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Bill· SS. 1998 (99th)open
United States · United States Congress · 20 December 1985
Amends the Internal Revenue Code to provide for the repayment of the increased excise tax imposed on fuel used in diesel-powered automobiles or light trucks. Sets the amount of such repayment at six cents per gallon. Reduces such repayment amount by repayments payable as of December 31, 1984.
Bill· HRH.R. 4008 (99th)referred
United States · United States Congress · 20 December 1985
Rural Enterprise Zone Development and Employment Act of 1985 - Title I: Designation of Enterprise Zones - Amends the Internal Revenue Code to provide for the designation of enterprise zones by the Secretary of Housing and Urban Development. Specifies that States and local governments shall nominate areas for such designation. Limits to 100 the total number of areas which may be designated as enterprise zones. Limits the period during which such designations shall remain in effect to a maximum of 25 years. Specifies that the Secretary may designate such zones only if: (1) the area is within the jurisdiction of the nominating local government; (2) the boundary of the area is continuous; (3) the area has a population of at least 1,000 or is entirely within an Indian reservation; and (4) the area meets specified unemployment and poverty requirements. Requires nominating local governments, as a condition of the Secretary's designation, to agree in writing to follow a course of action which may include reducing tax rates, improving local services, and providing job training to residents of the area. Terminates the authority of the Secretary to designate rural enterprise zones on June 30, 1987, or two years after the publication of regulations pertaining to such zones, whichever is later. Describes areas to which preference shall be given in deciding to designate enterprise zones. Requires the Secretary to report to the Congress every four years on the effects of such enterprise zones' designation in accomplishing the purposes of this Act. Requires that any property tax reduction effected by a local government under the terms of this Act be disregarded for purposes of determining the eligibility of a State or local government for Federal assistance or benefits. States that the designation of an enterprise zone shall not give displaced persons from such an area any rights or benefits under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970. Provides that such enterprise zones shall be treated for all purposes under Federal law as labor surplus areas. Title II: Federal Income Tax Incentives - Subtitle A: Credits for Employers and Employees - Allows employers located in rural enterprise zones a nonrefundable income tax credit for increased employment expenditures and employment of the disadvantaged. Allows a three-year carryback and a 15-year carryover of such credit. Sets the amount of such credit at ten percent of the increase in payroll (taking into account $17,500 in wages per year per employee) plus a specified percentage of wages paid to certain disadvantaged workers through the first 20 years of the enterprise zone designation. Phases out such credit in the last four years of the enterprise zone designation. Disallows a deduction for the portion of wages taken into account for such credit. Allows an income tax credit to enterprise zone employees for five percent of wages earned (taking into account up to $10,500 per year). Phases out such credit in the last four years of the enterprise zone designation. Subtitle B: Credits for Investment in Tangible Property in Enterprise Zones - Allows businesses an additional investment tax credit for investments made in certain enterprise zone construction property located in enterprise zones. Limits such credit to ten percent for new enterprise zone construction property, including rental property. Requires that the property subject to such credit be located in an enterprise zone, be predominantly used in the zone, be either constructed, reconstructed, renovated, etc. during the period of zone designation or acquired during such period, and not be acquired from relatives or related corporations. Requires the recapture of such credit upon the early disposition of the property. Provides for a phase-out of the enterprise zone tax credit as the enterprise zone ends. Provides for an adjustment to the basis of the enterprise zone construction property to reflect the enterprise zone tax credit. Subtitle C: Nonrecognition of Qualified Enterprise Zone Capital Gain Where Acquisition of Enterprise Zone Business Property - Provides for the nonrecognition of capital gain on the sale of property where, within the one-year period beginning on the date of such sale, qualified replacement property is acquired by the taxpayer, to the extent the gain from the sale does not exceed the cost of the replacement property. Defines "qualified replacement property" as any personal property used predominantly in an enterprise zone in the active conduct of a trade or business within the enterprise zone, any real property located in the enterprise zone used in the active conduct of a trade or business, or any corporation, partnership, or other entity if, for the three most recent taxable years of such entity ending before the date of the purchase of such interest, such entity was a qualified business. Sets forth special rules for the operation of this provision. Requires the basis of the replacement property to be reduced by an amount equal to the amount of gain not recognized on the sale of such other property. Extends the period for the statute of limitations relating to the assessment of tax with respect to the sale of property involving the nonrecognition provisions. Provides that the holding period for the qualified replacement property shall include the period for which the property sold or exchanged had been held as of the date of the sale or exchange. Subtitle D: Deduction for Purchase of Enterprise Stock - Allows a taxpayer to deduct the aggregate amount paid during the taxable year for the purchase of enterprise stock on the original issue of such stock by a qualified issuer. Limits the maximum amount of such deduction to $100,000 a year. Requires that the $100,000 limit must be allocated among the members of a controlled group. Requires the pro rata allocation of the $100,000 limit among the stock purchased where the aggregate amount of stock purchased exceeds the $100,000 limitation. Requires that the gain from the disposition of the stock shall be treated as ordinary income. Provides a formula for calculating such gain. Provides that interest is charged on the disposition of such stock if such disposition occurs before the end of the three-year period beginning on the date the stock was purchased. Provides that where an issuer ceases to be a qualified issuer of enterprise stock before the close of the fifth taxable year after the date the stock was issued, the taxpayer must include in income the amount of the deduction allowed with respect to such stock plus interest on the aggregate decrease in tax of the taxpayer resulting from the deduction allowed with respect to such stock. Sets forth special rules with respect to such stock. Requires the basis of such stock to be reduced by the amount of the deduction allowed with respect to such stock. Subtitle E: Rules Relating to Industrial Development Bonds - Provides that limitations on the cost recovery deductions for property financed with tax-exempt industrial development bonds shall not apply to enterprise zone property. Provides that the termination of the small issue exemption shall not apply to industrial development bonds the proceeds of which are used to finance facilities in such enterprise zones. Subtitle F: Ordinary Loss Deduction for Securities of Enterprise Zone Business Which Become Worthless - Permits an ordinary loss deduction for securities of enterprise zone businesses which become worthless during the taxable year. Subtitle G: Increase in Research Credit for Research Conducted in Enterprise Zones - Increases the tax credit for increasing research activities to 37 and one-half percent (currently, 25 percent) for research conducted in enterprise zones. Subtitle H: Sense of the Congress with Respect to Tax Simplification - Expresses the sense of the Congress that the Internal Revenue Service should simplify the administration and enforcement of any provision of the Internal Revenue Code affected by this Act. Subtitle I: Regulations - Directs the Secretary of the Treasury to issue regulations to carry out the provisions of this Act not later than six months after the date of enactment. Title III: Regulatory Flexibility - Revises the definition of "small entity" for purposes of the analysis of regulatory functions to include qualified business, government, and nonprofit enterprises operating within enterprise zones. Authorizes Federal agencies, upon request by a designating government, to waive or modify rules and regulations which pertain to the carrying out of projects or activities within an enterprise zone. Requires agencies to approve such request if the resulting benefits of job creation, community development, or economic revitalization outweigh the public interest in continuation of the rule unchanged. Disallows waiver or modification of a rule that would directly violate a statutory requirement (including the Fair Labor Standards Act) or which would present a danger to the public health and safety. Provides that such waivers or modifications of a rule shall remain in effect as long as the zone designations. Amends the Department of Housing and Urban Development Act to direct the Secretary of Housing and Urban Development to promote the coordination of all enterprise zone programs and consolidate all periodic reports required under such programs into one summary report. Title IV: Establishment of Foreign-Trade Zones in Enterprise Zones - Requires the Foreign-Trade Board to consider on a priority basis and expedite the processing of applications for the establishment of foreign-trade zones within enterprise zones. Requires the Secretary of the Treasury to give priority to, and expedite applications for, the establishment of ports of entry necessary to establish such zones. States that, to the maximum extent practicable, foreign-trade zones should be established within enterprise zones.
Bill· SS. 1991 (99th)reported
United States · United States Congress · 19 December 1985
Amends the Native American Programs Act of 1974 to authorize appropriations through 1990 for Native American projects under the Act.
Bill· SS. 1997 (99th)open
United States · United States Congress · 19 December 1985
Amends the Internal Revenue Code to impose an excise tax on: (1) the first sale within the United States of any crude oil or any refined petroleum product imported into the United States; and (2) the use within the United States of any crude oil or any refined petroleum product imported into the United States if no such tax has been imposed prior to such use. Exempts from such tax: (1) crude oil or refined petroleum products purchased for export; and (2) process fuels, liquid natural gas, heating oil for household use or residual fuel oil and topped crude oil imported for further refining. Sets the rate of such tax as the difference between $22 per barrel and the average world price of crude oil per barrel.
Resolution· SRESS.Res. 281 (99th)passed
United States · United States Congress · 19 December 1985
Expresses the sense of the Senate that the effective date of any fundamental tax reform legislation should generally be January 1, 1987, while recognizing that appropriate transition rules may be necessary to avoid unintended adverse effects and recognizing further that retroactive effective dates may be necessary to extend certain provisions which expire before January 1, 1987.
Law· HRH.R. 4006 (99th)enacted
United States · United States Congress · 19 December 1985
Title I: Fifth Emergency Extension Act of 1985-86 - Extends until March 15, 1986: (1) the trade adjustment assistance program; (2) borrowing authority under the Railroad Unemployment Insurance Act; and (3) Medicare hospital and physician payment rate provisions. Title II: Miscellaneous Tax Provisions Extension Act of 1985 - Miscellaneous Tax Provisions Extension Act of 1985 - Amends the Internal Revenue Code to extend the income tax credit for increasing research activities from December 31, 1985, until March 15, 1986. Extends the targeted jobs income tax credit from December 31, 1985, until March 15, 1986. Extends the authorization of appropriations for administrative and publicity expenses through fiscal year 1986. Extends from December 31, 1985, until March 16, 1986, income tax exclusions for educational assistance programs and group legal plans. Extends from December 31, 1985, until March 15, 1986, provisions relating to the awarding of costs to a prevailing taxpayer in Federal tax cases. Extends the increase in the excise tax on cigarettes until March 16, 1986. Extends from December 31, 1985, until March 15, 1986, the moratorium on net operating loss carryover rules. Extends the special rules concerning the allocation of research and experimental expenditures until March 16, 1986. Extends until March 15, 1986, the special rules relating to the filing of tax returns and payment of taxes by spouses of individuals missing in action during the Vietnam conflict. Extends until March 16, 1986, the moratorium on the issuance of regulations relating to the tax treatment of faculty housing by an educational institution. Extends from December 31, 1985, until March 16, 1986, the income tax deduction for expenditures to remove architectural and transportation barriers to the handicapped and elderly. Extends until March 15, 1986, the residential energy tax credit for solar renewable energy source expenditures. Extends the energy investment tax credit for solar and geothermal property until March 15, 1986. Extends until March 15, 1986, the reduction in the excise tax for fuel used by taxicabs.
Bill· HRH.R. 3992 (99th)open
United States · United States Congress · 19 December 1985
Miscellaneous Tax Provisions Extension Act of 1985 - Amends the Internal Revenue Code to extend the income tax credit for increasing research activities from December 31, 1985, until July 31, 1986. Reduces the amount of such credit from 25 percent to 20 percent of such expenditures. Allows such credit for basic research payments to qualified organizations. Revises certain definitions and special rules related to such credit. Extends the targeted jobs income tax credit from December 31, 1985, until July 31, 1986. Reduces the amount of such credit from the sum of 50 percent of first year wages and 25 percent of second year wages to 40 percent of first year wages. Requires that an individual must be employed for at least 14 days in order to be taken into account for such credit. Extends from December 31, 1985, until August 1, 1986, the income tax exclusions for educational assistance programs and group legal plans. Extends from December 31, 1985, until July 31, 1986, provisions relating to the awarding of attorney's fees to a prevailing taxpayer in Federal tax cases. Extends the increase in the excise tax on cigarettes until August 1, 1986. Extends from December 31, 1985, until July 31, 1986, the moratorium of specified net operating loss carryover rules. Revises special rules concerning the allocation of research and experimental expenditures to income from sources within the United States. Extends such rules from August 1, 1985, until August 1, 1986. Extends until July 31, 1986, the special rules relating to the filing of tax returns and payment of taxes by spouses of individuals missing in action during the Vietnam conflict. Provides a limited tax exclusion for the value of lodging furnished by certain educational institutions to employees. Specifies that such exclusion shall be effective until August 1, 1986. Extends from December 31, 1985, until August 1, 1986, the income tax deduction for expenditures to remove architectural and transportation barriers to the handicapped and elderly. Extends until August 1, 1986, the residential energy tax credit for solar renewable energy source expenditures. Extends the energy investment tax credit for solar and geothermal property until July 31, 1986. Extends until July 31, 1986, the reduction in the excise tax on fuel used by taxicabs.
Bill· HRH.R. 3999 (99th)referred
United States · United States Congress · 19 December 1985
Repeals provisions of the Internal Revenue Code relating to the reporting by employers of tips in the case of certain food and beverage establishments.
Resolution· HRESH.Res. 349 (99th)passed
United States · United States Congress · 19 December 1985
Provides, with respect to the consideration of H.R. 3128 (spending and revenue provisions), that the House shall be considered to have: (1) rejected the conference report on such bill; (2) receded from its amendment to the Senate amendment; and (3) concurred in the Senate amendment with an amendment.
Bill· SS. 1974 (99th)open
United States · United States Congress · 18 December 1985
Unitary Tax Repealer Act - Prohibits any State from imposing corporate income taxes on a worldwide unitary basis, unless: (1) the taxpayer fails to comply with certain Federal reporting requirements; or (2) neither the taxpayer nor the government of the relevant foreign country provides the State certain information relating to the income of the taxpayer. Limits the State taxation of dividends received by U.S. companies from foreign corporations. Sets forth certain definitions. Requires certain multistate and multinational corporations to file informational returns within 180 days of the due date of the Federal income tax return disclosing certain information relating to the State taxation of corporate income such as: (1) the corporation's income tax liability to each State in which it is liable to pay income tax; (2) its income subject to tax in each State; and (3) the method of calculation by which the reporting corporation computed and allocated its income subject to tax by each state. Imposes a $1,000 penalty for failure to file the informational return. Increases the penalty where the failure to file continues after the taxpayer has been notified of such requirement. Sets a maximum penalty for failure to file at $24,000. Permits the disclosure of certain tax information to a State tax agency under certain conditions. Sets forth certain procedures and restrictions relating to the information disclosure.
Bill· SS. 1978 (99th)open
United States · United States Congress · 18 December 1985
Recovery Act for Mortgage and Other Asset-Backed Securities - Amends the Internal Revenue Code to provide that arrangements for the issuance of "pass-through securities" (i.e., mortgage backed securities) in one or more classes shall be taxed as grantor trusts and not as corporations. Requires that the interests in the financial instruments represented by the pass-through securities be established prior to the initial issuance of the pass-through securities and, pursuant to the terms of the pass-through securities, such interests may not be changed. Requires that the pool of assets in which the holders of pass-through securities own an interest must be fixed prior to the date of the first payment to security holders, except for a certain two-year period. Sets forth various definitions.
Bill· HRH.R. 3980 (99th)open
United States · United States Congress · 18 December 1985
Prohibits any State from imposing corporate income taxes on a worldwide unitary basis, unless (1) the taxpayer fails to comply with certain Federal reporting requirements; or (2) neither the taxpayer nor the government of the relevant foreign country provides the State certain information relating to the income of the taxpayer. Limits the State taxation of dividends received by U.S. companies from foreign corporations. Sets forth certain definitions. Requires certain multistate and multinationalal corporations to file informational returns within 180 days of the due date of the federal income tax return disclosing certain information relating to the State taxation of corporate income such as: (1) the corporation's income tax liability to each State in which it is liable to pay income tax; (2) its income subject to tax in each State; and (3) the method of calculation by which the reporting corporation computed and allocated its income subject to tax by each state. Imposes a $1,000 penalty for failure to file the informational return. Increases the penalty where the failure to file continues after the taxpayer has been notified of such requirement. Sets a maximum penalty for failure to file at $24,000. Permits the disclosure of certain tax information to a State tax agency under certain conditions. Sets forth certain procedures and restrictions relating to the information disclosure.
