110 HR 7253 IH: Economic Growth and Financial Stabilization Act of U.S. House of Representatives 2008-10-03 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.

I 110th CONGRESS 2d Session H. R. 7253 IN THE HOUSE OF REPRESENTATIVES October 3, 2008 Mr. Aderholt introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To enhance economic growth and promote the stability of the financial system of the United States, and for other purposes.

1.

Short title

This Act may be cited as the Economic Growth and Financial Stabilization Act of 2008.

2.

Zero percent capital gains rate for individuals and corporations

(a)

Zero percent capital gains rate for individuals

(1)

In general

Paragraph (1) of section 1(h) of the Internal Revenue Code of 1986 is amended by striking subparagraph (C), by redesignating subparagraphs (D) and (E) and subparagraphs (C) and (D), respectively, and by amending subparagraph (B) to read as follows: (B)0 percent of the adjusted net capital gain (or, if less, taxable income); . (2)

Alternative minimum tax

Paragraph (3) of section 55(b) of such Code is amended by striking subparagraph (C), by redesignating subparagraph (D) as subparagraph (C), and by amending subparagraph (B) to read as follows: (B)0 percent of the adjusted net capital gain (or, if less, taxable excess), plus . (3)

Repeal of sunset of reduction in capital gains rates for individuals

Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 shall not apply to section 301 of such Act. (b)

Zero percent capital gains rate for corporations

(1)

In general

Section 1201 of the Internal Revenue Code of 1986 is amended by redesignating subsection (b) as subsection (c), and by striking subsection (a) and inserting the following new subsections: (a)

General rule

If for any taxable year a corporation has a net capital gain, then, in lieu of the tax imposed by sections 11, 511, 821(a) or (c), and 831(a), there is hereby imposed a tax (if such tax is less than the tax imposed by such sections) which shall consist of the sum of— (1)a tax computed on the taxable income reduced by the amount of the net capital gain, at the rates and in the manner as if this subsection had not been enacted, (2)0 percent of the adjusted net capital gain (or, if less, taxable income), (3)25 percent of taxable income in excess of the sum of the amounts on which tax is determined under the preceding paragraphs of this subsection. (b)

Definitions and special rules

For purposes of this section— (1)

In general

The term adjusted net capital gain shall have the meaning given such term in section 1(h). (2)

Dividends taxed at net capital gain

Except as otherwise provided in this section, the term net capital gain has the meaning given such term in section 1(h)(11). . (2)

Alternative minimum tax

Section 55(b) of such Code is amended by adding at the end the following new paragraph: (4)

Maximum rate of tax on net capital gain of corporations

The amount determined under paragraph (1)(B)(i) shall not exceed the sum of— (A)the amount determined under such paragraph computed at the rates and in the same manner as if this paragraph had not been enacted on the taxable excess reduced by the net capital gain, plus (B)the amount determined under section 1201. . (3)

Technical amendments

(A)Section 1445(e)(1) of such Code is amended by striking 35 percent (or, to the extent provided in regulations, 15 percent) and inserting 0 percent. (B)Section 1445(e)(2) of such Code is amended by striking 35 percent and inserting 0 percent. (C)Section 7518(g)(6)(A) of such Code is amended by striking 15 percent (34 percent in the case of a corporation) and inserting 0 percent . (D)Section 607(h)(6)(A) of the Merchant Marine Act, 1936 is amended by striking 15 percent (34 percent in the case of a corporation) and inserting 0 percent. (c)

Effective date

(1)

In general

Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. (2)

Withholding

The amendments made by subparagraphs (A) and (B) of subsection (b)(3) shall take apply to dispositions and distributions after the date of the enactment of this Act.

3.

Reduction in top corporate marginal rate

(a)

In general

Paragraph (1) of section 11(b) of the Internal Revenue Code of 1986 is amended— (1)by adding and at the end of subparagraph (A), (2)by striking but does not exceed $75,000, in subparagraph (B) and inserting a period, (3)by striking subparagraphs (C) and (D), and (4)by striking $11,750 and all that follows and inserting $5,000.. (b)

Conforming amendments

(1)Section 11(b)(2) of such Code is amended by striking 35 percent and inserting 28 percent. (2)Section 833(b)(1)(A) of such Code is amended by striking 25 percent and inserting 20 percent. (c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

4.

Distressed Assets Loan Fund

(a)

Establishment

There is established in the Department of the Treasury a Distressed Assets Loan Fund (hereafter in this section referred to as the Fund) under the control of the Secretary of the Treasury for the purpose of making loans available to depository institutions with distressed assets at low rates of interest under terms prescribed by the Secretary and in a manner provided in the regulations prescribed under subsection (b). (b)

Regulations

The Secretary shall prescribe regulations to define terms used in this section and establish an administration for the Fund.

5.

Increase in maximum amount of deposit insurance and share insurance

(a)

Standard maximum deposit insurance amount increased

Section 11(a) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)) is amended— (1)in subparagraph (E), by striking $100,000 and all that follows through the end of the subparagraph and inserting $250,000.; and (2)in subparagraph (F)(i)(I), by striking $100,000 and inserting $250,000. (b)

Standard maximum share insurance amount increased

Section 207(k)(5) of the Federal Credit Union Act (12 U.S.C. 1787(k)(5)) is amended by striking $100,000 and inserting $250,000.

6.

Gain or loss from sale or exchange of certain preferred stock

(a)

In general

For purposes of the Internal Revenue Code of 1986, gain or loss from the sale or exchange of any applicable preferred stock by any applicable financial institution shall be treated as ordinary income or loss. (b)

Applicable preferred stock

For purposes of this section, the term applicable preferred stock means any stock— (1)which is preferred stock in— (A)the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (12 U.S.C. 1716 et seq.), or (B)the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), and (2)which— (A)was held by the applicable financial institution on September 6, 2008, or (B)was sold or exchanged by the applicable financial institution on or after January 1, 2008, and before September 7, 2008. (c)

Applicable financial institution

For purposes of this section: (1)

In general

Except as provided in paragraph (2), the term applicable financial institution means— (A)a financial institution referred to in section 582(c)(2) of the Internal Revenue Code of 1986, or (B)a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))). (2)

Special rules for certain sales

In the case of— (A)a sale or exchange described in subsection (b)(2)(B), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at the time of the sale or exchange, and (B)a sale or exchange after September 6, 2008, of preferred stock described in subsection (b)(2)(A), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at all times during the period beginning on September 6, 2008, and ending on the date of the sale or exchange of the preferred stock. (d)

Special rule for certain property not held on September 6, 2008

The Secretary of the Treasury or the Secretary's delegate may extend the application of this section to all or a portion of the gain or loss from a sale or exchange in any case where— (1)an applicable financial institution sells or exchanges applicable preferred stock after September 6, 2008, which the applicable financial institution did not hold on such date, but the basis of which in the hands of the applicable financial institution at the time of the sale or exchange is the same as the basis in the hands of the person which held such stock on such date, or (2)the applicable financial institution is a partner in a partnership which— (A)held such stock on September 6, 2008, and later sold or exchanged such stock, or (B)sold or exchanged such stock during the period described in subsection (b)(2)(B). (e)

Regulatory authority

The Secretary of the Treasury or the Secretary's delegate may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes of this section. (f)

Effective date

This section shall apply to sales or exchanges occurring after December 31, 2007, in taxable years ending after such date.