I
104TH CONGRESS
1ST SESSION
H. R. 8
To amend the Social Security Act to increase the earnings limit, to amend
the Internal Revenue Code of 1986 to repeal the increase in the tax
on social security benefits and to provide incentives for the purchase
of long-term care insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. BUNNING, Mr. HASTERT, Mrs. KELLY, and Mrs. THURMAN (for them-
selves, Mr. WICKER, Mr. HOKE, Mr. FRISA, Mr. MCINTOSH, Mr.
SHADEGG, Mrs. JOHNSON
of Connecticut, Mr. CHRYSLER, Mr.
CUNNINGHAM, Mr. CANADY, Mr. MCCOLLUM, Mr. SHAYS, Mr. BARTON
of Texas, Mr. GILLMOR, Mr. BARR, Mr. ARMEY, Mr. FORBES, Mr.
HORN, Mrs. WALDHOLTZ, Mr. TATE, Ms. DUNN of Washington, Mr.
MICA, Mr. MCHUGH, Mr. CRANE, Mr. DORNAN, Mr. BACHUS, Mr. SMITH
of Texas, Mr. WELDON of Pennsylvania, Mr. OXLEY, Mr. ROHRABACHER,
Ms. DANNER, Mr. SAXTON, Mr. KIM, Mr. BALLENGER, Mr. CALLAHAN,
Mr. TALENT, Mr. BAKER of Louisiana, Mr. SCHAEFER, Mr. FILNER, Mr.
CRAPO, Mr. KOLBE, Mr. HALL of Texas, Mr. PAXON, Mr. THOMAS, Mr.
COMBEST, Mr. COBLE, Mr. EHRLICH, Mrs. MEYERS of Kansas, Mr.
YOUNG of Florida, Mr. GOSS, Mr. STOCKMAN, Mr. SMITH of Michigan,
Mr. COX, Mr. STEARNS, Mr. BAKER of California, Mr. SHAW, Mr.
HERGER, Mr. HEINEMAN, Mr. HANCOCK, Mr. SENSENBRENNER, Mrs.
FOWLER, Mr. GREENWOOD, Mr. ZIMMER, Mr. LINDER, Mr. HUTCHIN-
SON, Mr. EMERSON, Mr. ENGLISH of Pennsylvania, Mr. HOSTETTLER,
Mr. JONES, Mr. ENSIGN, Mr. SMITH of New Jersey, Mr. TIAHRT, Mrs.
MYRICK, Mr. FRELINGHUYSEN, Mr. HOUGHTON, Mrs. CUBIN, Mr.
KINGSTON, Mr. EWING, Mr. HASTINGS of Washington, Mr. GANSKE, Mr.
WELDON of Florida, Mr. COBURN, Mr. LARGENT, Mr. WELLER, Mr.
LEWIS of Kentucky, Mr. FOLEY, Mr. INGLIS of South Carolina, Mr.
LIGHTFOOT, Mr. ISTOOK, Mr. CALVERT, Mr. HOBSON, Mr. CREMEANS,
Mr. KNOLLENBERG, Mr. BILIRAKIS, Mr. HAYWORTH, Mr. FOX, Mr.
GOODLING, Mr. RADANOVICH, Mr. ROTH, Mr. WAMP, Mr. GILCHREST,
Mr. BLUTE, Mr. SOLOMON, Mr. DOOLITTLE, Mr. CAMP, Mr. UPTON, Mr.
PACKARD, Mr. STUMP, Mr. EVERETT, Mr. GILMAN, Mr. MILLER of Flor-
ida, Mr. LATOURETTE, Mr. ROYCE, Mr. FLANAGAN, Mr. BURR, Mr.
LATHAM, 
Mr. 
DAVIS, 
Ms. 
MOLINARI, 
Mr. 
GUNDERSON, 
Mr.
THORNBERRY, 
Mr. 
RIGGS, 
Mr. 
PORTER, 
Mr. 
ALLARD, 
Mr.
