H.R. 8988

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8988 Introduced in House (IH)]

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119th CONGRESS
2d Session
H. R. 8988

To amend the Internal Revenue Code of 1986 to allow a business credit 
for gain from the sale of real property for use as a manufactured home 
community, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

May 21, 2026

Ms. Omar (for herself, Mr. Pappas, Ms. Bonamici, Ms. Tlaib, and Mr. 
Khanna) 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 allow a business credit 
for gain from the sale of real property for use as a manufactured home 
community, 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 ``Frank Adelmann Manufactured Housing 
Community Sustainability Act of 2026''.

SEC. 2. FINDINGS.

Congress finds that--
(1) more than 22,000,000 people live in HUD-code 
manufactured homes;
(2) there are approximately 6,700,000 occupied manufactured 
homes in the United States, representing about 6 percent of the 
Nation's housing stock, 9 percent of the single-family housing 
stock, and more than 12 percent of all new single-family homes 
sold in 2021;
(3) owners of manufactured homes are disproportionately 
low-income households, and in 2020, the median annual household 
income for living in manufactured housing was $35,000;
(4) over one-quarter of manufactured homeowners earn less 
than $20,000 annually, and two-thirds earn less than $50,000 
annually;
(5) more than half of all manufactured homes are located in 
rural areas around the country, and manufactured homes make up 
13 percent of all occupied homes in rural and small-town 
communities;
(6) the average sales price of a new manufactured home 
(excluding land) in 2019 was $81,700, and as of December 2023, 
that average sales price had increased to $121,300, an increase 
of 48.5 percent over the preceding 5 years;
(7) despite this sharp increase, the average manufactured 
home costs roughly half the price per square foot of the 
average site-built home;
(8) manufactured home communities provide critical 
affordable housing, but receive very little Federal, State, or 
local funds to subsidize the cost of manufactured homes;
(9) an estimated 43,000 manufactured home communities, also 
referred to as ``mobile home parks'', exist throughout the 
United States;
(10) owners of manufactured homes in such communities may 
own the home, but they do not own the land under the home, 
which leaves the homeowners vulnerable to rent increases, dis-
investment, changes in land use, and community closure;
(11) an eviction or closure of a manufactured home 
community is very disruptive and can be financially devastating 
to a homeowner who may be unable to pay the thousands of 
dollars it takes to move the manufactured home or find a new 
location for the manufactured home;
(12) manufactured housing where the consumer does not own 
the land generally does not promote wealth-building via 
homeownership;
(13) for more than a decade, in an effort to preserve a 
crucial source of affordable housing and aid low-income 
homeowners, a national network of housing providers has helped 
residents purchase and own the land under the manufactured home 
community, and manage the manufactured home community as 
limited equity cooperatives;
(14) nationwide, there are more than 1,000 cooperative 
manufactured home communities, of which more than 360, located 
in more than 20 States, are permanently preserved as affordable 
communities through limited equity cooperative or nonprofit 
ownership;
(15) members of manufactured home community cooperatives 
continue to own such homes individually, own an equal share of 
the land beneath the entire manufactured home community, 
participate in the governing of the community, and elect a 
board of directors who make major decisions within the 
manufactured home community by a democratic vote;
(16) site fee increases in limited equity resident-owned 
communities average just 0.9 percent per year, compared to 5.9 
percent per year in commercially-owned communities;
(17) in New Hampshire, more than 40 percent of manufactured 
home communities are owned by residents;
(18) resident-owned cooperatives and nonprofit owned 
communities have also flourished in Colorado, Vermont, 
Massachusetts, Montana, Rhode Island, Washington, Oregon, and 
Minnesota;
(19) nationwide, only 2.4 percent of all manufactured home 
communities are resident or nonprofit-owned;
(20) 19 States have adopted some protection when a 
community is sold, and 8 States have strong notification and 
resident purchase opportunities, which provide homeowners in 
those States an opportunity to purchase the manufactured home 
community when it is put up for sale; and
(21) in order to preserve manufactured home communities and 
help low-income homeowners live securely, safely, and build 
wealth through homeownership in the future, a Federal tax 
benefit should be established to induce manufactured home 
community owners to sell such properties to the residents when 
those residents or a nonprofit commits to preserving the 
community long-term.

SEC. 3. TAX CREDIT FOR MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR 
NONPROFIT ENTITY.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45BB. MANUFACTURED HOME COMMUNITY SALE TO RESIDENTS OR NONPROFIT 
ENTITY.

