Community Renewal Tax Relief Act of 2000 (P.L. 106-554)
Community Renewal Tax Relief Act of 2000 (P.L. 106-554)
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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.--
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 9 additional empowerment zones.
Sec. 112. Extension of empowerment zone treatment through 2009.
Sec. 113. 20 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.
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.
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. 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.
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.
"(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.
"(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.
"(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).
"(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.
"(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.
"(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.
"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 COMUNITY 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.
"(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.
"(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.
"(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.
"(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.
"(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.".
(B) The heading for such subparagraph (B) is amended by striking " or rehabilitation credit " and inserting " , rehabilitation credit, or commercial revitalization deduction ".
(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.
SEC. 111. AUTHORITY TO DESIGNATE 9 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."
Subparagraph (A) of section 1391(d)(1) (relating to period for which designation is in effect) is amended to read as follows:
"(ii) in the case of an enterprise community, the close of the 10th calendar year beginning on or after such date of designation,".
(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.".
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:
"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).".
(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 D. General provisions.".
"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.".
(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 " 50-percent" and inserting " partial".
(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.
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.
"(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.
"(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)).
"(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.
"(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.
"(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.
"(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.
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:
"(ii) the greater of--
"(I) $1.75 ($1.50 for 2001) multiplied by the State population, or
"(II) $2,000,000,".
"(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.".
(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)".
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:
"(vi) public housing waiting lists,
"(vii) tenant populations of individuals with children, and
"(viii) projects intended for eventual tenant ownership.".
(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:
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)).".
(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 ".
(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".
(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--
"(II) the aggregate housing credit dollar amount allocated for such year.".
SEC. 137. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the amendments made by this subtitle shall apply to--
(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.
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".
(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:
(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:
"(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."
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.
SEC. 201. 2-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 MSAs".
(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:
(11) Section 220(e)(1) is further amended by striking "A Archer" and inserting "An Archer".
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:
(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).
(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.".
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:
(1) IN GENERAL.--Subchapter B of chapter 61 (relating to miscellaneous provisions) is amended by inserting after section 6104 the following new section:
"(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.
"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:
(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)."
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".
(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.
(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.
(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".
(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)".
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:
"(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."
(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:
"(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).".
"(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.".
(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."
(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--
"(II) an annuity plan described in section 403(a).".
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.
(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".
(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:
"(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".
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.
"(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:
(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."
"(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:
(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.
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