[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2646 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 2646

To amend the Internal Revenue Code of 1986 to provide common sense tax 
                          relief for families.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 29, 1999

  Mrs. McCarthy of New York introduced the following bill; which was 
              referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide common sense tax 
                          relief for families.

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

SECTION 1. SHORT TITLE.

    (a) Short Title.--This Act may be cited as the ``Common Sense 
Family Tax Relief Act of 1999''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--

Sec. 1. Short title.
                    TITLE I--TAX RELIEF FOR FAMILIES

Sec. 101. Elimination of marriage penalty in standard deduction.
Sec. 102. Expansion of dependent care tax credit.
Sec. 103. Credit for employer expenses in providing certain dependent 
                            care services.
Sec. 104. Reduction in individual capital gain tax rates.
Sec. 105. Capital gains tax rates applied to capital gains of 
                            designated settlement funds.
                  TITLE II--TAX RELIEF FOR BUSINESSES

Sec. 201. Permanent extension of research credit; increase in 
                            percentages under alternative incremental 
                            credit.
Sec. 202. Repeal of limitation on estate tax deduction for family-owned 
                            business interests.
                  TITLE III--EDUCATIONAL OPPORTUNITIES

Sec. 301. Elimination of 60-month limit on student loan interest 
                            deduction.
Sec. 302. Credit for information technology training program expenses.
Sec. 303. Certain credits related to education and children allowed 
                            against alternative minimum tax.
              TITLE IV--TAX RELIEF FOR RETIREMENT SAVINGS

Sec. 401. Increase in deduction for individual retirement plan savings.
Sec. 402. Adjustment in monthly exempt amount for purposes of the 
                            social security earnings test.
               TITLE V--INCENTIVE FOR AFFORDABLE HOUSING

Sec. 501. Increase in State ceiling on low-income housing credit.
        TITLE VI--INCENTIVES FOR HEALTH CARE AND LONG-TERM CARE

Sec. 601. Deduction for 100 percent of health insurance costs of self-
                            employed individuals.
Sec. 602. Credit for taxpayers with long-term care needs.

                    TITLE I--TAX RELIEF FOR FAMILIES

SEC. 101. ELIMINATION OF MARRIAGE PENALTY IN STANDARD DEDUCTION.

    (a) In General.--Paragraph (2) of section 63(c) (relating to 
standard deduction) is amended--
            (1) by striking ``$5,000'' in subparagraph (A) and 
        inserting ``twice the dollar amount in effect under 
        subparagraph (C) for the taxable year'',
            (2) by adding ``or'' at the end of subparagraph (B),
            (3) by striking ``in the case of'' and all that follows in 
        subparagraph (C) and inserting ``in any other case.'', and
            (4) by striking subparagraph (D).
    (b) Technical Amendments.--
            (1) Subparagraph (B) of section 1(f)(6) is amended by 
        striking ``(other than with'' and all that follows through 
        ``shall be applied'' and inserting ``(other than with respect 
        to sections 63(c)(4) and 151(d)(4)(A)) shall be applied''.
            (2) Paragraph (4) of section 63(c) is amended by adding at 
        the end the following flush sentence:
        ``The preceding sentence shall not apply to the amount referred 
        to in paragraph (2)(A).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 102. EXPANSION OF DEPENDENT CARE TAX CREDIT.

