S 3119 ISCommentsClose CommentsPermalink

To stimulate the economy by encouraging energy efficiency, infrastructure and workforce investment, and homeownership retention, and by amending the Internal Revenue Code of 1986 to provide certain business tax relief and incentives, and for other purposes.CommentsClose CommentsPermalink

June 12, 2008CommentsClose CommentsPermalink

Ms. COLLINS introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To stimulate the economy by encouraging energy efficiency, infrastructure and workforce investment, and homeownership retention, and by amending the Internal Revenue Code of 1986 to provide certain business tax relief and incentives, and for other purposes.CommentsClose CommentsPermalink

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the ‘Economic Recovery Act of 2008’.CommentsClose CommentsPermalink





(b) Table of Contents- The table of contents of this Act is as follows:CommentsClose CommentsPermalink





Sec. 1. Short title; table of contents.CommentsClose CommentsPermalink

TITLE I--TAX PROVISIONS

Sec. 101. Credit for replacement of wood-burning stoves meeting environmental standards.CommentsClose CommentsPermalink





Sec. 102. Renewable electricity production credit.CommentsClose CommentsPermalink





Sec. 103. Permanent increase in limitations on expensing of certain depreciable business assets; study on expensing limits.CommentsClose CommentsPermalink





Sec. 104. 15-year straight-line cost recovery for qualified restaurant property.CommentsClose CommentsPermalink

TITLE II--ENERGY PROVISIONS

Sec. 201. Weatherization assistance.CommentsClose CommentsPermalink





Sec. 202. Energy Star programs.CommentsClose CommentsPermalink

TITLE III--TRANSPORTATION PROVISIONS

Subtitle A--Build America Bonds

Sec. 301. Credit to holders of Build America bonds.CommentsClose CommentsPermalink





Sec. 302. Transportation Finance Corporation.CommentsClose CommentsPermalink

Subtitle B--Commercial Truck Fuel Savings

Sec. 311. Short title.CommentsClose CommentsPermalink





Sec. 312. Findings.CommentsClose CommentsPermalink





Sec. 313. Definitions.CommentsClose CommentsPermalink





Sec. 314. Waiver of highway funding reduction relating to weight of vehicles using Interstate System highways.CommentsClose CommentsPermalink





Sec. 315. GAO truck safety demonstration report.CommentsClose CommentsPermalink





Sec. 316. Responsibilities of States.CommentsClose CommentsPermalink

TITLE IV--WORKFORCE DEVELOPMENT

Sec. 401. Statewide and local workforce investment systems.CommentsClose CommentsPermalink

TITLE V--HOUSING PROVISIONS

Sec. 501. Insurance of homeownership retention mortgages.CommentsClose CommentsPermalink





Sec. 502. Study of auction or bulk refinance program.CommentsClose CommentsPermalink

TITLE I--TAX PROVISIONSCommentsClose CommentsPermalink

SEC. 101. CREDIT FOR REPLACEMENT OF WOOD-BURNING STOVES MEETING ENVIRONMENTAL STANDARDS.

(a) In General- Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable personal credits) is amended by inserting after section 25D the following new section:CommentsClose CommentsPermalink

‘SEC. 25E. REPLACEMENT OF WOOD-BURNING STOVES.

‘(a) Allowance of Credit- In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the qualified stove replacement expenditures paid or incurred by the taxpayer for the taxable year.CommentsClose CommentsPermalink





‘(b) Limitation- The amount of the credit under subsection (a) with respect to the replacement of each non-compliant wood stove shall not exceed $500.CommentsClose CommentsPermalink





‘(c) Qualified Stove Replacement Expenditures- For purposes of this section--CommentsClose CommentsPermalink





‘(1) IN GENERAL- The term ‘qualified stove replacement expenditures’ means expenditures made by the taxpayer for the purchase and installation of a compliant stove which--CommentsClose CommentsPermalink





‘(A) is installed in a dwelling unit located in the United States, andCommentsClose CommentsPermalink





‘(B) replaces a noncompliant wood stove used in such dwelling unit.CommentsClose CommentsPermalink





Such term includes expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the compliant stove.CommentsClose CommentsPermalink





‘(2) COMPLIANT STOVE- The term ‘compliant stove’ means--CommentsClose CommentsPermalink





‘(A) a wood-burning stove which meets the requirements set forth in the ‘Standards of Performance for New Residential Wood Heaters’ issued by the Environmental Protection Agency, andCommentsClose CommentsPermalink





‘(B) a pellet or corn-burning stove.CommentsClose CommentsPermalink





‘(3) NONCOMPLIANT WOOD STOVE- The term ‘noncompliant wood stove’ means any wood-burning stove that is not a compliant stove.CommentsClose CommentsPermalink





‘(d) Joint Occupancy, Cooperative Housing Corporations, and When Expenditure Made- Rules similar to the rules of paragraphs (4), (5), and (8) of section 25D(e) shall apply for purposes of this section.CommentsClose CommentsPermalink





‘(e) Basis Adjustment- For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.CommentsClose CommentsPermalink





‘(f) Termination- This section shall not apply to expenditures made after December 31, 2010.’.CommentsClose CommentsPermalink





(b) Conforming Amendments-CommentsClose CommentsPermalink





(1) Subsection (a) of section 1016 of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(A) by striking ‘and’ at the end of paragraph (35),CommentsClose CommentsPermalink





(B) by striking the period at the end of paragraph (36) and inserting ‘, and’, andCommentsClose CommentsPermalink





(C) by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(37) to the extent provided in section 25E(e), in the case of amounts with respect to which a credit has been allowed under section 25E.’.CommentsClose CommentsPermalink





(2) The table of sections for subpart A of part IV of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 25D the following new item:CommentsClose CommentsPermalink





‘Sec. 25E. Replacement of wood-burning stoves.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to expenditures for stoves purchased after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 102. RENEWABLE ELECTRICITY PRODUCTION CREDIT.

(a) Extension- Section 45(d) of the Internal Revenue Code of 1986 (relating to qualified facilities) is amended by striking ‘January 1, 2009’ each place it appears in paragraphs (1), (2), (3), (4), (5), and (7) and inserting ‘January 1, 2012’.CommentsClose CommentsPermalink





(b) Repeal of Municipal Solid Waste as Qualified Resource-CommentsClose CommentsPermalink





(1) IN GENERAL- Paragraph (1) of section 45(c) of the Internal Revenue Code of 1986 is amended by inserting ‘and’ at the end of subparagraph (F) and by striking subparagraph (G).CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Subsection (d) of section 45 of such Code is amended by striking paragraph (6).CommentsClose CommentsPermalink





(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to property placed in service after the date of the enactment of this Act.CommentsClose CommentsPermalink





(c) Extension of Credit for Residential Energy Efficient Property- Subsection (g) of section 25D of the Internal Revenue Code of 1986 (relating to termination) is amended by striking ‘December 31, 2008’ and inserting ‘December 31, 2012’.CommentsClose CommentsPermalink

SEC. 103. PERMANENT INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN DEPRECIABLE BUSINESS ASSETS; STUDY ON EXPENSING LIMITS.

