[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 677 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                 S. 677

 To amend the Internal Revenue Code of 1986 to repeal the required use 
of certain principal repayments on mortgage subsidy bond financings to 
 redeem bonds, to modify the purchase price limitation under mortgage 
    subsidy bond rules based on median family income, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               April 2 (legislative day, March 30), 2001

   Mr. Hatch (for himself, Mr. Breaux, Mr. Jeffords, Ms. Snowe, Mrs. 
Lincoln, and Mr. Allard) 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 repeal the required use 
of certain principal repayments on mortgage subsidy bond financings to 
 redeem bonds, to modify the purchase price limitation under mortgage 
    subsidy bond rules based on median family income, 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 Bond and Credit 
Modernization and Fairness Act of 2001''.

SEC. 2. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL REPAYMENTS ON 
              MORTGAGE SUBSIDY BOND FINANCINGS TO REDEEM BONDS.

    (a) In General.--Subparagraph (A) of section 143(a)(2) of the 
Internal Revenue Code of 1986 (defining qualified mortgage issue) is 
amended by adding ``and'' at the end of clause (ii), by striking ``, 
and'' at the end of clause (iii) and inserting a period, and by 
striking clause (iv) and the last sentence.
    (b) Conforming Amendment.--Clause (ii) of section 143(a)(2)(D) of 
such Code is amended by striking ``(and clause (iv) of subparagraph 
(A))''.
    (c) Effective Date.--The amendments made by this section shall 
apply to repayments received after the date of the enactment of this 
Act.

SEC. 3. MODIFICATION OF PURCHASE PRICE LIMITATION UNDER MORTGAGE 
              SUBSIDY BOND RULES BASED ON MEDIAN FAMILY INCOME.

    (a) In General.--Paragraph (1) of section 143(e) of the Internal 
Revenue Code of 1986 (relating to purchase price requirement) is 
amended to read as follows:
            ``(1) In general.--An issue meets the requirements of this 
        subsection only if the acquisition cost of each residence the 
        owner-financing of which is provided under the issue does not 
        exceed the greater of--
                    ``(A) 90 percent of the average area purchase price 
                applicable to the residence, or
                    ``(B) 3.5 times the applicable median family income 
                (as defined in subsection (f)).''
    (b) Effective Date.--The amendment made by this section shall apply 
to financing provided, and mortgage credit certificates issued, after 
the date of the enactment of this Act.

SEC. 4. DETERMINATION OF AREA MEDIAN GROSS INCOME FOR LOW-INCOME 
              HOUSING CREDIT PROJECTS.

    (a) In General.--Paragraph (4) of section 42(g) of the Internal 
Revenue Code of 1986 (relating to certain rules made applicable) is 
amended by striking the period at the end and inserting ``and the term 
`area median gross income' means the amount equal to the greater of--
                    ``(A) the area median gross income determined under 
                section 142(d)(2)(B), or
                    ``(B) the statewide median gross income for the 
                State in which the project is located.''
    (b) Effective Date.--The amendment made by this section shall apply 
to--
            (1) housing credit dollar amounts allocated after the date 
        of the enactment of this Act, and
            (2) buildings placed in service after such date to the 
        extent paragraph (1) of section 42(h) of the Internal Revenue 
        Code of 1986 does not apply to any building by reason of 
        paragraph (4) thereof.
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