[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4515 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 4515

To amend the Internal Revenue Code of 1986 to reduce the interest rate 
  on installment payments of the estate tax on closely held business 
                               interests.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 23, 2000

   Mr. Gonzalez (for himself, Ms. Velazquez, Mr. Rodriguez, and Mr. 
  Hinojosa) 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 reduce the interest rate 
  on installment payments of the estate tax on closely held business 
                               interests.

    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 ``Family Business Preservation Act of 
2000''.

SEC. 2. REDUCTION OF RATE OF INTEREST ON PORTION OF ESTATE TAX EXTENDED 
              UNDER SECTION 6166.

    (a) In General.--Subsection (j) of section 6601 of the Internal 
Revenue Code of 1986 (relating to 2-percent rate on certain portion of 
estate tax extended under section 6166) is amended to read as follows:
    ``(j) Reduced Rates on Certain Portions of Estate Tax Extended 
Under Section 6166.--
            ``(1) In general.--If the time for payment of an amount of 
        tax imposed by chapter 11 is extended as provided in section 
        6166, then in lieu of the annual rate provided by subsection 
        (a)--
                    ``(A) no interest shall be paid on the 0-percent 
                portion of such amount,
                    ``(B) interest on the 2-percent portion of such 
                amount shall be paid at the rate of 2 percent, and
                    ``(C) interest on so much of such amount as exceeds 
                the sum of the 0-percent portion and the 2-percent 
                portion shall be paid at a rate equal to 45 percent of 
                the annual rate provided by subsection (a).
        For purposes of this subsection, the amount of any deficiency 
        which is prorated to installments payable under section 6166 
        shall be treated as an amount of tax payable in installments 
        under such section.
            ``(2) 0-percent portion.--For purposes of this subsection, 
        the term `0-percent portion' means the lesser of--
                    ``(A)(i) the amount of the tentative tax which 
                would be determined under the rate schedule set forth 
                in section 2001(c) if the amount with respect to which 
                such tentative tax is to be computed were the sum of 
                $1,000,000 and the applicable exclusion amount in 
                effect under section 2010(c), reduced by
                    ``(ii) the applicable credit amount in effect under 
                section 2010(c), or
                    ``(B) the amount of the tax imposed by chapter 11 
                which is extended as provided in section 6166.
            ``(3) 2-percent portion.--For purposes of this subsection, 
        the term `2-percent portion' means the excess (if any) of--
                    ``(A) the lesser of--
                            ``(i)(I) the amount of the tentative tax 
                        which would be determined under the rate 
                        schedule set forth in section 2001(c) if the 
                        amount with respect to which such tentative tax 
                        is to be computed were the sum of $10,000,000 
                        and the applicable exclusion amount in effect 
                        under section 2010(c), reduced by
                            ``(II) the applicable credit amount in 
                        effect under section 2010(c), or
                            ``(ii) the amount of the tax imposed by 
                        chapter 11 which is extended as provided in 
                        section 6166, over
                    ``(B) the 0-percent portion.
            ``(4) Inflation adjustment.--In the case of estates of 
        decedents dying in a calendar year after 1998, the $1,000,000 
        amount contained in paragraph (2)(A) and the $10,000,000 amount 
        in paragraph (3)(A)(i) shall each be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting for `calendar year 1992' in subparagraph 
                (B) thereof--
                            ``(i) `calendar year 1997' in the case of 
                        the $1,000,000 amount, and
                            ``(ii) `calendar year 2000' in the case of 
                        the $10,000,000 amount.
        If any amount as adjusted under the preceding sentence is not a 
        multiple of $10,000, such amount shall be rounded to the next 
        lowest multiple of $10,000.
            ``(5) Treatment of payments.--If the amount of tax imposed 
        by chapter 11 which is extended as provided in section 6166 
        exceeds the amount described in paragraph (3)(A), any payment 
        of any portion of such amount shall, for purposes of computing 
        interest for periods after such payment, be treated as reducing 
        the 0-percent portion and the 2-percent portion, respectively, 
        by an amount which bears the same ratio to the amount of such 
        payment as the amount of the 0-percent portion and 2-percent 
        portion (determined without regard to this paragraph), 
        respectively, bears to the amount of the tax which is extended 
        as provided in section 6166.''
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after December 31, 2000.
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