[Congressional Record (Bound Edition), Volume 145 (1999), Part 18]
[Senate]
[Pages 26604-26611]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 26604]]

                          AMENDMENTS SUBMITTED

                                 ______
                                 

                 THE AFRICAN GROWTH AND OPPORTUNITY ACT

                                 ______
                                 

                 ROTH (AND MOYNIHAN) AMENDMENT NO. 2325

  (Ordered to lie on the table.)
  Mr. ROTH (for himself and Mr. Moynihan) submitted an amendment 
intended to be proposed by them to the bill (H.R. 434) to authorize a 
new trade and investment policy for sub-Sahara Africa; as follows:

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Trade and 
     Development Act of 1999''.
       (b) Table of Contents.--

Sec. 1. Short title; table of contents.

   TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA

            Subtitle A--Trade Policy for Sub-Saharan Africa

Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Statement of policy.
Sec. 104. Sub-Saharan Africa defined.

 Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

Sec. 111. Eligibility for certain benefits.
Sec. 112. Treatment of certain textiles and apparel.
Sec. 113. United States-sub-Saharan African trade and economic 
              cooperation forum.
Sec. 114. United States-sub-Saharan Africa free trade area.
Sec. 115. Reporting requirement.

              TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN

         Subtitle A--Trade Policy for Caribbean Basin Countries

Sec. 201. Short title.
Sec. 202. Findings and policy.
Sec. 203. Definitions.

        Subtitle B--Trade Benefits for Caribbean Basin Countries

Sec. 211. Temporary provisions to provide additional trade benefits to 
              certain beneficiary countries.
Sec. 212. Adequate and effective protection for intellectual property 
              rights.

           Subtitle C--Cover Over of Tax on Distilled Spirits

Sec. 221. Suspension of limitation on cover over of tax on distilled 
              spirits.

              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

Sec. 301. Extension of duty-free treatment under generalized system of 
              preferences.
Sec. 302. Entry procedures for foreign trade zone operations.

                 TITLE IV--TRADE ADJUSTMENT ASSISTANCE

Sec. 401. Trade adjustment assistance.

                      TITLE V--REVENUE PROVISIONS

Sec. 501. Modification of installment method and repeal of installment 
              method for accrual method taxpayers.
Sec. 502. Limitations on welfare benefit funds of 10 or more employer 
              plans.
Sec. 503. Treatment of gain from constructive ownership transactions.
Sec. 504. Limitation on use of nonaccrual experience method of 
              accounting.
Sec. 505. Allocation of basis on transfers of intangibles in certain 
              nonrecognition transactions.
Sec. 506. Increase in elective withholding rate for nonperiodic 
              distributions from deferred compensation plans.
   TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA
            Subtitle A--Trade Policy for Sub-Saharan Africa

     SEC. 101. SHORT TITLE.

       This title may be cited as the ``African Growth and 
     Opportunity Act''.

     SEC. 102. FINDINGS.

       Congress finds that--
       (1) it is in the mutual interest of the United States and 
     the countries of sub-Saharan Africa to promote stable and 
     sustainable economic growth and development in sub-Saharan 
     Africa;
       (2) the 48 countries of sub-Saharan Africa form a region 
     richly endowed with both natural and human resources;
       (3) sub-Saharan Africa represents a region of enormous 
     economic potential and of enduring political significance to 
     the United States;
       (4) the region has experienced a rise in both economic 
     development and political freedom as countries in sub-Saharan 
     Africa have taken steps toward liberalizing their economies 
     and encouraged broader participation in the political 
     process;
       (5) the countries of sub-Saharan Africa have made progress 
     toward regional economic integration that can have positive 
     benefits for the region;
       (6) despite those gains, the per capita income in sub-
     Saharan Africa averages less than $500 annually;
       (7) United States foreign direct investment in the region 
     has fallen in recent years and the sub-Saharan African region 
     receives only minor inflows of direct investment from around 
     the world;
       (8) trade between the United States and sub-Saharan Africa, 
     apart from the import of oil, remains an insignificant part 
     of total United States trade;
       (9) trade and investment, as the American experience has 
     shown, can represent powerful tools both for economic 
     development and for building a stable political environment 
     in which political freedom can flourish;
       (10) increased trade and investment flows have the greatest 
     impact in an economic environment in which trading partners 
     eliminate barriers to trade and capital flows and encourage 
     the development of a vibrant private sector that offers 
     individual African citizens the freedom to expand their 
     economic opportunities and provide for their families;
       (11) offering the countries of sub-Saharan Africa enhanced 
     trade preferences will encourage both higher levels of trade 
     and direct investment in support of the positive economic and 
     political developments under way throughout the region; and
       (12) encouraging the reciprocal reduction of trade and 
     investment barriers in Africa will enhance the benefits of 
     trade and investment for the region as well as enhance 
     commercial and political ties between the United States and 
     sub-Saharan Africa.

     SEC. 103. STATEMENT OF POLICY.

       Congress supports--
       (1) encouraging increased trade and investment between the 
     United States and sub-Saharan Africa;
       (2) reducing tariff and nontariff barriers and other 
     obstacles to sub-Saharan African and United States trade;
       (3) expanding United States assistance to sub-Saharan 
     Africa's regional integration efforts;
       (4) negotiating reciprocal and mutually beneficial trade 
     agreements, including the possibility of establishing free 
     trade areas that serve the interests of both the United 
     States and the countries of sub-Saharan Africa;
       (5) focusing on countries committed to accountable 
     government, economic reform, and the eradication of poverty;
       (6) strengthening and expanding the private sector in sub-
     Saharan Africa;
       (7) supporting the development of civil societies and 
     political freedom in sub-Saharan Africa; and
       (8) establishing a United States-Sub-Saharan African 
     Economic Cooperation Forum.

     SEC. 104. SUB-SAHARAN AFRICA DEFINED.

       In this title, the terms ``sub-Saharan Africa'', ``sub-
     Saharan African country'', ``country in sub-Saharan Africa'', 
     and ``countries in sub-Saharan Africa'' refer to the 
     following:
       (1) Republic of Angola (Angola).
       (2) Republic of Botswana (Botswana).
       (3) Republic of Burundi (Burundi).
       (4) Republic of Cape Verde (Cape Verde).
       (5) Republic of Chad (Chad).
       (6) Democratic Republic of Congo.
       (7) Republic of the Congo (Congo).
       (8) Republic of Djibouti (Djibouti).
       (9) State of Eritrea (Eritrea).
       (10) Gabonese Republic (Gabon).
       (11) Republic of Ghana (Ghana).
       (12) Republic of Guinea-Bissau (Guinea-Bissau).
       (13) Kingdom of Lesotho (Lesotho).
       (14) Republic of Madagascar (Madagascar).
       (15) Republic of Mali (Mali).
       (16) Republic of Mauritius (Mauritius).
       (17) Republic of Namibia (Namibia).
       (18) Federal Republic of Nigeria (Nigeria).
       (19) Democratic Republic of Sao Tome and Principe (Sao Tome 
     and Principe).
       (20) Republic of Sierra Leone (Sierra Leone).
       (21) Somalia.
       (22) Kingdom of Swaziland (Swaziland).
       (23) Republic of Togo (Togo).
       (24) Republic of Zimbabwe (Zimbabwe).
       (25) Republic of Benin (Benin).
       (26) Burkina Faso (Burkina).
       (27) Republic of Cameroon (Cameroon).
       (28) Central African Republic.
       (29) Federal Islamic Republic of the Comoros (Comoros).
       (30) Republic of Cote d'Ivoire (Cote d'Ivoire).
       (31) Republic of Equatorial Guinea (Equatorial Guinea).
       (32) Ethiopia.
       (33) Republic of the Gambia (Gambia).
       (34) Republic of Guinea (Guinea).
       (35) Republic of Kenya (Kenya).
       (36) Republic of Liberia (Liberia).
       (37) Republic of Malawi (Malawi).
       (38) Islamic Republic of Mauritania (Mauritania).
       (39) Republic of Mozambique (Mozambique).

[[Page 26605]]

       (40) Republic of Niger (Niger).
       (41) Republic of Rwanda (Rwanda).
       (42) Republic of Senegal (Senegal).
       (43) Republic of Seychelles (Seychelles).
       (44) Republic of South Africa (South Africa).
       (45) Republic of Sudan (Sudan).
       (46) United Republic of Tanzania (Tanzania).
       (47) Republic of Uganda (Uganda).
       (48) Republic of Zambia (Zambia).
 Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

     SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.

