An act to extend certain temporary tax provisions, and for other purposes.
PL 96-541 (H.R.6975), enacted 12/17/1980

94 STAT. 3204 
PUBLIC LAW 96-541—DEC. 17, 1980 
Public Law 96-541 
96th Congress 
An Act 
^ec. 1<, ItJoU 
rpQ extend certain temporary tax provisions, and for other purposes. 
[H.R. 6975] 
Be it enacted by the Senate and House of Representatives of the 
Temporary tax 
United States of America in Congress assembled, 
provisions, 
extension. 
SECTION 1. 18-MONTH 
EXTENSION OF PROVISIONS 
RELATING TO 
EMPLOYMENT STATUS FOR EMPLOYMENT TAXES. 
(a) IN GENERAL.—Subsection (a) of section 530 of the Revenue Act of 
26 use 3401 
1978 (relating to termination of certain employment tax liability for 
^°^- 
periods before 1981) is amended— 
(1) by striking out "January 1, 1981" in paragraphs (1)(A) and 
(3) and inserting in lieu thereof "July 1,1982", 
(2) by striking out "1981" in the subsection heading and 
inserting in lieu thereof "July 1,1982", and 
(3) by striking out "1979 and 1980" in the heading for para-
graph (3) and inserting in lieu thereof "prior". 
O
?
) PROHIBITION AGAINST REGULATIONS AND RULINGS ON EMPLOY-
MENT STATUS.—Subsection 0?) of section 530 of the Revenue Act of 
1978 is amended by striking out "January 1, 1981" and inserting in 
lieu thereof "July 1,1982". 
SEC. 2. THREE-YEAR EXTENSION OF PROVISIONS RELATING TO HIS-
TORIC PRESERVATION. 
(a) AMORTIZATION OF CERTAIN REHABILITATION EXPENDITURES.— 
26 use 191. 
Section 191 of the Internal Revenue Code of 1954 (relating to 
amortization of certain rehabilitation expenditures for certified his-
toric structures) is amended by redesignating subsection (g) as subsec-
tion (h) and by inserting after subsection (f) the following new 
subsection: 
"(g) APPLICATION OF SECTION.—This section shall apply with 
respect to additions to capital account made after June 14, 1976, and 
before January 1,1984.". 
Qo) DENIAL OF DEDUCTIONS FOR CERTAIN DEMOLITIONS.—Section 
26 use 280B. 
280B of such Code (relating to denial of deduction for demolition of 
certain historic structures) is amended by adding at the end thereof 
the following new subsection: 
"(c) APPLICATION OF SECTION.—This section shall apply with respect 
to demolitions commencing after June 30,1976, and before January 1, 
1984.". 
(c) DEPRECIATION OF IMPROVEMENTS.—Subsection (n) of section 167 
26 use 167. 
of such Code (relating to depreciation of improvements) is amended 
by adding at the end thereof the following new paragraph: 
"(4) APPLICATION OF SUBSECTION.—This subsection shall apply 
to that portion of the basis which is attributable to construction, 
reconstruction, or erection after December 31, 1975, and before 
January 1,1984.". 
(d) DEPRECIATION OF CERTAIN SUBSTANTIALLY REHABILITATED HIS-
TORIC PROPERTY.—Subsection (o) of section 167 of such Code (relating 
PUBLIC LAW 96-541—DEC. 17, 1980 
94 STAT. 3205 
to depreciation of substantially rehabilitated historic property) is 
amended by adding at the end thereof the following new paragraph: 
"(3) APPLICATION OF SUBSECTION.—This subsection shall apply 
with respect to additions to capital account occurring after June 
30,1976, and before January 1,1984.". 
(e) CONFORMING AMENDMENT.—The following provisions of section Repeals. 
2124 of the Tax Reform Act of 1976 are hereby repealed: 
(1) paragraph (4) of subsection (a), 
26 USC 191 note. 
(2) paragraph (8) of subsection (b), 
26 USC 280B 
(3) paragraph (2) of subsection (c), and 
26°USC 167 note 
(4) paragraph (2) of subsection (d). 
SEC. 3. TWO-YEAR EXTENSION OF PROVISION FOR 60-MONTH DEPRECI-
ATION OF EXPENDITURES TO REHABILITATE LOW-INCOME 
RENTAL HOUSING. 
Subsection (k) of section 167 of the Internal Revenue Code of 1954 26 USC 167. 
(relating to depreciation of expenditures to rehabilitate low-income 
rental housing) is amended by striking out "January 1, 1982" each 
place it appears and inserting in lieu thereof "January 1, 1984". 
