COMPARISON OF PROVISIONS IN H.R. 2488,

AS PASSED BY THE HOUSE AND THE SENATE

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

August 2, 1999

JCX-57-99
(i)

CONTENTS

[Page numbers in contents won’t necessarily reflect actual page numbers in this PDF file]

Page

IDENTICAL PROVISIONS ............................................. 2

SIMILAR PROVISIONS ................................................ 7

COMPARISON OF PRINCIPAL DIFFERENCES IN PROVISIONS IN

H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE ................ 12

I. BROAD-BASED AND FAMILY TAX RELIEF ............................ 12

A. Broad-Based Tax Relief (sec. 101 of the House bill and

secs. 101-102 of the Senate amendment) ............................ 12

B. Marriage Penalty Relief (sec. 111 of the House bill and sec. 201

of the Senate amendment) ........................................ 12

C. Marriage Penalty Relief for the Earned Income Credit (sec. 202 of

the Senate amendment) .......................................... 13

D. Individual AMT Provisions (secs. 121 and 302(b) of the House

bill and secs. 206, 907, and 1139 of the Senate amendment) ............. 13

E. Increase and Expand the Dependent Care Tax Credit (sec. 204 of the Senate

amendment) ................................................... 13

F. Tax Credit for Employer-Provided Child Care Facilities (sec. 205 of the

Senate amendment) ............................................. 13
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G. Expansion of Adoption Credit (sec. 210 of the Senate amendment) ........ 13

II. SAVINGS AND INVESTMENT TAX RELIEF ........................... 14

A. Partial Exclusion for Interest and Dividends (sec. 201 of the House bill) ... 14

B. Individual Capital Gains (sec. 202 of the House bill and sec. 207 of the

Senate amendment) ............................................. 14

C. Capital Gains of Designated Settlement Funds (sec. 203 of the House bill) . . 14

D. Suspend Five-Year Period for Exclusion of Gain on the Sale of a Principal

Residence by a Member of Uniformed Service or the Foreign Service

(sec. 204 of the House bill) ...................................... 14

E. Suspend Five-Year Period for Exclusion of Gain on Sale of Principal

Residence for Employees Sent Overseas by Employer (sec. 204 of the

House bill) ................................................... 14

F. Treatment of Loss on Worthless Stock of Subsidiary (sec. 206 of the

House bill) ................................................... 15

G. Individual Retirement Arrangements (sec. 113 of the House bill and secs.

301-305 of the Senate amendment) ................................. 15

H. Creation of Individual Development Accounts (sec. 303 of the Senate

amendment) ................................................... 16

III. BUSINESS INVESTMENT AND JOB CREATION ...................... 16
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A. Corporate Capital Gains (sec. 301 of the House bill) .................. 16

B. Corporate Alternative Minimum Tax (sec. 302 of the House

bill and secs. 907 and 1103 of the Senate amendment) .................. 16

IV. EDUCATION TAX RELIEF ......................................... 17

A. Expand Education Savings Accounts (sec. 401 of the House bill) ......... 17

B. Qualified State Tuition Plans (“QSTPs”) (sec. 402 of the House bill and the

Senate amendment) ............................................. 17

C. Employer-Provided Educational Assistance (sec. 404 of the Senate

amendment) ................................................... 17

D. Liberalize Construction Bond Expenditure Rule for Governmental Public

School Bonds (sec. 405 of the House bill) ........................... 17

E. Allow Issuance of Tax-Exempt Private Activity Bonds for Public Schools

(sec. 406 of the Senate amendment) ................................ 18

F. Permit Limited Guarantees of Public School Construction Bonds by Federal

Home Loan Banks (sec. 407 of the Senate amendment) ................. 18

G. Expansion of Deduction for Computer Donations to Schools (sec. 1124 of

the Senate amendment) .......................................... 18

H. Credit for Computer Donations to Schools and Senior Centers 

(sec. 1125 of the Senate amendment) ............................... 18
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I. Credit for Interest on Higher Education Loans (sec. 208 of the Senate

amendment) ................................................... 19

J. Scholarships for Children of Employees (sec. 408 of the Senate

amendment) ................................................... 19

K. Two-Percent Floor Not To Apply to Professional Development Expenses

of Teachers (sec. 1123 of the Senate amendment) ..................... 19

V. HEALTH CARE TAX RELIEF PROVISIONS ........................... 20

A. Medical Savings Accounts (sec. 503 of the House bill) ................. 20

B. Expand Human Clinical Trials Expenses Qualifying for the Orphan

Drug Tax Credit (sec. 505 of the House bill) ......................... 20

C. Deduction for Prescription Drug Insurance (sec. 507 of the House bill) .... 20

D. Credit for Employee Health Insurance Expenses of Small Employers

(sec. 609 of the Senate amendment) ................................ 20

VI. ESTATE AND GIFT TAX RELIEF PROVISIONS ....................... 21

A. Convert Unified Credit into Unified Exemption (sec. 621 of the House bill

and sec. 702 of the Senate amendment) .............................. 21

B. Reduce Estate, Gift, and Generation-Skipping Tax Rates (sec. 611 of the

House bill and sec. 701 of the Senate amendment) ..................... 21
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C. Increase Unified Exemption (sec. 702 of the Senate amendment) .......... 21

D. Expand Estate Tax Rule for Conservation Easements (sec. 711 of the Senate

amendment) ................................................... 21

E. Increase Gift Tax Annual Exclusion (sec. 721 of the Senate amendment) .... 22

F. Increase Maximum Family-Owned Business Deduction (sec. 608 of the

Senate amendment) ............................................. 22

VII. DISTRESSED COMMUNITIES AND INDUSTRIES PROVISIONS ........ 22

A. Renewal Community Provisions (secs. 701-706 of the House bill) ........ 22

B. Provide That Federal Production Payments to Farmers Are Taxable

in Year Received (sec. 711 of the House bill) ........................ 22

C. Temporary Extension of Suspension of Taxable Income Limit on Percentage

Depletion (sec. 724 of the House bill) .............................. 22

D. Determination of Small Refiner Exception to Oil Depletion Deduction

 (sec. 725 of the House bill) ...................................... 23

E. Minimum Tax Relief for the Steel Industry (sec. 741 of the House bill) ..... 23

VIII. SMALL BUSINESS TAX RELIEF PROVISIONS ...................... 23

A. Farmer and Fishermen Income Averaging (sec. 604 of the Senate

amendment) ................................................... 23
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B. Farm, Fish, and Ranch Risk Management (“FFARRM”) Accounts

(sec. 605 of the Senate amendment) ................................ 23

C. S Corporation Banks (sec. 606 of the Senate amendment) ............... 23

IX. INTERNATIONAL TAX RELIEF PROVISIONS ........................ 24

A. Allocate Interest Expense on Worldwide Basis (sec. 901 of the House bill

and the Senate amendment) ....................................... 24

B. Recharacterization of Overall Domestic Loss (sec. 905 of the House bill) . . 24

C. Modify Treatment of RIC Dividends Paid to Foreign Persons (sec. 907 of

the House bill) ................................................ 24

D. Repeal of Special Rules for Applying Foreign Tax Credit in Case of

Foreign Oil And Gas Income (sec. 908 of the House bill) ............... 24

E. Study of Proper Treatment of European Union under Subpart F Same

Country Exceptions (sec. 909 of the House bill) ...................... 24

F. Provide Waiver From Denial of Foreign Tax Credits (sec. 910 of the

House bill) ................................................... 24

G. Increase Dollar Limitation on Section 911 Exclusion (sec. 912 of the

House bill) ................................................... 25

H. Exempt Certain Sales of Frequent-Flyer and Similar Reduced-Fare Air

Transportation Rights From Aviation Excise Taxes (sec. 906 of the Senate
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amendment) ................................................... 25

X. TAX-EXEMPT ORGANIZATION PROVISIONS ........................ 25

A. Conform Provisions Relating to Arbitrage Treatment to Reflect Proposed

State Constitutional Amendments (sec. 1002 of the House bill) ........... 25

B. Authorize Treasury to Grant Waivers from Section 4941 Self-Dealing

Prohibitions (sec. 1004 of the House bill) ........................... 25

C. Extend Declaratory Judgment Procedures to Non-501(c)(3) Tax-Exempt

Organizations (sec. 1005 of the House bill) .......................... 25

D. Simplify Lobbying Expenditure Limitations (sec. 803 of the Senate

amendment) ................................................... 25

E. Tax-Free Withdrawals From IRAs for Charitable Purposes (sec. 804 of the

Senate amendment) ............................................. 25

F. Charitable Contribution Deduction for Certain Expenses in Support of

Alaskan Subsistence Whaling (sec. 806 of the Senate amendment) ........ 26

G. Charitable Giving Provisions (secs. 807-809 of the Senate amendment) .... 26

H. Modify Excess Business Holdings Rules for Publicly Traded Stock (sec.

810 of the Senate amendment) .................................... 26

I. Certain Costs of Private Foundation in Removing Hazardous Substances

Treated as Qualifying Distribution (sec. 811 of the Senate amendment) ..... 26
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XI. REAL ESTATE TAX RELIEF PROVISIONS ........................... 27

