[Congressional Record Volume 143, Number 28 (Thursday, March 6, 1997)]
[Senate]
[Pages S2021-S2025]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TV RATING SYSTEM LEGISLATION
Mr. COATS. Mr. President, this past Thursday the Senate Commerce
Committee held a hearing on the current television rating system. I
want to commend Senator McCain for calling that hearing. It was very
instructional for all of us. What was apparent from that hearing is the
near universal dissatisfaction with the current Hollywood rating
system, the need for immediate change, the utter failure of the
industry to understand what parents want in a rating system, and the
basic
[[Page S2022]]
responsibility that goes with using publicly owned broadcast spectrum.
Mr. President, we are beyond debate regarding the influence of
television programming on children, particularly the most vulnerable of
our children, growing up in single-parent homes or homes where the
demand of work keep parents away and children unsupervised for long
hours. This is, unfortunately, an increasing norm in our society.
It was a combination of these facts and the increasingly violent and
explicit nature of television programming that produced the ``V'' chip
legislation that passed last year and the demand for ratings that
empower parents with content information so that they can exercise
control over the type of television programming invading their
households and their children's minds that they believe is
inappropriate.
I call attention to the 1995 study of children age 10 to 16 conducted
by the Los Angeles polling firm of Fairbank, Maslin, Maulin &
Associates. In that poll, one-third of the children stated they would
like to try what they see others doing on television; two-thirds stated
that their peers are influenced by what they see on TV; 65 percent said
programming like the Simpsons encouraged them to disrespect their
parents; and an alarming 62 percent said that sex portrayed on
television influences kids to have sex when they are too young. These
are the results of the study of children 10 to 16. These are their
responses to the questions that were asked by the poll.
Upon hearing the results of this poll, entertainer Steve Allen told
editorialist Cal Thomas, ``My first reaction is that we should take
this information and beat (network TV executives) over the head with
it.'' I think some of last week's hearing, for those who tuned in and
those who were there, may have had the same effect, because there was
universal, near universal, dissatisfaction with the efforts, lack of
effort, made by the broadcasters, Hollywood producers and others to
address some of these fundamental questions. That was a bipartisan
response not confined to any one particular party.
Unfortunately, the system offered by the television industry to
address this is critically flawed. There are two fatal problems with
the system. First is the fact that the system does not provide program-
specific, content-based information. This is the critical point.
The Hollywood ratings system adopted by the television industry
essentially hides the true content of programs behind a generic rating
that suggests to parents what may be in a program--I say what ``may
be'' in a program, not what actually is in a program. Take the TV
``PG'' rating, which 61 percent of current television programs receive.
In a 52-word explanation of this rating, it is stated: ``This program
may contain infrequent coarse language, limited violence, some
suggestive dialog and situations.''
Mr. President, I suggest that telling a parent what a program ``may''
include does not tell them very much. I ask, what would be so
difficult, what is so hard about simply substituting the word ``does''
for the word ``may.'' The program ``does'' contain infrequent coarse
language. The program ``does'' contain limited violence. This program
``does'' contain some suggestive dialog and situations. In addition,
why not provide parents with an audible explanation of content just
prior to airing the programming and stating the information clearly and
prominently on the screen.
The second fatal flaw in the current system proposed by Hollywood and
adopted by the broadcasters is there is no standard format for how
ratings are arrived at. In other words, each station or channel uses
their own methods and priorities in assigning ratings. Fox uses one
method, NBC another and so on. What is recommended as a standardized
system to parents is, in fact, completely unique from station to
station, channel to channel. In other words, it a rating in search of a
meaning.
The Hollywood system designed by the Motion Producers Association
head Jack Valenti was created to avoid giving parents information on
the content of programs. I do not think you can come to any other
conclusion. It is so confusing, it is so imprecise, I think you have to
conclude that it was designed not to give specific information. Why?
Well, clearly, I think they were concerned about advertisers not
wanting to advertise on programs that included offensive language.