(a) In General- Subsection (b) of section 179 of the Internal Revenue Code of 1986 (relating to limitations) is amended--CommentsClose CommentsPermalink





(1) by striking ‘$25,000’ and all that follows in paragraph (1) and inserting ‘$128,000.’,CommentsClose CommentsPermalink





(2) by striking ‘$200,000’ and all that follows in paragraph (2) and inserting ‘$512,000.’,CommentsClose CommentsPermalink





(3) by striking ‘after 2007 and before 2011, the $125,000 and $500,000’ in paragraph (5)(A) and inserting ‘after 2008, the $128,000 and the $512,000’,CommentsClose CommentsPermalink





(4) by striking ‘2006’ in paragraph (5)(A)(ii) and inserting ‘2007’, andCommentsClose CommentsPermalink





(5) by striking paragraph (7).CommentsClose CommentsPermalink





(b) Study-CommentsClose CommentsPermalink





(1) IN GENERAL- The Secretary of the Treasury shall conduct a study on the use and impact of increased limitations on expensing of depreciable business assets under section 179 of the Internal Revenue Code of 1986, including--CommentsClose CommentsPermalink





(A) the use of expensing following the increase of limitations in 2003, 2007, and 2008;CommentsClose CommentsPermalink





(B) the impact of higher limitations on expensing on small businesses, including information on businesses by size and industry; andCommentsClose CommentsPermalink





(C) the impact of higher limitations on expensing on economic activity, including business investment, business expansion, and job growth.CommentsClose CommentsPermalink





(2) REPORT- The Secretary of the Treasury shall, not later than one year after the date of the enactment of this Act, submit a report on the results of the study required under paragraph (1) to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate.CommentsClose CommentsPermalink





(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2008.CommentsClose CommentsPermalink

SEC. 104. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED RESTAURANT PROPERTY.

(a) In General- Clause (v) of section 168(e)(3)(E) of the Internal Revenue Code of 1986 (relating to 15-year property) is amended by striking ‘January 1, 2008’ and inserting ‘January 1, 2010’.CommentsClose CommentsPermalink





(b) Effective Date- The amendment made by this section shall apply to property placed in service after December 31, 2007.CommentsClose CommentsPermalink

TITLE II--ENERGY PROVISIONSCommentsClose CommentsPermalink

SEC. 201. WEATHERIZATION ASSISTANCE.

Section 422 of the Energy Conservation and Production Act (42 U.S.C. 6872) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 422. AUTHORIZATION OF APPROPRIATIONS.

‘There are authorized to be appropriated to carry out the weatherization program under this part--CommentsClose CommentsPermalink





‘(1) $1,000,000,000 for fiscal year 2009;CommentsClose CommentsPermalink





‘(2) $1,200,000,000 for fiscal year 2010; andCommentsClose CommentsPermalink





‘(3) $1,400,000,000 for fiscal year 2011.’.CommentsClose CommentsPermalink

SEC. 202. ENERGY STAR PROGRAMS.

There are authorized to be appropriated for use in carrying out the Energy Star program under section 324A of the Energy Policy and Conservation Act (42 U.S.C. 6294a)--CommentsClose CommentsPermalink





(1) to the Administrator of the Environmental Protection Agency, $100,000,000 for each fiscal year; andCommentsClose CommentsPermalink





(2) to the Secretary of Energy, $12,000,000 for each fiscal year.CommentsClose CommentsPermalink

TITLE III--TRANSPORTATION PROVISIONSCommentsClose CommentsPermalink

Subtitle A--Build America BondsCommentsClose CommentsPermalink

SEC. 301. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

(a) In General- Subpart H of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to nonrefundable credit to holders of certain bonds) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 54A. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

‘(a) Allowance of Credit- If a taxpayer holds a Build America bond on 1 or more credit allowance dates of the bond occurring during any taxable year, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the credits determined under subsection (b) with respect to such dates.CommentsClose CommentsPermalink





‘(b) Amount of Credit-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The amount of the credit determined under this subsection with respect to any credit allowance date for a Build America bond is 25 percent of the annual credit determined with respect to such bond.CommentsClose CommentsPermalink





‘(2) ANNUAL CREDIT- The annual credit determined with respect to any Build America bond is the product of--CommentsClose CommentsPermalink





‘(A) the applicable credit rate, multiplied byCommentsClose CommentsPermalink





‘(B) the outstanding face amount of the bond.CommentsClose CommentsPermalink





‘(3) APPLICABLE CREDIT RATE- For purposes of paragraph (2), the applicable credit rate with respect to an issue is the rate equal to an average market yield (as of the day before the date of sale of the issue) on outstanding long-term corporate debt obligations (determined in such manner as the Secretary prescribes).CommentsClose CommentsPermalink





‘(4) CREDIT ALLOWANCE DATE- For purposes of this section, the term ‘credit allowance date’ means--CommentsClose CommentsPermalink





‘(A) March 15,CommentsClose CommentsPermalink





‘(B) June 15,CommentsClose CommentsPermalink





‘(C) September 15, andCommentsClose CommentsPermalink





‘(D) December 15.CommentsClose CommentsPermalink





Such term includes the last day on which the bond is outstanding.CommentsClose CommentsPermalink





‘(5) SPECIAL RULE FOR ISSUANCE AND REDEMPTION- In the case of a bond which is issued during the 3-month period ending on a credit allowance date, the amount of the credit determined under this subsection with respect to such credit allowance date shall be a ratable portion of the credit otherwise determined based on the portion of the 3-month period during which the bond is outstanding. A similar rule shall apply when the bond is redeemed or matures.CommentsClose CommentsPermalink





‘(c) Limitation Based on Amount of Tax- The credit allowed under subsection (a) for any taxable year shall not exceed the excess of--CommentsClose CommentsPermalink





‘(1) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by section 55, overCommentsClose CommentsPermalink





‘(2) the sum of the credits allowable under this part (other than subpart C, section 1400N(l), and this section).CommentsClose CommentsPermalink





‘(d) Credit Included in Gross Income- Gross income includes the amount of the credit allowed to the taxpayer under this section (determined without regard to subsection (c)) and the amount so included shall be treated as interest income.CommentsClose CommentsPermalink





‘(e) Build America Bond- For purposes of this section, the term ‘Build America bond’ means any bond issued as part of an issue if--CommentsClose CommentsPermalink





‘(1) 95 percent or more of the proceeds of such issue are to be used for expenditures incurred after the date of the enactment of this section for 1 or more qualified projects pursuant to an allocation of such proceeds to such project or projects by the Transportation Finance Corporation,CommentsClose CommentsPermalink





‘(2) the bond is issued by the Transportation Finance Corporation and is in registered form (within the meaning of section 149(a)),CommentsClose CommentsPermalink





‘(3) the Transportation Finance Corporation certifies that it meets the State contribution requirement of subsection (l) with respect to such project, as in effect on the date of issuance,CommentsClose CommentsPermalink





‘(4) the Transportation Finance Corporation certifies that the State in which an approved qualified project is located meets the requirement described in subsection (m),CommentsClose CommentsPermalink





‘(5) the face amount of such bond, when added to the face amount of all Build America bonds previously issued in the calendar year, does not exceed the Build America bond limitation for such year under subsection (g),CommentsClose CommentsPermalink





