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JCT Releases Tax Legislation 'Blue Book' for 1997

DEC. 17, 1997

JCS-23-97

DATED DEC. 17, 1997

DOCUMENT ATTRIBUTES

Institutional Authors
Joint Committee on Taxation
Cross-Reference
For the full text of P.L. 105-2, see Doc 97-10253 (6 pages) or 97 TNT

71-76.

For the full text of the conference committee-approved H.R. 2014, see

Doc 97-22231 (900 pages) or 97 TNT 148-41 through 97 TNT 148-58.

For the full text of tax-related excerpts of H.R. 2015 as approved by

House and Senate conferees, see Doc 97-22228 (51 pages) or 97 TNT

147-23.

For the full text of H.R. 1226 as approved by the House and accepted

by the Senate, see Doc 97-10664 (7 pages) or 97 TNT 74-17.

For related text, see the Tax Notes Today Table of Contents for

Dec. 19, 1997.
Subject Area/Tax Topics
Business Tax Issues
Estate, Gift, Trusts
Excises and User Fees
Financial Institutions (incl. insurance)
Individual Income Taxes
International
Legislative and Policy Issues
Pensions, Benefits, ERISA
Index Terms
legislation, tax
tax policy, simplification
Taxpayers Bill of Rights
medical savings accounts
IRAs
Airport and Airway Trust Fund
education, tax incentives
tobacco, rates
excise taxes
estate tax
Jurisdictions
United States
Language
English
Tax Analysts Document Number
Doc 97-33838 (572 pages)
Tax Analysts Electronic Citation
97 TNT 244-12

Citations: JCS-23-97

====== SUMMARY ======

The Joint Committee on Taxation has released its tax "blue book," a comprehensive description of tax legislation enacted in 1997 (JCS-23-97). In an introductory note, the JCT explains that the reports it prepares on tax proposals as they move through Congress often do not reflect the form of those bills as finally approved. The blue book is prepared "so that Members of Congress, tax practitioners, and other interested parties can have an explanation of the final tax legislation enacted in 1997 in one publication."

Part One of JCS-23-97 contains explanations of provisions in the Airport and Airway Trust Fund Reinstatement Act of 1997 (H.R. 668, P.L. 105-2) relating to the temporary extension of Airport and Airway Trust Fund excise taxes. (For the full text of P.L. 105-2, see Doc 97-10253 (6 pages) or 97 TNT 71-76.)

Part Two explains the Taxpayer Relief Act of 1997 (H.R. 2014, P.L. 105-34). (For the full text of the conference committee-approved H.R. 2014, see Doc 97-22231 (900 pages) or 97 TNT 148-41 through 97 TNT 148-58.)

Part Three addresses revenue provisions of the Balanced Budget Act of 1997 (H.R. 2015, P.L. 105-33). (For the full text of tax- related excerpts of H.R. 2015 as approved by House and Senate conferees, see Doc 97-22228 (51 pages) or 97 TNT 147-23.)

Part Four is an explanation of the Taxpayer Browsing Protection Act (H.R. 1226, P.L. 105-35) relating to prohibitions on the browsing of taxpayer returns and information. (For the full text of H.R. 1226 as approved by the House and accepted by the Senate, see Doc 97-10664 (7 pages) or 97 TNT 74-17.)

Part Five explains section 9 of S. 1519 (P.L. 105-130), which extended the Highway Trust Fund. An appendix sets out projections of the effects of 1997 tax legislation on federal revenue for fiscal years 1997-2007.

The text at this citation is the table of contents of JCS-23-97. [Editor's note: The majority of the text of this JCT pamphlet will appear in Tax Notes Today for December 22; text of the revenue tables at the end of JCS-23-97 will be published in a future edition of TNT.]

====== FULL TEXT ======

ERRATA

"GENERAL EXPLANATION OF TAX LEGISLATION ENACTED IN 1997"

1. On page 105, in the paragraph under Effective Date, the words

"on or" should be inserted between the words "purchases" and "after"

in the next to last line of the paragraph.

2. On page 205, in the second full paragraph under the heading

Effective Date, "a written agreement" in lines 4 and 5 of the

paragraph should be "an agreement", and the word "written" in line 10

of that paragraph should be deleted.

3. On page 310, in footnote 281a, the Treasury Regulation

reference should be to Treas. Reg. sec. 1291-9(i).

