I One Hundred Eleventh Congress of the United States of America At the Second SessionBegun and held at the City of Washington on Tuesday, the fifth day of January, two thousand and ten H. R. 4337 AN ACT To amend the Internal Revenue Code of 1986 to modify certain rules applicable to regulated investment companies, and for other purposes.
1.
Short title, etc
(a)
Short title
This Act may be cited as the Regulated Investment Company Modernization Act of 2010. (b)
Reference
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—Capital loss carryovers of regulated investment companies Sec. 101. Capital loss carryovers of regulated investment companies. TITLE II—Modification of gross income and asset tests of regulated investment companies Sec. 201. Savings provisions for failures of regulated investment companies to satisfy gross income and asset tests. TITLE III—Modification of rules related to dividends and other distributions Sec. 301. Modification of dividend designation requirements and allocation rules for regulated investment companies. Sec. 302. Earnings and profits of regulated investment companies. Sec. 303. Pass-thru of exempt-interest dividends and foreign tax credits in fund of funds structure. Sec. 304. Modification of rules for spillover dividends of regulated investment companies. Sec. 305. Return of capital distributions of regulated investment companies. Sec. 306. Distributions in redemption of stock of a regulated investment company. Sec. 307. Repeal of preferential dividend rule for publicly offered regulated investment companies. Sec. 308. Elective deferral of certain late-year losses of regulated investment companies. Sec. 309. Exception to holding period requirement for certain regularly declared exempt-interest dividends. TITLE IV—Modifications related to excise tax applicable to regulated investment companies Sec. 401. Excise tax exemption for certain regulated investment companies owned by tax exempt entities. Sec. 402. Deferral of certain gains and losses of regulated investment companies for excise tax purposes. Sec. 403. Distributed amount for excise tax purposes determined on basis of taxes paid by regulated investment company. Sec. 404. Increase in required distribution of capital gain net income. TITLE V—Other provisions Sec. 501. Repeal of assessable penalty with respect to liability for tax of regulated investment companies. Sec. 502. Modification of sales load basis deferral rule for regulated investment companies.
<enum>I</enum><header>Capital loss carryovers of regulated investment companies</header> <section id="HC98FDA2D66474ED78335327167748052"><enum>101.</enum><header>Capital loss carryovers of regulated investment companies</header> <subsection id="H09C16C9994DD4D1C970C9C54B2F7D53F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (a) of section 1212 is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="H6532AE1662904E408820FB5F94321E6D" style="OLC"> <paragraph id="HA611A6BDF16E4D8CB678F32454494345"><enum>(3)</enum><header>Regulated investment companies</header> <subparagraph id="HCF7E182443304895A6C1BC0B03E236E1"><enum>(A)</enum><header>In general</header><text>If a regulated investment company has a net capital loss for any taxable year—</text> <clause id="H2E8B15848CEB4C02B38179643B7A36FA"><enum>(i)</enum><text>paragraph (1) shall not apply to such loss,</text></clause> <clause id="HEF3D7D7BC42F4B5D9921AEB54D6AFB4D"><enum>(ii)</enum><text>the excess of the net short-term capital loss over the net long-term capital gain for such year shall be a short-term capital loss arising on the first day of the next taxable year, and</text></clause> <clause id="H859247C9A80446C9B2E39DD9AF55D662"><enum>(iii)</enum><text>the excess of the net long-term capital loss over the net short-term capital gain for such year shall be a long-term capital loss arising on the first day of the next taxable year.</text></clause></subparagraph> <subparagraph id="HD767508E9E4E48B89320EE547DB709FC"><enum>(B)</enum><header>Coordination with general rule</header><text display-inline="yes-display-inline">If a net capital loss to which paragraph (1) applies is carried over to a taxable year of a regulated investment company—</text> <clause id="H7FC5A61864F0475B8ACFD897C524D061"><enum>(i)</enum><header>Losses to which this paragraph applies</header><text>Clauses (ii) and (iii) of subparagraph (A) shall be applied without regard to any amount treated as a short-term capital loss under paragraph (1).</text></clause> <clause id="H9F69EC1E226845C9AE3F3ADFB7D26B9B"><enum>(ii)</enum><header>Losses to which general rule applies</header><text>Paragraph (1) shall be applied by substituting <quote>net capital loss for the loss year or any taxable year thereafter (other than a net capital loss to which paragraph (3)(A) applies)</quote> for <quote>net capital loss for the loss year or any taxable year thereafter</quote>.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="HEA80658656F74D8E8A61E1C64CBCBE30"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="H754D57D6F2FC4C319BA606037A84B194"><enum>(1)</enum><text>Subparagraph (C) of section 1212(a)(1) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="HC674A3F346B148679EA186CFCFF28C11" style="OLC"> <subparagraph id="H397FE9EBE7C74A41BF9F90A6E0B7295B"><enum>(C)</enum><text display-inline="yes-display-inline">a capital loss carryover to each of the 10 taxable years succeeding the loss year, but only to the extent such loss is attributable to a foreign expropriation loss,</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HDE4330930EC44B639B87D5757588C5B1"><enum>(2)</enum><text>Paragraph (10) of section 1222 is amended by striking <quote>section 1212</quote> and inserting <quote>section 1212(a)(1)</quote>.</text></paragraph></subsection> <subsection id="HBFA737D29AF94BD1A837CBFB5A763AB3"><enum>(c)</enum><header>Effective date</header> <paragraph id="H14E1E0EBFCD544FC82FDA80B1EEA6D49"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the amendments made by this section shall apply to net capital losses for taxable years beginning after the date of the enactment of this Act.</text></paragraph> <paragraph id="H9B4529B12C294714830C65A81665BBFB"><enum>(2)</enum><header>Coordination rules</header><text>Subparagraph (B) of section 1212(a)(3) of the Internal Revenue Code of 1986, as added by this section, shall apply to taxable years beginning after the date of the enactment of this Act.</text></paragraph></subsection></section> <enum>II</enum><header>Modification of gross income and asset tests of regulated investment companies</header> <section id="HC44D782358794D769DD332487CCEC8B2"><enum>201.</enum><header>Savings provisions for failures of regulated investment companies to satisfy gross income and asset tests</header> <subsection commented="no" display-inline="no-display-inline" id="H77D68712A0864BC39A08E9C8BA80C5A1"><enum>(a)</enum><header>Asset test</header><text display-inline="yes-display-inline">Subsection (d) of section 851 is amended—</text> <paragraph id="HE981B75AA90C4E56BFC6FA868C52F6F9"><enum>(1)</enum><text>by striking <quote>A corporation which meets</quote> and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="HBD32A6CDC7A144F6939DEB3715B4D540" style="OLC"> <paragraph id="H9B4D06177C6341DC9A6FA6564FCEA9D0"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">A corporation which meets</text></paragraph><after-quoted-block>, and</after-quoted-block></quoted-block></paragraph> <paragraph id="H1AC1A72E0CC34380BC1E85302662EFD4"><enum>(2)</enum><text>by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="H8628470807534EB6877429B2620E18C3" style="OLC"> <paragraph commented="no" id="HA801F1A2C7344B3093A67B5751113724"><enum>(2)</enum><header>Special rules regarding failure to satisfy requirements</header><text display-inline="yes-display-inline">If paragraph (1) does not preserve a corporation’s status as a regulated investment company for any particular quarter—</text> <subparagraph commented="no" id="H6B30128D200B45C9BF54260F1749FF12"><enum>(A)</enum><header>In general</header><text>A corporation that fails to meet the requirements of subsection (b)(3) (other than a failure described in subparagraph (B)(i)) for such quarter shall nevertheless be considered to have satisfied the requirements of such subsection for such quarter if—</text> <clause commented="no" id="H62496A026BBF4475AF1D9ADF731F76AC"><enum>(i)</enum><text>following the corporation’s identification of the failure to satisfy the requirements of such subsection for such quarter, a description of each asset that causes the corporation to fail to satisfy the requirements of such subsection at the close of such quarter is set forth in a schedule for such quarter filed in the manner provided by the Secretary,</text></clause> <clause commented="no" id="H7C94828F038A4790862F704C31C8DEC9"><enum>(ii)</enum><text>the failure to meet the requirements of such subsection for such quarter is due to reasonable cause and not due to willful neglect, and</text></clause> <clause commented="no" id="HB9C8902CE6D7468C939BE78AD605F590"><enum>(iii)</enum> <subclause commented="no" display-inline="yes-display-inline" id="HB5419F26502F4ED4B5D073FA1700FF08"><enum>(I)</enum><text>the corporation disposes of the assets set forth on the schedule specified in clause (i) within 6 months after the last day of the quarter in which the corporation’s identification of the failure to satisfy the requirements of such subsection occurred or such other time period prescribed by the Secretary and in the manner prescribed by the Secretary, or</text></subclause> <subclause id="HB399E873DD6E42F6A445988726B20B11" indent="up1"><enum>(II)</enum><text>the requirements of such subsection are otherwise met within the time period specified in subclause (I).