[Congressional Record Volume 143, Number 151 (Monday, November 3, 1997)]
[Senate]
[Pages S11601-S11611]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        THE EDUCATION SAVINGS ACT FOR PUBLIC AND PRIVATE SCHOOLS

                                 ______
                                 

               McCONNELL (AND OTHERS) AMENDMENT NO. 1546

  (Ordered to lie on the table.)
  Mr. McCONNELL (for himself, Mr. Graham, Mr. Grassley, and Ms. 
Landrieu) submitted an amendment intended to be proposed by them to the 
bill (H.R. 2646) to amend the Internal Revenue Code of 1986 to allow 
tax-free expenditures from education individual retirement accounts for 
elementary and secondary school expenses, to increase the maximum 
annual amount of contributions to such accounts, and for other 
purposes; as follows:

       At the appropriate place in the bill, insert the following 
     new sections:

     SEC. ____. EXCLUSION FROM GROSS INCOME OF EDUCATION 
                   DISTRIBUTIONS FROM QUALIFIED STATE TUITION 
                   PROGRAMS.

       (a) Allowance of Exclusion.--
       (1) In general.--Subparagraph (B) of section 529(c)(3) of 
     the Internal Revenue Code of 1986 (relating to distributions) 
     is amended to read as follows:
       ``(B) Qualified higher education distributions.--In the 
     case of a qualified higher education distribution under 
     subsection (f)--
       ``(i) subparagraph (A) shall not apply, and
       ``(ii) no amount shall be includible in gross income with 
     respect to such distribution.''
       (2) Qualified higher education distribution defined.--
     Section 529 of such Code (relating to qualified State tuition 
     programs) is amended by adding at the end the following new 
     subsection:
       ``(f) Qualified Higher Education Distribution.--For 
     purposes of this section--
       ``(1) In general.--The term `qualified higher education 
     distribution' means any distribution (or portion thereof) 
     which constitutes a payment directly to an eligible 
     educational institution for qualified higher education 
     expenses of the designated beneficiary for enrollment or 
     attendance at such institution.
       ``(2) Room and board for students living off campus.--
       ``(A) In general.--The term `qualified higher education 
     distribution' includes distributions not described in 
     paragraph (1) to the extent that the amount of such 
     distributions for the taxable year does not exceed the amount 
     treated as qualified higher education expenses of the 
     designated beneficiary under subsection (e)(3)(B)(i)(II).
       ``(B) Restrictions.--Subparagraph (A) shall only apply with 
     respect to distributions for any academic period if--
       ``(i) distributions described in paragraph (1) are made for 
     such period for expenses other than room and board, and
       ``(ii) the designated beneficiary certifies to the 
     qualified State tuition program that the beneficiary resides 
     in a dwelling unit not operated or maintained by an eligible 
     educational institution.
       ``(3) Exclusion elective; limitation to one program.--
       ``(A) Election.--This subsection shall apply for a taxable 
     year only if the designated beneficiary elects its 
     application.
       ``(B) Limitation to one program.--This subsection shall 
     apply only to distributions from the qualified State tuition 
     program designated by the beneficiary in the first election 
     taking effect under subparagraph (A). Such designation, once 
     made, shall be irrevocable.
       ``(4) Aggregation.--All distributions from the qualified 
     State tuition program designated under paragraph (3)(B) shall 
     be treated as 1 distribution for purposes of this 
     subsection.''
       (3) Room and board.--Section 529(e)(3)(B) of such Code is 
     amended to read as follows:
       ``(B) Room and board included for students who are at least 
     half-time.--
       ``(i) In general.--In the case of a designated beneficiary 
     who is an eligible student (as defined in such section 
     25A(b)(3)) for any academic period, the term `qualified 
     higher education expenses' shall include--

       ``(I) amounts paid directly to an eligible educational 
     institution for room and board furnished to the beneficiary 
     during such academic period, or
       ``(II) if the beneficiary is not residing in a dwelling 
     unit operated or maintained by the eligible educational 
     institution, reasonable costs incurred by the beneficiary for 
     room and board during such academic period.

       ``(ii)  Limitations on off-campus room and board.--

       ``(I) Dollar limit.--The aggregate costs which may be taken 
     into account under clause (i)(II) for any taxable year shall 
     not exceed $4,500.
       ``(II) No more than 4 academic years taken into account.--
     Costs may be taken into account under clause (i)(II) only for 
     that number of academic periods as is equivalent to 4 
     academic years. Such number shall be reduced by the number of 
     academic periods for which amounts were previously taken into 
     account under clause (i)(I).''

       (b) Limit on Aggregate Contributions.--
       (1) In general.--Section 529(b)(7) of the Internal Revenue 
     Code of 1986 is amended to read as follows:
       ``(7) Aggregate limit on contributions.--A program shall 
     not be treated as a qualified State tuition program if it 
     allows aggregate contributions (including rollover 
     contributions) on behalf of a designated beneficiary to 
     exceed $35,200.''
       (2) Tax on excess contributions.--
       (A) In general.--Section 4973 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Excess Contributions to Qualified State Tuition 
     Programs.--
       ``(1) In general.--In the case of a designated beneficiary 
     under 1 or more qualified State tuition programs (as defined 
     in section 529(b)), the amount by which the contributions on 
     behalf of such beneficiary for such taxable year, when added 
     to the aggregate contributions on behalf of such beneficiary 
     for all preceding taxable years, exceeds the dollar limit in 
     effect under section 529(b)(7) for calendar year in which the 
     taxable year begins.
       ``(2) Special rules.--For purposes of paragraph (1), the 
     following contributions shall not be taken into account:
       ``(A) Any contribution which is distributed out of the 
     qualified State tuition program in a distribution to which 
     section 529(g)(2) applies.
       ``(B) Any rollover contribution.''
       (B) Conforming amendments.--Section 4973(a) is amended--
       (i) by striking ``or'' at the end of paragraph (3), by 
     inserting ``or'' at the end of paragraph (5), and by 
     inserting after paragraph (4) the following new paragraph:
       ``(5) a qualified State tuition program (as defined in 
     section 529),'',
       (ii) by striking ``accounts or annuities'' and inserting 
     ``accounts, annuities, or programs'', and
       (iii) by striking ``account or annuity'' and inserting 
     ``account, annuity, or program''.
       (c) Compliance Provisions.--
       (1) Additional tax on amounts not used for higher education 
     expenses.--
       (A) In general.--Section 529 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(g) Additional Tax for Distributions Not Used for 
     Educational Expenses.--
       ``(1) In general.--The tax imposed by section 530(d)(4) 
     shall apply to payments and distributions from qualified 
     State tuition programs in the same manner as such tax applies 
     to education individual retirement accounts.
       ``(2) Excess contributions returned before due date of 
     return.--Subparagraph (A) shall not apply to the distribution 
     to a contributor of any contribution paid during a taxable 
     year to a qualified tuition program to the extent that such 
     contribution exceeds the limitation in section 4973(g) if 
     such distribution (and the net income with respect to such 
     excess contribution) meet requirements comparable to the 
     requirements of section 530(d)(4)(C).''
       (B) Conforming amendment.--Section 529(b)(3) of such Code 
     is repealed.
       (2) Withholding of tax on certain distributions.--Section 
     529(c) is amended by adding at the end the following new 
     paragraph:
       ``(6) Withholding of tax on certain distributions.--
       ``(A) In general.--A qualified State tuition program shall 
     withhold from any distribution an amount equal to 15 percent 
     of the portion of such distribution properly allocable to 
     income on the contract (as determined under section 72).

[[Page S11602]]

       ``(B) Exceptions.--Subparagraph (A) shall not apply to a 
     distribution which--
       ``(i) is a qualified higher education distribution under 
     subsection (f), or
       ``(ii) is exempt from the payment of the additional tax 
     imposed by subsection (g).''
       (3) Distributions required in certain cases.--Subsection 
     (b) of section 529 of such Code is amended by adding at the 
     end the following new paragraph:
       ``(8) Required distributions.--
       ``(A) In general.--A program shall be treated as a 
     qualified State tuition program only if any balance to the 
     credit of a designated beneficiary (if any) on the account 
     termination date is required to be distributed within 30 days 
     after such date to such beneficiary (or in the case of death, 
     the estate of the beneficiary).
       ``(B) Account termination date.--For purposes of 
     subparagraph (A), the term `account termination date' means 
     whichever of the following dates is the earliest:
       ``(i) The date on which the designated beneficiary attains 
     age 30.
       ``(ii) The date on which the designated beneficiary dies.''
       (d) Cost-of-Living Adjustments.--Section 529(e) of the 
     Internal Revenue Code of 1986 is amended by adding at the end 
     the following new paragraph:
       ``(6) Cost-of-living adjustments.--In the case of calendar 
     years beginning after December 31, 1998, the $32,500 amount 
     under subsection (b)(7) and the $4,500 amount under 
     subsection (e)(3)(B)(ii)(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 the calendar year, determined by 
     substituting `1997' for `1992' in subparagraph (B) thereof.

     If any dollar amount is not a multiple of $100 after being 
     increased under this paragraph, such amount shall be rounded 
     to the next lowest multiple of $100.''
       (e) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to distributions 
     in taxable years beginning after December 31, 1997.
       (2) Contract requirements.--The amendments made by 
     subsections (b)(1) and (c)(3) shall apply to contracts issued 
     after December 31, 1997.

     SEC. ____. EXTENSION AND MODIFICATION OF SUBSIDIES FOR 
                   ALCOHOL FUELS.