* * * * *

GENERAL EXPLANATION OF

TAX LEGISLATION ENACTED IN 1997

PREPARED BY THE STAFF

OF THE

JOINT COMMITTEE ON TAXATION

DECEMBER 17, 1997

SUMMARY CONTENTS

Introduction

Part One: Airport and Airway Trust Fund Extension Act of 1997 (H.R.

668)

Part Two: Taxpayer Relief Act of 1997 (H.R. 2014)

Part Three: Revenue Provisions of the Balanced Budget Act of 1997

(H.R. 2015)

Part Four: Taxpayer Browsing Protection Act (H.R. 1226)

Part Five: Highway Trust Fund Extension (sec. 9 of S. 1519)

Appendix: Estimated Budget Effects of Tax Legislation Enacted in

1997

CONTENTS

Introduction

Part One: Airport and Airway Trust Fund Extension Act of 1997 (H.R.,

668)

Part Two: Taxpayer Relief Act of 1997 (H.R. 2014)

TITLE I. CHILD TAX CREDIT

A. Child Tax Credit for Children Under Age 17 (sec. 101(a), (c),

and (d))

B. Expand Definition of High-Risk Individuals With Respect to

Tax-Exempt State-Sponsored Organizations Providing Health

Coverage (sec. 101(c))

TITLE II. EDUCATION TAX INCENTIVES

A. Tax Benefits Relating to Education Expenses

1. HOPE tax credit and Lifetime Learning tax credit for

higher education tuition expenses (sec. 201)

2. Deduction for student loan interest (sec. 202)

3. Penalty-free withdrawals from IRAs for higher education

expenses (sec. 203)

4. Tax treatment of qualified State tuition programs and

education IRAs; exclusion for certain distributions from

education IRAs used to pay qualified higher education

expenses (secs. 211 and 213)

B. Other Education-Related Tax Provisions

1. Extension of exclusion for employer-provided educational

assistance (sec. 221)

2. Modification of $150 million limit on qualified

501(c)(3) bonds other than hospital bonds (sec. 222)

3. Expansion of arbitrage rebate exception for certain

bonds (sec. 223)

4. Enhanced deduction for corporate contributions of

computer technology and equipment (sec. 224)

5. Treatment of cancellation of certain student loans (sec.

225)

6. Tax credit for holders of qualified zone academy bonds

(sec. 226)

TITLE III. SAVINGS AND INVESTMENT TAX INCENTIVES

A. Individual Retirement Arrangements (secs. 301-304)

B. Capital Gains Provisions

1. Maximum rate of tax on net capital gains of individuals

(sec. 311)

2. Exclusion of gain on sale of principal residence (sec.

312)

3. Exception from real estate reporting requirements for

certain sales of principal residences (secs. 312(c) and

701)

4. Rollover of gain from sale of certain small business

stock (sec. 313)

5. Computation of alternative capital gains tax for

corporations (sec. 314)

TITLE IV. ALTERNATIVE MINIMUM TAX PROVISIONS

A. Repeal Alternative Minimum Tax for Small Businesses and

Modify the Depreciation Adjustment (secs. 401-402)

B. Repeal AMT Installment Method Adjustment for Farmers (sec.

403)

TITLE V. ESTATE, GIFT, AND GENERATION-SKIPPING TAX PROVISIONS

A. Estate and Gift Tax Provisions

1. Increase in estate and gift tax unified credit indexing

of certain other estate and gift tax provisions (sec.

501)

2. Estate tax exclusion for qualified family-owned

businesses (sec. 502)

3. Installment payments of estate tax attributable to

closely held businesses (sec. 503)

4. Estate tax recapture from cash leases of specially-

valued property (sec. 504)

5. Clarify eligibility for extension of time for payment of

estate tax (sec. 505)

6. Gifts may not be revalued for estate tax purposes after

expiration of statute of limitations (sec. 506)

7. Repeal of throwback rules applicable to domestic trusts

(sec. 507)

8. Reduction in estate tax for certain land subject to

permanent conservation easement (sec. 508)

B. Generation-Skipping Tax Provision

1. Modification of generation-skipping transfer tax for

transfer to individuals with deceased parents (sec. 511)

