II

Calendar No. 342

106TH CONGRESS

1ST SESSION S. 1770

To amend the Internal Revenue Code of 1986 to permanently extend the

research and development credit and to extend certain other expiring

provisions for 30 months, and for other purposes.

IN THE SENATE OF THE UNITED STATES

OCTOBER 22, 1999

Mr. LOTT (for himself, Mr. HATCH, Mr. CRAIG, Mr. COVERDELL, Mr.

MCCONNELL, Mr. GREGG, Mr. GORTON, Mr. FRIST, and Mr. ASHCROFT)

introduced the following bill; which was read the first time

OCTOBER 25, 1999

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to permanently

extend the research and development credit and to extend

certain other expiring provisions for 30 months, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; ETC.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Clear Extenders Act of 1999’’.
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1 (b) AMENDMENT OF 1986 CODE.—Except as other2 wise expressly provided, whenever in this Act an amend3 ment or repeal is expressed in terms of an amendment

4 to, or repeal of, a section or other provision, the reference

5 shall be considered to be made to a section or other provi6 sion of the Internal Revenue Code of 1986.

7 (c) TABLE OF CONTENTS.—The table of contents for

8 this Act is as follows:

9 TITLE I—EXTENSION OF

10 EXPIRING INCENTIVES

11 SEC. 101. PERMANENT EXTENSION OF RESEARCH AND DE12 VELOPMENT CREDIT.

13 (a) EXTENSION.—

14 (1) IN GENERAL.—Section 41 (relating to cred15 it for increasing research activities) is amended by

16 striking subsection (h).

17 (2) TECHNICAL AMENDMENT.—Section

18 45C(b)(1) is amended by striking subparagraph (D).

19 (3) EFFECTIVE DATE.—The amendments made

20 by this subsection shall apply to amounts paid or in21 curred after June 30, 1999.

22 (b) INCREASE IN PERCENTAGES UNDER ALTER23 NATIVE INCREMENTAL CREDIT.—

24 (1) IN GENERAL.—Subparagraph (A) of section

25 41(c)(4) of such Code is amended—
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1 (A) by striking ‘‘1.65 percent’’ and insert2 ing ‘‘2.65 percent’’,

3 (B) by striking ‘‘2.2 percent’’ and inserting

4 ‘‘3.2 percent’’, and

5 (C) by striking ‘‘2.75 percent’’ and insert6 ing ‘‘3.75 percent’’.

7 (2) EFFECTIVE DATE.—The amendments made

8 by this subsection shall apply to taxable years begin9 ning after June 30, 1999.

10 (c) SPECIAL RULE.—

11 (1) IN GENERAL.—For purposes of the Internal

12 Revenue Code of 1986, the credit determined under

13 section 41 of such Code which is otherwise allowable

14 under such Code and which is attributable to the

15 suspension period shall not be taken into account

16 prior to October 1, 2000. On or after such date,

17 such credit may be taken into account through the

18 filing of an amended return, an application for expe19 dited refund, an adjustment of estimated taxes, or

20 other means allowed by such Code.

21 (2) SUSPENSION PERIOD.—For purposes of this

22 subsection, the suspension period is the period be23 ginning on July 1, 1999, and ending on September

24 30, 2000.

25 (3) EXPEDITED REFUNDS.—
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1 (A) IN GENERAL.—If there is an overpay2 ment of tax with respect to a taxable year by

3 reason of paragraph (1), the taxpayer may file

4 an application for a tentative refund of such

5 overpayment. Such application shall be in such

6 manner and form, and contain such informa7 tion, as the Secretary may prescribe.

8 (B) DEADLINE FOR APPLICATIONS.—Sub9 paragraph (A) shall apply only to applications

10 filed before October 1, 2001.

11 (C) ALLOWANCE OF ADJUSTMENTS.—Not

12 later than 90 days after the date on which an

13 application is filed under this paragraph, the

14 Secretary shall—

15 (i) review the application,

16 (ii) determine the amount of the over17 payment, and

18 (iii) apply, credit, or refund such over19 payment,

20 in a manner similar to the manner provided in

21 section 6411(b) of such Code.

