II 
Calendar No. 52
108TH CONGRESS 
1ST SESSION H. R. 1308
IN THE SENATE OF THE UNITED STATES 
MARCH 20, 2003
Received and read the first time 
MARCH 21, 2003
Read the second time and placed on the calendar 
AN ACT 
To amend the Internal Revenue Code of 1986 to end certain 
abusive tax practices, to provide tax relief and simplifica-
tion, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
HR 1308 PCS 
SECTION 1. SHORT TITLE; REFERENCES; TABLE OF CON-
TENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Tax Relief, Simplification, and Equity Act of 2003’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows:
Sec. 1. Short title; references; table of contents. 
TITLE I—ENDING ABUSIVE TAX PRACTICES 
Sec. 101. Individual expatriation to avoid tax. 
Sec. 102. Suspension of tax-exempt status of terrorist organizations. 
Sec. 103. Expressing the sense of the Congress that tax reform is needed to 
address the issue of corporate expatriation. 
TITLE II—RELIEF FOR FOREIGN SERVICE AND ASTRONAUTS 
Sec. 201. Special rule for members of Foreign Service in determining exclusion 
of gain from sale of principal residence. 
Sec. 202. Tax relief and assistance for families of astronauts who lose their 
lives on a space mission. 
TITLE III—HEALTH PROVISIONS 
Sec. 301. Vaccine tax to apply to hepatitis A vaccine. 
Sec. 302. Expansion of human clinical trials qualifying for orphan drug credit. 
TITLE IV—FOREST CONSERVATION ACTIVITIES 
Sec. 401. Pilot project for forest conservation activities. 
TITLE V—RELIEF AND EQUITY FOR SMALL BUSINESSES 
Sec. 501. Simplification of excise tax imposed on bows and arrows. 
Sec. 502. Capital gain treatment under section 631(b) to apply to outright 
sales by landowners. 
Sec. 503. Repeal of excise tax on fishing tackle boxes. 
Sec. 504. Treatment under at-risk rules of publicly traded nonrecourse debt.
HR 1308 PCS 
TITLE VI—EQUITY FOR FARMERS 
Sec. 601. Special rules for livestock sold on account of weather-related condi-
tions. 
Sec. 602. Income averaging for farmers not to increase alternative minimum 
tax. 
Sec. 603. Payment of dividends on stock of cooperatives without reducing pa-
tronage dividends. 
TITLE VII—PROTECTION OF SOCIAL SECURITY 
Sec. 701. Protection of social security.
TITLE I—ENDING ABUSIVE TAX 
PRACTICES 
SEC. 101. INDIVIDUAL EXPATRIATION TO AVOID TAX. 
(a) EXPATRIATION TO AVOID TAX.—
(1) IN
GENERAL.—Subsection (a) of section 
877 (relating to treatment of expatriates) is amend-
ed to read as follows: 
‘‘(a) TREATMENT OF EXPATRIATES.—
‘‘(1) IN GENERAL.—Every nonresident alien in-
dividual to whom this section applies and who, with-
in the 10-year period immediately preceding the 
close of the taxable year, lost United States citizen-
ship shall be taxable for such taxable year in the 
manner provided in subsection (b) if the tax imposed 
pursuant to such subsection (after any reduction in 
such tax under the last sentence of such subsection) 
exceeds the tax which, without regard to this section, 
is imposed pursuant to section 871.
HR 1308 PCS 
‘‘(2) INDIVIDUALS
SUBJECT
TO
THIS
SEC-
TION.—This section shall apply to any individual 
if—
‘‘(A) the average annual net income tax 
(as defined in section 38(c)(1)) of such indi-
vidual for the period of 5 taxable years ending 
before the date of the loss of United States citi-
zenship is greater than $122,000, 
‘‘(B) the net worth of the individual as of 
such date is $2,000,000 or more, or 
‘‘(C) such individual fails to certify under 
penalty of perjury that he has met the require-
ments of this title for the 5 preceding taxable 
years or fails to submit such evidence of such 
compliance as the Secretary may require. 
In the case of the loss of United States citizenship 
in any calendar year after 2003, such $122,000 
amount shall be increased by an amount equal to 
such dollar amount multiplied by the cost-of-living 
adjustment determined under section 1(f)(3) for 
such calendar year by substituting ‘2002’ for ‘1992’ 
in subparagraph (B) thereof. Any increase under the 
preceding sentence shall be rounded to the nearest 
multiple of $1,000.’’.
HR 1308 PCS 
(2) REVISION
OF
EXCEPTIONS
FROM
ALTER-
NATIVE TAX.—Subsection (c) of section 877 (relat-
ing to tax avoidance not presumed in certain cases) 
is amended to read as follows: 
‘‘(c) EXCEPTIONS.—
‘‘(1) IN
GENERAL.—Subparagraphs (A) and 
(B) of subsection (a)(2) shall not apply to an indi-
vidual described in paragraph (2) or (3). 
‘‘(2) DUAL CITIZENS.—
‘‘(A) IN GENERAL.—An individual is de-
scribed in this paragraph if—
‘‘(i) the individual became at birth a 
citizen of the United States and a citizen 
of another country and continues to be a 
citizen of such other country, and 
‘‘(ii) the individual has had no sub-
stantial contacts with the United States. 
‘‘(B) SUBSTANTIAL CONTACTS.—An indi-
vidual shall be treated as having no substantial 
contacts with the United States only if the indi-
vidual—
‘‘(i) was never a resident of the 
United States (as defined in section 
7701(b)),