,,ii #aahth ,,congress #b;d ,session ,s4 #dfic ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #aa 7legislative day1 ,july #aj71 #bjbd,ms4 ,stabenow 7for herself1 ,mr4 ,brown1 ,mr4 ,peters1 and ,mr4 ,padilla7 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 provide an investment credit for converting non-residential buildings to affordable housing4 #a4 ,short title ,this ,act may be cited as the ,revitalizing ,downtowns and ,main ,streets ,act4 #b4 ,investment credit for conversion of non-residential building to affordable housing 7a7 ,in general ,subpart ,e of part ,,iv of subchapter ,a of chapter #a of subtitle ,a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #dh;,e the following new section3 #dh;,f4 ,affordable housing conversion credit 7a7 ,allowance of credit ,for purposes of section #df1 the affordable housing conversion credit for any taxable year is an amount equal to #bj percent of the qualified conversion expenditures of the taxpayer with respect to a qualified affordable housing building placed in service by the taxpayer during the taxable year4 7b7 ,qualified conversion expenditures ,for purposes of this section-- 7#a7 ,in general ,the term qualified conversion expenditures means1 with respect to any qualified affordable housing building1 any amount properly chargeable to capital account-- 7,a7 for property for which depreciation is allowable under section #afh1 and 7,b7 in connection with the qualified conversion of a qualified affordable housing building4 7#b7 ,certain expenditures not included ,the term qualified conversion expenditures does not include-- 7,a7 ,limitation on period of conversion ,except as provided in subsection 7f71 any amount paid or incurred other than during the #b-year period ending on the date on which the taxpayer places the qualified affordable housing building in service4 7,b7 ,cost of acquisition ,the cost of acquiring any building or interest therein4 7#c7 ,special rule for brownfields ,paragraph 7#a77;,a7 shall not apply with respect to any expenditure for clean up of qualifying brownfield property 7as defined in section #eab7;b77#ai774 7#d7 ,coordination with rehabilitation credit ,in the case of any qualified conversion expenditures which are taken into account for purposes of determining the rehabilitation credit under section #dg1 the amount of such expenditures taken into account under this section 7determined without regard to this paragraph7 shall be reduced by #ej percent4 7c7 ,qualified conversion ,for purposes of this section-- 7#a7 ,in general ,the term qualified conversion means the conversion of an eligible commercial building into a qualified affordable housing building if the qualified conversion expenditures of the taxpayer with respect to such conversion exceed the greater of-- 7,a7 an amount equal to #ej percent of the adjusted basis of such building 7determined immediately prior to such conversion71 or 7,b7 #ajj1jjj4 7#b7 ,eligible commercial building ,the term eligible commercial building means any building which1 with respect to any conversion-- 7,a7 was originally placed in service not less than #bj years before the date on which such conversion begins1 and 7,b7 immediately prior to such conversion1 was nonresidential real property 7as defined in section #afh74 7d7 ,qualified affordable housing building ,for purposes of this section-- 7#a7 ,in general ,the term qualified affordable housing building means any residential building if during the #cj-year period beginning on the date on which such building is placed in service by the taxpayer1 not less than #bj percent of the residential units in the building are both rent-restricted and reserved for individuals whose income is #hj percent or less of the area median income4 7#b7 ,rent and income limitation ,for purposes of this subsection1 rules similar to the rules of subsection 7g7 of section #db shall apply to determine whether a unit is rent-restricted1 treatment of units occupied by individuals whose incomes rise above the limit1 and the treatment of units where ,federal rental assistance is reduced as tenant's income increases4 7e7 ,limitation on aggregate credit allowable 7#a7 ,credit may not exceed credit amount allocated to building 7,a7 ,in general ,the amount of the credit determined under this section with respect to any building shall not exceed the qualified conversion credit dollar amount allocated to such building under this subsection by the housing credit agency of the ,state in which such building is located4 7,b7 ,time for making allocation ,except in the case of an allocation which meets the requirements of subparagraph 7,c71 an allocation shall be taken into account under subparagraph 7,a7 only if it is made not later than the close of the calendar year in which the building is placed in service4 7,c7 ,exception where binding commitment ,an allocation meets the requirements of this subparagraph if there is a binding commitment 7not later than the close of the calendar year in which the building is placed in service7 by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a later taxable year4 7#b7 ,state limitation 7,a7 ,in general ,the aggregate qualified conversion credit dollar amount which a housing credit agency of any ,state may allocate is the sum of-- 7i7 the amount which bears the same ratio to the national qualified