H.R. 1337 (95th): An Act to amend the Internal Revenue Code of 1954 with respect to excise tax on certain trucks, buses, tractors, et cetera, home production of beer and wine, refunds of the taxes on gasoline and special fuels to aerial applicators, and partial rollovers of lump sum distributions.

The text of the bill below is as of Oct 14, 1978 (Passed Congress/Enrolled Bill).

PUBLIC LAW 9 5 - 4 5 8 — O C T . 14, 1978                                 92 STAT. 1 2 5 5

Public Law 95-458
95th Congress
                                       An Act
To amend the Internal Revenue Code of 1954 with respect to excise t a x on                     Oct. 14. 1978
  certain trucks, buses, tractors, et cetera, home production of beer and wine,                 [H.R. 1337]
  refunds of the taxes on gasoline and special fuels to aerial applicators, and
  partial rollovers of lump sum distributions.

 Be it enacted hy the Senate amd House of Representatwes                          of the
United States of America in Congress asseiribled^                                             Internal Revenue
                                                            Code of 1954,
SECTION 1. EXCISE TAX ON CERTAIN TRUCKS, BUSES, TRACTORS, ETC.
                                                            amendments.
    (a) I N G E N E R A L . — P a r a g r a p h (1) of section 4216(b) of the I n t e r n a l 26 u s e 4216.
Revenue Code of 1954 (relating to constructive sale price) is amended
by inserting after the second sentence thereof t h e following new
sentence: " I n t h e case of an article t h e sale of which is taxable under
section 4061 (a) a n d which is sold a t retail, t h e computation under t h e 26 USC 4061
first sentence of this p a r a g r a p h shall be a percentage (not greater
t h a n 100 percent) of the actual selling price based on t h e highest price
for which such articles are sold by manufacturers a n d producers in
the ordinary course of t r a d e (determined without regard t o any indi-
vidual manufacturer's or producer's cost)".
   (b) CONFORMING A M E N D M E N T . — T h e second sentence of p a r a g r a p h               ,     ,. j
(1) of such section 4216(b) is amended by inserting " ( o t h e r t h a n an
article t h e sale of which is taxable u n d e r section 4061 ( a ) ) " after "sold
at retail".
   (c) EFFECTIVE D A T E . — T h e amendments made by this section shall 26 u s e 4216
apply t o articles sold by t h e manufacturer or producer on or after note.
the first d a y of t h e first calendar quarter beginning 30 days or more
after t h e date of enactment of t h i s Act.
SEC. 2. HOME PRODUCTION OF BEER AND WINE.
   ( a ) E X E M P T I O N F R O M T A X ON W I N E . — S e c t i o n 5042(a) (2) of t h e    26 USC 5042.
I n t e r n a l Revenue Code of 1954 (relating t o production of wine for
personal consumption) is amended to read as follows:
        " ( 2 ) W I N E FOR PERSONAL OR FAMILY USE.—Subject t o regula-
     tions prescribed by t h e Secretary—
             " ( A ) EXEMPTION.—^Any adult m a y , without payment of
          tax, produce wine for personal or family use a n d n o t for sale.
             " ( B ) L I M I T A T I O N . — T h e aggregate amount of wine exempt
          from t a x u n d e r this p a r a g r a p h with respect to any house-
          hold shall n o t exceed—
                    " ( i ) 200 gallons per calendar year if there are 2 or
                 more adults in such household, or
                     " ( i i ) 100 gallons per calendar year if there is only 1
                 adult in such household.
             " ( C ) ADULTS.—^For purposes of this p a r a g r a p h , t h e t e r m
          'adult' means a n individual who h a s attained 18 years of age,
          or t h e minimum age (if a n y ) established by law applicable             ^^,; ,_,,,
          in t h e locality in which t h e household is situated at which
          wine m a y be sold to individuals, whichever is greater.".
