[Congressional Record Volume 144, Number 144 (Monday, October 12, 1998)]
[House]
[Pages H10622-H10632]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
EXTENDING CERTAIN EXPIRING PROVISIONS OF THE INTERNAL REVENUE CODE
Mr. ARCHER. Madam Speaker, I move to suspend the rules and pass the
bill (H.R. 4738) to amend the Internal Revenue Code of 1986 to extend
certain expiring provisions, provide tax relief for farmers and small
businesses, and for other purposes, as amended.
The Clerk read as follows:
H.R. 4738
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is
expressed in terms of an amendment to, or repeal of, a
section or other provision, the reference shall be considered
to be made to a section or other provision of the Internal
Revenue Code of 1986.
(b) Table of Contents.--
Sec. 1. Amendment of 1986 Code; table of contents.
TITLE I--EXTENSION AND MODIFICATION OF CERTAIN EXPIRING PROVISIONS
Subtitle A--Tax Provisions
Sec. 101. Research credit.
Sec. 102. Work opportunity credit.
Sec. 103. Income averaging for farmers made permanent.
Sec. 104. Contributions of stock to private foundations; expanded
public inspection of private foundations' annual returns.
Sec. 105. Subpart F exemption for active financing income.
Sec. 106. Disclosure of return information on income contingent student
loans.
Subtitle B--Generalized System of Preferences
Sec. 111. Extension of Generalized System of Preferences.
TITLE II--OTHER PROVISIONS
Sec. 201. Depreciation study.
Sec. 202. Production flexibility contract payments.
Sec. 203. 100 percent deduction for health insurance costs of self-
employed individuals.
Sec. 204. Increase in volume cap on private activity bonds.
Sec. 205. Modification of estimated tax safe harbors.
Sec. 206. Exemption for students employed by State schools, colleges,
or universities.
TITLE III--REVENUE OFFSETS
Sec. 301. Treatment of certain deductible liquidating distributions of
regulated investment companies and real estate investment
trusts.
Sec. 302. Inclusion of rotavirus gastroenteritis as a taxable vaccine.
Sec. 303. Clarification and expansion of mathematical error assessment
procedures.
Sec. 304. Clarification of definition of specified liability loss.
TITLE IV--TECHNICAL CORRECTIONS
Sec. 401. Definitions; coordination with other titles.
Sec. 402. Amendments related to Internal Revenue Service Restructuring
and Reform Act of 1998.
Sec. 403. Amendments related to Taxpayer Relief Act of 1997.
Sec. 404. Amendments related to Tax Reform Act of 1984.
Sec. 405. Other amendments.
TITLE I--EXTENSION AND MODIFICATION OF CERTAIN EXPIRING PROVISIONS
Subtitle A--Tax Provisions
SEC. 101. RESEARCH CREDIT.
(a) Temporary Extension.--Paragraph (1) of section 41(h)
(relating to termination) is amended--
(1) by striking ``June 30, 1998'' and inserting ``December
31, 1999'';
(2) by striking ``24-month'' and inserting ``42-month'';
and
(3) by striking ``24 months'' and inserting ``42 months''.
(b) Technical Amendment.--Subparagraph (D) of section
45C(b)(1) is amended by striking ``June 30, 1998'' and
inserting ``December 31, 1999''.
(c) Effective Date.--The amendments made by this section
shall apply to amounts paid or incurred after June 30, 1998.
SEC. 102. WORK OPPORTUNITY CREDIT.
(a) Temporary Extension.--Subparagraph (B) of section
51(c)(4) (relating to termination) is amended by striking
``June 30, 1998'' and inserting ``December 31, 1999''.
(b) Effective Date.--The amendment made by this section
shall apply to individuals who begin work for the employer
after June 30, 1998.
SEC. 103. INCOME AVERAGING FOR FARMERS MADE PERMANENT.
Subsection (c) of section 933 of the Taxpayer Relief Act of
1997 is amended by striking ``, and before January 1, 2001''.
SEC. 104. CONTRIBUTIONS OF STOCK TO PRIVATE FOUNDATIONS;
EXPANDED PUBLIC INSPECTION OF PRIVATE
FOUNDATIONS' ANNUAL RETURNS.
(a) Special Rule for Contributions of Stock Made
Permanent.--
(1) In general.--Paragraph (5) of section 170(e) is amended
by striking subparagraph (D) (relating to termination).
(2) Effective date.--The amendment made by paragraph (1)
shall apply to contributions made after June 30, 1998.
(b) Expanded Public Inspection of Private Foundations'
Annual Returns, Etc.--
(1) In general.--Section 6104 (relating to publicity of
information required from certain exempt organizations and
certain trusts) is amended by striking subsections (d) and
(e) and inserting after subsection (c) the following new
subsection:
``(d) Public Inspection of Certain Annual Returns and
Applications for Exemption.--
``(1) In general.--In the case of an organization described
in subsection (c) or (d) of section 501 and exempt from
taxation under section 501(a)--
``(A) a copy of--
``(i) the annual return filed under section 6033 (relating
to returns by exempt organizations) by such organization; and
``(ii) if the organization filed an application for
recognition of exemption under section 501, the exempt status
application materials of such organization,
shall be made available by such organization for inspection
during regular business hours by any individual at the
principal office of such organization and, if such
organization regularly maintains 1 or more regional or
district offices having 3 or more employees, at each such
regional or district office; and
``(B) upon request of an individual made at such principal
office or such a regional or district office, a copy of such
annual return and exempt status application materials shall
be provided to such individual without charge other than a
reasonable fee for any reproduction and mailing costs.
The request described in subparagraph (B) must be made in
person or in writing. If such request is made in person, such
copy shall be provided immediately and, if made in writing,
shall be provided within 30 days.
``(2) 3-year limitation on inspection of returns.--
Paragraph (1) shall apply to an annual return filed under
section 6033 only during the 3-year period beginning on the
last day prescribed for filing such return (determined with
regard to any extension of time for filing).
``(3) Exceptions from disclosure requirement.--
``(A) Nondisclosure of contributors, etc.--Paragraph (1)
shall not require the disclosure of the name or address of
any contributor to the organization. In the case of an
organization described in section 501(d),
[[Page H10623]]
paragraph (1) shall not require the disclosure of the copies
referred to in section 6031(b) with respect to such
organization.
``(B) Nondisclosure of certain other information.--
Paragraph (1) shall not require the disclosure of any
information if the Secretary withheld such information from
public inspection under subsection (a)(1)(D).
``(4) Limitation on providing copies.--Paragraph (1)(B)
shall not apply to any request if, in accordance with
regulations promulgated by the Secretary, the organization
has made the requested documents widely available, or the
Secretary determines, upon application by an organization,
that such request is part of a harassment campaign and that
compliance with such request is not in the public interest.
``(5) Exempt status application materials.--For purposes of
paragraph (1), the term `exempt status applicable materials'
means the application for recognition of exemption under
section 501 and any papers submitted in support of such
application and any letter or other document issued by the
Internal Revenue Service with respect to such application.''.
(2) Conforming amendments.--
(A) Subsection (c) of section 6033 is amended by adding
``and'' at the end of paragraph (1), by striking paragraph
(2), and by redesignating paragraph (3) as paragraph (2).
(B) Subparagraph (C) of section 6652(c)(1) is amended by
striking ``subsection (d) or (e)(1) of section 6104 (relating
to public inspection of annual returns)'' and inserting
``section 6104(d) with respect to any annual return''.
(C) Subparagraph (D) of section 6652(c)(1) is amended by
striking ``section 6104(e)(2) (relating to public inspection
of applications for exemption)'' and inserting ``section
6104(d) with respect to any exempt status application
materials (as defined in such section)''.
(D) Section 6685 is amended by striking ``or (e)''.
(E) Section 7207 is amended by striking ``or (e)''.
(3) Effective date.--
(A) In general.--Except as provided in subparagraph (B),
the amendments made by this subsection shall apply to
requests made after the later of December 31, 1998, or the
60th day after the Secretary of the Treasury first issues the
regulations referred to in such section 6104(d)(4) of the
Internal Revenue Code of 1986, as amended by this section.
(B) Publication of annual returns.--Section 6104(d) of such
Code, as in effect before the amendments made by this
subsection, shall not apply to any return the due date for
which is after the date such amendments take effect under
subparagraph (A).
SEC. 105. SUBPART F EXEMPTION FOR ACTIVE FINANCING INCOME.
(a) Income Derived From Banking, Financing, or Similar
Businesses.--Section 954(h) (relating to income derived in
the active conduct of banking, financing, or similar
businesses) is amended to read as follows:
``(h) Special Rule for Income Derived in the Active Conduct
of Banking, Financing, or Similar Businesses.--
``(1) In general.--For purposes of subsection (c)(1),
foreign personal holding company income shall not include
qualified banking or financing income of an eligible
controlled foreign corporation.
``(2) Eligible controlled foreign corporation.--For
purposes of this subsection--
``(A) In general.--The term `eligible controlled foreign
corporation' means a controlled foreign corporation which--
``(i) is predominantly engaged in the active conduct of a
banking, financing, or similar business, and
``(ii) conducts substantial activity with respect to such
business.
``(B) Predominantly engaged.--A controlled foreign
corporation shall be treated as predominantly engaged in the
active conduct of a banking, financing, or similar business
if--
``(i) more than 70 percent of the gross income of the
controlled foreign corporation is derived directly from the
active and regular conduct of a lending or finance business
from transactions with customers which are not related
persons,
``(ii) it is engaged in the active conduct of a banking
business and is an institution licensed to do business as a
bank in the United States (or is any other corporation not so
licensed which is specified by the Secretary in regulations),
or
``(iii) it is engaged in the active conduct of a securities
business and is registered as a securities broker or dealer
under section 15(a) of the Securities Exchange Act of 1934 or
is registered as a Government securities broker or dealer
under section 15C(a) of such Act (or is any other corporation
not so registered which is specified by the Secretary in
regulations).
