[Congressional Record Volume 153, Number 64 (Friday, April 20, 2007)]
[Senate]
[Pages S4811-S4815]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. AKAKA (for himself, Mr. Durbin, Mr. Leahy, and Mr.
Schumer):
S. 1176. A bill to require enhanced disclosure to consumers regarding
the consequences of making only minimum required payments in the
repayment of credit card debt, and for other purposes; to the Committee
on Banking, Housing, and Urban Affairs.
Mr. AKAKA. Mr. President, today, I am introducing the Credit Card
Minimum Payment Warning Act. I thank Senators Durbin, Leahy, and
Schumer for cosponsoring this legislation.
Too many consumers in our country are burdened by significant credit
card debt. Revolving debt, mostly comprised of credit card debt, has
risen from $54 billion in 1980 to more than $883 billion in 2007.
We must make consumers more aware of the long-term effects of their
financial decisions, particularly in managing credit card debt. While
it is relatively easy to obtain credit, especially on college campuses,
not enough is being done to ensure that credit is properly managed.
Currently, credit card statements fail to include vital information
that would allow individuals to make fully informed financial
decisions. Additional disclosure is needed to ensure that consumers
completely understand the implications of their credit card use and the
costs of only making the minimum payments.
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005
included a requirement that credit card issuers provide information to
consumers about the consequences of only making the minimum monthly
payment. However, this requirement fails to provide the detailed
information on billing statements that consumers need to know to make
informed decisions. The bankruptcy law allows credit card issuers a
choice between disclosure statements. The first option included in the
bankruptcy bill would require a standard ``Minimum Payment Warning.''
The generic warning would state that it would take 88 months to pay off
a balance of $1,000 for bank card holders or 24 months to pay off a
balance of $300 for retail card holders. This first option also
includes a requirement that a toll-free number be established that
would provide an estimate of the time it would take to pay off the
customer's balance. The Federal Reserve Board is required to establish
the table that would estimate the approximate number of months it would
take to pay off a variety of account balances.
There is a second option that the law permits. The second option
allows the credit card issuer to provide a general minimum payment
warning and provide a toll-free number that consumers could call for
the actual number of months to repay the outstanding balance.
The options available under the Bankruptcy Reform law are woefully
inadequate. They do not require issuers to provide their customers with
the total amount they would pay in interest and principal if they chose
to pay off their balance at the minimum rate. Since the average
household with debt carries a balance of approximately $10,000 to
$12,000 in revolving debt, a warning based on a balance of $1,000 will
not be helpful. The minimum payment warning included in the first
option underestimates the costs of paying a balance off at the minimum
payment. If a family has a credit card debt of $10,000, and the
interest rate is a modest 12.4 percent, it would take more than ten and
a half years to pay off the balance while making minimum monthly
payments of four percent.
My legislation would make it very clear what costs consumers will
incur if they make only the minimum payments on their credit cards. If
the Credit Card Minimum Payment Warning Act is enacted, the
personalized information consumers would receive for their accounts
would help them make informed choices about their payments toward
reducing outstanding debt.
My bill requires a minimum payment warning notification on monthly
statements stating that making the minimum payment will increase the
amount of interest that will be paid and extend the amount of time it
will take to repay the outstanding balance. The legislation also
requires companies to inform consumers of how many years and months it
will take to repay their entire balance if they make only minimum
payments. In addition, the total cost in interest and principal, if the
consumer pays only the minimum payment, would have to be disclosed.
These provisions will make individuals much more aware of the true
costs of their credit card debt. The bill also requires that credit
card companies provide useful information so that people can develop
strategies to free themselves of credit card debt. Consumers would have
to be provided with the amount they need to pay to eliminate their
outstanding balance within 36 months.
Finally, the legislation requires that creditors establish a toll-
free number so that consumers can access trustworthy credit counselors.
In order to ensure that consumers are referred only to trustworthy
credit counseling organizations, these agencies would have to be
approved by the Federal Trade Commission and the Federal Reserve Board
as having met comprehensive quality standards. These standards are
necessary because certain credit counseling agencies have abused their
nonprofit, tax-exempt status and taken advantage of people seeking
assistance in managing their debt.
In a report on customized minimum payment disclosures released in
April 2006, the Government Accountability Office (GAO) found that
consumers who typically carry credit balances found customized
disclosures very useful and would prefer to receive them in their
billing statements.
