1.Short title; table of
contents
(a)This Act may be cited
as the Community Banks Serving Their
Communities First Act
or the Communities First Act
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Title I—Targeted Regulatory Relief for Community
Banks
Sec. 101. Short form reports of condition for certain community
banks.
Sec. 102. Community bank exemption from annual management
assessment of internal controls requirement of the Sarbanes-Oxley Act of
2002.
Sec. 103. Changes required to small bank holding company policy
statement on assessment of financial and managerial factors.
Sec. 104. Community bank protection under the Securities
Investor Protection Act of 1970.
Sec. 105. Updating the amount of small bank exception for cap
on aggregate loans to officers.
Sec. 106. Consideration of community bank impact.
Sec. 107. Increase in shareholder registration
threshold.
Title II—Additional Regulatory Relief for Community Banks and
their Customers
Sec. 201. Enhance customer capital access.
Sec. 202. Seasoned customer CTR exemption.
Sec. 203. Exception to annual privacy notice requirement under
the Gramm-Leach-Bliley Act.
Sec. 204. Privacy protection of consumer reports during loan
application.
Sec. 205. Update in the special regulatory lending limit on
loans to executive officers.
Sec. 206. Reimbursement for production of mandated
records.
Sec. 207. Study by the Comptroller General on implementation of
commercial real estate guidance.
Title III—Tax Relief for Bank Depositors, Rural Banks,
Municipalities, Banks Organized as Limited Liability Companies, Individual
Savers, and Small Businesses
Sec. 301. Reduced rate and deferral of income recognition on
long-term certificates of deposit.
Sec. 302. Exclusion for interest on loans secured by
agricultural real property.
Sec. 303. Update in cap on qualified small issue
bonds.
Sec. 304. Limited liability company tax treatment for
FDIC-insured limited liability companies.
Sec. 305. Repeal of individual alternative minimum
tax.
Sec. 306. Young savers accounts.
Sec. 307. Section 179 expensing for small business.
Title IV—Tax Relief for Community Banks and Holding
Companies
Sec. 401. Limited tax credit.
Sec. 402. Community bank relief from minimum tax.
Title V—Small Business Subchapter S Reforms
Sec. 501. Increasing Shareholder Limit for Subchapter S to
150.
Sec. 502. Treatment of qualifying director shares.
Sec. 503. Recapture of bad debt reserves.
Sec. 504. Issuance of preferred stock permitted for subchapter
S corporations.
Title VI—Small Business Lending Enhancements
Sec. 601. Reduced fees for section 7(a) loans.
Sec. 602. Low documentation loan program made
mandatory.
Sec. 603. Effective date.
<enum>I</enum><header>Targeted
Regulatory Relief for Community Banks</header>
<section display-inline="no-display-inline" id="HC92AA1A1035A453486F800511FEE0028"><enum>101.</enum><header>Short form
reports of condition for certain community banks</header>
<subsection id="HA600CCD379584CC2A0CF1100FC27CDB5"><enum>(a)</enum><header>In
general</header><text display-inline="yes-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 display-inline="no-display-inline" id="H896A3E1021BF4BB98FB3FBFA40DC1322" style="OLC">
<paragraph id="H43C95EB23DF6468F94E4CCCC35B7D1FD"><enum>(12)</enum><header>Short form
reports of condition for community banks</header>
<subparagraph id="HD88F9CB907A24AE58822272D22434C44"><enum>(A)</enum><header>In
general</header><text>With respect to reports of condition required under
paragraph (3) for each calendar quarter, an insured depository institution
described in subparagraphs (A), (B), (C), and (D) of section 10(d)(4) may
submit a short form of any such report of condition in 2 nonsequential quarters
of any calendar year.</text>
</subparagraph><subparagraph id="H7DD6CBA2DC6D43E8A24CEC348B269100"><enum>(B)</enum><header>Short form
defined</header><text>The term <term>short form</term>, when used in connection
with any report of condition required under paragraph (3), means a report of
condition in a format established by the appropriate Federal banking agency,
after notice and opportunity for comment, that—</text>
<clause id="H01C48E8524C84DBA92BA54321EBB841C"><enum>(i)</enum><text>is
significantly and materially less burdensome for the insured depository
institution to prepare than the format of the report of condition required
under paragraph (3); and</text>
</clause><clause id="H00E1F285BD4448CDB44508F3C15C2259"><enum>(ii)</enum><text>provides
sufficient material information for the appropriate Federal banking agency to
assure the maintenance of the safe and sound condition of the depository
institution and safe and sound
practices.</text>
</clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H5E5A92A15149455BAE83EB40C364BFC5"><enum>(b)</enum><header>Regulations</header><text>Any
regulation required to carry out the amendment made by subsection (a) shall be
published in final form before the end of the 6-month period beginning on the
date of the enactment of this Act.</text>
</subsection></section><section id="HE85BD0A6EC2B4D50A12959CCC10001F"><enum>102.</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 at the end the following new
subsection:</text>
<quoted-block display-inline="no-display-inline" id="H376476769AF74829867B613FCFA67300" style="OLC">
<subsection id="H46AF768797AD44E9A96F311B18446228"><enum>(c)</enum><header>Community bank
exemption</header>
<paragraph id="H67D87EBFBCB442C18C6DB440967769C"><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="H0BCA90D4B4B4455784EDFD45711682C4"><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 display-inline="no-display-inline" id="H00EBC4BB606D4F8F9C4B1529E958C01D" section-type="subsequent-section"><enum>103.</enum><header>Changes required to
small bank holding company policy statement on assessment of financial and
managerial factors</header>
<subsection id="HAF115D55F90E4C63B31B981B9E454442"><enum>(a)</enum><header>Small bank
holding company policy statement on assessment of financial and managerial
factors</header>
<paragraph id="H77C5A064A7AA4B67875B976146E0F78D"><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="HF166F267007B4C31B8E15EA7A5BA5D05"><enum>(A)</enum><text>is not engaged in
any nonbanking activities involving significant leverage; and</text>
</subparagraph><subparagraph id="H8A8A4C4C60814D8B996339338E60B6CE"><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="H3BEE59BCDBFC4B6FAF6FCEF324525FD1"><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
insured depository institutions, as determined by the Board.</text>
</paragraph></subsection><subsection commented="no" id="H56565F85B1DB4CC79113397B32FCAD61"><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="H35C152EC7F864FE7B4C06D8D00071EF6"><enum>104.</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 at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HF799A9C78D944F5D82891E9200F894A6" style="OLC">
