II 

117TH CONGRESS 

2D SESSION S. 4445 

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 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Affordable Housing Bond Enhancement Act’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 


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1 shall be considered to be made to a section or other provi2 sion of the Internal Revenue Code of 1986. 

3 (c) TABLE OF CONTENTS.—The table of contents for 

4 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. 

5 SEC. 2. REPORTING REQUIREMENTS FOR BOND USAGE. 

6 (a) IN GENERAL.—Section 146 is amended by adding 

7 at the end the following: 

8 ‘‘(o) REPORTING.—Not later than April 1 of each cal9 endar year, the Secretary shall submit a report to the 

10 Committee on Banking, Housing, and Urban Affairs of 

11 the Senate, the Committee on Financial Services of the 

12 House of Representatives, the Committee on Ways and 

13 Means of the House of Representatives, and the Com14 mittee on Finance of the Senate, containing information, 

15 as provided to the Secretary by State and local issuing 

16 authorities, which specifies for each State— 

17 ‘‘(1) the purposes for which any State ceiling 

18 and carryforward under subsection (f) applicable to 


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1 such State for the preceding calendar year was used, 

2 and 

3 ‘‘(2) the total amount of— 

4 ‘‘(A) any excess amounts described in 

5 paragraph (1) of subsection (f) for which the 

6 issuing authority did not elect to treat as a 

7 carryforward under such subsection, and 

8 ‘‘(B) any amount of any carryforward 

9 under such subsection which expired pursuant 

10 to paragraph (3)(A) of such subsection.’’. 

11 (b) EFFECTIVE DATE.—The amendment made by 

12 this section shall apply to calendar years beginning after 

13 the date of enactment of this Act. 

14 SEC. 3. USE OF CARRYFORWARD BOND AUTHORITY. 

15 (a) IN GENERAL.—Paragraph (3) of section 146(f) 

16 is amended— 

17 (1) by striking subparagraph (A) and inserting 

18 the following: 

19 ‘‘(A) IN GENERAL.—If any issuing author20 ity— 

21 ‘‘(i) elects a carryforward under para22 graph (1) with respect to any carryforward 

23 purpose, 


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1 ‘‘(ii) receives a carryforward under 

2 paragraph (4)(B)(i) with respect to any 

3 carryforward purpose, or 

4 ‘‘(iii) redesignates a carryforward 

5 under paragraph (4)(B)(ii) for any 

6 carryforward purpose, 

7 any private activity bonds issued by such au8 thority with respect to such purpose at any time 

9 during the 3 calendar years following the cal10 endar year in which the carryforward arose 

11 shall not be taken into account under sub12 section (a) to the extent the amount of such 

13 bonds issued at or prior to such time does not 

14 exceed the amount of the carryforward elected, 

15 received, or redesignated for such purpose, pro16 vided that such amount has not been subse17 quently transferred to another issuing authority 

18 or redesignated for another purpose pursuant to 

19 paragraph (4)(B).’’, and 

20 (2) in subparagraph (B), by inserting ‘‘, or re21 ceived or redesignated for,’’ after ‘‘with respect to’’. 

22 (b) ELECTION.—Paragraph (4) of section 146(f) is 

23 amended to read as follows: 

24 ‘‘(4) ELECTION.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), any election under this sub3 section (and any identification or specification 

4 contained therein), once made, shall be irrev5 ocable. 

6 ‘‘(B) EXCEPTION FOR HOUSING.— 

7 ‘‘(i) TRANSFER.—In the case of any 

8 carryforward elected under paragraph (1) 

9 by an issuing authority with respect to any 

10 carryforward purpose, during the period 

11 described in paragraph (3)(A) with respect 

12 to such carryforward, such issuing author13 ity may transfer such carryforward to any 

14 issuing authority within the same State 

15 that is authorized to issue qualified mort16 gage bonds or exempt facility bonds de17 scribed in section 142(a)(7). 

18 ‘‘(ii) REDESIGNATION.—In the case of 

19 any carryforward— 

20 ‘‘(I) elected under paragraph (1) 

21 by an issuing authority with respect 

22 to any carryforward purpose which 

23 has not been transferred pursuant to 

24 clause (i), or 


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1 ‘‘(II) received by an issuing au2 thority pursuant to clause (i) with re3 spect to any carryforward purpose, 

4 during the period described in paragraph 

5 (3)(A) with respect to such carryforward, 

6 such issuing authority may redesignate 

7 such carryforward to be for the purpose of 

8 issuing qualified mortgage bonds or mort9 gage credit certificates, or for the purpose 

10 of issuing exempt facility bonds described 

11 in section 142(a)(7). 

