I 
110TH CONGRESS 
2D SESSION 
H. R. 5239 
To amend the Internal Revenue Code of 1986 to provide that the proceeds 
of qualified mortgage bonds may be used to provide refinancing for 
subprime loans, to provide a temporary increase in the volume cap 
for qualified mortgage bonds used to provide that refinancing, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 6, 2008 
Mr. PORTER (for himself and Ms. SCHWARTZ) 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 provide 
that the proceeds of qualified mortgage bonds may be 
used to provide refinancing for subprime loans, to pro-
vide a temporary increase in the volume cap for qualified 
mortgage bonds used to provide that refinancing, and 
for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. MODIFICATIONS AND INCREASED VOLUME CAP 
WITH RESPECT TO QUALIFIED MORTGAGE 
BONDS 
USED 
TO 
REFINANCE 
SUBPRIME 
LOANS. 
(a) USE OF QUALIFIED MORTGAGE BONDS PRO-
CEEDS FOR SUBPRIME REFINANCING LOANS.—Section 
143(k) of the Internal Revenue Code of 1986 (relating to 
other definitions and special rules) is amended by adding 
at the end the following new paragraph: 
‘‘(12) 
SPECIAL
RULES
FOR
SUBPRIME 
REFINANCINGS.— 
‘‘(A) IN GENERAL.—In the case of a resi-
dence which was originally financed by the 
mortgagor through a qualified subprime loan, 
this section shall be applied with the following 
modifications: 
‘‘(i) Subsection (i)(1) (relating to 
mortgages must be new mortgages) shall 
not apply. 
‘‘(ii) Subsection (a)(2)(D)(i) shall be 
applied by substituting ‘12-month period’ 
for ‘42-month period’ each place it ap-
pears. 
‘‘(iii) Subsection (d) (relating to 3- 
year requirement) shall not apply. 
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‘‘(iv) Subsection (e) (relating to pur-
chase price requirement) shall be applied 
by using the market value of the residence 
at the time of refinancing in lieu of the ac-
quisition cost. 
‘‘(B) QUALIFIED
SUBPRIME
LOAN.—The 
term ‘qualified subprime loan’ means an adjust-
able rate single-family residential mortgage loan 
originated after December 31, 2001, and before 
January 1, 2008, that the bond issuer deter-
mines would likely cause financial hardship to 
the borrower if not refinanced. 
‘‘(C) TERMINATION.—This paragraph shall 
not apply to any bonds issued after December 
31, 2010.’’. 
(b) INCREASE
IN VOLUME CAP
FOR QUALIFIED 
MORTGAGE BONDS USED
TO REFINANCE SUBPRIME 
LOANS.— 
(1) IN
GENERAL.—Subsection (d) of section 
146 of the Internal Revenue Code of 1986 is amend-
ed by adding at the end the following new para-
graph: 
‘‘(5) INCREASE FOR 2008 AND SET ASIDE FOR 
QUALIFIED MORTGAGE BONDS USED TO REFINANCE 
QUALIFIED SUBPRIME LOANS.— 
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‘‘(A) IN GENERAL.—The State ceiling for 
each State for calendar year 2008 (determined 
without regard to this paragraph) shall be in-
creased by an amount which bears the same 
ratio to $15,000,000,000 as— 
‘‘(i) the State ceiling for such State 
for such year (as so determined) bears to 
‘‘(ii) the aggregate of the State ceil-
ings for all States (as so determined) for 
such year. 
‘‘(B) SET ASIDE.— 
‘‘(i) IN GENERAL.—Not less than an 
amount equal to each State’s increase in 
the State ceiling under subparagraph (A) 
shall be allocated solely for the purpose of 
qualified mortgage issues which meets the 
requirement of clause (ii). 
‘‘(ii) 
REQUIREMENT.—A 
qualified 
mortgage issue meets the requirement of 
this clause if all the financing provided by 
the issue is used to refinance qualified 
subprime loans (as defined in section 
143(k)(12)(B)) 
to 
which 
section 
143(k)(12) applies.’’. 
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(2) 
CARRYFORWARD
OF
UNUSED
LIMITA-
TIONS.—Subsection (f) of section 146 of such Code 
is amended by adding at the end the following new 
paragraph: 
‘‘(6) SPECIAL RULES FOR INCREASED VOLUME 
CAP UNDER SUBSECTION (D)(5).— 
‘‘(A) IN GENERAL.—No amount which is 
attributable to the increase under subsection 
(d)(5) may be used— 
‘‘(i) for a carryforward purpose other 
than issuing qualified mortgage bonds 
which meet the requirement of subsection 
(d)(5)(B)(ii), and 
‘‘(ii) to issue any bond after Decem-
ber 31, 2010. 
‘‘(B) ORDERING RULES.—For purposes of 
subparagraph (A), any carryforward of an 
issuing authority’s volume cap for calendar year 
2008 shall be treated as attributable to such in-
crease to the extent of such increase.’’. 
(c) ALTERNATIVE MINIMUM TAX.— 
(1) IN
GENERAL.—Clause (ii) of section 
57(a)(5)(C) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘shall not include’’ and all that 
follows and inserting ‘‘shall not include— 
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