I 

111TH CONGRESS 

1ST SESSION H. R. 1783 

To amend the Internal Revenue Code of 1986 to encourage investment in 

certain industries by providing an exclusion from tax on certain gains. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2009 

Mr. POLIS of Colorado 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 encourage 

investment in certain industries by providing an exclusion 

from tax on certain gains. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Enterprise Sector In5 vestment Opportunity Act of 2009’’. 

6 SEC. 2. EXCLUSION OF CAPITAL GAINS ON INVESTMENTS 

7 IN CERTAIN INDUSTRIES. 

8 (a) IN GENERAL.—Part III of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting after section 139C the following new section: 

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1 ‘‘SEC. 139D. CAPITAL GAINS ON INVESTMENTS IN CERTAIN 

2 INDUSTRIES. 

3 ‘‘(a) IN GENERAL.—Gross income shall not include 

4 gain from the sale of qualified investment property if— 

5 ‘‘(1) such property is acquired during the 18- 

6 month period beginning on the date of the enact7 ment of this section, and 

8 ‘‘(2) such property is held for more than 2 

9 years. 

10 ‘‘(b) QUALIFIED INVESTMENT PROPERTY.—For pur11 poses of this section— 

12 ‘‘(1) IN GENERAL.—The term ‘qualified invest13 ment property’ means any— 

14 ‘‘(A) stock in a specified domestic corpora15 tion acquired by the taxpayer at its original 

16 issue, and 

17 ‘‘(B) any capital or profits interest in a 

18 specified domestic partnership acquired by the 

19 taxpayer from the partnership. 

20 ‘‘(2) SPECIFIED CORPORATIONS AND PARTNER21 SHIPS.— 

22 ‘‘(A) IN GENERAL.—A corporation or part23 nership shall be treated as specified for pur24 poses of paragraph (1) if such corporation or 

25 partnership is a financial institution or an auto26 motive company. 

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1 ‘‘(B) FINANCIAL INSTITUTION.—The term 

2 ‘financial institution’ means any institution, in3 cluding, but not limited to, any bank, savings 

4 association, credit union, security broker or 

5 dealer, or insurance company, established and 

6 regulated under the laws of the United States 

7 or any State, territory, or possession of the 

8 United States, the District of Columbia, Com9 monwealth of Puerto Rico, Commonwealth of 

10 Northern Mariana Islands, Guam, American 

11 Samoa, or the United States Virgin Islands, 

12 and having significant operations in the United 

13 States, but excluding any central bank of, or in14 stitution owned by, a foreign government. 

15 ‘‘(C) AUTOMOTIVE COMPANY.—The term 

16 ‘automotive company’ means any person the 

17 majority of the gross receipts of which are de18 rived from the research, design, production, or 

19 sale of personal or mass transportation vehicles 

20 or components for such vehicles. 

21 ‘‘(c) INELIGIBILITY FOR TARP ASSISTANCE.—In 

22 any corporation or partnership issues stock or any capital 

23 or profits interest during the 18-month period beginning 

24 on the date of the enactment of this section which results 

25 in the aggregate fair market value of all such stock and 

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1 interests (determined, in each case, as of the date of 

2 issuance) issued by such corporation or partnership during 

3 such period to equal or exceed $500,000, such corporation 

4 or partnership shall not be eligible to receive any assist5 ance under title I of the Emergency Economic Stabiliza6 tion Act of 2008 after the date of such issuance.’’. 

7 (b) CLERICAL AMENDMENT.—The table of sections 

8 for part III of subchapter B of chapter 1 of such Code 

9 is amended by inserting after the item relating to section 

10 139C the following new item: 

‘‘Sec. 139D. Capital gains on investments in certain industries.’’. 

11 (c) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to property acquired after the date 

13 of the enactment of this section. 

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