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H.R. 3221 (110th): Housing and Economic Recovery Act of 2008

The text of the bill below is as of Apr 17, 2008 (Passed the Senate with an Amendment).

Source: GPO

110th CONGRESS

2d Session

H. R. 3221

In the Senate of the United States,

April 10, 2008.

Amendments:

That the bill from the House of Representatives (H.R. 3221) entitled An Act moving the United States toward greater energy independence and security, developing innovative new technologies, reducing carbon emissions, creating green jobs, protecting consumers, increasing clean renewable energy production, and modernizing our energy infrastructure, and to amend the Internal Revenue Code of 1986 to provide tax incentives for the production of renewable energy and energy conservation., do pass with the following

Strike out all after the enacting clause and insert:

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Foreclosure Prevention Act of 2008.

(b)

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—FHA Modernization Act of 2008

Sec. 101. Short title.

Subtitle A—Building American Homeownership

Sec. 111. Short title.

Sec. 112. Maximum principal loan obligation.

Sec. 113. Cash investment requirement and prohibition of seller-funded downpayment assistance.

Sec. 114. Mortgage insurance premiums.

Sec. 115. Rehabilitation loans.

Sec. 116. Discretionary action.

Sec. 117. Insurance of condominiums.

Sec. 118. Mutual Mortgage Insurance Fund.

Sec. 119. Hawaiian home lands and Indian reservations.

Sec. 120. Conforming and technical amendments.

Sec. 121. Insurance of mortgages.

Sec. 122. Home equity conversion mortgages.

Sec. 123. Energy efficient mortgages program.

Sec. 124. Pilot program for automated process for borrowers without sufficient credit history.

Sec. 125. Homeownership preservation.

Sec. 126. Use of FHA savings for improvements in FHA technologies, procedures, processes, program performance, staffing, and salaries.

Sec. 127. Post-purchase housing counseling eligibility improvements.

Sec. 128. Pre-purchase homeownership counseling demonstration.

Sec. 129. Fraud prevention.

Sec. 130. Limitation on mortgage insurance premium increases.

Sec. 131. Savings provision.

Sec. 132. Implementation.

Sec. 133. Moratorium on implementation of risk-based premiums.

Subtitle B—Manufactured Housing Loan Modernization

Sec. 141. Short title.

Sec. 142. Purposes.

Sec. 143. Exception to limitation on financial institution portfolio.

Sec. 144. Insurance benefits.

Sec. 145. Maximum loan limits.

Sec. 146. Insurance premiums.

Sec. 147. Technical corrections.

Sec. 148. Revision of underwriting criteria.

Sec. 149. Prohibition against kickbacks and unearned fees.

Sec. 150. Leasehold requirements.

TITLE II—Mortgage foreclosure protections for servicemembers

Sec. 201. Temporary increase in maximum loan guaranty amount for certain housing loans guaranteed by the Secretary of Veterans Affairs.

Sec. 202. Counseling on mortgage foreclosures for members of the Armed Forces returning from service abroad.

Sec. 203. Enhancement of protections for servicemembers relating to mortgages and mortgage foreclosures.

TITLE III—Emergency assistance for the redevelopment of abandoned and foreclosed homes

Sec. 301. Emergency assistance for the redevelopment of abandoned and foreclosed homes.

Sec. 302. Nationwide distribution of resources.

Sec. 303. Limitation on use of funds with respect to eminent domain.

Sec. 304. Limitation on distribution of funds.

Sec. 305. Counseling intermediaries.

TITLE IV—Housing counseling resources

Sec. 401. Housing counseling resources.

Sec. 402. Credit counseling.

TITLE V—Mortgage Disclosure Improvement Act

Sec. 501. Short title.

Sec. 502. Enhanced mortgage loan disclosures.

Sec. 503. Community Development Investment Authority for depository institutions.

Sec. 504. Federal Home loan bank refinancing authority for certain residential mortgage loans.

TITLE VI—Tax-related provisions

Sec. 601. Election for 4-year carryback of certain net operating losses and temporary suspension of 90 percent AMT limit.

Sec. 602. Modifications on use of qualified mortgage bonds; temporary increased volume cap for certain housing bonds.

Sec. 603. Credit for certain home purchases.

Sec. 604. Additional standard deduction for real property taxes for nonitemizers.

Sec. 605. Election to accelerate AMT and R and D credits in lieu of bonus depreciation.

Sec. 606. Use of amended income tax returns to take into account receipt of certain hurricane-related casualty loss grants by disallowing previously taken casualty loss deductions.

Sec. 607. Waiver of deadline on construction of GO Zone property eligible for bonus depreciation.

Sec. 608. Temporary tax relief for Kiowa County, Kansas and surrounding area.

TITLE VII—Emergency designation

Sec. 701. Emergency designation.

TITLE VIII—REIT investment diversification and empowerment

Sec. 801. Short title; amendment of 1986 Code.

Subtitle A—Taxable REIT subsidiaries

Sec. 811. Conforming taxable REIT subsidiary asset test.

Subtitle B—Dealer sales

Sec. 821. Holding period under safe harbor.

Sec. 822. Determining value of sales under safe harbor.

Subtitle C—Health care REITs

Sec. 831. Conformity for health care facilities.

Subtitle D—Effective dates and sunset

Sec. 841. Effective dates and sunset.

TITLE IX—VETERANS HOUSING MATTERS

Sec. 901. Home improvements and structural alterations for totally disabled members of the Armed Forces before discharge or release from the Armed Forces.

Sec. 902. Eligibility for specially adapted housing benefits and assistance for members of the Armed Forces with service-connected disabilities and individuals residing outside the United States.

Sec. 903. Specially adapted housing assistance for individuals with severe burn injuries.

Sec. 904. Extension of assistance for individuals residing temporarily in housing owned by a family member.

Sec. 905. Increase in specially adapted housing benefits for disabled veterans.

Sec. 906. Report on specially adapted housing for disabled individuals.

Sec. 907. Report on specially adapted housing assistance for individuals who reside in housing owned by a family member on permanent basis.

Sec. 908. Definition of annual income for purposes of section 8 and other public housing programs.

Sec. 909. Payment of transportation of baggage and household effects for members of the Armed Forces who relocate due to foreclosure of leased housing.

TITLE X—Clean energy tax stimulus

Sec. 1001. Short title; etc.

Subtitle A—Extension of clean energy production incentives

Sec. 1011. Extension and modification of renewable energy production tax credit.

Sec. 1012. Extension and modification of solar energy and fuel cell investment tax credit.

Sec. 1013. Extension and modification of residential energy efficient property credit.

Sec. 1014. Extension and modification of credit for clean renewable energy bonds.

Sec. 1015. Extension of special rule to implement FERC restructuring policy.

Subtitle B—Extension of incentives to improve energy efficiency

Sec. 1021. Extension and modification of credit for energy efficiency improvements to existing homes.

Sec. 1022. Extension and modification of tax credit for energy efficient new homes.

Sec. 1023. Extension and modification of energy efficient commercial buildings deduction.

Sec. 1024. Modification and extension of energy efficient appliance credit for appliances produced after 2007.

TITLE XI—Sense of the Senate

Sec. 1101. Sense of the Senate.

I

FHA Modernization Act of 2008

101.

Short title

This title may be cited as the FHA Modernization Act of 2008.

A

Building American Homeownership

111.

Short title

This subtitle may be cited as the Building American Homeownership Act of 2008.

112.

Maximum principal loan obligation

(a)

In general

Paragraph (2) of section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended—

(1)

by amending subparagraphs (A) and (B) to read as follows:

(A)

not to exceed the lesser of—

(i)

in the case of a 1-family residence, 110 percent of the median 1-family house price in the area, as determined by the Secretary; and in the case of a 2-, 3-, or 4-family residence, the percentage of such median price that bears the same ratio to such median price as the dollar amount limitation in effect for 2007 under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-family residence, respectively, bears to the dollar amount limitation in effect for 2007 under such section for a 1-family residence; or

(ii)

132 percent of the dollar amount limitation in effect for 2007 under such section 305(a)(2) for a residence of the applicable size (without regard to any authority to increase such limitations with respect to properties located in Alaska, Guam, Hawaii, or the Virgin Islands), except that each such maximum dollar amount shall be adjusted effective January 1 of each year beginning with 2009, by adding to or subtracting from each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase or decrease, during the most recently completed 12-month or 4-quarter period ending before the time of determining such annual adjustment, in an housing price index developed or selected by the Secretary for purposes of adjustments under this clause;

except that the dollar amount limitation in effect under this subparagraph for any size residence for any area may not be less than the greater of: (I) the dollar amount limitation in effect under this section for the area on October 21, 1998; or (II) 65 percent of the dollar amount limitation in effect for 2007 under such section 305(a)(2) for a residence of the applicable size, as such limitation is adjusted by any subsequent percentage adjustments determined under clause (ii) of this subparagraph; and
(B)

not to exceed 100 percent of the appraised value of the property.

; and

(2)

in the matter following subparagraph (B), by striking the second sentence (relating to a definition of average closing cost) and all that follows through section 3103A(d) of title 38, United States Code..

(b)

Effective date

The amendments made by subsection (a) shall take effect upon the expiration of the date described in section 202(a) of the Economic Stimulus Act of 2008 (Public Law 110–185).

113.

Cash investment requirement and prohibition of seller-funded downpayment assistance

Paragraph 9 of section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(9)) is amended to read as follows:

(9)

Cash Investment requirement

(A)

In general

A mortgage insured under this section shall be executed by a mortgagor who shall have paid, in cash, on account of the property an amount equal to not less than 3.5 percent of the appraised value of the property or such larger amount as the Secretary may determine.

(B)

Family members

For purposes of this paragraph, the Secretary shall consider as cash or its equivalent any amounts borrowed from a family member (as such term is defined in section 201), subject only to the requirements that, in any case in which the repayment of such borrowed amounts is secured by a lien against the property, that—

(i)

such lien shall be subordinate to the mortgage; and

(ii)

the sum of the principal obligation of the mortgage and the obligation secured by such lien may not exceed 100 percent of the appraised value of the property.

(C)

Prohibited sources

In no case shall the funds required by subparagraph (A) consist, in whole or in part, of funds provided by any of the following parties before, during, or after closing of the property sale:

(i)

The seller or any other person or entity that financially benefits from the transaction.

(ii)

Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i).

.

114.

Mortgage insurance premiums

Section 203(c)(2) of the National Housing Act (12 U.S.C. 1709(c)(2)) is amended—

(1)

in the matter preceding subparagraph (A), by striking or of the General Insurance Fund and all that follows through section 234(c),,; and

(2)

in subparagraph (A)—

(A)

by striking 2.25 percent and inserting 3 percent; and

(B)

by striking 2.0 percent and inserting 2.75 percent.

115.

Rehabilitation loans

Subsection (k) of section 203 of the National Housing Act (12 U.S.C. 1709(k)) is amended—

(1)

in paragraph (1), by striking on and all that follows through 1978; and

(2)

in paragraph (5)—

(A)

by striking General Insurance Fund the first place it appears and inserting Mutual Mortgage Insurance Fund; and

(B)

in the second sentence, by striking the comma and all that follows through General Insurance Fund.

116.

Discretionary action

The National Housing Act is amended—

(1)

in subsection (e) of section 202 (12 U.S.C. 1708(e))—

(A)

in paragraph (3)(B), by striking section 202(e) of the National Housing Act and inserting this subsection; and

(B)

by redesignating such subsection as subsection (f);

(2)

by striking paragraph (4) of section 203(s) (12 U.S.C. 1709(s)(4)) and inserting the following new paragraph:

(4)

the Secretary of Agriculture;

; and

(3)

by transferring subsection (s) of section 203 (as amended by paragraph (2) of this section) to section 202, inserting such subsection after subsection (d) of section 202, and redesignating such subsection as subsection (e).

117.

Insurance of condominiums

(a)

In general

Section 234 of the National Housing Act (12 U.S.C. 1715y) is amended—

(1)

in subsection (c), in the first sentence—

(A)

by striking and before (2); and

(B)

by inserting before the period at the end the following: , and (3) the project has a blanket mortgage insured by the Secretary under subsection (d); and

(2)

in subsection (g), by striking , except that and all that follows and inserting a period.

(b)

Definition of Mortgage

Section 201(a) of the National Housing Act (12 U.S.C. 1707(a)) is amended—

(1)

before a first mortgage insert (A);

(2)

by striking or on a leasehold (1) and inserting (B) a first mortgage on a leasehold on real estate (i);

(3)

by striking or (2) and inserting , or (ii); and

(4)

by inserting before the semicolon the following: , or (C) a first mortgage given to secure the unpaid purchase price of a fee interest in, or long-term leasehold interest in, real estate consisting of a one-family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities which serve the project.

(c)

Definition of real estate

Section 201 of the National Housing Act (12 U.S.C. 1707) is amended by adding at the end the following new subsection:

(g)

The term real estate means land and all natural resources and structures permanently affixed to the land, including residential buildings and stationary manufactured housing. The Secretary may not require, for treatment of any land or other property as real estate for purposes of this title, that such land or property be treated as real estate for purposes of State taxation.

.

118.

Mutual Mortgage Insurance Fund

(a)

In general

Subsection (a) of section 202 of the National Housing Act (12 U.S.C. 1708(a)) is amended to read as follows:

(a)

Mutual Mortgage Insurance Fund

(1)

Establishment

Subject to the provisions of the Federal Credit Reform Act of 1990, there is hereby created a Mutual Mortgage Insurance Fund (in this title referred to as the Fund), which shall be used by the Secretary to carry out the provisions of this title with respect to mortgages insured under section 203. The Secretary may enter into commitments to guarantee, and may guarantee, such insured mortgages.

(2)

Limit on loan guarantees

The authority of the Secretary to enter into commitments to guarantee such insured mortgages shall be effective for any fiscal year only to the extent that the aggregate original principal loan amount under such mortgages, any part of which is guaranteed, does not exceed the amount specified in appropriations Acts for such fiscal year.

(3)

Fiduciary responsibility

The Secretary has a responsibility to ensure that the Mutual Mortgage Insurance Fund remains financially sound.

(4)

Annual independent actuarial study

The Secretary shall provide for an independent actuarial study of the Fund to be conducted annually, which shall analyze the financial position of the Fund. The Secretary shall submit a report annually to the Congress describing the results of such study and assessing the financial status of the Fund. The report shall recommend adjustments to underwriting standards, program participation, or premiums, if necessary, to ensure that the Fund remains financially sound. The report shall also include an evaluation of the quality control procedures and accuracy of information utilized in the process of underwriting loans guaranteed by the Fund. Such evaluation shall include a review of the risk characteristics of loans based not only on borrower information and performance, but on risks associated with loans originated or funded by various entities or financial institutions.

(5)

Quarterly reports

During each fiscal year, the Secretary shall submit a report to the Congress for each calendar quarter, which shall specify for mortgages that are obligations of the Fund—

(A)

the cumulative volume of loan guarantee commitments that have been made during such fiscal year through the end of the quarter for which the report is submitted;

(B)

the types of loans insured, categorized by risk;

(C)

any significant changes between actual and projected claim and prepayment activity;

(D)

projected versus actual loss rates; and

(E)

updated projections of the annual subsidy rates to ensure that increases in risk to the Fund are identified and mitigated by adjustments to underwriting standards, program participation, or premiums, and the financial soundness of the Fund is maintained.

The first quarterly report under this paragraph shall be submitted on the last day of the first quarter of fiscal year 2008, or on the last day of the first full calendar quarter following the enactment of the Building American Homeownership Act of 2008, whichever is later.
(6)

Adjustment of premiums

If, pursuant to the independent actuarial study of the Fund required under paragraph (4), the Secretary determines that the Fund is not meeting the operational goals established under paragraph (7) or there is a substantial probability that the Fund will not maintain its established target subsidy rate, the Secretary may either make programmatic adjustments under this title as necessary to reduce the risk to the Fund, or make appropriate premium adjustments.

