Synopsis: U.S. House of Representatives Bill 3497 would add a special rule for securities and commodities acquired by partnerships in which a tax-exempt organization is a partner with limited liability. The bill states that "acquisition indebtedness" would not include indebtedness incurred by such partnership in purchasing or carrying certain qualified securities or commodities. If passed in its current form, the bill generally would allow U.S. tax-exempt investors to invest in domestic funds without incurring UBIT. The full text of the bill is available here.

Status: H.R. 3497 was introduced by Congressman Sander Levin (D-MI) and referred to the House Committee on Ways and Means on July 31, 2009. Similar legislation proposed in Congress last year was not acted upon.