‘(6) the term of each bond which is part of such issue does not exceed 30 years,CommentsClose CommentsPermalink





‘(7) the payment of principal with respect to such bond is the obligation of the Transportation Finance Corporation, andCommentsClose CommentsPermalink





‘(8) the issue meets the requirements of subsection (h).CommentsClose CommentsPermalink





‘(f) Qualified Project- For purposes of this section, the term ‘qualified project’ means the capital improvements to any transportation infrastructure project of any governmental unit or other person, including roads, bridges, rail and transit systems, ports, and inland waterways, proposed by 1 or more States and approved by the Transportation Finance Corporation, but does not include costs of operations or maintenance with respect to such project.CommentsClose CommentsPermalink





‘(g) Limitation on Amount of Bonds Designated-CommentsClose CommentsPermalink





‘(1) NATIONAL LIMITATION- There is a Build America bond limitation for each calendar year. Such limitation is--CommentsClose CommentsPermalink





‘(A) $5,000,000,000 for 2009,CommentsClose CommentsPermalink





‘(B) $5,000,000,000 for 2010,CommentsClose CommentsPermalink





‘(C) $10,000,000,000 for 2011,CommentsClose CommentsPermalink





‘(D) $10,000,000,000 for 2012,CommentsClose CommentsPermalink





‘(E) $10,000,000,000 for 2013,CommentsClose CommentsPermalink





‘(F) $10,000,000,000 for 2014, andCommentsClose CommentsPermalink





‘(G) except as provided in paragraph (4), zero thereafter.CommentsClose CommentsPermalink





‘(2) MINIMUM ALLOCATIONS TO STATES- In making allocations for each calendar year under subsection (e)(1), the Transportation Finance Corporation shall ensure that the amount allocated for qualified projects located in each State for such calendar year is not less than 1 percent of the total amount allocated for such year.CommentsClose CommentsPermalink





‘(3) CARRYOVER OF UNUSED ISSUANCE LIMITATION- If for any calendar year the limitation amount imposed by paragraph (1) exceeds the amount of Build America bonds issued during such year, such excess shall be carried forward to one or more succeeding calendar years as an addition to the limitation imposed by paragraph (1) and until used by issuance of Build America bonds.CommentsClose CommentsPermalink





‘(4) ISSUANCE OF SMALL DENOMINATION BONDS- From the Build America bond limitation for each year, the Transportation Finance Corporation shall issue a limited quantity of Build America bonds in small denominations suitable for purchase as gifts by individual investors wishing to show their support for investing in America’s transportation infrastructure.CommentsClose CommentsPermalink





‘(h) Special Rules Relating to Expenditures-CommentsClose CommentsPermalink





‘(1) IN GENERAL- An issue shall be treated as meeting the requirements of this subsection if, as of the date of issuance, the Transportation Finance Corporation reasonably expects--CommentsClose CommentsPermalink





‘(A) at least 95 percent of the proceeds of such issue are to be spent for 1 or more qualified projects within the 5-year period beginning on such date,CommentsClose CommentsPermalink





‘(B) to incur a binding commitment with a State or third party to spend at least 10 percent of the proceeds of such issue, or to commence construction, with respect to such projects within the 12-month period beginning on such date, andCommentsClose CommentsPermalink





‘(C) to proceed with due diligence to complete such projects and to spend the proceeds of such issue.CommentsClose CommentsPermalink





‘(2) RULES REGARDING CONTINUING COMPLIANCE AFTER 5-YEAR DETERMINATION- To the extent that less than 95 percent of the proceeds of such issue are expended by the close of the 5-year period beginning on the date of issuance, the Transportation Finance Corporation shall redeem all of the nonqualified bonds within 90 days after the end of such period. For purposes of this paragraph, the amount of the nonqualified bonds required to be redeemed shall be determined in the same manner as under section 142.CommentsClose CommentsPermalink





‘(3) REALLOCATION- In the event the recipient of an allocation under subsection (g) after notice and a reasonable opportunity to take corrective action fails to demonstrate to the satisfaction of the Transportation Finance Corporation that its actions will allow the Transportation Finance Corporation to meet the requirements under this subsection, the Transportation Finance Corporation may redistribute the allocation meant for such recipient to other recipients.CommentsClose CommentsPermalink





‘(i) Special Rules Relating to Arbitrage- A bond which is a part of an issue shall not be treated as a Build America bond unless, with respect to the issue of which such bond is a part, the Transportation Finance Corporation satisfies the arbitrage requirements of section 148 with respect to proceeds of the issue.CommentsClose CommentsPermalink





‘(j) Recapture of Portion of Credit Where Cessation of Compliance- If any bond which when issued purported to be a Build America bond ceases to be such a bond, the Transportation Finance Corporation shall pay to the United States (at the time required by the Secretary) an amount equal to the sum of--CommentsClose CommentsPermalink





‘(1) the aggregate of the credits allowable under this section with respect to such bond (determined without regard to subsection (c)) for taxable years ending during the calendar year in which such cessation occurs and each succeeding calendar year ending with the calendar year in which such bond is redeemed by the Transportation Finance Corporation, andCommentsClose CommentsPermalink





‘(2) interest at the underpayment rate under section 6621 on the amount determined under paragraph (1) for each calendar year for the period beginning on the first day of such calendar year.CommentsClose CommentsPermalink





‘(k) Build America Bonds Trust Account-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The following amounts shall be held in a Build America Bonds Trust Account by the Transportation Finance Corporation:CommentsClose CommentsPermalink





‘(A) The proceeds from the sale of all bonds issued under this section.CommentsClose CommentsPermalink





‘(B) The investment earnings on proceeds from the sale of such bonds.CommentsClose CommentsPermalink





‘(C) The amount described in paragraph (2).CommentsClose CommentsPermalink





‘(D) Any earnings on any amounts described in subparagraph (A), (B), or (C).CommentsClose CommentsPermalink





‘(2) APPROPRIATION OF REVENUES- There is hereby appropriated to the Build America Bonds Trust Account an amount equal to the lesser of--CommentsClose CommentsPermalink





‘(A) the revenues resulting from the imposition of fees pursuant to section 13031 of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c) for fiscal years beginning after September 31, 2008, orCommentsClose CommentsPermalink





‘(B) $50,000,000,000.CommentsClose CommentsPermalink





‘(3) USE OF FUNDS- Amounts in the Build America Bonds Trust Account may be used only to pay costs of qualified projects, redeem Build America bonds, and fund the operations of the Transportation Finance Corporation, except that amounts withdrawn from the Build America Bonds Trust Account to pay costs of qualified projects may not exceed the proceeds from the sale of Build America bonds described in subsection (e)(1).CommentsClose CommentsPermalink





‘(4) USE OF REMAINING FUNDS IN BUILD AMERICA BONDS TRUST ACCOUNT- Upon the redemption of all Build America bonds issued under this section, any remaining amounts in the Build America Bonds Trust Account shall be available to the Transportation Finance Corporation to pay the costs of any qualified project.CommentsClose CommentsPermalink





