[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2111 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 2111
To amend the Internal Revenue Code of 1986 to provide tax benefits for
small businesses, to amend the Fair Labor Standards Act of 1938 to
increase the minimum wage, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 7, 2001
Mr. Quinn introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax benefits for
small businesses, to amend the Fair Labor Standards Act of 1938 to
increase the minimum wage, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small Business Tax
Fairness Act of 2001''.
(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.--The table of contents of this Act is as
follows:
Sec. 1. Short title; references; table of contents.
TITLE I--SMALL BUSINESS PROVISIONS
Sec. 101. Deduction for 100 percent of health insurance costs of self-
employed individuals.
Sec. 102. Increase in expense treatment for small businesses.
Sec. 103. Increased deduction for meal expenses.
Sec. 104. Increased deductibility of business meal expenses for
individuals subject to Federal limitations
on hours of service.
Sec. 105. Income averaging for farmers and fishermen not to increase
alternative minimum tax liability.
Sec. 106. Repeal of occupational taxes relating to distilled spirits,
wine, and beer.
TITLE II--REAL ESTATE PROVISIONS
Subtitle A--Private Activity Bond Volume Cap
Sec. 201. Acceleration of phase-in of increase in volume cap on private
activity bonds.
Subtitle B--Exclusion From Gross Income for Certain Forgiven Mortgage
Obligations
Sec. 202. Exclusion from gross income for certain forgiven mortgage
obligations.
TITLE III--AMENDMENTS TO THE FAIR LABOR STANDARDS ACT OF 1938
Sec. 301. Short title.
Sec. 302. Minimum Wage.
TITLE I--SMALL BUSINESS PROVISIONS
SEC. 101. 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 and the taxpayer's spouse and dependents.''.
(b) Clarification of Limitations on Other Coverage.--The first
sentence of section 162(l)(2)(B) is amended to read as follows:
``Paragraph (1) shall not apply to any taxpayer for any calendar month
for which the taxpayer participates in any subsidized health plan
maintained by any employer (other than an employer described in section
401(c)(4)) of the taxpayer or the spouse of the taxpayer.''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 102. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.
(a) In General.--Paragraph (1) of section 179(b) (relating to
dollar limitation) is amended to read as follows:
``(1) Dollar limitation.--The aggregate cost which may be
taken into account under subsection (a) for any taxable year
shall not exceed $30,000.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2000.
SEC. 103. INCREASED DEDUCTION FOR MEAL EXPENSES.
(a) In General.--Paragraph (1) of section 274(n) (relating to only
50 percent of meal and entertainment expenses allowed as deduction) is
amended by striking ``50 percent'' in the text and inserting ``the
allowable percentage''.
(b) Allowable Percentages.--Subsection (n) of section 274 is
amended by redesignating paragraphs (2) and (3) as paragraphs (3) and
(4), respectively, and by inserting after paragraph (1) the following
new paragraph:
``(2) Allowable percentage.--For purposes of paragraph (1),
the allowable percentage is--
``(A) in the case of amounts for items described in
paragraph (1)(B), 50 percent, and
``(B) in the case of expenses for food or
beverages, 60 percent (55 percent for taxable years
beginning during 2001).''.
(c) Conforming Amendment.--The heading for subsection (n) of
section 274 is amended by striking ``50 Percent'' and inserting
``Limited Percentages''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 104. INCREASED DEDUCTIBILITY OF BUSINESS MEAL EXPENSES FOR
INDIVIDUALS SUBJECT TO FEDERAL LIMITATIONS ON HOURS OF
SERVICE.
(a) In General.--Paragraph (4) of section 274(n) (relating to
limited percentages of meal and entertainment expenses allowed as
deduction), as redesignated by section 103, is amended to read as
follows:
``(4) Special rule for individuals subject to federal hours
of service.--In the case of any expenses for food or beverages
consumed while away from home (within the meaning of
section 162(a)(2)) by an individual during, or incident to, the period
of duty subject to the hours of service limitations of the Department
of Transportation, paragraph (2)(B) shall be applied by substituting
`80 percent' for the percentage otherwise applicable under paragraph
(2)(B).''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 2000.
