H. R. 3221—225 
Sec. 3010. Exception to annual current income determination requirement where 
determination not relevant. 
Subtitle B—Single Family Housing 
Sec. 3011. First-time homebuyer credit. 
Sec. 3012. Additional standard deduction for real property taxes for nonitemizers. 
Subtitle C—General Provisions 
Sec. 3021. Temporary liberalization of tax-exempt housing bond rules. 
Sec. 3022. Repeal of alternative minimum tax limitations on tax-exempt housing 
bonds, low-income housing tax credit, and rehabilitation credit. 
Sec. 3023. Bonds guaranteed by Federal home loan banks eligible for treatment as 
tax-exempt bonds. 
Sec. 3024. Modification of rules pertaining to FIRPTA nonforeign affidavits. 
Sec. 3025. Modification of definition of tax-exempt use property for purposes of the 
rehabilitation credit. 
Sec. 3026. Extension of special rule for mortgage revenue bonds for residences lo-
cated in disaster areas. 
Sec. 3027. Transfer of funds appropriated to carry out 2008 recovery rebates for in-
dividuals. 
TITLE II—REFORMS RELATED TO REAL ESTATE INVESTMENT TRUSTS 
Subtitle A—Foreign Currency and Other Qualified Activities 
Sec. 3031. Revisions to REIT income tests. 
Sec. 3032. Revisions to REIT asset tests. 
Sec. 3033. Conforming foreign currency revisions. 
Subtitle B—Taxable REIT Subsidiaries 
Sec. 3041. Conforming taxable REIT subsidiary asset test. 
Subtitle C—Dealer Sales 
Sec. 3051. Holding period under safe harbor. 
Sec. 3052. Determining value of sales under safe harbor. 
Subtitle D—Health Care REITs 
Sec. 3061. Conformity for health care facilities. 
Subtitle E—Effective Dates 
Sec. 3071. Effective dates. 
TITLE III—REVENUE PROVISIONS 
Subtitle A—General Provisions 
Sec. 3081. Election to accelerate the AMT and research credits in lieu of bonus de-
preciation. 
Sec. 3082. Certain GO Zone incentives. 
Sec. 3083. Increase in statutory limit on the public debt. 
Subtitle B—Revenue Offsets 
Sec. 3091. Returns relating to payments made in settlement of payment card and 
third party network transactions. 
Sec. 3092. Gain from sale of principal residence allocated to nonqualified use not 
excluded from income. 
Sec. 3093. Delay in application of worldwide allocation of interest. 
Sec. 3094. Time for payment of corporate estimated taxes. 
TITLE I—HOUSING TAX INCENTIVES 
Subtitle A—Multi-Family Housing 
PART I—LOW-INCOME HOUSING TAX CREDIT 
SEC. 3001. TEMPORARY INCREASE IN VOLUME CAP FOR LOW-INCOME 
HOUSING TAX CREDIT. 
Paragraph (3) of section 42(h) is amended by adding at the 
end the following new subparagraph:
H. R. 3221—226 
‘‘(I) INCREASE IN STATE HOUSING CREDIT CEILING FOR 
2008 AND 2009.—In the case of calendar years 2008 and 
2009— 
‘‘(i) the dollar amount in effect under subparagraph 
(C)(ii)(I) for such calendar year (after any increase 
under subparagraph (H)) shall be increased by $0.20, 
and 
‘‘(ii) the dollar amount in effect under subpara-
graph (C)(ii)(II) for such calendar year (after any 
increase under subparagraph (H)) shall be increased 
by an amount equal to 10 percent of such dollar amount 
(rounded to the next lowest multiple of $5,000).’’. 
SEC. 3002. DETERMINATION OF CREDIT RATE. 
(a) TEMPORARY MINIMUM CREDIT RATE FOR NON-FEDERALLY 
SUBSIDIZED NEW BUILDINGS.— 
(1) IN GENERAL.—Subsection (b) of section 42 is amended 
by striking paragraph (1), by redesignating paragraph (2) as 
paragraph (1), and by inserting after paragraph (1), as so 
redesignated, the following new paragraph: 
‘‘(2) TEMPORARY MINIMUM CREDIT RATE FOR NON-FEDERALLY 
SUBSIDIZED NEW BUILDINGS.—In the case of any new building— 
‘‘(A) which is placed in service by the taxpayer after 
the date of the enactment of this paragraph and before 
December 31, 2013, and 
‘‘(B) which is not federally subsidized for the taxable 
year, 
the applicable percentage shall not be less than 9 percent.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subsection (b) of section 42, as amended by para-
graph (1), is amended by striking ‘‘For purposes of this 
section—’’ and all that follows through ‘‘means the appro-
priate’’ and inserting the following: 
‘‘(1) DETERMINATION OF APPLICABLE PERCENTAGE.—For pur-
poses of this section, the term ‘applicable percentage’ means, 
with respect to any building, the appropriate’’. 
