H.R.1647 - Small Business Development Fund Act of 1997105th Congress (1997-1998)
|Sponsor:||Rep. Waters, Maxine [D-CA-35] (Introduced 05/15/1997)|
|Committees:||House - Ways and Means; Budget; Small Business|
|Latest Action:||House - 05/15/1997 Referred to House Small Business (All Actions)|
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Text: H.R.1647 — 105th Congress (1997-1998)All Information (Except Text)
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Introduced in House (05/15/1997)
[Congressional Bills 105th Congress] [From the U.S. Government Printing Office] [H.R. 1647 Introduced in House (IH)] 105th CONGRESS 1st Session H. R. 1647 To establish a Small Business Development Fund to promote economic revitalization and community development through investment in, and assistance to, qualified women and minority business people. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 15, 1997 Ms. Waters (for herself, Mr. Cummings, Mr. Hilliard, Mr. Jackson of Illinois, Ms. Jackson-Lee of Texas, Ms. McKinney, Mrs. Meek of Florida, Mr. Thompson, Ms. Brown of Florida, Mr. Rush, Mr. Towns, Mr. Dixon, Mr. Stokes, Mr. Conyers, Mr. Dellums, Mr. Rangel, Mrs. Clayton, Ms. Kilpatrick, Mr. Clyburn, Mr. Ford, Mr. Davis of Illinois, Mr. Owens, Mr. Watt of North Carolina, Mr. Wynn, Mr. Scott, Mr. Hastings of Florida, Ms. Christian-Green, Ms. Carson, Ms. Norton, Mr. Payne, Mr. Clay, Mr. Jefferson, Ms. Eddie Bernice Johnson of Texas, Mr. Fattah, Mr. Lewis of Georgia, and Ms. Millender-McDonald) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on the Budget, and Small Business, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned _______________________________________________________________________ A BILL To establish a Small Business Development Fund to promote economic revitalization and community development through investment in, and assistance to, qualified women and minority business people. 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 referred to as the ``Small Business Development Fund Act of 1997''. SEC. 2. TAX ON CAPITAL GAINS REDUCTION STRATEGY AMOUNT OR ALTERNATIVE DENIAL OF INTEREST DEDUCTION ON CERTAIN DEBT INSTRUMENTS, AND ESTABLISHMENT OF TRUST FUND TO RECEIVE TAX AMOUNTS. (a) Imposition of Tax If Decrease In Capital Gains Rate Enacted In 1997.-- (1) In general.--Part I of subchapter P of chapter 1 of the Internal Revenue Code of 1986 (relating to treatment of capital gains) is amended by adding at the end the following new section: ``SEC. 1203. TAX ON CAPITAL GAINS REDUCTION STRATEGY AMOUNT. ``(a) In General.--There is hereby imposed, on each taxpayer which has a 50 percent strategy-based reduction for the taxable year, a tax equal to 1 percent of the capital gains reduction strategy amount for the taxable year. ``(b) 50 Percent Strategy-Based Reduction.--For purposes of this section, a taxpayer has a 50 percent strategy-based reduction for the taxable year if-- ``(1) the amount of tax imposed by this title for the taxable year on capital gains of the taxpayer is 50 percent or less of, ``(2) the amount of tax which would have been imposed by this title for the taxable year on capital gains of the taxpayer but for the use of applicable tax reduction strategies by the taxpayer (or by a party to a transaction with the taxpayer or by a person related to the taxpayer or to such party), as determined by the Secretary. The Secretary shall make the determination required under paragraph (2) by reference to transactions which would have yielded substantially the same non-tax result. For purposes of this subsection, the amount of tax imposed by this title (or the amount described in paragraph (2) which would have been so imposed) which is attributable to capital gains shall be the amount determined by the Secretary pursuant to regulations. ``(c) Capital Gains Reduction Strategy Amount.--For purposes of this section, the term `capital gains reduction strategy amount' means the excess of-- ``(1) the amount described in subsection (b)(2), over ``(2) the amount described in subsection (b)(1). ``(d) Applicable Tax Reduction Strategy.--For purposes of this section-- ``(1) In general.--With respect to any transaction, the term `applicable tax reduction strategy' means any product, method, strategy, or action-- ``(A) generally used by taxpayers primarily for the purpose of reducing the tax under this title on capital gains, and ``(B) identified by the Secretary, on a list published under paragraph (2), as being an applicable tax reduction strategy for purposes of the calendar quarter in which such transaction occurs. ``(2) Quarterly listing.--Not less than once each calendar quarter, the Secretary shall publish in the Federal Register a list of applicable tax reduction strategies for purposes of the next calendar quarter.'' (2) Clerical amendment.--The table of sections for part I of subchapter P of chapter 1 of such Code is amended by adding at the end the following new item: ``Sec. 1203. Tax on capital gains reduction strategy amount.'' (3) Effective date.--The amendments made by this subsection-- (A) shall take effect only if a decrease in the maximum Federal tax rate applicable to capital gains of individuals is enacted in 1997, and (B) if the conditions of subparagraph (A) are met, shall apply to taxable years beginning after the date of the enactment of this Act. (b) Denial of Interest Deduction On Certain Debt Instruments If Capital Gains Rate Decrease Not Enacted In 1997.-- (1) In general.--Section 385 of such Code (relating to treatment of certain interests in corporations as stock or indebtedness) is amended by adding at the end the following new subsection: ``(d) Certain Interests Treated as Stock.