Requires for nomination purposes that: (1) the area be experiencing high rates of poverty and unemployment and general distress; and (2) State and local governments enter into written contracts with community organizations to promote specified economic growth and employment activities.
Excludes from gross income capital gains on the sale or exchange of a qualified community asset (stock, business property, or partnership interest) held for more than five years.
Allows: (1) a renewal community employment credit; (2) a commercial revitalization deduction; (3) increased expensing for renewal community business assets; and (4) the work opportunity credit for hiring youth residing in renewal communities.
Subtitle B: Extension and Expansion of Empowerment Zone Incentives - Provides for the designation of additional empowerment zones and increased empowerment zone tax incentives.
Subtitle C: New Markets Tax Credit- Establishes a new markets tax credit with respect to specified qualified low-income community investments. Sets a national new markets tax credit limitation.
Subtitle D: Improvements in Low-Income Housing Credit - Amends the Code, with respect to the low-income housing credit, to revise the formula for the State housing credit ceiling. Provides for cost-of-living adjustments to the State ceiling.
(Sec. 132) Revises the housing priority selection criteria a housing credit agency must use to develop a qualified plan for allocating housing credit dollar amounts among projects. Requires such criteria to include: (1) whether the project would use existing housing as part of a community revitalization plan; (2) tenant populations of individuals with children; and (3) projects intended for eventual tenant ownership. Drops from such criteria participation of local tax-exempt organizations. Requires a qualified allocation plan to give preference in making allocations to projects located in qualified census tracts whose development contributes to a concerted community revitalization plan.
(Sec. 133) Requires housing credit agencies to: (1) provide for a comprehensive market study (by a disinterested party, at the developer's expense) of the housing needs of low-income individuals in the area to be served by the project before the credit allocation is made; and (2) make public a written explanation for any allocation of a housing credit dollar amount not made in accordance with the agency's established priorities and selection criteria.
(Sec. 134) Revises special rules for the determination of the adjusted basis of buildings eligible for the low-income housing credit. Requires adjusted basis to include property used throughout the taxable year in providing any community service facility designed to serve primarily individuals (even if they are not tenants) whose income is 60 percent or less of area median income.
Declares that assistance under the Native American Housing Assistance and Self-Determination Act of 1996 shall be disregarded in determining whether a building is federally subsidized for purposes of the low-income housing credit.
(Sec. 135) Revises the definition of a qualified building (placed in service not later than the second calendar year following a housing credit dollar amount allocation) with respect to which the amount of a low-income housing credit may exceed the credit amount allocated to the building. Sets an alternative date for valuation of the taxpayer's actual basis in the project of which the building is a part (where the actual basis is more than ten percent of the taxpayer's reasonably expected basis). Allows the valuation of the actual basis to be as of the later of the date which is six months after the date that the allocation was made or (as currently) the close of the calendar year in which the allocation is made. Revises the formula for determination of the amount of State housing credit ceiling returned in a calendar year to include the dollar amount previously allocated to a project which fails to meet the ten percent test on a date after the close of the calendar year in which the allocation was made.
Revises special rules for the increased basis of a building located in certain high cost areas to redefine a qualified census tract to include, as an alternative to existing criteria, a tract with a poverty rate of at least 25 percent.
(Sec. 136) Revises the formula for determining unused housing credit carryovers allocated among certain States.
Subtitle E: Other Community Renewal and New Markets Assistance - Part I: Provisions Relating to Housing and Substance Abuse Prevention and Treatment - Amends the Departments of Veterans Affairs and Housing and Urban Development, and Independent Agencies Appropriations Act, 1997 to direct the Secretary to transfer ownership of qualified HUD-held properties (substandard or unoccupied multifamily or unoccupied single family properties) to local governments and community development corporations under specified conditions. Requires such properties to be held by HUD for at least six months.
(Sec. 142) Directs the Secretary, upon request of the appropriate jurisdiction, to designate as a revitalization area all portions of such jurisdiction meeting the necessary criteria.
(Sec. 143) Revises the current demonstration mortgage reinsurance program to: (1) make such program a risk-sharing program served by private mortgage insurers and insured community development financial institutions (as defined by this Act); (2) enlarge the program to four administrative areas; and (3) require such entities to assume a secondary percentage of loss of an insured mortgage.
(Sec. 144) Permits a religious organization to receive Federal funding through the Substance Abuse and Mental Health Services Administration. Prohibits funding discrimination against such an organization so long as its program is implemented in a manner consistent with the Establishment Clause of the first amendment to the Constitution.
Part II: Advisory Council on Community Renewal - Advisory Council on Community Renewal Act - Establishes the Advisory Council on Community Renewal Act to advise the Secretary of Housing and Urban Development on the designation of renewal communities and on the exercise of authorities granted to the Secretary pursuant to this title.
Subtitle F: Other Provisions - Provides for an accelerated phase-in of specified increases in the volume cap on private activity bonds.
(Sec. 162) Repeals the targeted area limitation on the expense deduction for environmental remediation costs and to extend the termination date of such deduction from December 31, 2001, to June 30, 2003.
(Sec. 163) Extends the DC homebuyer tax credit for two additional years.
(Sec. 164) Extends DC Enterprise Zone provisions for an additional year.
(Sec. 165) Expands and extends the enhanced deduction for corporate donations of computer technology.
(Sec. 166) Provides for the treatment of Indian tribal governments under Federal Unemployment Tax Act.
Title II: Two-Year Extension of Availability of Medical Savings Accounts - Extends, for two years the availability of medical savings accounts. Renames such accounts Archer MSAs.
Title III: Administrative and Technical Provisions - Subtitle A: Administrative Provisions - Sets forth various administrative provisions, including provisions concerning: (1) the exemption of certain reporting requirements; (2) the extension of deadlines for IRS compliance with certain notice requirements; (3) the extension of authority for undercover operations; (4) confidentiality of certain documents relating to closing and similar agreements and to agreements with foreign governments; (5) an increase in the threshold for Joint Committee reports on refunds and credits; (6) the treatment of missing children with respect to certain tax benefits; (7) the prevention of the duplication of loss through the assumption of liabilities giving rise to a deduction; and (8) the disclosure of certain return information to the Congressional Budget Office, but only concerning long-term social security and medicare models.
Subtitle B: Technical Corrections - Makes amendments to the: (1) Ticket to Work and Work Incentives Improvement Act of 1999; (2) Tax and Trade Relief Extension Act of 1998; (3) Internal Revenue Service Restructuring and Reform Act of 1998; (4) Taxpayer Relief Act of 1997; (5) Balanced Budget Act of 1997; (6) Small Business Job Protection Act of 1996; and (7) Revenue Reconciliation Act of 1990.
Title IV: Tax Treatment of Securities Futures Contracts - States that, in general, a gain or loss attributable to the sale or exchange of a futures contract shall be considered gain or loss from the sale or exchange of property which has the same character as the property to which the contract relates has in the hands of the taxpayer if acquired by the taxpayer.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5662 Introduced in House (IH)]
106th CONGRESS
2d Session
H. R. 5662
To amend the Internal Revenue Code of 1986 to provide for community
revitalization and a 2-year extension of medical saving accounts, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 14, 2000
Mr. Archer (for himself and Mr. Armey) 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 provide for community
revitalization and a 2-year extension of medical saving accounts, 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; AMENDMENT OF 1986 CODE.
(a) Short Title.--This Act may be cited as the ``Community Renewal
Tax Relief Act of 2000''.
(b) Amendment of 1986 Code.--Except as otherwise expressly
provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; amendment of 1986 Code.
TITLE I--COMMUNITY RENEWAL AND NEW MARKETS
Subtitle A--Tax Incentives for Renewal Communities
Sec. 101. Designation of and tax incentives for renewal communities.
Sec. 102. Work opportunity credit for hiring youth residing in renewal
communities.
Subtitle B--Extension and Expansion of Empowerment Zone Incentives
Sec. 111. Authority to designate nine additional empowerment zones.
Sec. 112. Extension of empowerment zone treatment through 2009.
Sec. 113. Twenty percent employment credit for all empowerment zones.
Sec. 114. Increased expensing under section 179.
Sec. 115. Higher limits on tax-exempt empowerment zone facility bonds.
Sec. 116. Nonrecognition of gain on rollover of empowerment zone
investments.
Sec. 117. Increased exclusion of gain on sale of empowerment zone
stock.
Subtitle C--New Markets Tax Credit
Sec. 121. New markets tax credit.
Subtitle D--Improvements in Low-Income Housing Credit
Sec. 131. Modification of State ceiling on low-income housing credit.
Sec. 132. Modification of criteria for allocating housing credits among
projects.
Sec. 133. Additional responsibilities of housing credit agencies.
Sec. 134. Modifications to rules relating to basis of building which is
eligible for credit.
Sec. 135. Other modifications.
Sec. 136. Carryforward rules.
Sec. 137. Effective date.
Subtitle E--Other Community Renewal and New Markets Assistance
Part I--Provisions relating to housing and substance abuse prevention
and treatment
Sec. 141. Transfer of unoccupied and substandard HUD-held housing to
local governments and community development
corporations.
Sec. 142. Transfer of HUD assets in revitalization areas.
Sec. 143. Risk-sharing demonstration.
Sec. 144. Prevention and treatment of substance abuse; services
provided through religious organizations.
Part II--Advisory Council on Community Renewal
Sec. 151. Short title.
Sec. 152. Establishment.
Sec. 153. Duties of Advisory Council.
Sec. 154. Membership.
Sec. 155. Powers of Advisory Council.
Sec. 156. Reports.
Sec. 157. Termination.
Sec. 158. Applicability of Federal Advisory Committee Act.
Sec. 159. Resources.
Sec. 160. Effective date.
Subtitle F--Other Provisions
Sec. 161. Acceleration of phase-in of increase in volume cap on private
activity bonds.
Sec. 162. Modifications to expensing of environmental remediation
costs.
Sec. 163. Extension of DC homebuyer tax credit.
Sec. 164. Extension of DC Zone through 2003.
Sec. 165. Extension of enhanced deduction for corporate donations of
computer technology.
Sec. 166. Treatment of Indian tribal governments under Federal
Unemployment Tax Act.
TITLE II--TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS
ACCOUNTS
Sec. 201. Two-year extension of availability of medical savings
accounts.
Sec. 202. Medical savings accounts renamed as Archer MSAs.
TITLE III--ADMINISTRATIVE AND TECHNICAL PROVISIONS
Subtitle A--Administrative Provisions
Sec. 301. Exemption of certain reporting requirements.
Sec. 302. Extension of deadlines for IRS compliance with certain notice
requirements.
Sec. 303. Extension of authority for undercover operations.
Sec. 304. Confidentiality of certain documents relating to closing and
similar agreements and to agreements with
foreign governments.
Sec. 305. Increase in threshold for Joint Committee reports on refunds
and credits.
Sec. 306. Treatment of missing children with respect to certain tax
benefits.
Sec. 307. Amendments to statutes referencing yield on 52-week Treasury
bills.
Sec. 308. Adjustments for Consumer Price Index error.
Sec. 309. Prevention of duplication of loss through assumption of
liabilities giving rise to a deduction.
Sec. 310. Disclosure of certain information to Congressional Budget
Office.
Subtitle B--Technical Corrections
Sec. 311. Amendments related to Ticket to Work and Work Incentives
Improvement Act of 1999.
Sec. 312. Amendments related to Tax and Trade Relief Extension Act of
1998.
Sec. 313. Amendments related to Internal Revenue Service Restructuring
and Reform Act of 1998.
Sec. 314. Amendments related to Taxpayer Relief Act of 1997.
Sec. 315. Amendments related to Balanced Budget Act of 1997.
Sec. 316. Amendments related to Small Business Job Protection Act of
1996.
Sec. 317. Amendment related to Revenue Reconciliation Act of 1990.
Sec. 318. Other technical corrections.
Sec. 319. Clerical changes.
TITLE IV--TAX TREATMENT OF SECURITIES FUTURES CONTRACTS
Sec. 401. Tax treatment of securities futures contracts.
TITLE I--COMMUNITY RENEWAL AND NEW MARKETS
Subtitle A--Tax Incentives for Renewal Communities
SEC. 101. DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL COMMUNITIES.
(a) In General.--Chapter 1 is amended by adding at the end the
following new subchapter:
``Subchapter X--Renewal Communities
``Part I. Designation.
``Part II. Renewal community capital
gain; renewal community
business.
``Part III. Additional incentives.
``PART I--DESIGNATION
``Sec. 1400E. Designation of renewal
communities.
``SEC. 1400E. DESIGNATION OF RENEWAL COMMUNITIES.
``(a) Designation.--
``(1) Definitions.--For purposes of this title, the term
`renewal community' means any area--
``(A) which is nominated by 1 or more local
governments and the State or States in which it is
located for designation as a renewal community
(hereafter in this section referred to as a `nominated
area'), and
``(B) which the Secretary of Housing and Urban
Development designates as a renewal community, after
consultation with--
``(i) the Secretaries of Agriculture,
Commerce, Labor, and the Treasury; the Director
of the Office of Management and Budget, and the
Administrator of the Small Business
Administration, and
``(ii) in the case of an area on an Indian
reservation, the Secretary of the Interior.
``(2) Number of designations.--
``(A) In general.--Not more than 40 nominated areas
may be designated as renewal communities.
``(B) Minimum designation in rural areas.--Of the
areas designated under paragraph (1), at least 12 must
be areas--
``(i) which are within a local government
jurisdiction or jurisdictions with a population
of less than 50,000,
``(ii) which are outside of a metropolitan
statistical area (within the meaning of section
143(k)(2)(B)), or
``(iii) which are determined by the
Secretary of Housing and Urban Development,
after consultation with the Secretary of
Commerce, to be rural areas.
``(3) Areas designated based on degree of poverty, etc.--
``(A) In general.--Except as otherwise provided in
this section, the nominated areas designated as renewal
communities under this subsection shall be those
nominated areas with the highest average ranking with
respect to the criteria described in subparagraphs (B),
(C), and (D) of subsection (c)(3). For purposes of the
preceding sentence, an area shall be ranked within each
such criterion on the basis of the amount by which the
area exceeds such criterion, with the area which
exceeds such criterion by the greatest amount given the
highest ranking.
``(B) Exception where inadequate course of action,
etc.--An area shall not be designated under
subparagraph (A) if the Secretary of Housing and Urban
Development determines that the course of action
described in subsection (d)(2) with respect to such
area is inadequate.
``(C) Preference for enterprise communities and
empowerment zones.--With respect to the first 20
designations made under this section, a preference
shall be provided to those nominated areas which are
enterprise communities or empowerment zones (and are
otherwise eligible for designation under this section).
``(4) Limitation on designations.--
``(A) Publication of regulations.--The Secretary of
Housing and Urban Development shall prescribe by
regulation no later than 4 months after the date of the
enactment of this section, after consultation with the
officials described in paragraph (1)(B)--
``(i) the procedures for nominating an area
under paragraph (1)(A),
``(ii) the parameters relating to the size
and population characteristics of a renewal
community, and
``(iii) the manner in which nominated areas
will be evaluated based on the criteria
specified in subsection (d).
``(B) Time limitations.--The Secretary of Housing
and Urban Development may designate nominated areas as
renewal communities only during the period beginning on
the first day of the first month following the month in
which the regulations described in subparagraph (A) are
prescribed and ending on December 31, 2001.
``(C) Procedural rules.--The Secretary of Housing
and Urban Development shall not make any designation of
a nominated area as a renewal community under paragraph
(2) unless--
``(i) the local governments and the States
in which the nominated area is located have the
authority--
``(I) to nominate such area for
designation as a renewal community,
``(II) to make the State and local
commitments described in subsection
(d), and
``(III) to provide assurances
satisfactory to the Secretary of
Housing and Urban Development that such
commitments will be fulfilled,
``(ii) a nomination regarding such area is
submitted in such a manner and in such form,
and contains such information, as the Secretary
of Housing and Urban Development shall by
regulation prescribe, and
``(iii) the Secretary of Housing and Urban
Development determines that any information
furnished is reasonably accurate.
``(5) Nomination process for indian reservations.--For
purposes of this subchapter, in the case of a nominated area on
an Indian reservation, the reservation governing body (as
determined by the Secretary of the Interior) shall be treated
as being both the State and local governments with respect to
such area.
``(b) Period for Which Designation Is in Effect.--
``(1) In general.--Any designation of an area as a renewal
community shall remain in effect during the period beginning on
January 1, 2002, and ending on the earliest of--
``(A) December 31, 2009,
``(B) the termination date designated by the State
and local governments in their nomination, or
``(C) the date the Secretary of Housing and Urban
Development revokes such designation.
``(2) Revocation of designation.--The Secretary of Housing
and Urban Development may revoke the designation under this
section of an area if such Secretary determines that the local
government or the State in which the area is located--
``(A) has modified the boundaries of the area, or
``(B) is not complying substantially with, or fails
to make progress in achieving, the State or local
commitments, respectively, described in subsection (d).
``(3) Earlier termination of certain benefits if earlier
termination of designation.--If the designation of an area as a
renewal community terminates before December 31, 2009, the day
after the date of such termination shall be substituted for
`January 1, 2010' each place it appears in sections 1400F and
1400J with respect to such area.
``(c) Area and Eligibility Requirements.--
``(1) In general.--The Secretary of Housing and Urban
Development may designate a nominated area as a renewal
community under subsection (a) only if the area meets the
requirements of paragraphs (2) and (3) of this subsection.
``(2) Area requirements.--A nominated area meets the
requirements of this paragraph if--
``(A) the area is within the jurisdiction of one or
more local governments,
``(B) the boundary of the area is continuous, and
``(C) the area--
``(i) has a population of not more than
200,000 and at least--
``(I) 4,000 if any portion of such
area (other than a rural area described
in subsection (a)(2)(B)(i)) is located
within a metropolitan statistical area
(within the meaning of section
143(k)(2)(B)) which has a population of
50,000 or greater, or
``(II) 1,000 in any other case, or
``(ii) is entirely within an Indian
reservation (as determined by the Secretary of
the Interior).
``(3) Eligibility requirements.--A nominated area meets the
requirements of this paragraph if the State and the local
governments in which it is located certify in writing (and the
Secretary of Housing and Urban Development, after such review
of supporting data as he deems appropriate, accepts such
certification) that--
``(A) the area is one of pervasive poverty,
unemployment, and general distress,
``(B) the unemployment rate in the area, as
determined by the most recent available data, was at
least 1\1/2\ times the national unemployment rate for
the period to which such data relate,
``(C) the poverty rate for each population census
tract within the nominated area is at least 20 percent,
and
``(D) in the case of an urban area, at least 70
percent of the households living in the area have
incomes below 80 percent of the median income of
households within the jurisdiction of the local
government (determined in the same manner as under
section 119(b)(2) of the Housing and Community
Development Act of 1974).
``(4) Consideration of other factors.--The Secretary of
Housing and Urban Development, in selecting any nominated area
for designation as a renewal community under this section--
``(A) shall take into account--
``(i) the extent to which such area has a
high incidence of crime, or
``(ii) if such area has census tracts
identified in the May 12, 1998, report of the
General Accounting Office regarding the
identification of economically distressed
areas, and
``(B) with respect to 1 of the areas to be
designated under subsection (a)(2)(B), may, in lieu of
any criteria described in paragraph (3), take into
account the existence of outmigration from the area.
``(d) Required State and Local Commitments.--
``(1) In general.--The Secretary of Housing and Urban
Development may designate any nominated area as a renewal
community under subsection (a) only if--
``(A) the local government and the State in which
the area is located agree in writing that, during any
period during which the area is a renewal community,
such governments will follow a specified course of
action which meets the requirements of paragraph (2)
and is designed to reduce the various burdens borne by
employers or employees in such area, and
``(B) the economic growth promotion requirements of
paragraph (3) are met.
