The bill would expand the section 119 exclusion to cover furnishing of meals off the employer's business premises if (1) the employer is unable to justify economically the operation of on-premise facilities, giving due consideration to capital and operating costs, (2) on-premise eating facilities are not provided at the actual place of employment of affected employees, (3) the meals are provided in kind, not in cash, and (4) the meals are furnished within a time frame consistent with the employer's established meal schedule. The provisions of the bill would be effective on enactment.

3. H.R. 1343-Mr. Lowry

Bad Debt Reserves for Stock Mutual Savings Banks Under present law, the deduction for reasonable additions to bad debt reserves by thrift institutions with respect to certain real property loans may be limited to 40 percent of taxable income for the year (sec. 593). However, the addition may be limited to less than 40 percent of taxable income to the extent that an insufficient percentage of the taxpayer's total assets consist of real property loans and certain other property (such as cash). The proportion of total assets that must meet this requirement in order for the full 40-percent deduction to apply is 72 percent in the case of mutual savings banks that do not have capital stock represented by shares, and 82 percent in the case of other thrift institutions, including mutual savings banks with capital stock.

The bill would change the application of these rules to mutual savings banks that have capital stock represented by shares. While such institutions are presently subject to the 82-percent asset requirement, the bill would place them instead under the 72-percent requirement. The provisions of the bill would apply to taxable years ending after the date of enactment.

4. H.R. 1773-Messrs. Duncan and Guarini

Exemption from Unrelated Business Income Tax for Sales of Membership Lists By Certain Organizations

Under present law, organizations that are generally exempt from Federal income tax because of their charitable, educational, or religious purposes and functions are subject to tax on any unrelated business taxable income (secs. 511-514). The U.S. Court of Claims held in 1981 that income received by the Disabled American Veterans from other exempt organizations and commercial businesses for the use of mailing lists is subject to the unrelated business income tax (UBIT). Similarly, the IRS has ruled that amounts received by an exempt charitable organization from the regular sale of its membership or mailing lists to business firms and charities are subject to the UBIT.

In the case of any tax-exempt organization which is eligible to receive tax-deductible charitable contributions, the bill would exclude from the tax on unrelated business taxable income any income from exchanging, renting, or selling names and addresses of donors to, or members of, such organization. The provisions of

the bill would be effective for taxable years ending after the date of enactment.

5. H.R. 2129-Messrs. Matsui, Stark, and Thomas

Allocation of Property Taxes Among Tenant-Stockholders in Cooperative Housing Corporations

Under present law, a tenant-stockholder in a cooperative housing corporation is entitled to deduct amounts paid to the corporation which represents his or her proportionate share of allowable real estate taxes and interest (e.g., mortgage interest) relating to the land and buildings held by the cooperative (sec. 216). A tenantstockholder's proportionate share of interest or property taxes, for deduction purposes, is equivalent to the portion of total cooperative stock which is owned by the tenant-stockholder. This can lead to the allowance of a deduction which is significantly different from the amount actually attributable to an individual tenant-stockholder's unit in the case of a State (such as California) where property taxes may be assessed based on separate appraisals of individual units.

Under the bill, the amount deductible under section 216 by a tenant-stockholder in a State which uses such separate appraisals would reflect the amount of property tax actually attributable to his or her unit, rather than his or her portion of total stock. Thus, the deduction allowed under section 216 would reflect the tenantstockholder's proportionate share of the cooperative's real estate expenses in States where different units are appraised separately. The provisions of the bill would apply retroactively for taxable years beginning after 1982.

6. H.R. 2686-Messrs. Guarini, Stark, and Frenzel

Business Development Companies

Under present law, a business development company within the meaning of section 2(a)(48) of the Investment Company Act of 1940 cannot qualify as a regulated investment company ("RIC"). The bill would alter the definition of a RIC so that business development companies (other than personal holding companies) could qualify for RIC status.

The provisions of the bill would apply retroactively to taxable years beginning on or after October 21, 1980.

7. H.R. 3284-Messrs. Jenkins and Hance

Deduction for Loss in Value of Bus Operating Authorities Under present law, courts have denied an ordinary loss deduction (sec. 165) where the value of an operating permit or license decreased as a result of legislation expanding the number of issued licenses or permits. In 1981, as a result of the deregulation of the trucking industry, the Congress enacted a tax provision that allows trucking companies an ordinary deduction ratably over five years for loss in value of motor carrier operating authorities (sec. 266 of the Economic Recovery Tax Act of 1981).

The owners of bus operating authorities assert that they face a situation similar to that faced by the trucking industry, arguing that the value of bus operating authorities has diminished significantly as a result of Federal legislation that deregulated the intercity bus industry. The bill would provide tax deductions for the owners of bus operating authorities generally similar to those granted in 1981 with respect to motor carrier authorities.

The provisions of the bill would apply retroactively to taxable years ending after November 18, 1982.

8. H.R. 3388-Messrs. Matsui, Thomas, and Fazio

Application of Section 252 of Economic Recovery Tax Act of 1981 to Certain Transfers in 1973

The bill would permit certain individuals who received stock in 1973 pursuant to the exercise of employee stock options to elect to have section 252 of the Economic Recovery Tax Act of 1981 apply retroactively in certain limited circumstances. Under the bill, any reduction in tax pursuant to such election could not exceed $100,000 with respect to any one employee. The statute of limitations would be amended by the bill to permit refunds or credits, or assessments, attributable to the provisions of the bill.