``(3) Qualified banking or financing income.--For purposes
of this subsection--
``(A) In general.--The term `qualified banking or financing
income' means income of an eligible controlled foreign
corporation which--
``(i) is derived in the active conduct of a banking,
financing, or similar business by--
``(I) such eligible controlled foreign corporation, or
``(II) a qualified business unit of such eligible
controlled foreign corporation,
``(ii) is derived from one or more transactions--
``(I) with customers located in a country other than the
United States, and
``(II) substantially all of the activities in connection
with which are conducted directly by the corporation or unit
in its home country, and
``(iii) is treated as earned by such corporation or unit in
its home country for purposes of such country's tax laws.
``(B) Limitation on nonbanking and nonsecurities
businesses.--No income of an eligible controlled foreign
corporation not described in clause (ii) or (iii) of
paragraph (2)(B) (or of a qualified business unit of such
corporation) shall be treated as qualified banking or
financing income unless more than 30 percent of such
corporation's or unit's gross income is derived directly from
the active and regular conduct of a lending or finance
business from transactions with customers which are not
related persons and which are located within such
corporation's or unit's home country.
``(C) Substantial activity requirement for cross border
income.--The term `qualified banking or financing income'
shall not include income derived from 1 or more transactions
with customers located in a country other than the home
country of the eligible controlled foreign corporation or a
qualified business unit of such corporation unless such
corporation or unit conducts substantial activity with
respect to a banking, financing, or similar business in its
home country.
``(D) Determinations made separately.--For purposes of this
paragraph, the qualified banking or financing income of an
eligible controlled foreign corporation and each qualified
business unit of such corporation shall be determined
separately for such corporation and each such unit by taking
into account--
``(i) in the case of the eligible controlled foreign
corporation, only items of income, deduction, gain, or loss
and activities of such corporation not properly allocable or
attributable to any qualified business unit of such
corporation, and
``(ii) in the case of a qualified business unit, only items
of income, deduction, gain, or loss and activities properly
allocable or attributable to such unit.
``(4) Lending or finance business.--For purposes of this
subsection, the term `lending or finance business' means the
business of--
``(A) making loans,
``(B) purchasing or discounting accounts receivable, notes,
or installment obligations,
``(C) engaging in leasing (including entering into leases
and purchasing, servicing, and disposing of leases and leased
assets),
``(D) issuing letters of credit or providing guarantees,
``(E) providing charge and credit card services, or
``(F) rendering services or making facilities available in
connection with activities described in subparagraphs (A)
through (E) carried on by--
``(i) the corporation (or qualified business unit)
rendering services or making facilities available, or
``(ii) another corporation (or qualified business unit of a
corporation) which is a member of the same affiliated group
(as defined in section 1504, but determined without regard to
section 1504(b)(3)).
``(5) Other definitions.--For purposes of this subsection--
``(A) Customer.--The term `customer' means, with respect to
any controlled foreign corporation or qualified business
unit, any person which has a customer relationship with such
corporation or unit and which is acting in its capacity as
such.
``(B) Home country.--Except as provided in regulations--
``(i) Controlled foreign corporation.--The term `home
country' means, with respect to any controlled foreign
corporation, the country under the laws of which the
corporation was created or organized.
``(ii) Qualified business unit.--The term `home country'
means, with respect to any qualified business unit, the
country in which such unit maintains its principal office.
``(C) Located.--The determination of where a customer is
located shall be made under rules prescribed by the
Secretary.
``(D) Qualified business unit.--The term `qualified
business unit' has the meaning given such term by section
989(a).
``(E) Related person.--The term `related person' has the
meaning given such term by subsection (d)(3).
``(6) Coordination with exception for dealers.--Paragraph
(1) shall not apply to income described in subsection
(c)(2)(C)(ii) of a dealer in securities (within the meaning
of section 475) which is an eligible controlled foreign
corporation described in paragraph (2)(B)(iii).
``(7) Anti-abuse rules.--For purposes of applying this
subsection and subsection (c)(2)(C)(ii)--
``(A) there shall be disregarded any item of income, gain,
loss, or deduction with respect to any transaction or series
of transactions one of the principal purposes of which is
qualifying income or gain for the exclusion under this
section, including any transaction or series of transactions
a principal purpose of which is the acceleration or deferral
of any item in order to claim the benefits of such exclusion
through the application of this subsection,
``(B) there shall be disregarded any item of income, gain,
loss, or deduction of an entity which is not engaged in
regular and continuous transactions with customers which are
not related persons,
``(C) there shall be disregarded any item of income, gain,
loss, or deduction with respect to any transaction or series
of transactions utilizing, or doing business with--
[[Page H10624]]
``(i) one or more entities in order to satisfy any home
country requirement under this subsection, or
``(ii) a special purpose entity or arrangement, including a
securitization, financing, or similar entity or arrangement,
if one of the principal purposes of such transaction or
series of transactions is qualifying income or gain for the
exclusion under this subsection, and
``(D) a related person, an officer, a director, or an
employee with respect to any controlled foreign corporation
(or qualified business unit) which would otherwise be treated
as a customer of such corporation or unit with respect to any
transaction shall not be so treated if a principal purpose of
such transaction is to satisfy any requirement of this
subsection.
``(8) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection, subsection (c)(1)(B)(i),
subsection (c)(2)(C)(ii), and the last sentence of subsection
(e)(2).
``(9) Application.--This subsection, subsection
(c)(2)(C)(ii), and the last sentence of subsection (e)(2)
shall apply only to the first taxable year of a foreign
corporation beginning after December 31, 1998, and before
January 1, 2000, and to taxable years of United States
shareholders with or within which such taxable year of such
foreign corporation ends.''.
(b) Income Derived From Insurance Business.--
(1) Income attributable to issuance or reinsurance.--
(A) In general.--Section 953(a) (defining insurance income)
is amended to read as follows:
``(a) Insurance Income.--
``(1) In general.--For purposes of section 952(a)(1), the
term `insurance income' means any income which--
``(A) is attributable to the issuing (or reinsuring) of an
insurance or annuity contract, and
``(B) would (subject to the modifications provided by
subsection (b)) be taxed under subchapter L of this chapter
if such income were the income of a domestic insurance
company.
``(2) Exception.--Such term shall not include any exempt
insurance income (as defined in subsection (e)).''.
(B) Exempt insurance income.--Section 953 (relating to
insurance income) is amended by adding at the end the
following new subsection:
``(e) Exempt Insurance Income.--For purposes of this
section--
``(1) Exempt insurance income defined.--
``(A) In general.--The term `exempt insurance income' means
income derived by a qualifying insurance company which--
``(i) is attributable to the issuing (or reinsuring) of an
exempt contract by such company or a qualifying insurance
company branch of such company, and
``(ii) is treated as earned by such company or branch in
its home country for purposes of such country's tax laws.
``(B) Exception for certain arrangements.--Such term shall
not include income attributable to the issuing (or
reinsuring) of an exempt contract as the result of any
arrangement whereby another corporation receives a
substantially equal amount of premiums or other consideration
in respect of issuing (or reinsuring) a contract which is not
an exempt contract.
``(C) Determinations made separately.--For purposes of this
subsection and section 954(i), the exempt insurance income
and exempt contracts of a qualifying insurance company or any
qualifying insurance company branch of such company shall be
determined separately for such company and each such branch
by taking into account--
``(i) in the case of the qualifying insurance company, only
items of income, deduction, gain, or loss, and activities of
such company not properly allocable or attributable to any
qualifying insurance company branch of such company, and
``(ii) in the case of a qualifying insurance company
branch, only items of income, deduction, gain, or loss and
activities properly allocable or attributable to such branch.
``(2) Exempt contract.--
``(A) In general.--The term `exempt contract' means an
insurance or annuity contract issued or reinsured by a
qualifying insurance company or qualifying insurance company
branch in connection with property in, liability arising out
of activity in, or the lives or health of residents of, a
country other than the United States.
``(B) Minimum home country income required.--
``(i) In general.--No contract of a qualifying insurance
company or of a qualifying insurance company branch shall be
treated as an exempt contract unless such company or branch
derives more than 30 percent of its net written premiums from
exempt contracts (determined without regard to this
subparagraph)--
``(I) which cover applicable home country risks, and
``(II) with respect to which no policyholder, insured,
annuitant, or beneficiary is a related person (as defined in
section 954(d)(3)).
``(ii) Applicable home country risks.--The term `applicable
home country risks' means risks in connection with property
in, liability arising out of activity in, or the lives or
health of residents of, the home country of the qualifying
insurance company or qualifying insurance company branch, as
the case may be, issuing or reinsuring the contract covering
the risks.
``(C) Substantial activity requirements for cross border
risks.--A contract issued by a qualifying insurance company
or qualifying insurance company branch which covers risks
other than applicable home country risks (as defined in
subparagraph (B)(ii)) shall not be treated as an exempt
contract unless such company or branch, as the case may be--
``(i) conducts substantial activity with respect to an
insurance business in its home country, and
``(ii) performs in its home country substantially all of
the activities necessary to give rise to the income generated
by such contract.
``(3) Qualifying insurance company.--The term `qualifying
insurance company' means any controlled foreign corporation
which--
``(A) is subject to regulation as an insurance (or
reinsurance) company by its home country, and is licensed,
authorized, or regulated by the applicable insurance
regulatory body for its home country to sell insurance,
reinsurance, or annuity contracts to persons other than
related persons (within the meaning of section 954(d)(3)) in
such home country,
``(B) derives more than 50 percent of its aggregate net
written premiums from the issuance or reinsurance by such
controlled foreign corporation and each of its qualifying
insurance company branches of contracts--
``(i) covering applicable home country risks (as defined in
paragraph (2)) of such corporation or branch, as the case may
be, and
``(ii) with respect to which no policyholder, insured,
annuitant, or beneficiary is a related person (as defined in
section 954(d)(3)),
except that in the case of a branch, such premiums shall only
be taken into account to the extent such premiums are treated
as earned by such branch in its home country for purposes of
such country's tax laws, and
``(C) is engaged in the insurance business and would be
subject to tax under subchapter L if it were a domestic
corporation.
