I
106TH CONGRESS
2D SESSION
H. R. 4515
To amend the Internal Revenue Code of 1986 to reduce the interest rate
on installment payments of the estate tax on closely held business interests.
IN THE HOUSE OF REPRESENTATIVES
MAY 23, 2000
Mr. GONZALEZ (for himself, Ms. VELA´ZQUEZ, Mr. RODRIGUEZ, and Mr.
HINOJOSA) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to reduce
the interest rate on installment payments of the estate
tax on closely held business interests.
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 ‘‘Family Business Pres-
ervation Act of 2000’’.
SEC. 2. REDUCTION OF RATE OF INTEREST ON PORTION OF
ESTATE TAX EXTENDED UNDER SECTION
6166.
(a) IN GENERAL.—Subsection (j) of section 6601 of
the Internal Revenue Code of 1986 (relating to 2-percent
rate on certain portion of estate tax extended under sec-
tion 6166) is amended to read as follows:
‘‘(j) REDUCED RATES ON CERTAIN PORTIONS OF ES-
TATE TAX EXTENDED UNDER SECTION 6166.—
‘‘(1) IN GENERAL.—If the time for payment of
an amount of tax imposed by chapter 11 is extended
as provided in section 6166, then in lieu of the an-
nual rate provided by subsection (a)—
‘‘(A) no interest shall be paid on the 0-per-
cent portion of such amount,
‘‘(B) interest on the 2-percent portion of
such amount shall be paid at the rate of 2 per-
cent, and
‘‘(C) interest on so much of such amount
as exceeds the sum of the 0-percent portion and
the 2-percent portion shall be paid at a rate
equal to 45 percent of the annual rate provided
by subsection (a).
For purposes of this subsection, the amount of any
deficiency which is prorated to installments payable
under section 6166 shall be treated as an amount of
tax payable in installments under such section.
‘‘(2) 0-PERCENT
PORTION.—For purposes of
this subsection, the term ‘0-percent portion’ means
the lesser of—
‘‘(A)(i) the amount of the tentative tax
which would be determined under the rate
schedule set forth in section 2001(c) if the
amount with respect to which such tentative tax
is to be computed were the sum of $1,000,000
and the applicable exclusion amount in effect
under section 2010(c), reduced by
‘‘(ii) the applicable credit amount in effect
under section 2010(c), or
‘‘(B) the amount of the tax imposed by
chapter 11 which is extended as provided in
section 6166.
‘‘(3) 2-PERCENT
PORTION.—For purposes of
this subsection, the term ‘2-percent portion’ means
the excess (if any) of—
‘‘(A) the lesser of—
‘‘(i)(I) the amount of the tentative tax
which would be determined under the rate
schedule set forth in section 2001(c) if the
amount with respect to which such ten-
tative tax is to be computed were the sum
of $10,000,000 and the applicable exclu-
sion amount in effect under section
2010(c), reduced by
‘‘(II) the applicable credit amount in
effect under section 2010(c), or
‘‘(ii) the amount of the tax imposed
by chapter 11 which is extended as pro-
vided in section 6166, over
‘‘(B) the 0-percent portion.
‘‘(4) INFLATION ADJUSTMENT.—In the case of
estates of decedents dying in a calendar year after
1998, the $1,000,000 amount contained in para-
graph (2)(A) and the $10,000,000 amount in para-
graph (3)(A)(i) shall each be increased by an
amount equal to—
‘‘(A) such dollar amount, multiplied by
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar
year by substituting for ‘calendar year 1992’ in
subparagraph (B) thereof—
‘‘(i) ‘calendar year 1997’ in the case
of the $1,000,000 amount, and
‘‘(ii) ‘calendar year 2000’ in the case
of the $10,000,000 amount.
If any amount as adjusted under the preceding sen-
tence is not a multiple of $10,000, such amount
shall be rounded to the next lowest multiple of
$10,000.
‘‘(5) 
TREATMENT
OF
PAYMENTS.—If 
the
amount of tax imposed by chapter 11 which is ex-
tended as provided in section 6166 exceeds the
amount described in paragraph (3)(A), any payment
of any portion of such amount shall, for purposes of
computing interest for periods after such payment,
be treated as reducing the 0-percent portion and the
2-percent portion, respectively, by an amount which
bears the same ratio to the amount of such payment
as the amount of the 0-percent portion and 2-per-
cent portion (determined without regard to this
paragraph), respectively, bears to the amount of the
tax which is extended as provided in section 6166.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to estates of decedents dying after
December 31, 2000.
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