152 cosponsors
TABLE OF CONTENTS:
Title I: Social Security Earnings Test
Title II: Repeal of Increase in Tax on Social Security
Benefits
Title III: Treatment of Long-Term Care
Title IV: Senior Citizen Communities
Senior Citizens' Equity Act - Title I: Social Security Earnings Test - Amends title II (Old-Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to increase the monthly exempt amount, under the earnings test, for individuals who have attained retirement age. Sets forth a schedule of monthly adjustments increasing from $1,250 for taxable year 1996 to $2,500 for taxable year 2000 (amounting, by the year 2000, to an annual exempt amount of $30,000 such individuals may earn before being subject to benefit reductions).
Title II: Repeal of Increase in Tax on Social Security Benefits - Amends the Internal Revenue Code to schedule from 1996 through 2000 a reduction from 85 percent to 50 percent the amount of Social Security benefits on which beneficiaries earning more than $34,000 annually ($44,000 for couples) are liable for income tax.
Title III: Treatment of Long-Term Care - Amends the Internal Revenue Code to treat a long-term care insurance contract as an accident or health insurance contract.
(Sec. 301) Restricts the meaning of long-term care insurance contract to a guaranteed renewable contract without cash surrender value: (1) covering only qualified long-term care services and benefits incidental to such coverage; (2) excluding expenses for services or items reimbursable under Medicare (except where Medicare is a secondary payor); and (3) applying all premium refunds and all policyholder dividends or similar amounts to reduce future premiums or increase future benefits.
Limits qualified long-term care services to necessary diagnostic, preventive, therapeutic, and rehabilitative services, as well as maintenance or personal care services prescribed by a licensed health care practitioner for a chronically ill individual in a qualified facility who is unable to perform (without substantial assistance from another individual) at least two activities of daily living (including walking or wheeling, dressing, toileting and bathing, transferring in and out of a bed or chair, and eating).
Makes an individual's home a qualified facility if a licensed health care practitioner certifies that without home care the individual would have to be cared for in a State-licensed or Medicare- or Medicaid-certified nursing, rehabilitative, hospice, or adult day care facility.
Treats as a separate contract subject to this Act, unless the Secretary provides otherwise in regulations, any rider on a life insurance contract that covers long-term care insurance.
Includes in gross income the aggregate amount of benefits received under a long-term care insurance contract that exceeds $200 for any day (adjusted for inflation).
Prescribes a one-year full preliminary term method as the method, in the case of any long-term care insurance contract, for computing reserves for the purposes of determining the taxable income of life insurance companies.
Declares that a health care plan shall not be subjected to an excise tax for failure to satisfy continuation coverage requirements solely by reason of failing to provide coverage under any long-term care insurance contract.
(Sec. 302) Excludes from gross income any benefits (not in excess of $200 per day) received under a long-term care insurance contract, including employer-provided coverage under such a contract.
(Sec. 303) Allows an income tax deduction for qualified long-term care services, subject to specified limits.
(Sec. 304) Treats as a nontaxable exchange the exchange of a contract of life insurance or an endowment or annuity contract for a long-term care insurance contract.
(Sec. 305) Reduces any amounts includible in gross income by reason of distributions from individual retirement plans or 401(k) plans by the aggregate premiums paid by an individual for any long- term care insurance contract for the benefit of such individual or his or her spouse.
(Sec. 306) Excludes from gross income accelerated death benefits paid from life insurance policies for individuals who are terminally ill or permanently confined to a nursing home.
(Sec. 307) Provides for: (1) continuation of long-term care insurance policies existing before January 1, 1996, which meet State insurance requirements; and (2) nonrecognition of gain or loss in the exchange, before January 1, 1996, of existing policies for policies under this Act, except to the extent of any money or property received in addition to a long-term care insurance contract.
Requires the Secretary of the Treasury to report to the Congress on the Department of the Treasury's interpretation of the tax treatment of contracts which provide long-term care services but which are not long-term care insurance contracts under this Act.
Title IV: Senior Citizen Communities - Amends the Fair Housing Act with respect to the exemption for housing for older persons from the prohibition against discrimination based on familial status. Revises the definition of housing for older persons to repeal the requirement that such housing possess significant facilities and services specifically designed to meet the physical or social needs of older persons.
