II 

113TH CONGRESS 

2D SESSION S. 2680 

To direct the Secretary of Commerce to establish a voluntary program under 

which manufacturers may have products certified as meeting the standards of labels that indicate to consumers the extent to which the products 

are manufactured in the United States, to amend the Internal Revenue 

Code of 1986 to allow a credit against income tax for equity investments 

in small business concerns, to establish small business savings accounts, 

and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2014 

Mr. PRYOR (for himself and Mr. WALSH) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To direct the Secretary of Commerce to establish a voluntary 

program under which manufacturers may have products 

certified as meeting the standards of labels that indicate 

to consumers the extent to which the products are manufactured in the United States, to amend the Internal 

Revenue Code of 1986 to allow a credit against income 

tax for equity investments in small business concerns, 

to establish small business savings accounts, and for 

other purposes. 

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


jbell on DSK4SPTVN1PROD with BILLS
2 

•S 2680 IS

1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Buy it in America 

3 Act’’. 

4 SEC. 2. AMERICA STAR PROGRAM. 

5 (a) IN GENERAL.—The Secretary of Commerce shall 

6 establish a voluntary program, to be known as the ‘‘Amer7 ica Star Program’’, under which manufacturers may have 

8 products certified as meeting the standards of labels that 

9 indicate to consumers the extent to which the products 

10 are manufactured in the United States. 

11 (b) ESTABLISHMENT OF LABELS.— 

12 (1) IN GENERAL.—Not later than 2 years after 

13 the date of the enactment of this Act, the Secretary 

14 shall, by rule— 

15 (A) design America Star labels that are 

16 consistent with public perceptions of the mean17 ing of descriptions of the extent to which a 

18 product is manufactured in the United States; 

19 and 

20 (B) specify the standards that a product 

21 shall meet in order to bear a particular America 

22 Star label. 

23 (c) CERTIFICATION OF PRODUCTS.— 

24 (1) APPLICATION PROCEDURES.—A manufac25 turer that wishes to have a product certified as 

26 meeting the standards of an America Star label may 


jbell on DSK4SPTVN1PROD with BILLS
3 

•S 2680 IS

1 apply to the Secretary for certification in accordance 

2 with such procedures as the Secretary shall establish 

3 by rule. 

4 (2) ACTION BY SECRETARY.—Not later than 

5 such time after receiving an application for certifi6 cation under paragraph (1) as the Secretary deter7 mines reasonable by rule, the Secretary shall— 

8 (A) determine whether the product de9 scribed in the application meets the standards 

10 of the requested America Star label; 

11 (B) if the product meets such standards, 

12 certify the product; and 

13 (C) notify the manufacturer of the deter14 mination and whether the product has been cer15 tified. 

16 (d) MONITORING; WITHDRAWAL OF CERTIFI17 CATION.— 

18 (1) MONITORING.—The Secretary shall conduct 

19 such monitoring and compliance review as the Sec20 retary considers necessary— 

21 (A) to detect violations of subsection (f); 

22 and 

23 (B) to ensure that products certified as 

24 meeting the standards of America Star labels 

25 continue to meet such standards. 


jbell on DSK4SPTVN1PROD with BILLS
4 

•S 2680 IS

1 (2) WITHDRAWAL OF CERTIFICATION.— 

2 (A) ON INITIATIVE OF SECRETARY.—If the 

3 Secretary determines that a product certified as 

4 meeting the standards of an America Star label 

5 no longer meets such standards, the Secretary 

6 shall— 

7 (i) notify the manufacturer of the de8 termination and any corrective action that 

9 would enable the product to meet such 

10 standards; and 

11 (ii) if the manufacturer does not take 

12 such action within such time after receiv13 ing notification under clause (i) as the Sec14 retary determines reasonable by rule, the 

15 Secretary shall withdraw the certification 

16 of the product and notify the manufacturer 

17 of the withdrawal. 

18 (B) AT REQUEST OF MANUFACTURER.—At 

19 the request of the manufacturer of a product, 

20 the Secretary shall withdraw the certification of 

21 the product and notify the manufacturer of the 

22 withdrawal. 

23 (e) CONSULTATION.— 

24 (1) REQUIRED CONSULTATION WITH FEDERAL

25 TRADE COMMISSION.—In establishing America Star 


jbell on DSK4SPTVN1PROD with BILLS
5 

•S 2680 IS

1 labels and operating the America Star Program, the 

2 Secretary shall consult with the Federal Trade Com3 mission to ensure consistency with the requirements 

4 enforced by the Commission with respect to rep5 resentations of the extent to which products are 

6 manufactured in the United States. 