<subsection id="HC06B50F8A1C041AE9F2045D61BD19DCF"><enum>(d)</enum><header>Community bank
protection</header>
<paragraph id="HA865609594004ED7B688D80705268B03"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">The prohibition on
advances in subsection (a)(5) shall not apply to a bank with total assets, on a
consolidated basis, of less than $1,000,000,000.</text>
</paragraph><paragraph id="HED2D11405ACE46BBB95069DEA529B260"><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="H76FA96463BBF4EDCA013F3526D9961B7"><enum>105.</enum><header>Updating the
amount of small bank exception for cap on aggregate loans to
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="H7E6BD3A7BD4B47DAB5CCF915063C7C7B"><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>;</text>
</paragraph><paragraph id="HAE7E5654BBE54D19AAA054FC97EC08D"><enum>(2)</enum><text>by
striking <quote>2 times</quote> and inserting <quote>4 times</quote>;
and</text>
</paragraph><paragraph id="H0800F8B9560343D9987FF3F9BA74736"><enum>(3)</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="H3C97091EACD44A94A08DF3208EF02E5"><enum>106.</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 that term is
defined in section 3 of the Federal Deposit Insurance Act), the appropriate
Federal banking agency (as that term is 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="HED51AFFDB50C46F3B0593463DCFB9479"><enum>107.</enum><header>Increase in
shareholder registration threshold</header><text display-inline="no-display-inline">Subsection (g) of section 12 of the
Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78l">15 U.S.C. 78l(g)</external-xref>) is amended by
striking <quote>instrumentality of interstate commerce shall—</quote> and all
that follows through <quote>register such security by filing</quote> and
inserting <quote>instrumentality of interstate commerce and which has total
assets exceeding $1,000,000 and a class of equity security (other than an
exempted security) held of record by more than 1,000 persons shall register
such security by filing</quote>.</text>
</section><enum>II</enum><header>Additional
Regulatory Relief for Community Banks and their Customers</header>
<section id="H395E7E47EF084A1D001D6409A1E1C2B"><enum>201.</enum><header>Enhance customer
capital access</header>
<subsection id="H4BC14EF6DF884959A45DA40078266944"><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="H109C56EAE50F44AB8E3D00DF4057C442"><enum>(1)</enum><text>by striking
<quote>The Board may</quote> and
inserting</text>
<quoted-block display-inline="yes-display-inline" id="HA2080817D76241E7A0C976A3BDBCF5B" style="OLC">
<text><header-in-text level="subsection" style="OLC">Waivers of rescission
rights.—</header-in-text></text><paragraph id="HCD7140363A3A4C96A0ACF104C1C0084"><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="H7BC88367B6BE4FC691A77000B132D419"><enum>(2)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H96D842236E164579B916FA7DC6B13111" style="OLC">
<paragraph id="HB25CE4404AEF4B7E805812C8DEB162FE"><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="H4BF4F7C364D14779A733B3C3D047479C"><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="H9931E448636049F3A47700DE7E2FB44E"><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 display-inline="no-display-inline" id="H0154CB0B7D444A3AA61519D947D3B6FE" style="OLC">
<paragraph id="H2E8120A979EC46EBB86970373500E764"><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="H6A88EA676CC54E3D8770E102F085D0A7"><enum>202.</enum><header>Seasoned
customer CTR exemption</header>
<subsection id="HF6AF6CF777D94441BED4E75C96008E62"><enum>(a)</enum><header>Short
title</header><text>This section may be cited as the <quote>Seasoned Customer
CTR Exemption Act of 2007</quote>.</text>
</subsection><subsection id="H3F1A290895634291AC19BA4800DCEE64"><enum>(b)</enum><header display-inline="yes-display-inline">Seasoned Customer
Exemption</header><text><external-xref legal-doc="usc" parsable-cite="usc/31/5313">Section 5313(e)</external-xref> of title 31, United
States Code, is amended to read as follows:</text>
<quoted-block id="HEE98D38A9AEA478FB8F0EB45FFF6BD05" style="OLC">
<subsection display-inline="no-display-inline" id="H43B8514AE4C3410DB387431F9C72A3BB"><enum>(e)</enum><header>Qualified
Customer Exemption</header>
<paragraph id="H2E08A8A74AD843658700A043897025F"><enum>(1)</enum><header>In
general</header><text>Before the end of the 270-day period beginning on the
date of the enactment of the Seasoned Customer CTR Exemption Act of 2007, the
Secretary of the Treasury shall prescribe regulations that exempt any
depository institution from filing a report pursuant to this section in a
transaction for the payment, receipt, or transfer of United States coins or
currency (or other monetary instruments the Secretary of the Treasury
prescribes) with a qualified customer of the depository institution.</text>
</paragraph><paragraph id="HDA3A4C0CC9824E92B62F6C7B30B008EB"><enum>(2)</enum><header>Qualified
customer defined</header><text>For purposes of this section, the term
<term>qualified customer</term>, with respect to a depository institution, has
such meaning as the Secretary of the Treasury shall prescribe, which shall
include any person that—</text>
<subparagraph id="H0313815504B848F400ED2EB146064800"><enum>(A)</enum><text>is incorporated or
organized under the laws of the United States or any State, including a sole
proprietorship (as defined in 31 C.F.R. 103.22(d)(6)(vii), as in effect on May
10, 2006), or is registered as, and eligible to do business within, the United
States or a State;</text>
</subparagraph><subparagraph id="H8C1F69E4B46D405DA3DFD67FED069600"><enum>(B)</enum><text>has maintained a
deposit account with the depository institution for at least 12 months;
and</text>
</subparagraph><subparagraph id="H1C10AB28ECBA483A8EAD16FD69EA0048"><enum>(C)</enum><text>has engaged, using
such account, in multiple currency transactions that are subject to the
reporting requirements of subsection (a).</text>
</subparagraph></paragraph><paragraph id="H460AB036250243DC8937A2545B793CC6"><enum>(3)</enum><header>Regulations</header>
<subparagraph id="H1669398987A843EEA4AA541047EF9358"><enum>(A)</enum><header>In
general</header><text>The Secretary of the Treasury shall prescribe regulations
requiring a depository institution to file a 1-time notice of designation of
exemption for each qualified customer of the depository institution.</text>
</subparagraph><subparagraph id="H082C1EABD1244190B6AD526828A15615"><enum>(B)</enum><header>Form and content
of exemption notice</header><text>The Secretary shall by regulation prescribe
the form, manner, content, and timing of the qualified customer exemption
notice and such notice shall include information sufficient to identify the
