[Congressional Record Volume 149, Number 57 (Wednesday, April 9, 2003)]
[Senate]
[Pages S5094-S5095]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 527. Mr. NICKLES proposed an amendment to the bill S. 476, to 
provide incentives for charitable contributions by individuals and 
businesses, to improve the public disclosure of activities of exempt 
organizations, and to enhance the ability of low-income Americans to 
gain financial security by building assets, and for other purposes; as 
follows:

       Beginning on page 26, line 8, strike all through page 36, 
     line 13, and insert the following:

     SEC. 107. EXCLUSION OF 25 PERCENT OF GAIN ON SALES OR 
                   EXCHANGES OF LAND OR WATER INTERESTS TO 
                   NONPROFIT ENTITIES FOR CHARITABLE PURPOSES.

       (a) In General.--Part III of subchapter B of chapter 1 
     (relating to items specifically excluded from gross income) 
     is amended by inserting after section 121 the following new 
     section:

     ``SEC. 121A. 25-PERCENT EXCLUSION OF GAIN ON SALES OR 
                   EXCHANGES OF LAND OR WATER INTERESTS TO 
                   NONPROFIT ENTITIES FOR CHARITABLE PURPOSES.

       ``(a) Exclusion.--Gross income shall not include 25 percent 
     of the qualifying gain from a qualifying sale of a long-held 
     qualifying land or water interest.
       ``(b) Qualifying Gain.--For purposes of this section--
       ``(1) In general.--The term `qualifying gain' means any 
     gain which would be recognized as long-term capital gain.
       ``(2) Special rule for sales of stock.--If the long-held 
     qualifying land or water interest is 1 or more shares of 
     stock in a qualifying land or water corporation, the 
     qualifying gain is equal to the lesser of--
       ``(A) the qualifying gain determined under paragraph (1), 
     or
       ``(B) the product of--
       ``(i) the percentage of such corporation's stock which is 
     transferred by the taxpayer, times
       ``(ii) the amount which would have been the qualifying gain 
     (determined under paragraph (1)) if there had been a 
     qualifying sale by such corporation of all of its interests 
     in the land and water for a price equal to the product of the 
     fair market value of such interests times the ratio of--

       ``(I) the proceeds of the qualifying sale of the stock, to
       ``(II) the fair market value of the stock which was the 
     subject of the qualifying sale.

       ``(c) Qualifying Sale.--For purposes of this section, the 
     term `qualifying sale' means a sale or exchange which meets 
     the following requirements:
       ``(1) Transferee is an eligible entity.--The transferee of 
     the long-held qualifying land or water interest is an 
     eligible entity.
       ``(2) Qualifying letter of intent required.--At the time of 
     the sale or exchange, such transferee provides the taxpayer 
     with a qualifying letter of intent.
       ``(3) Nonapplication to certain sales.--The sale or 
     exchange is not made pursuant to an order of condemnation or 
     eminent domain.
       ``(4) Controlling interest in stock sale required.--In the 
     case of the sale or exchange of stock in a qualifying land or 
     water corporation, at the end of the taxpayer's taxable year 
     in which such sale or exchange occurs, the transferee's 
     ownership of stock in such corporation meets the requirements 
     of section 1504(a)(2) (determined by substituting `90 
     percent' for `80 percent' each place it appears).
       ``(d) Long-Held Qualifying Land or Water Interest.--For 
     purposes of this section--
       ``(1) In general.--The term `long-held qualifying land or 
     water interest' means any qualifying land or water interest 
     owned by the taxpayer or a member of the taxpayer's family 
     (as defined in section 2032A(e)(2)) at all times during the 
     5-year period ending on the date of the sale.
       ``(2) Qualifying land or water interest.--
       ``(A) In general.--The term `qualifying land or water 
     interest' means a real property interest which constitutes--
       ``(i) a taxpayer's entire interest in land,
       ``(ii) a taxpayer's entire interest in water rights,
       ``(iii) a qualified real property interest (as defined in 
     section 170(h)(2)), or
       ``(iv) stock in a qualifying land or water corporation.
       ``(B) Entire interest.--For purposes of clause (i) or (ii) 
     of subparagraph (A)--
       ``(i) a partial interest in land or water is not a 
     taxpayer's entire interest if an interest in land or water 
     was divided in order to create such partial interest in order 
     to avoid the requirements of such clause or section 
     170(f)(3)(A), and
       ``(ii) a taxpayer's entire interest in certain land does 
     not fail to satisfy subparagraph (A)(i) solely because the 
     taxpayer has retained an interest in other land, even if the 
     other land is contiguous with such certain land and was 
     acquired by the taxpayer along with such certain land in a 
     single conveyance.
       ``(e) Other Definitions.--For purposes of this section--
       ``(1) Eligible entity.--The term `eligible entity' means--
       ``(A) a governmental unit referred to in section 170(c)(1), 
     or an agency or department thereof, or
       ``(B) an entity which is described in section 
     170(b)(1)(A)(vi) or section 170(h)(3)(B).
       ``(2) Qualifying letter of intent.--The term `qualifying 
     letter of intent' means a written letter of intent which 
     includes the following statement: `The transferee's intent is 
     that this acquisition will serve 1 or more of the charitable 
     purposes of the transferee and that the use of the property 
     will continue to be consistent with such purposes, even if 
     ownership or possession of such property is subsequently 
     transferred to another person.
       ``(3) Qualifying land or water corporation.--The term 
     `qualifying land or water corporation' means a C corporation 
     (as defined in section 1361(a)(2)) if, as of the date of the 
     qualifying sale--
       ``(A) the fair market value of the corporation's interests 
     in land or water held by the corporation at all times during 
     the preceding 5 years equals or exceeds 90 percent of the 
     fair market value of all of such corporation's assets, and
       ``(B) not more than 50 percent of the total fair market 
     value of such corporation's assets consists of water rights 
     or infrastructure related to the delivery of water, or both.
       ``(f) Tax on Subsequent Transfers or Removals of Charitable 
     Use Restrictions.--
       ``(1) In general.--A tax is hereby imposed on any 
     subsequent--
       ``(A) transfer by an eligible entity of ownership or 
     possession, whether by sale, exchange, or lease, of property 
     acquired directly or indirectly in--
       ``(i) a qualifying sale described in subsection (a), or
       ``(ii) a transfer described in clause (i), (ii), or (iii) 
     of paragraph (4)(A), or
       ``(B) removal of a charitable use restriction contained in 
     an instrument of conveyance of such property.
       ``(2) Amount of tax.--The amount of tax imposed by 
     paragraph (1) on any transfer or removal shall be equal to 
     the sum of--
       ``(A) either--
       ``(i) 20 percent of the fair market value (determined at 
     the time of the transfer) of the property the ownership or 
     possession of which is transferred, or
       ``(ii) 20 percent of the fair market value (determined at 
     the time immediately after