(7)

Operational goals

The operational goals for the Fund are—

(A)

to minimize the default risk to the Fund and to homeowners by among other actions instituting fraud prevention quality control screening not later than 18 months after the date of enactment of the Building American Homeownership Act of 2008; and

(B)

to meet the housing needs of the borrowers that the single family mortgage insurance program under this title is designed to serve.

.

(b)

Obligations of Fund

The National Housing Act is amended as follows:

(1)

Homeownership voucher program mortgages

In section 203(v) (12 U.S.C. 1709(v))—

(A)

by striking Notwithstanding section 202 of this title, the and inserting The; and

(B)

by striking General Insurance Fund the first place such term appears and all that follows through the end of the subsection and inserting Mutual Mortgage Insurance Fund..

(2)

Home equity conversion mortgages

Section 255(i)(2)(A) of the National Housing Act (12 U.S.C. 1715z–20(i)(2)(A)) is amended by striking General Insurance Fund and inserting Mutual Mortgage Insurance Fund.

(c)

Conforming amendments

The National Housing Act is amended—

(1)

in section 205 (12 U.S.C. 1711), by striking subsections (g) and (h); and

(2)

in section 519(e) (12 U.S.C. 1735c(e)), by striking 203(b) and all that follows through 203(i) and inserting 203, except as determined by the Secretary.

119.

Hawaiian home lands and Indian reservations

(a)

Hawaiian home lands

Section 247(c) of the National Housing Act (12 U.S.C. 1715z–12(c)) is amended—

(1)

by striking General Insurance Fund established in section 519 and inserting Mutual Mortgage Insurance Fund; and

(2)

in the second sentence, by striking (1) all references and all that follows through and (2).

(b)

Indian reservations

Section 248(f) of the National Housing Act (12 U.S.C. 1715z–13(f)) is amended—

(1)

by striking General Insurance Fund the first place it appears through 519 and inserting Mutual Mortgage Insurance Fund; and

(2)

in the second sentence, by striking (1) all references and all that follows through and (2).

120.

Conforming and technical amendments

(a)

Repeals

The following provisions of the National Housing Act are repealed:

(1)

Subsection (i) of section 203 (12 U.S.C. 1709(i)).

(2)

Subsection (o) of section 203 (12 U.S.C. 1709(o)).

(3)

Subsection (p) of section 203 (12 U.S.C. 1709(p)).

(4)

Subsection (q) of section 203 (12 U.S.C. 1709(q)).

(5)

Section 222 (12 U.S.C. 1715m).

(6)

Section 237 (12 U.S.C. 1715z–2).

(7)

Section 245 (12 U.S.C. 1715z–10).

(b)

Definition of area

Section 203(u)(2)(A) of the National Housing Act (12 U.S.C. 1709(u)(2)(A)) is amended by striking shall and all that follows and inserting means a metropolitan statistical area as established by the Office of Management and Budget;.

(c)

Definition of State

Section 201(d) of the National Housing Act (12 U.S.C. 1707(d)) is amended by striking the Trust Territory of the Pacific Islands and inserting the Commonwealth of the Northern Mariana Islands.

121.

Insurance of mortgages

Subsection (n)(2) of section 203 of the National Housing Act (12 U.S.C. 1709(n)(2)) is amended—

(1)

in subparagraph (A), by inserting or subordinate mortgage or before lien given; and

(2)

in subparagraph (C), by inserting or subordinate mortgage or before lien.

122.

Home equity conversion mortgages

(a)

In general

Section 255 of the National Housing Act (12 U.S.C. 1715z–20) is amended—

(1)

in subsection (b)(2), insert real estate, after mortgagor,;

(2)

by amending subsection (d)(1) to read as follows:

(1)

have been originated by a mortgagee approved by the Secretary;

;

(3)

by amending subsection (d)(2)(B) to read as follows:

(B)

has received adequate counseling, as provided in subsection (f), by an independent third party that is not, either directly or indirectly, associated with or compensated by a party involved in—

(i)

originating or servicing the mortgage;

(ii)

funding the loan underlying the mortgage; or

(iii)

the sale of annuities, investments, long-term care insurance, or any other type of financial or insurance product;

;

(4)

in subsection (f)—

(A)

by striking (f) Information services for mortgagors.— and inserting (f) Counseling services and information for mortgagors.—; and

(B)

by amending the matter preceding paragraph (1) to read as follows: The Secretary shall provide or cause to be provided adequate counseling for the mortgagor, as described in subsection (d)(2)(B). Such counseling shall be provided by counselors that meet qualification standards and follow uniform counseling protocols. The qualification standards and counseling protocols shall be established by the Secretary within 12 months of the date of enactment of the Reverse Mortgage Proceeds Protection Act. The protocols shall require a qualified counselor to discuss with each mortgagor information which shall include—

(5)

in subsection (g), by striking established under section 203(b)(2) and all that follows through located and inserting limitation established under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a 1-family residence;

(6)

in subsection (i)(1)(C), by striking limitations and inserting limitation;

(7)

by striking subsection (l);

(8)

by redesignating subsection (m) as subsection (l);

(9)

by amending subsection (l), as so redesignated, to read as follows:

(l)

Funding for counseling

The Secretary may use a portion of the mortgage insurance premiums collected under the program under this section to adequately fund the counseling and disclosure activities required under subsection (f), including counseling for those homeowners who elect not to take out a home equity conversion mortgage, provided that the use of such funds is based upon accepted actuarial principles.

; and

(10)

by adding at the end the following new subsection:

(m)

Authority To Insure Home Purchase Mortgage

(1)

In general

Notwithstanding any other provision of this section, the Secretary may insure, upon application by a mortgagee, a home equity conversion mortgage upon such terms and conditions as the Secretary may prescribe, when the home equity conversion mortgage will be used to purchase a 1- to 4-family dwelling unit, one unit of which the mortgagor will occupy as a primary residence, and to provide for any future payments to the mortgagor, based on available equity, as authorized under subsection (d)(9).

(2)

Limitation on principal obligation

A home equity conversion mortgage insured pursuant to paragraph (1) shall involve a principal obligation that does not exceed the dollar amount limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act for a 1-family residence.

(n)

Requirements on mortgage originators

(1)

In general

The mortgagee and any other party that participates in the origination of a mortgage to be insured under this section shall—

(A)

not participate in, be associated with, or employ any party that participates in or is associated with any other financial or insurance activity; or

(B)

demonstrate to the Secretary that the mortgagee or other party maintains, or will maintain, firewalls and other safeguards designed to ensure that—

(i)

individuals participating in the origination of the mortgage shall have no involvement with, or incentive to provide the mortgagor with, any other financial or insurance product; and

(ii)

the mortgagor shall not be required, directly or indirectly, as a condition of obtaining a mortgage under this section, to purchase any other financial or insurance product.

(2)

Approval of other parties

All parties that participate in the origination of a mortgage to be insured under this section shall be approved by the Secretary.

(o)

Prohibition against requirements To purchase additional products

The mortgagee or any other party shall not be required by the mortgagor or any other party to purchase an insurance, annuity, or other additional product as a requirement or condition of eligibility for a mortgage authorized under subsection (c).

(p)

Study To determine consumer protections and underwriting standards

The Secretary shall conduct a study to examine and determine appropriate consumer protections and underwriting standards to ensure that the purchase of products referred to in subsection (o) is appropriate for the consumer. In conducting such study, the Secretary shall consult with consumer advocates (including recognized experts in consumer protection), industry representatives, representatives of counseling organizations, and other interested parties.

.

(b)

Mortgages for Cooperatives

Subsection (b) of section 255 of the National Housing Act (12 U.S.C. 1715z–20(b)) is amended—

(1)

in paragraph (4)—

(A)

by inserting a first or subordinate mortgage or lien before on all stock;

(B)

by inserting unit after dwelling; and

(C)

by inserting a first mortgage or first lien before on a leasehold; and

(2)

in paragraph (5), by inserting a first or subordinate lien on before all stock.

(c)

Limitation on origination fees

Section 255 of the National Housing Act (12 U.S.C. 1715z–20), as amended by the preceding provisions of this section, is further amended by adding at the end the following new subsection:

(r)

Limitation on origination fees

The Secretary shall establish limits on the origination fee that may be charged to a mortgagor under a mortgage insured under this section, which limitations shall—

(1)

equal 1.5 percent of the maximum claim amount of the mortgage unless adjusted thereafter on the basis of—

(A)

the costs to the mortgagor; and

(B)

the impact of such fees on the reverse mortgage market;

(2)

be subject to a minimum allowable amount;

(3)

provide that the origination fee may be fully financed with the mortgage;

(4)

include any fees paid to correspondent mortgagees approved by the Secretary; and

(5)

have the same effective date as subsection (m)(2) regarding the limitation on principal obligation.

.

(d)

Study regarding program costs and credit availability

(1)

In general

The Comptroller General of the United States shall conduct a study regarding the costs and availability of credit under the home equity conversion mortgages for elderly homeowners program under section 255 of the National Housing Act (12 U.S.C. 1715z–20) (in this subsection referred to as the program).

(2)

Purpose

The purpose of the study required under paragraph (1) is to help Congress analyze and determine the effects of limiting the amounts of the costs or fees under the program from the amounts charged under the program as of the date of the enactment of this title.

(3)

Content of report

The study required under paragraph (1) should focus on—

(A)

the cost to mortgagors of participating in the program;

(B)

the financial soundness of the program;

(C)

the availability of credit under the program; and

(D)

the costs to elderly homeowners participating in the program, including—

(i)

mortgage insurance premiums charged under the program;

(ii)

up-front fees charged under the program; and

(iii)

margin rates charged under the program.

(4)

Timing of report

Not later than 12 months after the date of the enactment of this title, the Comptroller General shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives setting forth the results and conclusions of the study required under paragraph (1).

123.

Energy efficient mortgages program

Section 106(a)(2) of the Energy Policy Act of 1992 (42 U.S.C. 12712 note) is amended—

(1)

by amending subparagraph (C) to read as follows:

(C)

Costs of improvements

The cost of cost-effective energy efficiency improvements shall not exceed the greater of—

(i)

5 percent of the property value (not to exceed 5 percent of the limit established under section 203(b)(2)(A)) of the National Housing Act (12 U.S.C. 1709(b)(2)(A); or

(ii)

2 percent of the limit established under section 203(b)(2)(B) of such Act.

; and

(2)

by adding at the end the following:

(D)

Limitation

In any fiscal year, the aggregate number of mortgages insured pursuant to this section may not exceed 5 percent of the aggregate number of mortgages for 1- to 4-family residences insured by the Secretary of Housing and Urban Development under title II of the National Housing Act (12 U.S.C. 1707 et seq.) during the preceding fiscal year.

.

124.

Pilot program for automated process for borrowers without sufficient credit history

(a)

Establishment

Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the following new section:

257.

Pilot program for automated process for borrowers without sufficient credit history

(a)

Establishment

The Secretary shall carry out a pilot program to establish, and make available to mortgagees, an automated process for providing alternative credit rating information for mortgagors and prospective mortgagors under mortgages on 1- to 4-family residences to be insured under this title who have insufficient credit histories for determining their creditworthiness. Such alternative credit rating information may include rent, utilities, and insurance payment histories, and such other information as the Secretary considers appropriate.

(b)

Scope

The Secretary may carry out the pilot program under this section on a limited basis or scope, and may consider limiting the program to first-time homebuyers.

(c)

Limitation

In any fiscal year, the aggregate number of mortgages insured pursuant to the automated process established under this section may not exceed 5 percent of the aggregate number of mortgages for 1- to 4-family residences insured by the Secretary under this title during the preceding fiscal year.

(d)

Sunset

After the expiration of the 5-year period beginning on the date of the enactment of the Building American Homeownership Act of 2008, the Secretary may not enter into any new commitment to insure any mortgage, or newly insure any mortgage, pursuant to the automated process established under this section.

.

(b)

GAO report

Not later than the expiration of the two-year period beginning on the date of the enactment of this subtitle, the Comptroller General of the United States shall submit to the Congress a report identifying the number of additional mortgagors served using the automated process established pursuant to section 257 of the National Housing Act (as added by the amendment made by subsection (a) of this section) and the impact of such process and the insurance of mortgages pursuant to such process on the safety and soundness of the insurance funds under the National Housing Act of which such mortgages are obligations.

125.

Homeownership preservation

The Secretary of Housing and Urban Development and the Commissioner of the Federal Housing Administration, in consultation with industry, the Neighborhood Reinvestment Corporation, and other entities involved in foreclosure prevention activities, shall—

(1)

develop and implement a plan to improve the Federal Housing Administration's loss mitigation process; and

(2)

report such plan to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives.

126.

Use of FHA savings for improvements in FHA technologies, procedures, processes, program performance, staffing, and salaries

(a)

Authorization of appropriations

There is authorized to be appropriated for each of fiscal years 2009 through 2013, $25,000,000, from negative credit subsidy for the mortgage insurance programs under title II of the National Housing Act, to the Secretary of Housing and Urban Development for increasing funding for the purpose of improving technology, processes, program performance, eliminating fraud, and for providing appropriate staffing in connection with the mortgage insurance programs under title II of the National Housing Act.

(b)

Certification

The authorization under subsection (a) shall not be effective for a fiscal year unless the Secretary of Housing and Urban Development has, by rulemaking in accordance with section 553 of title 5, United States Code (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section), made a determination that—

(1)

premiums being, or to be, charged during such fiscal year for mortgage insurance under title II of the National Housing Act are established at the minimum amount sufficient to—

(A)

comply with the requirements of section 205(f) of such Act (relating to required capital ratio for the Mutual Mortgage Insurance Fund); and

(B)

ensure the safety and soundness of the other mortgage insurance funds under such Act; and

(2)

any negative credit subsidy for such fiscal year resulting from such mortgage insurance programs adequately ensures the efficient delivery and availability of such programs.

(c)

Study and report

The Secretary of Housing and Urban Development shall conduct a study to obtain recommendations from participants in the private residential (both single family and multifamily) mortgage lending business and the secondary market for such mortgages on how best to update and upgrade processes and technologies for the mortgage insurance programs under title II of the National Housing Act so that the procedures for originating, insuring, and servicing of such mortgages conform with those customarily used by secondary market purchasers of residential mortgage loans. Not later than the expiration of the 12-month period beginning on the date of the enactment of this title, the Secretary shall submit a report to the Congress describing the progress made and to be made toward updating and upgrading such processes and technology, and providing appropriate staffing for such mortgage insurance programs.

127.

Post-purchase housing counseling eligibility improvements

Section 106(c)(4) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(c)(4)) is amended:

(1)

in subparagraph (C)—

(A)

in clause (i), by striking ; or and inserting a semicolon;

(B)

in clause (ii), by striking the period at the end and inserting a semicolon; and

(C)

by adding at the end the following:

(iii)

a significant reduction in the income of the household due to divorce or death; or

(iv)

a significant increase in basic expenses of the homeowner or an immediate family member of the homeowner (including the spouse, child, or parent for whom the homeowner provides substantial care or financial assistance) due to—

(I)

an unexpected or significant increase in medical expenses;

(II)

a divorce;

(III)

unexpected and significant damage to the property, the repair of which will not be covered by private or public insurance; or

(IV)

a large property-tax increase; or

;

(2)

by striking the matter that follows subparagraph (C); and

(3)

by adding at the end the following:

(D)

the Secretary of Housing and Urban Development determines that the annual income of the homeowner is no greater than the annual income established by the Secretary as being of low- or moderate-income.

.

128.

