Short title

This Act may be cited as the

Workforce Housing Construction for the GO Zone Act of 2007

Extension of placed-in-service date requirement for low-income housing credit buildings in Gulf Opportunity Zone

Section 1400N(c) of the Internal Revenue Code of 1986 is amended— (1)by striking or 2008 in paragraph (3)(A) and inserting 2008, 2009, or 2010, (2)by striking during such period in paragraph (3)(B)(ii) and inserting during the period described in subparagraph (A), and (3)by striking or 2008 in paragraph (4)(A) and inserting 2008, 2009, or 2010.

Preservation of previous low-income housing credit buildings in Gulf Opportunity Zone

(a)

In general

If an owner of a qualified low-income building (as defined in section 42(c)(2) of the Internal Revenue Code of 1986) located in the GO Zone (as defined in section 1400M(1) of such Code) in the second taxable year or later of the credit period (as defined in section 42(f)(1) of such Code) for such building— (1)suffers a reduction in the qualified basis (as determined under section 42(b)(1) of such Code) of such building (hereinafter referred to as the lost qualified basis) as a result of a disaster that caused the President to issue a major disaster declaration as a result of Hurricanes Katrina and Rita, but under subsection (j)(4)(E) of section 42 of such Code avoids recapture or loss of low-income housing credits previously allowed under such section with respect to such building (hereinafter referred to as the existing credits) by restoring the lost qualified basis by reconstruction, replacement, or rehabilitation within a reasonable period established by the Secretary of the Treasury, and (2)obtains an allocation of additional low-income housing credits under such section to fund, in whole or in part, the reconstruction, replacement, or rehabilitation of such building (hereinafter referred to as the new credits),

then the qualified basis of such building for purposes of determining the new credits shall equal the excess (if any) of such building's qualified basis as of the close of the first taxable year of the credit period (as so defined) with respect to the new credits (assuming such reconstruction, replacement, or rehabilitation expenditures meet the requirements for treatment as a separate new building), over such building's qualified basis with respect to the existing credits as determined immediately prior to the disaster referred to in paragraph (1).

(b)

Special rule for time for making allocations of credits

For purposes of section 42(h)(1)(E)(ii) of the Internal Revenue Code of 1986, buildings described in subsection (a) shall be deemed to be qualified buildings. (c)

Avoidance of recapture of credit

For purposes of section 42(j)(4)(E) of the Internal Revenue Code of 1986, qualified low-income housing projects (as defined in section 42(g)(1) of such Code) suffering casualty as a result of a disaster that caused the President to issue a major disaster declaration for the Go Zone (as defined in section 1400M(1))shall be deemed to have restored any casualty loss by reconstruction or replacement within a reasonable period if such loss is restored before January 1, 2011.

Credit allowable for certain buildings acquired during 10-year period in the Katrina, Rita, and Wilma disaster areas

Section 1400N(c) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

(5)

Credit allowable for buildings acquired during 10-year period

A waiver may be granted under section 42(d)(6)(A) (without regard to any clause thereof) with respect to any building in the Gulf Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone.

Inclusion of basis of property for mixed income housing in Katrina, Rita, and Wilma disaster areas

Section 1400N(c) of the Internal Revenue Code of 1986, as amended by this Act, is amended by redesignating paragraph (6) as paragraph (7) and by inserting after paragraph (5) the following new paragraph:

(6)

Increase in applicable fraction for mixed income projects

(A)

In general

In the case of any qualified low-income housing project under section 42(g) which is located in the Gulf Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone and in which the applicable fraction for any building of such qualified low-income housing project is not less than 20 percent and not more than 60 percent but for the provisions of this subparagraph, the numerator of the applicable fraction under section 42(c)(1)(B) shall be increased by— (i)one or 5 percent of the total number of units (whichever adjustment provides the largest unit fraction) for each building in the qualified low income housing project in the case of the unit fraction under section 42(c)(1)(C), and (ii)five percent of the total floor space in the case of the floor space fraction under section 42(c)(1)(D). (B)

Application

Subparagraph (A) shall apply to— (i)housing credit dollar amounts allocated after December 31, 2007, and (ii)buildings placed in service after such date to the extent paragraph (1) of section 42(h) does not apply to any building by reason of paragraph (4) thereof, but only with respect to bonds issued after such date.

Over income loans for Katrina, Rita, and Wilma disaster areas

(a)

In general

Section 1400N(a)(5)(B) of the Internal Revenue Code of 1986 is amended by adding and at the end of clause (ii), by striking clause (iii), and by redesignating clause (iv) as clause (iii). (b)

Mortgage revenue bonds

Section 1400T(a) of the Internal Revenue Code of 1986 is amended by adding and at the end of paragraph (1), by striking paragraph (2), and by redesignating paragraph (3) as paragraph (2). (c)

Effective date

The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.

Community Development Block Grants not taken into account in determining if buildings are federally subsidized

Section 1400N(c) of the Internal Revenue Code of 1986, as amended by this Act, is amended by redesignating paragraph (7) as paragraph (8) and by inserting after paragraph (6) the following new paragraph:

(7)

Community Development Block Grants not taken into account in determining if buildings are federally subsidized

For purpose of applying section 42(i)(2)(D) to any building which is placed in service in the Gulf Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone during the period beginning on January 1, 2006, and ending on December 31, 2010, a loan shall not be treated as a below market Federal loan solely by reason of any assistance provided under section 106, 107, or 108 of the Housing and Community Development Act of 1974 by reason of section 122 of such Act or any provision of the Department of Defense Appropriations Act, 2006, or the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006.

Application of the definitions and special rules under section 42(i) of the Internal Revenue Code of 1986 for bond-financed projects

(a)

In general

For purposes of qualifying as a qualified residential rental project under section 142(d)(1) of the Internal Revenue Code of 1986 [in the Gulf Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone], the special definitions and special rules for low-income units in section 42(i)(3) of such Code shall apply. (b)

Effective date

This section shall take apply to bonds issued after the date of the enactment of this Act.

Special tax-exempt bond financing rule for repairs and reconstructions of residences in the GO Zones

Section 1400N(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(7)

Special rule for repairs and reconstructions

(A)

In general

For purposes of section 143 and this subsection, any qualified GO Zone repair or reconstruction shall be treated as a qualified rehabilitation. (B)

Qualified GO Zone repair or reconstruction

For purposes of subparagraph (A), the term qualified GO Zone repair or reconstruction means any repair of damage caused by Hurricane Katrina, Hurricane Rita, or Hurricane Wilma to a building located in the Gulf Opportunity Zone, the Rita GO Zone, or the Wilma GO Zone (or reconstruction of such building in the case of damage constituting destruction) if the expenditures for such repair or reconstruction are 25 percent or more of the mortgagor’s adjusted basis in the residence. For purposes of the preceding sentence, the mortgagor’s adjusted basis shall be determined as of the completion of the repair or reconstruction or, if later, the date on which the mortgagor acquires the residence. (C)

Termination

This paragraph shall apply only to owner-financing provided after the date of the enactment of this paragraph and before January 1, 2011.