[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2645 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2645

  To make technical corrections related to the Taxpayer Relief Act of 
                1997 and certain other tax legislation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 9, 1997

Mr. Archer (for himself and Mr. Rangel) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To make technical corrections related to the Taxpayer Relief Act of 
                1997 and certain other tax legislation.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tax Technical Corrections Act of 
1997''.

SEC. 2. DEFINITIONS.

    For purposes of this Act--
            (1) 1986 Code.--The term ``1986 Code'' means the Internal 
        Revenue Code of 1986.
            (2) 1997 Act.--The term ``1997 Act'' means the Taxpayer 
        Relief Act of 1997.

SEC. 3. AMENDMENTS RELATED TO TITLE I OF 1997 ACT.

    (a) Amendments Related to Section 101(a) of 1997 Act.--
            (1) Subsection (d) of section 24 of the 1986 Code is 
        amended--
                    (A) by striking paragraphs (3) and (4),
                    (B) by redesignating paragraph (5) as paragraph 
                (3), and
                    (C) by striking paragraphs (1) and (2) and 
                inserting the following new paragraphs:
            ``(1) In general.--In the case of a taxpayer with 3 or more 
        qualifying children for any taxable year, the aggregate credits 
        allowed under subpart C shall be increased by the lesser of--
                    ``(A) the credit which would be allowed under this 
                section without regard to this subsection and the 
                limitation under section 26(a), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by this subpart (without regard to this 
                subsection) would increase if the limitation imposed by 
                section 26(a) were increased by the excess (if any) 
                of--
                            ``(i) the taxpayer's social security taxes 
                        for the taxable year, over
                            ``(ii) the credit allowed under section 32 
                        for the taxable year.
            ``(2) Reduction of credit to taxpayer subject to 
        alternative minimum tax.--The credit determined under this 
        subsection for the taxable year shall be reduced by the excess 
        (if any) of--
                    ``(A) the amount of tax imposed by section 55 
                (relating to alternative minimum tax) with respect to 
                such taxpayer for such taxable year, over
                    ``(B) the amount of the reduction under section 
                32(h) with respect to such taxpayer for such taxable 
                year.''
            (2) Paragraph (3) of section 24(d) of the 1986 Code (as 
        redesignated by paragraph (1)) is amended by striking 
        ``paragraph (3)'' and inserting ``paragraph (1)''.
    (b) Amendments Related to Section 101(b) of 1997 Act.--
            (1) The subsection (m) of section 32 of the 1986 Code added 
        by section 101(b) of the 1997 Act is amended to read as 
        follows:
    ``(n) Supplemental Child Credit.--
            ``(1) In general.--In the case of a taxpayer with respect 
        to whom a credit is allowed under section 24 for the taxable 
        year, the credit otherwise allowable under this section shall 
        be increased by the lesser of--
                    ``(A) the credit which would be allowed under 
                section 24 without regard to this subsection and the 
                limitation under section 26(a), or
                    ``(B) the amount by which the aggregate amount of 
                credits allowed by subpart A (without regard to this 
                subsection) would be reduced if the limitation imposed 
                by section 26(a) were reduced by the excess (if any) 
                of--
                            ``(i) the credit allowed by this section 
                        (without regard to this subsection) for the 
                        taxable year, over
                            ``(ii) the taxpayer's social security taxes 
                        (as defined in section 24(d)) for the taxable 
                        year.
        The credit determined under this subsection shall be allowed 
        without regard to any other provision of this section, 
        including subsection (d).
            ``(2) Coordination with other credits.--
                    ``(A) In general.--The amount of the credit under 
                this subsection shall reduce the amount of the credit 
                otherwise allowable under section 24, but the amount of 
                the credit under this subsection (and such reduction) 
                shall not otherwise be taken into account in 
                determining the amount of any other credit allowable 
                under this part.
                    ``(B) Treatment of credit under section 24(d).--For 
                purposes of this subsection, the credit determined 
                under section 24(d) shall be treated as not allowed 
                under section 24.''

SEC. 4. AMENDMENTS RELATED TO TITLE II OF 1997 ACT.

    (a) Amendments Related to Section 201 of 1997 Act.--
            (1) Subparagraph (B) of section 25A(h)(1) of the 1986 Code 
        is amended by striking ``$1,000'' each place it appears and 
        inserting ``$100''.
            (2) The item relating to section 25A in the table of 
        sections for subpart A of part IV of subchapter A of chapter 1 
        of the 1986 Code is amended to read as follows:

                              ``Sec. 25A. Hope and Lifetime Learning 
                                        credits.''
            (3) Subsection (a) of section 6050S of the 1986 Code is 
        amended to read as follows:
    ``(a) In General.--Any person--
            ``(1) which is an eligible educational institution--
                    ``(A) which receives payments for qualified tuition 
                and related expenses with respect to any individual for 
                any calendar year, or
                    ``(B) which makes reimbursements or refunds (or 
                similar amounts) to any individual of qualified tuition 
                and related expenses,
            ``(2) which is engaged in a trade or business of making 
        payments to any individual under an insurance arrangement as 
        reimbursements or refunds (or similar amounts) of qualified 
        tuition and related expenses, or
            ``(3) except as provided in regulations, any person which 
        is engaged in a trade or business and, in the course of which, 
        receives from any individual interest aggregating $600 or more 
        for any calendar year on 1 or more qualified education loans,
shall make the return described in subsection (b) with respect to the 
individual at such time as the Secretary may by regulations 
prescribe.''
            (4) Subparagraph (A) of section 201(c)(2) of the 1997 Act 
        is amended to read as follows:
                    ``(A) Subparagraph (B) of section 6724(d)(1) 
                (relating to definitions) is amended by redesignating 
                clauses (x) through (xv) as clauses (xi) through (xvi), 
                respectively, and by inserting after clause (ix) the 
                following new clause:
                            ```(x) section 6050S (relating to returns 
                        relating to payments for qualified tuition and 
                        related expenses),'''.
    (b) Amendments Related to Section 211 of 1997 Act.--
            (1) Paragraph (3) of section 135(c) of the 1986 Code is 
        amended to read as follows:
            ``(3) Eligible educational institution.--The term `eligible 
        educational institution' has the meaning given such term by 
        section 529(e)(5).''.
            (2) Subparagraph (A) of section 529(c)(3) of the 1986 Code 
        is amended by striking ``section 72(b)'' and inserting 
        ``section 72''.
    (c) Amendments Related to Section 213 of 1997 Act.--
            (1)(A) Section 530(b)(1)(E) of the 1986 Code (defining 
        education individual retirement account) is amended to read as 
        follows:
                    ``(E) Any balance to the credit of the designated 
                beneficiary on the date on which the beneficiary 
                attains age 30 shall be distributed within 30 days 
                after such date to the beneficiary or, if the 
                beneficiary dies before attaining age 30, shall be 
                distributed within 30 days after the date of death to 
                the estate of such beneficiary.''
            (B) Subsection (d) of section 530 of the 1986 Code is 
        amended by adding at the end the following new paragraph:
            ``(8) Deemed distribution on required distribution date.--
        In any case in which a distribution is required under 
        subsection (b)(1)(E), any balance to the credit of a designated 
        beneficiary as of the close of the 30-day period referred to in 
        such subsection for making such distribution shall be deemed 
        distributed at the close of such period.''
            (2)(A) Paragraph (1) of section 530(d) of the 1986 Code is 
        amended by striking ``section 72(b)'' and inserting ``section 
        72''.
            (B) Subsection (e) of section 72 of the 1986 Code is 
        amended by inserting after paragraph (8) the following new 
        paragraph:
            ``(9) Extension of paragraph (2)(b) to qualified state 
        tuition programs and educational individual retirement 
        accounts.--Notwithstanding any other provision of this 
        subsection, paragraph (2)(B) shall apply to amounts received 
        under a qualified State tuition program (as defined in section 
        529(b)) or under an education individual retirement account (as 
        defined in section 530(b)). The rule of paragraph (8)(B) shall 
        apply for purposes of this paragraph.''
            (3) So much of section 530(d)(4)(C) of the 1986 Code as 
        precedes clause (ii) thereof is amended to read as follows:
                    ``(C) Contributions returned before due date of 
                return.--Subparagraph (A) shall not apply to the 
                distribution of any contribution made during a taxable 
                year on behalf of the designated beneficiary if--
                            ``(i) such distribution is made on or 
                        before the day prescribed by law (including 
                        extensions of time) for filing the 
                        beneficiary's return of tax for the taxable 
                        year or, if the beneficiary is not required to 
                        file such a return, the 15th day of the 4th 
                        month of the taxable year following the taxable 
                        year, and''.
            (4) Subparagraph (C) of section 135(c)(2) of the 1986 Code 
        is amended--
                    (A) by inserting ``and education individual 
                retirement accounts'' in the heading after ``program'', 
                and
                    (B) by striking ``section 529(c)(3)(A)'' and 
                inserting ``section 72''.
            (5) Subparagraph (A) of section 4973(e)(1) of the 1986 Code 
        is amended by inserting before the comma ``(or, if less, the 
        sum of the maximum amounts permitted to be contributed under 
        section 530(c) by the contributors to such accounts for such 
        year)''.
    (d) Amendment Related to Section 224 of 1997 Act.--Section 
170(e)(6)(F) of the 1986 Code (relating to termination) is amended by 
striking ``1999'' and inserting ``2000''.
    (e) Amendments Related to Section 225 of 1997 Act.--
            (1) The last sentence of section 108(f)(2) of the 1986 Code 
        is amended to read as follows:
        ``The term `student loan' includes any loan made by an 
        educational organization described in section 170(b)(1)(A)(ii) 
        or by an organization exempt from tax under section 501(a) to 
        refinance a loan to an individual to assist the individual in 
        attending any such educational organization but only if the 
        refinancing loan is pursuant to a program of the refinancing 
        organization which is designed as described in subparagraph 
        (D)(ii).''
            (2) Section 108(f)(3) of the 1986 Code is amended by 
        striking ``(or by an organization described in paragraph (2)(E) 
        from funds provided by an organization described in paragraph 
        (2)(D))''.
    (f) Amendments Related to Section 226 of 1997 Act.--
            (1) Section 226(a) of the 1997 Act is amended by striking 
        ``section 1397E'' and inserting ``section 1397D''.
            (2) Section 1397E(d)(4)(B) of the 1986 Code is amended by 
        striking ``local education agency as defined'' and inserting 
        ``local educational agency as defined''.

