S.Amdt. 4415

SA 4415. Ms. CANTWELL (for herself, Mr. Smith, and Mr. Kerry)
submitted an amendment intended to be proposed to amendment SA 4387
submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill H.R.
3221, moving the United States toward greater energy independence and
security, developing innovative new technologies, reducing carbon
emissions, creating green jobs, protecting consumers, increasing clean
renewable energy production, and modernizing our energy infrastructure,
and to amend the Internal Revenue Code of 1986 to provide tax
incentives for the production of renewable energy and energy
conservation; which was ordered to lie on the table; as follows:

At the end, insert the following:

TITLE VIII--AFFORDABLE HOUSING INVESTMENT

SEC. 801. AMENDMENT OF 1986 CODE.

Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision,

[[Page S2522]]

the reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.

Subtitle A--Facilitate Development of Housing Credit Property

SEC. 811. RENAMING THE LOW-INCOME HOUSING CREDIT AS THE
AFFORDABLE HOUSING CREDIT.

(a) In General.--The heading of section 42 (relating to
low-income housing credit) is amended by striking ``LOW-
INCOME'' and inserting ``AFFORDABLE''.
(b) Conforming Amendments.--
(1) Sections 38(b)(5), 42(a), 772(a)(7), and 772(d)(5) are
each amended by striking ``low-income'' and inserting
``affordable''.
(2) The headings of subparagraphs (3)(D) and (6)(B) of
section 469(i) are each amended by striking ``low-income''
and inserting ``affordable''.
(3) The table of sections for subpart D of part IV of
subchapter A of chapter 1 is amended by striking the item
relating to section 42 and inserting the following:

``Sec. 42. Affordable housing credit.''.
(c) Effective Date.--The amendments made by this section
shall take effect on the date of the enactment of this Act.

SEC. 812. MODIFICATION OF RULES FOR DETERMINING APPLICABLE
PERCENTAGE.

(a) In General.--Subsection (b) of section 42 is amended--
(1) by striking the semicolon and all that follows to the
period in the heading,
(2) by striking paragraph (1) and inserting the following
new paragraph:
``(1) In general.--For purposes of this section, the term
`applicable percentage' means the greater of the alternative
applicable percentage determined under paragraph (2) or--
``(A) 9 percent in the case of any building to which
subparagraph (B) does not apply, and
``(B) 4 percent in the case of--
``(i) any existing building, and
``(ii) any new building if, at any time during the taxable
year or any prior taxable year, there is or was outstanding
any obligation--

``(I) not taken into account under section 146,
``(II) which is exempt from tax under section 103, and
``(III) the proceeds of which are or were used (directly or
indirectly) with respect to such building or the operation
thereof.'',

(3) by striking ``Buildings placed in service after 1987''
in the heading for paragraph (2) and inserting ``Alternative
applicable percentage'', and
(4) by striking ``In the case of any qualified low-income
building placed in service by the taxpayer after 1987, the
term `applicable percentage' means'' in paragraph (2)(A) and
inserting ``For purposes of paragraph (1), the term
`alternative applicable percentage' means''.
(b) Modification of Rules Related to Federal Subsidies.--
(1) In general.--Paragraph (2) of section 42(i) (relating
to determination of whether building is Federally subsidized)
is amended to read as follows:
``(2) Exceptions for certain new buildings otherwise
subject to 4 percent credit limitation.--
``(A) Election to reduce eligible basis by proceeds of
obligations.--A tax-exempt obligation shall not be taken into
account under subsection (b)(1)(B)(ii) if the taxpayer elects
to exclude the proceeds of such obligation from the eligible
basis of the building for purposes of subsection (d).
``(B) Special rule for subsidized construction financing.--
A tax-exempt obligation used to provide construction
financing for any building shall not be taken into account
under subsection (b)(1)(B)(ii) if--
``(i) such obligation (when issued) identified the building
for which the proceeds of such obligation would be used, and
``(ii) such obligation is redeemed before such building is
placed in service.''.
(2) Conforming amendment.--Section 1400N(c)(6) is amended
by striking ``December 31, 2010'' and inserting ``the date of
the enactment of the Affordable Housing Investment Act of
2008''.