A. Modify At-Risk Rules for Publicly Traded Nonrecourse Debt

(sec. 1161 of the House bill) ..................................... 27

B. Qualified Lessee Construction Allowances Not Limited to Short-Term

Leases for Certain Retailers (sec. 1171 of the House bill) ............... 27

C. Exclusion From Gross Income for Certain Contributions to the Capital of

Certain Retailers (sec. 1172 of the House bill) ....................... 27

D. Increase in Low-Income Housing Tax Credit (secs. 1331-1337 of the House

bill and sec. 1001 of the Senate amendment) ......................... 27

E. Tax Credit for Renovating Historic Homes (sec. 1011 of the Senate

amendment) ................................................... 27

F. Treatment of Leasehold Improvements (sec. 1091 of the Senate

amendment) ................................................... 28

XII. PENSION REFORM PROVISIONS .................................. 28

A. Expanding Coverage ........................................... 28

1. Increase contribution and benefit limits (sec. 1201 of the House bill and

sec. 312 of the Senate amendment) .............................. 28

2. SAFE annuities and trusts (sec. 318 of the Senate amendment) ........ 28
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B. Enhancing Fairness for Women ................................... 29

1. Catch-up contributions (sec. 1221 of the House bill and sec. 321 of the

Senate amendment) .......................................... 29

2. Minimum distribution rules (secs. 1224 and 1239 of the House bill) .... 29

E. Reducing Regulatory Burdens ..................................... 29

1. Nondiscrimination provisions (secs. 1251 and 1253 of the House bill

and secs. 361 and 368 of the Senate amendment) ................... 29

2. Treatment of multiemployer plans under section 415 (sec. 1263 of the

House bill and sec. 346 of the Senate amendment) .................. 30

3. Increase section 415 early retirement limit for governmental, multiemployer, and certain other plans (sec. 348 of the Senate amendment) . . 30

XIII. MISCELLANEOUS PROVISIONS ................................. 30

A. Expand Employer Reporting on Annual Wage and Tax Statements

(sec. 1303 of the House bill) .................................... 30

B. Survivor Benefits of Public Safety Officers Killed in the Line of Duty

(sec. 1304 of the House bill) .................................... 30

C. Distributions From Publicly Traded Partnerships Treated as Qualifying

Income of Regulated Investment Companies (secs. 1311-1312 of the

House bill) .................................................. 30

D. Equalize the Tax Treatment of “Clean Fuel” Vehicles and Oversized
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Vehicles (sec. 1313 of the House bill) ............................. 31

E. Nuclear Decommissioning (sec. 1314 of the House bill) ............... 31

F. Consolidate Code Provisions Governing the Hazardous Substance 

Superfund and the Leaking Underground Storage Tank Trust Fund

(sec. 1321 of the House bill) .................................... 31

G. Repeal Diesel Fuel Tax on Railroads and General Fund Tax on Inland

Waterway Barge Fuel (sec. 1322 of the House bill and sec. 1101 of the

Senate amendment) ............................................ 31

H. Repeal Excise Tax on Tackle Boxes (sec. 1323 of the House bill) ....... 31

I. Entrepreneurial Equity Capital Formation (“SSBICS”) (secs. 1341-1347 of

the House bill) ............................................... 31

J. Clarification of Depreciation Study (sec. 1354 of the House bill) ........ 31

K. Tax Court Provisions (secs. 1361-1363 of the House bill) ............. 32

L. Modify Distilled Spirits Tax Collection Rules (secs. 1371-1380 of the

House bill) .................................................. 32

M. Simplify the Active Trade or Business Requirement for Tax-Free

Spin-Offs (sec. 1107 of the Senate amendment) ...................... 32

N. Expand Rural Airports Eligibility for Reduced Tax Rate (sec. 1111 of the

Senate amendment) ............................................ 32
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O. Dividends Paid by Cooperatives (sec. 1112 of the Senate amendment) .... 32

P. Modify Personal Holding Company “Lending or Finance Business”

Exception (sec. 1113 of the Senate amendment) ...................... 32

Q. Tax Credit for Modifications to Inter-City Buses Required Under the

Americans With Disabilities Act of 1990 (sec. 1115 of the Senate

amendment) .................................................. 33

R. Business Meals Deduction Provisions ............................. 33

1. Restore 80-percent meals deduction (sec. 804 of the House bill) ..... 33

2. Increased deduction for business meals while operating under

Department of Transportation hours of service limitations (sec. 1116

of the Senate amendment) .................................... 33

S. Allow Issuance of Tax-Exempt Private Activity Bonds for Highway

Projects (sec. 1117 of the Senate amendment) ....................... 33

T. Provisions Relating to Tax Incentives for the District of Columbia ....... 33

1. Extend tax credit for first-time D.C. homebuyers (sec. 1118 of the

Senate amendment) ......................................... 33

2. Expand the zero-percent capital gains rate for D.C. zone assets (sec.

1119 of the Senate amendment) ............................... 33

U. Establish a Seven-Year Recovery Period for Natural Gas Gathering Lines

(sec. 1120 of the Senate amendment) .............................. 34
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V. Reclassify Scheduled Flights on Small Seaplanes as Noncommercial

Aviation (sec. 1121 of the Senate amendment) ....................... 34

W. Additional Miscellaneous Provisions .............................. 34

1. Exemption from Federal income tax for amounts received by Holocaust

victims and heirs (sec. 1122 of the Senate amendment) ............ 34

2. Medical innovation tax credit (sec. 1137 of the Senate amendment) . . 34

3. Capital gain holding period for horses (sec. 812 of the Senate

amendment) ............................................. 34

4. Disclosure of tax return information for combined employment tax 

reporting (sec. 1131 of the Senate amendment) .................. 34

5. Tax rates for trusts with disabled beneficiary (sec. 211 of the Senate

amendment) ............................................. 35

6. Taxation of flights on noncommercial aircraft (sec. 370 of the Senate

amendment) ............................................. 35

7. Tax-exempt bonds for timber conservation organizations (sec. 1138

of the Senate amendment) .................................. 35

8. Exclusion for certain severance payments (sec. 1135 of the Senate

amendment) ............................................. 35

9. FUTA treatment of maple syrup workers (sec. 1132 of the Senate

amendment) ............................................. 35

XIV. EXPIRING TAX PROVISIONS .................................... 36

A. Extend and Modify Wind and Closed-Loop Biomass Electricity Credit

(sec. 1205 of the Senate amendment) .............................. 36

B. Alaska Exemption From Diesel Dyeing (sec. 1206 of the Senate
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amendment) .................................................. 36

C. Expensing of Environmental Remediation Expenditures (sec. 1207 of the

Senate amendment) ............................................ 36

XV. REVENUE OFFSET PROVISIONS .................................. 36

A. Exclusion of Like-Kind Exchange Property from Nonrecognition Treatment

on the Sale of a Principal Residence (sec. 1510 of the House bill) ....... 36

B. Modify Foreign Tax Credit Carryover Rules (sec. 1301 of the Senate

amendment) .................................................. 36

C. Modify Estimated Tax Rules for Closely Held REITs (sec. 1316 of the

Senate amendment) ............................................ 36

D. Prohibited Allocations of Stock in an S Corporation ESOP (sec. 1317 of the

Senate amendment) ............................................ 37

E. Modify Anti-Abuse Rules Relating to Assumption of Liabilities (sec. 1318

of the Senate amendment) ....................................... 37

F. Basis Allocation Rules for Intangibles in Certain Nonrecognition

Transactions (sec. 1319 of the Senate amendment) .................... 37

G. Modify Treatment of Closely Held REITs (sec. 1505 of the House bill and

sec. 1320 of the Senate amendment) ............................... 37

H. Distributions by a Partnership to a Corporate Partner of Stock in Another
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Corporation (sec. 1321 of the Senate amendment) .................... 37

XVI. TECHNICAL CORRECTIONS TO THE NATIONAL SUMMIT ON

RETIREMENT SAVINGS ........................................ 37

XVII. SENSE OF THE CONGRESS AND OTHER PROVISIONS ............ 37

A. Sense of the Congress Regarding Empowerment Zones (sec. 1128

of the Senate amendment) ....................................... 38

B. Sense of the Senate Regarding Savings Incentives (sec. 1127 of the Senate

amendment) .................................................. 38

C. Sense of the Congress Regarding Small Business Incentives (sec. 1129 of

the Senate amendment) ......................................... 38

D. Direct Expenditure Block Grant (sec. 1126 of the Senate amendment) ..... 38

XVIII. COMMITMENT TO DEBT REDUCTION (sec. 1701 of the House bill) . . 38

XIX. CONTINGENCY FOR RATE REDUCTIONS (sec. 101 of the House bill) . . 38

XX. EXCLUSION FROM PAYGO SCORECARD (sec. 1801 of the House

bill) ........................................................... 39

XXI. COMPLIANCE WITH CONGRESSIONAL BUDGET ACT (sec. 1501 of

the Senate amendment) .......................................... 39
1

 This document may be cited as follows: Joint Committee on Taxation, Comparison of Provisions in H.R. 2488,

As Passed by The House And The Senate (JCX-57-99), August 2, 1999.