</text></subclause></clause></subparagraph> <subparagraph commented="no" id="H90F0FCC0A69F4304B4656050570DF1E8"><enum>(B)</enum><header>Rule for certain de minimis failures</header><text>A corporation that fails to meet the requirements of subsection (b)(3) for such quarter shall nevertheless be considered to have satisfied the requirements of such subsection for such quarter if—</text> <clause commented="no" id="H2FE7089405A94AEC88504904D7D6FF0D"><enum>(i)</enum><text>such failure is due to the ownership of assets the total value of which does not exceed the lesser of—</text> <subclause id="HF5ADBD5B48D7422D8C9F53F3C850E43B"><enum>(I)</enum><text>1 percent of the total value of the corporation’s assets at the end of the quarter for which such measurement is done, or</text></subclause> <subclause id="H6841F4C313854DDEA4D4D0A6275E32F7"><enum>(II)</enum><text>$10,000,000, and</text></subclause></clause> <clause commented="no" id="H9BBDA24A6AF9489F8CB12D20AB76D777"><enum>(ii)</enum> <subclause commented="no" display-inline="yes-display-inline" id="HC6082D73DB7B4D4B89E113A9CBEEF054"><enum>(I)</enum><text>the corporation, following the identification of such failure, disposes of assets in order to meet the requirements of such subsection within 6 months after the last day of the quarter in which the corporation’s identification of the failure to satisfy the requirements of such subsection occurred or such other time period prescribed by the Secretary and in the manner prescribed by the Secretary, or</text></subclause> <subclause id="H227F026CAE794F46BC98173FBFD07628" indent="up1"><enum>(II)</enum><text>the requirements of such subsection are otherwise met within the time period specified in subclause (I).</text></subclause></clause></subparagraph> <subparagraph commented="no" id="H6C1741B3DC0646A5B14B2F7C561769C3"><enum>(C)</enum><header>Tax</header> <clause commented="no" id="HD9A0DC0B73E843C1B31AEE0A5F3DDFE9"><enum>(i)</enum><header>Tax imposed</header><text>If subparagraph (A) applies to a corporation for any quarter, there is hereby imposed on such corporation a tax in an amount equal to the greater of—</text> <subclause commented="no" id="H4D9BA0E2B5AF43B9BC69DEA8540C68E3"><enum>(I)</enum><text>$50,000, or</text></subclause> <subclause commented="no" id="H349A9BA7A3F842A7BE0CFF0FDF5ED187"><enum>(II)</enum><text>the amount determined (pursuant to regulations promulgated by the Secretary) by multiplying the net income generated by the assets described in the schedule specified in subparagraph (A)(i) for the period specified in clause (ii) by the highest rate of tax specified in section 11.</text></subclause></clause> <clause commented="no" id="H3761BAE17DCD4167AD5EF60307AD13E0"><enum>(ii)</enum><header>Period</header><text>For purposes of clause (i)(II), the period described in this clause is the period beginning on the first date that the failure to satisfy the requirements of subsection (b)(3) occurs as a result of the ownership of such assets and ending on the earlier of the date on which the corporation disposes of such assets or the end of the first quarter when there is no longer a failure to satisfy such subsection.</text></clause> <clause commented="no" id="H036C4ADE954F4437AD23EAC2FDE213AD"><enum>(iii)</enum><header>Administrative provisions</header><text>For purposes of subtitle F, a tax imposed by this subparagraph shall be treated as an excise tax with respect to which the deficiency procedures of such subtitle apply.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="H91CF0092D0F9405AAB120D00688F3FA9"><enum>(b)</enum><header>Gross income test</header><text display-inline="yes-display-inline">Section 851 is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="HA4B9D13A02DC4015AA905100CF28C1F8" style="OLC"> <subsection id="H607256E2BA5A42A2B38BF3086D769F65"><enum>(i)</enum><header>Failure To satisfy gross income test</header> <paragraph id="HDB6D711A496B4786AC7A426842CC533E"><enum>(1)</enum><header>Disclosure requirement</header><text display-inline="yes-display-inline">A corporation that fails to meet the requirement of paragraph (2) of subsection (b) for any taxable year shall nevertheless be considered to have satisfied the requirement of such paragraph for such taxable year if—</text> <subparagraph id="HF9A28A4CDDE741FD8446557D8DF4D45C"><enum>(A)</enum><text>following the corporation’s identification of the failure to meet such requirement for such taxable year, a description of each item of its gross income described in such paragraph is set forth in a schedule for such taxable year filed in the manner provided by the Secretary, and</text></subparagraph> <subparagraph id="HD76DF024BB6B4C529516B42305FF53A8"><enum>(B)</enum><text>the failure to meet such requirement is due to reasonable cause and not due to willful neglect.</text></subparagraph></paragraph> <paragraph id="H1DED97F62AD34FBA85810DC2AB695C29"><enum>(2)</enum><header>Imposition of tax on failures</header><text>If paragraph (1) applies to a regulated investment company for any taxable year, there is hereby imposed on such company a tax in an amount equal to the excess of—</text> <subparagraph id="HDC5E3F03CFF04FF7BD206FD3D357B987"><enum>(A)</enum><text>the gross income of such company which is not derived from sources referred to in subsection (b)(2), over</text></subparagraph> <subparagraph id="HE6D6F09AAA3B449BAF692CC490A4B07B"><enum>(B)</enum><text><fraction>1/9</fraction> of the gross income of such company which is derived from such sources.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H007BEBCA567F4542AE65753214CA6F8C"><enum>(c)</enum><header>Deduction of taxes paid from investment company taxable income</header><text>Paragraph (2) of section 852(b) is amended by adding at the end the following new subparagraph:</text> <quoted-block display-inline="no-display-inline" id="H512FAA5E36A3493E90410DEE348EF68D" style="OLC"> <subparagraph id="HF3520B46491B4DA48F473DD0837C12EE"><enum>(G)</enum><text display-inline="yes-display-inline">There shall be deducted an amount equal to the tax imposed by subsections (d)(2) and (i) of section 851 for the taxable year.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H2F54D61C083749EDAE641518B6944D90"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years with respect to which the due date (determined with regard to any extensions) of the return of tax for such taxable year is after the date of the enactment of this Act.</text></subsection></section> <enum>III</enum><header>Modification of rules related to dividends and other distributions</header> <section id="H2F991DE741024551A05EB879D51262C5"><enum>301.</enum><header>Modification of dividend designation requirements and allocation rules for regulated investment companies</header> <subsection id="HC9835E47C1894E7AA91A3CCC4228C803"><enum>(a)</enum><header>Capital gain dividends</header> <paragraph display-inline="no-display-inline" id="H1C87A02537A34A4C81CDB070B80EE764"><enum>(1)</enum><header>In general</header><text>Subparagraph (C) of section 852(b)(3) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H49EF1E9B74A547B19AB8FEE6700ABD3D" style="OLC"> <subparagraph display-inline="no-display-inline" id="H5470024914C74DC8B5AB3D6732C229A4"><enum>(C)</enum><header>Definition of capital gain dividend</header><text display-inline="yes-display-inline">For purposes of this part—</text> <clause id="HDA55E2D3BE9245C09DA44AA64D1C83E9"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in clause (ii), a capital gain dividend is any dividend, or part thereof, which is reported by the company as a capital gain dividend in written statements furnished to its shareholders.</text></clause> <clause id="HE6F8BA0D3FE8479F956F447A3CB69AAE"><enum>(ii)</enum><header>Excess reported amounts</header><text>If the aggregate reported amount with respect to the company for any taxable year exceeds the net capital gain of the company for such taxable year, a capital gain dividend is the excess of—</text> <subclause id="H49F216DB8AFC402D8FDFC02CDBA358B7"><enum>(I)</enum><text>the reported capital gain dividend amount, over</text></subclause> <subclause id="H331E093AE3914AEE805175D74C928CF1"><enum>(II)</enum><text>the excess reported amount which is allocable to such reported capital gain dividend amount.