Bill· HRH.R. 3979 (99th)open
United States · United States Congress · 18 December 1985
Miscellaneous Provisions Extension Act of 1985 - Title I: Revenue Provisions - Amends the Internal Revenue Code to extend the income tax credit for increasing research activities from December 31, 1985, until July 31, 1986. Reduces the amount of such credit from 25 percent to 20 percent of such expenditures. Allows such credit for basic research payments to qualified organizations. Revises certain definitions and special rules related to such credit. Extends the targeted jobs income tax credit from December 31, 1985, until July 31, 1986. Reduces the amount of such credit from the sum of 50 percent of first year wages and 25 percent of second year wages to 40 percent of first year wages. Requires that an individual must be employed for at least 14 days in order to be taken into account for such credit. Extends from December 31, 1985, until August 1, 1986, the income tax exclusions for educational assistance programs and group legal plans. Extends from December 31, 1985, until July 31, 1986, provisions relating to the awarding of attorney's fees to a prevailing taxpayer in Federal tax cases. Extends the increase in the excise tax on cigarettes until August 1, 1986. Extends from December 31, 1985, until July 31, 1986, the moratorium of specified net operating loss carryover rules. Revises special rules concerning the allocation of research and experimental expenditures to income from sources within the United States. Extends such rules from August 1, 1985, until August 1, 1986. Extends until July 31, 1986, the special rules relating to the filing of tax returns and payment of taxes by spouses of individuals missing in action during the Vietnam conflict. Provides a limited tax exclusion for the value of lodging furnished by certain educational institutions to employees. Specifies that such exclusion shall be effective until August 1, 1986. Extends from December 31, 1985, until August 1, 1986, the income tax deduction for expenditures to remove architectural and transportation barriers to the handicapped and elderly. Extends until August 1, 1986, the residential energy tax credit for solar renewable energy source expenditures. Extends the energy investment tax credit for solar and geothermal property until July 31, 1986. Extends until July 31, 1986, the reduction in the excise tax for fuel used by taxicabs. Title II: Other Provisions - Extends the trade adjustment assistance program until July 31, 1986. Extends specified tariff suspensions until August 1, 1986. Extends borrowing authority under the Railroad Unemployment Insurance Act until July 31, 1986. Extends certain Medicare hospital payment rate provisions until July 31, 1986. Extends certain Medicare physician payment rate provisions until January 31, 1986. Extends certain Medicare provisions relating to prevailing charge levels for physician's services and customary charges for physician's services until December 31, 1986.
Law· HRH.R. 3981 (99th)enacted
United States · United States Congress · 18 December 1985
Extends the increase in the excise tax on cigarettes from December 19, 1985, to December 20, 1985.
Resolution· HRESH.Res. 348 (99th)passed
United States · United States Congress · 18 December 1985
Waives points of order against the consideration of H.J. Res. 465 (continuing appropriations).
Bill· SS. 1959 (99th)open
United States · United States Congress · 17 December 1985
Secondary Market Tax Amendments of 1986 - Amends the Internal Revenue Code to revise the original issue discount rules concerning mortgage related debt. Provides that the original issue discount of such debt shall be determined by reference to changes in the obligation's adjusted issue price. Sets forth the method of calculating such adjusted issue price. Authorizes the issuance of collateralized mortgage securities (CMS) as multiple-class mortgage related securities. Provides that the issuance of a CMS shall be treated as a sale of the loans backing the securities. Provides that the holder, not the issuer or issue, shall be subject to tax. Sets forth rules for the taxation of regular interest and residual interests in such CMSs. Sets forth basis adjustment rules for the holders of a CMS. Provides that the sale or exchange of an interest in a CMS shall be treated as a gain or loss as if the interest were debt obligation. Sets forth definitions and rules for the tax treatment of outside discount and premium related to a CMS. Specifies prohibited transactions and imposes a penalty tax on such transactions. Permits the sale of an issue's assets, and the distribution of cash to holders of interests, in a qualifying complete liquidation without incurring tax at the issue level. Sets forth compliance and administrative provisions.
Bill· SS. 1964 (99th)open
United States · United States Congress · 17 December 1985
Extends through FY 1988 the revenue sharing program for local governments.
Bill· SS. 1950 (99th)open
United States · United States Congress · 16 December 1985
Amends the Internal Revenue Code to disallow an income tax deduction for any amounts paid or incurred to advertise any tobacco product. Defines "tobacco products" as cigarettes, cigars, smokeless tobacco, pipe tobacco, or any similar tobacco product.
Bill· HRH.R. 3948 (99th)referred
United States · United States Congress · 16 December 1985
Amends the Internal Revenue Code to extend for two years from 1985 to 1987 the income tax exclusion for amounts received under qualified group legal services plans.
Bill· HRH.R. 3950 (99th)referred
United States · United States Congress · 16 December 1985
Amends the Internal Revenue Code to disallow an income tax deduction for any tobacco and tobacco product sale promotion expenses. Defines "tobacco and tobacco products" as any small cigarette, large cigarette, cigar, or smokeless tobacco product, including snuff and chewing tobacco.
Bill· HRH.R. 3947 (99th)referred
United States · United States Congress · 16 December 1985
Amends the Internal Revenue Code to provide that no amount shall be included in the gross income of a beneficiary by reason of payment of premiums by an employer for a qualified takeover annuity contract or by receipt by the beneficiary of a qualified takeover annuity contract. Defines "qualified takeover annuity contract." Requires all individuals who forfeited their benefits in the qualified benefit plan of the corporation acquired to be given a qualified takeover annuity contract.
Bill· HRH.R. 3943 (99th)referred
United States · United States Congress · 16 December 1985
Amends the Internal Revenue Code to extend from two to five years the time for filing of an application for an exemption from the social security tax on self-employment income by ministers and other members of religious orders.
Law· HJRESH.J.Res. 491 (99th)enacted
United States · United States Congress · 16 December 1985
Extends the deadline for availability of certain continuing appropriations for FY 1986 until December 19, 1985.
Bill· HJRESH.J.Res. 489 (99th)referred
United States · United States Congress · 16 December 1985
Extends the deadline for availability of certain continuing appropriations for FY 1986 until December 24, 1985.
Bill· HJRESH.J.Res. 490 (99th)referred
United States · United States Congress · 16 December 1985
Extends the deadline for availability of certain continuing appropriations for FY 1986 until December 20, 1985.
Bill· HJRESH.J.Res. 486 (99th)referred
United States · United States Congress · 16 December 1985
Extends the deadline for availability of certain continuing appropriations for FY 1986 until December 1985.
Resolution· HRESH.Res. 344 (99th)passed
United States · United States Congress · 16 December 1985
Sets forth the rule for the consideration of H.J. Res. 491 (continuing appropriations).
Bill· SS. 1932 (99th)open
United States · United States Congress · 12 December 1985
National Competitiveness Education Act - Title I: Excise Tax on Television Sets - Amends the Internal Revenue Code to impose an excise tax upon the sale of any television set by the manufacturer, producer, or importer of television sets. Sets the rate of such tax at two percent of the sales price. Establishes in the Treasury the "National Competitiveness Education Trust Fund" (trust fund). Transfers to such trust fund revenues raised by such television set excise tax. Title II: Programs Funded by National Competitiveness Education Trust Fund - Part A: National Mathematics and Science Teachers Scholarships - Authorizes the Secretary of Education to make grants to States from funds allotted from such trust fund in order to provide mathematics and science teachers scholarships. Requires States receiving such grants to award such scholarships to secondary and postsecondary students who demonstrate an interest in a teaching career in the fields of mathematics or science at the elementary school or secondary school level. Sets forth standards and procedures for the selection of scholarship recipients. Limits the amount of such scholarships to $5,000 for each academic year (not to exceed four years) of postsecondary education. Requires recipients of such scholarships to teach mathematics or science in a public elementary or secondary school for at least two years after completing the postsecondary education for which the scholarship was awarded. Part B: Mathematics and Science Teachers Summer Fellowships - Authorizes the Secretary to make grants to States from funds allotted from such trust fund in order to provide fellowships for summer study to elementary and secondary school mathematics and science teachers. Sets forth standards and procedures for the selection of fellowship recipients. Limits the amount of such fellowships to $5,000 per summer (not to exceed two summers). Requires recipients of such fellowships to teach mathematics or science in a public elementary or secondary school for at least two years following the award of such a fellowship. Part C: General Provisions - Sets forth standards and procedures for the authorization and allocation of funds from such trust fund. Sets forth defnitions.
Bill· HRH.R. 3930 (99th)open
United States · United States Congress · 12 December 1985
Amends the Internal Revenue Code with respect to the exclusion from income of certain fringe benefits to provide that parents shall be accorded the same treatment as spouses and dependent children of employees.
Bill· HRH.R. 3937 (99th)open
United States · United States Congress · 12 December 1985
Removes the prohibition on withholding, without the employees' consent, city or county taxes from the pay of an employee who is not a resident of, or whose regular place of Federal employment is not within, the State in which such city or county is located.
Bill· HRH.R. 3928 (99th)referred
United States · United States Congress · 12 December 1985
Amends the Internal Revenue Code to allow a refundable income tax credit for expenses for household and dependent care services necessary for employment. Allows an additional investment tax credit for dependent care center property. Defines dependent care center property.
Bill· HRH.R. 3927 (99th)referred
United States · United States Congress · 12 December 1985
Elderly Veterans Care Act of 1985 - Amends the Internal Revenue Code to allow an income tax credit for elderly care expenses paid for the care of a qualifying veteran. Sets the amount of such credit at 30 percent of such expenses reduced by one percent for each $2,000 by which the adjusted gross income of the taxpayer exceeds $10,000. Disallows such credit for a taxpayer with an adjusted gross income of $50,000 or more ($25,000 or more in the case of a married individual filing a separate return). Limits the amount of elderly care expenses which may be taken into account for such credit to an aggregate of $7,000 and not more than $3,500 for any one qualifying veteran. Defines a "qualifying veteran" as an individual who is a veteran related to the taxpayer and who is at least 65 years of age and has a family income of $15,000 or less for the taxable year. Defines "qualified elderly care expenses" as payments by the taxpayer for home health agency services, homemaker services, adult day care, respite care, or health care equipment and supplies which are provided to the veteran by an organization or individual not related to the taxpayer or the veteran and which are not compensated for by insurance or otherwise.
Bill· HJRESH.J.Res. 478 (99th)referred
United States · United States Congress · 12 December 1985
Constitutional Amendment - Prohibits the Government's expenditures from exceeding its revenues in any fiscal year, except in cases of national emergency as determined by a three-fifths vote of the Congress. Prohibits total Government expenditures during a fiscal year from exceeding 20 percent of the gross national product for the preceding calendar year.
Bill· HJRESH.J.Res. 477 (99th)referred
United States · United States Congress · 12 December 1985
Constitutional Amendment - Prohibits the Government's expenditures from exceeding its revenues in any fiscal year, except in cases of national emergency as determined by a three-fifths vote of the Congress.
Law· HJRESH.J.Res. 476 (99th)enacted
United States · United States Congress · 12 December 1985
Extends the deadline for availability of certain continuing appropriations for FY 1986 until December 16, 1985.
Bill· HRH.R. 3912 (99th)referred
United States · United States Congress · 11 December 1985
Amends the Internal Revenue Code to eliminate the age requirement for eligibility for the one-time exclusion of gain from the sale of a principal residence by an individual.
Bill· SS. 1921 (99th)open
United States · United States Congress · 10 December 1985
Requires that the economic assumptions pertaining to inflation that are used for major weapon system programs of the Department of Defense included in the annual budget transmitted by the President to the Congress be the same as those used for all other programs, projects, and activities included in such budget.
Bill· SS. 1920 (99th)open
United States · United States Congress · 10 December 1985
Amends the Internal Revenue Code to extend the termination of the environmental excise tax on petroleum (Superfund taxes) from September 30, 1985, to March 31, 1986.
Bill· HRH.R. 3886 (99th)referred
United States · United States Congress · 10 December 1985
Requires that the economic assumptions pertaining to inflation that are used for major weapon system programs of the Department of Defense included in the annual budget transmitted by the President to the Congress be the same as those used for all other programs, projects, and activities included in such budget.
Resolution· HRESH.Res. 335 (99th)passed
United States · United States Congress · 10 December 1985
Expresses the sense of the House of Representatives that the chairman and ranking member of the House Committee on Ways and Means are hereby instructed to make public not later than December 31, 1985, an agreed upon statement which would have the effect of postponing the effective date until January 1987, of those selected items of tax reform the delay of which would reduce the adverse economic effects which might otherwise be caused by the uncertainty as to the date of final enactment, while still recognizing the need for some retroactive dates for certain expiring provisions.
Bill· SS. 1912 (99th)open
United States · United States Congress · 9 December 1985
Amends the Deficit Reduction Act of 1984 to extend from August 1, 1985, until June 30, 1986, the special rules concerning the allocation of research and experimental expenditures to income from sources within the United States. Amends the Internal Revenue Code to extend from December 31, 1985, until June 30, 1986, the income tax credit for increased research and experimental expenditures. Extends from December 31, 1985, until June 30, 1986, the income tax deduction for expenditures to remove architectural and transportation barriers to the handicapped and elderly. Extends from December 31, 1985, until June 30, 1986, the moratorium on net operating loss carryover rules. Extends from January 1, 1986, until July 1, 1986, the moratorium on the issuance of regulations relating to faculty housing. Extends the targeted jobs income tax credit from December 31, 1985, until June 30, 1986. Extends the authorization for appropriations for administrative and publicity expenses through FY 1986. Extends from December 31, 1985, through June 30, 1986, provisions relating to the awarding of attorney's fees to a prevailing taxpayer in a Federal tax case. Extends from December 31, 1985, until June 30, 1986, the limited income tax exclusion for employer-provided educational assistance. Extends from December 31, 1985, until June 30, 1986, the income tax exclusion for amounts received under qualified group legal services plans. Extends from January 1, 1986, until July 1, 1986, the income tax exclusion for certain employer-provided commuting transportation. Extends from December 31, 1985, until June 30, 1986, the limited exclusion of dividends from a public utility that are reinvested in common stock of the utility. Extends from December 31, 1985, (until June 30, 1986, the investment tax credit for specified types of energy property. Extends from December 31, 1985, until June 30, 1986, the residential energy income tax credit. Extends from December 31, 1985, until June 30, 1986, social security coverage of retired Federal judges on active duty.
Bill· HRH.R. 3881 (99th)open
United States · United States Congress · 9 December 1985
Amends the Economic Recovery Tax Act of 1981 to extend for one year, from January 1, 1986 to January 1, 1987, the termination of the tax credit for increasing research activities.
