[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1140 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 1140

    To amend the Internal Revenue Code of 1986 to permit financial 
  institutions to determine their interest expense deduction without 
 regard to tax-exempt bonds issued to provide certain small loans for 
                  health care or educational purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 8, 2005

  Mr. Nussle 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 financial 
  institutions to determine their interest expense deduction without 
 regard to tax-exempt bonds issued to provide certain small loans for 
                  health care or educational purposes.

    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 ``Health and Higher Education 
Facilities Improvement Act of 2005''.

SEC. 2. BANK DEDUCTIBILITY OF SMALL, TAX-EXEMPT DEBTS.

    (a) In General.--Section 265(b)(3) of the Internal Revenue Code of 
1986 (relating to exception for certain tax-exempt obligations) is 
amended by adding at the end the following:
                    ``(G) Election to apply limitation on amount of 
                obligations at borrower level.--
                            ``(i) In general.--An issuer, the proceeds 
                        of the obligations of which are to be used to 
                        make or finance eligible loans, may elect to 
                        apply subparagraphs (C) and (D) by treating 
                        each borrower as the issuer of a separate 
                        issue.
                            ``(ii) Eligible loan.--For purposes of this 
                        subparagraph--
                                    ``(I) In general.--The term 
                                `eligible loan' means one or more loans 
                                to a qualified borrower the proceeds of 
                                which are used by the borrower for 
                                health care or educational purposes and 
                                the outstanding balance of which in the 
                                aggregate does not exceed $10,000,000.
                                    ``(II) Qualified borrower.--The 
                                term `qualified borrower' means a 
                                borrower which is an organization 
                                described in section 501(c)(3) and 
                                exempt from taxation under section 
                                501(a).
                            ``(iii) Manner of election.--The election 
                        described in clause (i) may be made by an 
                        issuer for any calendar year at any time prior 
                        to its first issuance during such year of 
                        obligations the proceeds of which will be used 
                        to make or finance one or more eligible loans.
                            ``(iv) Modification of rule for composite 
                        issues.--In the case of an obligation which is 
                        issued by any issuer which has made the 
                        election described in clause (i), subparagraph 
                        (F) shall be applied without regard to clause 
                        (i) of such subparagraph.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2005.
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