,i  #aaith ,,congress  #b;d ,session    
,h4 ,r4 #gdbb  ,,in ,,the ,,house ,,of  
,,representatives  ,february #i1        
#bjbf,mrs4 ,cammack 7for herself and    
,mr4 ,moylan7 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 allow the            
establishment of first-time homebuyer   
savings accounts4  #a4 ,short title     
,this ,act may be cited as the          
,next-,generation ,equity ,savings ,tool
 ,act or the ,,nest ,act4  #b4          
,first-time homebuyer savings account   
7a7 ,in general ,part ,,vii of          
subchapter ,b of chapter #a of the      
,internal ,revenue ,code of #aihf is    
amended by inserting after section #bbc 
the following new section3  #bbc;,a4    
,first-time homebuyer savings account   
7a7 ,deduction allowed ,in the case of  
an account beneficiary1 there shall be  
allowed as a deduction for the taxable  
year an amount equal to the aggregate   

amount paid in cash during such taxable 
year by or on behalf of such individual 
to a first-time homebuyer savings       
account of such individual4  7b7        
,definitions and special rules ,for     
purposes of this section-- 7#a7         
,first-time homebuyer savings account   
,the term first-time homebuyer savings  
account means a trust created or        
organized in the ,united ,states        
exclusively for the purpose of paying   
the qualified home ownership expenses of
 the account beneficiary 7and designated
 as a first-time homebuyer savings      
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-- 7i7 
if the account beneficiary had an       
ownership interest in a principal       
residence at any time during the #c-year
 period ending on the date of the       
contribution1  7ii7 if such contribution
 would result in lifetime aggregate     

contributions to the account exceeding  
the ,state threshold amount1  7iii7     
unless it is in cash1 or  7iv7 except in
 the case of rollover contributions1 if 
such contribution would result in       
aggregate contributions to the account  
for the taxable year exceeding the      
amount in effect under subsection       
7b77#a77;,b74  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 section4  
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  7,e7 ,the account     
beneficiary has attained the age of #ah4
  7#b7 ,state threshold amount ,the term
 ,state threshold amount means #bj      
percent of the median home sale price in

 the ,state in which such account is    
established4  7#c7 ,qualified home      
ownership expenses ,the term qualified  
home ownership expenses means costs to  
acquire1 construct1 or reconstruct a    
residence1 including a down payment1    
financing1 or other closing costs       
relating to the purchase1 if such       
residence is the primary residence of   
the account beneficiary of a first-time 
homebuyer savings account and such      
account beneficiary is a first-time     
homebuyer 7as defined in section        
#cf7;c77 with respect to such purchase4 
7#d7 ,account beneficiary ,the term     
account beneficiary means the individual
 on whose behalf the first-time         
homebuyer savings account is            
established4  7#e7 ,certain rules to    
apply ,rules similar to the following   
rules shall apply for purposes of this  
section3 7,a7 ,section #bai7;d77#b7     
7relating to no deduction for           
rollovers74  7,b7 ,section #bai7;f77#c7 
7relating to time when contributions    

deemed made74  7,c7 ,section            
#bai7;f77#e7 7relating to employer      
payments74  7,d7 ,section #djh7;g7      
7relating to community property laws74  
7c7 ,tax treatment of accounts  7#a7 ,in
 general ,a first-time homebuyer savings
 account is exempt from taxation under  
this subtitle unless such account has   
ceased to be a first-time homebuyer     
savings account4 ,notwithstanding the   
preceding sentence1 any such account is 
subject to the taxes imposed by section 
#eaa 7relating to imposition of tax on  
unrelated business income of charitable1
 etc4 organizations74  7#b7 ,account    
terminations  7,a7 ,acquisition of      
principal residence ,if the account     
beneficiary acquires an ownership       
interest in a principal residence-- 7i7 
each first-time homebuyer savings       
account of such beneficiary shall cease 
to be a first-time homebuyer savings    
account as of the close of the #fj-;day 
period beginning on the date of such    
acquisition1 and  7ii7 the balance of   

such account as of such date shall be   
treated as distributed to such          
beneficiary4  7,b7 ,prohibited          
transactions1 etc ,rules similar to the 
rules of paragraphs 7#b7 and 7#d7 of    
section #djh7;e7 shall apply to any     
first-time homebuyer savings account1   
and any amounts treated as distributed  
under such rules shall be treated as not
 used to pay qualified home ownership   
expenses4  7d7 ,tax treatment of        
distributions  7#a7 ,amounts used for   
qualified home ownership expenses ,any  
amount paid or distributed out of a     
first-time homebuyer savings account    
which is used exclusively to pay        
qualified home ownership expenses of any
 account beneficiary shall not be       
includible in gross income4  7#b7       
,inclusion of amounts not used for      
qualified home ownership expenses ,any  
amount paid or distributed out of a     
first-time homebuyer savings account    
which is not used exclusively to pay the
 qualified home ownership expenses of   

