119-hr2410

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2410 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 2410

 To amend the Internal Revenue Code of 1986 to provide an investment 
 credit for converting non-residential buildings to affordable housing.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 March 27, 2025

 Mr. Carey (for himself, Mr. Gomez, Mr. Larson of Connecticut, Mr. 
 Fitzpatrick, Ms. Sewell, Ms. Tenney, Mr. Beyer, Mr. Kustoff, Ms. Chu, 
 Mr. Kelly of Pennsylvania, Mr. Panetta, Mrs. Miller of West Virginia, 
 Mr. Davis of Illinois, Mr. Moore of Utah, Mr. Evans of Pennsylvania, 
Ms. Malliotakis, Mr. Suozzi, Mr. Moran, Mr. Boyle of Pennsylvania, Mr. 
 LaHood, Ms. Sanchez, Mr. Miller of Ohio, Ms. Moore of Wisconsin, Mr. 
 Amodei of Nevada, Mr. Schneider, Mr. Ciscomani, Mr. Horsford, and Ms. 
 DelBene) 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 provide an investment 
 credit for converting non-residential buildings to affordable housing.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Revitalizing Downtowns and Main 
Streets Act''.

SEC. 2. INVESTMENT CREDIT FOR CONVERSION OF NON-RESIDENTIAL BUILDINGS 
 TO AFFORDABLE HOUSING.

    (a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of subtitle A of the Internal Revenue Code of 1986 is amended by 
inserting after 

section 48E the following new section:

``

SEC. 48F. AFFORDABLE HOUSING CONVERSION CREDIT.

 ``

    (a) Allowance of Credit.--For purposes of 

section 46, the 
affordable housing conversion credit for any taxable year is an amount 
equal to 20 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 year.
 ``

    (b) Qualified Conversion Expenditures.--For purposes of this 
section--
 ``

    (1) In general.--The term `qualified conversion 
 expenditures' means, with respect to any qualified affordable 
 housing building, any amount properly chargeable to capital 
 account--
 ``
        (A) for property for which depreciation is 
 allowable under 

section 168, and
 ``
        (B) in connection with the qualified conversion 
 of a qualified affordable housing building.
 ``

    (2) Certain expenditures not included.--The term 
 `qualified conversion expenditures' does not include--
 ``
        (A) Limitation on period of conversion.--Except 
 as provided in subsection

    (f) , any amount paid or 
 incurred other than during the 2-year period ending on 
 the date on which the taxpayer places the qualified 
 affordable housing building in service.
 ``
        (B) Cost of acquisition.--The cost of acquiring 
 any building or interest therein.
 ``

    (3) Special rule for brownfields.--Paragraph

    (1)
        (A) shall 
 not apply with respect to any expenditure for clean up of 
 qualifying brownfield property (as defined in 

section 512

    (b)

    (19) ).
 ``

    (4) 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 47, the amount of such expenditures taken into 
 account under this section (determined without regard to this 
 paragraph) shall be reduced by 50 percent.
 ``
            (c) Qualified Conversion.--For purposes of this section--
 ``

    (1) 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--
 ``
        (A) an amount equal to 50 percent of the adjusted 
 basis of such building (determined immediately prior to 
 such conversion), or
 ``
        (B) $100,000.
 ``

    (2) Eligible commercial building.--The term `eligible 
 commercial building' means any building which, with respect to 
 any conversion--
 ``
        (A) was originally placed in service not less 
 than 20 years before the date on which such conversion 
 begins, and
 ``
        (B) immediately prior to such conversion, was 
 nonresidential real property (as defined in 

section 168).
 ``
            (d) Qualified Affordable Housing Building.--For purposes of this 
section--
 ``

    (1) In general.--The term `qualified affordable housing 
 building' means any residential building if during the 30-year 
 period beginning on the date on which such building is placed 
 in service by the taxpayer, not less than 20 percent of the 
 residential units in the building are both rent-restricted and 
 reserved for individuals whose income is 80 percent or less of 
 the area median income.
 ``

    (2) Rent and income limitation.--For purposes of this 
 subsection, rules similar to the rules of subsection

    (g) of 
 

section 42 shall apply to determine whether a unit is rent-
 restricted, treatment of units occupied by individuals whose 
 incomes rise above the limit, and the treatment of units where 
 Federal rental assistance is reduced as tenant's income 
 increases.
 ``

    (e) Limitation on Aggregate Credit Allowable.--
 ``

    (1) Credit may not exceed credit amount allocated to 
 building.--
 ``
        (A) 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 located.
 ``
        (B) Time for making allocation.--Except in the 
 case of an allocation which meets the requirements of 
 subparagraph
            (C) , 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 later taxable year.
 ``

