[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1330 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                S. 1330

 To amend the Internal Revenue Code of 1986 to provide incentives for 
 employer-provided employee housing assistance, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 29, 2005

 Mrs. Clinton (for herself, Mr. Smith, Mr. Martinez, Mr. Reed, and Mr. 
    Durbin) introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide incentives for 
 employer-provided employee housing assistance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Housing America's Workforce Act''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) Resurgent housing markets are pricing out low- and 
        moderate-income families and are producing few lower-cost 
        units. Housing production has failed to keep pace with job 
        growth, also sending housing prices sky-high.
            (2) In many markets, housing costs have far outgrown the 
        rate of inflation and the gap between wages and housing costs 
        is widening, pushing affordable housing beyond the reach of an 
        increasing number of working families.
            (3) Low- and moderate-income working families--especially 
        in ``hot market'' areas--face extraordinary difficulty finding 
        affordable housing.
            (4) Despite the lowest mortgage rates in our Nation's 
        history and Federal investments in rental housing and homebuyer 
        assistance, millions of working families still find it 
        extremely difficult to rent or purchase a home.
            (5) The United States Department of Housing and Urban 
        Development (HUD) considers housing affordable when a family 
        spends no more than 30 percent of its monthly income on rent 
        and utilities. Entry-level wage earners with annual incomes of 
        up to $30,000 spending no more than 30 percent of their income 
        on rent can afford to pay up to $750 for rent. In the high job-
        growth areas, such rents are not readily available.
            (6) According to a study by the Center for Housing Policy 
        in Washington, DC, the latest data available shows that in 
        2003, approximately 5 million families paid more than half of 
        their income for housing or lived in dilapidated conditions, or 
        both. This was despite the fact they were working full time 
        jobs. Moreover, the number of working families with critical 
        housing problems has increased 67 percent between 1997 and 
        2003.
            (7) Affordable housing is the key to creating and 
        sustaining healthy, economically vibrant communities.
            (8) Many workers who fill jobs that provide the backbone of 
        our communities--teachers, firefighters, police officers, hotel 
        and restaurant workers--often cannot afford to live in the 
        communities in which they serve.
            (9) This has led to longer commutes resulting in increased 
        traffic and pollution, lost productivity, and family stress. 
        High-cost housing markets also hurt the ability of our 
        businesses to attract new talent and the ability of our cities 
        to attract new business.
            (10) The lack of affordable housing, and resulting high 
        housing costs in major regional economies across the United 
        States have been shown to cause or contribute to labor 
        shortages by acting as a brake on the in-migration of new 
        employees while spurring out-migration of both workers and 
        employers.
            (11) Both the public and private sectors have recognized 
        employer-assisted housing (EAH) programs as a strategy that can 
        be tailored to address regional jobs-housing imbalances, 
        revitalize communities, and support smart growth practices.
            (12) For employees working in places where housing is 
        unaffordable or scarce, or both and for those employers 
        operating in distressed communities or who are having 
        difficulty recruiting and retaining workers in locales where 
        housing is unaffordable or scarce, employer-assisted housing 
        can be a very much desired benefit and a cost-effective 
        business strategy; and there are millions of employees and 
        thousands of business that fit into this category.
            (13) Employer-assisted housing is an innovative local 
        solution that has increased affordable housing opportunities 
        for thousands of working families across America while 
        benefitting the economy.
            (14) According to findings of the Rutgers University 
        American Affordable Housing Institute, employer-assisted 
        housing increases productivity by reducing commuting time as 
        well as saves money on recruitment and retention.
            (15) Surveys and research on employer attitudes towards 
        employer-assisted housing report that employers continue to 
        have difficulty obtaining information about employer-assisted 
        housing. As a result, firms have difficulty assessing the costs 
        of a housing benefit program.
            (16) In most parts of the country, EAH has not been 
        actively promoted by human resources professionals, the 
        mainstream housing industry, including lenders, buildings and 
        real estate professionals, or by the affordable housing 
        industry, led by community-based nonprofit organizations and 
        national intermediaries.
            (17) The future growth of employer-assisted housing 
        programs will remain dependent upon increasing individual 
        employer knowledge of these programs.
            (18) Employer-assisted housing programs promise to be 
        another creative solution in the search for more affordable 
        housing. EAH programs will not solve the Nation's housing 
        problems but such programs do seek to address the challenge 
        from a new perspective and allow the private sector to play a 
        direct role in promoting housing affordability. Additionally, 
        EAH programs can help to promote redevelopment and reinvestment 
        in distressed communities.
            (19) Federal tax laws, with some exception, do not 
        currently allow employees to exclude housing assistance 
        received from an employer from their taxable income. By 
        excluding the housing assistance from an employees' taxable 
        income, the employee receives the full value of the housing 
        benefit.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To expand affordable housing opportunities to low- and 
        moderate-income working individuals and families.
            (2) To encourage employers, counties, and municipalities to 
        invest in employer-assisted housing programs.
            (3) To amend the Internal Revenue Code of 1986 to provide a 
        tax credit to partially offset the costs of employer-assisted 
        housing programs and to exclude from income amounts received by 
        an employee from an employer as assistance towards the purchase 
        of a principal residence and towards rental housing.
            (4) To develop programs to publicize the employer-assisted 
        housing concept and for outreach efforts to high-potential 
        employers.