       (a) In General.--Title V of the Trade Act of 1974 is 
     amended by inserting after section 506 the following new 
     section:

     ``SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR 
                   CERTAIN BENEFITS.

       ``(a) Authority To Designate.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the President is authorized to designate a country 
     listed in section 104 of the African Growth and Opportunity 
     Act as a beneficiary sub-Saharan African country eligible for 
     the benefits described in subsection (b), if the President 
     determines that the country--
       ``(A) has established, or is making continual progress 
     toward establishing--
       ``(i) a market-based economy, where private property rights 
     are protected and the principles of an open, rules-based 
     trading system are observed;
       ``(ii) a democratic society, where the rule of law, 
     political freedom, participatory democracy, and the right to 
     due process and a fair trial are observed;
       ``(iii) an open trading system through the elimination of 
     barriers to United States trade and investment and the 
     resolution of bilateral trade and investment disputes; and
       ``(iv) economic policies to reduce poverty, increase the 
     availability of health care and educational opportunities, 
     expand physical infrastructure, and promote the establishment 
     of private enterprise;
       ``(B) does not engage in gross violations of 
     internationally recognized human rights or provide support 
     for acts of international terrorism and cooperates in 
     international efforts to eliminate human rights violations 
     and terrorist activities; and
       ``(C) subject to the authority granted to the President 
     under section 502 (a), (d), and (e), otherwise satisfies the 
     eligibility criteria set forth in section 502.
       ``(2) Monitoring and review of certain countries.--The 
     President shall monitor and review the progress of each 
     country listed in section 104 of the African Growth and 
     Opportunity Act in meeting the requirements described in 
     paragraph (1) in order to determine the current or potential 
     eligibility of each country to be designated as a beneficiary 
     sub-Saharan African country for purposes of subsection (a). 
     The President shall include the reasons for the President's 
     determinations in the annual report required by section 115 
     of the African Growth and Opportunity Act.
       ``(3) Continuing compliance.--If the President determines 
     that a beneficiary sub-Saharan African country is not making 
     continual progress in meeting the requirements described in 
     paragraph (1), the President shall terminate the designation 
     of that country as a beneficiary sub-Saharan African country 
     for purposes of this section, effective on January 1 of the 
     year following the year in which such determination is made.
       ``(b) Preferential Tariff Treatment for Certain Articles.--
       ``(1) In general.--The President may provide duty-free 
     treatment for any article described in section 503(b)(1) (B) 
     through (G) (except for textile luggage) that is the growth, 
     product, or manufacture of a beneficiary sub-Saharan African 
     country described in subsection (a), if, after receiving the 
     advice of the International Trade Commission in accordance 
     with section 503(e), the President determines that such 
     article is not import-sensitive in the context of imports 
     from beneficiary sub-Saharan African countries.
       ``(2) Rules of origin.--The duty-free treatment provided 
     under paragraph (1) shall apply to any article described in 
     that paragraph that meets the requirements of section 
     503(a)(2), except that--
       ``(A) if the cost or value of materials produced in the 
     customs territory of the United States is included with 
     respect to that article, an amount not to exceed 15 percent 
     of the appraised value of the article at the time it is 
     entered that is attributed to such United States cost or 
     value may be applied toward determining the percentage 
     referred to in subparagraph (A) of section 503(a)(2); and
       ``(B) the cost or value of the materials included with 
     respect to that article that are produced in one or more 
     beneficiary sub-Saharan African countries shall be applied in 
     determining such percentage.
       ``(c) Beneficiary Sub-Saharan African Countries, etc.--For 
     purposes of this title, the terms `beneficiary sub-Saharan 
     African country' and `beneficiary sub-Saharan African 
     countries' mean a country or countries listed in section 104 
     of the African Growth and Opportunity Act that the President 
     has determined is eligible under subsection (a) of this 
     section.''.
       (b) Waiver of Competitive Need Limitation.--Section 
     503(c)(2)(D) of the Trade Act of 1974 (19 U.S.C. 
     2463(c)(2)(D)) is amended to read as follows:
       ``(D) Least-developed beneficiary developing countries and 
     beneficiary sub-saharan african countries.--Subparagraph (A) 
     shall not apply to any least-developed beneficiary developing 
     country or any beneficiary sub-Saharan African country.''.
       (c) Termination.--Title V of the Trade Act of 1974 is 
     amended by inserting after section 506A, as added by 
     subsection (a), the following new section:

     ``SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN 
                   COUNTRIES.

       ``In the case of a country listed in section 104 of the 
     African Growth and Opportunity Act that is a beneficiary 
     developing country, duty-free treatment provided under this 
     title shall remain in effect through September 30, 2006.''.
       (d) Clerical Amendments.--The table of contents for title V 
     of the Trade Act of 1974 is amended by inserting after the 
     item relating to section 505 the following new items:

``506A. Designation of sub-Saharan African countries for certain 
              benefits.
``506B. Termination of benefits for sub-Saharan African countries.''.

       (e) Effective Date.--The amendments made by this section 
     take effect on October 1, 2000.

     SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.

       (a) Preferential Treatment.--Notwithstanding any other 
     provision of law, textile and apparel articles described in 
     subsection (b) (including textile luggage) imported from a 
     beneficiary sub-Saharan African country, described in section 
     506A(c) of the Trade Act of 1974, shall enter the United 
     States free of duty and free of any quantitative limitations, 
     if--
       (1) the country adopts an efficient visa system to guard 
     against unlawful transshipment of textile and apparel goods 
     and the use of counterfeit documents; and
       (2) the country enacts legislation or promulgates 
     regulations that would permit United States Customs Service 
     verification teams to have the access necessary to 
     investigate thoroughly allegations of transshipment through 
     such country.
       (b) Products Covered.--The preferential treatment described 
     in subsection (a) shall apply only to the following textile 
     and apparel products:
       (1) Apparel articles assembled in beneficiary sub-saharan 
     african countries.--Apparel articles assembled in one or more 
     beneficiary sub-Saharan African countries from fabrics wholly 
     formed and cut in the United States, from yarns wholly formed 
     in the United States that are--
       (A) entered under subheading 9802.00.80 of the Harmonized 
     Tariff Schedule of the United States; or
       (B) entered under chapter 61 or 62 of the Harmonized Tariff 
     Schedule of the United States, if, after such assembly, the 
     articles would have qualified for entry under subheading 
     9802.00.80 of the Harmonized Tariff Schedule of the United 
     States but for the fact that the articles were subjected to 
     stone-washing, enzyme-washing, acid washing, perma-pressing, 
     oven-baking, bleaching, garment-dyeing, or other similar 
     processes.
       (2) Apparel articles cut and assembled in beneficiary sub-
     saharan african countries.--Apparel articles cut in one or 
     more beneficiary sub-Saharan African countries from fabric 
     wholly formed in the United States from yarns wholly formed 
     in the United States, if such articles are assembled in one 
     or more beneficiary sub-Saharan African countries with thread 
     formed in the United States.
       (3) Handloomed, handmade, and folklore articles.--A 
     handloomed, handmade, or folklore article of a beneficiary 
     sub-Saharan African country or countries that is certified as 
     such by the competent authority of such beneficiary country 
     or countries. For purposes of this paragraph, the President, 
     after consultation with the beneficiary sub-Saharan African 
     country or countries concerned, shall determine which, if 
     any, particular textile and apparel goods of the country (or 
     countries) shall be treated as being handloomed, handmade, or 
     folklore goods.
       (c) Penalties for Transshipments.--
       (1) Penalties for exporters.--If the President determines, 
     based on sufficient evidence, that an exporter has engaged in 
     transshipment with respect to textile or apparel products 
     from a beneficiary sub-Saharan African country, then the 
     President shall deny all benefits under this section and 
     section 506A of the Trade Act of 1974 to such exporter, any 
     successor of such exporter, and any other entity owned or 
     operated by the principal of the exporter for a period of 2 
     years.
       (2) Transshipment described.--Transshipment within the 
     meaning of this subsection has occurred when preferential 
     treatment for a textile or apparel article under subsection 
     (a) has been claimed on the basis of material false 
     information concerning the country of origin, manufacture, 
     processing, or assembly of the article or any of its 
     components. For purposes of this paragraph, false information 
     is material if disclosure of the true information would mean 
     or would

