[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1867 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1867

 To amend the Internal Revenue Code of 1986 to provide a tax reduction 
             for small businesses, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            November 5, 1999

 Mr. Robb (for himself and Mr. Baucus) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide a tax reduction 
             for small businesses, 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; ETC.

    (a) Short Title.--This Act may be cited as the ``Small Business Tax 
Reduction Act of 1999''.
    (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; etc.
  TITLE I--ENABLING SMALL BUSINESS TO PROVIDE CHILD CARE, HEALTH, AND 
                          RETIREMENT BENEFITS

Sec. 101. Full deduction of health insurance costs for self-employed 
                            individuals.
Sec. 102. Allowance of credit for employer expenses for child care 
                            assistance.
Sec. 103. Plan loans for subchapter S owners, partners, and sole 
                            proprietors.
Sec. 104. Contributions to IRAs through payroll deductions.
Sec. 105. Modification of top-heavy rules.
Sec. 106. Credit for small employer pension plan contributions and 
                            start-up costs.
Sec. 107. Elective deferrals not taken into account for purposes of 
                            deduction limits.
Sec. 108. Faster vesting of certain employer matching contributions.
Sec. 109. Reduced PBGC premium for new plans of small employers.
Sec. 110. Phase-in of additional PBGC premium for new plans.
Sec. 111. Elimination of user fee for requests to IRS regarding new 
                            pension plans.
Sec. 112. Deduction limits.
Sec. 113. Treatment of multiemployer plans under section 415.
Sec. 114. Pension reduction disclosure.
Sec. 115. Prevention of wearing away of employee's accrued benefit.
       TITLE II--PROMOTING TECHNOLOGICAL AND ECONOMIC DEVELOPMENT

Sec. 201. Increase in expensing limitation to $25,000.
Sec. 202. New markets tax credit.
Sec. 203. Wage credits for round 2 empowerment zones.
Sec. 204. Credit for information technology training program expenses.
Sec. 205. Restoration of standards for determining whether technical 
                            workers are not employees.
Sec. 206. Certain post-secondary educational benefits provided by an 
                            employer to children of employees 
                            excludable from gross income as a 
                            scholarship.
Sec. 207. Increase in State ceiling on low-income housing credit.
              TITLE III--EXPANDING ECONOMIC OPPORTUNITIES

Sec. 301. Work opportunity credit and welfare-to-work credit.
Sec. 302. Extension of credit for holders of qualified zone academy 
                            bonds.
         TITLE IV--PROMOTING FAMILY-OWNED FARMS AND BUSINESSES

Sec. 401. Increase in estate tax deduction for family-owned business 
                            interest.
Sec. 402. Income averaging for farmers not to increase alternative 
                            minimum tax liability.
Sec. 403. Net operating loss of farmers.
Sec. 404. Small businesses allowed increased deduction for meal 
                            expenses.
Sec. 405. Tax exclusion for cost-sharing payments under Partners for 
                            Wildlife Program.
                TITLE V--PROVIDING ADMINISTRATIVE RELIEF

Sec. 501. Disclosure of tax information to facilitate combined 
                            employment tax reporting.
Sec. 502. Enrolled agents.

  TITLE I--ENABLING SMALL BUSINESS TO PROVIDE CHILD CARE, HEALTH, AND 
                          RETIREMENT BENEFITS

SEC. 101. FULL DEDUCTION OF HEALTH INSURANCE COSTS FOR SELF-EMPLOYED 
              INDIVIDUALS.

    (a) In General.--Section 162(l)(1) (relating to allowance of 
deductions) is amended to read as follows:
            ``(1) Allowance of deduction.--In the case of an individual 
        who is an employee within the meaning of section 401(c)(1), 
        there shall be allowed as a deduction under this section an 
        amount equal to the amount paid during the taxable year for 
        insurance which constitutes medical care for the taxpayer and 
        the taxpayer's spouse and dependents.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 102. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE 
              ASSISTANCE.

    (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:

``SEC. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT.

    ``(a) In General.--For purposes of section 38, the employer-
provided child care credit determined under this section for the 
taxable year is an amount equal to 25 percent of the qualified child 
care expenditures of the taxpayer for such taxable year.
    ``(b) Dollar Limitation.--The credit allowable under subsection (a) 
for any taxable year shall not exceed $90,000.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Qualified child care expenditure.--The term 
        `qualified child care expenditure' means any amount paid or 
        incurred--
                    ``(A) to acquire, construct, rehabilitate, or 
                expand property--
                            ``(i) which is to be used as part of a 
                        qualified child care facility of the taxpayer,
                            ``(ii) with respect to which a deduction 
                        for depreciation (or amortization in lieu of 
                        depreciation) is allowable, and
                            ``(iii) which does not constitute part of 
                        the principal residence (within the meaning of 
                        section 121) of the taxpayer or any employee of 
                        the taxpayer,
                    ``(B) for the operating costs of a qualified child 
                care facility of the taxpayer, including costs related 
                to the training of employees, to scholarship programs, 
                and to the providing of increased compensation to 
                employees with higher levels of child care training, or
                    ``(C) under a contract with a qualified child care 
                facility to provide child care services to employees of 
                the taxpayer.
            ``(2) Qualified child care facility.--
                    ``(A) In general.--The term `qualified child care 
                facility' means a facility--
                            ``(i) the principal use of which is to 
                        provide child care assistance, and
                            ``(ii) which meets the requirements of all 
                        applicable laws and regulations of the State or 
                        local government in which it is located, 
                        including, but not limited to, the licensing of 
                        the facility as a child care facility.
                Clause (i) shall not apply to a facility which is the 
                principal residence (within the meaning of section 121) 
                of the operator of the facility.
                    ``(B) Special rules with respect to a taxpayer.--A 
                facility shall not be treated as a qualified child care 
                facility with respect to a taxpayer unless--
                            ``(i) enrollment in the facility is open to 
                        employees of the taxpayer during the taxable 
                        year,
                            ``(ii) the facility is not the principal 
                        trade or business of the taxpayer unless at 
                        least 30 percent of the enrollees of such 
                        facility are dependents of employees of the 
                        taxpayer, and
                            ``(iii) the use of such facility (or the 
                        eligibility to use such facility) does not 
                        discriminate in favor of employees of the 
                        taxpayer who are highly compensated employees 
                        (within the meaning of section 414(q)).
    ``(d) Recapture of Acquisition and Construction Credit.--
            ``(1) In general.--If, as of the close of any taxable year, 
        there is a recapture event with respect to any qualified child 
        care facility of the taxpayer, then the tax of the taxpayer 
        under this chapter for such taxable year shall be increased by 
        an amount equal to the product of--
                    ``(A) the applicable recapture percentage, and
                    ``(B) the aggregate decrease in the credits allowed 
                under section 38 for all prior taxable years which 
                would have resulted if the qualified child care 
                expenditures of the taxpayer described in subsection 
                (c)(1)(A) with respect to such facility had been zero.
            ``(2) Applicable recapture percentage.--
                    ``(A) In general.--For purposes of this subsection, 
                the applicable recapture percentage shall be determined 
                from the following table:

  
                                                         The applicable
  
                                                              recapture
            ``If the recapture event occurs in:
                                                         percentage is:
                Years 1-3............................          100     
                Year 4...............................           85     
                Year 5...............................           70     
                Year 6...............................           55     
                Year 7...............................           40     
                Year 8...............................           25     
                Years 9 and 10.......................           10     
                Years 11 and thereafter..............            0.    
                    ``(B) Years.--For purposes of subparagraph (A), 
                year 1 shall begin on the first day of the taxable year 
                in which the qualified child care facility is placed in 
                service by the taxpayer.
            ``(3) Recapture event defined.--For purposes of this 
        subsection, the term `recapture event' means--
                    ``(A) Cessation of operation.--The cessation of the 
                operation of the facility as a qualified child care 
                facility.
                    ``(B) Change in ownership.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the disposition of a taxpayer's 
                        interest in a qualified child care facility 
                        with respect to which the credit described in 
                        subsection (a) was allowable.
                            ``(ii) Agreement to assume recapture 
                        liability.--Clause (i) shall not apply if the 
                        person acquiring such interest in the facility 
                        agrees in writing to assume the recapture 
                        liability of the person disposing of such 
                        interest in effect immediately before such 
                        disposition. In the event of such an 
                        assumption, the person acquiring the interest 
                        in the facility shall be treated as the 
                        taxpayer for purposes of assessing any 
                        recapture liability (computed as if there had 
                        been no change in ownership).
            ``(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 subpart A, B, or D of this 
                part.
                    ``(C) No recapture by reason of casualty loss.--The 
                increase in tax under this subsection shall not apply 
                to a cessation of operation of the facility as a 
                qualified child care facility by reason of a casualty 
                loss to the extent such loss is restored by 
                reconstruction or replacement within a reasonable 
                period established by the Secretary.
    ``(e) Special Rules.--For purposes of this section--
            ``(1) Aggregation rules.--All persons which are treated as 
        a single employer under subsections (a) and (b) of section 52 
shall be treated as a single taxpayer.
            ``(2) Pass-thru in the case of estates and trusts.--Under 
        regulations prescribed by the Secretary, rules similar to the 
        rules of subsection (d) of section 52 shall apply.
            ``(3) Allocation in the case of partnerships.--In the case 
        of partnerships, the credit shall be allocated among partners 
        under regulations prescribed by the Secretary.
    ``(f) No Double Benefit.--
            ``(1) Reduction in basis.--For purposes of this subtitle--
                    ``(A) In general.--If a credit is determined under 
                this section with respect to any property by reason of 
                expenditures described in subsection (c)(1)(A), the 
                basis of such property shall be reduced by the amount 
                of the credit so determined.
                    ``(B) Certain dispositions.--If during any taxable 
                year there is a recapture amount determined with 
                respect to any property the basis of which was reduced 
                under subparagraph (A), the basis of such property 
                (immediately before the event resulting in such 
                recapture) shall be increased by an amount equal to 
                such recapture amount. For purposes of the preceding 
                sentence, the term `recapture amount' means any 
                increase in tax (or adjustment in carrybacks or 
                carryovers) determined under subsection (d).
            ``(2) Other deductions and credits.--No deduction or credit 
        shall be allowed under any other provision of this chapter with 
        respect to the amount of the credit determined under this 
        section.''
    (b) Conforming Amendments.--
            (1) Section 38(b) is amended--
                    (A) by striking ``plus'' at the end of paragraph 
                (11),
                    (B) by striking the period at the end of paragraph 
                (12), and inserting a comma and ``plus'', and
                    (C) by adding at the end the following:
            ``(13) the employer-provided child care credit determined 
        under section 45D.''
            (2) 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:

                              ``Sec. 45D. Employer-provided child care 
                                        credit.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 103. PLAN LOANS FOR SUBCHAPTER S OWNERS, PARTNERS, AND SOLE 
              PROPRIETORS.

