[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[House]
[Pages 26661-26672]
[From the U.S. Government Publishing Office, www.gpo.gov]




              MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007

  Mr. RANGEL. Mr. Speaker, pursuant to House Resolution 703, I call up 
the bill (H.R. 3648) to amend the Internal Revenue Code of 1986 to 
exclude discharges of indebtedness on principal residences from gross 
income, and for other purposes, and ask for its immediate consideration 
in the House.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3648

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE 
                   EXCLUDED FROM GROSS INCOME.

       (a) In General.--Paragraph (1) of section 108(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``or'' 
     at the end of subparagraph (C), by striking the period at the 
     end of subparagraph (D) and inserting ``, or'', and by 
     inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) the indebtedness discharged is qualified principal 
     residence indebtedness.''.
       (b) Special Rules Relating to Qualified Principal Residence 
     Indebtedness.--Section 108 of such Code is amended by adding 
     at the end the following new subsection:
       ``(h) Special Rules Relating to Qualified Principal 
     Residence Indebtedness.--
       ``(1) Basis reduction.--The amount excluded from gross 
     income by reason of subsection (a)(1)(E) shall be applied to 
     reduce (but not below zero) the basis of the principal 
     residence of the taxpayer.
       ``(2) Qualified principal residence indebtedness.--For 
     purposes of this section, the term `qualified principal 
     residence indebtedness' means acquisition indebtedness 
     (within the meaning of section 163(h)(3)(B), without regard 
     to clause (ii) thereof) with respect to the principal 
     residence of the taxpayer.
       ``(3) Exception for discharges on account of services 
     performed for the lender.--Subsection (a)(1)(E) shall not 
     apply to the discharge of a loan if the discharge is on 
     account of services performed for the lender.
       ``(4) Principal residence.--For purposes of this 
     subsection, the term `principal residence' has the same 
     meaning as when used in section 121.''.
       (c) Coordination.--
       (1) Subparagraph (A) of section 108(a)(2) of such Code is 
     amended by striking ``and (D)'' and inserting ``, (D), and 
     (E)''.
       (2) Paragraph (2) of section 108(a) of such Code is amended 
     by adding at the end the following new subparagraph:
       ``(C) Principal residence exclusion takes precedence over 
     insolvency exclusion unless elected otherwise.--Paragraph 
     (1)(B) shall not apply to a discharge to which paragraph 
     (1)(E) applies unless the taxpayer elects to apply paragraph 
     (1)(B) in lieu of paragraph (1)(E).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to discharges of indebtedness on or after January 
     1, 2007.

     SEC. 2. LONG-TERM EXTENSION OF DEDUCTION FOR MORTGAGE 
                   INSURANCE PREMIUMS.

       (a) In General.--Subparagraph (E) of section 163(h)(3) of 
     the Internal Revenue Code of 1986 (relating to mortgage 
     insurance premiums treated as interest) is amended by 
     striking clauses (iii) and (iv) and inserting the following 
     new clause:
       ``(iii) Application.--Clause (i) shall not apply with 
     respect to any mortgage insurance contract issued before 
     January 1, 2007, or after December 31, 2014.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contracts issued after December 31, 2006.

     SEC. 3. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE 
                   HOUSING CORPORATION.

       (a) In General.--Subparagraph (D) of section 216(b)(1) of 
     the Internal Revenue Code of 1986 (defining cooperative 
     housing corporation) is amended to read as follows:
       ``(D) meeting 1 or more of the following requirements for 
     the taxable year in which the taxes and interest described in 
     subsection (a) are paid or incurred:
       ``(i) 80 percent or more of the corporation's gross income 
     for such taxable year is derived from tenant-stockholders.
       ``(ii) At all times during such taxable year, 80 percent or 
     more of the total square footage of the corporation's 
     property is used or available for use by the tenant-
     stockholders for residential purposes or purposes ancillary 
     to such residential use.
       ``(iii) 90 percent or more of the expenditures of the 
     corporation paid or incurred during such taxable year are 
     paid or incurred for the acquisition, construction, 
     management, maintenance, or care of the corporation's 
     property for the benefit of the tenant-stockholders.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 4. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO 
                   NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

       (a) In General.--Subsection (b) of section 121 of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exclusion of gain allocated to nonqualified use.--
       ``(A) In general.--Subsection (a) shall not apply to so 
     much of the gain from the sale or exchange of property as is 
     allocated to periods of nonqualified use.
       ``(B) Gain allocated to periods of nonqualified use.--For 
     purposes of subparagraph (A), gain shall be allocated to 
     periods

[[Page 26662]]

     of nonqualified use based on the ratio which--
       ``(i) the aggregate periods of nonqualified use during the 
     period such property was owned by the taxpayer, bears to
       ``(ii) the period such property was owned by the taxpayer.
       ``(C) Period of nonqualified use.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `period of nonqualified use' 
     means any period (other than the portion of any period 
     preceding January 1, 2008) during which the property is not 
     used as the principal residence of the taxpayer or the 
     taxpayer's spouse or former spouse.
       ``(ii) Exceptions.--The term `period of nonqualified use' 
     does not include--

       ``(I) any portion of the 5-year period described in 
     subsection (a) which is after the last date that such 
     property is used as the principal residence of the taxpayer 
     or the taxpayer's spouse,
       ``(II) any period (not to exceed an aggregate period of 10 
     years) during which the taxpayer or the taxpayer's spouse is 
     serving on qualified official extended duty (as defined in 
     subsection (d)(9)(C)) described in clause (i), (ii), or (iii) 
     of subsection (d)(9)(A), and
       ``(III) any other period of temporary absence (not to 
     exceed an aggregate period of 2 years) due to change of 
     employment, health conditions, or such other unforeseen 
     circumstances as may be specified by the Secretary.

       ``(D) Coordination with recognition of gain attributable to 
     depreciation.--For purposes of this paragraph--
       ``(i) subparagraph (A) shall be applied after the 
     application of subsection (d)(6), and
       ``(ii) subparagraph (B) shall be applied without regard to 
     any gain to which subsection (d)(6) applies.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales and exchanges after December 31, 2007.

     SEC. 5. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking ``114.75 percent'' and inserting ``116.50 percent''.

  The SPEAKER pro tempore. Pursuant to House Resolution 703, the 
amendment in the nature of a substitute printed in the bill, modified 
by the amendment printed in House Report 110-360, is adopted and the 
bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 3648

       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 ``Mortgage Forgiveness Debt 
     Relief Act of 2007''.

     SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE 
                   EXCLUDED FROM GROSS INCOME.

       (a) In General.--Paragraph (1) of section 108(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``or'' 
     at the end of subparagraph (C), by striking the period at the 
     end of subparagraph (D) and inserting ``, or'', and by 
     inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) the indebtedness discharged is qualified principal 
     residence indebtedness.''.
       (b) Special Rules Relating to Qualified Principal Residence 
     Indebtedness.--Section 108 of such Code is amended by adding 
     at the end the following new subsection:
       ``(h) Special Rules Relating to Qualified Principal 
     Residence Indebtedness.--
       ``(1) Basis reduction.--The amount excluded from gross 
     income by reason of subsection (a)(1)(E) shall be applied to 
     reduce (but not below zero) the basis of the principal 
     residence of the taxpayer.
       ``(2) Qualified principal residence indebtedness.--For 
     purposes of this section, the term `qualified principal 
     residence indebtedness' means acquisition indebtedness 
     (within the meaning of section 163(h)(3)(B), ``applied by 
     substituting $2,000,000 ($1,000,000' for `$1,000,000 
     ($500,000' in clause (ii) thereof'' with respect to the 
     principal residence of the taxpayer.
       ``(3) Exception for certain discharges not related to 
     taxpayer's financial condition.--Subsection (a)(1)(E) shall 
     not apply to the discharge of a loan if the discharge is on 
     account of services performed for the lender or any other 
     factor not directly related to a decline in the value of the 
     residence or to the financial condition of the taxpayer.
       ``(4) Ordering rule.--If any loan is discharged, in whole 
     or in part, and only a portion of such loan is qualified 
     principal residence indebtedness, subsection (a)(1)(E) shall 
     apply only to so much of the amount discharged as exceeds the 
     amount of the loan (as determined immediately before such 
     discharge) which is not qualified principal residence 
     indebtedness.
       ``(5) Principal residence.--For purposes of this 
     subsection, the term `principal residence' has the same 
     meaning as when used in section 121.''.
       (c) Coordination.--
       (1) Subparagraph (A) of section 108(a)(2) of such Code is 
     amended by striking ``and (D)'' and inserting ``(D), and 
     (E)''.
       (2) Paragraph (2) of section 108(a) of such Code is amended 
     by adding at the end the following new subparagraph:
       ``(C) Principal residence exclusion takes precedence over 
     insolvency exclusion unless elected otherwise.--Paragraph 
     (1)(B) shall not apply to a discharge to which paragraph 
     (1)(E) applies unless the taxpayer elects to apply paragraph 
     (1)(B) in lieu of paragraph (1)(E).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to discharges of indebtedness on or after January 
     1, 2007.

     SEC. 3. LONG-TERM EXTENSION OF DEDUCTION FOR MORTGAGE 
                   INSURANCE PREMIUMS.

       (a) In General.--Subparagraph (E) of section 163(h)(3) of 
     the Internal Revenue Code of 1986 (relating to mortgage 
     insurance premiums treated as interest) is amended by 
     striking clauses (iii) and (iv) and inserting the following 
     new clause:
       ``(iii) Application.--Clause (i) shall not apply with 
     respect to any mortgage insurance contract issued before 
     January 1, 2007, or after December 31, 2014.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to contracts issued after December 31, 2006.

     SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE 
                   HOUSING CORPORATION.

       (a) In General.--Subparagraph (D) of section 216(b)(1) of 
     the Internal Revenue Code of 1986 (defining cooperative 
     housing corporation) is amended to read as follows:
       ``(D) meeting 1 or more of the following requirements for 
     the taxable year in which the taxes and interest described in 
     subsection (a) are paid or incurred:
       ``(i) 80 percent or more of the corporation's gross income 
     for such taxable year is derived from tenant-stockholders.
       ``(ii) At all times during such taxable year, 80 percent or 
     more of the total square footage of the corporation's 
     property is used or available for use by the tenant-
     stockholders for residential purposes or purposes ancillary 
     to such residential use.
       ``(iii) 90 percent or more of the expenditures of the 
     corporation paid or incurred during such taxable year are 
     paid or incurred for the acquisition, construction, 
     management, maintenance, or care of the corporation's 
     property for the benefit of the tenant-stockholders.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 5. GAIN FROM SALE OF PRINCIPAL RESIDENCE ALLOCATED TO 
                   NONQUALIFIED USE NOT EXCLUDED FROM INCOME.

       (a) In General.--Subsection (b) of section 121 of the 
     Internal Revenue Code of 1986 (relating to limitations) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exclusion of gain allocated to nonqualified use.--
       ``(A) In general.--Subsection (a) shall not apply to so 
     much of the gain from the sale or exchange of property as is 
     allocated to periods of nonqualified use.
       ``(B) Gain allocated to periods of nonqualified use.--For 
     purposes of subparagraph (A), gain shall be allocated to 
     periods of nonqualified use based on the ratio which--
       ``(i) the aggregate periods of nonqualified use during the 
     period such property was owned by the taxpayer, bears to
       ``(ii) the period such property was owned by the taxpayer.
       ``(C) Period of nonqualified use.--For purposes of this 
     paragraph--
       ``(i) In general.--The term `period of nonqualified use' 
     means any period (other than the portion of any period 
     preceding January 1, 2008) during which the property is not 
     used as the principal residence of the taxpayer or the 
     taxpayer's spouse or former spouse.
       ``(ii) Exceptions.--The term `period of nonqualified use' 
     does not include--

       ``(I) any portion of the 5-year period described in 
     subsection (a) which is after the last date that such 
     property is used as the principal residence of the taxpayer 
     or the taxpayer's spouse,
       ``(II) any period (not to exceed an aggregate period of 10 
     years) during which the taxpayer or the taxpayer's spouse is 
     serving on qualified official extended duty (as defined in 
     subsection (d)(9)(C)) described in clause (i), (ii), or (iii) 
     of subsection (d)(9)(A), and
       ``(III) any other period of temporary absence (not to 
     exceed an aggregate period of 2 years) due to change of 
     employment, health conditions, or such other unforeseen 
     circumstances as may be specified by the Secretary.

       ``(D) Coordination with recognition of gain attributable to 
     depreciation.--For purposes of this paragraph--
       ``(i) subparagraph (A) shall be applied after the 
     application of subsection (d)(6), and
       ``(ii) subparagraph (B) shall be applied without regard to 
     any gain to which subsection (d)(6) applies.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to sales and exchanges after December 31, 2007.

     SEC. 6. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

       Subparagraph (B) of section 401(1) of the Tax Increase 
     Prevention and Reconciliation Act of 2005 is amended by 
     striking the percentage contained therein and inserting 
     ``116.75 percent''.

  The SPEAKER pro tempore. The gentleman from New York (Mr. Rangel) and 
the gentleman from Louisiana (Mr. McCrery) each will control 30 
minutes.
  The Chair recognizes the gentleman from New York.

[[Page 26663]]


  Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, first I want to thank the minority ranking member on the 
Ways and Means Committee and our staffs for working to bring some 
relief to those people that are feeling the problems of the subprime 
mortgage crisis.
  I want to make a special thanks to Congressman Rob Andrews, whose 
creativity in working with the committee, along with Zach Space, gave 
us the direction to remove some of the inequities that may relieve some 
of the pain that people are feeling.
  It's a commonsense piece of legislation that when the banks and those 
that hold the mortgage decide to give forgiveness on some parts of that 
loan, that these parts of the loan not be considered as income and does 
not create a taxable event. So we do that. We passed it out by voice 
vote because it just made a lot of sense.
  In addition to that, we make it easier for people to extend their 
mortgage insurance, as well as those people who own condos, to be able 
to get relief from debts that they may have by getting long-term 
extension of private mortgage insurance on all of them.
  Finally, the bill makes it easier for taxpayers to form housing 
cooperation co-ops.
  We give a general relief and at the same time make it more difficult 
for people to move into their rentals or vacation homes and enjoy the 
same tax relief as they move from their original homes. In other words, 
they can only get the tax relief for that part of the time they 
actually lived in the rental or the vacation home, rather than having 
the luxury of moving from one vacation home to the other and enjoying 
the tax benefits.
  Mr. Speaker, I yield the balance of my time to one of the hardest-
working members of the committee that spent a lot of time on this 
subject matter, Mr. Blumenauer, and allow him to delegate the time as 
requested by other Members of the House.
  The SPEAKER pro tempore. Without objection, the gentleman from Oregon 
will control the remainder of the time.
  There was no objection.
  Mr. McCRERY. Mr. Speaker, I rise in support of this legislation, 
though not without some reservations. I share the concern of my 
chairman and my colleagues about the subprime mortgage crisis.
  While we are all ultimately responsible for the contracts we sign, 
there were clearly failures in the market that led people to buy homes 
larger or more expensive than they could really afford, or to accept 
mortgage terms that might quickly become unsustainable.
  The result has been a growing number of foreclosures, which, in turn, 
puts downward pressure on other home prices. Moreover, when a bank 
forgives some or all of the mortgage, that cancelled debt is treated as 
income and is subject to tax. Too many people are learning the hard way 
about this ``kick-'em-when-they're-down'' feature of the tax code.
  In August, President Bush recognized the seriousness of this crisis 
and proposed a temporary provision exempting from tax the income that 
individuals receive when a bank reduces or eliminates the mortgage on a 
primary residence.
  I think that his proposal, a temporary solution to a temporary 
crisis, is appropriate, and asked the Rules Committee to make in order 
a substitute which did just that. As my colleagues know, however, we 
were not given that opportunity, and so we are not debating such a 
proposal.
  Nevertheless, there are good policy arguments for making this 
provision permanent, just as there are for making it temporary. But the 
important thing is that we do something to help. I am glad the chairman 
of the Ways and Means Committee decided to move a bill dealing with 
this crisis.
  The bill does, however, contain revenue offsets that I do find 
troubling. Generally, I continue to oppose PAYGO rules that require us 
to raise taxes in one place in order to provide tax relief in another. 
Nonetheless, those are the rules that this House has adopted, so I 
understand the majority's need to include an offset in the bill.
  The offset being used today will deny part of the capital gains 
exemption to families who sell a second home which was not always their 
primary residence. During committee markup, I expressed concerns that 
the proposal could undercut housing prices in areas of the country 
where second-home purchases form a large share of the housing market. I 
understand the chairman's desire to identify an offset within the 
housing market, and that certainly constrained our choices.
  I also appreciate the chairman's efforts to include transition relief 
to limit the effect of this provision on families who may already own 
more than one home. As has been noted already and will surely be noted 
again, the bill, including this offset, has been endorsed by several 
leading real estate groups, and that calms, although it doesn't 
eliminate, my concerns about the impact the offset may have.
  Thus, while I do support the positive tax relief in this bill for 
those with cancellation of indebtedness income, I would prefer to do so 
without this objectionable offset. It is my hope that as this 
legislation moves forward, as I believe it should today, we will have 
an opportunity to reconsider the revenue raises attached to it.
  Mr. Speaker, I reserve the balance of my time and request unanimous 
consent that the gentleman from Kentucky (Mr. Lewis), who coauthored 
the original legislation similar to the bill before us today with Mr. 
Andrews, be allowed to allocate the remainder of the time.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Louisiana?
  There was no objection.
  Mr. BLUMENAUER. Mr. Speaker, I recognize myself for 2\1/2\ minutes.
  It is not often I find myself disagreeing with my esteemed friend, 
the ranking member of the Ways and Means Committee, but I would like to 
briefly address his concerns.
  As our esteemed chairman, Mr. Rangel, pointed out, this is a serious 
program that all agree needs a serious solution to avoid having people 
who lose their homes end up having their loss become a taxable event. 
Our legislation solves this.
  Where I take modest exception to the ranking member and, in fact, had 
a rather spirited debate before the Rules Committee with Ranking Member 
Dreier that this is somehow a temporary problem and just requires a 
temporary solution, we are in a situation now where the majority would 
argue that there is never a good time to have people who lose their 
homes have that loss be a taxable event. Second, unlike the Bush 
administration thinks this is going to be solved in the next year or 2, 
the fact is, in 2006, 20 percent of the first-lien mortgages were in 
the subprime market.
  We are going to see exploding adjustable rate mortgages for years. 
Those people shouldn't have uncertainty if there are people who assume 
control who think that their loss should be a taxable event.
  As it speaks to the pay-for, the Democrats have made a commitment 
that we are going to pay for our actions. We are not going to add to 
the deficit. This is an entirely appropriate pay-for. There was never 
an intent with the $500,000 per couple exclusion from capital gains on 
the sale of their homes to string these together.
  I came to Congress committed to enacting that relief to protect them. 
But under the provisions that, as it has worked out, some 
extraordinarily wealthy people can string these together and have a 
$500,000 tax-free gain three times in 6 years.
  Our amendment, our pay-for, gives everybody the protection for their 
principal home and allows them to get the capital gains exclusion to 
the extent that a second home is their principal home. It's reasonable, 
it's balanced, it's paid for. I urge its adoption.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LEWIS of Kentucky. Mr. Speaker, I yield myself such time as I may 
consume.
  I rise today in strong support for the Mortgage Forgiveness Debt 
Relief Act

