[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2680 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2680

 To direct the Secretary of Commerce to establish a voluntary program 
 under which manufacturers may have products certified as meeting the 
standards of labels that indicate to consumers the extent to which the 
 products are manufactured in the United States, to amend the Internal 
 Revenue Code of 1986 to allow a credit against income tax for equity 
  investments in small business concerns, to establish small business 
               savings accounts, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2014

 Mr. Pryor (for himself and Mr. Walsh) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To direct the Secretary of Commerce to establish a voluntary program 
 under which manufacturers may have products certified as meeting the 
standards of labels that indicate to consumers the extent to which the 
 products are manufactured in the United States, to amend the Internal 
 Revenue Code of 1986 to allow a credit against income tax for equity 
  investments in small business concerns, to establish small business 
               savings accounts, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Buy it in America Act''.

SEC. 2. AMERICA STAR PROGRAM.

    (a) In General.--The Secretary of Commerce shall establish a 
voluntary program, to be known as the ``America Star Program'', under 
which manufacturers may have products certified as meeting the 
standards of labels that indicate to consumers the extent to which the 
products are manufactured in the United States.
    (b) Establishment of Labels.--
            (1) In general.--Not later than 2 years after the date of 
        the enactment of this Act, the Secretary shall, by rule--
                    (A) design America Star labels that are consistent 
                with public perceptions of the meaning of descriptions 
                of the extent to which a product is manufactured in the 
                United States; and
                    (B) specify the standards that a product shall meet 
                in order to bear a particular America Star label.
    (c) Certification of Products.--
            (1) Application procedures.--A manufacturer that wishes to 
        have a product certified as meeting the standards of an America 
        Star label may apply to the Secretary for certification in 
        accordance with such procedures as the Secretary shall 
        establish by rule.
            (2) Action by secretary.--Not later than such time after 
        receiving an application for certification under paragraph (1) 
        as the Secretary determines reasonable by rule, the Secretary 
        shall--
                    (A) determine whether the product described in the 
                application meets the standards of the requested 
                America Star label;
                    (B) if the product meets such standards, certify 
                the product; and
                    (C) notify the manufacturer of the determination 
                and whether the product has been certified.
    (d) Monitoring; Withdrawal of Certification.--
            (1) Monitoring.--The Secretary shall conduct such 
        monitoring and compliance review as the Secretary considers 
        necessary--
                    (A) to detect violations of subsection (f); and
                    (B) to ensure that products certified as meeting 
                the standards of America Star labels continue to meet 
                such standards.
            (2) Withdrawal of certification.--
                    (A) On initiative of secretary.--If the Secretary 
                determines that a product certified as meeting the 
                standards of an America Star label no longer meets such 
                standards, the Secretary shall--
                            (i) notify the manufacturer of the 
                        determination and any corrective action that 
                        would enable the product to meet such 
                        standards; and
                            (ii) if the manufacturer does not take such 
                        action within such time after receiving 
                        notification under clause (i) as the Secretary 
                        determines reasonable by rule, the Secretary 
                        shall withdraw the certification of the product 
                        and notify the manufacturer of the withdrawal.
                    (B) At request of manufacturer.--At the request of 
                the manufacturer of a product, the Secretary shall 
                withdraw the certification of the product and notify 
                the manufacturer of the withdrawal.
    (e) Consultation.--
            (1) Required consultation with federal trade commission.--
        In establishing America Star labels and operating the America 
        Star Program, the Secretary shall consult with the Federal 
        Trade Commission to ensure consistency with the requirements 
        enforced by the Commission with respect to representations of 
        the extent to which products are manufactured in the United 
        States.
            (2) Sense of congress on consultation with private-sector 
        companies.--It is the sense of Congress that, in establishing 
        America Star labels and operating the America Star Program, the 
        Secretary should consult with private-sector companies that 
        have developed labeling programs to verify or certify to 
        consumers the extent to which products are manufactured in the 
        United States.
    (f) Prohibited Conduct.--Unless a certification by the Secretary 
that a product meets the standards of an America Star label is in 
effect, a person may not--
            (1) place such label on such product;