(B) Clause (i) of section 42(b)(1)(B), as redesignated 
by paragraph (1), is amended by striking ‘‘a building 
described in paragraph (1)(A)’’ and inserting ‘‘a new 
building which is not federally subsidized for the taxable 
year’’. 
(C) Clause (ii) of section 42(b)(1)(B), as redesignated 
by paragraph (1), is amended by striking ‘‘a building 
described in paragraph (1)(B)’’ and inserting ‘‘a building 
not described in clause (i)’’. 
(b) MODIFICATIONS TO DEFINITION OF FEDERALLY SUBSIDIZED 
BUILDING.— 
(1) IN GENERAL.—Subparagraph (A) of section 42(i)(2) is 
amended by striking ‘‘, or any below market Federal loan,’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Subparagraph (B) of section 42(i)(2) is amended— 
(i) by striking ‘‘BALANCE
OF
LOAN
OR’’ in the 
heading thereof, 
(ii) by striking ‘‘loan or’’ in the matter preceding 
clause (i), and
H. R. 3221—227 
(iii) by striking ‘‘subsection (d)—’’ and all that fol-
lows and inserting ‘‘subsection (d) the proceeds of such 
obligation.’’. 
(B) Subparagraph (C) of section 42(i)(2) is amended— 
(i) by striking ‘‘or below market Federal loan’’ in 
the matter preceding clause (i), 
(ii) in clause (i)— 
(I) by striking ‘‘or loan (when issued or made)’’ 
and inserting ‘‘(when issued)’’, and 
(II) by striking ‘‘the proceeds of such obligation 
or loan’’ and inserting ‘‘the proceeds of such obliga-
tion’’, and 
(iii) by striking ‘‘, and such loan is repaid,’’ in 
clause (ii). 
(C) Paragraph (2) of section 42(i) is amended by 
striking subparagraphs (D) and (E). 
(c) EFFECTIVE DATE.—The amendments made by this subsection 
shall apply to buildings placed in service after the date of the 
enactment of this Act. 
SEC. 3003. MODIFICATIONS TO DEFINITION OF ELIGIBLE BASIS. 
(a) INCREASE
IN CREDIT
FOR CERTAIN STATE DESIGNATED 
BUILDINGS.—Subparagraph (C) of section 42(d)(5) (relating to 
increase in credit for buildings in high cost areas), before redesigna-
tion under subsection (g), is amended by adding at the end the 
following new clause: 
‘‘(v) BUILDINGS
DESIGNATED
BY
STATE
HOUSING 
CREDIT AGENCY.—Any building which is designated by 
the State housing credit agency as requiring the 
increase in credit under this subparagraph in order 
for such building to be financially feasible as part 
of a qualified low-income housing project shall be 
treated for purposes of this subparagraph as located 
in a difficult development area which is designated 
for purposes of this subparagraph. The preceding sen-
tence shall not apply to any building if paragraph 
(1) of subsection (h) does not apply to any portion 
of the eligible basis of such building by reason of para-
graph (4) of such subsection.’’. 
(b) MODIFICATION TO REHABILITATION REQUIREMENTS.— 
(1) IN
GENERAL.—Clause (ii) of section 42(e)(3)(A) is 
amended— 
(A) by striking ‘‘10 percent’’ in subclause (I) and 
inserting ‘‘20 percent’’, and 
(B) by striking ‘‘$3,000’’ in subclause (II) and inserting 
‘‘$6,000’’. 
(2) INFLATION ADJUSTMENT.—Paragraph (3) of section 42(e) 
is amended by adding at the end the following new subpara-
graph: 
‘‘(D) INFLATION
ADJUSTMENT.—In the case of any 
expenditures which are treated under paragraph (4) as 
placed in service during any calendar year after 2009, 
the $6,000 amount in subparagraph (A)(ii)(II) shall be 
increased by an amount equal to— 
‘‘(i) such dollar amount, multiplied by
H. R. 3221—228 
‘‘(ii) the cost-of-living adjustment determined 
under section 1(f)(3) for such calendar year by sub-
stituting ‘calendar year 2008’ for ‘calendar year 1992’ 
in subparagraph (B) thereof. 