CHRISTENSEN, Mr. GOODLATTE, Mr. HILLEARY, Mr. COOLEY, and Mr.
BONO) introduced the following bill; which was referred as follows:
Titles I–III; referred to the Committee on Ways and Means
Title IV, referred to the Committee on the Judiciary
APRIL 3, 1995
Additional sponsors: Mr. TAYLOR of North Carolina, Mr. BARTLETT of Mary-
land, Mr. NUSSLE, Mr. CHABOT, Mr. BURTON of Indiana, Mr. NEY, Mr.
NORWOOD, Mrs. VUCANOVICH, Mr. HUNTER, Mr. MANZULLO, Mr. LIV-
INGSTON, Mr. COLLINS of Georgia, Mr. SAM JOHNSON of Texas, Mr.
WALKER, Mr. MOORHEAD, Mrs. SEASTRAND, Mr. MCKEON, Mr. DREIER,
Mr. ROBERTS, Mr. POMBO, Mr. SALMON, Mr. FIELDS of Texas, Mr.
SOUDER, Mr. SPENCE, and Mr. GUTKNECHT
A BILL
To amend the Social Security Act to increase the earnings
limit, to amend the Internal Revenue Code of 1986 to
repeal the increase in the tax on social security benefits
and to provide incentives for the purchase of long-term
care insurance, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Senior Citizens’ Equity
Act’’.
TITLE I—SOCIAL SECURITY
EARNINGS TEST
SEC. 101. ADJUSTMENTS IN MONTHLY EXEMPT AMOUNT
FOR PURPOSES OF THE SOCIAL SECURITY
EARNINGS TEST.
(a) INCREASE IN MONTHLY EXEMPT AMOUNT FOR
INDIVIDUALS
WHO
HAVE
ATTAINED
RETIREMENT
AGE.—Section 203(f)(8)(D) of the Social Security Act (42
U.S.C. 403(f)(8)(D)) is amended to read as follows:
‘‘(D)(i) Notwithstanding any other provision of
this subsection, the exempt amount which is applica-
ble to an individual who has attained retirement age
(as defined in section 216(1)) before the close of the
taxable year involved shall be—
‘‘(I) for the taxable year beginning after
1995 and before 1997, $1,250.00,
‘‘(II) for the taxable year beginning after
1996 and before 1998, $1,583.331⁄3,
‘‘(III) for the taxable year beginning after
1997 and before 1999, $1,916.662⁄3,
‘‘(IV) for the taxable year beginning after
1998 and before 2000, $2,250.00, and
‘‘(V) for the taxable year beginning after
1999 and before 2001, $2,500.00.
‘‘(ii) For purposes of subparagraph (B)(ii)(II),
the increase in the exempt amount provided under
clause (i)(V) shall be deemed to have resulted from
a determination which shall be deemed to have been
made under subparagraph (A) in 1999.’’.
(b) CONFORMING AMENDMENT.—The second sen-
tence of section 223(d)(4) of such Act (42 U.S.C.
423(d)(4)) is amended by striking ‘‘the exempt amount
under section 203(f)(8) which is applicable to individuals
described in subparagraph (D) thereof’’ and inserting the
following: ‘‘an amount equal to the exempt amount which
would have been applicable under section 203(f)(8), to in-
dividuals described in subparagraph (D) thereof, if section
101 of the Senior Citizens’ Equity Act had not been en-
acted’’.
SEC. 102. EFFECTIVE DATE.
The amendments made by section 101 shall apply
with respect to taxable years beginning after 1995.
TITLE II—REPEAL OF INCREASE
IN TAX ON SOCIAL SECURITY
BENEFITS
SEC. 201. REPEAL OF INCREASE IN TAX ON SOCIAL SECU-
RITY BENEFITS.
