[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 434 Engrossed Amendment Senate (EAS)]

  
  
  
  
  
  
  
  
  
  

                  In the Senate of the United States,

                                                      November 3, 1999.
    Resolved, That the bill from the House of Representatives (H.R. 
434) entitled ``An Act to authorize a new trade and investment policy 
for sub-Sahara Africa.'', do pass with the following

                              AMENDMENTS:

            Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Trade and 
Development Act of 1999''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.

   TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA

            Subtitle A--Trade Policy for Sub-Saharan Africa

Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Statement of policy.
Sec. 104. Sub-Saharan Africa defined.

 Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

Sec. 111. Eligibility for certain benefits.
Sec. 112. Treatment of certain textiles and apparel.
Sec. 113. United States-sub-Saharan African trade and economic 
                            cooperation forum.
Sec. 114. United States-sub-Saharan Africa free trade area.
Sec. 115. Reporting requirement.
Sec. 116. Access to HIV/AIDS pharmaceuticals and medical technologies.

              TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN

         Subtitle A--Trade Policy for Caribbean Basin Countries

Sec. 201. Short title.
Sec. 202. Findings and policy.
Sec. 203. Definitions.

        Subtitle B--Trade Benefits for Caribbean Basin Countries

Sec. 211. Temporary provisions to provide additional trade benefits to 
                            certain beneficiary countries.
Sec. 212. Adequate and effective protection for intellectual property 
                            rights.

           Subtitle C--Cover Over of Tax on Distilled Spirits

Sec. 221. Suspension of limitation on cover over of tax on distilled 
                            spirits.

              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

Sec. 301. Extension of duty-free treatment under generalized system of 
                            preferences.
Sec. 302. Entry procedures for foreign trade zone operations.

                 TITLE IV--TRADE ADJUSTMENT ASSISTANCE

Sec. 401. Trade adjustment assistance.
Sec. 402. Trade adjustment assistance for textile and apparel workers.

                      TITLE V--REVENUE PROVISIONS

Sec. 501. Modification of installment method and repeal of installment 
                            method for accrual method taxpayers.
Sec. 502. Limitations on welfare benefit funds of 10 or more employer 
                            plans.
Sec. 503. Treatment of gain from constructive ownership transactions.
Sec. 504. Limitation on use of nonaccrual experience method of 
                            accounting.
Sec. 505. Allocation of basis on transfers of intangibles in certain 
                            nonrecognition transactions.
Sec. 506. Increase in elective withholding rate for nonperiodic 
                            distributions from deferred compensation 
                            plans.

           TITLE VI--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

            Subtitle A--Amendments to the Trade Act of 1974

Sec. 601. Short title.
Sec. 602. Trade adjustment assistance for farmers.

 Subtitle B--Revenue Provisions Relating to Trade Adjustment Assistance

Sec. 610. Reference.
Sec. 611. Modifications to asset diversification test.
Sec. 612. Treatment of income and services provided by taxable REIT 
                            subsidiaries.
Sec. 613. Taxable REIT subsidiary.
Sec. 614. Limitation on earnings stripping.
Sec. 615. 100 percent tax on improperly allocated amounts.
Sec. 616. Effective date.
Sec. 617. Health care REITS.
Sec. 618. Conformity with regulated investment company rules.
Sec. 619. Clarification of exception for independent operators.
Sec. 620. Modification of earnings and profits rules.
Sec. 621. Modification of estimated tax rules for closely held real 
                            estate investment trusts.
Sec. 622. Controlled entities ineligible for REIT status.
Sec. 623. Modification of individual estimated tax safe harbor.

                   TITLE VII--OTHER TRADE PROVISIONS

Sec. 701. Normal trade relations for Albania.
Sec. 702. Normal trade relations for Kyrgyzstan.
Sec. 703. Report on employment and trade adjustment assistance.
Sec. 704. Trade adjustment assistance.
Sec. 705. Report on debt relief.
Sec. 706. HIV/AIDS effect on the sub-Saharan African workforce.
Sec. 707. Goods made with forced or indentured child labor.
Sec. 708. Reliquidation of certain nuclear fuel assemblies.
Sec. 709. Sense of the Senate regarding fair access to Japanese 
                            telecommunications facilities and services.
Sec. 710. Reports to the Finance and Ways and Means Committees.
Sec. 711. Clarification of section 334 of the Uruguay Round Agreements 
                            Act.
Sec. 712. Chief Agricultural Negotiator.
Sec. 713. Revision of retaliation list or other remedial action.
Sec. 714. Sense of Congress regarding comprehensive debt relief for the 
                            world's poorest countries.
Sec. 715. Report on trade adjustment assistance for agricultural 
                            commodity producers.
Sec. 716. Study on improving African agricultural practices.
Sec. 717. Anticorruption efforts.
Sec. 718. Sense of the Senate regarding efforts to combat 
                            desertification in Africa and other 
                            nations.
Sec. 719. Report on World Trade Organization Ministerial.
Sec. 720. Marking of imported jewelry.
Sec. 721. Sense of the Senate regarding tariff inversions.
Sec. 722. Limitations on benefits.
Sec. 723. Agriculture trade negotiating objectives and consultations 
                            with Congress.
Sec. 724. Application of denial of foreign tax credit regarding trade 
                            and investment with respect to certain 
                            foreign countries.
Sec. 725. Unreasonable acts, policies, and practices.

   TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA

            Subtitle A--Trade Policy for Sub-Saharan Africa

SEC. 101. SHORT TITLE.

    This title may be cited as the ``African Growth and Opportunity 
Act''.

SEC. 102. FINDINGS.

    Congress finds that--
            (1) it is in the mutual interest of the United States and 
        the countries of sub-Saharan Africa to promote stable and 
        sustainable economic growth and development in sub-Saharan 
        Africa;
            (2) the 48 countries of sub-Saharan Africa form a region 
        richly endowed with both natural and human resources;
            (3) sub-Saharan Africa represents a region of enormous 
        economic potential and of enduring political significance to 
        the United States;
            (4) the region has experienced a rise in both economic 
        development and political freedom as countries in sub-Saharan 
        Africa have taken steps toward liberalizing their economies and 
        encouraged broader participation in the political process;
            (5) the countries of sub-Saharan Africa have made progress 
        toward regional economic integration that can have positive 
        benefits for the region;
            (6) despite those gains, the per capita income in sub-
        Saharan Africa averages less than $500 annually;
            (7) United States foreign direct investment in the region 
        has fallen in recent years and the sub-Saharan African region 
        receives only minor inflows of direct investment from around 
        the world;
            (8) trade between the United States and sub-Saharan Africa, 
        apart from the import of oil, remains an insignificant part of 
        total United States trade;
            (9) trade and investment, as the American experience has 
        shown, can represent powerful tools both for economic 
        development and for building a stable political environment in 
        which political freedom can flourish;
            (10) increased trade and investment flows have the greatest 
        impact in an economic environment in which trading partners 
        eliminate barriers to trade and capital flows and encourage the 
        development of a vibrant private sector that offers individual 
        African citizens the freedom to expand their economic 
        opportunities and provide for their families;
            (11) offering the countries of sub-Saharan Africa enhanced 
        trade preferences will encourage both higher levels of trade 
        and direct investment in support of the positive economic and 
        political developments under way throughout the region; and
            (12) encouraging the reciprocal reduction of trade and 
        investment barriers in Africa will enhance the benefits of 
        trade and investment for the region as well as enhance 
        commercial and political ties between the United States and 
        sub-Saharan Africa.

SEC. 103. STATEMENT OF POLICY.

    Congress supports--
            (1) encouraging increased trade and investment between the 
        United States and sub-Saharan Africa;
            (2) reducing tariff and nontariff barriers and other 
        obstacles to sub-Saharan African and United States trade;
            (3) expanding United States assistance to sub-Saharan 
        Africa's regional integration efforts;
            (4) negotiating reciprocal and mutually beneficial trade 
        agreements, including the possibility of establishing free 
        trade areas that serve the interests of both the United States 
        and the countries of sub-Saharan Africa;
            (5) focusing on countries committed to accountable 
        government, economic reform, and the eradication of poverty;
            (6) strengthening and expanding the private sector in sub-
        Saharan Africa;
            (7) supporting the development of civil societies and 
        political freedom in sub-Saharan Africa; and
            (8) establishing a United States-Sub-Saharan African 
        Economic Cooperation Forum.

SEC. 104. SUB-SAHARAN AFRICA DEFINED.

    In this title, the terms ``sub-Saharan Africa'', ``sub-Saharan 
African country'', ``country in sub-Saharan Africa'', and ``countries 
in sub-Saharan Africa'' refer to the following:
            (1) Republic of Angola (Angola).
            (2) Republic of Botswana (Botswana).
            (3) Republic of Burundi (Burundi).
            (4) Republic of Cape Verde (Cape Verde).
            (5) Republic of Chad (Chad).
            (6) Democratic Republic of Congo.
            (7) Republic of the Congo (Congo).
            (8) Republic of Djibouti (Djibouti).
            (9) State of Eritrea (Eritrea).
            (10) Gabonese Republic (Gabon).
            (11) Republic of Ghana (Ghana).
            (12) Republic of Guinea-Bissau (Guinea-Bissau).
            (13) Kingdom of Lesotho (Lesotho).
            (14) Republic of Madagascar (Madagascar).
            (15) Republic of Mali (Mali).
            (16) Republic of Mauritius (Mauritius).
            (17) Republic of Namibia (Namibia).
            (18) Federal Republic of Nigeria (Nigeria).
            (19) Democratic Republic of Sao Tome and Principe (Sao Tome 
        and Principe).
            (20) Republic of Sierra Leone (Sierra Leone).
            (21) Somalia.
            (22) Kingdom of Swaziland (Swaziland).
            (23) Republic of Togo (Togo).
            (24) Republic of Zimbabwe (Zimbabwe).
            (25) Republic of Benin (Benin).
            (26) Burkina Faso (Burkina).
            (27) Republic of Cameroon (Cameroon).
            (28) Central African Republic.
            (29) Federal Islamic Republic of the Comoros (Comoros).
            (30) Republic of Cote d'Ivoire (Cote d'Ivoire).
            (31) Republic of Equatorial Guinea (Equatorial Guinea).
            (32) Ethiopia.
            (33) Republic of the Gambia (Gambia).
            (34) Republic of Guinea (Guinea).
            (35) Republic of Kenya (Kenya).
            (36) Republic of Liberia (Liberia).
            (37) Republic of Malawi (Malawi).
            (38) Islamic Republic of Mauritania (Mauritania).
            (39) Republic of Mozambique (Mozambique).
            (40) Republic of Niger (Niger).
            (41) Republic of Rwanda (Rwanda).
            (42) Republic of Senegal (Senegal).
            (43) Republic of Seychelles (Seychelles).
            (44) Republic of South Africa (South Africa).
            (45) Republic of Sudan (Sudan).
            (46) United Republic of Tanzania (Tanzania).
            (47) Republic of Uganda (Uganda).
            (48) Republic of Zambia (Zambia).

 Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.

    (a) In General.--Title V of the Trade Act of 1974 is amended by 
inserting after section 506 the following new section:

``SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN 
              BENEFITS.

    ``(a) Authority To Designate.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, the President is authorized to designate a country listed 
        in section 104 of the African Growth and Opportunity Act as a 
        beneficiary sub-Saharan African country eligible for the 
        benefits described in subsection (b), if the President 
        determines that the country--
                    ``(A) has established, or is making continual 
                progress toward establishing--
                            ``(i) a market-based economy, where private 
                        property rights are protected and the 
                        principles of an open, rules-based trading 
                        system are observed;
                            ``(ii) a democratic society, where the rule 
                        of law, political freedom, participatory 
                        democracy, and the right to due process and a 
                        fair trial are observed;
                            ``(iii) an open trading system through the 
                        elimination of barriers to United States trade 
                        and investment and the resolution of bilateral 
                        trade and investment disputes;
                            ``(iv) economic policies to reduce poverty, 
                        increase the availability of health care and 
                        educational opportunities, expand physical 
                        infrastructure, and promote the establishment 
                        of private enterprise; and
                            ``(v) a system to combat corruption and 
                        bribery, such as signing the Convention on 
                        Combating Bribery of Foreign Public Officials 
                        in International Business Transactions;
                    ``(B) does not engage in gross violations of 
                internationally recognized human rights or provide 
                support for acts of international terrorism and 
                cooperates in international efforts to eliminate human 
                rights violations and terrorist activities; and
                    ``(C) subject to the authority granted to the 
                President under section 502 (a), (d), and (e), 
                otherwise satisfies the eligibility criteria set forth 
                in section 502.
            ``(2) Monitoring and review of certain countries.--The 
        President shall monitor and review the progress of each country 
        listed in section 104 of the African Growth and Opportunity Act 
        in meeting the requirements described in paragraph (1) in order 
        to determine the current or potential eligibility of each 
        country to be designated as a beneficiary sub-Saharan African 
        country for purposes of subsection (a). The President shall 
        include the reasons for the President's determinations in the 
        annual report required by section 115 of the African Growth and 
        Opportunity Act.
            ``(3) Continuing compliance.--If the President determines 
        that a beneficiary sub-Saharan African country is not making 
        continual progress in meeting the requirements described in 
        paragraph (1), the President shall terminate the designation of 
        that country as a beneficiary sub-Saharan African country for 
        purposes of this section, effective on January 1 of the year 
        following the year in which such determination is made.
    ``(b) Preferential Tariff Treatment for Certain Articles.--
            ``(1) In general.--The President may provide duty-free 
        treatment for any article described in section 503(b)(1) (B) 
        through (G) (except for textile luggage) that is the growth, 
        product, or manufacture of a beneficiary sub-Saharan African 
        country described in subsection (a), if, after receiving the 
        advice of the International Trade Commission in accordance with 
        section 503(e), the President determines that such article is 
        not import-sensitive in the context of imports from beneficiary 
        sub-Saharan African countries.
            ``(2) Rules of origin.--The duty-free treatment provided 
        under paragraph (1) shall apply to any article described in 
        that paragraph that meets the requirements of section 
        503(a)(2), except that--
                    ``(A) if the cost or value of materials produced in 
                the customs territory of the United States is included 
                with respect to that article, an amount not to exceed 
                15 percent of the appraised value of the article at the 
                time it is entered that is attributed to such United 
                States cost or value may be applied toward determining 
                the percentage referred to in subparagraph (A) of 
                section 503(a)(2); and
                    ``(B) the cost or value of the materials included 
                with respect to that article that are produced in one 
                or more beneficiary sub-Saharan African countries shall 
                be applied in determining such percentage.
    ``(c) Beneficiary Sub-Saharan African Countries, etc.--For purposes 
of this title, the terms `beneficiary sub-Saharan African country' and 
`beneficiary sub-Saharan African countries' mean a country or countries 
listed in section 104 of the African Growth and Opportunity Act that 
the President has determined is eligible under subsection (a) of this 
section.''.
    (b) Waiver of Competitive Need Limitation.--Section 503(c)(2)(D) of 
the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D)) is amended to read as 
follows:
                    ``(D) Least-developed beneficiary developing 
                countries and beneficiary sub-saharan african 
                countries.--Subparagraph (A) shall not apply to any 
                least-developed beneficiary developing country or any 
                beneficiary sub-Saharan African country.''.
    (c) Termination.--Title V of the Trade Act of 1974 is amended by 
inserting after section 506A, as added by subsection (a), the following 
new section:

``SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.

    ``In the case of a country listed in section 104 of the African 
Growth and Opportunity Act that is a beneficiary developing country, 
duty-free treatment provided under this title shall remain in effect 
through September 30, 2006.''.
    (d) Clerical Amendments.--The table of contents for title V of the 
Trade Act of 1974 is amended by inserting after the item relating to 
section 505 the following new items:

``506A. Designation of sub-Saharan African countries for certain 
                            benefits.
``506B. Termination of benefits for sub-Saharan African countries.''.
    (e) Effective Date.--The amendments made by this section take 
effect on October 1, 2000.

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.

    (a) Preferential Treatment.--Notwithstanding any other provision of 
law, textile and apparel articles described in subsection (b) 
(including textile luggage) imported from a beneficiary sub-Saharan 
African country, described in section 506A(c) of the Trade Act of 1974, 
shall enter the United States free of duty and free of any quantitative 
limitations, if--
            (1) the country adopts an efficient visa system to guard 
        against unlawful transshipment of textile and apparel goods and 
        the use of counterfeit documents; and
            (2) the country enacts legislation or promulgates 
        regulations that would permit United States Customs Service 
        verification teams to have the access necessary to investigate 
        thoroughly allegations of transshipment through such country.
    (b) Products Covered.--The preferential treatment described in 
subsection (a) shall apply only to the following textile and apparel 
products:
            (1) Apparel articles assembled in beneficiary sub-saharan 
        african countries.--Apparel articles assembled in one or more 
        beneficiary sub-Saharan African countries from fabrics wholly 
        formed and cut in the United States, from yarns wholly formed 
        in the United States that are--
                    (A) entered under subheading 9802.00.80 of the 
                Harmonized Tariff Schedule of the United States; or
                    (B) entered under chapter 61 or 62 of the 
                Harmonized Tariff Schedule of the United States, if, 
                after such assembly, the articles would have qualified 
                for entry under subheading 9802.00.80 of the Harmonized 
                Tariff Schedule of the United States but for the fact 
                that the articles were subjected to stone-washing, 
                enzyme-washing, acid washing, perma-pressing, oven-
                baking, bleaching, garment-dyeing, or other similar 
                processes.
            (2) Apparel articles cut and assembled in beneficiary sub-
        saharan african countries.--Apparel articles cut in one or more 
        beneficiary sub-Saharan African countries from fabric wholly 
        formed in the United States from yarns wholly formed in the 
        United States, if such articles are assembled in one or more 
        beneficiary sub-Saharan African countries with thread formed in 
        the United States.
            (3) Handloomed, handmade, and folklore articles.--A 
        handloomed, handmade, or folklore article of a beneficiary sub-
        Saharan African country or countries that is certified as such 
        by the competent authority of such beneficiary country or 
        countries. For purposes of this paragraph, the President, after 
        consultation with the beneficiary sub-Saharan African country 
        or countries concerned, shall determine which, if any, 
        particular textile and apparel goods of the country (or 
        countries) shall be treated as being handloomed, handmade, or 
        folklore goods.
    (c) Penalties for Transshipments.--
            (1) Penalties for exporters.--If the President determines, 
        based on sufficient evidence, that an exporter has engaged in 
        transshipment with respect to textile or apparel products from 
        a beneficiary sub-Saharan African country, then the President 
        shall deny all benefits under this section and section 506A of 
        the Trade Act of 1974 to such exporter, any successor of such 
        exporter, and any other entity owned or operated by the 
        principal of the exporter for a period of 5 years.
            (2) Transshipment described.--Transshipment within the 
        meaning of this subsection has occurred when preferential 
        treatment for a textile or apparel article under subsection (a) 
        has been claimed on the basis of material false information 
        concerning the country of origin, manufacture, processing, or 
        assembly of the article or any of its components. For purposes 
        of this paragraph, false information is material if disclosure 
        of the true information would mean or would have meant that the 
        article is or was ineligible for preferential treatment under 
        subsection (a).
    (d) Technical Assistance.--The Customs Service shall provide 
technical assistance to the beneficiary sub-Saharan African countries 
for the implementation of the requirements set forth in subsection (a) 
(1) and (2).
    (e) Monitoring and Reports to Congress.--The Customs Service shall 
monitor and the Commissioner of Customs shall submit to Congress, not 
later than March 31 of each year that this section is in effect, a 
report on the effectiveness of the anti-circumvention systems described 
in this section and on measures taken by countries in sub-Saharan 
Africa which export textiles or apparel to the United States to prevent 
circumvention as described in article 5 of the Agreement on Textiles 
and Clothing.
    (f) Safeguard.--The President shall have the authority to impose 
appropriate remedies, including restrictions on or the removal of 
quota-free and duty-free treatment provided under this section, in the 
event that textile and apparel articles from a beneficiary sub-Saharan 
African country are being imported in such increased quantities as to 
cause serious damage, or actual threat thereof, to the domestic 
industry producing like or directly competitive articles. The President 
shall exercise his authority under this subsection consistent with the 
Agreement on Textiles and Clothing.
    (g) Definitions.--In this section:
            (1) Agreement on textiles and clothing.--The term 
        ``Agreement on Textiles and Clothing'' means the Agreement on 
        Textiles and Clothing referred to in section 101(d)(4) of the 
        Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
            (2) Beneficiary sub-saharan african country, etc.--The 
        terms ``beneficiary sub-Saharan African country'' and 
        ``beneficiary sub-Saharan African countries'' have the same 
        meaning as such terms have under section 506A(c) of the Trade 
        Act of 1974.
            (3) Customs service.--The term ``Customs Service'' means 
        the United States Customs Service.
    (h) Effective Date.--The amendments made by this section take 
effect on October 1, 2000 and shall remain in effect through September 
30, 2006.

