I 
111TH CONGRESS 
2D SESSION 
H. R. 5691 
To amend the Internal Revenue Code of 1986 to provide a credit for 
investment in new or expanding small businesses. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 1, 2010 
Mr. HOEKSTRA 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 
a credit for investment in new or expanding small businesses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CREDIT FOR QUALIFIED SMALL BUSINESS IN-
VESTMENTS. 
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by inserting after section 25D the fol-
lowing new section: 
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‘‘SEC. 25E. QUALIFIED SMALL BUSINESS INVESTMENTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
there shall be allowed as a credit against the tax imposed 
by this subtitle an amount equal to 20 percent of the 
amount paid or incurred for qualified small business in-
vestments during the taxable year. 
‘‘(b) QUALIFIED SMALL BUSINESS INVESTMENT.— 
For purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified small 
business investment’ means any stock in a domestic 
corporation acquired by the taxpayer at its original 
issue (directly or through an underwriter) or any 
capital or profits interest in a domestic partnership 
acquired by the taxpayer from the partnership if— 
‘‘(A) such stock or interest was is acquired 
solely in exchange for cash, 
‘‘(B) either— 
‘‘(i) such corporation or partnership 
(including any predecessor thereof) has 
been in existence of less than 2 years as of 
such acquisition, or 
‘‘(ii) such corporation or partnership 
had at least a 10 percent growth rate for 
each of 2 taxable years of the corporation 
or partnership preceding the taxable year 
in which acquisition occurs, and 
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‘‘(C) the corporation or partnership satis-
fies the requirements of subparagraphs (A) and 
(B) of section 1202(d)(1) with respect to such 
issuance (determined by substituting ‘corpora-
tion or partnership’ for ‘corporation’ therein). 
‘‘(2) GROWTH RATE.—For purposes of para-
graph (1)(B)(ii), the growth rate of any corporation 
or partnership for any taxable year is the ratio (ex-
pressed as a percentage) of— 
‘‘(A) the excess of— 
‘‘(i) the gross receipts of such cor-
poration or partnership for such taxable 
year, over 
‘‘(ii) the gross receipts of such cor-
poration or partnership for the preceding 
taxable year, divided by 
‘‘(B) the amount described in subpara-
graph (A)(ii). 
‘‘(c) RECAPTURE OF CREDIT IN CASE OF FAILURE 
TO SATISFY HOLDING PERIOD REQUIREMENT.—In the 
case of the disposition of any qualified small business in-
vestment during the 7-year period beginning on the date 
that such investment is acquired by the taxpayer, the tax 
imposed under this subtitle with respect to the taxpayer 
for the taxable year in which such disposition occurs shall 
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be increased by the amount of the credit allowed under 
this section with respect to such investment plus interest 
determined at the underpayment rate.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
of such subpart is amended by inserting after the item 
relating to section 25D the following new item: 
‘‘Sec. 25E. Qualified small business investments.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
Æ 
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