I

107TH CONGRESS

1ST SESSION H. R. 951

To amend the Internal Revenue Code of 1986 to repeal the required use

of certain principal repayments on mortgage subsidy bond financings

to redeem bonds, to modify the purchase price limitation under mortgage

subsidy bond rules based on median family income, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MARCH 8, 2001

Mr. HOUGHTON (for himself, and Mr. NEAL of Massachusetts) introduced the

following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to repeal

the required use of certain principal repayments on mortgage subsidy bond financings to redeem bonds, to modify

the purchase price limitation under mortgage subsidy

bond rules based on median family income, 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.

4 This Act may be cited as the ‘‘Housing Bond and

5 Credit Modernization and Fairness Act of 2001’’.
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1 SEC. 2. REPEAL OF REQUIRED USE OF CERTAIN PRINCIPAL

2 REPAYMENTS ON MORTGAGE SUBSIDY BOND

3 FINANCINGS TO REDEEM BONDS.

4 (a) IN GENERAL.—Subparagraph (A) of section

5 143(a)(2) of the Internal Revenue Code of 1986 (defining

6 qualified mortgage issue) is amended by adding ‘‘and’’ at

7 the end of clause (ii), by striking ‘‘, and’’ at the end of

8 clause (iii) and inserting a period, and by striking clause

9 (iv) and the last sentence.

10 (b) CONFORMING AMENDMENT.—Clause (ii) of sec11 tion 143(a)(2)(D) of such Code is amended by striking

12 ‘‘(and clause (iv) of subparagraph (A))’’.

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

14 this section shall apply to repayments received after the

15 date of the enactment of this Act.

16 SEC. 3. MODIFICATION OF PURCHASE PRICE LIMITATION

17 UNDER MORTGAGE SUBSIDY BOND RULES

18 BASED ON MEDIAN FAMILY INCOME.

19 (a) IN GENERAL.—Paragraph (1) of section 143(e)

20 of the Internal Revenue Code of 1986 (relating to pur21 chase price requirement) is amended to read as follows:

22 ‘‘(1) IN GENERAL.—An issue meets the require23 ments of this subsection only if the acquisition cost

24 of each residence the owner-financing of which is

25 provided under the issue does not exceed the greater

26 of—
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1 ‘‘(A) 90 percent of the average area pur2 chase price applicable to the residence, or

3 ‘‘(B) 3.5 times the applicable median fam4 ily income (as defined in subsection (f)).’’

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

6 this section shall apply to financing provided, and mort7 gage credit certificates issued, after the date of the enact8 ment of this Act.

9 SEC. 4. DETERMINATION OF AREA MEDIAN GROSS INCOME

10 FOR LOW-INCOME HOUSING CREDIT

11 PROJECTS.

12 (a) IN GENERAL.—Paragraph (4) of section 42(g) of

13 the Internal Revenue Code of 1986 (relating to certain

14 rules made applicable) is amended by striking the period

15 at the end and inserting ‘‘and the term ‘area median gross

16 income’ means the amount equal to the greater of—

17 ‘‘(A) the area median gross income deter18 mined under section 142(d)(2)(B), or

19 ‘‘(B) the statewide median gross income

20 for the State in which the project is located.’’

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

22 this section shall apply to—

23 (1) housing credit dollar amounts allocated

24 after the date of the enactment of this Act, and
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1 (2) buildings placed in service after such date

2 to the extent paragraph (1) of section 42(h) of the

3 Internal Revenue Code of 1986 does not apply to

4 any building by reason of paragraph (4) thereof.

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