[[Page 26664]]

of 2007. I have heard concerns from many homeowners in my district 
about the serious situation in the mortgage market. A recent University 
of Michigan study of homeowners indicated that at least 26 percent of 
those surveyed had experienced a loss of equity in their home during 
the past year. These declining prices have led some families to sell 
their homes for less than they paid for them.
  On August 31, President Bush spoke from the Rose Garden and called on 
Congress to address a crisis in the mortgage market. Included in the 
President's priorities was a bill that Congressman Rob Andrews and I 
introduced in April to relieve tax obligations on those who sell homes 
that have lost equity and have been forgiven a portion of outstanding 
mortgage debt.
  Our measure was later incorporated into the larger bipartisan 
committee bill that we are debating today, just a little over a month 
since the President's remarks. This legislation, although not perfect, 
is a piece of legislation that I asked my colleagues to take a close 
look at and the intent of the bill before casting your vote.
  You will see that this legislation delivers real help to our 
constituents. Under current law, only 2 categories of individuals pay 
taxes when selling the principal residence: Those who have been able to 
realize a capital gain of more than $250,000 or $500,000 on a joint 
return and those who lose the equity in their home and are forced to 
pay tax if the lender forgives some portion of the mortgage debt.
  It is unfair to tax people on phantom income, particularly when they 
have suffered serious economic loss and had less ability to pay the 
tax. The Mortgage Forgiveness Debt Relief Act would relieve this tax 
burden.

                              {time}  1400

  The Andrews-Lewis provision states that no tax will be collected when 
a lender forgives part of the mortgage on the sale or disposition of a 
principal residence. This proposal has earned the support of the 
National Association of Home Builders, the National Association of 
Realtors, and the United States Department of the Treasury.
  Addressing this Tax Code inequity and other long-term issues in the 
housing market cuts to the core of our national economic stability as 
we seek to calm financial markets, aid local communities, and support 
one of our most basic American aspirations, and that's homeownership.
  I would like to thank my colleague, Congressman Andrews, for his 
commitment to this issue. I also appreciate the time and effort of my 
chairman, Congressman Rangel, Ranking Member McCrery, and their staffs 
for moving this important measure to the House floor.
  The bill before us is a good first step toward addressing the 
mortgage situation. But more important, this bill is an example of what 
happens when both parties work together to produce good policy that 
will benefit millions of Americans.
  Mr. Speaker, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield 2 minutes to the distinguished 
Chair of the Trade Subcommittee, and a senior member of the Ways and 
Means Committee, Mr. Levin.
  Mr. LEVIN. Mr. Speaker, I rise in strong support of this legislation. 
On the Democratic side, we've been emphasizing the importance of 
fairness in the code, of equity in the code, the ability to go home, 
meet our constituents, look them squarely in the eye and say that we're 
taking steps to make the Tax Code more equitable. And this legislation 
is a step in that direction, and an important one so a loss isn't 
taxable when it should not be. So this is one step, an important step, 
towards meeting the subprime mortgage crisis.
  My home State of Michigan has very much suffered from this 
phenomenon, and I'm glad that we're taking this step today.
  As mentioned, also included in this legislation is a 7-year extension 
of the deduction for mortgage insurance premiums. This is also 
necessary. What it does is to level the playing field among the 
products of mortgages; and this will be helpful, especially helpful 
now, in view of the crisis with these mortgages.
  Let me just say a word about the payment. There's been some comment 
about the pay-for, and I mean to say this charitably. I think this pay-
for is better than, much better than no pay-for. And we've been having 
too much, in recent years, legislation that proceeded without any pay-
for at all. And this is an effort to be fiscally responsible, and I 
think it does so in an effective and an equitable way.
  I urge support for this legislation.
  Mr. LEWIS of Kentucky. Mr. Speaker, I yield 2 minutes to my friend 
from Pennsylvania (Mr. English).
  Mr. ENGLISH. Mr. Speaker, I thank the gentleman for the opportunity 
to speak on a bill that he has spent an extraordinary amount of time on 
and is most timely.
  The bill before us today is really a question of bringing fairness to 
the Tax Code. At its heart it puts those taxpayers that have been 
placed in the tough situation of declining property values and perhaps 
even foreclosure in a better position to be able to stay in their 
homes.
  Under current law, a homeowner must pay taxes at ordinary income 
rates on the fictitious income never realized by the homeowner when a 
lender forgives part of the debt owed on a mortgage. It is simply 
unfair that when lenders do the right thing and try to work to keep 
working families in their homes during tough times, that the taxman 
then comes and presents that family with a bill on money that they 
never saw.
  The kicker, Mr. Speaker, is that were the homeowner to realize a gain 
on selling their home, the situation is a very different matter. In 
that instance, the seller of the home would be only required to pay 
tax, and at the capital gains rate versus the income tax rate on the 
amount above an exclusion. Yet, for the homeowner facing a short sale 
or participating in a debt forgiveness proposal in order to keep them 
in their home, no such help is extended through the Tax Code.
  This bill provides a major step toward helping taxpayers, our 
constituents, facing this difficult situation. And, Mr. Speaker, it 
does it while maintaining tight controls to ensure that this change 
will not be abused by those looking to game the system.
  In short, given the situation facing so many of our constituents in 
this uncertain housing and credit market, this is a needed change for 
working families and for our economy as a whole.
  In States such as Pennsylvania, where delinquency rates are climbing 
by the quarter, this will serve to keep people in their homes. 
Homeownership is a major part of the equation when it comes to building 
savings and ownership in our society, and we shouldn't permit our Tax 
Code to unnecessarily stand in the way of enabling working families to 
participate in the ownership society.
  I urge my colleagues to make this bill law as soon as possible.
  Mr. BLUMENAUER. Mr. Speaker, I yield 2 minutes to the distinguished 
Chair of the Select Revenue Measures Committee and a champion of tax 
fairness, Mr. Neal from Massachusetts.
  Mr. NEAL of Massachusetts. Mr. Speaker, I thank Mr. Blumenauer for 
yielding the time. And I want to acknowledge Chairman Rangel and Jim 
McCrery today for the manner in which they moved this legislation and 
how swiftly they addressed the issue that is looming across markets 
here in America and has had, in fact, an international impact.
  In my home State of Massachusetts, foreclosures have risen by 66 
percent over the last year. Recent studies have estimated that one in 
five subprime mortgages from the past 2 years will result in 
foreclosure. That means more than 1 million homeowners will lose their 
opportunity to hold on to the American Dream. But even more distressing 
will be the tax bill if the lender is kind enough to forgive part of 
this debt.
  We want to do all that we can to keep them in their home and to work 
out some arrangement to help them keep paying, even if that means 
forgiving a part of the tax debt. But with

[[Page 26665]]