            (2) use such label in any marketing materials for such 
        product; or
            (3) in any other way represent that such product meets, or 
        is certified as meeting, the standards of such label.
    (g) Enforcement.--
            (1) Enforcement by federal trade commission.--
                    (A) Referral.--The Secretary may refer to the 
                Federal Trade Commission any person who the Secretary 
                determines has violated subsection (f).
                    (B) Unfair or deceptive act or practice.--A 
                violation of subsection (f) shall be treated as a 
                violation of a rule defining an unfair or deceptive act 
                or practice described under section 18(a)(1)(B) of the 
                Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
                    (C) Powers of commission.--The Federal Trade 
                Commission shall enforce subsection (f) in the same 
                manner, by the same means, and with the same 
                jurisdiction, powers, and duties as though all 
                applicable terms and provisions of the Federal Trade 
                Commission Act (15 U.S.C. 41 et seq.) were incorporated 
                into and made a part of this section.
            (2) Ineligibility.--
                    (A) In general.--Except as provided in subparagraph 
                (C), if the Secretary determines that a manufacturer--
                            (i) has made a false statement to the 
                        Secretary in connection with the America Star 
                        Program;
                            (ii) knowing, or having reason to know, 
                        that a product does not meet the standards of 
                        an America Star label--
                                    (I) has placed such label on such 
                                product;
                                    (II) has used such label in any 
                                marketing materials for such product; 
                                or
                                    (III) in any other way has 
                                represented that such product meets or 
                                is certified as meeting the standards 
                                of such label; or
                            (iii) has otherwise violated the purposes 
                        of the America Star Program;
                the Secretary may not, for a period of 5 years after 
                the conduct described in clause (i), (ii), or (iii), 
                certify the product to which such conduct relates as 
                meeting the standards of an America Star label.
                    (B) Effect on existing certification.--In the case 
                of a product with respect to which, at the time of the 
                determination of the Secretary under subparagraph (A), 
                there is in effect a certification by the Secretary 
                that the product meets the standards of an America Star 
                label--
                            (i) if the product continues to meet such 
                        standards, the Secretary may either withdraw 
                        the certification or allow the certification to 
                        continue in effect, as the Secretary considers 
                        appropriate; and
                            (ii) if the product no longer meets such 
                        standards, the Secretary shall withdraw the 
                        certification.
                    (C) Waiver.--Notwithstanding subparagraph (A), the 
                Secretary may waive or reduce the period referred to in 
                such subparagraph if the Secretary determines that the 
                waiver or reduction is in the best interests of the 
                America Star Program.
    (h) Administrative Appeal.--
            (1) Expedited appeals procedure.--The Secretary shall 
        establish an expedited administrative appeals procedure under 
        which persons may appeal an action of the Secretary under this 
        section that--
                    (A) adversely affects such person; or
                    (B) is inconsistent with the America Star Program.
            (2) Appeal of final decision.--A final decision of the 
        Secretary under paragraph (1) may be appealed to the United 
        States district court for the district in which the person is 
        located.
    (i) Offsetting Collections.--
            (1) In general.--The Secretary may collect reasonable fees 
        from--
                    (A) manufacturers that apply for certification of 
                products as meeting the standards of America Star 
                labels; and
                    (B) manufacturers of products for which such 
                certifications are in effect.
            (2) Account.--The fees collected under paragraph (1) shall 
        be credited to the account that incurs the cost of the 
        certification services provided under this section.
            (3) Use.--The fees collected under paragraph (1) shall be 
        available to the Secretary, without further appropriation or 
        fiscal-year limitation, to pay the expenses of the Secretary 
        incurred in providing certification services under this 
        section.
    (j) Definitions.--In this section:
            (1) America star label.--The term ``America Star label'' 
        means a label described in subsection (a) and established by 
        the Secretary under subsection (b)(1).
            (2) America star program.--The term ``America Star 
        Program'' means the voluntary labeling program established 
        under this section.
            (3) Secretary.--The term ``Secretary'' means the Secretary 
        of Commerce.