Bill· HRH.R. 3879 (99th)referred
United States · United States Congress · 9 December 1985
Tax Fairness and Reform Act of 1985 - Redesignates the Internal Revenue Code of 1954 as the Internal Revenue Code of 1985. Title I: Individual Income Tax Provisions- Subtitle A: Rate Reductions; Increase in Standard Deduction and Personal Exemptions - Reduces the tax rates and consolidates the tax brackets into four brackets, consisting of a 15 percent, a 25 percent, a 35 percent, and a 37 percent tax bracket. Requires the Secretary of the Treasury (Secretary) to prescribe tax tables annually which will provide for a cost-of-living adjustment to prevent any tax increases resulting from inflation. Increases the amounts of the standard deduction to: (1) $4,600 for joint returns or surviving spouses; (2) $4,026 for head of households; (3) $2,828 for single individuals; and (4) $2,300 for married individuals filing separate returns. Provides for an annual inflation adjustment to be made to the standard deduction. Provides certain rules for the standard deduction. Allows an additional amount for the aged and the blind. Raises the personal exemption amount to $2,000. Provides for an annual inflation adjustment for years after 1986 for the amount of the personal exemption. Provides that the exemption deduction shall not reduce tax by an amount exceeding 25 percent of the exemption amount. Phases out the exemption for taxpayers whose taxable income exceeds $100,000. Makes certain technical amendments. Subtitle B: Provisions Related to Tax Credits - Increases the earned income credit percentage to 14 percent and the maximum dollar limitation of earned income to which the percentage applies to $7,143. Increases the income level at which the earned income credit is phased out. Repeals the tax credit for contributions to candidates for public office. Makes certain other technical amendments pertaining to various tax credits. Subtitle C: Provisions Related to Exclusions - Allows a $5,000 limit on the exclusion of amounts received by an employee for dependent care assistance. Requires unemployment compensation to be included in the gross income of an individual. Provides that gross income does not include any amount received as a qualified scholarship grant by an individual who is a candidate for a degree at an educational organization. Sets forth other rules and limitations relating to scholarship grants and tuition reduction arrangements. Provides that employee gifts are not excludible from gross income. Subtitle D: Provisions Related to Deductions - Repeals the deduction for two-earner married couples. Provides that miscellaneous itemized deductions shall be allowed for the taxable year only to the extent that the aggregate of such deductions exceeds one percent of adjusted gross income. Permits the costs paid in connection with the administration of an estate or trust to be allowed as a deduction in computing the adjusted gross income of the estate or trust. Provides that nonreimbursed business expenses of employees are subject to the one percent floor on deductions. Makes permanent the charitable deduction for individuals who do not itemize deductions. Repeals the deduction for adoption expenses. Provides certain dollar limitations on the amount of consumer interest which may be deducted during the taxable year. Prohibits the deduction of any consumer interest on a loan incurred or continued for purchase of a foreign car. Repeals the deduction for State and local sales taxes and personal property taxes. Provides for an overall limitation on the aggregate amount of itemized deductions other than deductions for charitable contributions and qualified residence interest. Subtitle E: Miscellaneous Provisions - Repeals the income averaging provisions for figuring tax liability. Imposes certain additional restrictions and limitations on the allowance of deductions for meals, travel, and entertainment business expenses. Modifies the rules relating to the treatment of hobby loss deductions. Allows the deduction for mortgage interest and real property taxes in those cases where a parsonage allowance or military housing allowance is received. Requires certain information reporting with respect to income taxes and real and personal property taxes. Repeals the checkoff for the presidential election campaign fund contribution. Subtitle F: Effective Dates - Sets forth the effective dates for the provisions of this title. Title II: Capital Income Provisions - Subtitle A: Depreciation Provisions - Repeals the accelerated cost recovery system of depreciation and replaces such system with the incentive depreciation system for tangible property. Sets forth various rules and procedures for the operation of the incentive depreciation system. Modifies the recapture of depreciation rules relating to the gain from disposition of certain depreciable realty. Sets forth the effective dates for the new depreciation provisions, and various transitional rules. Subtitle B: Regular Investment Tax Credit - Provides that the regular investment tax credit percentage shall be five percent and shall apply only to qualified domestically produced property. Sets forth certain exceptions to this requirement. Subtitle C: Changes in Certain Rapid Amortization Provisions - Repeals the five-year amortization period for trademark and trade name expenditures. Makes permanent the depreciation deduction for expenditures to rehabilitate low-income housing. Increases to $30,000 the amount of expenditures per dwelling unit which may be taken into account in the depreciation of the expenses over the 60-month period. Subtitle D: Other Capital Related Costs - Extends the termination of the tax credit for increasing research activities for three years. Reduces the amount of the credit to 20 percent. Reduces to 20 percent the research credit for basic research payments to colleges, universities, and certain research organizations. Sets forth certain definitions and special rules relating to payments for basic research. Makes modifications in the rules concerning the investment tax credit for rehabilitation expenditures. Subtitle E: Capital Gains and Losses - Retains the maximum 20 percent capital gains tax. Retains the maximum 32 percent tax on commodity future contract gains. Establishes provisions for the indexing of certain assets for purposes of determining gain or loss. Sets forth such procedures. Repeals the provisions relating to the disposal of coal or domestic iron ore with a retained economic interest therein. Subtitle F: Provisions Relating to Oil and Gas - Modifies the percentage depletion percentages for independent producers and royalty owners. Disallows the use of percentage depletion with respect to lease bonus amounts. Phases out the allowance of percentage depletion deductions with respect to geothermal deposits. Allows an exemption from the windfall profits tax for certain crude oil exchanged for residential fuel oil. Makes permanent the reduced excise tax rate on fuel used by taxicabs for providing taxicab services. Subtitle G: Treatment of Hard Minerals - Reduces the percentage depletion deduction with respect to certain hard minerals. Sets forth rules pertaining to the tax treatment of development and mining exploration expenditures. Title III: Corporate Provisions - Subtitle A: Corporate Rate Reductions - Reduces the tax rates on corporate income and establishes three tax brackets ranging from 15 percent to 33 percent, with the middle bracket being 25 percent. Requires an additional amount of tax where the taxable income of the corporation is in excess of $100,000. Provides for a phasein of the reduction in the tax rates during the period from 1986 through 1990. Provides for an alternative tax for corporations which have a net capital gain for any taxable year. Computes this tax by computing the sum of the tax on the taxable income reduced by the net capital gain, plus 28 percent of the pre-1986 net capital gain, plus the applicable percentage of timber, iron, or coal capital gain, plus 33 percent of the net capital gains. Reduces the dividend received deduction over a period of years from 1986 through 1991. Reduces the dividend received deduction percentage over this period from 85 percent to 75 percent. Repeals the partial exclusion of dividends received by individuals. Prohibits the deduction of expenses incurred by a corporation in connection with the redemption of its stock. Subtitle B: Limitation on Net Operating Loss Carryforward and Excess Credit Carryforwards - Provides a limitation of net operating loss carryforwards. Sets forth rules and procedures for computing such limitation on net operating loss carryforwards. Establishes special limitation on certain excess credits for certain taxable years. Subtitle C: Recognition of Gain and Loss on Distributions of Property in Liquidation - Requires the recognition of gain or loss to a corporation on the distribution of property in complete liquidation as if such property were sold to the distributee at fair market value except for certain corporate liquidations. Provides certain exceptions to this rule of recognition of gain or loss. Provides for the nonrecognition of gain or loss on the sale or exchange of property by a corporation in certain types of liquidation proceedings. Sets forth rules and exceptions for such nonrecognition treatment. Provides certain technical amendments regarding the liquidation provisions. Sets forth effective dates for these provisions relating to gain or loss recognition in liquidations. Subtitle D: Real Estate Investment Trusts - Makes modifications in the rules affecting a real estate investment trust's (REIT) earnings and profits under the depreciation provisions. Exempts REITs from the special rules relating to corporate tax preference items. Expands the types of sales which may be made by a REIT without the imposition of the 100 percent prohibited transaction tax. Modifies the rule relating to the exclusion of amounts received with respect to rental property that a REIT operates other than through an independent contractor. Makes changes in the standards for disqualifications of a REIT as a personal holding company. Permits a REIT to have a wholly owned subsidiary. Modifies the present rules relating to REITs which disqualify income in the form of rents or interests based on net income or profits of the tenant or borrower. Makes changes in the rule regarding the payment of capital gain dividends by REITs that have net operating loss carryovers from prior years. Permits net losses from prohibited transactions to be taken into account in computing a REITs taxable income. Requires the special notice for capital gains dividends to be mailed to the Secretary within 45 days after the close of the REITs taxable year. Makes modifications in the tax penalty imposed on a REIT involved in making a deficiency dividend distribution due to an adjustment of the REITs taxable income. Excludes from the REIT distribution requirements non-cash income recognized by a REIT under certain deferred payment and installment sales rules added by the Deficit Reduction Act of 1984. Excludes from the REIT distribution requirements the income recognized by a REIT upon a determination that an exchange of real property failed to qualify for nonrecognition of gain as like-kind property. Title IV: Tax Shelters - Extends the at-risk limitation rules to real property. Limits the amount of the deduction for investment interest for taxpayers, other than corporations, to $10,000 plus the net investment income for the taxable year. Permits the carryover of disallowed investment interest to succeeding taxable years. Sets forth special rules and definitions relating to the limitation on the deduction of investment interest. Title V: Alternative Minimum Tax - Subtitle A: General Provisions - Makes modifications in the alternative minimum tax provisions of the Code. Provides that the alternative minimum tax is determined to be the excess of the tentative minimum tax amount over the regular tax for the taxable year. Computes the tentative minimum tax by multiplying the alternative minimum taxable income as exceeds the exemption amount by 22.5 percent (20 percent in the case of a corporation), reduced by the alternative minimum tax foreign tax credit. Sets the exemption amounts for taxpayers, other than corporat: ions, at: (1) $30,000 for a joint return; (2) $25,000 for singles and surviving spouses; and (3) $15,000 for married people filing separately. Reduces the exemption for taxpayers with a taxable income in excess of $175,000. Allows corporations an exemption amount of $40,000. Sets forth special rules and definitions relating to the alternative minimum tax. Subtitle B: Treatment of Existing Carryforwards of Steel Companies - Provides an effective 15-year carryback of existing unused business credit carryforwards of steel companies. Provides that the existing carryforwards of qualified corporations may offset 75 percent of the minimum tax of the corporation. Establishes a $300,000,000 limit on the carryforward amounts which may be used. Sets forth certain definitions. Title VI: Foreign Provisions - Subtitle A: Modification in Regulations Allocating Research and Experimental Expenditures - Establishes a two year modification in regulations providing for allocation of research and experimental expenditures. Subtitle B: Possessions Tax Credit Changes - Makes certain modifications in the possession tax credit provisions. Subtitle C: Tax Treatment of Possessions - Part I: Permits Guam, American Samoa, and the Northern Mariana Islands to enact revenue laws. Requires the existence of certain implementing agreements providing for measures which alleviate certain problems relating to tax administration. Excludes from the gross income of a bona fide resident of Guam, American Samoa, and the Northern Mariana Islands the income derived from or effectively connected with such possessions. Modifies the definition of controlled foreign corporation for purposes of corporations organized in Guam, American Samoa, or the Northern Mariana Islands. Modifies the withholding requirements with respect to a corporation created or organized in Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands. Part II: Treatment of the Virgin Islands - Provides for the coordination of the United States and the Virgin Islands individual income tax provisions. Permits Virgin Islands corporations to use the possession tax credit. Part III: Cover Over of Income Taxes - Provides that the net collection of taxes for each taxable year with respect to certain individuals shall be covered into the Treasury of the possession (Guam, American Samoa, the Northern Mariana Islands, or the Virgin Islands) of which such individual is a bona fide resident. Provides for transfers of other amounts to these possessions with respect to military personnel and certain employees of the United States. Part IV: Effective Date - Sets forth the effective date for these provisions relating to Guam, American Samoa, the Northern Mariana Islands, and the Virgin Islands. Subtitle D: Excise Tax on Certain Broadcast for Olympic Events - Imposes an excise tax of ten percent on amounts paid for United States television and radio broadcast rights for Olympic events. Sets forth special rules and definitions pertaining to this special excise tax. Establishes within the Treasury the United States Olympic Trust Fund. Provides that the amounts collected from the special excise tax, less any administrative expenses relating to such tax, shall be transferred to the Trust Fund. Subtitle E: Excise Tax on Insurance Premiums Paid to Foreign Insurers - Imposes a four percent excise tax on certain insurance policies, indemnity bonds, annuity contracts or policies of reinsurance issued by foreign insurer. Provides for the withholding of such excise tax by the insured or withholding agent on policies issued by the insured or withholding agent on policies issued by a foreign insurers. Sets forth certain definitions and special rules. Subtitle F: Treatment of Certain Employees of Panama Canal Commission - Provides that nothing in the Panama Canal Treaty shall be construed as exempting any citizen or resident of the United States from income tax of the United States. Permits the exclusion of certain allowances by employees of the Panama Canal Commission stationed in Panama. Title VII: Tax-Exempt Bonds - Modifies the definition of arbitrage bonds with respect to the acquisition of annuity contracts. Provides for the treatment of tax increment bonds issued before January 1, 1986. Title VIII: Financial Institutions - Prohibits large banks (banks where the average adjusted bases of all assets of such bank exceeds $500,000,000) from taking the deduction for additions to a reserve for bad debts. Sets forth special rules and definitions. Requires the pro rata allocation of interest expenses of financial institutions with respect to the interest expenses which are allocable to tax-exempt interest. Sets forth certain definitions and special rules. Terminates the special ten-year carryback rules with respect to certain financial institutions on January 1, 1986. Repeals the special reorganization rules with respect to financial institutions. Provides that losses resulting from the loss on an individual's deposit in a qualified financial institution as a result of bankruptcy or insolvency of such institution shall be treated as a casualty loss. Title IX: Accounting Provisions - Subtitle A: General Provisions - Permits an eligible small business to use the simplified dollar-value method of pricing inventories for purposes of the LIFO method of accounting. Sets forth special rules and definitions with respect to the simplified dollar-value method of pricing. Requires that the taxable income of a "C corporation" or a partnership which has a "C corporation" partner must be computed under an accounting method other than the cash receipts and disbursement method of accounting. Sets forth certain exceptions to this rule and provides special rules and definitions. Requires the recognition of gain on pledges of certain installment obligations. Excepts certain sales of particular capital assets. Provides special rules and definitions. Requires income related to a long-term contract to be determined under the percentage of completion method of accounting. Requires, upon completion of the contract, the taxpayer to pay (or be entitled to receive) interest computed under the "look-back" method. Establishes the "look-back" method for computing the interest costs. Sets forth certain definitions, exceptions, and special rules. Requires any taxpayer who produces real or personal property to capitalize the following cost: (1) the direct cost of such production; and (2) such production's proper share of those indirect costs (including taxes), part or all of which are assignable to such production. Provides exceptions to the general rule of capitalization of costs for certain activities. Sets forth certain definitions and special rules relating to capitalization of production costs. Repeals the reserve for bad debt deduction of taxpayers other than financial institutions. Restricts the vacation-pay deduction for accrual method taxpayers by requiring the amounts to be paid within the taxable year or within eight and one-half months following the close of the taxable year. Includes in the gross income of the taxpayer amounts contributed in aid of construction. Subtitle B: Provisions Relating to Timber - Permits qualified timber producers to elect to expense (and claim as a deduction during the taxable year) 50 percent of the qualified timber preproductive period expenses paid or incurred during the taxable year. Defines "qualified timber preproductive expense" and "qualified timber producer." Provides certain depreciation rules relating to such taxpayers making this election. Provides that the capital gains tax treatment for timber is not available to corporate taxpayers. Subtitle C: Special Provisions Relating to Agriculture - Repeals the special tax treatment of expenditures for fertilizer and clearing land. Limits the expensing of soil and water conservation expenditures by providing that such expenditures must be consistent with soil conservation plans. Provides that gain from the disposition of converted wetland or highly erodible cropland shall be treated as ordinary income. Requires any loss recognized on the disposition of converted wetland or highly erodible cropland to be treated as long-term capital loss. Sets forth definitions and special rules. Provides rules for the netting of gains and losses by cooperatives among one or more of the allocation units of the cooperative. Sets forth various requirements with respect to such netting. Provides that certain plant variety protection certificates shall be treated as patents for purposes of the taxation on the sale or exchange of patents. Title X: Insurance Products and Companies - Part I: Policyholder Issues - Repeals the exclusion of interest on the installment payments of life insurance proceeds. Provides that the deduction for nonbusiness casualty losses covered by insurance is allowable only if a timely insurance claim with respect to such loss is filed. Provides that the exclusion from income of amounts received with respect to structured settlements is limited to cases involving physical injury. Part II: Life Insurance