TITLE VI. EXTENSION OF CERTAIN EXPIRING TAX PROVISIONS

A. Research Tax Credit (sec. 601)

B. Contributions of Stock to Private Foundations (sec. 602)

C. Work Opportunity Tax Credit (sec. 603)

D. Orphan Drug Tax Credit (sec. 604)

TITLE VII. DISTRICT OF COLUMBIA TAX INCENTIVES (sec. 701)

TITLE VIII. WELFARE-TO-WORK TAX CREDIT (sec. 801)

TITLE IX. MISCELLANEOUS PROVISIONS

A. Excise Tax Provisions

1. Transfer of General Fund highway fuels tax revenues to

the Highway Trust Fund (sec. 901)

2. Repeal excise tax on diesel fuel used in recreational

motorboats (sec. 902)

3. Continued application of tax on imported recycled Halon-

1211 (sec. 903)

4. Uniform rate of excise tax on vaccines (sec. 904)

5. Treat certain gasoline "chain retailers" as wholesale

distributors under the gasoline excise tax refund rules

(sec. 905)

6. Exemption of electric and other clean-fuel motor

vehicles from luxury automobile classification (sec.

906)

7. Tax certain alternative fuels based on energy

equivalency to gasoline (sec. 907)

8. Reduce rate of alcohol excise tax on certain hard ciders

(sec. 908)

9. Study feasibility of moving collection point for

distilled spirits excise tax (sec. 909)

10. Codify Treasury Department regulations regulating wine

labels (sec. 910)

B. Disaster Relief Provisions

1. Authority to postpone certain tax-related deadlines by

reason of Presidentially declared disaster (sec. 911)

2. Use of certain appraisals to establish amount of

disaster loss (sec. 912)

3. Treatment of livestock sold on account of weather-

related conditions (sec. 913)

4. Mortgage bond financing for residence located in

Presidentially declared disaster areas (sec. 914)

5. Requirement to abate interest by reason of

Presidentially declared disaster (sec. 915)

C. Provisions Relating to Employment Taxes

1. Clarification of standard to be used in determining tax

status of retail securities brokers (sec. 921)

2. Clarification of exemption from self-employment tax for

certain termination payments received by former

insurance salesman (sec. 922)

D. Provisions Relating to Small Businesses

1. Delay imposition of penalties for failure to make

payments electronically through EFTPS (sec. 931)

2. Home office deduction: clarification of definition of

principal place of business (sec. 932)

3. Income averaging for farmers (sec. 933)

4. Increase deduction for health insurance costs of self-

employed individuals (sec. 934)

5. Moratorium on regulations regarding employment taxes of

limited partners (sec. 935)

E. Expensing of Environmental Remediation Costs ("Brownfields")

(sec. 941)

F. Empowerment Zones and Enterprise Communities (secs. 951-956)

G. Other Provisions

1. Shrinkage estimates for inventory accounting (sec. 961)

2. Treatment of workmen's compensation liability under

rules for certain personal injury liability assignments

(sec. 962)

3. Tax-exempt status for certain State workmen's

compensation act companies (sec. 963)

4. Election for 1987 partnership to continue exception from

treatment of publicly traded partnerships as

corporations (sec. 964)

5. Exclusion from UBIT for certain corporate sponsorship

payments (sec. 965)

6. Timeshare associations (sec. 966)

7. Modification of advance refunding rules for certain tax-

exempt bonds issued by the Virgin Islands (sec. 967)

8. Deferral of gain on certain sales of farm product

refiners and processors (sec. 968)

9. Increased deduction for business meals while operating

under Department of Transportation hours of service

limitations (sec. 969)

10. Deductibility of meals provided for the convenience of

the employer (sec. 970)

11. Modify limits on depreciation of luxury automobiles for

certain clean-burning fuel and electric vehicles (sec.

