Text of Senate Amendment 4303

Text of Senate Amendment 4303

Congressional Record, Volume 172 Issue 40 (Tuesday, March 3, 2026) [Congressional Record Volume 172, Number 40 (Tuesday, March 3, 2026)] [Senate] [Pages S764-S765] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] SA 4303. Mr. HAWLEY submitted an amendment intended to be proposed by him to the bill H.R. 6644, a bill to increase the supply of housing in America, and for other purposes; which was ordered to lie on the table; as follows: At the appropriate place, insert the following: SEC. ___. WITHDRAWALS FOR FIRST-TIME HOME PURCHASES. (a) In General.--Section 402 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: ``(m) Distributions for First-time Home Purchases.-- ``(1) In general.--Gross income does not include any payment or distribution received by an individual from a plan to the extent such payment or distribution is used by the individual before the close of the 120th day after the day on which such payment or distribution is received to pay qualified acquisition costs with respect to a principal residence of a first-time homebuyer who is such individual, the spouse of such individual, or any child, grandchild, or ancestor of such individual or the individual's spouse. ``(2) Distributions must otherwise be includible.--Rules similar to the rules of subsection (l)(3) shall apply for purposes of this subsection. ``(3) Definitions and special rules.--For purposes of this subsection-- ``(A) Qualified acquisition costs.--The term `qualified acquisition costs' means the costs of acquiring, constructing, or reconstructing a residence. Such term includes any usual or reasonable settlement, financing, or other closing costs. ``(B) First-time homebuyer.--The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence at any time prior to the date of acquisition of the principal residence to which this paragraph applies. ``(C) Principal residence.--The term `principal residence' has the same meaning as when used in section 121. ``(D) Date of acquisition.--The term `date of acquisition' means the date-- ``(i) on which a binding contract to acquire the principal residence to which paragraph (1) applies is entered into, or ``(ii) on which construction or reconstruction of such a principal residence is commenced. ``(E) Special rule where delay in acquisition.--If any distribution from a plan fails to meet the requirements of paragraph (1) solely by reason of a delay or cancellation of the purchase or construction of the residence, the amount of the distribution may be contributed to the plan and, if so contributed, the distribution shall be treated as not having been made. ``(F) Other special rules.--Rules similar to the rules of subsection (l)(5) shall apply. ``(4) Coordination with section 401.--A plan shall not be treated as violating the requirements of section 401, or as engaging in a prohibited transaction for purposes of section 503(b), merely because it allows for a distribution described in paragraph (1).''. (b) Qualified Cash or Deferred Arrangements.--Clause (i) of section 401(k)(2)(B) of the Internal Revenue Code of 1986 is amended by striking ``or'' at the end of subclause (VI), by adding ``or'' at the end of subclause (VII), and by adding at the end the following new subclause: ``(VIII) as provided in section 402(m),''. (c) Annuities.--Subsection (a) of section 403 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: ``(7) Special rule for distributions for first-time home purchases.--To the extent provided in section 402(m), paragraph (1) shall not apply to the amount distributed under the contract which is otherwise includible in gross income under this subsection.''. (d) Governmental Annuities.--Subsection (b) of section 403 of the Internal Revenue [[Page S765]] Code of 1986 is amended by adding at the end the following new paragraph: ``(18) Special rule for distributions for first-time home purchases.--To the extent provided in section 402(m), paragraph (1) shall not apply to the amount distributed under the contract which is otherwise includible in gross income under this subsection.''. (e) Individual Retirement Accounts.--Subsection (d) of section 408 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: ``(10) Distributions for first-time home purchases.-- ``(A) In general.--Gross income does not include any payment or distribution received by an individual from an individual retirement plan (other than a plan described in subsection (k) or (p)) to the extent such payment or distribution is used by the individual before the close of the 120th day after the day on which such payment or distribution is received to pay qualified acquisition costs with respect to a principal residence of a first-time homebuyer who is such individual, the spouse of such individual, or any child, grandchild, or ancestor of such individual or the individual's spouse. ``(B) Distributions must otherwise be includible.--Rules similar to the rules of paragraph (8)(C) shall apply for purposes of this paragraph. ``(C) Definitions and special rules.--For purposes of this paragraph-- ``(i) Qualified acquisition costs.--The term `qualified acquisition costs' means the costs of acquiring, constructing, or reconstructing a residence. Such term includes any usual or reasonable settlement, financing, or other closing costs. ``(ii) First-time homebuyer.--The term `first-time homebuyer' means any individual if such individual (and if married, such individual's spouse) had no present ownership interest in a principal residence at any time prior to the date of acquisition of the principal residence to which this paragraph applies. ``(iii) Principal residence.--The term `principal residence' has the same meaning as when used in section 121. ``(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 (A) applies is entered into, or ``(II) on which construction or reconstruction of such a principal residence is commenced. ``(v) Special rule where delay in acquisition.--If any distribution from any individual retirement plan fails to meet the requirements of subparagraph (A) solely by reason of a delay or cancellation of the purchase or construction of the residence, the amount of the distribution may be contributed to an individual retirement plan as provided in paragraph (3)(A)(i) (determined by substituting `120th day' for `60th day' in such section), except that-- ``(I) paragraph (3)(B) shall not be applied to such contribution, and ``(II) such amount shall not be taken into account in determining whether paragraph (3)(B) applies to any other amount. ``(vi) Other special rules.--Rules similar to the rules of paragraph (8)(D) and section 402(l)(5)(A) shall apply.''. (f) Deferred Compensation Plans of State and Local Governments and Tax-exempt Organizations.--Subsection (a) of section 457 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: ``(4) Special rule for distributions for first-time home purchases.--To the extent provided in section 402(m), paragraph (1) shall not apply to the amount distributed under the contract which is otherwise includible in gross income under this subsection.''. (g) Conforming Amendments.-- (1) Subparagraph (F) of section 72(t)(2) of the Internal Revenue Code of 1986 is amended-- (A) by inserting ``, or to which section 402(m), 401(k)(2)(B)(i)(VIII), 403(a)(7), 403(b)(18), 408(d)(10), or 457(a)(4) applies'' before the period at the end of the first sentence, and (B) by striking ``under the preceding sentence'' and inserting ``as qualified first-time homebuyer distributions''. (2) Subparagraph (A) of section 72(t)(8) of such Code is amended by adding at the end the following: ``Such term does not include any payment or distribution to which section 402(m), 401(k)(2)(B)(i)(VIII), 403(a)(7), 403(b)(18), 408(d)(10), or 457(a)(4) applies.''. (h) Effective Date.--The amendments made by this section shall apply to payments and distributions received in taxable years beginning after the date of the enactment of this Act. ______