SEC. 5. AMENDMENTS RELATED TO TITLE III OF 1997 ACT.

    (a) Amendments Related to Section 301 of 1997 Act.--Section 219(g) 
of the 1986 Code is amended--
            (1) by inserting ``or the individual's spouse'' after 
        ``individual'' in paragraph (1), and
            (2) by striking paragraph (7) and inserting:
            ``(7) Special rule for spouses who are not active 
        participants.--If this subsection applies to an individual for 
        any taxable year solely because their spouse is an active 
        participant, then, in applying this subsection to the 
        individual (but not their spouse)--
                    ``(A) the applicable dollar amount under paragraph 
                (3)(B)(i) shall be $150,000, and
                    ``(B) the amount applicable under paragraph 
                (2)(A)(ii) shall be $10,000.''
    (b) Amendments Related to Section 302 of 1997 Act.--
            (1) Section 408A(c)(3)(A) of the 1986 Code is amended by 
        striking ``shall be reduced'' and inserting ``shall not exceed 
        an amount equal to the amount determined under paragraph (2)(A) 
        for such taxable year, reduced''.
            (2) Section 408A(c)(3) of the 1986 Code (relating to limits 
        based on modified adjusted gross income) is amended--
                    (A) by inserting ``or a married individual filing a 
                separate return'' after ``joint return'' in 
                subparagraph (A)(ii), and
                    (B) by striking ``and the deduction under section 
                219 shall be taken into account'' in subparagraph 
                (C)(i).
            (3) Section 408A(d)(2) of the 1986 Code (defining qualified 
        distribution) is amended by striking subparagraph (B) and 
        inserting the following:
                    ``(B) Distributions within nonexclusion period.--A 
                payment or distribution from a Roth IRA shall not be 
                treated as a qualified distribution under subparagraph 
                (A) if such payment or distribution is made before the 
                exclusion date for the Roth IRA.
                    ``(C) Exclusion date.--For purposes of this 
                section, the exclusion date for any Roth IRA is the 
                first day of the taxable year immediately following the 
                5-taxable year period beginning with--
                            ``(i) the first taxable year for which a 
                        contribution to any Roth IRA maintained for the 
                        benefit of the individual was made, or
                            ``(ii) in the case of a Roth IRA to which 1 
                        or more qualified rollover contributions were 
                        made--
                                    ``(I) from an individual retirement 
                                plan other than a Roth IRA, or
                                    ``(II) from another Roth IRA to the 
                                extent such contributions are properly 
allocable to contributions described in subclause (I),
                        the most recent taxable year for which any such 
                        qualified rollover contribution was made.''
            (4) Section 408A(d)(3) of the 1986 Code (relating to 
        rollovers from IRAs other than Roth IRAs) is amended by adding 
        at the end the following:
                    ``(F) Special rule for applying section 72.--
                            ``(i) In general.--If--
                                    ``(I) any distribution from a Roth 
                                IRA is made before the exclusion date, 
                                and
                                    ``(II) any portion of such 
                                distribution is properly allocable to a 
                                qualified rollover contribution 
                                described in paragraph (2)(C)(ii),
                        then section 72(t) shall be applied as if such 
                        portion were includible in gross income.
                            ``(ii) Limitation.--Clause (i) shall apply 
                        only to the extent of the amount includible in 
                        gross income under subparagraph (A)(i) by 
                        reason of the qualified rollover contribution.
                    ``(G) Special rules for contributions to which 4-
                year averaging applies.--In the case of a qualified 
                rollover contribution to a Roth IRA of a distribution 
                to which subparagraph (A)(iii) applied, the following 
                rules shall apply:
                            ``(i) Death of distributee.--
                                    ``(I) In general.--If the 
                                individual required to include amounts 
                                in gross income under such subparagraph 
                                dies before all of such amounts are 
                                included, all remaining amounts shall 
                                be included in gross income for the 
                                taxable year which includes the date of 
                                death.
                                    ``(II) Special rule for surviving 
                                spouse.--If the spouse of the 
                                individual described in subclause (I) 
                                acquires the Roth IRA to which such 
                                qualified rollover contribution is 
                                properly allocable, the spouse may 
                                elect to include the remaining amounts 
                                described in subclause (I) in the 
                                spouse's gross income in the taxable 
                                years of the spouse ending with or 
                                within the taxable years of such 
                                individual in which such amounts would 
                                otherwise have been includible.
                            ``(ii) Additional tax for early 
                        distribution.--
                                    ``(I) In general.--If any 
                                distribution from a Roth IRA is made 
                                before the exclusion date, and any 
                                portion of such distribution is 
                                properly allocable to such qualified 
                                rollover contribution, the 
                                distributee's tax under this chapter 
                                for the taxable year in which the 
                                amount is received shall be increased 
                                by 10 percent of the amount of such 
                                portion not in excess of the amount 
                                includible in gross income under 
                                subparagraph (A)(i) by reason of such 
                                qualified rollover contribution.
                                    ``(II) Treatment of tax.--For 
                                purposes of this title, any tax imposed 
                                by subclause (I) shall be treated as a 
                                tax imposed by section 72(t) and shall 
                                be in addition to any other tax imposed 
                                by such section.''
            (5)(A) Section 408A(d)(4) of the 1986 Code is amended to 
        read as follows:
            ``(4) Aggregation and ordering rules.--
                    ``(A) Aggregation rules.--Section 408(d)(2) shall 
                be applied separately with respect to--
                            ``(i) Roth IRAs and other individual 
                        retirement plans,
                            ``(ii) Roth IRAs described in paragraph 
                        (2)(C)(ii) and Roth IRAs not so described, and
                            ``(iii) Roth IRAs described in paragraph 
                        (2)(C)(ii) with different exclusion dates.
                    ``(B) Ordering rules.--For purposes of applying 
                section 72 to any distribution from a Roth IRA which is 
                not a qualified distribution, such distribution shall 
                be treated as made--
                            ``(i) from contributions to the extent that 
                        the amount of such distribution, when added to 
                        all previous distributions from the Roth IRA, 
                        does not exceed the aggregate contributions to 
                        the Roth IRA, and
                            ``(ii) from such contributions in the 
                        following order:
                                    ``(I) Qualified rollover 
                                contributions to the extent includible 
                                in gross income in the manner described 
                                in paragraph (3)(A)(iii).
                                    ``(II) Qualified rollover 
                                contributions not described in 
                                subclause (I) to the extent includible 
                                in gross income under paragraph (3)(A).
                                    ``(III) Contributions not described 
                                in subclause (I) or (II).
                Such rules shall also apply in determining the 
                character of qualified rollover contributions from one 
                Roth IRA to another Roth IRA.''
            (B) Section 408A(d)(1) of the 1986 Code is amended to read 
        as follows:
            ``(1) Exclusion.--Any qualified distribution from a Roth 
        IRA shall not be includible in gross income.''
            (6)(A) Section 408A(d) of the 1986 Code (relating to 
        distribution rules) is amended by adding at the end the 
        following:
            ``(6) Taxpayer may make adjustments before due date.--
                    ``(A) In general.--Except as provided by the 
                Secretary, if, on or before the due date for any 
                taxable year, a taxpayer transfers in a trustee-to-
                trustee transfer any contribution to an individual 
                retirement plan made during such taxable year from such 
                plan to any other individual retirement plan, then, for 
                purposes of this chapter, such contribution shall be 
                treated as having been made to the transferee plan (and 
                not the transferor plan).
                    ``(B) Special rules.--
