II

106TH CONGRESS

1ST SESSION S. 478

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.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 25, 1999

Mr. SCHUMER introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. FIRST-TIME HOMEBUYER CREDIT FOR EM4 POWERMENT ZONES AND ENTERPRISE COM5 MUNITIES.

6 (a) IN GENERAL.—Subchapter U of chapter 1 of the

7 Internal Revenue Code of 1986 (relating to designation

8 and treatment of empowerment zones, enterprise commu-
2

•S 478 IS

1 nities, and rural development investment areas) is amend2 ed by redesignating part V as part VI, by redesignating

3 section 1397F as section 1397G, and by inserting after

4 part IV the following new part:

5 ‘‘PART V—FIRST-TIME HOMEBUYER

6 CREDIT

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

7 ‘‘SEC. 1397F. FIRST-TIME HOMEBUYER CREDIT.

8 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in9 dividual who is a first-time homebuyer of a principal resi10 dence in an empowerment zone or an enterprise commu11 nity during any taxable year, there shall be allowed as a

12 credit against the tax imposed by this chapter for the tax13 able year an amount equal to so much of the purchase

14 price of the residence as does not exceed $2,000.

15 ‘‘(b) LIMITATION BASED ON MODIFIED ADJUSTED

16 GROSS INCOME.—

17 ‘‘(1) IN GENERAL.—The amount allowable as a

18 credit under subsection (a) (determined without re19 gard to this subsection) for the taxable year shall be

20 reduced (but not below zero) by the amount which

21 bears the same ratio to the credit so allowable as—

22 ‘‘(A) the excess (if any) of—

23 ‘‘(i) the taxpayer’s modified adjusted

24 gross income for such taxable year, over
3

•S 478 IS

1 ‘‘(ii) $70,000 ($110,000 in the case of

2 a joint return), bears to

3 ‘‘(B) $20,000.

4 ‘‘(2) MODIFIED ADJUSTED GROSS INCOME.—

5 For purposes of paragraph (1), the term ‘modified

6 adjusted gross income’ means the adjusted gross in7 come of the taxpayer for the taxable year increased

8 by any amount excluded from gross income under

9 section 911, 931, or 933.

10 ‘‘(c) FIRST-TIME HOMEBUYER.—For purposes of

11 this section—

12 ‘‘(1) IN GENERAL.—The term ‘first-time home13 buyer’ means any individual if such individual (and

14 if married, such individual’s spouse) had no present

15 ownership interest in a principal residence in either

16 an empowerment zone or an enterprise community

17 during the 1-year period ending on the date of the

18 purchase of the principal residence to which this sec19 tion applies.

20 ‘‘(2) ONE-TIME ONLY.—If an individual is

21 treated as a first-time homebuyer with respect to

22 any principal residence, such individual may not be

23 treated as a first-time homebuyer with respect to

24 any other principal residence.
4

•S 478 IS

1 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin2 cipal residence’ has the same meaning as when used

3 in section 121.

4 ‘‘(d) CARRYOVER OF CREDIT.—If the credit allowable

5 under subsection (a) exceeds the limitation imposed by

6 section 26(a) for such taxable year reduced by the sum

7 of the credits allowable under subpart A of part IV of sub8 chapter A (other than this section), such excess shall be

9 carried to the succeeding taxable year and added to the

10 credit allowable under subsection (a) for such taxable year.

11 ‘‘(e) SPECIAL RULES.—For purposes of this section,

12 rules similar to the rules of subsections (e), (f), (g), and

13 (h) of section 1400C shall apply.

14 ‘‘(f) APPLICATION OF SECTION.—This section shall

15 apply to property purchased after the date of the enact16 ment of this section and before January 1, 2002.’’

17 (b) CONFORMING AMENDMENTS.—

18 (1) Subsection (a) of section 1016 of such Code

19 is amended by striking ‘‘and’’ at the end of para20 graph (26), by striking the period at the end of

21 paragraph (27) and inserting ‘‘, and’’, and by add22 ing at the end thereof the following new paragraph:

23 ‘‘(28) in the case of a residence with respect to

24 which a credit was allowed under section 1397F, to

25 the extent provided under such section 1397F.’’
5

•S 478 IS

1 (2) The table of parts for subchapter U of

2 chapter 1 of such Code is amended by striking the

3 last item and inserting the following new items:

‘‘Part V. First-time homebuyer credit.

‘‘Part VI. Regulations.’’

4 (3) The table of sections for part VI of such

5 Code, as so redesignated, is amended to read as fol6 lows:

‘‘Sec. 1397G. Regulations.’’

7 (c) EFFECTIVE DATE.—The amendments made by

8 this section shall take effect on the date of the enactment

9 of this Act.

Æ