I 

115TH CONGRESS 

1ST SESSION H. R. 4424 

To amend the Internal Revenue Code of 1986 to provide an exclusion from 

gross income for interest on certain small business loans. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 16, 2017 

Mr. BLUM (for himself, Mr. CHABOT, and Mr. CRIST) 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 provide 

an exclusion from gross income for interest on certain 

small business loans. 

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

3 SECTION 1. EXCLUSION OF INTEREST ON CERTAIN SMALL 

4 BUSINESS LOANS. 

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 of the Internal Revenue Code of 1986 is amended 

7 by inserting after section 139F the following new section: 


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1 ‘‘SEC. 139G. INTEREST ON CERTAIN SMALL BUSINESS 

2 LOANS. 

3 ‘‘(a) IN GENERAL.—In the case of a bank described 

4 in subsection (c), gross income shall not include qualified 

5 interest received from a small business during the taxable 

6 year. 

7 ‘‘(b) QUALIFIED INTEREST.—The term ‘qualified in8 terest’ means, with respect to a small business, interest 

9 on indebtedness of not more than $5,000,000— 

10 ‘‘(1) secured by land situated in the United 

11 States that is used or held by the small business in 

12 connection with the active conduct of a farming 

13 business, or 

14 ‘‘(2) incurred in the ordinary course of the 

15 trade or business of the small business. 

16 ‘‘(c) BANK DESCRIBED.— 

17 ‘‘(1) IN GENERAL.—A bank is described in this 

18 subsection if the bank has less than $50 billion in 

19 assets at the close of the preceding taxable year. 

20 ‘‘(2) BANK DEFINED.—For purposes of this 

21 subsection— 

22 ‘‘(A) IN GENERAL.—The term ‘bank’ 

23 means— 

24 ‘‘(i) any financial institution described 

25 in section 581 or 591, and 


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1 ‘‘(ii) a corporation which, under the 

2 laws of the State of its incorporation, is 

3 subject to supervision and examination by 

4 the Commissioner of Banking or other offi5 cer of such State in charge of the adminis6 tration of the banking laws of such State. 

7 ‘‘(B) HOLDING COMPANY.—The term 

8 ‘bank’ includes— 

9 ‘‘(i) any bank holding company (with10 in the meaning of section 2(a) of the Bank 

11 Holding Company Act of 1956), and 

12 ‘‘(ii) any subsidiary of a financial in13 stitution described in section 581 or 591 or 

14 of any bank holding company if such sub15 sidiary is predominantly engaged (directly 

16 or indirectly) in the active conduct of a 

17 banking, financing, or similar business. 

18 ‘‘(d) SMALL BUSINESS.—The term ‘small business’ 

19 means a small business concern as defined under section 

20 3 of the Small Business Act (15 U.S.C. 632). 

21 ‘‘(e) FARMING BUSINESS.—The term ‘farming busi22 ness’ has the meaning given such term by section 

23 263A(e)(4). 

24 ‘‘(f) TERMINATION.—This section shall not apply to 

25 interest received after December 31, 2018.’’. 


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

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

3 is amended by inserting after the item relating to section 

4 139F the following new item: 

‘‘Sec. 139G. Interest on certain small business loans.’’. 

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

6 this section shall apply to interest received in taxable years 

7 beginning after December 31, 2017. 

Æ 


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