2

 H.R. 2488 was reported by the House Committee on Ways and Means on July 16, 1999 (H. Rept. 106-238). H.R. 2488 was

amended by a manager’s amendment and was passed by the House, as amended, on July 22, 1999.

3

 S. 1429 was reported by the Senate Committee on Finance on July 23, 1999 (S. Rept. 106-120). S. 1429, as amended by the

Senate, was approved by the Senate on July 30, 1999, and the provisions were included as a Senate amendment to H.R. 2488 and

sent to conference.

-1-

INTRODUCTION AND LEGISLATIVE BACKGROUND

This document,1 prepared by the staff of the Joint Committee on Taxation, provides a comparison of the principal revenue provisions

contained in H.R. 2488 as passed by the House and as amended by the Senate. The document also contains a list of the identical

provisions, including effective dates, and a list of similar provisions.

H.R. 2488 (the “Financial Freedom Act of 1999") was passed by the House on July 22, 1999,2 and the bill, as amended by the

provisions of S. 1429 as amended by the Senate (the “Taxpayer Refund Act of 1999"),3 was passed by the Senate on July 30, 1999.

H.R. 2488 and S. 1429, respectively, were reported in response to the reconciliation instructions in the Budget Resolution for Fiscal

Year 2000 (H. Con. Res. 68).
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IDENTICAL PROVISIONS IN H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE

I. BROAD-BASED AND FAMILY TAX RELIEF

C Expand the exclusion from income for certain foster care payments (sec. 1301 of the House bill and sec. 203 of the Senate

amendment)

C Allow nonrefundable personal credits against the individual AMT (sec. 121 of the House bill and sec. 206 of the Senate amendment)

IV. EDUCATION TAX RELIEF PROVISIONS

C Increase school construction small issuer arbitrage rebate exception from $10 million to $15 million (sec. 404 of the House bill and

sec. 405 of the Senate amendment)

V. HEALTH CARE TAX RELIEF PROVISIONS

C Additional personal exemption for caretakers of elderly family members (sec. 504 of the House bill and sec. 503 of the Senate

amendment)

VII. DISTRESSED COMMUNITIES AND INDUSTRIES PROVISIONS

C Allow net operating losses from oil and gas properties to be carried back for up to five years (sec. 721 of the House bill and sec.

1104 of the Senate amendment)

C Deduction for delay rental payments (sec. 722 of the House bill and sec. 1106 of the Senate amendment)

C Election to expense geological and geophysical expenditures (sec. 723 of the House bill and sec. 1105 of the Senate amendment)

C Capital gain treatment under section 631(b) to apply to outright sales by landowners (sec. 732 of the House bill and sec. 1136 of the

Senate amendment (Senate floor amendment))
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VIII. SMALL BUSINESS TAX RELIEF PROVISIONS

C Increase section 179 expensing (sec. 802 of the House bill and sec. 602 of the Senate amendment)

C Repeal of temporary Federal unemployment surtax (sec. 803 of the House bill and sec. 603 of the Senate amendment)

IX. INTERNATIONAL TAX RELIEF PROVISIONS

C Prohibit disclosure of APAs and APA background files (sec. 911 of the House bill and sec. 905 of the Senate amendment)

X. TAX-EXEMPT ORGANIZATION PROVISIONS

C Provide tax exemption for organizations created by a State to provide property and casualty insurance coverage for property for

which such coverage is otherwise unavailable (sec. 1001 of the House bill and sec. 801 of the Senate amendment)

C Modify section 512(b)(13) (sec. 1006 of the House bill and sec. 802 of the Senate amendment)

C Provide exclusion for mileage reimbursements by charitable organizations (sec. 1302 of the House bill and sec. 805 of the Senate

amendment)

XII. PENSION REFORM PROVISIONS

A. Expanding Coverage

C Increase limitation on exclusion for elective deferrals (sec. 1201(d) of the House bill and sec. 312(a) of the Senate amendment)

C Increase limitation on SIMPLE elective contributions (sec. 1201(f) of the House bill and sec. 312(c) of the Senate amendment)

C Plan loans for subchapter S owners (sec. 1202 of the House bill and sec. 313 of the Senate amendment)

C Elective deferrals not taken into account for deduction purposes (sec. 1204 of the House bill and sec. 314 of the Senate amendment)
-4-

C Option to treat elective deferrals as after-tax contributions (sec. 1208 of the House bill and sec. 311 of the Senate amendment)

B. Enhancing Fairness for Women

C Equitable treatment for contributions to defined contribution plans (sec. 1222 of the House bill and sec. 322 of the Senate

amendment)

C Faster vesting for employer matching contributions (sec. 1223 of the House bill and sec. 325 of the Senate amendment)

C Clarification of tax treatment of section 457 plans upon divorce (sec. 1225 of the House bill and sec. 323 of the Senate amendment)

C. Increasing Portability

C Rollovers of retirement plan and IRA distributions (secs. 1231-1233 and 1239 of the House bill and secs. 331-333 and 339 of the

Senate amendment)

C Waiver of 60-day rule (sec. 1234 of the House bill and sec. 334 of the Senate amendment)

C Treatment of forms of distribution (sec. 1235 of the House bill and sec. 335 of the Senate amendment)

C Rationalization of restrictions on distributions (sec. 1236 of the House bill and sec. 336 of the Senate amendment)

C Purchase of service credit under governmental pension plans (sec. 1237 of the House bill and sec. 337 of the Senate amendment)

C Employers may disregard rollovers for purposes of cash-out rules (sec. 1238 of the House bill and sec. 338 of the Senate

amendment)

D. Pension Security and Enforcement

C Repeal of 150 percent of current liability full funding limit; extend maximum deduction rule (sec. 1241-1242 of the House bill and

sec. 341 and 347 of the Senate amendment)
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C Excise tax relief for sound pension funding (sec. 1243 of the House bill and sec. 343 of the Senate amendment)

E. Reducing Regulatory Burdens

C Modification of timing of plan valuations (sec. 1252 of the House bill and sec. 362 of the Senate amendment)

C ESOP dividend reinvestment (sec. 1255 of the House bill and sec. 364 of the Senate amendment)

C Employees of tax-exempt entities (sec. 1258 of the House bill and sec. 367 of the Senate amendment)

C Plan amendments (sec. 1260 of the House bill and sec. 371 of the Senate amendment)

C Repeal 100 percent of compensation limit for multiemployer plans (sec. 346(a) of the House bill and sec. 1264 of the Senate

amendment)

XIII. MISCELLANEOUS PROVISIONS

C Modify excise tax on arrow components and accessories (sec. 1324 of the House bill and sec. 1109 of the Senate amendment)

C Increase Joint Committee on Taxation refund review threshold to $2 million (sec. 1353 of the House bill and sec. 1110 of the Senate

amendment)

XIV. EXPIRING TAX PROVISIONS

C Research and experimentation tax credit -- Increase the credit rate applicable under the alternative incremental research credit one

percentage point per step (sec. 1401 of the House bill and sec. 1201 of the Senate amendment)

C Subpart F exceptions for active financing income (sec. 1402 of the House bill and sec. 1202 of the Senate amendment)

C Suspension of 100-percent net income limitation for oil and gas properties (sec. 1403 of the House bill and sec. 1203 of the Senate
-6-

amendment)

XV. REVENUE OFFSET PROVISIONS

C Information reporting on cancellation of indebtedness (sec. 1501 of the House bill and sec. 1302 of the Senate amendment)

C IRS user fees (sec. 1502 of the House bill and sec. 1304 of the Senate amendment)

C Installment sales (sec. 1508 of the House bill and sec. 1313 of the Senate amendment)

C Nonaccrual experience method of accounting (sec. 1509 of the House bill and sec. 1311 of the Senate amendment)

C Charitable split-dollar insurance (sec. 1003 of the House bill and sec. 1315 of the Senate amendment)

XVI. TAX TECHNICAL CORRECTIONS

(secs. 1601-1605 of the House bill and secs. 504(c) and 1401-1405 of the Senate amendment)
4

 Included in the similar provisions are certain pension reform provisions that were included in either the House or Senate

version of H.R. 2488.