qualified customer and the accounts of the customer.</text>
</subparagraph><subparagraph id="H2C05FA68FDB74244B4BD5B43417009E"><enum>(C)</enum><header>Authority of
secretary</header>
<clause id="H192C45BA2315437683D8CB71331778EA"><enum>(i)</enum><header>In
general</header><text>The Secretary may suspend, reject, or revoke any
qualified customer exemption notice, in accordance with criteria prescribed by
the Secretary by regulation.</text>
</clause><clause id="H4008F698D8C74213AEEA5EB85900484D"><enum>(ii)</enum><header>Conditions</header><text>The
Secretary may establish conditions, in accordance with criteria prescribed by
regulation, under which exempt qualified customers of an insured depository
institution that is merged with or acquired by another insured depository
institution will continue to be treated as designated exempt qualified
customers of the surviving or acquiring
institution.</text>
</clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H9062DFAF4F754589ADECA8A7326B2004"><enum>(c)</enum><header>Periodic review
of reporting threshold and adjustment for inflation</header><text>Section 5318
of title 31, United States Code, is amended by adding at the end the following
new subsection:</text>
<quoted-block id="H8746A8B6BBC94E109244761DE3D655DB" style="OLC">
<subsection id="HC67508A78E4942AFBDF5F4A28BB57FD4"><enum>(o)</enum><header>Periodic review
of reporting threshold and adjustment for inflation</header>
<paragraph id="HF66021399F5C41798EE5F9BA05F70078"><enum>(1)</enum><header>In
general</header><text>Before the end of the 90-day period beginning on the date
of the enactment of the Seasoned Customer CTR Exemption Act of 2007, and at
least every 5 years after the end of such period, the Secretary of the Treasury
shall—</text>
<subparagraph id="HB59B360914D24FD68F7CB3600416604"><enum>(A)</enum><text>review the
continuing appropriateness, relevance, and utility of each threshold amount or
denomination established by the Secretary, in the Secretary’s discretion, for
any report required by the Secretary under this subchapter; and</text>
</subparagraph><subparagraph id="H92823E892FF543B88B9E80633B3C29EA"><enum>(B)</enum><text>adjust each such
amount, at such time and in such manner as the Secretary considers appropriate,
for any inflation that the Secretary determines has occurred since the date any
such amount was established or last adjusted, as the case may be.</text>
</subparagraph></paragraph><paragraph id="HD709ABC207D94524A67F4E5FEF848563"><enum>(2)</enum><header>Report</header><text>Before
the end of the 60-day period beginning upon the completion of any review by the
Secretary of the Treasury under paragraph (1), the Secretary shall submit a
report to the Congress containing the findings and conclusions of the Secretary
in connection with such review, together with an explanation for any
adjustment, or lack of adjustment, of any threshold amount or denomination by
the Secretary as a result of such review, including the adjustment for
inflation.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section display-inline="no-display-inline" id="HD6163BD9A34941649237BF86D15EB1C6" section-type="subsequent-section"><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
subsections:</text>
<quoted-block display-inline="no-display-inline" id="H67B5AE3533BA482CA8CEFF788C382DE0" style="OLC">
<subsection id="H8DE4B28E1172432283CEDDA8F1005202"><enum>(f)</enum><header>Exception to
annual notice requirement</header><text display-inline="yes-display-inline">A
financial institution that—</text>
<paragraph id="HEADFAF698DF542FCA807528FCB6FCA46"><enum>(1)</enum><text display-inline="yes-display-inline">provides nonpublic personal information
only in accordance with the provisions of subsection (b)(2) or (e) of section
502 or regulations prescribed under section 504(b);</text>
</paragraph><paragraph id="HB47D1E163F8341A19EC78B635DAAEB3"><enum>(2)</enum><text>does not share
information with affiliates under section 603(d)(2)(A) of the Fair Credit
Reporting Act; and</text>
</paragraph><paragraph id="H210134F55A084FD4BF706709B6AA7F44"><enum>(3)</enum><text display-inline="yes-display-inline">has not changed its policies and practices
with regard to disclosing nonpublic personal information from the policies and
practices that were disclosed in the most recent disclosure sent to consumers
in accordance with this subsection,</text>
</paragraph><continuation-text continuation-text-level="subsection">shall not
be required to provide an annual disclosure under this subsection until such
time as the financial institution fails to comply with any criteria described
in paragraph (1), (2), or (3).</continuation-text></subsection><subsection id="H64D682E506364EA3B126D700C11298E7"><enum>(g)</enum><header>Exception to
notice requirement</header><text display-inline="yes-display-inline">A
financial institution shall not be required to provide any disclosure under
this section if—</text>
<paragraph id="H1A6BE395F10D4682AEB7D67D41CAA9DA"><enum>(1)</enum><text display-inline="yes-display-inline">the financial institution is licensed by a
State and is subject to existing regulation of consumer confidentiality that
prohibits disclosure of nonpublic personal information without knowing and
expressed consent of the consumer in the form of laws, rules, or regulation of
professional conduct or ethics promulgated either by the court of highest
appellate authority or by the principal legislative body or regulatory agency
or body of any State of the United States, the District of Columbia, any
territory of the United States, Puerto Rico, Guam, American Samoa, the Trust
Territory of the Pacific Islands, the Virgin Islands, or the Northern Mariana
Islands; or</text>
</paragraph><paragraph id="HC7481E6CBFDB4EFFA584C0EDC454759"><enum>(2)</enum><text display-inline="yes-display-inline">the financial institution is licensed by a
State and becomes subject to future regulation of consumer confidentiality that
prohibits disclosure of nonpublic personal information without knowing and
expressed consent of the consumer in the form of laws, rules, or regulation of
professional conduct or ethics promulgated either by the court of highest
appellate authority or by the principal legislative body or regulatory agency
or body of any State of the United States, the District of Columbia, any
territory of the United States, Puerto Rico, Guam, American Samoa, the Trust
Territory of the Pacific Islands, the Virgin Islands, or the Northern Mariana
Islands.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H904110F4E08C47A996763D6154CC5D94"><enum>204.</enum><header>Privacy
protection of consumer reports during loan application</header><text display-inline="no-display-inline">Section 604(c) of the Fair Credit Reporting
Act (<external-xref legal-doc="usc" parsable-cite="usc/15/1681b">15 U.S.C.