the tax bill looming, many might even argue that that could be 
counterproductive. So that's why I'm enthusiastic about supporting the 
legislation that's on the floor today.
  This bipartisan bill, and I emphasize, the most bipartisan bill in 
the last 7 years on the Ways and Means committee, this bipartisan bill 
would change the current tax law and provide that homeowners would not 
be taxed on the portion of forgiven debt if due to financial hardship 
or decline, and I emphasize decline, in the value of the home.
  It simply makes good sense to do this. The bill has been endorsed by 
the Realtors Association, the homebuilders, the mortgage bankers, and 
most importantly, members of the American family.
  This is a commonsense proposal. I hope we're all going to support it.
  Mr. LEWIS of Kentucky. Mr. Speaker, I yield 2 minutes to Mr. Sam 
Johnson from Texas.
  Mr. SAM JOHNSON of Texas. Mr. Speaker, the current problems with 
mortgage and real estate markets are considerable, but they're not 
permanent. For the individuals and families who have gotten into 
trouble with inappropriate mortgages, I'm glad to see that their 
lenders are restructuring and writing down loans so people can move on 
with their lives. Taxation of phantom income is something I've fought 
for a long time. I have confidence in the American economy and in the 
fact that real estate markets will rebound. It's not a permanent 
problem.
  However, this bill puts permanent relief in place and sets up a 
system where there is permanent assumption of sliding home prices. 
Instead of a permanent problem, I believe it's a short-term problem 
worthy of being given emergency budget designation. This would allow 
this phantom income to remain untaxed, and to make it unnecessary for 
permanent tax increases to be imposed on other Americans.
  The tax increase the majority has chosen as an offset is a permanent 
luxury tax on one in 20 American families who own a second home. The 
Ways and Means Committee has a track record on luxury taxes, and it's 
not good. When the Democrats were last in the majority, they imposed a 
luxury tax on yachts and claimed that only the rich would pay the tax. 
The luxury tax on yachts really ended up being a tax on boats. It was a 
disaster tax on the American boat building industry and on marinas all 
over America. The luxury tax killed the yacht business, devastated an 
industry and was finally repealed with sincere regret.
  I fear this luxury tax on second homes will have the same effect as 
the luxury tax on yachts. Yet our friends, the Realtors, the bankers 
and the homebuilders all support the bill before us today because of 
the need for relief and mortgage debt forgiveness.
  It's clearly not a perfect bill. It should come back from conference 
with the Senate with only a temporary provision, then the luxury tax on 
second homes ought to no longer be necessary because it should be given 
the emergency budget designation it deserves.
  Mr. BLUMENAUER. Mr. Speaker, I yield myself 15 seconds to clarify 
that there's no luxury tax on second or third homes. It preserves the 
tax exemption for the $500,000 capital gain on a residence, and it 
permits people to claim an additional benefit to the extent to which it 
is their primary residence in the future.
  I would at this point, Mr. Speaker, recognize a distinguished member 
of the Ways and Means Committee, Mrs. Tubbs Jones from Ohio, whose 
experience helped shape this legislation, for 2 minutes.
  Mrs. JONES of Ohio. Mr. Speaker, I want to commend my colleagues, 
both on the Democratic and Republican side, for introducing this 
legislation.
  I rise today in support of H.R. 3648, the Mortgage Forgiveness Debt 
Act of 2007.
  It comes as no surprise to most Americans that when debt is forgiven 
by lending institutions in a foreclosure, this amount must be included 
as income in their tax statement. In a time of rising foreclosures, I 
cannot imagine anything more upsetting to a family than this scenario. 
The situation usually occurs when the family cannot pay their mortgage 
and then must give up their home. Then they must pay tax on phantom 
income when the lender forgives some part of the homeowner's mortgage.
  More than 8 years ago, I introduced a piece of legislation called the 
Predatory Lending Reduction Act of 2001, I believe it was. And in that 
legislation, I suggested that we needed to monitor or regulate mortgage 
brokers.
  The reason I raised the issue is because most of the subprime lending 
that occurs in America comes through brokers who are brokering subprime 
lending mortgages.
  The reason I'm so concerned about the statement of my colleague 
before about this taxation should not be permanent, the reality is, for 
many families who lose their homes as a result of the situation we're 
in, it's permanent. It's permanent loss of assets that would pass from 
one generation to the next. And they can never recover from it. It's 
permanent loss for communities where the tax duplicate is reduced 
because they don't have that money upon which they can build a rating 
so that that community could then borrow money on a bond. It's a 
permanent loss for public school systems that no longer receive the tax 
that you allow them to be able to support that public school system. So 
this legislation is very, very important.
  And whatever happens in the housing market, and hopefully we're going 
to get a hold on these subprime lenders who have devastated permanently 
our communities across the United States of America, we're going to get 
a hold on that. But in the interim, let's give the people who are in 
this position a break.
  Mr. LEWIS of Kentucky. Mr. Speaker, I yield 3 minutes to Mr. Brady 
from Texas.
  Mr. BRADY of Texas. Mr. Speaker, if you lose your job and lose your 
home or are forced to sell at a loss, only in America do you get a 
bill, a tax bill from Uncle Sam for forgiven debt. Having witnessed 
this during the terrible Texas recession of the 1980s, it is nothing 
less than shooting the financially wounded. There's no question this is 
long past time to correct this unfairness.
  I applaud the authors of this bill, Representatives Lewis and 
Andrews, and all of those who have helped bring this to the floor 
today. There is serious question, however, about the way we pay for it.
  Raising taxes on the sales of second homes unfairly taxes families 
who live in one city, but are forced to work in another, and couples 
who have scrimped their whole lives to enjoy a retirement home they 
dreamed of.

                              {time}  1415

  It is a poor way to fund this bill.
  This $2 billion tax hike unfairly punishes those who make their house 
payments to help those who can't or who find themselves in a bad 
situation. It's a false choice, completely unrelated to each other. And 
yet those who profited millions of dollars from the sale of predatory 
and risky loans walk away unscathed. What type of accountability is 
that?
  Because this pay-for has had no real study, no in-depth analysis by 
Congress, I and others worry there may well be unintended consequences 
that damage the value of second homes and, in the long run, not today 
but in the long run, harm lake communities, vacation communities, and 
retirement communities around the Nation whose economies are dependent 
upon these types of homes.
  There are better ways to offset the tax cost of this bill, including 
raising more than $1 billion simply by allowing government workers in 
457 plans to have the option of a Roth-style IRA, an option available 
to millions of workers in the private sector.
  I am hopeful that before this bill goes to the President's desk that 
a change is made, whether that recommendation or another. This is an 
important measure to help those who are losing their homes or are in a 
bad situation. There is surely a fairer, more thoughtful way to pay for 
it.
  Mr. BLUMENAUER. Mr. Speaker, I yield 2 minutes to the distinguished

[[Page 26666]]

Ways and Means Committee member, Mr. Pascrell from New Jersey, a former 
mayor who has firsthand experience about the significance of this 
legislation.
  Mr. PASCRELL. I thank the gentleman for yielding. I want to thank Mr. 
Rangel and Mr. McCrery for the great work they have done and the great 
work of Rob Andrews from New Jersey, the exhaustive efforts in this 
regard, to help people avoid foreclosure, to stay in their homes.
  There is a little doubt that the current tax effect on the struggling 
homeowners is not fair or prudent. Requiring any discharge of 
indebtedness to be included in taxable income further exacerbates and 
endangers the financial health of those already in distress.
  Think about it: A bank forgives some amount of indebtedness for a 
homeowner in trouble, either to avoid foreclosure or to forgive a debt 
to a homeowner in the foreclosure process. Right now the amount of 
forgiven indebtedness is treated by the IRS as income, which is then 
taxable. That's pretty incredible, I think.
  For families across America, this dubious income and the resulting 
tax burden can cause an even greater level of anguish that they should 
not have to absorb in the time of need.
  This legislation would provide a permanent exclusion of gross income 
of discharged homeowner indebtedness. It is the wise and decent thing 
to do.
  And I might add there is danger ahead. Right now between January and 
September of this year $263 billion of debt that was opened up, people 
were losing their homes, and in 18 months that is going to go to $700 
billion of loans in the pipeline that are going to open up to higher 
rates. This is what we have to look forward to. This is a serious, 
serious problem that's not going to go away next week.
  So I thank both the chairman and the ranking member. With the 
abundance of acute problems in the mortgage finance system, this 
legislation can help stabilize families, their neighborhoods and 
communities, as well as our national economy.
  Mr. LEWIS of Kentucky. Mr. Speaker, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield 2\1/4\ minutes to the 
distinguished Ways and Means member from Nevada (Ms. Berkley), who has 
represented an area that is facing this problem and has been so 
generous in sharing with us the consequences.
  Ms. BERKLEY. Mr. Speaker, I thank Mr. Blumenauer for his leadership 
on this issue.
  I rise today in support of the Mortgage Forgiveness Debt Relief Act. 
This legislation represents an important step in helping homeowners 
caught in our Nation's housing crisis. The people I represent have been 
hardest hit by this crisis. It pains me to say that the State of Nevada 
currently has the highest rate of foreclosure in the Nation. In Nevada 
there is one foreclosure for every 163 households. That is three times 
the national average.
  Unfortunately, many of those who lose their homes to foreclosure are 
hit with the added insult of a surprise tax bill. This occurs when a 
home has decreased in value and the amount owed is more than the 
current value of the home. The difference between the amount owed and 
the actual value of the home is considered forgiven debt and, 
therefore, taxed at regular income. With interest rates on hundreds of 
thousands of mortgages about to reset and home values in decline in 
many areas, this foreclosure tax is likely to be a growing problem.
  This bill will help protect homeowners from this tax by providing a 
permanent exclusion of the discharged debt as long as the mortgage was 
on the primary residence.
  And for those who fear that this legislation will bail out wealthy 
land speculators who have made bad investments, let me assure you that 
the relief provided in this bill is targeted towards those losing the 
very roofs over their heads, their family's home, and not to real 
estate speculators who made bad bets.
  Additionally, this bill will extend the tax deduction on private 
mortgage insurance to provide an additional measure of tax relief to 
homeowners. Lowering the cost of mortgage insurance by keeping this tax 
deductible will help ensure that more borrowers are choosing mortgages 
they can actually afford. For some of my constituents this tax savings 
will mean the difference between being able to stay in their homes or 
becoming one of thousands facing foreclosure and loss of their family 
home.
  For those on the other side of the aisle who are criticizing the pay-
for in this bill, not one, not one of them has come up with a sensible 
and honest alternative or solution to the pay-for that is included 
here.
  I think this is a good piece of legislation. I urge support for this 
legislation.
  Mr. LEWIS of Kentucky. Mr. Speaker, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, it is my honor to yield 2 minutes to the 
distinguished gentleman from New Jersey (Mr. Andrews), who has been 
acknowledged as one of the prime drivers in shaping this legislation.
  Mr. ANDREWS. Mr. Speaker, I thank my good friend for yielding, and I 
would like to thank Chairman Rangel and his staff especially for their 
great work in bringing this to the floor. Thank you very much. And to 
Mr. McCrery and to my friend Mr. Lewis for showing that when people 
from two parties come together in support of a good idea, it can 
happen.
  This is what this bill is about: A person buys a house for $150,000 
and has a $140,000 mortgage. And then bad times hit the neighborhood 
and the person can only sell the house for $130,000, but they still owe 
$140,000 on the mortgage. So they go to closing and they sell the 
house, but even after all the proceeds of the sale are paid, they still 
owe money on the mortgage. Now, someone is only going to do this 
because they have lost their job or had a health crisis or some other 
family crisis. By definition, this is an American family in some 
trouble.
  If their lender says that they are going to write off that $10,000 
that still is owed on the mortgage, if the lender says we are not going 
to bother to chase this person, usually because there is nothing to 
recover from, under present law the IRS would treat that family as 
having $10,000 worth of income. Now, they have no money in their 
checking account to pay it. They have no means to go earn the money. 
They owe a tax on money they never saw.
  This is unfair, and it exacerbates the problem we see in the mortgage 
market right now. So Republicans and Democrats came together. We are 
thankful for the leadership of Chairman Rangel, and we have before us 
now a bill that will address in a fair and targeted way this problem.
  I would also add I do appreciate the pay-for. I think we should pay 
for what we do here. And what this bill does is close a loophole. It 
basically says that everybody can get the $500,000 exclusion for the 
house they actually live in, but you can't take that for a property you 
don't live in. That seems pretty fair to me.
  So, again, I thank people on both sides of the aisle for their 
support. I would urge a ``yes'' vote.
  Mr. LEWIS of Kentucky. Mr. Speaker, I yield myself 15 seconds.
  I want to thank Mr. Andrews for this bill, and I certainly have 
appreciated working with him on this.
  And this is a good time. This is good for the American people to see 
that we can come together when a problem, a serious problem, is 
affecting them and we can come up with a solution. Instead of pointing 
fingers and talking about a problem, we have actually come up with a 
solution. So thank you for your work.
  Mr. BLUMENAUER. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Rhode Island (Mr. Langevin).
  Mr. LANGEVIN. Mr. Speaker, I rise in strong support of the Mortgage 
Forgiveness Debt Relief Act. I commend the sponsors. I believe that 
this is a necessary and compassionate step in helping families recover 
from problems caused by the continuing mortgage crisis.
  Let's face it. Unscrupulous lending practices have taken their toll 
as hardworking families struggle to keep pace with ballooning mortgage 
payments.

