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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 228 Introduced in House (IH)]

110th CONGRESS
  1st Session
                                H. R. 228

To amend the Internal Revenue Code of 1986 to exclude from gross income 
           certain interest amounts received by individuals.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            January 4, 2007

 Mr. Stearns introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL

 
To amend the Internal Revenue Code of 1986 to exclude from gross income 
           certain interest amounts received by individuals.

    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 ``Simple Savings Tax Relief Act of 
2007''.

SEC. 2. EXEMPTION OF CERTAIN INTEREST INCOME FROM TAX.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to amounts specifically 
excluded from gross income) is amended by inserting after section 115 
the following new section:

``SEC. 116. PARTIAL EXCLUSION OF INTEREST RECEIVED BY INDIVIDUALS.

    ``(a) Exclusion From Gross Income.--Gross income does not include 
interest otherwise includible in gross income which is received during 
the taxable year by an individual.
    ``(b) Limitations.--
            ``(1) Maximum amount.--The aggregate amount excluded under 
        subsection (a) for any taxable year shall not exceed--
                    ``(A) in the case of any taxable year beginning in 
                2007, $200 ($400 in the case of a joint return), and
                    ``(B) in the case of any taxable year beginning 
                after 2007, $400 (twice such amount in the case of a 
                joint return).
            ``(2) Inflation adjustment.--In the case of any taxable 
        year beginning after 2008, the $400 amount contained in 
        paragraph (1)(B) 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 2007' for `calendar year 
                1992' in subparagraph (B) thereof.
                If any increase under the preceding sentence is not a 
                multiple of $10, such increase shall be rounded to the 
                nearest multiple of $10.
    ``(c) Interest.--For purposes of this section, the term `interest' 
means--
            ``(1) interest on deposits with a bank (as defined in 
        section 581),
            ``(2) amounts (whether or not designated as interest) paid 
        in respect of deposits, investment certificates, or 
        withdrawable or repurchasable shares, by--
                    ``(A) a mutual savings bank, cooperative bank, 
                domestic building and loan association, industrial loan 
                association or bank, or credit union, or
                    ``(B) any other savings or thrift institution which 
                is chartered and supervised under Federal or State law,
        the deposits or accounts in which are insured under Federal or 
        State law or which are protected and guaranteed under State 
        law.
    ``(d) Certain Nonresident Aliens Ineligible for Exclusion.--For 
purposes of this section, in the case of a nonresident alien 
individual, subsection (a) shall apply only in determining the taxes 
imposed for the taxable year pursuant to sections 871(b)(1) and 
877(b).''.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 32(i)(2) of such Code is 
        amended by inserting ``(determined without regard to section 
        116)'' before the comma.
            (2) Subparagraph (B) of section 86(b)(2) of such Code is 
        amended to read as follows:
                    ``(B) increased by the sum of--
                            ``(i) the amount of interest received or 
                        accrued by the taxpayer during the taxable year 
                        which is exempt from tax, and
                            ``(ii) the amount of interest received 
                        during the taxable year which is excluded from 
                        gross income under section 116.''.
            (3) Subsection (d) of section 135 of such Code is amended 
        by redesignating paragraph (4) as paragraph (5) and by 
        inserting after paragraph (3) the following new paragraph:
            ``(4) Coordination with section 116.--This section shall be 
        applied before section 116.''.
            (4) Paragraph (2) of section 265(a) of such Code is amended 
        by inserting before the period ``, or to purchase or carry 
        obligations or shares, or to make deposits, to the extent the 
        interest thereon is excludable from gross income under section 
        116''.
            (5) Subsection (c) of section 584 of such Code is amended 
        by adding at the end the following new flush sentence:
``The proportionate share of each participant in the amount of interest 
received by the common trust fund and to which section 116 applies 
shall be considered for purposes of such section as having been 
received by such participant.''.
            (6) Subsection (a) of section 643 of such Code is amended 
        by redesignating paragraph (7) as paragraph (8) and by 
        inserting after paragraph (6) the following new paragraph:
            ``(7) Interest.--There shall be included the amount of any 
        interest excluded from gross income pursuant to section 116.''.
            (7) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 115 the following new item:

``Sec. 116. Partial exclusion of dividends and interest received by 
                            individuals.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2006.
                                 <all>
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