[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6900 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 6900
To amend the Internal Revenue Code of 1986 to address the nation's
cost-of-living crisis.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 18, 2025
Mr. Thompson of California (for himself, Mr. Larson of Connecticut, Mr.
Davis of Illinois, Ms. Sanchez, Ms. Sewell, Ms. DelBene, Ms. Chu, Ms.
Moore of Wisconsin, Mr. Boyle of Pennsylvania, Mr. Beyer, Mr. Evans of
Pennsylvania, Mr. Schneider, Mr. Panetta, Mr. Gomez, Mr. Horsford, Ms.
Plaskett, Mr. Suozzi, Mr. Bell, Ms. Craig, Ms. DeLauro, Mr. Garamendi,
Mr. Goldman of New York, Ms. Johnson of Texas, Mr. Kennedy of New York,
Ms. Matsui, Ms. McBride, Ms. McDonald Rivet, Mr. McGarvey, Mr. Mrvan,
Mr. Quigley, Ms. Salinas, Ms. Titus, and Ms. Scholten) introduced the
following bill; which was referred to the Committee on Ways and Means,
and in addition to the Committees on Education and Workforce, and
Energy and Commerce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to address the nation's
cost-of-living crisis.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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(a) Short Title.--This Act may be cited as the ``American
Affordability Act of 2025''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment is expressed in terms of an
amendment to a section or other provision, the reference shall be
considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents of this Act is as
follows:

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Subtitle A--Low-income Housing Credit
Part 1--Reform of State Allocation Formulas

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Part 2--Reforms Relating to Tenant Eligibility

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TITLE I

-HOUSING AND MUNICIPAL INFRASTRUCTURE

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housing protect victims of domestic abuse.

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veterans, etc.
Part 3--Rules Relating to Credit Eligibility and Determination

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properties energy efficient commercial
building deduction.

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Part 4--Reforms Relating to Native American Assistance

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for purposes of certain buildings.
Part 5--Reforms Relating to Rural Assistance

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issues.
Part 7--Reforms Relating to Disabled Veterans

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payments for purposes of low income housing
tax credit and residential rental project
bonds.
Part 8--Reforms Relating to Certain Other Populations

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populations who face unique barriers to
affordable housing.
Part 9--Qualified Contracts and Right of First Refusal

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building purchase.
Subtitle B--Additional Housing Incentives

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Subtitle A--Lowering Costs Through an All-of-the-above Energy Policy

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TITLE II

-LOWERING ENERGY COSTS

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fuel.
Subtitle B--Lowering Costs Through Energy Efficiency

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Subtitle C--Lowering Costs for Electric Vehicles and Charging
Infrastructure

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Subtitle D--Lowering Costs of Clean Infrastructure and Resiliency

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advance payment.
Subtitle B--Child and Dependent Care

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TITLE III

-CHILD AND DEPENDENT CARE

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Subtitle C--Ensuring Affordable Adoptions

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Subtitle A--Ensuring Affordable Higher Education

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TITLE IV

-EDUCATION AND WORKFORCE TRAINING

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for students convicted of a felony drug
offense.

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separately to each spouse.
Subtitle B--Supporting Our Workforce

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TITLE V

-HEALTHCARE

the Advisory Committee on Immunization
Practices.
Subtitle A--Low-income Housing Credit
PART 1--REFORM OF STATE ALLOCATION FORMULAS

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(a) In General.--Clause (ii) of section 42(h)(3)(C) of the Internal
Revenue Code of 1986 is amended--
(1) in subclause (I), by striking ``$1.75'' and inserting
``the per capita amount'', and
(2) in subclause (II), by striking ``$2,000,000'' and
inserting ``the minimum amount''.
(b) Per Capita Amount; Minimum Amount.--Section 42(h)(3) of the
Internal Revenue Code of 1986 is amended by striking subparagraphs (H)
and (I) and inserting the following:
``(H) Per capita amount.--For purposes of
subparagraph (C)(ii)(I), the per capita amount shall be
determined as follows:
``(i) Calendar year 2026.--For calendar
year 2026, the per capita amount is $4.25.
``(ii) Calendar year 2027.--For calendar
year 2027, the per capita amount is the product
of--
``(I) 1.25, and
``(II) the dollar amount under
clause (i) increased by an amount equal
to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) for such
calendar year, determined by
substituting `calendar year
2025' for `calendar year 2016'
in subparagraph (A)(ii)
thereof.
If the amount determined after
application of the preceding sentence
is not a multiple of $5,000, such
amount shall be rounded to the next
lowest multiple of $5,000.
``(iii) Calendar years after 2027.--In the
case of any calendar year after 2027, the per
capita amount is the dollar amount determined
under clause (ii) increased by an amount equal
to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year,
determined by substituting `calendar
year 2026' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any amount increased under the preceding
sentence which is not a multiple of 5 cents
shall be rounded to the next lowest multiple of
5 cents.
``(I) Minimum amount.--For purposes of subparagraph
(C)(ii)(II), the minimum amount shall be determined as
follows:
``(i) Calendar year 2026.--For calendar
year 2026, the minimum amount is $4,876,000.
``(ii) Calendar year 2027.--For calendar
year 2027, the minimum amount is the product
of--
``(I) 1.25, and
``(II) the dollar amount under
clause (i) increased by an amount equal
to--
``(aa) such dollar amount,
multiplied by
``(bb) the cost-of-living
adjustment determined under
section 1(f)(3) for such
calendar year, determined by
substituting `calendar year
2025' for `calendar year 2016'
in subparagraph (A)(ii)
thereof.
If the amount determined after
application of the preceding sentence
is not a multiple of 5 cents, such
amount shall be rounded to the next
lowest multiple of 5 cents.
``(iii) Calendar years after 2027.--In the
case of any calendar year after 2027, the
minimum amount is the dollar amount determined
under clause (ii) increased by an amount equal
to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year,
determined by substituting `calendar
year 2026' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any amount increased under the preceding
sentence which is not a multiple of $5,000
shall be rounded to the next lowest multiple of
$5,000.''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after December 31, 2025.
PART 2--REFORMS RELATING TO TENANT ELIGIBILITY

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(a) In General.--Paragraph (1) of section 142(d) is amended--
(1) by striking ``(A) or (B)'' and inserting ``(A), (B), or
(C)'', and
(2) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Average income test.--A project meets the
requirements of this subparagraph if it meets the
minimum requirements of section 42(g)(1)(C).''.
(b) Effective Date.--The amendments made by this section shall
apply to elections made under section 142(d)(1) of the Internal Revenue
Code of 1986 after March 23, 2018.

b27b51c501a0557dc1020ba4449ab76ed629d00a6481bef5e7f2ac421af70fe9

(a) In General.--Clause (i) of section 42(g)(2)(D) is amended by
striking ``clauses (ii), (iii), and (iv)'' and all that follows and
inserting ``clauses (ii), (iii), (iv), and (vi), notwithstanding an
increase in the income of the occupants above the income limitation
applicable under paragraph (1)--
``(I) a low-income unit shall
continue to be treated as a low-income
unit if the income of such occupants
initially was 60 percent or less of
area median gross income and such unit
continues to be rent-restricted, and
``(II) a unit to which, at the time
of initial occupancy by such occupants,
any Federal, State, or local government
income restriction applied, and which
subsequently becomes part of a building
with respect to which rehabilitation
expenditures are taken into account
under subsection (e), shall be treated
as a low-income unit if the income of
such occupants initially was 60 percent
or less of area median gross income and
does not exceed 120 percent of area
median gross income as of the date of
acquisition of the property by the
taxpayer.''.
(b) Exception.--Subparagraph (D) of section 42(g)(2) is amended by
adding at the end the following new clause:
``(vi) Exception to rule relating to
increased tenant income.--In the case of an
occupant of a low-income unit who initially
qualified to occupy such unit by reason of
paragraph (1)(C) with an income in excess of 60
percent of area median gross income but not in
excess of 80 percent of area median gross
income, clause (i) shall be applied for
substituting `80 percent' for `60 percent' each
place it appears.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.

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(a) In General.--Subparagraph (D) of section 42(i)(3) is amended to
read as follows:
``(D) Rules relating to students.--
``(i) In general.--A unit occupied solely
by individuals who--
``(I) have not attained age 24, and
``(II) are enrolled in a full-time
course of study at an institution of
higher education (as defined in section
3304(f)),
shall not be treated as a low-income unit.
``(ii) Exception for certain federal
programs.--In the case of a federally-assisted
building (as defined in subsection
(d)(6)(C)(i)), clause (i) shall not apply to a
unit all of the occupants of which meet all
applicable requirements under the housing
program described in such subsection through
which the building is assisted, financed, or
operated.
``(iii) Other exceptions.--An individual
shall not be treated as described in clause (i)
if the individual meets the income limitation
applicable under subsection (g)(1) to the
project of which the building is a part and--
``(I) is married,
``(II) is a person with
disabilities (as defined in section
3(b)(3)(E) of the United States Housing
Act of 1937),
``(III) is a veteran (as defined in
section 101(2) of title 38, United
States Code),
``(IV) has 1 or more qualifying
children (as defined in section
152(c)),
``(V) is or has been a victim or
threatened victim of domestic violence,
dating violence, sexual assault, or
stalking (as defined in section 40002
of the Violence Against Women Act of
1994),
``(VI) is or has been a victim of
any form of human trafficking, or
``(VII) is, or was prior to
attaining the age of majority--
``(aa) an emancipated minor
or in legal guardianship as
determined by a court of
competent jurisdiction in the
individual's State of legal
residence,
``(bb) under the care and
placement responsibility of the
State agency responsible for
administering a plan under part
B or part E of title IV of the
Social Security Act, or
``(cc) an unaccompanied
youth (within the meaning of
section 725(6) of the McKinney-
Vento Homeless Assistance Act
(42 U.S.C. 11434a(6))) or a
homeless child or youth (within
the meaning of section 725(2)
of such Act (42 U.S.C.
11434a(2))).
For purposes of subclause (VI), an
individual is or has been a victim of
human trafficking if such individual
was subjected to an act or practice
described in paragraph (11) or (12) of
section 103 of the Trafficking Victims
Protection Act of 2000.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.