(Sec. 402) Declares that an individual who engages in conduct with a reasonable good faith reliance on the existence of such exemption is not personally liable for money damages for a violation of such Act that the exemption would have vitiated.
Presumes such good faith reliance of a person engaged in the business of residential real estate transactions if: (1) he or she has no actual knowledge that the facility or community is or will be ineligible for such exemption; and (2) the facility or community gives him or her a written certification stating its compliance with the requirements for such exemption.
[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8 Introduced in House (IH)]
1st Session
H. R. 8
To amend the Social Security Act to increase the earnings limit, to
amend the Internal Revenue Code of 1986 to repeal the increase in the
tax on social security benefits and to provide incentives for the
purchase of long-term care insurance, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 4, 1995
Mr. Bunning, Mr. Hastert, Mrs. Kelly, and Mrs. Thurman (for themselves,
Mr. Wicker, Mr. Hoke, Mr. Frisa, Mr. McIntosh, Mr. Shadegg, Mrs.
Johnson of Connecticut, Mr. Chrysler, Mr. Cunningham, Mr. Canady, Mr.
McCollum, Mr. Shays, Mr. Barton of Texas, Mr. Gillmor, Mr. Barr, Mr.
Armey, Mr. Forbes, Mr. Horn, Mrs. Waldholtz, Mr. Tate, Ms. Dunn of
Washington, Mr. Mica, Mr. McHugh, Mr. Crane, Mr. Dornan, Mr. Bachus,
Mr. Smith of Texas, Mr. Weldon of Pennsylvania, Mr. Oxley, Mr.
Rohrabacher, Ms. Danner, Mr. Saxton, Mr. Kim, Mr. Ballenger, Mr.
Callahan, Mr. Talent, Mr. Baker of Louisiana, Mr. Schaefer, Mr. Filner,
Mr. Crapo, Mr. Kolbe, Mr. Hall of Texas, Mr. Paxon, Mr. Thomas, Mr.
Combest, Mr. Coble, Mr. Ehrlich, Mrs. Meyers of Kansas, Mr. Young of
Florida, Mr. Goss, Mr. Stockman, Mr. Smith of Michigan, Mr. Cox, Mr.
Stearns, Mr. Baker of California, Mr. Shaw, Mr. Herger, Mr. Heineman,
Mr. Hancock, Mr. Sensenbrenner, Mrs. Fowler, Mr. Greenwood, Mr. Zimmer,
Mr. Linder, Mr. Hutchinson, Mr. Emerson, Mr. English of Pennsylvania,
Mr. Hostettler, Mr. Jones, Mr. Ensign, Mr. Smith of New Jersey, Mr.
Tiahrt, Mrs. Myrick, Mr. Frelinghuysen, Mr. Houghton, Mrs. Cubin, Mr.
Kingston, Mr. Ewing, Mr. Hastings of Washington, Mr. Ganske, Mr. Weldon
of Florida, Mr. Coburn, Mr. Largent, Mr. Weller, Mr. Lewis of Kentucky,
Mr. Foley, Mr. Inglis of South Carolina, Mr. Lightfoot, Mr. Istook, Mr.
Calvert, Mr. Hobson, Mr. Cremeans, Mr. Knollenberg, Mr. Bilirakis, Mr.
Hayworth, Mr. Fox, Mr. Goodling, Mr. Radanovich, Mr. Roth, Mr. Wamp,
Mr. Gilchrest, Mr. Blute, Mr. Solomon, Mr. Doolittle, Mr. Camp, Mr.
Upton, Mr. Packard, Mr. Stump, Mr. Everett, Mr. Gilman, Mr. Miller of
Florida, Mr. LaTourette, Mr. Royce, Mr. Flanagan, Mr. Burr, Mr. Latham,
Mr. Davis, Ms. Molinari, Mr. Gunderson, Mr. Thornberry, Mr. Riggs, Mr.
Porter, Mr. Allard, Mr. Christensen, Mr. Goodlatte, Mr. Hilleary, Mr.
