<enum>I</enum><header>Targeted Regulatory Relief for Community Banks</header> <section id="HF6FEE0B38E094716BBAAC35E8D8C71"><enum>101.</enum><header>Increase exemption levels under the Home Mortgage Disclosure Act of 1975</header> <subsection id="H9D490393323E44EC9686A416378F63CE"><enum>(a)</enum><header>Depository institution and mortgage lender disclosure exemptions</header><text display-inline="yes-display-inline">Section 304(i) of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2803">12 U.S.C. 2803(i)</external-xref>) is amended by striking <quote>$30,000,000</quote> and inserting <quote>$250,000,000</quote>.</text></subsection> <subsection id="H2E3F41A4B496475100719E2D2C925F2C"><enum>(b)</enum><header>Depository institution exemptions from act</header><text display-inline="yes-display-inline">Section 309 of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2808">12 U.S.C. 2808(a)</external-xref>) is amended—</text> <paragraph id="H95BEFBFAA7304B388D2D80EF58871E73"><enum>(1)</enum><text>in subsection (a), by striking <quote>$10,000,000</quote> and inserting <quote>$250,000,000</quote>; and</text></paragraph> <paragraph id="H3D592A1DD567442F95FAEA667F4692F4"><enum>(2)</enum><text>in subsection (b), by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="H651DEBD273E6483FBEC7E5B4E4976687" display-inline="no-display-inline"> <paragraph id="HCADDDD5AE38F401DA186F5C8D392685E"><enum>(4)</enum><header>Indexing of depository institution disclosure exemption amount</header><text display-inline="yes-display-inline">By December 31 of each year beginning after the date of the enactment of the Community Banks Serving Their Communities First Act, the amount applicable under section 304(i) with respect to institutions described in section 303(2) shall be adjusted in accordance with the procedure described in paragraphs (1) and (3) and the adjusted amount shall apply during the subsequent year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> </section> <section id="HA22065AD47B44D56B5205B935B8B6495"><enum>102.</enum><header>Short form reports of condition for certain community banks</header><text display-inline="no-display-inline">Section 7(a) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1817">12 U.S.C. 1817(a)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="HE536A4FC1B5D4E6FAFE315D4D7572B00" display-inline="no-display-inline"> <paragraph id="H5EA9D0FC67C1426B9F3537A81E30422"><enum>(11)</enum><header>Short form reports of condition for community banks</header><text>An insured depository institution described in subparagraphs (A), (B), (C), and (D) of section 10(d)(4) may submit a short form report of condition under paragraph (3) in 2 nonsequential quarters of any calendar year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HD9F0B2C6E9FC4916B6262FE73D93DAC5"><enum>103.</enum><header>Community bank exemption from annual management assessment of internal controls requirement of the Sarbanes-Oxley Act of 2002</header><text display-inline="no-display-inline">Section 404 of the Sarbanes-Oxley Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/7262">15 U.S.C. 7262</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="H549A1A08E62546AEB6AB61A304F6077B" display-inline="no-display-inline"> <subsection id="H43184B7E471746EC0079A2EEB547B5C8"><enum>(c)</enum><header>Community bank exemption</header> <paragraph id="H3B640311005C403100EF4617F1ABF48"><enum>(1)</enum><header>In general</header><text>This section shall not apply in any year to any insured depository institution which, as of the close of the preceding year, had total assets, as determined on a consolidated basis, of $1,000,000,000 or less.</text></paragraph> <paragraph id="H84EFD724AD5642E1A6FD17705156CB9F"><enum>(2)</enum><header>Adjustment of amount</header><text>The Commission shall annually adjust the dollar amount in paragraph (1) by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H68168E7D151C4BE6A77600B6ABD8D8D0"><enum>104.</enum><header>Changes required to small bank holding company policy statement on assessment of financial and managerial factors</header> <subsection id="HC40A2C8C04C1408D9E78CB9D6FF24212"><enum>(a)</enum><header>Small bank holding company policy statement on assessment of financial and managerial factors</header> <paragraph id="H6D7A1DC19A894DB300EA80EE6D10803"><enum>(1)</enum><header>In general</header><text>Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) that provide that the policy shall apply to a bank holding company which has pro forma consolidated assets of less than $1,000,000,000 and that—</text> <subparagraph id="HC128F40CA69F49BCBE844B96AD75341F"><enum>(A)</enum><text>is not engaged in any nonbanking activities involving significant leverage; and</text></subparagraph> <subparagraph id="H877622F4506C4F6090116579DBB241B5"><enum>(B)</enum><text display-inline="yes-display-inline">does not have a significant amount of outstanding debt that is held by the general public.</text></subparagraph></paragraph> <paragraph id="H16E8362CFA0A43159D67B015003E5614"><enum>(2)</enum><header>Adjustment of amount</header><text display-inline="yes-display-inline">The Board of Governors of the Federal Reserve System shall annually adjust the dollar amount referred to in paragraph (1) in the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors by an amount equal to the percentage increase, for the most recent year, in total assets held by all bank holding companies, on a consolidated basis, as determined by the Board.</text></paragraph></subsection> <subsection id="H034EE1AB2F2F4109B2AB0034DD90F499"><enum>(b)</enum><header>Increase in debt-to-equity ratio of small bank holding company</header><text display-inline="yes-display-inline">Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) such that the debt-to-equity ratio allowable for a small bank holding company in order to remain eligible to pay a corporate dividend and to remain eligible for expedited processing procedures under Regulation Y of the Board of Governors of the Federal Reserve System would increase from 1:1 to 3:1.</text></subsection> </section> <section id="H77378776C28C4300BA8CC3184D00FFE9" display-inline="no-display-inline" section-type="subsequent-section"><enum>105.</enum><header>Increase in size of a small depository institution exception under the Depository Institution Management Interlocks Act</header><text display-inline="no-display-inline">Section 203(1) of the Depository Institution Management Interlocks Act (<external-xref legal-doc="usc" parsable-cite="usc/12/3202">12 U.S.C. 3202(1)</external-xref>) is amended by striking <quote>$20,000,000</quote> and inserting <quote>$500,000,000</quote>.</text></section> <section id="H5B2C732B03E340BFBDE178B181C03766"><enum>106.