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<PRE>[DOCID: f:h804ih.txt]






107th CONGRESS
  1st Session
                                H. R. 804

  To amend the Internal Revenue Code of 1986 to repeal the 2 percent 
   excise tax on the net investment income of tax-exempt foundations.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 28, 2001

Mr. Stearns (for himself and Mr. Crane) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to repeal the 2 percent 
   excise tax on the net investment income of tax-exempt foundations.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REPEAL OF EXCISE TAX ON NET INVESTMENT INCOME OF TAX-EXEMPT 
              FOUNDATIONS.

    (a) Repeal.--Subsection (a) of section 4940 of the Internal Revenue 
Code of 1986 (relating to excise tax based on investment income) is 
repealed.
    (b) Conforming Amendments.--
            (1) Section 4940 of such Code is amended--
                    (A) by redesignating subsections (b), (c), and (d) 
                as subsections (a), (b), and (c), respectively,
                    (B) by striking subsection (e), and
                    (C) in subsection (a), as redesignated by paragraph 
                (1), by striking ``(A) the tax imposed under subsection 
                (a) (computed as if such subsection applied to such 
                private foundation for the taxable year),'' and 
                inserting ``(A) an amount equal to 2 percent of the net 
                investment income of such foundation for the taxable 
                year,''.
            (2) Section 4942(f)(3)(A) of such Code is amended by 
        striking ``section 4940(c)(3)(B)'' and inserting ``section 
        4940(b)(3)(B)''.
            (3) Section 4945(d)(4)(A) of such Code is amended by 
        striking ``section 4940(d)(2)'' and inserting ``section 
        4940(c)(2)''.
            (4) Section 4948(a) of such Code is amended by striking 
        ``section 4940(c)(2)'' and inserting ``section 4940(b)(2)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
                                 &lt;all&gt;

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