[Congressional Record Volume 141, Number 57 (Tuesday, March 28, 1995)]
[House]
[Page H3881]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               AMENDMENTS

  Under clause 6 of rule XXIII, proposed amendments were submitted as 
follows:
                               H.R. 1215

                        Offered By: Mr. Browder

       Amendment No. 1: After section 1 of the bill insert the 
     following new sections (and conform the table of contents 
     accordingly):

     SEC. 2. EFFECTIVE DATES DELAYED UNTIL FEDERAL BUDGET 
                   PROJECTED TO BE IN BALANCE.

       (a) In General.--Notwithstanding any other provision of 
     this Act and any amendment made by this Act, except as 
     otherwise provided in this section--
       (1) any reference in this Act (or in any amendment made by 
     this Act) to 1995 (other than to the short title of this Act) 
     shall be treated as a reference to the calendar year ending 
     in the first successful deficit reduction year,
       (2) any reference in this Act (or in any amendment made by 
     this Act) to any later calendar year shall be treated as a 
     reference to the calendar year which is the same number of 
     years after such first calendar year as such later year is 
     after 1995,
       (3) any reference in this Act to the date of the enactment 
     of this Act shall be treated as a reference to the date of 
     the certification referred to in subsection (b)(1), and
       (4) any reference to the base year for any adjustment based 
     on a change in the gross domestic product deflator or the 
     Consumer Price Index shall be treated as a reference to the 
     calendar year preceding the calendar year referred to in 
     paragraph (1).
       (b) First Successful Deficit Reduction Year.--For purposes 
     of this section and section 3--
       (1) In general.--The term ``first successful deficit 
     reduction year'' means the first fiscal year beginning after 
     the date of the enactment of this Act with respect to which 
     there is an OMB certification before the beginning of such 
     fiscal year that the budget of the United States will be in 
     balance by fiscal year 2002 based upon estimates of enacted 
     legislation, including the amendments made by this Act.
       (2) OMB certification.--The term ``OMB certification'' 
     means a written certification by the Director of the Office 
     of Management and Budget to the President and the Congress.
       (c) Certification During 1995.--Subsections (a) and (d) 
     shall not apply if there is an OMB certification made during 
     1995 that the budget of the United States will be in balance 
     by fiscal year 2002 based upon estimates of enacted 
     legislation, including the amendments made by this Act.
       (d) Special Rules.--
       (1) Capital gains; indexing; neutral cost recovery.--Any 
     reference in subtitle A or B of title III (or in any 
     amendment made by such subtitles) to December 31, 1994, or 
     January 1, 1995, shall be treated as a reference to the day 
     preceding and the day on which, respectively, the 
     certification referred to in subsection (b)(1) is made.
       (2) Lessor improvements; minimum tax.--Any reference in 
     section 322 or 331 of this Act (or in any amendment made by 
     such sections) to March 13 or March 14, 1995, shall be 
     treated as a reference to the day preceding and the day on 
     which, respectively, the certification referred to in 
     subsection (b)(1) is made.
       (e) Technical Corrections.--This section and section 3 
     shall not apply to title VI and the amendments made by such 
     title.

     SEC. 3. TERMINATION OF TAX BENEFITS IF FEDERAL BUDGET DEFICIT 
                   REDUCTION TARGETS ARE NOT MET.

       (a) No Credits, Deductions, Exclusions, Preferential Rate 
     of Tax, Etc.--No tax benefit provided
      by any provision of the Internal Revenue Code of 1986 added 
     by this Act shall apply to any taxable year beginning 
     after the calendar year in which the first failed deficit 
     reduction year ends.
       (b) First Failed Deficit Reduction Year.--For purposes of 
     this section, the term ``first failed deficit reduction 
     year'' means the first year (beginning after the earliest 
     date on which any amendment made by this Act takes effect) 
     with respect to which there is an OMB certification during 
     the 3-month period after the close of such fiscal year that 
     the actual deficit in the budget of the United States for 
     such fiscal year was greater than the deficit target for such 
     fiscal year specified in the following table:

``In the case of fiscal year:      The deficit target (in billions) is:
    1996...........................................................$150
    1997............................................................125
    1998............................................................100
    1999.............................................................75
    2000.............................................................50
    2001.............................................................25
    2002 or thereafter...............................................0.