SEC. 3. ANGEL INVESTMENT TAX CREDIT.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following new section:

``SEC. 30E. ANGEL INVESTMENT TAX CREDIT.

    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to 25 percent of the qualified equity investments made by a 
qualified investor during the taxable year.
    ``(b) Qualified Equity Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified equity investment' 
        means any equity investment in a qualified small business 
        entity if--
                    ``(A) such investment is acquired by the taxpayer 
                at its original issue (directly or through an 
                underwriter) solely in exchange for cash, and
                    ``(B) such investment is designated for purposes of 
                this section by the qualified small business entity.
            ``(2) Equity investment.--The term `equity investment' 
        means--
                    ``(A) any form of equity, including a general or 
                limited partnership interest, common stock, preferred 
                stock (other than nonqualified preferred stock as 
                defined in section 351(g)(2)), with or without voting 
                rights, without regard to seniority position and 
                whether or not convertible into common stock or any 
                form of subordinate or convertible debt, or both, with 
                warrants or other means of equity conversion, and
                    ``(B) any capital interest in an entity which is a 
                partnership.
            ``(3) Redemptions.--A rule similar to the rule of section 
        1202(c)(3) shall apply for purposes of this subsection.
    ``(c) Qualified Small Business Entity.--For purposes of this 
section--
            ``(1) In general.--The term `qualified small business 
        entity' means any domestic corporation or partnership if such 
        corporation or partnership is certified by the Secretary under 
        subsection (h) and--
                    ``(A) is a small business (as defined in section 
                41(b)(3)(D)(iii)),
                    ``(B) has its headquarters as the principal place 
                of business in the United States,
                    ``(C) is principally engaged in a qualified high 
                technology trade or business,
                    ``(D) has been in operation in the United States 
                for not more than 10 consecutive years as of the date 
                of the qualified equity investment,
                    ``(E) employs less than 100 full-time equivalent 
                employees as defined in section 45R(d)(2)(A) as of the 
                date of such investment,
                    ``(F) has more than 50 percent of the employees 
                performing substantially all of their services in the 
                United States as of the date of such investment,
                    ``(G) at least 80 percent (by value) of the assets 
                of such corporation or partnership are used by such 
                corporation or partnership in the active conduct of 1 
                or more qualified high technology trades or businesses, 
                and
                    ``(H) has equity investments designated for 
                purposes of this paragraph.
            ``(2) Determination of use of assets.--
                    ``(A) In general.--For purposes of paragraph 
                (1)(G), assets used in activities described in 
                subparagraph (B) shall be treated as used in the active 
                conduct of a qualified high technology trade or 
                business. Any determination under this subparagraph 
                shall be made without regard to whether a corporation 
                or partnership has any gross income from such 
                activities at the time of the determination.
                    ``(B) Activities.--An activity is described in this 
                section if such activity is in connection with a future 
                qualified high technology trade or business and such 
                activity is--
                            ``(i) a start-up activity described in 
                        section 195(c)(1)(A), or
                            ``(ii) an activity resulting in the payment 
                        or incurring of qualified research expenses (as 
                        defined in section 41(b)).
            ``(3) Designation of equity investments.--For purposes of 
        paragraph (1)(H), an equity investment shall not be treated as 
        designated if such designation would result in the aggregate 
        amount which may be taken into account under this section with 
        respect to qualified equity investments in a qualified small 
        business entity exceeds--
                    ``(A) $10,000,000, taking into account the total 
                amount of all qualified equity investments made by all 
                taxpayers for the taxable year and all preceding 
                taxable years,
                    ``(B) $2,000,000, taking into account the total 
                amount of all qualified equity investments made by all 
                taxpayers for such taxable year, and
                    ``(C) $1,000,000, taking into account the total 
                amount of all qualified equity investments made by the 
                taxpayer for such taxable year.
            ``(4) Qualified high technology trade or business.--For 
        purposes of this section, the term `qualified high technology 