[[Page 26667]]

  Under current law any debt forgiven by a lender is treated as phantom 
income and subject to taxation. At a time when so many families are 
already in crisis, it is fundamentally unfair to penalize them by 
taxing money they may recover through refinancing their mortgage or 
foreclosure of their homes.
  The Mortgage Forgiveness Debt Relief Act will change the Tax Code to 
prevent forgiven mortgage debts from being assessed as gross income. 
This critical measure will help address the persistent problems in the 
housing market that have resulted from unfair lending practices. And I 
urge my colleagues to join me in supporting it.
  Mr. LEWIS of Kentucky. Mr. Speaker, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield 1 minute to the gentleman from 
Ohio (Mr. Space).
  Mr. SPACE. I thank the gentleman from Oregon.
  Home foreclosures are, unfortunately, something that Ohioans face far 
too frequently. Ohio ranks near the top in the Nation in foreclosures. 
In this year alone, approximately 61,000 families will have their homes 
foreclosed upon. These are families who have fallen victim to 
unscrupulous subprime lending brokers, who have fallen victim to 
failing health, and who have fallen victim to a changing economy, one 
where we have seen our manufacturing base eroded, our cost of the 
living through gas and utilities increasing, and stagnant wages. The 
phantom tax on forgiven debt adds injury to insult, especially to 
working families who have undergone the trauma of a foreclosure.
  I am very grateful for Chairman Rangel's leadership on this issue and 
thankful that our leadership as the Democratic Party has taken up this 
cause as well. And, furthermore, I am gratified at the bipartisan 
support that this body has demonstrated in its commitment to tax relief 
for middle-class and working families.
  Mr. LEWIS of Kentucky. Mr. Speaker, I reserve the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Indiana (Mr. Donnelly).
  Mr. DONNELLY. Mr. Speaker, I am proud, with my colleagues on both the 
Republican and Democratic sides, to support H.R. 3648, the Mortgage 
Forgiveness Debt Relief Act. This provides much-needed tax relief to 
American families facing foreclosure. As mortgage rates reset to levels 
that families are unable to afford, this crisis continues to grow.
  In my home State of Indiana, one in every 219 Hoosier families now 
face foreclosure. We rank well above the national rate, with 3 percent 
of our loans in foreclosure. Subprime loans which have affected many of 
our Nation's families account for nearly half of our State's 
foreclosures.
  This legislation permanently exempts individuals from being taxed on 
forgiven debt in the event of foreclosure. By passing this legislation, 
we are taking an important step in preventing homeowners already faced 
with the devastation of losing their home from also incurring an 
additional tax burden that they are unable to repay. We should not be 
imposing additional hardships on families by imposing an unfair tax 
bill on them at the worst possible moment.
  Mr. Speaker, I appreciate the bipartisan nature of this legislation.
  Mr. BLUMENAUER. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Arizona (Ms. Giffords).

                              {time}  1430

  Ms. GIFFORDS. Mr. Speaker, I rise today in support of the Mortgage 
Forgiveness Debt Relief Act, an important piece of legislation.
  A few years ago, Arizona had been a national leader in home prices. 
With the growing subprime mortgage crisis, Arizona is now experiencing 
increasing record foreclosures. In May, new foreclosures in my State 
were 141 percent higher than they were just 2 years ago.
  Some mortgage lenders are working responsibly with homeowners to 
adjust their mortgages to fairly reflect the decreased home values. 
They are adjusting their lending policies in response to the current 
housing market. Congress has to do the same. We should not penalize 
homeowners by taxing them their discharge debt.
  This bill encourages market-based decision; it creates fundamental 
tax fairness. This bill responsibly helps Arizona families avoid 
foreclosures and to remain in their homes. Fewer foreclosures will help 
stabilize property values and protect our local and our regional 
economies.
  I proudly cosponsored this bipartisan legislation that is endorsed by 
the National Association of Realtors, the National Association of Home 
Builders, and the Mortgage Bankers Association.
  Mr. BLUMENAUER. Mr. Speaker, I would recognize the gentleman from 
California (Mr. McNerney) for 1 minute.
  Mr. McNERNEY. Mr. Speaker, in my district, the city of Stockton, 
California and surrounding San Joaquin County are the very epicenter of 
the growing national home mortgage crisis. San Joaquin County has the 
second highest level of foreclosures in the country. Nearly one out of 
50 homes is being repossessed. Stockton has the highest foreclosure 
rate of any United States city, and this is tearing our communities 
apart. To add insult to injury, former homeowners who lost money when 
their houses were sold, have to pay taxes on their losses. And those 
able to negotiate for a reduction in the amount they owe are forced to 
pay taxes on this amount.
  This doesn't make sense. Thankfully, the legislation we're voting on 
today will eliminate this phantom tax and provide some breathing room 
for people in financial crisis.
  I strongly support this bill.
  Mr. LEWIS of Kentucky. Mr. Speaker, I just want to say that this 
isn't a perfect bill, I don't guess there has ever been a perfect bill 
on this floor, but it's a good bill and it does provide a solution to a 
real problem for Americans. I am very happy that we have a good 
bipartisan bill that I encourage all of my colleagues to vote for and 
help out in this very tough time for a lot of homeowners in this 
country.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I yield myself such time as I may 
consume.
  I would like to commend my colleague for the work that he has done on 
this measure, Mr. McCrery, and our leadership because at core there is 
bipartisan understanding and support for the elimination of what has 
been referred to as a phantom and unfair tax on the poor souls who lose 
their homes and who receive no net increase to them.
  Where we have modest disagreement is in two specific areas: one, the 
bill that is before us recognizes that there is never a good time to 
tax American homeowners on this phantom benefit of having their loan 
forgiven on a foreclosed property. There no circumstances under which 
we could conceive that we wanted to penalize them for something that 
they didn't receive, so we made it permanent. Unlike the minority, 
unlike the Bush administration, we don't think there is ever a good 
reason to tax them on something that they don't receive.
  Second, we're paying for the cost that is associated with it because, 
sadly, even a tax provision that makes no sense carries value, and 
under our rules, we need to pay for it. And what we did was not to 
implement any additional tax, but to clarify the benefit that is given 
to owners of principal residences that they have a $500,000 tax-free 
gain if they occupy that as their principal residence for 2 out of 5 
years. That's something that we broadly agree upon.
  Now, we've always agreed that that ought to occur to the homeowner. 
Now we're hearing that somehow our friends on the other side of the 
aisle think that an additional tax benefit, so that people could string 
this together over the course of 6 years and get $500,000 three times 
as a tax benefit, is somehow, some way a tax increase. It is not. The 
purpose of that tax provision was never to reward people who could game 
the system and string together tax increases two or three times over a 
relatively short period of time.

[[Page 26668]]