       (c) No Recovery of Foregone Cost-of-Living Adjustment.--Any 
     change in the gross domestic product deflator or the Consumer 
     Price Index which would (but for this section) be taken into 
     account under any amendment made by this Act for any period 
     shall be reduced by the portion of such change attributable 
     to any calendar year beginning after the first failed deficit 
     reduction year.
       (d) Phasein of Benefits Suspended.--For purposes of 
     applying sections 86(a)(3), 1979(b)(1), and 2010(c)(1) of the 
     Internal Revenue Code of 1986 (as added by this Act) and 
     section 203(f)(8)(b)(D) of Social Security Act (as added by 
     this Act), in lieu of applying subsection (a), the level of 
     benefit under each such section with respect to the calendar 
     year in which the first failed deficit reduction year ends 
     shall apply with respect to all succeeding calendar years.
       (e) Restoration of Terminated Minimum Tax Provisions.--If 
     any tax benefit does not apply to any taxable year by reason 
     of subsection (a), the provisions of subpart G of part IV, 
     and part VI, of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 as in effect on the day before the date 
     of the enactment of this Act shall apply to such taxable 
     year.
       (f) Insurance Reserves.--In lieu of applying subsection 
     (a), the amendment made by section 221(b) shall not apply to 
     contracts issued after the calendar year in which the first 
     failed deficit reduction year ends.

                               H.R. 1215

                         Oferred By: Mr. Orton

       Amendment No. 2: At the end of title I of the bill insert 
     the following new sections (and conform the table of contents 
     accordingly):

     SEC. 105. CERTAIN RETIREMENT PLANS AUTHORIZED TO MAKE EQUITY 
                   INVESTMENTS IN PRINCIPAL RESIDENCES FOR FIRST-
                   TIME HOMEBUYERS.

       (a) Exemption From Prohibited Transaction Rules.--Section 
     4975 (relating to tax on prohibited transactions) is amended 
     by redesignating subsections (h) and (i) as subsections (i) 
     and (j), respectively, and by inserting after subsection (g) 
     the following new subsection:
       ``(h) Special Rule for Home Equity Participation 
     Arrangements.--
       ``(1) In general.--The prohibitions provided in subsection 
     (c) shall not apply to any qualified home equity 
     participation arrangement.
       ``(2) Qualified home equity participation arrangement.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified home equity 
     participation arrangement' means an arrangement--
       ``(i) under which the trustee of an individual retirement 
     plan, at the direction of
      the eligible participant, shall acquire an ownership 
     interest in any dwelling unit which within a reasonable 
     period of time (determined at the time the arrangement is 
     executed) is to be used as the principal residence for a 
     first-time homebuyer, and
       ``(ii) which meets the requirements of subparagraph (B) of 
     this paragraph.
       ``(B) Ownership interest requirement.--An arrangement shall 
     meet the requirements of this subparagraph if the ownership 
     interest described in subparagraph (A)--
       ``(i) is a fee interest in such property (and, in the case 
     of an arrangement which is not otherwise at arm's length, the 
     trustee's fee interest would be reasonable in an arm's length 
     arrangement),
       ``(ii) by its terms requires repayment in full upon the 
     sale or other transfer of the dwelling unit, and
       ``(iii) may not be used as security for any loan secured by 
     any interest in the dwelling unit.
       ``(3) Definitions.--For purposes of this subsection--
       ``(A) Eligible participant.--The term `eligible 
     participant' means an individual on whose behalf an 
     individual retirement plan is established.
       ``(B) First-time homebuyer.--The term `first-time 
     homebuyer' means an individual who--
       ``(i) is an eligible participant or qualified family 
     member, and
       ``(ii) had (and if married, such individual's spouse had) 
     no present ownership interest in a principal residence at any 
     time during the 36-month period before the date of the 
     arrangement.
       ``(C) Qualified family member.--The term `qualified family 
     member' means a child (as defined in section 151(c)(3)), 
     parent, or grandparent of the eligible participant (or such 
     participant's spouse). Section 152(b)(2) shall apply in 
     determining if an individual is a parent or grandparent of an 
     eligible participant (or such participant's spouse).
       ``(D) Acquisition; etc.--
       ``(i) Acquisition.--The term `acquisition' includes 
     construction, reconstruction, and improvement related to such 
     acquisition.
       [[Page H3881]] ``(ii) Acquisition cost.--The term 
     `acquisition cost' has the meaning given such term by section 
     143(k)(3).
       ``(E) Principal residence.--The term `principal residence' 
     has the same meaning as when used in section 1034.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to arrangements entered into after the date of 
     the enactment of this Act.

