II
117th CONGRESS
2d Session
S. 4445
IN THE SENATE OF THE UNITED STATES
June 22, 2022
Ms. Cortez Masto introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to expand housing investment with mortgage revenue bonds, and for other purposes.
Short title; table of contents
Short title
This Act may be cited as the Affordable Housing Bond Enhancement Act
.
Amendment of 1986 Code
Except as otherwise expressly provided, whenever in this Act 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.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Reporting requirements for bond usage.
Sec. 3. Use of carryforward bond authority.
Sec. 4. Elimination of refinancing limitation for mortgage revenue bonds.
Sec. 5. Increase in financing limit for qualified home improvement loans.
Sec. 6. Revision of recapture tax for mortgage revenue bonds.
Sec. 7. Modifying calculation of credit for interest paid on certified indebtedness.
Sec. 8. Extension of period for mortgage credit certificate to be in effect.
Sec. 9. Extension of period to revoke election to issue mortgage credit certificates.
Sec. 10. Adjustment of public notice requirement.
Sec. 11. Elimination of reporting requirement.
Reporting requirements for bond usage
In general
Section 146 is amended by adding at the end the following:
Reporting
Not later than April 1 of each calendar year, the Secretary shall submit a report to the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Financial Services of the House of Representatives, the Committee on Ways and Means of the House of Representatives, and the Committee on Finance of the Senate, containing information, as provided to the Secretary by State and local issuing authorities, which specifies for each State—
the purposes for which any State ceiling and carryforward under subsection (f) applicable to such State for the preceding calendar year was used, and
the total amount of—
any excess amounts described in paragraph (1) of subsection (f) for which the issuing authority did not elect to treat as a carryforward under such subsection, and
any amount of any carryforward under such subsection which expired pursuant to paragraph (3)(A) of such subsection.
.
Effective date
The amendment made by this section shall apply to calendar years beginning after the date of enactment of this Act.
Use of carryforward bond authority
In general
Paragraph (3) of section 146(f) is amended—
by striking subparagraph (A) and inserting the following:
In general
If any issuing authority—
elects a carryforward under paragraph (1) with respect to any carryforward purpose,
receives a carryforward under paragraph (4)(B)(i) with respect to any carryforward purpose, or
redesignates a carryforward under paragraph (4)(B)(ii) for any carryforward purpose,
, and
in subparagraph (B), by inserting , or received or redesignated for,
after with respect to
.
Election
Paragraph (4) of section 146(f) is amended to read as follows:
Election
In general
Except as provided in subparagraph (B), any election under this subsection (and any identification or specification contained therein), once made, shall be irrevocable.
Exception for housing
Transfer
In the case of any carryforward elected under paragraph (1) by an issuing authority with respect to any carryforward purpose, during the period described in paragraph (3)(A) with respect to such carryforward, such issuing authority may transfer such carryforward to any issuing authority within the same State that is authorized to issue qualified mortgage bonds or exempt facility bonds described in section 142(a)(7).
Redesignation
In the case of any carryforward—
elected under paragraph (1) by an issuing authority with respect to any carryforward purpose which has not been transferred pursuant to clause (i), or
received by an issuing authority pursuant to clause (i) with respect to any carryforward purpose,
State direction
In the case of a State which has enacted a law described in subsection (e)(1), such State may, by law, prohibit, limit, require, or otherwise direct transfer or redesignation by issuing authorities within such State (except in the case of a constitutional home rule city) pursuant to this subparagraph.
.
Effective date
The amendments made by this section shall apply to elections made under section 146(f) of the Internal Revenue Code of 1986 after December 31, 2022.
Elimination of refinancing limitation for mortgage revenue bonds
In general
Section 143(i)(1) is amended by adding at the end the following:
Exception for refinancing for certain mortgagors
In general
The refinancing of a mortgage on a residence of a mortgagor who, as of the date of such refinancing, satisfies the principal residence requirements under subsection (c)(1) and the income requirements under subsection (f) shall not be treated as the acquisition or replacement of an existing mortgage for purposes of subparagraph (A).
Special rule
In applying clause (i) to any refinancing, subsection (d) shall not apply.
.
Effective date
The amendment made by this section shall apply to refinancing loans closed on or after the date of enactment of this Act.