</text></subclause></clause> <clause id="H499464CF410A4684B5DFFCA5E5F68C38"><enum>(iii)</enum><header>Allocation of excess reported amount</header> <subclause id="HB80CE3A7B9214C59A8540AF6ABB72E4D"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported capital gain dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported capital gain dividend amount bears to the aggregate reported amount.</text></subclause> <subclause id="H384BB02FA7AB4648AFE09A82BB798664"><enum>(II)</enum><header>Special rule for noncalendar year taxpayers</header><text>In the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting <quote>post-December reported amount</quote> for <quote>aggregate reported amount</quote> and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.</text></subclause></clause> <clause id="H44F3E082627448128B7F0D3532B2D39C"><enum>(iv)</enum><header>Definitions</header><text>For purposes of this subparagraph—</text> <subclause id="H5A6EC1D8EAF04CDA84292F5531EFDB8E"><enum>(I)</enum><header>Reported capital gain dividend amount</header><text>The term <quote>reported capital gain dividend amount</quote> means the amount reported to its shareholders under clause (i) as a capital gain dividend.</text></subclause> <subclause id="H5FC0D5FE7489408FB9E11C0E72F5F537"><enum>(II)</enum><header>Excess reported amount</header><text>The term <term>excess reported amount</term> means the excess of the aggregate reported amount over the net capital gain of the company for the taxable year.</text></subclause> <subclause id="H994EC3AC86724B9EABED886C15930AE3"><enum>(III)</enum><header>Aggregate reported amount</header><text>The term <term>aggregate reported amount</term> means the aggregate amount of dividends reported by the company under clause (i) as capital gain dividends for the taxable year (including capital gain dividends paid after the close of the taxable year described in section 855).</text></subclause> <subclause id="H0E6D896118D34994959D1676BDE31617"><enum>(IV)</enum><header>Post-December reported amount</header><text>The term <term>post-December reported amount</term> means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.</text></subclause></clause> <clause commented="no" id="HC0E1DE78493743F7B3EFB4612EF39113"><enum>(v)</enum><header>Adjustment for determinations</header><text>If there is an increase in the excess described in subparagraph (A) for the taxable year which results from a determination (as defined in section 860(e)), the company may, subject to the limitations of this subparagraph, increase the amount of capital gain dividends reported under clause (i).</text></clause> <clause id="H76005559B3804297949AE0FC781DDF9A"><enum>(vi)</enum><header>Special rule for losses late in the calendar year</header><text display-inline="yes-display-inline">For special rule for certain losses after October 31, see paragraph (8).</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H3518B4B6BAE14EB789228AC87F2CB270"><enum>(2)</enum><header>Conforming amendment</header><text>Subparagraph (B) of section 860(f)(2) is amended by inserting <quote>or reported (as the case may be)</quote> after <quote>designated</quote>.</text></paragraph></subsection> <subsection id="H66F8A910B0784A9F81D6E6850DC07960"><enum>(b)</enum><header>Exempt-Interest dividends</header><text>Subparagraph (A) of section 852(b)(5) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="HDBB1C9FB03EA4B44890230DA1745C3CD" style="OLC"> <subparagraph id="H01F107E6213147CA9EF548146EB11C77"><enum>(A)</enum><header>Definition of exempt-interest dividend</header> <clause display-inline="no-display-inline" id="H830202189B9B4A81A39E61126517ADAB"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in clause (ii), an exempt-interest dividend is any dividend or part thereof (other than a capital gain dividend) paid by a regulated investment company and reported by the company as an exempt-interest dividend in written statements furnished to its shareholders.</text></clause> <clause id="HFADEB2AD03BF499AB74F92DCE47808E9"><enum>(ii)</enum><header>Excess reported amounts</header><text>If the aggregate reported amount with respect to the company for any taxable year exceeds the exempt interest of the company for such taxable year, an exempt-interest dividend is the excess of—</text> <subclause id="H542762F8F3DE4BDAB6B72E66835E78F7"><enum>(I)</enum><text>the reported exempt-interest dividend amount, over</text></subclause> <subclause id="HDEC0450A78A9416493C540D43A62AA49"><enum>(II)</enum><text>the excess reported amount which is allocable to such reported exempt-interest dividend amount.</text></subclause></clause> <clause id="HD98D888FC6FB4616858C1D20CEEC2B54"><enum>(iii)</enum><header>Allocation of excess reported amount</header> <subclause id="H557B83AE86444AD98932A06AD0449D9D"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported exempt-interest dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported exempt-interest dividend amount bears to the aggregate reported amount.</text></subclause> <subclause id="HAADC77B0812E48EE904AF182CE520D55"><enum>(II)</enum><header>Special rule for noncalendar year taxpayers</header><text>In the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting <quote>post-December reported amount</quote> for <quote>aggregate reported amount</quote> and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.</text></subclause></clause> <clause id="H39694642438C407B82E0231111FC7F6B"><enum>(iv)</enum><header>Definitions</header><text>For purposes of this subparagraph—</text> <subclause display-inline="no-display-inline" id="H8421147E7DA94E7A89453BC150BC2FDF"><enum>(I)</enum><header>Reported exempt-interest dividend amount</header><text>The term <quote>reported exempt-interest dividend amount</quote> means the amount reported to its shareholders under clause (i) as an exempt-interest dividend.</text></subclause> <subclause id="H8B3472461F584223B91369AD61C9BC6C"><enum>(II)</enum><header>Excess reported amount</header><text>The term <term>excess reported amount</term> means the excess of the aggregate reported amount over the exempt interest of the company for the taxable year.</text></subclause> <subclause id="H104E25478E794BB2AED06D4711FADD76"><enum>(III)</enum><header>Aggregate reported amount</header><text>The term <term>aggregate reported amount</term> means the aggregate amount of dividends reported by the company under clause (i) as exempt-interest dividends for the taxable year (including exempt-interest dividends paid after the close of the taxable year described in section 855).</text></subclause> <subclause id="H3D830684D04F4FFB89C36F378DB768AC"><enum>(IV)</enum><header>Post-December reported amount</header><text>The term <term>post-December reported amount</term> means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.</text></subclause> <subclause id="HA5051083D2A9434C8D47D3769467D3D7"><enum>(V)</enum><header>Exempt interest</header><text>The term <term>exempt interest</term> means, with respect to any regulated investment company, the excess of the amount of interest excludable from gross income under section 103(a) over the amounts disallowed as deductions under sections 265 and 171(a)(2).</text></subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H613DF81A3A264C7D802B3D645E0F6BD8"><enum>(c)</enum><header>Foreign tax credits</header> <paragraph id="H2C335C244B1F4064A6027090848C8D9A"><enum>(1)</enum><header>In general</header><text>Subsection (c) of section 853 is amended—</text> <subparagraph id="H2E02EEBF9D97406C91F2A5BAE321FA5D"><enum>(A)</enum><text>by striking <quote>so designated by the company in a written notice mailed to its shareholders not later than 60 days after the close of the taxable year</quote> and inserting <quote>so reported by the company in a written statement furnished to such shareholder</quote>, and</text></subparagraph> <subparagraph id="H4B2E762855734D2D86B874AADC8B0099"><enum>(B)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">Notice</header-in-text></quote> in the heading and inserting <quote><header-in-text level="subsection" style="OLC">Statements</header-in-text></quote>.</text></subparagraph></paragraph> <paragraph id="H7F4160DFA7F54884811D6A069B62E209"><enum>(2)</enum><header>Conforming amendments</header><text>Subsection (d) of section 853 is amended—</text> <subparagraph id="HF839C16C594E4D8B97F0710AD65F644A"><enum>(A)</enum><text>by striking <quote>and the notice to shareholders required by subsection (c)</quote> in the text thereof, and</text></subparagraph> <subparagraph id="HB6B08115C8054DC2B45424AA5A497788"><enum>(B)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">and notifying shareholders</header-in-text></quote> in the heading thereof.