    (a) Amendment to 1986 Code.--Subparagraph (B) of section 4975(f)(6) 
(relating to exemptions not to apply to certain transactions) is 
amended by adding at the end the following new clause:
                            ``(iii) Loan exception.--Solely for 
                        purposes of subparagraph (A)(i), in determining 
                        whether an individual is--
                                    ``(I) an owner-employee under 
                                section 401(c)(3), subparagraph (B) 
                                thereof shall be applied by 
                                substituting `25 percent' for `10 
                                percent', and
                                    ``(II) a shareholder-employee under 
                                subparagraph (C), such subparagraph 
                                shall be applied by substituting `25 
                                percent' for `5 percent'.''
    (b) Amendment to ERISA.--Section 408(d)(2) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1108(d)(2)) is 
amended by adding at the end the following new subparagraph:
    ``(C) Solely for purposes of paragraph (1)(A), in determining 
whether an individual is--
            ``(i) an owner-employee under section 401(c)(3) of the 
        Internal Revenue Code of 1986, subparagraph (B) thereof shall 
        be applied by substituting `25 percent' for `10 percent', and
            ``(ii) a shareholder-employee under paragraph (3), such 
        paragraph shall be applied by substituting `25 percent' for `5 
        percent'.''
    (c) Effective Date.--The amendments made by this section shall 
apply to loans made after December 31, 2000.

SEC. 104. CONTRIBUTIONS TO IRAS THROUGH PAYROLL DEDUCTIONS.

    (a) Definitions.--For purposes of this section--
            (1) Contribution certificate.--The term ``contribution 
        certificate'' means a certificate submitted by an employee to 
        the employee's employer which--
                    (A) identifies the employee by name, address, and 
                social security number,
                    (B) identifies the individual retirement plan to 
                which the employee wishes to make contributions through 
                payroll deductions, and
                    (C) identifies the amount of such contributions, 
                not to exceed the amount allowed under section 408 of 
                the Internal Revenue Code of 1986 to an individual 
                retirement plan for such year.
            (2) Employee.--The term ``employee'' does not include an 
        employee as defined in section 401(c)(1) of such Code.
            (3) Individual retirement plans.--The term ``individual 
        retirement plan'' has the meaning given the term by section 
        7701(a)(37) of the Internal Revenue Code of 1986.
            (4) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
    (b) Establishment of Payroll Deduction System.--An employer may 
establish a system under which employees, through employer payroll 
deductions, may make contributions to individual retirement plans. An 
employer shall not incur any liability under title I of the Employee 
Retirement Income Security Act of 1974 in providing for such a system.
    (c) Contributions to Individual Retirement Plans.--
            (1) In general.--The system established under subsection 
        (b) shall provide that contributions made to an individual 
retirement plan for any taxable year are--
                    (A) contributions through employer payroll 
                deductions, and
                    (B) if the employer so elects, additional 
                contributions by the employee which, when added to 
                contributions under subparagraph (A), do not exceed the 
                amount allowed under section 408 of the Internal 
                Revenue Code of 1986 for the taxable year.
            (2) Employer payroll deductions.--
                    (A) In general.--The system established under 
                subsection (b) shall provide that an employee may 
                establish and maintain an individual retirement plan 
                simply by--
                            (i) completing a contribution certificate, 
                        and
                            (ii) submitting such certificate to the 
                        employee's employer in the manner provided 
                        under subparagraph (D).
                    (B) Change of amounts.--An employee establishing 
                and maintaining an individual retirement plan under 
                subparagraph (A) may change the amount of an employer 
                payroll deduction in the same manner as under 
                subparagraph (A).
                    (C) Simplified forms.--
                            (i) Contribution certificate.--The 
                        Secretary shall develop a model contribution 
                        certificate for purposes of this paragraph--
                                    (I) which is written in a clear and 
                                easily understandable manner, and
                                    (II) the completion of which by an 
                                employee will constitute the 
                                establishment of an individual 
                                retirement plan and the request for 
                                employer payroll deductions or changes 
                                in such deductions.
                            (ii) Availability.--The Secretary shall 
                        make available to all employees and employers 
                        the forms developed under this subparagraph, 
                        and shall include with such forms easy to 
                        understand explanatory materials.
                    (D) Use of certificate.--Each employer electing to 
                adopt a system under subsection (b) shall, upon receipt 
                of a contribution certificate from an employee, deduct 
                the appropriate contribution as determined by such 
                certificate from the employee's wages in equal amounts 
                during the remaining payroll periods for the taxable 
                year and shall remit such amounts for investment in the 
                employee's individual retirement plan not later than 
                the close of the 30-day period following the last day 
                of the month in which such payroll period occurs.
                    (E) Failure to remit payroll deductions.--For 
                purposes of the Internal Revenue Code of 1986, any 
                amount which an employer fails to remit on behalf of an 
                employee pursuant to a contribution certificate of such 
                employee shall not be allowed as a deduction to the 
                employer under such Code.
    (d) Additional Information.--
            (1) In general.--The system established under subsection 
        (b) shall provide for the furnishing of information to 
        employees of the opportunity of establishing individual 
        retirement plans and of transferring amounts to such plans.
            (2) Investment information.--The employer shall also make 
        available to employees information on how to make informed 
        investment decisions and how to achieve retirement objectives.
            (3) Information not investment advice.--Information 
        provided under this subsection shall not be treated as 
        investment advice for purposes of any Federal or State law.

SEC. 105. MODIFICATION OF TOP-HEAVY RULES.

    (a) Simplification of Definition of Key Employee.--
            (1) In general.--Section 416(i)(1)(A) (defining key 
        employee) is amended--
                    (A) by striking ``or any of the 4 preceding plan 
                years'' in the matter preceding clause (i),
                    (B) by striking clause (i) and inserting the 
                following:
                            ``(i) an officer of the employer having an 
                        annual compensation greater than $80,000,'',
                    (C) by striking clause (ii) and redesignating 
                clauses (iii) and (iv) as clauses (ii) and (iii), 
                respectively, and
                    (D) by striking the second sentence in the matter 
                following clause (iii), as redesignated by subparagraph 
                (C).
            (2) Conforming amendment.--Section 416(i)(1)(B)(iii) is 
        amended by striking ``and subparagraph (A)(ii)''.
    (b) Distributions During Last Year Before Determination Date Taken 
Into Account.--Section 416(g) is amended--
            (1) in paragraph (3)--
                    (A) by striking ``last 5 years'' in the heading and 
                inserting ``last year before determination date'', and
                    (B) in the matter following subparagraph (B), by 
                striking ``5-year period'' and inserting ``1-year 
                period'', and
            (2) in paragraph (4)(E)--
                    (A) by striking ``last 5 years'' in the heading and 
                inserting ``last year before determination date'', and
                    (B) by striking ``5-year period'' and inserting 
                ``1-year period''.
    (c) Requirements for Qualifications.--Clause (ii) of section 
401(a)(10)(B) (relating to requirements for qualifications for top-
heavy plans) is amended by adding at the end the following new flush 
sentence:
                        ``The preceding sentence shall not apply to a 
                        plan if the plan is not top-heavy and if it is 
not reasonable to expect that the plan will become a top-heavy plan.''.
    (d) Frozen Plan Exempt From Minimum Benefit Requirement.--
            (1) In general.--Subparagraph (C) of section 416(c)(1) 
        (relating to defined benefit plans) is amended--
                    (A) in clause (i), by striking ``clause (ii)'' and 
                inserting ``clause (ii) or (iii)'', and
                    (B) by adding at the end the following:
                            ``(iii) Exception for frozen plan.--For 
                        purposes of determining an employee's years of 
                        service with the employer, any service with the 
                        employer shall be disregarded to the extent 
                        that such service occurs during a plan year 
                        when the plan benefits (within the meaning of 
                        section 410(b)) no employee or former 
                        employee.''.
            (2) Conforming amendment.--Subparagraph (A) of section 
        415(b)(5) is amended by adding at the end the following: ``An 
        employee shall not be credited with a year of participation in 
        a defined benefit plan for any year in which the plan does not 
        benefit (within the meaning of section 410(b)) such 
        employee.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1999.

SEC. 106. CREDIT FOR SMALL EMPLOYER PENSION PLAN CONTRIBUTIONS AND 
              START-UP COSTS.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business related credits), as amended by section 102, is 
amended by adding at the end the following new section:

``SEC. 45E. SMALL EMPLOYER PENSION PLAN CREDIT.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible employer, the small employer pension plan credit determined 
under this section for any taxable year is an amount equal to the sum 
of--
            ``(1) 50 percent of the qualified employer contributions of 
        the taxpayer for the taxable year, and
            ``(2) 50 percent of the qualified start-up costs paid or 
        incurred by the taxpayer during the taxable year.
    ``(b) Limitations.--
            ``(1) Limits on contributions.--For purposes of subsection 
        (a)(1)--
                    ``(A) qualified employer contributions may only be 
                taken into account for each of the first 5 taxable 
                years ending after the date the employer establishes 
                the qualified employer plan to which the contribution 
                is made, and
                    ``(B) the amount of the qualified employer 
                contributions taken into account with respect to any 
                qualified employee for any such taxable year shall not 
                exceed 3 percent of the compensation (as defined in 
                section 414(s)) of the qualified employee for such 
                taxable year.
            ``(2) Limits on start-up costs.--The amount of the credit 
        determined under subsection (a)(2) for any taxable year shall 
        not exceed--
                    ``(A) $2,000 for the first taxable year ending 
                after the date the employer established the qualified 
                employer plan to which such costs relate,
                    ``(B) $1,000 for each of the second and third such 
                taxable years, and
                    ``(C) zero for each taxable year thereafter.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible employer.--
                    ``(A) In general.--The term `eligible employer' 
                means, with respect to any year, an employer which has 
                no more than--
                            ``(i) for purposes of subsection (a)(1), 25 
                        employees, and
                            ``(ii) for purposes of subsection (a)(2), 
                        100 employees,
                who received at least $5,000 of compensation from the 
                employer for the preceding year.
                    ``(B) 2-year grace period.--An eligible employer 
                who establishes and maintains a qualified employer plan 
                for 1 or more years and who fails to be an eligible 
                employer for any subsequent year shall be treated as an 
                eligible employer for the 2 years following the last 
                year the employer was an eligible employer.
                    ``(C) Requirement for new qualified employer 
                plans.--Such term shall not include an employer if, 
                during the 3-taxable year period immediately preceding 
                the 1st taxable year for which the credit under this 
                section is otherwise allowable for a qualified employer 
                plan of the employer, the employer and each member of 
                any controlled group including the employer (or any 
                predecessor of either) established or maintained a 
                qualified employer plan with respect to which 
                contributions were made, or benefits were accrued, for 
                substantially the same employees as are in the 
                qualified employer plan.
            ``(2) Qualified employer contributions.--
                    ``(A) In general.--The term `qualified employer 
                contributions' means, with respect to any taxable year, 
                any employer contributions made on behalf of a 
                qualified employee to a qualified employer plan for a 
                plan year ending with or within the taxable year.
                    ``(B) Employer contributions.--The term `employer 
                contributions' shall not include any elective deferral 
                (within the meaning of section 402(g)(3)).
            ``(3) Qualified employee.--The term `qualified employee' 
        means an individual who--
                    ``(A) is eligible to participate in the qualified 
                employer plan to which the employer contributions are 
                made, and
                    ``(B) is not a highly compensated employee (within 
                the meaning of section 414(q)) for the year for which 
                the contribution is made.
            ``(4) Qualified start-up costs.--The term `qualified start-
        up costs' means any ordinary and necessary expenses of an 
        eligible employer which are paid or incurred in connection 
        with--
                    ``(A) the establishment or maintenance of a 
                qualified employer plan in which qualified employees 
                are eligible to participate, and
                    ``(B) providing educational information to 
                employees regarding participation in such plan and the 
                benefits of establishing an investment plan.
            ``(5) Qualified employer plan.--The term `qualified 
        employer plan' has the meaning given such term in section 
        4972(d).
    ``(d) Special Rules.--
            ``(1) Aggregation rules.--All persons treated as a single 
        employer under subsection (a) or (b) of section 52, or 
        subsection (n) or (o) of section 414, shall be treated as one 
        person. All qualified employer plans of an employer shall be 
        treated as a single qualified employer plan.
            ``(2) Disallowance of deduction.--No deduction shall be 
        allowable under this chapter for any qualified start-up costs 
        or qualified contributions for which a credit is determined 
        under subsection (a).
            ``(3) Election not to claim credit.--This section shall not 
        apply to a taxpayer for any taxable year if such taxpayer 
        elects to have this section not apply for such taxable year.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) (defining current year business credit), as amended by section 
102, is amended by striking ``plus'' at the end of paragraph (12), by 
striking the period at the end of paragraph (13) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
            ``(14) in the case of an eligible employer (as defined in 
        section 45E(c)), the small employer pension plan credit 
        determined under section 45E(a).''.
    (c) Portion of Credit Refundable.--Section 38(c) (relating to 
limitation based on amount of tax) is amended by adding at the end the 
following new paragraph:
            ``(4) Portion of small employer pension plan credit 
        refundable.--
                    ``(A) In general.--In the case of the small 
                employer pension plan credit under subsection (b)(14), 
                the aggregate credits allowed under subpart C shall be 
                increased by the lesser of--
                            ``(i) the credit which would be allowed 
                        without regard to this paragraph and the 
                        limitation under paragraph (1), or
                            ``(ii) the amount by which the aggregate 
                        amount of credits allowed by this section 
                        (without regard to this paragraph) would 
                        increase if the limitation under paragraph (1) 
                        were increased by the taxpayer's applicable 
                        payroll taxes for the taxable year.
                    ``(B) Treatment of credit.--The amount of the 
                credit allowed under this paragraph shall not be 
                treated as a credit allowed under this subpart and 
                shall reduce the amount of the credit allowed under 
                this section for the taxable year.
                    ``(C) Applicable payroll taxes.--For purposes of 
                this paragraph--
                            ``(i) In general.--The term `applicable 
                        payroll taxes' means, with respect to any 
                        taxpayer for any taxable year--
                                    ``(I) the amount of the taxes 
                                imposed by sections 3111 and 3221(a) on 
                                compensation paid by the taxpayer 
                                during the taxable year,
                                    ``(II) 50 percent of the taxes 
                                imposed by section 1401 on the self-
                                employment income of the taxpayer 
                                during the taxable year, and
                                    ``(III) 50 percent of the taxes 
                                imposed by section 3211(a)(1) on 
                                amounts received by the taxpayer during 
                                the calendar year in which the taxable 
                                year begins.
                            ``(ii) Agreements regarding foreign 
                        affiliates.--Section 24(d)(5)(C) shall apply 
                        for purposes of clause (i).''.
    (d) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by section 102, is 
amended by adding at the end the following new item:

                              ``Sec. 45E. Small employer pension plan 
                                        credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred or contributions made in connection 
with qualified employer plans established after December 31, 2000.

SEC. 107. ELECTIVE DEFERRALS NOT TAKEN INTO ACCOUNT FOR PURPOSES OF 
              DEDUCTION LIMITS.

    (a) In General.--Section 404 (relating to deduction for 
contributions of an employer to an employees' trust or annuity plan and 
compensation under a deferred payment plan) is amended by adding at the 
end the following new subsection:
    ``(n) Elective Deferrals Not Taken Into Account for Purposes of 
Deduction Limits.--Elective deferrals (as defined in section 402(g)(3)) 
shall not be subject to any limitation contained in paragraph (3), (7), 
or (9) of subsection (a), and such elective deferrals shall not be 
taken into account in applying any such limitation to any other 
contributions.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to years beginning after December 31, 2000.

SEC. 108. FASTER VESTING OF CERTAIN EMPLOYER MATCHING CONTRIBUTIONS.

    (a) Amendments to 1986 Code.--Section 411(a) (relating to minimum 
vesting standards) is amended--
            (1) in paragraph (2), by striking ``A plan'' and inserting 
        ``Except as provided in paragraph (12), a plan'', and
            (2) by adding at the end the following:
            ``(12) Faster vesting for matching contributions.--In the 
        case of matching contributions (as defined in section 
        401(m)(4)(A)), paragraph (2) shall be applied--
                    ``(A) by substituting `3 years' for `5 years' in 
                subparagraph (A), and
                    ``(B) by substituting the following table for the 
                table contained in subparagraph (B):

                                                     The nonforfeitable
``Years of service:                                      percentage is:
    2.............................................                  20 
    3.............................................                  40 
    4.............................................                  60 
    5.............................................                  80 
    6.............................................              100.''.
    (b) Amendments to ERISA.--Section 203(a) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1053(a)) is amended--
            (1) in paragraph (2), by striking ``A plan'' and inserting 
        ``Except as provided in paragraph (4), a plan'', and
            (2) by adding at the end the following:
            ``(4) Faster vesting for matching contributions.--In the 
        case of matching contributions (as defined in section 
        401(m)(4)(A) of the Internal Revenue Code of 1986), paragraph 
        (2) shall be applied--
                    ``(A) by substituting `3 years' for `5 years' in 
                subparagraph (A), and
                    ``(B) by substituting the following table for the 
                table contained in subparagraph (B):

                                                     The nonforfeitable
``Years of service:                                      percentage is:
    2.............................................                  20 
    3.............................................                  40 
    4.............................................                  60 
    5.............................................                  80 
    6.............................................              100.''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to contributions 
        for plan years beginning after December 31, 1999.
            (2) Collective bargaining agreements.--In the case of a 
        plan maintained pursuant to 1 or more collective bargaining 
        agreements between employee representatives and 1 or more 
        employers ratified by the date of enactment of this Act, the 
        amendments made by this section shall not apply to 
        contributions on behalf of employees covered by any such 
        agreement for plan years beginning before the earlier of--
                    (A) the later of--
                            (i) the date on which the last of such 
                        collective bargaining agreements terminates 
                        (determined without regard to any extension 
                        thereof on or after such date of enactment), or
                            (ii) January 1, 2000, or
                    (B) January 1, 2004.
            (3) Service required.--With respect to any plan, the 
        amendments made by this section shall not apply to any employee 
        before the date that such employee has 1 hour of service under 
        such plan in any plan year to which the amendments made by this 
        section apply.

SEC. 109. REDUCED PBGC PREMIUM FOR NEW PLANS OF SMALL EMPLOYERS.

    (a) In General.--Subparagraph (A) of section 4006(a)(3) of the 
Employee Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)) 
is amended--
            (1) in clause (i), by inserting ``other than a new single-
        employer plan (as defined in subparagraph (F)),'' after 
        ``single-employer plan,'',
            (2) in clause (iii), by striking the period at the end and 
        inserting ``, and'', and
            (3) by adding at the end the following new clause:
            ``(iv) in the case of a new single-employer plan (as 
        defined in subparagraph (F)) maintained by a small employer (as 
        so defined) for the plan year, $5 for each individual who is a 
        participant in such plan during the plan year.''.
    (b) Definition of New Single-Employer Plan.--Section 4006(a)(3) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)) is amended by adding at the end the following new 
subparagraph:
                    ``(F)(i) For purposes of this paragraph, a single-
                employer plan maintained by an employer shall be 
                treated as a new single-employer plan for each of its 
                first 5 plan years if, during the 36-month period 
                ending on the date of the adoption of such plan, the 
                employer or any member of such employer's controlled 
                group (or any predecessor of either) had not 
                established or maintained a plan to which this title 
                applies with respect to which contributions were made, 
                or benefits were accrued, for substantially the same 
                employees as are in the new single-employer plan.
                    ``(ii)(I) For purposes of this paragraph, the term 
                `small employer' means an employer which on the first 
                day of any plan year has, in aggregation with all 
                members of the controlled group of such employer, 100 
                or fewer employees.
                    ``(II) In the case of a plan maintained by 2 or 
                more contributing sponsors that are not part of the 
                same controlled group, the employees of all 
                contributing sponsors and controlled groups of such 
                sponsor shall be aggregated for purposes of determining 
                whether the sponsor is a small employer.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1999.

SEC. 110. PHASE-IN OF ADDITIONAL PBGC PREMIUM FOR NEW PLANS.

