,i  #aafth ,,congress  #b;d ,session    
,h4 ,r4 #hagf  ,,in ,,the ,,house ,,of  
,,representatives  ,september #d1 #bjbj 
,mr4 ,meeks 7for himself and ,mr4 ,green
 of ,texas7 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 establish qualified  
down payment savings programs4  #a4     
,short title ,this ,act may be cited as 
the ,american ,dream ,down ,payment ,act
 of #bjbj4  #b4 ,qualified down payment 
savings programs  7a7 ,in general ,part 
,,viii of subchapter ,f of chapter #a of
 the ,internal ,revenue ,code of #aihf  
is amended by inserting after section   
#ebi;,a the following new section3      
#ebi;,b4 ,qualified down payment savings
 programs  7a7 ,in general ,a qualified 
down payment savings program shall be   
exempt from taxation under this         
subtitle4 ,notwithstanding the preceding
 sentence1 such program shall be subject
 to the taxes imposed by section #eaa   

7relating to imposition of tax on       
unrelated business income of charitable 
organizations74  7b7 ,qualified down    
payment savings program ,for purposes of
 this section--  7#a7 ,in general ,the  
term qualified down payment savings     
program means a program established and 
maintained by a ,state or agency or     
instrumentality thereof-- 7,a7 under    
which a person may make contributions to
 a qualified down payment savings       
account which is established for the    
purpose of meeting qualified down       
payment expenses of the designated      
beneficiary of the account1 and  7,b7   
which meets the other requirements of   
this subsection4  7#b7 ,cash            
contributions  7,a7 ,in general ,a      
program shall not be treated as a       
qualified down payment savings program  
unless it provides that no contribution 
will be accepted--  7i7 unless it is in 
cash1 and  7ii7 except in the case of   
contributions under subsection          
7c77#c77;,c71 if such contribution to a 

qualified down payment savings account  
would result in the balance of such     
account exceeding #ajb1jhj4  7,b7       
,inflation adjustment  7i7 ,in general  
,in the case of any calendar year       
beginning after #bjbj1 the #ajb1jhj     
amount in subparagraph 7,a77ii7 shall be
 increased by an amount equal to-- 7,i7 
such dollar amount1 multiplied by       
7,,ii7 the cost-of-living adjustment    
determined under clause 7ii74  7ii7     
,cost-of-living adjustment ,for purposes
 of clause 7i71 the cost-of-living      
adjustment for any calendar year is the 
percentage 7if any7 by which--  7,i7 the
 ,,cpi for the preceding calendar year1 
exceeds  7,,ii7 the ,,cpi for calendar  
year #bjai4  ,for purposes of this      
clause1 the ,,cpi for any calendar year 
shall be determined in the same manner  
as it is determined under section       
#a7;f77#d74  7iii7 ,rounding ,if any    
increase determined under clause 7i7 is 
not a multiple of #aj1 such increase    
shall be rounded to the nearest multiple

 of #aj4  7#c7 ,separate accounting ,a  
program shall not be treated as a       
qualified down payment savings program  
unless it provides separate accounting  
for each designated beneficiary4  7#d7  
,investment direction ,a program shall  
not be treated as a qualified down      
payment savings program unless it       
provides that-- 7,a7 except as provided 
in subparagraph 7,b71 any contributor   
to1 or designated beneficiary under1    
such program may1 directly or           
indirectly1 direct the investment of any
 contributions to the program 7or any   
earnings thereon7 no more than #b times 
in any calendar year and subject to the 
regulations established pursuant to this
 section1 and  7,b7 in the event that an
 account's holdings meet the value      
established under paragraph 7#b77;,b71  
the account funds will be transferred to
 investments in ,united ,states         
,treasury securities4  7#e7 ,no pledging
 of interest as a security ,a program   
shall not be treated as a qualified down

 payment savings program if it allows   
any interest in the program or any      
portion thereof to be used as security  
for a loan4  7#f7 ,compliance with      
regulations ,a program shall not be     
treated as a qualified down payment     
savings program unless it complies with 
all regulations issued pursuant to      
subsection 7f74  7c7 ,tax treatment of  
designated beneficiaries and            
contributors  7#a7 ,in general ,except  
as otherwise provided in this           
subsection1 no amount shall be          
includible in gross income of--  7,a7 a 
designated beneficiary under a qualified
 down payment savings program1 or  7,b7 
a contributor to such program on behalf 
of a designated beneficiary1  with      
respect to any distribution or earnings 
under such program4  7#b7 ,gift tax     
treatment of contributions ,for purposes
 of chapters #ab and #ac-- 7,a7 ,in     
general ,any contribution to a qualified
 down payment savings program on behalf 
of any designated beneficiary shall be  

treated as a completed gift to such     
beneficiary which is not a future       
interest in property4  7,b7 ,treatment  
of excess contributions ,if the         
aggregate amount of contributions       
described in subparagraph 7,a7 during   
the calendar year by a donor exceeds the
 limitation for such year under section 
#bejc7;b71 such aggregate amount shall1 
at the election of the donor1 be taken  
into account for purposes of such       
section ratably over the #e-year period 
beginning with such calendar year4  7#c7
 ,distributions  7,a7 ,in general ,any  
distribution under a qualified down     
payment savings program shall be        
includible in the gross income of the   
distributee in the manner as provided   
under section #gb to the extent not     
excluded from gross income under any    
other provision of this chapter4  7,b7  
,distributions for qualified down       
payment expenses ,for purposes of this  
paragraph1 if distributions from a      
qualified down payment savings program--

