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[Journal of the House of Representatives, 1995]
[Thursday, March 30, 1995 (53), Para 53.8 Self-Employed Health Premium Deduction]
[Pages 520-521]
[From the U.S. Government Publishing Office, www.gpo.gov]

para.53.8  self-employed health premium deduction

  Mr. ARCHER, pursuant to House Resolution 121, called up the following 
conference report (Rept. No. 104-92):

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     831), to amend the Internal Revenue Code of 1986 to 
     permanently extend the deduction for the health insurance 
     costs of self-employed individuals, to repeal the provision 
     permitting nonrecognition of gain on sales and exchanges 
     effectuating policies of the Federal Communications 
     Commission, and for other purposes, having met, after full 
     and free conference, have agreed to recommend and do 
     recommend to their respective Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. PERMANENT EXTENSION AND INCREASE OF DEDUCTION FOR 
                   HEALTH INSURANCE COSTS OF SELF-EMPLOYED 
                   INDIVIDUALS.

       (a) Permanent Extension.--Subsection (l) of section 162 of 
     the Internal Revenue Code of 1986 (relating to special rules 
     for health insurance costs of self-employed individuals) is 
     amended by striking paragraph (6).
       (b) Increase in Deduction.--Paragraph (1) of section 162(l) 
     of the Internal Revenue Code of 1986 is amended by striking 
     ``25 percent'' and inserting ``30 percent''.
       (c) Effective Dates.--
       (1) Extension.--The amendment made by subsection (a) shall 
     apply to taxable years beginning after December 31, 1993.
       (2) Increase.--The amendment made by subsection (b) shall 
     apply to taxable years beginning after December 31, 1994.

     SEC. 2. REPEAL OF NONRECOGNITION ON FCC CERTIFIED SALES AND 
                   EXCHANGES.

       (a) In General.--Subchapter O of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by striking part V (relating 
     to changes to effectuate FCC policy).
       (b) Conforming Amendments.--Sections 1245(b)(5) and 
     1250(d)(5) of the Internal Revenue Code of 1986 are each 
     amended--
       (1) by striking ``section 1071 (relating to gain from sale 
     or exchange to effectuate polices of FCC) or'', and
       (2) by striking ``1071 and'' in the heading thereof.
       (c) Clerical Amendment.--The table of parts for such 
     subchapter O is amended by striking the item relating to part 
     V.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to--
       (A) sales and exchanges on or after January 17, 1995, and
       (B) sales and exchanges before such date if the FCC tax 
     certificate with respect to such sale or exchange is issued 
     on or after such date.
       (2) Binding contracts.--
       (A) In general.--The amendments made by this section shall 
     not apply to any sale or exchange pursuant to a written 
     contract which was binding on January 16, 1995, and at all 
     times thereafter before the sale or exchange, if the FCC tax 
     certificate with respect to such sale or exchange was applied 
     for, or issued, on or before such date.
       (B) Sales contingent on issuance of certificate.--
       (i) In general.--A contract shall be treated as not binding 
     for purposes of subparagraph (A) if the sale or exchange 
     pursuant to such contract, or the material terms of such 
     contract, were contingent, at any time on January 16, 1995, 
     on the issuance of an FCC tax certificate. The preceding 
     sentence shall not apply if the FCC tax certificate for such 
     sale or exchange is issued on or before January 16, 1995.
       (ii) Material terms.--For purposes of clause (i), the 
     material terms of a contract shall not be treated as 
     contingent on the issuance of an FCC tax certificate solely 
     because such terms provide that the sales price would, if 
     such certificate were not issued, be increased by an amount 
     not greater than 10 percent of the sales price otherwise 
     provided in the contract.
       (3) FCC tax certificate.--For purposes of this subsection, 
     the term ``FCC tax certificate'' means any certificate of the 
     Federal Communications Commission for the effectuation of 
     section 1071 of the Internal Revenue Code of 1986 (as in 
     effect on the day before the date of the enactment of this 
     Act).

     SEC. 3. SPECIAL RULES RELATING TO INVOLUNTARY CONVERSIONS.

       (a) Replacement Property Acquired by Corporations From 
     Related Persons.--
       (1) In general.--Section 1033 of the Internal Revenue Code 
     of 1986 (relating to involuntary conversions) is amended by 
     redesignating subsection (i) as subsection (j) and by 
     inserting after subsection (h) the following new subsection:
       ``(i) Nonrecognition Not To Apply if Corporation Acquires 
     Replacement Property From Related Person.--
       ``(1) In general.--In the case of--
       ``(A) a C corporation, or
       ``(B) a partnership in which 1 or more C corporations own, 
     directly or indirectly (determined in accordance with section 
     707(b)(3)), more than 50 percent of the capital interest, or 
     profits interest, in such partnership at the time of the 
     involuntary conversion,

     subsection (a) shall not apply if the replacement property or 
     stock is acquired from a related person. The preceding 
     sentence shall