12 ‘‘(iii) STATE DIRECTION.—In the case 

13 of a State which has enacted a law de14 scribed in subsection (e)(1), such State 

15 may, by law, prohibit, limit, require, or 

16 otherwise direct transfer or redesignation 

17 by issuing authorities within such State 

18 (except in the case of a constitutional 

19 home rule city) pursuant to this subpara20 graph.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to elections made under section 

23 146(f) of the Internal Revenue Code of 1986 after Decem24 ber 31, 2022. 


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1 SEC. 4. ELIMINATION OF REFINANCING LIMITATION FOR 

2 MORTGAGE REVENUE BONDS. 

3 (a) IN GENERAL.—Section 143(i)(1) is amended by 

4 adding at the end the following: 

5 ‘‘(D) EXCEPTION FOR REFINANCING FOR

6 CERTAIN MORTGAGORS.— 

7 ‘‘(i) IN GENERAL.—The refinancing of 

8 a mortgage on a residence of a mortgagor 

9 who, as of the date of such refinancing, 

10 satisfies the principal residence require11 ments under subsection (c)(1) and the in12 come requirements under subsection (f) 

13 shall not be treated as the acquisition or 

14 replacement of an existing mortgage for 

15 purposes of subparagraph (A). 

16 ‘‘(ii) SPECIAL RULE.—In applying 

17 clause (i) to any refinancing, subsection 

18 (d) shall not apply.’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to refinancing loans closed on or 

21 after the date of enactment of this Act. 

22 SEC. 5. INCREASE IN FINANCING LIMIT FOR QUALIFIED 

23 HOME IMPROVEMENT LOANS. 

24 (a) INCREASE IN FINANCING LIMIT.—Paragraph (4) 

25 of section 143(k) is amended by striking ‘‘$15,000’’ and 

26 inserting ‘‘$50,000’’. 


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1 (b) INFLATION ADJUSTMENT.—Paragraph (4) of sec2 tion 143(k), as amended by subsection (a), is amended— 

3 (1) by redesignating subparagraphs (A) and 

4 (B) as clauses (i) and (ii), respectively, and by mov5 ing such clauses (as so redesignated) 2 ems to the 

6 right, 

7 (2) by striking ‘‘The term’’ and inserting the 

8 following: 

9 ‘‘(A) IN GENERAL.—The term’’, and 

10 (3) by adding at the end the following: 

11 ‘‘(B) INFLATION ADJUSTMENT.— 

12 ‘‘(i) IN GENERAL.—In the case of any 

13 calendar year beginning after 2022, the 

14 $50,000 amount in subparagraph (A) shall 

15 be increased by an amount equal to— 

16 ‘‘(I) such dollar amount, multi17 plied by 

18 ‘‘(II) the cost-of-living adjust19 ment determined under section 1(f)(3) 

20 for such calendar year, determined by 

21 substituting ‘2021’ for ‘2016’ in sub22 paragraph (A)(ii) thereof. 

23 ‘‘(ii) ROUNDING.—If any increase 

24 under clause (i) is not a multiple of $100, 


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1 such increase shall be rounded to the near2 est multiple of $100.’’. 

3 (c) EFFECTIVE DATES.— 

4 (1) INCREASE IN FINANCING LIMIT.—The 

5 amendments made by subsection (a) shall apply to 

6 loans made on or after the date of enactment of this 

7 Act. 

8 (2) INFLATION ADJUSTMENT.—The amend9 ments made by subsection (b) shall apply to cal10 endar years beginning after December 31, 2022. 

11 SEC. 6. REVISION OF RECAPTURE TAX FOR MORTGAGE 

12 REVENUE BONDS. 

13 (a) IN GENERAL.—Subparagraph (C) of section 

14 143(m)(4) is amended to read as follows: 

15 ‘‘(C) HOLDING PERIOD PERCENTAGE.— 

16 The term ‘holding period percentage’ means the 

17 percentage determined in accordance with the 

18 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.’’. 