``(4) Qualifying insurance company branch.--The term
`qualifying insurance company branch' means a qualified
business unit (within the meaning of section 989(a)) of a
controlled foreign corporation if--
``(A) such unit is licensed, authorized, or regulated by
the applicable insurance regulatory body for its home country
to sell insurance, reinsurance, or annuity contracts to
persons other than related persons (within the meaning of
section 954(d)(3)) in such home country, and
``(B) such controlled foreign corporation is a qualifying
insurance company, determined under paragraph (3) as if such
unit were a qualifying insurance company branch.
``(5) Life insurance or annuity contract.--For purposes of
this section and section 954, the determination of whether a
contract issued by a controlled foreign corporation or a
qualified business unit (within the meaning of section
989(a)) is a life insurance contract or an annuity contract
shall be made without regard to sections 72(s), 101(f),
817(h), and 7702 if--
``(A) such contract is regulated as a life insurance or
annuity contract by the corporation's or unit's home country,
and
``(B) no policyholder, insured, annuitant, or beneficiary
with respect to the contract is a United States person.
``(6) Home country.--For purposes of this subsection,
except as provided in regulations--
``(A) Controlled foreign corporation.--The term `home
country' means, with respect to a controlled foreign
corporation, the country in which such corporation is created
or organized.
``(B) Qualified business unit.--The term `home country'
means, with respect to a qualified business unit (as defined
in section 989(a)), the country in which the principal office
of such unit is located and in which such unit is licensed,
authorized, or regulated by the applicable insurance
regulatory body to sell insurance, reinsurance, or annuity
contracts to persons other than related persons (as defined
in section 954(d)(3)) in such country.
``(7) Anti-abuse rules.--For purposes of applying this
subsection and section 954(i)--
``(A) the rules of section 954(h)(7) (other than
subparagraph (B) thereof) shall apply,
``(B) there shall be disregarded any item of income, gain,
loss, or deduction of, or derived from, an entity which is
not engaged in regular and continuous transactions with
persons which are not related persons,
``(C) there shall be disregarded any change in the method
of computing reserves a principal purpose of which is the
acceleration or deferral of any item in order to claim the
benefits of this subsection or section 954(i),
``(D) a contract of insurance or reinsurance shall not be
treated as an exempt contract (and premiums from such
contract shall not be taken into account for purposes of
paragraph (2)(B) or (3)) if--
``(i) any policyholder, insured, annuitant, or beneficiary
is a resident of the United States and such contract was
marketed to such resident and was written to cover a risk
outside the United States, or
``(ii) the contract covers risks located within and without
the United States and the qualifying insurance company or
qualifying insurance company branch does not maintain such
contemporaneous records, and
[[Page H10625]]
file such reports, with respect to such contract as the
Secretary may require,
``(E) the Secretary may prescribe rules for the allocation
of contracts (and income from contracts) among 2 or more
qualifying insurance company branches of a qualifying
insurance company in order to clearly reflect the income of
such branches, and
``(F) premiums from a contract shall not be taken into
account for purposes of paragraph (2)(B) or (3) if such
contract reinsures a contract issued or reinsured by a
related person (as defined in section 954(d)(3)).
For purposes of subparagraph (D), the determination of where
risks are located shall be made under the principles of
section 953.
``(8) Coordination with subsection (c).--In determining
insurance income for purposes of subsection (c), exempt
insurance income shall not include income derived from exempt
contracts which cover risks other than applicable home
country risks.
``(9) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
the purposes of this subsection and section 954(i).
``(10) Application.--This subsection and section 954(i)
shall apply only to the first taxable year of a foreign
corporation beginning after December 31, 1998, and before
January 1, 2000, and to taxable years of United States
shareholders with or within which such taxable year of such
foreign corporation ends.
``(11) Cross reference.--
``For income exempt from foreign personal holding company income, see
section 954(i).''.
(2) Exemption from foreign personal holding company
income.--Section 954 (defining foreign base company income)
is amended by adding at the end the following new subsection:
``(i) Special Rule for Income Derived in the Active Conduct
of Insurance Business.--
``(1) In general.--For purposes of subsection (c)(1),
foreign personal holding company income shall not include
qualified insurance income of a qualifying insurance company.
``(2) Qualified insurance income.--The term `qualified
insurance income' means income of a qualifying insurance
company which is--
``(A) received from a person other than a related person
(within the meaning of subsection (d)(3)) and derived from
the investments made by a qualifying insurance company or a
qualifying insurance company branch of its reserves allocable
to exempt contracts or of 80 percent of its unearned premiums
from exempt contracts (as both are determined in the manner
prescribed under paragraph (4)), or
``(B) received from a person other than a related person
(within the meaning of subsection (d)(3)) and derived from
investments made by a qualifying insurance company or a
qualifying insurance company branch of an amount of its
assets allocable to exempt contracts equal to--
``(i) in the case of property, casualty, or health
insurance contracts, one-third of its premiums earned on such
insurance contracts during the taxable year (as defined in
section 832(b)(4)), and
``(ii) in the case of life insurance or annuity contracts,
10 percent of the reserves described in subparagraph (A) for
such contracts.
``(3) Principles for determining insurance income.--Except
as provided by the Secretary, for purposes of subparagraphs
(A) and (B) of paragraph (2)--
``(A) in the case of any contract which is a separate
account-type contract (including any variable contract not
meeting the requirements of section 817), income credited
under such contract shall be allocable only to such contract,
and
``(B) income not allocable under subparagraph (A) shall be
allocated ratably among contracts not described in
subparagraph (A).
``(4) Methods for determining unearned premiums and
reserves.--For purposes of paragraph (2)(A)--
``(A) Property and casualty contracts.--The unearned
premiums and reserves of a qualifying insurance company or a
qualifying insurance company branch with respect to property,
casualty, or health insurance contracts shall be determined
using the same methods and interest rates which would be used
if such company or branch were subject to tax under
subchapter L, except that--
``(i) the interest rate determined for the functional
currency of the company or branch, and which, except as
provided by the Secretary, is calculated in the same manner
as the Federal mid-term rate under section 1274(d), shall be
substituted for the applicable Federal interest rate, and
``(ii) such company or branch shall use the appropriate
foreign loss payment pattern.
``(B) Life insurance and annuity contracts.--The amount of
the reserve of a qualifying insurance company or qualifying
insurance company branch for any life insurance or annuity
contract shall be equal to the greater of--
``(i) the net surrender value of such contract (as defined
in section 807(e)(1)(A)), or
``(ii) the reserve determined under paragraph (5).
``(C) Limitation on reserves.--In no event shall the
reserve determined under this paragraph for any contract as
of any time exceed the amount which would be taken into
account with respect to such contract as of such time in
determining foreign statement reserves (less any catastrophe,
deficiency, equalization, or similar reserves).
``(5) Amount of reserve.--The amount of the reserve
determined under this paragraph with respect to any contract
shall be determined in the same manner as it would be
determined if the qualifying insurance company or qualifying
insurance company branch were subject to tax under subchapter
L, except that in applying such subchapter--
``(A) the interest rate determined for the functional
currency of the company or branch, and which, except as
provided by the Secretary, is calculated in the same manner
as the Federal mid-term rate under section 1274(d), shall be
substituted for the applicable Federal interest rate,
``(B) the highest assumed interest rate permitted to be
used in determining foreign statement reserves shall be
substituted for the prevailing State assumed interest rate,
and
``(C) tables for mortality and morbidity which reasonably
reflect the current mortality and morbidity risks in the
company's or branch's home country shall be substituted for
the mortality and morbidity tables otherwise used for such
subchapter.
The Secretary may provide that the interest rate and
mortality and morbidity tables of a qualifying insurance
company may be used for 1 or more of its qualifying insurance
company branches when appropriate.
``(6) Definitions.--For purposes of this subsection, any
term used in this subsection which is also used in section
953(e) shall have the meaning given such term by section
953.''.
(3) Reserves.--Section 953(b) is amended by redesignating
paragraph (3) as paragraph (4) and by inserting after
paragraph (2) the following new paragraph:
``(3) Reserves for any insurance or annuity contract shall
be determined in the same manner as under section 954(i).''.
(c) Special Rules for Dealers.--Section 954(c)(2)(C) is
amended to read as follows:
``(C) Exception for dealers.--Except as provided by
regulations, in the case of a regular dealer in property
which is property described in paragraph (1)(B), forward
contracts, option contracts, or similar financial instruments
(including notional principal contracts and all instruments
referenced to commodities), there shall not be taken into
account in computing foreign personal holding company
income--
``(i) any item of income, gain, deduction, or loss (other
than any item described in subparagraph (A), (E), or (G) of
paragraph (1)) from any transaction (including hedging
transactions) entered into in the ordinary course of such
dealer's trade or business as such a dealer, and
``(ii) if such dealer is a dealer in securities (within the
meaning of section 475), any interest or dividend or
equivalent amount described in subparagraph (E) or (G) of
paragraph (1) from any transaction (including any hedging
transaction or transaction described in section 956(c)(2)(J))
entered into in the ordinary course of such dealer's trade or
business as such a dealer in securities, but only if the
income from the transaction is attributable to activities of
the dealer in the country under the laws of which the dealer
is created or organized (or in the case of a qualified
business unit described in section 989(a), is attributable to
activities of the unit in the country in which the unit both
maintains its principal office and conducts substantial
business activity).''.
(d) Exemption From Foreign Base Company Services Income.--
Paragraph (2) of section 954(e) is amended by inserting
``or'' at the end of subparagraph (A), by striking ``, or''
at the end of subparagraph (B) and inserting a period, by
striking subparagraph (C), and by adding at the end the
following new flush sentence:
``Paragraph (1) shall also not apply to income which is
exempt insurance income (as defined in section 953(e)) or
which is not treated as foreign personal holding income by
reason of subsection (c)(2)(C)(ii), (h), or (i).''.
(e) Exemption for Gain.--Section 954(c)(1)(B)(i) (relating
to net gains from certain property transactions) is amended
by inserting ``other than property which gives rise to income
not treated as foreign personal holding company income by
reason of subsection (h) or (i) for the taxable year'' before
the comma at the end.
