,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bgbd  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,july #ca1 #bjad ,mr4  
,udall ( ,new ,mexico introduc$ ! foll[+
 bill2 :i* 0 read twice & ref]r$ to !   
,committee on ,f9ance  ,a ,,bill  ,to   
am5d ! ,int]nal ,rev5ue ,code ( #aihf to
 provide = ! tax treatm5t ( small       
bus9ess />t-up sav+s acc\nts4  #a4      
,%ort title  ,?is ,act may be cit$ z !  
,inc5tivize ,gr[? ,n[ ,9 ,tomorr['s     
,entrepr5eurs ,act ( #bjad4  #b4  ,small
 ,bus9ess ,/>t-,up ,sav+s ,acc\nts  7a7 
,9 g5]al  ,"p ,,viii ( sub*apt] ,b (    
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by r$esignat+ section    
#bbd z section #bbe & ins]t+ aft]       
section #bbc ! foll[+ new section3      
#bbd4  ,small ,bus9ess ,/>t-up ,sav+s   
,acc\nts  7a7 ,all[ance ( d$uction ,9 ! 
case ( an individual1 !re %all be all[$ 
z a d$uction = ! taxable ye> an am\nt   
equal to am\nt ( contributions made to !
 small-bus9ess />t-up sav+s acc\nt ( su*
 individual4  7b7 ,limitation bas$ on   

adju/$ gross income ,! am\nt ( !        
d$uction all[$ "u subsection 7a7 = any  
taxable ye> %all be r$uc$ 7b n bel[ z]o7
 by an am\nt equal to ! excess (-- 7#a7 
! taxpay]'s adju/$ gross income = su*   
taxable ye>1 ov]  7#b7 #aej1jjj         
7#cjj1jjj 9 ! case ( a jo9t return74    
7c7  ,small bus9ess />t-,up sav+s acc\nt
  ,! t]m small bus9ess />t-up sav+s     
acc\nt means a tru/ creat$ or organiz$ 9
 ! ,unit$ ,/ates exclusively = ! purpose
 ( pay+ ! eligible co/s ( ! individual  
:o is ! designat$ b5efici>y ( ! tru/ 7& 
designat$ z a small bus9ess />t-up sav+s
 acc\nt at ! "t creat$ or organiz$71 b  
only if ! writt5 gov]n+ in/rum5t creat+ 
! tru/ meets ! foll[+ requirem5ts3  7#a7
 ,except 9 ! case ( a rollov]           
contribution describ$ 9 subsection      
7e77#d71 no contribution w be accept$   
unless x is 9 ca%1 & contributions w n  
be accept$ if su* contribution w\ld     
result 9-- 7,a7 aggregate contributions 
= ! taxable ye> exce$+ ! less] (--  7i7 
#aj1jjj1 or  7ii7 an am\nt equal to !   

comp5sation 7z def9$ 9 section          
#bai7;f77#a77 includible 9 !            
individual's gross income = su* taxable 
ye>1 or  7,b7 aggregate contributions to
 all small bus9ess />t-up sav+s acc\nt (
 ! individual = su* taxable ye> & all   
prior taxable ye>s exce$+ #aej1jjj4     
7#b7 ,! tru/ee is a bank 7z def9$ 9     
section #djh7n77 or su* o!r p]son :o    
demon/rates to ! satisfaction ( !       
,secret>y t ! mann] 9 :i* su* o!r p]son 
w adm9i/] ! tru/ w be consi/5t ) !      
requirem5ts ( ?is section4  7#c7 ,no "p 
( ! tru/ funds w be inve/$ 9 life       
insurance contracts4  7#d7 ,! assets ( !
 tru/ w n be comm+l$ ) o!r prop]ty      
except 9 a common tru/ fund or common   
inve/m5t fund4  7#e7 ,contributions may 
be made ev5 aft] ! individual = :om !   
acc\nt is ma9ta9$ has atta9$ age #gj4   
7d7 ,tax treatm5t ( acc\nts  7#a7 ,9    
g5]al ,a small bus9ess />t-up sav+s     
acc\nt %all be exempt f taxation "u ?is 
subtitle4 ,not)/&+ ! prec$+ s5t5ce1 !   
small bus9ess />t-up sav+s acc\nt %all  

