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103D CONGRESS

1ST SESSION H. R. 1789

To provide for the tax treatment of certain distributions made by Alaska

Native Corporations.

IN THE HOUSE OF REPRESENTATIVES

APRIL 21, 1993

Mr. MCDERMOTT introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To provide for the tax treatment of certain distributions

made by Alaska Native Corporations.

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

3 SECTION 1. TAX TREATMENT OF CERTAIN DISTRIBUTIONS

4 MADE BY ALASKA NATIVE CORPORATIONS.

5 (a) GENERAL RULE.—For purposes of the Internal

6 Revenue Code of 1986, any qualified distribution made by

7 a Native Corporation shall be treated as a distribution not

8 made out of earnings and profits.

9 (b) QUALIFIED DISTRIBUTION.—For purposes of this

10 section—
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1 (1) IN GENERAL.—Except as otherwise pro2 vided in this subsection, the term ‘qualified distribu3 tion’ means any distribution to a Native (as defined

4 in section 3 of the Alaska Native Claims Settlement

5 Act) or descendant of a Native (as so defined)—

6 (A) which is made after the date of the en7 actment of the Alaska Native Claims Settle8 ment Act, and

9 (B) which but for this section would have

10 been treated as a dividend under chapter 1 of

11 such Code.

12 (2) LIMITATION.—The aggregate amount of

13 distributions made by any Native Corporation which

14 may be treated as qualified distributions shall not

15 exceed the lesser of—

16 (A) the aggregate amount received in cash

17 by such Corporation on or before July 9, 1992,

18 from the sale of any depletable property re19 ceived by such Corporation pursuant to the

20 Alaska Native Claims Settlement Act, or

21 (B) the aggregate bases (as determined

22 pursuant to section 21(c) of such Act) of de23 pletable property received by such Corporation

24 pursuant to such Act and sold on or before July

25 9, 1992, reduced by the aggregate bases of any
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1 depletable property sold in a sale referred to in

2 subsection (c)(2)(B).

3 (c) ADJUSTMENTS TO AMOUNT REALIZED.—For

4 purposes of subsection (b)(2)(A)—

5 (1) there shall be taken into account any

6 amount of cash received by the Corporation indi7 rectly through another corporation all the stock of

8 which is owned directly by such Corporation, but

9 (2) the following amounts shall be disregarded:

10 (A) Any amount realized directly or indi11 rectly by the Corporation for the use of losses

12 or credits of such Corporation or of a corpora13 tion all of the stock of which is owned directly

14 by such Corporation where such use would not

15 have been allowable without regard to section

16 60(b)(5) of the Tax Reform Act of 1984 (as

17 amended by section 1804(e)(4) of the Tax Re18 form Act of 1986, and repealed by section 5021

19 of the Technical and Miscellaneous Revenue Act

20 of 1988).

21 (B) Any amount realized directly or indi22 rectly by the Corporation from a special pur23 pose sale of any depletable property where the

24 loss incurred on such sale was used in a man25 ner which would not have been allowable, but
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1 for such section 60(b)(5) and such Corporation

2 realized directly or indirectly any consideration

3 for such use.

4 (d) SPECIAL PURPOSE SALE.—For purposes of sub5 section (c), the term ‘‘special purpose sale’’ means a sale

6 in which a loss was recognized, and which was made under

7 an agreement which was entered into either (1) after Octo8 ber 22, 1986, and on or before April 26, 1988, or (2) after

9 April 26, 1988, if the loss incurred thereon was used in

10 a contract referred to in section 5021(b) of the Technical

11 and Miscellaneous Revenue Act of 1988.

12 (e) NATIVE CORPORATION.—For purposes of this

13 section, the term ‘‘Native Corporation’’ has the meaning

14 given such term by section 3 of the Alaska Native Claims

15 Settlement Act.

16 (f) DEPLETABLE PROPERTY.—For purposes of this

17 section, the term ‘‘depletable property’’ means any prop18 erty of a character subject to the allowance for depletion

19 under section 611 of the Internal Revenue Code of 1986.

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