H.R. 2410

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2410 Introduced in House (IH)]

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119th CONGRESS
1st Session
H. R. 2410

To amend the Internal Revenue Code of 1986 to provide an investment 
credit for converting non-residential buildings to affordable housing.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

March 27, 2025

Mr. Carey (for himself, Mr. Gomez, Mr. Larson of Connecticut, Mr. 
Fitzpatrick, Ms. Sewell, Ms. Tenney, Mr. Beyer, Mr. Kustoff, Ms. Chu, 
Mr. Kelly of Pennsylvania, Mr. Panetta, Mrs. Miller of West Virginia, 
Mr. Davis of Illinois, Mr. Moore of Utah, Mr. Evans of Pennsylvania, 
Ms. Malliotakis, Mr. Suozzi, Mr. Moran, Mr. Boyle of Pennsylvania, Mr. 
LaHood, Ms. Sanchez, Mr. Miller of Ohio, Ms. Moore of Wisconsin, Mr. 
Amodei of Nevada, Mr. Schneider, Mr. Ciscomani, Mr. Horsford, and Ms. 
DelBene) introduced the following bill; which was referred to the 
Committee on Ways and Means

_______________________________________________________________________

A BILL

To amend the Internal Revenue Code of 1986 to provide an investment 
credit for converting non-residential buildings to affordable housing.

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 ``Revitalizing Downtowns and Main 
Streets Act''.

SEC. 2. INVESTMENT CREDIT FOR CONVERSION OF NON-RESIDENTIAL BUILDINGS 
TO AFFORDABLE HOUSING.

(a) In General.--Subpart E of part IV of subchapter A of chapter 1 
of subtitle A of the Internal Revenue Code of 1986 is amended by 
inserting after section 48E the following new section:

``SEC. 48F. AFFORDABLE HOUSING CONVERSION CREDIT.