SEC. 113. UNITED STATES-SUB-SAHARAN AFRICAN TRADE AND ECONOMIC 
              COOPERATION FORUM.

    (a) Declaration of Policy.--The President shall convene annual 
meetings between senior officials of the United States Government and 
officials of the governments of sub-Saharan African countries in order 
to foster close economic ties between the United States and sub-Saharan 
Africa.
    (b) Establishment.--Not later than 12 months after the date of 
enactment of this Act, the President, after consulting with the 
officials of interested sub-Saharan African governments, shall 
establish a United States-Sub-Saharan African Trade and Economic 
Cooperation Forum (in this section referred to as the ``Forum'').
    (c) Requirements.--In creating the Forum, the President shall meet 
the following requirements:
            (1) First meeting.--The President shall direct the 
        Secretary of Commerce, the Secretary of the Treasury, the 
        Secretary of State, and the United States Trade Representative 
        to invite their counterparts from interested sub-Saharan 
        African governments and representatives of appropriate regional 
        organizations to participate in the first annual meeting to 
        discuss expanding trade and investment relations between the 
        United States and sub-Saharan Africa.
            (2) Nongovernmental organizations.--
                    (A) In general.--The President, in consultation 
                with Congress, shall invite United States 
                nongovernmental organizations to host meetings with 
                their counterparts from sub-Saharan Africa in 
                conjunction with meetings of the Forum for the purpose 
                of discussing the issues described in paragraph (1).
                    (B) Private sector.--The President, in consultation 
                with Congress, shall invite United States 
                representatives of the private sector to host meetings 
                with their counterparts from sub-Saharan Africa in 
                conjunction with meetings of the Forum for the purpose 
                of discussing the issues described in paragraph (1).
            (3) Annual meetings.--As soon as practicable after the date 
        of enactment of this Act, the President shall meet with the 
        heads of the governments of interested sub-Saharan African 
        countries for the purpose of discussing the issues described in 
        paragraph (1).

SEC. 114. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.

    (a) In General.--The President shall examine the feasibility of 
negotiating a free trade agreement (or agreements) with interested sub-
Saharan African countries.
    (b) Report to Congress.--Not later than 12 months after the date of 
enactment of this Act, the President shall submit a report to the 
Committee on Finance of the Senate and the Committee on Ways and Means 
of the House of Representatives regarding the President's conclusions 
on the feasibility of negotiating such agreement (or agreements). If 
the President determines that the negotiation of any such free trade 
agreement is feasible, the President shall provide a detailed plan for 
such negotiation that outlines the objectives, timing, any potential 
benefits to the United States and sub-Saharan Africa, and the likely 
economic impact of any such agreement.

SEC. 115. REPORTING REQUIREMENT.

    Not later than 1 year after the date of enactment of this Act, and 
annually thereafter for 4 years, the President shall submit a report to 
Congress on the implementation of this title.

SEC. 116. ACCESS TO HIV/AIDS PHARMACEUTICALS AND MEDICAL TECHNOLOGIES.

    (a) Findings.--Congress finds that--
            (1) since the onset of the worldwide HIV/AIDS epidemic, 
        approximately 34,000,000 people living in sub-Saharan Africa 
        have been infected with the disease;
            (2) of those infected, approximately 11,500,000 have died; 
        and
            (3) the deaths represent 83 percent of the total HIV/AIDS-
        related deaths worldwide.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) it is in the interest of the United States to take all 
        necessary steps to prevent further spread of infectious 
        disease, particularly HIV/AIDS;
            (2) there is critical need for effective incentives to 
        develop new pharmaceuticals, vaccines, and therapies to combat 
        the HIV/AIDS crisis, especially effective global standards for 
        protecting pharmaceutical and medical innovation;
            (3) the overriding priority for responding to the crisis on 
        HIV/AIDS in sub-Saharan Africa should be the development of the 
        infrastructure necessary to deliver adequate health care 
        services, and of public education to prevent transmission and 
        infection, rather than legal standards issues; and
            (4) individual countries should have the ability to 
        determine the availability of pharmaceuticals and health care 
        for their citizens in general, and particularly with respect to 
        the HIV/AIDS epidemic.
    (c) Limitation on Use of Funds.--Funds appropriated or otherwise 
made available to any department or agency of the United States may not 
be obligated or expended to seek, through negotiation or otherwise, the 
revocation or revision of any intellectual property or competition law 
or policy that regulates HIV/AIDS pharmaceuticals or medical 
technologies of a beneficiary sub-Saharan African country if the law or 
policy promotes access to HIV/AIDS pharmaceuticals or medical 
technologies and the law or policy of the country provides adequate and 
effective intellectual property protection consistent with the 
Agreement on Trade-Related Aspects of Intellectual Property Rights 
referred to in section 101(d)(15) of the Uruguay Round Agreements Act.

              TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN

         Subtitle A--Trade Policy for Caribbean Basin Countries

SEC. 201. SHORT TITLE.

    This title may be cited as the ``United States-Caribbean Basin 
Trade Enhancement Act''.

SEC. 202. FINDINGS AND POLICY.

    (a) Findings.--Congress makes the following findings:
            (1) The Caribbean Basin Economic Recovery Act (referred to 
        in this title as ``CBERA'') represents a permanent commitment 
        by the United States to encourage the development of strong 
        democratic governments and revitalized economies in neighboring 
        countries in the Caribbean Basin.
            (2) Thirty-four democratically elected leaders agreed at 
        the 1994 Summit of the Americas to conclude negotiation of a 
        Free Trade Area of the Americas (referred to in this title as 
        ``FTAA'') by the year 2005.
            (3) The economic security of the countries in the Caribbean 
        Basin will be enhanced by the completion of the FTAA.
            (4) Offering temporary benefits to Caribbean Basin 
        countries will enhance trade between the United States and the 
        Caribbean Basin, encourage development of trade and investment 
        policies that will facilitate participation of Caribbean Basin 
        countries in the FTAA, preserve the United States commitment to 
        Caribbean Basin beneficiary countries, help further economic 
        development in the Caribbean Basin region, and accelerate the 
        trend toward more open economies in the region.
            (5) Promotion of the growth of free enterprise and economic 
        opportunity in the Caribbean Basin will enhance the national 
        security interests of the United States.
            (6) Increased trade and economic activity between the 
        United States and Caribbean Basin beneficiary countries will 
        create expanding export opportunities for United States 
        businesses and workers.
    (b) Policy.--It is the policy of the United States to--
            (1) offer Caribbean Basin beneficiary countries willing to 
        prepare to become a party to the FTAA or a comparable trade 
        agreement, tariff treatment essentially equivalent to that 
        accorded to products of NAFTA countries for certain products 
        not currently eligible for duty-free treatment under the CBERA; 
        and
            (2) seek the participation of Caribbean Basin beneficiary 
        countries in the FTAA or a trade agreement comparable to the 
        FTAA at the earliest possible date, with the goal of achieving 
        full participation in such agreement not later than 2005.

SEC. 203. DEFINITIONS.

    In this title:
            (1) Beneficiary country.--The term ``beneficiary country'' 
        has the meaning given the term in section 212(a)(1)(A) of the 
        Caribbean Basin Economic Recovery Act (19 U.S.C. 
        2702(a)(1)(A)).
            (2) CBTEA.--The term ``CBTEA'' means the United States-
        Caribbean Basin Trade Enhancement Act.
            (3) NAFTA.--The term ``NAFTA'' means the North American 
        Free Trade Agreement entered into between the United States, 
        Mexico, and Canada on December 17, 1992.
            (4) NAFTA country.--The term ``NAFTA country'' means any 
        country with respect to which the NAFTA is in force.
            (5) WTO and wto member.--The terms ``WTO'' and ``WTO 
        member'' have the meanings given those terms in section 2 of 
        the Uruguay Round Agreements Act (19 U.S.C. 3501).

        Subtitle B--Trade Benefits for Caribbean Basin Countries

SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE BENEFITS TO 
              CERTAIN BENEFICIARY COUNTRIES.

    (a) Temporary Provisions.--Section 213(b) of the Caribbean Basin 
Economic Recovery Act (19 U.S.C. 2703(b)) is amended to read as 
follows:
    ``(b) Import-Sensitive Articles.--
            ``(1) In general.--Subject to paragraphs (2) through (5), 
        the duty-free treatment provided under this title does not 
        apply to--
                    ``(A) textile and apparel articles which were not 
                eligible articles for purposes of this title on January 
                1, 1994, as this title was in effect on that date;
                    ``(B) footwear not designated at the time of the 
                effective date of this title as eligible articles for 
                the purpose of the generalized system of preferences 
                under title V of the Trade Act of 1974;
                    ``(C) tuna, prepared or preserved in any manner, in 
                airtight containers;
                    ``(D) petroleum, or any product derived from 
                petroleum, provided for in headings 2709 and 2710 of 
                the HTS;
                    ``(E) watches and watch parts (including cases, 
                bracelets, and straps), of whatever type including, but 
                not limited to, mechanical, quartz digital or quartz 
                analog, if such watches or watch parts contain any 
                material which is the product of any country with 
                respect to which HTS column 2 rates of duty apply; or
                    ``(F) articles to which reduced rates of duty apply 
                under subsection (h).
            ``(2) Transition period treatment of certain textile and 
        apparel articles.--
                    ``(A) Products covered.--During the transition 
                period, the preferential treatment described in 
                subparagraph (B) shall apply to the following products:
                            ``(i) Apparel articles assembled in a cbtea 
                        beneficiary country.--Apparel articles 
                        assembled in a CBTEA beneficiary country from 
                        fabrics wholly formed and cut in the United 
                        States, from yarns wholly formed in the United 
                        States that are--
                                    ``(I) entered under subheading 
                                9802.00.80 of the HTS; or
                                    ``(II) entered under chapter 61 or 
                                62 of the HTS, if, after such assembly, 
                                the articles would have qualified for 
                                entry under subheading 9802.00.80 of 
                                the HTS but for the fact that the 
                                articles were subjected to stone-
                                washing, enzyme-washing, acid washing, 
                                perma-pressing, oven-baking, bleaching, 
                                garment-dyeing, or other similar 
                                processes.
                            ``(ii) Apparel articles cut and assembled 
                        in a cbtea beneficiary country.--Apparel 
                        articles cut in a CBTEA beneficiary country 
                        from fabric wholly formed in the United States 
                        from yarns wholly formed in the United States, 
                        if such articles are assembled in such country 
                        with thread formed in the United States.
                            ``(iii) Handloomed, handmade, and folklore 
                        articles.--A handloomed, handmade, or folklore 
                        article of a CBTEA beneficiary country 
                        identified under subparagraph (C) that is 
                        certified as such by the competent authority of 
                        such beneficiary country.
                            ``(iv) Textile luggage.--Textile luggage--
                                    ``(I) assembled in a CBTEA 
                                beneficiary country from fabric wholly 
                                formed and cut in the United States, 
                                from yarns wholly formed in the United 
                                States, that is entered under 
                                subheading 9802.00.80 of the HTS; or
                                    ``(II) assembled from fabric cut in 
                                a CBTEA beneficiary country from fabric 
                                wholly formed in the United States from 
                                yarns wholly formed in the United 
                                States, if such luggage is assembled in 
                                such country with thread formed in the 
                                United States.
                    ``(B) Preferential treatment.--Except as provided 
                in subparagraph (E), during the transition period, the 
                articles described in subparagraph (A) shall enter the 
                United States free of duty and free of any quantitative 
                limitations.
                    ``(C) Handloomed, handmade, and folklore articles 
                defined.--For purposes of subparagraph (A)(iii), the 
                President, after consultation with the CBTEA 
                beneficiary country concerned, shall determine which, 
                if any, particular textile and apparel goods of the 
                country shall be treated as being handloomed, handmade, 
                or folklore goods of a kind described in section 2.3 
                (a), (b), or (c) or Appendix 3.1.B.11 of the Annex.
                    ``(D) Penalties for transshipments.--
                            ``(i) Penalties for exporters.--If the 
                        President determines, based on sufficient 
                        evidence, that an exporter has engaged in 
                        transshipment with respect to textile or 
                        apparel products from a CBTEA beneficiary 
                        country, then the President shall deny all 
                        benefits under this title to such exporter, and 
                        any successor of such exporter, for a period of 
                        2 years.
                            ``(ii) Penalties for countries.--Whenever 
                        the President finds, based on sufficient 
                        evidence, that transshipment has occurred, the 
                        President shall request that the CBTEA 
                        beneficiary country or countries through whose 
                        territory the transshipment has occurred take 
                        all necessary and appropriate actions to 
                        prevent such transshipment. If the President 
                        determines that a country is not taking such 
                        actions, the President shall reduce the 
                        quantities of textile and apparel articles that 
                        may be imported into the United States from 
                        such country by the quantity of the 
                        transshipped articles multiplied by 3.
                            ``(iii) Transshipment described.--
                        Transshipment within the meaning of this 
                        subparagraph has occurred when preferential 
                        treatment for a textile or apparel article 
                        under subparagraph (B) has been claimed on the 
                        basis of material false information concerning 
                        the country of origin, manufacture, processing, 
                        or assembly of the article or any of its 
                        components. For purposes of this clause, false 
                        information is material if disclosure of the 
                        true information would mean or would have meant 
                        that the article is or was ineligible for 
                        preferential treatment under subparagraph (B).
                    ``(E) Bilateral emergency actions.--
                            ``(i) In general.--The President may take 
                        bilateral emergency tariff actions of a kind 
                        described in section 4 of the Annex with 
                        respect to any apparel article imported from a 
                        CBTEA beneficiary country if the application of 
                        tariff treatment under subparagraph (B) to such 
                        article results in conditions that would be 
                        cause for the taking of such actions under such 
                        section 4 with respect to a like article 
                        described in the same 8-digit subheading of the 
                        HTS that is imported from Mexico.
                            ``(ii) Rules relating to bilateral 
                        emergency action.--For purposes of applying 
                        bilateral emergency action under this 
                        subparagraph--
                                    ``(I) the requirements of paragraph 
                                (5) of section 4 of the Annex (relating 
                                to providing compensation) shall not 
                                apply;
                                    ``(II) the term `transition period' 
                                in section 4 of the Annex shall have 
                                the meaning given that term in 
                                paragraph (5)(D) of this subsection; 
                                and
                                    ``(III) the requirements to consult 
                                specified in section 4 of the Annex 
                                shall be treated as satisfied if the 
                                President requests consultations with 
                                the beneficiary country in question and 
                                the country does not agree to consult 
                                within the time period specified under 
                                section 4.
            ``(3) Transition period treatment of certain other articles 
        originating in beneficiary countries.--
                    ``(A) Equivalent tariff treatment.--
                            ``(i) In general.--Subject to clause (ii), 
                        the tariff treatment accorded at any time 
                        during the transition period to any article 
                        referred to in any of subparagraphs (B) through 
                        (F) of paragraph (1) that originates in the 
                        territory of a CBTEA beneficiary country shall 
                        be identical to the tariff treatment that is 
                        accorded at such time under Annex 302.2 of the 
                        NAFTA to an article described in the same 8-
                        digit subheading of the HTS that is a good of 
                        Mexico and is imported into the United States.
                            ``(ii) Exception.--Clause (i) does not 
                        apply to any article accorded duty-free 
                        treatment under U.S. Note 2(b) to subchapter II 
                        of chapter 98 of the HTS.
                    ``(B) Relationship to subsection (h) duty 
                reductions.--If at any time during the transition 
                period the rate of duty that would (but for action 
                taken under subparagraph (A)(i) in regard to such 
                period) apply with respect to any article under 
                subsection (h) is a rate of duty that is lower than the 
                rate of duty resulting from such action, then such 
                lower rate of duty shall be applied for the purposes of 
                implementing such action.
            ``(4) Customs procedures.--
                    ``(A) In general.--
                            ``(i) Regulations.--Any importer that 
                        claims preferential treatment under paragraph 
                        (2) or (3) shall comply with customs procedures 
                        similar in all material respects to the 
                        requirements of Article 502(1) of the NAFTA as 
                        implemented pursuant to United States law, in 
                        accordance with regulations promulgated by the 
                        Secretary of the Treasury.
                            ``(ii) Determination.--
                                    ``(I) In general.--In order to 
                                qualify for the preferential treatment 
                                under paragraph (2) or (3) and for a 
                                Certificate of Origin to be valid with 
                                respect to any article for which such 
                                treatment is claimed, there shall be in 
                                effect a determination by the President 
                                that each country described in 
                                subclause (II)--
                                            ``(aa) has implemented and 
                                        follows, or
                                            ``(bb) is making 
                                        substantial progress toward 
                                        implementing and following,
                                procedures and requirements similar in 
                                all material respects to the relevant 
                                procedures and requirements under 
                                chapter 5 of the NAFTA.
                                    ``(II) Country described.--A 
                                country is described in this subclause 
                                if it is a CBTEA beneficiary country--
                                            ``(aa) from which the 
                                        article is exported, or
                                            ``(bb) in which materials 
                                        used in the production of the 
                                        article originate or in which 
                                        the article or such materials 
                                        undergo production that 
                                        contributes to a claim that the 
                                        article is eligible for 
                                        preferential treatment.
                    ``(B) Certificate of origin.--The Certificate of 
                Origin that otherwise would be required pursuant to the 
                provisions of subparagraph (A) shall not be required in 
                the case of an article imported under paragraph (2) or 
                (3) if such Certificate of Origin would not be required 
                under Article 503 of the NAFTA (as implemented pursuant 
                to United States law), if the article were imported 
                from Mexico.
            ``(5) Definitions and special rules.--For purposes of this 
        subsection--
                    ``(A) Annex.--The term `the Annex' means Annex 300-
                B of the NAFTA.
                    ``(B) CBTEA beneficiary country.--The term `CBTEA 
                beneficiary country' means any `beneficiary country', 
                as defined by section 212(a)(1)(A) of this title, which 
                the President designates as a CBTEA beneficiary 
                country, taking into account the following criteria:
                            ``(i) Whether a beneficiary country has 
                        demonstrated a commitment to--
                                    ``(I) undertake its obligations 
                                under the WTO on or ahead of schedule;
                                    ``(II) participate in negotiations 
                                toward the completion of the FTAA or a 
                                comparable trade agreement; and
                                    ``(III) undertake other steps 
                                necessary for that country to become a 
                                party to the FTAA or a comparable trade 
                                agreement.
                            ``(ii) The extent to which the country 
                        follows accepted rules of international trade 
                        provided for under the agreements listed in 
                        section 101(d) of the Uruguay Round Agreements 
                        Act.
                            ``(iii) The extent to which the country 
                        provides protection of intellectual property 
                        rights--
                                    ``(I) in accordance with standards 
                                established in the Agreement on Trade-
                                Related Aspects of Intellectual 
                                Property Rights described in section 
                                101(d)(15) of the Uruguay Round 
                                Agreements Act;
                                    ``(II) in accordance with standards 
                                established in chapter 17 of the NAFTA; 
                                and
                                    ``(III) by granting the holders of 
                                copyrights the ability to control the 
                                importation and sale of products that 
                                embody copyrighted works, extending the 
                                period set forth in Article 1711(6) of 
                                NAFTA for protecting test data for 
                                agricultural chemicals to 10 years, 
                                protecting trademarks regardless of 
                                their subsequent designation as 
                                geographic indications, and providing 
                                enforcement against the importation of 
                                infringing products at the border.
                            ``(iv) The extent to which the country 
                        provides protections to investors and 
                        investments of the United States substantially 
                        equivalent to those set forth in chapter 11 of 
                        the NAFTA.
                            ``(v) The extent to which the country 
                        provides the United States and other WTO 
                        members nondiscriminatory, equitable, and 
                        reasonable market access with respect to the 
                        products for which benefits are provided under 
                        paragraphs (2) and (3), and in other relevant 
                        product sectors as determined by the President.
                            ``(vi) The extent to which the country 
                        provides internationally recognized worker 
                        rights, including--
                                    ``(I) the right of association,
                                    ``(II) the right to organize and 
                                bargain collectively,
                                    ``(III) prohibition on the use of 
                                any form of coerced or compulsory 
                                labor,
                                    ``(IV) a minimum age for the 
                                employment of children, and
                                    ``(V) acceptable conditions of work 
                                with respect to minimum wages, hours of 
                                work, and occupational safety and 
                                health;
                            ``(vii) Whether the country has met the 
                        counter-narcotics certification criteria set 
                        forth in section 490 of the Foreign Assistance 
                        Act of 1961 (22 U.S.C. 2291j) for eligibility 
                        for United States assistance.
                            ``(viii) The extent to which the country 
                        becomes a party to and implements the Inter-
                        American Convention Against Corruption, and 
                        becomes party to a convention regarding the 
                        extradition of its nationals.
                            ``(ix) The extent to which the country--
                                    ``(I) supports the multilateral and 
                                regional objectives of the United 
                                States with respect to government 
                                procurement, including the negotiation 
                                of government procurement provisions as 
                                part of the FTAA and conclusion of a 
                                WTO transparency agreement as provided 
                                in the declaration of the WTO 
                                Ministerial Conference held in 
                                Singapore on December 9 through 13, 
                                1996; and
                                    ``(II) applies transparent and 
                                competitive procedures in government 
                                procurement equivalent to those 
                                contained in the WTO Agreement on 
                                Government Procurement (described in 
                                section 101(d)(17) of the Uruguay Round 
                                Agreements Act).
                            ``(x) The extent to which the country 
                        follows the rules on customs valuation set 
                        forth in the WTO Agreement on Implementation of 
                        Article VII of the GATT 1994 (described in 
                        section 101(d)(8) of the Uruguay Round 
                        Agreements Act).
                            ``(xi) The extent to which the country 
                        affords to products of the United States which 
                        the President determines to be of commercial 
                        importance to the United States with respect to 
                        such country, and on a nondiscriminatory basis 
                        to like products of other WTO members, tariff 
                        treatment that is no less favorable than the 
                        most favorable tariff treatment provided by the 
                        country to any other country pursuant to any 
                        free trade agreement to which such country is a 
                        party, other than the Central American Common 
                        Market or the Caribbean Community and Common 
                        Market.
                    ``(C) CBTEA originating good.--
                            ``(i) In general.--The term `CBTEA 
                        originating good' means a good that meets the 
                        rules of origin for a good set forth in chapter 
                        4 of the NAFTA as implemented pursuant to 
                        United States law.
                            ``(ii) Application of chapter 4.--In 
                        applying chapter 4 with respect to a CBTEA 
                        beneficiary country for purposes of this 
                        subsection--
                                    ``(I) no country other than the 
                                United States and a CBTEA beneficiary 
                                country may be treated as being a party 
                                to the NAFTA;
                                    ``(II) any reference to trade 
                                between the United States and Mexico 
                                shall be deemed to refer to trade 
                                between the United States and a CBTEA 
                                beneficiary country;
                                    ``(III) any reference to a party 
                                shall be deemed to refer to a CBTEA 
                                beneficiary country or the United 
                                States; and
                                    ``(IV) any reference to parties 
                                shall be deemed to refer to any 
                                combination of CBTEA beneficiary 
                                countries or to the United States and a 
                                CBTEA beneficiary country (or any 
                                combination thereof).
                    ``(D) Transition period.--The term `transition 
                period' means, with respect to a CBTEA beneficiary 
                country, the period that begins on October 1, 2000, and 
                ends on the earlier of--
                            ``(i) December 31, 2004, or
                            ``(ii) the date on which the FTAA or a 
                        comparable trade agreement enters into force 
                        with respect to the United States and the CBTEA 
                        beneficiary country.
                    ``(E) CBTEA.--The term `CBTEA' means the United 
                States-Caribbean Basin Trade Enhancement Act.
                    ``(F) FTAA.--The term `FTAA' means the Free Trade 
                Area of the Americas.''.
    (b) Determination Regarding Retention of Designation.--Section 
212(e) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(e)) 
is amended--
            (1) in paragraph (1)--
                    (A) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively;
                    (B) by inserting ``(A)'' after ``(1)'';
                    (C) by striking ``would be barred'' and all that 
                follows through the end period and inserting: ``no 
                longer satisfies one or more of the conditions for 
                designation as a beneficiary country set forth in 
                subsection (b) or such country fails adequately to meet 
                one or more of the criteria set forth in subsection 
                (c).''; and
                    (D) by adding at the end the following:
                    ``(B) The President may, after the requirements of 
                subsection (a)(2) and paragraph (2) have been met--
                            ``(i) withdraw or suspend the designation 
                        of any country as a CBTEA beneficiary country, 
                        or
                            ``(ii) withdraw, suspend, or limit the 
                        application of preferential treatment under 
                        section 213(b) (2) and (3) to any article of 
                        any country, if, after such designation, the 
                        President determines that as a result of 
                        changed circumstances, the performance of such 
                        country is not satisfactory under the criteria 
                        set forth in section 213(b)(5)(B).''; and
            (2) by adding after paragraph (2) the following new 
        paragraph:
            ``(3) If preferential treatment under section 213(b) (2) 
        and (3) is withdrawn, suspended, or limited with respect to a 
        CBTEA beneficiary country, such country shall not be deemed to 
        be a `party' for the purposes of applying section 213(b)(5)(C) 
        to imports of articles for which preferential treatment has 
        been withdrawn, suspended, or limited with respect to such 
        country.''.
    (c) Reporting Requirements.--
            (1) Section 212(f) of the Caribbean Basin Economic Recovery 
        Act (19 U.S.C. 2702(f)) is amended to read as follows:
    ``(f) Reporting Requirements.--
            ``(1) In general.--Not later than December 31, 2001, and 
        every 2 years thereafter during the period this title is in 
        effect, the United States Trade Representative shall submit to 
        Congress a report regarding the operation of this title, 
        including--
                    ``(A) with respect to subsections (b) and (c), the 
                results of a general review of beneficiary countries 
                based on the considerations described in such 
                subsections; and
                    ``(B) the performance of each beneficiary country 
                or CBTEA beneficiary country, as the case may be, under 
                the criteria set forth in section 213(b)(5)(B)(ii).
            ``(2) Public comment.--Before submitting the report 
        described in paragraph (1), the United States Trade 
        Representative shall publish a notice in the Federal Register 
        requesting public comments on whether beneficiary countries are 
        meeting the criteria listed in section 213(b)(5)(B)(i), and on 
        the performance of each beneficiary country or CBTEA 
        beneficiary country, as the case may be, with respect to the 
        criteria listed in section 213(b)(5)(B)(ii).''.
            (2) Section 203(f) of the Andean Trade Preference Act (19 
        U.S.C. 3202(f)) is amended--
                    (A) by striking ``Triennial Report'' in the heading 
                and inserting ``Report''; and
                    (B) by striking ``On or before'' and all that 
                follows through ``enactment of this title'' and 
                inserting ``Not later than January 31, 2001''.
    (d) International Trade Commission Reports.--
            (1) Section 215(a) of the Caribbean Basin Economic Recovery 
        Act (19 U.S.C. 2704(a)) is amended to read as follows:
    ``(a) Reporting Requirement.--
            ``(1) In general.--The United States International Trade 
        Commission (in this section referred to as the `Commission') 
        shall submit to Congress and the President biennial reports 
        regarding the economic impact of this title on United States 
        industries and consumers and on the economy of the beneficiary 
        countries.
            ``(2) First report.--The first report shall be submitted 
        not later than September 30, 2001.
            ``(3) Treatment of puerto rico, etc.--For purposes of this 
        section, industries in the Commonwealth of Puerto Rico and the 
        insular possessions of the United States are considered to be 
        United States industries.''.
            (2) Section 206(a) of the Andean Trade Preference Act (19 
        U.S.C. 3204(a)) is amended to read as follows:
    ``(a) Reporting Requirements.--
            ``(1) In general.--The United States International Trade 
        Commission (in this section referred to as the `Commission') 
        shall submit to Congress and the President biennial reports 
        regarding the economic impact of this title on United States 
        industries and consumers, and, in conjunction with other 
        agencies, the effectiveness of this title in promoting drug-
        related crop eradication and crop substitution efforts of the 
        beneficiary countries.
            ``(2) Submission.--During the period that this title is in 
        effect, the report required by paragraph (1) shall be submitted 
        on December 31 of each year that the report required by section 
        215 of the Caribbean Basin Economic Recovery Act is not 
        submitted.
            ``(3) Treatment of puerto rico, etc.--For purposes of this 
        section, industries in the Commonwealth of Puerto Rico and the 
        insular possessions of the United States are considered to be 
        United States industries.''.
    (e) Technical and Conforming Amendments.--
            (1) In general.--
                    (A) Section 211 of the Caribbean Basin Economic 
                Recovery Act (19 U.S.C. 2701) is amended by inserting 
                ``(or other preferential treatment)'' after 
                ``treatment''.
                    (B) Section 213(a)(1) of the Caribbean Basin 
                Economic Recovery Act (19 U.S.C. 2703(a)(1)) is amended 
                by inserting ``and except as provided in subsection (b) 
                (2) and (3),'' after ``Tax Reform Act of 1986,''.
            (2) Definitions.--Section 212(a)(1) of the Caribbean Basin 
        Economic Recovery Act (19 U.S.C. 2702(a)(1)) is amended by 
        adding at the end the following new subparagraphs:
                    ``(D) The term `NAFTA' means the North American 
                Free Trade Agreement entered into between the United 
                States, Mexico, and Canada on December 17, 1992.
                    ``(E) The terms `WTO' and `WTO member' have the 
                meanings given those terms in section 2 of the Uruguay 
                Round Agreements Act (19 U.S.C. 3501).''.