</enum><header>Community bank protection under the Securities Investor Protection Act of 1970</header><text display-inline="no-display-inline">Section 9 of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78fff-3">15 U.S.C. 78fff–3</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="H44D69E8E829F46F1ACF73794B779E418" display-inline="no-display-inline"> <subsection id="H10B12EA161C1456F877E0077BB9E2372"><enum>(d)</enum><header>Community bank protection</header> <paragraph id="H14FCB20455A4471E9DCB588D1B613F8B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The prohibition on advances in subsection (a)(5) of this section shall not apply to a bank with total assets, on a consolidated basis, of less than $1,000,000,000.</text></paragraph> <paragraph id="H9A903261EB1541BD89F69408013228D0"><enum>(2)</enum><header>Adjustment of amount</header><text display-inline="yes-display-inline">The Commission shall annually adjust the dollar amount in paragraph (1) by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H34B56F3A0D944BD89465CA7D209D3945"><enum>107.</enum><header>Flexible examination schedule for community banks</header> <subsection id="H2F1D7ABF4A244B23A6ED5F46C00AF1"><enum>(a)</enum><header>In general</header><text>Paragraph (4) of section 10(d) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1820">12 U.S.C. 1820(d)</external-xref>) is amended—</text> <paragraph id="HB0AE121C00224A88825F43347FB4AEC6"><enum>(1)</enum><text>by striking the matter preceding subparagraph (A) and inserting <quote>In lieu of the 12-month period referred to in paragraphs (1), (2), and (3), the examination required under paragraph (1) of an insured depository institution may be conducted at such intervals as the appropriate Federal banking agency may determine to be appropriate, on the basis of factors the Financial Institutions Examination Council shall establish, if—</quote>; and</text></paragraph> <paragraph id="H407FA4BFE89D4FCC928E5D44C4D6D520"><enum>(2)</enum><text>in subparagraph (A), by striking <quote>$250,000,000</quote> and inserting <quote>$1,000,000,000</quote>. </text></paragraph></subsection> <subsection id="H8B301E878BF344BC8C092E1D23348E65"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The heading for paragraph (4) of section 10(d) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1820">12 U.S.C. 1820(d)</external-xref>) is amended by striking <quote><header-in-text level="subparagraph" style="OLC">18-month rule</header-in-text></quote> and inserting <quote><header-in-text level="subparagraph" style="OLC">Flexible on-site examination schedule</header-in-text></quote>.</text></subsection></section> <section id="H7F72F114110F430B866E5395A7EA378C"><enum>108.</enum><header>Increase in amount of small bank exception for cap on aggregate loans to executive officers</header><text display-inline="no-display-inline">Subparagraph (C) of section 22(h)(5) of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/375b">12 U.S.C. 375b(5)(C)</external-xref>) is amended—</text> <paragraph id="H2BBBDF771ED64FC78900A700F6FF2B9"><enum>(1)</enum><text>by striking <quote>$100,000,000 of deposits</quote> and inserting <quote>$1,000,000,000 of total assets (on a consolidated basis)</quote>; and</text></paragraph> <paragraph id="HE01D06FDCDFF4E92B11FC8310728CE4B"><enum>(2)</enum><text>by adding at the end the following new sentence: <quote>The Board shall annually adjust the dollar amount in the 1st sentence of this subparagraph by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</quote>.</text></paragraph></section> <section id="HE300DE335D7D4599999D3B044DBCB899"><enum>109.</enum><header>Consideration of community bank impact</header><text display-inline="no-display-inline">Before establishing or making any revision in any regulation, requirement, or guideline applicable to insured depository institutions (as defined in section 3 of the Federal Deposit Insurance Act), the appropriate Federal banking agency (as defined in such section) shall take into account the effect of the establishment of the regulation, requirement, or guideline on community banks and savings associations.</text></section> <section id="H9C095A167CF541FE00960729001F00A0"><enum>110.</enum><header>Increase in CRA exam intervals for community banks</header><text display-inline="no-display-inline">Section 809(a) of the Community Reinvestment Act of 1977 (<external-xref legal-doc="usc" parsable-cite="usc/12/2908">12 U.S.C. 2908(a)</external-xref>) is amended by striking <quote>$250,000,000</quote> and inserting <quote>$1,000,000,000</quote>. </text></section>

109 HR 2061 IH: Community Banks Serving Their Communities First Act U.S. House of Representatives 2005-05-03 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

Short title

This Act may be cited as the

Community Banks Serving Their Communities First Act

or the

Communities First Act

<enum>I</enum><header>Targeted Regulatory Relief for Community Banks</header> <section id="HF6FEE0B38E094716BBAAC35E8D8C71"><enum>101.</enum><header>Increase exemption levels under the Home Mortgage Disclosure Act of 1975</header> <subsection id="H9D490393323E44EC9686A416378F63CE"><enum>(a)</enum><header>Depository institution and mortgage lender disclosure exemptions</header><text display-inline="yes-display-inline">Section 304(i) of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2803">12 U.S.C. 2803(i)</external-xref>) is amended by striking <quote>$30,000,000</quote> and inserting <quote>$250,000,000</quote>.</text></subsection> <subsection id="H2E3F41A4B496475100719E2D2C925F2C"><enum>(b)</enum><header>Depository institution exemptions from act</header><text display-inline="yes-display-inline">Section 309 of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2808">12 U.S.C. 2808(a)</external-xref>) is amended—</text> <paragraph id="H95BEFBFAA7304B388D2D80EF58871E73"><enum>(1)</enum><text>in subsection (a), by striking <quote>$10,000,000</quote> and inserting <quote>$250,000,000</quote>; and</text></paragraph> <paragraph id="H3D592A1DD567442F95FAEA667F4692F4"><enum>(2)</enum><text>in subsection (b), by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="H651DEBD273E6483FBEC7E5B4E4976687" display-inline="no-display-inline"> <paragraph id="HCADDDD5AE38F401DA186F5C8D392685E"><enum>(4)</enum><header>Indexing of depository institution disclosure exemption amount</header><text display-inline="yes-display-inline">By December 31 of each year beginning after the date of the enactment of the Community Banks Serving Their Communities First Act, the amount applicable under section 304(i) with respect to institutions described in section 303(2) shall be adjusted in accordance with the procedure described in paragraphs (1) and (3) and the adjusted amount shall apply during the subsequent year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> </section> <section id="HA22065AD47B44D56B5205B935B8B6495"><enum>102.