[[Page 26606]]

     have meant that the article is or was ineligible for 
     preferential treatment under subsection (a).
       (d) Technical Assistance.--The Customs Service shall 
     provide technical assistance to the beneficiary sub-Saharan 
     African countries for the implementation of the requirements 
     set forth in subsection (a) (1) and (2).
       (e) Monitoring and Reports to Congress.--The Customs 
     Service shall monitor and the Commissioner of Customs shall 
     submit to Congress, not later than March 31 of each year that 
     this section is in effect, a report on the effectiveness of 
     the anti-circumvention systems described in this section and 
     on measures taken by countries in sub-Saharan Africa which 
     export textiles or apparel to the United States to prevent 
     circumvention as described in article 5 of the Agreement on 
     Textiles and Clothing.
       (f) Safeguard.--The President shall have the authority to 
     impose appropriate remedies, including restrictions on or the 
     removal of quota-free and duty-free treatment provided under 
     this section, in the event that textile and apparel articles 
     from a beneficiary sub-Saharan African country are being 
     imported in such increased quantities as to cause serious 
     damage, or actual threat thereof, to the domestic industry 
     producing like or directly competitive articles. The 
     President shall exercise his authority under this subsection 
     consistent with the Agreement on Textiles and Clothing.
       (g) Definitions.--In this section:
       (1) Agreement on textiles and clothing.--The term 
     ``Agreement on Textiles and Clothing'' means the Agreement on 
     Textiles and Clothing referred to in section 101(d)(4) of the 
     Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).
       (2) Beneficiary sub-saharan african country, etc.--The 
     terms ``beneficiary sub-Saharan African country'' and 
     ``beneficiary sub-Saharan African countries'' have the same 
     meaning as such terms have under section 506A(c) of the Trade 
     Act of 1974.
       (3) Customs service.--The term ``Customs Service'' means 
     the United States Customs Service.
       (h) Effective Date.--The amendments made by this section 
     take effect on October 1, 2000 and shall remain in effect 
     through September 30, 2006.

     SEC. 113. UNITED STATES-SUB-SAHARAN AFRICAN TRADE AND 
                   ECONOMIC COOPERATION FORUM.

       (a) Declaration of Policy.--The President shall convene 
     annual meetings between senior officials of the United States 
     Government and officials of the governments of sub-Saharan 
     African countries in order to foster close economic ties 
     between the United States and sub-Saharan Africa.
       (b) Establishment.--Not later than 12 months after the date 
     of enactment of this Act, the President, after consulting 
     with the officials of interested sub-Saharan African 
     governments, shall establish a United States-Sub-Saharan 
     African Trade and Economic Cooperation Forum (in this section 
     referred to as the ``Forum'').
       (c) Requirements.--In creating the Forum, the President 
     shall meet the following requirements:
       (1) First meeting.--The President shall direct the 
     Secretary of Commerce, the Secretary of the Treasury, the 
     Secretary of State, and the United States Trade 
     Representative to invite their counterparts from interested 
     sub-Saharan African governments and representatives of 
     appropriate regional organizations to participate in the 
     first annual meeting to discuss expanding trade and 
     investment relations between the United States and sub-
     Saharan Africa.
       (2) Nongovernmental organizations.--
       (A) In general.--The President, in consultation with 
     Congress, shall invite United States nongovernmental 
     organizations to host meetings with their counterparts from 
     sub-Saharan Africa in conjunction with meetings of the Forum 
     for the purpose of discussing the issues described in 
     paragraph (1).
       (B) Private sector.--The President, in consultation with 
     Congress, shall invite United States representatives of the 
     private sector to host meetings with their counterparts from 
     sub-Saharan Africa in conjunction with meetings of the Forum 
     for the purpose of discussing the issues described in 
     paragraph (1).
       (3) Annual meetings.--As soon as practicable after the date 
     of enactment of this Act, the President shall meet with the 
     heads of the governments of interested sub-Saharan African 
     countries for the purpose of discussing the issues described 
     in paragraph (1).

     SEC. 114. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.

       (a) In General.--The President shall examine the 
     feasibility of negotiating a free trade agreement (or 
     agreements) with interested sub-Saharan African countries.
       (b) Report to Congress.--Not later than 12 months after the 
     date of enactment of this Act, the President shall submit a 
     report to the Committee on Finance of the Senate and the 
     Committee on Ways and Means of the House of Representatives 
     regarding the President's conclusions on the feasibility of 
     negotiating such agreement (or agreements). If the President 
     determines that the negotiation of any such free trade 
     agreement is feasible, the President shall provide a detailed 
     plan for such negotiation that outlines the objectives, 
     timing, any potential benefits to the United States and sub-
     Saharan Africa, and the likely economic impact of any such 
     agreement.

     SEC. 115. REPORTING REQUIREMENT.

       Not later than 1 year after the date of enactment of this 
     Act, and annually thereafter for 4 years, the President shall 
     submit a report to Congress on the implementation of this 
     title.
              TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN
         Subtitle A--Trade Policy for Caribbean Basin Countries

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``United States-Caribbean 
     Basin Trade Enhancement Act''.

     SEC. 202. FINDINGS AND POLICY.

       (a) Findings.--Congress makes the following findings:
       (1) The Caribbean Basin Economic Recovery Act (referred to 
     in this title as ``CBERA'') represents a permanent commitment 
     by the United States to encourage the development of strong 
     democratic governments and revitalized economies in 
     neighboring countries in the Caribbean Basin.
       (2) Thirty-four democratically elected leaders agreed at 
     the 1994 Summit of the Americas to conclude negotiation of a 
     Free Trade Area of the Americas (referred to in this title as 
     ``FTAA'') by the year 2005.
       (3) The economic security of the countries in the Caribbean 
     Basin will be enhanced by the completion of the FTAA.
       (4) Offering temporary benefits to Caribbean Basin 
     countries will enhance trade between the United States and 
     the Caribbean Basin, encourage development of trade and 
     investment policies that will facilitate participation of 
     Caribbean Basin countries in the FTAA, preserve the United 
     States commitment to Caribbean Basin beneficiary countries, 
     help further economic development in the Caribbean Basin 
     region, and accelerate the trend toward more open economies 
     in the region.
       (5) Promotion of the growth of free enterprise and economic 
     opportunity in the Caribbean Basin will enhance the national 
     security interests of the United States.
       (6) Increased trade and economic activity between the 
     United States and Caribbean Basin beneficiary countries will 
     create expanding export opportunities for United States 
     businesses and workers.
       (b) Policy.--It is the policy of the United States to--
       (1) offer Caribbean Basin beneficiary countries willing to 
     prepare to become a party to the FTAA or a comparable trade 
     agreement, tariff treatment essentially equivalent to that 
     accorded to products of NAFTA countries for certain products 
     not currently eligible for duty-free treatment under the 
     CBERA; and
       (2) seek the participation of Caribbean Basin beneficiary 
     countries in the FTAA or a trade agreement comparable to the 
     FTAA at the earliest possible date, with the goal of 
     achieving full participation in such agreement not later than 
     2005.

     SEC. 203. DEFINITIONS.

       In this title:
       (1) Beneficiary country.--The term ``beneficiary country'' 
     has the meaning given the term in section 212(a)(1)(A) of the 
     Caribbean Basin Economic Recovery Act (19 U.S.C. 
     2702(a)(1)(A)).
       (2) CBTEA.--The term ``CBTEA'' means the United States-
     Caribbean Basin Trade Enhancement Act.
       (3) NAFTA.--The term ``NAFTA'' means the North American 
     Free Trade Agreement entered into between the United States, 
     Mexico, and Canada on December 17, 1992.
       (4) NAFTA country.--The term ``NAFTA country'' means any 
     country with respect to which the NAFTA is in force.
       (5) WTO and wto member.--The terms ``WTO'' and ``WTO 
     member'' have the meanings given those terms in section 2 of 
     the Uruguay Round Agreements Act (19 U.S.C. 3501).
        Subtitle B--Trade Benefits for Caribbean Basin Countries

     SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE 
                   BENEFITS TO CERTAIN BENEFICIARY COUNTRIES.