``(2) Course of action.--
``(A) In general.--A course of action meets the
requirements of this paragraph if such course of action
is a written document, signed by a State (or local
government) and neighborhood organizations, which
evidences a partnership between such State or
government and community-based organizations and which
commits each signatory to specific and measurable
goals, actions, and timetables. Such course of action
shall include at least 4 of the following:
``(i) A reduction of tax rates or fees
applying within the renewal community.
``(ii) An increase in the level of
efficiency of local services within the renewal
community.
``(iii) Crime reduction strategies, such as
crime prevention (including the provision of
crime prevention services by nongovernmental
entities).
``(iv) Actions to reduce, remove, simplify,
or streamline governmental requirements
applying within the renewal community.
``(v) Involvement in the program by private
entities, organizations, neighborhood
organizations, and community groups,
particularly those in the renewal community,
including a commitment from such private
entities to provide jobs and job training for,
and technical, financial, or other assistance
to, employers, employees, and residents from
the renewal community.
``(vi) The gift (or sale at below fair
market value) of surplus real property (such as
land, homes, and commercial or industrial
structures) in the renewal community to
neighborhood organizations, community
development corporations, or private companies.
``(B) Recognition of past efforts.--For purposes of
this section, in evaluating the course of action agreed
to by any State or local government, the Secretary of
Housing and Urban Development shall take into account
the past efforts of such State or local government in
reducing the various burdens borne by employers and
employees in the area involved.
``(3) Economic growth promotion requirements.--The economic
growth promotion requirements of this paragraph are met with
respect to a nominated area if the local government and the
State in which such area is located certify in writing that
such government and State (respectively) have repealed or
reduced, will not enforce, or will reduce within the nominated
area at least 4 of the following:
``(A) Licensing requirements for occupations that
do not ordinarily require a professional degree.
``(B) Zoning restrictions on home-based businesses
which do not create a public nuisance.
``(C) Permit requirements for street vendors who do
not create a public nuisance.
``(D) Zoning or other restrictions that impede the
formation of schools or child care centers.
``(E) Franchises or other restrictions on
competition for businesses providing public services,
including taxicabs, jitneys, cable television, or trash
hauling.
This paragraph shall not apply to the extent that such
regulation of businesses and occupations is necessary for and
well-tailored to the protection of health and safety.
``(e) Coordination With Treatment of Empowerment Zones and
Enterprise Communities.--For purposes of this title, the designation
under section 1391 of any area as an empowerment zone or enterprise
community shall cease to be in effect as of the date that the
designation of any portion of such area as a renewal community takes
effect.
``(f) Definitions and Special Rules.--For purposes of this
subchapter--
``(1) Governments.--If more than one government seeks to
nominate an area as a renewal community, any reference to, or
requirement of, this section shall apply to all such
governments.
``(2) Local government.--The term `local government'
means--
``(A) any county, city, town, township, parish,
village, or other general purpose political subdivision
of a State, and
``(B) any combination of political subdivisions
described in subparagraph (A) recognized by the
Secretary of Housing and Urban Development.
``(3) Application of rules relating to census tracts.--The
rules of section 1392(b)(4) shall apply.
``(4) Census data.--Population and poverty rate shall be
determined by using 1990 census data.
``PART II--RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS
``Sec. 1400F. Renewal community capital
gain.
``Sec. 1400G. Renewal community business
defined.
``SEC. 1400F. RENEWAL COMMUNITY CAPITAL GAIN.
``(a) General Rule.--Gross income does not include any qualified
capital gain from the sale or exchange of a qualified community asset
held for more than 5 years.
``(b) Qualified Community Asset.--For purposes of this section--
``(1) In general.--The term `qualified community asset'
means--
``(A) any qualified community stock,
``(B) any qualified community partnership interest,
and
``(C) any qualified community business property.
``(2) Qualified community stock.--
``(A) In general.--Except as provided in
subparagraph (B), the term `qualified community stock'
means any stock in a domestic corporation if--
``(i) such stock is acquired by the
taxpayer after December 31, 2001, and before
January 1, 2010, at its original issue
(directly or through an underwriter) from the
corporation solely in exchange for cash,
``(ii) as of the time such stock was
issued, such corporation was a renewal
community business (or, in the case of a new
corporation, such corporation was being
organized for purposes of being a renewal
community business), and
``(iii) during substantially all of the
taxpayer's holding period for such stock, such
corporation qualified as a renewal community
business.
``(B) Redemptions.--A rule similar to the rule of
section 1202(c)(3) shall apply for purposes of this
paragraph.
``(3) Qualified community partnership interest.--The term
`qualified community partnership interest' means any capital or
profits interest in a domestic partnership if--
``(A) such interest is acquired by the taxpayer
after December 31, 2001, and before January 1, 2010,
from the partnership solely in exchange for cash,
``(B) as of the time such interest was acquired,
such partnership was a renewal community business (or,
in the case of a new partnership, such partnership was
being organized for purposes of being a renewal
community business), and
``(C) during substantially all of the taxpayer's
holding period for such interest, such partnership
qualified as a renewal community business.
A rule similar to the rule of paragraph (2)(B) shall apply for
purposes of this paragraph.
``(4) Qualified community business property.--
``(A) In general.--The term `qualified community
business property' means tangible property if--
``(i) such property was acquired by the
taxpayer by purchase (as defined in section
179(d)(2)) after December 31, 2001, and before
January 1, 2010,
``(ii) the original use of such property in
the renewal community commences with the
taxpayer, and
``(iii) during substantially all of the
taxpayer's holding period for such property,
substantially all of the use of such property
was in a renewal community business of the
taxpayer.
``(B) Special rule for substantial improvements.--
The requirements of clauses (i) and (ii) of
subparagraph (A) shall be treated as satisfied with
respect to--
``(i) property which is substantially
improved by the taxpayer before January 1,
2010, and
``(ii) any land on which such property is
located.
The determination of whether a property is
substantially improved shall be made under clause (ii)
of section 1400B(b)(4)(B), except that `December 31,
2001' shall be substituted for `December 31, 1997' in
such clause.
``(c) Qualified Capital Gain.--For purposes of this section--
``(1) In general.--Except as otherwise provided in this
subsection, the term `qualified capital gain' means any gain
recognized on the sale or exchange of--
``(A) a capital asset, or
``(B) property used in the trade or business (as
defined in section 1231(b)).
``(2) Gain before 2002 or after 2014 not qualified.--The
term `qualified capital gain' shall not include any gain
attributable to periods before January 1, 2002, or after
December 31, 2014.
``(3) Certain rules to apply.--Rules similar to the rules
of paragraphs (3), (4), and (5) of section 1400B(e) shall apply
for purposes of this subsection.
``(d) Certain Rules To Apply.--For purposes of this section, rules
similar to the rules of paragraphs (5), (6), and (7) of subsection (b),
and subsections (f) and (g), of section 1400B shall apply; except that
for such purposes section 1400B(g)(2) shall be applied by substituting
`January 1, 2002' for `January 1, 1998' and `December 31, 2014' for
`December 31, 2008'.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out the purposes of this section,
including regulations to prevent the abuse of the purposes of this
section.
``SEC. 1400G. RENEWAL COMMUNITY BUSINESS DEFINED.
``For purposes of this subchapter, the term `renewal community
business' means any entity or proprietorship which would be a qualified
business entity or qualified proprietorship under section 1397C if
references to renewal communities were substituted for references to
empowerment zones in such section.
``PART III--ADDITIONAL INCENTIVES
``Sec. 1400H. Renewal community
employment credit.
``Sec. 1400I. Commercial revitalization
deduction.
``Sec. 1400J. Increase in expensing under
section 179.
``SEC. 1400H. RENEWAL COMMUNITY EMPLOYMENT CREDIT.
``(a) In General.--Subject to the modification in subsection (b), a
renewal community shall be treated as an empowerment zone for purposes
of section 1396 with respect to wages paid or incurred after December
31, 2001.
``(b) Modification.--In applying section 1396 with respect to
renewal communities--
``(1) the applicable percentage shall be 15 percent, and
``(2) subsection (c) thereof shall be applied by
substituting `$10,000' for `$15,000' each place it appears.
``SEC. 1400I. COMMERCIAL REVITALIZATION DEDUCTION.
``(a) General Rule.--At the election of the taxpayer, either--
``(1) one-half of any qualified revitalization expenditures
chargeable to capital account with respect to any qualified
revitalization building shall be allowable as a deduction for
the taxable year in which the building is placed in service, or
``(2) a deduction for all such expenditures shall be
allowable ratably over the 120-month period beginning with the
month in which the building is placed in service.
``(b) Qualified Revitalization Buildings and Expenditures.--For
purposes of this section--
``(1) Qualified revitalization building.--The term
`qualified revitalization building' means any building (and its
structural components) if--
``(A) the building is placed in service by the
taxpayer in a renewal community and the original use of
the building begins with the taxpayer, or
``(B) in the case of such building not described in
subparagraph (A), such building--
``(i) is substantially rehabilitated
(within the meaning of section 47(c)(1)(C)) by
the taxpayer, and
``(ii) is placed in service by the taxpayer
after the rehabilitation in a renewal
community.
``(2) Qualified revitalization expenditure.--
``(A) In general.--The term `qualified
revitalization expenditure' means any amount properly
chargeable to capital account for property for which
depreciation is allowable under section 168 (without
regard to this section) and which is--
``(i) nonresidential real property (as
defined in section 168(e)), or
``(ii) section 1250 property (as defined in
section 1250(c)) which is functionally related
and subordinate to property described in clause
(i).
``(B) Certain expenditures not included.--
``(i) Acquisition cost.--In the case of a
building described in paragraph (1)(B), the
cost of acquiring the building or interest
therein shall be treated as a qualified
revitalization expenditure only to the extent
that such cost does not exceed 30 percent of
the aggregate qualified revitalization
expenditures (determined without regard to such
cost) with respect to such building.
``(ii) Credits.--The term `qualified
revitalization expenditure' does not include
any expenditure which the taxpayer may take
into account in computing any credit allowable
under this title unless the taxpayer elects to
take the expenditure into account only for
purposes of this section.
``(c) Dollar Limitation.--The aggregate amount which may be treated
as qualified revitalization expenditures with respect to any qualified
revitalization building shall not exceed the lesser of--
``(1) $10,000,000, or
``(2) the commercial revitalization expenditure amount
allocated to such building under this section by the commercial
revitalization agency for the State in which the building is
located.
``(d) Commercial Revitalization Expenditure Amount.--
``(1) In general.--The aggregate commercial revitalization
expenditure amount which a commercial revitalization agency may
allocate for any calendar year is the amount of the State
commercial revitalization expenditure ceiling determined under
this paragraph for such calendar year for such agency.
``(2) State commercial revitalization expenditure
ceiling.--The State commercial revitalization expenditure
ceiling applicable to any State--
``(A) for each calendar year after 2001 and before
2010 is $12,000,000 for each renewal community in the
State, and
``(B) for each calendar year thereafter is zero.
``(3) Commercial revitalization agency.--For purposes of
this section, the term `commercial revitalization agency' means
any agency authorized by a State to carry out this section.
``(4) Time and manner of allocations.--Allocations under
this section shall be made at the same time and in the same
manner as under paragraphs (1) and (7) of section 42(h).
``(e) Responsibilities of Commercial Revitalization Agencies.--
``(1) Plans for allocation.--Notwithstanding any other
provision of this section, the commercial revitalization
expenditure amount with respect to any building shall be zero
unless--
``(A) such amount was allocated pursuant to a
qualified allocation plan of the commercial
revitalization agency which is approved (in accordance
with rules similar to the rules of section 147(f)(2)
(other than subparagraph (B)(ii) thereof)) by the
governmental unit of which such agency is a part, and
``(B) such agency notifies the chief executive
officer (or its equivalent) of the local jurisdiction
within which the building is located of such allocation
and provides such individual a reasonable opportunity
to comment on the allocation.
``(2) Qualified allocation plan.--For purposes of this
subsection, the term `qualified allocation plan' means any
plan--
``(A) which sets forth selection criteria to be
used to determine priorities of the commercial
revitalization agency which are appropriate to local
conditions,
``(B) which considers--
``(i) the degree to which a project
contributes to the implementation of a
strategic plan that is devised for a renewal
community through a citizen participation
process,
``(ii) the amount of any increase in
permanent, full-time employment by reason of
any project, and
``(iii) the active involvement of residents
and nonprofit groups within the renewal
community, and
``(C) which provides a procedure that the agency
(or its agent) will follow in monitoring compliance
with this section.
``(f) Special Rules.--
``(1) Deduction in lieu of depreciation.--The deduction
provided by this section for qualified revitalization
expenditures shall--
``(A) with respect to the deduction determined
under subsection (a)(1), be in lieu of any depreciation
deduction otherwise allowable on account of one-half of
such expenditures, and
``(B) with respect to the deduction determined
under subsection (a)(2), be in lieu of any depreciation
deduction otherwise allowable on account of all of such
expenditures.
``(2) Basis adjustment, etc.--For purposes of sections 1016
and 1250, the deduction under this section shall be treated in
the same manner as a depreciation deduction. For purposes of
section 1250(b)(5), the straight line method of adjustment
shall be determined without regard to this section.
``(3) Substantial rehabilitations treated as separate
buildings.--A substantial rehabilitation (within the meaning of
section 47(c)(1)(C)) of a building shall be treated as a
separate building for purposes of subsection (a).
``(4) Clarification of allowance of deduction under minimum
tax.--Notwithstanding section 56(a)(1), the deduction under
this section shall be allowed in determining alternative
minimum taxable income under section 55.
``(g) Termination.--This section shall not apply to any building
placed in service after December 31, 2009.
``SEC. 1400J. INCREASE IN EXPENSING UNDER SECTION 179.
``(a) In General.--For purposes of section 1397A--
``(1) a renewal community shall be treated as an
empowerment zone,
``(2) a renewal community business shall be treated as an
enterprise zone business, and
``(3) qualified renewal property shall be treated as
qualified zone property.
``(b) Qualified Renewal Property.--For purposes of this section--
``(1) In general.--The term `qualified renewal property'
means any property to which section 168 applies (or would apply
but for section 179) if--
``(A) such property was acquired by the taxpayer by
purchase (as defined in section 179(d)(2)) after
December 31, 2001, and before January 1, 2010, and
``(B) such property would be qualified zone
property (as defined in section 1397D) if references to
renewal communities were substituted for references to
empowerment zones in section 1397D.
``(2) Certain rules to apply.--The rules of subsections
(a)(2) and (b) of section 1397D shall apply for purposes of
this section.''.
(b) Exception for Commercial Revitalization Deduction From Passive
Loss Rules.--
(1) Paragraph (3) of section 469(i) is amended by
redesignating subparagraphs (C), (D), and (E) as subparagraphs
(D), (E), and (F), respectively, and by inserting after
subparagraph (B) the following new subparagraph:
``(C) Exception for commercial revitalization
deduction.--Subparagraph (A) shall not apply to any
portion of the passive activity loss for any taxable
year which is attributable to the commercial
revitalization deduction under section 1400I.''.
(2) Subparagraph (E) of section 469(i)(3), as redesignated
by subparagraph (A), is amended to read as follows:
``(E) Ordering rules to reflect exceptions and
separate phase-outs.--If subparagraph (B), (C), or (D)
applies for a taxable year, paragraph (1) shall be
applied--
``(i) first to the portion of the passive
activity loss to which subparagraph (C) does
not apply,
``(ii) second to the portion of the passive
activity credit to which subparagraph (B) or
(D) does not apply,
``(iii) third to the portion of such credit
to which subparagraph (B) applies,
``(iv) fourth to the portion of such loss
to which subparagraph (C) applies, and
``(v) then to the portion of such credit to
which subparagraph (D) applies.''.
(3)(A) Subparagraph (B) of section 469(i)(6) is amended by
striking ``or'' at the end of clause (i), by striking the
period at the end of clause (ii) and inserting ``, or'', and by
adding at the end the following new clause:
``(iii) any deduction under section 1400I
(relating to commercial revitalization
deduction).''.
(B) The heading for such subparagraph (B) is amended by
striking ``or rehabilitation credit'' and inserting ``,
rehabilitation credit, or commercial revitalization
deduction''.
(c) Audit and Report.--Not later than January 31 of 2004, 2007, and
2010, the Comptroller General of the United States shall, pursuant to
an audit of the renewal community program established under section
1400E of the Internal Revenue Code of 1986 (as added by subsection (a))
and the empowerment zone and enterprise community program under
subchapter U of chapter 1 of such Code, report to Congress on such
program and its effect on poverty, unemployment, and economic growth
within the designated renewal communities, empowerment zones, and
enterprise communities.
(d) Clerical Amendment.--The table of subchapters for chapter 1 is
amended by adding at the end the following new item:
``Subchapter X. Renewal Communities.''.
SEC. 102. WORK OPPORTUNITY CREDIT FOR HIRING YOUTH RESIDING IN RENEWAL
COMMUNITIES.
(a) High-Risk Youth.--Subparagraphs (A)(ii) and (B) of section
51(d)(5) are each amended by striking ``empowerment zone or enterprise
community'' and inserting ``empowerment zone, enterprise community, or
renewal community''.
(b) Qualified Summer Youth Employee.--Clause (iv) of section
51(d)(7)(A) is amended by striking ``empowerment zone or enterprise
community'' and inserting ``empowerment zone, enterprise community, or
renewal community''.
(c) Headings.--Paragraphs (5)(B) and (7)(C) of section 51(d) are
each amended by inserting ``or community'' in the heading after
``zone''.
(d) Effective Date.--The amendments made by this section shall
apply to individuals who begin work for the employer after December 31,
2001.
Subtitle B--Extension and Expansion of Empowerment Zone Incentives
SEC. 111. AUTHORITY TO DESIGNATE NINE ADDITIONAL EMPOWERMENT ZONES.
Section 1391 is amended by adding at the end the following new
subsection:
``(h) Additional Designations Permitted.--
``(1) In general.--In addition to the areas designated
under subsections (a) and (g), the appropriate Secretaries may
designate in the aggregate an additional 9 nominated areas as
empowerment zones under this section, subject to the
availability of eligible nominated areas. Of that number, not
more than seven may be designated in urban areas and not more
than 2 may be designated in rural areas.
``(2) Period designations may be made and take effect.--A
designation may be made under this subsection after the date of
the enactment of this subsection and before January 1, 2002.
Subject to subparagraphs (B) and (C) of subsection (d)(1), such
designations shall remain in effect during the period beginning
on January 1, 2002, and ending on December 31, 2009.
``(3) Modifications to eligibility criteria, etc.--The
rules of subsection (g)(3) shall apply to designations under
this subsection.
``(4) Empowerment zones which become renewal communities.--
The number of areas which may be designated as empowerment
zones under this subsection shall be increased by 1 for each
area which ceases to be an empowerment zone by reason of
section 1400E(e). Each additional area designated by reason of
the preceding sentence shall have the same urban or rural
character as the area it is replacing.''.
SEC. 112. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009.
Subparagraph (A) of section 1391(d)(1) (relating to period for
which designation is in effect) is amended to read as follows:
``(A)(i) in the case of an empowerment zone,
December 31, 2009, or
``(ii) in the case of an enterprise community, the
close of the 10th calendar year beginning on or after
such date of designation,''.
SEC. 113. TWENTY PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES.
(a) 20 Percent Credit.--Subsection (b) of section 1396 (relating to
empowerment zone employment credit) is amended to read as follows:
``(b) Applicable Percentage.--For purposes of this section, the
applicable percentage is 20 percent.''.
(b) All Empowerment Zones Eligible for Credit.--Section 1396 is
amended by striking subsection (e).
(c) Conforming Amendment.--Subsection (d) of section 1400 is
amended to read as follows:
``(d) Special Rule for Application of Employment Credit.--With
respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment
zone employment credit) shall be applied by substituting `the District
of Columbia' for `such empowerment zone'.''.