‘(5) APPLICABILITY OF FEDERAL LAW- The requirements of any Federal law, including titles 23, 40, and 49 of the United States Code, which would otherwise apply to projects to which the United States is a party or to funds made available under such law and projects assisted with those funds shall apply to--CommentsClose CommentsPermalink





‘(A) funds made available under the Build America Bonds Trust Account for similar qualified projects, including contributions required under subsection (l), andCommentsClose CommentsPermalink





‘(B) similar qualified projects assisted by the Transportation Finance Corporation through the use of such funds.CommentsClose CommentsPermalink





‘(6) INVESTMENT- Subject to subsections (h) and (i), it shall be the duty of the Transportation Finance Corporation to invest in investment grade obligations such portion of the Build America Bonds Trust Account as is not, in the judgment of the Board of Directors of the Transportation Finance Corporation, required to meet current withdrawals. To the maximum extent practicable, investments should be made in securities that support infrastructure investment at the State and local level.CommentsClose CommentsPermalink





‘(l) State Contribution Requirements-CommentsClose CommentsPermalink





‘(1) IN GENERAL- For purposes of subsection (e)(3), the State contribution requirement of this subsection is met with respect to any qualified project if the Transportation Finance Corporation has received from 1 or more States, not later than the date of issuance of the bond, written commitments for matching contributions of not less than 20 percent (or such smaller percentage as determined under title 23, United States Code, for such State) of the cost of the qualified project.CommentsClose CommentsPermalink





‘(2) STATE MATCHING CONTRIBUTIONS MAY NOT INCLUDE FEDERAL FUNDS- For purposes of this subsection, State matching contributions shall not be derived, directly or indirectly, from Federal funds, including any transfers from the Highway Trust Fund under section 9503.CommentsClose CommentsPermalink





‘(m) Utilization of Updated Construction Technology for Qualified Projects- For purposes of subsection (e)(4), the requirement of this subsection is met if the appropriate State agency relating to the qualified project is utilizing updated construction technologies.CommentsClose CommentsPermalink





‘(n) Other Definitions and Special Rules- For purposes of this section--CommentsClose CommentsPermalink





‘(1) BOND- The term ‘bond’ includes any obligation.CommentsClose CommentsPermalink





‘(2) TRANSPORTATION FINANCE CORPORATION- The term ‘Transportation Finance Corporation’ means the corporation established under section 302(a) of the Economic Recovery Act of 2008.CommentsClose CommentsPermalink





‘(3) PARTNERSHIP; S CORPORATION; AND OTHER PASS-THRU ENTITIES-CommentsClose CommentsPermalink





‘(A) IN GENERAL- In the case of a partnership, trust, S corporation, or other pass-thru entity, rules similar to the rules of section 41(g) shall apply with respect to the credit allowable under subsection (a).CommentsClose CommentsPermalink





‘(B) NO BASIS ADJUSTMENT- In the case of a bond held by a partnership or an S corporation, rules similar to the rules under section 1397E(i) shall apply.CommentsClose CommentsPermalink





‘(4) BONDS HELD BY REGULATED INVESTMENT COMPANIES- If any Build America bond is held by a regulated investment company, the credit determined under subsection (a) shall be allowed to shareholders of such company under procedures prescribed by the Secretary.CommentsClose CommentsPermalink





‘(5) CREDITS MAY BE STRIPPED- Under regulations prescribed by the Secretary--CommentsClose CommentsPermalink





‘(A) IN GENERAL- There may be a separation (including at issuance) of the ownership of a Build America bond and the entitlement to the credit under this section with respect to such bond. In case of any such separation, the credit under this section shall be allowed to the person who on the credit allowance date holds the instrument evidencing the entitlement to the credit and not to the holder of the bond.CommentsClose CommentsPermalink





‘(B) CERTAIN RULES TO APPLY- In the case of a separation described in subparagraph (A), the rules of section 1286 shall apply to the Build America bond as if it were a stripped bond and to the credit under this section as if it were a stripped coupon.CommentsClose CommentsPermalink





‘(6) CREDITS MAY BE TRANSFERRED- Nothing in any law or rule of law shall be construed to limit the transferability of the credit or bond allowed by this section through sale and repurchase agreements.CommentsClose CommentsPermalink





‘(7) REPORTING- The Transportation Finance Corporation shall submit reports similar to the reports required under section 149(e).CommentsClose CommentsPermalink





‘(8) PROHIBITION ON USE OF HIGHWAY TRUST FUND- Notwithstanding any other provision of law, no funds derived from the Highway Trust Fund established under section 9503 shall be used to pay for credits under this section or for the administrative costs of the Transportation Finance Corporation.’.CommentsClose CommentsPermalink





(b) Reporting- Subsection (d) of section 6049 of the Internal Revenue Code of 1986 (relating to returns regarding payments of interest) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(9) REPORTING OF CREDIT ON BUILD AMERICA BONDS-CommentsClose CommentsPermalink





‘(A) IN GENERAL- For purposes of subsection (a), the term ‘interest’ includes amounts includible in gross income under section 54A(d) and such amounts shall be treated as paid on the credit allowance date (as defined in section 54A(b)(4)).CommentsClose CommentsPermalink





‘(B) REPORTING TO CORPORATIONS, ETC- Except as otherwise provided in regulations, in the case of any interest described in subparagraph (A), subsection (b)(4) shall be applied without regard to subparagraphs (A), (H), (I), (J), (K), and (L)(i) of such subsection.CommentsClose CommentsPermalink





‘(C) REGULATORY AUTHORITY- The Secretary may prescribe such regulations as are necessary or appropriate to carry out the purposes of this paragraph, including regulations which require more frequent or more detailed reporting.’.CommentsClose CommentsPermalink





(c) Conforming Amendment- Section 54(c)(2) of the Internal Revenue Code of 1986 is amended by inserting ‘section 54A,’ after ‘subpart C,’.CommentsClose CommentsPermalink





(d) Clerical Amendments- The table of sections for subpart H of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:CommentsClose CommentsPermalink





‘Sec. 54A. Credit for holders of Build America bonds.’.CommentsClose CommentsPermalink





(e) Effective Date- The amendments made by this section shall apply to bonds issued after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 302. TRANSPORTATION FINANCE CORPORATION.