7 (2) SENSE OF CONGRESS ON CONSULTATION

8 WITH PRIVATE-SECTOR COMPANIES.—It is the sense 

9 of Congress that, in establishing America Star labels 

10 and operating the America Star Program, the Sec11 retary should consult with private-sector companies 

12 that have developed labeling programs to verify or 

13 certify to consumers the extent to which products 

14 are manufactured in the United States. 

15 (f) PROHIBITED CONDUCT.—Unless a certification 

16 by the Secretary that a product meets the standards of 

17 an America Star label is in effect, a person may not— 

18 (1) place such label on such product; 

19 (2) use such label in any marketing materials 

20 for such product; or 

21 (3) in any other way represent that such prod22 uct meets, or is certified as meeting, the standards 

23 of such label. 

24 (g) ENFORCEMENT.— 


jbell on DSK4SPTVN1PROD with BILLS
6 

•S 2680 IS

1 (1) ENFORCEMENT BY FEDERAL TRADE COM2 MISSION.— 

3 (A) REFERRAL.—The Secretary may refer 

4 to the Federal Trade Commission any person 

5 who the Secretary determines has violated sub6 section (f). 

7 (B) UNFAIR OR DECEPTIVE ACT OR PRAC8 TICE.—A violation of subsection (f) shall be 

9 treated as a violation of a rule defining an un10 fair or deceptive act or practice described under 

11 section 18(a)(1)(B) of the Federal Trade Com12 mission Act (15 U.S.C. 57a(a)(1)(B)). 

13 (C) POWERS OF COMMISSION.—The Fed14 eral Trade Commission shall enforce subsection 

15 (f) in the same manner, by the same means, 

16 and with the same jurisdiction, powers, and du17 ties as though all applicable terms and provi18 sions of the Federal Trade Commission Act (15 

19 U.S.C. 41 et seq.) were incorporated into and 

20 made a part of this section. 

21 (2) INELIGIBILITY.— 

22 (A) IN GENERAL.—Except as provided in 

23 subparagraph (C), if the Secretary determines 

24 that a manufacturer— 


jbell on DSK4SPTVN1PROD with BILLS
7 

•S 2680 IS

1 (i) has made a false statement to the 

2 Secretary in connection with the America 

3 Star Program; 

4 (ii) knowing, or having reason to 

5 know, that a product does not meet the 

6 standards of an America Star label— 

7 (I) has placed such label on such 

8 product; 

9 (II) has used such label in any 

10 marketing materials for such product; 

11 or 

12 (III) in any other way has rep13 resented that such product meets or is 

14 certified as meeting the standards of 

15 such label; or 

16 (iii) has otherwise violated the pur17 poses of the America Star Program; 

18 the Secretary may not, for a period of 5 years 

19 after the conduct described in clause (i), (ii), or 

20 (iii), certify the product to which such conduct 

21 relates as meeting the standards of an America 

22 Star label. 

23 (B) EFFECT ON EXISTING CERTIFI24 CATION.—In the case of a product with respect 

25 to which, at the time of the determination of 


jbell on DSK4SPTVN1PROD with BILLS
8 

•S 2680 IS

1 the Secretary under subparagraph (A), there is 

2 in effect a certification by the Secretary that 

3 the product meets the standards of an America 

4 Star label— 

5 (i) if the product continues to meet 

6 such standards, the Secretary may either 

7 withdraw the certification or allow the cer8 tification to continue in effect, as the Sec9 retary considers appropriate; and 

10 (ii) if the product no longer meets 

11 such standards, the Secretary shall with12 draw the certification. 

13 (C) WAIVER.—Notwithstanding subpara14 graph (A), the Secretary may waive or reduce 

15 the period referred to in such subparagraph if 

16 the Secretary determines that the waiver or re17 duction is in the best interests of the America 

18 Star Program. 

19 (h) ADMINISTRATIVE APPEAL.— 

20 (1) EXPEDITED APPEALS PROCEDURE.—The 

21 Secretary shall establish an expedited administrative 

22 appeals procedure under which persons may appeal 

23 an action of the Secretary under this section that— 

24 (A) adversely affects such person; or 


jbell on DSK4SPTVN1PROD with BILLS
9 

•S 2680 IS

1 (B) is inconsistent with the America Star 

2 Program. 

3 (2) APPEAL OF FINAL DECISION.—A final deci4 sion of the Secretary under paragraph (1) may be 

5 appealed to the United States district court for the 

6 district in which the person is located. 

7 (i) OFFSETTING COLLECTIONS.— 

8 (1) IN GENERAL.—The Secretary may collect 

9 reasonable fees from— 

10 (A) manufacturers that apply for certifi11 cation of products as meeting the standards of 

12 America Star labels; and 

13 (B) manufacturers of products for which 

14 such certifications are in effect. 

