[Congressional Record (Bound Edition), Volume 147 (2001), Part 7]
[Senate]
[Pages 9205-9213]
[From the U.S. Government Publishing Office, www.gpo.gov]



                           TEXT OF AMENDMENTS

  SA 785. Ms. STABENOW (for herself and Mr. Dayton) submitted an 
amendment intended to be proposed by her to the bill H.R. 1836, to 
provide for reconciliation pursuant to section 104 of the concurrent 
resolution on the budget for fiscal year 2002; which was ordered to lie 
on the table; as follows:

       On page 63, strike line 4 and all that follows through page 
     64, line 16.
       On page 65, line 12, strike ``and before 2011''.
       On page 66, in the table between line 1 and line 2, strike 
     ``2007, 2008, 2009, and 2010'' and insert ``2007 and 
     thereafter''.
       On page 68, in the table between line 14 and line 15, add 
     after the item relating to 2010 the following:

      ``2011 and thereafter.............................$20,000,000.''.

       On page 106, after line 6, insert the following: ``(g) 
     Notwithstanding any other provision of law; this subtitle 
     shall not apply to property subject to the estate tax.''
       At the end of subtitle A of title VIII, add the following:

[[Page 9206]]



     SEC. __. ENSURING FUNDING FOR PRESCRIPTION DRUGS.

       (a) In General.--Notwithstanding any other provision of 
     this Act--
       (1) except for section 1(i)(1) of the Internal Revenue Code 
     of 1986, as added by section 101 of this Act, and any 
     necessary conforming amendments, title I of this Act shall 
     not take effect; and
       (2) any provision of title V of this Act that takes effect 
     after 2006 shall not take effect.
       (b) Strategic Reserve Fund for Long-Term Debt and Needs.--
     Subtitle B of title II of H. Con. Res. 83 (107th Congress) is 
     amended by inserting at the end the following:

     ``SEC. 219. STRATEGIC RESERVE FUND FOR PRESCRIPTION DRUG 
                   BENEFITS.

       If legislation is reported by the Committee on Finance of 
     the Senate or the Committee on Energy and Commerce or the 
     Committee on Ways and Means of the House of Representatives, 
     or an amendment thereto is offered or a conference report 
     thereon is submitted, that would provide prescription drug 
     benefits, the chairman of the appropriate Committee on the 
     Budget shall, upon the approval of the appropriate Committee 
     on the Budget, revise the aggregates, functional totals, 
     allocations, and other appropriate levels and limits in this 
     resolution for that measure by not to exceed $55,000,000,000 
     for the total of fiscal years 2002 through 2011, as long as 
     that measure will not, when taken together with all other 
     previously enacted legislation, reduce the on-budget surplus 
     below the level of the Medicare Hospital Insurance Trust Fund 
     surplus in any fiscal year provided in this resolution.''.
                                  ____

  SA 786. Mr. GRASSLEY proposed an amendment to amendment SA 763 
submitted by Mr. Graham and intended to be proposed to the bill (H.R. 
1836) to provide for reconciliation pursuant to section 104 of the 
concurrent resolution on the budget for fiscal year 2002; as follows:

       On page 1, line 2, strike all after the word ``strike'' 
     through the end of page 1, line 3.
       On page 20, strike lines 14 and 15 and insert the 
     following:
       ``This section shall apply to policies issued after January 
     1 2006.''
                                  ____

  SA 787. Mr. KERRY submitted an amendment intended to be proposed by 
him to the bill H.R. 1836, to provide for reconciliation pursuant to 
section 104 of the concurrent resolution on the budget for fiscal year 
2002; as follows:

       On page 314, after line 21, add the following:

     SEC. __. DISCLOSURE OF TAX INFORMATION TO FACILITATE COMBINED 
                   EMPLOYMENT TAX REPORTING.

       Section 6103(d)(5) is amended to read as follows:
       ``(5) Disclosure for combined employment tax reporting.--
     The Secretary may disclose taxpayer identity information and 
     signatures to any agency, body, or commission of any State 
     for the purpose of carrying out with such agency, body, or 
     commission a combined Federal and State employment tax 
     reporting program approved by the Secretary. Subsections 
     (a)(2) and (p)(4) and sections 7213 and 7213A shall not apply 
     with respect to disclosures or inspections made pursuant to 
     this paragraph.''.
                                  ____

  SA 788. Mr. CORZINE (for himself and Mr. Kerry) submitted an 
amendment intended to be proposed by him to the bill H.R. 1836, to 
provide for reconciliation pursuant to section 104 of the concurrent 
resolution on the budget for fiscal year 2002; which was ordered to lie 
on the table; as follows:

       On page 47, between lines 3 and 4, insert the following:

     SEC.  . EXCLUSION FROM INCOME OF CERTAIN AMOUNTS RECEIVED BY 
                   AMERICORPS PARTICIPANTS.

       (a) In General.--Section 117 of the Internal Revenue Code 
     of 1986 (relating to qualified scholarships) is amended by 
     adding at the end the following:
       ``(e) Qualified National Service Educational Awards.--
       ``(1) In general.--Gross income for any taxable year shall 
     not include any qualified national service educational award.
       ``(2) Qualified national service educational award.--For 
     purposes of this subsection--
       ``(A) In general.--The term `qualified national service 
     educational award' means any amount received by an individual 
     in a taxable year as a national service educational award 
     under section 148 of the National and Community Service Act 
     of 1990 (42 U.S.C. 12604) to the extent (except as provided 
     in subparagraph (C)) such amount does not exceed the 
     qualified tuition and related expenses (as defined in 
     subsection (b)(2)) of the individual for such taxable year.
       ``(B) Determination of expenses.--The total amount of the 
     qualified tuition and related expenses (as so defined) which 
     may be taken into account under subparagraph (A) with respect 
     to an individual for the taxable year shall be reduced (after 
     the application of the reduction provided in section 
     25A(g)(2)) by the amount of such expenses which were taken 
     into account in determining the credit allowed to the 
     taxpayer or any other person under section 25A with respect 
     to such expenses.
       ``(C) Exception to limitation.--The limitation under 
     subparagraph (A) shall not apply to any portion of a national 
     service educational award used by such individual to repay 
     any student loan described in section 148(a)(1) of such Act 
     or to pay any interest expense described in section 148(a)(4) 
     of such Act''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts received in taxable years beginning 
     after December 31, 2001.
                                  ____