be subject to ! taxes impos$ by section 
#eaa 7relat+ to imposition ( tax on     
unrelat$ bus9ess income ( *>itable      
organizations74  7#b7 ,acc\nt t]m9ations
 ,rules simil> to ! rules ( p>agraphs   
7#b7 & 7#d7 ( section #djh7;e7 %all     
apply to small bus9ess />t-up sav+s     
acc\nts1 & any am\nt treat$ z di/ribut$ 
"u su* rules %all be treat$ z n us$ to  
pay = eligible co/s4  7e7  ,tax treatm5t
 ( di/ributions  7#a7  ,qualifi$        
di/ributions  7,a7 ,9 g5]al  ,any       
qualifi$ di/ribution f a small bus9ess  
/>t-up sav+s acc\nt %all n be includ$ 9 
gross income4  7,b7 ,qualifi$           
di/ribution ,= purposes ( ?is section1 !
 t]m qualifi$ di/ribution means ! am\nt 
( any paym5t or di/ribution made f a    
small bus9ess sav+s acc\nt-- 7i7 to !   
ext5t t su* di/ribution does n exce$ !  
eligible co/s paid or incurr$ by !      
taxpay] dur+ ! taxable ye> if !         
di/ribution1 &  7ii7 :i* is made n lat] 
?an ! la/ day ( ! #e? taxable ye> beg9n+
 aft] ! initial di/ribution f ! small   

bus9ess />t-up sav+s acc\nt4  ,=        
purposes ( clause 7i71 a taxpay] %all be
 treat$ z hav+ paid or incurr$ !        
taxpay]'s allocable %>e ( eligible co/s 
( any entity 9 :i* ! taxpay] directly   
holds /ock or a capital or pr(its       
int]e/4  7,c7 ,eligible co/s  7i7 ,9    
g5]al ,= purposes ( ?is section1 ! t]m  
eligible co/s means co/s paid or incurr$
 by ! taxpay] ) respect to ! designat$  
bus9ess ( ! taxpay] = op]at+ capital1 ! 
pur*ase ( equipm5t or facilities1       
m>ket+1 tra9+1 incorporation1 & acc\nt+ 
fees4  7ii7 ,designat$ bus9ess ,=       
purposes ( clause 7i71 ! t]m designat$  
bus9ess means any s+le bus9ess ( !      
taxpay] :i*-- 7,i7 employs #ej or few]  
full-"t employees on all days dur+ !    
taxable ye>1 &  7,,ii7 is designat$ by !
 taxpay] = purposes ( ?is section4  ,any
 designation made "u subclause 7,,ii71  
once made1 may n be revok$4  7,d7       
,disall[ance ( exclud$ am\nts z         
d$uction1 cr$it1 or exclusion ,no       
d$uction1 cr$it1 or exclusion %all be   

all[$ to ! taxpay] "u any o!r section ( 
?is *apt] = any qualifi$ di/ribution to 
! ext5t tak5 into acc\nt 9 det]m9+ !    
am\nt ( ! exclusion "u ?is p>agraph4    
7#b7 ,nonqualifi$ di/ributions  7,a7 ,9 
g5]al ,any am\nt paid or di/ribut$ out (
 a small bus9ess />t-up sav+s acc\nt :i*
 is n a qualifi$ di/ribution1 includ+   
any am\nt paid out pursuant to a        
t]m9ation ( su* an acc\nt1 %all be      
includ$ 9 ! gross income ( ! taxpay] z  
provid$ 9 section #gb4  7,b7 ,treatm5t (
 am\nts rema9+ 9 acc\nt ,any rema9+     
am\nt 9 a small bus9ess />t-up sav+s    
acc\nt foll[+ ! date describ$ 9 p>agraph
 7#a77;,b77ii7 %all be treat$ z         
di/ribut$ dur+ ! taxable ye> foll[+ su* 
date & su* di/ribution %all n be treat$ 
z a qualifi$ di/ribution4  7,c7         
,additional tax  7i7 ,9 g5]al ,! tax    
impos$ by ?is *apt] on ! acc\nt         
b5efici>y = any taxable ye> 9 :i* !re is
 a paym5t or di/ribution f a small      
bus9ess />t-up sav+s acc\nt ( su*       
b5efici>y :i* is includible 9 income "u 