Ultimately, it is the parents who turn off the sets, or the sets that
are turned off because of the contents of programs, that will determine
where those advertising dollars flow.
Now, Mr. President, I want to make sure that we all understand that
we cannot and we should not be censors, but that our society depends on
informed choices. We need to provide informed information and informed
choices for parents. To do that requires information which the current
Hollywood-Valenti rating system refuses to give.
It had been my hope that the television industry would be responsive
to the public outcry against their age-based rating system. Polls
conducted in response to the industry proposal by the PTA/Institute for
Mental Health Initiatives demonstrated that 80 percent of parents
desire a content-based system and a Media Study Center poll found
similar results. Ask any parent, ask any parent what they need in order
to make a determination on what they think their children should watch,
and they say tell us what is in it. Do not give us some rating scheme
where we do not know what it relates to, that is not standardized, that
changes from station to station. Just tell us what is there.
Unfortunately, the industry has not simply ignored the American
public; it has defied them. Mr. Valenti, the architect and the
cheerleader for the current system, claims the system must be simple so
that parents can understand it. Must be simple? Parents can understand
it? The TV-Y rating requires a 47-word explanation; TV-Y7 requires 73
words to explain what it means; TV-14, 61 words. All of these ratings
explanations are riddled with ambiguity. The only thing easy to
understand about these ratings is who came up with them and why.
The system is not profamily, it is pro-Hollywood. It is designed to
protect the Hollywood production houses. It is designed to protect
advertisers who, confronted with content-specific ratings, would shun
programs that include explicit material.
Now, supposedly there was some miraculous coming together of
television executives and Hollywood for a commonsense rating of
programs. Well, I think there has been some confusion here in the
statement that they have refused to change, regardless of what the
public wants. Now, thankfully, under the pressure of the congressional
investigation, the congressional hearing, and the outpouring of outrage
and frustration and dissatisfaction and disgust with the current
system, there have been expressions that, yes, the industry is willing
to take another look at this. I hope they not only take another look,
but that they will do it quickly and do it effectively, because the
industry doesn't own the broadcast spectrum, the public owns the
broadcast spectrum. And because the public owns the spectrum, I think
it is reasonable to ask that those who use the spectrum be responsive
to the public's requests--again, not for censorship, but simply for
information so they can make decisions about what is appropriate and
not appropriate for their children to watch. Therefore, I think
combining the request for granting or renewal of a license to broadcast
on that spectrum is a reasonable thing to ask for in return for a
content-based, program-specific rating system. In other words, if you
want to use the public spectrum, if you have a responsibility--and the
responsibility is to provide parents with information.
I, therefore, am introducing legislation today that will ensure that
the changes the American people demand as a condition for license
renewal, for license granting, or for loan of spectrum for the
transition of digital broadcast--in return for that, we get broadcaster
consent to accurately label their programming. I don't create a
Government rating system. I simply want to put some information in the
hands of parents.
The spectrum that is going to be loaned to broadcasters for digital
transmission is extremely valuable. This resource also belongs to the
American public, a public that overwhelmingly supports a program-
specific, content-based rating system. The basic criteria for issuing a
broadcast license is service of the public good. If a
[[Page S2023]]
broadcaster can't comply with the basic will of the American people, by
accurately labeling the product they seek to provide, on the taxpayers'
spectrum, then I don't believe they deserve, nor should they receive,
the precious resource of broadcast spectrum.
Mr. President, we cannot use Government to force more family-friendly
programming--as much as sometimes I wish we could, given what we
currently see.
Mr. President, we can empower parents with information that they need
to guide their children's viewing habits. In doing so, we empower them
to send a message to the networks, and television advertisers to stop
the onslaught of the kind of programming that flows through our
television sets into the minds of our children.
Mr. President, in conclusion, let me just say that in this age where
it's harder and harder to protect children from information and from
behavior and from activities in our society that is damaging not only
to their bodies, but to their minds and souls, the parents need tools;
they are crying out for weapons and tools to fight back against this
onslaught of a hostile culture. They want to try to protect the
innocence of their children--even if just for a little while. I think
they have every right to demand the tool of accurate and responsible
television ratings in return for the use of the public broadcast
system.