  SA 789. Mr. GRASSLEY (for himself and Mr. Baucus) proposed an 
amendment to the bill H.R. 1836, to provide for reconciliation pursuant 
to section 104 of the concurrent resolution on the budget for fiscal 
year 2002, as follows:

       On page 18, between lines 14 and 15, insert the following:

     SEC. 202. EXPANSION OF ADOPTION CREDIT AND ADOPTION 
                   ASSISTANCE PROGRAMS.

       (a) In General.--
       (1) Adoption credit.--Section 23(a)(1) (relating to 
     allowance of credit) is amended to read as follows:
       ``(1) In general.--In the case of an individual, there 
     shall be allowed as a credit against the tax imposed by this 
     chapter--
       ``(A) in the case of an adoption of a child other than a 
     child with special needs, the amount of the qualified 
     adoption expenses paid or incurred by the taxpayer, and
       ``(B) in the case of an adoption of a child with special 
     needs, $10,000.''.
       (2) Adoption assistance programs.--Section 137(a) (relating 
     to adoption assistance programs) is amended to read as 
     follows:
       ``(a) In General.--Gross income of an employee does not 
     include amounts paid or expenses incurred by the employer for 
     adoption expenses in connection with the adoption of a child 
     by an employee if such amounts are furnished pursuant to an 
     adoption assistance program. The amount of the exclusion 
     shall be--
       ``(1) in the case of an adoption of a child other than a 
     child with special needs, the amount of the qualified 
     adoption expenses paid or incurred by the taxpayer, and
       ``(2) in the case of an adoption of a child with special 
     needs, $10,000.''.
       (b) Dollar Limitations.--
       (1) Dollar amount of allowed expenses.--
       (A) Adoption expenses.--Section 23(b)(1) (relating to 
     allowance of credit) is amended--
       (i) by striking ``$5,000'' and inserting ``$10,000'',
       (ii) by striking ``($6,000, in the case of a child with 
     special needs)'', and
       (iii) by striking ``subsection (a)'' and inserting 
     ``subsection (a)(1)(A)''.
       (B) Adoption assistance programs.--Section 137(b)(1) 
     (relating to dollar limitations for adoption assistance 
     programs) is amended--
       (i) by striking ``$5,000'' and inserting ``$10,000'', and
       (ii) by striking ``($6,000, in the case of a child with 
     special needs)'', and
       (iii) by striking ``subsection (a)'' and inserting 
     ``subsection (a)(1)''.
       (2) Phase-out limitation.--
       (A) Adoption expenses.--Clause (i) of section 23(b)(2)(A) 
     (relating to income limitation) is amended by striking 
     ``$75,000'' and inserting ``$150,000''.
       (B) Adoption assistance programs.--Section 137(b)(2)(A) 
     (relating to income limitation) is amended by striking 
     ``$75,000'' and inserting ``$150,000''.
       (c) Year Credit Allowed.--Section 23(a)(2) (relating to 
     year credit allowed) is amended by adding at the end the 
     following new flush sentence:
     ``In the case of the adoption of a child with special needs, 
     the credit allowed under paragraph (1) shall be allowed for 
     the taxable year in which the adoption becomes final.''.
       (d) Repeal of Sunset Provisions.--
       (1) Children without special needs.--Paragraph (2) of 
     section 23(d) (relating to definition of eligible child) is 
     amended to read as follows:
       ``(2) Eligible child.--The term `eligible child' means any 
     individual who--
       ``(A) has not attained age 18, or
       ``(B) is physically or mentally incapable of caring for 
     himself.''.
       (2) Adoption Assistance Programs.--Section 137 (relating to 
     adoption assistance programs) is amended by striking 
     subsection (f).
       (e) Adjustment of Dollar and Income Limitations for 
     Inflation.--
       (1) Adoption credit.--Section 23 (relating to adoption 
     expenses) is amended by redesignating subsection (h) as 
     subsection (i) and by inserting after subsection (g) the 
     following new subsection:
       ``(h) Adjustments for Inflation.--In the case of a taxable 
     year beginning after December 31, 2002, each of the dollar 
     amounts in subsection (a)(1)(B) and paragraphs (1) and 
     (2)(A)(i) of subsection (b) shall be increased by an amount 
     equal to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar

[[Page 9207]]

