II 111th CONGRESS 2d Session S. 3141 IN THE SENATE OF THE UNITED STATES March 18, 2010 Mr. Bingaman (for himself, Mr. Menendez, Mr. Kerry, Ms. Cantwell, Ms. Stabenow, and Mr. Schumer) 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 special rules for treatment of low-income housing credits, and for other purposes.

1.

Short title

This Act may be cited as the Low Income Housing Tax Credit Recovery Act of 2010.

2.

Five-year carryback of low-income housing credit

(a)

In general

Subsection (a) of section 39 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (4)

5-year carryback of low-income housing credit

(A)

In general

In the case of an applicable low-income housing credit (within the meaning of section 38(c)(6)(C))— (i)this section shall be applied separately from the business credit (other than the low-income housing credit), and (ii)paragraph (1) shall be applied by substituting each of the 5 taxable years for the taxable year in subparagraph (A) thereof. . (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007, and to carrybacks of credits from such taxable years.

3.

Carryback of new investments

(a)

In general

Section 42(f) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (6)

Special rule for certain investments in 2010 and 2011

(A)

In general

In the case of a taxpayer who enters into an agreement described in section 38(c)(6)(D)(i)(I) (without regard to the applicable date), which satisfies the requirement of section 38(c)(6)(D)(i)(II), after December 31, 2009, and before January 1, 2012, then solely for purposes of determining the taxable year in which the low-income housing credit under this section may be taken into account for purposes of section 38, and the amount of the credit so taken into account— (i)the preceding paragraphs of this subsection shall not apply, (ii)the credit period with respect to the housing credit dollar amount to be allocated under such agreement shall be the 1 taxable year in which the taxpayer enters into such agreement, (iii)subsections (b) and (c)(1) shall not apply, and (iv)the amount of the credit under this section which is taken into account in the taxable year described in clause (ii) shall be the housing credit dollar amount to be allocated under such agreement. (B)

Requirements of section unaffected

Except as provided in subparagraph (A), the provisions of this section shall apply to any building to which an agreement described in subparagraph (A) applies as if such subparagraph had not been enacted. (C)

Recapture of excess credit

If, at the end of the credit period with respect to any building (without regard to subparagraph (A)), the amount of the credit taken into account under subparagraph (A)(iv) with respect to such building exceeds the total amount of the credit which would have been allowed under this section with respect to such building during such credit period but for the application of subparagraph (A), then the amount of such excess shall be recaptured as if it were included in the credit recapture amount under subsection (j). . (b)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2009.

4.

Allowing low-income housing credits to offset 100 percent of federal income tax liability

(a)

In General

Subsection (c) of section 38 is amended by adding at the end the following new paragraph: (6)

Allowing low-income housing credit to offset 100 percent of federal income tax liability

(A)

In general

In the case of applicable low-income housing credits— (i)this section shall be applied separately with respect to such credits, (ii)in applying paragraph (1) to such credits— (I)the tentative minimum tax shall be treated as being zero, and (II)the limitation under paragraph (1) (as modified by subclause (I)) shall be the net income tax (as defined in paragraph (1)) reduced by the credit allowed under subsection (a) for the taxable year (other than the applicable low-income housing credits), and (iii)the excess credit for such taxable year shall, solely for purposes of determining the amount of such excess credit which may be carried back to a preceding taxable year, be increased by the amount of business credit carryforwards which are carried to such taxable year, to which this subparagraph applies, and which are not allowed for such taxable year by reason of the limitation under paragraph (1) (as modified by clause (ii)). (B)

Increase in limitation for taxable years to which excess applicable low-income housing credits are carried back

(i)

In general

Solely for purposes of determining the portion of any excess credit described in subparagraph (A)(iii) for which credit will be allowed under subsection (a)(3) for any preceding taxable year, except as provided in clause (ii), the limitation under paragraph (1) for such preceding taxable year shall be determined under rules similar to the rules described in subparagraph (A). (ii)

Ordering rule

If the excess credit described in subparagraph (A)(iii) includes business credit carryforwards from preceding taxable years, such excess credit shall be treated as allowed for any preceding taxable year on a first-in first-out basis. (C)

Applicable low-income housing credits

For purposes of this subpart, the term applicable low-income housing credits means the credit determined under section 42— (i)to the extent attributable to buildings placed in service after the date of the enactment of this subparagraph, and (ii)in the case of any other buildings, for taxable years beginning in 2008, 2009, and 2010 (and to business credit carryforwards with respect to such buildings carried to such taxable years) to the extent provided in subparagraph (D). (D)

Previously placed in service buildings

(i)

In general

Subparagraph (C)(ii) shall apply to such credits for such a taxable year only— (I)if the taxpayer has entered into a binding commitment to invest equity not later than the applicable date, with respect to an investment in a future project (which is binding on the taxpayer and all successors in interest) which specifies the dollar amount of such investment, and (II)to the extent such credits do not exceed the dollar amount of such proposed investment. (ii)

Applicable date

For purposes of this subparagraph, the applicable date is— (I)in the case of taxable years beginning in 2008 and 2009, September 15, 2010, or (II)in the case of a taxable year beginning in 2010, the due date (including extensions of time) for filing the taxpayer’s return for such taxable year. . (b)

Effective Date

The amendment made by this section shall apply to taxable years beginning after December 31, 2007, and to carrybacks of credits from such taxable years.