[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5662 Introduced in House (IH)]







106th CONGRESS
  2d Session
                                H. R. 5662

  To amend the Internal Revenue Code of 1986 to provide for community 
 revitalization and a 2-year extension of medical saving accounts, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 14, 2000

 Mr. Archer (for himself and Mr. Armey) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to provide for community 
 revitalization and a 2-year extension of medical saving accounts, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Community Renewal 
Tax Relief Act of 2000''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; amendment of 1986 Code.
               TITLE I--COMMUNITY RENEWAL AND NEW MARKETS

           Subtitle A--Tax Incentives for Renewal Communities

Sec. 101. Designation of and tax incentives for renewal communities.
Sec. 102. Work opportunity credit for hiring youth residing in renewal 
                            communities.
   Subtitle B--Extension and Expansion of Empowerment Zone Incentives

Sec. 111. Authority to designate nine additional empowerment zones.
Sec. 112. Extension of empowerment zone treatment through 2009.
Sec. 113. Twenty percent employment credit for all empowerment zones.
Sec. 114. Increased expensing under section 179.
Sec. 115. Higher limits on tax-exempt empowerment zone facility bonds.
Sec. 116. Nonrecognition of gain on rollover of empowerment zone 
                            investments.
Sec. 117. Increased exclusion of gain on sale of empowerment zone 
                            stock.
                   Subtitle C--New Markets Tax Credit

Sec. 121. New markets tax credit.
         Subtitle D--Improvements in Low-Income Housing Credit

Sec. 131. Modification of State ceiling on low-income housing credit.
Sec. 132. Modification of criteria for allocating housing credits among 
                            projects.
Sec. 133. Additional responsibilities of housing credit agencies.
Sec. 134. Modifications to rules relating to basis of building which is 
                            eligible for credit.
Sec. 135. Other modifications.
Sec. 136. Carryforward rules.
Sec. 137. Effective date.
     Subtitle E--Other Community Renewal and New Markets Assistance

 Part I--Provisions relating to housing and substance abuse prevention 
                             and treatment

Sec. 141. Transfer of unoccupied and substandard HUD-held housing to 
                            local governments and community development 
                            corporations.
Sec. 142. Transfer of HUD assets in revitalization areas.
Sec. 143. Risk-sharing demonstration.
Sec. 144. Prevention and treatment of substance abuse; services 
                            provided through religious organizations.
             Part II--Advisory Council on Community Renewal

Sec. 151. Short title.
Sec. 152. Establishment.
Sec. 153. Duties of Advisory Council.
Sec. 154. Membership.
Sec. 155. Powers of Advisory Council.
Sec. 156. Reports.
Sec. 157. Termination.
Sec. 158. Applicability of Federal Advisory Committee Act.
Sec. 159. Resources.
Sec. 160. Effective date.
                      Subtitle F--Other Provisions

Sec. 161. Acceleration of phase-in of increase in volume cap on private 
                            activity bonds.
Sec. 162. Modifications to expensing of environmental remediation 
                            costs.
Sec. 163. Extension of DC homebuyer tax credit.
Sec. 164. Extension of DC Zone through 2003.
Sec. 165. Extension of enhanced deduction for corporate donations of 
                            computer technology.
Sec. 166. Treatment of Indian tribal governments under Federal 
                            Unemployment Tax Act.
    TITLE II--TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS 
                                ACCOUNTS

Sec. 201. Two-year extension of availability of medical savings 
                            accounts.
Sec. 202. Medical savings accounts renamed as Archer MSAs.
           TITLE III--ADMINISTRATIVE AND TECHNICAL PROVISIONS

                 Subtitle A--Administrative Provisions

Sec. 301. Exemption of certain reporting requirements.
Sec. 302. Extension of deadlines for IRS compliance with certain notice 
                            requirements.
Sec. 303. Extension of authority for undercover operations.
Sec. 304. Confidentiality of certain documents relating to closing and 
                            similar agreements and to agreements with 
                            foreign governments.
Sec. 305. Increase in threshold for Joint Committee reports on refunds 
                            and credits.
Sec. 306. Treatment of missing children with respect to certain tax 
                            benefits.
Sec. 307. Amendments to statutes referencing yield on 52-week Treasury 
                            bills.
Sec. 308. Adjustments for Consumer Price Index error.
Sec. 309. Prevention of duplication of loss through assumption of 
                            liabilities giving rise to a deduction.
Sec. 310. Disclosure of certain information to Congressional Budget 
                            Office.
                   Subtitle B--Technical Corrections

Sec. 311. Amendments related to Ticket to Work and Work Incentives 
                            Improvement Act of 1999.
Sec. 312. Amendments related to Tax and Trade Relief Extension Act of 
                            1998.
Sec. 313. Amendments related to Internal Revenue Service Restructuring 
                            and Reform Act of 1998.
Sec. 314. Amendments related to Taxpayer Relief Act of 1997.
Sec. 315. Amendments related to Balanced Budget Act of 1997.
Sec. 316. Amendments related to Small Business Job Protection Act of 
                            1996.
Sec. 317. Amendment related to Revenue Reconciliation Act of 1990.
Sec. 318. Other technical corrections.
Sec. 319. Clerical changes.
        TITLE IV--TAX TREATMENT OF SECURITIES FUTURES CONTRACTS

Sec. 401. Tax treatment of securities futures contracts.

               TITLE I--COMMUNITY RENEWAL AND NEW MARKETS

           Subtitle A--Tax Incentives for Renewal Communities

SEC. 101. DESIGNATION OF AND TAX INCENTIVES FOR RENEWAL COMMUNITIES.

    (a) In General.--Chapter 1 is amended by adding at the end the 
following new subchapter:

                  ``Subchapter X--Renewal Communities

                              ``Part   I. Designation.
                              ``Part  II. Renewal community capital 
                                        gain; renewal community 
                                        business.
                              ``Part  III. Additional incentives.

                         ``PART I--DESIGNATION

                              ``Sec. 1400E. Designation of renewal 
                                        communities.

``SEC. 1400E. DESIGNATION OF RENEWAL COMMUNITIES.

    ``(a) Designation.--
            ``(1) Definitions.--For purposes of this title, the term 
        `renewal community' means any area--
                    ``(A) which is nominated by 1 or more local 
                governments and the State or States in which it is 
                located for designation as a renewal community 
                (hereafter in this section referred to as a `nominated 
                area'), and
                    ``(B) which the Secretary of Housing and Urban 
                Development designates as a renewal community, after 
                consultation with--
                            ``(i) the Secretaries of Agriculture, 
                        Commerce, Labor, and the Treasury; the Director 
                        of the Office of Management and Budget, and the 
                        Administrator of the Small Business 
                        Administration, and
                            ``(ii) in the case of an area on an Indian 
                        reservation, the Secretary of the Interior.
            ``(2) Number of designations.--
                    ``(A) In general.--Not more than 40 nominated areas 
                may be designated as renewal communities.
                    ``(B) Minimum designation in rural areas.--Of the 
                areas designated under paragraph (1), at least 12 must 
                be areas--
                            ``(i) which are within a local government 
                        jurisdiction or jurisdictions with a population 
                        of less than 50,000,
                            ``(ii) which are outside of a metropolitan 
                        statistical area (within the meaning of section 
                        143(k)(2)(B)), or
                            ``(iii) which are determined by the 
                        Secretary of Housing and Urban Development, 
                        after consultation with the Secretary of 
                        Commerce, to be rural areas.
            ``(3) Areas designated based on degree of poverty, etc.--
                    ``(A) In general.--Except as otherwise provided in 
                this section, the nominated areas designated as renewal 
                communities under this subsection shall be those 
                nominated areas with the highest average ranking with 
                respect to the criteria described in subparagraphs (B), 
                (C), and (D) of subsection (c)(3). For purposes of the 
                preceding sentence, an area shall be ranked within each 
                such criterion on the basis of the amount by which the 
                area exceeds such criterion, with the area which 
                exceeds such criterion by the greatest amount given the 
                highest ranking.
                    ``(B) Exception where inadequate course of action, 
                etc.--An area shall not be designated under 
                subparagraph (A) if the Secretary of Housing and Urban 
                Development determines that the course of action 
                described in subsection (d)(2) with respect to such 
                area is inadequate.
                    ``(C) Preference for enterprise communities and 
                empowerment zones.--With respect to the first 20 
                designations made under this section, a preference 
                shall be provided to those nominated areas which are 
                enterprise communities or empowerment zones (and are 
                otherwise eligible for designation under this section).
            ``(4) Limitation on designations.--
                    ``(A) Publication of regulations.--The Secretary of 
                Housing and Urban Development shall prescribe by 
                regulation no later than 4 months after the date of the 
                enactment of this section, after consultation with the 
                officials described in paragraph (1)(B)--
                            ``(i) the procedures for nominating an area 
                        under paragraph (1)(A),
                            ``(ii) the parameters relating to the size 
                        and population characteristics of a renewal 
                        community, and
                            ``(iii) the manner in which nominated areas 
                        will be evaluated based on the criteria 
                        specified in subsection (d).
                    ``(B) Time limitations.--The Secretary of Housing 
                and Urban Development may designate nominated areas as 
                renewal communities only during the period beginning on 
                the first day of the first month following the month in 
                which the regulations described in subparagraph (A) are 
                prescribed and ending on December 31, 2001.
                    ``(C) Procedural rules.--The Secretary of Housing 
                and Urban Development shall not make any designation of 
                a nominated area as a renewal community under paragraph 
                (2) unless--
                            ``(i) the local governments and the States 
                        in which the nominated area is located have the 
                        authority--
                                    ``(I) to nominate such area for 
                                designation as a renewal community,
                                    ``(II) to make the State and local 
                                commitments described in subsection 
                                (d), and
                                    ``(III) to provide assurances 
                                satisfactory to the Secretary of 
                                Housing and Urban Development that such 
                                commitments will be fulfilled,
                            ``(ii) a nomination regarding such area is 
                        submitted in such a manner and in such form, 
                        and contains such information, as the Secretary 
                        of Housing and Urban Development shall by 
                        regulation prescribe, and
                            ``(iii) the Secretary of Housing and Urban 
                        Development determines that any information 
                        furnished is reasonably accurate.
            ``(5) Nomination process for indian reservations.--For 
        purposes of this subchapter, in the case of a nominated area on 
        an Indian reservation, the reservation governing body (as 
        determined by the Secretary of the Interior) shall be treated 
        as being both the State and local governments with respect to 
        such area.
    ``(b) Period for Which Designation Is in Effect.--
            ``(1) In general.--Any designation of an area as a renewal 
        community shall remain in effect during the period beginning on 
        January 1, 2002, and ending on the earliest of--
                    ``(A) December 31, 2009,
                    ``(B) the termination date designated by the State 
                and local governments in their nomination, or
                    ``(C) the date the Secretary of Housing and Urban 
                Development revokes such designation.
            ``(2) Revocation of designation.--The Secretary of Housing 
        and Urban Development may revoke the designation under this 
        section of an area if such Secretary determines that the local 
        government or the State in which the area is located--
                    ``(A) has modified the boundaries of the area, or
                    ``(B) is not complying substantially with, or fails 
                to make progress in achieving, the State or local 
                commitments, respectively, described in subsection (d).
            ``(3) Earlier termination of certain benefits if earlier 
        termination of designation.--If the designation of an area as a 
        renewal community terminates before December 31, 2009, the day 
        after the date of such termination shall be substituted for 
        `January 1, 2010' each place it appears in sections 1400F and 
        1400J with respect to such area.
    ``(c) Area and Eligibility Requirements.--
            ``(1) In general.--The Secretary of Housing and Urban 
        Development may designate a nominated area as a renewal 
        community under subsection (a) only if the area meets the 
        requirements of paragraphs (2) and (3) of this subsection.
            ``(2) Area requirements.--A nominated area meets the 
        requirements of this paragraph if--
                    ``(A) the area is within the jurisdiction of one or 
                more local governments,
                    ``(B) the boundary of the area is continuous, and
                    ``(C) the area--
                            ``(i) has a population of not more than 
                        200,000 and at least--
                                    ``(I) 4,000 if any portion of such 
                                area (other than a rural area described 
                                in subsection (a)(2)(B)(i)) is located 
                                within a metropolitan statistical area 
                                (within the meaning of section 
                                143(k)(2)(B)) which has a population of 
                                50,000 or greater, or
                                    ``(II) 1,000 in any other case, or
                            ``(ii) is entirely within an Indian 
                        reservation (as determined by the Secretary of 
                        the Interior).
            ``(3) Eligibility requirements.--A nominated area meets the 
        requirements of this paragraph if the State and the local 
        governments in which it is located certify in writing (and the 
        Secretary of Housing and Urban Development, after such review 
        of supporting data as he deems appropriate, accepts such 
        certification) that--
                    ``(A) the area is one of pervasive poverty, 
                unemployment, and general distress,
                    ``(B) the unemployment rate in the area, as 
                determined by the most recent available data, was at 
                least 1\1/2\ times the national unemployment rate for 
                the period to which such data relate,
                    ``(C) the poverty rate for each population census 
                tract within the nominated area is at least 20 percent, 
                and
                    ``(D) in the case of an urban area, at least 70 
                percent of the households living in the area have 
                incomes below 80 percent of the median income of 
                households within the jurisdiction of the local 
                government (determined in the same manner as under 
                section 119(b)(2) of the Housing and Community 
                Development Act of 1974).
            ``(4) Consideration of other factors.--The Secretary of 
        Housing and Urban Development, in selecting any nominated area 
        for designation as a renewal community under this section--
                    ``(A) shall take into account--
                            ``(i) the extent to which such area has a 
                        high incidence of crime, or
                            ``(ii) if such area has census tracts 
                        identified in the May 12, 1998, report of the 
                        General Accounting Office regarding the 
                        identification of economically distressed 
                        areas, and
                    ``(B) with respect to 1 of the areas to be 
                designated under subsection (a)(2)(B), may, in lieu of 
                any criteria described in paragraph (3), take into 
                account the existence of outmigration from the area.
    ``(d) Required State and Local Commitments.--
            ``(1) In general.--The Secretary of Housing and Urban 
        Development may designate any nominated area as a renewal 
        community under subsection (a) only if--
                    ``(A) the local government and the State in which 
                the area is located agree in writing that, during any 
                period during which the area is a renewal community, 
                such governments will follow a specified course of 
                action which meets the requirements of paragraph (2) 
                and is designed to reduce the various burdens borne by 
                employers or employees in such area, and
                    ``(B) the economic growth promotion requirements of 
                paragraph (3) are met.
            ``(2) Course of action.--
                    ``(A) In general.--A course of action meets the 
                requirements of this paragraph if such course of action 
                is a written document, signed by a State (or local 
                government) and neighborhood organizations, which 
                evidences a partnership between such State or 
                government and community-based organizations and which 
                commits each signatory to specific and measurable 
                goals, actions, and timetables. Such course of action 
                shall include at least 4 of the following:
                            ``(i) A reduction of tax rates or fees 
                        applying within the renewal community.
                            ``(ii) An increase in the level of 
                        efficiency of local services within the renewal 
                        community.
                            ``(iii) Crime reduction strategies, such as 
                        crime prevention (including the provision of 
                        crime prevention services by nongovernmental 
                        entities).
                            ``(iv) Actions to reduce, remove, simplify, 
                        or streamline governmental requirements 
                        applying within the renewal community.
                            ``(v) Involvement in the program by private 
                        entities, organizations, neighborhood 
                        organizations, and community groups, 
                        particularly those in the renewal community, 
                        including a commitment from such private 
                        entities to provide jobs and job training for, 
                        and technical, financial, or other assistance 
                        to, employers, employees, and residents from 
                        the renewal community.
                            ``(vi) The gift (or sale at below fair 
                        market value) of surplus real property (such as 
                        land, homes, and commercial or industrial 
                        structures) in the renewal community to 
                        neighborhood organizations, community 
                        development corporations, or private companies.
                    ``(B) Recognition of past efforts.--For purposes of 
                this section, in evaluating the course of action agreed 
                to by any State or local government, the Secretary of 
                Housing and Urban Development shall take into account 
                the past efforts of such State or local government in 
                reducing the various burdens borne by employers and 
                employees in the area involved.
            ``(3) Economic growth promotion requirements.--The economic 
        growth promotion requirements of this paragraph are met with 
        respect to a nominated area if the local government and the 
        State in which such area is located certify in writing that 
        such government and State (respectively) have repealed or 
        reduced, will not enforce, or will reduce within the nominated 
        area at least 4 of the following:
                    ``(A) Licensing requirements for occupations that 
                do not ordinarily require a professional degree.
                    ``(B) Zoning restrictions on home-based businesses 
                which do not create a public nuisance.
                    ``(C) Permit requirements for street vendors who do 
                not create a public nuisance.
                    ``(D) Zoning or other restrictions that impede the 
                formation of schools or child care centers.
                    ``(E) Franchises or other restrictions on 
                competition for businesses providing public services, 
                including taxicabs, jitneys, cable television, or trash 
                hauling.
        This paragraph shall not apply to the extent that such 
        regulation of businesses and occupations is necessary for and 
        well-tailored to the protection of health and safety.
    ``(e) Coordination With Treatment of Empowerment Zones and 
Enterprise Communities.--For purposes of this title, the designation 
under section 1391 of any area as an empowerment zone or enterprise 
community shall cease to be in effect as of the date that the 
designation of any portion of such area as a renewal community takes 
effect.
    ``(f) Definitions and Special Rules.--For purposes of this 
subchapter--
            ``(1) Governments.--If more than one government seeks to 
        nominate an area as a renewal community, any reference to, or 
        requirement of, this section shall apply to all such 
        governments.
            ``(2) Local government.--The term `local government' 
        means--
                    ``(A) any county, city, town, township, parish, 
                village, or other general purpose political subdivision 
                of a State, and
                    ``(B) any combination of political subdivisions 
                described in subparagraph (A) recognized by the 
                Secretary of Housing and Urban Development.
            ``(3) Application of rules relating to census tracts.--The 
        rules of section 1392(b)(4) shall apply.
            ``(4) Census data.--Population and poverty rate shall be 
        determined by using 1990 census data.

 ``PART II--RENEWAL COMMUNITY CAPITAL GAIN; RENEWAL COMMUNITY BUSINESS

                              ``Sec. 1400F. Renewal community capital 
                                        gain.
                              ``Sec. 1400G. Renewal community business 
                                        defined.

``SEC. 1400F. RENEWAL COMMUNITY CAPITAL GAIN.

    ``(a) General Rule.--Gross income does not include any qualified 
capital gain from the sale or exchange of a qualified community asset 
held for more than 5 years.
    ``(b) Qualified Community Asset.--For purposes of this section--
            ``(1) In general.--The term `qualified community asset' 
        means--
                    ``(A) any qualified community stock,
                    ``(B) any qualified community partnership interest, 
                and
                    ``(C) any qualified community business property.
            ``(2) Qualified community stock.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `qualified community stock' 
                means any stock in a domestic corporation if--
                            ``(i) such stock is acquired by the 
                        taxpayer after December 31, 2001, and before 
                        January 1, 2010, at its original issue 
                        (directly or through an underwriter) from the 
                        corporation solely in exchange for cash,
                            ``(ii) as of the time such stock was 
                        issued, such corporation was a renewal 
                        community business (or, in the case of a new 
                        corporation, such corporation was being 
                        organized for purposes of being a renewal 
                        community business), and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such stock, such 
                        corporation qualified as a renewal community 
                        business.
                    ``(B) Redemptions.--A rule similar to the rule of 
                section 1202(c)(3) shall apply for purposes of this 
                paragraph.
            ``(3) Qualified community partnership interest.--The term 
        `qualified community partnership interest' means any capital or 
        profits interest in a domestic partnership if--
                    ``(A) such interest is acquired by the taxpayer 
                after December 31, 2001, and before January 1, 2010, 
                from the partnership solely in exchange for cash,
                    ``(B) as of the time such interest was acquired, 
                such partnership was a renewal community business (or, 
                in the case of a new partnership, such partnership was 
                being organized for purposes of being a renewal 
                community business), and
                    ``(C) during substantially all of the taxpayer's 
                holding period for such interest, such partnership 
                qualified as a renewal community business.
        A rule similar to the rule of paragraph (2)(B) shall apply for 
        purposes of this paragraph.
            ``(4) Qualified community business property.--
                    ``(A) In general.--The term `qualified community 
                business property' means tangible property if--
                            ``(i) such property was acquired by the 
                        taxpayer by purchase (as defined in section 
                        179(d)(2)) after December 31, 2001, and before 
                        January 1, 2010,
                            ``(ii) the original use of such property in 
                        the renewal community commences with the 
                        taxpayer, and
                            ``(iii) during substantially all of the 
                        taxpayer's holding period for such property, 
                        substantially all of the use of such property 
                        was in a renewal community business of the 
                        taxpayer.
                    ``(B) Special rule for substantial improvements.--
                The requirements of clauses (i) and (ii) of 
                subparagraph (A) shall be treated as satisfied with 
                respect to--
                            ``(i) property which is substantially 
                        improved by the taxpayer before January 1, 
                        2010, and
                            ``(ii) any land on which such property is 
                        located.
                The determination of whether a property is 
                substantially improved shall be made under clause (ii) 
                of section 1400B(b)(4)(B), except that `December 31, 
                2001' shall be substituted for `December 31, 1997' in 
                such clause.
    ``(c) Qualified Capital Gain.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `qualified capital gain' means any gain 
        recognized on the sale or exchange of--
                    ``(A) a capital asset, or
                    ``(B) property used in the trade or business (as 
                defined in section 1231(b)).
            ``(2) Gain before 2002 or after 2014 not qualified.--The 
        term `qualified capital gain' shall not include any gain 
        attributable to periods before January 1, 2002, or after 
        December 31, 2014.
            ``(3) Certain rules to apply.--Rules similar to the rules 
        of paragraphs (3), (4), and (5) of section 1400B(e) shall apply 
        for purposes of this subsection.
    ``(d) Certain Rules To Apply.--For purposes of this section, rules 
similar to the rules of paragraphs (5), (6), and (7) of subsection (b), 
and subsections (f) and (g), of section 1400B shall apply; except that 
for such purposes section 1400B(g)(2) shall be applied by substituting 
`January 1, 2002' for `January 1, 1998' and `December 31, 2014' for 
`December 31, 2008'.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out the purposes of this section, 
including regulations to prevent the abuse of the purposes of this 
section.

