,i  #aai? ,,congress  #a/ ,session  ,h4 
,r4 #fedb  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,decemb] #i1 #bjbe,mr4
 ,subramanyam 7= himself1 ,mrs4 ,h9son1 
,mr4 ,?an$>1 & ,ms4 ,norton7 introduc$ !
 foll[+ bill2 :i* 0 ref]r$ to !         
,committee on ,ways & ,means  ,a ,,bill 
,to am5d ! ,int]nal ,rev5ue ,code (     
#aihf to all[ ! e/abli%m5t ( d[n paym5t 
sav+s acc\nts4  #a4 ,%ort title ,?is    
,act may be cit$ z ! ,fir/ ,home ,sav+s 
,opportunity ,act ( #bjbe4  #b4 ,d[n    
paym5t sav+s acc\nt  7a7 ,9 g5]al ,"p   
,,vii ( sub*apt] ,b ( *apt] #a ( !      
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by ins]t+ aft] section #bbc ! foll[+ new
 section3  #bbc;,a4 ,d[n paym5t sav+s   
acc\nt  7a7 ,d$uction all[$ ,9 ! case ( 
an acc\nt b5efici>y1 !re %all be all[$ z
 a d$uction = ! taxable ye> an am\nt    
equal to ! aggregate am\nt paid 9 ca%   
dur+ su* taxable ye> by su* individual  
to a d[n paym5t sav+s acc\nt ( su*      
individual4  7b7 ,def9itions & special  
rules ,= purposes ( ?is section-- 7#a7  

,d[n paym5t sav+s acc\nt ,! t]m d[n     
paym5t sav+s acc\nt means a tru/ creat$ 
or organiz$ 9 ! ,unit$ ,/ates           
exclusively = ! purpose ( pay+ !        
qualifi$ d[n paym5t exp5ses ( ! acc\nt  
b5efici>y 7& designat$ z a d[n paym5t   
sav+s acc\nt at ! "t creat$ or          
organiz$71 b only if ! writt5 gov]n+    
in/rum5t creat+ ! tru/ meets ! foll[+   
requirem5ts3 7,a7 ,no contribution w be 
accept$-- 7i7 if su* contribution is n  
made by ! acc\nt b5efici>y1  7ii7 if !  
acc\nt b5efici>y _h an own]%ip int]e/ 9 
a pr9cipal resid5ce at any "t dur+ !    
#c-ye> p]iod end+ on ! date ( !         
contribution1 or  7iii7 unless x is 9   
ca%4  7,b7 ,! tru/ee is a bank 7z def9$ 
9 section #djh7n77 or ano!r p]son :o    
demon/rates to ! satisfaction ( !       
,secret>y t ! mann] 9 :i* t p]son w     
adm9i/] ! tru/ w be consi/5t ) !        
requirem5ts ( ?is section4  7,c7 ,no "p 
( ! tru/ assets w be inve/$ 9 life      
insurance contracts4  7,d7 ,! assets ( !
 tru/ %all n be comm+l$ ) o!r prop]ty   

except 9 a common tru/ fund or common   
inve/m5t fund4  7,e7 ,! acc\nt b5efici>y
 has atta9$ ! age ( #ah4  7#b7 ,qualifi$
 d[n paym5t exp5ses ,! t]m qualifi$ d[n 
paym5t exp5ses means a d[n paym5t or    
clos+ co/s = ! pur*ase ( ! pr9cipal     
resid5ce ( ! acc\nt b5efici>y ( a d[n   
paym5t sav+s acc\nt if su* acc\nt       
b5efici>y is a fir/-"t homebuy] 7z def9$
 9 section #cf7;c77 ) respect to su*    
pur*ase4  7#c7 ,acc\nt b5efici>y ,! t]m 
acc\nt b5efici>y means ! individual on  
^: behalf ! d[n paym5t sav+s acc\nt is  
e/abli%$4  7#d7 ,c]ta9 rules to apply   
,rules simil> to ! foll[+ rules %all    
apply = purposes ( ?is section3 7,a7    
,section #bai7;d77#b7 7relat+ to no     
d$uction = rollov]s74  7,b7 ,section    
#bai7;f77#c7 7relat+ to "t :5           
contributions deem$ made74  7,c7        
,section #bai7;f77#e7 7relat+ to employ]
 paym5ts74  7,d7 ,section #djh7;g7      
7relat+ to community prop]ty laws74     
7#e7 ,pr9cipal resid5ce ,! t]m pr9cipal 
resid5ce has ! same mean+ z :5 us$ 9    

