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[Congressional Bills 110th Congress]
[From the U.S. Government Printing Office]
[H.R. 5140 Enrolled Bill (ENR)]

        H.R.5140

                       One Hundred Tenth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

          Begun and held at the City of Washington on Thursday,
            the third day of January, two thousand and eight


                                 An Act


 
 To provide economic stimulus through recovery rebates to individuals, 
 incentives for business investment, and an increase in conforming and 
                            FHA loan limits.

    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 ``Economic Stimulus 
Act of 2008''.
    (b) 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.

                    TITLE III--EMERGENCY DESIGNATION

Sec. 301. Emergency designation.

    TITLE I--RECOVERY REBATES AND INCENTIVES FOR BUSINESS INVESTMENT

SEC. 101. 2008 RECOVERY REBATES FOR INDIVIDUALS.

    (a) In General.--Section 6428 of the Internal Revenue Code of 1986 
is amended to read as follows:

``SEC. 6428. 2008 RECOVERY REBATES FOR INDIVIDUALS.

    ``(a) 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--
        ``(1) net income tax liability, or
        ``(2) $600 ($1,200 in the case of a joint return).
    ``(b) Special Rules.--
        ``(1) In general.--In the case of a taxpayer described in 
    paragraph (2)--
            ``(A) the amount determined under subsection (a) shall not 
        be less than $300 ($600 in the case of a joint return), and
            ``(B) 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.
        ``(2) Taxpayer described.--A taxpayer is described in this 
    paragraph if the taxpayer--
            ``(A) has qualifying income of at least $3,000, or
            ``(B) has--
                ``(i) net income tax liability which is greater than 
            zero, and
                ``(ii) 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).
    ``(c) 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.
    ``(d) 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).
    ``(e) Definitions.--For purposes of this section--
        ``(1) Qualifying income.--The term `qualifying income' means--
            ``(A) earned income,
            ``(B) social security benefits (within the meaning of 
        section 86(d)), and
            ``(C) any compensation or pension received under chapter 
        11, chapter 13, or chapter 15 of title 38, United States Code.
        ``(2) Net income tax liability.--The term `net income tax 
    liability' means the excess of--
            ``(A) 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
            ``(B) the credits allowed by part IV (other than section 24 
        and subpart C thereof) of subchapter A of chapter 1.
        ``(3) Eligible individual.--The term `eligible individual' 
    means any individual other than--
            ``(A) any nonresident alien individual,
            ``(B) 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
            ``(C) an estate or trust.
        ``(4) Earned income.--The term `earned income' has the meaning 
    set forth in section 32(c)(2) except that--
            ``(A) subclause (II) of subparagraph (B)(vi) thereof shall 
        be applied by substituting `January 1, 2009' for `January 1, 
        2008', and
            ``(B) such term shall not include net earnings from self-
        employment which are not taken into account in computing 
        taxable income.
        ``(5) 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).
    ``(f) Coordination With Advance Refunds of Credit.--
        ``(1) 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).
        ``(2) 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.
    ``(g) Advance Refunds and Credits.--
        ``(1) 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.
        ``(2) 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.
        ``(3) 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.
        ``(4) No interest.--No interest shall be allowed on any 
    overpayment attributable to this section.
    ``(h) Identification Number Requirement.--
        ``(1) In general.--No credit shall be allowed under subsection 
    (a) to an eligible individual who does not include on the return of 
    tax for the taxable year--
            ``(A) such individual's valid identification number,
            ``(B) in the case of a joint return, the valid 
        identification number of such individual's spouse, and
            ``(C) in the case of any qualifying child taken into 
        account under subsection (b)(1)(B), the valid identification 