       (a) Extension.--
       (1) The following provisions of the Internal Revenue Code 
     of 1986 are each amended by striking ``2000'' each place it 
     appears and inserting ``2007'':
       (A) Section 4041(b)(2)(C) (relating to termination).
       (B) Section 4041(k)(3) (relating to termination).
       (C) Section 4081(c)(8) (relating to termination).
       (D) Section 4091(c)(5) (relating to termination).
       (2) Section 4041(m)(1)(A) of such Code (relating to certain 
     alcohol fuels), as amended by section 907(b) of the Taxpayer 
     Relief Act of 1997, is amended by striking ``1999'' both 
     places it appears and inserting ``2005''.
       (3) Section 6427(f)(4) of such Code (relating to 
     termination) is amended by striking ``1999'' and inserting 
     ``2007''.
       (4) Section 40(e)(1) of such Code (relating to termination) 
     is amended--
       (A) by striking ``December 31, 2000'' and inserting 
     ``December 31, 2007'', and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) of any fuel for any period before January 1, 2008, 
     during which the rate of tax under section 4081(a)(2)(A) is 
     4.3 cents per gallon.''.
       (5) Headings 9901.00.50 and 9901.00.52 of the Harmonized 
     Tariff Schedule of the United States (19 U.S.C. 3007) are 
     amended in the effective period column by striking ``10/1/
     2000'' each place it appears and inserting ``10/1/2007''.
       (b) Modification.--
       (1) In general.--Subsection (h) of section 40 of the 
     Internal Revenue Code of 1986 (relating to alcohol used as 
     fuel) is amended to read as follows:
       ``(h) Reduced Credit for Ethanol Blenders.--
       ``(1) In general.--In the case of any alcohol mixture 
     credit or alcohol credit with respect to any sale or use of 
     alcohol which is ethanol during calendar years 2001 through 
     2007--
       ``(A) subsections (b)(1)(A) and (b)(2)(A) shall be applied 
     by substituting `the blender amount' for `60 cents',
       ``(B) subsection (b)(3) shall be applied by substituting 
     `the low-proof blender amount' for `45 cents' and `the 
     blender amount' for `60 cents', and
       ``(C) subparagraphs (A) and (B) of subsection (d)(3) shall 
     be applied by substituting `the blender amount' for `60 
     cents' and `the low-proof blender amount' for `45 cents'.
       ``(2) Amounts.--For purposes of paragraph (1), the blender 
     amount and the low-proof blender amount shall be determined 
     in accordance with the following table:


                                                                        
                                                         The low-proof  
  In the case of any sale or use   The blender amount    blender amount 
      during calendar year:                is:                is:       
                                                                        
2001 or 2002                          53 cents           39.26 cents    
2003 or 2004                          52 cents           38.52 cents    
2005, 2006, or 2007                   51 cents           37.78 cents.''.
                                                                        
                                                                        

       (2) Conforming amendments.--
       (A) Section 4041(b)(2) of such Code is amended--
       (i) in subparagraph (A)(i), by striking ``5.4 cents'' and 
     inserting ``the applicable blender rate'', and
       (ii) by redesignating subparagraph (C), as amended by 
     subsection (a)(2)(A), as subparagraph (D) and by inserting 
     after subparagraph (B) the following:
       ``(C) Applicable blender rate.--For purposes of 
     subparagraph (A)(i), the applicable blender rate is--
       ``(i) except as provided in clause (ii), 5.4 cents, and
       ``(ii) for sales or uses during calendar years 2001 through 
     2007, \1/10\ of the blender amount applicable under section 
     40(h)(2) for the calendar year in which the sale or use 
     occurs.''.
       (B) Subparagraph (A) of section 4081(c)(4) of such Code is 
     amended to read as follows:
       ``(A) General rules.--
       ``(i) Mixtures containing ethanol.--Except as provided in 
     clause (ii), in the case of a qualified alcohol mixture which 
     contains gasoline, the alcohol mixture rate is the excess of 
     the rate which would (but for this paragraph) be determined 
     under subsection (a) over--

       ``(I) in the case of 10 percent gasohol, the applicable 
     blender rate (as defined in section 4041(b)(2)(A)) per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, the number of 
     cents per gallon equal to 77 percent of such applicable 
     blender rate, and
       ``(III) in the case of 5.7 percent gasohol, the number of 
     cents per gallon equal to 57 percent of such applicable 
     blender rate.

       ``(ii) Mixtures not containing ethanol.--In the case of a 
     qualified alcohol mixture which contains gasoline and none of 
     the alcohol in which consists of ethanol, the alcohol mixture 
     rate is the excess of the rate which would (but for this 
     paragraph) be determined under subsection (a) over--

       ``(I) in the case of 10 percent gasohol, 6 cents per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, 4.62 cents per 
     gallon, and
       ``(III) in the case of 5.7 percent gasohol, 3.42 cents per 
     gallon.''.

       (C) Section 4081(c)(5) of such Code is amended by striking 
     ``5.4 cents'' and inserting ``the applicable blender rate (as 
     defined in section 4041(b)(2)(C))''.
       (D) Section 4091(c)(1) of such Code is amended by striking 
     ``13.4 cents'' each place it appears and inserting ``the 
     applicable blender amount'' and by adding at the end the 
     following new sentence: ``For purposes of this paragraph, the 
     term `applicable blender amount' means 13.3 cents in the case 
     of any sale or use during 2001 or 2002, 13.2 cents in the 
     case of any sale or use during 2003 or 2004, 13.1 cents in 
     the case of any sale or use during 2005, 2006, or 2007, and 
     13.4 cents in the case of any sale or use during 2008 or 
     thereafter.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2001.
                                 ______
                                 

            GRASSLEY (AND MOSELEY-BRAUN) AMENDMENT NO. 1547

  (Ordered to lie on the table.)
  Mr. GRASSLEY (for himself and Mrs. Moseley-Braun) submitted an 
amendment intended to be proposed by them to the bill, H.R. 2646, 
supra; as follows:

       At the appropriate place in the bill, insert the following 
     new section:

     SEC. ____. EXTENSION AND MODIFICATION OF SUBSIDIES FOR 
                   ALCOHOL FUELS.

       (a) Extension.--
       (1) The following provisions of the Internal Revenue Code 
     of 1986 are each amended by striking ``2000'' each place it 
     appears and inserting ``2007'':
       (A) Section 4041(b)(2)(C) (relating to termination).
       (B) Section 4041(k)(3) (relating to termination).
       (C) Section 4081(c)(8) (relating to termination).
       (D) Section 4091(c)(5) (relating to termination).
       (2) Section 4041(m)(1)(A) of such Code (relating to certain 
     alcohol fuels), as amended by section 907(b) of the Taxpayer 
     Relief Act of 1997, is amended by striking ``1999'' both 
     places it appears and inserting ``2005''.
       (3) Section 6427(f)(4) of such Code (relating to 
     termination) is amended by striking ``1999'' and inserting 
     ``2007''.
       (4) Section 40(e)(1) of such Code (relating to termination) 
     is amended--
       (A) by striking ``December 31, 2000'' and inserting 
     ``December 31, 2007'', and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) of any fuel for any period before January 1, 2008, 
     during which the rate of tax under section 4081(a)(2)(A) is 
     4.3 cents per gallon.''.
       (5) Headings 9901.00.50 and 9901.00.52 of the Harmonized 
     Tariff Schedule of the United States (19 U.S.C. 3007) are 
     amended in the effective period column by striking ``10/1/
     2000'' each place it appears and inserting ``10/1/2007''.
       (b) Modification.--
       (1) In general.--Subsection (h) of section 40 of the 
     Internal Revenue Code of 1986 (relating to alcohol used as 
     fuel) is amended to read as follows:
       ``(h) Reduced Credit for Ethanol Blenders.--
       ``(1) In general.--In the case of any alcohol mixture 
     credit or alcohol credit with respect to any sale or use of 
     alcohol which is ethanol during calendar years 2001 through 
     2007--

[[Page S11603]]

       ``(A) subsections (b)(1)(A) and (b)(2)(A) shall be applied 
     by substituting `the blender amount' for `60 cents',
       ``(B) subsection (b)(3) shall be applied by substituting 
     `the low-proof blender amount' for `45 cents' and `the 
     blender amount' for `60 cents', and
       ``(C) subparagraphs (A) and (B) of subsection (d)(3) shall 
     be applied by substituting `the blender amount' for `60 
     cents' and `the low-proof blender amount' for `45 cents'.
       ``(2) Amounts.--For purposes of paragraph (1), the blender 
     amount and the low-proof blender amount shall be determined 
     in accordance with the following table:


                                                                        
  In the case of any sale or use   The blender    The low-proof blender 
      during calendar year:         amount is:         amount is:       
                                                                        
2001 or 2002                          53 cents    39.26 cents           
2003 or 2004                          52 cents    38.52 cents           
2005, 2006, or 2007..............     51 cents    37.78 cents.''.       
                                                                        
                                                                        

       (2) Conforming amendments.--
       (A) Section 4041(b)(2) of such Code is amended--
       (i) in subparagraph (A)(i), by striking ``5.4 cents'' and 
     inserting ``the applicable blender rate'', and
       (ii) by redesignating subparagraph (C), as amended by 
     subsection (a)(2)(A), as subparagraph (D) and by inserting 
     after subparagraph (B) the following:
       ``(C) Applicable blender rate.--For purposes of 
     subparagraph (A)(i), the applicable blender rate is--
       ``(i) except as provided in clause (ii), 5.4 cents, and
       ``(ii) for sales or uses during calendar years 2001 through 
     2007, \1/10\ of the blender amount applicable under section 
     40(h)(2) for the calendar year in which the sale or use 
     occurs.''.
       (B) Subparagraph (A) of section 4081(c)(4) of such Code is 
     amended to read as follows:
       ``(A) General rules.--
       ``(i) Mixtures containing ethanol.--Except as provided in 
     clause (ii), in the case of a qualified alcohol mixture which 
     contains gasoline, the alcohol mixture rate is the excess of 
     the rate which would (but for this paragraph) be determined 
     under subsection (a) over--

       ``(I) in the case of 10 percent gasohol, the applicable 
     blender rate (as defined in section 4041(b)(2)(A)) per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, the number of 
     cents per gallon equal to 77 percent of such applicable 
     blender rate, and
       ``(III) in the case of 5.7 percent gasohol, the number of 
     cents per gallon equal to 57 percent of such applicable 
     blender rate.

       ``(ii) Mixtures not containing ethanol.--In the case of a 
     qualified alcohol mixture which contains gasoline and none of 
     the alcohol in which consists of ethanol, the alcohol mixture 
     rate is the excess of the rate which would (but for this 
     paragraph) be determined under subsection (a) over--

       ``(I) in the case of 10 percent gasohol, 6 cents per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, 4.62 cents per 
     gallon, and
       ``(III) in the case of 5.7 percent gasohol, 3.42 cents per 
     gallon.''.

       (C) Section 4081(c)(5) of such Code is amended by striking 
     ``5.4 cents'' and inserting ``the applicable blender rate (as 
     defined in section 4041(b)(2)(C))''.
       (D) Section 4091(c)(1) of such Code is amended by striking 
     ``13.4 cents'' each place it appears and inserting ``the 
     applicable blender amount'' and by adding at the end the 
     following new sentence: ``For purposes of this paragraph, the 
     term `applicable blender amount' means 13.3 cents in the case 
     of any sale or use during 2001 or 2002, 13.2 cents in the 
     case of any sale or use during 2003 or 2004, 13.1 cents in 
     the case of any sale or use during 2005, 2006, or 2007, and 
     13.4 cents in the case of any sale or use during 2008 or 
     thereafter.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2001.
                                 ______
                                 

                  FEINSTEIN AMENDMENTS NOS. 1548-1549

  (Ordered to lie on the table.)
  Mrs. FEINSTEIN submitted two amendments intended to be proposed by 
her to the bill, H.R. 2646, supra; as follows:

                           Amendment No. 1548

       At the end add the following:

     SEC. ____. ESTABLISHMENT OF CANCER RESEARCH TRUST FUND.

       (a) In General.--Part A of title IV of the Public Health 
     Service Act (42 U.S.C. 281 et seq.) is amended by adding at 
     the end the following new section:

     ``SEC. 404F. ESTABLISHMENT OF CANCER RESEARCH TRUST FUND.