   (b) E X E M P T I O N F R O M T A X ON B E E R . —
        (1) I N GENERAL.—-Section 5053 of such Code (relating t o 26 USC 5053.
     exemptions from excise t a x on beer) is amended by redesignat-

92 STAT. 1256 PUBLIC LAW 95-458—OCT. 14, 1978 ing subsection (e) as subsection (f) and by inserting after sub- section (d) the following new section: "(e) BEER FOR PERSONAL OR FAMILY USE.—Subject to regulation prescribed by the Secretary, any adult may, without payment of tax, Limitation. produce beer for personal or family use and not for sale. The ag- gregate amount of beer exempt from tax under this subsection with respect to any household shall not exceed— " (1) 200 gallons per calendar year if there are 2 or more adults in such household, or " (2) 100 gallons per calendar year if there is only 1 adult in such household. "Adult." For purposes of this subsection, the term 'adult' means an individual who has attained 18 years of age, or the mininmm age (if any) estab- lished by law applicable in the locality in which the household is situated at which beer may be sold to individuals, whichever is greater.". (2) ILLEGALLY PRODUCED BEER.— 26 use 5051. (A) Section 5051 of such Code (relating to imposition and rate of tax) is amended by adding at the end thereof the following new subsection: "(c) ILLEGALLY PRODUCED BEER.—The production of any beer at any place in the United States shall be subject to tax at the rate prescribed in subsection (a) and such tax shall be due and payable 26 use 5054. as provided in section 5054(a) (3) unless— "(1) such beer is produced in a brewery ({ualified under the 26 use 5401. provisions of subchapter G, or 26 use 5053. «^2) such production is exempt from tax under section 5053(e) - ~ (relating to beer for personal or family use).". '• (B) Section 5054(a) (3) of such Code (relating to illegally produced beer) is amended to read as follows: "(3) ILLEGALLY PRODUCED BEER.—The tax on any beer pro- duced in the United States shall be due and payable immediately .S*ilc :)?IJ oS upon production unless— "(A) such beer is produced in a brewery qualified under the provisions of subchapter G, or fe'u " ( B ) such production is exempt from tax under sections 5053(e) (relating to beer for personal or family use).". 26 use 5092. (3) DEFINITION OF BREWER.—Section 5092 of such Code (defin- ing brewer) is amended to read as follows: "SEC. 5092. DEFINITION OF BREWER. "Every person who brews beer (except a person who produces only beer exempt from tax under section 5053(e)) and every person who produces beer for sale shall be deemed to be a brewer.". (4) EXEMPTION FROM CERTAIN PROVISIONS RELATING TO DISTILLING 26 use 5222. MATERIALS.—Section 5222(a)(2)(C) of such Code (relating to certain exemptions) is amended by striking out " ; or" and insert- ing in lieu thereof "or 5053 (e); or". (5) PENALTY FOR UNLAWFUL PRODUCTION OF BEER.— 26 use 5674. (A) Section 5674 of such Code (relating to penalty for unlawful removal of beer) is amended to read as follows: "SEC. 5674. PENALTY FOR UNLAWFUL PRODUCTION OR REMOVAL OF .-.^.^ ,,.,: .. BEER. "(a) UNLAWFUL PRODUCTION.—Any person who brews beer or pro- duces beer shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, unless such beer is brewed or produced in a brewery
PUBLIC LAW 95-458—OCT. 14, 1978 92 STAT. 1257 qualified under subchapter G or such production is exempt from t a x 26 USC 5401. under section 5053(e) (relating to beer for personal or family u s e ) . 26 USC 5053. " ( b ) UNLAWFUL REMOVAL.—Any brewer or other person who Penalty, removes or in any way aids in the removal from any brewery of beer without complying with t h e provisions of this chapter or regu- lations issued pursuant thereto shall be fined not more than $1,000, or imprisoned not more t h a n 1 year, or both.". ( B ) T h e item relating to section 5674 in t h e table of 26 USC 5674. sections for p a r t I I I of subchapter J of chapter 51 of such Code is amended to read as follows: "Sec. 5674. Penalty for unlawful production or removal of beer.", (c) EFFECTIVE D A T E . — T h e amendments made by this section shall 26 USC 5042 take effect on t h e first d a y of the first calendar month which begins note, more t h a n 90 days after the date of the enactment of this Act. SEC. 3. REFUNDS TO BE MADE TO AERIAL APPLICATORS IN CERTAIN CASES. ( a ) E N T I T L E M E N T OF AERIAL ArpLicATORs TO K E F U N D OF GASOLINE TAX I N CERTAIN CASES.