Section 1 Short title
This Act may be cited as the “Affordable Housing Credit Improvement Act of 2016”.
Affordable Housing Credit Improvement Act of 2016
A BILL
To amend the Internal Revenue Code of 1986 to reform the low-income housing credit, and for other purposes.
Sec. 2 Increases in State allocations
Phase-In of increases—
by striking “$1.75” in subclause (I) and inserting “the per capita dollar amount”, and
by striking “$2,000,000” in subclause (II) and inserting “the minimum ceiling amount”.
Per capita dollar amount; minimum ceiling amount— Subparagraph (I) of section 42(h)(3) of such Code is amended to read as follows:
“(I) Per capita dollar amount; minimum ceiling amount—For purposes of this paragraph—
“(i) Per capita dollar amount—The per capita dollar amount is—
“(I) for calendar year 2016, $2.35,
“(II) for calendar year 2017, $2.59,
“(III) for calendar year 2018, $2.82,
“(IV) for calendar year 2019, $3.06,
“(V) for calendar year 2020, $3.29, and
“(VI) $3.53 thereafter.
“(ii) Minimum ceiling amount—The minimum ceiling amount is—
“(I) for calendar year 2016, $2,690,000,
“(II) for calendar year 2017, $2,959,000,
“(III) for calendar year 2018, $3,228,000,
“(IV) for calendar year 2019, $3,497,000,
“(V) for calendar year 2020, $3,766,000, and
“(VI) $4,035,000 thereafter.”
Modification of cost-of-living adjustment— Subparagraph (H) of section 42(h)(3) of such Code is amended—
by striking “2002” in clause (i) and inserting “2016”,
by striking “the $2,000,000 and $1.75 amounts in subparagraph (C)” in clause (i) and inserting “the dollar amounts applicable to such calendar year under clauses (i) and (ii) of subparagraph (I)”,
by striking “2001” in clause (i)(II) and inserting “2015”,
by striking “$2,000,000” in clause (ii)(I) and inserting “minimum ceiling”, and
by striking “$1.75” in clause (ii)(II) and inserting “per capita dollar”.
Effective date— The amendments made by this subsection shall apply to calendar years beginning after December 31, 2016.
Permanent increases—
In general— Clause (ii) of section 42(h)(3)(C) of the Internal Revenue Code of 1986, as amended by subsection (a)(1), is amended—
by striking “the per capita dollar amount” in subclause (I) and inserting “$3.53”, and
by striking “the minimum ceiling amount” in subclause (II) and inserting “$4,035,000”.
Conforming amendment— Paragraph (3) of section 42(h) of such Code is amended by striking subparagraph (I), as amended by subsection (a)(2).
Cost-of-living adjustment— Subparagraph (H) of section 42(h)(3) of such Code, as amended by subsection (a)(3), is amended—
by striking “the dollar amounts applicable to such calendar year under clauses (i) and (ii) of subparagraph (I)” in clause (i) and inserting “the $4,035,000 and $3.53 amounts in subparagraph (C)”,
by striking “minimum ceiling” in clause (ii)(I) and inserting “$4,035,000”, and
by striking “per capita dollar” in clause (ii)(II) and inserting “$3.53”.
Effective date— The amendments made by this subsection shall apply to calendar years beginning after December 31, 2021.
Sec. 3 Average income test
by striking “subparagraph (A) or (B)” and inserting “subparagraph (A), (B), or (C)”, and
by inserting after subparagraph (B) the following new subparagraph:
“(C) Average income test
“(i) In general—The project meets the minimum requirements of this subparagraph if 40 percent or more (25 percent or more in the case of a project described in section 142(d)(6)) of the residential units in such project are both rent-restricted and occupied by individuals whose income does not exceed the imputed income limitation designated by the taxpayer with respect to the respective unit.
“(ii) Special rules relating to income limitation—For purposes of clause (i)—
“(I) Designation—The taxpayer shall designate the imputed income limitation of each unit taken into account under such clause.
“(II) Average test—The average of the imputed income limitations designated under subclause (I) shall not exceed 60 percent of area median gross income.
“(III) 10-percent increments—The designated imputed income limitation of any unit under subclause (I) shall be 20 percent, 30 percent, 40 percent, 50 percent, 60 percent, 70 percent, or 80 percent of area median gross income.”
Conforming amendments— Subparagraph (C) of section 42(g)(2) of the Internal Revenue Code of 1986 is amended—
by redesignating clauses (i) and (ii) as subclauses (I) and (II), respectively, and by moving such subclauses 2 ems to the right,
by moving the flush language 2 ems to the right,
by striking “For purposes of this paragraph, the” and inserting “For purposes of this paragraph—
“(i) General rule—Except as provided in clause (ii), the”
by adding at the end the following new clause:
“(ii) Special rule for average income test—In the case of a project with respect to which the taxpayer elects the requirements of subparagraph (C) of paragraph (1), the imputed income limitation applicable to a unit is the imputed income limitation designated with respect to such unit under paragraph (1)(C)(ii)(I).”
Effective date— The amendments made by this section shall apply to elections made under section 42(g)(1) of the Internal Revenue Code of 1986 after the date of the enactment of this Act.
Sec. 4 Minimum credit rate
by redesignating paragraph (3) as paragraph (4), and
by inserting after paragraph (2) the following new paragraph:
“(3) Minimum credit rate—In the case of any new or existing building to which paragraph (2) does not apply and which is placed in service by the taxpayer after December 31, 2015, the applicable percentage shall not be less than 4 percent.”
Effective date— The amendments made by this section shall apply to buildings placed in service after December 31, 2015.