text: 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.
target: 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.
feat_title: A bill to provide grants to States for low-income housing projects in lieu of low-income housing credits, and to amend the Internal Revenue Code of 1986 to allow a 5-year carryback of the low-income housing credit, and for other purposes.