       ``(a) Establishment.--There is established in the Treasury 
     of the United States a trust fund, to be known as the `Cancer 
     Research Trust Fund' (hereafter in this section referred to 
     as the `Fund'), consisting of such amounts as are credited or 
     paid to the Fund as provided for in section 6098 of the 
     Internal Revenue Code of 1986 and any interest earned on 
     investment of amounts in the Fund.
       ``(b) Investment of Trust Fund.--
       ``(1) In general.--It shall be the duty of the Secretary of 
     the Treasury to invest such portion of the Fund as is not, in 
     the Secretary's judgment, required to meet current 
     withdrawals. Such investments may be made only in interest-
     bearing obligations of the United States or in obligations 
     guaranteed as to both principal and interest by the United 
     States. For such purpose, such obligations may be acquired--
       ``(A) on original issue at the issue price, or
       ``(B) by purchase of outstanding obligations at the market 
     price.

     The purposes for which obligations of the United States may 
     be issued under chapter 31 of title 31, of the United States 
     Code, are hereby extended to authorize the issuance at par of 
     special obligations exclusively to the Fund. Such special 
     obligations shall bear interest at a rate equal to the 
     average rate of interest, computed as to the end of the 
     calendar month next preceding the date of such issue, borne 
     by all marketable interest-bearing obligations of the United 
     States then forming a part of the Public Debt; except that 
     where such average rate is not a multiple of one-eighth of 1 
     percent, the rate of interest of such special obligations 
     shall be the multiple of one-eighth of 1 percent next lower 
     than such average rate. Such special obligations shall be 
     issued only if the Secretary of the Treasury determines that 
     the purchase of other interest-bearing obligations of the 
     United States, or of obligations guaranteed as to both 
     principal and interest by the United States on original issue 
     or at the market price, is not in the public interest.
       ``(2) Sale of obligation.--Any obligation acquired by the 
     Fund (except special obligations issued exclusively to the 
     Fund) may be sold by the Secretary of the Treasury at the 
     market price, and such special obligations may be redeemed at 
     par plus accrued interest.
       ``(3) Credits to trust fund.--The interest on, and the 
     proceeds from the sale or redemption of, any obligations held 
     in the Fund shall be credited to and form a part of the Fund.
       ``(c)  Obligations From Fund.--
       ``(1) In general.--The Secretary of Health and Human 
     Services shall annually make available such sums as are 
     available in the Fund (including any amounts not obligated in 
     previous fiscal years) to the National Institutes of Health 
     for the conduct of biomedical, intramural and extramural 
     research.
       ``(2) Director of nih.--The Director of the National 
     Institutes of Health may distribute amounts made available 
     under paragraph (1) among the various research institutes and 
     centers of the National Institutes of Health to enable such 
     institutes and centers to conduct research that the Director 
     determines is appropriate. The Director shall make awards 
     from amounts available under paragraph (1) for research on 
     cancer.
       ``(d) Supplement Not Supplant.--Amounts provided to an 
     institute or center under subsection (c) shall be used to 
     supplement and not supplant other research conducted with 
     Federal funds.
       ``(e) Limitation.--No expenditure shall be made under 
     subsection (c)(1) during any fiscal year in which the annual 
     amount appropriated for the National Institutes of Health is 
     less than the amount so appropriated for the prior fiscal 
     year.''.
       (b) Designation of Overpayments and Contributions to Trust 
     Fund.--
       (1) In general.--Subchapter A of chapter 61 of the Internal 
     Revenue Code of 1986 (relating to information and returns) is 
     amended by adding at the end the following new part:

  ``PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS TO CANCER 
                          RESEARCH TRUST FUND

``Sec. 6098. Designation to Cancer Research Trust Fund.

     ``SEC. 6098. DESIGNATION TO CANCER RESEARCH TRUST FUND.

       ``(a) In General.--Every individual (other than a 
     nonresident alien) may--
       ``(1) designate that a portion (not less than $1) of any 
     overpayment of the tax imposed by chapter 1 for the taxable 
     year, and
       ``(2) provide that a cash contribution (not less than $1),

     be paid over to the Cancer Research Trust Fund in accordance 
     with the provisions of section 404F of the Public Health 
     Service Act. In the case of a joint return of a husband and 
     wife, each spouse may designate one-half of any such 
     overpayment of tax (not less than $2).
       ``(b) Manner and Time of Designation.--Any designation or 
     payment under subsection (a) may be made with respect to any 
     taxable year only at the time of filing the original return 
     of the tax imposed by chapter 1 for such taxable year. Such 
     designation shall be made on the page bearing the taxpayer's 
     signature, and in close proximity to such signature, and 
     shall be labeled `Cancer Research Fund'.
       ``(c) Overpayments Treated as Refunded.--For purposes of 
     this section, any overpayment of tax designated under 
     subsection (a) shall be treated as being refunded to the 
     taxpayer as of the last day prescribed for filing the return 
     of tax imposed by chapter 1 (determined with regard to 
     extensions) or, if later, the date the return is filed.''
       (2) Clerical amendment.--The table of parts for subchapter 
     A of chapter 61 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new item:

``Part IX. Designation of overpayments and contributions to Cancer 
              Research Trust Fund.''.


[[Page S11604]]


       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1996.
                                                                    ____


                           Amendment No. 1549

       At the end add the following:

     SEC. ____. ESTABLISHMENT OF CANCER RESEARCH TRUST FUND.

       (a) In General.--Part A of title IV of the Public Health 
     Service Act (42 U.S.C. 281 et seq.) is amended by adding at 
     the end the following new section:

     ``SEC. 404F. ESTABLISHMENT OF CANCER RESEARCH TRUST FUND.

       ``(a) Establishment.--There is established in the Treasury 
     of the United States a trust fund, to be known as the `Cancer 
     Research Trust Fund' (hereafter in this section referred to 
     as the `Fund'), consisting of such amounts as are credited or 
     paid to the Fund as provided for in section 6098 of the 
     Internal Revenue Code of 1986 and any interest earned on 
     investment of amounts in the Fund.
       ``(b) Investment of Trust Fund.--
       ``(1) In general.--It shall be the duty of the Secretary of 
     the Treasury to invest such portion of the Fund as is not, in 
     the Secretary's judgment, required to meet current 
     withdrawals. Such investments may be made only in interest-
     bearing obligations of the United States or in obligations 
     guaranteed as to both principal and interest by the United 
     States. For such purpose, such obligations may be acquired--
       ``(A) on original issue at the issue price, or
       ``(B) by purchase of outstanding obligations at the market 
     price.

     The purposes for which obligations of the United States may 
     be issued under chapter 31 of title 31, of the United States 
     Code, are hereby extended to authorize the issuance at par of 
     special obligations exclusively to the Fund. Such special 
     obligations shall bear interest at a rate equal to the 
     average rate of interest, computed as to the end of the 
     calendar month next preceding the date of such issue, borne 
     by all marketable interest-bearing obligations of the United 
     States then forming a part of the Public Debt; except that 
     where such average rate is not a multiple of one-eighth of 1 
     percent, the rate of interest of such special obligations 
     shall be the multiple of one-eighth of 1 percent next lower 
     than such average rate. Such special obligations shall be 
     issued only if the Secretary of the Treasury determines that 
     the purchase of other interest-bearing obligations of the 
     United States, or of obligations guaranteed as to both 
     principal and interest by the United States on original issue 
     or at the market price, is not in the public interest.
       ``(2) Sale of obligation.--Any obligation acquired by the 
     Fund (except special obligations issued exclusively to the 
     Fund) may be sold by the Secretary of the Treasury at the 
     market price, and such special obligations may be redeemed at 
     par plus accrued interest.
       ``(3) Credits to trust fund.--The interest on, and the 
     proceeds from the sale or redemption of, any obligations held 
     in the Fund shall be credited to and form a part of the Fund.
       ``(c)  Obligations From Fund.--
       ``(1) In general.--The Secretary of Health and Human 
     Services shall annually make available such sums as are 
     available in the Fund (including any amounts not obligated in 
     previous fiscal years) to the National Institutes of Health 
     for the conduct of biomedical, intramural and extramural 
     research.
       ``(2) Director of nih.--The Director of the National 
     Institutes of Health may distribute amounts made available 
     under paragraph (1) among the various research institutes and 
     centers of the National Institutes of Health to enable such 
     institutes and centers to conduct research that the Director 
     determines is appropriate. The Director shall make awards 
     from amounts available under paragraph (1) for research on 
     cancer.
       ``(d) Supplement Not Supplant.--Amounts provided to an 
     institute or center under subsection (c) shall be used to 
     supplement and not supplant other research conducted with 
     Federal funds.
       ``(e) Limitation.--No expenditure shall be made under 
     subsection (c)(1) during any fiscal year in which the annual 
     amount appropriated for the National Institutes of Health is 
     less than the amount so appropriated for the prior fiscal 
     year.''.
       (b) Designation of Overpayments and Contributions to Trust 
     Fund.--
       (1) In general.--Subchapter A of chapter 61 of the Internal 
     Revenue Code of 1986 (relating to information and returns) is 
     amended by adding at the end the following new part:

  ``PART IX--DESIGNATION OF OVERPAYMENTS AND CONTRIBUTIONS TO CANCER 
                          RESEARCH TRUST FUND

``Sec. 6098. Designation to Cancer Research Trust Fund.

     ``SEC. 6098. DESIGNATION TO CANCER RESEARCH TRUST FUND.

       ``(a) In General.--Every individual (other than a 
     nonresident alien) may--
       ``(1) designate that a portion (not less than $1) of any 
     overpayment of the tax imposed by chapter 1 for the taxable 
     year, and
       ``(2) provide that a cash contribution (not less than $1),

     be paid over to the Cancer Research Trust Fund in accordance 
     with the provisions of section 404F of the Public Health 
     Service Act. In the case of a joint return of a husband and 
     wife, each spouse may designate one-half of any such 
     overpayment of tax (not less than $2).
       ``(b) Manner and Time of Designation.--Any designation or 
     payment under subsection (a) may be made with respect to any 
     taxable year only at the time of filing the original return 
     of the tax imposed by chapter 1 for such taxable year. Such 
     designation shall be made on the page bearing the taxpayer's 
     signature, and in close proximity to such signature, and 
     shall be labeled `Cancer Research Fund'.
       ``(c) Overpayments Treated as Refunded.--For purposes of 
     this section, any overpayment of tax designated under 
     subsection (a) shall be treated as being refunded to the 
     taxpayer as of the last day prescribed for filing the return 
     of tax imposed by chapter 1 (determined with regard to 
     extensions) or, if later, the date the return is filed.''.
       (2) Clerical amendment.--The table of parts for subchapter 
     A of chapter 61 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new item:

``Part IX. Designation of overpayments and contributions to Cancer 
              Research Trust Fund.''.