    (a) In General.--Paragraph (2) of section 21(a) (relating to 
expenses for household and dependent care services necessary for 
gainful employment) is amended to read as follows:
            ``(2) Applicable percentage defined.--For purposes of 
        paragraph (1), the term `applicable percentage' means 50 
        percent reduced (but not below 20 percent) by 1 percentage 
        point for each $1,000 (or fraction thereof) by which the 
        taxpayer's adjusted gross income for the taxable year exceeds 
        $30,000.''
    (b) Minimum Credit Allowed for Stay-at-Home Parents.--Section 21(e) 
(relating to special rules) is amended by adding at the end the 
following:
            ``(11) Minimum credit allowed for stay-at-home parents.--
        Notwithstanding subsection (d), in the case of any taxpayer 
        with one or more qualifying individuals described in subsection 
        (b)(1)(A) under the age of 1 at any time during the taxable 
        year, such taxpayer shall be deemed to have employment-related 
        expenses with respect to such qualifying individuals in an 
        amount equal to the greater of--
                    ``(A) the amount of employment-related expenses 
                incurred for such qualifying individuals for the 
                taxable year (determined under this section without 
                regard to this paragraph), or
                    ``(B) $125 for each month in such taxable year 
                during which such qualifying individual is under the 
                age of 1.''.
    (c) Inflation Adjustment of Dollar Amounts.--
            (1) Section 21 is amended by redesignating subsection (f) 
        as subsection (g) and by inserting after subsection (e) the 
        following new subsection:
    ``(f) Inflation Adjustment.--In the case of any taxable year 
beginning in a calendar year after 2000, the $30,000 amount contained 
in subsection (a), the $2,400 amount in subsection (c), and the $125 
amount in subsection (e)(11)(B) shall be increased by an amount equal 
to--
            ``(1) such dollar amount, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for such calendar year by substituting 
        `calendar year 1999' for `calendar year 1992' in subparagraph 
        (B) thereof.
If the increase determined under the preceding sentence is not a 
multiple of $50 ($1 in the case of the $60 amount in subsection 
(e)(11)(B)), such amount shall be rounded to the next lowest multiple 
thereof.''
            (2) Paragraph (2) of section 21(c) is amended by striking 
        ``$4,800'' and inserting ``twice the dollar amount applicable 
        under paragraph (1)''.
            (3) Paragraph (2) of section 21(d) is amended by striking 
        ``less than--'' and all that follows through the end of the 
        first sentence and inserting ``less than \1/12\ of the amount 
        which applies under subsection (c) to the taxpayer for the 
        taxable year.''
    (d) Credit Allowed Based on Residency in Certain Cases.--Subsection 
(e) of section 21 is amended by adding at the end the following new 
paragraph:
            ``(12) Credit allowed based on residency in certain 
        cases.--In the case of a taxpayer--
                    ``(A) who does not satisfy the household 
                maintenance test of subsection (a) for any period, but
                    ``(B) whose principal place of abode for such 
                period is also the principal place of abode of any 
                qualifying individual, then such taxpayer shall be 
                treated as satisfying such test for such period but the 
                amount of credit allowable under this section with 
                respect to such individual shall be determined by 
                allowing only \1/12\ of the limitation under subsection 
                (c) for each full month that the requirement of 
                subparagraph (B) is met.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 103. CREDIT FOR EMPLOYER EXPENSES IN PROVIDING CERTAIN DEPENDENT 
              CARE SERVICES.

    (a) General Rule.--Subpart D of part IV of subchapter A of chapter 
1 is amended by adding at the end the following new section:

``SEC. 45D. EMPLOYER EXPENSES IN PROVIDING DEPENDENT CARE SERVICES.

    ``(a) General Rule.--For purposes of section 38, the employer day 
care center credit determined under this section for the taxable year 
is the amount determined under subsection (b) with respect to each 
qualified day care center of the taxpayer.
    ``(b) Credit Per Facility.--For purposes of this section--
            ``(1) In general.--The amount determined under this 
        subsection for any taxable year with respect to any qualified 
        day care facility of the taxpayer is 50 percent of the excess 
        (if any) of--
                    ``(A) the expenses paid or incurred by the taxpayer 
                during the taxable year in providing dependent care 
                services at such facility for employees, over
                    ``(B) the aggregate amount received or accrued 
                during the taxable year by the employer for such 
                services.
            ``(2) Depreciation allowances.--For purposes of paragraph 
        (1), depreciation allowances under section 167 shall be treated 
        as expenses.
    ``(c) Qualified Day Care Center.--For purposes of this section, the 
term `qualified day care center' means any day care center--
            ``(1) which is operated by the taxpayer exclusively for 
        purposes of providing dependent care services to employees,
            ``(2) which is located on the business premises of the 
        taxpayer or on a site adjacent to such premises,
            ``(3) which complies with all applicable laws and 
        regulations of a State or unit of local government, and
            ``(4) the operation of which is part of a dependent care 
        assistance program (as defined in section 129(d)).''
    (b) Credit Made Part of General Business Credit.--Subsection (b) of 
section 38 is amended by striking ``plus'' at the end of paragraph 
(11), by striking the period at the end of paragraph (12) and inserting 
``, plus'', and by adding at the end thereof the following new 
paragraph:
            ``(13) the employer day care center credit determined under 
        section 45D(a).''
    (c) Denial of Double Benefit.--Section 280C is amended by adding at 
the end thereof the following new subsection:
    ``(d) Credit for Employer Day Care Center Expenses.--No deduction 
shall be allowed for that portion of the expenses referred to in 
section 45D(b)(1)(A) otherwise allowable as a deduction for the taxable 
year which is equal to the amount of the credit determined for such 
taxable year under section 45D(a).''
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45D. Employer expenses in 
                                        providing dependent care 
                                        services.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 104. REDUCTION IN INDIVIDUAL CAPITAL GAIN TAX RATES.