        trade or business' is a high technology trade or business which 
        is related to--
                    ``(A) advanced materials, nanotechnology, or 
                precision manufacturing,
                    ``(B) aerospace, aeronautics, or defense,
                    ``(C) biotechnology or pharmaceuticals,
                    ``(D) electronics, semiconductors, software, or 
                computer technology,
                    ``(E) energy, environment, or clean technologies,
                    ``(F) forest products or agricultural sciences,
                    ``(G) information technology, communication 
                technology, digital media, opto-electronics or 
                photonics,
                    ``(H) life sciences or medical sciences,
                    ``(I) marine technology or aquaculture,
                    ``(J) manufacturing, processing, or assembling 
                innovative technology products,
                    ``(K) transportation, or
                    ``(L) any other high technology trade or business 
                as determined by the Secretary.
    ``(d) Qualified Investor.--For purposes of this section--
            ``(1) In general.--The term `qualified investor' means an 
        accredited investor, as defined by the Securities and Exchange 
        Commission, investor network, or investor fund who review new 
        or proposed businesses for potential investment.
            ``(2) Investor network.--The term `investor network' means 
        a group of accredited investors organized for the sole purpose 
        of making qualified equity investments.
            ``(3) Investor fund.--
                    ``(A) In general.--The term `investor fund' means a 
                corporation that for the applicable taxable year is 
                treated as an S corporation or a general partnership, 
                limited partnership, limited liability partnership, 
                trust, or limited liability company and which for the 
                applicable taxable year is not taxed as a corporation.
                    ``(B) Allocation of credit.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the credit allowed under 
                        subsection (a) shall be allocated to the 
                        shareholders or partners of the investor fund 
                        in proportion to their ownership interest or as 
                        specified in the fund's organizational 
                        documents.
                            ``(ii) Single member limited liability 
                        company.--If the investor fund is a single 
                        member limited liability company that is 
                        disregarded as an entity separate from its 
                        owner, the credit allowed under subsection (a) 
                        may be claimed by such limited liability 
                        company's owner, if such owner is a person 
                        subject to the tax under this title.
            ``(4) Exclusion.--The term `qualified investor' does not 
        include--
                    ``(A) a person controlling at least 50 percent of 
                the qualified small business entity,
                    ``(B) an employee of such entity, or
                    ``(C) any bank, bank and trust company, insurance 
                company, trust company, national bank, savings 
                association or building and loan association for 
                activities that are a part of its normal course of 
                business.
    ``(e) National Limitation on Amount of Investments Designated.--
            ``(1) In general.--There is an angel investment tax credit 
        limitation of $100,000,000 for each year of the investment 
        period.
            ``(2) Investment period.--The investment period is calendar 
        years 2015 through 2019.
            ``(3) Allocation of limitation.--The limitation under 
        paragraph (1) shall be allocated by the Secretary among 
        qualified small business entities selected by the Secretary.
            ``(4) Carryover of unused limitation.--If the angel 
        investment tax credit limitation for any calendar year exceeds 
        the aggregate amount allocated under paragraph (3) for such 
        year, such limitation for the succeeding calendar year shall be 
        increased by the amount of such excess. No amount may be 
        carried under the preceding sentence to any calendar year after 
        2022.
    ``(f) Application With Other Credits.--
            ``(1) Business credit treated as part of general business 
        credit.--Except as provided in paragraph (2), the credit which 
        would be allowed under subsection (a) for any taxable year 
        (determined without regard to this subsection) shall be treated 
        as a credit listed in section 38(b) for such taxable year (and 
        not allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--In the case of an individual who 
                elects the application of this paragraph, for purposes 
                of this title, the credit allowed under subsection (a) 
                for any taxable year (determined after application of 
                paragraph (1)) shall be treated as a credit allowable 
                under subpart A for such taxable year.
                    ``(B) Carryforward of unused credit.--If the credit 
                allowable under subsection (a) by reason of 