``(a) Allowance of Credit.--For purposes of section 46, the 
affordable housing conversion credit for any taxable year is an amount 
equal to 20 percent of the qualified conversion expenditures of the 
taxpayer with respect to a qualified affordable housing building placed 
in service by the taxpayer during the taxable year.
``(b) Qualified Conversion Expenditures.--For purposes of this 
section--
``(1) In general.--The term `qualified conversion 
expenditures' means, with respect to any qualified affordable 
housing building, any amount properly chargeable to capital 
account--
``(A) for property for which depreciation is 
allowable under section 168, and
``(B) in connection with the qualified conversion 
of a qualified affordable housing building.
``(2) Certain expenditures not included.--The term 
`qualified conversion expenditures' does not include--
``(A) Limitation on period of conversion.--Except 
as provided in subsection (f), any amount paid or 
incurred other than during the 2-year period ending on 
the date on which the taxpayer places the qualified 
affordable housing building in service.
``(B) Cost of acquisition.--The cost of acquiring 
any building or interest therein.
``(3) Special rule for brownfields.--Paragraph (1)(A) shall 
not apply with respect to any expenditure for clean up of 
qualifying brownfield property (as defined in section 
512(b)(19)).
``(4) Coordination with rehabilitation credit.--In the case 
of any qualified conversion expenditures which are taken into 
account for purposes of determining the rehabilitation credit 
under section 47, the amount of such expenditures taken into 
account under this section (determined without regard to this 
paragraph) shall be reduced by 50 percent.
``(c) Qualified Conversion.--For purposes of this section--
``(1) In general.--The term `qualified conversion' means 
the conversion of an eligible commercial building into a 
qualified affordable housing building if the qualified 
conversion expenditures of the taxpayer with respect to such 
conversion exceed the greater of--
``(A) an amount equal to 50 percent of the adjusted 
basis of such building (determined immediately prior to 
such conversion), or
``(B) $100,000.
``(2) Eligible commercial building.--The term `eligible 
commercial building' means any building which, with respect to 
any conversion--
``(A) was originally placed in service not less 
than 20 years before the date on which such conversion 
begins, and
``(B) immediately prior to such conversion, was 
nonresidential real property (as defined in section 
168).
``(d) Qualified Affordable Housing Building.--For purposes of this 
section--
``(1) In general.--The term `qualified affordable housing 
building' means any residential building if during the 30-year 
period beginning on the date on which such building is placed 
in service by the taxpayer, not less than 20 percent of the 
residential units in the building are both rent-restricted and 
reserved for individuals whose income is 80 percent or less of 
the area median income.
``(2) Rent and income limitation.--For purposes of this 
subsection, rules similar to the rules of subsection (g) of 
section 42 shall apply to determine whether a unit is rent-
restricted, treatment of units occupied by individuals whose 
incomes rise above the limit, and the treatment of units where 
Federal rental assistance is reduced as tenant's income 
increases.
``(e) Limitation on Aggregate Credit Allowable.--
``(1) Credit may not exceed credit amount allocated to 
building.--
``(A) In general.--The amount of the credit 
determined under this section with respect to any 
building shall not exceed the qualified conversion 
credit dollar amount allocated to such building under 
this subsection by the housing credit agency of the 
State in which such building is located.
``(B) Time for making allocation.--Except in the 
case of an allocation which meets the requirements of 
subparagraph (C), an allocation shall be taken into 
account under subparagraph (A) only if it is made not 
later than the close of the calendar year in which the 
building is placed in service.
``(C) Exception where binding commitment.--An 
allocation meets the requirements of this subparagraph 
if there is a binding commitment (not later than the 
close of the calendar year in which the building is 
placed in service) by the housing credit agency to 
allocate a specified housing credit dollar amount to 
such building beginning in a later taxable year.
``(2) State limitation.--
``(A) In general.--The aggregate qualified 
conversion credit dollar amount which a housing credit 
agency of any State may allocate is the sum of--
``(i) the amount which bears the same ratio 
to the national qualified conversion credit 
limitation as--
``(I) the population of such State, 
bears to
``(II) the population of all 
States, plus
``(ii) the sum of any amounts determined 
under subparagraph (C).
``(B) National qualified conversion credit 
limitation.--The national qualified conversion credit 
limitation is $12,000,000,000.
``(C) Additional amounts provided for certain 
buildings in economically distressed areas.--
``(i) In general.--For purposes of 
subparagraph (A)(ii), in any case in which--