SEC. 813. INCREASE IN CREDIT FOR BUILDINGS IN STATE
DESIGNATED AREAS.

(a) In General.--Clause (i) of section 42(d)(5)(C)
(relating to increase in credit for buildings in high cost
areas) is amended by striking ``or difficult development
area'' and inserting ``, difficult development area, or State
designated project''.
(b) State Designated Project.--Subparagraph (C) of section
42(d)(5) is amended by adding at the end the following new
clause:
``(v) State designated project.--For purposes of this
subparagraph, the term `State designated project' means any
project published as part of a State's qualified allocation
plan (as defined in subsection (m)(1)(B)) and designated by
the housing credit agency as meeting such criteria for
designation under this clause as the State in which such
project is located may specify. The rules of clauses (ii)(II)
and (iii)(II) shall not apply for purposes designations made
under this clause.''.
(c) Conforming Amendment.--The heading of subparagraph (C)
of section 42(d)(5) is amended by striking ``buildings in
high cost areas'' and inserting ``certain buildings''.

SEC. 814. MODIFICATION OF SCATTERED SITE RULE.

Paragraph (7) of section 42(g) (relating to scattered site
projects) is amended to read as follows:
``(7) Scattered site projects.--Buildings which would (but
for their lack of proximity) be treated as a project for
purposes of this section shall be so treated if the rent-
restricted (within the meaning of paragraph (2)) residential
units of such project are distributed among such buildings in
proportion to the number of residential units in each
building.''.

SEC. 815. TREATMENT OF RURAL PROJECTS.

Section 42(i) (relating to definitions and special rules)
is amended by adding at the end the following new paragraph:
``(8) Treatment of rural projects.--For purposes of this
section, in the case of any project for residential rental
property located in a rural area (as defined in section 520
of the Housing Act of 1949), any income limitation measured
by reference to area median gross income shall be measured by
reference to the greater of area median gross income or
national non-metropolitan median income.''.

SEC. 816. EXPANSION OF ALLOWABLE BASIS FOR COMMUNITY SERVICE
FACILITIES.

Section 42(d)(4)(C) (relating to inclusion of basis of
property used to provide services for certain nontenants) is
amended--
(1) by striking ``10 percent of the eligible basis'' in
clause (ii)and inserting ``20 percent of the first $5,000,000
in eligible basis plus 10 percent of the remaining eligible
basis'', and
(2) by adding at the end the following new flush sentences:

``For each calendar year beginning after 2008, the dollar
amount in clause (ii) shall be increased by an amount equal
to such dollar amount multiplied by the cost-of-living
adjustment determined under section 1(f)(3), determined by
substituting `calendar year 2007' for `calendar year 1992' in
subparagraph (B) thereof. If any amount adjusted under the
preceding sentence is not a multiple of $100,000, such amount
shall be rounded to the next lowest multiple of $100,000.''.

Subtitle B--Improve Coordination With Other Federal Housing Programs

SEC. 821. AFFORDABLE HOUSING CREDITS ALLOWED FOR SECTION 8
MODERATE REHABILITATION DEVELOPMENTS.

Paragraph (2) of section 42(c) (relating to qualified low-
income building) is amended by striking the last sentence.

SEC. 822. MODIFICATION TO LOW-INCOME HOUSING CREDIT RULES FOR
REDUCTION OF ELIGIBLE BASIS BY GRANTS RECEIVED.