    (a) In General.--
            (1) Sections 1(h)(1)(B) and 55(b)(3)(B) are each amended by 
        striking ``10 percent'' and inserting ``7.5 percent''.
            (2) The following sections are each amended by striking 
        ``20 percent'' and inserting ``15 percent'':
                    (A) Section 1(h)(1)(C).
                    (B) Section 55(b)(3)(C).
                    (C) Section 1445(e)(1).
                    (D) The second sentence of section 7518(g)(6)(A).
                    (E) The second sentence of section 607(h)(6)(A) of 
                the Merchant Marine Act, 1936.
            (3) Sections 1(h)(1)(D) and 55(b)(3)(D) are each amended by 
        striking ``25 percent'' and inserting ``20 percent''.
    (b) Conforming Amendments.--
            (1) Section 311 of the Taxpayer Relief Act of 1997 is 
        amended by striking subsection (e).
            (2) Section 1(h) is amended--
                    (A) by striking paragraphs (2), (9), and (13),
                    (B) by redesignating paragraphs (3) through (8) as 
                paragraphs (2) through (7), respectively, and
                    (C) by redesignating paragraphs (10), (11), and 
                (12) as paragraphs (8), (9), and (10), respectively.
            (3) Paragraph (3) of section 55(b) is amended by striking 
        ``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).''.
            (4) Paragraph (7) of section 57(a) is amended--
                    (A) by striking ``42 percent'' and inserting ``6 
                percent'', and
                    (B) by striking the last sentence.
    (c) Transitional Rules for Taxable Years Which Include July 1, 
1999.--For purposes of applying section 1(h) of the Internal Revenue 
Code of 1986 in the case of a taxable year which includes July 1, 
1999--
            (1) The amount of tax determined under subparagraph (B) of 
        section 1(h)(1) of such Code shall be the sum of--
                    (A) 7.5 percent of the lesser of--
                            (i) the net capital gain taking into 
                        account only gain or loss properly taken into 
                        account for the portion of the taxable year on 
                        or after such date (determined without regard 
                        to collectibles gain or loss, gain described in 
                        section (1)(h)(6)(A)(i) of such Code, and 
                        section 1202 gain), or
                            (ii) the amount on which a tax is 
                        determined under such subparagraph (without 
                        regard to this subsection), plus
                    (B) 10 percent of the excess (if any) of--
                            (i) the amount on which a tax is determined 
                        under such subparagraph (without regard to this 
                        subsection), over
                            (ii) the amount on which a tax is 
                        determined under subparagraph (A).
            (2) The amount of tax determined under subparagraph (C) of 
        section (1)(h)(1) of such Code shall be the sum of--
                    (A) 15 percent of the lesser of--
                            (i) the excess (if any) of the amount of 
                        net capital gain determined under subparagraph 
                        (A)(i) of paragraph (1) of this subsection over 
                        the amount on which a tax is determined under 
                        subparagraph (A) of paragraph (1) of this 
                        subsection, or
                            (ii) the amount on which a tax is 
                        determined under such subparagraph (C) (without 
                        regard to this subsection), plus
                    (B) 20 percent of the excess (if any) of--
                            (i) the amount on which a tax is determined 
                        under such subparagraph (C) (without regard to 
                        this subsection), over
                            (ii) the amount on which a tax is 
                        determined under subparagraph (A) of this 
                        paragraph.
            (3) The amount of tax determined under subparagraph (D) of 
        section (1)(h)(1) of such Code shall be the sum of--
                    (A) 20 percent of the lesser of--
                            (i) the amount which would be determined 
                        under section 1(h)(6)(A)(i) of such Code taking 
                        into account only gain properly taken into 
                        account for the portion of the taxable year on 
                        or after such date, or
                            (ii) the amount on which a tax is 
                        determined under such subparagraph (D) (without 
                        regard to this subsection), plus  
                    (B) 25 percent of the excess (if any) of--
                            (i) the amount on which a tax is determined 
                        under such subparagraph (D) (without regard to 
                        this subsection), over
                            (ii) the amount on which a tax is 
                        determined under subparagraph (A) of this 
                        paragraph.  
            (4) For purposes of applying section 55(b)(3) of such Code, 
        rules similar to the rules of paragraphs (1), (2), and (3) of 
        this subsection shall apply.
            (5) In applying this subsection 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.
            (6) Terms used in this subsection which are also used in 
        section 1(h) of such Code shall have the respective meanings 
        that such terms have in such section.
    (d) Effective Dates.--
            (1) In general.--Except as otherwise provided by this 
        subsection, the amendments made by this section shall apply to 
        taxable years ending after June 30, 1999.
            (2) Withholding.--The amendment made by subsection 
        (a)(2)(C) shall apply to amounts paid after the date of the 
        enactment of this Act.
            (3) Small business stock.--The amendments made by 
        subsection (b)(4) shall apply to dispositions on or after July 
        1, 1999.

