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Title II — Community Investment

H.R. 3839 · 115th Congress · Sep 26, 2017 · Lineage

II Community Investment

A Housing

Sec. 201 Housing and commercial development

(a)
First-Time homebuyer tax credit for economically distressed communities—
(1)
In general— Section 36 of the Internal Revenue Code of 1986 is amended to read as follows:

“36. First-time homebuyer tax credit for economically distressed communities

“(a) In general—In the case of an individual who is a first-time homebuyer of a principal residence in an economically distressed community during a taxable year, there shall be allowed as a credit against the tax imposed by this subtitle for such taxable year an amount equal to 10 percent of the purchase price of the residence.

“(b) Limitations

“(1) Dollar limitation

“(A) In general—Except as otherwise provided in this paragraph, the credit allowed under subsection (a) shall not exceed $8,000.

“(B) Married individuals filing separately—In the case of a married individual filing a separate return, subparagraph (A) shall be applied by substituting “$4,000” for “$8,000”.

“(C) Other individuals—If two or more individuals who are not married purchase a principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $8,000.

“(D) Special rule for long-time residents of same principal residence—In the case of a taxpayer to whom a credit under subsection (a) is allowed by reason of subsection (c)(7), subparagraphs (A), (B), and (C) shall be applied by substituting “$6,500” for “$8,000” and “$3,250” for “$4,000”.

“(2) Limitation based on modified adjusted gross income

“(A) In general—The amount allowable as a credit under subsection (a) (determined without regard to this paragraph) for the taxable year shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which is so allowable as—

“(i) the excess (if any) of—

“(I) the taxpayer’s modified adjusted gross income for such taxable year, over

“(II) $125,000 ($225,000 in the case of a joint return), bears to

“(ii) $20,000.

“(B) Modified adjusted gross income—For purposes of subparagraph (A), the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933.

“(3) Limitation based on purchase price—No credit shall be allowed under subsection (a) for the purchase of any residence if the purchase price of such residence exceeds $800,000.

“(4) Age limitation—No credit shall be allowed under subsection (a) with respect to the purchase of any residence unless the taxpayer has attained age 18 as of the date of such purchase. In the case of any taxpayer who is married (within the meaning of section 7703), the taxpayer shall be treated as meeting the age requirement of the preceding sentence if the taxpayer or the taxpayer's spouse meets such age requirement.

“(c) Definitions—For purposes of this section—

“(1) First-time homebuyer—The term first-time homebuyer means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which this section applies.

“(2) Principal residence—The term principal residence has the same meaning as when used in section 121.

“(3) Economically distressed community

“(A) In general—The term economically distressed community means any area identified as an economically distressed community for purposes of this section by the Secretary of Housing and Urban Development.

“(B) Factors to be taken into account—For purposes of identifying areas as economically distressed communities for purposes of this section, the Secretary of Housing and Urban Development shall take into account the following:

“(i) Percent of the population in such area which has attained age 25 and is without a high school degree.

“(ii) Percent of habitable housing in such area that is unoccupied, excluding properties that are for seasonal, recreational, or occasional use.

“(iii) Percent of the population in such area which has attained age 16 and is not currently employed.

“(iv) Percent of population in such area which is living under the poverty line.

“(v) Ratio of such area’s median income to the median income of the State in which such area is located.

“(vi) Percent change in the number of employed individuals in such area in 2013 compared to 2010.

“(vii) Percent change in the number of business establishments in such areas in 2013 compared to 2010.

“(viii) Such other factors as such Secretary determines appropriate.

“(4) Purchase

“(A) In general—The term purchase means any acquisition, but only if—

“(i) the property is not acquired from a person related to the person acquiring such property (or, if married, such individual’s spouse), and

“(ii) the basis of the property in the hands of the person acquiring such property is not determined—

“(I) in whole or in part by reference to the adjusted basis of such property in the hands of the person from whom acquired, or

“(II) under section 1014(a) (relating to property acquired from a decedent).

“(B) Construction—A residence which is constructed by the taxpayer shall be treated as purchased by the taxpayer on the date the taxpayer first occupies such residence.