-- ``(1) Interests with over-40-year maturity or payable in stock.-- ``(A) In general.--Notwithstanding subsection (c), for purposes of this title, an interest in a corporation shall be treated as stock if such interest-- ``(i) has a maximum weighted average maturity of over 40 years, or ``(ii) is payable in stock of the issuer or a related person. ``(B) Weighted average maturity.--For purposes of subparagraph (A), in determining the weighted average maturity of an interest, any right to extend or renew shall be treated as exercised, and any right to accelerate payment shall not be taken into account. ``(C) Payable in stock.--For purposes of subparagraph (A), an interest shall be treated as payable in stock if-- ``(i) a substantial portion of such interest is mandatorily convertible, or convertible at the issuer's option, into stock of the issuer or a related person, ``(ii) a substantial portion of the principal (or interest) associated with such interest is required to be determined, or may be determined at the option of the issuer or a related person, by reference to the value of stock of the issuer or a related person, or ``(iii) such interest is part of an arrangement designed to result in the payment of such interest with stock of the issuer or a related person. ``(2) Certain interests not classified as indebtedness in sec filing.-- ``(A) In general.--For purposes of subsection (c), an issuer shall be treated as characterizing an interest as stock (and subsection (c)(2) shall not apply) if-- ``(i) such issuer is a corporation required to file annual financial statements with the Securities and Exchange Commission, ``(ii) such financial statements do not characterize such interest as indebtedness, and ``(iii) such interest has a maximum weighted average maturity of more than 15 years. ``(B) Special rules.--For purposes of this paragraph-- ``(i) Characterization in financial statements.--An interest shall not be treated as characterized in a financial statement solely by reason of footnotes or other narrative disclosures. ``(ii) Certain interests treated as characterized in statement.--An issuer will be treated as being described in subparagraph (A)(ii) with respect to an interest if-- ``(I) the issuer issues such interest to a related person (other than a corporation), ``(II) such interest is not included on the consolidated return which includes the issuer and the holder, and ``(III) the holder (or any person related to the issuer or the holder) issues a related interest which is not characterized as indebtedness on the consolidated financial statement. ``(iii) Leveraged leases.--This paragraph shall not apply with respect to leveraged leases. ``(3) Exceptions.--This subsection shall not apply with respect to demand loans, redeemable ground rents, or any other interest specified by the Secretary by regulation. ``(4) Related person.--For purposes of this subsection, persons shall be treated as related to each other if the relationship between such persons is described in section 267(b) or 707(b).'' (2) Effective date.--The amendment made by this subsection-- (A) shall take effect only if no decrease in the maximum Federal tax rate applicable to capital gains of individuals is enacted in 1997, and (B) if the conditions of subparagraph (A) are met, shall apply to taxable years beginning after the date of the enactment of this Act. (c) Small Business Development Fund.-- (1) In general.--Subchapter A of chapter 98 of such Code (relating to establishment of trust funds) is amended by adding at the end the following new section: ``SEC. 9512. SMALL BUSINESS DEVELOPMENT FUND. ``(a) Creation of Trust Fund.--There is established in the Treasury of the United States a trust fund to be known as the `Small Business Development Fund', consisting of such amounts as may be appropriated or credited to such fund as provided in this section or section 9602(b). ``(b) Transfers to Trust Fund.--There are hereby appropriated to the Small Business Development Fund amounts equivalent to the taxes received in the Treasury under section 1203 (relating to tax on capital gains reduction strategy amount) or 385(d), whichever is applicable. ``(c) Expenditures.--Amounts in the Small Business Development Fund shall be available, as provided in appropriation Acts, for purposes of the Small Business Development Fund Act of 1997.'' (2) Clerical amendment.--The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item: ``Sec. 9512. Small Business Development Fund.'' (3) Effective date.--The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act. SEC. 3. APPLICATION FOR ASSISTANCE (a) Form and Procedures.--An application for assistance shall be submitted in such form and in accordance with such procedures as established by the Secretary of Commerce. (b) Minimum Requirements.--The Fund shall require an application to establish that the applicant is-- (1) a credit union, (2) a community development corporation, (3) an entity engaged in job creation or enterprise and commercial development, or (4) a financial institution that needs capital to begin or expand a small business activity in a low-income community. SEC. 4. ASSISTANCE PROVIDED BY THE FUND The Fund may provide financial assistance to the entities listed in section 4(b) through equity investments, deposits, credit union shares, loans, and grants. SEC. 5. DEFINITION The term ``community development corporation'' has the meaning given such term in section 103(1) of the Community Development Banking and Financial Institutions Act of 1994 (12 USC 4702(1)). <all>