Cooley, and Mr. Bono) introduced the following bill; which was referred
as follows:
Titles I-III; referred to the Committee on Ways and Means
Title IV, referred to the Committee on the Judiciary
April 3, 1995
Additional sponsors: Mr. Taylor of North Carolina, Mr. Bartlett of
Maryland, Mr. Nussle, Mr. Chabot, Mr. Burton of Indiana, Mr. Ney, Mr.
Norwood, Mrs. Vucanovich, Mr. Hunter, Mr. Manzullo, Mr. Livingston, Mr.
Collins of Georgia, Mr. Sam Johnson of Texas, Mr. Walker, Mr. Moorhead,
Mrs. Seastrand, Mr. McKeon, Mr. Dreier, Mr. Roberts, Mr. Pombo, Mr.
Salmon, Mr. Fields of Texas, Mr. Souder, Mr. Spence, and Mr. Gutknecht
_______________________________________________________________________
A BILL
To amend the Social Security Act to increase the earnings limit, to
amend the Internal Revenue Code of 1986 to repeal the increase in the
tax on social security benefits and to provide incentives for the
purchase of long-term care insurance, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Senior Citizens' Equity Act''.
TITLE I--SOCIAL SECURITY EARNINGS TEST
SEC. 101. ADJUSTMENTS IN MONTHLY EXEMPT AMOUNT FOR PURPOSES OF THE
SOCIAL SECURITY EARNINGS TEST.
(a) Increase in Monthly Exempt Amount for Individuals Who Have
Attained Retirement Age.--Section 203(f)(8)(D) of the Social Security
Act (42 U.S.C. 403(f)(8)(D)) is amended to read as follows:
``(D)(i) Notwithstanding any other provision of this
subsection, the exempt amount which is applicable to an
individual who has attained retirement age (as defined in
section 216(1)) before the close of the taxable year involved
shall be--
``(I) for the taxable year beginning after 1995 and
before 1997, $1,250.00,
``(II) for the taxable year beginning after 1996
and before 1998, $1,583.33\1/3\,
``(III) for the taxable year beginning after 1997
and before 1999, $1,916.66\2/3\,
``(IV) for the taxable year beginning after 1998
and before 2000, $2,250.00, and
``(V) for the taxable year beginning after 1999 and
before 2001, $2,500.00.
``(ii) For purposes of subparagraph (B)(ii)(II), the
increase in the exempt amount provided under clause (i)(V)
shall be deemed to have resulted from a determination which
shall be deemed to have been made under subparagraph (A) in
1999.''.
(b) Conforming Amendment.--The second sentence of section 223(d)(4)
of such Act (42 U.S.C. 423(d)(4)) is amended by striking ``the exempt
amount under section 203(f)(8) which is applicable to individuals
described in subparagraph (D) thereof'' and inserting the following:
``an amount equal to the exempt amount which would have been applicable
under section 203(f)(8), to individuals described in subparagraph (D)
thereof, if section 101 of the Senior Citizens' Equity Act had not been
enacted''.
SEC. 102. EFFECTIVE DATE.
The amendments made by section 101 shall apply with respect to
taxable years beginning after 1995.
TITLE II--REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY BENEFITS
SEC. 201. REPEAL OF INCREASE IN TAX ON SOCIAL SECURITY BENEFITS.
(a) In General.--Subsection (a) of section 86 of the Internal
Revenue Code of 1986 (relating to social security and tier 1 railroad
retirement benefits) is amended by adding at the end the following new
paragraph:
``(3) Phaseout of additional amount.--In the case of any
taxable year beginning in a calendar year after 1995 and before
2000, paragraph (2) shall be applied by substituting the
percentage determined under the following table for `85
percent' each place it appears:
``In the case of a taxable
year beginning in calendar The percentage is:
year:
1996.......................
75 percent
1997.......................
65 percent
1998.......................
60 percent
1999.......................
55 percent.''
(b) Termination of Additional Amount.--Paragraph (2) of section
86(a) of such Code is amended by adding at the end the following new
flush sentence:
``This paragraph shall not apply to any taxable year beginning
after December 31, 1999.''
(c) Conforming Amendment.--Subparagraph (A) of section 871(a)(3) of
such Code is amended--
(1) by striking ``85 percent'' and inserting ``50
percent'', and
(2) by inserting before the last sentence the following new
flush sentence:
``In the case of any taxable year beginning in a calendar year
after 1995 and before 2000, subparagraph (A) shall be applied
by substituting the percentage determined for such calendar
year under section 86(a)(3) for `50 percent'.''