(a) In General.--The Secretary of the Treasury shall modify
Treasury Regulations section 1.42-16(b) to provide that none
of the following shall be considered a grant made with
respect to a building or its operation for purposes of
section 42(d)(5)(A) of the Internal Revenue Code of 1986:
(1) Rental assistance under section 521 of the Housing Act
of 1949 (42 U.S.C. 1490a).
(2) Assistance under section 538(f)(5) of the Housing Act
of 1949 (42 U.S.C. 1490p-2(f)(5)).
(3) Interest reduction payments under section 236 of the
National Housing Act (12 U.S.C. 1715z-1).
(4) Rental assistance under section 202 of the Housing Act
of 1959 (12 U.S.C. 1701q).
(5) Rental assistance under section 811 of the Cranston-
Gonzalez National Affordable Housing Act (42 U.S.C. 8013).
(6) Modernization, operating, and rental assistance
pursuant to section 202 of the Native American Housing
Assistance and Self-Determination Act of 1996 (25 U.S.C.
4132).
(7) Assistance under title IV of the Stewart B. McKinney
Homeless Assistance Act (42 U.S.C. 11361 et seq.).
(8) Tenant-based rental assistance under section 212 of the
Cranston-Gonzalez National Affordable Housing Act (42 U.S.C.
12742).
(9) Assistance under the AIDS Housing Opportunity Act (42
U.S.C. 12901 et seq.).
(10) Per diem payments under section 2012 of title 38,
United States Code.
(11) Rent supplements under section 101 of the Housing and
Urban Development Act of 1965 (12 U.S.C. 1701s).
(12) Assistance under section 542 of the Housing Act of
1949 (42 U.S.C. 1490r).
(13) Any other ongoing payment used to enable the property
to be rented to low-income tenants.
(b) Effective Date.--The modifications required by this
section shall take effect on the date of the enactment of
this Act.
(c) No Inference.--Nothing contained in subsection (a) may
be construed to create any inference with respect to the
consideration of any program specified under subsection (a)
as a grant made with respect to a building or its operation
for purposes of section 42(d)(5)(A) of the Internal Revenue
Code of 1986 as in effect on the day before such date of
enactment.

Subtitle C--Facilitate Private Investment Capital to Increase the
Efficiency of Affordable Housing Investment

SEC. 831. REPEAL OF RECAPTURE BOND RULE.

(a) In General.--Paragraph (6) of section 42(j) (relating
to recapture of credit) is amended to read as follows:
``(6) No recapture on disposition of building (or interest
therein) reasonably expected to continue as a qualified low-
income building.--
``(A) In general.--In the case of a disposition of a
building or an interest therein, the taxpayer shall be
discharged from liability for any additional tax under this
subsection by reason of such disposition if it is reasonably
expected that such building will continue to be operated as a
qualified low-income building for the remaining compliance
period with respect to such building.
``(B) Statute of limitations.--

[[Page S2523]]

``(i) Extension of period.--The period for assessing a
deficiency attributable to the application of subparagraph
(A) with respect to a building (or interest therein) during
the compliance period with respect to such building shall not
expire before the expiration of 3 years after the end of such
compliance period.
``(ii) Assessment.--Such deficiency may be assessed before
the expiration of the 3-year period referred to in clause (i)
notwithstanding the provisions of any other law or rule of
law which would otherwise prevent such assessment.''.
(b) Information Reporting.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 (relating to information concerning transactions
with other persons) is amended by inserting after section
6050V the following new section:

``SEC. 6050W. RETURNS RELATING TO PAYMENT OF LOW-INCOME
HOUSING CREDIT REPAYMENT AMOUNT.

``(a) Requirement of Reporting.--Every person who, at any
time during the taxable year, is an owner of a building (or
an interest therein)--
``(1) which is in the compliance period at any time during
such year, and
``(2) with respect to which recapture is required by
section 42(j),

shall, at such time as the Secretary may prescribe, make the
return described in subsection (b).
``(b) Form and Manner of Returns.--A return is described in
this subsection if such return--
``(1) is in such form as the Secretary may prescribe, and
``(2) contains--
``(A) the name, address, and TIN of each person who, with
respect to such building or interest, was formerly an
investor in such owner at any time during the compliance
period,
``(B) the amount (if any) of any credit recapture amount
required under section 42(j), and
``(C) such other information as the Secretary may
prescribe.
``(c) Statements To Be Furnished to Persons With Respect to
Whom Information Is Required.--Every person required to make
a return under subsection (a) shall furnish to each person
whose name is required to be set forth in such return a
written statement showing--
``(1) the name and address of the person required to make
such return and the phone number of the information contact
for such person, and
``(2) the information required to be shown on the return
with respect to such person.