[[Page S5095]]

     the removal) of the property upon which the charitable use 
     restriction was removed, plus
       ``(B) the product of--
       ``(i) the highest rate of tax specified in section 11, 
     times
       ``(ii) any gain or income realized by the transferor or 
     person removing such restriction as a result of the transfer 
     or removal.
       ``(3) Liability.--The tax imposed by paragraph (1) shall be 
     paid--
       ``(A) on any transfer, by the transferor, and
       ``(B) on any removal of a charitable use restriction 
     contained in an instrument of conveyance, by the person 
     removing such restriction.
       ``(4) Relief from liability.--The person (otherwise liable 
     for any tax imposed by paragraph (1)) shall be relieved of 
     liability for the tax imposed by paragraph (1)--
       ``(A) with respect to any transfer if--
       ``(i) the transferee is an eligible entity which provides 
     such person, at the time of transfer, a qualifying letter of 
     intent, or
       ``(ii) the transferee is not an eligible entity, it is 
     established to the satisfaction of the Secretary, that the 
     transfer of ownership or possession, as the case may be, will 
     be consistent with charitable purpose of the transferor, and 
     the transferee provides such person, at the time of transfer, 
     a qualifying letter of intent, or
       ``(iii) tax has previously been paid under this subsection 
     as a result of a prior transfer of ownership or possession of 
     the same property, or
       ``(B) with respect to any removal of a charitable use 
     restriction contained in an instrument of conveyance, if it 
     is established to the satisfaction of the Secretary that the 
     retention of the restriction was impracticable or impossible 
     and the proceeds continue to be used in a manner consistent 
     with 1 or more charitable purposes.
       ``(5) Administrative provisions.--For purposes of subtitle 
     F, the taxes imposed by this subsection shall be treated as 
     excise taxes with respect to which the deficiency procedures 
     of such subtitle apply.
       ``(6) Reporting.--The Secretary may require such reporting 
     as may be necessary or appropriate to further the purpose 
     under this section that any charitable use be in 
     perpetuity.''.
       (b) Clerical Amendment.--The table of sections for part III 
     of subchapter B of chapter 1 is amended by inserting after 
     the item relating to section 121 the following new item:

``Sec. 121A. 25-percent exclusion of gain on sales or exchanges of land 
              or water interests to nonprofit entities for charitable 
              purposes.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to sales or exchanges occurring after December 
     31, 2003, in taxable years ending after such date.