My legislation would ensure this end. I hope my colleagues will join
me in support of this effort. With that, I send to the desk the
legislation designed to accomplish this very purpose.
______
By Mr. D'AMATO (for himself, Mr. Gramm, Mr. Sarbanes, and Mr.
Dodd):
S. 410. A bill to extend the effective date of the Investment
Advisers Supervision Coodination Act; to the Committee on Banking,
Housing, and Urban Affairs.
THE NATIONAL SECURITIES MARKETS IMPROVEMENT ACT OF 1997
Mr. D'AMATO. Mr. President, today, I introduce with Senator
Gramm, Senator Sarbanes, and Senator Dodd, a bill to extend for 90 days
the effective date of title III of the National Securities Markets
Improvement Act of 1997.
The Investment Advisers Supervision Coordination Act enacted as part
of the National Securities Market Improvement Act, divides the
regulation of the Nation's 22,500 registered investment advisers
between the SEC and State commissions. Under the new divided
jurisdiction, investment advisers entrusted with over $10 trillion in
customer funds, will be subject to better regulation and regular
examination. As a result, consumers and investors will be better
protected.
The legislation we introduce today will extend the effective date of
the title III, section 308 of the National Securities Markets
Improvement Act of 1996 90 days, from April 9, 1997 to July 8, 1997.
This extension was requested by the Chairman of the SEC, Arthur Levitt,
in his letter to the committee dated February 12, 1997. The legislation
is necessary to ensure that the proper rules are in place to carry out
the provisions of this title. While the Securities and Exchange
Commission is working diligently to complete its rules by the original
effective date, the Commission is concerned that investment advisers
will not have enough time to examine the final rules and to complete
and submit the new forms required.
Mr. President, Congress intended for State commissions to regulate
investment advisers with assets under $25 million. However, State law
will be preempted as it relates to all investment advisers who are
still registered with the SEC when the provision becomes effective,
regardless of their asset value. This means that if the SEC rules are
not final or if investment advisers have not submitted forms to end
their registration by April 9, 1997, State commissions will be unable
to regulate the investment advisers who fall within their jurisdiction.
Extending the effective date of the Investment Advisers Supervision
Coordination Act would ensure that all investment advisers have
sufficient time to register with the proper commission and prevent a
gap in effective regulation.
I would like to thank the chairman of the Securities Subcommittee,
and the ranking members of both the Banking Committee and the
Securities Subcommittee for their cosponsorship of this legislation. It
is my hope that the Senate will pass this legislation without amendment
or delay so that the SEC and the State commissions can continue to move
forward with these important changes to improve the regulation of
investment advisers and protect investors.
Mr. President, I ask unanimous consent that the full text of the bill
and the February 12, 1997 letter from Securities and Exchange
Commission be included in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
S. 410
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. EXTENSION OF EFFECTIVE DATE.
Section 308(a) of the Investment Advisers Supervision
Coordination Act (110 Stat. 3440) is amended by striking
``180'' and inserting ``270''.
____
U.S. Securities and
Exchange Commission,
Washington, D.C., February 12, 1997.
Hon. Alfonse M. D'Amato,
Chairman, Committee on Banking, Housing and Urban Affairs,
U.S. Senate, Washington, DC.
Dear Chairman D'Amato: I am writing to request that
Congress extend the effective date of Title III of the
National Securities Markets Improvement Act of 1996 for 90
days, from April 9 to July 8, 1997. Title III reallocates
regulatory responsibilities over investment advisers between
the states and the Commission.
The Commission has made substantial progress in completing
the many rulemaking directives given to the Commission in the
Improvement Act. In October, the Commission proposed a rule
providing a safe harbor to allow journalists access to off-
shore press conferences. In December, we proposed rules
implementing new exemptions from the Investment Company Act
for pools sold only to qualified investors. The Commission
also proposed, on December 18, 1996, rules to implement Title
III.