(d) Effective Date.--The amendments made by this section shall
apply to wages paid or incurred after December 31, 2001.
SEC. 114. INCREASED EXPENSING UNDER SECTION 179.
(a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended
by striking ``$20,000'' and inserting ``$35,000''.
(b) Expensing for Property Used in Developable Sites.--Section
1397A is amended by striking subsection (c).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2001.
SEC. 115. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS.
(a) In General.--Paragraph (3) of section 1394(f) (relating to
bonds for empowerment zones designated under section 1391(g)) is
amended to read as follows:
``(3) Empowerment zone facility bond.--For purposes of this
subsection, the term `empowerment zone facility bond' means any
bond which would be described in subsection (a) if--
``(A) in the case of obligations issued before
January 1, 2002, only empowerment zones designated
under section 1391(g) were taken into account under
sections 1397C and 1397D, and
``(B) in the case of obligations issued after
December 31, 2001, all empowerment zones (other than
the District of Columbia Enterprise Zone) were taken
into account under sections 1397C and 1397D.''.
(b) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2001.
SEC. 116. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE
INVESTMENTS.
(a) In General.--Part III of subchapter U of chapter 1 is amended--
(1) by redesignating subpart C as subpart D,
(2) by redesignating sections 1397B and 1397C as sections
1397C and 1397D, respectively, and
(3) by inserting after subpart B the following new subpart:
``Subpart C--Nonrecognition of Gain on Rollover of Empowerment Zone
Investments
``Sec. 1397B. Nonrecognition of gain on
rollover of empowerment zone
investments.
``SEC. 1397B. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE
INVESTMENTS.
``(a) Nonrecognition of Gain.--In the case of any sale of a
qualified empowerment zone asset held by the taxpayer for more than 1
year and with respect to which such taxpayer elects the application of
this section, gain from such sale shall be recognized only to the
extent that the amount realized on such sale exceeds--
``(1) the cost of any qualified empowerment zone asset
(with respect to the same zone as the asset sold) purchased by
the taxpayer during the 60-day period beginning on the date of
such sale, reduced by
``(2) any portion of such cost previously taken into
account under this section.
``(b) Definitions and Special Rules.--For purposes of this
section--
``(1) Qualified empowerment zone asset.--
``(A) In general.--The term `qualified empowerment
zone asset' means any property which would be a
qualified community asset (as defined in section 1400F)
if in section 1400F--
``(i) references to empowerment zones were
substituted for references to renewal
communities,
``(ii) references to enterprise zone
businesses (as defined in section 1397C) were
substituted for references to renewal community
businesses, and
``(iii) the date of the enactment of this
paragraph were substituted for `December 31,
2001' each place it appears.
``(B) Treatment of dc zone.--The District of
Columbia Enterprise Zone shall not be treated as an
empowerment zone for purposes of this section.
``(2) Certain gain not eligible for rollover.--This section
shall not apply to--
``(A) any gain which is treated as ordinary income
for purposes of this subtitle, and
``(B) any gain which is attributable to real
property, or an intangible asset, which is not an
integral part of an enterprise zone business.
``(3) Purchase.--A taxpayer shall be treated as having
purchased any property if, but for paragraph (4), the
unadjusted basis of such property in the hands of the taxpayer
would be its cost (within the meaning of section 1012).
``(4) Basis adjustments.--If gain from any sale is not
recognized by reason of subsection (a), such gain shall be
applied to reduce (in the order acquired) the basis for
determining gain or loss of any qualified empowerment zone
asset which is purchased by the taxpayer during the 60-day
period described in subsection (a). This paragraph shall not
apply for purposes of section 1202.
``(5) Holding period.--For purposes of determining whether
the nonrecognition of gain under subsection (a) applies to any
qualified empowerment zone asset which is sold--
``(A) the taxpayer's holding period for such asset
and the asset referred to in subsection (a)(1) shall be
determined without regard to section 1223, and
``(B) only the first year of the taxpayer's holding
period for the asset referred to in subsection (a)(1)
shall be taken into account for purposes of paragraphs
(2)(A)(iii), (3)(C), and (4)(A)(iii) of section
1400F(b).''.
(b) Conforming Amendments.--
(1) Paragraph (23) of section 1016(a) is amended--
(A) by striking ``or 1045'' and inserting ``1045,
or 1397B'', and
(B) by striking ``or 1045(b)(4)'' and inserting
``1045(b)(4), or 1397B(b)(4)''.
(2) Paragraph (15) of section 1223 is amended to read as
follows:
``(15) Except for purposes of sections 1202(a)(2),
1202(c)(2)(A), 1400B(b), and 1400F(b), in determining the
period for which the taxpayer has held property the acquisition
of which resulted under section 1045 or 1397B in the
nonrecognition of any part of the gain realized on the sale of
other property, there shall be included the period for which
such other property has been held as of the date of such
sale.''.
(3) Paragraph (2) of section 1394(b) is amended--
(A) by striking ``section 1397C'' and inserting
``section 1397D'', and
(B) by striking ``section 1397C(a)(2)'' and
inserting ``section 1397D(a)(2)''.
(4) Paragraph (3) of section 1394(b) is amended--
(A) by striking ``section 1397B'' each place it
appears and inserting ``section 1397C'', and
(B) by striking ``section 1397B(d)'' and inserting
``section 1397C(d)''.
(5) Sections 1400(e) and 1400B(c) are each amended by
striking ``section 1397B'' each place it appears and inserting
``section 1397C''.
(6) The table of subparts for part III of subchapter U of
chapter 1 is amended by striking the last item and inserting
the following new items:
``Subpart C. Nonrecognition of gain on
rollover of empowerment zone
investments.
``Subpart D. General provisions.''.
(7) The table of sections for subpart D of such part III is
amended to read as follows:
``Sec. 1397C. Enterprise zone business
defined.
``Sec. 1397D. Qualified zone property
defined.''.
(c) Effective Date.--The amendments made by this section shall
apply to qualified empowerment zone assets acquired after the date of
the enactment of this Act.
SEC. 117. INCREASED EXCLUSION OF GAIN ON SALE OF EMPOWERMENT ZONE
STOCK.
(a) In General.--Subsection (a) of section 1202 is amended to read
as follows:
``(a) Exclusion.--
``(1) In general.--In the case of a taxpayer other than a
corporation, gross income shall not include 50 percent of any
gain from the sale or exchange of qualified small business
stock held for more than 5 years.
``(2) Empowerment zone businesses.--
``(A) In general.--In the case of qualified small
business stock acquired after the date of the enactment
of this paragraph in a corporation which is a qualified
business entity (as defined in section 1397C(b)) during
substantially all of the taxpayer's holding period for
such stock, paragraph (1) shall be applied by
substituting `60 percent' for `50 percent'.
``(B) Certain rules to apply.--Rules similar to the
rules of paragraphs (5) and (7) of section 1400B(b)
shall apply for purposes of this paragraph.
``(C) Gain after 2014 not qualified.--Subparagraph
(A) shall not apply to gain attributable to periods
after December 31, 2014.
``(D) Treatment of dc zone.--The District of
Columbia Enterprise Zone shall not be treated as an
empowerment zone for purposes of this paragraph.''.
(b) Conforming Amendments.--
(1) Paragraph (8) of section 1(h) is amended by striking
``means'' and all that follows and inserting ``means the excess
of--
``(A) the gain which would be excluded from gross
income under section 1202 but for the percentage
limitation in section 1202(a), over
``(B) the gain excluded from gross income under
section 1202.''.
(2) The section heading for section 1202 is amended by
striking ``<DELETED>50-percent</DELETED>'' and inserting
``<DELETED>partial</DELETED>''.
(3) The table of sections for part I of subchapter P of
chapter 1 is amended by striking ``50-percent'' and inserting
``Partial''.
(c) Effective Date.--The amendments made by this section shall
apply to stock acquired after the date of the enactment of this Act.
Subtitle C--New Markets Tax Credit
SEC. 121. NEW MARKETS TAX CREDIT.
(a) In General.--Subpart D of part IV of subchapter A of chapter 1
(relating to business-related credits) is amended by adding at the end
the following new section:
``SEC. 45D. NEW MARKETS TAX CREDIT.
``(a) Allowance of Credit.--
``(1) In general.--For purposes of section 38, in the case
of a taxpayer who holds a qualified equity investment on a
credit allowance date of such investment which occurs during
the taxable year, the new markets tax credit determined under
this section for such taxable year is an amount equal to the
applicable percentage of the amount paid to the qualified
community development entity for such investment at its
original issue.
``(2) Applicable percentage.--For purposes of paragraph
(1), the applicable percentage is--
``(A) 5 percent with respect to the first 3 credit
allowance dates, and
``(B) 6 percent with respect to the remainder of
the credit allowance dates.
``(3) Credit allowance date.--For purposes of paragraph
(1), the term `credit allowance date' means, with respect to
any qualified equity investment--
``(A) the date on which such investment is
initially made, and
``(B) each of the 6 anniversary dates of such date
thereafter.
``(b) Qualified Equity Investment.--For purposes of this section--
``(1) In general.--The term `qualified equity investment'
means any equity investment in a qualified community
development entity if--
``(A) such investment is acquired by the taxpayer
at its original issue (directly or through an
underwriter) solely in exchange for cash,
``(B) substantially all of such cash is used by the
qualified community development entity to make
qualified low-income community investments, and
``(C) such investment is designated for purposes of
this section by the qualified community development
entity.
Such term shall not include any equity investment issued by a
qualified community development entity more than 5 years after
the date that such entity receives an allocation under
subsection (f). Any allocation not used within such 5-year
period may be reallocated by the Secretary under subsection
(f).
``(2) Limitation.--The maximum amount of equity investments
issued by a qualified community development entity which may be
designated under paragraph (1)(C) by such entity shall not
exceed the portion of the limitation amount allocated under
subsection (f) to such entity.
``(3) Safe harbor for determining use of cash.--The
requirement of paragraph (1)(B) shall be treated as met if at
least 85 percent of the aggregate gross assets of the qualified
community development entity are invested in qualified low-
income community investments.
``(4) Treatment of subsequent purchasers.--The term
`qualified equity investment' includes any equity investment
which would (but for paragraph (1)(A)) be a qualified equity
investment in the hands of the taxpayer if such investment was
a qualified equity investment in the hands of a prior holder.
``(5) Redemptions.--A rule similar to the rule of section
1202(c)(3) shall apply for purposes of this subsection.
``(6) Equity investment.--The term `equity investment'
means--
``(A) any stock (other than nonqualified preferred
stock as defined in section 351(g)(2)) in an entity
which is a corporation, and
``(B) any capital interest in an entity which is a
partnership.
``(c) Qualified Community Development Entity.--For purposes of this
section--
``(1) In general.--The term `qualified community
development entity' means any domestic corporation or
partnership if--
``(A) the primary mission of the entity is serving,
or providing investment capital for, low-income
communities or low-income persons,
``(B) the entity maintains accountability to
residents of low-income communities through their
representation on any governing board of the entity or
on any advisory board to the entity, and
``(C) the entity is certified by the Secretary for
purposes of this section as being a qualified community
development entity.
``(2) Special rules for certain organizations.--The
requirements of paragraph (1) shall be treated as met by--
``(A) any specialized small business investment
company (as defined in section 1044(c)(3)), and
``(B) any community development financial
institution (as defined in section 103 of the Community
Development Banking and Financial Institutions Act of
1994 (12 U.S.C. 4702)).
``(d) Qualified Low-Income Community Investments.--For purposes of
this section--
``(1) In general.--The term `qualified low-income community
investment' means--
``(A) any capital or equity investment in, or loan
to, any qualified active low-income community business,
``(B) the purchase from another qualified community
development entity of any loan made by such entity
which is a qualified low-income community investment,
``(C) financial counseling and other services
specified in regulations prescribed by the Secretary to
businesses located in, and residents of, low-income
communities, and
``(D) any equity investment in, or loan to, any
qualified community development entity.
``(2) Qualified active low-income community business.--
``(A) In general.--For purposes of paragraph (1),
the term `qualified active low-income community
business' means, with respect to any taxable year, any
corporation (including a nonprofit corporation) or
partnership if for such year--
``(i) at least 50 percent of the total
gross income of such entity is derived from the
active conduct of a qualified business within
any low-income community,
``(ii) a substantial portion of the use of
the tangible property of such entity (whether
owned or leased) is within any low-income
community,
``(iii) a substantial portion of the
services performed for such entity by its
employees are performed in any low-income
community,
``(iv) less than 5 percent of the average
of the aggregate unadjusted bases of the
property of such entity is attributable to
collectibles (as defined in section 408(m)(2))
other than collectibles that are held primarily
for sale to customers in the ordinary course of
such business, and
``(v) less than 5 percent of the average of
the aggregate unadjusted bases of the property
of such entity is attributable to nonqualified
financial property (as defined in section
1397C(e)).
``(B) Proprietorship.--Such term shall include any
business carried on by an individual as a proprietor if
such business would meet the requirements of
subparagraph (A) were it incorporated.
``(C) Portions of business may be qualified active
low-income community business.--The term `qualified
active low-income community business' includes any
trades or businesses which would qualify as a qualified
active low-income community business if such trades or
businesses were separately incorporated.
``(3) Qualified business.--For purposes of this subsection,
the term `qualified business' has the meaning given to such
term by section 1397C(d); except that--
``(A) in lieu of applying paragraph (2)(B) thereof,
the rental to others of real property located in any
low-income community shall be treated as a qualified
business if there are substantial improvements located
on such property, and
``(B) paragraph (3) thereof shall not apply.
``(e) Low-Income Community.--For purposes of this section--
``(1) In general.--The term `low-income community' means
any population census tract if--
``(A) the poverty rate for such tract is at least
20 percent, or
``(B)(i) in the case of a tract not located within
a metropolitan area, the median family income for such
tract does not exceed 80 percent of statewide median
family income, or
``(ii) in the case of a tract located within a
metropolitan area, the median family income for such
tract does not exceed 80 percent of the greater of
statewide median family income or the metropolitan area
median family income.
Subparagraph (B) shall be applied using possessionwide median
family income in the case of census tracts located within a
possession of the United States.
``(2) Targeted areas.--The Secretary may designate any area
within any census tract as a low-income community if--
``(A) the boundary of such area is continuous,
``(B) the area would satisfy the requirements of
paragraph (1) if it were a census tract, and
``(C) an inadequate access to investment capital
exists in such area.
``(3) Areas not within census tracts.--In the case of an
area which is not tracted for population census tracts, the
equivalent county divisions (as defined by the Bureau of the
Census for purposes of defining poverty areas) shall be used
for purposes of determining poverty rates and median family
income.
``(f) National Limitation on Amount of Investments Designated.--
``(1) In general.--There is a new markets tax credit
limitation for each calendar year. Such limitation is--
``(A) $1,000,000,000 for 2001,
``(B) $1,500,000,000 for 2002 and 2003,
``(C) $2,000,000,000 for 2004 and 2005, and
``(D) $3,500,000,000 for 2006 and 2007.
``(2) Allocation of limitation.--The limitation under
paragraph (1) shall be allocated by the Secretary among
qualified community development entities selected by the
Secretary. In making allocations under the preceding sentence,
the Secretary shall give priority to any entity--
``(A) with a record of having successfully provided
capital or technical assistance to disadvantaged
businesses or communities, or
``(B) which intends to satisfy the requirement
under subsection (b)(1)(B) by making qualified low-
income community investments in 1 or more businesses in
which persons unrelated to such entity (within the
meaning of section 267(b) or 707(b)(1)) hold the
majority equity interest.
``(3) Carryover of unused limitation.--If the new markets
tax credit limitation for any calendar year exceeds the
aggregate amount allocated under paragraph (2) for such year,
such limitation for the succeeding calendar year shall be
increased by the amount of such excess. No amount may be
carried under the preceding sentence to any calendar year after
2014.
``(g) Recapture of Credit In Certain Cases.--
``(1) In general.--If, at any time during the 7-year period
beginning on the date of the original issue of a qualified
equity investment in a qualified community development entity,
there is a recapture event with respect to such investment,
then the tax imposed by this chapter for the taxable year in
which such event occurs shall be increased by the credit
recapture amount.
``(2) Credit recapture amount.--For purposes of paragraph
(1), the credit recapture amount is an amount equal to the sum
of--
``(A) the aggregate decrease in the credits allowed
to the taxpayer under section 38 for all prior taxable
years which would have resulted if no credit had been
determined under this section with respect to such
investment, plus
``(B) interest at the underpayment rate established
under section 6621 on the amount determined under
subparagraph (A) for each prior taxable year for the
period beginning on the due date for filing the return
for the prior taxable year involved.
No deduction shall be allowed under this chapter for interest
described in subparagraph (B).
``(3) Recapture event.--For purposes of paragraph (1),
there is a recapture event with respect to an equity investment
in a qualified community development entity if--
``(A) such entity ceases to be a qualified
community development entity,
``(B) the proceeds of the investment cease to be
used as required of subsection (b)(1)(B), or
``(C) such investment is redeemed by such entity.
``(4) Special rules.--
``(A) Tax benefit rule.--The tax for the taxable
year shall be increased under paragraph (1) only with
respect to credits allowed by reason of this section
which were used to reduce tax liability. In the case of
credits not so used to reduce tax liability, the
carryforwards and carrybacks under section 39 shall be
appropriately adjusted.
``(B) No credits against tax.--Any increase in tax
under this subsection shall not be treated as a tax
imposed by this chapter for purposes of determining the
amount of any credit under this chapter or for purposes
of section 55.
``(h) Basis Reduction.--The basis of any qualified equity
investment shall be reduced by the amount of any credit determined
under this section with respect to such investment. This subsection
shall not apply for purposes of sections 1202, 1400B, and 1400F.
``(i) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out this section, including
regulations--
``(1) which limit the credit for investments which are
directly or indirectly subsidized by other Federal tax benefits
(including the credit under section 42 and the exclusion from
gross income under section 103),
``(2) which prevent the abuse of the purposes of this
section,
``(3) which provide rules for determining whether the
requirement of subsection (b)(1)(B) is treated as met,
``(4) which impose appropriate reporting requirements, and
``(5) which apply the provisions of this section to newly
formed entities.''.
(b) Credit Made Part of General Business Credit.--
(1) In general.--Subsection (b) of section 38 is amended by
striking ``plus'' at the end of paragraph (11), by striking the
period at the end of paragraph (12) and inserting ``, plus'',
and by adding at the end the following new paragraph:
``(13) the new markets tax credit determined under section
45D(a).''.
(2) Limitation on carryback.--Subsection (d) of section 39
is amended by adding at the end the following new paragraph:
``(9) No carryback of new markets tax credit before january
1, 2001.--No portion of the unused business credit for any
taxable year which is attributable to the credit under section
45D may be carried back to a taxable year ending before January
1, 2001.''.
(c) Deduction for Unused Credit.--Subsection (c) of section 196 is
amended by striking ``and'' at the end of paragraph (7), by striking
the period at the end of paragraph (8) and inserting ``, and'', and by
adding at the end the following new paragraph:
``(9) the new markets tax credit determined under section
45D(a).''.
(d) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
the following new item:
``Sec. 45D. New markets tax credit.''.
(e) Effective Date.--The amendments made by this section shall
apply to investments made after December 31, 2000.
(f) Guidance on Allocation of National Limitation.--Not later than
120 days after the date of the enactment of this Act, the Secretary of
the Treasury or the Secretary's delegate shall issue guidance which
specifies--
(1) how entities shall apply for an allocation under
section 45D(f)(2) of the Internal Revenue Code of 1986, as
added by this section;
(2) the competitive procedure through which such
allocations are made; and
(3) the actions that such Secretary or delegate shall take
to ensure that such allocations are properly made to
appropriate entities.