“(5) Purchase price—The term purchase price means the adjusted basis of the principal residence on the date such residence is purchased.

“(6) Related persons—A person shall be treated as related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b) (but, in applying section 267(b) and (c) for purposes of this section, paragraph (4) of section 267(c) shall be treated as providing that the family of an individual shall include only his spouse, ancestors, and lineal descendants).

“(7) Exception for long-time residents of same principal residence—In the case of an individual (and, if married, such individual's spouse) who has owned and used the same residence as such individual’s principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be treated as a first-time homebuyer for purposes of this section with respect to the purchase of such subsequent residence.

“(d) Exceptions—No credit under subsection (a) shall be allowed to any taxpayer for any taxable year with respect to the purchase of a residence if—

“(1) the taxpayer is a nonresident alien,

“(2) the taxpayer disposes of such residence (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer's spouse)) before the close of such taxable year,

“(3) a deduction under section 151 with respect to such taxpayer is allowable to another taxpayer for such taxable year, or

“(4) the taxpayer fails to attach to the return of tax for such taxable year a properly executed copy of the settlement statement used to complete such purchase.

“(e) Reporting—If the Secretary requires information reporting under section 6045 by a person described in subsection (e)(2) thereof to verify the eligibility of taxpayers for the credit allowable by this section, the exception provided by section 6045(e) shall not apply.

“(f) Recapture of credit

“(1) In general—If a taxpayer disposes of the principal residence with respect to which a credit was allowed under subsection (a) (or such residence ceases to be the principal residence of the taxpayer (and, if married, the taxpayer’s spouse)) before the end of the 5-year period beginning on the date of the purchase of such residence by the taxpayer, the tax imposed by this chapter for the taxable year of such disposition or cessation shall be increased by the amount of the credit so allowed.

“(2) Limitation based on gain—In the case of the sale of the principal residence to a person who is not related to the taxpayer, the increase in tax determined under paragraph (1) shall not exceed the amount of gain (if any) on such sale. Solely for purposes of the preceding sentence, the adjusted basis of such residence shall be reduced by the amount of the credit allowed under subsection (a).

“(3) Exceptions

“(A) Death of taxpayer—Paragraph (1) shall not apply to any taxable year ending after the date of the taxpayer’s death.

“(B) Involuntary conversion—Paragraph (a) shall not apply in the case of a residence which is compulsorily or involuntarily converted (within the meaning of section 1033(a)) if the taxpayer acquires a new principal residence during the 2-year period beginning on the date of the disposition or cessation referred to in paragraph (1). Paragraph (1) shall apply to such new principal residence during the 5-year period referred to therein in the same manner as if such new principal residence were the converted residence.

“(C) Transfers between spouses or incident to divorce—In the case of a transfer of a residence to which section 1041(a) applies—

“(i) paragraph (1) shall not apply to such transfer, and

“(ii) in the case of taxable years ending after such transfer, paragraph (1) shall apply to the transferee in the same manner as if such transferee were the transferor (and shall not apply to the transferor).

“(4) Joint returns—In the case of a credit allowed under subsection (a) with respect to a joint return, half of such credit shall be treated as having been allowed to each individual filing such return for purposes of this subsection.

“(5) Return requirement—If the tax imposed by this chapter for the taxable year is increased under this subsection, the taxpayer shall, notwithstanding section 6012, be required to file a return with respect to the taxes imposed under this subtitle.

“(g) Application of section—This section shall only apply to a principal residence purchased by the taxpayer after December 31, 2017, and before January 1, 2020.”

(2)
Clerical amendment— The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the item relating to section 36 and inserting the following new item:
(3)
Effective date— The amendments made by this section shall apply to principal residences purchased after December 31, 2017.
(b)
Use of hardest hit fund amounts for commercial demolition—
(1)
Authority— Notwithstanding any provision of title I of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.), any regulation, guidance, order, or other directive of the Secretary of the Treasury, or any agreement (or amendment thereto) entered into under the Hardest Hit Fund program of the Secretary under such title I, to the extent that any amounts of assistance that have been, or are, allocated for or provided to a State or State agency through the Hardest Hit Fund program may be used for demolishing and greening vacant and abandoned blighted residential properties and related expenses, such amounts may also be used for demolishing and greening vacant and abandoned blighted commercial properties and related expenses.
(2)
Report— Not later than the expiration of the 2-year period beginning on the date of the enactment of this Act, the Secretary of the Treasury shall submit a report to the Congress regarding the impacts of using assistance provided under the Hardest Hit Fund program pursuant to the authority provided under paragraph (1) and the effectiveness of such use.

