OVERVIEW OF CONFERENCE AGREEMENT FOR H.R. 2488,

THE “TAXPAYER REFUND AND RELIEF ACT OF 1999"

Prepared by the Staff

of the

JOINT COMMITTEE ON TAXATION

August 4, 1999

JCX-60-99
(i)

CONTENTS

(Page numbers in contents don’t necessarily match actual page numbers on this PDF file)

Page

INTRODUCTION AND LEGISLATIVE BACKGROUND .................... 1

PART ONE: IDENTICAL PROVISIONS IN H.R. 2488, AS PASSED

BY THE HOUSE AND THE SENATE ..................................... 2

PART TWO: SIMILAR PROVISIONS IN H.R. 2488, AS PASSED

BY THE HOUSE AND THE SENATE ..................................... 7

PART THREE: DIFFERING PROVISIONS IN H.R. 2488, AS PASSED

BY THE HOUSE AND THE SENATE ..................................... 14

I. BROAD-BASED AND FAMILY TAX RELIEF ............................ 14

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

secs. 101-102 of the Senate amendment) ............................ 14

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

of the Senate amendment) ........................................ 15

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

the Senate amendment) .......................................... 15

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

bill and secs. 206, 907, and 1139 of the Senate amendment) ............. 16

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

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

(ii)

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

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

G. Expansion of Adoption Tax Credit (sec. 210 of the Senate amendment) .... 17

II. SAVINGS AND INVESTMENT TAX RELIEF PROVISONS ............... 17

A. Partial Exclusion for Interest and Dividends (sec. 201 of the House bill) ... 17

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

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

C. Capital Gains of Designated Settlement Funds (sec. 203 of the House bill) . . 18

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

Residence for Members of Uniformed Service and Foreign Service

(sec. 204 of the House bill) ...................................... 18

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) ................................................... 18

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

House bill) ................................................... 19

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

301-303 and 305 of the Senate amendment) .......................... 20

H. Individual Development Accounts (sec. 304 of the Senate
Page

(iii)

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

III. BUSINESS INVESTMENT AND JOB CREATION PROVISIONS .......... 21

A. Corporate Capital Gains (sec. 301 of the House bill) .................. 21

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

bill and secs. 907 and 1103 of the Senate amendment) .................. 22

IV. EDUCATION TAX RELIEF PROVISIONS ............................. 23

A. Expand Education Savings Accounts (sec. 401 of the House bill) ......... 23

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

Senate amendment) ............................................. 24

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

amendment) ................................................... 24

D. Liberalize Construction Bond Expenditure Rule for Governmental Public

School Bonds (sec. 405 of the House bill) ........................... 25

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

(sec. 406 of the Senate amendment) ................................ 25

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

Home Loan Banks (sec. 407 of the Senate amendment) ................. 25

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

(iv)

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

H. Tax Credit for Computer Donations to Schools and Senior Centers 

(sec. 1125 of the Senate amendment) ............................... 26

I. Tax Credit for Interest on Higher Education Loans (sec. 208 of the Senate

amendment) ................................................... 26

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

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

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

of Teachers (sec. 1123 of the Senate amendment) ..................... 27

V. HEALTH CARE TAX RELIEF PROVISIONS ........................... 28

A. Medical Savings Accounts (sec. 503 of the House bill) ................. 28

B. Expand Human Clinical Trials Expenses Qualifying for the Orphan

Drug Tax Credit (sec. 505 of the House bill) ......................... 28

C. Deduction for Prescription Drug Insurance (sec. 507 of the House bill) .... 28

D. Tax Credit for Employee Health Insurance Expenses of Small Employers

(sec. 609 of the Senate amendment) ................................ 29

VI. ESTATE AND GIFT TAX RELIEF PROVISIONS ....................... 29

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

(v)

and sec. 702 of the Senate amendment) .............................. 29

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

House bill and sec. 701 of the Senate amendment) ..................... 29

C. Increase Unified Exemption (sec. 702 of the Senate amendment) .......... 29

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

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

E. Increase Gift Tax Annual Exclusion (sec. 721 of the Senate amendment) .... 31

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

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

VII. DISTRESSED COMMUNITIES AND INDUSTRIES PROVISIONS ........ 32

A. Renewal Community Provisions (secs. 701-706 of the House bill) ........ 32

B. Provide That Federal Production Payments to Farmers Are Taxable

in Year Received (sec. 711 of the House bill) ........................ 32

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

Depletion (sec. 724 of the House bill) .............................. 33

D. Determination of Small Refiner Exception to Oil Depletion Deduction

 (sec. 725 of the House bill) ...................................... 33

E. Minimum Tax Relief for the Steel Industry (sec. 741 of the House bill) ..... 33
Page

(vi)