SEC. 105. INCOME AVERAGING FOR FARMERS AND FISHERMEN NOT TO INCREASE
ALTERNATIVE MINIMUM TAX LIABILITY.
(a) In General.--Section 55(c) (defining regular tax) is amended by
redesignating paragraph (2) as paragraph (3) and by inserting after
paragraph (1) the following:
``(2) Coordination with income averaging for farmers and
fishermen.--Solely for purposes of this section, section 1301
(relating to averaging of farm and fishing income) shall not
apply in computing the regular tax.''.
(b) Allowing Income Averaging for Fishermen.--
(1) In general.--Section 1301(a) is amended by striking
``farming business'' and inserting ``farming business or
fishing business,''.
(2) Definition of elected farm income.--
(A) In general.--Clause (i) of section
1301(b)(1)(A) is amended by inserting ``or fishing
business'' before the semicolon.
(B) Conforming amendment.--Subparagraph (B) of
section 1301(b)(1) is amended by inserting ``or fishing
business'' after ``farming business'' both places it
occurs.
(3) Definition of fishing business.--Section 1301(b) is
amended by adding at the end the following new paragraph:
``(4) Fishing business.--The term `fishing business' means
the conduct of commercial fishing as defined in section 3 of
the Magnuson-Stevens Fishery Conservation and Management Act
(16 U.S.C. 1802).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 106. REPEAL OF OCCUPATIONAL TAXES RELATING TO DISTILLED SPIRITS,
WINE, AND BEER.
(a) Repeal of Occupational Taxes.--
(1) In general.--The following provisions of part II of
subchapter A of chapter 51 of the Internal Revenue Code of 1986
(relating to occupational taxes) are hereby repealed:
(A) Subpart A (relating to proprietors of distilled
spirits plants, bonded wine cellars, etc.).
(B) Subpart B (relating to brewer).
(C) Subpart D (relating to wholesale dealers)
(other than sections 5114 and 5116).
(D) Subpart E (relating to retail dealers) (other
than section 5124).
(E) Subpart G (relating to general provisions)
(other than sections 5142, 5143, 5145, and 5146).
(2) Nonbeverage domestic drawback.--Section 5131 is amended
by striking ``, on payment of a special tax per annum,''.
(3) Industrial use of distilled spirits.--Section 5276 is
hereby repealed.
(b) Conforming Amendments.--
(1)(A) The heading for part II of subchapter A of chapter
51 and the table of subparts for such part are amended to read
as follows:
``PART II--MISCELLANEOUS PROVISIONS
``Subpart A. Manufacturers of stills.
``Subpart B. Nonbeverage domestic
drawback claimants.
``Subpart C. Recordkeeping by dealers.
``Subpart D. Other provisions.''.
(B) The table of parts for such subchapter A is amended by
striking the item relating to part II and inserting the
following new item:
``Part II. Miscellaneous provisions.''.
(2) Subpart C of part II of such subchapter (relating to
manufacturers of stills) is redesignated as subpart A.
(3)(A) Subpart F of such part II (relating to nonbeverage
domestic drawback claimants) is redesignated as subpart B and
sections 5131 through 5134 are redesignated as sections 5111
through 5114, respectively.
(B) The table of sections for such subpart B, as so
redesignated, is amended--
(i) by redesignating the items relating to sections
5131 through 5134 as relating to sections 5111 through
5114, respectively; and
(ii) by striking ``and rate of tax'' in the item
relating to section 5111, as so redesignated.
(C) Section 5111, as redesignated by subparagraph (A), is
amended--
(i) by striking ``and rate of tax'' in the section
heading;
(ii) by striking ``(a) Eligibility for Drawback.--
''; and
(iii) by striking subsection (b).
