[Congressional Record Volume 147, Number 159 (Friday, November 16, 2001)]
[Senate]
[Pages S12008-S12013]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 2163. Mr. TORRICELLI (for Mr. Baucus) proposed an amendment to the 
bill H.R. 2884, an act to amend the Internal Revenue Code of 1986 to 
provide tax relief for victims of the terrorist attacks against the 
United States, and for other purposes; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Victims of 
     Terrorism Tax Relief Act of 2001''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; etc.

      TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

Sec. 101. Income and employment taxes of victims of terrorist attacks.
Sec. 102. Estate tax reduction.
Sec. 103. Payments by charitable organizations treated as exempt 
              payments.
Sec. 104. Exclusion of certain cancellations of indebtedness.
Sec. 105. Treatment of certain structured settlement payments and 
              disability trusts.
Sec. 106. No impact on social security trust funds.

 TITLE II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND TERRORISTIC OR 
                            MILITARY ACTIONS

Sec. 201. Exclusion for disaster relief payments.
Sec. 202. Authority to postpone certain deadlines and required actions.
Sec. 203. Internal Revenue Service disaster response team.
Sec. 204. Application of certain provisions to terroristic or military 
              actions.
Sec. 205. Clarification of due date for airline excise tax deposits.
Sec. 206. Coordination with Air Transportation Safety and System 
              Stabilization Act.

  TITLE III--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL 
                        SECURITY INVESTIGATIONS

Sec. 301. Disclosure of tax information in terrorism and national 
              security investigations.

      TITLE I--RELIEF PROVISIONS FOR VICTIMS OF TERRORIST ATTACKS

     SEC. 101. INCOME AND EMPLOYMENT TAXES OF VICTIMS OF TERRORIST 
                   ATTACKS.

       (a) In General.--Section 692 (relating to income taxes of 
     members of Armed Forces on death) is amended by adding at the 
     end the following new subsection:
       ``(d) Individuals Dying as a Result of Certain Terrorist 
     Attacks.--
       ``(1) In general.--In the case of any individual who dies 
     as a result of wounds or injury incurred as a result of the 
     terrorist attacks against the United States on April 19, 
     1995, or September 11, 2001, or who dies as a result of 
     illness incurred as a result of a terrorist attack involving 
     anthrax occurring on or after September 11, 2001, and before 
     January 1, 2002, any tax imposed by this subtitle shall not 
     apply--
       ``(A) with respect to the taxable year in which falls the 
     date of such individual's death, and
       ``(B) with respect to any prior taxable year in the period 
     beginning with the last taxable year ending before the 
     taxable year in which the wounds, injury, or illness were 
     incurred.
       ``(2) Exceptions.--
       ``(A) Taxation of certain benefits.--Subject to such rules 
     as the Secretary may prescribe, paragraph (1) shall not apply 
     to the amount of any tax imposed by this subtitle which would 
     be computed by only taking into account the items of income, 
     gain, or other amounts attributable to--
       ``(i) amounts payable in the taxable year by reason of the 
     death of an individual described in paragraph (1) which would 
     have been payable in such taxable year if the death had 
     occurred by reason of an event other than an event described 
     in paragraph (1), or
       ``(ii) amounts payable in the taxable year which would not 
     have been payable in such taxable year but for an action 
     taken after the date of the applicable terrorist attack.
       ``(B) No relief for perpetrators.--Paragraph (1) shall not 
     apply with respect to any individual identified by the 
     Attorney General to have been a participant or conspirator in 
     any event described in paragraph (1), or a representative of 
     such individual.''.
       (b) Refund of Other Taxes Paid.--Section 692, as amended by 
     subsection (a), is amended by adding at the end the following 
     new subsection:
       ``(e) Refund of Other Taxes Paid.--In determining the 
     amount of tax under this section to be credited or refunded 
     as an overpayment with respect to any individual for any 
     period, such amount shall be increased by an amount equal to 
     the amount of taxes imposed and collected under chapter 21 
     and sections 3201(a), 3211(a)(1), and 3221(a) with respect to 
     such individual for such period.''.
       (c) Conforming Amendments.--
       (1) Section 5(b)(1) is amended by inserting ``and victims 
     of certain terrorist attacks'' before ``on death''.
       (2) Section 6013(f)(2)(B) is amended by inserting ``and 
     victims of certain terrorist attacks'' before ``on death''.
       (d) Clerical Amendments.--
       (1) The heading of section 692 is amended to read as 
     follows:

     ``SEC. 692. INCOME AND EMPLOYMENT TAXES OF MEMBERS OF ARMED 
                   FORCES AND VICTIMS OF CERTAIN TERRORIST ATTACKS 
                   ON DEATH.''.

       (2) The item relating to section 692 in the table of 
     sections for part II of subchapter J of chapter 1 is amended 
     to read as follows:

``Sec. 692. Income and employment taxes of members of Armed Forces and 
              victims of certain terrorist attacks on death.''.

       (e) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 102. ESTATE TAX REDUCTION.

       (a) In General.--Section 2201 is amended to read as 
     follows:

     ``SEC. 2201. COMBAT ZONE-RELATED DEATHS OF MEMBERS OF THE 
                   ARMED FORCES AND DEATHS OF VICTIMS OF CERTAIN 
                   TERRORIST ATTACKS.

