Community Banks Serving Their Communities First Act, or the Communities First Act - Sets forth regulatory relief measures for community banks, including amendments to: (1) the Home Mortgage Disclosure Act to increase from $10 million to $250 million the asset levels of depository institution and home mortgage lenders that are exempt from disclosure requirements; (2) the Federal Deposit Insurance Act to permit certain insured depository institutions to submit a short form report of condition; and (3) the Sarbanes-Oxley Act of 2002 to exempt certain small-sized depository institutions from management assessment of internal controls requirements.
Directs the Federal Reserve Board to publish proposed revisions to the Small Bank Holding Company Policy Statement on Assessment of Financial and Managerial Factors that provide that: (1) the policy shall apply to a bank holding company with pro forma consolidated assets of less than $1 billion that meets specified criteria; and (2) the debt-to-equity ratio allowable for a small bank holding company to remain eligible to pay a corporate dividend and for expedited processing procedures would increase from 1:1 to 3:1.
Amends the Federal Deposit Insurance Act to increase from $250 million to $1 billion the asset size of institutions eligible for Federal banking examinations conducted at intervals subject to discretion of the appropriate Federal banking agency.
Amends the Federal Reserve Act to increase from $1 million to $1 billion of total assets the size of small banks exempt from the limitation placed on extensions of credit to executive officers, director and principal shareholders.
Amends the Community Reinvestment Act of 1977 to increase from $250 million to $1 billion the size of financial institutions eligible for a less frequent examination schedule.
Amends the Truth in Lending Act to direct the Board of Governors of the Federal Reserve System to prescribe regulations authorizing a consumer to waive the statutory three-day right of rescission in connection with a consumer credit transaction when the creditor is an insured depository institution.
Amends the Home Mortgage Disclosure Act to exempt from its recordkeeping and public disclosure requirements a depository institution that makes fewer than 100 reportable loans annually.
Amends the Gramm-Leach-Bliley Act to exempt specified financial institutions from the requisite annual disclosure of privacy policy.
Amends the Federal Deposit Insurance Act to direct the Federal Deposit Insurance Corporation to review reports of condition periodically and reduce filings of related information or schedules pursuant to specified determinations.
Amends the Federal Reserve Act to prohibit the aggregate amount of credit extensions that a member bank may make to an executive officer of the bank from exceeding $250,000.
Amends the Internal Revenue Code to: (1) provide reduced tax rates and deferral of income recognition on long-term certificates of deposit; (2) exclude from gross income interest received by a qualified lender on any qualified real estate loan; (3) increase from $10 million to $30 million the cap on qualified small issue bonds; (4) provide limited liability company tax treatment for FDIC-insured limited liability companies; (5) provide a tax reduction on a C corporation which is a community bank; and (6) exempt community banks from the alternative minimum tax..
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2061 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 2061
To enhance the ability of community banks to foster economic growth and
serve their communities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 3, 2005
Mr. Ryun of Kansas (for himself and Mr. Cannon) introduced the
following bill; which was referred to the Committee on Financial
Services, and in addition to the Committee on Ways and Means, for a
period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To enhance the ability of community banks to foster economic growth and
serve their communities, 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 ``Community Banks Serving Their
Communities First Act'' or the ``Communities First Act''.
TITLE I--TARGETED REGULATORY RELIEF FOR COMMUNITY BANKS
SEC. 101. INCREASE EXEMPTION LEVELS UNDER THE HOME MORTGAGE DISCLOSURE
ACT OF 1975.
(a) Depository Institution and Mortgage Lender Disclosure
Exemptions.--Section 304(i) of the Home Mortgage Disclosure Act (12
U.S.C. 2803(i)) is amended by striking ``$30,000,000'' and inserting
``$250,000,000''.
(b) Depository Institution Exemptions From Act.--Section 309 of the
Home Mortgage Disclosure Act (12 U.S.C. 2808(a)) is amended--
(1) in subsection (a), by striking ``$10,000,000'' and
inserting ``$250,000,000''; and
(2) in subsection (b), by adding at the end the following
new paragraph:
``(4) Indexing of depository institution disclosure
exemption amount.--By December 31 of each year beginning after
the date of the enactment of the Community Banks Serving Their
Communities First Act, the amount applicable under section
304(i) with respect to institutions described in section 303(2)
shall be adjusted in accordance with the procedure described in
paragraphs (1) and (3) and the adjusted amount shall apply
during the subsequent year.''.