</enum><header>Short form reports of condition for certain community banks</header><text display-inline="no-display-inline">Section 7(a) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1817">12 U.S.C. 1817(a)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="HE536A4FC1B5D4E6FAFE315D4D7572B00" display-inline="no-display-inline"> <paragraph id="H5EA9D0FC67C1426B9F3537A81E30422"><enum>(11)</enum><header>Short form reports of condition for community banks</header><text>An insured depository institution described in subparagraphs (A), (B), (C), and (D) of section 10(d)(4) may submit a short form report of condition under paragraph (3) in 2 nonsequential quarters of any calendar year.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HD9F0B2C6E9FC4916B6262FE73D93DAC5"><enum>103.</enum><header>Community bank exemption from annual management assessment of internal controls requirement of the Sarbanes-Oxley Act of 2002</header><text display-inline="no-display-inline">Section 404 of the Sarbanes-Oxley Act of 2002 (<external-xref legal-doc="usc" parsable-cite="usc/15/7262">15 U.S.C. 7262</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="H549A1A08E62546AEB6AB61A304F6077B" display-inline="no-display-inline"> <subsection id="H43184B7E471746EC0079A2EEB547B5C8"><enum>(c)</enum><header>Community bank exemption</header> <paragraph id="H3B640311005C403100EF4617F1ABF48"><enum>(1)</enum><header>In general</header><text>This section shall not apply in any year to any insured depository institution which, as of the close of the preceding year, had total assets, as determined on a consolidated basis, of $1,000,000,000 or less.</text></paragraph> <paragraph id="H84EFD724AD5642E1A6FD17705156CB9F"><enum>(2)</enum><header>Adjustment of amount</header><text>The Commission shall annually adjust the dollar amount in paragraph (1) by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H68168E7D151C4BE6A77600B6ABD8D8D0"><enum>104.</enum><header>Changes required to small bank holding company policy statement on assessment of financial and managerial factors</header> <subsection id="HC40A2C8C04C1408D9E78CB9D6FF24212"><enum>(a)</enum><header>Small bank holding company policy statement on assessment of financial and managerial factors</header> <paragraph id="H6D7A1DC19A894DB300EA80EE6D10803"><enum>(1)</enum><header>In general</header><text>Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) that provide that the policy shall apply to a bank holding company which has pro forma consolidated assets of less than $1,000,000,000 and that—</text> <subparagraph id="HC128F40CA69F49BCBE844B96AD75341F"><enum>(A)</enum><text>is not engaged in any nonbanking activities involving significant leverage; and</text></subparagraph> <subparagraph id="H877622F4506C4F6090116579DBB241B5"><enum>(B)</enum><text display-inline="yes-display-inline">does not have a significant amount of outstanding debt that is held by the general public.</text></subparagraph></paragraph> <paragraph id="H16E8362CFA0A43159D67B015003E5614"><enum>(2)</enum><header>Adjustment of amount</header><text display-inline="yes-display-inline">The Board of Governors of the Federal Reserve System shall annually adjust the dollar amount referred to in paragraph (1) in the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors by an amount equal to the percentage increase, for the most recent year, in total assets held by all bank holding companies, on a consolidated basis, as determined by the Board.</text></paragraph></subsection> <subsection id="H034EE1AB2F2F4109B2AB0034DD90F499"><enum>(b)</enum><header>Increase in debt-to-equity ratio of small bank holding company</header><text display-inline="yes-display-inline">Before the end of the 6-month period beginning on the date of the enactment of this Act, the Board of Governors of the Federal Reserve System shall publish in the Federal Register proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors (12 C.F.R. part 225—appendix C) such that the debt-to-equity ratio allowable for a small bank holding company in order to remain eligible to pay a corporate dividend and to remain eligible for expedited processing procedures under Regulation Y of the Board of Governors of the Federal Reserve System would increase from 1:1 to 3:1.</text></subsection> </section> <section id="H77378776C28C4300BA8CC3184D00FFE9" display-inline="no-display-inline" section-type="subsequent-section"><enum>105.</enum><header>Increase in size of a small depository institution exception under the Depository Institution Management Interlocks Act</header><text display-inline="no-display-inline">Section 203(1) of the Depository Institution Management Interlocks Act (<external-xref legal-doc="usc" parsable-cite="usc/12/3202">12 U.S.C. 3202(1)</external-xref>) is amended by striking <quote>$20,000,000</quote> and inserting <quote>$500,000,000</quote>.</text></section> <section id="H5B2C732B03E340BFBDE178B181C03766"><enum>106.</enum><header>Community bank protection under the Securities Investor Protection Act of 1970</header><text display-inline="no-display-inline">Section 9 of the Securities Investor Protection Act of 1970 (<external-xref legal-doc="usc" parsable-cite="usc/15/78fff-3">15 U.S.C. 78fff–3</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="H44D69E8E829F46F1ACF73794B779E418" display-inline="no-display-inline"> <subsection id="H10B12EA161C1456F877E0077BB9E2372"><enum>(d)</enum><header>Community bank protection</header> <paragraph id="H14FCB20455A4471E9DCB588D1B613F8B"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The prohibition on advances in subsection (a)(5) of this section shall not apply to a bank with total assets, on a consolidated basis, of less than $1,000,000,000.</text></paragraph> <paragraph id="H9A903261EB1541BD89F69408013228D0"><enum>(2)</enum><header>Adjustment of amount</header><text display-inline="yes-display-inline">The Commission shall annually adjust the dollar amount in paragraph (1) by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H34B56F3A0D944BD89465CA7D209D3945"><enum>107.</enum><header>Flexible examination schedule for community banks</header> <subsection id="H2F1D7ABF4A244B23A6ED5F46C00AF1"><enum>(a)</enum><header>In general</header><text>Paragraph (4) of section 10(d) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1820">12 U.S.C. 1820(d)</external-xref>) is amended—</text> <paragraph id="HB0AE121C00224A88825F43347FB4AEC6"><enum>(1)</enum><text>by striking the matter preceding subparagraph (A) and inserting <quote>In lieu of the 12-month period referred to in paragraphs (1), (2), and (3), the examination required under paragraph (1) of an insured depository institution may be conducted at such intervals as the appropriate Federal banking agency may determine to be appropriate, on the basis of factors the Financial Institutions Examination Council shall establish, if—</quote>; and</text></paragraph> <paragraph id="H407FA4BFE89D4FCC928E5D44C4D6D520"><enum>(2)</enum><text>in subparagraph (A), by striking <quote>$250,000,000</quote> and inserting <quote>$1,000,000,000</quote>. </text></paragraph></subsection> <subsection id="H8B301E878BF344BC8C092E1D23348E65"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The heading for paragraph (4) of section 10(d) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1820">12 U.S.C. 1820(d)</external-xref>) is amended by striking <quote><header-in-text level="subparagraph" style="OLC">18-month rule</header-in-text></quote> and inserting <quote><header-in-text level="subparagraph" style="OLC">Flexible on-site examination schedule</header-in-text></quote>.