       ``(a) In General.--Unless the executor elects not to have 
     this section apply, in applying section 2001 to the estate of 
     a qualified decedent, the rate schedule set forth in 
     subsection (c) shall be deemed to be the rate schedule set 
     forth in section 2001(c).
       ``(b) Qualified Decedent.--For purposes of this section, 
     the term `qualified decedent' means--
       ``(1) any citizen or resident of the United States dying 
     while in active service of the Armed Forces of the United 
     States, if such decedent--
       ``(A) was killed in action while serving in a combat zone, 
     as determined under section 112(c), or
       ``(B) died as a result of wounds, disease, or injury 
     suffered while serving in a combat zone (as determined under 
     section 112(c)), and while in the line of duty, by reason of 
     a hazard to which such decedent was subjected as an incident 
     of such service, or
       ``(2) any individual who died as a result of wounds or 
     injury incurred as a result of the terrorist attacks against 
     the United States on April 19, 1995, or September 11, 2001, 
     or who died as a result of illness incurred as a result of a 
     terrorist attack involving anthrax occurring on or after 
     September 11, 2001, and before January 1, 2002.
     Paragraph (2) shall not apply with respect to any individual 
     identified by the Attorney General to have been a participant 
     or conspirator in any such terrorist attack, or a 
     representative of such individual.
       ``(c) Rate Schedule.--

``If the amount with respect to which the tentative tax to be computed 
The tentative tax is:
1 percent of the amount by which such amount exceeds $100,000..........
$500 plus 2 percent of the excess over $150,000........................
$1,500 plus 3 percent of the excess over $200,000......................
$4,500 plus 4 percent of the excess over $300,000......................
$12,500 plus 5 percent of the excess over $500,000.....................
$22,500 plus 6 percent of the excess over $700,000.....................
$34,500 plus 7 percent of the excess over $900,000.....................
$48,500 plus 8 percent of the excess over $1,100,000...................
$88,500 plus 9 percent of the excess over $1,600,000...................
$133,500 plus 10 percent of the excess over $2,100,000.................

[[Page S12009]]

$183,500 plus 11 percent of the excess over $2,600,000.................
$238,500 plus 12 percent of the excess over $3,100,000.................
$298,500 plus 13 percent of the excess over $3,600,000.................
$363,500 plus 14 percent of the excess over $4,100,000.................
$503,500 plus 15 percent of the excess over $5,100,000.................
$653,500 plus 16 percent of the excess over $6,100,000.................
$813,500 plus 17 percent of the excess over $7,100,000.................
$983,500 plus 18 percent of the excess over $8,100,000.................
$1,163,500 plus 19 percent of the excess over $9,100,000...............
$1,353,500 plus 20 percent of the excess over $10,100,000..............
       ``(d) Determination of Unified Credit.--In the case of an 
     estate to which this section applies, subsection (a) shall 
     not apply in determining the credit under section 2010.''.
       (b) Conforming Amendments.--
       (1) Section 2011 is amended by striking subsection (d) and 
     by redesignating subsections (e), (f), and (g) as subsections 
     (d), (e), and (f), respectively.
       (2) Section 2053(d)(3)(B) is amended by striking ``section 
     2011(e)'' and inserting ``section 2011(d)''.
       (3) Paragraph (9) of section 532(c) of the Economic Growth 
     and Tax Relief Reconciliation Act of 2001 is repealed.
       (c) Clerical Amendment.--The item relating to section 2201 
     in the table of sections for subchapter C of chapter 11 is 
     amended to read as follows:

``Sec. 2201. Combat zone-related deaths of members of the Armed Forces 
              and deaths of victims of certain terrorist attacks.''.

       (d) Effective Date; Waiver of Limitations.--
       (1) Effective date.--The amendments made by this section 
     shall apply to estates of decedents--
       (A) dying on or after September 11, 2001, and
       (B) in the case of individuals dying as a result of the 
     April 19, 1995, terrorist attack, dying on or after April 19, 
     1995.
       (2) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     section is prevented at any time before the close of the 1-
     year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 103. PAYMENTS BY CHARITABLE ORGANIZATIONS TREATED AS 
                   EXEMPT PAYMENTS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) payments made by an organization described in section 
     501(c)(3) of such Code by reason of the death, injury, 
     wounding, or illness of an individual incurred as the result 
     of the terrorist attacks against the United States on 
     September 11, 2001, or a terrorist attack involving anthrax 
     occurring on or after September 11, 2001, and before January 
     1, 2002, shall be treated as related to the purpose or 
     function constituting the basis for

     such organization's exemption under section 501 of such Code 
     if such payments are made using an objective formula which is 
     consistently applied, and
       (2) in the case of a private foundation (as defined in 
     section 509 of such Code), any payment described in paragraph 
     (1) shall not be treated as made to a disqualified person for 
     purposes of section 4941 of such Code.
       (b) Effective Date.--This section shall apply to payments 
     made on or after September 11, 2001.

     SEC. 104. EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS.

       (a) In General.--For purposes of the Internal Revenue Code 
     of 1986--
       (1) gross income shall not include any amount which (but 
     for this section) would be includible in gross income by 
     reason of the discharge (in whole or in part) of indebtedness 
     of any taxpayer if the discharge is by reason of the death of 
     an individual incurred as the result of the terrorist attacks 
     against the United States on September 11, 2001, or a 
     terrorist attack involving anthrax occurring on or after 
     September 11, 2001, and before January 1, 2002, and
       (2) return requirements under section 6050P of such Code 
     shall not apply to any discharge described in paragraph (1).
       (b) Effective Date.--This section shall apply to discharges 
     made on or after September 11, 2001, and before January 1, 
     2002.

     SEC. 105. TREATMENT OF CERTAIN STRUCTURED SETTLEMENT PAYMENTS 
                   AND DISABILITY TRUSTS.

       (a) Imposition of Excise Tax on Persons Who Acquire Certain 
     Structured Settlement Payments in Factoring Transactions.--
       (1) In general.--Subtitle E is amended by adding at the end 
     the following new chapter:

       ``CHAPTER 55--STRUCTURED SETTLEMENT FACTORING TRANSACTIONS

``Sec. 5891. Structured settlement factoring transactions for certain 
              victims of terrorism.

     ``SEC. 5891. STRUCTURED SETTLEMENT FACTORING TRANSACTIONS FOR 
                   CERTAIN VICTIMS OF TERRORISM.

