,i #aacth ,,congress #ast ,session ,h4 ,r4 #abac ,,in ,,the ,,house ,,of ,,representatives ,march #ae1 #bjac ,mr4 ,ellison 7for himself and ,mr4 ,scott of ,virginia7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,financial ,services1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to replace the mortgage interest deduction with a nonrefundable credit for indebtedness secured by a residence1 to provide affordable housing to extremely low-income families1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,common ,sense ,housing ,investment ,act of #bjac4 #b4 ,congressional findings ,the ,congress finds the following3 7#a7 ,two principal ,federal housing goals are to increase the rate of home ownership and make rental housing affordable for low-income families and individuals4 7#b7 ,much more progress has been achieved on the first goal than on the second goal4 7#c7 ,the ,federal ,government devotes more than three times the amount of budgetary resources to supporting home ownership than it devotes to making affordable rental housing available4 7#d7 ,the burden of housing costs is more pronounced among renters than among owners4 7#e7 ,there is a shortage of more than #g million homes affordable to families in the bottom #bj percent of income1 meaning that there are only #cj affordable units for every #ajj families4 7#f7 ,only one in four families that qualify for rental housing assistance receives benefits4 7#g7 ,housing assistance waiting lists can be #aj years long and in many communities are closed4 7#h7 ,the shortage of rental homes that are affordable for extremely low-income households to be the principal cause of homelessness in the ,united ,states4 7#i7 ,public housing facilities in the ,united ,states have more than #bf billion in deferred maintenance after decades of neglect which results in a loss of #aj1jjj units each year4 7#aj7 ,the low-income housing tax credit successfully provides #ajj1jjj units of affordable housing every year4 7#aa7 ,every tax reform commission has recommended capping the mortgage interest deduction and converting it to a fairer and simpler credit4 7#ab7 ,more than #ge percent of the value of the mortgage interest deduction inures to the benefit of the top #bj percent of earners4 7#ac7 ,fewer than half of tax filers with a home mortgage claim the mortgage interest deduction4 7#ad7 ,only #i percent of rural tax filers claim the mortgage interest deduction4 7#ae7 ,ninety-six percent of homes sold between #bjje and #bjaa sold for less than #ejj1jjj4 7#af7 ,a better approach that provides equitable benefits for families who buy homes1 enables more low- and moderate-income homeowners to receive a benefit1 and invests in affordable rental housing to assist those who used to be homeless or who have extremely or very low incomes is needed to strengthen families and communities4 #c4 ,replacement of mortgage interest deduction with mortgage interest credit 7a7 ,nonrefundable credit ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf 7relating to nonrefundable personal credits7 is amended by inserting after section #be;,d the following new section3 #be;,e4 ,interest on indebtedness secured by qualified residence 7a7 ,allowance of credit ,in the case of an individual1 there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to #ae percent of the qualified residence interest paid or accrued during the taxable year4 7b7 ,qualified residence interest ,for purposes of this section-- 7#a7 ,in general ,the term qualified residence interest means interest which is paid or accrued during the taxable year on-- 7,a7 acquisition indebtedness with respect to any qualified residence of the taxpayer1 or 7,b7 home equity indebtedness with respect to any qualified residence of the taxpayer4 ,for purposes of the preceding sentence1 the determination of whether any property is a qualified residence of the taxpayer shall be made as of the time the interest is accrued4 7#b7 ,overall limitation ,the aggregate amount of indebtedness taken into account for any period for purposes of this section shall not exceed #ejj1jjj 7#bej1jjj in the case of a married individual filing a separate return74 7#c7 ,acquisition indebtedness ,the term acquisition indebtedness means any indebtedness which-- 7,a7 is incurred in acquiring1 constructing1 or substantially improving any qualified residence of the taxpayer1 and 7,b7 is secured by such residence4 ,such term also includes any indebtedness secured by such residence resulting from the refinancing of indebtedness meeting the requirements of the preceding sentence 7or this sentence71 but only to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness4 7#d7 ,home equity