Overview
Title
To amend the Internal Revenue Code of 1986 to provide a credit for working families housing development, and for other purposes.
ELI5 AI
The bill helps people build homes for workers like teachers and firefighters by giving money support and tax breaks, so they have nice places to live. It also makes sure these homes use clean energy and live in areas with good transportation.
Summary AI
The bill, H.R. 9380, known as the "Working Families Housing Tax Credit Act," aims to amend the Internal Revenue Code to provide tax credits for developing housing for working families in the United States. It introduces a new section, 42A, which details the criteria and calculations for obtaining these credits, targeting affordable housing for teachers, police officers, and other essential workers. Additionally, it includes provisions for grants and loans to support infrastructure projects linked to housing developments in rural and exurban areas, emphasizing clean energy. The bill sets a comprehensive framework to encourage the construction and rehabilitation of quality housing for workers and their families, with an implementation date for buildings placed in service after December 31, 2024.
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AnalysisAI
General Summary of the Bill
The proposed H.R. 9380 bill seeks to amend the Internal Revenue Code of 1986 by implementing a Working Families Housing Tax Credit. This legislation aims to incentivize the development of affordable housing for working families, including essential workers like teachers, firefighters, and veterans. It provides tax credits to housing projects that meet certain criteria related to rent restrictions and income levels of the tenants. Additionally, the bill allows grants and low-interest loans to be provided to support infrastructure projects in rural and exurban areas to facilitate these housing developments.
Summary of Significant Issues
A primary concern with this bill lies in the complexity of its language and financial formulas, which could make it difficult for everyday citizens and even some legal professionals to comprehend and apply. This complexity may result in unintended barriers for small developers and housing agencies attempting to utilize the tax credit. Furthermore, broad discretion is given to the Secretary in determining certain project criteria, which could lead to favoritism or inconsistent implementation.
Housing credit agencies are also granted significant latitude in allocating these credits, raising potential issues of favoritism or inefficient allocation of resources without strict oversight. Additionally, the plan prioritizes certain projects, such as those near transit hubs, potentially marginalizing other viable projects that may not fit these criteria.
The bill also includes a provision allowing taxpayers to exempt buildings from the project requirements after a certain period, which could result in unintended tax benefits or maneuvers. The authorization to allocate $100 million for infrastructure projects is noteworthy, but the legislation lacks clear measures on how these funds will be effectively monitored or audited.
Impact on the Public
The bill could have a broad positive impact by encouraging the development of affordable housing, which is often out of reach for essential workers. This initiative aligns with the public interest by potentially increasing housing availability for low- to moderate-income families. However, the complexity of the bill's language and execution might hinder its comprehensive utilization.
The general public might face challenges understanding the intricacies of qualifying for these credits, and smaller developers might encounter difficulties in meeting compliance requirements due to the bill's detailed and technical structure.
Impact on Specific Stakeholders
For stakeholders such as housing developers and local governments, this bill presents opportunities to access tax credits and financial resources to support the creation of affordable housing. Developers who successfully navigate the application process may benefit from reduced tax costs, which could incentivize further development.
On the other hand, small-scale developers might find the legislative requirements burdensome, potentially leaving this opportunity for larger entities more versed in navigating complex regulations. Additionally, rural and exurban areas stand to gain significantly from infrastructure improvement funds, yet without clear regulation guidance, disparities in project approval and funding distribution could arise.
In conclusion, while the Working Families Housing Tax Credit Act shows promise in addressing housing affordability, it also brings with it a range of implementation challenges and uncertainties that need careful consideration and monitoring to ensure fair and efficient application.
Financial Assessment
The Working Families Housing Tax Credit Act, detailed in the bill H.R. 9380, presents various financial mechanisms designed to encourage the development of affordable housing for working families. This commentary will explore how these financial allocations and references are structured within the bill and their implications in the context of identified issues.
