HR 6333 IH
110th CONGRESS
2d Session
H. R. 6333
To amend the Internal Revenue Code of 1986 to modify the limitations on the deduction of interest by financial institutions which hold tax-exempt bonds.
IN THE HOUSE OF REPRESENTATIVES
June 20, 2008
Mr. FRANK of Massachusetts (for himself, Mr. NEAL of Massachusetts, Mr. CAPUANO, Mr. KANJORSKI, and Mr. CLEAVER) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to modify the limitations on the deduction of interest by financial institutions which hold tax-exempt bonds.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
SEC. 2. MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-EXEMPT INTEREST EXPENSE ALLOCATION RULES FOR FINANCIAL INSTITUTIONS.
(a) Increase in Limitation- Subparagraphs (C)(i), (D)(i), and (D)(iii)(II) of section 265(b)(3) of the Internal Revenue Code of 1986 are each amended by striking ‘$10,000,000’ and inserting ‘$30,000,000’.
(b) Repeal of Aggregation Rules Applicable to Small Issuer Determination- Paragraph (3) of section 265(b) of such Code is amended by striking subparagraphs (E) and (F).
(c) Election to Apply Limitation at Borrower Level- Paragraph (3) of section 265(b) of such Code, as amended by subsection (b), is amended by adding at the end the following new subparagraph:
(d) Inflation Adjustment- Paragraph (3) of section 265(b) of such Code, as amended by subsections (b) and (c), is amended by adding at the end the following new subparagraph:
‘(F) INFLATION ADJUSTMENT- In the case of any calendar year after 2009, the $30,000,000 amounts contained in subparagraphs (C)(i), (D)(i), (D)(iii)(II), and (E)(ii)(I) shall each be increased by an amount equal to--
‘(i) such dollar amount, multiplied by
‘(ii) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting ‘calendar year 2008’ ‘for calendar year 1992’ in subparagraph (B) thereof.
Any increase determined under the preceding sentence shall be rounded to the nearest multiple of $100,000.’.
(e) Effective Date- The amendments made by this section shall apply to obligations issued after December 31, 2008.
SEC. 3. DE MINIMIS SAFE HARBOR EXCEPTION FOR TAX-EXEMPT INTEREST EXPENSE OF FINANCIAL INSTITUTIONS.
(a) In General- Subsection (b) of section 265 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
‘(7) DE MINIMIS EXCEPTION- Paragraph (1) shall not apply to any financial institution if the portion of the taxpayer’s holdings of tax-exempt securities is less than 2 percent of the taxpayer’s assets.’.
(b) Effective Date- The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
U.S. Congress - Text of H.R.6333 as Introduced in House Municipal Bond Market Support Act of 2008