Any increase under the preceding sentence which is not 
a multiple of $100 shall be rounded to the nearest multiple 
of $100.’’. 
(3) CONFORMING
AMENDMENT.—Subclause (II) of section 
42(f)(5)(B)(ii) 
is 
amended 
by 
striking 
‘‘if 
subsection 
(e)(3)(A)(ii)(II)’’ and all that follows and inserting ‘‘if the dollar 
amount in effect under subsection (e)(3)(A)(ii)(II) were two- 
thirds of such amount.’’. 
(c) INCREASE
IN ALLOWABLE COMMUNITY SERVICE FACILITY 
SPACE
FOR SMALL PROJECTS.—Clause (ii) of section 42(d)(4)(C) 
(relating to limitation) is amended by striking ‘‘10 percent of the 
eligible basis of the qualified low-income housing project of which 
it is a part. For purposes of’’ and inserting ‘‘the sum of— 
‘‘(I) 25 percent of so much of the eligible basis 
of the qualified low-income housing project of 
which it is a part as does not exceed $15,000,000, 
plus 
‘‘(II) 10 percent of so much of the eligible basis 
of such project as is not taken into account under 
subclause (I). 
For purposes of’’. 
(d) CLARIFICATION
OF
TREATMENT
OF
FEDERAL
GRANTS.— 
Subparagraph (A) of section 42(d)(5) is amended to read as follows: 
‘‘(A) FEDERAL GRANTS NOT TAKEN INTO ACCOUNT IN 
DETERMINING
ELIGIBLE
BASIS.—The eligible basis of a 
building shall not include any costs financed with the pro-
ceeds of a federally funded grant.’’. 
(e) SIMPLIFICATION OF RELATED PARTY RULES.—Clause (iii) of 
section 42(d)(2)(D), before redesignation under subsection (g)(2), 
is amended— 
(1) by striking all that precedes subclause (II), 
(2) by redesignating subclause (II) as clause (iii) and moving 
such clause two ems to the left, and 
(3) by striking the last sentence thereof. 
(f) EXCEPTION
TO
10-YEAR
NONACQUISITION
PERIOD
FOR 
EXISTING BUILDINGS APPLICABLE TO FEDERALLY- OR STATE-ASSISTED 
BUILDINGS.—Paragraph (6) of section 42(d) is amended to read 
as follows: 
‘‘(6) CREDIT ALLOWABLE FOR CERTAIN BUILDINGS ACQUIRED 
DURING 10-YEAR PERIOD DESCRIBED IN PARAGRAPH (2)(B)(ii).— 
‘‘(A) IN GENERAL.—Paragraph (2)(B)(ii) shall not apply 
to any federally- or State-assisted building. 
‘‘(B) BUILDINGS ACQUIRED FROM INSURED DEPOSITORY 
INSTITUTIONS IN DEFAULT.—On application by the taxpayer, 
the Secretary may waive paragraph (2)(B)(ii) with respect 
to any building acquired from an insured depository institu-
tion in default (as defined in section 3 of the Federal 
Deposit Insurance Act) or from a receiver or conservator 
of such an institution. 
‘‘(C) FEDERALLY- OR
STATE-ASSISTED
BUILDING.—For 
purposes of this paragraph— 
‘‘(i) FEDERALLY-ASSISTED BUILDING.—The term ‘fed-
erally-assisted building’ means any building which is
H. R. 3221—229 
substantially assisted, financed, or operated under sec-
tion 8 of the United States Housing Act of 1937, section 
221(d)(3), 221(d)(4), or 236 of the National Housing 
Act, section 515 of the Housing Act of 1949, or any 
other housing program administered by the Depart-
ment of Housing and Urban Development or by the 
Rural Housing Service of the Department of Agri-
culture. 
‘‘(ii) STATE-ASSISTED BUILDING.—The term ‘State- 
assisted building’ means any building which is substan-
tially assisted, financed, or operated under any State 
law similar in purposes to any of the laws referred 
to in clause (i).’’. 
(g) REPEAL OF DEADWOOD.— 
(1) Clause (ii) of section 42(d)(2)(B) is amended by striking 
‘‘the later of—’’ and all that follows and inserting ‘‘the date 
the building was last placed in service,’’. 
(2) Subparagraph (D) of section 42(d)(2) is amended by 
striking clause (i) and by redesignating clauses (ii) and (iii) 
as clauses (i) and (ii), respectively. 