SEC. 106. DISCLOSURE OF RETURN INFORMATION ON INCOME
CONTINGENT STUDENT LOANS.
Subparagraph (D) of section 6103(l)(13) (relating to
disclosure of return information to carry out income
contingent repayment of student loans) is amended by striking
``September 30, 1998'' and inserting ``September 30, 2003''.
Subtitle B--Generalized System of Preferences
SEC. 111. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.
(a) Extension of Duty-Free Treatment Under System.--Section
505 of the Trade Act of 1974 (29 U.S.C. 2465) is amended by
striking ``June 30, 1998'' and inserting ``December 31,
1999''.
(b) Retroactive Application for Certain Liquidations and
Reliquidations.--
(1) In general.--Notwithstanding section 514 of the Tariff
Act of 1930 or any other provision of law, and subject to
paragraph (2), any entry--
(A) of an article to which duty-free treatment under title
V of the Trade Act of 1974 would have applied if such title
had been in effect during the period beginning on July 1,
[[Page H10626]]
1998, and ending on the day before the date of the enactment
of this Act; and
(B) that was made after June 30, 1998, and before the date
of the enactment of this Act,
shall be liquidated or reliquidated as free of duty, and the
Secretary of the Treasury shall refund any duty paid with
respect to such entry. As used in this subsection, the term
``entry'' includes a withdrawal from warehouse for
consumption.
(2) Requests.--Liquidation or reliquidation may be made
under paragraph (1) with respect to an entry only if a
request therefor is filed with the Customs Service, within
180 days after the date of the enactment of this Act, that
contains sufficient information to enable the Customs
Service--
(A) to locate the entry; or
(B) to reconstruct the entry if it cannot be located.
TITLE II--OTHER PROVISIONS
SEC. 201. DEPRECIATION STUDY.
The Secretary of the Treasury (or the Secretary's
delegate)--
(1) shall conduct a comprehensive study of the recovery
periods and depreciation methods under section 168 of the
Internal Revenue Code of 1986, and
(2) not later than March 31, 2000, shall submit the results
of such study, together with recommendations for determining
such periods and methods in a more rational manner, to the
Committee on Ways and Means of the House of Representatives
and the Committee on Finance of the Senate.
SEC. 202. PRODUCTION FLEXIBILITY CONTRACT PAYMENTS.
(a) In General.--The options under paragraphs (2) and (3)
of section 112(d) of the Federal Agriculture Improvement and
Reform Act of 1996 (7 U.S.C. 7212(d) (2) and (3)), as in
effect on the date of the enactment of this Act, shall be
disregarded in determining the taxable year for which any
payment under a production flexibility contract under
subtitle B of title I of such Act (as so in effect) is
properly includible in gross income for purposes of the
Internal Revenue Code of 1986.
(b) Effective Date.--Subsection (a) shall apply to taxable
years ending after December 31, 1995.
SEC. 203. 100 PERCENT DEDUCTION FOR HEALTH INSURANCE COSTS OF
SELF-EMPLOYED INDIVIDUALS.
(a) In General.--The table contained in subparagraph (B) of
section 162(l)(1) (relating to special rules for health
insurance costs of self-employed individuals) is amended by
striking the last 3 items and inserting the following new
item:
``2003 and thereafter......................................100.''....
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
1998.
SEC. 204. INCREASE IN VOLUME CAP ON PRIVATE ACTIVITY BONDS.
(a) In General.--Subsection (d) of section 146 (relating to
volume cap) is amended by striking paragraphs (1) and (2) and
inserting the following new paragraphs:
``(1) In general.--The State ceiling applicable to any
State for any calendar year shall be the greater of--
``(A) an amount equal to the per capita limit for such year
multiplied by the State population, or
``(B) the aggregate limit for such year.
Subparagraph (B) shall not apply to any possession of the
United States.
``(2) Per capita limit; aggregate limit.--For purposes of
paragraph (1), the per capita limit, and the aggregate limit,
for any calendar year shall be determined in accordance with
the following table:
1999 through 2002.............. $50 $150,000,000
2003........................... 55 165,000,000
2004........................... 60 180,000,000
2005........................... 65 195,000,000
2006........................... 70 210,000,000
2007 and thereafter............ 75 225,000,000.''
(b) Effective Date.--The amendment made by this section
shall apply to calendar years after 1998.
SEC. 205. MODIFICATION OF ESTIMATED TAX SAFE HARBORS.
(a) In General.--The table contained in clause (i) of
section 6654(d)(1)(C) (relating to limitation on use of
preceding year's tax) is amended by striking the item
relating to 1998, 1999, or 2000 and inserting the following
new items:
``1998.......................................................105 ....
1999 or 2000..............................................106''.....
(b) Effective Date.--The amendment made by this section
shall apply with respect to any installment payment for
taxable years beginning after December 31, 1999.
SEC. 206. EXEMPTION FOR STUDENTS EMPLOYED BY STATE SCHOOLS,
COLLEGES, OR UNIVERSITIES.
(a) In General.--Notwithstanding section 218 of the Social
Security Act, any agreement with a State (or any modification
thereof) entered into pursuant to such section may, at the
option of such State, be modified at any time on or after
January 1, 1999, and on or before March 31, 1999, so as to
exclude service performed in the employ of a school, college,
or university if such service is performed by a student who
is enrolled and is regularly attending classes at such
school, college, or university.
(b) Effective Date of Modification.--Any modification of an
agreement pursuant to subsection (a) shall be effective with
respect to services performed after June 30, 2000.
(c) Irrevocability of Modification.--If any modification of
an agreement pursuant to subsection (a) terminates coverage
with respect to service performed in the employ of a school,
college, or university, by a student who is enrolled and
regularly attending classes at such school, college, or
university, the Commissioner of Social Security and the State
may not thereafter modify such agreement so as to again make
the agreement applicable to such service performed in the
employ of such school, college, or university.
TITLE III--REVENUE OFFSETS
SEC. 301. TREATMENT OF CERTAIN DEDUCTIBLE LIQUIDATING
DISTRIBUTIONS OF REGULATED INVESTMENT COMPANIES
AND REAL ESTATE INVESTMENT TRUSTS.
(a) In General.--Section 332 (relating to complete
liquidations of subsidiaries) is amended by adding at the end
the following new subsection:
``(c) Deductible Liquidating Distributions of Regulated
Investment Companies and Real Estate Investment Trusts.--If a
corporation receives a distribution from a regulated
investment company or a real estate investment trust which is
considered under subsection (b) as being in complete
liquidation of such company or trust, then, notwithstanding
any other provision of this chapter, such corporation shall
recognize and treat as a dividend from such company or trust
an amount equal to the deduction for dividends paid allowable
to such company or trust by reason of such distribution.''.
(b) Conforming Amendments.--
(1) The material preceding paragraph (1) of section 332(b)
is amended by striking ``subsection (a)'' and inserting
``this section''.
(2) Paragraph (1) of section 334(b) is amended by striking
``section 332(a)'' and inserting ``section 332''.
(c) Effective Date.--The amendments made by this section
shall apply to distributions after May 21, 1998.
(d) Assumptions.--In making the estimate required for this
Act by section 252(d)(2) of the Balanced Budget and Emergency
Deficit Control Act of 1985, that part of the estimate that
measures the change in receipts resulting from the amendments
made by this section shall be based on up-to-date economic
and technical assumptions notwithstanding section
252(d)(2)(B) of such Act. All other parts of such estimate
required by such section 252(d)(2) shall be made pursuant to
the requirements of such section 252(d)(2)(B).
SEC. 302. INCLUSION OF ROTAVIRUS GASTROENTERITIS AS A TAXABLE
VACCINE.
(a) In General.--Paragraph (1) of section 4132 (defining
taxable vaccine) is amended by adding at the end the
following new subparagraph:
``(K) Any vaccine against rotavirus gastroenteritis.''.
(b) Effective Date.--
(1) Sales.--The amendment made by this section shall apply
to sales after the date of the enactment of this Act.
(2) Deliveries.--For purposes of paragraph (1), in the case
of sales on or before the date of the enactment of this Act
for which delivery is made after such date, the delivery date
shall be considered the sale date.
SEC. 303. CLARIFICATION AND EXPANSION OF MATHEMATICAL ERROR
ASSESSMENT PROCEDURES.
(a) TIN Deemed Incorrect if Information on Return Differs
With Agency Records.--Paragraph (2) of section 6213(g)
(defining mathematical or clerical error) is amended by
adding at the end the following flush sentence:
``A taxpayer shall be treated as having omitted a correct TIN
for purposes of the preceding sentence if information
provided by the taxpayer on the return with respect to the
individual whose TIN was provided differs from the
information the Secretary obtains from the person issuing the
TIN.''.
(b) Expansion of Mathematical Error Procedures to Cases
Where TIN Establishes Individual Not Eligible for Tax
Credit.--Paragraph (2) of section 6213(g) is amended by
striking ``and'' at the end of subparagraph (J), by striking
the period at the end of the subparagraph (K) and inserting
``, and'', and by inserting after subparagraph (K) the
following new subparagraph:
``(L) the inclusion on a return of a TIN required to be
included on the return under section 21, 24, or 32 if--
``(i) such TIN is of an individual whose age affects the
amount of the credit under such section; and
``(ii) the computation of the credit on the return reflects
the treatment of such individual as being of an age different
from the individual's age based on such TIN.''.
(c) Effective Date.--The amendments made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.
SEC. 304. CLARIFICATION OF DEFINITION OF SPECIFIED LIABILITY
LOSS.
(a) In General.--Subparagraph (B) of section 172(f)(1)
(defining specified liability loss) is amended to read as
follows:
``(B)(i) Any amount allowable as a deduction under this
chapter (other than section 468(a)(1) or 468A(a)) which is in
satisfaction of a liability under a Federal or State law
requiring--
``(I) the reclamation of land;
``(II) the decommissioning of a nuclear power plant (or any
unit thereof);
``(III) the dismantlement of a drilling platform;
[[Page H10627]]
``(IV) the remediation of environmental contamination; or
``(V) a payment under any workers compensation act (within
the meaning of section 461(h)(2)(C)(i)).
