S.Amdt. 2448

SA 2448. Mr. MERKLEY submitted an amendment intended to be proposed
by him to the bill H.R. 1, to provide for reconciliation pursuant to
title II of H. Con. Res. 14; which was ordered to lie on the table; as
follows:

At the appropriate place, insert the following:

SEC. ____. HOMEOWNERSHIP PROVISIONS.

(a) Excise Tax on Acquisition of Single-family Residences
by Hedge Fund Taxpayers.--
(1) In general.--Subtitle D is amended by adding at the end
the following new chapter:

``CHAPTER 50B--SINGLE-FAMILY RESIDENCES

``Sec. 5000E. Newly acquired single-family residences.

``SEC. 5000E. NEWLY ACQUIRED SINGLE-FAMILY RESIDENCES.

``(a) In General.--There is hereby imposed the acquisition
of any newly acquired single-family residence by a hedge fund
taxpayer an amount equal to 15 percent of the purchase price
thereof.
``(b) Newly Acquired Single-family Residence.--For purposes
of this section--
``(1) In general.--The term `newly acquired single-family
residence' means any residential property which--
``(A) consists of 1-to-4 dwelling units, and
``(B) was acquired by the taxpayer in any taxable year
which begins after the date of the enactment of this chapter.
``(2) Exception.--A residential property shall not be
treated as a newly acquired single-family residence if,
immediately after acquisition and at all times thereafter,
such property is--

[[Page S3991]]

``(A) not rented or leased, and
``(B) used as the principal residence (within the meaning
of section 121) of any person who has an ownership interest
in the hedge fund taxpayer acquiring such taxpayer.
``(c) Hedge Fund Taxpayer.--For purposes of this chapter--
``(1) In general.--The term `hedge fund taxpayer' means,
with respect to any taxable year, any applicable entity
which--
``(A) manages funds pooled from investors,
``(B) has $50,000,000 or more in net value or assets under
management on any day during the taxable year, and
``(C) is a fiduciary with respect to such investors.
``(2) Applicable entity.--
``(A) In general.--The term `applicable entity' means--
``(i) any partnership,
``(ii) any corporation, or
``(iii) any real estate investment trust.
``(B) Exceptions.--The term `applicable entity' shall not
include--
``(i) an organization which is described in section
501(c)(3) and exempt from tax under section 501(a), or
``(ii) an organization which is primarily engaged in the
construction or rehabilitation of single-family residences
and which offers such residences for sale in the ordinary
course of business.
``(3) Aggregation rules.--
``(A) In general.--All persons which are treated as a
single employer under subsections (a) and (b) of section 52
shall be treated as a single person.
``(B) Modifications.--For purposes of this subsection--
``(i) section 52(a) shall be applied by substituting
`component members' for `members', and
``(ii) for purposes of applying section 52(b), the term
`trade or business' shall include any activity treated as a
trade or business under paragraph (5) or (6) of section
469(c) (determined without regard to the phrase `To the
extent provided in regulations' in such paragraph (6)).
``(C) Component member.--For purposes of this paragraph,
the term `component member' has the meaning given such term
by section 1563(b), except that the determination shall be
made without regard to section 1563(b)(2).
``(d) Other Definitions and Rules.--For purposes of this
section--
``(1) Purchase price.--The term `purchase price' means the
adjusted basis of the newly acquired single-family residence
on the date such residence is purchased.
``(2) Acquisition.--A hedge fund taxpayer shall be treated
as acquiring a single-family residence if the taxpayer
acquires a majority ownership interest in the single-family
residence, regardless of the percentage of that ownership
interest.''.
(2) Clerical amendment.--The table of chapters for subtitle
D is amended by adding at the end the following new item:

``Chapter 50B--Excess Single-family Residences''.

(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after the date of
enactment of this Act.
(b) Corporate Surtax on Hedge Fund Taxpayers.--
(1) In general.--Section 11 is amended by adding at the end
the following new subsection:
``(e) Hedge Fund Taxpayers.--In the case of a corporation
which is described in section 5000E(c), the percentage under
subsection (b) shall be increased by 5 percentage points.''.
(2) Effective date.--The amendment made by this subsection
shall apply to taxable years beginning after December 31,
2035.
(c) Disallowance of Certain Deductions Taken in Connection
With Single-family Residences of Hedge Fund Taxpayers.--
(1) Mortgage interest.--
(A) In general.--Section 163 is amended by redesignating
subsection (n) as subsection (o) and by inserting after
subsection (m) the following new subsection:
``(n) No Deduction for Interest on Acquisition Indebtedness
of Single-family Residences of Certain Taxpayers.--
``(1) In general.--In the case of a hedge fund taxpayer, no
deduction shall be allowed under this chapter with respect to
interest paid or accrued on acquisition indebtedness with
respect to any single family residence.
``(2) Definitions.--For purposes of this subsection--
``(A) Hedge fund taxpayer.--The term `hedge fund taxpayer'
means, for any taxable year, any taxpayer--
``(i) who is described in section 5000E(c), and
``(ii) who is in the trade or business of renting or
leasing single-family residences.
``(B) Acquisition indebtedness.--The term `acquisition
indebtedness' has the meaning given such term under
subsection (h)(3)(B), determined--
``(i) by substituting `single-family residence (as defined
in subsection (n))' for `qualified residence', and
``(ii) without regard to clause (ii) thereof.
``(C) Single-family residence.--The term `single-family
residence' means any residential property which consists of
1-to-4 dwelling units''.
(B) Effective date.--The amendments made by this paragraph
shall apply to taxable years beginning after December 31,
2030.
(2) Depreciation.--
(A) In general.--Section 167 is amended by redesignating
subsection (i) as subsection (j) and by inserting after
subsection (h) the following new subsection:
``(i) Deduction Disallowed for Single-family Residences of
Certain Taxpayers.--
``(1) In general.--In the case of a hedge fund taxpayer, no
deduction shall be allowed under this section for any single
family residence.
``(2) Definitions.--For purposes of this subsection--
``(A) Hedge fund taxpayer.--The term `hedge fund taxpayer'
means, for any taxable year, any taxpayer--
``(i) who is described in section 5000E(c), and
``(ii) who is in the trade or business of renting or
leasing single-family residences.
``(B) Single-family residence.--The term `single-family
residence' means any residential property which consists of
1-to-4 dwelling units.''.
(B) Effective date.--The amendments made by this paragraph
shall apply to taxable years beginning after December 31,
2030.
(3) Qualified business income.--
(A) In general.--Section 199A(d) is amended by striking
``or'' at the end of subparagraph (A), by striking the period
at the end of subparagraph (B) and inserting ``, or'', and by
adding at the end the following new subparagraph:
``(C) any trade or business of hedge fund taxpayer (as
defined in section 163(n)(2)(A)).''.
(B) Effective date.--The amendments made by this paragraph
shall apply to taxable years beginning after December 31,
2035.
______