971)

12. Temporary suspension of income limitations on

percentage depletion for production from marginal wells

(sec. 972)

13. Increase in standard mileage rate for purposes of

computing charitable deduction (sec. 973)

14. Purchasing of receivables by tax-exempt hospital

cooperative service organizations (sec. 974)

15. Provide above-the-line-deduction for certain business

expenses in connection with service performed by

certain officials (sec. 975)

16. Combined employment tax reporting demonstration project

(sec. 976)

17. Elective carryback of existing net operating losses of

the National Railroad Passenger Corporation (Amtrak)

(sec. 977)

H. Extension of Duty-Free Treatment Under the Generalized System

of Preferences (sec. 981)

TITLE X. REVENUE-INCREASE PROVISIONS

A. Financial Products

1. Require recognition of gain on certain appreciated

financial positions in personal property (sec. 1001(a))

2. Election of mark-to-market for securities traders and

for traders and dealers in commodities (sec. 1001(b))

3. Limitation on exception for investment companies under

section 351 (sec. 1002)

4. Gains and losses from certain terminations with respect

to property (sec. 1003)

5. Determination of original issue discount where pooled

debt obligations subject to acceleration (sec. 1004)

6. Deny interest deduction on certain debt instruments

(sec. 1005)

B. Corporate Organizations and Reorganizations

1. Require gain recognition for certain extraordinary

dividends (sec. 1011)

2. Require gain recognition on certain distributions of

controlled corporation stock (sec. 1012)

3. Reform tax treatment of certain corporate stock

transfers (sec. 1013)

4. Treat certain preferred stock as "boot" (sec. 1014)

5. Modify holding period for dividends-received deduction

(sec. 1015)

C. Administrative Provisions

1. Reporting of certain payments made to attorneys (sec.

1021)

2. Information reporting on persons receiving contract

payments from certain Federal agencies (sec. 1022)

3. Disclosure of tax return information for administration

of certain veterans programs (sec. 1023)

4. Establish IRS continuous levy and improve debt

collection (secs. 1024-1026)

5. Consistency rule for beneficiaries of trusts and estates

(sec. 1027)

6. Registration of confidential corporate tax shelters and

substantial understatement penalty (sec. 1028)

D. Excise and Employment Tax Provisions

1. Extension and modification of Airport and Airway Trust

Fund excise taxes (sec. 1031)

2. Extend diesel fuel excise tax rules to kerosene (sec.

1032)

3. Reinstate Leaking Underground Storage Tank Trust Fund

excise tax (sec. 1033)

4. Application of communications excise tax to prepaid

telephone cards (sec. 1034)

5. Extension of temporary Federal unemployment surtax (sec.

1035)

E. Provisions Relating to Tax-Exempt Organizations

1. Extend UBIT rules to second-tier subsidiaries and amend

control test (sec. 1041)

2. Repeal grandfather rule with respect to pension business

of certain insurers (sec. 1042)

F. Foreign Provisions

1. Inclusion of income from notional principal contracts

and stock lending transactions under Subpart F (sec.

1051)

2. Restrict like-kind exchange rules for certain personal

property (sec. 1052)

3. Impose holding period requirement for claiming foreign

tax credits with respect to dividends (sec. 1053)

4. Limitation on treaty benefits for payments to hybrid

entities (sec. 1054)

5. Interest on underpayments that are reduced by foreign

tax credit carrybacks (sec. 1055)

6. Determination of period of limitations relating to

foreign tax credits (sec. 1056)

7. Repeal special exception to foreign tax credit

limitation for alternative minimum tax purposes (sec.

1057)

G. Partnership Provisions

1. Allocation of basis of properties distributed to a

partner by a partnership (sec. 1061)

2. Treatment of inventory items of a partnership (sec.

1062)

3. Treatment of appreciated property contributed to a

partnership (sec. 1063)

H. Pension and Employee Benefit Provisions

1. Cashout of certain accrued benefits (sec. 1071)

2. Election to receive taxable cash compensation in lieu of

nontaxable parking benefits (sec. 1072)

3. Repeal of excess distribution and excess retirement

accumulation taxes (sec. 1073)

4. Tax on prohibited transactions (sec. 1074)

5. Basis recovery rules (sec. 1075)

I. Other Revenue-Increase Provisions

1. Phase out suspense accounts for certain large farm

corporations (sec. 1081)

2. Modify net operating loss carryback and carryforward

rules (sec. 1082)

3. Modify general business credit carryback and

carryforward rules (sec. 1083)

4. Expand the limitations on deductibility of interest and

premiums with respect to life insurance, endowment, and

annuity contracts (sec. 1084)

5. Earned income credit compliance provisions (secs.

1085(a), (b) and (d))

a. Deny EIC eligibility for prior acts of recklessness

or fraud (sec. 1085(a)(1))

b. Recertification required when taxpayer found to be

ineligible for EIC in past (sec. 1085(a)(1))

c. Due diligence requirements for paid preparers (sec.

