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H.R. 640 (110th): Health and Higher Education Facilities Improvement Act of 2007

The text of the bill below is as of Jan 23, 2007 (Introduced).



1st Session

H. R. 640


January 23, 2007

introduced the following bill; which was referred to the Committee on Ways and Means


To amend the Internal Revenue Code of 1986 to permit financial institutions to determine their interest expense deduction without regard to tax-exempt bonds issued to provide certain small loans for health care or educational purposes.


Short title

This Act may be cited as the Health and Higher Education Facilities Improvement Act of 2007.


Bank deductibility of small, tax-exempt debts


In general

Section 265(b)(3) of the Internal Revenue Code of 1986 (relating to exception for certain tax-exempt obligations) is amended by adding at the end the following:


Election to apply limitation on amount of obligations at borrower level


In general

An issuer, the proceeds of the obligations of which are to be used to make or finance eligible loans, may elect to apply subparagraphs (C) and (D) by treating each borrower as the issuer of a separate issue.


Eligible loan

For purposes of this subparagraph—


In general

The term eligible loan means one or more loans to a qualified borrower the proceeds of which are used by the borrower for health care or educational purposes and the outstanding balance of which in the aggregate does not exceed $10,000,000.


Qualified borrower

The term qualified borrower means a borrower which is an organization described in section 501(c)(3) and exempt from taxation under section 501(a).


Manner of election

The election described in clause (i) may be made by an issuer for any calendar year at any time prior to its first issuance during such year of obligations the proceeds of which will be used to make or finance one or more eligible loans.


Modification of rule for composite issues

In the case of an obligation which is issued by any issuer which has made the election described in clause (i), subparagraph (F) shall be applied without regard to clause (i) of such subparagraph.


Effective date

The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2007.