I
110th CONGRESS
2d Session
H. R. 5140
IN THE HOUSE OF REPRESENTATIVES
AN ACT
To provide economic stimulus through recovery rebates to individuals, incentives for business investment, and an increase in conforming and FHA loan limits.
Short title; table of contents
Short title
This Act may be cited
as the Recovery Rebates and Economic
Stimulus for the American People Act of 2008
.
Table of contents
The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Recovery rebates and incentives for business investment
Sec. 101. 2008 recovery rebates for individuals.
Sec. 102. Temporary increase in limitations on expensing of certain depreciable business assets.
Sec. 103. Special allowance for certain property acquired during 2008.
Title II—Housing GSE and FHA Loan Limits
Sec. 201. Temporary conforming loan limit increase for Fannie Mae and Freddie Mac.
Sec. 202. Temporary loan limit increase for FHA.
Recovery rebates and incentives for business investment
2008 recovery rebates for individuals
In general
Section 6428 of the Internal Revenue Code of 1986 is amended to read as follows:
2008 recovery rebates for individuals
In general
In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by subtitle A for the first taxable year beginning in 2008 an amount equal to the lesser of—
net income tax liability, or
$600 ($1,200 in the case of a joint return).
Special rules
In general
In the case of a taxpayer described in paragraph (2)—
the amount determined under subsection (a) shall not be less than $300 ($600 in the case of a joint return), and
the amount determined under subsection (a) (after the application of subparagraph (A)) shall be increased by the product of $300 multiplied by the number of qualifying children (within the meaning of section 24(c)) of the taxpayer.
Taxpayer described
A taxpayer is described in this paragraph if the taxpayer—
has earned income of at least $3,000, or
has—
net income tax liability which is greater than zero, and
gross income which is greater than the sum of the basic standard deduction plus the exemption amount (twice the exemption amount in the case of a joint return).
Treatment of credit
The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1.
Limitation based on adjusted gross income
The amount of the credit allowed by subsection (a) (determined without regard to this subsection and subsection (f)) shall be reduced (but not below zero) by 5 percent of so much of the taxpayer’s adjusted gross income as exceeds $75,000 ($150,000 in the case of a joint return).
Definitions
For purposes of this section—
Net income tax liability
The term net income tax liability
means
the excess of—
the sum of the taxpayer’s regular tax liability (within the meaning of section 26(b)) and the tax imposed by section 55 for the taxable year, over
the credits allowed by part IV (other than section 24 and subpart C thereof) of subchapter A of chapter 1.
Eligible individual
The term eligible individual
means any
individual other than—
any nonresident alien individual,
any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, and
an estate or trust.
Earned income
The term earned income
has the meaning set
forth in section 32(c)(2) except that—
subclause (II) of
subparagraph (B)(vi) thereof shall be applied by substituting January 1,
2009
for January 1, 2008
, and
such term shall not include net earnings from self-employment which are not taken into account in computing taxable income.
Basic standard deduction; exemption amount
The terms basic standard
deduction
and exemption amount
shall have the same
respective meanings as when used in section 6012(a).
Coordination with advance refunds of credit
In general
The amount of credit which would (but for this paragraph) be allowable under this section shall be reduced (but not below zero) by the aggregate refunds and credits made or allowed to the taxpayer under subsection (g). Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).
Joint returns
In the case of a refund or credit made or allowed under subsection (g) with respect to a joint return, half of such refund or credit shall be treated as having been made or allowed to each individual filing such return.
Advance refunds and credits
In general
Each individual who was an eligible individual for such individual’s first taxable year beginning in 2007 shall be treated as having made a payment against the tax imposed by chapter 1 for such first taxable year in an amount equal to the advance refund amount for such taxable year.
Advance refund amount
For purposes of paragraph (1), the advance refund amount is the amount that would have been allowed as a credit under this section for such first taxable year if this section (other than subsection (f) and this subsection) had applied to such taxable year.
Timing of payments
The Secretary shall, subject to the provisions of this title, refund or credit any overpayment attributable to this section as rapidly as possible. No refund or credit shall be made or allowed under this subsection after December 31, 2008.
No interest
No interest shall be allowed on any overpayment attributable to this section.
.
Treatment of possessions
Mirror code possession
The Secretary of the Treasury shall make a payment to each possession of the United States with a mirror code tax system in an amount equal to the loss to that possession by reason of the amendments made by this section. Such amount shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
Other possessions
The Secretary of the Treasury shall make a payment to each possession of the United States which does not have a mirror code tax system in an amount estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the amendments made by this section if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payment to the residents of such possession.
Definitions and special rules
Possession of the United States
For purposes of
this subsection, the term possession of the United States
includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern
Mariana Islands.