—Subsection (c) of section 6420 of the I n t e r n a l Revenue Code of 1954 (defining use on a farm for farming purposes) 26 USC 6420. is amended by redesignating p a r a g r a p h (4) as p a r a g r a p h (5) a n d by inserting after p a r a g r a p h (3) t h e following new p a r a g r a p h : s "(4) CERTAIN FARMING USE OTHER THAN BY OWNER, E T C . — I n applying p a r a g r a p h ( 3 ) ( A ) to a use on a farm for a n y purpose described in p a r a g r a p h (3) ( A ) by any person other t h a n the owner, tenant, or operator of such farm— " ( A ) t h e owner, tenant, or operator of such farm shall be treated as the user a n d ultimate purchaser of t h e gasoline, except t h a t " ( B ) if t h e person so using t h e gasoline is an aerial appli- cator who is t h e ultimate purchaser* of t h e gasoline a n d t h e person described in s u b p a r a g r a p h ( A ) waives ( a t such time and in such form and manner as the Secretary shall prescribe) ' ' his r i g h t to be treated as t h e user a n d ultimate purchaser of t h e gasoline, then s u b p a r a g r a p h ( A ) of this p a r a g r a p h shall not apply a n d t h e aerial applicator shall be treated as h a v i n g used such gasoline on a f a r m for f a r m i n g purposes.". (b) E N T I T L E M E N T OF AERIAL APPLICATORS TO R E F U N D OF SPECIAL F U E L S TAX I N CERTAIN CASES.—The second sentence of subsection (c) of section 6427 of such Code (relating to use for f a r m i n g purposes) 26 USC 6427. is amended t o read as follows: " F o r purposes of this subsection, if fuel is used on a farm by a n y person other t h a n t h e owner, tenant, or operator of such farm, the rules of p a r a g r a p h (4) of section 6420 (c) shall be applied (except t h a t 'liquid taxable under section 4041' shall 26 USC 4041. be substituted for 'gasoline' each place i t appears i n such p a r a g r a p h (4)).". (c) CONFORMING A M E N D M E N T . — S u b p a r a g r a p h ( A ) of section 6420 (c) (3) of such Code is amended by striking o u t "except t h a t " a n d ' all t h a t follows down t h r o u g h t h e semicolon at t h e end of such sub- '' * ' ' paragraph ( A ) . (d) EFFECTIVE D A T E . — T h e amendments made by this section shall 26 USC 6420 t a k e effect on t h e first d a y of t h e first calendar quarter which begins note. more t h a n 90 days after t h e date of t h e enactment of this Act. '" ""'""' ' SEC. 4. PARTIAL ROLLOVERS OF LUMP SUM DISTRIBUTIONS. (a) PARTIAL ROLLOVER F R O M EMPLOYEES' TRUSTS P E R M I T T E D . —
92 STAT. 1258 PUBLIC LAW 95-458—OCT. 14, 1 9 7 8 P a r a g r a p h (5) of section 402(a) of t h e I n t e r n a l Revenue Code of 26 u s e 402. 1954 (relating to rollover amounts) is amended t o read as follows: " ( 5 ) R O L L O V E R AMOUNTS.— " ( A ) GENERAL RULE.—If— " ( i ) t h e balance t o t h e credit of a n employee in a qualified trust is paid t o h i m i n a qualifying rollover distribution, ' " ( i i ) the employee transfers any portion of the prop- erty h e receives i n such distribution to an eligible retire- ment plan, and " ( i i i ) in t h e case of a distribution of property other t h a n money, t h e amount so transferred consists of t h e property distributed, then such distribution ( t o t h e extent so transferred) shall not be includible i n gross income for t h e taxable year i n which paid. "(B) M A X I M U M AMOUNT W H I C H M A T BE ROLLED OVER.— I n the case of any qualifying rollover distribution, the maxi- , ,. m u m a m o u n t t r a n s f e r r e d t o which s u b p a r a g r a p h ( A ) applies shall not exceed t h e fair market value of all t h e property the employee receives in t h e distribution, reduced by t h e employee contributions. "(C) TRANSFER MUST BE MADE W I T H I N 6 o DAYS OF RECEIPT.— S u b p a r a g r a p h ( A ) shall n o t apply to any transfer of a distribution made after t h e 60th d a y following t h e d a y on which t h e employee received t h e property distributed. " ( D ) D E F I N I T I O N S . — F o r purposes of this p a r a g r a p h — "(i) Q U A L I F Y I N G ROLLOVER DISTRIBUTION.—The t e r m 'qualifying rollover distribution' means 1 o r more distributions— " ( I ) within 1 taxable year of t h e employee on account of a termination of t h e p l a n of which t h e , ' ^ t r u s t is a p a r t or, in t h e case of a profit-sharing or stock bonus plan, a complete discontinuance of con- tributions under such plan, or " ( I I ) which constitute a lump sum distribution within the meaning of subsection ( e ) ( 4 ) ( A ) (deter- " . mined without reference to subsection (e) (4) ( B ) ) . .