1085(a)(2))

d. Modify the definition of AGI used to phase out the

EIC (secs. 1085(b) and (d))

6. Treatment of amounts received under the work

requirements of the Personal Responsibility and Work

Opportunity Act of 1996 (sec. 1085(c))

7. Eligibility for income forecast method (sec. 1086)

8. Modify the exception to the related-party rule of

section 1033 for individuals to only provide an

exception for de minimis amounts (sec. 1087)

9. Repeal of exception for certain sales by manufacturers

to dealers (sec. 1088)

10. Treatment of charitable remainder trusts (sec. 1089)

11. Expanded SSA records for tax enforcement (secs.

1090(a)(1) and 1090(b))

12. Using Federal case registry of child support orders for

tax enforcement purposes (secs. 1090(a)(2) and

1090(a)(3))

13. Modification of estimated tax safe harbors (sec. 1091)

TITLE XI. FOREIGN TAX PROVISIONS

A. General Provisions

1. Simplify foreign tax credit limitation for individuals

(sec. 1101)

2. Simplify translation of foreign taxes (sec. 1102)

3. Election to use simplified foreign tax credit limitation

for alternative minimum tax purposes (sec. 1103)

4. Simplify treatment of personal transactions in foreign

currency (sec. 1104)

5. Simplify foreign tax credit limitation for dividends

from 10/50 companies (sec. 1105)

B. General Provisions Affecting Treatment of Controlled Foreign

Corporations (secs 1111-1113)

C. Modification of Passive Foreign Investment Company

Provisions to Eliminate Overlap With Subpart F, to allow

Mark-to-Market Election, and to Require Measurement Based on

Value for PFIC Asset Test (secs. 1121-1124)

D. Simplify Formation and Operation of International Joint

Ventures (secs. 1131, 1141-1145, and 1151)

E. Modification of Reporting Threshold for Stock

Ownership of a Foreign Corporation (sec. 1146)

F. Other Foreign Simplification Provisions

1. Transition rules for certain trusts (sec. 1161)

2. Simplify stock and securities trading safe harbor (sec.

1162)

3. Clarification of determination of foreign taxes deemed

paid (sec. 1163(a))

4. Clarification of foreign tax credit limitation for

financial services income (sec. 1163(b))

G. Other Foreign Provisions

1. Eligibility of licenses of computer software for foreign

sales corporation benefits (sec. 1171)

2. Increase dollar limitation on section 911 exclusion

(sec. 1172)

3. Treatment of certain securities positions under the

subpart F investment in U.S. property rules (sec. 1173)

4. Treat service income of nonresident alien individuals

earned on foreign ships as foreign source income and

disregard the U.S. presence of such individuals (sec.

1174)

5. Exceptions under subpart F for active financing income

(sec. 1175)

TITLE XII. SIMPLIFICATION PROVISIONS RELATING TO INDIVIDUALS AND

BUSINESSES

A. Provisions Relating to Individuals

1. Modifications to standard deduction of dependents, AMT

treatment of certain minor children (sec. 1201)

2. Increase de minimis threshold for estimated tax to

$1,000 for individuals (sec. 1202)

3. Treatment of certain reimbursed expenses of rural letter

carrier's vehicles (sec. 1203)

4. Travel expenses of Federal employees participating in a

Federal criminal investigation (sec. 1204)

5. Payment of taxes by commercially acceptable means (sec.

1205)

B. Provisions Relating to Businesses Generally

1. Modifications to look-back method for long-term

contracts (sec. 1211)

2. Minimum tax treatment of certain property and casualty

insurance companies (sec. 1212)

3. Treatment of construction allowances provided to

lessees (sec. 1213)

C. Partnership Simplification Provisions

1. General provisions

a. Simplified flow-through for electing large

partnerships (sec. 1221)

b. Simplified audit procedures for electing large

partnerships (sec. 1222)

c. Due date for furnishing information to partners of

electing large partnerships (sec. 1223)

d. Partnership returns required on magnetic media

(sec. 1224)

e. Treatment of partnership items of individual

retirement arrangements (sec. 1225)

2. Other partnership audit rules

a. Treatment of partnership items in deficiency

proceedings (sec. 1231)

b. Partnership return to be determinative of audit

procedures to be followed (sec. 1232)

c. Provisions relating to statute of limitations (sec.