``(ii) A liability shall be taken into account under this
subparagraph only if--
``(I) the act (or failure to act) giving rise to such
liability occurs at least 3 years before the beginning of the
taxable year; and
``(II) the taxpayer used an accrual method of accounting
throughout the period or periods during which such act (or
failure to act) occurred.''.
(b) Effective Date.--The amendment made by this section
shall apply to net operating losses arising in taxable years
ending after the date of the enactment of this Act.
TITLE IV--TECHNICAL CORRECTIONS
SEC. 401. DEFINITIONS; COORDINATION WITH OTHER TITLES.
(a) Definitions.--For purposes of this title--
(1) 1986 code.--The term ``1986 Code'' means the Internal
Revenue Code of 1986.
(2) 1998 act.--The term ``1998 Act'' means the Internal
Revenue Service Restructuring and Reform Act of 1998 (Public
Law 105-206).
(3) 1997 act.--The term ``1997 Act'' means the Taxpayer
Relief Act of 1997 (Public Law 105-34).
(b) Coordination With Other Titles.--For purposes of
applying the amendments made by any title of this Act other
than this title, the provisions of this title shall be
treated as having been enacted immediately before the
provisions of such other titles.
SEC. 402. AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE
RESTRUCTURING AND REFORM ACT OF 1998.
(a) Amendment Related to Section 1101 of 1998 Act.--
Paragraph (5) of section 6103(h) of the 1986 Code, as added
by section 1101(b) of the 1998 Act, is redesignated as
paragraph (6).
(b) Amendment Related to Section 3001 of 1998 Act.--
Paragraph (2) of section 7491(a) of the 1986 Code is amended
by adding at the end the following flush sentence:
``Subparagraph (C) shall not apply to any qualified revocable
trust (as defined in section 645(b)(1)) with respect to
liability for tax for any taxable year ending after the date
of the decedent's death and before the applicable date (as
defined in section 645(b)(2)).''.
(c) Amendments Related to Section 3201 of 1998 Act.--
(1) Section 7421(a) of the 1986 Code is amended by striking
``6015(d)'' and inserting ``6015(e)''.
(2) Subparagraph (A) of section 6015(e)(3) is amended by
striking ``of this section'' and inserting ``of subsection
(b) or (f)''.
(d) Amendment Related to Section 3301 of 1998 Act.--
Paragraph (2) of section 3301(c) of the 1998 Act is amended
by striking ``The amendments'' and inserting ``Subject to any
applicable statute of limitation not having expired with
regard to either a tax underpayment or a tax overpayment, the
amendments''.
(e) Amendment Related to Section 3401 of 1998 Act.--Section
3401(c) of the 1998 Act is amended--
(1) in paragraph (1), by striking ``7443(b)'' and inserting
``7443A(b)''; and
(2) in paragraph (2), by striking ``7443(c)'' and inserting
``7443A(c)''.
(f) Amendment Related to Section 3433 of 1998 Act.--Section
7421(a) of the 1986 Code is amended by inserting ``6331(i),''
after ``6246(b),''.
(g) Amendment Related to Section 3467 of 1998 Act.--The
subsection (d) of section 6159 of the 1986 Code relating to
cross reference is redesignated as subsection (e).
(h) Amendment Related to Section 3708 of 1998 Act.--
Subparagraph (A) of section 6103(p)(3) of the 1986 Code is
amended by inserting ``(f)(5),'' after ``(c), (e),''.
(i) Amendments Related to Section 5001 of 1998 Act.--
(1) Subparagraph (B) of section 1(h)(13) of the 1986 Code
is amended by striking ``paragraph (7)(A)'' and inserting
``paragraph (7)(A)(i)''.
(2)(A) Subparagraphs (A)(i)(II), (A)(ii)(II), and (B)(ii)
of section 1(h)(13) of the 1986 Code shall not apply to any
distribution after December 31, 1997, by a regulated
investment company or a real estate investment trust with
respect to--
(i) gains and losses recognized directly by such company or
trust, and
(ii) amounts properly taken into account by such company or
trust by reason of holding (directly or indirectly) an
interest in another such company or trust to the extent that
such subparagraphs did not apply to such other company or
trust with respect to such amounts.
(B) Subparagraph (A) shall not apply to any distribution
which is treated under section 852(b)(7) or 857(b)(8) of the
1986 Code as received on December 31, 1997.
(C) For purposes of subparagraph (A), any amount which is
includible in gross income of its shareholders under section
852(b)(3)(D) or 857(b)(3)(D) of the 1986 Code after December
31, 1997, shall be treated as distributed after such date.
(D)(i) For purposes of subparagraph (A), in the case of a
qualified partnership with respect to which a regulated
investment company meets the holding requirement of clause
(iii)--
(I) the subparagraphs referred to in subparagraph (A) shall
not apply to gains and losses recognized directly by such
partnership for purposes of determining such company's
distributive share of such gains and losses, and
(II) such company's distributive share of such gains and
losses (as so determined) shall be treated as recognized
directly by such company.
The preceding sentence shall apply only if the qualified
partnership provides the company with written documentation
of such distributive share as so determined.
(ii) For purposes of clause (i), the term ``qualified
partnership'' means, with respect to a regulated investment
company, any partnership if--
(I) the partnership is an investment company registered
under the Investment Company Act of 1940,
(II) the regulated investment company is permitted to
invest in such partnership by reason of section 12(d)(1)(E)
of such Act or an exemptive order of the Securities and
Exchange Commission under such section, and
(III) the regulated investment company and the partnership
have the same taxable year.
(iii) A regulated investment company meets the holding
requirement of this clause with respect to a qualified
partnership if (as of January 1, 1998)--
(I) the value of the interests of the regulated investment
company in such partnership is 35 percent or more of the
value of such company's total assets, or
(II) the value of the interests of the regulated investment
company in such partnership and all other qualified
partnerships is 90 percent or more of the value of such
company's total assets.
(3) Paragraph (13) of section 1(h) of the 1986 Code is
amended by adding at the end the following new subparagraph:
``(D) Charitable remainder trusts.--Subparagraphs (A) and
(B)(ii) shall not apply to any capital gain distribution made
by a trust described in section 664.''
(j) Amendment Related to Section 7004 of 1998 Act.--Clause
(i) of section 408A(c)(3)(C) of the 1986 Code, as amended by
section 7004 of the 1998 Act, is amended by striking the
period at the end of subclause (II) and inserting ``, and''.
(k) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the
1998 Act to which they relate.
SEC. 403. AMENDMENTS RELATED TO TAXPAYER RELIEF ACT OF 1997.
(a) Amendments Related to Section 202 of 1997 Act.--
(1) Paragraph (2) of section 163(h) of the 1986 Code is
amended by striking ``and'' at the end of subparagraph (D),
by striking the period at the end of subparagraph (E) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(F) any interest allowable as a deduction under section
221 (relating to interest on educational loans).''
(2)(A) Subparagraph (C) of section 221(b)(2) of the 1986
Code is amended--
(i) by striking ``135, 137,'' in clause (i),
(ii) by inserting ``135, 137,'' after ``sections 86,'' in
clause (ii), and
(iii) by striking the last sentence.
(B) Sections 86(b)(2)(A), 135(c)(4)(A), and
219(g)(3)(A)(ii) of the 1986 Code are each amended by
inserting ``221,'' after ``137,''.
(C) Subparagraph (A) of section 137(b)(3) of the 1986 Code
is amended by inserting ``221,'' before ``911,''.
(D) Clause (iii) of section 469(i)(3)(E) of the 1986 Code
is amended to read as follows:
``(iii) the amounts allowable as a deduction under sections
219 and 221, and''.
(3) The last sentence of section 221(e)(1) of the 1986 Code
is amended by inserting before the period ``or to any person
by reason of a loan under any qualified employer plan (as
defined in section 72(p)(4)) or under any contract referred
to in section 72(p)(5)''.
(b) Provision Related to Section 311 of 1997 Act.--In the
case of any capital gain distribution made after 1997 by a
trust to which section 664 of the 1986 Code applies with
respect to amounts properly taken into account by such trust
during 1997, paragraphs (5)(A)(i)(I), (5)(A)(ii)(I), and
(13)(A) of section 1(h) of the 1986 Code (as in effect for
taxable years ending on December 31, 1997) shall not apply.
(c) Amendment Related to Section 506 of 1997 Act.--Section
2001(f)(2) of the 1986 Code is amended by adding at the end
the following:
``For purposes of subparagraph (A), the value of an item
shall be treated as shown on a return if the item is
disclosed in the return, or in a statement attached to the
return, in a manner adequate to apprise the Secretary of the
nature of such item.''.
(d) Amendments Related to Section 904 of 1997 Act.--
(1) Paragraph (1) of section 9510(c) of the 1986 Code is
amended to read as follows:
``(1) In general.--Amounts in the Vaccine Injury
Compensation Trust Fund shall be available, as provided in
appropriation Acts, only for--
``(A) the payment of compensation under subtitle 2 of title
XXI of the Public Health Service Act (as in effect on August
5, 1997) for vaccine-related injury or death with respect to
any vaccine--
``(i) which is administered after September 30, 1988, and
``(ii) which is a taxable vaccine (as defined in section
4132(a)(1)) at the time compensation is paid under such
subtitle 2, or
``(B) the payment of all expenses of administration (but
not in excess of $9,500,000 for any fiscal year) incurred by
the Federal Government in administering such subtitle.''.
[[Page H10628]]
(2) Section 9510(b) of the 1986 Code is amended by adding
at the end the following new paragraph:
``(3) Limitation on transfers to vaccine injury
compensation trust fund.--No amount may be appropriated to
the Vaccine Injury Compensation Trust Fund on and after the
date of any expenditure from the Trust Fund which is not
permitted by this section. The determination of whether an
expenditure is so permitted shall be made without regard to--
``(A) any provision of law which is not contained or
referenced in this title or in a revenue Act, and
``(B) whether such provision of law is a subsequently
enacted provision or directly or indirectly seeks to waive
the application of this paragraph.''.