</text></subparagraph></paragraph></subsection> <subsection id="H1E8FAEF3E2CB4E58BF3C7B7E310F28B5"><enum>(d)</enum><header>Credits for tax credit bonds</header> <paragraph id="HABFC9B72DAEA4ACFBC3EEBA630D944C3"><enum>(1)</enum><header>In general</header><text>Subsection (c) of section 853A is amended—</text> <subparagraph id="HDF43DFEBD57F4E17937382709E428E62"><enum>(A)</enum><text>by striking <quote>so designated by the regulated investment company in a written notice mailed to its shareholders not later than 60 days after the close of its taxable year</quote> and inserting <quote>so reported by the regulated investment company in a written statement furnished to such shareholder</quote>, and</text></subparagraph> <subparagraph id="H15C8EC69D77D4DD8A7689A4B239C4C94"><enum>(B)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">Notice</header-in-text></quote> in the heading and inserting <quote><header-in-text level="subsection" style="OLC">Statements</header-in-text></quote>.</text></subparagraph></paragraph> <paragraph id="H6BF3F3AA46474F5690A4FF0BF5398688"><enum>(2)</enum><header>Conforming amendments</header><text>Subsection (d) of section 853A is amended—</text> <subparagraph id="HD7A7CE3CD229481C9B0D8FE221CEB07E"><enum>(A)</enum><text>by striking <quote>and the notice to shareholders required by subsection (c)</quote> in the text thereof, and</text></subparagraph> <subparagraph id="H859E15236C61431BB859BF00448894B2"><enum>(B)</enum><text>by striking <quote><header-in-text level="subsection" style="OLC">and notifying shareholders</header-in-text></quote> in the heading thereof.</text></subparagraph></paragraph></subsection> <subsection id="HD97FF5EBFCE84FE399FE42FE7DCBDE6C"><enum>(e)</enum><header>Dividend received deduction, etc</header> <paragraph id="H30839F9F519F478C92FD93C7593C77FD"><enum>(1)</enum><header>In general</header><text>Paragraph (1) of section 854(b) is amended—</text> <subparagraph id="HEB45297ADBE54515917A2569F73890E2"><enum>(A)</enum><text>by striking <quote>designated under this subparagraph by the regulated investment company</quote> in subparagraph (A) and inserting <quote>reported by the regulated investment company as eligible for such deduction in written statements furnished to its shareholders</quote>,</text></subparagraph> <subparagraph id="H95731EB984E44D0B88C7D919276D7606"><enum>(B)</enum><text>by striking <quote>designated by the regulated investment company</quote> in subparagraph (B)(i) and inserting <quote>reported by the regulated investment company as qualified dividend income in written statements furnished to its shareholders</quote>,</text></subparagraph> <subparagraph commented="no" id="H4939111E0A1D468596EE1BEFE62E4D6F"><enum>(C)</enum><text>by striking <quote>designated</quote> in subparagraph (C)(i) and inserting <quote>reported</quote>, and</text></subparagraph> <subparagraph commented="no" id="H6092FC47930B4B56BEDEEBD615C596CF"><enum>(D)</enum><text>by striking <quote>designated</quote> in subparagraph (C)(ii) and inserting <quote>reported</quote>.</text></subparagraph></paragraph> <paragraph id="H57186CB025934029B47428C7820078E2"><enum>(2)</enum><header>Conforming amendments</header><text>Subsection (b) of section 854 is amended by striking paragraph (2) and by redesignating paragraphs (3), (4), and (5), as paragraphs (2), (3), and (4), respectively.</text></paragraph></subsection> <subsection id="H7999AD5FD4534B7081ED34FC2BDA6C3F"><enum>(f)</enum><header>Dividends paid to certain foreign persons</header> <paragraph id="H221306F52C7F48A9B4233C9E74C605C8"><enum>(1)</enum><header>Interest-related dividends</header><text>Subparagraph (C) of section 871(k)(1) is amended by striking all that precedes <quote>any taxable year of the company beginning</quote> and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="H6761F69B1BFF48A097785A36F703B56C" style="OLC"> <subparagraph id="H40E34B496ACE4D89A6B865EC3E64FB80"><enum>(C)</enum><header>Interest-related dividend</header><text display-inline="yes-display-inline">For purposes of this paragraph—</text> <clause display-inline="no-display-inline" id="HAC9F303419894AC68C8718F694F0E7B6"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in clause (ii), an interest related dividend is any dividend, or part thereof, which is reported by the company as an interest related dividend in written statements furnished to its shareholders.</text></clause> <clause id="H5F13B8311E89483D857FFBDC006DC1EC"><enum>(ii)</enum><header>Excess reported amounts</header><text display-inline="yes-display-inline">If the aggregate reported amount with respect to the company for any taxable year exceeds the qualified net interest income of the company for such taxable year, an interest related dividend is the excess of—</text> <subclause id="H007C692908674DDCB6CF90843662D46C"><enum>(I)</enum><text>the reported interest related dividend amount, over</text></subclause> <subclause id="H8C94B7FAD6E841DD988EEDD44C0A73C2"><enum>(II)</enum><text>the excess reported amount which is allocable to such reported interest related dividend amount.</text></subclause></clause> <clause id="H0AD40469A66D4B6AB3FFFD22DE1F020E"><enum>(iii)</enum><header>Allocation of excess reported amount</header> <subclause id="H69048D53A09A4CD2B33089AF1D21ACDC"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported interest related dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported interest related dividend amount bears to the aggregate reported amount.</text></subclause> <subclause id="H0864BBEF5C28410F9B5F14568B6ECBC9"><enum>(II)</enum><header>Special rule for noncalendar year taxpayers</header><text>In the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting <quote>post-December reported amount</quote> for <quote>aggregate reported amount</quote> and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.</text></subclause></clause> <clause id="H7DA4BB65E6CF42889628EC0004A2207A"><enum>(iv)</enum><header>Definitions</header><text>For purposes of this subparagraph—</text> <subclause display-inline="no-display-inline" id="H442F5E92C49A481CACC224B33715076D"><enum>(I)</enum><header>Reported interest related dividend amount</header><text>The term <quote>reported interest related dividend amount</quote> means the amount reported to its shareholders under clause (i) as an interest related dividend.</text></subclause> <subclause id="HD982C4F834B7477DBF92BE43EB85B9DE"><enum>(II)</enum><header>Excess reported amount</header><text>The term <term>excess reported amount</term> means the excess of the aggregate reported amount over the qualified net interest income of the company for the taxable year.</text></subclause> <subclause id="H7D0C65C9A3F84C59BD365690922057CC"><enum>(III)</enum><header>Aggregate reported amount</header><text>The term <term>aggregate reported amount</term> means the aggregate amount of dividends reported by the company under clause (i) as interest related dividends for the taxable year (including interest related dividends paid after the close of the taxable year described in section 855).</text></subclause> <subclause id="H5FFE62D33AF44B4282246F1AE7FC0247"><enum>(IV)</enum><header>Post-December reported amount</header><text>The term <term>post-December reported amount</term> means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.</text></subclause></clause> <clause id="H66235969D8834F74B54BB164820669A8"><enum>(v)</enum><header>Termination</header><text>The term <term>interest related dividend</term> shall not include any dividend with respect to</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H1FB478A5688C43898FDECEA1BCDEDF54"><enum>(2)</enum><header>Short-term capital gain dividends</header><text>Subparagraph (C) of section 871(k)(2) is amended by striking all that precedes <quote>any taxable year of the company beginning</quote> and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="HFF097525663C480AA7D1BB65089FA185" style="OLC"> <subparagraph id="H0F4439A56B6F4BD3900D76129703E9DA"><enum>(C)</enum><header>Short-term capital gain dividend</header><text display-inline="yes-display-inline">For purposes of this paragraph—</text> <clause display-inline="no-display-inline" id="H54678E5662504ADF9DC76F8FF9D85432"><enum>(i)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in clause (ii), the term <quote>short-term capital gain dividend</quote> means any dividend, or part thereof, which is reported by the company as a short-term capital gain dividend in written statements furnished to its shareholders.</text></clause> <clause id="H4F38300EE37A49AAB4C7D7F7B3B8D1B2"><enum>(ii)</enum><header>Excess reported amounts</header><text display-inline="yes-display-inline">If the aggregate reported amount with respect to the company for any taxable year exceeds the qualified short-term gain of the company for such taxable year, the term <quote>short-term capital gain dividend</quote> means the excess of—</text> <subclause id="H548461A3146D4472A29D15A3CABE01B3"><enum>(I)</enum><text>the reported short-term capital gain dividend amount, over</text></subclause> <subclause id="H0638082531E44D96B09E80CC9F0FA396"><enum>(II)</enum><text>the excess reported amount which is allocable to such reported short-term capital gain dividend amount.