II 

111TH CONGRESS 

1ST SESSION S. 112 

To treat certain hospital support organizations as qualified organizations 

for purposes of determining acquisition indebtedness. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 6, 2009 

Mr. INOUYE introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To treat certain hospital support organizations as qualified 

organizations for purposes of determining acquisition indebtedness. 

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

3 SECTION 1. TREATMENT OF CERTAIN HOSPITAL SUPPORT 

4 ORGANIZATIONS AS QUALIFIED ORGANIZA5 TIONS FOR PURPOSES OF DETERMINING AC6 QUISITION INDEBTEDNESS. 

7 (a) IN GENERAL.—Subparagraph (C) of section 

8 514(c)(9) of the Internal Revenue Code of 1986 (relating 

9 to real property acquired by a qualified organization) is 

10 amended by striking ‘‘or’’ at the end of clause (iii), by 


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1 striking the period at the end of clause (iv) and inserting 

2 ‘‘; or’’, and by adding at the end the following new clause: 

3 ‘‘(v) a qualified hospital support orga4 nization (as defined in subparagraph 

5 (I)).’’. 

6 (b) QUALIFIED HOSPITAL SUPPORT ORGANIZA7 TIONS.—Paragraph (9) of section 514(c) of the Internal 

8 Revenue Code of 1986 is amended by adding at the end 

9 the following new subparagraph: 

10 ‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGA11 NIZATIONS.—For purposes of subparagraph 

12 (C)(iv), the term ‘qualified hospital support or13 ganization’ means, with respect to any eligible 

14 indebtedness (including any qualified refi15 nancing of such eligible indebtedness), a sup16 port organization (as defined in section 

17 509(a)(3)) which supports a hospital described 

18 in section 119(d)(4)(B) and with respect to 

19 which— 

20 ‘‘(i) more than half of its assets (by 

21 value) at any time since its organization— 

22 ‘‘(I) were acquired, directly or in23 directly, by testamentary gift or de24 vise, and 


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1 ‘‘(II) consisted of real property, 

2 and 

3 ‘‘(ii) the fair market value of the or4 ganization’s real estate acquired, directly 

5 or indirectly, by gift or devise, exceeded 25 

6 percent of the fair market value of all in7 vestment assets held by the organization 

8 immediately prior to the time that the eli9 gible indebtedness was incurred. 

10 For purposes of this subparagraph, the term 

11 ‘eligible indebtedness’ means indebtedness se12 cured by real property acquired by the organi13 zation, directly or indirectly, by gift or devise, 

14 the proceeds of which are used exclusively to ac15 quire any leasehold interest in such real prop16 erty or for improvements on, or repairs to, such 

17 real property. A determination under clauses (i) 

18 and (ii) of this subparagraph shall be made 

19 each time such an eligible indebtedness (or the 

20 qualified refinancing of such an eligible indebt21 edness) is incurred. For purposes of this sub22 paragraph, a refinancing of such an eligible in23 debtedness shall be considered qualified if such 

24 refinancing does not exceed the amount of the 


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1 refinanced eligible indebtedness immediately be2 fore the refinancing.’’. 

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

4 this section shall apply to indebtedness incurred on or 

5 after the date of the enactment of this Act. 

Æ 


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