Title: Municipal Bond Market Support Act of 2019
Policy area: Taxation

Summary:
Municipal Bond Market Support Act of 2019
This bill amends the Internal Revenue Code, with respect to the limitations on deductions for interest expenses of financial institutions that hold tax-exempt bonds, to:

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3967 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 3967

 To amend the Internal Revenue Code of 1986 to permanently modify the 
  limitations on the deduction of interest by financial institutions 
          which hold tax-exempt bonds, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 25, 2019

    Ms. Sewell of Alabama (for herself and Mr. Reed) 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 permanently modify the 
  limitations on the deduction of interest by financial institutions 
          which hold tax-exempt bonds, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Municipal Bond Market Support Act of 
2019''.

SEC. 2. PERMANENT MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-EXEMPT 
              INTEREST EXPENSE ALLOCATION RULES FOR FINANCIAL 
              INSTITUTIONS.

    (a) Permanent Increase in Limitation.--Subparagraphs (C)(i), 
(D)(i), and (D)(iii)(II) of section 265(b)(3) of the Internal Revenue 
Code of 1986 are each amended by striking ``$10,000,000'' and inserting 
``$30,000,000''.
    (b) Permanent Modification of Other Special Rules.--Section 
265(b)(3) of such Code is amended--
            (1) by redesignating clauses (iv), (v), and (vi) of 
        subparagraph (G) as clauses (ii), (iii), and (iv), 
        respectively, and moving such clauses to the end of 
        subparagraph (H) (as added by paragraph (2)), and
            (2) by striking so much of subparagraph (G) as precedes 
        such clauses and inserting the following:
                    ``(G) Qualified 501(c)(3) bonds treated as issued 
                by exempt organization.--In the case of a qualified 
                501(c)(3) bond (as defined in section 145), this 
                paragraph shall be applied by treating the 501(c)(3) 
                organization for whose benefit such bond was issued as 
                the issuer.
                    ``(H) Special rule for qualified financings.--
                            ``(i) In general.--In the case of a 
                        qualified financing issue--
                                    ``(I) subparagraph (F) shall not 
                                apply, and
                                    ``(II) any obligation issued as a 
                                part of such issue shall be treated as 
                                a qualified tax-exempt obligation if 
                                the requirements of this paragraph are 
                                met with respect to each qualified 
                                portion of the issue (determined by 
                                treating each qualified portion as a 
                                separate issue which is issued by the 
                                qualified borrower with respect to 
                                which such portion relates).''.
    (c) Inflation Adjustment.--Section 265(b)(3) of such Code, as 
amended by subsection (b), is amended by adding at the end the 
following new subparagraph:
                    ``(I) Inflation adjustment.--In the case of any 
                calendar year after 2019, the $30,000,000 amounts 
                contained in subparagraphs (C)(i), (D)(i), and 
                (D)(iii)(II) shall each be increased by an amount equal 
                to--
                            ``(i) such dollar amount, multiplied by
                            ``(ii) the cost-of-living adjustment 
                        determined under section 1(f)(3) for such 
                        calendar year, determined by substituting 
                        `calendar year 2018' for `calendar year 2016' 
                        in subparagraph (A)(ii) thereof.
                Any increase determined under the preceding sentence 
                shall be rounded to the nearest multiple of 
                $100,000.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to obligations issued after the date of the enactment of this 
Act.
                                 <all>