SEC. 105. CAPITAL GAINS TAX RATES APPLIED TO CAPITAL GAINS OF 
              DESIGNATED SETTLEMENT FUNDS.

    (a) In General.--Paragraph (1) of section 468B(b) (relating to 
taxation of designated settlement funds) is amended by inserting 
``(subject to section 1(h))'' after ``maximum rate''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

                  TITLE II--TAX RELIEF FOR BUSINESSES

SEC. 201. PERMANENT EXTENSION OF RESEARCH CREDIT; INCREASE IN 
              PERCENTAGES UNDER ALTERNATIVE INCREMENTAL CREDIT.

    (a) Credit Made Permanent.--
            (1) In general.--Section 41 (relating to credit for 
        increasing research activities) is amended by striking 
        subsection (h).
            (2) Conforming amendment.--Paragraph (1) section 45C(b) is 
        amended by striking subparagraph (D).
            (3) Effective date.--The amendments made by this subsection 
        shall apply to amounts paid or incurred after June 30, 1999.
    (b) Increase in Percentages Under Alternative Incremental Credit.--
            (1) In general.--Subparagraph (A) of section 41(c)(4) is 
        amended--
                    (A) by striking ``1.65 percent'' and inserting 
                ``2.65 percent'',
                    (B) by striking ``2.2 percent'' and inserting ``3.2 
                percent'', and
                    (C) by striking ``2.75 percent'' and inserting 
                ``3.75 percent''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after June 30, 1999.

SEC. 202. REPEAL OF LIMITATION ON ESTATE TAX DEDUCTION FOR FAMILY-OWNED 
              BUSINESS INTERESTS.

    (a) In General.--Subsection (a) of section 2057 (relating to 
family-owned business interests) is amended to read as follows:
    ``(a) Allowance of Deduction.--For purposes of the tax imposed by 
section 2001, in the case of an estate of a decedent to which this 
section applies, the value of the taxable estate shall be determined by 
deducting from the value of the gross estate the adjusted value of the 
qualified family-owned business interests of the decedent which are 
described in subsection (b)(2).''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to estates of decedents dying after the date of the enactment of 
this Act.

                  TITLE III--EDUCATIONAL OPPORTUNITIES

SEC. 301. ELIMINATION OF 60-MONTH LIMIT ON STUDENT LOAN INTEREST 
              DEDUCTION.