 7i7 do not exceed the qualified down   
payment expenses1 no amount shall be    
includible in gross income1 and  7ii7 in
 any other case1 the amount otherwise   
includible in gross income shall be     
reduced by an amount which bears the    
same ratio to such amount as such       
expenses bear to such distributions4    
7,c7 ,rollovers  7i7 ,in general        
,subparagraph 7,a7 shall not apply to   
that portion of any distribution which1 
within #fj days of such distribution1 is
 transferred to another qualified down  
payment savings account for the benefit 
of the designated beneficiary4  7ii7    
,limitation on certain rollovers ,clause
 7i7 shall not apply to any transfer if 
such transfer occurs within #ab months  
from the date of a previous transfer to 
any qualified down payment savings      
account for the benefit of the          
designated beneficiary4  7#d7 ,estate   
tax treatment  7,a7 ,in general ,no     
amount shall be includible in the gross 
estate of any individual for purposes of

 chapter #aa by reason of an interest in
 a qualified down payment savings       
program4  7,b7 ,amounts includible in   
estate of designated beneficiary in     
certain cases ,subparagraph 7,a7 shall  
not apply to amounts distributed on     
account of the death of a beneficiary4  
7,c7 ,amounts includible in estate of   
donor making excess contributions ,in   
the case of a donor who makes the       
election described in paragraph         
7#b77;,b7 and who dies before the close 
of the #e-year period referred to in    
such paragraph1 notwithstanding         
subparagraph 7,a71 the gross estate of  
the donor shall include the portion of  
such contributions properly allocable to
 periods after the date of death of the 
donor4  7#e7 ,other gift tax rules ,for 
purposes of chapters #ab and #ac1 in no 
event shall a distribution from a       
qualified down payment savings account  
be treated as a taxable gift4  7#f7     
,additional tax  7,a7 ,in general ,the  
tax imposed by this chapter for any     

taxable year on any taxpayer who        
receives a distribution from a qualified
 down payment savings program which is  
includible in gross income shall be     
increased by #aj percent of the amount  
which is so includible4  7,b7           
,exceptions ,subparagraph 7,a7 shall not
 apply if the payment or distribution   
is-- 7i7 made to a beneficiary 7or to   
the estate of the designated            
beneficiary7 on or after the death of   
the designated beneficiary1 or  7ii7    
attributable to the designated          
beneficiary's being disabled 7within the
 meaning of section #gb7m77#g774  7,c7  
,contributions returned before certain  
date ,subparagraph 7,a7 shall not apply 
to the distribution of any contribution 
made during a taxable year on behalf of 
the designated beneficiary if--  7i7    
such distribution is received on or     
before the day prescribed by law        
7including extensions of time7 for      
filing such designated beneficiary's    
return for such taxable year1 and  7ii7 

such distribution is accompanied by the 
amount of net income attributable to    
such excess contribution4  7d7 ,reports 
,each officer or employee having control
 of the qualified down payment savings  
program or their designee shall make    
such reports regarding such program to  
the ,secretary and to designated        
beneficiaries with respect to           
contributions1 distributions1 and such  
other matters as the ,secretary may     
require4 ,the reports required by this  
subsection shall be filed at such time  
and in such manner and furnished to such
 individuals at such time and in such   
manner as may be required by the        
,secretary4  7e7 ,other definitions and 
special rules ,for purposes of this     
section--  7#a7 ,designated beneficiary 
,the term designated beneficiary means  
the individual designated at the        
commencement of participation in the    
qualified down payment savings program  
as the beneficiary of amounts paid 7or  
to be paid7 to the program4  7#b7       

,qualified down payment expenses ,the   
term qualified down payment expenses    
means amounts 7including closing costs7 
paid or incurred to purchase a principal
 residence 7within the meaning of       
section #aba74  7#c7 ,qualified down    
payment savings account ,the term       
qualified down payment savings account  
means an account maintained under a     
qualified down payment savings program4 
7f7 ,regulations ,notwithstanding any   
other provision of this section1 the    
,secretary1 in consultation with the    
,chairman of the ,securities and        
,exchange ,commission1 shall prescribe  
such regulations as may be necessary or 
appropriate to carry out the purposes of
 this section and to prevent abuse of   
such purposes4 ,such regulations shall  
include--  7#a7 impermissible           
investments for qualified down payment  
savings programs2  7#b7 permissible     
fees1 including the maximum amount of   
overall fees and commissions1 that may  
be charged in association with a        