B Retail Redlining and Food Deserts

Sec. 221 Economic growth, retention, and recruitment of commercial investment in economically underserved communities

The Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) is amended by adding at the end the following new title:

“VIII ECONOMIC GROWTH, RETENTION, AND RECRUITMENT OF COMMERCIAL INVESTMENT IN ECONOMICALLY UNDERSERVED COMMUNITIES

“811. Purpose

“The purpose of this title is to assist with the economic growth of economically underserved communities that have potential for strong Class 1 commercial investment, but that continue to have a difficult time recruiting Class 1 commercial investment.

“812. Grant program

“(a) Authorization—From amounts appropriated under section 814, the Administrator shall make grants on a competitive basis to an eligible community for—

“(1) the creation of a grant program or revolving loan fund program (or both) that helps develop financing packages for Class 1 commercial investment in the community;

“(2) lowering real estate property tax rates in the community;

“(3) conducting community-wide market analysis to help recruit and retain Class 1 commercial investment;

“(4) creating employment training programs for Class 1 business customer service, sales, and managerial positions in the community;

“(5) retail marketing strategies to solicit new Class 1 commercial investment starts in the community;

“(6) program allowances for activities to promote Class 1 commercial investment in the community, such as the publication of marketing materials, development of economic development web pages, and educational outreach activities with retail trade associations; and

“(7) hiring business recruitment specialists to operate in the community.

“(b) Eligibility—The Administrator may only make a grant under subsection (a) to a community whose demographics include—

“(1) a median per capita income no higher than $35,000; and

“(2) an identified lack of Class 1 commercial investment.

“(c) Application—A community seeking a grant under subsection (a) shall submit an application at such time, in such form, and containing such information and assurances as the Administrator may require, except that the application shall include—

“(1) a description of how the community, through the activities the community proposes to carry out with the grant funds will recruit, retain and grow its economy through Class 1 commercial investment; and

“(2) a description of the difficulty the community has faced recruiting, retaining and growing its economy through Class 1 commercial investment.

“(d) Matching funds

“(1) In general—The Administrator may not make a grant to a community under subsection (a) unless the community agrees that, with respect to the costs to be incurred by the community in carrying out the activities for which the grant is awarded, the community will make available non-Federal contributions in an amount equal to not less than 10 percent of the Federal funds provided under the grant.

“(2) Satisfying matching requirements—The non-Federal contributions required under paragraph (1) may be—

“(A) in cash or in-kind, including services, fairly evaluated; and

“(B) from—

“(i) any private source;

“(ii) State or local governmental entity; or

“(iii) nonprofit source.

“(3) Waiver—The Administrator may waive or reduce the non-Federal contribution required by paragraph (1) if the community involved demonstrates that the community cannot meet the contribution requirement due to financial hardship.

“(e) Limitations—Amounts appropriated pursuant to the authorization of appropriations in section 814 for a fiscal year shall be allocated as follows:

“(1) No more than 5 percent of such funds shall go to administrative costs;

“(2) 70 percent of such funds shall go toward activities described in paragraphs (1) through (4) of subsection (a), after taking into account administrative costs under subparagraph (A); and

“(3) 30 percent of such funds shall go toward activities described in paragraphs (5) through (7) of subsection (a), after taking into account administrative costs under subparagraph (A).

“813. Definitions

“In this title:

“(1) Community—The term community means a governance structure that includes county, parish, city, village, township, district or borough.

“(2) Class 1 commercial investment—The term Class 1 commercial investment means retail grocery chains, food service retailers, restaurants and franchises, retail stores, cafes, shopping malls, and other shops.

