[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3389 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 3389

 To amend the Internal Revenue Code of 1986 to exclude from the gross 
   income of an employee certain housing incentives provided by such 
   employee's employer to purchase and reside in housing located in 
                         qualified urban areas.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 16, 1999

Mr. English (for himself, Mr. Fattah, Mrs. Johnson of Connecticut, Mr. 
     Owens, Mr. Smith of Texas, Mr. Forbes, Ms. DeLauro, and Mrs. 
 Christensen) 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 the gross 
   income of an employee certain housing incentives provided by such 
   employee's employer to purchase and reside in housing located in 
                         qualified urban areas.

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

SECTION 1. QUALIFIED HOUSING FRINGE BENEFIT.

    (a) In General.--Section 132(a) of the Internal Revenue Code of 
1986 (relating to the exclusion from gross income of certain fringe 
benefits) is amended by striking ``or'' at the end of paragraph (5), by 
striking the period at the end of paragraph (6) and inserting ``, or'' 
and by adding at the end the following new paragraph:
            ``(7) qualified urban housing fringe.''
    (b) Qualified Urban Housing Fringe.--Section 132 of such Code is 
amended by redesignating subsections (h) through (m) as subsections (i) 
through (n), respectively, and by inserting after subsection (g) the 
following new subsection (h):
    ``(h) Qualified Urban Housing Fringe.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified urban housing fringe' means 1 or more payments by an 
        employer described in clause (ii) or (iii) of section 
        170(b)(1)(A) to an employee under a written program adopted by 
        such employer for the purpose of supporting the acquisition of 
        qualified urban housing by employees of such employer.
            ``(2) Limitation on exclusion.--The amount excluded from 
        the gross income of an employee under subsection (a)(7) for the 
        taxable year shall not exceed the excess of--
                    ``(A) $25,000 over
                    ``(B) the amount excluded from the gross income of 
                such employee or such employee's spouse under this 
                subsection for all prior taxable years.
        In the case of a husband and wife both of whom are employees of 
        the employer, the limitation under subparagraph (A) shall be 
        divided equally between such employees unless they agree on a 
        different allocation.
            ``(3) Definitions.--For purposes of this subsection--
                    ``(A) Qualified urban housing.--The term `qualified 
                urban housing' means property--
                            ``(i) which is used as the employee's 
                        principal residence (within the meaning of 
                        section 121), and
                            ``(ii) which is located in an area which, 
                        at the time of the employee's acquisition of 
                        the property, is a qualified census tract.
                    ``(B) Qualified census tract.--The term `qualified 
                census tract' means any census tract if--
                            ``(i) for the most recent year for which 
                        census data are available on household income 
                        in such tract, 20 percent or more of the 
                        households in such tract have an income which 
                        is less than 60 percent of the area median 
                        gross income for such year,
                            ``(ii) the census tract is located in an 
                        urban area (as defined in section 1393), and
                            ``(iii) the census tract would meet the 
                        requirements of section 1391 if such tract were 
                        a nominated area.
                    ``(C) Employee.--The term `employee' includes 
                individuals described in subparagraph (A) or (B) of 
                subsection (i)(1).
            ``(4) Inflation adjustment.--
                    ``(A) In general.--In the case of any taxable year 
                beginning in a calendar year after 1999, the dollar 
                amount contained in paragraph (2) shall be increased by 
                an amount equal to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for the 
                        calendar year in which the taxable year begins 
                        by substituting `calendar year 1998' for 
                        `calendar year 1992' in subparagraph (B) 
                        thereof.
                    ``(B) Rounding.--If any increase determined under 
                subparagraph (A) is not a multiple of $500, such 
                increase shall be rounded to the next lowest multiple 
                of $500.''.
    (c) No Discrimination in Favor of Highly Compensated.--Paragraph 
(1) of subsection 132(k) of such Code (as redesignated by subsection 
(b)) is amended to read as follows:
            ``(1) Exclusions under subsection (a)(1), (2), and (7) 
        apply to highly compensated employees only if no 
        discrimination.--Paragraphs (1), (2), and (7) of subsection (a) 
        shall apply with respect to any fringe benefit described 
        therein provided with respect to any highly compensated 
        employee only if such fringe benefit is available on 
        substantially the same terms to each member of a group of 
        employees which is defined under a reasonable classification 
        set up by the employer which does not discriminate in favor of 
        highly compensated employees.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1998.
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