SEC. 212. ADEQUATE AND EFFECTIVE PROTECTION FOR INTELLECTUAL PROPERTY 
              RIGHTS.

    Section 212(c) of the Caribbean Basin Economic Recovery Act (19 
U.S.C. 2702(c)) is amended by adding at the end the following flush 
sentence:
``Notwithstanding any other provision of law, the President may 
determine that a country is not providing adequate and effective 
protection of intellectual property rights under paragraph (9), even if 
the country is in compliance with the country's obligations under the 
Agreement on Trade-Related Aspects of Intellectual Property Rights 
described in section 101(d)(15) of the Uruguay Round Agreements Act (19 
U.S.C. 3511(d)(15)).''.

           Subtitle C--Cover Over of Tax on Distilled Spirits

SEC. 221. SUSPENSION OF LIMITATION ON COVER OVER OF TAX ON DISTILLED 
              SPIRITS.

    (a) In General.--Section 7652(f) of the Internal Revenue Code of 
1986 (relating to limitation on cover over of tax on distilled spirits) 
is amended by adding at the end the following new flush sentence:
``The preceding sentence shall not apply to articles that are tax-
determined after June 30, 1999, and before October 1, 1999.''
    (b) Effective Date.--
            (1) In general.--The amendment made by this section shall 
        apply to articles that are tax-determined after June 30, 1999.
            (2) Special rule.--
                    (A) In general.--The treasury of Puerto Rico shall 
                make a Conservation Trust Fund transfer within 30 days 
                after the date of each cover over payment (made to such 
                treasury under section 7652(e) of the Internal Revenue 
                Code of 1986) to which section 7652(f) of such Code 
                does not apply by reason of the last sentence thereof.
                    (B) Conservation trust fund transfer.--
                            (i) In general.--For purposes of this 
                        paragraph, the term ``Conservation Trust Fund 
                        transfer'' means a transfer to the Puerto Rico 
                        Conservation Trust Fund of an amount equal to 
                        50 cents per proof gallon of the taxes imposed 
                        under section 5001 or section 7652 of such Code 
                        on distilled spirits that are covered over to 
                        the treasury of Puerto Rico under section 
                        7652(e) of such Code.
                            (ii) Treatment of transfer.--Each 
                        Conservation Trust Fund transfer shall be 
                        treated as principal for an endowment, the 
                        income from which to be available for use by 
                        the Puerto Rico Conservation Trust Fund for the 
                        purposes for which the Trust Fund was 
                        established.
                            (iii) Result of nontransfer.--
                                    (I) In general.--Upon notification 
                                by the Secretary of the Interior that a 
                                Conservation Trust Fund transfer has 
                                not been made by the treasury of Puerto 
                                Rico as required by subparagraph (A), 
                                the Secretary of the Treasury shall, 
                                except as provided in subclause (II), 
                                deduct and withhold from the next cover 
                                over payment to be made to the treasury 
                                of Puerto Rico under section 7652(e) of 
                                such Code an amount equal to the 
                                appropriate Conservation Trust Fund 
                                transfer and interest thereon at the 
                                underpayment rate established under 
                                section 6621 of such Code as of the due 
                                date of such transfer. The Secretary of 
                                the Treasury shall transfer such amount 
                                deducted and withheld, and the interest 
                                thereon, directly to the Puerto Rico 
                                Conservation Trust Fund.
                                    (II) Good cause exception.--If the 
                                Secretary of the Interior finds, after 
                                consultation with the Governor of 
                                Puerto Rico, that the failure by the 
                                treasury of Puerto Rico to make a 
                                required transfer was for good cause, 
                                and notifies the Secretary of the 
                                Treasury of the finding of such good 
                                cause before the due date of the next 
                                cover over payment following the 
                                notification of nontransfer, then the 
                                Secretary of the Treasury shall not 
                                deduct the amount of such nontransfer 
                                from any cover over payment.
                    (C) Puerto rico conservation trust fund.--For 
                purposes of this paragraph, the term ``Puerto Rico 
                Conservation Trust Fund'' means the fund established 
                pursuant to a Memorandum of Understanding between the 
                United States Department of the Interior and the 
                Commonwealth of Puerto Rico, dated December 24, 1968.

              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

SEC. 301. EXTENSION OF DUTY-FREE TREATMENT UNDER GENERALIZED SYSTEM OF 
              PREFERENCES.

    (a) In General.--Section 505 of the Trade Act of 1974 (19 U.S.C. 
2465) is amended by striking ``June 30, 1999'' and inserting ``June 30, 
2004''.
    (b) Effective Date.--
            (1) In general.--The amendment made by this section applies 
        to articles entered on or after the date of the enactment of 
        this Act.
            (2) Retroactive application for certain liquidations and 
        reliquidations.--
                    (A) General rule.--Notwithstanding section 514 of 
                the Tariff Act of 1930 or any other provision of law, 
                and subject to paragraph (3), any entry--
                            (i) of an article to which duty-free 
                        treatment under title V of the Trade Act of 
                        1974 would have applied if such entry had been 
                        made on June 30, 1999, and
                            (ii) that was made--
                                    (I) after June 30, 1999, and
                                    (II) before the date of enactment 
                                of this Act,
                shall be liquidated or reliquidated as free of duty, 
                and the Secretary of the Treasury shall refund any duty 
                paid with respect to such entry.
                    (B) Entry.--As used in this paragraph, the term 
                ``entry'' includes a withdrawal from warehouse for 
                consumption.
            (3) Requests.--Liquidation or reliquidation may be made 
        under paragraph (2) with respect to an entry only if a request 
        therefore is filed with the Customs Service, within 180 days 
        after the date of enactment of this Act, that contains 
        sufficient information to enable the Customs Service--
                    (A) to locate the entry, or
                    (B) to reconstruct the entry if it cannot be 
                located.

SEC. 302. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS.

    (a) In General.--Section 484 of the Tariff Act of 1930 (19 U.S.C. 
1484) is amended by adding at the end the following new subsection:
    ``(i) Special Rule For Foreign Trade Zone Operations.--
            ``(1) In general.--Notwithstanding any other provision of 
        law and except as provided in paragraph (3), all merchandise 
        (including merchandise of different classes, types, and 
        categories), withdrawn from a foreign trade zone during any 7-
        day period, shall, at the option of the operator or user of the 
        zone, be the subject of a single estimated entry or release 
        filed on or before the first day of the 7-day period in which 
        the merchandise is to be withdrawn from the zone. The estimated 
        entry or release shall be treated as a single entry and a 
        single release of merchandise for purposes of section 
        13031(a)(9)(A) of the Consolidated Omnibus Budget 
        Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)(A)) and all fee 
        exclusions and limitations of such section 13031 shall apply, 
        including the maximum and minimum fee amounts provided for 
        under subsection (b)(8)(A)(i) of such section. The entry 
        summary for the estimated entry or release shall cover only the 
        merchandise actually withdrawn from the foreign trade zone 
        during the 7-day period.
            ``(2) Other requirements.-- The Secretary of the Treasury 
        may require that the operator or user of the zone--
                    ``(A) use an electronic data interchange approved 
                by the Customs Service--
                            ``(i) to file the entries described in 
                        paragraph (1); and
                            ``(ii) to pay the applicable duties, fees, 
                        and taxes with respect to the entries; and
                    ``(B) satisfy the Customs Service that accounting, 
                transportation, and other controls over the merchandise 
                are adequate to protect the revenue and meet the 
                requirements of other Federal agencies.
            ``(3) Exception.--The provisions of paragraph (1) shall not 
        apply to merchandise the entry of which is prohibited by law or 
        merchandise for which the filing of an entry summary is 
        required before the merchandise is released from customs 
        custody.
            ``(4) Foreign trade zone; zone.--In this subsection, the 
        terms `foreign trade zone' and `zone' mean a zone established 
        pursuant to the Act of June 18, 1934, commonly known as the 
        Foreign Trade Zones Act (19 U.S.C. 81a et seq.).''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date that is 60 days after the date of enactment of this 
Act.

                 TITLE IV--TRADE ADJUSTMENT ASSISTANCE

SEC. 401. TRADE ADJUSTMENT ASSISTANCE.

    (a) Assistance for Workers.--Section 245 of the Trade Act of 1974 
(19 U.S.C. 2317) is amended--
            (1) in subsection (a), by striking ``June 30, 1999'' and 
        inserting ``September 30, 2001''; and
            (2) in subsection (b), by striking ``June 30, 1999'' and 
        inserting ``September 30, 2001''.
    (b) NAFTA Transitional Program.--Section 250(d)(2) of the Trade Act 
of 1974 (19 U.S.C. 2331(d)(2)) is amended by striking ``the period 
beginning October 1, 1998, and ending June 30, 1999, shall not exceed 
$15,000,000'' and inserting ``the period beginning October 1, 1998, and 
ending September 30, 2001, shall not exceed $30,000,000 for any fiscal 
year''.
    (c) Adjustment for Firms.--Section 256(b) of the Trade Act of 1974 
(19 U.S.C. 2346(b)) is amended by striking ``June 30, 1999'' and 
inserting ``September 30, 2001''.
    (d) Termination.--Section 285(c) of the Trade Act of 1974 (19 
U.S.C. 2271 note preceding) is amended by striking ``June 30, 1999'' 
each place it appears and inserting ``September 30, 2001''.
    (e) Effective Date.--The amendments made by this section take 
effect on July 1, 1999.

SEC. 402. TRADE ADJUSTMENT ASSISTANCE FOR TEXTILE AND APPAREL WORKERS.