Financial Allocations and Credits
The bill introduces the working families housing credit under a new section, 42A, of the Internal Revenue Code. This section outlines a tax credit mechanism intended to stimulate the construction and rehabilitation of housing for essential workers such as teachers, firefighters, and police officers. The credit determination involves several complex calculations that factor in the "qualified basis" of each building, influenced by the building's eligible expenditures and the overall housing need. Such complexity may present challenges, as noted in the issues, potentially requiring simplification for broader understanding and application.
State Housing Credit Ceiling
The bill defines a State housing credit ceiling, which includes a formula calculating a base amount for each state, adding $1.00 per state resident or $1,500,000, whichever is greater, alongside any unused credits from previous years. This allocation allows housing credit agencies significant discretion in allocation decisions. This raises the potential for favoritism or inconsistency in applications, as insufficient oversight could lead to suboptimal outcomes, a point highlighted in the issues list.
Loans and Grants for Infrastructure
Additionally, the legislation authorizes the appropriation of $100,000,000 for infrastructure projects that support the working families housing initiatives, specifically targeting regions such as rural and exurban areas. However, the bill lacks explicit guidelines on how the appropriation of this substantial amount will be supervised or audited. This absence of detailed monitoring could result in inefficiencies or misuse, reflecting one of the issues identified regarding the need for proper oversight of financial resources.
Issues with Criteria and Prioritization
Under Section 3, housing credit agencies are tasked with evaluating project feasibility and need for state-allocated housing credits. They are instructed to prioritize projects located near transit hubs or that address specific income brackets. While these criteria aim to direct resources to high-need projects, they may neglect other equally essential types of developments, potentially leading to fairness concerns. This observation points to an imbalance in how funds and credit allocation priorities are distributed, thereby necessitating careful legislative scrutiny and adjustment.
Clean Energy Projects
In connection with infrastructure projects, the bill emphasizes clean energy prioritization for electricity projects. However, it lacks clear definitions or criteria for what constitutes "clean energy projects," which could result in interpretive confusion or inconsistent application across regions. This vagueness invites potential issues in operational execution, warranting more precise language or examples to ensure aligned implementation across different jurisdictions.
Overall, while the bill intends to financially leverage affordable housing developments for working families, its complex financial structures and allocation strategies highlight specific issues that could impede the equitable and efficient distribution of intended benefits. The bill would benefit from additional clarity and oversight to mitigate these potential concerns.
Issues
The 'Working families housing tax credit' section (Section 3) and 'Loans and grants for infrastructure projects' section (Section 4) provide broad discretion to the Secretary, which could lead to favoritism or inconsistent application without strict oversight.
The complex language and financial formulas throughout Section 3 make the bill potentially difficult for laypersons and even some legal professionals to understand and apply, potentially requiring simplification or additional explanation.
In Section 3, the housing credit agencies are given significant latitude in determining allocations and feasibility, which could lead to favoritism or inefficient allocation without strict oversight.
The criteria around the allocation plan in Section 3 prioritize some project types and locations over others, such as projects near transit hubs or targeting specific income brackets, potentially marginalizing other beneficial types of projects and causing issues of fairness.
The provisions for 'qualified working families housing project' and 'rent-restricted units' in Section 3 have complex calculations and conditions that might pose barriers to understanding and compliance, especially for small housing developers.
Section 4 includes a vague phrase 'such other projects as the Secretary determines appropriate,' which could lead to inconsistent application or favoritism if not clearly defined.
The provision in Section 3 allowing taxpayers to elect to treat buildings as not part of a project after the credit period ends might lead to unintended tax benefits or other financial maneuvers.
The bill provides an authorization to appropriate $100,000,000 for infrastructure projects in Section 4 but lacks detail on how these funds will be monitored or audited to ensure effective use.
Section 3 allows for the waiver of recertification of tenant income, which could lead to abuse if buildings are claimed to be entirely occupied by eligible tenants without sufficient verification.
The lack of specificity around the criteria or definitions for 'clean energy projects' in Section 4 could impact how prioritization is implemented, potentially leading to confusion or inconsistent application.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The title of this law is the "Working Families Housing Tax Credit Act."
