I 

111TH CONGRESS 

1ST SESSION H. R. 3079 

To amend the Internal Revenue Code of 1986 to allow loans from simplified 

employee pension accounts of small business owners for use in the small 

business. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 26, 2009 

Ms. SPEIER (for herself, Mr. LEE of New York, Mr. DAVIS of Alabama, and 

Mr. THOMPSON of California) 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 allow loans 

from simplified employee pension accounts of small business owners for use in the small business. 

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 ‘‘Small Business Relief 

5 Act of 2009’’. 


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1 SEC. 2. LOANS FROM SIMPLIFIED EMPLOYEE PENSION AC2 COUNTS OF SMALL BUSINESS OWNERS FOR 

3 USE IN THE SMALL BUSINESS. 

4 (a) EXEMPTION FROM PROHIBITED TRANSACTION

5 RULES.—Section 4975 of the Internal Revenue Code of 

6 1986 (relating to tax on prohibited transactions) is 

7 amended by redesignating subsections (h) and (i) as sub8 sections (i) and (j), respectively, and by inserting after 

9 subsection (g) the following new subsection: 

10 ‘‘(h) SMALL BUSINESS IMPROVEMENT LOANS FROM

11 SIMPLIFIED EMPLOYEE PENSION ACCOUNTS OF SMALL

12 BUSINESS OWNERS.— 

13 ‘‘(1) IN GENERAL.—The prohibitions provided 

14 in subsection (c) shall not apply to any qualified 

15 small business improvement loan to a small business 

16 owner from a simplified employee pension of such 

17 owner. 

18 ‘‘(2) QUALIFIED SMALL BUSINESS IMPROVE19 MENT LOAN.—For purposes of this subsection, the 

20 term ‘qualified small business improvement loan’ 

21 means a loan from a simplified employee pension the 

22 proceeds of which are used in the conduct of the 

23 trade or business of the employer with respect to 

24 which such simplified employee pension is estab25 lished, including— 


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1 ‘‘(A) in the case of a corporation, the ac2 quisition by the small business owner of stock 

3 in such corporation at its original issue, and 

4 ‘‘(B) in the case of a partnership, the ac5 quisition by the small business owner of a cap6 ital or profits interest in such partnership from 

7 such partnership. 

8 ‘‘(3) SMALL BUSINESS OWNER.—For purposes 

9 of this subsection, the term ‘small business owner’ 

10 means, with respect to the employer with respect to 

11 which the simplified employee pension is established, 

12 any individual who— 

13 ‘‘(A) in the case of an employer which is 

14 an unincorporated trade or business, owns the 

15 entire interest in such employer, 

16 ‘‘(B) in the case of an employer which is 

17 a partnership, owns more than 10 percent of ei18 ther the capital or the profits interest in such 

19 employer (determined before any acquisition de20 scribed in paragraph (2)), and 

21 ‘‘(C) in the case of an employer which is 

22 a corporation, owns more than 10 percent of 

23 the stock of such employer (determined before 

24 any acquisition described in paragraph (2)). 


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1 ‘‘(4) REQUIREMENT THAT LOAN BE REPAYABLE

2 WITHIN 2 YEARS.—Paragraph (1) shall not apply to 

3 any loan unless such loan, by its terms, is required 

4 to be repaid within 2 years. 

5 ‘‘(5) REQUIREMENT OF LEVEL AMORTIZA6 TION.—Rules similar to the rules of section 

7 72(p)(2)(C) shall apply for purposes of this sub8 section. 

9 ‘‘(6) TERMINATION.—A loan shall not be treat10 ed as a qualified small business improvement loan if 

11 such loan is made after December 31, 2011.’’. 

12 (b) CONFORMING AMENDMENT.—Subsection (e) of 

13 section 408 of such Code (relating to tax treatment of ac14 counts and annuities) is amended by adding at the end 

15 the following new paragraph: 

16 ‘‘(6) EXCEPTION FOR SMALL BUSINESS IM17 PROVEMENT LOANS FROM SIMPLIFIED EMPLOYEE

18 PENSION ACCOUNTS OF SMALL BUSINESS OWN19 ERS.—In the case of a qualified small business im20 provement loan (within the meaning of section 

21 4975(h)) from a simplified employee pension— 

22 ‘‘(A) such plan shall not fail to be treated 

23 as an individual retirement plan under para24 graph (2) or (3) solely because of such loan, 

25 and 


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1 ‘‘(B) such loan shall not be treated as a 

2 distribution from such plan.’’. 

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

4 this section shall apply to loans made on or after Sep5 tember 1, 2008. For purposes of the preceding sentence, 

6 any distribution made before the date of the enactment 

7 of this Act which is recharacterized (before the end of the 

8 90-day period beginning with such date of enactment) as 

9 a loan shall be treated as a loan made on the date of such 

10 distribution (and any payments required to be made under 

11 such loan before such date of enactment shall be treated 

12 as timely made if made before the end of such 90-day pe13 riod). 

Æ 


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