       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1996.
       (c) Reciprocal Offset Program.--
       (1) Establishment.--The Secretary of the Treasury shall 
     enter into an agreement with any State under which--
       (A) the State agrees, upon notice by the Secretary of the 
     Treasury of any person having a liability in respect of an 
     internal revenue tax, to reduce any overpayment of State tax 
     to be refunded to such person to the extent of the amount of 
     such liability and pay the amount by which the overpayment is 
     so reduced to the United States Treasury and to notify such 
     person of such payment, and
       (B) the Secretary of the Treasury agrees to comply with the 
     requirements of section 6402(e) of the Internal Revenue Code 
     of 1986.
       (2) Disclosure of return information to states.--Section 
     6103(d) of the Internal Revenue Code of 1986 (relating to 
     disclosure to State tax officials and State and local law 
     enforcement agencies) is amended by adding at the end the 
     following new paragraph:
       ``(6) Disclosure for reciprocal offset program 
     agreements.--The Secretary shall disclose return information 
     for purposes of an agreement under the reciprocal offset 
     program established under section ____(c)(1) of the Education 
     Savings Act for Public and Private Schools.''.
       (3) Offset of past-due, legally enforceable state tax 
     obligations against overpayments.--
       (A) In general.--Section 6402 of the Internal Revenue Code 
     of 1986 (relating to authority to make credits or refunds) is 
     amended by redesignating subsections (e) through (i) as 
     subsections (f) through (j), respectively, and by inserting 
     after subsection (d) the following new subsection:
       ``(e) Collection of Past-Due, Legally Enforceable State Tax 
     Obligations.--
       ``(1) In general.--Upon receiving notice from any State 
     that has entered into an agreement with the Secretary under 
     section ____(c)(1) of the Education Savings Act for Public 
     and Private Schools that a named person owes a past-due, 
     legally enforceable State tax obligation to such State, the 
     Secretary shall, under such conditions as may be prescribed 
     by the Secretary--
       ``(A) reduce the amount of any overpayment payable to such 
     person by the amount of such State tax obligation;
       ``(B) pay the amount by which such overpayment is reduced 
     under subparagraph (A) to such State and notify such State of 
     such person's name, taxpayer identification number, address, 
     and the amount collected; and
       ``(C) notify the person making such overpayment that the 
     overpayment has been reduced by an amount necessary to 
     satisfy a past-due, legally enforceable State tax obligation.

     If an offset is made pursuant to a joint return, the notice 
     under subparagraph (B) shall include the names, taxpayer 
     identification numbers, and addresses of each person filing 
     such return.
       ``(2) Priorities for offset.--Any overpayment by a person 
     shall be reduced pursuant to this subsection--
       ``(A) after such overpayment is reduced pursuant to--
       ``(i) subsection (a) with respect to any liability for any 
     internal revenue tax on the part of the person who made the 
     overpayment,
       ``(ii) subsection (c) with respect to past-due support, and
       ``(iii) subsection (d) with respect to any past-due, 
     legally enforceable debt owed to a Federal agency, and
       ``(B) before such overpayment is credited to the future 
     liability for any Federal internal revenue tax of such person 
     pursuant to subsection (b).

     If the Secretary receives notice from 1 or more State 
     agencies of more than 1 debt subject to paragraph (1) that is 
     owed by such person to such an agency, any overpayment by 
     such person shall be applied against such debts in the order 
     in which such debts accrued.
       ``(3) Notice; consideration of evidence.--No State may take 
     action under this subsection until such State--
       ``(A) notifies the person owing the past-due State tax 
     liability that the State proposes to take action pursuant to 
     this section,

[[Page S11605]]

       ``(B) gives such person at least 60 days to present 
     evidence that all or part of such liability is not past-due 
     or not legally enforceable,
       ``(C) considers any evidence presented by such person and 
     determines that an amount of such debt is past-due and 
     legally enforceable, and
       ``(D) satisfies such other conditions as the Secretary may 
     prescribe to ensure that the determination made under 
     subparagraph (C) is valid and that the State has made 
     reasonable efforts to obtain payment of such State tax 
     obligation.
       ``(4) Past-due, legally enforceable state tax obligation.--
     For purposes of this subsection, the term `past-due, legally 
     enforceable State tax obligation' means a debt--
       ``(A)(i) which resulted from--
       ``(I) a judgment rendered by a court of competent 
     jurisdiction which has determined an amount of State tax to 
     be due, or
       ``(II) a determination after an administrative hearing 
     which has determined an amount of State tax to be due, and
       ``(ii) which is no longer subject to judicial review, or
       ``(B) which resulted from a State tax which has been 
     assessed but not collected, the time for redetermination of 
     which has expired, and which has not been delinquent for more 
     than 10 years.

     For purposes of this paragraph, the term `State tax' includes 
     any local tax administered by the chief tax administration 
     agency of the State.
       ``(5) Regulations.--The Secretary shall issue regulations 
     prescribing the time and manner in which States must submit 
     notices of past-due, legally enforceable State tax 
     obligations and the necessary information that must be 
     contained in or accompany such notices. The regulations shall 
     specify the types of State taxes and the minimum amount of 
     debt to which the reduction procedure established by 
     paragraph (1) may be applied. The regulations may require 
     States to pay a fee to reimburse the Secretary for the cost 
     of applying such procedure. Any fee paid to the Secretary 
     pursuant to the preceding sentence shall be used to reimburse 
     appropriations which bore all or part of the cost of applying 
     such procedure.
       ``(6) Erroneous payment to state.--Any State receiving 
     notice from the Secretary that an erroneous payment has been 
     made to such State under paragraph (1) shall pay promptly to 
     the Secretary, in accordance with such regulations as the 
     Secretary may prescribe, an amount equal to the amount of 
     such erroneous payment (without regard to whether any other 
     amounts payable to such State under such paragraph have been 
     paid to such State).''.
       (B) Disclosure of certain information to states requesting 
     refund offsets for past-due, legally enforceable state tax 
     obligations.--
       (i) Paragraph (10) of section 6103(l) of such Code is 
     amended by striking ``(c) or (d)'' each place it appears and 
     inserting ``(c), (d), or (e)''.
       (ii) The paragraph heading for such paragraph (10) is 
     amended by striking ``section 6402(c) or 6402(d)'' and 
     inserting ``subsection (c), (d), or (e) of section 6402''.
       (C) Conforming amendments.--
       (i) Subsection (a) of section 6402 of such Code is amended 
     by striking ``(c) and (d)'' and inserting ``(c), (d), and 
     (e)''.
       (ii) Paragraph (2) of section 6402(d) of such Code is 
     amended by striking ``and before such overpayment'' and 
     inserting ``and before such overpayment is reduced pursuant 
     to subsection (e) and before such overpayment''.
       (iii) Subsection (f) of section 6402 of such Code, as 
     redesignated by subparagraph (A), is amended--

       (I) by striking ``(c) or (d)'' and inserting ``(c), (d), or 
     (e)'', and
       (II) by striking ``Federal agency'' and inserting ``Federal 
     agency or State''.

       (iv) Subsection (h) of section 6402 of such Code, as 
     redesignated by subparagraph (A), is amended by striking 
     ``subsection (c)'' and inserting ``subsection (c) or (e)''.
       (D) Amendments Applied After Technical Corrections to 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996.--
       (i) Section 110(l) of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 is amended by striking 
     paragraphs (4), (5), and (7) (and the amendments made by such 
     paragraphs), and the Internal Revenue Code of 1986 shall be 
     applied as if such paragraphs (and amendments) had never been 
     enacted.
       (ii) For purposes of applying the amendments made by this 
     paragraph other than this subparagraph the provisions of this 
     subparagraph shall be treated as having been enacted 
     immediately before the other provisions of this paragraph.
       (E) Effective Date.--The amendments made by this subsection 
     (other than paragraph (3)(D)) shall apply to refunds payable 
     after December 31, 1998.
                                 ______
                                 

                       GRAHAM AMENDMENT NO. 1550

  (Ordered to lie on the table.)
  Mr. GRAHAM submitted an amendment intended to be proposed by him to 
the bill, H.R. 2646, supra; as follows:

       On page 3, between lines 9 and 10, insert:
       ``(C) Dependent care employment-related expenses.--Such 
     term shall include employment-related expenses (as defined in 
     section 21(b)(2)) for the care of a designated beneficiary 
     who is a qualifying individual under section 21(b)(1)(A) with 
     respect to the individual incurring such expenses. No credit 
     shall be allowed under section 21 with respect to employment-
     related expenses paid out of the account to the extent such 
     payment is not included in gross income by reason of 
     subsection (d)(2).''
                                 ______
                                 

                        KOHL AMENDMENT NO. 1551

  (Ordered to lie on the table.)
  Mr. KOHL submitted an amendment intended to be proposed by him to the 
bill, H.R. 2646, supra; as follows:

       At the appropriate place in the bill, insert the following:

     SEC. ____. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR 
                   CHILD CARE ASSISTANCE; FOREIGN TAX CREDIT 
                   CARRYOVERS.

       (a) Allowance of Credit.--
       (1) In general.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits) is amended by adding at the end the 
     following new section:

     ``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to 50 percent 
     of the qualified child care expenditures of the taxpayer for 
     such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--The term 
     `qualified child care expenditure' means any amount paid or 
     incurred--
       ``(A) to acquire, construct, rehabilitate, or expand 
     property--
       ``(i) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(ii) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(iii) which does not constitute part of the principal 
     residence (within the meaning of section 1034) of the 
     taxpayer or any employee of the taxpayer,
       ``(B) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training,
       ``(C) under a contract with a qualified child care facility 
     to provide child care services to employees of the taxpayer, 
     or
       ``(D) under a contract to provide child care resource and 
     referral services to employees of the taxpayer.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including, but not limited to, the licensing of 
     the facility as a child care facility.

     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 1034) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) the facility is not the principal trade or business 
     of the taxpayer unless at least 30 percent of the enrollees 
     of such facility are dependents of employees of the taxpayer, 
     and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3......................................................100 
    Year 4..........................................................85 
    Year 5..........................................................70 
    Year 6..........................................................55 
    Year 7..........................................................40 
    Year 8..........................................................25 
    Years 9 and 10..................................................10 
    Years 11 and thereafter..........................................0.

       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the

[[Page S11606]]

     taxable year in which the qualified child care facility is 
     placed in service by the taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If during any taxable year 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.
       ``(g) Termination.--This section shall not apply to taxable 
     years beginning after December 31, 1999.''
       (2) Conforming amendments.--
       (A) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended--
       (i) by striking out ``plus'' at the end of paragraph (11),
       (ii) by striking out the period at the end of paragraph 
     (12), and inserting a comma and ``plus'', and
       (iii) by adding at the end the following new paragraph:
       ``(13) the employer-provided child care credit determined 
     under section 45D.''
       (B) 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-provided child care credit.''

       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1996.
       (b) Modification to Foreign Tax Credit Carryback and 
     Carryover Periods.--
       (1) In general.--Subsection (c) of section 904 of the 
     Internal Revenue Code of 1986 (relating to limitation on 
     credit) is amended--
       (A) by striking ``in the second preceding taxable year,'', 
     and
       (B) by striking ``or fifth'' and inserting ``fifth, sixth, 
     or seventh''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to credits arising in taxable years beginning 
     after December 31, 1997.
                                 ______
                                 

                  WELLSTONE AMENDMENTS NOS. 1552-1553

  (Ordered to lie on the table.)
  Mr. WELLSTONE submitted two amendments intended to be proposed by him 
to the bill, H.R. 2646, supra; as follows:

                           Amendment No. 1552

       At the appropriate place, insert the following:

     SEC. ____. ALLOCATION OF ALCOHOL FUELS CREDIT TO PATRONS OF A 
                   COOPERATIVE.