(4) Part II of subchapter A of chapter 51 is amended by
adding after subpart B, as redesignated by paragraph (3), the
following new subpart:
``Subpart C--Recordkeeping by Dealers
``Sec. 5121. Recordkeeping by wholesale
dealers.
``Sec. 5122. Recordkeeping by retail
dealers.
``Sec. 5123. Preservation and inspection
of records, and entry of
premises for inspection.''.
(5)(A) Section 5114 (relating to records) is moved to
subpart C of such part II and inserted after the table of
sections for such subpart.
(B) Section 5114 is amended--
(i) by striking the section heading and inserting
the following new heading:
``SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.'';
and
(ii) by redesignating subsection (c) as subsection
(d) and by inserting after subsection (b) the following
new subsection:
``(c) Wholesale Dealers.--For purposes of this part--
``(1) Wholesale dealer in liquors.--The term `wholesale
dealer in liquors' means any dealer (other than a wholesale
dealer in beer) who sells, or offers for sale, distilled
spirits, wines, or beer, to another dealer.
``(2) Wholesale dealer in beer.--The term `wholesale dealer
in beer' means any dealer who sells, or offers for sale, beer,
but not distilled spirits or wines, to another dealer.
``(3) Dealer.--The term `dealer' means any person who
sells, or offers for sale, any distilled spirits, wines, or
beer.
``(4) Presumption in case of sale of 20 wine gallons or
more.--The sale, or offer for sale, of distilled spirits,
wines, or beer, in quantities of 20 wine gallons or more to the
same person at the same time, shall be presumptive evidence
that the person making such sale, or offer for sale, is engaged
in or carrying on the business of a wholesale dealer in liquors
or a wholesale dealer in beer, as the case may be. Such
presumption may be overcome by evidence satisfactorily showing
that such sale, or offer for sale, was made to a person other
than a dealer.''.
(C) Paragraph (3) of section 5121(d), as so redesignated,
is amended by striking ``section 5146'' and inserting ``section
5123''.
(6)(A) Section 5124 (relating to records) is moved to
subpart C of part II of subchapter A of chapter 51 and inserted
after section 5121.
(B) Section 5124 is amended--
(i) by striking the section heading and inserting
the following new heading:
``SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.'';
(ii) by striking ``section 5146'' in subsection (c)
and inserting ``section 5123''; and
(iii) by redesignating subsection (c) as subsection
(d) and inserting after subsection (b) the following
new subsection:
``(c) Retail Dealers.--For purposes of this section--
``(1) Retail dealer in liquors.--The term `retail dealer in
liquors' means any dealer (other than a retail dealer in beer)
who sells, or offers for sale, distilled spirits, wines, or
beer, to any person other than a dealer.
``(2) Retail dealer in beer.--The term `retail dealer in
beer' means any dealer who sells, or offers for sale, beer, but
not distilled spirits or wines, to any person other than a
dealer.
``(3) Dealer.--The term `dealer' has the meaning given such
term by section 5121(c)(3).''.
(7) Section 5146 is moved to subpart C of part II of
subchapter A of chapter 51, inserted after section 5122, and
redesignated as section 5123.
(8) Part II of subchapter A of chapter 51 is amended by
inserting after subpart C the following new subpart:
``Subpart D--Other Provisions
``Sec. 5131. Packaging distilled spirits
for industrial uses.
``Sec. 5132. Prohibited purchases by
dealers.''.
(9) Section 5116 is moved to subpart D of part II of
subchapter A of chapter 51, inserted after the table of
sections, redesignated as section 5131, and amended by
inserting ``(as defined in section 5121(c))'' after ``dealer''
in subsection (a).
(10) Subpart D of part II of subchapter A of chapter 51 is
amended by adding at the end thereof the following new section:
``SEC. 5132. PROHIBITED PURCHASES BY DEALERS.
