EXPANDED SMALL BANK ACCESS TO S CORPORATION TREATMENT.

SEC. 721. EXPANDED SMALL BANK ACCESS TO S CORPORATION TREATMENT. (a) Study.—The Comptroller General of the United States shall conduct a study of— (1) possible revisions to the rules governing S corporations, including— (A) increasing the permissible number of shareholders in such corporations; (B) permitting shares of such corporations to be held in individual retirement accounts; (C) clarifying that interest on investments held for safety, soundness, and liquidity purposes should not be considered to be passive income; (D) discontinuation of the treatment of stock held by bank directors as a disqualifying personal class of stock for such corporations; and (E) improving Federal tax treatment of bad debt and interest deductions; and (2) what impact such revisions might have on community banks. (b) Report to the Congress.—Not later than 6 months after the date of the enactment of this Act, the Comptroller General of the United States shall submit a report to the Congress on the results of the study conducted under subsection (a). (c) Definition.—For purposes of this section, the term “S corporation” has the meaning given the term in section 1361(a)(1) of the Internal Revenue Code of 1986.