(3) Paragraph (5) of section 42(d) is amended by striking 
subparagraph (B) and by redesignating subparagraph (C) as 
subparagraph (B). 
(h) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in para-
graph (2), the amendments made by this subsection shall apply 
to buildings placed in service after the date of the enactment 
of this Act. 
(2) REHABILITATION REQUIREMENTS.— 
(A) IN GENERAL.—The amendments made by subsection 
(b) shall apply to buildings with respect to which housing 
credit dollar amounts are allocated after the date of the 
enactment of this Act. 
(B) BUILDINGS NOT SUBJECT TO ALLOCATION LIMITS.— 
To the extent paragraph (1) of section 42(h) of the Internal 
Revenue Code of 1986 does not apply to any building by 
reason of paragraph (4) thereof, the amendments made 
by subsection (b) shall apply buildings financed with bonds 
issued pursuant to allocations made after the date of the 
enactment of this Act. 
SEC. 3004. OTHER SIMPLIFICATION AND REFORM OF LOW-INCOME 
HOUSING TAX INCENTIVES. 
(a) REPEAL PROHIBITION ON MODERATE REHABILITATION ASSIST-
ANCE.—Paragraph (2) of section 42(c) (defining qualified low-income 
building) is amended by striking the flush sentence at the end. 
(b) MODIFICATION OF TIME LIMIT FOR INCURRING 10 PERCENT 
OF PROJECT’S COST.—Clause (ii) of section 42(h)(1)(E) is amended 
by striking ‘‘(as of the later of the date which is 6 months after 
the date that the allocation was made or the close of the calendar 
year in which the allocation is made)’’ and inserting ‘‘(as of the 
date which is 1 year after the date that the allocation was made)’’. 
(c) REPEAL
OF BONDING REQUIREMENT
ON DISPOSITION
OF 
BUILDING.—Paragraph (6) of section 42(j) (relating to no recapture 
on disposition of building (or interest therein) where bond posted) 
is amended to read as follows:
H. R. 3221—230 
‘‘(6) NO RECAPTURE ON DISPOSITION OF BUILDING WHICH 
CONTINUES IN QUALIFIED USE.— 
‘‘(A) IN GENERAL.—The increase in tax under this sub-
section shall not apply solely by reason of the disposition 
of a building (or an interest therein) if it is reasonably 
expected that such building will continue to be operated 
as a qualified low-income building for the remaining compli-
ance period with respect to such building. 
‘‘(B) STATUTE OF LIMITATIONS.—If a building (or an 
interest therein) is disposed of during any taxable year 
and there is any reduction in the qualified basis of such 
building which results in an increase in tax under this 
subsection for such taxable or any subsequent taxable year, 
then— 
‘‘(i) the statutory period for the assessment of any 
deficiency with respect to such increase in tax shall 
not expire before the expiration of 3 years from the 
date the Secretary is notified by the taxpayer (in such 
manner as the Secretary may prescribe) of such reduc-
tion in qualified basis, and 
‘‘(ii) such deficiency may be assessed before the 
expiration of such 3-year period notwithstanding the 
provisions of any other law or rule of law which would 
otherwise prevent such assessment.’’. 
(d) ENERGY EFFICIENCY AND HISTORIC NATURE TAKEN INTO 
ACCOUNT IN MAKING ALLOCATIONS.—Subparagraph (C) of section 
42(m)(1) (relating to plans for allocation of credit among projects) 
is amended by striking ‘‘and’’ at the end of clause (vii), by striking 
the period at the end of clause (viii) and inserting a comma, and 
by adding at the end the following new clauses: 
‘‘(ix) the energy efficiency of the project, and 
‘‘(x) the historic nature of the project.’’. 
(e) CONTINUED ELIGIBILITY
FOR STUDENTS WHO RECEIVED 
FOSTER CARE ASSISTANCE.—Clause (i) of section 42(i)(3)(D) is 
amended by striking ‘‘or’’ at the end of subclause (I), by redesig-
nating subclause (II) as subclause (III), and by inserting after 
subclause (I) the following new subclause: 
‘‘(II) a student who was previously under the 
care and placement responsibility of the State 
agency responsible for administering a plan under 
part B or part E of title IV of the Social Security 
Act, or’’. 