    (a) In General.--Section 221 (relating to interest on education 
loans) is amended by striking subsection (d) and by redesignating 
subsections (e), (f), and (g) as subsections (d), (e), and (f), 
respectively.
    (b) Conforming Amendment.--Section 6050(e) is amended by striking 
``section 221(e)(1)'' and inserting ``section 221(d)(1)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to any loan interest paid after December 31, 1997.

SEC. 302. CREDIT FOR INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits) is amended by adding at the end 
the following:

``SEC. 45E. INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
employer, the information technology training program credit determined 
under this section is an amount equal to 20 percent of information 
technology training program expenses paid or incurred by the taxpayer 
during the taxable year.
    ``(b) Additional Credit Percentage for Certain Programs.--The 
percentage under subsection (a) shall be increased by 5 percentage 
points for information technology training program expenses paid or 
incurred by the taxpayer with respect to a program operated--
            ``(1) in an empowerment zone or enterprise community 
        designated under part I of subchapter U,
            ``(2) in a school district in which a least 50 percent of 
        the students attending schools in such district are eligible 
        for free or reduced-cost lunches under the school lunch program 
        established under the National School Lunch Act,
            ``(3) in an area designated as a disaster area by the 
        Secretary of Agriculture or by the President under the Disaster 
        Relief and Emergency Assistance Act in the taxable year or the 
        4 preceding taxable years,
            ``(4) in a rural enterprise community designated under 
        section 766 of the Agriculture, Rural Development, Food and 
        Drug Administration, and Related Agencies Appropriations Act, 
        1999, or
            ``(5) in an area designated by the Secretary of Agriculture 
        as a Rural Economic Area Partnership Zone, or
            ``(6) by an employer who has 200 or fewer employees for 
        each working day in each of 20 or more calendar weeks in the 
        current or preceding calendar year.
    ``(c) Limitation.--The amount of information technology training 
program expenses with respect to an individual which may be taken into 
account under subsection (a) for the taxable year shall not exceed 
$6,000.
    ``(d) Information Technology Training Program Expenses.--For 
purposes of this section--
            ``(1) In general.--The term `information technology 
        training program expenses' means expenses paid or incurred by 
        reason of the participation of the employer in any information 
        technology training program.
            ``(2) Information technology training program.--The term 
        `information technology training program' means a program--
                    ``(A) for the training of computer programmers, 
                systems analysts, and computer scientists or engineers 
                (as such occupations are defined by the Bureau of Labor 
                Statistics),
                    ``(B) involving a partnership of--
                            ``(i) employers, and
                            ``(ii) State training programs, school 
                        districts, university systems, or certified 
                        commercial information technology training 
                        providers, and
                    ``(C) at least 50 percent of the costs of which are 
                paid or incurred by the employers.
            ``(3) Certified commercial information technology training 
        provider.--The term `certified commercial information 
        technology training providers' means a private sector provider 
        of educational products and services utilized for training in 
        information technology which is certified with respect to--
                    ``(A) the curriculum that is used for the training, 
                or
                    ``(B) the technical knowledge of the instructors of 
                such provider,
        by 1 or more software publishers or hardware manufacturers the 
        products of which are a subject of the training.
    ``(e) Denial of Double Benefit.--No deduction or credit under any 
other provision of this chapter shall be allowed with respect to 
information technology training program expenses (determined without 
regard to the limitation under subsection (c)).
    ``(f) Allocations.--For purposes of this section, rules similar to 
the rules of section 41(f)(2) shall apply.''
    (b) Credit To Be Part of General Business Credit.--Section 38(b) 
(relating to current year business credit) is amended by striking 
``plus'' at the end of paragraph (12), by striking the period at the 
end of paragraph (13) and inserting ``, plus'', and by adding at the 
end the following:
            ``(14) the information technology training program credit 
        determined under section 45E.''
    (c) No Carrybacks.--Subsection (d) of section 39 (relating to 
carryback and carryforward of unused credits) is amended by adding at 
the end the following:
            ``(9) No carryback of section 45e credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the information technology 
        training program credit determined under section 45E may be 
        carried back to a taxable year ending before the date of the 
        enactment of section 45E.''
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following:

                              ``Sec. 45E. Information technology 
                                        training program expenses.''
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of enactment of this 
Act in taxable years ending after such date.