``SEC. 1400G. RENEWAL COMMUNITY BUSINESS DEFINED.

    ``For purposes of this subchapter, the term `renewal community 
business' means any entity or proprietorship which would be a qualified 
business entity or qualified proprietorship under section 1397C if 
references to renewal communities were substituted for references to 
empowerment zones in such section.

                   ``PART III--ADDITIONAL INCENTIVES

                              ``Sec. 1400H. Renewal community 
                                        employment credit.
                              ``Sec. 1400I. Commercial revitalization 
                                        deduction.
                              ``Sec. 1400J. Increase in expensing under 
                                        section 179.

``SEC. 1400H. RENEWAL COMMUNITY EMPLOYMENT CREDIT.

    ``(a) In General.--Subject to the modification in subsection (b), a 
renewal community shall be treated as an empowerment zone for purposes 
of section 1396 with respect to wages paid or incurred after December 
31, 2001.
    ``(b) Modification.--In applying section 1396 with respect to 
renewal communities--
            ``(1) the applicable percentage shall be 15 percent, and
            ``(2) subsection (c) thereof shall be applied by 
        substituting `$10,000' for `$15,000' each place it appears.

``SEC. 1400I. COMMERCIAL REVITALIZATION DEDUCTION.

    ``(a) General Rule.--At the election of the taxpayer, either--
            ``(1) one-half of any qualified revitalization expenditures 
        chargeable to capital account with respect to any qualified 
        revitalization building shall be allowable as a deduction for 
        the taxable year in which the building is placed in service, or
            ``(2) a deduction for all such expenditures shall be 
        allowable ratably over the 120-month period beginning with the 
        month in which the building is placed in service.
    ``(b) Qualified Revitalization Buildings and Expenditures.--For 
purposes of this section--
            ``(1) Qualified revitalization building.--The term 
        `qualified revitalization building' means any building (and its 
        structural components) if--
                    ``(A) the building is placed in service by the 
                taxpayer in a renewal community and the original use of 
                the building begins with the taxpayer, or
                    ``(B) in the case of such building not described in 
                subparagraph (A), such building--
                            ``(i) is substantially rehabilitated 
                        (within the meaning of section 47(c)(1)(C)) by 
                        the taxpayer, and
                            ``(ii) is placed in service by the taxpayer 
                        after the rehabilitation in a renewal 
                        community.
            ``(2) Qualified revitalization expenditure.--
                    ``(A) In general.--The term `qualified 
                revitalization expenditure' means any amount properly 
                chargeable to capital account for property for which 
                depreciation is allowable under section 168 (without 
                regard to this section) and which is--
                            ``(i) nonresidential real property (as 
                        defined in section 168(e)), or
                            ``(ii) section 1250 property (as defined in 
                        section 1250(c)) which is functionally related 
                        and subordinate to property described in clause 
                        (i).
                    ``(B) Certain expenditures not included.--
                            ``(i) Acquisition cost.--In the case of a 
                        building described in paragraph (1)(B), the 
                        cost of acquiring the building or interest 
                        therein shall be treated as a qualified 
                        revitalization expenditure only to the extent 
                        that such cost does not exceed 30 percent of 
                        the aggregate qualified revitalization 
                        expenditures (determined without regard to such 
                        cost) with respect to such building.
                            ``(ii) Credits.--The term `qualified 
                        revitalization expenditure' does not include 
                        any expenditure which the taxpayer may take 
                        into account in computing any credit allowable 
                        under this title unless the taxpayer elects to 
                        take the expenditure into account only for 
                        purposes of this section.
    ``(c) Dollar Limitation.--The aggregate amount which may be treated 
as qualified revitalization expenditures with respect to any qualified 
revitalization building shall not exceed the lesser of--
            ``(1) $10,000,000, or
            ``(2) the commercial revitalization expenditure amount 
        allocated to such building under this section by the commercial 
        revitalization agency for the State in which the building is 
        located.
    ``(d) Commercial Revitalization Expenditure Amount.--
            ``(1) In general.--The aggregate commercial revitalization 
        expenditure amount which a commercial revitalization agency may 
        allocate for any calendar year is the amount of the State 
        commercial revitalization expenditure ceiling determined under 
        this paragraph for such calendar year for such agency.
            ``(2) State commercial revitalization expenditure 
        ceiling.--The State commercial revitalization expenditure 
        ceiling applicable to any State--
                    ``(A) for each calendar year after 2001 and before 
                2010 is $12,000,000 for each renewal community in the 
                State, and
                    ``(B) for each calendar year thereafter is zero.
            ``(3) Commercial revitalization agency.--For purposes of 
        this section, the term `commercial revitalization agency' means 
        any agency authorized by a State to carry out this section.
            ``(4) Time and manner of allocations.--Allocations under 
        this section shall be made at the same time and in the same 
        manner as under paragraphs (1) and (7) of section 42(h).
    ``(e) Responsibilities of Commercial Revitalization Agencies.--
            ``(1) Plans for allocation.--Notwithstanding any other 
        provision of this section, the commercial revitalization 
        expenditure amount with respect to any building shall be zero 
        unless--
                    ``(A) such amount was allocated pursuant to a 
                qualified allocation plan of the commercial 
                revitalization agency which is approved (in accordance 
                with rules similar to the rules of section 147(f)(2) 
                (other than subparagraph (B)(ii) thereof)) by the 
                governmental unit of which such agency is a part, and
                    ``(B) such agency notifies the chief executive 
                officer (or its equivalent) of the local jurisdiction 
                within which the building is located of such allocation 
                and provides such individual a reasonable opportunity 
                to comment on the allocation.
            ``(2) Qualified allocation plan.--For purposes of this 
        subsection, the term `qualified allocation plan' means any 
        plan--
                    ``(A) which sets forth selection criteria to be 
                used to determine priorities of the commercial 
                revitalization agency which are appropriate to local 
                conditions,
                    ``(B) which considers--
                            ``(i) the degree to which a project 
                        contributes to the implementation of a 
                        strategic plan that is devised for a renewal 
                        community through a citizen participation 
                        process,
                            ``(ii) the amount of any increase in 
                        permanent, full-time employment by reason of 
                        any project, and
                            ``(iii) the active involvement of residents 
                        and nonprofit groups within the renewal 
                        community, and
                    ``(C) which provides a procedure that the agency 
                (or its agent) will follow in monitoring compliance 
                with this section.
    ``(f) Special Rules.--
            ``(1) Deduction in lieu of depreciation.--The deduction 
        provided by this section for qualified revitalization 
        expenditures shall--
                    ``(A) with respect to the deduction determined 
                under subsection (a)(1), be in lieu of any depreciation 
                deduction otherwise allowable on account of one-half of 
                such expenditures, and
                    ``(B) with respect to the deduction determined 
                under subsection (a)(2), be in lieu of any depreciation 
                deduction otherwise allowable on account of all of such 
                expenditures.
            ``(2) Basis adjustment, etc.--For purposes of sections 1016 
        and 1250, the deduction under this section shall be treated in 
        the same manner as a depreciation deduction. For purposes of 
        section 1250(b)(5), the straight line method of adjustment 
        shall be determined without regard to this section.
            ``(3) Substantial rehabilitations treated as separate 
        buildings.--A substantial rehabilitation (within the meaning of 
        section 47(c)(1)(C)) of a building shall be treated as a 
        separate building for purposes of subsection (a).
            ``(4) Clarification of allowance of deduction under minimum 
        tax.--Notwithstanding section 56(a)(1), the deduction under 
        this section shall be allowed in determining alternative 
        minimum taxable income under section 55.
    ``(g) Termination.--This section shall not apply to any building 
placed in service after December 31, 2009.

``SEC. 1400J. INCREASE IN EXPENSING UNDER SECTION 179.

    ``(a) In General.--For purposes of section 1397A--
            ``(1) a renewal community shall be treated as an 
        empowerment zone,
            ``(2) a renewal community business shall be treated as an 
        enterprise zone business, and
            ``(3) qualified renewal property shall be treated as 
        qualified zone property.
    ``(b) Qualified Renewal Property.--For purposes of this section--
            ``(1) In general.--The term `qualified renewal property' 
        means any property to which section 168 applies (or would apply 
        but for section 179) if--
                    ``(A) such property was acquired by the taxpayer by 
                purchase (as defined in section 179(d)(2)) after 
                December 31, 2001, and before January 1, 2010, and
                    ``(B) such property would be qualified zone 
                property (as defined in section 1397D) if references to 
                renewal communities were substituted for references to 
                empowerment zones in section 1397D.
            ``(2) Certain rules to apply.--The rules of subsections 
        (a)(2) and (b) of section 1397D shall apply for purposes of 
        this section.''.
    (b) Exception for Commercial Revitalization Deduction From Passive 
Loss Rules.--
            (1) Paragraph (3) of section 469(i) is amended by 
        redesignating subparagraphs (C), (D), and (E) as subparagraphs 
        (D), (E), and (F), respectively, and by inserting after 
        subparagraph (B) the following new subparagraph:
                    ``(C) Exception for commercial revitalization 
                deduction.--Subparagraph (A) shall not apply to any 
                portion of the passive activity loss for any taxable 
                year which is attributable to the commercial 
                revitalization deduction under section 1400I.''.
            (2) Subparagraph (E) of section 469(i)(3), as redesignated 
        by subparagraph (A), is amended to read as follows:
                    ``(E) Ordering rules to reflect exceptions and 
                separate phase-outs.--If subparagraph (B), (C), or (D) 
                applies for a taxable year, paragraph (1) shall be 
                applied--
                            ``(i) first to the portion of the passive 
                        activity loss to which subparagraph (C) does 
                        not apply,
                            ``(ii) second to the portion of the passive 
                        activity credit to which subparagraph (B) or 
                        (D) does not apply,
                            ``(iii) third to the portion of such credit 
                        to which subparagraph (B) applies,
                            ``(iv) fourth to the portion of such loss 
                        to which subparagraph (C) applies, and
                            ``(v) then to the portion of such credit to 
                        which subparagraph (D) applies.''.
            (3)(A) Subparagraph (B) of section 469(i)(6) is amended by 
        striking ``or'' at the end of clause (i), by striking the 
        period at the end of clause (ii) and inserting ``, or'', and by 
        adding at the end the following new clause:
                            ``(iii) any deduction under section 1400I 
                        (relating to commercial revitalization 
                        deduction).''.
            (B) The heading for such subparagraph (B) is amended by 
        striking ``or rehabilitation credit'' and inserting ``, 
        rehabilitation credit, or commercial revitalization 
        deduction''.
    (c) Audit and Report.--Not later than January 31 of 2004, 2007, and 
2010, the Comptroller General of the United States shall, pursuant to 
an audit of the renewal community program established under section 
1400E of the Internal Revenue Code of 1986 (as added by subsection (a)) 
and the empowerment zone and enterprise community program under 
subchapter U of chapter 1 of such Code, report to Congress on such 
program and its effect on poverty, unemployment, and economic growth 
within the designated renewal communities, empowerment zones, and 
enterprise communities.
    (d) Clerical Amendment.--The table of subchapters for chapter 1 is 
amended by adding at the end the following new item:

        ``Subchapter X. Renewal Communities.''.

SEC. 102. WORK OPPORTUNITY CREDIT FOR HIRING YOUTH RESIDING IN RENEWAL 
              COMMUNITIES.

    (a) High-Risk Youth.--Subparagraphs (A)(ii) and (B) of section 
51(d)(5) are each amended by striking ``empowerment zone or enterprise 
community'' and inserting ``empowerment zone, enterprise community, or 
renewal community''.
    (b) Qualified Summer Youth Employee.--Clause (iv) of section 
51(d)(7)(A) is amended by striking ``empowerment zone or enterprise 
community'' and inserting ``empowerment zone, enterprise community, or 
renewal community''.
    (c) Headings.--Paragraphs (5)(B) and (7)(C) of section 51(d) are 
each amended by inserting ``or community'' in the heading after 
``zone''.
    (d) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after December 31, 
2001.

   Subtitle B--Extension and Expansion of Empowerment Zone Incentives

SEC. 111. AUTHORITY TO DESIGNATE NINE ADDITIONAL EMPOWERMENT ZONES.

    Section 1391 is amended by adding at the end the following new 
subsection:
    ``(h) Additional Designations Permitted.--
            ``(1) In general.--In addition to the areas designated 
        under subsections (a) and (g), the appropriate Secretaries may 
        designate in the aggregate an additional 9 nominated areas as 
        empowerment zones under this section, subject to the 
        availability of eligible nominated areas. Of that number, not 
        more than seven may be designated in urban areas and not more 
        than 2 may be designated in rural areas.
            ``(2) Period designations may be made and take effect.--A 
        designation may be made under this subsection after the date of 
        the enactment of this subsection and before January 1, 2002. 
        Subject to subparagraphs (B) and (C) of subsection (d)(1), such 
        designations shall remain in effect during the period beginning 
        on January 1, 2002, and ending on December 31, 2009.
            ``(3) Modifications to eligibility criteria, etc.--The 
        rules of subsection (g)(3) shall apply to designations under 
        this subsection.
            ``(4) Empowerment zones which become renewal communities.--
        The number of areas which may be designated as empowerment 
        zones under this subsection shall be increased by 1 for each 
        area which ceases to be an empowerment zone by reason of 
        section 1400E(e). Each additional area designated by reason of 
        the preceding sentence shall have the same urban or rural 
        character as the area it is replacing.''.

SEC. 112. EXTENSION OF EMPOWERMENT ZONE TREATMENT THROUGH 2009.

    Subparagraph (A) of section 1391(d)(1) (relating to period for 
which designation is in effect) is amended to read as follows:
                    ``(A)(i) in the case of an empowerment zone, 
                December 31, 2009, or
                    ``(ii) in the case of an enterprise community, the 
                close of the 10th calendar year beginning on or after 
                such date of designation,''.

SEC. 113. TWENTY PERCENT EMPLOYMENT CREDIT FOR ALL EMPOWERMENT ZONES.

    (a) 20 Percent Credit.--Subsection (b) of section 1396 (relating to 
empowerment zone employment credit) is amended to read as follows:
    ``(b) Applicable Percentage.--For purposes of this section, the 
applicable percentage is 20 percent.''.
    (b) All Empowerment Zones Eligible for Credit.--Section 1396 is 
amended by striking subsection (e).
    (c) Conforming Amendment.--Subsection (d) of section 1400 is 
amended to read as follows:
    ``(d) Special Rule for Application of Employment Credit.--With 
respect to the DC Zone, section 1396(d)(1)(B) (relating to empowerment 
zone employment credit) shall be applied by substituting `the District 
of Columbia' for `such empowerment zone'.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to wages paid or incurred after December 31, 2001.

SEC. 114. INCREASED EXPENSING UNDER SECTION 179.

    (a) In General.--Subparagraph (A) of section 1397A(a)(1) is amended 
by striking ``$20,000'' and inserting ``$35,000''.
    (b) Expensing for Property Used in Developable Sites.--Section 
1397A is amended by striking subsection (c).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.

SEC. 115. HIGHER LIMITS ON TAX-EXEMPT EMPOWERMENT ZONE FACILITY BONDS.

    (a) In General.--Paragraph (3) of section 1394(f) (relating to 
bonds for empowerment zones designated under section 1391(g)) is 
amended to read as follows:
            ``(3) Empowerment zone facility bond.--For purposes of this 
        subsection, the term `empowerment zone facility bond' means any 
        bond which would be described in subsection (a) if--
                    ``(A) in the case of obligations issued before 
                January 1, 2002, only empowerment zones designated 
                under section 1391(g) were taken into account under 
                sections 1397C and 1397D, and
                    ``(B) in the case of obligations issued after 
                December 31, 2001, all empowerment zones (other than 
                the District of Columbia Enterprise Zone) were taken 
                into account under sections 1397C and 1397D.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to obligations issued after December 31, 2001.

SEC. 116. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE 
              INVESTMENTS.

    (a) In General.--Part III of subchapter U of chapter 1 is amended--
            (1) by redesignating subpart C as subpart D,
            (2) by redesignating sections 1397B and 1397C as sections 
        1397C and 1397D, respectively, and
            (3) by inserting after subpart B the following new subpart:

  ``Subpart C--Nonrecognition of Gain on Rollover of Empowerment Zone 
                              Investments

                              ``Sec. 1397B. Nonrecognition of gain on 
                                        rollover of empowerment zone 
                                        investments.

``SEC. 1397B. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWERMENT ZONE 
              INVESTMENTS.

    ``(a) Nonrecognition of Gain.--In the case of any sale of a 
qualified empowerment zone asset held by the taxpayer for more than 1 
year and with respect to which such taxpayer elects the application of 
this section, gain from such sale shall be recognized only to the 
extent that the amount realized on such sale exceeds--
            ``(1) the cost of any qualified empowerment zone asset 
        (with respect to the same zone as the asset sold) purchased by 
        the taxpayer during the 60-day period beginning on the date of 
        such sale, reduced by
            ``(2) any portion of such cost previously taken into 
        account under this section.
    ``(b) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Qualified empowerment zone asset.--
                    ``(A) In general.--The term `qualified empowerment 
                zone asset' means any property which would be a 
                qualified community asset (as defined in section 1400F) 
                if in section 1400F--
                            ``(i) references to empowerment zones were 
                        substituted for references to renewal 
                        communities,
                            ``(ii) references to enterprise zone 
                        businesses (as defined in section 1397C) were 
                        substituted for references to renewal community 
                        businesses, and
                            ``(iii) the date of the enactment of this 
                        paragraph were substituted for `December 31, 
                        2001' each place it appears.
                    ``(B) Treatment of dc zone.--The District of 
                Columbia Enterprise Zone shall not be treated as an 
                empowerment zone for purposes of this section.
            ``(2) Certain gain not eligible for rollover.--This section 
        shall not apply to--
                    ``(A) any gain which is treated as ordinary income 
                for purposes of this subtitle, and
                    ``(B) any gain which is attributable to real 
                property, or an intangible asset, which is not an 
                integral part of an enterprise zone business.
            ``(3) Purchase.--A taxpayer shall be treated as having 
        purchased any property if, but for paragraph (4), the 
        unadjusted basis of such property in the hands of the taxpayer 
        would be its cost (within the meaning of section 1012).
            ``(4) Basis adjustments.--If gain from any sale is not 
        recognized by reason of subsection (a), such gain shall be 
        applied to reduce (in the order acquired) the basis for 
        determining gain or loss of any qualified empowerment zone 
        asset which is purchased by the taxpayer during the 60-day 
        period described in subsection (a). This paragraph shall not 
        apply for purposes of section 1202.
            ``(5) Holding period.--For purposes of determining whether 
        the nonrecognition of gain under subsection (a) applies to any 
        qualified empowerment zone asset which is sold--
                    ``(A) the taxpayer's holding period for such asset 
                and the asset referred to in subsection (a)(1) shall be 
                determined without regard to section 1223, and
                    ``(B) only the first year of the taxpayer's holding 
                period for the asset referred to in subsection (a)(1) 
                shall be taken into account for purposes of paragraphs 
                (2)(A)(iii), (3)(C), and (4)(A)(iii) of section 
                1400F(b).''.
    (b) Conforming Amendments.--
            (1) Paragraph (23) of section 1016(a) is amended--
                    (A) by striking ``or 1045'' and inserting ``1045, 
                or 1397B'', and
                    (B) by striking ``or 1045(b)(4)'' and inserting 
                ``1045(b)(4), or 1397B(b)(4)''.
            (2) Paragraph (15) of section 1223 is amended to read as 
        follows:
            ``(15) Except for purposes of sections 1202(a)(2), 
        1202(c)(2)(A), 1400B(b), and 1400F(b), in determining the 
        period for which the taxpayer has held property the acquisition 
        of which resulted under section 1045 or 1397B in the 
        nonrecognition of any part of the gain realized on the sale of 
        other property, there shall be included the period for which 
        such other property has been held as of the date of such 
        sale.''.
            (3) Paragraph (2) of section 1394(b) is amended--
                    (A) by striking ``section 1397C'' and inserting 
                ``section 1397D'', and
                    (B) by striking ``section 1397C(a)(2)'' and 
                inserting ``section 1397D(a)(2)''.
            (4) Paragraph (3) of section 1394(b) is amended--
                    (A) by striking ``section 1397B'' each place it 
                appears and inserting ``section 1397C'', and
                    (B) by striking ``section 1397B(d)'' and inserting 
                ``section 1397C(d)''.
            (5) Sections 1400(e) and 1400B(c) are each amended by 
        striking ``section 1397B'' each place it appears and inserting 
        ``section 1397C''.
            (6) The table of subparts for part III of subchapter U of 
        chapter 1 is amended by striking the last item and inserting 
        the following new items:

                              ``Subpart C. Nonrecognition of gain on 
                                        rollover of empowerment zone 
                                        investments.
                              ``Subpart D. General provisions.''.
            (7) The table of sections for subpart D of such part III is 
        amended to read as follows:

                              ``Sec. 1397C. Enterprise zone business 
                                        defined.
                              ``Sec. 1397D. Qualified zone property 
                                        defined.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to qualified empowerment zone assets acquired after the date of 
the enactment of this Act.