       ``(a) Imposition of Tax.--There is hereby imposed on any 
     person who acquires directly or indirectly structured 
     settlement payment rights in a structured settlement 
     factoring transaction a tax equal to 40 percent of the 
     factoring discount as determined under subsection (c)(4) with 
     respect to such factoring transaction.
       ``(b) Exception for Certain Approved Transactions.--
       ``(1) In general.--The tax under subsection (a) shall not 
     apply in the case of a structured settlement factoring 
     transaction in which the transfer of structured settlement 
     payment rights is approved in advance in a qualified order.
       ``(2) Qualified order.--For purposes of this section, the 
     term `qualified order' means a final order, judgment, or 
     decree which--
       ``(A) finds that the transfer described in paragraph (1)--
       ``(i) does not contravene any Federal or State statute or 
     the order of any court or responsible administrative 
     authority, and
       ``(ii) is in the best interest of the payee, taking into 
     account the welfare and support of the payee's dependents, 
     and
       ``(B) is issued--
       ``(i) under the authority of an applicable State statute by 
     an applicable State court, or
       ``(ii) by the responsible administrative authority (if any) 
     which has exclusive jurisdiction over the underlying action 
     or proceeding which was resolved by means of the structured 
     settlement.
       ``(3) Applicable state statute.--For purposes of this 
     section, the term `applicable State statute' means a statute 
     providing for the entry of an order, judgment, or decree 
     described in paragraph (2)(A) which is enacted by--
       ``(A) the State in which the payee of the structured 
     settlement is domiciled, or
       ``(B) if there is no statute described in subparagraph (A), 
     the State in which either the party to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) or the person issuing the 
     funding asset for the structured settlement is domiciled or 
     has its principal place of business.
       ``(4) Applicable state court.--For purposes of this 
     section--
       ``(A) In general.--The term `applicable State court' means, 
     with respect to any applicable State statute, a court of the 
     State which enacted such statute.
       ``(B) Special rule.--In the case of an applicable State 
     statute described in paragraph (3)(B), such term also 
     includes a court of the State in which the payee of the 
     structured settlement is domiciled.
       ``(5) Qualified order dispositive.--A qualified order shall 
     be treated as dispositive for purposes of the exception under 
     this subsection.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Structured settlement.--The term `structured 
     settlement' means an arrangement--
       ``(A) which is established by--
       ``(i) suit or agreement for the periodic payment of damages 
     excludable from the gross income of the recipient under 
     section 104(a)(2), or
       ``(ii) agreement for the periodic payment of compensation 
     under any workers' compensation law excludable from the gross 
     income of the recipient under section 104(a)(1), and
       ``(B) under which the periodic payments are--
       ``(i) of the character described in subparagraphs (A) and 
     (B) of section 130(c)(2), and
       ``(ii) payable by a person who is a party to the suit or 
     agreement or to the workers' compensation claim or by a 
     person who has assumed the liability for such periodic 
     payments under a qualified assignment in accordance with 
     section 130.
       ``(2) Structured settlement payment rights.--The term 
     `structured settlement payment rights' means rights to 
     receive payments under a structured settlement relating to 
     claims for death, wounding, injury, or illness as a result of 
     the terrorist attacks against the United States on September 
     11, 2001, or a terrorist attack involving anthrax occurring 
     on or after September 11, 2001, and before January 1, 2002.
       ``(3) Structured settlement factoring transaction.--
       ``(A) In general.--The term `structured settlement 
     factoring transaction' means a transfer of structured 
     settlement payment rights (including portions of structured 
     settlement payments) made for consideration by means of sale, 
     assignment, pledge, or other form of encumbrance or 
     alienation for consideration.
       ``(B) Exception.--Such term shall not include--
       ``(i) the creation or perfection of a security interest in 
     structured settlement payment rights under a blanket security 
     agreement entered into with an insured depository institution 
     in the absence of any action to redirect the structured 
     settlement payments to such institution (or agent or 
     successor thereof) or otherwise to enforce such blanket 
     security interest as against the structured settlement 
     payment rights, or
       ``(ii) a subsequent transfer of structured settlement 
     payment rights acquired in a structured settlement factoring 
     transaction.

[[Page S12010]]

       ``(4) Factoring discount.--The term `factoring discount' 
     means an amount equal to the excess of--
       ``(A) the aggregate undiscounted amount of structured 
     settlement payments being acquired in the structured 
     settlement factoring transaction, over
       ``(B) the total amount actually paid by the acquirer to the 
     person from whom such structured settlement payments are 
     acquired.
       ``(5) Responsible administrative authority.--The term 
     `responsible administrative authority' means the 
     administrative authority which had jurisdiction over the 
     underlying action or proceeding which was resolved by means 
     of the structured settlement.
       ``(6) State.--The term `State' includes the Commonwealth of 
     Puerto Rico and any possession of the United States.
       ``(d) Coordination With Other Provisions.--
       ``(1) In general.--If the applicable requirements of 
     sections 72, 104(a)(1), 104(a)(2), 130, and 461(h) were 
     satisfied at the time the structured settlement involving 
     structured settlement payment rights was entered into, the 
     subsequent occurrence of a structured settlement factoring 
     transaction shall not affect the application of the 
     provisions of such sections to the parties to the structured 
     settlement (including an assignee under a qualified 
     assignment under section 130) in any taxable year.
       ``(2) No withholding of tax.--The provisions of section 
     3405 regarding withholding of tax shall not apply to the 
     person making the payments in the event of a structured 
     settlement factoring transaction.
       ``(3) No inference.--No inference shall be drawn from the 
     application of this subsection to only those payment rights 
     described in subsection (c)(2).''.
       (2) Clerical amendment.--The table of chapters for subtitle 
     E is amended by adding at the end the following new item:

``Chapter 55. Structured settlement factoring transactions.''.