</text></subclause></clause> <clause id="HC63F317D34DA4E509E3E092C8FC176BC"><enum>(iii)</enum><header>Allocation of excess reported amount</header> <subclause id="H62399F3A879448EAA60FC6F91DB7CDA7"><enum>(I)</enum><header>In general</header><text display-inline="yes-display-inline">Except as provided in subclause (II), the excess reported amount (if any) which is allocable to the reported short-term capital gain dividend amount is that portion of the excess reported amount which bears the same ratio to the excess reported amount as the reported short-term capital gain dividend amount bears to the aggregate reported amount.</text></subclause> <subclause id="H9DEE05894E5D4B868F9F99194E476D9F"><enum>(II)</enum><header>Special rule for noncalendar year taxpayers</header><text>In the case of any taxable year which does not begin and end in the same calendar year, if the post-December reported amount equals or exceeds the excess reported amount for such taxable year, subclause (I) shall be applied by substituting <quote>post-December reported amount</quote> for <quote>aggregate reported amount</quote> and no excess reported amount shall be allocated to any dividend paid on or before December 31 of such taxable year.</text></subclause></clause> <clause id="H9C524143012A40FBB4E6BAD0B253C2D1"><enum>(iv)</enum><header>Definitions</header><text>For purposes of this subparagraph—</text> <subclause display-inline="no-display-inline" id="H778AF5C3275B4D15887F2BEF9F4B5032"><enum>(I)</enum><header>Reported short-term capital gain dividend amount</header><text>The term <quote>reported short-term capital gain dividend amount</quote> means the amount reported to its shareholders under clause (i) as a short-term capital gain dividend.</text></subclause> <subclause id="HF1EFD61C4B5E41F6B1A67A127D80C8EA"><enum>(II)</enum><header>Excess reported amount</header><text>The term <term>excess reported amount</term> means the excess of the aggregate reported amount over the qualified short-term gain of the company for the taxable year.</text></subclause> <subclause id="HB1B11EFD903A418BB1A19B3E1650DE3E"><enum>(III)</enum><header>Aggregate reported amount</header><text>The term <term>aggregate reported amount</term> means the aggregate amount of dividends reported by the company under clause (i) as short-term capital gain dividends for the taxable year (including short-term capital gain dividends paid after the close of the taxable year described in section 855).</text></subclause> <subclause id="HFFD53F1521E14C70B2379D0F636DE73A"><enum>(IV)</enum><header>Post-December reported amount</header><text>The term <term>post-December reported amount</term> means the aggregate reported amount determined by taking into account only dividends paid after December 31 of the taxable year.</text></subclause></clause> <clause id="HDC6261C168BF458AB9D777530F6A4E07"><enum>(v)</enum><header>Termination</header><text>The term <term>short-term capital gain dividend</term> shall not include any dividend with respect to</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HC84A3D9EAEC147409C01244BB0CC0D6E"><enum>(g)</enum><header>Conforming amendments</header><text>Section 855 is amended—</text> <paragraph id="H3E1FA5648E5E42E4B6C40CBF799D2719"><enum>(1)</enum><text>by striking subsection (c) and redesignating subsection (d) as subsection (c), and</text></paragraph> <paragraph id="H341C2F8DD952402A9554B09E256A869D"><enum>(2)</enum><text>by striking <quote>, (c) and (d)</quote> in subsection (a) and inserting <quote>and (c)</quote>.</text></paragraph></subsection> <subsection id="H5D668C5A8062428C87650715738F841B"><enum>(h)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection> <subsection id="H88C9ECCD283E45A9BB944606687F128B"><enum>(i)</enum><header>Application of JGTRRA sunset</header><text>Section 303 of the Jobs and Growth Tax Relief Reconciliation Act of 2003 shall apply to the amendments made by subparagraphs (B) and (D) of subsection (e)(1) to the same extent and in the same manner as section 303 of such Act applies to the amendments made by section 302 of such Act.</text></subsection></section> <section id="HBA12718349C64A32BFB23D94F9D49B72"><enum>302.</enum><header>Earnings and profits of regulated investment companies</header> <subsection id="H5A945CB95C534C3ABF920B87E6FB6118"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (1) of section 852(c) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="HCA6A578D455B44B1A473C96173CC947C" style="OLC"> <paragraph id="HCDB5464AB815476685B48471A264C322"><enum>(1)</enum><header>Treatment of nondeductible items</header> <subparagraph id="H8B306E8FB125412CA62F2EBE0ECC1644"><enum>(A)</enum><header>Net capital loss</header><text display-inline="yes-display-inline">If a regulated investment company has a net capital loss for any taxable year—</text> <clause id="H41153037B1B2498EB62669595F60C7CC"><enum>(i)</enum><text>such net capital loss shall not be taken into account for purposes of determining the company’s earnings and profits, and</text></clause> <clause id="H2F4D35EF240C425E91BE12709C44AF1E"><enum>(ii)</enum><text>any capital loss arising on the first day of the next taxable year by reason of clause (ii) or (iii) of section 1212(a)(3)(A) shall be treated as so arising for purposes of determining earnings and profits.</text></clause></subparagraph> <subparagraph id="HCB001A6EAFE849C1AA80BBD65029A6D1"><enum>(B)</enum><header>Other nondeductible items</header> <clause id="H37066CDB4CA849F8BF7F8F4D8262835A"><enum>(i)</enum><header>In general</header><text>The earnings and profits of a regulated investment company for any taxable year (but not its accumulated earnings and profits) shall not be reduced by any amount which is not allowable as a deduction (other than by reason of section 265 or 171(a)(2)) in computing its taxable income for such taxable year.</text></clause> <clause id="H5546DD56ADCE4ABBA11661F1CE132B52"><enum>(ii)</enum><header>Coordination with treatment of net capital losses</header><text>Clause (i) shall not apply to a net capital loss to which subparagraph (A) applies.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H303F50A3F363464BB304C22A373886FD"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="HC29D1B26816C434C886E84BDB00CDEEB"><enum>(1)</enum><text display-inline="yes-display-inline">Subsection (c) of section 852 is amended by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HB61AE63B459A46638DCE9E3697DBFA53" style="OLC"> <paragraph id="H2181FC2F6AA14EF8B4F15DE4B00A7E95"><enum>(4)</enum><header>Regulated investment company</header><text display-inline="yes-display-inline">For purposes of this subsection, the term <quote>regulated investment company</quote> includes a domestic corporation which is a regulated investment company determined without regard to the requirements of subsection (a).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="HD556C5BBB3524FAC8997F5C7A9BB8FFC"><enum>(2)</enum><text>Paragraphs (1)(A) and (2)(A) of section 871(k) are each amended by inserting <quote>which meets the requirements of section 852(a) for the taxable year with respect to which the dividend is paid</quote> before the period at the end.</text></paragraph></subsection> <subsection id="H16588729326745749399DB7ED4B3765A"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section commented="no" id="HD33EA8828D514FD8B9F8B7E3C93F3246"><enum>303.</enum><header>Pass-thru of exempt-interest dividends and foreign tax credits in fund of funds structure</header> <subsection commented="no" id="HB3298F268B904A8D9094ED723F86C139"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Section 852 is amended by adding at the end the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H99C20205FDF04878B26E7ED44CD290DF" style="OLC"> <subsection commented="no" id="H7D10C0A945E84B868BC717438388EA62"><enum>(g)</enum><header>Special rules for fund of funds</header> <paragraph commented="no" id="H3A2E3F8D6B5446BA8F67FB63A157B293"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of a qualified fund of funds—</text> <subparagraph commented="no" id="H613689B426E0497F9D2DF37AD5F06A73"><enum>(A)</enum><text display-inline="yes-display-inline">such fund shall be qualified to pay exempt-interest dividends to its shareholders without regard to whether such fund satisfies the requirements of the first sentence of subsection (b)(5), and</text></subparagraph> <subparagraph commented="no" id="H040902E220E04C85B14F313745B3BB28"><enum>(B)</enum><text>such fund may elect the application of section 853 (relating to foreign tax credit allowed to shareholders) without regard to the requirement of subsection (a)(1) thereof.