15 (2) ACCOUNT.—The fees collected under para16 graph (1) shall be credited to the account that in17 curs the cost of the certification services provided 

18 under this section. 

19 (3) USE.—The fees collected under paragraph 

20 (1) shall be available to the Secretary, without fur21 ther appropriation or fiscal-year limitation, to pay 

22 the expenses of the Secretary incurred in providing 

23 certification services under this section. 

24 (j) DEFINITIONS.—In this section: 


jbell on DSK4SPTVN1PROD with BILLS
10 

•S 2680 IS

1 (1) AMERICA STAR LABEL.—The term ‘‘Amer2 ica Star label’’ means a label described in subsection 

3 (a) and established by the Secretary under sub4 section (b)(1). 

5 (2) AMERICA STAR PROGRAM.—The term 

6 ‘‘America Star Program’’ means the voluntary label7 ing program established under this section. 

8 (3) SECRETARY.—The term ‘‘Secretary’’ means 

9 the Secretary of Commerce. 

10 SEC. 3. ANGEL INVESTMENT TAX CREDIT. 

11 (a) IN GENERAL.—Subpart B of part IV of sub12 chapter A of chapter 1 of the Internal Revenue Code of 

13 1986 is amended by adding at the end the following new 

14 section: 

15 ‘‘SEC. 30E. ANGEL INVESTMENT TAX CREDIT. 

16 ‘‘(a) ALLOWANCE OF CREDIT.—There shall be al17 lowed as a credit against the tax imposed by this chapter 

18 for the taxable year an amount equal to 25 percent of the 

19 qualified equity investments made by a qualified investor 

20 during the taxable year. 

21 ‘‘(b) QUALIFIED EQUITY INVESTMENT.—For pur22 poses of this section— 

23 ‘‘(1) IN GENERAL.—The term ‘qualified equity 

24 investment’ means any equity investment in a quali25 fied small business entity if— 


jbell on DSK4SPTVN1PROD with BILLS
11 

•S 2680 IS

1 ‘‘(A) such investment is acquired by the 

2 taxpayer at its original issue (directly or 

3 through an underwriter) solely in exchange for 

4 cash, and 

5 ‘‘(B) such investment is designated for 

6 purposes of this section by the qualified small 

7 business entity. 

8 ‘‘(2) EQUITY INVESTMENT.—The term ‘equity 

9 investment’ means— 

10 ‘‘(A) any form of equity, including a gen11 eral or limited partnership interest, common 

12 stock, preferred stock (other than nonqualified 

13 preferred stock as defined in section 351(g)(2)), 

14 with or without voting rights, without regard to 

15 seniority position and whether or not convert16 ible into common stock or any form of subordi17 nate or convertible debt, or both, with warrants 

18 or other means of equity conversion, and 

19 ‘‘(B) any capital interest in an entity 

20 which is a partnership. 

21 ‘‘(3) REDEMPTIONS.—A rule similar to the rule 

22 of section 1202(c)(3) shall apply for purposes of this 

23 subsection. 

24 ‘‘(c) QUALIFIED SMALL BUSINESS ENTITY.—For 

25 purposes of this section— 


jbell on DSK4SPTVN1PROD with BILLS
12 

•S 2680 IS

1 ‘‘(1) IN GENERAL.—The term ‘qualified small 

2 business entity’ means any domestic corporation or 

3 partnership if such corporation or partnership is cer4 tified by the Secretary under subsection (h) and— 

5 ‘‘(A) is a small business (as defined in sec6 tion 41(b)(3)(D)(iii)), 

7 ‘‘(B) has its headquarters as the principal 

8 place of business in the United States, 

9 ‘‘(C) is principally engaged in a qualified 

10 high technology trade or business, 

11 ‘‘(D) has been in operation in the United 

12 States for not more than 10 consecutive years 

13 as of the date of the qualified equity invest14 ment, 

15 ‘‘(E) employs less than 100 full-time equiv16 alent employees as defined in section 

17 45R(d)(2)(A) as of the date of such investment, 

18 ‘‘(F) has more than 50 percent of the em19 ployees performing substantially all of their 

20 services in the United States as of the date of 

21 such investment, 

22 ‘‘(G) at least 80 percent (by value) of the 

23 assets of such corporation or partnership are 

24 used by such corporation or partnership in the 


jbell on DSK4SPTVN1PROD with BILLS
13 

•S 2680 IS

1 active conduct of 1 or more qualified high tech2 nology trades or businesses, and 

3 ‘‘(H) has equity investments designated for 

4 purposes of this paragraph. 

