I 
108TH CONGRESS 
1ST SESSION 
H. R. 971
To amend the Internal Revenue Code of 1986 to exclude $100 of interest 
from gross income and to raise the threshhold for reporting interest 
paid to $100. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 27, 2003
Mr. BACHUS 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 exclude 
$100 of interest from gross income and to raise the 
threshhold for reporting interest paid to $100.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Savers Relief 
Act of 2003’’. 
SEC. 2. EXCLUSION OF INTEREST RECEIVED BY INDIVID-
UALS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
amounts specifically excluded from gross income) is 
amended by inserting after section 115 the following new 
section: 
‘‘SEC. 116. EXCLUSION OF INTEREST RECEIVED BY INDIVID-
UALS. 
‘‘(a) EXCLUSION FROM GROSS INCOME.—Gross in-
come does not include interest received during the taxable 
year by an individual. 
‘‘(b) LIMITATION.—The aggregate amount excluded 
under subsection (a) for any taxable year shall not exceed 
$100 ($200 in the case of a joint return). 
‘‘(c) INTEREST.—For purposes of this section, the 
term ‘interest’ means—
‘‘(1) interest on deposits with a bank (as de-
fined in section 581), 
‘‘(2) amounts (whether or not designated as in-
terest) paid in respect of deposits, investment certifi-
cates, or withdrawable or repurchasable shares, by—
‘‘(A) a mutual savings bank, cooperative 
bank, domestic building and loan association, 
industrial loan association or bank, or credit 
union, or 
‘‘(B) any other savings or thrift institution 
which is chartered and supervised under Fed-
eral or State law,
the deposits or accounts in which are insured under 
Federal or State law or which are protected and 
guaranteed under State law, 
‘‘(3) interest on—
‘‘(A) evidences of indebtedness (including 
bonds, debentures, notes, and certificates) 
issued by a domestic corporation in registered 
form, and 
‘‘(B) to the extent provided in regulations 
prescribed by the Secretary, other evidences of 
indebtedness issued by a domestic corporation 
of a type offered by corporations to the public, 
‘‘(4) interest on obligations of the United 
States, a State, or a political subdivision of a State 
(not excluded from gross income of the taxpayer 
under any other provision of law), and 
‘‘(5) interest attributable to participation shares 
in a trust established and maintained by a corpora-
tion established pursuant to Federal law. 
‘‘(d) SPECIAL RULES.—For purposes of this sec-
tion—
‘‘(1) DISTRIBUTIONS
FROM
REGULATED
IN-
VESTMENT COMPANIES AND REAL ESTATE INVEST-
MENT TRUSTS.—Subsection (a) shall apply with re-
spect to distributions by—
‘‘(A) regulated investment companies to 
the extent provided in section 854(c), and 
‘‘(B) real estate investment trusts to the 
extent provided in section 857(c). 
‘‘(2) DISTRIBUTIONS BY A TRUST.—For pur-
poses of subsection (a), the amount of interest prop-
erly allocable to a beneficiary under section 652 or 
662 shall be deemed to have been received by the 
beneficiary ratably on the same date that the inter-
est was received by the estate or trust. 
‘‘(3) CERTAIN
NONRESIDENT
ALIENS
INELI-
GIBLE
FOR
EXCLUSION.—In the case of a non-
resident alien individual, subsection (a) shall apply 
only—
‘‘(A) in determining the tax imposed for 
the taxable year pursuant to section 871(b)(1) 
and only in respect of interest which are effec-
tively connected with the conduct of a trade or 
business within the United States, or 
‘‘(B) in determining the tax imposed for 
the taxable year pursuant to section 877(b).’’
(b) CLERICAL AND CONFORMING AMENDMENTS.—
(1) The table of sections for part III of sub-
chapter B of chapter 1 of such Code is amended by
‘‘(2) NOTICE TO SHAREHOLDERS.—The amount 
of any distribution by a regulated investment com-
pany which may be taken into account as interest 
for purposes of the exclusion under section 116 shall 
not exceed the amount so designated by the com-
pany in a written notice to its shareholders mailed 
not later than 45 days after the close of its taxable 
year. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section—
‘‘(A) The term ‘gross income’ does not in-
clude gain from the sale or other disposition of 
stock or securities. 
‘‘(B) The term ‘aggregate interest re-
ceived’ includes only interest described in sec-
tion 116(c).’’
(6) Subsection (c) of section 857 of such Code 
is amended to read as follows: 
‘‘(c) LIMITATIONS APPLICABLE TO DIVIDENDS RE-
CEIVED FROM REAL ESTATE INVESTMENT TRUSTS.—
‘‘(1) DENIAL OF DIVIDENDS RECEIVED DEDUC-
TION.—For purposes of section 243 (relating to de-
ductions for dividends received by corporations), a 
dividend received from a real estate investment trust
which meets the requirements of this part shall not 
be considered as a dividend. 
‘‘(2) TREATMENT AS INTEREST.—For purposes 
of section 116, in the case of a dividend (other than 
a capital gain dividend, as defined in subsection 
(b)(3)(C)) received from a real estate investment 
trust which meets the requirements of this part for 
the taxable year in which it paid the dividend—
‘‘(A) such dividend shall be treated as in-
terest if the aggregate interest received by the 
real estate investment trust for the taxable year 
equals or exceeds 75 percent of its gross in-
come, or 
‘‘(B) if subparagraph (A) does not apply, 
the portion of such dividend which bears the 
same ratio to the amount of such dividend as 
the aggregate interest received bears to gross 
income shall be treated as interest. 
‘‘(3) ADJUSTMENTS TO GROSS INCOME AND AG-
GREGATE
INTEREST
RECEIVED.—For purposes of 
paragraph (2)—
‘‘(A) gross income does not include the net 
capital gain, 
‘‘(B) gross income and aggregate interest 
received shall each be reduced by so much of
the deduction allowable by section 163 for the 
taxable year (other than for interest on mort-
gages on real property owned by the real estate 
investment trust) as does not exceed aggregate 
interest received by the taxable year, and 
‘‘(C) gross income shall be reduced by the 
sum of the taxes imposed by paragraphs (4), 
(5), and (6) of section 857(b). 
‘‘(4) AGGREGATE
INTEREST
RECEIVED.—The 
term ‘aggregate interest received’ includes only in-
terest described in section 116(b). 
‘‘(5) NOTICE TO SHAREHOLDERS.—The amount 
of any distribution by a real estate investment trust 
which may be taken into account as interest for pur-
poses of the exclusion under section 116 shall not 
exceed the amount so designated by the trust in a 
written notice to its shareholders mailed not later 
than 45 days after the close of its taxable year.’’
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2002. 
SEC. 3. INCREASE IN MINIMUM AMOUNT OF INTEREST RE-
QUIRED TO BE REPORTED. 
(a) IN GENERAL.—Subsection (a) of section 6049 of 
the Internal Revenue Code of 1986 (relating to require-
ments for reporting) is amended by striking ‘‘$10’’ each 
place it appears and inserting ‘‘$100’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
6049(d)(5)(C) of such Code is amended—
(1) in the text by striking ‘‘$10’’ and inserting 
‘‘$100’’, and 
(2) in the heading by striking ‘‘$10’’ and insert-
ing ‘‘$100’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years begin-
ning after December 31, 2002.
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