H. R IN THE HOUSE OF REPRESENTATIVES A BILL

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1 I TH CONGRESS ST SESSION H. R. To amend the Internal Revenue Code of to provide relief with respect to estate and gift taxes, small businesses, and government contractors. IN THE HOUSE OF REPRESENTATIVES DECEMBER, 00 Mr. NYE introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend the Internal Revenue Code of to provide relief with respect to estate and gift taxes, small businesses, and government contractors. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION. SHORT TITLE; TABLE OF CONTENTS. (a) SHORT TITLE. This Act may be cited as the Tax Relief for Business Growth and Sustainability Act of 00. (b) TABLE OF CONTENTS. The table of contents for this Act is as follows: Sec.. Short title; table of contents. TITLE I ESTATE AND GIFT TAX REFORM VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt E:\BILLS\H.IH H

2 Sec. 0. Repeal of carryover basis; increased exclusion amount; maximum percent rate. Sec. 0. Increase in deduction for family-owned businesses. Sec. 0. Exclusion from gross estate of value of principal residence. TITLE II TREATMENT OF SMALL BUSINESS STOCK Sec. 0. Full exclusion from gross income of gain from qualified small business stock. Sec. 0. Repeal of alternative minimum tax treatment of qualified small business stock gain as item of tax preference. TITLE III RELIEF FOR GOVERNMENT CONTRACTORS 0 Sec. 0. Repeal of withholding tax on government contractors. TITLE I ESTATE AND GIFT TAX REFORM SEC. 0. REPEAL OF CARRYOVER BASIS; INCREASED EX- CLUSION AMOUNT; MAXIMUM PERCENT RATE. (a) EGTRRA SUNSET NOT TO APPLY. Section 0 of the Economic Growth and Tax Relief Reconciliation Act of 00 shall not apply to title V of such Act (other than subtitles A and E, and sections (d) and (b)(), thereof). (b) $,000,000 APPLICABLE EXCLUSION AMOUNT. Subsection (c) of section 00 of the Internal Revenue Code of is amended by striking all that follows the applicable exclusion amount and inserting. For purposes of the preceding sentence, the applicable exclusion amount is $,000,000.. (c) MAXIMUM ESTATE AND GIFT TAX RATE PER- CENT. Paragraph () of section 00(c) of such Code is HR IH VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H.IH H

3 amended by striking the last items in the table and in- serting the following new item: Over $00, $,00, plus percent of the excess of such amount over $00,000.. (d) EFFECTIVE DATE. The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December, SEC. 0. INCREASE IN DEDUCTION FOR FAMILY-OWNED BUSINESSES. (a) IN GENERAL. () INCREASE. Paragraph () of section 0(a) of the Internal Revenue Code of is amended by striking $,000 and inserting $,000,000. () ALLOWED IN ADDITION TO APPLICABLE CREDIT AMOUNT. Subsection (a) of section 0 of such Code is amended by striking paragraph (). (b) EFFECTIVE DATE. The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December, 00. SEC. 0. EXCLUSION FROM GROSS ESTATE OF VALUE OF PRINCIPAL RESIDENCE. (a) IN GENERAL. Subchapter A of chapter of the Internal Revenue Code of is amended by adding at the end the following new section: HR IH VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H.IH H

4 0 0 HR IH VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H.IH H SEC. 0. PRINCIPAL RESIDENCE. (a) IN GENERAL. For purposes of the tax imposed by section 00, in the case of a decedent who was (at the date of the decedent s death) a citizen or resident of the United States, the value of the taxable estate shall be determined by deducting from the value of the gross estate the adjusted value of any residence if () such residence is included in determining the value of the gross estate, () such residence is located in the United States, and () during the -year period ending on the date of the decedent s death, there have been periods aggregating years during which such residence was owned by the decedent or a member of the decedent s family and used by the decedent or such a member as their principal residence (within the meaning of section ). (b) LIMITATION. The deduction allowed by this section shall not exceed $,000,000. (c) ADJUSTED VALUE. For purposes of this section, the adjusted value of property is the value of such property for purposes of this chapter, reduced by amounts allowable as a deduction in respect to such property under paragraph () of section 0(a)..

5 (b) CLERICAL AMENDMENT. The table of sections for subchapter A of chapter of such Code is amended by adding at the end the following new item: Sec. 0. Principal residence (c) EFFECTIVE DATE. The amendments made by this section shall apply to estates of decedents dying, and gifts made, after December, 00. TITLE II TREATMENT OF SMALL BUSINESS STOCK SEC. 0. FULL EXCLUSION FROM GROSS INCOME OF GAIN FROM QUALIFIED SMALL BUSINESS STOCK. (a) IN GENERAL. Paragraph () of section 0(a) of the Internal Revenue Code of is amended by striking 0 percent of. (b) EFFECTIVE DATE. The amendment made by this section shall apply to taxable years beginning after December, 00. SEC. 0. REPEAL OF ALTERNATIVE MINIMUM TAX TREAT- MENT OF QUALIFIED SMALL BUSINESS STOCK GAIN AS ITEM OF TAX PREFERENCE. (a) IN GENERAL. Subsection (a) of section of the Internal Revenue Code of is amended by striking paragraph (). (b) CONFORMING AMENDMENT. Subclause (II) of section (d)()(b)(ii) of such Code is amended by strik- ing, (), and () and inserting and (). HR IH VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H.IH H

6 (c) EFFECTIVE DATE. The amendments made by this section shall apply to taxable years beginning after December, 00. TITLE III RELIEF FOR GOVERNMENT CONTRACTORS SEC. 0. REPEAL OF WITHHOLDING TAX ON GOVERNMENT CONTRACTORS. Section 0 of the Internal Revenue Code of is amended by striking subsection (t). Æ HR IH VerDate Nov 00 0: Dec 0, 00 Jkt 000 PO Frm 0000 Fmt Sfmt 0 E:\BILLS\H.IH H