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SIMILAR PROVISIONS IN H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE4

II. SAVINGS AND INVESTMENT TAX RELIEF PROVISIONS

C Tax treatment of income and losses on derivatives (sec. 205 of the House bill and sec. 1306 of the Senate amendment)

IV. EDUCATION TAX RELIEF PROVISIONS

C Student loan interest deduction (secs. 112 and 406 of the House bill and sec.401 of the Senate amendment)

C Eliminate tax on awards from certain scholarship programs (sec. 403 of the House bill and Senate amendment)

V. HEALTH CARE TAX RELIEF PROVISIONS

C Above-the-line health insurance deduction (sec. 501 of the House bill and the Senate amendment)

C Long-term care insurance provisions (sec. 502 of the House bill and the Senate amendment)

C Vaccine excise tax provisions (sec. 506 of the House bill and sec. 504 of the Senate amendment)

VI. ESTATE AND GIFT TAX RELIEF PROVISIONS

C Provisions relating to generation-skipping trusts (secs. 631-634 of the House bill and secs. 731-734 of the Senate amendment)

VII. DISTRESSED COMMUNITIES AND INDUSTRIES PROVISIONS

C Increase the maximum dollar amount of reforestation expenditures eligible for amortization and credit (sec. 731 of the House bill
-8-

and sec. 1108 of the Senate amendment)

VIII. SMALL BUSINESS TAX RELIEF PROVISIONS

C Accelerate 100-percent self-employed health insurance deduction (sec. 801 of the House bill and sec. 601 of the Senate amendment)

IX. INTERNATIONAL TAX RELIEF PROVISIONS

C Apply look-through rules to dividends from noncontrolled section 902 corporations and separate basket excess credit carryovers

(sec. 902 of the House bill and the Senate amendment)

C Subpart F treatment of pipeline transportation income and income from transmission of high voltage electricity (secs. 903-904 of the

House bill and the Senate amendment)

C Repeal limitation on Foreign Sales Corporation tax benefits for defense products (sec. 906 of the House bill and sec. 908 of the

Senate amendment)

XI. REAL ESTATE RELIEF PROVISIONS

C Real Estate Investment Trust Provisions (secs. 1101-1106, 1111, 1121, 1131, 1141, and 1151 of the House bill and secs. 1021-1026,

1031, 1041, 1051, 1061, and 1071 of the Senate amendment)

C Accelerate scheduled increases in tax-exempt private activity bond volume limits (sec. 1351 of the House bill and sec. 1081 of the

Senate amendment)

XII. PENSION REFORM PROVISIONS

A. Expanding Coverage

C Modification of top-heavy rules (sec. 1203 of the House bill and sec. 319 of the Senate amendment)
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C Section 457 plan coordination rules (sec. 1205 of the House bill)

C Elimination of IRS user fees for requests regarding employer plans (sec. 1206 of the House bill and sec. 317 of the Senate

amendment)

C Definition of compensation for deduction purposes (sec. 1207 of the House bill)

C Increase minimum benefits (sec. 1209 of the House bill)

C Reduce PBGC premiums for new plans (secs. 315-316 of the Senate amendment)

B. Enhancing Fairness for Women

C Modification of 401(k) hardship withdrawal safe harbor (sec. 324 of the Senate amendment)

D. Strengthening Pension Security and Enforcement

C Notice of significant reduction in future benefit accruals (sec. 1245 of the House bill and sec. 344 of the Senate amendment)

C Missing plan participants (sec. 342 of the Senate amendment)

C Investment of employee contributions in section 401(k) plans (sec. 345 of the Senate amendment)

E. Reducing Regulatory Burdens

C Periodic pension benefit statements (sec. 351 of the Senate amendment)

C Notice and consent period regarding distributions (sec. 1255 of the House bill and sec. 365 of the Senate amendment)

C Repeal of transition rule regarding definition of highly compensated employees (sec. 1256 of the House bill and sec. 366 of the

Senate amendment)
-10-

C Treatment of employer-provided retirement advice (sec. 1258 of the House bill and sec. 352 of the Senate amendment)

C Model plans for small businesses (sec. 1260 of the House bill)

C Reporting simplification (sec. 1261 of the House bill and sec. 370A of the Senate amendment)

C Improvements to Employee Plans Compliance and Resolution System (sec. 1262 of the House bill)

C Substantial owner benefits in terminated plans (sec. 363 of the Senate amendment)

C Annual report dissemination (sec. 369 of the Senate amendment)

C Employer-provided transit passes (sec. 370 of the Senate amendment)

XIII. MISCELLANEOUS PROVISIONS

C Permit consolidation of life insurance and nonlife insurance companies (sec. 1315 of the House bill and sec. 1113 of the Senate

amendment)

C Tax treatment of Alaska Native Settlement Trusts (sec. 1352 of the House bill and sec. 1102 of the Senate amendment)

XIV. EXPIRING TAX PROVISIONS

C Extension of Research and Experimentation Credit (sec. 1401 of the House bill and sec. 1201 of the Senate amendment)

C Work Opportunity Tax Credit (sec. 1404 of the House bill and sec. 1204 of the Senate amendment)

C Welfare to Work Tax Credit (sec. 1404 of the House bill and sec. 1204 of the Senate amendment)

XV. REVENUE OFFSET PROVISIONS
-11-

C Impose limitation on prefunding of certain employee benefits (sec. 1503 of the House bill and sec. 1312 of the Senate amendment)

C Increase elective withholding rate for nonperiodic distributions from deferred compensation plans (sec. 1504 of the House bill and

sec. 1303 of the Senate amendment)

C Prevent the conversion of ordinary income or short-term capital gains into income eligible for long-term capital gains (sec. 1506 of

the House bill and sec. 1314 of the Senate amendment)

C Treatment of excess pension assets used for retiree health benefits (sec. 1507 of the House bill and sec. 1305 of the Senate

amendment)
-12-

COMPARISON OF PRINCIPAL DIFFERENCES IN PROVISIONS IN H.R. 2488,

 AS PASSED BY THE HOUSE AND THE SENATE

(OTHER THAN IDENTICAL AND SIMILAR PROVISIONS)

ITEM HOUSE BILL SENATE AMENDMENT

I. BROAD-BASED AND FAMILY TAX

RELIEF

A. Broad Based Tax Relief (sec. 101 of the

House bill and secs. 101-102 of the Senate

amendment)

Reduce all individual income tax and AMT

rates -- 

C 1.0% (2001-2003)

C 2.5% (2004)

C 5.0% (2005-2007)

C 7.5% (2008)

C 10.0% (2009)

C 15% individual income tax rate reduced

to 14% (2001).

C Increase width of 14% bracket

C $2,000/$4,000 (2006)

C $2,500/$5,000 (2007 and thereafter)

(Senate floor amendment)

B. Marriage Penalty Relief (sec. 111 of the

House bill and sec. 201 of the Senate

amendment)

C Standard deduction for joint returns two

times standard deduction for single

taxpayers, phased in:

2001 - 1.778

2002 - 1.889

2003 & thereafter - 2.000

C Same as House, phased in:

2001 - 1.671

2002 - 1.700

2003 - 1.727

2004 - 1.837

2005 - 1.951

2006 - 1.953

2007 - 1.973

2008 & thereafter - 2.000

(Senate floor amendment)

C Married couple can elect to file single

returns on combined form, effective

2005
ITEM HOUSE BILL SENATE AMENDMENT

-13-

C. Marriage Penalty Relief for the Earned

Income Credit (sec. 202 of the Senate

amendment)

No provision C Beginning point of EIC phase out for

joint returns increased by $2,000,

effective 2005

C Index after 2005

D. Individual AMT (secs. 121 and 302(b)

of the House bill and secs. 206, 907, and

1139 of the Senate amendment)

C Phase out individual AMT by 2009 and

allow individuals to use AMT credits to

offset 90% of regular tax liability

C Repeal 90% limit on foreign tax credits

under the AMT, effective taxable years

after 2001

C Allow personal exemption in computing

AMT above $300 per exemption,

effective after 2005 (Senate floor

amendment)

