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AMENDMENTS SUBMITTED
(Senate - July 13, 2000)

Text of this article available as: TXT PDF [Pages S6692-S6761] AMENDMENTS SUBMITTED ______ DEATH TAX ELIMINATION ACT ______ MOYNIHAN AMENDMENT NO. 3821 Mr. MOYNIHAN proposed an amendment to the bill (H.R. 8) to amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. SEC. 2. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 3. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 4. SENSE OF SENATE REGARDING SAVINGS. It is the sense of the Senate that the reduced cost to the Federal Treasury resulting from the amendments made by this Act as compared to the cost to the Federal Treasury of H.R. 8 as received by the Senate from the House of Representatives on June 12, 2000, should be used exclusively to reduce the Federal debt held by the public. Amend the title so as to read: ``An Act to amend the Internal Revenue Code of 1986 to increase the unified credit exemption and the qualified family-owned business interest deduction, and for other purposes.'' ______ SCHUMER (AND OTHERS) AMENDMENT NO. 3822 Mr. SCHUMER (for himself, Mr. Biden, Mr. Bayh, Ms. Landrieu, Mr. Durbin, and Mr. Robb) proposed an amendment to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus [[Page S6693]] ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--MAKE COLLEGE AFFORDABLE SEC. 201. DEDUCTION FOR HIGHER EDUCATION EXPENSES. (a) Deduction Allowed.--Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following: ``SEC. 222. HIGHER EDUCATION EXPENSES. ``(a) Allowance of Deduction.-- ``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year. ``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows: Applicable ``Taxable year: dollar amount: 2002......................................................$4,000 .... 2003......................................................$8,000 .... 2004 and thereafter......................................$12,000..... ``(b) Limitation Based on Modified Adjusted Gross Income.-- ``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2). ``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as-- ``(A) the excess of-- ``(i) the taxpayer's modified adjusted gross income for such taxable year, over ``(ii) $62,450 ($104,050 in the case of a joint return, $89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to ``(B) $15,000. ``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined-- ``(A) without regard to this section and sections 911, 931, and 933, and ``(B) after the application of sections 86, 135, 219, 220, and 469. For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section. ``(c) Qualified Higher Education Expenses.--For purposes of this section-- ``(1) Qualified higher education expenses.-- ``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of-- ``(i) the taxpayer, ``(ii) the taxpayer's spouse, ``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or ``(iv) any grandchild of the taxpayer, as an eligible student at an institution of higher education. ``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses-- ``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and ``(ii) are not attributable to any graduate program of such individual. ``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction. ``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who-- ``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and ``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education. ``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year. ``(2) Institution of higher education.--The term `institution of higher education' means an institution which-- ``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and ``(B) is eligible to participate in programs under title IV of such Act. ``(d) Special Rules.-- ``(1) No double benefit.-- ``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision. ``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year. ``(C) Dependents.--No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. ``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year. ``(2) Limitation on taxable year of deduction.-- ``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year. ``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year. ``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as-- ``(A) a qualified scholarship which under section 117 is not includable in gross income, ``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or ``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States. ``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. ``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.'' (b) Deduction Allowed in Computing Adjusted Gross Income.-- Section 62(a) is amended by inserting after paragraph (17) the following: ``(18) Higher education expenses.--The deduction allowed by section 222.'' (c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following: ``Sec. 222. Higher education expenses. ``Sec. 223. Cross reference.'' (d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001. SEC. 202. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS. (a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 25A the following new section: ``SEC. 25B. INTEREST ON HIGHER EDUCATION LOANS. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan. ``(b) Maximum Credit.-- ``(1) In general.--Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500. ``(2) Limitation based on modified adjusted gross income.-- ``(A) In general.--If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($80,000 in the case of a joint return), the amount which would (but [[Page S6694]] for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000. ``(B) Modified adjusted gross income.--The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933. ``(C) Inflation adjustment.--In the case of any taxable year beginning after 2003, the $50,000 and $80,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2002' for `1992'. ``(D) Rounding.--If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. ``(c) Dependents Not Eligible for Credit.--No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins. ``(d) Limit on Period Credit Allowed.--A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan. ``(e) Definitions.--For purposes of this section-- ``(1) Qualified education loan.--The term `qualified education loan' has the meaning given such term by section 221(e)(1). ``(2) Dependent.--The term `dependent' has the meaning given such term by section 152. ``(f) Special Rules.-- ``(1) Denial of double benefit.--No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter. ``(2) Married couples must file joint return.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(3) Marital status.--Marital status shall be determined in accordance with section 7703.'' (b) Conforming Amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25A the following new item: ``Sec. 25B. Interest on higher education loans.'' (c) Effective Date.--The amendments made by this section shall apply to any qualified education loan (as defined in section 25B(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2001. TITLE III--ADVANCED TEACHER CERTIFICATION INCENTIVES SEC. 301. CERTIFIED TEACHER CREDIT. (a) Findings.--Congress makes the following findings: (1) Studies have shown that the greatest single in-school factor affecting student achievement is teacher quality. (2) Most accomplished teachers do not get the rewards they deserve. (3) After adjusting amounts for inflation, the average teacher salary for 1997-1998 of $39,347 is just $2 above what it was in 1993. Such salary is also just $1,924 more than the average salary recorded in 1972, a real increase of only $75 per year. (4) While K-12 enrollments are steadily increasing, the teacher population is aging. There is a need, now more than ever, to attract competent, capable, and bright college graduates or mid-career professionals to the teaching profession. (5) The Department of Education projects that 2,000,000 new teachers will have to be hired in the next decade. Shortages, if they occur, will most likely be felt in urban or rural regions of the country where working conditions may be difficult or compensation low. (6) If students are to receive a high quality education and remain competitive in the global market the United States must attract talented and motivated people to the teaching profession in large numbers. (b) Allowance of Credit.--Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. CERTIFIED TEACHER CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--In the case of an eligible teacher, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year $5,000. ``(2) Year credit allowed.--The credit under paragraph (1) shall be allowed in the taxable year in which the taxpayer becomes a certified individual. ``(b) Definitions.--For purposes of this section-- ``(1) Eligible teacher.-- ``(A) In general.--The term `eligible teacher' means a certified individual who is a pre-kindergarten or early childhood educator, or a kindergarten through grade 12 classroom teacher, instructor, counselor, aide, or principal in an elementary or secondary school on a full-time basis for an academic year ending during a taxable year. ``(B) Certified individual.--The term `certified individual' means an individual who has successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards. ``(2) Elementary or secondary school.--The term `elementary or secondary school' means a public elementary or secondary school which-- ``(A) is located in a school district of a local educational agency which is eligible, during the taxable year, for assistance under part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.), and ``(B) during the taxable year, the Secretary of Education determines to have an enrollment of children counted under section 1124(c) of such Act (20 U.S.C. 6333(c)) in an amount in excess of an amount equal to 40 percent of the total enrollment of such school. ``(c) Verification.--The credit allowed under subsection (a) shall be allowed with respect to any certified individual only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (c) Exclusion From Income For Certain Amounts.--Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 140 and inserting after section 138 the following new section: ``SEC. 139. CERTAIN AMOUNTS RECEIVED BY CERTIFIED TEACHERS. ``(a) In General.--In the case of a certified teacher, gross income shall not include the value of anything received during the taxable year solely by reason of such teacher having successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards (such as an incentive payment). ``(b) Certified Teacher.--For purposes of this section, the term `certified teacher' has the meaning given the term `eligible teacher' under section 35(b)(1). ``(c) Verification.--The exclusion under subsection (a) shall be allowed with respect to any certified teacher only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Amounts Must be Reasonable.--Amounts excluded under subsection (a) shall include only amounts which are reasonable.''. (d) Conforming Amendments.-- (1) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following: ``Sec. 35. Certified teacher credit. ``Sec. 36. Overpayments of tax.'' (3) The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Certain amounts received by certified teachers. ``Sec. 140. Cross references to other Acts.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. HATCH (AND OTHERS) AMENDMENT NO. 3823 Mr. HATCH (for himself, Mr. Robb, and Mr. Kennedy) proposed an amendment to the bill, H.R. 8, supra; as follows: At the end, add the following: TITLE VI--PERMANENT EXTENSION OF RESEARCH CREDIT SEC. 601. PERMANENT EXTENSION OF RESEARCH CREDIT. (a) In General.--Section 41 (relating to credit for increasing research activities) is amended by striking subsection (h). (b) Conforming Amendment.--Paragraph (1) of section 45C(b) is amended by striking subparagraph (D). ______ GRAHAM (AND OTHERS) AMENDMENT NO. 3824 (Ordered to lie on the table.) Mr. GRAHAM (for himself, Mr. Kennedy, Mr. Robb, Mr. Bryan, Mrs. Lincoln, Mr. Rockefeller, Mr. Daschle, Mr. Wellstone, Mr. Kerry, and Mr. Dorgan) submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: SECTION 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. [[Page S6695]] (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005......................$1,375,000 2006 and 2007.........................................$1,625,000 2008..................................................$2,375,000 2009 or thereafter..................................$3,375,000.'' ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM SEC. 201. ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM. (a) Findings.--The Senate makes the following findings: (1) Beneficiaries under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) are the only group of insured Americans without prescription drug coverage. (2) At any point in time, approximately 13,000,000 medicare beneficiaries are without prescription drug coverage. (3) Over the course of a year, nearly 20,000,000 medicare beneficiaries are without prescription drug coverage for all or part of the year. (4) The options available to medicare beneficiaries for obtaining prescription drug coverage are declining since-- (A) the number of employers providing employer-sponsored retiree coverage is declining at a dramatic rate; (B) Medicare+Choice plans that might otherwise provide prescription drug coverage are pulling out of counties throughout the Nation; and (C) medicare supplemental policies (medigap policies) that offer prescription drug coverage are so prohibitively expensive that only 8 percent of medicare beneficiaries have the means to purchase such policies. (5) An elderly individual without prescription drug coverage living on $12,525 a year (150 percent of the Federal poverty line), who has diabetes, hypertension, and high cholesterol, pays more than 18.3 percent of their total income on the prescription drugs most commonly prescribed to treat their medical conditions. (6) Medicare beneficiaries should never have to make the choice between having a roof over their head, having food in their mouth, or having necessary prescription drugs. (7) Congress must provide medicare beneficiaries with a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (8) Meaningful prescription drug coverage includes stop- loss protection above $4,000 of out-of-pocket expenses for prescription drugs. (9) In March 2000, the Congressional Budget Office estimated the on-budget surplus for the 5-year period of fiscal year 2001 through fiscal year 2005 to be $148,000,000,000, assuming that discretionary spending was allowed to increase with inflation. (10) Relying on the March 2000 estimate of the Congressional Budget Office, on April 12, 2000, Congress passed the concurrent resolution on the budget for fiscal year 2001 which allocated $40,000,000,000 of the estimated on-budget surplus for the 5-year period described in paragraph (9) to provide a prescription drug benefit for medicare beneficiaries. (11) Forty billion dollars over 5 years cannot ensure access to a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (12) Congress should not be bound to an arbitrarily low and inadequate allocation for providing a medicare prescription drug benefit when the estimated on-budget surplus for the 5- year period described in paragraph (9) has increased dramatically since March 2000. (13) The Office of Management and Budget recently has revised its estimates for the on-budget surplus for the 5- year period described in paragraph (9) and now estimates that the on-budget surplus will be $360,000,000,000 for such period. (14) The Congressional Budget Office will issue its revised budget estimates in the next few days and those estimates are widely expected to reflect a significant increase in the on- budget surplus for the 5-year period described in paragraph (9) as compared to the on-budget surplus that was estimated for such period in March 2000. (b) 2001 Budget Resolution Amendment.