VIII. SMALL BUSINESS TAX RELIEF PROVISIONS ...................... 33

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

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

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

(sec. 605 of the Senate amendment) ................................ 33

C. S Corporation Banks (sec. 606 of the Senate amendment) ............... 34

IX. INTERNATIONAL TAX RELIEF PROVISIONS ........................ 34

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

and the Senate amendment) ....................................... 34

B. Recharacterization of Overall Domestic Loss (sec. 905 of the House bill) . . 35

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

the House bill) ................................................ 35

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

Foreign Oil And Gas Income (sec. 908 of the House bill) ............... 35

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

Country Exceptions (sec. 909 of the House bill) ...................... 35

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

House bill) ................................................... 35
Page

(vii)

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

House bill) ................................................... 35

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

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

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

X. TAX-EXEMPT ORGANIZATION PROVISIONS ........................ 36

A. Conform Provisions Relating to Arbitrage Treatment to Reflect Proposed

State Constitutional Amendments (sec. 1002 of the House bill) ........... 36

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

Prohibitions (sec. 1004 of the House bill) ........................... 36

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

Organizations (sec. 1005 of the House bill) .......................... 36

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

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

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

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

F. Charitable Contribution Deduction for Certain Expenses in Support of

Alaskan Subsistence Whaling (sec. 806 of the Senate amendment) ........ 37

G. Charitable Giving Provisions (secs. 807-809 of the Senate amendment) .... 38
Page

(viii)

H. Modify Private Foundation Excess Business Holdings Rules for 

Publicly Traded Stock (sec. 810 of the Senate amendment) .............. 38

I. Certain Costs of Private Foundation in Removing Hazardous Substances

Treated as Qualifying Distribution (sec. 811 of the Senate amendment) ..... 38

XI. REAL ESTATE TAX RELIEF PROVISIONS ........................... 39

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

(sec. 1161 of the House bill) ..................................... 39

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

Leases for Certain Retailers (sec. 1171 of the House bill) ............... 39

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

Certain Retailers (sec. 1172 of the House bill) ....................... 39

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

bill and sec. 1001 of the Senate amendment) ......................... 40

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

amendment) ................................................... 40

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

amendment) ................................................... 40

XII. PENSION REFORM PROVISIONS .................................. 40

A. Expanding Coverage ........................................... 40
Page

(ix)

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

sec. 312 of the Senate amendment) .............................. 41

2. SAFE annuities and trusts (sec. 318 of the Senate amendment) ........ 41

B. Enhancing Fairness for Women ................................... 41

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

Senate amendment) .......................................... 42

2. Minimum distribution rules (secs. 1224 and 1239 of the House bill) .... 42

C. Reducing Regulatory Burdens ..................................... 42

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

and secs. 361 and 368 of the Senate amendment) ................... 43

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

House bill and sec. 346 of the Senate amendment) .................. 43

3. Increase section 415 early retirement limit for governmental, multiemployer, and certain other plans (sec. 348 of the Senate amendment) . . 43

XIII. MISCELLANEOUS PROVISIONS ................................. 44

A. Expand Employer Reporting on Annual Wage and Tax Statements

(sec. 1303 of the House bill) .................................... 44

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

(sec. 1304 of the House bill) .................................... 44

C. Distributions From Publicly Traded Partnerships Treated as Qualifying

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

(x)

House bill) .................................................. 44

D. Equalize the Tax Treatment of Oversized “Clean Fuel” Vehicles and

Electric Vehicles (sec. 1313 of the House bill) ...................... 44

E. Nuclear Decommissioning (sec. 1314 of the House bill) ............... 45

F. Consolidate Code Provisions Governing the Hazardous Substance 

Superfund and the Leaking Underground Storage Tank Trust Fund

(sec. 1321 of the House bill) .................................... 45

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) ............................................ 45

H. Repeal Excise Tax on Tackle Boxes (sec. 1323 of the House bill) ....... 45

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

the House bill) ............................................... 46

J. Clarification of Depreciation Study (sec. 1354 of the House bill) ........ 46

K. Tax Court Provisions (secs. 1361-1363 of the House bill) ............. 46

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

House bill) .................................................. 46

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

Spin-Offs (sec. 1107 of the Senate amendment) ...................... 47
Page

(xi)