                            ``(i) Transfer of earnings.--Subparagraph 
                        (A) shall not apply to the transfer of any 
                        contribution unless such transfer is 
                        accompanied by any net income allocable to such 
                        contribution.
                            ``(ii) No deduction.--Subparagraph (A) 
                        shall apply to the transfer of any contribution 
                        only to the extent no deduction was allowed 
                        with respect to the contribution to the 
                        transferor plan.
                    ``(C) Due date.--For purposes of this paragraph, 
                the due date for any taxable year is the last date for 
                filing the return of tax for such taxable year 
                (including extensions).''
            (B) Section 408A(d)(3) of the 1986 Code, as amended by this 
        subsection, is amended by striking subparagraph (D) and by 
        redesignating subparagraphs (E), (F), and (G) as subparagraphs 
        (D), (E), and (F), respectively.
            (7) Section 302(b) of the 1997 Act is amended by striking 
        ``Section 4973(b)'' and inserting ``Section 4973''.
            (8) Section 408A of the 1986 Code is amended by adding at 
        the end the following new subsection:
    ``(f) Individual Retirement Plan.--For purposes of this section, 
except as provided by the Secretary, the term `individual retirement 
plan' shall not include a simplified employee pension or a simple 
retirement account.''
    (c) Amendments Related to Section 303 of 1997 Act.--
            (1) Section 72(t)(8)(E) of the 1986 Code is amended--
                    (A) by striking ``120 days'' and inserting ``120th 
                day'', and
                    (B) by striking ``60 days'' and inserting ``60th 
                day''.
            (2)(A) Section 402(c) of the 1986 Code is amended by adding 
        at the end the following:
            ``(11) Denial of rollover treatment for transfers of 
        hardship distributions to individual retirement plans.--This 
        subsection shall not apply to the transfer of any hardship 
        distribution described in section 401(k)(2)(B)(i)(IV) from a 
        qualified cash or deferred arrangement to an eligible 
        retirement plan described in clause (i) or (ii) of paragraph 
        (8)(B).''
            (B) The amendment made by this paragraph shall apply to 
        distributions made after December 31, 1997.
    (d) Amendments Related to Section 311 of 1997 Act.--
            (1) Subsection (h) of section 1 of the 1986 Code (relating 
        to maximum capital gains rate) is amended to read as follows:
    ``(h) Maximum Capital Gains Rate.--
            ``(1) In general.--If a taxpayer has a net capital gain for 
        any taxable year, the tax imposed by this section for such 
        taxable year shall not exceed the sum of--
                    ``(A) a tax computed at the rates and in the same 
                manner as if this subsection had not been enacted on 
                the greater of--
                            ``(i) taxable income reduced by the net 
                        capital gain, or
                            ``(ii) the lesser of--
                                    ``(I) the amount of taxable income 
                                taxed at a rate below 28 percent, or
                                    ``(II) taxable income reduced by 
                                the adjusted net capital gain,
                    ``(B) 10 percent of so much of the adjusted net 
                capital gain (or, if less, taxable income) as does not 
                exceed the excess (if any) of--
                            ``(i) the amount of taxable income which 
                        would (without regard to this paragraph) be 
                        taxed at a rate below 28 percent, over
                            ``(ii) the taxable income reduced by the 
                        adjusted net capital gain,
                    ``(C) 20 percent of the adjusted net capital gain 
                (or, if less, taxable income) in excess of the amount 
                on which a tax is determined under subparagraph (B),
                    ``(D) 25 percent of the excess (if any) of--
                            ``(i) the unrecaptured section 1250 gain 
                        (or, if less, the net capital gain), over
                            ``(ii) the excess (if any) of--
                                    ``(I) the sum of the amount on 
                                which tax is determined under 
                                subparagraph (A) plus the net capital 
                                gain, over
                                    ``(II) taxable income, and
                    ``(E) 28 percent of the amount of taxable income in 
                excess of the sum of the amounts on which tax is 
                determined under the preceding subparagraphs of this 
                paragraph.
            ``(2) Reduced capital gain rates for qualified 5-year 
        gain.--
                    ``(A) Reduction in 10-percent rate.--In the case of 
                any taxable year beginning after December 31, 2000, the 
                rate under paragraph (1)(B) shall be 8 percent with 
                respect to so much of the amount to which the 10-
                percent rate would otherwise apply as does not exceed 
                qualified 5-year gain, and 10 percent with respect to 
                the remainder of such amount.
                    ``(B) Reduction in 20-percent rate.--The rate under 
                paragraph (1)(C) shall be 18 percent with respect to so 
                much of the amount to which the 20-percent rate would 
                otherwise apply as does not exceed the lesser of--
                            ``(i) the excess of qualified 5-year gain 
                        over the amount of such gain taken into account 
                        under subparagraph (A) of this paragraph, or
                            ``(ii) the amount of qualified 5-year gain 
                        (determined by taking into account only 
                        property the holding period for which begins 
                        after December 31, 2000),
                and 20 percent with respect to the remainder of such 
                amount. For purposes of determining under the preceding 
                sentence whether the holding period of property begins 
                after December 31, 2000, the holding period of property 
                acquired pursuant to the exercise of an option (or 
                other right or obligation to acquire property) shall 
                include the period such option (or other right or 
                obligation) was held.
            ``(3) Net capital gain taken into account as investment 
        income.--For purposes of this subsection, the net capital gain 
        for any taxable year shall be reduced (but not below zero) by 
        the amount which the taxpayer takes into account as investment 
        income under section 163(d)(4)(B)(iii).
            ``(4) Adjusted net capital gain.--For purposes of this 
        subsection, the term `adjusted net capital gain' means net 
        capital gain reduced (but not below zero) by the sum of--
                    ``(A) unrecaptured section 1250 gain, and
                    ``(B) 28 percent rate gain.
            ``(5) 28 percent rate gain.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `28 percent rate gain' 
                means the excess (if any) of--
                            ``(i) the sum of--
                                    ``(I) the aggregate long-term 
                                capital gain from property held for 
                                more than 1 year but not more than 18 
                                months,
                                    ``(II) collectibles gain, and
                                    ``(III) section 1202 gain, over
                            ``(ii) the sum of--
                                    ``(I) the aggregate long-term 
                                capital loss (not described in 
                                subclause (IV)) from property referred 
                                to in clause (i)(I),
                                    ``(II) collectibles loss,
                                    ``(III) the net short-term capital 
                                loss, and
                                    ``(IV) the amount of long-term 
                                capital loss carried under section 
                                1212(b)(1)(B) to the taxable year.
                    ``(B) Special rules.--
                            ``(i) Short sales and options.--Rules 
                        similar to the rules of subsections (b) and (d) 
                        of section 1233 shall apply to substantially 
                        identical property, and section 1092(f) with 
                        respect to stock, held for more than 1 year but 
                        not more than 18 months.
                            ``(ii) Section 1256 contracts.--Amounts 
                        treated as long-term capital gain or loss under 
                        section 1256(a)(3) shall be treated as 
                        attributable to property held for more than 18 
                        months.
            ``(6) Collectibles gain and loss.--For purposes of this 
        subsection--
                    ``(A) In general.--The terms `collectibles gain' 
                and `collectibles loss' mean gain or loss 
                (respectively) from the sale or exchange of a 
                collectible (as defined in section 408(m) without 
                regard to paragraph (3) thereof) which is a capital 
                asset held for more than 18 months but only to the 
                extent such gain is taken into account in computing 
                gross income and such loss is taken into account in 
                computing taxable income.
                    ``(B) Partnerships, etc.--For purposes of 
                subparagraph (A), any gain from the sale of an interest 
                in a partnership, S corporation, or trust which is 
                attributable to unrealized appreciation in the value of 
                collectibles shall be treated as gain from the sale or 
                exchange of a collectible. Rules similar to the rules 
                of section 751 shall apply for purposes of the 
                preceding sentence.
            ``(7) Unrecaptured section 1250 gain.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `unrecaptured section 