3dd66c9dafaf3b977baa6684f12c8c69a438b248554a68405ff8736cc9a63b99

CERTAIN PURPOSES.
(a) In General.--Subparagraph (B) of section 42(g)(2) is amended by
adding at the end the following new sentence: ``In the case of a
project with respect to which the taxpayer elects the requirements of
subparagraph (C) of paragraph (1), or the portion of a project to which
subsection (d)(5)(C) applies, clause (i) shall not apply with respect
to any tenant-based assistance (as defined in section 8(f)(7) of the
United States Housing Act of 1937 (42 U.S.C. 1437f(f)(7))).''.
(b) Effective Date.--The amendments made by this section shall
apply to rent paid in taxable years beginning after December 31, 2025.

e1a0f8ff0a7f7cf9176732cf01849c8adb47d7d04ed91115d36667ccc7b4f956

HOUSING PROTECT VICTIMS OF DOMESTIC ABUSE.
(a) In General.--Subparagraph (B) of section 42(h)(6) is amended by
striking ``and'' at the end of clause (v), by striking the period at
the end of clause (vi) and inserting ``, and'', and by adding at the
end the following new clause:
``(vii) which--
``(I) prohibits the refusal to
lease to, or termination of a lease by,
a person solely on the basis of
criminal activity directly relating to
domestic violence, dating violence,
sexual assault, or stalking that is
engaged in by a member of the household
of the tenant or any guest or other
person under the control of the tenant,
if the tenant or an affiliated
individual of the tenant is the victim
or threatened victim of such domestic
violence, dating violence, sexual
assault, or stalking, and
``(II) allows prospective, present,
or former occupants of the building the
right to enforce in any State court the
prohibition of subclause (I).''.
(b) Bifurcation.--
(1) In general.--Subparagraph (B) of section 42(h)(6), as
amended by subsection (a), is further amended by adding at the
end the following new flush sentence:
``For purposes of clause (vii)(I), rules similar to the
rules of section 41411(b)(3)(B) of the Violence Against
Women Act of 1994 shall apply with respect to the owner
or manager of a building.''.
(2) Effect of bifurcation.--Paragraph (2) of section 42(g)
is amended by adding at the end the following new subparagraph:
``(F) Treatment of bifurcation in cases of domestic
violence.--In any case in which--
``(i) an occupant is evicted or removed
from a low-income unit because such occupant
has engaged in criminal activity directly
relating to domestic violence, dating violence,
sexual assault, or stalking against an
affiliated individual or other individual on
the basis of criminal activity directly
relating to domestic violence, dating violence,
sexual assault, or stalking, and
``(ii) the lease on such unit is bifurcated
as provided in the last sentence of subsection
(h)(6)(B),
then the remaining occupants of such low-income unit
shall not be treated as a new tenant for purposes of
this section.''.
(c) Clarification of General Public Use Requirement.--Paragraph (9)
of section 42(g) is amended by striking ``or'' at the end of
subparagraph (B), by striking the period at the end of subparagraph (C)
and inserting ``, or'', and by adding at the end the following new
subparagraph:
``(D) who are victims or threatened victims of
criminal activity directly relating to domestic
violence, dating violence, sexual assault, or
stalking.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to agreements
executed or modified on or after the date that is 30 days after
the date of the enactment of this Act.
(2) Public use requirement.--The amendments made by
subsection (c) shall apply to buildings placed in service
before, on, or after the date of the enactment of this Act.

5a08c4f25fdaeb15c3745d8999d8cf64ea1aae481062eaca887e88d9e172e1f3

VETERANS, ETC.
(a) In General.--Paragraph (9) of section 42(g), as amended by
section 11205, is further amended by adding at the end the following
flush language:
``Any veteran of the Armed Forces shall be treated as a member
of a specified group under a Federal program for purposes of
subparagraph (B).''.
(b) Qualified Residential Rental Projects.--Paragraph (2) of
section 142(d) is amended by adding at the end the following new
subparagraph:
``(F) Clarification of general public use
requirement.--A unit shall not fail to meet the general
public use requirement solely because of occupancy
restrictions or preferences, if such restrictions or
preferences meet the general public use requirement of
section 42.''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a) shall
apply to buildings placed in service before, on, or after the
date of the enactment of this Act.
(2) Qualified residential rental projects.--The amendment
made by subsection (b) shall apply to bonds issued before, on,
or after the date of the enactment of this Act.
PART 3--RULES RELATING TO CREDIT ELIGIBILITY AND DETERMINATION

e306d37c690bdc966fb3e7b3d13560d5caf771fbf260eb943e72e2d275eef399

(a) No Recapture Following Casualty Loss.--Subparagraph (E) of
section 42(j)(4) is amended to read as follows:
``(E) No recapture by reason of casualty loss.--
``(i) In general.--The increase in tax
under this subsection shall not apply to a
reduction in qualified basis by reason of a
casualty loss to the extent such loss is
restored by reconstruction or replacement
within a reasonable period established by the
applicable housing credit agency, not to exceed
25 months from the date on which the qualified
casualty loss arises.
``(ii) Qualified casualty losses.--In the
case of a qualified casualty loss, the period
described in clause (i) may be extended, but
not in excess of 12 months, if the applicable
housing credit agency determines the qualified
casualty arose by reason of an event which was
not discrete to the building and which made a
reconstruction or replacement within 25 months
impractical. In the event the applicable
housing credit agency determines a period in
excess of 25 months is necessary for such
reconstruction or replacement, the compliance
period shall be increased by any such
additional time.
``(iii) Application.--The determination
under paragraph (1) shall not be made with
respect to a property the basis of which is
affected by a qualified casualty loss until the
period described in clause (i) (as modified by
clause (ii), if applicable) with respect to
such property has expired.
``(iv) Qualified casualty loss.--For
purposes of this subparagraph, the term
`qualified casualty loss' means a casualty loss
that is the result of a federally declared
disaster (as defined in section 165(i)(5)).''.
(b) Qualified Basis Following Casualty Loss.--Paragraph (1) of
section 42(c) is amended by adding at the end the following new
subparagraph:
``(F) Qualified basis following casualty loss.--If
a casualty causes the qualified basis of a building in
any year to be less than the qualified basis in the
immediately preceding year then, in the year of such
casualty and each succeeding year until such building
or the units affected by the casualty are reconstructed
or replaced (but only through the last year of the
period permitted for reconstruction or replacement
under subsection (j)(4)(E))--
``(i) the qualified basis of such building
shall be equal to the qualified basis of such
building as of the last day of the year
preceding the year in which such casualty
occurred,
``(ii) if such building is not
reconstructed or replaced by the expiration of
the applicable period for such reconstruction
or replacement under subsection (j)(4), then
the recapture amount provided for in subsection
(j)(1) shall include the amount of any credit
claimed under this section by reason of the
application of clause (i), and
``(iii) a building which was a qualified
low-income building as of the last day of the
year preceding the year in which such casualty
occurred shall not cease to be a qualified low-
income building solely because of such
casualty.''.
(c) Effective Date.--The amendments made by this section shall
apply to casualties occurring after December 31, 2025.

238277245c401182657a0189b806c3f67b9144417dbf1f3a33303f56ed616b5e

ACQUISITION BASIS.
(a) In General.--Clause (ii) of section 42(d)(2)(B) is amended by
inserting ``, or the taxpayer elects the application of subparagraph
(C)(ii)'' after ``service''.
(b) Limitation on Acquisition Basis.--Subparagraph (C) of section
42(d)(2) is amended--
(1) by striking ``For purposes of subparagraph (A), the
adjusted basis'' and inserting ``For purposes of subparagraph
(A)--
``(i) In general.--The adjusted basis'',
and
(2) by adding at the end the following new clauses:
``(ii) Buildings in service within previous
10 years.--If the period between the date of
acquisition of the building by the taxpayer and
the date the building was last placed in
service is less than 10 years, the taxpayer's
basis attributable to the acquisition of the
building which is taken into account in
determining the adjusted basis shall not exceed
the sum of--
``(I) the lowest amount paid for
acquisition of the building by any
person during the 10 years preceding
the date of the acquisition of the
building by the taxpayer, adjusted as
provided in clause (iii), and
``(II) the value of any capital
improvements made by the person who
sells the building to the taxpayer
which are reflected in such seller's
basis.
``(iii) Adjustment.--With respect to a
basis determination made in any taxable year,
the amount described in clause (ii)(I) shall be
increased by an amount equal to--
``(I) such amount, multiplied by
``(II) a cost-of-living adjustment,
determined in the same manner as under
section 1(f)(3) for the calendar year
in which the taxable year begins by
taking into account the acquisition
year in lieu of calendar year 1992.
For purposes of the preceding sentence, the
acquisition year is the calendar year in which
the lowest amount referenced in clause (ii)(I)
was paid for the acquisition of the
building.''.
(c) Conforming Amendments.--Clause (i) of section 42(d)(2)(D) is
amended--
(1) by striking ``for subparagraph (b)'' in the heading,
and
(2) by striking ``subparagraph (B)(ii)'' in the matter
preceding subclause (I) and inserting ``subparagraph (B)(ii) or
(C)(ii)''.
(d) Modification of Placed in Service Rule.--Clause (iii) of
section 42(d)(2)(B) is amended to read as follows:
``(iii) the building was not owned by the
taxpayer or by any person related (as of the
date of acquisition by the taxpayer) to the
taxpayer at any time during the 5-year period
ending on the date of acquisition by the
taxpayer, and''.
(e) Effective Date.--The amendments made by this section shall
apply to buildings placed in service after December 31, 2025.

3fc0053699b5ca31c5e20a138e3298e2ed508b3c882b9c1df60eb70ed1177af3

REHABILITATION EXPENDITURES.
(a) In General.--Paragraph (2) of section 42(e) is amended by
adding at the end the following new subparagraph:
``(C) Certain relocation costs.--In the case of a
rehabilitation of a building to which section 280B does
not apply, costs relating to the relocation of
occupants, including--
``(i) amounts paid to occupants,
``(ii) amounts paid to third parties for
services relating to such relocation, and
``(iii) amounts paid for temporary housing
for occupants,
shall be treated as chargeable to capital account and
taken into account as rehabilitation expenditures.''.
(b) Effective Date.--The amendment made by this section shall apply
to expenditures paid or incurred after December 31, 2025.
(c) No Inference.--Nothing in the amendment made by this section
shall be construed to create any inference with respect to the
treatment of relocation costs paid or incurred before January 1, 2026.