C Same as House bill, but effective taxable

years after 2004

E. Increase and Expand the Dependent

Care Tax Credit (sec. 204 of the Senate

amendment)

No provision C Increase maximum credit from 30% to

40%; phase out begins at $30,000 of

AGI

C Index maximum expenses

C $200/month deemed expenses for

children under age 1 (Senate floor

amendment)

C Effective - 2001

F. Tax Credit for Employer-Provided

Child Care Facilities (sec. 205 of the

Senate amendment)

No provision $150,000 maximum credit for qualified

child care (25% credit) and referral

services (10% credit); effective - 2001
ITEM HOUSE BILL SENATE AMENDMENT

-14-

G. Expansion of Adoption Credit (sec. 210

of the Senate amendment)

No provision C $10,000 credit for special needs

adoption without regard to expenses

C Repeal sunset of adoption credit for nonspecial needs adoptions

C Effective after 2000

(Senate floor amendment)

II. SAVINGS AND INVESTMENT TAX

RELIEF

A. Partial Exclusion of Interest and

Dividends (sec. 201 of the House bill)

C $50/$100 (2001-2002)

C $100/$200 (2003-2004)

C $200/$400 (2005 & thereafter)

No provision

B. Individual Capital Gains (sec. 202 of

the House bill and sec. 207 of the Senate

amendment)

C Reduce rates from 20%/10% to

15%/7.5%

C 25% rate on unrecaptured 1250 gain

reduced to 20%

C Repeal 8%/18% rates on gain from

property held more than 5 years

C Effective - July 1, 1999

C Deduction up to $1,000 of net capital

gain, effective 2006

C Collectibles taxed at ordinary income

rates

(Senate floor amendment)

C. Capital Gains of Designated Settlement

Funds (sec. 203 of the House bill)

Net capital gain of a designated settlement

fund taxed at individual capital gains rates,

effective taxable years beginning after

December 31, 1999

No provision
ITEM HOUSE BILL SENATE AMENDMENT

-15-

D. Suspend Five-Year Period for

Exclusion of Gain on Sale of Principal

Residence for Members of Uniformed

Service and Foreign Service (sec. 204 of

the House bill)

Suspends 5-year period indefinitely,

effective date of enactment

No provision

E. Suspend Five-Year Period for Exclusion

of Gain on Sale of Principal Residence for

Employees Sent Overseas by Employer

(sec. 204 of the House bill)

Suspends 5-year period for up to 5 years,

effective date of enactment

No provision

F. Treatment of Worthless Stock of a

Subsidiary (sec. 206 of the House bill)

Income from active business of insurance

company or financial institution not

passive income for determining eligibility

for ordinary loss on worthlessness stock,

effective for stock becoming worthless in

taxable years beginning after December 31,

1999

No provision
ITEM HOUSE BILL SENATE AMENDMENT

-16-

G. Individual Retirement Arrangements

(sec. 113 of the House bill and secs. 301-

305 of the Senate amendment)

C Increase Roth IRA conversion limit to

$160,000 for joint filers, effective 2000

C Increase Roth IRA conversion limit to

$1 million, effective 2003

C Increase annual contribution limit for all

IRAs by $1,000/year, beginning in 2001

until it reaches $5,000 in 2005; index

thereafter

C Increase AGI limitations on deductible

IRAs by $2,000/$4,000 - 2008

$2,500/$5,000 - 2009 - 2010; index

thereafter

C Eliminate AGI limit for contributions to

a Roth IRA, beginning in 2003 (Senate

floor amendment)

C Allow IRAs to invest in coins issued by

a State or that are or were U.S. legal

tender, beginning in 2000

C Allow additional catch-up contributions

for individuals over age 50, effective

2001

C Allow qualified plans to include IRAs,

effective 2000 (Senate floor

amendment)

H. Creation of Individual Development

Accounts (sec. 303 of the Senate

amendment)

No provision 85% credit to financial institutions for

matching contributions to IDAs up to $300

maximum credit per year, effective for

contributions after 2000 and before 2006
ITEM HOUSE BILL SENATE AMENDMENT

-17-

III. BUSINESS INVESTMENT AND

JOB CREATION

A. Corporate Capital Gains (sec. 301 of the

House bill)

Alternative 30% rate on net capital gain if

less than regular tax, effective after 2004

No provision

B. Corporate Alternative Minimum Tax

(sec. 302 of the House bill and secs. 907

and 1103 of the Senate amendment)

C Allow AMT credits to offset portion of

tentative minimum tax:

20% - 2005

30% - 2006

40% - 2007

50% - 2008

After 2008, repeal corporate AMT and

allow AMT credit to offset 90% regular

tax liability

C Repeal 90% limit on foreign tax credits

under the AMT, effective taxable years

after 2001

C 5-year old AMT credits allowed to offset

50% of excess of tentative minimum tax

over regular tax, effective 2004

C Same as House bill, but effective taxable

years after 2004
ITEM HOUSE BILL SENATE AMENDMENT

-18-

IV. EDUCATION TAX RELIEF

A. Expand Education Savings Accounts

(sec. 401 of the House bill)

C Increase contribution limit to $2,000

C Include K-12 expenses

C Special needs beneficiaries

C Contributions by corporations

C Contributions until April 15

C Coordination with HOPE credit, LLC,

and QSTPs

C Effective 2001

No provision

B. Qualified State Tuition Plans

(“QSTPs”) (sec. 402 of the House bill and

the Senate amendment)

C Allow private plans, effective 2001

C Exclusion from gross income for

distributions (effective 2001 for State

plans, 2004 for private plans)

C Coordination with HOPE and LLC and

Education IRAs, effective 2001

C Same as House, effective 2000

C Same as House, except effective 2000

for State plans 

C Same as House, effective 2000

C Renames section as “Collegiate

Learning and Student Savings (CLASS)

Act” (Senate floor amendment)

C. Employer-Provided Educational

Assistance (sec. 404 of the Senate

amendment)

No provision C Extend exclusion for employer-provided

educational assistance through 2003

(Senate floor amendment)

C Extend exclusion to graduate courses,

effective 2000-2003
ITEM HOUSE BILL SENATE AMENDMENT

-19-

D. Liberalize Construction Bond

Expenditure Rule for Governmental Public

School Bonds (sec. 405 of the House bill)

Allows 4-year expenditure period for

public school bonds in lieu of current 2-

year period, effective 1/1/00

No provision

E. Allow Issuance of Tax-Exempt Private

Activity Bonds for Public Schools (sec. 406

of the Senate amendment)

No provision Allows issuance of private activity bonds

for public schools, subject to $10/resident

($5 million minimum) cap, effective 1/1/00

F. Permit Limited Guarantees of Public

School Construction Bonds by Federal

Home Loan Banks (sec. 407 of the Senate

amendment)

No provision Allows Federal Home Loan Banks to

guarantee up to $500 million/year of public

school bonds, effective on enactment of

future authorizing legislation

G. Expansion of Deduction for Computer

Donations to Schools (sec. 1124 of the

Senate amendment)

No provision Extends age of eligible computers from 2

to 3 years and permits donation of

reacquired computers, effective taxable

years ending after date of enactment

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-20-

H. Credit for Computer Donations to

Schools and Senior Centers (sec. 1125 of

the Senate amendment)

No provision C 30% credit for donations to schools and

senior centers (whether or not tax

exempt); effective for 2 years beginning

with taxable year beginning 1 year after

after date of enactment

C 50% credit for donations to schools and

senior centers in empowerment zones,

enterprise communities, and Indian

reservations, effective for 3 years

beginning with taxable years beginning

after date of enactment

(Senate floor amendment)

I. Credit for Interest on Higher Education

Loans (sec. 208 of the Senate amendment)

No provision C 100% credit for up to $1,500 of interest

paid on higher education loans for first

60 months interest paid

C Phase out $50,000-$70,000

(single)/$80,000-$100,000 (joint)

C Effective 2005

J. Scholarships for Children of Employees

(sec. 408 of the Senate amendment)

No provision $2,000 exclusion for scholarships provided

to children of employees, effective taxable

years beginning after date of enactment

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-21-

K. Two-Percent Floor Not to Apply to

Professional Development Expenses of

Teachers (sec. 1123 of the Senate

amendment)

No provision C 2% floor on miscellaneous itemized

deductions does not apply to qualified

professional development expenses

effective for taxable years beginning

after 2000 and ending before 2005

C Deduction for $125 for books, supplies,

etc., effective for taxable years

beginning after 2000 and ending before

2005

(Senate floor amendment) 
ITEM HOUSE BILL SENATE AMENDMENT

-22-

V. HEALTH CARE TAX RELIEF

PROVISIONS

A. Medical Savings Accounts (sec. 503 of

the House bill)

C Make MSAs permanent and remove cap

C Allow all employers to offer an MSA

C Permit both employer and employee

contributions

C Allow MSAs to be offered in a cafeteria

plan

C Lower minimum deductible to $1,000

($2,000 for family coverage) and allow

contributions up to deductible

C Effective after 2000

No provision

B. Expand Human Clinical Trials

Expenses Qualifying for Orphan Drug Tax

Credit (sec. 505 of the House bill)

Effective after 1999 No provision

C. Deduction for Prescription Drug

Insurance (sec. 507 of the House bill)

Above-the-line deduction for prescription

drug insurance for Medicare beneficiaries

if certain Medicare and low-income

assistance provisions are in effect.