SEC. 117. INCREASED EXCLUSION OF GAIN ON SALE OF EMPOWERMENT ZONE 
              STOCK.

    (a) In General.--Subsection (a) of section 1202 is amended to read 
as follows:
    ``(a) Exclusion.--
            ``(1) In general.--In the case of a taxpayer other than a 
        corporation, gross income shall not include 50 percent of any 
        gain from the sale or exchange of qualified small business 
        stock held for more than 5 years.
            ``(2) Empowerment zone businesses.--
                    ``(A) In general.--In the case of qualified small 
                business stock acquired after the date of the enactment 
                of this paragraph in a corporation which is a qualified 
                business entity (as defined in section 1397C(b)) during 
                substantially all of the taxpayer's holding period for 
                such stock, paragraph (1) shall be applied by 
                substituting `60 percent' for `50 percent'.
                    ``(B) Certain rules to apply.--Rules similar to the 
                rules of paragraphs (5) and (7) of section 1400B(b) 
                shall apply for purposes of this paragraph.
                    ``(C) Gain after 2014 not qualified.--Subparagraph 
                (A) shall not apply to gain attributable to periods 
                after December 31, 2014.
                    ``(D) Treatment of dc zone.--The District of 
                Columbia Enterprise Zone shall not be treated as an 
                empowerment zone for purposes of this paragraph.''.
    (b) Conforming Amendments.--
            (1) Paragraph (8) of section 1(h) is amended by striking 
        ``means'' and all that follows and inserting ``means the excess 
        of--
                    ``(A) the gain which would be excluded from gross 
                income under section 1202 but for the percentage 
                limitation in section 1202(a), over
                    ``(B) the gain excluded from gross income under 
                section 1202.''.
            (2) The section heading for section 1202 is amended by 
        striking ``<DELETED>50-percent</DELETED>'' and inserting 
        ``<DELETED>partial</DELETED>''.
            (3) The table of sections for part I of subchapter P of 
        chapter 1 is amended by striking ``50-percent'' and inserting 
        ``Partial''.
    (c) Effective Date.--The amendments made by this section shall 
apply to stock acquired after the date of the enactment of this Act.

                   Subtitle C--New Markets Tax Credit

SEC. 121. NEW MARKETS TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits) is amended by adding at the end 
the following new section:

``SEC. 45D. NEW MARKETS TAX CREDIT.

    ``(a) Allowance of Credit.--
            ``(1) In general.--For purposes of section 38, in the case 
        of a taxpayer who holds a qualified equity investment on a 
        credit allowance date of such investment which occurs during 
        the taxable year, the new markets tax credit determined under 
        this section for such taxable year is an amount equal to the 
        applicable percentage of the amount paid to the qualified 
        community development entity for such investment at its 
        original issue.
            ``(2) Applicable percentage.--For purposes of paragraph 
        (1), the applicable percentage is--
                    ``(A) 5 percent with respect to the first 3 credit 
                allowance dates, and
                    ``(B) 6 percent with respect to the remainder of 
                the credit allowance dates.
            ``(3) Credit allowance date.--For purposes of paragraph 
        (1), the term `credit allowance date' means, with respect to 
        any qualified equity investment--
                    ``(A) the date on which such investment is 
                initially made, and
                    ``(B) each of the 6 anniversary dates of such date 
                thereafter.
    ``(b) Qualified Equity Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified equity investment' 
        means any equity investment in a qualified community 
        development entity if--
                    ``(A) such investment is acquired by the taxpayer 
                at its original issue (directly or through an 
                underwriter) solely in exchange for cash,
                    ``(B) substantially all of such cash is used by the 
                qualified community development entity to make 
                qualified low-income community investments, and
                    ``(C) such investment is designated for purposes of 
                this section by the qualified community development 
                entity.
        Such term shall not include any equity investment issued by a 
        qualified community development entity more than 5 years after 
        the date that such entity receives an allocation under 
        subsection (f). Any allocation not used within such 5-year 
        period may be reallocated by the Secretary under subsection 
        (f).
            ``(2) Limitation.--The maximum amount of equity investments 
        issued by a qualified community development entity which may be 
        designated under paragraph (1)(C) by such entity shall not 
        exceed the portion of the limitation amount allocated under 
        subsection (f) to such entity.
            ``(3) Safe harbor for determining use of cash.--The 
        requirement of paragraph (1)(B) shall be treated as met if at 
        least 85 percent of the aggregate gross assets of the qualified 
        community development entity are invested in qualified low-
        income community investments.
            ``(4) Treatment of subsequent purchasers.--The term 
        `qualified equity investment' includes any equity investment 
        which would (but for paragraph (1)(A)) be a qualified equity 
        investment in the hands of the taxpayer if such investment was 
        a qualified equity investment in the hands of a prior holder.
            ``(5) Redemptions.--A rule similar to the rule of section 
        1202(c)(3) shall apply for purposes of this subsection.
            ``(6) Equity investment.--The term `equity investment' 
        means--
                    ``(A) any stock (other than nonqualified preferred 
                stock as defined in section 351(g)(2)) in an entity 
                which is a corporation, and
                    ``(B) any capital interest in an entity which is a 
                partnership.
    ``(c) Qualified Community Development Entity.--For purposes of this 
section--
            ``(1) In general.--The term `qualified community 
        development entity' means any domestic corporation or 
        partnership if--
                    ``(A) the primary mission of the entity is serving, 
                or providing investment capital for, low-income 
                communities or low-income persons,
                    ``(B) the entity maintains accountability to 
                residents of low-income communities through their 
                representation on any governing board of the entity or 
                on any advisory board to the entity, and
                    ``(C) the entity is certified by the Secretary for 
                purposes of this section as being a qualified community 
                development entity.
            ``(2) Special rules for certain organizations.--The 
        requirements of paragraph (1) shall be treated as met by--
                    ``(A) any specialized small business investment 
                company (as defined in section 1044(c)(3)), and
                    ``(B) any community development financial 
                institution (as defined in section 103 of the Community 
                Development Banking and Financial Institutions Act of 
                1994 (12 U.S.C. 4702)).
    ``(d) Qualified Low-Income Community Investments.--For purposes of 
this section--
            ``(1) In general.--The term `qualified low-income community 
        investment' means--
                    ``(A) any capital or equity investment in, or loan 
                to, any qualified active low-income community business,
                    ``(B) the purchase from another qualified community 
                development entity of any loan made by such entity 
                which is a qualified low-income community investment,
                    ``(C) financial counseling and other services 
                specified in regulations prescribed by the Secretary to 
                businesses located in, and residents of, low-income 
                communities, and
                    ``(D) any equity investment in, or loan to, any 
                qualified community development entity.
            ``(2) Qualified active low-income community business.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified active low-income community 
                business' means, with respect to any taxable year, any 
                corporation (including a nonprofit corporation) or 
                partnership if for such year--
                            ``(i) at least 50 percent of the total 
                        gross income of such entity is derived from the 
                        active conduct of a qualified business within 
                        any low-income community,
                            ``(ii) a substantial portion of the use of 
                        the tangible property of such entity (whether 
                        owned or leased) is within any low-income 
                        community,
                            ``(iii) a substantial portion of the 
                        services performed for such entity by its 
                        employees are performed in any low-income 
                        community,
                            ``(iv) less than 5 percent of the average 
                        of the aggregate unadjusted bases of the 
                        property of such entity is attributable to 
                        collectibles (as defined in section 408(m)(2)) 
                        other than collectibles that are held primarily 
                        for sale to customers in the ordinary course of 
                        such business, and
                            ``(v) less than 5 percent of the average of 
                        the aggregate unadjusted bases of the property 
                        of such entity is attributable to nonqualified 
                        financial property (as defined in section 
                        1397C(e)).
                    ``(B) Proprietorship.--Such term shall include any 
                business carried on by an individual as a proprietor if 
                such business would meet the requirements of 
                subparagraph (A) were it incorporated.
                    ``(C) Portions of business may be qualified active 
                low-income community business.--The term `qualified 
                active low-income community business' includes any 
                trades or businesses which would qualify as a qualified 
                active low-income community business if such trades or 
                businesses were separately incorporated.
            ``(3) Qualified business.--For purposes of this subsection, 
        the term `qualified business' has the meaning given to such 
        term by section 1397C(d); except that--
                    ``(A) in lieu of applying paragraph (2)(B) thereof, 
                the rental to others of real property located in any 
                low-income community shall be treated as a qualified 
                business if there are substantial improvements located 
                on such property, and
                    ``(B) paragraph (3) thereof shall not apply.
    ``(e) Low-Income Community.--For purposes of this section--
            ``(1) In general.--The term `low-income community' means 
        any population census tract if--
                    ``(A) the poverty rate for such tract is at least 
                20 percent, or
                    ``(B)(i) in the case of a tract not located within 
                a metropolitan area, the median family income for such 
                tract does not exceed 80 percent of statewide median 
                family income, or
                    ``(ii) in the case of a tract located within a 
                metropolitan area, the median family income for such 
                tract does not exceed 80 percent of the greater of 
                statewide median family income or the metropolitan area 
                median family income.
        Subparagraph (B) shall be applied using possessionwide median 
        family income in the case of census tracts located within a 
        possession of the United States.
            ``(2) Targeted areas.--The Secretary may designate any area 
        within any census tract as a low-income community if--
                    ``(A) the boundary of such area is continuous,
                    ``(B) the area would satisfy the requirements of 
                paragraph (1) if it were a census tract, and
                    ``(C) an inadequate access to investment capital 
                exists in such area.
            ``(3) Areas not within census tracts.--In the case of an 
        area which is not tracted for population census tracts, the 
        equivalent county divisions (as defined by the Bureau of the 
        Census for purposes of defining poverty areas) shall be used 
        for purposes of determining poverty rates and median family 
        income.
    ``(f) National Limitation on Amount of Investments Designated.--
            ``(1) In general.--There is a new markets tax credit 
        limitation for each calendar year. Such limitation is--
                    ``(A) $1,000,000,000 for 2001,
                    ``(B) $1,500,000,000 for 2002 and 2003,
                    ``(C) $2,000,000,000 for 2004 and 2005, and
                    ``(D) $3,500,000,000 for 2006 and 2007.
            ``(2) Allocation of limitation.--The limitation under 
        paragraph (1) shall be allocated by the Secretary among 
        qualified community development entities selected by the 
        Secretary. In making allocations under the preceding sentence, 
        the Secretary shall give priority to any entity--
                    ``(A) with a record of having successfully provided 
                capital or technical assistance to disadvantaged 
                businesses or communities, or
                    ``(B) which intends to satisfy the requirement 
                under subsection (b)(1)(B) by making qualified low-
                income community investments in 1 or more businesses in 
                which persons unrelated to such entity (within the 
                meaning of section 267(b) or 707(b)(1)) hold the 
                majority equity interest.
            ``(3) Carryover of unused limitation.--If the new markets 
        tax credit limitation for any calendar year exceeds the 
        aggregate amount allocated under paragraph (2) for such year, 
        such limitation for the succeeding calendar year shall be 
        increased by the amount of such excess. No amount may be 
        carried under the preceding sentence to any calendar year after 
        2014.
    ``(g) Recapture of Credit In Certain Cases.--
            ``(1) In general.--If, at any time during the 7-year period 
        beginning on the date of the original issue of a qualified 
        equity investment in a qualified community development entity, 
        there is a recapture event with respect to such investment, 
        then the tax imposed by this chapter for the taxable year in 
        which such event occurs shall be increased by the credit 
        recapture amount.
            ``(2) Credit recapture amount.--For purposes of paragraph 
        (1), the credit recapture amount is an amount equal to the sum 
        of--
                    ``(A) the aggregate decrease in the credits allowed 
                to the taxpayer under section 38 for all prior taxable 
                years which would have resulted if no credit had been 
                determined under this section with respect to such 
                investment, plus
                    ``(B) interest at the underpayment rate established 
                under section 6621 on the amount determined under 
                subparagraph (A) for each prior taxable year for the 
                period beginning on the due date for filing the return 
                for the prior taxable year involved.
        No deduction shall be allowed under this chapter for interest 
        described in subparagraph (B).
            ``(3) Recapture event.--For purposes of paragraph (1), 
        there is a recapture event with respect to an equity investment 
        in a qualified community development entity if--
                    ``(A) such entity ceases to be a qualified 
                community development entity,
                    ``(B) the proceeds of the investment cease to be 
                used as required of subsection (b)(1)(B), or
                    ``(C) such investment is redeemed by such entity.
            ``(4) Special rules.--
                    ``(A) Tax benefit rule.--The tax for the taxable 
                year shall be increased under paragraph (1) only with 
                respect to credits allowed by reason of this section 
                which were used to reduce tax liability. In the case of 
                credits not so used to reduce tax liability, the 
                carryforwards and carrybacks under section 39 shall be 
                appropriately adjusted.
                    ``(B) No credits against tax.--Any increase in tax 
                under this subsection shall not be treated as a tax 
                imposed by this chapter for purposes of determining the 
                amount of any credit under this chapter or for purposes 
                of section 55.
    ``(h) Basis Reduction.--The basis of any qualified equity 
investment shall be reduced by the amount of any credit determined 
under this section with respect to such investment. This subsection 
shall not apply for purposes of sections 1202, 1400B, and 1400F.
    ``(i) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to carry out this section, including 
regulations--
            ``(1) which limit the credit for investments which are 
        directly or indirectly subsidized by other Federal tax benefits 
        (including the credit under section 42 and the exclusion from 
        gross income under section 103),
            ``(2) which prevent the abuse of the purposes of this 
        section,
            ``(3) which provide rules for determining whether the 
        requirement of subsection (b)(1)(B) is treated as met,
            ``(4) which impose appropriate reporting requirements, and
            ``(5) which apply the provisions of this section to newly 
        formed entities.''.
    (b) Credit Made Part of General Business Credit.--
            (1) In general.--Subsection (b) of section 38 is amended by 
        striking ``plus'' at the end of paragraph (11), by striking the 
        period at the end of paragraph (12) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(13) the new markets tax credit determined under section 
        45D(a).''.
            (2) Limitation on carryback.--Subsection (d) of section 39 
        is amended by adding at the end the following new paragraph:
            ``(9) No carryback of new markets tax credit before january 
        1, 2001.--No portion of the unused business credit for any 
        taxable year which is attributable to the credit under section 
        45D may be carried back to a taxable year ending before January 
        1, 2001.''.
    (c) Deduction for Unused Credit.--Subsection (c) of section 196 is 
amended by striking ``and'' at the end of paragraph (7), by striking 
the period at the end of paragraph (8) and inserting ``, and'', and by 
adding at the end the following new paragraph:
            ``(9) the new markets tax credit determined under section 
        45D(a).''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by adding at the end 
the following new item:

                              ``Sec. 45D. New markets tax credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to investments made after December 31, 2000.
    (f) Guidance on Allocation of National Limitation.--Not later than 
120 days after the date of the enactment of this Act, the Secretary of 
the Treasury or the Secretary's delegate shall issue guidance which 
specifies--
            (1) how entities shall apply for an allocation under 
        section 45D(f)(2) of the Internal Revenue Code of 1986, as 
        added by this section;
            (2) the competitive procedure through which such 
        allocations are made; and
            (3) the actions that such Secretary or delegate shall take 
        to ensure that such allocations are properly made to 
        appropriate entities.
    (g) Audit and Report.--Not later than January 31 of 2004, 2007, and 
2010, the Comptroller General of the United States shall, pursuant to 
an audit of the new markets tax credit program established under 
section 45D of the Internal Revenue Code of 1986 (as added by 
subsection (a)), report to Congress on such program, including all 
qualified community development entities that receive an allocation 
under the new markets credit under such section.

         Subtitle D--Improvements in Low-Income Housing Credit

SEC. 131. MODIFICATION OF STATE CEILING ON LOW-INCOME HOUSING CREDIT.

    (a) In General.--Clauses (i) and (ii) of section 42(h)(3)(C) 
(relating to State housing credit ceiling) are amended to read as 
follows:
                            ``(i) the unused State housing credit 
                        ceiling (if any) of such State for the 
                        preceding calendar year,
                            ``(ii) the greater of--
                                    ``(I) $1.75 ($1.50 for 2001) 
                                multiplied by the State population, or
                                    ``(II) $2,000,000,''.
    (b) Adjustment of State Ceiling for Increases in Cost-of-Living.--
Paragraph (3) of section 42(h) (relating to housing credit dollar 
amount for agencies) is amended by adding at the end the following new 
subparagraph:
                    ``(H) Cost-of-living adjustment.--
                            ``(i) In general.--In the case of a 
                        calendar year after 2002, the $2,000,000 and 
                        $1.75 amounts in subparagraph (C) shall each be 
                        increased by an amount equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost-of-living 
                                adjustment determined under section 
                                1(f)(3) for such calendar year by 
                                substituting `calendar year 2001' for 
                                `calendar year 1992' in subparagraph 
                                (B) thereof.
                            ``(ii) Rounding.--
                                    ``(I) In the case of the $2,000,000 
                                amount, any increase under clause (i) 
                                which is not a multiple of $5,000 shall 
                                be rounded to the next lowest multiple 
                                of $5,000.
                                    ``(II) In the case of the $1.75 
                                amount, any increase under clause (i) 
                                which is not a multiple of 5 cents 
                                shall be rounded to the next lowest 
                                multiple of 5 cents.''.
    (c) Conforming Amendments.--
            (1) Section 42(h)(3)(C), as amended by subsection (a), is 
        amended--
                    (A) by striking ``clause (ii)'' in the matter 
                following clause (iv) and inserting ``clause (i)''; and
                    (B) by striking ``clauses (i)'' in the matter 
                following clause (iv) and inserting ``clauses (ii)''.
            (2) Section 42(h)(3)(D)(ii) is amended--
                    (A) by striking ``subparagraph (C)(ii)'' and 
                inserting ``subparagraph (C)(i)''; and
                    (B) by striking ``clauses (i)'' in subclause (II) 
                and inserting ``clauses (ii)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to calendar years after 2000.

SEC. 132. MODIFICATION OF CRITERIA FOR ALLOCATING HOUSING CREDITS AMONG 
              PROJECTS.

    (a) Selection Criteria.--Subparagraph (C) of section 42(m)(1) 
(relating to certain selection criteria must be used) is amended--
            (1) by inserting ``, including whether the project includes 
        the use of existing housing as part of a community 
        revitalization plan'' before the comma at the end of clause 
        (iii); and
            (2) by striking clauses (v), (vi), and (vii) and inserting 
        the following new clauses:
                            ``(v) tenant populations with special 
                        housing needs,
                            ``(vi) public housing waiting lists,
                            ``(vii) tenant populations of individuals 
                        with children, and
                            ``(viii) projects intended for eventual 
                        tenant ownership.''.
    (b) Preference for Community Revitalization Projects Located in 
Qualified Census Tracts.--Clause (ii) of section 42(m)(1)(B) is amended 
by striking ``and'' at the end of subclause (I), by adding ``and'' at 
the end of subclause (II), and by inserting after subclause (II) the 
following new subclause:
                                    ``(III) projects which are located 
                                in qualified census tracts (as defined 
                                in subsection (d)(5)(C)) and the 
                                development of which contributes to a 
                                concerted community revitalization 
                                plan,''.

SEC. 133. ADDITIONAL RESPONSIBILITIES OF HOUSING CREDIT AGENCIES.