00a37c04916034df983f8cd0bfb9a48886f87ad48e78566773dad4c2ca3a54f2

(a) In General.--Clause (ii) of section 42(d)(5)(B) is amended--
(1) by striking subclauses (II) and (III), and
(2) by striking ``Qualified census tract.--
``(I) In general.--The term'',
and inserting ``Qualified census tract.--The term''.
(b) Effective Date.--The amendments made by this section shall
apply to designations of qualified census tracts under section
42(d)(5)(B)(ii) of the Internal Revenue Code of 1986 after December 31,
2025.

d0c0efc79e52dd648cb27ddea1175ea4fece5904fa6d28d058dfb81c3507c935

BY HOUSING CREDIT AGENCY.
(a) In General.--Subclause (III) of section 42(m)(1)(B)(ii) is
amended by inserting ``, as determined by the housing credit agency
according to criteria established by such agency,'' after
``(d)(5)(B)(ii)) and''.
(b) Criteria.--Paragraph (1) of section 42(m) is amended by adding
at the end the following new subparagraph:
``(E) Criteria for determination relating to
concerted community revitalization plan.--For purposes
of subparagraph (B)(ii)(III), the criteria which shall
be established by a housing credit agency for
determining whether the development of a project
contributes to a concerted community development plan
shall take into account any factors the agency deems
appropriate, including the extent to which the proposed
plan--
``(i) is geographically specific,
``(ii) outlines a clear plan for
implementation and goals for outcomes,
``(iii) includes a strategy for applying
for or obtaining commitments of public or
private investment (or both) in nonhousing
infrastructure, amenities, or services, and
``(iv) demonstrates the need for community
revitalization.''.
(c) Effective Date.--The amendments made by this section shall
apply to allocations of housing credit dollar amounts made under
qualified allocation plans (as defined in section 42(m)(1)(B) of the
Internal Revenue Code of 1986) adopted after December 31, 2025.

76625c3bdfb6cdb0fb581e2c367fe8927a0991c810b81afa5087dc3cdfccf953

REQUIREMENTS.
(a) In General.--Paragraph (1) of section 42(m), as amended by
section 11305, is further amended--
(1) by striking clause (ii) of subparagraph (A) and by
redesignating clauses (iii) and (iv) thereof as clauses (ii)
and (iii), and
(2) by adding at the end the following new subparagraph:
``(F) Local approval or contribution not taken into
account.--The selection criteria under a qualified
allocation plan shall not include consideration of--
``(i) any support or opposition with
respect to the project from local or elected
officials, or
``(ii) any local government contribution to
the project, except to the extent such
contribution is taken into account as part of a
broader consideration of the project's ability
to leverage outside funding sources, and is not
prioritized over any other source of outside
funding.''.
(b) Effective Date.--The amendments made by this section shall
apply to allocations of housing credit dollar amounts made under
qualified allocation plans (as defined in section 42(m)(1)(B) of the
Internal Revenue Code of 1986) adopted after December 31, 2025.

03fca6065d4798c806fa75de96d8090e87fe50d2e07c737f8bdd7b3df62a05bb

EXTREMELY LOW-INCOME HOUSEHOLDS.
(a) In General.--Paragraph (5) of section 42(d) is amended by
adding at the end the following new subparagraph:
``(C) Increase in credit for projects designated to
serve extremely low-income households.--In the case of
any building--
``(i) 20 percent or more of the residential
units (determined as if the imputed income
limitation applicable to such units were 30
percent of area median gross income) in which
are designated by the taxpayer for occupancy by
households the aggregate household income of
which does not exceed the greater of--
``(I) 30 percent of area median
gross income, or
``(II) 100 percent of an amount
equal to the Federal poverty line
(within the meaning of section
36B(d)(3)), and
``(ii) which is designated by the housing
credit agency as requiring the increase in
credit under this subparagraph in order for
such building to be financially feasible as
part of a qualified low-income housing project,
subparagraph (B) shall not apply to the portion of such
building which is comprised of such units (determined
in a manner similar to the unit fraction under
subsection (c)(1)(C)), and the eligible basis of such
portion of the building shall be 150 percent of such
basis determined without regard to this
subparagraph.''.
(b) Effective Date.--The amendment made by this section shall apply
to buildings which receive allocations of housing credit dollar amount
after the date of enactment of this Act, or in the case of buildings
that are described in section 42(h)(4)(B) of the Internal Revenue Code
of 1986, for obligations that are part of an issue the issue date of
which is after December 31, 2025.

e3fcc17b2741eb0a47cdfbf4b2dd255d99a82b87c3b43723edff6239a298fdaf

STATE AGENCY.
(a) In General.--Clause (v) of section 42(d)(5)(B) is amended by
striking the second sentence.
(b) Technical Amendment.--Clause (v) of section 42(d)(5)(B), as
amended by subsection (a), is further amended--
(1) by striking ``State'' in the heading, and
(2) by striking ``State housing credit agency'' and
inserting ``housing credit agency''.
(c) Effective Date.--The amendments made by this section shall
apply to buildings that are described in section 42(h)(4)(B) of the
Internal Revenue Code of 1986, taking into account only obligations
that are part of an issue the issue date of which is after December 31,
2025.

ecf79c7173a098c42a1d10b2cb82a8b45d84f0e5d55426b1df1e6f9a5b506d4b

PROPERTIES ENERGY EFFICIENT COMMERCIAL BUILDING
DEDUCTION.
(a) Energy Efficient Commercial Buildings Deduction.--Subsection
(e) of section 179D is amended--
(1) by striking ``Reduction.--For purposes'' and inserting
``Reduction.--
``(1) In general.--For purposes'', and
(2) by adding at the end the following new paragraph:
``(2) Exception for affordable housing properties.--
Paragraph (1) shall not apply for purposes of determining
eligible basis under section 42.''.
(b) Effective Date.--The amendments made by this section shall
apply to buildings which receive allocations of housing credit dollar
amount after the date of the enactment of this Act and to buildings
that are described in section 42(h)(4)(B) of the Internal Revenue Code
of 1986 taking into account only obligations that are part of an issue
the issue date of which is after December 31, 2025.

bb3a5c4f217a15ed63a6a73f69a1ddb42e1892689515170fbb1ec6dd8d5506f2

(a) In General.--Subclause (I) of section 42(h)(6)(E)(i) is amended
to read as follows:
``(I) on the 61st day after the
taxpayer (or a successor in interest)
provides notice to the Secretary and
the housing credit agency that the
building has been acquired by
foreclosure (or instrument in lieu of
foreclosure) and that the taxpayer
intends the termination of such period,
unless, before such date, the Secretary
or the housing credit agency determines
that such acquisition is part of an
arrangement with the taxpayer a purpose
of which is to terminate such period,
or''.
(b) Conforming Amendment.--The second sentence of clause (i) of
section 42(h)(6)(E) is amended by striking ``Subclause (II)'' and
inserting ``Subclauses (I) and (II)''.
(c) Effective Date.--The amendments made by this section shall
apply to acquisitions by foreclosure (or instrument in lieu of
foreclosure) after December 31, 2025.

f52ec74bd963c280db7b2ccb17ffdc06c6e249270bf9a7ab030d976c2450bb6c

(a) In General.--Subclause (II) of section 42(d)(5)(B)(iii) is
amended by striking ``20 percent'' and inserting ``30 percent''.
(b) Effective Date.--The amendment made by this section shall apply
to designations made under section 42(d)(5)(B)(iii) of the Internal
Revenue Code of 1986 after December 31, 2025.

646856c1235d69dd03d262c20f34065e4a3774590bdc6cd25522b5115b74b173

(a) In General.--Subparagraph (C) of section 42(m)(1) is amended by
striking ``and'' at the end of clause (ix), by striking the period at
the end of clause (x) and inserting ``, and'', and by adding at the end
the following new clause:
``(xi) the reasonableness of the
development costs of the project.''.
(b) Effective Date.--The amendments made by this section shall
apply to allocations of credits under section 42 of the Internal
Revenue Code of 1986 made after December 31, 2025.
PART 4--REFORMS RELATING TO NATIVE AMERICAN ASSISTANCE

0e65cd7309a0b6ece05f5920165b14bff1b4d1a38eede08b0864df66fb62b584

(a) In General.--Subparagraph (C) of section 42(m)(1), as amended
by section 11312, is further amended by striking ``and'' at the end of
clause (x), by striking the period at the end of clause (xi) and
inserting ``, and'', and by adding at the end the following new clause:
``(xii) the affordable housing needs of
individuals in the State who are--
``(I) enrolled members of a tribe
with respect to an Indian tribal
government (including any agencies or
instrumentalities of an Indian tribal
government and any Alaska Native
regional or village corporation, as
defined in, or established pursuant to,
the Alaska Native Claims Settlement Act
(43 U.S.C. 1601 et seq.)), or
``(II) described in section 801(9)
of the Native American Housing
Assistance and Self-Determination Act
of 1996 (25 U.S.C. 4221(9)).''.
(b) Effective Date.--The amendments made by this section shall
apply to allocations of credits under section 42 of the Internal
Revenue Code of 1986 made after December 31, 2025.