(a) IN GENERAL.—Subsection (a) of section 86 of the
Internal Revenue Code of 1986 (relating to social security
and tier 1 railroad retirement benefits) is amended by
adding at the end the following new paragraph:
‘‘(3) PHASEOUT OF ADDITIONAL AMOUNT.—In
the case of any taxable year beginning in a calendar
year after 1995 and before 2000, paragraph (2)
shall be applied by substituting the percentage deter-
mined under the following table for ‘85 percent’ each
place it appears:
‘‘In the case of a taxable
year beginning in cal-
endar year:
The percentage is:
1996 .......................................
75 percent
1997 .......................................
65 percent
1998 .......................................
60 percent
1999 .......................................
55 percent.’’
(b) TERMINATION OF ADDITIONAL AMOUNT.—Para-
graph (2) of section 86(a) of such Code is amended by
adding at the end the following new flush sentence:
‘‘This paragraph shall not apply to any taxable year
beginning after December 31, 1999.’’
(c) CONFORMING AMENDMENT.—Subparagraph (A)
of section 871(a)(3) of such Code is amended—
(1) by striking ‘‘85 percent’’ and inserting ‘‘50
percent’’, and
(2) by inserting before the last sentence the fol-
lowing new flush sentence:
‘‘In the case of any taxable year beginning in a cal-
endar year after 1995 and before 2000, subpara-
graph (A) shall be applied by substituting the per-
centage determined for such calendar year under
section 86(a)(3) for ‘50 percent’.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1995.
TITLE III—TREATMENT OF
LONG-TERM CARE
SEC. 301. TREATMENT OF LONG-TERM CARE INSURANCE
OR PLANS.
(a) GENERAL RULE.—Subpart E of part I of sub-
chapter L of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after section 818 the follow-
ing new section:
‘‘SEC. 818A. TREATMENT OF LONG-TERM CARE INSURANCE
OR PLANS.
‘‘(a) GENERAL RULE.—For purposes of this part, a
long-term care insurance contract shall be treated as an
accident or health insurance contract.
‘‘(b) LONG-TERM CARE INSURANCE CONTRACT.—
‘‘(1) IN GENERAL.—For purposes of this part,
the term ‘long-term care insurance contract’ means
any insurance contract issued if—
‘‘(A) the only insurance protection pro-
vided under such contract is coverage of quali-
fied long-term care services and benefits inci-
dental to such coverage,
‘‘(B) such contract does not cover expenses
incurred for services or items to the extent that
such expenses are reimbursable under title
XVIII of the Social Security Act or would be so
reimbursable but for the application of a de-
ductible or coinsurance amount,
‘‘(C) such contract is guaranteed renew-
able,
‘‘(D) such contract does not have any cash
surrender value, and
‘‘(E) all refunds of premiums, and all pol-
icyholder dividends or similar amounts, under
such contract are to be applied as a reduction
in future premiums or to increase future bene-
fits.
‘‘(2) SPECIAL RULES.—
‘‘(A) PER
DIEM, ETC. PAYMENTS
PER-
MITTED.—A contract shall not fail to be treated
as described in paragraph (1)(A) by reason of
payments being made on a per diem or other
periodic basis without regard to the expenses
incurred during the period to which the pay-
ments relate.
‘‘(ii) DRESSING.—The overall complex
behavior of getting clothes from closets
and drawers and then getting dressed.
‘‘(iii) TOILETING
AND
BATHING.—
Each of the following shall be treated as 1
activity:
‘‘(I) The act of going to the toilet
room for bowel and bladder function,
transferring on and off the toilet,
cleaning after elimination, and ar-
ranging clothes or the ability to volun-
tarily control bowel and bladder func-
tion, or in the event of incontinence,
the ability to maintain a reasonable
level of personal hygiene.
‘‘(II) The overall complex behav-
ior of getting water and cleansing the
whole body, including turning on the
water for a bath, shower, or sponge
bath, getting to, in, and out of a tub
or shower, and washing and drying
oneself.
‘‘(iv) TRANSFER.—The process of get-
ting in and out of bed or in and out of a
chair or wheelchair.
‘‘(v) EATING.—The process of getting
food from a plate or its equivalent into the
mouth.