9. H.R. 3528-Mrs. Kennelly

Deduction for Loss in Value of Freight Forwarder Operating

Authorities

Under present law, courts have denied an ordinary loss deduction (sec. 165) where the value of an operating permit or license decreased as a result of legislation expanding the number of issued licenses or permits. In 1981, as a result of the deregulation of the trucking industry, the Congress enacted a tax provision that allows trucking companies an ordinary deduction ratably over five years for loss in value of motor carrier operating authorities (sec. 266 of the Economic Recovery Tax Act of 1981).

The owners of freight forwarder operating authorities assert that they face a situation similar to that faced by the trucking industry, arguing that the Interstate Commerce Commission no longer subjects their industry to significant entry restrictions. The bill would expand the scope of the 1981 tax provision to apply to freight forwarder operating authorities.

The provisions of the bill would apply retroactively to taxable years ending after June 30, 1980.

10. H.R. 4167-Messrs. Jenkins, Fowler, and Gephardt, Mrs. Kennelly, Messrs. Matsui, Flippo, Anthony, Philip Crane, Archer, Moore, Duncan, Pickle, Hance, Vander Jagt, Dorgan, Campbell, Heftel, and others

Exemption from Unrelated Business Income Tax for Income from Certain Oil and Gas Property

Under present law, most organizations that generally are exempt from Federal income taxation under Code section 501(a), including

any trust that is part of a tax-qualified pension, profit-sharing, or stock bonus plan (qualified pension plan) described in section 401(a), are subject to tax on any unrelated business taxable income (secs. 511-514). In addition, a tax is imposed on the unrelated trade or business income of an individual retirement account or annuity (an IRA).

Under the bill, certain tax-exempt organizations would be permitted to invest in limited partnerships owning working interests in domestic oil and gas properties without incurring tax for unrelated business income. Eligible organizations under the bill would include exempt trusts that are part of tax-qualified pension plans, IRAS, and certain tax-exempt educational organizations. The provisions of the bill would apply retroactively for partnership taxable years beginning after 1982.

11. H.R. 4507-Messrs. Foley, Rangel, and Stark, and Mrs.

Kennelly

Allowance of Investment Tax Credit to Members of Certain TaxExempt Religious Organizations

Section 501(d) provides an income tax exemption for a religious or apostolic organization if (1) it has a common treasury or community treasury, even if it engages in business for the common benefit of the members, and (2) its members include (at the time of filing their returns) in their gross income their entire pro rata shares, whether distributed or not, of the organization's taxable income for such year.

The Code allows an investment tax credit for certain acquisitions of depreciable property. In the case of such property used by a taxexempt organization, however, the credit is not allowed unless the property is used in an unrelated trade or business the income of which is subject to tax under section 511 (sec. 48(a)(4)). The Ninth Circuit has ruled that since a section 501(d) organization is not subject to the section 511 tax on unrelated business taxable income, neither the organization nor its members on their tax returns could claim the investment tax credit for depreciable property acquired by the organization.

Under the bill, depreciable property acquired by an eligible section 501(d) organization for use in a business conducted for the common benefit of its members would give rise to an investment tax credit. The amount of such qualified investment by a section 501(d) organization would be apportioned pro rata among its members in the same manner as its taxable income is allocated. The provisions of the bill would apply only if the section 501(d) organization has been in existence for if more than five years, or if more than one-half its members have been members for more than five years of any tax-exempt section 501(d) organization or of any religious community which is part of a tax-exempt organization described in section 501(c)(3).

The provisions of the bill would apply retroactively to periods after 1978.

12. H.R. 4779-Messrs. Thomas, Lagomarsino, Pashayan, and McCandless

Exemption from Windfall Profit Tax for Certain Production

Present law imposes a windfall profit tax on crude oil that is removed from the premises on which it is produced (secs. 4986 et seq.). The bill would provide a limited exemption for crude oil which is exchanged for residual fuel oil that is used to power enhanced recovery processes, effective for residual fuel used, and crude oil removed, after the date of enactment.

13. H.R. 5022-Mr. Stark

Denial of Percentage Depletion for Income From Certain Lease Bonuses or Royalites

Present law imposes a 1,000 barrel a day limitation on percentage depletion with respect to oil and gas production of independent producers and royalty owners (sec. 613A). Under a recent Supreme Court decision, this limitation may not apply in the case of advance royalties.

The bill would deny percentage depletion with respect to any income from lease bonus, advance royalty, or other amounts payable without regard to actual production from a property, effective January 1, 1984.

14. H.R. 5199—Mr. Stark

Applicability of Farming Syndicate Rules of Section 278(b) to Inedible Fruits and Nuts

Under present law, farming syndicates must capitalize the costs of planting, cultivating, maintaining, and developing certain groves, orchards, and vineyards in which fruit or nuts are grown, if the costs are incurred before the grove, orchard, or vineyard bears a crop or yield in commercial quantities (sec. 278(b)). It is unclear whether these rules apply in the case of inedible fruits or nuts.

The bill would provide that the rules under section 278(b) relating to certain capital expenditures of farming syndicates apply in the case of inedible fruits and nuts, effective for amounts paid or incurred after March 20, 1984.