[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 785 Introduced in Senate (IS)]
108th CONGRESS
1st Session
S. 785
To amend the Internal Revenue Code of 1986 to allow the payment of
dividends on the stock of cooperatives without reducing patronage
dividends.
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IN THE SENATE OF THE UNITED STATES
April 3, 2003
Mr. Baucus (for himself, Mr. Grassley, Mr. Daschle, Mr. Coleman, Mr.
Harkin, Mr. Craig, Mr. Johnson, Mr. Burns, Mr. Dorgan, Mr. Roberts, Mr.
Dayton, Mr. Fitzgerald, Mrs. Lincoln, Mr. Cochran, Mr. Hagel, Mr.
Conrad, and Mr. Hatch) introduced the following bill; which was read
twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to allow the payment of
dividends on the stock of cooperatives without reducing patronage
dividends.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. PAYMENT OF DIVIDENDS ON STOCK OF COOPERATIVES WITHOUT
REDUCING PATRONAGE DIVIDENDS.
(a) In General.--Subsection (a) of section 1388 of the Internal
Revenue Code of 1986 (relating to patronage dividend defined) is
amended by adding at the end the following new sentence: ``For purposes
of paragraph (3), net earnings shall not be reduced by amounts paid
during the year as dividends on capital stock or other proprietary
capital interests of the organization to the extent that the articles
of incorporation or bylaws of such organization or other contract with
patrons provide that such dividends are in addition to amounts
otherwise payable to patrons which are derived from business done with
or for patrons during the taxable year.''.
(b) Effective Date.--The amendment made by this section shall apply
to distributions in taxable years beginning after the date of the
enactment of this Act.
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