,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #hae  ,,in ,,the ,,house ,,of   
,,representatives  ,february #be1 #bjac 
,mr4 ,owens 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 make certain         
dividends and distributions paid to     
individuals from certain small          
businesses exempt from tax to the extent
 of the increased wages of the small    
business4  #a4 ,exemption for certain   
distributions of small businesses to    
extent of increased wages  7a7 ,in      
general ,part ,,iii of subchapter ,b of 
chapter #a of the ,internal ,revenue    
,code of #aihf is amended by inserting  
before section #adj the following new   
section3  #aci;,f4 ,increased-wage      
distributions of small businesses  7a7  
,application to corporations  7#a7 ,in  
general ,in the case of a distribution  
to an individual from a corporation     
which is a small business concern1 gross

 income shall not include any           
increased-wage exempt-dividend4  7#b7   
,increased-wage exempt-dividend ,for    
purposes of this subsection--  7,a7 ,in 
general ,the term increased-wage        
exempt-dividend means any dividend      
properly designated as an increased-wage
 exempt-dividend under subparagraph     
7,b74  7,b7 ,designation ,a corporation 
which is a small business concern may   
designate any dividend paid by such     
corporation as an increased-wage        
exempt-dividend to the extent that the  
aggregate amount of the dividends so    
designated for any taxable year does not
 exceed the wage increase amount for    
such taxable year4  7b7 ,application to 
partnerships  7#a7 ,in general ,in the  
case of a distribution to an individual 
from a partnership which is a small     
business concern--  7,a7 no gain shall  
be recognized on any increased-wage     
partnership distribution1 and  7,b7 in  
the case of an increased-wage           
partnership distribution with respect to

 which no gain is recognized under      
section #gca7;a77#b71 no reduction shall
 be made to the adjusted basis to the   
partner of his interest in the          
partnership under section #gcc7a74  7#b7
 ,increased-wage partnership            
distribution ,for purposes of this      
subsection--  7,a7 ,in general ,the term
 increased-wage partnership distribution
 means any cash distribution from the   
partnership to a partner which is       
properly designated as an increased-wage
 partnership distribution under         
subparagraph 7,b74  7,b7 ,designation ,a
 partnership which is a small business  
concern may designate any cash          
distribution as an increased-wage       
partnership distribution to the extent  
that the aggregate amount of the        
distributions so designated for any     
taxable year does not exceed the wage   
increase amount for such taxable year4  
7c7 ,wage increase amount ,for purposes 
of this section--  7#a7 ,in general ,the
 term wage increase amount means1 with  

respect to any corporation or           
partnership for any taxable year1 the   
sum of--  7,a7 the excess 7if any7 of-- 
7i7 the aggregate qualified wages paid  
or incurred by the corporation or       
partnership for such taxable year1 over 
7ii7 the aggregate qualified wages paid 
or incurred by the corporation or       
partnership for the preceding taxable   
year1 plus  7,b7 any increased-wage     
exempt-dividends or increased-wage      
partnership distributions received by   
such corporation or partnership during  
such taxable year4  7#b7 ,qualified     
wages ,the term qualified wages has the 
meaning which would be given such term  
by section #caba7;a7 if paragraph 7#a7  
thereof were applied by treating the    
contribution and benefit base as being  
equal to #ej1jjj4  7#c7 ,aggregation    
rule ,all persons treated as a single   
employer under subsection 7a7 or 7b7 of 
section #eb shall be treated as one     
person for purposes of this subsection4 
7#d7 ,treatment of predecessors ,any    

reference in this subsection to a       
corporation or partnership shall include
 a reference to any predecessor of such 
corporation or partnership4  7d7 ,small 
business concern ,for purposes of this  
section1 the term small business concern
 has the meaning given such term by     
section #c of the ,small ,business ,act4
  4  7b7 ,conforming amendments  7#a7   
,section #a7;h77#aa77;,b77ii7 of such   
,code is amended by striking and at the 
end of subclause 7,,ii71 by striking the
 period at the end of subclause 7,,iii7 
and inserting 1 and1 and by adding at   
the end the following new subclause3    
7,,iv7 any increased-wage               
exempt-dividend 7as defined in section  
#aci;,f74  4  7#b7 ,the table of        
sections for part ,,iii of subchapter ,b
 of chapter #a of such ,code is amended 
by inserting before the item relating to
 section #adj the following new item3   
,sec4 #aci;,f4 ,increased-wage          
distributions4  4  7c7 ,effective date  
,the amendments made by this section    

shall apply to taxable years beginning  
after ,december #ca1 #bjab4