section #aba4  7c7 ,limitations  7#a7   
,contribution limit ,! am\nt all[able z 
a d$uction "u subsection 7a7 to any     
individual = any taxable ye> %all n     
exce$ ! less] (-- 7,a7 ! taxpay]'s e>n$ 
income 7z def9$ 9 section #cb7;c77#b77 =
 ! taxable ye>1 or  7,b7 #aj1jjj        
7#bj1jjj 9 ! case ( a jo9t return74     
7#b7 ,phase\t bas$ on modifi$ adju/$    
gross income  7,a7 ,9 g5]al ,! d$uction 
all[able "u subsection 7a7 %all be r$uc$
 by an am\nt :i* be>s ! same ratio to ! 
am\nt ( su* d$uction z-- 7i7 ! excess   
7if any7 (-- 7,i7 ! taxpay]'s modifi$   
adju/$ gross income1 ov]  7,,ii7        
#aej1jjj 7#bcf1jjj 9 ! case ( a jo9t    
return71 be>s to  7ii7 #ej1jjj 7#gi1jjj 
9 ! case ( a jo9t return74  7,b7        
,modifi$ adju/$ gross income ,= purposes
 ( subp>agraph 7,a71 ! t]m modifi$      
adju/$ gross income means ! adju/$ gross
 income ( ! taxpay] = ! taxable ye>     
increas$ by any am\nt exclud$ f gross   
income "u section #iaa1 #ica1 or #icc4  
7#c7 ,d5ial ( d$uction to dep5d5ts ,no  

d$uction %all be all[$ "u ?is section to
 any individual ) respect to :om a      
d$uction "u section #aea is all[able to 
ano!r taxpay] = a taxable ye> beg9n+ 9 !
 cal5d> ye> 9 :i* su* individual's      
taxable ye> beg9s4  7#d7 ,inflation     
adju/m5t  7,a7 ,9 g5]al ,9 ! case ( any 
taxable ye> beg9n+ aft] #bjbe1 ea* ( !  
doll> am\nts 9 ?is subsection %all be   
increas$ by an am\nt equal to-- 7i7 su* 
doll> am\nt1 multipli$ by  7ii7 !       
co/-(-liv+ adju/m5t det]m9$ "u section  
#a7;f77#c7 = ! cal5d> ye> 9 :i* !       
taxable ye> beg9s1 det]m9$ by sub/itut+ 
cal5d> ye> #bjbd = cal5d> ye> #bjaf 9   
subp>agraph 7,a77ii7 !re(4  7,b7 ,r\nd+ 
,if any increase "u p>agraph 7#a7 is n a
 multiple ( #ajj1 su* increase %all be  
r\nd$ to ! ne>e/ multiple ( #ajj4  7d7  
,tax treatm5t ( di/ributions  7#a7      
,am\nts us$ = qualifi$ d[n paym5t       
exp5ses ,any am\nt paid or di/ribut$ out
 ( a d[n paym5t sav+s acc\nt :i* is us$ 
exclusively to pay qualifi$ d[n paym5t  
exp5ses ( any acc\nt b5efici>y %all n be

 includible 9 gross income4  7#b7       
,inclusion ( am\nts n us$ = qualifi$ d[n
 paym5t exp5ses ,any am\nt paid or      
di/ribut$ out ( a d[n paym5t sav+s      
acc\nt :i* is n us$ exclusively to pay !
 qualifi$ d[n paym5t exp5ses ( ! acc\nt 
b5efici>y %all be includ$ 9 ! gross     
income ( su* b5efici>y4  7#c7 ,excess   
contributions return$ be=e due date (   
return  7,a7 ,9 g5]al ,if any excess    
contribution is contribut$ = a taxable  
ye> to any d[n paym5t sav+s acc\nt ( an 
individual1 p>agraph 7#b7 %all n apply  
to di/ributions f ! d[n paym5t sav+s    
acc\nts ( su* individual 7to ! ext5t su*
 di/ributions d n exce$ ! aggregate     
excess contributions to all su* acc\nts 
( su* individual = su* ye>7 if-- 7i7 su*
 di/ribution is receiv$ by ! individual 
on or be=e ! la/ day prescrib$ by law   
7includ+ ext5sions ( "t7 = fil+ su*     
individual's return = su* taxable ye>1 &
  7ii7 su* di/ribution is accompani$ by 
! am\nt ( net income attributable to su*
 excess contribution4  ,any net income  