--Section 213(b) of H. Con. Res. 290 (106th Congress) is amended to read as follows: ``(b) Adjustments.--The chairman of the Committee on the Budget of the House or Senate, as applicable-- ``(1) shall revise committee allocations and other appropriate budgetary levels and limits to accommodate legislation described in section 215(a) which improves access to prescription drugs for Medicare beneficiaries in an additional amount not to exceed $40,000,000,000 or the difference between the on-budget surpluses in the reports referred to in subsection (a), whichever is less; and ``(2) may, after the adjustment in paragraph (1), make the following adjustments in an amount not to exceed the difference between the on-budget surpluses in the reports referred to in subsection (a) minus the adjustment made pursuant to paragraph (1): ``(A) Reduce the on-budget revenue aggregate by that amount for such fiscal year. ``(B) Adjust the instruction in section 103 or 104 to-- ``(i) increase the reduction in revenues by that amount for fiscal year 2001; ``(ii) increase the reduction in revenues by the sum of the amounts for the period of fiscal years 2001 through 2005; and ``(iii) in the House only, increase the amount of debt reduction by that amount for fiscal year 2001. ``(C) Adjust such other levels in this resolution, as appropriate and the Senate pay-as-you-go scorecard.''. Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' [[Page S6696]] (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--HEALTH PROVISIONS SEC. 201. LONG-TERM CARE TAX CREDIT. (a) Allowance of Credit.-- (1) In general.--Section 24(a) (relating to allowance of child tax credit) is amended to read as follows: ``(a) Allowance of Credit.-- ``(1) In general.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of-- ``(A) $500 multiplied by the number of qualifying children of the taxpayer, plus ``(B) the applicable dollar amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year. ``(2) Applicable dollar amount.--For purposes of paragraph (1)(B), the applicable dollar amount for taxable years beginning in any calendar year shall be determined in accordance with the following table: Applicable ``Calendar year: Dollar amount: 2001......................................................$1,000 .... 2002......................................................$1,500 .... 2003......................................................$2,000 .... 2004......................................................$2,500 .... 2005 and thereafter.....................................$3,000.''.... (2) Additional credit for taxpayer with 3 or more separate credit amounts.--So much of section 24(d) as precedes paragraph (1)(A) thereof is amended to read as follows: ``(d) Additional Credit for Taxpayers With 3 or More Separate Credit Amounts.-- ``(1) In general.--If the sum of the number of qualifying children of the taxpayer and the number of applicable individuals with respect to which the taxpayer is an eligible caregiver is 3 or more for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of--''. (3) Conforming amendments.-- (A) The heading for section 32(n) is amended by striking ``Child'' and inserting ``Family Care''. (B) The heading for section 24 is amended to read as follows: ``SEC. 24. FAMILY CARE CREDIT.'' (C) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 24 and inserting the following new item: ``Sec. 24. Family care credit.'' (b) Definitions.--Section 24(c) (defining qualifying child) is amended to read as follows: ``(c) Definitions.--For purposes of this section-- ``(1) Qualifying child.-- ``(A) In general.--The term `qualifying child' means any individual if-- ``(i) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, ``(ii) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and ``(iii) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B). ``(B) Exception for certain noncitizens.--The term `qualifying child' shall not include any individual who would not be a dependent if the first sentence of section 152(b)(3) were applied without regard to all that follows `resident of the United States'. ``(2) Applicable individual.-- ``(A) In general.--The term `applicable individual' means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period-- ``(i) which is at least 180 consecutive days, and ``(ii) a portion of which occurs within the taxable year. Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39\1/2\ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements. ``(B) Individuals with long-term care needs.--An individual is described in this subparagraph if the individual meets any of the following requirements: ``(i) The individual is at least 6 years of age and-- ``(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or ``(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities. ``(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility. ``(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent. ``(3) Eligible caregiver.-- ``(A) In general.--A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals: ``(i) The taxpayer. ``(ii) The taxpayer's spouse. ``(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year. ``(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c)(1)(A) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied. ``(v) An individual who would be described in clause (iii) for the taxable year if-- ``(I) the requirements of clause (iv) are met with respect to the individual, and ``(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test of section 152(a). ``(B) Residency test.--The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and-- ``(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, is a member of the taxpayer's household for over half the taxable year, or ``(ii) in the case of any other individual, is a member of the taxpayer's household for the entire taxable year. ``(C) Special rules where more than 1 eligible caregiver.-- ``(i) In general.--If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section. ``(ii) No agreement.--If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver. ``(iii) Married individuals filing separately.--In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).'' (c) Identification Requirements.-- [[Page S6697]] (1) In general.--Section 24(e) is amended by adding at the end the following new sentence: ``No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.'' (2) Assessment.--Section 6213(g)(2)(I) of such Code is amended-- (A) by inserting ``or physician identification'' after ``correct TIN'', and (B) by striking ``child'' and inserting ``family care''. (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. FULL DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF- EMPLOYED INDIVIDUALS. (a) In General.--Section 162(l)(1) (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows: ``(1) Allowance of deduction.--In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents.''. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2000. ______ WELLSTONE (AND OTHERS) AMENDMENT NO. 3826 (Ordered to lie on the table.) Mr. WELLSTONE (for himself, Mr. Dodd, Mr. Landrieu, and Mr. Kohl), submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--DEPENDENT CARE TAX CREDIT SEC. 201. EXPANSION OF DEPENDENT CARE TAX CREDIT. (a) In General.--Paragraph (2) of section 21(a) (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows: ``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means 50 percent (40 percent for taxable years beginning after December 31, 2002, and before January 1, 2005) reduced (but not below 20 percent) by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $30,000.'' (b) Minimum Credit Allowed for Stay-At-Home Parents.-- Section 21(e) (relating to special rules) is amended by adding at the end the following: ``(11) Minimum credit allowed for stay-at-home parents.-- Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to not more than 2 of such qualifying individuals in an amount equal to the greater of-- ``(A) the amount of employment-related expenses incurred for such qualifying individuals for the taxable year (determined under this section without regard to this paragraph), or ``(B) $41.67 for each month in such taxable year during which each such qualifying individual is under the age of 1.''. (c) Inflation Adjustment of Dollar Amounts.-- (1) Section 21 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: ``(f) Inflation Adjustment.--In the case of any taxable year beginning in a calendar year after 2001, the $30,000 amount contained in subsection (a), the $2,400 amount in subsection (c), and the $41.67 amount in subsection (e)(11) shall be increased by an amount equal to-- ``(1) such dollar amount, multiplied by ``(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2000' for `calendar year 1992' in subparagraph (B) thereof. If the increase determined under the preceding sentence is not a multiple of $50 ($5 in the case of the amount in subsection (e)(11)), such amount shall be rounded to the next lowest multiple thereof.'' (2) Paragraph (2) of section 21(c) is amended by striking ``$4,800'' and inserting ``twice the dollar amount applicable under paragraph (1)''. (3) Paragraph (2) of section 21(d) is amended by striking ``less than--'' and all that follows through the end of the first sentence and inserting ``less than \1/12\ of the amount which applies under subsection (c) to the taxpayer for the taxable year.'' (d) Credit Allowed Based on Residency in Certain Cases.-- Subsection (e) of section 21 is amended by adding at the end the following new paragraph: ``(12) Credit allowed based on residency in certain cases.--In the case of a taxpayer-- ``(A) who does not satisfy the household maintenance test of subsection (a) for any period, but ``(B) whose principal place of abode for such period is also the principal place of abode of any qualifying individual, then such taxpayer shall be treated as satisfying such test for such period but the amount of credit allowable under this section with respect to such individual shall be determined by allowing only \1/12\ of the limitation under subsection (c) for each full month that the requirement of subparagraph (B) is met.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. DEPENDENT CARE TAX CREDIT MADE REFUNDABLE. (a) In General.--Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended-- (1) by redesignating section 35 as section 36, and (2) by redesignating section 21 as section 35. (b) Advance Payment of Credit.--Chapter 25 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following: ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

Major Actions:

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AMENDMENTS SUBMITTED
(Senate - July 13, 2000)

Text of this article available as: TXT PDF [Pages S6692-S6761] AMENDMENTS SUBMITTED ______ DEATH TAX ELIMINATION ACT ______ MOYNIHAN AMENDMENT NO. 3821 Mr. MOYNIHAN proposed an amendment to the bill (H.R. 8) to amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. SEC. 2. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 3. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 4. SENSE OF SENATE REGARDING SAVINGS. It is the sense of the Senate that the reduced cost to the Federal Treasury resulting from the amendments made by this Act as compared to the cost to the Federal Treasury of H.R. 8 as received by the Senate from the House of Representatives on June 12, 2000, should be used exclusively to reduce the Federal debt held by the public. Amend the title so as to read: ``An Act to amend the Internal Revenue Code of 1986 to increase the unified credit exemption and the qualified family-owned business interest deduction, and for other purposes.'' ______ SCHUMER (AND OTHERS) AMENDMENT NO. 3822 Mr. SCHUMER (for himself, Mr. Biden, Mr. Bayh, Ms. Landrieu, Mr. Durbin, and Mr. Robb) proposed an amendment to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus [[Page S6693]] ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--MAKE COLLEGE AFFORDABLE SEC. 201. DEDUCTION FOR HIGHER EDUCATION EXPENSES. (a) Deduction Allowed.--Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following: ``SEC. 222. HIGHER EDUCATION EXPENSES. ``(a) Allowance of Deduction.-- ``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year. ``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows: Applicable ``Taxable year: dollar amount: 2002......................................................$4,000 .... 2003......................................................$8,000 .... 2004 and thereafter......................................$12,000..... ``(b) Limitation Based on Modified Adjusted Gross Income.-- ``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2). ``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as-- ``(A) the excess of-- ``(i) the taxpayer's modified adjusted gross income for such taxable year, over ``(ii) $62,450 ($104,050 in the case of a joint return, $89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to ``(B) $15,000. ``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined-- ``(A) without regard to this section and sections 911, 931, and 933, and ``(B) after the application of sections 86, 135, 219, 220, and 469. For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section. ``(c) Qualified Higher Education Expenses.--For purposes of this section-- ``(1) Qualified higher education expenses.-- ``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of-- ``(i) the taxpayer, ``(ii) the taxpayer's spouse, ``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or ``(iv) any grandchild of the taxpayer, as an eligible student at an institution of higher education. ``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses-- ``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and ``(ii) are not attributable to any graduate program of such individual. ``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction. ``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who-- ``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and ``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education. ``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year. ``(2) Institution of higher education.--The term `institution of higher education' means an institution which-- ``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and ``(B) is eligible to participate in programs under title IV of such Act. ``(d) Special Rules.-- ``(1) No double benefit.-- ``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision. ``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year. ``(C) Dependents.--No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. ``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year. ``(2) Limitation on taxable year of deduction.-- ``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year. ``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year. ``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as-- ``(A) a qualified scholarship which under section 117 is not includable in gross income, ``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or ``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States. ``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. ``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.'' (b) Deduction Allowed in Computing Adjusted Gross Income.-- Section 62(a) is amended by inserting after paragraph (17) the following: ``(18) Higher education expenses.--The deduction allowed by section 222.'' (c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following: ``Sec. 222. Higher education expenses. ``Sec. 223. Cross reference.'' (d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001. SEC. 202. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS. (a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 25A the following new section: ``SEC. 25B. INTEREST ON HIGHER EDUCATION LOANS. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan. ``(b) Maximum Credit.-- ``(1) In general.--Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500. ``(2) Limitation based on modified adjusted gross income.-- ``(A) In general.--If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($80,000 in the case of a joint return), the amount which would (but [[Page S6694]] for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000. ``(B) Modified adjusted gross income.--The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933. ``(C) Inflation adjustment.--In the case of any taxable year beginning after 2003, the $50,000 and $80,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2002' for `1992'. ``(D) Rounding.--If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. ``(c) Dependents Not Eligible for Credit.--No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins. ``(d) Limit on Period Credit Allowed.--A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan. ``(e) Definitions.--For purposes of this section-- ``(1) Qualified education loan.--The term `qualified education loan' has the meaning given such term by section 221(e)(1). ``(2) Dependent.--The term `dependent' has the meaning given such term by section 152. ``(f) Special Rules.-- ``(1) Denial of double benefit.--No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter. ``(2) Married couples must file joint return.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(3) Marital status.--Marital status shall be determined in accordance with section 7703.'' (b) Conforming Amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25A the following new item: ``Sec. 25B. Interest on higher education loans.'' (c) Effective Date.--The amendments made by this section shall apply to any qualified education loan (as defined in section 25B(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2001. TITLE III--ADVANCED TEACHER CERTIFICATION INCENTIVES SEC. 301. CERTIFIED TEACHER CREDIT. (a) Findings.--Congress makes the following findings: (1) Studies have shown that the greatest single in-school factor affecting student achievement is teacher quality. (2) Most accomplished teachers do not get the rewards they deserve. (3) After adjusting amounts for inflation, the average teacher salary for 1997-1998 of $39,347 is just $2 above what it was in 1993. Such salary is also just $1,924 more than the average salary recorded in 1972, a real increase of only $75 per year. (4) While K-12 enrollments are steadily increasing, the teacher population is aging. There is a need, now more than ever, to attract competent, capable, and bright college graduates or mid-career professionals to the teaching profession. (5) The Department of Education projects that 2,000,000 new teachers will have to be hired in the next decade. Shortages, if they occur, will most likely be felt in urban or rural regions of the country where working conditions may be difficult or compensation low. (6) If students are to receive a high quality education and remain competitive in the global market the United States must attract talented and motivated people to the teaching profession in large numbers. (b) Allowance of Credit.--Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. CERTIFIED TEACHER CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--In the case of an eligible teacher, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year $5,000. ``(2) Year credit allowed.--The credit under paragraph (1) shall be allowed in the taxable year in which the taxpayer becomes a certified individual. ``(b) Definitions.--For purposes of this section-- ``(1) Eligible teacher.-- ``(A) In general.--The term `eligible teacher' means a certified individual who is a pre-kindergarten or early childhood educator, or a kindergarten through grade 12 classroom teacher, instructor, counselor, aide, or principal in an elementary or secondary school on a full-time basis for an academic year ending during a taxable year. ``(B) Certified individual.--The term `certified individual' means an individual who has successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards. ``(2) Elementary or secondary school.--The term `elementary or secondary school' means a public elementary or secondary school which-- ``(A) is located in a school district of a local educational agency which is eligible, during the taxable year, for assistance under part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.), and ``(B) during the taxable year, the Secretary of Education determines to have an enrollment of children counted under section 1124(c) of such Act (20 U.S.C. 6333(c)) in an amount in excess of an amount equal to 40 percent of the total enrollment of such school. ``(c) Verification.--The credit allowed under subsection (a) shall be allowed with respect to any certified individual only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (c) Exclusion From Income For Certain Amounts.--Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 140 and inserting after section 138 the following new section: ``SEC. 139. CERTAIN AMOUNTS RECEIVED BY CERTIFIED TEACHERS. ``(a) In General.--In the case of a certified teacher, gross income shall not include the value of anything received during the taxable year solely by reason of such teacher having successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards (such as an incentive payment). ``(b) Certified Teacher.--For purposes of this section, the term `certified teacher' has the meaning given the term `eligible teacher' under section 35(b)(1). ``(c) Verification.--The exclusion under subsection (a) shall be allowed with respect to any certified teacher only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Amounts Must be Reasonable.--Amounts excluded under subsection (a) shall include only amounts which are reasonable.''. (d) Conforming Amendments.-- (1) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following: ``Sec. 35. Certified teacher credit. ``Sec. 36. Overpayments of tax.'' (3) The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Certain amounts received by certified teachers. ``Sec. 140. Cross references to other Acts.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. HATCH (AND OTHERS) AMENDMENT NO. 3823 Mr. HATCH (for himself, Mr. Robb, and Mr. Kennedy) proposed an amendment to the bill, H.R. 8, supra; as follows: At the end, add the following: TITLE VI--PERMANENT EXTENSION OF RESEARCH CREDIT SEC. 601. PERMANENT EXTENSION OF RESEARCH CREDIT. (a) In General.--Section 41 (relating to credit for increasing research activities) is amended by striking subsection (h). (b) Conforming Amendment.--Paragraph (1) of section 45C(b) is amended by striking subparagraph (D). ______ GRAHAM (AND OTHERS) AMENDMENT NO. 3824 (Ordered to lie on the table.) Mr. GRAHAM (for himself, Mr. Kennedy, Mr. Robb, Mr. Bryan, Mrs. Lincoln, Mr. Rockefeller, Mr. Daschle, Mr. Wellstone, Mr. Kerry, and Mr. Dorgan) submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: SECTION 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. [[Page S6695]] (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005......................$1,375,000 2006 and 2007.........................................$1,625,000 2008..................................................$2,375,000 2009 or thereafter..................................$3,375,000.'' ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM SEC. 201. ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM. (a) Findings.--The Senate makes the following findings: (1) Beneficiaries under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) are the only group of insured Americans without prescription drug coverage. (2) At any point in time, approximately 13,000,000 medicare beneficiaries are without prescription drug coverage. (3) Over the course of a year, nearly 20,000,000 medicare beneficiaries are without prescription drug coverage for all or part of the year. (4) The options available to medicare beneficiaries for obtaining prescription drug coverage are declining since-- (A) the number of employers providing employer-sponsored retiree coverage is declining at a dramatic rate; (B) Medicare+Choice plans that might otherwise provide prescription drug coverage are pulling out of counties throughout the Nation; and (C) medicare supplemental policies (medigap policies) that offer prescription drug coverage are so prohibitively expensive that only 8 percent of medicare beneficiaries have the means to purchase such policies. (5) An elderly individual without prescription drug coverage living on $12,525 a year (150 percent of the Federal poverty line), who has diabetes, hypertension, and high cholesterol, pays more than 18.3 percent of their total income on the prescription drugs most commonly prescribed to treat their medical conditions. (6) Medicare beneficiaries should never have to make the choice between having a roof over their head, having food in their mouth, or having necessary prescription drugs. (7) Congress must provide medicare beneficiaries with a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (8) Meaningful prescription drug coverage includes stop- loss protection above $4,000 of out-of-pocket expenses for prescription drugs. (9) In March 2000, the Congressional Budget Office estimated the on-budget surplus for the 5-year period of fiscal year 2001 through fiscal year 2005 to be $148,000,000,000, assuming that discretionary spending was allowed to increase with inflation. (10) Relying on the March 2000 estimate of the Congressional Budget Office, on April 12, 2000, Congress passed the concurrent resolution on the budget for fiscal year 2001 which allocated $40,000,000,000 of the estimated on-budget surplus for the 5-year period described in paragraph (9) to provide a prescription drug benefit for medicare beneficiaries. (11) Forty billion dollars over 5 years cannot ensure access to a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (12) Congress should not be bound to an arbitrarily low and inadequate allocation for providing a medicare prescription drug benefit when the estimated on-budget surplus for the 5- year period described in paragraph (9) has increased dramatically since March 2000. (13) The Office of Management and Budget recently has revised its estimates for the on-budget surplus for the 5- year period described in paragraph (9) and now estimates that the on-budget surplus will be $360,000,000,000 for such period. (14) The Congressional Budget Office will issue its revised budget estimates in the next few days and those estimates are widely expected to reflect a significant increase in the on- budget surplus for the 5-year period described in paragraph (9) as compared to the on-budget surplus that was estimated for such period in March 2000. (b) 2001 Budget Resolution Amendment.--Section 213(b) of H. Con. Res. 290 (106th Congress) is amended to read as follows: ``(b) Adjustments.--The chairman of the Committee on the Budget of the House or Senate, as applicable-- ``(1) shall revise committee allocations and other appropriate budgetary levels and limits to accommodate legislation described in section 215(a) which improves access to prescription drugs for Medicare beneficiaries in an additional amount not to exceed $40,000,000,000 or the difference between the on-budget surpluses in the reports referred to in subsection (a), whichever is less; and ``(2) may, after the adjustment in paragraph (1), make the following adjustments in an amount not to exceed the difference between the on-budget surpluses in the reports referred to in subsection (a) minus the adjustment made pursuant to paragraph (1): ``(A) Reduce the on-budget revenue aggregate by that amount for such fiscal year. ``(B) Adjust the instruction in section 103 or 104 to-- ``(i) increase the reduction in revenues by that amount for fiscal year 2001; ``(ii) increase the reduction in revenues by the sum of the amounts for the period of fiscal years 2001 through 2005; and ``(iii) in the House only, increase the amount of debt reduction by that amount for fiscal year 2001. ``(C) Adjust such other levels in this resolution, as appropriate and the Senate pay-as-you-go scorecard.''. Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' [[Page S6696]] (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--HEALTH PROVISIONS SEC. 201. LONG-TERM CARE TAX CREDIT. (a) Allowance of Credit.-- (1) In general.--Section 24(a) (relating to allowance of child tax credit) is amended to read as follows: ``(a) Allowance of Credit.-- ``(1) In general.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of-- ``(A) $500 multiplied by the number of qualifying children of the taxpayer, plus ``(B) the applicable dollar amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year. ``(2) Applicable dollar amount.--For purposes of paragraph (1)(B), the applicable dollar amount for taxable years beginning in any calendar year shall be determined in accordance with the following table: Applicable ``Calendar year: Dollar amount: 2001......................................................$1,000 .... 2002......................................................$1,500 .... 2003......................................................$2,000 .... 2004......................................................$2,500 .... 2005 and thereafter.....................................$3,000.''.... (2) Additional credit for taxpayer with 3 or more separate credit amounts.--So much of section 24(d) as precedes paragraph (1)(A) thereof is amended to read as follows: ``(d) Additional Credit for Taxpayers With 3 or More Separate Credit Amounts.-- ``(1) In general.--If the sum of the number of qualifying children of the taxpayer and the number of applicable individuals with respect to which the taxpayer is an eligible caregiver is 3 or more for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of--''. (3) Conforming amendments.-- (A) The heading for section 32(n) is amended by striking ``Child'' and inserting ``Family Care''. (B) The heading for section 24 is amended to read as follows: ``SEC. 24. FAMILY CARE CREDIT.'' (C) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 24 and inserting the following new item: ``Sec. 24. Family care credit.'' (b) Definitions.--Section 24(c) (defining qualifying child) is amended to read as follows: ``(c) Definitions.--For purposes of this section-- ``(1) Qualifying child.-- ``(A) In general.--The term `qualifying child' means any individual if-- ``(i) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, ``(ii) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and ``(iii) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B). ``(B) Exception for certain noncitizens.--The term `qualifying child' shall not include any individual who would not be a dependent if the first sentence of section 152(b)(3) were applied without regard to all that follows `resident of the United States'. ``(2) Applicable individual.-- ``(A) In general.--The term `applicable individual' means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period-- ``(i) which is at least 180 consecutive days, and ``(ii) a portion of which occurs within the taxable year. Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39\1/2\ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements. ``(B) Individuals with long-term care needs.--An individual is described in this subparagraph if the individual meets any of the following requirements: ``(i) The individual is at least 6 years of age and-- ``(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or ``(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities. ``(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility. ``(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent. ``(3) Eligible caregiver.-- ``(A) In general.--A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals: ``(i) The taxpayer. ``(ii) The taxpayer's spouse. ``(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year. ``(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c)(1)(A) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied. ``(v) An individual who would be described in clause (iii) for the taxable year if-- ``(I) the requirements of clause (iv) are met with respect to the individual, and ``(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test of section 152(a). ``(B) Residency test.