39cbe4c0fabdc40a391a51ee424b928a54c6d122dbdccd6ca695748dda711ad5

FOR PURPOSES OF CERTAIN BUILDINGS.
(a) In General.--Subclause (I) of section 42(d)(5)(B)(iii) is
amended by inserting before the period the following: ``, and any
Indian area''.
(b) Indian Area.--Clause (iii) of section 42(d)(5)(B) is amended by
redesignating subclause (II) as subclause (III) and by inserting after
subclause (I) the following new subclause:
``(II) Indian area.--For purposes
of subclause (I), the term `Indian
area' means any Indian area (as defined
in section 4(11) of the Native American
Housing Assistance and Self
Determination Act of 1996 (25 U.S.C.
4103(11))) and any housing area (as
defined in section 801(5) of such Act
(25 U.S.C. 4221(5))).''.
(c) Eligible Buildings.--Clause (iii) of section 42(d)(5)(B), as
amended by subsection (b), is further amended by adding at the end the
following new subclause:
``(IV) Special rule for buildings
in indian areas.--In the case of an
area which is a difficult development
area solely because it is an Indian
area, a building shall not be treated
as located in such area unless such
building is assisted or financed under
the Native American Housing Assistance
and Self Determination Act of 1996 (25
U.S.C. 4101 et seq.) or the project
sponsor is an Indian tribe (as defined
in section 45A(c)(6)), a tribally
designated housing entity (as defined
in section 4(22) of such Act (25 U.S.C.
4103(22))), or wholly owned or
controlled by such an Indian tribe or
tribally designated housing entity.''.
(d) Effective Date.--The amendments made by this section shall
apply to buildings placed in service after December 31, 2025.
PART 5--REFORMS RELATING TO RURAL ASSISTANCE

17e9043f1aa258353bc9ba959244683ec737f35072965f340201451dc556e12d

(a) In General.--Subclause (I) of section 42(d)(5)(B)(iii), as
amended by section 11402, is further amended by inserting ``, any rural
area'' after ``median gross income''.
(b) Rural Area.--Clause (iii) of section 42(d)(5)(B), as amended by
section 11402, is further amended by redesignating subclause (III) as
subclause (IV) and by inserting after subclause (II) the following new
subclause:
``(III) Rural area.--For purposes
of subclause (I), the term `rural area'
means any non-metropolitan area, or any
rural area as defined by section 520 of
the Housing Act of 1949, which is
identified by the qualified allocation
plan under subsection (m)(1)(B).''.
(c) Effective Date.--The amendments made by this section shall
apply to buildings placed in service after December 31, 2025.

4f7076a159bff26db6cc80a37e521cc21375409a7e06b268efbf51c418493b86

(a) In General.--Paragraph (8) of section 42(i) is amended by
striking the second sentence.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2025.
PART 6--EXEMPT FACILITY BONDS

737812404c14be12b64836e838b883f3932620c662444e973b787ffe5caa48a3

ISSUES.
(a) In General.--Subparagraph (A) of section 146(i)(6) is amended
to read as follows:
``(A) In general.--During the 12-month period
beginning on the date of a repayment of a loan financed
by an issue 95 percent or more of the net proceeds of
which are used to provide projects described in section
142(d), if such repayment is used to provide a new loan
for any project described in section 142(a)(7) or for
any purpose described in subsection (a)(2)(A) or (b) of
section 143, any bond which is issued to refinance such
issue shall be treated as a refunding issue. Any issue
treated as a refunding issue by reason of the preceding
sentence shall be so treated only to the extent the
principal amount of such refunding issue does not
exceed the principal amount of the bonds refunded.''.
(b) Removal of One-Refunding Limit.--Subparagraph (B) of section
146(i)(6) is amended--
(1) by striking ``4 years'' in clause (i) and inserting
``10 years'',
(2) by striking ``was issued'' in clause (ii) and inserting
``is issued'',
(3) by redesignating clauses (i) (as so amended), (ii) (as
so amended), and (iii) as subclauses (I), (II), and (III),
respectively, and by moving such subclauses 2 ems to the right,
(4) by striking ``Limitations.--Subparagraph (A) shall
apply to only one refunding of the original issue and'' and
inserting ``Limitations.--
``(i) In general.--Subparagraph (A) shall
apply to a bond'', and
(5) by adding at the end the following new clause:
``(ii) Source of loan repayment.--
Subparagraph (A) shall not apply to any
repayment of a loan which is--
``(I) made by a repayment of
another loan, or
``(II) financed by an issue treated
as a refunding issue under subparagraph
(A).''.
(c) Conforming Amendment.--The heading of paragraph (6) of section
146(i) is amended by striking ``residential rental project bonds as
refunding bonds irrespective of obligor'' and inserting ``bonds as
refunding bonds''.
(d) Effective Dates.--
(1) In general.--The amendments made by subsections (a) and
(c) shall apply to refunding issues described in section
146(i)(6)(A) of the Internal Revenue Code of 1986 issued on or
after the date of the enactment of this Act.
(2) Removal of one-refunding limit.--The amendments made by
subsection (b) shall apply to repayments of loans received
after July 30, 2008.
PART 7--REFORMS RELATING TO DISABLED VETERANS

e40517466ae76546ffb07ed211c069c1729589de3cbd340a52eb404d747b79cb

PAYMENTS FOR PURPOSES OF LOW INCOME HOUSING TAX CREDIT
AND RESIDENTIAL RENTAL PROJECT BONDS.
(a) In General.--Section 142(d)(2)(B) is amended by adding at the
end the following new clause:
``(v) Veteran disability compensation or
pension.--For purposes of determining income
under this subparagraph, payments of disability
compensation or pension under chapter 11 or 15
of title 38, United States Code, shall be
disregarded.''.
(b) Effective Date.--The amendments made by this section shall
apply to determinations made after the date of the enactment of this
Act.
PART 8--REFORMS RELATING TO CERTAIN OTHER POPULATIONS

a708570d21854b4e851931e45a448e2bfec57a6d24a5983e12dbdef35e37c6e0

POPULATIONS WHO FACE UNIQUE BARRIERS TO AFFORDABLE
HOUSING.
(a) In General.--Section 42 of the Internal Revenue Code of 1986 is
amended by redesignating subsection (n) as subsection (o) and by
inserting after subsection (m) the following new subsection:
``(n) Additional Allocation for Units for Certain Populations Who
Face Unique Barriers to Affordable Housing.--
``(1) In general.--A housing credit agency may allocate, in
any calendar year, an amount equal to 5 percent of the amount
such housing credit agency may allocate under subsection
(h)(3)(C) to projects which contain a unit described in
paragraph (2).
``(2) Unit described.--A unit is described in this
paragraph if--
``(A) such unit is part of a low-income housing
project,
``(B) the housing credit agency and the owner of
such unit, not later than the first day of the second
year of the credit period of such project, execute a
compliance agreement,
``(C) the taxpayer prioritizes populations who face
unique barriers to affordable housing for occupancy of
such units, and
``(D) the taxpayer, in consultation with covered
service providers, makes available to any resident of
such unit appropriate supportive services during the
compliance period.
``(3) Compliance agreement.--For purposes of paragraph
(2)(B), the term `compliance agreement' means an agreement
which--
``(A) requires the owner of a unit to submit to the
housing credit agency for approval a supportive service
plan for each calendar year during the compliance
period,
``(B) requires the approval of the housing credit
agency with respect to any agreement between such owner
and any covered service provider relating to services
provided pursuant to this subsection, and
``(C) allows the housing credit agency to monitor
compliance with such agreement and with the
requirements of this subsection.
``(4) Populations who face unique barriers to affordable
housing.--For purposes of this subsection, the term
`populations who face unique barriers to affordable housing'
means individuals who are--
``(A) formerly justice-involved individuals,
``(B) current or former foster youths, or
``(C) kinship caregivers.
``(5) Covered service provider.--For purposes of this
subsection, the term `covered service provider' means any
entity with demonstrated experience providing supportive
services to populations who face unique barriers to affordable
housing.
``(6) Formerly justice-involved individual.--For purposes
of this paragraph, the term `formerly justice-involved
individual' means an individual who faces barriers to obtaining
housing as a result of being arrested, charged, or convicted of
any criminal offense.
``(7) Current or former foster youth.--The term `current or
former foster youth' means an individual who was eligible at
any time to receive services under section 477(a) of the Social
Security Act.
``(8) Not included in aggregate housing credit dollar
amount.--An amount allocated under paragraph (1) shall not be
included in the aggregate housing credit dollar amount for any
calendar year of the State which made such allocation.
``(9) Enforcement.--The Secretary shall, in consultation
with housing credit agencies, establish such mechanisms
(including penalties) as the Secretary determines appropriate
to ensure that--
``(A) each unit with respect to which a credit is
allowed under paragraph (1) meets the requirements
described in paragraph (2), and
``(B) each housing credit agency which makes an
allocation under paragraph (1) is taking appropriate
steps to enforce each compliance agreement to which
such housing credit agency is a party under paragraph
(3).''.
(b) Allocations Allowed in Addition to State Ceiling.--Section
42(h)(1) of such Code is amended by striking ``the housing credit
dollar amount allocated to such building under this subsection'' and
inserting ``the sum of the housing credit dollar amounts allocated to
such building under this subsection and subsection (n)''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar years beginning after 2026.
PART 9--QUALIFIED CONTRACTS AND RIGHT OF FIRST REFUSAL

619f3c3737eaf5b332251b5dd044ed0b2ec67fa0e795d2bba64b819cf5ecff18

(a) Termination of Option for Certain Buildings.--
(1) In general.--Subclause (II) of section 42(h)(6)(E)(i)
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) 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, 2026, or
``(II) in the case of a building
any portion of which is financed as
described in paragraph (4), and which
received before January 1, 2026, under
the rules of paragraphs (1) and (2) of
subsection (m), a determination from
the issuer of the tax-exempt bonds or
the housing credit agency that the
building would be eligible under the
qualified allocation plan to receive an
allocation of housing credit dollar
amount or that the credits to be earned
are necessary for financial feasibility
of the project and its viability as a
qualified low-income housing project
throughout the credit period.''.
(b) Rules Relating to Existing Projects.--Subparagraph (F) of
section 42(h)(6) 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) 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) is amended by
striking ``subparagraph (I)'' and inserting ``subparagraph
(H)''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Subsection (b).--The amendments made by subsection (b)
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, as redesignated by subsection (c), is
submitted after the date of the enactment of this Act.