                1250 gain' means the excess (if any) of--
                            ``(i) the amount of long-term capital gain 
                        (not otherwise treated as ordinary income) 
                        which would be treated as ordinary income if--
                                    ``(I) section 1250(b)(1) included 
                                all depreciation and the applicable 
                                percentage under section 1250(a) were 
                                100 percent, and
                                    ``(II) only gain from property held 
                                for more than 18 months were taken into 
                                account, over
                            ``(ii) the excess (if any) of--
                                    ``(I) the amount described in 
                                paragraph (5)(A)(ii), over
                                    ``(II) the amount described in 
                                paragraph (5)(A)(i).
                    ``(B) Limitation with respect to section 1231 
                property.--The amount described in subparagraph (A)(i) 
                from sales, exchanges, and conversions described in 
                section 1231(a)(3)(A) for any taxable year shall not 
                exceed the net section 1231 gain (as defined in section 
                1231(c)(3)) for such year.
            ``(8) Section 1202 gain.--For purposes of this subsection, 
        the term `section 1202 gain' means an amount equal to the gain 
        excluded from gross income under section 1202(a).
            ``(9) Qualified 5-year gain.--For purposes of this 
        subsection, the term `qualified 5-year gain' means the amount 
        of long-term capital gain which would be computed for the 
        taxable year if only gains from the sale or exchange of 
        property held by the taxpayer for more than 5 years were taken 
        into account. The determination under the preceding sentence 
        shall be made without regard to collectibles gain, gain 
        described in paragraph (7)(A)(i), and section 1202 gain.
            ``(10) Coordination with recapture of net ordinary losses 
        under section 1231.--If any amount is treated as ordinary 
        income under section 1231(c), such amount shall be allocated 
        among the separate categories of net section 1231 gain (as 
        defined in section 1231(c)(3)) in such manner as the Secretary 
        may by forms or regulations prescribe.
            ``(11) Regulations.--The Secretary may prescribe such 
        regulations as are appropriate (including regulations requiring 
        reporting) to apply this subsection in the case of sales and 
        exchanges by pass-thru entities and of interests in such 
        entities.
            ``(12) Pass-thru entity defined.--For purposes of this 
        subsection, the term `pass-thru entity' means--
                    ``(A) a regulated investment company,
                    ``(B) a real estate investment trust,
                    ``(C) an S corporation,
                    ``(D) a partnership,
                    ``(E) an estate or trust,
                    ``(F) a common trust fund,
                    ``(G) a foreign investment company which is 
                described in section 1246(b)(1) and for which an 
                election is in effect under section 1247, and
                    ``(H) a qualified electing fund (as defined in 
                section 1295).
            ``(13) Special rules for periods during 1997.--
                    ``(A) Determination of 28 percent rate gain.--In 
                applying paragraph (5)--
                            ``(i) the amount determined under subclause 
                        (I) of paragraph (5)(A)(i) shall include long-
                        term capital gain (not otherwise described in 
                        paragraph (5)(A)(i)) which is properly taken 
                        into account for the portion of the taxable 
                        year before May 7, 1997,
                            ``(ii) the amounts determined under 
                        subclause (I) of paragraph (5)(A)(ii) shall 
                        include long-term capital loss (not otherwise 
                        described in paragraph (5)(A)(ii)) which is 
                        properly taken into account for the portion of 
                        the taxable year before May 7, 1997, and
                            ``(iii) clauses (i)(I) and (ii)(I) of 
                        paragraph (5)(A) shall be applied by not taking 
                        into account any gain and loss on property held 
                        for more than 1 year but not more than 18 
                        months which is properly taken into account for 
                        the portion of the taxable year after May 6, 
                        1997, and before July 29, 1997.
                    ``(B) Other special rules.--
                            ``(i) Determination of unrecaptured section 
                        1250 gain not to include pre-may 7, 1997 
                        gain.--The amount determined under paragraph 
                        (7)(A)(i) shall not include gain properly taken 
                        into account for the portion of the taxable 
                        year before May 7, 1997.
                            ``(ii) Other transitional rules for 18-
                        month holding period.--Paragraphs (6)(A) and 
                        (7)(A)(i)(II) shall be applied by substituting 
                        `1 year' for `18 months' with respect to gain 
                        properly taken into account for the portion of 
                        the taxable year after May 6, 1997, and before 
                        July 29, 1997.
                    ``(C) Special rules for pass-thru entities.--In 
                applying this paragraph with respect to any pass-thru 
                entity, the determination of when gains and loss are 
                properly taken into account shall be made at the entity 
                level.''
            (2) In general.--Paragraph (3) of section 55(b) of the 1986 
        Code is amended to read as follows:
            ``(3) Maximum rate of tax on net capital gain of 
        noncorporate taxpayers.--The amount determined under the first 
        sentence of paragraph (1)(A)(i) shall not exceed the sum of--
                    ``(A) the amount determined under such first 
                sentence computed at the rates and in the same manner 
                as if this paragraph had not been enacted on the 
                taxable excess reduced by the lesser of--
                            ``(i) the net capital gain, or
                            ``(ii) the sum of--
                                    ``(I) the adjusted net capital 
                                gain, plus
                                    ``(II) the unrecaptured section 
                                1250 gain, plus
                    ``(B) 10 percent of so much of the adjusted net 
                capital gain (or, if less, taxable excess) as does not 
                exceed the amount on which a tax is determined under 
                section 1(h)(1)(B), plus
                    ``(C) 20 percent of the adjusted net capital gain 
                (or, if less, taxable excess) in excess of the amount 
                on which tax is determined under subparagraph (B), plus
                    ``(D) 25 percent of the amount of taxable excess in 
                excess of the sum of the amounts on which tax is 
                determined under the preceding subparagraphs of this 
                paragraph.
        In the case of taxable years beginning after December 31, 2000, 
        rules similar to the rules of section 1(h)(2) shall apply for 
        purposes of subparagraphs (B) and (C). Terms used in this 
        paragraph which are also used in section 1(h) shall have the 
        respective meanings given such terms by section 1(h) but 
        computed with the adjustments under this part.''.
            (3) Section 57(a)(7) of the 1986 Code is amended by adding 
        at the end the following new sentence: ``In the case of stock 
        the holding period of which begins after December 31, 2000 
        (determined with the application of the last sentence of 
        section 1(h)(2)(B)), the preceding sentence shall be applied by 
        substituting `28 percent' for `42 percent'.''.
            (4) Paragraphs (11) and (12) of section 1223, and section 
        1235(a), of the 1986 Code are each amended by striking ``1 
year'' each place it appears and inserting ``18 months''.
    (e) Amendments Related to Section 312 of 1997 Act.--
            (1) Section 121(c)(1) of the 1986 Code is amended to read 
        as follows:
            ``(1) In general.--In the case of a sale or exchange to 
        which this subsection applies, the ownership and use 
        requirements of subsection (a), and subsection (b)(3), shall 
        not apply; but the dollar limitation under paragraph (1) or (2) 
        of subsection (b), whichever is applicable, shall be equal to--
                    ``(A) the amount which bears the same ratio to such 
                limitation (determined without regard to this 
                paragraph) as
                    ``(B)(i) the shorter of--
                            ``(I) the aggregate periods, during the 5-
                        year period ending on the date of such sale or 
                        exchange, such property has been owned and used 
                        by the taxpayer as the taxpayer's principal 
                        residence, or
                            ``(II) the period after the date of the 
                        most recent prior sale or exchange by the 
                        taxpayer to which subsection (a) applied and 
                        before the date of such sale or exchange, bears 
                        to
                    ``(ii) 2 years.''.
            (2) Section 312(d)(2) of the 1997 Act (relating to sales 
        before date of enactment) is amended by inserting ``on or'' 
        before ``before'' each place it appears in the text and 
        heading.
    (f) Amendment Related to Section 313 of 1997 Act.--Section 1045 of 
the 1986 Code is amended by adding at the end the following new 
subsection:
    ``(c) Limitation on Application to Partnerships and S 
Corporations.--Subsection (a) shall apply to a partnership or S 
corporation for a taxable year only if at all times during such taxable 
year all of the partners in the partnership, or all of the shareholders 
of the S corporation, are natural persons or estates.''

