article: SECTION 1. SHORT TITLE; CONSTITUTIONAL AUTHORITY. (a) Short Title.--This Act may be cited as the ``Homeowner Empowerment Act of 2008''. (b) Constitutional Authority To Enact This Legislation.--The constitutional authority upon which this Act rests is the power of Congress to lay and collect taxes, set forth in article I, section 8 of the United States Constitution. SEC. 2. EXCLUSION FROM GROSS INCOME OF CERTAIN DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS USED FOR MORTGAGE PAYMENTS. (a) In General.--Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139A the following new section: ``SEC. 139B. CERTAIN DISTRIBUTIONS FROM QUALIFIED RETIREMENT PLANS USED FOR MORTGAGE PAYMENTS. ``(a) In General.--Gross income shall not include a qualified mortgage distribution. ``(b) Limitation.--Subsection (a) shall not apply to any distribution made in any month to the extent that such distribution (when added to all other distributions made in such month which are taken into account under subsection (a) with respect to any individual) exceeds $5,000. ``(c) Qualified Mortgage Distribution.--For purposes of this section-- ``(1) In general.--The term `qualified mortgage distribution' means any distribution which is made before January 1, 2010, from an individual retirement plan, or from amounts attributable to employer contributions made pursuant to elective deferrals described in subparagraph (A) or (C) of section 402(g)(3) or section 501(c)(18)(D)(iii), directly by the trustee of the plan to a mortgagee with respect to a qualified mortgage of any individual. Such term shall not include any distribution to the extent that such distribution exceeds the required minimum payment due under the terms of the mortgage. ``(2) Qualified mortgage.--The term `qualified mortgage' means any mortgage which is-- ``(A) secured by the principal residence (within the meaning of section 121) of the mortgagor, and ``(B) originated before January 1, 2008. ``(d) Requirement To Repay Distributions.--For purposes of this section-- ``(1) In general.--The term `qualified mortgage distribution' shall not include any distribution except to the extent that one or more contributions to an individual retirement plan of the taxpayer in an aggregate amount equal to such distribution are made during the 12-year period beginning on the date of such distribution. ``(2) Treatment of recontributions.--In the case of any contribution to an individual retirement plan taken into account under paragraph (1)-- ``(A) the dollar limitations otherwise applicable to contributions to individual retirement plans shall not apply to such contribution, and ``(B) no deduction shall be allowed for such contribution. ``(3) Failure to repay.--In the case of a failure to make the aggregate amount of contributions described in paragraph (1) during the 12-year period described therein with respect to any distribution which would (but for paragraph (1)) be a qualified mortgage distribution, such distribution shall be includible in the gross income of the taxpayer for the taxable year in which such 12-year period ends in lieu of the taxable year in which the distribution was made.''. (b) Waiver of 10 Percent Early Withdrawal Penalty Without Regard to Repayment Requirement.--Paragraph (2) of section 72(t) is amended by adding at the end the following new subparagraph: ``(H) Qualified mortgage distributions.--Any qualified mortgage distribution (as defined in section 139B, but without regard to subsection (d) thereof).''. (c) Conforming Amendments.-- (1) Section 401(k)(2)(B)(i) of such Code is amended by striking ``or'' at the end of subclause (IV), by striking ``and'' at the end of subclause (V) and inserting ``or'', and by inserting after subclause (V) the following new subclause: ``(VI) in the case of a distribution to which section 139B(a) applies, the date on which such distribution is made, and''. (2) Section 403(b)(7)(A)(ii) of such Code is amended by inserting ``or 139B(a)'' after ``section 72(t)(2)(G)''. (3) Section 403(b)(11) of such Code is amended by striking ``or'' at the end of subparagraph (B), by striking the period at the end of subparagraph (C) and inserting ``, or'', and by inserting after subparagraph (C) the following new subparagraph: ``(D) for distributions to which section 139B(a) applies.''. (d) Effective Date.--The amendments made by this section shall apply to distributions made after the date of the enactment of this Act.
summary: Homeowner Empowerment Act of 2008 - Amends the Internal Revenue Code to: (1) exclude from gross income distributions from individual retirement plans and other qualified retirement plans for payments on the mortgage of a taxpayer's principal residence; (2) require repayments of amounts distributed from such retirement plans over a 12-year period; and (3) waive the 10% penalty on premature distributions from retirement plans for distributions used to pay a mortgage.