[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3403 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 3403

    To amend the Internal Revenue Code of 1986 with respect to the 
             treatment of cooperative housing corporations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 16, 1999

  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 Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Cooperative Housing Act of 1999''.

SEC. 2. MODIFICATION OF GROSS INCOME TEST FOR DETERMINING WHETHER 
              CORPORATION IS COOPERATIVE HOUSING CORPORATION.

    (a) In General.--Subparagraph (D) of section 216(b)(1) of the 
Internal Revenue Code of 1986 (defining 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 subparagraph 
                (A), gross income shall be determined without regard to 
                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--
                                    ``(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 (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, 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 
                be described in 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) insurance proceeds in lieu of any of the 
                foregoing, and
                    ``(E) other items that the Secretary determines 
                should be included in order to effectuate the intent of 
                this section.
            ``(9) Default unit.--
                    ``(A) In general.--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 
                canceled).
                    ``(B) Application of provisions to default units.--
                The shares allocated to a default 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 taxable 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 enactment of this Act, to which such amendments do not otherwise 
apply if the corporation was a cooperative housing corporation during 
such taxable year.
    (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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