the account beneficiary shall be        
included in the gross income of such    
beneficiary4  7#c7 ,excess contributions
 returned before due date of return     
7,a7 ,in general ,if any excess         
contribution is contributed for a       
taxable year to any first-time homebuyer
 savings account of an individual1      
paragraph 7#b7 shall not apply to       
distributions from the first-time       
homebuyer savings accounts of such      
individual 7to the extent such          
distributions do not exceed the         
aggregate excess contributions to all   
such accounts of such individual for    
such year7 if-- 7i7 such distribution is
 received by the individual on or before
 the last day prescribed by law         
7including extensions of time7 for      
filing such individual's return for such
 taxable year1 and  7ii7 such           
distribution is accompanied by the      
amount of net income attributable to    
such excess contribution4  ,any net     
income described in clause 7ii7 shall be

 included in the gross income of the    
individual for the taxable year in which
 it is received4  7,b7 ,excess          
contribution ,for purposes of           
subparagraph 7,a71 the term excess      
contribution means any contribution     
7other than a rollover contribution     
described in paragraph 7#e77 which is   
neither excludable from gross income    
under section #aci;,j nor deductible    
under this section4  7#d7 ,additional   
tax for distributions not used for home 
ownership expenses  7,a7 ,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 savings account  
which is includible in gross income     
shall be increased by #bj percent of the
 amount which is so includible4  7,b7   
,exceptions ,subparagraph 7,a7 shall not
 apply if the payment or distribution is
 made to the account beneficiary 7or to 
the estate of such account beneficiary7 
on or after the death of such account   

beneficiary4  7#e7 ,rollover            
contribution ,an amount is described in 
this paragraph as a rollover            
contribution if it meets the following  
requirements3 7,a7 ,in general          
,paragraph 7#b7 shall not apply to any  
amount paid or distributed from a       
first-time homebuyer savings account to 
the account beneficiary to the extent   
the amount received is paid into a      
first-time homebuyer savings account for
 the benefit of such beneficiary not    
later than the #fjth day after the day  
on which the beneficiary receives the   
payment or distribution4  7,b7          
,limitation ,this paragraph shall not   
apply to any amount described in        
subparagraph 7,a7 received by an        
individual from a first-time homebuyer  
savings account if1 at any time during  
the #a-year period ending on the day of 
such receipt1 such individual received  
any other amount described in           
subparagraph 7,a7 from a first-time     
homebuyer savings account which was not 

includible in the individual's gross    
income because of the application of    
this paragraph4  7#f7 ,special rules for
 death and divorce ,rules similar to the
 rules of paragraphs 7#g7 and 7#h7 of   
section #bbc7;f7 shall apply for        
purposes of this section4  7#g7         
,disallowance of excluded amounts as    
deduction1 credit1 or exclusion ,no     
deduction1 credit1 or exclusion shall be
 allowed to the taxpayer under any other
 section of this chapter for any        
qualified home ownership expenses to the
 extent taken into account in           
determining the amount of the exclusion 
under paragraph 7#a74  7e7 ,contribution
 limit adjustment  7#a7 ,in general     
,except as provided in paragraph 7#b71  
in the case of any taxable year         
beginning after #bjbe1 the ,secretary1  
after consultation with the ,secretary  
of ,housing and ,urban ,development1    
shall adjust the ,state threshold amount
 for each ,state to reflect the median  
home price in each such ,state using the

 most recent data available to the      
,secretary4  7#b7 ,limit may not be     
lowered ,the adjustment described in    
paragraph 7#a7 may only be used to      
increase the ,state threshold amount for
 a ,state4  7f7 ,reports  7#a7 ,in      
general ,the trustee of a first-time    
homebuyer savings account shall make    
such reports regarding such account to  
the ,secretary and to the account       
beneficiary 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 required4  7#b7        
,rollover distributions ,in the case of 
any distribution described in subsection
 7e77#e71 the officer or employee having
 control of the first-time homebuyer    
savings account 7or their designee7     
shall provide a report to the trustee of
 the first-time homebuyer savings       