22 (D) CONSOLIDATED RETURNS.—The provi23 sions of section 6411(c) of such Code shall

24 apply to an adjustment under this paragraph in

25 such manner as the Secretary may provide.
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1 (4) CREDIT ATTRIBUTABLE TO SUSPENSION PE2 RIOD.—

3 (A) IN GENERAL.—For purposes of this

4 subsection, in the case of a taxable year which

5 includes a portion of the suspension period, the

6 amount of credit determined under section 41

7 of such Code for such taxable year which is at8 tributable to such period is the amount which

9 bears the same ratio to the amount of credit de10 termined under such section 41 for such taxable

11 year as the number of months in the suspension

12 period which are during such taxable year bears

13 to the number of months in such taxable year.

14 (B) WAIVER OF ESTIMATED TAX PEN15 ALTIES.—No addition to tax shall be made

16 under section 6654 or 6655 of such Code for

17 any period before July 1, 1999, with respect to

18 any underpayment of tax imposed by such Code

19 to the extent such underpayment was created or

20 increased by reason of subparagraph (A).

21 (5) SECRETARY.—For purposes of this sub22 section, the term ‘‘Secretary’’ means the Secretary

23 of the Treasury (or such Secretary’s delegate).
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1 SEC. 102. EXTENSION OF MINIMUM TAX RELIEF FOR INDI2 VIDUALS.

3 (a) IN GENERAL.—The second sentence of section

4 26(a) (relating to limitations based on amount of tax) is

5 amended by striking ‘‘1998’’ and inserting ‘‘calendar

6 years 1998, 1999, 2000, and 2001’’.

7 (b) CHILD CREDIT.—Section 24(d)(2) (relating to re8 duction of credit to taxpayer subject to alternative min9 imum tax) is amended by striking ‘‘December 31, 1998’’

10 and inserting ‘‘December 31, 2001’’.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 1998.

14 SEC. 103. SUBPART F EXEMPTION FOR ACTIVE FINANCING

15 INCOME.

16 (a) IN GENERAL.—Sections 953(e)(10) and

17 954(h)(9) (relating to application) are each amended—

18 (1) by striking ‘‘the first taxable year’’ and in19 serting ‘‘taxable years’’,

20 (2) by striking ‘‘January 1, 2000’’ and insert21 ing ‘‘January 1, 2002’’, and

22 (3) by striking ‘‘within which such’’ and insert23 ing ‘‘within which any such’’.

24 (b) EFFECTIVE DATE.—The amendments made by

25 this section shall apply to taxable years beginning after

26 December 31, 1999.
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1 SEC. 104. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLE2 TION FOR MARGINAL PRODUCTION.

3 (a) IN GENERAL.—Subparagraph (H) of section

4 613A(c)(6) (relating to temporary suspension of taxable

5 limit with respect to marginal production) is amended by

6 striking ‘‘January 1, 2000’’ and inserting ‘‘January 1,

7 2002’’.

8 (b) EFFECTIVE DATE.—The amendment made by

9 this section shall apply to taxable years beginning after

10 December 31, 1999.

11 SEC. 105. WORK OPPORTUNITY CREDIT AND WELFARE-TO12 WORK CREDIT.

13 (a) TEMPORARY EXTENSION.—Sections 51(c)(4)(B)

14 and 51A(f ) (relating to termination) are each amended

15 by striking ‘‘June 30, 1999’’ and inserting ‘‘December 31,

16 2001’’.

17 (b) CLARIFICATION OF FIRST YEAR OF EMPLOY18 MENT.—Paragraph (2) of section 51(i) of such Code is

19 amended by striking ‘‘during which he was not a member

20 of a targeted group’’.

21 (c) EFFECTIVE DATE.—The amendments made by

22 this section shall apply to individuals who begin work for

23 the employer after June 30, 1999.
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1 TITLE II—REVENUE OFFSET

2 SEC. 201. MODIFICATION OF ESTIMATED TAX SAFE HAR3 BOR.

4 (a) IN GENERAL.—The table contained in clause

5 (i) of section 6654(d)(1)(C) of the Internal Revenue Code

6 of 1986 (relating to limitation on use of preceding year’s

7 tax) is amended by striking the item relating to 1999 or

8 2000 and inserting the following new items:

‘‘1999 ....................................................................................... 108.5

2000 ...................................................................................... 106’’.

9 (b) EFFECTIVE DATE.—The amendment made by

10 this section shall apply with respect to any installment

11 payment for taxable years beginning after December 31,

12 1999.

Calendar No. 342

106TH CONGRESS

1ST SESSION S. 1770

A BILL

To amend the Internal Revenue Code of 1986 to

permanently extend the research and development credit and to extend certain other expiringprovisions for 30 months, and for other purposes.

OCTOBER 25, 1999

Read the second time and placed on the calendar