II
112th CONGRESS
1st Session
S. 1016
IN THE SENATE OF THE UNITED STATES
May 17, 2011
Mr. Bingaman (for himself, Mr. Crapo, Mr. Kerry, Ms. Snowe, Mr. Cardin, and Mr. Grassley) 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 permanently modify the limitations on the deduction of interest by financial institutions which hold tax-exempt bonds, and for other purposes.
Short title
This Act may be cited as the
Municipal Bond Market Support Act of
2011
.
Permanent modification of small issuer exception to tax-exempt interest expense allocation rules for financial institutions
Permanent 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
.
Permanent modification of other special rules
Paragraph (3) of section 265(b) of the Internal Revenue Code of 1986 is amended—
by redesignating clauses (iv), (v), and (vi) of subparagraph (G) as clauses (ii), (iii), and (iv) of such subparagraph, respectively, and
by striking so much of subparagraph (G) as precedes such clauses and inserting the following:
Qualified 501(c)(3) bonds treated as issued by exempt organization
In the case of a qualified 501(c)(3) bond (as defined in section 145), this paragraph shall be applied by treating the 501(c)(3) organization for whose benefit such bond was issued as the issuer.
Special rule for qualified financings
In general
In the case of a qualified financing issue—
subparagraph (F) shall not apply, and
any obligation issued as a part of such issue shall be treated as a qualified tax-exempt obligation if the requirements of this paragraph are met with respect to each qualified portion of the issue (determined by treating each qualified portion as a separate issue which is issued by the qualified borrower with respect to which such portion relates).
.
Inflation adjustment
Paragraph (3) of section 265(b) of the Internal Revenue Code of 1986, as amended by subsection (b), is amended by adding at the end the following new subparagraph:
Inflation adjustment
In the case of any calendar year after 2011, the $30,000,000 amounts contained in subparagraphs (C)(i), (D)(i), and (D)(iii)(II) shall each be increased by an amount equal to—
such dollar amount, multiplied by
the
cost-of-living adjustment determined under section 1(f)(3) for such calendar
year, determined by substituting calendar year 2010
for
calendar year 1992
in subparagraph (B) thereof.
.
Effective date
The amendments made by this section shall apply to obligations issued after the date of the enactment of this Act.