Companies - Repeals the special life insurance company deduction. Repeals the tax-exempt status for certain organizations providing commercial-type insurance coverage. Provides certain exceptions for activities attributable to high-risk and small groups. Requires the Secretary to conduct a study of fraternal beneficiary associations and report the findings to certain congressional committees. Permits the operations loss deduction of insolvent life insurance companies to offset the distributions from the policyholders surplus account. Part III: Property and Casualty Insurance Companies - Requires that 25 percent of unearned premium reserves be included in income each taxable year. Repeals the provisions allowing deductions for amounts allocated to the protection against loss accounts. Provides that amounts in such accounts shall be includible in income not less rapidly than ratably over a five-year period. Repeals the tax-exempt status of insurance companies or associations other than life or marine if the net written premiums for the taxable year exceed $500,000. Repeals the cap on tax of certain mutual insurance companies where the income is less than $12,000. Revises the alternative tax for certain small companies. Repeals the special small company deduction in computing statutory underwriting income or loss. Provides that the special determination of tentative life insurance company taxable income shall apply to corporations in Virginia and Louisiana. Establishes an advisory commission to conduct a study which will comprehensively analyze all aspects of the taxation of property and casualty insurance companies. Requires the results of such study to be submitted to selected congressional committees and the Secretary no later than March 31, 1988. Title XI: Pensions and Deferred Compensation - Subtitle A: Individual Retirement Accounts - Permits a maximum deduction of $2,000 contributed to an individual retirement account established for the benefit of a spouse. Provides that the $2,000 maximum deduction shall be phased-in over a period of five years. Permits nondeductible contributions to individual retirement plans. Limits the amount of such nondeductible contributions to $2,000 per year maximum. Phases in the maximum amount of the nondeductible contribution limit over a period of five years. Makes certain modifications in the rules relating to the tax treatment of distributions from individual retirement accounts. Requires that certain information be maintained with respect to designated nondeductible contributions to individual retirement accounts and individual retirement annuities. Subtitle B: Cash and Deferred Arrangements - Provides for the coordination of the individual retirement account deduction with other elective deferral provisions of the Code. Provides a $12,000 limit on the tax-free deferral with respect to elective qualified cash or deferred arrangements. Sets forth certain rules with respect to the elective deferrals. Provides that tax-exempt entities are eligible for having certain qualified cash or deferred arrangement plans. Prohibits the Federal Government or State or local governments from maintaining a qualified cash or deferred arrangement. Provides that if any plan amendments are required as a result of provisions of this Act, such amendment shall not be required to be made before the first plan year beginning on or after January 1, 1988. Subtitle C: Basis Recovery Rules for Qualified Pension Plans - Repeals the special rules for employees' annuities where the employee's contributions were recoverable in three years. Provides that amounts not received as annuities are allocated first to income. Subtitle D: Repeal of Exclusion for Cost of Group-Life Insurance - Repeals the exclusion from income for an employee of the cost of group-life insurance purchased by the employer. Subtitle E: Tax Treatment of Parsonage Allowances and Military Housing Allowances - Permits the deduction of mortgage interest and real property taxes by the taxpayer even though a parsonage allowance or military housing allowance has been received. Subtitle F: Additional Tax on Early Withdrawal From Pension Plans - Provides for a ten-percent additional tax on early distributions from certain qualified retirement plans. Exempts certain types of distributions from the ten-percent additional tax. Subtitle G: Treatment of Certain Full-Time Life Insurance Salesmen - Provides that a full-time life insurance salesman shall be considered an employee for purpose of the tax exclusion rules relating to employer cafeteria plans. Subtitle H: Changes Relating to Employee Stock Ownership Plans - Repeals the employee stock ownership tax credit. Terminates the exclusion from the income of certain taxpayers the interest received on loans used to acquire employer securities. Terminates the dividend paid deduction. Terminates the provision for the nonrecognition of gain on the sales of stock to an employee stock ownership plan. Terminates the provision permitting the transfer of certain estate tax liability to an employee stock ownership plan with respect to employer securities transferred to the plan or a worker-owned cooperative. Makes certain changes in the qualification requirements and other requirements with respect to employee stock ownership plans. Provides a special rule for eligible worker-owned cooperatives with respect to the nonrecognition of gain on the sale of securities to such cooperative. Subtitle I: Three Year Extension of the Exclusion for Educational Assistance - Extends for three years, until December 31, 1988, the exclusion from the gross income of an employee amounts paid or expenses incurred by an employer to provide educational assistance to the employee. Title XII: Repeal of Generation-Skipping Tax - Repeals the provisions of the Code providing for the tax on generation-skipping transfers. Provides for a credit or refund of any generation-skipping taxes which have been paid. Waives the statute of limitations with respect to refunds or credits for such taxes. Title XIII: Compliance and Tax Administration - Part I: Penalty for Failure to File Information Returns and Statements - Provides penalties for: (1) failure to file certain information returns; (2) failure to furnish certain payee statements; and (3) failure to include certain information on certain returns and statements. Establishes certain waiver provisions, definitions, and special rules relating to the filing of information returns and statements. Increases the penalty for failure to pay tax in certain cases from 0.5 percent per month to one percent per month. Modifies the provisions relating to the tax penalty in instances involving negligence and fraud. Part II: Estimated Tax Payments by Individuals - Increases the percentage tests for liability of taxpayers to pay estimated tax payments from 80 percent to 90 percent of the tax shown on the return for the taxable year. Part III: Provisions Relating to Attorneys' Fees and Exhaustion of Administrative Remedies - Extends the provisions permitting the awarding of attorneys' fees to the prevailing party in certain tax cases. Provides that Internal Revenue Service employees may be personally liable for court costs in certain cases. Requires the Secretary to report annually for a certain period of time to select congressional committees certain information relating to the awarding of court costs and attorneys' fees in tax cases. Part IV: Tax Administration Provisions - Grants the Secretary the authority to rescind a notice of deficiency mailed to the taxpayer with the consent of the taxpayer. Permits the Secretary to abate interest assessments due to errors or delays by the Internal Revenue Service. Suspends the compounding of interest charges where the interest charges on a deficiency has been suspended. Provides that certain service-connected disability payments are exempt from levy for tax payment. Increases to $100,000 the value of personal property subject to certain listing and notice procedures. Provides that the recordkeeping requirements for the use of an automobile by an agent of the Internal Revenue Service shall be the same as the use of an automobile by an officer of any other law enforcement agency. Part V: Interest Provisions - Establishes rules concerning the differenterial interest rate. Provides that the interest charges on any accumulated earnings tax shall begin to accrue on the date the return is due. Part VI: Modification of Withholding Allowances - Directs the Secretary to modify the withholding schedules to reflect the tax rate changes in this Act. Prohibits certain decreases in the withholding of taxes. Part VII: Information Reporting Provisions - Requires the reporting of certain information with respect to real estate transactions. Requires taxpayers to report on their returns amounts of tax-exempt interest received or accrued during the taxable year. Part VIII: Report on Return-Free System - Requires the Secretary to prepare a report on a return-free system for the Federal income tax of individuals which would include: (1) the identification of classes of individuals who would be permitted to use a return-free system; (2) how such system would be phased in; (3) what additional resources the IRS would need to carryout such a system; and (4) the type of changes to the Internal Revenue Code which would inhibit or enhance the use of such system. Part IX: Certain Diesel Fuel Taxes May be Imposed on Sales to Retailers - Provides that the excise tax on diesel fuel for highway vehicles may be imposed on the sale to the retailer by the wholesaler (jobber) or by the manufacturer where the sale is direct to the retailer. Title XIV: Miscellaneous Provisions - Excludes from income amounts paid to the foster parent for caring for a qualified foster child in the foster parent's home. Provides that the tax relief provisions applicable with respect to Vietnam MIAs (and their spouses) that expired after 1982 are retroactively reinstated and made permanent. Provides that in the case of any tax-exempt organization, the term unrelated trade or business does not include any trade or business of such organization that consists of exchanging names and addresses of donors to (or members of) such organization with another such tax-exempt organization. Provides that the term unrelated trade or business of a tax-exempt organization does not include activities of such organization relating to the distribution of low cost articles incidental to the solicitation of charitable contributions. Permits a housing cooperative, where the cooperative charges such tenant-stockholder with a portion of the cooperative's interest and taxes in a manner that reasonably reflects the cost to the cooperative of the interest and taxes attributable to such tenant-stockholder's dwelling unit, to make an election whereby the share of the cooperative's interest and taxes that each tenant-stockholder is permitted to deduct would be the amounts that were so separately allocated and charged. Provides that certain royalties relating to computer software are not treated as personal holding company income, and therefore not subject to the additional tax on personal holding company income, if the recipient: (1) is actively engaged in the trade or business of producing, developing, or manufacturing computer software; (2) derives more than half of its income from software royalties; (3) incurs substantial trade or business expenses, or research and development expenses; and (4) distributes most of its passive income other than software royalties. Provides special rules with respect to taxpayers who are members of an affiliated group and receive royalties with respect to the licensing of computer software. Allows certain securities dealers to exclude from personal holding company income certain income received on securities or money market instruments held in inventory if the taxpayer: (1) derives at least 50 percent of its income from the active conduct of the business of dealing in securities; (2) distributes most of its passive income not derived from the business of dealing in securities; and (3) incurs substantial trade or business expenses relating to the business of dealing in securities. Amends part E (Foster Care and Adoption Assistance) of title IV of the Social Security Act with respect to adoption assistance agreements and "nonrecurring adoption expenses" relating to the adoption of special needs children.
Bill· HJRESH.J.Res. 466 (99th)referred
United States · United States Congress · 4 December 1985
Constitutional Amendment - Prohibits the Government's expenditures from exceeding its revenues in any fiscal year, except in cases of national emergency as determined by a three-fifths vote of the Congress. Prohibits total Government expenditures during a fiscal year from exceeding 20 percent of the gross national product for the preceding calendar year.
Bill· HJRESH.J.Res. 467 (99th)referred
United States · United States Congress · 4 December 1985
Constitutional Amendment - Prohibits the Government's expenditures from exceeding its revenues in any fiscal year, except in cases of national emergency as determined by a three-fifths vote of the Congress.
Law· HRH.R. 3838 (99th)enacted
United States · United States Congress · 3 December 1985
Tax Reform Act of 1985 - Enacts the Internal Revenue Code of 1985. Title I: Individual Income Tax Provisions - Subtitle A: Rate Reductions; Increase in Standard Deduction and Personal Exemptions - Sets forth income tax rates for: (1) married individuals filing joint returns and surviving spouses; (2) heads of households; (3) unmarried individuals; and (4) married individuals filing separate returns and estates and trusts. Allows for cost-of-living adjustments in such tax rates. Allows for a basic standard deduction of: (1) $4,800 for married individuals filing joint returns and surviving spouses; (2) $4,200 for heads of households; (3) $2,950 for single individuals; and (4) $2,400 for married individuals filing separate returns. Allows an additional standard deduction of $600 for the elderly or blind. Provides for cost-of-living adjustments to such amounts. Limits the amount of allowable itemized deductions to the amount in excess of $500 multiplied by the number of personal exemptions taken. Increases the personal exemption amount to $2,000. Provides for cost-of-living adjustments to such amount. Repeals the additional personal exemption for the elderly or blind. Sets forth minimum income levels for individuals required to file income tax returns. Subtitle B: Provisions Relating to Tax Credits - Increases the amount of the earned income tax credit from 11 percent to 14 percent of the first $5,000 of income. Increases the income level at which the phase-out of such credit begins. Provides for cost-of-living adjustments to such amounts. Repeals the income tax credit for contributions to candidates for public office. Subtitle C: Provisions Related to Exclusions - Limits to $5,000 the amount of employer provided dependent care assistance which may be excluded from an employee's gross income. Includes in gross income the total amount of unemployment compensation received by an individual. Excludes from gross income any amount received as a qualified scholarship grant by an individual who is a candidate for a degree at an educational institution. Provides that such exclusion shall not apply to any payments for teaching, research, or other services by the individual as a condition for receiving such a scholarship. Subtitle D: Provisions Related to Deductions - Repeals the income tax deduction for two-earner married couples. Allows miscellaneous itemized income tax deductions only to the extent that the aggregate amount of such deductions exceeds one percent of adjusted gross income. Allows individuals who do not itemize deductions an income tax deduction for charitable contributions to the extent such contributions exceed $100. Repeals the income tax deduction for adoption expenses. Subtitle E: Miscellaneous Provisions - Repeals income averaging. Allows an income tax deduction for business meals, travel, and entertainment provided such expenses have a clear business purpose. Limits to 80 percent of the amount of meal and entertainment expenses allowed as a business expense deduction. Limits such a deduction for the costs of luxury skyboxes at sporting facilities. Limits the amount of such a deduction for the costs of luxury water transportation. Revises certain rules concerning the treatment of hobby losses and the business use of a home. Allows an income tax deduction for mortgage interest and real property taxes where a parsonage allowance or a military housing allowance has been received. Sets forth reporting requirements concerning payments of refunds of State or local income taxes and payment of State or local income taxes or real or personal property taxes. Subtitle F: Effective Dates - Sets forth effective dates for provisions of this Title. Title II: Capital Income Provisions - Subtitle A: Depreciation Provisions - Repeals the accelerated cost recovery system of depreciation. Replaces such system with an incentive depreciation system for tangible property. Sets forth the method of calculating the depreciation deduction under such method. Provides for the recapture of additional depreciation amounts for certain property placed in service after December 31, 1985. Sets forth the method of calculating such additional depreciation amount. Sets forth specified transitional rules and makes specified exemptions to the incentive depreciation system for tangible property. Subtitle B: Repeal of Regular Investment Tax Credit - Repeals the regular investment tax credit as of December 31, 1985. Makes exceptions for qualified progress expenditures for periods before January 1, 1986. Makes exceptions for certain transition property. Subtitle C: Changes in Certain Rapid Amortization Provisions - Repeals the five-year amortization of trademark and trade name expenditures. Repeals the five-year amortization of pollution control facilities. Makes permanent the allowance of depreciation of expenditures to rehabilitate low-income rental housing. Increases the amount of such expenditures permitted to be taken into account. Repeals the amortization of railroad grading and tunnel bores. Extends from 1986 to 1988 the expense treatment for removal of architectural barriers to the handicapped and elderly. Subtitle D: Other Capital Related Costs - Extends until 1988 the income tax credit for increasing research activities. Reduces the amount of such credit from 25 percent to 20 percent. Revises definitions and special rules relating to such income tax credit. Reduces the percentage of costs to be taken into account for purposes of the investment tax credit for rehabilitation expenditures. Revises certain definitions and special rules relating to such tax credit. Limits the amount of funds which may be deposited in a capital construction fund established under the Merchant Marine Act, 1936. Sets forth the method of calculating such limit. Exempts from taxation any funds deposited in such an account. Specifies the tax treatment of funds withdrawn from such an account. Subtitle E: Capital Gains and Losses - Reduces the deduction for capital gains from 60 percent to 42 percent (50 percent in 1986). Repeals provisions relating to the treatment of the gain or loss incurred on the disposal of coal or domestic iron ore with a retained economic interest. Includes depletion allowances in the calculation of any recapture of amounts realized from the disposition of an interest in oil, gas, or geothermal property. Subtitle F: Provisions Relating to Oil and Gas - Disallows the expensing of intangible drilling and development costs incurred after the start of installation of production casing. Provides that such costs not expensed may be amortized over 26 months. Phases out the percentage depletion allowance for oil and gas wells and geothermal deposits. Reduces such percentage from 15 percent to: (1) 10 percent in 1986; and (2) five percent in 1987. Terminates such allowance as of 1988. Continues the percentage depletion allowance of 15 percent for stripper wells. Disallows a percentage depletion for lease bonuses. Exempts from the windfall profit tax certain crude oil exchanged for residual fuel oil. Subtitle G: Treatment of Hard Minerals - Reduces the percentage depletion allowance to five percent for certain hard minerals. Allows a higher percentage depletion for: (1) dimension or ornamental stone; and (2) minerals used in the production of animal feed or fertilizer. Allows the expensing of development and mining exploration expenditures. Provides for recapture of such amounts upon commencement of the production stage with respect to any mine. Subtitle H: Provisions Relating to Energy Credits - Extends the tax credit for renewable energy source expenditures for solar property from 1985 to 1988. Revises the method of calculating such credit for expenditures made after December 31, 1985, and before January 1, 1989. Extends the energy investment tax credit for solar energy property and geothermal property at reduced percentage rates from 1985 to 1988. Terminates the income tax credit for producing fuel from a nonconventional source. Allows such credit, on a transitional basis, for fuel which is produced from a well drilled or facility placed in service before January 1, 1986, and which