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

Senate amendment) ............................................ 47

O. Dividends Paid by Cooperatives (sec. 1112 of the Senate amendment) .... 47

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

Exception (sec. 1113 of the Senate amendment) ...................... 47

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

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

amendment) .................................................. 47

R. Business Meals Deduction Provisions ............................. 47

1. Increase meals deduction (sec. 804 of the House bill) .............. 48

2. Increased deduction for business meals while operating under

Department of Transportation hours of service limitations (sec. 1116

of the Senate amendment) .................................... 48

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

Projects (sec. 1117 of the Senate amendment) ....................... 48

T. Provisions Relating to Tax Incentives for the District of Columbia ....... 48

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

Senate amendment) ......................................... 49

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

1119 of the Senate amendment) ............................... 49
Page

(xii)

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

(sec. 1120 of the Senate amendment) .............................. 49

V. Reclassify Scheduled Flights on Small Seaplanes as Noncommercial

Aviation (sec. 1121 of the Senate amendment) ....................... 49

W. Additional Miscellaneous Provisions .............................. 49

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

victims and heirs (sec. 1122 of the Senate amendment) ............ 50

2. Medical innovation tax credit (sec. 1137 of the Senate amendment) . . 50

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

amendment) ............................................. 50

4. Disclosure of tax return information for combined employment tax 

reporting (sec. 1131 of the Senate amendment) .................. 50

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

amendment) ............................................. 51

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

amendment) ............................................. 51

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

of the Senate amendment) .................................. 51

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

amendment) ............................................. 51

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

amendment) ............................................. 52

XIV. EXPIRING TAX PROVISIONS .................................... 52

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

(xiii)

(sec. 1205 of the Senate amendment) .............................. 52

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

amendment) .................................................. 52

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

Senate amendment) ............................................ 53

XV. REVENUE OFFSET PROVISIONS .................................. 53

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

on the Sale of a Principal Residence (sec. 1510 of the House bill) ....... 53

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

amendment) .................................................. 53

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

Senate amendment) ............................................ 53

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

Senate amendment) ............................................ 53

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

of the Senate amendment) ....................................... 54

F. Basis Allocation Rules for Intangibles in Certain Nonrecognition

Transactions (sec. 1319 of the Senate amendment) .................... 54

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

(xiv)

sec. 1320 of the Senate amendment) ............................... 54

H. Distributions by a Partnership to a Corporate Partner of Stock in Another

Corporation (sec. 1321 of the Senate amendment) .................... 54

XVI. TECHNICAL CORRECTIONS TO THE NATIONAL SUMMIT ON

RETIREMENT SAVINGS ........................................ 54

XVII. SENSE OF THE CONGRESS AND OTHER PROVISIONS ............ 55

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

of the Senate amendment) ....................................... 55

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

amendment) .................................................. 55

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

the Senate amendment) ......................................... 55

D. Direct Expenditure Block Grant (sec. 1126 of the Senate amendment) ..... 55

XVIII. COMMITMENT TO DEBT REDUCTION (sec. 1701 of the House bill) . . 56

XIX. CONTINGENCY FOR RATE REDUCTIONS (sec. 101 of the House bill) . . 56

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

bill) ........................................................... 56

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

(xv)

the Senate amendment) .......................................... 56
1

 This document may be cited as follows: Joint Committee on Taxation, Overview of Conference Agreement for H.R. 2488,

the “Taxpayer Refund and Relief Act of 1999" (JCX-60-99), August 4, 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 an overview of the conference agreement with

respect to H.R. 2488, the “Taxpayer Refund and Relief Act of 1999.”

This document provides an overview of the conference agreement with respect to identical provisions (Part One), similar provisions

(Part Two) (including certain minor pension reform provisions contained in either the House or Senate versions of H.R. 2488), and

differing provisions (Part Three).

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).
4

 The Roman Numeral headings refer to the headings enumerated in Part Three of this document.

-2-

 OVERVIEW OF CONFERENCE AGREEMENT OF H.R. 2488

PART ONE: IDENTICAL PROVISIONS IN H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE4

IDENTICAL PROVISIONS CONFERENCE AGREEMENT

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)

Adopt provision

C Allow nonrefundable personal credits against the individual AMT (sec. 121 of the

House bill and sec. 206 of the Senate amendment)

Adopt provision

IV. EDUCATION TAX RELIEF PROVISIONS

C Student loan interest deduction--repeal 60-month rule Adopt provision

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)

Adopt provision

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)

Adopt provision

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)

Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-3-

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

Senate amendment)

Adopt provision

C Election to expense geological and geophysical expenditures (sec. 723 of the House

bill and sec. 1105 of the Senate amendment)

Adopt provision

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))

Adopt provision

VIII. SMALL BUSINESS TAX RELIEF PROVISIONS

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

amendment)