5 ‘‘(2) DETERMINATION OF USE OF ASSETS.— 

6 ‘‘(A) IN GENERAL.—For purposes of para7 graph (1)(G), assets used in activities described 

8 in subparagraph (B) shall be treated as used in 

9 the active conduct of a qualified high tech10 nology trade or business. Any determination 

11 under this subparagraph shall be made without 

12 regard to whether a corporation or partnership 

13 has any gross income from such activities at the 

14 time of the determination. 

15 ‘‘(B) ACTIVITIES.—An activity is described 

16 in this section if such activity is in connection 

17 with a future qualified high technology trade or 

18 business and such activity is— 

19 ‘‘(i) a start-up activity described in 

20 section 195(c)(1)(A), or 

21 ‘‘(ii) an activity resulting in the pay22 ment or incurring of qualified research ex23 penses (as defined in section 41(b)). 

24 ‘‘(3) DESIGNATION OF EQUITY INVEST25 MENTS.—For purposes of paragraph (1)(H), an eqVerDate Mar 15 2010 00:18 Aug 01, 2014 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2680.IS S2680

jbell on DSK4SPTVN1PROD with BILLS
14 

•S 2680 IS

1 uity investment shall not be treated as designated if 

2 such designation would result in the aggregate 

3 amount which may be taken into account under this 

4 section with respect to qualified equity investments 

5 in a qualified small business entity exceeds— 

6 ‘‘(A) $10,000,000, taking into account the 

7 total amount of all qualified equity investments 

8 made by all taxpayers for the taxable year and 

9 all preceding taxable years, 

10 ‘‘(B) $2,000,000, taking into account the 

11 total amount of all qualified equity investments 

12 made by all taxpayers for such taxable year, 

13 and 

14 ‘‘(C) $1,000,000, taking into account the 

15 total amount of all qualified equity investments 

16 made by the taxpayer for such taxable year. 

17 ‘‘(4) QUALIFIED HIGH TECHNOLOGY TRADE OR

18 BUSINESS.—For purposes of this section, the term 

19 ‘qualified high technology trade or business’ is a 

20 high technology trade or business which is related 

21 to— 

22 ‘‘(A) advanced materials, nanotechnology, 

23 or precision manufacturing, 

24 ‘‘(B) aerospace, aeronautics, or defense, 

25 ‘‘(C) biotechnology or pharmaceuticals, 


jbell on DSK4SPTVN1PROD with BILLS
15 

•S 2680 IS

1 ‘‘(D) electronics, semiconductors, software, 

2 or computer technology, 

3 ‘‘(E) energy, environment, or clean tech4 nologies, 

5 ‘‘(F) forest products or agricultural 

6 sciences, 

7 ‘‘(G) information technology, communica8 tion technology, digital media, opto-electronics 

9 or photonics, 

10 ‘‘(H) life sciences or medical sciences, 

11 ‘‘(I) marine technology or aquaculture, 

12 ‘‘(J) manufacturing, processing, or assem13 bling innovative technology products, 

14 ‘‘(K) transportation, or 

15 ‘‘(L) any other high technology trade or 

16 business as determined by the Secretary. 

17 ‘‘(d) QUALIFIED INVESTOR.—For purposes of this 

18 section— 

19 ‘‘(1) IN GENERAL.—The term ‘qualified inves20 tor’ means an accredited investor, as defined by the 

21 Securities and Exchange Commission, investor net22 work, or investor fund who review new or proposed 

23 businesses for potential investment. 

24 ‘‘(2) INVESTOR NETWORK.—The term ‘investor 

25 network’ means a group of accredited investors orgaVerDate Mar 15 2010 00:18 Aug 01, 2014 Jkt 039200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S2680.IS S2680

jbell on DSK4SPTVN1PROD with BILLS
16 

•S 2680 IS

1 nized for the sole purpose of making qualified equity 

2 investments. 

3 ‘‘(3) INVESTOR FUND.— 

4 ‘‘(A) IN GENERAL.—The term ‘investor 

5 fund’ means a corporation that for the applica6 ble taxable year is treated as an S corporation 

7 or a general partnership, limited partnership, 

8 limited liability partnership, trust, or limited li9 ability company and which for the applicable 

10 taxable year is not taxed as a corporation. 

11 ‘‘(B) ALLOCATION OF CREDIT.— 

12 ‘‘(i) IN GENERAL.—Except as pro13 vided in clause (ii), the credit allowed 

14 under subsection (a) shall be allocated to 

15 the shareholders or partners of the investor 

16 fund in proportion to their ownership in17 terest or as specified in the fund’s organi18 zational documents. 