SEC. 6. AMENDMENTS RELATED TO TITLE V OF 1997 ACT.

    (a) Amendments Related to Section 501 of 1997 Act.--
            (1) Subsection (c) of section 2631 of the 1986 Code is 
        amended by striking ``an individual who dies'' and inserting 
        ``a generation-skipping transfer''.
            (2) Subsection (f) of section 501 of the 1997 Act is 
        amended by inserting ``(other than the amendment made by 
        subsection (d))'' after ``this section''.
    (b) Amendments Related to Section 502 of 1997 Act.--
            (1) Subsection (a) of section 2033A of the 1986 Code is 
        amended to read as follows:
    ``(a) Exclusion.--
            ``(1) In general.--In the case of an estate of a decedent 
        to which this section applies, the value of the gross estate 
        shall not include the lesser of--
                    ``(A) the adjusted value of the qualified family-
                owned business interests of the decedent otherwise 
                includible in the estate, or
                    ``(B) the exclusion limitation with respect to such 
                estate.
            ``(2) Exclusion limitation.--
                    ``(A) In general.--The exclusion limitation with 
                respect to any estate is the amount of reduction in the 
                tentative tax base with respect to such estate which 
                would be required in order to reduce the tax imposed by 
                section 2001(b) (determined without regard to this 
                section) by an amount equal to the maximum credit 
                equivalent benefit.
                    ``(B) Maximum credit equivalent benefit.--For 
                purposes of subparagraph (A), the term `maximum credit 
                equivalent benefit' means the excess of--
                            ``(i) the amount by which the tentative tax 
                        imposed by section 2001(b) (determined without 
                        regard to this section) would be reduced if the 
                        tentative tax base were reduced by $675,000, 
                        over
                            ``(ii) the amount by which the applicable 
                        credit amount under section 2010(c) with 
                        respect to such estate exceeds such applicable 
                        credit amount in effect for 1998.
                    ``(C) Tentative tax base.--For purposes of this 
                paragraph, the term `tentative tax base' means the 
                amount with respect to which the tax imposed by section 
                2001(b) would be computed without regard to this 
                section.''
            (2) Section 2033A(b)(3) of the 1986 Code is amended to read 
        as follows:
            ``(3) Includible gifts of interests.--The amount of the 
        gifts of qualified family-owned business interests determined 
        under this paragraph is the sum of--
                    ``(A) the amount of such gifts from the decedent to 
                members of the decedent's family taken into account 
                under section 2001(b)(1)(B), plus
                    ``(B) the amount of such gifts otherwise excluded 
                under section 2503(b),
        to the extent such interests are continuously held by members 
        of such family (other than the decedent's spouse) between the 
        date of the gift and the date of the decedent's death.''
    (c) Amendments Related to Section 503 of the 1997 Act.--
            (1) Clause (iii) of section 6166(b)(7)(A) of the 1986 Code 
        is amended to read as follows:
                            ``(iii) for purposes of applying section 
                        6601(j), the 2-percent portion (as defined in 
                        such section) shall be treated as being zero.''
            (2) Clause (iii) of section 6166(b)(8)(A) of the 1986 Code 
        is amended to read as follows:
                            ``(iii) 2-percent interest rate not to 
                        apply.--For purposes of applying section 
                        6601(j), the 2-percent portion (as defined in 
                        such section) shall be treated as being zero.''
    (d) Amendment Related to Section 505 of the 1997 Act.--Paragraphs 
(1) and (2) of section 7479(a) of the 1986 Code are each amended by 
striking ``an estate,'' and inserting ``an estate (or with respect to 
any property included therein),''.
    (e) Amendments Related to Section 506 of the 1997 Act.--
            (1) Subsection (c) of section 2504 of the 1986 Code is 
        amended by striking ``was assessed or paid'' and inserting 
        ``was finally determined for purposes of this chapter''.
            (2) Paragraph (1) of section 506(e) of the 1997 Act is 
        amended by striking ``and (c)'' and inserting ``, (c), and 
        (d)''.

SEC. 7. AMENDMENTS RELATED TO TITLE VII OF 1997 ACT.

    (a) Amendment Related to Section 1400 of 1986 Code.--Section 
1400(b)(2)(B) of the 1986 Code is amended by inserting ``as determined 
on the basis of the 1990 census'' after ``percent''.
    (b) Amendments Related to Section 1400B of 1986 Code.--
            (1) Section 1400B(d)(2) of the 1986 Code is amended by 
        inserting ``as determined on the basis of the 1990 census'' 
        after ``percent''.
            (2) Section 1400B(b) of the 1986 Code is amended by 
        redesignating paragraphs (6) and (7) as paragraphs (5) and (6), 
        respectively.
    (c) Amendments Related to Section 1400C of 1986 Code.--
            (1) Paragraph (1) of section 1400C(c) of the 1986 Code is 
        amended to read as follows:
            ``(1) In general.--The term `first-time homebuyer' means 
        any individual if such individual (and if married, such 
        individual's spouse) had no present ownership interest in a 
        principal residence in the District of Columbia during the 1-
        year period ending on the date of the purchase of the principal 
        residence to which this section applies.''
            (2) Subparagraph (B) of section 1400C(e)(2) of the 1986 
        Code is amended by inserting before the period ``on the date 
        the taxpayer first occupies such residence''.
            (3) Paragraph (3) of section 1400C(e) of the 1986 Code is 
        amended by striking all that follows ``principal residence'' 
        and inserting ``on the date such residence is purchased.''
            (4) Subsection (i) of section 1400C of the 1986 Code is 
        amended to read as follows:
    ``(i) Application of Section.--This section shall apply to property 
purchased after August 4, 1997, and before January 1, 2001.''
            (5) Subsection (c) of section 23 of the 1986 Code is 
        amended by inserting ``and section 1400C'' after ``other than 
        this section''.
            (6) Subparagraph (C) of section 25(e)(1) of the 1986 Code 
        is amended by striking ``section 23'' and inserting ``sections 
        23 and 1400C''.

