Dennis Cardoza

Mr. CARDOZA

Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, House Resolution 703 provides for consideration of H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007 under the traditional closed rule. The rule provides 1 hour of general debate equally divided and controlled by the chairman and ranking member of the Committee on Ways and Means. The rule waives all points of order against consideration of the bill except for clauses 9 and 10 of rule XXI. Finally, the rule provides one motion to recommit with or without instructions. Mr. Speaker, as we have heard from countless media reports and I have seen in my own congressional district, the housing market is in crisis. Subprime mortgages and predatory lending practices are more prominent than ever. Home values have plunged 15 to 20 percent this year and foreclosures in the first 6 months of this year alone have surged 55 percent over the same period in 2006. Sadly, Mr. Speaker, I know these situations all too well. I represent communities that have been dubbed the Foreclosure Capital of the United States of America by the national media because of foreclosure rates of about one in 27 homes. I have seen the joy in families' eyes when they have been able to purchase their first home and achieve the American Dream. I have seen the tears when they struggle to make their payments and their dream is taken away. Mr. Speaker, losing your home to foreclosure is an unthinkable ordeal. The way I see it, if you are unfortunate enough to lose your home to foreclosure because you are struggling, you have suffered enough. You shouldn't be punished further by being taxed on what you no longer own. But that's exactly what's happening. Under current tax law, the IRS counts as income the amount of the mortgage debt that you have been forgiven by a lender as it is considered a ``gift'' and therefore subject to tax. This means that when many Americans lose their home to foreclosure, they are slapped with a tax bill when a lender discharges the debt on their home. Families are shocked--and frankly so am I--when they receive a tax bill for something they no longer own simply because of phantom income that is created when the so-called gift is forgiven. This double whammy, as Chairman Rangel likes to say, of someone losing their home to foreclosure, often because of circumstances beyond their control, and then facing a tax bill on top of that is neither fair nor equitable, and it has to stop. The bill before us today, H.R. 3648, addresses this very issue. The bill is quite simple. First, it exempts forgiven mortgage debt from being counted as income for tax purposes. This will prevent countless Americans from receiving a tax bill after they have lost their home to foreclosure. Second, H.R. 3648 provides for a 7-year extension of the tax deduction for private mortgage insurance, which is scheduled to end at the end of 2007. The deduction for PMI, as it is most commonly known, is critical to many low- and moderate-income families and first- time homebuyers who lack the traditional down payment. The PMI deduction allows them to purchase a home at lower cost while avoiding risky subprime or predatory second loans that would need to be made for them to make a down payment. Third, the bill makes it easier for owners of co-op housing units to qualify as a cooperative housing institution. H.R. 3648 also addresses a tax loophole regarding capital gains treatment from the sale of certain homes. Closing this unintended loophole will prevent people from switching back and forth between a primary and secondary residence to get a double tax benefit that was never intended. Mr. Speaker, the bipartisan bill before us today, H.R. 3648, was unanimously approved by the Ways and Means Committee, and it has the strong support of organizations such as the National Association of Home Builders, the Mortgage Bankers Association and the National Association of Realtors. I would like to thank Chairman Rangel and the Ways and Means Committee for their hard and thoughtful work in bringing this legislation to the floor today. Mr. Speaker, this bill provides more opportunities for people to buy a home, more options for families to keep their home, and eliminates an unfair tax bill should they in fact lose their home through unfortunate circumstances. I am proud to join many organizations and my colleagues on both sides of the aisle in supporting this commonsense legislation today. Mr. Speaker, I reserve the balance of my time.