--The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and-- ``(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, is a member of the taxpayer's household for over half the taxable year, or ``(ii) in the case of any other individual, is a member of the taxpayer's household for the entire taxable year. ``(C) Special rules where more than 1 eligible caregiver.-- ``(i) In general.--If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section. ``(ii) No agreement.--If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver. ``(iii) Married individuals filing separately.--In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).'' (c) Identification Requirements.-- [[Page S6697]] (1) In general.--Section 24(e) is amended by adding at the end the following new sentence: ``No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.'' (2) Assessment.--Section 6213(g)(2)(I) of such Code is amended-- (A) by inserting ``or physician identification'' after ``correct TIN'', and (B) by striking ``child'' and inserting ``family care''. (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. FULL DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF- EMPLOYED INDIVIDUALS. (a) In General.--Section 162(l)(1) (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows: ``(1) Allowance of deduction.--In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents.''. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2000. ______ WELLSTONE (AND OTHERS) AMENDMENT NO. 3826 (Ordered to lie on the table.) Mr. WELLSTONE (for himself, Mr. Dodd, Mr. Landrieu, and Mr. Kohl), submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--DEPENDENT CARE TAX CREDIT SEC. 201. EXPANSION OF DEPENDENT CARE TAX CREDIT. (a) In General.--Paragraph (2) of section 21(a) (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows: ``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means 50 percent (40 percent for taxable years beginning after December 31, 2002, and before January 1, 2005) reduced (but not below 20 percent) by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $30,000.'' (b) Minimum Credit Allowed for Stay-At-Home Parents.-- Section 21(e) (relating to special rules) is amended by adding at the end the following: ``(11) Minimum credit allowed for stay-at-home parents.-- Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to not more than 2 of such qualifying individuals in an amount equal to the greater of-- ``(A) the amount of employment-related expenses incurred for such qualifying individuals for the taxable year (determined under this section without regard to this paragraph), or ``(B) $41.67 for each month in such taxable year during which each such qualifying individual is under the age of 1.''. (c) Inflation Adjustment of Dollar Amounts.-- (1) Section 21 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: ``(f) Inflation Adjustment.--In the case of any taxable year beginning in a calendar year after 2001, the $30,000 amount contained in subsection (a), the $2,400 amount in subsection (c), and the $41.67 amount in subsection (e)(11) shall be increased by an amount equal to-- ``(1) such dollar amount, multiplied by ``(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2000' for `calendar year 1992' in subparagraph (B) thereof. If the increase determined under the preceding sentence is not a multiple of $50 ($5 in the case of the amount in subsection (e)(11)), such amount shall be rounded to the next lowest multiple thereof.'' (2) Paragraph (2) of section 21(c) is amended by striking ``$4,800'' and inserting ``twice the dollar amount applicable under paragraph (1)''. (3) Paragraph (2) of section 21(d) is amended by striking ``less than--'' and all that follows through the end of the first sentence and inserting ``less than \1/12\ of the amount which applies under subsection (c) to the taxpayer for the taxable year.'' (d) Credit Allowed Based on Residency in Certain Cases.-- Subsection (e) of section 21 is amended by adding at the end the following new paragraph: ``(12) Credit allowed based on residency in certain cases.--In the case of a taxpayer-- ``(A) who does not satisfy the household maintenance test of subsection (a) for any period, but ``(B) whose principal place of abode for such period is also the principal place of abode of any qualifying individual, then such taxpayer shall be treated as satisfying such test for such period but the amount of credit allowable under this section with respect to such individual shall be determined by allowing only \1/12\ of the limitation under subsection (c) for each full month that the requirement of subparagraph (B) is met.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. DEPENDENT CARE TAX CREDIT MADE REFUNDABLE. (a) In General.--Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended-- (1) by redesignating section 35 as section 36, and (2) by redesignating section 21 as section 35. (b) Advance Payment of Credit.--Chapter 25 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following: ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT. ``(a) General Rule.--Except

Summary:

All articles in Senate section

AMENDMENTS SUBMITTED
(Senate - July 13, 2000)

Text of this article available as: TXT PDF [Pages S6692-S6761] AMENDMENTS SUBMITTED ______ DEATH TAX ELIMINATION ACT ______ MOYNIHAN AMENDMENT NO. 3821 Mr. MOYNIHAN proposed an amendment to the bill (H.R. 8) to amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. SEC. 2. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 3. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 4. SENSE OF SENATE REGARDING SAVINGS. It is the sense of the Senate that the reduced cost to the Federal Treasury resulting from the amendments made by this Act as compared to the cost to the Federal Treasury of H.R. 8 as received by the Senate from the House of Representatives on June 12, 2000, should be used exclusively to reduce the Federal debt held by the public. Amend the title so as to read: ``An Act to amend the Internal Revenue Code of 1986 to increase the unified credit exemption and the qualified family-owned business interest deduction, and for other purposes.'' ______ SCHUMER (AND OTHERS) AMENDMENT NO. 3822 Mr. SCHUMER (for himself, Mr. Biden, Mr. Bayh, Ms. Landrieu, Mr. Durbin, and Mr. Robb) proposed an amendment to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus [[Page S6693]] ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--MAKE COLLEGE AFFORDABLE SEC. 201. DEDUCTION FOR HIGHER EDUCATION EXPENSES. (a) Deduction Allowed.--Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following: ``SEC. 222. HIGHER EDUCATION EXPENSES. ``(a) Allowance of Deduction.-- ``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year. ``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows: Applicable ``Taxable year: dollar amount: 2002......................................................$4,000 .... 2003......................................................$8,000 .... 2004 and thereafter......................................$12,000..... ``(b) Limitation Based on Modified Adjusted Gross Income.-- ``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2). ``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as-- ``(A) the excess of-- ``(i) the taxpayer's modified adjusted gross income for such taxable year, over ``(ii) $62,450 ($104,050 in the case of a joint return, $89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to ``(B) $15,000. ``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined-- ``(A) without regard to this section and sections 911, 931, and 933, and ``(B) after the application of sections 86, 135, 219, 220, and 469. For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section. ``(c) Qualified Higher Education Expenses.--For purposes of this section-- ``(1) Qualified higher education expenses.-- ``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of-- ``(i) the taxpayer, ``(ii) the taxpayer's spouse, ``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or ``(iv) any grandchild of the taxpayer, as an eligible student at an institution of higher education. ``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses-- ``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and ``(ii) are not attributable to any graduate program of such individual. ``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction. ``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who-- ``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and ``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education. ``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year. ``(2) Institution of higher education.--The term `institution of higher education' means an institution which-- ``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and ``(B) is eligible to participate in programs under title IV of such Act. ``(d) Special Rules.-- ``(1) No double benefit.-- ``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision. ``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year. ``(C) Dependents.--No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. ``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year. ``(2) Limitation on taxable year of deduction.-- ``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year. ``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year. ``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as-- ``(A) a qualified scholarship which under section 117 is not includable in gross income, ``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or ``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States. ``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. ``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.'' (b) Deduction Allowed in Computing Adjusted Gross Income.-- Section 62(a) is amended by inserting after paragraph (17) the following: ``(18) Higher education expenses.--The deduction allowed by section 222.'' (c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following: ``Sec. 222. Higher education expenses. ``Sec. 223. Cross reference.'' (d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001. SEC. 202. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS. (a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 25A the following new section: ``SEC. 25B. INTEREST ON HIGHER EDUCATION LOANS. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan. ``(b) Maximum Credit.-- ``(1) In general.--Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500. ``(2) Limitation based on modified adjusted gross income.-- ``(A) In general.--If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($80,000 in the case of a joint return), the amount which would (but [[Page S6694]] for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000. ``(B) Modified adjusted gross income.--The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933. ``(C) Inflation adjustment.--In the case of any taxable year beginning after 2003, the $50,000 and $80,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2002' for `1992'. ``(D) Rounding.--If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. ``(c) Dependents Not Eligible for Credit.--No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins. ``(d) Limit on Period Credit Allowed.--A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan. ``(e) Definitions.--For purposes of this section-- ``(1) Qualified education loan.--The term `qualified education loan' has the meaning given such term by section 221(e)(1). ``(2) Dependent.--The term `dependent' has the meaning given such term by section 152. ``(f) Special Rules.-- ``(1) Denial of double benefit.--No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter. ``(2) Married couples must file joint return.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(3) Marital status.--Marital status shall be determined in accordance with section 7703.'' (b) Conforming Amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25A the following new item: ``Sec. 25B. Interest on higher education loans.'' (c) Effective Date.--The amendments made by this section shall apply to any qualified education loan (as defined in section 25B(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2001. TITLE III--ADVANCED TEACHER CERTIFICATION INCENTIVES SEC. 301. CERTIFIED TEACHER CREDIT. (a) Findings.--Congress makes the following findings: (1) Studies have shown that the greatest single in-school factor affecting student achievement is teacher quality. (2) Most accomplished teachers do not get the rewards they deserve. (3) After adjusting amounts for inflation, the average teacher salary for 1997-1998 of $39,347 is just $2 above what it was in 1993. Such salary is also just $1,924 more than the average salary recorded in 1972, a real increase of only $75 per year. (4) While K-12 enrollments are steadily increasing, the teacher population is aging. There is a need, now more than ever, to attract competent, capable, and bright college graduates or mid-career professionals to the teaching profession. (5) The Department of Education projects that 2,000,000 new teachers will have to be hired in the next decade. Shortages, if they occur, will most likely be felt in urban or rural regions of the country where working conditions may be difficult or compensation low. (6) If students are to receive a high quality education and remain competitive in the global market the United States must attract talented and motivated people to the teaching profession in large numbers. (b) Allowance of Credit.--Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. CERTIFIED TEACHER CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--In the case of an eligible teacher, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year $5,000. ``(2) Year credit allowed.--The credit under paragraph (1) shall be allowed in the taxable year in which the taxpayer becomes a certified individual. ``(b) Definitions.--For purposes of this section-- ``(1) Eligible teacher.-- ``(A) In general.--The term `eligible teacher' means a certified individual who is a pre-kindergarten or early childhood educator, or a kindergarten through grade 12 classroom teacher, instructor, counselor, aide, or principal in an elementary or secondary school on a full-time basis for an academic year ending during a taxable year. ``(B) Certified individual.--The term `certified individual' means an individual who has successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards. ``(2) Elementary or secondary school.--The term `elementary or secondary school' means a public elementary or secondary school which-- ``(A) is located in a school district of a local educational agency which is eligible, during the taxable year, for assistance under part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.), and ``(B) during the taxable year, the Secretary of Education determines to have an enrollment of children counted under section 1124(c) of such Act (20 U.S.C. 6333(c)) in an amount in excess of an amount equal to 40 percent of the total enrollment of such school. ``(c) Verification.--The credit allowed under subsection (a) shall be allowed with respect to any certified individual only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (c) Exclusion From Income For Certain Amounts.--Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 140 and inserting after section 138 the following new section: ``SEC. 139. CERTAIN AMOUNTS RECEIVED BY CERTIFIED TEACHERS. ``(a) In General.--In the case of a certified teacher, gross income shall not include the value of anything received during the taxable year solely by reason of such teacher having successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards (such as an incentive payment). ``(b) Certified Teacher.