[Congressional Record Volume 156, Number 122 (Monday, September 13, 2010)]
[Senate]
[Pages S7042-S7044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCONNELL (for himself, Mr. Grassley, Mr. Kyl, Mr. McCain, 
        Mr. Cochran, Mr. Graham, Mr. Roberts, Mr. Cornyn, Mr. Inhofe, 
        Mr. Ensign, Mr. Isakson, Mr. Brownback, Mr. Enzi, Mr. Crapo, 
        Mr. Burr, Mr. Vitter, Mr. Wicker, Mr. Chambliss, Mr. Bond, Mrs. 
        Hutchison, and Mr. Hatch):
  S. 3773. A bill to permanently extend the 2001 and 2003 tax relief 
provisions and to provide permanent AMT relief and estate tax relief, 
and for other purposes; read the first time.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 3773

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Tax Hike Prevention Act of 
     2010''.

                     TITLE I--PERMANENT TAX RELIEF

     SEC. 101. 2001 TAX RELIEF MADE PERMANENT.

       Title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is repealed.

     SEC. 102. 2003 TAX RELIEF MADE PERMANENT.

       Section 303 of the Jobs and Growth Tax Relief 
     Reconciliation Act of 2003 is repealed.

     SEC. 103. TECHNICAL AND CONFORMING AMENDMENTS.

       The Secretary of the Treasury or the Secretary's delegate 
     shall not later than 90 days after the date of the enactment 
     of this Act, submit to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate a draft of any technical and conforming changes in the 
     Internal Revenue Code of 1986 which are necessary to reflect 
     throughout such Code the purposes of the provisions of, and 
     amendments made by, this Act.

               TITLE II--PERMANENT INDIVIDUAL AMT RELIEF

     SEC. 201. PERMANENT INDIVIDUAL AMT RELIEF.

       (a) Modification of Alternative Minimum Tax Exemption 
     Amount.--
       (1) In general.--Paragraph (1) of section 55(d) of the 
     Internal Revenue Code of 1986 (relating to exemption amount) 
     is amended to read as follows:
       ``(1) Exemption amount for taxpayers other than 
     corporations.--In the case of a taxpayer other than a 
     corporation, the term `exemption amount' means--
       ``(A) the dollar amount for taxable years beginning in the 
     calendar year as specified in the table contained in 
     paragraph (4)(A) in the case of--
       ``(i) a joint return, or
       ``(ii) a surviving spouse,
       ``(B) the dollar amount for taxable years beginning in the 
     calendar year as specified in the table contained in 
     paragraph (4)(B) in the case of an individual who--
       ``(i) is not a married individual, and
       ``(ii) is not a surviving spouse,
       ``(C) 50 percent of the dollar amount applicable under 
     paragraph (1)(A) in the case of a married individual who 
     files a separate return, and
       ``(D) $22,500 in the case of an estate or trust.

     For purposes of this paragraph, the term `surviving spouse' 
     has the meaning given to such term by section 2(a), and 
     marital status shall be determined under section 7703.''.
       (2) Specified exemption amounts.--Section 55(d) of such 
     Code is amended by adding at the end the following new 
     paragraph:
       ``(4) Specified exemption amounts.--
       ``(A) Taxpayers described in paragraph (1)(A).--For 
     purposes of paragraph (1)(A)--


------------------------------------------------------------------------
                                                                 The
             ``For taxable years beginning in--               exemption
                                                              amount is:
------------------------------------------------------------------------
2010.......................................................      $72,450
2011.......................................................      $74,450
2012.......................................................      $78,250
2013.......................................................      $81,450
2014.......................................................      $85,050
2015.......................................................      $88,650
2016.......................................................      $92,650
2017.......................................................      $96,550
2018.......................................................     $100,950
2019.......................................................     $105,150
2020.......................................................    $109,950.
------------------------------------------------------------------------

       ``(B) Taxpayers described in paragraph (1)(B).--For 
     purposes of paragraph (1)(B)--


------------------------------------------------------------------------
                                                                 The
             ``For taxable years beginning in--               exemption
                                                              amount is:
------------------------------------------------------------------------
2010.......................................................      $47,450
2011.......................................................      $48,450
2012.......................................................      $50,350
2013.......................................................      $51,950
2014.......................................................      $53,750
2015.......................................................      $55,550
2016.......................................................      $57,550
2017.......................................................      $59,500
2018.......................................................      $61,700
2019.......................................................      $63,800
2020.......................................................  $66,200.''.
------------------------------------------------------------------------