SEC. 102. SHORT FORM REPORTS OF CONDITION FOR CERTAIN COMMUNITY BANKS.
Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C.
1817(a)) is amended by adding at the end the following new paragraph:
``(11) Short form reports of condition for community
banks.--An insured depository institution described in
subparagraphs (A), (B), (C), and (D) of section 10(d)(4) may
submit a short form report of condition under paragraph (3) in
2 nonsequential quarters of any calendar year.''.
SEC. 103. COMMUNITY BANK EXEMPTION FROM ANNUAL MANAGEMENT ASSESSMENT OF
INTERNAL CONTROLS REQUIREMENT OF THE SARBANES-OXLEY ACT
OF 2002.
Section 404 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262) is
amended by adding the following new subsection:
``(c) Community Bank Exemption.--
``(1) In general.--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.
``(2) Adjustment of amount.--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.''.
SEC. 104. CHANGES REQUIRED TO SMALL BANK HOLDING COMPANY POLICY
STATEMENT ON ASSESSMENT OF FINANCIAL AND MANAGERIAL
FACTORS.
(a) Small Bank Holding Company Policy Statement on Assessment of
Financial and Managerial Factors.--
(1) In general.--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--
(A) is not engaged in any nonbanking activities
involving significant leverage; and
(B) does not have a significant amount of
outstanding debt that is held by the general public.
(2) Adjustment of amount.--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 bank holding
companies, on a consolidated basis, as determined by the Board.
(b) Increase in Debt-to-Equity Ratio of Small Bank Holding
Company.--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.
SEC. 105. INCREASE IN SIZE OF A SMALL DEPOSITORY INSTITUTION EXCEPTION
UNDER THE DEPOSITORY INSTITUTION MANAGEMENT INTERLOCKS
ACT.
Section 203(1) of the Depository Institution Management Interlocks
Act (12 U.S.C. 3202(1)) is amended by striking ``$20,000,000'' and
inserting ``$500,000,000''.
SEC. 106. COMMUNITY BANK PROTECTION UNDER THE SECURITIES INVESTOR
PROTECTION ACT OF 1970.
Section 9 of the Securities Investor Protection Act of 1970 (15
U.S.C. 78fff-3) is amended by adding the following new subsection:
``(d) Community Bank Protection.--
``(1) In general.--The prohibition on advances in
subsection (a)(5) of this section shall not apply to a bank
with total assets, on a consolidated basis, of less than
$1,000,000,000.
``(2) Adjustment of amount.--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.''.
SEC. 107. FLEXIBLE EXAMINATION SCHEDULE FOR COMMUNITY BANKS.
(a) In General.--Paragraph (4) of section 10(d) of the Federal
Deposit Insurance Act (12 U.S.C. 1820(d)) is amended--
(1) by striking the matter preceding subparagraph (A) and
inserting ``In lieu of the 12-month period referred to in
paragraphs (1), (2), and (3), the examination required under
paragraph (1) of an insured depository institution may be
conducted at such intervals as the appropriate Federal banking
agency may determine to be appropriate, on the basis of factors
the Financial Institutions Examination Council shall establish,
if--''; and
(2) in subparagraph (A), by striking ``$250,000,000'' and
inserting ``$1,000,000,000''.
(b) Clerical Amendment.--The heading for paragraph (4) of section
10(d) of the Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is
amended by striking ``18-month rule'' and inserting ``Flexible on-site
examination schedule''.
SEC. 108. INCREASE IN AMOUNT OF SMALL BANK EXCEPTION FOR CAP ON
AGGREGATE LOANS TO EXECUTIVE OFFICERS.
Subparagraph (C) of section 22(h)(5) of the Federal Reserve Act (12
U.S.C. 375b(5)(C)) is amended--
(1) by striking ``$100,000,000 of deposits'' and inserting
``$1,000,000,000 of total assets (on a consolidated basis)'';
and
(2) by adding at the end the following new sentence: ``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.''.
SEC. 109. CONSIDERATION OF COMMUNITY BANK IMPACT.
Before establishing or making any revision in any regulation,
requirement, or guideline applicable to insured depository institutions
(as defined in section 3 of the Federal Deposit Insurance Act), the
appropriate Federal banking agency (as 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.