       (3) Effective dates.--
       (A) In general.--The amendments made by this subsection 
     (other than the provisions of section 5891(d) of the Internal 
     Revenue Code of 1986, as added by this subsection) shall 
     apply to structured settlement factoring transactions (as 
     defined in section 5891(c) of such Code (as so added)) 
     entered into on or after the 30th day following the date of 
     the enactment of this Act.
       (B) Clarification of existing law.--Section 5891(d) of such 
     Code (as so added) shall apply to structured settlement 
     factoring transactions (as defined in section 5891(c) of such 
     Code (as so added)) entered into on or after such 30th day.
       (C) Transition rule.--In the case of a structured 
     settlement factoring transaction entered into during the 
     period beginning on the 30th day following the date of the 
     enactment of this Act and ending on July 1, 2002, no tax 
     shall be imposed under section 5891(a) of such Code if--
       (i) the structured settlement payee is domiciled in a State 
     (or possession of the United States) which has not enacted a 
     statute providing that the structured settlement factoring 
     transaction is ineffective unless the transaction has been 
     approved by an order, judgment, or decree of a court (or 
     where applicable, a responsible administrative authority) 
     which finds that such transaction--

       (I) does not contravene any Federal or State statute or the 
     order of any court (or responsible administrative authority), 
     and
       (II) is in the best interest of the structured settlement 
     payee or is appropriate in light of a hardship faced by the 
     payee, and

       (ii) the person acquiring the structured settlement payment 
     rights discloses to the structured settlement payee in 
     advance of the structured settlement factoring transaction 
     the amounts and due dates of the payments to be transferred, 
     the aggregate amount to be transferred, the consideration to 
     be received by the structured settlement payee for the 
     transferred payments, the discounted present value of the 
     transferred payments (including the present value as 
     determined in the manner described in section 7520 of such 
     Code), and the expenses required under the terms of the 
     structured settlement factoring transaction to be paid by the 
     structured settlement payee or deducted from the proceeds of 
     such transaction.
       (b) Personal Exemption Deduction for Certain Disability 
     Trusts.--
       (1) In general.--Section 642(b) (relating to deduction for 
     personal exemption) is amended--
       (A) by striking ``An estate'' and inserting:
       ``(1) In general.--An estate'', and
       (2) by adding at the end the following new paragraph:
       ``(2) Full personal exemption amount for certain disability 
     trusts.--Paragraph (1) shall not apply, and the deduction 
     under section 151 shall apply, to any disability trust 
     described in subsection (c)(2)(B)(iv), (d)(4)(A), or 
     (d)(4)(C) of section 1917 of the Social Security Act (42 
     U.S.C. 1396p) for a beneficiary disabled as the result of a 
     wounding, injury, or illness as a result of the terrorist 
     attacks against the United States on April 19, 1995, or 
     September 11, 2001, or a terrorist attack involving anthrax 
     occurring on or after September 11, 2001, and before January 
     1, 2002.''.
       (2) Effective date; waiver of limitations.--
       (A) Effective date.--The amendments made by this subsection 
     shall apply to taxable years ending before, on, or after 
     September 11, 2001.
       (B) Waiver of limitations.--If refund or credit of any 
     overpayment of tax resulting from the amendments made by this 
     subsection is prevented at any time before the close of the 
     1-year period beginning on the date of the enactment of this 
     Act by the operation of any law or rule of law (including res 
     judicata), such refund or credit may nevertheless be made or 
     allowed if claim therefor is filed before the close of such 
     period.

     SEC. 106. NO IMPACT ON SOCIAL SECURITY TRUST FUND.

       (a) In General.--Nothing in this title (or an amendment 
     made by this title) shall be construed to alter or amend 
     title II of the Social Security Act (or any regulation 
     promulgated under that Act).
       (b) Transfers.--
       (1) Estimate of secretary.--The Secretary of the Treasury 
     shall annually estimate the impact that the enactment of this 
     Act has on the income and balances of the trust funds 
     established under section 201 of the Social Security Act (42 
     U.S.C. 401).
       (2) Transfer of funds.--If, under paragraph (1), the 
     Secretary of the Treasury estimates that the enactment of 
     this Act has a negative impact on the income and balances of 
     the trust funds established under section 201 of the Social 
     Security Act (42 U.S.C. 401), the Secretary shall transfer, 
     not less frequently than quarterly, from the general revenues 
     of the Federal Government an amount sufficient so as to 
     ensure that the income and balances of such trust funds are 
     not reduced as a result of the enactment of this Act.

 TITLE II--GENERAL RELIEF FOR VICTIMS OF DISASTERS AND TERRORISTIC OR 
                            MILITARY ACTIONS

     SEC. 201. EXCLUSION FOR DISASTER RELIEF PAYMENTS.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by redesignating section 139 as section 140 and 
     inserting after section 138 the following new section:

     ``SEC. 139. DISASTER RELIEF PAYMENTS.

       ``(a) General Rule.--Gross income shall not include--
       ``(1) any amount received as payment under section 406 of 
     the Air Transportation Safety and System Stabilization Act, 
     or
       ``(2) any amount received by an individual as a qualified 
     disaster relief payment.
       ``(b) Qualified Disaster Relief Payment Defined.--For 
     purposes of this section, the term `qualified disaster relief 
     payment' means any amount paid to or for the benefit of an 
     individual--
       ``(1) to reimburse or pay reasonable and necessary 
     personal, family, living, or funeral expenses incurred as a 
     result of a qualified disaster,
       ``(2) to reimburse or pay reasonable and necessary expenses 
     incurred for the repair or rehabilitation of a personal 
     residence or repair or replacement of its contents to the 
     extent that the need for such repair, rehabilitation, or 
     replacement is attributable to a qualified disaster,
       ``(3) by a person engaged in the furnishing or sale of 
     transportation as a common carrier by reason of the death or 
     personal physical injuries incurred as a result of a 
     qualified disaster, or
       ``(4) if such amount is paid by a Federal, State, or local 
     government, or agency or instrumentality thereof, in 
     connection with a qualified disaster in order to promote the 
     general welfare,

