To amend the Internal Revenue Code of 1986 to allow a deduction for ground rent paid on land on which a qualified residence of a taxpayer is located and which is allotted or Indian-owned land.

March 25, 2003

Mr. HAYWORTH (for himself, Mr. BECERRA, Mrs. BONO, and Mr. KILDEE) introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to allow a deduction for ground rent paid on land on which a qualified residence of a taxpayer is located and which is allotted or Indian-owned land.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. DEDUCTION FOR GROUND RENT ON INDIAN-OWNED LAND, ETC., ON WHICH A QUALIFIED RESIDENCE OF A TAXPAYER IS LOCATED.

(a) IN GENERAL- Paragraph (3) of section 163(h) of the Internal Revenue Code of 1986 (defining qualified residence interest) is amended by adding at the end the following new subparagraph:

`(E) GROUND RENT ON INDIAN-OWNED LANDS, ETC-

`(i) IN GENERAL- Ground rent paid by a taxpayer during the taxable year on any lease of Indian lands shall be treated as qualified residence interest paid by the taxpayer if a qualified residence of the taxpayer is located on such lands.

`(ii) INDIAN LANDS- For purposes of clause (i), the term `Indian lands' means--

`(I) any land within the limits of an Indian reservation, pueblo, or rancheria,

`(II) any land not within the limits of an Indian reservation, pueblo, or rancheria whose title is held in trust by the United States for the benefit of an Indian tribe or one or more Indians (as an allotment or otherwise) or whose title is held by an Indian tribe or an Indian subject to restriction by the United States against alienation, and

`(III) any land within a dependent Indian community.

For purposes of the preceding sentence, the term `Indian tribe' means any Indian tribe, band, nation, or other organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.'

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

END