<>j . . " ( i i ) E M P L O Y E E CONTRIBUTIONS.—The t e r m ' e m p l o y e e contributions'means— " ( I ) the excess of the amounts considered contrib- uted b y the employee (determined by a p p l y i n g sec- 26 u s e 72. tion 7 2 ( f ) ) , over " ( I I ) any amounts theretofore distributed t o t h e ' employee which were not includible in gross income. " ( i i i ) QUALIFIED TRUST.—The term 'qualified t r u s t ' 26 u s e 401. means an employees' t r u s t described i n section 401(a) 26 u s e 501. , , which is exempt from t a x under section 501(a). " ( i v ) ELIGIBLE RETIREMENT P L A N . — T h e t e r m 'eligible ^ ^ .,. . .y. retirement p l a n ' m e a n s — " , " ( I ) a n individual retirement account described 26 u s e 408. • , in section 4 0 8 ( a ) , " ( I I ) an individual retirement annuity described *^^. i n section 408(b) (other t h a n a n endowment ' ' '•' contract),
PUBLIC LAW 95-458—OCT. 14, 1978 92 STAT. 1259 '* ' ' " ( I I I ) a retirement bond described in section 409, 26 USC 409. ' " ' "' " (IV) a qualified trust, and , , "(V) an annuity plan described in section 403(a). 26 USC 403. • " ( E ) SPECIAL RULES.— "(i) TRANSFER TREATED AS ROLLOVER CONTRIBUTION UNDER SECTION 4 0 8.—For purposes of this title, a transfer 26 USC 408. described in subparagraph (A) to an eligible retirement plan described in subclause ( I ) , ( I I ) , or ( I I I ) of sub- paragraph (D) (iv) shall be treated as a rollover con- tribution described in section 408 (d) (3). "(ii) SELF-EMPLOYED INDIVIDUALS AND OWNER- EMPLOYEES.—An eligible retirement plan described in subclause (IV) or (V) of subparagraph (D) (iv) shall not be treated as an eligible retirement plan for the transfer of a distribution if any part of the distribution is attributable to a trust forming part of a plan under which the employee was an employee within the mean- ing of section 401(c) (1) at the time contributions were 26 USC 401. made on his behal f under the plan." (b) PARTIAL ROLLOVER OF ANNUITY CONTRACTS PERMITTED.—Sub- section (a) of section 403 of such Code (relating to taxability of 26 USC 403. beneficiary under a qualified annuity plan) is amended by striking out paragraphs (4) and (5) and inserting in lieu thereof the following new paragraph: "(4) ROLLOVER AMOUNTS.— " ( A ) GENERAL RULE.—If— " (i) the balance to the credit of an employee in an em- ployee annuity described in paragraph (1) is paid to him in a qualifying rollover distribution. "(ii) the employee transfers any portion of the prop- ' '; erty he receives in such distribution to an eligible retire- ment plan, and "(iii) in the case of a distribution of property other .. , .. than money, the amount so transferred consists of the * "' ^ property distributed, then such distribution (to the extent so transferred) shall not be includible in gross income for the taxable year in which - - paid. "(B) CERTAIN RULES MADE APPLICABLE.—^Eules similar to the rules of subparagraphs (B) through (E) of section 402 Ante, p. 1258. (a)(5) and of paragraph (6) of section 402(a) shall apply 26 USC 402. for purposes of subparagraph (A)." (c) TAXATION OF PORTION NOT ROLLED OVER.— (1) I N GENERAL.—Paragraph (6) of section 402(a) of such Code (relating to special rollover rules) is amended by adding at the end thereof the following new subparagraph: "(C) TREATMENT OF PORTION NOT ROLLED OVER.—If any portion of a lump sum distribution is transferred in a transfer to which paragraph (5) (A) applies, paragraph (2) of sub- Ante, p. 1258. section (a), and paragraphs (1) and (3) of subsection (e) shall not apply with respect to such lump sum distribution." (2) CONFORMING AMENDMENTS.—Paragraph (6) of section 402 (a) of such Code is amended— (A) by striking out "For purposes of paragraph (5) (A) (i)"» 39-194 O—80—pt, 1 83 : QL3