    Notwithstanding any other provision of law, workers in textile and 
apparel firms who lose their jobs or are threatened with job loss as a 
result of either (1) a decrease in the firm's sales or production; or 
(2) a firm's plant or facility closure or relocation, shall be 
certified by the Secretary of Labor as eligible to receive adjustment 
assistance at the same level of benefits as workers certified under 
subchapter D of chapter 2 of title II of the Trade Act of 1974 not 
later than 30 days after the date a petition for certification is filed 
under such title II.

                      TITLE V--REVENUE PROVISIONS

SEC. 501. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF INSTALLMENT 
              METHOD FOR ACCRUAL METHOD TAXPAYERS.

    (a) Repeal of Installment Method for Accrual Basis Taxpayers.--
            (1) In general.--Subsection (a) of section 453 of the 
        Internal Revenue Code of 1986 (relating to installment method) 
        is amended to read as follows:
    ``(a) Use of Installment Method.--
            ``(1) In general.--Except as otherwise provided in this 
        section, income from an installment sale shall be taken into 
        account for purposes of this title under the installment 
        method.
            ``(2) Accrual method taxpayer.--The installment method 
        shall not apply to income from an installment sale if such 
        income would be reported under an accrual method of accounting 
        without regard to this section. The preceding sentence shall 
        not apply to a disposition described in subparagraph (A) or (B) 
        of subsection (l)(2).''.
            (2) Conforming amendments.--Sections 453(d)(1), 453(i)(1), 
        and 453(k) are each amended by striking ``(a)'' each place it 
        appears and inserting ``(a)(1)''.
    (b) Modification of Pledge Rules.--Paragraph (4) of section 453A(d) 
of the Internal Revenue Code of 1986 (relating to pledges, etc., of 
installment obligations) is amended by adding at the end the following: 
``A payment shall be treated as directly secured by an interest in an 
installment obligation to the extent an arrangement allows the taxpayer 
to satisfy all or a portion of the indebtedness with the installment 
obligation.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to sales or other dispositions occurring on or after the date of 
the enactment of this Act.

SEC. 502. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10 OR MORE EMPLOYER 
              PLANS.

    (a) Benefits to Which Exception Applies.--Section 419A(f)(6)(A) of 
the Internal Revenue Code of 1986 (relating to exception for 10 or more 
employer plans) is amended to read as follows:
                    ``(A) In general.--This subpart shall not apply to 
                a welfare benefit fund which is part of a 10 or more 
                employer plan if the only benefits provided through the 
                fund are one or more of the following:
                            ``(i) Medical benefits.
                            ``(ii) Disability benefits.
                            ``(iii) Group term life insurance benefits 
                        which do not provide directly or indirectly for 
                        any cash surrender value or other money that 
                        can be paid, assigned, borrowed, or pledged for 
                        collateral for a loan.
                The preceding sentence shall not apply to any plan 
                which maintains experience-rating arrangements with 
                respect to individual employers.''.
    (b) Limitation on Use of Amounts for Other Purposes.--Section 
4976(b) of the Internal Revenue Code of 1986 (defining disqualified 
benefit) is amended by adding at the end the following new paragraph:
            ``(5) Special rule for 10 or more employer plans exempted 
        from prefunding limits.--For purposes of paragraph (1)(C), if--
                    ``(A) subpart D of part I of subchapter D of 
                chapter 1 does not apply by reason of section 
                419A(f)(6) to contributions to provide one or more 
                welfare benefits through a welfare benefit fund under a 
                10 or more employer plan, and
                    ``(B) any portion of the welfare benefit fund 
                attributable to such contributions is used for a 
                purpose other than that for which the contributions 
                were made,
        then such portion shall be treated as reverting to the benefit 
        of the employers maintaining the fund.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions paid or accrued after June 9, 1999, in taxable 
years ending after such date.

SEC. 503. TREATMENT OF GAIN FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

    (a) In General.--Part IV of subchapter P of chapter 1 of the 
Internal Revenue Code of 1986 (relating to special rules for 
determining capital gains and losses) is amended by inserting after 
section 1259 the following new section:

``SEC. 1260. GAINS FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

    ``(a) In General.--If the taxpayer has gain from a constructive 
ownership transaction with respect to any financial asset and such gain 
would (without regard to this section) be treated as a long-term 
capital gain--
            ``(1) such gain shall be treated as ordinary income to the 
        extent that such gain exceeds the net underlying long-term 
        capital gain, and
            ``(2) to the extent such gain is treated as a long-term 
        capital gain after the application of paragraph (1), the 
        determination of the capital gain rate (or rates) applicable to 
        such gain under section 1(h) shall be determined on the basis 
        of the respective rate (or rates) that would have been 
        applicable to the net underlying long-term capital gain.
    ``(b) Interest Charge on Deferral of Gain Recognition.--
            ``(1) In general.--If any gain is treated as ordinary 
        income for any taxable year by reason of subsection (a)(1), the 
        tax imposed by this chapter for such taxable year shall be 
        increased by the amount of interest determined under paragraph 
        (2) with respect to each prior taxable year during any portion 
        of which the constructive ownership transaction was open. Any 
        amount payable under this paragraph shall be taken into account 
        in computing the amount of any deduction allowable to the 
        taxpayer for interest paid or accrued during such taxable year.
            ``(2) Amount of interest.--The amount of interest 
        determined under this paragraph with respect to a prior taxable 
        year is the amount of interest which would have been imposed 
        under section 6601 on the underpayment of tax for such year 
        which would have resulted if the gain (which is treated as 
        ordinary income by reason of subsection (a)(1)) had been 
        included in gross income in the taxable years in which it 
        accrued (determined by treating the income as accruing at a 
        constant rate equal to the applicable Federal rate as in effect 
        on the day the transaction closed). The period during which 
        such interest shall accrue shall end on the due date (without 
        extensions) for the return of tax imposed by this chapter for 
        the taxable year in which such transaction closed.
            ``(3) Applicable federal rate.--For purposes of paragraph 
        (2), the applicable Federal rate is the applicable Federal rate 
        determined under 1274(d) (compounded semiannually) which would 
        apply to a debt instrument with a term equal to the period the 
        transaction was open.
            ``(4) No credits against increase in tax.--Any increase in 
        tax under paragraph (1) shall not be treated as tax imposed by 
        this chapter for purposes of determining--
                    ``(A) the amount of any credit allowable under this 
                chapter, or
                    ``(B) the amount of the tax imposed by section 55.
    ``(c) Financial Asset.--For purposes of this section--
            ``(1) In general.--The term `financial asset' means--
                    ``(A) any equity interest in any pass-thru entity, 
                and
                    ``(B) to the extent provided in regulations--
                            ``(i) any debt instrument, and
                            ``(ii) any stock in a corporation which is 
                        not a pass-thru entity.
            ``(2) Pass-thru entity.--For purposes of paragraph (1), the 
        term `pass-thru entity' means--
                    ``(A) a regulated investment company,
                    ``(B) a real estate investment trust,
                    ``(C) an S corporation,
                    ``(D) a partnership,
                    ``(E) a trust,
                    ``(F) a common trust fund,
                    ``(G) a passive foreign investment company (as 
                defined in section 1297 without regard to subsection 
                (e) thereof),
                    ``(H) a foreign personal holding company,
                    ``(I) a foreign investment company (as defined in 
                section 1246(b)), and
                    ``(J) a REMIC.
    ``(d) Constructive Ownership Transaction.--For purposes of this 
section--
            ``(1) In general.--The taxpayer shall be treated as having 
        entered into a constructive ownership transaction with respect 
        to any financial asset if the taxpayer--
                    ``(A) holds a long position under a notional 
                principal contract with respect to the financial asset,
                    ``(B) enters into a forward or futures contract to 
                acquire the financial asset,
                    ``(C) is the holder of a call option, and is the 
                grantor of a put option, with respect to the financial 
                asset and such options have substantially equal strike 
                prices and substantially contemporaneous maturity 
                dates, or
                    ``(D) to the extent provided in regulations 
                prescribed by the Secretary, enters into one or more 
                other transactions (or acquires one or more positions) 
                that have substantially the same effect as a 
                transaction described in any of the preceding 
                subparagraphs.
            ``(2) Exception for positions which are marked to market.--
        This section shall not apply to any constructive ownership 
        transaction if all of the positions which are part of such 
        transaction are marked to market under any provision of this 
        title or the regulations thereunder.
            ``(3) Long position under notional principal contract.--A 
        person shall be treated as holding a long position under a 
        notional principal contract with respect to any financial asset 
        if such person--
                    ``(A) has the right to be paid (or receive credit 
                for) all or substantially all of the investment yield 
                (including appreciation) on such financial asset for a 
                specified period, and
                    ``(B) is obligated to reimburse (or provide credit 
                for) all or substantially all of any decline in the 
                value of such financial asset.
            ``(4) Forward contract.--The term `forward contract' means 
        any contract to acquire in the future (or provide or receive 
        credit for the future value of) any financial asset.
    ``(e) Net Underlying Long-Term Capital Gain.--For purposes of this 
section, in the case of any constructive ownership transaction with 
respect to any financial asset, the term `net underlying long-term 
capital gain' means the aggregate net capital gain that the taxpayer 
would have had if--
            ``(1) the financial asset had been acquired for fair market 
        value on the date such transaction was opened and sold for fair 
        market value on the date such transaction was closed, and
            ``(2) only gains and losses that would have resulted from 
        the deemed ownership under paragraph (1) were taken into 
        account.
The amount of the net underlying long-term capital gain with respect to 
any financial asset shall be treated as zero unless the amount thereof 
is established by clear and convincing evidence.
    ``(f) Special Rule Where Taxpayer Takes Delivery.--Except as 
provided in regulations prescribed by the Secretary, if a constructive 
ownership transaction is closed by reason of taking delivery, this 
section shall be applied as if the taxpayer had sold all the contracts, 
options, or other positions which are part of such transaction for fair 
market value on the closing date. The amount of gain recognized under 
the preceding sentence shall not exceed the amount of gain treated as 
ordinary income under subsection (a). Proper adjustments shall be made 
in the amount of any gain or loss subsequently realized for gain 
recognized and treated as ordinary income under this subsection.
    ``(g) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations--
            ``(1) to permit taxpayers to mark to market constructive 
        ownership transactions in lieu of applying this section, and
            ``(2) to exclude certain forward contracts which do not 
        convey substantially all of the economic return with respect to 
        a financial asset.''.
    (b) Clerical Amendment.--The table of sections for part IV of 
subchapter P of chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

                              ``Sec. 1260. Gains from constructive 
                                        ownership transactions.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transactions entered into after July 11, 1999.

SEC. 504. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD OF 
              ACCOUNTING.

    (a) In General.--Section 448(d)(5) of the Internal Revenue Code of 
1986 (relating to special rule for services) is amended--
            (1) by inserting ``in fields described in paragraph 
        (2)(A)'' after ``services by such person'', and
            (2) by inserting ``certain personal'' before ``services'' 
        in the heading.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years ending after the date of the enactment 
        of this Act.
            (2) Change in method of accounting.--In the case of any 
        taxpayer required by the amendments made by this section to 
        change its method of accounting for its first taxable year 
        ending after the date of the enactment of this Act--
                    (A) such change shall be treated as initiated by 
                the taxpayer,
                    (B) such change shall be treated as made with the 
                consent of the Secretary of the Treasury, and
                    (C) the net amount of the adjustments required to 
                be taken into account by the taxpayer under section 481 
                of the Internal Revenue Code of 1986 shall be taken 
                into account over a period (not greater than 4 taxable 
                years) beginning with such first taxable year.

SEC. 505. ALLOCATION OF BASIS ON TRANSFERS OF INTANGIBLES IN CERTAIN 
              NONRECOGNITION TRANSACTIONS.

    (a) Transfers to Corporations.--Section 351 of the Internal Revenue 
Code of 1986 (relating to transfer to corporation controlled by 
transferor) is amended by redesignating subsection (h) as subsection 
(i) and by inserting after subsection (g) the following new subsection:
    ``(h) Treatment of Transfers of Intangible Property.--
            ``(1) Transfers of less than all substantial rights.
                    ``(A) In general.--A transfer of an interest in 
                intangible property (as defined in section 
                936(h)(3)(B)) shall be treated under this section as a 
                transfer of property even if the transfer is of less 
                than all of the substantial rights of the transferor in 
                the property.
                    ``(B) Allocation of basis.--In the case of a 
                transfer of less than all of the substantial rights of 
                the transferor in the intangible property, the 
                transferor's basis immediately before the transfer 
                shall be allocated among the rights retained by the 
                transferor and the rights transferred on the basis of 
                their respective fair market values.
            ``(2) Nonrecognition not to apply to intangible property 
        developed for transferee.--This section shall not apply to a 
        transfer of intangible property developed by the transferor or 
        any related person if such development was pursuant to an 
        arrangement with the transferee.''.
    (b) Transfers to Partnerships.--Subsection (d) of section 721 of 
the Internal Revenue Code of 1986 is amended to read as follows:
    ``(d) Transfers of Intangible Property.--
            ``(1) In general.--Rules similar to the rules of section 
        351(h) shall apply for purposes of this section.
            ``(2) Transfers to foreign partnerships.--For regulatory 
        authority to treat intangibles transferred to a partnership as 
        sold, see section 367(d)(3).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to transfers on or after the date of the enactment of this Act.

SEC. 506. INCREASE IN ELECTIVE WITHHOLDING RATE FOR NONPERIODIC 
              DISTRIBUTIONS FROM DEFERRED COMPENSATION PLANS.

    (a) In General.--Section 3405(b)(1) of the Internal Revenue Code of 
1986 (relating to withholding) is amended by striking ``10 percent'' 
and inserting ``15 percent''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to distributions after December 31, 2000.

           TITLE VI--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

            Subtitle A--Amendments to the Trade Act of 1974

SEC. 601. SHORT TITLE.

    This title may be cited as the ``Trade Adjustment Assistance for 
Farmers Act''.

SEC. 602. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.

    (a) In General.--Title II of the Trade Act of 1974 (19 U.S.C. 2251 
et seq.) is amended by adding at the end the following new chapter:

             ``CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS

``SEC. 291. DEFINITIONS.

    ``In this chapter:
            ``(1) Agricultural commodity producer.--The term 
        `agricultural commodity producer' means any person who is 
        engaged in the production and sale of an agricultural commodity 
        in the United States and who owns or shares the ownership and 
        risk of loss of the agricultural commodity.
            ``(2) Agricultural commodity.--The term `agricultural 
        commodity' means any agricultural commodity (including 
        livestock, fish, or harvested seafood) in its raw or natural 
        state.
            ``(3) Duly authorized representative.--The term `duly 
        authorized representative' means an association of agricultural 
        commodity producers.
            ``(4) National average price.--The term `national average 
        price' means the national average price paid to an agricultural 
        commodity producer for an agricultural commodity in a marketing 
        year as determined by the Secretary of Agriculture.
            ``(5) Contributed importantly.--
                    ``(A) In general.--The term `contributed 
                importantly' means a cause which is important but not 
                necessarily more important than any other cause.
                    ``(B) Determination of contributed importantly.--
                The determination of whether imports of articles like 
                or directly competitive with an agricultural commodity 
                with respect to which the petition under this chapter 
                was filed contributed importantly to a decline in the 
                price of the agricultural commodity shall be made by 
                the Secretary of Agriculture.
            ``(6) Secretary.--The term `Secretary' means the Secretary 
        of Agriculture.

``SEC. 292. PETITIONS; GROUP ELIGIBILITY.

    ``(a) In General.--A petition for a certification of eligibility to 
apply for adjustment assistance under this chapter may be filed with 
the Secretary by a group of agricultural commodity producers or by 
their duly authorized representative. Upon receipt of the petition, the 
Secretary shall promptly publish notice in the Federal Register that 
the Secretary has received the petition and initiated an investigation.
    ``(b) Hearings.--If the petitioner, or any other person found by 
the Secretary to have a substantial interest in the proceedings, 
submits not later than 10 days after the date of the Secretary's 
publication under subsection (a) a request for a hearing, the Secretary 
shall provide for a public hearing and afford such interested persons 
an opportunity to be present, to produce evidence, and to be heard.
    ``(c) Group Eligibility Requirements.--The Secretary shall certify 
a group of agricultural commodity producers as eligible to apply for 
adjustment assistance under this chapter if the Secretary determines--
            ``(1) that the national average price for the agricultural 
        commodity, or a class of goods within the agricultural 
        commodity, produced by the group for the most recent marketing 
        year for which the national average price is available is less 
        than 80 percent of the average of the national average price 
        for such agricultural commodity, or such class of goods, for 
        the 5 marketing years preceding the most recent marketing year; 
        and
            ``(2) that either--
                    ``(A) increases in imports of articles like or 
                directly competitive with the agricultural commodity, 
                or class of goods within the agricultural commodity, 
                produced by the group contributed importantly to the 
                decline in price described in paragraph (1); or
                    ``(B) imports of articles like or directly 
                competitive with the agricultural commodity, or class 
                of goods within the agricultural commodity, produced by 
                the group account for a significant percentage of the 
                domestic market for the agricultural commodity (or 
                class of goods) and have contributed importantly to the 
                decline in price described in paragraph (1).
    ``(d) Special Rule for Qualified Subsequent Years.--A group of 
agricultural commodity producers certified as eligible under section 
293 shall be eligible to apply for assistance under this chapter in any 
qualified year after the year the group is first certified, if the 
Secretary determines that--
            ``(1) the national average price for the agricultural 
        commodity, or class of goods within the agricultural commodity, 
        produced by the group for the most recent marketing year for 
        which the national average price is available is equal to or 
        less than the price determined under subsection (c)(1); and
            ``(2) the requirements of subsection (c)(2) (A) or (B) are 
        met.
    ``(e) Determination of Qualified Year and Commodity.--In this 
chapter:
            ``(1) Qualified year.--The term `qualified year', with 
        respect to a group of agricultural commodity producers 
        certified as eligible under section 293, means each consecutive 
        year after the year in which the group is certified that the 
        Secretary makes the determination under subsection (c) or (d), 
        as the case may be.
            ``(2) Classes of goods within a commodity.--In any case in 
        which there are separate classes of goods within an 
        agricultural commodity, the Secretary shall treat each class as 
        a separate commodity in determining group eligibility, the 
        national average price, and level of imports under this section 
        and section 296.

``SEC. 293. DETERMINATIONS BY SECRETARY.

    ``(a) In General.--As soon as possible after the date on which a 
petition is filed under section 292, but in any event not later than 60 
days after that date, the Secretary shall determine whether the 
petitioning group meets the requirements of section 292(c) (or (d), as 
the case may be) and shall, if so, issue a certification of eligibility 
to apply for assistance under this chapter covering agricultural 
commodity producers in any group that meet the requirements. Each 
certification shall specify the date on which eligibility under this 
chapter begins.
    ``(b) Notice.--Upon making a determination on a petition, the 
Secretary shall promptly publish a summary of the determination in the 
Federal Register together with the Secretary's reasons for making the 
determination.
    ``(c) Termination of Certification.--Whenever the Secretary 
determines, with respect to any certification of eligibility under this 
chapter, that the decline in price for the agricultural commodity 
covered by the certification is no longer attributable to the 
conditions described in section 292, the Secretary shall terminate such 
certification and promptly cause notice of such termination to be 
published in the Federal Register together with the Secretary's reasons 
for making such determination.

``SEC. 294. STUDY BY SECRETARY WHEN INTERNATIONAL TRADE COMMISSION 
              BEGINS INVESTIGATION.

    ``(a) In General.--Whenever the International Trade Commission (in 
this chapter referred to as the `Commission') begins an investigation 
under section 202 with respect to an agricultural commodity, the 
Commission shall immediately notify the Secretary of the investigation. 
Upon receipt of the notification, the Secretary shall immediately begin 
a study of--
            ``(1) the number of agricultural commodity producers 
        producing a like or directly competitive agricultural commodity 
        who have been or are likely to be certified as eligible for 
        adjustment assistance under this chapter, and
            ``(2) the extent to which the adjustment of such producers 
        to the import competition may be facilitated through the use of 
        existing programs.
    ``(b) Report.--The report of the Secretary of the study under 
subsection (a) shall be made to the President not later than 15 days 
after the day on which the Commission makes its report under section 
202(f). Upon making his report to the President, the Secretary shall 
also promptly make it public (with the exception of information which 
the Secretary determines to be confidential) and shall have a summary 
of it published in the Federal Register.

``SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.

    ``(a) In General.--The Secretary shall provide full information to 
producers about the benefit allowances, training, and other employment 
services available under this title and about the petition and 
application procedures, and the appropriate filing dates, for such 
allowances, training, and services. The Secretary shall provide 
whatever assistance is necessary to enable groups to prepare petitions 
or applications for program benefits under this title.
    ``(b) Notice of Benefits.--
            ``(1) In general.--The Secretary shall mail written notice 
        of the benefits available under this chapter to each 
        agricultural commodity producer that the Secretary has reason 
        to believe is covered by a certification made under this 
        chapter.
            ``(2) Other notice.--The Secretary shall publish notice of 
        the benefits available under this chapter to agricultural 
        commodity producers that are covered by each certification made 
        under this chapter in newspapers of general circulation in the 
        areas in which such producers reside.

``SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL COMMODITY 
              PRODUCERS.

    ``(a) In General.--Payment of a trade adjustment allowance shall be 
made to an adversely affected agricultural commodity producer covered 
by a certification under this chapter who files an application for such 
allowance within 90 days after the date on which the Secretary makes a 
determination and issues a certification of eligibility under section 
293, if the following conditions are met:
            ``(1) The producer submits to the Secretary sufficient 
        information to establish the amount of agricultural commodity 
        covered by the application filed under subsection (a), that was 
        produced by the producer in the most recent year.
            ``(2) The producer certifies that the producer has not 
        received cash benefits under any provision of this title other 
        than this chapter.
            ``(3) The producer's net farm income (as determined by the 
        Secretary) for the most recent year is less than the producer's 
        net farm income for the latest year in which no adjustment 
        assistance was received by the producer under this chapter.
            ``(4) The producer certifies that the producer has met with 
        an Extension Service employee or agent to obtain, at no cost to 
        the producer, information and technical assistance that will 
        assist the producer in adjusting to import competition with 
        respect to the adversely affected agricultural commodity, 
        including--
                    ``(A) information regarding the feasibility and 
                desirability of substituting 1 or more alternative 
                commodities for the adversely affected agricultural 
                commodity; and
                    ``(B) technical assistance that will improve the 
                competitiveness of the production and marketing of the 
                adversely affected agricultural commodity by the 
                producer, including yield and marketing improvements.
    ``(b) Amount of Cash Benefits.--
            ``(1) In general.--Subject to the provisions of section 
        298, an adversely affected agricultural commodity producer 
        described in subsection (a) shall be entitled to adjustment 
        assistance under this chapter in an amount equal to the product 
        of--
                    ``(A) one-half of the difference between--
                            ``(i) an amount equal to 80 percent of the 
                        average of the national average price of the 
                        agricultural commodity covered by the 
                        application described in subsection (a) for the 
                        5 marketing years preceding the most recent 
                        marketing year, and
                            ``(ii) the national average price of the 
                        agricultural commodity for the most recent 
                        marketing year, and
                    ``(B) the amount of the agricultural commodity 
                produced by the agricultural commodity producer in the 
                most recent marketing year.
            ``(2) Special rule for subsequent qualified years.--The 
        amount of cash benefits for a qualified year shall be 
        determined in the same manner as cash benefits are determined 
        under paragraph (1) except that the average national price of 
        the agricultural commodity shall be determined under paragraph 
        (1)(A)(i) by using the 5-marketing-year period used to 
        determine the amount of cash benefits for the first 
        certification.
    ``(c) Maximum Amount of Cash Assistance.--The maximum amount of 
cash benefits an agricultural commodity producer may receive in any 12-
month period shall not exceed $10,000.
    ``(d) Limitations on Other Assistance.--An agricultural commodity 
producer entitled to receive a cash benefit under this chapter--
            ``(1) shall not be eligible for any other cash benefit 
        under this title, and
            ``(2) shall be entitled to employment services and training 
        benefits under sections 235 and 236.

``SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.

    ``(a) In General.--
            ``(1) Repayment.--If the Secretary, or a court of competent 
        jurisdiction, determines that any person has received any 
        payment under this chapter to which the person was not 
        entitled, such person shall be liable to repay such amount to 
        the Secretary, except that the Secretary may waive such 
        repayment if the Secretary determines, in accordance with 
        guidelines prescribed by the Secretary that--
                    ``(A) the payment was made without fault on the 
                part of such person, and
                    ``(B) requiring such repayment would be contrary to 
                equity and good conscience.
            ``(2) Recovery of overpayment.--Unless an overpayment is 
        otherwise recovered, or waived under paragraph (1), the 
        Secretary shall recover the overpayment by deductions from any 
        sums payable to such person under this chapter.
    ``(b) False Statements.--If the Secretary, or a court of competent 
jurisdiction, determines that a person--
            ``(1) knowingly has made, or caused another to make, a 
        false statement or representation of a material fact, or
            ``(2) knowingly has failed, or caused another to fail, to 
        disclose a material fact,
and as a result of such false statement or representation, or of such 
nondisclosure, such person has received any payment under this chapter 
to which the person was not entitled, such person shall, in addition to 
any other penalty provided by law, be ineligible for any further 
payments under this chapter.
    ``(c) Notice and Determination.--Except for overpayments determined 
by a court of competent jurisdiction, no repayment may be required, and 
no deduction may be made, under this section until a determination 
under subsection (a)(1) by the Secretary has been made, notice of the 
determination and an opportunity for a fair hearing thereon has been 
given to the person concerned, and the determination has become final.
    ``(d) Payment to Treasury.--Any amount recovered under this section 
shall be returned to the Treasury of the United States.
    ``(e) Penalties.--Whoever makes a false statement of a material 
fact knowing it to be false, or knowingly fails to disclose a material 
fact, for the purpose of obtaining or increasing for himself or for any 
other person any payment authorized to be furnished under this chapter 
shall be fined not more than $10,000 or imprisoned for not more than 1 
year, or both.

``SEC. 298. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated and 
there are appropriated to the Department of Agriculture for fiscal 
years 2000 through 2001, such sums as may be necessary to carry out the 
purposes of this chapter not to exceed $100,000,000 for each fiscal 
year.''.
    ``(b) Proportionate Reduction.--If in any year, the amount 
appropriated under this chapter is insufficient to meet the 
requirements for adjustment assistance payable under this chapter, the 
amount of assistance payable under this chapter shall be reduced 
proportionately.''.
    (b) Conforming Amendment.--The table of contents for title II of 
the Trade Act of 1974 is amended by inserting after the items relating 
to chapter 5, the following:

             ``Chapter 6--Adjustment Assistance for Farmers

``Sec. 291. Definitions.
``Sec. 292. Petitions; group eligibility.
``Sec. 293. Determinations by Secretary.
``Sec. 294. Study by Secretary when International Trade Commission 
                            begins investigation.
``Sec. 295. Benefit information to agricultural commodity producers.
``Sec. 296. Qualifying requirements for agricultural commodity 
                            producers.
``Sec. 297. Fraud and recovery of overpayments.
``Sec. 298. Authorization of appropriations.''.

 Subtitle B--Revenue Provisions Relating to Trade Adjustment Assistance

SEC. 610. REFERENCE.

    Except as otherwise expressly provided, whenever in this subtitle 
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.

SEC. 611. MODIFICATIONS TO ASSET DIVERSIFICATION TEST.

    (a) In General.--Subparagraph (B) of section 856(c)(4) is amended 
to read as follows:
                    ``(B)(i) not more than 25 percent of the value of 
                its total assets is represented by securities (other 
                than those includible under subparagraph (A)),
                    ``(ii) not more than 20 percent of the value of its 
                total assets is represented by securities of 1 or more 
                taxable REIT subsidiaries, and
                    ``(iii) except with respect to a taxable REIT 
                subsidiary and securities includible under subparagraph 
                (A)--
                            ``(I) not more than 5 percent of the value 
                        of its total assets is represented by 
                        securities of any one issuer,
                            ``(II) the trust does not hold securities 
                        possessing more than 10 percent of the total 
                        voting power of the outstanding securities of 
                        any one issuer, and
                            ``(III) the trust does not hold securities 
                        having a value of more than 10 percent of the 
                        total value of the outstanding securities of 
                        any one issuer.''.
    (b) Exception for Straight Debt Securities.--Subsection (c) of 
section 856 is amended by adding at the end the following new 
paragraph:
            ``(7) Straight debt safe harbor in applying paragraph 
        (4).--Securities of an issuer which are straight debt (as 
        defined in section 1361(c)(5) without regard to subparagraph 
        (B)(iii) thereof) shall not be taken into account in applying 
        paragraph (4)(B)(ii)(III) if--
                    ``(A) the issuer is an individual, or
                    ``(B) the only securities of such issuer which are 
                held by the trust or a taxable REIT subsidiary of the 
                trust are straight debt (as so defined), or
                    ``(C) the issuer is a partnership and the trust 
                holds at least a 20 percent profits interest in the 
                partnership.''.

SEC. 612. TREATMENT OF INCOME AND SERVICES PROVIDED BY TAXABLE REIT 
              SUBSIDIARIES.

    (a) Income From Taxable REIT Subsidiaries Not Treated as 
Impermissible Tenant Service Income.--Clause (i) of section 
856(d)(7)(C) (relating to exceptions to impermissible tenant service 
income) is amended by inserting ``or through a taxable REIT subsidiary 
of such trust'' after ``income''.
    (b) Certain Income From Taxable REIT Subsidiaries Not Excluded From 
Rents From Real Property.--
            (1) In general.--Subsection (d) of section 856 (relating to 
        rents from real property defined) is amended by adding at the 
        end the following new paragraphs:
            ``(8) Special rule for taxable reit subsidiaries.--For 
        purposes of this subsection, amounts paid to a real estate 
        investment trust by a taxable REIT subsidiary of such trust 
        shall not be excluded from rents from real property by reason 
        of paragraph (2)(B) if the requirements of either of the 
        following subparagraphs are met:
                    ``(A) Limited rental exception.--The requirements 
                of this subparagraph are met with respect to any 
                property if at least 90 percent of the leased space of 
                the property is rented to persons other than taxable 
                REIT subsidiaries of such trust and other than persons 
                described in section 856(d)(2)(B). The preceding 
                sentence shall apply only to the extent that the 
                amounts paid to the trust as rents from real property 
                (as defined in paragraph (1) without regard to 
                paragraph (2)(B)) from such property are substantially 
                comparable to such rents made by the other tenants of 
                the trust's property for comparable space.
                    ``(B) Exception for certain lodging facilities.--
                The requirements of this subparagraph are met with 
                respect to an interest in real property which is a 
                qualified lodging facility leased by the trust to a 
                taxable REIT subsidiary of the trust if the property is 
                operated on behalf of such subsidiary by a person who 
                is an eligible independent contractor.
            ``(9) Eligible independent contractor.--For purposes of 
        paragraph (8)(B)--
                    ``(A) In general.--The term `eligible independent 
                contractor' means, with respect to any qualified 
                lodging facility, any independent contractor if, at the 
                time such contractor enters into a management agreement 
                or other similar service contract with the taxable REIT 
                subsidiary to operate the facility, such contractor (or 
                any related person) is actively engaged in the trade or 
                business of operating qualified lodging facilities for 
                any person who is not a related person with respect to 
                the real estate investment trust or the taxable REIT 
                subsidiary.
                    ``(B) Special rules.--Solely for purposes of this 
                paragraph and paragraph (8)(B), a person shall not fail 
                to be treated as an independent contractor with respect 
                to any qualified lodging facility by reason of any of 
                the following:
                            ``(i) The taxable REIT subsidiary bears the 
                        expenses for the operation of the facility 
                        pursuant to the management agreement or other 
                        similar service contract.
                            ``(ii) The taxable REIT subsidiary receives 
                        the revenues from the operation of such 
                        facility, net of expenses for such operation 
                        and fees payable to the operator pursuant to 
                        such agreement or contract.
                            ``(iii) The real estate investment trust 
                        receives income from such person with respect 
                        to another property that is attributable to a 
                        lease of such other property to such person 
                        that was in effect as of the later of--
                                    ``(I) January 1, 1999, or
                                    ``(II) the earliest date that any 
                                taxable REIT subsidiary of such trust 
                                entered into a management agreement or 
                                other similar service contract with 
                                such person with respect to such 
                                qualified lodging facility.
                    ``(C) Renewals, etc., of existing leases.--For 
                purposes of subparagraph (B)(iii)--
                            ``(i) a lease shall be treated as in effect 
                        on January 1, 1999, without regard to its 
                        renewal after such date, so long as such 
                        renewal is pursuant to the terms of such lease 
                        as in effect on whichever of the dates under 
                        subparagraph (B)(iii) is the latest, and
                            ``(ii) a lease of a property entered into 
                        after whichever of the dates under subparagraph 
                        (B)(iii) is the latest shall be treated as in 
                        effect on such date if--
                                    ``(I) on such date, a lease of such 
                                property from the trust was in effect, 
                                and
                                    ``(II) under the terms of the new 
                                lease, such trust receives a 
                                substantially similar or lesser benefit 
                                in comparison to the lease referred to 
                                in subclause (I).
                    ``(D) Qualified lodging facility.--For purposes of 
                this paragraph--
                            ``(i) In general.--The term `qualified 
                        lodging facility' means any lodging facility 
                        unless wagering activities are conducted at or 
                        in connection with such facility by any person 
                        who is engaged in the business of accepting 
                        wagers and who is legally authorized to engage 
                        in such business at or in connection with such 
                        facility.
                            ``(ii) Lodging facility.--The term `lodging 
                        facility' means a hotel, motel, or other 
                        establishment more than one-half of the 
                        dwelling units in which are used on a transient 
                        basis.
                            ``(iii) Customary amenities and 
                        facilities.--The term `lodging facility' 
                        includes customary amenities and facilities 
                        operated as part of, or associated with, the 
                        lodging facility so long as such amenities and 
                        facilities are customary for other properties 
                        of a comparable size and class owned by other 
                        owners unrelated to such real estate investment 
                        trust.
                    ``(E) Operate includes manage.--References in this 
                paragraph to operating a property shall be treated as 
                including a reference to managing the property.
                    ``(F) Related person.--Persons shall be treated as 
                related to each other if such persons are treated as a 
                single employer under subsection (a) or (b) of section 
                52.''.
            (2) Conforming amendment.--Subparagraph (B) of section 
        856(d)(2) is amended by inserting ``except as provided in 
        paragraph (8),'' after ``(B)''.
            (3) Determining rents from real property.--
                    (A)(i) Paragraph (1) of section 856(d) is amended 
                by striking ``adjusted bases'' each place it occurs and 
                inserting ``fair market values''.
                    (ii) The amendment made by this subparagraph shall 
                apply to taxable years beginning after December 31, 
                2000.
                    (B)(i) Clause (i) of section 856(d)(2)(B) is 
                amended by striking ``number'' and inserting ``value''.
                    (ii) The amendment made by this subparagraph shall 
                apply to amounts received or accrued in taxable years 
                beginning after December 31, 2000, except for amounts 
                paid pursuant to leases in effect on July 12, 1999, or 
                pursuant to a binding contract in effect on such date 
                and at all times thereafter.

SEC. 613. TAXABLE REIT SUBSIDIARY.

    (a) In General.--Section 856 is amended by adding at the end the 
following new subsection:
    ``(l) Taxable REIT Subsidiary.--For purposes of this part--
            ``(1) In general.--The term `taxable REIT subsidiary' 
        means, with respect to a real estate investment trust, a 
        corporation (other than a real estate investment trust) if--
                    ``(A) such trust directly or indirectly owns stock 
                in such corporation, and
                    ``(B) such trust and such corporation jointly elect 
                that such corporation shall be treated as a taxable 
                REIT subsidiary of such trust for purposes of this 
                part.
        Such an election, once made, shall be irrevocable unless both 
        such trust and corporation consent to its revocation. Such 
        election, and any revocation thereof, may be made without the 
        consent of the Secretary.
            ``(2) 35 percent ownership in another taxable reit 
        subsidiary.--The term `taxable REIT subsidiary' includes, with 
        respect to any real estate investment trust, any corporation 
        (other than a real estate investment trust) with respect to 
        which a taxable REIT subsidiary of such trust owns directly or 
        indirectly--
                    ``(A) securities possessing more than 35 percent of 
                the total voting power of the outstanding securities of 
                such corporation, or
                    ``(B) securities having a value of more than 35 
                percent of the total value of the outstanding 
                securities of such corporation.
        The preceding sentence shall not apply to a qualified REIT 
        subsidiary (as defined in subsection (i)(2)). The rule of 
        section 856(c)(7) shall apply for purposes of subparagraph (B).
            ``(3) Exceptions.--The term `taxable REIT subsidiary' shall 
        not include--
                    ``(A) any corporation which directly or indirectly 
                operates or manages a lodging facility or a health care 
                facility, and
                    ``(B) any corporation which directly or indirectly 
                provides to any other person (under a franchise, 
                license, or otherwise) rights to any brand name under 
                which any lodging facility or health care facility is 
                operated.
        Subparagraph (B) shall not apply to rights provided to an 
        eligible independent contractor to operate or manage a lodging 
        facility if such rights are held by such corporation as a 
        franchisee, licensee, or in a similar capacity and such lodging 
        facility is either owned by such corporation or is leased to 
        such corporation from the real estate investment trust.
            ``(4) Definitions.--For purposes of paragraph (3)--
                    ``(A) Lodging facility.--The term `lodging 
                facility' has the meaning given to such term by 
                paragraph (9)(D)(ii).
                    ``(B) Health care facility.--The term `health care 
                facility' has the meaning given to such term by 
                subsection (e)(6)(D)(ii).''.
    (b) Conforming Amendment.--Paragraph (2) of section 856(i) is 
amended by adding at the end the following new sentence: ``Such term 
shall not include a taxable REIT subsidiary.''.

SEC. 614. LIMITATION ON EARNINGS STRIPPING.

    Paragraph (3) of section 163(j) (relating to limitation on 
deduction for interest on certain indebtedness) is amended by striking 
``and'' at the end of subparagraph (A), by striking the period at the 
end of subparagraph (B) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(C) any interest paid or accrued (directly or 
                indirectly) by a taxable REIT subsidiary (as defined in 
                section 856(l)) of a real estate investment trust to 
                such trust.''.

SEC. 615. 100 PERCENT TAX ON IMPROPERLY ALLOCATED AMOUNTS.