Pre-purchase homeownership counseling demonstration

(a)

Establishment of program

For the period beginning on the date of enactment of this title and ending on the date that is 3 years after such date of enactment, the Secretary of Housing and Urban Development shall establish and conduct a demonstration program to test the effectiveness of alternative forms of pre-purchase homeownership counseling for eligible homebuyers.

(b)

Forms of counseling

The Secretary of Housing and Urban Development shall provide to eligible homebuyers pre-purchase homeownership counseling under this section in the form of—

(1)

telephone counseling;

(2)

individualized in-person counseling;

(3)

web-based counseling;

(4)

counseling classes; or

(5)

any other form or type of counseling that the Secretary may, in his discretion, determine appropriate.

(c)

Size of program

The Secretary shall make available the pre-purchase homeownership counseling described in subsection (b) to not more than 3,000 eligible homebuyers in any given year.

(d)

Incentive to participate

The Secretary of Housing and Urban Development may provide incentives to eligible homebuyers to participate in the demonstration program established under subsection (a). Such incentives may include the reduction of any insurance premium charges owed by the eligible homebuyer to the Secretary.

(e)

Eligible homebuyer defined

For purposes of this section an eligible homebuyer means a first-time homebuyer who has been approved for a home loan with a loan-to-value ratio between 97 percent and 98.5 percent.

(f)

Report to Congress

The Secretary of Housing and Urban Development shall report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representative—

(1)

on an annual basis, on the progress and results of the demonstration program established under subsection (a); and

(2)

for the period beginning on the date of enactment of this title and ending on the date that is 5 years after such date of enactment, on the payment history and delinquency rates of eligible homebuyers who participated in the demonstration program.

129.

Fraud prevention

Section 1014 of title 18, United States Code, is amended in the first sentence—

(1)

by inserting the Federal Housing Administration before the Farm Credit Administration; and

(2)

by striking commitment, or loan and inserting commitment, loan, or insurance agreement or application for insurance or a guarantee.

130.

Limitation on mortgage insurance premium increases

(a)

In general

Notwithstanding any other provision of law, including any provision of this title and any amendment made by this title—

(1)

for the period beginning on the date of the enactment of this title and ending on October 1, 2009, the premiums charged for mortgage insurance under multifamily housing programs under the National Housing Act may not be increased above the premium amounts in effect under such program on October 1, 2006, unless the Secretary of Housing and Urban Development determines that, absent such increase, insurance of additional mortgages under such program would, under the Federal Credit Reform Act of 1990, require the appropriation of new budget authority to cover the costs (as such term is defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a) of such insurance; and

(2)

a premium increase pursuant to paragraph (1) may be made only if not less than 30 days prior to such increase taking effect, the Secretary of Housing and Urban Development—

(A)

notifies the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of such increase; and

(B)

publishes notice of such increase in the Federal Register.

(b)

Waiver

The Secretary of Housing and Urban Development may waive the 30-day notice requirement under subsection (a)(2), if the Secretary determines that waiting 30-days before increasing premiums would cause substantial damage to the solvency of multifamily housing programs under the National Housing Act.

131.

Savings provision

Any mortgage insured under title II of the National Housing Act before the date of enactment of this subtitle shall continue to be governed by the laws, regulations, orders, and terms and conditions to which it was subject on the day before the date of the enactment of this subtitle.

132.

Implementation

The Secretary of Housing and Urban Development shall by notice establish any additional requirements that may be necessary to immediately carry out the provisions of this subtitle. The notice shall take effect upon issuance.

133.

Moratorium on implementation of risk-based premiums

For the 12-month period beginning on the date of enactment of this title, the Secretary of Housing and Urban Development shall not enact, execute, or take any action to make effective the planned implementation of risk-based premiums, which are designed for mortgage lenders to offer borrowers an FHA-insured product that provides a range of mortgage insurance premium pricing, based on the risk the insurance contract represents, as such planned implementation was set forth in the Notice published in the Federal Register on September 20, 2007 (Vol. 72, No. 182, Page 53872).

B

Manufactured Housing Loan Modernization

141.

Short title

This subtitle may be cited as the FHA Manufactured Housing Loan Modernization Act of 2008.

142.

Purposes

The purposes of this subtitle are—

(1)

to provide adequate funding for FHA-insured manufactured housing loans for low- and moderate-income homebuyers during all economic cycles in the manufactured housing industry;

(2)

to modernize the FHA title I insurance program for manufactured housing loans to enhance participation by Ginnie Mae and the private lending markets; and

(3)

to adjust the low loan limits for title I manufactured home loan insurance to reflect the increase in costs since such limits were last increased in 1992 and to index the limits to inflation.

143.

Exception to limitation on financial institution portfolio

The second sentence of section 2(a) of the National Housing Act (12 U.S.C. 1703(a)) is amended—

(1)

by striking In no case and inserting Other than in connection with a manufactured home or a lot on which to place such a home (or both), in no case; and

(2)

by striking : Provided, That with and inserting . With.

144.

Insurance benefits

(a)

In General

Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)), is amended by adding at the end the following new paragraph:

(8)

Insurance benefits for manufactured housing loans

Any contract of insurance with respect to loans, advances of credit, or purchases in connection with a manufactured home or a lot on which to place a manufactured home (or both) for a financial institution that is executed under this title after the date of the enactment of the FHA Manufactured Housing Loan Modernization Act of 2008 by the Secretary shall be conclusive evidence of the eligibility of such financial institution for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of the bearer from the date of the execution of such contract, except for fraud or misrepresentation on the part of such institution.

.

(b)

Applicability

The amendment made by subsection (a) shall only apply to loans that are registered or endorsed for insurance after the date of the enactment of this title.

145.

Maximum loan limits

(a)

Dollar Amounts

Paragraph (1) of section 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) is amended—

(1)

in clause (ii) of subparagraph (A), by striking $17,500 and inserting $25,090;

(2)

in subparagraph (C) by striking $48,600 and inserting $69,678;

(3)

in subparagraph (D) by striking $64,800 and inserting $92,904;

(4)

in subparagraph (E) by striking $16,200 and inserting $23,226; and

(5)

by realigning subparagraphs (C), (D), and (E) 2 ems to the left so that the left margins of such subparagraphs are aligned with the margins of subparagraphs (A) and (B).

(b)

Annual Indexing

Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions of this title, is further amended by adding at the end the following new paragraph:

(9)

Annual indexing of manufactured housing loans

The Secretary shall develop a method of indexing in order to annually adjust the loan limits established in subparagraphs (A)(ii), (C), (D), and (E) of this subsection. Such index shall be based on the manufactured housing price data collected by the United States Census Bureau. The Secretary shall establish such index no later than 1 year after the date of the enactment of the FHA Manufactured Housing Loan Modernization Act of 2008.

(c)

Technical and Conforming Changes

Paragraph (1) of section 2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) is amended—

(1)

by striking No and inserting Except as provided in the last sentence of this paragraph, no; and

(2)

by adding after and below subparagraph (G) the following:

The Secretary shall, by regulation, annually increase the dollar amount limitations in subparagraphs (A)(ii), (C), (D), and (E) (as such limitations may have been previously adjusted under this sentence) in accordance with the index established pursuant to paragraph (9).

.

146.

Insurance premiums

Subsection (f) of section 2 of the National Housing Act (12 U.S.C. 1703(f)) is amended—

(1)

by inserting (1) Premium Charges.— after (f); and

(2)

by adding at the end the following new paragraph:

(2)

Manufactured Home Loans

Notwithstanding paragraph (1), in the case of a loan, advance of credit, or purchase in connection with a manufactured home or a lot on which to place such a home (or both), the premium charge for the insurance granted under this section shall be paid by the borrower under the loan or advance of credit, as follows:

(A)

At the time of the making of the loan, advance of credit, or purchase, a single premium payment in an amount not to exceed 2.25 percent of the amount of the original insured principal obligation.

(B)

In addition to the premium under subparagraph (A), annual premium payments during the term of the loan, advance, or obligation purchased in an amount not exceeding 1.0 percent of the remaining insured principal balance (excluding the portion of the remaining balance attributable to the premium collected under subparagraph (A) and without taking into account delinquent payments or prepayments).

(C)

Premium charges under this paragraph shall be established in amounts that are sufficient, but do not exceed the minimum amounts necessary, to maintain a negative credit subsidy for the program under this section for insurance of loans, advances of credit, or purchases in connection with a manufactured home or a lot on which to place such a home (or both), as determined based upon risk to the Federal Government under existing underwriting requirements.

(D)

The Secretary may increase the limitations on premium payments to percentages above those set forth in subparagraphs (A) and (B), but only if necessary, and not in excess of the minimum increase necessary, to maintain a negative credit subsidy as described in subparagraph (C).

.

147.

Technical corrections

(a)

Dates

Subsection (a) of section 2 of the National Housing Act (12 U.S.C. 1703(a)) is amended—

(1)

by striking on and after July 1, 1939, each place such term appears; and

(2)

by striking made after the effective date of the Housing Act of 1954.

(b)

Authority of Secretary

Subsection (c) of section 2 of the National Housing Act (12 U.S.C. 1703(c)) is amended to read as follows:

(c)

Handling and Disposal of Property

(1)

Authority of secretary

Notwithstanding any other provision of law, the Secretary may—

(A)

deal with, complete, rent, renovate, modernize, insure, or assign or sell at public or private sale, or otherwise dispose of, for cash or credit in the Secretary’s discretion, and upon such terms and conditions and for such consideration as the Secretary shall determine to be reasonable, any real or personal property conveyed to or otherwise acquired by the Secretary, in connection with the payment of insurance heretofore or hereafter granted under this title, including any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of insurance heretofore or hereafter granted under this section; and

(B)

pursue to final collection, by way of compromise or otherwise, all claims assigned to or held by the Secretary and all legal or equitable rights accruing to the Secretary in connection with the payment of such insurance, including unpaid insurance premiums owed in connection with insurance made available by this title.

(2)

Advertisements for proposals

Section 3709 of the Revised Statutes shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $25,000.

(3)

Delegation of authority

The power to convey and to execute in the name of the Secretary, deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real or personal property or any interest therein heretofore or hereafter acquired by the Secretary pursuant to the provisions of this title may be exercised by an officer appointed by the Secretary without the execution of any express delegation of power or power of attorney. Nothing in this subsection shall be construed to prevent the Secretary from delegating such power by order or by power of attorney, in the Secretary’s discretion, to any officer or agent the Secretary may appoint.

.

148.

Revision of underwriting criteria

(a)

In General

Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions of this title, is further amended by adding at the end the following new paragraph:

(10)

Financial soundness of manufactured housing program

The Secretary shall establish such underwriting criteria for loans and advances of credit in connection with a manufactured home or a lot on which to place a manufactured home (or both), including such loans and advances represented by obligations purchased by financial institutions, as may be necessary to ensure that the program under this title for insurance for financial institutions against losses from such loans, advances of credit, and purchases is financially sound.

.

(b)

Timing

Not later than the expiration of the 6-month period beginning on the date of the enactment of this title, the Secretary of Housing and Urban Development shall revise the existing underwriting criteria for the program referred to in paragraph (10) of section 2(b) of the National Housing Act (as added by subsection (a) of this section) in accordance with the requirements of such paragraph.

149.

Prohibition against kickbacks and unearned fees

Title I of the National Housing Act is amended by adding at the end of section 9 the following new section:

10.

Prohibition against kickbacks and unearned fees

(a)

In general

Except as provided in subsection (b), the provisions of sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall apply to each sale of a manufactured home financed with an FHA-insured loan or extension of credit, as well as to services rendered in connection with such transactions.

(b)

Authority of the Secretary

The Secretary is authorized to determine the manner and extent to which the provisions of sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) may reasonably be applied to the transactions described in subsection (a), and to grant such exemptions as may be necessary to achieve the purposes of this section.

(c)

Definitions

For purposes of this section—

(1)

the term federally related mortgage loan as used in sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include an FHA-insured loan or extension of credit made to a borrower for the purpose of purchasing a manufactured home that the borrower intends to occupy as a personal residence; and

(2)

the term real estate settlement service as used in sections 3, 8, 16, 17, 18, and 19 of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601 et seq.) shall include any service rendered in connection with a loan or extension of credit insured by the Federal Housing Administration for the purchase of a manufactured home.

(d)

Unfair and deceptive practices

In connection with the purchase of a manufactured home financed with a loan or extension of credit insured by the Federal Housing Administration under this title, the Secretary shall prohibit acts or practices in connection with loans or extensions of credit that the Secretary finds to be unfair, deceptive, or otherwise not in the interests of the borrower.

.

150.

Leasehold requirements

Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)), as amended by the preceding provisions of this title, is further amended by adding at the end the following new paragraph:

(11)

Leasehold requirements

No insurance shall be granted under this section to any such financial institution with respect to any obligation representing any such loan, advance of credit, or purchase by it, made for the purposes of financing a manufactured home which is intended to be situated in a manufactured home community pursuant to a lease, unless such lease—

(A)

expires not less than 3 years after the origination date of the obligation;

(B)

is renewable upon the expiration of the original 3 year term by successive 1 year terms; and

(C)

requires the lessor to provide the lessee written notice of termination of the lease not less than 180 days prior to the expiration of the current lease term in the event the lessee is required to move due to the closing of the manufactured home community, and further provides that failure to provide such notice to the mortgagor in a timely manner will cause the lease term, at its expiration, to automatically renew for an additional 1 year term.

.

II

Mortgage foreclosure protections for servicemembers

201.

Temporary increase in maximum loan guaranty amount for certain housing loans guaranteed by the Secretary of Veterans Affairs

Notwithstanding subparagraph (C) of section 3703(a)(1) of title 38, United States Code, for purposes of any loan described in subparagraph (A)(i)(IV) of such section that is originated during the period beginning on the date of the enactment of this Act and ending on December 31, 2008, the term maximum guaranty amount shall mean an amount equal to 25 percent of the higher of—

(1)

the limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for the calendar year in which the loan is originated for a single-family residence; or

(2)

125 percent of the area median price for a single-family residence, but in no case to exceed 175 percent of the limitation determined under such section 305(a)(2) for the calendar year in which the loan is originated for a single-family residence.

202.

Counseling on mortgage foreclosures for members of the Armed Forces returning from service abroad

(a)

In general

The Secretary of Defense shall develop and implement a program to advise members of the Armed Forces (including members of the National Guard and Reserve) who are returning from service on active duty abroad (including service in Operation Iraqi Freedom and Operation Enduring Freedom) on actions to be taken by such members to prevent or forestall mortgage foreclosures.

(b)

Elements

The program required by subsection (a) shall include the following:

(1)

Credit counseling.

(2)

Home mortgage counseling.

(3)

Such other counseling and information as the Secretary considers appropriate for purposes of the program.

(c)

Timing of provision of counseling

Counseling and other information under the program required by subsection (a) shall be provided to a member of the Armed Forces covered by the program as soon as practicable after the return of the member from service as described in subsection (a).

203.

Enhancement of protections for servicemembers relating to mortgages and mortgage foreclosures

(a)

Extension of period of protections against mortgage foreclosures

(1)

Extension of protection period

Subsection (c) of section 303 of the Servicemembers Civil Relief Act (50 U.S.C. App. 533) is amended by striking 90 days and inserting 9 months.

(2)

Extension of stay of proceedings period

Subsection (b) of such section is amended by striking 90 days and inserting 9 months.

(b)

Treatment of mortgages as obligations subject to interest rate limitation

Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. App. 527) is amended—

(1)

in subsection (a)(1), by striking in excess of 6 percent the second place it appears and all that follows and inserting “in excess of 6 percent—

(A)

during the period of military service and one year thereafter, in the case of an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage; or

(B)

during the period of military service, in the case of any other obligation or liability.