conversion credit limitation as-- 7,i7 the population of such ,state1 bears to 7,,ii7 the population of all ,states1 plus 7ii7 the sum of any amounts determined under subparagraph 7,c74 7,b7 ,national qualified conversion credit limitation ,the national qualified conversion credit limitation is #ab1jjj1jjj1jjj4 7,c7 ,additional amounts provided for certain buildings in economically distressed areas 7i7 ,in general ,for purposes of subparagraph 7,a77ii71 in any case in which-- 7,i7 the housing credit agency of a ,state allocates an amount to a building which is located in an economically distressed area1 and 7,,ii7 the ,secretary subsequently designates such amount for purposes of this paragraph1 the amount determined under this paragraph with respect to such building shall be the amount originally allocated by the housing credit agency of the ,state under clause 7i74 7ii7 ,limitation ,the aggregate amount which the ,secretary may designate under clause 7i77,,ii7 shall not exceed #c1jjj1jjj1jjj4 7iii7 ,manner of designation ,not later than #abj days after the date of the enactment of this section1 the ,secretary shall establish a program for determining the designation of amounts that may be designated under this subparagraph4 7,d7 ,reallocation of certain amounts 7i7 ,in general ,notwithstanding subparagraph 7,a7-- 7,i7 no amount may be allocated under paragraph 7#a7 by a housing credit agency of an undersubscribed ,state after ,december #ca1 #bjbg1 and 7,,ii7 the dollar amount determined under subparagraph 7,a7 with respect to any oversubscribed ,state after such date shall be increased by such ,state's share of the reallocation amount4 7ii7 ,state share ,for purposes of clause 7i71 an oversubscribed ,state's share of the reallocation amount is the amount which bears the same ratio to the reallocation amount as-- 7,i7 the population of such ,state1 bears to 7,,ii7 the population of all oversubscribed ,states4 7iii7 ,definitions ,for purposes of this subparagraph-- 7,i7 ,undersubscribed ,state ,the term undersubscribed ,state means any ,state that is not an oversubscribed ,state4 7,,ii7 ,oversubscribed ,state ,the term oversubscribed ,state means any ,state the housing credit agency of which has allocated all of the qualified conversion credit dollar amount which may be allocated by it before the date described in clause 7i77,i74 7,,iii7 ,reallocation amount ,the term reallocation amount means the sum of the amounts described in subparagraph 7,a7 which have not been allocated by undersubscribed ,states before the date described in clause 7i77,i74 7#c7 ,manner of allocation 7,a7 ,plan for allocation 7i7 ,in general ,notwithstanding any other provision of this section1 the qualified conversion credit dollar amount with respect to any building shall be zero unless such amount was allocated pursuant to a conversion credit allocation plan of the housing credit agency which is approved by the governmental unit 7in accordance with rules similar to the rules of section #adg7;f77#b7 7other than subparagraph 7,b77ii7 thereof77 of which such agency is a part4 7ii7 ,conversion credit allocation plan ,for purposes of this subparagraph1 the term conversion credit allocation plan means a plan-- 7,i7 which sets selection criteria for allocations1 taking into account-- 7aa7 whether the credit is needed to assure the financial feasibility of the conversion1 7bb7 the extent to which the conversion results in the creation of affordable housing1 7cc7 the extent to which the conversion results in the creation of housing near transportation1 employment1 and commercial opportunities1 7dd7 the extent to which the conversion will support small businesses and economic revitalization in the surrounding area1 7ee7 the degree of local government support for the conversion1 and 7ff7 the readiness of the building for a qualified conversion1 and 7,,ii7 which provides a procedure that the agency 7or an agent or other private contractor of such agency7 will follow in monitoring for noncompliance with the requirements of subsection 7d7 and in notifying the ,internal ,revenue ,service of such noncompliance4 7,b7 ,binding allocation agreements2 reporting ,in making allocations of qualified conversion credit dollar amounts1 each housing credit agency shall-- 7i7 enter into binding agreements with taxpayers for the allocation of qualified conversion credit dollar amounts1 which agreements shall specify the amount of qualified conversion credit dollar amount allocated to the building and the terms for any modifications or withdrawal of such allocation1 and 7ii7 report to the ,secretary1 at such time and in such manner as the ,secretary may require1 the amount of allocations made with respect to any building4 7,c7 ,state extended use requirements permitted past #cj years ,for purposes of this paragraph1 a housing credit agency's plan shall not fail to be treated as a conversion credit allocation plan merely because it includes1 and nothing in this section shall be construed to limit a binding allocation agreement from including1 affordability or rent restriction requirements with respect to the building that apply for a longer period than the #cj-year period described in subsections 7d7 and 7g77#a77;,b74 7#d7 ,definitions and other rules 7,a7 ,housing credit agency ,the term housing credit agency means1 with respect to any ,state1 the housing credit agency authorized under section #db7;h77#h7 or such other agency as authorized by the ,state for purposes of this section4 7,b7 ,economically distressed area ,the term economically distressed area means any area which-- 7i7 which has been designated as a qualified census tract under section #db7;d77#e77;,b77ii7 or as a difficult development area under section #db7;d77#e77;,b77iii71 or 7ii7 which meets the requirement of section #cja7;a77#c7 of the ,public ,works and ,economic ,development ,act of #aife4 7,c7 ,state ,the term ,state includes a possession of the ,united ,states4 7,d7 ,other rules ,rules similar to the rules of subparagraphs 7,a7 and 7,b7 of section #db7;h77#g7 shall apply for purposes of this section4 7f7 ,progress expenditures ,if the ,secretary determines1 on the basis of architectural plans and specifications that a qualified conversion is reasonably expected to exceed #b years1 rules similar to the rules of section #dg7;d7 shall apply with respect to such conversion for purposes of this section4 7g7 ,special rules for certain areas 7#a7 ,qualified census tracts and difficult development areas ,in the case of a qualified affordable housing building-- 7,a7 which is located in any area which is designated as a qualified census tract under section #db7;d77#e77;,b77ii7 or as a difficult development area under section #db7;d77#e77;,b77iii771 and 7,b7 with respect to which during #cj-year period beginning on the date on which such building is placed in service by the taxpayer1 not less than #bj percent of the residential units in the building are both rent-restricted and reserved for individuals whose income is #fj percent or less of the area median income1 subsection 7a7 shall be applied by substituting #cj percent for #bj percent4 7#b7 ,historic preservation in rural areas 7,a7 ,in general ,in the case of a qualified affordable housing building which is in a rural area and is part of an historic preservation project1 the taxpayer may elect to substitute #ce percent for #bj percent under subsection 7a7 with respect to such portion of the aggregate qualified conversion expenditures taken into account under such subsection as does not exceed #b1jjj1jjj4 7,b7 ,definitions ,for purposes of this paragraph-- 7i7 ,rural area ,the term rural area shall have the meaning given such term under section #acic7;a77#b74 7ii7 ,historic preservation project ,the term historic preservation project means a qualified conversion which involves the certified rehabilitation of a certified historic structure4 ,whether conversion of a certified historic structure involves certified rehabilitation shall be determined under rules similar to the rules of section #dg7;c77#b77;,c74 7h7 ,regulations ,the ,secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including regulations or other guidance-- 7#a7 providing for the recapture of the credit determined under subsection 7a7 if the qualified affordable housing building ceases to be a qualified affordable housing building during the #cj-year period beginning on the date that such building is placed in service by the taxpayer1 7#b7 detailing any certifications required from the taxpayer or any housing credit agency of a ,state1 7#c7 with respect to the application of subsection 7b77#d71 7#d7 with respect to information reporting on allocations of qualified conversion credit dollar amounts1 7#e7 providing rules for making a determination as to whether an area is described in subsection 7e77#d77;,b71 and 7#f7 which encourages housing credit agencies to allocate1 to the extent practicable1 qualified conversion credit dollar amounts to non-metropolitan counties within the ,state in proportion to the non-metropolitan population of the ,state1 but only to the extent it is demonstrated within such non-metropolitan counties that there are sufficient qualified conversion expenditures to warrant such allocations4 4 7b7 ,transferability of credit ,section #fdah7;f77#a77;,a7 of such ,code is amended by adding at the end the following new clause3 7xii7 ,the affordable housing conversion credit determined under section #dh;,f4 4 7c7 ,conforming amendments 7#a7 ,section #df of such ,code is amended in paragraph 7#f7 by striking and at the end1 in paragraph 7#g7 by striking the period at the end and inserting 1 and1 and by adding at the end the following new paragraph3 7#h7 the affordable housing conversion credit4 4 7#b7 ,section #di7;a77#a77;,c7 of such ,code is amended by striking and at the end of clause 7vii71 by striking the period at the end of clause 7viii71 and by adding at the end the follow new clause3 7ix7 the basis of any property which is being converted as part of a qualified conversion under section #dh;,f4 4 7#c7 ,section #ej7;a77#b77;,e7 of such ,code is amended by striking or #dh;,e7e7 and inserting #dh;,e7e71 or #dh;,f7f74 7#d7 ,the table of sections for subpart ,e of part ,,iv of subchapter ,a of chapter #a of subtitle ,a of such ,code is amended by adding at the end the following new item3 ,sec4 #dh;,f4 ,affordable housing conversion credit4 4 7d7 ,effective date ,the amendments made by this section shall apply to qualified affordable housing buildings 7as defined in section #dh;,f of the ,internal ,revenue ,code of #aihf1 as added by this section7 placed in service after the date of the enactment of this ,act4