S.Amdt. 2767
What it does: Adds SEC. __. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES on page 179, line 25
Sen. Jeff Bingaman (D-NM)What it changes
1 change to S. 1637
Adds SEC. __. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES on page 179, line 25
Adds a sectionPrinted pageInserted: SEC. __. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES.
Inserted: (a) In General.--Paragraph (2) of section 851(b) (defining regulated investment company) is amended to read as follows:
Inserted: "(2) at least 90 percent of its gross income is derived from--
Inserted: "(A) dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and
Inserted: "(B) distributions or other income derived from an interest in a qualified publicly traded partnership (as defined in subsection (h)); and"
Inserted: (b) Source Flow-Through Rule Not To Apply.--The last sentence of section 851(b) is amended by inserting "(other than a qualified publicly traded partnership as defined in subsection (h))" after "derived from a partnership".
Inserted: (c) Limitation on Ownership.--Subsection (c) of section 851 is amended by redesignating paragraph (5) as paragraph (6) and inserting after paragraph (4) the following new paragraph:
Inserted: "(5) The term 'outstanding voting securities of such issuer' shall include the equity securities of a qualified publicly traded partnership (as defined in subsection (h)).".
Inserted: (d) Definition of Qualified Publicly Traded Partnership.--Section 851 is amended by adding at the end the following new subsection:
Inserted: "(h) Qualified Publicly Traded Partnership.--For purposes of this section, the term 'qualified publicly traded partnership' means a publicly traded partnership described in section 7704(b) other than a partnership which would satisfy the gross income requirements of section 7704(c)(2) if qualifying income included only income described in subsection (b)(2)(A).".
Inserted: (e) Definition of Qualifying Income.--Section 7704(d)(4) is amended by striking "section 851(b)(2)" and inserting "section 851(b)(2)(A)".
Inserted: (f) Limitation on Composition of Assets.--Subparagraph (B) of section 851(b)(3) is amended to read as follows:
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Inserted: "(B) not more than 25 percent of the value of its total assets is invested in--
Inserted: "(i) the securities (other than Government securities or the securities of other regulated investment companies) of any one issuer,
Inserted: "(ii) the securities (other than the securities of other regulated investment companies) of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses or related trades or businesses, or
Inserted: "(iii) the securities of one or more qualified publicly traded partnerships (as defined in subsection (h)).".
Inserted: (g) Application of Special Passive Activity Rule to Regulated Investment Companies.--Subsection (k) of section 469 (relating to separate application of section in case of publicly traded partnerships) is amended by adding at the end the following new paragraph:
Inserted: "(4) Application to regulated investment companies.--For purposes of this section, a regulated investment company (as defined in section 851) holding an interest in a qualified publicly traded partnership (as defined in section 851(h)) shall be treated as a taxpayer described in subsection (a)(2) with respect to items attributable to such interest.".
Inserted: (h) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Original wording
On page 179, after line 25, insert the following:
Read automatically from the Congressional Record. Check the original before relying on it.
As printed
SA 2767. Mr. BINGAMAN (for himself and Mrs. Hutchison) submitted an amendment intended to be proposed by him to the bill S. 1637, to amend the Internal Revenue Code of 1986 to comply with the World Trade Organization rulings on the FSC/ETI benefit in a manner that preserves jobs and production activities in the United States, to reform and simplify the international taxation rules of the United States, and for other purposes; which was ordered to lie on the table; as follows:
On page 179, after line 25, insert the following:
SEC. __. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES.
(a) In General.--Paragraph (2) of section 851(b) (defining regulated investment company) is amended to read as follows:
“(2) at least 90 percent of its gross income is derived from--
“(A) dividends, interest, payments with respect to securities loans (as defined in section 512(a)(5)), and gains from the sale or other disposition of stock or securities (as defined in section 2(a)(36) of the Investment Company Act of 1940, as amended) or foreign currencies, or other income (including but not limited to gains from options, futures or forward contracts) derived with respect to its business of investing in such stock, securities, or currencies, and
“(B) distributions or other income derived from an interest in a qualified publicly traded partnership (as defined in subsection (h)); and”
(b) Source Flow-Through Rule Not To Apply.--The last sentence of section 851(b) is amended by inserting “(other than a qualified publicly traded partnership as defined in subsection (h))” after “derived from a partnership”.
(c) Limitation on Ownership.--Subsection (c) of section 851 is amended by redesignating paragraph (5) as paragraph (6) and inserting after paragraph (4) the following new paragraph:
“(5) The term ‘outstanding voting securities of such issuer' shall include the equity securities of a qualified publicly traded partnership (as defined in subsection (h)).”.
(d) Definition of Qualified Publicly Traded Partnership.--Section 851 is amended by adding at the end the following new subsection:
“(h) Qualified Publicly Traded Partnership.--For purposes of this section, the term ‘qualified publicly traded partnership' means a publicly traded partnership described in section 7704(b) other than a partnership which would satisfy the gross income requirements of section 7704(c)(2) if qualifying income included only income described in subsection (b)(2)(A).”.
(e) Definition of Qualifying Income.--Section 7704(d)(4) is amended by striking “section 851(b)(2)” and inserting “section 851(b)(2)(A)”.
(f) Limitation on Composition of Assets.--Subparagraph (B) of section 851(b)(3) is amended to read as follows:
“(B) not more than 25 percent of the value of its total assets is invested in--
“(i) the securities (other than Government securities or the securities of other regulated investment companies) of any one issuer,
“(ii) the securities (other than the securities of other regulated investment companies) of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses or related trades or businesses, or
“(iii) the securities of one or more qualified publicly traded partnerships (as defined in subsection (h)).”.
(g) Application of Special Passive Activity Rule to Regulated Investment Companies.--Subsection (k) of section 469 (relating to separate application of section in case of publicly traded partnerships) is amended by adding at the end the following new paragraph:
“(4) Application to regulated investment companies.--For purposes of this section, a regulated investment company (as defined in section 851) holding an interest in a qualified publicly traded partnership (as defined in section 851(h)) shall be treated as a taxpayer described in subsection (a)(2) with respect to items attributable to such interest.”.
(h) Effective Date.--The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.
Legislative Activity
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Senate amendment submitted
March 10, 2004