S. 4445 (Introduced in Senate) — Affordable Housing Bond Enhancement Act

Section 1 Short title; table of contents

(a)

Short title— This Act may be cited as the “Affordable Housing Bond Enhancement Act”.

(b)

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.

(c)

Table of contents— The table of contents for this Act is as follows:

Sec. 2 Reporting requirements for bond usage

(a)

In general— Section 146 is amended by adding at the end the following:

“(o) 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—

“(1) the purposes for which any State ceiling and carryforward under subsection (f) applicable to such State for the preceding calendar year was used, and

“(2) the total amount of—

“(A) 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

“(B) any amount of any carryforward under such subsection which expired pursuant to paragraph (3)(A) of such subsection.”

(b)

Effective date— The amendment made by this section shall apply to calendar years beginning after the date of enactment of this Act.

Sec. 3 Use of carryforward bond authority

(a)

In general— Paragraph (3) of section 146(f) is amended—

(1)

by striking subparagraph (A) and inserting the following:

“(A) In general—If any issuing authority—

“(i) elects a carryforward under paragraph (1) with respect to any carryforward purpose,

“(ii) receives a carryforward under paragraph (4)(B)(i) with respect to any carryforward purpose, or

“(iii) redesignates a carryforward under paragraph (4)(B)(ii) for any carryforward purpose,”

(2)

in subparagraph (B), by inserting “, or received or redesignated for,” after “with respect to”.

(b)

Election— Paragraph (4) of section 146(f) is amended to read as follows:

“(4) Election

“(A) 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.

“(B) Exception for housing

“(i) 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).

“(ii) Redesignation—In the case of any carryforward—

“(I) elected under paragraph (1) by an issuing authority with respect to any carryforward purpose which has not been transferred pursuant to clause (i), or

“(II) received by an issuing authority pursuant to clause (i) with respect to any carryforward purpose,

“(iii) 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.”

(c)

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.

Sec. 4 Elimination of refinancing limitation for mortgage revenue bonds

(a)

In general— Section 143(i)(1) is amended by adding at the end the following:

“(D) Exception for refinancing for certain mortgagors

“(i) 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).

“(ii) Special rule—In applying clause (i) to any refinancing, subsection (d) shall not apply.”

(b)

Effective date— The amendment made by this section shall apply to refinancing loans closed on or after the date of enactment of this Act.

Sec. 5 Increase in financing limit for qualified home improvement loans

(a)

Increase in financing limit— Paragraph (4) of section 143(k) is amended by striking “$15,000” and inserting “$50,000”.

(b)

Inflation adjustment— Paragraph (4) of section 143(k), as amended by subsection (a), is amended—

(1)

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,

(2)

by striking “The term” and inserting the following:

“(A) In general—The term”

(3)

by adding at the end the following:

“(B) Inflation adjustment

“(i) 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—

“(I) such dollar amount, multiplied by

“(II) 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.

“(ii) Rounding—If any increase under clause (i) is not a multiple of $100, such increase shall be rounded to the nearest multiple of $100.”

(c)

Effective dates—

(1)

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.

(2)

Inflation adjustment— The amendments made by subsection (b) shall apply to calendar years beginning after December 31, 2022.

Sec. 6 Revision of recapture tax for mortgage revenue bonds

(a)

In general— Subparagraph (C) of section 143(m)(4) is amended to read as follows:

“(C) Holding period percentage—The term holding period percentage means the percentage determined in accordance with the following table:”

(b)

Conforming amendment— Section 143(m)(7)(B)(ii) is amended by striking “9-year period” and inserting “5-year period”.

(c)

Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2021.

Sec. 7 Modifying calculation of credit for interest paid on certified indebtedness

(a)

In general— Section 25 is amended—

(1)

in subsection (a)—

(A)

in paragraph (1), by striking subparagraph (B) and inserting the following:

“(B) the original principal amount of the certified indebtedness amount on which interest was paid or accrued by the taxpayer during the taxable year.”

(B)

in paragraph (2)—

(i)

in the heading, by striking “where credit rate exceeds 20 percent”, and

(ii)

in subparagraph (A), by striking “If the certificate credit rate exceeds 20 percent, the” and inserting “The”, and

(2)

in subsection (d)—

(A)

by striking paragraph (1) and inserting the following:

“(1) In general

“(A) 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.

“(B) 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.”

(B)

in paragraph (2)—

(i)

in the heading, by striking “certificate credit rates” and inserting “amount of credit certificates”, and

(ii)

in subparagraph (A)(ii), by inserting “average annual” before “certificate credit rate”.

(b)

Effective date— The amendments made by this section shall apply to mortgage credit certificates issued after December 31, 2021.

Sec. 8 Extension of period for mortgage credit certificate to be in effect

(a)

In general— Section 25(e)(3)(B) is amended by striking “second” and inserting “fourth”.

(b)

Effective date— The amendments made by this section shall apply to mortgage credit certificates issued after December 31, 2022.

Sec. 9 Extension of period to revoke election to issue mortgage credit certificates

(a)

In general— Section 25(c)(2) is amended by adding at the end the following:

“(C) 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.”

(b)

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.

Sec. 10 Adjustment of public notice requirement

(a)

In general— Section 25(e)(5) is amended by striking “90 days” and inserting “30 days”.

(b)

Effective date— The amendments made by this section shall apply to notices provided after December 31, 2022.

Sec. 11 Elimination of reporting requirement

(a)

In general— Section 25 is amended by striking subsection (g).

(b)

Conforming amendments— Section 6709 is amended—

(1)

by striking subsection (c), and

(2)

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

(c)

Effective date— The amendments made by this section shall take effect on the date of enactment of this Act.

Affordable Housing Bond Enhancement Act