(e) Amendments Related to Section 915 of 1997 Act.--
(1) Section 915 of the 1997 Act is amended--
(A) in subsection (b), by inserting ``or 1998'' after
``1997'', and
(B) by amending subsection (d) to read as follows:
``(d) Effective Date.--This section shall apply to taxable
years ending with or within calendar year 1997.''.
(2) Paragraph (2) of section 6404(h) of the 1986 Code is
amended by inserting ``Robert T. Stafford'' before
``Disaster''.
(f) Amendments Related to Section 1012 of 1997 Act.--
(1) Paragraph (2) of section 351(c) of the 1986 Code, as
amended by section 6010(c) of the 1998 Act, is amended by
inserting ``, or the fact that the corporation whose stock
was distributed issues additional stock,'' after ``dispose of
part or all of the distributed stock''.
(2) Clause (ii) of section 368(a)(2)(H) of the 1986 Code,
as amended by section 6010(c) of the 1998 Act, is amended by
inserting ``, or the fact that the corporation whose stock
was distributed issues additional stock,'' after ``dispose of
part or all of the distributed stock''.
(g) Provision Related to Section 1042 of 1997 Act.--Rules
similar to the rules of section 1.1502-75(d)(5) of the
Treasury Regulations shall apply with respect to any
organization described in section 1042(b) of the 1997 Act.
(h) Amendment Related to Section 1082 of 1997 Act.--
Subparagraph (F) of section 172(b)(1) of the 1986 Code is
amended by adding at the end the following new clause:
``(iv) Coordination with paragraph (2).--For purposes of
applying paragraph (2), an eligible loss for any taxable year
shall be treated in a manner similar to the manner in which a
specified liability loss is treated.''
(i) Amendment Related to Section 1084 of 1997 Act.--
Paragraph (3) of section 264(f) of the 1986 Code is amended
by adding at the end the following flush sentence:
``If the amount described in subparagraph (A) with respect to
any policy or contract does not reasonably approximate its
actual value, the amount taken into account under
subparagraph (A) shall be the greater of the amount of the
insurance company liability or the insurance company reserve
with respect to such policy or contract (as determined for
purposes of the annual statement approved by the National
Association of Insurance Commissioners) or shall be such
other amount as is determined by the Secretary.''
(j) Amendment Related to Section 1175 of 1997 Act.--
Subparagraph (C) of section 954(e)(2) of the 1986 Code is
amended by striking ``subsection (h)(8)'' and inserting
``subsection (h)(9)''.
(k) Amendment Related to Section 1205 of 1997 Act.--
Paragraph (2) of section 6311(d) of the 1986 Code is amended
by striking ``under such contracts'' in the last sentence and
inserting ``under any such contract for the use of credit,
debit, or charge cards for the payment of taxes imposed by
subtitle A''.
(l) Effective Date.--The amendments made by this section
shall take effect as if included in the provisions of the
1997 Act to which they relate.
SEC. 404. AMENDMENTS RELATED TO TAX REFORM ACT OF 1984.
(a) In General.--Subparagraph (C) of section 172(d)(4) of
the 1986 Code is amended to read as follows:
``(C) any deduction for casualty or theft losses allowable
under paragraph (2) or (3) of section 165(c) shall be treated
as attributable to the trade or business; and''.
(b) Conforming Amendments.--
(1) Paragraph (3) of section 67(b) of the 1986 Code is
amended by striking ``for losses described in subsection
(c)(3) or (d) of section 165'' and inserting ``for casualty
or theft losses described in paragraph (2) or (3) of section
165(c) or for losses described in section 165(d)''.
(2) Paragraph (3) of section 68(c) of the 1986 Code is
amended by striking ``for losses described in subsection
(c)(3) or (d) of section 165'' and inserting ``for casualty
or theft losses described in paragraph (2) or (3) of section
165(c) or for losses described in section 165(d)''.
(3) Paragraph (1) of section 873(b) is amended to read as
follows:
``(1) Losses.--The deduction allowed by section 165 for
casualty or theft losses described in paragraph (2) or (3) of
section 165(c), but only if the loss is of property located
within the United States.''
(c) Effective Dates.--
(1) The amendments made by subsections (a) and (b)(3) shall
apply to taxable years beginning after December 31, 1983.
(2) The amendment made by subsection (b)(1) shall apply to
taxable years beginning after December 31, 1986.
(3) The amendment made by subsection (b)(2) shall apply to
taxable years beginning after December 31, 1990.
SEC. 405. OTHER AMENDMENTS.
(a) Amendments Related to Section 6103 of 1986 Code.--
(1) Subsection (j) of section 6103 of the 1986 Code is
amended by adding at the end the following new paragraph:
``(5) Department of agriculture.--Upon request in writing
by the Secretary of Agriculture, the Secretary shall furnish
such returns, or return information reflected thereon, as the
Secretary may prescribe by regulation to officers and
employees of the Department of Agriculture whose official
duties require access to such returns or information for the
purpose of, but only to the extent necessary in, structuring,
preparing, and conducting the census of agriculture pursuant
to the Census of Agriculture Act of 1997 (Public Law 105-
113).''.
(2) Paragraph (4) of section 6103(p) of the 1986 Code is
amended by striking ``(j)(1) or (2)'' in the material
preceding subparagraph (A) and in subparagraph (F) and
inserting ``(j)(1), (2), or (5)''.
(3) The amendments made by this subsection shall apply to
requests made on or after the date of the enactment of this
Act.
(b) Amendment Related to Section 9004 of Transportation
Equity Act for the 21st Century.--
(1) Paragraph (2) of section 9503(f) of the 1986 Code is
amended to read as follows:
``(2) notwithstanding section 9602(b), obligations held by
such Fund after September 30, 1998, shall be obligations of
the United States which are not interest-bearing.''
(2) The amendment made by paragraph (1) shall take effect
on October 1, 1998.
(c) Amendment Related to Treasury and General Government
Appropriations Act, 1999.--
(1) The Treasury and General Government Appropriations Act,
1999 is amended by striking section 804 (relating to
technical and clarifying amendments relating to judicial
retirement program).
(2) The amendment made by paragraph (1) shall take effect
as if such section 804 had never been enacted.
(d) Clerical Amendments.--
(1) Clause (i) of section 51(d)(6)(B) of the 1986 Code is
amended by striking ``rehabilitation plan'' and inserting
``plan for employment''. The reference to ``plan for
employment'' in such clause shall be treated as including a
reference to the rehabilitation plan referred to in such
clause as in effect before the amendment made by the
preceding sentence.
(2) Paragraph (3) of section 56(a) of the 1986 Code is
amended by striking ``section 460(b)(2)'' and inserting
``section 460(b)(1)'' and by striking ``section 460(b)(4)''
and inserting ``section 460(b)(3)''.
(3) Paragraph (10) of section 2031(c) of the 1986 Code is
amended by striking ``section 2033A(e)(3)'' and inserting
``section 2057(e)(3)''.
(4) Subparagraphs (C) and (D) of section 6693(a)(2) of the
1986 Code are each amended by striking ``Section'' and
inserting ``section''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Archer) and the gentleman from New York (Mr. Rangel) each
will control 20 minutes.
The Chair recognizes the gentleman from Texas (Mr. Archer).
General Leave
Mr. ARCHER. Madam Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on H.R. 4738, as amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. ARCHER. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, the plan before us today does three principal things:
It extends a series of tax relief provisions to help businesses create
jobs; it helps people coming off of welfare as well as other hard to
place workers to get jobs; and it includes three provisions to help
farmers and ranchers who have been hard hit by tough times.
This plan gives farmers and other small business owners 100 percent
deduction for their health insurance costs in the year 2003, four years
earlier than current law.
I am particularly pleased about two other agricultural provisions.
The bill lets farmers benefit from permanent income averaging, and the
other provision protects family farmers from having to pay tax on farm
program payments that have not actually been received in the year.
Due to the importance of this non-controversial bill, I hope and
expect that it will be passed in the Senate so it can be signed into
law.
[[Page H10629]]
I thank the Members who suggested ideas that are included in the
plan, and I thank the minority for their cooperation in expediting
consideration of the bill on the floor today.
Madam Speaker, I reserve the balance of my time.
Mr. RANGEL. Madam Speaker, I yield myself such time as I may consume.
Madam Speaker, I rise in support of the bill before us today. It
should have been before this House a long time ago. Provisions such as
the research tax credit and work opportunity tax credit should have
been extended. A lot of people have depended on it.
We Democrats have agreed not to offer any amendments because we
believe to do so would have delayed the enactment of this very
important legislation.
However, in other circumstances there would have been several
amendments that we would have proposed. On October 1st of this year,
the temporary increase in the rum carry-over provision expired. Failure
to extend that temporary increase will have adverse consequences to
Puerto Rico and the Virgin Islands. I am very disappointed that we are
not able to extend that temporary increase in this bill.
Extensions of my qualified zone academy zone program would have been
a big step in addressing the large need of school construction and
modernization. The provision previously adopted by the House that
liberalized the arbitrage rules for school construction bond would do
little to meet school construction needs.
I am also disappointed that the bill does not extend the welfare to
work credit. It expires at the end of April of next year, and
realistically there is little prospect for enacting a timely extension
next year.
There is also broad bipartisan support on this committee for an
increase in the low income housing tax credit program. There is no
reason why we should not have been able to do that in the context of
this legislation. Next year American families with children will be
faced with extraordinary complex rules when claiming the child credit
enacted last year. There is no justification for the complexity of
those rules and this committee should have adopted the legislation of
the gentleman from Massachusetts (Mr. Neal) that would waive in tax
year 1998 the minimum tax limitation on the child credit.
I do not understand why reauthorization of the trade adjustment
assistance program for workers and firms which terminated on September
3 was not included in this package.
The Senate has a different version of this legislation, and I think
the other body's version is far superior to what we have to today, but
in particular I support the extension of trade adjustment assistance
and the minimum tax waiver contained in the other body's version. I am
hopeful that disagreements over the detail of this legislation will not
endanger its enactment.
Madam Speaker, I reserve the balance of my time.
