[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 523 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                 S. 523

 To amend the Internal Revenue Code of 1986 to treat certain hospital 
   support organizations as qualified organizations for purposes of 
                           section 514(c)(9).


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 1999

 Mr. Inouye (for himself and Mr. Akaka) 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 treat certain hospital 
   support organizations as qualified organizations for purposes of 
                           section 514(c)(9).

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 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 is amended by striking ``or'' at the end 
of clause (ii), by striking the period at the end of clause (iii) and 
inserting ``; or'', and by adding at the end the following new clause:
                                    ``(iv) 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 indebtedness, a support organization (as 
                defined in section 509(a)(3)) which supports a hospital 
                described in section 170(b)(1)(A)(iii) 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 gift 
                                        or devise, and
                                            ``(II) consisted of real 
                                        property,
                                    ``(ii) the fair market value of the 
                                organization's unimproved real estate 
                                acquired, directly or indirectly, by 
                                gift or devise, exceeded 10 percent of 
                                the fair market value of all investment 
                                assets held by the organization 
                                immediately prior to the time that the 
                                indebtedness was incurred, and
                                    ``(iii) no member of the 
                                organization's governing body was a 
                                disqualified person (as defined in 
                                section 4946 but not including any 
                                foundation manager) at any time during 
                                the taxable year in which the 
                                indebtedness was incurred.
                In the case of any refinancing not in excess of the 
                indebtedness being refinanced, the determinations under 
                clauses (ii) and (iii) shall be made by reference to 
                the earliest date indebtedness meeting the requirements 
                of this subparagraph (and involved in the chain of 
                indebtedness being refinanced) was incurred.''
    (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.
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