The Commission is making every effort to meet the
legislative deadlines of the Improvement Act. Our rule
proposals were issued only two months after the legislation
was enacted, and the comment period for the proposals ended
earlier this week. While we believe the Commission should be
able to finish work on the adoption of the proposed rules by
April 9, the effective date of Title III, we are very
concerned that this timetable is likely not to afford
investment advisers sufficient time to examine the new rules,
consult with counsel as to their continuing regulatory
status, and properly complete and submit the required forms.
We are also concerned about the effect of the April 9th
effective date on state regulatory programs. As you know,
Title III assigns important responsibilities for the
regulation of investment advisers to state regulators.
Because Title III will become effective on April 9th (whether
or not the proposed rules are adopted), state law will be
preempted as to all advisers still registered with the
Commission, including those advisers that will be exclusively
regulated by the states. If all (or most) advisers remain
registered with the Commission on April 9 because they have
not submitted the required forms, much of state investment
adviser laws will be preempted, compromising state regulatory
and enforcement programs.
By dividing jurisdiction over the 22,500 advisers currently
registered with the Commission, the Improvement Act promises
to provide more efficient and effective regulation of the
investment advisory industry. The Commission strongly
supported the enactment of the Act and has moved quickly to
implement its purposes. We believe that by providing an
additional 90 days, Congress will allow investment advisers
adequate time to meet their obligations under the new rules
and will avoid disrupting state regulatory efforts that are
important if the goals of Title III of the Improvement Act
are to be achieved.
If I or any of the Commission staff can answer any
questions, please do not hesitate to contact us.
Sincerely,
Arthur Levitt.
______
By Mrs. HUTCHISON (for herself, Mr. Abraham, Mr. Campbell, Mr.
D'Amato, Ms. Moseley-Braun and Mr. Specter):
S. 411. A bill to amend the Internal Revenue Code of 1986 to provide
a tax credit for investment necessary to revitalize communities within
the United States, and for other purposes; to the Committee on Finance.
THE COMMERCIAL REVITALIZATION TAX ACT OF 1997
Mrs. HUTCHISON. Mr. President, I stand today to sponsor, along with
Mr. Abraham, Mr. Campbell, Mr. D'Amato, Ms. Moseley-Braun, Mr. Specter,
and Mr. Cochran, the introduction of the Commercial Revitalization Tax
Credit
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Act of 1997. This bill is identical to the bipartisan and widely
supported legislation I sponsored during the last session.
This measure will create jobs, expand economic activity, and improve
the physical appearance and increase the value of residential and
commercial buildings in America's most distressed urban and rural
communities. The bill provides a targeted tax credit to businesses to
help defray the cost of construction, expansion, and renovation in
these areas, and in the process will generate billions in privately
based economic activity in those areas that need the most help in our
country.
The Commercial Revitalization Tax Credit Act will fill in the gap
between the broad range of tools our States and localities utilize to
make declining neighborhoods healthy places to do business, to work,
and to raise families. This tax credit will help businesses form a
partnership with the Government to help revitalize areas of our country
that have, in many cases, suffered from neglect and despair.
As we continue to look for ways to combat the decay of our inner
cities and to raise the standard of living in many of our rural areas,
I believe, and numerous studies demonstrate, that improving the
physical structures in our neighborhoods not only has economic benefits
but also tends to lift the hopes and expectations of the residents of
those neighborhoods. Indeed, one of the key recommendations of the
recent top-to-bottom review of law enforcement in this city, our
Nation's Capital, was to improve the many abandoned buildings in the
city that create an atmosphere conducive to crime and despair.
