[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4397 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4397

  To amend the Internal Revenue Code of 1986 to modify the rules for 
determining whether a corporation is a cooperative housing corporation 
                       for purposes of such Code.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 4, 1998

 Mr. Schumer 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 modify the rules for 
determining whether a corporation is a cooperative housing corporation 
                       for purposes of such Code.

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

SECTION 1. MODIFICATION TO DEFINITION OF COOPERATIVE HOUSING 
              CORPORATION.

    (a) In General.--Subparagraph (D) of section 216(b)(1) of the 
Internal Revenue Code of 1986 (defining cooperative housing 
corporation) 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 is 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.--The term `total base receipts' 
        includes only--
                    ``(A) qualified housing receipts, whether or not 
                includible in gross income, and
                    ``(B) all other amounts includible in gross income, 
                other than amounts received or accrued on account of--
                            ``(i) discharge of indebtedness,
                            ``(ii) fire, theft, or other casualty 
                        insurance proceeds,
                            ``(iii) refunds and interest thereon,
                            ``(iv) redemptions of stock of, or 
                        patronage dividends from, a cooperative,
                            ``(v) interest on reserves to the extent 
                        that such reserves are both (I) maintained in 
                        connection with providing housing to the 
                        corporation's tenant-stockholders and (II) 
                        required by a governmental agency, a lender, or 
                        as a matter of ordinary 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 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, payments for utilities or other 
                services rendered in connection with the tenant-
                stockholder's dwelling unit, and interest and late 
                charges in connection with any of the foregoing,
                    ``(B) similar obligations of occupants of default 
                units, but as to any taxable year only to the extent 
                that the amount does not exceed the amount that would 
                have come within subparagraph (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 determines 
                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.--The term `default unit' means a 
        dwelling unit to which shares were allocated and issued and 
        were last outstanding 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 dwelling unit (whether such 
        shares continue to be held by such person, were acquired by the 
        corporation, or were cancelled). The shares allocated to a 
        default unit shall not be taken into account for purposes of 
        paragraph (1)(B), shall if reissued be treated for purposes of 
        paragraph (2) as if they had remained issued, and shall be 
        treated as outstanding for purposes of paragraph (3)(A).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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