SEC. 3. TAX CREDIT FOR EMPLOYER-PROVIDED EMPLOYEE HOUSING ASSISTANCE.

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

``SEC. 45J. EMPLOYER-PROVIDED EMPLOYEE HOUSING ASSISTANCE.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, the 
        employer-provided employee housing assistance credit determined 
        under this section for any taxable year is an amount equal to 
        50 percent of the qualified housing expenses paid by the 
        employer during the taxable year if such expenses are furnished 
        pursuant to a program described in subsection (b).
            ``(2) Per employee limitation.--
                    ``(A) In general.--The aggregate amount of 
                qualified housing expenses taken into account with 
                respect to any eligible employee for any taxable year 
                shall not exceed, when added to any qualified housing 
                expenses taken into account for any preceding taxable 
                year with respect to such employee--
                            ``(i) in the case of homeownership 
                        assistance, the lesser of $10,000 or 6 percent 
                        of the purchase price of such employee's 
                        principal residence, and
                            ``(ii) in the case of rental assistance, 
                        $2,000.
                    ``(B) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning after 2006, each dollar 
                        amount referred to in subparagraph (A) shall be 
                        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 the calendar year in 
                                which the taxable year begins, by 
                                substituting `2005' for `1992'.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the nearest multiple 
                        of $50.
    ``(b) Housing Assistance Program.--For purposes of this section, a 
housing assistance program is a separate written plan of an employer 
for the exclusive benefit of such employer's employees to provide the 
qualified housing expenses of such employees and which meets 
requirements similar to the requirements of paragraphs (2) through (6) 
of section 127(b).
    ``(c) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible employee.--The term `eligible employee' 
        means any individual--
                    ``(A) employed by an employer,
                    ``(B) whose household income does not exceed 120 
                percent of the area median gross income (adjusted for 
                household size) for the area in which the housing is 
                located, and
                    ``(C) in the case of homeownership assistance, who 
                is a qualified homebuyer.
        If the housing with respect to such employee is located in a 
        high housing cost area (as defined in section 143(f)(5)(C)), 
        the income limitation under subparagraph (B) shall be adjusted 
        (but not reduced) by the application of the rule under section 
        143(f)(5) by substituting `120 percent' for `115 percent' in 
        subparagraph (B)(I) thereof.
            ``(2) Qualified housing expenses.--
                    ``(A) In general.--The term `qualified housing 
                expenses' means rental assistance or homeownership 
                assistance towards the lease or purchase of housing.
                    ``(B) Rental assistance.--The term `rental 
                assistance' means assistance with security deposits and 
                rental payments.
                    ``(C) Homeownership assistance.--The term 
                `homeownership assistance' means assistance for the 
                purchase of a principal residence, including--
                            ``(i) payment of qualified acquisition 
                        costs (as defined in section 72(t)(8)(C)),
                            ``(ii) providing (or reducing the costs of) 
                        financing, including the funding of a permanent 
                        interest rate buydown,
                            ``(iii) contributions to second mortgage 
                        pools or low interest loan programs accessible 
                        to eligible employees,
                            ``(iv) mortgage guarantee programs for the 
                        repayment of any loans in default that are 
                        secured by an eligible employee and guaranteed 
                        by the employer,
                            ``(v) contributions to eligible employee 
                        savings plans, including Individual Development 
                        Accounts (within the meaning of section 404(h) 
                        of the Social Security Act), designated 
                        exclusively for the purchase of a home, and
                            ``(vi) contributions to homebuyer education 
                        and homeownership counseling of eligible 
                        employees.
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121, except such 
        term shall not include a residence with a purchase price 
        exceeding the greater of--
                    ``(A) 90 percent of the average area purchase price 