describ$ 9 clause 7ii7 %all be includ$ 9
 ! gross income ( ! individual = !      
taxable ye> 9 :i* x is receiv$4  7,b7   
,excess contribution ,= purposes (      
subp>agraph 7,a71 ! t]m excess          
contribution means any contribution to a
 d[n paym5t sav+s acc\nt 7o!r ?an a     
rollov] contribution describ$ 9 p>agraph
 7#e77 :i* is n d$uctible "u ?is        
section4  7#d7 ,additional tax =        
di/ributions n us$ = d[n paym5t exp5ses 
7,a7 ,9 g5]al ,! tax impos$ by ?is *apt]
 = any taxable ye> on any taxpay] :o    
receives a paym5t or di/ribution f a d[n
 paym5t sav+s acc\nt :i* is includible 9
 gross income %all be increas$ by #bj   
p]c5t ( ! am\nt :i* is s includible4    
7,b7 ,exceptions ,subp>agraph 7,a7 %all 
n apply if ! paym5t or di/ribution is-- 
7i7 made to ! acc\nt b5efici>y 7or to ! 
e/ate ( su* acc\nt b5efici>y7 on or aft]
 ! dea? ( su* acc\nt b5efici>y1 or  7ii7
 attributable to su* acc\nt b5efici>y's 
be+ disabl$ 7)9 ! mean+ ( section       
#gb7m77#g774  7#e7 ,rollov] contribution

 ,an am\nt is describ$ 9 ?is p>agraph z 
a rollov] contribution if x meets !     
foll[+ requirem5ts3 7,a7 ,9 g5]al       
,p>agraph 7#b7 %all n apply to any am\nt
 paid or di/ribut$ f a d[n paym5t sav+s 
acc\nt to ! acc\nt b5efici>y to ! ext5t 
! am\nt receiv$ is paid into a d[n      
paym5t sav+s acc\nt = ! b5efit ( su*    
b5efici>y n lat] ?an ! #fj? day aft] !  
day on :i* ! b5efici>y receives ! paym5t
 or di/ribution4  7,b7 ,limitation ,?is 
p>agraph %all n apply to any am\nt      
describ$ 9 subp>agraph 7,a7 receiv$ by  
an individual f a d[n paym5t sav+s      
acc\nt if1 at any "t dur+ ! #a-ye> p]iod
 end+ on ! day ( su* receipt1 su*       
individual receiv$ any o!r am\nt        
describ$ 9 subp>agraph 7,a7 f a d[n     
paym5t sav+s acc\nt :i* 0 n includible 9
 ! individual's gross income because ( !
 application ( ?is p>agraph4  7#f7      
,special rules = dea? & divorce ,rules  
simil> to ! rules ( p>agraphs 7#g7 &    
7#h7 ( section #bbc7;f7 %all apply =    
purposes ( ?is section4  7#g7           

,disall[ance ( exclud$ am\nts z         
d$uction1 cr$it1 or exclusion ,no       
d$uction1 cr$it1 or exclusion %all be   
all[$ to ! taxpay] "u any o!r section ( 
?is *apt] = any qualifi$ d[n paym5t     
exp5ses to ! ext5t tak5 into acc\nt 9   
det]m9+ ! am\nt ( ! exclusion "u        
p>agraph 7#a74  7#h7 ,acc\nt t]m9ation  
,rules simil> to ! rules ( p>agraphs    
7#b7 & 7#d7 ( section #djh7;e7 %all     
apply to d[n paym5t sav+s acc\nts1 & any
 am\nt treat$ z di/ribut$ "u su* rules  
%all be treat$ z n us$ to pay qualifi$  
d[n paym5t exp5ses4  7e7 ,reports  7#a7 
,9 g5]al ,! tru/ee ( a d[n paym5t sav+s 
acc\nt %all make su* reports reg>d+ su* 
acc\nt to ! ,secret>y & to ! acc\nt     
b5efici>y ) respect to contributions1   
di/ributions1 & su* o!r matt]s z !      
,secret>y may require4 ,! reports       
requir$ by ?is subsection %all be fil$  
at su* "t & 9 su* mann] & furni%$ to su*
 individuals at su* "t & 9 su* mann] z  
may be requir$4  7#b7 ,rollov]          
di/ributions ,9 ! case ( any di/ribution

