[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5239 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 5239

To amend the Internal Revenue Code of 1986 to provide that the proceeds 
  of qualified mortgage bonds may be used to provide refinancing for 
 subprime loans, to provide a temporary increase in the volume cap for 
  qualified mortgage bonds used to provide that refinancing, and for 
                            other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 6, 2008

  Mr. Porter (for himself and Ms. Schwartz) introduced the following 
      bill; which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide that the proceeds 
  of qualified mortgage bonds may be used to provide refinancing for 
 subprime loans, to provide a temporary increase in the volume cap for 
  qualified mortgage bonds used to provide that refinancing, 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. MODIFICATIONS AND INCREASED VOLUME CAP WITH RESPECT TO 
              QUALIFIED MORTGAGE BONDS USED TO REFINANCE SUBPRIME 
              LOANS.

    (a) Use of Qualified Mortgage Bonds Proceeds for Subprime 
Refinancing Loans.--Section 143(k) of the Internal Revenue Code of 1986 
(relating to other definitions and special rules) is amended by adding 
at the end the following new paragraph:
            ``(12) Special rules for subprime refinancings.--
                    ``(A) In general.--In the case of a residence which 
                was originally financed by the mortgagor through a 
                qualified subprime loan, this section shall be applied 
                with the following modifications:
                            ``(i) Subsection (i)(1) (relating to 
                        mortgages must be new mortgages) shall not 
                        apply.
                            ``(ii) Subsection (a)(2)(D)(i) shall be 
                        applied by substituting `12-month period' for 
                        `42-month period' each place it appears.
                            ``(iii) Subsection (d) (relating to 3-year 
                        requirement) shall not apply.
                            ``(iv) Subsection (e) (relating to purchase 
                        price requirement) shall be applied by using 
                        the market value of the residence at the time 
                        of refinancing in lieu of the acquisition cost.
                    ``(B) Qualified subprime loan.--The term `qualified 
                subprime loan' means an adjustable rate single-family 
                residential mortgage loan originated after December 31, 
                2001, and before January 1, 2008, that the bond issuer 
                determines would likely cause financial hardship to the 
                borrower if not refinanced.
                    ``(C) Termination.--This paragraph shall not apply 
                to any bonds issued after December 31, 2010.''.
    (b) Increase in Volume Cap for Qualified Mortgage Bonds Used to 
Refinance Subprime Loans.--
            (1) In general.--Subsection (d) of section 146 of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new paragraph:
            ``(5) Increase for 2008 and set aside for qualified 
        mortgage bonds used to refinance qualified subprime loans.--
                    ``(A) In general.--The State ceiling for each State 
                for calendar year 2008 (determined without regard to 
                this paragraph) shall be increased by an amount which 
                bears the same ratio to $15,000,000,000 as--
                            ``(i) the State ceiling for such State for 
                        such year (as so determined) bears to
                            ``(ii) the aggregate of the State ceilings 
                        for all States (as so determined) for such 
                        year.
                    ``(B) Set aside.--
                            ``(i) In general.--Not less than an amount 
                        equal to each State's increase in the State 
                        ceiling under subparagraph (A) shall be 
                        allocated solely for the purpose of qualified 
                        mortgage issues which meets the requirement of 
                        clause (ii).
                            ``(ii) Requirement.--A qualified mortgage 
                        issue meets the requirement of this clause if 
                        all the financing provided by the issue is used 
                        to refinance qualified subprime loans (as 
                        defined in section 143(k)(12)(B)) to which 
                        section 143(k)(12) applies.''.
            (2) Carryforward of unused limitations.--Subsection (f) of 
        section 146 of such Code is amended by adding at the end the 
        following new paragraph:
            ``(6) Special rules for increased volume cap under 
        subsection (d)(5).--
                    ``(A) In general.--No amount which is attributable 
                to the increase under subsection (d)(5) may be used--
                            ``(i) for a carryforward purpose other than 
                        issuing qualified mortgage bonds which meet the 
                        requirement of subsection (d)(5)(B)(ii), and
                            ``(ii) to issue any bond after December 31, 
                        2010.
                    ``(B) Ordering rules.--For purposes of subparagraph 
                (A), any carryforward of an issuing authority's volume 
                cap for calendar year 2008 shall be treated as 
                attributable to such increase to the extent of such 
                increase.''.
    (c) Alternative Minimum Tax.--
            (1) In general.--Clause (ii) of section 57(a)(5)(C) of the 
        Internal Revenue Code of 1986 is amended by striking ``shall 
        not include'' and all that follows and inserting ``shall not 
        include--
                                    ``(I) any qualified 501(c)(3) bond 
                                (as defined in section 145), or
                                    ``(II) any qualified mortgage bond 
                                (as defined in section 143(a)) or 
                                qualified veterans' mortgage bond (as 
                                defined in section 143(b)) issued after 
                                December 31, 2007, and before January 
                                1, 2011.''.
            (2) Conforming amendment.--The heading for section 
        57(a)(5)(C)(ii) of such Code is amended by striking ``qualified 
        501(c)(3) bonds'' and inserting ``certain bonds''.
    (d) Effective Date.--The amendments made by this section shall 
apply to bonds issued after December 31, 2007.
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