,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #bhjb  ,,in ,,the ,,house ,,of  
,,representatives  ,june #g1 #bjag,mr4  
,coffman 7for himself1 ,mr4 ,sean       
,patrick ,maloney of ,new ,york1 and    
,mrs4 ,comstock7 introduced the         
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to provide a            
tax-preferred savings account for       
first-time homebuyers4  #a4 ,short title
 ,this ,act may be cited as the         
,first-,time ,homebuyer ,savings        
,account ,act of #bjag4  #b4 ,first-time
 homebuyer account  7a7 ,in general     
,subchapter ,f of chapter #a of the     
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new part3  ,,ix ,first-,time  
homebuyer accounts  ,sec4 #ecj;,a4      
,first-time homebuyer account4  #ecj;,a4
 ,first-time homebuyer account  7a7 ,in 
general ,a first-time homebuyer account 
shall be exempt from taxation under this

 subtitle4 ,notwithstanding the         
preceding sentence1 the first-time      
homebuyer account shall be subject to   
the taxes imposed by section #eaa       
7relating to imposition of tax on       
unrelated business income of charitable 
organizations74  7b7 ,first-,time       
homebuyer account ,the term first-time  
homebuyer account means a trust created 
or organized in the ,united ,states     
exclusively for the purpose of paying   
the qualified principal residence       
purchase expenditures of an individual  
who is the designated beneficiary of the
 trust 7and designated as a first-time  
homebuyer account at the time created or
 organized71 but only if the written    
governing instrument creating the trust 
meets the following requirements3  7#a7 
,no contribution will be accepted-- 7,a7
 unless it is in cash1  7,b7 except in  
the case of a rollover contribution1 if 
such contribution would result in       
aggregate contributions--  7i7 for the  
taxable year exceeding #ad1jjj 7#bjj    

percent of such amount in effect for the
 taxable year in the case of individuals
 who are married1 own a first-time      
homebuyer account jointly1 and file a   
joint return for the taxable year71     
7ii7 for all taxable years exceeding    
#ej1jjj1 and  7,c7 if the fair market   
value of the account to exceeds1 or to  
the extent such contribution would      
result in the fair market value of the  
account exceeding1 #aej1jjj4  7#b7 ,the 
trustee is a bank 7as defined in section
 #djh7n77 or another person who         
demonstrates to the satisfaction of the 
,secretary that the manner in which that
 person will administer the trust will  
be consistent with the requirements of  
this section or who has so demonstrated 
with respect to any individual          
retirement plan4  7#c7 ,no part of the  
trust assets will be invested in life   
insurance contracts4  7#d7 ,the assets  
of the trust shall not be commingled    
with other property except in a common  
trust fund or common investment fund4   

7c7 ,qualified principal residence      
purchase expenditures ,for purposes of  
this section-- 7#a7 ,in general ,the    
term qualified principal residence      
purchase expenditures means1 with       
respect to a designated beneficiary who 
is a first-time homebuyer--  7,a7 any   
amount paid toward the purchase price of
 a principal residence of the           
beneficiary1  7,b7 any amount required  
to be paid to settle the purchase of    
such residence1 and  7,c7 any amount    
required to be paid by the beneficiary  
to obtain acquisition indebtedness with 
respect to such residence4  7#b7        
,purchase price ,the term purchase price
 means the adjusted basis of the        
residence on the date such residence is 
purchased4  7d7 ,tax treatment  7#a7    
,distributions  7,a7 ,in general ,if    
distributions from a first-time         
homebuyer account for the taxable year  
do not exceed the qualified principal   
residence purchase expenditures of the  
designated beneficiary for the taxable  

year1 no amount shall be includible in  
gross income4  7,b7 ,distributions in   
excess of expenditures ,if such         
distributions exceed such expenditures  
for the taxable year1 such distributions
 shall be includible in the gross income
 of the distributee in the manner as    
provided in section #gb 7to the extent  
not excluded from gross income under any
 other provision of this chapter71      
reduced by an amount which bears the    
same ratio to the amount otherwise so   
includible as such expenses bear to such
 distributions4  7,c7 ,additional tax   
for distributions not used for          
first-time homebuyer purposes  7i7 ,in  
general ,the tax imposed by this chapter
 for any taxable year on any taxpayer   
who receives a payment or distribution  
from a first-time homebuyer account     
which is includible in gross income     
shall be increased by the applicable    
percentage of the amount which is so    
includible4  7ii7 ,applicable percentage
 ,for purposes of clause 7i71 the       

applicable percentage is-- 7,i7 in the  
case of a payment or distribution made  
not later than #aj years after the date 
of the first contribution to the        
account1 #e percent1 and  7,,ii7 in the 
case of any other payment or            
distribution1 #aj percent4  7iii7       
,exceptions ,clause 7i7 shall not apply 
if the payment or distributions--  7,i7 
is made to a beneficiary 7or to the     
estate of the designated beneficiary7 on
 or after the death of the designated   
beneficiary1  7,,ii7 is attributable to 
the designated beneficiary's being      
disabled 7within the meaning of section 
#gb7m77#g771 or  7,,iii7 are made under 
rules similar to the rules under section
 #djh7;d77#d7 7relating to contributions
 returned before due date of return74   
7,d7 ,rollovers ,subparagraph 7,a7 shall
 not apply to any amount paid or        
distributed from a first-time homebuyer 
account to the extent that the amount   
received is paid1 not later than the    
#fjth day after the date of such payment

 or distribution1 into another          
first-time homebuyer account for the    
benefit of the same beneficiary4 ,the   
preceding sentence shall not apply to   
any payment or distribution if it       
applied to any prior payment or         
distribution during the #ab-month period
 ending on the date of the payment or   
distribution4  7,e7 ,change in          
beneficiary ,any change in the          
beneficiary of a first-time homebuyer   
account shall not be treated as a       
distribution for purposes of            
subparagraph 7,a74  7,f7 ,disallowance  
of excluded amounts as deduction1       
credit1 or exclusion ,no deduction1     
credit1 or exclusion shall be allowed to
 the taxpayer under any other section   
for any qualified principal residence   
purchase expenditures to the extent     
taken into account in determining the   
amount of the exclusion under this      
paragraph4  7#b7 ,estate and gift tax   
with respect to the account ,rules      
similar to the rules of paragraphs 7#b71