qualified down payment savings program  
account2 and  7#c7 minimum required     
disclosures to account beneficiaries1   
including disclosures related to any    
possible losses that could be incurred  
in a qualified down payment savings     
account4  4  7b7 ,tax on excess         
contributions  7#a7 ,in general         
,subsection 7a7 of section #digc of the 
,internal ,revenue ,code of #aihf 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 qualified down       
payment savings account 7within the     
meaning of section #ebi;,b71  4  7#b7   
,excess contribution ,section #digc of  
such ,code is amended by adding at the  
end the following new subsection3  7i7  
,excess contributions to qualified down 
payment savings accounts ,for purposes  
of this section-- 7#a7 ,in general ,in  
the case of a qualified down payment    
savings account 7within the meaning of  

section #ebi;,b71 the term excess       
contributions means the amount by which 
the amount contributed for the taxable  
year to such account 7other than        
contributions under section             
#ebi;,b7c77#c77;,c77 exceeds the        
contribution limit under section        
#ebi;,b7b77#b77;,b74  7#b7 ,special rule
 ,for purposes of this subsection1 any  
contribution which is distributed out of
 the qualified down payment savings     
account in a distribution to which      
section #ebi;,b7c77#f77;,c7 applies     
shall be treated as an amount not       
contributed4  4  7c7 ,penalty for       
failure ,to file reports ,section       
#ffic7;a77#b7 is amended by striking and
 at the end of subparagraph 7,e71 by    
redesignating subparagraph 7,f7 as      
subparagraph 7,g71 and by inserting     
after subparagraph 7,e7 the following3  
7,e7 section #ebi;,b7d7 7relating to    
qualified down payment savings          
programs71 and  4  7d7 ,other conforming
 amendments  7#a7 ,section #bf7;b77#b7  

of the ,internal ,revenue ,code of #aihf
 is amended by striking and at the end  
of subparagraph 7,x71 by striking the   
period at the end of subparagraph 7,y7  
and inserting 1 and1 and by inserting   
after subparagraph 7,y7 the following3  
7,z7 section #ebi;,b7c77#f7 7relating to
 additional tax on qualified down       
payment savings program distributions   
not used for qualified down payment     
expenses74  4  7#b7 ,section #hgg;,a of 
such ,code is amended--  7,a7 in        
subsection 7e77#b7 by inserting a       
qualified down payment savings program  
7as defined in section #ebi;,b71 after a
 qualified ,,able program 7as defined in
 section #ebi;,a711 and  7,b7 in        
subsection 7g77#f7 by inserting         
#ebi;,b7c77#f71 after #ebi;,a7c77#c714  
7#c7 ,section #dife7;c7 of such ,code is
 amended by striking or at the end of   
paragraph 7#g71 by striking the period  
at the end of paragraph 7#h7 and        
inserting 1 or1 and by inserting after  
paragraph 7#h7 the following new        

paragraph3  7#i7 a program described in 
section #ebi;,b4  4  7#d7 ,the table of 
sections for part ,,viii of subchapter  
,f of chapter #a of such ,code is       
amended by inserting after the item     
relating to section #ebi;,a the         
following new item3  ,sec4 #ebi;,b4     
,qualified down payment savings         
programs4  4  7e7 ,reports on down      
payment savings programs ,beginning on  
that date that is #ab months after the  
regulations established pursuant to     
section #ebi;,b7f7 are finalized1 and   
every two years thereafter1 the         
,secretary of the ,treasury 7or the     
,secretary's delegate71 in coordination 
with the ,chairman of the ,securities   
and ,exchange ,commission and the       
,states offering qualified down payment 
savings programs1 shall issue a public  
report detailing the following3  7#a7   
,the number of ,states that have        
established qualified down payment      
savings programs4  7#b7 ,the number of  
down payment savings program accounts in

 existence during the time specified in 
the report and the number of such       
accounts that have been established over
 the life of the program4  7#c7 ,the age
 distribution of down payment savings   
account beneficiaries4  7#d7 ,the       
percentage of qualified down payment    
savings account beneficiaries that would
 be first-time homebuyers4  7#e7 ,a     
summary of the account balances held in 
qualified down payment savings program  
accounts4  7#f7 ,the race and gender    
distribution of qualified down payment  
savings program account designated      
beneficiaries4  7#g7 ,the income        
distribution of the designated          
beneficiaries of qualified down payment 
savings program accounts4  7#h7 ,the    
number of down payment savings program  
distributions that have been made since 
the previous report4  7#i7 ,such other  
information as the ,secretary 7or the   
,secretary's designee7 shall determine  
is required to assess whether qualified 
down payment savings accounts have      

contributed to facilitating access to   
affordable homeownership1 including     
first-time homeownership1 particularly  
among young people1 low- and            
moderate-income people1 and people from 
communities with historically low rates 
of homeownership4  7f7 ,effective date  
7#a7 ,in general ,the amendments made by
 this section shall apply to taxable    
years beginning after ,december #ca1    
#bjai4  7#b7 ,regulations ,the          
,secretary of the ,treasury 7or the     
,secretary's designee7 shall promulgate 
the regulations or other guidance       
required under section #ebi;,b7f7 of the
 ,internal ,revenue ,code of #aihf1 as  
added by subsection 7a71 not later than 
#f months after the date of the         
enactment of this ,act4