(f) TREATMENT
OF RURAL PROJECTS.—Section 42(i) (relating 
to definitions and special rules) is amended by adding at the end 
the following new paragraph: 
‘‘(8) TREATMENT OF RURAL PROJECTS.—For purposes of this 
section, in the case of any project for residential rental property 
located in a rural area (as defined in section 520 of the Housing 
Act of 1949), any income limitation measured by reference 
to area median gross income shall be measured by reference 
to the greater of area median gross income or national non- 
metropolitan median income. The preceding sentence shall not 
apply with respect to any building if paragraph (1) of section 
42(h) does not apply by reason of paragraph (4) thereof to 
any portion of the credit determined under this section with 
respect to such building.’’.
H. R. 3221—231 
(g) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT.— 
Subsection (g) of section 42 is amended by adding at the end 
the following new paragraph: 
‘‘(9) CLARIFICATION
OF
GENERAL
PUBLIC
USE
REQUIRE-
MENT.—A project does not fail to meet the general public use 
requirement solely because of occupancy restrictions or pref-
erences that favor tenants— 
‘‘(A) with special needs, 
‘‘(B) who are members of a specified group under a 
Federal program or State program or policy that supports 
housing for such a specified group, or 
‘‘(C) who are involved in artistic or literary activities.’’. 
(h) GAO STUDY REGARDING MODIFICATIONS TO LOW-INCOME 
HOUSING TAX CREDIT.—Not later than December 31, 2012, the 
Comptroller General of the United States shall submit to Congress 
a report which analyzes the implementation of the modifications 
made by this subtitle to the low-income housing tax credit under 
section 42 of the Internal Revenue Code of 1986. Such report 
shall include an analysis of the distribution of credit allocations 
before and after the effective date of such modifications. 
(i) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided in this sub-
section, the amendments made by this section shall apply to 
buildings placed in service after the date of the enactment 
of this Act. 
(2) REPEAL OF BONDING REQUIREMENT ON DISPOSITION OF 
BUILDING.—The amendment made by subsection (c) shall apply 
to— 
(A) interests in buildings disposed after the date of 
the enactment of this Act, and 
(B) interests in buildings disposed of on or before such 
date if— 
(i) it is reasonably expected that such building 
will continue to be operated as a qualified low-income 
building (within the meaning of section 42 of the 
Internal Revenue Code of 1986) for the remaining 
compliance 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. 
(3) ENERGY EFFICIENCY AND HISTORIC NATURE TAKEN INTO 
ACCOUNT IN MAKING ALLOCATIONS.—The amendments made by 
subsection (d) shall apply to allocations made after December 
31, 2008. 
(4) CONTINUED ELIGIBILITY FOR STUDENTS WHO RECEIVED 
FOSTER
CARE
ASSISTANCE.—The amendments made by sub-
section (e) shall apply to determinations made after the date 
of the enactment of this Act. 
(5) TREATMENT
OF
RURAL
PROJECTS.—The amendment 
made by subsection (f) shall apply to determinations made 
after the date of the enactment of this Act. 
(6) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT.— 
The amendment made by subsection (g) shall apply to buildings 
placed in service before, on, or after the date of the enactment 
of this Act.
H. R. 3221—232 
SEC. 3005. TREATMENT OF MILITARY BASIC PAY. 
(a) IN
GENERAL.—Subparagraph (B) of section 142(d)(2) 
(relating to income of individuals; area median gross income) is 
amended— 
(1) by striking ‘‘The income’’ and inserting the following: 
‘‘(i) IN GENERAL.—The income’’, and 
(2) by adding at the end the following: 
‘‘(ii) SPECIAL
RULE
RELATING
TO
BASIC
HOUSING 
ALLOWANCES.—For purposes of determining income 
under this subparagraph, payments under section 403 
of title 37, United States Code, as a basic pay allowance 
for housing shall be disregarded with respect to any 
qualified building. 
‘‘(iii) QUALIFIED BUILDING.—For purposes of clause 
(ii), the term ‘qualified building’ means any building 
located— 
‘‘(I) in any county in which is located a quali-
fied military installation to which the number of 
members of the Armed Forces of the United States 
assigned to units based out of such qualified mili-
tary installation, as of June 1, 2008, has increased 
by not less than 20 percent, as compared to such 
number on December 31, 2005, or 
‘‘(II) in any county adjacent to a county 
described in subclause (I). 