Mr. ARCHER. Madam Speaker, I yield such time as he may consume to the
gentleman from Louisiana (Mr. McCrery).
(Mr. McCRERY asked and was given permission to revise and extend his
remarks.)
Mr. McCRERY. Madam Speaker, I rise in support of this tax bill.
Madam Speaker, I commend Chairman Archer on the inclusion in this
bill of the provision to modify and extend the present law treatment of
active financial services income under Subpart F of the Internal
Revenue Code. The provision permits U.S.-based finance companies,
insurance companies banks, securities dealers, and other financial
services firms to act like other U.S. industries doing business abroad
and defer U.S. tax on the earnings from the active operations of their
foreign subsidiaries until such earnings are returned to the U.S.
parent company.
In particular, I commend Chairman Archer and his staff for the
resolution of two questions relating to the interaction of this subpart
F provision. The first deals with active financial services income and
the ability of the U.S. financial services industry to use so-called
hybrid arrangements and other techniques to reduce their foreign taxes.
The second clarifies whether the subpart F provision will work as
intended if the Treasury Department fails to make current, effective
conforming changes to existing regulations, such as the exception for
same-country dividends and interest.
Additionally, I understand that the provision to modify and extend
the present law treatment of active financial services income under
Subpart F contemplates that the Treasury Department will make current
effective conforming changes to existing regulations that do not take
account the exception provided by the provision. As an example, it is
intended that debt instruments held by a U.S.-controlled foreign
corporation, the income from which qualifies for the treatment provided
by the bill, will be considered to be assets used in a trade or
business for purposes of the regulatory requirements under the
exception for same-country dividends and interest.
There clarifications are necessary because in January of this year,
the Treasury Department issued Notice 98-11, attacking the use of
hybrid arrangements to reduce the foreign taxes of U.S.-owned foreign
companies. Chairman Archer, along with a bipartisan majority of the
Ways and Means Committee, strongly opposed the Treasury Department's
action on Notice 98-11. In response to the concerns raised by Chairman
Archer, in June of this year, the Treasury Department issued Notice 98-
35, the purpose of which was ``to allow Congress an appropriate period
to review the important policy issues raised . . . and if appropriate
address the issues by legislation.'' Notice 98-35 also anticipated, and
explicitly provided for, the use of hybrid arrangements to reduce
foreign taxes with respect to financial services income, and provided
specific rules for this application during the interim.
I am very pleased that the provision modifying and extending the
subpart F exception for active financial services income was carefully
drafted so that nothing in the provision would authorize or allow the
exception to be denied because a hybrid arrangement, or any other
technique available under foreign law, is used to reduce foreign tax.
Mr. RANGEL. Madam Speaker, I yield 2 minutes to the gentleman from
Maryland (Mr. Cardin).
Mr. CARDIN. Madam Speaker, first let me thank my friend from New York
and my friend from Texas for bringing this matter to the floor. I
strongly support the bill before us.
Principally let me say that this bill provides some relief to people
that are needed and it provides some help to businesses. It is a good
bill and it is paid for. It will not violate our commitment to preserve
all of the surplus until we have come up with a plan to save Social
Security. So this is a bill that I believe will enjoy broad support in
this House because it does good things and it is totally paid for.
As the chairman pointed out, it accelerates the self-employed health
insurance benefits. That is good. On both sides of the aisle we have
been trying to help self-employed people by making it easier for them
to provide health benefits to their employees.
It extends expiring tax provisions, the research tax credit, very
important for this Nation for research and development as well as the
work opportunity tax credit, which is used to help people find
employment, which will be very difficult otherwise. It has been a very
successful program and this bill extends that program. Contributions to
private foundations of appreciated property, we make that permanent.
That will help private foundations in their efforts to carry out their
charitable activities.
As the chairman pointed out, there are very good provisions in here
for farmers, including income averaging, ones that are generally
supported.
One additional provision I would like to compliment the chairman for
including deals with private activity bond caps. By raising those caps,
we are going to help state and local governments in dealing with a lot
of the infrastructure needs of this country. It is a good provision.
The provisions in here are all good, they are paid for, and I urge my
colleagues to support them. I join with the ranking member in my
disappointment that we do not have other provisions that should be
included in a tax bill before we adjourn, and hopefully we will be able
to work out some additional provisions before Congress adjourns this
year.
Mr. RANGEL. Madam Speaker, I yield 5 minutes to the gentleman from
Massachusetts (Mr. Neal).
(Mr. NEAl of Massachusetts asked and was given permission to revise
and extend his remarks.)
Mr. NEAL of Massachusetts. Madam Speaker, I want to thank first of
all the gentleman from New York (Mr. Rangel) and the gentleman from
Texas (Mr. Archer) for bringing this bill to the floor. I believe that,
by and large, this is a very good piece of legislation.
[[Page H10630]]
{time} 1745
I support extension of the expiring provisions, and I am pleased that
we will have this chance today to ensure that these provisions do not
expire and that there will be no lapse in these valuable tax credits.
The Research Experimentation Credit is important to Massachusetts.
Massachusetts is the home of many high-tech companies and universities
that develop technology. The research tax credit inspires the
development of technology, which leads to both economic and job growth.
The work opportunity tax credit plays a vital role in helping
individuals move from welfare to work. This credit is a valuable
program that enables many individuals to become self-sufficient. The
program has been effective, and it should indeed be continued.
Madam Speaker, there is one provision I believe, however, that should
have been included in this legislation. Recently I have introduced
legislation, H.R. 4611, which provides a temporary waiver for the
taxable year 1998 of minimum tax rules that deny many families the full
amount of the nonrefundable personal credit such as the child tax
credit and the HOPE and lifetime learning credits.
The Senate finance package included this provision in their extenders
bill. I commend them for addressing this important issue, and I hope
that we will seriously consider accepting this provision from the
Senate.
The Senate bill strikes the appropriate balance between families and
business. The House bill addresses important issues, but the Senate
bill, I believe, goes further in including an extremely important
provision for families, temporary relief from the interaction of the
minimum tax with the child tax credit.
Without this fix, all families who claim the child credit with
incomes above $45,000 for joint filers and $33,750 for single filers
will be required to make some sort of minimum tax calculation. The
minimum tax is not only complicated, it can penalize middle income
taxpayers who claim the new personal tax credits.
The Department of Treasury estimates that, in 1998, the alternative
minimum tax will deny 800,000 taxpayers who are entitled to both the
child tax credit and the education tax credit the full benefits of
these credits.
Without enactment of legislation to address this issue, taxpayers who
are planning to claim the child credit should be warned that the
computation of their taxes will be difficult, time consuming and, I
believe, unnecessarily complex. Without simplifying the child tax
credit, the child tax credit form that will be required on next year's
tax filing will become a nightmare.
Madam Speaker, it is a shame that we did not address this issue in
this bill today. The Joint Committee on Taxation estimates that a 1-
year solution for taxable year 1998 would cost $474 million. But by not
addressing the interaction of minimum tax with nonrefundable personal
credits, many families will be cheated of the credits that we, indeed,
promised them. The average family will have to pay a tax return
preparer in order to fill out forms for these new credits.
Let me also share a quote with my colleagues from a letter that I
witnessed today from the editor of Tax Notes, Mr. Christopher Bergin.
He says,
Apparently, few of us Washington types are surprised that
the basis of the bill Republican leaders were trying to build
at the last minute is a package extending expiring provisions
that help mostly business or rich people who like to name
foundations after themselves. But House leaders are taking
the chance that those outside of Washington, the average
taxpayers, may figure out that their congressional
representatives did not have time to prevent the alternative
minimum tax from eating their child credits because they were
too busy taking care of multinational financial
intermediaries.
I disagree with part of what was stated, but I also believe that we
should have taken up this issue, and I hope that we will do so in the
near future.
I have introduced a permanent solution this year, and I hope that we
will give families the opportunity that we stated just a short time
ago, and I hope that we will not bury them in their tax forms come
1999.
I also thank the gentleman from Texas (Mr. Archer) and the gentleman
from New York (Mr. Rangel) once again for getting this bill to the
floor. By and large, it is a very good piece of legislation.
Madam Speaker, I support extension of the expiring tax provisions.
Unfortunately, this was a very small bill whose main purpose was to
extend the expiring provisions. Other valuable provisions were not able
to be included. I would like to briefly mention a provision that was
included in the House-passed version of the Taxpayer Relief Act of
1997, but it was not enacted because it was not included in the
conference agreement.
This provision clarifies the tax treatment of the state-mandated
consolidation of mutual savings bank life insurance departments.
Savings Bank Life Insurance is unique to the three States of New York,
Connecticut, and Massachusetts. Last year with the help of Chairman
Archer, the House addressed this issue.
This provision clarifies the tax treatment of a 12-year dividends
payout associated with a state-mandated consolidation by treating it as
a deductible policyholder dividend rather than a non-deductible
redemption of equity. This provision is extremely important to
Massachusetts because in 1990, the State legislature consolidated the
State's saving bank life insurance departments into a new non-public
stock company, while still providing for the sale of its products
through these State banking institutions. New York and Connecticut may
follow the consolidation approach taken by Massachusetts.
I am enclosing a letter to Chairman Archer thanking him for his
assistance on this issue. I look forward to bringing closure to this
issue next Congress.
Congress of the United States,
House of Representatives,
Washington, DC, October 8, 1998.
Hon. Chairman Bill Archer,
Chairman, Committee on Ways and Means,
Longworth HOB, Washington, DC.
Dear Chairman Archer: I am writing to thank you for your
continued support for a provision that addresses potential
adverse consequences for Savings Bank Life Insurance (SBLI)
institutions that are unique to the three states of New York,
Connecticut, and Massachusetts. Last year with your
invaluable assistance, a provision was included in the House
passed Taxpayer Relief Act of 1997, but it was not enacted
because it was not included in the conference agreement for
that legislation. The provision would clarify the tax
treatment of the state-mandated consolidation of mutual
savings banks' life insurance departments.