       (a) Temporary Provisions.--Section 213(b) of the Caribbean 
     Basin Economic Recovery Act (19 U.S.C. 2703(b)) is amended to 
     read as follows:
       ``(b) Import-Sensitive Articles.--
       ``(1) In general.--Subject to paragraphs (2) through (5), 
     the duty-free treatment provided under this title does not 
     apply to--
       ``(A) textile and apparel articles which were not eligible 
     articles for purposes of this title on January 1, 1994, as 
     this title was in effect on that date;
       ``(B) footwear not designated at the time of the effective 
     date of this title as eligible articles for the purpose of 
     the generalized system of preferences under title V of the 
     Trade Act of 1974;
       ``(C) tuna, prepared or preserved in any manner, in 
     airtight containers;
       ``(D) petroleum, or any product derived from petroleum, 
     provided for in headings 2709 and 2710 of the HTS;
       ``(E) watches and watch parts (including cases, bracelets, 
     and straps), of whatever type including, but not limited to, 
     mechanical, quartz digital or quartz analog, if such

[[Page 26607]]

     watches or watch parts contain any material which is the 
     product of any country with respect to which HTS column 2 
     rates of duty apply; or
       ``(F) articles to which reduced rates of duty apply under 
     subsection (h).
       ``(2) Transition period treatment of certain textile and 
     apparel articles.--
       ``(A) Products covered.--During the transition period, the 
     preferential treatment described in subparagraph (B) shall 
     apply to the following products:
       ``(i) Apparel articles assembled in a cbtea beneficiary 
     country.--Apparel articles assembled in a CBTEA beneficiary 
     country from fabrics wholly formed and cut in the United 
     States, from yarns wholly formed in the United States that 
     are--

       ``(I) entered under subheading 9802.00.80 of the HTS; or
       ``(II) entered under chapter 61 or 62 of the HTS, if, after 
     such assembly, the articles would have qualified for entry 
     under subheading 9802.00.80 of the HTS but for the fact that 
     the articles were subjected to stone-washing, enzyme-washing, 
     acid washing, perma-pressing, oven-baking, bleaching, 
     garment-dyeing, or other similar processes.

       ``(ii) Apparel articles cut and assembled in a cbtea 
     beneficiary country.--Apparel articles cut in a CBTEA 
     beneficiary country from fabric wholly formed in the United 
     States from yarns wholly formed in the United States, if such 
     articles are assembled in such country with thread formed in 
     the United States.
       ``(iii) Handloomed, handmade, and folklore articles.--A 
     handloomed, handmade, or folklore article of a CBTEA 
     beneficiary country identified under subparagraph (C) that is 
     certified as such by the competent authority of such 
     beneficiary country.
       ``(iv) Textile luggage.--Textile luggage--

       ``(I) assembled in a CBTEA beneficiary country from fabric 
     wholly formed and cut in the United States, from yarns wholly 
     formed in the United States, that is entered under subheading 
     9802.00.80 of the HTS; or
       ``(II) assembled from fabric cut in a CBTEA beneficiary 
     country from fabric wholly formed in the United States from 
     yarns wholly formed in the United States, if such luggage is 
     assembled in such country with thread formed in the United 
     States.

       ``(B) Preferential treatment.--Except as provided in 
     subparagraph (E), during the transition period, the articles 
     described in subparagraph (A) shall enter the United States 
     free of duty and free of any quantitative limitations.
       ``(C) Handloomed, handmade, and folklore articles 
     defined.--For purposes of subparagraph (A)(iii), the 
     President, after consultation with the CBTEA beneficiary 
     country concerned, shall determine which, if any, particular 
     textile and apparel goods of the country shall be treated as 
     being handloomed, handmade, or folklore goods of a kind 
     described in section 2.3 (a), (b), or (c) or Appendix 
     3.1.B.11 of the Annex.
       ``(D) Penalties for transshipments.--
       ``(i) Penalties for exporters.--If the President 
     determines, based on sufficient evidence, that an exporter 
     has engaged in transshipment with respect to textile or 
     apparel products from a CBTEA beneficiary country, then the 
     President shall deny all benefits under this title to such 
     exporter, and any successor of such exporter, for a period of 
     2 years.
       ``(ii) Penalties for countries.--Whenever the President 
     finds, based on sufficient evidence, that transshipment has 
     occurred, the President shall request that the CBTEA 
     beneficiary country or countries through whose territory the 
     transshipment has occurred take all necessary and appropriate 
     actions to prevent such transshipment. If the President 
     determines that a country is not taking such actions, the 
     President shall reduce the quantities of textile and apparel 
     articles that may be imported into the United States from 
     such country by the quantity of the transshipped articles 
     multiplied by 3.
       ``(iii) Transshipment described.--Transshipment within the 
     meaning of this subparagraph has occurred when preferential 
     treatment for a textile or apparel article under subparagraph 
     (B) has been claimed on the basis of material false 
     information concerning the country of origin, manufacture, 
     processing, or assembly of the article or any of its 
     components. For purposes of this clause, false information is 
     material if disclosure of the true information would mean or 
     would have meant that the article is or was ineligible for 
     preferential treatment under subparagraph (B).
       ``(E) Bilateral emergency actions.--
       ``(i) In general.--The President may take bilateral 
     emergency tariff actions of a kind described in section 4 of 
     the Annex with respect to any apparel article imported from a 
     CBTEA beneficiary country if the application of tariff 
     treatment under subparagraph (B) to such article results in 
     conditions that would be cause for the taking of such actions 
     under such section 4 with respect to a like article described 
     in the same 8-digit subheading of the HTS that is imported 
     from Mexico.
       ``(ii) Rules relating to bilateral emergency action.--For 
     purposes of applying bilateral emergency action under this 
     subparagraph--

       ``(I) the requirements of paragraph (5) of section 4 of the 
     Annex (relating to providing compensation) shall not apply;
       ``(II) the term `transition period' in section 4 of the 
     Annex shall have the meaning given that term in paragraph 
     (5)(D) of this subsection; and
       ``(III) the requirements to consult specified in section 4 
     of the Annex shall be treated as satisfied if the President 
     requests consultations with the beneficiary country in 
     question and the country does not agree to consult within the 
     time period specified under section 4.

       ``(3) Transition period treatment of certain other articles 
     originating in beneficiary countries.--
       ``(A) Equivalent tariff treatment.--
       ``(i) In general.--Subject to clause (ii), the tariff 
     treatment accorded at any time during the transition period 
     to any article referred to in any of subparagraphs (B) 
     through (F) of paragraph (1) that originates in the territory 
     of a CBTEA beneficiary country shall be identical to the 
     tariff treatment that is accorded at such time under Annex 
     302.2 of the NAFTA to an article described in the same 8-
     digit subheading of the HTS that is a good of Mexico and is 
     imported into the United States.
       ``(ii) Exception.--Clause (i) does not apply to any article 
     accorded duty-free treatment under U.S. Note 2(b) to 
     subchapter II of chapter 98 of the HTS.
       ``(B) Relationship to subsection (h) duty reductions.--If 
     at any time during the transition period the rate of duty 
     that would (but for action taken under subparagraph (A)(i) in 
     regard to such period) apply with respect to any article 
     under subsection (h) is a rate of duty that is lower than the 
     rate of duty resulting from such action, then such lower rate 
     of duty shall be applied for the purposes of implementing 
     such action.
       ``(4) Customs procedures.--
       ``(A) In general.--
       ``(i) Regulations.--Any importer that claims preferential 
     treatment under paragraph (2) or (3) shall comply with 
     customs procedures similar in all material respects to the 
     requirements of Article 502(1) of the NAFTA as implemented 
     pursuant to United States law, in accordance with regulations 
     promulgated by the Secretary of the Treasury.
       ``(ii) Determination.--

       ``(I) In general.--In order to qualify for the preferential 
     treatment under paragraph (2) or (3) and for a Certificate of 
     Origin to be valid with respect to any article for which such 
     treatment is claimed, there shall be in effect a 
     determination by the President that each country described in 
     subclause (II)--

       ``(aa) has implemented and follows, or
       ``(bb) is making substantial progress toward implementing 
     and following,

     procedures and requirements similar in all material respects 
     to the relevant procedures and requirements under chapter 5 
     of the NAFTA.
       ``(II) Country described.--A country is described in this 
     subclause if it is a CBTEA beneficiary country--

       ``(aa) from which the article is exported, or
       ``(bb) in which materials used in the production of the 
     article originate or in which the article or such materials 
     undergo production that contributes to a claim that the 
     article is eligible for preferential treatment.
       ``(B) Certificate of origin.--The Certificate of Origin 
     that otherwise would be required pursuant to the provisions 
     of subparagraph (A) shall not be required in the case of an 
     article imported under paragraph (2) or (3) if such 
     Certificate of Origin would not be required under Article 503 
     of the NAFTA (as implemented pursuant to United States law), 
     if the article were imported from Mexico.
       ``(5) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Annex.--The term `the Annex' means Annex 300-B of the 
     NAFTA.
       ``(B) CBTEA beneficiary country.--
       ``(i) In general.--The term `CBTEA beneficiary country' 
     means any `beneficiary country', as defined by section 
     212(a)(1)(A) of this title, which the President determines 
     has demonstrated a commitment to--

       ``(I) undertake its obligations under the WTO on or ahead 
     of schedule;
       ``(II) participate in negotiations toward the completion of 
     the FTAA or a comparable trade agreement; and
       ``(III) undertake other steps necessary for that country to 
     become a party to the FTAA or a comparable trade agreement.