SEC. 110. INCREASE IN CRA EXAM INTERVALS FOR COMMUNITY BANKS.
Section 809(a) of the Community Reinvestment Act of 1977 (12 U.S.C.
2908(a)) is amended by striking ``$250,000,000'' and inserting
``$1,000,000,000''.
TITLE II--ADDITIONAL REGULATORY RELIEF FOR COMMUNITY BANKS AND THEIR
CUSTOMERS
SEC. 201. PROVISIONS RELATING TO 3-DAY RIGHT OF RESCISSION UNDER THE
TRUTH IN LENDING ACT.
(a) Optional Consumer Waivers of Right of Rescission.--Section
125(d) of the Truth in Lending Act (15 U.S.C. 1635(d)) is amended--
(1) by striking ``The Board may'' and inserting ``Waivers
of Rescission Rights.--
``(1) Personal financial emergencies.--The board may''; and
(2) by adding at the end the following new paragraph:
``(2) Waivers when creditor is insured depository
institution.--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.''.
(b) Exemption in Case of Refinancing With No New Money Regardless
of Creditor.--Section 125(e)(2) of the Truth in Lending Act (15 U.S.C.
1635(e)(2)) is amended by striking ``by the same creditor''.
(c) Exempt Home Equity Lines of Credit.--Section 125(e)(4) of the
Truth in Lending Act (15 U.S.C. 1635(e)(4)) is amended to read as
follows:
``(4) advances under an open end consumer credit plan which
provides for any extension of credit which is secured by the
consumer's principal dwelling.''.
SEC. 202. ADDITIONAL EXEMPTIONS UNDER HOME MORTGAGE DISCLOSURE ACT OF
1975; STREAMLINING REPORTING.
(a) Small Reporter Exemption.--Section 304 of the Home Mortgage
Disclosure Act (12 U.S.C. 2803) is amended by adding the following new
subsection:
``(n) Small Reporter Exemption.--If, in any year, a depository
institution makes fewer than 100 reportable loans described in any
paragraph of subsection (b), the depository institution shall be exempt
from the disclosure requirements of this section with respect to the
loans described in that paragraph for such year.''.
(b) MSA Modifications.--Section 304(a) of the Home Mortgage
Disclosure Act (12 U.S.C. 2803(a)) is amended----
(1) in paragraph (1), by inserting ``or as modified by the
Board under paragraph (3),'' after ``as defined by the
Department of Commerce''; and
(2) by adding at the end the following new paragraph:
``(3) Modification of msas.--The Board may modify the
description of any primary metropolitan statistical area,
metropolitan statistical area, and consolidated metropolitan
statistical area, as defined by the Secretary of Commerce, for
purposes of this subsection.''.
(c) Regular Streamlining.--The Home Mortgage Disclosure Act (12
U.S.C. 2801 et seq.) is amended by adding the following new section:
``SEC. 312. REGULAR STREAMLINING.
``Before the end of the 1-year period beginning on the date of the
enactment of the Community Banks Serving Their Communities First Act
and before the end of each 5-year period thereafter, the Board shall--
``(1) review the data collection and reporting requirements
of this title;
``(2) streamline, reduce, or eliminate such requirements by
regulation to the extent consistent with the purposes of this
title;
``(3) revise the data collection and reporting requirements
under this title to ensure that they are consistent with those
imposed under the Equal Credit Opportunity Act; and
``(4) report to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives such legislative
recommendations as the Board determines to be necessary to
streamline, reduce, or eliminate such requirements to the
extent consistent with the purposes of this title and to ensure
that they are consistent with those imposed under the Equal
Credit Opportunity Act.''.
SEC. 203. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT UNDER THE
GRAMM-LEACH-BLILEY ACT.
Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is
amended by adding the following new subsection:
``(c) Exception to Annual Notice Requirement.--A financial
institution that--
``(1) provides nonpublic personal information only in
accordance with the provisions of section 502(b)(2) (relating
to the consumer `opt out' exception) and subsection 502(e)
(relating to general exceptions); and
``(2) has not changed its policies and practices with
regard to disclosing nonpublic personal information,
shall be exempt from the annual disclosure requirement under subsection
(a).''.
SEC. 204. STREAMLINING REPORTS OF CONDITION.