SEC. 8. AMENDMENTS RELATED TO TITLE IX OF 1997 ACT.

    (a) Amendments Related to Section 901 of 1997 Act.--
            (1) Section 9503(c)(7) of the 1986 Code is amended by 
        striking ``resulting from the amendments made by'' and 
        inserting ``(and transfers to the Mass Transit Account) 
        resulting from the amendments made by subsections (a) and (b) 
        of section 901 of''.
            (2) Subsection (e) of section 901 of the 1997 Act is 
        amended by adding at the end the following new sentence: ``For 
        purposes of determining amounts appropriated to the Highway 
        Trust Fund or transfers to any account, the deposits to which 
        the preceding sentence applies shall be treated as made when 
they would have been required to be made without regard to such 
sentence.''
    (b) Amendment Related to Section 907 of 1997 Act.--Paragraph (2) of 
section 9503(e) of the 1986 Code is amended by striking the last 
sentence and inserting the following new sentence: ``For purposes of 
the preceding sentence, the term `mass transit portion' means, for any 
fuel with respect to which tax was imposed under section 4041 or 4081 
and otherwise deposited into the Highway Trust Fund, the amount 
determined at the rate of--
                    ``(A) except as otherwise provided in this 
                sentence, 2.86 cents per gallon,
                    ``(B) 1.77 cents per gallon in the case of any 
                partially exempt methanol or ethanol fuel (as defined 
                in section 4041(m)) none of the alcohol in which 
                consists of ethanol,
                    ``(C) 1.86 cents per gallon in the case of 
                liquefied natural gas,
                    ``(D) 2.13 cents per gallon in the case of 
                liquefied petroleum gas, and
                    ``(E) 9.71 cents per MCF (determined at standard 
                temperature and pressure) in the case of compressed 
                natural gas.''
    (c) Amendment Related to Section 976 of 1997 Act.--Section 
6103(d)(5) of the 1986 Code is amended by striking ``section 967 of the 
Taxpayer Relief Act of 1997.'' and inserting ``section 976 of the 
Taxpayer Relief Act of 1997. Subsections (a)(2) and (p)(4) and sections 
7213 and 7213A shall not apply with respect to disclosures or 
inspections made pursuant to this paragraph.''

SEC. 9. AMENDMENTS RELATED TO TITLE X OF 1997 ACT.

    (a) Amendments Related to Section 1001 of 1997 Act.--
            (1) Paragraph (2) of section 1259(b) of the 1986 Code is 
        amended--
                    (A) by striking ``debt'' each place it appears in 
                clauses (i) and (ii) of subparagraph (A) and inserting 
                ``position'',
                    (B) by striking ``and'' at the end of subparagraph 
                (A), and
                    (C) by redesignating subparagraph (B) as 
                subparagraph (C) and by inserting after subparagraph 
                (A) the following new subparagraph:
                    ``(B) any hedge with respect to a position 
                described in subparagraph (A), and''.
            (2) Section 1259(d)(1) of the 1986 Code is amended by 
        inserting ``(including cash)'' after ``property''.
            (3) Subparagraph (D) of section 475(f)(1) of the 1986 Code 
        is amended by adding at the end the following new sentence: 
        ``Subsection (d)(3) shall not apply under the preceding 
        sentence for purposes of applying sections 1402 and 7704.''
            (4) Subparagraph (C) of section 1001(d)(3) of the 1997 Act 
        is amended by striking ``within the 30-day period beginning 
        on'' and inserting ``before the close of the 30th day after''.
    (b) Amendments Related to Section 1012 of 1997 Act.--
            (1) Paragraph (1) of section 1012(d) of the 1997 Act is 
        amended by striking ``1997, pursuant'' and inserting ``1997; 
        except that the amendment made by subsection (a) shall apply to 
        such distributions only if pursuant''.
            (2) Subparagraph (A) of section 355(e)(3) of the 1986 Code 
        is amended--
                    (A) by striking ``shall not be treated as described 
                in'' and inserting ``shall not be taken into account in 
                applying'', and
                    (B) by striking clause (iv) and inserting the 
                following new clause:
                            ``(iv) The acquisition of stock in the 
                        distributing corporation or any controlled 
                        corporation to the extent that the percentage 
                        of stock owned directly or indirectly in such 
                        corporation by each person owning stock in such 
                        corporation immediately before the acquisition 
                        does not decrease.''
    (c) Amendments Related to Section 1014 of 1997 Act.--
            (1) Paragraph (1) of section 351(g) of the 1986 Code is 
        amended by adding ``and'' at the end of subparagraph (A) and by 
        striking subparagraphs (B) and (C) and inserting the following 
        new subparagraph:
                    ``(B) if (and only if) the transferor receives 
                stock other than nonqualified preferred stock--
                            ``(i) subsection (b) shall apply to such 
                        transferor, and
                            ``(ii) such nonqualified preferred stock 
                        shall be treated as other property for purposes 
                        of applying subsection (b).''
            (2) Clause (ii) of section 354(a)(2)(C) of 1986 Code is 
        amended by adding at the end the following new subclause:
                                    ``(III) Extension of statute of 
                                limitations.--The statutory period for 
                                the assessment of any deficiency 
                                attributable to a corporation failing 
                                to be a family-owned corporation shall 
                                not expire before the expiration of 3 
                                years after the date the Secretary is 
                                notified by the corporation (in such 
                                manner as the Secretary may prescribe) 
                                of such failure, and such deficiency 
                                may be assessed before the expiration 
                                of such 3-year period notwithstanding 
                                the provisions of any other law or rule 
                                of law which would otherwise prevent 
                                such assessment.''
    (d) Amendment Related to Section 1024 of 1997 Act.--Section 
6331(h)(1) of the 1986 Code is amended by striking ``The effect of a 
levy'' and inserting ``If the Secretary approves a levy under this 
subsection, the effect of such levy''.
    (e) Amendments Related to Section 1031 of 1997 Act.--
            (1) Subsection (l) of section 4041 of the 1986 Code is 
        amended by striking ``subsection (e) or (f)'' and inserting 
        ``subsection (f) or (g)''.
            (2) Subsection (b) of section 9502 of the 1986 Code is 
        amended by moving the sentence added at the end of paragraph 
        (1) to the end of such subsection.
            (3) Section 6421(f)(2) of the 1986 Code is amended by 
        adding at the end the following flush sentence:
        ``Subparagraph (B) shall not apply to fuel used as supplies for 
        vessels or aircraft (as defined in section 4221(d)(3)) on 
        flight segments outside the United States or beginning in the 
        United States and ending outside the United States.''
    (f) Amendments Related to Section 1032 of 1997 Act.--
            (1) Section 1032(a) of the 1997 Act is amended by striking 
        ``Subsection (a) of section 4083'' and inserting ``Paragraph 
        (1) of section 4083(a)''.
            (2) Section 1032(e)(12)(A) of the 1997 Act shall be applied 
        as if ``gasoline, diesel fuel,'' were the material proposed to 
        be stricken.
            (3) Paragraph (1) of section 4101(e) of the 1986 Code is 
        amended by striking ``dyed diesel fuel and kerosene'' and 
        inserting ``such fuel in a dyed form''.
    (g) Amendment Related to Section 1055 of 1997 Act.--Section 
6611(g)(1) of the 1986 Code is amended by striking ``(e), and (h)'' and 
inserting ``and (e)''.
    (h) Amendment Related to Section 1083 of 1997 Act.--Section 
1083(a)(2) of the 1997 Act is amended--
            (1) by striking ``21'' and inserting ``20'', and
            (2) by striking ``22'' and inserting ``21''.
    (i) Amendment Related to Section 1084 of 1997 Act.--
            (1) Paragraph (3) of section 264(a) of the 1986 Code is 
        amended by striking ``subsection (c)'' and inserting 
        ``subsection (d)''.
            (2) Paragraph (4) of section 264(a) of the 1986 Code is 
        amended by striking ``subsection (d)'' and inserting 
        ``subsection (e)''.
            (3) Paragraph (4) of section 264(f) of the 1986 Code is 
        amended by adding at the end the following new subparagraph:
                    ``(E) Master contracts.--If coverage for each 
                insured under a master contract is treated as a 
                separate contract for purposes of sections 817(h), 
                7702, and 7702A, coverage for each such insured shall 
                be treated as a separate contract for purposes of 
                subparagraph (A). For purposes of the preceding 
                sentence, the term `master contract' shall not include 
                any group life insurance contract (as defined in 
                section 848(e)(2)).''
            (4)(A) Clause (iv) of section 264(f)(5)(A) of the 1986 Code 
        is amended by striking the second sentence.
            (B) Subparagraph (B) of section 6724(d)(1) of the 1986 Code 
        is amended by striking ``or'' at the end of clause (xv), by 
        striking the period at the end of clause (xvi) and inserting 
        ``, or'', and by adding at the end the following new clause:
                            ``(xvii) section 264(f)(5)(A)(iv) (relating 
                        to reporting with respect to certain life 
                        insurance and annuity contracts).''
            (C) Paragraph (2) of section 6724(d) of the 1986 Code is 
        amended by striking ``or'' at the end of subparagraph (Y), by 
        striking the period at the end of subparagraph (Z) and 
        inserting ``or'', and by adding at the end the following new 
        subparagraph:
                    ``(AA) section 264(f)(5)(A)(iv) (relating to 
                reporting with respect to certain life insurance and 
                annuity contracts).''
    (j) Amendment Related to Section 1085 of 1997 Act.--Paragraph (5) 
of section 32(c) of the 1986 Code is amended--
            (1) by inserting before the period at the end of 
        subparagraph (A) ``and increased by the amounts described in 
        subparagraph (C)'',
            (2) by adding ``or'' at the end of clause (iii) of 
        subparagraph (B), and
            (3) by striking all that follows subclause (II) of 
        subparagraph (B)(iv) and inserting the following:
                                    ``(III) other trades or businesses.
                        For purposes of clause (iv), there shall not be 
                        taken into account items which are attributable 
                        to a trade or business which consists of the 
                        performance of services by the taxpayer as an 
                        employee.
                    ``(C) Certain amounts included.--An amount is 
                described in this subparagraph if it is--
                            ``(i) interest received or accrued during 
                        the taxable year which is exempt from tax 
                        imposed by this chapter, or
                            ``(ii) amounts received as a pension or 
                        annuity, and any distributions or payments 
                        received from an individual retirement plan, by 
                        the taxpayer during the taxable year to the 
                        extent not included in gross income.
                Clause (ii) shall not include any amount which is not 
                includible in gross income by reason of section 402(c), 
                403(a)(4), 403(b), 408(d) (3), (4), or (5), or 
                457(e)(10).''
    (k) Amendment Related to Section 1088 of 1997 Act.--Section 
1088(b)(2)(C) of the 1997 Act is amended by inserting ``more than 1 
year'' before ``after''.
    (l) Amendment Related to Section 1089 of 1997 Act.--Paragraphs 
(1)(C) and (2)(C) of section 664(d) of the 1986 Code are each amended 
by adding ``, and'' at the end.