; and

(2)

by striking subsection (d) and inserting the following new subsection:

(d)

Definitions

In this section:

(1)

Interest

The term interest includes service charges, renewal charges, fees, or any other charges (except bona fide insurance) with respect to an obligation or liability.

(2)

Obligation or liability

The term obligation or liability includes an obligation or liability consisting of a mortgage, trust deed, or other security in the nature of a mortgage.

.

(c)

Effective date; sunset

(1)

Effective date

The amendment made by subsection (a) shall take effect on the date of the enactment of this Act.

(2)

Sunset

The amendments made by subsection (a) shall expire on December 31, 2010. Effective January 1, 2011, the provisions of subsections (b) and (c) of section 303 of the Servicemembers Civil Relief Act, as in effect on the day before the date of the enactment of this Act, are hereby revived.

III

Emergency assistance for the redevelopment of abandoned and foreclosed homes

301.

Emergency assistance for the redevelopment of abandoned and foreclosed homes

(a)

Direct appropriations

There are appropriated out of any money in the Treasury not otherwise appropriated for the fiscal year 2008, $4,000,000,000, to remain available until expended, for assistance to States and units of general local government (as such terms are defined in section 102 of the Housing and Community Development Act of 1974 (42 U.S.C. 5302)) for the redevelopment of abandoned and foreclosed upon homes and residential properties.

(b)

Allocation of appropriated amounts

(1)

In general

The amounts appropriated or otherwise made available to States and units of general local government under this section shall be allocated based on a funding formula established by the Secretary of Housing and Urban Development (in this title referred to as the Secretary).

(2)

Formula to be devised swiftly

The funding formula required under paragraph (1) shall be established not later than 60 days after the date of enactment of this section.

(3)

Criteria

The funding formula required under paragraph (1) shall ensure that any amounts appropriated or otherwise made available under this section are allocated to States and units of general local government with the greatest need, as such need is determined in the discretion of the Secretary based on—

(A)

the number and percentage of home foreclosures in each State or unit of general local government;

(B)

the number and percentage of homes financed by a subprime mortgage related loan in each State or unit of general local government; and

(C)

the number and percentage of homes in default or delinquency in each State or unit of general local government.

(4)

Distribution

Amounts appropriated or otherwise made available under this section shall be distributed according to the funding formula established by the Secretary under paragraph (1) not later than 30 days after the establishment of such formula.

(c)

Use of funds

(1)

In general

Any State or unit of general local government that receives amounts pursuant to this section shall, not later than 18 months after the receipt of such amounts, use such amounts to purchase and redevelop abandoned and foreclosed homes and residential properties.

(2)

Priority

Any State or unit of general local government that receives amounts pursuant to this section shall in distributing such amounts give priority emphasis and consideration to those metropolitan areas, metropolitan cities, urban areas, rural areas, low- and moderate-income areas, and other areas with the greatest need, including those—

(A)

with the greatest percentage of home foreclosures;

(B)

with the highest percentage of homes financed by a subprime mortgage related loan; and

(C)

identified by the State or unit of general local government as likely to face a significant rise in the rate of home foreclosures.

(3)

Eligible uses

Amounts made available under this section may be used to—

(A)

establish financing mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties, including such mechanisms as soft-seconds, loan loss reserves, and shared-equity loans for low- and moderate-income homebuyers;

(B)

purchase and rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in order to sell, rent, or redevelop such homes and properties;

(C)

establish land banks for homes that have been foreclosed upon; and

(D)

demolish blighted structures.

(d)

Limitations

(1)

On purchases

Any purchase of a foreclosed upon home or residential property under this section shall be at a discount from the current market appraised value of the home or property, taking into account its current condition, and such discount shall ensure that purchasers are paying below-market value for the home or property.

(2)

Sale of homes

If an abandoned or foreclosed upon home or residential property is purchased, redeveloped, or otherwise sold to an individual as a primary residence, then such sale shall be in an amount equal to or less than the cost to acquire and redevelop or rehabilitate such home or property up to a decent, safe, and habitable condition.

(3)

Reinvestment of profits

(A)

Profits from sales, rentals, and redevelopment

(i)

5-year reinvestment period

During the 5-year period following the date of enactment of this Act, any revenue generated from the sale, rental, redevelopment, rehabilitation, or any other eligible use that is in excess of the cost to acquire and redevelop (including reasonable development fees) or rehabilitate an abandoned or foreclosed upon home or residential property shall be provided to and used by the State or unit of general local government in accordance with, and in furtherance of, the intent and provisions of this section.

(ii)

Deposits in the Treasury

(I)

Profits

Upon the expiration of the 5-year period set forth under clause (i), any revenue generated from the sale, rental, redevelopment, rehabilitation, or any other eligible use that is in excess of the cost to acquire and redevelop (including reasonable development fees) or rehabilitate an abandoned or foreclosed upon home or residential property shall be deposited in the Treasury of the United States as miscellaneous receipts, unless the Secretary approves a request to use the funds for purposes under this Act.

(II)

Other amounts

Upon the expiration of the 5-year period set forth under clause (i), any other revenue not described under subclause (I) generated from the sale, rental, redevelopment, rehabilitation, or any other eligible use of an abandoned or foreclosed upon home or residential property shall be deposited in the Treasury of the United States as miscellaneous receipts.

(B)

Other revenues

Any revenue generated under subparagraphs (A), (C) or (D) of subsection (c)(3) shall be provided to and used by the State or unit of general local government in accordance with, and in furtherance of, the intent and provisions of this section.

(e)

Rules of construction

(1)

In general

Except as otherwise provided by this section, amounts appropriated, revenues generated, or amounts otherwise made available to States and units of general local government under this section shall be treated as though such funds were community development block grant funds under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq.).

(2)

No Match

No matching funds shall be required in order for a State or unit of general local government to receive any amounts under this section.

(f)

Authority to specify alternative requirements

(1)

In general

In administering any amounts appropriated or otherwise made available under this section, the Secretary may specify alternative requirements to any provision under title I of the Housing and Community Development Act of 1974 (except for those related to fair housing, nondiscrimination, labor standards, and the environment) in accordance with the terms of this section and for the sole purpose of expediting the use of such funds.

(2)

Notice

The Secretary shall provide written notice of its intent to exercise the authority to specify alternative requirements under paragraph (1) to the Committee on Banking, Housing and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 10 business days before such exercise of authority is to occur.

(3)

Low and moderate income requirement

(A)

In general

Notwithstanding the authority of the Secretary under paragraph (1)—

(i)

all of the funds appropriated or otherwise made available under this section shall be used with respect to individuals and families whose income does not exceed 120 percent of area median income; and

(ii)

not less than 25 percent of the funds appropriated or otherwise made available under this section shall be used for the purchase and redevelopment of abandoned or foreclosed upon homes or residential properties that will be used to house individuals or families whose incomes do not exceed 50 percent of area median income.

(B)

Recurrent requirement

The Secretary shall, by rule or order, ensure, to the maximum extent practicable and for the longest feasible term, that the sale, rental, or redevelopment of abandoned and foreclosed upon homes and residential properties under this section remain affordable to individuals or families described in subparagraph (A).

(g)

Periodic audits

In consultation with the Secretary of Housing and Urban Development, the Comptroller General of the United States shall conduct periodic audits to ensure that funds appropriated, made available, or otherwise distributed under this section are being used in a manner consistent with the criteria provided in this section.

302.

Nationwide distribution of resources

Notwithstanding any other provision of this Act or the amendments made by this Act, each State shall receive not less than 0.5 percent of funds made available under section 301 (relating to emergency assistance for the redevelopment of abandoned and foreclosed homes).

303.

Limitation on use of funds with respect to eminent domain

No State or unit of general local government may use any amounts received pursuant to section 301 to fund any project that seeks to use the power of eminent domain, unless eminent domain is employed only for a public use: Provided, That for purposes of this section, public use shall not be construed to include economic development that primarily benefits private entities.

304.

Limitation on distribution of funds

(a)

In general

None of the funds made available under this title or title IV shall be distributed to—

(1)

an organization which has been indicted for a violation under Federal law relating to an election for Federal office; or

(2)

an organization which employs applicable individuals.

(b)

Applicable individuals defined

In this section, the term applicable individual means an individual who—

(1)

is—

(A)

employed by the organization in a permanent or temporary capacity;

(B)

contracted or retained by the organization; or

(C)

acting on behalf of, or with the express or apparent authority of, the organization; and

(2)

has been indicted for a violation under Federal law relating to an election for Federal office.

305.

Counseling intermediaries

Notwithstanding any other provision of this Act, the amount appropriated under section 301(a) of this Act shall be $3,920,000,000 and the amount appropriated under section 401 of this Act shall be $180,000,000: Provided, That of amounts appropriated under such section 401 $30,000,000 shall be used by the Neighborhood Reinvestment Corporation (referred to in this section as the NRC) to make grants to counseling intermediaries approved by the Department of Housing and Urban Development or the NRC to hire attorneys to assist homeowners who have legal issues directly related to the homeowner's foreclosure, delinquency or short sale. Such attorneys shall be capable of assisting homeowners of owner-occupied homes with mortgages in default, in danger of default, or subject to or at risk of foreclosure and who have legal issues that cannot be handled by counselors already employed by such intermediaries: Provided, That of the amounts provided for in the prior provisos the NRC shall give priority consideration to counseling intermediaries and legal organizations that (1) provide legal assistance in the 100 metropolitan statistical areas (as defined by the Director of the Office of Management and Budget) with the highest home foreclosure rates, and (2) have the capacity to begin using the financial assistance within 90 days after receipt of the assistance: Provided further, That no funds provided under this Act shall be used to provide, obtain, or arrange on behalf of a homeowner, legal representation involving or for the purposes of civil litigation.

IV

Housing counseling resources

401.

Housing counseling resources

There are appropriated out of any money in the Treasury not otherwise appropriated for the fiscal year 2008, for an additional amount for the Neighborhood Reinvestment Corporation—Payment to the Neighborhood Reinvestment Corporation $100,000,000, to remain available until September 30, 2008, for foreclosure mitigation activities under the terms and conditions contained in the second undesignated paragraph (beginning with the phrase For an additional amount) under the heading Neighborhood Reinvestment Corporation—Payment to the Neighborhood Reinvestment Corporation of Public Law 110–161.

402.

Credit counseling

(a)

In general

Entities approved by the Neighborhood Reinvestment Corporation or the Secretary and State housing finance entities receiving funds under this title shall work to identify and coordinate with non-profit organizations operating national or statewide toll-free foreclosure prevention hotlines, including those that—

(1)

serve as a consumer referral source and data repository for borrowers experiencing some form of delinquency or foreclosure;

(2)

connect callers with local housing counseling agencies approved by the Neighborhood Reinvestment Corporation or the Secretary to assist with working out a positive resolution to their mortgage delinquency or foreclosure; or

(3)

facilitate or offer free assistance to help homeowners to understand their options, negotiate solutions, and find the best resolution for their particular circumstances.

V

Mortgage Disclosure Improvement Act

501.

Short title

This title may be cited as the Mortgage Disclosure Improvement Act of 2008.

502.

Enhanced mortgage loan disclosures

(a)

Truth in Lending Act Disclosures

Section 128(b)(2) of the Truth in Lending Act (15 U.S.C. 1638(b)(2)) is amended—

(1)

by inserting (A) before In the;

(2)

by striking a residential mortgage transaction, as defined in section 103(w) and inserting any extension of credit that is secured by the dwelling of a consumer;

(3)

by striking before the credit is extended, or;

(4)

by inserting , which shall be at least 7 business days before consummation of the transaction after written application;

(5)

by striking , whichever is earlier; and

(6)

by striking If the and all that follows through the end of the paragraph and inserting the following:

(B)

In the case of an extension of credit that is secured by the dwelling of a consumer, the disclosures provided under subparagraph (A), shall be in addition to the other disclosures required by subsection (a), and shall—

(i)

state in conspicuous type size and format, the following: You are not required to complete this agreement merely because you have received these disclosures or signed a loan application.; and

(ii)

be provided in the form of final disclosures at the time of consummation of the transaction, in the form and manner prescribed by this section.

(C)

In the case of an extension of credit that is secured by the dwelling of a consumer, under which the annual rate of interest is variable, or with respect to which the regular payments may otherwise be variable, in addition to the other disclosures required by subsection (a), the disclosures provided under this subsection shall do the following:

(i)

Label the payment schedule as follows: Payment Schedule: Payments Will Vary Based on Interest Rate Changes.

(ii)

State in conspicuous type size and format examples of adjustments to the regular required payment on the extension of credit based on the change in the interest rates specified by the contract for such extension of credit. Among the examples required to be provided under this clause is an example that reflects the maximum payment amount of the regular required payments on the extension of credit, based on the maximum interest rate allowed under the contract, in accordance with the rules of the Board. Prior to issuing any rules pursuant to this clause, the Board shall conduct consumer testing to determine the appropriate format for providing the disclosures required under this subparagraph to consumers so that such disclosures can be easily understood.

(D)

In any case in which the disclosure statement under subparagraph (A) contains an annual percentage rate of interest that is no longer accurate, as determined under section 107(c), the creditor shall furnish an additional, corrected statement to the borrower, not later than 3 business days before the date of consummation of the transaction.

(E)

The consumer shall receive the disclosures required under this paragraph before paying any fee to the creditor or other person in connection with the consumer’s application for an extension of credit that is secured by the dwelling of a consumer. If the disclosures are mailed to the consumer, the consumer is considered to have received them 3 business days after they are mailed. A creditor or other person may impose a fee for obtaining the consumer’s credit report before the consumer has received the disclosures under this paragraph, provided the fee is bona fide and reasonable in amount.

(F)

Waiver of timeliness of disclosures

To expedite consummation of a transaction, if the consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency, the consumer may waive or modify the timing requirements for disclosures under subparagraph (A), provided that—

(i)

the term bona fide personal emergency may be further defined in regulations issued by the Board;

(ii)

the consumer provides to the creditor a dated, written statement describing the emergency and specifically waiving or modifying those timing requirements, which statement shall bear the signature of all consumers entitled to receive the disclosures required by this paragraph; and

(iii)

the creditor provides to the consumers at or before the time of such waiver or modification, the final disclosures required by paragraph (1).

(G)

The requirements of subparagraphs (B), (C), (D) and (E) shall not apply to extensions of credit relating to plans described in section 101(53D) of title 11, United States Code.

.

(b)

Civil liability

Section 130(a) of the Truth in Lending Act (15 U.S.C. 1640(a)) is amended—

(1)

in paragraph (2)(A)(iii), by striking not less than $200 or greater than $2,000 and inserting not less than $400 or greater than $4,000; and

(2)

in the penultimate sentence of the undesignated matter following paragraph (4)—

(A)

by inserting or section 128(b)(2)(C)(ii), after 128(a),; and

(B)

by inserting or section 128(b)(2)(C)(ii) before the period.

(c)

Effective Dates

(1)

General disclosures

Except as provided in paragraph (2), the amendments made by subsection (a) shall become effective 12 months after the date of enactment of this Act.

(2)

Variable interest rates

Subparagraph (C) of section 128(b)(2) of the Truth in Lending Act (15 U.S.C. 1638(b)(2)(C)), as added by subsection (a) of this section, shall become effective on the earlier of—

(A)

the compliance date established by the Board for such purpose, by regulation; or

(B)

30 months after the date of enactment of this Act.

503.

Community Development Investment Authority for depository institutions

(a)

Depository institution community development investments

(1)

National banks

The first sentence of the paragraph designated as the Eleventh of section 5136 of the Revised Statutes of the United States (12 U.S.C. 24) (as amended by section 305(a) of the Financial Services Regulatory Relief Act of 2006) is amended by striking promotes the public welfare by benefitting primarily and inserting is designed primarily to promote the public welfare, including the welfare of.