    (a) Market Study; Public Disclosure of Rationale for Not Following 
Credit Allocation Priorities.--Subparagraph (A) of section 42(m)(1) 
(relating to responsibilities of housing credit agencies) is amended by 
striking ``and'' at the end of clause (i), by striking the period at 
the end of clause (ii) and inserting a comma, and by adding at the end 
the following new clauses:
                            ``(iii) a comprehensive market study of the 
                        housing needs of low-income individuals in the 
                        area to be served by the project is conducted 
                        before the credit allocation is made and at the 
                        developer's expense by a disinterested party 
                        who is approved by such agency, and
                            ``(iv) a written explanation is available 
                        to the general public for any allocation of a 
                        housing credit dollar amount which is not made 
                        in accordance with established priorities and 
                        selection criteria of the housing credit 
                        agency.''.
    (b) Site Visits.--Clause (iii) of section 42(m)(1)(B) (relating to 
qualified allocation plan) is amended by inserting before the period 
``and in monitoring for noncompliance with habitability standards 
through regular site visits''.

SEC. 134. MODIFICATIONS TO RULES RELATING TO BASIS OF BUILDING WHICH IS 
              ELIGIBLE FOR CREDIT.

    (a) Adjusted Basis To Include Portion of Certain Buildings Used by 
Low-Income Individuals Who Are Not Tenants and by Project Employees.--
Paragraph (4) of section 42(d) (relating to special rules relating to 
determination of adjusted basis) is amended--
            (1) by striking ``subparagraph (B)'' in subparagraph (A) 
        and inserting ``subparagraphs (B) and (C)'';
            (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) Inclusion of basis of property used to 
                provide services for certain nontenants.--
                            ``(i) In general.--The adjusted basis of 
                        any building located in a qualified census 
                        tract (as defined in paragraph (5)(C)) shall be 
                        determined by taking into account the adjusted 
                        basis of property (of a character subject to 
                        the allowance for depreciation and not 
                        otherwise taken into account) used throughout 
                        the taxable year in providing any community 
                        service facility.
                            ``(ii) Limitation.--The increase in the 
                        adjusted basis of any building which is taken 
                        into account by reason of clause (i) shall not 
                        exceed 10 percent of the eligible basis of the 
                        qualified low-income housing project of which 
                        it is a part. For purposes of the preceding 
                        sentence, all community service facilities 
                        which are part of the same qualified low-income 
                        housing project shall be treated as one 
                        facility.
                            ``(iii) Community service facility.--For 
                        purposes of this subparagraph, the term 
                        `community service facility' means any facility 
                        designed to serve primarily individuals whose 
                        income is 60 percent or less of area median 
                        income (within the meaning of subsection 
                        (g)(1)(B)).''.
    (b) Certain Native American Housing Assistance Disregarded in 
Determining Whether Building Is Federally Subsidized for Purposes of 
the Low-Income Housing Credit.--Subparagraph (E) of section 42(i)(2) 
(relating to determination of whether building is federally subsidized) 
is amended--
            (1) in clause (i), by inserting ``or the Native American 
        Housing Assistance and Self-Determination Act of 1996 (25 
        U.S.C. 4101 et seq.) (as in effect on October 1, 1997)'' after 
        ``this subparagraph)''; and
            (2) in the subparagraph heading, by inserting ``or native 
        american housing assistance'' after ``home assistance''.

SEC. 135. OTHER MODIFICATIONS.

    (a) Allocation of Credit Limit to Certain Buildings.--
            (1) The first sentence of section 42(h)(1)(E)(ii) is 
        amended by striking ``(as of'' the first place it appears and 
        inserting ``(as of the later of the date which is 6 months 
        after the date that the allocation was made or''.
            (2) The last sentence of section 42(h)(3)(C) is amended by 
        striking ``project which'' and inserting ``project which fails 
        to meet the 10 percent test under paragraph (1)(E)(ii) on a 
        date after the close of the calendar year in which the 
        allocation was made or which''.
    (b) Determination of Whether Buildings Are Located in High Cost 
Areas.--The first sentence of section 42(d)(5)(C)(ii)(I) is amended--
            (1) by inserting ``either'' before ``in which 50 percent''; 
        and
            (2) by inserting before the period ``or which has a poverty 
        rate of at least 25 percent''.

SEC. 136. CARRYFORWARD RULES.

    (a) In General.--Clause (ii) of section 42(h)(3)(D) (relating to 
unused housing credit carryovers allocated among certain States) is 
amended by striking ``the excess'' and all that follows and inserting 
``the excess (if any) of--
                                    ``(I) the unused State housing 
                                credit ceiling for the year preceding 
                                such year, over
                                    ``(II) the aggregate housing credit 
                                dollar amount allocated for such 
                                year.''.
    (b) Conforming Amendment.--The second sentence of section 
42(h)(3)(C) (relating to State housing credit ceiling) is amended by 
striking ``clauses (i) and (iii)'' and inserting ``clauses (i) through 
(iv)''.

SEC. 137. EFFECTIVE DATE.

    Except as otherwise provided in this subtitle, the amendments made 
by this subtitle shall apply to--
            (1) housing credit dollar amounts allocated after December 
        31, 2000; and
            (2) buildings placed in service after such date to the 
        extent paragraph (1) of section 42(h) of the Internal Revenue 
        Code of 1986 does not apply to any building by reason of 
        paragraph (4) thereof, but only with respect to bonds issued 
        after such date.

     Subtitle E--Other Community Renewal and New Markets Assistance

 PART I--PROVISIONS RELATING TO HOUSING AND SUBSTANCE ABUSE PREVENTION 
                             AND TREATMENT

SEC. 141. TRANSFER OF UNOCCUPIED AND SUBSTANDARD HUD-HELD HOUSING TO 
              LOCAL GOVERNMENTS AND COMMUNITY DEVELOPMENT CORPORATIONS.

    Section 204 of the Departments of Veterans Affairs and Housing and 
Urban Development, and Independent Agencies Appropriations Act, 1997 
(12 U.S.C. 1715z-11a) is amended--
            (1) by striking ``Flexible Authority.--'' and inserting 
        ``Disposition of HUD-Owned Properties. (a) Flexible Authority 
        for Multifamily Projects.--''; and
            (2) by adding at the end the following new subsection:
    ``(b) Transfer of Unoccupied and Substandard Housing to Local 
Governments and Community Development Corporations.--
            ``(1) Transfer authority.--Notwithstanding the authority 
        under subsection (a) and the last sentence of section 204(g) of 
        the National Housing Act (12 U.S.C. 1710(g)), the Secretary of 
        Housing and Urban Development shall transfer ownership of any 
        qualified HUD property, subject to the requirements of this 
        section, to a unit of general local government having 
        jurisdiction for the area in which the property is located or 
        to a community development corporation which operates within 
        such a unit of general local government in accordance with this 
        subsection, but only to the extent that units of general local 
        government and community development corporations consent to 
        transfer and the Secretary determines that such transfer is 
        practicable.
            ``(2) Qualified hud properties.--For purposes of this 
        subsection, the term `qualified HUD property' means any 
        property for which, as of the date that notification of the 
        property is first made under paragraph (3)(B), not less than 6 
        months have elapsed since the later of the date that the 
        property was acquired by the Secretary or the date that the 
        property was determined to be unoccupied or substandard, that 
        is owned by the Secretary and is--
                    ``(A) an unoccupied multifamily housing project;
                    ``(B) a substandard multifamily housing project; or
                    ``(C) an unoccupied single family property that--
                            ``(i) has been determined by the Secretary 
                        not to be an eligible asset under section 
                        204(h) of the National Housing Act (12 U.S.C. 
                        1710(h)); or
                            ``(ii) is an eligible asset under such 
                        section 204(h), but--
                                    ``(I) is not subject to a specific 
                                sale agreement under such section; and
                                    ``(II) has been determined by the 
                                Secretary to be inappropriate for 
                                continued inclusion in the program 
                                under such section 204(h) pursuant to 
                                paragraph (10) of such section.
            ``(3) Timing.--The Secretary shall establish procedures 
        that provide for--
                    ``(A) time deadlines for transfers under this 
                subsection;
                    ``(B) notification to units of general local 
                government and community development corporations of 
                qualified HUD properties in their jurisdictions;
                    ``(C) such units and corporations to express 
                interest in the transfer under this subsection of such 
                properties;
                    ``(D) a right of first refusal for transfer of 
                qualified HUD properties to units of general local 
                government and community development corporations, 
                under which--
                            ``(i) the Secretary shall establish a 
                        period during which the Secretary may not 
                        transfer such properties except to such units 
                        and corporations;
                            ``(ii) the Secretary shall offer qualified 
                        HUD properties that are single family 
                        properties for purchase by units of general 
                        local government at a cost of $1 for each 
                        property, but only to the extent that the costs 
                        to the Federal Government of disposal at such 
                        price do not exceed the costs to the Federal 
                        Government of disposing of property subject to 
                        the procedures for single family property 
                        established by the Secretary pursuant to the 
                        authority under the last sentence of section 
                        204(g) of the National Housing Act (12 U.S.C. 
                        1710(g));
                            ``(iii) the Secretary may accept an offer 
                        to purchase a property made by a community 
                        development corporation only if the offer 
                        provides for purchase on a cost recovery basis; 
                        and
                            ``(iv) the Secretary shall accept an offer 
                        to purchase such a property that is made during 
                        such period by such a unit or corporation and 
                        that complies with the requirements of this 
                        paragraph; and
                    ``(E) a written explanation, to any unit of general 
                local government or community development corporation 
                making an offer to purchase a qualified HUD property 
                under this subsection that is not accepted, of the 
                reason that such offer was not acceptable.
            ``(4) Other disposition.--With respect to any qualified HUD 
        property, if the Secretary does not receive an acceptable offer 
        to purchase the property pursuant to the procedure established 
        under paragraph (3), the Secretary shall dispose of the 
        property to the unit of general local government in which 
        property is located or to community development corporations 
        located in such unit of general local government on a 
        negotiated, competitive bid, or other basis, on such terms as 
        the Secretary deems appropriate.
            ``(5) Satisfaction of indebtedness.--Before transferring 
        ownership of any qualified HUD property pursuant to this 
        subsection, the Secretary shall satisfy any indebtedness 
        incurred in connection with the property to be transferred, by 
        canceling the indebtedness.
            ``(6) Determination of status of properties.--To ensure 
        compliance with the requirements of this subsection, the 
        Secretary shall take the following actions:
                    ``(A) Upon enactment.--Upon the enactment of this 
                subsection, the Secretary shall promptly assess each 
                residential property owned by the Secretary to 
                determine whether such property is a qualified HUD 
                property.
                    ``(B) Upon acquisition.--Upon acquiring any 
                residential property, the Secretary shall promptly 
                determine whether the property is a qualified HUD 
                property.
                    ``(C) Updates.--The Secretary shall periodically 
                reassess the residential properties owned by the 
                Secretary to determine whether any such properties have 
                become qualified HUD properties.
            ``(7) Tenant leases.--This subsection shall not affect the 
        terms or the enforceability of any contract or lease entered 
        into with respect to any residential property before the date 
        that such property becomes a qualified HUD property.
            ``(8) Use of property.--Property transferred under this 
        subsection shall be used only for appropriate neighborhood 
        revitalization efforts, including homeownership, rental units, 
        commercial space, and parks, consistent with local zoning 
        regulations, local building codes, and subdivision regulations 
        and restrictions of record.
            ``(9) Inapplicability to properties made available for 
        homeless.--Notwithstanding any other provision of this 
        subsection, this subsection shall not apply to any properties 
        that the Secretary determines are to be made available for use 
        by the homeless pursuant to subpart E of part 291 of title 24, 
        Code of Federal Regulations, during the period that the 
        properties are so available.
            ``(10) Protection of existing contracts.--This subsection 
        may not be construed to alter, affect, or annul any legally 
        binding obligations entered into with respect to a qualified 
        HUD property before the property becomes a qualified HUD 
        property.
            ``(11) Definitions.--For purposes of this subsection, the 
        following definitions shall apply:
                    ``(A) Community development corporation.--The term 
                `community development corporation' means a nonprofit 
                organization whose primary purpose is to promote 
                community development by providing housing 
                opportunities for low-income families.
                    ``(B) Cost recovery basis.--The term `cost recovery 
                basis' means, with respect to any sale of a residential 
                property by the Secretary, that the purchase price paid 
                by the purchaser is equal to or greater than the sum 
                of: (i) the appraised value of the property, as 
                determined in accordance with such requirements as the 
                Secretary shall establish; and (ii) the costs incurred 
                by the Secretary in connection with such property 
                during the period beginning on the date on which the 
                Secretary acquires title to the property and ending on 
                the date on which the sale is consummated.
                    ``(C) Multifamily housing project.--The term 
                `multifamily housing project' has the meaning given the 
                term in section 203 of the Housing and Community 
                Development Amendments of 1978.
                    ``(D) Residential property.--The term `residential 
                property' means a property that is a multifamily 
                housing project or a single family property.
                    ``(E) Secretary.--The term `Secretary' means the 
                Secretary of Housing and Urban Development.
                    ``(F) Severe physical problems.--The term `severe 
                physical problems' means, with respect to a dwelling 
                unit, that the unit--
                            ``(i) lacks hot or cold piped water, a 
                        flush toilet, or both a bathtub and a shower in 
                        the unit, for the exclusive use of that unit;
                            ``(ii) on not less than three separate 
                        occasions during the preceding winter months, 
                        was uncomfortably cold for a period of more 
                        than 6 consecutive hours due to a malfunction 
                        of the heating system for the unit;
                            ``(iii) has no functioning electrical 
                        service, exposed wiring, any room in which 
                        there is not a functioning electrical outlet, 
                        or has experienced three or more blown fuses or 
                        tripped circuit breakers during the preceding 
                        90-day period;
                            ``(iv) is accessible through a public 
                        hallway in which there are no working light 
                        fixtures, loose or missing steps or railings, 
                        and no elevator; or
                            ``(v) has severe maintenance problems, 
                        including water leaks involving the roof, 
                        windows, doors, basement, or pipes or plumbing 
                        fixtures, holes or open cracks in walls or 
                        ceilings, severe paint peeling or broken 
                        plaster, and signs of rodent infestation.
                    ``(G) Single family property.--The term `single 
                family property' means a 1- to 4-family residence.
                    ``(H) Substandard.--The term `substandard' means, 
                with respect to a multifamily housing project, that 25 
                percent or more of the dwelling units in the project 
                have severe physical problems.
                    ``(I) Unit of general local government.--The term 
                `unit of general local government' has the meaning 
                given such term in section 102(a) of the Housing and 
                Community Development Act of 1974.
                    ``(J) Unoccupied.--The term `unoccupied' means, 
                with respect to a residential property, that the unit 
                of general local government having jurisdiction over 
                the area in which the project is located has certified 
                in writing that the property is not inhabited.
            ``(12) Regulations.--
                    ``(A) Interim.--Not later than 30 days after the 
                date of the enactment of this subsection, the Secretary 
                shall issue such interim regulations as are necessary 
                to carry out this subsection.
                    ``(B) Final.--Not later than 60 days after the date 
                of the enactment of this subsection, the Secretary 
                shall issue such final regulations as are necessary to 
                carry out this subsection.''.

SEC. 142. TRANSFER OF HUD ASSETS IN REVITALIZATION AREAS.

    In carrying out the program under section 204(h) of the National 
Housing Act (12 U.S.C. 1710(h)), upon the request of the chief 
executive officer of a county or the government of appropriate 
jurisdiction and not later than 60 days after such request is made, the 
Secretary of Housing and Urban Development shall designate as a 
revitalization area all portions of such county that meet the criteria 
for such designation under paragraph (3) of such section.

SEC. 143. RISK-SHARING DEMONSTRATION.

    Section 249 of the National Housing Act (12 U.S.C. 1715z-14) is 
amended--
            (1) by striking the section heading and inserting the 
        following:

                    ``risk-sharing demonstration'';

            (2) by striking ``reinsurance'' each place such term 
        appears and insert ``risk-sharing'';
            (3) in subsection (a)--
                    (A) in the first sentence, by inserting ``and with 
                insured community development financial institutions'' 
                after ``private mortgage insurers'';
                    (B) in the second sentence--
                            (i) by striking ``two'' and inserting 
                        ``four''; and
                            (ii) by striking ``March 15, 1988'' and 
                        inserting ``the expiration of the 5-year period 
                        beginning on the date of the enactment of the 
                        Community Renewal Tax Relief Act of 2000''; and
                    (C) in the third sentence--
                            (i) by striking ``insured'' and inserting 
                        ``for which risk of nonpayment is shared''; and
                            (ii) by striking ``10 percent'' and 
                        inserting ``20 percent'';
            (4) in subsection (b)--
                    (A) in the first sentence--
                            (i) by striking ``to provide'' and 
                        inserting ``, in providing'';
                            (ii) by striking ``through'' and inserting 
                        ``, to enter into''; and
                            (iii) by inserting ``and with insured 
                        community development financial institutions'' 
                        before the period at the end;
                    (B) in the second sentence, by inserting ``and 
                insured community development financial institutions'' 
                after ``private mortgage insurance companies'';
                    (C) by striking paragraph (1) and inserting the 
                following new paragraph:
            ``(1) assume a secondary percentage of loss on any mortgage 
        insured pursuant to section 203(b), 234, or 245 covering a one- 
        to four-family dwelling, which percentage of loss shall be set 
        forth in the risk-sharing contract, with the first percentage 
        of loss to be borne by the Secretary;''; and
                    (D) in paragraph (2)--
                            (i) by striking ``carry out (under 
                        appropriate delegation) such'' and inserting 
                        ``perform or delegate underwriting,'';
                            (ii) by striking ``function as the 
                        Secretary pursuant to regulations,'' and 
                        inserting ``functions as the Secretary''; and
                            (iii) by inserting before the period at the 
                        end the following: ``and shall set forth in the 
                        risk-sharing contract'';
            (5) in subsection (c)--
                    (A) in the first sentence--
                            (i) by striking ``of'' the first place it 
                        appears and inserting ``for'';
                            (ii) by inserting ``received by the 
                        Secretary with a private mortgage insurer or 
                        insured community development financial 
                        institution'' after ``sharing of premiums'';
                            (iii) by striking ``insurance reserves'' 
                        and inserting ``loss reserves'';
                            (iv) by striking ``such insurance'' and 
                        inserting ``such risk-sharing contract''; and
                            (v) by striking ``right'' and inserting 
                        ``rights''; and
                    (B) in the second sentence--
                            (i) by inserting ``or insured community 
                        development financial institution'' after 
                        ``private mortgage insurance company''; and
                            (ii) by striking ``for insurance'' and 
                        inserting ``for risk-sharing'';
            (6) in subsection (d), by inserting ``or insured community 
        development financial institution'' after ``private mortgage 
        insurance company''; and
            (7) by adding at the end the following new subsection:
    ``(e) Insured Community Development Financial Institution.--For 
purposes of this section, the term `insured community development 
financial institution' means a community development financial 
institution, as such term is defined in section 103 of Reigle Community 
Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4702) 
that is an insured depository institution (as such term is defined in 
section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813)) or an 
insured credit union (as such term is defined in section 101 of the 
Federal Credit Union Act (12 U.S.C. 1752)).''.

SEC. 144. PREVENTION AND TREATMENT OF SUBSTANCE ABUSE; SERVICES 
              PROVIDED THROUGH RELIGIOUS ORGANIZATIONS.

    Title V of the Public Health Service Act (42 U.S.C. 290aa et seq.) 
is amended by adding at the end the following part:

      ``Part G--Services Provided Through Religious Organizations

``SEC. 581. APPLICABILITY TO DESIGNATED PROGRAMS.

    ``(a) Designated Programs.--Subject to subsection (b), this part 
applies to discretionary and formula grant programs administered by the 
Substance Abuse and Mental Health Services Administration that make 
awards of financial assistance to public or private entities for the 
purpose of carrying out activities to prevent or treat substance abuse 
(in this part referred to as a `designated program'). Designated 
programs include the program under subpart II of part B of title XIX 
(relating to formula grants to the States).
    ``(b) Limitation.--This part does not apply to any award of 
financial assistance under a designated program for a purpose other 
than the purpose specified in subsection (a).
    ``(c) Definitions.--For purposes of this part (and subject to 
subsection (b)):
            ``(1) The term `designated program' has the meaning given 
        such term in subsection (a).
            ``(2) The term `financial assistance' means a grant, 
        cooperative agreement, or contract.
            ``(3) The term `program beneficiary' means an individual 
        who receives program services.
            ``(4) The term `program participant' means a public or 
        private entity that has received financial assistance under a 
        designated program.
            ``(5) The term `program services' means treatment for 
        substance abuse, or preventive services regarding such abuse, 
        provided pursuant to an award of financial assistance under a 
        designated program.
            ``(6) The term `religious organization' means a nonprofit 
        religious organization.

``SEC. 582. RELIGIOUS ORGANIZATIONS AS PROGRAM PARTICIPANTS.