Mr. CARDOZA. Mr. Speaker, I would just like to correct my colleague, the gentleman from Florida, my friend and great colleague on the committee, that on page 19 of the committee report issued after the bill was written, I would like to read section G, which reads: ``Pursuant to clause 9 of rule XXI of the rules of the House of Representatives, the Ways and Means Committee has determined that the bill as reported contains no congressional earmarks, limited tax benefits, or limited tariff benefits within the meaning of that rule.'' Further, Mr. Speaker, the gentleman has mentioned that Mr. McCrery had offered a substitute and that the majority had denied the minority the ability to bring that substitute up. That's correct, for good cause. The substitute was not paid for under the House PAYGO rules, and in fact violated the House PAYGO rules, and so was not deemed appropriate to be brought to the floor. Finally, that same substitute only made these very important tax loophole corrections and changes enabled for 3 years. We believe that this particular provision needs to be permanent in Federal law and that homeowners need to be protected if they lose their homes permanently. So, Mr. Speaker, we did not make Mr. McCrery's substitute in order. And, in fact, it has been the tradition that tax bills come to the floor under closed rules, even when Mr. Dreier and the Republicans were in charge, because of the complexity of tax law. If you amend that bill on the floor, we don't know how it will affect other clauses within that bill. So it has been the tradition, because of tax law complexity, that bills coming to the floor that deal with the Federal Tax Code do, in fact, come under closed rules. Mr. Speaker, declining property values and rapid increases in the number of foreclosures are causing a national housing and mortgage crisis. This is a commonsense bill. It is a bill that takes key steps in stabilizing the housing market. H.R. 3648 eliminates the double whammy of someone losing their home to foreclosure and then facing an additional tax bill right when they are down on their knees anyway. It reduces mortgage costs, making it easier for families to purchase a home while avoiding high-risk loans. Most importantly, it will help countless families avoid foreclosure and to stay in their homes. Mr. Speaker, the bill before us today, H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, is a necessary bill. Once again, it shows that the Democratic Congress is committed to addressing the mortgage crisis sweeping across our Nation. I want to thank Mr. Rangel and his committee for bringing this bill to the floor. Mr. Speaker, I urge a ``yes'' vote on the rule and on the previous question.

Mr. CARDOZA. Thank you, Mr. Speaker. For the purpose of debate only, I yield the customary 30 minutes to the gentleman from Florida (Mr. Lincoln Diaz-Balart). All time yielded during consideration of the rule is for debate only. General Leave

Mr. CARDOZA. I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on House Resolution 703.

Mr. CARDOZA. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 703 and ask for its immediate consideration.

Mr. CARDOZA. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. CARDOZA. Mr. Speaker, I would like to remind my friend and colleague from Florida that tax bills have traditionally been handled under closed rules, including when Mr. Dreier was chairman of the committee and when Mr. Diaz-Balart was the vice chairman of the committee. Mr. Speaker, I yield 5 minutes to the gentlewoman from Florida (Ms. Castor), a distinguished member of the committee.

Mr. CARDOZA

Mr. CARDOZA. The drug program. The unheard of tax cuts that were not paid for. There have been several things that have exposed the American Treasury to boondoggles, and they have been authored by the gentleman's party.

Mr. CARDOZA. My amendment is silent to the wind coverage, sir. It doesn't speak to that.

Mr. CARDOZA. This amendment's intent is to cover folks who are in flood areas now that are currently covered by levees that, through no fault of their own, FEMA's come in and decertified. They had regulations 2 years ago that said they were fine. They've changed regulations on these folks. So it's not my intent to affect in any way the wind portion of the policy.

Mr. CARDOZA. Mr. Chairman, I recognize my colleague from Texas (Mr. Reyes) for 1 minute.

Mr. CARDOZA. This amendment applies to levees.

Mr. CARDOZA. I would say there are several Republican boondoggles that we have seen in the last few years.

Mr. CARDOZA. Mr. Chairman, I yield myself 3\1/2\ minutes. I rise today in strong support of this amendment to H.R. 3121, the Flood Insurance Reform and Modernization Act of 2007. I thank the chairman of the committee, Mr. Frank, for his leadership on this issue. I would also be remiss if I did not mention that Congressman Hinojosa was very instrumental in helping me bring this amendment to the floor today, and his name was left off the list of coauthors although he was certainly instrumental, as well as Mrs. Lois Capps, our colleague from California who has a problem in the Santa Maria area and is also a supporter of this bill. I fully understand, Mr. Chairman, and appreciate the need to reform and modernize the National Flood Insurance Program. As we all know, the recent devastating hurricanes, Katrina, Rita and Wilma, not only ruined thousands of people's lives, but displaced tens of thousands of people and laid waste to millions of homes, causing billions of dollars in property damage, and they were exposed to the fragility of the National Flood Insurance Program. Mr. Taylor will speak later to that problem. At the same time, FEMA began a remapping of flood plains across the country. And while I agree that people should know whether they live in a protected area or not, FEMA's process has been terribly flawed from the beginning, and my constituents stand to suffer as a result. As we make the necessary reforms to the system, we must be cognizant of the impact this legislation could have on unsuspecting residents. FEMA's current plans to update the floodplain maps will force many people in my district and across the country to have to purchase flood insurance who are currently not required to purchase it. To add insult to injury, many of these people are low-income earners, and have no idea that this expense is looming. I commend the bill for recognizing this problem and taking some steps to address it; however, we must do more to help low-income people who will be affected. Our amendment addresses these concerns and blunts the impact the remapping process will have on low-income residents. This amendment says that people forced to purchase flood insurance as a result of a new map who live in an area that was previously certified and now have been decertified under the new FEMA process will have a grace period of 5 years in which they will be entitled to a 50 percent reduction in their flood insurance premium. The goal is that, during those 5 years, necessary upgrades will be made to the levees to bring them into compliance, thereby eliminating the mandatory requirement to purchase flood insurance. This amendment will have a huge impact on my district and many other parts of the country as well. It is simply unfair to, while requiring communities to upgrade their levees, also require them to purchase flood insurance at the same time. Many of these people are still paying on the levees that had initially protected them in the first place. By giving those who most need assistance a grace period, we are acknowledging the plight of these communities and taking action. This is the right thing to do. Moreover, given the volatile housing markets, we need to do everything possible to ensure people on the precipice remain in their homes. In my district, we have nearly 20,000 people who are currently facing foreclosure due to the subprime loan problem. Saddling these same people with more expenses when they can least afford it is counterproductive and contrary to the shared goal of promoting ownership. Let's help these people bring some balance to the flood insurance program and FEMA's remapping process. I urge my colleagues to support this amendment. I reserve the balance of my time.