(2)

State member banks

The first sentence of the 23rd paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 338a) is amended by striking promotes the public welfare by benefitting primarily and inserting is designed primarily to promote the public welfare, including the welfare of.

504.

Federal Home loan bank refinancing authority for certain residential mortgage loans

Section 10(j)(2) of the Federal Home Loan Bank Act (12 U.S.C. 1430(j)(2) is amended—

(1)

in subparagraph (A), by striking or at the end;

(2)

in subparagraph (B), by striking the period at the end and inserting ; or; and

(3)

by adding at the end the following:

(C)

during the 2-year period beginning on the date of enactment of this subparagraph, refinance loans that are secured by a first mortgage on a primary residence of any family having an income at or below 80 percent of the median income for the area.

.

VI

Tax-related provisions

601.

Election for 4-year carryback of certain net operating losses and temporary suspension of 90 percent AMT limit

(a)

In general

(1)

4-year carryback of certain losses

Subparagraph (H) of section 172(b)(1) of the Internal Revenue Code of 1986 (relating to years to which loss may be carried) is amended to read as follows:

(H)

Additional carryback of certain losses

(i)

Taxable years ending during 2001 and 2002

In the case of a net operating loss for any taxable year ending during 2001 or 2002, subparagraph (A)(i) shall be applied by substituting 5 for 2 and subparagraph (F) shall not apply.

(ii)

Taxable years ending during 2008 and 2009

In the case of a net operating loss with respect to any eligible taxpayer (within the meaning of section 168(k)(4)) for any taxable year ending during 2008 or 2009—

(I)

subparagraph (A)(i) shall be applied by substituting 4 for 2,

(II)

subparagraph (E)(ii) shall be applied by substituting 3 for 2, and

(III)

subparagraph (F) shall not apply.

.

(2)

Temporary suspension of 90 percent limit on certain NOL carrybacks and carryovers

(A)

In general

Section 56(d) of the Internal Revenue Code of 1986 (relating to definition of alternative tax net operating loss deduction) is amended by adding at the end the following new paragraph:

(3)

Additional adjustments

For purposes of paragraph (1)(A), in the case of an eligible taxpayer (within the meaning of section 168(k)(4)), the amount described in subclause (I) of paragraph (1)(A)(ii) shall be increased by the amount of the net operating loss deduction allowable for the taxable year under section 172 attributable to the sum of—

(A)

carrybacks of net operating losses from taxable years ending during 2008 and 2009, and

(B)

carryovers of net operating losses to taxable years ending during 2008 or 2009.

.

(B)

Conforming amendment

Subclause (I) of section 56(d)(1)(A)(i) of such Code is amended by inserting amount of such before deduction described in clause (ii)(I).

(3)

Effective dates

(A)

Net operating losses

The amendments made by paragraph (1) shall apply to net operating losses arising in taxable years ending in 2008 or 2009.

(B)

Suspension of AMT limitation

The amendments made by paragraph (2) shall apply to taxable years ending after December 31, 1997.

(4)

Anti-abuse rules

The Secretary of Treasury or the Secretary's designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this subsection, including anti-stuffing rules, anti-churning rules (including rules relating to sale-leasebacks), and rules similar to the rules under section 1091 of the Internal Revenue Code of 1986 relating to losses from wash sales.

(b)

Election among stimulus incentives

(1)

In general

(A)

Bonus depreciation

Section 168(k) of the Internal Revenue Code of 1986 (relating to special allowance for certain property acquired after December 31, 2007, and before January 1, 2009), as amended by the Economic Stimulus Act of 2008, is amended—

(i)

in paragraph (1), by inserting placed in service by an eligible taxpayer after any qualified property, and

(ii)

by adding at the end the following new paragraph:

(4)

Eligible taxpayer

(A)

In general

At such time and in such manner as the Secretary shall prescribe, each taxpayer may elect to be an eligible taxpayer with respect to 1 (and only 1) of the following:

(i)

This subsection and section 179(b)(7).

(ii)

The application of section 56(d)(1)(A)(ii)(I) and section 172(b)(1)(H)(ii) in connection with net operating losses relating to taxable years ending during 2008 and 2009.

(B)

Eligible taxpayer

For purposes of each of the provisions described in subparagraph (A), a taxpayer shall only be treated as an eligible taxpayer with respect to the provision with respect to which the taxpayer made the election under subparagraph (A).

(C)

Election irrevocable

An election under subparagraph (A) may not be revoked except with the consent of the Secretary.

.

(B)

Effective date

The amendments made by this paragraph shall take effect as if included in section 103 of the Economic Stimulus Act of 2008.

(2)

Election for increased expensing

(A)

In general

Paragraph (7) of section 179(b) of the Internal Revenue Code of 1986 (relating to limitations), as added by the Economic Stimulus Act of 2008, is amended to read as follows:

(7)

Special rule for eligible taxpayers in 2008

In the case of any taxable year of any eligible taxpayer (within the meaning of section 168(k)(4)) beginning in 2008—

(A)

the dollar limitation under paragraph (1) shall be $250,000,

(B)

the dollar limitation under paragraph (2) shall be $800,000, and

(C)

the amounts described in subparagraphs (A) and (B) shall not be adjusted under paragraph (5).

.

(B)

Effective date

The amendment made by this paragraph shall take effect as if included in section 102 of the Economic Stimulus Act of 2008.

602.

Modifications on use of qualified mortgage bonds; temporary increased volume cap for certain housing bonds

(a)

Use of qualified mortgage bonds proceeds for subprime refinancing loans

Section 143(k) of the Internal Revenue Code of 1986 (relating to other definitions and special rules) is amended by adding at the end the following new paragraph:

(12)

Special rules for subprime refinancings

(A)

In general

Notwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage on a residence which was originally financed by the mortgagor through a qualified subprime loan.

(B)

Special rules

In applying this paragraph to any case in which the proceeds of a qualified mortgage issue are used for any refinancing described in subparagraph (A)—

(i)

subsection (a)(2)(D)(i) (relating to proceeds must be used within 42 months of date of issuance) shall be applied by substituting 12-month period for 42-month period each place it appears,

(ii)

subsection (d) (relating to 3-year requirement) shall not apply, and

(iii)

subsection (e) (relating to purchase price requirement) shall be applied by using the market value of the residence at the time of refinancing in lieu of the acquisition cost.

(C)

Qualified subprime loan

The term qualified subprime loan means an adjustable rate single-family residential mortgage loan originated after December 31, 2001, and before January 1, 2008, that the bond issuer determines would be reasonably likely to cause financial hardship to the borrower if not refinanced.

(D)

Termination

This paragraph shall not apply to any bonds issued after December 31, 2010.

.

(b)

Increased volume cap for certain bonds

(1)

In general

Subsection (d) of section 146 of the Internal Revenue Code of 1986 (relating to State ceiling) is amended by adding at the end the following new paragraph:

(5)

Increase and set aside for housing bonds for 2008

(A)

Increase for 2008

In the case of calendar year 2008, the State ceiling for each State shall be increased by an amount equal to the greater of—

(i)

$10,000,000,000 multiplied by a fraction—

(I)

the numerator of which is the population of such State, and

(II)

the denominator of which is the total population of all States, or

(ii)

the amount determined under subparagraph (B).

(B)

Minimum amount

The amount determined under this subparagraph is—

(i)

in the case of a State (other than a possession), $90,300,606, and

(ii)

in the case of a possession of the United States with a population less than the least populous State (other than a possession), the product of—

(I)

a fraction the numerator of which is $90,300,606 and the denominator of which is population of the least populous State (other than a possession), and

(II)

the population of such possession.

In the case of any possession of the United States not described in clause (ii), the amount determined under this subparagraph shall be zero.
(C)

Set aside

(i)

In general

Any amount of the State ceiling for any State which is attributable to an increase under this paragraph shall be allocated solely for one or more qualified purposes.

(ii)

Qualified purpose

For purposes of this paragraph, the term qualified purpose means—

(I)

the issuance of exempt facility bonds used solely to provide qualified residential rental projects, or

(II)

a qualified mortgage issue (determined by substituting 12-month period for 42-month period each place it appears in section 143(a)(2)(D)(i)).

.

(2)

Carryforward of unused limitations

Subsection (f) of section 146 of such Code (relating to elective carryforward of unused limitation for specified purpose) is amended by adding at the end the following new paragraph:

(6)

Special rules for increased volume cap under subsection (d)(5)

(A)

In general

No amount which is attributable to the increase under subsection (d)(5) may be used—

(i)

for a carryforward purpose other than a qualified purpose (as defined in subsection (d)(5)), and

(ii)

to issue any bond after calendar year 2010.

(B)

Ordering rules

For purposes of subparagraph (A), any carryforward of an issuing authority’s volume cap for calendar year 2008 shall be treated as attributable to such increase to the extent of such increase.

.

(c)

Alternative minimum tax exemption for qualified mortgage bonds, qualified veterans' mortgage bonds, and bonds for qualified residential rental projects

(1)

In general

Clause (ii) of section 57(a)(5)(C) of the Internal Revenue Code of 1986 (relating to specified private activity bonds) is amended by striking shall not include and all that follows and inserting

shall not include—

(I)

any qualified 501(c)(3) bond (as defined in section 145), or

(II)

any qualified mortgage bond (as defined in section 143(a)), any qualified veterans' mortgage bond (as defined in section 143(b)), or any exempt facility bond (as defined in section 142(a)) issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide qualified residential rental projects (as defined in section 142(d)), but only if such bond is issued after the date of the enactment of this subclause and before January 1, 2011.

Subclause (II) shall not apply to a refunding bond unless such subclause applied to the refunded bond (or in the case of a series of refundings, the original bond).

.

(2)

Conforming amendment

The heading for section 57(a)(5)(C)(ii) of such Code is amended by striking qualified 501(c)(3) bonds and inserting certain bonds.

(d)

Effective date

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

603.

Credit for certain home purchases

(a)

Allowance of credit

Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:

25E.

Credit for certain home purchases

(a)

Allowance of credit

(1)

In general

In the case of an individual who is a purchaser of a qualified principal residence during the taxable year, there shall be allowed as a credit against the tax imposed by this chapter an amount equal to so much of the purchase price of the residence as does not exceed $7,000.

(2)

Allocation of credit amount

The amount of the credit allowed under paragraph (1) shall be equally divided among the 2 taxable years beginning with the taxable year in which the purchase of the qualified principal residence is made.

(b)

Limitations

(1)

Date of purchase

The credit allowed under subsection (a) shall be allowed only with respect to purchases made—

(A)

after the date of the enactment of this section, and

(B)

before the date that is 12 months after such date.

(2)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for any taxable year shall not exceed the excess of—

(A)

the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

(B)

the sum of the credits allowable under this subpart (other than this section and section 23) for the taxable year.

(3)

One-time only

(A)

In general

If a credit is allowed under this section in the case of any individual (and such individual's spouse, if married) with respect to the purchase of any qualified principal residence, no credit shall be allowed under this section in any taxable year with respect to the purchase of any other qualified principal residence by such individual or a spouse of such individual.

(B)

Joint purchase

In the case of a purchase of a qualified principal residence by 2 or more unmarried individuals or by 2 married individuals filing separately, no credit shall be allowed under this section if a credit under this section has been allowed to any of such individuals in any taxable year with respect to the purchase of any other qualified principal residence.

(c)

Qualified principal residence

For purposes of this section—

(1)

In general

The term qualified principal residence means an eligible single-family residence that is purchased to be the principal residence of the purchaser.

(2)

Eligible single-family residence

(A)

In general

The term eligible single-family residence means a single-family structure that is a residence—

(i)

upon which foreclosure has been filed pursuant to the laws of the State in which the residence is located, and

(ii)

which—

(I)

is a new previously unoccupied residence for which a building permit was issued and construction began on or before September 1, 2007, or

(II)

was occupied as a principal residence by the mortgagor for at least 1 year prior to the foreclosure filing.

(B)

Certification

In the case of an eligible single-family residence described in subparagraph (A)(ii)(I), no credit shall be allowed under this section unless the purchaser submits a certification by the seller of such residence that such residence meets the requirements of such subparagraph.

(3)

Principal residence

The term principal residence has the same meaning as when used in section 121.

(d)

Denial of double benefit

No credit shall be allowed under this section for any purchase for which a credit is allowed under section 1400C.

(e)

Recapture in the case of certain dispositions

In the event that a taxpayer—

(1)

disposes of the qualified principal residence with respect to which a credit is allowed under subsection (a), or

(2)

fails to occupy such residence as the taxpayer's principal residence,

at any time within 24 months after the date on which the taxpayer purchased such residence, then the remaining portion of the credit allowed under subsection (a) shall be disallowed in the taxable year during which such disposition occurred or in which the taxpayer failed to occupy the residence as a principal residence, and in any subsequent taxable year in which the remaining portion of the credit would, but for this subsection, have been allowed.
(f)

Special rules

(1)

Joint purchase

(A)

Married individuals filing separately

In the case of 2 married individuals filing separately, subsection (a) shall be applied to each such individual by substituting $3,500 for $7,000 in paragraph (1) thereof.

(B)

Unmarried individuals

If 2 or more individuals who are not married purchase a qualified principal residence, the amount of the credit allowed under subsection (a) shall be allocated among such individuals in such manner as the Secretary may prescribe, except that the total amount of the credits allowed to all such individuals shall not exceed $7,000.

(2)

Purchase; purchase price

Rules similar to the rules of paragraphs (2) and (3) of section 1400C(e) (as in effect on the date of the enactment of this section) shall apply for purposes of this section.

(3)

Reporting requirement

Rules similar to the rules of section 1400C(f) (as so in effect) shall apply for purposes of this section.

(g)

Basis adjustment

For purposes of this subtitle, if a credit is allowed under this section with respect to the purchase of any residence, the basis of such residence shall be reduced by the amount of the credit so allowed.

.

(b)

Conforming amendments

(1)

Section 24(b)(3)(B) of the Internal Revenue Code of 1986 is amended by striking and 25B and inserting , 25B, and 25E.

(2)

Section 25(e)(1)(C)(ii) of such Code is amended by inserting 25E, after 25D,.

(3)

Section 25B(g)(2) of such Code is amended by striking section 23 and inserting sections 23 and 25E.

(4)

Section 25D(c)(2) of such Code is amended by striking and 25B and inserting 25B, and 25E.

(5)

Section 26(a)(1) of such Code is amended by striking and 25B and inserting 25B, and 25E.

(6)

Section 904(i) of such Code is amended by striking and 25B and inserting 25B, and 25E.

(7)

Subsection (a) of section 1016 of such Code is amended by striking and at the end of paragraph (36), by striking the period at the end of paragraph (37) and inserting , and, and by adding at the end the following new paragraph:

(38)

to the extent provided in section 25E(g).

.

(8)

Section 1400C(d)(2) of such Code is amended by striking and 25D and inserting 25D, and 25E.

(c)

Clerical amendment

The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25D the following new item:

Sec. 25E. Credit for certain home purchases.

.

(d)

Effective date

The amendments made by this section shall apply to purchases in taxable years ending after the date of the enactment of this Act.

(e)

Application of EGTRRA sunset

The amendment made by subsection (b)(1) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendment relates.

604.

Additional standard deduction for real property taxes for nonitemizers

(a)

In general

Section 63(c)(1) of the Internal Revenue Code of 1986 (defining standard deduction) is amended by striking and at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting , and, and by adding at the end the following new subparagraph:

(C)

in the case of any taxable year beginning in 2008, the real property tax deduction.

.

(b)

Definition

Section 63(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(8)

Real property tax deduction

(A)

In general

For purposes of paragraph (1), the real property tax deduction is so much of the amount of the eligible State and local real property taxes paid or accrued by the taxpayer during the taxable year which do not exceed $500 ($1,000 in the case of a joint return).