1233)

d. Expansion of small partnership exception (sec.

1234)

e. Exclusion of partial settlements from 1-year

limitation on assessment (sec. 1235)

f. Extension of time for filing a request for

administrative adjustment (sec. 1236)

g. Availability of innocent spouse relief in context

of partnership proceedings (sec. 1237)

h. Determination of penalties at partnership level

(sec. 1238)

i. Provisions relating to Tax Court jurisdiction (sec.

1239)

j. Treatment of premature petitions filed by notice

partners or 5-percent groups (sec. 1240)

k. Bonds in case of appeals from certain proceedings

(sec. 1241)

l. Suspension of interest where delay in computational

adjustment resulting from certain settlements (sec.

1242)

m. Special rules for administrative adjustment

requests with respect to bad debts or worthless

securities (sec. 1243)

3. Closing of partnership taxable year with respect to

deceased partner (sec. 1246)

D. Modifications of Rules for Real Estate Investment Trusts

(secs. 1251-1263)

E. Repeal the "Short-Short" Test for Regulated Investment

Companies (sec. 1271)

F. Taxpayer Protections

1. Provide reasonable cause exception for additional

penalties (sec. 1281)

2. Clarification of period for filing claims for refunds

(sec. 1282)

3. Repeal of authority to disclose whether a prospective

juror has been audited (sec. 1283)

4. Clarify statute of limitations for items from pass-

through entities (sec. 1284)

5. Awarding of administrative costs and attorneys fees

(sec. 1285)

TITLE XIII. ESTATE, GIFT, AND TRUST SIMPLIFICATION PROVISIONS

1. Eliminate gift tax filing requirements for gifts to charities

(sec. 1301)

2. Clarification of waiver of certain rights of recovery (sec.

1302)

3. Transitional rule under section 2056A (sec. 1303)

4. Treatment for estate tax purposes of short-term obligations

held by nonresident aliens (sec. 1304)

5. Certain revocable trusts as part of estate (sec. 1305)

6. Distributions during first 65 days of taxable year of estate

(sec. 1306)

7. Separate share rules available to estate (sec. 1307)

8. Executor of estate and beneficiaries treated as related

persons for disallowance of losses (sec. 1308)

9. Simplified taxation of earnings of pre-need funeral trusts

(sec. 1309)

10. Adjustments for gifts within 3 years of decent's death (sec.

1310)

11. Clarify relationship between community property rights and

retirement benefits (sec. 1311)

12. Treatment under qualified domestic trust rules of forms of

ownership which are not trusts (sec. 1312)

13. Opportunity to correct certain failures under section 2032A

(sec. 1313)

14. Authority to waive requirement of U.S. trustee for qualified

domestic trusts (sec. 1314)

TITLE XIV. EXCISE TAX AND OTHER SIMPLIFICATION PROVISIONS

A. Excise Tax Simplification Provisions

1. Increase de minimis limit for after-market alternations

subject to heavy truck and luxury automobile excise

taxes (sec. 1401)

2. Modify treatment of tires under the heavy highway

vehicle retail excise tax (sec. 1402)

3. Simplification of excise taxes on distilled spirits,

wines, and beer (sec. 1411-1422)

4. Authority for Internal Revenue Service to grant

exemptions from excise tax registration requirements

(sec. 1431)

5. Repeal of expired excise tax provisions (sec. 1432)

6. Modifications to the excise tax on certain arrows (sec.

1433)

7. Modifications to heavy highway vehicle retail excise tax

(sec. 1434)

8. Treatment of skydiving flights as non-commercial

aviation (sec. 1435)

9. Eliminate double taxation of certain aviation fuels sold

to producers by "fixed base operators" (sec. 1436)

B. Tax-Exempt Bond Provisions

1. Repeal of $100,000 limitation on unspent proceeds under

1-year exception from rebate (sec. 1441)

2. Exception from rebate for earnings on bona fide debt

service fund under construction bond rules (sec. 1442)

3. Repeal of debt service-based limitation on investment in

certain nonpurpose investments (sec. 1443)

4. Repeal of expired provisions relating to student loan

bonds (sec. 1444)

C. Tax Court Procedures

1. Overpayment determinations of Tax Court (sec. 1451)

2. Redetermination of interest pursuant to motion (sec.

1452)

3. Application of net worth requirement for awards of

litigation costs (sec. 1453)

4. Tax Court jurisdiction for determination of employment

status (sec. 1454)

D. Other Provisions

1. Due date for first quarter estimated tax payments by

private foundations (sec. 1461)

2. Withholding of Commonwealth income taxes from wages of

Federal employees (sec. 1462)

3. Certain notices disregarded under provision increasing

interest rate on large corporate underpayments (sec.