‘‘(3) QUALIFIED FACILITY.—The term ‘quali-
fied facility’ means—
‘‘(A) a nursing, rehabilitative, hospice, or
adult day care facility (including a hospital, re-
tirement home, nursing home, skilled nursing
facility, intermediate care facility, or similar in-
stitution)—
‘‘(i) which is licensed under State law,
or
‘‘(ii) which is a certified facility for
purposes of title XVIII or XIX of the So-
cial Security Act, or
‘‘(B) an individual’s home if a licensed
health care practitioner certifies that without
home care the individual would have to be cared
for in a facility described in subparagraph (A).
‘‘(4) MAINTENANCE OR PERSONAL CARE SERV-
ICES.—The term ‘maintenance or personal care serv-
ices’ means any care the primary purpose of which
is to provide needed assistance with any of the ac-
tivities of daily living described in paragraph (2)(B).
‘‘(5) 
LICENSED
HEALTH
CARE
PRACTI-
TIONER.—The term ‘licensed health care practi-
tioner’ means any physician (as defined in section
1861(r) of the Social Security Act) and any reg-
istered professional nurse, licensed social worker, or
other individual who meets such requirements as
may be prescribed by the Secretary.
‘‘(d) TREATMENT OF COVERAGE PROVIDED AS PART
OF A LIFE INSURANCE CONTRACT.—Except as otherwise
provided in regulations prescribed by the Secretary, in the
case of any long-term care insurance coverage (whether
or not qualified) provided by rider on a life insurance con-
tract, this part shall be applied as if the portion of the
contract providing such coverage were a separate contract.
‘‘(e) BENEFITS IN EXCESS OF $200 PER DAY IN-
CLUDIBLE IN GROSS INCOME.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of this title, gross income includes the ag-
gregate amount of excess benefits received during
the taxable year under any long-term care insurance
contract.
‘‘(2) EXCESS BENEFIT.—
‘‘(A) IN GENERAL.—For purposes of para-
graph (1), the term ‘excess benefit’ means, with
respect to any day, the amount by which the
benefits received under a long-term care insur-
ance contract for such day exceed $200.
‘‘(B) CONTRACTS NOT AGGREGATED IN AP-
PLYING LIMIT.—Subparagraph (A) shall be ap-
plied separately with respect to each long-term
care insurance contract.
‘‘(3) INFLATION ADJUSTMENT OF $200 BENE-
FIT LIMIT.—
‘‘(A) IN GENERAL.—In the case of a cal-
endar year after 1995, the $200 amount con-
tained in paragraph (1) shall be increased for
such calendar year by the medical care cost ad-
justment for such calendar year. If any increase
determined under the preceding sentence is not
a multiple of $10, such increase shall be round-
ed to the nearest multiple of $10.
‘‘(B) 
MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of subparagraph (A), the
medical care cost adjustment for any calendar
year is the percentage (if any) by which—
‘‘(i) the medical care component of
the Consumer Price Index (as defined in
section 1(f)(5)) for August of the preced-
ing calendar year, exceeds
‘‘(ii) such component for August of
1994.’’
(b) RESERVE METHOD.—
(1) Subparagraph (A) of section 807(d)(3) of
such Code is amended by redesignating clause (iv)
as clause (v) and by inserting after clause (iii) the
following new clause:
‘‘(iv) LONG-TERM
CARE
INSURANCE
CONTRACTS.—In the case of any long-term
care insurance contract, a 1-year full pre-
liminary term method.’’
(2) Clause (v) of section 807(d)(3)(A) of such
Code, as redesignated by paragraph (1), is amended
by striking ‘‘or (iii)’’ each place it appears and in-
serting ‘‘(iii), or (iv)’’.
(3) Clause (iii) of section 807(d)(3)(A) of such
Code is amended by inserting ‘‘(other than a long-
term care insurance contract)’’ after ‘‘insurance con-
tract’’.