No provision

D. Credit for Employee Health Insurance

Expenses of Small Employers (sec. 609 of

the Senate amendment)

No provision 60% (70% for family coverage) credit for

up to $1,000 ($1,715 for family coverage)

of small employer health insurance

expenses for low-wage employees,

effective 2001

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-23-

VI. ESTATE AND GIFT TAX RELIEF

PROVISIONS

A. Convert Unified Credit into Unified

Exemption (sec. 621 of the House bill and

sec. 702 of the Senate amendment)

Effective after 2000 Effective after 2003

B. Reduce Estate, Gift, and GST Tax Rates

(sec. 611 of the House bill and sec. 701 of

the Senate amendment)

C Repeal 5-percent bubble (which phases

out the benefit of the graduated rates),

effective after 2000

C Reduce rates above 53 percent in 2001

C Reduce rates above 50 percent in 2002

C Reduce rates by 1 percent, 2003-2006

C Reduce rates by 1.5 percent in 2007

C Reduce rates by 2 percent in 2008

C Repeal after 2008, with carryover basis

regime

C Same as House bill, but effective after

2003 

C Reduce rates above 53 percent in 2001

(Senate floor amendment)

C. Increase Unified Exemption (sec. 702

of the Senate amendment)

No provision Increase unified exemption from $1

million to $1.5 million, effective after

2006.
ITEM HOUSE BILL SENATE AMENDMENT

-24-

D. Expand Estate Tax Rule for

Conservation Easements (sec. 711 of the

Senate amendment)

No provision C Increase distance from national park or

wilderness area from 25 to 50 miles,

effective after 1999

C Date for determining easement

compliance is date of donation, effective

after 1997

C Increase distance from Urban National

Forest from 10 to 25 miles, effective

after 1999 (Senate floor amendment)

E. Increase Gift Tax Annual Exclusion

(sec. 721 of the Senate amendment)

No provision Increase gift tax annual exclusion to

$20,000 in 2005

(Senate floor amendment)

F. Increase Maximum Family-Owned

Business Deduction (sec. 608 of the Senate

amendment)

No provision Increase maximum deduction from

$675,000 to $1.975 million, effective in

2001

(Senate floor amendment)

VII. DISTRESSED COMMUNITIES

AND INDUSTRIES PROVISIONS
ITEM HOUSE BILL SENATE AMENDMENT

-25-

A. Renewal Community Provisions (secs.

701-706 of the House bill)

Allows HUD designation of 20 renewal

communities:

C zero-percent capital gains

C family development accounts

C commercial revitalization deduction

C additional 179 expensing

C brownfields

C WOTC

C effective 2001 through 2007

No provision

B. Provide That Federal Production

Payments to Farmers Are Taxable in Year

Received (sec. 711 of the House bill)

Effective date of enactment No provision

C. Temporary Extension of Suspension of

Taxable Income Limit on Percentage

Depletion (sec. 724 of the House bill)

Suspend 65 percent of taxable income limit

for 6 years (through 2005)

No provision

D. Determination of Small Refiner

Exception to Oil Depletion Deduction (sec.

725 of the House bill)

Effective after 1999 No provision

E. Minimum Tax Relief for the Steel

Industry (sec. 741 of the House bill)

Effective after 1998 No provision

VIII. SMALL BUSINESS TAX RELIEF

PROVISIONS
ITEM HOUSE BILL SENATE AMENDMENT

-26-

A. Farmer and Fishermen Income

Averaging (sec. 604 of the Senate

amendment)

No provision C Coordinate farm income averaging with

the AMT

C Effective after 1999

C Extend to fishermen (Senate floor

amendment)

B. Farm, Fish, and Ranch Risk

Management (“FFARRM”) Accounts (sec.

605 of the Senate amendment)

No provision C Effective after 2000

C Include fishermen (Senate floor

amendment)

C. S Corporation Banks (sec. 606 of the

Senate amendment)

No provision C Interest and certain dividends of banks

not treated as passive income

C Director shares allowed

C Effective taxable years after 1999

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-27-

IX. INTERNATIONAL TAX RELIEF

PROVISIONS

A. Allocate Interest Expense on

Worldwide Basis (sec. 901 of the House

bill and the Senate amendment)

C Worldwide affiliated group election

includes greater than 50 percent owned

(by vote or value) foreign corporations

C Annual subgroup elections available for

worldwide group and present-law group

C Annual financial institution group

elections available for worldwide group

and present-law group

C Effective taxable years after 2001

C Worldwide affiliated group election

includes greater than 80 percent owned

(by vote and value) foreign corporations

C No subgroup elections

C One-time financial institution group

election available only if worldwide

group election made

C Effective taxable years after 2004

(Senate floor amendment)

B. Recharacterization of Overall Domestic

Loss (sec. 905 of the House bill)

Effective losses incurred in taxable years

after 2004

No provision

C. Modify Treatment of RIC Dividends

Paid to Foreign Persons (sec. 907 of the

House bill)

Effective taxable years of RICs after 2004 No provision

D. Repeal of Special Rules for Applying

Foreign Tax Credit in Case of Foreign Oil

and Gas Income (sec. 908 of the House

bill)

Effective taxable years after 2004 No provision

E. Study of Proper Treatment of European

Union under Subpart F Same Country

Exceptions (sec. 909 of the House bill)

Study due no later than 6 months after date

of enactment

No provision
ITEM HOUSE BILL SENATE AMENDMENT

-28-

F. Provide Waiver From Denial of Foreign

Tax Credits (sec. 910 of the House bill)

Effective date of enactment No provision

G. Increase Dollar Limitation on Section

911 Exclusion (sec. 912 of the House bill)

C Increase $3,000/year (beginning in

2003) to $95,000

C Index in 2008

No provision

H. Exempt Certain Sales of Frequent-Flyer

and Similar Reduced-Fare Air

Transportation Rights From Aviation

Excise Taxes (sec. 906 of the Senate

amendment)

No provision Effective 2005 (Senate floor amendment)

X. TAX-EXEMPT ORGANIZATION

PROVISIONS

A. Conform Provisions Relating to

Arbitrage Treatment to Reflect Proposed

State Constitutional Amendments (sec.

1002 of the House bill)

Conforms Fund payout rules to state

constitutional amendments, effective

1/1/00

No provision

B. Allow Treasury to Grant Waivers from

Sec. 4941 Self-Dealing Prohibitions (sec.

1004 of the House bill)

Effective for transactions occurring after

DOE 

No provision

C. Extend Declaratory Judgment

Procedures to Non-501(c)(3) Tax-Exempt

Organizations (sec. 1005 of the House bill)

Effective after DOE No provision
ITEM HOUSE BILL SENATE AMENDMENT

-29-

D. Simplify Lobbying Expenditure

Limitations (sec. 803 of the Senate

amendment)

No provision Repeal separate expenditure limitation on

grass roots lobbying, effective 2000 

E. Tax-Free Withdrawals From IRAs for

Charitable Purposes (sec. 804 of the Senate

amendment)

No provision Effective taxable years beginning after

2000

F. Charitable Contribution Deduction for

Certain Expenses in Support of Native

Alaskan Subsistence Whaling (sec. 806 of

the Senate amendment)

No provision Effective 2000

G. Charitable Giving Provisions (secs.

807-809 of the Senate amendment)

No provision C Extend deadline for contributions to

low-income schools to return filing date

(effective 2000)

C $50/$100 non-itemizer deduction (for

2005 and 2006) (Senate floor

amendment)

C Phased-in increase in AGI percentage

limitations for individuals and

corporations (effective 2000) 

H. Modify Private Foundation Excess

Business Holdings Rules for Publicly

Traded Stock (sec. 810 of the Senate

amendment)