  So we have clarified it: As long as it is their principal home, their 
principal residence, they can claim the exclusion. And to the extent 
that a second home, after they've gotten $500,000 tax free, the extent 
to which they occupy a second home for an additional period of time, 
they can claim the proportion that it is actually their principal 
residence. I would dare say that was the intent for the majority people 
of why that provision was implemented in the first place. It's 
reasonable, it's sound, and I would strongly suggest that that's why 
people in this industry, Realtors, mortgage bankers, homebuilders, 
support the bill that we brought forward.
  I suggest that this bill is something that all of us ought to 
support. I strongly urge its passage.
  Mr. BACA. Mr. Speaker, I rise in support of H.R. 3648, the Mortgage 
Forgiveness Debt Relief Act of 2007.
  Among large metro areas my district in the Inland Empire has the 
fourth highest rate of foreclosure filings in the Nation and was the 
hardest hit area in California through the first half of 2007.
  In San Bernardino County alone there were 19,185 foreclosure filings 
during the first half of 2007, representing a staggering 345 percent 
increase from the previous year. Overall, there is one foreclosure 
filing for every 33 households in the Inland Empire.
  These numbers go to show that the subprime crisis we are experiencing 
today is not an abstract issue. These are real people who are going 
through painful struggles to stay in their home and keep their families 
together.
  Regrettably, when banks and loan servicers decide to help these 
families by forgiving a part of a loan, that debt is then treated as a 
source of income which in turn makes the forgiven amount subject to 
tax.
  Families who are already facing foreclosure should not have to face 
the additional burden of paying tax on phantom income.
  This bill restores fairness for homeowners who are financially and 
economically distressed by eliminating that requirement. It will play a 
central role in helping American families avoid foreclosure and stay in 
their homes and I urge my colleagues to support it.
  Mr. LANGEVIN. Mr. Speaker, I rise in strong support of the Mortgage 
Forgiveness Debt Relief Act of 2007 (H.R. 3648). This measure is a 
necessary and compassionate step in helping individuals and families 
recover from the problems caused by the continuing mortgage crisis.
  Unscrupulous lending practices have taken their toll on hard-working 
families, who are increasingly unable to keep pace with their 
ballooning mortgage payments. We have all seen how the skyrocketing 
interest rates associated with nontraditional mortgages, such as 
adjustable-rate mortgages, have devastated families nationwide. These 
families are often left with few options. They may either try to 
renegotiate the terms of their mortgage for fixed interest rates, or be 
forced to foreclose on their homes. Both options can be emotionally 
difficult and are further complicated by the hefty taxes that may 
result.
  Under current law, when a lender forgives all or part of a loan, it 
is required to report the amount of debt forgiven to the IRS and to the 
homeowner. That amount is subsequently treated as ``phantom income'' 
and is subject to taxation by the IRS. At a time when families are 
already in financial dire straits, it is fundamentally unfair to 
penalize them by taxing the money they recover through either 
refinancing their mortgage or foreclosure of their homes.
  I am proud to support the Mortgage Forgiveness Debt Relief Act, which 
will change the Tax Code to prevent forgiven mortgage debts from being 
assessed as gross income. This improvement will limit the financial 
penalties families incur when refinancing their homes at fixed rates 
and could even keep some families on the brink of foreclosure from 
losing their homes. I am also pleased that, under this legislation, 
people would not be unfairly taxed when a lender voluntarily agrees to 
waive prepayment penalty fees.
  The Mortgage Forgiveness Debt Relief Act is a critical measure that 
will help address the persistent problems in the housing market 
resulting from unfair lending practices. This legislation is another 
important step toward fixing the mortgage crisis nationwide, and will 
help stabilize families throughout the Nation and our economy as a 
whole.
  Ms. LORETTA SANCHEZ. Mr. Speaker, the situation in the housing market 
is well documented.
  Unscrupulous practices by mortgage brokers in search of fees and the 
unrealistic belief that housing prices would continue their meteoric 
rise is resulting in the most perilous situation for the housing 
sector, and the economy as a whole since the Great Depression.
  The most urgent action for this Congress is to encourage actions that 
enable families to stay in their homes.
  Today we will consider H.R. 3648, the Mortgage Forgiveness Debt 
Relief Act. This bill takes the crucial step to restore fundamental 
fairness for homeowners in financial distress by revising language in 
the tax code that includes discharged home mortgage debt as taxable 
income.
  Homeownership, especially among minorities, is at an all time high. 
It has contributed greatly to our economy and our social fabric. 
Foreclosed, empty homes only impose costs that everyone must bear.
  Now is the time to make sensible reforms to protect families and 
consumers who are on the verge of losing their home.
  I commend the Committee on Ways and Means and the House Leadership 
for bringing this important bill to the floor.
  Mr. UDALL of Colorado. Mr. Speaker, I am a cosponsor of this 
important legislation and rise to support its passage
  As we all know, the real estate market is troubled. In Colorado and 
across the country, some families are caught in a bind--as prices have 
declined, they are finding that the value of their homes are less than 
what they owe on their mortgages.
  And many of these people are experiencing financial problems--
including increased payments required as the interest rates on their 
mortgages are adjusted--that can lead to foreclosure or require them to 
work out other arrangements with lenders.
  That is bad enough--but as things stand now, in many cases they find 
that there is more bad news, because today homeowners are taxed on debt 
that they are no longer required to pay, either because a mortgage has 
been foreclosed or restructured.
  That is because the tax code today treats the value of cancelled 
mortgage debt as taxable Income.
  This bill will provide relief to people in this situation. It will 
change the tax laws so as to permanently exclude debt forgiven under 
these circumstances from tax liability.
  It also will help make home purchases more affordable by a long-term 
extension of the tax deduction for private mortgage insurance. Current 
law allows certain premiums paid or accrued for qualified mortgage 
insurance by a taxpayer in connection with financing of the taxpayer's 
residence to be treated as interest--that is, to be deductible. 
However, this is now scheduled to terminate for any amount paid or 
accrued after December 31, 2014.
  This bill will extend the deduction through December 31,2014.
  Mr. Speaker, this is a good measure. I strongly support it and urge 
its approval.
  Mrs. MALONEY of New York. Mr. Speaker, I rise in support of H.R. 
3648, the Mortgage Forgiveness Debt Relief Act.
  This bill will end the double-whammy of paying taxes on the lost 
value of their homes by providing a permanent exclusion from gross 
income of discharged home mortgage debt.
  We are passing this legislation at a time when anxiety over the state 
of the economy remains high and concerns mount that the subprime 
mortgage meltdown will infect the rest of the economy.
  Last month, RealtyTrac released the latest bad news that foreclosures 
reported in August increased 36 percent since July and 115 percent 
since this time last year.
  Expectations are that the next 18 months will be even worse, as many 
subprime loans reset to higher rates. We have real concerns that this 
subprime crisis will cause 2.2 million people to lose their homes.
  The credit crunch, the worsening housing slump, market volatility, 
and weak consumer confidence point to a gathering storm that could drag 
down the economy, possibly taking thousands of American jobs with it.
  In the face of this gathering storm, Democrats in Congress are 
working to help families stay in their home and are working to prevent 
another crisis. The House has passed FHA and GSE reform bills. We are 
working on a predatory lending bill.
  We are working with regulators to advocate forbearance and with 
servicers to engage in workouts for strapped borrowers.
  We recognize this crisis in homeownership and we are doing everything 
we can to respond in a forceful and responsible way.
  Again, I support this legislation.
  Mr. BLUMENAUER. Mr. Speaker, it is estimated that, before this 
housing slump is over, 2 million homeowners will lose their homes due 
to skyrocketing interest rates on their mortgages.
  Increased foreclosures have adverse effects on the values of 
neighboring properties. For example, research indicates that, for each 
foreclosed home in a given neighborhood, the

[[Page 26669]]