is sold before 1990. Repeals the income tax credit for alcohol used as a fuel. Reduces the excise tax exemption for qualified menthanol and ethanol fuels. Subtitle I: Extension of Other Credits - Extends the targeted jobs tax credit from 1985 to 1987. Revises the method of calculating such credit. Extends the income tax credit for clinical testing expenses for certain drugs from 1987 to 1988. Title III: Corporate Provisions - Subtitle A: Corporate Rate Reductions - Sets the rate of tax for corporations at: (1) 15 percent of taxable income as does not exceed $50,000; (2) 25 percent of taxable income between $50,000 and $75,000; and (3) 36 percent of taxable income in excess of $75,000. Imposes a five percent surtax on a corporation's taxable income in excess of $100,000 up to a maximum surtax of $13,250. Increases the alternative tax rate for net capital gains of corporations to 36 percent. Sets forth transitional rules for pre-1986 net capital gains. Subtitle B: Dividend Paid Deduction; Etc. - Allows a corporation an income tax deduction for ten percent of the dividends paid by such corporation during the taxable year. Phases in such percentage over ten years. Requires each corporation to establish a qualified dividend account (QDA). Limits the amount of dividends which may be taken into account for the dividends paid deduction to the amount in the corporation's qualified dividend account. Specifies the calculation of amounts to be placed in such an account. Disallows a dividends paid deduction for any dividends paid by: (1) a regulated investment company; (2) a real estate investment trust; (3) a subchapter S corporation; (4) cooperative organizations; and (5) a Foreign Sales Corporation or a Domestic International Sales Corporation. Reduces the deduction for dividends received by a corporation. Provides for a phase-in period for such reduction. Sets forth special rules for such deduction. Repeals the partial exclusion of dividends received by individuals. Disallows a business expense deduction for expenses incurred by a corporation in connection with the redemption of its stock. Subtitle C: Limitation on Net Operating Loss Carryforwards and Excess Credit Carryforwards - Revises rules for the calculation of the limitations on net operating loss carryovers in cases of a change in ownership of more than 50 percent of value of the stock of a loss corporation. Provides that taxable income available for offset by a pre-acquisition net operating loss shall be limited to a specified rate times the value of the loss corporation's equity. Revises rules for the calculation of the limitations of certain excess tax credits in such cases. Subtitle D: Recognition of Gain and Loss on Distributions of Property in Liquidation - Revises rules concerning distributions of property in corporate liquidations to require the recognition of gain or loss to a corporation on the distribution of property in complete liquidation as if such property were sold to the distributee at its fair market value. Provides specified exceptions to such treatment if such property is distributed to the shareholders of the liquidating corporation. Title IV: Tax Shelters - Extends present at-risk limitations on losses from businesses and income-producing activities to the activity of holding real property. Provides certain exceptions for certain third-party nonrecourse financing which is secured by real property used in the activity. Limits the deduction for nonbusiness interest on investment indebtedness. Sets forth definitions and special rules concerning such limitation. Title V: Alternative Minimum Tax - Revises the method of calculating the alternative minimum tax for corporations and individuals. Revises the types of tax preferences which may be taken into account in calculating such minimum tax. Disallows certain losses in the calculation of such minimum tax. Revises definitions and sets forth special rules with respect to such minimum tax. Allows an income tax credit for prior year minimum tax liability. Title VI: Foreign Tax Provisions - Subtitle A: Foreign Tax Credit Modifications - Subjects passive income, banking and insurance income, and shipping income to separate foreign tax credit limitations. Disallows a foreign tax credit for any withholding tax imposed on interest income received or accrued by a bank, insurance company, or other financial institution to the extent that the tax exceeds the U.S. tax which is attributable to the associated interest income. Treats a specified proportion of foreign income taxes paid by a foreign corporation as being paid by a domestic corporation if that domestic corporation owns ten percent or more of the voting stock of the foreign corporation. Subtitle B: Source Rules - Treats income derived by the sale of personal property by a U.S. resident as U.S. source income. Treats similar income derived by a nonresident as foreign source income. Sets forth rules for the determination of an individual's residence. Sets forth special rules for income derived from the sale of inventory property and gain from the sale of depreciable personal property. Exempts from the U.S. source rules interest received by certain financial institutions or by similar foreign financial institutions if such interest is effectively connected with the conduct of a trade or business of such financial institution in a foreign country. Treats as U.S. source income any transportation income attributable to transportation which begins or ends in the United States. Imposes a four percent tax on the gross transportation income of nonresident aliens and foreign corporations. Sets forth rules for the allocation and apportionment of expenses to foreign source income. Treats as U.S. source income any income derived from a space or ocean activity by a U.S. resident. Treats as non-U.S. source income any income derived from a space or ocean activity by a non-U.S. resident. Defines "space or ocean activity." Specifies exceptions for transportation and oil and gas activities. Revises present regulations providing for allocation of research and expenditures for a specified two-year period. Subtitle C: Taxation of Income Earned Through Foreign Corporations - Revises the definition of foreign personal holding company income to include: (1) dividends; (2) certain property transactions; (3) commodities transactions; and (4) foreign currency gains. Excludes from such income: (1) rents and royalties; and (2) certain income received from related persons. Revises the definition of insurance income for purposes of the tax on income earned through foreign corporations. Repeals the exclusion for reinvested shipping income. Revises the definitions of controlled foreign corporations and foreign personal holding companies to provide for a test based on value and voting power. Repeals the special treatment of corporations organized in United States possessions. Revises the treatment of foreign investment company stock by repealing the 50-percent U.S. ownership requirement. Treats a passive foreign investment company as a controlled foreign corporation except in specified circumstances. Provides that only effectively connected capital gains and losses of foreign corporations shall be taken into account for purposes of the accumulated earnings tax and personal holding company provisions. Subtitle D: Special Tax Provisions for United States Persons - Revises the method of calculating the Puerto Rico and Possessions tax credit. Specifies that nothing in the Panama Canal Treaty shall be construed as exempting any citizen or resident of the United States from tax on amounts received from the Panama Canal Commission. Reduces Foreign Sales Corporations and Domestic International Sales Corporation tax preferences by specified amounts. Limits the foreign earned income exclusion to $75,000 per year per U.S. individual. Exempts from taxable income interest received on obligations of the United States by banks organized in Guam which are otherwise not treated as being a foreign corporation. Subtitle E: Treatment of Foreign Taxpayers - Imposes a 30 percent branch-level tax on effectively connected income of foreign corporations. Sets forth special rules for the treatment of deferred payments arising out of business conducted within the United States by a nonresident alien individual or a foreign corporation. Provides that gain on the sale or exchange of property whose basis is determined in whole or in part by reference to the basis of U.S. property shall be treated as gain from the sale of U.S. property. Provides for a uniform rate of the excise tax on insurance and reinsurance polices issued by foreign insurers. Requires the withholding of the excise tax on foreign insurers. Subtitle F: Foreign Currency Transactions - Treats any foreign currency gain or loss attributable to specified types of transactions as ordinary income or loss. Provides that any amount treated as ordinary income or loss shall be treated as interest income or expense. Specifies certain exceptions. Sets forth definitions and special rules for the calculation of such a gain or loss. Subtitle G: Tax Treatment of Possessions - Part I: Treatment of Guam, American Samoa, and the Northern Mariana Islands - Authorizes Guam, American Samoa, and the Northern Mariana Islands to enact revenue laws with respect to income: (1) from sources within, or effectively connected with the conduct of a trade or business within, any such possession; or (2) received or accrued by any resident of such possession. Excludes from gross income any income from sources within Guam, American Samoa, and the Northern Mariana Islands received by an individual who is a bona fide resident of such a possession. Part II: Treatment of the Virgin Islands - Provides that residents of the United States who are not bona fide residents of the Virgin Islands and who have income derived from sources within the Virgin Islands shall pay an applicable percentage of income taxes to the Virgin Islands. Sets forth the method of calculating such applicable percentage. Authorizes the Virgin Islands to impose nondiscriminatory local income taxes. Authorizes the Secretary of the Treasury to prescribe regulations for purposes of determining tax liability incurred to the Virgin Islands. Allows a possession tax credit to Virgin Islands corporations. Part III: Cover Over of Income Taxes - Requires that the net collection of taxes imposed with respect to certain individuals shall be covered into the Treasury of the specified possession of which such individual is a bona fide resident. Applies such requirement to Guam, American Samoa, the Northern Mariana Islands, and the Virgin Islands. Part IV: Effective Dates - Sets forth the effective dates of the provisions of this subtitle. Title VII: Tax-Exempt Bonds - Revises rules relating to the exclusion of interest earned on State and local government bonds. Excludes interest earned on any State or local government bonds except: (1) nonessential function bonds which are not qualified bonds; (2) arbitrage bonds; and (3) any registration-required bond which is not in registered form. Defines a "nonessential function bond" as any bond issued as part of an issue if: (1) a specified percentage or more of the proceeds of such issue are to be used to make or finance loans to persons other than governmental units; or (2) a specified percentage or more of the gross proceeds of such issue are to be used in any trade or business carried on by any person other than a governmental unit. Defines a "qualified bond" as any nonessential function bond if such bond is: (1) an exempt facility bond; (2) a qualified mortgage bond; (3) a qualified veterans' mortgage bond; (4) a qualified small issue bond; (5) a qualified hospital bond or tax-exempt organization bond; (6) a qualified student loan bond; or (7) a qualified redevelopment bond. Defines each such qualified bond. Sets the volume cap of such qualified bonds which may be issued in a calendar year at the greater of: (1) an amount equal to $175 multiplied by the State population; or (2) $200,000,000. Defines an "arbitrage bond" as any State or local bond issued as part of an issue any portion of the proceeds of which are reasonably expected to be used directly or indirectly: (1) to acquire higher yielding investments; or (2) to replace funds which are used directly or indirectly to acquire higher yielding investments. Disallows a tax exemption for any State or local bond if such bond is federally guaranteed. Sets forth definitions and special rules. Repeals provisions relating to general stock ownership corporations. Sets forth effective dates and makes exceptions for presently binding agreements and certain projects presently under construction. Sets forth transitional rules. Title VIII: Financial Institutions - Repeals the deduction for additions to a bad debt reserve made by a large bank. Defines a bank as a "large bank" if for the year the average adjusted bases for all assets of such bank exceeded $500,000,000, or such bank was a member of a parent-subsidiary controlled group where the average adjusted bases of the assets of the group exceeded $500,000,000. Requires a large bank to take into income the balance of any bad debt reserve account over a five year period unless the bank makes an election to use the cut-off method for the bad debt reserves. Allows any domestic building and loan association, any mutual savings bank or any cooperative bank without capital stock organized and operated for mutual purposes and without profit to take a deduction for a reasonable addition to a reserve for bad debt. Provides that the amount of the deduction for additions to bad debt reserves based on a percentage of taxable income shall be limited to five percent of taxable income for such year. Repeals the percentage of eligible loans method for calculating the amount of the deduction. Provides that the reserves calculated under this provision will not be treated as tax preference items. Denies financial institutions (banks, thrift institutions, and other financial institutions) a deduction for that portion of the taxpayer's interest expense which is allocated to tax-exempt obligations acquired after December 31, 1985. Provides that the disallowance of interest expenses allocated to tax-exempt obligations must be applied before the application of the rules relating to the capitalization of preproductive expenses including interest and taxes. Repeals the special treatment of face-amount certificate companies. Repeals the special rules which permit financial institutions a ten-year carryback and a five-year carryforward of net operating losses. Repeals the special provisions relating to the acquisitions of financially-troubled thrift institutions and the exclusion from income and the basis reduction requirement of FSLIC payments to such thrift institutions. Provides that no deduction shall be disallowed relating to expenses allocable to tax-exempt income for any amount paid or incurred by a taxpayer on the ground that such amount is allocated to amounts of excluded FSLIC payments. Permits qualified individuals to elect to deduct losses on deposits in qualified financial institutions as casualty losses in the year in which the amount of the loss can be reasonably estimated. Defines "qualified individual" as any individual other than the owner of one percent or more of the value of the stock of the institution in which the loss was sustained, an officer of such institution, and certain relatives and related persons to such owners and officers. Prohibits the deduction of such loss as a bad debt deduction if this election is made by the taxpayer. Title IX: Accounting Provisions - Subtitle A: General Provisions - Permits eligible small businesses to elect to use the simplified dollar-value method of pricing inventories for purposes of the LIFO method of accounting for inventories. Requires, with the use of the simplified dollar-value LIFO method of inventory accounting, that inventories be grouped into pools in accordance with the major categories of the Producer Price Index or the CPI Detailed Report. Provides that the change in inventory costs for the pool for the taxable year is based on the change in the published index for the general category to which the pool relates. Defines "eligible small business" as a small business where the average annual gross receipts of the taxpayer for the three preceding taxable years do not exceed $5,000,000. Treats all taxpayers who are component members of a controlled group as one taxpayer for purposes of determining the gross receipts of the taxpayer. Provides that the election to use the simplified dollar-value method of inventory accounting may be made without the consent of the Secretary of the Treasury. Prohibits a corporation (other than a Subchapter S corporation) or a partnership where one of the partners is a corporation (other than a Subchapter S corporation) from computing their taxable income under the cash receipts and disbursement method of accounting. Excepts from this prohibition the following: (1) farming businesses; (2) entities where the incidence of taxation falls either at the individual level or on a qualified personal service corporation; or (3) taxpayers with average annual gross receipts of $5,000,000 or less. Provides that the prohibition on using the cash method of accounting shall apply to trusts subject to tax on unrelated trade or business income. Provides that, in the case of the provision of personal services, a taxpayer using the accrual basis of accounting is not required to accrue amounts for the performance of personal services earlier than when the amounts are billed by the taxpayer and will not be required to accrue any portion of such amounts which (on the basis of experience) will not be collected. Provides that if certain installment obligations are pledged as collateral for a loan, all or a portion of the proceeds of the loan generally will be treated as a payment received on such installment obligation thereby resulting in the recognition of gain equal to the product of the net loan proceeds and the gross profit ratio applicable to that obligation. Exempts from this rule installment obligations which have been pledged where the potential deferral of gain attributable to the portion so pledged does not exceed nine months. Provides an additional exception from this rule for installment obligations that are pledged for an indebtedness with a term not exceeding 90 days, and such indebtedness is not extended or refinanced during the 45-day period beginning on the day such indebtedness is repaid. Requires income from all long-term contracts to be reported under the percentage of completion method of accounting based on the estimated total cost of completion rather than physical completion. Requires, upon completion of the contract, the taxpayer to pay interest for any underpayment of tax with respect to a taxable year in which there was such underpayment or to receive an interest payment if there was an overpayment (i.e. the "look-back" method of computing interest payments). Allows the completed contract method of accounting to be used in the case of a contract for the construction of real property that is expected to be completed within the two-year period beginning on the commencement date of the contract if performed by a taxpayer whose average annual gross receipts over the three taxable years preceeding the taxable year in which such contract is entered into do not exceed $10,000,000. Requires any taxpayer who produces real or tangible personal property to capitalize: (1) the direct costs of such production; and (2) such production's proper share of those indirect costs (including taxes) part or all of which are assignable to such production. Exempts from this requirement: (1) personal use property; (2) research and experimental expenditures; (3) development and other costs of oil and gas wells or other mineral property; and (4) property subject to the long-term method of accounting. Sets forth special rules for capitalization of expenditures for farmers and ranchers. Provides specific rules for the capitalization of interest expenses in certain instances. Repeals the reserve method for computing expense deductions arising from bad debts for all taxpayers, other than certain financial institutions. Provides that no debt will be deductible as wholly or partially worthless for tax purposes until it is charged off on the taxpayer's books. Requires the balance of any reserve for bad debts, as of the effective date of this Act, to be taken into income ratably over a five-year period. Limits the deduction for additions to a reserve account for vacation pay to the vacation pay that is paid during the taxable year or within eight and one-half months following the close of the taxable year of the employer with respect to which the vacation pay was earned by the employees. Provides that amounts of any contribution in aid of construction or any other contribution as a customer or potential customer shall be included in the income of the taxpayer. Subtitle B: Provisions Relating to Timber - Permits the amortization of certain timber preproductive expenditures ratably over a 60-month period by qualified small timber producers. Defines "qualified small timber producers" as any taxpayer engaged in the trade or business of planting, cultivating, caring for, or cutting of trees if the