Bill Summary
This bill, titled the "Save Affordable Housing Act of 2019," aims to amend the Internal Revenue Code of 1986 in regards to the low-income housing credit. The bill proposes to repeal the qualified contract exception, which allows owners of low-income housing projects to sell their tax benefits to investors after 15 years. This repeal would only apply to buildings that received their tax credit allocation before January 1, 2019. The bill also outlines rules for existing projects, stating that the building must be evaluated based on its fair market value and rent restrictions in order to continue meeting the standards for the low-income housing credit. This bill also includes technical amendments to correct language and specifies an effective date for the proposed changes.
Possible Impacts
1. It could affect people who currently live in low-income housing by potentially causing rent increases or loss of their housing altogether if the building's owner chooses to terminate the low-income housing credit and rent out the units at market rate.
2. It could affect developers and investors who have invested in low-income housing projects, as they may no longer be able to receive tax benefits for their investments.
3. It could affect government agencies and officials responsible for overseeing and regulating low-income housing, as they may need to adjust their policies and procedures to comply with the new legislation.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1956 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 1956
To amend the Internal Revenue Code of 1986 to repeal the qualified
contract exception to the extended low-income housing commitment rules
for purposes of the low-income housing credit, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 25, 2019
Mr. Wyden (for himself, Mr. Young, Mr. Cardin, and Mr. Brown)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to repeal the qualified
contract exception to the extended low-income housing commitment rules
for purposes of the low-income housing credit, and for other purposes.
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 ``Save Affordable Housing Act of
2019''.
SEC. 2. REPEAL OF QUALIFIED CONTRACT OPTION.
(a) Termination of Option for Certain Buildings.--
(1) In general.--Subclause (II) of section 42(h)(6)(E)(i)
of the Internal Revenue Code of 1986 is amended by inserting
``in the case of a building described in clause (iii),'' before
``on the last day''.
(2) Buildings described.--Subparagraph (E) of section
42(h)(6) of such Code is amended by adding at the end the
following new clause:
``(iii) Buildings described.--A building
described in this clause is a building--
``(I) which received its allocation
of housing credit dollar amount before
January 1, 2019, or
``(II) in the case of a building
any portion of which is financed as
described in paragraph (4), which
received before January 1, 2019, a
determination from the issuer of the
tax-exempt bonds or the housing credit
agency that the building is eligible to
receive an allocation of housing credit
dollar amount under the rules of
paragraphs (1) and (2) of subsection
(m).''.
(b) Rules Relating to Existing Projects.--Subparagraph (F) of
section 42(h)(6) of the Internal Revenue Code of 1986 is amended by
striking ``the nonlow-income portion'' and all that follows and
inserting ``the nonlow-income portion and the low-income portion of the
building for fair market value (determined by the housing credit agency
by taking into account the rent restrictions required for the low-
income portion of the building to continue to meet the standards of
paragraphs (1) and (2) of subsection (g)). The Secretary shall
prescribe such regulations as may be necessary or appropriate to carry
out this paragraph.''.
(c) Conforming Amendments.--
(1) Paragraph (6) of section 42(h) of the Internal Revenue
Code of 1986 is amended by striking subparagraph (G) and by
redesignating subparagraphs (H), (I), (J), and (K) as
subparagraphs (G), (H), (I), and (J), respectively.
(2) Subclause (II) of section 42(h)(6)(E)(i) of such Code,
as amended by subsection (a), is further amended by striking
``subparagraph (I)'' and inserting ``subparagraph (H)''.
(d) Technical Amendment.--Subparagraph (I) of section 42(h)(6) of
the Internal Revenue Code of 1986, as redesignated by subsection (c),
is amended by striking ``agreement'' and inserting ``commitment''.
(e) Effective Date.--The amendments made by this section shall
apply to buildings with respect to which a written request described in
section 42(h)(6)(H) of the Internal Revenue Code of 1986 is submitted
after the date of the enactment of this Act.
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