We must provide consumers with detailed personalized information to
assist them in making better informed choices about their credit card
use and repayment. Our bill makes clear the adverse consequences of
uninformed choices, such as making only minimum payments, and provides
opportunities to locate assistance to better manage credit card debt.
My bill is necessary to improve credit card disclosures so that
consumers are provided relevant and useful information that hopefully
will bring about positive behavior change among consumers. Consumers
with lower debt levels will be better able to purchase a home, pay for
their child's education, or retire comfortably on their own terms.
I will ask that a letter of support from the Consumer Federation of
America, the Center for Responsible Lending, Consumer Action, Consumers
Union, Demos, the National Association of Consumer Advocates, U.S.
Public Interest Research Group, the National Council of La Raza, and
the National Consumer Law Center be printed in the Record.
I will also ask that the text of the Credit Card Minimum Payment
Warning Act be printed in the Record.
I urge my colleagues to support this important legislation that will
empower consumers by providing them with detailed personalized
information to assist them in making informed choices about their
credit card use and repayment. This bill makes clear the adverse
consequences of uninformed choices such as making only minimum payments
and provides opportunities to locate assistance to reduce credit card
debt.
Mr. President, I ask unanimous consent that the aforementioned
materials be printed in the Record.
[[Page S4812]]
There being no objection, the material was ordered to be printed in
the Record, as follows:
April 17, 2007.
Hon. Daniel K. Akaka,
U.S. Senate,
Washington, D.C. 20510
Dear Senator Akaka: The undersigned national consumer and
civil rights organizations write to strongly support the
Credit Card Minimum Payment Warning Act. The Act would
require credit card issuers to disclose more information to
consumers about the costs associated with paying their bills
at ever-declining minimum payment rates. The Act provides a
personalized ``price tag'' so consumers can understand the
real costs of credit card debt and avoid financial problems
in the future.
Undisputed evidence links the rise in bankruptcy in recent
years to the increase in consumer credit outstanding. These
numbers have moved in lockstep for more than 20 years.
Revolving credit, for example (most of which is credit card
debt) ballooned from $214 billion in January 1990 to $873
billion currently. As family debt increases, debt service
payments on items such as interest and late fees take an
ever-increasing piece of their budget. For some families,
this contributes to the collapse of their budget. Bankruptcy
becomes the only way out.
Credit card issuers have exacerbated the financial problems
that many families have faced by lowering minimum payment
amounts. This decline in the typical minimum payment is a
significant reason for the rise in consumer bankruptcies in
recent years. A low minimum payment often barely covers
interest obligations. It convinces many borrowers that they
are financially sound as long as they can meet all of their
minimum payment obligations. However, those who cannot afford
to make these payments often carry so much debt that
bankruptcy is usually the only viable option.
This bill will provide consumers several crucial pieces of
information on their monthly credit card statement: A
``minimum payment warning'' that paying at the minimum rate
will increase the amount of interest that is owed and the
time it will take to repay the balance; The number of years
and months that it will take the consumer to pay off the
balance at the minimum rate; The total costs in interest and
principal if the consumer pays at the minimum rate; The
monthly payment that would be required to pay the balance off
in 3 years.
The bill also requires that credit card companies provide a
toll-free number that consumers can call to receive
information about credit counseling and debt management
assistance. In order to assure that consumers are referred to
honest, legitimate non-profit credit counselors, the bill
requires the Federal Reserve to screen these agencies to
ensure that they meet rigorous quality standards.
Our groups commend you for offering this very important and
long-overdue piece of legislation. It provides the kind of
personalized, timely disclosure information that will help
debt-choked families make informed decisions and, with the
help of additional protections against abusive credit card
lending, start to work their way back to financial health.
For more information, please contact Travis Plunkett at the
Consumer Federation of America at 202-387-6121.
Sincerely,
Travis B. Plunkett, Legislative Director, Consumer
Federation of America; Gail Hillebrand, Senior
Attorney, Consumers Union; Cindy Zeldin, Federal
Affairs Coordinator, Economic Opportunity Program,
Demos: A Network for Ideas & Action; Kim Warden, Vice
President, Federal Affairs, Center for Responsible
Lending; Alys Cohen, Staff Attorney, National Consumer
Law Center; Edmund Mierzwinski, Consumer Programs
Director, U.S. Public Interest Research Group; Linda
Sherry, Director, National Priorities, Consumer Action;
Ira Rheingold, Executive Director, National Association
of Consumer Advocates; Beatriz Ibarra, Assets Policy
Analyst, National Council of La Raza.