2633382898671ccb279b680653d9e9401eb8d0ba5b746cfb314686b4af4528a8

BUILDING PURCHASE.
(a) Modification of Right of First Refusal.--
(1) In general.--Subparagraph (A) of section 42(i)(7) is
amended by striking ``a right of 1st refusal'' and inserting
``an option''.
(2) Conforming amendment.--The heading of paragraph (7) of
section 42(i) is amended by striking ``right of 1st refusal''
and inserting ``option''.
(b) Clarification With Respect to Right of First Refusal and
Purchase Options.--
(1) Purchase of partnership interest.--
(A) In general.--Subparagraph (A) of section
42(i)(7), as amended by subsection (a), is amended by
striking ``the property'' and inserting ``the property
or all of the partnership interests (other than
interests of the person exercising such option or a
related party thereto (within the meaning of section
267(b) or 707(b)(1))) relating to the property''.
(B) Application to S corporations and other pass-
through entities.--Subparagraph (A) of section 42(i)(7)
is amended by adding at the end the following: ``Except
as provided by the Secretary, the rules of this
paragraph shall apply to S corporations and other pass-
through entities in the same manner as such rules apply
to partnerships.''.
(C) Conforming amendment.--Subparagraph (B) of
section 42(i)(7) is amended by adding at the end the
following: ``In the case of a purchase of all of the
partnership interests, the minimum purchase price under
this subparagraph shall be an amount not less than the
sum of the interests' shares of the amount which would
be determined with respect to the property under this
subparagraph without regard to this sentence.''.
(2) Property includes assets relating to the building.--
Paragraph (7) of section 42(i) is amended by adding at the end
the following new subparagraph:
``(C) Property.--For purposes of subparagraph (A),
the term `property' may include all or any of the
assets held for the development, operation, or
maintenance of a building.''.
(3) Exercise of right of first refusal and purchase
options.--Subparagraph (A) of section 42(i)(7), as amended by
subsection (a) and paragraph (1)(A), is amended by adding at
the end the following: ``For purposes of determining whether an
option, including a right of first refusal, to purchase
property or all of the partnership interests holding (directly
or indirectly) such property is described in the preceding
sentence--
``(i) such option or right of first refusal
shall be exercisable with or without the
approval of any owner of the project (including
any partner, member, or affiliated organization
of such an owner), and
``(ii) a right of first refusal shall be
exercisable in response to any offer to
purchase the property or all of the partnership
interests, including an offer by a related
party.''.
(c) Other Conforming Amendment.--Subparagraph (B) of section
42(i)(7), as amended by subsection (b), is amended by striking ``the
sum of'' and all that follows through ``application of clause (ii).''
and inserting the following: ``the principal amount of outstanding
indebtedness secured by the building (other than indebtedness incurred
within the 5-year period ending on the date of the sale to the
tenants).''.
(d) Effective Dates.--
(1) Modification of right of first refusal.--The amendments
made by subsections (a) and (c) shall apply to agreements
entered into or amended after the date of the enactment of this
Act.
(2) Clarification.--The amendments made by subsection (b)
shall apply to agreements among the owners of the project
(including partners, members, and their affiliated
organizations) and persons described in section 42(i)(7)(A) of
the Internal Revenue Code of 1986 entered into before, on, or
after the date of the enactment of this Act.
(3) No effect on agreements.--None of the amendments made
by this section is intended to supersede express language in
any agreement with respect to the terms of a right of first
refusal or option permitted by section 42(i)(7) of the Internal
Revenue Code of 1986 in effect on the date of the enactment of
this Act.
Subtitle B--Additional Housing Incentives

c2c49ed7f17761d4ac5f2b75f7f15df3a8fc0343c5933a108294c8ec4cd4c583

BUILDINGS TO AFFORDABLE HOUSING.
(a) In General.--Subpart E of part IV of subchapter A of chapter 1
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) is amended by
adding at the end the following new clause:
``(xiii) The affordable housing conversion
credit determined under section 48F.''.
(c) Conforming Amendments.--
(1) Section 46 is amended in paragraph (6) by striking
``and'' at the end, in paragraph (7) by striking the period at
the end and inserting ``, and'', and by adding at the end the
following new paragraph:
``(8) the affordable housing conversion credit.''.
(2) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (vii), in clause (viii) by striking the
period at the end and inserting ``, and'', and by adding at the
end the follow new clause:
``(ix) the basis of any property which is
being converted as part of a qualified
conversion under section 48F.''.
(3) Section 50(a)(2)(E) 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 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.

a1bce75ce2a3ad1bb9be9a15a28b6100019ce1cc20a23c74161e201cf6677c5a

2439c85e0cf7682f21db46d3a04afb7f213d5460fceaa3576555d7fc0e8491b5

(a) Full Credit Allowed in the Year Building Placed in Service.--
Section 47(a) is amended to read as follows:
``(a) General Rule.--For purposes of section 46, the rehabilitation
credit for any taxable year is 20 percent of the qualified
rehabilitation expenditures.''.
(b) Increase in the Rehabilitation Credit for Certain Small
Projects.--Section 47 is amended by adding at the end the following new
subsection:
``(e) Special Rule Regarding Certain Small Projects.--
``(1) In general.--In the case of any qualifying small
project with respect to which there is an election in effect
under this subsection--
``(A) the total qualified rehabilitation
expenditures taken into account for purposes of this
section with respect to the rehabilitation shall not
exceed $3,750,000,
``(B) subsection (a) shall be applied by
substituting `30 percent' for `20 percent', and
``(C) subject to paragraph (4) and such regulations
or other guidance as the Secretary may provide, the
taxpayer may transfer all or a portion of the credit
determined under this section with respect to such
qualifying small project.
``(2) Qualifying small project.--For purposes of this
subsection, the term `qualifying small project' means any
qualified rehabilitated building or portion thereof if--
``(A) such building is placed in service after the
date of the enactment of this subsection, and
``(B) no credit was allowed under this section
(other than a credits allowed by reason of subsection
(d)) for either of the two immediately preceding
taxable years with respect to such building.
``(3) Special rule for rural projects.--
``(A) In general.--In the case of any qualifying
small project in a rural area, paragraph (1)(A) shall
be applied by substituting `$5,000,000' for
`$3,750,000'.
``(B) Rural area.--For purposes of this
subparagraph, the term `rural area' means any area
other than--
``(i) a city or town that has a population
of greater than 50,000 inhabitants, or
``(ii) the urbanized area contiguous and
adjacent to a city or town described in clause
(i), as defined by the Bureau of the Census
based on the latest decennial census of the
United States.
``(4) Transfer of credit for qualifying small projects.--
``(A) Certification.--
``(i) In general.--A transfer under
paragraph (1)(C) shall be accompanied by a
certificate which includes--
``(I) the certification for the
certified historic structure referred
to in subsection (c)(3),
``(II) the taxpayer's name,
address, tax identification number,
date of project completion, and the
amount of credit being transferred,
``(III) the transferee's name,
address, tax identification number, and
the amount of credit being transferred,
and
``(IV) such other information as
may be required by the Secretary.
``(ii) Transferability of certificate.--A
certificate issued under this subsection to a
taxpayer shall be transferable to any other
taxpayer.
``(B) Tax treatment relating to certificate.--
``(i) Disallowance of deduction.--No
deduction shall be allowed for the amount of
consideration paid or incurred by the
transferee.
``(ii) Allowance of credit.--The amount of
credit transferred under paragraph (1)(C)--
``(I) shall not be allowed to the
transferor for any taxable year, and
``(II) shall be allowable to the
transferee as a credit determined under
this section for the taxable year of
the transferee in which such credit is
transferred.
``(iii) Exclusion.--Gross income shall not
include any amount received in connection with
the transfer of the certificate.
``(C) Recapture and other special rules.--The
taxpayer who claims a credit determined under this
section by reason of a transfer of an amount of credit
under paragraph (1)(A) with respect to an applicable
rural project shall be treated as the taxpayer with
respect to such project for purposes of section 50.
``(D) Information reporting.--The transferor and
the transferee shall each make such reports regarding
the transfer of an amount of credit under paragraph
(1)(C) and containing such information as the Secretary
may require. The reports required by this subparagraph
shall be filed at such time and in such manner as may
be required by the Secretary.
``(E) Regulations.--The Secretary shall prescribe
regulations or other guidance to carry out paragraph
(1)(C) and this paragraph in a manner which is
consistent with applicable requirements with respect to
transfer of credits under section 6418.
``(5) Election.--An election under this subsection shall be
made at such time and in such manner as the Secretary may by
regulations prescribe.''.
(c) Increasing the Type of Buildings Eligible for Rehabilitation.--
Section 47(c)(1)(B)(i)(I) is amended by inserting ``50 percent of''
before ``the adjusted basis''.
(d) Elimination of Rehabilitation Credit Basis Adjustment.--
(1) In general.--Section 50(c) is amended by adding at the
end the following new paragraph:
``(6) Exception for rehabilitation credit.--In the case of
the rehabilitation credit, paragraph (1) shall not apply.''.
(2) Treatment in case of credit allowed to lessee.--Section
50(d) is amended by adding at the end the following: ``In the
case of the rehabilitation credit, paragraph (5)(B) of the
section 48(d) referred to in paragraph (5) of this subsection
shall not apply.''.
(e) Modifications Regarding Certain Tax-Exempt Use Property.--
Section 47(c)(2)(B)(v) is amended by adding at the end the following
new subclause:
``(III) Disqualified lease rules to
apply only in case of government
entity.--For purposes of subclause (I),
except in the case of a tax-exempt
entity described in section
168(h)(2)(A)(i), the determination of
whether property is tax-exempt use
property shall be made under section
168(h) without regard to whether the
property is leased in a disqualified
lease (as defined in section
168(h)(1)(B)(ii)).''.
(f) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
property placed in service after the date of the enactment of
this Act.
(2) Full credit allowed in the year building placed in
service.--The amendment made by subsection (a) shall apply to
property placed in service after December 31, 2025.