``(I) the housing credit agency of 
a State allocates an amount to a 
building which is located in an 
economically distressed area, and
``(II) the Secretary subsequently 
designates such amount for purposes of 
this paragraph,
the amount determined under this paragraph with 
respect to such building shall be the amount 
originally allocated by the housing credit 
agency of the State under clause (i).
``(ii) Limitation.--The aggregate amount 
which the Secretary may designate under clause 
(i)(II) shall not exceed $3,000,000,000.
``(iii) Manner of designation.--Not later 
than 120 days after the date of the enactment 
of this section, the Secretary shall establish 
a program for determining the designation of 
amounts that may be designated under this 
subparagraph.
``(D) Reallocation of certain amounts.--
``(i) In general.--Notwithstanding 
subparagraph (A)--
``(I) no amount may be allocated 
under paragraph (1) by a housing credit 
agency of an undersubscribed State 
after December 31, 2028, and
``(II) the dollar amount determined 
under subparagraph (A) with respect to 
any oversubscribed State after such 
date shall be increased by such State's 
share of the reallocation amount.
``(ii) State share.--For purposes of clause 
(i), an oversubscribed State's share of the 
reallocation amount is the amount which bears 
the same ratio to the reallocation amount as--
``(I) the population of such State, 
bears to
``(II) the population of all 
oversubscribed States.
``(iii) Definitions.--For purposes of this 
subparagraph--
``(I) Undersubscribed state.--The 
term `undersubscribed State' means any 
State that is not an oversubscribed 
State.
``(II) Oversubscribed state.--The 
term `oversubscribed State' means any 
State the housing credit agency of 
which has allocated all of the 
qualified conversion credit dollar 
amount which may be allocated by it 
before the date described in clause 
(i)(I).
``(III) Reallocation amount.--The 
term `reallocation amount' means the 
sum of the amounts described in 
subparagraph (A) which have not been 
allocated by undersubscribed States 
before the date described in clause 
(i)(I).
``(3) Manner of allocation.--
``(A) Plan for allocation.--
``(i) In general.--Notwithstanding any 
other provision of this section, the qualified 
conversion credit dollar amount with respect to 
any building shall be zero unless such amount 
was allocated pursuant to a conversion credit 
allocation plan of the housing credit agency 
which is approved by the governmental unit (in 
accordance with rules similar to the rules of 
section 147(f)(2) (other than subparagraph 
(B)(ii) thereof)) of which such agency is a 
part.
``(ii) Conversion credit allocation plan.--
For purposes of this subparagraph, the term 
`conversion credit allocation plan' means a 
plan--
``(I) which sets selection criteria 
for allocations, taking into account--
``(aa) whether the credit 
is needed to assure the 
financial feasibility of the 
conversion,
``(bb) the extent to which 
the conversion results in the 
creation of affordable housing,
``(cc) the extent to which 
the conversion results in the 
creation of housing near 
transportation, employment, and 
commercial opportunities,
``(dd) the extent to which 
the conversion will support 
small businesses and economic 
revitalization in the 
surrounding area,
``(ee) the degree of local 
government support for the 
conversion, and
``(ff) the readiness of the 
building for a qualified 
conversion, and
``(II) which provides a procedure 
that the agency (or an agent or other 
private contractor of such agency) will 
follow in monitoring for noncompliance 
with the requirements of subsection (d) 
and in notifying the Internal Revenue 
Service of such noncompliance.
``(B) Binding allocation agreements; reporting.--In 
making allocations of qualified conversion credit 
dollar amounts, each housing credit agency shall--
``(i) enter into binding agreements with 
taxpayers for the allocation of qualified 
conversion credit dollar amounts, which 
agreements shall specify the amount of 
qualified conversion credit dollar amount 
allocated to the building and the terms for any 
modifications or withdrawal of such allocation, 
and
``(ii) report to the Secretary, at such 
time and in such manner as the Secretary may 
require, the amount of allocations made with 
respect to any building.
``(C) State extended use requirements permitted 
past 30 years.--For purposes of this paragraph, a 
housing credit agency's plan shall not fail to be 
treated as a conversion credit allocation plan merely 
because it includes, and nothing in this section shall 
be construed to limit a binding allocation agreement 
from including, affordability or rent restriction 
requirements with respect to the building that apply 
for a longer period than the 30-year period described 
in subsections (d) and (g)(1)(B).
``(4) Definitions and other rules.--
``(A) Housing credit agency.--The term `housing 
credit agency' means, with respect to any State, the 
housing credit agency authorized under section 42(h)(8) 
or such other agency as authorized by the State for 
purposes of this section.
``(B) Economically distressed area.--The term 
`economically distressed area' means any area which--