--For purposes of this section, the term `certified teacher' has the meaning given the term `eligible teacher' under section 35(b)(1). ``(c) Verification.--The exclusion under subsection (a) shall be allowed with respect to any certified teacher only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Amounts Must be Reasonable.--Amounts excluded under subsection (a) shall include only amounts which are reasonable.''. (d) Conforming Amendments.-- (1) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following: ``Sec. 35. Certified teacher credit. ``Sec. 36. Overpayments of tax.'' (3) The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Certain amounts received by certified teachers. ``Sec. 140. Cross references to other Acts.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. HATCH (AND OTHERS) AMENDMENT NO. 3823 Mr. HATCH (for himself, Mr. Robb, and Mr. Kennedy) proposed an amendment to the bill, H.R. 8, supra; as follows: At the end, add the following: TITLE VI--PERMANENT EXTENSION OF RESEARCH CREDIT SEC. 601. PERMANENT EXTENSION OF RESEARCH CREDIT. (a) In General.--Section 41 (relating to credit for increasing research activities) is amended by striking subsection (h). (b) Conforming Amendment.--Paragraph (1) of section 45C(b) is amended by striking subparagraph (D). ______ GRAHAM (AND OTHERS) AMENDMENT NO. 3824 (Ordered to lie on the table.) Mr. GRAHAM (for himself, Mr. Kennedy, Mr. Robb, Mr. Bryan, Mrs. Lincoln, Mr. Rockefeller, Mr. Daschle, Mr. Wellstone, Mr. Kerry, and Mr. Dorgan) submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: SECTION 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. [[Page S6695]] (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005......................$1,375,000 2006 and 2007.........................................$1,625,000 2008..................................................$2,375,000 2009 or thereafter..................................$3,375,000.'' ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM SEC. 201. ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM. (a) Findings.--The Senate makes the following findings: (1) Beneficiaries under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) are the only group of insured Americans without prescription drug coverage. (2) At any point in time, approximately 13,000,000 medicare beneficiaries are without prescription drug coverage. (3) Over the course of a year, nearly 20,000,000 medicare beneficiaries are without prescription drug coverage for all or part of the year. (4) The options available to medicare beneficiaries for obtaining prescription drug coverage are declining since-- (A) the number of employers providing employer-sponsored retiree coverage is declining at a dramatic rate; (B) Medicare+Choice plans that might otherwise provide prescription drug coverage are pulling out of counties throughout the Nation; and (C) medicare supplemental policies (medigap policies) that offer prescription drug coverage are so prohibitively expensive that only 8 percent of medicare beneficiaries have the means to purchase such policies. (5) An elderly individual without prescription drug coverage living on $12,525 a year (150 percent of the Federal poverty line), who has diabetes, hypertension, and high cholesterol, pays more than 18.3 percent of their total income on the prescription drugs most commonly prescribed to treat their medical conditions. (6) Medicare beneficiaries should never have to make the choice between having a roof over their head, having food in their mouth, or having necessary prescription drugs. (7) Congress must provide medicare beneficiaries with a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (8) Meaningful prescription drug coverage includes stop- loss protection above $4,000 of out-of-pocket expenses for prescription drugs. (9) In March 2000, the Congressional Budget Office estimated the on-budget surplus for the 5-year period of fiscal year 2001 through fiscal year 2005 to be $148,000,000,000, assuming that discretionary spending was allowed to increase with inflation. (10) Relying on the March 2000 estimate of the Congressional Budget Office, on April 12, 2000, Congress passed the concurrent resolution on the budget for fiscal year 2001 which allocated $40,000,000,000 of the estimated on-budget surplus for the 5-year period described in paragraph (9) to provide a prescription drug benefit for medicare beneficiaries. (11) Forty billion dollars over 5 years cannot ensure access to a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (12) Congress should not be bound to an arbitrarily low and inadequate allocation for providing a medicare prescription drug benefit when the estimated on-budget surplus for the 5- year period described in paragraph (9) has increased dramatically since March 2000. (13) The Office of Management and Budget recently has revised its estimates for the on-budget surplus for the 5- year period described in paragraph (9) and now estimates that the on-budget surplus will be $360,000,000,000 for such period. (14) The Congressional Budget Office will issue its revised budget estimates in the next few days and those estimates are widely expected to reflect a significant increase in the on- budget surplus for the 5-year period described in paragraph (9) as compared to the on-budget surplus that was estimated for such period in March 2000. (b) 2001 Budget Resolution Amendment.--Section 213(b) of H. Con. Res. 290 (106th Congress) is amended to read as follows: ``(b) Adjustments.--The chairman of the Committee on the Budget of the House or Senate, as applicable-- ``(1) shall revise committee allocations and other appropriate budgetary levels and limits to accommodate legislation described in section 215(a) which improves access to prescription drugs for Medicare beneficiaries in an additional amount not to exceed $40,000,000,000 or the difference between the on-budget surpluses in the reports referred to in subsection (a), whichever is less; and ``(2) may, after the adjustment in paragraph (1), make the following adjustments in an amount not to exceed the difference between the on-budget surpluses in the reports referred to in subsection (a) minus the adjustment made pursuant to paragraph (1): ``(A) Reduce the on-budget revenue aggregate by that amount for such fiscal year. ``(B) Adjust the instruction in section 103 or 104 to-- ``(i) increase the reduction in revenues by that amount for fiscal year 2001; ``(ii) increase the reduction in revenues by the sum of the amounts for the period of fiscal years 2001 through 2005; and ``(iii) in the House only, increase the amount of debt reduction by that amount for fiscal year 2001. ``(C) Adjust such other levels in this resolution, as appropriate and the Senate pay-as-you-go scorecard.''. Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' [[Page S6696]] (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--HEALTH PROVISIONS SEC. 201. LONG-TERM CARE TAX CREDIT. (a) Allowance of Credit.-- (1) In general.--Section 24(a) (relating to allowance of child tax credit) is amended to read as follows: ``(a) Allowance of Credit.-- ``(1) In general.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of-- ``(A) $500 multiplied by the number of qualifying children of the taxpayer, plus ``(B) the applicable dollar amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year. ``(2) Applicable dollar amount.--For purposes of paragraph (1)(B), the applicable dollar amount for taxable years beginning in any calendar year shall be determined in accordance with the following table: Applicable ``Calendar year: Dollar amount: 2001......................................................$1,000 .... 2002......................................................$1,500 .... 2003......................................................$2,000 .... 2004......................................................$2,500 .... 2005 and thereafter.....................................$3,000.''.... (2) Additional credit for taxpayer with 3 or more separate credit amounts.--So much of section 24(d) as precedes paragraph (1)(A) thereof is amended to read as follows: ``(d) Additional Credit for Taxpayers With 3 or More Separate Credit Amounts.-- ``(1) In general.--If the sum of the number of qualifying children of the taxpayer and the number of applicable individuals with respect to which the taxpayer is an eligible caregiver is 3 or more for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of--''. (3) Conforming amendments.-- (A) The heading for section 32(n) is amended by striking ``Child'' and inserting ``Family Care''. (B) The heading for section 24 is amended to read as follows: ``SEC. 24. FAMILY CARE CREDIT.'' (C) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 24 and inserting the following new item: ``Sec. 24. Family care credit.'' (b) Definitions.--Section 24(c) (defining qualifying child) is amended to read as follows: ``(c) Definitions.--For purposes of this section-- ``(1) Qualifying child.-- ``(A) In general.--The term `qualifying child' means any individual if-- ``(i) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, ``(ii) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and ``(iii) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B). ``(B) Exception for certain noncitizens.--The term `qualifying child' shall not include any individual who would not be a dependent if the first sentence of section 152(b)(3) were applied without regard to all that follows `resident of the United States'. ``(2) Applicable individual.-- ``(A) In general.--The term `applicable individual' means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period-- ``(i) which is at least 180 consecutive days, and ``(ii) a portion of which occurs within the taxable year. Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39\1/2\ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements. ``(B) Individuals with long-term care needs.--An individual is described in this subparagraph if the individual meets any of the following requirements: ``(i) The individual is at least 6 years of age and-- ``(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or ``(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities. ``(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility. ``(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent. ``(3) Eligible caregiver.-- ``(A) In general.--A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals: ``(i) The taxpayer. ``(ii) The taxpayer's spouse. ``(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year. ``(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c)(1)(A) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied. ``(v) An individual who would be described in clause (iii) for the taxable year if-- ``(I) the requirements of clause (iv) are met with respect to the individual, and ``(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test of section 152(a). ``(B) Residency test.--The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and-- ``(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, is a member of the taxpayer's household for over half the taxable year, or ``(ii) in the case of any other individual, is a member of the taxpayer's household for the entire taxable year. ``(C) Special rules where more than 1 eligible caregiver.-- ``(i) In general.--If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section. ``(ii) No agreement.--If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver. ``(iii) Married individuals filing separately.--In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).'' (c) Identification Requirements.-- [[Page S6697]] (1) In general.--Section 24(e) is amended by adding at the end the following new sentence: ``No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.'' (2) Assessment.--Section 6213(g)(2)(I) of such Code is amended-- (A) by inserting ``or physician identification'' after ``correct TIN'', and (B) by striking ``child'' and inserting ``family care''. (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. FULL DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF- EMPLOYED INDIVIDUALS. (a) In General.--Section 162(l)(1) (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows: ``(1) Allowance of deduction.--In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents.''. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2000. ______ WELLSTONE (AND OTHERS) AMENDMENT NO. 3826 (Ordered to lie on the table.) Mr. WELLSTONE (for himself, Mr. Dodd, Mr. Landrieu, and Mr. Kohl), submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--DEPENDENT CARE TAX CREDIT SEC. 201. EXPANSION OF DEPENDENT CARE TAX CREDIT. (a) In General.--Paragraph (2) of section 21(a) (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows: ``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means 50 percent (40 percent for taxable years beginning after December 31, 2002, and before January 1, 2005) reduced (but not below 20 percent) by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $30,000.'' (b) Minimum Credit Allowed for Stay-At-Home Parents.-- Section 21(e) (relating to special rules) is amended by adding at the end the following: ``(11) Minimum credit allowed for stay-at-home parents.-- Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to not more than 2 of such qualifying individuals in an amount equal to the greater of-- ``(A) the amount of employment-related expenses incurred for such qualifying individuals for the taxable year (determined under this section without regard to this paragraph), or ``(B) $41.67 for each month in such taxable year during which each such qualifying individual is under the age of 1.''. (c) Inflation Adjustment of Dollar Amounts.-- (1) Section 21 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: ``(f) Inflation Adjustment.--In the case of any taxable year beginning in a calendar year after 2001, the $30,000 amount contained in subsection (a), the $2,400 amount in subsection (c), and the $41.67 amount in subsection (e)(11) shall be increased by an amount equal to-- ``(1) such dollar amount, multiplied by ``(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2000' for `calendar year 1992' in subparagraph (B) thereof. If the increase determined under the preceding sentence is not a multiple of $50 ($5 in the case of the amount in subsection (e)(11)), such amount shall be rounded to the next lowest multiple thereof.'' (2) Paragraph (2) of section 21(c) is amended by striking ``$4,800'' and inserting ``twice the dollar amount applicable under paragraph (1)''. (3) Paragraph (2) of section 21(d) is amended by striking ``less than--'' and all that follows through the end of the first sentence and inserting ``less than \1/12\ of the amount which applies under subsection (c) to the taxpayer for the taxable year.'' (d) Credit Allowed Based on Residency in Certain Cases.-- Subsection (e) of section 21 is amended by adding at the end the following new paragraph: ``(12) Credit allowed based on residency in certain cases.--In the case of a taxpayer-- ``(A) who does not satisfy the household maintenance test of subsection (a) for any period, but ``(B) whose principal place of abode for such period is also the principal place of abode of any qualifying individual, then such taxpayer shall be treated as satisfying such test for such period but the amount of credit allowable under this section with respect to such individual shall be determined by allowing only \1/12\ of the limitation under subsection (c) for each full month that the requirement of subparagraph (B) is met.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. DEPENDENT CARE TAX CREDIT MADE REFUNDABLE. (a) In General.--Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended-- (1) by redesignating section 35 as section 36, and (2) by redesignating section 21 as section 35. (b) Advance Payment of Credit.--Chapter 25 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following: ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT.