timberland of the taxpayer does not exceed 75,000 acres. Phases out the allowance of the 60-month amortization period for taxpayers with acreage between 50,000 and 75,000. Repeals the capital gains treatment with respect to timber royalties and cutting income except for gains reported by natural persons, an estate, or a trust all the beneficiaries of which are natural persons or estates. Requires that the gains from timber of all taxpayers where such gains are attributable to timber grown on Federal lands are to be reported as ordinary income. Provides for a three-year transition period for the tax treatment of gains from timber received by corporations. Subtitle C: Special Provisions Relating to Agriculture - Repeals the provisions allowing expenditures for fertilizer and soil conditioning to be deducted currently. Repeals the provision allowing expenditures for the clearing of land in preparation for farming to be deducted currently. Limits the soil and water conservation expenditures that may be deducted currently to amounts incurred that are consistent with a conservation plan approved by the Soil Conservation Service of the Department of Agriculture for the area in which the land is located, and, if no plan exists for the particular area, amounts expended consistent with any conservation plan of a comparable State agency. Provides that expenditures for general earth moving, draining, and/or filling of wetlands, and for preparing land for installation and/or operation of a center pivot irrigation system may not be deducted under the special expensing provisions. Requires any gain realized on the disposition of "converted wetland" or "highly erodible cropland" to be treated as ordinary income and any loss on the disposition of such property to be treated as long-term capital loss. Defines "converted wetland" and "highly erodible cropland". Permits losses of a cooperative that are attributable to one or more allocation units (including a loss that is carried over from another year) to be offset against earnings of one or more other allocation units, but only to the extent that such earnings and losses are derived from business done with or for patrons. Allows the netting of gains and losses from one or more allocation units in certain transactions in which one cooperative acquires the assets of another cooperative. Requires a cooperative that offsets earnings and losses from one or more of its allocation units to notify its patrons in writing. Sets forth certain information of the cooperative which need not be disclosed. Requires the cooperative to furnish sufficient notice information to the patrons where a determination has been made by the Secretary that the cooperative failed to give sufficient notice to the patrons. Provides that the term "patent" includes a certificate of plant variety protection issued under the Plant Variety Protection Act. Title X: Insurance Products and Companies - Part I: Policyholder Issues - Requires all amounts paid to any beneficiary of a life insurance policy at a date later than the death of the insured to be included in gross income to the extent the death benefit represents a payment made by the insurance company for the use of the beneficiary's money, i.e. the unpaid death benefit. Prohibits the deduction of a nonbusiness casualty loss covered by insurance unless the taxpayer files a timely insurance claim with respect to such loss. Provides for the exclusion from income of amounts received with respect to structured settlement agreements only to the extent that the payment on account of a claim for personal injuries are the result of physical injury or physical sickness to the claimant. Part II: Life Insurance Companies - Repeals the special life insurance company deduction which allowed life insurance companies, in computing their life insurance company taxable income, to deduct 20 percent of the income from the insurance business in arriving at their taxable income. Provides that certain tax-exempt organizations shall be exempt from tax only if no substantial part of their activities consists of providing commercial-type insurance. Excludes form the definition of "commercial-type insurance": (1) insurance provided at substantially below cost to a class of charitable recipients; (2) incidential health insurance provided by a health maintenance organization of a kind customarily provided by such organization; and (3) property or casualty insurance provided by a church or convention or association of churches for such church or convention or association of churches. Directs the Secretary to prescribe regulations which provide, for Blue Cross and Blue Shield and their affiliates, special treatment for activities with respect to high-risk individuals and small groups. Permits a life insurance company to apply its current loss from operations and its unused operation loss carryovers against the increase in its taxable income attributable to the amount distributed from its policyholders surplus account if certain conditions are met. Part III: Property and Casualty Insurance Companies - Permits a property and casualty insurance company to deduct only 80 percent of the increase in unearned premiums on outstanding business for the taxable year. Includes in income over a five-year period 20 percent of the unearned premium reserve outstanding at the end of the most recent taxable year beginning before January 1, 1986. Requires the deduction for losses incurred to be reduced by a specified portion of the insurer's tax-exempt interest and of the deductible portion of dividends received (with special rules for dividends received from affiliates). Provides that the "specified portion" of tax-exempt interest and dividends shall be ten percent for taxable years beginning after December 31, 1985, increasing to 15 percent for taxable years beginning after December 31, 1987. Provides that for property and casualty insurance companies for taxable years beginning after December 31, 1987, if there is an adjusted net gain from operation of such company for the taxable year, the amount of the taxable income for such taxable year shall not be less than the amount which is 20/36 of such net gain from operation. Provides that if there is an adjusted net loss from operation of such company for such taxable year, the amount of the net operating loss of such company for such taxable year shall not be greater than the amount which is 20/36 of such adjusted net loss from operation. Repeals the deduction for contributions to protection against loss accounts loss accounts of mutual property and casualty insurance companies. Requires the balances in any protection against loss accounts to be includible in income over the first five taxable years beginning after December 31, 1985. Sets forth required percentages of the amount in the account to be included each year. Exempts from taxation mutual and stock property and casualty insurance companies if their net written premiums or direct written premiums (whichever is greater) do not exceed $500,000. Permits mutual and stock companies with net written premiums or direct written premiums (whichever is greater) in excess of $500,000 but less than $2,000,000 to elect to be taxed only on taxable investment income. Repeals the special deduction for small companies having a gross amount of less than $1,100,000. Requires the Secretary to study the tax treatment of policyholder dividends by mutual property and casualty insurance companies. Directs that such study be submitted to specified congressional committees no later than January 1, 1987. Gives the Secretary the authority to require the furnishing of such information as may be necessary to conduct the study. Requires the Secretary to conduct a study of the treatment of loss reserves of property and casualty insurance companies, and report such findings to specified Congressional committees no later than January 1, 1987. Gives the Secretary the authority to require the furnishing of such information as may be necessary to conduct the study. Title XI: Pension and Deferred Compensation; Fringe Benefits - Subtitle A: Pensions and Deferred Compensation - Part I: Limitations on Tax-Deferred Savings - Requires an individual's deduction to an individual retirement account to be reduced by the individual's elective deferrals under a qualified cash or deferred arrangement (to the extent the deferrals are not currently included in income) and any contributions to a tax-sheltered annuity made pursuant to a salary reduction agreement, to the extent the contribution is not currently included in income. Permits the spousal individual retirement account deduction to be made either if: (1) the spouse has no compensation for the taxable year; or (2) the spouse elects to be treated for the taxable year as having no compensation. Provides that the maximum amount that an employee can elect to defer for any taxable year under all cash or deferred arrangements in which the employee participates is limited to $7,000. Provides that the $7,000 limit is determined without regard to any community property laws. Provides that the $7,000 limit is increased by certain amounts if the employee is employed by certain qualified organizations such as an educational organization, hospital, home health service agency, church, or convention or association of churches. Permits the deferral of the imposition of these limits if there is a collective bargaining agreement in effect. Reduces the dollar limitation on contributions and benefits under a defined benefit plan from $90,000 to $77,000. Reduces the dollar limitation for defined contributions plans to the lesser of $25,000 or 25 percent of the defined benefit plan dollar limit or 25 percent of the participant's compensation. Provides that if retirement benefits under a defined benefit plan begin before the age 62, the $77,000 limit on retirement benefits is reduced so that it is the actuarial equivalent of an annual benefit beginning at age 62. Provides that in no event will the dollar limit for benefits commencing at or after the age of 55 be reduced below $65,000. Provides special rules regarding the retirement benefits for airline pilots, police, and firefighters. Permits a defined benefit plan to maintain a qualified cost-of-living arrangement under which employer and employee contributions may be applied to provide cost-of-living increases to a benefit. Provides that an employee of a nongovernmental tax-exempt organization shall not be considered to be in constructive receipt of compensation deferred under an eligible deferred compensation plan maintained by a tax-exempt organization if the plan satisfies the requirements applicable to eligible deferred compensation plans of State and local governments. Provides that the maximum amount of compensation of any one individual which may be deferred during any taxable year shall not exceed $7,500. Requires deferrals under an ineligible deferred compensation plan, agreement, or arrangement maintained by a nongovernmental tax-exempt entity are to be included in an employee's gross income when the amounts are not subject to a substantial risk of forfeiture. Part II: Nondiscrimination Requirements - Alters the special nondiscrimination tests applicable to qualified cash or deferred arrangements so that the actual deferral percentage under a cash or deferred arrangement by highly compensated employees for a plan year may not exceed either; (1) 125 percent of the actual deferral percentage of all non-highly compensated employees eligible to defer under the arrangement, or (2) the lesser of 200 percent of the actual deferral percentage of all eligible nonhighly compensated employees or the actual deferral percentage for all eligible nonhighly compensated employees plus two percentage points. Permits a qualified cash or deferred arrangement to make distributions on account of the plan's termination (provided no successor plan is established) as well as on account of the employee's death, disability, separation from service, or attainment of age 59 and one-half. Makes other modifications in the withdrawal requirements. Modifies the definition of "highly compensated employee" to mean an employee who, if at any time during the year of any of the two preceding years, is a five-percent owner of the employer, received compensation from the employer in excess of $50,000, or was in the top-paid group of employees. Provides that a cash or deferred arrangement will not be treated as disqualified if the amount of any excess contributions for the plan year is distributed before the close of the following plan year. Sets forth additional nondiscrimination requirements for employer matching contributions and employee contributions for defined contribution plans. Imposes a penalty tax on an employer making excess contributions to a qualified cash or deferred arrangement which is part of a qualified employee plan. Applies nondiscrimination rules to tax-sheltered annuity programs (other than those maintained for church employees). Provides that social security benefits earned with a prior employer shall not be taken into account in determining whether a defined benefit plan is discriminatory. Provides that benefits shall be treated as accruing ratably for purposes of determining whether an employee plan is top-heavy. Allows forfeitures arising in any defined contribution plan (including a money purchase pension plan) to be either: (1) reallocated to the accounts of other participants in a nondiscriminatory fashion; and (2) used to reduce future employer contributions or administrative costs. Part III: Treatment of Distributions - Imposes a penalty tax on certain accumulations in qualified retirement plans which fail to make required distributions. Revises rules relating to the inclusion in gross income of distributions from a qualified employee plan. Allows the averaging over five years to individuals receiving lump-sum distributions after age 59 and one-half. Limits such averaging to only one such lump-sum distribution. Repeals the capital gains treatment for such distributions. Increases from ten to 15 percent the penalty tax on early withdrawals from an individual retirement account. Extends such tax to early withdrawals by individuals from any qualified employee retirement plan. Part IV: Miscellaneous Provisions - Repeals the limit carryforward applicable to profit-sharing and stock bonus plans. Extends the combined plan deduction limit to any combination of a defined benefit pension plan and a money purchase pension plan. Requires that certain social security taxes be taken into account in applying the 15-percent and 25-percent compensation deduction limits. Imposes a ten percent excise tax on excess contributions to qualified plans. Imposes a ten percent excise tax on the reversion of qualified employee plan assets to an employer. Imposes a 15 percent excise tax on excess distributions to an individual from a qualified employee plan. Reduces the $50,000 limit on loans to a participant in a qualified employee plan by an amount equal to the participant's highest outstanding loan balance during the preceding 12-month period. Specifies that deferred annuities shall be made available only to natural persons. Requires the Secretary of the Treasury to conduct a study and report to the Congress concerning the effect of the existing coverage requirements for qualified employee plans and changes which should be made in such requirements. Provides that any amendments made necessary by provisions of this Act shall not be required to be made before the first plan year beginning on or after January 1, 1988. Imposes a penalty tax on underpayments attributable to overstatements of pension liabilities. Subtitle B: Fringe Benefits - Part I: Nondiscrimination Rules for Certain Statutory Fringe Benefit Plans - Requires a highly compensated employee who is a participant in a discriminatory statutory fringe benefit plan to include in income an amount equal to the employee's employer-provided benefit under the plan. Provides that the gross income of any employee, whether or not highly compensated, includes such employee's employer-provided benefit under a statutory benefit plan, unless: (1) the plan is in writing; (2) the employees' rights under the plan are legally enforceable; and (3) the employer established the plan with the intention of maintaining it indefinitely. Establishes a uniform nondiscriminatory eligibility requirement for all statutory benefit plans by requiring that: (1) at least 90 percent of all employees are eligible to participate in the plan; and (2) the plan contains no provisions relating to eligibility to participate that discriminates in favor of highly compensated employees. Sets forth additional rules relating to statutory defined benefit plans. Requires employers to file certain informational returns if benefits are provided under a cafeteria plan or statutory fringe benefit plan which were included in the income of a highly compensated or key employee. Part II: Other Provisions - Extends for two years, from December 31, 1985, to December 31, 1987, the exclusion for educational assistance and group legal services paid for by an employer that are furnished to employees. Permits a full-time life insurance salesperson to be treated as an employee for purposes of the cafeteria plan provisions to the extent the salesperson is otherwise permitted to exclude from income the benefit elected. Subtitle C: Changes Relating to Employee Stock Ownership Plans - Repeals the employee stock ownership tax credit. Terminates after December 31, 1988, the following provisions: (1) the exclusion of interest on loans used to acquire employer securities; (2) the dividends paid deduction; (3) the nonrecognition of gain on sales of stock to employee stock ownership plans, and (4) liability for payment in case of transfer of employer securities to an employee stock ownership plan or a worker-owned cooperative. Provides the following additional requirements for employee stock ownership plans: (1) requires more rapid (10-year graded) vesting: (2) modify the employee stock ownership plan nondiscrimination rules to limit the amount of a participant's compensation that may be taken into account and the annual amount of employer contributions that may be allocated to employees who are officers, shareholders, or highly compensated; (3) expand the pass-through voting requirements applicable to employer securities held by an employee stock ownership plan; (4) permit an eligibile plan participant to direct the employee stock ownership plan trustee to diversify a portion of the participant's employee stock ownership account balance; and (5) modify the distribution and put option requirements. Amends the tax credit employee stock ownership plan distribution provisions to permit certain distributions upon plan termination. Provides a special rule for eligible worker-owned cooperatives to ensure that such organizations can comply with the requirements of tax deferrment on gain derived from sales of stock to an employee stock ownership plan or for payment of estate tax liability by an employee stock ownership plan. Title XII: Unearned Income of Certain Dependent Children; Trusts and Estates - Subtitle A: Unearned Income of Certain Minor Children - Provides that to the extent that unearned income derived from property transferred from parents (parental-source unearned income) exceeds the amount of the child's personal exemption, such income is taxed to the child at the parents' marginal tax rate. Requires earned income and nonparental-source unearned income (i.e., income derived from property that is a qualified segregated asset) to be taxed to the child at the child's marginal tax rate. Subtitle B: Taxation of Estates and Trusts and Their Beneficiaries - Provides that all trusts created by a grantor, with the exception of qualified beneficiary trusts or qualified children's trusts, that are not treated as grantor trusts must be taxed at the marginal tax rate of the grantor. Permits the grantor to allocate any of the grantor's unused tax rate bracket amounts for any year to the trusts created by him in any manner the grantor elects. Provides that the income of a qualified beneficiary trust is taxed at the top marginal tax rates of the beneficiary. Definies "qualified beneficiary trust." Provides that where all the beneficiaries of a trust are children of the grantor (called a "qualified children's trust"), any beneficiary may allocate any of his or her unused tax bracket to the trust for any year prior to the time that beneficiary reaches majority, thereby taxing the trust income at this top marginal tax rate. Entitles all trusts, in lieu of the personal exemption, a deduction of $100. Entitles an estate a deduction, in lieu of the personal exemption, of $600. Permits any unused losses and deductions in the last year of the trust or estate to be claimed by the beneficiaries succeeding to the property of the estate or trust in accordance with regulations prescribed by the Secretary. Provides that no amounts shall be included in the gross income of any beneficiary by reason of income of any trust or estate, or by reason of any distribution from a trust or estate, with certain exceptions. Provides that the grantor is treated as the owner of the trust and therefore is taxed directly on the income of the trust in the following circumstances: (1) where