       (b) Alternative Minimum Tax Relief for Nonrefundable 
     Credits.--
       (1) In general.--Subsection (a) of section 26 of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(a) Limitation Based on Amount of Tax.--The aggregate 
     amount of credits allowed by this subpart for the taxable 
     year shall not exceed the sum of--
       ``(1) the taxpayer's regular tax liability for the taxable 
     year reduced by the foreign tax credit allowable under 
     section 27(a), and
       ``(2) the tax imposed by section 55(a) for the taxable 
     year.''.
       (2) Conforming amendments.--
       (A) Adoption credit.--
       (i) Section 23(b) of such Code is amended by striking 
     paragraph (4).
       (ii) Section 23(c) of such Code is amended by striking 
     paragraphs (1) and (2) and inserting the following:
       ``(1) In general.--If the credit allowable under subsection 
     (a) for any taxable year exceeds the limitation imposed by 
     section 26(a) for such taxable year reduced by the sum of the 
     credits allowable under this subpart (other than this section 
     and sections 25D and 1400C), such excess shall be carried to 
     the succeeding taxable year and added to the credit allowable 
     under subsection (a) for such taxable year.''.
       (iii) Section 23(c) of such Code is amended by 
     redesignating paragraph (3) as paragraph (2).
       (B) Child tax credit.--
       (i) Section 24(b) of such Code is amended by striking 
     paragraph (3).
       (ii) Section 24(d)(1) of such Code is amended--

       (I) by striking ``section 26(a)(2) or subsection (b)(3), as 
     the case may be,'' each place it appears in subparagraphs (A) 
     and (B) and inserting ``section 26(a)'', and
       (II) by striking ``section 26(a)(2) or subsection (b)(3), 
     as the case may be'' in the second last sentence and 
     inserting ``section 26(a)''.

       (C) Credit for interest on certain home mortgages.--Section 
     25(e)(1)(C) of such Code is amended to read as follows:
       ``(C) Applicable tax limit.--For purposes of this 
     paragraph, the term `applicable tax

[[Page S7043]]

     limit' means the limitation imposed by section 26(a) for the 
     taxable year reduced by the sum of the credits allowable 
     under this subpart (other than this section and sections 23, 
     25D, and 1400C).''.
       (D) Savers' credit.--Section 25B of such Code is amended by 
     striking subsection (g).
       (E) Residential energy efficient property.--Section 25D(c) 
     of such Code is amended to read as follows:
       ``(c) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under this subpart (other than this 
     section), such excess shall be carried to the succeeding 
     taxable year and added to the credit allowable under 
     subsection (a) for such succeeding taxable year.''.
       (F) Certain plug-in electric vehicles.--Section 30(c)(2) of 
     such Code is amended to read as follows:
       ``(2) Personal credit.--For purposes of this title, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall be 
     treated as a credit allowable under subpart A for such 
     taxable year.''.
       (G) Alternative motor vehicle credit.--Section 30B(g)(2) of 
     such Code is amended to read as follows:
       ``(2) Personal credit.--For purposes of this title, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall be 
     treated as a credit allowable under subpart A for such 
     taxable year.''.
       (H) New qualified plug-in electric vehicle credit.--Section 
     30D(c)(2) of such Code is amended to read as follows:
       ``(2) Personal credit.--For purposes of this title, the 
     credit allowed under subsection (a) for any taxable year 
     (determined after application of paragraph (1)) shall be 
     treated as a credit allowable under subpart A for such 
     taxable year.''.
       (I) Cross references.--Section 55(c)(3) of such Code is 
     amended by striking ``26(a), 30C(d)(2),'' and inserting 
     ``30C(d)(2)''.
       (J) Foreign tax credit.--Section 904 of such Code is 
     amended by striking subsection (i) and by redesignating 
     subsections (j) , (k), and (l) as subsections (i), (j), and 
     (k), respectively.
       (K) First-time home buyer credit for the district of 
     columbia.--Section 1400C(d) of such Code is amended to read 
     as follows:
       ``(d) Carryforward of Unused Credit.--If the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by section 26(a) for such taxable year reduced by the sum of 
     the credits allowable under subpart A of part IV of 
     subchapter A (other than this section and section 25D), such 
     excess shall be carried to the succeeding taxable year and 
     added to the credit allowable under subsection (a) for such 
     taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2009.

                 TITLE III--PERMANENT ESTATE TAX RELIEF

     SEC. 301. APPLICATION OF ESTATE, GENERATION-SKIPPING 
                   TRANSFER, AND GIFT TAXES AFTER 2009.

       (a) In General.--The following provisions of the Economic 
     Growth and Tax Relief Reconciliation Act of 2001, and the 
     amendments made by such provisions, are repealed on and after 
     January 1, 2010, with respect to decedents dying on and after 
     such date, and on and after January 1, 2011, with respect to 
     gifts made and generation-skipping transfers on and after 
     such date:
       (1) Subtitles A and E of title V.
       (2) Subsection (d), and so much of subsection (f)(3) as 
     relates to subsection (d), of section 511.
       (3) Paragraph (2) of subsection (b), and paragraph (2) of 
     subsection (e), of section 521.
     Except in the case of an election under section 404, the 
     Internal Revenue Code of 1986 shall be applied as if such 
     provisions and amendments had never been enacted.
       (b) Conforming Amendment.--Subsection (c) of section 2511 
     of the Internal Revenue Code of 1986 is repealed on and after 
     January 1, 2011, with respect to gifts made on and after such 
     date.

     SEC. 302. TREATMENT OF UNIFIED CREDIT AND MAXIMUM ESTATE TAX 
                   RATE AFTER 2009.

       (a) Restoration of Unified Credit Against Gift Tax.--
     Paragraph (1) of section 2505(a) of the Internal Revenue Code 
     of 1986 (relating to general rule for unified credit against 
     gift tax), after the application of section _01, is amended 
     by striking ``(determined as if the applicable exclusion 
     amount were $1,000,000)''.
       (b) Exclusion Equivalent of Unified Credit Equal to 
     $5,000,000.--Subsection (c) of section 2010 of the Internal 
     Revenue Code of 1986 (relating to unified credit against 
     estate tax) is amended to read as follows:
       ``(c) Applicable Credit Amount.--
       ``(1) In general.--For purposes of this section, the 
     applicable credit amount is the amount of the tentative tax 
     which would be determined under section 2001(c) if the amount 
     with respect to which such tentative tax is to be computed 
     were equal to the applicable exclusion amount.
       ``(2) Applicable exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable exclusion amount is $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2010, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--
       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2009' for `calendar year 1992' in subparagraph 
     (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $10,000, such amount shall be rounded to the 
     nearest multiple of $10,000.''.
       (c) Maximum Estate Tax Rate Equal to 35 Percent.--
       (1) In general.--Subsection (c) of section 2001 of the 
     Internal Revenue Code of 1986 (relating to imposition and 
     rate of tax) is amended--
       (A) by striking ``Over $500,000'' and all that follows in 
     the table contained in paragraph (1) and insert the 
     following:


``Over $500,000...........................  $79,300, plus 35 percent of
                                             the excess of such amount
                                             over $500,000.'',
 

       (B) by striking ``(1) In general.--'', and
       (C) by striking paragraph (2).
       (2) Conforming amendment.--Paragraphs (1) and (2) of 
     section 2102(b) of such Code are amended to read as follows:
       ``(1) In general.--A credit in an amount that would be 
     determined under section 2010 as the applicable credit amount 
     if the applicable exclusion amount were $60,000 shall be 
     allowed against the tax imposed by section 2101.
       ``(2) Residents of possessions of the united states.--In 
     the case of a decedent who is considered to be a `nonresident 
     not a citizen of the United States' under section 2209, the 
     credit allowed under this subsection shall not be less than 
     the proportion of the amount that would be determined under 
     section 2010 as the applicable credit amount if the 
     applicable exclusion amount were $175,000 which the value of 
     that part of the decedent's gross estate which at the time of 
     the decedent's death is situated in the United States bears 
     to the value of the decedent's entire gross estate, wherever 
     situated.''.
       (d) Modifications of Estate and Gift Taxes to Reflect 
     Differences in Unified Credit Resulting From Different Tax 
     Rates.--
       (1) Estate tax.--
       (A) In general.--Section 2001(b)(2) of the Internal Revenue 
     Code of 1986 (relating to computation of tax) is amended by 
     striking ``if the provisions of subsection (c) (as in effect 
     at the decedent's death)'' and inserting ``if the 
     modifications described in subsection (g)''.
       (B) Modifications.--Section 2001 of such Code is amended by 
     adding at the end the following new subsection:
       ``(g) Modifications to Gift Tax Payable to Reflect 
     Different Tax Rates.--For purposes of applying subsection 
     (b)(2) with respect to 1 or more gifts, the rates of tax 
     under subsection (c) in effect at the decedent's death shall, 
     in lieu of the rates of tax in effect at the time of such 
     gifts, be used both to compute--
       ``(1) the tax imposed by chapter 12 with respect to such 
     gifts, and
       ``(2) the credit allowed against such tax under section 
     2505, including in computing--
       ``(A) the applicable credit amount under section 
     2505(a)(1), and
       ``(B) the sum of the amounts allowed as a credit for all 
     preceding periods under section 2505(a)(2).