</text></subsection></section> <section id="H7F72F114110F430B866E5395A7EA378C"><enum>108.</enum><header>Increase in amount of small bank exception for cap on aggregate loans to executive officers</header><text display-inline="no-display-inline">Subparagraph (C) of section 22(h)(5) of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/375b">12 U.S.C. 375b(5)(C)</external-xref>) is amended—</text> <paragraph id="H2BBBDF771ED64FC78900A700F6FF2B9"><enum>(1)</enum><text>by striking <quote>$100,000,000 of deposits</quote> and inserting <quote>$1,000,000,000 of total assets (on a consolidated basis)</quote>; and</text></paragraph> <paragraph id="HE01D06FDCDFF4E92B11FC8310728CE4B"><enum>(2)</enum><text>by adding at the end the following new sentence: <quote>The Board shall annually adjust the dollar amount in the 1st sentence of this subparagraph by an amount equal to the percentage increase, for the most recent year, in total assets held by all depository institutions, as reported by the Federal Deposit Insurance Corporation.</quote>.</text></paragraph></section> <section id="HE300DE335D7D4599999D3B044DBCB899"><enum>109.</enum><header>Consideration of community bank impact</header><text display-inline="no-display-inline">Before establishing or making any revision in any regulation, requirement, or guideline applicable to insured depository institutions (as defined in section 3 of the Federal Deposit Insurance Act), the appropriate Federal banking agency (as defined in such section) shall take into account the effect of the establishment of the regulation, requirement, or guideline on community banks and savings associations.</text></section> <section id="H9C095A167CF541FE00960729001F00A0"><enum>110.</enum><header>Increase in CRA exam intervals for community banks</header><text display-inline="no-display-inline">Section 809(a) of the Community Reinvestment Act of 1977 (<external-xref legal-doc="usc" parsable-cite="usc/12/2908">12 U.S.C. 2908(a)</external-xref>) is amended by striking <quote>$250,000,000</quote> and inserting <quote>$1,000,000,000</quote>. </text></section> <enum>II</enum><header>Additional Regulatory Relief for Community Banks and their Customers</header> <section id="H07EFCB3A670A42FD8221DF62DEA69F8F"><enum>201.</enum><header>Provisions relating to 3-day right of rescission under the Truth in Lending Act</header> <subsection id="H0B33F5CBE7B948C2A5C000B373C303D9"><enum>(a)</enum><header>Optional consumer waivers of right of rescission</header><text>Section 125(d) of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1635">15 U.S.C. 1635(d)</external-xref>) is amended—</text> <paragraph id="H8F01A76E352B4117A3553BCA3C3BA0C5"><enum>(1)</enum><text>by striking <quote>The Board may</quote> and inserting </text> <quoted-block style="OLC" id="H0E9F060202D74189B8FF68CB7F4C4395" display-inline="yes-display-inline"><text display-inline="yes-display-inline"><header-in-text level="subsection" style="OLC">Waivers of rescission rights.—</header-in-text></text> <paragraph id="HB699740220794175AEC4BFCC7B9C58C7"><enum>(1)</enum><header>Personal financial emergencies</header><text>The board may</text></paragraph><after-quoted-block>; and</after-quoted-block></quoted-block></paragraph> <paragraph id="HB5C4772554144BABB73315F61FCE5200"><enum>(2) </enum><text>by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="HA44AF0B9AAEF4079B0D2001FE47C3853" display-inline="no-display-inline"> <paragraph id="H4C7D8C5C2B8C465EADA0BDF5D29C033D"><enum>(2)</enum><header>Waivers when creditor is insured depository institution</header><text display-inline="yes-display-inline">The Board shall prescribe regulations authorizing a consumer to waive the rights provided under this section when the creditor is an insured depository institution (as that term is defined in section 3(c)(2) of the Federal Deposit Insurance Act) in such manner and after such notice as the Board may prescribe.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H5D7BCFAC43014DAAA6571B5500315C00"><enum>(b)</enum><header>Exemption in case of refinancing with no new money regardless of creditor</header><text display-inline="yes-display-inline">Section 125(e)(2) of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1635">15 U.S.C. 1635(e)(2)</external-xref>) is amended by striking <quote>by the same creditor</quote>.</text></subsection> <subsection id="HFCC1D748D704418D963EAA9E4BEC1B11"><enum>(c)</enum><header>Exempt home equity lines of credit</header><text display-inline="yes-display-inline">Section 125(e)(4) of the Truth in Lending Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1635">15 U.S.C. 1635(e)(4)</external-xref>) is amended to read as follows:</text> <quoted-block style="OLC" id="H5E3FD3D77AD7408F0079ED11A6274EF9" display-inline="no-display-inline"> <paragraph id="HCBC292CD79CE4A64BF1986FCD38BBEA"><enum>(4)</enum><text>advances under an open end consumer credit plan which provides for any extension of credit which is secured by the consumer’s principal dwelling.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H498F3A20ACA642060048713BC658F5D3"><enum>202.</enum><header>Additional exemptions under Home Mortgage Disclosure Act of 1975; streamlining reporting</header> <subsection id="H2B8E7226742E458090EBDDB8B3D1B13"><enum>(a)</enum><header>Small reporter exemption</header><text display-inline="yes-display-inline">Section 304 of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2803">12 U.S.C. 2803</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="H1CF3F1D843E14499913FD40659909C18" display-inline="no-display-inline"> <subsection id="H98EA1FD1A5A34CBE91F34615271BE005"><enum>(n)</enum><header>Small reporter exemption</header><text display-inline="yes-display-inline">If, in any year, a depository institution makes fewer than 100 reportable loans described in any paragraph of subsection (b), the depository institution shall be exempt from the disclosure requirements of this section with respect to the loans described in that paragraph for such year.