1681b(c)</external-xref>) is amended by adding at the end the following new
paragraph</text>
<quoted-block display-inline="no-display-inline" id="H34EE0449EE1F40C9B4220055B68E5EE2" style="OLC">
<paragraph id="H2616F94DF2284E0C9163C913C139E7BB"><enum>(4)</enum><header>Report prompted
by a request for a consumer report from another creditor prohibited</header>
<subparagraph id="H0D491C3A05034B169CC6105FC7328EA5"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">A consumer reporting
agency shall not furnish a consumer report if such action is prompted by a
request for a consumer report from another creditor unless approved in writing
by the consumer.</text>
</subparagraph><subparagraph id="H067D2A8753FE4C7DA6B87E4674EE2167"><enum>(B)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Commission shall prescribe regulations
in final form to enforce this paragraph before the end of the 180-day period
beginning on the date of the enactment of the Communities First
Act.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H0D7BDB1E73974F60B0FC21493B1D0133"><enum>205.</enum><header>Update 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 (12
U.S.C. 375a) is amended by inserting after paragraph (8) the following new
paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H10FA91F347F549CCB3334F9B0238AC35" style="OLC">
<paragraph id="HE477D40C5479448186D2D11E7ECC73CF"><enum>(9)</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><section id="HB91F58F18A004044B254C745786F5D6D"><enum>206.</enum><header>Reimbursement
for production of mandated records</header>
<subsection id="HE3389CDC0ED2477F00BCA755DBBCDDE1"><enum>(a)</enum><header>Corporate
Records</header><text display-inline="yes-display-inline">Section 1101(4) of
the Right to Financial Privacy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/12/3401">12 U.S.C. 3401(4)</external-xref>) is amended by
inserting <quote>, except that, for purposes of section 1115, such term
includes any entity</quote> after <quote>fewer individuals</quote>.</text>
</subsection><subsection id="H3ABFB196EBAB4F98B29DE6A815159C1D"><enum>(b)</enum><header>Clarification of
scope</header><text display-inline="yes-display-inline">Section 1115(b) of the
Right to Financial Privacy Act of 1978 (<external-xref legal-doc="usc" parsable-cite="usc/12/3415">12 U.S.C. 3415</external-xref>) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="H49ECBBC90C3248AB8EA88795492580AA" style="OLC">
<subsection id="H3AEC4A68B30840EB8BB98B1157C727A0"><enum>(b)</enum><header>Clarification of
scope</header><text display-inline="yes-display-inline">Notwithstanding the
introductory clause to the first sentence of subsection (a), this section shall
apply to all records required to be assembled or provided for any Federal law
enforcement or investigative
purpose.</text>
</subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H20F01901FC3A45C1ABD73B81D1D8E5DD"><enum>207.</enum><header>Study by the
Comptroller General on implementation of commercial real estate
guidance</header><text display-inline="no-display-inline">The Comptroller
General shall conduct a study on the implementation, by any Federal banking
agency, of examiner guidance on concentrations in commercial real estate
lending, including the impact on—</text>
<paragraph id="H111FED447FDB41D0ACA2F059AC515034"><enum>(1)</enum><text display-inline="yes-display-inline">local economies;</text>
</paragraph><paragraph id="HE5BDDCA4BCF444A9A2CAF4C943FBF5D6"><enum>(2)</enum><text>the regulatory
burden on banks</text>
</paragraph><paragraph id="H47639D22A51E41A48E8F1E42DC4881D"><enum>(3)</enum><text>community bank
portfolios; and</text>
</paragraph><paragraph id="H6279A72FB6F6479F9BFE06CA0931F0B0"><enum>(4)</enum><text>community banks’
market share.</text>
</paragraph></section><enum>III</enum><header>Tax
Relief for Bank Depositors, Rural Banks, Municipalities, Banks Organized as
Limited Liability Companies, Individual Savers, and Small Businesses</header>
<section id="H9402415568044D7982B600379376F314" section-type="subsequent-section"><enum>301.</enum><header>Reduced rate and
deferral of income recognition on long-term certificates of deposit</header>
<subsection id="HB9D308F2C654405C80D5AFE1BEAFEAEC"><enum>(a)</enum><header>Deferral of
income recognition</header><text>Section 451 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 display-inline="no-display-inline" id="H8227561A1AF641A99EEE00B5D85ED7F2" style="OLC">
<subsection id="H359F4A203D9545D4BDABAE42BBA99EE"><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="H3292ED913F9740B386ED713C478DD6C0"><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 display-inline="no-display-inline" id="H86681BC558324EC095C573A8619BD6D9" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="subparagraph">increased by—</quoted-block-continuation-text><clause id="HA6A183FF927048958D4F1B50FF00BEDF"><enum>(i)</enum><text>qualified dividend
income, and</text>
</clause><clause id="HC154C3EEC59443CC8062508ECBA22CFD"><enum>(ii)</enum><text>interest income
on any nonnegotiable certificate of deposit—</text>
<subclause id="H4B4A82CAF8BC4EA0ABF970B1FFA6DC19"><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="H59892D3565D4405D94393664BF9DC86F"><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="HE8934A1F5F8E47AFAB5EF33EAA8877B0"><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="H65B96AF3CC7146DE8C00DB5BFE4C6DD8"><enum>302.</enum><header>Exclusion for
interest on loans secured by agricultural real property</header>
<subsection id="H6BFCA327D09F4C7400A0D65700006143"><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 display-inline="no-display-inline" id="H12617465AB7D457CA000C75E76757714" style="OLC">
<section id="H7F2A43B6CB1749A990B04352E1522622"><enum>139B.</enum><header>Interest on
loans secured by agricultural real property</header>
<subsection id="H2D4CE15E4A204F66AD38917B91D7EAEF"><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="H4E0C2D1F1A17476DBE83009CE77ED000"><enum>(b)</enum><header>Definitions</header><text>For
purposes of this section:</text>
<paragraph id="H81D3C823613C4047AEBFEF772B5B2F0"><enum>(1)</enum><header>Qualified
lender</header><text display-inline="yes-display-inline">The term
<term>qualified lender</term> 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.).</text>
</paragraph><paragraph id="H41A16504D7264FD4BD008B31C7139961"><enum>(2)</enum><header>Qualified real
estate loan</header><text display-inline="yes-display-inline">The term
<term>qualified real estate loan</term> 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="H78EAB8E95DD1404A8CB4F2B8092B3B24"><enum>(3)</enum><header>Agricultural
real estate</header><text>The term <term>agricultural real estate</term>
means—</text>
<subparagraph id="H9D74D08D8C2C411390C6979952F8E04C"><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="H3457810E08554B47AFC37FDCD92403B9"><enum>(B)</enum><text>any single family
residence—</text>
<clause id="H4F3A099EBA45476D0098EAD4B6AEBBF2"><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="H8757F5900DA64D34887D19A42F001971"><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="H5A93E4A75F2243DFABF07FDA5CE6E7D"><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="H707E6D2DDB644A1395187065009D28FB"><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="HE87C0AF5D827491E8E6591E34440CF6C"><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>
