518 
pliance period (within the meaning of such 
section) with respect to such building, and 
(ii) the taxpayer elects the application 
of this subparagraph with respect to such 
disposition. 
Notwithstanding the preceding sentence, the amend-
ments made by subsection (c) shall not apply to any 
disposition after the date 5 years after the date of the 
enactment of this Act. 
(3) ENERGY EFFICIENCY AND HISTORIC NATURE 
TAKEN INTO ACCOUNT IN MAKING ALLOCATIONS.—The 
amendments made by subsection (d) shall apply to al-
locations made after December 31, 2008. 
(4) CONTINUED ELIGIBILITY FOR STUDENTS WHO 
RECEIVED FOSTER CARE ASSISTANCE.—The amend-
ments made by subsection (e) shall apply to deter-
minations made after the date of the enactment of this 
Act. 
(5) TREATMENT
OF
RURAL
PROJECTS.—The 
amendment made by subsection (f) shall apply to de-
terminations made after the date of the enactment of 
this Act.
519 
Subpart B—Modifications to Tax-Exempt Housing 
Bond Rules 
SEC. 606. RECYCLING OF TAX-EXEMPT DEBT FOR FINANC-
ING RESIDENTIAL RENTAL PROJECTS. 
(a) IN GENERAL.—Subsection (i) of section 146 (relat-
ing to treatment of refunding issues) is amended by adding 
at the end the following new paragraph: 
‘‘(6) TREATMENT
OF
CERTAIN
RESIDENTIAL 
RENTAL PROJECT BONDS AS REFUNDING BONDS IRRE-
SPECTIVE OF OBLIGOR.— 
‘‘(A) IN GENERAL.—If, during the 6-month 
period beginning on the date of a repayment of 
a loan financed by an issue 95 percent or more 
of the net proceeds of which are used to provide 
projects described in section 142(d), such repay-
ment is used to provide a new loan for any 
project so described, any bond which is issued to 
refinance such issue shall be treated as a refund-
ing issue to the extent the principal amount of 
such refunding issue does not exceed the prin-
cipal amount of the bonds refunded. 
‘‘(B) 
LIMITATIONS.—Subparagraph 
(A) 
shall apply to only one refunding of the original 
issue and only if—
520 
‘‘(i) the refunding issue is issued not 
later than 4 years after the date on which 
the original issue was issued, 
‘‘(ii) the latest maturity date of any 
bond of the refunding issue is not later than 
34 years after the date on which the re-
funded bond was issued, and 
‘‘(iii) the refunding issue is approved 
in accordance with section 147(f) before the 
issuance of the refunding issue.’’. 
(b) LOW-INCOME HOUSING CREDIT.—Clause (ii) of 
section 42(h)(4)(A) is amended by inserting ‘‘or such fi-
nancing is refunded as described in section 146(i)(6)’’ before 
the period at the end. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to repayments of loans received after the 
date of the enactment of this Act. 
SEC. 607. COORDINATION OF CERTAIN RULES APPLICABLE 
TO 
LOW-INCOME 
HOUSING 
CREDIT 
AND 
QUALIFIED RESIDENTIAL RENTAL PROJECT 
EXEMPT FACILITY BONDS. 
(a) DETERMINATION OF NEXT AVAILABLE UNIT.— 
Paragraph (3) of section 142(d) (relating to current income 
determinations) is amended by adding at the end the fol-
lowing new subparagraph:
521 
‘‘(C) EXCEPTION FOR PROJECTS WITH RE-
SPECT TO WHICH AFFORDABLE HOUSING CREDIT 
IS ALLOWED.—In the case of a project with re-
spect to which credit is allowed under section 42, 
the second sentence of subparagraph (B) shall be 
applied by substituting ‘building (within the 
meaning of section 42)’ for ‘project’.’’. 
(b) STUDENTS.—Paragraph (2) of section 142(d) (re-
lating to definitions and special rules) is amended by add-
ing at the end the following new subparagraph: 
‘‘(C) STUDENTS.—Rules similar to the rules 
of 42(i)(3)(D) shall apply for purposes of this 
subsection.’’. 
(c) SINGLE-ROOM OCCUPANCY UNITS.—Paragraph (2) 
of section 142(d) (relating to definitions and special rules), 
as amended by subsection (b), is further amended by adding 
at the end the following new subparagraph: 
‘‘(D) SINGLE-ROOM OCCUPANCY UNITS.—A 
unit shall not fail to be treated as a residential 
unit merely because such unit is a single-room 
occupancy unit (within the meaning of section 
42).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to determinations of the status of quali-
fied residential rental projects for periods beginning after
522 
the date of the enactment of this Act, with respect to bonds 
issued before, on, or after such date. 