Mr. CARDOZA. Mr. Chairman, I offer an amendment.

Mr. CARDOZA. I would yield.

Mr. CARDOZA. I yield my remaining time to the chairman of the committee, Mr. Frank.

Mr. CARDOZA. That is not what the Congressional Budget Office says.

Mr. CARDOZA

Mr. CARDOZA. Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. CARDOZA. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 682 and ask for its immediate consideration.

Mr. CARDOZA. Mr. Speaker, the gentleman discusses the question of an open rule. In fact, we adopted every amendment that was presented to the Rules Committee and brought it to the floor today. There were three amendments offered. All three amendments will be before the House today. And the question on a Small Business Committee bill that deals with the wide diversity that small businesses can impact really allows, under the House rules, under the germaneness rules, that almost any measure, not related to this bill, but almost any measure could be brought to the floor under an open rule. It's much more appropriate for the Rules Committee to manage the debate and the time spent on this House floor by asking all Members to submit their amendments that they might want to put forward on this particular bill and debate them in an orderly fashion on the floor. And that is why the committee adopted the rule that it did, a structured rule, to manage the rule in an appropriate rule way. The second question is on the question of earmarks that the gentleman raised. And I would just like to refer to page 24 of the report submitted to the House that accompanies this bill, and title XIV is a statement of no earmarks. I should read that to the House at this time. It says: ``Pursuant to clause 9 of rule XXI, H.R. 3567 does not contain any congressional earmarks, limited tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), or 9(f) of rule XXI.'' The statement is very clear that there are no earmarks in this bill. Mr. Speaker, the Democrats believe that small businesses are a fundamental part of our Nation's economic growth and that government has a responsibility to provide increased investment opportunities to ensure their long-term successes. H.R. 3567 creates a renewed focus on minority-owned small businesses and small businesses in low-income areas, both of which have been traditionally faced with difficulty in gaining access to equity investment. It also paves the way to better serve thousands of small businesses and give a much-needed jolt to our economy. Mr. Speaker, we must continue to shepherd our small businesses to give them every opportunity to succeed for today and for tomorrows yet to come. This bill will move us in that direction, and small businesses will be that much closer to making their dreams of prosperity a reality with the passage of this bill. I urge a ``yes'' vote on the rule and on the previous question. The material previously referred to by Mr. Hastings of Washington is as follows: Amendment to H. Res. 682 Offered by Mr. Hastings of Washington At the end of the resolution, add the following: Sec. 3. That immediately upon the adoption of this resolution the House shall, without intervention of any point of order, consider the resolution (H. Res. 479) to amend the Rules of the House of Representatives to provide for enforcement of clause 9 of rule XXI of the Rules of the House of Representatives. The resolution shall be considered as read. The previous question shall be considered as ordered on the resolution to final adoption without intervening motion or demand for division of the question except: (1) one hour of debate equally divided and controlled by the chairman and ranking minority member of the Committee on Rules; and (2) one motion to recommit.