‘‘(iv) QUALIFIED MILITARY INSTALLATION.—For pur-
poses of clause (iii), the term ‘qualified military 
installation’ means any military installation or facility 
the number of members of the Armed Forces of the 
United States assigned to which, as of June 1, 2008, 
is not less than 1,000.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to— 
(1) determinations made after the date of the enactment 
of this Act and before January 1, 2012, in the case of any 
qualified building (as defined in section 142(d)(2)(B)(iii) of the 
Internal Revenue Code of 1986)— 
(A) with respect to which housing credit dollar amounts 
have been allocated on or before the date of the enactment 
of this Act, or 
(B) with respect to buildings placed in service before 
such date of enactment, to the extent paragraph (1) of 
section 42(h) of such Code does not apply to such building 
by reason of paragraph (4) thereof, but only with respect 
to bonds issued before such date of enactment, and 
(2) determinations made after the date of enactment of 
this Act, in the case of qualified buildings (as so defined)— 
(A) with respect to which housing credit dollar amounts 
are allocated after the date of the enactment of this Act 
and before January 1, 2012, or 
(B) with respect to which buildings placed in service 
after the date of enactment of this Act and before January 
1, 2012, to the extent paragraph (1) of section 42(h) of 
such Code does not apply to such building by reason of 
paragraph (4) thereof, but only with respect to bonds issued 
after such date of enactment and before January 1, 2012.
H. R. 3221—233 
PART II—MODIFICATIONS TO TAX-EXEMPT 
HOUSING BOND RULES 
SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESI-
DENTIAL RENTAL PROJECTS. 
(a) IN GENERAL.—Subsection (i) of section 146 (relating to treat-
ment 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 IRRESPECTIVE OF OBLIGOR.— 
‘‘(A) IN GENERAL.—If, during the 6-month period begin-
ning 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 repayment 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 refunding issue to the 
extent the principal amount of such refunding issue does 
not exceed the principal amount of the bonds refunded. 
‘‘(B) LIMITATIONS.—Subparagraph (A) shall apply to 
only one refunding of the original issue and only if— 
‘‘(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 refunded 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 financing 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. 3008. 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 following new subparagraph: 
‘‘(C) EXCEPTION FOR PROJECTS WITH RESPECT TO WHICH 
AFFORDABLE HOUSING CREDIT IS ALLOWED.—In the case of 
a project with respect 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) (relating to 
definitions and special rules) is amended by adding 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
H. R. 3221—234 
subsection (b), is 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 qualified residential 
rental projects for periods beginning after the date of the enactment 
of this Act, with respect to bonds issued before, on, or after such 
date. 
PART III—REFORMS RELATED TO THE LOW-IN-
COME HOUSING CREDIT AND TAX-EXEMPT 
HOUSING BONDS 
SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN AREA MEDIAN GROSS 
INCOME. 
(a) IN GENERAL.—Paragraph (2) of section 142(d), as amended 
by section 3008, is 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 subparagraph (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 cal-
endar year for which such determination is made. 
‘‘(ii) 
SPECIAL
RULE
FOR
CERTAIN
CENSUS 
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 this clause referred to as the current 
calendar year) shall be the greater of the amount deter-
mined without regard to this clause or the sum of— 
‘‘(I) the area median gross income determined 
under the HUD hold harmless policy with respect 
to such project for calendar year 2008, plus 
‘‘(II) any increase in the area median gross 
income determined under subparagraph (B) (deter-
mined without regard to the HUD hold harmless 
policy and this subparagraph) with respect to such 
project for the current calendar year over the area 
median gross income (as so determined) with 
respect to such project for calendar year 2008. 
‘‘(iii) HUD HOLD
HARMLESS
POLICY.—The term 
‘HUD hold harmless policy’ means the regulations 
under which a policy similar to the rules of clause 
(i) applied to prevent a change in the method of deter-
mining area median gross income from resulting in 
a reduction in the area median gross income deter-
mined with respect to certain projects in calendar years 
2007 and 2008.
H. R. 3221—235 
‘‘(iv) HUD HOLD HARMLESS IMPACTED PROJECT.— 
The term ‘HUD hold harmless impacted project’ means 
any project with respect to which area median gross 
income was determined under subparagraph (B) for 
calendar year 2007 or 2008 if such determination would 
have been less but for the HUD hold harmless policy.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to determinations of area median gross income for 
calendar years after 2008. 
SEC. 3010. EXCEPTION TO ANNUAL CURRENT INCOME DETERMINA-
TION REQUIREMENT WHERE DETERMINATION NOT REL-
EVANT. 
