Enhancing Credit Opportunities in Rural America Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 1872 To amend the Internal Revenue Code of 1986 to exclude from gross income interest received on certain loans secured by agricultural real property. IN THE HOUSE OF REPRESENTATIVES MARCH 26, 2019 Mr. WATKINS (for himself and Mr. MARSHALL) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of 1986 to exclude from gross income interest received on certain loans se- cured by agricultural real property. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Enhancing Credit Op- 4 portunities in Rural America Act of 2019’’ or as the 5 ‘‘ECORA Act of 2019’’. 6 VerDate Sep 11 2014 05:18 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1872.IH H1872 kjohnson on DSK79L0C42 with BILLS 2 •HR 1872 IH SEC. 2. EXCLUSION FOR INTEREST ON LOANS SECURED BY 1 AGRICULTURAL REAL PROPERTY. 2 (a) IN GENERAL.—Part III of subchapter B of chap- 3 ter 1 of the Internal Revenue Code of 1986 is amended 4 by inserting after section 139F the following new section: 5 ‘‘SEC. 139G. INTEREST ON LOANS SECURED BY AGRICUL- 6 TURAL REAL PROPERTY. 7 ‘‘(a) EXCLUSION.—Gross income shall not include in- 8 terest received by a qualified lender on any qualified real 9 estate loan. 10 ‘‘(b) DEFINITIONS.—For purposes of this section— 11 ‘‘(1) QUALIFIED LENDER.—The term ‘qualified 12 lender’ means any bank or savings association the 13 deposits of which are insured under the Federal De- 14 posit Insurance Act (12 U.S.C. 1811 et seq.). 15 ‘‘(2) QUALIFIED REAL ESTATE LOAN.—The 16 term ‘qualified real estate loan’ means any loan se- 17 cured by agricultural real estate or by a leasehold 18 mortgage (with a status as a lien) on agricultural 19 real estate. For purposes of the preceding sentence, 20 the determination of whether property securing such 21 loan is agricultural real estate shall be made as of 22 the time the interest income on such loan is accrued. 23 ‘‘(3) AGRICULTURAL REAL ESTATE.—The term 24 ‘agricultural real estate’ means— 25 VerDate Sep 11 2014 05:18 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1872.IH H1872 kjohnson on DSK79L0C42 with BILLS 3 •HR 1872 IH ‘‘(A) real property which is substantially 1 used for the production of one or more agricul- 2 tural products, and 3 ‘‘(B) any single family residence— 4 ‘‘(i) which is the principal residence 5 (within the meaning of section 121) of its 6 occupant, 7 ‘‘(ii) which is located in a rural area 8 (as determined by the Secretary of Agri- 9 culture), which is not within a Metropoli- 10 tan Statistical Area (as defined by the Of- 11 fice of Management and Budget) and 12 which has a population (determined on the 13 basis of the most recent decennial census 14 for which data are available) of 2,500 or 15 less, and 16 ‘‘(iii) which is purchased or improved 17 with the proceeds of the qualified real es- 18 tate loan. 19 ‘‘(c) COORDINATION WITH SECTION 265.—Qualified 20 real estate loans shall be treated as obligations described 21 in section 265(a)(2) the interest on which is wholly exempt 22 from the taxes imposed by this subtitle.’’. 23 VerDate Sep 11 2014 05:18 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1872.IH H1872 kjohnson on DSK79L0C42 with BILLS 4 •HR 1872 IH (b) CLERICAL AMENDMENT.—The table of sections 1 for such part III is amended by inserting after the item 2 relating to section 139F the following new item: 3 ‘‘Sec. 139G. Interest on loans secured by agricultural real property.’’. (c) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 the date of the enactment of this Act. 6 Æ VerDate Sep 11 2014 05:18 Apr 05, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H1872.IH H1872 kjohnson on DSK79L0C42 with BILLS