(c) CONTINUATION COVERAGE EXCISE TAX NOT TO
APPLY.—Subsection (f) of section 4980B of such Code is
amended by adding at the end the following new para-
graph:
‘‘(9) CONTINUATION OF LONG-TERM CARE COV-
ERAGE NOT REQUIRED.—A group health plan shall
not be treated as failing to meet the requirements of
this subsection solely by reason of failing to provide
coverage under any long-term care insurance con-
tract (as defined in section 818A).’’
(d) CLERICAL AMENDMENT.—The table of sections
for subpart E of part I of subchapter L of chapter 1 of
such Code is amended by inserting after the item relating
to section 818 the following new item:
‘‘Sec. 818A. Treatment of long-term care insurance or plans.’’
SEC. 302. EXCLUSION FOR BENEFITS PROVIDED UNDER
LONG-TERM CARE INSURANCE; EXCLUSION
FOR EMPLOYER-PROVIDED COVERAGE.
(a) IN GENERAL.—Subsection (a) of section 104 of
the Internal Revenue Code of 1986 (relating to compensa-
tion for injuries or sickness) is amended by striking ‘‘and’’
at the end of paragraph (4), by striking the period at the
end of paragraph (5) and inserting ‘‘, and’’, and by insert-
ing after paragraph (4) the following new paragraph:
‘‘(6) benefits under a long-term care insurance
contract (as defined in section 818A(b)).’’
(b) EXCLUSION
FOR EMPLOYER-PROVIDED COV-
ERAGE.—Section 106 of such Code (relating to contribu-
tions by employer to accident and health plans) is amend-
ed by adding at the end thereof the following sentence:
‘‘For purposes of the preceding sentence, the term ‘acci-
dent or health plan’ includes a long-term care insurance
contract (as defined in section 818A(b)) but only to the
extent that the aggregate of the benefits under such con-
tracts provided by the employer with respect to coverage
of an individual does not exceed the limitation applicable
under section 818A(e)(2) (determined without regard to
subparagraph (B) thereof).’’
SEC. 303. QUALIFIED LONG-TERM CARE SERVICES TREAT-
ED AS MEDICAL CARE.
(a) GENERAL RULE.—Paragraph (1) of section
213(d) of the Internal Revenue Code of 1986 (defining
medical care) is amended by striking ‘‘or’’ at the end of
subparagraph (B), by redesignating subparagraph (C) as
subparagraph (D), and by inserting after subparagraph
(B) the following new subparagraph:
‘‘(C) for qualified long-term care services
(as defined in section 818A(c)), or’’.
(b) TECHNICAL AMENDMENTS.—
(1) Subparagraph (D) of section 213(d)(1) of
such Code (as redesignated by subsection (a)) is
amended by striking ‘‘subparagraphs (A) and (B)’’
and inserting ‘‘subparagraphs (A), (B), and (C)’’.
(2)(A) Paragraph (1) of section 213(d) of such
Code is amended by adding at the end thereof the
following new flush sentence:
medical care cost adjustment of such
amount for such calendar year. If any in-
crease determined under the preceding sen-
tence is not a multiple of $10, such in-
crease shall be rounded to the nearest mul-
tiple of $10.
‘‘(ii) MEDICAL
CARE
COST
ADJUST-
MENT.—For purposes of clause (i), the
medical care cost adjustment for any cal-
endar year is the percentage (if any) by
which—
‘‘(I) the medical care component
of the Consumer Price Index (as de-
fined in section 1(f)(5)) for August of
the preceding calendar year, exceeds
‘‘(II) such component for August
of 1994.’’
(3) Paragraph (6) of section 213(d) of such
Code is amended—
(A) by striking ‘‘subparagraphs (A) and
(B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’, and
(B) by striking ‘‘paragraph (1)(C)’’ in sub-
paragraph 
(A) 
and 
inserting 
‘‘paragraph
(1)(D)’’.
(4) Paragraph (7) of section 213(d) of such
Code is amended by striking ‘‘subparagraphs (A)
and (B)’’ and inserting ‘‘subparagraphs (A), (B),
and (C)’’.