[[Page 521]]

     not apply to the extent that the related person acquired the 
     replacement property or stock from an unrelated person during 
     the period described in subsection (a)(2)(B).
       ``(2) Related person.--For purposes of this subsection, a 
     person is related to another person if the person bears a 
     relationship to the other person described in section 267(b) 
     or 707(b)(1).''
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to involuntary conversions occurring on or after 
     February 6, 1995.
       (b) Application of Section 1033 to Certain Sales Required 
     for Microwave Relocation.--
       (1) In general.--Section 1033 of the Internal Revenue Code 
     of 1986 (relating to involuntary conversions), as amended by 
     subsection (a), is amended by redesignating subsection (j) as 
     subsection (k) and by inserting after subsection (i) the 
     following new subsection:
       ``(j) Sales or Exchanges To Implement Microwave Relocation 
     Policy.--
       ``(1) In general.--For purposes of this subtitle, if a 
     taxpayer elects the application of this subsection to a 
     qualified sale or exchange, such sale or exchange shall be 
     treated as an involuntary conversion to which this section 
     applies.
       ``(2) Qualified sale or exchange.--For purposes of 
     paragraph (1), the term `qualified sale or exchange' means a 
     sale or exchange before January 1, 2000, which is certified 
     by the Federal Communications Commission as having been made 
     by a taxpayer in connection with the relocation of the 
     taxpayer from the 1850-1990MHz spectrum by reason of the 
     Federal Communications Commission's reallocation of that 
     spectrum for use for personal communications services. The 
     Commission shall transmit copies of certifications under this 
     paragraph to the Secretary.''
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to sales or exchanges after March 14, 1995.

     SEC. 4. DENIAL OF EARNED INCOME CREDIT FOR INDIVIDUALS HAVING 
                   EXCESSIVE INVESTMENT INCOME.

       (a) In General.--Section 32 of the Internal Revenue Code of 
     1986 is amended by redesignating subsections (i) and (j) as 
     subsections (j) and (k), respectively, and by inserting after 
     subsection (h) the following new subsection:
       ``(i) Denial of Credit for Individuals Having Excessive 
     Investment Income.--
       ``(1) In general.--No credit shall be allowed under 
     subsection (a) for the taxable year if the aggregate amount 
     of disqualified income of the taxpayer for the taxable year 
     exceeds $2,350.
       ``(2) Disqualified income.--For purposes of paragraph (1), 
     the term `disqualified income' means--
       ``(A) interest or dividends to the extent includible in 
     gross income for the taxable year,
       ``(B) interest received or accrued during the taxable year 
     which is exempt from tax imposed by this chapter, and
       ``(C) the excess (if any) of--
       ``(i) gross income from rents or royalties not derived in 
     the ordinary course of a trade or business, over
       ``(ii) the sum of--

       ``(I) the deductions (other than interest) which are 
     clearly and directly allocable to such gross income, plus
       ``(II) interest deductions properly allocable to such gross 
     income.''

       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

     SEC. 5. EXTENSION OF SPECIAL RULE FOR CERTAIN GROUP HEALTH 
                   PLANS.

       Section 13442(b) of the Omnibus Budget Reconciliation Act 
     of 1993 (Public Law 103-66) is amended by striking ``May 12, 
     1995'' and inserting ``December 31, 1995''.

     SEC. 6. STUDY OF EXPATRIATION TAX.

       (a) In General.--The staff of the Joint Committee on 
     Taxation shall conduct a study of the issues presented by any 
     proposals to affect the taxation of expatriation, including 
     an evaluation of--
       (1) the effectiveness and enforceability of current law 
     with respect to the tax treatment of expatriation,
       (2) the current level of expatriation for tax avoidance 
     purposes,
       (3) any restrictions imposed by any constitutional 
     requirement that the Federal income tax apply only to 
     realized gains,
       (4) the application of international human rights 
     principles to taxation of expatriation,
       (5) the possible effects of any such proposals on the free 
     flow of capital into the United States,
       (6) the impact of any such proposals on existing tax 
     treaties and future treaty negotiations,
       (7) the operation of any such proposals in the case of 
     interests in trusts,
       (8) the problems of potential double taxation in any such 
     proposals,
       (9) the impact of any such proposals on the trade policy 
     objectives of the United States,
       (10) the administrability of such proposals, and
       (11) possible problems associated with existing law, 
     including estate and gift tax provisions.
       (b) Report.--The Chief of Staff of the Joint Committee on 
     Taxation shall, not later than June 1, 1995, report the 
     results of the study conducted under subsection (a) to the 
     Chairmen of the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate.

       And the Senate agree to the same.

     Bill Archer,
     Philip Crane,
     Wm. Thomas,
     Charles B. Rangel,
                                Managers on the Part of the House.
     Bob Packwood,
     Bob Dole,
     Bill Roth,
     John H. Chafee,
     Chuck Grassley,
     Daniel Patrick Moynihan,
     Max Baucus,
     Carol Moseley-Braun,
                               Managers on the Part of the Senate.

  When said conference report was considered.
  After debate,
  On motion of Mr. ARCHER, the previous question was ordered on the 
conference report to its adoption or rejection and, under the operation 
thereof, the conference report was agreed to.
  A motion to reconsider the vote whereby said conference report was 
agreed to was, by unanimous consent, laid on the table.
  Ordered, That the Clerk notify the Senate thereof.
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