This legislation will build on local initiatives like this in the
District of Columbia, as well as many now underway in cities in Texas
and throughout the country. The Commercial Revitalization Tax Credit
Act will build upon the empowerment zone/enterprise community program
that is now unfolding in 109 communities in the United States. Texas
has five of these specially designated areas: Houston, Dallas, El Paso,
San Antonio, and Waco, as well as one rural zone in the Rio Grande
valley covering four counties. Not only will these cities qualify for
the credit under my bill, but so will the 400 communities in the United
States that sought such designation but were not selected. State-
established enterprise zones and others specifically designated
revitalization districts established by State and local governments
will also be able to participate. In all, over 1,000 areas will qualify
for this credit nationwide.
Our bill contains the following main features: A tax credit that may
be applied to construction amounting to at least 25 percent of the
basis of the property, in designated revitalization areas; qualified
investors could choose a one-time 20-percent tax credit against the
cost of new construction or rehabilitation. For instance, if the
expansion of a supermarket in Brownsville, TX, in the Rio Grande
valley, in the empowerment zone there, cost $150,000, the tax credit
against income would be $30,000. Alternatively, the business owner
could take a 5-percent credit each year over a 10-year period; And tax
credits totaling $1.5 billion would be allocated to each State
according to a formula, with States and localities determining the
priority of the projects.
Mr. President, with a minimum level of bureaucratic involvement and
through a proven tax mechanism, this initiative will make a significant
difference in the lives of thousands of families in need and for the
economies of hundreds of distressed urban and rural communities across
this Nation. I hope my colleagues will join me in supporting this sound
and effective pro-growth initiative.
I ask unanimous consent that the text of my bill be printed in the
Record.
There being no objection, the bill was ordered to be printed in the
Record, as follows:
S. 411
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Commercial Revitalization
Tax Act of 1997''.
SEC. 2. COMMERCIAL REVITALIZATION TAX CREDIT.
(a) Allowance of Credit.--Section 46 of the Internal
Revenue Code of 1986 (relating to investment credit) is
amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(4) the commercial revitalization credit.''
(b) Commercial Revitalization Credit.--Subpart E of part IV
of subchapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to rules for computing investment credit) is
amended by inserting after section 48 the following new
section:
``SEC. 48A. COMMERCIAL REVITALIZATION CREDIT.
``(a) General Rule.--For purposes of section 46, except as
provided in subsection (e), the commercial revitalization
credit for any taxable year is an amount equal to the
applicable percentage of the qualified revitalization
expenditures with respect to any qualified revitalization
building.
``(b) Applicable Percentage.--For purposes of this
section--
``(1) In general.--The term `applicable percentage' means--
``(A) 20 percent, or
``(B) at the election of the taxpayer, 5 percent for each
taxable year in the credit period.
The election under subparagraph (B), once made, shall be
irrevocable.
``(2) Credit period.--
``(A) In general.--The term `credit period' means, with
respect to any building, the period of 10 taxable years
beginning with the taxable year in which the building is
placed in service.
``(B) Applicable rules.--Rules similar to the rules under
paragraphs (2) and (4) of section 42(f) shall apply.
``(c) Qualified Revitalization Buildings and
Expenditures.--For purposes of this section--
``(1) Qualified revitalization building.--The term
`qualified revitalization building' means any building (and
its structural components) if--
``(A) such building is located in an eligible commercial
revitalization area,
``(B) a commercial revitalization credit amount is
allocated to the building under subsection (e), and
``(C) depreciation (or amortization in lieu of
depreciation) is allowable with respect to the building.
``(2) Qualified rehabilitation expenditure.--
``(A) In general.--The term `qualified rehabilitation
expenditure' means any amount properly chargeable to capital
account--
``(i) for property for which depreciation is allowable
under section 168 and which is--
``(I) nonresidential real property, or
``(II) an addition or improvement to property described in
subclause (I),
``(ii) in connection with the construction or substantial
rehabilitation or reconstruction of a qualified
revitalization building, and
``(iii) for the acquisition of land in connection with the
qualified revitalization building.
``(B) Dollar limitation.--The aggregate amount which may be
treated as qualified revitalization expenditures with respect
to any qualified revitalization building for any taxable year
shall not exceed $10,000,000, reduced by any such
expenditures with respect to the building taken into account
by the taxpayer or any predecessor in determining the amount
of the credit under this section for all preceding taxable
years.