     year in which the taxable year begins, determined by 
     substituting `calendar year 2001' for `calendar year 1992' in 
     subparagraph (B) thereof.''.
       (2) Adoption assistance programs.--Section 137 (relating to 
     adoption assistance programs), as amended by subsection (d), 
     is amended by adding at the end the following new subsection:
       ``(f) Adjustments for Inflation.--In the case of a taxable 
     year beginning after December 31, 2002, each of the dollar 
     amounts in subsection (a)(2) and paragraphs (1) and (2)(A) of 
     subsection (b) shall be increased by an amount equal to--
       ``(1) such dollar amount, multiplied by
       ``(2) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year in which the taxable 
     year begins, determined by substituting `calendar year 2001' 
     for `calendar year 1992' in subparagraph (B) thereof.''.
       (f) Limitation Based on Amount of Tax.--
       (1) In general.--Section 23(c) (relating to carryforwards 
     of unused credit) is amended by striking ``the limitation 
     imposed'' and all that follows through ``1400C)'' and 
     inserting ``the applicable tax limitation''.
       (2) Applicable tax limitation.--Section 23(d) (relating to 
     definitions) is amended by adding at the end the following 
     new paragraph:
       ``(4) Applicable tax limitation.--The term `applicable tax 
     limitation' means the sum of--
       ``(A) the taxpayer's regular tax liability for the taxable 
     year, reduced (but not below zero) by the sum of the credits 
     allowed by sections 21, 22, 24 (other than the amount of the 
     increase under subsection (d) thereof), 25, and 25A, and
       ``(B) the tax imposed by section 55 for such taxable 
     year.''.
       (3) Conforming amendments.--
       (A) Section 26(a) (relating to limitation based on amount 
     of tax) is amended by inserting ``(other than section 23)'' 
     after ``allowed by this subpart''.
       (B) Section 53(b)(1) (relating to minimum tax credit) is 
     amended by inserting ``reduced by the aggregate amount taken 
     into account under section 23(d)(3)(B) for all such prior 
     taxable years,'' after ``1986,''.
       (g) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       At the end of subtitle A of title VIII add the following:

     SEC. __. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) (relating to special 
     rules for health insurance costs of self-employed 
     individuals) is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''.
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) (relating to other 
     coverage) is amended to read as follows: ``Paragraph (1) 
     shall not apply to any taxpayer for any calendar month for 
     which the taxpayer participates in any subsidized health plan 
     maintained by any employer (other than an employer described 
     in section 401(c)(4)) of the taxpayer or the spouse of the 
     taxpayer.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       On page 314, after line 21, insert the following:

     SEC. __. DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
                   EMPLOYED INDIVIDUALS INCREASED.

       (a) In General.--Section 162(l)(1) (relating to special 
     rules for health insurance costs of self-employed 
     individuals) is amended to read as follows:
       ``(1) Allowance of deduction.--In the case of an individual 
     who is an employee within the meaning of section 401(c)(1), 
     there shall be allowed as a deduction under this section an 
     amount equal to the amount paid during the taxable year for 
     insurance which constitutes medical care for the taxpayer, 
     the taxpayer's spouse, and dependents.''
       (b) Clarification of Limitations on Other Coverage.--The 
     first sentence of section 162(l)(2)(B) (relating to other 
     coverage) is amended to read as follows: ``Paragraph (1) 
     shall not apply to any taxpayer for any calendar month for 
     which the taxpayer participates in any subsidized health plan 
     maintained by any employer (other than an employer described 
     in section 401(c)(4)) of the taxpayer or the spouse of the 
     taxpayer.''
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       On page 41, strike line 15 and all that follows through 
     line 18, and insert the following:
       ``(iii) Limitation on certain rollovers.--Clause (i)(I) 
     shall not apply to any transfer if such transfer occurs 
     within 12 months from the date of a previous transfer to any 
     qualified tuition program for the benefit of the designated 
     beneficiary.'', and
       On page 18, between lines 14 and 15, insert the following:

     SEC. 202. REFUNDS DISREGARDED IN THE ADMINISTRATION OF 
                   FEDERAL PROGRAMS AND FEDERALLY ASSISTED 
                   PROGRAMS.

       Any payment considered to have been made to any individual 
     by reason of section 24 of the Internal Revenue Code of 1986, 
     as amended by section 201, shall not be taken into account as 
     income and shall not be taken into account as resources for 
     the month of receipt and the following month, for purposes of 
     determining the eligibility of such individual or any other 
     individual for benefits or assistance, or the amount or 
     extent of benefits or assistance, under any Federal program 
     or under any State or local program financed in whole or in 
     part with Federal funds.
       On page 31, lines 3 and 4, strike ``computer equipment 
     (including related software and services)''.
       On page 31, line 10, strike ``and''.
       On page 31, line 17, strike the end period and insert ``, 
     and''.
       On page 31, between lines 17 and 18, insert:
       ``(iii) expenses for the purchase of any computer 
     technology or equipment (as defined in section 
     170(e)(6)(F)(i)) or Internet access and related services, if 
     such technology, equipment, or services are to be used by the 
     beneficiary and the beneficiary's family during any of the 
     years the beneficiary is in school. Such terms shall not 
     include computer software involving sports, games or hobbies 
     unless the software is educational in nature.
       At the end of the bill, add the following:

  TITLE __--SECTION 527 POLITICAL ORGANIZATION REPORTING REQUIREMENTS

     SEC. __01. EXEMPTION FOR STATE AND LOCAL CANDIDATE COMMITTEES 
                   FROM NOTIFICATION REQUIREMENTS.

       (a) Exemption From Notification Requirements.--Paragraph 
     (5) of section 527(i) (relating to organizations must notify 
     Secretary that they are section 527 organizations) is amended 
     by striking ``or'' at the end of subparagraph (A), by 
     striking the period at the end of subparagraph (B) and 
     inserting ``, or'', and by adding at the end the following:
       ``(C) which is a political committee of a State or local 
     candidate.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.

     SEC. __02. EXEMPTION FOR CERTAIN STATE AND LOCAL POLITICAL 
                   COMMITTEES FROM REPORTING AND ANNUAL RETURN 
                   REQUIREMENTS.