Subpart C—Reforms Related to the Low-Income 
Housing Credit and Tax-Exempt Housing Bonds 
SEC. 609. HOLD HARMLESS FOR REDUCTIONS IN AREA ME-
DIAN GROSS INCOME. 
(a) IN GENERAL.—Paragraph (2) of section 142(d), as 
amended by section 607, is further amended by adding at 
the end the following new subparagraph: 
‘‘(E) HOLD HARMLESS FOR REDUCTIONS IN 
AREA MEDIAN GROSS INCOME.— 
‘‘(i) IN GENERAL.—Any determination 
of area median gross income under sub-
paragraph (B) with respect to any project 
for any calendar year after 2008 shall not 
be less than the area median gross income 
determined under such subparagraph with 
respect to such project for the calendar year 
preceding the calendar year for which such 
determination is made. 
‘‘(ii) SPECIAL RULE FOR CERTAIN CEN-
SUS CHANGES.—In the case of a HUD hold 
harmless impacted project, the area median 
gross income with respect to such project for 
any calendar year after 2008 (hereafter in
530 
of such credit for each taxable year in the recapture 
period. 
‘‘(2) ACCELERATION OF RECAPTURE.—If a tax-
payer disposes of the principal residence with respect 
to which a credit was allowed under subsection (a) 
(or such residence ceases to be the principal residence 
of the taxpayer (and, if married, the taxpayer’s 
spouse)) before the end of the recapture period— 
‘‘(A) the tax imposed by this chapter for the 
taxable year of such disposition or cessation, 
shall be increased by the excess of the amount of 
the credit allowed over the amounts of tax im-
posed by paragraph (1) for preceding taxable 
years, and 
‘‘(B) paragraph (1) shall not apply with re-
spect to such credit for such taxable year or any 
subsequent taxable year. 
‘‘(3) LIMITATION BASED ON GAIN.—In the case of 
the sale of the principal residence to a person who is 
not related to the taxpayer, the increase in tax deter-
mined under paragraph (2) shall not exceed the 
amount of gain (if any) on such sale. Solely for pur-
poses of the preceding sentence, the adjusted basis of 
such residence shall be reduced by the amount of the
531 
credit allowed under subsection (a) to the extent not 
previously recaptured under paragraph (1). 
‘‘(4) EXCEPTIONS.— 
‘‘(A) DEATH
OF
TAXPAYER.—Paragraphs 
(1) and (2) shall not apply to any taxable year 
ending after the date of the taxpayer’s death. 
‘‘(B) INVOLUNTARY
CONVERSION.—Para-
graph (2) shall not apply in the case of a resi-
dence which is compulsorily or involuntarily 
converted 
(within 
the 
meaning 
of 
section 
1033(a)) if the taxpayer acquires a new prin-
cipal residence during the 2-year period begin-
ning on the date of the disposition or cessation 
referred to in paragraph (2). Paragraph (2) 
shall apply to such new principal residence dur-
ing the recapture period in the same manner as 
if such new principal residence were the con-
verted residence. 
‘‘(C) TRANSFERS BETWEEN SPOUSES OR IN-
CIDENT TO DIVORCE.—In the case of a transfer 
of a residence to which section 1041(a) applies— 
‘‘(i) paragraph (2) shall not apply to 
such transfer, and 
‘‘(ii) in the case of taxable years end-
ing after such transfer, paragraphs (1) and
532 
(2) shall apply to the transferee in the same 
manner as if such transferee were the trans-
feror (and shall not apply to the transferor). 
‘‘(5) JOINT RETURNS.—In the case of a credit al-
lowed under subsection (a) with respect to a joint re-
turn, half of such credit shall be treated as having 
been allowed to each individual filing such return for 
purposes of this subsection. 
‘‘(6) RECAPTURE PERIOD.—For purposes of this 
subsection, the term ‘recapture period’ means the 15 
taxable years beginning with the second taxable year 
following the taxable year in which the purchase of 
the principal residence for which a credit is allowed 
under subsection (a) was made. 
‘‘(g) APPLICATION OF SECTION.—This section shall 
only apply to a principal residence purchased by the tax-
payer on or after April 9, 2008, and before April 1, 2009.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 26(b)(2) is amended by striking 
‘‘and’’ at the end of subparagraph (U), by striking the 
period and inserting ‘‘, and’’ and the end of subpara-
graph (V), and by inserting after subparagraph (V) 
the following new subparagraph: 
‘‘(W) section 36(f) (relating to recapture of 
homebuyer credit).’’.