prices of nearby homes could fall by 1 percent to 1.5 percent.
  Nationally, housing prices have stopped rising. In fact, some 
measures of home prices have already declined, by more than 3 percent 
since the beginning of 2007. Some economists predict that real housing 
prices are likely to decline by more than 15 percent over the next 2 
years.
  We want to prevent thousands of Americans from getting hit by the 
double whammy of (1) losing their homes to foreclosure, and (2) getting 
slapped with a tax bill when the debt on their home is discharged by 
the lender.
  Even taxpayers that restructure their mortgages to avert foreclosure 
face this risk of triggering large tax bills.
  It doesn't seem right for individuals in this circumstance to face a 
tax bill when they really have no increase in their net worth.
  As I see it, their house went down in value, and the individuals 
couldn't meet their mortgage requirements, resulting in foreclosure. 
The amount of the income that they would recognize without regard to 
this bill would be equal to or less than the decline in value of their 
home. So, absent this legislation, homeowners in this situation would 
be slapped with a tax liability for no net increase in wealth.
  H.R. 3648 would correct that result so that if a person's principal 
residence lost value, that loss won't give rise to a tax liability.
  Mr. BISHOP of New York. Mr. Speaker, I rise in strong support of H.R. 
3648, the Mortgage Forgiveness Debt Relief Act. I am proud to be a 
cosponsor of similar legislation that also gives a much-deserved break 
to homeowners and their families facing enormous tax liability made 
more painful by the housing crisis.
  Nearly 3,000 homeowners in Suffolk County, New York in my district 
are facing foreclosure. One out of every 180 families in my district 
will join 2.2 million families nationwide whose subprime loans have 
already failed or will end in foreclosure.
  Adding insult to injury, most of them have to pay a tax when a lender 
forgives some part of their mortgage. The IRS treats that forgiven debt 
as income, and can even add interest and penalties.
  To be relieved of debt at one moment, but then to be charged shortly 
thereafter with a huge tax bill is a tremendous shock and burden. We 
can all agree that middle class families who lose their homes should be 
spared any further penalty by the IRS.
  Mr. Speaker, losing your home is bad enough. The last thing any 
family in today's housing market needs is for the IRS to make their 
struggle more of an uphill climb. I urge my colleagues to support H.R. 
3648 and commend the leadership for expediting its consideration by the 
House today.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in support of H.R. 3648, the 
Mortgage Forgiveness Debt Relief Act of 2007 because I believe that it 
is the least that the Congress can do to aid beleaguered homeowners, 
who in addition to facing foreclosure, are also facing taxation on 
phantom income.
  It was not a long time ago that the housing market was being touted 
as the savior of the economy and that homeownership was looked to as a 
reliable, stabilizing force in communities across the country. Now that 
the pendulum has swung in the other direction, and the housing market 
is wobbling under the weight of the subprime crisis, it is incumbent 
upon the Congress to assist beleaguered homeowners.
  H.R. 3648 would amend current law which would now tax a homeowner who 
received relief from financial institutions on their mortgages in order 
to save their homes. H.R. 3648 would provide a permanent exclusion for 
any discharge of indebtedness which is secured by a principal residence 
through acquisition, construction or substantial improvement of the 
principal residence.
  Mr. Speaker, this bill also extends the deduction for private 
mortgage insurance for 7 years through 2014 and would relax the rules, 
making it easier for housing groups to qualify as a cooperative housing 
corporation. It would also modify the exclusion of gain on sale of a 
principal residence, all items that would make it easier for homeowners 
to survive the murky waters of the current housing market. As the 
housing crisis continues to run its course, I believe that this 
legislation is a step in the right direction. I believe that more has 
to be done in order to keep homeowners in their homes and help 
stabilize the part of our economy that has been the surest route to 
wealth in our country. I urge all of my colleagues to vote for its 
passage.
  Mr. POMEROY. Mr. Speaker, 75 million American households own their 
home. About 68 percent of these homeowners have a mortgage, and about 
26 percent of those also carry a second mortgage, a home equity line, 
or both. In total, Americans have about $10.4 trillion of mortgage debt 
outstanding.
  The large majority of families are paying their mortgage payments on 
time, but many families are having a difficult time meeting their 
monthly mortgage payments as the interest rates on their loans are 
being reset to higher levels. Missed payments can mean high added fees 
also apply.
  In this last year, more families have found that they just can not 
keep up and end up loosing their home in foreclosure. Both foreclosures 
and their precursor, delinquencies, shot upward. By August 2007, 
foreclosures were up 115 percent from last year, and up 36 percent from 
July. Since economic research shows that a single foreclosure within a 
city block lowers the value of homes in the area by 0.9 percent, many 
lenders want to help families stay in their homes. These families work 
out a new loan with their lender revising the home loans by forgiving 
some of the debt caused by the decline in housing prices.
  The last thing these families need is a tax bill for the ``phantom 
income'' arising from the loss in the value of their home or the amount 
of debt forgiveness. Today, Congress rips up that tax bill for 
struggling families as we pass the Mortgage Forgiveness Debt Relief Act 
of 2007. This bill provides relief to those families by permanently 
excluding debt forgiven under these circumstances from tax liability.
  Housing is an important job creator in our economy. We still need to 
keep home ownership a reachable part of the American Dream. With recent 
reports in the Wall Street Journal showing that demand for previously 
owned homes tumbled in August to the lowest level in 5 years, we know 
that the trouble in the mortgage market hurts sales. Home resales fell 
to a 5.5 million annual rate, a 4.3 percent decline from July, 
according to the National Association of Realtors. Help for new home 
buyers is in H.R. 3648.
  Solid Midwest values helped keep folks in my state North Dakota out 
of the subprime mortgage fallout, by and large. Yet, we all know that 
it is hard for young families to scrape together the money to make a 
significant down payment on their first home. Many of them are not able 
to purchase their home with a 20 percent down payment. Mortgage 
insurance protects these buyers that the market needs, while insuring 
against the loss in home value in the event of default.
  H.R. 3648 would help our kids and other would-be homeowners secure 
their first homes through a long-term extension of the tax deduction 
for private mortgage insurance. Mortgage insurance keeps new homeowners 
from taking out second and riskier loans to buy their first home. 
Extending this tax deduction until 2015 treats mortgage insurance as a 
cost of homeowners hip in the same way as mortgage interest.
  The bottom line is that foreclosures do not help the taxpayers. It 
does not help the economy and it does not help our communities. H.R. 
3648 is another step that this Congress is taking to restore strength 
to the Nation's floundering housing market. Providing help to keep 
families in their homes and to improve the ability of young families to 
buy their first home from those houses on the market would help ease 
the crisis we face.
  Mr. KAGEN. Mr. Speaker, my constituents in Northeast Wisconsin and 
countless others across this Nation are hurting because of the current 
mortgage crisis.
  The fact is many homeowners are increasingly unable to make monthly 
payments or sell their homes in the middle of a national housing slump.
  The number of national foreclosure filings reported last month more 
than doubled from a year ago.
  For these reasons, I rise in support of H.R. 3648.
  We need to provide tax relief to homeowners who face foreclosures on 
their homes.
  Mr. MEEK of Florida. Mr. Speaker, I am pleased to be a co-sponsor to 
this bill that will provide relief to those people in my district, the 
entire State of Florida, and the country as a whole who are losing 
their homes.
  Foreclosures in south Florida are escalating way too quickly. They 
have tripled in Miami-Dade County and more than doubled in Broward 
County from this time last year. In fact, Florida as a whole is second 
only to Nevada in new foreclosures from January through March of this 
year.
  Why this fast increase in foreclosures? Mostly because lenders gave 
high-priced loans to borrowers during the housing boom, particularly 
borrowers in low-income, largely minority neighborhoods. Starting in 
2000, because property values were rising quickly, financial 
institutions made risky loans that put them and the borrowers in 
jeopardy. About $1.3 trillion in subprime loans was lent to these 
borrowers. Specifically to south Florida, in Miami-Dade, about 23 
percent of these

[[Page 26670]]

loans are subprime--in Broward about 18 percent are subprime--in Miami 
Gardens about 66 percent are subprime.
  Florida homeowners are now bearing about one tenth of that 1.3 
trillion dollar debt. This is more than any other state except 
California. Now the value of these homes is declining but these 
homeowners have this huge outstanding mortgage debt. It's bad enough 
that these homeowners are losing their homes, but under current law 
they would also have to include their discharged mortgage debt in their 
income and pay tax on it.
  This bill will give some relief to those homeowners by eliminating 
that tax. Equally important, the bill will help those homeowners who 
are doing their best to avoid foreclosures--those that are having a 
portion of their mortgage discharged as part of a restructuring of 
their debt.
  It is time for those homeowners in Florida and elsewhere to get this 
badly needed tax relief.
  Mrs. JONES of Ohio. Mr. Speaker, I rise today in support of H.R. 
3648, the Mortgage Forgiveness Debt Relief Act of 2007, a much-needed 
bill that will provide relief to homeowners facing foreclosure on their 
homes. I appreciate the leadership of the Ways and Means Committee 
Chairman, Charlie Rangel. I also applaud the Members from both sides of 
the aisle who are supporting this critical piece of legislation for 
homeowners. I cannot think of a more bipartisan issue than basic 
shelter.
  It comes as a surprise to most Americans that when debt is forgiven 
by a lending institution in a foreclosure, that this amount must be 
included as income on their tax statement. In a time of rising 
foreclosures I cannot imagine anything more upsetting to a family than 
this scenario. The situation usually occurs when the family cannot pay 
their mortgage and then must give up their home. Then they must pay tax 
on phantom income when the lender forgives some part of the homeowner's 
mortgage.
  In my home State of Ohio, the foreclosure epidemic went from bad to 
worse last year as the number of new cases grew by nearly 24 percent 
from 2005. Cuyahoga County led the state in new cases with 13,610 new 
filings last year. This ranking has attracted national attention with 
Ohio's foreclosure rate currently at 18 percent which is higher than 
the national average of 17 percent.
  I must also point out that predatory lenders often target low-income 
and minority communities. Subprime loans are three times more likely in 
low-income neighborhoods than in high-income neighborhoods and five 
times more likely in minority neighborhoods than in white 
neighborhoods. This is an outrage.
  Nothing is more symbolic of the American Dream than the ownership of 
our homes. Almost all of us dream of the day when we can have a place 
of our own. For most Americans, home ownership is the single biggest 
investment they will ever make. That is why the loss of one's home is 
also one of the most humiliating and debilitating experiences that 
anyone can go through. It is, at its core, an issue of humanity.
  That is why I am pleased to rise in support of this piece of 
legislation that will allow taxpayers to exclude from their income debt 
that was forgiven by a financial institution or lender. We cannot sit 
by as a Congress and add insult to injury to our most vulnerable 
taxpayers.
  Many of the homeowners in my district in Cleveland--which has some of 
the highest foreclosure rates in the Nation--need relief, not rhetoric. 
This is the same relief all Americans see and to which we must provide 
access. This bill provides some relief, but need I remind my colleagues 
that much more must be done on this front, and I look forward to 
working on other legislative initiatives that 5 will help to address 
the plight of the American homeowner.
  Mr. BLUMENAUER. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Weiner). All time for debate has 
expired.
  Pursuant to House Resolution 703, the previous question is ordered on 
the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