Adopt provision

C Repeal of temporary Federal unemployment surtax (sec. 803 of the House bill and

sec. 603 of the Senate amendment)

Adopt provision

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)

Adopt provision

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)

Adopt provision

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

amendment)

Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-4-

C Provide exclusion for mileage reimbursements by charitable organizations (sec. 1302

of the House bill and sec. 805 of the Senate amendment)

Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-5-

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)

Adopt provision

C Increase limitation on SIMPLE elective contributions (sec. 1201(f) of the House bill

and sec. 312(c) of the Senate amendment)

Adopt provision

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

Senate amendment)

Adopt provision

C Elective deferrals not taken into account for deduction purposes (sec. 1204 of the

House bill and sec. 314 of the Senate amendment)

Adopt provision

C Option to treat elective deferrals as after-tax contributions (sec. 1208 of the House

bill and sec. 311 of the Senate amendment)

Adopt provision

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)

Adopt provision

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

sec. 325 of the Senate amendment)

Adopt provision

C Clarification of tax treatment of section 457 plans upon divorce (sec. 1225 of the

House bill and sec. 323 of the Senate amendment)

Adopt provision

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)

Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-6-

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

amendment)

Adopt provision

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

Senate amendment)

Adopt provision

C Rationalization of restrictions on distributions (sec. 1236 of the House bill and sec.

336 of the Senate amendment)

Adopt provision

C Purchase of service credit under governmental pension plans (sec. 1237 of the House

bill and sec. 337 of the Senate amendment)

Adopt provision

C Employers may disregard rollovers for purposes of cash-out rules (sec. 1238 of the

House bill and sec. 338 of the Senate amendment)

Adopt provision

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)

Adopt provision

C Excise tax relief for sound pension funding (sec. 1243 of the House bill and sec. 343

of the Senate amendment)

Adopt provision

E. Reducing Regulatory Burdens

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

the Senate amendment)

Adopt provision

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

amendment)

Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-7-

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

Senate amendment)

Adopt provision

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

C Repeal 100 percent of compensation limit for multiemployer plans (sec. 346(a) of the

House bill and sec. 1264 of the Senate amendment)

Adopt provision

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)

Adopt provision

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)

Adopt provision

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)

Adopt provision

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

sec. 1202 of the Senate amendment)

Adopt provision

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 amendment)

Adopt provision

XV. REVENUE OFFSET PROVISIONS

C Information reporting on cancellation of indebtedness (sec. 1501 of the House bill

and sec. 1302 of the Senate amendment)

Adopt provision

C IRS user fees (sec. 1502 of the House bill and sec. 1304 of the Senate amendment) Adopt provision
IDENTICAL PROVISIONS CONFERENCE AGREEMENT

-8-

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

amendment)

Adopt provision

C Nonaccrual experience method of accounting (sec. 1509 of the House bill and sec.

1311 of the Senate amendment)

Adopt provision

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

Senate amendment)

Adopt provision

XVI. TAX TECHNICAL CORRECTIONS (secs. 1601-1605 of the House bill and secs.

504(c) and 1401-1405 of the Senate amendment)

No provision
5

 The Roman Numeral headings refer to the headings enumerated in Part Three of this document. Included in the similar

provisions are certain pension reform provisions that were included in either the House or Senate version of H.R. 2488.

-9-

PART TWO: SIMILAR PROVISIONS IN H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE5

SIMILAR PROVISIONS CONFERENCE AGREEMENT

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)

Adopt Senate amendment provision

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)

Adopt House bill and Senate amendment

provision with respect to repeal of 60-

month rule and increasing beginning

point of phaseout for joint returns to two

times beginning point for single returns.

Adopt Senate amendment provision with

respect to phaseout range for joint

returns. Increase beginning point of

phaseout for single taxpayers by $5,000.

C Eliminate tax on awards from certain scholarship programs (sec. 403 of the House

bill and Senate amendment)

Adopt House bill provision, which

includes exclusion for NIH

Undergraduate Program scholarships and

certain State-sponsored programs

V. HEALTH CARE TAX RELIEF PROVISIONS
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-10-

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

amendment)

Adopt Senate amendment provision, with

modifications to phase in of deduction

C Long-term care insurance provisions (secs. 501-502 of the House bill and the Senate

amendment)

Adopt Senate amendment provision, with

modifications to phase in of deduction

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

amendment)

Adopt House bill and Senate amendment

provision relating to adding streptococcus

pneumoniae to list of taxable vaccines;

include study with House bill effective

date in report language; Reduce rate of

vaccine excise tax to 50 cents per dose

effective 1/1/05

VI. ESTATE AND GIFT TAX RELIEF PROVISIONS

C Provisions relating to the generation-skipping transfer tax (secs. 631-634 of the