 describ$ 9 subsection 7d77#e71 ! (fic] 
or employee hav+ control ( ! d[n paym5t 
sav+s acc\nt 7or _! designee7 %all      
provide a report to ! tru/ee ( ! d[n    
paym5t sav+s acc\nt to :i* ! di/ribution
 is made4 ,su* report %all be fil$ at   
su* "t & 9 su* mann] z ! ,secret>y may  
require & %all include in=mation )      
respect to ! contributions1             
di/ributions1 & e>n+s ( ! d[n paym5t    
sav+s acc\nt z ( ! date ( ! di/ribution 
describ$ 9 su* subsection1 toge!r ) su* 
o!r matt]s z ! ,secret>y may require4  4
  7b7 ,d$uction all[$ to non-,itemiz]s  
,section #fc7;b7 ( su* ,code is am5d$-- 
7#a7 9 p>agraph 7#f71 by /rik+ & &      
ins]t+ a comma1  7#b7 9 p>agraph 7#g71  
by /rik+ ! p]iod at ! end & ins]t+ 1 &1 
&  7#c7 by add+ at ! end ! foll[+ new   
p>agraph3  7#h7 ! d$uction all[$ by     
section #bbc;,a4  4  7c7 ,tax on        
prohibit$ transactions  7#a7 ,section   
#dige7;c7 ( su* ,code is am5d$ by add+  
at ! end ! foll[+ new p>agraph3  7#h7   
,special rule = d[n paym5t sav+s acc\nts

 ,an individual = ^: b5efit a d[n paym5t
 sav+s acc\nt 7)9 ! mean+ ( section     
#bbc;,a7b77#a77 is e/abli%$ %all be     
exempt f ! tax impos$ by ?is section )  
respect to any transaction conc]n+ su*  
acc\nt 7:i* w\ld o!rwise be taxable "u  
?is section7 if1 ) respect to su*       
transaction1 ! acc\nt ceases to be a d[n
 paym5t sav+s acc\nt by reason ( !      
application ( section #bbc7;c77#h7 to   
su* acc\nt4  4  7#b7 ,section           
#dige7;e77#a7 ( su* ,code is am5d$ by   
/rik+ or at ! end ( subp>agraph 7,f71 by
 r$esignat+ subp>agraph 7,g7 z          
subp>agraph 7,h71 & by ins]t+ aft]      
subp>agraph 7,f7 ! foll[+ new           
subp>agraph3  7,g7 a d[n paym5t sav+s   
acc\nt describ$ 9 section               
#bbc;,a7b77#a74  4  7d7 ,p5alty =       
failure ,to file reports ,section       
#ffic7;a77#b7 ( su* ,code is am5d$ by   
/rik+ & at ! end ( subp>agraph 7,e71 by 
/rik+ ! p]iod at ! end ( subp>agraph    
7,f7 & ins]t+ 1 &1 & by ins]t+ aft]     
subp>agraph 7,f7 ! foll[+ new           

subp>agraph3  7,g7 ,section #bbc;,a7g7  
7relat+ to d[n paym5t sav+s acc\nts74  4
  7e7 ,con=m+ am5dm5ts  7#a7 ,section   
#bf7;b77#b7 ( su* ,code is am5d$ by     
/rik+ & at ! end ( subp>agraph 7,y71 by 
/rik+ ! p]iod at ! end ( subp>agraph    
7,z7 & ins]t+ 1 &1 & by ins]t+ aft]     
subp>agraph 7,z7 ! foll[+ new           
subp>agraph3  7,,aa7 section            
#bbc;,a7c77#b7 7relat+ to additional tax
 on d[n paym5t sav+s acc\nt n us$ =     
qualifi$ d[n paym5t exp5ses74  4  7#b7  
,section #hgg;,a ( su* ,code is am5d$-- 
7,a7 9 subsection 7e77#b7 by ins]t+ a   
d[n paym5t sav+s acc\nt 7z def9$ 9      
section #bbc;,a71 aft] section #bbc711 &
  7,b7 9 subsection 7g77#f7 by ins]t+   
#bbc7;e77#d711 aft] #ebi;,a7c77#c714    
7#c7 ,! table ( sections = "p ,,vii (   
sub*apt] ,b ( *apt] #a ( su* ,code is   
am5d$ by ins]t+ aft] ! item relat+ to   
section #bbc ! foll[+ new item3  ,sec4  
#bbc;,a4 ,d[n paym5t sav+s acc\nt4  4   
7f7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s  

beg9n+ aft] ,decemb] #ca1 #bjbe4