subp>agraph 7,a7 %all be increas$ by #aj
 p]c5t ( ! am\nt :i* is s includible4   
7ii7 ,exception ,clause 7i7 %all n apply
 if ! paym5t or di/ribution is made aft]
 ! acc\nt b5efici>y becomes disabl$ )9 !
 mean+ ( section #gb7m77#g7 or dies4    
7#c7  ,excess contributions return$ be=e
 due date ( return  7,a7  ,9 g5]al  ,if 
any excess contribution is contribut$ = 
a taxable ye> to any small bus9ess      
/>t-up sav+s acc\nt ( an individual1    
p>agraph 7#b7 %all n apply to           
di/ributions f ! small bus9ess />t-up   
sav+s acc\nts ( su* individual 7to !    
ext5t su* di/ributions d n exce$ !      
aggregate excess contributions to all   
su* acc\nts ( su* individual = su* ye>7 
if--  7i7 su* di/ribution is receiv$ by 
! individual on or be=e ! la/ day       
prescrib$ by law 7includ+ ext5sions (   
"t7 = fil+ su* individual's return = su*
 taxable ye>1 &  7ii7 su* di/ribution is
 accompani$ by ! am\nt ( net income     
attributable to su* excess contribution4
  7,b7  ,excess contribution  ,=        

purposes ( subp>agraph 7,a71 ! t]m      
excess contribution means any           
contribution 7o!r ?an a rollov]         
contribution describ$ 9 p>agraph 7#d77  
:i* :5 add$ to all previ\s contributions
 = ! taxable ye> exce$s ! am\nt all[able
 z a contribution "u subsection 7b77#a74
  7#d7  ,rollov] contribution  ,p>agraph
 7#b7 %all n apply to any am\nt paid or 
di/ribut$ f a small bus9ess />t-up sav+s
 acc\nt to ! acc\nt b5efici>y to ! ext5t
 ! am\nt receiv$ is paid into a small   
bus9ess />t-up sav+s acc\nt = ! b5efit (
 su* b5efici>y n lat] ?an ! #fj? day    
aft] ! day on :i* ! b5efici>y receives !
 paym5t or di/ribution4 ,= purposes (   
?is p>agraph1 rules simil> to ! rules ( 
section #djh7;d77#c77;,d7 %all apply4   
7#e7  ,transf] ( acc\nt incid5t to      
divorce  ,! transf] ( an individual's   
int]e/ 9 a small bus9ess />t-up sav+s   
acc\nt to an individual's sp\se or =m]  
sp\se "u a divorce or sep>ation in/rum5t
 describ$ 9 subp>agraph 7,a7 ( section  
#ga7;b77#b7 %all n be consid]$ a taxable

 transf] made by su* individual not)/&+ 
any o!r provision ( ?is subtitle1 & su* 
int]e/ %all1 aft] su* transf]1 be treat$
 z a small bus9ess />t-up sav+s acc\nt )
 respect to :i* su* sp\se is ! acc\nt   
b5efici>y4  7#f7  ,treatm5t aft] dea? ( 
acc\nt b5efici>y  7,a7  ,treatm5t if    
designat$ b5efici>y is sp\se  ,if !     
acc\nt b5efici>y's surviv+ sp\se        
acquires su* b5efici>y's int]e/ 9 a     
small bus9ess />t-up sav+s acc\nt by    
reason ( be+ ! designat$ b5efici>y ( su*
 acc\nt at ! dea? ( ! acc\nt b5efici>y1 
su* acc\nt %all be treat$ z if ! sp\se 7
 ! acc\nt b5efici>y4  7,b7  ,o!r cases  
7i7  ,9 g5]al  ,if1 by reason ( ! dea? (
 ! acc\nt b5efici>y1 any p]son acquires 
! acc\nt b5efici>y's int]e/ 9 a small   
bus9ess />t-up sav+s acc\nt 9 a case to 
:i* subp>agraph 7,a7 does n apply--     
7,i7 su* acc\nt %all cease to be a small
 bus9ess />t-up sav+s acc\nt z ( ! date 
( dea?1 &  7,,ii7 an am\nt equal to !   
fair m>ket value ( ! assets 9 su* acc\nt
 on su* date %all be includible1 if su* 

