[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5176 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 5176
To amend the Internal Revenue Code of 1986 to allow for nonrecognition
of gain on real property sold for use as affordable housing.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 8, 2023
Mr. Schiff (for himself and Mr. Peters) 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 for nonrecognition
of gain on real property sold for use as 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 ``Affordable and Homeless Housing
Incentives Act of 2023''.
SEC. 2. NONRECOGNITION OF GAIN ON PROPERTY SOLD FOR USE AS AFFORDABLE
HOUSING.
(a) In General.--Section 1033 of the Internal Revenue Code of 1986
is amended by redesignating subsection (k) as subsection (l) and by
inserting after subsection (j) the following new subsection:
``(k) Sales for Use as Affordable Housing.--
``(1) In general.--For purposes of this subtitle, if real
property is sold or otherwise transferred to a qualified
housing operator for use or development by such operator as
affordable housing and such property meets the requirements of
paragraphs (3) and (4), such sale or transfer shall be treated
as an involuntary conversion to which this section applies.
``(2) Qualified housing operator.--For purposes of this
section, the term `qualified housing operator' means any of the
following:
``(A) A State or local government, or any political
subdivision or instrumentality thereof.
``(B) A tribally designated housing entity (as such
term is defined in section 4 of the Native American
Housing Assistance and Self-Determination Act of 1996).
``(C) A community housing development organization
(as such term is defined in section 104 of the
Cranston-Gonzalez National Affordable Housing Act).
``(D) An organization--
``(i) described in section 501(c) and
exempt from taxation under section 501(a),
``(ii) the purpose of which includes
providing affordable housing, and
``(iii) which--
``(I) has received Federal, State,
or local grant funds to develop or
operate affordable housing, or
``(II) is described in section
42(h)(5)(B) with respect to a qualified
low-income housing project that is
allocated housing credit dollar amounts
under section 42.
``(3) Affordable housing requirement.--The requirements of
this paragraph are met with respect to property if such
property has, as of the date of the sale or transfer referred
to in paragraph (1), a covenant or other binding legal
restriction sufficient to--
``(A) obligate, at all times during the 30-year
period beginning on such date, each owner of such
property with respect to the portion of such period
during which such owner owns such property, to maintain
such property as either--
``(i) residential rental property (within
the meaning of section 168) not less than 75
percent of the units of which are affordable to
low-income families and either occupied by or
available for use by low-income residents, or
``(ii) a shelter eligible for assistance
under title IV of the McKinney-Vento Homeless
Assistance Act, and
``(B) provide any person a right to obtain
injunctive relief to enforce the obligations described
in subparagraph (A).
``(4) Notification of department of housing and urban
development.--The requirements of this paragraph are met with
respect to any property if, not later than 90 days after the
date of the sale or transfer referred to in paragraph (1), the
transferor notifies the Secretary of Housing and Urban
Development of such transfer in such manner as such Secretary
may provide.
``(5) Special rule with respect to period within which
property must be replaced.--In the case of a sale or transfer
described in paragraph (1), subsection (a)(2)(B)(i) shall be
applied by substituting `3 years' for `2 years'.
``(6) Special rule for real property held for productive
use in trade or business.--For purposes of subsection (a), if
the real property described in paragraph (1) is held for
productive use in a trade or business or for investment,
property of a like kind to be held either for productive use in
a trade or business or for investment shall be treated as
property similar or related in service or use to the property
so described.''.
(b) Enforcement Obligations of the Department of Housing and Urban
Development.--With respect to each property with respect to which the
Secretary of Housing and Urban Development receives notification under
paragraph (4) of section 1033(k) of the Internal Revenue Code of 1986,
such Secretary, acting though the Departmental Enforcement Center (DEC)
of the Department of Housing and Urban Development, shall ensure (not
less often than every 5 years during the 30-year period described in
paragraph (3)(A) of such section) that such property complies with the
requirements of such paragraph (3)(A), including if necessary by
obtaining the injunctive relief described in paragraph (3)(B) of such
section.
(c) Effective Date.--The amendment made by this section shall apply
to sales and transfers after the date of the enactment of this Act.
<all>