(g) Audit and Report.--Not later than January 31 of 2004, 2007, and
2010, the Comptroller General of the United States shall, pursuant to
an audit of the new markets tax credit program established under
section 45D of the Internal Revenue Code of 1986 (as added by
subsection (a)), report to Congress on such program, including all
qualified community development entities that receive an allocation
under the new markets credit under such section.
Subtitle D--Improvements in Low-Income Housing Credit
SEC. 131. MODIFICATION OF STATE CEILING ON LOW-INCOME HOUSING CREDIT.
(a) In General.--Clauses (i) and (ii) of section 42(h)(3)(C)
(relating to State housing credit ceiling) are amended to read as
follows:
``(i) the unused State housing credit
ceiling (if any) of such State for the
preceding calendar year,
``(ii) the greater of--
``(I) $1.75 ($1.50 for 2001)
multiplied by the State population, or
``(II) $2,000,000,''.
(b) Adjustment of State Ceiling for Increases in Cost-of-Living.--
Paragraph (3) of section 42(h) (relating to housing credit dollar
amount for agencies) is amended by adding at the end the following new
subparagraph:
``(H) Cost-of-living adjustment.--
``(i) In general.--In the case of a
calendar year after 2002, the $2,000,000 and
$1.75 amounts in subparagraph (C) shall each be
increased by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost-of-living
adjustment determined under section
1(f)(3) for such calendar year by
substituting `calendar year 2001' for
`calendar year 1992' in subparagraph
(B) thereof.
``(ii) Rounding.--
``(I) In the case of the $2,000,000
amount, any increase under clause (i)
which is not a multiple of $5,000 shall
be rounded to the next lowest multiple
of $5,000.
``(II) In the case of the $1.75
amount, any increase under clause (i)
which is not a multiple of 5 cents
shall be rounded to the next lowest
multiple of 5 cents.''.
(c) Conforming Amendments.--
(1) Section 42(h)(3)(C), as amended by subsection (a), is
amended--
(A) by striking ``clause (ii)'' in the matter
following clause (iv) and inserting ``clause (i)''; and
(B) by striking ``clauses (i)'' in the matter
following clause (iv) and inserting ``clauses (ii)''.
(2) Section 42(h)(3)(D)(ii) is amended--
(A) by striking ``subparagraph (C)(ii)'' and
inserting ``subparagraph (C)(i)''; and
(B) by striking ``clauses (i)'' in subclause (II)
and inserting ``clauses (ii)''.
(d) Effective Date.--The amendments made by this section shall
apply to calendar years after 2000.
SEC. 132. MODIFICATION OF CRITERIA FOR ALLOCATING HOUSING CREDITS AMONG
PROJECTS.
(a) Selection Criteria.--Subparagraph (C) of section 42(m)(1)
(relating to certain selection criteria must be used) is amended--
(1) by inserting ``, including whether the project includes
the use of existing housing as part of a community
revitalization plan'' before the comma at the end of clause
(iii); and
(2) by striking clauses (v), (vi), and (vii) and inserting
the following new clauses:
``(v) tenant populations with special
housing needs,
``(vi) public housing waiting lists,
``(vii) tenant populations of individuals
with children, and
``(viii) projects intended for eventual
tenant ownership.''.
(b) Preference for Community Revitalization Projects Located in
Qualified Census Tracts.--Clause (ii) of section 42(m)(1)(B) is amended
by striking ``and'' at the end of subclause (I), by adding ``and'' at
the end of subclause (II), and by inserting after subclause (II) the
following new subclause:
``(III) projects which are located
in qualified census tracts (as defined
in subsection (d)(5)(C)) and the
development of which contributes to a
concerted community revitalization
plan,''.
SEC. 133. ADDITIONAL RESPONSIBILITIES OF HOUSING CREDIT AGENCIES.
(a) Market Study; Public Disclosure of Rationale for Not Following
Credit Allocation Priorities.--Subparagraph (A) of section 42(m)(1)
(relating to responsibilities of housing credit agencies) is amended by
striking ``and'' at the end of clause (i), by striking the period at
the end of clause (ii) and inserting a comma, and by adding at the end
the following new clauses:
``(iii) a comprehensive market study of the
housing needs of low-income individuals in the
area to be served by the project is conducted
before the credit allocation is made and at the
developer's expense by a disinterested party
who is approved by such agency, and
``(iv) a written explanation is available
to the general public for any allocation of a
housing credit dollar amount which is not made
in accordance with established priorities and
selection criteria of the housing credit
agency.''.
(b) Site Visits.--Clause (iii) of section 42(m)(1)(B) (relating to
qualified allocation plan) is amended by inserting before the period
``and in monitoring for noncompliance with habitability standards
through regular site visits''.
SEC. 134. MODIFICATIONS TO RULES RELATING TO BASIS OF BUILDING WHICH IS
ELIGIBLE FOR CREDIT.
(a) Adjusted Basis To Include Portion of Certain Buildings Used by
Low-Income Individuals Who Are Not Tenants and by Project Employees.--
Paragraph (4) of section 42(d) (relating to special rules relating to
determination of adjusted basis) is amended--
(1) by striking ``subparagraph (B)'' in subparagraph (A)
and inserting ``subparagraphs (B) and (C)'';
(2) by redesignating subparagraph (C) as subparagraph (D);
and
(3) by inserting after subparagraph (B) the following new
subparagraph:
``(C) Inclusion of basis of property used to
provide services for certain nontenants.--
``(i) In general.--The adjusted basis of
any building located in a qualified census
tract (as defined in paragraph (5)(C)) shall be
determined by taking into account the adjusted
basis of property (of a character subject to
the allowance for depreciation and not
otherwise taken into account) used throughout
the taxable year in providing any community
service facility.
``(ii) Limitation.--The increase in the
adjusted basis of any building which is taken
into account by reason of clause (i) shall not
exceed 10 percent of the eligible basis of the
qualified low-income housing project of which
it is a part. For purposes of the preceding
sentence, all community service facilities
which are part of the same qualified low-income
housing project shall be treated as one
facility.
``(iii) Community service facility.--For
purposes of this subparagraph, the term
`community service facility' means any facility
designed to serve primarily individuals whose
income is 60 percent or less of area median
income (within the meaning of subsection
(g)(1)(B)).''.
(b) Certain Native American Housing Assistance Disregarded in
Determining Whether Building Is Federally Subsidized for Purposes of
the Low-Income Housing Credit.--Subparagraph (E) of section 42(i)(2)
(relating to determination of whether building is federally subsidized)
is amended--
(1) in clause (i), by inserting ``or the Native American
Housing Assistance and Self-Determination Act of 1996 (25
U.S.C. 4101 et seq.) (as in effect on October 1, 1997)'' after
``this subparagraph)''; and
(2) in the subparagraph heading, by inserting ``or native
american housing assistance'' after ``home assistance''.
SEC. 135. OTHER MODIFICATIONS.
(a) Allocation of Credit Limit to Certain Buildings.--
(1) The first sentence of section 42(h)(1)(E)(ii) is
amended by striking ``(as of'' the first place it appears and
inserting ``(as of the later of the date which is 6 months
after the date that the allocation was made or''.
(2) The last sentence of section 42(h)(3)(C) is amended by
striking ``project which'' and inserting ``project which fails
to meet the 10 percent test under paragraph (1)(E)(ii) on a
date after the close of the calendar year in which the
allocation was made or which''.
(b) Determination of Whether Buildings Are Located in High Cost
Areas.--The first sentence of section 42(d)(5)(C)(ii)(I) is amended--
(1) by inserting ``either'' before ``in which 50 percent'';
and
(2) by inserting before the period ``or which has a poverty
rate of at least 25 percent''.
SEC. 136. CARRYFORWARD RULES.
(a) In General.--Clause (ii) of section 42(h)(3)(D) (relating to
unused housing credit carryovers allocated among certain States) is
amended by striking ``the excess'' and all that follows and inserting
``the excess (if any) of--
``(I) the unused State housing
credit ceiling for the year preceding
such year, over
``(II) the aggregate housing credit
dollar amount allocated for such
year.''.
(b) Conforming Amendment.--The second sentence of section
42(h)(3)(C) (relating to State housing credit ceiling) is amended by
striking ``clauses (i) and (iii)'' and inserting ``clauses (i) through
(iv)''.
SEC. 137. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the amendments made
by this subtitle shall apply to--
(1) housing credit dollar amounts allocated after December
31, 2000; and
(2) buildings placed in service after such date to the
extent paragraph (1) of section 42(h) of the Internal Revenue
Code of 1986 does not apply to any building by reason of
paragraph (4) thereof, but only with respect to bonds issued
after such date.
Subtitle E--Other Community Renewal and New Markets Assistance
PART I--PROVISIONS RELATING TO HOUSING AND SUBSTANCE ABUSE PREVENTION
AND TREATMENT
SEC. 141. TRANSFER OF UNOCCUPIED AND SUBSTANDARD HUD-HELD HOUSING TO
LOCAL GOVERNMENTS AND COMMUNITY DEVELOPMENT CORPORATIONS.
Section 204 of the Departments of Veterans Affairs and Housing and
Urban Development, and Independent Agencies Appropriations Act, 1997
(12 U.S.C. 1715z-11a) is amended--
(1) by striking ``Flexible Authority.--'' and inserting
``Disposition of HUD-Owned Properties. (a) Flexible Authority
for Multifamily Projects.--''; and
(2) by adding at the end the following new subsection:
``(b) Transfer of Unoccupied and Substandard Housing to Local
Governments and Community Development Corporations.--
``(1) Transfer authority.--Notwithstanding the authority
under subsection (a) and the last sentence of section 204(g) of
the National Housing Act (12 U.S.C. 1710(g)), the Secretary of
Housing and Urban Development shall transfer ownership of any
qualified HUD property, subject to the requirements of this
section, to a unit of general local government having
jurisdiction for the area in which the property is located or
to a community development corporation which operates within
such a unit of general local government in accordance with this
subsection, but only to the extent that units of general local
government and community development corporations consent to
transfer and the Secretary determines that such transfer is
practicable.
``(2) Qualified hud properties.--For purposes of this
subsection, the term `qualified HUD property' means any
property for which, as of the date that notification of the
property is first made under paragraph (3)(B), not less than 6
months have elapsed since the later of the date that the
property was acquired by the Secretary or the date that the
property was determined to be unoccupied or substandard, that
is owned by the Secretary and is--
``(A) an unoccupied multifamily housing project;
``(B) a substandard multifamily housing project; or
``(C) an unoccupied single family property that--
``(i) has been determined by the Secretary
not to be an eligible asset under section
204(h) of the National Housing Act (12 U.S.C.
1710(h)); or
``(ii) is an eligible asset under such
section 204(h), but--
``(I) is not subject to a specific
sale agreement under such section; and
``(II) has been determined by the
Secretary to be inappropriate for
continued inclusion in the program
under such section 204(h) pursuant to
paragraph (10) of such section.
``(3) Timing.--The Secretary shall establish procedures
that provide for--
``(A) time deadlines for transfers under this
subsection;
``(B) notification to units of general local
government and community development corporations of
qualified HUD properties in their jurisdictions;
``(C) such units and corporations to express
interest in the transfer under this subsection of such
properties;
``(D) a right of first refusal for transfer of
qualified HUD properties to units of general local
government and community development corporations,
under which--
``(i) the Secretary shall establish a
period during which the Secretary may not
transfer such properties except to such units
and corporations;
``(ii) the Secretary shall offer qualified
HUD properties that are single family
properties for purchase by units of general
local government at a cost of $1 for each
property, but only to the extent that the costs
to the Federal Government of disposal at such
price do not exceed the costs to the Federal
Government of disposing of property subject to
the procedures for single family property
established by the Secretary pursuant to the
authority under the last sentence of section
204(g) of the National Housing Act (12 U.S.C.
1710(g));
``(iii) the Secretary may accept an offer
to purchase a property made by a community
development corporation only if the offer
provides for purchase on a cost recovery basis;
and
``(iv) the Secretary shall accept an offer
to purchase such a property that is made during
such period by such a unit or corporation and
that complies with the requirements of this
paragraph; and
``(E) a written explanation, to any unit of general
local government or community development corporation
making an offer to purchase a qualified HUD property
under this subsection that is not accepted, of the
reason that such offer was not acceptable.
``(4) Other disposition.--With respect to any qualified HUD
property, if the Secretary does not receive an acceptable offer
to purchase the property pursuant to the procedure established
under paragraph (3), the Secretary shall dispose of the
property to the unit of general local government in which
property is located or to community development corporations
located in such unit of general local government on a
negotiated, competitive bid, or other basis, on such terms as
the Secretary deems appropriate.
``(5) Satisfaction of indebtedness.--Before transferring
ownership of any qualified HUD property pursuant to this
subsection, the Secretary shall satisfy any indebtedness
incurred in connection with the property to be transferred, by
canceling the indebtedness.
``(6) Determination of status of properties.--To ensure
compliance with the requirements of this subsection, the
Secretary shall take the following actions:
``(A) Upon enactment.--Upon the enactment of this
subsection, the Secretary shall promptly assess each
residential property owned by the Secretary to
determine whether such property is a qualified HUD
property.
``(B) Upon acquisition.--Upon acquiring any
residential property, the Secretary shall promptly
determine whether the property is a qualified HUD
property.
``(C) Updates.--The Secretary shall periodically
reassess the residential properties owned by the
Secretary to determine whether any such properties have
become qualified HUD properties.
``(7) Tenant leases.--This subsection shall not affect the
terms or the enforceability of any contract or lease entered
into with respect to any residential property before the date
that such property becomes a qualified HUD property.
``(8) Use of property.--Property transferred under this
subsection shall be used only for appropriate neighborhood
revitalization efforts, including homeownership, rental units,
commercial space, and parks, consistent with local zoning
regulations, local building codes, and subdivision regulations
and restrictions of record.
``(9) Inapplicability to properties made available for
homeless.--Notwithstanding any other provision of this
subsection, this subsection shall not apply to any properties
that the Secretary determines are to be made available for use
by the homeless pursuant to subpart E of part 291 of title 24,
Code of Federal Regulations, during the period that the
properties are so available.
``(10) Protection of existing contracts.--This subsection
may not be construed to alter, affect, or annul any legally
binding obligations entered into with respect to a qualified
HUD property before the property becomes a qualified HUD
property.
``(11) Definitions.--For purposes of this subsection, the
following definitions shall apply:
``(A) Community development corporation.--The term
`community development corporation' means a nonprofit
organization whose primary purpose is to promote
community development by providing housing
opportunities for low-income families.
``(B) Cost recovery basis.--The term `cost recovery
basis' means, with respect to any sale of a residential
property by the Secretary, that the purchase price paid
by the purchaser is equal to or greater than the sum
of: (i) the appraised value of the property, as
determined in accordance with such requirements as the
Secretary shall establish; and (ii) the costs incurred
by the Secretary in connection with such property
during the period beginning on the date on which the
Secretary acquires title to the property and ending on
the date on which the sale is consummated.
``(C) Multifamily housing project.--The term
`multifamily housing project' has the meaning given the
term in section 203 of the Housing and Community
Development Amendments of 1978.
``(D) Residential property.--The term `residential
property' means a property that is a multifamily
housing project or a single family property.
``(E) Secretary.--The term `Secretary' means the
Secretary of Housing and Urban Development.
``(F) Severe physical problems.--The term `severe
physical problems' means, with respect to a dwelling
unit, that the unit--
``(i) lacks hot or cold piped water, a
flush toilet, or both a bathtub and a shower in
the unit, for the exclusive use of that unit;
``(ii) on not less than three separate
occasions during the preceding winter months,
was uncomfortably cold for a period of more
than 6 consecutive hours due to a malfunction
of the heating system for the unit;
``(iii) has no functioning electrical
service, exposed wiring, any room in which
there is not a functioning electrical outlet,
or has experienced three or more blown fuses or
tripped circuit breakers during the preceding
90-day period;
``(iv) is accessible through a public
hallway in which there are no working light
fixtures, loose or missing steps or railings,
and no elevator; or
``(v) has severe maintenance problems,
including water leaks involving the roof,
windows, doors, basement, or pipes or plumbing
fixtures, holes or open cracks in walls or
ceilings, severe paint peeling or broken
plaster, and signs of rodent infestation.
``(G) Single family property.--The term `single
family property' means a 1- to 4-family residence.
``(H) Substandard.--The term `substandard' means,
with respect to a multifamily housing project, that 25
percent or more of the dwelling units in the project
have severe physical problems.
``(I) Unit of general local government.--The term
`unit of general local government' has the meaning
given such term in section 102(a) of the Housing and
Community Development Act of 1974.
``(J) Unoccupied.--The term `unoccupied' means,
with respect to a residential property, that the unit
of general local government having jurisdiction over
the area in which the project is located has certified
in writing that the property is not inhabited.
``(12) Regulations.--
``(A) Interim.--Not later than 30 days after the
date of the enactment of this subsection, the Secretary
shall issue such interim regulations as are necessary
to carry out this subsection.
``(B) Final.--Not later than 60 days after the date
of the enactment of this subsection, the Secretary
shall issue such final regulations as are necessary to
carry out this subsection.''.
SEC. 142. TRANSFER OF HUD ASSETS IN REVITALIZATION AREAS.
In carrying out the program under section 204(h) of the National
Housing Act (12 U.S.C. 1710(h)), upon the request of the chief
executive officer of a county or the government of appropriate
jurisdiction and not later than 60 days after such request is made, the
Secretary of Housing and Urban Development shall designate as a
revitalization area all portions of such county that meet the criteria
for such designation under paragraph (3) of such section.
SEC. 143. RISK-SHARING DEMONSTRATION.
Section 249 of the National Housing Act (12 U.S.C. 1715z-14) is
amended--
(1) by striking the section heading and inserting the
following:
``risk-sharing demonstration'';
(2) by striking ``reinsurance'' each place such term
appears and insert ``risk-sharing'';
(3) in subsection (a)--
(A) in the first sentence, by inserting ``and with
insured community development financial institutions''
after ``private mortgage insurers'';
(B) in the second sentence--
(i) by striking ``two'' and inserting
``four''; and
(ii) by striking ``March 15, 1988'' and
inserting ``the expiration of the 5-year period
beginning on the date of the enactment of the
Community Renewal Tax Relief Act of 2000''; and
(C) in the third sentence--
(i) by striking ``insured'' and inserting
``for which risk of nonpayment is shared''; and
(ii) by striking ``10 percent'' and
inserting ``20 percent'';
(4) in subsection (b)--
(A) in the first sentence--
(i) by striking ``to provide'' and
inserting ``, in providing'';
(ii) by striking ``through'' and inserting
``, to enter into''; and
(iii) by inserting ``and with insured
community development financial institutions''
before the period at the end;
(B) in the second sentence, by inserting ``and
insured community development financial institutions''
after ``private mortgage insurance companies'';
(C) by striking paragraph (1) and inserting the
following new paragraph:
``(1) assume a secondary percentage of loss on any mortgage
insured pursuant to section 203(b), 234, or 245 covering a one-
to four-family dwelling, which percentage of loss shall be set
forth in the risk-sharing contract, with the first percentage
of loss to be borne by the Secretary;''; and
(D) in paragraph (2)--
(i) by striking ``carry out (under
appropriate delegation) such'' and inserting
``perform or delegate underwriting,'';
(ii) by striking ``function as the
Secretary pursuant to regulations,'' and
inserting ``functions as the Secretary''; and
(iii) by inserting before the period at the
end the following: ``and shall set forth in the
risk-sharing contract'';
(5) in subsection (c)--
(A) in the first sentence--
(i) by striking ``of'' the first place it
appears and inserting ``for'';
(ii) by inserting ``received by the
Secretary with a private mortgage insurer or
insured community development financial
institution'' after ``sharing of premiums'';
(iii) by striking ``insurance reserves''
and inserting ``loss reserves'';
(iv) by striking ``such insurance'' and
inserting ``such risk-sharing contract''; and
(v) by striking ``right'' and inserting
``rights''; and
(B) in the second sentence--
(i) by inserting ``or insured community
development financial institution'' after
``private mortgage insurance company''; and
(ii) by striking ``for insurance'' and
inserting ``for risk-sharing'';
(6) in subsection (d), by inserting ``or insured community
development financial institution'' after ``private mortgage
insurance company''; and
(7) by adding at the end the following new subsection:
``(e) Insured Community Development Financial Institution.--For
purposes of this section, the term `insured community development
financial institution' means a community development financial
institution, as such term is defined in section 103 of Reigle Community
Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702)
that is an insured depository institution (as such term is defined in
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or an
insured credit union (as such term is defined in section 101 of the
Federal Credit Union Act (12 U.S.C. 1752)).''.