    (a) Amendments to ERISA.--Subparagraph (E) of section 4006(a)(3) of 
the Employee Retirement Income Security Act of 1974 (29 U.S.C. 
1306(a)(3)(E)) is amended by adding at the end the following new 
clause:
    ``(v) In the case of a new defined benefit plan, the amount 
determined under clause (ii) for any plan year shall be an amount equal 
to the product derived by multiplying the amount determined under 
clause (ii) by the applicable percentage. For purposes of this clause, 
the term `applicable percentage' means--
            ``(I) 0 percent, for the first plan year.
            ``(II) 20 percent, for the second plan year.
            ``(III) 40 percent, for the third plan year.
            ``(IV) 60 percent, for the fourth plan year.
            ``(V) 80 percent, for the fifth plan year.
            ``(VI) 100 percent, for the sixth plan year, and for each 
        succeeding plan year.
For purposes of this clause, a defined benefit plan (as defined in 
section 3(35)) maintained by an employer shall be treated as a new 
defined benefit plan if, during the 36-month period ending on the date 
of the adoption of the plan, the employer and each member of any 
controlled group including the employer (or any predecessor of either) 
did not establish or maintain a plan to which this title applies with 
respect to which contributions were made, or benefits were accrued, for 
substantially the same employees as are in the new plan.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to plan years beginning after December 31, 1999.

SEC. 111. ELIMINATION OF USER FEE FOR REQUESTS TO IRS REGARDING NEW 
              PENSION PLANS.

    (a) Elimination of Certain User Fees.--The Secretary of the 
Treasury or the Secretary's delegate shall not require payment of user 
fees under the program established under section 10511 of the Revenue 
Act of 1987 for requests to the Internal Revenue Service for ruling 
letters, opinion letters, and determination letters or similar requests 
with respect to the qualified status of a new pension benefit plan or 
any trust which is part of the plan.
    (b) New Pension Benefit Plan.--For purposes of this section--
            (1) In general.--The term ``new pension benefit plan'' 
        means a pension, profit-sharing, stock bonus, annuity, or 
        employee stock ownership plan which is maintained by one or 
        more eligible employers if such employer (or any predecessor 
        employer) has not made a prior request described in subsection 
        (a) for such plan (or any predecessor plan).
            (2) Eligible employer.--The term ``eligible employer'' 
        means an employer (or any predecessor employer) which has not 
        established or maintained a qualified employer plan with 
        respect to which contributions were made, or benefits were 
        accrued for service, in the 3 most recent taxable years ending 
        prior to the first taxable year in which the request is made.
    (c) Effective Date.--The provisions of this section shall apply 
with respect to requests made after December 31, 1999.

SEC. 112. DEDUCTION LIMITS.

    (a) In General.--Section 404(a) (relating to general rule) is 
amended by adding at the end the following:
            ``(12) Definition of compensation.--For purposes of 
        paragraphs (3), (7), (8), and (9), the term `compensation' 
        shall include amounts treated as participant's compensation 
        under subparagraph (C) or (D) of section 415(c)(3).''.
    (b) Conforming Amendment.--Subparagraph (B) of section 404(a)(3) is 
amended by striking the last sentence thereof.
    (c) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 2000.

SEC. 113. TREATMENT OF MULTIEMPLOYER PLANS UNDER SECTION 415.

    (a) Compensation Limit.--Paragraph (11) of section 415(b) (relating 
to limitation for defined benefit plans) is amended to read as follows:
            ``(11) Special limitation rule for governmental and 
        multiemployer plans.--In the case of a governmental plan (as 
        defined in section 414(d)) or a multiemployer plan (as defined 
        in section 414(f)), subparagraph (B) of paragraph (1) shall not 
        apply.''.
    (b) Combining and Aggregation of Plans.--
            (1) Combining of plans.--Subsection (f) of section 415 
        (relating to combining of plans) is amended by adding at the 
        end the following:
            ``(3) Exception for multiemployer plans.--Notwithstanding 
        paragraph (1) and subsection (g), a multiemployer plan (as 
        defined in section 414(f)) shall not be combined or aggregated 
        with any other plan maintained by an employer for purposes of 
        applying the limitations established in this section, except 
        that such plan shall be combined or aggregated with another 
        plan solely for purposes of determining whether such other plan 
        meets the requirements of subsection (b)(1)(A).''.
            (2) Conforming amendment for aggregation of plans.--
        Subsection (g) of section 415 (relating to aggregation of 
        plans) is amended by striking ``The Secretary'' and inserting 
        ``Except as provided in subsection (f)(3), the Secretary''.
    (c) Early Retirement Limits for Certain Plans.--Section 
415(b)(2)(F) is amended to read as follows:
                    ``(F) Multiemployer plans and plans maintained by 
                governments and tax exempt organizations.--In the case 
                of a governmental plan (within the meaning of section 
                414(d)), a plan maintained by an organization (other 
                than a governmental unit) exempt from tax under this 
                subtitle, a multiemployer plan (as defined in section 
                414(f)), or a qualified merchant marine plan--
                            ``(i) subparagraph (C) shall be applied--
                                    ``(I) by substituting `age 62' for 
                                `social security retirement age' each 
                                place it appears, and
                                    ``(II) as if the last sentence 
                                thereof read as follows: `The reduction 
                                under this subparagraph shall not 
                                reduce the limitation of paragraph 
                                (1)(A) below (i) 80 percent of such 
                                limitation as in effect for the year, 
                                or (ii) if the benefit begins before 
                                age 55, the equivalent for such 80 
                                percent amount for age 55.'', and
                            ``(ii) subparagraph (D) shall be applied by 
                        substituting `age 65' for `social security 
                        retirement age' each place it appears.
                For purposes of this subparagraph, the term `qualified 
                merchant marine plan' means a plan in existence on 
                January 1, 1986, the participants in which are merchant 
                marine officers holding licenses issued by the 
                Secretary of Transportation under title 46, United 
States Code.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to years beginning after December 31, 1999.

SEC. 114. PENSION REDUCTION DISCLOSURE.