        number of such qualifying child.
        ``(2) Valid identification number.--For purposes of paragraph 
    (1), the term `valid identification number' means a social security 
    number issued to an individual by the Social Security 
    Administration. Such term shall not include a TIN issued by the 
    Internal Revenue Service.''.
    (b) Administrative Amendments.--
        (1) Definition of deficiency.--Section 6211(b)(4)(A) of the 
    Internal Revenue Code of 1986 is amended by striking ``and 53(e)'' 
    and inserting ``53(e), and 6428''.
        (2) Mathematical or clerical error authority.--Section 
    6213(g)(2)(L) of such Code is amended by striking ``or 32'' and 
    inserting ``32, or 6428''.
    (c) Treatment of Possessions.--
        (1) Payments to possessions.--
            (A) 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.
            (B) 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.
        (2) Coordination with credit allowed against united states 
    income taxes.--No credit shall be allowed against United States 
    income taxes under section 6428 of the Internal Revenue Code of 
    1986 (as amended by this section) to any person--
            (A) to whom a credit is allowed against taxes imposed by 
        the possession by reason of the amendments made by this 
        section, or
            (B) who is eligible for a payment under a plan described in 
        paragraph (1)(B).
        (3) Definitions and special rules.--
            (A) 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.
            (B) 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.
            (C) 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 amended by this section).
    (d) Refunds Disregarded in the Administration of Federal Programs 
and Federally Assisted Programs.--Any credit or refund allowed or made 
to any individual by reason of section 6428 of the Internal Revenue 
Code of 1986 (as amended by this section) or by reason of subsection 
(c) of this section shall not be taken into account as income and shall 
not be taken into account as resources for the month of receipt and the 
following 2 months, for purposes of determining the eligibility of such 
individual or any other individual for benefits or assistance, or the 
amount or extent of benefits or assistance, under any Federal program 
or under any State or local program financed in whole or in part with 
Federal funds.
    (e) Appropriations To Carry Out Rebates.--
        (1) In general.--Immediately upon the enactment of this Act, 
    the following sums are appropriated, out of any money in the 
    Treasury not otherwise appropriated, for the fiscal year ending 
    September 30, 2008:
            (A) Department of the treasury.--
                (i) For an additional amount for ``Department of the 
            Treasury--Financial Management Service--Salaries and 
            Expenses'', $64,175,000, to remain available until 
            September 30, 2009.
                (ii) For an additional amount for ``Department of the 
            Treasury--Internal Revenue Service--Taxpayer Services'', 
            $50,720,000, to remain available until September 30, 2009.
                (iii) For an additional amount for ``Department of the 
            Treasury--Internal Revenue Service--Operations Support'', 
            $151,415,000, to remain available until September 30, 2009.
            (B) Social security administration.--For an additional 
        amount for ``Social Security Administration--Limitation on 
        Administrative Expenses'', $31,000,000, to remain available 
        until September 30, 2008.
        (2) 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 
    paragraph (1)(A). 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 paragraph (1)(A) and the expected expenditure of such funds in 
    the subsequent quarter.
    (f) Conforming Amendments.--
        (1) Paragraph (2) of section 1324(b) of title 31, United States 
    Code, is amended by inserting ``or 6428'' after ``section 35''.
        (2) Paragraph (1) of section 1(i) of the Internal Revenue Code 
    of 1986 is amended by striking subparagraph (D).
        (3) 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.''.

SEC. 102. TEMPORARY INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN 
              DEPRECIABLE BUSINESS ASSETS.

    (a) 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:
        ``(7) Increase in limitations for 2008.--In the case of any 
    taxable year 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 section shall apply 
to taxable years beginning after December 31, 2007.

SEC. 103. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED DURING 2008.

