[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1141 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1141

To amend the Internal Revenue Code of 1986 to treat distributions from 
    publicly traded partnerships as qualifying income of regulated 
             investment companies, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 29, 2001

Mr. Gramm (for himself, Mr. Nickles, Mrs. Hutchison, Mr. Murkowski, 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 treat distributions from 
    publicly traded partnerships as qualifying income of regulated 
             investment companies, and for other purposes.

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

SECTION 1. DISTRIBUTIONS FROM PUBLICLY TRADED PARTNERSHIPS TREATED AS 
              QUALIFYING INCOME OF REGULATED INVESTMENT COMPANIES.

    (a) In General.--Paragraph (2) of section 851(b) of the Internal 
Revenue Code of 1986 (defining regulated investment company) is amended 
by inserting ``distributions or other income derived from an interest 
in a publicly traded partnership (as defined in section 7704(b)),'' 
after ``dividends, interest,''.
    (b) Source Flow-Through Rule Not To Apply.--The last sentence of 
section 851(b) of such Code is amended by inserting ``(other than a 
publicly traded partnership (as defined in section 7704(b)))'' after 
``derived from a partnership''.

SEC. 2. SPECIAL PASSIVE ACTIVITY RULE FOR PUBLICLY TRADED PARTNERSHIPS 
              TO APPLY TO REGULATED INVESTMENT COMPANIES.

    Subsection (k) of section 469 of the Internal Revenue Code of 1986 
(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 publicly 
        traded partnership shall be treated as a taxpayer described in 
        subsection (a)(2) with respect to items attributable to such 
        interest.''

SEC. 3. EFFECTIVE DATE.

    The amendments made by this Act shall apply to taxable years 
beginning after the date of the enactment of this Act.
                                 <all>