indebtedness 7,a7 ,in general ,the term home equity indebtedness means any indebtedness 7other than acquisition indebtedness7 secured by a qualified residence to the extent the aggregate amount of such indebtedness does not exceed-- 7i7 the fair market value of such qualified residence1 reduced by 7ii7 the amount of acquisition indebtedness with respect to such residence4 7,b7 ,limitation ,the aggregate amount treated as home equity indebtedness for any period shall not exceed #ajj1jjj 7#ej1jjj in the case of a married individual filing a separate return74 7c7 ,special rules ,for purposes of this section-- 7#a7 ,qualified residence ,the term qualified residence means-- 7,a7 the principal residence 7within the meaning of section #aba7 of the taxpayer1 and 7,b7 #a other residence of the taxpayer which is selected by the taxpayer for purposes of this subsection for the taxable year and which is used by the taxpayer as a residence 7within the meaning of section #bhj;,a7d77#a774 7#b7 ,married individuals filing separate returns ,if a married couple does not file a joint return for the taxable year-- 7,a7 such couple shall be treated as #a taxpayer for purposes of paragraph 7#a71 and 7,b7 each individual shall be entitled to take into account #a residence unless both individuals consent in writing to #a individual taking into account the principal residence and #a other residence4 7#c7 ,residence not rented ,for purposes of paragraph 7#a77;,b71 notwithstanding section #bhj;,a7d77#a71 if the taxpayer does not rent a dwelling unit at any time during a taxable year1 such unit may be treated as a residence for such taxable year4 7#d7 ,unenforceable security interests ,indebtedness shall not fail to be treated as secured by any property solely because1 under any applicable ,state or local homestead or other debtor protection law in effect on ,august #af1 #aihf1 the security interest is ineffective or the enforceability of the security interest is restricted4 7#e7 ,special rules for estates and trusts ,for purposes of determining whether any interest paid or accrued by an estate or trust is qualified residence interest1 any residence held by such estate or trust shall be treated as a qualified residence of such estate or trust if such estate or trust establishes that such residence is a qualified residence of a beneficiary who has a present interest in such estate or trust or an interest in the residuary of such estate or trust4 7d7 ,coordination with deduction ,in the case of any taxable year beginning in calendar years #bjad through #bjah1 the taxpayer may elect to apply this section in lieu of the deduction under section #afc for qualified residence interest4 4 7b7 ,phaseout of deduction ,section #afc7;h7 of such ,code is amended by adding at the end the following new paragraph3 7#f7 ,phaseout 7,a7 ,in general ,in the case of any taxable year beginning in a calendar year after #bjac1 the amount otherwise allowable as a deduction by reason of paragraph 7#b77;,d7 shall be the applicable percentage of such amount4 7,b7 ,applicable percentage ,for purposes of subparagraph 7,a71 the applicable percentage shall be determined in accordance with the following table3 ,for taxable years beginning in calendar year3,the applicable percentage is3 #bjadajj #bjaehj #bjaffj #bjagdj #bjahbj #bjai and thereafter#j4 4 7c7 ,phasedown of mortgage limit ,subparagraph 7,b7 of section #afc7;h77#c7 of such ,code is amended by adding at the end the following3 7iii7 ,phasedown 7,i7 ,in general ,in the case of any taxable year beginning in calendar years #bjad through #bjah1 clause 7ii7 shall be applied by substituting the amounts specified in the table in subclause 7,,ii7 of this clause for #a1jjj1jjj and #ejj1jjj1 respectively4 7,,ii7 ,phasedown amounts ,for purposes of subclause 7,i71 the amounts specified in this subclause for a taxable year shall be the amounts specified in the following table3 ,for taxable years beginning in calendar year3,amount substituted for #a1jjj1jjj3;,amount substituted for #ejj1jjj3 #bjada1jjj1jjjejj1jjj #bjaeijj1jjjdej1jjj #bjafhjj1jjjdjj1jjj #bjaggjj1jjjcej1jjj #bjahfjj1jjjcjj1jjj4 4 7d7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after section #be;,d the following new item3 ,sec4 #be;,e4 ,interest on indebtedness secured by qualified residence4 4 7e7 ,effective date ,the amendments made by this section shall apply with respect to interest paid or accrued after ,december #ca1 #bjac4 #d4 ,deduction allowed for interest and taxes relating to land for dwelling purposes owned or leased by cooperative housing corporations 7a7 ,in general ,subparagraph 7,b7 of section #baf7;b77#a7 of the ,internal ,revenue ,code of #aihf is