                Motion to Recommit Offered by Mr. Cantor

  Mr. CANTOR. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. CANTOR. Yes, in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. Cantor of Virginia moves to recommit the bill H.R. 3648 
     to the Committee on Ways and Means with instructions to 
     report the same back to the House promptly with the following 
     amendment:
       Strike sections 5 and 6.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia is recognized for 5 minutes.
  Mr. CANTOR. Mr. Speaker, this motion to recommit is very simple. It 
strikes the tax hike from the bill. A vote for this motion to recommit 
gives us all an opportunity to vote for the underlying bill whose 
purpose is to provide relief to homeowners impacted by the subprime 
crisis without raising taxes on America's families. I, for one, don't 
believe we should raise taxes on one family to cut taxes for another.
  Contrary to the remarks made by my friend from Oregon who alleges 
that some are gaming the system, which could or could not be true, 
there is an instance, and plenty of which occur, that will impact real 
families. If we don't pass this motion to recommit, there will be a 
real cost to real people and real families who are relying on the 
equity built up in their greatest asset, their home.
  Take, for example, a family that moves to a new area in search of a 
job. If that family currently lives in an area with a depressed housing 
market and the family intends to return in the future, they may make 
the reasonable decision to rent their home instead of selling it. They 
would do so in hopes of recovering some of the home's value in the next 
few years.
  Under existing law, if they later move back to their home and, having 
lived at least 2 years in the home for the last 5, any gains realized 
from the eventual sale of the home would be excluded from the tax up to 
$500,000. The underlying bill, however, will change that. Families that 
move back into their old house after several years and then intend to 
sell it could be facing tens of thousands of dollars in additional tax 
bills when they later sell that home. This is nothing more than a tax 
increase on those American families, an additional burden on families 
that are trying to put their children through school, provide health 
care and live the American Dream.
  This provision adds another level of complexity to an already 
complicated Tax Code. Bottom line, Mr. Speaker, the net effect is to 
take away from some American families a tax benefit that they are 
currently enjoying.
  We, in this House, should be making it easier for the American people 
to comply with the Tax Code, and we should strive to make it easier for 
them to provide for their families.
  Now, Mr. Speaker, the opponents of this motion will argue that 
because the motion directs the committee to report back promptly that 
somehow this kills the bill; that simply is not true. Instead, it 
directs the committee to reconsider the bill.
  Now, Mr. Speaker, the Senate is in recess next week and the House 
schedule is extremely light. If this motion passes, we will have plenty 
of time next week to improve the bill. And I, for one, pledge to work 
with the chairman, as I'm sure our leadership will and our ranking 
member, so that we can have a good bill waiting for the Senate when 
they return from their week-long recess.
  So, Mr. Speaker, the underlying bill has a tax increase in it. I urge 
support of this motion to recommit.
  Mr. Speaker, I yield back the balance of my time.
  Mr. BLUMENAUER. Mr. Speaker, I rise to oppose the motion to recommit.
  The SPEAKER pro tempore. The gentleman from Oregon is recognized for 
5 minutes.
  Mr. BLUMENAUER. First of all, as the gentleman mentions, using the 
term ``promptly'' means that it is kicked back to the committee to an 
uncertain future.
  This has been before the committee for some time. There is broad 
bipartisan support that we need to solve this problem. And I have 
listened to my friends, they haven't come forward with any reasonable 
suggestion about an alternative pay-for. They had an opportunity in the 
Rules Committee;

[[Page 26671]]

they had an opportunity before the committee. If we follow their 
course, we're going to be in limbo, I don't know how long, but 
unnecessarily.
  The minority has been interested in the past in making it temporary. 
That was the Bush administration's position; that's what Republicans 
argued before the Rules Committee. We don't want to put it back to an 
uncertain future.
  The 1 proposal that has come forward today for a pay-for was itself a 
long-term revenue loser. Using a Roth-style approach to government 
employee accounts, I think they're 457s, is a long-term revenue drain 
which uses an accounting gimmick in the short term to have people pay a 
little tax so they save a whole lot of tax in the future. That will add 
to the deficit over time.
  Now, contrary to what my distinguished friend from Virginia says, it 
does not disadvantage people. The exclusion for residential property 
for a prime residence was just that, it was to give people a $500,000 
exclusion from capital gain on the sale of the property. It doesn't 
foreclose other people from stringing it forward to get more than 
$500,000. It just means the extent to which it's not your primary 
residence, you don't get a percentage increase above that. If it's your 
primary residence for one-third of that time, you get one-third of the 
benefit, in addition to $500,000 that you get with your first bite of 
the apple. It means you don't get 2 it means you don't get three in 6 
years; you get 1 full bite, and then you get a percentage on top of 
that. It's reasonable; it's fiscally responsible.
  I strongly urge the rejection of this proposal that puts this 
legislation in limbo. There is broad bipartisan support for the 
concept. The permanent support of a permanent nature of it is sound, 
the pay-for is reasonable. I urge rejection of the motion to recommit.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. CANTOR. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage.
  The vote was taken by electronic device, and there were--yeas 201, 
nays 212, answered ``present'' 1, not voting 18, as follows:

                             [Roll No. 947]

                               YEAS--201

     Aderholt
     Akin
     Alexander
     Altmire
     Bachmann
     Bachus
     Baker
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bean
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Hunter
     Inglis (SC)
     Issa
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Marshall
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     McNerney
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Mitchell
     Moran (KS)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuler
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Tancredo
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Westmoreland
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--212

     Abercrombie
     Ackerman
     Allen
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Cardoza
     Carnahan
     Carney
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     DeLauro
     Dicks
     Doggett
     Donnelly
     Doyle
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Frank (MA)
     Giffords
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McIntyre
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                        ANSWERED ``PRESENT''--1

       
     Capuano
       

                             NOT VOTING--18

     Barrett (SC)
     Carson
     Costello
     Cubin
     Davis, Jo Ann
     Delahunt
     Dingell
     Jindal
     Johnson, E. B.
     Lee
     McNulty
     Perlmutter
     Pickering
     Pryce (OH)
     Schakowsky
     Sullivan
     Visclosky
     Weller

                              {time}  1508

  Ms. HERSETH SANDLIN and Ms. McCOLLUM of Minnesota and Messrs. 
EDWARDS, SPRATT, JOHNSON of Georgia, NEAL of Massachusetts, RUSH and 
BUTTERFIELD changed their vote from ``yea'' to ``nay.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.


                          personal explanation

  Mr. WELLER. Mr. Speaker, on rollcall Nos. 946 and 947 on the motion 
to recommit H.R. 3648 and final passage of H.R. 3648, I was unable to 
vote due to a prior family commitment. Had I been present, I would have 
voted ``yea'' for both votes.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. ETHERIDGE. Mr. Speaker, I demand a recorded vote.

[[Page 26672]]

  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 386, 
noes 27, not voting 19, as follows:

                             [Roll No. 948]

                               AYES--386

     Abercrombie
     Ackerman
     Aderholt
     Alexander
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Barrow
     Bartlett (MD)
     Barton (TX)
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Blackburn
     Blumenauer
     Bonner
     Bono
     Boozman
     Boren
     Boswell
     Boucher
     Boustany
     Boyd (FL)
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown (SC)
     Brown, Corrine
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Butterfield
     Buyer
     Calvert
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carter
     Castle
     Castor
     Chabot
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Coble
     Cohen
     Cole (OK)
     Conaway
     Conyers
     Cooper
     Costa
     Courtney
     Cramer
     Crenshaw
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (KY)
     Davis, David
     Davis, Lincoln
     Davis, Tom
     DeFazio
     DeGette
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Donnelly
     Doolittle
     Doyle
     Drake
     Dreier
     Edwards
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Everett
     Fallin
     Farr
     Fattah
     Feeney
     Ferguson
     Filner
     Flake
     Forbes
     Fortenberry
     Fossella
     Frank (MA)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Granger
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hall (TX)
     Hare
     Harman
     Hastert
     Hastings (FL)
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hobson
     Hodes
     Hoekstra
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Hulshof
     Hunter
     Inglis (SC)
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Jordan
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kind
     King (IA)
     King (NY)
     Kirk
     Klein (FL)
     Kline (MN)
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Lamborn
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lucas
     Lungren, Daniel E.
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Manzullo
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (CA)
     McCarthy (NY)
     McCaul (TX)
     McCollum (MN)
     McCotter
     McCrery
     McDermott
     McGovern
     McHenry
     McHugh
     McIntyre
     McKeon
     McMorris Rodgers
     McNerney
     Meek (FL)
     Meeks (NY)
     Melancon
     Mica
     Michaud
     Miller (FL)
     Miller (MI)
     Miller (NC)
     Miller, Gary
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (KS)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Musgrave
     Myrick
     Nadler
     Napolitano
     Neal (MA)
     Neugebauer
     Nunes
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Pearce
     Peterson (MN)
     Peterson (PA)
     Petri
     Pitts
     Platts
     Poe
     Pomeroy
     Porter
     Price (NC)
     Putnam
     Radanovich
     Rahall
     Ramstad
     Rangel
     Regula
     Rehberg
     Reichert
     Renzi
     Reyes
     Reynolds
     Richardson
     Rodriguez
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Ross
     Rothman
     Roybal-Allard
     Royce
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Saxton
     Schakowsky
     Schiff
     Schmidt
     Schwartz
     Scott (GA)
     Scott (VA)
     Sensenbrenner
     Serrano
     Sestak
     Shadegg
     Shays
     Shea-Porter
     Sherman
     Shimkus
     Shuler
     Shuster
     Simpson
     Sires
     Skelton
     Slaughter
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Solis
     Space
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Tiahrt
     Tiberi
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Walberg
     Walden (OR)
     Walsh (NY)
     Walz (MN)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Weldon (FL)
     Wexler
     Whitfield
     Wicker
     Wilson (NM)
     Wilson (OH)
     Wilson (SC)
     Wolf
     Woolsey
     Wu
     Wynn
     Yarmuth
     Young (AK)
     Young (FL)

                                NOES--27

     Akin
     Bachmann
     Blunt
     Boehner
     Brady (TX)
     Broun (GA)
     Camp (MI)
     Culberson
     Deal (GA)
     Duncan
     Foxx
     Franks (AZ)
     Gingrey
     Herger
     Issa
     Kingston
     Linder
     Mack
     Marchant
     Paul
     Price (GA)
     Sali
     Sessions
     Souder
     Stearns
     Tancredo
     Westmoreland

                             NOT VOTING--19

     Barrett (SC)
     Carson
     Costello
     Cubin
     Davis, Jo Ann
     Delahunt
     Dingell
     Doggett
     Jindal
     Johnson, E. B.
     Lee
     McNulty
     Pence
     Perlmutter
     Pickering
     Pryce (OH)
     Sullivan
     Visclosky
     Weller


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining in this vote.

                              {time}  1516

  Mr. FERGUSON and Mr. INGLIS of South Carolina changed their vote from 
``no'' to ``aye.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Stated for:
  Mr. PENCE. Mr. Speaker, on rollcall No. 948, had I been present, I 
would have voted ``aye.''

                          ____________________