                subparagraph (A) exceeds the limitation imposed by 
                section 26(a) for such taxable year, reduced by the sum 
                of the credits allowable under subpart A (other than 
                this section) for such taxable year, such excess shall 
                be carried to each of the succeeding 20 taxable years 
                to the extent that such unused credit may not be taken 
                into account under subsection (a) by reason of 
                subparagraph (A) for a prior taxable year because of 
                such limitation.
    ``(g) Special Rules.--
            ``(1) Related parties.--For purposes of this section--
                    ``(A) In general.--All related persons shall be 
                treated as 1 person.
                    ``(B) Related persons.--A person shall be treated 
                as related to another person if the relationship 
                between such persons would result in the disallowance 
                of losses under section 267 or 707(b).
            ``(2) Basis.--For purposes of this subtitle, the basis of 
        any investment with respect to which a credit is allowable 
        under this section shall be reduced by the amount of such 
        credit so allowed. This subsection shall not apply for purposes 
        of sections 1202, 1397B, and 1400B.
            ``(3) Recapture.--The Secretary shall, by regulations, 
        provide for recapturing the benefit of any credit allowable 
        under subsection (a) with respect to any qualified equity 
        investment which is held by the taxpayer less than 3 years, 
        except that no benefit shall be recaptured in the case of--
                    ``(A) transfer of such investment by reason of the 
                death of the taxpayer,
                    ``(B) transfer between spouses,
                    ``(C) transfer incident to the divorce (as defined 
                in section 1041) of such taxpayer, or
                    ``(D) a transaction to which section 381(a) applies 
                (relating to certain acquisitions of the assets of one 
                corporation by another corporation).
    ``(h) Regulations.--For purposes of this section--
            ``(1) In general.--Not later than 180 days after the date 
        of enactment of this section, the Secretary shall prescribe 
        regulations to--
                    ``(A) certify qualified small business entities,
                    ``(B) prevent the abuse of the purposes of this 
                section,
                    ``(C) impose appropriate reporting requirements and 
                metric for measuring the effectiveness of the tax 
                credit, including the impact of the tax credit on 
                domestic job creation, and
                    ``(D) apply the provisions of this section to newly 
                formed entities.
            ``(2) Certification and selection criteria.--The 
        regulations for certifying qualified small business entities 
        shall require the following:
                    ``(A) Certification.--
                            ``(i) Application for tax credit.--Each 
                        applicant for certification as a qualified 
                        small business entity shall submit an 
                        application containing such information as the 
                        Secretary may require.
                            ``(ii) Time to meet criteria for 
                        certification.--Each applicant for 
                        certification shall have 1 year from the date 
                        of acceptance by the Secretary of the 
                        application during which to provide to the 
                        Secretary evidence that the requirements of the 
                        certification have been met.
                    ``(B) Selection criteria.--In determining which 
                applicants to certify under this paragraph, the 
                Secretary--
                            ``(i) shall take into consideration only 
                        those applicants where there is a reasonable 
                        expectation of commercial viability, and
                            ``(ii) shall take into consideration which 
                        applicants--
                                    ``(I) will provide the greatest 
                                domestic job creation (both direct and 
                                indirect) during the tax credit period, 
                                and
                                    ``(II) have the greatest potential 
                                for technological innovation and 
                                commercial deployment.''.
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 of the Internal Revenue Code of 1986 is amended in paragraph 
(35), by striking ``plus'', in paragraph (36), by striking the period 
at the end and inserting ``, plus'', and by adding at the end the 
following new paragraph:
            ``(37) the portion of the angel investment tax credit to 
        which section 30E(f)(1) applies.''.
    (c) Conforming Amendments.--Section 1016(a) of the Internal Revenue 
Code of 1986 is amended by striking ``and'' at the end of paragraph 
(36), by striking the period at the end of paragraph (37) and inserting 
``, and'', and by inserting after paragraph (37) the following new 
paragraph:
            ``(38) to the extent provided in section 30E(g)(2).''.
    (d) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

