article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Job Creation and Affordable Housing Act of 2010''. SEC. 2. GRANTS TO STATES FOR LOW-INCOME HOUSING PROJECTS IN LIEU OF LOW-INCOME HOUSING CREDITS FOR BOND-SUBSIDIZED HOUSING PROJECTS. (a) In General.--The Secretary of the Treasury shall make a grant to each State in an amount equal to such State's low-income bond- subsidized housing election amount. (b) Low-Income Bond-Subsidized Housing Election Amount.--For purposes of this section-- (1) In general.--The term ``low-income bond-subsidized housing election amount'' means, with respect to any State, such amount as the State may elect which does not exceed 85 percent of the State's bond-subsidized credit amount. (2) Bond-subsidized credit amount.--The term ``bond- subsidized credit amount'' means, with respect to any State, the aggregate amount of low-income housing credits which the State determines would, but for section 42(i)(9) of the Internal Revenue Code of 1986, be awarded under section 42(h)(4)(B) of such Code times 10 with respect to qualified low-income buildings receiving an allocation of qualified residential rental project bonds of such State during 2010. (3) Qualified residential rental project bonds.--The term ``qualified residential rental project bond'' means, with respect to any State, any qualified bond (as defined in section 141(e) of the Internal Revenue Code of 1986) if such bond-- (A) is issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide qualified residential rental projects (within the meaning of section 142 of such Code), and (B) is taken into account under section 146 of such Code with respect to the State ceiling applicable to such State. (c) Subawards for Low-Income Buildings.-- (1) In general.--A State receiving a grant under this section shall use such grant to make subawards to finance the construction or acquisition and rehabilitation of qualified low-income buildings which have received the corresponding allocation of qualified residential rental project bonds referred to in subsection (b)(2). (2) Subawards subject to same requirements as low-income housing credit allocations.--Any such subaward with respect to any qualified low-income building may be in the form of a grant or a loan of any duration and shall be made in the same manner and shall be subject to the same limitations (including rent, income, and use restrictions on such building) as an allocation of housing credit dollar amount allocated by the State housing credit agency of such State under section 42 of the Internal Revenue Code of 1986, except that such subawards shall not be limited by, or otherwise affect, the State housing credit ceiling applicable to such agency. (3) Compliance and asset management.--A State receiving a grant under this section shall perform asset management functions to ensure compliance with section 42 of the Internal Revenue Code of 1986 and the long-term viability of buildings funded by any subaward under this section. A State may collect reasonable fees from a subaward recipient to cover expenses associated with the performance of its duties under this paragraph, including the reasonable costs of administering such subawards. A State may retain an agent or other private contractor to satisfy the requirements of this paragraph. (4) Recapture.--A State receiving a grant under this section shall impose conditions or restrictions, including a requirement providing for recapture, on any subaward under this section so as to assure that the building with respect to which such subaward is made remains a qualified low-income building during the compliance period. Any amounts of recapture shall be proportional to the length of time of the noncompliance compared to the 15-year compliance period and the percentage of qualified basis out of compliance compared to the total qualified basis. Any such recapture shall be payable to the Secretary of the Treasury for deposit in the general fund of the Treasury and may be enforced by means of liens or such other methods as the Secretary of the Treasury determines appropriate. A State housing credit agency may subordinate any such lien (or other security interest) to other loans made by third parties. (d) Reallocation of Bond Authority.--A State housing credit agency shall establish a process in which applicants that are allocated bonds and receive a subaward pursuant to subsection (c) are required to demonstrate good faith efforts to obtain purchasers for such bonds. If a subawardee is unable to obtain purchasers or if the State makes a determination that reallocation of bond authority will increase the total funds available to the State to build and rehabilitate affordable housing, a subawardee may return its bond allocation to the State without affecting its subaward under subsection (c) and the State may reallocate such bond authority only for qualified residential rental projects. Reallocated bonds shall not be taken into account for purposes of determining eligibility for low-income housing credits under section 42(h)(4) of the Internal Revenue Code of 1986 or for purposes of determining eligibility for grants under subsection (c). (e) Return of Unused Grant Funds.