19 (b) CONFORMING AMENDMENT.—Section 

20 143(m)(7)(B)(ii) is amended by striking ‘‘9-year period’’ 

21 and inserting ‘‘5-year period’’. 


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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 December 31, 2021. 

4 SEC. 7. MODIFYING CALCULATION OF CREDIT FOR INTER5 EST PAID ON CERTIFIED INDEBTEDNESS. 

6 (a) IN GENERAL.—Section 25 is amended— 

7 (1) in subsection (a)— 

8 (A) in paragraph (1), by striking subpara9 graph (B) and inserting the following: 

10 ‘‘(B) the original principal amount of the 

11 certified indebtedness amount on which interest 

12 was paid or accrued by the taxpayer during the 

13 taxable year.’’, and 

14 (B) in paragraph (2)— 

15 (i) in the heading, by striking 

16 ‘‘WHERE CREDIT RATE EXCEEDS 20 PER17 CENT’’, and 

18 (ii) in subparagraph (A), by striking 

19 ‘‘If the certificate credit rate exceeds 20 

20 percent, the’’ and inserting ‘‘The’’, and 

21 (2) in subsection (d)— 

22 (A) by striking paragraph (1) and insert23 ing the following: 

24 ‘‘(1) IN GENERAL.— 


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1 ‘‘(A) CERTIFICATE CREDIT RATE.—Subject 

2 to subparagraph (B), the certificate credit rate 

3 specified in any mortgage credit certificate shall 

4 not be less than 1 percent or more than 5 per5 cent. 

6 ‘‘(B) VARIABLE RATE.—With respect to 

7 any mortgage credit certificate, the issuing au8 thority may elect to specify a different certifi9 cate credit rate for each year of the term of the 

10 mortgage.’’, and 

11 (B) in paragraph (2)— 

12 (i) in the heading, by striking ‘‘CER13 TIFICATE CREDIT RATES’’ and inserting 

14 ‘‘AMOUNT OF CREDIT CERTIFICATES’’, and 

15 (ii) in subparagraph (A)(ii), by insert16 ing ‘‘average annual’’ before ‘‘certificate 

17 credit rate’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to mortgage credit certificates 

20 issued after December 31, 2021. 

21 SEC. 8. EXTENSION OF PERIOD FOR MORTGAGE CREDIT 

22 CERTIFICATE TO BE IN EFFECT. 

23 (a) IN GENERAL.—Section 25(e)(3)(B) is amended 

24 by striking ‘‘second’’ and inserting ‘‘fourth’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to mortgage credit certificates 

3 issued after December 31, 2022. 

4 SEC. 9. EXTENSION OF PERIOD TO REVOKE ELECTION TO 

5 ISSUE MORTGAGE CREDIT CERTIFICATES. 

6 (a) IN GENERAL.—Section 25(c)(2) is amended by 

7 adding at the end the following: 

8 ‘‘(C) REVOCATION OF ELECTION TO ISSUE

9 MORTGAGE CREDIT CERTIFICATES.—For pur10 poses of any election made by an issuing au11 thority under subparagraph (A)(ii) during any 

12 calendar year, such issuing authority may sub13 sequently elect to reduce the nonissued bond 

14 amount (as defined in subsection (d)(2)(B)) for 

15 such calendar year, provided that such election 

16 is made not later than the end of the suc17 ceeding calendar year.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to elections made by an issuing 

20 authority under section 25(c)(2)(A)(ii) of the Internal 

21 Revenue Code of 1986 after December 31, 2022. 

22 SEC. 10. ADJUSTMENT OF PUBLIC NOTICE REQUIREMENT. 

23 (a) IN GENERAL.—Section 25(e)(5) is amended by 

24 striking ‘‘90 days’’ and inserting ‘‘30 days’’. 


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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to notices provided after December 

3 31, 2022. 

4 SEC. 11. ELIMINATION OF REPORTING REQUIREMENT. 

5 (a) IN GENERAL.—Section 25 is amended by striking 

6 subsection (g). 

7 (b) CONFORMING AMENDMENTS.—Section 6709 is 

8 amended— 

9 (1) by striking subsection (c), and 

10 (2) by redesignating subsection (d) as sub11 section (c). 

12 (c) EFFECTIVE DATE.—The amendments made by 

13 this section shall take effect on the date of enactment of 

14 this Act. 

Æ 


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