(a) Recognition and Status- Congress grants consent and recognition to the establishment by 2 or more State infrastructure banks (established under section 610 of title 23, United States Code) of a multistate organization to be known as the ‘Transportation Finance Corporation’ (hereafter in this section referred to as the ‘Corporation’). Additional State infrastructure banks may join the Transportation Finance Corporation subsequent to its establishment.CommentsClose CommentsPermalink





(b) Functions of Corporation- The Corporation--CommentsClose CommentsPermalink





(1) is authorized to issue Build America bonds for the financing of qualified projects as required under section 54A of the Internal Revenue Code of 1986,CommentsClose CommentsPermalink





(2) is authorized to establish and operate the Build America Bonds Trust Account as required under section 54A(k) of such Code,CommentsClose CommentsPermalink





(3) is authorized to act as a centralized entity to provide financing for qualified projects (as defined in section 54A(f) of such Code),CommentsClose CommentsPermalink





(4) may--CommentsClose CommentsPermalink





(A) leverage resources and stimulate public and private investment in transportation infrastructure,CommentsClose CommentsPermalink





(B) encourage States to create additional opportunities for the financing of transportation infrastructure,CommentsClose CommentsPermalink





(C) perform any other function the sole purpose of which is to carry out the financing of qualified projects through Build America bonds, andCommentsClose CommentsPermalink





(5) not later than February 15 of each year shall submit a report to Congress describing the activities of the Corporation for the preceding year.CommentsClose CommentsPermalink





(c) Exemption From Taxes-CommentsClose CommentsPermalink





(1) IN GENERAL- The Corporation, including its franchise, capital, reserves, surplus, sinking funds, mortgages or other security holdings, and income, shall be exempt from all taxation now or hereafter imposed by the United States, by any territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority, except that any real property of the Corporation shall be subject to State, territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.CommentsClose CommentsPermalink





(2) FINANCIAL OBLIGATIONS- Build America bonds or other obligations issued by the Corporation and the interest on or tax credits with respect to its bonds or other obligations shall not be subject to taxation by any State, county, municipality, or local taxing authority.CommentsClose CommentsPermalink





(d) Construction Regarding Recognition and Status-CommentsClose CommentsPermalink





(1) IN GENERAL- Nothing in this section shall be construed to establish the Corporation as a department, agency, or instrumentality of the United States Government, to establish the members of any governing board or the officers and employees of the Corporation, as officers or employees of the United States Government, or to subject the Corporation to the provisions of title 31, United States Code.CommentsClose CommentsPermalink





(2) UNITED STATES NOT OBLIGATED- The deposit of Federal funds into the Build America Bonds Trust Account established under section 54A(k) of the Internal Revenue Code of 1986 shall not be construed as a commitment, guarantee, or obligation on the part of the United States to any third party, nor shall any third party have any right against the United States for payment solely by virtue of the contribution. Any security or debt-financing instrument issued by the Corporation shall expressly state that the security or instrument does not constitute a commitment, guarantee, or obligation of the United States.CommentsClose CommentsPermalink

Subtitle B--Commercial Truck Fuel SavingsCommentsClose CommentsPermalink

SEC. 311. SHORT TITLE.

This subtitle may be cited as the ‘Commercial Truck Fuel Savings Demonstration Act of 2008’.CommentsClose CommentsPermalink

SEC. 312. FINDINGS.

Congress finds that--CommentsClose CommentsPermalink





(1) diesel fuel prices have increased more than 50 percent during the 1-year period between May 2007 and May 2008;CommentsClose CommentsPermalink





(2) laws governing Federal highway funding effectively impose a limit of 80,000 pounds on the weight of vehicles permitted to use highways on the Interstate System;CommentsClose CommentsPermalink





(3) the administration of that provision in many States has forced heavy tractor-trailer and tractor-semitrailer combination vehicles traveling in those States to divert onto small State and local roads on which higher vehicle weight limits apply under State law;CommentsClose CommentsPermalink





(4) the diversion of those vehicles onto those roads increases fuel costs because of increased idling time and total travel time along those roads; andCommentsClose CommentsPermalink





(5) permitting heavy commercial vehicles, including tanker trucks carrying hazardous material and fuel oil, to travel on Interstate System highways when fuel prices are high would provide significant savings in the transportation of goods throughout the United States.CommentsClose CommentsPermalink

SEC. 313. DEFINITIONS.

In this subtitle:CommentsClose CommentsPermalink





(1) COMMISSIONER- The term ‘Commissioner’ means the Commissioner of Transportation of a State.CommentsClose CommentsPermalink





(2) COVERED INTERSTATE SYSTEM HIGHWAY-CommentsClose CommentsPermalink





(A) IN GENERAL- The term ‘covered Interstate System highway’ means a highway designated as a route on the Interstate System.CommentsClose CommentsPermalink





(B) EXCLUSION- The term ‘covered Interstate System highway’ does not include any portion of a highway that, as of the date of the enactment of this Act, is exempt from the requirements of subsection (a) of section 127 of title 23, United States Code, pursuant to a waiver under that subsection.CommentsClose CommentsPermalink





(3) INTERSTATE SYSTEM- The term ‘Interstate System’ has the meaning given the term in section 101(a) of title 23, United States Code.CommentsClose CommentsPermalink

SEC. 314. WAIVER OF HIGHWAY FUNDING REDUCTION RELATING TO WEIGHT OF VEHICLES USING INTERSTATE SYSTEM HIGHWAYS.

(a) Prohibition Relating to Certain Vehicles- Notwithstanding section 127(a) of title 23, United States Code, the total amount of funds apportioned to a State under section 104(b)(1) of that title for any period may not be reduced under section 127(a) of that title if a State permits a vehicle described in subsection (b) to use a covered Interstate System highway in the State in accordance with the conditions described in subsection (c).CommentsClose CommentsPermalink





(b) Combination Vehicles in Excess of 80,000 Pounds- A vehicle described in this subsection is a vehicle having a weight in excess of 80,000 pounds that--CommentsClose CommentsPermalink





(1) consists of a 3-axle tractor unit hauling a single trailer or semitrailer; andCommentsClose CommentsPermalink





(2) does not exceed any vehicle weight limitation that is applicable under the laws of a State to the operation of the vehicle on highways in the State that are not part of the Interstate System, as those laws are in effect on the date of enactment of this Act.CommentsClose CommentsPermalink





(c) Conditions- This section shall apply at any time at which the weighted average price of retail number 2 diesel in the United States is $3.50 or more per gallon.CommentsClose CommentsPermalink





(d) Effective Date and Termination- This section shall not remain in effect--CommentsClose CommentsPermalink





(1) after the date that is 2 years after the date of enactment of this Act; orCommentsClose CommentsPermalink





(2) before the end of that 2-year period, after any date on which the Secretary of Transportation--CommentsClose CommentsPermalink





(A) determines that--CommentsClose CommentsPermalink





(i) operation of vehicles described in subsection (b) on covered Interstate System highways has adversely affected safety on the overall highway network; orCommentsClose CommentsPermalink





(ii) a Commissioner has failed faithfully to use the highway safety committee as described in section 316(2)(A) or to collect the data described in section 316(3); andCommentsClose CommentsPermalink





(B) publishes the determination, together with the date of termination of this section, in the Federal Register.CommentsClose CommentsPermalink





(e) Consultation Regarding Termination for Safety- In making a determination under subsection (d)(2)(A)(i), the Secretary of Transportation shall consult with the highway safety committee established by a Commissioner in accordance with section 316.CommentsClose CommentsPermalink

SEC. 315. GAO TRUCK SAFETY DEMONSTRATION REPORT.

The Comptroller General of the United States shall carry out a study of the effects of participation in the program under section 314 on the safety of the overall highway network in States participating in that program.CommentsClose CommentsPermalink

SEC. 316. RESPONSIBILITIES OF STATES.