Mirror code tax system
For purposes of this subsection, the term mirror
code tax system
means, with respect to any possession of the United
States, the income tax system of such possession if the income tax liability of
the residents of such possession under such system is determined by reference
to the income tax laws of the United States as if such possession were the
United States.
Treatment of payments
For purposes of section 1324(b)(2) of title 31, United States Code, the payments under this subsection shall be treated in the same manner as a refund due from the credit allowed under section 6428 of the Internal Revenue Code of 1986 (as added by this section).
Appropriations To carry out recovery rebates
In general
The following sums are hereby appropriated, out of any money in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2008, to implement the provisions of this section (including the amendments made by this section):
For an additional amount for “Department of the Treasury—Financial Management Service—Salaries and Expenses”, $52,510,000, to remain available until September 30, 2009.
For an additional amount for “Department of the Treasury—Internal Revenue Service—Taxpayer Services”, $48,920,000, to remain available until September 30, 2009.
For an additional amount for “Department of the Treasury—Internal Revenue Service—Operations Support”, $149,700,000, to remain available until September 30, 2009.
Reports
No later than 15 days after enactment of this Act, the Secretary of the Treasury shall submit a plan to the Committees on Appropriations of the House of Representatives and the Senate detailing the expected use of the funds provided by this subsection. Beginning 90 days after enactment of this Act, the Secretary of the Treasury shall submit a quarterly report to the Committees on Appropriations of the House of Representatives and the Senate detailing the actual expenditure of funds provided by this subsection and the expected expenditure of such funds in the subsequent quarter.
Conforming amendments
Paragraph (2) of
section 1324(b) of title 31, United States Code, is amended by inserting
or 6428
after section 35
.
Paragraph (1) of section 1(i) of the Internal Revenue Code of 1986 is amended by striking subparagraph (D).
The item relating to section 6428 in the table of sections for subchapter B of chapter 65 of such Code is amended to read as follows:
Sec. 6428. 2008 recovery rebates for individuals.
.
Temporary increase in limitations on expensing of certain depreciable business assets
In general
Subsection (b) of section 179 of the Internal Revenue Code of 1986 (relating to limitations) is amended by adding at the end the following new paragraph:
Increase in limitations for 2008
In the case of any taxable year beginning in 2008—
the dollar limitation under paragraph (1) shall be $250,000,
the dollar limitation under paragraph (2) shall be $800,000, and
the amounts described in subparagraphs (A) and (B) shall not be adjusted under paragraph (5).
.
Effective date
The amendment made by this section shall apply to taxable years beginning after December 31, 2007.
Special allowance for certain property acquired during 2008
In general
Subsection (k) of section 168 of the Internal Revenue Code of 1986 (relating to special allowance for certain property acquired after September 10, 2001, and before January 1, 2005) is amended—
by striking
September 10, 2001
each place it appears and inserting
December 31, 2007
,
by striking
September 11, 2001
each place it appears and inserting
January 1, 2008
,
by
striking January 1, 2005
each place it appears and inserting
January 1, 2009
, and
by
striking January 1, 2006
each place it appears and inserting
January 1, 2010
.
50 percent allowance
Subparagraph (A) of
section 168(k)(1) of such Code is amended by striking 30 percent
and inserting 50 percent
.
Conforming amendments
Subclause (I) of section 168(k)(2)(B)(i) of
such Code is amended by striking and (iii)
and inserting
(iii), and (iv)
.
Subclause (IV) of section 168(k)(2)(B)(i)
of such Code is amended by striking clauses (ii) and (iii)
and
inserting clause (iii)
.
Clause (i) of
section 168(k)(2)(C) of such Code is amended by striking and
(iii)
and inserting , (iii), and (iv)
.
Clause (i) of
section 168(k)(2)(F) of such Code is amended by striking $4,600
and inserting $8,000
.
Subsection (k) of section 168 of such Code is amended by striking paragraph (4).
Clause (iii) of section 168(k)(2)(D) of such Code is amended by striking the last sentence.
Paragraph (4) of section 168(l) of such Code is amended by redesignating subparagraphs (A), (B), and (C) as subparagraphs (B), (C), and (D) and inserting before subparagraph (B) (as so redesignated) the following new subparagraph:
Bonus depreciation property under subsection (k)
Such term shall not include any property to which section 168(k) applies.
.
Paragraph (5) of section 168(l) of such Code is amended—
by striking
September 10, 2001
in subparagraph (A) and inserting
December 31, 2007
, and
by striking
January 1, 2005
in subparagraph (B) and inserting January
1, 2009
.
Subparagraph (D) of
section 1400L(b)(2) of such Code is amended by striking January 1,
2005
and inserting January 1, 2010
.