    (a) In General.--Subsection (b) of section 857 (relating to method 
of taxation of real estate investment trusts and holders of shares or 
certificates of beneficial interest) is amended by redesignating 
paragraphs (7) and (8) as paragraphs (8) and (9), respectively, and by 
inserting after paragraph (6) the following new paragraph:
            ``(7) Income from redetermined rents, redetermined 
        deductions, and excess interest.--
                    ``(A) Imposition of tax.--There is hereby imposed 
                for each taxable year of the real estate investment 
                trust a tax equal to 100 percent of redetermined rents, 
                redetermined deductions, and excess interest.
                    ``(B) Redetermined rents.--
                            ``(i) In general.--The term `redetermined 
                        rents' means rents from real property (as 
                        defined in subsection 856(d)) the amount of 
                        which would (but for subparagraph (E)) be 
                        reduced on distribution, apportionment, or 
                        allocation under section 482 to clearly reflect 
                        income as a result of services furnished or 
                        rendered by a taxable REIT subsidiary of the 
                        real estate investment trust to a tenant of 
                        such trust.
                            ``(ii) Exception for certain services.--
                        Clause (i) shall not apply to amounts received 
                        directly or indirectly by a real estate 
                        investment trust for services described in 
                        paragraph (1)(B) or (7)(C)(i) of section 
                        856(d).
                            ``(iii) Exception for de minimis amounts.--
                        Clause (i) shall not apply to amounts described 
                        in section 856(d)(7)(A) with respect to a 
                        property to the extent such amounts do not 
                        exceed the one percent threshold described in 
                        section 856(d)(7)(B) with respect to such 
                        property.
                            ``(iv) Exception for comparably priced 
                        services.--Clause (i) shall not apply to any 
                        service rendered by a taxable REIT subsidiary 
                        of a real estate investment trust to a tenant 
                        of such trust if--
                                    ``(I) such subsidiary renders a 
                                significant amount of similar services 
                                to persons other than such trust and 
                                tenants of such trust who are unrelated 
                                (within the meaning of section 
                                856(d)(8)(F)) to such subsidiary, 
                                trust, and tenants, but
                                    ``(II) only to the extent the 
                                charge for such service so rendered is 
                                substantially comparable to the charge 
                                for the similar services rendered to 
                                persons referred to in subclause (I).
                            ``(v) Exception for certain separately 
                        charged services.--Clause (i) shall not apply 
                        to any service rendered by a taxable REIT 
                        subsidiary of a real estate investment trust to 
                        a tenant of such trust if--
                                    ``(I) the rents paid to the trust 
                                by tenants (leasing at least 25 percent 
                                of the net leasable space in the 
                                trust's property) who are not receiving 
                                such service from such subsidiary are 
                                substantially comparable to the rents 
                                paid by tenants leasing comparable 
                                space who are receiving such service 
                                from such subsidiary, and
                                    ``(II) the charge for such service 
                                from such subsidiary is separately 
                                stated.
                            ``(vi) Exception for certain services based 
                        on subsidiary's income from the services.--
                        Clause (i) shall not apply to any service 
                        rendered by a taxable REIT subsidiary of a real 
                        estate investment trust to a tenant of such 
                        trust if the gross income of such subsidiary 
                        from such service is not less than 150 percent 
                        of such subsidiary's direct cost in furnishing 
                        or rendering the service.
                            ``(vii) Exceptions granted by secretary.--
                        The Secretary may waive the tax otherwise 
                        imposed by subparagraph (A) if the trust 
                        establishes to the satisfaction of the 
                        Secretary that rents charged to tenants were 
                        established on an arms' length basis even 
                        though a taxable REIT subsidiary of the trust 
                        provided services to such tenants.
                    ``(C) Redetermined deductions.--The term 
                `redetermined deductions' means deductions (other than 
                redetermined rents) of a taxable REIT subsidiary of a 
                real estate investment trust if the amount of such 
                deductions would (but for subparagraph (E)) be 
                decreased on distribution, apportionment, or allocation 
                under section 482 to clearly reflect income as between 
                such subsidiary and such trust.
                    ``(D) Excess interest.--The term `excess interest' 
                means any deductions for interest payments by a taxable 
                REIT subsidiary of a real estate investment trust to 
                such trust to the extent that the interest payments are 
                in excess of a rate that is commercially reasonable.
                    ``(E) Coordination with section 482.--The 
                imposition of tax under subparagraph (A) shall be in 
                lieu of any distribution, apportionment, or allocation 
                under section 482.
                    ``(F) Regulatory authority.--The Secretary shall 
                prescribe such regulations as may be necessary or 
                appropriate to carry out the purposes of this 
                paragraph. Until the Secretary prescribes such 
                regulations, real estate investment trusts and their 
                taxable REIT subsidiaries may base their allocations on 
                any reasonable method.''.
    (b) Amount Subject to Tax Not Required To Be Distributed.--
Subparagraph (E) of section 857(b)(2) (relating to real estate 
investment trust taxable income) is amended by striking ``paragraph 
(5)'' and inserting ``paragraphs (5) and (7)''.

SEC. 616. EFFECTIVE DATE.

    (a) In General.--The amendments made by sections 611 through 615 
shall apply to taxable years beginning after December 31, 2000.
    (b) Transitional Rules Related to Section 611.--
            (1) Existing arrangements.--
                    (A) In general.--Except as otherwise provided in 
                this paragraph, the amendment made by section 611 shall 
                not apply to a real estate investment trust with 
                respect to--
                            (i) securities of a corporation held 
                        directly or indirectly by such trust on July 
                        12, 1999,
                            (ii) securities of a corporation held by an 
                        entity on July 12, 1999, if such trust acquires 
                        control of such entity pursuant to a written 
                        binding contract in effect on such date and at 
                        all times thereafter before such acquisition,
                            (iii) securities received by such trust (or 
                        a successor) in exchange for, or with respect 
                        to, securities described in clause (i) or (ii) 
                        in a transaction in which gain or loss is not 
                        recognized, and
                            (iv) securities acquired directly or 
                        indirectly by such trust as part of a 
                        reorganization (as defined in section 368(a)(1) 
                        of the Internal Revenue Code of 1986) with 
                        respect to such trust if such securities are 
                        described in clause (i), (ii), or (iii) with 
                        respect to any other real estate investment 
                        trust.
                    (B) New trade or business or substantial new 
                assets.--Subparagraph (A) shall cease to apply to 
                securities of a corporation as of the first day after 
                July 12, 1999, on which such corporation engages in a 
                substantial new line of business, or acquires any 
                substantial asset, other than--
                            (i) pursuant to a binding contract in 
                        effect on such date and at all times thereafter 
                        before the acquisition of such asset,
                            (ii) in a transaction in which gain or loss 
                        is not recognized by reason of section 1031 or 
                        1033 of the Internal Revenue Code of 1986, or
                            (iii) in a reorganization (as so defined) 
                        with another corporation the securities of 
                        which are described in paragraph (1)(A) of this 
                        subsection.
                    (C) Limitation on transition rules.--Subparagraph 
                (A) shall cease to apply to securities of a corporation 
                held, acquired, or received, directly or indirectly, by 
                a real estate investment trust as of the first day 
                after July 12, 1999, on which such trust acquires any 
                additional securities of such corporation other than--
                            (i) pursuant to a binding contract in 
                        effect on July 12, 1999, and at all times 
                        thereafter, or
                            (ii) in a reorganization (as so defined) 
                        with another corporation the securities of 
                        which are described in paragraph (1)(A) of this 
                        subsection.
            (2) Tax-free conversion.--If--
                    (A) at the time of an election for a corporation to 
                become a taxable REIT subsidiary, the amendment made by 
                section 611 does not apply to such corporation by 
                reason of paragraph (1), and
                    (B) such election first takes effect before January 
                1, 2004,
        such election shall be treated as a reorganization qualifying 
        under section 368(a)(1)(A) of such Code.

SEC. 617. HEALTH CARE REITS.

    (a) Special Foreclosure Rule for Health Care Properties.--
Subsection (e) of section 856 (relating to special rules for 
foreclosure property) is amended by adding at the end the following new 
paragraph:
            ``(6) Special rule for qualified health care properties.--
        For purposes of this subsection--
                    ``(A) Acquisition at expiration of lease.--The term 
                `foreclosure property' shall include any qualified 
                health care property acquired by a real estate 
                investment trust as the result of the termination of a 
                lease of such property (other than a termination by 
                reason of a default, or the imminence of a default, on 
                the lease).
                    ``(B) Grace period.--In the case of a qualified 
                health care property which is foreclosure property 
                solely by reason of subparagraph (A), in lieu of 
                applying paragraphs (2) and (3)--
                            ``(i) the qualified health care property 
                        shall cease to be foreclosure property as of 
                        the close of the second taxable year after the 
                        taxable year in which such trust acquired such 
                        property, and
                            ``(ii) if the real estate investment trust 
                        establishes to the satisfaction of the 
                        Secretary that an extension of the grace period 
                        in clause (i) is necessary to the orderly 
                        leasing or liquidation of the trust's interest 
                        in such qualified health care property, the 
                        Secretary may grant one or more extensions of 
                        the grace period for such qualified health care 
                        property.
                Any such extension shall not extend the grace period 
                beyond the close of the 6th year after the taxable year 
                in which such trust acquired such qualified health care 
                property.
                    ``(C) Income from independent contractors.--For 
                purposes of applying paragraph (4)(C) with respect to 
                qualified health care property which is foreclosure 
                property by reason of subparagraph (A) or paragraph 
                (1), income derived or received by the trust from an 
                independent contractor shall be disregarded to the 
                extent such income is attributable to--
                            ``(i) any lease of property in effect on 
                        the date the real estate investment trust 
                        acquired the qualified health care property 
                        (without regard to its renewal after such date 
                        so long as such renewal is pursuant to the 
                        terms of such lease as in effect on such date), 
                        or
                            ``(ii) any lease of property entered into 
                        after such date if--
                                    ``(I) on such date, a lease of such 
                                property from the trust was in effect, 
                                and
                                    ``(II) under the terms of the new 
                                lease, such trust receives a 
                                substantially similar or lesser benefit 
                                in comparison to the lease referred to 
                                in subclause (I).
                    ``(D) Qualified health care property.--
                            ``(i) In general.--The term `qualified 
                        health care property' means any real property 
                        (including interests therein), and any personal 
                        property incident to such real property, 
                        which--
                                    ``(I) is a health care facility, or
                                    ``(II) is necessary or incidental 
                                to the use of a health care facility.
                            ``(ii) Health care facility.--For purposes 
                        of clause (i), the term `health care facility' 
                        means a hospital, nursing facility, assisted 
                        living facility, congregate care facility, 
                        qualified continuing care facility (as defined 
                        in section 7872(g)(4)), or other licensed 
                        facility which extends medical or nursing or 
                        ancillary services to patients and which, 
                        immediately before the termination, expiration, 
                        default, or breach of the lease of or mortgage 
                        secured by such facility, was operated by a 
                        provider of such services which was eligible 
                        for participation in the medicare program under 
                        title XVIII of the Social Security Act with 
                        respect to such facility.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

SEC. 618. CONFORMITY WITH REGULATED INVESTMENT COMPANY RULES.

    (a) Distribution Requirement.--Clauses (i) and (ii) of section 
857(a)(1)(A) (relating to requirements applicable to real estate 
investment trusts) are each amended by striking ``95 percent (90 
percent for taxable years beginning before January 1, 1980)'' and 
inserting ``90 percent''.
    (b) Imposition of Tax.--Clause (i) of section 857(b)(5)(A) 
(relating to imposition of tax in case of failure to meet certain 
requirements) is amended by striking ``95 percent (90 percent in the 
case of taxable years beginning before January 1, 1980)'' and inserting 
``90 percent''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 619. CLARIFICATION OF EXCEPTION FOR INDEPENDENT OPERATORS.

    (a) In General.--Paragraph (3) of section 856(d) (relating to 
independent contractor defined) is amended by adding at the end the 
following flush sentence:
        ``In the event that any class of stock of either the real 
        estate investment trust or such person is regularly traded on 
        an established securities market, only persons who own, 
        directly or indirectly, more than 5 percent of such class of 
        stock shall be taken into account as owning any of the stock of 
        such class for purposes of applying the 35 percent limitation 
        set forth in subparagraph (B) (but all of the outstanding stock 
        of such class shall be considered outstanding in order to 
        compute the denominator for purpose of determining the 
        applicable percentage of ownership).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 2000.

SEC. 620. MODIFICATION OF EARNINGS AND PROFITS RULES.

    (a) Rules for Determining Whether Regulated Investment Company Has 
Earnings and Profits From Non-RIC Year.--Subsection (c) of section 852 
is amended by adding at the end the following new paragraph:
            ``(3) Distributions to meet requirements of subsection 
        (a)(2)(B).--Any distribution which is made in order to comply 
        with the requirements of subsection (a)(2)(B)--
                    ``(A) shall be treated for purposes of this 
                subsection and subsection (a)(2)(B) as made from the 
                earliest earnings and profits accumulated in any 
                taxable year to which the provisions of this part did 
                not apply rather than the most recently accumulated 
                earnings and profits, and
                    ``(B) to the extent treated under subparagraph (A) 
                as made from accumulated earnings and profits, shall 
                not be treated as a distribution for purposes of 
                subsection (b)(2)(D) and section 855.''.
    (b) Clarification of Application of REIT Spillover Dividend Rules 
to Distributions To Meet Qualification Requirement.--Subparagraph (B) 
of section 857(d)(3) is amended by inserting before the period ``and 
section 858''.
    (c) Application of Deficiency Dividend Procedures.--Paragraph (1) 
of section 852(e) is amended by adding at the end the following new 
sentence: ``If the determination under subparagraph (A) is solely as a 
result of the failure to meet the requirements of subsection (a)(2), 
the preceding sentence shall also apply for purposes of applying 
subsection (a)(2) to the non-RIC year.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to distributions after December 31, 2000.

SEC. 621. MODIFICATION OF ESTIMATED TAX RULES FOR CLOSELY HELD REAL 
              ESTATE INVESTMENT TRUSTS.

    (a) In General.--Subsection (e) of section 6655 (relating to 
estimated tax by corporations) is amended by adding at the end the 
following new paragraph:
            ``(5) Treatment of certain reit dividends.--
                    ``(A) In general.--Any dividend received from a 
                closely held real estate investment trust by any person 
                which owns (after application of subsections (d)(5) and 
                (l)(3)(B) of section 856) 10 percent or more (by vote 
                or value) of the stock or beneficial interests in the 
                trust shall be taken into account in computing 
                annualized income installments under paragraph (2) in a 
                manner similar to the manner under which partnership 
                income inclusions are taken into account.
                    ``(B) Closely held reit.--For purposes of 
                subparagraph (A), the term `closely held real estate 
                investment trust' means a real estate investment trust 
                with respect to which 5 or fewer persons own (after 
                application of subsections (d)(5) and (l)(3)(B) of 
                section 856) 50 percent or more (by vote or value) of 
                the stock or beneficial interests in the trust.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to estimated tax payments due on or after November 15, 1999.

SEC. 622. CONTROLLED ENTITIES INELIGIBLE FOR REIT STATUS.

    (a) In General.--Subsection (a) of section 856 (relating to 
definition of real estate investment trust) is amended by striking 
``and'' at the end of paragraph (6), by redesignating paragraph (7) as 
paragraph (8), and by inserting after paragraph (6) the following new 
paragraph:
            ``(7) which is not a controlled entity (as defined in 
        subsection (l)); and''.
    (b) Controlled Entity.--Section 856 is amended by adding at the end 
the following new subsection:
    ``(l) Controlled Entity.--
            ``(1) In general.--For purposes of subsection (a)(7), an 
        entity is a controlled entity if, at any time during the 
        taxable year, one person (other than a qualified entity)--
                    ``(A) in the case of a corporation, owns stock--
                            ``(i) possessing at least 50 percent of the 
                        total voting power of the stock of such 
                        corporation, or
                            ``(ii) having a value equal to at least 50 
                        percent of the total value of the stock of such 
                        corporation, or
                    ``(B) in the case of a trust, owns beneficial 
                interests in the trust which would meet the 
                requirements of subparagraph (A) if such interests were 
                stock.
            ``(2) Qualified entity.--For purposes of paragraph (1), the 
        term `qualified entity' means--
                    ``(A) any real estate investment trust, and
                    ``(B) any partnership in which one real estate 
                investment trust owns at least 50 percent of the 
                capital and profits interests in the partnership.
            ``(3) Attribution rules.--For purposes of this paragraphs 
        (1) and (2)--
                    ``(A) In general.--Rules similar to the rules of 
                subsections (d)(5) and (h)(3) shall apply; except that 
                section 318(a)(3)(C) shall not be applied under such 
                rules to treat stock owned by a qualified entity as 
                being owned by a person which is not a qualified 
                entity.
                    ``(B) Stapled entities.--A group of entities which 
                are stapled entities (as defined in section 269B(c)(2)) 
                shall be treated as one person.
            ``(4) Exception for certain new reits.--
                    ``(A) In general.--The term `controlled entity' 
                shall not include an incubator REIT.
                    ``(B) Incubator reit.--A corporation shall be 
                treated as an incubator REIT for any taxable year 
                during the eligibility period if it meets all the 
                following requirements for such year:
                            ``(i) The corporation elects to be treated 
                        as an incubator REIT.
                            ``(ii) The corporation has only voting 
                        common stock outstanding.
                            ``(iii) Not more than 50 percent of the 
                        corporation's real estate assets consist of 
                        mortgages.
                            ``(iv) From not later than the beginning of 
                        the last half of the second taxable year, at 
                        least 10 percent of the corporation's capital 
                        is provided by lenders or equity investors who 
                        are unrelated to the corporation's largest 
                        shareholder.
                            ``(v) The corporation annually increases 
                        the value of its real estate assets by at least 
                        10 percent.
                            ``(vi) The directors of the corporation 
                        adopt a resolution setting forth an intent to 
                        engage in a going public transaction.
                No election may be made with respect to any REIT if an 
                election under this subsection was in effect for any 
                predecessor of such REIT. The requirement of clause 
                (ii) shall not fail to be met merely because a going 
                public transaction is accomplished through a 
                transaction described in section 368(a)(1) with another 
                corporation which had another class of stock 
                outstanding prior to the transaction.
                    ``(C) Eligibility period.--
                            ``(i) In general.--The eligibility period 
                        (for which an incubator REIT election can be 
                        made) begins with the REIT's second taxable 
                        year and ends at the close of the REIT's third 
                        taxable year, except that the REIT may, subject 
                        to clauses (ii), (iii), and (iv), elect to 
                        extend such period for an additional 2 taxable 
                        years.
                            ``(ii) Going public transaction.--A REIT 
                        may not elect to extend the eligibility period 
                        under clause (i) unless it enters into an 
                        agreement with the Secretary that if it does 
                        not engage in a going public transaction by the 
                        end of the extended eligibility period, it 
                        shall pay Federal income taxes for the 2 years 
                        of the extended eligibility period as if it had 
                        not made an incubator REIT election and had 
                        ceased to qualify as a REIT for those 2 taxable 
                        years.
                            ``(iii) Returns, interest, and notice.--
                                    ``(I) Returns.--In the event the 
                                corporation ceases to be treated as a 
                                REIT by operation of clause (ii), the 
                                corporation shall file any appropriate 
                                amended returns reflecting the change 
                                in status within 3 months of the close 
                                of the extended eligibility period.
                                    ``(II) Interest.--Interest shall be 
                                payable on any tax imposed by reason of 
                                clause (ii) for any taxable year but, 
                                unless there was a finding under 
                                subparagraph (D), no substantial 
                                underpayment penalties shall be 
                                imposed.
                                    ``(III) Notice.--The corporation 
                                shall, at the same time it files its 
                                returns under subclause (I), notify its 
                                shareholders and any other persons 
                                whose tax position is, or may 
                                reasonably be expected to be, affected 
                                by the change in status so they also 
                                may file any appropriate amended 
                                returns to conform their tax treatment 
                                consistent with the corporation's loss 
                                of REIT status.
                                    ``(IV) Regulations.--The Secretary 
                                shall provide appropriate regulations 
                                setting forth transferee liability and 
                                other provisions to ensure collection 
                                of tax and the proper administration of 
                                this provision.
                            ``(iv) Clauses (ii) and (iii) shall not 
                        apply if the corporation allows its incubator 
                        REIT status to lapse at the end of the initial 
                        2-year eligibility period without engaging in a 
                        going public transaction if the corporation is 
                        not a controlled entity as of the beginning of 
                        its fourth taxable year. In such a case, the 
                        corporation's directors may still be liable for 
                        the penalties described in subparagraph (D) 
                        during the eligibility period.
                    ``(D) Special penalties.--If the Secretary 
                determines that an incubator REIT election was filed 
                for a principal purpose other than as part of a 
                reasonable plan to undertake a going public 
                transaction, an excise tax of $20,000 shall be imposed 
                on each of the corporation's directors for each taxable 
                year for which an election was in effect.
                    ``(E) Going public transaction.--For purposes of 
                this paragraph, a going public transaction means--
                            ``(i) a public offering of shares of the 
                        stock of the incubator REIT;
                            ``(ii) a transaction, or series of 
                        transactions, that results in the stock of the 
                        incubator REIT being regularly traded on an 
                        established securities market and that results 
                        in at least 50 percent of such stock being held 
                        by shareholders who are unrelated to persons 
                        who held such stock before it began to be so 
                        regularly traded; or
                            ``(iii) any transaction resulting in 
                        ownership of the REIT by 200 or more persons 
                        (excluding the largest single shareholder) who 
                        in the aggregate own at least 50 percent of the 
                        stock of the REIT.
                For the purposes of this subparagraph, the rules of 
                paragraph (3) shall apply in determining the ownership 
                of stock.
                    ``(F) Definitions.--The term `established 
                securities market' shall have the meaning set forth in 
                the regulations under section 897.''
    (c) Conforming Amendment.--Paragraph (2) of section 856(h) is 
amended by striking ``and (6)'' each place it appears and inserting ``, 
(6), and (7)''.
    (d) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years ending after July 14, 1999.
            (2) Exception for existing controlled entities.--The 
        amendments made by this section shall not apply to any entity 
        which is a controlled entity (as defined in section 856(l) of 
        the Internal Revenue Code of 1986, as added by this section) as 
        of July 14, 1999, which is a real estate investment trust for 
        the taxable year which includes such date, and which has 
        significant business assets or activities as of such date. For 
        purposes of the preceding sentence, an entity shall be treated 
        as such a controlled entity on July 14, 1999, if it becomes 
        such an entity after such date in a transaction--
                    (A) made pursuant to a written agreement which was 
                binding on such date and at all times thereafter, or
                    (B) described on or before such date in a filing 
                with the Securities and Exchange Commission required 
                solely by reason of the transaction.