For the purpose of section 314, a State shall be considered to meet the conditions under this section if the Commissioner of the State--CommentsClose CommentsPermalink





(1) submits to the Secretary of Transportation a plan for use in meeting the conditions described in paragraphs (2) and (3);CommentsClose CommentsPermalink





(2) establishes and chairs a highway safety committee that--CommentsClose CommentsPermalink





(A) the Commissioner uses to review the data collected pursuant to paragraph (3); andCommentsClose CommentsPermalink





(B) consists of representatives of--CommentsClose CommentsPermalink





(i) agencies of the State that have responsibilities relating to highway safety;CommentsClose CommentsPermalink





(ii) municipalities of the State;CommentsClose CommentsPermalink





(iii) organizations that have evaluation or promotion of highway safety among the principal purposes of the organizations; andCommentsClose CommentsPermalink





(iv) the commercial trucking industry; andCommentsClose CommentsPermalink





(3) collects data on the net effects that the operation of vehicles described in section 314(b) on covered Interstate System highways have on the safety of the overall highway network, including the net effects on single-vehicle and multiple-vehicle collision rates for those vehicles.CommentsClose CommentsPermalink

TITLE IV--WORKFORCE DEVELOPMENTCommentsClose CommentsPermalink

SEC. 401. STATEWIDE AND LOCAL WORKFORCE INVESTMENT SYSTEMS.

Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 2872) is amended to read as follows:CommentsClose CommentsPermalink

‘SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

‘(a) Youth Activities-CommentsClose CommentsPermalink





‘(1) FISCAL YEAR 2009- There is authorized to be appropriated and there is appropriated to carry out the activities described in section 127(a), $1,174,000,000 for fiscal year 2009.CommentsClose CommentsPermalink





‘(2) FISCAL YEAR 2010- There are authorized to be appropriated to carry out the activities described in section 127(a), such sums as may be necessary for fiscal year 2010.CommentsClose CommentsPermalink





‘(b) Adult Employment and Training Activities-CommentsClose CommentsPermalink





‘(1) FISCAL YEAR 2009- There is authorized to be appropriated and there is appropriated to carry out the activities described in section 132(a)(1), $1,099,000,000 for fiscal year 2009.CommentsClose CommentsPermalink





‘(2) FISCAL YEAR 2010- There are authorized to be appropriated to carry out the activities described in section 132(a)(1), such sums as may be necessary for fiscal year 2010.CommentsClose CommentsPermalink





‘(c) Dislocated Worker Employment and Training Activities-CommentsClose CommentsPermalink





‘(1) FISCAL YEAR 2009- There is authorized to be appropriated and there is appropriated to carry out the activities described in section 132(a)(2), $1,945,000,000 for fiscal year 2009.CommentsClose CommentsPermalink





‘(2) FISCAL YEAR 2010- There are authorized to be appropriated to carry out the activities described in section 132(a)(2), such sums as may be necessary for fiscal year 2010.’.CommentsClose CommentsPermalink

TITLE V--HOUSING PROVISIONSCommentsClose CommentsPermalink

SEC. 501. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

(a) Mortgage Insurance Program- Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the following new section:CommentsClose CommentsPermalink

‘SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

‘(a) Authority-CommentsClose CommentsPermalink





‘(1) IN GENERAL- The Secretary shall, subject only to the absence of qualified request for insurance under this section and to the limitations under subsection (e) of this section and section 531(a), make commitments to insure and insure any mortgage covering a 1- to 4-family residence that is made for the purpose of paying or prepaying outstanding obligations under an existing mortgage or mortgages on the residence if the mortgage being insured under this section meets the requirements of this section, as established by the Secretary, and of section 203, except as modified by this section.CommentsClose CommentsPermalink





‘(2) ESTABLISHMENT AND IMPLEMENTATION OF PROGRAM REQUIREMENTS- The Secretary shall establish program requirements and standards under this section and the Secretary shall implement such requirements and standards. The Secretary may establish and implement any requirements or standards through interim guidance and mortgage letters.CommentsClose CommentsPermalink





‘(b) Requirements- To be eligible for insurance under this section, a mortgage shall comply with all of the following requirements:CommentsClose CommentsPermalink





‘(1) OWNER OCCUPIED PRINCIPAL RESIDENCE REQUIREMENT- The residence to be covered by the mortgage insured under this section shall be occupied by the mortgagor as the principal residence of the mortgagor.CommentsClose CommentsPermalink





‘(2) LACK OF CAPACITY TO PAY EXISTING MORTGAGE OR MORTGAGES-CommentsClose CommentsPermalink





‘(A) BORROWER CERTIFICATION- The mortgagor shall provide a certification to the originator of the mortgage that the mortgagor has not intentionally defaulted on the existing mortgage or mortgages.CommentsClose CommentsPermalink





‘(B) LOSS MITIGATION RESPONSIBILITIES- This section may not be construed to alter or in any way affect the responsibilities of any party (including the mortgage servicer) to engage in any or all loan modification or other loss mitigation strategies to maximize value to investors as established by any applicable contract.CommentsClose CommentsPermalink





‘(3) ELIGIBILITY OF MORTGAGES BY DATE OF ORIGINATION- The existing senior mortgage shall have been originated on before December 31, 2007.CommentsClose CommentsPermalink





‘(4) MAXIMUM LOAN TO VALUE RATIO FOR NEW LOANS- The mortgage being insured under this section shall involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve and including the mortgage insurance premium paid pursuant to subsection (d)(1)) in an amount not to exceed 90 percent of the current appraised value of the property. Section 203(d) shall not apply to mortgages insured under this section.CommentsClose CommentsPermalink





‘(5) REQUIRED WAIVER OF PREPAYMENT PENALTIES AND FEES- All penalties for prepayment of the existing mortgage or mortgages, and all fees and penalties related to default or delinquency on all existing mortgage or mortgages, shall be waived or forgiven.CommentsClose CommentsPermalink





‘(6) REQUIRED LOAN REDUCTION-CommentsClose CommentsPermalink





‘(A) REDUCTION OF INDEBTEDNESS UNDER EXISTING SENIOR MORTGAGE- The amount of indebtedness on the existing mortgage or mortgages on the residence shall have been substantially reduce by such percentage as the Secretary may require, and such reduction shall at least be sufficient to--CommentsClose CommentsPermalink





‘(i) provide for the refinancing of such existing mortgage or mortgages in an amount not greater than 90 percent of the current appraised value of the property involved;CommentsClose CommentsPermalink





‘(ii) pay the full amount of the single premium to be collected pursuant to subsection (d)(1) (which shall be an amount up to 3.0 percent of the amount of the original insured principal obligation of the mortgage insured under this section and which shall serve as an additional reserve to cover possible loan losses); andCommentsClose CommentsPermalink





‘(iii) pay the full amount of the loan origination fee and any other closing costs, not to exceed 2.0 percent of the amount of the original insured principal obligation of the mortgage insured under this section.CommentsClose CommentsPermalink





‘(B) EXTINGUISHMENT OF DEBT BY REFINANCING-CommentsClose CommentsPermalink





‘(i) REQUIRED AGREEMENT- All existing holders of mortgage liens on the property involved shall agree to accept the proceeds of the insured loan as payment in full of all indebtedness under all existing mortgages, and all encumbrances related to such mortgages shall be removed. The Secretary may take such action as the Secretary considers necessary or appropriate to facilitate coordination and agreement between the holders of the existing senior mortgage and any existing subordinate mortgages, taking into consideration the subordinate lien status of such subordinate mortgages, to comply with the requirement under this subparagraph.CommentsClose CommentsPermalink





