To amend the Internal Revenue Code of 1986 to provide a credit for the purchase of a principal residence within an empowerment zone or enterprise community by a first-time homebuyer.

Summary: Amends the Internal Revenue Code to permit a limited tax credit to a first-time purchaser of a principal residence in an enterprise zone or an empowerment community.

SECTION 1. FIRST-TIME HOMEBUYER CREDIT FOR EMPOWERMENT ZONES AND 
              ENTERPRISE COMMUNITIES.

    (a) In General.--Subchapter U of chapter 1 of the Internal Revenue 
Code of 1986 (relating to additional incentives for empowerment zones) 
is amended by redesignating part V as part VI, by redesignating section 
1397F as section 1397G, and by inserting after part IV the following 
new part:

                 ``Part V--First-Time Homebuyer Credit

                              ``Sec. 1397F. First-time homebuyer 
                                        credit.

``SEC. 1397F. FIRST-TIME HOMEBUYER CREDIT.

    ``(a) Allowance of Credit.--In the case of an individual who is a 
first-time homebuyer of a principal residence in an empowerment zone or 
an enterprise community during any taxable year, there shall be allowed 
as a credit against the tax imposed by this chapter for the taxable 
year an amount equal to so much of the purchase price of the residence 
as does not exceed $2,000.
    ``(b) Limitation Based on Modified Adjusted Gross Income.--
            ``(1) In general.--The amount allowable as a credit under 
        subsection (a) (determined without regard to this subsection) 
        for the taxable year shall be reduced (but not below zero) by 
        the amount which bears the same ratio to the credit so 
        allowable as--
                    ``(A) the excess (if any) of--
                            ``(i) the taxpayer's modified adjusted 
                        gross income for such taxable year, over
                            ``(ii) $70,000 ($110,000 in the case of a 
                        joint return), bears to
                    ``(B) $20,000.
            ``(2) Modified adjusted gross income.--For purposes of 
        paragraph (1), the term `modified adjusted gross income' means 
        the adjusted gross income of the taxpayer for the taxable year 
        increased by any amount excluded from gross income under 
        section 911, 931, or 933.
    ``(c) First-Time Homebuyer.--For purposes of this section--
            ``(1) In general.--The term `first-time homebuyer' means 
        any individual if such individual (and if married, such 
        individual's spouse) had no present ownership interest in a 
        principal residence in either an empowerment zone or an 
        enterprise community during the 1-year period ending on the 
        date of the purchase of the principal residence to which this 
        section applies.
            ``(2) One-time only.--If an individual is treated as a 
        first-time homebuyer with respect to any principal residence, 
        such individual may not be treated as a first-time homebuyer 
        with respect to any other principal residence.
            ``(3) Principal residence.--The term `principal residence' 
        has the same meaning as when used in section 121.
    ``(d) Carryover of Credit.--If the credit allowable under 
subsection (a) exceeds the limitation imposed by section 26(a) for such 
taxable year reduced by the sum of the credits allowable under subpart 
A of part IV of subchapter A (other than this section), such excess 
shall be carried to the succeeding taxable year and added to the credit 
allowable under subsection (a) for such taxable year.
    ``(e) Special Rules.--For purposes of this section, rules similar 
to the rules of subsections (e), (f), (g), and (h) of section 1400C 
shall apply.
    ``(f) Application of Section.--This section shall apply to property 
purchased after the date of the enactment of this section and before 
January 1, 2001.''
    (b) Conforming Amendments.--
            (1) Subsection (d) of section 39 of such Code is amended by 
        adding at the end the following new paragraph:
            ``(9) No carryback of empowerment zone-enterprise community 
        first-time homebuyer credit before effective date.--No portion 
        of the unused business credit for any taxable year which is 
        attributable to the first-time homebuyer credit determined 
        under section 1397F may be carried back to a taxable year 
        ending before the date of the enactment of section 1397F.''
            (2) Subsection (a) of section 1016 of such Code is amended 
        by striking ``and'' at the end of paragraph (26), by striking 
        the period at the end of paragraph (27) and inserting ``, 
        and'', and by adding at the end thereof the following new 
        paragraph:
            ``(28) in the case of a residence with respect to which a 
        credit was allowed under section 1397F, to the extent provided 
        under such section 1397F.''
    (c) Conforming Amendments.--
            (1) The table of parts for subchapter U of chapter 1 of 
        such Code is amended by striking the last item and inserting 
        the following:

                              ``Part V. First-time homebuyer credit.
                              ``Part VI. Regulations.''.

            (2) The table of sections for part VI of such Code, as so 
        redesignated, is amended to read as follows:

                              ``Sec. 1397G. Regulations.''.

    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.