     SEC. 106. LOANS USED TO ACQUIRE PRINCIPAL RESIDENCES FOR 
                   FIRST-TIME HOMEBUYERS.

       (a) Individual Retirement Plans.--Section 408(e) (relating 
     to tax treatment of accounts and annuities) is amended by 
     adding at the end thereof the following new paragraph:
       ``(7) Loans used to purchase a home for first-time 
     homebuyers.--
       ``(A) In general.--Paragraph (3) shall not apply to any 
     qualified home purchase loan made by an individual retirement 
     plan.
       ``(B) Qualified home purchase loan.--For purposes of this 
     paragraph, the
      term `qualified home purchase loan' means a loan--
       ``(i) made by the trustee of an individual retirement plan 
     at the direction of the individual on whose behalf such plan 
     is established,
       ``(ii) the proceeds of which are used for the acquisition 
     of a dwelling unit which within a reasonable period of time 
     (determined at the time the loan is made) is to be used as 
     the principal residence for a first-time homebuyer,
       ``(iii) which by its terms requires repayment in full not 
     later than the earlier of--
       ``(I) the date which is 15 years after the date of 
     acquisition of the dwelling unit, or
       ``(II) the date of the sale or other transfer of the 
     dwelling unit,
       ``(iv) which by its terms treats any amount remaining 
     unpaid in the taxable year beginning after the period 
     described in clause (iii) as distributed in such taxable year 
     to the individual on whose behalf such plan is established 
     and subject to section 72(t)(1), and
       ``(v) which bears interest from the date of the loan at a 
     rate not less than 2 percentage points below, and not more 
     than 2 percentage points above, the rate for comparable 
     United States Treasury obligations on such date.

     Nothing in this paragraph shall be construed to require such 
     a loan to be secured by the dwelling unit.
       ``(C) Definitions.--For purposes of this paragraph--
       ``(i) First-time homebuyer.--The term `first-time 
     homebuyer' has the meaning given such term by section 
     4975(h)(3)(B).
       ``(ii) Acquisition.--The term `acquisition' has the meaning 
     given such term by section 4975(h)(3)(D)(i).
       ``(iii) Principal residence.--The term `principal 
     residence' has the same meaning as when used in section 1034.
       ``(iv) Date of acquisition.--The term `date of acquisition' 
     means the date--
       ``(I) on which a binding contract to acquire the principal 
     residence to which subparagraph (B) applies is entered into, 
     or
       ``(II) on which construction, reconstruction, or 
     improvement of such a principal residence is commenced.''.
       (b) Prohibited Transaction.--Section 4975(d) (relating to 
     exemptions from tax on prohibited transactions) is amended by 
     striking ``or'' at the end of paragraph (14), by striking the 
     period at the end of paragraph (15) and inserting ``; or'', 
     and by inserting after paragraph (15) the following new 
     paragraph:
       ``(16) any loan that is a qualified home purchase loan (as 
     defined in section 408(e)(7)(B)).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to loans made after the date of the enactment of 
     this Act.
Vol. 141          WASHINGTON, TUESDAY, MARCH 28, 1995            No. 57
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                                 Senate


              (Legislative day of Monday, March 27, 1995)