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1995.
TITLE III--TREATMENT OF LONG-TERM CARE
SEC. 301. TREATMENT OF LONG-TERM CARE INSURANCE OR PLANS.
(a) General Rule.--Subpart E of part I of subchapter L of chapter 1
of the Internal Revenue Code of 1986 is amended by inserting after
section 818 the following new section:
``SEC. 818A. TREATMENT OF LONG-TERM CARE INSURANCE OR PLANS.
``(a) General Rule.--For purposes of this part, a long-term care
insurance contract shall be treated as an accident or health insurance
contract.
``(b) Long-Term Care Insurance Contract.--
``(1) In general.--For purposes of this part, the term
`long-term care insurance contract' means any insurance
contract issued if--
``(A) the only insurance protection provided under
such contract is coverage of qualified long-term care
services and benefits incidental to such coverage,
``(B) such contract does not cover expenses
incurred for services or items to the extent that such
expenses are reimbursable under title XVIII of the
Social Security Act or would be so reimbursable but for
the application of a deductible or coinsurance amount,
``(C) such contract is guaranteed renewable,
``(D) such contract does not have any cash
surrender value, and
``(E) all refunds of premiums, and all policyholder
dividends or similar amounts, under such contract are
to be applied as a reduction in future premiums or to
increase future benefits.
``(2) Special rules.--
``(A) Per diem, etc. payments permitted.--A
contract shall not fail to be treated as described in
paragraph (1)(A) by reason of payments being made on a
per diem or other periodic basis without regard to the
expenses incurred during the period to which the
payments relate.
``(B) Contract may cover medicare reimbursable
expenses where medicare is secondary payor.--Paragraph
(1)(B) shall not apply to expenses which are
reimbursable under title XVIII of the Social Security
Act only as a secondary payor.
``(C) Refunds of premiums.--Paragraph (1)(E) shall
not apply to any refund of premiums on surrender or
cancellation of the contract.
``(c) Qualified Long-Term Care Services.--For purposes of this
section--
``(1) In general.--The term `qualified long-term care
services' means necessary diagnostic, preventive, therapeutic,
and rehabilitative services, and maintenance or personal care
services, which--
``(A) are required by a chronically ill individual
in a qualified facility, and
``(B) are provided pursuant to a plan of care
prescribed by a licensed health care practitioner.
``(2) Chronically ill individual.--
``(A) In general.--The term `chronically ill
individual' means any individual who has been certified
by a licensed health care practitioner as--
``(i)(I) being unable to perform (without
substantial assistance from another individual)
at least 2 activities of daily living (as
defined in subparagraph (B)) for a period of at
least 90 days due to a loss of functional
capacity, or
``(II) having a level of disability similar
(as determined by the Secretary in consultation
with the Secretary of Health and Human
Services) to the level of disability described
in subclause (I), or
``(ii) having a similar level of disability
due to cognitive impairment.
``(B) Activities of daily living.--For purposes of
subparagraph (A), each of the following is an activity
of daily living:
``(i) Mobility.--The process of walking or
wheeling on a level surface which may include
the use of an assistive device such as a cane,
walker, wheelchair, or brace.
``(ii) Dressing.--The overall complex
behavior of getting clothes from closets and
drawers and then getting dressed.
``(iii) Toileting and bathing.--Each of the
following shall be treated as 1 activity:
``(I) The act of going to the
toilet room for bowel and bladder
function, transferring on and off the
toilet, cleaning after elimination, and
arranging clothes or the ability to
voluntarily control bowel and bladder
function, or in the event of
incontinence, the ability to maintain a
reasonable level of personal hygiene.
``(II) The overall complex behavior
of getting water and cleansing the
whole body, including turning on the
water for a bath, shower, or sponge
bath, getting to, in, and out of a tub
or shower, and washing and drying
oneself.
``(iv) Transfer.--The process of getting in
and out of bed or in and out of a chair or
wheelchair.
``(v) Eating.--The process of getting food
from a plate or its equivalent into the mouth.