____
S. 1176
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 ``Credit Card Minimum Payment
Warning Act of 2007''.
SEC. 2. ENHANCED CONSUMER DISCLOSURES REGARDING MINIMUM
PAYMENTS.
Section 127(b) of the Truth in Lending Act (15 U.S.C.
1637(b)) is amended by adding at the end the following:
``(11)(A) Information regarding repayment of the
outstanding balance of the consumer under the account,
appearing in conspicuous type on the front of the first page
of each such billing statement, and accompanied by an
appropriate explanation, containing--
``(i) the words `Minimum Payment Warning: Making only the
minimum payment will increase the amount of interest that you
pay and the time it will take to repay your outstanding
balance.';
``(ii) the number of years and months (rounded to the
nearest month) that it would take for the consumer to pay the
entire amount of that balance, if the consumer pays only the
required minimum monthly payments;
``(iii) the total cost to the consumer, shown as the sum of
all principal and interest payments, and a breakdown of the
total costs in interest and principal, of paying that balance
in full if the consumer pays only the required minimum
monthly payments, and if no further advances are made;
``(iv) the monthly payment amount that would be required
for the consumer to eliminate the outstanding balance in 36
months if no further advances are made; and
``(v) a toll-free telephone number at which the consumer
may receive information about accessing credit counseling and
debt management services.
``(B)(i) Subject to clause (ii), in making the disclosures
under subparagraph (A) the creditor shall apply the interest
rate in effect on the date on which the disclosure is made.
``(ii) If the interest rate in effect on the date on which
the disclosure is made is a temporary rate that will change
under a contractual provision specifying a subsequent
interest rate or applying an index or formula for subsequent
interest rate adjustment, the creditor shall apply the
interest rate in effect on the date on which the disclosure
is made for as long as that interest rate will apply under
that contractual provision, and then shall apply the adjusted
interest rate, as specified in the contract. If the contract
applies a formula that uses an index that varies over time,
the value of such index on the date on which the disclosure
is made shall be used in the application of the formula.''.
SEC. 3. ACCESS TO CREDIT COUNSELING AND DEBT MANAGEMENT
INFORMATION.
(a) Guidelines Required.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Board of Governors of the Federal
Reserve System and the Federal Trade Commission (in this
section referred to as the ``Board'' and the ``Commission'',
respectively) shall jointly, by rule, regulation, or order,
issue guidelines for the establishment and maintenance by
creditors of a toll-free telephone number for purposes of the
disclosures required under section 127(b)(11) of the Truth in
Lending Act, as added by this Act.
(2) Approved agencies.--Guidelines issued under this
subsection shall ensure that referrals provided by the toll-
free number include only those agencies approved by the Board
and the Commission as meeting the criteria under this
section.
(b) Criteria.--The Board and the Commission shall only
approve a nonprofit budget and credit counseling agency for
purposes of this section that--
(1) demonstrates that it will provide qualified counselors,
maintain adequate provision for safekeeping and payment of
client funds, provide adequate counseling with respect to
client credit problems, and deal responsibly and effectively
with other matters relating to the quality, effectiveness,
and financial security of the services it provides;
(2) at a minimum--
(A) is registered as a nonprofit entity under section
501(c) of the Internal Revenue Code of 1986;
(B) has a board of directors, the majority of the members
of which--
(i) are not employed by such agency; and
(ii) will not directly or indirectly benefit financially
from the outcome of the counseling services provided by such
agency;
(C) if a fee is charged for counseling services, charges a
reasonable and fair fee, and provides services without regard
to ability to pay the fee;
(D) provides for safekeeping and payment of client funds,
including an annual audit of the trust accounts and
appropriate employee bonding;
(E) provides full disclosures to clients, including funding
sources, counselor qualifications, possible impact on credit
reports, any costs of such program that will be paid by the
client, and how such costs will be paid;
(F) provides adequate counseling with respect to the credit
problems of the client, including an analysis of the current
financial condition of the client, factors that caused such
financial condition, and how such client can develop a plan
to respond to the problems without incurring negative
amortization of debt;
(G) provides trained counselors who--
(i) receive no commissions or bonuses based on the outcome
of the counseling services provided;
(ii) have adequate experience; and
(iii) have been adequately trained to provide counseling
services to individuals in financial difficulty, including
the matters described in subparagraph (F);
(H) demonstrates adequate experience and background in
providing credit counseling;
(I) has adequate financial resources to provide continuing
support services for budgeting plans over the life of any
repayment plan; and
(J) is accredited by an independent, nationally recognized
accrediting organization.