                applicable to the residence, or
                    ``(B) 3.5 times the family income limit applicable 
                to the eligible employee under paragraph (1)(B).
            ``(4) Qualified homebuyer.--
                    ``(A) In general.--The term `qualified homebuyer' 
                means--
                            ``(i) any first-time homebuyer, or
                            ``(ii) any individual if such individual 
                        (and if married, such individual's spouse) had 
                        no present ownership in a principal residence 
                        located within 50 miles of the individual's 
                        employer during the 2-year period ending on the 
                        date of the purchase of the principal residence 
                        to which this section applies.
                    ``(B) First-time homebuyer.--The term `first-time 
                homebuyer' means any individual if such individual (and 
                if married, such individual's spouse) had no present 
                ownership in a principal residence during the 2-year 
                period ending on the date of the purchase of the 
                principal residence to which this section applies.
                    ``(C) One-time only.--If an individual is treated 
                as a qualified homebuyer with respect to any principal 
                residence, such individual may not be treated as a 
                qualified homebuyer with respect to any other principal 
                residence.
            ``(5) Applicable rules.--Rules similar to the rules under 
        paragraphs (3), (4), and (5)(A) of section 127(c) shall apply 
        for the purposes of this section.
    ``(d) Treatment of Employers Not Able to Use Entire Credit.--
            ``(1) Allowance of credit.--Except as otherwise provided in 
        this subsection any credit allowable under subsection (a) to 
        any employer described in paragraph (2)(C) may be transferred 
        as provided in this subsection and the determination as to 
        whether the credit is allowable shall be made without regard to 
        the tax-exempt status of the employer.
            ``(2) Transfer of credit.--
                    ``(A) In general.--An employer described in 
                subparagraph (C) may transfer any credit to which 
                paragraph (1) applies through an assignment to any 
                other person. Such transfer may be revoked only with 
                the consent of the Secretary.
                    ``(B) Regulations.--The Secretary shall prescribe 
                such regulations as necessary to ensure that any credit 
                described in subparagraph (A) is assigned once and not 
                reassigned by such other person.
                    ``(C) Employer described.--An employer is described 
                in this subparagraph if the employer is--
                            ``(i) a State or political subdivision 
                        thereof, the District of Columbia, a possession 
                        of the United States, or an agency or 
                        instrumentality of any of the foregoing,
                            ``(ii) an Indian tribal government (within 
                        the meaning of section 7871) or any agency or 
                        instrumentality thereof, or
                            ``(iii) any entity exempt from taxation 
                        under section 501(a).
                    ``(D) Transfer proceeds treated as arising from 
                essential government function.--Any proceeds derived by 
                a person described in clause (i) or (ii) of 
                subparagraph (C) from the transfer under subparagraph 
                (A) of any credit to which paragraph (1) applies shall 
                be treated as arising from the exercise of an essential 
                government function.
                    ``(E) Credit not income.--Any transfer under 
                subparagraph (A) of any credit to which paragraph (1) 
                applies shall not be treated as income for purposes of 
                section 501(c)(12).''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of the Internal Revenue Code of 1986 (defining current year 
business credit) is amended by striking ``plus'' at the end of 
paragraph (18), by striking the period at the end of paragraph (19) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(20) the employer-provided employee housing assistance 
        credit determined under section 45J(a).''.
    (c) Conforming Amendments.--
            (1) Subsection (c) of section 196 of the Internal Revenue 
        Code of 1986 is amended by striking ``and'' at the end of 
        paragraph (11), by striking the period at the end of paragraph 
        (12) and inserting ``, and'', and by adding at the end the 
        following new paragraph:
            ``(13) the employer-provided employee housing assistance 
        credit determined under section 45J(a).''.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 45J. Employer-provided employee housing assistance.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2005.