``(a) Allowance of Credit.--For purposes of section 38, the 
manufactured home community sale credit determined under this section 
for any taxable year is an amount equal to 75 percent of the qualified 
gain received by the taxpayer during the taxable year.
``(b) Definitions.--For purposes of this section--
``(1) Qualified gain.--The term `qualified gain' means gain 
from the sale or exchange of real property to a qualified 
manufactured home community cooperative or corporation if--
``(A) the real property is acquired for use as a 
manufactured home community,
``(B) the seller (or any related person) owned the 
property for the entire 2-year period ending on the day 
before the sale or exchange, and
``(C) the property is transferred subject to a 
binding covenant that the property will be used as a 
manufactured home community for not less than 50 years 
(or, in the case of a manufactured home community 
located in a State the laws of which restrict such 
covenant to a lesser term, the maximum permissible term 
allowed under such State laws).
``(2) Manufactured home community.--The term `manufactured 
home community' means a community comprised primarily of 
manufactured homes used solely for residential purposes and 
owned by a manufactured home community cooperative or 
corporation.
``(3) Qualified manufactured home community cooperative or 
corporation.--
``(A) In general.--The term `qualified manufactured 
home community cooperative or corporation' means a 
cooperative or a nonprofit corporation established 
pursuant to the laws of the State in which the property 
used as a manufactured home community is located, and 
which--
``(i) in the case of a community owned by a 
nonprofit corporation whose membership 
interests are sold on a nonappreciating basis, 
has only 1 class of membership and such class 
consists solely of residents, and
``(ii) in the case of a community owned by 
a cooperative, has not more than 2 classes of 
membership, and such classes consist solely of 
residents and a tax-exempt organization.
``(B) Governance.--An entity shall not be treated 
as a qualified manufactured home community cooperative 
or corporation unless governance of the entity is 
carried out by members elected to a board of directors 
with voting structured equitably among all members.
``(C) Member.--The term `member' means--
``(i) an individual who--
``(I) has attained the age of 18,
``(II) is entitled to be a member 
by reason of--
``(aa) the membership 
interest of the individual to 
execute an occupancy agreement 
with the manufactured home 
community cooperative nonprofit 
with respect to a site in the 
manufactured home community in 
order to establish a 
manufactured home which is 
owned by the individual, or
``(bb) permission from the 
manufactured community 
cooperative or corporation, the 
member's trust, or other 
entity, and
``(III) is a resident of the 
manufactured home community, and
``(ii) a tax exempt organization.
``(4) Membership interest.--The term `membership interest' 
means--
``(A) an ownership interest in a manufactured home 
community cooperative or corporation, or
``(B) a membership interest in a manufactured home 
community nonprofit corporation.
``(5) Manufactured home.--The term `manufactured home' 
means a structure which is transportable in one or more 
sections, which--
``(A) in traveling mode, is 8 body feet or more in 
width and 40 body feet or more in length, or, when 
erected on site, is 320 square feet or more,
``(B) is built on a permanent chassis and designed 
to be used as a dwelling (with or without a permanent 
foundation when connected to required utilities) and 
includes plumbing, heating, and electrical heating 
systems, and
``(C) in the case of a structure manufactured after 
June 15, 1976, is certified as meeting the Manufactured 
Home Construction and Safety Standards issued under the 
National Manufactured Housing Construction and Safety 
Standards Act of 1974 (42 U.S.C. 5401 et seq.) by the 
Department of Housing and Urban Development and 
displays a label of such certification on the exterior 
of each transportable section.
``(c) Special Rules.--
``(1) Related person.--For purposes of subsection 
(b)(1)(B), a person is related to the seller if--
``(A) such person bears a relationship to the 
seller as specified in section 267(b) or 707(b)(1), or
``(B) such person and the seller are engaged in 
trades or businesses under common control within the 
meanings of subsections (a) and (b) of section 52.
``(2) Election by both seller and buyer.--The credit is 
allowable under this section only if--
``(A) both the seller and the purchaser of the real 
property execute an affidavit representing that the 
sale meets the requirements of subsection (b)(1), and 
the purchaser acknowledges liability for the recapture 
of the credit under subsection (d) in case of any 
violation described in such subsection,
``(B) the purchaser of the real property records 
the affidavit, and
``(C) the affidavit is referenced in the deed to 
the real property.
``(3) Requirement.--The seller shall include a copy of the 
affidavit representing the sale with the return of tax.
``(d) Tax Upon Violation of Covenant.--There is imposed a tax on 
the buyer for a violation of the covenant specified in subsection 
(b)(1)(C). The amount of such tax shall be 20 percent of the net 
proceeds after settlement for the sale or exchange of the real property 
referred to in subsection (b)(1). For purposes of section 501(a), the 
tax imposed by this subsection shall not be treated as a tax imposed by 
this subtitle.
``(e) Regulations.--The Secretary shall issue such regulations or 
other guidance as may be necessary to carry out this section, including 
the recapture under subsection (d).''.
(b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of the Internal Revenue Code of 1986 is amended--
(1) by striking ``plus'' at the end of paragraph (40);
(2) by striking the period at the end of paragraph (41) and 
inserting ``, plus''; and
(3) by adding at the end the following new paragraph:
``(42) the manufactured home community sale credit 
determined under section 45BB(a).''.
(c) Conforming Amendments.--
(1) Subsection (c) of section 196 of the Internal Revenue 
Code of 1986 is amended--
(A) by striking ``and'' at the end of paragraph 
(13);
(B) by striking the period at the end of paragraph 
(14) and inserting ``, and''; and
(C) by adding at the end the following new 
paragraph:
``(15) the manufactured home community sale credit 
determined under section 45BB(a).''.
(2) The table of sections for subpart D of part IV of 
subchapter A of chapter 1 of such the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45BB. Manufactured home community sale to residents or nonprofit 
entity.''.
(d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2026.
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