1463)

TITLE XV. PENSION AND EMPLOYEE BENEFIT PROVISIONS

A. Pension Simplification Provisions

1. Matching contributions of self-employed individuals not

treated as elective deferrals (sec. 1501)

2. Modifications of prohibition on assignment or alienation

(sec. 1502)

3. Elimination of paperwork burdens on plans (sec. 1503)

4. Modification of section 403(b) exclusion allowance to

conform to section 415 modifications (sec. 1504)

5. Permanent moratorium on application of nondiscrimination

rules to State and local governmental plans (sec. 1505)

6. Clarification of certain rules relating to ESOPs of S

corporations (sec. 1506)

7. Modification of 10-percent tax on nondeductible

contributions (sec. 1507)

8. Modify funding requirements for certain plans (sec.

1508)

9. Plans not disqualified merely by accepting rollover

contributions (sec. 1509)

10. New technologies in retirement plans (sec. 1510)

B. Miscellaneous Provisions Relating to Pensions and Other

Benefits

1. Increase in full funding limit (sec. 1521)

2. Contributions on behalf of a minister to a church plan

(sec. 1522(a)(2))

3. Exclusion of ministers from discrimination testing of

certain non-church retirement plans (sec. 1522(a)(1))

4. Repeal application of UBIT to ESOPs of S corporations

(sec. 1523)

5. Diversification in section 401(i) plan investments (sec.

1524)

6. Cash or deferred arrangements for irrigation and

drainage entities (sec. 1525)

7. Portability of permissive service credit under

governmental pension plans (sec. 1526)

8. Removal of dollar limitation on benefits payments from a

defined benefit plan for police and fire employees (sec.

1527)

9. Survivor benefits of public safety officers killed in

the line of duty (sec. 1528)

10. Treatment of certain disability payments to public

safety employees (sec. 1529)

11. Gratuitous transfers for the benefits of employees (sec.

1530)

C. Certain Health Act Provisions

1. Newborns' and mothers' health protection; mental health

parity (sec. 1531)

2. Church plan exception to prohibition on discrimination

against individuals based on health status (sec. 1532)

D. Date for Adoption of Plan Amendments (sec. 1541)

TITLE XVI. TECHNICAL CORRECTIONS PROVISIONS

TECHNICAL CORRECTIONS TO THE SMALL BUSINESS JOB PROTECTION ACT

OF 1996

A. Small Business-Related Provisions

1. Returns relating to purchases of fish (sec. 1601(a)(1))

2. Charitable remainder trusts not eligible to be electing

small business trusts (sec. 1601(c)(1))

3. Clarify the effective date for post-termination

transition period provision (sec. 1601(c)(2))

4. Treatment of qualified subchapter S subsidiaries (sec.

1601(c)(3))

B. Pension Provisions

1. Salary reduction simplified employee pensions

("SARSEPS") (sec. 1601(d)(1)(B))

2. SIMPLE retirement plans (secs. 1601(d)(1)(A) and

(d)(1)(C)-(F))

a. Reporting requirements for SIMPLE IRAs

(1601(d)(1)(A))

b. Notification requirement for SIMPLE IRAs

(sec. 1601(d)(1)(C))

c. Maximum dollar limitation for SIMPLE IRAs (sec.