``(i) has been designated as a qualified 
census tract under section 42(d)(5)(B)(ii) or 
as a difficult development area under section 
42(d)(5)(B)(iii), or
``(ii) meets the requirement of section 
301(a)(3) of the Public Works and Economic 
Development Act of 1965.
``(C) State.--The term `State' includes a 
possession of the United States.
``(D) Other rules.--Rules similar to the rules of 
subparagraphs (A) and (B) of section 42(h)(7) shall 
apply for purposes of this section.
``(f) Progress Expenditures.--If the Secretary determines, on the 
basis of architectural plans and specifications that a qualified 
conversion is reasonably expected to exceed 2 years, rules similar to 
the rules of section 47(d) shall apply with respect to such conversion 
for purposes of this section.
``(g) Special Rules for Certain Areas.--
``(1) Qualified census tracts and difficult development 
areas.--In the case of a qualified affordable housing 
building--
``(A) which is located in any area which is 
designated as a qualified census tract under section 
42(d)(5)(B)(ii) or as a difficult development area 
under section 42(d)(5)(B)(iii)), and
``(B) with respect to which during 30-year period 
beginning on the date on which such building is placed 
in service by the taxpayer, not less than 20 percent of 
the residential units in the building are both rent-
restricted and reserved for individuals whose income is 
60 percent or less of the area median income,
subsection (a) shall be applied by substituting `30 percent' 
for `20 percent'.
``(2) Historic preservation in rural areas.--
``(A) In general.--In the case of a qualified 
affordable housing building which is in a rural area 
and is part of an historic preservation project, the 
taxpayer may elect to substitute `35 percent' for `20 
percent' under subsection (a) with respect to such 
portion of the aggregate qualified conversion 
expenditures taken into account under such subsection 
as does not exceed $2,000,000.
``(B) Definitions.--For purposes of this 
paragraph--
``(i) Rural area.--The term `rural area' 
shall have the meaning given such term under 
section 1393(a)(2).
``(ii) Historic preservation project.--The 
term `historic preservation project' means a 
qualified conversion which involves the 
certified rehabilitation of a certified 
historic structure. Whether conversion of a 
certified historic structure involves certified 
rehabilitation shall be determined under rules 
similar to the rules of section 47(c)(2)(C).
``(h) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary or appropriate to carry out the 
purposes of this section, including regulations or other guidance--
``(1) providing for the recapture of the credit determined 
under subsection (a) if the qualified affordable housing 
building ceases to be a qualified affordable housing building 
during the 30-year period beginning on the date that such 
building is placed in service by the taxpayer,
``(2) detailing any certifications required from the 
taxpayer or any housing credit agency of a State,
``(3) with respect to the application of subsection (b)(4),
``(4) with respect to information reporting on allocations 
of qualified conversion credit dollar amounts,
``(5) providing rules for making a determination as to 
whether an area is described in subsection (e)(4)(B), and
``(6) which encourages housing credit agencies to allocate, 
to the extent practicable, qualified conversion credit dollar 
amounts to non-metropolitan counties within a State in 
proportion to the non-metropolitan population of the State, but 
only to the extent it is demonstrated within such non-
metropolitan counties that there are sufficient qualified 
conversion expenditures to warrant such allocations.''.
(b) Transferability of Credit.--Section 6418(f)(1)(A) of such Code 
is amended by adding at the end the following new clause:
``(xii) The affordable housing conversion 
credit determined under section 48F.''.
(c) Conforming Amendments.--
(1) Section 46 of such Code is amended in paragraph (5) by 
striking ``and'' at the end, in paragraph (6) by striking the 
period at the end and inserting ``, and'', and by adding at the 
end the following new paragraph:
``(7) the affordable housing conversion credit.''.
(2) Section 49(a)(1)(C) of such Code is amended by striking 
``and'' at the end of clause (v), in clause (vi) by striking 
the period at the end and inserting ``, and'', and by adding at 
the end the follow new clause:
``(vii) the basis of any property which is 
being converted as part of a qualified 
conversion under section 48F.''.
(3) Section 50(a)(2)(E) of such Code is amended by striking 
``or 48E(e)'' and inserting ``48E(e), or 48F(f)''.
(4) The table of sections for subpart E of part IV of 
subchapter A of chapter 1 of subtitle A of such Code is amended 
by adding at the end the following new item:

``Sec. 48F. Affordable housing conversion credit.''.
(d) Effective Date.--The amendments made by this section shall 
apply to qualified affordable housing buildings (as defined in section 
48F of the Internal Revenue Code of 1986, as added by this section) 
placed in service after the date of the enactment of this Act.
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