I 

110TH CONGRESS 

2D SESSION H. R. 5776 

To amend the Internal Revenue Code of 1986 to exclude from gross income 

certain distributions from qualified retirement plans used for mortgage 

payments. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 10, 2008 

Mr. SHADEGG (for himself, Mr. FEENEY, Mr. MARCHANT, Mr. BROUN of 

Georgia, Mrs. MUSGRAVE, Mr. WESTMORELAND, Mr. GOODE, Mr. BARTLETT of Maryland, Mr. GOHMERT, Mrs. BLACKBURN, Mr. FRANKS of Arizona, Mr. AKIN, Mr. CAMPBELL of California, Mr. PITTS, Mr. PRICE of 

Georgia, Mr. SENSENBRENNER, and Mr. HOEKSTRA) introduced the following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to exclude 

from gross income certain distributions from qualified 

retirement plans used for mortgage payments. 

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

3 SECTION 1. SHORT TITLE; CONSTITUTIONAL AUTHORITY. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Homeowner Empowerment Act of 2008’’. 

6 (b) CONSTITUTIONAL AUTHORITY TO ENACT THIS

7 LEGISLATION.—The constitutional authority upon which 


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1 this Act rests is the power of Congress to lay and collect 

2 taxes, set forth in article I, section 8 of the United States 

3 Constitution. 

4 SEC. 2. EXCLUSION FROM GROSS INCOME OF CERTAIN DIS5 TRIBUTIONS FROM QUALIFIED RETIREMENT 

6 PLANS USED FOR MORTGAGE PAYMENTS. 

7 (a) IN GENERAL.—Part III of subchapter B of chap8 ter 1 of the Internal Revenue Code of 1986 is amended 

9 by inserting after section 139A the following new section: 

10 ‘‘SEC. 139B. CERTAIN DISTRIBUTIONS FROM QUALIFIED RE11 TIREMENT PLANS USED FOR MORTGAGE PAY12 MENTS. 

13 ‘‘(a) IN GENERAL.—Gross income shall not include 

14 a qualified mortgage distribution. 

15 ‘‘(b) LIMITATION.—Subsection (a) shall not apply to 

16 any distribution made in any month to the extent that 

17 such distribution (when added to all other distributions 

18 made in such month which are taken into account under 

19 subsection (a) with respect to any individual) exceeds 

20 $5,000. 

21 ‘‘(c) QUALIFIED MORTGAGE DISTRIBUTION.—For 

22 purposes of this section— 

23 ‘‘(1) IN GENERAL.—The term ‘qualified mort24 gage distribution’ means any distribution which is 

25 made before January 1, 2010, from an individual reVerDate Aug 31 2005 22:25 Apr 14, 2008 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5776.IH H5776

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1 tirement plan, or from amounts attributable to em2 ployer contributions made pursuant to elective defer3 rals described in subparagraph (A) or (C) of section 

4 402(g)(3) or section 501(c)(18)(D)(iii), directly by 

5 the trustee of the plan to a mortgagee with respect 

6 to a qualified mortgage of any individual. Such term 

7 shall not include any distribution to the extent that 

8 such distribution exceeds the required minimum pay9 ment due under the terms of the mortgage. 

10 ‘‘(2) QUALIFIED MORTGAGE.—The term ‘quali11 fied mortgage’ means any mortgage which is— 

12 ‘‘(A) secured by the principal residence 

13 (within the meaning of section 121) of the 

14 mortgagor, and 

15 ‘‘(B) originated before January 1, 2008. 

16 ‘‘(d) REQUIREMENT TO REPAY DISTRIBUTIONS.— 

17 For purposes of this section— 

18 ‘‘(1) IN GENERAL.—The term ‘qualified mort19 gage distribution’ shall not include any distribution 

20 except to the extent that one or more contributions 

21 to an individual retirement plan of the taxpayer in 

22 an aggregate amount equal to such distribution are 

23 made during the 12-year period beginning on the 

24 date of such distribution. 


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1 ‘‘(2) TREATMENT OF RECONTRIBUTIONS.—In 

2 the case of any contribution to an individual retire3 ment plan taken into account under paragraph (1)— 

4 ‘‘(A) the dollar limitations otherwise appli5 cable to contributions to individual retirement 

6 plans shall not apply to such contribution, and 

7 ‘‘(B) no deduction shall be allowed for 

8 such contribution. 

9 ‘‘(3) FAILURE TO REPAY.—In the case of a fail10 ure to make the aggregate amount of contributions 

11 described in paragraph (1) during the 12-year period 

12 described therein with respect to any distribution 

13 which would (but for paragraph (1)) be a qualified 

14 mortgage distribution, such distribution shall be in15 cludible in the gross income of the taxpayer for the 

16 taxable year in which such 12-year period ends in 

17 lieu of the taxable year in which the distribution was 

18 made.’’. 

19 (b) WAIVER OF 10 PERCENT EARLY WITHDRAWAL

20 PENALTY WITHOUT REGARD TO REPAYMENT REQUIRE21 MENT.—Paragraph (2) of section 72(t) is amended by 

22 adding at the end the following new subparagraph: 

23 ‘‘(H) QUALIFIED MORTGAGE DISTRIBU24 TIONS.—Any qualified mortgage distribution 


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1 (as defined in section 139B, but without regard 

2 to subsection (d) thereof).’’. 

3 (c) CONFORMING AMENDMENTS.— 

4 (1) Section 401(k)(2)(B)(i) of such Code is 

5 amended by striking ‘‘or’’ at the end of subclause 

6 (IV), by striking ‘‘and’’ at the end of subclause (V) 

7 and inserting ‘‘or’’, and by inserting after subclause 

8 (V) the following new subclause: 

9 ‘‘(VI) in the case of a distribu10 tion to which section 139B(a) applies, 

11 the date on which such distribution is 

12 made, and’’. 

13 (2) Section 403(b)(7)(A)(ii) of such Code is 

14 amended by inserting ‘‘or 139B(a)’’ after ‘‘section 

15 72(t)(2)(G)’’. 

16 (3) Section 403(b)(11) of such Code is amend17 ed by striking ‘‘or’’ at the end of subparagraph (B), 

18 by striking the period at the end of subparagraph 

19 (C) and inserting ‘‘, or’’, and by inserting after sub20 paragraph (C) the following new subparagraph: 

21 ‘‘(D) for distributions to which section 

22 139B(a) applies.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to distributions made after the 

3 date of the enactment of this Act. 

Æ 


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