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HF4D1BE0D4BB34DDDB4A356988C17AD10"><enum>(b)</enum><header>MSA modifications</header><text display-inline="yes-display-inline">Section 304(a) of the Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2803">12 U.S.C. 2803(a)</external-xref>) is amended——</text> <paragraph id="H03DF9A2E28D34B99B9A6052FE0876900"><enum>(1)</enum><text>in paragraph (1), by inserting <quote>or as modified by the Board under paragraph (3),</quote> after <quote>as defined by the Department of Commerce</quote>; and</text></paragraph> <paragraph id="H191DC0EC11774D69A0A30491B7734099"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="HFB4977D519C041F5ABC71F68C6774C52" display-inline="no-display-inline"> <paragraph id="H5BC1B2A98C2549FDB2848567249F779E"><enum>(3)</enum><header>Modification of MSAs</header><text display-inline="yes-display-inline">The Board may modify the description of any primary metropolitan statistical area, metropolitan statistical area, and consolidated metropolitan statistical area, as defined by the Secretary of Commerce, for purposes of this subsection.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H02A6BFA19E254A2C8B2D5E59E9CC3B13"><enum>(c)</enum><header>Regular streamlining</header><text display-inline="yes-display-inline">The Home Mortgage Disclosure Act (<external-xref legal-doc="usc" parsable-cite="usc/12/2801">12 U.S.C. 2801 et seq.</external-xref>) is amended by adding the following new section:</text> <quoted-block style="OLC" id="HF929733E0C5F4717A59374002DF5DD96" display-inline="no-display-inline"> <section id="HE40EB1F401944C728523EA7EDF726EDA"><enum>312.</enum><header>Regular streamlining</header><text display-inline="no-display-inline">Before the end of the 1-year period beginning on the date of the enactment of the Community Banks Serving Their Communities First Act and before the end of each 5-year period thereafter, the Board shall—</text> <paragraph id="HA1A6B3D805664CF8ADC22400CC724096"><enum>(1)</enum><text display-inline="yes-display-inline">review the data collection and reporting requirements of this title; </text></paragraph> <paragraph id="H4099EDDDBD694F8D0011A339FC00BBA0"><enum>(2)</enum><text>streamline, reduce, or eliminate such requirements by regulation to the extent consistent with the purposes of this title; </text></paragraph> <paragraph id="HB9EED19C6B9C44E8B98628ABC634B17"><enum>(3)</enum><text>revise the data collection and reporting requirements under this title to ensure that they are consistent with those imposed under the Equal Credit Opportunity Act; and </text></paragraph> <paragraph id="HF28F88130FC64E91A0A6E614DE59E97"><enum>(4)</enum><text>report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives such legislative recommendations as the Board determines to be necessary to streamline, reduce, or eliminate such requirements to the extent consistent with the purposes of this title and to ensure that they are consistent with those imposed under the Equal Credit Opportunity Act.</text></paragraph></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section> <section id="H54F211B97EF5468CB8CDC24199342CE8"><enum>203.</enum><header>Exception to annual privacy notice requirement under the Gramm-Leach-Bliley Act</header><text display-inline="no-display-inline">Section 503 of the Gramm-Leach-Bliley Act (<external-xref legal-doc="usc" parsable-cite="usc/15/6803">15 U.S.C. 6803</external-xref>) is amended by adding the following new subsection:</text> <quoted-block style="OLC" id="HF4A1238F35794AE39DC07E8BC503B900" display-inline="no-display-inline"> <subsection id="H97707FB9CF894316B3B69EC6BB184EA5"><enum>(c)</enum><header>Exception to Annual Notice Requirement</header><text display-inline="yes-display-inline">A financial institution that—</text> <paragraph id="H0995DB93DA7A4A129FB5EA04913083C0"><enum>(1)</enum><text>provides nonpublic personal information only in accordance with the provisions of section 502(b)(2) (relating to the consumer <quote>opt out</quote> exception) and subsection 502(e) (relating to general exceptions); and</text></paragraph> <paragraph id="H7B75A03D9E764F4C8B54F0DE3CBA915F"><enum>(2)</enum><text>has not changed its policies and practices with regard to disclosing nonpublic personal information, </text></paragraph><continuation-text continuation-text-level="subsection">shall be exempt from the annual disclosure requirement under subsection (a).</continuation-text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="H942428BAC8994AA2BE649FBC1BBFD1D9"><enum>204.</enum><header>Streamlining reports of condition</header><text display-inline="no-display-inline">Section 7(a) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1817">12 U.S.C. 1817(a)</external-xref>) is amended by inserting after paragraph (11) (as added by section 102 of this Act) the following new paragraph:</text> <quoted-block style="OLC" display-inline="no-display-inline" id="HEA80E108F2F64D54BF85B96995B25331"> <paragraph id="H25C2EEC4629F4C2491590037FB04025E"><enum>(12)</enum><header>Streamlining Reports of Condition</header> <subparagraph id="HEBC0FA31EE454D29BAB83EBA5CC20FA"><enum>(A)</enum><header>Review of information and schedules</header><text display-inline="yes-display-inline">Before the end of the 1-year period beginning on the date of the enactment of the Community Banks Serving Their Communities First Act and before the end of each 5-year period thereafter, the Corporation shall, in conjunction with the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Director of the Office of Thrift Supervision, review the information and schedules that are required to be filed by any insured depository institution with a report of condition under paragraph (3).</text></subparagraph> <subparagraph id="H1ED1E744D0D7493297E2708800C40CC"><enum>(B)</enum><header>Reduction or elimination of filings which are more burdensome than beneficial</header><text display-inline="yes-display-inline">Within 9 months of completing any review under subparagraph (A), the Corporation, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Director of the Office of Thrift Supervision shall reduce or eliminate any requirement to file information or schedules under paragraph (3) if such agencies find that the burdens of such filings are not outweighed by the benefits to safety and soundness of the financial system or the ability of the Corporation to accurately determine the financial condition and the results of operations of each insured depository institution.</text></subparagraph> <subparagraph id="HD614E58B1A4243BEBCD3D0FF6470000"><enum>(C)</enum><header>Report to the congress</header><text display-inline="yes-display-inline">Before the end of the 6-month period beginning on the date of completion of any review under subparagraph (A), the Corporation, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, and the Director of the Office of Thrift Supervision shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing the findings of the agencies with respect to such review and any recommendation of such agencies for legislative action to implement any such finding.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <section id="HA8009D6992C94492A0412D0027915900"><enum>205.