account to which the distribution is    
made4 ,such report shall be filed at    
such time and in such manner as the     
,secretary may require and shall include
 information with respect to the        
contributions1 distributions1 and       
earnings of the first-time homebuyer    
savings account as of the date of the   
distribution described in such          
subsection1 together with such other    
matters as the ,secretary may require4  
4  7b7 ,deduction allowed above the line
 ,section #fb7;a7 of such ,code is      
amended by inserting after paragraph    
7#ba7 the following new paragraph3      
7#bb7 ,first-time homebuyer savings     
accounts ,the deduction allowed by      
section #bbc;,a4  4  7c7 ,exclusions for
 employer contributions to first-,time  
homebuyer savings accounts  7#a7        
,exclusion from income tax  7,a7 ,in    
general ,part ,,iii of subchapter ,b of 
chapter #a of such ,code is amended by  
inserting after section #aci;,i the     
following new section3  #aci;,j4        

,first-time homebuyer savings account   
contributions  ,in the case of an       
account beneficiary 7as defined in      
section #bbc;,a7c77#c771 gross income   
does not include amounts contributed by 
such account beneficiary's employer to  
any first-time homebuyer savings account
 7as defined in section #bbc;,a7c77#a77 
of such account beneficiary4  4  7,b7   
,clerical amendment  ,the table of      
sections for part ,,iii of subchapter ,b
 of chapter #a of such ,code is amended 
by inserting after the item relating to 
section #aci;,i the following new item3 
,sec4 #aci;,j4 ,first-time homebuyer    
savings account contributions4  4  7#b7 
,exclusion from employment taxes  7,a7  
,social security taxes  7i7  ,in general
  ,section #caba7;a7 is amended by      
striking or at the end of paragraph     
7#bb77;,b71 by striking the period at   
the end of paragraph 7#bc7 and inserting
 1 or1 and by inserting after paragraph 
7#bc7 the following new paragraph3      
7#bd7 any payment made to or for the    

benefit of an employee if at the time of
 such payment it is reasonable to       
believe that the employee will be able  
to exclude such payment from income     
under section #aci;,j4  4  7ii7         
,conforming amendment to ,social        
,security ,act  ,section #bji7;a7 of the
 ,social ,security ,act is amended by   
striking or at the end of paragraph     
7#ai71 by striking 74 at the end of     
paragraph 7#bj7 and inserting 2 or1 and 
by inserting after paragraph 7#bj7 the  
following new paragraph3  7#ba7 any     
reimbursement which is excludable from  
gross income under section #aci;,j of   
the ,internal ,revenue ,code of #aihf4  
4  7,b7  ,railroad retirement tax       
,section #cbca7;e7 of such ,code is     
amended by adding at the end the        
following new paragraph3  7#ac7         
,first-time homebuyer savings account   
contributions  ,the term #8compensation'
 shall not include any payment made to  
or for the benefit of an employee if at 
the time of such payment it is          

reasonable to believe that the employee 
will be able to exclude such payment    
from income under section #aci;,j4  4   
7,c7  ,unemployment tax  ,section       
#ccjf7;b7 of such ,code is amended by   
striking or at the end of paragraph     
7#ai77;,b71 by striking the period at   
the end of paragraph 7#bj7 and inserting
 2 or1 and by inserting after paragraph 
7#bj7 the following new paragraph3      
7#ba7 any payment made to or for the    
benefit of an employee if at the time of
 such payment it is reasonable to       
believe that the employee will be able  
to exclude such payment from income     
under section #aci;,j4  4  7,d7         
,withholding tax  ,section #cdja7;a7 of 
such ,code is amended by striking or at 
the end of paragraph 7#bb71 by striking 
the period at the end of paragraph 7#bc7
 and inserting 2 or1 and by inserting   
after paragraph 7#bc7 the following new 
paragraph3  7#bd7 any payment made to or
 for the benefit of an employee if at   
the time of such payment it is          