______
By Mr. INOUYE (for himself, Mr. Stevens, Mr. Pryor, and Mr.
Smith):
S. 1178. A bill to strengthen data protection and safeguards, require
data breach notification, and further prevent identity theft; to the
Committee on Commerce, Science, and Transportation.
Mr. INOUYE. Mr. President, I rise today to introduce the Identity
Theft
[[Page S4813]]
Prevention Act of 2007 with my colleagues Senator Stevens and Senator
Pryor to protect Americans from identity theft.
The recent breaches of security that led to the loss of sensitive
personal information remind all of us how vulnerable we are to thieves
stealing our identity for criminal purposes. Identity theft is a
growing threat to our personal security that must be met with new
tactics and new laws in the information age.
We in the Congress and every consumer in America have seen the
evolution of identity theft. The moment of greatest awareness was in
February 2005 when ChoicePoint notified more than 145,000 people that
their personal data had been accessed by unauthorized persons who used
some of the information for identity theft. ChoicePoint was required to
make these contacts under the California notification law, but this
incident had nationwide effects. Since then, a number of data brokers,
banks, universities and other entities that hold personal information
have notified individuals that their personal information may have been
compromised. The last major breach was made public in January 2007,
when T.J. Maxx announced it had discovered a breach in the security of
its customer payment data. As a result of hacker activity starting in
2005, information on more than 45 million credit and debit cards had
been stolen.
The need to address this problem is long overdue. Every business that
collects and stores sensitive personal information must ensure that the
information is safeguarded. If a security breach occurs and the
information could be used for identity theft, every affected consumer
needs to be notified as soon as possible so they can best protect
themselves and their families. The Identity Theft Prevention Act
provides the Federal Trade Commission new enforcement tools to ensure
businesses that hold a consumer's sensitive personal information use
vigorous safeguards to prevent breaches from happening. The Act also
requires businesses to appropriately notify consumers if their
information is improperly released and could lead to identity theft. In
addition, the Identity Theft Prevention Act provides consumers the
ability to place a security freeze on their credit reports, so if they
choose, they can eliminate the worry and the impact of an identity
thief opening new lines of credit from stolen information.
Americans have demanded better protection for their sensitive
personal information, and it is imperative that we respond to these
demands effectively and expeditiously. I look forward to working with
the other Members of the Senate to move this legislation forward.
______
By Mr. CASEY:
S. 1179. A bill to amend the Internal Revenue Code of 1986 to extend
the financing for Superfund for purposes of cleanup activities with
respect to those Superfund sites for which removal and remedial action
is estimated to cost more than $50,000,000, and for other purposes; to
the Committee on Finance.
Mr. CASEY. Mr. President, this Sunday we will celebrate Earth Day, a
day when we should reaffirm our commitment to a clean, safe, and
healthy environment for our children and future generations.
We have made a considerable amount of progress since Senator Gaylord
Nelson established the first Earth Day thirty-seven years ago. We
implemented the Clean Water Act and the Clean Air Act, both landmark
bills that have made our beautiful country a cleaner place to live. We
no longer have rivers so massively polluted they actually catch fire
and burn. We no longer have unchecked amounts of toxic pollutants being
pumped into the air we breathe. We should be proud of these
accomplishments because they show us that we can pass meaningful and
effective laws to protect the environment and public health without
sacrificing our economy and economic productivity.
We still have serious threats to the safety and health of our
environment. Obviously global climate change tops that list of threats.
No other single issue has the potential to devastate our future and
change the entire world so completely. We have an opportunity, if we
get smart and take serious actions, to stop the cataclysmic changes
that are just around the corner for this planet. The time to act is
now. And I mean right now. Every year that we delay enacting a strong
bill that forces us to make mandatory reductions to our carbon
emissions the cost goes up. We simply cannot afford to wait. We cannot
afford the cost of tackling an ever increasing carbon problem in future
years. And we certainly cannot afford the long-term implications of
climate change like rising sea levels that will displace large centers
of population, droughts that will dramatically reduce fresh drinking
water, and major storms like those that have hit the Gulf Coast and
Atlantic seaboard over the past few years.