(a) IN GENERAL.—Subparagraph (A) of section 142(d)(3) is 
amended by adding at the end the following new sentence: ‘‘The 
preceding sentence shall not apply with respect to any project 
for any year if during such year no residential unit in the project 
is occupied by a new resident whose income exceeds the applicable 
income limit.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to years ending after the date of the enactment of 
this Act. 
Subtitle B—Single Family Housing 
SEC. 3011. FIRST-TIME HOMEBUYER CREDIT. 
(a) IN GENERAL.—Subpart C of part IV of subchapter A of 
chapter 1 is amended by redesignating section 36 as section 37 
and by inserting after section 35 the following new section: 
‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual who 
is a first-time homebuyer of a principal residence in the United 
States during a taxable year, there shall be allowed as a credit 
against the tax imposed by this subtitle for such taxable year 
an amount equal to 10 percent of the purchase price of the residence. 
‘‘(b) LIMITATIONS.— 
‘‘(1) DOLLAR LIMITATION.— 
‘‘(A) IN
GENERAL.—Except as otherwise provided in 
this paragraph, the credit allowed under subsection (a) 
shall not exceed $7,500. 
‘‘(B) MARRIED INDIVIDUALS FILING SEPARATELY.—In the 
case of a married individual filing a separate return, 
subparagraph (A) shall be applied by substituting ‘$3,750’ 
for ‘$7,500’. 
‘‘(C) OTHER INDIVIDUALS.—If two or more individuals 
who are not married purchase a principal residence, the 
amount of the credit allowed under subsection (a) shall 
be allocated among such individuals in such manner as 
the Secretary may prescribe, except that the total amount 
of the credits allowed to all such individuals shall not 
exceed $7,500. 
‘‘(2) LIMITATION
BASED
ON
MODIFIED
ADJUSTED
GROSS 
INCOME.— 
‘‘(A) IN GENERAL.—The amount allowable as a credit 
under subsection (a) (determined without regard to this 
paragraph) for the taxable year shall be reduced (but not
H. R. 3221—236 
below zero) by the amount which bears the same ratio 
to the amount which is so allowable as— 
‘‘(i) the excess (if any) of— 
‘‘(I) the taxpayer’s modified adjusted gross 
income for such taxable year, over 
‘‘(II) $75,000 ($150,000 in the case of a joint 
return), bears to 
‘‘(ii) $20,000. 
‘‘(B) MODIFIED ADJUSTED GROSS INCOME.—For purposes 
of subparagraph (A), the term ‘modified adjusted gross 
income’ means the adjusted gross income of the taxpayer 
for the taxable year increased by any amount excluded 
from gross income under section 911, 931, or 933. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) FIRST-TIME HOMEBUYER.—The term ‘first-time home-
buyer’ means any individual if such individual (and if married, 
such individual’s spouse) had no present ownership interest 
in a principal residence during the 3-year period ending on 
the date of the purchase of the principal residence to which 
this section applies. 
‘‘(2) PRINCIPAL RESIDENCE.—The term ‘principal residence’ 
has the same meaning as when used in section 121. 
‘‘(3) PURCHASE.— 
‘‘(A) IN
GENERAL.—The term ‘purchase’ means any 
acquisition, but only if— 
‘‘(i) the property is not acquired from a person 
related to the person acquiring such property, and 
‘‘(ii) the basis of the property in the hands of 
the person acquiring such property is not determined— 
‘‘(I) in whole or in part by reference to the 
adjusted basis of such property in the hands of 
the person from whom acquired, or 
‘‘(II) under section 1014(a) (relating to property 
acquired from a decedent). 
‘‘(B) CONSTRUCTION.—A residence which is constructed 
by the taxpayer shall be treated as purchased by the tax-
payer on the date the taxpayer first occupies such resi-
dence. 
‘‘(4) PURCHASE PRICE.—The term ‘purchase price’ means 
the adjusted basis of the principal residence on the date such 
residence is purchased. 
‘‘(5) RELATED
PERSONS.—A person shall be treated as 
related to another person if the relationship between such 
persons would result in the disallowance of losses under section 
267 or 707(b) (but, in applying section 267(b) and (c) for pur-
poses of this section, paragraph (4) of section 267(c) shall be 
treated as providing that the family of an individual shall 
include only his spouse, ancestors, and lineal descendants). 