House bill and secs. 731-734 of the Senate amendment)

Adopt House bill provision

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 and sec. 1108 of the Senate

amendment)

Adopt Senate amendment provision

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)

Adopt Senate amendment provision
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-11-

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)

Adopt House bill provision

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)

Adopt House bill provision

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)

Adopt House bill provision

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)

Adopt Senate amendment provisions with

technical modifications and make

provision to modify the 15-percent

personal property test effective after 2000

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)

Adopt Senate amendment provision, but

effective in 2000

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)

Adopt House bill and Senate amendment

provision

C Section 457 plan coordination rules (sec. 1207 of the House bill) Adopt House bill provision
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-12-

C Elimination of IRS user fees for requests regarding employer plans (sec. 1208 of the

House bill and sec. 317 of the Senate amendment)

Adopt House bill provision, with the

modification that the waiver applies only

for requests made during the first 5 plan

years

C Definition of compensation for deduction purposes (sec. 1209 of the House bill) Adopt House bill provision

C Increase minimum benefits (sec. 1211 of the House bill) No provision

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

amendment)

Adopt Senate amendment provision, with

modification to reduce additional PBGC

premium for employers with fewer than

25 employees.

B. Enhancing Fairness for Women

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

amendment)

Adopt Senate amendment provision

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)

Adopt House bill provision, and make

corresponding change to ERISA. Include

in Statement of Managers language

direction to Treasury with respect to

regulations based upon Senate

amendment.

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

modified to include defined contribution

plans.
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-13-

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

amendment)

Adopt Senate amendment provision, with

a modification to the effective date to

delete the exception for binding contracts.

E. Reducing Regulatory Burdens

C Periodic pension benefit statements (sec. 351 of the Senate amendment) No provision

C Notice and consent period regarding distributions (sec. 1256 of the House bill and

sec. 365 of the Senate amendment)

No provision

C Repeal of transition rule regarding definition of highly compensated employees (sec.

1257 of the House bill and sec. 366 of the Senate amendment)

Adopt Senate amendment provision

C Treatment of employer-provided retirement advice (sec. 1259 of the House bill and

sec. 352 of the Senate amendment)

Adopt Senate amendment provision, with

additional report language

C Model plans for small businesses (sec. 1261 of the House bill) No provision

C Reporting simplification (sec. 1262 of the House bill and sec. 370A of the Senate

amendment)

Adopt Senate amendment provision

C Improvements to Employee Plans Compliance and Resolution System (sec. 1263 of

the House bill)

 Adopt House bill provision

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

C Annual report dissemination (sec. 369 of the Senate amendment) No provision

C Employer-provided transit passes (sec. 370 of the Senate amendment) Adopt Senate amendment provision
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-14-

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)

Adopt Senate amendment provision;

adopt additional provision in House bill,

effective in 2006

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

sec. 1102 of the Senate amendment)

Adopt the House bill provision

XIV. EXPIRING TAX PROVISIONS

C Extension of research and experimentation credit (sec. 1401 of the House bill and

sec. 1201 of the Senate amendment)

Adopt House bill and Senate amendment

provision with a 5-year extension

C Work opportunity tax credit (sec. 1404 of the House bill and sec. 1204 of the Senate

amendment)

Adopt House bill provision, including

language relating to electronic filing to be

included in the conference report

C Welfare to work tax credit (sec. 1404 of the House bill and sec. 1204 of the Senate

amendment)

Adopt House bill provision

XV. REVENUE OFFSET PROVISIONS

C Impose limitation on prefunding of certain employee benefits (sec. 1503 of the House

bill and sec. 1312 of the Senate amendment)

Adopt Senate amendment provision

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)

Adopt Senate amendment provision

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)

Adopt Senate amendment provision
SIMILAR PROVISIONS CONFERENCE AGREEMENT

-15-

C Treatment of excess pension assets used for retiree health benefits (sec. 1507 of the

House bill and sec. 1305 of the Senate amendment)

Adopt Senate amendment provision
-16-

PART THREE: DIFFERING PROVISIONS IN H.R. 2488, AS PASSED BY THE HOUSE AND THE SENATE

ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

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)