533 
(2) Section 6211(b)(4)(A) is amended by striking 
‘‘34,’’ and all that follows through ‘‘6428’’ and insert-
ing ‘‘34, 35, 36, 53(e), and 6428’’. 
(3) Section 1324(b)(2) of title 31, United States 
Code, is amended by inserting ‘‘, 36,’’ after ‘‘section 
35’’. 
(4) The table of sections for subpart C of part IV 
of subchapter A of chapter 1 is amended by redesig-
nating the item relating to section 36 as an item re-
lating to section 37 and by inserting before such item 
the following new item: 
‘‘Sec. 36. First-time homebuyer credit.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to residences purchased on or after April 
9, 2008, in taxable years ending on or after such date. 
SEC. 613. ADDITIONAL STANDARD DEDUCTION FOR REAL 
PROPERTY TAXES FOR NONITEMIZERS. 
(a) IN GENERAL.—Section 63(c)(1) (defining standard 
deduction) is amended by striking ‘‘and’’ at the end of sub-
paragraph (A), by striking the period at the end of subpara-
graph (B) and inserting ‘‘, and’’, and by adding at the end 
the following new subparagraph: 
‘‘(C) in the case of any taxable year begin-
ning in 2008, the real property tax deduction.’’. 
(b) DEFINITION.—Section 63(c) is amended by adding 
at the end the following new paragraph:
534 
‘‘(7) REAL
PROPERTY
TAX
DEDUCTION.—For 
purposes of paragraph (1), the real property tax de-
duction is the lesser of— 
‘‘(A) the amount allowable as a deduction 
under this chapter for State and local taxes de-
scribed in section 164(a)(1), or 
‘‘(B) $350 ($700 in the case of a joint re-
turn). 
Any taxes taken into account under section 62(a) 
shall not be taken into account under this para-
graph.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2007. 
PART 3—GENERAL PROVISIONS 
SEC. 615. TEMPORARY LIBERALIZATION OF TAX-EXEMPT 
HOUSING BOND RULES. 
(a) TEMPORARY INCREASE IN VOLUME CAP.— 
(1) IN GENERAL.—Subsection (d) of section 146 
is amended by adding at the end the following new 
paragraph: 
‘‘(5) INCREASE AND SET ASIDE FOR HOUSING 
BONDS FOR 2008.— 
‘‘(A) INCREASE FOR 2008.—In the case of 
calendar year 2008, the State ceiling for each
535 
State shall be increased by an amount equal to 
$10,000,000,000 multiplied by a fraction— 
‘‘(i) the numerator of which is the pop-
ulation of such State, and 
‘‘(ii) the denominator of which is the 
total population of all States. 
‘‘(B) SET ASIDE.— 
‘‘(i) IN GENERAL.—Any amount of the 
State ceiling for any State which is attrib-
utable to an increase under this paragraph 
shall be allocated solely for one or more 
qualified housing issues. 
‘‘(ii) QUALIFIED HOUSING ISSUE.—For 
purposes of this paragraph, the term ‘quali-
fied housing issue’ means— 
‘‘(I) an issue described in section 
142(a)(7) (relating to qualified resi-
dential rental projects), or 
‘‘(II) a qualified mortgage issue 
(determined by substituting ‘12-month 
period’ for ‘42-month period’ each 
place 
it 
appears 
in 
section 
143(a)(2)(D)(i)).’’.
579 
consultation to simplify the coordination of rules, regula-
tions, forms, and approval requirements for multifamily 
housing projects projects for which assistance is provided 
by such Department in conjunction with any low-income 
housing tax credits under section 42 of the Internal Revenue 
Code of 1986 or tax-exempt housing bonds. 
(c) 
RECOMMENDATIONS.—In 
implementing 
the 
changes required under this section, the Secretary shall so-
licit recommendations regarding such changes from project 
owners and sponsors, investors and stakeholders in housing 
tax credits, State and local housing finance agencies, public 
housing agencies, tenant advocates, and other stakeholders 
in such projects. 
(d) REPORT.—Not later than the expiration of the 9- 
month period beginning on the date of the enactment of this 
Act, the Secretary shall submit a report to the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate that— 
(1) identifies the actions taken by the Secretary 
to comply with this section; 
(2) includes information regarding any resulting 
improvements in the expedited approval for multi-
family housing projects;