     but only to the extent any expense compensated by such 
     payment is not otherwise compensated for by insurance or 
     otherwise.
       ``(c) Qualified Disaster Defined.--For purposes of this 
     section, the term `qualified disaster' means--
       ``(1) a disaster which results from a terroristic or 
     military action (as defined in section 692(c)(2)),
       ``(2) a Presidentially declared disaster (as defined in 
     section 1033(h)(3)),
       ``(3) a disaster which results from an accident involving a 
     common carrier, or from any other event, which is determined 
     by the Secretary to be of a catastrophic nature, or
       ``(4) with respect to amounts described in subsection 
     (b)(4), a disaster which is determined by an applicable 
     Federal, State, or local authority (as determined by the 
     Secretary) to warrant assistance from the Federal, State, or 
     local government or agency or instrumentality thereof.
       ``(d) Coordination With Employment Taxes.--For purposes of 
     chapter 2 and subtitle C, a qualified disaster relief payment 
     shall not be treated as net earnings from self-employment, 
     wages, or compensation subject to tax.
       ``(e) No Relief for Certain Individuals.--Subsection (a) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.''.
       (b) Conforming Amendments.--The table of sections for part 
     III of subchapter B of chapter 1 is amended by striking the 
     item relating to section 139 and inserting the following new 
     items:

``Sec. 139. Disaster relief payments.
``Sec. 140. Cross references to other Acts.''.


[[Page S12011]]


       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 202. AUTHORITY TO POSTPONE CERTAIN DEADLINES AND 
                   REQUIRED ACTIONS.

       (a) Expansion of Authority Relating to Disasters and 
     Terroristic or Military Actions.--Section 7508A is amended to 
     read as follows:

     ``SEC. 7508A. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY 
                   REASON OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``(a) In General.--In the case of a taxpayer determined by 
     the Secretary to be affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3)) or a terroristic 
     or military action (as defined in section 692(c)(2)), the 
     Secretary may specify a period of up to one year that may be 
     disregarded in determining, under the internal revenue laws, 
     in respect of any tax liability of such taxpayer--
       ``(1) whether any of the acts described in paragraph (1) of 
     section 7508(a) were performed within the time prescribed 
     therefor (determined without regard to extension under any 
     other provision of this subtitle for periods after the date 
     (determined by the Secretary) of such disaster or action),
       ``(2) the amount of any interest, penalty, additional 
     amount, or addition to the tax for periods after such date, 
     and
       ``(3) the amount of any credit or refund.
       ``(b) Special Rules Regarding Pensions, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a disaster or action 
     described in subsection (a), the Secretary may specify a 
     period of up to one year which may be disregarded in 
     determining the date by which any action is required or 
     permitted to be completed under this title. No plan shall be 
     treated as failing to be operated in accordance with the 
     terms of the plan solely as the result of disregarding any 
     period by reason of the preceding sentence.
       ``(c) Special Rules for Overpayments.--The rules of section 
     7508(b) shall apply for purposes of this section.''.
       (b) Clarification of Scope of Acts Secretary May 
     Postpone.--Section 7508(a)(1)(K) (relating to time to be 
     disregarded) is amended by striking ``in regulations 
     prescribed under this section''.
       (c) Conforming Amendments to ERISA.--
       (1) Part 5 of subtitle B of title I of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1131 et 
     seq.) is amended by adding at the end the following new 
     section:

     ``SEC. 518. AUTHORITY TO POSTPONE CERTAIN DEADLINES BY REASON 
                   OF PRESIDENTIALLY DECLARED DISASTER OR 
                   TERRORISTIC OR MILITARY ACTIONS.

       ``In the case of a pension or other employee benefit plan, 
     or any sponsor, administrator, participant, beneficiary, or 
     other person with respect to such plan, affected by a 
     Presidentially declared disaster (as defined in section 
     1033(h)(3) of the Internal Revenue Code of 1986) or a 
     terroristic or military action (as defined in section 
     692(c)(2) of such Code), the Secretary may, notwithstanding 
     any other provision of law, prescribe, by notice or 
     otherwise, a period of up to one year which may be 
     disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (2) Section 4002 of Employee Retirement Income Security Act 
     of 1974 (29 U.S.C. 1302) is amended by adding at the end the 
     following new subsection:
       ``(i) Special Rules Regarding Disasters, Etc.--In the case 
     of a pension or other employee benefit plan, or any sponsor, 
     administrator, participant, beneficiary, or other person with 
     respect to such plan, affected by a Presidentially declared 
     disaster (as defined in section 1033(h)(3) of the Internal 
     Revenue Code of 1986) or a terroristic or military action (as 
     defined in section 692(c)(2) of such Code), the corporation 
     may, notwithstanding any other provision of law, prescribe, 
     by notice or otherwise, a period of up to one year which may 
     be disregarded in determining the date by which any action is 
     required or permitted to be completed under this Act. No plan 
     shall be treated as failing to be operated in accordance with 
     the terms of the plan solely as the result of disregarding 
     any period by reason of the preceding sentence.''.
       (d) Additional Conforming Amendments.--
       (1) Section 6404 is amended--
       (A) by striking subsection (h),
       (B) by redesignating subsection (i) as subsection (h), and
       (C) by adding at the end the following new subsection:
       ``(i) Cross Reference.--

  ``For authority of the Secretary to abate certain amounts by reason 
of Presidentially declared disaster or terroristic or military action, 
see section 7508A.''.

       (2) Section 6081(c) is amended to read as follows:
       ``(c) Cross References.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.

       (3) Section 6161(d) is amended by adding at the end the 
     following new paragraph:
       ``(3) Postponement of certain acts.--

  ``For time for performing certain acts postponed by reason of war, 
see section 7508, and by reason of Presidentially declared disaster or 
terroristic or military action, see section 7508A.''.

       (d) Clerical Amendments.--
       (1) The item relating to section 7508A in the table of 
     sections for chapter 77 is amended to read as follows:

``Sec. 7508A. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.

       (2) The table of contents for the Employee Retirement 
     Income Security Act of 1974 is amended by inserting after the 
     item relating to section 517 the following new item:

``Sec. 518. Authority to postpone certain deadlines by reason of 
              Presidentially declared disaster or terroristic or 
              military actions.''.