SEC. 303. CERTAIN CREDITS RELATED TO EDUCATION AND CHILDREN ALLOWED 
              AGAINST ALTERNATIVE MINIMUM TAX.

    (a) In General.--Subsection (a) of section 26 (relating to 
limitation based on amount of tax) is amended to read as follows:
    ``(a) Limitation Based on Amount of Tax.--The aggregate amount of 
credits allowed by this subpart for the taxable year shall not exceed 
the sum of--
            ``(1) the taxpayer's regular tax liability for the taxable 
        year, and
            ``(2) the tax imposed for the taxable year by section 
        55(a).
Paragraph (2) shall not apply to the credits allowable by sections 22, 
23, and 25, and this sentence shall be applied before the preceding 
sentence.''
    (b) Child Credit.--Subsection (d) of section 24 is amended by 
striking paragraph (2) and by redesignating paragraph (3) as paragraph 
(2).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

              TITLE IV--TAX RELIEF FOR RETIREMENT SAVINGS

SEC. 401. INCREASE IN DEDUCTION FOR INDIVIDUAL RETIREMENT PLAN SAVINGS.

    (a) Increase in Maximum Amount of Deduction.--Subparagraph (A) of 
section 219(b)(1) (relating to maximum amount of deduction) is amended 
by striking ``$2,000'' and inserting ``$5,000''.
    (b) Conforming Amendments.--Subsections (a)(1), (b)(2), (j), and 
(p)(8) of section 408 are each amended by striking ``$2,000'' each 
place it appears and inserting ``$5,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 402. ADJUSTMENT IN MONTHLY EXEMPT AMOUNT FOR PURPOSES OF THE 
              SOCIAL SECURITY EARNINGS TEST.

    (a) Increase in Monthly Exempt Amount for Individuals Who Have 
Attained Retirement Age.--Section 203(f)(8)(D) of the Social Security 
Act (42 U.S.C. 403(f)(8)(D)) is amended--
            (1) in clause (iii), by inserting ``and'' at the end; and
            (2) by striking clauses (iv) through (vii) and inserting 
        the following new clause:
                            ``(iv) for each month of any taxable year 
                        ending after 1999 and before 2001, $2,500.''.
    (b) Conforming Amendments.--
            (1) Section 203(f)(8)(B)(ii) of such Act (42 U.S.C. 
        403(f)(8)(B)(ii)) is amended--
                    (A) by striking ``after 2001 and before 2003'' and 
                inserting ``after 1999 and before 2001''; and
                    (B) in subclause (II), by striking ``2001'' and 
                inserting ``1998''.
            (2) The second sentence of section 223(d)(4)(A) of such Act 
        (42 U.S.C. 423(d)(4)(A)) is amended by inserting ``and section 
        402 of the Common Sense Family Tax Relief Act of 1999'' after 
        ``1996''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to taxable years beginning after 1999.

               TITLE V--INCENTIVE FOR AFFORDABLE HOUSING

SEC. 501. INCREASE IN STATE CEILING ON LOW-INCOME HOUSING CREDIT.

    (a) In General.--Clause (i) of section 42(h)(3)(C) (relating to 
State housing credit ceiling) is amended by striking ``$1.25'' and 
inserting ``$1.75''.
    (b) Adjustment of State Ceiling for Increases in Cost-of-Living.--
Paragraph (3) of section 42(h) (relating to housing credit dollar 
amount for agencies) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of a 
                        calendar year after 2000, the dollar amount 
                        contained in subparagraph (C)(i) shall be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year by 
                                substituting `calendar year 1999' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--If any increase under 
                        clause (i) is not a multiple of 5 cents, such 
                        increase shall be rounded to the next lowest 
                        multiple of 5 cents.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years after 1999.

        TITLE VI--INCENTIVES FOR HEALTH CARE AND LONG-TERM CARE

SEC. 601. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS OF SELF-
              EMPLOYED INDIVIDUALS.