19 ‘‘(ii) SINGLE MEMBER LIMITED LI20 ABILITY COMPANY.—If the investor fund is 

21 a single member limited liability company 

22 that is disregarded as an entity separate 

23 from its owner, the credit allowed under 

24 subsection (a) may be claimed by such lim25 ited liability company’s owner, if such 


jbell on DSK4SPTVN1PROD with BILLS
17 

•S 2680 IS

1 owner is a person subject to the tax under 

2 this title. 

3 ‘‘(4) EXCLUSION.—The term ‘qualified investor’ 

4 does not include— 

5 ‘‘(A) a person controlling at least 50 per6 cent of the qualified small business entity, 

7 ‘‘(B) an employee of such entity, or 

8 ‘‘(C) any bank, bank and trust company, 

9 insurance company, trust company, national 

10 bank, savings association or building and loan 

11 association for activities that are a part of its 

12 normal course of business. 

13 ‘‘(e) NATIONAL LIMITATION ON AMOUNT OF INVEST14 MENTS DESIGNATED.— 

15 ‘‘(1) IN GENERAL.—There is an angel invest16 ment tax credit limitation of $100,000,000 for each 

17 year of the investment period. 

18 ‘‘(2) INVESTMENT PERIOD.—The investment 

19 period is calendar years 2015 through 2019. 

20 ‘‘(3) ALLOCATION OF LIMITATION.—The limita21 tion under paragraph (1) shall be allocated by the 

22 Secretary among qualified small business entities se23 lected by the Secretary. 

24 ‘‘(4) CARRYOVER OF UNUSED LIMITATION.—If 

25 the angel investment tax credit limitation for any 


jbell on DSK4SPTVN1PROD with BILLS
18 

•S 2680 IS

1 calendar year exceeds the aggregate amount allo2 cated under paragraph (3) for such year, such limi3 tation for the succeeding calendar year shall be in4 creased by the amount of such excess. No amount 

5 may be carried under the preceding sentence to any 

6 calendar year after 2022. 

7 ‘‘(f) APPLICATION WITH OTHER CREDITS.— 

8 ‘‘(1) BUSINESS CREDIT TREATED AS PART OF

9 GENERAL BUSINESS CREDIT.—Except as provided in 

10 paragraph (2), the credit which would be allowed 

11 under subsection (a) for any taxable year (deter12 mined without regard to this subsection) shall be 

13 treated as a credit listed in section 38(b) for such 

14 taxable year (and not allowed under subsection (a)). 

15 ‘‘(2) PERSONAL CREDIT.— 

16 ‘‘(A) IN GENERAL.—In the case of an indi17 vidual who elects the application of this para18 graph, for purposes of this title, the credit al19 lowed under subsection (a) for any taxable year 

20 (determined after application of paragraph (1)) 

21 shall be treated as a credit allowable under sub22 part A for such taxable year. 

23 ‘‘(B) CARRYFORWARD OF UNUSED CRED24 IT.—If the credit allowable under subsection (a) 

25 by reason of subparagraph (A) exceeds the limiVerDate Mar 15 2010 00:18 Aug 01, 2014 Jkt 039200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S2680.IS S2680

jbell on DSK4SPTVN1PROD with BILLS
19 

•S 2680 IS

1 tation imposed by section 26(a) for such taxable 

2 year, reduced by the sum of the credits allow3 able under subpart A (other than this section) 

4 for such taxable year, such excess shall be car5 ried to each of the succeeding 20 taxable years 

6 to the extent that such unused credit may not 

7 be taken into account under subsection (a) by 

8 reason of subparagraph (A) for a prior taxable 

9 year because of such limitation. 

10 ‘‘(g) SPECIAL RULES.— 

11 ‘‘(1) RELATED PARTIES.—For purposes of this 

12 section— 

13 ‘‘(A) IN GENERAL.—All related persons 

14 shall be treated as 1 person. 

15 ‘‘(B) RELATED PERSONS.—A person shall 

16 be treated as related to another person if the 

17 relationship between such persons would result 

18 in the disallowance of losses under section 267 

19 or 707(b). 