       (a) Allocation.--
       (1) In general.--Subsection (d) of section 40 of the 
     Internal Revenue Code of 1986 (relating to alcohol used as 
     fuel) is amended by adding at the end the following new 
     paragraph:
       ``(6) Allocation of small ethanol producer credit to 
     patrons of cooperative.--
       ``(A) In general.--In the case of a cooperative 
     organization described in section 1381(a), any portion of the 
     credit determined under subsection (a)(3) for the taxable 
     year may, at the election of the organization made on a 
     timely filed return (including extensions) for such year, be 
     apportioned pro rata among patrons on the basis of the 
     quantity or value of business done with or for such patrons 
     for the taxable year. Such an election, once made, shall be 
     irrevocable for such taxable year.
       ``(B) Treatment of organizations and patrons.--The amount 
     of the credit apportioned to patrons pursuant to subparagraph 
     (A)--
       ``(i) shall not be included in the amount determined under 
     subsection (a) for the taxable year of the organization, and
       ``(ii) shall be included in the amount determined under 
     subsection (a) for the taxable year of each patron in which 
     the patronage dividend for the taxable year referred to in 
     subparagraph (A) is includible in gross income.
       ``(C) Special rule for decreasing credit for taxable 
     year.--If the amount of the credit of a cooperative 
     organization determined under subsection (a)(3) for a taxable 
     year is less than the amount of such credit shown on the 
     cooperative organization's return for such year, an amount 
     equal to the excess of such reduction over the amount not 
     apportioned to the patrons under subparagraph (A) for the 
     taxable year shall be treated as an increase in tax imposed 
     by this chapter on the organization. Any such increase shall 
     not be treated as tax imposed by this chapter for purposes of 
     determining the amount of any credit under this subpart or 
     subpart A, B, E, or G of this part.''
       (2) Technical amendment.--Section 1388 of the Internal 
     Revenue Code of 1986 (relating to definitions and special 
     rules for cooperative organizations) is amended by adding at 
     the end the following new subsection:
       ``(k) Cross Reference.--

  ``For provisions relating to the apportionment of the alcohol fuels 
credit between cooperative organizations and their patrons, see section 
40(d)(6).''

       (3) Effective date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     1997.
       (b) Offset of Past-Due, Legally Enforceable State Tax 
     Obligations Against Overpayments.--
       (1) In general.--Section 6402 of the Internal Revenue Code 
     of 1986 is amended by redesignating subsections (e) through 
     (i) as subsections (f) through (j), respectively, and by 
     inserting after subsection (d) the following new subsection:
       ``(e) Collection of Past-Due, Legally Enforceable State Tax 
     Obligations.--
       ``(1) In general.--Upon receiving notice from any State 
     that a named person owes a past-due, legally enforceable 
     State tax obligation to such State, the Secretary shall, 
     under such conditions as may be prescribed by the Secretary--
       ``(A) reduce the amount of any overpayment payable to such 
     person by the amount of such State tax obligation;
       ``(B) pay the amount by which such overpayment is reduced 
     under subparagraph (A) to such State and notify such State of 
     such person's name, taxpayer identification number, address, 
     and the amount collected; and
       ``(C) notify the person making such overpayment that the 
     overpayment has been reduced by an amount necessary to 
     satisfy a past-due, legally enforceable State tax obligation.

     If an offset is made pursuant to a joint return, the notice 
     under subparagraph (B) shall include the names, taxpayer 
     identification numbers, and addresses of each person filing 
     such return.
       ``(2) Offset permitted only against residents of state 
     seeking offset.--Paragraph (1) shall apply to an overpayment 
     by any person for a taxable year only if the address shown on 
     the return for such taxable year is an address within the 
     State seeking the offset.
       ``(3) Priorities for offset.--Any overpayment by a person 
     shall be reduced pursuant to this subsection--
       ``(A) after such overpayment is reduced pursuant to--
       ``(i) subsection (a) with respect to any liability for any 
     internal revenue tax on the part of the person who made the 
     overpayment,
       ``(ii) subsection (c) with respect to past-due support, and
       ``(iii) subsection (d) with respect to any past-due, 
     legally enforceable debt owed to a Federal agency, and

[[Page S11607]]

       ``(B) before such overpayment is credited to the future 
     liability for any Federal internal revenue tax of such person 
     pursuant to subsection (b).

     If the Secretary receives notice from 1 or more agencies of 
     the State of more than 1 debt subject to paragraph (1) that 
     is owed by such person to such an agency, any overpayment by 
     such person shall be applied against such debts in the order 
     in which such debts accrued.
       ``(4) Notice; consideration of evidence.--No State may take 
     action under this subsection until such State--
       ``(A) notifies the person owing the past-due State tax 
     liability that the State proposes to take action pursuant to 
     this section,
       ``(B) gives such person at least 60 days to present 
     evidence that all or part of such liability is not past-due 
     or not legally enforceable,
       ``(C) considers any evidence presented by such person and 
     determines that an amount of such debt is past-due and 
     legally enforceable, and
       ``(D) satisfies such other conditions as the Secretary may 
     prescribe to ensure that the determination made under 
     subparagraph (C) is valid and that the State has made 
     reasonable efforts to obtain payment of such State tax 
     obligation.
       ``(5) Past-due, legally enforceable state tax obligation.--
     For purposes of this subsection, the term `past-due, legally 
     enforceable State tax obligation' means a debt--
       ``(A)(i) which resulted from--
       ``(I) a judgment rendered by a court of competent 
     jurisdiction which has determined an amount of State tax to 
     be due, or
       ``(II) a determination after an administrative hearing 
     which has determined an amount of State tax to be due, and
       ``(ii) which is no longer subject to judicial review, or
       ``(B) which resulted from a State tax which has been 
     assessed but not collected, the time for redetermination of 
     which has expired, and which has not been delinquent for more 
     than 10 years.

     For purposes of this paragraph, the term `State tax' includes 
     any local tax administered by the chief tax administration 
     agency of the State.
       ``(6) Regulations.--The Secretary shall issue regulations 
     prescribing the time and manner in which States must submit 
     notices of past-due, legally enforceable State tax 
     obligations and the necessary information that must be 
     contained in or accompany such notices. The regulations shall 
     specify the types of State taxes and the minimum amount of 
     debt to which the reduction procedure established by 
     paragraph (1) may be applied. The regulations may require 
     States to pay a fee to reimburse the Secretary for the cost 
     of applying such procedure. Any fee paid to the Secretary 
     pursuant to the preceding sentence shall be used to reimburse 
     appropriations which bore all or part of the cost of applying 
     such procedure.
       ``(7) Erroneous payment to state.--Any State receiving 
     notice from the Secretary that an erroneous payment has been 
     made to such State under paragraph (1) shall pay promptly to 
     the Secretary, in accordance with such regulations as the 
     Secretary may prescribe, an amount equal to the amount of 
     such erroneous payment (without regard to whether any other 
     amounts payable to such State under such paragraph have been 
     paid to such State).''.
       (2) Disclosure of certain information to states requesting 
     refund offsets for past-due, legally enforceable state tax 
     obligations.--
       (A) Paragraph (10) of section 6103(l) of the Internal 
     Revenue Code of 1986 is amended by striking ``(c) or (d)'' 
     each place it appears and inserting ``(c), (d), or (e)''.
       (B) The paragraph heading for such paragraph (10) is 
     amended by striking ``section 6402(c) or 6402(d)'' and 
     inserting ``subsection (c), (d), or (e) of section 6402''.
       (3) Conforming amendments.--
       (A) Subsection (a) of section 6402 of the Internal Revenue 
     Code of 1986 is amended by striking ``(c) and (d)'' and 
     inserting ``(c), (d), and (e)''.
       (B) Paragraph (2) of section 6402(d) of the Internal 
     Revenue Code of 1986 is amended by striking ``and before such 
     overpayment'' and inserting ``and before such overpayment is 
     reduced pursuant to subsection (e) and before such 
     overpayment''.
       (C) Subsection (f) of section 6402 of the Internal Revenue 
     Code of 1986, as redesignated by paragraph (1), is amended--
       (i) by striking ``(c) or (d)'' and inserting ``(c), (d), or 
     (e)'', and
       (ii) by striking ``Federal agency'' and inserting ``Federal 
     agency or State''.
       (D) Subsection (h) of section 6402 of the Internal Revenue 
     Code of 1986, as redesignated by paragraph (1), is amended by 
     striking ``subsection (c)'' and inserting ``subsection (c) or 
     (e)''.
       (4) Amendments applied after technical corrections to 
     personal responsibility and work opportunity reconciliation 
     act of 1996.--
       (A) Section 110(l) of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 is amended by striking 
     paragraphs (4), (5), and (7) (and the amendments made by such 
     paragraphs), and the Internal Revenue Code of 1986 shall be 
     applied as if such paragraphs (and amendments) had never been 
     enacted.
       (B) For purposes of applying the amendments made by this 
     subsection other than this paragraph, the provisions of this 
     paragraph shall be treated as having been enacted immediately 
     before the other provisions of this subsection.
       (5) Effective date.--The amendments made by this subsection 
     (other than paragraph (4)) shall apply to refunds payable 
     under section 6402 of the Internal Revenue Code of 1986 after 
     December 31, 1998.
                                                                    ____


                           Amendment No. 1553

       At the appropriate place, insert the following:
       ``It is the sense of the Senate that the Federal budget 
     deficit should be reduced, and a surplus should be achieved, 
     in a way that is fair and responsible, in part by enacting 
     provisions to close longstanding loopholes in our tax code 
     and eliminating unwarranted special interest subsidies.''
                                 ______
                                 

                MOSELEY-BRAUN AMENDMENTS NOS. 1554-1556

  (Ordered to lie on the table.)
  Ms. MOSELEY-BRAUN submitted three amendments intended to be proposed 
by her to the bill, H.R. 2646, supra; as follows:

                           Amendment No. 1554

       At the end add the following:

     SEC. ____. EXTENSION AND MODIFICATION OF SUBSIDIES FOR 
                   ALCOHOL FUELS.