C 15% rate reduced to 14.5%

(2001-2002) and 14% (2003 &

thereafter); 1 percentage point

reduction in all other individual

income tax and AMT rates,

beginning in 2005

C Increase width of 14% bracket

for single and head of

household returns by $3,000 in

2006
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-17-

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

C Standard deduction for joint

return set at two times single

standard deduction, phased in

over 5 years beginning in 2001

C Adjust 14% rate bracket to two

times single bracket beginning

in 2005, phased in over 4 years

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

Adopt Senate amendment

provision, but effective 2006

D. Individual AMT Provisions

(secs. 121 and 302(b) of the

House bill and sec. 206, 907,

and 1134 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

Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-18-

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

Adopt Senate amendment

provision, but increase maximum

credit to 35% (2001-2005) and

40% (2006 & thereafter); deemed

expenses rule for children under

age 1 is effective for taxable years

beginning after 2005

F. Tax Credit for EmployerProvided 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

No provision

G. Expansion of Adoption Tax

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 non-special needs

adoptions

C Effective after 2000

(Senate floor amendment)

C Adopt Senate amendment

provision with respect to

special needs provision only

II. SAVINGS AND

INVESTMENT TAX

RELIEF PROVISIONS

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 No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-19-

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 Reduce rates from 20%/10% to

18%/8%, effective 1/1/99

C 25% rate on unrecaptured 1250

gain reduced to 23%, effective

1/1/99

C Indexing with mark to market

1/1/00

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 Adopt House bill provision

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 Adopt House bill 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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-20-

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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-21-

G. Individual Retirement

Arrangements (sec. 113 of the

House bill and secs. 301-303

and 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

C Increase Roth IRA conversion

limit to $200,000 for joint

filers ($100,000 for all other

filers), effective 2003

C Increase contribution limit for

all IRAs to $3,000 for 2001-

2003, $4,000 in 2004-2005,

$5,000 in 2006-2008, indexed

after 2008

C No provision

C AGI limits for contributions to

a Roth IRA, increased to

$200,000 to $210,000 for joint

filers ($100,000 to $100,110 for

all other filers), beginning in

2003

C No provision

C Adopt Senate amendment

provision

C Follow Senate amendment
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-22-

H. 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

No provision

III. BUSINESS

INVESTMENT AND JOB

CREATION PROVISIONS

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 No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-23-

B. Corporate Alternative

Minimum Tax (sec. 302 of the

House bill and sec. 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 lesser of

50% of tentative minimum

tax or excess of tentative

minimum tax over regular

tax, effective 2004

C Same as House bill, but

effective taxable years after

2004

C Repeal 90% limit on use of

NOLs, effective 2002

C Allow AMT credits to reduce

lesser of 50% of tentative

minimum tax or excess of

tentative minimum tax over

regular tax, effective taxable

years beginning after 2004

C Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-24-

IV. EDUCATION TAX

RELIEF PROVISIONS

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 Adopt House bill 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)

Adopt Senate amendment

provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-25-

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

C Adopt Senate amendment

provision

C No provision

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 Adopt House bill provision

E. Allow Issuance of TaxExempt 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

No provision

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

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-26-

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)

No provision

H. Tax 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 years beginning 1

year after date of enactment

C 50% credit for donations to

schools in empowerment

zones, enterprise

communities, and Indian

reservations, effective for 3

years beginning with

taxable year beginning after

date of enactment

(Senate floor amendment)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-27-

I. Tax 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

No provision

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)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-28-

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) 

C Adopt Senate amendment

provision, with a limit of

$1,000 on the amount of

expenses

C No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-29-

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

No provision 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 Adopt House bill 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 lowincome assistance provisions

are in effect.

No provision Adopt House bill provision, with

modifications
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-30-

D. Tax 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)

No provision

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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-31-

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)

Adopt House bill provision, with

modification to rules in case of

transfers to surviving spouses

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.

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-32-

D. Expand Estate Tax Rule for

Conservation Easements (sec.

711 of the Senate amendment)

No provision C Increase distance from

metropolitan area, 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)

Adopt Senate amendment

provision

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)

No provision

F. Increase Maximum FamilyOwned 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)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-33-

VII. DISTRESSED

COMMUNITIES AND

INDUSTRIES PROVISIONS

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 Adopt House bill provision, with

technical modifications to family

development accounts

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 Adopt House bill 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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-34-

D. Determination of Small

Refiner Exception to Oil

Depletion Deduction (sec. 725

of the House bill)

Effective after 1999 No provision Adopt House bill provision

E. Minimum Tax Relief for

the Steel Industry (sec. 741 of

the House bill)

Effective after 1998 No provision No provision

VIII. SMALL BUSINESS

TAX RELIEF PROVISIONS

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)

Adopt Senate amendment

provision

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)

Adopt Senate amendment

provision

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)

Adopt Senate amendment

provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-35-

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)

C Adopt House bill provision, but

expanded to include limited

constructive ownership

C Subgroup election for

worldwide affiliated group

only. Election applies for 5

years.