SEC. 304. CERTAIN EXCHANGES OF LIFE INSURANCE CON-
TRACTS FOR LONG-TERM CARE INSURANCE
CONTRACTS NOT TAXABLE.
Subsection (a) of section 1035 of the Internal Reve-
nue Code of 1986 (relating to certain exchanges of insur-
ance contracts) is amended by striking the period at the
end of paragraph (3) and inserting ‘‘; or’’, and by adding
at the end thereof the following new paragraph:
‘‘(4) a contract of life insurance or an endow-
ment or annuity contract for a long-term care insur-
ance contract (as defined in section 818A).’’
SEC. 305. EXCLUSION FROM GROSS INCOME FOR AMOUNTS
WITHDRAWN 
FROM 
INDIVIDUAL 
RETIRE-
MENT PLANS OR 401(k) PLANS FOR LONG-
TERM CARE INSURANCE.
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
items specifically excluded from gross income) is amended
by redesignating section 137 as section 138 and by insert-
ing after section 136 the following new section:
‘‘SEC. 137. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT
ACCOUNTS AND SECTION 401(k) PLANS FOR
LONG-TERM CARE INSURANCE.
‘‘(a) GENERAL RULE.—The amount which would
(but for this section) be includible in the gross income of
an individual for the taxable year by reason of distribu-
tions from any individual retirement account or section
401(k) plan shall be reduced (but not below zero) by the
aggregate premiums paid by such individual during such
taxable year for any long-term care insurance contract (as
defined in section 818A) for the benefit of such individual
or the spouse of such individual.
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) INDIVIDUAL RETIREMENT ACCOUNT.—The
term ‘individual retirement account’ has the mean-
ing given such term by section 408(a).
‘‘(2) SECTION 401(k) PLAN.—The term ‘section
401(k) plan’ means any employer plan which meets
the requirements of section 401(a) and which in-
cludes a qualified cash or deferred arrangement (as
defined in section 401(k)).
‘‘(c) SPECIAL RULES FOR SECTION 401(k) PLANS.—
‘‘(1) WITHDRAWALS
CANNOT
EXCEED
ELEC-
TIVE CONTRIBUTIONS UNDER QUALIFIED CASH OR
DEFERRED ARRANGEMENT.—This section shall not
apply to any distribution from a section 401(k) plan
to the extent the aggregate amount of such distribu-
tions for the use described in subsection (a) exceeds
the aggregate employer contributions made pursuant
to the employee’s election under section 401(k)(2).
‘‘(2) WITHDRAWALS NOT TO CAUSE DISQUALI-
FICATION.—A plan shall not be treated as failing to
satisfy the requirements of section 401, and an ar-
rangement shall not be treated as failing to be a
qualified cash or deferred arrangement (as defined
in section 401(k)(2)), merely because under the plan
or arrangement distributions are permitted which
are excludable from gross income by reason of this
section.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 401(k) of such Code is amended by
adding at the end the following new paragraph:
‘‘(11) CROSS REFERENCE.—
‘‘For provision permitting tax-free withdrawals
for payment of long-term care premiums, see section
137.’’
(2) Section 408(d) of such Code is amended by
adding at the end the following new paragraph:
‘‘(8) CROSS REFERENCE.—
‘‘For provision permitting tax-free withdrawals
from individual retirement accounts for payment of
long-term care premiums, see section 137.’’
(3) The table of sections for such part III is
amended by striking the last item and inserting the
following new items:
‘‘Sec. 137. Distributions from individual retirement accounts and
section 401(k) plans for long-term care insurance.
‘‘Sec. 138. Cross references to other Acts.’’
SEC. 306. TAX TREATMENT OF ACCELERATED DEATH BENE-
FITS UNDER LIFE INSURANCE CONTRACTS.