SEC. 144. PREVENTION AND TREATMENT OF SUBSTANCE ABUSE; SERVICES
PROVIDED THROUGH RELIGIOUS ORGANIZATIONS.
Title V of the Public Health Service Act (42 U.S.C. 290aa et seq.)
is amended by adding at the end the following part:
``Part G--Services Provided Through Religious Organizations
``SEC. 581. APPLICABILITY TO DESIGNATED PROGRAMS.
``(a) Designated Programs.--Subject to subsection (b), this part
applies to discretionary and formula grant programs administered by the
Substance Abuse and Mental Health Services Administration that make
awards of financial assistance to public or private entities for the
purpose of carrying out activities to prevent or treat substance abuse
(in this part referred to as a `designated program'). Designated
programs include the program under subpart II of part B of title XIX
(relating to formula grants to the States).
``(b) Limitation.--This part does not apply to any award of
financial assistance under a designated program for a purpose other
than the purpose specified in subsection (a).
``(c) Definitions.--For purposes of this part (and subject to
subsection (b)):
``(1) The term `designated program' has the meaning given
such term in subsection (a).
``(2) The term `financial assistance' means a grant,
cooperative agreement, or contract.
``(3) The term `program beneficiary' means an individual
who receives program services.
``(4) The term `program participant' means a public or
private entity that has received financial assistance under a
designated program.
``(5) The term `program services' means treatment for
substance abuse, or preventive services regarding such abuse,
provided pursuant to an award of financial assistance under a
designated program.
``(6) The term `religious organization' means a nonprofit
religious organization.
``SEC. 582. RELIGIOUS ORGANIZATIONS AS PROGRAM PARTICIPANTS.
``(a) In General.--Notwithstanding any other provision of law, a
religious organization, on the same basis as any other nonprofit
private provider--
``(1) may receive financial assistance under a designated
program; and
``(2) may be a provider of services under a designated
program.
``(b) Religious Organizations.--The purpose of this section is to
allow religious organizations to be program participants on the same
basis as any other nonprofit private provider without impairing the
religious character of such organizations, and without diminishing the
religious freedom of program beneficiaries.
``(c) Nondiscrimination Against Religious Organizations.--
``(1) Eligibility as program participants.--Religious
organizations are eligible to be program participants on the
same basis as any other nonprofit private organization as long
as the programs are implemented consistent with the
Establishment Clause and Free Exercise Clause of the First
Amendment to the United States Constitution. Nothing in this
Act shall be construed to restrict the ability of the Federal
Government, or a State or local government receiving funds
under such programs, to apply to religious organizations the
same eligibility conditions in designated programs as are
applied to any other nonprofit private organization.
``(2) Nondiscrimination.--Neither the Federal Government
nor a State or local government receiving funds under
designated programs shall discriminate against an organization
that is or applies to be a program participant on the basis
that the organization has a religious character.
``(d) Religious Character and Freedom.--
``(1) Religious organizations.--Except as provided in this
section, any religious organization that is a program
participant shall retain its independence from Federal, State,
and local government, including such organization's control
over the definition, development, practice, and expression of
its religious beliefs.
``(2) Additional safeguards.--Neither the Federal
Government nor a State shall require a religious organization
to--
``(A) alter its form of internal governance; or
``(B) remove religious art, icons, scripture, or
other symbols,
in order to be a program participant.
``(e) Employment Practices.--Nothing in this section shall be
construed to modify or affect the provisions of any other Federal or
State law or regulation that relates to discrimination in employment. A
religious organization's exemption provided under section 702 of the
Civil Rights Act of 1964 regarding employment practices shall not be
affected by its participation in, or receipt of funds from, a
designated program.
``(f) Rights of Program Beneficiaries.--
``(1) In general.--If an individual who is a program
beneficiary or a prospective program beneficiary objects to the
religious character of a program participant, within a
reasonable period of time after the date of such objection such
program participant shall refer such individual to, and the
appropriate Federal, State, or local government that
administers a designated program or is a program participant
shall provide to such individual (if otherwise eligible for
such services), program services that--
``(A) are from an alternative provider that is
accessible to, and has the capacity to provide such
services to, such individual; and
``(B) have a value that is not less than the value
of the services that the individual would have received
from the program participant to which the individual
had such objection.
Upon referring a program beneficiary to an alternative
provider, the program participant shall notify the appropriate
Federal, State, or local government agency that administers the
program of such referral.
``(2) Notices.--Program participants, public agencies that
refer individuals to designated programs, and the appropriate
Federal, State, or local governments that administer designated
programs or are program participants shall ensure that notice
is provided to program beneficiaries or prospective program
beneficiaries of their rights under this section.
``(3) Additional requirements.--A program participant
making a referral pursuant to paragraph (1) shall--
``(A) prior to making such referral, consider any
list that the State or local government makes available
of entities in the geographic area that provide program
services; and
``(B) ensure that the individual makes contact with
the alternative provider to which the individual is
referred.
``(4) Nondiscrimination.--A religious organization that is
a program participant shall not in providing program services
or engaging in outreach activities under designated programs
discriminate against a program beneficiary or prospective
program beneficiary on the basis of religion or religious
belief.
``(g) Fiscal Accountability.--
``(1) In general.--Except as provided in paragraph (2), any
religious organization that is a program participant shall be
subject to the same regulations as other recipients of awards
of Federal financial assistance to account, in accordance with
generally accepted auditing principles, for the use of the
funds provided under such awards.
``(2) Limited audit.--With respect to the award involved, a
religious organization that is a program participant shall
segregate Federal amounts provided under award into a separate
account from non-Federal funds. Only the award funds shall be
subject to audit by the government.
``(h) Compliance.--With respect to compliance with this section by
an agency, a religious organization may obtain judicial review of
agency action in accordance with chapter 7 of title 5, United States
Code.
``SEC. 583. LIMITATIONS ON USE OF FUNDS FOR CERTAIN PURPOSES.
``No funds provided under a designated program shall be expended
for sectarian worship, instruction, or proselytization.
``SEC. 584. EDUCATIONAL REQUIREMENTS FOR PERSONNEL IN DRUG TREATMENT
PROGRAMS.
``(a) Findings.--The Congress finds that--
``(1) establishing unduly rigid or uniform educational
qualification for counselors and other personnel in drug
treatment programs may undermine the effectiveness of such
programs; and
``(2) such educational requirements for counselors and
other personnel may hinder or prevent the provision of needed
drug treatment services.
``(b) Nondiscrimination.--In determining whether personnel of a
program participant that has a record of successful drug treatment for
the preceding three years have satisfied State or local requirements
for education and training, a State or local government shall not
discriminate against education and training provided to such personnel
by a religious organization, so long as such education and training
includes basic content substantially equivalent to the content provided
by nonreligious organizations that the State or local government would
credit for purposes of determining whether the relevant requirements
have been satisfied.''.
PART II--ADVISORY COUNCIL ON COMMUNITY RENEWAL
SEC. 151. SHORT TITLE.
This part may be cited as the ``Advisory Council on Community
Renewal Act''.
SEC. 152. ESTABLISHMENT.
There is established an advisory council to be known as the
``Advisory Council on Community Renewal'' (in this part referred to as
the ``Advisory Council'').
SEC. 153. DUTIES OF ADVISORY COUNCIL.
The Advisory Council shall advise the Secretary of Housing and
Urban Development (in this part referred to as the ``Secretary'') on
the designation of renewal communities pursuant to the amendment made
by section 101 and on the exercise of any other authority granted to
the Secretary pursuant to the amendments made by this title.
SEC. 154. MEMBERSHIP.
(a) Number and Appointment.--The Advisory Council shall be composed
of 7 members appointed by the Secretary.
(b) Chairperson.--The Chairperson of the Advisory Council (in this
part referred to as the ``Chairperson'') shall be designated by the
Secretary at the time of the appointment.
(c) Terms.--Each member shall be appointed for the life of the
Advisory Council.
(d) Basic Pay.--
(1) Chairperson.--The Chairperson shall be paid at a rate
equal to the daily rate of basic pay for level III of the
Executive Schedule for each day (including travel time) during
which the Chairperson is engaged in the actual performance of
duties vested in the Advisory Council.
(2) Other members.--Members other than the Chairperson
shall each be paid at a rate equal to the daily rate of basic
pay for level IV of the Executive Schedule for each day
(including travel time) during which they are engaged in the
actual performance of duties vested in the Advisory Council.
(e) Travel Expenses.--Each member shall receive travel expenses,
including per diem in lieu of subsistence, in accordance with
applicable provisions under subchapter I of chapter 57 of title 5,
United States Code.
(f) Quorum.--Four members of the Advisory Council shall constitute
a quorum but a lesser number may hold hearings.
(g) Meetings.--The Advisory Council shall meet at the call of the
Secretary or the Chairperson.
SEC. 155. POWERS OF ADVISORY COUNCIL.
(a) Hearings and Sessions.--The Advisory Council may, for the
purpose of carrying out this part, hold hearings, sit and act at times
and places, take testimony, and receive evidence as the Advisory
Council considers appropriate. The Advisory Council may administer
oaths or affirmations to witnesses appearing before it.
(b) Powers of Members and Agents.--Any member or agent of the
Advisory Council may, if authorized by the Advisory Council, take any
action which the Advisory Council is authorized to take by this
section.
(c) Obtaining Official Data.--The Advisory Council may secure
directly from any department or agency of the United States information
necessary to enable it to carry out this part. Upon request of the
Chairperson of the Advisory Council, the head of that department or
agency shall furnish that information to the Advisory Council.
SEC. 156. REPORTS.
(a) Annual Reports.--The Advisory Council shall submit to the
Secretary an annual report for each fiscal year.
(b) Interim Reports.--The Advisory Council may submit to the
Secretary such interim reports as the Advisory Council considers
appropriate.
(c) Final Report.--The Advisory Council shall transmit a final
report to the Secretary not later September 30, 2003. The final report
shall contain a detailed statement of the findings and conclusions of
the Advisory Council, together with any recommendations for legislative
or administrative action that the Advisory Council considers
appropriate.
SEC. 157. TERMINATION.
(a) In General.--The Advisory Council shall terminate 30 days after
submitting its final report under section 156(c).
(b) Extension.--Notwithstanding subsection (a), the Secretary may
postpone the termination of the Advisory Council for a period not to
exceed 3 years after the Advisory Council submits its final report
under section 156(c).
SEC. 158. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.
The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply
to the Advisory Council.
SEC. 159. RESOURCES.
The Secretary shall provide to the Advisory Council appropriate
resources so that the Advisory Council may carry out its duties and
fuctions under this part.
SEC. 160. EFFECTIVE DATE.
This part shall be effective 30 days after the date of its
enactment.
Subtitle F--Other Provisions
SEC. 161. ACCELERATION OF PHASE-IN OF INCREASE IN VOLUME CAP ON PRIVATE
ACTIVITY BONDS.
(a) In General.--Paragraphs (1) and (2) of section 146(d) (relating
to State ceiling) are amended to read as follows:
``(1) In general.--The State ceiling applicable to any
State for any calendar year shall be the greater of--
``(A) an amount equal to $75 ($62.50 in the case of
calendar year 2001) multiplied by the State population,
or
``(B) $225,000,000 ($187,500,000 in the case of
calendar year 2001).
``(2) Cost-of-living adjustment.--In the case of a calendar
year after 2002, each of the dollar amounts contained in
paragraph (1) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by
substituting `calendar year 2001' for `calendar year
1992' in subparagraph (B) thereof.
If any increase determined under the preceding sentence is not
a multiple of $5 ($5,000 in the case of the dollar amount in
paragraph (1)(B)), such increase shall be rounded to the
nearest multiple thereof.''.
(b) Effective Date.--The amendment made by this section shall apply
to calendar years after 2000.
SEC. 162. MODIFICATIONS TO EXPENSING OF ENVIRONMENTAL REMEDIATION
COSTS.
(a) Expensing Not Limited to Sites in Targeted Areas.--Subsection
(c) of section 198 is amended to read as follows:
``(c) Qualified Contaminated Site.--For purposes of this section--
``(1) In general.--The term `qualified contaminated site'
means any area--
``(A) which is held by the taxpayer for use in a
trade or business or for the production of income, or
which is property described in section 1221(a)(1) in
the hands of the taxpayer, and
``(B) at or on which there has been a release (or
threat of release) or disposal of any hazardous
substance.
``(2) National priorities listed sites not included.--Such
term shall not include any site which is on, or proposed for,
the national priorities list under section 105(a)(8)(B) of the
Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as in effect on the date of the
enactment of this section).
``(3) Taxpayer must receive statement from state
environmental agency.--An area shall be treated as a qualified
contaminated site with respect to expenditures paid or incurred
during any taxable year only if the taxpayer receives a
statement from the appropriate agency of the State in which
such area is located that such area meets the requirement of
paragraph (1)(B).
``(4) Appropriate state agency.--For purposes of paragraph
(3), the chief executive officer of each State may, in
consultation with the Administrator of the Environmental
Protection Agency, designate the appropriate State
environmental agency within 60 days of the date of the
enactment of this section. If the chief executive officer of a
State has not designated an appropriate environmental agency
within such 60-day period, the appropriate environmental agency
for such State shall be designated by the Administrator of the
Environmental Protection Agency.''.
(b) Extension of Termination Date.--Subsection (h) of section 198
is amended by striking ``2001'' and inserting ``2003''.
(c) Effective Date.--The amendments made by this section shall
apply to expenditures paid or incurred after the date of the enactment
of this Act.
SEC. 163. EXTENSION OF DC HOMEBUYER TAX CREDIT.
Section 1400C(i) (relating to application of section) is amended by
striking ``2002'' and inserting ``2004''.
SEC. 164. EXTENSION OF DC ZONE THROUGH 2003.
(a) In General.--The following provisions are amended by striking
``2002'' each place it appears and inserting ``2003'':
(1) Section 1400(f).
(2) Section 1400A(b).
(b) Zero Capital Gains Rate.--Section 1400B (relating to zero
percent capital gains rate) is amended--
(1) by striking ``2003'' each place it appears and
inserting ``2004'', and
(2) by striking ``2007'' each place it appears and
inserting ``2008''.
SEC. 165. EXTENSION OF ENHANCED DEDUCTION FOR CORPORATE DONATIONS OF
COMPUTER TECHNOLOGY.
(a) Expansion of Computer Technology Donations to Public
Libraries.--
(1) In general.--Paragraph (6) of section 170(e) (relating
to special rule for contributions of computer technology and
equipment for elementary or secondary school purposes) is
amended by striking ``qualified elementary or secondary
educational contribution'' each place it occurs in the headings
and text and inserting ``qualified computer contribution''.
(2) Expansion of eligible donees.--Clause (i) of section
170(e)(6)(B) (relating to qualified elementary or secondary
educational contribution) is amended by striking ``or'' at the
end of subclause (I), by adding ``or'' at the end of subclause
(II), and by inserting after subclause (II) the following new
subclause:
``(III) a public library (within
the meaning of section 213(2)(A) of the
Library Services and Technology Act (20
U.S.C. 9122(2)(A)), as in effect on the
date of the enactment of the Community
Renewal Tax Relief Act of 2000,
established and maintained by an entity
described in subsection (c)(1),''.
(3) Extension of donation period.--Clause (ii) of section
170(e)(6)(B) is amended by striking ``2 years'' and inserting
``3 years''.
(b) Conforming Amendments.--
(1) Section 170(e)(6)(B)(iv) is amended by striking ``in
any grades of the K-12''.
(2) The heading of paragraph (6) of section 170(e) is
amended by striking ``elementary or secondary school purposes''
and inserting ``educational purposes''.
(c) Extension of Deduction.--Section 170(e)(6)(F) (relating to
termination) is amended by striking ``December 31, 2000'' and inserting
``December 31, 2003''.
(d) Standards as to Functionality and Suitability.--Subparagraph
(B) of section 170(e)(6) is amended by striking ``and'' at the end of
clause (vi), by striking the period at the end of clause (vii) and
inserting ``, and'', and by adding at the end the following new clause:
``(viii) the property meets such standards,
if any, as the Secretary may prescribe by
regulation to assure that the property meets
minimum functionality and suitability standards
for educational purposes.''.
(e) Donations of Computers Reacquired by Manufacturer.--Paragraph
(6) of section 170(e) is further amended by redesignating subparagraphs
(D), (E), and (F) as subparagraphs (E), (F), and (G), respectively, and
by inserting after subparagraph (C) the following new subparagraph:
``(D) Donations of property reacquired by
manufacturer.--In the case of property which is
reacquired by the person who constructed the property--
``(i) subparagraph (B)(ii) shall be applied
to a contribution of such property by such
person by taking into account the date that the
original construction of the property was
substantially completed, and
``(ii) subparagraph (B)(iii) shall not
apply to such contribution.''.
(f) Effective Date.--The amendments made by this section shall
apply to contributions made after December 31, 2000.
SEC. 166. TREATMENT OF INDIAN TRIBAL GOVERNMENTS UNDER FEDERAL
UNEMPLOYMENT TAX ACT.
(a) In General.--Section 3306(c)(7) (defining employment) is
amended--
(1) by inserting ``or in the employ of an Indian tribe,''
after ``service performed in the employ of a State, or any
political subdivision thereof,''; and
(2) by inserting ``or Indian tribes'' after ``wholly owned
by one or more States or political subdivisions''.
(b) Payments in Lieu of Contributions.--Section 3309 (relating to
State law coverage of services performed for nonprofit organizations or
governmental entities) is amended--
(1) in subsection (a)(2) by inserting ``, including an
Indian tribe,'' after ``the State law shall provide that a
governmental entity'';
(2) in subsection (b)(3)(B) by inserting ``, or of an
Indian tribe'' after ``of a State or political subdivision
thereof'';
(3) in subsection (b)(3)(E) by inserting ``or tribal''
after ``the State''; and
(4) in subsection (b)(5) by inserting ``or of an Indian
tribe'' after ``an agency of a State or political subdivision
thereof''.
(c) State Law Coverage.--Section 3309 (relating to State law
coverage of services performed for nonprofit organizations or
governmental entities) is amended by adding at the end the following
new subsection:
``(d) Election by Indian Tribe.--The State law shall provide that
an Indian tribe may make contributions for employment as if the
employment is within the meaning of section 3306 or make payments in
lieu of contributions under this section, and shall provide that an
Indian tribe may make separate elections for itself and each
subdivision, subsidiary, or business enterprise wholly owned by such
Indian tribe. State law may require a tribe to post a payment bond or
take other reasonable measures to assure the making of payments in lieu
of contributions under this section. Notwithstanding the requirements
of section 3306(a)(6), if, within 90 days of having received a notice
of delinquency, a tribe fails to make contributions, payments in lieu
of contributions, or payment of penalties or interest (at amounts or
rates comparable to those applied to all other employers covered under
the State law) assessed with respect to such failure, or if the tribe
fails to post a required payment bond, then service for the tribe shall
not be excepted from employment under section 3306(c)(7) until any such
failure is corrected. This subsection shall apply to an Indian tribe
within the meaning of section 4(e) of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b(e)).''.
