I 
110TH CONGRESS 
1ST SESSION H. R. 3124 
To treat certain hospital support organizations as qualified organizations 
for purposes of determining acquisition indebtedness. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 23, 2007 
Mr. ABERCROMBIE introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To treat certain hospital support organizations as qualified 
organizations for purposes of determining acquisition in-
debtedness. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. TREATMENT OF CERTAIN HOSPITAL SUPPORT 
ORGANIZATIONS AS QUALIFIED ORGANIZA-
TIONS FOR PURPOSES OF DETERMINING AC-
QUISITION INDEBTEDNESS. 
(a) IN GENERAL.—Subparagraph (C) of section 
514(c)(9) of the Internal Revenue Code of 1986 (relating 
to real property acquired by a qualified organization) is 
amended by striking ‘‘or’’ at the end of clause (ii), by 
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striking the period at the end of clause (iii) and inserting 
‘‘; or’’, and by adding at the end the following new clause: 
‘‘(iv) a qualified hospital support or-
ganization (as defined in subparagraph 
(I)).’’. 
(b) QUALIFIED
HOSPITAL
SUPPORT
ORGANIZA-
TIONS.—Paragraph (9) of section 514(c) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph: 
‘‘(I) QUALIFIED HOSPITAL SUPPORT ORGA-
NIZATIONS.—For purposes of subparagraph 
(C)(iv), the term ‘qualified hospital support or-
ganization’ means, with respect to any eligible 
indebtedness (including any qualified refi-
nancing of such eligible indebtedness), a sup-
port 
organization 
(as 
defined 
in 
section 
509(a)(3)) which supports a hospital described 
in section 119(d)(4)(B) and with respect to 
which— 
‘‘(i) more than half of its assets (by 
value) at any time since its organization— 
‘‘(I) were acquired, directly or in-
directly, by testamentary gift or de-
vise, and 
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‘‘(II) consisted of real property, 
and 
‘‘(ii) the fair market value of the or-
ganization’s real estate acquired, directly 
or indirectly, by gift or devise, exceeded 25 
percent of the fair market value of all in-
vestment assets held by the organization 
immediately prior to the time that the eli-
gible indebtedness was incurred. 
For purposes of this subparagraph, the term 
‘eligible indebtedness’ means indebtedness se-
cured by real property acquired by the organi-
zation, directly or indirectly, by gift or devise, 
the proceeds of which are used exclusively to ac-
quire any leasehold interest in such real prop-
erty or for improvements on, or repairs to, such 
real property. A determination under clauses (i) 
and (ii) of this subparagraph shall be made 
each time such an eligible indebtedness (or the 
qualified refinancing of such an eligible indebt-
edness) is incurred. For purposes of this sub-
paragraph, a refinancing of such an eligible in-
debtedness shall be considered qualified if such 
refinancing does not exceed the amount of the 
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refinanced eligible indebtedness immediately be-
fore the refinancing.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to indebtedness incurred on or 
after the date of the enactment of this Act. 
Æ 
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