[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 833 Introduced in House (IH)]
110th CONGRESS
1st Session
H. R. 833
To amend the Internal Revenue Code of 1986 to exclude from gross income
interest received on loans secured by agricultural real estate and
rural housing.
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IN THE HOUSE OF REPRESENTATIVES
February 6, 2007
Mr. Lewis of Kentucky (for himself, Mr. Paul, and Mr. Rogers of
Kentucky) introduced the following bill; which was referred to the
Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to exclude from gross income
interest received on loans secured by agricultural real estate and
rural housing.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Rural Communities Investment Act of
2007''.
SEC. 2. EXCLUSION FOR INTEREST ON LOANS SECURED BY AGRICULTURAL REAL
ESTATE AND RURAL HOUSING .
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by inserting after section 139A the
following new section:
``SEC. 139B. INTEREST ON LOANS SECURED BY AGRICULTURAL REAL ESTATE AND
RURAL HOUSING.
``(a) Exclusion.--Gross income shall not include interest received
by a qualified lender on any qualified real estate loan.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified lender.--The term `qualified lender' means
any bank or savings association the deposits of which are
insured under the Federal Deposit Insurance Act (12 U.S.C. 1811
et seq.).
``(2) Qualified real estate loan.--The term `qualified real
estate loan' means--
``(A) any indebtedness (including the refinancing
of indebtedness) secured by agricultural real estate or
by a leasehold mortgage (with a status as a lien) on
agricultural real estate, or
``(B) any indebtedness--
``(i) acquired for the purpose of
purchasing or improving rural housing, and
``(ii) secured by such rural housing or by
a leasehold mortgage (with a status as a lien)
on such rural housing.
``(3) Agricultural real estate.--
``(A) In general.--The term `agricultural real
estate' means real property used or available for the
production of 1 or more agricultural products.
``(B) When determination made.--For purposes of
subparagraph (A), the determination of whether property
securing any indebtedness is agricultural real estate
shall be made as of the time the interest income on
such indebtedness accrues.
``(4) Rural housing.--
``(A) In general.--The term `rural housing' means
any single family residence which is located in a rural
area and which is the principal residence (within the
meaning of section 121) of the borrower.
``(B) When determination made.--The determination
of whether property qualifies as rural housing with
respect to any indebtedness shall be made as of the
date such indebtedness originates.
``(5) Rural area.--The term `rural area' means an area (as
determined by the Secretary of Agriculture) which is not within
a metropolitan statistical area (as defined by the Office of
Management and Budget) and which has a population (determined
on the basis of the most recent decennial census for which date
are available) of 2,500 or less.
``(c) Coordination With Section 265.--For purposes of this section,
the rules of section 265 shall apply, as follows:
``(1) In general.--Qualified real estate loans shall be
treated as an obligation described in section 265(a)(2).
``(2) Pro rata allocation of interest expense of financial
institutions to tax-exempt interest.--In applying section
265(b)--
``(A) the term `tax-exempt obligation', as defined
in paragraph (4)(B) thereof, shall include a qualified
real estate loan,
``(B) the term `financial institution', as defined
in paragraph (5) thereof, shall include a qualified
lender, and
``(C) the term `qualified tax-exempt obligation',
as defined in paragraph (3)(B) thereof, shall include a
qualified real estate loan made after December 31,
2006, to a qualified small borrower.
For purposes of subparagraph (C), the term `qualified small
borrower' means, with respect to qualified real estate loans
received during any calendar year, any borrower if the
reasonably anticipated amount of qualified real estate loans
which will be received by such borrower during such calendar
year does not exceed $10,000,000.''.
(b) Clerical Amendment.--The table of sections for such part III is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. Interest on loans secured by agricultural real estate and
rural housing.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
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