p]son is n ! e/ate ( su* b5efici>y1 9   
su* p]son's gross income = ! taxable ye>
 :i* includes su* date1 or if su* p]son 
is ! e/ate ( su* b5efici>y1 9 su*       
b5efici>y's gross income = ! la/ taxable
 ye> ( su* b5efici>y4  7ii7  ,special   
rules  7,i7  ,r$uction ( inclusion =    
pr$ea? exp5ses  ,! am\nt includible 9   
gross income "u clause 7i7 by any p]son 
7o!r ?an ! e/ate7 %all be r$uc$ by !    
am\nt ( qualifi$ di/ributions :i* 7 paid
 or incurr$ by ! dec$5t be=e ! date ( ! 
dec$5t's dea? & paid by su* p]son )9 #a 
ye> aft] su* date4  7,,ii7  ,d$uction = 
e/ate taxes  ,an appropriate d$uction   
%all be all[$ "u section #fia7;c7 to any
 p]son 7o!r ?an ! dec$5t or ! dec$5t's  
sp\se7 ) respect to am\nts includ$ 9    
gross income "u clause 7i7 by su* p]son4
  7f7  ,community prop]ty laws  ,?is    
section %all be appli$ )\t reg>d to any 
community prop]ty laws4  7g7  ,adju/m5t 
= inflation  ,9 ! case ( a taxable ye>  
beg9n+ aft] ,decemb] #ca1 #bjad1 ( !    
doll> am\nt 9 subsection 7b77#a7 & ea* (

 ! doll> am\nts 9 subsection 7c77#a7    
%all be increas$ by an am\nt equal to-- 
7#a7 su* doll> am\nt1 multipli$ by  7#b7
 ! co/-(-liv+ adju/m5t det]m9$ "u       
section #a7;f77#c7 = ! cal5d> ye> 9 :i* 
! taxable ye> beg9s1 det]m9$ by         
sub/itut+ cal5d> ye> #bjac = cal5d> ye> 
#aiib 9 subp>agraph 7,b7 !re(4  ,if any 
am\nt z increas$ "u ! prec$+ s5t5ce is n
 a multiple ( #ajj1 su* am\nt %all be   
r\nd$ to ! ne>e/ multiple ( #ajj4  7h7  
,reports  ,! tru/ee ( a small bus9ess   
/>t-up sav+s acc\nt %all make su*       
reports reg>d+ su* acc\nt to ! ,secret>y
 & to ! individual = :om ! acc\nt is1 or
 is to be1 ma9ta9$ ) respect to         
contributions 7& ! ye>s to :i* !y       
relate71 di/ributions1 aggregat+ #aj or 
m 9 any cal5d> ye>1 & su* o!r matt]s z !
 ,secret>y may require4 ,! reports      
requir$ by ?is subsection--  7#a7 %all  
be fil$ at su* "t & 9 su* mann] z !     
,secret>y prescribes1 &  7#b7 %all be   
furni%$ to individuals--  7,a7 n lat]   
?an ,janu>y #ca ( ! cal5d> ye> foll[+ ! 

cal5d> ye> to :i* su* reports relate1 & 
7,b7 9 su* mann] z ! ,secret>y          
prescribes4  7i7  ,regulations  ,!      
,secret>y %all issue su* regulations or 
o!r guidance z may be necess>y to c>ry  
out ?is section1 includ+ = purposes (   
subsection 7e77#a77;,b77i7 ! mak+       
reports by reg>d+ eligible co/s ( an    
entity 9 :i* ! taxpay] directly holds   
/ock or a capital or pr(its int]e/4  4  
7b7 ,d$uction all[$ :e!r or n individual
 itemizes d$uctions ,section #fb7;a7 ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by ins]t+ aft] p>agraph 7#ba7 ! foll[+ 
new p>agraph3  7#bb7 ,small bus9ess     
/>t-up sav+s acc\nts ,! d$uction all[$  
by section #bbd4  4  7c7  ,tax on       
prohibit$ transactions  7#a7  ,9 g5]al  
,p>agraph 7#a7 ( section #dige7;e7 ( !  
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by /rik+ or at ! end ( subp>agraph 7,f71
 by r$esignat+ subp>agraph 7,g7 z       
subp>agraph 7,h71 & by ins]t+ aft]      
subp>agraph 7,f7 ! foll[+ new           
subp>agraph3  7,g7 a small bus9ess      