       (a) Exemption From Reporting Requirements.--
       (1) In general.--Section 527(j)(5) (relating to 
     coordination with other requirements) is amended by striking 
     ``or'' at the end of subparagraph (D), by striking the period 
     at the end of subparagraph (E) and inserting ``, or'', and by 
     adding at the end the following:
       ``(F) to any organization described in paragraph (7), but 
     only if, during the calendar year--
       ``(i) such organization is required by State or local law 
     to report, and such organization reports, information 
     regarding each separate expenditure and contribution 
     (including information regarding the person who makes such 
     contribution or receives such expenditure) with respect to 
     which information would otherwise be required to be reported 
     under this subsection, and
       ``(ii) such information is made public by the agency with 
     which such information is filed and is publicly available for 
     inspection in a manner similar to reports under section 
     6104(d)(1).
     An organization shall not be treated as failing to meet the 
     requirements of subparagraph (F)(i) solely because the 
     minimum amount of any expenditure or contribution required to 
     be reported under State or local law is greater (but not by 
     more than $100) than the minimum amount required under this 
     subsection.''.
       (2) Description of organization.--Section 527(j) is amended 
     by adding at the end the following:
       ``(7) Certain organizations.--An organization is described 
     in this paragraph if--
       ``(A) such organization is not described in subparagraph 
     (A), (B), (C), or (D) of paragraph (5),
       ``(B) such organization does not engage in any exempt 
     function activities other than activities for the purpose of 
     influencing or attempting to influence the selection, 
     nomination, election, or appointment of any individual to any 
     State or local public office or office in a State or local 
     political organization, and
       ``(C) no candidate for Federal office or individual holding 
     Federal office--
       ``(i) controls or materially participates in the direction 
     of such organization,
       ``(ii) solicits any contributions to such organization, or
       ``(iii) directs, in whole or in part, any expenditure made 
     by such organization.''.
       (b) Exemption From Requirements for Annual Return Based on 
     Gross Receipts.--Paragraph (6) of section 6012(a) (relating 
     to persons required to make returns of income) is amended by 
     striking ``organization, which'' and all that follows through 
     ``section)'' and inserting ``organization--
       ``(A) which has political organization taxable income 
     (within the meaning of section 527(c)(1)) for the taxable 
     year, or
       ``(B) which--

[[Page 9208]]

       ``(i) is not a political committee of a State or local 
     candidate or an organization to which section 527 applies 
     solely by reason of subsection (f)(1) of such section, and
       ``(ii) has gross receipts of--

       ``(I) in the case of political organization described in 
     section 527(j)(5)(F), $100,000 or more for the taxable year, 
     and
       ``(II) in the case of any other political organization, 
     $25,000 or more for the taxable year''.

       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.

     SEC. __03. NOTIFICATION OF INTERACTION OF REPORTING 
                   REQUIREMENTS.

       (a) In General.--The Secretary of the Treasury, in 
     consultation with the Federal Election Commission, shall 
     publicize--
       (1) the effect of the amendments made by this title, and
       (2) the interaction of requirements to file a notification 
     or report under section 527 of the Internal Revenue Code of 
     1986 and reports under the Federal Election Campaign Act of 
     1971.
       (b) Information.--Information provided under subsection (a) 
     shall be included in any appropriate form, instruction, 
     notice, or other guidance issued to the public by the 
     Secretary of the Treasury or the Federal Election Commission 
     regarding reporting requirements of political organizations 
     (as defined in section 527 of the Internal Revenue Code of 
     1986) or reporting requirements under the Federal Election 
     Campaign Act of 1971.

     SEC. __04. WAIVER OF PENALTIES.

       (a) Waiver of Filing Penalties.--Section 527 is amended by 
     adding at the end the following:
       ``(k) Authority To Waive.--The Secretary may waive all or 
     any portion of the--
       ``(1) tax assessed on an organization by reason of the 
     failure of the organization to give notice under subsection 
     (i), or
       ``(2) penalty imposed under subsection (j) for a failure to 
     file a report,
     on a showing that such failure was due to reasonable cause 
     and not due to willful neglect.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to any tax assessed or penalty imposed after June 
     30, 2000.
       At the end of subtitle A of title II insert the following:

     SEC. __. DEPENDENT CARE CREDIT.

       (a) Increase in Dollar Limit.--Subsection (c) of section 21 
     (relating to expenses for household and dependent care 
     services necessary for gainful employment) is amended--
       (1) by striking ``$2,400'' in paragraph (1) and inserting 
     ``$3,000'',
       (2) by striking ``$4,800'' in paragraph (2) and inserting 
     ``$6,000'',
       (b) Increase in Applicable Percentage.--Section 21(a)(2) 
     (defining applicable percentage) is amended--
       (1) by striking ``30 percent'' and inserting ``40 
     percent'', and
       (2) by striking ``$10,000'' and inserting ``$20,000''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2002.
       At the end of subtitle B of title IV add the following:

     SEC. __. EXCLUSION FROM INCOME OF CERTAIN AMOUNTS CONTRIBUTED 
                   TO COVERDELL EDUCATION SAVINGS ACCOUNTS.

       (a) In General.--Section 127 (relating to education 
     assistance programs), as amended by section 411(a), is 
     amended by redesignating subsection (d) as subsection (e) and 
     by inserting after subsection (c) the following new 
     subsection:
       ``(d) Qualified Coverdell Education Savings Account 
     Contributions.--
       ``(1) In general.--Gross income of an employee shall not 
     include amounts paid or incurred by the employer for a 
     qualified Coverdell education savings account contribution on 
     behalf of the employee.
       ``(2) Qualified coverdell education savings account 
     contribution.--For purposes of this subsection--
       ``(A) In general.--The term `qualified Coverdell education 
     savings account contribution' means an amount contributed 
     pursuant to an educational assistance program described in 
     subsection (b) by an employer to a Coverdell education 
     savings account established and maintained for the benefit of 
     an employee or the employee's spouse, or any lineal 
     descendent of either.
       ``(B) Dollar limit.--A contribution by an employer to a 
     Coverdell education savings account shall not be treated as a 
     qualified Coverdell education savings account contribution to 
     the extent that the contribution, when added to prior 
     contributions by the employer during the calendar year to 
     Coverdell education savings accounts established and 
     maintained for the same beneficiary, exceeds $500.
       ``(3) Special rules.--
       ``(A) Contributions not treated as educational assistance 
     in determining maximum exclusion.--For purposes of subsection 
     (a)(2), qualified Coverdell education savings account 
     contributions shall not be treated as educational assistance.
       ``(B) Self-employed not treated as employee.--For purposes 
     of this subsection, subsection (c)(2) shall not apply.
       ``(C) Adjusted gross income phaseout of account 
     contribution not applicable to individual employers.--The 
     limitation under section 530(c) shall not apply to a 
     qualified Coverdell education savings account contribution 
     made by an employer who is an individual.
       ``(D) Contributions not treated as an investment in the 
     contract.--For purposes of section 530(d), a qualified 
     Coverdell education savings account contribution shall not be 
     treated as an investment in the contract.''.
       (E) FICA Exclusion.--For purposes of section 530(d), the 
     exclusion from FICA taxes shall not apply.
       (b) Reporting Requirement.--Section 6051(a) (relating to 
     receipts for employees) is amended by striking ``and'' at the 
     end of paragraph (10), by striking the period at the end of 
     paragraph (11) and inserting ``, and'', and by adding at the 
     end the following new paragraph:
       ``(12) the amount of any qualified Coverdell education 
     savings account contribution under section 127(d) with 
     respect to such employee.''.
       (c) Conforming Amendment.--Section 221(e)(2)(A) is amended 
     by inserting ``(other than under subsection (d) thereof)'' 
     after ``section 127''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2001.
       On page 18, between lines 14 and 15, insert the following:

     SEC. 202. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits), as amended by sections 619 and 
     620, is further amended by adding at the end the following:

     ``SEC. 45G. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to the sum 
     of--
       ``(1) 25 percent of the qualified child care expenditures, 
     and
       ``(2) 10 percent of the qualified child care resource and 
     referral expenditures,
     of the taxpayer for such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 121) of the taxpayer 
     or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training, or
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer.
       ``(B) Fair market value.--The term `qualified child care 
     expenditures' shall not include expenses in excess of the 
     fair market value of such care.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including the licensing of the facility as a 
     child care facility.
     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 121) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) if the facility is the principal trade or business 
     of the taxpayer, at least 30 percent of the enrollees of such 
     facility are dependents of employees of the taxpayer, and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(3) Qualified child care resource and referral 
     expenditure.--
       ``(A) In general.--The term `qualified child care resource 
     and referral expenditure' means any amount paid or incurred 
     under a contract to provide child care resource and

[[Page 9209]]

     referral services to an employee of the taxpayer.
       ``(B) Nondiscrimination.--The services shall not be treated 
     as qualified unless the provision of such services (or the 
     eligibility to use such services) does not discriminate in 
     favor of employees of the taxpayer who are highly compensated 
     employees (within the meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  

       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If, during any taxable year, 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended by striking ``plus'' at the end of paragraph (12), by 
     striking the period at the end of paragraph (13) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(14) the employer-provided child care credit determined 
     under section 45G.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following:

``Sec. 45G. Employer-provided child care credit.''

       (3) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (26), by striking the period 
     at the end of paragraph (27) and inserting ``, and'', and by 
     adding at the end the following:
       ``(28) in the case of a facility with respect to which a 
     credit was allowed under section 45G, to the extent provided 
     in section 45G(f)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       On page 18, between lines 14 and 15, insert the following:

     SEC. 202. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD 
                   CARE ASSISTANCE.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     business related credits), as amended by sections 619 and 
     620, is further amended by adding at the end the following:

     ``SEC. 45G. EMPLOYER-PROVIDED CHILD CARE CREDIT.

       ``(a) In General.--For purposes of section 38, the 
     employer-provided child care credit determined under this 
     section for the taxable year is an amount equal to the sum 
     of--
       ``(1) 25 percent of the qualified child care expenditures, 
     and
       ``(2) 10 percent of the qualified child care resource and 
     referral expenditures,
     of the taxpayer for such taxable year.
       ``(b) Dollar Limitation.--The credit allowable under 
     subsection (a) for any taxable year shall not exceed 
     $150,000.
       ``(c) Definitions.--For purposes of this section--
       ``(1) Qualified child care expenditure.--
       ``(A) In general.--The term `qualified child care 
     expenditure' means any amount paid or incurred--
       ``(i) to acquire, construct, rehabilitate, or expand 
     property--

       ``(I) which is to be used as part of a qualified child care 
     facility of the taxpayer,
       ``(II) with respect to which a deduction for depreciation 
     (or amortization in lieu of depreciation) is allowable, and
       ``(III) which does not constitute part of the principal 
     residence (within the meaning of section 121) of the taxpayer 
     or any employee of the taxpayer,

       ``(ii) for the operating costs of a qualified child care 
     facility of the taxpayer, including costs related to the 
     training of employees, to scholarship programs, and to the 
     providing of increased compensation to employees with higher 
     levels of child care training, or
       ``(iii) under a contract with a qualified child care 
     facility to provide child care services to employees of the 
     taxpayer.
       ``(B) Fair market value.--The term `qualified child care 
     expenditures' shall not include expenses in excess of the 
     fair market value of such care.
       ``(2) Qualified child care facility.--
       ``(A) In general.--The term `qualified child care facility' 
     means a facility--
       ``(i) the principal use of which is to provide child care 
     assistance, and
       ``(ii) which meets the requirements of all applicable laws 
     and regulations of the State or local government in which it 
     is located, including the licensing of the facility as a 
     child care facility.
     Clause (i) shall not apply to a facility which is the 
     principal residence (within the meaning of section 121) of 
     the operator of the facility.
       ``(B) Special rules with respect to a taxpayer.--A facility 
     shall not be treated as a qualified child care facility with 
     respect to a taxpayer unless--
       ``(i) enrollment in the facility is open to employees of 
     the taxpayer during the taxable year,
       ``(ii) if the facility is the principal trade or business 
     of the taxpayer, at least 30 percent of the enrollees of such 
     facility are dependents of employees of the taxpayer, and
       ``(iii) the use of such facility (or the eligibility to use 
     such facility) does not discriminate in favor of employees of 
     the taxpayer who are highly compensated employees (within the 
     meaning of section 414(q)).
       ``(3) Qualified child care resource and referral 
     expenditure.--
       ``(A) In general.--The term `qualified child care resource 
     and referral expenditure' means any amount paid or incurred 
     under a contract to provide child care resource and