    (2) State limitation.--
 ``
        (A) In general.--The aggregate qualified 
 conversion credit dollar amount which a housing credit 
 agency of any State may allocate is the sum of--
 ``
            (i) the amount which bears the same ratio 
 to the national qualified conversion credit 
 limitation as--
 ``
            (I) the population of such State, 
 bears to
 ``
            (II) the population of all 
 States, plus
 ``
            (ii) the sum of any amounts determined 
 under subparagraph
            (C) .
 ``
        (B) National qualified conversion credit 
 limitation.--The national qualified conversion credit 
 limitation is $12,000,000,000.
 ``
            (C) Additional amounts provided for certain 
 buildings in economically distressed areas.--
 ``
            (i) In general.--For purposes of 
 subparagraph
        (A)
            (ii) , in any case in which--
 ``
            (I) the housing credit agency of 
 a State allocates an amount to a 
 building which is located in an 
 economically distressed area, and
 ``
            (II) the Secretary subsequently 
 designates such amount for purposes of 
 this paragraph,
 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
            (i) .
 ``
            (ii) Limitation.--The aggregate amount 
 which the Secretary may designate under clause
            (i) 
            (II) shall not exceed $3,000,000,000.
 ``
            (iii) Manner of designation.--Not later 
 than 120 days after the date of the enactment 
 of this section, the Secretary shall establish 
 a program for determining the designation of 
 amounts that may be designated under this 
 subparagraph.
 ``
            (D) Reallocation of certain amounts.--
 ``
            (i) In general.--Notwithstanding 
 subparagraph
        (A) --
 ``
            (I) no amount may be allocated 
 under paragraph

    (1) by a housing credit 
 agency of an undersubscribed State 
 after December 31, 2028, and
 ``
            (II) the dollar amount determined 
 under subparagraph
        (A) with respect to 
 any oversubscribed State after such 
 date shall be increased by such State's 
 share of the reallocation amount.
 ``
            (ii) State share.--For purposes of clause
            (i) , an oversubscribed State's share of the 
 reallocation amount is the amount which bears 
 the same ratio to the reallocation amount as--
 ``
            (I) the population of such State, 
 bears to
 ``
            (II) the population of all 
 oversubscribed States.
 ``
            (iii) === Definitions. ===
-For purposes of this 
 subparagraph--
 ``
            (I) Undersubscribed state.--The 
 term `undersubscribed State' means any 
 State that is not an oversubscribed 
 State.
 ``
            (II) 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
            (i) 
            (I) .
 ``
            (III) Reallocation amount.--The 
 term `reallocation amount' means the 
 sum of the amounts described in 
 subparagraph
        (A) which have not been 
 allocated by undersubscribed States 
 before the date described in clause
            (i) 
            (I) .
 ``

    (3) Manner of allocation.--
 ``
        (A) Plan for allocation.--
 ``
            (i) In general.--Notwithstanding any 
 other provision of this section, 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 (in 
 accordance with rules similar to the rules of 
 

section 147

    (f)

    (2) (other than subparagraph
        (B)
            (ii) thereof)) of which such agency is a 
 part.
 ``
            (ii) Conversion credit allocation plan.--
 For purposes of this subparagraph, the term 
 `conversion credit allocation plan' means a 
 plan--
 ``
            (I) which sets selection criteria 
 for allocations, taking into account--
 ``

    (aa) whether the credit 
 is needed to assure the 
 financial feasibility of the 
 conversion,
 ``

    (bb) the extent to which 
 the conversion results in the 
 creation of affordable housing,
 ``
            (cc) the extent to which 
 the conversion results in the 
 creation of housing near 
 transportation, employment, and 
 commercial opportunities,
 ``
            (dd) the extent to which 
 the conversion will support 
 small businesses and economic 
 revitalization in the 
 surrounding area,
 ``

    (ee) the degree of local 
 government support for the 
 conversion, and
 ``

    (ff) the readiness of the 
 building for a qualified 
 conversion, and
 ``
            (II) 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 requirements of subsection
            (d) and in notifying the Internal Revenue 
 Service of such noncompliance.
 ``
        (B) Binding allocation agreements; reporting.--In 
 making allocations of qualified conversion credit 
 dollar amounts, each housing credit agency shall--
 ``
            (i) enter into binding agreements with 
 taxpayers for the allocation of qualified 
 conversion credit dollar amounts, 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 allocation, 
 and
 ``
            (ii) report to the Secretary, at such 
 time and in such manner as the Secretary may 
 require, the amount of allocations made with 
 respect to any building.
 ``
            (C) State extended use requirements permitted 
 past 30 years.--For purposes of this paragraph, a 
 housing credit agency's plan shall not fail to be 
 treated as a conversion credit allocation plan merely 
 because it includes, and nothing in this section shall 
 be construed to limit a binding allocation agreement 
 from including, affordability or rent restriction 
 requirements with respect to the building that apply 
 for a longer period than the 30-year period described 
 in subsections
            (d) and

    (g)

    (1)
        (B) .
 ``

    (4) Definitions and other rules.--
 ``
        (A) Housing credit agency.--The term `housing 
 credit agency' means, with respect to any State, the 
 housing credit agency authorized under 

section 42

    (h)

    (8) or such other agency as authorized by the State for 
 purposes of this section.
 ``
        (B) Economically distressed area.--The term 
 `economically distressed area' means any area which--
 ``
            (i) has been designated as a qualified 
 census tract under 

section 42
            (d) (5)
        (B)
            (ii) or 
 as a difficult development area under 

section 42
            (d) (5)
        (B)
            (iii) , or
 ``
            (ii) meets the requirement of 

section 301

    (a)