SEC. 4. EXCLUSION FROM INCOME OF EMPLOYER-PROVIDED EMPLOYEE HOUSING 
              ASSISTANCE.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 139A the 
following new section:

``SEC. 139B. EMPLOYEE HOUSING ASSISTANCE PROGRAMS.

    ``(a) Exclusion From Gross Income.--
            ``(1) In general.--Gross income of an eligible employee 
        does not include amounts paid or incurred by the employer of 
        such employee for qualified housing expenses provided to the 
        employee if the assistance is furnished pursuant to a program 
        described in subsection (b).
            ``(2) Limitation.--
                    ``(A) In general.--The aggregate amount of 
                qualified housing expenses which may be excluded under 
                paragraph (1) with respect to any eligible employee for 
                any taxable year shall not exceed, when added to any 
                qualified housing expenses excluded in any preceding 
                taxable year with respect to such employee--
                            ``(i) in the case of homeownership 
                        assistance, the lesser of $10,000 or 6 percent 
                        of the purchase price of such employee's 
                        principal residence, and
                            ``(ii) in the case of rental assistance, 
                        $2,000.
                    ``(B) Inflation adjustment.--
                            ``(i) In general.--In the case of any 
                        taxable year beginning after 2006, each dollar 
                        amount referred to in subparagraph (A) shall be 
                        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 the calendar year in 
                                which the taxable year begins, by 
                                substituting `2005' for `1992'.
                            ``(ii) Rounding.--If any amount as adjusted 
                        under clause (i) is not a multiple of $50, such 
                        amount shall be rounded to the nearest multiple 
                        of $50.
    ``(b) Housing Assistance Program.--For purposes of this section, a 
housing assistance program is a separate written plan of an employer 
for the exclusive benefit of such employer's employees to provide the 
qualified housing expenses of such employees and which meets 
requirements similar to the requirements of paragraphs (2) through (6) 
of section 127(b).
    ``(c) Definitions; Special Rules.--For purposes of this section--
            ``(1) In general.--Any term used in section 45J which is 
        also used in this section shall have the same meaning as given 
        such term by section 45J.
            ``(2) Applicable rules.--Rules similar to the rules under 
        paragraphs (3), (4), and (5)(A) of section 127(c) shall apply 
        for purposes of this section.
            ``(3) Basis adjustment.--For purposes of this subtitle, if 
        an exclusion is allowed under subsection (a) with respect to a 
        residence, the basis of such residence shall be reduced by the 
        amount of the exclusion.''.
    (b) Reporting Requirements.--Subsection (d)(1) of section 6039D of 
the Internal Revenue Code of 1986 (relating to returns and records with 
respect to certain fringe benefit plans) is amended by striking ``or 
137'' and inserting ``137, or 139B''.
    (c) Conforming Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of the Internal Revenue Code of 1986 is amended by 
        inserting after the item relating to section 139A the following 
        new item:

``Sec. 139B. Employee housing assistance programs.''.
            (2) Subsection (a) of section 1016 of such Code (relating 
        to adjustments to basis) is amended by striking ``and'' at the 
        end of paragraph (30), by striking the period at the end of 
        paragraph (31) and inserting ``, and'', and by adding at the 
        end the following new paragraph:
            ``(32) in the case of a residence with respect to which 
        amounts were excluded from income under section 139B, to the 
        extent provided in section 139B(c)(3).''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning December 31, 2005.

SEC. 5. GRANTS TO COVER EMPLOYER-ASSISTED HOUSING PROGRAM COSTS.

    (a) Grants Authorized.--
            (1) In general.--The Secretary may award a grant to an 
        eligible entity to pay--
                    (A) the operating costs of administering an 
                employer-assisted housing program;
                    (B) for technical assistance provided by the 
                eligible entity to an employer in connection with such 
                a program; and
                    (C) for costs associated with promoting, 
                publicizing, or otherwise attempting to distribute 
                information relating to such a program.
            (2) Duration.--Grants may be awarded under this subsection 
        during fiscal years 2006, 2007, and 2008.
            (3) Award basis.--The Secretary shall award grants under 
        this section on a competitive basis.
    (b) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity shall demonstrate that it is--
            (1) a nonprofit housing organization with a relevant 
        mission and demonstrated track record in housing counseling or 
        employer-assisted housing contracted by an employer to assist 
        the employer in establishing or maintaining an employer-
        assisted housing program; or
            (2) a city, county, town, township, parish, village, 
        hamlet, or other general purpose political subdivision of a 
        State that seeks to establish or maintain, or otherwise 
        participate in an employer-assisted housing program for its own 
        employees.
    (c) Application.--Each eligible entity seeking a grant under this 
section shall submit an application to the Secretary at such time, in 
such manner, and containing such information as the Secretary may 
require.
    (d) Limitation on Use of Funds.--A grant awarded to an eligible 
entity under this section shall be used only for the purposes described 
under subsection (a).
    (e) Reports.--
            (1) In general.--Each eligible entity receiving a grant 
        under this section shall annually prepare and submit to the 
        Secretary a report that describes the--
                    (A) amount of grant funds expended during the year;
                    (B) total amount--
                            (i) of funds expended during the year to 
                        administer an employer-assisted housing 
                        program; and
                            (ii) of down payment assistance provided by 
                        such a program;
                    (C) total number of employees utilizing such a 
                program;
                    (D) number of employees utilizing such a program--
                            (i) who are time homebuyers;
                            (ii) who are previous homeowners; and
                            (iii) who live in high-cost housing areas;
                    (E) average--
                            (i) income of employees utilizing such a 
                        program;
                            (ii) age of employees utilizing such a 
                        program; and
                            (iii) cost of a home purchased under such a 
                        program;
                    (F) ethnicity of employees utilizing such a 
                program; and
                    (G) number of housing units affected by such a 
                program.
            (2) Clearinghouse and dissemination.--
                    (A) In general.--Not later than 1 year after the 
                date of enactment of this Act, the Secretary shall 
                establish a national clearinghouse, including a 
                website, designed--
                            (i) to provide information about employer-
                        assisted housing programs to--
                                    (I) Federal, State, and local 
                                government entities; and
                                    (II) interested groups, businesses, 
                                persons, and organizations; and
                            (ii) to collect and disseminate the 
                        information gathered from the reports required 
                        under paragraph (1).
                    (B) Webposting.--The Secretary shall ensure that--
                            (i) each report submitted under paragraph 
                        (1) is posted to the website of the national 
                        clearinghouse established under subparagraph 
                        (A); and
                            (ii) the website of the Department of 
                        Housing and Urban Development provides a 
                        hyperlink to such reports on the website of the 
                        national clearinghouse.
    (f) Definitions.--As used in this section:
            (1) Secretary.--The term ``Secretary'' means the Secretary 
        of Housing and Urban Development.
            (2) Nonprofit housing organization.--The term ``nonprofit 
        housing organization'' means any organization that--
                    (A) the Internal Revenue Service has ruled is 
                exempt from income taxation under paragraphs (3), (4), 
                or (5) of section 501(c) of the Internal Revenue Code 
                of 1986; and
                    (B) has as its stated purpose to produce, maintain, 
                operate, or promote affordable housing.
    (g) Authorization of Appropriations.--There are authorized to be 
appropriated $5,000,000 for each of fiscal years 2006, 2007, and 2008 
to carry out this section, which shall remain available until expended.

