RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL PROJECTS.

SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR FINANCING RESIDENTIAL RENTAL PROJECTS.(a) In General.—Subsection (i) of section 146 (relating to treatment of refunding issues) is amended by adding at the end the following new paragraph:“(6) Treatment of certain residential rental project bonds as refunding bonds irrespective of obligor.—“(A) In general.—If, during the 6-month period beginning on the date of a repayment of a loan financed by an issue 95 percent or more of the net proceeds of which are used to provide projects described in section 142(d), such repayment is used to provide a new loan for any project so described, any bond which is issued to refinance such issue shall be treated as a refunding issue to the extent the principal amount of such refunding issue does not exceed the principal amount of the bonds refunded.“(B) Limitations.—Subparagraph (A) shall apply to only one refunding of the original issue and only if—“(i) the refunding issue is issued not later than 4 years after the date on which the original issue was issued,“(ii) the latest maturity date of any bond of the refunding issue is not later than 34 years after the date on which the refunded bond was issued, and“(iii) the refunding issue is approved in accordance with section 147(f) before the issuance of the refunding issue.”.(b) Low-Income Housing Credit.—Clause (ii) of section 42(h)(4)(A) is amended by inserting “or such financing is refunded as described in section 146(i)(6)” before the period at the end.(c) Effective Date.—The amendments made by this section shall apply to repayments of loans received after the date of the enactment of this Act.