20 ‘‘(2) BASIS.—For purposes of this subtitle, the 

21 basis of any investment with respect to which a cred22 it is allowable under this section shall be reduced by 

23 the amount of such credit so allowed. This sub24 section shall not apply for purposes of sections 1202, 

25 1397B, and 1400B. 


jbell on DSK4SPTVN1PROD with BILLS
20 

•S 2680 IS

1 ‘‘(3) RECAPTURE.—The Secretary shall, by reg2 ulations, provide for recapturing the benefit of any 

3 credit allowable under subsection (a) with respect to 

4 any qualified equity investment which is held by the 

5 taxpayer less than 3 years, except that no benefit 

6 shall be recaptured in the case of— 

7 ‘‘(A) transfer of such investment by reason 

8 of the death of the taxpayer, 

9 ‘‘(B) transfer between spouses, 

10 ‘‘(C) transfer incident to the divorce (as 

11 defined in section 1041) of such taxpayer, or 

12 ‘‘(D) a transaction to which section 381(a) 

13 applies (relating to certain acquisitions of the 

14 assets of one corporation by another corpora15 tion). 

16 ‘‘(h) REGULATIONS.—For purposes of this section— 

17 ‘‘(1) IN GENERAL.—Not later than 180 days 

18 after the date of enactment of this section, the Sec19 retary shall prescribe regulations to— 

20 ‘‘(A) certify qualified small business enti21 ties, 

22 ‘‘(B) prevent the abuse of the purposes of 

23 this section, 

24 ‘‘(C) impose appropriate reporting require25 ments and metric for measuring the effectiveVerDate Mar 15 2010 00:18 Aug 01, 2014 Jkt 039200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S2680.IS S2680

jbell on DSK4SPTVN1PROD with BILLS
21 

•S 2680 IS

1 ness of the tax credit, including the impact of 

2 the tax credit on domestic job creation, and 

3 ‘‘(D) apply the provisions of this section to 

4 newly formed entities. 

5 ‘‘(2) CERTIFICATION AND SELECTION CRI6 TERIA.—The regulations for certifying qualified 

7 small business entities shall require the following: 

8 ‘‘(A) CERTIFICATION.— 

9 ‘‘(i) APPLICATION FOR TAX CREDIT.— 

10 Each applicant for certification as a quali11 fied small business entity shall submit an 

12 application containing such information as 

13 the Secretary may require. 

14 ‘‘(ii) TIME TO MEET CRITERIA FOR

15 CERTIFICATION.—Each applicant for cer16 tification shall have 1 year from the date 

17 of acceptance by the Secretary of the appli18 cation during which to provide to the Sec19 retary evidence that the requirements of 

20 the certification have been met. 

21 ‘‘(B) SELECTION CRITERIA.—In deter22 mining which applicants to certify under this 

23 paragraph, the Secretary— 

24 ‘‘(i) shall take into consideration only 

25 those applicants where there is a reasonVerDate Mar 15 2010 00:18 Aug 01, 2014 Jkt 039200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S2680.IS S2680

jbell on DSK4SPTVN1PROD with BILLS
22 

•S 2680 IS

1 able expectation of commercial viability, 

2 and 

3 ‘‘(ii) shall take into consideration 

4 which applicants— 

5 ‘‘(I) will provide the greatest do6 mestic job creation (both direct and 

7 indirect) during the tax credit period, 

8 and 

9 ‘‘(II) have the greatest potential 

10 for technological innovation and com11 mercial deployment.’’. 

12 (b) CREDIT MADE PART OF GENERAL BUSINESS

13 CREDIT.—Subsection (b) of section 38 of the Internal 

14 Revenue Code of 1986 is amended in paragraph (35), by 

15 striking ‘‘plus’’, in paragraph (36), by striking the period 

16 at the end and inserting ‘‘, plus’’, and by adding at the 

17 end the following new paragraph: 

18 ‘‘(37) the portion of the angel investment tax 

19 credit to which section 30E(f)(1) applies.’’. 

20 (c) CONFORMING AMENDMENTS.—Section 1016(a) of 

21 the Internal Revenue Code of 1986 is amended by striking 

22 ‘‘and’’ at the end of paragraph (36), by striking the period 

23 at the end of paragraph (37) and inserting ‘‘, and’’, and 

24 by inserting after paragraph (37) the following new para25 graph: 


jbell on DSK4SPTVN1PROD with BILLS
23 

•S 2680 IS

1 ‘‘(38) to the extent provided in section 

2 30E(g)(2).’’. 

3 (d) CLERICAL AMENDMENT.—The table of sections 

4 for subpart B of part IV of subchapter A of chapter 1 

5 of the Internal Revenue Code of 1986 is amended by add6 ing at the end the following new item: 

‘‘Sec. 30E. Angel investment tax credit.’’. 

7 (e) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to investments made after Decem9 ber 31, 2013, in taxable years ending after such date. 

