[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1263 Introduced in Senate (IS)]







108th CONGRESS
  1st Session
                                S. 1263

To amend the Internal Revenue Code of 1986 to exclude from gross income 
   interest received on loans secured by agricultural real property.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 13, 2003

   Mr. Hagel 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 exclude from gross income 
   interest received on loans secured by agricultural real property.

    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 ``Rural Economic Investment Act of 
2003''.

SEC. 2. EXCLUSION FOR INTEREST ON LOANS SECURED BY AGRICULTURAL REAL 
              PROPERTY.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by inserting after section 132 the 
following new section:

``SEC. 133. INTEREST ON LOANS SECURED BY AGRICULTURAL REAL PROPERTY.

    ``(a) Exclusion.--Gross income shall not include interest received 
by a qualified lender on any qualified real estate loan.
    ``(b) Definitions.--For purposes of this section--
            ``(1) Qualified lender.--The term `qualified lender' means 
        any bank or savings association the deposits of which are 
        insured under the Federal Deposit Insurance Act (12 U.S.C. 1811 
        et seq.).
            ``(2) Qualified real estate loan.--The term `qualified real 
        estate loan' means any loan secured by agricultural real estate 
        or by a leasehold mortgage (with a status as a lien) on 
        agricultural real estate.
            ``(3) Agricultural real estate.--The term `agricultural 
        real estate' means--
                    ``(A) real property used for the production of 1 or 
                more agricultural products, and
                    ``(B) any single family residence--
                            ``(i) which is the principal residence 
                        (within the meaning of section 121) of its 
                        occupant, and
                            ``(ii) which is located in a rural area (as 
                        determined by the Secretary of Agriculture) 
                        with a population (determined on the basis of 
                        the most recent decennial census for which data 
                        are available) of 2,500 or less.''.
    (b) Clerical Amendment.--The table of sections for such part III is 
amended by inserting after the item relating to section 132 the 
following new item:

        ``Sec. 133. Interest on loans secured by agricultural real 
                            property.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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