       (a) Extension.--
       (1) The following provisions of the Internal Revenue Code 
     of 1986 are each amended by striking ``2000'' each place it 
     appears and inserting ``2007'':
       (A) Section 4041(b)(2)(C) (relating to termination).
       (B) Section 4041(k)(3) (relating to termination).
       (C) Section 4081(c)(8) (relating to termination).
       (D) Section 4091(c)(5) (relating to termination).
       (2) Section 4041(m)(1)(A) of such Code (relating to certain 
     alcohol fuels), as amended by section 907(b) of the Taxpayer 
     Relief Act of 1997, is amended by striking ``1999'' both 
     places it appears and inserting ``2005''.
       (3) Section 6427(f)(4) of such Code (relating to 
     termination) is amended by striking ``1999'' and inserting 
     ``2007''.
       (4) Section 40(e)(1) of such Code (relating to termination) 
     is amended--
       (A) by striking ``December 31, 2000'' and inserting 
     ``December 31, 2007'', and
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) of any fuel for any period before January 1, 2008, 
     during which the rate of tax under section 4081(a)(2)(A) is 
     4.3 cents per gallon.''.
       (5) Headings 9901.00.50 and 9901.00.52 of the Harmonized 
     Tariff Schedule of the United States (19 U.S.C. 3007) are 
     amended in the effective period column by striking ``10/1/
     2000'' each place it appears and inserting ``10/1/2007''.
       (b) Modification.--
       (1) In general.--Subsection (h) of section 40 of the 
     Internal Revenue Code of 1986 (relating to alcohol used as 
     fuel) is amended to read as follows:
       ``(h) Reduced Credit for Ethanol Blenders.--
       ``(1) In general.--In the case of any alcohol mixture 
     credit or alcohol credit with respect to any sale or use of 
     alcohol which is ethanol during calendar years 2001 through 
     2007--
       ``(A) subsections (b)(1)(A) and (b)(2)(A) shall be applied 
     by substituting `the blender amount' for `60 cents',
       ``(B) subsection (b)(3) shall be applied by substituting 
     `the low-proof blender amount' for `45 cents' and `the 
     blender amount' for `60 cents', and
       ``(C) subparagraphs (A) and (B) of subsection (d)(3) shall 
     be applied by substituting `the blender amount' for `60 
     cents' and `the low-proof blender amount' for `45 cents'.
       ``(2) Amounts.--For purposes of paragraph (1), the blender 
     amount and the low-proof blender amount shall be determined 
     in accordance with the following table:


                                                                        
                                                                        
                                                         The low-proof  
  In the case of any sale or use   The blender amount    blender amount 
      during calendar year:                is:                is:       
                                                                        
  2001 or 2002...................     53 cents           39.26 cents    
  2003 or 2004...................     52 cents           38.52 cents    
  2005, 2006, or 2007............     51 cents           37.78 cents.''.
                                                                        
                                                                        

       (2) Conforming amendments.--
       (A) Section 4041(b)(2) of such Code is amended--
       (i) in subparagraph (A)(i), by striking ``5.4 cents'' and 
     inserting ``the applicable blender rate'', and
       (ii) by redesignating subparagraph (C), as amended by 
     subsection (a)(2)(A), as subparagraph (D) and by inserting 
     after subparagraph (B) the following:
       ``(C) Applicable blender rate.--For purposes of 
     subparagraph (A)(i), the applicable blender rate is--
       ``(i) except as provided in clause (ii), 5.4 cents, and
       ``(ii) for sales or uses during calendar years 2001 through 
     2007, \1/10\ of the blender amount applicable under section 
     40(h)(2) for the calendar year in which the sale or use 
     occurs.''.
       (B) Subparagraph (A) of section 4081(c)(4) of such Code is 
     amended to read as follows:
       ``(A) General rules.--
       ``(i) Mixtures containing ethanol.--Except as provided in 
     clause (ii), in the case of a qualified alcohol mixture which 
     contains

[[Page S11608]]

     gasoline, the alcohol mixture rate is the excess of the rate 
     which would (but for this paragraph) be determined under 
     subsection (a) over--

       ``(I) in the case of 10 percent gasohol, the applicable 
     blender rate (as defined in section 4041(b)(2)(A)) per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, the number of 
     cents per gallon equal to 77 percent of such applicable 
     blender rate, and
       ``(III) in the case of 5.7 percent gasohol, the number of 
     cents per gallon equal to 57 percent of such applicable 
     blender rate.

       ``(ii) Mixtures not containing ethanol.--In the case of a 
     qualified alcohol mixture which contains gasoline and none of 
     the alcohol in which consists of ethanol, the alcohol mixture 
     rate is the excess of the rate which would (but for this 
     paragraph) be determined under subsection (a) over--

       ``(I) in the case of 10 percent gasohol, 6 cents per 
     gallon,
       ``(II) in the case of 7.7 percent gasohol, 4.62 cents per 
     gallon, and
       ``(III) in the case of 5.7 percent gasohol, 3.42 cents per 
     gallon.''.

       (C) Section 4081(c)(5) of such Code is amended by striking 
     ``5.4 cents'' and inserting ``the applicable blender rate (as 
     defined in section 4041(b)(2)(C))''.
       (D) Section 4091(c)(1) of such Code is amended by striking 
     ``13.4 cents'' each place it appears and inserting ``the 
     applicable blender amount'' and by adding at the end the 
     following new sentence: ``For purposes of this paragraph, the 
     term `applicable blender amount' means 13.3 cents in the case 
     of any sale or use during 2001 or 2002, 13.2 cents in the 
     case of any sale or use during 2003 or 2004, 13.1 cents in 
     the case of any sale or use during 2005, 2006, or 2007, and 
     13.4 cents in the case of any sale or use during 2008 or 
     thereafter.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2001.
                                                                    ____


                           Amendment No. 1555

       At the end add the following:

     SEC.  . INCREASE IN MAXIMUM EXCLUSION FOR EMPLOYER-PROVIDED 
                   TRANSIT PASSES.

       (a) In General.--Subparagraph (A) of section 132(f)(2) of 
     the Internal Revenue Code of 1986 (relating to limitation on 
     exclusion) is amended by striking ``$60'' and inserting 
     ``$170''.
       (b) Conforming Amendment.--Section 132(f)(2)(B) of such 
     Code is amended by striking ``$155'' and inserting ``$170''.
       (c) Conforming Inflation Adjustment.--Paragraph (6) of 
     section 132(f) of such Code (relating to qualified 
     transportation fringe) is amended to read as follows:
       ``(6) Inflation adjustment.--In the case of any taxable 
     year beginning in a calendar year after 1997, the dollar 
     amounts contained in subparagraphs (A) and (B) of paragraph 
     (2) shall 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 the calendar year in which the taxable 
     year begins, by substituting `calendar year 1996' for 
     `calendar year 1992'.

     If any increase determined under the preceding sentence is 
     not a multiple of $5, such increase shall be rounded to the 
     next lowest multiple of $5.''.
       (d) Modification to Foreign Tax Credit Carryback and 
     Carryover Periods.--Subsection (c) of section 904 of such 
     Code (relating to limitation on credit) is amended--
       (1) by striking ``in the second preceding taxable year,'', 
     and
       (2) by striking ``of fifth'' and inserting ``fifth, sixth, 
     or seventh''.
       (3) Effective Dates.--
       (1) Except as provided in paragraph (2), the amendments 
     made by this section shall apply to taxable years beginning 
     after December 31, 1997.
       (2) The amendment made by subsection (d) shall apply to 
     credits arising in taxable years beginning after December 31, 
     1997.
                                                                    ____


                           Amendment No. 1556

       Beginning on page 2, line 3, strike all through page 6, 
     line 9, and insert:

     SECTION 1. REMOVAL OF DOLLAR AND 60-MONTH LIMITATIONS ON 
                   DEDUCTION FOR STUDENT LOANS.

       (a) In General.--Section 221 of the Internal Revenue Code 
     of 1986 (relating to interest on education loans) is amended 
     by striking subsections (b)(1) and (d) and by redesignating 
     subsections (e), (f), and (g) as subsections (d), (e), and 
     (f), respectively.
       (b) Conforming Amendments.--
       (1) Subsection (b) of section 221 of such Code, as amended 
     by subsection (a), is amended to read as follows:
       ``(b) Limitation Based on Modified Adjusted Gross Income.--
       ``(1) In general.--The amount which would (but for this 
     subsection) be allowable as a deduction under this section 
     shall be reduced (but not below zero) by the amount 
     determined under paragraph (2).
       ``(2) Amount of reduction.--The amount determined under 
     this paragraph is the amount which would be so taken into 
     ratio to the amount which would be so taken into account as--
       ``(A) the excess of--
       ``(i) the taxpayer's modified adjusted gross income for 
     such taxable year, over
       ``(ii) $40,000 ($60,000 in the case of a joint return), 
     bears to
       ``(B) $15,000.
       ``(3) Modified adjusted gross income.--The term `modified 
     adjusted gross income' means adjusted gross income 
     determined--
       ``(A) without regard to this section and sections 135, 137, 
     911, 931, and 933, and
       ``(B) after application of sections 86, 219, and 469.

     For purposes of sections 86, 135, 137, 219, and 469, adjusted 
     gross income shall be determined without regard to the 
     deduction allowed under this section.''.
       (2) Section 6050S(e) of such Code is amended by striking 
     ``section 221(e)(1)'' and inserting ``section 221(d)(1)''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 202 of the Taxpayer Relief Act of 1997.
                                 ______
                                 

                       KERREY AMENDMENT NO. 1557

  (Ordered to lie on the table.)
  Mr. KERREY submitted an amendment intended to be proposed by him to 
the bill, H.R. 2646, supra; as follows:

       At the end add the following:

     SEC.     . CHILD CREDIT LIMITED TO EDUCATION SAVINGS FOR 
                   CHILDREN UNDER AGE 6.

       (a) In General.--Section 24 of the Internal Revenue Code of 
     1986 (relating to child tax credit) is amended by adding at 
     the end the following:
       ``(g) Credit Limited to Education Savings for Certain 
     Children.--
       ``(1) In general.--In the case of a qualifying child who 
     has not attained the age of 6 as of the close of the calendar 
     year in which the taxable year of the taxpayer begins, the 
     amount of the credit allowed under this section for such 
     taxable year with respect to such child (after the 
     application of any preceding subsection) shall not exceed the 
     excess of--
       ``(A) the aggregate amount contributed by the taxpayer for 
     such taxable year for the benefit of such child to qualified 
     tuition programs (as defined in section 529) and education 
     individual retirement accounts (as defined in section 530), 
     over
       ``(B) the aggregate amount distributed during such taxable 
     year from such programs and accounts (the beneficiary of 
     which is such child) which is subject to tax under section 
     529(c) or 530(d).
       ``(2) Recapture of credit.--
       ``(A) In general.--If--
       ``(i) during any taxable year any amount is withdrawn from 
     a qualified tuition program or an education individual 
     retirement account maintained for the benefit of a 
     beneficiary and such amount is subject to tax under section 
     529(c) or 530(d), and
       ``(ii) the amount of the credit allowed under this section 
     for the prior taxable year was contingent on a contribution 
     being made to such a program or account for the benefit of 
     such beneficiary,

     the taxpayer's tax imposed by this chapter for the taxable 
     year shall be increased by the lesser of the amount described 
     in clause (i) or the credit described in clause (ii).
       ``(B) No credits against tax, etc.--Any increase in tax 
     under this paragraph shall not be treated as a tax imposed by 
     this chapter for purposes of determining--
       ``(i) the amount of any credit under this subpart or 
     subpart B or D of this part, and
       ``(ii) the amount of the minimum tax imposed by section 
     55.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 101 of the Taxpayer Relief Act of 1997.
                                 ______
                                 

                      MOYNIHAN AMENDMENT NO. 1558

  (Ordered to lie on the table.)
  Mr. MOYNIHAN submitted an amendment intended to be proposed by him to 
the bill, H.R. 2646, supra; as follows:

       At the end add the following:

     SEC.   . SENSE OF THE SENATE REGARDING TREATMENT OF FUTURE 
                   UNIFIED BUDGET SURPLUSES.