10 (f) GAO REPORT.—Not later than two years after 

11 the date of enactment of this Act, the Comptroller General 

12 of the United States, pursuant to an audit of the angel 

13 investment tax credit program established under section 

14 30E of the Internal Revenue Code of 1986 (as added by 

15 subsection (a)), shall report to Congress on such program, 

16 including— 

17 (1) the implementation of the regulations pro18 mulgated by the Secretary, 

19 (2) the amount of tax credits allocated to quali20 fied small business entities in the prior year, and 

21 (3) the effectiveness of the tax credit in increas22 ing domestic job creation by the qualified small busi23 nesses that receive the tax credit. 


jbell on DSK4SPTVN1PROD with BILLS
24 

•S 2680 IS

1 SEC. 4. PERMANENT FULL EXCLUSION APPLICABLE TO 

2 QUALIFIED SMALL BUSINESS STOCK. 

3 (a) IN GENERAL.—Paragraph (4) of section 1202(a) 

4 of the Internal Revenue Code of 1986 is amended by strik5 ing ‘‘and before January 1, 2014’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) Section 1202(a) of such Code, as amended 

8 by subsection (a), is amended by striking paragraphs 

9 (2) and (3) and by redesignating paragraph (4) as 

10 paragraph (2). 

11 (2) Section 1202(a)(2) of such Code, as redes12 ignated by paragraph (1), is amended by adding 

13 ‘‘and’’ at the end of subparagraph (A), by striking 

14 subparagraph (B), and by redesignating subpara15 graph (C) as subparagraph (B). 

16 (3) Section 1223(13) of such Code is amended 

17 by striking ‘‘1202(a)(2),’’. 

18 (4) The heading for section 1202 of such Code 

19 is amended by striking ‘‘PARTIAL EXCLUSION

20 FOR GAIN’’ and inserting ‘‘EXCLUSION OF CER21 TAIN GAIN’’. 

22 (5) The item relating to section 1202 in the 

23 table of sections for part I of subchapter P of chap24 ter 1 of such Code is amended by striking ‘‘Partial 

25 exclusion for gain’’ and inserting ‘‘Exclusion of cer26 tain gain’’. 


jbell on DSK4SPTVN1PROD with BILLS
25 

•S 2680 IS

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

2 this section apply to stock acquired after December 31, 

3 2013. 

4 SEC. 5. ESTABLISHMENT OF SMALL BUSINESS STARTUP 

5 SAVINGS ACCOUNTS. 

6 (a) IN GENERAL.—Subpart A of part I of subchapter 

7 D of chapter 1 of the Internal Revenue Code of 1986 is 

8 amended by inserting after section 408A the following new 

9 section: 

10 ‘‘SEC. 408B. SMALL BUSINESS STARTUP SAVINGS AC11 COUNTS. 

12 ‘‘(a) GENERAL RULE.—Except as provided in this 

13 section, a Small Business Startup Savings Account shall 

14 be treated for purposes of this title in the same manner 

15 as an individual retirement plan. 

16 ‘‘(b) SMALL BUSINESS STARTUP SAVINGS AC17 COUNT.—For purposes of this title, the term ‘Small Busi18 ness Startup Savings Account’ means an individual retire19 ment account (as defined in section 409(a)) which is des20 ignated at the time of establishment of the plan as a Small 

21 Business Startup Savings Account. Such designation shall 

22 be made in such manner as the Secretary may prescribe. 

23 ‘‘(c) TREATMENT OF CONTRIBUTIONS.— 


jbell on DSK4SPTVN1PROD with BILLS
26 

•S 2680 IS

1 ‘‘(1) NO DEDUCTION ALLOWED.—No deduction 

2 shall be allowed under section 219 for a contribution 

3 to a Small Business Startup Savings Account. 

4 ‘‘(2) CONTRIBUTION LIMIT.— 

5 ‘‘(A) IN GENERAL.—The aggregate 

6 amount of contributions for any taxable year to 

7 all Small Business Startup Savings Accounts 

8 maintained for the benefit of an individual shall 

9 not exceed $10,000. 

10 ‘‘(B) AGGREGATE LIMITATION.—The ag11 gregate of the amounts which may be taken 

12 into account under subparagraph (A) for all 

13 taxable years with respect to all Small Business 

14 Startup Savings Accounts maintained for the 

15 benefit of an individual shall not exceed 

16 $150,000. 

17 ‘‘(C) COST-OF-LIVING ADJUSTMENT.—The 

18 Secretary shall adjust annually the $10,000 

19 amount in subparagraph (A) for increases in 

20 the cost-of-living at the same time and in the 

21 same manner as adjustments under section 

22 415(d); except that the base period shall be the 

23 calendar quarter beginning July 1, 2014, and 

24 any increase which is not a multiple of $500 


jbell on DSK4SPTVN1PROD with BILLS
27 

•S 2680 IS

1 shall be rounded to the next lowest multiple of 

2 $500. 