92 STAT. 1260 PUBLIC LAW 95-458—OCT. 14, 1978 or.v; ,, ( B ) by striking out " A complete*' in s u b p a r a g r a p h ( A ) and inserting in lieu thereof " F o r purposes of p a r a g r a p h Ante, p. 1258. , / {. ; (^ ) (I^) (i) 5 ^ complete", and (C) by inserting " F o r purposes of p a r a g r a p h (5) ( D ) ( i ) — " after " A S S E T S . — " in s u b p a r a g r a p h ( B ) . 26 u s e 402 note. ( d ) EFFECTIVE D A T E S . — (1) I N GENERAL.—The amendments made by subsections ( a ) , i, ( b ) , and (c) shall apply with respect to taxable years beginning ;!' after December 31,1974. (2) VALIDATION OF CERTAIN ATTEMPTED ROLLOVERS.—If the . taxpayer— ( A ) attempted to comply with the requirements of section 4 0 2 ( a ) ( 5 ) or 4 0 3 ( a ) ( 4 ) of the I n t e r n a l Revenue Code of Ante, p. 1258. 26 u s e 403. 1954 for a taxable year beginning before t h e date of t h e enactment of this Act, and ( B ) failed to meet t h e requirements of such section t h a t all property received in the distribution be transferred, [m^ , such section (as amended by this section) shall be applied by t r e a t i n g any transfer of property made on or before December 31, 1978, as if it were made on or before the 60th day after the day ,. on which the taxpayer received such property. F o r purposes of t h e preceding sentence, a transfer of money shall be treated as a transfer of property received in a distribution to the extent t h a t the amount of the money transferred does not exceed the highest fair market value of the property distributed d u r i n g the 60-day period beginning on the date on which the taxpayer received such property. SEC. 5. CASH PAYMENTS IN LIEU OF FOOD STAMPS TO RECIPIENTS OF SSI BENEFITS. 42 u s e 1382e (a) Section 8 ( d ) of Public L a w 93-233 is amended by a d d i n g at the notes. end thereof the following new sentences: " F o r purposes of this sub- section, if the State requests the Secretary to make the finding specified in the first sentence of this subsection and to make an additional cash 42 u s e 1381. payment under title X V I in lieu of food stamps, in the amount and the m a n n e r described below, to every individual in the S t a t e who does not have an eligible spouse and who receives a supplementary payment 42 u s e 1382e. pursuant to an agreement under section 1616(a) of the Act (other than ian individual who (i) receives such a supplementary payment at a level prescribed by the State by reason of his or her residence in an institution, or other living arrangement in which board and care are provided, or (ii) receives payments p u r s u a n t to section 212 of Public 87 Stat. 155. L a w 93-66 at a level in excess of the level applicable to such individual as established by the S t a t e under such agreement), t h e Secretary shall make such payments if he finds t h a t the conditions of p a r a g r a p h (1) have been met (and for this purpose the conditions of p a r a g r a p h (1) shall be considered to have been met to t h e extent t h a t they involve amounts payable under t h e law referred to in p a r a g r a p h (1) ( B ) not- withstanding the suspension in 1978 of the cost-of-living increase in State suppleirientary payments under such law) for months beginning with the first month in which, as determined by t h e Secretary, such additional cash payment can be made, and ending with t h e month before the first subsequent month for which the conditions of para- g r a p h (1) are met without regard to this sentence (and the require- ments of p a r a g r a p h (2) shall also be considered to have been met, effective on the first day of such first subsequent month, for purposes
PUBLIC LAW 95-458—OCT. 14, 1978 92 STAT. 1261 of applying the first sentence of this subsection to that month and succeeding months). For purposes of the preceding sentence, the amount of an additional cash payment under title X V I in lieu of 42 USC 1381. food stamps shall equal the cash value of the minimum allotment specified by section 8 (a) of the Food Stamp Act of 1977 for one-person 7 USC 2017. households, and such additional cash payment shall be appropriately included in or with the check issued to such individual in payment of his supplementary security income benefit (or supplementary pay- ment under such section 1616 (a)).". 42 USC 1382e. (b) No additional cash payment under title X V I of the Social 42 USC 1382e Security Act may be made pursuant to the third sentence of section ^g^ijsc 1381 8 (d) of Public Law 93-233 (as added by subsection (a) of this section) ^2 usC 1382e for any month beginning before October 1, 1978, or ending after note. September 30,1979. Approved October 14, 1978. ''im LEGISLATIVE HISTORY: HOUSE REPORT No. 95-976 (Comm. on Ways and Means). SENATE REPORT No. 95-1127 (Comm. on Finance). CONGRESSIONAL RECORD, Vol. 124 (1978): May 16, considered and passed House. Aug. 25, considered and passed Senate, amended. Sept. 7, 12, House agreed to Senate amendments with amendments. Sept. 28, Senate concurred in House amendments.