 7#d71 and 7#e7 of section #ebi7;c7     
shall apply for purposes of this        
section4  7#c7 ,tax treatment after     
death of account holder  7,a7 ,jointly  
held accounts ,in the case of a         
first-time homebuyer account which was  
jointly held by spouses1 if the         
surviving spouse acquires the deceased  
spouse's interest in a first-time       
homebuyer account by reason of being the
 designated beneficiary of such account 
at the death1 such account shall be     
treated as if the spouse were the sole  
account holder4  7,b7 ,other cases  7i7 
,in general ,if1 by reason of the death 
of the account holder1 any person       
acquires the account holder's interest  
in an first-time homebuyer account in a 
case to which subparagraph 7,a7 does not
 apply--  7,i7 such account shall cease 
to be a first-time homebuyer account as 
of the date of death1 and  7,,ii7 an    
amount equal to the fair market value of
 the assets in such account on such date
 shall be includible if such person is  

not the estate of such holder1 in such  
person's gross income for the taxable   
year which includes such date1 or if    
such person is the estate of such       
holder1 in such holder's gross income   
for the last taxable year of such       
holder4  7ii7 ,deduction for estate     
taxes ,an appropriate deduction shall be
 allowed under section #fia7;c7 to any  
person 7other than the decedent or the  
decedent's spouse7 with respect to      
amounts included in gross income under  
clause 7i74  7e7 ,other definitions and 
special rules ,for purposes of this     
section-- 7#a7 ,first-time homebuyer    
7,a7 ,in general ,the term first-time   
homebuyer means any individual if such  
individual 7and if married1 such        
individual's spouse7 has had no present 
ownership interest in a principal       
residence4  7,b7 ,special rule for      
divorced individuals ,any individual who
 is divorced and is not described in    
subparagraph 7,a7 shall be treated as a 
first-time homebuyer for purposes of    

this section if such individual had no  
present ownership interest in a         
principal residence since such          
individual's most recent divorce and    
during the #c-year period ending on the 
date of the purchase of the principal   
residence with respect to which payments
 from a first-time homebuyer account are
 made under this section4  7#b7         
,principal residence ,the term principal
 residence has the same meaning as when 
used in section #aba4  7#c7 ,designated 
beneficiary ,the term designated        
beneficiary means--  7,a7 the individual
 designated at the commencement of the  
first-time homebuyer account as the     
beneficiary of amounts paid 7or to be   
paid7 to the account1 or  7,b7 in the   
case of a change in beneficiaries       
described in subsection 7d77#a77;,c71   
the individual who is the new           
beneficiary4  7#d7 ,account ownership   
,except in the case of individuals who  
are married1 an account may be owned by 
only one individual and may only have   

one designated beneficiary4  7#e7       
,cost-of-living adjustment ,in the case 
of any taxable year beginning in a      
calendar year after #bjah1 the dollar   
amounts under subsection 7b77#a7 shall  
be increased by an amount equal to--    
7,a7 such dollar amount1 multiplied by  
7,b7 the cost-of-living adjustment      
determined under section #a7;f77#c7 for 
the calendar year in which the taxable  
year begins1 determined by substituting 
calendar year #bjag for calendar year   
#aiib in subparagraph 7,b7 thereof4  ,if
 any amount after adjustment under the  
preceding sentence is not a multiple of 
#ajj1 such amount shall be rounded to   
the next lower multiple of #ajj4  4  7b7
 ,excess contributions  7#a7 ,in general
 ,section #digc7;a7 of such ,code is    
amended by striking or at the end of    
paragraph 7#e71 by inserting or at the  
end of paragraph 7#f71 and by inserting 
after paragraph 7#f7 the following new  
paragraph3  7#g7 a first-time homebuyer 
account 7within the meaning of section  

#ecj;,a71  4  7#b7 ,excess contributions
 ,section #digc of such ,code is amended
 by adding at the end the following new 
subsection3  7i7 ,excess contributions  
to first-,time homebuyer account ,in the
 case of a first-time homebuyer account1
 the term excess contributions means the
 amount by which the amount contributed 
for the taxable year to such account    
7other than contributions described in  
section #ecj;,a7d77#a77;,c77iv7 and 7v77
 exceeds the contribution limits under  
section #ecj;,a7b74 ,for purposes of the
 preceding sentence1 any contribution   
which is distributed from the account in
 a distribution to which section        
#ecj;,a7d77#a77;,c77iii77,,iii7 applies 
shall be treated as an amount not       
contributed4  4  7c7 ,clerical amendment
 ,the table of parts for subchapter ,f  
of chapter #a of such ,code is amended  
by adding at the end the following new  
item3  ,part ,,ix4 ,first-,time         
homebuyer accounts  4  7d7 ,effective   
date ,the amendments made by this       

section shall apply to taxable years    
beginning after the date of the         
enactment of this ,act4