I
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.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. TAX TREATMENT OF CERTAIN DISTRIBUTIONS
MADE BY ALASKA NATIVE CORPORATIONS.
(a) GENERAL RULE.—For purposes of the Internal
Revenue Code of 1986, any qualified distribution made by
a Native Corporation shall be treated as a distribution not
made out of earnings and profits.
(b) QUALIFIED DISTRIBUTION.—For purposes of this
section—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the term ‘qualified distribu-
tion’ means any distribution to a Native (as defined
in section 3 of the Alaska Native Claims Settlement
Act) or descendant of a Native (as so defined)—
(A) which is made after the date of the en-
actment of the Alaska Native Claims Settle-
ment Act, and
(B) which but for this section would have
been treated as a dividend under chapter 1 of
such Code.
(2) LIMITATION.—The aggregate amount of
distributions made by any Native Corporation which
may be treated as qualified distributions shall not
exceed the lesser of—
(A) the aggregate amount received in cash
by such Corporation on or before July 9, 1992,
from the sale of any depletable property re-
ceived by such Corporation pursuant to the
Alaska Native Claims Settlement Act, or
(B) the aggregate bases (as determined
pursuant to section 21(c) of such Act) of de-
pletable property received by such Corporation
pursuant to such Act and sold on or before July
9, 1992, reduced by the aggregate bases of any
depletable property sold in a sale referred to in
subsection (c)(2)(B).
(c) ADJUSTMENTS
TO AMOUNT REALIZED.—For
purposes of subsection (b)(2)(A)—
(1) there shall be taken into account any
amount of cash received by the Corporation indi-
rectly through another corporation all the stock of
which is owned directly by such Corporation, but
(2) the following amounts shall be disregarded:
(A) Any amount realized directly or indi-
rectly by the Corporation for the use of losses
or credits of such Corporation or of a corpora-
tion all of the stock of which is owned directly
by such Corporation where such use would not
have been allowable without regard to section
60(b)(5) of the Tax Reform Act of 1984 (as
amended by section 1804(e)(4) of the Tax Re-
form Act of 1986, and repealed by section 5021
of the Technical and Miscellaneous Revenue Act
of 1988).
(B) Any amount realized directly or indi-
rectly by the Corporation from a special pur-
pose sale of any depletable property where the
loss incurred on such sale was used in a man-
ner which would not have been allowable, but
for such section 60(b)(5) and such Corporation
realized directly or indirectly any consideration
for such use.
(d) SPECIAL PURPOSE SALE.—For purposes of sub-
section (c), the term ‘‘special purpose sale’’ means a sale
in which a loss was recognized, and which was made under
an agreement which was entered into either (1) after Octo-
ber 22, 1986, and on or before April 26, 1988, or (2) after
April 26, 1988, if the loss incurred thereon was used in
a contract referred to in section 5021(b) of the Technical
and Miscellaneous Revenue Act of 1988.
(e) NATIVE CORPORATION.—For purposes of this
section, the term ‘‘Native Corporation’’ has the meaning
given such term by section 3 of the Alaska Native Claims
Settlement Act.
(f) DEPLETABLE PROPERTY.—For purposes of this
section, the term ‘‘depletable property’’ means any prop-
erty of a character subject to the allowance for depletion
under section 611 of the Internal Revenue Code of 1986.
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