``(3) Qualified facility.--The term `qualified facility'
means--
``(A) a nursing, rehabilitative, hospice, or adult
day care facility (including a hospital, retirement
home, nursing home, skilled nursing facility,
intermediate care facility, or similar institution)--
``(i) which is licensed under State law, or
``(ii) which is a certified facility for
purposes of title XVIII or XIX of the Social
Security Act, or
``(B) an individual's home if a licensed health
care practitioner certifies that without home care the
individual would have to be cared for in a facility
described in subparagraph (A).
``(4) Maintenance or personal care services.--The term
`maintenance or personal care services' means any care the
primary purpose of which is to provide needed assistance with
any of the activities of daily living described in paragraph
(2)(B).
``(5) Licensed health care practitioner.--The term
`licensed health care practitioner' means any physician (as
defined in section 1861(r) of the Social Security Act) and any
registered professional nurse, licensed social worker, or other
individual who meets such requirements as may be prescribed by
the Secretary.
``(d) Treatment of Coverage Provided as Part of a Life Insurance
Contract.--Except as otherwise provided in regulations prescribed by
the Secretary, in the case of any long-term care insurance coverage
(whether or not qualified) provided by rider on a life insurance
contract, this part shall be applied as if the portion of the contract
providing such coverage were a separate contract.
``(e) Benefits in Excess of $200 Per Day Includible in Gross
Income.--
``(1) In general.--Notwithstanding any other provision of
this title, gross income includes the aggregate amount of
excess benefits received during the taxable year under any
long-term care insurance contract.
``(2) Excess benefit.--
``(A) In general.--For purposes of paragraph (1),
the term `excess benefit' means, with respect to any
day, the amount by which the benefits received under a
long-term care insurance contract for such day exceed
$200.
``(B) Contracts not aggregated in applying limit.--
Subparagraph (A) shall be applied separately with
respect to each long-term care insurance contract.
``(3) Inflation adjustment of $200 benefit limit.--
``(A) In general.--In the case of a calendar year
after 1995, the $200 amount contained in paragraph (1)
shall be increased for such calendar year by the
medical care cost adjustment for such calendar year. If
any increase determined under the preceding sentence is
not a multiple of $10, such increase shall be rounded
to the nearest multiple of $10.
``(B) Medical care cost adjustment.--For purposes
of subparagraph (A), the medical care cost adjustment
for any calendar year is the percentage (if any) by
which--
``(i) the medical care component of the
Consumer Price Index (as defined in section
1(f)(5)) for August of the preceding calendar
year, exceeds
``(ii) such component for August of 1994.''
(b) Reserve Method.--
(1) Subparagraph (A) of section 807(d)(3) of such Code is
amended by redesignating clause (iv) as clause (v) and by
inserting after clause (iii) the following new clause:
``(iv) Long-term care insurance
contracts.--In the case of any long-term care
insurance contract, a 1-year full preliminary
term method.''
(2) Clause (v) of section 807(d)(3)(A) of such Code, as
redesignated by paragraph (1), is amended by striking ``or
(iii)'' each place it appears and inserting ``(iii), or (iv)''.
(3) Clause (iii) of section 807(d)(3)(A) of such Code is
amended by inserting ``(other than a long-term care insurance
contract)'' after ``insurance contract''.
(c) Continuation Coverage Excise Tax Not To Apply.--Subsection (f)
of section 4980B of such Code is amended by adding at the end the
following new paragraph:
``(9) Continuation of long-term care coverage not
required.--A group health plan shall not be treated as failing
to meet the requirements of this subsection solely by reason of
failing to provide coverage under any long-term care insurance
contract (as defined in section 818A).''
(d) Clerical Amendment.--The table of sections for subpart E of
part I of subchapter L of chapter 1 of such Code is amended by
inserting after the item relating to section 818 the following new
item:
``Sec. 818A. Treatment of long-term care
insurance or plans.''
SEC. 302. EXCLUSION FOR BENEFITS PROVIDED UNDER LONG-TERM CARE
INSURANCE; EXCLUSION FOR EMPLOYER-PROVIDED COVERAGE.