    ``(a) In General.--Notwithstanding any other provision of law, a 
religious organization, on the same basis as any other nonprofit 
private provider--
            ``(1) may receive financial assistance under a designated 
        program; and
            ``(2) may be a provider of services under a designated 
        program.
    ``(b) Religious Organizations.--The purpose of this section is to 
allow religious organizations to be program participants on the same 
basis as any other nonprofit private provider without impairing the 
religious character of such organizations, and without diminishing the 
religious freedom of program beneficiaries.
    ``(c) Nondiscrimination Against Religious Organizations.--
            ``(1) Eligibility as program participants.--Religious 
        organizations are eligible to be program participants on the 
        same basis as any other nonprofit private organization as long 
        as the programs are implemented consistent with the 
        Establishment Clause and Free Exercise Clause of the First 
        Amendment to the United States Constitution. Nothing in this 
        Act shall be construed to restrict the ability of the Federal 
        Government, or a State or local government receiving funds 
        under such programs, to apply to religious organizations the 
        same eligibility conditions in designated programs as are 
        applied to any other nonprofit private organization.
            ``(2) Nondiscrimination.--Neither the Federal Government 
        nor a State or local government receiving funds under 
        designated programs shall discriminate against an organization 
        that is or applies to be a program participant on the basis 
        that the organization has a religious character.
    ``(d) Religious Character and Freedom.--
            ``(1) Religious organizations.--Except as provided in this 
        section, any religious organization that is a program 
        participant shall retain its independence from Federal, State, 
        and local government, including such organization's control 
        over the definition, development, practice, and expression of 
        its religious beliefs.
            ``(2) Additional safeguards.--Neither the Federal 
        Government nor a State shall require a religious organization 
        to--
                    ``(A) alter its form of internal governance; or
                    ``(B) remove religious art, icons, scripture, or 
                other symbols,
        in order to be a program participant.
    ``(e) Employment Practices.--Nothing in this section shall be 
construed to modify or affect the provisions of any other Federal or 
State law or regulation that relates to discrimination in employment. A 
religious organization's exemption provided under section 702 of the 
Civil Rights Act of 1964 regarding employment practices shall not be 
affected by its participation in, or receipt of funds from, a 
designated program.
    ``(f) Rights of Program Beneficiaries.--
            ``(1) In general.--If an individual who is a program 
        beneficiary or a prospective program beneficiary objects to the 
        religious character of a program participant, within a 
        reasonable period of time after the date of such objection such 
        program participant shall refer such individual to, and the 
        appropriate Federal, State, or local government that 
        administers a designated program or is a program participant 
        shall provide to such individual (if otherwise eligible for 
        such services), program services that--
                    ``(A) are from an alternative provider that is 
                accessible to, and has the capacity to provide such 
                services to, such individual; and
                    ``(B) have a value that is not less than the value 
                of the services that the individual would have received 
                from the program participant to which the individual 
                had such objection.
        Upon referring a program beneficiary to an alternative 
        provider, the program participant shall notify the appropriate 
        Federal, State, or local government agency that administers the 
        program of such referral.
            ``(2) Notices.--Program participants, public agencies that 
        refer individuals to designated programs, and the appropriate 
        Federal, State, or local governments that administer designated 
        programs or are program participants shall ensure that notice 
        is provided to program beneficiaries or prospective program 
        beneficiaries of their rights under this section.
            ``(3) Additional requirements.--A program participant 
        making a referral pursuant to paragraph (1) shall--
                    ``(A) prior to making such referral, consider any 
                list that the State or local government makes available 
                of entities in the geographic area that provide program 
                services; and
                    ``(B) ensure that the individual makes contact with 
                the alternative provider to which the individual is 
                referred.
            ``(4) Nondiscrimination.--A religious organization that is 
        a program participant shall not in providing program services 
        or engaging in outreach activities under designated programs 
        discriminate against a program beneficiary or prospective 
        program beneficiary on the basis of religion or religious 
        belief.
    ``(g) Fiscal Accountability.--
            ``(1) In general.--Except as provided in paragraph (2), any 
        religious organization that is a program participant shall be 
        subject to the same regulations as other recipients of awards 
        of Federal financial assistance to account, in accordance with 
        generally accepted auditing principles, for the use of the 
        funds provided under such awards.
            ``(2) Limited audit.--With respect to the award involved, a 
        religious organization that is a program participant shall 
        segregate Federal amounts provided under award into a separate 
        account from non-Federal funds. Only the award funds shall be 
        subject to audit by the government.
    ``(h) Compliance.--With respect to compliance with this section by 
an agency, a religious organization may obtain judicial review of 
agency action in accordance with chapter 7 of title 5, United States 
Code.

``SEC. 583. LIMITATIONS ON USE OF FUNDS FOR CERTAIN PURPOSES.

    ``No funds provided under a designated program shall be expended 
for sectarian worship, instruction, or proselytization.

``SEC. 584. EDUCATIONAL REQUIREMENTS FOR PERSONNEL IN DRUG TREATMENT 
              PROGRAMS.

    ``(a) Findings.--The Congress finds that--
            ``(1) establishing unduly rigid or uniform educational 
        qualification for counselors and other personnel in drug 
        treatment programs may undermine the effectiveness of such 
        programs; and
            ``(2) such educational requirements for counselors and 
        other personnel may hinder or prevent the provision of needed 
        drug treatment services.
    ``(b) Nondiscrimination.--In determining whether personnel of a 
program participant that has a record of successful drug treatment for 
the preceding three years have satisfied State or local requirements 
for education and training, a State or local government shall not 
discriminate against education and training provided to such personnel 
by a religious organization, so long as such education and training 
includes basic content substantially equivalent to the content provided 
by nonreligious organizations that the State or local government would 
credit for purposes of determining whether the relevant requirements 
have been satisfied.''.

             PART II--ADVISORY COUNCIL ON COMMUNITY RENEWAL

SEC. 151. SHORT TITLE.

    This part may be cited as the ``Advisory Council on Community 
Renewal Act''.

SEC. 152. ESTABLISHMENT.

    There is established an advisory council to be known as the 
``Advisory Council on Community Renewal'' (in this part referred to as 
the ``Advisory Council'').

SEC. 153. DUTIES OF ADVISORY COUNCIL.

    The Advisory Council shall advise the Secretary of Housing and 
Urban Development (in this part referred to as the ``Secretary'') on 
the designation of renewal communities pursuant to the amendment made 
by section 101 and on the exercise of any other authority granted to 
the Secretary pursuant to the amendments made by this title.

SEC. 154. MEMBERSHIP.

    (a) Number and Appointment.--The Advisory Council shall be composed 
of 7 members appointed by the Secretary.
    (b) Chairperson.--The Chairperson of the Advisory Council (in this 
part referred to as the ``Chairperson'') shall be designated by the 
Secretary at the time of the appointment.
    (c) Terms.--Each member shall be appointed for the life of the 
Advisory Council.
    (d) Basic Pay.--
            (1) Chairperson.--The Chairperson shall be paid at a rate 
        equal to the daily rate of basic pay for level III of the 
        Executive Schedule for each day (including travel time) during 
        which the Chairperson is engaged in the actual performance of 
        duties vested in the Advisory Council.
            (2) Other members.--Members other than the Chairperson 
        shall each be paid at a rate equal to the daily rate of basic 
        pay for level IV of the Executive Schedule for each day 
        (including travel time) during which they are engaged in the 
        actual performance of duties vested in the Advisory Council.
    (e) Travel Expenses.--Each member shall receive travel expenses, 
including per diem in lieu of subsistence, in accordance with 
applicable provisions under subchapter I of chapter 57 of title 5, 
United States Code.
    (f) Quorum.--Four members of the Advisory Council shall constitute 
a quorum but a lesser number may hold hearings.
    (g) Meetings.--The Advisory Council shall meet at the call of the 
Secretary or the Chairperson.

SEC. 155. POWERS OF ADVISORY COUNCIL.

    (a) Hearings and Sessions.--The Advisory Council may, for the 
purpose of carrying out this part, hold hearings, sit and act at times 
and places, take testimony, and receive evidence as the Advisory 
Council considers appropriate. The Advisory Council may administer 
oaths or affirmations to witnesses appearing before it.
    (b) Powers of Members and Agents.--Any member or agent of the 
Advisory Council may, if authorized by the Advisory Council, take any 
action which the Advisory Council is authorized to take by this 
section.
    (c) Obtaining Official Data.--The Advisory Council may secure 
directly from any department or agency of the United States information 
necessary to enable it to carry out this part. Upon request of the 
Chairperson of the Advisory Council, the head of that department or 
agency shall furnish that information to the Advisory Council.

SEC. 156. REPORTS.

    (a) Annual Reports.--The Advisory Council shall submit to the 
Secretary an annual report for each fiscal year.
    (b) Interim Reports.--The Advisory Council may submit to the 
Secretary such interim reports as the Advisory Council considers 
appropriate.
    (c) Final Report.--The Advisory Council shall transmit a final 
report to the Secretary not later September 30, 2003. The final report 
shall contain a detailed statement of the findings and conclusions of 
the Advisory Council, together with any recommendations for legislative 
or administrative action that the Advisory Council considers 
appropriate.

SEC. 157. TERMINATION.

    (a) In General.--The Advisory Council shall terminate 30 days after 
submitting its final report under section 156(c).
    (b) Extension.--Notwithstanding subsection (a), the Secretary may 
postpone the termination of the Advisory Council for a period not to 
exceed 3 years after the Advisory Council submits its final report 
under section 156(c).

SEC. 158. APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.

    The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply 
to the Advisory Council.

SEC. 159. RESOURCES.

    The Secretary shall provide to the Advisory Council appropriate 
resources so that the Advisory Council may carry out its duties and 
fuctions under this part.

SEC. 160. EFFECTIVE DATE.

    This part shall be effective 30 days after the date of its 
enactment.

                      Subtitle F--Other Provisions

SEC. 161. ACCELERATION OF PHASE-IN OF INCREASE IN VOLUME CAP ON PRIVATE 
              ACTIVITY BONDS.

    (a) In General.--Paragraphs (1) and (2) of section 146(d) (relating 
to State ceiling) are amended to read as follows:
            ``(1) In general.--The State ceiling applicable to any 
        State for any calendar year shall be the greater of--
                    ``(A) an amount equal to $75 ($62.50 in the case of 
                calendar year 2001) multiplied by the State population, 
                or
                    ``(B) $225,000,000 ($187,500,000 in the case of 
                calendar year 2001).
            ``(2) Cost-of-living adjustment.--In the case of a calendar 
        year after 2002, each of the dollar amounts contained in 
        paragraph (1) shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for such calendar year by 
                substituting `calendar year 2001' for `calendar year 
                1992' in subparagraph (B) thereof.
        If any increase determined under the preceding sentence is not 
        a multiple of $5 ($5,000 in the case of the dollar amount in 
        paragraph (1)(B)), such increase shall be rounded to the 
        nearest multiple thereof.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to calendar years after 2000.

SEC. 162. MODIFICATIONS TO EXPENSING OF ENVIRONMENTAL REMEDIATION 
              COSTS.

    (a) Expensing Not Limited to Sites in Targeted Areas.--Subsection 
(c) of section 198 is amended to read as follows:
    ``(c) Qualified Contaminated Site.--For purposes of this section--
            ``(1) In general.--The term `qualified contaminated site' 
        means any area--
                    ``(A) which is held by the taxpayer for use in a 
                trade or business or for the production of income, or 
                which is property described in section 1221(a)(1) in 
                the hands of the taxpayer, and
                    ``(B) at or on which there has been a release (or 
                threat of release) or disposal of any hazardous 
                substance.
            ``(2) National priorities listed sites not included.--Such 
        term shall not include any site which is on, or proposed for, 
        the national priorities list under section 105(a)(8)(B) of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980 (as in effect on the date of the 
        enactment of this section).
            ``(3) Taxpayer must receive statement from state 
        environmental agency.--An area shall be treated as a qualified 
        contaminated site with respect to expenditures paid or incurred 
        during any taxable year only if the taxpayer receives a 
        statement from the appropriate agency of the State in which 
        such area is located that such area meets the requirement of 
        paragraph (1)(B).
            ``(4) Appropriate state agency.--For purposes of paragraph 
        (3), the chief executive officer of each State may, in 
        consultation with the Administrator of the Environmental 
        Protection Agency, designate the appropriate State 
        environmental agency within 60 days of the date of the 
        enactment of this section. If the chief executive officer of a 
        State has not designated an appropriate environmental agency 
        within such 60-day period, the appropriate environmental agency 
        for such State shall be designated by the Administrator of the 
        Environmental Protection Agency.''.
    (b) Extension of Termination Date.--Subsection (h) of section 198 
is amended by striking ``2001'' and inserting ``2003''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures paid or incurred after the date of the enactment 
of this Act.

SEC. 163. EXTENSION OF DC HOMEBUYER TAX CREDIT.

    Section 1400C(i) (relating to application of section) is amended by 
striking ``2002'' and inserting ``2004''.

SEC. 164. EXTENSION OF DC ZONE THROUGH 2003.

    (a) In General.--The following provisions are amended by striking 
``2002'' each place it appears and inserting ``2003'':
            (1) Section 1400(f).
            (2) Section 1400A(b).
    (b) Zero Capital Gains Rate.--Section 1400B (relating to zero 
percent capital gains rate) is amended--
            (1) by striking ``2003'' each place it appears and 
        inserting ``2004'', and
            (2) by striking ``2007'' each place it appears and 
        inserting ``2008''.

SEC. 165. EXTENSION OF ENHANCED DEDUCTION FOR CORPORATE DONATIONS OF 
              COMPUTER TECHNOLOGY.

    (a) Expansion of Computer Technology Donations to Public 
Libraries.--
            (1) In general.--Paragraph (6) of section 170(e) (relating 
        to special rule for contributions of computer technology and 
        equipment for elementary or secondary school purposes) is 
        amended by striking ``qualified elementary or secondary 
        educational contribution'' each place it occurs in the headings 
        and text and inserting ``qualified computer contribution''.
            (2) Expansion of eligible donees.--Clause (i) of section 
        170(e)(6)(B) (relating to qualified elementary or secondary 
        educational contribution) is amended by striking ``or'' at the 
        end of subclause (I), by adding ``or'' at the end of subclause 
        (II), and by inserting after subclause (II) the following new 
        subclause:
                                    ``(III) a public library (within 
                                the meaning of section 213(2)(A) of the 
                                Library Services and Technology Act (20 
                                U.S.C. 9122(2)(A)), as in effect on the 
                                date of the enactment of the Community 
                                Renewal Tax Relief Act of 2000, 
                                established and maintained by an entity 
                                described in subsection (c)(1),''.
            (3) Extension of donation period.--Clause (ii) of section 
        170(e)(6)(B) is amended by striking ``2 years'' and inserting 
        ``3 years''.
    (b) Conforming Amendments.--
            (1) Section 170(e)(6)(B)(iv) is amended by striking ``in 
        any grades of the K-12''.
            (2) The heading of paragraph (6) of section 170(e) is 
        amended by striking ``elementary or secondary school purposes'' 
        and inserting ``educational purposes''.
    (c) Extension of Deduction.--Section 170(e)(6)(F) (relating to 
termination) is amended by striking ``December 31, 2000'' and inserting 
``December 31, 2003''.
    (d) Standards as to Functionality and Suitability.--Subparagraph 
(B) of section 170(e)(6) is amended by striking ``and'' at the end of 
clause (vi), by striking the period at the end of clause (vii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(viii) the property meets such standards, 
                        if any, as the Secretary may prescribe by 
                        regulation to assure that the property meets 
                        minimum functionality and suitability standards 
                        for educational purposes.''.
    (e) Donations of Computers Reacquired by Manufacturer.--Paragraph 
(6) of section 170(e) is further amended by redesignating subparagraphs 
(D), (E), and (F) as subparagraphs (E), (F), and (G), respectively, and 
by inserting after subparagraph (C) the following new subparagraph:
                    ``(D) Donations of property reacquired by 
                manufacturer.--In the case of property which is 
                reacquired by the person who constructed the property--
                            ``(i) subparagraph (B)(ii) shall be applied 
                        to a contribution of such property by such 
                        person by taking into account the date that the 
                        original construction of the property was 
                        substantially completed, and
                            ``(ii) subparagraph (B)(iii) shall not 
                        apply to such contribution.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to contributions made after December 31, 2000.

SEC. 166. TREATMENT OF INDIAN TRIBAL GOVERNMENTS UNDER FEDERAL 
              UNEMPLOYMENT TAX ACT.

    (a) In General.--Section 3306(c)(7) (defining employment) is 
amended--
            (1) by inserting ``or in the employ of an Indian tribe,'' 
        after ``service performed in the employ of a State, or any 
        political subdivision thereof,''; and
            (2) by inserting ``or Indian tribes'' after ``wholly owned 
        by one or more States or political subdivisions''.
    (b) Payments in Lieu of Contributions.--Section 3309 (relating to 
State law coverage of services performed for nonprofit organizations or 
governmental entities) is amended--
            (1) in subsection (a)(2) by inserting ``, including an 
        Indian tribe,'' after ``the State law shall provide that a 
        governmental entity'';
            (2) in subsection (b)(3)(B) by inserting ``, or of an 
        Indian tribe'' after ``of a State or political subdivision 
        thereof'';
            (3) in subsection (b)(3)(E) by inserting ``or tribal'' 
        after ``the State''; and
            (4) in subsection (b)(5) by inserting ``or of an Indian 
        tribe'' after ``an agency of a State or political subdivision 
        thereof''.
    (c) State Law Coverage.--Section 3309 (relating to State law 
coverage of services performed for nonprofit organizations or 
governmental entities) is amended by adding at the end the following 
new subsection:
    ``(d) Election by Indian Tribe.--The State law shall provide that 
an Indian tribe may make contributions for employment as if the 
employment is within the meaning of section 3306 or make payments in 
lieu of contributions under this section, and shall provide that an 
Indian tribe may make separate elections for itself and each 
subdivision, subsidiary, or business enterprise wholly owned by such 
Indian tribe. State law may require a tribe to post a payment bond or 
take other reasonable measures to assure the making of payments in lieu 
of contributions under this section. Notwithstanding the requirements 
of section 3306(a)(6), if, within 90 days of having received a notice 
of delinquency, a tribe fails to make contributions, payments in lieu 
of contributions, or payment of penalties or interest (at amounts or 
rates comparable to those applied to all other employers covered under 
the State law) assessed with respect to such failure, or if the tribe 
fails to post a required payment bond, then service for the tribe shall 
not be excepted from employment under section 3306(c)(7) until any such 
failure is corrected. This subsection shall apply to an Indian tribe 
within the meaning of section 4(e) of the Indian Self-Determination and 
Education Assistance Act (25 U.S.C. 450b(e)).''.
    (d) Definitions.--Section 3306 (relating to definitions) is amended 
by adding at the end the following new subsection:
    ``(u) Indian Tribe.--For purposes of this chapter, the term `Indian 
tribe' has the meaning given to such term by section 4(e) of the Indian 
Self-Determination and Education Assistance Act (25 U.S.C. 450b(e)), 
and includes any subdivision, subsidiary, or business enterprise wholly 
owned by such an Indian tribe.''.
    (e) Effective Date; Transition Rule.--
            (1) Effective date.--The amendments made by this section 
        shall apply to service performed on or after the date of the 
        enactment of this Act.
            (2) Transition rule.--For purposes of the Federal 
        Unemployment Tax Act, service performed in the employ of an 
        Indian tribe (as defined in section 3306(u) of the Internal 
        Revenue Code of 1986 (as added by this section)) shall not be 
        treated as employment (within the meaning of section 3306 of 
        such Code) if--
                    (A) it is service which is performed before the 
                date of the enactment of this Act and with respect to 
                which the tax imposed under the Federal Unemployment 
                Tax Act has not been paid, and
                    (B) such Indian tribe reimburses a State 
                unemployment fund for unemployment benefits paid for 
                service attributable to such tribe for such period.

    TITLE II--TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS 
                                ACCOUNTS

SEC. 201. TWO-YEAR EXTENSION OF AVAILABILITY OF MEDICAL SAVINGS 
              ACCOUNTS.

    (a) In General.--Paragraphs (2) and (3)(B) of section 220(i) 
(defining cut-off year) are each amended by striking ``2000'' each 
place it appears and inserting ``2002''.
    (b) Conforming Amendments.--
            (1) Paragraph (2) of section 220(j) is amended--
                    (A) by striking ``1998 or 1999'' each place it 
                appears and inserting ``1998, 1999, or 2001'',
                    (B) by striking ``600,000 (750,000 in the case of 
                1999)'' and inserting ``750,000 (600,000 in the case of 
                1998)'', and
                    (C) by inserting after subparagraph (B) the 
                following new subparagraph:
                    ``(C) No limitation for 2000.--The numerical 
                limitation shall not apply for 2000.''.
            (2) Subparagraph (A) of section 220(j)(4) is amended by 
        striking ``and 1999'' and inserting ``1999, and 2001''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 202. MEDICAL SAVINGS ACCOUNTS RENAMED AS ARCHER MSAS.