    (a) In General.--Paragraph (1) of section 162(l) is amended to read 
as follows:
            ``(1) Allowance of deduction.--In the case of an individual 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to 100 percent of the amount paid during the 
        taxable year for insurance which constitutes medical care for 
        the taxpayer, his spouse, and dependents.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 602. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE NEEDS.

    (a) Allowance of Credit.--
            (1) In general.--Section 24(a) (relating to allowance of 
        child tax credit) is amended to read as follows:
    ``(a) Allowance of Credit.--There shall be allowed as a credit 
against the tax imposed by this chapter for the taxable year an amount 
equal to the sum of--
            ``(1) $500 multiplied by the number of qualifying children 
        of the taxpayer, plus
            ``(2) $1,000 multiplied by the number of applicable 
        individuals with respect to whom the taxpayer is an eligible 
        caregiver for the taxable year.
In any case in which the applicable individual and the eligible 
caregiver are the same individual, the credit allowed by paragraph (2) 
with respect to such individual shall not exceed the aggregate amount 
paid by the taxpayer during the taxable year (not compensated for by 
insurance or otherwise) for qualified long-term care services (as 
defined in section 7702B(c)) for such individual.''
            (2) Additional credit for taxpayer with 3 or more separate 
        credit amounts.--So much of section 24(d) as precedes paragraph 
        (1)(A) thereof is amended to read as follows:
    ``(d) Additional Credit for Taxpayers With 3 or More Separate 
Credit Amounts.--
            ``(1) In general.--If the sum of the number of qualifying 
        children of the taxpayer and the number of applicable 
        individuals with respect to which the taxpayer is an eligible 
        caregiver is 3 or more for any taxable year, the aggregate 
        credits allowed under subpart C shall be increased by the 
        lesser of--''.
            (3) Conforming amendments.--
                    (A) The heading for section 32(n) is amended by 
                striking ``Child'' and inserting ``Family Care''.
                    (B) The heading for section 24 is amended to read 
                as follows:

``SEC. 24. FAMILY CARE CREDIT.''

                    (C) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 24 and inserting the following 
                new item:

                              ``Sec. 24. Family care credit.''.
    (b) Definitions.--Section 24(c) (defining qualifying child) is 
amended to read as follows:
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualifying child.--
                    ``(A) In general.--The term `qualifying child' 
                means any individual if--
                            ``(i) the taxpayer is allowed a deduction 
                        under section 151 with respect to such 
                        individual for the taxable year,
                            ``(ii) such individual has not attained the 
                        age of 17 as of the close of the calendar year 
                        in which the taxable year of the taxpayer 
                        begins, and
                            ``(iii) such individual bears a 
                        relationship to the taxpayer described in 
                        section 32(c)(3)(B).
                    ``(B) Exception for certain noncitizens.--The term 
                `qualifying child' shall not include any individual who 
                would not be a dependent if the first sentence of 
                section 152(b)(3) were applied without regard to all 
                that follows `resident of the United States'.
            ``(2) Applicable individual.--
                    ``(A) In general.--The term `applicable individual' 
                means, with respect to any taxable year, any individual 
                who has been certified, before the due date for filing 
                the return of tax for the taxable year (without 
                extensions), by a physician (as defined in section 
                1861(r)(1) of the Social Security Act) as being an 
individual with long-term care needs described in subparagraph (B) for 
a period--
                            ``(i) which is at least 180 consecutive 
                        days, and
                            ``(ii) a portion of which occurs within the 
                        taxable year.
                Such term shall not include any individual otherwise 
                meeting the requirements of the preceding sentence 
                unless within the 12 month period ending on such due 
                date (or such other period as the Secretary prescribes) 
                a physician (as so defined) has certified that such 
                individual meets such requirements.
                    ``(B) Individuals with long-term care needs.--An 
                individual is described in this subparagraph if the 
                individual meets any of the following requirements:
                            ``(i) The individual is at least 6 years of 
                        age and--
                                    ``(I) is unable to perform (without 
                                substantial assistance from another 
                                individual) at least 3 activities of 
                                daily living (as defined in section 
                                7702B(c)(2)(B)) due to a loss of 
                                functional capacity, or
                                    ``(II) requires substantial 
                                supervision to protect such individual 
                                from threats to health and safety due 
                                to severe cognitive impairment and is 
                                unable to perform at least 1 activity 
                                of daily living (as so defined).
                            ``(ii) The individual is at least 2 but not 
                        6 years of age and is unable due to a loss of 
                        functional capacity to perform (without 
                        substantial assistance from another individual) 
                        at least 2 of the following activities: eating, 
                        transferring, or mobility.
                            ``(iii) The individual is under 2 years of 
                        age and requires specific durable medical 
                        equipment by reason of a severe health 
                        condition or requires a skilled practitioner 
                        trained to address the individual's condition 
                        to be available if the individual's parents or 
                        guardians are absent.
            ``(3) Eligible caregiver.--
                    ``(A) In general.--A taxpayer shall be treated as 
                an eligible caregiver for any taxable year with respect 
                to the following individuals:
                            ``(i) The taxpayer.
                            ``(ii) The taxpayer's spouse.
                            ``(iii) An individual with respect to whom 
                        the taxpayer is allowed a deduction under 
                        section 151 for the taxable year.
                            ``(iv) An individual who would be described 
                        in clause (iii) for the taxable year if section 
                        151(c)(1)(A) were applied by substituting for 
                        the exemption amount an amount equal to the sum 
                        of the exemption amount, the standard deduction 
                        under section 63(c)(2)(C), and any additional 
                        standard deduction under section 63(c)(3) which 
                        would be applicable to the individual if clause 
                        (iii) applied.
                            ``(v) An individual who would be described 
                        in clause (iii) for the taxable year if--
                                    ``(I) the requirements of clause 
                                (iv) are met with respect to the 
                                individual, and
                                    ``(II) the requirements of 
                                subparagraph (B) are met with respect 
                                to the individual in lieu of the 
                                support test of section 152(a).
                    ``(B) Residency test.--The requirements of this 
                subparagraph are met if an individual has as his 
                principal place of abode the home of the taxpayer and--
                            ``(i) in the case of an individual who is 
                        an ancestor or descendant of the taxpayer or 
                        the taxpayer's spouse, is a member of the 
                        taxpayer's household for over half the taxable 
                        year, or
                            ``(ii) in the case of any other individual, 
                        is a member of the taxpayer's household for the 
                        entire taxable year.
                    ``(C) Special rules where more than 1 eligible 
                caregiver.--
                            ``(i) In general.--If more than 1 
                        individual is an eligible caregiver with 
                        respect to the same applicable individual for 
                        taxable years ending with or within the same 
                        calendar year, a taxpayer shall be treated as 
                        the eligible care giver if each such individual 
                        (other than the taxpayer) files a written 
                        declaration (in such form and manner as the 
                        Secretary may prescribe) that such individual 
                        will not claim such applicable individual for 
                        the credit under this section.
                            ``(ii) No agreement.--If each individual 
                        required under clause (i) to file a written 
                        declaration under clause (i) does not do so, 
                        the individual with the highest modified 
                        adjusted gross income (as defined in section 
                        32(c)(5)) shall be treated as the eligible 
                        caregiver.
                            ``(iii) Married individuals filing 
                        separately.--In the case of married individuals 
                        filing separately, the determination under this 
                        subparagraph as to whether the husband or wife 
                        is the eligible caregiver shall be made under 
                        the rules of clause (ii) (whether or not one of 
                        them has filed a written declaration under 
                        clause (i)).''.
    (c) Identification Requirements.--
            (1) In general.--Section 24(e) is amended by adding at the 
        end the following new sentence: ``No credit shall be allowed 
        under this section to a taxpayer with respect to any applicable 
        individual unless the taxpayer includes the name and taxpayer 
        identification number of such individual, and the 
        identification number of the physician certifying such 
        individual, on the return of tax for the taxable year.''.
            (2) Assessment.--Section 6213(g)(2)(I) is amended--
                    (A) by inserting ``or physician identification'' 
                after ``correct TIN'', and
                    (B) by striking ``child'' and inserting ``family 
                care''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.
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