</enum><header>Increase in the special regulatory lending limit on loans to executive officers</header><text display-inline="no-display-inline">Section 22(g) of the Federal Reserve Act (<external-xref legal-doc="usc" parsable-cite="usc/12/375b">12 U.S.C. 375b(g)</external-xref>) is amended by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="H7F4A714193924A5EBAFE6BE749A0A288" display-inline="no-display-inline"> <paragraph id="H355C6EE6E25E4ECFB5EF004CF74B3977"><enum>(11)</enum><header>Limit applicable on aggregate amount of certain loans to executive officers of community banks</header><text display-inline="yes-display-inline">Notwithstanding any regulation prescribed by the Board under paragraph (4) and subject to other conditions imposed under this subsection and subsection (h), the aggregate amount of extensions of credit that a member bank may make to an executive officer of the bank under paragraph (4) shall not exceed $250,000.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></section> <enum>III</enum><header>Tax Relief for Bank Depositors, Rural Banks, Municipalities, and Banks Organized as Limited Liability Companies</header> <section id="H3A4581B216B8482798EA44EA684BE8FD" section-type="subsequent-section"><enum>301.</enum><header>Reduced rate and deferral of income recognition on long-term certificates of deposit</header> <subsection id="H247D6F697E4E43F58CB7A517F8838827"><enum>(a)</enum><header>Deferral of income recognition</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/451">Section 451</external-xref> of the Internal Revenue Code of 1986 (relating to general rule for taxable year of inclusion) is amended by adding at the end the following new subsection:</text> <quoted-block style="OLC" id="H2721B3B497684DD8A17572C3077CE71E" display-inline="no-display-inline"> <subsection id="H77D18AA09A364990A4183C6924AEA653"><enum>(j)</enum><header>Certificates of deposits held by cash basis individuals</header><text display-inline="yes-display-inline">In the case of an individual on the cash receipts and disbursements method of accounting who holds a nonnegotiable certificate of deposit, interest income which is not made available for withdrawal before maturity of the certificate without penalty shall not be includible in gross income before the certificate is redeemed or matures.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HFF6DD083E225408E88F9B400F1E21508"><enum>(b)</enum><header>Interest income on long-term certificates of deposit</header><text>Subparagraph (A) of section 1(h)(11) of such Code is amended by striking <quote>increased by</quote> and all that follows and inserting: </text> <quoted-block style="OLC" id="HE43318F6D4DC4EE49000C8FBFCDA9900" display-inline="no-display-inline"><quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">increased by—</quoted-block-continuation-text> <clause id="H857197056A504547000294DBDECF488E"><enum>(i)</enum><text>qualified dividend income, and</text></clause> <clause id="H80EC98BD76904356960000C568F9F5A6"><enum>(ii)</enum><text>interest income on any nonnegotiable certificate of deposit—</text> <subclause id="H0E69611ECCE04CE8A5FB6DA186D47FE"><enum>(I)</enum><text>with a fixed maturity date which is 1 year or more from the date of issue, and</text></subclause> <subclause id="H522638431555465FB721C91000F7EEE8"><enum>(II) </enum><text display-inline="yes-display-inline">the interest on which is not made available for withdrawal before maturity without penalty.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H2FC1DA0C52854727A9829D5520D7C607"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H1B95B3734F8C45509634C1E352E15DB3"><enum>302.</enum><header>Exclusion for interest on loans secured by agricultural real property</header> <subsection id="H89EA98D3E5B745CD9666E02C8E3C7B2"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Part III of subchapter B of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 139A the following new section:</text> <quoted-block style="OLC" id="H994291928775491398D28344696601CC" display-inline="no-display-inline"> <section id="H4623CD48030B44CCB550465E88A8A5AB"><enum>139B.</enum><header>Interest on loans secured by agricultural real property</header> <subsection id="H396201FFBFD44C72A9734702DE4F74CA"><enum>(a)</enum><header>Exclusion</header><text display-inline="yes-display-inline">Gross income shall not include interest received by a qualified lender on any qualified real estate loan.</text></subsection> <subsection id="H78777C1A06DC49849292199B5F98BC1F"><enum>(b)</enum><header>Definitions</header><text>For purposes of this section—</text> <paragraph id="HE6CFE9A7625B47AEB67CD1E15BA77F56"><enum>(1)</enum><header>Qualified lender</header><text display-inline="yes-display-inline">The term <quote>qualified lender</quote> means any bank or savings association the deposits of which are insured under the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1811">12 U.S.C. 1811 et seq.</external-xref>).</text></paragraph> <paragraph id="HE694094DCE9E4FADBB45FE7B32C4E78C"><enum>(2)</enum><header>Qualified real estate loan</header><text display-inline="yes-display-inline">The term <quote>qualified real estate loan</quote> means any loan secured by agricultural real estate or by a leasehold mortgage (with a status as a lien) on agricultural real estate. For purposes of the preceding sentence, the determination of whether property securing such loan is agricultural real estate shall be made as of the time the interest income on such loan is accrued.</text></paragraph> <paragraph id="H2843F3DFA4E74C59B09B9D3B53B92C97"><enum>(3)</enum><header>Agricultural real estate</header><text>The term <quote>agricultural real estate</quote> means—</text> <subparagraph id="H6544BAC34B2E434395B2C4AC45E4A0B7"><enum>(A)</enum><text display-inline="yes-display-inline">real property used for the production of 1 or more agricultural products, and</text></subparagraph> <subparagraph id="H34BB2F52BA2D4E5FAB603662111031A3"><enum>(B)</enum><text>any single family residence—</text> <clause id="H568B99146076421E85EF5874DBB8CD42"><enum>(i)</enum><text display-inline="yes-display-inline">which is the principal residence (within the meaning of section 121) of its occupant,</text></clause> <clause id="H0D71B2A735144A230039AEEE4F9352E1"><enum>(ii)</enum><text display-inline="yes-display-inline">which is located in a rural area (as determined by the Secretary of Agriculture), which is not within a Metropolitan Statistical Area (as defined by the Office of Management and Budget) and which has a population (determined on the basis of the most recent decennial census for which data are available) of 2,500 or less, and</text></clause> <clause id="H3F8FD32A559F48459189B009217F74C0"><enum>(iii)</enum><text display-inline="yes-display-inline">which is purchased or improved with the proceeds of the qualified real estate loan.</text></clause></subparagraph></paragraph></subsection> <subsection id="H7C4528E19B9143EDB5EE098E6023F1E"><enum>(c)</enum><header>Coordination with section 265</header><text display-inline="yes-display-inline">Qualified real estate loans shall be treated as obligations described in section 265(a)(2) the interest on which is wholly exempt from the taxes imposed by this subtitle.