3 ‘‘(3) CONTRIBUTIONS PERMITTED AFTER AGE

701 4 ⁄2.—Contributions to a Small Business Startup 

5 Savings Account may be made even after the indi6 vidual for whom the account is maintained has attained age 701 7 ⁄2. 

8 ‘‘(4) ROLLOVERS FROM RETIREMENT PLANS

9 NOT ALLOWED.—A taxpayer shall not be allowed to 

10 make a qualified rollover contribution to a Small 

11 Business Startup Savings Account from any quali12 fied retirement plan (as defined in section 4974(c)). 

13 ‘‘(d) DISTRIBUTION RULES.—For purposes of this 

14 title— 

15 ‘‘(1) QUALIFIED DISTRIBUTIONS.— 

16 ‘‘(A) IN GENERAL.—Any qualified distribu17 tion from a Small Business Startup Savings Ac18 count shall not be includible in gross income. 

19 ‘‘(B) QUALIFIED DISTRIBUTION DE20 FINED.—For purposes of this subsection, the 

21 term ‘qualified distribution’ means any payment 

22 or distribution made for operating capital, the 

23 purchase of equipment or facilities, marketing, 

24 training, incorporation, and accounting fees. 


jbell on DSK4SPTVN1PROD with BILLS
28 

•S 2680 IS

1 ‘‘(C) LIMITATIONS ON QUALIFIED DIS2 TRIBUTIONS.—All qualified distributions from a 

3 Small Business Startup Savings Account— 

4 ‘‘(i) shall be limited to a single busi5 ness, and 

6 ‘‘(ii) must be disbursed not later than 

7 the last day of the 5th taxable year begin8 ning after the initial disbursement. 

9 ‘‘(2) NONQUALIFIED DISTRIBUTIONS.— 

10 ‘‘(A) IN GENERAL.—In applying section 72 

11 to any distribution from a Small Business 

12 Startup Savings Account which is not a quali13 fied distribution, such distribution shall be 

14 treated as made from contributions to the 

15 Small Business Startup Savings Account to the 

16 extent that such distribution, when added to all 

17 previous distributions from the Small Business 

18 Startup Savings Account, does not exceed the 

19 aggregate amount of contributions to the Small 

20 Business Startup Savings Account. 

21 ‘‘(B) TREATMENT OF AMOUNTS REMAIN22 ING IN ACCOUNT.—Any remaining amount in a 

23 Small Business Startup Savings Account fol24 lowing the date described in paragraph 

25 (1)(A)(ii) shall be treated as distributed during 


jbell on DSK4SPTVN1PROD with BILLS
29 

•S 2680 IS

1 the taxable year following such date and such 

2 distribution shall not be treated as a qualified 

3 distribution.’’. 

4 (b) EXCESS CONTRIBUTIONS.—Section 4973 of the 

5 Internal Revenue Code of 1986 is amended by adding at 

6 the end the following new subsection: 

7 ‘‘(h) EXCESS CONTRIBUTIONS TO SMALL BUSINESS

8 STARTUP SAVINGS ACCOUNTS.—For purposes of this sec9 tion, in the case of contributions to all Small Business 

10 Startup Savings Accounts (within the meaning of section 

11 408B(b)) maintained for the benefit of an individual, the 

12 term ‘excess contributions’ means the sum of— 

13 ‘‘(1) the excess (if any) of— 

14 ‘‘(A) the amount contributed to such ac15 counts for the taxable year, over 

16 ‘‘(B) the amount allowable as a contribu17 tion under section 408B(c)(2) for such taxable 

18 year, and 

19 ‘‘(2) the amount determined under this sub20 section for the preceding taxable year, reduced by 

21 the sum of— 

22 ‘‘(A) the distributions out of the accounts 

23 for the taxable year, and 

24 ‘‘(B) the excess (if any) of— 


jbell on DSK4SPTVN1PROD with BILLS
30 

•S 2680 IS

1 ‘‘(i) the maximum amount allowable 

2 as a contribution under section 408B(c)(2) 

3 for such taxable year, over 

4 ‘‘(ii) the amount contributed to such 

5 accounts for such taxable year.’’. 

6 (c) CONFORMING AMENDMENT.—The table of sec7 tions for subpart A of part I of subchapter D of chapter 

8 1 of the Internal Revenue Code of 1986 is amended by 

9 inserting after the item relating to section 408A the fol10 lowing new item: 

‘‘Sec. 408B. Small Business Startup Savings Accounts.’’. 

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

12 this section shall apply to taxable years beginning after 

13 December 31, 2013. 

Æ 


jbell on DSK4SPTVN1PROD with BILLS