No provision Effective for foundations established by

bequest of decedents dying after 2006
ITEM HOUSE BILL SENATE AMENDMENT

-30-

I. Certain Costs of Private Foundation in

Removing Hazardous Substances Treated

as Qualifying Distribution (sec. 811 of the

Senate amendment)

No provision Permits distributable amount of private

foundation to include costs of removing

hazardous substances, effective date of

enactment (for facilities transferred before

December 11, 1980)

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-31-

XI. REAL ESTATE TAX RELIEF

PROVISIONS

A. Modify At-Risk Rules for Publicly

Traded Nonrecourse Debt (sec. 1161 of the

House bill)

Effective after 1999 No provision

B. Qualified Lessee Construction

Allowances Not Limited to Short-Term

Leases for Certain Retailers (sec. 1171 of

the House bill)

Effective after 1999 No provision

C. Exclusion From Gross Income for

Certain Contributions to the Capital of

Certain Retailers (sec. 1172 of the House

bill)

Effective after 1999 No provision

D. Low-Income Housing Tax Credit (secs.

1333-1337 of the House bill and sec. 1001

of the Senate amendment)

C Increase per capita cap to $1.75 (2000-

2004), index thereafter

C Change stacking rules

C Change credit allocation rules

C Increase per capita cap to $1.75 (2001-

2005), indexed beginning in 2006

(Senate floor amendment)

C Allow $2 million small State minimum,

beginning in 2001

C Loosens definition of Federally

subsidized building for purposes of

Native American Housing Assistance

(Senate floor amendment)

E. Tax Credit for Renovating Historic

Homes (sec. 1011 of the Senate

amendment)

No provision 20% credit up to $20,000; Effective after

1999 
ITEM HOUSE BILL SENATE AMENDMENT

-32-

F. Treatment of Leasehold Improvements

(sec. 1091 of the Senate amendment)

No provision 15-year recovery period, effective after

2002

XII. PENSION REFORM PROVISIONS

A. Expanding Coverage

1. Increase contribution and benefit limits

(sec. 1201 of the House bill and sec. 312

of the Senate amendment)

C Increase defined benefit plan limit to

$160,000; lower early retirement age to

62 and lower normal retirement age to

65

C Increase defined contribution dollar

limit to $40,000

C Increase compensation that can be taken

into account to $200,000

C Increase section 457 plan dollar limit to

$11,000 in 2001, $12,000 in 2002,

$13,000 in 2003, $14,000 in 2004,

$15,000 in 2005 and index thereafter

C No provision

C No provision

C No provision

C Increase section 457 dollar limit to

$9,000 in 2001, $10,000 in 2002,

$11,000 in 2003, $12,000 in 2004 and

index thereafter

2. SAFE annuities and trusts (sec. 318 of

the Senate amendment)

No provision Adopts simplified plan called the SAFE.
ITEM HOUSE BILL SENATE AMENDMENT

-33-

B. Enhancing Fairness for Women

1. Catch-up contributions (sec. 1221 of the

House bill and sec. 321 of the Senate

amendment)

Increases dollar limit on deferrals under

section 401(k) plans, section 403(b) plans,

SIMPLE, and section 457 plans for

individuals who have attained age 50 by

$1,000 each year in 2001 through 2005

until maximum catch-up is $5,000;

nondiscrimination rules apply.

Increases dollar limit on deferrals under

section 401(k) plans, section 403(b) plans,

SIMPLE, and section 457 plans, for

individuals who have attained age 50 by

10% each year in 2001 through 2005, until

maximum catch-up is 50% of dollar limit;

no nondiscrimination rules apply

2. Minimum distribution rules (secs. 1224

and 1239 of the House bill)

C Conforms post-death rules to pre-death

rules

C Reduces excise tax for failure to comply

to 10%

C Directs Treasury to finalize and simplify

regulations

C Conforms 457 plan rules to qualified

plan rules

C Effective 2001

No provision

E. Reducing Regulatory Burdens

1. Nondiscrimination provisions (secs.

1251 and 1253 of the House bill and

secs. 361 and 368 of the Senate

amendment)

C Repeal multiple use test

C Directs Treasury to revise regulations

regarding use of facts and circumstances

under nondiscrimination and line of

business rules

C No provision

C Directs Treasury to implement

determination letter process regarding

use of facts and circumstances under

nondiscrimination and coverage rules

C Plans of international organizations not

subject to nondiscrimination rules
ITEM HOUSE BILL SENATE AMENDMENT

-34-

2. Treatment of multiemployer plans under

section 415 (sec. 346 of the Senate

amendment)

C 100 percent of compensation defined

benefit limit does not apply to

multiemployer plans

C Same as House bill

C Multiemployer plans not aggregated

with other plans under section 415

except for defined benefit dollar limit

C Governmental plan early retirement

rules apply to multiemployer plans

3. Increase section 415 early retirement

limit for governmental, multiemployer 

and certain other plans (sec. 348 of the

Senate amendment)

No provision C Increase floor on reduction at age 55

from $75,000 to 80% of defined benefit

dollar limit

C Effective after 1999

(Senate floor amendment)

XIII. MISCELLANEOUS PROVISIONS

A. Expand Employer Reporting on Annual

Wage and Tax Statements (sec. 1303 of the

House bill)

Effective after 1999 No provision

B. Survivor Benefits of Public Safety

Officers Killed in the Line of Duty (sec.

1304 of the House bill)

Effective payments after 1999 No provision

C. Distributions From Publicly Traded

Partnerships Treated as Qualifying Income

of Regulated Investment Companies (secs.

1311-1312 of the House bill)

Taxable years after 2000 No provision
ITEM HOUSE BILL SENATE AMENDMENT

-35-

D. Equalize the Tax Treatment of “Clean

Fuel” Vehicles and Oversized Vehicles

(sec. 1313 of the House bill)

Effective 1/1/2000 No provision

E. Nuclear Decommissioning (sec. 1314 of

the House bill)

C Repeals cost of service requirement

C Allows deductibility of transfers to

qualified fund

C Effective taxable years after 1999

No provision

F. Consolidate Code Provisions Governing

The Hazardous Substance Superfund and

Leaking Underground Storage Tank Trust

Fund (sec. 1321 of the House bill)

Consolidates Trust Fund provisions into a

new Environmental Remediation Trust

Fund, effective 10/1/99

No provision

G. Repeal Diesel Fuel Tax on Railroads

and General Fund Tax on Inland Waterway

Barge Fuel (sec. 1322 of the House bill and

sec. 1101 of the Senate amendment)

Repeals LUST and General Fund taxes on

rail diesel fuel and General Fund tax on

inland waterway barge fuels; LUST,

effective 10/1/99; General Fund, effective

10/1/03

Same as House bill, except all changes

effective 10/1/00

H. Repeal Excise Tax on Tackle Boxes

(sec. 1323 of the House bill)

Repeals tax, effective 30 days after

enactment

No provision

I. Entrepreneurial Equity Capital

Formation (“SSBICS”) (secs. 1341-1347 of

the House bill)

Increased exclusion and rollover benefits

and pass-through treatment, after date of

enactment.

No provision

J. Clarification of Depreciation Study (sec.

1354 of the House bill)

Clarify scope of depreciation study No provision
ITEM HOUSE BILL SENATE AMENDMENT

-36-

K. Tax Court Provisions (secs. 1361-1363

of the House bill)

C Authorizes Tax Court to charge a filing

fee up to $60

C Makes Tax Court fee imposed on

practitioners available to provide

services to pro se taxpayers

C Makes principle of equitable

recoupment available

C Effective date of enactment

No provision

L. Modify Distilled Spirits Tax Collection

Rules (secs. 1371-1380 of the House bill)

Delays tax collection point to wholesale

dealer transfer to retailer, imposes a 1.5%

surtax on wholesalers

No provision

M. Simplify the Active Business Rules for

Tax-Free Spin-Offs (sec. 1107 of the

Senate amendment)

No provision Simplifies rule by treating certain members

of an affiliated group as 1 corporation

N. Expand Rural Airports Eligibility for

Reduced Tax Rate (sec. 1111 of the Senate

amendment)

No provision Extends reduced tax rates to small airports

not connected to larger airports by paved

roads, effective in 2000

O. Dividends Paid by Cooperatives (sec.

1112 of the Senate amendment)

No provision Capital stock dividends do not reduce

patronage dividends, effective taxable

years after date of enactment

P. Modify Personal Holding Company

“Lending or Finance Business” Exception

(sec. 1113 of the Senate amendment)

No provision Effective taxable years after 1999
ITEM HOUSE BILL SENATE AMENDMENT

-37-

Q. Tax Credit for Modifications to InterCity Buses Required Under the Americans

With Disabilities Act of 1990 (sec. 1115 of

the Senate amendment)

No provision Extend 50% credit in present law to intercity buses, up to $15,000/ bus, Effective

2000-2011

R. Business Meals Deduction Provisions

1. Restore 80-percent meals deduction

(sec. 804 of the House bill)

Increases deduction 5% per year to 80%,

effective taxable years after 2004

No provision

2. Increased deduction for business meals

while operating under Department of

Transportation hours of service

limitations (sec. 1116 of the Senate

amendment)

No provision Accelerate 80% meals deduction for

taxpayers subject to Department of

Transportation hours of service limitations

by one year (to 2007)

S. Allow Issuance of Tax-Exempt Private

Activity Bonds for Highway Projects (sec.

