Promoting Submetering for Affordable Housing Act

Bill Number

H.R. 3126

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-04-30: Referred to the House Committee on Ways and Means.

Last Updated

2025-05-28T19:40:43Z

AI-Generated Summary

Purpose

The "Promoting Submetering for Affordable Housing Act" (H.R. 3126) aims to encourage the use of water submetering in low-income housing projects. Water submetering involves installing separate water meters for each housing unit to accurately measure and bill residents for their individual water usage, rather than dividing costs equally. By increasing a tax credit for qualifying projects, the bill promotes more efficient water billing and conservation in affordable housing.

Key Provisions

• Amendment to Tax Code: Adds a new subparagraph (C) to section 42(d)(5) of the Internal Revenue Code of 1986, which governs the low-income housing tax credit (LIHTC) program—a federal incentive that provides tax credits to developers for building or rehabilitating affordable rental housing.
• Eligibility Criteria for Increased Credit:
• The building must have 4 or more units.
• It must use water submeters to bill each unit separately based on actual usage.
• Tenants must be able to access their water submeter readings (including those in landlord-controlled areas) within 72 hours of requesting the information.
• Credit Increase: For qualifying buildings, the "eligible basis" (the portion of development costs on which the tax credit is calculated) is increased to 105% of what it would otherwise be.
• Effective Date: Applies to buildings that receive LIHTC allocations (or, for projects using tax-exempt bonds, are first accounted for under relevant tax rules) after the date of enactment.

Significant Changes to Existing Law

• This introduces a targeted bonus to the existing LIHTC program, which previously did not provide extra incentives for water submetering.
• No changes to the overall structure of the LIHTC; it simply expands eligibility for a higher credit amount to reward projects that adopt this specific water management practice.

Potential Impacts

• On Government Agencies: The Internal Revenue Service (IRS) and state housing finance agencies (which allocate LIHTC credits) may see increased administrative workload in verifying submetering compliance, but it could lead to long-term savings through reduced water waste in subsidized housing.
• On Citizens: Low-income tenants in qualifying projects benefit from fairer, usage-based water billing, potentially lowering their costs and encouraging conservation. Developers gain a financial incentive (up to 5% more credit), which could make affordable housing projects more viable and increase their supply.
• On International Relations: No direct impacts, as this is a domestic tax policy focused on U.S. housing.

Main Stakeholders Affected

• Affordable Housing Developers and Owners: Primary beneficiaries through the enhanced tax credit, incentivizing adoption of submetering technology.
• Low-Income Tenants: Gain access to transparent billing and potentially reduced water expenses.
• State and Local Housing Agencies: Responsible for allocating LIHTC credits and may prioritize submetering projects in future distributions.
• Utilities and Water Providers: Could see shifts in billing practices and reduced overall consumption in multifamily housing.
• Federal Government (IRS and Treasury Department): Handles tax credit administration, with potential revenue implications from higher credits claimed.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens the LIHTC program's focus on sustainability without altering its core framework; compliance with submetering access rules could lead to minor disputes over tenant rights to information, but these are enforceable under existing tax and housing laws.
• Constitutional: No apparent issues, as it involves voluntary tax incentives rather than mandates.
• Political: Represents a bipartisan-friendly push for environmental efficiency in housing policy (introduced by Rep. Tenney, R-NY), potentially appealing to conservation advocates while supporting affordable housing goals; could influence future tax code expansions for green building practices.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Tenney, Claudia [R-NY-24]

Recent Actions

• 2025-04-30: Referred to the House Committee on Ways and Means.
• 2025-04-30: Introduced in House
• 2025-04-30: Introduced in House

Bill Versions

• Promoting Submetering for Affordable Housing Act — issued 2025-04-30 — PDF (2 pages)