     SEC. 107A. EXTENSION OF INTERNAL REVENUE SERVICE USER FEES.

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

     ``SEC. 7528. INTERNAL REVENUE SERVICE USER FEES.

       ``(a) General Rule.--The Secretary shall establish a 
     program requiring the payment of user fees for--
       ``(1) requests to the Internal Revenue Service for ruling 
     letters, opinion letters, and determination letters, and
       ``(2) other similar requests.
       ``(b) Program Criteria.--
       ``(1) In general.--The fees charged under the program 
     required by subsection (a)--
       ``(A) shall vary according to categories (or subcategories) 
     established by the Secretary,
       ``(B) shall be determined after taking into account the 
     average time for (and difficulty of) complying with requests 
     in each category (and subcategory), and
       ``(C) shall be payable in advance.
       ``(2) Exemptions, etc.--
       ``(A) In general.--The Secretary shall provide for such 
     exemptions (and reduced fees) under such program as the 
     Secretary determines to be appropriate.
       ``(B) Exemption for certain requests regarding pension 
     plans.--The Secretary shall not require payment of user fees 
     under such program for requests for determination letters 
     with respect to the qualified status of a pension benefit 
     plan maintained solely by 1 or more eligible employers or any 
     trust which is part of the plan. The preceding sentence shall 
     not apply to any request--
       ``(i) made after the later of--

       ``(I) the fifth plan year the pension benefit plan is in 
     existence, or
       ``(II) the end of any remedial amendment period with 
     respect to the plan beginning within the first 5 plan years, 
     or

       ``(ii) made by the sponsor of any prototype or similar plan 
     which the sponsor intends to market to participating 
     employers.
       ``(C) Definitions and special rules.--For purposes of 
     subparagraph (B)--
       ``(i) Pension benefit plan.--The term `pension benefit 
     plan' means a pension, profit-sharing, stock bonus, annuity, 
     or employee stock ownership plan.
       ``(ii) Eligible employer.--The term `eligible employer' 
     means an eligible employer (as defined in section 
     408(p)(2)(C)(i)(I)) which has at least 1 employee who is not 
     a highly compensated employee (as defined in section 414(q)) 
     and is participating in the plan. The determination of 
     whether an employer is an eligible employer under 
     subparagraph (B) shall be made as of the date of the request 
     described in such subparagraph.
       ``(iii) Determination of average fees charged.--For 
     purposes of any determination of average fees charged, any 
     request to which subparagraph (B) applies shall not be taken 
     into account.
       ``(3) Average fee requirement.--The average fee charged 
     under the program required by subsection (a) shall not be 
     less than the amount determined under the following table:

                                                                Average
``Category                                                          fee
  Employee plan ruling and opinion............................$250 ....

  Exempt organization ruling..................................$350 ....

  Employee plan determination.................................$300 ....

  Exempt organization determination...........................$275 ....

  Chief counsel ruling........................................$200.....

       ``(c) Termination.--No fee shall be imposed under this 
     section with respect to requests made after September 30, 
     2007.''.
       (b) Conforming Amendments.--
       (1) The table of sections for chapter 77 is amended by 
     adding at the end the following new item:

``Sec. 7528. Internal Revenue Service user fees.''.

       (2) Section 10511 of the Revenue Act of 1987 is repealed.
       (3) Section 620 of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 is repealed.
       (c) Limitations.--Notwithstanding any other provision of 
     law, any fees collected pursuant to section 7528 of the 
     Internal Revenue Code of 1986, as added by subsection (a), 
     shall not be expended by the Internal Revenue Service unless 
     provided by an appropriations Act.
       (d) Effective Date.--The amendments made by this section 
     shall apply to requests made after the date of the enactment 
     of this Act.
                                 ______
                                 
  SA 528. Mr. LIEBERMAN proposed an amendment to the concurrent 
resolution S. Con. Res. 31, expressing the outrage of Congress at the 
treatment of certain American prisoners of war by the Government of 
Iraq; as follows:

       In the preamble strike the first 6 whereas clauses, and 
     insert:
       Whereas Saddam Hussein has failed to comply with United 
     Nations Security Council Resolutions 678, 686, 687, 688, 707, 
     715, 949, 1051, 1060, 1115, 1134, 1137, 1154, 1194, 1205, 
     1284, and 1441;
       Whereas the military action now underway against Iraq is 
     lawful and fully authorized by the Congress in Sec. 3(a) of 
     Public Law 107-243, which passed the Senate on October 11, 
     2002, by a vote of 77-23, and which passed the House of 
     Representatives on the same date by a vote of 296-133;

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