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AMENDMENTS SUBMITTED
(Senate - July 13, 2000)

Text of this article available as: TXT PDF [Pages S6692-S6761] AMENDMENTS SUBMITTED ______ DEATH TAX ELIMINATION ACT ______ MOYNIHAN AMENDMENT NO. 3821 Mr. MOYNIHAN proposed an amendment to the bill (H.R. 8) to amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. SEC. 2. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 3. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 4. SENSE OF SENATE REGARDING SAVINGS. It is the sense of the Senate that the reduced cost to the Federal Treasury resulting from the amendments made by this Act as compared to the cost to the Federal Treasury of H.R. 8 as received by the Senate from the House of Representatives on June 12, 2000, should be used exclusively to reduce the Federal debt held by the public. Amend the title so as to read: ``An Act to amend the Internal Revenue Code of 1986 to increase the unified credit exemption and the qualified family-owned business interest deduction, and for other purposes.'' ______ SCHUMER (AND OTHERS) AMENDMENT NO. 3822 Mr. SCHUMER (for himself, Mr. Biden, Mr. Bayh, Ms. Landrieu, Mr. Durbin, and Mr. Robb) proposed an amendment to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedents dying, and The applicable gifts made, during: exclusion amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus [[Page S6693]] ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--MAKE COLLEGE AFFORDABLE SEC. 201. DEDUCTION FOR HIGHER EDUCATION EXPENSES. (a) Deduction Allowed.--Part VII of subchapter B of chapter 1 (relating to additional itemized deductions for individuals) is amended by redesignating section 222 as section 223 and by inserting after section 221 the following: ``SEC. 222. HIGHER EDUCATION EXPENSES. ``(a) Allowance of Deduction.-- ``(1) In general.--In the case of an individual, there shall be allowed as a deduction an amount equal to the applicable dollar amount of the qualified higher education expenses paid by the taxpayer during the taxable year. ``(2) Applicable dollar amount.--The applicable dollar amount for any taxable year shall be determined as follows: Applicable ``Taxable year: dollar amount: 2002......................................................$4,000 .... 2003......................................................$8,000 .... 2004 and thereafter......................................$12,000..... ``(b) Limitation Based on Modified Adjusted Gross Income.-- ``(1) In general.--The amount which would (but for this subsection) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under paragraph (2). ``(2) Amount of reduction.--The amount determined under this paragraph equals the amount which bears the same ratio to the amount which would be so taken into account as-- ``(A) the excess of-- ``(i) the taxpayer's modified adjusted gross income for such taxable year, over ``(ii) $62,450 ($104,050 in the case of a joint return, $89,150 in the case of a return filed by a head of household, and $52,025 in the case of a return by a married individual filing separately), bears to ``(B) $15,000. ``(3) Modified adjusted gross income.--For purposes of this subsection, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined-- ``(A) without regard to this section and sections 911, 931, and 933, and ``(B) after the application of sections 86, 135, 219, 220, and 469. For purposes of the sections referred to in subparagraph (B), adjusted gross income shall be determined without regard to the deduction allowed under this section. ``(c) Qualified Higher Education Expenses.--For purposes of this section-- ``(1) Qualified higher education expenses.-- ``(A) In general.--The term `qualified higher education expenses' means tuition and fees charged by an educational institution and required for the enrollment or attendance of-- ``(i) the taxpayer, ``(ii) the taxpayer's spouse, ``(iii) any dependent of the taxpayer with respect to whom the taxpayer is allowed a deduction under section 151, or ``(iv) any grandchild of the taxpayer, as an eligible student at an institution of higher education. ``(B) Eligible courses.--Amounts paid for qualified higher education expenses of any individual shall be taken into account under subsection (a) only to the extent such expenses-- ``(i) are attributable to courses of instruction for which credit is allowed toward a baccalaureate degree by an institution of higher education or toward a certificate of required course work at a vocational school, and ``(ii) are not attributable to any graduate program of such individual. ``(C) Exception for nonacademic fees.--Such term does not include any student activity fees, athletic fees, insurance expenses, or other expenses unrelated to a student's academic course of instruction. ``(D) Eligible student.--For purposes of subparagraph (A), the term `eligible student' means a student who-- ``(i) meets the requirements of section 484(a)(1) of the Higher Education Act of 1965 (20 U.S.C. 1091(a)(1)), as in effect on the date of the enactment of this section, and ``(ii) is carrying at least one-half the normal full-time work load for the course of study the student is pursuing, as determined by the institution of higher education. ``(E) Identification requirement.--No deduction shall be allowed under subsection (a) to a taxpayer with respect to an eligible student unless the taxpayer includes the name, age, and taxpayer identification number of such eligible student on the return of tax for the taxable year. ``(2) Institution of higher education.--The term `institution of higher education' means an institution which-- ``(A) is described in section 481 of the Higher Education Act of 1965 (20 U.S.C. 1088), as in effect on the date of the enactment of this section, and ``(B) is eligible to participate in programs under title IV of such Act. ``(d) Special Rules.-- ``(1) No double benefit.-- ``(A) In general.--No deduction shall be allowed under subsection (a) for any expense for which a deduction is allowable to the taxpayer under any other provision of this chapter unless the taxpayer irrevocably waives his right to the deduction of such expense under such other provision. ``(B) Denial of deduction if credit elected.--No deduction shall be allowed under subsection (a) for a taxable year with respect to the qualified higher education expenses of an individual if the taxpayer elects to have section 25A apply with respect to such individual for such year. ``(C) Dependents.--No deduction shall be allowed under subsection (a) to any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which such individual's taxable year begins. ``(D) Coordination with exclusions.--A deduction shall be allowed under subsection (a) for qualified higher education expenses only to the extent the amount of such expenses exceeds the amount excludable under section 135 or 530(d)(2) for the taxable year. ``(2) Limitation on taxable year of deduction.-- ``(A) In general.--A deduction shall be allowed under subsection (a) for qualified higher education expenses for any taxable year only to the extent such expenses are in connection with enrollment at an institution of higher education during the taxable year. ``(B) Certain prepayments allowed.--Subparagraph (A) shall not apply to qualified higher education expenses paid during a taxable year if such expenses are in connection with an academic term beginning during such taxable year or during the first 3 months of the next taxable year. ``(3) Adjustment for certain scholarships and veterans benefits.--The amount of qualified higher education expenses otherwise taken into account under subsection (a) with respect to the education of an individual shall be reduced (before the application of subsection (b)) by the sum of the amounts received with respect to such individual for the taxable year as-- ``(A) a qualified scholarship which under section 117 is not includable in gross income, ``(B) an educational assistance allowance under chapter 30, 31, 32, 34, or 35 of title 38, United States Code, or ``(C) a payment (other than a gift, bequest, devise, or inheritance within the meaning of section 102(a)) for educational expenses, or attributable to enrollment at an eligible educational institution, which is exempt from income taxation by any law of the United States. ``(4) No deduction for married individuals filing separate returns.--If the taxpayer is a married individual (within the meaning of section 7703), this section shall apply only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(5) Nonresident aliens.--If the taxpayer is a nonresident alien individual for any portion of the taxable year, this section shall apply only if such individual is treated as a resident alien of the United States for purposes of this chapter by reason of an election under subsection (g) or (h) of section 6013. ``(6) Regulations.--The Secretary may prescribe such regulations as may be necessary or appropriate to carry out this section, including regulations requiring recordkeeping and information reporting.'' (b) Deduction Allowed in Computing Adjusted Gross Income.-- Section 62(a) is amended by inserting after paragraph (17) the following: ``(18) Higher education expenses.--The deduction allowed by section 222.'' (c) Conforming Amendment.--The table of sections for part VII of subchapter B of chapter 1 is amended by striking the item relating to section 222 and inserting the following: ``Sec. 222. Higher education expenses. ``Sec. 223. Cross reference.'' (d) Effective Date.--The amendments made by this section shall apply to payments made in taxable years beginning after December 31, 2001. SEC. 202. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS. (a) In General.--Subpart A of part IV of subchapter A of chapter 1 (relating to nonrefundable personal credits) is amended by inserting after section 25A the following new section: ``SEC. 25B. INTEREST ON HIGHER EDUCATION LOANS. ``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan. ``(b) Maximum Credit.-- ``(1) In general.--Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500. ``(2) Limitation based on modified adjusted gross income.-- ``(A) In general.--If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($80,000 in the case of a joint return), the amount which would (but [[Page S6694]] for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000. ``(B) Modified adjusted gross income.--The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933. ``(C) Inflation adjustment.--In the case of any taxable year beginning after 2003, the $50,000 and $80,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to-- ``(i) such dollar amount, multiplied by ``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2002' for `1992'. ``(D) Rounding.--If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50. ``(c) Dependents Not Eligible for Credit.--No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins. ``(d) Limit on Period Credit Allowed.--A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months (whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan. ``(e) Definitions.--For purposes of this section-- ``(1) Qualified education loan.--The term `qualified education loan' has the meaning given such term by section 221(e)(1). ``(2) Dependent.--The term `dependent' has the meaning given such term by section 152. ``(f) Special Rules.-- ``(1) Denial of double benefit.--No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter. ``(2) Married couples must file joint return.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year. ``(3) Marital status.--Marital status shall be determined in accordance with section 7703.'' (b) Conforming Amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25A the following new item: ``Sec. 25B. Interest on higher education loans.'' (c) Effective Date.--The amendments made by this section shall apply to any qualified education loan (as defined in section 25B(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2001. TITLE III--ADVANCED TEACHER CERTIFICATION INCENTIVES SEC. 301. CERTIFIED TEACHER CREDIT. (a) Findings.--Congress makes the following findings: (1) Studies have shown that the greatest single in-school factor affecting student achievement is teacher quality. (2) Most accomplished teachers do not get the rewards they deserve. (3) After adjusting amounts for inflation, the average teacher salary for 1997-1998 of $39,347 is just $2 above what it was in 1993. Such salary is also just $1,924 more than the average salary recorded in 1972, a real increase of only $75 per year. (4) While K-12 enrollments are steadily increasing, the teacher population is aging. There is a need, now more than ever, to attract competent, capable, and bright college graduates or mid-career professionals to the teaching profession. (5) The Department of Education projects that 2,000,000 new teachers will have to be hired in the next decade. Shortages, if they occur, will most likely be felt in urban or rural regions of the country where working conditions may be difficult or compensation low. (6) If students are to receive a high quality education and remain competitive in the global market the United States must attract talented and motivated people to the teaching profession in large numbers. (b) Allowance of Credit.