More specifically, the provision would clarify how the
Internal Revenue Code of 1986 should treat certain
policyholder dividends mandated by the Massachusetts State
Legislature in 1990. This legislation consolidated the
state's saving bank life insurance departments into a new
non-public stock company, while still providing for the sale
of its products through these state banking institutions.
Because of the IRS's interpretation of current law, it is
essential that Congress clarify that the 12-year dividends
payout associated with this consolidation should be treated
as a deductible policyholder dividend rather than a non-
deductible redemption of equity.
While only the Savings Bank Life Insurance Company of
Massachusetts will be affected by the IRS's current
interpretation of the Code, the SBLI industries in both New
York and Connecticut may be adversely affected if the Code is
not properly clarified because they may follow the
consolidation approach taken by Massachusetts.
Once again, Mr. Chairman thank you for your assistance. I
look forward to working with you on this issue next Congress.
Sincerely,
Richard E. Neal,
Member of Congress.
Mr. ARCHER. Madam Speaker, I yield myself such time as I may consume.
I would simply to respond to the gentleman from Massachusetts on the
issue of removing from the alternative minimum tax formula many of the
nonrefundable credits that would help higher middle income people.
The gentleman I am surprised would make the statement that he made,
because we not only have considered that, it was part of the tax bill
that passed the House of Representatives and made permanent in that
bill, and that bill is currently over in the Senate being held up by
the minority that refuses to let it pass cloture and be adopted.
So that provision not only takes care of 1998 but takes care of all
succeeding years, because it is a permanent provision in the law. I am
sure the gentleman did not mean to imply that we had been callous
relative to that issue this year, because we certainly have not.
Madam Speaker, I reserve the balance of my time.
Mr. RANGEL. Madam Speaker, I yield 3 minutes to the gentlewoman from
Michigan (Ms. Stabenow).
[[Page H10631]]
Ms. STABENOW. Madam Speaker, I would first like to commend the
leadership of the Committee on Ways and Means for this bill. There are
some very, very important provisions in this bill that will certainly
help the people that I represent in Michigan.
I would like to highlight just a couple of those of particular
significance. One is the permanent extension of income-averaging for
farmers. I was pleased the day that I was sworn into the 105th
Congress, along with my friend and colleague from Michigan, Nick Smith,
to be cosponsoring legislation to provide a permanent extension of
income-averaging for farmers, and I am very pleased to see this in this
legislation, as am I pleased to see the permanent extension of the
current provisions regarding contributions for private foundation.
I also think it is very important that we have accelerated the
deduction for health care for self-employed individuals. I would only
ask that, as we move forward, that instead of continuing to extend the
research tax credit year-by-year, that we seriously consider and, in
fact, in the coming year, if not in this bill, permanently extend the
research tax credit so that those involved in the critical long-term
research efforts of this country know and can plan for the long term as
they make decisions that will create jobs for American workers and
important new discoveries for Americans.
Madam Speaker, I have twice authored in the last 2 years letters to
the President and to my colleagues urging that we adopt a permanent
extension of the research tax credit. Over 140 Members of this House
have signed those letters, and I notice that as we debate the question
of the advanced technology program and other programs where Members
have indicated that they believe that the private sector should be
taking the leadership in research efforts, long-term, risky research
efforts for the country, that, as we do that, we send a mixed message
when we, in fact, do not permanently extend the research tax credit for
our country.
So I would urge that, as we move forward, that we make that permanent
extension a top priority.
Mr. RANGEL. Madam Speaker, I yield back the balance of my time.
Mr. ARCHER. Madam Speaker, I include for the Record at this point the
final revenue table for the bill.
ESTIMATED BUDGET EFFECTS OF H.R. 4738, THE ``REVENUE EXTENSION ACT OF 1998,'' TO BE CONSIDERED UNDER SUSPENSION ON THE HOUSE FLOOR--FISCAL YEARS
[In millions of dollars]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Provision Effective 1999 2000 2001 2002 2003 2004 2005 2006 2007 1999-02 2003-07 1999-07
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1. Extension of Expiring Provisions:
A. Extending the R&E Credit 7/1/98................ -1,526 -866 -409 -296 -170 -39 ......... ......... ......... -3,907 -209 -3,306
(through 12/31/99).
B. Extend Work Opportunity Tax wpoifibwa 6/30/98..... -245 -227 -126 -50 -18 -3 ......... ......... ......... -648 -21 -669
Credit (through 12/31/99).
C. Extend Contributions of 7/1/98 \1\............ -23 -56 -71 -83 -91 -95 -100 -104 -109 -233 -499 -732
Appreciated Stock to Private
Foundations (permanent); Public
Inspection of Private
Foundation Annual Returns.
D. 1-Year Modified Extension of tybi 1999............. -117 -378 ......... ......... ......... ......... ......... ......... ......... -495 ......... -495
Exemption from Subpart F for
Active Financing Income (as in
H.R. 4579).
E. Extend the Generalized System 7/1/98................ -393 -84 ......... ......... ......... ......... ......... ......... ......... -477 ......... -477
of Preferences (through 12/31/
88) \2\.
F. Permanent Extension of Income tyba 12/31/00......... ......... ......... -2 -21 -22 -22 -23 -24 -24 -23 -115 -138
Averaging for Farmers.
G. Extension of Tex Information 10/1/98............... Negligible Budget Effect
Reporting for Income Contingent
Student Loan Program \2\.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal of Extension of ...................... -2,304 -1,611 -608 -450 -301 -159 -123 -128 -133 -4,973 -844 -5,817
Expiring Provisions.
II. Other Provisions:
A. Treasury Study on ...................... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
Depreciation (due 3/31/00).
B. Production Flexibility tyea 12/31/95......... Negligible Revenue Effect
Contract Payments to Farmers
Not Included in Income Prior to
Receipt.
C. Self-Employed Health tyba 12/31/02......... ......... ......... ......... ......... -206 -637 -680 -602 -257 ......... -2,382 -2,382
Insurance Deduction--100% in
2003 and thereafter.
D. Increase Private Activity 1/1/03................ ......... ......... ......... ......... -11 -44 -111 -177 -252 ......... -595 -595
Bond Volume Cap to the Greater
of $55 Per Capita or $165
Million Starting in 2003;
Phased in Ratably to the
Greater of $75 Million Per
Capita or $225 million in 2007.
E. Prior Year Estimated Tax Safe tyba 12/31/99......... ......... 525 ......... -525 ......... ......... ......... ......... ......... ......... ......... .........
Harbor for Individuals With AGI
over $150,000 (106% in 2000 and
2001).
F. State Election to Exempt spa 6/30/00........... ......... -5 -47 -49 -51 -52 -54 -56 -58 -101 -271 -372
Student Employees From Social
Security \2\.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal of Other Provisions ...................... ......... 520 -47 -574 -268 -733 -845 -835 -567 -101 -3,248 -3,349
III. Revenue Offset Provision:
A. Change the Treatment of dma 5/21/98........... 2,425 1,109 723 640 672 705 741 778 817 4,897 3,713 8,610
Certain Deductible Liquidating
Distributions of RICs and REITs.
B. Add Vaccines Against vpa DOE............... 1 2 3 4 5 6 6 6 7 11 31 42
Rotavirus Gastroenteritis to
the List of Taxable Vaccines
($0.75 per dose).
C. Clarify and Expand Math Error tyea DOE.............. 12 25 26 27 28 29 30 31 32 90 150 240
Procedures.
D. Restrict Special Net NOLgi tyea DOE........ 14 21 29 39 42 40 40 40 42 103 204 308
Operating Loss Carryback Rules
for Specified Liability Losses.
-----------------------------------------------------------------------------------------------------------------------------------------------------------
Subtotal of Revenue Offset ...................... 2,452 1,157 781 710 747 780 817 855 898 5,101 4,098 9,200
Provisions.
IV. Tax Technical Corrections ...................... No Revenue Effect
Provisions.
===========================================================================================================================================================
Net Total............... ...................... 148 66 126 -314 178 -112 -151 -108 198 27 6 34
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
SOURCE: Joint Committee on Taxation.
NOTE: Details may not add to totals due to rounding.
Legend for ``Effective column: dma=distributions made after; DOE=date of enactment; NOLgi=net operating losses generated in; spa=services performed after; tyba=taxable years begining after;
tybi=taxable years beginning in; tyea=taxable years ending after; vpa=vaccines purchased after; wpoifibwa=wages paid or incurred for individuals beginning work after.
\1\ The additional public inspection provisions apply to requests made after the later of the date which is 60 days after the date on which the Treasury Department publishes regulations or 12/
31/98.
\2\ Estimate provided by the Congressional Budget Office.
Mr. SMITH of Oregon. Madam Speaker, I appreciate the opportunity to
rise once again in support of tax relief for America's farmers and
ranchers. Regrettably, even though Chairman Archer's laudatory efforts
recently to provide substantial tax relief to our agricultural
producers, small businessmen, and families will not move forward, the
American people now understand which party is for lower taxes and sound
tax policy.
Today, Chairman Archer brings to the floor a scaled-down package of
Tax Code extensions, which appear to enjoy the support of Congress and
the administration. I regret we cannot do more; but I applaud the Ways
and Means Committee for not giving up on the American people.
Making income averaging permanent provides U.S. farmers and ranchers
a useful tool they may use to even out their tax liabilities from one
year to the next. In agriculture, and
[[Page H10632]]
especially in light of the current crisis, this significantly mitigates
the economic hazards of farming and ranching.
The bill also accelerates the phase-in of the health insurance
deduction that will be extremely helpful to farmers and other self-
employed people and their families. The full deduction will be realized
in 2003.
Finally, Madam Speaker, this bill assists agricultural producers in
meeting their tax obligations under the Agricultural Market Transition
Act (AMTA) of the 1996 farm bill. Congress already has provided the
USDA with authority to speed up AMTA payments, which will help many
farmers this year, and with this bill, these payments will receive an
appropriate tax treatment.
This is a good bill. It will be helpful to American agriculture, and
it is the very least we can do. I urge all my colleagues will vote for
it.
Mr. ARCHER. Madam Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Texas (Mr. Archer) that the House suspend the rules and
pass the bill, H.R. 4738, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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