[[Page 9210]]

     referral services to an employee of the taxpayer.
       ``(B) Nondiscrimination.--The services shall not be treated 
     as qualified unless the provision of such services (or the 
     eligibility to use such services) does not discriminate in 
     favor of employees of the taxpayer who are highly compensated 
     employees (within the meaning of section 414(q)).
       ``(d) Recapture of Acquisition and Construction Credit.--
       ``(1) In general.--If, as of the close of any taxable year, 
     there is a recapture event with respect to any qualified 
     child care facility of the taxpayer, then the tax of the 
     taxpayer under this chapter for such taxable year shall be 
     increased by an amount equal to the product of--
       ``(A) the applicable recapture percentage, and
       ``(B) the aggregate decrease in the credits allowed under 
     section 38 for all prior taxable years which would have 
     resulted if the qualified child care expenditures of the 
     taxpayer described in subsection (c)(1)(A) with respect to 
     such facility had been zero.
       ``(2) Applicable recapture percentage.--
       ``(A) In general.--For purposes of this subsection, the 
     applicable recapture percentage shall be determined from the 
     following table:

                                                         The applicable
                                                              recapture
                                    ``If the recapture evpercentage is:
    Years 1-3....................................................100   
    Year 4........................................................85   
    Year 5........................................................70   
    Year 6........................................................55   
    Year 7........................................................40   
    Year 8........................................................25   
    Years 9 and 10................................................10   
    Years 11 and thereafter........................................0.  

       ``(B) Years.--For purposes of subparagraph (A), year 1 
     shall begin on the first day of the taxable year in which the 
     qualified child care facility is placed in service by the 
     taxpayer.
       ``(3) Recapture event defined.--For purposes of this 
     subsection, the term `recapture event' means--
       ``(A) Cessation of operation.--The cessation of the 
     operation of the facility as a qualified child care facility.
       ``(B) Change in ownership.--
       ``(i) In general.--Except as provided in clause (ii), the 
     disposition of a taxpayer's interest in a qualified child 
     care facility with respect to which the credit described in 
     subsection (a) was allowable.
       ``(ii) Agreement to assume recapture liability.--Clause (i) 
     shall not apply if the person acquiring such interest in the 
     facility agrees in writing to assume the recapture liability 
     of the person disposing of such interest in effect 
     immediately before such disposition. In the event of such an 
     assumption, the person acquiring the interest in the facility 
     shall be treated as the taxpayer for purposes of assessing 
     any recapture liability (computed as if there had been no 
     change in ownership).
       ``(4) Special rules.--
       ``(A) Tax benefit rule.--The tax for the taxable year shall 
     be increased under paragraph (1) only with respect to credits 
     allowed by reason of this section which were used to reduce 
     tax liability. In the case of credits not so used to reduce 
     tax liability, the carryforwards and carrybacks under section 
     39 shall be appropriately adjusted.
       ``(B) No credits against tax.--Any increase in tax under 
     this subsection shall not be treated as a tax imposed by this 
     chapter for purposes of determining the amount of any credit 
     under subpart A, B, or D of this part.
       ``(C) No recapture by reason of casualty loss.--The 
     increase in tax under this subsection shall not apply to a 
     cessation of operation of the facility as a qualified child 
     care facility by reason of a casualty loss to the extent such 
     loss is restored by reconstruction or replacement within a 
     reasonable period established by the Secretary.
       ``(e) Special Rules.--For purposes of this section--
       ``(1) Aggregation rules.--All persons which are treated as 
     a single employer under subsections (a) and (b) of section 52 
     shall be treated as a single taxpayer.
       ``(2) Pass-thru in the case of estates and trusts.--Under 
     regulations prescribed by the Secretary, rules similar to the 
     rules of subsection (d) of section 52 shall apply.
       ``(3) Allocation in the case of partnerships.--In the case 
     of partnerships, the credit shall be allocated among partners 
     under regulations prescribed by the Secretary.
       ``(f) No Double Benefit.--
       ``(1) Reduction in basis.--For purposes of this subtitle--
       ``(A) In general.--If a credit is determined under this 
     section with respect to any property by reason of 
     expenditures described in subsection (c)(1)(A), the basis of 
     such property shall be reduced by the amount of the credit so 
     determined.
       ``(B) Certain dispositions.--If, during any taxable year, 
     there is a recapture amount determined with respect to any 
     property the basis of which was reduced under subparagraph 
     (A), the basis of such property (immediately before the event 
     resulting in such recapture) shall be increased by an amount 
     equal to such recapture amount. For purposes of the preceding 
     sentence, the term `recapture amount' means any increase in 
     tax (or adjustment in carrybacks or carryovers) determined 
     under subsection (d).
       ``(2) Other deductions and credits.--No deduction or credit 
     shall be allowed under any other provision of this chapter 
     with respect to the amount of the credit determined under 
     this section.''.
       (b) Conforming Amendments.--
       (1) Section 38(b) of the Internal Revenue Code of 1986 is 
     amended by striking ``plus'' at the end of paragraph (12), by 
     striking the period at the end of paragraph (13) and 
     inserting ``, plus'', and by adding at the end the following:
       ``(14) the employer-provided child care credit determined 
     under section 45G.''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of such Code is amended by adding 
     at the end the following:

``Sec. 45G. Employer-provided child care credit.''