       ``(ii) Criteria for determination.--In making the 
     determination under clause (i), the President may consider 
     the criteria in section 212 (b) and (c) and other appropriate 
     criteria, including--

       ``(I) the extent to which the country follows accepted 
     rules of international trade provided for under the 
     agreements listed in section 101(d) of the Uruguay Round 
     Agreements Act;

       ``(II) the extent to which the country provides protection 
     of intellectual property rights--

       ``(aa) in accordance with standards established in the 
     Agreement on Trade-Related Aspects of Intellectual Property 
     Rights described in section 101(d)(15) of the Uruguay Round 
     Agreements Act;
       ``(bb) in accordance with standards established in chapter 
     17 of the NAFTA; and
       ``(cc) by granting the holders of copyrights the ability to 
     control the importation and

[[Page 26608]]

     sale of products that embody copyrighted works, extending the 
     period set forth in Article 1711(6) of NAFTA for protecting 
     test data for agricultural chemicals to 10 years, protecting 
     trademarks regardless of their subsequent designation as 
     geographic indications, and providing enforcement against the 
     importation of infringing products at the border;
       ``(III) the extent to which the country provides 
     protections to investors and investments of the United States 
     substantially equivalent to those set forth in chapter 11 of 
     the NAFTA;
       ``(IV) the extent to which the country provides the United 
     States and other WTO members nondiscriminatory, equitable, 
     and reasonable market access with respect to the products for 
     which benefits are provided under paragraphs (2) and (3), and 
     in other relevant product sectors as determined by the 
     President;
       ``(V) the extent to which the country provides 
     internationally recognized worker rights, including--
       ``(aa) the right of association,
       ``(bb) the right to organize and bargain collectively,
       ``(cc) prohibition on the use of any form of coerced or 
     compulsory labor,
       ``(dd) a minimum age for the employment of children, and
       ``(ee) acceptable conditions of work with respect to 
     minimum wages, hours of work, and occupational safety and 
     health;

       ``(VI) whether the country has met the counter-narcotics 
     certification criteria set forth in section 490 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2291j) for 
     eligibility for United States assistance;
       ``(VII) the extent to which the country becomes a party to 
     and implements the Inter-American Convention Against 
     Corruption, and becomes party to a convention regarding the 
     extradition of its nationals;
       ``(VIII) the extent to which the country--

       ``(aa) supports the multilateral and regional objectives of 
     the United States with respect to government procurement, 
     including the negotiation of government procurement 
     provisions as part of the FTAA and conclusion of a WTO 
     transparency agreement as provided in the declaration of the 
     WTO Ministerial Conference held in Singapore on December 9 
     through 13, 1996, and
       ``(bb) applies transparent and competitive procedures in 
     government procurement equivalent to those contained in the 
     WTO Agreement on Government Procurement (described in section 
     101(d)(17) of the Uruguay Round Agreements Act);

       ``(IX) the extent to which the country follows the rules on 
     customs valuation set forth in the WTO Agreement on 
     Implementation of Article VII of the GATT 1994 (described in 
     section 101(d)(8) of the Uruguay Round Agreements Act);
       ``(X) the extent to which the country affords to products 
     of the United States which the President determines to be of 
     commercial importance to the United States with respect to 
     such country, and on a nondiscriminatory basis to like 
     products of other WTO members, tariff treatment that is no 
     less favorable than the most favorable tariff treatment 
     provided by the country to any other country pursuant to any 
     free trade agreement to which such country is a party, other 
     than the Central American Common Market or the Caribbean 
     Community and Common Market.

       ``(C) CBTEA originating good.--
       ``(i) In general.--The term `CBTEA originating good' means 
     a good that meets the rules of origin for a good set forth in 
     chapter 4 of the NAFTA as implemented pursuant to United 
     States law.
       ``(ii) Application of chapter 4.--In applying chapter 4 
     with respect to a CBTEA beneficiary country for purposes of 
     this subsection--

       ``(I) no country other than the United States and a CBTEA 
     beneficiary country may be treated as being a party to the 
     NAFTA;
       ``(II) any reference to trade between the United States and 
     Mexico shall be deemed to refer to trade between the United 
     States and a CBTEA beneficiary country;
       ``(III) any reference to a party shall be deemed to refer 
     to a CBTEA beneficiary country or the United States; and
       ``(IV) any reference to parties shall be deemed to refer to 
     any combination of CBTEA beneficiary countries or to the 
     United States and a CBTEA beneficiary country (or any 
     combination thereof).

       ``(D) Transition period.--The term `transition period' 
     means, with respect to a CBTEA beneficiary country, the 
     period that begins on October 1, 2000, and ends on the 
     earlier of--
       ``(i) December 31, 2004, or
       ``(ii) the date on which the FTAA or a comparable trade 
     agreement enters into force with respect to the United States 
     and the CBTEA beneficiary country.
       ``(E) CBTEA.--The term `CBTEA' means the United States-
     Caribbean Basin Trade Enhancement Act.
       ``(F) FTAA.--The term `FTAA' means the Free Trade Area of 
     the Americas.''.
       (b) Determination Regarding Retention of Designation.--
     Section 212(e) of the Caribbean Basin Economic Recovery Act 
     (19 U.S.C. 2702(e)) is amended--
       (1) in paragraph (1)--
       (A) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively;
       (B) by inserting ``(A)'' after ``(1)'';
       (C) by striking ``would be barred'' and all that follows 
     through the end period and inserting: ``no longer satisfies 
     one or more of the conditions for designation as a 
     beneficiary country set forth in subsection (b) or such 
     country fails adequately to meet one or more of the criteria 
     set forth in subsection (c).''; and
       (D) by adding at the end the following:
       ``(B) The President may, after the requirements of 
     subsection (a)(2) and paragraph (2) have been met--
       ``(i) withdraw or suspend the designation of any country as 
     a CBTEA beneficiary country, or
       ``(ii) withdraw, suspend, or limit the application of 
     preferential treatment under section 213(b) (2) and (3) to 
     any article of any country, if, after such designation, the 
     President determines that as a result of changed 
     circumstances, the performance of such country is not 
     satisfactory under the criteria set forth in section 
     213(b)(5)(B).''; and
       (2) by adding after paragraph (2) the following new 
     paragraph:
       ``(3) If preferential treatment under section 213(b) (2) 
     and (3) is withdrawn, suspended, or limited with respect to a 
     CBTEA beneficiary country, such country shall not be deemed 
     to be a `party' for the purposes of applying section 
     213(b)(5)(C) to imports of articles for which preferential 
     treatment has been withdrawn, suspended, or limited with 
     respect to such country.''.
       (c) Reporting Requirements.--
       (1) Section 212(f) of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2702(f)) is amended to read as follows:
       ``(f) Reporting Requirements.--
       ``(1) In general.--Not later than December 31, 2001, and 
     every 2 years thereafter during the period this title is in 
     effect, the United States Trade Representative shall submit 
     to Congress a report regarding the operation of this title, 
     including--
       ``(A) with respect to subsections (b) and (c), the results 
     of a general review of beneficiary countries based on the 
     considerations described in such subsections; and
       ``(B) the performance of each beneficiary country or CBTEA 
     beneficiary country, as the case may be, under the criteria 
     set forth in section 213(b)(5)(B)(ii).
       ``(2) Public comment.--Before submitting the report 
     described in paragraph (1), the United States Trade 
     Representative shall publish a notice in the Federal Register 
     requesting public comments on whether beneficiary countries 
     are meeting the criteria listed in section 213(b)(5)(B)(i), 
     and on the performance of each beneficiary country or CBTEA 
     beneficiary country, as the case may be, with respect to the 
     criteria listed in section 213(b)(5)(B)(ii).''.
       (2) Section 203(f) of the Andean Trade Preference Act (19 
     U.S.C. 3202(f)) is amended--
       (A) by striking ``Triennial Report'' in the heading and 
     inserting ``Report''; and
       (B) by striking ``On or before'' and all that follows 
     through ``enactment of this title'' and inserting ``Not later 
     than January 31, 2001''.
       (d) International Trade Commission Reports.--
       (1) Section 215(a) of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2704(a)) is amended to read as follows:
       ``(a) Reporting Requirement.--
       ``(1) In general.--The United States International Trade 
     Commission (in this section referred to as the `Commission') 
     shall submit to Congress and the President biennial reports 
     regarding the economic impact of this title on United States 
     industries and consumers and on the economy of the 
     beneficiary countries.
       ``(2) First report.--The first report shall be submitted 
     not later than September 30, 2001.
       ``(3) Treatment of puerto rico, etc.--For purposes of this 
     section, industries in the Commonwealth of Puerto Rico and 
     the insular possessions of the United States are considered 
     to be United States industries.''.
       (2) Section 206(a) of the Andean Trade Preference Act (19 
     U.S.C. 3204(a)) is amended to read as follows:
       ``(a) Reporting Requirements.--
       ``(1) In general.--The United States International Trade 
     Commission (in this section referred to as the `Commission') 
     shall submit to Congress and the President biennial reports 
     regarding the economic impact of this title on United States 
     industries and consumers, and, in conjunction with other 
     agencies, the effectiveness of this title in promoting drug-
     related crop eradication and crop substitution efforts of the 
     beneficiary countries.
       ``(2) Submission.--During the period that this title is in 
     effect, the report required by paragraph (1) shall be 
     submitted on December 31 of each year that the report 
     required by section 215 of the Caribbean Basin Economic 
     Recovery Act is not submitted.
       ``(3) Treatment of puerto rico, etc.--For purposes of this 
     section, industries in the Commonwealth of Puerto Rico and 
     the insular possessions of the United States are considered 
     to be United States industries.''.
       (e) Technical and Conforming Amendments.--