Section 7(a) of the Federal Deposit Insurance Act (12 U.S.C.
1817(a)) is amended by inserting after paragraph (11) (as added by
section 102 of this Act) the following new paragraph:
``(12) Streamlining reports of condition.--
``(A) Review of information and schedules.--Before
the end of the 1-year period beginning on the date of
the enactment of the Community Banks Serving Their
Communities First Act and before the end of each 5-year
period thereafter, the Corporation shall, in
conjunction with the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, and
the Director of the Office of Thrift Supervision,
review the information and schedules that are required
to be filed by any insured depository institution with
a report of condition under paragraph (3).
``(B) Reduction or elimination of filings which are
more burdensome than beneficial.--Within 9 months of
completing any review under subparagraph (A), the
Corporation, the Board of Governors of the Federal
Reserve System, the Comptroller of the Currency, and
the Director of the Office of Thrift Supervision shall
reduce or eliminate any requirement to file information
or schedules under paragraph (3) if such agencies find
that the burdens of such filings are not outweighed by
the benefits to safety and soundness of the financial
system or the ability of the Corporation to accurately
determine the financial condition and the results of
operations of each insured depository institution.
``(C) Report to the congress.--Before the end of
the 6-month period beginning on the date of completion
of any review under subparagraph (A), the Corporation,
the Board of Governors of the Federal Reserve System,
the Comptroller of the Currency, and the Director of
the Office of Thrift Supervision shall submit a report
to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate containing the findings
of the agencies with respect to such review and any
recommendation of such agencies for legislative action
to implement any such finding.''.
SEC. 205. INCREASE IN THE SPECIAL REGULATORY LENDING LIMIT ON LOANS TO
EXECUTIVE OFFICERS.
Section 22(g) of the Federal Reserve Act (12 U.S.C. 375b(g)) is
amended by adding at the end the following new paragraph:
``(11) Limit applicable on aggregate amount of certain
loans to executive officers of community banks.--
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.''.
TITLE III--TAX RELIEF FOR BANK DEPOSITORS, RURAL BANKS, MUNICIPALITIES,
AND BANKS ORGANIZED AS LIMITED LIABILITY COMPANIES
SEC. 301. REDUCED RATE AND DEFERRAL OF INCOME RECOGNITION ON LONG-TERM
CERTIFICATES OF DEPOSIT.
(a) Deferral of Income Recognition.--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:
``(j) Certificates of Deposits Held by Cash Basis Individuals.--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.''.
(b) Interest Income on Long-Term Certificates of Deposit.--
Subparagraph (A) of section 1(h)(11) of such Code is amended by
striking ``increased by'' and all that follows and inserting:
``increased by--
``(i) qualified dividend income, and
``(ii) interest income on any nonnegotiable
certificate of deposit--
``(I) with a fixed maturity date
which is 1 year or more from the date
of issue, and
``(II) the interest on which is not
made available for withdrawal before
maturity without penalty.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 302. 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 139A the
following new section:
``SEC. 139B. 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 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.
``(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,
``(ii) 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
``(iii) which is purchased or improved with
the proceeds of the qualified real estate loan.
``(c) Coordination With Section 265.--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.''.
(b) Clerical Amendment.--The table of sections for such part III is
amended by inserting after the item relating to section 139A the
following new item:
``Sec. 139B. 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.
SEC. 303. INCREASE IN CAP ON QUALIFIED SMALL ISSUE BONDS.
(a) In General.--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 ``$10,000,000'' and inserting
``$30,000,000''.
(b) Adjustment of Cap for Inflation.--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:
``(12) Inflation adjustment.--In the case of a calendar
year after 2006, the $30,000,000 amount contained in paragraph
(4)(A)(i) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by
substituting `calendar year 2005' for `calendar year
1992' in subparagraph (B) thereof.
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.''.
(c) Effective Date.--The amendments made by this section shall
apply to--
(1) obligations issued after the date of the enactment of
this Act, and
(2) capital expenditures made after such date with respect
to obligations issued on or before such date.
SEC. 304. LIMITED LIABILITY COMPANY TAX TREATMENT FOR FDIC-INSURED
LIMITED LIABILITY COMPANIES.