the grantor possesses certain prohibited administrative powers with respect to the trust; (2) where the grantor or the grantor's spouse retains the power to revoke the trust; or (3) where the grantor or grantor's spouse has the power to control the income of the trust in certain respects. Provides that a person other than the grantor is treated as the owner of a trust where that person has a power to revoke the trust or retains one of the three powers listed in the preceeding sentence. Permits the executor to elect to extend the taxable year of the decedent until the end of the decedent's normal taxable year, instead of having the decedent's final taxable year terminate on the date of death. Provides that income of a trust required to be paid by the trust pursuant to a divorce decree or separate maintenance agreement shall be allowed as a deduction to the trust and such amount shall be included in the gross income of the wife. Exempts from such inclusion and deduction amounts payable for the support of minor children. Requires gain to be recognized by the transferor where property is transferred to a trust in exchange for an interest in other trust property and the trust would be considered an investment company if it were a corporation. Allows one $20,000 exemption for purposes of the minimum tax with respect to: (1) the estate of a decedent; and (2) trusts with respect to which a decedent is the grantor. Provides for the allocation of such amount among such trusts. Provides that distributions from foreign trusts are subject to tax at the top marginal rate applicable to individuals (38 percent), unless the fiduciary of the trust elects to be subject to current taxation of the United States by being treated as a domestic trust. Subtitle C: Generation Skipping Transfers - Amends the generation-skipping transfer tax, which attempts to determine the additional gift or estate tax that would have been paid if property has been transferred directly from one generation to another, to impose a simplified tax determined at the maximum gift and estate tax rate (currently the tax rate is 55 percent). Expands the generation-skipping transfer tax to include direct generation-skipping transfers (e.g., a direct transfer from a grandparent to a grandchild) as well as transfers in which benefits are shared by beneficiaries in more than one younger generation. Provides for an exemption of transfers up to S1,000,000 per grantor from the tax. Provides additional exemptions from the tax for certain transfers that are not subject to gift tax and for direct transfers to grandchildren of the transferor if the aggregate amount of such transfers does not exceed $2,000,000 per grandchild. Defines various terms relating to generation-skipping transfers. Sets forth the methods for determining the taxable amount for various generation-skipping transactions. Sets forth various special rules and definitions. Directs the Secretary to prescribe by regulation the person who is required to make the return with respect to the generation-skipping tax and the time the return is to be filed. Title XIII: Compliance and Tax Administration - Part I: Revision of Certain Penalties, Etc. - Increases the maximum penalty from $50,000 to $100,000 for: (1) failure to file certain information returns with the IRS; (2) failure to supply a copy of that information return to the taxpayer; and (3) failure to supply taxpayer information numbers. Imposes a penalty for failure to include correct information either on an information return filed with the IRS or on the copy of that information return supplied to the taxpayer. Establishes the amount of the penalty at five dollars for each return or statement, with a maximum penalty not to exceed $20,000. Allows a waiver of these penalties if the failure is due to reasonable cause and not to willful neglect. Sets forth certain special rules with respect to the application of these penalties. Increases the penalty for failure to pay tax in specified situations from one-half of one percent per month to one percent per month. Repeals the provision allowing the offset of the failure to file a return penalty against the failure to pay tax penalty. Provides that the penalty for negligence shall apply to all taxes imposed under the Internal Revenue Code. Includes within the scope of the definition of negligence both any failure to make a reasonable attempt to comply with the provisions of the tax law as well as careless, reckless, or intentional disregard of the rules or regulations. Expands the scope of the special negligence penalty for failure to include in income interest and dividends shown on an information return to include failure to show properly on the taxpayer's return any amount that is shown on any information return. Part II: Estimated Tax Payments by Individuals - Increases from 80 percent to 90 percent the proportion of the current year's tax liability that taxpayers must make as estimated tax payments in order to avoid the estimated tax penalty. Part III: Provisions Relating to Attorneys' Fees and Exhaustion of Administrative Remedies - Extends for four years, from December 31, 1985, to December 31, 1989, the provisions providing for awards of reasonable litigation costs, including attorneys' fees and court costs, to a taxpayer who prevails over the Federal government in a tax case in any Federal court. Gives the Court in tax cases the discretion to assess all or a portion of any award against IRS employees if the Court determines that the proceeding resulted from any arbitrary or capricious act of the employee. Requires the Secretary to submit a report within 90 days after the close of each calendar year beginning after 1985 and before 1990 to the House Committee on Ways and Means and the Senate Committee on Finance that includes: (1) the number of awards made during such calendar year; (2) the number of proceedings in which claims for such awards were made by substantially prevailing parties during such calendar year; and (3) the aggregate amount payable by the United States pursuant to the awards so made during such calendar year. Authorizes the Tax Court to impose a $120 penalty on the taxpayer if the Tax Court determines that the taxpayer did not use reasonable efforts in good faith in attempting to resolve the tax case administratively with the Secretary. Requires that a joint annual report from the Secretary and the Tax Court concerning closing cases more efficiently in Tax Court inventory be submitted to the House Committee on Ways and Means and the Senate Committee on Finance. Part IV: Tax Administration Provisions - Authorizes the Secretary and the taxpayer to mutually consent to the recission of any notice of deficiency mailed to the taxpayer. Provides that where an IRS official fails either to perform a ministerial act in a timely manner or makes an error in performing a ministerial act, the IRS has the authority to abate the interest attributable to such delay. Suspends the compounding of interest on previously accrued interest, starting 30 days after a taxpayer has filed a waiver of restrictions on assessment of the underlying taxes and ending when a notice and demand is issued to the taxpayer. Prohibits the IRS from levying on any amount payable to an individual as a service-connected disability benefit. Permits the Secretary to sell up to $100,000 of personal property used in violation of the tax laws. Permits claimants to require a judicial forfeiture action by posting a $2,500 bond. Treats the use of an automobile by a special agent of the Internal Revenue Service in the same manner as use of an automobile by an officer of any other law enforcement agency for purposes of the substantiation rules for expenses or the income and wage inclusion rules. Part V: Interest Provisions - Provides that the interest rate which the Secretary must pay to the taxpayer on the overpayment of taxes must be the three-month Treasury bill rate plus two percentage points. Requires that the interest rate that taxpayers pay to the Secretary on underpayment of taxes shall be the three-month Treasury bill rate plus three percentage points. Requires the Secretary to determine the short-term Federal rate each quarter. Provides that interest is imposed on underpayment of the accumulated earnings tax from the due date (without regard to extensions) of the income tax return for the year the tax is initially imposed. Part VI: Modification of Withholding Allowances - Directs the Secretary to modify the withholding allowance schedules to reflect the new rate schedules promulgated by this Act. Repeals the authority of the IRS to issue regulations permitting employees to request decreases in withholding. Part VII: Information Reporting Provisions - Requires the reporting of real estate transactions to the IRS by the settlement attorney or other stakeholder to the transaction. Requires the head of every Federal executive agency to file an information return indicating the name, address, and taxpayer identification number of each person with which the agency enters into a contract. Requires any person required to file a return for the taxable year to include on such return the amount of interest received or accrued during the taxable year that is exempt from tax. Part VIII: Report on Return-Free System - Requires the Secretary to prepare a report on a return-free system for the Federal income tax of individuals which would include: (1) the identification of classes of individuals who would be permitted to use a return-free system; (2) how such system would be phased in; (3) what additional resources the IRS would need to carryout such a system; and (4) the type of changes to the Internal Revenue Code which would inhibit or enhance the use of such system. Part IX: Certain Diesel Fuel Taxes May Be Imposed on Sales to Retailers - Provides that the excise tax on diesel fuel for highway vehicles may be imposed on the sale to the retailer by the wholesaler (jobber) or by the manufacturer where the sale is direct to the retailer. Title XIV: Miscellaneous Provisions - Excludes from income amounts paid to the foster parent for caring for a qualified foster child in the foster parent's home. Provides that the tax relief provisions applicable with respect to Vietnam MIA's (and their spouses) that expired after 1982 are retroactively reinstated and made permanent. Imposes an excise tax of ten percent on amounts paid for U.S. television and radio broadcast rights for Olympic events. Imposes the tax on the business or government receiving the payment for the broadcast rights. Establishes a new trust fund in the Treasury, designated the "United States Olympic Trust Fund," to receive amounts equivalent to the revenues from the new ten percent excise tax. Permits the payment of amounts from the trust fund to the U.S. Olympic Committee. Provides that in the case of any tax-exempt organization, the term unrelated trade or business does not include any trade or business of such organization that consists of exchanging names and addresses of donors to (or members of) such organization with another such tax-exempt organization, or of renting donor names and addresses to another such tax-exempt organization. Provides that the term unrelated trade or business of a tax-exempt organization does not include activities of such organization relating to the distribution of low-cost articles incidental to the solicitation of charitable contributions. Permits a housing cooperative, where the cooperative charges such tenant-stockholder with a portion of the cooperative's interest and taxes in a manner that reasonably reflects the cost to the cooperative of the interest and taxes attributable to such tenant-stockholder's dwelling unit, to make an election whereby the share of the cooperative's interest and taxes that each tenant-stockholder is permitted to deduct would be the amounts that were so separately allocated and charged. Provides that certain royalties relating to computer software are not treated as personal holding company income, and therefore not subject to the additional tax on personal holding company income, if the recipient: (1) is actively engaged in the trade or business of producing, developing, or manufacturing computer software; (2) derives more than half of its income from software royalties; (3) incurs substantial trade or business expenses, or research and development expenses; and (4) distributes most of its passive income other than software royalties. Provides special rules with respect to taxpayers who are members of an affiliated group and receive royalties with respect to the licensing of computer software. Allows certain securities dealers to exclude from personal holding company income certain income received on securities or money market instruments held in inventory if the taxpayer: (1) derives at least 50 percent of its income from the active conduct of the business of dealing in securities; (2) distributes most of its passive income not derived form the business of dealing in securities; and (3) incurs substantial trade or business expenses relating to the business of dealing in securities. Amends the Social Security Act to provide 50 percent Federal matching funds to States to pay for "nonrecurring adoption expenses" relating to the adoption of a special needs child. Title XV: Technical Corrections - Subtitle A: Related to the Tax Reform Act of 1984 - Chapter 1: Amendments Related to Title I of the Act - Permits a taxpayer to elect to have the amendment of the Tax Reform Act of 1984 that defers the finance lease rules apply to any agreement entered into before March 7, 1984. Restores the year 1985 to the table of years for which the three percent telephone excise tax applies. Clarifies the rules relating to the electronic funds transfer of alcohol taxes to provide that all corporations that are members of a controlled group of corporations are treated as one taxpayer for purposes of the electronic funds transfer. Makes certain modifications of the Code to clarify the rules relating to the tax-exempt entity leasing provisions. Repeals the overlapping regulatory authority relating to high-technology equipment. Provides that any portion of a property that is owned or leased by a partnership that is treated as tax-exempt use property is ineligible for the investment tax credit. Clarifies the treatment of certain aircraft leased to foreign persons for purposes of the recapture of investment tax credit rules. Provides that thrift institutions cannot avoid the restriction on property leased to thrift institutions by the use of a partnership. Provides that the tax credit for rehabilitation expenditures is allowable on buildings leased to thrift institutions in accordance with the rules applicable to buildings leased to tax-exempt entities. Provides that the determination of whether a tax-exempt partner's share of partnership items is treated as derived from an unrelated trade or business is to be made without regard to the debt-financed income rules. Makes certain modifications in the tax treatment of certain bonds and other debt instruments. Clarifies the provisions limiting the dividends received deduction for dividends received by a corporate shareholder with respect to debt-financed portfolio stock. Disallows the dividend received deduction where the holding period requirement is not met, without regard to whether the stock has been disposed of. Applies this rule to obligations acquired after the date of enactment of this Act. Provides that if a taxpayer holds stock of a regulated investment company for six months or less, any loss on the sale or exchange of that stock is disallowed to the extent the taxpayer received exempt-interest dividends with respect to that stock. Provides an exception to this rule where the dispositions are pursuant to a periodic liquidation plan. Gives the Secretary the authority to shorten the six-month period requirement. Provides that, except to the extent provided by the Secretary, no dividends paid deduction will be allowed for purposes of the accumulated earnings tax, in the case of stock redemption by a mere holding or investment company which is not a regulated investment company. Makes certain modifications in the tax rules related to affiliated groups of corporations. Makes certain changes in the definition of a corporation's "earnings and profits." Modifies the rules relating to corporate reorganizations to provide that the transferor corporation does not recognize gain or loss on the transfer to the acquiring corporation pursuant to a plan of reorganization, without regard to whether properties received are distributed pursuant to the plan of reorganization. Makes the collapsible corporation provisions with respect to the recognition of ordinary income or loss applicable whether or not the stock has been held for six months. Makes certain changes in the rules relating to the taxation of "parachute payments" made by corporations to disqualified individuals. Modifies the partnership tax provisions with respect to: (1) retroactive allocation of cash basis items; (2) disguised sales transactions; (3) transfer partnership interests by corporations; and (4) distributions which are treated as exchanges. Modifies the like-kind exchange rules allowing for the non-recognition of gain to provide that like-kind property includes property identified as the property to be received by the taxpayer on or before (rather than only before) the date which is 45 days after the date on which the taxpayer relinquishes property. Provides that the rules regarding the treatment of two or more trusts as one trust will not apply to any trust which was irrevocable on March 1, 1984, except to the extent corpus is transferred to the trust after that date. Makes certain changes in the tax accounting rules relating to: (1) premature accrual of certain payments to insurance companies for indemnification for certain tort claims; (2) tax shelters; (3) mine reclamation and similar costs; (4) nuclear power plant decomissioning expenses; and (5) deferred payment for services. Makes modifications in the tax straddle provisions relating to: (1) subchapter S corporations; (2) amounts received for loaning securities; (3) straddles consisting of stock; and (4) losses from pre-1981 straddles. Permits the taxpayer to elect to recover the cost of low-income housing using a straight-line method of depreciation over a 15-year period (but not 18 years). Requires the mid-month convention for depreciation to be applied whenever a depreciation computation is made with respect to certain classes of real property. Provides that the cost of certain real property (which does not include low-income housing) financed by the proceeds from industrial development property cannot be recovered more rapidly than on a straight-line basis of depreciation over a fixed period of years, using a mid-month convention. Modifies the rules relating to the depreciation of property by certain transferees of recovery property. Prohibits the use of accelerated methods of depreciation with respect to films, video tapes, and sound recordings. Provides that investment credit property the reconstruction of which is completed by the taxpayer qualifies as new investment credit property. Provides that a domestic corporation which earns less than 20 percent of its gross income from U.S. sources will be treated as a U.S.