence which is not a multiple of #j4ja shall be rounded to the nearest multiple of #j4ja4 7,c7 ,in the case of the dollar amount in subsection 7g77#a77;,b71 any increase under the preceding sentence which is not a multiple of #ajj1jjj shall be rounded to the nearest multiple of #ajj1jjj4 4 7b7 ,current year business credit calculation ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended by redesignating paragraphs 7#f7 through 7#cc7 as paragraphs 7#g7 through 7#cd71 respectively1 and by inserting after paragraph 7#e7 the following new paragraph3 7#f7 the neighborhood homes credit determined under section #db;,a7a71 4 7c7 ,limitation on carryback ,section #ci of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7e7 ,no carryback of neighborhood homes credit before effective date ,no amount of the unused credit attributable to section #db;,a may be taken into account under section #ch7;a77#c7 for any taxable year beginning before the date of the enactment of this subsection4 4 7d7 ,conforming amendments ,subsections 7i77#c77;,c71 7i77#f77;,b77i71 and 7k77#a7 of section #dfi of the ,internal ,revenue ,code of #aihf are each amended by inserting or #db;,a after section #db4 7e7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to section #db the following3 ,sec4 #db;,a4 ,neighborhood homes credit4 4 7f7 ,effective date ,the amendments made by this section shall apply to calendar years beginning after the date of enactment of this ,act4