,i  #aaeth ,,congress  #ast ,session    
,h4 ,r4 #bcci  ,,in ,,the ,,house ,,of  
,,representatives  ,may #c1 #bjag,mr4   
,marchant 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
 modify ,s corporation shareholder and  
preferred stock rules with respect to   
banks4  #a4 ,short title ,this ,act may 
be cited as the ,capital ,access for    
,small ,business ,banks ,act4  #b4 ,s   
corporation banks permitted to have #ejj
 shareholders  7a7 ,in general ,section 
#acfa7;c7 of the ,internal ,revenue     
,code of #aihf is amended by adding at  
the end the following new paragraph3    
7#g7 ,bank shareholder limit ,in the    
case of a bank 7as defined in section   
#eha7 or a depository institution       
holding company 7as defined in section  
#c7w77#a7 of the ,federal ,deposit      
,insurance ,act 7#ab ,u4,s4,c4          
#ahac7w77#a7771 subsection 7b77#a77;,a7 
shall be applied by substituting #ejj   

shareholders for #ajj shareholders4  4  
7b7 ,effective date ,the amendment made 
by this section shall apply to taxable  
years beginning after ,december #ca1    
#bjag4  #c4 ,bank issuance of preferred 
stock permitted  7a7 ,in ,general       
,section #acfa of the ,internal ,revenue
 ,code of #aihf is amended by adding at 
the end the following new subsection3   
7h7 ,treatment of ,qualified ,preferred 
,bank ,stock  7#a7 ,in general          
,qualified preferred bank stock shall   
not be taken into account as outstanding
 stock of the ,s corporation for        
purposes of this subchapter 7other than 
subsection 7b77#a77;,a7 and section     
#acfh7;g774  7#b7 ,qualified preferred  
bank stock ,for purposes of this        
subsection1 the term qualified preferred
 bank stock means stock which-- 7,a7 is 
issued by a bank 7as defined in section 
#eha7 or a depository institution       
holding company 7as defined in section  
#c7w77#a7 of the ,federal ,deposit      
,insurance ,act 7#ab ,u4,s4,c4          

#ahac7w77#a7771  7,b7 is not held by a  
person ineligible under subsection      
7b77#a7 to be a shareholder of a small  
business corporation1 and  7,c7 meets   
the requirements of subparagraphs 7,a71 
7,b71 and 7,c7 of section #aejd7;a77#d74
  4  7b7 ,distributions includible in   
shareholder gross income and deductible 
by ,s corporation ,section #acfh of such
 ,code is amended by adding at the end  
the following new subsection3  7g7      
,qualified preferred bank stock ,if a   
shareholder receives a distribution 7not
 in part or full payment in exchange for
 stock7 from an ,s corporation with     
respect to any qualified preferred bank 
stock 7as defined in section            
#acfa7;h77--  7#a7 the amount of such   
distribution shall be includible in     
gross income of the shareholder1 and    
7#b7 there shall be allowed as a        
deduction by the corporation for the    
taxable year of such corporation in     
which or with which ends the taxable    
year in which such amount is included in

 the gross income of the shareholder an 
amount equal to the amount which bears  
the same ratio to the amount of such    
distribution as--  7,a7 the highest rate
 of tax in effect for the taxable year  
with respect to individuals for         
qualified dividend income 7as defined in
 section #a7;h77#aa771 over  7,b7 the   
highest rate of tax in effect for the   
taxable year with respect to individuals
 under subsections 7a71 7b71 7c71 and   
7d7 of section #a 7after the application
 of subsection 7i7 thereof74  4  7c7    
,effective date ,the amendments made by 
this section shall apply to taxable     
years beginning after ,december #ca1    
#bjag4