[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6207 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 6207

 To amend the Internal Revenue Code of 1986 to treat income earned by 
mutual funds from exchange-traded funds holding precious metal bullion 
                         as qualifying income.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2006

 Mr. English of Pennsylvania 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 treat income earned by 
mutual funds from exchange-traded funds holding precious metal bullion 
                         as qualifying income.

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

SECTION 1. INCOME EARNED BY MUTUAL FUNDS FROM EXCHANGE-TRADED FUNDS 
              HOLDING PRECIOUS METAL BULLION TREATED AS QUALIFYING 
              INCOME.

    (a) In General.--Section 851 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(i) Bullion Exchange-Traded Funds.--
            ``(1) In general.--In the case of any interest in a trust 
        which is described in paragraph (2)--
                    ``(A) such interest shall not fail to be treated as 
                a security for purposes of this section by reason of 
                any provision of subpart E of subchapter J (relating to 
                grantors and others treated as substantial owners),
                    ``(B) any net income derived from such interest 
                shall be treated for purposes of subsection (b)(2) as 
                gain from the disposition of such interest, and
                    ``(C) the last sentence of subsection (b) shall not 
                apply to such interest.
            ``(2) Interests in bullion exchange-traded funds 
        described.--An interest in a trust is described in this 
        paragraph if--
                    ``(A) such interest is a security (as defined in 
                section 2(a)(36) of the Investment Company Act of 1940, 
                as amended), determined without regard to subpart E of 
                subchapter J,
                    ``(B) such interests are regularly traded on an 
                established securities market in the United States, and
                    ``(C) at least 95 percent of the assets of the 
                trust are bullion described in section 408(m)(3)(B).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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