Climate change is certainly the most pressing environmental issue
facing us today. But we should not forget about other important issues
facing our constituents. Reducing mercury and other air pollutants,
reducing pollution of our rivers and streams, preserving open space and
stopping urban sprawl, increasing investments in renewable and
alternative energy sources, establishing higher fuel efficiency
standards, and reducing the number of unremediated Superfund sites
continue to be top priorities for me.
For this reason and in honor of Earth Day, today I am introducing the
Superfund Equity and Megasite Remediation Act of 2007. This legislation
reinstates the polluter-pays tax that funds clean up of Superfund
sites. In addition, my bill ramps up the tax for limited 5-year period
in order to create a fund to clean up megasites, which cost more than
$50 million each to remediate.
I know that Senator Boxer, the Chairman of the Environment and Public
Works Committee, has been a long-time advocate for reinstating the
polluter-pays principle in federal hazardous waste cleanup law. I look
forward to working with her and all of my colleagues on the Environment
Committee and the Finance Committee to make sure that we have a
Superfund program that cleans up the polluted sites that blight our
communities and prevent development and reuse, and does so in a way
that polluters foot the bill, and not taxpayers. I urge all of my
colleagues to join me in support of this bill, and do the right thing
for our local towns on Earth Day.
______
By Ms. LANDRIEU:
S. 1180. A bill to amend the Internal Revenue Code of 1986 to extend
the placed-in-service date requirement for low-income housing credit
buildings in the Gulf Opportunity Zone, and for other purposes; to the
Committee on Finance.
Ms. LANDRIEU. Mr. President, as the gulf coast recovers from Katrina
and Rita, rebuilding our housing remains the key to our recovery. I
have talked about this issue on this floor before. We need housing so
that our citizens have a place to live while they rebuild our
businesses, restore our infrastructure, and renew our communities.
Congress and the President responded by making billions of dollars
available to us and we are grateful for this assistance.
I am proud to say that this assistance is working. Every time I go
home I see signs of improvement. They are often small: a gas station or
a store reopening on a corner; children playing on a street where no
one lived only a few months before. I wish I could say that these signs
are everywhere, but they are not. Some parts of New Orleans are doing
well, some are not. We knew from the start that recovery would take
longer in some areas than in others; and we all knew that nothing would
happen overnight.
America has never rebuilt a city of 500,000 people before. Our
experience in Louisiana and in the Gulf has taught us some valuable
lessons about postcatastrophe rebuilding and recovery. We have learned
about the shortcomings of government programs at FEMA, the Small
Business Administration, and other agencies. In responding to Katrina
they used the systems that worked great for smaller disasters, but were
woefully inadequate for larger ones. For future megacatastrophes we now
understand that it may take government programs several months to ramp
up before they are in a position to distribute assistance.
One of the key lessons we have learned from this catastrophe has been
the affect of such massive destruction
[[Page S4814]]
and displacement on the supply and the costs of labor and building
materials, and the impact these have on how long it takes to rebuild.
New Orleans, for example, is about half the population it used to be.
We do not have enough workers in building and contracting to meet the
huge demand we have for this work. As a result, it may take several
months to get building started. Developers are also having difficulty
getting insurance and the infrastructure in many areas is still heavily
damaged.
This timing delay means that Congress will have to reexamine the
policies that we have enacted to help rebuild the Gulf region in order
to ensure that they are meeting the new kinds of disaster recovery
challenges Katrina and Rita have posed. The Gulf Opportunity Zone Act
of 2005 was one of the major pieces of legislation that we passed. The
GO Zone Act provided important tax incentives to encourage investment
in businesses and housing in the Gulf.
To help ensure that we can rebuild our housing, GO Zone Act increased
the state's allocation of Low Income Housing Tax Credits, LIHTC. These
credits finance affordable and mixed income housing. Under the GO Zone
Act, any housing developed with these tax credits must be built and
operating by December 31, 2008. The statute refers to this as the
``placed in service'' date. This date is consistent with the normal
LIHTC program guidelines that require tax credit housing developments
to be placed in service within 2 years of allocation.
The Louisiana Housing Finance Agency, LHFA, reports that there was a
great demand for these GO Zone credits. For the credits allocated in
2006, the LHFA received 266 applications from developers for more than
$253 million. But it only funded 102 projects with $56.9 million in tax
credits.
