SECTION 1. REPEAL OF RECAPTURE BOND RULE.

    (a) In General.--Paragraph (6) of section 42(j) of the Internal 
Revenue Code of 1986 (relating to recapture of credit) is amended to 
read as follows:
            ``(6) No recapture on disposition of building (or interest 
        therein) reasonably expected to continue as a qualified low-
        income building.--
                    ``(A) In general.--In the case of a disposition of 
                a building or an interest therein, the taxpayer shall 
                be discharged from liability for any additional tax 
                under this subsection by reason of such disposition if 
                it is reasonably expected that such building will 
                continue to be operated as a qualified low-income 
                building for the remaining compliance period with 
                respect to such building.
                    ``(B) Statute of limitations.--
                            ``(i) Extension of period.--The period for 
                        assessing a deficiency attributable to the 
                        application of subparagraph (A) with respect to 
                        a building (or interest therein) during the 
                        compliance period with respect to such building 
                        shall not expire before the expiration of 3 
                        years after the end of such compliance period.
                            ``(ii) Assessment.--Such deficiency may be 
                        assessed before the expiration of the 3-year 
                        period referred to in clause (i) 
                        notwithstanding the provisions of any other law 
                        or rule of law which would otherwise prevent 
                        such assessment.''.
    (b) Information Reporting.--
            (1) In general.--Subpart B of part III of subchapter A of 
        chapter 61 of such Code (relating to information concerning 
        transactions with other persons) is amended by inserting after 
        section 6050T the following new section:

``SEC. 6050U. RETURNS RELATING TO PAYMENT OF LOW-INCOME HOUSING CREDIT 
              REPAYMENT AMOUNT.

    ``(a) Requirement of Reporting.--Every person who, at any time 
during the taxable year, is an owner of a building (or an interest 
therein)--
            ``(1) which is in the compliance period at any time during 
        such year, and
            ``(2) with respect to which recapture is required by 
        section 42(j),
shall, at such time as the Secretary may prescribe, make the return 
described in subsection (b).
    ``(b) Form and Manner of Returns.--A return is described in this 
subsection if such return--
            ``(1) is in such form as the Secretary may prescribe, and
            ``(2) contains--
                    ``(A) the name, address, and TIN of each person 
                who, with respect to such building or interest, was 
                formerly an investor in such owner at any time during 
                the compliance period,
                    ``(B) the amount (if any) of any credit recapture 
                amount required under section 42(j), and
                    ``(C) such other information as the Secretary may 
                prescribe.
    ``(c) Statements To Be Furnished to Persons With Respect to Whom 
Information Is Required.--Every person required to make a return under 
subsection (a) shall furnish to each person whose name is required to 
be set forth in such return a written statement showing--
            ``(1) the name and address of the person required to make 
        such return and the phone number of the information contact for 
        such person, and
            ``(2) the information required to be shown on the return 
        with respect to such person.
The written statement required under the preceding sentence shall be 
furnished on or before March 31 of the year following the calendar year 
for which the return under subsection (a) is required to be made.
    ``(d) Compliance Period.--For purposes of this section, the term 
`compliance period' has the meaning given such term by section 
42(i).''.
            (2) Assessable penalties.--
                    (A) Subparagraph (B) of section 6724(d)(1) of such 
                Code (relating to definitions) is amended by 
                redesignating clauses (xiii) through (xviii) as clauses 
                (xiv) through (xix), respectively, and by inserting 
                after clause (xii) the following new clause:
                            ``(xiii) section 6050U (relating to returns 
                        relating to payment of low-income housing 
                        credit repayment amount),''.
                    (B) Paragraph (2) of section 6724(d) of such Code 
                is amended by striking ``or'' at the end of 
                subparagraph (AA), by striking the period at the end of 
                subparagraph (BB) and inserting ``, or'', and by adding 
                after subparagraph (BB) the following new subparagraph:
                    ``(CC) section 6050U (relating to returns relating 
                to payment of low-income housing credit repayment 
                amount).''.
                    (C) Clerical amendment.--The table of sections for 
                subpart B of part III of subchapter A of chapter 61 of 
                such Code is amended by inserting after the item 
                relating to section 6050T the following new item:

        ``Sec.  6050U. Returns relating to payment of low-income 
                            housing credit repayment amount.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply with respect to any liability for the credit recapture 
        amount under section 42(j) of the Internal Revenue Code of 1986 
        that arises after the date of the enactment of this Act.
            (2) Special rule for low-income housing buildings sold 
        before date of enactment of this act.--In the case of a 
        building disposed of before the date of the enactment of this 
        Act with respect to which the taxpayer posted a bond (or 
        alternative form of security) under section 42(j) of the 
        Internal Revenue Code of 1986 (as in effect before the 
        enactment of this Act), the taxpayer may elect (by notifying 
        the Secretary of the Treasury in writing)--
                    (A) to cease to be subject to the bond requirements 
                under section 42(j)(6) of such Code, as in effect 
                before the enactment of this Act, and
                    (B) to be subject to the requirements of section 
                42(j) of such Code, as amended by this Act.
Amends the Internal Revenue Code to repeal provisions of the low income housing tax credit requiring a bond to cover recapture amounts from the disposition, prior to a 15-year compliance period, of a building (or interest therein) eligible for the credit. Provides for a three-year statute of limitation (from the end of the compliance period) for assessing a recapture deficiency.

Requires owners of buildings eligible for the low income housing tax credit to file informational returns with the Secretary of the Treasury upon the occurrence of a recapture event and to provide persons who are named in such returns with specified information. Imposes penalties for failure to file required returns.
A bill to amend the Internal Revenue Code of 1986 to replace the recapture bond provisions of the low income housing tax credit program.