    (a) Notice Required for Certain Plan Amendments Reducing Future 
Benefit Accruals.--
            (1) General notice requirements.--Section 204(h) of the 
        Employee Retirement Income Security Act of 1974 (29 U.S.C. 
        1054(h)) is amended to read as follows:
    ``(h) Notice Requirements for Pension Plan Amendments Reducing 
Accruals.--
            ``(1) In general.--If an applicable pension plan is amended 
        so as to provide for a significant reduction in the rate of 
        future benefit accrual of 1 or more applicable individuals, the 
        plan administrator shall--
                    ``(A) not later than the 45th day before the 
                effective date of the amendment, provide the written 
                notice described in paragraph (2) to each applicable 
                individual (and to each employee organization 
                representing applicable individuals), and
                    ``(B) in the case of a large applicable pension 
                plan--
                            ``(i) include in the notice under paragraph 
                        (2) the additional information described in 
                        paragraph (3),
                            ``(ii) make available the information 
                        described in paragraph (4) in accordance with 
                        such paragraph, and
                            ``(iii) provide individual benefit 
                        statements in accordance with section 105(e).
            ``(2) Basic written notice.--The notice under paragraph (1) 
        shall include a summary of the important terms of the 
        amendment, including--
                    ``(A) the effective date of the amendment,
                    ``(B) a statement that the amendment is expected to 
                significantly reduce the rate of future benefit 
                accrual,
                    ``(C) a description of the classes of applicable 
                individuals to whom the amendment applies, and
                    ``(D) a description of how the amendment 
                significantly reduces the rate of future benefit 
                accrual.
            ``(3) Additional information to be provided by large 
        applicable pension plans.--
                    ``(A) In general.--The information described in 
                this paragraph is--
                            ``(i) a description of the plan's benefit 
                        formulas (including formulas for determining 
                        early retirement benefits) both before and 
                        after the amendment and an explanation of the 
                        effect of the different formulas on applicable 
                        individuals,
                            ``(ii) an explanation of the circumstances 
                        (if any) under which (for appropriate 
                        categories of applicable individuals) the 
                        amendment is reasonably expected to result in a 
                        temporary period after the effective date of 
                        the amendment during which there are no or 
                        minimal accruals,
                            ``(iii) illustrative examples of normal or 
                        early retirement benefits meeting the 
                        requirements of subparagraph (B), and
                            ``(iv) notice of each applicable 
                        individual's right to request, and of the 
                        procedures for requesting, the information 
                        required to be provided under paragraph (4) and 
                        under section 105(e).
                    ``(B) Illustrative examples.--Illustrative examples 
                meet the requirements of this subparagraph if such 
                examples illustrate the adverse effects of the plan 
                amendment. Such examples shall be prepared by the plan 
                administrator in accordance with regulations prescribed 
                by the Secretary of the Treasury, and such regulations 
                shall require that the examples--
                            ``(i) reflect fairly the different 
                        categories of applicable individuals who are 
                        similarly affected by the plan amendment after 
                        consideration of all relevant factors,
                            ``(ii) show a comparison of benefits for 
                        each such category of applicable individuals 
                        under the plan (as in effect before and after 
                        the effective date) at appropriate future 
                        dates, and
                            ``(iii) illustrate any temporary period 
                        described in subparagraph (A)(ii).
                Such comparison shall be based on benefits in the form 
                of a life annuity and on actuarial assumptions each of 
                which is reasonable (and is so certified by an enrolled 
                actuary) when applied to all participants in the plan.
            ``(4) Supporting information relating to calculation of 
        benefits.--
                    ``(A) In general.--Each individual who receives or 
                who is entitled to receive the information described in 
                paragraph (3) may (after so receiving or becoming so 
                entitled) request the plan administrator to provide the 
                information described in subparagraph (B).
                    ``(B) Information.--The plan administrator shall, 
                within 15 days after the date on which a request under 
                subparagraph (A) is made, provide to the individual 
                information (including benefit formulas and actuarial 
                factors) which is sufficient--
                            ``(i) to confirm the benefit comparisons in 
                        the illustrative examples described in 
                        paragraph (3)(B), and
                            ``(ii) to enable the individual to use the 
                        individual's own personal information to make 
                        calculations of the individual's own benefits 
                        which are similar to the calculations made in 
                        such examples.
                Nothing in this subsection shall be construed to 
                require the plan administrator to provide to 
an individual such individual's personal information for purposes of 
clause (ii).
                    ``(C) Time limitation on requests.--This paragraph 
                shall apply only to requests made during the 12-month 
                period that begins on the later of the effective date 
                of the amendment to which it relates or the date the 
                notice described in paragraph (2) is provided.
            ``(5) Sanctions.--
                    ``(A) In general.--In the case of any egregious 
                failure to meet any requirement of this subsection with 
                respect to any plan amendment, the provisions of the 
                applicable pension plan shall be applied as if such 
                plan amendment entitled all applicable individuals to 
                the greater of--
                            ``(i) the benefits to which they would have 
                        been entitled without regard to such amendment, 
                        or
                            ``(ii) the benefits under the plan with 
                        regard to such amendment.
                    ``(B) Egregious failure.--For purposes of 
                subparagraph (A), there is an egregious failure to meet 
                the requirements of this subsection if such failure 
                is--
                            ``(i) an intentional failure (including any 
                        failure to promptly provide the required notice 
                        or information after the plan administrator 
                        discovers an unintentional failure to meet the 
                        requirements of this subsection),
                            ``(ii) a failure to provide most of the 
                        individuals with most of the information they 
                        are entitled to receive under this subsection, 
                        or
                            ``(iii) a failure which is determined to be 
                        egregious under regulations prescribed by the 
                        Secretary of the Treasury.
                    ``(C) Excise tax.--For excise tax on failure to 
                meet requirements, see section 4980F of the Internal 
                Revenue Code of 1986.
            ``(6) Special rules.--
                    ``(A) Plain language.--The notice required under 
                paragraph (1) shall be written in a manner calculated 
                to be understood by the average plan participant who is 
                an applicable individual.
                    ``(B) Notice to designees.--The notice and 
                information required to be provided under this 
                subsection may be provided to a person designated, in 
                writing, by the person to which it would otherwise be 
                provided.
            ``(7) Alternative methods of compliance with enhanced 
        disclosure requirements in certain cases.--The Secretary of the 
        Treasury shall prescribe such regulations as may be necessary 
        to carry out this subsection. The Secretary of the Treasury 
        may--
                    ``(A) prescribe alternative or simplified methods 
                of complying with paragraphs (3) and (4) in situations 
                where--
                            ``(i) there is no fundamental change in the 
                        manner in which the accrued benefit of an 
                        applicable individual is determined under the 
                        plan, and
                            ``(ii) such other methods are adequate to 
                        reasonably inform plan participants who are 
                        applicable individuals of the impact of the 
                        reductions,
                    ``(B) reduce the advance notice period in paragraph 
                (1)(A) from 45 days to 15 days before the effective 
                date of the amendment for cases in which compliance 
                with the 45-day advance notice requirement would be 
                unduly burdensome because the amendment is contingent 
                on a merger, acquisition, disposition, or other similar 
                transaction involving plan participants who are 
                applicable individuals or because 45 days advance 
                notice is otherwise impracticable,
                    ``(C) permit the comparison of benefits under 
                paragraph (3)(B)(i) to be based on a form of payment 
                other than a life annuity, or
                    ``(D) specify actuarial assumptions that are deemed 
                to be reasonable for purposes of the benefit 
                comparisons under paragraph (3)(B)(i).
            ``(8) Applicable individual.--For purposes of this 
        subsection, the term `applicable individual' means, with 
        respect to any plan amendment--
                    ``(A) each participant in the plan, and
                    ``(B) each beneficiary who is an alternate payee 
                (within the meaning of section 206(d)(3)(K)) under a 
                qualified domestic relations order (within the meaning 
                of section 206(d)(3)(B)(i)),
        whose future benefit accruals under the plan may reasonably be 
        expected to be reduced by such plan amendment.
            ``(9) Terms relating to plans.--For purposes of this 
        subsection--
                    ``(A) Applicable pension plan.--The term 
                `applicable pension plan' means--
                            ``(i) a defined benefit plan, or
                            ``(ii) an individual account plan which is 
                        subject to the funding standards of section 
                        302.
                    ``(B) Large applicable pension plan.--The term 
                `large applicable pension plan' means an applicable 
                pension plan which had 100 or more active participants 
                as of the last day of the plan year preceding the plan 
                year in which the plan amendment becomes effective.''
            (2) Individual statements.--Section 105 of the Employee 
        Retirement Income Security Act of 1974 (29 U.S.C. 1025) is 
        amended by adding at the end the following new subsection:
    ``(e)(1) The plan administrator of a large applicable pension plan 
shall furnish an individual statement described in paragraph (2) to 
each individual--
            ``(A) who receives, or is entitled to receive, under 
        section 204(h) the information described in paragraph (3) 
        thereof from such administrator, and
            ``(B) who requests in writing such a statement from such 
        administrator.
    ``(2) The statement described in this paragraph is a statement 
which provides information which is substantially the same as the 
information in the illustrative examples described in section 
204(h)(3)(B) but which is based on data specific to the requesting 
individual and, if the individual so requests, information as of 1 
other future date not included in such examples.
    ``(3) Paragraph (1) shall apply only to requests made during the 
12-month period that begins on the later of the effective date of the 
amendment to which it relates or the date the notice described in 
section 204(h)(2) is provided. In no case shall an individual be 
entitled under this subsection to receive more than one such statement 
with respect to an amendment.
    ``(4) Notwithstanding section 502(c)(1), the statement required by 
paragraph (1) shall be treated as timely furnished if furnished on or 
before--
            ``(A) the date which is 90 days after the effective date of 
        the plan amendment to which it relates, or
            ``(B) such later date as may be permitted by the Secretary 
        of Labor.
    ``(5) Any term used in this subsection which is used in section 
204(h) shall have the meaning given such term by such section.
    ``(6) A statement under this subsection shall not be taken into 
account for purposes of subsection (b).''
    (b) Excise Tax on Failure To Provide Notice by Defined Benefit 
Plans Significantly Reducing Future Benefit Accruals.--
            (1) In general.--Chapter 43 (relating to qualified pension, 
        etc., plans) is amended by adding at the end the following new 
        section:

``SEC. 4980F. FAILURE OF DEFINED BENEFIT PLANS REDUCING BENEFIT 
              ACCRUALS TO SATISFY NOTICE REQUIREMENTS.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on the 
failure of a plan administrator of an applicable pension plan to meet 
the requirements of subsection (e) with respect to any applicable 
individual.
    ``(b) Amount of Tax.--
            ``(1) In general.--The amount of the tax imposed by 
        subsection (a) on any failure with respect to any applicable 
        individual shall be $100 for each day in the noncompliance 
        period with respect to such failure.
            ``(2) Noncompliance period.--For purposes of this section, 
        the term `noncompliance period' means, with respect to any 
        failure, the period beginning on the date the failure first 
        occurs and ending on the date the failure is corrected.
    ``(c) Limitations on Amount of Tax.--
            ``(1) Overall limitation for unintentional failures.--
                    ``(A) In general.--In the case of failures that are 
                due to reasonable cause and not to willful neglect, the 
                tax imposed by subsection (a) for failures during the 
                taxable year of the employer (or, in the case of a 
                multiemployer plan, the taxable year of the trust 
                forming part of the plan) shall not exceed $500,000 
                ($1,000,000 in the case of a large applicable pension 
                plan).
                    ``(B) Taxable years in the case of certain 
                controlled groups.--For purposes of this paragraph, if 
                all persons who are treated as a single employer for 
                purposes of this section do not have the same taxable 
                year, the taxable years taken into account shall be 
                determined under principles similar to the principles 
                of section 1561.
            ``(2) Waiver by secretary.--In the case of a failure which 
        is due to reasonable cause and not to willful neglect, the 
        Secretary may waive part or all of the tax imposed by 
        subsection (a) to the extent that the payment of such tax would 
        be excessive relative to the failure involved.
    ``(d) Liability for Tax.--The following shall be liable for the tax 
imposed by subsection (a):
            ``(1) In the case of a plan other than a multiemployer 
        plan, the employer.
            ``(2) In the case of a multiemployer plan, the plan.
    ``(e) Notice Requirements for Pension Plan Amendments Reducing 
Accruals.--
            ``(1) In general.--If an applicable pension plan is amended 
        so as to provide for a significant reduction in the rate of 
        future benefit accrual of 1 or more applicable individuals, the 
        plan administrator shall--
                    ``(A) not later than the 45th day before the 
                effective date of the amendment, provide the written 
                notice described in paragraph (2) to each applicable 
                individual (and to each employee organization (as 
                defined in section 3(4) of the Employee Retirement 
                Income Security Act of 1974) representing applicable 
                individuals), and
                    ``(B) in the case of a large applicable pension 
                plan--
                            ``(i) include in the notice under paragraph 
                        (2) the additional information described in 
                        paragraph (3), and
                            ``(ii) make available the information 
                        described in paragraph (4) in accordance with 
                        such paragraph.
            ``(2) Basic written notice.--The notice under paragraph (1) 
        shall include a summary of the important terms of the 
        amendment, including--
                    ``(A) the effective date of the amendment,
                    ``(B) a statement that the amendment is expected to 
                significantly reduce the rate of future benefit 
                accrual,
                    ``(C) a description of the classes of applicable 
                individuals to whom the amendment applies, and
                    ``(D) a description of how the amendment 
                significantly reduces the rate of future benefit 
                accrual.
            ``(3) Additional information to be provided by large 
        applicable pension plans.--
                    ``(A) In general.--The information described in 
                this paragraph is--
                            ``(i) a description of the plan's benefit 
                        formulas (including formulas for determining 
                        early retirement benefits) both before and 
                        after the amendment and an explanation of the 
                        effect of the different formulas on applicable 
                        individuals,
                            ``(ii) an explanation of the circumstances 
                        (if any) under which (for appropriate 
                        categories of applicable individuals) the 
                        amendment is reasonably expected to result in a 
                        temporary period after the effective date of 
                        the amendment during which there are no or 
                        minimal accruals,
                            ``(iii) illustrative examples of normal or 
                        early retirement benefits meeting the 
                        requirements of subparagraph (B), and
                            ``(iv) notice of each applicable 
                        individual's right to request, and of the 
                        procedures for requesting, the information 
                        required to be provided under paragraph (4) and 
                        under section 105(e) of Employee Retirement 
                        Income Security Act of 1974.
                    ``(B) Illustrative examples.--Illustrative examples 
                meet the requirements of this subparagraph if such 
                examples illustrate the adverse effects of the plan 
                amendment. Such examples shall be prepared by the plan 
                administrator in accordance with regulations prescribed 
                by the Secretary, and such regulations shall require 
                that the examples--
                            ``(i) reflect fairly the different 
                        categories of applicable individuals who are 
                        similarly affected by the plan amendment after 
                        consideration of all relevant factors,
                            ``(ii) show a comparison of benefits for 
                        each such category of applicable individuals 
                        under the plan (as in effect before and after 
                        the effective date) at appropriate future 
                        dates, and
                            ``(iii) illustrate any temporary period 
                        described in subparagraph (A)(ii).
                Such comparison shall be based on benefits in the form 
                of a life annuity and on actuarial assumptions each of 
                which is reasonable (and is so certified by an enrolled 
                actuary) when applied to all participants in the plan.
            ``(4) Supporting information relating to calculation of 
        benefits.--
                    ``(A) In general.--Each individual who receives or 
                who is entitled to receive the information described in 
                paragraph (3) may (after so receiving or becoming so 
                entitled) request the plan administrator to provide the 
                information described in subparagraph (B).
                    ``(B) Information.--The plan administrator shall, 
                within 15 days after the date on which a request under 
                subparagraph (A) is made, provide to the individual 
                information (including benefit formulas and actuarial 
                factors) which is sufficient--
                            ``(i) to confirm the benefit comparisons in 
                        the illustrative examples described in 
                        paragraph (3)(B), and
                            ``(ii) to enable the individual to use the 
                        individual's own personal information to make 
                        calculations of the individual's own benefits 
                        which are similar to the calculations made in 
                        such examples.
                Nothing in this subsection shall be construed to 
                require the plan administrator to provide to an 
                individual such individual's personal information for 
                purposes of clause (ii).
                    ``(C) Time limitation on requests.--This paragraph 
                shall apply only to requests made during the 12-month 
                period that begins on the later of the effective date 
                of the amendment to which it relates or the date the 
                notice described in paragraph (2) is provided.
            ``(5) Special rules.--
                    ``(A) Plain language.--The notice required under 
                paragraph (1) shall be written in a manner calculated 
                to be understood by the average plan participant who is 
                an applicable individual.
                    ``(B) Notice to designees.--The notice or 
                information required to be provided under this 
                subsection may be provided to a person designated, in 
                writing, by the person to which it would otherwise be 
                provided.
            ``(6) Alternative methods of compliance with enhanced 
        disclosure requirements in certain cases.--The Secretary shall 
        prescribe such regulations as may be necessary to carry out 
        this subsection. The Secretary may--
                    ``(A) prescribe alternative or simplified methods 
                of complying with paragraphs (3) and (4) in situations 
                where--
                            ``(i) there is no fundamental change in the 
                        manner in which the accrued benefit of an 
                        applicable individual is determined under the 
                        plan, and
                            ``(ii) such other methods are adequate to 
                        reasonably inform plan participants who are 
                        applicable individuals of the impact of the 
                        reductions,
                    ``(B) reduce the advance notice period in paragraph 
                (1)(A) from 45 days to 15 days before the effective 
                date of the amendment for cases in which compliance 
                with the 45-day advance notice requirement would be 
                unduly burdensome because the amendment is contingent 
                on a merger, acquisition, disposition, or other similar 
                transaction involving plan participants who are 
                applicable individuals or because 45 days advance 
                notice is otherwise impracticable,
                    ``(C) permit the comparison of benefits under 
                paragraph (3)(B)(i) to be based on a form of payment 
                other than a life annuity, or
                    ``(D) specify actuarial assumptions that are deemed 
                to be reasonable for purposes of the benefit 
                comparisons under paragraph (3)(B)(i).
            ``(7) Applicable individual.--For purposes of this 
        subsection, the term `applicable individual' means, with 
        respect to any plan amendment--
                    ``(A) each participant in the plan, and
                    ``(B) each beneficiary who is an alternate payee 
                (within the meaning of section 414(p)(8)) under a 
                qualified domestic relations order (within the meaning 
                of section 414(p)(1)),
        whose future benefit accruals under the plan may reasonably be 
        expected to be reduced by such plan amendment.
            ``(8) Terms relating to plans.--For purposes of this 
        subsection--
                    ``(A) Applicable pension plan.--The term 
                `applicable pension plan' means--
                            ``(i) a defined benefit plan, or
                            ``(ii) an individual account plan which is 
                        subject to the funding standards of section 
                        412.
                Such term shall not include any governmental plan 
                (within the meaning of section 414(d)) or any church 
                plan (within the meaning of section 414(e)) with 
                respect to which the election provided by section 
                410(d) has not been made.
                    ``(B) Large applicable pension plan.--The term 
                `large applicable pension plan' means an applicable 
                pension plan which had 100 or more active participants 
                as of the last day of the plan year preceding the plan 
                year in which the plan amendment becomes effective.''
            (2) Conforming amendment.--The table of sections for 
        chapter 43 is amended by adding at the end the following new 
        item:

                              ``Sec. 4980F. Failure of defined benefit 
                                        plans reducing benefit accruals 
                                        to satisfy notice 
                                        requirements.''
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to plan amendments taking effect after the date of the 
        enactment of this Act.
            (2) Special rules.--
                    (A) In general.--The amendments made by this 
                section shall not apply to any plan amendment for which 
                there was written notice before July 12, 1999, which 
                was reasonably expected to notify substantially all of 
                the plan participants or their representatives.
                    (B) Transition.--Until such time as the Secretary 
                of the Treasury issues regulations under section 
                4980F(e) (3) and (4) of the Internal Revenue Code of 
                1986 and section 204(h) (3) and (4) of the Employee 
                Retirement Income Security Act of 1974 (as added by the 
                amendments made by this section), a plan shall be 
                treated as meeting the requirements of such sections if 
                it makes a good faith effort to comply with such 
                requirements.
                    (C) Notice and information not required to be 
                furnished before 120th day after enactment.--The period 
                for providing any notice or information required by the 
                amendments made by this section shall not end before 
                the date which is 120 days after the date of the 
                enactment of this Act.

SEC. 115. PREVENTION OF WEARING AWAY OF EMPLOYEE'S ACCRUED BENEFIT.

    (a) Amendment to Internal Revenue Code.--Section 411(d)(6) 
(relating to accrued benefit may not be decreased by amendment) is 
amended by adding at the end the following new subparagraph:
                    ``(D) Treatment of plan amendments wearing away 
                accrued benefit.--
                            ``(i) In general.--For purposes of 
                        subparagraph (A), a plan amendment adopted by a 
                        large defined benefit plan shall be treated as 
                        reducing accrued benefits of a participant if, 
                        under the terms of the plan after the adoption 
                        of the amendment, the accrued benefit of the 
                        participant may at any time be less than the 
                        sum of--
                                    ``(I) the participant's accrued 
                                benefit for years of service before the 
                                effective date of the amendment, 
                                determined under the terms of the plan 
                                as in effect immediately before the 
                                effective date, plus
                                    ``(II) the participant's accrued 
                                benefit determined under the formula 
                                applicable to benefit accruals under 
                                the current plan as applied to years of 
                                service after such effective date.
                            ``(ii) Large defined benefit plan.--For 
                        purposes of this subparagraph, the term `large 
                        defined benefit plan' means any defined benefit 
                        plan which had 100 or more participants who had 
                        accrued a benefit under the plan (whether or 
                        not vested) as of the last day of the plan 
year preceding the plan year in which the plan amendment becomes 
effective.
                            ``(iii) Protected accrued benefit.--For 
                        purposes of this subparagraph, an accrued 
                        benefit shall include any early retirement 
                        benefit or retirement-type subsidy (within the 
                        meaning of subparagraph (B)(i)), but only with 
                        respect to a participant who satisfies (either 
                        before or after the effective date of the 
                        amendment) the conditions for the benefit or 
                        subsidy under the terms of the plan as in 
                        effect immediately before such date.''
    (b) Amendment of ERISA.--Section 204(g) of the Employee Retirement 
Income Security Act of 1974 is amended by adding at the end the 
following new paragraph:
    ``(4)(A) For purposes of paragraph (1), a plan amendment adopted by 
a large defined benefit plan shall be treated as reducing accrued 
benefits of a participant if, under the terms of the plan after the 
adoption of the amendment, the accrued benefit of the participant may 
at any time be less than the sum of--
            ``(i) the participant's accrued benefit for years of 
        service before the effective date of the amendment, determined 
        under the terms of the plan as in effect immediately before the 
        effective date, plus
            ``(ii) the participant's accrued benefit determined under 
        the formula applicable to benefit accruals under the current 
        plan as applied to years of service after such effective date.
    ``(B) For purposes of this paragraph, the term `large defined 
benefit plan' means any defined benefit plan which had 100 or more 
participants who had accrued a benefit under the plan (whether or not 
vested) as of the last day of the plan year preceding the plan year in 
which the plan amendment becomes effective.
    ``(C) For purposes of this paragraph, an accrued benefit shall 
include any early retirement benefit or retirement-type subsidy (within 
the meaning of paragraph (2)(A)), but only with respect to a 
participant who satisfies (either before or after the effective date of 
the amendment) the conditions for the benefit or subsidy under the 
terms of the plan as in effect immediately before such date.''
    (c) Effective Date.--The amendments made by this section shall 
apply to plan amendments adopted after June 29, 1999.

       TITLE II--PROMOTING TECHNOLOGICAL AND ECONOMIC DEVELOPMENT

SEC. 201. INCREASE IN EXPENSING LIMITATION TO $25,000.

    (a) In General.--Paragraph (1) of section 179(b) of the Internal 
Revenue Code of 1986 (relating to limitations) is amended to read as 
follows:
            ``(1) Dollar limitation.--The aggregate cost which may be 
        taken into account under subsection (a) for any taxable year 
        shall not exceed $25,000.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 202. NEW MARKETS TAX CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits), as amended by section 106, is 
amended by adding at the end the following new section:

``SEC. 45F. 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 6 
        percent of the amount paid to the qualified community 
        development entity for such investment at its original issue.
            ``(2) Credit allowance date.--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 4 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 in a qualified community 
                development entity which is a corporation, and
                    ``(B) any capital interest in a qualified community 
                development 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 
                representation on governing or advisory boards or 
                otherwise, 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 equity investment in, or loan to, any 
                qualified active low-income community business,
                    ``(B) the purchase from another community 
                development entity of any loan made by such entity 
                which is a qualified low-income community investment if 
                the amount received by such other entity from such 
                purchase is used by such other entity to make qualified 
                low-income community investments,
                    ``(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 if substantially 
                all of the investment or loan is used by such entity to 
                make qualified low-income community investments 
                described in subparagraphs (A), (B), and (C).
            ``(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 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 
                        1397B(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 1397B(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,
                    ``(B) paragraph (3) thereof shall not apply, and
                    ``(C) such term shall not include any business if a 
                significant portion of the equity interests in such 
                business are held by any person who holds a significant 
                portion of the equity investments in the community 
                development entity.
    ``(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.
            ``(2) 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.
            ``(3) Targeted population.--The Secretary may prescribe 
        regulations under which 1 or more targeted populations (within 
        the meaning of section 3(20) of the Riegle Community 
        Development and Regulatory Improvement Act of 1974 (12 U.S.C. 
        4702(20))) may be treated as low-income communities. Such 
        regulations shall include procedures for identifying the area 
        covered by any such community for purposes of determining 
        entities which are qualified active low-income community 
        businesses with respect to such community.
    ``(f) National Limitation on Amount of Investments Designated.--
            ``(1) In general.--There is a new markets tax credit 
        limitation of $750,000,000 for each of calendar years 2001 
        through 2005 and zero for any succeeding calendar year.
            ``(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 entities with records of 
        having successfully provided capital or technical assistance to 
        disadvantaged businesses or communities.
            ``(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.
    ``(g) Recapture of Credit in Certain Cases.--
            ``(1) In general.--If, at any time during the 5-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 overpayment 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.
    ``(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 benefits 
        (including the credit under section 42 and the exclusion from 
        gross income under section 103),
            ``(2) which prevent the abuse of the provisions of this 
        section through the use of related parties,
            ``(3) which impose appropriate reporting requirements,
            ``(4) 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, as amended 
        by section 106, is amended by striking ``plus'' at the end of 
paragraph (13), by striking the period at the end of paragraph (14) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(15) the new markets tax credit determined under section 
        45F(a).''
            (2) Limitation on carryback.--Subsection (d) of section 39 
        is amended by adding at the end the following new paragraph:
            ``(11) No carryback of new markets tax credit before 
        january 1, 2000.--No portion of the unused business credit for 
        any taxable year which is attributable to the credit under 
        section 45E may be carried back to a taxable year ending before 
        January 1, 2000.''
    (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 
        45F(a).''
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by section 106, is 
amended by adding at the end the following new item:

                              ``Sec. 45F. New markets tax credit.''
    (e) Effective Date.--The amendments made by this section shall 
apply to investments made after December 31, 2000.

SEC. 203. WAGE CREDITS FOR ROUND 2 EMPOWERMENT ZONES.

    (a) In General.--Section 1396(b)(2) (relating to special rule) is 
amended by inserting ``or pursuant to section 1391(g)'' after ``section 
1391(b)(2)''.
    (b) Conforming Amendment.--Section 1396 is amended by striking 
subsection (e).
    (c) Effective Date.--The amendments made by this section shall take 
effect of the date of the enactment of this Act.

SEC. 204. CREDIT FOR INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
(relating to business-related credits), as amended by section 202, is 
amended by adding at the end the following:

``SEC. 45G. INFORMATION TECHNOLOGY TRAINING PROGRAM EXPENSES.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
employer, the information technology training program credit determined 
under this section is an amount equal to 20 percent of information 
technology training program expenses paid or incurred by the taxpayer 
during the taxable year.
    ``(b) Additional Credit Percentage for Certain Programs.--The 
percentage under subsection (a) shall be increased by 5 percentage 
points for information technology training program expenses paid or 
incurred--
            ``(1) by the taxpayer with respect to a program operated 
        in--
                    ``(A) an empowerment zone or enterprise community 
                designated under part I of subchapter U,
                    ``(B) a school district in which at least 50 
                percent of the students attending schools in such 
                district are eligible for free or reduced-cost lunches 
                under the school lunch program established under the 
                National School Lunch Act,
                    ``(C) an area designated as a disaster area by the 
                Secretary of Agriculture or by the President under the 
                Disaster Relief and Emergency Assistance Act in the 
                taxable year or the 4 preceding taxable years,
                    ``(D) a rural enterprise community designated under 
                section 766 of the Agriculture, Rural Development, Food 
                and Drug Administration, and Related Agencies 
                Appropriations Act, 1999,
                    ``(E) an area designated by the Secretary of 
                Agriculture as a Rural Economic Area Partnership Zone, 
                or
                    ``(F) an area designated by the Secretary of 
                Agriculture as a Champion Community, or
            ``(2) by a small employer.
    ``(c) Limitation.--The amount of information technology training 
program expenses with respect to an individual which may be taken into 
account under subsection (a) for the taxable year shall not exceed 
$6,000.
    ``(d) Information Technology Training Program Expenses.--For 
purposes of this section--
            ``(1) In general.--The term `information technology 
        training program expenses' means expenses paid or incurred by 
        reason of the participation of the employer in any information 
        technology training program.
            ``(2) Information technology training program.--The term 
        `information technology training program' means a program--
                    ``(A) for the training of--
                            ``(i) computer programmers, systems 
                        analysts, and computer scientists or engineers 
                        (as such occupations are defined by the Bureau 
                        of Labor Statistics), and
                            ``(ii) such other occupations as determined 
                        by the Secretary, after consultation with a 
                        working group broadly solicited by the 
                        Secretary and open to all interested 
                        information technology entities and trade and 
                        professional associations,
                    ``(B) involving a partnership of--
                            ``(i) employers, and
                            ``(ii) State training programs, school 
                        districts, university systems, tribal colleges, 
                        or certified commercial information technology 
                        training providers, and
                    ``(C) at least 50 percent of the costs of which is 
                paid or incurred by the employers.
            ``(3) Certified commercial information technology training 
        provider.--The term `certified commercial information 
        technology training providers' means a private sector provider 
        of educational products and services utilized for training in 
        information technology which is certified with respect to--
                    ``(A) the curriculum that is used for the training, 
                or
                    ``(B) the technical knowledge of the instructors of 
                such provider,
        by 1 or more software publishers or hardware manufacturers the 
        products of which are a subject of the training.
    ``(e) Small Employer.--For purposes of this section, the term 
`small employer' means, with respect to any calendar year, any employer 
if such employer employed 200 or fewer employees on each business day 
in each of 20 or more calendar weeks in such year or the preceding 
calendar year.
    ``(f) Denial of Double Benefit.--No deduction or credit under any 
other provision of this chapter shall be allowed with respect to 
information technology training program expenses (determined without 
regard to the limitation under subsection (c)).
    ``(g) Certain Rules Made Applicable.--For purposes of this section, 
rules similar to the rules of section 45A(e)(2) and subsections (c), 
(d), and (e) of section 52 shall apply.''
    (b) Credit To Be Part of General Business Credit.--Section 38(b) 
(relating to current year business credit), as amended by section 202, 
is amended by striking ``plus'' at the end of paragraph (14), by 
striking the period at the end of paragraph (15) and inserting ``, 
plus'', and by adding at the end the following:
            ``(16) the information technology training program credit 
        determined under section 45G.''
    (c) No Carrybacks.--Subsection (d) of section 39 (relating to 
carryback and carryforward of unused credits), as amended by section 
202, is amended by adding at the end the following:
            ``(12) No carryback of section 45g credit before effective 
        date.--No portion of the unused business credit for any taxable 
        year which is attributable to the information technology 
        training program credit determined under section 45G may be 
        carried back to a taxable year ending before the date of the 
        enactment of section 45G.''
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1, as amended by section 202, is 
amended by adding at the end the following:

                              ``Sec. 45G. Information technology 
                                        training program expenses.''
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 205. RESTORATION OF STANDARDS FOR DETERMINING WHETHER TECHNICAL 
              WORKERS ARE NOT EMPLOYEES.

    (a) Repeal of Section 530(d) of the Revenue Act of 1978.--Section 
530(d) of the Revenue Act of 1978 (as added by section 1706 of the Tax 
Reform Act of 1986) is repealed.
    (b) Effective Date.--The amendment made by subsection (c) shall 
apply to periods ending after the date of enactment of this Act.

SEC. 206. CERTAIN POST-SECONDARY EDUCATIONAL BENEFITS PROVIDED BY AN 
              EMPLOYER TO CHILDREN OF EMPLOYEES EXCLUDABLE FROM GROSS 
              INCOME AS A SCHOLARSHIP.

    (a) In General.--Section 117 (relating to qualified scholarships) 
is amended by adding at the end the following:
    ``(e) Employer-Provided Post-Secondary Educational Benefits 
Provided to Children of Employees.--
            ``(1) In general.--In determining whether any amount is a 
        qualified scholarship for purposes of subsection (a), the fact 
        that such amount is provided in connection with an employment 
        relationship shall be disregarded if--
                    ``(A) such amount is provided by the employer to a 
                child (as defined in section 161(c)(3)) of an employee 
                of such employer,
                    ``(B) such amount is provided pursuant to a plan 
                which meets the nondiscrimination requirements of 
                subsection (d)(3), and
                    ``(C) amounts provided under such plan are in 
                addition to any other compensation payable to employees 
                and such plan does not provide employees with a choice 
                between such amounts and any other benefit.
        For purposes of subparagraph (C), the business practices of the 
        employer (as well as such plan) shall be taken into account.
            ``(2) Dollar limitations.--
                    ``(A) Per child.--The amount excluded from the 
                gross income of the employee by reason of paragraph (1) 
                for a taxable year with respect to amounts provided to 
                each child of such employee shall not exceed $2,000.
                    ``(B) Aggregate limit.--The amount excluded from 
                the gross income of the employee by reason of paragraph 
                (1) for a taxable year (after the application of 
                subparagraph (A)) shall not exceed the excess of the 
                dollar amount contained in section 127(a)(2) over the 
                amount excluded from the employee's gross income under 
                section 127 for such year.
            ``(3) Principal shareholders and owners.--Paragraph (1) 
        shall not apply to any amount provided to any child of any 
        individual if such individual (or such individual's spouse) 
        owns (on any day of the year) more than 5 percent of the stock 
        or of the capital or profits interest in the employer.
            ``(4) Special rules of application.--In the case of an 
        amount which is treated as a qualified scholarship by reason of 
        this subsection--
                    ``(A) subsection (a) shall be applied without 
                regard to the requirement that the recipient be a 
                candidate for a degree, and
                    ``(B) subsection (b)(2)(A) shall be applied by 
                substituting `section 529(e)(5)' for `section 
                170(b)(1)(A)(ii)'.
            ``(5) Certain other rules to apply.--Rules similar to the 
        rules of paragraphs (4), (5), and (7) of section 127(c) shall 
        apply for purposes of this subsection.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of enactment of this Act.

SEC. 207. INCREASE IN STATE CEILING ON LOW-INCOME HOUSING CREDIT.

    (a) In General.--Clause (i) of section 42(h)(3)(C) (relating to 
State housing credit ceiling) is amended to read as follows:
                            ``(i) the applicable amount under 
                        subparagraph (H) multiplied by the State 
                        population,''.
    (b) Applicable Amount.--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) Applicable amount of state ceiling.--For 
                purposes of subparagraph (C)(i), the applicable amount 
                shall be determined under the following table:

                ``For calendar year--
                                             The applicable amount is--
                    2000...................................      $1.30 
                    2001...................................       1.35 
                    2002...................................       1.40 
                    2003...................................       1.45 
                    2004...................................       1.50 
                    2005...................................       1.55 
                    2006...................................       1.60 
                    2007...................................       1.65 
                    2008...................................       1.70 
                    2009 and thereafter....................     1.75.''
    (c) Effective Date.--The amendments made by this section shall 
apply to calendar years after 1999.