[[Page 26609]]

       (1) In general.--
       (A) Section 211 of the Caribbean Basin Economic Recovery 
     Act (19 U.S.C. 2701) is amended by inserting ``(or other 
     preferential treatment)'' after ``treatment''.
       (B) Section 213(a)(1) of the Caribbean Basin Economic 
     Recovery Act (19 U.S.C. 2703(a)(1)) is amended by inserting 
     ``and except as provided in subsection (b) (2) and (3),'' 
     after ``Tax Reform Act of 1986,''.
       (2) Definitions.--Section 212(a)(1) of the Caribbean Basin 
     Economic Recovery Act (19 U.S.C. 2702(a)(1)) is amended by 
     adding at the end the following new subparagraphs:
       ``(D) The term `NAFTA' means the North American Free Trade 
     Agreement entered into between the United States, Mexico, and 
     Canada on December 17, 1992.
       ``(E) The terms `WTO' and `WTO member' have the meanings 
     given those terms in section 2 of the Uruguay Round 
     Agreements Act (19 U.S.C. 3501).''.

     SEC. 212. ADEQUATE AND EFFECTIVE PROTECTION FOR INTELLECTUAL 
                   PROPERTY RIGHTS.

       Section 212(c) of the Caribbean Basin Economic Recovery Act 
     (19 U.S.C. 2702(c)) is amended by adding at the end the 
     following flush sentence:

     ``Notwithstanding any other provision of law, the President 
     may determine that a country is not providing adequate and 
     effective protection of intellectual property rights under 
     paragraph (9), even if the country is in compliance with the 
     country's obligations under the Agreement on Trade-Related 
     Aspects of Intellectual Property Rights described in section 
     101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 
     3511(d)(15)).''.
           Subtitle C--Cover Over of Tax on Distilled Spirits

     SEC. 221. SUSPENSION OF LIMITATION ON COVER OVER OF TAX ON 
                   DISTILLED SPIRITS.

       (a) In General.--Section 7652(f) of the Internal Revenue 
     Code of 1986 (relating to limitation on cover over of tax on 
     distilled spirits) is amended by adding at the end the 
     following new flush sentence:
     ``The preceding sentence shall not apply to articles that are 
     tax-determined after June 30, 1999, and before October 1, 
     1999.''
       (b) Effective Date.--
       (1) In general.--The amendment made by this section shall 
     apply to articles that are tax-determined after June 30, 
     1999.
       (2) Special rule.--
       (A) In general.--The treasury of Puerto Rico shall make a 
     Conservation Trust Fund transfer within 30 days after the 
     date of each cover over payment (made to such treasury under 
     section 7652(e) of the Internal Revenue Code of 1986) to 
     which section 7652(f) of such Code does not apply by reason 
     of the last sentence thereof.
       (B) Conservation trust fund transfer.--
       (i) In general.--For purposes of this paragraph, the term 
     ``Conservation Trust Fund transfer'' means a transfer to the 
     Puerto Rico Conservation Trust Fund of an amount equal to 50 
     cents per proof gallon of the taxes imposed under section 
     5001 or section 7652 of such Code on distilled spirits that 
     are covered over to the treasury of Puerto Rico under section 
     7652(e) of such Code.
       (ii) Treatment of transfer.--Each Conservation Trust Fund 
     transfer shall be treated as principal for an endowment, the 
     income from which to be available for use by the Puerto Rico 
     Conservation Trust Fund for the purposes for which the Trust 
     Fund was established.
       (iii) Result of nontransfer.--

       (I) In general.--Upon notification by the Secretary of the 
     Interior that a Conservation Trust Fund transfer has not been 
     made by the treasury of Puerto Rico as required by 
     subparagraph (A), the Secretary of the Treasury shall, except 
     as provided in subclause (II), deduct and withhold from the 
     next cover over payment to be made to the treasury of Puerto 
     Rico under section 7652(e) of such Code an amount equal to 
     the appropriate Conservation Trust Fund transfer and interest 
     thereon at the underpayment rate established under section 
     6621 of such Code as of the due date of such transfer. The 
     Secretary of the Treasury shall transfer such amount deducted 
     and withheld, and the interest thereon, directly to the 
     Puerto Rico Conservation Trust Fund.
       (II) Good cause exception.--If the Secretary of the 
     Interior finds, after consultation with the Governor of 
     Puerto Rico, that the failure by the treasury of Puerto Rico 
     to make a required transfer was for good cause, and notifies 
     the Secretary of the Treasury of the finding of such good 
     cause before the due date of the next cover over payment 
     following the notification of nontransfer, then the Secretary 
     of the Treasury shall not deduct the amount of such 
     nontransfer from any cover over payment.

       (C) Puerto rico conservation trust fund.--For purposes of 
     this paragraph, the term ``Puerto Rico Conservation Trust 
     Fund'' means the fund established pursuant to a Memorandum of 
     Understanding between the United States Department of the 
     Interior and the Commonwealth of Puerto Rico, dated December 
     24, 1968.
              TITLE III--GENERALIZED SYSTEM OF PREFERENCES

     SEC. 301. EXTENSION OF DUTY-FREE TREATMENT UNDER GENERALIZED 
                   SYSTEM OF PREFERENCES.

       (a) In General.--Section 505 of the Trade Act of 1974 (19 
     U.S.C. 2465) is amended by striking ``June 30, 1999'' and 
     inserting ``June 30, 2004''.
       (b) Effective Date.--
       (1) In general.--The amendment made by this section applies 
     to articles entered on or after the date of the enactment of 
     this Act.
       (2) Retroactive application for certain liquidations and 
     reliquidations.--
       (A) General rule.--Notwithstanding section 514 of the 
     Tariff Act of 1930 or any other provision of law, and subject 
     to paragraph (3), any entry--
       (i) of an article to which duty-free treatment under title 
     V of the Trade Act of 1974 would have applied if such entry 
     had been made on June 30, 1999, and
       (ii) that was made--

       (I) after June 30, 1999, and
       (II) before the date of enactment of this Act,

     shall be liquidated or reliquidated as free of duty, and the 
     Secretary of the Treasury shall refund any duty paid with 
     respect to such entry.
       (B) Entry.--As used in this paragraph, the term ``entry'' 
     includes a withdrawal from warehouse for consumption.
       (3) Requests.--Liquidation or reliquidation may be made 
     under paragraph (2) with respect to an entry only if a 
     request therefore is filed with the Customs Service, within 
     180 days after the date of enactment of this Act, that 
     contains sufficient information to enable the Customs 
     Service--
       (A) to locate the entry, or
       (B) to reconstruct the entry if it cannot be located.

     SEC. 302. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS.