       (3) Section 1016(a) of such Code is amended by striking 
     ``and'' at the end of paragraph (26), by striking the period 
     at the end of paragraph (27) and inserting ``, and'', and by 
     adding at the end the following:
       ``(28) in the case of a facility with respect to which a 
     credit was allowed under section 45G, to the extent provided 
     in section 45G(f)(1).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2001.
       On page 314, after line 21, add the following:

     SEC. 803. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS CREATED 
                   BY THE TAXPAYER.

       (a) In General.--Subsection (e) of section 170 (relating to 
     certain contributions of ordinary income and capital gain 
     property) is amended by adding at the end the following new 
     paragraph:
       ``(7) Special rule for certain contributions of literary, 
     musical, or artistic compositions.--
       ``(A) In general.--In the case of a qualified artistic 
     charitable contribution--
       ``(i) the amount of such contribution shall be the fair 
     market value of the property contributed (determined at the 
     time of such contribution), and
       ``(ii) no reduction in the amount of such contribution 
     shall be made under paragraph (1).
       ``(B) Qualified artistic charitable contribution.--For 
     purposes of this paragraph, the term `qualified artistic 
     charitable contribution' means a charitable contribution of 
     any literary, musical, artistic, or scholarly composition, or 
     similar property, or the copyright thereon (or both), but 
     only if--
       ``(i) such property was created by the personal efforts of 
     the taxpayer making such contribution no less than 18 months 
     prior to such contribution,
       ``(ii) the taxpayer--

       ``(I) has received a qualified appraisal of the fair market 
     value of such property in accordance with the regulations 
     under this section, and
       ``(II) attaches to the taxpayer's income tax return for the 
     taxable year in which such contribution was made a copy of 
     such appraisal,

       ``(iii) the donee is an organization described in 
     subsection (b)(1)(A),
       ``(iv) the use of such property by the donee is related to 
     the purpose or function constituting the basis for the 
     donee's exemption under section 501 (or, in the case of a 
     governmental unit, to any purpose or function described under 
     subsection (c)),
       ``(v) the taxpayer receives from the donee a written 
     statement representing that the donee's use of the property 
     will be in accordance with the provisions of clause (iv), and
       ``(vi) the written appraisal referred to in clause (ii) 
     includes evidence of the extent (if any) to which property 
     created by the personal efforts of the taxpayer and of the 
     same type as the donated property is or has been--

       ``(I) owned, maintained, and displayed by organizations 
     described in subsection (b)(1)(A), and
       ``(II) sold to or exchanged by persons other than the 
     taxpayer, donee, or any related person (as defined in section 
     465(b)(3)(C)).

       ``(C) Maximum dollar limitation; no carryover of increased 
     deduction.--The increase in the deduction under this section 
     by reason of this paragraph for any taxable year--
       ``(i) shall not exceed the artistic adjusted gross income 
     of the taxpayer for such taxable year, and
       ``(ii) shall not be taken into account in determining the 
     amount which may be carried from such taxable year under 
     subsection (d).
       ``(D) Artistic adjusted gross income.--For purposes of this 
     paragraph, the term `artistic adjusted gross income' means 
     that portion of the adjusted gross income of the taxpayer for 
     the taxable year attributable to--
       ``(i) income from the sale or use of property created by 
     the personal efforts of the taxpayer which is of the same 
     type as the donated property, and
       ``(ii) income from teaching, lecturing, performing, or 
     similar activity with respect to property described in clause 
     (i).
       ``(E) Paragraph not to apply to certain contributions.--
     Subparagraph (A) shall not apply to any charitable 
     contribution of any

[[Page 9211]]

     letter, memorandum, or similar property which was written, 
     prepared, or produced by or for an individual while the 
     individual is an officer or employee of any person (including 
     any government agency or instrumentality) unless such letter, 
     memorandum, or similar property is entirely personal.
       ``(F) Copyright treated as separate property for partial 
     interest rule.--In the case of a qualified artistic 
     charitable contribution, the tangible literary, musical, 
     artistic, or scholarly composition, or similar property and 
     the copyright on such work shall be treated as separate 
     properties for purposes of this paragraph and subsection 
     (f)(3).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after the date of the 
     enactment of this Act in taxable years ending after such 
     date.
       At the end of subtitle A of title VIII insert the 
     following:

     SEC. __. WAIVER OF STATUTE OF LIMITATION FOR TAXES ON CERTAIN 
                   FARM VALUATIONS.

       If on the date of the enactment of this Act (or at any time 
     within 1 year after the date of the enactment) a refund or 
     credit of any overpayment of tax resulting from the 
     application of section 2032A(c)(7)(E) of the Internal Revenue 
     Code of 1986 is barred by any law or rule of law, the refund 
     or credit of such overpayment shall, nevertheless, be made or 
     allowed if claim therefor is filed before the date 1 year 
     after the date of the enactment of this Act.
       At the end of subtitle A of title VIII insert the 
     following:

     SEC. __. RESEARCH CREDIT.

       (a) Permanent Extension of Research Credit.--
       (1) In general.--Section 41 (relating to credit for 
     increasing research activities) is amended by striking 
     subsection (h).
       (2) Conforming Amendment.--Paragraph (1) of section 45C(b) 
     is amended by striking subparagraph (D).
       (3) Effective Date.--The amendments made by this subsection 
     shall apply to amounts paid or incurred after the date of the 
     enactment of this Act.
       (b) Increases in Rates of Alternative Incremental Credit.--
       (1) In General.--Subparagraph (A) of section 41(c)(4) 
     (relating to election of alternative incremental credit) is 
     amended--
       (A) by striking ``2.65 percent'' and inserting ``3 
     percent'',
       (B) by striking ``3.2 percent'' and inserting ``4 
     percent'', and
       (C) by striking ``3.75 percent'' and inserting ``5 
     percent''.
       (2) Effective Date.--The amendments made by this subsection 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
       At the end of the matter proposed to be inserted, add the 
     following:

     SEC. __. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING 
                   VACCINES AGAINST WIDESPREAD DISEASES.