2. Sense of Congress relating to the working families housing tax credit Read Opens in new tab
Summary AI
Congress believes that the working families housing tax credit is an essential tool to help create affordable housing for various workers, including teachers and veterans. They propose that additional laws should be passed to strengthen and expand this tax credit.
3. Working families housing tax credit Read Opens in new tab
Summary AI
The text introduces a Working Families Housing Credit within the IRS Code, aiming to provide tax credits for projects that offer affordable rental housing to working families. It outlines how these tax credits are calculated, eligibility requirements for housing projects and buildings, and various rules and limitations for receiving the credit, with an emphasis on serving families with limited incomes and ensuring the development of housing in areas with high costs or housing shortages. The amendments apply to buildings placed in service after December 31, 2024.
Money References
- — “(1) DETERMINATION OF APPLICABLE PERCENTAGE.—For purposes of this section— “(A) IN GENERAL.—The term ‘applicable percentage’ means, with respect to any building, the appropriate percentage prescribed by the Secretary for the earlier of— “(i) the month in which such building is placed in service, or “(ii) at the election of the taxpayer, the month in which the taxpayer and the housing credit agency enter into an agreement with respect to such building (which is binding on such agency, the taxpayer, and all successors in interest) as to the housing credit dollar amount to be allocated to such building.
- “(II) The requirement of this subclause is met if the qualified basis attributable to such amount, when divided by the number of working families units in the building, is equal to or greater than the dollar amount in effect under section 42(e)(3)(A)(ii)(II) for the calendar year in which such expenditures are treated as placed in service under paragraph (4).
- — “(i) IN GENERAL.—In the case of a building described in clause (ii)— “(I) subsection (d)(2)(B)(iv) shall not apply, and “(II) the credit period for such building shall not begin before the taxable year which would be the 1st taxable year of the credit period for rehabilitation expenditures with respect to the building under the modifications described in clause (ii)(II). “(ii) BUILDING DESCRIBED.—A building is described in this clause if— “(I) a waiver is granted under subsection (d)(4) with respect to the acquisition of the building, and “(II) a credit would be allowed for rehabilitation expenditures with respect to such building if subsection (e)(3)(A)(ii)(I) did not apply and if the dollar amount in effect under subsection (e)(3)(A)(ii)(II) were two-thirds of such amount.
- — “(A) IN GENERAL.—The amount of the credit determined under this section for any taxable year with respect to any building shall not exceed the housing credit dollar amount allocated to such building under this subsection.
- “(C) EXCEPTION WHERE BINDING COMMITMENT.—An allocation meets the requirements of this subparagraph if there is a binding commitment (not later than the close of the calendar year in which the building is placed in service) by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a specified later taxable year.
- “(ii) LIMITATION.—The limitation under this clause is the amount of credit allowable under this section (without regard to this subsection) for a taxable year with respect to an increase in the qualified basis of the building equal to the excess of— “(I) the qualified basis of such building as of the close of the 1st taxable year to which such allocation will apply, over “(II) the qualified basis of such building as of the close of the 1st taxable year to which the most recent prior housing credit allocation with respect to such building applied. “(iii) HOUSING CREDIT DOLLAR AMOUNT REDUCED BY FULL ALLOCATION.—Notwithstanding clause (i), the full amount of the allocation shall be taken into account under paragraph (2).
- “(2) ALLOCATED CREDIT AMOUNT TO APPLY TO ALL TAXABLE YEARS ENDING DURING OR AFTER CREDIT ALLOCATION YEAR.—Any housing credit dollar amount allocated to any building for any calendar year— “(A) shall apply to such building for all taxable years in the credit period ending during or after such calendar year, and “(B) shall reduce the aggregate housing credit dollar amount of the allocating agency only for such calendar year.
- “(3) HOUSING CREDIT DOLLAR AMOUNT FOR AGENCIES.
- — “(A) IN GENERAL.—The aggregate housing credit dollar amount which a housing credit agency may allocate for any calendar year is the portion of the State housing credit ceiling allocated under this paragraph for such calendar year to such agency.