    (a) 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--
        (1) by striking ``September 10, 2001'' each place it appears 
    and inserting ``December 31, 2007'',
        (2) by striking ``September 11, 2001'' each place it appears 
    and inserting ``January 1, 2008'',
        (3) by striking ``January 1, 2005'' each place it appears and 
    inserting ``January 1, 2009'', and
        (4) by striking ``January 1, 2006'' each place it appears and 
    inserting ``January 1, 2010''.
    (b) 50 Percent Allowance.--Subparagraph (A) of section 168(k)(1) of 
such Code is amended by striking ``30 percent'' and inserting ``50 
percent''.
    (c) Conforming Amendments.--
        (1) Subclause (I) of section 168(k)(2)(B)(i) of such Code is 
    amended by striking ``and (iii)'' and inserting ``(iii), and 
    (iv)''.
        (2) Subclause (IV) of section 168(k)(2)(B)(i) of such Code is 
    amended by striking ``clauses (ii) and (iii)'' and inserting 
    ``clause (iii)''.
        (3) Clause (i) of section 168(k)(2)(C) of such Code is amended 
    by striking ``and (iii)'' and inserting ``, (iii), and (iv)''.
        (4) Clause (i) of section 168(k)(2)(F) of such Code is amended 
    by striking ``$4,600'' and inserting ``$8,000''.
        (5)(A) Subsection (k) of section 168 of such Code is amended by 
    striking paragraph (4).
        (B) Clause (iii) of section 168(k)(2)(D) of such Code is 
    amended by striking the last sentence.
        (6) 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:
            ``(A) Bonus depreciation property under subsection (k).--
        Such term shall not include any property to which section 
        168(k) applies.''.
        (7) Paragraph (5) of section 168(l) of such Code is amended--
            (A) by striking ``September 10, 2001'' in subparagraph (A) 
        and inserting ``December 31, 2007'', and
            (B) by striking ``January 1, 2005'' in subparagraph (B) and 
        inserting ``January 1, 2009''.
        (8) Subparagraph (D) of section 1400L(b)(2) of such Code is 
    amended by striking ``January 1, 2005'' and inserting ``January 1, 
    2010''.
        (9) Paragraph (3) of section 1400N(d) of such Code is amended--
            (A) by striking ``September 10, 2001'' in subparagraph (A) 
        and inserting ``December 31, 2007'', and
            (B) by striking ``January 1, 2005'' in subparagraph (B) and 
        inserting ``January 1, 2009''.
        (10) Paragraph (6) of section 1400N(d) of such Code is amended 
    by adding at the end the following new subparagraph:
            ``(E) 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.''.
        (11) The heading for subsection (k) of section 168 of such Code 
    is amended--
            (A) by striking ``September 10, 2001'' and inserting 
        ``December 31, 2007'', and
            (B) by striking ``January 1, 2005'' and inserting ``January 
        1, 2009''.
        (12) 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''.
    (d) 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.

               TITLE II--HOUSING GSE AND FHA LOAN LIMITS

SEC. 201. TEMPORARY CONFORMING LOAN LIMIT INCREASE FOR FANNIE MAE AND 
              FREDDIE MAC.

    (a) 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:
        (1) 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--
            (A) the limitation for 2008 determined under such section 
        302(b)(2) for a residence of the applicable size; or
            (B) 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.
        (2) 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--
            (A) the limitation determined for 2008 under such section 
        305(a)(2) for a residence of the applicable size; or
            (B) 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.
    (b) 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.
    (c) 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.
    (d) 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.
    (e) 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.

SEC. 202. TEMPORARY LOAN LIMIT INCREASE FOR FHA.

    (a) 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--
        (1) 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
        (2) 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);
except that the dollar amount limitation in effect under this 
subsection for any size residence for any area shall not be less than 
the greater of: (A) the dollar amount limitation in effect under such 
section 203(b)(2) for the area on October 21, 1998; or (B) 65 percent 
of the dollar amount limitation determined for 2008 under such section 
305(a)(2) for a residence of the applicable size. Any reference in this 
subsection to dollar amount limitations in effect under section 
305(a)(2) of the Federal Home Loan Mortgage Corporation Act means such 
limitations as in effect without regard to any increase in such 
limitation pursuant to section 201 of this title.
    (b) 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.
    (c) 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.

                    TITLE III--EMERGENCY DESIGNATION

SEC. 301. 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.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.