SEC. 623. MODIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR.

    (a) In General.--The table contained in clause (i) of section 
6654(d)(1)(C) (relating to limitation on use of preceding year's tax) 
is amended by striking all matter beginning with the item relating to 
1999 or 2000 and inserting the following new items:

    ``1999........................................               106.5 
    2000..........................................                 106 
    2001..........................................                 112 
    2002 or thereafter............................               110''.
          (b) Effective Date.--The amendment made by this section shall 
apply with respect to any installment payment for taxable years 
beginning after December 31, 1999.

                   TITLE VII--OTHER TRADE PROVISIONS

SEC. 701. NORMAL TRADE RELATIONS FOR ALBANIA.

    (a) Findings.--Congress makes the following findings:
            (1) Albania has been found to be in full compliance with 
        the freedom of emigration requirements under title IV of the 
        Trade Act of 1974.
            (2) Since its emergence from communism, Albania has made 
        progress toward democratic rule and the creation of a free-
        market economy.
            (3) Albania has concluded a bilateral investment treaty 
        with the United States.
            (4) Albania has demonstrated a strong desire to build a 
        friendly relationship with the United States and has been very 
        cooperative with NATO and the international community during 
        and after the Kosova crisis.
            (5) The extension of unconditional normal trade relations 
        treatment to the products of Albania will enable the United 
        States to avail itself of all rights under the World Trade 
        Organization with respect to Albania when that country becomes 
        a member of the World Trade Organization.
    (b) Termination of Application of Title IV of the Trade Act of 1974 
to Albania.--
            (1) Presidential determinations and extensions of 
        nondiscriminatory treatment.--Notwithstanding any provision of 
        title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the 
        President may--
                    (A) determine that such title should no longer 
                apply to Albania; and
                    (B) after making a determination under subparagraph 
                (A) with respect to Albania, proclaim the extension of 
                nondiscriminatory treatment (normal trade relations 
                treatment) to the products of that country.
            (2) Termination of application of title iv.--On or after 
        the effective date of the extension under paragraph (1)(B) of 
        nondiscriminatory treatment to the products of Albania, title 
        IV of the Trade Act of 1974 shall cease to apply to that 
        country.

SEC. 702. NORMAL TRADE RELATIONS FOR KYRGYZSTAN.

    (a) Findings.--Congress makes the following findings:
            (1) Kyrgyzstan has been found to be in full compliance with 
        the freedom of emigration requirements under title IV of the 
        Trade Act of 1974.
            (2) Since its independence from the Soviet Union in 1991, 
        Kyrgyzstan has made great progress toward democratic rule and 
        toward creating a free-market economic system.
            (3) Kyrgyzstan concluded a bilateral investment treaty with 
        the United States in 1994.
            (4) Kyrgyzstan has demonstrated a strong desire to build a 
        friendly and cooperative relationship with the United States.
            (5) The extension of unconditional normal trade relations 
        treatment to the products of Kyrgyzstan will enable the United 
        States to avail itself of all rights under the World Trade 
        Organization with respect to Kyrgyzstan.
    (b) Termination of Application of Title IV of the Trade Act of 1974 
to Kyrgyzstan.--
            (1) Presidential determinations and extensions of 
        nondiscriminatory treatment.--Notwithstanding any provision of 
        title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the 
        President may--
                    (A) determine that such title should no longer 
                apply to Kyrgyzstan; and
                    (B) after making a determination under subparagraph 
                (A) with respect to Kyrgyzstan, proclaim the extension 
                of nondiscriminatory treatment (normal trade relations 
                treatment) to the products of that country.
            (2) Termination of application of title iv.--On or after 
        the effective date of the extension under paragraph (1)(B) of 
        nondiscriminatory treatment to the products of Kyrgyzstan, 
        title IV of the Trade Act of 1974 shall cease to apply to that 
        country.

SEC. 703. REPORT ON EMPLOYMENT AND TRADE ADJUSTMENT ASSISTANCE.

    (a) In General.--Not later than 9 months after the date of 
enactment of this section, the Comptroller General of the United States 
shall submit a report to Congress regarding the efficiency and 
effectiveness of Federal and State coordination of employment and 
retraining activities associated with the following programs and 
legislation:
            (1) trade adjustment assistance (including NAFTA trade 
        adjustment assistance) provided for under title II of the Trade 
        Act of 1974;
            (2) the Job Training Partnership Act;
            (3) the Workforce Investment Act; and
            (4) unemployment insurance.
    (b) Period Covered.--The report shall cover the activities involved 
in the programs and legislation listed in subsection (a) from January 
1, 1994, to December 31, 1999.
    (c) Data and Recommendations.--The report shall at a minimum 
include specific data and recommendations regarding--
            (1) the compatibility of program requirements related to 
        the employment and retraining of dislocated workers in the 
        United States, with particular emphasis on the trade adjustment 
        assistance programs provided for under title II of the Trade 
        Act of 1974;
            (2) the compatibility of application procedures related to 
        the employment and retraining of dislocated workers in the 
        United States;
            (3) the capacity of the programs in addressing foreign 
        trade and the transfer of production to other countries on 
        workers in the United States measured in terms of loss of 
        employment and wages;
            (4) the capacity of the programs in addressing foreign 
        trade and the transfer of production to other countries on 
        secondary workers in the United States measured in terms of 
        loss of employment and wages;
            (5) how the impact of foreign trade and the transfer of 
        production to other countries would have changed the number of 
        beneficiaries covered under the trade adjustment assistance 
        program if the trade adjustment assistance program covered 
        secondary workers in the United States; and
            (6) the effectiveness of the programs described in 
        subsection (a) in achieving reemployment of United States 
        workers and maintaining wage levels of United States workers 
        who have been dislocated as a result of foreign trade and the 
        transfer of production to other countries.

SEC. 704. TRADE ADJUSTMENT ASSISTANCE.

    (a) Certification of Eligibility for Workers Required for 
Decommissioning or Closure of Facility.--
            (1) In general.--Notwithstanding any other provision of law 
        or any decision by the Secretary of Labor denying certification 
        or eligibility for certification for adjustment assistance 
        under title II of the Trade Act of 1974, a qualified worker 
        described in paragraph (2) shall be certified by the Secretary 
        as eligible to apply for adjustment assistance under such title 
        II.
            (2) Qualified worker.--For purposes of this subsection, a 
        ``qualified worker'' means a worker who--
                    (A) was determined to be covered under Trade 
                Adjustment Assistance Certification TA-W-28,438; and
                    (B) was necessary for the decommissioning or 
                closure of a nuclear power facility.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of enactment of this Act.

SEC. 705. REPORT ON DEBT RELIEF.

    The President shall, not later than 180 days after the date of 
enactment of this Act, submit to Congress a report on the President's 
recommendations for bilateral debt relief for sub-Saharan African 
countries, the President's recommendations for new loan, credit, and 
guarantee programs and procedures for such countries, and the 
President's assessment of how debt relief will affect the ability of 
each such country to participate fully in the international trading 
system.

SEC. 706. HIV/AIDS EFFECT ON THE SUB-SAHARAN AFRICAN WORKFORCE.

    In selecting issues of common interest to the United States-Sub-
Saharan African Trade and Economic Cooperation Forum, the President 
shall instruct the United States delegates to the Forum to promote a 
review by the Forum of the HIV/AIDS epidemic in each sub-Saharan 
African country and the effect of the HIV/AIDS epidemic on human and 
social development in each country.

SEC. 707. GOODS MADE WITH FORCED OR INDENTURED CHILD LABOR.

    (a) In General.--Section 307 of the Tariff Act of 1930 (19 U.S.C. 
1307) is amended by adding at the end the following new sentence: ``For 
purposes of this section, the term `forced labor or/and indentured 
labor' includes forced or indentured child labor.''.
    (b) Effective Date.--The amendment made by this section shall take 
effect on the date of enactment of this Act.

SEC. 708. RELIQUIDATION OF CERTAIN NUCLEAR FUEL ASSEMBLIES.

    (a) In General.--Notwithstanding section 514 of the Tariff Act of 
1930 (19 U.S.C. 1514) or any other provision of law, upon proper 
request filed with the Secretary of the Treasury not later than 90 days 
after the date of enactment of this Act, the Secretary shall--
            (1) reliquidate as free of duty the entries listed in 
        subsection (b); and
            (2) refund any duties paid with respect to such entries as 
        shown on Customs Service Collection Receipt Number 527006753.
    (b) Entries.--The entries referred to in subsection (a) are as 
follows:

Entry number                        Date of entry
    062-2320014-5..................
                                        January 16, 1996

    062-2320085-5..................
                                        February 13, 1996

    839-4030989-7..................
                                        January 25, 1996

    839-4031053-1..................
                                        December 2, 1996

    839-4031591-0..................
                                        January 21, 1997.

SEC. 709. SENSE OF THE SENATE REGARDING FAIR ACCESS TO JAPANESE 
              TELECOMMUNICATIONS FACILITIES AND SERVICES.

    (a) Findings.--The Senate makes the following findings:
            (1) The United States has a deep and sustained interest in 
        the promotion of deregulation, competition, and regulatory 
        reform in Japan.
            (2) New and bold measures by the Government of Japan 
        regarding regulatory reform will help remove the regulatory and 
        structural impediments to the effective functioning of market 
        forces in the Japanese economy.
            (3) Regulatory reform will increase the efficient 
        allocation of resources in Japan, which is critical to 
        returning Japan to a long-term growth path powered by domestic 
        demand.
            (4) Regulatory reform will not only improve market access 
        for United States business and other foreign firms, but will 
        also enhance consumer choice and economic prosperity in Japan.
            (5) A sustained recovery of the Japanese economy is vital 
        to a sustained recovery of Asian economies.
            (6) The Japanese economy must serve as one of the main 
        engines of growth for Asia and for the global economy.
            (7) The Governments of the United States and Japan 
        reconfirmed the critical importance of deregulation, 
        competition, and regulatory reform when the two governments 
        established the Enhanced Initiative on Deregulation and 
        Competition Policy in 1997.
            (8) Telecommunications is a critical sector requiring 
        reform in Japan, where the market is hampered by a history of 
        laws, regulations, and monopolistic practices that do not meet 
        the needs of a competitive market.
            (9) As the result of Japan's laws, regulations, and 
        monopolistic practices, Japanese consumers and Japanese 
        industry have been denied the broad benefits of innovative 
        telecommunications services, cutting edge technology, and lower 
        prices that competition would bring to the market.
            (10) Japan's significant lag in developing broadband and 
        Internet services, and Japan's lag in the entire area of 
        electronic commerce, is a direct result of a noncompetitive 
        telecommunications regulatory structure.
            (11) Japan's lag in developing broadband and Internet 
        services is evidenced by the following:
                    (A) Japan has only 17,000,000 Internet users, while 
                the United States has 80,000,000 Internet users.
                    (B) Japan hosts fewer than 2,000,000 websites, 
                while the United States hosts over 30,000,000 websites.
                    (C) Electronic commerce in Japan is valued at less 
                than $1,000,000,000, while in the United States 
                electronic commerce is valued at over $30,000,000,000.
                    (D) 19 percent of Japan's schools are connected to 
                the Internet, while in the United States 89 percent of 
                schools are connected.
            (12) Leading edge foreign telecommunications companies, 
        because of their high level of technology and innovation, are 
        the key to building the necessary telecommunications 
        infrastructure in Japan, which will only be able to serve 
        Japanese consumers and industry if there is a fundamental 
        change in Japan's regulatory approach to telecommunications.
    (b) Sense of the Senate.--It is the sense of the Senate that--
            (1) the appropriate officials in the executive branch 
        should implement vigorously the call for Japan to undertake a 
        major regulatory reform in the telecommunications sector, the 
        so-called ``Telecommunications Big Bang'';
            (2) a ``Telecommunications Big Bang'' must address 
        fundamental legislative and regulatory issues within a strictly 
        defined timeframe;
            (3) the new telecommunications regulatory framework should 
        put competition first in order to encourage new and innovative 
        businesses to enter the telecommunications market in Japan;
            (4) the Government of Japan should ensure that Nippon 
        Telegraph and Telephone Corporation (NTT) and its affiliates 
        (the NTT Group) are prevented from using their dominant 
        position in the wired and wireless market in an anticompetitive 
        manner; and
            (5) the Government of Japan should take credible steps to 
        ensure that competitive carriers have reasonable, cost-based, 
        and nondiscriminatory access to the rights-of-way, facilities, 
        and services controlled by NTT, the NTT Group, other utilities, 
        and the Government of Japan, including--
                    (A) access to interconnection at market-based 
                rates;
                    (B) unrestricted access to unbundled elements of 
                the network belonging to NTT and the NTT Group; and
                    (C) access to public roads for the installation of 
                facilities.

SEC. 710. REPORTS TO THE FINANCE AND WAYS AND MEANS COMMITTEES.

    (a) Reports Regarding Initiatives To Update the International 
Monetary Fund.--Section 607 of the Foreign Operations, Export 
Financing, and Related Appropriations Act, 1999 (as contained in 
section 101(d) of division A of the Omnibus Consolidated and Emergency 
Supplemental Appropriations Act, 1999) (Public Law 105-277; 112 Stat. 
2681-224), relating to international financial programs and reform, is 
amended--
            (1) by inserting ``Finance,'' after ``Foreign Relations,''; 
        and
            (2) by inserting ``, Ways and Means,'' before ``and Banking 
        and Financial Services''.
    (b) Reports on Financial Stabilization Programs.--Section 1704(b) 
of the International Financial Institutions Act (22 U.S.C. 262r-3(b)) 
is amended to read as follows:
    ``(b) Timing.--Not later than March 15, 1999, and semiannually 
thereafter, the Secretary of the Treasury shall submit to the 
Committees on Banking and Financial Services, Ways and Means, and 
International Relations of the House of Representatives and the 
Committees on Finance, Foreign Relations, and Banking, Housing, and 
Urban Affairs of the Senate a report on the matters described in 
subsection (a).''.
    (c) Annual Report on the State of the International Financial 
System, IMF Reform, and Compliance With IMF Agreements.--Section 
1705(a) of the International Financial Institutions Act (22 U.S.C. 
262r-4(a)) is amended by striking ``Committee on Banking and Financial 
Services of the House of Representatives and the Committee on Foreign 
Relations of the Senate'' and inserting ``Committees on Banking and 
Financial Services and on Ways and Means of the House of 
Representatives and the Committees on Finance and on Foreign Relations 
of the Senate''.
    (d) Audits of the IMF.--Section 1706(a) of the International 
Financial Institutions Act (22 U.S.C. 262r-5(a)) is amended by striking 
``Committee on Banking and Financial Services of the House of 
Representatives and the Committee on Foreign Relations of the Senate'' 
and inserting ``Committees on Banking and Financial Services and on 
Ways and Means of the House of Representatives and the Committees on 
Finance and on Foreign Relations of the Senate''.
    (e) Report on Protection of Borders Against Drug Traffic.--Section 
629 of the Treasury and General Government Appropriations Act, 1999 (as 
contained in section 101(h) of division A of the Omnibus Consolidated 
and Emergency Supplemental Appropriations Act, 1999) (Public Law 105-
277; 112 Stat. 2681-522), relating to general provisions, is amended by 
adding at the end the following new paragraph:
    ``(3) For purposes of paragraph (1), the term `appropriate 
congressional committees' includes the Committee on Finance of the 
Senate and the Committee on Ways and Means of the House of 
Representatives.''.

SEC. 711. CLARIFICATION OF SECTION 334 OF THE URUGUAY ROUND AGREEMENTS 
              ACT.

    (a) In General.--Section 334(b)(2) of the Uruguay Round Agreements 
Act (19 U.S.C. 3592(b)(2)) is amended--
            (1) by redesignating subparagraphs (A) and (B) as clauses 
        (i) and (ii), respectively;
            (2) in the matter preceding clause (i) (as redesignated), 
        by striking ``Notwithstanding paragraph (1)(D)'' and inserting 
        ``(A) Notwithstanding paragraph (1)(D) and except as provided 
        in subparagraphs (B) and (C)''; and
            (3) by adding at the end the following:
            ``(B) Notwithstanding paragraph (1)(C), fabric classified 
        under the HTS as of silk, cotton, man-made fiber, or vegetable 
        fiber shall be considered to originate in, and be the growth, 
        product, or manufacture of, the country, territory, or 
        possession in which the fabric is both dyed and printed when 
        accompanied by 2 or more of the following finishing operations: 
        bleaching, shrinking, fulling, napping, decating, permanent 
        stiffening, weighting, permanent embossing, or moireing.
            ``(C) Notwithstanding paragraph (1)(D), goods classified 
        under HTS heading 6117.10, 6213.00, 6214.00, 6302.22, 6302.29, 
        6302.52, 6302.53, 6302.59, 6302.92, 6302.93, 6302.99, 6303.92, 
        6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85, or 9404.90.95, 
        except for goods classified under such headings as of cotton or 
        of wool or consisting of fiber blends containing 16 percent or 
        more by weight of cotton, shall be considered to originate in, 
        and be the growth, product, or manufacture of, the country, 
        territory, or possession in which the fabric is both dyed and 
        printed when accompanied by 2 or more of the following 
        finishing operations: bleaching, shrinking, fulling, napping, 
        decating, permanent stiffening, weighting, permanent embossing, 
        or moireing.''.
    (b) Effective Date.--The amendments made by this section apply to 
goods entered, or withdrawn from warehouse for consumption, on or after 
the date of enactment of this Act.

SEC. 712. CHIEF AGRICULTURAL NEGOTIATOR.

    (a) Establishment of a Position.--There is established the position 
of Chief Agricultural Negotiator in the Office of the United States 
Trade Representative. The Chief Agricultural Negotiator shall be 
appointed by the President, with the rank of Ambassador, by and with 
the advice and consent of the Senate.
    (b) Functions.--The primary function of the Chief Agricultural 
Negotiator shall be to conduct trade negotiations and to enforce trade 
agreements relating to United States agricultural products and 
services. The Chief Agricultural Negotiator shall be a vigorous 
advocate on behalf of United States agricultural interests. The Chief 
Agricultural Negotiator shall perform such other functions as the 
United States Trade Representative may direct.
    (c) Compensation.--The Chief Agricultural Negotiator shall be paid 
at the highest rate of basic pay payable to a member of the Senior 
Executive Service.

SEC. 713. REVISION OF RETALIATION LIST OR OTHER REMEDIAL ACTION.