(d) Definitions.--Section 3306 (relating to definitions) is amended
by adding at the end the following new subsection:
``(u) Indian Tribe.--For purposes of this chapter, the term `Indian
tribe' has the meaning given to such term by section 4(e) of the Indian
Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)),
and includes any subdivision, subsidiary, or business enterprise wholly
owned by such an Indian tribe.''.
(e) Effective Date; Transition Rule.--
(1) Effective date.--The amendments made by this section
shall apply to service performed on or after the date of the
enactment of this Act.
(2) Transition rule.--For purposes of the Federal
Unemployment Tax Act, service performed in the employ of an
Indian tribe (as defined in section 3306(u) of the Internal
Revenue Code of 1986 (as added by this section)) shall not be
treated as employment (within the meaning of section 3306 of
such Code) if--
(A) it is service which is performed before the
date of the enactment of this Act and with respect to
which the tax imposed under the Federal Unemployment
Tax Act has not been paid, and
(B) such Indian tribe reimburses a State
unemployment fund for unemployment benefits paid for
service attributable to such tribe for such period.
TITLE II--TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS
ACCOUNTS
SEC. 201. TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS
ACCOUNTS.
(a) In General.--Paragraphs (2) and (3)(B) of section 220(i)
(defining cut-off year) are each amended by striking ``2000'' each
place it appears and inserting ``2002''.
(b) Conforming Amendments.--
(1) Paragraph (2) of section 220(j) is amended--
(A) by striking ``1998 or 1999'' each place it
appears and inserting ``1998, 1999, or 2001'',
(B) by striking ``600,000 (750,000 in the case of
1999)'' and inserting ``750,000 (600,000 in the case of
1998)'', and
(C) by inserting after subparagraph (B) the
following new subparagraph:
``(C) No limitation for 2000.--The numerical
limitation shall not apply for 2000.''.
(2) Subparagraph (A) of section 220(j)(4) is amended by
striking ``and 1999'' and inserting ``1999, and 2001''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 202. MEDICAL SAVINGS ACCOUNTS RENAMED AS ARCHER MSAS.
(a) In General.--The following provisions are amended by striking
``medical savings account'' each place it appears in the text and
inserting ``Archer MSA'':
(1) Section 26(b)(2)(Q).
(2) Section 106(b).
(3) Section 138(b).
(4) Section 220.
(5) Section 848(e)(1)(B)(iv).
(6) Subsections (a)(2) and (d) of section 4973.
(7) Subsections (c)(4) and (e)(1)(D) of section 4975.
(8) Subsections (a) and (d)(2)(B) of section 4980E.
(9) Section 6051(a)(11).
(b) Other Amendments.--
(1) Paragraph (16) of section 62(a) is amended to read as
follows:
``(16) Archer msas.--The deduction allowed by section
220.''.
(2) The following provisions are each amended by striking
``medical savings accounts'' each place it appears in the text
and inserting ``Archer MSAs'':
(A) Paragraphs (4) and (7) of section 106(b).
(B) Subsections (c)(1)(D), (e)(2), (f)(3)(A),
(i)(4)(B), and (j) of section 220.
(C) Section 4973(d).
(D) Subsections (b) and (d)(1) of section 4980E.
(E) Section 6693(a)(2)(B).
(3) Paragraph (1) of section 220(d) is amended by inserting
``as a medical savings account'' after ``United States''.
(4) The heading for section 220(d) is amended by striking
``Medical Savings Account'' and inserting ``Archer MSA''.
(5) The headings for sections 220(d)(1) and 3231(e)(10) are
each amended by striking ``Medical savings account'' and
inserting ``Archer msa''.
(6) The headings for sections 106(b), 138(f), 220(i), and
4973(d) are each amended by striking ``Medical Savings
Accounts'' and inserting ``Archer MSAs''.
(7) The headings for section 220(c)(1)(C) and 4975(c)(4)
are each amended by striking ``medical savings accounts'' and
inserting ``archer msas''.
(8) The section heading for section 220 is amended to read
as follows:
``SEC. 220. ARCHER MSAS.''.
(9) The item relating to section 220 in the table of
sections for part VII of subchapter B of chapter 1 is amended
to read as follows:
``Sec. 220. Archer MSAs.''.
(10) The provisions amended by the preceding provisions of
this section are further amended by striking ``a Archer'' each
place it appears and inserting ``an Archer''.
(11) Section 220(e)(1) is further amended by striking ``A
Archer'' and inserting ``An Archer''.
TITLE III--ADMINISTRATIVE AND TECHNICAL PROVISIONS
Subtitle A--Administrative Provisions
SEC. 301. EXEMPTION OF CERTAIN REPORTING REQUIREMENTS.
Section 3003(a)(1) of the Federal Reports Elimination and Sunset
Act of 1995 (31 U.S.C. 1113 note) shall not apply to any report
required to be submitted under any of the following provisions of law:
(1) Section 13031(f) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(f)).
(2) Section 16(c) of the Foreign Trade Zones Act (19 U.S.C.
81p(c)).
(3) The following provisions of the Tariff Act of 1930:
(A) Section 330(c)(1) (19 U.S.C. 1330(c)(1)).
(B) Section 607(c) (19 U.S.C. 1607(c)).
(4) Section 5 of the International Coffee Agreement Act of
1980 (19 U.S.C. 1356n).
(5) Section 351(a)(2) of the Trade Expansion Act of 1962
(19 U.S.C. 1981(a)(2)).
(6) Section 502 of the Automotive Products Trade Act of
1965 (19 U.S.C. 2032).
(7) Section 3131 of the Customs Enforcement Act of 1986 (19
U.S.C. 2081).
(8) The following provisions of the Trade Act of 1974 (19
U.S.C. 2101 et seq.):
(A) Section 102(b)(4)(A)(ii)(I) (19 U.S.C.
2112(b)(4)(A)(ii)(I)).
(B) Section 102(e)(1) (19 U.S.C. 2112(e)(1)).
(C) Section 102(e)(2) (19 U.S.C. 2112(e)(2)).
(D) Section 104(d) (19 U.S.C. 2114(d)).
(E) Section 125(e) (19 U.S.C. 2135(e)).
(F) Section 135(e)(1) (19 U.S.C. 2155(e)(1)).
(G) Section 141(c) (19 U.S.C. 2171(c)).
(H) Section 162 (19 U.S.C. 2212).
(I) Section 163(b) (19 U.S.C. 2213(b)).
(J) Section 163(c) (19 U.S.C. 2213(c)).
(K) Section 203(b) (19 U.S.C. 2253(b)).
(L) Section 302(b)(2)(C) (19 U.S.C. 2412(b)(2)(C)).
(M) Section 303 (19 U.S.C. 2413).
(N) Section 309 (19 U.S.C. 2419).
(O) Section 407(a) (19 U.S.C. 2437(a)).
(P) Section 502(f) (19 U.S.C. 2462(f)).
(Q) Section 504 (19 U.S.C. 2464).
(9) The following provisions of the Trade Agreements Act of
1979 (19 U.S.C. 2501 et seq.):
(A) Section 2(b) (19 U.S.C. 2503(b)).
(B) Section 3(c) (19 U.S.C. 2504(c)).
(C) Section 305(c) (19 U.S.C. 2515(c)).
(10) Section 303(g)(1) of the Convention on Cultural
Property Implementation Act (19 U.S.C. 2602(g)(1)).
(11) The following provisions of the Caribbean Basin
Economic Recovery Act (19 U.S.C. 2701 et seq.):
(A) Section 212(a)(1)(A) (19 U.S.C. 2702(a)(1)(A)).
(B) Section 212(a)(2) (19 U.S.C. 2702(a)(2)).
(12) The following provisions of the Omnibus Trade and
Competitiveness Act of 1988 (19 U.S.C. 2901 et seq.):
(A) Section 1102 (19 U.S.C. 2902).
(B) Section 1103 (19 U.S.C. 2903).
(C) Section 1206(b) (19 U.S.C. 3006(b)).
(13) Section 123(a) of the Customs and Trade Act of 1990
(Public Law 101-382) (19 U.S.C. 2083).
(14) Section 243(b)(2) of the Caribbean Basin Economic
Recovery Expansion Act of 1990 (Public Law 101-382).
(15) The following provisions of the Internal Revenue Code
of 1986:
(A) Section 6103(p)(5).
(B) Section 7608.
(C) Section 7802(f)(3).
(D) Section 8022(3).
(E) Section 9602(a).
(16) The following provisions relating to the revenue laws
of the United States:
(A) Section 1552(c) of the Tax Reform Act of 1986
(100 Stat. 2753).
(B) Section 231 of the Deficit Reduction Act of
1984 (26 U.S.C. 801 note).
(C) Section 208 of the Tax Treatment Extension Act
of 1977 (26 U.S.C. 911 note).
(D) Section 7105 of the Technical and Miscellaneous
Revenue Act of 1988 (45 U.S.C. 369).
(17) Section 4008 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1308).
(18) Section 426 of the Black Lung Benefits Act (30 U.S.C.
936(b)).
(19) Section 7502(g) of title 31, United States Code.
(20) The following provisions of the Social Security Act:
(A) Section 215(i)(2)(C)(i) (42 U.S.C.
415(i)(2)(C)(i)).
(B) Section 221(i)(2) (42 U.S.C. 421(i)(2)).
(C) Section 221(i)(3) (42 U.S.C. 421(i)(3)).
(D) Section 233(e)(1) (42 U.S.C. 433(e)(1)).
(E) Section 452(a)(10) (42 U.S.C. 652(a)(10)).
(F) Section 452(g)(3)(B) (42 U.S.C. 652(g)(3)(B)).
(G) Section 506(a)(1) (42 U.S.C. 706(a)).
(H) Section 908 (42 U.S.C. 1108).
(I) Section 1114(f) (42 U.S.C. 1314(f)).
(J) Section 1120 (42 U.S.C. 1320).
(K) Section 1161 (42 U.S.C. 1320c-10).
(L) Section 1875(b) (42 U.S.C. 1395ll(b)).
(M) Section 1881 (42 U.S.C. 1395rr).
(N) Section 1882 (42 U.S.C. 1395ss(f)(2)).
(21) Section 104(b) of the Social Security Independence and
Program Improvements Act of 1994 (42 USC 904 note).
(22) Section 10 of the Railroad Retirement Act of 1937 (45
U.S.C. 231f).
(23) The following provisions of the Railroad Retirement
Act of 1974:
(A) Section 22(a)(1) (45 U.S.C. 231u(a)(1)).
(B) Section 22(b)(1) (45 U.S.C. 231u(b)(1)).
(24) Section 502 of the Railroad Retirement Solvency Act of
1983 (45 U.S.C. 231f-1).
(25) Section 47121(c) of title 49, United States Code.
(26) The following provisions of the Omnibus Budget
Reconciliation Act of 1987 (Public Law 100-203; 101 Stat. 1330-
182):
(A) Section 4007(c)(4) (42 U.S.C. 1395ww note).
(B) Section 4079 (42 U.S.C. 1395mm note).
(C) Section 4205 (42 U.S.C. 1395i-3 note).
(D) Section 4215 (42 U.S.C. 1396r note).
(27) The following provisions of the Inspector General Act
of 1978 (Public Law 95-452):
(A) Section 5(b).
(B) Section 5(d).
(28) The following provisions of the Public Health Service
Act:
(A) In section 308(a) (42 U.S.C. 242m(a)),
subparagraphs (A), (B), (C), and (D) of paragraph (1).
(B) Section 403 (42 U.S.C. 283).
(29) Section 404 of the Health Services and Centers
Amendments of 1978 (42 U.S.C. 242p) (Public Law 95-626).
(30) The following provisions of the Older Americans Act of
1965:
(A) Section 206(d) (42 U.S.C. 3017(d)).
(B) Section 207 (42 U.S.C. 3018).
(31) Section 308 of the Age Discrimination Act of 1975 (42
U.S.C. 6106a(b)).
(32) Section 509(c)(3) of the Americans with Disabilities
Act 0f 1990 (42 U.S.C. 12209(c)(3)).
(33) Section 4207(f) of the Omnibus Budget Reconciliation
Act of 1990 (42 U.S.C. 1395b-1 note).
SEC. 302. EXTENSION OF DEADLINES FOR IRS COMPLIANCE WITH CERTAIN NOTICE
REQUIREMENTS.
(a) Annual Installment Agreement Notice.--Section 3506 of the
Internal Revenue Service Restructuring and Reform Act of 1998 is
amended by striking ``July 1, 2000'' and inserting ``September 1,
2001''.
(b) Notice Requirements Relating to Computation of Penalty.--
Subsection (c) of section 3306 of the Internal Revenue Service
Restructuring and Reform Act of 1998 is amended--
(1) by striking ``December 31, 2000'' and inserting ``June
30, 2001'', and
(2) by adding at the end the following: ``In the case of
any notice of penalty issued after June 30, 2001, and before
July 1, 2003, the requirements of section 6751(a) of the
Internal Revenue Code of 1986 shall be treated as met if such
notice contains a telephone number at which the taxpayer can
request a copy of the taxpayer's assessment and payment history
with respect to such penalty.''.
(c) Notice Requirements Relating to Interest Imposed.--Subsection
(c) of section 3308 of the Internal Revenue Service Restructuring and
Reform Act of 1998 is amended--
(1) by striking ``December 31, 2000'' and inserting ``June
30, 2001'', and
(2) by adding at the end the following: ``In the case of
any notice issued after June 30, 2001, and before July 1, 2003,
to which section 6631 of the Internal Revenue Code of 1986
applies, the requirements of section 6631 of such Code shall be
treated as met if such notice contains a telephone number at
which the taxpayer can request a copy of the taxpayer's payment
history relating to interest amounts included in such
notice.''.
SEC. 303. EXTENSION OF AUTHORITY FOR UNDERCOVER OPERATIONS.
Paragraph (6), and the last sentence, of section 7608(c) are each
amended by striking ``January 1, 2001'' and inserting ``January 1,
2006''.
SEC. 304. CONFIDENTIALITY OF CERTAIN DOCUMENTS RELATING TO CLOSING AND
SIMILAR AGREEMENTS AND TO AGREEMENTS WITH FOREIGN
GOVERNMENTS.
(a) Closing and Similar Agreements Treated As Return Information.--
Paragraph (2) of section 6103(b) (defining return information) is
amended by striking ``and'' at the end of subparagraph (B), by
inserting ``and'' at the end of subparagraph (C), and by inserting
after subparagraph (C) the following new subparagraph:
``(D) any agreement under section 7121, and any
similar agreement, and any background information
related to such an agreement or request for such an
agreement,''.
(b) Agreements With Foreign Governments.--
(1) In general.--Subchapter B of chapter 61 (relating to
miscellaneous provisions) is amended by inserting after section
6104 the following new section:
``SEC. 6105. CONFIDENTIALITY OF INFORMATION ARISING UNDER TREATY
OBLIGATIONS.
``(a) In General.--Tax convention information shall not be
disclosed.
``(b) Exceptions.--Subsection (a) shall not apply--
``(1) to the disclosure of tax convention information to
persons or authorities (including courts and administrative
bodies) which are entitled to such disclosure pursuant to a tax
convention,
``(2) to any generally applicable procedural rules
regarding applications for relief under a tax convention, or
``(3) in any case not described in paragraphs (1) or (2),
to the disclosure of any tax convention information not
relating to a particular taxpayer if the Secretary determines,
after consultation with each other party to the tax convention,
that such disclosure would not impair tax administration.
``(c) Definitions.--For purposes of this section--
``(1) Tax convention information.--The term `tax convention
information' means any--
``(A) agreement entered into with the competent
authority of one or more foreign governments pursuant
to a tax convention,
``(B) application for relief under a tax
convention,
``(C) any background information related to such
agreement or application,
``(D) document implementing such agreement, and
``(E) any other information exchanged pursuant to a
tax convention which is treated as confidential or
secret under the tax convention.
``(2) Tax convention.--The term `tax convention' means--
``(A) any income tax or gift and estate tax
convention, or
``(B) any other convention or bilateral agreement
(including multilateral conventions and agreements and
any agreement with a possession of the United States)
providing for the avoidance of double taxation, the
prevention of fiscal evasion, nondiscrimination with
respect to taxes, the exchange of tax relevant
information with the United States, or mutual
assistance in tax matters.
``(d) Cross References.--
``For penalties for the unauthorized
disclosure of tax convention information which is return or return
information, see sections 7213, 7213A, and 7431.''.
(2) Clerical amendment.--The table of sections for
subchapter B of chapter 61 is amended by inserting after the
item relating to section 6104 the following new item:
``Sec. 6105. Confidentiality of
information arising under
treaty obligations.''.
(c) Exception From Public Inspection as Written Determination.--
(1) Closing and similar agreements.--Paragraph (1) of
section 6110(b) is amended to read as follows:
``(1) Written determination.--
``(A) In general.--The term `written determination'
means a ruling, determination letter, technical advice
memorandum, or Chief Counsel advice.
``(B) Exceptions.--Such term shall not include any
matter referred to in subparagraph (C) or (D) of
section 6103(b)(2).''.
(2) Agreements with foreign governments.--Paragraph (1) of
section 6110(l) is amended by inserting ``or 6105'' after
``6104''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 305. INCREASE IN THRESHOLD FOR JOINT COMMITTEE REPORTS ON REFUNDS
AND CREDITS.
(a) General Rule.--Subsections (a) and (b) of section 6405 are each
amended by striking ``$1,000,000'' and inserting ``$2,000,000''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act, except that such
amendment shall not apply with respect to any refund or credit with
respect to a report that has been made before such date of the
enactment under section 6405 of the Internal Revenue Code of 1986.
SEC. 306. TREATMENT OF MISSING CHILDREN WITH RESPECT TO CERTAIN TAX
BENEFITS.
(a) In General.--Subsection (c) of section 151 (relating to
additional exemption for dependents) is amended by adding at the end
the following new paragraph:
``(6) Treatment of missing children.--
``(A) In general.--Solely for the purposes referred
to in subparagraph (B), a child of the taxpayer--
``(i) who is presumed by law enforcement
authorities to have been kidnapped by someone
who is not a member of the family of such child
or the taxpayer, and
``(ii) who was (without regard to this
paragraph) the dependent of the taxpayer for
the portion of the taxable year before the date
of the kidnapping,
shall be treated as a dependent of the taxpayer for all
taxable years ending during the period that the child
is kidnapped.
``(B) Purposes.--Subparagraph (A) shall apply
solely for purposes of determining--
``(i) the deduction under this section,
``(ii) the credit under section 24
(relating to child tax credit), and
``(iii) whether an individual is a
surviving spouse or a head of a household (such
terms are defined in section 2).
``(C) Comparable treatment for earned income
credit.--For purposes of section 32, an individual--
``(i) who is presumed by law enforcement
authorities to have been kidnapped by someone
who is not a member of the family of such
individual or the taxpayer, and
``(ii) who had, for the taxable year in
which the kidnapping occurred, the same
principal place of abode as the taxpayer for
more than one-half of the portion of such year
before the date of the kidnapping,
shall be treated as meeting the requirement of section
32(c)(3)(A)(ii) with respect to a taxpayer for all
taxable years ending during the period that the
individual is kidnapped.
``(D) Termination of treatment.--Subparagraphs (A)
and (C) shall cease to apply as of the first taxable
year of the taxpayer beginning after the calendar year
in which there is a determination that the child is
dead (or, if earlier, in which the child would have
attained age 18).''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.
SEC. 307. AMENDMENTS TO STATUTES REFERENCING YIELD ON 52-WEEK TREASURY
BILLS.
(a) Amendment to the Act of February 26, 1931.--Section 6 of the
Act of February 26, 1931 (40 U.S.C. 258e-1) (relating to the interest
rate on compensation owed for takings of property) is amended--
(1) in paragraph (1), by striking ``the coupon issue yield
equivalent (as determined by the Secretary of the Treasury) of
the average accepted auction price for the last auction of 52
week United States Treasury bills settled immediately before''
and inserting ``the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding''; and
(2) in paragraph (2), by striking ``the coupon issue yield
equivalent (as determined by the Secretary of the Treasury) of
the average accepted auction price for the last auction of 52
week United States Treasury bills settled immediately before''
and inserting ``the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding''.
(b) Amendment to Title 18, United States Code.--Section
3612(f)(2)(B) of title 18, United States Code (relating to the interest
rate on unpaid criminal fines and penalties of more than $2,500) is
amended by striking ``the coupon issue yield equivalent (as determined
by the Secretary of the Treasury) of the average accepted auction price
for the last auction of fifty-two week United States Treasury bills
settled before'' and inserting `the weekly average 1-year constant
maturity Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding.''.
(c) Amendment to the Internal Revenue Code.--Section 995(f)(4)
(relating to the interest rate on tax-deferred liability of
shareholders of domestic international sales corporations) is amended
by striking ``the average investment yield of United States Treasury
bills with maturities of 52 weeks which were auctioned during the 1-
year period'' and inserting ``the average of the 1-year constant
maturity Treasury yields, as published by the Board of Governors of the
Federal Reserve System, for the 1-year period''.
(d) Amendments to Title 28, United States Code.--
(1) Amendment to section 1961.--Section 1961(a) of title
28, United States Code (relating to the interest rate on money
judgments in civil cases recovered in Federal district court)
is amended by striking ``the coupon issue yield equivalent (as
determined by the Secretary of the Treasury) of the average
accepted auction price for the last auction of fifty-two week
United States Treasury bills settled immediately prior to'' and
inserting ``the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding.''.
(2) Amendment to section 2516.--Section 2516(b) of title
28, United States Code (relating to the interest rate on a
judgment against the United States affirmed by the Supreme
Court after review on petition of the United States) is amended
by striking ``the coupon issue yield equivalent (as determined
by the Secretary of the Treasury) of the average accepted
auction price for the last auction of fifty-two week United
States Treasury bills settled immediately before'' and
inserting ``the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the
Federal Reserve System, for the calendar week preceding''.
SEC. 308. ADJUSTMENTS FOR CONSUMER PRICE INDEX ERROR.
(a) Determinations by OMB.--As soon as practicable after the date
of the enactment of this Act, the Director of the Office of Management
and Budget shall determine with respect to each applicable Federal
benefit program whether the CPI computation error for 1999 has or will
result in a shortfall in payments to beneficiaries under such program
(as compared to payments that would have been made if the error had not
occurred). As soon as practicable after the date of the enactment of
this Act, but not later than 60 days after such date, the Director
shall direct the head of the Federal agency which administers such
program to make a payment or payments that, insofar as the Director
finds practicable and feasible--
(1) are targeted to the amount of the shortfall experienced
by individual beneficiaries, and
(2) compensate for the shortfall.
(b) Coordination with Federal Agencies.--As soon as practicable
after the date of the enactment of this Act, each Federal agency that
administers an applicable Federal benefit program shall, in accordance
with such guidelines as are issued by the Director pursuant to this
section, make an initial determination of whether, and the extent to
which, the CPI computation error for 1999 has or will result in a
shortfall in payments to beneficiaries of an applicable Federal benefit
program administered by such agency. Not later than 30 days after such
date, the head of such agency shall submit a report to the Director and
to each House of the Congress of such determination, together with a
complete description of the nature of the shortfall.
(c) Implementation Pursuant to Agency Reports.--Upon receipt of the
report submitted by a Federal agency pursuant to subsection (b), the
Director shall review the initial determination of the agency, the
agency's description of the nature of the shortfall, and the
compensation payments proposed by the agency. Prior to directing
payment of such payments pursuant to subsection (a), the Director shall
make appropriate adjustments (if any) in the compensation payments
proposed by the agency that the Director determines are necessary to
comply with the requirements of subsection (a) and transmit to the
agency a summary report of the review, indicating any adjustments made
by the Director. The agency shall make the compensation payments as
directed by the Director pursuant to subsection (a) in accordance with
the Director's summary report.
(d) Income Disregard Under Federal Means-Tested Benefit Programs.--
A payment made under this section to compensate for a shortfall in
benefits shall, in accordance with guidelines issued by the Director
pursuant to this section, be disregarded in determining income under
title VIII of the Social Security Act or any applicable Federal benefit
program that is means-tested.
(e) Funding.--Funds otherwise available under each applicable
Federal benefit program for making benefit payments under such program
are hereby made available for making compensation payments under this
section in connection with such program.
(f) No Judicial Review.--No action taken pursuant to this section
shall be subject to judicial review.
(g) Director's Report.--Not later than April 1, 2001, the Director
shall submit to each House of the Congress a report on the activities
performed by the Director pursuant to this section.
(h) Definitions.--For purposes of this section:
(1) Applicable federal benefit program.--The term
``applicable Federal benefit program'' means any program of the
Government of the United States providing for regular or
periodic payments or cash assistance paid directly to
individual beneficiaries, as determined by the Director of the
Office of Management and Budget.
(2) Federal agency.--The term ``Federal agency'' means a
department, agency, or instrumentality of the Government of the
United States.
(3) CPI computation error for 1999.--The term ``CPI
computation error for 1999'' means the error in the computation
of the Consumer Price Index announced by the Bureau of Labor
Statistics on September 28, 2000.
(i) Tax Provisions.--In the case of taxable years (and other
periods) beginning after December 31, 2000, if any Consumer Price Index
(as defined in section 1(f)(5) of the Internal Revenue Code of 1986)
reflects the CPI computation error for 1999--
(1) the correct amount of such Index shall (in such manner
and to such extent as the Secretary of the Treasury determines
to be appropriate) be taken into account for purposes of such
Code, and
(2) tables prescribed under section 1(f) of such Code to
reflect such correct amount shall apply in lieu of any tables
that were prescribed based on the erroneous amount.
SEC. 309. PREVENTION OF DUPLICATION OF LOSS THROUGH ASSUMPTION OF
LIABILITIES GIVING RISE TO A DEDUCTION.
(a) In General.--Section 358 (relating to basis to distributees) is
amended by adding at the end the following new subsection:
``(h) Special Rules for Assumption of Liabilities To Which
Subsection (d) Does Not Apply.--
``(1) In general.--If, after application of the other
provisions of this section to an exchange or series of
exchanges, the basis of property to which subsection (a)(1)
applies exceeds the fair market value of such property, then
such basis shall be reduced (but not below such fair market
value) by the amount (determined as of the date of the
exchange) of any liability--
``(A) which is assumed in exchange for such
property, and
``(B) with respect to which subsection (d)(1) does
not apply to the assumption.
``(2) Exceptions.--Except as provided by the Secretary,
paragraph (1) shall not apply to any liability if--
``(A) the trade or business with which the
liability is associated is transferred to the person
assuming the liability as part of the exchange, or
``(B) substantially all of the assets with which
the liability is associated are transferred to the
person assuming the liability as part of the exchange.
``(3) Liability.--For purposes of this subsection, the term
`liability' shall include any fixed or contingent obligation to
make payment, without regard to whether the obligation is
otherwise taken into account for purposes of this title.''.
(b) Determination of Amount of Liability Assumed.--Section
357(d)(1) is amended by inserting ``section 358(h),'' after ``section
358(d),''.
(c) Application of Comparable Rules to Partnerships and S
Corporations.--The Secretary of the Treasury or his delegate--
(1) shall prescribe rules which provide appropriate
adjustments under subchapter K of chapter 1 of the Internal
Revenue Code of 1986 to prevent the acceleration or duplication
of losses through the assumption of (or transfer of assets
subject to) liabilities described in section 358(h)(3) of such
Code (as added by subsection (a)) in transactions involving
partnerships, and
(2) may prescribe rules which provide appropriate
adjustments under subchapter S of chapter 1 of such Code in
transactions described in paragraph (1) involving S
corporations rather than partnerships.
(d) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to assumptions of liability after October 18, 1999.
(2) Rules.--The rules prescribed under subsection (c) shall
apply to assumptions of liability after October 18, 1999, or
such later date as may be prescribed in such rules.
SEC. 310. DISCLOSURE OF CERTAIN INFORMATION TO CONGRESSIONAL BUDGET
OFFICE.
(a) Disclosure of Certain Tax Information.--
(1) In general.--Subsection (j) of section 6103 (relating
to statistical use) is amended by adding at the end the
following new paragraph:
``(6) Congressional budget office.--Upon written request by
the Director of the Congressional Budget Office, the Secretary
shall furnish to officers and employees of the Congressional
Budget Office return information for the purpose of, but only
to the extent necessary for, long-term models of the social
security and medicare programs.''.
(2) Recordkeeping safeguards.--Section 6103(p) is amended--
(A) in paragraph (4)--
(i) in the matter preceding subparagraph
(A), by inserting ``the Congressional Budget
Office,'' after ``General Accounting Office,'',
(ii) in subparagraph (E), by striking
``commission or the General Accounting Office''
and inserting ``commission, the General
Accounting Office, or the Congressional Budget
Office'',
(iii) in subparagraph (F)(ii), by striking
``or the General Accounting Office,'' and
inserting ``the General Accounting Office, or
the Congressional Budget Office,'', and
(iv) in the matter following subparagraph
(F), by inserting ``or the Congressional Budget
Office'' after ``General Accounting Office''
both places it appears,
(B) in paragraph (5), by striking ``commissions and
the General Accounting Office'' and inserting
``commissions, the General Accounting Office, and the
Congressional Budget Office'', and
(C) in paragraph (6)(A), by inserting ``and the
Congressional Budget Office'' after ``commissions''.
(b) Confidentiality of Records.--
(1) In general.--Section 203 of the Congressional Budget
Act of 1974 (2 U.S.C. 603) is amended by adding at the end the
following:
``(e) Level of Confidentiality.--With respect to information, data,
estimates, and statistics obtained under sections 201(d) and 201(e),
the Director shall maintain the same level of confidentiality as is
required by law of the department, agency, establishment, or regulatory
agency or commission from which it is obtained. Officers and employees
of the Congressional Budget Office shall be subject to the same
statutory penalties for unauthorized disclosure or use as officers or
employees of the department, agency, establishment, or regulatory
agency or commission from which it is obtained.''.
(2) Conforming amendment.--Subsection (a) of section 203 of
such Act is amended by striking ``subsections (c) and (d)'' and
inserting ``subsections (c), (d), and (e)''.
Subtitle B--Technical Corrections
SEC. 311. AMENDMENTS RELATED TO TICKET TO WORK AND WORK INCENTIVES
IMPROVEMENT ACT OF 1999.
(a) Amendments Related to Section 502 of the Act.--
(1) Section 280C(c)(1) is amended by striking ``or credit''
after ``deduction'' each place it appears.
(2) Section 30A is amended by redesignating subsections (f)
and (g) as subsections (g) and (h), respectively, and by
inserting after subsection (e) the following new subsection:
``(f) Denial of Double Benefit.--Any wages or other expenses taken
into account in determining the credit under this section may not be
taken into account in determining the credit under section 41.''.
(b) Amendment Related to Section 545 of the Act.--Clause (ii) of
section 857(b)(7)(B) is amended to read as follows:
``(ii) Exception for certain amounts.--
Clause (i) shall not apply to amounts received
directly or indirectly by a real estate
investment trust--
``(I) for services furnished or
rendered by a taxable REIT subsidiary
that are described in paragraph (1)(B)
of section 856(d), or
``(II) from a taxable REIT
subsidiary that are described in
paragraph (7)(C)(ii) of such
section.''.
(c) Clarification Related to Section 538 of the Act.--The reference
to section 332(b)(1) of the Internal Revenue Code of 1986 in Treasury
Regulation section 1.1502-34 shall be deemed to include a reference to
section 732(f) of such Code.
(d) Effective Date.--Subsection (c) and the amendments made by this
section shall take effect as if included in the provisions of the
Ticket to Work and Work Incentives Improvement Act of 1999 to which
they relate.
SEC. 312. AMENDMENTS RELATED TO TAX AND TRADE RELIEF EXTENSION ACT OF
1998.
(a) Amendment Related to Section 1004(b) of the Act.--Subsection
(d) of section 6104 is amended by adding at the end the following new
paragraph:
``(6) Application to nonexempt charitable trusts and
nonexempt private foundations.--The organizations referred to
in paragraphs (1) and (2) of section 6033(d) shall comply with
the requirements of this subsection relating to annual returns
filed under section 6033 in the same manner as the
organizations referred to in paragraph (1).''.
(b) Amendment Related to Section 4003 of the Act.--Subsection (b)
of section 4003 of the Tax and Trade Relief Extension Act of 1998 is
amended by inserting ``(7)(A)(i)(II),'' after ``(5)(A)(ii)(I),''.
(c) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Tax and Trade Relief
Extension Act of 1998 to which they relate.
SEC. 313. AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE RESTRUCTURING
AND REFORM ACT OF 1998.
(a) Amendments Related to Innocent Spouse Relief.--
(1) Election may be made any time after deficiency
asserted.--Subparagraph (B) of section 6015(c)(3) is amended by
striking ``shall be made'' and inserting ``may be made at any
time after a deficiency for such year is asserted but''.
(2) Clarification regarding disallowance of refunds and
credits under section 6015(c).--
(A) In general.--Section 6015 is amended by
redesignating subsection (g) as subsection (h) and by
inserting after subsection (f) the following new
subsection:
``(g) Credits and Refunds.--
``(1) In general.--Except as provided in paragraphs (2) and
(3), notwithstanding any other law or rule of law (other than
section 6511, 6512(b), 7121, or 7122), credit or refund shall
be allowed or made to the extent attributable to the
application of this section.
``(2) Res judicata.--In the case of any election under
subsection (b) or (c), if a decision of a court in any prior
proceeding for the same taxable year has become final, such
decision shall be conclusive except with respect to the
qualification of the individual for relief which was not an
issue in such proceeding. The exception contained in the
preceding sentence shall not apply if the court determines that
the individual participated meaningfully in such prior
proceeding.
``(3) Credit and refund not allowed under subsection (c).--
No credit or refund shall be allowed as a result of an election
under subsection (c).''.
(B) Conforming amendment.--Paragraph (3) of section
6015(e) is amended to read as follows:
``(3) Limitation on tax court jurisdiction.--If a suit for
refund is begun by either individual filing the joint return
pursuant to section 6532--
``(A) the Tax Court shall lose jurisdiction of the
individual's action under this section to whatever
extent jurisdiction is acquired by the district court
or the United States Court of Federal Claims over the
taxable years that are the subject of the suit for
refund, and
``(B) the court acquiring jurisdiction shall have
jurisdiction over the petition filed under this
subsection.''.
(3) Clarifications regarding review by tax court.--
(A) Paragraph (1) of section 6015(e) is amended in
the matter preceding subparagraph (A) by inserting
after ``individual'' the following: ``against whom a
deficiency has been asserted and''.
(B) Subparagraph (A) of section 6015(e)(1) is
amended to read as follows:
``(A) In general.--In addition to any other remedy
provided by law, the individual may petition the Tax
Court (and the Tax Court shall have jurisdiction) to
determine the appropriate relief available to the
individual under this section if such petition is
filed--
``(i) at any time after the earlier of--
``(I) the date the Secretary mails,
by certified or registered mail to the
taxpayer's last known address, notice
of the Secretary's final determination
of relief available to the individual,
or
``(II) the date which is 6 months
after the date such election is filed
with the Secretary, and
``(ii) not later than the close of the 90th
day after the date described in clause
(i)(I).''.
(C) Subparagraph (B)(i) of section 6015(e)(1) is
amended--
(i) by striking ``until the expiration of
the 90-day period described in subparagraph
(A)'' and inserting ``until the close of the
90th day referred to in subparagraph (A)(ii)'',
and
(ii) by inserting ``under subparagraph
(A)'' after ``filed with the Tax Court''.
(D)(i) Subsection (e) of section 6015 is amended by
adding at the end the following new paragraph:
``(5) Waiver.--An individual who elects the application of
subsection (b) or (c) (and who agrees with the Secretary's
determination of relief) may waive in writing at any time the
restrictions in paragraph (1)(B) with respect to collection of
the outstanding assessment (whether or not a notice of the
Secretary's final determination of relief has been mailed).''.
(ii) Paragraph (2) of section 6015(e) is amended to
read as follows:
``(2) Suspension of running of period of limitations.--The
running of the period of limitations in section 6502 on the
collection of the assessment to which the petition under
paragraph (1)(A) relates shall be suspended--
``(A) for the period during which the Secretary is
prohibited by paragraph (1)(B) from collecting by levy
or a proceeding in court and for 60 days thereafter,
and
``(B) if a waiver under paragraph (5) is made, from
the date the claim for relief was filed until 60 days
after the waiver is filed with the Secretary.''.
(b) Amendments Related to Procedure and Administration.--
(1) Disputes involving $50,000 or less.--Section 7463 is
amended by adding at the end the following new subsection:
``(f) Additional Cases in Which Proceedings May Be Conducted Under
This Section.--At the option of the taxpayer concurred in by the Tax
Court or a division thereof before the hearing of the case, proceedings
may be conducted under this section (in the same manner as a case
described in subsection (a)) in the case of--
``(1) a petition to the Tax Court under section 6015(e) in
which the amount of relief sought does not exceed $50,000, and
``(2) an appeal under section 6330(d)(1)(A) to the Tax
Court of a determination in which the unpaid tax does not
exceed $50,000.''.
(2) Authority to enjoin collection actions.--
(A) Section 6330(e)(1) is amended by adding at the
end the following: ``Notwithstanding the provisions of
section 7421(a), the beginning of a levy or proceeding
during the time the suspension under this paragraph is
in force may be enjoined by a proceeding in the proper
court, including the Tax Court. The Tax Court shall
have no jurisdiction under this paragraph to enjoin any
action or proceeding unless a timely appeal has been
filed under subsection (d)(1) and then only in respect
of the unpaid tax or proposed levy to which the
determination being appealed relates.''.
(B) Section 7421(a) is amended by inserting
``6330(e)(1),'' after ``6246(b),''.
(3) Clarification.--Paragraph (3) of section 6331(k) is
amended by striking ``(3), (4), and (5)'' and inserting ``(3)
and (4)''.
(c) Amendment Related to Section 1103 of the Act.--Paragraph (6) of
section 6103(k) is amended--
(1) by inserting ``and an officer or employee of the Office
of Treasury Inspector General for Tax Administration'' after
``internal revenue officer or employee'', and
(2) by striking ``internal revenue'' in the heading and
inserting ``certain''.
(d) Amendment Related to Section 3401 of the Act.--Section
6330(d)(1)(A) is amended by striking ``to hear'' and inserting ``with
respect to''.
(e) Amendment Related to Section 3509 of the Act.--Subparagraph (A)
of section 6110(g)(5) is amended by inserting ``, any Chief Counsel
advice,'' after ``technical advice memorandum''.
(f) Effective Dates.--The amendments made by subsections (a) and
(b) shall take effect on the date of the enactment of this Act. The
amendments made by subsections (c), (d), and (e) shall take effect as
if included in the provisions of the Internal Revenue Service
Restructuring and Reform Act of 1998 to which they relate.
SEC. 314. AMENDMENTS RELATED TO TAXPAYER RELIEF ACT OF 1997.
(a) Amendment Related to Section 101 of the Act.--Paragraph (4) of
section 6211(b) is amended by striking ``sections 32 and 34'' and
inserting ``sections 24(d), 32, and 34''.
(b) Amendment Related to Section 302 of the Act.--The last sentence
of section 3405(e)(1)(B) is amended by inserting ``(other than a Roth
IRA)'' after ``individual retirement plan''.