‘‘(d) EXCEPTIONS.—No credit under subsection (a) shall be 
allowed to any taxpayer for any taxable year with respect to the 
purchase of a residence if— 
‘‘(1) a credit under section 1400C (relating to first-time 
homebuyer in the District of Columbia) is allowable to the 
taxpayer (or the taxpayer’s spouse) for such taxable year or 
any prior taxable year,
H. R. 3221—237 
‘‘(2) the residence is financed by the proceeds of a qualified 
mortgage issue the interest on which is exempt from tax under 
section 103, 
‘‘(3) the taxpayer is a nonresident alien, or 
‘‘(4) the taxpayer disposes of such residence (or such resi-
dence ceases to be the principal residence of the taxpayer 
(and, if married, the taxpayer’s spouse)) before the close of 
such taxable year. 
‘‘(e) 
REPORTING.—If 
the 
Secretary 
requires 
information 
reporting under section 6045 by a person described in subsection 
(e)(2) thereof to verify the eligibility of taxpayers for the credit 
allowable by this section, the exception provided by section 6045(e) 
shall not apply. 
‘‘(f) RECAPTURE OF CREDIT.— 
‘‘(1) IN GENERAL.—Except as otherwise provided in this 
subsection, if a credit under subsection (a) is allowed to a 
taxpayer, the tax imposed by this chapter shall be increased 
by 62⁄3 percent of the amount of such credit for each taxable 
year in the recapture period. 
‘‘(2) ACCELERATION OF RECAPTURE.—If a taxpayer 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 imposed by paragraph (1) for preceding 
taxable years, and 
‘‘(B) paragraph (1) shall not apply with respect 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 determined under paragraph 
(2) shall not exceed the amount of gain (if any) on such sale. 
Solely for purposes of the preceding sentence, the adjusted 
basis of such residence shall be reduced by the amount of 
the credit allowed under subsection (a) to the extent not pre-
viously 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.—Paragraph (2) shall 
not apply in the case of a residence which is compulsorily 
or involuntarily converted (within the meaning of section 
1033(a)) if the taxpayer acquires a new principal residence 
during the 2-year period beginning on the date of the 
disposition or cessation referred to in paragraph (2). Para-
graph (2) shall apply to such new principal residence during 
the recapture period in the same manner as if such new 
principal residence were the converted residence. 
‘‘(C) TRANSFERS
BETWEEN
SPOUSES
OR
INCIDENT
TO 
DIVORCE.—In the case of a transfer of a residence to which 
section 1041(a) applies—
H. R. 3221—238 
‘‘(i) paragraph (2) shall not apply to such transfer, 
and 
‘‘(ii) in the case of taxable years ending after such 
transfer, paragraphs (1) and (2) shall apply to the 
transferee in the same manner as if such transferee 
were the transferor (and shall not apply to the trans-
feror). 
‘‘(5) JOINT RETURNS.—In the case of a credit allowed under 
subsection (a) with respect to a joint return, half of such credit 
shall be treated as having been allowed to each individual 
filing such return for purposes of this subsection. 
‘‘(6) RETURN REQUIREMENT.—If the tax imposed by this 
chapter for the taxable year is increased under this subsection, 
the taxpayer shall, notwithstanding section 6012, be required 
to file a return with respect to the taxes imposed under this 
subtitle. 
‘‘(7) RECAPTURE PERIOD.—For purposes of this subsection, 
the term ‘recapture period’ means the 15 taxable years begin-
ning 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) ELECTION TO TREAT PURCHASE IN PRIOR YEAR.—In the 
case of a purchase of a principal residence after December 31, 
2008, and before July 1, 2009, a taxpayer may elect to treat such 
purchase as made on December 31, 2008, for purposes of this 
section (other than subsection (c)). 
‘‘(h) APPLICATION OF SECTION.—This section shall only apply 
to a principal residence purchased by the taxpayer on or after 
April 9, 2008, and before July 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 subparagraph (V), and by inserting 
after subparagraph (V) the following new subparagraph: 
‘‘(W) section 36(f) (relating to recapture of homebuyer 
credit).’’. 
(2) Section 6211(b)(4)(A) is amended by striking ‘‘34,’’ and 
all that follows through ‘‘6428’’ and inserting ‘‘34, 35, 36, 53(e), 
and 6428’’. 
(3) Section 1324(b)(2) of title 31, United States Code, is 
amended by inserting ‘‘36,’’ after ‘‘35,’’. 
(4) The table of sections for subpart C of part IV of sub-
chapter A of chapter 1 is amended by redesignating the item 
relating to section 36 as an item relating 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. 3012. 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 subparagraph (A), 
by striking the period at the end of subparagraph (B) and inserting 
‘‘, and’’, and by adding at the end the following new subparagraph: