A bill to amend Public Law 97-34.

(Reported to Senate from the Committee on Finance with amendment, S. Rept. 97-667)

Provides that certain employees who received stock in November or December of 1973 through the exercise of employee stock options may elect to have provisions of the Economic Recovery Tax Act of 1981, which revise the tax treatment of property transferred as compensation for services, to apply retroactively. Limits the reduction of tax liability which may be claimed from such retroactive application to $100,000. Waives the statute of limitations with respect to refunds, credits, or deficiences resulting from the operation of this Act.

Excludes amounts deferred by an employee pursuant to a salary reduction arrangement under a money purchase pension plan from an employee's income if the plan was in existence on June 27, 1974 and contributions don't exceed specified levels. Subjects such plans to certain tax-qualification requirements relating to employee eligibility to participate and to discrimination in favor of highly compensated employees.

Eliminates the retroactive application of provisions of the Multiemployer Pension Plan Amendments Act of 1980 relating to the liability of an employer who withdraws from a plan for a portion of the plan's unfunded obligations.

Amends the Tax Reform Act of 1969 to allow specified private foundations to retain certain business holdings without being subject to excise taxes and divestiture requirements. Exempts a specified newspaper from the private foundation rules applicable to charitable trusts for a specified period.

Excludes from the definition of "artificial bait" any substance which contains 85 percent of plant or animal material which can be ingested by fish, for purposes of the excise tax on fishing equipment.