1117 of the Senate amendment)

No provision Allows up to $15 billion of private activity

tax-exempt bonds to be issued for 15

highway pilot projects (Senate floor

amendment)

T. Provisions Relating to Tax Incentives

for the District of Columbia

1. Extend tax credit for first-time D.C.

homebuyers (sec. 1118 of the Senate

amendment)

No provision One-year extension; increases phase-out

for joint filers so that it is twice that of

individuals

2. Expand zero-percent capital gains rate

for D.C. Zone assets (sec. 1119 of the

Senate amendment)

No provision Eliminates the 10-percent poverty rate

limitation (so that it applies citywide)
ITEM HOUSE BILL SENATE AMENDMENT

-38-

U. Establish a Seven-Year Recovery

Period for Natural Gas Gathering Lines

(sec. 1120 of the Senate amendment)

No provision Effective after date of enactment

 V. Reclassify Scheduled Flights on Small

Seaplanes as Noncommercial Aviation

(sec. 1121 of the Senate amendment)

No provision Reclassifies small seaplane flights as noncommercial aviation, subject to full fuels

tax, but exempt from ticket tax

W. Additional Miscellaneous Provisions

1. Exemption from Federal income tax for

amounts received by Holocaust victims

and heirs (sec. 1122 of the Senate

amendment)

No provision Effective for amounts received before, on,

or after date of enactment (Senate floor

amendment)

2. Medical innovation tax credit (sec. 1137

of the Senate amendment)

No provision 40% credit for certain human clinical

testing of any drug, biologic, or medical

device, effective for taxable years

beginning after 1998 (Senate floor

amendment)

3. Capital gain holding period for horses

(sec. 812 of the Senate amendment)

No provision Reduce capital gain holding period for

horses from 2 years to 1 year, effective

2001 (Senate floor amendment)

4. Disclosure of tax information for

combined employment tax reporting

(sec. 1131 of the Senate amendment)

No provision Permit disclosure of taxpayer identity and

signatures to facilitate combined

Federal/State employment tax reporting

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-39-

5. Tax rates for trusts with disabled

beneficiary (sec. 211 of the Senate

amendment)

No provision Apply single taxpayer rates to trusts for 1

beneficiary who is permanently and totally

disabled, effective taxable years beginning

after 2006

(Senate floor amendment)

6. Taxation of flights on noncommercial

aircraft (sec. 370 of the Senate

amendment)

No provision Provide exclusion for certain

noncommercial air transportation provided

to employees and certain other individuals,

effective after 1999 (Senate floor

amendment)

7. Tax-exempt bonds for timber

conservation organizations (sec. 1133 of

the Senate amendment)

No provision Liberalizes tax-exempt bond rules for

section 501(c)(3) organizations engaged in

timber conservation activities

(Senate amendment)

8. Exclusion for certain severance

payments (sec. 1135 of the Senate

amendment)

No provision Exclude $2,000 of severance pay, for 2001

only

(Senate floor amendment)

9. FUTA treatment of maple syrup workers

(sec. 1132 of the Senate amendment)

No provision Exclude maple syrup workers from FUTA

tax, effective date of enactment

(Senate floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-40-

XIV. EXPIRING TAX PROVISIONS

A. Extend and Modify Wind and ClosedLoop Biomass Electricity Credit (sec. 1205

of the Senate amendment)

No provision Extends current credit (7/1/99 - 6/30/04)

and expands to include electricity produced

from the following sources at facilities

placed in service during the periods shown:

Poultry waste -- (12/31/99 - 6/30/04)

Landfill gas -- (12/31/99 - 6/30/04)

Open-loop biomass -- (through 12/31/03,

but no credits before 1/1/00 for existing

facilities)

B. Alaska Exemption from Diesel Dyeing

(sec. 1206 of the Senate amendment)

No provision Permanent

C. Expensing of Environmental

Remediation Expenditures (sec. 1207 of the

Senate amendment)

No provision 3-1/2 year extension (through June 30,

2004); include all of U.S., except

Superfund sites

XV. REVENUE OFFSET PROVISIONS

A. Exclusion of Like-Kind Exchange

Property from Nonrecognition Treatment

on Sale of a Personal Residence (sec. 1510

of the House bill)

Effective sales or exchanges after date of

enactment

No provision

B. Modify Foreign Tax Credit Carryover

Rules (sec. 1301 of the Senate amendment)

No provision Effective taxable years after 1999
ITEM HOUSE BILL SENATE AMENDMENT

-41-

C. Modify Estimated Tax Rules for

Closely Held REITS (sec. 1316 of the

Senate amendment)

No provision Effective estimated payments due on or

after September 15, 1999

D. Prohibited Allocations of Stock in an S

Corporation ESOP (sec. 1317 of the Senate

amendment)

No provision Generally effective plan years beginning

after 2000

E. Modify Anti-Abuse Rules Relating to

Assumption of Liabilities (sec. 1318 of the

Senate amendment)

No provision Effective assumptions after July 14, 1999

F. Basis Allocation Rules for Intangibles

in Certain Nonrecognition Transactions

(sec. 1319 of the Senate amendment)

No provision Effective transfers after date of enactment

G. Modify Treatment of Closely Held

REITs (sec. 1505 of the House bill and sec.

1320 of the Senate amendment)

Effective taxable years ending after July

12, 1999

Same as House, but effective for taxable

years ending after July 14, 1999, with

binding contract or SEC filing transition

relief (Senate floor amendment)

H. Distributions by a Partnership to a

Corporate Partner of Stock in Another

Corporation (sec. 1321 of the Senate

amendment)

No provision Effective for distributions made after July

14, 1999

XVI. TECHNICAL CORRECTIONS TO

THE NATIONAL SUMMIT ON

RETIREMENT SAVINGS 

No provision Add technical corrections to National

Summit on Retirement Savings (Senate

floor amendment)
ITEM HOUSE BILL SENATE AMENDMENT

-42-

XVII. SENSE OF THE CONGRESS

AND OTHER PROVISIONS

A. Sense of the Congress Regarding

Empowerment Zones (sec. 1128 of the

Senate amendment)

No provision Sense of the Congress regarding need for

additional Federal funding and tax

incentives for empowerment zones and

enterprise communities

(Senate floor amendment)

B. Sense of the Senate Regarding Savings

Incentives (sec. 1127 of the Senate

amendment)

No provision Sense of the Senate regarding need for

savings incentives by providing partial

exclusion for interest and dividends

(Senate floor amendment)

C. Sense of the Congress Regarding Small

Business Incentives (sec. 1129 of the

Senate amendment)

No provision Sense of the Congress regarding the need

for additional expensing for small business

(Senate floor amendment)

D. Direct Expenditure Block Grant (sec.

1126 of the Senate amendment)

No provision Increase in mandatory spending for child

care and development block grant

(Senate floor amendment)

XVIII. COMMITMENT TO DEBT

REDUCTION (sec. 1701 of the House

bill)

Sense of the Congress that the public debt

shall be reduced to a level below $1.6

trillion by fiscal year 2009

No provision

XIX. CONTINGENCY FOR RATE

REDUCTIONS (sec. 101 of the House

bill)

For years beginning after 2001, rate

reductions apply only after the first debt

reduction calendar year

No provision

(Senate floor vote point of order)
ITEM HOUSE BILL SENATE AMENDMENT

-43-

XX. EXCLUSION FROM PAYGO

SCORECARD (sec. 1801 of the House

bill)

OMB shall not make any estimate of direct

spending outlays and receipts under sec.

252(b) of the Balanced Budget and

Emergency Deficit Control Act of 1985

resulting from enactment of the bill

No provision

XXI. COMPLIANCE WITH

CONGRESSIONAL BUDGET ACT (sec.

1501 of the Senate amendment)

No provision Sunsets bill after fiscal year 2009