              TITLE III--EXPANDING ECONOMIC OPPORTUNITIES

SEC. 301. WORK OPPORTUNITY CREDIT AND WELFARE-TO-WORK CREDIT.

    (a) Temporary Extension.--Sections 51(c)(4)(B) and 51A(f) (relating 
to termination) are each amended by striking ``December 31, 2000'' and 
inserting ``December 31, 2004''.
    (b) Effective Date.--The amendments made by this section shall 
apply to individuals who begin work for the employer after December 31, 
2000.

SEC. 302. EXTENSION OF CREDIT FOR HOLDERS OF QUALIFIED ZONE ACADEMY 
              BONDS.

    Section 1397E(e)(1) (relating to national limitation) is amended by 
striking ``and 1999'' and inserting ``, 1999, and 2000''.

         TITLE IV--PROMOTING FAMILY-OWNED FARMS AND BUSINESSES

SEC. 401. INCREASE IN ESTATE TAX DEDUCTION FOR FAMILY-OWNED BUSINESS 
              INTEREST.

    (a) In General.--Section 2057(a)(2) (relating to maximum deduction) 
is amended by striking ``$675,000'' and inserting ``$1,125,000''.
    (b) Conforming Amendments.--Section 2057(a)(3)(B) (relating to 
coordination with unified credit) is amended by striking ``$675,000'' 
each place it appears in the text and heading and inserting 
``$1,125,000''.
    (c) Effective Date.--The amendments made by this section shall 
apply to estates of decedents dying after December 31, 2002.

SEC. 402. INCOME AVERAGING FOR FARMERS NOT TO INCREASE ALTERNATIVE 
              MINIMUM TAX LIABILITY.

    (a) In General.--Section 55(c) (defining regular tax) is amended by 
redesignating paragraph (2) as paragraph (3) and by inserting after 
paragraph (1) the following:
            ``(2) Coordination with income averaging for farmers.--
        Solely for purposes of this section, section 1301 (relating to 
        averaging of farm income) shall not apply in computing the 
        regular tax.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 403. NET OPERATING LOSS OF FARMERS.

    (a) Increase in Carryback Years.--Paragraph (1) of section 172(b) 
(relating to net operating loss carrybacks and carryforwards) is 
amended by adding at the end the following new subparagraph:
                    ``(G) Farming losses.--Subparagraph (A) shall be 
                applied--
                            ``(i) in the matter preceding clause (i), 
                        by substituting `any taxable year beginning 
                        with the 3rd taxable year after the taxable 
                        year of such loss' for `any taxable year', and
                            ``(ii) in clause (i), by substituting `10 
                        years' for `2 years',
                with respect to the portion of the net operating loss 
                of an eligible taxpayer (as defined in subsection (i)) 
                for any taxable year beginning after December 31, 2000, 
                and ending before January 1, 2003, which is a farming 
                loss (as so defined) with respect to the taxpayer.''
    (b) Definitions and Rules Relating to Farming Losses.--Section 172 
is amended by redesignating subsection (i) as subsection (j) and 
inserting after subsection (h) the following new subsection:
    ``(i) Definitions and Rules Relating to Farming Losses.--For 
purposes of this section--
            ``(1) Farming loss.--
                    ``(A) In general.--The term `farming loss' means 
                the lesser of--
                            ``(i) the net operating loss of the 
                        taxpayer for the taxable year, or
                            ``(ii) the net operating loss of the 
                        taxpayer for the taxable year determined by 
                        only taking into account items of income and 
                        deduction attributable to 1 or more qualified 
                        farming business of the taxpayer.
                    ``(B) Dollar limitation.--
                            ``(i) In general.--The farming loss of 
                        taxpayer for any taxable year shall not exceed 
                        $200,000.
                            ``(ii) Aggregation rules.--
                                    ``(I) In general.--All persons 
                                treated as 1 employer under subsections 
                                (a) or (b) of section 52 shall be 
                                treated as 1 person.
                                    ``(II) Pass-thru entity.--In the 
                                case of a partnership, trust, or other 
                                pass-thru entity, the limitation shall 
                                be applied at both the entity and the 
                                owner level.
                                    ``(III) Owner.--The limitation 
                                shall be reduced by the amount 
of farming loss determined for a corporation for which the taxpayer is 
a 50 percent owner in the taxable year of the corporation ending in the 
taxable year of the taxpayer owner.
            ``(2) Eligible taxpayer.--
                    ``(A) In general.--The term `eligible taxpayer' 
                means a taxpayer which derives more than 50 percent of 
                its gross income for the 3-year period beginning 2 
                years prior to the current taxable year from qualified 
                farming businesses.
                    ``(B) Qualified farming business.--The term 
                `qualified farming business' means a trade or business 
                of farming (within the meaning of section 2032A)--
                            ``(i) with respect to which--
                                    ``(I) the taxpayer or a member of 
                                the family of the taxpayer materially 
                                participates (within the meaning of 
                                section 2032A(e)(6)), or
                                    ``(II) in the case of a taxpayer 
                                other than an individual, a 20 percent 
                                owner of the taxpayer or a member of 
                                the owner's family materially 
                                participates (as so defined), and
                            ``(ii) which does not receive in excess of 
                        $7,000,000 for sales in a taxable year.
                For purposes of clause (i)(II), owners which are 
                members of a single family shall be treated as a single 
                owner.
            ``(3) Owner.--
                    ``(A) 20 percent owner.--The term `20 percent 
                owner' means any person who would be described in 
                section 416(i)(1)(B)(i) if `20 percent' were 
                substituted for `5 percent' each place it appears in 
                such section.
                    ``(B) 50 percent owner.--The term `50 percent 
                owner' means any person who would be described in 
                section 416(i)(1)(B)(i) if `50 percent' were 
                substituted for `5 percent' each place it appears in 
                such section.
            ``(4) Coordination with subsection (b)(2).--For purposes of 
        applying subsection (b)(2), a farming loss for any taxable year 
        shall be treated as a separate net operating loss for such 
        taxable year to be taken into account for the remaining portion 
        of the net operating loss for such taxable year.
            ``(5) Election.--Any taxpayer entitled to a 10-year 
        carryback under subsection (b)(1)(G) from any loss year may 
        elect to have the carryback period with respect to such loss 
        year, and any portion of the farming loss for such year, 
        determined without regard to subsection (b)(1)(G). Such 
        election shall be made in such manner as may be prescribed by 
        the Secretary and shall be made by the due date (including 
        extensions of time) for filing the taxpayer's return for the 
        taxable year of the net operating loss. Such election, once 
        made for any taxable year, shall be irrevocable for the taxable 
        year.''

SEC. 404. SMALL BUSINESSES ALLOWED INCREASED DEDUCTION FOR MEAL 
              EXPENSES.

    (a) In General.--Subsection (n) of section 274 (relating to only 50 
percent of meal and entertainment expenses allowed as deduction) is 
amended by adding at the end the following new paragraph:
            ``(4) Special rule for small businesses.--
                    ``(A) In general.--In the case of any taxpayer 
                which is a small business, paragraph (1) shall be 
                applied by substituting for `50 percent' with respect 
                to expenses for food or beverages--
                            ``(i) `55 percent' in the case of taxable 
                        years beginning in 2001, and
                            ``(ii) `60 percent' in the case of taxable 
                        years beginning after 2001.
                    ``(B) Small business.--For purposes of this 
                paragraph, the term `small business' means, with 
                respect to expenses paid or incurred during any taxable 
                year--
                            ``(i) any C corporation which meets the 
                        requirements of section 55(e)(1) for such year, 
                        and
                            ``(ii) any S corporation, partnership, or 
                        sole proprietorship which would meet such 
                        requirements if it were a C corporation.''
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to taxable years beginning after December 31, 2000.

SEC. 405. TAX EXCLUSION FOR COST-SHARING PAYMENTS UNDER PARTNERS FOR 
              WILDLIFE PROGRAM.

    (a) In General.--Section 126(a) (relating to certain cost-sharing 
payments) is amended by redesignating paragraph (10) as paragraph (11) 
and by inserting after paragraph (9) the following:
            ``(10) The Partners for Wildlife Program authorized by the 
        Fish and Wildlife Act of 1956 (16 U.S.C. 742a et seq.).''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

                TITLE V--PROVIDING ADMINISTRATIVE RELIEF

SEC. 501. DISCLOSURE OF TAX INFORMATION TO FACILITATE COMBINED 
              EMPLOYMENT TAX REPORTING.

    Section 6103(d)(5) is amended to read as follows:
            ``(5) Disclosure for combined employment tax reporting.--
        The Secretary may disclose taxpayer identity information and 
        signatures to any agency, body, or commission of any State for 
        the purpose of carrying out with such agency, body, or 
        commission a combined Federal and State employment tax 
        reporting program approved by the Secretary. Subsections (a)(2) 
        and (p)(4) and sections 7213 and 7213A shall not apply with 
        respect to disclosures or inspections made pursuant to this 
        paragraph.''

SEC. 502. ENROLLED AGENTS.

    (a) In General.--Chapter 77 (relating to miscellaneous provisions) 
is amended by adding at the end the following new section:

``SEC. 7527. ENROLLED AGENTS.

    ``(a) In General.--The Secretary may prescribe such regulations as 
may be necessary to regulate the conduct of enrolled agents in regards 
to their practice before the Internal Revenue Service.
    ``(b) Use of Credentials.--
            ``(1) In general.--Any enrolled agent properly licensed to 
        practice before the Internal Revenue Service under subsection 
        (a) shall be allowed to use the credentials `Enrolled Agent', 
        `EA', or `E.A.'.
            ``(2) Prohibition on interference.--No state, municipality 
        or locality, or agency thereof, shall interfere with the right 
        of enrolled agents to use such credentials as described in 
        paragraph (b)(1).''
    (b) Clerical Amendment.--The table of sections for chapter 77 is 
amended by adding at the end the following new item:

                              ``Sec. 7527. Enrolled agents.''
    (c) Prior Regulations.--Nothing in the amendments made by this 
section shall be construed to have any effect on part 10 of title 31, 
Code of Federal Regulations, or any other Federal rule or regulation 
issued before the date of the enactment of this Act.
                                 <all>