(B)

Eligible State and local real property taxes

For purposes of subparagraph (A), the term eligible State and local real property taxes means State and local real property taxes (within the meaning of section 164), but only if the rate of tax for all residential real property taxes in the jurisdiction has not been increased at any time after April 2, 2008, and before January 1, 2009.

.

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

605.

Election to accelerate AMT and R and D credits in lieu of bonus depreciation

(a)

In general

Section 168(k), as amended by this Act, is amended by adding at the end the following new paragraph:

(5)

Election to accelerate AMT and R and D credits in lieu of bonus depreciation

(A)

In general

If a corporation which is an eligible taxpayer (within the meaning of paragraph (4)) for purposes of this subsection elects to have this paragraph apply—

(i)

no additional depreciation shall be allowed under paragraph (1) for any qualified property placed in service during any taxable year to which paragraph (1) would otherwise apply, and

(ii)

the limitations described in subparagraph (B) for such taxable year shall be increased by an aggregate amount not in excess of the bonus depreciation amount for such taxable year.

(B)

Limitations to be increased

The limitations described in this subparagraph are—

(i)

the limitation under section 38(c), and

(ii)

the limitation under section 53(c).

(C)

Bonus depreciation amount

For purposes of this paragraph—

(i)

In general

The bonus depreciation amount for any applicable taxable year is an amount equal to the product of 20 percent and the excess (if any) of—

(I)

the aggregate amount of depreciation which would be determined under this section for property placed in service during the taxable year if no election under this paragraph were made, over

(II)

the aggregate amount of depreciation allowable under this section for property placed in service during the taxable year.

In the case of property which is a passenger aircraft, the amount determined under subclause (I) shall be calculated without regard to the written binding contract limitation under paragraph (2)(A)(iii)(I).
(ii)

Eligible qualified property

For purposes of clause (i), the term eligible qualified property means qualified property under paragraph (2), except that in applying paragraph (2) for purposes of this clause—

(I)

March 31, 2008 shall be substituted for December 31, 2007 each place it appears in subparagraph (A) and clauses (i) and (ii) of subparagraph (E) thereof,

(II)

only adjusted basis attributable to manufacture, construction, or production after March 31, 2008, and before January 1, 2009, shall be taken into account under subparagraph (B)(ii) thereof, and

(III)

in the case of property which is a passenger aircraft, the written binding contract limitation under subparagraph (A)(iii)(I) thereof shall not apply.

(iii)

Maximum amount

The bonus depreciation amount for any applicable taxable year shall not exceed the applicable limitation under clause (iv), reduced (but not below zero) by the bonus depreciation amount for any preceding taxable year.

(iv)

Applicable limitation

For purposes of clause (iii), the term applicable limitation means, with respect to any eligible taxpayer, the lesser of—

(I)

$40,000,000, or

(II)

10 percent of the sum of the amounts determined with respect to the eligible taxpayer under clauses (ii) and (iii) of subparagraph (D).

(v)

Aggregation rule

All corporations which are treated as a single employer under section 52(a) shall be treated as 1 taxpayer for purposes of applying the limitation under this subparagraph and determining the applicable limitation under clause (iv).

(D)

Allocation of bonus depreciation amounts

(i)

In general

Subject to clauses (ii) and (iii), the taxpayer shall, at such time and in such manner as the Secretary may prescribe, specify the portion (if any) of the bonus depreciation amount which is to be allocated to each of the limitations described in subparagraph (B).

(ii)

Business credit limitation

The portion of the bonus depreciation amount allocated to the limitation described in subparagraph (B)(i) shall not exceed an amount equal to the portion of the credit allowable under section 38 for the taxable year which is allocable to business credit carryforwards to such taxable year which are—

(I)

from taxable years beginning before January 1, 2006, and

(II)

properly allocable (determined under the rules of section 38(d)) to the research credit determined under section 41(a).

(iii)

Alternative minimum tax credit limitation

The portion of the bonus depreciation amount allocated to the limitation described in subparagraph (B)(ii) shall not exceed an amount equal to the portion of the minimum tax credit allowable under section 53 for the taxable year which is allocable to the adjusted minimum tax imposed for taxable years beginning before January 1, 2006.

(E)

Credit refundable

Any aggregate increases in the credits allowed under section 38 or 53 by reason of this paragraph shall, for purposes of this title, be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A.

(F)

Other rules

(i)

Election

Any election under this paragraph (including any allocation under subparagraph (D)) may be revoked only with the consent of the Secretary.

(ii)

Deduction allowed in computing minimum tax

Notwithstanding this paragraph, paragraph (2)(G) shall apply with respect to the deduction computed under this section (after application of this paragraph) with respect to property placed in service during any applicable taxable year.

.

(b)

Effective date

The amendments made by this section shall apply to property placed in service after December 31, 2007, in taxable years ending after such date.

606.

Use of amended income tax returns to take into account receipt of certain hurricane-related casualty loss grants by disallowing previously taken casualty loss deductions

(a)

In general

Notwithstanding any other provision of the Internal Revenue Code of 1986, if a taxpayer claims a deduction for any taxable year with respect to a casualty loss to a personal residence (within the meaning of section 121 of such Code) resulting from Hurricane Katrina, Hurricane Rita, or Hurricane Wilma and in a subsequent taxable year receives a grant under Public Law 109–148, 109–234, or 110–116 as reimbursement for such loss, such taxpayer may elect to file an amended income tax return for the taxable year in which such deduction was allowed and disallow such deduction. If elected, such amended return must be filed not later than the due date for filing the tax return for the taxable year in which the taxpayer receives such reimbursement or the date that is 4 months after the date of the enactment of this Act, whichever is later. Any increase in Federal income tax resulting from such disallowance if such amended return is filed—

(1)

shall be subject to interest on the underpaid tax for one year at the underpayment rate determined under section 6621(a)(2) of such Code; and

(2)

shall not be subject to any penalty under such Code.

(b)

Emergency designation

For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

607.

Waiver of deadline on construction of GO Zone property eligible for bonus depreciation

(a)

In general

Subparagraph (B) of section 1400N(d)(3) of the Internal Revenue Code of 1986 is amended to read as follows:

(B)

without regard to and before January 1, 2009 in clause (i) thereof,

.

(b)

Effective date

The amendment made by this section shall apply to property placed in service after December 31, 2007.

(c)

Emergency designation

For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

608.

Temporary tax relief for Kiowa County, Kansas and surrounding area

(a)

In general

The following provisions of or relating to the Internal Revenue Code of 1986 shall apply, in addition to the areas described in such provisions, to an area with respect to which a major disaster has been declared by the President under section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (FEMA–1699–DR, as in effect on the date of the enactment of this Act) by reason of severe storms and tornados beginning on May 4, 2007, and determined by the President to warrant individual or individual and public assistance from the Federal Government under such Act with respect to damages attributed to such storms and tornados:

(1)

Suspension of certain limitations on personal casualty losses

Section 1400S(b)(1) of the Internal Revenue Code of 1986, by substituting May 4, 2007 for August 25, 2005.

(2)

Extension of replacement period for nonrecognition of gain

Section 405 of the Katrina Emergency Tax Relief Act of 2005, by substituting on or after May 4, 2007, by reason of the May 4, 2007, storms and tornados for on or after August 25, 2005, by reason of Hurricane Katrina.

(3)

Employee retention credit for employers affected by May 4 storms and tornados

Section 1400R(a) of the Internal Revenue Code of 1986—

(A)

by substituting May 4, 2007 for August 28, 2005 each place it appears,

(B)

by substituting January 1, 2008 for January 1, 2006 both places it appears, and

(C)

only with respect to eligible employers who employed an average of not more than 200 employees on business days during the taxable year before May 4, 2007.

(4)

Special allowance for certain property acquired on or after May 5, 2007

Section 1400N(d) of such Code—

(A)

by substituting qualified Recovery Assistance property for qualified Gulf Opportunity Zone property each place it appears,

(B)

by substituting May 5, 2007 for August 28, 2005 each place it appears,

(C)

by substituting December 31, 2008 for December 31, 2007 in paragraph (2)(A)(v),

(D)

by substituting December 31, 2009 for December 31, 2008 in paragraph (2)(A)(v),

(E)

by substituting May 4, 2007 for August 27, 2005 in paragraph (3)(A),

(F)

by substituting January 1, 2009 for January 1, 2008 in paragraph (3)(B), and

(G)

determined without regard to paragraph (6) thereof.

(5)

Increase in expensing under section 179

Section 1400N(e) of such Code, by substituting qualified section 179 Recovery Assistance property for qualified section 179 Gulf Opportunity Zone property each place it appears.

(6)

Expensing for certain demolition and clean-up costs

Section 1400N(f) of such Code—

(A)

by substituting qualified Recovery Assistance clean-up cost for qualified Gulf Opportunity Zone clean-up cost each place it appears, and

(B)

by substituting beginning on May 4, 2007, and ending on December 31, 2009 for beginning on August 28, 2005, and ending on December 31, 2007 in paragraph (2) thereof.

(7)

Treatment of public utility property disaster losses

Section 1400N(o) of such Code.

(8)

Treatment of net operating losses attributable to storm losses

Section 1400N(k) of such Code—

(A)

by substituting qualified Recovery Assistance loss for qualified Gulf Opportunity Zone loss each place it appears,

(B)

by substituting after May 3, 2007, and before on January 1, 2010 for after August 27, 2005, and before January 1, 2008 each place it appears,

(C)

by substituting May 4, 2007 for August 28, 2005 in paragraph (2)(B)(ii)(I) thereof,

(D)

by substituting qualified Recovery Assistance property for qualified Gulf Opportunity Zone property in paragraph (2)(B)(iv) thereof, and

(E)

by substituting qualified Recovery Assistance casualty loss for qualified Gulf Opportunity Zone casualty loss each place it appears.

(9)

Treatment of representations regarding income eligibility for purposes of qualified rental project requirements

Section 1400N(n) of such Code.

(10)

Special rules for use of retirement funds

Section 1400Q of such Code—

(A)

by substituting qualified Recovery Assistance distribution for qualified hurricane distribution each place it appears,

(B)

by substituting on or after May 4, 2007, and before January 1, 2009 for on or after August 25, 2005, and before January 1, 2007 in subsection (a)(4)(A)(i),

(C)

by substituting qualified storm distribution for qualified Katrina distribution each place it appears,

(D)

by substituting after November 4, 2006, and before May 5, 2007 for after February 28, 2005, and before August 29, 2005 in subsection (b)(2)(B)(ii),

(E)

by substituting beginning on May 4, 2007, and ending on November 5, 2007 for beginning on August 25, 2005, and ending on February 28, 2006 in subsection (b)(3)(A),

(F)

by substituting qualified storm individual for qualified Hurricane Katrina individual each place it appears,

(G)

by substituting December 31, 2007 for December 31, 2006 in subsection (c)(2)(A),

(H)

by substituting beginning on June 4, 2007, and ending on December 31, 2007 for beginning on September 24, 2005, and ending on December 31, 2006 in subsection (c)(4)(A)(i),

(I)

by substituting May 4, 2007 for August 25, 2005 in subsection (c)(4)(A)(ii), and

(J)

by substituting January 1, 2008 for January 1, 2007 in subsection (d)(2)(A)(ii).

(b)

Emergency designation

For purposes of Senate enforcement, all provisions of this section are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

VII

Emergency designation

701.

Emergency designation

For purposes of Senate enforcement, all provisions of this Act are designated as emergency requirements and necessary to meet emergency needs pursuant to section 204 of S. Con. Res. 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.

VIII

REIT investment diversification and empowerment

801.

Short title; amendment of 1986 Code

(a)

Short title

This title may be cited as the REIT Investment Diversification and Empowerment Act of 2008.

(b)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

A

Taxable REIT subsidiaries

811.

Conforming taxable REIT subsidiary asset test

Section 856(c)(4)(B)(ii) is amended by striking 20 percent and inserting 25 percent.

B

Dealer sales

821.

Holding period under safe harbor

Section 857(b)(6) (relating to income from prohibited transactions) is amended—

(1)

by striking 4 years in subparagraphs (C)(i), (C)(iv), and (D)(i) and inserting 2 years,

(2)

by striking 4-year period in subparagraphs (C)(ii), (D)(ii), and (D)(iii) and inserting 2-year period, and

(3)

by striking real estate assetand all that follows through if in the matter preceding clause (i) of subparagraphs (C) and (D), respectively, and inserting real estate asset (as defined in section 856(c)(5)(B)) and which is described in section 1221(a)(1) if.

822.

Determining value of sales under safe harbor

Section 857(b)(6) is amended—

(1)

by striking the semicolon at the end of subparagraph (C)(iii) and inserting , or (III) the fair market value of property (other than sales of foreclosure property or sales to which section 1033 applies) sold during the taxable year does not exceed 10 percent of the fair market value of all of the assets of the trust as of the beginning of the taxable year;, and

(2)

by adding or at the end of subclause (II) of subparagraph (D)(iv) and by adding at the end of such subparagraph the following new subclause:

(III)

the fair market value of property (other than sales of foreclosure property or sales to which section 1033 applies) sold during the taxable year does not exceed 10 percent of the fair market value of all of the assets of the trust as of the beginning of the taxable year,

.

C

Health care REITs

831.

Conformity for health care facilities

(a)

Related party rentals

Subparagraph (B) of section 856(d)(8) (relating to special rule for taxable REIT subsidiaries) is amended to read as follows:

(B)

Exception for certain lodging facilities and health care property

The requirements of this subparagraph are met with respect to an interest in real property which is a qualified lodging facility (as defined in paragraph (9)(D)) or a qualified health care property (as defined in subsection (e)(6)(D)(i)) leased by the trust to a taxable REIT subsidiary of the trust if the property is operated on behalf of such subsidiary by a person who is an eligible independent contractor. For purposes of this section, a taxable REIT subsidiary is not considered to be operating or managing a qualified health care property or qualified lodging facility solely because it—

(i)

directly or indirectly possesses a license, permit, or similar instrument enabling it to do so, or

(ii)

employs individuals working at such property or facility located outside the United States, but only if an eligible independent contractor is responsible for the daily supervision and direction of such individuals on behalf of the taxable REIT subsidiary pursuant to a management agreement or similar service contract.

.

(b)

Eligible independent contractor

Subparagraphs (A) and (B) of section 856(d)(9) (relating to eligible independent contractor) are amended to read as follows:

(A)

In general

The term eligible independent contractor means, with respect to any qualified lodging facility or qualified health care property (as defined in subsection (e)(6)(D)(i)), any independent contractor if, at the time such contractor enters into a management agreement or other similar service contract with the taxable REIT subsidiary to operate such qualified lodging facility or qualified health care property, such contractor (or any related person) is actively engaged in the trade or business of operating qualified lodging facilities or qualified health care properties, respectively, for any person who is not a related person with respect to the real estate investment trust or the taxable REIT subsidiary.

(B)

Special rules

Solely for purposes of this paragraph and paragraph (8)(B), a person shall not fail to be treated as an independent contractor with respect to any qualified lodging facility or qualified health care property (as so defined) by reason of the following:

(i)

The taxable REIT subsidiary bears the expenses for the operation of such qualified lodging facility or qualified health care property pursuant to the management agreement or other similar service contract.

(ii)

The taxable REIT subsidiary receives the revenues from the operation of such qualified lodging facility or qualified health care property, net of expenses for such operation and fees payable to the operator pursuant to such agreement or contract.

(iii)

The real estate investment trust receives income from such person with respect to another property that is attributable to a lease of such other property to such person that was in effect as of the later of—

(I)

January 1, 1999, or

(II)

the earliest date that any taxable REIT subsidiary of such trust entered into a management agreement or other similar service contract with such person with respect to such qualified lodging facility or qualified health care property.