SEC. 10. AMENDMENTS RELATED TO TITLE XI OF 1997 ACT.

    (a) Amendment Related to Section 1103 of 1997 Act.--The paragraph 
(3) of section 59(a) added by section 1103 of the 1997 Act is 
redesignated as paragraph (4).
    (b) Amendment Related to Section 1121 of 1997 Act.--Section 
1298(a)(2)(B) of the 1986 Code is amended by adding at the end the 
following new sentence: ``Section 1297(e) shall not apply in 
determining whether a corporation is a passive foreign investment 
company for purposes of this subparagraph.''
    (c) Amendment Related to Section 1122 of 1997 Act.--Section 
672(f)(3)(B) of the 1986 Code is amended by striking ``section 1296'' 
and inserting ``section 1297''.
    (d) Amendment Related to Section 1123 of 1997 Act.--The subsection 
(e) of section 1297 of the 1986 Code added by section 1123 of the 1997 
Act is redesignated as subsection (f).
    (e) Amendment Related to Section 1144 of 1997 Act.--Paragraphs (1) 
and (2) of section 1144(c) of the 1997 Act are each amended by striking 
``6038B(b)'' and inserting ``6038B(c) (as redesignated by subsection 
(b))''.

SEC. 11. AMENDMENTS RELATED TO TITLE XII OF 1997 ACT.

    (a) Amendment Related to Section 1204 of 1997 Act.--The last 
sentence of section 162(a) of the 1986 Code is amended by striking 
``investigate'' and all that follows and inserting ``investigate or 
prosecute, or provide support services for the investigation or 
prosecution of, a Federal crime.''
    (b) Amendments Related to Section 1205 of 1997 Act.--
            (1) Section 6311(e)(1) of the 1986 Code is amended by 
        striking ``section 6103(k)(8)'' and inserting ``section 
        6103(k)(9)''.
            (2) Paragraph (8) of section 6103(k) of the 1986 Code (as 
        added by section 1205(c)(1) of the 1997 Act) is redesignated as 
        paragraph (9).
            (3) The heading for section 7431(g) of the 1986 Code is 
        amended by striking ``(8)'' and inserting ``(9)''.
            (4) Section 1205(c)(3) of the 1997 Act shall be applied as 
        if it read as follows:
            ``(3) Section 6103(p)(3)(A), as amended by section 
        1026(b)(1)(A), is amended by striking ``or (8)'' and inserting 
        ``(8), or (9)''.
            (5) Section 1213(b) of the 1997 Act is amended by striking 
        ``section 6724(d)(1)(A)'' and inserting ``section 6724(d)(1)''.
    (c) Amendment Related to Section 1226 of 1997 Act.--Section 1226 of 
the 1997 Act is amended by striking ``ending on or'' and inserting 
``beginning''.
    (d) Amendment Related to Section 1285 of 1997 Act.--Section 7430(b) 
of the 1986 Code is amended by redesignating paragraph (5) as paragraph 
(4).

SEC. 12. AMENDMENTS RELATED TO TITLE XIII OF 1997 ACT.

    (a) Section 646 of the 1986 Code is redesignated as section 645.
    (b) The item relating to section 646 in the table of sections for 
subpart A of part I of subchapter J of chapter 1 of the 1986 Code is 
amended by striking ``Sec. 646'' and inserting ``Sec. 645''.
    (c) Paragraph (1) of section 2652(b) of the 1986 Code is amended by 
striking ``section 646'' and inserting ``section 645''.
    (d) Paragraph (3) of section 1(g) of the 1986 Code is amended by 
striking subparagraph (C) and by redesignating subparagraph (D) as 
subparagraph (C).
    (e) Section 641 of the 1986 Code is amended by striking subsection 
(c) and by redesignating subsection (d) as subsection (c).
    (f) Paragraph (4) of section 1361(e) of the 1986 Code is amended by 
striking ``section 641(d)'' and inserting ``section 641(c)''.
    (g) Subparagraph (A) of section 6103(e)(1) of the 1986 Code is 
amended by striking clause (ii) and by redesignating clauses (iii) and 
(iv) as clauses (ii) and (iii), respectively.

SEC. 13. AMENDMENTS RELATED TO TITLE XIV OF 1997 ACT.