7cae369c2a9123f61e6cc884230b8f558607e52f651f820b936b8e0384ea66b5

RESIDENCE.
(a) In General.--Section 121(b) is amended--
(1) by striking ``$250,000'' and inserting ``$500,000''
each place it appears,
(2) by striking ``500,000'' and inserting ``$1,000,000''
each place it appears,
(3) in paragraph (2)(A), in the heading, by striking
``$500,000'' and inserting ``$1,000,000'', and
(4) by adding at the end the following new paragraph:
``(5) Adjustment for inflation.--In the case of a taxable
year beginning after 2026, the $500,000 and $1,000,000 amounts
in paragraphs (1), (2), and (4) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`2025' for `2016' in subparagraph (A)(ii) thereof.
If any increase under this clause is not a multiple of $100,
such increase shall be rounded to the next lowest multiple of
$100.''.
(b) Effective Date.--The amendments made by this section shall
apply to sales and exchanges after December 31, 2025.

c2c5a7635e0e8eb89b4494a67e7826012bdba5040a4cc94ff89a260f07a16c85

f767878a000ba87c7aa203b2b9d6c53684ae5ea4214ab81fa65d4fd9e25e247a

(a) In General.--Section 36 is amended to read as follows:
``SEC. 36. FIRST-TIME HOMEBUYER CREDIT.
``(a) Allowance of Credit.--In the case of an individual who is a
first-time homebuyer of a principal residence in the United States
during a taxable year, there shall be allowed as a credit against the
tax imposed by this subtitle for such taxable year an amount equal to
10 percent of the purchase price of the residence.
``(b) Limitations.--
``(1) Dollar limitation.--
``(A) In general.--Except as otherwise provided in
this paragraph, the credit allowed under subsection (a)
shall not exceed $15,000.
``(B) Married individuals filing separately.--In
the case of a married individual filing a separate
return, subparagraph (A) shall be applied by
substituting `$7,500' for `$15,000'.
``(C) Other individuals.--If 2 or more individuals
who are not married purchase a principal residence, the
amount of the credit allowed under subsection (a) shall
be allocated among such individuals in such manner as
the Secretary may prescribe, except that the total
amount of the credits allowed to all such individuals
shall not exceed $15,000.
``(2) Phaseout based on area median income.--
``(A) In general.--The amount allowable as a credit
under subsection (a) (determined without regard to this
paragraph) shall be reduced (but not below zero) by the
amount which bears the same ratio to the amount which
is so allowable as--
``(i) the excess (if any) of--
``(I) the modified adjusted gross
income of the taxpayer for the taxable
year, over
``(II) 150 percent of the
applicable Area Medium Income, bears to
``(ii) 20 percent of the applicable Area
Median Income.
``(B) Modified adjusted gross income.--For purposes
of subparagraph (A), the term `modified adjusted gross
income' means the adjusted gross income of the taxpayer
for the taxable year increased by any amount excluded
from gross income under section 911, 931, or 933.
``(C) Applicable area median income.--For purposes
of subparagraph (A), the term `applicable Area Median
Income' means the Area Median Income set by the
Secretary of Housing and Urban Development with respect
to--
``(i) the area in which the principal
residence is located,
``(ii) the size of the household of the
taxpayer, and
``(iii) the calendar year in which the
principal residence is purchased.
``(D) Regulations and guidance.--The Secretary,
after consultation with the Secretary of Housing and
Urban Development, shall issue such regulations and
guidance as are necessary to carry out the purposes of
this subparagraph.
``(3) Limitation based on area median purchase price.--
``(A) In general.--The amount allowable as a credit
under subsection (a) (determined without regard to this
paragraph) shall be reduced (but not below zero) by the
amount which bears the same ratio to the amount which
is so allowable as--
``(i) the excess (if any) of--
``(I) the purchase price of the
principal residence, over
``(II) the amount which is equal to
110 percent of the area median purchase
price, bears to
``(ii) the amount which is equal to 15
percent of the area median purchase price.
``(B) Area median purchase price.--For purposes of
this paragraph, the term `area median purchase price'
means the median purchase price for a home in both the
area and the calendar year in which the purchase of the
principal residence takes place.
``(C) Regulations and guidance.--The Secretary,
after consultation with the Secretary of Housing and
Urban Development, shall promulgate such regulations
and guidance as are necessary to carry out the purposes
of this subparagraph, including for determining the
area median purchase price with respect to different
localities.
``(4) Inflation adjustment.--In the case of any taxable
year beginning in a calendar year after 2026, each of the
dollar amounts in paragraph (1) shall be increased by an amount
equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for the calendar year in which
the taxable year begins, determined by substituting
`calendar year 2025' for `calendar year 2016' in
subparagraph (A)(ii) thereof.
Any increase determined under the preceding sentence shall be
rounded to the nearest multiple of $100.
``(5) Age limitation.--No credit shall be allowed under
subsection (a) with respect to the purchase of any residence
unless the taxpayer has attained age 18 as of the date of such
purchase. In the case of any taxpayer who is married (within
the meaning of section 7703), the taxpayer shall be treated as
meeting the age requirement of the preceding sentence if the
taxpayer or the taxpayer's spouse meets such age requirement.
``(c) Definitions.--For purposes of this section--
``(1) First-time homebuyer.--The term `first-time
homebuyer' means any individual if such individual (and if
married, such individual's spouse)--
``(A) has no present ownership interest in any
residence during the 3-year period ending on the date
of the purchase of the principal residence to which
this section applies, and
``(B) has not taken the credit under this section
in any other taxable year.
``(2) Principal residence.--The term `principal residence'
has the same meaning as when used in section 121.
``(3) Purchase.--
``(A) In general.--The term `purchase' means any
acquisition, but only if--
``(i) the property is not acquired from a
person related to the person acquiring such
property (or, if married, such individual's
spouse),
``(ii) the acquisition is financed through
a federally backed mortgage loan (as defined in
section 4022 of the CARES Act), and
``(iii) the basis of the property in the
hands of the person acquiring such property is
not determined--
``(I) in whole or in part by
reference to the adjusted basis of such
property in the hands of the person
from whom acquired, or
``(II) under section 1014(a)
(relating to property acquired from a
decedent).
``(B) Construction.--A residence which is
constructed by the taxpayer shall be treated as
purchased by the taxpayer on the date the taxpayer
first occupies such residence.
``(4) Purchase price.--The term `purchase price' means the
adjusted basis of the principal residence on the date such
residence is purchased.
``(5) Related persons.--A person shall be treated as
related to another person if the relationship between such
persons would result in the disallowance of losses under
section 267 or 707(b).
``(d) Exceptions.--No credit under subsection (a) shall be allowed
to any taxpayer for any taxable year with respect to the purchase of a
residence if--
``(1) the taxpayer disposes of such residence (or such
residence ceases to be the principal residence of the taxpayer
(and, if married, the taxpayer's spouse)) before the close of
such taxable year,
``(2) a deduction under section 151 with respect to such
taxpayer is allowable to another taxpayer for such taxable
year, or
``(3) the taxpayer fails to attach to the return of tax for
such taxable year a properly executed copy of the settlement
statement used to complete such purchase.
``(e) Reporting.--If the Secretary requires information reporting
under section 6045 by a person described in subsection (e)(2) thereof
to verify the eligibility of taxpayers for the credit allowable by this
section, the exception provided by section 6045(e)(5) shall not apply.
``(f) Recapture of Credit.--
``(1) In general.--Except as otherwise provided in this
subsection, if, during any taxable year before the close of the
recapture period, a taxpayer disposes of the principal
residence with respect to which a credit was allowed under
subsection (a) (or such residence ceases to be the principal
residence of the taxpayer), the tax imposed by this chapter for
such taxable year shall be increased by the recoverable amount
determined in paragraph (2).
``(2) Recoverable amount.--For purposes of paragraph (1),
the recoverable amount is the product of--
``(A) 25 percent of the amount of the credit
allowed under subsection (a), multiplied by
``(B) the number of taxable years remaining in the
recapture period as of the beginning of the taxable
year in which the taxpayer disposes of the principal
residence.
``(3) Limitation based on gain.--In the case of the sale of
the principal residence to a person who is not related to the
taxpayer, the increase in tax determined under paragraph (1)
shall not exceed the amount of gain (if any) on such sale.
Solely for purposes of the preceding sentence, the adjusted
basis of such residence shall be reduced by the amount of the
credit allowed under subsection (a).
``(4) Exceptions.--
``(A) Death of a taxpayer.--Paragraph (1) shall not
apply to any taxable year ending after the date of the
taxpayer's death.
``(B) Involuntary conversion.--Paragraph (1) shall
not apply in the case of a residence which is
compulsorily or involuntarily converted (within the
meaning of section 1033(a)) if the taxpayer acquires a
new principal residence during the 2-year period
beginning on the date of the disposition or cessation
referred to in paragraph (1). Paragraph (1) shall apply
to such new principal residence during the recapture
period in the same manner as if such new principal
residence were the converted residence.
``(C) Transfers between spouses or incident to
divorce.--In the case of a transfer of a residence to
which section 1041(a) applies--
``(i) paragraph (1) shall not apply to such
transfer, and
``(ii) in the case of taxable years ending
after such transfer, paragraph (1) shall apply
to the transferee in the same manner as if such
transferee were the transferor (and shall not
apply to the transferor).
``(D) Special rule for members of the armed forces,
etc.--
``(i) In general.--In the case of the
disposition of a principal residence by an
individual (or a cessation referred to in
paragraph (1)) after the date of the enactment
of this section, in connection with Government
orders received by such individual, or such
individual's spouse, for qualified official
extended duty service, paragraph (1) and
subsection (d)(2) shall not apply to such
disposition (or cessation).
``(ii) Qualified official extended duty
service.--For purposes of this section, the
term `qualified official extended duty service'
means service on qualified official extended
duty as--
``(I) a member of the uniformed
services,
``(II) a member of the Foreign
Service of the United States, or
``(III) an employee of the
intelligence community.
``(iii) Definitions.--Any term used in this
subparagraph which is also used in paragraph
(9) of section 121(d) shall have the same
meaning as when used in such paragraph.
``(E) Disposition of residence in connection with
change of employment.--In the case of the disposition
of a principal residence by an individual (or a
cessation referred to in paragraph (1)) after December
31, 2022, in connection with a change of employment
which meets the conditions described in section 217(c),
paragraph (1) shall not apply to such disposition (or
cessation).
``(5) Joint returns.--In the case of a credit allowed under
subsection (a) with respect to a joint return, half of such
credit shall be treated as having been allowed to each
individual filing such return for purposes of this subsection.
``(6) Return requirement.--If the tax imposed by this
chapter for the taxable year is increased under this
subsection, the taxpayer shall, notwithstanding section 6012,
be required to file a return with respect to the taxes imposed
under this subtitle.
``(7) Recapture period.--For purposes of this subsection,
the term `recapture period' means the 4 taxable years beginning
with the taxable year in which the purchase of the principal
residence for which a credit is allowed under subsection (a)
was made.
``(g) Election To Treat Purchase in Prior Year.--In the case of a
purchase of a principal residence after December 31, 2026, a taxpayer
may elect to treat such purchase as made on December 31 of the calendar
year preceding such purchase for purposes of this section (other than
subsections (b)(4), (c), and (h)).
``(h) Transfer of Credit.--
``(1) In general.--Subject to such regulations and other
guidance as the Secretary determines necessary, a taxpayer may
elect that the credit which would (but for this subsection) be
allowed to such taxpayer with respect to the purchase of a
principal residence shall be allowed to the mortgage lender
with respect to such purchase and not to such taxpayer.
``(2) Eligible entity.--For purposes of this subsection,
the term `eligible entity' means, with respect to the purchase
of the principal residence for which the credit is allowed
under subsection (a), the mortgage lender which provides the
mortgage to the taxpayer and has--
``(A) registered with the Secretary for purposes of
this paragraph, at such time, and in such form and
manner, as the Secretary may prescribe,
``(B) prior to the election described in paragraph
(1) and not later than at the time of such purchase,
disclosed to the taxpayer making such purchase--
``(i) the value of the credit allowed under
subsection (a), and
``(ii) the amount provided by the mortgage
lender to such taxpayer as a condition of the
election described in paragraph (1).
``(C) not later than at the time of such purchase,
made payment to such taxpayer (whether in cash or in
the form of a partial payment or down payment for the
purchase of such principal residence) in an amount
equal to the credit otherwise allowable to such
taxpayer, and
``(D) with respect to any incentive otherwise
available for taking a mortgage for which a credit is
allowed under this section, including any incentive in
the form of a rebate or discount provided by the
mortgage lender, ensured that--
``(i) the availability or use of such
incentive shall not limit the ability of a
taxpayer to make an election described in
paragraph (1), and
``(ii) such election shall not limit the
value or use of such incentive.
``(3) Timing.--An election described in paragraph (1) shall
be made by the taxpayer not later than the date on which the
purchase of the principal residence with respect to which the
credit under subsection (a) is allowed is made.
``(4) Revocation of registration.--Upon determination by
the Secretary that a mortgage lender has failed to comply with
the requirements described in paragraph (2), the Secretary may
revoke the registration (as described in subparagraph (A) of
such paragraph) of such mortgage lender.
``(5) Tax treatment of payments.--With respect to any
payment described in paragraph (2)(C), such payment--
``(A) shall not be includible in the gross income
of the taxpayer, and
``(B) with respect to the mortgage lender, shall
not be deductible under this title.
``(6) Advance payment to mortgage lenders.--
``(A) In general.--The Secretary shall establish a
program to make advance payments to any eligible entity
in an amount equal to the cumulative amount of the
credits allowed under subsection (a) with respect to
any mortgages issued by such entity for which an
election described in paragraph (1) has been made.
``(B) Excessive payments.--Rules similar to the
rules of section 6417(d)(6) shall apply for purposes of
this paragraph.
``(C) Treatment of advance payments.--For purposes
of section 1324 of title 31, United States Code, the
payments under subparagraph (A) shall be treated in the
same manner as a refund due from a credit provision
referred to in subsection (b)(2) of such section.
``(7) Recapture.--In the case of any taxpayer who has made
an election described in paragraph (1) with respect to the
purchase of a principal residence and received a payment
described in paragraph (2)(C) from an eligible entity, such
principal residence shall be treated as a principal residence
with respect to which a credit was allowed under subsection (a)
for purposes of subsection (f).''.
(b) Certain Errors With Respect to First-Time Homebuyer Tax Credit
Treated as Mathematical or Clerical Errors.--Paragraph (2) of section
6213(g), as amended by Public Law 119-21, is amended by striking
``and'' at the end of subparagraph (Z), by striking the period at the
end of subparagraph (AA) and inserting ``, and'', and by inserting
after subparagraph (AA) the following new subparagraph:
``(BB) an entry on a return claiming the credit
under section 36 if--
``(i) the Secretary obtains information
from the person issuing the TIN of the taxpayer
that indicates that the taxpayer does not meet
the age requirement of section 36(b)(4),
``(ii) information provided to the
Secretary by the taxpayer on an income tax
return for at least one of the 2 preceding
taxable years is inconsistent with eligibility
for such credit, or
``(iii) the taxpayer fails to attach to the
return the form described in section
36(d)(3).''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to principal residences purchased after the date of
the enactment of this Act.

