,i  #aacth ,,congress  #b;d ,session    
,h4 ,r4 #edbg  ,,in ,,the ,,house ,,of  
,,representatives  ,september #i1 #bjad 
,mr4 ,israel 7for himself and ,mr4      
,bishop of ,new ,york7 introduced the   
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to establish small      
business savings accounts4  #a4 ,short  
title ,this ,act may be cited as the    
,,save for ,small ,businesses ,act or   
the ,savings ,accounts for a ,variable  
,economy for ,small ,businesses ,act4   
#b4 ,small ,business ,savings ,accounts 
7a7 ,in general ,chapter #gg of the     
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new section3  #gebi4 ,small   
,business ,savings ,accounts  7a7 ,in   
general ,any eligible small business may
 enter into an agreement with the       
,secretary under this section to        
establish a small business savings      
account with respect to such business   

under terms which meet the requirements 
of this section4  7b7 ,small business   
savings accounts ,for purposes of this  
section1 the term small business savings
 account means a tax preferred savings  
account which is designated at the time 
of establishment of the plan as a small 
business savings account4 ,such         
designation shall be made in such manner
 as the ,secretary may by regulation    
prescribe4  7c7 ,contributions  7#a7    
,deduction ,there shall be allowed as a 
deduction an amount equal to the        
contributions to a small business       
savings account for the taxable year4   
7#b7 ,limitation ,the aggregate amount  
of contributions for any taxable year to
 all small business savings accounts    
maintained for the benefit of an        
eligible small business shall not exceed
 an amount equal to #aj percent of the  
gross profits of the business for the   
preceding taxable year4  7d7            
,distributions  7#a7 ,in general ,any   
qualified distribution from a small     

business savings account shall not be   
includible in gross income4  7#b7       
,inclusion of nonqualified distributions
 ,any amounts distributed out of a small
 business savings account that are not  
qualified distributions shall be        
included in gross income for the taxable
 year of the distribution4  7#c7        
,qualified distribution ,for purposes of
 this subsection--  7,a7 ,in general    
,the term qualified distribution means  
any amount--  7i7 distributed from a    
small business savings account during a 
specified period of economic hardship1  
and  7ii7 the distribution of which is  
certified by the taxpayer as part of a  
plan which provides for the reinvestment
 of such distribution for the funding of
 worker hiring or financial             
stabilization for the purposes of job   
retention or creation4  7,b7 ,specified 
period of economic hardship ,the term   
specified period of economic hardship   
means--  7i7 any #a-year period         
beginning immediately after the end of  

any #c consecutive quarters during which
 the annual rate of real gross domestic 
product 7as determined by the ,bureau of
 ,economic ,analysis of the ,department 
of ,commerce7 decreases1 or  7ii7 any   
period1 in no event shorter than #a     
year1 specified by the ,administrator of
 the ,small ,business ,administration   
for purposes of this section4  7,c7     
,federally ,declared disaster areas ,the
 ,administrator of the ,small ,business 
,administration may specify a period    
under subparagraph 7,b77ii7 with respect
 to a specified area in the case of an  
area determined by the ,president to    
warrant assistance from the ,federal    
,government under the ,robert ,t4       
,stafford ,disaster ,relief and         
,emergency ,assistance ,act 7as in      
effect on the date of the enactment of  
the ,,save for ,small ,businesses ,act74
  7,d7 ,limitation ,the ,administrator  
of the ,small ,business ,administration 
shall1 in consultation with the         
,secretary1 for each specified period of

 economic hardship establish a          
distribution limitation for qualified   
distributions from eligible small       
business accounts with respect to such  
period4 ,the aggregate qualified        
distributions for any such period from  
all accounts with respect to an eligible
 small business shall not exceed such   
limitation4  7,e7 ,amounts not used for 
reinvestment ,any distribution not used 
in the manner certified under           
subparagraph 7,a77ii7 shall be treated  
as a distribution other than a qualified
 distribution in the taxable year of    
such distribution4  7,f7 ,eight-year    
rule ,any amount contributed to a small 
business savings account 7and any       
earnings attributable thereto71 once    
distributed1 shall not be treated as a  
qualified distribution unless such      
distribution is made not later than #h  
years after the date of such            
contribution4 ,for purposes of the      
preceding sentence1 amounts 7and the    
earnings attributable thereto7 shall be 

