US Codex
Bill
Notes

Division B — Housing

H.R. 5352 · 113th Congress · Jul 31, 2014 · Lineage

B Housing

VI Common Sense Housing Investment

601. Congressional findings

The Congress finds the following:
(1)
Two principal Federal housing goals are to increase the rate of home ownership and make rental housing affordable for low-income families and individuals.
(2)
Much more progress has been achieved on the first goal than on the second goal.
(3)
The Federal Government devotes more than three times the amount of budgetary resources to supporting home ownership than it devotes to making affordable rental housing available.
(4)
The burden of housing costs is more pronounced among renters than among owners.
(5)
There is a shortage of more than 7 million homes affordable to families in the bottom 20 percent of income, meaning that there are only 30 affordable units for every 100 families.
(6)
Only one in four families that qualify for rental housing assistance receives benefits.
(7)
Housing assistance waiting lists can be 10 years long and in many communities are closed.
(8)
The shortage of rental homes that are affordable for extremely low-income households to be the principal cause of homelessness in the United States.
(9)
Public housing facilities in the United States have more than $26 billion in deferred maintenance after decades of neglect which results in a loss of 10,000 units each year.
(10)
The low-income housing tax credit successfully provides 100,000 units of affordable housing every year.
(11)
Every tax reform commission has recommended capping the mortgage interest deduction and converting it to a fairer and simpler credit.
(12)
More than 75 percent of the value of the mortgage interest deduction inures to the benefit of the top 20 percent of earners.
(13)
Fewer than half of tax filers with a home mortgage claim the mortgage interest deduction.
(14)
Only 9 percent of rural tax filers claim the mortgage interest deduction.
(15)
Ninety-six percent of homes sold between 2005 and 2011 sold for less than $500,000.
(16)
A better approach that provides equitable benefits for families who buy homes, enables more low- and moderate-income homeowners to receive a benefit, and invests in affordable rental housing to assist those who used to be homeless or who have extremely or very low incomes is needed to strengthen families and communities.

602. Replacement of mortgage interest deduction with mortgage interest credit

(a)
Nonrefundable credit— Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:

“25E. Interest on indebtedness secured by qualified residence

“(a) Allowance of credit—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to 15 percent of the qualified residence interest paid or accrued during the taxable year.

“(b) Qualified residence interest—For purposes of this section—

“(1) In general—The term qualified residence interest means interest which is paid or accrued during the taxable year on—

“(A) acquisition indebtedness with respect to any qualified residence of the taxpayer, or

“(B) home equity indebtedness with respect to any qualified residence of the taxpayer.

“(2) Overall limitation—The aggregate amount of indebtedness taken into account for any period for purposes of this section shall not exceed $500,000 ($250,000 in the case of a married individual filing a separate return).

“(3) Acquisition indebtedness—The term acquisition indebtedness means any indebtedness which—

“(A) is incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer, and

“(B) is secured by such residence.

“(4) Home equity indebtedness

“(A) In general—The term home equity indebtedness means any indebtedness (other than acquisition indebtedness) secured by a qualified residence to the extent the aggregate amount of such indebtedness does not exceed—

“(i) the fair market value of such qualified residence, reduced by

“(ii) the amount of acquisition indebtedness with respect to such residence.

“(B) Limitation—The aggregate amount treated as home equity indebtedness for any period shall not exceed $100,000 ($50,000 in the case of a married individual filing a separate return).

“(c) Special rules—For purposes of this section—

“(1) Qualified residence—The term qualified residence means—

“(A) the principal residence (within the meaning of section 121) of the taxpayer, and

“(B) 1 other residence of the taxpayer which is selected by the taxpayer for purposes of this subsection for the taxable year and which is used by the taxpayer as a residence (within the meaning of section 280A(d)(1)).

“(2) Married individuals filing separate returns—If a married couple does not file a joint return for the taxable year—

“(A) such couple shall be treated as 1 taxpayer for purposes of paragraph (1), and

“(B) each individual shall be entitled to take into account 1 residence unless both individuals consent in writing to 1 individual taking into account the principal residence and 1 other residence.

“(3) Residence not rented—For purposes of paragraph (1)(B), notwithstanding section 280A(d)(1), if the taxpayer does not rent a dwelling unit at any time during a taxable year, such unit may be treated as a residence for such taxable year.

“(4) Unenforceable security interests—Indebtedness shall not fail to be treated as secured by any property solely because, under any applicable State or local homestead or other debtor protection law in effect on August 16, 1986, the security interest is ineffective or the enforceability of the security interest is restricted.