“(3) economically underserved community—The term economically underserved community means an area suffering from low income and resultant low purchasing power, limiting its ability to generate sufficient goods and services to be used in exchange with other areas to meet current consumption needs.

“814. Authorization of appropriations

“There is authorized to be appropriated to the Administrator to make grants under section 812(a) $40,000,000 for each of fiscal years 2018 through 2024.”

Sec. 222 Producer discretion to plant additional fruits and vegetables on base acres to alleviate food deserts without a resulting reduction in payment acres

Section 1114(e) of the Agricultural Act of 2014 (7 U.S.C. 9014(e)) is amended by adding at the end the following new paragraph:

“(5) Producer discretion to plant additional fruits and vegetables to alleviate food deserts

“(A) Additional planting authority; purpose—The percentages specified in paragraphs (2) and (3) are increased by an additional five percent of base acres, to 20 percent and 40 percent respectively, if the crops referred to in paragraph (1) grown on the additional base acres are grown solely for sale or donation, directly or indirectly by the producer and with or without processing, in a food desert.

“(B) Food desert defined—In this paragraph, the term food desert means a census tract that, as determined by the Secretary—

“(i) has a poverty rate of 20 percent or greater; and

“(ii) provides difficult access to a retail outlet that provides a wide-variety of fruits and vegetables.”

C Digital infrastructure

Sec. 231 GAO report on Federal efforts to expand broadband service

(a)
In general— Not later than 180 days after the date of the enactment of this Act, the Comptroller General of the United States shall submit to Congress a report on the efficiency and effectiveness of efforts by Federal agencies to expand access to broadband service, including through the programs described in subsection (c).
(b)
Included matters— The report required by subsection (a) shall include—
(1)
for each program covered by the report and over a period of time for such program considered appropriate by the Comptroller General, an analysis of the number of subscribers that have gained access, through or as a result of such program, to broadband service that has the capacity to transmit data to enable subscribers to originate and receive high-quality voice, data, graphics, and video; and
(2)
an analysis of implementation by Federal agencies of the recommendations of the Broadband Opportunity Council, established by the Presidential Memorandum entitled “Expanding Broadband Deployment and Adoption by Addressing Regulatory Barriers and Encouraging Investment and Training” and dated March 23, 2015.
(c)
Included programs— The programs described in this subsection are the following:
(1)
Federal universal service support mechanisms established under section 254 of the Communications Act of 1934 (47 U.S.C. 254).
(2)
The Broadband Technology Opportunities Program established under section 6001 of the American Recovery and Reinvestment Act of 2009 (47 U.S.C. 1305).
(3)
Rural broadband loans under section 601 of the Rural Electrification Act of 1936 (7 U.S.C. 950bb).
(4)
Telecommunications infrastructure loans under section 201 of the Rural Electrification Act of 1936 (7 U.S.C. 922).
(5)
Community Connect grants under the last proviso under the heading “Distance Learning, Telemedicine, and Broadband Program” in title III of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2004.
(6)
Distance Learning and Telemedicine grants under chapter 1 of subtitle D of title XXIII of the Food, Agriculture, Conservation, and Trade Act of 1990.
(d)
Federal agency defined— In this section, the term Federal agency has the meaning given the term agency in section 551 of title 5, United States Code.

D Direct lending

Sec. 241 Direct loans to small business concerns

(a)
In general— From amounts appropriated pursuant to subsection (e), the Administrator of the Small Business Administration shall establish a program to make direct loans to small business concerns (as defined under section 3 of the Small Business Act (15 U.S.C. 632)).
(b)
Amount— Loans made under this section shall be in an amount not greater than the lesser of—
(1)
5 percent of the annual revenue of the small business concern requesting the loan; or
(2)
$250,000.
(c)
Interest rate— The interest rate on a loan made under this section shall be equal to the discount window primary credit interest rate most recently published on the Federal Reserve Statistical Release on selected interest rates (daily or weekly), commonly referred to as the H.15 release.
(d)
Report— The Administrator of the Small Business Administration shall submit a report to Congress on the implementation and results of the program established under this section.
(e)
Authorization of appropriations— There are authorized to be appropriated $25,000,000 for each of fiscal years 2018 to 2022.