[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1671 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 1671

 To amend the Internal Revenue Code of 1986 to permit cooperatives to 
 pay dividends on preferred stock without reducing patronage dividends.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 8, 2003

  Mr. Herger (for himself, Mr. Pomeroy, Mr. English, Mr. Graves, Mr. 
 Hulshof, Mr. Ramstad, and Mr. McCrery) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to permit cooperatives to 
 pay dividends on preferred stock 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. SHORT TITLE.

    This Act may be cited as the ``Cooperative Dividend Equity Act of 
2003''.

SEC. 2. 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: ``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.
                                 <all>