‘(ii) TREATMENT OF MULTIPLE MORTGAGE LIENS- In addition to clause (i), the Secretary shall adopt 1 of the following approaches for all mortgages or such classes of mortgages as the Secretary may determine and may, from time to time, reconsider:CommentsClose CommentsPermalink





‘(I) FIXED PRICE- As a requirement for participation in this program, all existing lien holders will agree to not provide any payment to subordinate lien holders other than such payment in accordance with a formula established by the Secretary as set forth in clause (iii); except that the Secretary may establish a short period within which first and subordinate lien holders may negotiate to extinguish all subordinate liens for compensation that may be different from the amount determined under such formula set forth in clause (iii).CommentsClose CommentsPermalink





‘(II) SHARED EQUITY- The Secretary may require the mortgagor under a mortgage insured under this section to agree to share a portion of any future equity in the mortgaged property with holders of existing subordinate mortgages, in accordance with a formula for such shared equity established by the Secretary as set forth in clause (iii), except that payments of such shared equity may be made only after the Secretary recovers all amounts owed to the Secretary with respect to such mortgage pursuant to the program under this section (including amounts owed pursuant to paragraph (8)).CommentsClose CommentsPermalink





‘(iii) FORMULA- In determining a formula for determining any payments to subordinate lien holders pursuant to subclauses (I) and (II) of clause (ii), and in any reconsideration of such formula as the Secretary may from time to time undertake, the Secretary shall take into consideration the current market value of such liens.CommentsClose CommentsPermalink





‘(iv) VOLUNTARY PROGRAM- This subparagraph may not be construed to require any holder of any existing mortgage to participate in the program under this section generally, or with respect to any particular loan.CommentsClose CommentsPermalink





‘(v) SOURCE OF PAYMENTS FOR SUBORDINATE LOANS- Any amounts paid to holders of any existing subordinate mortgages in connection with the origination and insurance of a mortgage under this section shall derive only from--CommentsClose CommentsPermalink





‘(I) the holder of the existing senior mortgage; orCommentsClose CommentsPermalink





‘(II) in the case only of the shared equity approach under clause (ii)(II), the mortgagor under the mortgage insured under this section.CommentsClose CommentsPermalink





‘(7) REQUIRED REDUCTION OF DEBT SERVICE- The debt service payments due under the mortgage insured under this section shall be in an amount that is substantially reduced from the debt service payments due under the existing mortgage or mortgages, which reduction may be achieved through a reduction of indebtedness, a reduction in the interest rate being paid, or an extension of the term of the mortgage, or any combination thereof.CommentsClose CommentsPermalink





‘(8) FINANCIAL RECOVERY TO FEDERAL GOVERNMENT THROUGH EXIT PREMIUM-CommentsClose CommentsPermalink





‘(A) SUBORDINATE LIEN- The mortgage shall provide that the Secretary shall retain a lien on the residence involved, which shall be subordinate to the mortgage insured under this section but senior to all other mortgages on the residence that may exist at any time, and which shall secure the repayment of the amount due under subparagraph (D).CommentsClose CommentsPermalink





‘(B) NO INTEREST OR PAYMENT DURING MORTGAGE- The amount secured by the lien retained by the Secretary pursuant to subparagraph (A) shall not bear interest and shall not be repayable to the Secretary except as provided in subparagraph (D) of this paragraph.CommentsClose CommentsPermalink





‘(C) NET PROCEEDS AVAILABLE FOR EXIT PREMIUM- Upon the sale, refinancing, or other disposition of the residence covered by a mortgage insured under this section, any proceeds resulting from such disposition that remain after deducting the remaining insured principal balance of the mortgage insured under this section shall be available to meet the obligation under subparagraph (D).CommentsClose CommentsPermalink





‘(D) EXIT PREMIUM- Upon any refinancing of the mortgage insured under this section or any sale or disposition of the residence covered by the mortgage, the Secretary shall, subject to the availability of sufficient net proceeds in subparagraph (C), receive the greater of--CommentsClose CommentsPermalink





‘(i) 3 percent of the amount of the original insured principal obligation of the mortgage; orCommentsClose CommentsPermalink





‘(ii) a percentage of the portion of the net proceeds described in subparagraph (C), which shall be--CommentsClose CommentsPermalink





‘(I) in the case of any refinancing, sale, or disposition occurring during the first year of the term of the mortgage, 100 percent of such net proceeds;CommentsClose CommentsPermalink





‘(II) in the case of any refinancing, sale, or disposition occurring during the second year of the term of the mortgage, 80 percent;CommentsClose CommentsPermalink





‘(III) in the case of any refinancing, sale, or disposition occurring during the third year of the term of the mortgage, 60 percent;CommentsClose CommentsPermalink





‘(IV) in the case of any refinancing, sale or disposition occurring during the fourth year of the term of the mortgage, 40 percent;CommentsClose CommentsPermalink





‘(V) in the case of any refinancing, sale, or disposition occurring during the fifth year of the term of the mortgage, 20 percent; andCommentsClose CommentsPermalink





‘(VI) in the case of any refinancing, sale, or disposition occurring after the end of the fifth year, 0 percent.CommentsClose CommentsPermalink





‘(E) AUTHORITY TO PROHIBIT NEW SECOND LIENS- The Secretary may prohibit borrowers from granting a new second lien on the mortgaged property during the first 5 years of the term of the mortgage insured under this section.CommentsClose CommentsPermalink





‘(9) DOCUMENTATION AND VERIFICATION OF INCOME- In complying with the FHA underwriting requirements under the program under this section, the mortgagee under the mortgage shall document and verify the income of the mortgagor in accordance with procedures and standards that the Secretary shall establish.CommentsClose CommentsPermalink





‘(10) FIXED RATE MORTGAGE- The mortgage insured under this section shall bear interest at a single rate that is fixed for the entire term of the mortgage.CommentsClose CommentsPermalink





‘(c) Flexible Underwriting Criteria- The Secretary shall establish underwriting standards for mortgages insured under this section that--CommentsClose CommentsPermalink





‘(1) ensure that each mortgagor under a mortgage insured under this section has a reasonable expectation of repaying the mortgage, taking into consideration the mortgagor’s income, assets, liabilities, payment history, and other applicable criteria; andCommentsClose CommentsPermalink





‘(2) provide for the underwriter of the insured loan to provide such representations and warranties as the Secretary considers necessary or appropriate for the Secretary to enforce compliance with all underwriting and appraisal standards of the program.CommentsClose CommentsPermalink





‘(d) Premiums- For each mortgage insured under this section, the Secretary shall establish and collect--CommentsClose CommentsPermalink





‘(1) at the time of insurance, a single premium payment in an amount up to 3.0 percent of the amount of the original insured principal obligation of the mortgage, which shall be paid from the proceeds of the mortgage being insured under this section, through the reduction of the amount of indebtedness on the existing senior mortgage required under subsection (b)(6)(A);CommentsClose CommentsPermalink





