Temporary ex-offender low-income housing credit

(a)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45N.

Ex-offender low-income housing credit

(a)

In general

For purposes of section 38, the amount of the ex-offender low-income housing credit determined under this section for any taxable year in the credit period shall be an amount equal to— (1)the applicable percentage of (2)the qualified basis of each qualified ex-offender residential building. (b)

Applicable percentage

In the case of any qualified ex-offender residential building, the term applicable percentage has the meaning given such term in section 42(b)(2) with respect to qualified low-income buildings, except that, for the purposes of this subsection, the percentages prescribed by the Secretary under section 42(b)(2)(B) shall yield amounts of credit which have a present value equal to 70 percent of the qualified basis of any qualified ex-offender residential building. (c)

Qualified basis

(1)

In general

For purposes of subsection (a) and except as otherwise provided in this subsection, the term qualified basis means the adjusted basis of a qualified ex-offender residential building as of the close of the 1st taxable year of the credit period. (2)

Qualified basis to include portion of building used to provide ex-offender support services

The qualified basis of any qualified ex-offender residential building for any taxable year shall be increased by the lesser of— (A)so much of the qualified basis of such building as is used throughout the year to provide ex-offender support services, or (B)20 percent of the qualified basis of such building (determined without regard to this paragraph). (3)

Special rules

Rules similar to the rules of paragraphs (4), (5) (other than subparagraph (A) thereof), and (7) of section 42(d) shall apply in determining the adjusted basis of any qualified ex-offender residential building. (d)

Rehabilitation expenditures

Rules similar to the rules of section 42(e) shall apply in determining the treatment of rehabilitation expenditures paid or incurred by the taxpayer with respect to a qualified ex-offender residential building. (e)

Credit period

For purposes of this section, rules similar to the rules of section 42(f) shall apply in determining the credit period with respect to any qualified ex-offender residential building. (f)

Qualified ex-offender residential building

For purposes of this section, the term qualified ex-offender residential building means any building which, at all times during the compliance period, meets the following requirements: (1)

Ex-offender residential units

(A)

In general

Each residential unit in such building shall be made available for occupancy to not more than 1 ex-offender. (B)

Residency requirements

Such ex-offender must— (i)meet the residency requirements under subsection (g); (ii)have failed to meet such requirements for fewer than 14 days; or (iii)be in the process of being evicted from such building for failing to meet such requirements. (C)

Flexibility

A building shall not be determined to fail to satisfy the requirements of this paragraph solely because— (i)some or all of the residential units in such building are single room occupancy (as defined in section (8)(n) of the United States Housing Act of 1937 (42 U.S.C. 1437f(n))), or (ii)any unit made available to an ex-offender is also made available to one or more members of the ex-offender’s family (as determined by the taxpayer). (2)

Self-sufficiency centers for ex-offenders

The building shall include a self-sufficiency center for ex-offenders that— (A)is specifically designed to accommodate, and reserved for, the provision of ex-offender support services to residents of the facility and other ex-offenders; (B)is made available for rental by providers of such services at a rate determined by the owner of the facility; and (C)provides an array of such services sufficient to meet a significant portion of the needs of ex-offenders for ex-offender support services. (3)

Rent limitations

The portion of the monthly rent payable by the occupant of each unit in the building may not exceed 30 percent of the adjusted monthly income (as such term is defined in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)) of the occupant. (g)

Residency requirements

(1)

In general

An ex-offender meets the residency requirements for a qualified ex-offender residential building if such ex-offender— (A)has a low income; (B)is participating in an ex-offender support services program as described in paragraph (3)(B); (C)has not been prohibited from residency under paragraph (4); and (D)commences occupancy of a unit in a qualified ex-offender residential building on a date that is not later than— (i)in the case of an ex-offender who has been discharged from prison, jail, a half-way house, or any other correctional facility, 12 months after such discharge; or (ii)in the case of any ex-offender whose sentence did not include confinement to a correctional facility, 12 months after the date of the ex-offender’s conviction. (2)

Low-income

For purposes of this section, an ex-offender is considered to have a low income if, at the commencement of the ex-offender’s occupancy of a residential unit, the income (if any) of the ex-offender does not exceed 60 percent of area median gross income (as determined consistent with section 8 of the United States Housing Act of 1937). (3)

Participation in ex-offender support services program

(A)

Program

For purposes of this section, an ex-offender support services program is a program for the provision of specific ex-offender support services for an ex-offender that— (i)is created and managed by a coordinating individual or entity having education, training, and experience with ex-offenders and their support services needs; (ii)is specifically designed to meet the needs of the particular ex-offender for ex-offender support services; (iii)sets forth a specific duration over which the ex-offender support services are to be provided and goals by which to assess the progress of the ex-offender; and (iv)provides for continual oversight to monitor the progress and needs of the ex-offender and to ensure that the ex-offender is being provided the appropriate ex-offender support services and is complying with the requirements of the program. (B)