reasonable to believe that the employee 
will be able to exclude such payment    
from income under section #aci;,j4  4   
7#c7  ,employer contributions required  
to be shown on ,w-#b  ,section #fjea7;a7
 of such ,code is amended by striking   
and at the end of paragraph 7#af71 by   
striking the period at the end of       
paragraph 7#ag7 and inserting 1 and1 and
 by inserting after paragraph 7#ag7 the 
following new paragraph3  7#ah7 the     
amount contributed to any first-time    
homebuyer savings account 7as defined in
 section #bbc;,a7c77#a77 of such        
employee4  4  7d7 ,tax on 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 
savings account 7within the meaning of  
section #bbc;,a74  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 first-,time    
homebuyer savings account ,for purposes 
of this section1 in the case of         
first-time homebuyer savings accounts   
7as defined in section #bbc;,a71 the    
term excess contributions means the sum 
of--  7#a7 the aggregate amount         
contributed for the taxable year to     
first-time homebuyer savings accounts   
7other than a rollover contribution     
contributed under section #bbc;,a7e77#d7
 or 7#f77 which is neither excludable   
from gross income under section #aci;,j 
nor allowable as a deduction under      
section #bbc;,a for such year1 plus     
7#b7 the amount determined under this   
subsection for the preceding taxable    
year1 reduced by the sum of--  7,a7 the 
distribution out of the first-time      
homebuyer savings accounts which were   
included in gross income under section  
#bbc;,a7e77#a71 plus  7,b7 the excess   
7if any7 of-- 7i7 the maximum amount    

allowable as a deduction under section  
#bbc;,a7b7 7determined without regard to
 section #aci;,j7 for the taxable year1 
over  7ii7 the amount contributed to    
first-time homebuyer savings accounts   
for the taxable year4  ,for purposes of 
this subsection1 any contribution which 
is distributed out of the first-time    
homebuyer savings account in a          
distribution to which section           
#bbc;,a7e77#d77;,c7 applies shall be    
treated as an amount not contributed4  4
  7e7 ,tax on prohibited transactions   
7#a7 ,section #dige7;c7 of such ,code is
 amended by adding at the end the       
following new paragraph3  7#h7 ,special 
rule for first-time homebuyer savings   
accounts ,an individual for whose       
benefit a first-time homebuyer savings  
account 7within the meaning of section  
#bbc;,a7c77 is established shall be     
exempt from the tax imposed by this     
section with respect to any transaction 
concerning such account 7which would    
otherwise be taxable under this section7

 if1 with respect to such transaction1  
the account ceases to be a first-time   
homebuyer savings account by reason of  
the application of section #bbc7;d77#b7 
to such account4  4  7#b7 ,section      
#dige7;e77#a7 of such ,code is amended  
by striking or at the end of            
subparagraph 7,f71 by redesignating     
subparagraph 7,g7 as subparagraph 7,h71 
and by inserting after subparagraph 7,f7
 the following new subparagraph3  7,g7 a
 first-time homebuyer savings account   
described in section #bbc;,a7c74  4  7f7
  ,penalty for failure ,to file reports 
,section #ffic7;a77#b7 of such ,code is 
amended by striking and at the end of   
subparagraph 7,e71 by striking the      
period at the end of subparagraph 7,f7  
and inserting 1 and1 and by inserting   
after subparagraph 7,f7 the following   
new subparagraph3  7,g7 ,section        
#bbc;,a7g7 7relating to first-time      
homebuyer savings accounts74  4  7g7    
,conforming amendments  7#a7 ,section   
#bf7;b77#b7 of such ,code is amended by 

striking and at the end of subparagraph 
7,y71 by striking the period at the end 
of subparagraph 7,z7 and inserting 1    
and1 and by inserting after subparagraph
 7,z7 the following new subparagraph3   
7,,aa7 section #bbc;,a7e77#b7 7relating 
to additional tax on first-time         
homebuyer savings account not used for  
qualified home ownership expenses74  4  
7#b7 ,section #djh7;e77#b77;ii7 of such 
,code is amended by inserting or to a   
first-time homebuyer savings account    
under section #bbc;,a7e77#g7 before the 
period4  7#c7 ,section                  
#ecj7;d77#i77;,a77ii7 of such ,code is  
amended by inserting 1 to a first-time  
homebuyer savings account under section 
#bbc;,a7e77#g71 after section           
#djh7;e77#b74  7#d7 ,section #hgg;,a of 
such ,code is amended-- 7,a7 in         
subsection 7e77#b7 by inserting a       
first-time homebuyer savings account 7as
 defined in section #bbc;,a71 after     
section #bbc711 and  7,b7 in subsection 
7g77#f7 by inserting #bbc7;e77#d71 after

 #ebi;,a7c77#c714  7#e7 ,the table of   
sections for part ,,vii of subchapter ,b
 of chapter #a of such ,code is amended 
by inserting after the item relating to 
section #bbc the following new item3    
,sec4 #bbc;,a4 ,first-time homebuyer    
savings account4  4  7h7 ,effective date
 ,the amendments made by this section   
shall apply to taxable years beginning  
after ,december #ca1 #bjbe4