</text></subparagraph></paragraph> <paragraph commented="no" id="H76CBD4E516B84F3A9279261B5C1AA3EB"><enum>(2)</enum><header>Qualified fund of funds</header><text>For purposes of this subsection, the term <term>qualified fund of funds</term> means a regulated investment company if (at the close of each quarter of the taxable year) at least 50 percent of the value of its total assets is represented by interests in other regulated investment companies.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection commented="no" id="HE72520220E734357A8AA3F3972FDC9D6"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H81AA799D3CC04184892C6CEF5BB7AFFD"><enum>304.</enum><header>Modification of rules for spillover dividends of regulated investment companies</header> <subsection id="HB33D6EF7EAC9460B896F94DE6EA81A2A"><enum>(a)</enum><header>Deadline for declaration of dividend</header><text display-inline="yes-display-inline">Paragraph (1) of section 855(a) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H38EC35B6A3484C61A79FBC3BB99240F7" style="OLC"> <paragraph id="HF6D88EE49EFC42E49AE7B3B3A6E7A9B9"><enum>(1)</enum><text display-inline="yes-display-inline">declares a dividend before the later of—</text> <subparagraph id="H423B0E0E6FAF459E9CD6D124B20A6A5F"><enum>(A)</enum><text>the 15th day of the 9th month following the close of the taxable year, or</text></subparagraph> <subparagraph id="H9D58C8027CA34700BE887624238A3B2D"><enum>(B)</enum><text>in the case of an extension of time for filing the company’s return for the taxable year, the due date for filing such return taking into account such extension, and</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H87DA085B55854A42BCF538C80E5F194D"><enum>(b)</enum><header>Deadline for distribution of dividend</header><text display-inline="yes-display-inline">Paragraph (2) of section 855(a) is amended by striking <quote>the first regular dividend payment</quote> and inserting <quote>the first dividend payment of the same type of dividend</quote>.</text></subsection> <subsection id="H22DCC30362EE4583BD2C7E3AF6AD511A"><enum>(c)</enum><header>Short-term capital gain</header><text>Subsection (a) of section 855 is amended by adding at the end the following: <quote>For purposes of paragraph (2), a dividend attributable to any short-term capital gain with respect to which a notice is required under the Investment Company Act of 1940 shall be treated as the same type of dividend as a capital gain dividend.</quote>.</text></subsection> <subsection id="HDF9E8AE70F0F45589552E066209F1AD3"><enum>(d)</enum><header>Effective date</header><text>The amendments made by this section shall apply to distributions in taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section commented="no" id="H7A39298AED82407CB062DB29A3B8EBA2"><enum>305.</enum><header>Return of capital distributions of regulated investment companies</header> <subsection id="H5B1B2C983CEA46449DA003804081D9B8"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (b) of section 316 is amended by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HF4F15508C0084A9ABB32210A78340234" style="OLC"> <paragraph id="H5F8BE8EB32EB483BBBAE93A90092BA18"><enum>(4)</enum><header>Certain distributions by regulated investment companies in excess of earnings and profits</header><text display-inline="yes-display-inline">In the case of a regulated investment company that has a taxable year other than a calendar year, if the distributions by the company with respect to any class of stock of such company for the taxable year exceed the company’s current and accumulated earnings and profits which may be used for the payment of dividends on such class of stock, the company’s current earnings and profits shall, for purposes of subsection (a), be allocated first to distributions with respect to such class of stock made during the portion of the taxable year which precedes January 1.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H1A41085B995F4C0ABA86E318002C563B"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to distributions made in taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section commented="no" id="H26B143359C334FCB9F9D444AED5F09B3"><enum>306.</enum><header>Distributions in redemption of stock of a regulated investment company</header> <subsection id="HF24CF1A1B9C64BEAA84AE8E7A7259641"><enum>(a)</enum><header>Redemptions treated as exchanges</header> <paragraph id="H32CC8005A4BA4A72B2EE902C2DEA4B83"><enum>(1)</enum><header>In general</header><text>Subsection (b) of section 302 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="H7D40AE0E59F4407EBCF02E7B29C2444A" style="OLC"> <paragraph commented="no" id="H3FE11724E8A34145994DFBBA67B53EAD"><enum>(5)</enum><header>Redemptions by certain regulated investment companies</header><text display-inline="yes-display-inline">Except to the extent provided in regulations prescribed by the Secretary, subsection (a) shall apply to any distribution in redemption of stock of a publicly offered regulated investment company (within the meaning of section 67(c)(2)(B)) if—</text> <subparagraph commented="no" id="H002E55232EB24538B972732D63A26774"><enum>(A)</enum><text>such redemption is upon the demand of the stockholder, and</text></subparagraph> <subparagraph commented="no" id="HE05F3F01D8574E38AE25D991DA8F6760"><enum>(B)</enum><text>such company issues only stock which is redeemable upon the demand of the stockholder.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph> <paragraph id="H1EBE6F6FC19349AE8CAA960F0096B6E5"><enum>(2)</enum><header>Conforming amendment</header><text>Subsection (a) of section 302 is amended by striking <quote>or (4)</quote> and inserting <quote>(4), or (5)</quote>.</text></paragraph></subsection> <subsection id="HCB02F19D56434824A0D50F2A503A1533"><enum>(b)</enum><header>Losses on redemptions not disallowed for fund-of-funds regulated investment companies</header><text>Paragraph (3) of section 267(f) is amended by adding at the end the following new subparagraph:</text> <quoted-block display-inline="no-display-inline" id="H4771C6553EF64B6898EFCEEF10947F85" style="OLC"> <subparagraph id="H117A059F1CCC4681B4EB96A5EE079F17"><enum>(D)</enum><header>Redemptions by fund-of-funds regulated investment companies</header><text display-inline="yes-display-inline">Except to the extent provided in regulations prescribed by the Secretary, subsection (a)(1) shall not apply to any distribution in redemption of stock of a regulated investment company if—</text> <clause id="H3A8763807340418D90E2F645D6B30370"><enum>(i)</enum><text>such company issues only stock which is redeemable upon the demand of the stockholder, and</text></clause> <clause id="HEAF752507C4B4FF1BC4D998D96EC584E"><enum>(ii)</enum><text>such redemption is upon the demand of another regulated investment company.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H109CB3C59CE745B9AB985BD36CAAD215"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to distributions after the date of the enactment of this Act.</text></subsection></section> <section id="H1217937CF6704C5FA29133FE75C74737"><enum>307.</enum><header>Repeal of preferential dividend rule for publicly offered regulated investment companies</header> <subsection id="HE165F37AC9B347EFBA5BFBB88393FFD4"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (c) of section 562 is amended by striking <quote>The amount</quote> and inserting <quote>Except in the case of a publicly offered regulated investment company (as defined in section 67(c)(2)(B)), the amount</quote>.</text></subsection> <subsection id="H87218E55E27E4488ACFDE00448DF74F3"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">Section 562(c) is amended by inserting <quote>(other than a publicly offered regulated investment company (as so defined))</quote> after <quote>regulated investment company</quote> in the second sentence thereof.</text></subsection> <subsection id="H339A529169D244D785D2D6B2E70746FB"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to distributions in taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H683CC3BDF1624217843D83D441E5BB12" section-type="subsequent-section"><enum>308.</enum><header>Elective deferral of certain late-year losses of regulated investment companies</header> <subsection id="HED433D7AD328463B855E45939062FC25"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Paragraph (8) of section 852(b) is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H33DDC367BDF44926B1FDB197B3E76CF2" style="OLC"> <paragraph id="H5EB5D170B3B14A358CF07E201100DB6A"><enum>(8)</enum><header>Elective deferral of certain late-year losses</header> <subparagraph id="H06A174C897E44A178D7D8D98C1C27566"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Except as otherwise provided by the Secretary, a regulated investment company may elect for any taxable year to treat any portion of any qualified late-year loss for such taxable year as arising on the first day of the following taxable year for purposes of this title.