C Adopt Senate amendment

provision, with technical

modifications

C Adopt House bill effective date

B. Recharacterization of

Overall Domestic Loss (sec.

905 of the House bill)

Effective for losses incurred in

taxable years after 2004

No provision Adopt House bill provision, but

effective for losses incurred in

taxable years after 2005

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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-36-

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 Adopt House bill provision, but

effective taxable years after 2007

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 Adopt House bill provision in

conference report language 

F. Provide Waiver From

Denial of Foreign Tax Credits

(sec. 910 of the House bill)

Effective date of enactment No provision 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 Adopt House bill 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)

Adopt Senate amendment

provision (statutory provision)

X. TAX-EXEMPT

ORGANIZATION

PROVISIONS
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-37-

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 Adopt House bill provision

B. Allow Treasury to Grant

Waivers from Sec. 4941 SelfDealing Prohibitions (sec.

1004 of the House bill)

Effective for transactions

occurring after DOE 

No provision Adopt House bill provision 

C. Extend Declaratory

Judgment Procedures to Non501(c)(3) Tax-Exempt

Organizations (sec. 1005 of the

House bill)

Effective after DOE No provision Adopt House bill provision 

D. Simplify Lobbying

Expenditure Limitations (sec.

803 of the Senate amendment)

No provision Repeal separate expenditure

limitation on grass roots

lobbying, effective 2000 

Adopt Senate amendment

provision

E. Tax-Free Withdrawals

From IRAs for Charitable

Purposes (sec. 804 of the

Senate amendment)

No provision Effective taxable years

beginning after 2000

Adopt Senate amendment

provision, with the modification

that the exclusion applies only

with respect to distributions to

charitable organizations, effective

after 2002
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-38-

F. Charitable Contribution

Deduction for Certain

Expenses in Support of Native

Alaskan Subsistence Whaling

(sec. 806 of the Senate

amendment)

No provision Effective 2000 Adopt Senate amendment

provision

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) 

C No provision

C No provision

C No provision 

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

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-39-

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)

No provision

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 Adopt House bill 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 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 Adopt House bill provision 
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-40-

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)

Increase per capita cap to $1.75

and index as under House bill

provision; adopt House and

Senate allocation rule changes,

effective calendar years after

1999; include $2 million small

State minimum, effective 2000

E. Tax Credit for Renovating

Historic Homes (sec. 1011 of

the Senate amendment)

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

Effective after 1999 

Miscellaneous itemized deduction

for 50% of cost, up to maximum

of $50,000; adjustment to basis

F. Treatment of Leasehold

Improvements (sec. 1091 of

the Senate amendment)

No provision 15-year recovery period,

effective after 2002

Report language directs to include

study of leasehold improvements

in Treasury depreciation study

XII. PENSION REFORM

PROVISIONS

A. Expanding Coverage
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-41-

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 deferrals under a

section 457 plan 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

C Adopt House bill provision

C Adopt House bill provision

C Adopt House bill provision

C Adopt House bill provision

2. SAFE annuities and trusts

(sec. 318 of the Senate

amendment)

No provision Adopts simplified plan called

the SAFE.

No provision

B. Enhancing Fairness for

Women
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-42-

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, and IRA contributions,

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

Adopt Senate amendment

provision with respect to

employer plans; IRA catch-up

considered with IRA provisions

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 Effective 2001

No provision Adopt House bill provision

C. Reducing Regulatory

Burdens
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-43-

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

C Adopt House bill provision

C Adopt House bill provision

with respect to line of business

rules; Adopt Senate amendment

provision with respect to

coverage and

nondiscrimination rules

C Adopt Senate amendment

provision

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

C Adopt House bill provision

C No provision

C No provision

3. Increase section 415 early

retirement limit for

governmental and other

plans (sec. 348 of the Senate

amendment)

No provision Increase floor on reduction at

age 55 from $75,000 to 80% of

defined benefit dollar limit

(Senate floor amendment)

No provision

XIII. MISCELLANEOUS

PROVISIONS
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-44-

A. Expand Employer

Reporting on Annual Wage

and Tax Statements (sec. 1303

of the House bill)

Effective after 1999 No provision No provision; add report language

directing IRS to modify forms

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 Adopt House bill 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 Adopt House bill provision

D. Equalize the Tax

Treatment of Oversized “Clean

Fuel” Vehicles and Eelctric

Vehicles (sec. 1313 of the

House bill)

Effective 1/1/2000 No provision Adopt House bill 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 Adopt House bill provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-45-

F. Consolidate Code

provisions governing

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 Adopt House bill provision, with a

modification providing that LUST

and Superfund provisions will be

divided into separate accounts on

enactment of Superfund reform;

LUST to be reimbursed from

Superfund for any Superfund use

of its monies; effective 10/1/99

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

Adopt House bill provision

H. Repeal Excise Tax on

Tackle Boxes (sec. 1323 of the

House bill)

Repeals tax, effective 30 days

after enactment

No provision Adopt House bill provision, with

transfer of additional motorboat

fuels tax revenues to Aquatic

Trust Fund

I. Entrepreneurial Equity

Capital Formation (“SSBICS”)

(secs. 1341-1347 of the House

bill)

Increased exclusion and

rollover benefits and pass-thru

treatment, after date of

enactment.