amended by inserting or land1 after building14 7b7 ,effective date ,the amendment made by subsection 7a7 shall apply to amounts paid or accrued after ,december #ca1 #bjab4 #e4 ,use of mortgage interest savings to increase low-income housing tax credit 7a7 ,in general ,subclause 7,i7 of section #db7;h77#c77;,c77ii7 of the ,internal ,revenue ,code of #aihf is amended by striking #a4ge 7#a4ej for #bjja7 and inserting #b4gj4 7b7 ,inflation adjustment ,subparagraph 7,h7 of section #db7;h77#c7 of such ,code is amended to read as follows3 7,h7 ,cost-of-living adjustment 7i7 ,in general ,in the case of a calendar year after #bjjb1 the #b1jjj1jjj amount in subparagraph 7,c7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjja for calendar year #aiib in subparagraph 7,b7 thereof4 7ii7 ,per capita amount ,in the case of a calendar year after #bjad1 the #b4gj amount in subparagraph 7,c7 shall be increased by an amount equal to-- 7,i7 such dollar amount1 multiplied by 7,,ii7 the cost-of-living adjustment determined under section #a7;f77#c7 for such calendar year by substituting calendar year #bjac for calendar year #aiib in subparagraph 7,b7 thereof4 7iii7 ,rounding 7,i7 ,in the case of the #b1jjj1jjj amount1 any increase under clause 7i7 which is not a multiple of #e1jjj shall be rounded to the next lowest multiple of #e1jjj4 7,,ii7 ,in the case of the #b4gj amount1 any increase under clause 7ii7 which is not a multiple of #e cents shall be rounded to the next lowest multiple of #e cents4 4 7c7 ,eligible basis ,clause 7i7 of section #db7;d77#e77;,b7 of such ,code is amended by striking and at the end of subclause 7,i71 by striking the period at the end of subclause 7,,ii7 and inserting 1 and1 and by adding at the end the following3 7,,iii7 in the case of a building containing units which are designated to serve extremely low-income households by the ,state housing credit agency and require the increase in credit under this subparagraph in order for such building to be financially feasible as part of a qualified low-income housing project1 the eligible basis of such building determined by the portion of such units shall be #aej percent of such basis determined without regard to this subparagraph4 4 7d7 ,effective date ,the amendments made by this section shall apply to allocations made in calendar years beginning after ,december #ca1 #bjac4 #f4 ,use of mortgage interest savings for affordable housing programs 7a7 ,use of savings ,for each year1 the ,secretary of the ,treasury shall determine the amount of revenues accruing to the general fund of the ,treasury by reason of the enactment of section #c of this ,act that remain after use of such revenues in accordance with section #e of this ,act and shall credit an amount equal to such remaining revenues as follows3 7#a7 ,housing ,trust ,fund ,the ,secretary shall credit the ,housing ,trust ,fund established under section #acch of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #defh7 with an amount equal to #fj percent of the amount of such remaining revenues4 7#b7 ,section #h rental assistance ,the ,secretary shall credit an amount equal to #cj percent of the amount of such remaining revenues to the ,secretary of ,housing and ,urban ,development for use only for providing tenant- and project-based rental assistance under section #h of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;f74 7#c7 ,public ,housing ,capital ,fund ,the ,secretary shall credit an amount equal to #aj percent of the amount of such remaining revenues to the ,public ,housing ,capital ,fund under section #i7;d7 of the ,united ,states ,housing ,act of #aicg 7#db ,u4,s4,c4 #adcg;g7d774 7b7 ,changes to ,housing ,trust ,fund ,not later than the expiration of the #f-month period beginning on the date of the enactment of this ,act1 the ,secretary of ,housing and ,urban ,development shall revise the regulations relating to the ,housing ,trust ,fund established under section #acch of the ,federal ,housing ,enterprises ,financial ,safety and ,soundness ,act of #aiib 7#ab ,u4,s4,c4 #defh7 to provide that such section is carried out with the maximum amount of flexibility possible while complying with such section1 which shall include revising such regulations-- 7#a7 to increase the limitation on amounts from the ,fund that are available for use for operating assistance for housing2 7#b7 to allow public housing agencies and tribally designated housing entities to be recipient of grants amounts from the ,fund that are allocated to a ,state or ,state designated entity2 and 7#c7 eliminate the applicability of rules for the ,fund that are based on the ,,home ,investment ,partnerships ,act 7#db ,u4,s4,c4 #agba et seq474