1601(d)(1)(D))

d. Application of exclusive plan requirement for

SIMPLE IRAs to noncollectively bargained employees

(sec. 1601(d)(1)(E))

e. Application of exclusive plan requirement for

SIMPLE IRAs in the case of mergers and acquisitions

(sec. 1601(d)(1)(F))

f. Top-heavy exemption for SIMPLE 401(k) arrangements

(sec. 1601(d)(2)(A))

g. Cost of living adjustments for SIMPLE 401(k)

arrangements (sec. 1601(d)(2)(B))

h. Employer deduction for SIMPLE 401(k) arrangements

(sec. 1601(d)(2)(C))

i. Notification and election periods for SIMPLE 401(k)

arrangements (sec. 1601(d)(2)(D))

j. Treatment of Indian tribal governments under

section 403(b) (sec. 1601(d)(4))

k. Special rules for chaplains and self-employed

ministers (sec. 1601(d)(6))

C. Foreign Provisions

1. Measurement of earnings of controlled foreign

corporations (sec. 1601(e))

2. Transfers to foreign trusts at fair market value (sec.

1601(i)(2))

3. Treatment of trust as U.S. person (sec. 1601(i)(3))

D. Other Provisions

1. Phaseout and expiration of excise tax on luxury

automobiles (sec. 1601(f)(3))

2. Treatment of certain reserves of thrift institutions

(sec. 1601(f)(5))

3. "FASIT" technical corrections (sec. 1601(f)(6))

4. Qualified State tuition programs (sec. 1601(h)(1))

5. Adoption credit (sec. 1601(h)(2))

6. Phaseout of adoption assistance exclusion (sec.

1601(h)(2))

TECHNICAL CORRECTIONS TO THE HEALTH INSURANCE PORTABILITY AND

ACCOUNTABILITY ACT OF 1996

A. Medical Savings Accounts (sec. 1602(a))

1. Additional tax on distributions not used for medical

programs

2. Definition of permitted coverage

3. Taxation of distributions

4. Penalty for failure to provide required reports

B. Definition of Chronically Ill Individual Under a Qualified

Long-Term Care Insurance Contract (sec. 1602(b))

C. Deduction for Long-Term Care Insurance of Self-Employed

Individuals (sec. 1602(c))

D. Applicability of Reporting Requirements of Long-Term Care

Contracts and Accelerated Death Benefits (sec. 1602(d))

E. Consumer Protection Provisions for Long-Term Care Insurance

Contracts (sec. 1602(e))

F. Insurable Interests Under the COLI Provision (sec.

1602(f)(1))

G. Applicable Period For Purposes of Applying the Interest Rate

For a Variable Rate Contract Under the COLI Rules (sec.

1602(f)(2))

H. Definition of 20-Percent Owner for Purposes of Key Persons

Exception Under COLI Rules (sec. 1602(f)(3))

I. Effective Date of Interest Rate Cap on Key Persons and Pre-

1986 Contracts Under the COLI Rule (sec. 1602(f)(4))

J. Clarification of Contract Lapses Under Effective Date

Provisions of the COLI Rule (sec. 1602(f)(5))

K. Requirement of Gain Recognition on Certain Exchanges

(sec. 1602(g)(1))

L. Suspension of 10-year Period in Case of Substantial

Diminution of Risk of Loss (sec. 1602(g)(3))

M. Treatment of Property Contributed to Certain Foreign

Corporations (sec. 1602(g)(4))

N. Credit For Foreign Estate Tax (sec. 1602(g)(6))

TECHNICAL CORRECTIONS TO THE TAXPAYER BILL OF RIGHTS 2

A. Reasonable Caused Abatement for First-Tier Intermediate

Sanctions Excise Tax (sec. 1603(a))

B. Reporting by Public Charities With Respect to Intermediate

Sanctions and Certain Other Excise Tax Penalties (sec.

1603(b))

TECHNICAL CORRECTIONS TO OTHER ACTS

A. Correction of GATT Interest and Mortality Rate Provisions in

the Retirement Protection Act (sec. 1604(b)(3))

B. Clarify Definition of Indian Reservation Under

Section 168(j)(6) (sec. 1604(c))

C. Treatment of "Cost-Plus" Contracts Under Section 833 (sec.

1604(d))

D. Related Parties Determined By Reference to Section 267 (sec.

1604(d))

TITLE XVII. LIMITED TAX BENEFITS SUBJECT TO THE LINE ITEM VETO ACT

(SEC. 1701)

Part Three: Revenue Provisions of the Balanced Budget Act of 1997

(H.R. 2015)

A. Taxation of Medicare + Choice Medical Savings Accounts (sec.

4006)

B. Tax Treatment of Hospitals which Participate in Provider-