- “(C) STATE HOUSING CREDIT CEILING.—The State housing credit ceiling applicable to any State for any calendar year shall be an amount equal to the sum of— “(i) the unused State housing credit ceiling (if any) of such State for the preceding calendar year, “(ii) the greater of— “(I) $1.00 multiplied by the State population, or “(II) $1,500,000, plus “(iii) the amount of State housing credit ceiling returned in the calendar year.
- For purposes of clause (i), the unused State housing credit ceiling for any calendar year is the excess (if any) of the sum of the amounts described in clauses (ii) (reduced by the aggregate amounts described in paragraph (10)(A)(i) with respect to all elections made for such calendar year) and (iii) over the aggregate housing credit dollar amount allocated for such year.
- For purposes of clause (iii), the amount of State housing credit ceiling returned in the calendar year equals the housing credit dollar amount previously allocated within the State to any project which fails to meet the 10 percent test under paragraph (1)(E)(ii) on a date after the close of the calendar year in which the allocation was made or which does not become a qualified working families housing project within the period required by this section or the terms of the allocation or to any project with respect to which an allocation is cancelled by mutual consent of the housing credit agency and the allocation recipient. “(D) STATE MAY PROVIDE FOR DIFFERENT ALLOCATION.—Rules similar to the rules of section 146(e) (other than paragraph (2)(B) thereof)
- — “(i) IN GENERAL.—In the case of a calendar year after 2024, the $1,500,000 and $1.00 amounts in subparagraph (C) shall each be 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 by substituting ‘calendar year 2023’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof. “(ii) ROUNDING.
- — “(I) In the case of the $1,140,000 amount, any increase under clause (i) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.
- “(II) In the case of the $1.00 amount, any increase under clause (i) which is not a multiple of 5 cents shall be rounded to the next lowest multiple of 5 cents.
- (C) ALLOCATION OF CREDIT MAY NOT EXCEED AMOUNT NECESSARY TO SUPPORT COMMITMENT.—The housing credit dollar amount allocated to any building may not exceed the amount necessary to support the applicable fraction specified in the extended working families housing commitment for such building, including any increase in such fraction pursuant to the application of subsection (f)(3) if such increase is reflected in an amended working families housing commitment.
- “(6) SPECIAL RULES.— “(A) BUILDING MUST BE LOCATED WITHIN JURISDICTION OF CREDIT AGENCY.—A housing credit agency may allocate its aggregate housing credit dollar amount only to buildings located in the jurisdiction of the governmental unit of which such agency is a part.
- “(B) AGENCY ALLOCATIONS IN EXCESS OF LIMIT.—If the aggregate housing credit dollar amounts allocated by a housing credit agency for any calendar year exceed the portion of the State housing credit ceiling allocated to such agency for such calendar year, the housing credit dollar amounts so allocated shall be reduced (to the extent of such excess) for buildings in the reverse of the order in which the allocations of such amounts were made.
- “(C) CREDIT REDUCED IF ALLOCATED CREDIT DOLLAR AMOUNT IS LESS THAN CREDIT WHICH WOULD BE ALLOWABLE WITHOUT REGARD TO PLACED IN SERVICE CONVENTION, ETC.
- “(ii) DETERMINATION OF PERCENTAGE.—For purposes of clause (i), the clause (ii) percentage with respect to any building is the percentage which— “(I) the housing credit dollar amount allocated to such building, bears to “(II) the credit amount determined in accordance with clause (iii). “
- credit amount determined in accordance with this clause is the amount of the credit which would (but for this subparagraph) be determined under this section with respect to the building if— “(I) this section were applied without regard to paragraphs (2)(A) and (3)(B) of subsection (f), and “(II) subsection (f)(3)(A) were applied without regard to ‘the percentage equal to 2⁄3 of’. “(D) HOUSING CREDIT AGENCY TO SPECIFY APPLICABLE PERCENTAGE AND MAXIMUM QUALIFIED BASIS.—In allocating a housing credit dollar amount to any building, the housing credit agency shall specify the applicable percentage and the maximum qualified basis which may be taken into account under this section with respect to such building.