--Any grant funds not used to make subawards under this section before January 1, 2012, shall be returned to the Secretary of the Treasury on such date. The portion of any subaward which is not disbursed before such date shall be returned to the Secretary of the Treasury on such date unless the subawardee has paid or incurred before January 1, 2012, at least 30 percent of the subawardee's total adjusted basis in land and depreciable property that is reasonably expected to be part of the low-income housing building with respect to which such subaward is made. The portion of any subaward which is not disbursed before January 1, 2013, shall be returned to the Secretary of the Treasury on such date. Any subawards returned to the State housing credit agency on or after January 1, 2012, shall be promptly returned to the Secretary of the Treasury. Any amounts returned to the Secretary of the Treasury under this subsection shall be deposited in the general fund of the Treasury. (f) Definitions.--Any term used in this section which is also used in section 42 of the Internal Revenue Code of 1986 shall have the same meaning for purposes of this section as when used in such section 42. Any reference in this section to the Secretary of the Treasury shall be treated as including the Secretary's delegate. (g) Appropriations.--There is hereby appropriated to the Secretary of the Treasury such sums as may be necessary to carry out this section. SEC. 3. COORDINATION OF LOW-INCOME HOUSING CREDIT WITH LOW-INCOME HOUSING GRANTS. (a) In General.--Paragraph (9) of section 42(i) of the Internal Revenue Code of 1986 is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting after subparagraph (A) the following new subparagraphs: ``(B) Denial of credit for bond-subsidized buildings receiving subawards with 2010 grant funds.-- No credit shall be determined under this section with respect to any qualified low-income building to the extent of the bond-subsidized credit amount determined with respect to such building under section 2 of the Job Creation and Affordable Housing Act of 2010 if any subaward is made with respect to such building under such section.''. (b) Grants and Loans Not To Reduce Basis.--Subparagraph (C) of section 42(i)(9) of such Code, as redesignated by this section, is amended by striking ``by the amount of any grant described in subparagraph (A)'' and inserting ``by reason of any grant or loan made under section 1602 of the American Recovery and Reinvestment Tax Act of 2009 or section 2 of the Job Creation and Affordable Housing Act of 2010''. (c) Exclusion of Grants From Gross Income.--Paragraph (9) of section 42(i) of such Code, as amended by this section, is amended by adding at the end the following new subparagraph: ``(D) Exclusion of grants from gross income.--Any grant made under section 1602 of the American Recovery and Reinvestment Tax Act of 2009 or section 2 of the Job Creation and Affordable Housing Act of 2010 shall not be includible in the gross income or alternative minimum taxable income of the taxpayer.''. (d) Effective Date.-- (1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years ending after December 31, 2009. (2) Exclusion of grants from gross income.--The amendment made by subsection (c) shall apply to taxable years ending after December 31, 2008. SEC. 4. 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. SEC. 5. 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. SEC. 6. 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.
summary: Job Creation and Affordable Housing Act of 2010 - Directs the Secretary of the Treasury to make a grant to each state equal to such state's low-income bond-subsidized housing election amount. Defines "low-income bond-subsidized housing election amount" as an amount a state may elect which does not exceed 85% of the state's bond-subsidized credit amount for low-income buildings. Requires states to use grants to make subawards to finance the construction or acquisition and rehabilitation of qualified low-income buildings. Requires the return of grant funds not used to make such subawards before January 1, 2012. Amends the Internal Revenue Code to: (1) deny a low-income housing tax credit for bond-subsidized buildings that received a subaward under this Act; (2) allow a five-year carryback of unused low-income housing tax credit amounts and a carryback for new low-income housing investments in 2010 and 2011; and (3) allow a full offset of low-income housing tax credits against regular income tax liability.