The written statement required under the preceding sentence
shall be furnished on or before March 31 of the year
following the calendar year for which the return under
subsection (a) is required to be made.
``(d) Compliance Period.--For purposes of this section, the
term `compliance period' has the meaning given such term by
section 42(i).''.
(2) Assessable penalties.--
(A) Subparagraph (B) of section 6724(d)(1) (relating to
definitions) is amended by inserting after clause (xxi) the
following new clause:
``(xxii) section 6050W (relating to returns relating to
payment of low-income housing credit repayment amount),''.
(B) Paragraph (2) of section 6724(d) is amended by striking
``or'' at the end of subparagraph (BB), by striking the
period at the end of subparagraph (CC) and inserting ``,
or'', and by adding after subparagraph (CC) the following new
subparagraph:
``(DD) section 6050W (relating to returns relating to
payment of low-income housing credit repayment amount).''.
(3) Clerical amendment.--The table of sections for subpart
B of part III of subchapter A of chapter 61 is amended by
inserting after the item relating to section 6050V the
following new item:

``Sec. 6050W. Returns relating to payment of low-income housing credit
repayment amount.''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply with respect to any liability for the credit recapture
amount under section 42(j) of the Internal Revenue Code of
1986 that arises after the date of the enactment of this Act.
(2) Special rule for low-income housing buildings sold
before date of enactment of this act.--In the case of a
building disposed of before the date of the enactment of this
Act with respect to which the taxpayer posted a bond (or
alternative form of security) under section 42(j) of the
Internal Revenue Code of 1986 (as in effect before such date
of enactment), the taxpayer may elect (by notifying the
Secretary of the Treasury in writing)--
(A) to cease to be subject to the bond requirements under
section 42(j)(6) of such Code, as in effect before such date
of enactment, and
(B) to be subject to the requirements of section 42(j) of
such Code, as amended by this section.

SEC. 832. AFFORDABLE HOUSING CREDIT ALLOWED AGAINST
ALTERNATIVE MINIMUM TAX.

(a) In General.--Subparagraph (B) of section 38(c)(4)
(relating to special rules for specified credits) is amended
by redesignating clauses (ii), (iii), and (iv) as clauses
(iii), (iv), and (v), respectively, and by inserting after
clause (i) the following new clause:
``(ii) the credit determined under section 42(a),''.
(b) Effective Date.--The amendments made by this subsection
shall apply to taxable years beginning after the date of the
enactment of this Act.

Subtitle D--Help Preserve Existing Affordable Housing

SEC. 841. REPEAL OF 10-YEAR RULE FOR ACQUISITION HOUSING
CREDITS.

(a) In General.--Subparagraph (B) of section 42(d)(2)
(relating to existing buildings) is amended by striking
clause (ii) and by redesignating clauses (iii) and (iv) as
clauses (ii) and (iii), respectively.
(b) Conforming Amendment.--Section 42(d) is amended by
striking paragraph (6) and by redesignating paragraph (7) as
paragraph (6).

SEC. 842. MODIFICATION OF RELATED PERSON RULE FOR AFFORDABLE
HOUSING CREDIT.

(a) In General.--Clause (iii) of section 42(d)(2)(D)
(related to related person, etc.) is amended to read as
follows:
``(iii) Related person.--For purposes of subparagraph
(B)(iii), a person (hereinafter in this subclause referred to
as the `related person') is related to any person if the
related person bears a relationship to such person specified
in section 267(b) or 707(b)(1), or the related person and
such person are engaged in trades or businesses under common
control (within the meaning of subsections (a) and (b) of
section 52.''.
(b) Effective Date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.

Subtitle E--Simplify Administration of the Housing Credit Program

SEC. 851. ELIMINATION OF CERTAIN ANNUAL RECERTIFICATIONS OF
TENANT INCOMES.

Paragraph (8) of section 42(g) (relating to qualified low-
income housing project) is amended--
(1) by striking ``may waive'' in the mater preceding
subparagraph (A);
(2) by inserting ``may waive'' before ``any recapture'' in
subparagraph (A); and
(3) by inserting ``shall waive'' before ``any annual
recertification'' in subparagraph (B).

Subtitle F--Conform Multifamily Housing Bond Rules to Housing Credit
Rules

SEC. 861. COORDINATION OF CERTAIN RULES APPLICABLE TO
AFFORDABLE HOUSING CREDIT AND QUALIFIED
RESIDENTIAL RENTAL PROJECT EXEMPT FACILITY
BONDS.