<quoted-block display-inline="no-display-inline" id="H53731F371E1E4EB081D96C77FE00459E" style="OLC">
<toc regeneration="no-regeneration">
<toc-entry level="section">Sec. 139B. Interest on loans secured by
agricultural real
property.</toc-entry>
</toc>
<after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection display-inline="no-display-inline" id="H02C16C0BC779460785FC82FC07A96D4F"><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="H08C23505CBD04F63A54D3F35AEF0C515"><enum>303.</enum><header>Update in cap
on qualified small issue bonds</header>
<subsection id="HAA1085D897D8437783748B533B1DD089"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Clause (i) of section
144(a)(4)(A) 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="H139988793F6D4986A10092A26250D0B3"><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 display-inline="no-display-inline" id="H5E4CB93319F74D8B91B7863FE47BBC7E" style="OLC">
<paragraph id="HFFE695C73ACB44C584005175EE1E31D3"><enum>(12)</enum><header>Inflation
adjustment</header><text display-inline="yes-display-inline">In the case of a
calendar year after 2007, the $30,000,000 amount contained in paragraph
(4)(A)(i) shall be increased by an amount equal to—</text>
<subparagraph id="H1E349E5FC7C749EA97B390D947829CB"><enum>(A)</enum><text>such dollar amount,
multiplied by</text>
</subparagraph><subparagraph id="HAE83305D02BB41CBAC9B00EE33FD6800"><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 2006</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="H51B02F69E87C4035BCD07F93C3EFB520"><enum>(c)</enum><header>Conforming
amendment</header><text>Paragraph (4) of section 144(a) of such Code is amended
in the heading by striking <quote><header-in-text level="paragraph" style="OLC">$10,000,000</header-in-text></quote> and inserting
<quote><header-in-text level="paragraph" style="OLC">$30,000,000</header-in-text></quote>.</text>
</subsection><subsection id="HE1820D227278488E0034FB7B14946CE9"><enum>(d)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to—</text>
<paragraph id="HE7AA7F275D07428E9E22A197E6FE89F5"><enum>(1)</enum><text>obligations issued
after the date of the enactment of this Act, and</text>
</paragraph><paragraph id="H8B0ECEEB5CCB4D1E982C91B231DE307E"><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="H8E56AF1CE7994F8D84FF0020B8321233"><enum>304.</enum><header>Limited
liability company tax treatment for FDIC-insured limited liability
companies</header>
<subsection id="HE5EC4422008A4AE29C51A9B5B7CCD4C1"><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 display-inline="no-display-inline" id="H62F109EE2E124960A441BF249E5DB5AF" style="OLC">
<paragraph id="HDE42C9402E924131B9B12B00EF2F0487"><enum>(2)</enum><header>Partner and
partnership</header>
<subparagraph id="HF9DBAFC5CD8C490291A72CA1D541E207"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The term
<term>partnership</term> 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
<term>partner</term> includes a member in such a syndicate, group, pool, joint
venture, or organization.</text>
</subparagraph><subparagraph id="HEF636E4C64D946D98FCE20FAEA183359"><enum>(B)</enum><header>Election by
certain banks to be taxed as partnerships</header>
<clause id="H5F4DE764841A46A9AA7B93C6AE671EEB"><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="H8B9D3538D6E64A139C6BAEEC6C6FF1F3"><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="HCCD642D585364D04B237223778BF2113"><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="HE243634E72754786A016B39CEC5BB807"><enum>(II)</enum><text>section 1374
shall apply to the entity after such election.</text>
</subclause></clause><clause id="HAFF324E4E3394F82BB3333F224E5A4CD"><enum>(iii)</enum><header>Eligible
corporation</header><text display-inline="yes-display-inline">The term
<term>eligible corporation</term> 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="HCC69E890ABD14EFBAF9D05E1A488B062"><enum>(I)</enum><text>Any bank (as
defined in section 581).</text>
</subclause><subclause id="H1B517B7A1C81442D92E491A71335F708"><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 (12 U.S.C.
1841(a))).</text>
</subclause><subclause id="H45D813D024514BE8ADCE202ED987D005"><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="H6E8EE8AC93CC4D26A62CDAC020EDD948"><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="H72D3887337344041AC751D25939B01B0"><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><section id="HCBAE465F06C94AAEA2F312007D4D179C"><enum>305.</enum><header>Repeal of
individual alternative minimum tax</header>
<subsection id="H0548C34A6F7D4E99A4F394FEE0737F03"><enum>(a)</enum><header>In
general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/55">Section 55(a)</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 flush sentence:</text>
<quoted-block display-inline="no-display-inline" id="H1A17E6DD0A374352AD5BA9BCC1A9E151" style="OLC">
<quoted-block-continuation-text quoted-block-continuation-text-level="section">Except in
the case of a corporation, no tax shall be imposed by this section for any
taxable year beginning after December 31, 2007, and the tentative minimum tax
of any taxpayer other than a corporation for any such taxable year shall be
zero for purposes of this
title.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="HA60C384611134339B889DDCB56F2B33C"><enum>(b)</enum><header display-inline="yes-display-inline">Modification of limitation on use of credit
for prior year minimum tax liability</header><text display-inline="yes-display-inline">Subsection (c) of section 53 of the
Internal Revenue Code of 1986 (relating to credit for prior year minimum tax
liability) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H4792A786BA704DC9A0725C1196CFED3E" style="OLC">
<subsection commented="no" display-inline="no-display-inline" id="H96B5F2F3151A4DF9926D3DFD47895146"><enum>(c)</enum><header display-inline="yes-display-inline">Limitation</header>
<paragraph commented="no" display-inline="no-display-inline" id="HFE231F199543469FB664E6C315477958"><enum>(1)</enum><header display-inline="yes-display-inline">In general</header><text display-inline="yes-display-inline">Except as provided in paragraph (2), the
credit allowable under subsection (a) for any taxable year shall not exceed the
excess (if any) of—</text>
<subparagraph commented="no" display-inline="no-display-inline" id="HBE9FBD484A64409F9B7E8DC2FA6FAD9B"><enum>(A)</enum><text display-inline="yes-display-inline">the regular tax liability of the taxpayer
for such taxable year reduced by the sum of the credits allowable under
subparts A, B, D, E, and F of this part, over</text>
</subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="H7750B98ADBA949B59400E507DB49F886"><enum>(B)</enum><text display-inline="yes-display-inline">the tentative minimum tax for the taxable
year.</text>
</subparagraph></paragraph><paragraph commented="no" display-inline="no-display-inline" id="H599AFFFB1E984594BDB5C10EB307580"><enum>(2)</enum><header display-inline="yes-display-inline">Taxable years beginning after