Participation

For purposes of this section, an ex-offender is considered to be participating in an ex-offender support services program if the ex-offender— (i)has entered into a written agreement with the coordinator for the program that— (I)sets forth the ex-offender support services that are appropriate for, and will be made available to, the ex-offender and the duration of the program for the ex-offender; and (II)provides that the ex-offender’s continued attendance at scheduled program meetings and events and obtaining of program services are a condition of the ex-offender’s continued residency in the facility; and (ii)is not in default with regard to the ex-offender’s obligations under such agreement. (C)

Ex-offender support services

For purposes of this section, the term ex-offender support services means services that assist ex-offenders to develop skills necessary for life outside of the environment of a correctional institution, and includes— (i)job training; (ii)employment counseling and placement; (iii)entrepreneurial training; (iv)financial management training; (v)homeownership and rental counseling; (vi)drug and alcohol abuse counseling; (vii)self-esteem and peer development assistance; (viii)anger management counseling; (ix)health care services, including mental health services and behavioral counseling; (x)probation services; (xi)family and crisis management counseling; and (xii)general educational assistance and counseling. (4)

Limitation on term of residency

An ex-offender may not reside in an ex-offender residential facility at any time after the expiration of the 2-year period beginning upon the commencement of the ex-offender’s occupancy in the ex-offender residential facility. (h)

Ex-offender

For purposes of this section, the term ex-offender means any individual who has been convicted of a crime under State or Federal law which is punishable by imprisonment for a maximum term of 6 months or longer. (i)

Allocation and determination of credit

(1)

In general

Except as otherwise provided in this subsection, rules similar to the rules of section 42(h) (other than subparagraphs (E) and (F) of paragraph (1) thereof) shall apply with respect to allocating and determining any credit under this section. (2)

State housing credit ceiling

For purposes of this section: (A)

In general

The State housing credit ceiling shall be calculated by substituting the amount determined under section 42(h)(3)(C)(ii) with the State allocation. (B)

State allocation

(i)

Competitive process

The State allocation for any State shall be determined by the Secretary, utilizing a competitive application process. (ii)

Basis for competition

In determining the State allocation for any State, the Secretary shall consider the following: (I)Need, as determined by the ratio between the reported number of sentenced prisoners released from State or Federal jurisdiction in the applicant State during the most recent year for which information is available, and the total population of the applicant State. (II)The commitment of Federal and other funds within the applicant State for operating costs and ex-offender support services in projects that are to be funded by the State temporary ex-offender low-income housing credit. (III)The applicant’s plan to collect available information about the success of the program with respect to increased housing stability and lack of additional incarceration of ex-offeder participants. (IV)The applicant’s organizational capacity for the successful development or operation of qualified ex-offender residential buildings. (V)The goal of making allocations to the largest feasible number of States. (iii)

Aggregate amount

The aggregate amount of State allocations for any year shall be $85,000,000. (C)

Building allocations

The Secretary may allocate a housing credit dollar amount to any building. In making such allocations, the Secretary shall utilize a competitive application process and shall consider the factors described in subparagraph (B)(ii). Any allocation made under this subparagraph shall be treated for purposes of this subsection as part of the State allocation for the State in which such building is located. (D)

Unused housing credit carryovers

(i)

In general

The State housing credit ceiling shall be calculated by substituting the amount determined under section 42(h)(3)(C)(iv) with the State carryover allocation. (ii)

State carryover allocation

The State carryover allocation for any State shall be determined by the Secretary in a manner similar to the manner in which the State allocation is determined under subparagraph (B). The aggregate amount of State carryover allocations for any year shall be equal to the aggregate unused housing credit carryovers (within the meaning of section 42(h)(3)(D)) of all States for the preceding calendar year. (3)

Required involvement of qualified non-profit organizations

For purposes of this section, section 42(h)(5)(A) shall be applied by substituting 75 for 90. (j)

Recapture of credit

Rules similar to the rules of subsections (i)(1) and (j) of section 42 shall apply for purposes of this section. (k)

Application of at-risk rules

Rules similar to the rules of section 42(k) shall apply for purposes of this section. (l)

Certification and other reports to Secretary

Subject to such regulations as the Secretary may prescribe, rules similar to the rules of section 42(l) shall apply for purposes of this section. (m)

Responsibilities of the Secretary and housing credit agencies

Rules similar to the rules of subsections (m) and (n) of section 42 shall apply for purposes of this section.

(b)

Inclusion as current year business credit

Section 38(b) of the Internal Revenue Code of 1986 is amended by striking and at the end of paragraph (29), by striking the period at the end of paragraph (30) and inserting , and, and by adding at the end the following new paragraph:

(31)the ex-offender low-income housing credit under section 45N(a).

(c)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Sec. 45N. Ex-offender low-income housing credit.

(d)

Effective date

The amendments made by this section shall apply to property placed in service during taxable years beginning after the date of the enactment of this Act.