(a) Determination of Next Available Unit.--Paragraph (3) of
section 142(d) (relating to current income determinations) is
amended by adding at the end the following new subparagraph:
``(C) Exception for projects with respect to which
affordable housing credit is allowed.--In the case of a
project with respect to which credit is allowed under section
42, the second sentence of subparagraph (B) shall be applied
by substituting `building (within the meaning of section 42)'
for `project'.''.
(b) Students.--Paragraph (2) of section 142(d) (relating to
definitions and special rules) is amended by adding at the
end the following new subparagraph:
``(C) Students.--Students (as defined in section 152(f)(2))
shall not be treated as satisfying the requirements of
subparagraph (A) or (B) of paragraph (1) except under rules
similar to the rules of 42(i)(3)(D).''.
(c) Single-Room Occupancy Units.--Paragraph (2) of section
142(d) (relating to definitions and special rules), as
amended by this Act, is further amended by adding at the end
the following new subparagraph:
``(D) Single-room occupancy units.--A unit shall not fail
to be treated as a residential unit merely because such unit
is a single-room occupancy unit (within the meaning of
section 42).''.
(d) Effective Date.--The amendments made by this section
shall apply to determinations of the status of qualified
residential rental projects for periods beginning after the
date of the enactment of this Act, with respect to bonds
issued before, on, or after such date.

Subtitle G--Improve the Mortgage Revenue Bond Program

SEC. 871. SPECIAL RULE FOR USE OF MORTGAGE BONDS FOR DISASTER
VICTIMS, SINGLE PARENTS, AND HOMEMAKERS.

(a) In General.--Paragraph (2) of section 143(d) (relating
to exceptions to 3-year requirement) is amended by striking
``and'' at the end of subparagraph (C) and by inserting after
subparagraph (D) the following new subparagraphs:
``(E) financing of residences for individuals with an
ownership interest in a principal residence which--
``(i) is located in an area with respect to which a major
disaster has been declared by the President under section 401
of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act, and
``(ii) has been rendered uninhabitable by reason of the
major disaster,
``(F) financing of residences for individuals who--
``(i) are not married, and
``(ii) have one or more qualifying children (within the
meaning of section 152), and
``(G) financing of residences for displaced homemakers,''.

[[Page S2524]]

(b) Displaced Homemakers.--Section 143(d) is amended by
adding at the end the following new paragraph:
``(4) Displaced homemaker.--For purposes of paragraph
(2)(G), the term `displaced homemaker' means any individual
who is--
``(A) over 18 years of age,
``(B) is not employed or underemployed and is experiencing
difficulty in obtaining or upgrading employment, and
``(C) has not worked full-time full-year in the labor force
for a number of years before the date on which financing for
a residence is supplied, but has, during such years, worked
primarily without remuneration to care for the home and
family.''.
(c) Effective Date.--The amendments made by this section
shall apply to bonds issued after the date of the enactment
of this Act.

SEC. 872. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL
REPAYMENTS ON QUALIFIED MORTGAGE ISSUES TO
REDEEM BONDS.

(a) In General.--Subparagraph (A) of section 143(a)(2)
(relating to qualified mortgage issue defined) is amended by
inserting ``and'' at the end of clause (ii), by striking ``,
and'' at the end of clause (iii) and inserting a period, and
by striking clause (iv) and the last sentence.
(b) Conforming Amendment.--Clause (ii) of section
143(a)(2)(D) is amended by striking ``(and clause (iv) of
subparagraph (A))''.
(c) Effective Date.--The amendments made by this section
shall apply to repayments received after the date of the
enactment of this Act.

Subtitle H--Effective Date

SEC. 881. EFFECTIVE DATE.

Except as otherwise provided in this title, the amendments
made by this title shall apply to--
(1) housing credit dollar amounts allocated after the date
of the enactment of this Act, and
(2) buildings placed in service after such date to the
extent paragraph (1) of section 42(h) of the Internal Revenue
Code of 1986 does not apply to such building by reason of
paragraph (4) thereof, but only with respect to bonds issued
after such date.
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