    (a) Amendment Related to Section 1434 of 1997 Act.--Paragraph (2) 
of section 4052(f) of the 1986 Code is amended by striking ``this 
section'' and inserting ``such section''.
    (b) Amendment Related to Section 1436 of 1997 Act.--Paragraph (2) 
of section 4091(a) of the 1986 Code is amended by inserting ``or on 
which tax has been credited or refunded'' after ``such paragraph''.

SEC. 14. AMENDMENTS RELATED TO TITLE XV OF 1997 ACT.

    (a) Amendment Related to Section 1501 of 1997 Act.--The paragraph 
(8) of section 408(p) of the 1986 Code added by section 1501(b) of the 
1997 Act is redesignated as paragraph (9).
    (b) Amendment Related to Section 1505 of 1997 Act.--Section 
1505(d)(2) of the 1997 Act is amended by striking ``(b)(12)'' and 
inserting ``(b)(12)(A)(i)''.
    (c) Amendment Related to Section 1531 of 1997 Act.--Subsection (f) 
of section 9811 of the 1986 Code (as added by section 1531 of the 1997 
Act) is redesignated as subsection (e).

SEC. 15. AMENDMENTS RELATED TO TITLE XVI.

    (a) Amendments Related to Section 1601(d) of 1997 Act.--
            (1) Amendments related to section 1601(d)(1)--
                    (A) Section 408(p)(2)(D)(i) of the 1986 Code is 
                amended by striking ``or (B)'' in the last sentence.
                    (B) Section 408(p) of the 1986 Code is amended by 
                adding at the end the following:
            ``(10) Special rules for acquisitions, dispositions, and 
        similar transactions.--
                    ``(A) In general.--An employer which fails to meet 
                any applicable requirement by reason of an acquisition, 
                disposition, or similar transaction shall not be 
                treated as failing to meet such requirement during the 
                transition period if--
                            ``(i) the employer satisfies requirements 
                        similar to the requirements of section 
                        410(b)(6)(C)(i)(II), and
                            ``(ii) the qualified salary reduction 
                        arrangement maintained by the employer would 
                        satisfy the requirements of this subsection 
                        after the transaction if the employer which 
                        maintained the arrangement before the 
                        transaction had remained a separate employer.
                    ``(B) Applicable requirement.--For purposes of this 
                paragraph, the term `applicable requirement' means--
                            ``(i) the requirement under paragraph 
                        (2)(A)(i) that an employer be an eligible 
                        employer,
                            ``(ii) the requirement under paragraph 
                        (2)(D) that an arrangement be the only plan of 
                        an employer, and
                            ``(iii) the participation requirements 
                        under paragraph (4).
                    ``(C) Transition period.--For purposes of this 
                paragraph, the term `transition period' means the 
                period beginning on the date of any transaction 
                described in subparagraph (A) and ending on the last 
                day of the second calendar year following the calendar 
                year in which such transaction occurs.''
                    (C) Section 408(p)(2) of the 1986 Code is amended--
                            (i) by striking ``the preceding sentence 
                        shall apply only in accordance with rules 
                        similar to the rules of section 
                        410(b)(6)(C)(i)'' in the last sentence of 
                        subparagraph (C)(i)(II) and inserting ``the 
                        preceding sentence shall not apply'', and
                            (ii) by striking clause (iii) of 
                        subparagraph (D).
            (2) Amendment to section 1601(d)(4).--Section 1601(d)(4)(A) 
        of the 1997 Act is amended--
                    (A) by striking ``Section 403(b)(11)'' and 
                inserting ``Paragraphs (7)(A)(ii) and (11) of section 
                403(b)'', and
                    (B) by striking ``403(b)(1)'' in clause (ii) and 
                inserting ``403(b)(10)''.
    (b) Amendment Related to Section 1601(f)(4) of 1997 Act.--
Subsection (d) of section 6427 of the 1986 Code is amended--
            (1) by striking ``Helicopters'' in the heading and 
        inserting ``Other Aircraft Uses'', and
            (2) by inserting ``or a fixed-wing aircraft'' after 
        ``helicopter''.

SEC. 16. AMENDMENT RELATED TO OMNIBUS BUDGET RECONCILIATION ACT OF 
              1993.

    (a) In General.--Section 196(c) of the 1986 Code is amended by 
striking ``and'' at the end of paragraph (6), by striking the period at 
the end of paragraph (7), and insert ``, and'', and by adding at the 
end the following new paragraph:
            ``(8) the employer social security credit determined under 
        section 45B(a).''
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in the amendments made by section 13443 of the 
Revenue Reconciliation Act of 1993.

SEC. 17. AMENDMENT RELATED TO TAX REFORM ACT OF 1984.

    (a) In General.--Paragraph (3) of section 136(c) of the Tax Reform 
Act of 1984 is amended by adding at the end the following flush 
sentence:
        ``The treatment under the preceding sentence shall apply to 
        each period after June 30, 1983, during which such members are 
        stapled entities, whether or not such members are stapled 
        entities for all periods after June 30, 1983.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the Tax Reform Act of 1984 as of the date 
of the enactment of such Act.

SEC. 18. AMENDMENT RELATED TO TAX REFORM ACT OF 1986.

    (a) In General.--Section 6401(b)(1) of the 1986 Code is amended by 
striking ``and D'' and inserting ``D, and G''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the amendments made by section 701(b) of 
the Tax Reform Act of 1986.

SEC. 19. MISCELLANEOUS CLERICAL AND DEADWOOD CHANGES.

    (a)(1) Section 6421 of the 1986 Code is amended by redesignating 
subsections (j) and (k) as subsections (i) and (j), respectively.
    (2) Subsection (b) of section 34 of the 1986 Code is amended by 
striking ``section 6421(j)'' and inserting ``section 6421(i)''.
    (b) Sections 4092(b) and 6427(q)(2) of the 1986 Code are each 
amended by striking ``section 4041(c)(4)'' and inserting ``section 
4041(c)(2)''.
    (c) Sections 4221(c) and 4222(d) of the 1986 Code are each amended 
by striking ``4053(a)(6)'' and inserting ``4053(6)''.
    (d) Paragraph (5) of section 6416(b) of the 1986 Code is amended by 
striking ``section 4216(e)(1)'' each place it appears and inserting 
``section 4216(d)(1)''.
    (e) Paragraph (3) of section 6427(f) of the 1986 Code is amended by 
striking ``, (e),''.
    (f)(1) Section 6427 of the 1986 Code, as amended by paragraph (2), 
is amended by redesignating subsections (n), (p), (q), and (r) as 
subsections (m), (n), (o), and (p), respectively.
    (2) Paragraphs (1) and (2)(A) of section 6427(i) of the 1986 Code 
are each amended by striking ``(q)'' and inserting ``(o)''.
    (g) Subsection (e) of section 9502 of the 1986 Code is amended to 
read as follows:
    ``(e) Certain Taxes on Alcohol Mixtures To Remain in General 
Fund.--For purposes of this section, the amounts which would (but for 
this subsection) be required to be appropriated under subparagraphs 
(A), (C), and (D) of subsection (b)(1) shall be reduced by--
            ``(1) 0.6 cent per gallon in the case of taxes imposed on 
        any mixture at least 10 percent of which is alcohol (as defined 
        in section 4081(c)(3)) if any portion of such alcohol is 
        ethanol, and
            ``(2) 0.67 cent per gallon in the case of fuel used in 
        producing a mixture described in paragraph (1).''
    (h)(1) Clause (i) of section 9503(c)(2)(A) of the 1986 Code is 
amended by adding ``and'' at the end of subclause (II), by striking 
subclause (III), and by redesignating subclause (IV) as subclause 
(III).
    (2) Clause (ii) of such section is amended by striking ``gasoline, 
special fuels, and lubricating oil'' each place it appears and 
inserting ``fuel''.
    (i) The amendments made by this section shall take effect on the 
date of the enactment of this Act.

SEC. 20. EFFECTIVE DATE.

    Except as otherwise provided in this Act, the amendments made by 
this Act shall take effect as if included in the provisions of the 
Taxpayer Relief Act of 1997 to which they relate.
                                 <all>