Ending Tax Breaks for Private Prisons Act

II 116TH CONGRESS 1ST SESSION S. 1827 To amend the Internal Revenue Code of 1986 to exclude corporations operating prisons from the definition of taxable REIT subsidiary. IN THE SENATE OF THE UNITED STATES JUNE 13, 2019 Mr. WYDEN introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to exclude corporations operating prisons from the definition of tax- able REIT subsidiary. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Ending Tax Breaks 4 for Private Prisons Act’’. 5 SEC. 2. EXCLUSION OF CORPORATIONS OPERATING PRIS- 6 ON FACILITIES FROM DEFINITION OF TAX- 7 ABLE REIT FACILITY. 8 (a) IN GENERAL.—Section 856(l)(3) of the Internal 9 Revenue Code of 1986 is amended— 10 VerDate Sep 11 2014 23:18 Jun 14, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1827.IS S1827 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1827 IS (1) by striking subparagraph (A) and inserting 1 the following: 2 ‘‘(A) any corporation which— 3 ‘‘(i) directly or indirectly operates or 4 manages a lodging facility or a health care 5 facility, or 6 ‘‘(ii) directly or indirectly operates or 7 manages a prison facility or provides serv- 8 ices at or in connection with a prison facil- 9 ity, and’’, 10 (2) in subparagraph (B), by striking ‘‘any lodg- 11 ing facility or health care facility’’ and inserting 12 ‘‘any lodging facility, health care facility, or prison 13 facility’’, and 14 (3) by striking the last sentence and inserting 15 the following: ‘‘Subparagraph (B) shall not apply to 16 rights provided to an eligible independent contractor 17 to operate or manage a lodging facility, a health 18 care facility, or a prison facility if such rights are 19 held by such corporation as a franchisee, licensee, or 20 in a similar capacity and such lodging facility, health 21 care facility, or prison facility is either owned by 22 such corporation or is leased to such corporation 23 from the real estate investment trust.’’. 24 VerDate Sep 11 2014 23:18 Jun 14, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1827.IS S1827 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1827 IS (b) DEFINITION OF PRISON FACILITY.—Section 1 856(l)(4) of the Internal Revenue Code of 1986 is amend- 2 ed by adding at the end the following new subparagraph: 3 ‘‘(C) PRISON FACILITY.—The term ‘prison 4 facility’ means any correctional, detention, or 5 penal facility.’’. 6 (c) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to taxable years beginning after 8 the date of the enactment of this Act. 9 Æ VerDate Sep 11 2014 23:18 Jun 14, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\S1827.IS S1827 pamtmann on DSKBFK8HB2PROD with BILLS