``(C) Certain expenditures not included.--The term
`qualified revitalization expenditure' does not include--
``(i) Straight line depreciation must be used.--Any
expenditure (other than with respect to land acquisitions)
with respect to which the taxpayer does not use the straight
line method over a recovery period determined under
subsection (c) or (g) of section 168. The preceding sentence
shall not apply to any expenditure to the extent the
alternative depreciation system of section 168(g) applies to
such expenditure by reason of subparagraph (B) or (C) of
section 168(g)(1).
``(ii) Acquisition costs.--The costs of acquiring any
building or interest therein and any land in connection with
such building to the extent that such costs exceed 30 percent
of the qualified revitalization expenditures determined
without regard to this clause.
``(iii) Other credits.--Any expenditure which the taxpayer
may take into account in computing any other credit allowable
under this part unless the taxpayer elects to take the
expenditure into account only for purposes of this section.
``(3) Eligible commercial revitalization area.--The term
`eligible commercial revitalization area' means--
``(A) an empowerment zone or enterprise community
designated under subchapter U,
``(B) any area established pursuant to any consolidated
planning process for the use of Federal housing and community
development funds, and
``(C) any other specially designated commercial
revitalization district established by any State or local
government, which is a low-income census tract or low-income
nonmetropolitan area (as defined in subsection (e)(2)(C)) and
is not primarily a nonresidential central business district.
``(4) Substantial rehabilitation or reconstruction.--For
purposes of this subsection, a rehabilitation or
reconstruction shall be treated as a substantial
rehabilitation or reconstruction only if the qualified
revitalization expenditures in connection
[[Page S2025]]
with the rehabilitation or reconstruction exceed 25 percent
of the fair market value of the building (and its structural
components) immediately before the rehabilitation or
reconstruction.
``(d) When Expenditures Taken Into Account.--
``(1) In general.--Qualified revitalization expenditures
with respect to any qualified revitalization building shall
be taken into account for the taxable year in which the
qualified rehabilitated building is placed in service. For
purposes of the preceding sentence, a substantial
rehabilitation or reconstruction of a building shall be
treated as a separate building.
``(2) Progress expenditure payments.--Rules similar to the
rules of subsections (b)(2) and (d) of section 47 shall apply
for purposes of this section.
``(e) Limitation on Aggregate Credits Allowable With
Respect to Buildings Located in a State.--
``(1) In general.--The amount of the credit determined
under this section for any taxable year with respect to any
building shall not exceed the commercial revitalization
credit amount (in the case of an amount determined under
subsection (b)(1)(B), the present value of such amount as
determined under the rules of section 42(b)(2)(C)) allocated
to such building under this subsection by the commercial
revitalization credit agency. Such allocation shall be made
at the same time and in the same manner as under paragraphs
(1) and (7) of section 42(h).
``(2) Commercial revitalization credit amount for
agencies.--
``(A) In general.--The aggregate commercial revitalization
credit amount which a commercial revitalization credit agency
may allocate for any calendar year is the portion of the
State commercial revitalization credit ceiling allocated
under this paragraph for such calendar year for such agency.
``(B) State commercial revitalization credit ceiling.--
``(i) In general.--The State commercial revitalization
credit ceiling applicable to any State for any calendar year
is an amount which bears the same ratio to the national
ceiling for the calendar year as the population of low-income
census tracts and low-income nonmetropolitan areas within the
State bears to the population of such tracts and areas within
all States.
``(ii) National ceiling.--For purposes of clause (i), the
national ceiling is $100,000,000 for 1998, $200,000,000 for
1999, and $400,000,000 for each calendar year after 1999.
``(iii) Other special rules.--Rules similar to the rules of
subparagraphs (D), (E), (F), and (G) of section 42(h)(3)
shall apply for purposes of this subsection.
