ECORA Act of 2021

To amend the Internal Revenue Code of 1986 to exclude from gross income interest received on certain loans secured by agricultural real property. 1. Short title This Act may be cited as the Enhancing Credit Opportunities in Rural America Act of 2021 ECORA Act of 2021 2. Exclusion for interest on loans secured by agricultural real property (a) In general Part III of subchapter B of chapter 1 139I. Interest on loans secured by agricultural real property (a) Exclusion Gross income shall not include interest received by a qualified lender on any qualified real estate loan. (b) Definitions For purposes of this section— (1) Qualified lender The term qualified lender (A) any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act ( 12 U.S.C. 1811 et seq. (B) any entity wholly owned, directly or indirectly, by a company that is treated as a bank holding company for purposes of section 8 of the International Banking Act of 1978 ( 12 U.S.C. 3106 (i) organized, incorporated, or established under the laws of the United States or any State of the United States, and (ii) having its principal place of business in the United States. (2) Qualified real estate loan The term qualified real estate loan (3) Agricultural real estate The term agricultural real estate (A) real property which is substantially used for the production of one or more agricultural products, and (B) any single family residence— (i) which is the principal residence (within the meaning of section 121) of its occupant, (ii) which is located in a rural area (as determined by the Secretary of Agriculture), which is not within a Metropolitan Statistical Area (as defined by the Office of Management and Budget) and which has a population (determined on the basis of the most recent decennial census for which data are available) of 2,500 or less, and (iii) which is purchased or improved with the proceeds of the qualified real estate loan. (c) Coordination with section 265 Qualified real estate loans shall be treated as obligations described in section 265(a)(2) the interest on which is wholly exempt from the taxes imposed by this subtitle. . (b) Clerical amendment The table of sections for such part III is amended by inserting after the item relating to section 139H the following new item: Sec. 139I. Interest on loans secured by agricultural real property. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Enhancing Credit Opportunities in Rural America Act of 2021 or the ECORA Act of 2021 This bill modifies the requirements for calculating taxable income to exclude from gross income interest received by a lender from real estate loans secured by agricultural real estate or by a leasehold mortgage (with a status as a lien) on agricultural real estate. Agricultural real estate includes real property that is substantially used for the production of one or more agricultural products. It also includes any single family residence that is (1) the principal residence of its occupant, (2) located in a rural area which is not within a Metropolitan Statistical Area and has a population of 2,500 or less, and (3) is purchased or improved with the proceeds of a loan secured by agricultural real estate or by a household mortgage.