Mr. CARDOZA. Mr. Speaker, House Resolution 682 provides for consideration of H.R. 3567, the Small Business Investment Expansion Act of 2007, under a structured rule. As the Clerk reported, the rule provides for 1 hour of general debate equally divided and controlled by the chairman and ranking minority member of the Committee on Small Business. The rule waives all points of order against consideration of the bill except for clause 9 and 10 of rule XXI. The rule makes in order all three amendments that were submitted for consideration that are printed in the Rules Committee report accompanying this resolution. Finally, the rule provides for one motion to recommit with or without instructions. Mr. Speaker, the Small Business Administration states that it ``helps Americans start, build, and grow businesses.'' Lately, however, the Small Business Administration's actions have spoken louder than their words. And, unfortunately, SBA's actions have not spurred innovation and development but stifled them. Given the high cost of purchasing additional capital assets, small businesses are dependent upon financing, which typically comes in the form of venture capital or angel investments. Despite the SBA's intent, its investment programs have fallen short and the needs of small business have gone unmet. In fact, due to SBA's ineffective investment programs, small businesses are now faced with more than $60 billion in unmet capital needs. This is a tragedy. Small businesses form the backbone of our economic growth. In fact, they are responsible for creating three out of every four jobs in the United States. Imagine how many businesses could grow and how many jobs could be created if we could deliver even a fraction of that unmet need. Small businesses are vital to our economy, and we cannot afford for our budding entrepreneurs to be denied the opportunity to succeed. By making the SBA an efficient partner in business development, small businesses will have better and more widespread access to venture capital and angel investments that they need. Mr. Speaker, the bill before us today, H.R. 3567, has strong bipartisan support. It passed the Small Business Committee by a voice vote. Among other things, H.R. 3567 streamlines the Small Business Investment Company program. Last year this public/private partnership leveraged more than $21 billion to over 2,000 small businesses. However, the current leverage limits are overly complex and the heavy reliance on debt-based lending programs has hampered the investment in veteran-, minority-, and women-owned businesses. H.R. 3567 will simplify how leverage caps are calculated and revise the limitations on aggregate investments to increase small business investment opportunities. In addition, it provides incentives to target veteran-, minority-, and women-owned businesses. Second, the bill updates the New Markets Venture Capital program. This program was established specifically to address the unmet equity needs of low-income communities. However, this program has been woefully underfunded, and as a result, investment in low-income communities has suffered. H.R. 3567 expands the New Markets Venture Capital program and provides additional incentives for small manufacturing companies in low-income areas. This will be especially important to areas like those in my district in Merced County. Third, the bill establishes a new Office of Angel Investment to focus on increasing equity investments in small businesses. Angel investors are high net-worth individuals who invest in and support start-up businesses in their early stages of growth and currently account for the creation of more than 51,000 new businesses every year. H.R. 3567 promotes this crucial source of financing for entrepreneurs through the creation of an Angel Investment program within SBA's investment division. This new program provides matching financing leverage to eligible angel groups with 10 or more investors. The bill also directs the SBA to create a Federal angel network, a searchable directory of angel groups on the SBA Web site to better match up angel investors with small businesses seeking financing. The bill also addresses many deficiencies in the Surety Bond program to assist small businesses in obtaining the backing they need to compete for construction contracts. Mr. Speaker, this bill reflects Democrats' commitment to providing real solutions to remove the obstacles facing America's small business owners, innovators, and entrepreneurs. I would like to thank the Small Business Committee for their hard work and thoughtful work in bringing this legislation to the floor today. In particular, I extend my thanks to my good friend from Pennsylvania (Mr. Altmire) and Chairwoman Velazquez. Mr. Speaker, we all recognize the importance of small business to our economy, and we must act on this bipartisan bill without further delay. Mr. Speaker, I reserve the balance of my time.

Mr. CARDOZA. Mr. Speaker, for the purposes of debate only, I yield the customary 30 minutes to the gentleman from Washington (Mr. Hastings). All time yielded during consideration of the rule is for debate only. I yield myself such time as I may consume and I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on House Resolution 682.

Mr. CARDOZA

Mr. CARDOZA. Mr. Speaker, I have no further Members who seek time on my side. I just wish to also thank my colleague from Virginia for his cooperation on working together with us to extend this program. Mr. Speaker, I reserve my time.

Mr. CARDOZA

Mr. CARDOZA. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I come before the House today to encourage passage of House Resolution 79, recognizing the establishment of Hunters for the Hungry programs across the United States and recognizing the contributions of those programs to decrease hunger and help feed those in need. Hunters for the Hungry is a unique and innovative program that addresses hunger in communities nationwide. Hunters can donate their game and fowl to Hunters for the Hungry which processes the meat and provides it to food banks and other feeding programs. This cooperative effort between hunters, processors, and the hunger community is an innovative example of how groups can work together toward a single worthy goal. This legislation received unanimous support in the House Agriculture Committee, and I strongly encourage passage of this bill. Mr. Speaker, I reserve the balance of my time.