``(a) In General.--Except as provided in regulations prescribed by
the Secretary, it shall be unlawful for a dealer to purchase distilled
spirits from any person other than a wholesale dealer in liquors who is
required to keep the records prescribed by section 5121.
``(b) Penalty and Forfeiture.--
``For penalty and forfeiture provisions
applicable to violations of subsection (a), see sections 5687 and
7302.''.
(11) Subsection (b) of section 5002 is amended--
(A) by striking ``section 5112(a)'' and inserting
``section 5121(c)(3)'';
(B) by striking ``section 5112'' and inserting
``section 5121(c)''; and
(C) by striking ``section 5122'' and inserting
``section 5122(c)''.
(12) Subparagraph (A) of section 5010(c)(2) is amended by
striking ``section 5134'' and inserting ``section 5114''.
(13) Subsection (d) of section 5052 is amended to read as
follows:
``(d) Brewer.--For purposes of this chapter, the term `brewer'
means any person who brews beer or produces beer for sale. Such term
shall not include any person who produces only beer exempt from tax
under section 5053(e).''.
(14) The text of section 5182 is amended to read as
follows:
``For provisions requiring
recordkeeping by wholesale liquor dealers, see section 5112, and by
retail liquor dealers, see section 5122.''.
(15) Subsection (b) of section 5402 is amended by striking
``section 5092'' and inserting ``section 5052(d)''.
(16) Section 5671 is amended by striking ``or 5091''.
(17)(A) Part V of subchapter J of chapter 51 is hereby
repealed.
(B) The table of parts for such subchapter J is amended by
striking the item relating to part V.
(18)(A) Sections 5142, 5143, and 5145 are moved to
subchapter D of chapter 52, inserted after section 5731,
redesignated as sections 5732, 5733, and 5734, respectively,
and amended--
(i) by striking ``this part'' each place it appears
and inserting ``this subchapter''; and
(ii) by striking ``this subpart'' in section
5732(c)(2) (as so redesignated) and inserting ``this
subchapter''.
(B) Section 5732, as redesignated by subparagraph (A), is
amended by striking ``(except the tax imposed by section
5131)'' each place it appears.
(C) Subsection (c) of section 5733, as redesignated by
subparagraph (A), is amended by striking paragraph (2) and by
redesignating paragraph (3) as paragraph (2).
(D) The table of sections for subchapter D of chapter 52 is
amended by adding at the end thereof the following:
``Sec. 5732. Payment of tax.
``Sec. 5733. Provisions relating to
liability for occupational
taxes.
``Sec. 5734. Application of State
laws.''.
(E) Section 5731 is amended by striking subsection (c) and
by redesignating subsection (d) as subsection (c).
(19) Subsection (c) of section 6071 is amended by striking
``section 5142'' and inserting ``section 5732''.
(20) Paragraph (1) of section 7652(g) is amended--
(A) by striking ``subpart F'' and inserting
``subpart B''; and
(B) by striking ``section 5131(a)'' and inserting
``section 5111(a)''.
(21) The table of sections for subchapter D of chapter 51
is amended by striking the item relating to section 5276.
(c) Effective Date.--The amendments made by this section shall take
effect on July 1, 2001, but shall not apply to taxes imposed for
periods before such date.
TITLE II--REAL ESTATE PROVISIONS
Subtitle A--Private Activity Bond Volume Cap
SEC. 201. ACCELERATION OF PHASE-IN OF INCREASE IN VOLUME CAP ON PRIVATE
ACTIVITY BONDS.
(a) In General.--The table contained in section 146(d)(2) (relating
to per capita limit; aggregate limit) is amended to read as follows:
``Calendar Year Per Capita Limit Aggregate Limit
------------------------------------------------------------------------
2001....................... $55.00 $165,000,000
2002....................... 60.00 180,000,000
2003....................... 65.00 195,000,000
2004, 2005, and 2006....... 70.00 210,000,000
2007 and thereafter........ 75.00 225,000,000.''.