                              ``Sec. 30E. Angel investment tax 
                                        credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to investments made after December 31, 2013, in taxable years 
ending after such date.
    (f) GAO Report.--Not later than two years after the date of 
enactment of this Act, the Comptroller General of the United States, 
pursuant to an audit of the angel investment tax credit program 
established under section 30E of the Internal Revenue Code of 1986 (as 
added by subsection (a)), shall report to Congress on such program, 
including--
            (1) the implementation of the regulations promulgated by 
        the Secretary,
            (2) the amount of tax credits allocated to qualified small 
        business entities in the prior year, and
            (3) the effectiveness of the tax credit in increasing 
        domestic job creation by the qualified small businesses that 
        receive the tax credit.

SEC. 4. PERMANENT FULL EXCLUSION APPLICABLE TO QUALIFIED SMALL BUSINESS 
              STOCK.

    (a) In General.--Paragraph (4) of section 1202(a) of the Internal 
Revenue Code of 1986 is amended by striking ``and before January 1, 
2014''.
    (b) Conforming Amendments.--
            (1) Section 1202(a) of such Code, as amended by subsection 
        (a), is amended by striking paragraphs (2) and (3) and by 
        redesignating paragraph (4) as paragraph (2).
            (2) Section 1202(a)(2) of such Code, as redesignated by 
        paragraph (1), is amended by adding ``and'' at the end of 
        subparagraph (A), by striking subparagraph (B), and by 
        redesignating subparagraph (C) as subparagraph (B).
            (3) Section 1223(13) of such Code is amended by striking 
        ``1202(a)(2),''.
            (4) The heading for section 1202 of such Code is amended by 
        striking ``partial exclusion for gain'' and inserting 
        ``exclusion of certain gain''.
            (5) The item relating to section 1202 in the table of 
        sections for part I of subchapter P of chapter 1 of such Code 
        is amended by striking ``Partial exclusion for gain'' and 
        inserting ``Exclusion of certain gain''.
    (c) Effective Date.--The amendments made by this section apply to 
stock acquired after December 31, 2013.

SEC. 5. ESTABLISHMENT OF SMALL BUSINESS STARTUP SAVINGS ACCOUNTS.

    (a) In General.--Subpart A of part I of subchapter D of chapter 1 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 408A the following new section:

``SEC. 408B. SMALL BUSINESS STARTUP SAVINGS ACCOUNTS.