“(5) Special rules for estates and trusts—For purposes of determining whether any interest paid or accrued by an estate or trust is qualified residence interest, any residence held by such estate or trust shall be treated as a qualified residence of such estate or trust if such estate or trust establishes that such residence is a qualified residence of a beneficiary who has a present interest in such estate or trust or an interest in the residuary of such estate or trust.

“(d) Coordination with deduction—In the case of any taxable year beginning in calendar years 2014 through 2018, the taxpayer may elect to apply this section in lieu of the deduction under section 163 for qualified residence interest.”

(b)
Phaseout of deduction— Section 163(h) of such Code is amended by adding at the end the following new paragraph:

“(6) Phaseout

“(A) In general—In the case of any taxable year beginning in a calendar year after 2013, the amount otherwise allowable as a deduction by reason of paragraph (2)(D) shall be the applicable percentage of such amount.

“(B) Applicable percentage—For purposes of subparagraph (A), the applicable percentage shall be determined in accordance with the following table:”

(c)
Phasedown of mortgage limit— Subparagraph (B) of section 163(h)(3) of such Code is amended by adding at the end the following:

“(iii) Phasedown

“(I) In general—In the case of any taxable year beginning in calendar years 2014 through 2018, clause (ii) shall be applied by substituting the amounts specified in the table in subclause (II) of this clause for “$1,000,000” and “$500,000”, respectively.

“(II) Phasedown amounts—For purposes of subclause (I), the amounts specified in this subclause for a taxable year shall be the amounts specified in the following table:”

(d)
Clerical amendment— The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after section 25D the following new item:
(e)
Effective date— The amendments made by this section shall apply with respect to interest paid or accrued after December 31, 2013.

603. Deduction allowed for interest and taxes relating to land for dwelling purposes owned or leased by cooperative housing corporations

(a)
In general— Subparagraph (B) of section 216(b)(1) of the Internal Revenue Code of 1986 is amended by inserting “or land,” after “building,”.
(b)
Effective date— The amendment made by subsection (a) shall apply to amounts paid or accrued after December 31, 2012.

604. Use of mortgage interest savings to increase low-income housing tax credit

(a)
In general— Subclause (I) of section 42(h)(3)(C)(ii) of the Internal Revenue Code of 1986 is amended by striking “$1.75 ($1.50 for 2001)” and inserting “$2.70”.
(b)
Inflation adjustment— Subparagraph (H) of section 42(h)(3) of such Code is amended to read as follows:

“(H) Cost-of-living adjustment

“(i) In general—In the case of a calendar year after 2002, the $2,000,000 amount in subparagraph (C) shall 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 2001” for “calendar year 1992” in subparagraph (B) thereof.

“(ii) Per capita amount—In the case of a calendar year after 2014, the $2.70 amount in subparagraph (C) shall 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 2013” for “calendar year 1992” in subparagraph (B) thereof.

“(iii) Rounding

“(I) In the case of the $2,000,000 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 $2.70 amount, any increase under clause (ii) which is not a multiple of 5 cents shall be rounded to the next lowest multiple of 5 cents.”

(c)
Eligible basis— Clause (i) of section 42(d)(5)(B) of such Code is amended by striking “and” at the end of subclause (I), by striking the period at the end of subclause (II) and inserting “, and”, and by adding at the end the following:

“(III) in the case of a building containing units which are designated to serve extremely low-income households by the State housing credit agency and require the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project, the eligible basis of such building determined by the portion of such units shall be 150 percent of such basis determined without regard to this subparagraph.”

(d)
Effective date— The amendments made by this section shall apply to allocations made in calendar years beginning after December 31, 2013.