(a) In General.--Subsection (a) of section 104 of the Internal
Revenue Code of 1986 (relating to compensation for injuries or
sickness) is amended by striking ``and'' at the end of paragraph (4),
by striking the period at the end of paragraph (5) and inserting ``,
and'', and by inserting after paragraph (4) the following new
paragraph:
``(6) benefits under a long-term care insurance contract
(as defined in section 818A(b)).''
(b) Exclusion for Employer-Provided Coverage.--Section 106 of such
Code (relating to contributions by employer to accident and health
plans) is amended by adding at the end thereof the following sentence:
``For purposes of the preceding sentence, the term `accident or health
plan' includes a long-term care insurance contract (as defined in
section 818A(b)) but only to the extent that the aggregate of the
benefits under such contracts provided by the employer with respect to
coverage of an individual does not exceed the limitation applicable
under section 818A(e)(2) (determined without regard to subparagraph (B)
thereof).''
SEC. 303. QUALIFIED LONG-TERM CARE SERVICES TREATED AS MEDICAL CARE.
(a) General Rule.--Paragraph (1) of section 213(d) of the Internal
Revenue Code of 1986 (defining medical care) is amended by striking
``or'' at the end of subparagraph (B), by redesignating subparagraph
(C) as subparagraph (D), and by inserting after subparagraph (B) the
following new subparagraph:
``(C) for qualified long-term care services (as
defined in section 818A(c)), or''.
(b) Technical Amendments.--
(1) Subparagraph (D) of section 213(d)(1) of such Code (as
redesignated by subsection (a)) is amended by striking
``subparagraphs (A) and (B)'' and inserting ``subparagraphs
(A), (B), and (C)''.
(2)(A) Paragraph (1) of section 213(d) of such Code is
amended by adding at the end thereof the following new flush
sentence:
``In the case of a long-term care insurance contract (as
defined in section 818A), only eligible long-term care premiums
(as defined in paragraph (10)) shall be taken into account
under subparagraph (D).''
(B) Subsection (d) of section 213 of such Code is amended
by adding at the end the following new paragraph:
``(10) Eligible long-term care premiums.--
``(A) In general.--For purposes of this section,
the term `eligible long-term care premiums' means the
amount paid during a taxable year for any long-term
care insurance contract (as defined in section 818A)
covering an individual, to the extent such amount does
not exceed the limitation determined under the
following table:
``In the case of an individual
with an attained age before the
The limitation
close of the taxable year of:
is:
40 or less........................... $ 200
More than 40 but not more than 50.... 375
More than 50 but not more than 60.... 750
More than 60 but not more than 70.... 2,000
More than 70......................... 2,500.
``(B) Indexing.--
``(i) In general.--In the case of any
taxable year beginning in a calendar year after
1995, each dollar amount contained in paragraph
(1) shall be increased by the medical care cost
adjustment of such amount for such calendar
year. If any increase determined under the
preceding sentence is not a multiple of $10,
such increase shall be rounded to the nearest
multiple of $10.
``(ii) Medical care cost adjustment.--For
purposes of clause (i), the medical care cost
adjustment for any calendar year is the
percentage (if any) by which--
``(I) the medical care component of
the Consumer Price Index (as defined in
section 1(f)(5)) for August of the
preceding calendar year, exceeds
``(II) such component for August of
1994.''
(3) Paragraph (6) of section 213(d) of such Code is
amended--
(A) by striking ``subparagraphs (A) and (B)'' and
inserting ``subparagraphs (A), (B), and (C)'', and
(B) by striking ``paragraph (1)(C)'' in
subparagraph (A) and inserting ``paragraph (1)(D)''.
(4) Paragraph (7) of section 213(d) of such Code is amended
by striking ``subparagraphs (A) and (B)'' and inserting
``subparagraphs (A), (B), and (C)''.
SEC. 304. CERTAIN EXCHANGES OF LIFE INSURANCE CONTRACTS FOR LONG-TERM
CARE INSURANCE CONTRACTS NOT TAXABLE.
Subsection (a) of section 1035 of the Internal Revenue Code of 1986
(relating to certain exchanges of insurance contracts) is amended by
striking the period at the end of paragraph (3) and inserting ``; or'',
and by adding at the end thereof the following new paragraph:
``(4) a contract of life insurance or an endowment or
annuity contract for a long-term care insurance contract (as
defined in section 818A).''