For 2007 and 2008, however, the State received far fewer
applications. The reason for this is because of the placed-in-service
date. Because of the labor shortage, increased costs, and lack of
insurance that we are facing in the Gulf, developers are not sure
whether they can get their projects placed in service by the end of
2008. Yet there is still a huge need for the housing that these credits
will fund.
The placed-in-service date is also raising new concerns. I have heard
from a number of organizations that already received tax credit
allocations before 2006 who are concerned that they will not be able to
get their developments placed in service by the end of 2008. The LHFA
estimates that 65 percent of the affordable housing units under
development in New Orleans, roughly 11,050 units, will not make the
deadline to be available for rent by the end of 2008. In the
surrounding parishes, home sales prices have literally hit the roof
meaning working and middle-income families cannot reasonably justify
living in the area that they still call home, 19 months since the
storm. Again, the culprit is the shortages and increased costs that I
mentioned before. Some developers have even told me that they face
losing credits that had been allocated to them before the storm because
building has been delayed in the region. Since Katrina, rental prices
have increased by 39 percent.
Today, I am introducing legislation that will help to ensure that
these housing tax credits are available so that we can continue the
road to recovery. The Workforce Housing for the GO Zone Act of 2007
will extend the placed-in-service date for the GO Zone Low Income
Housing Tax Credit by an additional 2 years. This will allow developers
to make full use of the credits that are available to build affordable
housing in the Gulf Coast.
Another critical provision lets GO Zone low-income housing projects
receive additional federally subsidized loans without losing tax
credits. The Low Income Housing Tax Credit provisions included in this
bill further assist our people to return home. These credits are
competitively awarded to qualified developers and subject to constant
oversight by the State housing authority to make sure that only quality
affordable housing is being constructed. The citizens of the gulf coast
are ready to go back home, and this legislation helps get them there.
I ask unanimous consent that a copy of the legislation be printed in
the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 1180
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 ``Workforce Housing
Construction for the GO Zone Act of 2007''.
SEC. 2. 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''.
SEC. 3. 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.
SEC. 4. 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.''.
SEC. 5. 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
[[Page S4815]]
``(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.''.
SEC. 6. 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.
SEC. 7. 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.''.
SEC. 8. 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.
SEC. 9. 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.''.
______
By Mr. DODD (for himself, Mr. Lieberman, Mr. Kerry, and Mr.
Kennedy):
S. 1182. A bill to amend the Quinebaug and Shetucket Rivers Valley
National Heritage Corridor Act of 1994 to increase the authorization of
appropriations and modify the date on which the authority of the
Secretary of the Interior terminates under the Act; to the Committee on
Energy and Natural Resources.
Mr. DODD. Mr. President, today I join with my colleagues, Senators
Lieberman, Kerry, and Kennedy, to introduce the Quinebaug and Shetucket
Rivers Valley National Heritage Corridor Amendments Act of 2007.
Representatives Courtney and Neal have introduced a companion bill in
the House.
The Quinebaug and Shetucket Rivers Valley National Heritage Corridor,
or QSHC, was established in 1994 as the fifth National Heritage
Corridor. National Heritage Areas are designated by Congress to
preserve distinctive landscapes of historic, cultural, natural, and
recreational resources. The QSHC is commonly known as ``The Last Green
Valley,'' a rare rural landscape in the populous Northeast. In fact,
the Valley stands out in night images from space for its absence of
lights. It contains aboriginal and colonial archaeological sites, mills
and mill villages that preserve the history of the early industrial
revolution, and traditional farming communities. The QSHC non-profit
management entity has restored architecturally and historically
important buildings, developed interpretive projects, and developed
conservation and open space plans. It has consistently leveraged an
average of $19 for every $1 of appropriated Federal money.
The QSHC has developed a plan to become a self-sustaining entity by
2015, as laid out in ``The Trail to 2015: A Sustainability Plan for the
Last Green Valley.'' The plan calls for replacing Federal funds with
fees for services, private and corporate support, and income from a
permanent fund. In the interim, Federal funds are necessary for
capacity-building, awareness programs, and ongoing education of land-
use decision-makers.
The Quinebaug and Shetucket Rivers Valley National Heritage Corridor
has created a collaboration of 35 municipalities dedicated to
preserving a unique slice of our American heritage. With an extension
of its authorization, this preserve can exist in perpetuity. I urge my
colleagues to support reauthorization of the QSHC.
____________________