       (a) Findings.--The Senate finds that--
       (1) the current economic expansion is now in its seventh 
     year and shows no signs of ending;
       (2) the unemployment rate is below 5 percent for the first 
     time in 24 years;
       (3) the current official inflation rate, which may be 
     overstated, is about 2 percent;
       (4) the deficit has been reduced from $290,000,000,000 in 
     fiscal year 1992 to $23,000,000,000 in fiscal year 1997, or 
     just three-tenths of 1 percent of the Gross Domestic Product 
     (GDP);
       (5) the Congressional Budget Office projects that, under 
     present law, the unified budget will have a surplus of 
     $86,000,000,000 in 2007;
       (6) the Congressional Budget Office also projects that, 
     under present law, the debt held by the public will fall from 
     about 50 percent of GDP this year to about 30 percent by 
     2007;
       (7) this extraordinary combination of good budget and 
     economic news is largely the result of budget policies 
     included in the Omnibus Budget and Reconciliation Act of 
     1993;
       (8) the budget is not yet in surplus;
       (9) the Congressional Budget Office also projects that the 
     deficit is likely to reappear after 2007, and that the debt 
     held by the public as a percentage of GDP is also likely to 
     increase as the baby boom generation begins to retire;
       (10) without the on-budget surpluses of the social security 
     trust funds, the Congressional Budget Office still projects 
     annual

[[Page S11609]]

     deficits of about $100,000,000,000 even after the budget is 
     ``balanced'' in 2002; and
       (11) projected unified budget surpluses in the short-run 
     would rapidly disappear if the current expansion ends, and 
     the economy would enter a recession.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) any unified budget surpluses that might arise in the 
     current expansion should be used to reduce the Federal debt 
     held by the public; and
       (2) to achieve this goal during this economic expansion 
     that there be no net tax cut or new spending that is not 
     offset by reductions in spending on other programs or tax 
     increases.
                                 ______
                                 

                        DODD AMENDMENT NO. 1559

  (Ordered to lie on the table.)
  Mr. DODD submitted an amendment intended to be proposed by him to the 
bill, H.R. 2646, supra; as follows:

       Beginning on page 2, line 3, strike all through page 6, 
     line 9, and insert:

     SECTION 1. DEPENDENT CARE CREDIT MADE REFUNDABLE FOR LOW-
                   INCOME TAXPAYERS.

       (a) In General.--Section 21 of the Internal Revenue Code of 
     1986 (relating to credit for household and dependent care 
     services) is amended by redesignating subsection (f) as 
     subsection (g) and by inserting after subsection (e) the 
     following:
       ``(f) Credit Made Refundable for Low Income Taxpayers.--
       ``(1) In general.--For purposes of this subtitle, in the 
     case of an applicable taxpayer individual, the credit 
     allowable under subsection (a) for any taxable year shall be 
     treated as a credit allowable under subpart C of this part.
       ``(2) Applicable taxpayer.--For purposes of this 
     subsection, the term `applicable taxpayer' means a taxpayer 
     with respect to whom the credit under section 32 is allowable 
     for the taxable year.
       ``(3) Coordination with advance payments and minimum tax.--
     Rules similar to the rules of subsections (g) and (h) of 
     section 32 shall apply with respect to the portion of any 
     credit to which this subsection applies.''.
       (b) Advance Payment of Credit.--
       (1) In general.--Chapter 25 of the Internal Revenue Code of 
     1986 (relating to general provisions relating to employment 
     taxes) is amended by inserting after section 3507 the 
     following:

     ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

       ``(a) General Rule.--Except as otherwise provided in this 
     section, every employer making payment of wages with respect 
     to whom a dependent care eligibility certificate is in effect 
     shall, at the time of paying such wages, make an additional 
     payment equal to such employee's dependent care advance 
     amount.
       ``(b) Dependent Care Eligibility Certificate.--For purposes 
     of this title, a dependent care eligibility certificate is a 
     statement furnished by an employee to the employer which--
       ``(1) certifies that the employee will be eligible to 
     receive the credit provided by section 21 for the taxable 
     year,
       ``(2) certifies that the employee reasonably expects to be 
     an applicable taxpayer for the taxable year,
       ``(3) certifies that the employee does not have a dependent 
     care eligibility certificate in effect for the calendar year 
     with respect to the payment of wages by another employer,
       ``(4) states whether or not the employee's spouse has a 
     dependent care eligibility certificate in effect,
       ``(5) states the number of qualifying individuals in the 
     household maintained by the employee, and
       ``(6) estimates the amount of employment-related expenses 
     for the calendar year.
       ``(c) Dependent Care Advance Amount.--
       ``(1) In general.--For purposes of this title, the term 
     `dependent care advance amount' means, with respect to any 
     payroll period, the amount determined--
       ``(A) on the basis of the employee's wages from the 
     employer for such period,
       ``(B) on the basis of the employee's estimated employment-
     related expenses included in the dependent care eligibility 
     certificate, and
       ``(C) in accordance with tables provided by the Secretary.
       ``(2) Advance amount tables.--The tables referred to in 
     paragraph (1)(C) shall be similar in form to the tables 
     prescribed under section 3402 and, to the maximum extent 
     feasible, shall be coordinated with such tables and the 
     tables prescribed under section 3507(c).
       ``(d) Other Rules.--For purposes of this section, rules 
     similar to the rules of subsections (d) and (e) of section 
     3507 shall apply.
       ``(e) Definitions.--For purposes of this section, terms 
     used in this section which are defined in section 21 shall 
     have the respective meanings given such terms by section 
     21.''.
       (c) Conforming Amendment.--The table of sections for 
     chapter 25 of the Internal Revenue Code of 1986 is amended by 
     adding after the item relating to section 3507 the following:

``Sec. 3507A. Advance payment of dependent care credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1997.
                                 ______
                                 

                   KENNEDY AMENDMENTS NOS. 1560-1569

  (Ordered to lie on the table.)
  Mr. KENNEDY submitted 10 amendments intended to be proposed by him to 
the bill, H.R. 2646, supra; as follows:

                           Amendment No. 1560

       Strike section 2 and insert:

     SEC. 2. EXCLUSION FOR EDUCATIONAL ASSISTANCE TO GRADUATE 
                   STUDENTS.

       (A) In General.--The last sentence of section 127(c)(1) of 
     the Internal Revenue Code of 1986 (defining educational 
     assistance) is amended by striking ``, and such term also 
     does not include any payment for, or the provision of any 
     benefits with respect to, any graduate level course of a kind 
     normally taken by an individual pursuing a program leading to 
     a law, business, medical, or other advanced academic or 
     professional degree''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply with respect to expenses relating to courses 
     beginning after June 30, 1996.
                                                                    ____


                           Amendment No. 1561

       Strike section 2 and insert:

     SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT 
                   ACCOUNTS.

       (a) Temporary Increase in Maximum Annual Contributions.--
       (1) In general.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 is amended by striking ``$500'' and 
     inserting ``the contribution limit for such taxable year''.
       (2) Contribution limit.--Section 530(b) of such Code is 
     amended by adding at the end the following new paragraph:
       ``(4) Contribution limit.--The term `contribution limit' 
     means $2,500 ($500 in the case of any taxable year ending 
     after December 31, 2002).''.
       (3) Conforming amendments.--
       (A) Section 530(d)(4)(C) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit for 
     such taxable year''.
       (B) Section 4973(e)(1)(A) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit (as 
     defined in section 530(b)(4)) for such taxable year''.
       (b) Waiver of Age Limitations for Children With Special 
     Needs.--Paragraph (1) of section 530(b) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following flush sentence:
       ``The age limitations in the proceeding sentence shall not 
     apply to any designated beneficiary with special needs (as 
     determined under regulations prescribed by the Secretary).''.
       (c) Corporations Permitted to Contribute to Accounts.--
     Paragraph (1) of section 530(c) of the Internal Revenue Code 
     of 1986 is amended by striking ``The maximum amount which a 
     contributor'' and inserting ``In the case of a contributor 
     who is an individual, the maximum amount the contributor''.
       (d) Effective Date; References.--
       (1) Effective date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 213 of the Taxpayer Relief Act of 1997.
       (2) References.--Any reference in this section to any 
     section of the Internal Revenue Code of 1986 shall be a 
     reference to such section as added by the Taxpayer Relief Act 
     of 1997.
                                                                    ____


                           Amendment No. 1562

       Strike section 2 and insert:

     SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT 
                   ACCOUNTS.

       (a) Temporary Increase in Maximum Annual Contributions.--
       (1) In general.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 is amended by striking ``$500'' and 
     inserting ``the contribution limit for such taxable year''.
       (2) Contribution limit.--Section 530(b) of such Code is 
     amended by adding at the end the following new paragraph:
       ``(4) Contribution limit.--The term `contribution limit' 
     means $2,000 ($500 in the case of any taxable year ending 
     after December 31, 2002).''.
       (3) Conforming amendments.--
       (A) Section 530(d)(4)(C) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit for 
     such taxable year''.
       (B) Section 4973(e)(1)(A) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit (as 
     defined in section 530(b)(4)) for such taxable year''.
       (b) Waiver of Age Limitations for Children With Special 
     Needs.--Paragraph (1) of section 530(b) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following flush sentence:
     ``The age limitations in the preceding sentence shall not 
     apply to any designated beneficiary with special needs (as 
     determined under regulations prescribed by the Secretary).''.
       (c) Corporations Permitted To Contribute to Accounts.--
     Paragraph (1) of section 530(c) of the Internal Revenue Code 
     of 1986 is amended by striking ``The maximum amount which a 
     contributor'' and inserting ``In the case of a contributor 
     who is an individual, the maximum amount the contributor''.
       (d) Effective Date; References.--
       (1) Effective date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 213 of the Taxpayer Relief Act of 1997.
       (2) References.--Any reference in this section to any 
     section of the Internal Revenue

[[Page S11610]]

     Code of 1986 shall be a reference to such section as added by 
     the Taxpayer Relief Act of 1997.
                                                                    ____


                           Amendment No. 1563

       Strike section 2 and insert:

     SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT 
                   ACCOUNTS.

