[Congressional Record Volume 149, Number 87 (Friday, June 13, 2003)]
[Senate]
[Pages S7881-S7882]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HAGEL:
  S. 1263. A bill to amend the Internal Revenue Code of 1986 to exclude 
from gross income interest received on loans secured by agricultural 
real property; to the Committee on Finance.
  Mr. HAGEL. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:
       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 ``Rural Economic Investment 
     Act of 2003''.

     SEC. 2. EXCLUSION FOR INTEREST ON LOANS SECURED BY 
                   AGRICULTURAL REAL PROPERTY.

       (a) In General.--Part III of subchapter B of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to items 
     specifically excluded from gross income) is amended by 
     inserting after section 132 the following new section:

     ``SEC. 133. INTEREST ON LOANS SECURED BY AGRICULTURAL REAL 
                   PROPERTY.

       ``(a) Exclusion.--Gross income shall not include interest 
     received by a qualified lender on any qualified real estate 
     loan.
       ``(b) Definitions.--For purposes of this section--
       ``(1) Qualified lender.--The term `qualified lender' 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.).
       ``(2) Qualified real estate loan.--The term `qualified real 
     estate loan' means any

[[Page S7882]]

     loan secured by agricultural real estate or by a leasehold 
     mortgage (with a status as a lien) on agricultural real 
     estate.
       ``(3) Agricultural real estate.--The term `agricultural 
     real estate' means--
       ``(A) real property used for the production of 1 or more 
     agricultural products, and
       ``(B) any single family residence--
       ``(i) which is the principal residence (within the meaning 
     of section 121) of its occupant, and
       ``(ii) which is located in a rural area (as determined by 
     the Secretary of Agriculture) with a population (determined 
     on the basis of the most recent decennial census for which 
     data are available) of 2,500 or less.''.
       (b) Clerical Amendment.--The table of sections for such 
     part III is amended by inserting after the item relating to 
     section 132 the following new item:

``Sec. 133. Interest on loans secured by agricultural real property.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.
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