- — “(A) IN GENERAL.—Notwithstanding any other provision of this section, the housing credit dollar amount with respect to any building shall be zero unless— “(i) such amount was allocated pursuant to a qualified allocation plan of the housing credit agency which is approved by the governmental unit (in accordance with rules similar to the rules of section 42(m)(1)) of which such agency is a part, “(ii) a comprehensive market study of the housing needs of working family individuals in the area to be served by the project is conducted before the credit allocation is made and at the developer's expense by a disinterested party who is approved by such agency, and “(iii) a written explanation is available to the general public for any allocation of a housing credit dollar amount which is not made in accordance with established priorities and selection criteria of the housing credit agency.
- , the term ‘qualified allocation plan’ means any plan— “(i) which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions, “(ii) which also gives preference in allocating housing credit dollar amounts among selected projects to— “(I) projects obligated to serve qualified tenants for the longest periods, “(II) projects in areas with insufficient supply of housing affordable to median income households, “(III) projects which target housing to tenants at a range of incomes between 60 and 100 percent of area median gross income, and “(IV) projects located near transit hubs, and “(iii) which provides a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring for noncompliance with the provisions of this section and in notifying the Internal Revenue Service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits. “(C) CERTAIN SELECTION CRITERIA MUST BE USED.—The
- “(D) CERTAIN SELECTION CRITERIA PROHIBITED.—The selection criteria set forth in a qualified allocation plan shall not include a requirement of local approval or local contributions, either as a threshold qualification requirement or as part of a point system to be considered for allocations of housing credit dollar amount.
- — “(A) IN GENERAL.—The housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified working families housing project throughout the credit period.
- “(B) AGENCY EVALUATION.—In making the determination under subparagraph (A), the housing credit agency shall consider— “(i) the sources and uses of funds and the total financing planned for the project, “(ii) any proceeds or receipts expected to be generated by reason of tax benefits, “(iii) the percentage of the housing credit dollar amount used for project costs other than the cost of intermediaries, and “(iv) the reasonableness of the developmental and operational costs of the project. Clause (iii) shall not be applied so as to impede the development of projects in hard-to-develop areas.
- determination under subparagraph (A) shall be made as of each of the following times: “(I) The application for the housing credit dollar amount. “(II) The allocation of the housing credit dollar amount. “
42A. Working families housing credit Read Opens in new tab
Summary AI
The Working Families Housing Credit provides tax incentives for building projects that create affordable housing for working families, ensuring that certain percentages of units are rent-restricted and occupied by families with specific income levels. It outlines the qualifications for buildings and projects to receive the credit, sets limitations on how much credit can be allocated by states, and establishes compliance requirements to maintain the credit over a 15-year period.
Money References
- — (1) DETERMINATION OF APPLICABLE PERCENTAGE.—For purposes of this section— (A) IN GENERAL.—The term “applicable percentage” means, with respect to any building, the appropriate percentage prescribed by the Secretary for the earlier of— (i) the month in which such building is placed in service, or (ii) at the election of the taxpayer, the month in which the taxpayer and the housing credit agency enter into an agreement with respect to such building (which is binding on such agency, the taxpayer, and all successors in interest) as to the housing credit dollar amount to be allocated to such building.
- (II) The requirement of this subclause is met if the qualified basis attributable to such amount, when divided by the number of working families units in the building, is equal to or greater than the dollar amount in effect under section 42(e)(3)(A)(ii)(II) for the calendar year in which such expenditures are treated as placed in service under paragraph (4). (B) DATE OF DETERMINATION.—The determination under subparagraph (A) shall be made as of the close of the 1st taxable year in the credit period with respect to such expenditures.