</text></subparagraph> <subparagraph display-inline="no-display-inline" id="H6D1B992DFDFD4D78827CD5D73813D951"><enum>(B)</enum><header>Qualified late-year loss</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>qualified late-year loss</term> means—</text> <clause id="HC15AE5970B7D4447AC289A40D1E6F305"><enum>(i)</enum><text>any post-October capital loss, and</text></clause> <clause id="H5596063244A14F25906A418B35D6D1CC"><enum>(ii)</enum><text>any late-year ordinary loss.</text></clause></subparagraph> <subparagraph id="H2FAB9904947F4E1B95C8FEE6A65432BF"><enum>(C)</enum><header>Post-October capital loss</header><text display-inline="yes-display-inline">For purposes of this paragraph, the term <term>post-October capital loss</term> means the greatest of—</text> <clause id="H04A862E1B3194EDE98EAFFF399550F26"><enum>(i)</enum><text display-inline="yes-display-inline">the net capital loss attributable to the portion of the taxable year after October 31,</text></clause> <clause id="H0A5DD30D3AC04E63A76A648BE13D398B"><enum>(ii)</enum><text>the net long-term capital loss attributable to such portion of the taxable year, or</text></clause> <clause id="H11FF420358004B11B7A31502C542E36C"><enum>(iii)</enum><text>the net short-term capital loss attributable to such portion of the taxable year.</text></clause></subparagraph> <subparagraph id="H91C748F1E15E4DCA9734C97E1F0BB1F6"><enum>(D)</enum><header>Late-year ordinary loss</header><text>For purposes of this paragraph, the term <term>late-year ordinary loss</term> means the excess (if any) of—</text> <clause id="H8865BDB472474E17A3A5809073FEDD6F"><enum>(i)</enum><text display-inline="yes-display-inline">the sum of—</text> <subclause id="H30F6F8F5B5B8410BACDE4246BF724F84"><enum>(I)</enum><text>the specified losses (as defined in section 4982(e)(5)(B)(ii)) attributable to the portion of the taxable year after October 31, plus</text></subclause> <subclause id="H5229687B63784EBD9C0A31878611BE8C"><enum>(II)</enum><text>the ordinary losses not described in subclause (I) attributable to the portion of the taxable year after December 31, over</text></subclause></clause> <clause id="HE69B752488A24311856A51914F4AB092"><enum>(ii)</enum><text>the sum of—</text> <subclause id="HF73506269686412DBE03524776062536"><enum>(I)</enum><text display-inline="yes-display-inline">the specified gains (as defined in section 4982(e)(5)(B)(i)) attributable to the portion of the taxable year after October 31, plus</text></subclause> <subclause id="H226F56907292492685D5A49B20DE1845"><enum>(II)</enum><text>the ordinary income not described in subclause (I) attributable to the portion of the taxable year after December 31.</text></subclause></clause></subparagraph> <subparagraph id="H2694062EA3C141CA87A73CA89291075E"><enum>(E)</enum><header>Special rule for companies determining required capital gain distributions on taxable year basis</header><text>In the case of a company to which an election under section 4982(e)(4) applies—</text> <clause id="H227C2CDC252A436A9E0E9192C34AF30D"><enum>(i)</enum><text>if such company’s taxable year ends with the month of November, the amount of qualified late-year losses (if any) shall be computed without regard to any income, gain, or loss described in subparagraphs (C), (D)(i)(I), and (D)(ii)(I), and</text></clause> <clause id="HCBA56F8F09F4436E9E082D753DE1E26A"><enum>(ii)</enum><text>if such company’s taxable year ends with the month of December, subparagraph (A) shall not apply.</text></clause></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H3E8120042789459492DD63E2E8AA28A9"><enum>(b)</enum><header>Conforming amendments</header> <paragraph id="HC6B95ED0B8B64AE192D8D60AFA868440"><enum>(1)</enum><text>Subsection (b) of section 852 is amended by striking paragraph (10).</text></paragraph> <paragraph id="HB1BC1B656EBC45B8B6AA778D13F0C6E2"><enum>(2)</enum><text>Paragraph (2) of section 852(c) is amended by striking the first sentence and inserting the following: <quote>For purposes of applying this chapter to distributions made by a regulated investment company with respect to any calendar year, the earnings and profits of such company shall be determined without regard to any net capital loss attributable to the portion of the taxable year after October 31 and without regard to any late-year ordinary loss (as defined in subsection (b)(8)(D)).</quote></text></paragraph> <paragraph id="H5A7ACC7987C0480985E57215CD3956BE"><enum>(3)</enum><text>Subparagraph (D) of section 871(k)(2) is amended by striking the last two sentences and inserting the following: <quote>For purposes of this subparagraph, the net short-term capital gain of the regulated investment company shall be computed by treating any short-term capital gain dividend includible in gross income with respect to stock of another regulated investment company as a short-term capital gain.</quote>.</text></paragraph></subsection> <subsection display-inline="no-display-inline" id="HA8D084D121EC4234910A4572C8EE31B9"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="HA22A963FE7A343789C972E3F8E2C88D0"><enum>309.</enum><header>Exception to holding period requirement for certain regularly declared exempt-interest dividends</header> <subsection id="HCCF68A02F7CE439F8BE9A3C4658015DE"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (E) of section 852(b)(4) is amended by striking all that precedes <quote>In the case of a regulated investment company</quote> and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="H393AB52D20F3406D9ABACF4A7D85218D" style="OLC"> <subparagraph id="H604156F4CA1E4DB1BA276AA50EE89EBD"><enum>(E)</enum><header>Exception to holding period requirement for certain regularly declared exempt-interest dividends</header> <clause id="HA075F5BDBD8D4A889014FF7C8B14F45E"><enum>(i)</enum><header>Daily dividend companies</header><text display-inline="yes-display-inline">Except as otherwise provided by regulations, subparagraph (B) shall not apply with respect to a regular dividend paid by a regulated investment company which declares exempt-interest dividends on a daily basis in an amount equal to at least 90 percent of its net tax-exempt interest and distributes such dividends on a monthly or more frequent basis.</text></clause> <clause id="HECB8629CB67C45A4B4D59084ED1E799A"><enum>(ii)</enum><header>Authority to shorten required holding period with respect to other companies</header></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H2137CE3A36244DC29BD4CC437015320A"><enum>(b)</enum><header>Conforming amendment</header><text>Clause (ii) of section 852(b)(4)(E), as amended by subsection (a), is amended by inserting <quote>(other than a company described in clause (i))</quote> after <quote>regulated investment company</quote>.</text></subsection> <subsection id="H4FC5ECA24721434E99447A01F2C8A3FD"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to losses incurred on shares of stock for which the taxpayer’s holding period begins after the date of the enactment of this Act.</text></subsection></section> <enum>IV</enum><header>Modifications related to excise tax applicable to regulated investment companies</header> <section id="H35CF59BB72F6489DA9C96750372D2A4F"><enum>401.</enum><header>Excise tax exemption for certain regulated investment companies owned by tax exempt entities</header> <subsection commented="no" id="H6ADE86814E304771BD9349592DE09034"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (f) of section 4982 is amended—</text> <paragraph commented="no" id="H040A9CF416E245C1893269910573229E"><enum>(1)</enum><text>by striking <quote>either</quote> in the matter preceding paragraph (1),</text></paragraph> <paragraph commented="no" id="HF129236944DD46D5808AFA1354B931D4"><enum>(2)</enum><text>by striking <quote>or</quote> at the end of paragraph (1),</text></paragraph> <paragraph commented="no" id="HB1705EFB945B4DA19E1638E313E04BA6"><enum>(3)</enum><text>by striking the period at the end of paragraph (2), and</text></paragraph> <paragraph commented="no" id="HC45CA730FEAA45CCA816C2869281000C"><enum>(4)</enum><text>by inserting after paragraph (2) the following new paragraphs:</text> <quoted-block display-inline="no-display-inline" id="H2B176DB17AFE4029ABBAD2109FA4642E" style="OLC"> <paragraph commented="no" id="H2A41DD46CEE54DD4AB80554823823808"><enum>(3)</enum><text>any other tax-exempt entity whose ownership of beneficial interests in the company would not preclude the application of section 817(h)(4), or</text></paragraph> <paragraph id="HB8B48B95CD484EB8A1795CF8C76340DB"><enum>(4)</enum><text>another regulated investment company described in this subsection.</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection> <subsection id="HC99E063267F84E01A5700A8B6531F3D9"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H8D5FCD00575C44BE877282E329CD9808"><enum>402.