SEC. 6. EVALUATION OF EMPLOYER-ASSISTED HOUSING PROGRAMS.

    (a) In General.--A study of employer-assisted programs shall be 
carried out in accordance with subsection (b) for the purposes of 
evaluating the effects of the tax benefits provided under sections 3 
and 4 and the grant program established under section 5 on--
            (1) such programs; and
            (2) the private sector resources leveraged to further fund 
        such programs.
    (b) National Evaluation.--
            (1) In general.--The Comptroller General of the United 
        States (in this section referred to as the ``Comptroller 
        General'') shall conduct the study required under subsection 
        (a).
            (2) Requirements.--The study required under subsection (a) 
        shall include an analysis and summary of--
                    (A) the total number of--
                            (i) employers participating in employer-
                        assisted housing programs;
                            (ii) States that have enacted employer-
                        assisted housing program legislation; and
                            (iii) States considering enacting such 
                        legislation;
                    (B) the extent to which Federal funds are being 
                used to support employer-assisted housing programs;
                    (C) the size and nature of existing Federal, State, 
                and private employer-assisted housing programs;
                    (D) the types of assistance offered to employees 
                under employer-assisted housing programs;
                    (E) the distribution of employers offering 
                employer-assisted housing programs, including a review 
                of the--
                            (i) geographic distribution of such 
                        employers;
                            (ii) industry distribution of such 
                        employers; and
                            (iii) size distribution of such employers;
                    (F) the extent to which employer-assisted housing 
                programs are located in ``high-cost'' housing markets;
                    (G) the extent to which employers are able to, and 
                have made, use of the tax benefits provided under this 
                Act;
                    (H) the information contained in the reports 
                submitted under section 5(e);
                    (I) any other information that the Comptroller 
                General determines would be relevant and helpful to the 
                Secretary of Housing and Urban Development (in this 
                section referred to as the ``Secretary'') in evaluating 
                the effects of the tax benefits provided under sections 
                3 and 4 and the grant program established under section 
                5.
    (c) Consultation.--In conducting the study required under 
subsection (a), the Comptroller General shall consult with--
            (1) appropriate Federal, State, and local government 
        entities; and
            (2) interested groups, businesses, persons, universities, 
        and organizations.
    (d) Report.--
            (1) Interim report.--Not later than January 1, 2008, the 
        Comptroller General shall submit to the Secretary an interim 
        report on the findings of the study required under subsection 
        (a).
            (2) Final report.--Not later than December 31, 2009, the 
        Comptroller General shall submit to the Secretary a final 
        report that describes--
                    (A) the findings of the study required under 
                subsection (a); and
                    (B) any conclusions and recommendations of such 
                study.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated $1,000,000 to carry out this section.
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