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Below is the section that covers the $7,500 tax credit for first-time homebuyers.

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 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 homebuyer’ 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 taxpayer on the date the taxpayer first occupies such residence.

`(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 purposes 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,

`(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 residence 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 6 2/3 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 previously 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). Paragraph (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–

`(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 transferor).

`(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 beginning 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 subchapter 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:

`(C) in the case of any taxable year beginning in 2008, the real property tax deduction.’.

(b) Definition- Section 63(c) is amended by adding at the end the following new paragraph:

`(7) REAL PROPERTY TAX DEDUCTION- For purposes of paragraph (1), the real property tax deduction is the lesser of–

`(A) the amount allowable as a deduction under this chapter for State and local taxes described in section 164(a)(1), or

`(B) $500 ($1,000 in the case of a joint return).

Any taxes taken into account under section 62(a) shall not be taken into account under this paragraph.’.

(c) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2007.

Subtitle C–General Provisions

SEC. 3021. TEMPORARY LIBERALIZATION OF TAX-EXEMPT HOUSING BOND RULES.

(a) Temporary Increase in Volume Cap-

(1) IN GENERAL- Subsection (d) of section 146 is amended by adding at the end the following new paragraph:

`(5) INCREASE AND SET ASIDE FOR HOUSING BONDS FOR 2008-

`(A) INCREASE FOR 2008- In the case of calendar year 2008, the State ceiling for each State shall be increased by an amount equal to $11,000,000,000 multiplied by a fraction–

`(i) the numerator of which is the State ceiling applicable to the State for calendar year 2008, determined without regard to this paragraph, and

`(ii) the denominator of which is the sum of the State ceilings determined under clause (i) for all States.

`(B) SET ASIDE-

`(i) IN GENERAL- Any amount of the State ceiling for any State which is attributable to an increase under this paragraph shall be allocated solely for one or more qualified housing issues.

`(ii) QUALIFIED HOUSING ISSUE- For purposes of this paragraph, the term `qualified housing issue’ means–

`(I) an issue described in section 142(a)(7) (relating to qualified residential rental projects), or

`(II) a qualified mortgage issue (determined by substituting `12-month period’ for `42-month period’ each place it appears in section 143(a)(2)(D)(i)).’.

(2) CARRYFORWARD OF UNUSED LIMITATIONS- Subsection (f) of section 146 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 any issue other than a qualified housing issue (as defined in subsection (d)(5)), or

`(B) to issue any bond after calendar year 2010.’.

(b) Temporary Rule for Use of Qualified Mortgage Bonds Proceeds for Subprime Refinancing Loans-

(1) IN GENERAL- Section 143(k) (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- Notwithstanding the requirements of subsection (i)(1), the proceeds of a qualified mortgage issue may be used to refinance a mortgage on a residence which was originally financed by the mortgagor through a qualified subprime loan.

`(B) SPECIAL RULES- In applying subparagraph (A) to any refinancing–

`(i) subsection (a)(2)(D)(i) shall be applied by substituting `12-month period’ for `42-month period’ each place it appears,

`(ii) subsection (d) (relating to 3-year requirement) shall not apply, and

`(iii) 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.

`(C) QUALIFIED SUBPRIME LOAN- The term `qualified subprime loan’ means an adjustable rate single-family residential mortgage loan made after December 31, 2001, and before January 1, 2008, that the bond issuer determines would be reasonably likely to cause financial hardship to the borrower if not refinanced.

`(D) TERMINATION- This paragraph shall not apply to any bonds issued after December 31, 2010.’.

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

SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM TAX LIMITATIONS ON TAX-EXEMPT HOUSING BONDS, LOW-INCOME HOUSING TAX CREDIT, AND REHABILITATION CREDIT.

(a) Tax-Exempt Interest on Certain Housing Bonds Exempted From Alternative Minimum Tax-

(1) IN GENERAL- Subparagraph (C) of section 57(a)(5) (relating to specified private activity bonds) is amended by redesignating clauses (iii) and (iv) as clauses (iv) and (v), respectively, and by inserting after clause (ii) the following new clause:

`(iii) EXCEPTION FOR CERTAIN HOUSING BONDS- For purposes of clause (i), the term `private activity bond’ shall not include any bond issued after the date of the enactment of this clause if such bond is–

`(I) an exempt facility bond issued as part of an issue 95 percent or more of the net proceeds of which are to be used to provide qualified residential rental projects (as defined in section 142(d)),

`(II) a qualified mortgage bond (as defined in section 143(a)), or

`(III) a qualified veterans’ mortgage bond (as defined in section 143(b)).

The preceding sentence shall not apply to any refunding bond unless such preceding sentence applied to the refunded bond (or in the case of a series of refundings, the original bond).’.

(2) NO ADJUSTMENT TO ADJUSTED CURRENT EARNINGS- Subparagraph (B) of section 56(g)(4) is amended by adding at the end the following new clause:

`(iii) TAX EXEMPT INTEREST ON CERTAIN HOUSING BONDS- Clause (i) shall not apply in the case of any interest on a bond to which section 57(a)(5)(C)(iii) applies.’.

(b) Allowance of Low-Income Housing Credit Against Alternative Minimum Tax- Subparagraph (B) of section 38(c)(4) (relating to specified credits) is amended by redesignating clauses (ii) through (iv) as clauses (iii) through (v) and inserting after clause (i) the following new clause:

`(ii) the credit determined under section 42 to the extent attributable to buildings placed in service after December 31, 2007,’.

(c) Allowance of Rehabilitation Credit Against Alternative Minimum Tax- Subparagraph (B) of section 38(c)(4), as amended by subsection (b), is amended by striking `and’ at the end of clause (iv), by redesignating clause (v) as clause (vi), and by inserting after clause (iv) the following new clause:

`(v) the credit determined under section 47 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007, and’.

(d) Effective Date-

(1) HOUSING BONDS- The amendments made by subsection (a) shall apply to bonds issued after the date of the enactment of this Act.

(2) LOW INCOME HOUSING CREDIT- The amendments made by subsection (b) shall apply to credits determined under section 42 of the Internal Revenue Code of 1986 to the extent attributable to buildings placed in service after December 31, 2007.

(3) REHABILITATION CREDIT- The amendments made by subsection (c) shall apply to credits determined under section 47 of the Internal Revenue Code of 1986 to the extent attributable to qualified rehabilitation expenditures properly taken into account for periods after December 31, 2007.