    ``(a) General Rule.--Except as provided in this section, a Small 
Business Startup Savings Account shall be treated for purposes of this 
title in the same manner as an individual retirement plan.
    ``(b) Small Business Startup Savings Account.--For purposes of this 
title, the term `Small Business Startup Savings Account' means an 
individual retirement account (as defined in section 409(a)) which is 
designated at the time of establishment of the plan as a Small Business 
Startup Savings Account. Such designation shall be made in such manner 
as the Secretary may prescribe.
    ``(c) Treatment of Contributions.--
            ``(1) No deduction allowed.--No deduction shall be allowed 
        under section 219 for a contribution to a Small Business 
        Startup Savings Account.
            ``(2) Contribution limit.--
                    ``(A) In general.--The aggregate amount of 
                contributions for any taxable year to all Small 
                Business Startup Savings Accounts maintained for the 
                benefit of an individual shall not exceed $10,000.
                    ``(B) Aggregate limitation.--The aggregate of the 
                amounts which may be taken into account under 
                subparagraph (A) for all taxable years with respect to 
                all Small Business Startup Savings Accounts maintained 
                for the benefit of an individual shall not exceed 
                $150,000.
                    ``(C) Cost-of-living adjustment.--The Secretary 
                shall adjust annually the $10,000 amount in 
                subparagraph (A) for increases in the cost-of-living at 
                the same time and in the same manner as adjustments 
                under section 415(d); except that the base period shall 
                be the calendar quarter beginning July 1, 2014, and any 
                increase which is not a multiple of $500 shall be 
                rounded to the next lowest multiple of $500.
            ``(3) Contributions permitted after age 70\1/2\.--
        Contributions to a Small Business Startup Savings Account may 
        be made even after the individual for whom the account is 
        maintained has attained age 70\1/2\.
            ``(4) Rollovers from retirement plans not allowed.--A 
        taxpayer shall not be allowed to make a qualified rollover 
        contribution to a Small Business Startup Savings Account from 
        any qualified retirement plan (as defined in section 4974(c)).
    ``(d) Distribution Rules.--For purposes of this title--
            ``(1) Qualified distributions.--
                    ``(A) In general.--Any qualified distribution from 
                a Small Business Startup Savings Account shall not be 
                includible in gross income.
                    ``(B) Qualified distribution defined.--For purposes 
                of this subsection, the term `qualified distribution' 
                means any payment or distribution made for operating 
                capital, the purchase of equipment or facilities, 
                marketing, training, incorporation, and accounting 
                fees.
                    ``(C) Limitations on qualified distributions.--All 
                qualified distributions from a Small Business Startup 
                Savings Account--
                            ``(i) shall be limited to a single 
                        business, and
                            ``(ii) must be disbursed not later than the 
                        last day of the 5th taxable year beginning 
                        after the initial disbursement.
            ``(2) Nonqualified distributions.--
                    ``(A) In general.--In applying section 72 to any 
                distribution from a Small Business Startup Savings 
                Account which is not a qualified distribution, such 
                distribution shall be treated as made from 
                contributions to the Small Business Startup Savings 
                Account to the extent that such distribution, when 
                added to all previous distributions from the Small 
                Business Startup Savings Account, does not exceed the 
                aggregate amount of contributions to the Small Business 
                Startup Savings Account.
                    ``(B) Treatment of amounts remaining in account.--
                Any remaining amount in a Small Business Startup 
                Savings Account following the date described in 
                paragraph (1)(A)(ii) shall be treated as distributed 
                during the taxable year following such date and such 
                distribution shall not be treated as a qualified 
                distribution.''.
    (b) Excess Contributions.--Section 4973 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
subsection:
    ``(h) Excess Contributions to Small Business Startup Savings 
Accounts.--For purposes of this section, in the case of contributions 
to all Small Business Startup Savings Accounts (within the meaning of 
section 408B(b)) maintained for the benefit of an individual, the term 
`excess contributions' means the sum of--
            ``(1) the excess (if any) of--
                    ``(A) the amount contributed to such accounts for 
                the taxable year, over
                    ``(B) the amount allowable as a contribution under 
                section 408B(c)(2) for such taxable year, and
            ``(2) the amount determined under this subsection for the 
        preceding taxable year, reduced by the sum of--
                    ``(A) the distributions out of the accounts for the 
                taxable year, and
                    ``(B) the excess (if any) of--
                            ``(i) the maximum amount allowable as a 
                        contribution under section 408B(c)(2) for such 
                        taxable year, over
                            ``(ii) the amount contributed to such 
                        accounts for such taxable year.''.
    (c) Conforming Amendment.--The table of sections for subpart A of 
part I of subchapter D of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after the item relating to section 408A 
the following new item:

                              ``Sec. 408B. Small Business Startup 
                                        Savings Accounts.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2013.
                                 <all>