- (ii) BUILDING DESCRIBED.—A building is described in this clause if— (I) a waiver is granted under subsection (d)(4) with respect to the acquisition of the building, and (II) a credit would be allowed for rehabilitation expenditures with respect to such building if subsection (e)(3)(A)(ii)(I) did not apply and if the dollar amount in effect under subsection (e)(3)(A)(ii)(II) were two-thirds of such amount. (g) Qualified working families housing project.—For purposes of this section— (1) QUALIFIED WORKING FAMILIES HOUSING PROJECT.— (A) IN GENERAL.—The term “qualified working families housing project” means any project for residential rental property if such project meets the low-income requirements of subparagraph (B) and the working families requirements of subparagraph (C).
- — (A) IN GENERAL.—The amount of the credit determined under this section for any taxable year with respect to any building shall not exceed the housing credit dollar amount allocated to such building under this subsection.
- (B) TIME FOR MAKING ALLOCATION.—Except in the case of an allocation which meets the requirements of subparagraph (C), (D), (E), or (F), an allocation shall be taken into account under subparagraph (A) only if it is made not later than the close of the calendar year in which the building is placed in service. (C) EXCEPTION WHERE BINDING COMMITMENT.—An allocation meets the requirements of this subparagraph if there is a binding commitment (not later than the close of the calendar year in which the building is placed in service) by the housing credit agency to allocate a specified housing credit dollar amount to such building beginning in a specified later taxable year.
- — (i) IN GENERAL.—An allocation meets the requirements of this subparagraph if such allocation is made not later than the close of the calendar year in which ends the taxable year to which it will 1st apply but only to the extent the amount of such allocation does not exceed the limitation under clause (ii). (ii) LIMITATION.—The limitation under this clause is the amount of credit allowable under this section (without regard to this subsection) for a taxable year with respect to an increase in the qualified basis of the building equal to the excess of— (I) the qualified basis of such building as of the close of the 1st taxable year to which such allocation will apply, over (II) the qualified basis of such building as of the close of the 1st taxable year to which the most recent prior housing credit allocation with respect to such building applied. (iii) HOUSING CREDIT DOLLAR AMOUNT REDUCED BY FULL ALLOCATION.—Notwithstanding clause (i), the full amount of the allocation shall be taken into account under paragraph (2). (E) EXCEPTION WHERE 10 PERCENT OF COST INCURRED.
- (2) ALLOCATED CREDIT AMOUNT TO APPLY TO ALL TAXABLE YEARS ENDING DURING OR AFTER CREDIT ALLOCATION YEAR.—Any housing credit dollar amount allocated to any building for any calendar year— (A) shall apply to such building for all taxable years in the credit period ending during or after such calendar year, and (B) shall reduce the aggregate housing credit dollar amount of the allocating agency only for such calendar year. (3) HOUSING CREDIT DOLLAR AMOUNT FOR AGENCIES.— (A) IN GENERAL.—The aggregate housing credit dollar amount which a housing credit agency may allocate for any calendar year is the portion of the State housing credit ceiling allocated under this paragraph for such calendar year to such agency.
- (C) STATE HOUSING CREDIT CEILING.—The State housing credit ceiling applicable to any State for any calendar year shall be an amount equal to the sum of— (i) the unused State housing credit ceiling (if any) of such State for the preceding calendar year, (ii) the greater of— (I) $1.00 multiplied by the State population, or (II) $1,500,000, plus (iii) the amount of State housing credit ceiling returned in the calendar year.
- For purposes of clause (i), the unused State housing credit ceiling for any calendar year is the excess (if any) of the sum of the amounts described in clauses (ii) (reduced by the aggregate amounts described in paragraph (10)(A)(i) with respect to all elections made for such calendar year) and (iii) over the aggregate housing credit dollar amount allocated for such year.
- For purposes of clause (iii), the amount of State housing credit ceiling returned in the calendar year equals the housing credit dollar amount previously allocated within the State to any project which fails to meet the 10 percent test under paragraph (1)(E)(ii) on a date after the close of the calendar year in which the allocation was made or which does not become a qualified working families housing project within the period required by this section or the terms of the allocation or to any project with respect to which an allocation is cancelled by mutual consent of the housing credit agency and the allocation recipient. (D) STATE MAY PROVIDE FOR DIFFERENT ALLOCATION.—Rules similar to the rules of section 146(e) (other than paragraph (2)(B) thereof)
- — (i) IN GENERAL.—In the case of a calendar year after 2024, the $1,500,000 and $1.00 amounts in subparagraph (C) shall each be 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 by substituting “calendar year 2023” for “calendar year 2016” in subparagraph (A)(ii) thereof. (ii) ROUNDING.