    (a) In General.--The following provisions are amended by striking 
``medical savings account'' each place it appears in the text and 
inserting ``Archer MSA'':
            (1) Section 26(b)(2)(Q).
            (2) Section 106(b).
            (3) Section 138(b).
            (4) Section 220.
            (5) Section 848(e)(1)(B)(iv).
            (6) Subsections (a)(2) and (d) of section 4973.
            (7) Subsections (c)(4) and (e)(1)(D) of section 4975.
            (8) Subsections (a) and (d)(2)(B) of section 4980E.
            (9) Section 6051(a)(11).
    (b) Other Amendments.--
            (1) Paragraph (16) of section 62(a) is amended to read as 
        follows:
            ``(16) Archer msas.--The deduction allowed by section 
        220.''.
            (2) The following provisions are each amended by striking 
        ``medical savings accounts'' each place it appears in the text 
        and inserting ``Archer MSAs'':
                    (A) Paragraphs (4) and (7) of section 106(b).
                    (B) Subsections (c)(1)(D), (e)(2), (f)(3)(A), 
                (i)(4)(B), and (j) of section 220.
                    (C) Section 4973(d).
                    (D) Subsections (b) and (d)(1) of section 4980E.
                    (E) Section 6693(a)(2)(B).
            (3) Paragraph (1) of section 220(d) is amended by inserting 
        ``as a medical savings account'' after ``United States''.
            (4) The heading for section 220(d) is amended by striking 
        ``Medical Savings Account'' and inserting ``Archer MSA''.
            (5) The headings for sections 220(d)(1) and 3231(e)(10) are 
        each amended by striking ``Medical savings account'' and 
        inserting ``Archer msa''.
            (6) The headings for sections 106(b), 138(f), 220(i), and 
        4973(d) are each amended by striking ``Medical Savings 
        Accounts'' and inserting ``Archer MSAs''.
            (7) The headings for section 220(c)(1)(C) and 4975(c)(4) 
        are each amended by striking ``medical savings accounts'' and 
        inserting ``archer msas''.
            (8) The section heading for section 220 is amended to read 
        as follows:

``SEC. 220. ARCHER MSAS.''.

            (9) The item relating to section 220 in the table of 
        sections for part VII of subchapter B of chapter 1 is amended 
        to read as follows:

                              ``Sec. 220. Archer MSAs.''.
            (10) The provisions amended by the preceding provisions of 
        this section are further amended by striking ``a Archer'' each 
        place it appears and inserting ``an Archer''.
            (11) Section 220(e)(1) is further amended by striking ``A 
        Archer'' and inserting ``An Archer''.

           TITLE III--ADMINISTRATIVE AND TECHNICAL PROVISIONS

                 Subtitle A--Administrative Provisions

SEC. 301. EXEMPTION OF CERTAIN REPORTING REQUIREMENTS.

    Section 3003(a)(1) of the Federal Reports Elimination and Sunset 
Act of 1995 (31 U.S.C. 1113 note) shall not apply to any report 
required to be submitted under any of the following provisions of law:
            (1) Section 13031(f) of the Consolidated Omnibus Budget 
        Reconciliation Act of 1985 (19 U.S.C. 58c(f)).
            (2) Section 16(c) of the Foreign Trade Zones Act (19 U.S.C. 
        81p(c)).
            (3) The following provisions of the Tariff Act of 1930:
                    (A) Section 330(c)(1) (19 U.S.C. 1330(c)(1)).
                    (B) Section 607(c) (19 U.S.C. 1607(c)).
            (4) Section 5 of the International Coffee Agreement Act of 
        1980 (19 U.S.C. 1356n).
            (5) Section 351(a)(2) of the Trade Expansion Act of 1962 
        (19 U.S.C. 1981(a)(2)).
            (6) Section 502 of the Automotive Products Trade Act of 
        1965 (19 U.S.C. 2032).
            (7) Section 3131 of the Customs Enforcement Act of 1986 (19 
        U.S.C. 2081).
            (8) The following provisions of the Trade Act of 1974 (19 
        U.S.C. 2101 et seq.):
                    (A) Section 102(b)(4)(A)(ii)(I) (19 U.S.C. 
                2112(b)(4)(A)(ii)(I)).
                    (B) Section 102(e)(1) (19 U.S.C. 2112(e)(1)).
                    (C) Section 102(e)(2) (19 U.S.C. 2112(e)(2)).
                    (D) Section 104(d) (19 U.S.C. 2114(d)).
                    (E) Section 125(e) (19 U.S.C. 2135(e)).
                    (F) Section 135(e)(1) (19 U.S.C. 2155(e)(1)).
                    (G) Section 141(c) (19 U.S.C. 2171(c)).
                    (H) Section 162 (19 U.S.C. 2212).
                    (I) Section 163(b) (19 U.S.C. 2213(b)).
                    (J) Section 163(c) (19 U.S.C. 2213(c)).
                    (K) Section 203(b) (19 U.S.C. 2253(b)).
                    (L) Section 302(b)(2)(C) (19 U.S.C. 2412(b)(2)(C)).
                    (M) Section 303 (19 U.S.C. 2413).
                    (N) Section 309 (19 U.S.C. 2419).
                    (O) Section 407(a) (19 U.S.C. 2437(a)).
                    (P) Section 502(f) (19 U.S.C. 2462(f)).
                    (Q) Section 504 (19 U.S.C. 2464).
            (9) The following provisions of the Trade Agreements Act of 
        1979 (19 U.S.C. 2501 et seq.):
                    (A) Section 2(b) (19 U.S.C. 2503(b)).
                    (B) Section 3(c) (19 U.S.C. 2504(c)).
                    (C) Section 305(c) (19 U.S.C. 2515(c)).
            (10) Section 303(g)(1) of the Convention on Cultural 
        Property Implementation Act (19 U.S.C. 2602(g)(1)).
            (11) The following provisions of the Caribbean Basin 
        Economic Recovery Act (19 U.S.C. 2701 et seq.):
                    (A) Section 212(a)(1)(A) (19 U.S.C. 2702(a)(1)(A)).
                    (B) Section 212(a)(2) (19 U.S.C. 2702(a)(2)).
            (12) The following provisions of the Omnibus Trade and 
        Competitiveness Act of 1988 (19 U.S.C. 2901 et seq.):
                    (A) Section 1102 (19 U.S.C. 2902).
                    (B) Section 1103 (19 U.S.C. 2903).
                    (C) Section 1206(b) (19 U.S.C. 3006(b)).
            (13) Section 123(a) of the Customs and Trade Act of 1990 
        (Public Law 101-382) (19 U.S.C. 2083).
            (14) Section 243(b)(2) of the Caribbean Basin Economic 
        Recovery Expansion Act of 1990 (Public Law 101-382).
            (15) The following provisions of the Internal Revenue Code 
        of 1986:
                    (A) Section 6103(p)(5).
                    (B) Section 7608.
                    (C) Section 7802(f)(3).
                    (D) Section 8022(3).
                    (E) Section 9602(a).
            (16) The following provisions relating to the revenue laws 
        of the United States:
                    (A) Section 1552(c) of the Tax Reform Act of 1986 
                (100 Stat. 2753).
                    (B) Section 231 of the Deficit Reduction Act of 
                1984 (26 U.S.C. 801 note).
                    (C) Section 208 of the Tax Treatment Extension Act 
                of 1977 (26 U.S.C. 911 note).
                    (D) Section 7105 of the Technical and Miscellaneous 
                Revenue Act of 1988 (45 U.S.C. 369).
            (17) Section 4008 of the Employee Retirement Income 
        Security Act of 1974 (29 U.S.C. 1308).
            (18) Section 426 of the Black Lung Benefits Act (30 U.S.C. 
        936(b)).
            (19) Section 7502(g) of title 31, United States Code.
            (20) The following provisions of the Social Security Act:
                    (A) Section 215(i)(2)(C)(i) (42 U.S.C. 
                415(i)(2)(C)(i)).
                    (B) Section 221(i)(2) (42 U.S.C. 421(i)(2)).
                    (C) Section 221(i)(3) (42 U.S.C. 421(i)(3)).
                    (D) Section 233(e)(1) (42 U.S.C. 433(e)(1)).
                    (E) Section 452(a)(10) (42 U.S.C. 652(a)(10)).
                    (F) Section 452(g)(3)(B) (42 U.S.C. 652(g)(3)(B)).
                    (G) Section 506(a)(1) (42 U.S.C. 706(a)).
                    (H) Section 908 (42 U.S.C. 1108).
                    (I) Section 1114(f) (42 U.S.C. 1314(f)).
                    (J) Section 1120 (42 U.S.C. 1320).
                    (K) Section 1161 (42 U.S.C. 1320c-10).
                    (L) Section 1875(b) (42 U.S.C. 1395ll(b)).
                    (M) Section 1881 (42 U.S.C. 1395rr).
                    (N) Section 1882 (42 U.S.C. 1395ss(f)(2)).
            (21) Section 104(b) of the Social Security Independence and 
        Program Improvements Act of 1994 (42 USC 904 note).
            (22) Section 10 of the Railroad Retirement Act of 1937 (45 
        U.S.C. 231f).
            (23) The following provisions of the Railroad Retirement 
        Act of 1974:
                    (A) Section 22(a)(1) (45 U.S.C. 231u(a)(1)).
                    (B) Section 22(b)(1) (45 U.S.C. 231u(b)(1)).
            (24) Section 502 of the Railroad Retirement Solvency Act of 
        1983 (45 U.S.C. 231f-1).
            (25) Section 47121(c) of title 49, United States Code.
            (26) The following provisions of the Omnibus Budget 
        Reconciliation Act of 1987 (Public Law 100-203; 101 Stat. 1330-
        182):
                    (A) Section 4007(c)(4) (42 U.S.C. 1395ww note).
                    (B) Section 4079 (42 U.S.C. 1395mm note).
                    (C) Section 4205 (42 U.S.C. 1395i-3 note).
                    (D) Section 4215 (42 U.S.C. 1396r note).
            (27) The following provisions of the Inspector General Act 
        of 1978 (Public Law 95-452):
                    (A) Section 5(b).
                    (B) Section 5(d).
            (28) The following provisions of the Public Health Service 
        Act:
                    (A) In section 308(a) (42 U.S.C. 242m(a)), 
                subparagraphs (A), (B), (C), and (D) of paragraph (1).
                    (B) Section 403 (42 U.S.C. 283).
            (29) Section 404 of the Health Services and Centers 
        Amendments of 1978 (42 U.S.C. 242p) (Public Law 95-626).
            (30) The following provisions of the Older Americans Act of 
        1965:
                    (A) Section 206(d) (42 U.S.C. 3017(d)).
                    (B) Section 207 (42 U.S.C. 3018).
            (31) Section 308 of the Age Discrimination Act of 1975 (42 
        U.S.C. 6106a(b)).
            (32) Section 509(c)(3) of the Americans with Disabilities 
        Act 0f 1990 (42 U.S.C. 12209(c)(3)).
            (33) Section 4207(f) of the Omnibus Budget Reconciliation 
        Act of 1990 (42 U.S.C. 1395b-1 note).

SEC. 302. EXTENSION OF DEADLINES FOR IRS COMPLIANCE WITH CERTAIN NOTICE 
              REQUIREMENTS.

    (a) Annual Installment Agreement Notice.--Section 3506 of the 
Internal Revenue Service Restructuring and Reform Act of 1998 is 
amended by striking ``July 1, 2000'' and inserting ``September 1, 
2001''.
    (b) Notice Requirements Relating to Computation of Penalty.--
Subsection (c) of section 3306 of the Internal Revenue Service 
Restructuring and Reform Act of 1998 is amended--
            (1) by striking ``December 31, 2000'' and inserting ``June 
        30, 2001'', and
            (2) by adding at the end the following: ``In the case of 
        any notice of penalty issued after June 30, 2001, and before 
        July 1, 2003, the requirements of section 6751(a) of the 
        Internal Revenue Code of 1986 shall be treated as met if such 
        notice contains a telephone number at which the taxpayer can 
        request a copy of the taxpayer's assessment and payment history 
        with respect to such penalty.''.
    (c) Notice Requirements Relating to Interest Imposed.--Subsection 
(c) of section 3308 of the Internal Revenue Service Restructuring and 
Reform Act of 1998 is amended--
            (1) by striking ``December 31, 2000'' and inserting ``June 
        30, 2001'', and
            (2) by adding at the end the following: ``In the case of 
        any notice issued after June 30, 2001, and before July 1, 2003, 
        to which section 6631 of the Internal Revenue Code of 1986 
        applies, the requirements of section 6631 of such Code shall be 
        treated as met if such notice contains a telephone number at 
        which the taxpayer can request a copy of the taxpayer's payment 
        history relating to interest amounts included in such 
        notice.''.

SEC. 303. EXTENSION OF AUTHORITY FOR UNDERCOVER OPERATIONS.

    Paragraph (6), and the last sentence, of section 7608(c) are each 
amended by striking ``January 1, 2001'' and inserting ``January 1, 
2006''.

SEC. 304. CONFIDENTIALITY OF CERTAIN DOCUMENTS RELATING TO CLOSING AND 
              SIMILAR AGREEMENTS AND TO AGREEMENTS WITH FOREIGN 
              GOVERNMENTS.

    (a) Closing and Similar Agreements Treated As Return Information.--
Paragraph (2) of section 6103(b) (defining return information) is 
amended by striking ``and'' at the end of subparagraph (B), by 
inserting ``and'' at the end of subparagraph (C), and by inserting 
after subparagraph (C) the following new subparagraph:
                    ``(D) any agreement under section 7121, and any 
                similar agreement, and any background information 
                related to such an agreement or request for such an 
                agreement,''.
    (b) Agreements With Foreign Governments.--
            (1) In general.--Subchapter B of chapter 61 (relating to 
        miscellaneous provisions) is amended by inserting after section 
        6104 the following new section:

``SEC. 6105. CONFIDENTIALITY OF INFORMATION ARISING UNDER TREATY 
              OBLIGATIONS.

    ``(a) In General.--Tax convention information shall not be 
disclosed.
    ``(b) Exceptions.--Subsection (a) shall not apply--
            ``(1) to the disclosure of tax convention information to 
        persons or authorities (including courts and administrative 
        bodies) which are entitled to such disclosure pursuant to a tax 
        convention,
            ``(2) to any generally applicable procedural rules 
        regarding applications for relief under a tax convention, or
            ``(3) in any case not described in paragraphs (1) or (2), 
        to the disclosure of any tax convention information not 
        relating to a particular taxpayer if the Secretary determines, 
        after consultation with each other party to the tax convention, 
        that such disclosure would not impair tax administration.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Tax convention information.--The term `tax convention 
        information' means any--
                    ``(A) agreement entered into with the competent 
                authority of one or more foreign governments pursuant 
                to a tax convention,
                    ``(B) application for relief under a tax 
                convention,
                    ``(C) any background information related to such 
                agreement or application,
                    ``(D) document implementing such agreement, and
                    ``(E) any other information exchanged pursuant to a 
                tax convention which is treated as confidential or 
                secret under the tax convention.
            ``(2) Tax convention.--The term `tax convention' means--
                    ``(A) any income tax or gift and estate tax 
                convention, or
                    ``(B) any other convention or bilateral agreement 
                (including multilateral conventions and agreements and 
                any agreement with a possession of the United States) 
                providing for the avoidance of double taxation, the 
                prevention of fiscal evasion, nondiscrimination with 
                respect to taxes, the exchange of tax relevant 
                information with the United States, or mutual 
                assistance in tax matters.
    ``(d) Cross References.--

                                ``For penalties for the unauthorized 
disclosure of tax convention information which is return or return 
information, see sections 7213, 7213A, and 7431.''.
            (2) Clerical amendment.--The table of sections for 
        subchapter B of chapter 61 is amended by inserting after the 
        item relating to section 6104 the following new item:

                              ``Sec. 6105. Confidentiality of 
                                        information arising under 
                                        treaty obligations.''.
    (c) Exception From Public Inspection as Written Determination.--
            (1) Closing and similar agreements.--Paragraph (1) of 
        section 6110(b) is amended to read as follows:
            ``(1) Written determination.--
                    ``(A) In general.--The term `written determination' 
                means a ruling, determination letter, technical advice 
                memorandum, or Chief Counsel advice.
                    ``(B) Exceptions.--Such term shall not include any 
                matter referred to in subparagraph (C) or (D) of 
                section 6103(b)(2).''.
            (2) Agreements with foreign governments.--Paragraph (1) of 
        section 6110(l) is amended by inserting ``or 6105'' after 
        ``6104''.
    (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 305. INCREASE IN THRESHOLD FOR JOINT COMMITTEE REPORTS ON REFUNDS 
              AND CREDITS.

    (a) General Rule.--Subsections (a) and (b) of section 6405 are each 
amended by striking ``$1,000,000'' and inserting ``$2,000,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act, except that such 
amendment shall not apply with respect to any refund or credit with 
respect to a report that has been made before such date of the 
enactment under section 6405 of the Internal Revenue Code of 1986.

SEC. 306. TREATMENT OF MISSING CHILDREN WITH RESPECT TO CERTAIN TAX 
              BENEFITS.

    (a) In General.--Subsection (c) of section 151 (relating to 
additional exemption for dependents) is amended by adding at the end 
the following new paragraph:
            ``(6) Treatment of missing children.--
                    ``(A) In general.--Solely for the purposes referred 
                to in subparagraph (B), a child of the taxpayer--
                            ``(i) who is presumed by law enforcement 
                        authorities to have been kidnapped by someone 
                        who is not a member of the family of such child 
                        or the taxpayer, and
                            ``(ii) who was (without regard to this 
                        paragraph) the dependent of the taxpayer for 
                        the portion of the taxable year before the date 
                        of the kidnapping,
                shall be treated as a dependent of the taxpayer for all 
                taxable years ending during the period that the child 
                is kidnapped.
                    ``(B) Purposes.--Subparagraph (A) shall apply 
                solely for purposes of determining--
                            ``(i) the deduction under this section,
                            ``(ii) the credit under section 24 
                        (relating to child tax credit), and
                            ``(iii) whether an individual is a 
                        surviving spouse or a head of a household (such 
                        terms are defined in section 2).
                    ``(C) Comparable treatment for earned income 
                credit.--For purposes of section 32, an individual--
                            ``(i) who is presumed by law enforcement 
                        authorities to have been kidnapped by someone 
                        who is not a member of the family of such 
                        individual or the taxpayer, and
                            ``(ii) who had, for the taxable year in 
                        which the kidnapping occurred, the same 
                        principal place of abode as the taxpayer for 
                        more than one-half of the portion of such year 
                        before the date of the kidnapping,
                shall be treated as meeting the requirement of section 
                32(c)(3)(A)(ii) with respect to a taxpayer for all 
                taxable years ending during the period that the 
                individual is kidnapped.
                    ``(D) Termination of treatment.--Subparagraphs (A) 
                and (C) shall cease to apply as of the first taxable 
                year of the taxpayer beginning after the calendar year 
                in which there is a determination that the child is 
                dead (or, if earlier, in which the child would have 
                attained age 18).''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years ending after the date of the enactment of this Act.

SEC. 307. AMENDMENTS TO STATUTES REFERENCING YIELD ON 52-WEEK TREASURY 
              BILLS.

    (a) Amendment to the Act of February 26, 1931.--Section 6 of the 
Act of February 26, 1931 (40 U.S.C. 258e-1) (relating to the interest 
rate on compensation owed for takings of property) is amended--
            (1) in paragraph (1), by striking ``the coupon issue yield 
        equivalent (as determined by the Secretary of the Treasury) of 
        the average accepted auction price for the last auction of 52 
        week United States Treasury bills settled immediately before'' 
        and inserting ``the weekly average 1-year constant maturity 
        Treasury yield, as published by the Board of Governors of the 
        Federal Reserve System, for the calendar week preceding''; and
            (2) in paragraph (2), by striking ``the coupon issue yield 
        equivalent (as determined by the Secretary of the Treasury) of 
        the average accepted auction price for the last auction of 52 
        week United States Treasury bills settled immediately before'' 
        and inserting ``the weekly average 1-year constant maturity 
        Treasury yield, as published by the Board of Governors of the 
        Federal Reserve System, for the calendar week preceding''.
    (b) Amendment to Title 18, United States Code.--Section 
3612(f)(2)(B) of title 18, United States Code (relating to the interest 
rate on unpaid criminal fines and penalties of more than $2,500) is 
amended by striking ``the coupon issue yield equivalent (as determined 
by the Secretary of the Treasury) of the average accepted auction price 
for the last auction of fifty-two week United States Treasury bills 
settled before'' and inserting `the weekly average 1-year constant 
maturity Treasury yield, as published by the Board of Governors of the 
Federal Reserve System, for the calendar week preceding.''.
    (c) Amendment to the Internal Revenue Code.--Section 995(f)(4) 
(relating to the interest rate on tax-deferred liability of 
shareholders of domestic international sales corporations) is amended 
by striking ``the average investment yield of United States Treasury 
bills with maturities of 52 weeks which were auctioned during the 1-
year period'' and inserting ``the average of the 1-year constant 
maturity Treasury yields, as published by the Board of Governors of the 
Federal Reserve System, for the 1-year period''.
    (d) Amendments to Title 28, United States Code.--
            (1) Amendment to section 1961.--Section 1961(a) of title 
        28, United States Code (relating to the interest rate on money 
        judgments in civil cases recovered in Federal district court) 
        is amended by striking ``the coupon issue yield equivalent (as 
        determined by the Secretary of the Treasury) of the average 
        accepted auction price for the last auction of fifty-two week 
        United States Treasury bills settled immediately prior to'' and 
        inserting ``the weekly average 1-year constant maturity 
        Treasury yield, as published by the Board of Governors of the 
        Federal Reserve System, for the calendar week preceding.''.
            (2) Amendment to section 2516.--Section 2516(b) of title 
        28, United States Code (relating to the interest rate on a 
        judgment against the United States affirmed by the Supreme 
        Court after review on petition of the United States) is amended 
        by striking ``the coupon issue yield equivalent (as determined 
        by the Secretary of the Treasury) of the average accepted 
        auction price for the last auction of fifty-two week United 
        States Treasury bills settled immediately before'' and 
        inserting ``the weekly average 1-year constant maturity 
        Treasury yield, as published by the Board of Governors of the 
        Federal Reserve System, for the calendar week preceding''.

