ECORA Act of 2021
Bill: S.2202 | Sponsor: Sen. Moran, Jerry (R-KS)
Policy area: Taxation

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.

To amend the Internal Revenue Code of 1986 to exclude from gross income 
    interest received on certain loans secured by agricultural real 
                               property.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Enhancing Credit Opportunities in 
Rural America Act of 2021'' or as the ``ECORA Act of 2021''.

SEC. 2. EXCLUSION FOR INTEREST ON LOANS SECURED BY AGRICULTURAL REAL 
              PROPERTY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 
139H the following new section:

``SEC. 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' 
        means--
                    ``(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.), or
                    ``(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) if 
                such entity is a legal person--
                            ``(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' means any loan secured by agricultural real estate 
        or by a leasehold mortgage (with a status as a lien) on 
        agricultural real estate. For purposes of the preceding 
        sentence, the determination of whether property securing such 
        loan is agricultural real estate shall be made as of the time 
        the interest income on such loan is accrued.
            ``(3) Agricultural real estate.--The term `agricultural 
        real estate' means--
                    ``(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.
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