605. Use of mortgage interest savings for affordable housing programs

(a)
Use of savings— For each year, the Secretary of the Treasury shall determine the amount of revenues accruing to the general fund of the Treasury by reason of the enactment of section 602 that remain after use of such revenues in accordance with section 604 and shall credit an amount equal to such remaining revenues as follows:
(1)
Housing Trust Fund— The Secretary shall credit the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568) with an amount equal to 60 percent of the amount of such remaining revenues.
(2)
Section 8 rental assistance— The Secretary shall credit an amount equal to 30 percent of the amount of such remaining revenues to the Secretary of Housing and Urban Development for use only for providing tenant- and project-based rental assistance under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f).
(3)
Public Housing Capital Fund— The Secretary shall credit an amount equal to 10 percent of the amount of such remaining revenues to the Public Housing Capital Fund under section 9(d) of the United States Housing Act of 1937 (42 U.S.C. 1437g(d)).
(b)
Changes to Housing Trust Fund— Not later than the expiration of the 6-month period beginning on the date of the enactment of this Act, the Secretary of Housing and Urban Development shall revise the regulations relating to the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4568) to provide that such section is carried out with the maximum amount of flexibility possible while complying with such section, which shall include revising such regulations—
(1)
to increase the limitation on amounts from the Fund that are available for use for operating assistance for housing;
(2)
to allow public housing agencies and tribally designated housing entities to be recipient of grants amounts from the Fund that are allocated to a State or State designated entity; and
(3)
eliminate the applicability of rules for the Fund that are based on the HOME Investment Partnerships Act (42 U.S.C. 1721 et seq.).

VII Low-Income Housing Tax Credit for Homeless Youth

701. Students who were homeless youths or homeless veterans permitted to occupy low-income housing units

(a)
In general— Section 42(i)(3)(D)(i) of the Internal Revenue Code of 1986 is amended by redesignating subclauses (II) and (III) as subclauses (IV) and (V) and inserting after subclause (I) the following new subclauses:

“(II) a student who was (prior to occupying such unit) a homeless child or youth (as defined in section 725 of the McKinney-Vento Homeless Assistance Act),

“(III) a student who was (prior to occupying such unit) a homeless veteran (as defined in section 2002 of title 38, United States Code),”

(b)
Effective date— The amendments made by this section shall apply to determinations made on or after the date of the enactment of this Act.

VIII Renters Tax Credit

801. Renters tax credit

(a)
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

“45S. Renters credit

“(a) In general—For purposes of section 38, in the case of a qualified credit recipient, the renters credit for any taxable year is an amount equal to the sum of the renters credit amounts allocated to such qualified credit recipient under this section for months ending during the taxable year.

“(b) Renters credit amount

“(1) In general—For purposes of this section, the term renters credit amount means the rent reduction amount with respect to each rental unit which is occupied by a qualified renter.

“(2) Qualified renter—For purposes of this section, the term qualified renter means a family unit with income not greater than the higher of—

“(A) 60 percent of local median income, or

“(B) 150 percent of the Federal poverty line,

“(3) Rent reduction amount—For purposes of this section—

“(A) In general—The term rent reduction amount is the amount by which the fair market rent for the unit involved exceeds the rent charged to the qualified renter.

“(B) Limitation—The rent reduction amount taken into account under this section shall not exceed the excess of—

“(i) the rent charged to the qualified renter (or, if lower, specified modest rent), over

“(ii) 30 percent of the qualified renters income (prorated monthly) as determined by the renters credit agency of the State.

“(C) Specified modest rent—The term specified modest rent means—

“(i) the Fair Market Rent determined by the Secretary of Housing and Urban Development for the ZIP code (if the unit is located in a metropolitan area) or non-metropolitan county, or

“(ii) such amount as may be determined by the State with respect to the area in which the unit is located if such amount is within 25 percent of the amount determined under clause (i) with respect to such unit.

“(D) Utilities—The renters credit agency of the State may determine whether and how to take into account the cost of utilities in determining the rent reduction amount.

“(E) Credit adjustment—The renters credit agency of the State may elect to increase the rent reduction amount such that such amount does not exceed 110 percent of such amount as determined without regard to this subparagraph.

“(c) Qualified credit recipient—For purposes of this section, the term qualified credit recipient means, with respect to any rental unit occupied by a qualified renter, the owner of such unit but only to the extent of the renters credit amounts which have been allocated to such person by the renters credit agency. In lieu of the owner of the unit, the renters credit agency may treat the lender of any loan to such owner as the qualified credit recipient if such unit secures such loan.

“(d) Allocations by renters credit agency to credit recipients

“(1) In general—The renters credit agency may make allocations of renters credit amounts to qualified credit recipients under this section on the basis of—

“(A) the identity of the qualified renter, such that the renters credit amount is allowed to the owner of any rental unit which such qualified renter occupies (or the lender referred to in subsection (c)) for any month, or

“(B) one or more rental units, such that the renters credit amount is allowed to the owner of such units (or the lender referred to in subsection (c)) for such months as such units are occupied by a qualified renter.

“(2) Restrictions on unit based allocations—A renters credit agency may make allocations of renters credit as described in paragraph (1)(B) only if—

“(A) such units are part of a project or building in which not more than 40 percent of the units receive allocations under this section (the Secretary may provide such exceptions to the requirement of this subparagraph as the Secretary determines appropriate for small buildings or buildings with respect to which more than 40 percent of the units were previously subsidized under other Federal programs), and

“(B) the Secretary has approved a mobility plan submitted by such renters credit agency which provides for an adequate method to ensure that qualified renters have the ability to move from a unit which is eligible for credit under this section without losing the rent subsidy provided by this section.

“(e) Allocations of credit authority to State agencies

“(1) Renters credit dollar amount for agencies

“(A) State limitation—The aggregate credit amounts which a renters credit agency may allocate for any calendar year is the portion of the State renters credit ceiling allocated under this paragraph for such calendar year to such agency.

“(B) State ceiling initially allocated to State housing credit agencies—Except as provided in subparagraphs (D) and (E), the State renters credit ceiling for each calendar year shall be allocated to the renters credit agency of such State. If there is more than 1 renters credit agency of a State, all such agencies shall be treated as a single agency.

“(C) State renters credit ceiling—The State renters credit ceiling applicable to any State and any calendar year shall be an amount equal to the sum of—

“(i) the unused State renters credit ceiling (if any) of such State for the preceding calendar year,

“(ii) the greater of—

“(I) $17.50 multiplied by the State population, or

“(II) $20,000,000,

“(iii) the amount of State renters credit ceiling returned in the calendar year, plus

“(iv) the amount (if any) allocated under subparagraph (D) to such State by the Secretary.

“(D) Unused renters credit carryovers allocated among certain States

“(i) In general—The unused renters credit carryover of a State for any calendar year shall be assigned to the Secretary for allocation among qualified States for the succeeding calendar year.

“(ii) Unused renters credit carryover—For purposes of this subparagraph, the unused renters credit carryover of a State for any calendar year is the excess (if any) of—

“(I) the unused State renters credit ceiling for the year preceding such year, over

“(II) the aggregate renters credit dollar amount allocated for such year.

“(iii) Formula for allocation of unused housing credit carryovers among qualified States—The amount allocated under this subparagraph to a qualified State for any calendar year shall be the amount determined by the Secretary to bear the same ratio to the aggregate unused renters credit carryovers of all States for the preceding calendar year as such State's population for the calendar year bears to the population of all qualified States for the calendar year. For purposes of the preceding sentence, population shall be determined in accordance with section 146(j).

“(iv) Qualified State—For purposes of this subparagraph, the term qualified State means, with respect to a calendar year, any State—

“(I) which allocated its entire State renters credit ceiling for the preceding calendar year, and

“(II) for which a request is made (not later than May 1 of the calendar year) to receive an allocation under clause (iii).

“(E) Application of certain rules—For purposes of this paragraph, rules similar to the rules of subparagraphs (E), (F), and (G) of section 42(h)(3) shall apply.

“(F) Inflation adjustment

“(i) In general—In the case of a calendar year after 2013, the $20,000,000 and $17.50 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 2001” for “calendar year 1992” in subparagraph (B) thereof.

“(ii) Rounding

“(I) In the case of the $20,000,000 amount, any increase under clause (i) which is not a multiple of $50,000 shall be rounded to the next lowest multiple of $50,000.

“(II) In the case of the $17.50 amount, any increase under clause (i) which is not a multiple of 50 cents shall be rounded to the next lowest multiple of 50 cents.

“(f) Other definitions—For purposes of this section—

“(1) Renters credit agency—The term renters credit agency means, with respect to any State, the housing credit agency of such State (as defined in section 42(h)(8)(A)) or such other agency as is authorized to carry out the activities of the renters credit agency under this section.

“(2) Possessions treated as States—The term State includes a possession of the United States.

“(g) Regulations—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.”

(b)
Credit To be part of general business credit—
(1)
In general— Subsection (b) of section 38 of such Code is amended by striking “plus” at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting “, plus”, and by adding at the end the following new paragraph:

“(37) the renters credit determined under section 45S(a).”

(2)
Credit allowable against alternative minimum tax— Subparagraph (B) of section 38(c)(4) of such Code is amended by redesignating clauses (vii) through (ix) as clauses (viii) through (x), respectively, and by inserting after clause (vi) the following new clause:

“(vii) the credit determined under section 45S,”

(c)
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
(d)
Effective date— The amendments made by this section shall apply to allocations made for calendar years after 2014 and to taxable years ending after December 31, 2014.