(c) Amendment to Section 311 of the Act.--Paragraph (3) of section
311(e) of the Taxpayer Relief Act of 1997 (relating to election to
recognize gain on assets held on January 1, 2001) is amended by adding
at the end the following new sentence: ``Such an election shall not
apply to any asset which is disposed of (in a transaction in which gain
or loss is recognized in whole or in part) before the close of the 1-
year period beginning on the date that the asset would have been
treated as sold under such election.''.
(d) Amendment Related to Section 402 of the Act.--The flush
sentence at the end of clause (ii) of section 56(a)(1)(A) is amended by
inserting before ``or to any other property'' the following: ``(and the
straight line method shall be used for such 1250 property)''.
(e) Amendments Related to Section 1072 of the Act.--
(1) Clause (ii) of section 415(c)(3)(D) and subparagraph
(B) of section 403(b)(3) are each amended by striking ``section
125 or'' and inserting ``section 125, 132(f)(4), or''.
(2) Paragraph (2) of section 414(s) is amended by striking
``section 125, 402(e)(3)'' and inserting ``section 125,
132(f)(4), 402(e)(3)''.
(f) Amendment Related to Section 1454 of the Act.--Subsection (a)
of section 7436 is amended by inserting before the period at the end of
the first sentence ``and the proper amount of employment tax under such
determination''.
(g) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Taxpayer Relief of 1997
to which they relate.
SEC. 315. AMENDMENTS RELATED TO BALANCED BUDGET ACT OF 1997.
(a) Amendments Related to Section 9302 of the Act.--
(1) Paragraph (1) of section 9302(j) of the Balanced Budget
Act of 1997 is amended by striking ``tobacco products and
cigarette papers and tubes'' and inserting ``cigarettes''.
(2)(A) Subsection (h) of section 5702 is amended to read as
follows:
``(h) Manufacturer of Cigarette Papers and Tubes.--`Manufacturer of
cigarette papers and tubes' means any person who manufactures cigarette
paper, or makes up cigarette paper into tubes, except for his own
personal use or consumption.''.
(B) Section 5702, as amended by subparagraph (A), is
amended by striking subsection (f) and by redesignating
subsections (g) through (p) as subsections (f) through (o),
respectively.
(3) Subsection (c) of section 5761 is amended by adding at
the end the following: ``This subsection and section 5754 shall
not apply to any person who relands or receives tobacco
products in the quantity allowed entry free of tax and duty
under chapter 98 of the Harmonized Tariff Schedule of the
United States, and such person may voluntarily relinquish to
the Secretary at the time of entry any excess of such quantity
without incurring the penalty under this subsection. No
quantity of tobacco products other than the quantity referred
to in the preceding sentence may be relanded or received as a
personal use quantity.''.
(b) Effective Date.--The amendments made by this section shall take
effect as if included in section 9302 of the Balanced Budget Act of
1997.
SEC. 316. AMENDMENTS RELATED TO SMALL BUSINESS JOB PROTECTION ACT OF
1996.
(a) Amendment Related to Section 1201 of the Act.--Subparagraph (B)
of section 51(d)(2) is amended--
(1) by striking ``plan approved'' and inserting ``program
funded'', and
(2) by striking ``(relating to assistance for needy
families with minor children)''.
(b) Amendment Related to Section 1302 of the Act.--Clause (i) of
section 1361(e)(1)(A) is amended by striking ``or'' before ``(III)''
and by adding at the end the following: ``or (IV) an organization
described in section 170(c)(1) which holds a contingent interest in
such trust and is not a potential current beneficiary,''.
(c) Amendment Related to Section 1401 of the Act.--Clause (ii) of
section 401(k)(10)(B) is amended by adding at the end the following new
sentence: ``Such term includes a distribution of an annuity contract
from--
``(I) a trust which forms a part of
a plan described in section 401(a) and
which is exempt from tax under section
501(a), or
``(II) an annuity plan described in
section 403(a).''.
(d) Amendment Related to Section 1427 of the Act.--Clause (ii) of
section 219(c)(1)(B) is amended by striking ``and'' at the end of
subclause (I), by redesignating subclause (II) as subclause (III), and
by inserting after subclause (I) the following new subclause:
``(II) the amount of any designated
nondeductible contribution (as defined
in section 408(o)) on behalf of such
spouse for such taxable year, and''.
(e) Effective Date.--The amendments made by this section shall take
effect as if included in the provisions of the Small Business Job
Protection Act of 1996 to which they relate.
SEC. 317. AMENDMENT RELATED TO REVENUE RECONCILIATION ACT OF 1990.
(a) Amendment Related to Section 11511 of the Act.--Subparagraph
(C) of section 43(c)(1) is amended--
(1) by inserting ``(as defined in section 193(b))'' after
``expenses'', and
(2) by striking ``under section 193''.
(b) Effective Date.--The amendment made by this section shall take
effect as if included in section 11511 of the Revenue Reconciliation
Act of 1990.
SEC. 318. OTHER TECHNICAL CORRECTIONS.
(a) Modified Endowment Contracts.--
(1) Paragraph (2) of section 7702A(a) is amended by
inserting ``or this paragraph'' before the period.
(2) Clause (ii) of section 7702A(c)(3)(A) is amended by
striking ``under the contract'' and inserting ``under the old
contract''.
(3) The amendments made by this subsection shall take
effect as if included in the amendments made by section 5012 of
the Technical and Miscellaneous Revenue Act of 1988.
(b) Affiliated Corporations in Context of Worthless Securities.--
(1) Subparagraph (A) of section 165(g)(3) is amended to
read as follows:
``(A) the taxpayer owns directly stock in such
corporation meeting the requirements of section
1504(a)(2), and''.
(2) Paragraph (3) of section 165(g) is amended by striking
the last sentence.
(3) The amendments made by this subsection shall apply to
taxable years beginning after December 31, 1984.
(c) Certain Annuities Issued by Tax-Exempt Organizations Not
Treated as Debt Instruments under Original Issue Discount Rules.--
(1) Clause (ii) of section 1275(a)(1)(B) is amended by
striking ``subchapter L'' and inserting ``subchapter L (or by
an entity described in section 501(c) and exempt from tax under
section 501(a) which would be subject to tax under subchapter L
were it not so exempt)''.
(2) The amendment made by this subsection shall take effect
as if included in the amendments made by section 41 of the Tax
Reform Act of 1984.
(d) Tentative Carryback Adjustments of Losses From Section 1256
Contracts.--
(1) Subsection (a) of section 6411 is amended by striking
``section 1212(a)(1)'' and inserting ``subsection (a)(1) or (c)
of section 1212''.
(2) The amendment made by paragraph (1) shall take effect
as if included in the amendments made by section 504 of the
Economic Recovery Tax Act of 1981.
(e) Correction of Calculation of Amounts to be Deposited in Highway
Trust Fund.--
(1) Subsection (b) of section 9503 is amended by striking
paragraph (5) and redesignating paragraph (6) as paragraph (5).
(2) The amendment made by paragraph (1) shall apply with
respect to taxes received in the Treasury after the date of the
enactment of this Act.
(f) Expenditures From Vaccine Injury Compensation Trust Fund.--
Section 9510(c)(1)(A) is amended by striking ``December 31, 1999'' and
inserting ``October 18, 2000''.
SEC. 319. CLERICAL CHANGES.
(1) Clause (i) of section 45(d)(7)(A) is amended by
striking ``paragraph (3)(A)'' and inserting ``subsection
(c)(3)(A)''.
(2) Subsection (f) of section 67 is amended by striking
``the last sentence'' and inserting ``the second sentence''.
(3) The heading for paragraph (5) of section 408(d) is
amended to read as follows:
``(5) Distributions of excess contributions after due date
for taxable year and certain excess rollover contributions.--
''.
(4) Paragraph (3) of section 475(g) is amended by striking
``267(b) of'' and inserting ``267(b) or''.
(5) The heading for subparagraph (B) of section 529(e)(3)
is amended by striking ``under guaranteed plans''.
(6) Clause (iii) of section 530(d)(4)(B) is amended by
striking ``; or'' at the end and inserting ``, or''.
(7) Paragraphs (1)(C) and (2)(C) of section 664(d) are each
amended by striking the period after ``subsection (g))''.
(8)(A) Subsection (e) of section 678 is amended by striking
``an electing small business corporation'' and inserting ``an S
corporation''.
(B) Clause (v) of section 6103(e)(1)(D) is amended to read
as follows:
``(v) if the corporation was an S
corporation, any person who was a shareholder
during any part of the period covered by such
return during which an election under section
1362(a) was in effect, or''.
(9) Paragraph (7) of section 856(c) is amended by striking
``paragraph (4)(B)(ii)(III)'' and inserting ``paragraph
(4)(B)(iii)(III)''
(10) Subparagraph (A) of section 856(l)(4) is amended by
striking ``paragraph (9)(D)(ii)'' and inserting ``subsection
(d)(9)(D)(ii)''.
(11) Subparagraph (B) of section 871(f)(2) is amended by
striking ``19 U.S.C.'' and inserting ``(19 U.S.C.''.
(12) Subparagraph (B) of section 995(b)(3) is amended by
striking ``the Military Security Act of 1954 (22 U.S.C. 1934)''
and inserting ``section 38 of the International Security
Assistance and Arms Export Control Act of 1976 (22 U.S.C.
2778)''.
(13) Section 1391(g)(3)(C) is amended by striking
``paragraph (1)(B)'' and inserting ``paragraph (1)''.
(14)(A) Paragraph (2) of section 2035(c) is amended by
striking ``paragraph (1)'' and inserting ``subsection (a)''.
(B) Subsection (d) of section 2035 is amended by inserting
``and paragraph (1) of subsection (c)'' after ``Subsection
(a)''.
(15) Paragraph (5) of section 3121(a) is amended by
striking the semicolon at the end of subparagraph (G) and
inserting a comma.
(16) Subparagraph (B) of section 4946(c)(3) is amended by
striking ``the lowest rate of compensation prescribed for GS-16
of the General Schedule under section 5332'' and inserting
``the lowest rate of basic pay for the Senior Executive Service
under section 5382''.
(17) Subsection (p) of section 6103 is amended--
(A) in paragraph (4), in the matter preceding
subparagraph (A)--
(i) by striking the second comma after
``(13)'', and
(ii) by striking ``(7)'' and all that
follows through ``shall, as a condition'' and
inserting ``(7), (8), (9), (12), (15), or (16)
or any other person described in subsection
(l)(16) shall, as a condition'', and
(B) in paragraph (4)(F)(ii), by striking the second
comma after ``(14)''.
(18) Paragraph (5) of section 6166(k) is amended by
striking ``2035(d)(4)'' and inserting ``2035(c)(2)''.
(19) Subsection (a) of section 6512 is amended by striking
``; and'' at the end of paragraphs (1), (2), and (5) and
inserting ``, and''.
(20) Paragraph (1) of section 6611(g) is amended by
striking the comma after ``(b)(3)''.
(21) Subparagraphs (A) and (B) of section 6655(e)(5) are
amended by striking ``subsections (d)(5) and (l)(3)(B)'' and
inserting ``subsection (d)(5)''.
(22) The subchapter heading for subchapter D of chapter 67
is amended by capitalizing the first letter of the second word.
(23)(A) Section 6724(d)(1)(B) is amended by striking
clauses (xiv) through (xvii) and inserting the following:
``(xiv) subparagraph (A) or (C) of
subsection (c)(4) of section 4093 (relating to
information reporting with respect to tax on
diesel and aviation fuels),
``(xv) section 4101(d) (relating to
information reporting with respect to fuels
taxes),
``(xvi) subparagraph (C) of section
338(h)(10) (relating to information required to
be furnished to the Secretary in case of
elective recognition of gain or loss), or
``(xvii) section 264(f)(5)(A)(iv) (relating
to reporting with respect to certain life
insurance and annuity contracts), and''.
(B) Section 6010(o)(4)(C) of the Internal Revenue Service
Restructuring and Reform Act of 1998 is amended by striking
``inserting `or', and by adding at the end'' and inserting
``inserting `, or', and by adding after subparagraph (Z)''.
(24) Subsection (a) of section 7421 is amended by striking
``6672(b)'' and inserting ``6672(c)''.
(25) Paragraph (3) of section 7430(c) is amended--
(A) in the paragraph heading, by striking
``Attorneys'' and inserting ``Attorneys''', and
(B) in subparagraph (B), by striking ``attorneys
fees'' each place it appears and inserting ``attorneys'
fees''.
(26) Paragraph (2) of section 7603(b) is amended by
striking the semicolon at the end of subparagraphs (A), (B),
(C), (D), (E), (F), and (G) and inserting a comma.
(27) Clause (ii) of section 7802(b)(2)(B) is amended by
striking ``; and'' at the end and inserting ``, and''.
(28) Paragraph (3) of section 7811(a) is amended by
striking ``taxpayer assistance order'' and inserting ``Taxpayer
Assistance Order''.
(29) Paragraph (1) of section 7811(d) is amended by
striking ``Ombudsman's'' and inserting ``National Taxpayer
Advocate's''.
(30) Paragraph (3) of section 7872(f) is amended by
striking ``foregoing'' and inserting ``forgoing''.
TITLE IV--TAX TREATMENT OF SECURITIES FUTURES CONTRACTS
SEC. 401. TAX TREATMENT OF SECURITIES FUTURES CONTRACTS.
(a) In General.--Subpart IV of subchapter P of chapter 1 (relating
to special rules for determining gains and losses) is amended by
inserting after section 1234A the following new section:
``SEC. 1234B. GAINS OR LOSSES FROM SECURITIES FUTURES CONTRACTS.
``(a) Treatment of Gain or Loss.--
``(1) In general.--Gain or loss attributable to the sale or
exchange of a securities futures contract shall be considered
gain or loss from the sale or exchange of property which has
the same character as the property to which the contract
relates has in the hands of the taxpayer (or would have in the
hands of the taxpayer if acquired by the taxpayer).
``(2) Nonapplication of subsection.--This subsection shall
not apply to--
``(A) a contract which constitutes property
described in paragraph (1) or (7) of section 1221(a),
and
``(B) any income derived in connection with a
contract which, without regard to this subsection, is
treated as other than gain from the sale or exchange of
a capital asset.
``(b) Short-Term Gains and Losses.--Except as provided in the
regulations under section 1092(b) or this section, if gain or loss on
the sale or exchange of a securities futures contract to sell property
is considered as gain or loss from the sale or exchange of a capital
asset, such gain or loss shall be treated as short-term capital gain or
loss.
``(c) Securities Futures Contract.--For purposes of this section,
the term `securities futures contract' means any security future (as
defined in section 3(a)(55)(A) of the Securities Exchange Act of 1934,
as in effect on the date of the enactment of this section).
``(d) Contracts Not Treated as Commodity Futures Contracts.--For
purposes of this title, a securities futures contract shall not be
treated as a commodity futures contract.
``(e) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to provide for the proper treatment of securities
futures contracts under this title.''.
(b) Terminations, Etc.--Section 1234A is amended--
(1) by inserting ``(other than a securities futures
contract, as defined in section 1234B)'' after ``right or
obligation'' in paragraph (1),
(2) by striking ``or'' at the end of paragraph (1),
(3) by adding ``or'' at the end of paragraph (2), and
(4) by inserting after paragraph (2) the following new
paragraph:
``(3) a securities futures contract (as so defined) which
is a capital asset in the hands of the taxpayer,''.
(c) Nonrecognition Under Section 1032.--The second sentence of
section 1032(a) is amended by inserting ``, or with respect to a
securities futures contract (as defined in section 1234B),'' after ``an
option''.
(d) Treatment Under Wash Sales Rules.--Section 1091 is amended by
adding at the end the following new subsection:
``(f) Cash Settlement.--This section shall not fail to apply to a
contract or option to acquire or sell stock or securities solely by
reason of the fact that the contract or option settles in (or could be
settled in) cash or property other than such stock or securities.''.
(e) Treatment Under Straddle Rules.--Clause (i) of section
1092(d)(3)(B) is amended by striking ``or'' at the end of subclause
(I), by redesignating subclause (II) as subclause (III), and by
inserting after subclause (I) the following new subclause:
``(II) a securities futures
contract (as defined in section 1234B)
with respect to such stock or
substantially identical stock or
securities, or''.
(f) Treatment Under Short Sales Rules.--Paragraph (2) of section
1233(e) is amended by striking ``and'' at the end of subparagraph (B),
by striking the period at the end of subparagraph (C) and inserting ``;
and'', and by adding at the end the following:
``(D) a securities futures contract (as defined in
section 1234B) to acquire substantially identical
property shall be treated as substantially identical
property.''.
(g) Treatment Under Section 1256.--
(1)(A) Subsection (b) of section 1256 is amended by
striking ``and'' at the end of paragraph (3), by striking the
period at the end of paragraph (4) and inserting ``, and'', and
by adding at the end the following:
``(5) any dealer securities futures contract.
The term `section 1256 contract' shall not include any securities
futures contract or option on such a contract unless such contract or
option is a dealer securities futures contract.''.
(B) Subsection (g) of section 1256 is amended by adding at
the end the following new paragraph:
``(9) Dealer securities futures contract.--
``(A) In general.--The term `dealer securities
futures contract' means, with respect to any dealer,
any securities futures contract, and any option on such
a contract, which--
``(i) is entered into by such dealer (or,
in the case of an option, is purchased or
granted by such dealer) in the normal course of
his activity of dealing in such contracts or
options, as the case may be, and
``(ii) is traded on a qualified board or
exchange.
``(B) Dealer.--For purposes of subparagraph (A), a
person shall be treated as a dealer in securities
futures contracts or options on such contracts if the
Secretary determines that such person performs, with
respect to such contracts or options, as the case may
be, functions similar to the functions performed by
persons described in paragraph (8)(A). Such
determination shall be made to the extent appropriate
to carry out the purposes of this section.
``(C) Securities futures contract.--The term
`securities futures contract' has the meaning given to
such term by section 1234B.''.
(2) Paragraph (4) of section 1256(f) is amended--
(A) by inserting ``, or dealer securities futures
contracts,'' after ``dealer equity options'' in the
text, and
(B) by inserting ``and dealer securities futures
contracts'' after ``dealer equity options'' in the
heading.
(3) Paragraph (6) of section 1256(g) is amended to read as
follows:
``(6) Equity option.--The term `equity option' means any
option--
``(A) to buy or sell stock, or
``(B) the value of which is determined directly or
indirectly by reference to any stock or any narrow-
based security index (as defined in section 3(a)(55) of
the Securities Exchange Act of 1934, as in effect on
the date of the enactment of this paragraph).
The term `equity option' includes such an option on a group of
stocks only if such group meets the requirements for a narrow-
based security index (as so defined).''.
(4) The Secretary of the Treasury or his delegate shall
make the determinations under section 1256(g)(9)(B) of the
Internal Revenue Code of 1986, as added by this Act, not later
than July 1, 2001.
(h) Conforming Amendments.--
(1) Section 1223 is amended by redesignating paragraph (16)
as paragraph (17) and by inserting after paragraph (15) the
following new paragraph:
``(16) If the security to which a securities futures
contract (as defined in section 1234B) relates (other than a
contract to which section 1256 applies) is acquired in
satisfaction of such contract, in determining the period for
which the taxpayer has held such security, there shall be
included the period for which the taxpayer held such contract
if such contract was a capital asset in the hands of the
taxpayer.''.
(2) The table of sections for subpart IV of subchapter P of
chapter 1 is amended by inserting after the item relating to
section 1234A the following new item:
``Sec. 1234B. Securities futures
contracts.''.
(i) Designation of Contract Markets.--Section 7701 is amended by
redesignating subsection (m) as subsection (n) and by inserting after
subsection (l) the following new subsection:
``(m) Designation of Contract Markets.--Any designation by the
Commodity Futures Trading Commission of a contract market which could
not have been made under the law in effect on the day before the date
of the enactment of the Commodity Futures Modernization Act of 2000
shall apply for purposes of this title except to the extent provided in
regulations prescribed by the Secretary.''.
(j) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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