-owned foreign corporation and thus will be subject to the rules maintaining the source of U.S. source income to foreign income. Requires that the source maintenance rules apply notwithstanding any contrary U.S. treaty obligations, even those entered into after the Act's date of enactment, unless the treaty clearly expresses an intent to override the rules by specific reference. Modifies the rules with respect to maintaining the character of interest income for foreign personal holding companies to insure that there will be no possibility of converting interest income into noninterest income subject to the overall foreign tax credit. Modifies the rules relating to the factoring of income with respect to certain controlled foreign corporations. Makes certain modifications in the rules concerning the repeal of the 30 percent withholding tax requirement on the gross amount of U.S. source investment income payments to foreign persons. Clarifies the rules concerning the taxation of original issue discount obligations of foreign investors. Modifies the rules respecting the disposition of U.S. real property interests by foreigners. Provides that the transfer of stock by a domestic corporation to foreign persons pursuant to a distribution of stock and securities of a controlled corporation will give rise to the recognition of gain on such a transaction, to the extent provided by regulations issued by the Secretary. Modifies the rules concerning the taxation of U.S. shareholders in foreign personal holding companies. Clarifies the treatment of certain indirect transfers of stock in a U.S. corporation for newly issued stock (or treasury stock) of a foreign corporation. Provides that the regulations that the Secretary is to prescribe pertaining to "stapled stock" entities may include regulations providing that any tax imposed on a foreign corporation that is treated as a U.S. corporation may, if that corporation does not pay the tax, be collected from the U.S. corporation to which the foreign stock is stapled or from the shareholders of the foreign corporation. Provides that the "stapled stock" rules will not apply if it is established that both the stapled foreign corporation and the U.S. corporation to which it is stapled are foreign owned. Clarifies the definition of foreign base company service income of controlled foreign corporations with respect to insurance or reinsurance services. Modifies the definition of resident alien to provide that days spent working in the United States as a teacher or trainee during four calendar years in any seven-year period do not count as days of U.S. presence for purposes of the substantial presence test for a resident alien status. Makes miscellaneous changes with respect to the compliance provisions of the Code. Provides that, for purposes of the tax benefit rule, an amount is excludible from gross income only to the extent that it does not reduce a taxpayer's income tax. Modifies provisions with respect to the tax treatment of loans with below-market interest rates by treating certain term loans as demand loans for the purpose of determining the timing of deemed interest and compensation payments. Exempts certain loans to Israel from the below-market interest rate rules. Directs the Secretary to issue regulations applying the "matching principles" with respect to deductions generally applicable to related party transactions in cases in which the person to whom the payment is to be made is not a U.S. person. Makes several adjustments in the dividends received deduction for dividends allocable to post-1984 Federal Home Loan Mortgage Corporation income. Modifies the rules relating to the maximum amount of investment tax credit and depreciation that a taxpayer may claim with respect to a passenger automobile or listed property which is required to be used in a trade or business a certain percent of the time. Chapter 2: Amendments Related to Title II of the Act - Makes certain technical corrections with respect to the taxation of life insurance companies. Chapter 3: Amendments Related to Title III of the Act - Clarifies the rule disqualifying certain foundations from the rate reduction of the excise tax imposed on the net investment income of a private foundation to provide that the rate reduction is not available if the foundation was liable for the excise tax with respect to any year in certain base period years. Chapter 4: Amendments Related to Title IV of the Act - Makes clerical and conforming amendments to the tax simplification provisions of the 1984 Act, including such items as individual estimated tax, domestic relations, at-risk rules, administrative provisions, distilled spirits, the Tax Court, and income tax credits. Chapter 5: Amendments Related to Title V of the Act - Makes technical corrections with respect to the employee benefit provisions of the 1984 Act with respect to: (1) the welfare benefit plan provisions; (2) qualified pension, profit-sharing, and stock bonus plans; (3) fringe benefit provisions; (4) employee stock ownership plans; and (5) certain miscellaneous provisions. Chapter 6: Amendments Related to Title VI of the Act - Makes certain technical corrections with respect to the tax-exempt bond provisions of the Code, such as mortgage subsidy bonds and mortgage credit certificates and private activity bonds. Chapter 7: Miscellaneous Provisions - Clarifies the tax treatment of stock transfers between 50-percent owned corporations. Makes miscellaneous technical corrections with respect to certain pension provisions. Makes technical corrections with respect to the tax provisions relating to foreign sales corporations and domestic international sales corporations. Allows a full 15-cents-a-gallon refund of excise tax on diesel fuel used in a school bus while engaged in the transportation of students and school employees. Provides that the additional six percent excise tax on certain piggyback trailers will not apply to a piggyback trailer after six years have elapsed from the date of the first retail sale of the trailer. Provides that certain helicopter uses are exempt from aviation excise taxes. Modifies the acquisition of indebtedness rules with respect to certain exempt organizations. Clarifies the provision permitting the nonrecognition of gain on the rollover of gain on the sale of a personal residence in the case of military personnel stationed outside the United States. Provides that the expanded prohibition on current deduction of costs and other losses incurred in connection with the demolition of buildings applies only to demolitions commencing after July 18, 1984, in the case of buildings other than certified historic structures. Modifies certain recordkeeping requirements of regulated investment companies. Allows individual taxpayers until April 15, 1985, and corporations until March 15, 1985, (the filing date for calendar year returns) to pay their full 1984 income tax liabilities without incurring any additions to tax on account of underpayments of estimated tax to the extent that the underpayments are attributable to changes in the law made by the Tax Reform Act of 1984. Makes certain modifications in the requirements with respect to the tax credit for the qualified clinical testing of certain drugs that are necessary to obtain the approval of the Food and Drug Administration. Clarifies the provisions as to the allowability of the tax credit for production of fuels from nonconventional sources. Repeals the requirement that the Joint Committee on Taxation submit an annual report to the Congress on proposed IRS tax refunds and credits submitted to the Committee for its review. Provides that any organization that is exempt from tax and that is engaged primarily in providing electric service on a mutual or cooperative basis is eligible to maintain a qualified cash or deferred arrangement for employees. Clarifies the definition of "newly discovered oil" for purposes of the imposition of the windfall profit tax. Provides that medicinal alcohol produced in Puerto Rico and the Virgin Islands is eligible for refunds of the tax on distilled spirits paid when the alcohol is brought into the United States. Provides that these amendments made to the Tax Reform Act of 1984, unless otherwise provided, will take effect as if included in the original legislation. Chapter 8: Effective Date - Sets forth effective date provisions. Subtitle B: Related to Other Programs Affected by the Deficit Reduction Act of 1984 - Chapter 1: Amendments Related to Social Security Act Programs - Amends the Internal Revenue Code to disqualify certain church employees from a religion based exception to the tax on self-employment income. Amends the Code and title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to exclude certain church employee income from the computation of other net self-employment earnings, but lowers the sum required before church employee income qualifies as self-employment income. Authorizes a church to revoke its election to have services performed in its employ excluded from employment for taxation purposes. Amends title XVIII (Medicare) of the Act to make the late enrollment penalty and special enrollment period accommodations of part B (Supplemental Medical Insurance) specifically applicable to individuals who have attained age 65 and were not enrolled or reenrolled because they were covered by work-related group health insurance, or their spouse's work-related group health insurance. Makes technical corrections to other portions of the Social Security Act. Chapter 2: Amendments Related to Unemployment Compensation Program - Makes certain technical amendments to the Federal Unemployment Tax Act. Chapter 3: Amendments Related to Trade and Tariff Programs - Amends the Tariff Schedules of the United States to make technical and conforming amendments. Imposes a duty on silicon electrical steel. Amends the Tariff Act of 1930 to provide that the administering authority with respect to a countervailing duty investigation, may not accept any agreement from a foreign country to eliminate or offset a subsidy or to cease exports of subsidized merchandise unless such agreement ensures that the quantity of merchandise covered in the agreement does not exceed the quantity of such merchandise exported to the United States during the most recent representative period as determined by the administering authority. Sets forth specified provisions relating to the marking of imported articles. Provides that the performing of incidental operations (including testing, cleaning, repacking, and inspecting) on imported merchandise or merchandise of the same kind and quality does not amount to manufacture or production for drawback (refund) purposes. Amends the Trade Act of 1974 to make technical and conforming amendments. Amends the Trade and Tariff Act of 1984 to make technical and conforming amendments. Sets forth specified provisions relating to certain articles given duty-free treatment. Amends the Caribbean Basin Economic Recovery Act to make technical and conforming amendments. Subtitle C: Technical Corrections Related to the Retirement Equity Act of 1984 - Amends the Internal Revenue Code (IRC) and the Employee Retirement Income Security Act of 1974 (ERISA) to make technical corrections and other revisions related to the Retirement Equity Act of 1984 (REA). Sets forth amendments related to REA modifications of minimum participation and vesting standards for employee benefit plans. Requires class-year plans, in general, to provide that a participant's rights to benefits derived from employer contributions for any plan year are nonforfeitable not later than when such participant has performed services for the employer as of the close of each of five plan years (whether or not consecutive after the plan year for which the contributions were made), but allows for such plans to provide for forfeiture of such rights if the participant has not performed such services as of the close of each of any five consecutive plan years after such plan year (i.e. a five-year break in service). Requires, for purposes of determining whether any distribution which becomes payable to the recipient on account of the employee's separation from service is a lump sum distribution, that the balance to the credit of the employee be determined without regard to any increase in vesting which may occur if the employee is reemployed by the employer. Provides for recapture of such reduction in tax, in certain cases. Provides, under repayment requirements relating to withdrawals of mandatory contributions, that a defined contribution plan may provide that such a repayment must be made before a participant has a period of five consecutive one-year breaks in service (currently any one-year break in service). Reduces from 25 years to 21 years the age which plan participants may be required to attain for purposes of simplified employment pensions. Sets forth amendments related to REA requirements of joint and survivor annuity and preretirement survivor annuity. Provides that qualified preretirement survivor annuity rules apply in the case of death before the annuity starting date. Provides that qualified joint and survivor annuity rules apply in the case of death on or after the annuity starting date. Provides that the transferee plan rule applies only with respect to: (1) transfers made after December 31, 1984; and (2) the transferred assets if the plan separately accounts for assets and any income therefrom. Requires spousal consent for: (1) using plan assets as security for loans; and (2) changes in designations. Provides that, in the case of a participant hired after age 35, the period for giving notice to the participant of the right to waive a qualified preretirement survivor annuity is a reasonable period after the date of hire. Makes certain clerical amendments. Sets forth amendments related to special rules for assignments in divorce, etc., proceedings (which REA added to IRC and ERISA). Provides that such special rules for determining the taxability of benefits subject to a qualified domestic relations order apply only to distributions made to an alternate payee who is the spouse or the former spouse of the participant. Specifies that the 18-month period during which benefits may be deferred begins with the date on which the first payment would be required to be made under the domestic relations order if there were no deferral. Directs the Secretary of the Treasury to prescribe regulations to coordinate specified requirements (and regulations issued by the Secretary of Labor thereunder) affecting qualified domestic relations orders with the overall qualification requirements. Waives certain distribution requirements which prohibit payment of benefits before termination of employment. Sets forth amendments related to the requirement under IRC, as amended by REA, that a written explanation be given to recipients of distributions eligible for rollover. Defines "eligible rollover distribution" for purposes of such requirement. Sets forth amendments related to provisions, under ERISA as amended by REA, for the treatment of certain plan amendments as reducing benefits. Sets forth amendments related to the REA transitional rule for requirement of joint and survivor annuity and preretirement survivor annuity. Sets forth amendments related to REA provisions for treatment of certain participants who perform services on or after January 1, 1976.
Resolution· HRESH.Res. 327 (99th)passed
United States · United States Congress · 3 December 1985
Sets forth the rule for the consideration of H.J. Res. 465 (continuing appropriations).
Bill· SS. 1880 (99th)open
United States · United States Congress · 22 November 1985
Amends the Internal Revenue Code to allow construction workers to take an income tax deduction for travel expenses incurred while away from home in pursuit of a trade or business if: (1) the job site is at least 30 miles from the residence of the construction worker; and (2) the job site is a temporary job site or a remote job site.
Bill· SS. 1877 (99th)open
United States · United States Congress · 21 November 1985
Savers and Investors Act of 1985 - Amends the Internal Revenue Code to provide that any tax deferred account is exempt from taxation except for the taxes imposed on unrelated business income. Defines "tax deferred account" as a trust created for the exclusive benefit of an individual or his beneficiaries but only if: (1) no contributions other than cash are accepted; (2) the trustee is a bank or other person satisfactory to the Secretary of the Treasury; (3) no part of the trust funds are invested in life insurance contracts; (4) the interest of the investor in the account is nonforfeitable; and (5) the assets will not be commingled with other property except in a common trust fund or common investment fund. Provides that earnings distributed from tax deferred accounts are taxed as ordinary income to the distributee. Permits the rollover from one tax deferred account to another tax deferred account without the imposition of tax, provided such transaction occurs not later than the 60th day after the distribution. Sets forth special rules concerning the termination of the account in certain situations, the pledging of the account as security, divorce, and the basis in the account after death. Requires the trustee of a tax deferred account to make certain reports as required by the Secretary of the Treasury.
Law· HJRESH.J.Res. 465 (99th)enacted
United States · United States Congress · 21 November 1985
Makes continuing appropriations for FY 1986 as provided in the following Acts as passed by the House of Representatives: (1) the Agriculture, Rural Development, and Related Agencies Appropriations Act, 1986; (2) the Department of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1986; (3) the Department of Defense Appropriations Act, 1986; (4) the Department of the Interior and Related Agencies Appropriations Act, 1986; (5) the Department of Transportation and Related Agencies Appropriations Act, 1986; and (6) the District of Columbia Appropriations Act, 1986. Makes continuing appropriations for FY 1986 as provided in the conference report as passed the House of Representatives for each of the following Acts: (1) the Military Construction Appropriations Act, 1986; and (2) the Treasury, Postal Service, and General Government Appropriations Act, 1986, except as specified. Makes continuing appropriations as provided in: (1) the Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 1986, conference report as filed in the House; and (2) the Foreign Assistance and Related Programs Appropriations Act, 1986, as reported to the House of Representatives, with specified modifications. Makes continuing appropriations for FY 1986 for the following activities under the terms and conditions provided in applicable appropriations Acts for FY 1985, at the current rate: (1) worker training, job search allowances, and relocation allowances under the Trade Act of 1974; (2) activities under the Public Health Service Act, except that appropriations for title X may not be used to advocate or provide abortion procedures to any pregnant woman unless the woman's life would be endangered by carrying the fetus to term; (3) refugee and entrant assistance activities under the Immigration and Nationality Act and specified activities under the Refugee Act of 1980 and the Refugee Education Assistance Act of 1980; (4) minority science improvement activities under the Omnibus Budget Reconciliation Act of 1981; and (5) payment to the Corporation for Public Broadcasting under the Communications Act of 1934, provided that the current rate shall be the payment provided for FY 1987. Prohibits the use of any such appropriations to initiate or resume any project or activity for which appropriations, funds, or authority were not available during FY 1985. Provides that appropriations under this Act shall remain available from December 13, 1985, until the earlier of the following: (1) enactment into law of an appropriation for any project or activity provided for in this Act; (2) enactment of the applicable appropriations Act by both Houses without any provision for such project or activity; or (3) September 30, 1986. Directs the Secretary of Agriculture to issue regulations to: (1) provide for nonrecourse loans on basic agricultural commodities at such levels as will reflect a fair return to the farm producer above the cost of production; (2) provide for payment by the purchaser, rather than by appropriation, for basic commodities sold for domestic use; and (3) enable producers of any basic agricultural commodity to provide the amount needed for domestic consumption, to maintain the pipeline, and to regain and retain by competitive sales the normal U.S. share of the world market. Requires the Secretary to: (1) determine on a case-by-case basis, which agricultural borrowers are unable to continue making principal and interest payments as a result of embargoes on the sale of U.S. agricultural products or the failure to offer surplus commodities for sale in world markets at competitive prices; (2) suspend such payments and forego foreclosure on Government loans to such borrowers for 12 months or until an adjustment is agreed upon; and (3) request other creditors of such borrowers to postpone payments due. Prohibits the expenditure of funds made available to the Office of the Secretary of the Interior for FY 1986 to enter into any agreement with respect to Westlands Water District v. United States unless specifically authorized by the Congress. Makes specified funds available for the Smithsonian Institution, restoration and renovation of buildings, for the Freer Gallery of Art. Allows persons other than members of the United States Holocaust Memorial Council to be designated as members of committees associated with the Council subject to appointment by the Chairman of the Council. Provides that the individual holding the position of Chief of the United States Capitol Police on January 1, 1985, shall be considered to have been appointed to that position before January 1, 1984, for purposes of civil service retirement and Old Age, Survivors and Disability Insurance coverage. Grants such individual 60 days to elect coverage under the civil service retirement system. Directs the Secretary of Transportation to issue in the Federal Register a notice of intent to prepare an environmental impact statement for the construction of the north and south legs of the downtown component of metrorail in Dade County, Florida. Makes continuing appropriations for FY 1986 for a highway construction project along State Route 113 in north-central California that demonstrates methods of reducing motor vehicle congestion and increasing employment. Restricts the availability of appropriations under this Act for the construction of the Central Automated Transit System in Detroit, Michigan. Authorizes the Secretary of the Army to use Reserve Forces to carry out emergency flood recovery and clean up measures in areas of West Virginia, Pennsylvania and Virginia and Gulf Coast areas declared entitled to relief under the Disaster Relief Act of 1974 for flooding occurring on and after August 30, 1985. Specifies conditions under which a Federal agency may allot free building space for child care service for Federal employees. Repeals the termination date of the Federal Employees Flexible and Compressed Work Schedules Act of 1982.