Section 101 of the Internal Revenue Code of 1986
(relating to certain death benefits) is amended by adding
at the end thereof the following new subsection:
‘‘(g) TREATMENT
OF
CERTAIN
ACCELERATED
DEATH BENEFITS.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, any amount paid or advanced to an individual
under a life insurance contract on the life of an in-
sured—
‘‘(A) who is a terminally ill individual, or
‘‘(B) who is a chronically ill individual (as
defined in section 818A(c)(2)) who is confined
to a qualified facility (as defined in section
818A(c)(3)),
shall be treated as an amount paid by reason of the
death of such insured.
‘‘(2) TERMINALLY ILL INDIVIDUAL.—For pur-
poses of this subsection, the term ‘terminally ill indi-
vidual’ means an individual who has been certified
by a physician as having an illness or physical condi-
tion which can reasonably be expected to result in
death in 12 months or less.
‘‘(3) PHYSICIAN.—For purposes of this sub-
section, the term ‘physician’ has the meaning given
to such term by section 213(d)(4).’’
SEC. 307. EFFECTIVE DATE.
(a) IN GENERAL.—The amendments made by this
title shall apply to taxable years beginning after December
31, 1995.
(b) CONTINUATION OF EXISTING POLICIES.—In the
case of any policy issued before January 1, 1996, which
met the long-term care insurance requirements of the
State in which the policy was sitused at the time the policy
was issued—
(1) such policy shall be treated for purposes of
the Internal Revenue Code of 1986 as a long-term
care insurance contract (as defined in section
818A(b) of such Code), and
(2) services provided under such policy shall be
treated for such purposes as qualified long-term care
(e) TREASURY TO SPECIFY TAX TREATMENT OF
LONG-TERM CARE CONTRACTS WHICH DO NOT MEET
STANDARDS.—Not later than October 1, 1995, the Sec-
retary of the Treasury shall submit to the Congress a re-
port detailing the Department of the Treasury’s interpre-
tation of the treatment under the Internal Revenue Code
of 1986 of contracts which provide long-term care services
but which are not long-term care insurance contracts (as
defined by section 818A(b) of such Code).
TITLE IV—SENIOR CITIZEN
COMMUNITIES
SEC. 401. DEFINITION OF HOUSING FOR OLDER PERSONS.
Subparagraph (C) of section 807(b)(2) of the Fair
Housing Act (42 U.S.C. 3607(b)(2)) is amended to read
as follows:
‘‘(C) that meets the following requirements:
‘‘(i) The housing is in a facility or commu-
nity intended and operated for the occupancy of
at least 80 percent of the occupied units by at
least one person 55 years of age or older.
‘‘(ii) The housing facility or community
publishes and adheres to policies and proce-
dures that demonstrate the intent required
under clause (i), whether or not such policies
and procedures are set forth in the governing
documents of such facility or community.
‘‘(iii) The housing facility or community
complies with rules made by the Secretary for
the verification of occupancy. Such rules shall
allow for that verification by reliable surveys
and affidavits and shall include examples of the
types of policies and procedures relevant to a
determination of compliance with the require-
ment of clause (ii). Such surveys and affidavits
shall be admissible in administrative and judi-
cial proceedings for the purposes of such
verification.’’.
SEC. 402. GOOD FAITH ATTEMPT AT COMPLIANCE DEFENSE
AGAINST CIVIL MONEY DAMAGES.
Section 807(b) of the Fair Housing Act (42 U.S.C.
3607(b)) is amended by adding at the end the following:
‘‘(5) An individual who engages in conduct with a
reasonable good faith reliance on the existence of the ex-
emption of this subsection relating to housing for older
persons is not personally liable for money damages for a
violation of this Act that such an exemption would have
vitiated. For the purposes of this paragraph, a person en-
gaged in the business of residential real estate trans-
actions is presumed to have such a good faith reliance if
that person has no actual knowledge that the facility or
community is not or will not be eligible for such exemption
and the facility or community gives such person a written
certification stating the compliance of the facility or com-
munity with the requirements for such exemption.’’.
Æ
HR 8 SC——2