‘(2) in addition to the premium under paragraph (1), annual premium payments in an amount up to 1.50 percent of the remaining insured principal balance of the mortgage; andCommentsClose CommentsPermalink





‘(3) an exit premium in the amount determined under subsection (b)(8), but which shall not be less than 3.0 percent of the original insured principal obligation of the mortgage, subject only to the availability of sufficient net proceeds from sale, refinancing, or other disposition of the property, as determined in subsection (b)(8).CommentsClose CommentsPermalink





‘(e) Limitation on Aggregate Insurance Authority- The aggregate original principal obligation of all mortgages insured under this section may not exceed $300,000,000,000.CommentsClose CommentsPermalink





‘(f) Enhancement of FHA Capacity- The Secretary shall take such actions as may be necessary to--CommentsClose CommentsPermalink





‘(1) contract for the establishment of underwriting criteria, automated underwriting systems, pricing standards, and other factors relating to eligibility for mortgages insured under this section;CommentsClose CommentsPermalink





‘(2) contract for independent quality reviews of underwriting, including appraisal reviews and fraud detection, of mortgages insured under this section or pools of such mortgages; andCommentsClose CommentsPermalink





‘(3) increase personnel of the Department as necessary to process or monitor the processing of mortgages insured under this section.CommentsClose CommentsPermalink





‘(g) Monitoring of Underwriting Risk-CommentsClose CommentsPermalink





‘(1) MONITORING OF DESIGNATED UNDERWRITERS- The Secretary shall monitor independent quality reviews as established pursuant to subsection (f)(2) to--CommentsClose CommentsPermalink





‘(A) determine compliance of designated underwriters with underwriting standards;CommentsClose CommentsPermalink





‘(B) determine rates of delinquency, claims rates, and loss rates of designated underwriters; andCommentsClose CommentsPermalink





‘(C) terminate eligibility of designated underwriters that do not meet minimum performance standards as the Secretary may establish and implement.CommentsClose CommentsPermalink





‘(2) REPORTS BY OVERSIGHT BOARD- The Secretary shall submit monthly reports to Congress identifying the progress of the program for mortgage insurance under this section, which shall contain the following information for each month:CommentsClose CommentsPermalink





‘(A) The number of new mortgages insured under this section, including the location of the properties subject to such mortgages by census tract.CommentsClose CommentsPermalink





‘(B) The aggregate principal obligation of new mortgages insured under this section.CommentsClose CommentsPermalink





‘(C) The average amount by which the indebtedness on existing mortgages is reduced in accordance with subsection (b)(6).CommentsClose CommentsPermalink





‘(D) The average amount by which the debt service payments on existing mortgages is reduced in accordance with subsection (b)(7).CommentsClose CommentsPermalink





‘(E) The amount of premiums collected for insurance of mortgages under this section.CommentsClose CommentsPermalink





‘(F) The claim and loss rates for mortgages insured under this section.CommentsClose CommentsPermalink





‘(G) The race, ethnicity, gender, and income of the mortgagors, aggregated by geographic areas at least as specific as census tracts, except where necessary to protect the privacy of the borrower.CommentsClose CommentsPermalink





‘(H) Any other information that the Secretary considers appropriate.CommentsClose CommentsPermalink





‘(3) REPORT BY INSPECTOR GENERAL- The Inspector General of the Department of Housing and Urban Development shall conduct an annual audit of the program for mortgage insurance under this section to determine compliance with this section and program rules.CommentsClose CommentsPermalink





‘(h) Definitions- For purposes of this section, the following definitions apply:CommentsClose CommentsPermalink





‘(1) EXISTING MORTGAGE- The term ‘existing mortgage’ means, with respect to a mortgage insured under this section, a mortgage that is to be extinguished, and paid or prepaid, from the proceeds of the mortgage insured under this section.CommentsClose CommentsPermalink





‘(2) EXISTING SENIOR MORTGAGE- The term ‘existing senior mortgage’ means, with respect to a mortgage insured under this section, the existing mortgage that has superior priority.CommentsClose CommentsPermalink





‘(3) EXISTING SUBORDINATE MORTGAGE- The term ‘existing subordinate mortgage’ means, with respect to a mortgage insured under this section, an existing mortgage that has subordinate priority to the existing senior mortgage.CommentsClose CommentsPermalink





‘(i) Sunset- The authority of the Secretary to make any new commitment to insure any mortgage under this section shall terminate upon the expiration of the 2-year period beginning on the date of the enactment of the Economic Recovery Act of 2008.’.CommentsClose CommentsPermalink

SEC. 502. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

(a) Study- The Board of Governors of the Federal Reserve System (in this section referred to as the ‘Board of Governors’), in consultation with the Secretary of Housing and Urban Development, shall conduct a study of the need for and efficacy of an auction or bulk refinancing mechanism to facilitate refinancing of existing residential mortgages that are at risk for foreclosure into mortgages insured under the mortgage insurance program under title II of the National Housing Act. The study shall identify and examine various options for mechanisms under which lenders and servicers of such mortgages may make bids for forward commitments for such insurance in an expedited manner.CommentsClose CommentsPermalink





(b) Content-CommentsClose CommentsPermalink





(1) ANALYSIS- The study required under subsection (a) shall analyze--CommentsClose CommentsPermalink





(A) the feasibility of establish a mechanism that would facilitate the more rapid refinancing of borrowers at risk of foreclosure into performing mortgages insured under title II of the National Housing Act;CommentsClose CommentsPermalink





(B) whether such a mechanism would provide an effective and efficient mechanism to reduce foreclosures on qualified existing mortgages;CommentsClose CommentsPermalink





(C) whether the use of an auction or bulk refinance program is necessary to stabilize the housing market and reduce the impact of turmoil in that market on the economy of the United States;CommentsClose CommentsPermalink





(D) whether there are other mechanisms or authority that would be useful to reduce foreclosure; andCommentsClose CommentsPermalink





(E) any other factors that the Board of Governors considers relevant.CommentsClose CommentsPermalink





(2) DETERMINATIONS- To the extent that the Board of Governors finds that a facility of the type described in paragraph (1) is feasible and useful, the study shall--CommentsClose CommentsPermalink





(A) determine and identify any additional authority or resources needed to establish and operate such a mechanism;CommentsClose CommentsPermalink





(B) determine whether there is a need for additional authority with respect to the loan underwriting criteria included in section 257 of the National Housing Act or with respect to the eligibility of participating borrowers, lenders, or holders of liens; andCommentsClose CommentsPermalink





(C) determine whether such underwriting criteria should be established on the basis of individual loans, in the aggregate, or otherwise to facilitate the goal of refinancing borrowers at risk of foreclosure into viable loans insured under the National Housing Act.CommentsClose CommentsPermalink





(c) Report- Not later than the expiration of the 60-day period beginning on the date of the enactment of this Act, the Board of Governors shall submit a report regarding the results of the study conducted under this section to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate. The report shall include a detailed description of the analyses required under subsection (b)(1) and the determinations made pursuant to subsection (b)(2), and shall include any other findings and recommendations of the Board of Governors pursuant to the study, including identifying various options for mechanisms described in subsection (a).CommentsClose CommentsPermalink