- — (I) In the case of the $1,140,000 amount, any increase under clause (i) which is not a multiple of $5,000 shall be rounded to the next lowest multiple of $5,000.
- (II) In the case of the $1.00 amount, any increase under clause (i) which is not a multiple of 5 cents shall be rounded to the next lowest multiple of 5 cents.
- (B) EXTENDED WORKING FAMILIES HOUSING COMMITMENT.—For purposes of this paragraph, the term “extended working families housing commitment” means any agreement between the taxpayer and the housing credit agency— (i) which requires that the applicable fraction (as defined in subsection (c)(1)) for the building for each taxable year in the extended use period will not be less than the applicable fraction specified in such agreement and which prohibits the actions described in subclauses (I) and (II) of subparagraph (E)(ii), (ii) which allows individuals who meet the income limitation applicable to the building under subsection (g) (whether prospective, present, or former occupants of the building) the right to enforce in any State court the requirement and prohibitions of clause (i), (iii) which prohibits the disposition to any person of any portion of the building to which such agreement applies unless all of the building to which such agreement applies is disposed of to such person, (iv) which prohibits the refusal to lease to a holder of a voucher or certificate of eligibility under section 8 of the United States Housing Act of 1937 because of the status of the prospective tenant as such a holder, (v) which is binding on all successors of the taxpayer, and (vi) which, with respect to the property, is recorded pursuant to State law as a restrictive covenant. (C) ALLOCATION OF CREDIT MAY NOT EXCEED AMOUNT NECESSARY TO SUPPORT COMMITMENT.—The housing credit dollar amount allocated to any building may not exceed the amount necessary to support the applicable fraction specified in the extended working families housing commitment for such building, including any increase in such fraction pursuant to the application of subsection (f)(3) if such increase is reflected in an amended working families housing commitment.
- (6) SPECIAL RULES.— (A) BUILDING MUST BE LOCATED WITHIN JURISDICTION OF CREDIT AGENCY.—A housing credit agency may allocate its aggregate housing credit dollar amount only to buildings located in the jurisdiction of the governmental unit of which such agency is a part.
- (B) AGENCY ALLOCATIONS IN EXCESS OF LIMIT.—If the aggregate housing credit dollar amounts allocated by a housing credit agency for any calendar year exceed the portion of the State housing credit ceiling allocated to such agency for such calendar year
- , the housing credit dollar amounts so allocated shall be reduced (to the extent of such excess) for buildings in the reverse of the order in which the allocations of such amounts were made.
- (C) CREDIT REDUCED IF ALLOCATED CREDIT DOLLAR AMOUNT IS LESS THAN CREDIT WHICH WOULD BE ALLOWABLE WITHOUT REGARD TO PLACED IN SERVICE CONVENTION, ETC.
- (ii) DETERMINATION OF PERCENTAGE.—For purposes of clause (i), the clause (ii) percentage with respect to any building is the percentage which— (I) the housing credit dollar amount allocated to such building, bears to (II) the credit amount determined in accordance with clause (iii). (iii) DETERMINATION OF CREDIT AMOUNT.—The credit amount determined in accordance with this clause is the amount of the credit which would (but for this subparagraph) be determined under this section with respect to the building if— (I) this section were applied without regard to paragraphs (2)(A) and (3)(B) of subsection (f), and (II) subsection (f)(3)(A) were applied without regard to “the percentage equal to 2⁄3 of”. (D) HOUSING CREDIT AGENCY TO SPECIFY APPLICABLE PERCENTAGE AND MAXIMUM QUALIFIED BASIS.—In allocating a housing credit dollar amount to any building, the housing credit agency shall specify the applicable percentage and the maximum qualified basis which may be taken into account under this section with respect to such building.
