Detailed Instructions: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Q: SECTION 1. MODIFICATIONS AND INCREASED VOLUME CAP WITH RESPECT TO
QUALIFIED MORTGAGE BONDS.

(a) Use of Qualified Mortgage Bonds Proceeds 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 residence 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 appears.
''(iii) Subsection (d) (relating to 3-year
requirement) shall not apply.
''(iv) Subsection (e) (relating to purchase
price requirement) shall be applied by using
the market value of the residence at the time
of refinancing in lieu of the acquisition cost.
''(B) Qualified subprime loan.--
''(i) In general.--The term 'qualified
subprime loan' means an adjustable rate single-
family residential mortgage loan originated
after December 31, 2001, and before January 1,
2008, that the bond issuer determines has
characteristics that suggest both a reasonably
foreseeable risk of default and a reasonable
potential to avoid default with the benefit of
a lower cost refinancing.
''(ii) Considerations.--In making the
determination under clause (i), the bond issuer
may consider the following characteristics:
''(I) Loan payments which are
scheduled to increase by more than 10
percent after December 31, 2007, and
before January 1, 2011.
''(II) A loan-to-value ratio of 97
percent or greater at the time of the
original mortgage loan or at the time
of the refinancing of such loan after
adjustment for any decline in the fair
market value of the residence.
''(III) A borrower whose
creditworthiness is relatively low in
comparison to a prime borrower, based
on a lower credit score, such as a Fair
Isaac Credit Organization credit score
at the time of the original subprime
loan of less than 660 and the absence
of an increase in such score by more
than 10 percent since the time of the
original loan.
''(IV) Whether loan payments on the
original mortgage loan generally have
been made in a current, timely manner,
subject only to isolated late payments.
''(C) Termination.--This paragraph shall not apply
to any bonds issued after December 31, 2010.''.
(b) Increased Volume Cap for Qualified Mortgage Bonds.--
(1) In general.--Subsection (d) of section 146 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
''(5) Increase and set aside for qualified mortgage bonds
for 2008.--
''(A) In general.--The State ceiling for calendar
year 2008 shall be increased by $15,000,000,000.
''(B) Set aside.--
''(i) In general.--Not less than an amount
equal to each State's allocable share of the
increase in the State ceiling under
subparagraph (A) shall be allocated solely for
the purpose of a qualified mortgage issue which
meets the requirement clause (ii).
''(ii) Requirement.--A qualified mortgage
issue meets the requirement of this clause if
such issue meets the requirement of section
143(a)(2)(D)(i) (determined by substituting
'12-month period' for '42-month period' each
place it appears).''.
(2) Carryforward of unused limitations.--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).--No amount which is attributable to the
increase under subsection (d)(5) may be used--
''(A) for a carryforward purpose other than issuing
qualified mortgage bonds, and
''(B) to issue any bond after calendar year
2010.''.
(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--
''(I) any qualified 501(c)(3) bond
(as defined in section 145), or
''(II) any qualified mortgage bond
(as defined in section 143(a)) or
qualified veterans' mortgage bond (as
defined in section 143(b)) issued after
December 31, 2007, and before January
1, 2011.''.
(2) Conforming amendment.--The heading for section
57(a)(5)(C)(ii) is amended by striking ''qualified 501(c)(3)
bonds'' and inserting ''certain bonds''.
(d) Effective Date.--The amendments made by this section shall
apply to bonds issued after December 31, 2007.
A:
Amends the Internal Revenue Code to: (1) allow proceeds of qualified mortgage bonds to be used to refinance certain residential subprime loans issued between 2002 and 2008; (2) increase in 2008 limitations on issuance amounts for qualified mortgage bonds; and (3) exempt tax-exempt interest on qualified mortgage or veterans' mortgage bonds issued before 2011 from the alternative minimum tax.