(1) IN
GENERAL.—Subsection (a) of section
1202 of such Code is amended by striking ‘‘5 years’’
and inserting ‘‘3 years’’.
(2) CONFORMING
AMENDMENT.—Subsections
(g)(2)(A) and (j)(1)(A) of section 1202 of such Code
are each amended by striking ‘‘5 years’’ and insert-
ing ‘‘3 years’’.
(c) EXCLUSION AVAILABLE TO CORPORATIONS.—
(1) IN
GENERAL.—Subsection (a) of section
1202 of such Code is amended by striking ‘‘other
than a corporation’’.
(2) TECHNICAL AMENDMENT.—Subsection (c)
of section 1202 of such Code is amended by adding
at the end the following new paragraph:
‘‘(4) STOCK HELD AMONG MEMBERS OF CON-
TROLLED GROUP NOT ELIGIBLE.—Stock of a mem-
ber of a parent-subsidiary controlled group (as de-
fined in subsection (d)(3)) shall not be treated as
qualified small business stock while held by another
member of such group.’’
(d) REPEAL OF MINIMUM TAX PREFERENCE.—
(1) IN GENERAL.—Subsection (a) of section 57
of such Code (relating to items of tax preference) is
amended by striking paragraph (7).
(2) TECHNICAL AMENDMENT.—Subclause (II)
of section 53(d)(1)(B)(ii) of such Code is amended
by striking ‘‘, (5), and (7)’’ and inserting ‘‘and (5)’’.
(e) STOCK OF LARGER BUSINESSES ELIGIBLE FOR
EXCLUSION.—
(1) IN
GENERAL.—Paragraph (1) of section
1202(d) of such Code (defining qualified small busi-
ness) is amended by striking ‘‘$50,000,000’’ each
place it appears and inserting ‘‘$300,000,000’’.
(2) INFLATION ADJUSTMENT.—Section 1202(d)
of such Code is amended by adding at the end the
following:
‘‘(4) INFLATION ADJUSTMENT OF ASSET LIMI-
TATION.—In the case of stock issued in any calendar
year after 1999, the $300,000,000 amount con-
tained in paragraph (1) shall be increased by an
amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar
year in which the taxable year begins, deter-
mined by substituting ‘calendar year 1998’ for
‘calendar year 1992’ in subparagraph (B)
thereof.
If any amount as adjusted under the preceding sen-
tence is not a multiple of $10,000, such amount
shall be rounded to the nearest multiple of
$10,000.’’
(f) REPEAL OF PER-ISSUER LIMITATION.—Section
1202 of such Code is amended by striking subsection (b).
(g) OTHER MODIFICATIONS.—
(1) REPEAL
OF
WORKING
CAPITAL
LIMITA-
TION.—Section 1202(e)(6) of such Code (relating to
working capital) is amended—
(A) in subparagraph (B), by striking ‘‘2
years’’ and inserting ‘‘5 years’’; and
(B) by striking the last sentence.
(2) EXCEPTION
FROM
REDEMPTION
RULES
WHERE BUSINESS PURPOSE.—Section 1202(c)(3) of
such Code (relating to certain purchases by corpora-
tion of its own stock) is amended by adding at the
end the following:
‘‘(D) WAIVER
WHERE
BUSINESS
PUR-
POSE.—A purchase of stock by the issuing cor-
poration shall be disregarded for purposes of
subparagraph (B) if the issuing corporation es-
tablishes that there was a business purpose for
such purchase and one of the principal purposes
of the purchase was not to avoid the limitations
of this section.’’
(h) QUALIFIED
TRADE
OR
BUSINESS.—Section
1202(e)(3) of such Code (defining qualified trade or busi-
ness) is amended by inserting ‘‘and’’ at the end of sub-
paragraph (C), by striking ‘‘, and’’ at the end of subpara-
graph (D) and inserting a period, and by striking subpara-
graph (E).
(i) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
apply to stock issued after the date of enactment of
this Act.
(2) SPECIAL RULE.—The amendments made by
subsections (a), (c), (e), (f), and (g)(1) apply to
stock issued after August 10, 1993.
SEC. 2. INCREASED EXCLUSION FOR INCENTIVE STOCK OP-
TIONS; EXCEPTION FROM ALTERNATIVE MIN-
IMUM TAX.
(a) INCREASED EXCLUSION.—Subsection (d) of sec-
tion 422 of the Internal Revenue Code of 1986 (relating
to $100,000 per year limitation) is amended by striking
‘‘$100,000’’ each place it appears and inserting
‘‘$200,000’’.
(b) EXCEPTION
FROM
ALTERNATIVE
MINIMUM
TAX.—Subsection (b) of section 56 of such Code is
amended by striking paragraph (3).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to options exercised in calendar
years beginning after the date of the enactment of this
Act.
Æ