``(C) Low-income areas.--For purposes of subparagraph (B),
the terms `low-income census tract' and `low-income
nonmetropolitan area' mean a tract or area in which,
according to the most recent census data available, at least
50 percent of residents earned no more than 60 percent of the
median household income for the applicable Metropolitan
Standard Area, Consolidated Metropolitan Standard Area, or
all nonmetropolitan areas in the State.
``(D) Commercial revitalization credit agency.--For
purposes of this section, the term `commercial revitalization
credit agency' means any agency authorized by a State to
carry out this section.
``(E) State.--For purposes of this section, the term
`State' includes a possession of the United States.
``(f) Responsibilities of Commercial Revitalization Credit
Agencies.--
``(1) Plans for allocation.--Notwithstanding any other
provision of this section, the commercial revitalization
credit dollar amount with respect to any building shall be
zero unless--
``(A) such amount was allocated pursuant to a qualified
allocation plan of the commercial revitalization credit
agency which is approved by the governmental unit (in
accordance with rules similar to the rules of section
147(f)(2) (other than subparagraph (B)(ii) thereof)) of which
such agency is a part, and
``(B) such agency notifies the chief executive officer (or
its equivalent) of the local jurisdiction within which the
building is located of such project and provides such
individual a reasonable opportunity to comment on the
project.
``(2) Qualified allocation plan.--For purposes of this
subsection, the term `qualified allocation plan' means any
plan--
``(A) which sets forth selection criteria to be used to
determine priorities of the commercial revitalization credit
agency which are appropriate to local conditions,
``(B) which considers--
``(i) the degree to which a project contributes to the
implementation of a strategic plan that is devised for an
eligible commercial revitalization area through a citizen
participation process,
``(ii) the amount of any increase in permanent, full-time
employment by reason of any project, and
``(iii) the active involvement of residents and nonprofit
groups within the eligible commercial revitalization area,
and
``(C) which provides a procedure that the agency (or its
agent) will follow in monitoring for compliance with this
section.
``(g) Termination.--This section shall not apply to any
building placed in service after December 31, 2000.''
(b) Conforming Amendments.--
(1) Section 39(d) of the Internal Revenue Code of 1986 is
amended by adding at the end the following new paragraph:
``(8) No carryback of section 48a credit before
enactment.--No portion of the unused business credit for any
taxable year which is attributable to any commercial
revitalization credit determined under section 48A may be
carried back to a taxable year ending before the date of the
enactment of section 48A.''
(2) Subparagraph (B) of section 48(a)(2) of such Code is
amended by inserting ``or commercial revitalization'' after
``rehabilitation'' each place it appears in the text and
heading thereof.
(3) Subparagraph (C) of section 49(a)(1) of such Code is
amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting
``, and'', and by adding at the end the following new clause:
``(iv) the basis of any qualified revitalization building
attributable to qualified revitalization expenditures.''
(4) Paragraph (2) of section 50(a) of such Code is amended
by inserting ``or 48A(d)(2)'' after ``section 47(d)'' each
place it appears.
(5) Subparagraph (B) of section 50(a)(2) of such Code is
amended by adding at the end the following new sentence: ``A
similar rule shall apply for purposes of section 48A.''
(6) Paragraph (2) of section 50(b) of such Code is amended
by striking ``and'' at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and
inserting ``, and'', and by adding at the end the following
new subparagraph:
``(E) a qualified revitalization building to the extent of
the portion of the basis which is attributable to qualified
revitalization expenditures.''
(7) Subparagraph (C) of section 50(b)(4) of such Code is
amended by inserting ``or commercial revitalization'' after
``rehabilitated'' each place it appears in the text and
heading thereof.
(8) Subparagraph (C) of section 469(i)(3) is amended--
(A) by inserting ``or section 48A'' after ``section 42'',
and
(B) by striking ``credit'' in the heading and inserting
``and commercial revitalization credits''.
(c) Effective Date.--The amendments made by this section
shall apply to property placed in service after December 31,
1997.
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