--Subpart C of part IV of subchapter A of chapter 1 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. CERTIFIED TEACHER CREDIT. ``(a) Allowance of Credit.-- ``(1) In general.--In the case of an eligible teacher, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year $5,000. ``(2) Year credit allowed.--The credit under paragraph (1) shall be allowed in the taxable year in which the taxpayer becomes a certified individual. ``(b) Definitions.--For purposes of this section-- ``(1) Eligible teacher.-- ``(A) In general.--The term `eligible teacher' means a certified individual who is a pre-kindergarten or early childhood educator, or a kindergarten through grade 12 classroom teacher, instructor, counselor, aide, or principal in an elementary or secondary school on a full-time basis for an academic year ending during a taxable year. ``(B) Certified individual.--The term `certified individual' means an individual who has successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards. ``(2) Elementary or secondary school.--The term `elementary or secondary school' means a public elementary or secondary school which-- ``(A) is located in a school district of a local educational agency which is eligible, during the taxable year, for assistance under part A of title I of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6311 et seq.), and ``(B) during the taxable year, the Secretary of Education determines to have an enrollment of children counted under section 1124(c) of such Act (20 U.S.C. 6333(c)) in an amount in excess of an amount equal to 40 percent of the total enrollment of such school. ``(c) Verification.--The credit allowed under subsection (a) shall be allowed with respect to any certified individual only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Election To Have Credit Not Apply.--A taxpayer may elect to have this section not apply for any taxable year.''. (c) Exclusion From Income For Certain Amounts.--Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 140 and inserting after section 138 the following new section: ``SEC. 139. CERTAIN AMOUNTS RECEIVED BY CERTIFIED TEACHERS. ``(a) In General.--In the case of a certified teacher, gross income shall not include the value of anything received during the taxable year solely by reason of such teacher having successfully completed the requirements for advanced certification provided by the National Board for Professional Teaching Standards (such as an incentive payment). ``(b) Certified Teacher.--For purposes of this section, the term `certified teacher' has the meaning given the term `eligible teacher' under section 35(b)(1). ``(c) Verification.--The exclusion under subsection (a) shall be allowed with respect to any certified teacher only if the certification is verified in such manner as the Secretary shall prescribe by regulation. ``(d) Amounts Must be Reasonable.--Amounts excluded under subsection (a) shall include only amounts which are reasonable.''. (d) Conforming Amendments.-- (1) Section 1324(b)(2) of title 31, United States Code, is amended by striking ``or'' before ``enacted'' and by inserting before the period at the end ``, or from section 35 of such Code''. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 35 and inserting the following: ``Sec. 35. Certified teacher credit. ``Sec. 36. Overpayments of tax.'' (3) The table of sections for part III of subchapter B of chapter 1 is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Certain amounts received by certified teachers. ``Sec. 140. Cross references to other Acts.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2001. HATCH (AND OTHERS) AMENDMENT NO. 3823 Mr. HATCH (for himself, Mr. Robb, and Mr. Kennedy) proposed an amendment to the bill, H.R. 8, supra; as follows: At the end, add the following: TITLE VI--PERMANENT EXTENSION OF RESEARCH CREDIT SEC. 601. PERMANENT EXTENSION OF RESEARCH CREDIT. (a) In General.--Section 41 (relating to credit for increasing research activities) is amended by striking subsection (h). (b) Conforming Amendment.--Paragraph (1) of section 45C(b) is amended by striking subparagraph (D). ______ GRAHAM (AND OTHERS) AMENDMENT NO. 3824 (Ordered to lie on the table.) Mr. GRAHAM (for himself, Mr. Kennedy, Mr. Robb, Mr. Bryan, Mrs. Lincoln, Mr. Rockefeller, Mr. Daschle, Mr. Wellstone, Mr. Kerry, and Mr. Dorgan) submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: SECTION 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. [[Page S6695]] (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005......................$1,375,000 2006 and 2007.........................................$1,625,000 2008..................................................$2,375,000 2009 or thereafter..................................$3,375,000.'' ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM SEC. 201. ADDTIONAL BUDGET RESOURCES FOR A MEDICARE PRESCRIPTION DRUG BENEFIT PROGRAM. (a) Findings.--The Senate makes the following findings: (1) Beneficiaries under the medicare program under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) are the only group of insured Americans without prescription drug coverage. (2) At any point in time, approximately 13,000,000 medicare beneficiaries are without prescription drug coverage. (3) Over the course of a year, nearly 20,000,000 medicare beneficiaries are without prescription drug coverage for all or part of the year. (4) The options available to medicare beneficiaries for obtaining prescription drug coverage are declining since-- (A) the number of employers providing employer-sponsored retiree coverage is declining at a dramatic rate; (B) Medicare+Choice plans that might otherwise provide prescription drug coverage are pulling out of counties throughout the Nation; and (C) medicare supplemental policies (medigap policies) that offer prescription drug coverage are so prohibitively expensive that only 8 percent of medicare beneficiaries have the means to purchase such policies. (5) An elderly individual without prescription drug coverage living on $12,525 a year (150 percent of the Federal poverty line), who has diabetes, hypertension, and high cholesterol, pays more than 18.3 percent of their total income on the prescription drugs most commonly prescribed to treat their medical conditions. (6) Medicare beneficiaries should never have to make the choice between having a roof over their head, having food in their mouth, or having necessary prescription drugs. (7) Congress must provide medicare beneficiaries with a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (8) Meaningful prescription drug coverage includes stop- loss protection above $4,000 of out-of-pocket expenses for prescription drugs. (9) In March 2000, the Congressional Budget Office estimated the on-budget surplus for the 5-year period of fiscal year 2001 through fiscal year 2005 to be $148,000,000,000, assuming that discretionary spending was allowed to increase with inflation. (10) Relying on the March 2000 estimate of the Congressional Budget Office, on April 12, 2000, Congress passed the concurrent resolution on the budget for fiscal year 2001 which allocated $40,000,000,000 of the estimated on-budget surplus for the 5-year period described in paragraph (9) to provide a prescription drug benefit for medicare beneficiaries. (11) Forty billion dollars over 5 years cannot ensure access to a meaningful medicare prescription drug benefit that-- (A) is universal and affordable; (B) guarantees stable coverage for medicare beneficiaries receiving benefits through the original fee-for-service program or through enrollment in a Medicare+Choice plan; and (C) provides real low-income and stop-loss protections. (12) Congress should not be bound to an arbitrarily low and inadequate allocation for providing a medicare prescription drug benefit when the estimated on-budget surplus for the 5- year period described in paragraph (9) has increased dramatically since March 2000. (13) The Office of Management and Budget recently has revised its estimates for the on-budget surplus for the 5- year period described in paragraph (9) and now estimates that the on-budget surplus will be $360,000,000,000 for such period. (14) The Congressional Budget Office will issue its revised budget estimates in the next few days and those estimates are widely expected to reflect a significant increase in the on- budget surplus for the 5-year period described in paragraph (9) as compared to the on-budget surplus that was estimated for such period in March 2000. (b) 2001 Budget Resolution Amendment.--Section 213(b) of H. Con. Res. 290 (106th Congress) is amended to read as follows: ``(b) Adjustments.--The chairman of the Committee on the Budget of the House or Senate, as applicable-- ``(1) shall revise committee allocations and other appropriate budgetary levels and limits to accommodate legislation described in section 215(a) which improves access to prescription drugs for Medicare beneficiaries in an additional amount not to exceed $40,000,000,000 or the difference between the on-budget surpluses in the reports referred to in subsection (a), whichever is less; and ``(2) may, after the adjustment in paragraph (1), make the following adjustments in an amount not to exceed the difference between the on-budget surpluses in the reports referred to in subsection (a) minus the adjustment made pursuant to paragraph (1): ``(A) Reduce the on-budget revenue aggregate by that amount for such fiscal year. ``(B) Adjust the instruction in section 103 or 104 to-- ``(i) increase the reduction in revenues by that amount for fiscal year 2001; ``(ii) increase the reduction in revenues by the sum of the amounts for the period of fiscal years 2001 through 2005; and ``(iii) in the House only, increase the amount of debt reduction by that amount for fiscal year 2001. ``(C) Adjust such other levels in this resolution, as appropriate and the Senate pay-as-you-go scorecard.''. Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' [[Page S6696]] (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--HEALTH PROVISIONS SEC. 201. LONG-TERM CARE TAX CREDIT. (a) Allowance of Credit.-- (1) In general.--Section 24(a) (relating to allowance of child tax credit) is amended to read as follows: ``(a) Allowance of Credit.-- ``(1) In general.--There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of-- ``(A) $500 multiplied by the number of qualifying children of the taxpayer, plus ``(B) the applicable dollar amount multiplied by the number of applicable individuals with respect to whom the taxpayer is an eligible caregiver for the taxable year. ``(2) Applicable dollar amount.--For purposes of paragraph (1)(B), the applicable dollar amount for taxable years beginning in any calendar year shall be determined in accordance with the following table: Applicable ``Calendar year: Dollar amount: 2001......................................................$1,000 .... 2002......................................................$1,500 .... 2003......................................................$2,000 .... 2004......................................................$2,500 .... 2005 and thereafter.....................................$3,000.''.... (2) Additional credit for taxpayer with 3 or more separate credit amounts.--So much of section 24(d) as precedes paragraph (1)(A) thereof is amended to read as follows: ``(d) Additional Credit for Taxpayers With 3 or More Separate Credit Amounts.-- ``(1) In general.--If the sum of the number of qualifying children of the taxpayer and the number of applicable individuals with respect to which the taxpayer is an eligible caregiver is 3 or more for any taxable year, the aggregate credits allowed under subpart C shall be increased by the lesser of--''. (3) Conforming amendments.-- (A) The heading for section 32(n) is amended by striking ``Child'' and inserting ``Family Care''. (B) The heading for section 24 is amended to read as follows: ``SEC. 24. FAMILY CARE CREDIT.'' (C) The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by striking the item relating to section 24 and inserting the following new item: ``Sec. 24. Family care credit.'' (b) Definitions.--Section 24(c) (defining qualifying child) is amended to read as follows: ``(c) Definitions.--For purposes of this section-- ``(1) Qualifying child.-- ``(A) In general.--The term `qualifying child' means any individual if-- ``(i) the taxpayer is allowed a deduction under section 151 with respect to such individual for the taxable year, ``(ii) such individual has not attained the age of 17 as of the close of the calendar year in which the taxable year of the taxpayer begins, and ``(iii) such individual bears a relationship to the taxpayer described in section 32(c)(3)(B). ``(B) Exception for certain noncitizens.--The term `qualifying child' shall not include any individual who would not be a dependent if the first sentence of section 152(b)(3) were applied without regard to all that follows `resident of the United States'. ``(2) Applicable individual.