c90179158a9d55c1969ca8ed6f5a90c734ba9c2dd038456e8178bc3c569e2269

(a) In General.--Subpart C of part IV of subchapter A of chapter 1
is amended by inserting after section 36B the following new section:
``SEC. 36C. RENTER TAX CREDIT.
``(a) In General.--In the case of an individual who leases the
individual's principal residence (within the meaning of section 121)
during the taxable year and who pays rent with respect to such
residence in excess of 30 percent of the taxpayer's adjusted gross
income for such taxable year, there shall be allowed as a credit
against the tax imposed by this subtitle for such taxable year an
amount equal to the applicable percentage of such excess.
``(b) Credit Limited by 100 Percent of Small Area Fair Market
Rent.--Solely for purposes of determining the amount of the credit
allowed under subsection (a) with respect to a residence for the
taxable year, there shall not be taken into account rent in excess of
an amount equal to 100 percent of the small area fair market rent
(including the utility allowance) applicable to the residence involved
(as most recently published, as of the beginning of the taxable year,
by the Department of Housing and Urban Development).
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable percentage.--The term `applicable
percentage' means the percentage determined in accordance with
the following table:
The applicable
``If the taxpayer's adjusted gross                       percentage is:
income is:
Not over $25,000.............................      100 percent
Over $25,000, but not over $50,000...........       75 percent
Over $50,000, but not over $75,000...........       50 percent
Over $75,000, but not over $100,000..........       25 percent
Over $100,000................................        0 percent.
``(2) Partial year residence.--The Secretary shall
prescribe such rules as are necessary to carry out the purposes
of this section for taxpayers with respect to whom a residence
is a principal residence for only a portion of the taxable
year.
``(3) Rent.--The term `rent' includes any amount paid for
utilities of a type taken into account for purposes of
determining the utility allowance under section
42(g)(2)(B)(ii).
``(4) Married individuals filing separate returns.--In the
case of individuals who are married to each other, have the
same principal residence, and do not file a joint return for
the taxable year, the credit determined under this section with
respect to each such individual shall be 50 percent of the
amount of the credit which would be determined under this
section if such individuals filed a joint return, unless such
individuals agree on a different division of such credit (in
such manner as the Secretary may provide) which does not
aggregate to more 100 percent of such amount.
``(d) Reconciliation of Credit and Advance Payments.--The amount of
the credit allowed under this section for any taxable year shall be
reduced (but not below zero) by the aggregate amount of any advance
payments of such credit under section 7527B for such taxable year.''.
(b) Advance Payment.--Chapter 77 is amended by inserting after
section 7527A the following new section:
``SEC. 7527B. ADVANCE PAYMENT OF RENTER TAX CREDIT.
``(a) In General.--Not later than 6 months after the date of the
enactment of this section, the Secretary shall establish a program for
making advance payments of the credit allowed under section 36C on a
monthly basis to any taxpayer who--
``(1) the Secretary has determined will be allowed such
credit for the taxable year, and
``(2) has made an election under subsection (c).
``(b) Amount of Advance Payment.--
``(1) In general.--For purposes of subsection (a), the
amount of the monthly advance payment of the credit provided to
a taxpayer during the applicable period shall be equal to the
lesser of--
``(A) an amount equal to--
``(i) the amount of the credit which the
Secretary has determined will be allowed to
such taxpayer under section 36C for the taxable
year ending in such applicable period, divided
by
``(ii) 12, or
``(B) such other amount as is elected by the
taxpayer.
``(2) Applicable period.--For purposes of this section, the
term `applicable period' means the 12-month period from the
month of July of the taxable year through the month of June of
the subsequent taxable year.
``(c) Election of Advance Payment.--A taxpayer may elect to receive
an advance payment of the credit allowed under section 36C for any
taxable year by including such election on a timely filed return for
the preceding taxable year.
``(d) Internal Revenue Service Notification.--The Internal Revenue
Service shall take such steps as may be appropriate to ensure that
taxpayers who are eligible to receive the credit under section 36C are
aware of the availability of the advance payment of such credit under
this section.
``(e) Treatment of Payments.--For purposes of section 1324 of title
31, United States Code, the payments under this section shall be
treated in the same manner as a refund due from a credit provision
referred to in subsection (b)(2) of such section.
``(f) Regulations.--The Secretary may prescribe such regulations or
other guidance as may be necessary or appropriate to carry out the
purposes this section.''.
(c) Conforming Amendments.--
(1) Section 6211(b)(4)(A) is amended by inserting ``36C,''
after ``36B,''.
(2) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``36C,'' after ``36B,''.
(3) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 36B the following new item:
``Sec. 36C. Renter tax credit.''.
(4) The table of sections for chapter 77 is amended by
inserting after the item relating to section 7527A the
following new item:
``Sec. 7527B. Advance payment of renter tax credit.''.
(d) Effective Date.--The amendments made by this section shall
apply with respect to taxable years beginning after December 31, 2025.
(e) Community Outreach.--Immediately upon the enactment of this
Act, in addition to amounts otherwise available, there are appropriated
out of any money in the Treasury not otherwise appropriated $50,000,000
to remain available until 5 years after the enactment of this Act for
necessary expenses for the Internal Revenue Service to support efforts
to increase enrollment of eligible households in the Renter Tax Credit
allowed under section 36C of the Internal Revenue Code of 1986
(including the advance payment of such credit under section 7527B of
such Code), including but not limited to program outreach, costs of
data sharing arrangements, systems changes, forms changes, and related
efforts, and efforts by Federal agencies to facilitate the cross-
enrollment of beneficiaries of other programs in such Renter Tax
Credit, including by establishing intergovernmental cooperative
agreements with States and local governments, tribal governments, and
possessions of the United States: Provided, that such amount shall be
available in addition to any amounts otherwise available: Provided
further, that these funds may be awarded by Federal agencies to State
and local governments, tribal governments, and possessions of the
United States, and private entities, including organizations dedicated
to free tax return preparation.
Subtitle A--Lowering Costs Through an All-of-the-above Energy Policy

5b33adc270e1690613d0b16f35f12daf39ad6ac92f4b636addb7a45e6cba3c1f

(a) Restoration of Phase-Out.--Section 45Y(d)(3) is amended by
striking ``calendar year 2032.'' and inserting ``means the later of--
``(A) the calendar year in which the Secretary
determines that the annual greenhouse gas emissions
from the production of electricity in the United States
are equal to or less than 25 percent of the annual
greenhouse gas emissions from the production of
electricity in the United States for calendar year
2022, or
``(B) 2032.''.
(b) Restoration of Credit for Wind and Solar Facilities.--Section
45Y(d) is amended--
(1) in paragraph (1), by striking ``Subject to paragraph
(4), the amount'' and inserting ``The amount'', and
(2) by striking paragraph (4).
(c) Restoration of Credit for Wind and Solar Leasing
Arrangements.--Section 45Y is amended by striking subsection (h).
(d) Repeal of Provision for Existing Studies.--Section 45Y(b)(2)(C)
is amended by striking clause (iii).
(e) Effective Dates.--The amendments made by this section shall
take effect as if included in section 70512 of Public Law 119-21.