SEC. 308. ADJUSTMENTS FOR CONSUMER PRICE INDEX ERROR.

    (a) Determinations by OMB.--As soon as practicable after the date 
of the enactment of this Act, the Director of the Office of Management 
and Budget shall determine with respect to each applicable Federal 
benefit program whether the CPI computation error for 1999 has or will 
result in a shortfall in payments to beneficiaries under such program 
(as compared to payments that would have been made if the error had not 
occurred). As soon as practicable after the date of the enactment of 
this Act, but not later than 60 days after such date, the Director 
shall direct the head of the Federal agency which administers such 
program to make a payment or payments that, insofar as the Director 
finds practicable and feasible--
            (1) are targeted to the amount of the shortfall experienced 
        by individual beneficiaries, and
            (2) compensate for the shortfall.
    (b) Coordination with Federal Agencies.--As soon as practicable 
after the date of the enactment of this Act, each Federal agency that 
administers an applicable Federal benefit program shall, in accordance 
with such guidelines as are issued by the Director pursuant to this 
section, make an initial determination of whether, and the extent to 
which, the CPI computation error for 1999 has or will result in a 
shortfall in payments to beneficiaries of an applicable Federal benefit 
program administered by such agency. Not later than 30 days after such 
date, the head of such agency shall submit a report to the Director and 
to each House of the Congress of such determination, together with a 
complete description of the nature of the shortfall.
    (c) Implementation Pursuant to Agency Reports.--Upon receipt of the 
report submitted by a Federal agency pursuant to subsection (b), the 
Director shall review the initial determination of the agency, the 
agency's description of the nature of the shortfall, and the 
compensation payments proposed by the agency. Prior to directing 
payment of such payments pursuant to subsection (a), the Director shall 
make appropriate adjustments (if any) in the compensation payments 
proposed by the agency that the Director determines are necessary to 
comply with the requirements of subsection (a) and transmit to the 
agency a summary report of the review, indicating any adjustments made 
by the Director. The agency shall make the compensation payments as 
directed by the Director pursuant to subsection (a) in accordance with 
the Director's summary report.
    (d) Income Disregard Under Federal Means-Tested Benefit Programs.--
A payment made under this section to compensate for a shortfall in 
benefits shall, in accordance with guidelines issued by the Director 
pursuant to this section, be disregarded in determining income under 
title VIII of the Social Security Act or any applicable Federal benefit 
program that is means-tested.
    (e) Funding.--Funds otherwise available under each applicable 
Federal benefit program for making benefit payments under such program 
are hereby made available for making compensation payments under this 
section in connection with such program.
    (f) No Judicial Review.--No action taken pursuant to this section 
shall be subject to judicial review.
    (g) Director's Report.--Not later than April 1, 2001, the Director 
shall submit to each House of the Congress a report on the activities 
performed by the Director pursuant to this section.
    (h) Definitions.--For purposes of this section:
            (1) Applicable federal benefit program.--The term 
        ``applicable Federal benefit program'' means any program of the 
        Government of the United States providing for regular or 
        periodic payments or cash assistance paid directly to 
        individual beneficiaries, as determined by the Director of the 
        Office of Management and Budget.
            (2) Federal agency.--The term ``Federal agency'' means a 
        department, agency, or instrumentality of the Government of the 
        United States.
            (3) CPI computation error for 1999.--The term ``CPI 
        computation error for 1999'' means the error in the computation 
        of the Consumer Price Index announced by the Bureau of Labor 
        Statistics on September 28, 2000.
    (i) Tax Provisions.--In the case of taxable years (and other 
periods) beginning after December 31, 2000, if any Consumer Price Index 
(as defined in section 1(f)(5) of the Internal Revenue Code of 1986) 
reflects the CPI computation error for 1999--
            (1) the correct amount of such Index shall (in such manner 
        and to such extent as the Secretary of the Treasury determines 
        to be appropriate) be taken into account for purposes of such 
        Code, and
            (2) tables prescribed under section 1(f) of such Code to 
        reflect such correct amount shall apply in lieu of any tables 
        that were prescribed based on the erroneous amount.

SEC. 309. PREVENTION OF DUPLICATION OF LOSS THROUGH ASSUMPTION OF 
              LIABILITIES GIVING RISE TO A DEDUCTION.

    (a) In General.--Section 358 (relating to basis to distributees) is 
amended by adding at the end the following new subsection:
    ``(h) Special Rules for Assumption of Liabilities To Which 
Subsection (d) Does Not Apply.--
            ``(1) In general.--If, after application of the other 
        provisions of this section to an exchange or series of 
        exchanges, the basis of property to which subsection (a)(1) 
        applies exceeds the fair market value of such property, then 
        such basis shall be reduced (but not below such fair market 
        value) by the amount (determined as of the date of the 
        exchange) of any liability--
                    ``(A) which is assumed in exchange for such 
                property, and
                    ``(B) with respect to which subsection (d)(1) does 
                not apply to the assumption.
            ``(2) Exceptions.--Except as provided by the Secretary, 
        paragraph (1) shall not apply to any liability if--
                    ``(A) the trade or business with which the 
                liability is associated is transferred to the person 
                assuming the liability as part of the exchange, or
                    ``(B) substantially all of the assets with which 
                the liability is associated are transferred to the 
                person assuming the liability as part of the exchange.
            ``(3) Liability.--For purposes of this subsection, the term 
        `liability' shall include any fixed or contingent obligation to 
        make payment, without regard to whether the obligation is 
        otherwise taken into account for purposes of this title.''.
    (b) Determination of Amount of Liability Assumed.--Section 
357(d)(1) is amended by inserting ``section 358(h),'' after ``section 
358(d),''.
    (c) Application of Comparable Rules to Partnerships and S 
Corporations.--The Secretary of the Treasury or his delegate--
            (1) shall prescribe rules which provide appropriate 
        adjustments under subchapter K of chapter 1 of the Internal 
        Revenue Code of 1986 to prevent the acceleration or duplication 
        of losses through the assumption of (or transfer of assets 
        subject to) liabilities described in section 358(h)(3) of such 
        Code (as added by subsection (a)) in transactions involving 
        partnerships, and
            (2) may prescribe rules which provide appropriate 
        adjustments under subchapter S of chapter 1 of such Code in 
        transactions described in paragraph (1) involving S 
        corporations rather than partnerships.
    (d) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to assumptions of liability after October 18, 1999.
            (2) Rules.--The rules prescribed under subsection (c) shall 
        apply to assumptions of liability after October 18, 1999, or 
        such later date as may be prescribed in such rules.

SEC. 310. DISCLOSURE OF CERTAIN INFORMATION TO CONGRESSIONAL BUDGET 
              OFFICE.

    (a) Disclosure of Certain Tax Information.--
            (1) In general.--Subsection (j) of section 6103 (relating 
        to statistical use) is amended by adding at the end the 
        following new paragraph:
            ``(6) Congressional budget office.--Upon written request by 
        the Director of the Congressional Budget Office, the Secretary 
        shall furnish to officers and employees of the Congressional 
        Budget Office return information for the purpose of, but only 
        to the extent necessary for, long-term models of the social 
        security and medicare programs.''.
            (2) Recordkeeping safeguards.--Section 6103(p) is amended--
                    (A) in paragraph (4)--
                            (i) in the matter preceding subparagraph 
                        (A), by inserting ``the Congressional Budget 
                        Office,'' after ``General Accounting Office,'',
                            (ii) in subparagraph (E), by striking 
                        ``commission or the General Accounting Office'' 
                        and inserting ``commission, the General 
                        Accounting Office, or the Congressional Budget 
                        Office'',
                            (iii) in subparagraph (F)(ii), by striking 
                        ``or the General Accounting Office,'' and 
                        inserting ``the General Accounting Office, or 
                        the Congressional Budget Office,'', and
                            (iv) in the matter following subparagraph 
                        (F), by inserting ``or the Congressional Budget 
                        Office'' after ``General Accounting Office'' 
                        both places it appears,
                    (B) in paragraph (5), by striking ``commissions and 
                the General Accounting Office'' and inserting 
                ``commissions, the General Accounting Office, and the 
                Congressional Budget Office'', and
                    (C) in paragraph (6)(A), by inserting ``and the 
                Congressional Budget Office'' after ``commissions''.
    (b) Confidentiality of Records.--
            (1) In general.--Section 203 of the Congressional Budget 
        Act of 1974 (2 U.S.C. 603) is amended by adding at the end the 
        following:
    ``(e) Level of Confidentiality.--With respect to information, data, 
estimates, and statistics obtained under sections 201(d) and 201(e), 
the Director shall maintain the same level of confidentiality as is 
required by law of the department, agency, establishment, or regulatory 
agency or commission from which it is obtained. Officers and employees 
of the Congressional Budget Office shall be subject to the same 
statutory penalties for unauthorized disclosure or use as officers or 
employees of the department, agency, establishment, or regulatory 
agency or commission from which it is obtained.''.
            (2) Conforming amendment.--Subsection (a) of section 203 of 
        such Act is amended by striking ``subsections (c) and (d)'' and 
        inserting ``subsections (c), (d), and (e)''.

                   Subtitle B--Technical Corrections

SEC. 311. AMENDMENTS RELATED TO TICKET TO WORK AND WORK INCENTIVES 
              IMPROVEMENT ACT OF 1999.

    (a) Amendments Related to Section 502 of the Act.--
            (1) Section 280C(c)(1) is amended by striking ``or credit'' 
        after ``deduction'' each place it appears.
            (2) Section 30A is amended by redesignating subsections (f) 
        and (g) as subsections (g) and (h), respectively, and by 
        inserting after subsection (e) the following new subsection:
    ``(f) Denial of Double Benefit.--Any wages or other expenses taken 
into account in determining the credit under this section may not be 
taken into account in determining the credit under section 41.''.
    (b) Amendment Related to Section 545 of the Act.--Clause (ii) of 
section 857(b)(7)(B) is amended to read as follows:
                            ``(ii) Exception for certain amounts.--
                        Clause (i) shall not apply to amounts received 
                        directly or indirectly by a real estate 
                        investment trust--
                                    ``(I) for services furnished or 
                                rendered by a taxable REIT subsidiary 
                                that are described in paragraph (1)(B) 
                                of section 856(d), or
                                    ``(II) from a taxable REIT 
                                subsidiary that are described in 
                                paragraph (7)(C)(ii) of such 
                                section.''.
    (c) Clarification Related to Section 538 of the Act.--The reference 
to section 332(b)(1) of the Internal Revenue Code of 1986 in Treasury 
Regulation section 1.1502-34 shall be deemed to include a reference to 
section 732(f) of such Code.
    (d) Effective Date.--Subsection (c) and the amendments made by this 
section shall take effect as if included in the provisions of the 
Ticket to Work and Work Incentives Improvement Act of 1999 to which 
they relate.

SEC. 312. AMENDMENTS RELATED TO TAX AND TRADE RELIEF EXTENSION ACT OF 
              1998.

    (a) Amendment Related to Section 1004(b) of the Act.--Subsection 
(d) of section 6104 is amended by adding at the end the following new 
paragraph:
            ``(6) Application to nonexempt charitable trusts and 
        nonexempt private foundations.--The organizations referred to 
        in paragraphs (1) and (2) of section 6033(d) shall comply with 
        the requirements of this subsection relating to annual returns 
        filed under section 6033 in the same manner as the 
        organizations referred to in paragraph (1).''.
    (b) Amendment Related to Section 4003 of the Act.--Subsection (b) 
of section 4003 of the Tax and Trade Relief Extension Act of 1998 is 
amended by inserting ``(7)(A)(i)(II),'' after ``(5)(A)(ii)(I),''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the Tax and Trade Relief 
Extension Act of 1998 to which they relate.

SEC. 313. AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE RESTRUCTURING 
              AND REFORM ACT OF 1998.

    (a) Amendments Related to Innocent Spouse Relief.--
            (1) Election may be made any time after deficiency 
        asserted.--Subparagraph (B) of section 6015(c)(3) is amended by 
        striking ``shall be made'' and inserting ``may be made at any 
        time after a deficiency for such year is asserted but''.
            (2) Clarification regarding disallowance of refunds and 
        credits under section 6015(c).--
                    (A) In general.--Section 6015 is amended by 
                redesignating subsection (g) as subsection (h) and by 
                inserting after subsection (f) the following new 
                subsection:
    ``(g) Credits and Refunds.--
            ``(1) In general.--Except as provided in paragraphs (2) and 
        (3), notwithstanding any other law or rule of law (other than 
        section 6511, 6512(b), 7121, or 7122), credit or refund shall 
        be allowed or made to the extent attributable to the 
        application of this section.
            ``(2) Res judicata.--In the case of any election under 
        subsection (b) or (c), if a decision of a court in any prior 
        proceeding for the same taxable year has become final, such 
        decision shall be conclusive except with respect to the 
        qualification of the individual for relief which was not an 
        issue in such proceeding. The exception contained in the 
        preceding sentence shall not apply if the court determines that 
        the individual participated meaningfully in such prior 
        proceeding.
            ``(3) Credit and refund not allowed under subsection (c).--
        No credit or refund shall be allowed as a result of an election 
        under subsection (c).''.
                    (B) Conforming amendment.--Paragraph (3) of section 
                6015(e) is amended to read as follows:
            ``(3) Limitation on tax court jurisdiction.--If a suit for 
        refund is begun by either individual filing the joint return 
        pursuant to section 6532--
                    ``(A) the Tax Court shall lose jurisdiction of the 
                individual's action under this section to whatever 
                extent jurisdiction is acquired by the district court 
                or the United States Court of Federal Claims over the 
                taxable years that are the subject of the suit for 
                refund, and
                    ``(B) the court acquiring jurisdiction shall have 
                jurisdiction over the petition filed under this 
                subsection.''.
            (3) Clarifications regarding review by tax court.--
                    (A) Paragraph (1) of section 6015(e) is amended in 
                the matter preceding subparagraph (A) by inserting 
                after ``individual'' the following: ``against whom a 
                deficiency has been asserted and''.
                    (B) Subparagraph (A) of section 6015(e)(1) is 
                amended to read as follows:
                    ``(A) In general.--In addition to any other remedy 
                provided by law, the individual may petition the Tax 
                Court (and the Tax Court shall have jurisdiction) to 
                determine the appropriate relief available to the 
                individual under this section if such petition is 
                filed--
                            ``(i) at any time after the earlier of--
                                    ``(I) the date the Secretary mails, 
                                by certified or registered mail to the 
                                taxpayer's last known address, notice 
                                of the Secretary's final determination 
                                of relief available to the individual, 
                                or
                                    ``(II) the date which is 6 months 
                                after the date such election is filed 
                                with the Secretary, and
                            ``(ii) not later than the close of the 90th 
                        day after the date described in clause 
                        (i)(I).''.
                    (C) Subparagraph (B)(i) of section 6015(e)(1) is 
                amended--
                            (i) by striking ``until the expiration of 
                        the 90-day period described in subparagraph 
                        (A)'' and inserting ``until the close of the 
                        90th day referred to in subparagraph (A)(ii)'', 
                        and
                            (ii) by inserting ``under subparagraph 
                        (A)'' after ``filed with the Tax Court''.
                    (D)(i) Subsection (e) of section 6015 is amended by 
                adding at the end the following new paragraph:
            ``(5) Waiver.--An individual who elects the application of 
        subsection (b) or (c) (and who agrees with the Secretary's 
        determination of relief) may waive in writing at any time the 
        restrictions in paragraph (1)(B) with respect to collection of 
        the outstanding assessment (whether or not a notice of the 
        Secretary's final determination of relief has been mailed).''.
                    (ii) Paragraph (2) of section 6015(e) is amended to 
                read as follows:
            ``(2) Suspension of running of period of limitations.--The 
        running of the period of limitations in section 6502 on the 
        collection of the assessment to which the petition under 
        paragraph (1)(A) relates shall be suspended--
                    ``(A) for the period during which the Secretary is 
                prohibited by paragraph (1)(B) from collecting by levy 
                or a proceeding in court and for 60 days thereafter, 
                and
                    ``(B) if a waiver under paragraph (5) is made, from 
                the date the claim for relief was filed until 60 days 
                after the waiver is filed with the Secretary.''.
    (b) Amendments Related to Procedure and Administration.--
            (1) Disputes involving $50,000 or less.--Section 7463 is 
        amended by adding at the end the following new subsection:
    ``(f) Additional Cases in Which Proceedings May Be Conducted Under 
This Section.--At the option of the taxpayer concurred in by the Tax 
Court or a division thereof before the hearing of the case, proceedings 
may be conducted under this section (in the same manner as a case 
described in subsection (a)) in the case of--
            ``(1) a petition to the Tax Court under section 6015(e) in 
        which the amount of relief sought does not exceed $50,000, and
            ``(2) an appeal under section 6330(d)(1)(A) to the Tax 
        Court of a determination in which the unpaid tax does not 
        exceed $50,000.''.
            (2) Authority to enjoin collection actions.--
                    (A) Section 6330(e)(1) is amended by adding at the 
                end the following: ``Notwithstanding the provisions of 
                section 7421(a), the beginning of a levy or proceeding 
                during the time the suspension under this paragraph is 
                in force may be enjoined by a proceeding in the proper 
                court, including the Tax Court. The Tax Court shall 
                have no jurisdiction under this paragraph to enjoin any 
                action or proceeding unless a timely appeal has been 
                filed under subsection (d)(1) and then only in respect 
                of the unpaid tax or proposed levy to which the 
                determination being appealed relates.''.
                    (B) Section 7421(a) is amended by inserting 
                ``6330(e)(1),'' after ``6246(b),''.
            (3) Clarification.--Paragraph (3) of section 6331(k) is 
        amended by striking ``(3), (4), and (5)'' and inserting ``(3) 
        and (4)''.
    (c) Amendment Related to Section 1103 of the Act.--Paragraph (6) of 
section 6103(k) is amended--
            (1) by inserting ``and an officer or employee of the Office 
        of Treasury Inspector General for Tax Administration'' after 
        ``internal revenue officer or employee'', and
            (2) by striking ``internal revenue'' in the heading and 
        inserting ``certain''.
    (d) Amendment Related to Section 3401 of the Act.--Section 
6330(d)(1)(A) is amended by striking ``to hear'' and inserting ``with 
respect to''.
    (e) Amendment Related to Section 3509 of the Act.--Subparagraph (A) 
of section 6110(g)(5) is amended by inserting ``, any Chief Counsel 
advice,'' after ``technical advice memorandum''.
    (f) Effective Dates.--The amendments made by subsections (a) and 
(b) shall take effect on the date of the enactment of this Act. The 
amendments made by subsections (c), (d), and (e) shall take effect as 
if included in the provisions of the Internal Revenue Service 
Restructuring and Reform Act of 1998 to which they relate.

SEC. 314. AMENDMENTS RELATED TO TAXPAYER RELIEF ACT OF 1997.

    (a) Amendment Related to Section 101 of the Act.--Paragraph (4) of 
section 6211(b) is amended by striking ``sections 32 and 34'' and 
inserting ``sections 24(d), 32, and 34''.
    (b) Amendment Related to Section 302 of the Act.--The last sentence 
of section 3405(e)(1)(B) is amended by inserting ``(other than a Roth 
IRA)'' after ``individual retirement plan''.
    (c) Amendment to Section 311 of the Act.--Paragraph (3) of section 
311(e) of the Taxpayer Relief Act of 1997 (relating to election to 
recognize gain on assets held on January 1, 2001) is amended by adding 
at the end the following new sentence: ``Such an election shall not 
apply to any asset which is disposed of (in a transaction in which gain 
or loss is recognized in whole or in part) before the close of the 1-
year period beginning on the date that the asset would have been 
treated as sold under such election.''.
    (d) Amendment Related to Section 402 of the Act.--The flush 
sentence at the end of clause (ii) of section 56(a)(1)(A) is amended by 
inserting before ``or to any other property'' the following: ``(and the 
straight line method shall be used for such 1250 property)''.
    (e) Amendments Related to Section  1072 of the Act.--
            (1) Clause (ii) of section 415(c)(3)(D) and subparagraph 
        (B) of section 403(b)(3) are each amended by striking ``section 
        125 or'' and inserting ``section 125, 132(f)(4), or''.
            (2) Paragraph (2) of section 414(s) is amended by striking 
        ``section 125, 402(e)(3)'' and inserting ``section 125, 
        132(f)(4), 402(e)(3)''.
    (f) Amendment Related to Section  1454 of the Act.--Subsection (a) 
of section 7436 is amended by inserting before the period at the end of 
the first sentence ``and the proper amount of employment tax under such 
determination''.
    (g) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the Taxpayer Relief of 1997 
to which they relate.