SEC. 4. TWO-YEAR EXTENSION OF CREDIT OR REFUND OF TAX ON 
FUELS USED IN CERTAIN TAXICABS. 
Paragraph (3) of section 6427(e) of the Internal Revenue Code of 
1954 (relating to termination of credit or refund of tax on fuels used in 26 USC 6427. 
certain taxicabs) is amended by striking out "1980" and inserting in 
lieu thereof "1982". 
SEC. 5. EXTENSION OF CERTAIN PROVISIONS RELATING TO EXCLUSION 
OF SCHOLARSHIP INCOME. 
(a) FEDERAL GRANTS NOT INCLUDABLE IN GROSS INCOME MERELY 
BECAUSE THE RECIPIENT IS REQUIRED TO RENDER FUTURE SERVICE AS A 
FEDERAL EMPLOYEE.— 
(1) IN GENERAL.—Section 117 of the Internal Revenue Code of 
1954 (relating to scholarships and fellowship grants) is amended 
26 USC 117. 
by adding at the end thereof the following new subsection: 
"(c) FEDERAL GRANTS FOR TUITION AND RELATED EXPENSES NOT 
INCLUDABLE MERELY BECAUSE THERE IS REQUIREMENT OF FUTURE 
SERVICE AS FEDERAL EMPLOYEE.— 
"(1) IN GENERAL.—If— 
"(A) an amount received by an individual under a Federal 
program would be excludable under subsections (a) and (b) as 
a scholarship or fellowship grant but for the fact that the 
individual is required to perform future service as a Federal 
employee, and 
"(B) the individual establishes that, in accordance with the 
terms of the grant, such amount was used for qualified 
tuition and related expenses, 
gross income shall not include such amount. 
"(2) QUALIFIED TUITION AND RELATED EXPENSES DEFINED.—For 
purposes of this subsection— 
"(A) IN GENERAL.—The term 'qualified tuition and related 
expenses' means— 
"(i) tuition and fees required for the enrollment or 
attendance of a student at an institution of higher 
education, and 
"(ii) fees, books, supplies, and equipment required 
for courses of instruction at an institution of higher 
education. 
79-194 O—81—pt. 3 
36 : QL3 
94 STAT. 3206 
PUBLIC LAW 96-541—DEC. 17, 1980 
"(B) INSTITUTION OF HIGHER EDUCATION.—The term 'insti-
tution of higher education' means an educational institution 
in any State which— 
"(i) admits as regular students only individuals 
having a certificate of graduation from a high school, or 
the recognized equivalent of such a certificate, 
"(ii) is legally authorized within such State to provide 
a program of education beyond high school, 
"(iii) provides an educational program for which it 
awards a bachelor's or higher degree, provides a pro-
gram which is acceptable for full credit toward such a 
degree, or offers a program of training to prepare 
students for gainful employment in a recognized health 
profession, and 
"(iv) is a public or other nonprofit institution. 
"(3) SERVICE AS FEDERAL EMPLOYEE.—For purposes of this 
subsection, service in a health manpower shortage area shall be 
treated as service as a Federal employee.". 
(2) EFFECTIVE DATE.—The amendment made by paragraph (1) 
shall apply to taxable years beginning after December 31, 1980. 
(b) NATIONAL RESEARCH SERVICE AWARDS.—Paragraph (2) of sec-
26 use 117 
tion 161(b) of the Revenue Act of 1978 (relating to national research 
^°^- 
service awards) is amended by striking out "1980" and inserting in 
lieu thereof "1981". 
SEC. 6. REVISING AND MAKING PERMANENT RULES ALLOWING DEDUC-
TION FOR CONTRIBUTIONS FCR CONSERVATION PURPOSES. 
(a) IN GENERAL.—Paragraph (3) of section 170(f) of the Internal 
26 use 170. 
Revenue Code of 1954 (relating to denial of deduction in case of 
certain contributions of partial interests in property) is amended by 
striking out subparagraphs (B) and (C) thereof and inserting in lieu 
thereof the following new subparagraph: 
"(B) EXCEPTIONS.—Subparagraph (A) shall not apply to— 
"(i) a contribution of a remainder interest in a per-
sonal residence or farm, 
"(ii) a contribution of an undivided portion of the 
taxpayer's entire interest in property, and 
"(iii) a qualified conservation contribution.". 
(b) QUALIFIED CONSERVATION CONTRIBUTION DEFINED.—Section 170 
of such Code is amended by redesignating subsections (h) and (i) as 
subsections (i) and (j), respectively, and by inserting after subsection 
(g) the following new subsection: 
"(h) QUALIFIED CONSERVATION CONTRIBUTION.— 
Supra. 