.

(c)

Taxable REIT subsidiaries

The last sentence of section 856(l)(3) is amended—

(1)

by inserting or a health care facility after a lodging facility, and

(2)

by inserting or health care facility after such lodging facility.

D

Effective dates and sunset

841

Effective dates and sunset

(a)

In general

Except as otherwise provided in this section, the amendments made by this title shall apply to taxable years beginning after the date of the enactment of this Act.

(b)

REIT income tests

(1)

The amendment made by section 801(a) and (b) shall apply to gains and items of income recognized after the date of the enactment of this Act.

(2)

The amendment made by section 801(c) shall apply to transactions entered into after the date of the enactment of this Act.

(3)

The amendment made by section 801(d) shall apply after the date of the enactment of this Act.

(c)

Conforming foreign currency revisions

(1)

The amendment made by section 803(a) shall apply to gains recognized after the date of the enactment of this Act.

(2)

The amendment made by section 803(b) shall apply to gains and deductions recognized after the date of the enactment of this Act.

(d)

Dealer sales

The amendments made by subtitle C shall apply to sales made after the date of the enactment of this Act.

(e)

Sunset

All amendments made by this title shall not apply to taxable years beginning after the date which is 5 years after the date of the enactment of this Act. The Internal Revenue Code of 1986 shall be applied and administered to taxable years described in the preceding sentence as if the amendments so described had never been enacted.

IX

VETERANS HOUSING MATTERS

901.

Home improvements and structural alterations for totally disabled members of the Armed Forces before discharge or release from the Armed Forces

Section 1717 of title 38, United States Code, is amended by adding at the end the following new subsection:

(d)
(1)

In the case of a member of the Armed Forces who, as determined by the Secretary, has a disability permanent in nature incurred or aggravated in the line of duty in the active military, naval, or air service, the Secretary may furnish improvements and structural alterations for such member for such disability or as otherwise described in subsection (a)(2) while such member is hospitalized or receiving outpatient medical care, services, or treatment for such disability if the Secretary determines that such member is likely to be discharged or released from the Armed Forces for such disability.

(2)

The furnishing of improvements and alterations under paragraph (1) in connection with the furnishing of medical services described in subparagraph (A) or (B) of subsection (a)(2) shall be subject to the limitation specified in the applicable subparagraph.

.

902.

Eligibility for specially adapted housing benefits and assistance for members of the Armed Forces with service-connected disabilities and individuals residing outside the United States

(a)

Eligibility

Chapter 21 of title 38, United States Code, is amended by inserting after section 2101 the following new section:

2101A.

Eligibility for benefits and assistance: members of the Armed Forces with service-connected disabilities; individuals residing outside the United States

(a)

Members with service-connected disabilities

(1)

The Secretary may provide assistance under this chapter to a member of the Armed Forces serving on active duty who is suffering from a disability that meets applicable criteria for benefits under this chapter if the disability is incurred or aggravated in line of duty in the active military, naval, or air service. Such assistance shall be provided to the same extent as assistance is provided under this chapter to veterans eligible for assistance under this chapter and subject to the same requirements as veterans under this chapter.

(2)

For purposes of this chapter, any reference to a veteran or eligible individual shall be treated as a reference to a member of the Armed Forces described in subsection (a) who is similarly situated to the veteran or other eligible individual so referred to.

(b)

Benefits and assistance for individuals residing outside the United States

(1)

Subject to paragraph (2), the Secretary may, at the Secretary's discretion, provide benefits and assistance under this chapter (other than benefits under section 2106 of this title) to any individual otherwise eligible for such benefits and assistance who resides outside the United States.

(2)

The Secretary may provide benefits and assistance to an individual under paragraph (1) only if—

(A)

the country or political subdivision in which the housing or residence involved is or will be located permits the individual to have or acquire a beneficial property interest (as determined by the Secretary) in such housing or residence; and

(B)

the individual has or will acquire a beneficial property interest (as so determined) in such housing or residence.

(c)

Regulations

Benefits and assistance under this chapter by reason of this section shall be provided in accordance with such regulations as the Secretary may prescribe.

.

(b)

Conforming amendments

(1)

Repeal of superseded authority

Section 2101 of such title is amended—

(A)

by striking subsection (c); and

(B)

by redesignating subsection (d) as subsection (c).

(2)

Limitations on assistance

Section 2102 of such title is amended—

(A)

in subsection (a)—

(i)

by striking veteran each place it appears and inserting individual; and

(ii)

in paragraph (3), by striking veteran's and inserting individual's;

(B)

in subsection (b)(1), by striking a veteran and inserting an individual;

(C)

in subsection (c)—

(i)

by striking a veteran and inserting an individual; and

(ii)

by striking the veteran each place it appears and inserting the individual; and

(D)

in subsection (d), by striking a veteran each place it appears and inserting an individual.

(3)

Assistance for individuals temporarily residing in housing of family member

Section 2102A of such title is amended—

(A)

by striking veteran each place it appears (other than in subsection (b)) and inserting individual;

(B)

in subsection (a), by striking veteran's each place it appears and inserting individual's; and

(C)

in subsection (b), by striking a veteran each place it appears and inserting an individual.

(4)

Furnishing of plans and specifications

Section 2103 of such title is amended by striking veterans both places it appears and inserting individuals.

(5)

Construction of benefits

Section 2104 of such title is amended—

(A)

in subsection (a), by striking veteran each place it appears and inserting individual; and

(B)

in subsection (b)—

(i)

in the first sentence, by striking A veteran and inserting An individual;

(ii)

in the second sentence, by striking a veteran and inserting an individual; and

(iii)

by striking such veteran each place it appears and inserting such individual.

(6)

Veterans' mortgage life insurance

Section 2106 of such title is amended—

(A)

in subsection (a)—

(i)

by striking any eligible veteran and inserting any eligible individual; and

(ii)

by striking the veterans' and inserting the individual's;

(B)

in subsection (b), by striking an eligible veteran and inserting an eligible individual;

(C)

in subsection (e), by striking an eligible veteran and inserting an individual;

(D)

in subsection (h), by striking each veteran and inserting each individual;

(E)

in subsection (i), by striking the veteran's each place it appears and inserting the individual's;

(F)

by striking the veteran each place it appears and inserting the individual; and

(G)

by striking a veteran each place it appears and inserting an individual.

(7)

Heading amendments

(A)

The heading of section 2101 of such title is amended to read as follows:

2101.

Acquisition and adaptation of housing: eligible veterans

.

(B)

The heading of section 2102A of such title is amended to read as follows:

2102A.

Assistance for individuals residing temporarily in housing owned by a family member

.

(8)

Clerical amendments

The table of sections at the beginning of chapter 21 of such title is amended—

(A)

by striking the item relating to section 2101 and inserting the following new item:

2101. Acquisition and adaptation of housing: eligible veterans.

;

(B)

by inserting after the item relating to section 2101, as so amended, the following new item:

2101A. Eligibility for benefits and assistance: members of the Armed Forces with service-connected disabilities; individuals residing outside the United States.

;

and
(C)

by striking the item relating to section 2102A and inserting the following new item:

2102A. Assistance for individuals residing temporarily in housing owned by a family member.

.

903.

Specially adapted housing assistance for individuals with severe burn injuries

Section 2101 of title 38, United States Code, is amended—

(1)

in subsection (a)(2), by adding at the end the following new subparagraph:

(E)

The disability is due to a severe burn injury (as determined pursuant to regulations prescribed by the Secretary).

; and

(2)

in subsection (b)(2)—

(A)

by striking either and inserting any; and

(B)

by adding at the end the following new subparagraph:

(C)

The disability is due to a severe burn injury (as so determined).

.

904.

Extension of assistance for individuals residing temporarily in housing owned by a family member

Section 2102A(e) of title 38, United States Code, is amended by striking after the end of the five-year period that begins on the date of the enactment of the Veterans' Housing Opportunity and Benefits Improvement Act of 2006 and inserting after December 31, 2011.

905.

Increase in specially adapted housing benefits for disabled veterans

(a)

In general

Section 2102 of title 38, United States Code, is amended—

(1)

in subsection (b)(2), by striking $10,000 and inserting $12,000;

(2)

in subsection (d)—

(A)

in paragraph (1), by striking $50,000 and inserting $60,000; and

(B)

in paragraph (2), by striking $10,000 and inserting $12,000; and

(3)

by adding at the end the following new subsection:

(e)
(1)

Effective on October 1 of each year (beginning in 2009), the Secretary shall increase the amounts described in subsection (b)(2) and paragraphs (1) and (2) of subsection (d) in accordance with this subsection.

(2)

The increase in amounts under paragraph (1) to take effect on October 1 of a year shall be by an amount of such amounts equal to the percentage by which—

(A)

the residential home cost-of-construction index for the preceding calendar year, exceeds

(B)

the residential home cost-of-construction index for the year preceding the year described in subparagraph (A).

(3)

The Secretary shall establish a residential home cost-of-construction index for the purposes of this subsection. The index shall reflect a uniform, national average change in the cost of residential home construction, determined on a calendar year basis. The Secretary may use an index developed in the private sector that the Secretary determines is appropriate for purposes of this subsection.

.

(b)

Effective date

The amendments made by this section shall take effect on July 1, 2008, and shall apply with respect to payments made in accordance with section 2102 of title 38, United States Code, on or after that date.

906.

Report on specially adapted housing for disabled individuals

(a)

In general

Not later than December 31, 2008, the Secretary of Veterans Affairs shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives a report that contains an assessment of the adequacy of the authorities available to the Secretary under law to assist eligible disabled individuals in acquiring—

(1)

suitable housing units with special fixtures or movable facilities required for their disabilities, and necessary land therefor;

(2)

such adaptations to their residences as are reasonably necessary because of their disabilities; and

(3)

residences already adapted with special features determined by the Secretary to be reasonably necessary as a result of their disabilities.

(b)

Focus on particular disabilities

The report required by subsection (a) shall set forth a specific assessment of the needs of—

(1)

veterans who have disabilities that are not described in subsections (a)(2) and (b)(2) of section 2101 of title 38, United States Code; and

(2)

other disabled individuals eligible for specially adapted housing under chapter 21 of such title by reason of section 2101A of such title (as added by section 902(a) of this Act) who have disabilities that are not described in such subsections.

907.

Report on specially adapted housing assistance for individuals who reside in housing owned by a family member on permanent basis

Not later than December 31, 2008, the Secretary of Veterans Affairs shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives a report on the advisability of providing assistance under section 2102A of title 38, United States Code, to veterans described in subsection (a) of such section, and to members of the Armed Forces covered by such section 2102A by reason of section 2101A of title 38, United States Code (as added by section 902(a) of this Act), who reside with family members on a permanent basis.

908.

Definition of annual income for purposes of section 8 and other public housing programs

Section 3(b)(4) of the United States Housing Act of 1937 (42 U.S.C. 1437a(3)(b)(4)) is amended by inserting or any deferred Department of Veterans Affairs disability benefits that are received in a lump sum amount or in prospective monthly amounts before may not be considered.

909.

Payment of transportation of baggage and household effects for members of the Armed Forces who relocate due to foreclosure of leased housing

Section 406 of title 37, United States Code, is amended—

(1)

by redesignating subsections (k) and (l) as subsections (l) and (m), respectively; and

(2)

by inserting after subsection (j) the following new subsection (k):

(k)

A member of the armed forces who relocates from leased or rental housing by reason of the foreclosure of such housing is entitled to transportation of baggage and household effects under subsection (b)(1) in the same manner, and subject to the same conditions and limitations, as similarly circumstanced members entitled to transportation of baggage and household effects under that subsection.

.

X

Clean energy tax stimulus

1001.

Short title; etc

(a)

Short title

This title may be cited as the Clean Energy Tax Stimulus Act of 2008 .

(b)

Amendment of 1986 Code

Except as otherwise expressly provided, whenever in this title an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

A

Extension of clean energy production incentives

1011.

Extension and modification of renewable energy production tax credit

(a)

Extension of credit

Each of the following provisions of section 45(d) (relating to qualified facilities) is amended by striking January 1, 2009 and inserting January 1, 2010:

(1)

Paragraph (1).

(2)

Clauses (i) and (ii) of paragraph (2)(A).

(3)

Clauses (i)(I) and (ii) of paragraph (3)(A).

(4)

Paragraph (4).

(5)

Paragraph (5).

(6)

Paragraph (6).

(7)

Paragraph (7).

(8)

Paragraph (8).

(9)

Subparagraphs (A) and (B) of paragraph (9).

(b)

Production credit for electricity produced from marine renewables

(1)

In general

Paragraph (1) of section 45(c) (relating to resources) is amended by striking and at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting , and, and by adding at the end the following new subparagraph:

(I)

marine and hydrokinetic renewable energy.

.

(2)

Marine renewables

Subsection (c) of section 45 is amended by adding at the end the following new paragraph:

(10)

Marine and hydrokinetic renewable energy

(A)

In general

The term marine and hydrokinetic renewable energy means energy derived from—

(i)

waves, tides, and currents in oceans, estuaries, and tidal areas,

(ii)

free flowing water in rivers, lakes, and streams,

(iii)

free flowing water in an irrigation system, canal, or other man-made channel, including projects that utilize nonmechanical structures to accelerate the flow of water for electric power production purposes, or

(iv)

differentials in ocean temperature (ocean thermal energy conversion).

(B)

Exceptions

Such term shall not include any energy which is derived from any source which utilizes a dam, diversionary structure (except as provided in subparagraph (A)(iii)), or impoundment for electric power production purposes.

.

(3)

Definition of facility

Subsection (d) of section 45 is amended by adding at the end the following new paragraph:

(11)

Marine and hydrokinetic renewable energy facilities

In the case of a facility producing electricity from marine and hydrokinetic renewable energy, the term qualified facility means any facility owned by the taxpayer—

(A)

which has a nameplate capacity rating of at least 150 kilowatts, and

(B)

which is originally placed in service on or after the date of the enactment of this paragraph and before January 1, 2010.

.

(4)

Credit rate

Subparagraph (A) of section 45(b)(4) is amended by striking or (9) and inserting (9), or (11).

(5)

Coordination with small irrigation power

Paragraph (5) of section 45(d), as amended by subsection (a), is amended by striking January 1, 2010 and inserting the date of the enactment of paragraph (11).

(c)

Sales of electricity to regulated public utilities treated as sales to unrelated persons

Section 45(e)(4) (relating to related persons) is amended by adding at the end the following new sentence: A taxpayer shall be treated as selling electricity to an unrelated person if such electricity is sold to a regulated public utility (as defined in section 7701(a)(33)..

(d)

Trash facility clarification

Paragraph (7) of section 45(d) is amended—

(1)

by striking facility which burns and inserting facility (other than a facility described in paragraph (6)) which uses, and

(2)

by striking combustion.

(e)

Effective dates

(1)

Extension

The amendments made by subsection (a) shall apply to property originally placed in service after December 31, 2008.

(2)

Modifications

The amendments made by subsections (b) and (c) shall apply to electricity produced and sold after the date of the enactment of this Act, in taxable years ending after such date.

(3)

Trash facility clarification

The amendments made by subsection (d) shall apply to electricity produced and sold before, on, or after December 31, 2007.

1012.

Extension and modification of solar energy and fuel cell investment tax credit

(a)

Extension of credit

(1)

Solar energy property

Paragraphs (2)(A)(i)(II) and (3)(A)(ii) of section 48(a) (relating to energy credit) are each amended by striking January 1, 2009 and inserting January 1, 2017.

(2)

Fuel cell property

Subparagraph (E) of section 48(c)(1) (relating to qualified fuel cell property) is amended by striking December 31, 2008 and inserting December 31, 2017.