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H1AF5C9B385C249108D7DD7F5E47D0604"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The table of sections for such part III is amended by inserting after the item relating to section 139A the following new item: </text> <toc regeneration="no-regeneration"> <toc-entry level="section"><quote>Sec. 139B. Interest on loans secured by agricultural real property.</quote></toc-entry></toc></subsection> <subsection display-inline="no-display-inline" id="H5FF0B8AB60964DB89BFA9B1C5B4BDC7E"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H1371F24346A5478799DFB7BE986231A0"><enum>303.</enum><header>Increase in cap on qualified small issue bonds</header> <subsection id="HC6D63783D43741E88E914EE2F13C2B9"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Clause (i) of <external-xref legal-doc="usc" parsable-cite="usc/26/144">section 144(a)(4)(A)</external-xref> of the Internal Revenue Code of 1986 (relating to general rule for $10,000,000 limit in certain cases) is amended by striking <quote>$10,000,000</quote> and inserting <quote>$30,000,000</quote>. </text></subsection> <subsection id="H23F32E5D8CB84E1A8CC21E227314A627"><enum>(b)</enum><header>Adjustment of cap for inflation</header><text>Subsection (a) of section 144 of such Code (relating to qualified small issue bond) is amended by redesignating paragraph (12) as paragraph (13) and by inserting after paragraph (11) the following new paragraph:</text> <quoted-block style="OLC" id="HD09F039959454FA7826152DA00D1F9E9" display-inline="no-display-inline"> <paragraph id="HDFBE7A8054D74B399C3FDB835855E3EB"><enum>(12)</enum><header>Inflation adjustment</header><text display-inline="yes-display-inline">In the case of a calendar year after 2006, the $30,000,000 amount contained in paragraph (4)(A)(i) shall be increased by an amount equal to—</text> <subparagraph id="H7188EFE550844EB0BEFD51F8EBC32BF0"><enum>(A)</enum><text>such dollar amount, multiplied by</text></subparagraph> <subparagraph id="H145D4B7092CF40E9A9BFDD225E5D6588"><enum>(B)</enum><text display-inline="yes-display-inline">the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting <quote>calendar year 2005</quote> for <quote>calendar year 1992</quote> in subparagraph (B) thereof. </text></subparagraph><continuation-text continuation-text-level="paragraph">Any increase under the preceding sentence which is not a multiple of $100,000 shall be rounded to the next lowest multiple of $100,000.</continuation-text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H8A0D5DB7BF8A4AE5BA6CDDF09216DB27"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to—</text> <paragraph id="H51CA2BA0FC8C475EB32E66D611A723ED"><enum>(1)</enum><text>obligations issued after the date of the enactment of this Act, and</text></paragraph> <paragraph id="HC5E51A9171304B22BF61FA004FC03041"><enum>(2)</enum><text>capital expenditures made after such date with respect to obligations issued on or before such date.</text></paragraph></subsection></section> <section id="H157242B5085D4AB38283416520CC2484"><enum>304.</enum><header>Limited liability company tax treatment for FDIC-Insured limited liability companies</header> <subsection id="H6D8FA473069F482687DC559EF6696BE4"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(a)</external-xref> of the Internal Revenue Code of 1986 (defining partnership and partner) is amended to read as follows:</text> <quoted-block style="OLC" id="H26DCC825B25E4976997300688EA9955E" display-inline="no-display-inline"> <paragraph id="HF1F763E8A3FD41BFBCA9D6597B002501"><enum>(2)</enum><header>Partner and partnership</header> <subparagraph id="H646907F28DA04DC58BD8BEE18120465"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The term <quote>partnership</quote> includes a syndicate, group, pool, joint venture, or other unincorporated organization, through or by means of which any business, financial operation, or venture is carried on, and which is not, within the meaning of this title, a trust or estate or a corporation; and the term `partner' includes a member in such a syndicate, group, pool, joint venture, or organization.</text></subparagraph> <subparagraph id="H7260880ADC2544BB9B551CF0DBC32EDB"><enum>(B)</enum><header>Election by certain banks to be taxed as partnerships</header> <clause id="HC486AA5D937941CFB9EA5006839864B6"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">An eligible corporation may elect to be treated as a partnership for purposes of this title.</text></clause> <clause id="H99FAA331A9E0472DA296D4A4C900FF05"><enum>(ii)</enum><header>Tax treatment</header><text display-inline="yes-display-inline">In the case of an eligible corporation making an election under clause (i)—</text> <subclause id="H6FD2F2018B5A4641946684853661D01E"><enum>(I)</enum><text> no gain or loss shall be recognized to the corporation or the shareholders by reason of an election under clause (i), and</text></subclause> <subclause id="H85EAB69285A34669B25EFCFDA5D5845F"><enum>(II)</enum><text>section 1374 shall apply to the entity after such election.</text></subclause></clause> <clause id="H08D547B4018B477C8D4DB38495FFBBB5"><enum>(iii)</enum><header>Eligible corporation</header><text display-inline="yes-display-inline">The term <quote>eligible corporation</quote> means any of the following entities which would (but for this subparagraph) be treated as a C corporation for purposes of this title:</text> <subclause id="H5FB3F99AA5234BFEA8D9E433C868D096"><enum>(I)</enum><text>Any bank (as defined in section 581).</text></subclause> <subclause id="H76981D70DA6E4976B0DE53BD79E27A8"><enum>(II)</enum><text display-inline="yes-display-inline">Any bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841(a)</external-xref>)).</text></subclause> <subclause id="H23A16B6C9C9040C3827B31BB123993D1"><enum>(III)</enum><text display-inline="yes-display-inline">Any savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)).</text></subclause> <subclause id="HA81768D109D44CADAED6267420EB1188"><enum>(IV)</enum><text>Any savings and loan holding company (as defined in section 10(a)(1)(D) of the Home Owners Loan Act).</text></subclause></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H5B9AD5C1F1E3484E81B000AAF007EF2"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <enum>IV</enum><header>Tax Relief for Community Banks and Holding Companies</header> <section id="H148DCAB997DA479892E5DA8E2234F598"><enum>401.