treated as distributed on a first-in    
first-out basis4  7e7 ,tax treatment of 
account ,any small business savings     
account is exempt from taxation under   
this subtitle ,a unless such account has
 ceased to be a small business savings  
account4 ,notwithstanding the preceding 
sentence1 any such account is subject to
 the taxes imposed by section #eaa      
7relating to imposition of tax on       
unrelated business income of charitable1
 etc4 organizations74  7f7 ,eligible    
small business ,for purposes of this    
section--  7#a7 ,in general ,the term   
eligible small business means1 with     
respect to any calendar year1 any person
 if the annual average number of        
full-time employees employed by such    
person during the preceding calendar    
year was #ej or fewer4 ,for purposes of 
the preceding sentence1 a preceding     
calendar year may be taken into account 
only if the person was in existence     
throughout the year4  7#b7 ,full-time   
employees  7,a7 ,in general ,the term   

full-time employee means1 with respect  
to any year1 an employee who is employed
 on average at least #dj hours of       
service per week4  7,b7 ,hours of       
service ,the ,secretary1 in consultation
 with the ,secretary of ,labor1 shall   
prescribe such regulations1 rules1 and  
guidance as may be necessary to         
determine the hours of service of an    
employee1 including rules for the       
application of this paragraph to        
employees who are not compensated on an 
hourly basis4  7#c7 ,startups1          
controlled groups1 and predecessors     
,rules similar to the rules of          
subparagraphs 7,b7 and 7,d7 of section  
#bbj7;c77#d7 shall apply for purposes of
 this subsection4  7g7 ,effect of       
pledging account as security ,if1 during
 any taxable year of the eligible small 
business for whose benefit an account is
 established1 the account or any portion
 thereof is pledged as security for a   
loan1 the portion so pledged shall be   
treated as distributed in a distribution

 other than a qualified distribution4  4
  7b7 ,small business savings account   
programs  7#a7 ,in general ,the         
,secretary of the ,treasury shall       
establish a program to administer small 
business savings accounts under section 
#gebi of the ,internal ,revenue ,code of
 #aihf4  7#b7 ,account standards ,the   
,secretary shall establish minimum      
standards for small business savings    
accounts and shall establish accounts   
within the ,department of the ,treasury 
or enter into agreements with trustees  
that meet these standards to administer 
such accounts4 ,in establishing such    
standards and making such agreements the
 ,secretary shall1 to the extent        
practicable1 seek to minimize fees1     
minimize risk of loss of principal1 and 
ensure a range of investment risk       
options available to account            
beneficiaries4  7c7 ,excess             
contributions ,section #digc of the     
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        

following new subsection3  7h7 ,excess  
contributions to small business savings 
accounts ,for purposes of this section1 
in the case of contributions to all     
small business savings accounts 7within 
the meaning of section #gebi7;b77       
maintained for the benefit of an        
individual1 the term excess             
contributions means the sum of--  7#a7  
the excess 7if any7 of--  7,a7 the      
amount contributed to such accounts for 
the taxable year1 over  7,b7 the amount 
allowable as a contribution under       
section #gebi7;c77#b7 for such taxable  
year1 and  7#b7 the amount determined   
under this subsection for the preceding 
taxable year1 reduced by the sum of--   
7,a7 the distributions out of the       
accounts for the taxable year1 and  7,b7
 the excess 7if any7 of--  7i7 the      
maximum amount allowable as a           
contribution under section #gebi7;c77#b7
 for such taxable year1 over  7ii7 the  
amount contributed to such accounts for 
such taxable year4  4  7d7 ,clerical    

amendment ,the table of sections for    
chapter #gg of the ,internal ,revenue   
,code of #aihf is amended by adding at  
the end the following new item3  ,sec4  
#gebi4 ,small ,business ,savings        
,accounts4  4  7e7 ,effective date ,the 
amendments made by this section shall   
apply to taxable years beginning after  
the date of the enactment of this ,act4