       (a) Temporary Increase in Maximum Annual Contributions.--
       (1) In general.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 is amended by striking ``$500'' and 
     inserting ``the contribution limit for such taxable year''.
       (2) Contribution limit.--Section 530(b) of such Code is 
     amended by adding at the end the following new paragraph:
       ``(4) Contribution limit.--The term `contribution limit' 
     means $1,500 ($500 in the case of any taxable year ending 
     after December 31, 2002).''.
       (3) Conforming amendments.--
       (A) Section 530(d)(4)(C) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit for 
     such taxable year''.
       (B) Section 4973(e)(1)(A) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit (as 
     defined in section 530(b)(4)) for such taxable year''.
       (b) Waiver of Age Limitations for Children With Special 
     Needs.--Paragraph (1) of section 530(b) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following flush sentence:
       ``The age limitations in the preceding sentence shall not 
     apply to any designated beneficiary with special needs (as 
     determined under regulations prescribed by the Secretary).''.
       (c) Corporations Permitted To Contribute to Accounts.--
     Paragraph (1) of section 530(c) of the International Revenue 
     Code of 1986 is amended by striking ``The maximum amount 
     which a contributor'' and inserting ``In the case of a 
     contributor who is an individual, the maximum amount the 
     contributor''.
       (d) Effective Date, References.--
       (1) Effective date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 213 of the Taxpayer Relief Act of 1997.
       (2) References.--Any reference in this section to any 
     section of the Internal Revenue Code of 1986 shall be a 
     reference to such section as added by the Taxpayer Relief Act 
     of 1997.
                                                                    ____


                           Amendment No. 1564

       Strike section 2 and insert:

     SEC. 2. MODIFICATIONS TO EDUCATION INDIVIDUAL RETIREMENT 
                   ACCOUNTS.

       (a) Temporary Increase in Maximum Annual Contributions.--
       (1) In general.--Section 530(b)(1)(A)(iii) of the Internal 
     Revenue Code of 1986 is amended by striking ``$500'' and 
     inserting ``the contribution limit for such taxable year''.
       (2) Contribution limit.--Section 530(b) of such Code is 
     amended by adding at the end the following new paragraph:
       ``(4) Contribution limit.--The term `contribution limit' 
     means $1,000 ($500 in the case of any taxable year ending 
     after December 31, 2002).''.
       (3) Conforming amendments.--
       (A) Section 530(d)(4)(C) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit for 
     such taxable year''.
       (B) Section 4973(e)(1)(A) of such Code is amended by 
     striking ``$500'' and inserting ``the contribution limit (as 
     defined in section 530(b)(4)) for such taxable year''.
       (b) Waiver of Age Limitations for Children With Special 
     Needs.--Paragraph (1) of section 530(b) of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following flush sentence:
     ``The age limitations in the preceding sentence shall not 
     apply to any designated beneficiary with special needs (as 
     determined under regulations prescribed by the Secretary).''.
       (c) Corporations Permitted To Contribute to Accounts.--
     Paragraph (1) of section 530(c) of the Internal Revenue Code 
     of 1986 is amended by striking ``The maximum amount which a 
     contributor'' and inserting ``In the case of a contributor 
     who is an individual, the maximum amount the contributor''.
       (d) Effective Date; References.--
       (1) Effective date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     section 213 of the Taxpayer Relief Act of 1997.
       (2) References.--Any reference in this section to any 
     section of the Internal Revenue Code of 1986 shall be a 
     reference to such section as added by the Taxpayer Relief Act 
     of 1997.
                                                                    ____


                           Amendment No. 1565

       On page 6, line 5, strike ``1997'' and insert ``1997, 
     except that such amendments shall only take effect to the 
     extent that--
       (A) contributions to education individual retirement 
     accounts for qualified elementary and secondary education 
     expenses are--
       (i) limited to accounts that, at the time the account is 
     created or organized, are designated solely for the payment 
     of such expenses, and
       (ii) not allowed for contributors who have modified 
     adjusted gross income in excess of $65,000 and are ratably 
     reduced to zero for contributors who have modified adjusted 
     gross income between $50,000 and $65,000,
       (B) contributions to education individual retirement 
     accounts in excess of $500 for any taxable years may be made 
     only to accounts described in subparagraph (A)(i),
       (C) no contributions may be made to accounts described in 
     subparagraph (A)(i) for taxable years ending after December 
     31, 2002,
       (D) the modified adjusted gross income limitation shall 
     apply to all contributors but contributions made by a person 
     other than the taxpayer with respect to whom a deduction is 
     allowable under section 151(c)(1) for a designated 
     beneficiary shall be treated as having been made by such 
     taxpayer, and
       (E) expenses for computer and other equipment, 
     transportation, and supplementary items are allowed tax-free 
     only if required or provided by the school.''
                                                                    ____


                           Amendment No. 1566

       On page 6, line 5, strike ``1997'' and insert ``1997, 
     except that such amendments shall only take effect to the 
     extent that--
       (A) contributions to education individual retirement 
     accounts for qualified elementary and secondary education 
     expenses are--
       (i) limited to accounts that, at the time the account is 
     created or organized, are designated solely for the payment 
     of such expenses, and
       (ii) not allowed for contributors who have modified 
     adjusted gross income in excess of $60,000 and are ratably 
     reduced to zero for contributors who have modified adjusted 
     gross income between $50,000 and $60,000,
       (B) contributions to education individual retirement 
     accounts in excess of $500 for any taxable years may be made 
     only to accounts described in subparagraph (A)(i),
       (C) no contributions may be made to accounts described in 
     subparagraph (A)(i) for taxable years ending after December 
     31, 2002,
       (D) the modified adjusted gross income limitation shall 
     apply to all contributors but contributions made by a person 
     other than the taxpayer with respect to whom a deduction is 
     allowable under section 151(c)(1) for a designated 
     beneficiary shall be treated as having been made by such 
     taxpayer, and
       (E) expenses for computer and other equipment, 
     transportation, and supplementary items are allowed tax-free 
     only if required or provided by the school.''
                                                                    ____


                           Amendment No. 1567

       On page 6, line 5, strike ``1997'' and insert ``1997, 
     except that such amendments shall only take effect to the 
     extent that--
       (A) contributions to education individual retirement 
     accounts for qualified elementary and secondary education 
     expenses are--
       (i) limited to accounts that, at the time the account is 
     created or organized, are designated solely for the payment 
     of such expenses, and
       (ii) not allowed for contributors who have modified 
     adjusted gross income in excess of $50,000 and are ratably 
     reduced to zero for contributors who have modified adjusted 
     gross income between $40,000 and $50,000,
       (B) contributions to education individual retirement 
     accounts in excess of $500 for any taxable years may be made 
     only to accounts described in subparagraph (A)(i),
       (C) no contributions may be made to accounts described in 
     subparagraph (A)(i) for taxable years ending after December 
     31, 2002,
       (D) the modified adjusted gross income limitation shall 
     apply to all contributors but contributions made by a person 
     other than the taxpayer with respect to whom a deduction is 
     allowable under section 151(c)(1) for a designated 
     beneficiary shall be treated as having been made by such 
     taxpayer, and
       (E) expenses for computer and other equipment, 
     transportation, and supplementary items are allowed tax-free 
     only if required or provided by the school.''
                                                                    ____


                           Amendment No. 1568

       On page 3, beginning with line 14, strike all through page 
     4, line 10, and insert:
       ``(4) Qualified elementary and secondary education 
     expenses.--
       ``(A) In general.--The term `qualified elementary and 
     secondary education expenses' means tuition, fees, tutoring, 
     special needs services, books, supplies, computer equipment 
     (including related software and services) and other 
     equipment, transportation, and supplementary expenses 
     required for the enrollment or attendance of the designated 
     beneficiary of the trust at a public school.
       ``(B) Special rule for home-schooling.--Such term shall 
     include expenses described in subparagraph (A) required for 
     education provided for homeschooling if the requirements of 
     any applicable State or local law are met with respect to 
     such education.
       ``(C) School.--The term `school' means any public or home 
     school which provides elementary education or secondary 
     education (through grade 12), as determined under State 
     law.''.
                                                                    ____


                           Amendment No. 1569

       On page 3, beginning with line 14, strike all through page 
     4, line 10, and insert:
       ``(4) Qualified elementary and secondary education 
     expenses.--
       ``(A) In general.--The term `qualified elementary and 
     secondary education expenses' means tuition fees, tutoring, 
     special needs services, books, supplies, computer equipment 
     (including related software and services) and other 
     equipment, transportation, and supplementary expenses 
     required for the enrollment or attendance of the designated 
     beneficiary of the trust at a public school.
       ``(B) School.--The term `school' means any public school 
     which provides elementary education or secondary education 
     (through grade 12), as determined under State law.''.

[[Page S11611]]

                                 ______
                                 

                        GRAMM AMENDMENT NO. 1570

  (Ordered to lie on the table.)
  Mr. GRAMM submitted an amendment intended to be proposed by him to 
the bill, H.R. 2646, supra; as follows:

       (a) In General.--Subpart A of Part IV of subchapter A of 
     Chapter 1 of the Internal Revenue Code of 1986 is amended by 
     inserting after section 24 the following new section:

     ``SEC 24A EXPEDITED FAMILY TAX RELIEF.

       ``(a) Notice of Credit.--The Secretary of the Treasury 
     shall transmit to all individual taxpayers by a separate 
     mailing made on or before June 1, 1998, a notice which states 
     only the following: The Taxpayer Relief Act of 1997 was 
     recently passed by the Congress. The Act's child tax credit 
     allows taxpayers to reduce their taxes by $400 per child in 
     1998 and $500 thereafter. the credit is effective January 1, 
     1998.
       You will receive this tax credit in 1999 as part of your 
     1998 tax refund OR you may elect to receive the credit this 
     year through lower income tax withholding from your paycheck 
     for the period October 1, 1998 to December 25, 1998.
       To take advantage of the credit to which you are entitled 
     for the current tax year, you should notify your employer of 
     your election to receive the tax credit in 1998 by September 
     1, 1998. Your employer will reduce the amount of federal 
     income tax withheld during the period from October 1 through 
     December 31, 1995. That notification should also:
       (1). Confirm that your projected income for 1998 is
       in the case of a joint return, less than $110,000
       in the case of married couple filing separately, less than 
     $55,000
       in the case of an individual who is not married, less than 
     $75,000; and
       (2). identify the number of eligible children age 16 or 
     less that qualify as your dependent under section 151.'''
       ``(b). The Secretary of the Treasury shall transmit to all 
     employers by a separate mailing made on or before June 1, 
     1998 the following table to assist in determining the changes 
     to federal income tax withholding required by subsection (a)
       The amount of income tax withheld per paycheck issued 
     during the period October 1, 1998 to Dec. 25, 1998 is reduced 
     by:

------------------------------------------------------------------------
                                          Monthly    Biweekly    Weekly 
        No. of eligible children          paycheck   paycheck   paycheck
------------------------------------------------------------------------
1......................................       $133     $66.50     $33.25
2......................................        266     133.00      66.50
3......................................        399     200.00     100.00
4......................................        532     266.50     133.25
------------------------------------------------------------------------
For more than 4 children, increase the dollar amount in row 4 by the    
  dollar amount in row 1 for each child.''                              

  

                          ____________________