Increase in financing limit for qualified home improvement loans
Increase in financing limit
Paragraph (4) of section 143(k) is amended by striking $15,000
and inserting $50,000
.
Inflation adjustment
Paragraph (4) of section 143(k), as amended by subsection (a), is amended—
by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and by moving such clauses (as so redesignated) 2 ems to the right,
by striking The term
and inserting the following:
In general
The term
, and
by adding at the end the following:
Inflation adjustment
In general
In the case of any calendar year beginning after 2022, the $50,000 amount in subparagraph (A) shall be increased by an amount equal to—
such dollar amount, multiplied by
the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting 2021
for 2016
in subparagraph (A)(ii) thereof.
Rounding
If any increase under clause (i) is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.
.
Effective dates
Increase in financing limit
The amendments made by subsection (a) shall apply to loans made on or after the date of enactment of this Act.
Inflation adjustment
The amendments made by subsection (b) shall apply to calendar years beginning after December 31, 2022.
Revision of recapture tax for mortgage revenue bonds
In general
Subparagraph (C) of section 143(m)(4) is amended to read as follows:
Holding period percentage
The term holding period percentage means the percentage determined in accordance with the following table:
| If the disposition occurs during a year after the testing date which is: | The holding period percentage is: |
| The 1st such year | 20 |
| The 2nd such year | 40 |
| The 3rd such year | 60 |
| The 4th such year | 80 |
| The 5th such year | 100. |
.
Conforming amendment
Section 143(m)(7)(B)(ii) is amended by striking 9-year period
and inserting 5-year period
.
Effective date
The amendments made by this section shall apply to taxable years beginning after December 31, 2021.
Modifying calculation of credit for interest paid on certified indebtedness
In general
Section 25 is amended—
in subsection (a)—
in paragraph (1), by striking subparagraph (B) and inserting the following:
the original principal amount of the certified indebtedness amount on which interest was paid or accrued by the taxpayer during the taxable year.
, and
in paragraph (2)—
in the heading, by striking where credit rate exceeds 20 percent
, and
in subparagraph (A), by striking If the certificate credit rate exceeds 20 percent, the
and inserting The
, and
in subsection (d)—
by striking paragraph (1) and inserting the following:
In general
Certificate credit rate
Subject to subparagraph (B), the certificate credit rate specified in any mortgage credit certificate shall not be less than 1 percent or more than 5 percent.
Variable rate
With respect to any mortgage credit certificate, the issuing authority may elect to specify a different certificate credit rate for each year of the term of the mortgage.
, and
in paragraph (2)—
in the heading, by striking certificate credit rates
and inserting amount of credit certificates
, and
in subparagraph (A)(ii), by inserting average annual
before certificate credit rate
.
Effective date
The amendments made by this section shall apply to mortgage credit certificates issued after December 31, 2021.
Extension of period for mortgage credit certificate to be in effect
In general
Section 25(e)(3)(B) is amended by striking second
and inserting fourth
.
Effective date
The amendments made by this section shall apply to mortgage credit certificates issued after December 31, 2022.
Extension of period to revoke election to issue mortgage credit certificates
In general
Section 25(c)(2) is amended by adding at the end the following:
Revocation of election to issue mortgage credit certificates
For purposes of any election made by an issuing authority under subparagraph (A)(ii) during any calendar year, such issuing authority may subsequently elect to reduce the nonissued bond amount (as defined in subsection (d)(2)(B)) for such calendar year, provided that such election is made not later than the end of the succeeding calendar year.
.
Effective date
The amendment made by this section shall apply to elections made by an issuing authority under section 25(c)(2)(A)(ii) of the Internal Revenue Code of 1986 after December 31, 2022.
Adjustment of public notice requirement
In general
Section 25(e)(5) is amended by striking 90 days
and inserting 30 days
.
Effective date
The amendments made by this section shall apply to notices provided after December 31, 2022.
Elimination of reporting requirement
In general
Section 25 is amended by striking subsection (g).
Conforming amendments
Section 6709 is amended—
by striking subsection (c), and
by redesignating subsection (d) as subsection (c).
Effective date
The amendments made by this section shall take effect on the date of enactment of this Act.