SEC. 305. EXCLUSION FROM GROSS INCOME FOR AMOUNTS WITHDRAWN FROM
INDIVIDUAL RETIREMENT PLANS OR 401(k) PLANS FOR LONG-TERM
CARE INSURANCE.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by redesignating section 137 as section
138 and by inserting after section 136 the following new section:
``SEC. 137. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT ACCOUNTS AND
SECTION 401(k) PLANS FOR LONG-TERM CARE INSURANCE.
``(a) General Rule.--The amount which would (but for this section)
be includible in the gross income of an individual for the taxable year
by reason of distributions from any individual retirement account or
section 401(k) plan shall be reduced (but not below zero) by the
aggregate premiums paid by such individual during such taxable year for
any long-term care insurance contract (as defined in section 818A) for
the benefit of such individual or the spouse of such individual.
``(b) Definitions.--For purposes of this section--
``(1) Individual retirement account.--The term `individual
retirement account' has the meaning given such term by section
408(a).
``(2) Section 401(k) plan.--The term `section 401(k) plan'
means any employer plan which meets the requirements of section
401(a) and which includes a qualified cash or deferred
arrangement (as defined in section 401(k)).
``(c) Special Rules for Section 401(k) Plans.--
``(1) Withdrawals cannot exceed elective contributions
under qualified cash or deferred arrangement.--This section
shall not apply to any distribution from a section 401(k) plan
to the extent the aggregate amount of such distributions for
the use described in subsection (a) exceeds the aggregate
employer contributions made pursuant to the employee's election
under section 401(k)(2).
``(2) Withdrawals not to cause disqualification.--A plan
shall not be treated as failing to satisfy the requirements of
section 401, and an arrangement shall not be treated as failing
to be a qualified cash or deferred arrangement (as defined in
section 401(k)(2)), merely because under the plan or
arrangement distributions are permitted which are excludable
from gross income by reason of this section.''
(b) Conforming Amendments.--
(1) Section 401(k) of such Code is amended by adding at the
end the following new paragraph:
``(11) Cross reference.--
``For provision permitting tax-free
withdrawals for payment of long-term care premiums, see section 137.''
(2) Section 408(d) of such Code is amended by adding at the
end the following new paragraph:
``(8) Cross reference.--
``For provision permitting tax-free
withdrawals from individual retirement accounts for payment of long-
term care premiums, see section 137.''
(3) The table of sections for such part III is amended by
striking the last item and inserting the following new items:
``Sec. 137. Distributions from individual
retirement accounts and section
401(k) plans for long-term care
insurance.
``Sec. 138. Cross references to other
Acts.''
SEC. 306. TAX TREATMENT OF ACCELERATED DEATH BENEFITS UNDER LIFE
INSURANCE CONTRACTS.
Section 101 of the Internal Revenue Code of 1986 (relating to
certain death benefits) is amended by adding at the end thereof the
following new subsection:
``(g) Treatment of Certain Accelerated Death Benefits.--
``(1) In general.--For purposes of this section, any amount
paid or advanced to an individual under a life insurance
contract on the life of an insured--
``(A) who is a terminally ill individual, or
``(B) who is a chronically ill individual (as
defined in section 818A(c)(2)) who is confined to a
qualified facility (as defined in section 818A(c)(3)),
shall be treated as an amount paid by reason of the death of
such insured.
``(2) Terminally ill individual.--For purposes of this
subsection, the term `terminally ill individual' means an
individual who has been certified by a physician as having an
illness or physical condition which can reasonably be expected
to result in death in 12 months or less.
``(3) Physician.--For purposes of this subsection, the term
`physician' has the meaning given to such term by section
213(d)(4).''
SEC. 307. EFFECTIVE DATE.
(a) In General.--The amendments made by this title shall apply to
taxable years beginning after December 31, 1995.
(b) Continuation of Existing Policies.--In the case of any policy
issued before January 1, 1996, which met the long-term care insurance
requirements of the State in which the policy was sitused at the time
the policy was issued--
(1) such policy shall be treated for purposes of the
Internal Revenue Code of 1986 as a long-term care insurance
contract (as defined in section 818A(b) of such Code), and
(2) services provided under such policy shall be treated
for such purposes as qualified long-term care services (as
defined in section 818A(c) of such Code).