"(1) IN GENERAL.—For purposes of subsection (f)(3)(B)(iii), 
the 
term 
'qualified 
conservation 
contribution' 
means 
a 
contribution— 
"(A) of a qualified real property interest, 
"(B) to a qualified organization, 
"(C) exclusively for conservation purposes. 
"(2) QUALIFIED REAL PROPERTY INTEREST.—For purposes of this 
subsection, the term 'qualified real property interest' means any 
of the following interests in real property: 
"(A) the entire interest of the donor other than a qualified 
mineral interest, 
"(B) a remainder interest, and 
"(C) a restriction (granted in perpetuity) on the use which 
may be made of the real property. 
PUBLIC LAW 96-541—DEC. 17, 1980 
94 STAT. 3207 
"(3) QUALIFIED ORGANIZATION.—For purposes of paragraph (1), 
the term 'quaUfied organization' means an organization which— 
"(A) is described in clause (v) or (vi) of subsection (b)(l){A), 
or 
"(B) is described in section 501(c)(3) and— 
26 USC 501. 
"(i) meets the requirements of section 509(a)(2), or 26 USC 509. 
"(ii) meets the requirements of section 509(a)(3) and is 
controlled by an organization described in subpara-
graph (A) or in clause (i) of this subparagraph. 
"(4) CONSERVATION PURPOSE DEFINED.— 
"(A) IN GENERAL.—For purposes of this subsection, the 
term 'conservation purpose means— 
"(i) the preservation of land areas for outdoor recrea-
tion by, or the education of, the general public, 
"(ii) the protection of a relatively natural habitat of 
fish, wildlife, or plants, or similar ecosystem, 
"(iii) the preservation of open space (including farm-
land and forest land) where such preservation is— 
"(I) for the scenic enjoyment of the general public, 
or 
"(II) pursuant to a clearly delineated Federal, 
State, or local governmental conservation policy, 
and will yield a significant public benefit, or 
"(iv) the preservation of an historically important 
land area or a certified historic structure. 
"(B) CERTIFIED HISTORIC STRUCTURE.—For purposes of sub-
paragraph (AXiv), the term 'certified historic structure' 
means any building, structure, or land area which— 
"(i) is listed in the National Register, or 
"(ii) is located in a registered historic district (as 
defined in section 191(d)(2)) and is certified by the 26USC191. 
Secretary of the Interior to the Secretary as being of 
historic significance to the district. 
A building, structure, or land area satisfies the preceding sen-
tence if it satisfies such sentence either at the time of the 
transfer or on the due date (including extensions) for filing the 
transferor's return under this chapter for the taxable year in 
which the transfer is made. 
"(5) EXCLUSIVELY FOR CONSERVATION PURPOSES.—For purposes 
of this subsection— 
"(A) CONSERVATION PURPOSE MUST BE PROTECTED.—A con-
tribution shall not be treated as exclusively for conservation 
purposes unless the conservation purpose is protected in 
perpetuity. 
"(B) No SURFACE MINING PERMITTED.—In the case of a 
contribution of any interest where there is a retention of a 
qualified mineral interest, subparagraph (A) shall not be 
treated as met if at any time there may be extraction or 
removal of minerals by any surface mining method. 
"(6) QUALIFIED MINERAL INTEREST.—For purposes of this sub-
section, the term 'qualified mineral interest means— 
"(A) subsurface oil, gas, or other minerals, and 
"(B) the right to access to such minerals.", 
(c) DEDUCTION FOR CONTRIBUTIONS FOR CONSERVATION PURPOSES 
MADE PERMANENT.—Section 309(b)(1) of the Tax Reduction and 
Simplification Act of 1977 and section 2124(e)(4) of the Tax Reform, 26 USC 170 note. 
Act of 1976 are each amended by striking out ", and before June 14, 26 USC 170 note. 
1981". 
94 STAT. 3208 
PUBLIC LAW 96-541—DEC. 17, 1980 
26 use 1
7
0 note. 
(d) EFFECTIVE DATE.—The amendments made by subsections (a) and 
(b) shall apply to transfers made after the date of the enactment of 
this Act in taxable years ending after such date. 
Approved December 17, 1980. 
LEGISLATIVE HISTORY: 
HOUSE REPORT No. 96-1108 (Comm. on Ways and Means). 
SENATE REPORT No. 96-1007 (Comm. on Finance). 
CONGRESSIONAL RECORD, Vol. 126 (1980): 
July 21, considered and passed House. 
# 
Oct. 2, considered and passed Senate, amended. 
Dec. 1, House agreed to Senate amendments.