</enum><header>Deferral of certain gains and losses of regulated investment companies for excise tax purposes</header> <subsection id="H0D128752A143474D8200DA06A39BF28B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (e) of section 4982 is amended by striking paragraphs (5) and (6) and inserting the following new paragraphs:</text> <quoted-block display-inline="no-display-inline" id="HE517FC5ED48D42A49F2EBF6B705E0863" style="OLC"> <paragraph display-inline="no-display-inline" id="HD84BF90CB23449F7962808952668987C"><enum>(5)</enum><header>Treatment of specified gains and losses after October 31 of calendar year</header> <subparagraph commented="no" id="HC8246738CB5A41EB925A68F7ECBEB490"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">Any specified gain or specified loss which (but for this paragraph) would be properly taken into account for the portion of the calendar year after October 31 shall be treated as arising on January 1 of the following calendar year.</text></subparagraph> <subparagraph id="HC0B5673AFAB74B7D8A4A252CA9F57657"><enum>(B)</enum><header>Specified gains and losses</header><text>For purposes of this paragraph—</text> <clause id="HD69FDFFA8495459580D1D3D63C1BABF2"><enum>(i)</enum><header>Specified gain</header><text>The term <term>specified gain</term> means ordinary gain from the sale, exchange, or other disposition of property (including the termination of a position with respect to such property). Such term shall include any foreign currency gain attributable to a section 988 transaction (within the meaning of section 988) and any amount includible in gross income under section 1296(a)(1).</text></clause> <clause id="HC7FDF5C11C7144B8A0D20E72343B186A"><enum>(ii)</enum><header>Specified loss</header><text display-inline="yes-display-inline">The term <term>specified loss</term> means ordinary loss from the sale, exchange, or other disposition of property (including the termination of a position with respect to such property). Such term shall include any foreign currency loss attributable to a section 988 transaction (within the meaning of section 988) and any amount allowable as a deduction under section 1296(a)(2).</text></clause></subparagraph> <subparagraph id="H84DCB29FF5874AF297448C5F0349D650"><enum>(C)</enum><header>Special rule for companies electing to use the taxable year</header><text>In the case of any company making an election under paragraph (4), subparagraph (A) shall be applied by substituting the last day of the company’s taxable year for October 31.</text></subparagraph></paragraph> <paragraph commented="no" id="HA5AAF119C1EF485DA2F5D661C0971C9F"><enum>(6)</enum><header>Treatment of mark to market gain</header> <subparagraph commented="no" id="H771C145F77EE4B21906BDA58F455EABA"><enum>(A)</enum><header>In general</header><text>For purposes of determining a regulated investment company’s ordinary income, notwithstanding paragraph (1)(C), each specified mark to market provision shall be applied as if such company’s taxable year ended on October 31. In the case of a company making an election under paragraph (4), the preceding sentence shall be applied by substituting the last day of the company’s taxable year for October 31.</text></subparagraph> <subparagraph commented="no" id="H669A3DB8234247AAB32BDECEB82CE070"><enum>(B)</enum><header>Specified mark to market provision</header><text>For purposes of this paragraph, the term <term>specified mark to market provision</term> means sections 1256 and 1296 and any other provision of this title (or regulations thereunder) which treats property as disposed of on the last day of the taxable year.</text></subparagraph></paragraph> <paragraph id="H4E819D5E5CBF44B1B552B17255D1E0D4"><enum>(7)</enum><header>Elective deferral of certain ordinary losses</header><text display-inline="yes-display-inline">Except as provided in regulations prescribed by the Secretary, in the case of a regulated investment company which has a taxable year other than the calendar year—</text> <subparagraph id="H9625016ECE8946588FA0D7E0D4767AA0"><enum>(A)</enum><text>such company may elect to determine its ordinary income for the calendar year without regard to any net ordinary loss (determined without regard to specified gains and losses taken into account under paragraph (5)) which is attributable to the portion of such calendar year which is after the beginning of the taxable year which begins in such calendar year, and</text></subparagraph> <subparagraph id="HB9FCB01D761C4B47BCEBF05752F06478"><enum>(B)</enum><text>any amount of net ordinary loss not taken into account for a calendar year by reason of subparagraph (A) shall be treated as arising on the 1st day of the following calendar year.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H7E44528742A04738A10F0779A24389F7"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="HEDA6CC2591504E74B1E517938F98CC40"><enum>403.</enum><header>Distributed amount for excise tax purposes determined on basis of taxes paid by regulated investment company</header> <subsection commented="no" id="H62907C57E22243F0B61228F3E8FF85FA"><enum>(a)</enum><header>In general</header><text>Subsection (c) of section 4982 is amended by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="H8AB494D0ECFE4899A07F036AEC32975B" style="OLC"> <paragraph commented="no" id="HF095C4A81D7F4CEAB751F3EF92BC18F6"><enum>(4)</enum><header>Special rule for estimated tax payments</header> <subparagraph commented="no" id="H0B85BB297DA7426AAE581C4A4CEF98F8"><enum>(A)</enum><header>In general</header><text>In the case of a regulated investment company which elects the application of this paragraph for any calendar year—</text> <clause commented="no" id="HD564B5CE2B3644DC8BCEDE3E456635C1"><enum>(i)</enum><text>the distributed amount with respect to such company for such calendar year shall be increased by the amount on which qualified estimated tax payments are made by such company during such calendar year, and</text></clause> <clause commented="no" id="H7131CB4131664583823840901842DC69"><enum>(ii)</enum><text>the distributed amount with respect to such company for the following calendar year shall be reduced by the amount of such increase.</text></clause></subparagraph> <subparagraph commented="no" id="H689B2C5CB5024D55A4A37C6BE2318395"><enum>(B)</enum><header>Qualified estimated tax payments</header><text>For purposes of this paragraph, the term <term>qualified estimated tax payments</term> means, with respect to any calendar year, payments of estimated tax of a tax described in paragraph (1)(B) for any taxable year which begins (but does not end) in such calendar year.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection> <subsection id="H67085ED531E24F67A644A2D0D4124634"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="HC27534BFC207425CA520C8F73AF419D2"><enum>404.</enum><header>Increase in required distribution of capital gain net income</header> <subsection id="H2BD64AC196754C4FA31F141F87C08CAF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (B) of section 4982(b)(1) is amended by striking <quote>98 percent</quote> and inserting <quote>98.2 percent</quote>.</text></subsection> <subsection id="HA52ED1BD380A4EB68E57EF34F1E9E9D9"><enum>(b)</enum><header>Effective date</header><text>The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act.</text></subsection></section> <enum>V</enum><header>Other provisions</header> <section id="H13418E6851F246BE89D6DC6063FD2750"><enum>501.</enum><header>Repeal of assessable penalty with respect to liability for tax of regulated investment companies</header> <subsection id="H4CF1611C165B4A38B78ECC77550EFADC"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Part I of subchapter B of chapter 68 is amended by striking section 6697 (and by striking the item relating to such section in the table of sections of such part).</text></subsection> <subsection id="HBF15B5F5CCC3441DA96874F8F8C25AEF"><enum>(b)</enum><header>Conforming amendment</header><text>Section 860 is amended by striking subsection (j).</text></subsection> <subsection id="HA733B1FA89F249CBBC6C1087490A851B"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.</text></subsection></section> <section id="H424B882BBAEF4D6EB21850DC61C71B6C"><enum>502.</enum><header>Modification of sales load basis deferral rule for regulated investment companies</header> <subsection id="H5B15C55F64C0450D96C8A341C9F5F0EF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subparagraph (C) of section 852(f)(1) is amended by striking <quote>subsequently acquires</quote> and inserting <quote>acquires, during the period beginning on the date of the disposition referred to in subparagraph (B) and ending on January 31 of the calendar year following the calendar year that includes the date of such disposition,</quote>.</text></subsection> <subsection id="H28D6F0C562CB421FB4F9E7C57A469C7F"><enum>(b)</enum><header>Effective date</header><text>The amendment made by this section shall apply to charges incurred in taxable years beginning after the date of the enactment of this Act.</text></subsection></section> Speaker of the House of Representatives.Vice President of the United States and President of the Senate.