2007</header><text display-inline="yes-display-inline">In the case of any
taxable year beginning after 2007, the credit allowable under subsection (a) to
a taxpayer other than a corporation for any taxable year shall not exceed 90
percent of the regular tax liability of the taxpayer for such taxable year
reduced by the sum of the credits allowable under subparts A, B, D, E, and F of
this
part.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HB5FBBDBF0DFA43F3AEC6CC0300427022"><enum>(c)</enum><header>Effective
date</header><text>The amendment made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section id="H2DAC3BE405B24890A161C97EAAFF381B"><enum>306.</enum><header>Young savers
accounts</header>
<subsection id="H05A2D4F704DA4810843F26EC6DC3E3E4"><enum>(a)</enum><header>In
general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/408A">Section 408A</external-xref> of the Internal
Revenue Code of 1986 (relating to Roth IRAs) is amended by adding at the end
the following new subsection:</text>
<quoted-block id="HEB90B0F00EFA45188C25236CCEFE3F69">
<subsection id="H11E30ECCE4AE44FDABF13047A91853A"><enum>(g)</enum><header>Special rules for
Roth IRAs for children</header>
<paragraph id="H69CE62D88E8A499F9093C8F181FBE900"><enum>(1)</enum><header>General
rule</header><text display-inline="yes-display-inline">A Roth IRA maintained
for the benefit of an individual who has not attained age 25 before the close
of the taxable year shall be maintained under this section, as modified by this
subsection.</text>
</paragraph><paragraph id="H92268001454A4D73BA9CB2918C95BCF"><enum>(2)</enum><header>Contribution
limits</header>
<subparagraph id="HB206015E6103431299A2D3704D7F7C8"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">For so long as a Roth
IRA is subject to this subsection, contributions to such Roth IRA shall be
subject to this paragraph and not to subsection (c)(2), and subsection (c)(3)
shall not apply.</text>
</subparagraph><subparagraph id="H60FF7A48EB5246B6BEE51D39DDBE33D"><enum>(B)</enum><header>Limit</header><text>The
aggregate amount of contributions for any taxable year to all child Roth IRAs
maintained for the benefit of an individual under this subsection shall not
exceed the maximum amount allowable as a deduction under subsection (b)(1) of
section 219 for such taxable year (computed without regard to subsections
(b)(1)(B), (d)(1), and (g) of such
section).</text>
</subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H7DF218AE29814FD9AC009EE56B15AF00"><enum>(b)</enum><header>Enforcement of
contribution limits</header><text display-inline="yes-display-inline">Paragraphs (1)(B) and (2)(B) of section
4973(f) of such Code are each amended by striking <quote>and (c)(3)</quote> and
inserting <quote>, (c)(3), and (f)(2)</quote>.</text>
</subsection><subsection id="H55042C598FE640B6B9DB71C906FC6E8C"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H75BA8564AE3B47A7BDD9F17BB536A61C" section-type="subsequent-section"><enum>307.</enum><header>Section 179
expensing for small business</header><text display-inline="no-display-inline">Subsections (b)(1), (b)(2), (b)(5), (c)(2),
and (d)(1)(A)(ii) of section 179(b) (relating to election to expense certain
depreciable business assets) are each amended by striking <quote>and before
2010</quote>.</text>
</section><enum>IV</enum><header>Tax
Relief for Community Banks and Holding Companies</header>
<section id="H47F65102F5F547DDB99BDD52688E4939"><enum>401.</enum><header>Limited tax
credit</header>
<subsection id="H677646E13F7C4D03AA84769E04CD2451"><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 display-inline="no-display-inline" id="HF9A35C3B5C9F4853B58500773286D75B" style="OLC">
<subsection id="H329A906BD854455FAF31D432906D77EF"><enum>(e)</enum><header>Reduction of tax
on community banks</header>
<paragraph id="H2A2E0DB27A754137B125F8DC1E1657E7"><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="H8DDC544FC19F470B85E015D9B614BF53"><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="H35D38DFDF7984C098574665B8D99D346"><enum>(3)</enum><header>Increased
benefit for banks operating in distressed areas, etc</header>
<subparagraph id="H26747C138F8D4ECB8C2FA92133E85800"><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="HEF1CB48747604E6FA4EC724507D1CC33"><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="H436D326CDBDB4C6686AF852B5F6FD0DE"><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="HBE107E44386946E8B2D8A7F8AF135C7C"><enum>(B)</enum><header>Areas
described</header><text>The areas referred to in this subparagraph are—</text>
<clause id="H5A52E0777FD74A99B41C487F365181AC"><enum>(i)</enum><text>empowerment zones
and enterprise communities designated under section 1391,</text>
</clause><clause id="H2D412184690946768931167E2B85A56E"><enum>(ii)</enum><text>renewal
communities designated under section 1400E,</text>
</clause><clause id="H7A55E2BB8CC745E79FBC8ED74DE29500"><enum>(iii)</enum><text>low-income
communities (as defined in section 45D(e)), and</text>
</clause><clause id="HBAC3377075924996A548AB34A99EA8B2"><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="H32B2E95C09DD4EB792CD1B31029602A9"><enum>(4)</enum><header>Community
bank</header><text display-inline="yes-display-inline">For purposes of this
section, the term <term>community bank</term> 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="H378A1C7615C844E9A8C08944B90213FA"><enum>(A)</enum><text>Any bank (as
defined in section 581).</text>
</subparagraph><subparagraph id="H33F2F64D253E41BBA27B00204317EAFC"><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 (12 U.S.C.
1841(a))).</text>
</subparagraph><subparagraph id="HBEEC54A3727C4630943C32EAB6A9DD06"><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="H52A119B145E24646003F243CA36C00C1"><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="H5D8F495C5259495590498111AB46FAB3"><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 display-inline="no-display-inline" id="HB32FC074AFB2480199FE323C3DF006F4" style="OLC">
<paragraph id="HCC73995E12ED47B5BD69DF807F8FF100"><enum>(3)</enum><header>Reduction of tax
on community banks</header>
<subparagraph id="H2C1EC4B0A88D4359959BE72550FA6FCC"><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="H2C4DF000DE6D4F46A4A45298C869CA91"><enum>(i)</enum><text>20
percent of such net amount, or</text>
</clause><clause id="HFC3752FD328C4EB8A00142FA932BA92F"><enum>(ii)</enum><text>$1,250,000.</text>
</clause></subparagraph><subparagraph id="H904BC3DE128640EDA577B23DD44763F0"><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="H257D092ADA7744B10049B28D083566A6"><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="HAC07C5365A1A4D7800D25773989CBC7B"><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="HB0BE57A53C38472EB0D573AFAF284254"><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="HDF6D87B5259E47A2B9C4CC0065F29ED4"><enum>402.</enum><header>Community bank
relief from minimum tax</header>
<subsection id="HB2B3E96C1BB2411B8F699636B696FDF"><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 display-inline="no-display-inline" id="HEC5D1B2B677443F6B1F9C41B1DA4BC40" style="OLC">
<subsection id="HE6AACB1730744B5D9E7DAB649CEEED62"><enum>(f)</enum><header>Exemption for
community banks</header>