No provision No provision

J. Clarification of Depreciation

Study (sec. 1354 of the House

bill)

Clarify scope of Treasury

depreciation study

No provision Adopt House bill provision in

Statement of Managers language 
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-46-

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 Adopt House bill 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 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

Adopt Senate amendment

provision

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

Adopt Senate amendment

provision 

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

Adopt Senate amendment

provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-47-

P. Modify Personal Holding

Company “Lending or Finance

Business” Exception (sec.

1113 of the Senate

amendment)

No provision Effective taxable years after

1999

Adopt Senate amendment

provision

Q. Tax Credit for

Modifications to Inter-City

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 inter-city buses, up to

$15,000/ bus, effective 2000-

2011

No provision

R. Business Meals Deduction

Provisions

1. Increase meals deduction

(sec. 804 of the House bill)

Increases deduction 5% per

year to 80%, effective taxable

years after 2004

No provision Adopt House bill provision, but

deduction is 55% in 2006 and

60% in 2007 and thereafter

2. Increased deduction for

business meals while

operating under Department

of Transportation hours of

service limitation (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

Adopt Senate amendment

provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-48-

S. Allow Issuance of TaxExempt 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)

Adopt Senate amendment

provision

T. Provisions Relating to Tax

Incentives for the District of

Columbia

1. Extend tax credit for firsttime 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

Adopt Senate amendment

provision to fix marriage penalty

by increasing phaseout for joint

returns, effective for purchases on

or after date of enactment; do not

include one-year extension of

credit

2. Expand zero-percent capital

gains 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)

No provision

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

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-49-

 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

Adopt Senate amendment

provision

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)

Adopt Senate amendment

provision, effective for amounts

received after the date of

enactment

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)

Adopt Senate amendment

provision

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)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-50-

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)

No provision 

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)

No provision

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)

No provision

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)

 No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-51-

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)

No provision

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)

No provision

XIV. EXPIRING TAX

PROVISIONS

A. Extend and Modify Wind

and Closed-Loop Biomass

Electricity Tax 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)

4-year extension for wind, closedloop biomass and poultry waste

only

B. Alaska Exemption from

Diesel Dyeing (sec. 1206 of

the Senate amendment)

No provision Permanent No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-52-

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

Do not include extension; include

expansion to all sites other than

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 No provision

B. Modify Foreign Tax Credit

Carryover Rules (sec. 1301 of

the Senate amendment)

No provision Effective taxable years after

1999

No provision

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

Adopt Senate amendment

provision

D. Prohibited Allocations of

Stock in S Corporation ESOP

(sec. 1317 of the Senate

amendment)

No provision Generally effective plan years

beginning after 2000

Adopt Senate amendment

provision

E. Modify Anti-Abuse Rules

Relating to Assumption of

Liabilities (sec. 1318 of the

Senate amendment)

No provision Effective assumptions after

July 14, 1999

Adopt Senate amendment

provision, but modify to provide

that similar rules apply to

partnerships
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-53-

F. Basis Allocation Rules for

Intangibles in Certain

Nonrecognition Transactions

(sec. 1319 of the Senate

amendment)

No provision Effective transfers after date of

enactment

Adopt Senate amendment

provision

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)

Adopt Senate amendment

provision, with technical

modification

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

Adopt Senate amendment

provisions, but modify to be

effective on date of enactment

with respect to partners in

partnerships on 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)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-54-

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)

No provision 

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)

No provision 

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)

No provision 

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)

No provision
ITEM HOUSE BILL SENATE AMENDMENT CONFERENCE AGREEMENT

-55-

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 Include House language in

Statement of Managers

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 Adopt House bill provision

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 No provision, but include House

language in Statement of

Managers

XXI. COMPLIANCE WITH

CONGRESSIONAL

BUDGET ACT (sec. 1501 of

the Senate amendment)

No provision Sunsets bill after fiscal year

2009

Adopt Senate amendment

provision, but sunset certain

provisions after calendar year

2008