-- ``(A) In general.--The term `applicable individual' means, with respect to any taxable year, any individual who has been certified, before the due date for filing the return of tax for the taxable year (without extensions), by a physician (as defined in section 1861(r)(1) of the Social Security Act) as being an individual with long-term care needs described in subparagraph (B) for a period-- ``(i) which is at least 180 consecutive days, and ``(ii) a portion of which occurs within the taxable year. Such term shall not include any individual otherwise meeting the requirements of the preceding sentence unless within the 39\1/2\ month period ending on such due date (or such other period as the Secretary prescribes) a physician (as so defined) has certified that such individual meets such requirements. ``(B) Individuals with long-term care needs.--An individual is described in this subparagraph if the individual meets any of the following requirements: ``(i) The individual is at least 6 years of age and-- ``(I) is unable to perform (without substantial assistance from another individual) at least 3 activities of daily living (as defined in section 7702B(c)(2)(B)) due to a loss of functional capacity, or ``(II) requires substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment and is unable to perform at least 1 activity of daily living (as so defined) or to the extent provided in regulations prescribed by the Secretary (in consultation with the Secretary of Health and Human Services), is unable to engage in age appropriate activities. ``(ii) The individual is at least 2 but not 6 years of age and is unable due to a loss of functional capacity to perform (without substantial assistance from another individual) at least 2 of the following activities: eating, transferring, or mobility. ``(iii) The individual is under 2 years of age and requires specific durable medical equipment by reason of a severe health condition or requires a skilled practitioner trained to address the individual's condition to be available if the individual's parents or guardians are absent. ``(3) Eligible caregiver.-- ``(A) In general.--A taxpayer shall be treated as an eligible caregiver for any taxable year with respect to the following individuals: ``(i) The taxpayer. ``(ii) The taxpayer's spouse. ``(iii) An individual with respect to whom the taxpayer is allowed a deduction under section 151 for the taxable year. ``(iv) An individual who would be described in clause (iii) for the taxable year if section 151(c)(1)(A) were applied by substituting for the exemption amount an amount equal to the sum of the exemption amount, the standard deduction under section 63(c)(2)(C), and any additional standard deduction under section 63(c)(3) which would be applicable to the individual if clause (iii) applied. ``(v) An individual who would be described in clause (iii) for the taxable year if-- ``(I) the requirements of clause (iv) are met with respect to the individual, and ``(II) the requirements of subparagraph (B) are met with respect to the individual in lieu of the support test of section 152(a). ``(B) Residency test.--The requirements of this subparagraph are met if an individual has as his principal place of abode the home of the taxpayer and-- ``(i) in the case of an individual who is an ancestor or descendant of the taxpayer or the taxpayer's spouse, is a member of the taxpayer's household for over half the taxable year, or ``(ii) in the case of any other individual, is a member of the taxpayer's household for the entire taxable year. ``(C) Special rules where more than 1 eligible caregiver.-- ``(i) In general.--If more than 1 individual is an eligible caregiver with respect to the same applicable individual for taxable years ending with or within the same calendar year, a taxpayer shall be treated as the eligible caregiver if each such individual (other than the taxpayer) files a written declaration (in such form and manner as the Secretary may prescribe) that such individual will not claim such applicable individual for the credit under this section. ``(ii) No agreement.--If each individual required under clause (i) to file a written declaration under clause (i) does not do so, the individual with the highest modified adjusted gross income (as defined in section 32(c)(5)) shall be treated as the eligible caregiver. ``(iii) Married individuals filing separately.--In the case of married individuals filing separately, the determination under this subparagraph as to whether the husband or wife is the eligible caregiver shall be made under the rules of clause (ii) (whether or not one of them has filed a written declaration under clause (i)).'' (c) Identification Requirements.-- [[Page S6697]] (1) In general.--Section 24(e) is amended by adding at the end the following new sentence: ``No credit shall be allowed under this section to a taxpayer with respect to any applicable individual unless the taxpayer includes the name and taxpayer identification number of such individual, and the identification number of the physician certifying such individual, on the return of tax for the taxable year.'' (2) Assessment.--Section 6213(g)(2)(I) of such Code is amended-- (A) by inserting ``or physician identification'' after ``correct TIN'', and (B) by striking ``child'' and inserting ``family care''. (d) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. FULL DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF- EMPLOYED INDIVIDUALS. (a) In General.--Section 162(l)(1) (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows: ``(1) Allowance of deduction.--In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents.''. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2000. ______ WELLSTONE (AND OTHERS) AMENDMENT NO. 3826 (Ordered to lie on the table.) Mr. WELLSTONE (for himself, Mr. Dodd, Mr. Landrieu, and Mr. Kohl), submitted an amendment intended to be proposed by them to the bill, H.R. 8, supra; as follows: Strike all after the first word and insert: 1. SHORT TITLE. (a) Short Title.--This Act may be cited as the ``Estate Tax Relief Act of 2000''. (b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment 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 provision of the Internal Revenue Code of 1986. TITLE I--ESTATE TAX RELIEF SEC. 101. INCREASE IN AMOUNT OF UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES. (a) In General.--The table contained in section 2010(c) (relating to applicable credit amount) is amended to read as follows: ``In the case of estates of decedentThe applicable exclusion amount is: 2001, 2002, 2003, 2004, and 2005......................$1,000,000 2006 and 2007.........................................$1,125,000 2008..................................................$1,500,000 2009 or thereafter..................................$2,000,000.'' (b) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. SEC. 102. INCREASE IN QUALIFIED FAMILY-OWNED BUSINESS INTEREST DEDUCTION AMOUNT. (a) In General.--Paragraph (2) of section 2057(a) (relating to family-owned business interests) is amended to read as follows: ``(2) Maximum deduction.-- ``(A) In general.--The deduction allowed by this section shall not exceed the sum of-- ``(i) the applicable deduction amount, plus ``(ii) in the case of a decedent described in subparagraph (C), the applicable unused spousal deduction amount. ``(B) Applicable deduction amount.--For purposes of this subparagraph (A)(i), the applicable deduction amount is determined in accordance with the following table: ``In the case of estates of decedentThe applicable deduction amount is: 2001, 2002, 2003, 2004, and 2005.......................$1,375,000 2006 and 2007..........................................$1,625,000 2008...................................................$2,375,000 2009 or thereafter....................................$3,375,000. ``(C) Applicable unused spousal deduction amount.--With respect to a decedent whose immediately predeceased spouse died after December 31, 2000, and the estate of such immediately predeceased spouse met the requirements of subsection (b)(1), the applicable unused spousal deduction amount for such decedent is equal to the excess of-- ``(i) the applicable deduction amount allowable under this section to the estate of such immediately predeceased spouse, over ``(ii) the sum of-- ``(I) the applicable deduction amount allowed under this section to the estate of such immediately predeceased spouse, plus ``(II) the amount of any increase in such estate's unified credit under paragraph (3)(B) which was allowed to such estate.'' (b) Conforming Amendments.--Section 2057(a)(3)(B) is amended-- (1) by striking ``$675,000'' both places it appears and inserting ``the applicable deduction amount'', and (2) by striking ``$675,000'' in the heading and inserting ``applicable deduction amount''. (c) Effective Date.--The amendment made by this section shall apply to the estates of decedents dying, and gifts made, after December 31, 2000. TITLE II--DEPENDENT CARE TAX CREDIT SEC. 201. EXPANSION OF DEPENDENT CARE TAX CREDIT. (a) In General.--Paragraph (2) of section 21(a) (relating to expenses for household and dependent care services necessary for gainful employment) is amended to read as follows: ``(2) Applicable percentage defined.--For purposes of paragraph (1), the term `applicable percentage' means 50 percent (40 percent for taxable years beginning after December 31, 2002, and before January 1, 2005) reduced (but not below 20 percent) by 1 percentage point for each $1,000 (or fraction thereof) by which the taxpayer's adjusted gross income for the taxable year exceeds $30,000.'' (b) Minimum Credit Allowed for Stay-At-Home Parents.-- Section 21(e) (relating to special rules) is amended by adding at the end the following: ``(11) Minimum credit allowed for stay-at-home parents.-- Notwithstanding subsection (d), in the case of any taxpayer with one or more qualifying individuals described in subsection (b)(1)(A) under the age of 1 at any time during the taxable year, such taxpayer shall be deemed to have employment-related expenses with respect to not more than 2 of such qualifying individuals in an amount equal to the greater of-- ``(A) the amount of employment-related expenses incurred for such qualifying individuals for the taxable year (determined under this section without regard to this paragraph), or ``(B) $41.67 for each month in such taxable year during which each such qualifying individual is under the age of 1.''. (c) Inflation Adjustment of Dollar Amounts.-- (1) Section 21 is amended by redesignating subsection (f) as subsection (g) and by inserting after subsection (e) the following new subsection: ``(f) Inflation Adjustment.--In the case of any taxable year beginning in a calendar year after 2001, the $30,000 amount contained in subsection (a), the $2,400 amount in subsection (c), and the $41.67 amount in subsection (e)(11) shall be increased by an amount equal to-- ``(1) such dollar amount, multiplied by ``(2) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting `calendar year 2000' for `calendar year 1992' in subparagraph (B) thereof. If the increase determined under the preceding sentence is not a multiple of $50 ($5 in the case of the amount in subsection (e)(11)), such amount shall be rounded to the next lowest multiple thereof.'' (2) Paragraph (2) of section 21(c) is amended by striking ``$4,800'' and inserting ``twice the dollar amount applicable under paragraph (1)''. (3) Paragraph (2) of section 21(d) is amended by striking ``less than--'' and all that follows through the end of the first sentence and inserting ``less than \1/12\ of the amount which applies under subsection (c) to the taxpayer for the taxable year.'' (d) Credit Allowed Based on Residency in Certain Cases.-- Subsection (e) of section 21 is amended by adding at the end the following new paragraph: ``(12) Credit allowed based on residency in certain cases.--In the case of a taxpayer-- ``(A) who does not satisfy the household maintenance test of subsection (a) for any period, but ``(B) whose principal place of abode for such period is also the principal place of abode of any qualifying individual, then such taxpayer shall be treated as satisfying such test for such period but the amount of credit allowable under this section with respect to such individual shall be determined by allowing only \1/12\ of the limitation under subsection (c) for each full month that the requirement of subparagraph (B) is met.'' (e) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 202. DEPENDENT CARE TAX CREDIT MADE REFUNDABLE. (a) In General.--Part IV of subchapter A of chapter 1 (relating to credits against tax) is amended-- (1) by redesignating section 35 as section 36, and (2) by redesignating section 21 as section 35. (b) Advance Payment of Credit.--Chapter 25 (relating to general provisions relating to employment taxes) is amended by inserting after section 3507 the following: ``SEC. 3507A. ADVANCE PAYMENT OF DEPENDENT CARE CREDIT. ``(a) General Rule.--Except