     For purposes of paragraph (2)(A), the applicable credit 
     amount for any calendar year before 1998 is the amount which 
     would be determined under section 2010(c) if the applicable 
     exclusion amount were the dollar amount under section 
     6018(a)(1) for such year.''.
       (2) Gift tax.--Section 2505(a) of such Code (relating to 
     unified credit against gift tax) is amended by adding at the 
     end the following new flush sentence:

     ``For purposes of applying paragraph (2) for any calendar 
     year, the rates of tax in effect under section 2502(a)(2) for 
     such calendar year shall, in lieu of the rates of tax in 
     effect for preceding calendar periods, be used in determining 
     the amounts allowable as a credit under this section for all 
     preceding calendar periods.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.

     SEC. 303. UNIFIED CREDIT INCREASED BY UNUSED UNIFIED CREDIT 
                   OF DECEASED SPOUSE.

       (a) In General.--Section 2010(c) of the Internal Revenue 
     Code of 1986, as amended by section 302(b), is amended by 
     striking paragraph (2) and inserting the following new 
     paragraphs:
       ``(2) Applicable exclusion amount.--For purposes of this 
     subsection, the applicable exclusion amount is the sum of--
       ``(A) the basic exclusion amount, and
       ``(B) in the case of a surviving spouse, the aggregate 
     deceased spousal unused exclusion amount.
       ``(3) Basic exclusion amount.--
       ``(A) In general.--For purposes of this subsection, the 
     basic exclusion amount is $5,000,000.
       ``(B) Inflation adjustment.--In the case of any decedent 
     dying in a calendar year after 2010, the dollar amount in 
     subparagraph (A) shall be increased by an amount equal to--

[[Page S7044]]

       ``(i) such dollar amount, multiplied by
       ``(ii) the cost-of-living adjustment determined under 
     section 1(f)(3) for such calendar year by substituting 
     `calendar year 2009' for `calendar year 1992' in subparagraph 
     (B) thereof.

     If any amount as adjusted under the preceding sentence is not 
     a multiple of $10,000, such amount shall be rounded to the 
     nearest multiple of $10,000.
       ``(4) Aggregate deceased spousal unused exclusion amount.--
     For purposes of this subsection, the term `aggregate deceased 
     spousal unused exclusion amount' means the lesser of--
       ``(A) the basic exclusion amount, or
       ``(B) the sum of the deceased spousal unused exclusion 
     amounts computed with respect to each deceased spouse of the 
     surviving spouse.
       ``(5) Deceased spousal unused exclusion amount.--For 
     purposes of this subsection, the term `deceased spousal 
     unused exclusion amount' means, with respect to the surviving 
     spouse of any deceased spouse dying after December 31, 2009, 
     the excess (if any) of--
       ``(A) the basic exclusion amount of the deceased spouse, 
     over
       ``(B) the amount with respect to which the tentative tax is 
     determined under section 2001(b)(1) on the estate of such 
     deceased spouse.
       ``(6) Special rules.--
       ``(A) Election required.--A deceased spousal unused 
     exclusion amount may not be taken into account by a surviving 
     spouse under paragraph (5) unless the executor of the estate 
     of the deceased spouse files an estate tax return on which 
     such amount is computed and makes an election on such return 
     that such amount may be so taken into account. Such election, 
     once made, shall be irrevocable. No election may be made 
     under this subparagraph if such return is filed after the 
     time prescribed by law (including extensions) for filing such 
     return.
       ``(B) Examination of prior returns after expiration of 
     period of limitations with respect to deceased spousal unused 
     exclusion amount.--Notwithstanding any period of limitation 
     in section 6501, after the time has expired under section 
     6501 within which a tax may be assessed under chapter 11 or 
     12 with respect to a deceased spousal unused exclusion 
     amount, the Secretary may examine a return of the deceased 
     spouse to make determinations with respect to such amount for 
     purposes of carrying out this subsection.
       ``(7) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     this subsection.''.
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 2505(a) of the Internal 
     Revenue Code of 1986, as amended by section 302(a), is 
     amended to read as follows:
       ``(1) the applicable credit amount in effect under section 
     2010(c) which would apply if the donor died as of the end of 
     the calendar year, reduced by''.
       (2) Section 2631(c) of such Code is amended by striking 
     ``the applicable exclusion amount'' and inserting ``the basic 
     exclusion amount''.
       (3) Section 6018(a)(1) of such Code is amended by striking 
     ``applicable exclusion amount'' and inserting ``basic 
     exclusion amount''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to estates of decedents dying, generation-
     skipping transfers, and gifts made, after December 31, 2009.

     SEC. 304. SPECIAL ELECTION FOR DECEDENTS DYING IN 2010.

       In the case of any decedent dying in 2010, the executor of 
     the estate of such decedent may elect to apply the Internal 
     Revenue Code of 1986 without regard to the provisions of, and 
     the amendments made by, this title (other than this section). 
     Such election shall be made at such time and in such manner 
     as the Secretary of the Treasury shall provide.

                          ____________________