37a1402f7e300a5e5a12df210a6bb041cc02c84cc291f9d8c6163816fedfab21

(a) Repeal of Termination for Wind and Solar Facilities.--Section
48E(e) is amended--
(1) in paragraph (1), by striking ``Subject to paragraph
(4), the amount'' and inserting ``The amount'', and
(2) by striking paragraph (4).
(b) Restoration of Credit for Expenditures for Wind and Solar
Leasing Arrangements.--
(1) In general.--Section 48E is amended by striking
subsection (i) and by redesignating subsections (j) and (k) as
subsections (i) and (j), respectively.
(2) Conforming rule repeal.--Section 50 is amended by
striking subsection (e).
(c) Restoration of Credit for Certain Energy Property.--Section
48(a)(2)(A)(ii) is amended by striking ``0 percent'' and inserting ``2
percent''.
(d) Effective Dates.--The amendments made by this section shall
take effect as if included in section 70513 of Public Law 119-21.

d94987f6f2660bbcbac2c83715e322b7d8f6e2510e075605f5bd6dd1d43f15e7

(a) Repeal of Inclusion of Metallurgical Coal as an Applicable
Critical Mineral.--Section 45X(c)(6) is amended by striking
subparagraph (R) and by redesignating subparagraphs (S) through (AA) as
subparagraphs (R) through (ZZ), respectively.
(b) Repeal of Termination for Wind Energy Components.--Section
45X(b)(3) is amended by striking subparagraph (D).
(c) Conforming Amendments.--
(1) Section 45X(b)(1)(M) is amended by striking ``(2.5
percent in the case of metallurgical coal)''.
(2) The heading of section 45X(b)(3) is amended by striking
``and termination''.
(3) Section 45X(b)(3)(A) is amended by striking
``subparagraphs (C) and (D)'' and inserting ``subparagraph
(C)''.
(4) The heading of section 45X(b)(3)(C) is amended by
striking ``other than metallurgical coal''.
(5) The heading of section 45X(b)(3)(C)(ii) is amended by
striking ``other than metallurgical coal''.
(6) Section 45X(b)(3) is amended by striking subparagraph
(E).
(d) Effective Date.--The amendments made by this section shall take
effect as if included in section 70514 of Public Law 119-21.

a33be71dcdf7663990c586c85e8849fc22ff3b8f547a34c3d73648ba1e1262a6

PROJECT CREDIT PROGRAM.
(a) In General.--Section 48C(e)(3)(C) is amended by striking
``shall not be increased'' and inserting ``shall be increased''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70515 of Public Law 119-21.

79144a0a4a490acff8934304ade393fc1747dd1bfa2fe73a4db5461659feec5c

PRODUCTION CREDIT.
(a) In General.--Section 45V(c)(3)(C) is amended by striking
``January 1, 2028'' and inserting ``January 1, 2033''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70511 of Public Law 119-21.

2c910fa863badf8251d6c5f1c3b565425dc8e156c3c17e423dc5b7b1651de51a

CREDIT.
(a) In General.--Section 25D(h) is amended by striking ``with
respect to any expenditures made after December 31, 2025'' and
inserting ``to property placed in service after December 31, 2034''.
(b) Conforming Amendment.--Section 25D(g) is amended by striking
``and'' at the end of paragraph (2), by striking ``30 percent.'' at the
end of paragraph (3) and inserting ``and before January 1, 2033, 30
percent,'' and by adding at the end the following new paragraphs:
``(4) in the case of property placed in service after
December 31, 2032, and before January 1, 2034, 26 percent, and
``(5) in the case of property placed in service after
December 31, 2033, and before January 1, 2035, 22 percent.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in section 70506 of Public Law 119-21.

1c5c830e1053abe13b891c817e4491d855e43f80e6db05ced7adcd1035baf09f

FUEL.
(a) In General.--Section 45Z(a)(3) is amended to read as follows:
``(3) Special rate for sustainable aviation fuel.--
``(A) In general.--In the case of a transportation
fuel which is sustainable aviation fuel, paragraph (2)
shall be applied--
``(i) in the case of fuel produced at a
qualified facility described in paragraph
(2)(A), by substituting `35 cents' for `20
cents', and
``(ii) in the case of fuel produced at a
qualified facility described in paragraph
(2)(B), by substituting `$1.75' for `$1.00'.
``(B) Sustainable aviation fuel.--For purposes of
subparagraph (A), the term `sustainable aviation fuel'
means liquid fuel, the portion of which is not
kerosene, which is sold for use in an aircraft and
which--
``(i) meets the requirements of--
``(I) ASTM International Standard
D7566, or
``(II) the Fischer Tropsch
provisions of ASTM International
Standard D1655, Annex A1, and
``(ii) is not derived from palm fatty acid
distillates or petroleum.''.
(b) Conforming Amendment.--Section 45Z(c)(1) is amended by striking
``and the $1.00 amount in subsection (a)(2)(B)'' and inserting ``the
$1.00 amount in subsection (a)(2)(B), the 35 cent amount in subsection
(a)(3)(A)(i), and the $1.75 amount in subsection (a)(3)(A)(ii)''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in section 70521 of Public Law 119-21.
Subtitle B--Lowering Costs Through Energy Efficiency

610f34fa34fe00259a137758b1e0fa3834b7447ca16e33c58fd239b452273295

(a) Restoring Product Identification Number Requirement.--Section
25C(h) is amended to read as follows:
``(h) Product Identification Number Requirement.--
``(1) In general.--No credit shall be allowed under
subsection (a) with respect to any item of specified property
placed in service after December 31, 2025, unless--
``(A) such item is produced by a qualified
manufacturer, and
``(B) the taxpayer includes the qualified product
identification number of such item on the return of tax
for the taxable year.
``(2) Qualified product identification number.--For
purposes of this section, the term `qualified product
identification number' means, with respect to any item of
specified property, the product identification number assigned
to such item by the qualified manufacturer pursuant to the
methodology referred to in paragraph (3).
``(3) Qualified manufacturer.--For purposes of this
section, the term `qualified manufacturer' means any
manufacturer of specified property which enters into an
agreement with the Secretary which provides that such
manufacturer will--
``(A) assign a product identification number to
each item of specified property produced by such
manufacturer utilizing a methodology that will ensure
that such number (including any alphanumeric) is unique
to each such item (by utilizing numbers or letters
which are unique to such manufacturer or by such other
method as the Secretary may provide),
``(B) label such item with such number in such
manner as the Secretary may provide, and
``(C) make periodic written reports to the
Secretary (at such times and in such manner as the
Secretary may provide) of the product identification
numbers so assigned and including such information as
the Secretary may require with respect to the item of
specified property to which such number was so
assigned.
``(4) Specified property.--For purposes of this subsection,
the term `specified property' means any qualified energy
property and any property described in subparagraph (B) or (C)
of subsection (c)(3).''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in the enactment of section 70505 of Public Law
119-21.

b99ca8fa713095041c06357ec80a193afc912dc1238f8ef63361ff733d7a0109

(a) In General.--Section 45L(h) is amended by striking ``acquired
after June 30, 2026'' and inserting ``acquired after December 31,
2032''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70508 of Public Law 119-21.

479612f2747911e3f29fd1054f484332ad196a9a82644a82ba76fe710a546535

BUILDINGS DEDUCTION.
(a) In General.--Section 179D is amended by striking subsection
(i).
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70507 of Public Law 119-21.

2932b1622875980f7aaf50da77901ef962c86b01b24f7284a3dfb7660cf156b2

(a) In General.--Section 168(e)(3)(B)(vi) is amended--
(1) by redesignating subclauses (I) and (II) as subclauses
(II) and (III), respectively, and
(2) by inserting before subclause (II) (as so redesignated)
the following subclause:
``(I) is described in subparagraph
(A) of section 48(a)(3) (or would be so
described if `solar or wind energy'
were substituted for `solar energy' in
clause (i) thereof and the last
sentence of such section did not apply
to such subparagraph),''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70509 of Public Law 119-21.
Subtitle C--Lowering Costs for Electric Vehicles and Charging
Infrastructure

78bef6f5db5f71484960217da114a0d55a4997dcae5e926c356f83dd5ee74dda

CREDIT.
(a) In General.--Section 25E(g) is amended by striking ``acquired
after September 30, 2025'' and inserting ``acquired after December 31,
2032''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 70501 of Public Law 119-21.

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(a) In General.--Section 30D(h) is amended by striking ``acquired
after September 30, 2025'' and inserting ``placed in service after
December 31, 2032''.
(b) Conforming Amendments.--
(1) Section 30D(e)(1)(B) is amended by striking ``and'' at
the end of clause (iii), by striking the period at the end of
clause (iv) and inserting ``, and'', and by adding at the end
the following clause:
``(v) in the case of a vehicle placed in
service after December 31, 2026, 80 percent.''.
(2) Section 30D(e)(2)(B) is amended by striking ``and'' at
the end of clause (ii), by striking the period at the end of
clause (iii), and by adding at the end the following clauses:
``(iv) in the case of a vehicle placed in
service during calendar year 2027, 80 percent,
``(v) in the case of a vehicle placed in
service during calendar year 2028, 90 percent,
and
``(vi) in the case of a vehicle placed in
service after December 31, 2028, 100
percent.''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in section 70502 of Public Law 119-21.

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American Affordability Act of 2025 — HR. 6900

Other Sections

TITLE I

TITLE II

TITLE III

TITLE IV

TITLE V

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