(a) In General.--Paragraph (2) of section 7701(a) of the Internal
Revenue Code of 1986 (defining partnership and partner) is amended to
read as follows:
``(2) Partner and partnership.--
``(A) In general.--The term `partnership' 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 `partner' includes a member in such a syndicate,
group, pool, joint venture, or organization.
``(B) Election by certain banks to be taxed as
partnerships.--
``(i) In general.--An eligible corporation
may elect to be treated as a partnership for
purposes of this title.
``(ii) Tax treatment.--In the case of an
eligible corporation making an election under
clause (i)--
``(I) no gain or loss shall be
recognized to the corporation or the
shareholders by reason of an election
under clause (i), and
``(II) section 1374 shall apply to
the entity after such election.
``(iii) Eligible corporation.--The term
`eligible corporation' means any of the
following entities which would (but for this
subparagraph) be treated as a C corporation for
purposes of this title:
``(I) Any bank (as defined in
section 581).
``(II) Any bank holding company (as
defined in section 2(a) of the Bank
Holding Company Act of 1956 (12 U.S.C.
1841(a))).
``(III) Any savings association (as
defined in section 3(b) of the Federal
Deposit Insurance Act (12 U.S.C.
1813)).
``(IV) Any savings and loan holding
company (as defined in section
10(a)(1)(D) of the Home Owners Loan
Act).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
TITLE IV--TAX RELIEF FOR COMMUNITY BANKS AND HOLDING COMPANIES
SEC. 401. REDUCTION IN TAX.
(a) C Corporations.--Section 11 of the Internal Revenue Code of
1986 (relating to tax imposed) is amended by adding at the end the
following new subsection:
``(e) Reduction of Tax on Community Banks.--
``(1) In general.--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.
``(2) Maximum reduction.--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.
``(3) Increased benefit for banks operating in distressed
areas, etc.--
``(A) In general.--In the case of a bank operating
in an area referred to in subparagraph (B)--
``(i) paragraph (1) shall be applied by
substituting `50 percent' for `80 percent', and
``(ii) paragraph (2) shall be applied by
substituting `$500,000' for `$250,000'.
``(B) Areas described.--The areas referred to in
this subparagraph are--
``(i) empowerment zones and enterprise
communities designated under section 1391,
``(ii) renewal communities designated under
section 1400E,
``(iii) low-income communities (as defined
in section 45D(e)), and
``(iv) distressed communities (within the
meaning of section 233 of the Bank Enterprise
Act of 1991 (12 U.S.C. 1834a(b)).
``(4) Community bank.--For purposes of this section, the
term `community bank' 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:
``(A) Any bank (as defined in section 581).
``(B) Any bank holding company (as defined in
section 2(a) of the Bank Holding Company Act of 1956
(12 U.S.C. 1841(a))).
``(C) Any savings association (as defined in
section 3(b) of the Federal Deposit Insurance Act (12
U.S.C. 1813)).
``(D) Any savings and loan holding company (as
defined in section 10(a)(1)(D) of the Home Owners Loan
Act).''.
(b) S Corporations.--Subsection (a) of section 1366 of such Code is
amended by adding at the end the following new paragraph:
``(3) Reduction of tax on community banks.--
``(A) In general.--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--
``(i) 20 percent of such net amount, or
``(ii) $1,250,000.
``(B) Increased benefit for banks operating in
distressed areas, etc.--In the case of a bank operating
in an area referred to in section 11(e)(3)(B)--
``(i) subparagraph (A)(i) shall be applied
by substituting `50 percent' for `20 percent',
and
``(ii) subparagraph (A)(ii) shall be
applied by substituting `$2,500,000' for
`$1,250,000'.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
SEC. 402. COMMUNITY BANKS EXEMPT FROM MINIMUM TAX.
(a) In General.--Section 55 of the Internal Revenue Code of 1986
(relating to alternative minimum tax imposed) is amended by adding at
the end the following new subsection:
``(f) Exemption for Community Banks.--
``(1) In general.--The tentative minimum tax of a community
bank (as defined in section 11(e)(4)) shall be zero.
``(2) Certain rules to apply.--Rules similar to the rules
of paragraphs (2) through (5) of subsection (e) shall apply for
purposes of this subsection.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after the date of the enactment of
this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, 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.
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, 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.
Referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, 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.
Llama 3.2 · runs locally in your browser
Ask anything about this bill. The AI reads the full text to answer.
Enter to send · Shift+Enter for new line