    Section 306(b)(2) of the Trade Act of 1974 (19 U.S.C. 2416(b)(2)) 
is amended--
            (1) by striking ``If the'' and inserting the following:
                    ``(A) Failure to implement recommendation.--If 
                the''; and
            (2) by adding at the end the following:
                    ``(B) Revision of retaliation list and action.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the event that the United 
                        States initiates a retaliation list or takes 
                        any other action described in section 301(c)(1) 
                        (A) or (B) against the goods of a foreign 
                        country or countries because of the failure of 
                        such country or countries to implement the 
                        recommendation made pursuant to a dispute 
                        settlement proceeding under the World Trade 
                        Organization, the Trade Representative shall 
                        periodically revise the list or action to 
                        affect other goods of the country or countries 
                        that have failed to implement the 
                        recommendation.
                            ``(ii) Exception.--The Trade Representative 
                        is not required to revise the retaliation list 
                        or the action described in clause (i) with 
                        respect to a country, if--
                                    ``(I) the Trade Representative 
                                determines that implementation of a 
                                recommendation made pursuant to a 
                                dispute settlement proceeding described 
                                in clause (i) by the country is 
                                imminent; or
                                    ``(II) the Trade Representative 
                                together with the petitioner involved 
                                in the initial investigation under this 
                                chapter (or if no petition was filed, 
                                the affected United States industry) 
                                agree that it is unnecessary to revise 
                                the retaliation list.
                    ``(C) Schedule for revising list or action.--The 
                Trade Representative shall, 120 days after the date the 
                retaliation list or other section 301(a) action is 
                first taken, and every 180 days thereafter, review the 
                list or action taken and revise, in whole or in part, 
                the list or action to affect other goods of the subject 
                country or countries.
                    ``(D) Standards for revising list or action.--In 
                revising any list or action against a country or 
                countries under this subsection, the Trade 
                Representative shall act in a manner that is most 
                likely to result in the country or countries 
                implementing the recommendations adopted in the dispute 
                settlement proceeding or in achieving a mutually 
                satisfactory solution to the issue that gave rise to 
                the dispute settlement proceeding. The Trade 
                Representative shall consult with the petitioner, if 
                any, involved in the initial investigation under this 
                chapter.
                    ``(E) Retaliation list.--The term `retaliation 
                list' means the list of products of a foreign country 
                or countries that have failed to comply with the report 
                of the panel or Appellate Body of the WTO and with 
                respect to which the Trade Representative is imposing 
                duties above the level that would otherwise be imposed 
                under the Harmonized Tariff Schedule of the United 
                States.''.

SEC. 714. SENSE OF CONGRESS REGARDING COMPREHENSIVE DEBT RELIEF FOR THE 
              WORLD'S POOREST COUNTRIES.

    (a) Findings.--Congress makes the following findings:
            (1) The burden of external debt has become a major 
        impediment to economic growth and poverty reduction in many of 
        the world's poorest countries.
            (2) Until recently, the United States Government and other 
        official creditors sought to address this problem by 
        rescheduling loans and in some cases providing limited debt 
        reduction.
            (3) Despite such efforts, the cumulative debt of many of 
        the world's poorest countries continued to grow beyond their 
        capacity to repay.
            (4) In 1997, the Group of Seven, the World Bank, and the 
        International Monetary Fund adopted the Heavily Indebted Poor 
        Countries Initiative (HIPC), a commitment by the international 
        community that all multilateral and bilateral creditors, acting 
        in a coordinated and concerted fashion, would reduce poor 
        country debt to a sustainable level.
            (5) The HIPC Initiative is currently undergoing reforms to 
        address concerns raised about country conditionality, the 
        amount of debt forgiven, and the allocation of savings realized 
        through the debt forgiveness program to ensure that the 
        Initiative accomplishes the goals of economic growth and 
        poverty alleviation in the world's poorest countries.
            (6) Recently, the President requested Congress to provide 
        additional resources for bilateral debt forgiveness and 
        additional United States contributions to the HIPC Trust Fund.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) Congress and the President should work together, 
        without undue delay and in concert with the international 
        community, to make comprehensive debt relief available to the 
        world's poorest countries in a manner that promotes economic 
        growth and poverty alleviation;
            (2) this program of bilateral and multilateral debt relief 
        should be designed to strengthen and expand the private sector, 
        encourage increased trade and investment, support the 
        development of free markets, and promote broad-scale economic 
        growth in beneficiary countries;
            (3) this program of debt relief should also support the 
        adoption of policies to alleviate poverty and to ensure that 
        benefits are shared widely among the population, such as 
        through initiatives to advance education, improve health, 
        combat AIDS, and promote clean water and environmental 
        protection;
            (4) these debt relief agreements should be designed and 
        implemented in a transparent manner and with the broad 
        participation of the citizenry of the debtor country and should 
        ensure that country circumstances are adequately taken into 
        account;
            (5) no country should receive the benefits of debt relief 
        if that country does not cooperate with the United States on 
        terrorism or narcotics enforcement, is a gross violator of the 
        human rights of its citizens, or is engaged in conflict or 
        spends excessively on its military; and
            (6) in order to prevent adverse impact on a key industry in 
        many developing countries, the International Monetary Fund must 
        mobilize its own resources for providing debt relief to 
        eligible countries without allowing gold to reach the open 
        market, or otherwise adversely affecting the market price of 
        gold.

SEC. 715. REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR AGRICULTURAL 
              COMMODITY PRODUCERS.

    (a) In General.--Not later than 4 months after the date of 
enactment of this Act, the Secretary of Labor, in consultation with the 
Secretary of Agriculture and the Secretary of Commerce, shall submit to 
the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report that--
            (1) examines the applicability to agricultural commodity 
        producers of trade adjustment assistance programs established 
        under title II of the Trade Act of 1974; and
            (2) sets forth recommendations to improve the operation of 
        those programs as the programs apply to agricultural commodity 
        producers or to establish a new trade adjustment assistance 
        program for agricultural commodity producers.
    (b) Contents.--In preparing the report required by subsection (a), 
the Secretary of Labor shall--
            (1) assess the degree to which the existing trade 
        adjustment assistance programs address the adverse effects on 
        agricultural commodity producers due to price suppression 
        caused by increased imports of like or directly competitive 
        agricultural commodities; and
            (2) examine the effectiveness of the program benefits 
        authorized under subchapter B of chapter 2 and chapter 3 of 
        title II of the Trade Act of 1974 in remedying the adverse 
        effects, including price suppression, caused by increased 
        imports of like or directly competitive agricultural 
        commodities.
    (c) Definitions.--In this section:
            (1) Agricultural commodity.--The term ``agricultural 
        commodity'' means any agricultural commodity, including 
        livestock, fish or harvested seafood in its raw or natural 
        state.
            (2) Agricultural commodity producer.--The term 
        ``agricultural commodity producer'' means any person who is 
        engaged in the production and sale of an agricultural commodity 
        in the United States and who owns or shares the ownership and 
        risk of loss of the agricultural commodity.

SEC. 716. STUDY ON IMPROVING AFRICAN AGRICULTURAL PRACTICES.

    (a) In general.--The United States Department of Agriculture, in 
consultation with American Land Grant Colleges and Universities and 
not-for-profit international organizations, is authorized to conduct a 
two-year study on ways to improve the flow of American farming 
techniques and practices to African farmers. The study conducted by the 
Department of Agriculture shall include an examination of ways of 
improving or utilizing--
            (1) knowledge of insect and sanitation procedures;
            (2) modern farming and soil conservation techniques;
            (3) modern farming equipment (including maintaining the 
        equipment);
            (4) marketing crop yields to prospective purchasers; and
            (5) crop maximization practices.
The study shall be submitted to the Committee on Agriculture, 
Nutrition, and Forestry of the Senate and the Committee on Agriculture 
of the House of Representatives not later than September 30, 2001.
    (b) Land Grant Colleges and Not-for-Profit Institutions.--The 
Department of Agriculture is encouraged to consult with American Land 
Grant Colleges and not-for-profit international organizations that have 
firsthand knowledge of current African farming practices.
    (c) Authorization of Funding.--There is authorized to be 
appropriated $2,000,000 to conduct the study described in subsection 
(a).

SEC. 717. ANTICORRUPTION EFFORTS.

    (a) Findings.--Congress makes the following findings:
            (1) Corruption and bribery of public officials is a major 
        problem in many African countries and represents a serious 
        threat to the development of a functioning domestic private 
        sector, to United States business and trade interests, and to 
        prospects for democracy and good governance in African 
        countries.
            (2) Of the 17 countries in sub-Saharan Africa rated by the 
        international watchdog group, Transparency International, as 
        part of the 1998 Corruption Perception Index, 13 ranked in the 
        bottom half.
            (3) The Organization for Economic Cooperation and 
        Development (OECD) Convention on Combating Bribery of Foreign 
        Public Officials in International Business Transactions, which 
        has been signed by all 29 members of the OECD plus Argentina, 
        Brazil, Bulgaria, Chile, and the Slovak Republic and which 
        entered into force on February 15, 1999, represents a 
        significant step in the elimination of bribery and corruption 
        in international commerce.
            (4) As a party to the OECD Convention on Combating Bribery 
        of Foreign Public Officials in International Business 
        Transactions, the United States should encourage the highest 
        standards possible with respect to bribery and corruption.
    (b) Sense of Congress.--It is the sense of Congress that the United 
States should encourage at every opportunity the accession of sub-
Saharan African countries, as defined in section 104, to the OECD 
Convention on Combating Bribery of Foreign Public Officials in 
International Business Transactions.

SEC. 718. SENSE OF THE SENATE REGARDING EFFORTS TO COMBAT 
              DESERTIFICATION IN AFRICA AND OTHER NATIONS.

    (a) Findings.--Congress finds that--
            (1) desertification affects approximately one-sixth of the 
        world's population and one-quarter of the total land area;
            (2) over 1,000,000 hectares of Africa are affected by 
        desertification;
            (3) dryland degradation is an underlying cause of recurrent 
        famine in Africa;
            (4) the United Nations Environment Programme estimates that 
        desertification costs the world $42,000,000,000 a year, not 
        including incalculable costs in human suffering; and
            (5) the United States can strengthen its partnerships 
        throughout Africa and other nations affected by 
        desertification, help alleviate social and economic crises 
        caused by misuse of natural resources, and reduce dependence on 
        foreign aid, by taking a leading role to combat 
        desertification.
    (b) Sense of the Senate.--It is the sense of the Senate that the 
United States should expeditiously work with the international 
community, particularly Africa and other nations affected by 
desertification, to--
            (1) strengthen international cooperation to combat 
        desertification;
            (2) promote the development of national and regional 
        strategies to address desertification and increase public 
        awareness of this serious problem and its effects;
            (3) develop and implement national action programs that 
        identify the causes of desertification and measures to address 
        it; and
            (4) recognize the essential role of local governments and 
        nongovernmental organizations in developing and implementing 
        measures to address desertification.

SEC. 719. REPORT ON WORLD TRADE ORGANIZATION MINISTERIAL.

    (a) Sense of Congress.--Congress recognizes the importance of the 
new round of international trade negotiations that will be launched at 
the World Trade Organization (WTO) Ministerial Conference in Seattle, 
Washington, from November 30 to December 3, 1999.
    (b) Report.--Not later than February 3, 2000, the United States 
Trade Representative shall submit a report to Congress regarding 
discussions on the Agreement on Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994 (the Antidumping Agreement) 
and the Agreement on Subsidies and Countervailing Measures during the 
Seattle Ministerial Conference. The report shall include a complete 
description of such discussions, including proposals made to 
renegotiate those agreements, the member government making the 
proposal, and the United States Trade Representative's response to the 
proposal, with a description as to how the response achieves United 
States trade goals.

SEC. 720. MARKING OF IMPORTED JEWELRY.

    (a) Marking Requirement.--Not later than the date that is 1 year 
after the date of enactment of this Act, the Secretary of the Treasury 
shall prescribe and implement regulations that require that all jewelry 
described in subsection (b) that enters the customs territory of the 
United States have the English name of the country of origin indelibly 
marked in a conspicuous place on such jewelry by cutting, die-sinking, 
engraving, stamping, or some other permanent method to the same extent 
as such marking is required for Native American-style jewelry under 
section 134.43 of title 19, Code of Federal Regulations, as in effect 
on October 1, 1998.
    (b) Jewelry.--The jewelry described in this subsection means any 
article described in heading 7117 of the Harmonized Tariff Schedule of 
the United States.
    (c) Definition.--As used in this section, the term ``enters the 
customs territory of the United States'' means enters, or is withdrawn 
from warehouse for consumption, in the customs territory of the United 
States.

SEC. 721. SENSE OF THE SENATE REGARDING TARIFF INVERSIONS.

    It is the sense of the Senate that United States trade policy 
should, while taking into account the conditions of United States 
producers, especially those currently facing tariff phase-outs 
negotiated under prior trade agreements, place a priority on the 
elimination or amelioration of tariff inversions that undermine the 
competitiveness of United States consuming industries.

SEC. 722. LIMITATIONS ON BENEFITS.

    (a) In General.--Notwithstanding any other provision of law, no 
benefits under this Act shall be granted to any country (or to any 
designated zone in that country) that does not meet and effectively 
enforce the standards regarding child labor established by the ILO 
Convention (No. 182) for the Elimination of the Worst Forms of Child 
Labor.
    (b) Report.--Not later than 12 months after the date of enactment 
of this Act and annually thereafter, the President, after consultation 
with the Trade Policy Review Committee, shall submit a report to 
Congress on the enforcement of, and compliance with, the standards 
described in subsection (a).

SEC. 723. AGRICULTURE TRADE NEGOTIATING OBJECTIVES AND CONSULTATIONS 
              WITH CONGRESS.

    (a) Findings.--Congress finds that--
            (1) United States agriculture contributes positively to the 
        United States balance of trade and United States agricultural 
        exports support in excess of 1,000,000 United States jobs;
            (2) United States agriculture competes successfully 
        worldwide despite the fact that United States producers are at 
        a competitive disadvantage because of the trade distorting 
        support and subsidy practices of other countries and despite 
        the fact that significant tariff and nontariff barriers exist 
        to United States exports; and
            (3) a successful conclusion of the next round of World 
        Trade Organization negotiations is critically important to the 
        United States agricultural sector.
    (b) Objectives.--The agricultural trade negotiating objectives of 
the United States with respect to the World Trade Organization 
negotiations include--
            (1) immediately eliminating all export subsidies worldwide 
        while maintaining bona fide food aid and preserving United 
        States market development and export credit programs that allow 
        the United States to compete with other foreign export 
        promotion efforts;
            (2) leveling the playing field for United States producers 
        of agricultural products by eliminating blue box subsidies and 
        disciplining domestic supports in a way that forces producers 
        to face world prices on all production in excess of domestic 
        food security needs while allowing the preservation of non-
        trade distorting programs to support family farms and rural 
        communities;
            (3) disciplining state trading enterprises by insisting on 
        transparency and banning discriminatory pricing practices that 
        amount to de facto export subsidies so that the enterprises do 
        not (except in cases of bona fide food aid) sell in foreign 
        markets at prices below domestic market prices or prices below 
        the full costs of acquiring and delivering agricultural 
        products to the foreign markets;
            (4) insisting that the Sanitary and Phytosanitary Accord 
        agreed to in the Uruguay Round applies to new technologies, 
        including biotechnology, and clarifying that labeling 
        requirements to allow consumers to make choices regarding 
        biotechnology products or other regulatory requirements cannot 
        be used as disguised barriers to trade;
            (5) increasing opportunities for United States exports of 
        agricultural products by first reducing tariff and nontariff 
        barriers to trade to the same or lower levels than exist in the 
        United States and then eliminating barriers, such as--
                    (A) restrictive or trade distorting practices that 
                adversely impact perishable or cyclical products;
                    (B) restrictive rules in the administration of 
                tariff-rate quotas; and
                    (C) unjustified sanitary and phytosanitary 
                restrictions or other unjustified technical barriers to 
                agricultural trade;
            (6) encouraging government policies that avoid price-
        depressing surpluses; and
            (7) strengthening dispute settlement procedures so that 
        countries cannot maintain unjustified restrictions on United 
        States exports in contravention of their commitments.
    (c) Consultation With Congressional Committees.--
            (1) Consultation before offer made.--Before the United 
        States Trade Representative negotiates a trade agreement that 
        would reduce tariffs on agricultural products or require a 
        change in United States agricultural law, the United States 
        Trade Representative shall consult with the Committee on 
        Agriculture, Nutrition, and Forestry and the Committee on 
        Finance of the Senate and the Committee on Agriculture and the 
        Committee on Ways and Means of the House of Representatives.
            (2) Consultation before agreement initialed.--Not less than 
        48 hours before initialing an agreement relating to 
        agricultural trade negotiated under the auspices of the World 
        Trade Organization, the United States Trade Representative 
        shall consult closely with the committees referred to in 
        paragraph (1) regarding--
                    (A) the details of the agreement;
                    (B) the potential impact of the agreement on United 
                States agricultural producers; and
                    (C) any changes in United States law necessary to 
                implement the agreement.
            (3) No secret side deals.--Any agreement or other 
        understanding (whether verbal or in writing) that relates to 
        agricultural trade that is not disclosed to the Congress before 
        legislation implementing a trade agreement is introduced in 
        either house of Congress shall not be considered to be part of 
        the agreement approved by Congress and shall have no force and 
        effect under United States law or in any dispute settlement 
        body.
    (d) Sense of the Senate.--It is the sense of the Senate that--
            (1) reaching a successful agreement on agriculture should 
        be the top priority of United States negotiators; and
            (2) if the primary competitors of the United States do not 
        reduce their trade distorting domestic supports and export 
        subsidies in accordance with the negotiating objectives 
        expressed in this section, the United States should take steps 
        to increase the leverage of United States negotiators and level 
        the playing field for United States producers in order to 
        improve United States farm income and to encourage United 
        States competitors to eliminate export subsidies and domestic 
        supports that are harmful to United States farmers and 
        ranchers.

SEC. 724. APPLICATION OF DENIAL OF FOREIGN TAX CREDIT REGARDING TRADE 
              AND INVESTMENT WITH RESPECT TO CERTAIN FOREIGN COUNTRIES.

    (a) In General.--Section 901(j) of the Internal Revenue Code of 
1986 (relating to denial of foreign tax credit, etc., regarding trade 
and investment with respect to certain foreign countries) is amended by 
adding at the end the following new paragraph:
            ``(5) Waiver of denial.--
                    ``(A) In general.--Paragraph (1) shall not apply 
                with respect to taxes paid or accrued to a country if 
                the President--
                            ``(i) determines that a waiver of the 
                        application of such paragraph is in the 
                        national interest of the United States and will 
                        expand trade and investment opportunities for 
                        United States companies in such country, and
                            ``(ii) reports such waiver under 
                        subparagraph (B).
                    ``(B) Report.--Not less than 30 days before the 
                date on which a waiver is granted under this paragraph, 
                the President shall report to Congress--
                            ``(i) the intention to grant such waiver, 
                        and
                            ``(ii) the reason for the determination 
                        under subparagraph (A)(i).''.
    (b) Effective Date.--The amendment made by this section shall apply 
on or after February 1, 2001.

SEC. 725. UNREASONABLE ACTS, POLICIES, AND PRACTICES.

    Section 301(d)(3)(B)(i) of the Trade Act of 1974 (19 U.S.C. 
2411(d)(3)(B)(i)) is amended by striking subclause (IV) and inserting 
the following:
                            ``(IV) market opportunities, including the 
                        toleration by a foreign government of 
                        systematic anticompetitive activities, which 
                        include predatory pricing, discriminatory 
                        pricing, or pricing below cost of production by 
                        enterprises or among enterprises in the foreign 
                        country (including state trading enterprises 
                        and state corporations) if the acts, policies, 
                        or practices are inconsistent with commercial 
                        practices and have the effect of restricting 
                        access of United States goods or services to 
                        the foreign market or third country markets,''.

            Amend the title so as to read: ``An Act to authorize a new 
        trade and investment policy for sub-Saharan Africa, expand 
        trade benefits to the countries in the Caribbean Basin, renew 
        the generalized system of preferences, and reauthorize the 
        trade adjustment assistance programs.''.

            Attest:

                                                             Secretary.
106th CONGRESS

  1st Session

                               H. R. 434

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                               AMENDMENTS

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