HR 2350 IH
106th CONGRESS
1st Session
H. R. 2350
To amend the Internal Revenue Code of 1986 to repeal taxes on
American Values.
IN THE HOUSE OF REPRESENTATIVES
June 24, 1999
Mr. SAM JOHNSON of Texas (for himself, Mr. MCINTOSH, Mr. DOOLITTLE, Mr.
ISTOOK, Mr. BURTON of Indiana, Mr. HILLEARY, Mr. HOSTETTLER, Mrs. CHENOWETH, Mr.
GRAHAM, Mr. BARTLETT of Maryland, Mr. TANCREDO, Mr. PITTS, Mr. DICKEY, Mr. JONES
of North Carolina, Mr. SUNUNU, Mr. HANSEN, Mr. SOUDER, Mr. WELDON of Florida,
Mr. CHABOT, Mrs. CUBIN, Mr. DEMINT, Mr. HERGER, Mr. MCINNIS, Mr. WATKINS, Mr.
HULSHOF, Mr. HAYWORTH, Mr. DELAY, Mr. PAUL, Mr. MANZULLO, Mrs. MYRICK, Mr.
SKEEN, Mr. BILIRAKIS, Mr. HEFLEY, Mr. ROHRABACHER, Mr. MILLER of Florida, Mr.
THORNBERRY, Mr. BONILLA, Mr. COBURN, Mr. POMBO, Mr. ISAKSON, Mr. SESSIONS, Mr.
PICKERING, Mr. RYUN of Kansas, Mr. GREEN of Wisconsin, Mr. RILEY, Mr. SHADEGG,
Mr. RYAN of Wisconsin, Mr. DREIER, Mr. HOBSON, Mr. HYDE, Mr. SPENCE, and Mr.
METCALF) introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on the Budget, for a period to
be subsequently determined by the Speaker, in each case for consideration of
such provisions as fall within the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to repeal taxes on
American Values.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `American Values Tax Savings
Plan for the 21st Century'.
(b) AMENDMENT OF 1986 CODE- Except as otherwise expressly provided,
whenever in this Act an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference shall
be considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
Sec. 1. Short title; amendment of 1986 Code; table of contents.
TITLE I--MARRIAGE PENALTY RELIEF
Sec. 101. Basic standard deduction for married individuals to be twice
the deduction for unmarried individuals.
Sec. 102. Elimination of marriage penalty in individual income tax
rates.
TITLE II--PHASEOUT OF ESTATE AND GIFT TAXES
Sec. 201. Phaseout of estate and gift taxes.
TITLE III--PHASEOUT OF ALTERNATIVE MINIMUM TAX FOR ALL TAXPAYERS
Sec. 301. Phaseout of alternative minimum tax for all taxpayers.
TITLE IV--REDUCTION IN INDIVIDUAL CAPITAL GAIN TAX RATES
Sec. 401. Reduction in individual capital gain tax rates.
TITLE V--INCREASED INCENTIVES FOR RETIREMENT SAVINGS
Sec. 501. Increase in limitation on IRA contributions and indexing of
limitation for inflation.
Sec. 502. Increase in income limitation applicable to conversions, etc.
from traditional IRA to Roth IRA.
TITLE VI--INCENTIVES FOR HEALTH INSURANCE COVERAGE
Sec. 601. 100 percent deduction for health insurance costs of
self-employed individuals.
Sec. 602. Carryover of unused benefits from cafeteria plans and flexible
spending arrangements.
TITLE VII--INCENTIVES FOR EDUCATION
Sec. 701. Exclusion from gross income of education distributions from
qualified State tuition programs.
TITLE VIII--REPEAL OF TELEPHONE EXCISE TAX
Sec. 801. Repeal of excise tax on telephone and other communications
services.
Sec. 802. Sense of Congress to repeal Federal Communications Commission
E-rate discount program for schools and libraries.
TITLE IX--EXTENSION OF EXPIRING PROVISIONS
Sec. 901. Research credit.
Sec. 902. Work opportunity credit.
Sec. 903. Subpart F exemption for active financing income.
TITLE X--PAY-GO REFORM
Sec. 1001. Special pay-as-you-go rule.
Sec. 1002. Additional reporting requirement.
TITLE I--MARRIAGE PENALTY RELIEF
SEC. 101. BASIC STANDARD DEDUCTION FOR MARRIED INDIVIDUALS TO BE TWICE THE
DEDUCTION FOR UNMARRIED INDIVIDUALS.
(a) IN GENERAL- Paragraph (2) of section 63(c) (relating to standard
deduction) is amended--
(1) by striking `$5,000' in subparagraph (A) and inserting `twice the
dollar amount in effect under subparagraph (C) for the taxable year',
(2) by adding `or' at the end of subparagraph (B),
(3) by striking `in the case of' and all that follows in subparagraph
(C) and inserting `in any other case.', and
(4) by striking subparagraph (D).
(b) TECHNICAL AMENDMENT- Subparagraph (B) of section 1(f)(6) is amended by
striking `(other than with' and all that follows through `shall be applied'
and inserting `(other than sections 63(c)(4) and 151(d)(4)(A)) shall be
applied'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 102. ELIMINATION OF MARRIAGE PENALTY IN INDIVIDUAL INCOME TAX
RATES.
(a) IN GENERAL- Subsection (f) of section 1 (relating to tax imposed) is
amended by adding at the end the following new paragraph:
`(8) ELIMINATION OF MARRIAGE PENALTY- In prescribing the table under
paragraph (1) which applies in lieu of the table contained in subsection (a)
with respect to taxable years beginning in a calendar year after 2004, the
minimum and maximum dollar amounts for each rate bracket shall be twice the
minimum and maximum dollar amounts (respectively) prescribed by the
Secretary under this subsection for the comparable rate bracket under
subsection (c) for such taxable years. The preceding sentence shall apply in
lieu of applying paragraph (2)(A) to the table contained in subsection
(a).'
(b) TECHNICAL AMENDMENTS-
(1) Subparagraph (A) of section 1(f)(2) is amended by inserting `except
as provided in paragraph (8),' before `by increasing'.
(2) The heading for subsection (f) of section 1 is amended by inserting
`ELIMINATION OF MARRIAGE PENALTY AFTER 2004;' before `ADJUSTMENTS'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 2004.
TITLE II--PHASEOUT OF ESTATE AND GIFT TAXES
SEC. 201. PHASEOUT OF ESTATE AND GIFT TAXES.
(a) REPEAL OF ESTATE AND GIFT TAXES- Subtitle B (relating to estate and
gift taxes) is repealed effective with respect to estates of decedents dying,
and gifts made, after December 31, 2009.
(b) PHASEOUT OF TAX- Subsection (c) of section 2001 (relating to
imposition and rate of tax) is amended by adding at the end the following new
paragraph:
`(3) PHASEOUT OF TAX- In the case of estates of decedents dying, and
gifts made, during any calendar year after 1999 and before 2010--
`(A) IN GENERAL- The tentative tax under this subsection shall be
determined by using a table prescribed by the Secretary (in lieu of using
the table contained in paragraph (1)) which is the same as such table;
except that--
`(i) each of the rates of tax shall be reduced (but not below zero)
by the number of percentage points determined under subparagraph (B),
and
`(ii) the amounts setting forth the tax shall be adjusted to the
extent necessary to reflect the adjustments under clause
(i).
`(B) PERCENTAGE POINTS OF REDUCTION-
--The number of
`For calendar year:
--percentage points is:
--5
--10
--15
--20
--25
--30
--35
--40
--45
--50.
`(C) COORDINATION WITH PARAGRAPH (2)- Paragraph (2) shall be applied
by reducing the 55 percent percentage contained therein by the number of
percentage points determined for such calendar year under subparagraph
(B).
`(D) COORDINATION WITH CREDIT FOR STATE DEATH TAXES- Rules similar to
the rules of subparagraph (A) shall apply to the table contained in
section 2011(b) except that the number of percentage points referred to in
subparagraph (A)(i) shall be determined under the following
table:
--The number of
`For calendar year:
--percentage points is:
--1 1/2
--3
--4 1/2
--6
--7 1/2
--9
--10 1/2
--12
--13 1/2
--15.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
estates of decedents dying, and gifts made, after December 31, 1999.
TITLE III--PHASEOUT OF ALTERNATIVE MINIMUM TAX FOR ALL
TAXPAYERS
SEC. 301. PHASEOUT OF ALTERNATIVE MINIMUM TAX FOR ALL TAXPAYERS.
(a) REPEAL IN 2004 FOR NONCORPORATE TAXPAYERS AND IN 2005 FOR
CORPORATIONS- Subsection (a) of section 55 (relating to alternative minimum
tax imposed) is amended to read as follows:
`(1) IN GENERAL- There is hereby imposed (in addition to any other tax
imposed by this subtitle) a tax equal to the excess (if any) of--
`(A) the tentative minimum tax for the taxable year, over
`(B) the regular tax for the taxable year.
`(2) TERMINATION- No tax shall be imposed by this section for any
taxable year beginning after December 31, 2003 (December 31, 2004, in the
case of a corporation), and the tentative minimum tax of any taxpayer for
any taxable year beginning after December 31, 2003 (December 31, 2004, in
the case of a corporation) shall be zero for purposes of this title.'
(b) PHASEOUT OF TAX ON NONCORPORATE TAXPAYERS-
(1) IN GENERAL- Paragraph (1) of section 55(d) (relating to exemption
amounts) is amended--
(A) by striking `$45,000' in subparagraph (A) and inserting `the
applicable amount',
(B) by striking `$33,750' in subparagraph (B) and inserting ` 3/4 of
the applicable amount', and
(C) by striking `$22,500' in subparagraph (C) and inserting ` 1/2 of
the applicable amount'.
(2) APPLICABLE AMOUNT- Subsection (d) of section 55 is amended by adding
at the end the following new paragraph:
`(4) APPLICABLE AMOUNT- For purposes of paragraph (1), the applicable
amount shall be determined in accordance with the following table:
`For taxable years beginning
--The applicable
--amount is--
2000
--$70,000
2001
-- 95,000
2002
--120,500
2003
--145,000.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE IV--REDUCTION IN INDIVIDUAL CAPITAL GAIN TAX RATES
SEC. 401. REDUCTION IN INDIVIDUAL CAPITAL GAIN TAX RATES.
(a) IN GENERAL- Subparagraph (C) of section 1(h)(1) (relating to maximum
capital gains rate) is amended by striking `20 percent' and inserting `15
percent (10 percent in the case of taxable years beginning after December 31,
2004)'.
(b) CONFORMING AMENDMENTS-
(1) Paragraph (2) of section 1(h) is amended to read as follows:
`(2) 8 PERCENT RATE FOR QUALIFIED 5-YEAR GAIN OTHERWISE IN 15 PERCENT
BRACKET- In the case of any taxable year beginning after December 31, 2000,
the rate under paragraph (1)(B) shall be 8 percent with respect to so much
of the amount to which the 10-percent rate under paragraph (1)(B) would
otherwise apply as does not exceed qualified 5-year gain, and 10 percent
with respect to the remainder of such amount.'
(2) Section 1(h) is amended by striking paragraph (13).
(3) Subparagraph (C) of section 55(a)(3) is amended by striking `20
percent' and inserting `15 percent (10 percent in the case of taxable years
beginning after December 31, 2004)'.
(4) Paragraph (1) of section 1445(e) is amended by striking `20 percent'
and inserting `15 percent (10 percent in the case of taxable years beginning
after December 31, 2004)'.
(5) Subparagraph (A) of section 7518(g)(6)(A), and section 607(h)(6)(A)
of the Merchant Marine Act, 1936, are each amended by striking `20 percent'
and inserting `15 percent (10 percent in the case of taxable years beginning
after December 31, 2004)'.
(6) Section 311 of the Taxpayer Relief Act of 1997 is amended by
striking subsection (e).
(1) IN GENERAL- Except as provided in paragraph (2), the amendments made
by this section shall apply to taxable years beginning after December 31,
1999.
(2) WITHHOLDING- The amendment made by subsection (b)(4) shall apply to
amounts paid after December 31, 1999.
TITLE V--INCREASED INCENTIVES FOR RETIREMENT SAVINGS
SEC. 501. INCREASE IN LIMITATION ON IRA CONTRIBUTIONS AND INDEXING OF
LIMITATION FOR INFLATION.
(a) INCREASE IN MAXIMUM AMOUNT OF DEDUCTION- Paragraph (1) of section
219(b) (relating to maximum amount of deduction) is amended to read as
follows:
`(A) IN GENERAL- The amount allowable as a deduction under subsection
(a) to any individual for any taxable year shall not exceed the lesser
of--
`(i) the applicable dollar limitation, or
`(ii) an amount equal to the compensation includible in the
individual's gross income for such taxable year.
`(B) APPLICABLE DOLLAR LIMITATION- For purposes of subparagraph (A),
the applicable dollar limitation shall be determined in accordance with
the following table:
`For taxable years beginning
--The applicable dollar
in calendar year--
--limitation is--
--$2,500
-- 3,000
-- 3,500
-- 4,000
-- 4,500
-- 5,000.'
(b) INFLATION ADJUSTMENTS- Subsection (f) of section 219 is amended by
adding at the end the following new paragraph:
`(8) INFLATION ADJUSTMENT- In the case of taxable years beginning in a
calendar year after 2006, the $5,000 amount set forth in subsection
(b)(1)(B) shall be increased by an amount equal to--
`(A) such dollar amount, multiplied by
`(B) the cost-of-living adjustment determined under section 1(f)(3)
for such calendar year by substituting `calendar year 2005' for `calendar
year 1992' in subparagraph (B) thereof.
If any increase determined under the preceding sentence is not a
multiple of $100, such increase shall be rounded to the nearest multiple of
$100.'
(c) CONFORMING AMENDMENTS-
(1) Section 408(a)(1) is amended by striking `in excess of $2,000 on
behalf of any individual' and inserting `on behalf of any individual in
excess of the applicable dollar limitation in effect for such taxable year
under section 219(b)(1)'.
(2) Section 408(b)(2)(B) is amended by striking `$2,000' and inserting
`the applicable dollar limitation in effect under section 219(b)(1)'.
(3) Section 408(b) is amended by striking `$2,000' in the matter
following paragraph (4) and inserting `the applicable dollar limitation in
effect under section 219(b)(1)'.
(4) Section 408(j) is amended by striking `$2,000'.
(5) Section 408(p)(8) is amended by striking `$2,000' and inserting `the
applicable dollar limitation in effect under section 219(b)(1)'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 502. INCREASE IN INCOME LIMITATION APPLICABLE TO CONVERSIONS, ETC. FROM
TRADITIONAL IRA TO ROTH IRA.
(a) IN GENERAL- Clause (i) of section 408A(c)(3)(B) (relating to rollover
from IRA) is amended by striking `$100,000' and inserting `$1,000,000'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE VI--INCENTIVES FOR HEALTH INSURANCE COVERAGE
SEC. 601. 100 PERCENT DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-EMPLOYED
INDIVIDUALS.
(a) IN GENERAL- Section 162(l)(1) (relating to special rules for health
insurance costs of self-employed individuals) is amended to read as
follows:
`(1) ALLOWANCE OF DEDUCTION- In the case of an individual who is an
employee within the meaning of section 401(c)(1), there shall be allowed as
a deduction under this section an amount equal to the amount paid during the
taxable year for insurance which constitutes medical care for the taxpayer,
the taxpayer's spouse, and dependents.'
(b) CLARIFICATION OF LIMITATIONS ON OTHER COVERAGE- The first sentence of
section 162(l)(2)(B) is amended to read as follows: `Paragraph (1) shall not
apply to any taxpayer for any calendar month for which the taxpayer
participates in any subsidized health plan maintained by any employer (other
than an employer described in section 401(c)(4)) of the taxpayer or the spouse
of the taxpayer.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 602. CARRYOVER OF UNUSED BENEFITS FROM CAFETERIA PLANS AND FLEXIBLE
SPENDING ARRANGEMENTS.
(a) IN GENERAL- Section 125 (relating to cafeteria plans) is amended by
redesignating subsections (h) and (i) as subsections (i) and (j),
respectively, and by inserting after subsection (g) the following new
subsection:
`(h) ALLOWANCE OF CARRYOVERS OF UNUSED BENEFITS TO LATER TAXABLE YEARS-
`(1) IN GENERAL- For purposes of this title--
`(A) a plan or other arrangement shall not fail to be treated as a
cafeteria plan or flexible spending or similar arrangement, and
`(B) no amount shall be required to be included in gross income by
reason of this section or any other provision of this chapter,
solely because under such plan or other arrangement any nontaxable
benefit which is unused as of the close of a taxable year may be carried
forward to 1 or more succeeding taxable years.
`(2) LIMITATION- Paragraph (1) shall not apply to amounts carried from a
plan to the extent such amounts exceed $2,000 (applied on an annual basis).
For purposes of this paragraph, all plans and arrangements maintained by an
employer or any related person shall be treated as 1 plan.
`(3) ALLOWANCE OF ROLLOVER-
`(A) IN GENERAL- Each flexible spending or similar arrangement which
permits a carryover under paragraph (1) of an amount of unused benefit
shall provide that each participant may elect, in lieu of a carryover of
such amount, to have such amount distributed to the participant.
`(B) AMOUNTS NOT INCLUDED IN INCOME- Any distribution under
subparagraph (A) shall not be included in gross income to the extent that
such amount is transferred in a trustee-to-trustee transfer, or is
contributed within 60 days of the date of the distribution, to--
`(i) an individual retirement plan,
`(ii) a qualified cash or deferred arrangement described in section
401(k),
`(iii) a plan under which amounts are contributed by an individual's
employer for an annuity contract described in section
403(b),
`(iv) an eligible deferred compensation plan described in section
457,
`(v) a medical savings account (within the meaning of section 220),
or
`(vi) an education individual retirement account (within the meaning
of section 530(b)).
Any amount rolled over under this subparagraph shall be treated as a
rollover contribution for the taxable year from which the unused amount
would otherwise be carried.
`(C) TREATMENT OF ROLLOVER- Any amount rolled over under subparagraph
(B)--
`(i) shall be treated as an eligible rollover under section 219,
220, 401(k), 403(b), 457, or 530, whichever is applicable,
`(ii) shall be taken into account in applying any limitation on
contributions under such section or any other provision of this chapter
for the taxable year of the rollover, and
`(iii) shall not be taken into account in applying any participation
requirement on contributions under such section or other provision for
such taxable year.
`(4) COST-OF-LIVING ADJUSTMENT- In the case of any taxable year
beginning in a calendar year after 1999, the $2,000 amount under paragraph
(2) shall be adjusted at the same time and in the same manner as under
section 415(d)(2), except that the base period taken into account shall be
the calendar quarter beginning October 1, 1999, and any increase which is
not a multiple of $50 shall be rounded to the next lowest multiple of
$50.'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE VII--INCENTIVES FOR EDUCATION
SEC. 701. EXCLUSION FROM GROSS INCOME OF EDUCATION DISTRIBUTIONS FROM
QUALIFIED STATE TUITION PROGRAMS.
(a) IN GENERAL- Section 529(c)(3)(B) (relating to distributions) is
amended to read as follows:
`(B) DISTRIBUTIONS FOR QUALIFIED HIGHER EDUCATION EXPENSES-
`(i) IN GENERAL- No amount shall be includible in gross income under
subparagraph (A) if the qualified higher education expenses of the
designated beneficiary during the taxable year are not less than the
aggregate distributions during the taxable year.
`(ii) DISTRIBUTIONS IN EXCESS OF EXPENSES- If such aggregate
distributions exceed such expenses during the taxable year, the amount
otherwise includible in gross income under subparagraph (A) shall be
reduced by the amount which bears the same ratio to the amount so
includible (without regard to this subparagraph) as such expenses bear
to such aggregate distributions.
`(iii) ELECTION TO WAIVE EXCLUSION- A taxpayer may elect to waive
the application of this subparagraph for any taxable year.
`(iv) IN-KIND DISTRIBUTIONS- Any benefit furnished to a designated
beneficiary under a qualified State tuition program shall be treated as
a distribution to the beneficiary for purposes of this
paragraph.
`(v) DISALLOWANCE OF EXCLUDED AMOUNTS AS CREDIT OR DEDUCTION- No
deduction or credit shall be allowed to the taxpayer under any other
section of this chapter for any qualified higher education expenses to
the extent taken into account in determining the amount of the exclusion
under this paragraph.'.
(b) COORDINATION WITH EDUCATION CREDITS- Section 25A(e)(2) (relating to
coordination with exclusions) is amended--
(1) by inserting `a qualified State tuition program or' before `an
education individual retirement account'; and
(2) by striking `section 530(d)(2)' and inserting `section 529(c)(3)(B)
or 530(d)(2)'.
(c) ELIGIBLE EDUCATIONAL INSTITUTIONS PERMITTED TO MAINTAIN QUALIFIED
TUITION PROGRAMS-
(1) IN GENERAL- Section 529(b)(1) (defining qualified State tuition
program) is amended by inserting `or by one or more eligible educational
institutions' after `maintained by a State or agency or instrumentality
thereof'.
(2) PRIVATE QUALIFIED TUITION PROGRAMS LIMITED TO PREPAID PLANS- Section
529(b)(1) is amended by adding at the end the following flush
sentence:
`Clause (ii) of subparagraph (A) shall only apply to a program
established and maintained by a State or any agency or instrumentality
thereof.'.
(3) TAX ON EXCESS CONTRIBUTIONS-
(A) IN GENERAL- Section 4973(a) (relating to tax imposed) is amended
by striking `or' at the end of paragraph (3), inserting `or' at the end of
paragraph (4), and inserting after paragraph (4) the following new
paragraph:
`(5) a private qualified tuition program (as defined in subsection
(g)),'.
(B) EXCESS CONTRIBUTIONS DEFINED- Section 4973 is amended by adding at
the end the following new subsection:
`(g) EXCESS CONTRIBUTIONS TO PRIVATE QUALIFIED TUITION PROGRAM- For
purposes of this section--
`(1) IN GENERAL- In the case of private qualified tuition programs, the
term `excess contributions' means, with respect to any one beneficiary, the
amount contributed to a private qualified tuition program for any taxable
year if any amount is contributed during such year for the benefit of such
beneficiary to a qualified tuition program (as defined in section 529) other
than a private qualified tuition program.
`(2) PRIVATE QUALIFIED TUITION PROGRAM- The term `private qualified
tuition program' means a qualified tuition program (as defined in section
529) not established and maintained by a State or any agency or
instrumentality thereof.'.
(4) TECHNICAL AMENDMENTS-
(A) The text of sections 25A(e)(2), 72(e)(9), 529, 530(b)(2)(B), and
4973(e)(1)(B), as previously amended by this Act, are each amended by
striking `qualified State tuition program' each place it appears and
inserting `qualified tuition program'.
(B)(i) The heading of section 529 is amended to read as
follows:
`SEC. 529. QUALIFIED TUITION PROGRAMS.'.
(ii) The item relating to section 529 in the table of sections for
part VIII of subchapter F of chapter 1 is amended by striking
`State'.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE VIII--REPEAL OF TELEPHONE EXCISE TAX
SEC. 801. REPEAL OF EXCISE TAX ON TELEPHONE AND OTHER COMMUNICATIONS
SERVICES.
(a) IN GENERAL- Paragraph (2) of section 4251(b) is amended to read as
follows:
`For bills first rendered
--The applicable
during calendar year--
--percentage is--
--2.4
--1.8
--1.2
--0.6
--0.0.'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
amounts paid pursuant to bills first rendered after December 31, 1999.
SEC. 802. SENSE OF CONGRESS TO REPEAL FEDERAL COMMUNICATIONS COMMISSION
E-RATE DISCOUNT PROGRAM FOR SCHOOLS AND LIBRARIES.
It is the sense of the Congress that the Federal Communications Commission
E-rate discount program for schools and libraries should be terminated.
TITLE IX--EXTENSION OF EXPIRING PROVISIONS
SEC. 901. RESEARCH CREDIT.
(1) IN GENERAL- Paragraph (1) of section 41(h) (relating to termination)
is amended--
(A) by striking `June 30, 1999' and inserting `June 30,
2004';
(B) by striking `36-month' and inserting `96-month'; and
(C) by striking `36 months' and inserting `96 months'.
(2) TECHNICAL AMENDMENT- Subparagraph (D) of section 45C(b)(1) is
amended by striking `June 30, 1999' and inserting `June 30, 2004'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply
to amounts paid or incurred after June 30, 1999.
(b) INCREASE IN PERCENTAGES UNDER ALTERNATIVE INCREMENTAL CREDIT-
(1) IN GENERAL- Subparagraph (A) of section 41(c)(4) is amended--
(A) by striking `1.65 percent' and inserting `2.65 percent',
(B) by striking `2.2 percent' and inserting `3.2 percent',
and
(C) by striking `2.75 percent' and inserting `3.75 percent'.
(2) EFFECTIVE DATE- The amendments made by this subsection shall apply
to taxable years beginning after June 30, 1999.
SEC. 902. WORK OPPORTUNITY CREDIT.
(a) TEMPORARY EXTENSION- Subparagraph (B) of section 51(c)(4) (relating to
termination) is amended by striking `June 30, 1999' and inserting `June 30,
2000'.
(b) CERTAIN BENEFITS TREATED AS WAGES ELIGIBLE FOR CREDIT- Subsection (c)
of section 51 is amended by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively, and by inserting after paragraph (2) the following
new paragraph:
`(3) CERTAIN AMOUNTS TREATED AS WAGES- The term `wages' includes amounts
paid or incurred by the employer which are excludable from the employee's
gross income under--
`(A) section 105 (relating to amounts received under accident and
health plans),
`(B) section 106 (relating to contributions by employer to accident
and health plans),
`(C) section 127 (relating to educational assistance programs) or
would be so excludable but for section 127(d), but only to the extent paid
or incurred to a person not related to the employer, or
`(D) section 129 (relating to dependent care assistance
programs).
The amount treated as wages by subparagraph (A) or (B) for any period
shall be based on the reasonable cost of coverage for the period, but shall
not exceed the applicable premium for the period under section
4980B(f)(4).'
(c) CONSOLIDATION OF WELFARE-TO-WORK TAX CREDIT AND WORK OPPORTUNITY TAX
CREDIT-
(1) IN GENERAL- Paragraph (1) of section 51(d) is amended by striking
`or' at the end of subparagraph (G), by striking the period at the end of
subparagraph (H) and inserting `, or', and by adding at the end the
following new subparagraph:
`(I) a long-term family assistance recipient.'
(2) DEFINITION- Subsection (d) of section 51 is amended by redesignating
paragraphs (10), (11), and (12) as paragraphs (11), (12), and (13),
respectively, and by inserting after paragraph (9) the following new
paragraph:
`(10) LONG-TERM FAMILY ASSISTANCE RECIPIENT-
`(A) IN GENERAL- The term `long-term family assistance recipient'
means any individual who is certified by the designated local
agency--
`(i) as being a member of a family receiving assistance under a IV-A
program for at least the 18-month period ending on the hiring
date,
`(ii)(I) as being a member of a family receiving such assistance for
at least 18 months beginning after August 5, 1997, and
`(II) as having a hiring date which is not more than 2 years after
the end of the 18th month beginning after August 5, 1997, that the
individual is a member of a family receiving such assistance,
or
`(iii)(I) as being a member of a family which ceased to be eligible
after August 5, 1997, for such assistance by reason of any limitation
imposed by Federal or State law on the maximum period such assistance is
payable to a family, and
`(II) as having a hiring date which is not more than 2 years after
the date of such cessation.
`(B) SPECIAL RULES FOR DETERMINING AMOUNT OF CREDIT- For purposes of
applying this subpart to wages paid or incurred to any long-term family
assistance recipient--
`(i) the credit determined under this section shall include 40
percent of the qualified second-year wages for the taxable
year,
`(ii) notwithstanding subsection (b)(3), the amount of the qualified
first-year wages, and the amount of qualified second-year wages, which
may be taken into account with respect to any individual shall not
exceed $10,000 per year, and
`(iii) paragraph (1) of subsection (h) shall be applied by
substituting `$10,000' for `$6,000' in subparagraph (A) and `$833.33'
for `$500' in subparagraph (B).
`(C) QUALIFIED SECOND-YEAR WAGES- For purposes of subparagraph (B),
the term `qualified second-year wages' means, with respect to any
individual, qualified wages attributable to service rendered during the
1-year period beginning on the day after the last day of the 1-year period
with respect to such individual determined under subsection
(b)(2).'
(3) REPEAL OF SEPARATE WELFARE-TO-WORK CREDIT-
(A) Section 51A is hereby repealed.
(B) The table of sections for subpart E of part IV of subchapter A of
chapter 1 is amended by striking the item relating to section
51A.
(d) CLARIFICATION OF FIRST YEAR OF EMPLOYMENT- Paragraph (2) of section
51(i) is amended by striking `during which he was not a member of a targeted
group'.
(e) TECHNICAL CORRECTION- Subparagraph (B) of section 51(d)(2) is
amended--
(1) by striking `plan approved' and inserting `program funded',
and
(2) by striking `(relating to assistance for needy families with minor
children)'.
(1) IN GENERAL- Except as otherwise provided in this subsection, the
amendments made by this section shall apply to individuals who begin work
for the employer after June 30, 1999.
(2) CLARIFICATION- The amendment made by subsection (d) shall apply to
individuals who begin work for the employer after June 30, 1999.
(3) TECHNICAL CORRECTION- The amendment made by subsection (e) shall
take effect as if included in the amendments made by section 1201 of the
Small Business Job Protection Act of 1996.
SEC. 903. SUBPART F EXEMPTION FOR ACTIVE FINANCING INCOME.
(a) IN GENERAL- Sections 953(e)(10) and 954(h)(9) are each amended by
striking `January 1, 2000' and inserting `January 1, 2001'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE X--PAY-GO REFORM
SEC. 1001. SPECIAL PAY-AS-YOU-GO RULE.
Section 252 of the Balanced Budget and Emergency Deficit Control Act of
1985 is amended by adding at the end the following new subsections:
`(f) SPECIAL RULE ON INTERRELATIONSHIP BETWEEN SECTIONS 251(c) and 252- If
legislation is enacted that--
`(1) reduces receipts; and
`(2) decreases the discretionary spending limits for budget authority
and outlays for the fiscal years set forth in section 251(c) of the Balanced
Budget and Emergency Deficit Control Act of 1985 for which there is such a
reduction in receipts;
then, for purposes of subsection (b), an amount equal to that decrease in
the discretionary spending limit for outlays shall be treated as direct
spending legislation decreasing the deficit for that fiscal year.
`(g) SPECIAL RULE FOR TREATMENT OF BUDGET SURPLUSES- For purposes of
subsection (b), the amount, if any, designated by OMB in the pay-as-you-go
sequestration preview report as the projected budget surplus for the current
year shall be treated for purposes of offsetting any receipts legislation as
direct spending legislation decreasing the deficit for that fiscal year.'.
SEC. 1002. ADDITIONAL REPORTING REQUIREMENT.
Section 254(c)(3) of the Balanced Budget and Emergency Deficit Control Act
of 1985 is amended by adding at the end the following new subparagraph:
`(D) The projected budget surplus, if any.'.
END