- — (A) IN GENERAL.—Notwithstanding any other provision of this section, the housing credit dollar amount with respect to any building shall be zero unless— (i) such amount was allocated pursuant to a qualified allocation plan of the housing credit agency which is approved by the governmental unit (in accordance with rules similar to the rules of section 42(m)(1)) of which such agency is a part, (ii) a comprehensive market study of the housing needs of working family individuals in the area to be served by the project is conducted before the credit allocation is made and at the developer's expense by a disinterested party who is approved by such agency, and (iii) a written explanation is available to the general public for any allocation of a housing credit dollar amount which is not made in accordance with established priorities and selection criteria of the housing credit agency.
- (B) QUALIFIED ALLOCATION PLAN.—For purposes of this paragraph, the term “qualified allocation plan” means any plan— (i) which sets forth selection criteria to be used to determine housing priorities of the housing credit agency which are appropriate to local conditions, (ii) which also gives preference in allocating housing credit dollar amounts among selected projects to— (I) projects obligated to serve qualified tenants for the longest periods, (II) projects in areas with insufficient supply of housing affordable to median income households, (III) projects which target housing to tenants at a range of incomes between 60 and 100 percent of area median gross income, and (IV) projects located near transit hubs, and (iii) which provides a procedure that the agency (or an agent or other private contractor of such agency) will follow in monitoring for noncompliance with the provisions of this section and in notifying the Internal Revenue Service of such noncompliance which such agency becomes aware of and in monitoring for noncompliance with habitability standards through regular site visits. (C) CERTAIN SELECTION CRITERIA MUST BE USED.—The selection criteria set forth in a qualified allocation plan must include— (i) project location, (ii) housing needs characteristics, (iii) project characteristics, including whether the project includes the use of existing housing as part of a community revitalization plan, (iv) sponsor characteristics, (v) tenant populations with special housing needs, (vi) tenant populations of individuals with children, (vii) projects intended for eventual tenant ownership, (viii) the energy efficiency of the project, and (ix) the historic nature of the project. (D) CERTAIN SELECTION CRITERIA PROHIBITED.—The selection criteria set forth in a qualified allocation plan shall not include a requirement of local approval or local contributions, either as a threshold qualification requirement or as part of a point system to be considered for allocations of housing credit dollar amount. (2) CREDIT ALLOCATED TO BUILDING NOT TO EXCEED AMOUNT NECESSARY TO ASSURE PROJECT FEASIBILITY.
- — (A) IN GENERAL.—The housing credit dollar amount allocated to a project shall not exceed the amount the housing credit agency determines is necessary for the financial feasibility of the project and its viability as a qualified working families housing project throughout the credit period.
- (B) AGENCY EVALUATION.—In making the determination under subparagraph (A), the housing credit agency shall consider— (i) the sources and uses of funds and the total financing planned for the project, (ii) any proceeds or receipts expected to be generated by reason of tax benefits, (iii) the percentage of the housing credit dollar amount used for project costs other than the cost of intermediaries, and (iv) the reasonableness of the developmental and operational costs of the project.
- determination under subparagraph (A) shall be made as of each of the following times: (I) The application for the housing credit dollar amount. (II) The allocation of the housing credit dollar amount. (III) The date the building is placed in service. (ii) CERTIFICATION AS TO AMOUNT OF OTHER SUBSIDIES.—Prior to each determination under clause (i), the taxpayer shall certify to the housing credit agency the full extent of all Federal, State, and local subsidies which apply (or which the taxpayer expects to apply) with respect to the building.
4. Loans and grants for infrastructure projects in connection with qualified working families housing projects Read Opens in new tab
Summary AI
The section allows the Secretary to provide grants and low-interest loans to local governments in rural and exurban areas for infrastructure projects that support housing for working families. These projects can include electricity, water, and road improvements, with a focus on clean energy projects, and $100 million is authorized for these efforts.
Money References
- (d) Authorization of appropriations.—There are authorized to be appropriated $100,000,000 to carry out the purposes of this section.