[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1511 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 1511
To amend the Internal Revenue Code of 1986 to expand housing investment
with mortgage revenue bonds, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 29, 2025
Ms. Cortez Masto (for herself and Mr. Cassidy) 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.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
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. 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 lender reporting requirement.
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 December 31 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 State ceiling of the State for the preceding
calendar year,
``(2) the aggregate amount of carryforwards available to
all issuing authorities in the State available as of the first
day of such preceding calendar year,
``(3) the total bond authority for such State for such
preceding calendar year, as represented by the sum of the
amounts reported under paragraphs (1) and (2),
``(4) the aggregate amount of private activity bonds issued
by issuing authorities in the State during such preceding
calendar year for each purpose described in subsection (f)(5),
including--
``(A) the amount of such bonds that were subject to
the volume cap, and
``(B) the amount of such bonds that were issued
pursuant to a carryforward under subsection (f),
``(5) the aggregate amount of carryforwards described in
paragraph (2) that expired after the last day of the preceding
calendar year, and
``(6) total amount of any excess amounts described in
paragraph (1) of subsection (f) for the preceding calendar year
which issuing authorities in the State did not elect to treat
as a carryforward under such subsection.''.
(b) Electronic Reports by Issuers.--Section 149(e) is amended by
adding at the end the following new paragraph:
``(4) Electronic reporting.--Any statement required under
paragraph (2) shall be submitted electronically.''.
(c) Authority to Disclose Information.--Section 6103(f) is amended
by adding at the end the following new paragraph:
``(6) Volume cap reporting.--The Secretary may disclose to
the committees described in section 146(o) the information
required under such section.''.
(d) 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,
any private activity bonds issued by such authority
with respect to such purpose at any time during the 3
calendar years following the calendar year in which the
carryforward arose shall not be taken into account
under subsection (a) to the extent the amount of such
bonds issued at or prior to such time does not exceed
the amount of the carryforward elected, received, or
redesignated for such purpose, as reduced by any amount
subsequently transferred to another issuing authority
or redesignated for another purpose pursuant to
paragraph (4)(B).'', and
(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,
during the period described in paragraph (3)(A)
with respect to such carryforward, such issuing
authority may redesignate such carryforward to
be for the purpose of issuing qualified
mortgage bonds or mortgage credit certificates,
or for the purpose of issuing exempt facility
bonds described in section 142(a)(7).
``(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, 2025.
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--
``(I) subsection (d) shall not
apply, and
``(II) subsection (e) shall be
applied by using the market value of
the residence at the time of
refinancing in lieu of the acquisition
cost.''.
(b) Effective Date.--The amendment made by this section shall apply
to refinancing loans made 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 ``$75,000''.
(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'', and
(3) by adding at the end the following:
``(B) Inflation adjustment.--
``(i) In general.--In the case of any
calendar year beginning after 2026, the $75,000
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 `2024' 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.--The amendments made by this section shall
apply to loans made after the last day of the calendar year which
includes the date of the enactment of this Act.
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.--
``(i) In general.--The term `holding period
percentage' means the percentage determined in
accordance with the following table:
``If the disposition occurs during The holding period percentage is:
a year after the testing
date which 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
``(ii) Retirements of indebtedness.--If the
Federally-subsidized indebtedness is completely
repaid during any year of the 4-year period
beginning on the testing date, the holding
period percentage for succeeding years shall be
zero.''.
(b) Conforming Amendments.--
(1) Section 143(m)(2)(B) is amended by striking ``9 years''
and inserting ``5 years''.
(2) 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, 2025.
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 certified indebtedness amount on which
interest was paid or accrued by the taxpayer during the
taxable year.'', and
(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.--The certificate
credit rate specified in any mortgage credit
certificate shall not be less than 1 percent or more
than 5 percent.
``(B) Annual rate.--With respect to any mortgage
credit certificate, the issuing authority may elect to
specify a different annual certificate credit rate for
each year of the term of the mortgage.'', and
(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 on or after the first day
of the second calendar year that begins after the date of the enactment
of this Act.
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 with respect to which the
limitation under section 25(d)(2)(A) of the Internal Revenue Code of
1986 is determined by reference to nonissued bond amounts (a defined in
section 25(d)(2)(B) of such Code) relating to calendar years after
December 31, 2025.
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.--
``(i) In general.--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.
``(ii) Coordination with private activity
bond carryforward limitation.--Under rules
established by the Secretary, nothing in clause
(i) shall be construed to permit an issuing
authority to issue bonds under section
146(f)(3) for a calendar year after the close
of the period prescribed for issuing such bonds
under such section.''.
(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, 2025.
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, 2025.
SEC. 11. ELIMINATION OF LENDER REPORTING REQUIREMENT.
(a) In General.--Section 25(g) is amended--
(1) by striking ``each person who makes a loan which is a
certified indebtedness amount under any mortgage credit
certificate'' and inserting ``each person who issues a mortgage
credit certificate'', and
(2) by striking the second sentence thereof.
(b) Conforming Amendments.--Section 6709(c) is amended by striking
``In the case of any report required under the second sentence of
section 25(g), the'' and inserting ``The''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of enactment of this Act.
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