I
107TH CONGRESS
1ST SESSION
H. R. 1788
To amend the Internal Revenue Code of 1986 with respect to the treatment
of cooperative housing corporations.
IN THE HOUSE OF REPRESENTATIVES
MAY 9, 2001
Mr. RANGEL introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 with respect
to the treatment of cooperative housing corporations.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Cooperative Housing
Act of 2001’’.
SEC. 2. MODIFICATION OF GROSS INCOME TEST FOR DE-
TERMINING WHETHER CORPORATION IS CO-
OPERATIVE HOUSING CORPORATION.
(a) IN GENERAL.—Subparagraph (D) of section
216(b)(1) of the Internal Revenue Code of 1986 (defining
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cooperative housing corporations) is amended to read as
follows:
‘‘(D) 80 percent or more of the total base
receipts of which for the taxable year in which
the taxes and interest described in subsection
(a) are paid or incurred are qualified housing
receipts.’’
(b) DEFINITIONS.—Subsection (b) of section 216 of
such Code is amended by adding at the end the following
new paragraphs:
‘‘(7) TOTAL BASE RECEIPTS.—
‘‘(A) IN GENERAL.—The term ‘total base
receipts’ means the sum of—
‘‘(i) gross income, and
‘‘(ii) qualified housing receipts to the
extent not includible in gross income.
‘‘(B) EXCEPTIONS.—For purposes of sub-
paragraph (A), gross income shall be deter-
mined without regard to amounts received or
accrued on account of—
‘‘(i) discharge of indebtedness,
‘‘(ii) fire, theft, or other casualty in-
surance proceeds,
‘‘(iii) refunds and interest thereon,
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‘‘(iv) redemptions of stock of, or pa-
tronage dividends from, a cooperative,
‘‘(v) interest on reserves to the extent
that such reserves are—
‘‘(I) maintained in connection
with providing housing to the corpora-
tion’s tenant-stockholders, and
‘‘(II) required by a governmental
agency, a lender, or as a matter of or-
dinary business prudence, or
‘‘(vi) other items that the Secretary
determines should be excluded in order to
effectuate the intent of this section.
‘‘(8) QUALIFIED
HOUSING
RECEIPTS.—The
term ‘qualified housing receipts’ includes amounts
(whether or not includible in gross income) received
or accrued on account of—
‘‘(A) obligations of tenant-stockholders in
their capacity as such, including contributions
to capital, charges for the tenant-stockholder’s
dwelling unit or appurtenant facilities, pay-
ments for utilities or other services rendered in
connection with the tenant-stockholder’s dwell-
ing unit, and interest and late charges in con-
nection with any of the foregoing,
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‘‘(B) similar obligations of occupants of de-
fault units, but as to any taxable year only to
the extent that the amount does not exceed the
amount that would be described in subpara-
graph (A) had the dwelling units not become
default units,
‘‘(C) the operation of laundry, parking,
recreational or other facilities substantially all
the customers of which are occupants of either
tenant-stockholders’ dwelling units or default
units,
‘‘(D) other items that the Secretary deter-
mines should be included in order to effectuate
the intent of this section, and
‘‘(E) insurance proceeds in lieu of any of
the foregoing.
‘‘(9) DEFAULT UNIT.—
‘‘(A) IN
GENERAL.—The term ‘default
unit’ means a dwelling unit to which shares
were allocated and issued and were last out-
standing in the hands of a person who, as a
consequence of a default in an obligation to the
corporation, lost the right to occupy such dwell-
ing unit (whether such shares continue to be
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held by such person, were acquired by the cor-
poration, or were canceled).
‘‘(B) APPLICATION OF PROVISIONS TO DE-
FAULT UNITS.—The shares allocated to a de-
fault unit—
‘‘(i) shall not be taken into account
for purposes of paragraph (1)(B),
‘‘(ii) shall, if reissued, be treated for
purposes of paragraph (2) as if they had
remained issued, and
‘‘(iii) shall be treated as outstanding
for purposes of paragraph (3)(A).’’
SEC. 3. EFFECTIVE DATE.
(a) IN GENERAL.—Except as provided in subsection
(b), the amendments made by this Act shall apply to tax-
able years beginning after the date of the enactment of
this Act.
(b) ELECTION
TO
HAVE
AMENDMENTS
APPLY
RETROACTIVELY.—Any corporation may elect to have the
amendments made by this Act apply to any taxable year,
whether beginning before, on, or after the date of the en-
actment of this Act, to which such amendments do not
otherwise apply if the corporation was a cooperative hous-
ing corporation during such taxable year.
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(c) NO INFERENCE.—Nothing in this Act shall be
construed as a change in the treatment of income derived
by any cooperative housing corporation or any corporation
operating on a cooperative basis under section 1381 of the
Internal Revenue Code of 1986, and the treatment of such
income for any year to which the amendments made by
this Act does not apply shall be made as if this Act had
not been enacted.
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