(3)

Qualified microturbine property

Subparagraph (E) of section 48(c)(2) (relating to qualified microturbine property) is amended by striking December 31, 2008 and inserting December 31, 2017.

(b)

Allowance of energy credit against alternative minimum tax

Subparagraph (B) of section 38(c)(4) (relating to specified credits) is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and, and by adding at the end the following new clause:

(v)

the credit determined under section 46 to the extent that such credit is attributable to the energy credit determined under section 48.

.

(c)

Repeal of dollar per kilowatt limitation for fuel cell property

(1)

In general

Section 48(c)(1) (relating to qualified fuel cell), as amended by subsection (a)(2), is amended by striking subparagraph (B) and by redesignating subparagraphs (C), (D), and (E) as subparagraphs (B), (C), and (D), respectively.

(2)

Conforming amendment

Section 48(a)(1) is amended by striking paragraphs (1)(B) and (2)(B) of subsection (c) and inserting subsection (c)(2)(B).

(d)

Public electric utility property taken into account

(1)

In general

Paragraph (3) of section 48(a) is amended by striking the second sentence thereof.

(2)

Conforming amendments

(A)

Paragraph (1) of section 48(c), as amended by this section, is amended by striking subparagraph (C) and redesignating subparagraph (D) as subparagraph (C).

(B)

Paragraph (2) of section 48(c), as amended by subsection (a)(3), is amended by striking subparagraph (D) and redesignating subparagraph (E) as subparagraph (D).

(e)

Effective dates

(1)

Extension

The amendments made by subsection (a) shall take effect on the date of the enactment of this Act.

(2)

Allowance against alternative minimum tax

The amendments made by subsection (b) shall apply to credits determined under section 46 of the Internal Revenue Code of 1986 in taxable years beginning after the date of the enactment of this Act and to carrybacks of such credits.

(3)

Fuel cell property and public electric utility property

The amendments made by subsections (c) and (d) shall apply to periods after the date of the enactment of this Act, in taxable years ending after such date, under rules similar to the rules of section 48(m) of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of the Revenue Reconciliation Act of 1990).

1013.

Extension and modification of residential energy efficient property credit

(a)

Extension

Section 25D(g) (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2009.

(b)

No dollar limitation for credit for solar electric property

(1)

In general

Section 25D(b)(1) (relating to maximum credit) is amended by striking subparagraph (A) and by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively.

(2)

Conforming amendments

Section 25D(e)(4) is amended—

(A)

by striking clause (i) in subparagraph (A),

(B)

by redesignating clauses (ii) and (iii) in subparagraph (A) as clauses (i) and (ii), respectively, and

(C)

by striking , (2), in subparagraph (C).

(c)

Credit allowed against alternative minimum tax

(1)

In general

Subsection (c) of section 25D is amended to read as follows:

(c)

Limitation based on amount of tax; carryforward of unused credit

(1)

Limitation based on amount of tax

In the case of a taxable year to which section 26(a)(2) does not apply, the credit allowed under subsection (a) for the taxable year shall not exceed the excess of—

(A)

the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, over

(B)

the sum of the credits allowable under this subpart (other than this section) and section 27 for the taxable year.

(2)

Carryforward of unused credit

(A)

Rule for years in which all personal credits allowed against regular and alternative minimum tax

In the case of a taxable year to which section 26(a)(2) applies, if the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a)(2) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

(B)

Rule for other years

In the case of a taxable year to which section 26(a)(2) does not apply, if the credit allowable under subsection (a) exceeds the limitation imposed by paragraph (1) for such taxable year, such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.

.

(2)

Conforming amendments

(A)

Section 23(b)(4)(B) is amended by inserting and section 25D after this section.

(B)

Section 24(b)(3)(B) is amended by striking and 25B and inserting , 25B, and 25D.

(C)

Section 25B(g)(2) is amended by striking section 23 and inserting sections 23 and 25D.

(D)

Section 26(a)(1) is amended by striking and 25B and inserting 25B, and 25D.

(d)

Effective date

(1)

In general

The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

(2)

Application of EGTRRA sunset

The amendments made by subparagraphs (A) and (B) of subsection (c)(2) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 in the same manner as the provisions of such Act to which such amendments relate.

1014.

Extension and modification of credit for clean renewable energy bonds

(a)

Extension

Section 54(m) (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2009.

(b)

Increase in national limitation

Section 54(f) (relating to limitation on amount of bonds designated) is amended—

(1)

by inserting , and for the period beginning after the date of the enactment of the Clean Energy Tax Stimulus Act of 2008 and ending before January 1, 2010, $400,000,000 after $1,200,000,000 in paragraph (1),

(2)

by striking $750,000,000 of the in paragraph (2) and inserting $750,000,000 of the $1,200,000,000, and

(3)

by striking bodies in paragraph (2) and inserting bodies, and except that the Secretary may not allocate more than 1/3 of the $400,000,000 national clean renewable energy bond limitation to finance qualified projects of qualified borrowers which are public power providers nor more than 1/3 of such limitation to finance qualified projects of qualified borrowers which are mutual or cooperative electric companies described in section 501(c)(12) or section 1381(a)(2)(C).

(c)

Public power providers defined

Section 54(j) is amended—

(1)

by adding at the end the following new paragraph:

(6)

Public power provider

The term public power provider means a State utility with a service obligation, as such terms are defined in section 217 of the Federal Power Act (as in effect on the date of the enactment of this paragraph).

, and

(2)

by inserting ; public power provider before the period at the end of the heading.

(d)

Technical amendment

The third sentence of section 54(e)(2) is amended by striking subsection (l)(6) and inserting subsection (l)(5).

(e)

Effective date

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

1015.

Extension of special rule to implement FERC restructuring policy

(a)

Qualifying electric transmission transaction

(1)

In general

Section 451(i)(3) (defining qualifying electric transmission transaction) is amended by striking January 1, 2008 and inserting January 1, 2010.

(2)

Effective date

The amendment made by this subsection shall apply to transactions after December 31, 2007.

(b)

Independent transmission company

(1)

In general

Section 451(i)(4)(B)(ii) (defining independent transmission company) is amended by striking December 31, 2007 and inserting the date which is 2 years after the date of such transaction.

(2)

Effective date

The amendment made by this subsection shall take effect as if included in the amendments made by section 909 of the American Jobs Creation Act of 2004.

B

Extension of incentives to improve energy efficiency

1021.

Extension and modification of credit for energy efficiency improvements to existing homes

(a)

Extension of credit

Section 25C(g) (relating to termination) is amended by striking December 31, 2007 and inserting December 31, 2009.

(b)

Qualified biomass fuel property

(1)

In general

Section 25C(d)(3) is amended—

(A)

by striking and at the end of subparagraph (D),

(B)

by striking the period at the end of subparagraph (E) and inserting , and, and

(C)

by adding at the end the following new subparagraph:

(F)

a stove which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and which has a thermal efficiency rating of at least 75 percent.

.

(2)

Biomass fuel

Section 25C(d) (relating to residential energy property expenditures) is amended by adding at the end the following new paragraph:

(6)

Biomass fuel

The term biomass fuel means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.

.

(c)

Modifications of standards for energy-efficient building property

(1)

Electric heat pumps

Subparagraph (B) of section 25C(d)(3) is amended to read as follows:

(A)

an electric heat pump which achieves the highest efficiency tier established by the Consortium for Energy Efficiency, as in effect on January 1, 2008.

.

(2)

Central air conditioners

Section 25C(d)(3)(D) is amended by striking 2006 and inserting 2008.

(3)

Water Heaters

Subparagraph (E) of section 25C(d) is amended to read as follows:

(E)

a natural gas, propane, or oil water heater which has either an energy factor of at least 0.80 or a thermal efficiency of at least 90 percent.

.

(4)

Oil furnaces and hot water boilers

Paragraph (4) of section 25C(d) is amended to read as follows:

(4)

Qualified natural gas, propane, and oil furnaces and hot water boilers

(A)

Qualified natural gas furnace

The term qualified natural gas furnace means any natural gas furnace which achieves an annual fuel utilization efficiency rate of not less than 95.

(B)

Qualified natural gas hot water boiler

The term qualified natural gas hot water boiler means any natural gas hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.

(C)

Qualified propane furnace

The term qualified propane furnace means any propane furnace which achieves an annual fuel utilization efficiency rate of not less than 95.

(D)

Qualified propane hot water boiler

The term qualified propane hot water boiler means any propane hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.

(E)

Qualified oil furnaces

The term qualified oil furnace means any oil furnace which achieves an annual fuel utilization efficiency rate of not less than 90.

(F)

Qualified oil hot water boiler

The term qualified oil hot water boiler means any oil hot water boiler which achieves an annual fuel utilization efficiency rate of not less than 90.

.

(d)

Effective date

The amendments made this section shall apply to expenditures made after December 31, 2007.

1022.

Extension and modification of tax credit for energy efficient new homes

(a)

Extension of credit

Subsection (g) of section 45L (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2010.

(b)

Allowance for contractor's personal residence

Subparagraph (B) of section 45L(a)(1) is amended to read as follows:

(B)
(i)

acquired by a person from such eligible contractor and used by any person as a residence during the taxable year, or

(ii)

used by such eligible contractor as a residence during the taxable year.

.

(c)

Effective date

The amendments made by this section shall apply to homes acquired after December 31, 2008.

1023.

Extension and modification of energy efficient commercial buildings deduction

(a)

Extension

Section 179D(h) (relating to termination) is amended by striking December 31, 2008 and inserting December 31, 2009.

(b)

Adjustment of maximum deduction amount

(1)

In general

Subparagraph (A) of section 179D(b)(1) (relating to maximum amount of deduction) is amended by striking $1.80 and inserting $2.25.

(2)

Partial allowance

Paragraph (1) of section 179D(d) is amended—

(A)

by striking $.60 and inserting $0.75, and

(B)

by striking $1.80 and inserting $2.25.

(c)

Effective date

The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

1024.

Modification and extension of energy efficient appliance credit for appliances produced after 2007

(a)

In general

Subsection (b) of section 45M (relating to applicable amount) is amended to read as follows:

(b)

Applicable amount

For purposes of subsection (a)—

(1)

Dishwashers

The applicable amount is—

(A)

$45 in the case of a dishwasher which is manufactured in calendar year 2008 or 2009 and which uses no more than 324 kilowatt hours per year and 5.8 gallons per cycle, and

(B)

$75 in the case of a dishwasher which is manufactured in calendar year 2008, 2009, or 2010 and which uses no more than 307 kilowatt hours per year and 5.0 gallons per cycle (5.5 gallons per cycle for dishwashers designed for greater than 12 place settings).

(2)

Clothes washers

The applicable amount is—

(A)

$75 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 which meets or exceeds a 1.72 modified energy factor and does not exceed a 8.0 water consumption factor,

(B)

$125 in the case of a residential top-loading clothes washer manufactured in calendar year 2008 or 2009 which meets or exceeds a 1.8 modified energy factor and does not exceed a 7.5 water consumption factor,

(C)

$150 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.0 modified energy factor and does not exceed a 6.0 water consumption factor, and

(D)

$250 in the case of a residential or commercial clothes washer manufactured in calendar year 2008, 2009, or 2010 which meets or exceeds 2.2 modified energy factor and does not exceed a 4.5 water consumption factor.

(3)

Refrigerators

The applicable amount is—

(A)

$50 in the case of a refrigerator which is manufactured in calendar year 2008, and consumes at least 20 percent but not more than 22.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

(B)

$75 in the case of a refrigerator which is manufactured in calendar year 2008 or 2009, and consumes at least 23 percent but no more than 24.9 percent less kilowatt hours per year than the 2001 energy conservation standards,

(C)

$100 in the case of a refrigerator which is manufactured in calendar year 2008, 2009, or 2010, and consumes at least 25 percent but not more than 29.9 percent less kilowatt hours per year than the 2001 energy conservation standards, and

(D)

$200 in the case of a refrigerator manufactured in calendar year 2008, 2009, or 2010 and which consumes at least 30 percent less energy than the 2001 energy conservation standards.

.

(b)

Eligible production

(1)

Similar treatment for all appliances

Subsection (c) of section 45M (relating to eligible production) is amended—

(A)

by striking paragraph (2),

(B)

by striking (1) In general and all that follows through the eligible and inserting The eligible, and

(C)

by moving the text of such subsection in line with the subsection heading and redesignating subparagraphs (A) and (B) as paragraphs (1) and (2), respectively.

(2)

Modification of base period

Paragraph (2) of section 45M(c), as amended by paragraph (1) of this section, is amended by striking 3-calendar year and inserting 2-calendar year.

(c)

Types of energy efficient appliances

Subsection (d) of section 45M (defining types of energy efficient appliances) is amended to read as follows:

(d)

Types of energy efficient appliance

For purposes of this section, the types of energy efficient appliances are—

(1)

dishwashers described in subsection (b)(1),

(2)

clothes washers described in subsection (b)(2), and

(3)

refrigerators described in subsection (b)(3).

.

(d)

Aggregate credit amount allowed

(1)

Increase in limit

Paragraph (1) of section 45M(e) (relating to aggregate credit amount allowed) is amended to read as follows:

(1)

Aggregate credit amount allowed

The aggregate amount of credit allowed under subsection (a) with respect to a taxpayer for any taxable year shall not exceed $75,000,000 reduced by the amount of the credit allowed under subsection (a) to the taxpayer (or any predecessor) for all prior taxable years beginning after December 31, 2007.

.

(2)

Exception for certain refrigerator and clothes washers

Paragraph (2) of section 45M(e) is amended to read as follows:

(2)

Amount allowed for certain refrigerators and clothes washers

Refrigerators described in subsection (b)(3)(D) and clothes washers described in subsection (b)(2)(D) shall not be taken into account under paragraph (1).

.

(e)

Qualified energy efficient appliances

(1)

In general

Paragraph (1) of section 45M(f) (defining qualified energy efficient appliance) is amended to read as follows:

(1)

Qualified energy efficient appliance

The term qualified energy efficient appliance means—

(A)

any dishwasher described in subsection (b)(1),

(B)

any clothes washer described in subsection (b)(2), and

(C)

any refrigerator described in subsection (b)(3).

.

(2)

Clothes washer

Section 45M(f)(3) (defining clothes washer) is amended by inserting commercial before residential the second place it appears.

(3)

Top-loading clothes washer

Subsection (f) of section 45M (relating to definitions) is amended by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively, and by inserting after paragraph (3) the following new paragraph:

(4)

Top-loading clothes washer

The term top-loading clothes washer means a clothes washer which has the clothes container compartment access located on the top of the machine and which operates on a vertical axis.

.

(4)

Replacement of energy factor

Section 45M(f)(6), as redesignated by paragraph (3), is amended to read as follows:

(6)

Modified energy factor

The term modified energy factor means the modified energy factor established by the Department of Energy for compliance with the Federal energy conservation standard.

.

(5)

Gallons per cycle; water consumption factor

Section 45M(f) (relating to definitions), as amended by paragraph (3), is amended by adding at the end the following:

(9)

Gallons per cycle

The term gallons per cycle means, with respect to a dishwasher, the amount of water, expressed in gallons, required to complete a normal cycle of a dishwasher.

(10)

Water consumption factor

The term water consumption factor means, with respect to a clothes washer, the quotient of the total weighted per-cycle water consumption divided by the cubic foot (or liter) capacity of the clothes washer.

.

(f)

Effective date

The amendments made by this section shall apply to appliances produced after December 31, 2007.

XI

Sense of the Senate

1101.

Sense of the Senate

It is the sense of the Senate that in implementing or carrying out any provision of this Act, or any amendment made by this Act, the Senate supports a policy of noninterference regarding local government requirements that the holder of a foreclosed property maintain that property.

Amend the title so as to read: An Act to provide needed housing reform and for other purposes..

Secretary