(c) Exchanges of Existing Policies.--If, after the date of
enactment of this Act and before January 1, 1996, a policy providing
for long-term care insurance coverage is exchanged solely for a long-
term care insurance contract (as defined in section 818A(b) of the
Internal Revenue Code of 1986), no gain or loss shall be recognized on
the exchange. If, in addition to a long-term care insurance contract,
money or other property is received in the exchange, then any gain
shall be recognized to the extent of the sum of the money and the fair
market value of the other property received. For purposes of this
paragraph, the cancellation of a policy providing for long-term care
insurance coverage and reinvestment of the cancellation proceeds in a
qualified long-term care insurance policy within 60 days thereafter
shall be treated as an exchange.
(d) Issuance of Certain Riders Permitted.--For purposes of
determining whether section 7702 or 7702A of the Internal Revenue Code
of 1986 applies to any contract, the issuance, whether before, on, or
after December 31, 1995, of a rider on a life insurance contract
providing long-term care insurance coverage shall not be treated as a
modification or material change of such contract.
(e) Treasury To Specify Tax Treatment of Long-Term Care Contracts
Which Do Not Meet Standards.--Not later than October 1, 1995, the
Secretary of the Treasury shall submit to the Congress a report
detailing the Department of the Treasury's interpretation of the
treatment under the Internal Revenue Code of 1986 of contracts which
provide long-term care services but which are not long-term care
insurance contracts (as defined by section 818A(b) of such Code).
TITLE IV--SENIOR CITIZEN COMMUNITIES
SEC. 401. DEFINITION OF HOUSING FOR OLDER PERSONS.
Subparagraph (C) of section 807(b)(2) of the Fair Housing Act (42
U.S.C. 3607(b)(2)) is amended to read as follows:
``(C) that meets the following requirements:
``(i) The housing is in a facility or community
intended and operated for the occupancy of at least 80
percent of the occupied units by at least one person 55
years of age or older.
``(ii) The housing facility or community publishes
and adheres to policies and procedures that demonstrate
the intent required under clause (i), whether or not
such policies and procedures are set forth in the
governing documents of such facility or community.
``(iii) The housing facility or community complies
with rules made by the Secretary for the verification
of occupancy. Such rules shall allow for that
verification by reliable surveys and affidavits and
shall include examples of the types of policies and
procedures relevant to a determination of compliance
with the requirement of clause (ii). Such surveys and
affidavits shall be admissible in administrative and
judicial proceedings for the purposes of such
verification.''.
SEC. 402. GOOD FAITH ATTEMPT AT COMPLIANCE DEFENSE AGAINST CIVIL MONEY
DAMAGES.
Section 807(b) of the Fair Housing Act (42 U.S.C. 3607(b)) is
amended by adding at the end the following:
``(5) An individual who engages in conduct with a reasonable good
faith reliance on the existence of the exemption of this subsection
relating to housing for older persons is not personally liable for
money damages for a violation of this Act that such an exemption would
have vitiated. For the purposes of this paragraph, a person engaged in
the business of residential real estate transactions is presumed to
have such a good faith reliance if that person has no actual knowledge
that the facility or community is not or will not be eligible for such
exemption and the facility or community gives such person a written
certification stating the compliance of the facility or community with
the requirements for such exemption.''.
<all>
HR 8 SC----2
Introduced in House
Introduced in House
Title I-III, referred to the Committee on Ways and Means; Title IV, referred to the Committee on the Judiciary.
Title I-III, referred to the Committee on Ways and Means; Title IV, referred to the Committee on the Judiciary.
Title I-III, referred to the Committee on Ways and Means; Title IV, referred to the Committee on the Judiciary.
Sponsor introductory remarks on measure. (CR H128-129, H132)
Referred to the Subcommittee on Health.
Subcommittee Hearings Held.
Committee Hearings Held.
Subcommittee Hearings Held.
For Further Action See H.R.1215.
Sponsor introductory remarks on measure. (CR H4159-4160)
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Sponsor introductory remarks on measure. (CR E2219)