<paragraph id="H70E35F4D96434F4DA6222128906EEBCE"><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="HD27F02C3A8A84314A6A6BEACD09B4896"><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="H294DC607B3894F64BCB04B33ACE3A584"><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><enum>V</enum><header>Small
Business Subchapter S Reforms</header>
<section id="H84EEF8FB985B40AA9E93F776491FD74E"><enum>501.</enum><header>Increasing
Shareholder Limit for Subchapter S to 150</header>
<subsection id="H2078E5B69A5249D19C36E0BD44DD0EA"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Section 1361(b)(1)(A)
of the Internal Revenue Code of 1986 (defining small business corporation) is
amended by striking <quote>100</quote> and inserting <quote>150</quote>.</text>
</subsection><subsection id="HDA7F4A27284044A2AFC29B5C3366A656"><enum>(b)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendment made by
this section shall apply to taxable years beginning after December 31,
2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H3D3811308BE54847B145FDD804449AA"><enum>502.</enum><header>Issuance of
preferred stock permitted for subchapter S corporations</header>
<subsection id="H1E93247383544676BC7C7F6E72BCB4FB"><enum>(a)</enum><header>In
general</header><text>Section 1361 of such Code (defining S corporation) is
amended by adding at the end the following new subsection:</text>
<quoted-block id="H83E604A13B3D402EB5FE6DA08905E92">
<subsection id="H0EEAE65D65C6495283596032D7BEA0BA"><enum>(f)</enum><header>Treatment of
qualified preferred stock</header>
<paragraph id="H701AB31D374D487185FE23978B80123B"><enum>(1)</enum><header>In
general</header><text>For purposes of this subchapter—</text>
<subparagraph id="H2D3785AE411C42469D008B36BB1F3D9"><enum>(A)</enum><text>qualified preferred
stock shall not be treated as a second class of stock, and</text>
</subparagraph><subparagraph id="H0F74DDB6372741A5BBD9F0B22D8C3050"><enum>(B)</enum><text>no person shall be
treated as a shareholder of the corporation by reason of holding qualified
preferred stock.</text>
</subparagraph></paragraph><paragraph id="H2244E8BDEEC04F01B72F9E00343F17DC"><enum>(2)</enum><header>Qualified
preferred stock defined</header><text>For purposes of this subsection, the term
<term>qualified preferred stock</term> means stock which meets the requirements
of subparagraphs (A), (B), and (C) of section 1504(a)(4). Stock shall not fail
to be treated as qualified preferred stock merely because it is convertible
into other stock.</text>
</paragraph><paragraph id="H3A122708B14946B0A1006400626D2829"><enum>(3)</enum><header>Distributions</header><text>A
distribution (not in part or full payment in exchange for stock) made by the
corporation with respect to qualified preferred stock shall be includible as
ordinary income of the holder and deductible to the corporation as an expense
in computing taxable income under section 1363(b) in the year such distribution
is
received.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H35FB6BEFD5E7443BBB91289329F7D72D"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="H62A8D6CD63B246E1905BAE87724925FF"><enum>(1)</enum><text>Paragraph (1) of
section 1361(b) of such Code is amended by inserting <quote>, except as
provided in subsection (f),</quote> before <quote>which does
not</quote>.</text>
</paragraph><paragraph id="HB582F6A6A44C4BF3BF020185A305E873"><enum>(2)</enum><text>Subsection (a) of
section 1366 of such Code is amended by adding at the end the following new
paragraph:</text>
<quoted-block id="H2434C5A7E26B402DB8C69B04A31FE464">
<paragraph id="H19C4F3BA45504B62A3236773E14F8CDE"><enum>(3)</enum><header>Allocation with
respect to qualified preferred stock</header><text>The holders of qualified
preferred stock (as defined in section 1361(f)) shall not, with respect to such
stock, be allocated any of the items described in paragraph
(1).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H28BD7BBB1EBC4F699C3BDC97E6F848E4"><enum>(3)</enum><text>Clause (ii) of
section 354(a)(2)(C) of such Code is amended—</text>
<subparagraph id="id7036206C0A0741FD95758EB1B72D2D0E"><enum>(A)</enum><text>in the header by
inserting <quote><header-in-text level="clause" style="OLC">and S
corporations</header-in-text></quote> after <quote><header-in-text level="clause" style="OLC">corporations</header-in-text></quote>; and</text>
</subparagraph><subparagraph id="idF923084727864BDD96339C63CAEB4DE9"><enum>(B)</enum><text>by striking
subclause (I) and inserting the following:</text>
<quoted-block id="HFB96A6DD0BE343A89C00CFF9BA9E71B">
<subclause id="H1FDD158ABCB142F9B06B35A0449C8CC0"><enum>(I)</enum><header>In
general</header><text>Clause (i) shall not apply in the case of a
recapitalization under section 368(a)(I)(E) of a family-owned corporation or S
corporation.</text>
</subclause><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H55A146A6A2DC4A1F8182BC03B9728C3"><enum>(4)</enum><text>Subsection (a) of
section 1373 of such Code is amended by striking <quote>and</quote> at the end
of paragraph (1), by striking the period at the end of paragraph (2) and
inserting <quote>, and</quote>, and by adding at the end the following new
paragraph:</text>
<quoted-block id="HBF5434EF5A344ACCA2BEE4E54E01F709">
<paragraph id="H8950D3C58B914E16AF64004598A6A707"><enum>(3)</enum><text>no amount of an
expense deductible under this subchapter by reason of section 1361(f)(3) shall
be apportioned or allocated to such
income.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></subsection><subsection id="HABBF4445160946E8ACFBA594C6AC902C"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="HCE29B8D48E1F45AB84404175BAD93000" section-type="subsequent-section"><enum>503.</enum><header>Treatment of
qualifying director shares</header>
<subsection id="H23D5477F52154AEDA34932AF5C3D78A3"><enum>(a)</enum><header>In
general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/1361">Section 1361</external-xref> of the Internal
Revenue Code of 1986 (defining S corporation), as amended by section 502(a), is
amended by adding at the end the following new subsection:</text>
<quoted-block id="H54C6156B02A04C64B202850988A0ABBE">
<subsection id="H7B66343338E34A90B0D9AB2E83D5BB56"><enum>(g)</enum><header>Treatment of
qualifying director shares</header>
<paragraph id="H6FACAEB24FFF4336913E07DEB9F672A0"><enum>(1)</enum><header>In
general</header><text>For purposes of this subchapter—</text>
<subparagraph id="H3EE1EBE74D3C4AB19DEF9F9650FF10F5"><enum>(A)</enum><text>qualifying
director shares shall not be treated as a second class of stock, and</text>
</subparagraph><subparagraph id="HFB5E6C3E19944B68AD5C864000090022"><enum>(B)</enum><text>no person shall be
treated as a shareholder of the corporation by reason of holding qualifying
director shares.</text>
</subparagraph></paragraph><paragraph id="H11E2FB62783A49188138B8D173B6548B"><enum>(2)</enum><header>Qualifying
director shares defined</header><text>For purposes of this subsection, the term
<term>qualifying director shares</term> means any shares of stock in a bank (as
that term is defined in section 581) or in a bank holding company registered as
such with the Federal Reserve System—</text>
<subparagraph id="H80B3912533F14851B0A2C7FE57EA2430"><enum>(A)</enum><text>which are held by