(b) Effective Date.--The amendment made by this section shall apply
to calendar years beginning after 2000.
Subtitle B--Exclusion From Gross Income for Certain Forgiven Mortgage
Obligations
SEC. 202. EXCLUSION FROM GROSS INCOME FOR CERTAIN FORGIVEN MORTGAGE
OBLIGATIONS.
(a) In General.--Paragraph (1) of section 108(a) (relating to
exclusion from gross income) is amended by striking ``or'' at the end
of both subparagraphs (A) and (C), by striking the period at the end of
subparagraph (D) and inserting ``, or'', and by inserting after
subparagraph (D) the following new subparagraph:
``(E) in the case of an individual, the
indebtedness discharged is qualified residential
indebtedness.''.
(b) Qualified Residential Indebtedness Shortfall.--Section 108
(relating to discharge of indebtedness) is amended by adding at the end
the following new subsection:
``(h) Qualified Residential Indebtedness.--
``(1) Limitations.--The amount excluded under subparagraph
(E) of subsection (a)(1) with respect to any qualified
residential indebtedness shall not exceed the excess (if any)
of--
``(A) the outstanding principal amount of such
indebtedness (immediately before the discharge), over
``(B) the sum of--
``(i) the amount realized from the sale of
the real property securing such indebtedness
reduced by the cost of such sale, and
``(ii) the outstanding principal amount of
any other indebtedness secured by such
property.
``(2) Qualified residential indebtedness.--
``(A) In general.--The term `qualified residential
indebtedness' means indebtedness which--
``(i) was incurred or assumed by the
taxpayer in connection with real property used
as the principal residence (within the meaning
of section 121) of the taxpayer and is secured
by such real property,
``(ii) is incurred or assumed to acquire,
construct, reconstruct, or substantially
improve such real property, and
``(iii) with respect to which such taxpayer
makes an election to have this paragraph apply.
``(B) Refinanced indebtedness.--Such term shall
include indebtedness resulting from the refinancing of
indebtedness under subparagraph (A)(ii), but only to
the extent the amount of the indebtedness resulting
from such refinancing does not exceed the amount of the
refinanced indebtedness.
``(C) Exceptions.--Such term shall not include
qualified farm indebtedness or qualified real property
business indebtedness.''.
(c) Conforming Amendments.--
(1) Paragraph (2) of section 108(a) is amended--
(A) in subparagraph (A) by striking ``and (D)'' and
inserting ``(D), and (E)''; and
(B) by amending subparagraph (B) to read as
follows:
``(B) Insolvency exclusion takes precedence over
qualified farm exclusion; qualified real property
business exclusion; and qualified residential shortfall
exclusion.--Subparagraphs (C), (D), and (E) of
paragraph (1) shall not apply to a discharge to the
extent the taxpayer is insolvent.''.
(2) Paragraph (1) of section 108(b) is amended by striking
``or (C)'' and inserting ``(C), or (E)''.
(3) Subsection (c) of section 121 of such Code is amended
by adding at the end the following new paragraph:
``(4) Special rule relating to discharge of indebtedness.--
The amount of gain which (but for this paragraph) would be
excluded from gross income under subsection (a) with respect to
a principal residence shall be reduced by the amount excluded
from gross income under section 108(a)(1)(E) with respect to
such residence.''.
(d) Effective Date.--The amendments made by this section shall
apply to discharges after December 31, 2000.
TITLE III--AMENDMENTS TO THE FAIR LABOR STANDARDS ACT OF 1938
SEC. 301. SHORT TITLE.
This title may be cited as the ``Minimum Wage Increase Act of
2001''.
SEC. 302. MINIMUM WAGE.
Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C.
206(a)(1)) is amended to read as follows:
``(1) except as otherwise provided in this section, not
less than--
``(A) $5.15 an hour beginning September 1, 1997,
``(B) $5.65 an hour beginning September 1, 2001,
and
``(C) $6.15 an hour beginning April 1, 2002;''.
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