/>t-up sav+s acc\nt describ$ 9 section  
#bbd1 or  4  7#b7  ,special rule        
,subsection 7c7 ( section #dige ( su*   
,code is am5d$ by add+ at ! end (       
subsection 7c7 ! foll[+ new p>agraph3   
7#g7  ,special rule = small bus9ess     
/>t-up sav+s acc\nts  ,an individual =  
^: b5efit a small bus9ess />t-up sav+s  
acc\nt is e/abli%$ & any contributor to 
su* acc\nt %all be exempt f ! tax impos$
 by ?is section ) respect to any        
transaction conc]n+ su* acc\nt 7:i* w\ld
 o!rwise be taxable "u ?is section7 if  
section #bbd7;e77#b7 applies ) respect  
to su* transaction4  4  7d7  ,failure   
,to ,provide ,reports on ,small ,bus9ess
 ,/>t-,up ,sav+s ,acc\nts  ,p>agraph    
7#b7 ( section #ffic7;a7 ( ! ,int]nal   
,rev5ue ,code ( #aihf is am5d$ by /rik+ 
& at ! end ( subp>agraph 7,d71 by /rik+ 
! p]iod at ! end ( subp>agraph 7,e7 &   
ins]t+ 1 &1 & by add+ at ! end ! foll[+ 
new subp>agraph3  7,f7 section #bbd7;h7 
7relat+ to small bus9ess />t-up sav+s   
acc\nts74  4  7e7  ,excess contributions

  ,section #digc7;b7 ( ! ,int]nal       
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new subsection3  7h7  
,excess contributions to small bus9ess  
/>t-,up sav+s acc\nts  ,= purposes ( ?is
 section1 9 ! case ( contributions to a 
small bus9ess />t-up sav+s acc\nt 7)9 ! 
mean+ ( section #bbd7;c771 ! t]m excess 
contributions means ! sum (--  7#a7 !   
excess 7if any7 (--  7,a7 ! am\nt       
contribut$ = ! taxable ye> to su*       
acc\nts 7o!r ?an a rollov] contribution 
describ$ 9 section #bbd7;e77#d771 ov]   
7,b7 ! am\nt all[able z a contribution  
"u section #bbd7;c77#a71 &  7#b7 ! am\nt
 det]m9$ "u ?is subsection = ! prec$+   
taxable ye>1 r$uc$ by ! sum (--  7,a7 ! 
di/ributions out ( ! acc\nts = ! taxable
 ye>1 &  7,b7 ! excess 7if any7 ( !     
maximum am\nt all[able z a contribution 
"u sections #bbd7;c77#a7 = ! taxable ye>
 ov] ! am\nt contribut$ to ! acc\nts = !
 taxable ye>4  ,= purposes ( ?is        
subsection1 any contribution :i* is     
di/ribut$ f a small bus9ess />t-up sav+s

 acc\nt 9 a di/ribution describ$ 9      
section #bbd7;e77#c7 %all be treat$ z an
 am\nt n contribut$4  4  7f7  ,cl]ical  
am5dm5t  ,! table ( cont5ts = "p ,,viii 
( sub*apt] ,b ( *apt] #a ( su* ,code is 
am5d$ by r$esignat+ ! item relat+ to    
section #bbd z relat+ to section #bbe & 
by ins]t+ aft] ! item relat+ to section 
#bbc ! foll[+ new item3  ,sec4 #bbd4    
,small ,bus9ess ,/>t-,up ,sav+s         
,acc\nts4  4  7g7  ,effective date  ,!  
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ,decemb]    
#ca1 #bjac4