SEC. 315. AMENDMENTS RELATED TO BALANCED BUDGET ACT OF 1997.

    (a) Amendments Related to Section  9302 of the Act.--
            (1) Paragraph (1) of section 9302(j) of the Balanced Budget 
        Act of 1997 is amended by striking ``tobacco products and 
        cigarette papers and tubes'' and inserting ``cigarettes''.
            (2)(A) Subsection (h) of section 5702 is amended to read as 
        follows:
    ``(h) Manufacturer of Cigarette Papers and Tubes.--`Manufacturer of 
cigarette papers and tubes' means any person who manufactures cigarette 
paper, or makes up cigarette paper into tubes, except for his own 
personal use or consumption.''.
            (B) Section 5702, as amended by subparagraph (A), is 
        amended by striking subsection (f) and by redesignating 
        subsections (g) through (p) as subsections (f) through (o), 
        respectively.
            (3) Subsection (c) of section 5761 is amended by adding at 
        the end the following: ``This subsection and section 5754 shall 
        not apply to any person who relands or receives tobacco 
        products in the quantity allowed entry free of tax and duty 
        under chapter 98 of the Harmonized Tariff Schedule of the 
        United States, and such person may voluntarily relinquish to 
        the Secretary at the time of entry any excess of such quantity 
        without incurring the penalty under this subsection. No 
        quantity of tobacco products other than the quantity referred 
        to in the preceding sentence may be relanded or received as a 
        personal use quantity.''.
    (b) Effective Date.--The amendments made by this section shall take 
effect as if included in section 9302 of the Balanced Budget Act of 
1997.

SEC. 316. AMENDMENTS RELATED TO SMALL BUSINESS JOB PROTECTION ACT OF 
              1996.

    (a) Amendment Related to Section 1201 of the Act.--Subparagraph (B) 
of section 51(d)(2) is amended--
            (1) by striking ``plan approved'' and inserting ``program 
        funded'', and
            (2) by striking ``(relating to assistance for needy 
        families with minor children)''.
    (b) Amendment Related to Section 1302 of the Act.--Clause (i) of 
section 1361(e)(1)(A) is amended by striking ``or'' before ``(III)'' 
and by adding at the end the following: ``or (IV) an organization 
described in section 170(c)(1) which holds a contingent interest in 
such trust and is not a potential current beneficiary,''.
    (c) Amendment Related to Section 1401 of the Act.--Clause (ii) of 
section 401(k)(10)(B) is amended by adding at the end the following new 
sentence: ``Such term includes a distribution of an annuity contract 
from--
                                    ``(I) a trust which forms a part of 
                                a plan described in section 401(a) and 
                                which is exempt from tax under section 
                                501(a), or
                                    ``(II) an annuity plan described in 
                                section 403(a).''.
    (d) Amendment Related to Section 1427 of the Act.--Clause (ii) of 
section 219(c)(1)(B) is amended by striking ``and'' at the end of 
subclause (I), by redesignating subclause (II) as subclause (III), and 
by inserting after subclause (I) the following new subclause:
                                    ``(II) the amount of any designated 
                                nondeductible contribution (as defined 
                                in section 408(o)) on behalf of such 
                                spouse for such taxable year, and''.
    (e) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the Small Business Job 
Protection Act of 1996 to which they relate.

SEC. 317. AMENDMENT RELATED TO REVENUE RECONCILIATION ACT OF 1990.

    (a) Amendment Related to Section 11511 of the Act.--Subparagraph 
(C) of section 43(c)(1) is amended--
            (1) by inserting ``(as defined in section 193(b))'' after 
        ``expenses'', and
            (2) by striking ``under section 193''.
    (b) Effective Date.--The amendment made by this section shall take 
effect as if included in section 11511 of the Revenue Reconciliation 
Act of 1990.

SEC. 318. OTHER TECHNICAL CORRECTIONS.

    (a) Modified Endowment Contracts.--
            (1) Paragraph (2) of section 7702A(a) is amended by 
        inserting ``or this paragraph'' before the period.
            (2) Clause (ii) of section 7702A(c)(3)(A) is amended by 
        striking ``under the contract'' and inserting ``under the old 
        contract''.
            (3) The amendments made by this subsection shall take 
        effect as if included in the amendments made by section 5012 of 
        the Technical and Miscellaneous Revenue Act of 1988.
    (b) Affiliated Corporations in Context of Worthless Securities.--
            (1) Subparagraph (A) of section 165(g)(3) is amended to 
        read as follows:
                    ``(A) the taxpayer owns directly stock in such 
                corporation meeting the requirements of section 
                1504(a)(2), and''.
            (2) Paragraph (3) of section 165(g) is amended by striking 
        the last sentence.
            (3) The amendments made by this subsection shall apply to 
        taxable years beginning after December 31, 1984.
    (c) Certain Annuities Issued by Tax-Exempt Organizations Not 
Treated as Debt Instruments under Original Issue Discount Rules.--
            (1) Clause (ii) of section 1275(a)(1)(B) is amended by 
        striking ``subchapter L'' and inserting ``subchapter L (or by 
        an entity described in section 501(c) and exempt from tax under 
        section 501(a) which would be subject to tax under subchapter L 
        were it not so exempt)''.
            (2) The amendment made by this subsection shall take effect 
        as if included in the amendments made by section 41 of the Tax 
        Reform Act of 1984.
    (d) Tentative Carryback Adjustments of Losses From Section 1256 
Contracts.--
            (1) Subsection (a) of section 6411 is amended by striking 
        ``section 1212(a)(1)'' and inserting ``subsection (a)(1) or (c) 
        of section 1212''.
            (2) The amendment made by paragraph (1) shall take effect 
        as if included in the amendments made by section 504 of the 
        Economic Recovery Tax Act of 1981.
    (e) Correction of Calculation of Amounts to be Deposited in Highway 
Trust Fund.--
            (1) Subsection (b) of section 9503 is amended by striking 
        paragraph (5) and redesignating paragraph (6) as paragraph (5).
            (2) The amendment made by paragraph (1) shall apply with 
        respect to taxes received in the Treasury after the date of the 
        enactment of this Act.
    (f) Expenditures From Vaccine Injury Compensation Trust Fund.--
Section 9510(c)(1)(A) is amended by striking ``December 31, 1999'' and 
inserting ``October 18, 2000''.

SEC. 319. CLERICAL CHANGES.

            (1) Clause (i) of section 45(d)(7)(A) is amended by 
        striking ``paragraph (3)(A)'' and inserting ``subsection 
        (c)(3)(A)''.
            (2) Subsection (f) of section 67 is amended by striking 
        ``the last sentence'' and inserting ``the second sentence''.
            (3) The heading for paragraph (5) of section 408(d) is 
        amended to read as follows:
            ``(5) Distributions of excess contributions after due date 
        for taxable year and certain excess rollover contributions.--
        ''.
            (4) Paragraph (3) of section 475(g) is amended by striking 
        ``267(b) of'' and inserting ``267(b) or''.
            (5) The heading for subparagraph (B) of section 529(e)(3) 
        is amended by striking ``under guaranteed plans''.
            (6) Clause (iii) of section 530(d)(4)(B) is amended by 
        striking ``; or'' at the end and inserting ``, or''.
            (7) Paragraphs (1)(C) and (2)(C) of section 664(d) are each 
        amended by striking the period after ``subsection (g))''.
            (8)(A) Subsection (e) of section 678 is amended by striking 
        ``an electing small business corporation'' and inserting ``an S 
        corporation''.
            (B) Clause (v) of section 6103(e)(1)(D) is amended to read 
        as follows:
                            ``(v) if the corporation was an S 
                        corporation, any person who was a shareholder 
                        during any part of the period covered by such 
                        return during which an election under section 
                        1362(a) was in effect, or''.
            (9) Paragraph (7) of section 856(c) is amended by striking 
        ``paragraph (4)(B)(ii)(III)'' and inserting ``paragraph 
        (4)(B)(iii)(III)''
            (10) Subparagraph (A) of section 856(l)(4) is amended by 
        striking ``paragraph (9)(D)(ii)'' and inserting ``subsection 
        (d)(9)(D)(ii)''.
            (11) Subparagraph (B) of section 871(f)(2) is amended by 
        striking ``19 U.S.C.'' and inserting ``(19 U.S.C.''.
            (12) Subparagraph (B) of section 995(b)(3) is amended by 
        striking ``the Military Security Act of 1954 (22 U.S.C. 1934)'' 
        and inserting ``section 38 of the International Security 
        Assistance and Arms Export Control Act of 1976 (22 U.S.C. 
        2778)''.
            (13) Section 1391(g)(3)(C) is amended by striking 
        ``paragraph (1)(B)'' and inserting ``paragraph (1)''.
            (14)(A) Paragraph (2) of section 2035(c) is amended by 
        striking ``paragraph (1)'' and inserting ``subsection (a)''.
            (B) Subsection (d) of section 2035 is amended by inserting 
        ``and paragraph (1) of subsection (c)'' after ``Subsection 
        (a)''.
            (15) Paragraph (5) of section 3121(a) is amended by 
        striking the semicolon at the end of subparagraph (G) and 
        inserting a comma.
            (16) Subparagraph (B) of section 4946(c)(3) is amended by 
        striking ``the lowest rate of compensation prescribed for GS-16 
        of the General Schedule under section 5332'' and inserting 
        ``the lowest rate of basic pay for the Senior Executive Service 
        under section 5382''.
            (17) Subsection (p) of section 6103 is amended--
                    (A) in paragraph (4), in the matter preceding 
                subparagraph (A)--
                            (i) by striking the second comma after 
                        ``(13)'', and
                            (ii) by striking ``(7)'' and all that 
                        follows through ``shall, as a condition'' and 
                        inserting ``(7), (8), (9), (12), (15), or (16) 
                        or any other person described in subsection 
                        (l)(16) shall, as a condition'', and
                    (B) in paragraph (4)(F)(ii), by striking the second 
                comma after ``(14)''.
            (18) Paragraph (5) of section 6166(k) is amended by 
        striking ``2035(d)(4)'' and inserting ``2035(c)(2)''.
            (19) Subsection (a) of section 6512 is amended by striking 
        ``; and'' at the end of paragraphs (1), (2), and (5) and 
        inserting ``, and''.
            (20) Paragraph (1) of section 6611(g) is amended by 
        striking the comma after ``(b)(3)''.
            (21) Subparagraphs (A) and (B) of section 6655(e)(5) are 
        amended by striking ``subsections (d)(5) and (l)(3)(B)'' and 
        inserting ``subsection (d)(5)''.
            (22) The subchapter heading for subchapter D of chapter 67 
        is amended by capitalizing the first letter of the second word.
            (23)(A) Section 6724(d)(1)(B) is amended by striking 
        clauses (xiv) through (xvii) and inserting the following:
                            ``(xiv) subparagraph (A) or (C) of 
                        subsection (c)(4) of section 4093 (relating to 
                        information reporting with respect to tax on 
                        diesel and aviation fuels),
                            ``(xv) section 4101(d) (relating to 
                        information reporting with respect to fuels 
                        taxes),
                            ``(xvi) subparagraph (C) of section 
                        338(h)(10) (relating to information required to 
                        be furnished to the Secretary in case of 
                        elective recognition of gain or loss), or
                            ``(xvii) section 264(f)(5)(A)(iv) (relating 
                        to reporting with respect to certain life 
                        insurance and annuity contracts), and''.
            (B) Section 6010(o)(4)(C) of the Internal Revenue Service 
        Restructuring and Reform Act of 1998 is amended by striking 
        ``inserting `or', and by adding at the end'' and inserting 
        ``inserting `, or', and by adding after subparagraph (Z)''.
            (24) Subsection (a) of section 7421 is amended by striking 
        ``6672(b)'' and inserting ``6672(c)''.
            (25) Paragraph (3) of section 7430(c) is amended--
                    (A) in the paragraph heading, by striking 
                ``Attorneys'' and inserting ``Attorneys''', and
                    (B) in subparagraph (B), by striking ``attorneys 
                fees'' each place it appears and inserting ``attorneys' 
                fees''.
            (26) Paragraph (2) of section 7603(b) is amended by 
        striking the semicolon at the end of subparagraphs (A), (B), 
        (C), (D), (E), (F), and (G) and inserting a comma.
            (27) Clause (ii) of section 7802(b)(2)(B) is amended by 
        striking ``; and'' at the end and inserting ``, and''.
            (28) Paragraph (3) of section 7811(a) is amended by 
        striking ``taxpayer assistance order'' and inserting ``Taxpayer 
        Assistance Order''.
            (29) Paragraph (1) of section 7811(d) is amended by 
        striking ``Ombudsman's'' and inserting ``National Taxpayer 
        Advocate's''.
            (30) Paragraph (3) of section 7872(f) is amended by 
        striking ``foregoing'' and inserting ``forgoing''.

        TITLE IV--TAX TREATMENT OF SECURITIES FUTURES CONTRACTS

SEC. 401. TAX TREATMENT OF SECURITIES FUTURES CONTRACTS.

    (a) In General.--Subpart IV of subchapter P of chapter 1 (relating 
to special rules for determining gains and losses) is amended by 
inserting after section 1234A the following new section:

``SEC. 1234B. GAINS OR LOSSES FROM SECURITIES FUTURES CONTRACTS.

    ``(a) Treatment of Gain or Loss.--
            ``(1) In general.--Gain or loss attributable to the sale or 
        exchange of a securities futures contract shall be considered 
        gain or loss from the sale or exchange of property which has 
        the same character as the property to which the contract 
        relates has in the hands of the taxpayer (or would have in the 
        hands of the taxpayer if acquired by the taxpayer).
            ``(2) Nonapplication of subsection.--This subsection shall 
        not apply to--
                    ``(A) a contract which constitutes property 
                described in paragraph (1) or (7) of section 1221(a), 
                and
                    ``(B) any income derived in connection with a 
                contract which, without regard to this subsection, is 
                treated as other than gain from the sale or exchange of 
                a capital asset.
    ``(b) Short-Term Gains and Losses.--Except as provided in the 
regulations under section 1092(b) or this section, if gain or loss on 
the sale or exchange of a securities futures contract to sell property 
is considered as gain or loss from the sale or exchange of a capital 
asset, such gain or loss shall be treated as short-term capital gain or 
loss.
    ``(c) Securities Futures Contract.--For purposes of this section, 
the term `securities futures contract' means any security future (as 
defined in section 3(a)(55)(A) of the Securities Exchange Act of 1934, 
as in effect on the date of the enactment of this section).
    ``(d) Contracts Not Treated as Commodity Futures Contracts.--For 
purposes of this title, a securities futures contract shall not be 
treated as a commodity futures contract.
    ``(e) Regulations.--The Secretary shall prescribe such regulations 
as may be appropriate to provide for the proper treatment of securities 
futures contracts under this title.''.
    (b) Terminations, Etc.--Section 1234A is amended--
            (1) by inserting ``(other than a securities futures 
        contract, as defined in section 1234B)'' after ``right or 
        obligation'' in paragraph (1),
            (2) by striking ``or'' at the end of paragraph (1),
            (3) by adding ``or'' at the end of paragraph (2), and
            (4) by inserting after paragraph (2) the following new 
        paragraph:
            ``(3) a securities futures contract (as so defined) which 
        is a capital asset in the hands of the taxpayer,''.
    (c) Nonrecognition Under Section 1032.--The second sentence of 
section 1032(a) is amended by inserting ``, or with respect to a 
securities futures contract (as defined in section 1234B),'' after ``an 
option''.
    (d) Treatment Under Wash Sales Rules.--Section 1091 is amended by 
adding at the end the following new subsection:
    ``(f) Cash Settlement.--This section shall not fail to apply to a 
contract or option to acquire or sell stock or securities solely by 
reason of the fact that the contract or option settles in (or could be 
settled in) cash or property other than such stock or securities.''.
    (e) Treatment Under Straddle Rules.--Clause (i) of section 
1092(d)(3)(B) is amended by striking ``or'' at the end of subclause 
(I), by redesignating subclause (II) as subclause (III), and by 
inserting after subclause (I) the following new subclause:
                                    ``(II) a securities futures 
                                contract (as defined in section 1234B) 
                                with respect to such stock or 
                                substantially identical stock or 
                                securities, or''.
    (f) Treatment Under Short Sales Rules.--Paragraph (2) of section 
1233(e) is amended by striking ``and'' at the end of subparagraph (B), 
by striking the period at the end of subparagraph (C) and inserting ``; 
and'', and by adding at the end the following:
                    ``(D) a securities futures contract (as defined in 
                section 1234B) to acquire substantially identical 
                property shall be treated as substantially identical 
                property.''.
    (g) Treatment Under Section 1256.--
            (1)(A) Subsection (b) of section 1256 is amended by 
        striking ``and'' at the end of paragraph (3), by striking the 
        period at the end of paragraph (4) and inserting ``, and'', and 
        by adding at the end the following:
            ``(5) any dealer securities futures contract.
The term `section 1256 contract' shall not include any securities 
futures contract or option on such a contract unless such contract or 
option is a dealer securities futures contract.''.
            (B) Subsection (g) of section 1256 is amended by adding at 
        the end the following new paragraph:
            ``(9) Dealer securities futures contract.--
                    ``(A) In general.--The term `dealer securities 
                futures contract' means, with respect to any dealer, 
                any securities futures contract, and any option on such 
                a contract, which--
                            ``(i) is entered into by such dealer (or, 
                        in the case of an option, is purchased or 
                        granted by such dealer) in the normal course of 
                        his activity of dealing in such contracts or 
                        options, as the case may be, and
                            ``(ii) is traded on a qualified board or 
                        exchange.
                    ``(B) Dealer.--For purposes of subparagraph (A), a 
                person shall be treated as a dealer in securities 
                futures contracts or options on such contracts if the 
                Secretary determines that such person performs, with 
                respect to such contracts or options, as the case may 
                be, functions similar to the functions performed by 
                persons described in paragraph (8)(A). Such 
                determination shall be made to the extent appropriate 
                to carry out the purposes of this section.
                    ``(C) Securities futures contract.--The term 
                `securities futures contract' has the meaning given to 
                such term by section 1234B.''.
            (2) Paragraph (4) of section 1256(f) is amended--
                    (A) by inserting ``, or dealer securities futures 
                contracts,'' after ``dealer equity options'' in the 
                text, and
                    (B) by inserting ``and dealer securities futures 
                contracts'' after ``dealer equity options'' in the 
                heading.
            (3) Paragraph (6) of section 1256(g) is amended to read as 
        follows:
            ``(6) Equity option.--The term `equity option' means any 
        option--
                    ``(A) to buy or sell stock, or
                    ``(B) the value of which is determined directly or 
                indirectly by reference to any stock or any narrow-
                based security index (as defined in section 3(a)(55) of 
                the Securities Exchange Act of 1934, as in effect on 
                the date of the enactment of this paragraph).
        The term `equity option' includes such an option on a group of 
        stocks only if such group meets the requirements for a narrow-
        based security index (as so defined).''.
            (4) The Secretary of the Treasury or his delegate shall 
        make the determinations under section 1256(g)(9)(B) of the 
        Internal Revenue Code of 1986, as added by this Act, not later 
        than July 1, 2001.
    (h) Conforming Amendments.--
            (1) Section 1223 is amended by redesignating paragraph (16) 
        as paragraph (17) and by inserting after paragraph (15) the 
        following new paragraph:
            ``(16) If the security to which a securities futures 
        contract (as defined in section 1234B) relates (other than a 
        contract to which section 1256 applies) is acquired in 
        satisfaction of such contract, in determining the period for 
        which the taxpayer has held such security, there shall be 
        included the period for which the taxpayer held such contract 
        if such contract was a capital asset in the hands of the 
        taxpayer.''.
            (2) The table of sections for subpart IV of subchapter P of 
        chapter 1 is amended by inserting after the item relating to 
        section 1234A the following new item:

                              ``Sec. 1234B. Securities futures 
                                        contracts.''.
    (i) Designation of Contract Markets.--Section 7701 is amended by 
redesignating subsection (m) as subsection (n) and by inserting after 
subsection (l) the following new subsection:
    ``(m) Designation of Contract Markets.--Any designation by the 
Commodity Futures Trading Commission of a contract market which could 
not have been made under the law in effect on the day before the date 
of the enactment of the Commodity Futures Modernization Act of 2000 
shall apply for purposes of this title except to the extent provided in 
regulations prescribed by the Secretary.''.
    (j) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
                                 <all>