</enum><header>Reduction in tax</header> <subsection id="H0EC6297A83F64F42B2BB59538B21A415"><enum>(a)</enum><header>C corporations</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/11">Section 11</external-xref> of the Internal Revenue Code of 1986 (relating to tax imposed) is amended by adding at the end the following new subsection:</text> <quoted-block style="OLC" id="H876DDF4520D4480B910994DAC0D9BF85" display-inline="no-display-inline"> <subsection id="H9CA6AD93EA0F4DD388B5275D8F5A061"><enum>(e)</enum><header>Reduction of tax on community banks</header> <paragraph id="HFF7F7073F05F4150A237E9E1FF8398AC"><enum>(1)</enum><header>In general</header><text>In the case of a C corporation which is a community bank, the aggregate tax imposed by this section, section 55, and section 1201 shall be 80 percent of the aggregate tax which would (but for this subsection) be imposed by such sections.</text></paragraph> <paragraph id="HF69A21D2789547268BD600DCED998E97"><enum>(2)</enum><header>Maximum reduction</header><text>The reduction in tax by reason of this subsection shall not exceed $250,000. Corporations treated as 1 corporation under section 1202(d)(3) shall be so treated under this subsection, and the limitation under the preceding sentence shall be allocated among such corporations in such manner as the Secretary shall prescribe.</text></paragraph> <paragraph id="HE2DE03895B824A96A9A9E3A7802EA54E"><enum>(3)</enum><header>Increased benefit for banks operating in distressed areas, etc</header> <subparagraph id="H9FF4C8CCF5FC427DB7A168308590B184"><enum>(A)</enum><header>In general</header><text>In the case of a bank operating in an area referred to in subparagraph (B)—</text> <clause id="HDD4ED8DF6AB4446DA993CC2DEDCE583E"><enum>(i) </enum><text>paragraph (1) shall be applied by substituting <quote>50 percent</quote> for <quote>80 percent</quote>, and</text></clause> <clause id="H5C5DF5EDED67493792F7C6A1D4ED3D37"><enum>(ii)</enum><text display-inline="yes-display-inline">paragraph (2) shall be applied by substituting <quote>$500,000</quote> for <quote>$250,000</quote>.</text></clause></subparagraph> <subparagraph id="HA8B33FEEBA4F4A5BBFE37DD331868DA8"><enum>(B)</enum><header>Areas described</header><text>The areas referred to in this subparagraph are—</text> <clause id="H5981A08E96D44C00B7296133F8718465"><enum>(i) </enum><text>empowerment zones and enterprise communities designated under section 1391,</text></clause> <clause id="H11B5099D24274ED299626347A71D1FF4"><enum>(ii)</enum><text>renewal communities designated under section 1400E,</text></clause> <clause id="H32E96EDE187247CBBB00E7CE31F18C89"><enum>(iii)</enum><text>low-income communities (as defined in section 45D(e)), and</text></clause> <clause id="H8DA429FE3D174545A6C2E9000096C3D7"><enum>(iv)</enum><text>distressed communities (within the meaning of section 233 of the Bank Enterprise Act of 1991 (<external-xref legal-doc="usc" parsable-cite="usc/12/1834a">12 U.S.C. 1834a(b)</external-xref>).</text></clause></subparagraph></paragraph> <paragraph id="H669D5219E9C64680907C00B0AA2BFAE9"><enum>(4)</enum><header>Community bank</header><text display-inline="yes-display-inline">For purposes of this section, the term <quote>community bank</quote> means any of the following entities the gross assets of which (determined under the rules of section 1202(d)) are $5,000,000,000 or less:</text> <subparagraph id="H04CAB604EFB14D87AE0000E29ED3EE1C"><enum>(A)</enum><text>Any bank (as defined in section 581).</text></subparagraph> <subparagraph id="H7BFB322BC07F44829FD944985E5877C0"><enum>(B)</enum><text display-inline="yes-display-inline">Any bank holding company (as defined in section 2(a) of the Bank Holding Company Act of 1956 (<external-xref legal-doc="usc" parsable-cite="usc/12/1841">12 U.S.C. 1841(a)</external-xref>)).</text></subparagraph> <subparagraph id="H5670A555F1C34D4FB874BEDB4690AD73"><enum>(C)</enum><text display-inline="yes-display-inline">Any savings association (as defined in section 3(b) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>)).</text></subparagraph> <subparagraph id="H7602CE41FC014C5B85A8E508346E0000"><enum>(D)</enum><text display-inline="yes-display-inline">Any savings and loan holding company (as defined in section 10(a)(1)(D) of the Home Owners Loan Act).</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HB2075EB162534EC194A93E3741F6B890"><enum>(b)</enum><header>S corporations</header><text>Subsection (a) of section 1366 of such Code is amended by adding at the end the following new paragraph:</text> <quoted-block style="OLC" id="HF87F17B93EAA4099BFDEFD10CA1DFD87" display-inline="no-display-inline"> <paragraph id="HF5D2A17FB1E84EBD8742439F45D0EAB5"><enum>(3)</enum><header>Reduction of tax on community banks</header> <subparagraph id="HDCB67458331E49208DB248881D7CF728"><enum>(A)</enum><header>In general</header><text>In the case of an S corporation which is a community bank (as defined in section 11(e)(4)), the net amount required to be taken into account by shareholders (without regard to this paragraph) shall be reduced by the lesser of—</text> <clause id="HF7F359136A1C4FB2B9E75C456C2D6530"><enum>(i)</enum><text>20 percent of such net amount, or</text></clause> <clause id="HCE6649EA117447738025CE8113D84398"><enum>(ii)</enum><text>$1,250,000.</text></clause></subparagraph> <subparagraph id="H90F6A0C717624A119851275F407F0098"><enum>(B)</enum><header>Increased benefit for banks operating in distressed areas, etc</header><text>In the case of a bank operating in an area referred to in section 11(e)(3)(B)—</text> <clause id="HBEEBA0171325481F9131B600DED9F900"><enum>(i)</enum><text>subparagraph (A)(i) shall be applied by substituting <quote>50 percent</quote> for <quote>20 percent</quote>, and</text></clause> <clause id="H89BB274B64134A0BADC97C5E8F890000"><enum>(ii)</enum><text display-inline="yes-display-inline">subparagraph (A)(ii) shall be applied by substituting <quote>$2,500,000</quote> for <quote>$1,250,000</quote>.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HF460A44C43BB4012B66556CBADE85200"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H2523194CF31845E4B11CDE1380005528"><enum>402.</enum><header>Community banks exempt from minimum tax</header> <subsection id="H50CB0ED94C114F0D9723E01D5F0750C5"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/55">Section 55</external-xref> of the Internal Revenue Code of 1986 (relating to alternative minimum tax imposed) is amended by adding at the end the following new subsection:</text> <quoted-block style="OLC" id="HAEE7338C602D4FAA93803244D02B1731" display-inline="no-display-inline"> <subsection id="H719B43D244F441F200F14D3C791F6212"><enum>(f)</enum><header>Exemption for community banks</header> <paragraph id="HF97ABCA49A584FE48912A17F3FF6C4F2"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The tentative minimum tax of a community bank (as defined in section 11(e)(4)) shall be zero.</text></paragraph> <paragraph id="H3F22D8AB11544643BCE65856EE6E7059"><enum>(2)</enum><header>Certain rules to apply</header><text>Rules similar to the rules of paragraphs (2) through (5) of subsection (e) shall apply for purposes of this subsection.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HCC98638BE2DC49EF8571C487CAA0CFB7"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section>