S. 59 – Reading Mode | Legislate.dev

112th CONGRESS

1st Session

S. 59

IN THE SENATE OF THE UNITED STATES

January 25 (legislative day, January 5), 2011

Mr. Inouye introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To treat certain hospital support organizations as qualified organizations for purposes of determining acquisition indebtedness.

Treatment of certain hospital support organizations as qualified organizations for purposes of determining acquisition indebtedness

(a)

In general

Subparagraph (C) of section 514(c)(9) of the Internal Revenue Code of 1986 (relating to real property acquired by a qualified organization) is amended by striking or at the end of clause (iii), by striking the period at the end of clause (iv) and inserting ; or, and by adding at the end the following new clause:

(v)

a qualified hospital support organization (as defined in subparagraph (I)).

(b)

Qualified hospital support organizations

Paragraph (9) of section 514(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(I)

Qualified hospital support organizations

For purposes of subparagraph (C)(iv), the term qualified hospital support organization means, with respect to any eligible indebtedness (including any qualified refinancing of such eligible indebtedness), a support organization (as defined in section 509(a)(3)) which supports a hospital described in section 119(d)(4)(B) and with respect to which—

(i)

more than half of its assets (by value) at any time since its organization—

(I)

were acquired, directly or indirectly, by testamentary gift or devise, and

(II)

consisted of real property, and

(ii)

the fair market value of the organization’s real estate acquired, directly or indirectly, by gift or devise, exceeded 25 percent of the fair market value of all investment assets held by the organization immediately prior to the time that the eligible indebtedness was incurred.

For purposes of this subparagraph, the term eligible indebtedness means indebtedness secured by real property acquired by the organization, directly or indirectly, by gift or devise, the proceeds of which are used exclusively to acquire any leasehold interest in such real property or for improvements on, or repairs to, such real property. A determination under clauses (i) and (ii) of this subparagraph shall be made each time such an eligible indebtedness (or the qualified refinancing of such an eligible indebtedness) is incurred. For purposes of this subparagraph, a refinancing of such an eligible indebtedness shall be considered qualified if such refinancing does not exceed the amount of the refinanced eligible indebtedness immediately before the refinancing.

(c)

Effective date

The amendments made by this section shall apply to indebtedness incurred on or after the date of the enactment of this Act.