Paragraph (3) of section 1400N(d) of such Code is amended—
by striking
September 10, 2001
in subparagraph (A) and inserting
December 31, 2007
, and
by striking
January 1, 2005
in subparagraph (B) and inserting January
1, 2009
.
Paragraph (6) of section 1400N(d) of such Code is amended by adding at the end the following new subparagraph:
Exception for bonus depreciation property under section 168(k)
The term specified Gulf Opportunity
Zone extension property
shall not include any property to which section
168(k)
applies.
.
The heading for subsection (k) of section 168 of such Code is amended—
by striking
September 10,
2001
and inserting December 31, 2007
,
and
by striking
January 1,
2005
and inserting January 1, 2009
.
The heading for
clause (ii) of section 168(k)(2)(B) of such Code is amended by striking
pre-January 1,
2005
and inserting pre-January 1, 2009
.
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.
Housing GSE and FHA Loan Limits
Temporary conforming loan limit increase for Fannie Mae and Freddie Mac
Increase of high cost areas limits for housing GSEs
For mortgages originated during the period beginning on July 1, 2007, and ending at the end of December 31, 2008:
Fannie Mae
With respect to the Federal National Mortgage Association, notwithstanding section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Association shall be the higher of—
the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size; or
125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation for 2008 determined under such section 302(b)(2) for a residence of the applicable size.
Freddie Mac
With respect to the Federal Home Loan Mortgage Corporation, notwithstanding section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)), the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Corporation shall be the higher of—
the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size; or
125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size.
Determination of limits
The areas and area median prices used for purposes of the determinations under subsection (a) shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 202 of this title.
Rule of construction
A mortgage originated during the period referred to in subsection (a) that is eligible for purchase by the Federal National Mortgage Association or the Federal Home Loan Mortgage Corporation pursuant to this section shall be eligible for such purchase for the duration of the term of the mortgage, notwithstanding that such purchase occurs after the expiration of such period.
Effect on housing goals
Notwithstanding any other provision of law, mortgages purchased in accordance with the increased maximum original principal obligation limitations determined pursuant to this section shall not be considered in determining performance with respect to any of the housing goals established under section 1332, 1333, or 1334 of the Housing and Community Development Act of 1992 (12 U.S.C. 4562–4), and shall not be considered in determining compliance with such goals pursuant to section 1336 of such Act (12 U.S.C. 4566) and regulations, orders, or guidelines issued thereunder.
Sense of Congress
It is the sense of the Congress that the securitization of mortgages by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation plays an important role in providing liquidity to the United States housing markets. Therefore, the Congress encourages the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to securitize mortgages acquired under the increased conforming loan limits established in this section, to the extent that such securitizations can be effected in a timely and efficient manner that does not impose additional costs for mortgages originated, purchased, or securitized under the existing limits or interfere with the goal of adding liquidity to the market.
Temporary loan limit increase for FHA
Increase of high-cost area limit
For mortgages for which the mortgagee has issued credit approval for the borrower on or before December 31, 2008, subparagraph (A) of section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)(A)) shall be considered (except for purposes of section 255(g) of such Act (12 U.S.C. 1715z–20(g))) to require that a mortgage shall involve a principal obligation in an amount that does not exceed the lesser of—
in the case of a 1-family residence, 125 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 determined for 2008 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 determined for 2008 under such section for a 1-family residence; or
175 percent of the dollar amount limitation determined for 2008 under such section 305(a)(2) for a residence of the applicable size (without regard to any authority to increase such limitation with respect to properties located in Alaska, Guam, Hawaii, or the Virgin Islands);
Discretionary authority
If the Secretary of Housing and Urban Development determines that market conditions warrant such an increase, the Secretary may, for the period that begins upon the date of the enactment of this Act and ends at the end of the date specified in subsection (a), increase the maximum dollar amount limitation determined pursuant to subsection (a) with respect to any particular size or sizes of residences, or with respect to residences located in any particular area or areas, to an amount that does not exceed the maximum dollar amount then otherwise in effect pursuant to subsection (a) for such size residence, or for such area (if applicable), by not more than $100,000.
Publication of area median prices and loan limits
The Secretary of Housing and Urban Development shall publish the median house prices and mortgage principal obligation limits, as revised pursuant to this section, for all areas as soon as practicable, but in no case more than 30 days after the date of the enactment of this Act. With respect to existing areas for which the Secretary has not established area median prices before such date of enactment, the Secretary may rely on existing commercial data in determining area median prices and calculating such revised principal obligation limits.
Passed the House of Representatives January 29, 2008.
Lorraine C. Miller,
Clerk.