       (e) Effective Date.--The amendments made by this section 
     shall apply to disasters and terroristic or military actions 
     occurring on or after September 11, 2001, with respect to any 
     action of the Secretary of the Treasury, the Secretary of 
     Labor, or the Pension Benefit Guaranty Corporation occurring 
     on or after the date of the enactment of this Act.

     SEC. 203. INTERNAL REVENUE SERVICE DISASTER RESPONSE TEAM.

       (a) In General.--Section 7508A, as amended by section 
     202(a), is amended by adding at the end the following new 
     subsection:
       ``(d) Duties of Disaster Response Team.--The Secretary 
     shall establish as a permanent office in the national office 
     of the Internal Revenue Service a disaster response team 
     which, in coordination with the Federal Emergency Management 
     Agency, shall assist taxpayers in clarifying and resolving 
     Federal tax matters associated with or resulting from any 
     Presidentially declared disaster (as defined in section 
     1033(h)(3)) or a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of the enactment of this Act.

     SEC. 204. APPLICATION OF CERTAIN PROVISIONS TO TERRORISTIC OR 
                   MILITARY ACTIONS.

       (a) Exclusion for Death Benefits.--Section 101 (relating to 
     certain death benefits) is amended by adding at the end the 
     following new subsection:
       ``(i) Certain Employee Death Benefits Payable by Reason of 
     Death From Terroristic or Military Actions.--
       ``(1) In general.--Gross income does not include amounts 
     which are received (whether in a single sum or otherwise) if 
     such amounts are paid by an employer by reason of the death 
     of an employee incurred as a result of a terroristic or 
     military action (as defined in section 692(c)(2)).
       ``(2) No relief for certain individuals.--Paragraph (1) 
     shall not apply with respect to any individual identified by 
     the Attorney General to have been a participant or 
     conspirator in a terroristic action (as so defined), or a 
     representative of such individual.
       ``(3) Treatment of self-employed individuals.--For purposes 
     of this subsection, the term `employee' includes a self-
     employed person (as described in section 401(c)(1)).''.
       (b) Disability Income.--Section 104(a)(5) (relating to 
     compensation for injuries or sickness) is amended by striking 
     ``a violent attack'' and all that follows through the period 
     and inserting ``a terroristic or military action (as defined 
     in section 692(c)(2)).''.
       (c) Exemption From Income Tax for Certain Military or 
     Civilian Employees.--Section 692(c) is amended--
       (1) by striking ``outside the United States'' in paragraph 
     (1), and
       (2) by striking ``Sustained Overseas'' in the heading.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending on or after September 11, 
     2001.

     SEC. 205. CLARIFICATION OF DUE DATE FOR AIRLINE EXCISE TAX 
                   DEPOSITS.

       (a) In General.--Paragraph (3) of section 301(a) of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42) is amended to read as follows:
       ``(3) Airline-related deposit.--For purposes of this 
     subsection, the term `airline-related deposit' means any 
     deposit of taxes imposed by subchapter C of chapter 33 of 
     such Code (relating to transportation by air).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in section 301 of the Air 
     Transportation Safety and System Stabilization Act (Public 
     Law 107-42).

     SEC. 206. COORDINATION WITH AIR TRANSPORTATION SAFETY AND 
                   SYSTEM STABILIZATION ACT.

       No reduction in Federal tax liability by reason of any 
     provision of, or amendment made by, this Act shall be 
     considered as being received from a collateral source for 
     purposes of section 402(4) of the Air Transportation Safety 
     and System Stabilization Act (Public Law 107-42).

[[Page S12012]]

  TITLE III--DISCLOSURE OF TAX INFORMATION IN TERRORISM AND NATIONAL 
                        SECURITY INVESTIGATIONS

     SEC. 301. DISCLOSURE OF TAX INFORMATION IN TERRORISM AND 
                   NATIONAL SECURITY INVESTIGATIONS.

       (a) Disclosure Without a Request of Information Relating to 
     Terrorist Activities, Etc.--Paragraph (3) of section 6103(i) 
     (relating to disclosure of return information to apprise 
     appropriate officials of criminal activities or emergency 
     circumstances) is amended by adding at the end the following 
     new subparagraph:
       ``(C) Terrorist activities, etc.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may disclose in writing return information (other 
     than taxpayer return information) that may be related to a 
     terrorist incident, threat, or activity to the extent 
     necessary to apprise the head of the appropriate Federal law 
     enforcement agency responsible for investigating or 
     responding to such terrorist incident, threat, or activity. 
     The head of the agency may disclose such return information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.
       ``(ii) Disclosure to the department of justice.--Returns 
     and taxpayer return information may also be disclosed to the 
     Attorney General under clause (i) to the extent necessary 
     for, and solely for use in preparing, an application under 
     paragraph (7)(D).
       ``(iii) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(iv) Termination.--No disclosure may be made under this 
     subparagraph after December 31, 2003.''.
       (b) Disclosure Upon Request of Information Relating to 
     Terrorist Activities, Etc.--Subsection (i) of section 6103 
     (relating to disclosure to Federal officers or employees for 
     administration of Federal laws not relating to tax 
     administration) is amended by redesignating paragraph (7) as 
     paragraph (8) and by inserting after paragraph (6) the 
     following new paragraph:
       ``(7) Disclosure upon request of information relating to 
     terrorist activities, etc.--
       ``(A) Disclosure to law enforcement agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (iii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to officers and employees of any Federal law 
     enforcement agency who are personally and directly engaged in 
     the response to or investigation of any terrorist incident, 
     threat, or activity.
       ``(ii) Disclosure to state and local law enforcement 
     agencies.--The head of any Federal law enforcement agency may 
     disclose return information obtained under clause (i) to 
     officers and employees of any State or local law enforcement 
     agency but only if such agency is part of a team with the 
     Federal law enforcement agency in such response or 
     investigation and such information is disclosed only to 
     officers and employees who are personally and directly 
     engaged in such response or investigation.
       ``(iii) Requirements.--A request meets the requirements of 
     this clause if--

       ``(I) the request is made by the head of any Federal law 
     enforcement agency (or his delegate) involved in the response 
     to or investigation of any terrorist incident, threat, or 
     activity, and
       ``(II) the request sets forth the specific reason or 
     reasons why such disclosure may be relevant to a terrorist 
     incident, threat, or activity.

       ``(iv) Limitation on use of information.--Information 
     disclosed under this subparagraph shall be solely for the use 
     of the officers and employees to whom such information is 
     disclosed in such response or investigation.
       ``(B) Disclosure to intelligence agencies.--
       ``(i) In general.--Except as provided in paragraph (6), 
     upon receipt by the Secretary of a written request which 
     meets the requirements of clause (ii), the Secretary may 
     disclose return information (other than taxpayer return 
     information) to those officers and employees of the 
     Department of Justice, the Department of the Treasury, and 
     other Federal intelligence agencies who are personally and 
     directly engaged in the collection or analysis of 
     intelligence and counterintelligence information or 
     investigation concerning any terrorist incident, threat, or 
     activity. For purposes of the preceding sentence, the 
     information disclosed under the preceding sentence shall be 
     solely for the use of such officers and employees in such 
     investigation, collection, or analysis.
       ``(ii) Requirements.--A request meets the requirements of 
     this subparagraph if the request--

       ``(I) is made by an individual described in clause (iii), 
     and
       ``(II) sets forth the specific reason or reasons why such 
     disclosure may be relevant to a terrorist incident, threat, 
     or activity.

       ``(iii) Requesting individuals.--An individual described in 
     this subparagraph is an individual--

       ``(I) who is an officer or employee of the Department of 
     Justice or the Department of the Treasury who is appointed by 
     the President with the advice and consent of the Senate or 
     who is the Director of the United States Secret Service, and
       ``(II) who is responsible for the collection and analysis 
     of intelligence and counterintelligence information 
     concerning any terrorist incident, threat, or activity.

       ``(iv) Taxpayer identity.--For purposes of this 
     subparagraph, a taxpayer's identity shall not be treated as 
     taxpayer return information.
       ``(C) Disclosure under ex parte orders.--
       ``(i) In general.--Except as provided in paragraph (6), any 
     return or return information with respect to any specified 
     taxable period or periods shall, pursuant to and upon the 
     grant of an ex parte order by a Federal district court judge 
     or magistrate under clause (ii), be open (but only to the 
     extent necessary as provided in such order) to inspection by, 
     or disclosure to, officers and employees of any Federal law 
     enforcement agency or Federal intelligence agency who are 
     personally and directly engaged in any investigation, 
     response to, or analysis of intelligence and 
     counterintelligence information concerning any terrorist 
     incident, threat, or activity. Return or return information 
     opened pursuant to the preceding sentence shall be solely for 
     the use of such officers and employees in the investigation, 
     response, or analysis, and in any judicial, administrative, 
     or grand jury proceedings, pertaining to such terrorist 
     incident, threat, or activity.
       ``(ii) Application for order.--The Attorney General, the 
     Deputy Attorney General, the Associate Attorney General, any 
     Assistant Attorney General, or any United States attorney may 
     authorize an application to a Federal district court judge or 
     magistrate for the order referred to in clause (i). Upon such 
     application, such judge or magistrate may grant such order if 
     he determines on the basis of the facts submitted by the 
     applicant that--

       ``(I) there is reasonable cause to believe, based upon 
     information believed to be reliable, that the return or 
     return information may be relevant to a matter relating to 
     such terrorist incident, threat, or activity, and
       ``(II) the return or return information is sought 
     exclusively for use in a Federal investigation, analysis, or 
     proceeding concerning any terrorist incident, threat, or 
     activity.

       ``(D) Special rule for ex parte disclosure by the irs.--
       ``(i) In general.--Except as provided in paragraph (6), the 
     Secretary may authorize an application to a Federal district 
     court judge or magistrate for the order referred to in 
     subparagraph (C)(i). Upon such application, such judge or 
     magistrate may grant such order if he determines on the basis 
     of the facts submitted by the applicant that the requirements 
     of subparagraph (C)(ii)(I) are met.
       ``(ii) Limitation on use of information.--Information 
     disclosed under clause (i)--

       ``(I) may be disclosed only to the extent necessary to 
     apprise the head of the appropriate Federal law enforcement 
     agency responsible for investigating or responding to a 
     terrorist incident, threat, or activity, and
       ``(II) shall be solely for use in a Federal investigation, 
     analysis, or proceeding concerning any terrorist incident, 
     threat, or activity.

     The head of such Federal agency may disclose such information 
     to officers and employees of such agency to the extent 
     necessary to investigate or respond to such terrorist 
     incident, threat, or activity.
       ``(E) Termination.--No disclosure may be made under this 
     paragraph after December 31, 2003.''.
       (c) Conforming Amendments.--
       (1) Section 6103(a)(2) is amended by inserting ``any local 
     law enforcement agency receiving information under subsection 
     (i)(7)(A),'' after ``State,''.
       (2) Section 6103(b) is amended by adding at the end the 
     following new paragraph:
       ``(11) Terrorist incident, threat, or activity.--The term 
     `terrorist incident, threat, or activity' means an incident, 
     threat, or activity involving an act of domestic terrorism 
     (as defined in section 2331(5) of title 18, United States 
     Code) or international terrorism (as defined in section 
     2331(1) of such title).''.
       (3) The heading of section 6103(i)(3) is amended by 
     inserting ``or terrorist'' after ``criminal''.
       (4) Paragraph (4) of section 6103(i) is amended--
       (A) in subparagraph (A) by inserting ``or (7)(C)'' after 
     ``paragraph (1)'', and
       (B) in subparagraph (B) by striking ``or (3)(A)'' and 
     inserting ``(3)(A) or (C), or (7)''.
       (5) Paragraph (6) of section 6103(i) is amended--
       (A) by striking ``(3)(A)'' and inserting ``(3)(A) or (C)'', 
     and
       (B) by striking ``or (7)'' and inserting ``(7), or (8)''.
       (6) Section 6103(p)(3) is amended--
       (A) in subparagraph (A) by striking ``(7)(A)(ii)'' and 
     inserting ``(8)(A)(ii)'', and
       (B) in subparagraph (C) by striking ``(i)(3)(B)(i)'' and 
     inserting ``(i)(3)(B)(i) or (7)(A)(ii)''.
       (7) Section 6103(p)(4) is amended--
       (A) in the matter preceding subparagraph (A)--
       (i) by striking ``or (5),'' the first place it appears and 
     inserting ``(5), or (7),'', and
       (ii) by striking ``(i)(3)(B)(i),'' and inserting 
     ``(i)(3)(B)(i) or (7)(A)(ii),'', and
       (B) in subparagraph (F)(ii) by striking ``or (5),'' the 
     first place it appears and inserting ``(5) or (7),''.