    (3) of the Public Works and Economic 
 Development Act of 1965.
 ``
            (C) State.--The term `State' includes a 
 possession of the United States.
 ``
            (D) Other rules.--Rules similar to the rules of 
 subparagraphs
        (A) and
        (B) of 

section 42

    (h)

    (7) shall 
 apply for purposes of this section.
 ``

    (f) Progress Expenditures.--If the Secretary determines, on the 
basis of architectural plans and specifications that a qualified 
conversion is reasonably expected to exceed 2 years, rules similar to 
the rules of 

section 47
            (d) shall apply with respect to such conversion 
for purposes of this section.
 ``

    (g) Special Rules for Certain Areas.--
 ``

    (1) Qualified census tracts and difficult development 
 areas.--In the case of a qualified affordable housing 
 building--
 ``
        (A) which is located in any area which is 
 designated as a qualified census tract under 

section 42
            (d) (5)
        (B)
            (ii) or as a difficult development area 
 under 

section 42
            (d) (5)
        (B)
            (iii) ), and
 ``
        (B) with respect to which during 30-year period 
 beginning on the date on which such building is placed 
 in service by the taxpayer, not less than 20 percent of 
 the residential units in the building are both rent-
 restricted and reserved for individuals whose income is 
 60 percent or less of the area median income,
 subsection

    (a) shall be applied by substituting `30 percent' 
 for `20 percent'.
 ``

    (2) Historic preservation in rural areas.--
 ``
        (A) In general.--In the case of a qualified 
 affordable housing building which is in a rural area 
 and is part of an historic preservation project, the 
 taxpayer may elect to substitute `35 percent' for `20 
 percent' under subsection

    (a) with respect to such 
 portion of the aggregate qualified conversion 
 expenditures taken into account under such subsection 
 as does not exceed $2,000,000.
 ``
        (B) === Definitions. ===
-For purposes of this 
 paragraph--
 ``
            (i) Rural area.--The term `rural area' 
 shall have the meaning given such term under 
 

section 1393

    (a)

    (2) .
 ``
            (ii) Historic preservation project.--The 
 term `historic preservation project' means a 
 qualified conversion which involves the 
 certified rehabilitation of a certified 
 historic structure. Whether conversion of a 
 certified historic structure involves certified 
 rehabilitation shall be determined under rules 
 similar to the rules of 

section 47
            (c) (2)
            (C) .
 ``

    (h) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance--
 ``

    (1) providing for the recapture of the credit determined 
 under subsection

    (a) if the qualified affordable housing 
 building ceases to be a qualified affordable housing building 
 during the 30-year period beginning on the date that such 
 building is placed in service by the taxpayer,
 ``

    (2) detailing any certifications required from the 
 taxpayer or any housing credit agency of a State,
 ``

    (3) with respect to the application of subsection

    (b)

    (4) ,
 ``

    (4) with respect to information reporting on allocations 
 of qualified conversion credit dollar amounts,
 ``

    (5) providing rules for making a determination as to 
 whether an area is described in subsection

    (e)

    (4)
        (B) , and
 ``

    (6) which encourages housing credit agencies to allocate, 
 to the extent practicable, qualified conversion credit dollar 
 amounts to non-metropolitan counties within a State in 
 proportion to the non-metropolitan population of the State, but 
 only to the extent it is demonstrated within such non-
 metropolitan counties that there are sufficient qualified 
 conversion expenditures to warrant such allocations.''.

    (b) Transferability of Credit.--

Section 6418

    (f)

    (1)
        (A) of such Code 
is amended by adding at the end the following new clause:
 ``
            (xii) The affordable housing conversion 
 credit determined under 

section 48F.''.
            (c) Conforming Amendments.--

    (1) Section 46 of such Code is amended in paragraph

    (5) by 
 striking ``and'' at the end, in paragraph

    (6) by striking the 
 period at the end and inserting ``, and'', and by adding at the 
 end the following new paragraph:
 ``

    (7) the affordable housing conversion credit.''.

    (2) Section 49

    (a)

    (1)
            (C) of such Code is amended by striking 
 ``and'' at the end of clause
            (v) , in clause
            (vi) by striking 
 the period at the end and inserting ``, and'', and by adding at 
 the end the follow new clause:
 ``
            (vii) the basis of any property which is 
 being converted as part of a qualified 
 conversion under 

section 48F.''.

    (3) Section 50

    (a)

    (2)
        (E) of such Code is amended by striking 
 ``or 48E

    (e) '' and inserting ``48E

    (e) , or 48F

    (f) ''.

    (4) The table of sections for subpart E of part IV of 
 subchapter A of chapter 1 of subtitle A of such Code is amended 
 by adding at the end the following new item:

``

Sec. 48F. Affordable housing conversion credit.''.
            (d) Effective Date.--The amendments made by this section shall 
apply to qualified affordable housing buildings (as defined in 

section 48F of the Internal Revenue Code of 1986, as added by this section) 
placed in service after the date of the enactment of this Act.
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