an individual solely by reason of status as a director of such bank or company
or its controlled subsidiary, and</text>
</subparagraph><subparagraph id="H4811B2C63F534812AD988DF68B2C3C22"><enum>(B)</enum><text>which are subject
to an agreement pursuant to which the holder is required to dispose of the
shares of stock upon termination of the holder’s status as a director at the
same price as the individual acquired such shares of stock.</text>
</subparagraph></paragraph><paragraph id="HA7640E3C6CE7467996DA6F60CC41B860"><enum>(3)</enum><header>Distributions</header><text>A
distribution (not in part or full payment in exchange for stock) made by the
corporation with respect to qualifying director shares shall be includible as
ordinary income of the holder and deductible to the corporation as an expense
in computing taxable income under section 1363(b) in the year such distribution
is
received.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H2FC6922A9060447C9B7784A7EB84CFB2"><enum>(b)</enum><header>Conforming
amendments</header>
<paragraph id="HA9165F0472704D6BA0007E7C368ECA97"><enum>(1)</enum><text>Section 1361(b)(1)
of the Internal Revenue Code of 1986, as amended by section 502(b), is amended
by striking <quote>subsection (f)</quote> and inserting <quote>subsections (f)
and (g)</quote>.</text>
</paragraph><paragraph id="H0E91C3D051AF43E7B64FB3E6DA1BBEAD"><enum>(2)</enum><text>Section 1366(a) of
such Code, as amended by section 502(b), is amended by adding at the end the
following new paragraph:</text>
<quoted-block id="HE3AAA29A0BCF4A96A82D90E1FF000671">
<paragraph id="H58B36BF8AF244B67AA89B67499D779FB"><enum>(4)</enum><header>Allocation with
respect to qualifying director shares</header><text>The holders of qualifying
director shares (as that term is defined in section 1361(g)) shall not, with
respect to such shares of stock, be allocated any of the items described in
paragraph
(1).</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H252C03F9807D46C4A679BE44423B6805"><enum>(3)</enum><text>Section 1373(a) of
such Code, as amended by section 502(b), is amended—</text>
<subparagraph id="id2E8D2DF8BB8245E5BE98C8BE5DA0AD6C"><enum>(A)</enum><text>by striking
<quote>and</quote> at the end of paragraph (2);</text>
</subparagraph><subparagraph id="id6381940EA7F64787A2960DAE0BB382BD"><enum>(B)</enum><text>by striking the
period at the end of paragraph (3) and inserting <quote>, and</quote>;</text>
</subparagraph><subparagraph id="idC64C3F155A22461F9F36364D74EA0E49"><enum>(C)</enum><text>and adding at the
end the following new paragraph:</text>
<quoted-block id="H992788EDCB184DA4838C4567E53EB633">
<paragraph id="H70D45F7383CF41708FA1C71E389EF33F"><enum>(4)</enum><text>no amount of an
expense deductible under this subchapter by reason of section 1361(g)(3) shall
be apportioned or allocated to such
income.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph></subsection><subsection id="H11A8BFB2B22A4A03B3A4E895D8B726D5"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after December 31, 2007.</text>
</subsection></section><section display-inline="no-display-inline" id="H71319CBF83584D7CA271B1FF7AEB01" section-type="subsequent-section"><enum>504.</enum><header>Recapture of bad
debt reserves</header><text display-inline="no-display-inline">Notwithstanding
<external-xref legal-doc="usc" parsable-cite="usc/26/481">section
481</external-xref> of the Internal Revenue Code of 1986, with respect to any S
corporation election made by any bank in taxable years beginning after December
31, 1996, such bank may recognize built-in gains from changing its accounting
method for recognizing bad debts from the reserve method under section 585 or
593 of such Code to the charge-off method under section 166 of such Code either
in the taxable year ending with or beginning with such an election.</text>
</section><enum>VI</enum><header>Small Business
Lending Enhancements</header>
<section id="HEF879896DDA64710AD2DADDB1E265CB"><enum>601.</enum><header>Reduced fees for
section 7<enum-in-header>(a)</enum-in-header> loans</header><text display-inline="no-display-inline">Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended—</text>
<paragraph id="HCE1C85B7808D4F4B84F83CC18943E8EA"><enum>(1)</enum><text>in paragraph
(23)(C)—</text>
<subparagraph id="H62B109FEC39D4209BAE29670EED24D00"><enum>(A)</enum><text>in the matter
preceding clause (i), by striking <quote>may be reduced,</quote> and all that
follows through <quote>guarantees—</quote> and inserting <quote>may be
reduced—</quote>; and</text>
</subparagraph><subparagraph id="H718502ADEE5C49D8A726BD51D181F87F"><enum>(B)</enum><text display-inline="yes-display-inline">in clause (i), by striking <quote>, to the
maximum extent possible</quote>; and</text>
</subparagraph></paragraph><paragraph id="HD8E020959E704BF1A1C44CC8A0FD4553"><enum>(2)</enum><text>by adding at the
end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HD4F2FE73CD594754BFEB472B01EF53A0" style="OLC">
<paragraph id="H8A64D44189144466AD7DA07419942F07"><enum>(32)</enum><header>Fee
reduction</header><text display-inline="yes-display-inline">Amounts
appropriated or otherwise made available to the Administrator for the purpose
of fee reduction shall be used by the Administrator to reduce the fee
percentages in effect under paragraphs (18)(A) and (23)(A), to the maximum
extent
possible.</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="HAB0C5C446CB84B599740F3BBD9C071C"><enum>602.</enum><header>Low
documentation loan program made mandatory</header><text display-inline="no-display-inline">Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) (as amended by section 601 of this title) is amended—</text>
<paragraph id="HA670D7C1D710400DA2BB58757070BA60"><enum>(1)</enum><text>in paragraph (25),
by striking subparagraph (C); and</text>
</paragraph><paragraph id="HDA4F36324D9B4B0782BC75F431D12CB6"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting after paragraph (32) (as added
by section 601(2) of this title) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H1C12204EC1EB472595B2E911EE6F659C" style="OLC">
<paragraph id="HAF7F6C8087C74CFEAEDD976D4B902276"><enum>(33)</enum><header>Low
documentation loan program</header>
<subparagraph id="HF4BCA11CAA334861B6369DF54390C9B6"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">The Administrator
shall carry out a low documentation loan program for loans of $250,000 or less
only through lenders with significant experience in making small business
loans.</text>
</subparagraph><subparagraph id="HB3060A3D62D1414E9E498B4BD7711BD1"><enum>(B)</enum><header>Regulations</header><text display-inline="yes-display-inline">Not later than 45 days after the date of
the enactment of this paragraph, the Administrator shall prescribe regulations
defining the experience necessary for participation as a lender in the low
documentation loan
program.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><section id="H8CBBBA81CEBA4338862DDE639FCE8733"><enum>603.</enum><header>Effective
date</header><text display-inline="no-display-inline">The amendments made by
sections 601 and 602 shall apply for fiscal years beginning with fiscal year
2008.</text>
</section>