       (a) In General.--Section 484 of the Tariff Act of 1930 (19 
     U.S.C. 1484) is amended by adding at the end the following 
     new subsection:
       ``(i) Special Rule For Foreign Trade Zone Operations.--
       ``(1) In general.--Notwithstanding any other provision of 
     law and except as provided in paragraph (3), all merchandise 
     (including merchandise of different classes, types, and 
     categories), withdrawn from a foreign trade zone during any 
     7-day period, shall, at the option of the operator or user of 
     the zone, be the subject of a single estimated entry or 
     release filed on or before the first day of the 7-day period 
     in which the merchandise is to be withdrawn from the zone. 
     The estimated entry or release shall be treated as a single 
     entry and a single release of merchandise for purposes of 
     section 13031(a)(9)(A) of the Consolidated Omnibus Budget 
     Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)(A)) and all 
     fee exclusions and limitations of such section 13031 shall 
     apply, including the maximum and minimum fee amounts provided 
     for under subsection (b)(8)(A)(i) of such section. The entry 
     summary for the estimated entry or release shall cover only 
     the merchandise actually withdrawn from the foreign trade 
     zone during the 7-day period.
       ``(2) Other requirements.-- The Secretary of the Treasury 
     may require that the operator or user of the zone--
       ``(A) use an electronic data interchange approved by the 
     Customs Service--
       ``(i) to file the entries described in paragraph (1); and
       ``(ii) to pay the applicable duties, fees, and taxes with 
     respect to the entries; and
       ``(B) satisfy the Customs Service that accounting, 
     transportation, and other controls over the merchandise are 
     adequate to protect the revenue and meet the requirements of 
     other Federal agencies.
       ``(3) Exception.--The provisions of paragraph (1) shall not 
     apply to merchandise the entry of which is prohibited by law 
     or merchandise for which the filing of an entry summary is 
     required before the merchandise is released from customs 
     custody.
       ``(4) Foreign trade zone; zone.--In this subsection, the 
     terms `foreign trade zone' and `zone' mean a zone established 
     pursuant to the Act of June 18, 1934, commonly known as the 
     Foreign Trade Zones Act (19 U.S.C. 81a et seq.).''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date that is 60 days after the date 
     of enactment of this Act.
                 TITLE IV--TRADE ADJUSTMENT ASSISTANCE

     SEC. 401. TRADE ADJUSTMENT ASSISTANCE.

       (a) Assistance for Workers.--Section 245 of the Trade Act 
     of 1974 (19 U.S.C. 2317) is amended--
       (1) in subsection (a), by striking ``June 30, 1999'' and 
     inserting ``September 30, 2001''; and
       (2) in subsection (b), by striking ``June 30, 1999'' and 
     inserting ``September 30, 2001''.
       (b) NAFTA Transitional Program.--Section 250(d)(2) of the 
     Trade Act of 1974 (19 U.S.C. 2331(d)(2)) is amended by 
     striking ``the period beginning October 1, 1998, and ending 
     June 30, 1999, shall not exceed $15,000,000'' and inserting 
     ``the period beginning October 1, 1998, and ending September 
     30, 2001, shall not exceed $30,000,000 for any fiscal year''.
       (c) Adjustment for Firms.--Section 256(b) of the Trade Act 
     of 1974 (19 U.S.C. 2346(b)) is amended by striking ``June 30, 
     1999'' and inserting ``September 30, 2001''.

[[Page 26610]]

       (d) Termination.--Section 285(c) of the Trade Act of 1974 
     (19 U.S.C. 2271 note preceding) is amended by striking ``June 
     30, 1999'' each place it appears and inserting ``September 
     30, 2001''.
       (e) Effective Date.--The amendments made by this section 
     take effect on July 1, 1999.
                      TITLE V--REVENUE PROVISIONS

     SEC. 501. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF 
                   INSTALLMENT METHOD FOR ACCRUAL METHOD 
                   TAXPAYERS.

       (a) Repeal of Installment Method for Accrual Basis 
     Taxpayers.--
       (1) In general.--Subsection (a) of section 453 of the 
     Internal Revenue Code of 1986 (relating to installment 
     method) is amended to read as follows:
       ``(a) Use of Installment Method.--
       ``(1) In general.--Except as otherwise provided in this 
     section, income from an installment sale shall be taken into 
     account for purposes of this title under the installment 
     method.
       ``(2) Accrual method taxpayer.--The installment method 
     shall not apply to income from an installment sale if such 
     income would be reported under an accrual method of 
     accounting without regard to this section. The preceding 
     sentence shall not apply to a disposition described in 
     subparagraph (A) or (B) of subsection (l)(2).''.
       (2) Conforming amendments.--Sections 453(d)(1), 453(i)(1), 
     and 453(k) are each amended by striking ``(a)'' each place it 
     appears and inserting ``(a)(1)''.
       (b) Modification of Pledge Rules.--Paragraph (4) of section 
     453A(d) of the Internal Revenue Code of 1986 (relating to 
     pledges, etc., of installment obligations) is amended by 
     adding at the end the following: ``A payment shall be treated 
     as directly secured by an interest in an installment 
     obligation to the extent an arrangement allows the taxpayer 
     to satisfy all or a portion of the indebtedness with the 
     installment obligation.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to sales or other dispositions occurring on or 
     after the date of the enactment of this Act.

     SEC. 502. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10 OR MORE 
                   EMPLOYER PLANS.

       (a) Benefits to Which Exception Applies.--Section 419A(f 
     )(6)(A) of the Internal Revenue Code of 1986 (relating to 
     exception for 10 or more employer plans) is amended to read 
     as follows:
       ``(A) In general.--This subpart shall not apply to a 
     welfare benefit fund which is part of a 10 or more employer 
     plan if the only benefits provided through the fund are one 
     or more of the following:
       ``(i) Medical benefits.
       ``(ii) Disability benefits.
       ``(iii) Group term life insurance benefits which do not 
     provide directly or indirectly for any cash surrender value 
     or other money that can be paid, assigned, borrowed, or 
     pledged for collateral for a loan.

     The preceding sentence shall not apply to any plan which 
     maintains experience-rating arrangements with respect to 
     individual employers.''.
       (b) Limitation on Use of Amounts for Other Purposes.--
     Section 4976(b) of the Internal Revenue Code of 1986 
     (defining disqualified benefit) is amended by adding at the 
     end the following new paragraph:
       ``(5) Special rule for 10 or more employer plans exempted 
     from prefunding limits.--For purposes of paragraph (1)(C), 
     if--
       ``(A) subpart D of part I of subchapter D of chapter 1 does 
     not apply by reason of section 419A(f )(6) to contributions 
     to provide one or more welfare benefits through a welfare 
     benefit fund under a 10 or more employer plan, and
       ``(B) any portion of the welfare benefit fund attributable 
     to such contributions is used for a purpose other than that 
     for which the contributions were made,
     then such portion shall be treated as reverting to the 
     benefit of the employers maintaining the fund.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions paid or accrued after June 9, 
     1999, in taxable years ending after such date.

     SEC. 503. TREATMENT OF GAIN FROM CONSTRUCTIVE OWNERSHIP 
                   TRANSACTIONS.

       (a) In General.--Part IV of subchapter P of chapter 1 of 
     the Internal Revenue Code of 1986 (relating to special rules 
     for determining capital gains and losses) is amended by 
     inserting after section 1259 the following new section:

     ``SEC. 1260. GAINS FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

       ``(a) In General.--If the taxpayer has gain from a 
     constructive ownership transaction with respect to any 
     financial asset and such gain would (without regard to this 
     section) be treated as a long-term capital gain--
       ``(1) such gain shall be treated as ordinary income to the 
     extent that such gain exceeds the net underlying long-term 
     capital gain, and
       ``(2) to the extent such gain is treated as a long-term 
     capital gain after the application of paragraph (1), the 
     determination of the capital gain rate (or rates) applicable 
     to such gain under section 1(h) shall be determined on the 
     basis of the respective rate (or rates) that would have been 
     applicable to the net underlying long-term capital gain.
       ``(b) Interest Charge on Deferral of Gain Recognition.--
       ``(1) In general.--If any gain is treated as ordinary 
     income for any taxable year by reason of subsection (a)(1), 
     the tax imposed by this chapter for such taxable year shall 
     be increased by the amount of interest determined under 
     paragraph (2) with respect to each prior taxable year during 
     any portion of which the constructive ownership transaction 
     was open. Any amount payable under this paragraph shall be 
     taken into account in computing the amount of any deduction 
     allowable to the taxpayer for interest paid or accrued during 
     such taxable year.
       ``(2) Amount of interest.--The amount of interest 
     determined under this paragraph with respect to a prior 
     taxable year is the amount of interest which would have been 
     imposed under section 6601 on the underpayment of tax for 
     such year which would have resulted if the gain (which is 
     treated as ordinary income by reason of subsection (a)(1)) 
     had been included in gross income in the taxable years in 
     which it accrued (determined by treating the income as 
     accruing at a constant rate equal to the applicable Federal 
     rate as in effect on the day the transaction closed). The 
     period during which such interest shall accrue shall end on 
     the due date (without extensions) for the return of tax 
     imposed by this chapter for the taxable year in which such 
     transaction closed.
       ``(3) Applicable federal rate.--For purposes of paragraph 
     (2), the applicable Federal rate is the applicable Federal 
     rate determined under 1274(d) (compounded semiannually) which 
     would apply to a debt instrument with a term equal to the 
     period the transaction was open.
       ``(4) No credits against increase in tax.--Any increase in 
     tax under paragraph (1) shall not be treated as tax imposed 
     by this chapter for purposes of determining--
       ``(A) the amount of any credit allowable under this 
     chapter, or
       ``(B) the amount of the tax imposed by section 55.
       ``(c) Financial Asset.--For purposes of this section--
       ``(1) In general.--The term `financial asset' means--
       ``(A) any equity interest in any pass-thru entity, and
       ``(B) to the extent provided in regulations--
       ``(i) any debt instrument, and
       ``(ii) any stock in a corporation which is not a pass-thru 
     entity.
       ``(2) Pass-thru entity.--For purposes of paragraph (1), the 
     term `pass-thru entity' means--
       ``(A) a regulated investment company,
       ``(B) a real estate investment trust,
       ``(C) an S corporation,
       ``(D) a partnership,
       ``(E) a trust,
       ``(F) a common trust fund,
       ``(G) a passive foreign investment company (as defined in 
     section 1297 without regard to subsection (e) thereof),
       ``(H) a foreign personal holding company,
       ``(I) a foreign investment company (as defined in section 
     1246(b)), and
       ``(J) a REMIC.
       ``(d) Constructive Ownership Transaction.--For purposes of 
     this section--
       ``(1) In general.--The taxpayer shall be treated as having 
     entered into a constructive ownership transaction with 
     respect to any financial asset if the taxpayer--
       ``(A) holds a long position under a notional principal 
     contract with respect to the financial asset,
       ``(B) enters into a forward or futures contract to acquire 
     the financial asset,
       ``(C) is the holder of a call option, and is the grantor of 
     a put option, with respect to the financial asset and such 
     options have substantially equal strike prices and 
     substantially contemporaneous maturity dates, or
       ``(D) to the extent provided in regulations prescribed by 
     the Secretary, enters into one or more other transactions (or 
     acquires one or more positions) that have substantially the 
     same effect as a transaction described in any of the 
     preceding subparagraphs.
       ``(2) Exception for positions which are marked to market.--
     This section shall not apply to any constructive ownership 
     transaction if all of the positions which are part of such 
     transaction are marked to market under any provision of this 
     title or the regulations thereunder.
       ``(3) Long position under notional principal contract.--A 
     person shall be treated as holding a long position under a 
     notional principal contract with respect to any financial 
     asset if such person--
       ``(A) has the right to be paid (or receive credit for) all 
     or substantially all of the investment yield (including 
     appreciation) on such financial asset for a specified period, 
     and
       ``(B) is obligated to reimburse (or provide credit for) all 
     or substantially all of any decline in the value of such 
     financial asset.
       ``(4) Forward contract.--The term `forward contract' means 
     any contract to acquire in the future (or provide or receive 
     credit for the future value of) any financial asset.
       ``(e) Net Underlying Long-Term Capital Gain.--For purposes 
     of this section, in the

[[Page 26611]]

     case of any constructive ownership transaction with respect 
     to any financial asset, the term `net underlying long-term 
     capital gain' means the aggregate net capital gain that the 
     taxpayer would have had if--
       ``(1) the financial asset had been acquired for fair market 
     value on the date such transaction was opened and sold for 
     fair market value on the date such transaction was closed, 
     and
       ``(2) only gains and losses that would have resulted from 
     the deemed ownership under paragraph (1) were taken into 
     account.

     The amount of the net underlying long-term capital gain with 
     respect to any financial asset shall be treated as zero 
     unless the amount thereof is established by clear and 
     convincing evidence.
       ``(f ) Special Rule Where Taxpayer Takes Delivery.--Except 
     as provided in regulations prescribed by the Secretary, if a 
     constructive ownership transaction is closed by reason of 
     taking delivery, this section shall be applied as if the 
     taxpayer had sold all the contracts, options, or other 
     positions which are part of such transaction for fair market 
     value on the closing date. The amount of gain recognized 
     under the preceding sentence shall not exceed the amount of 
     gain treated as ordinary income under subsection (a). Proper 
     adjustments shall be made in the amount of any gain or loss 
     subsequently realized for gain recognized and treated as 
     ordinary income under this subsection.
       ``(g) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary or appropriate to carry out 
     the purposes of this section, including regulations--
       ``(1) to permit taxpayers to mark to market constructive 
     ownership transactions in lieu of applying this section, and
       ``(2) to exclude certain forward contracts which do not 
     convey substantially all of the economic return with respect 
     to a financial asset.''.
       (b) Clerical Amendment.--The table of sections for part IV 
     of subchapter P of chapter 1 of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new item:

``Sec. 1260. Gains from constructive ownership transactions.''.

       (c) Effective Date.--The amendments made by this section 
     shall apply to transactions entered into after July 11, 1999.

     SEC. 504. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD 
                   OF ACCOUNTING.

       (a) In General.--Section 448(d)(5) of the Internal Revenue 
     Code of 1986 (relating to special rule for services) is 
     amended--
       (1) by inserting ``in fields described in paragraph 
     (2)(A)'' after ``services by such person'', and
       (2) by inserting ``certain personal'' before ``services'' 
     in the heading.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years ending after the date of the enactment 
     of this Act.
       (2) Change in method of accounting.--In the case of any 
     taxpayer required by the amendments made by this section to 
     change its method of accounting for its first taxable year 
     ending after the date of the enactment of this Act--
       (A) such change shall be treated as initiated by the 
     taxpayer,
       (B) such change shall be treated as made with the consent 
     of the Secretary of the Treasury, and
       (C) the net amount of the adjustments required to be taken 
     into account by the taxpayer under section 481 of the 
     Internal Revenue Code of 1986 shall be taken into account 
     over a period (not greater than 4 taxable years) beginning 
     with such first taxable year.

     SEC. 505. ALLOCATION OF BASIS ON TRANSFERS OF INTANGIBLES IN 
                   CERTAIN NONRECOGNITION TRANSACTIONS.

       (a) Transfers to Corporations.--Section 351 of the Internal 
     Revenue Code of 1986 (relating to transfer to corporation 
     controlled by transferor) is amended by redesignating 
     subsection (h) as subsection (i) and by inserting after 
     subsection (g) the following new subsection:
       ``(h) Treatment of Transfers of Intangible Property.--
       ``(1) Transfers of less than all substantial rights.
       ``(A) In general.--A transfer of an interest in intangible 
     property (as defined in section 936(h)(3)(B)) shall be 
     treated under this section as a transfer of property even if 
     the transfer is of less than all of the substantial rights of 
     the transferor in the property.
       ``(B) Allocation of basis.--In the case of a transfer of 
     less than all of the substantial rights of the transferor in 
     the intangible property, the transferor's basis immediately 
     before the transfer shall be allocated among the rights 
     retained by the transferor and the rights transferred on the 
     basis of their respective fair market values.
       ``(2) Nonrecognition not to apply to intangible property 
     developed for transferee.--This section shall not apply to a 
     transfer of intangible property developed by the transferor 
     or any related person if such development was pursuant to an 
     arrangement with the transferee.''.
       (b) Transfers to Partnerships.--Subsection (d) of section 
     721 of the Internal Revenue Code of 1986 is amended to read 
     as follows:
       ``(d) Transfers of Intangible Property.--
       ``(1) In general.--Rules similar to the rules of section 
     351(h) shall apply for purposes of this section.
       ``(2) Transfers to foreign partnerships.--For regulatory 
     authority to treat intangibles transferred to a partnership 
     as sold, see section 367(d)(3).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to transfers on or after the date of the 
     enactment of this Act.

     SEC. 506. INCREASE IN ELECTIVE WITHHOLDING RATE FOR 
                   NONPERIODIC DISTRIBUTIONS FROM DEFERRED 
                   COMPENSATION PLANS.

       (a) In General.--Section 3405(b)(1) of the Internal Revenue 
     Code of 1986 (relating to withholding) is amended by striking 
     ``10 percent'' and inserting ``15 percent''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to distributions after December 31, 2000.

       Amend the title so as to read: ``To authorize a new trade 
     and investment policy for sub-Saharan Africa, expand trade 
     benefits to the countries in the Caribbean Basin, renew the 
     generalized system of preferences, and reauthorize the trade 
     adjustment assistance programs.''.

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