[[Page S12013]]

       (8) Section 6103(p)(6)(B)(i) is amended by striking 
     ``(i)(7)(A)(ii)'' and inserting ``(i)(8)(A)(ii)''.
       (9) Section 6105(b) is amended--
       (A) by striking ``or'' at the end of paragraph (2),
       (B) by striking ``paragraphs (1) or (2)'' in paragraph (3) 
     and inserting ``paragraph (1), (2), or (3)'',
       (C) by redesignating paragraph (3) as paragraph (4), and
       (D) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) to the disclosure of tax convention information on 
     the same terms as return information may be disclosed under 
     paragraph (3)(C) or (7) of section 6103(i), except that in 
     the case of tax convention information provided by a foreign 
     government, no disclosure may be made under this paragraph 
     without the written consent of the foreign government, or''.
       (10) Section 7213(a)(2) is amended by striking 
     ``(i)(3)(B)(i),'' and inserting ``(i)(3)(B)(i) or 
     (7)(A)(ii),''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to disclosures made on or after the date of the 
     enactment of this Act.
       Amend the title so as to read: ``An Act to amend the 
     Internal Revenue Code of 1986 to provide tax relief for 
     victims of the terrorist attacks against the United States, 
     and for other purposes.''.
                                  ____

  SA 2164. Mr. REID (for Mr. Kerry) proposed an amendment to the bill 
S. 174, to amend the Small Business Act with respect to the microloan 
program, and for other purposes; as follows:

       At the end of the bill, add the following new section:

     SEC. 3. MICROLOAN PROGRAM CORRECTION.

       Section 7(m)(3)(F)(iii) of the Small Business Act (15 
     U.S.C. 636(m)(3)(F)(iii) is amended by striking ``$7,500'' 
     and inserting ``$10,000''.
                                  ____

  SA 2165. Mr. ALLARD submitted an amendment intended to be proposed by 
him to the bill H.R. 3090, to provide tax incentives for economic 
recovery; which was ordered to lie on the table; as follows:

       At the end of title I, insert:

     SEC. ____. REDUCTION IN CAPITAL GAINS RATES FOR INDIVIDUALS.

       (a) In General.--
       (1) 10-percent rate reduced to 7 percent.--Subparagraph (B) 
     of section 1(h)(1), as amended by section 101, is amended by 
     striking ``10 percent'' and inserting ``7 percent''.
       (2) 20-percent rate reduced to 15 percent.--Subparagraph 
     (C) of section 1(h)(1) is amended by striking ``20 percent'' 
     and inserting ``15 percent''.
       (4) Conforming amendments.--
       (A) Section 57(a)(7) is amended--
       (i) by striking ``42 percent'' and inserting ``28 
     percent'', and
       (ii) by striking the last sentence.
       (B) Paragraph (1) of section 1445(e) is amended by striking 
     ``20 percent'' and inserting ``15 percent''.
       (C) The second sentence of section 7518(g)(6)(A), and the 
     second sentence of section 607(h)(6)(A) of the Merchant 
     Marine Act, 1936, are each amended by striking ``20 percent'' 
     and inserting ``15 percent''.
       (b) Repeal of Reduced Rates for Qualified 5-Year Gain.--
       (1) In general.--Section 1(h), as amended by section 101, 
     is amended by striking paragraphs (2) and (9), by 
     redesignating paragraphs (3) through (8) as paragraphs (2) 
     through (7), respectively, and by redesignating paragraphs 
     (10) through (12) as paragraphs (8) through (10), 
     respectively.
       (2) Conforming amendments.--Subparagraph (A)(ii) of section 
     1(h)(6), as redesignated by paragraph (1), is amended--
       (A) in subclause (I) by striking ``paragraph (5)(B)'' and 
     inserting ``paragraph (4)(B)'', and
       (B) in subclause (II) by striking ``paragraph (5)(A)'' and 
     inserting ``paragraph (4)(A)''.
       (c) Minimum Tax.--
       (1) In general.--
       (A) 10-percent rate reduced to 7 percent.--Subparagraph (B) 
     of section 55(b)(3) is amended by striking ``10 percent'' and 
     inserting ``7 percent''.
       (B) 20-percent rate reduced to 15 percent.--Subparagraph 
     (C) of section 55(b)(3) is amended by striking ``20 percent'' 
     and inserting ``15 percent''.
       (2) Conforming amendment.--Paragraph (3) of section 55(b) 
     is amended in the matter following subparagraph (D) by 
     striking ``In the case of taxable years beginning after 
     December 31, 2000, rules similar to the rules of section 
     1(h)(2) shall apply for purposes of subparagraphs (B) and 
     (C).''.
       (d) Effective Dates.--
       (1) In general.--Except as provided by paragraph (2), the 
     amendments made by this section shall apply to sales or 
     exchanges after the date of the enactment of this Act, in 
     taxable years ending after such date.
       (2) Withholding.--The amendment made by subsection 
     (a)(3)(B) shall apply to amounts paid after the date of the 
     enactment of this Act.

                          ____________________