I
106TH CONGRESS
2D SESSION
H. R. 4316
To amend the Internal Revenue Code of 1986 to exclude United States
savings bond income from gross income if used to pay long-term care
expenses.
IN THE HOUSE OF REPRESENTATIVES
APRIL 13, 2000
Mr. LEWIS of Georgia introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to exclude
United States savings bond income from gross income
if used to pay long-term care expenses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. EXCLUSION OF UNITED STATES SAVINGS BOND
INCOME FROM GROSS INCOME IF USED TO
PAY LONG-TERM CARE EXPENSES.
(a) IN GENERAL.—Subsection (a) of section 135 of
the Internal Revenue Code of 1986 (relating to income
from United States savings bonds used to pay higher edu-
cation tuition and fees) is amended to read as follows:
‘‘(a) EXCLUSION.—
‘‘(1) GENERAL RULE.—In the case of an indi-
vidual who pays qualified expenses during the tax-
able year, no amount shall be includible in gross in-
come by reason of the redemption during such year
of any qualified United States savings bond.
‘‘(2) QUALIFIED EXPENSES.—For purposes of
this section, the term ‘qualified expenses’ means—
‘‘(A) qualified higher education expenses,
and
‘‘(B) eligible long-term care expenses.’’.
(b) LIMITATION WHERE REDEMPTION PROCEEDS
EXCEED QUALIFIED EXPENSES.—Section 135(b)(1) of
the Internal Revenue Code of 1986 (relating to limitation
where redemption proceeds exceed higher education ex-
penses) is amended—
(1) by striking ‘‘higher education’’ in subpara-
graph (A)(ii), and
(2) by striking ‘‘HIGHER EDUCATION’’ in the
heading thereof.
(c) ELIGIBLE LONG-TERM CARE EXPENSES.—Sec-
tion 135(c) of the Internal Revenue Code of 1986 (relating
to definitions) is amended by redesignating paragraph (4)
as paragraph (5) and by inserting after paragraph (3) the
following new paragraph:
‘‘(4) ELIGIBLE LONG-TERM CARE EXPENSES.—
The term ‘eligible long-term care expenses’ means
qualified long-term care expenses (as defined in sec-
tion 7702B(c)) and eligible long-term care premiums
(as defined in section 213(d)(10)) of—
‘‘(A) the taxpayer,
‘‘(B) the taxpayer’s spouse, or
‘‘(C) any dependent of the taxpayer with
respect to whom the taxpayer is allowed a de-
duction under section 151.’’.
(d) ADJUSTMENTS.—Section 135(d) of the Internal
Revenue Code of 1986 (relating to special rules) is amend-
ed by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively, and by inserting after paragraph
(2) the following new paragraph:
‘‘(3) ELIGIBLE LONG-TERM CARE EXPENSE AD-
JUSTMENTS.—The amount of eligible long-term care
expenses otherwise taken into account under sub-
section (a) with respect to an individual shall be re-
duced (before the application of subsection (b)) by
the sum of—
‘‘(A) any amount paid for qualified long-
term care services (as defined in section
7702B(c)) provided to such individual and de-
scribed in section 213(d)(11), plus
‘‘(B) any amount received by the taxpayer
or the taxpayer’s spouse or dependents for the
payment of eligible long-term care expenses
which is excludable from gross income.’’.
(e) COORDINATION WITH DEDUCTIONS.—
(1) Section 213 of the Internal Revenue Code
of 1986 (relating to medical, dental, etc., expenses)
is amended by adding at the end the following new
subsection:
‘‘(f) COORDINATION WITH SAVINGS BOND INCOME
USED FOR EXPENSES.—Any expense taken into account
in determining the exclusion under section 135 shall not
be treated as an expense paid for medical care.’’.
(2) Section 162(l) of such Code (relating to
special rules for health insurance costs of self-em-
ployed individuals) is amended by adding at the end
the following new paragraph:
‘‘(6) COORDINATION WITH SAVINGS BOND IN-
COME
USED
FOR
EXPENSES.—Any expense taken
into account in determining the exclusion under sec-
tion 135 shall not be treated as an expense paid for
medical care.’’.
(f) CLERICAL AMENDMENTS.—
(1) The heading for section 135 of the Internal
Revenue Code of 1986 is amended by inserting
‘‘AND
LONG-TERM
CARE
EXPENSES’’ 
after
‘‘FEES’’.
(2) The item relating to section 135 in the table
of sections for part III of subchapter B of chapter
1 of such Code is amended by inserting ‘‘and long-
term care expenses’’ after ‘‘fees’’.
(g) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
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