       (a) In General.--Subpart D of part IV of subchapter A of 
     chapter 1 (relating to business related credits), as amended 
     by section 620, is amended by adding at the end the following 
     new section:

     ``SEC. 45G. CREDIT FOR MEDICAL RESEARCH RELATED TO DEVELOPING 
                   VACCINES AGAINST WIDESPREAD DISEASES.

       ``(a) General Rule.--For purposes of section 38, the 
     vaccine research credit determined under this section for the 
     taxable year is an amount equal to 30 percent of the 
     qualified vaccine research expenses for the taxable year.
       ``(b) Qualified Vaccine Research Expenses.--For purposes of 
     this section--
       ``(1) Qualified vaccine research expenses.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, the term `qualified vaccine research expenses' 
     means the amounts which are paid or incurred by the taxpayer 
     during the taxable year which would be described in 
     subsection (b) of section 41 if such subsection were applied 
     with the modifications set forth in subparagraph (B).
       ``(B) Modifications; increased incentive for contract 
     research payments.--For purposes of subparagraph (A), 
     subsection (b) of section 41 shall be applied--
       ``(i) by substituting `vaccine research' for `qualified 
     research' each place it appears in paragraphs (2) and (3) of 
     such subsection, and
       ``(ii) by substituting `100 percent' for `65 percent' in 
     paragraph (3)(A) of such subsection.
       ``(C) Exclusion for amounts funded by grants, etc.--The 
     term `qualified vaccine research expenses' shall not include 
     any amount to the extent such amount is funded by any grant, 
     contract, or otherwise by another person (or any governmental 
     entity).
       ``(2) Vaccine research.--The term `vaccine research' means 
     research to develop vaccines and microbicides for--
       ``(A) malaria,
       ``(B) tuberculosis,
       ``(C) HIV, or
       ``(D) any infectious disease (of a single etiology) which, 
     according to the World Health Organization, causes over 
     1,000,000 human deaths annually.
       ``(c) Coordination With Credit for Increasing Research 
     Expenditures.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     qualified vaccine research expenses for a taxable year to 
     which an election under this section applies shall not be 
     taken into account for purposes of determining the credit 
     allowable under section 41 for such taxable year.
       ``(2) Expenses included in determining base period research 
     expenses.--Any qualified vaccine research expenses for any 
     taxable year which are qualified research expenses (within 
     the meaning of section 41(b)) shall be taken into account in 
     determining base period research expenses for purposes of 
     applying section 41 to subsequent taxable years.
       ``(d) Special Rules.--
       ``(1) Limitations on foreign testing.--No credit shall be 
     allowed under this section with respect to any vaccine 
     research (other than human clinical testing) conducted 
     outside the United States.
       ``(2) Pre-clinical research.--No credit shall be allowed 
     under this section for pre-clinical research unless such 
     research is pursuant to a research plan an abstract of which 
     has been filed with the Secretary before the beginning of 
     such year. The Secretary, in consultation with the Secretary 
     of Health and Human Services, shall prescribe regulations 
     specifying the requirements for such plans and procedures for 
     filing under this paragraph.
       ``(3) Certain rules made applicable.--Rules similar to the 
     rules of paragraphs (1) and (2) of section 41(f) shall apply 
     for purposes of this section.
       ``(4) Election.--This section (other than subsection (e)) 
     shall apply to any taxpayer for any taxable year only if such 
     taxpayer elects to have this section apply for such taxable 
     year.
       (b) Inclusion in General Business Credit.--
       (1) In general.--Section 38(b), as amended by section 620, 
     is amended by striking ``plus'' at the end of paragraph (14), 
     by striking the period at the end of paragraph (15) and 
     inserting ``, plus'', and by adding at the end the following 
     new paragraph:
       ``(16) the vaccine research credit determined under section 
     45G.''.
       (2) Transition rule.--Section 39(d), as amended by section 
     620, is amended by adding at the end the following new 
     paragraph:
       ``(12) No carryback of section 45g credit before 
     enactment.--No portion of the unused business credit for any 
     taxable year which is attributable to the vaccine research 
     credit determined under section 45G may be carried back to a 
     taxable year ending before the date of the enactment of 
     section 45G.''.
       (c) Denial of Double Benefit.--Section 280C is amended by 
     adding at the end the following new subsection:
       ``(d) Credit for Qualified Vaccine Research Expenses.--
       ``(1) In general.--No deduction shall be allowed for that 
     portion of the qualified vaccine research expenses (as 
     defined in section 45G(b)) otherwise allowable as a deduction 
     for the taxable year which is equal to the amount of the 
     credit determined for such taxable year under section 45G(a).
       ``(2) Certain rules to apply.--Rules similar to the rules 
     of paragraphs (2), (3), and (4) of subsection (c) shall apply 
     for purposes of this subsection.''.
       (d) Deduction for Unused Portion of Credit.--Section 196(c) 
     (defining qualified business credits) is amended by striking 
     ``and'' at the end of paragraph (8), by striking the period 
     at the end of paragraph (9) and inserting ``, and'', and by 
     adding at the end the following new paragraph:
       ``(10) the vaccine research credit determined under section 
     45G(a) (other than such credit determined under the rules of 
     section 280C(d)(2)).''.
       (e) Technical Amendments.--
       (1) Section 1324(b)(2) of title 31, United States Code, is 
     amended by inserting ``or from section 45G(e) of such Code,'' 
     after ``1978,''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1, as amended by section 620, is 
     amended by adding at the end the following new item:

``Sec. 45G. Credit for medical research related to developing vaccines 
              against widespread diseases.''.

       (f) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.
       On page 55, strike line 8 and insert the following:
     529(c)(1), or 530(d)(2). For purposes of the preceding 
     sentence, the amount taken into account in determining the 
     amount excluded under section 529(c)(1) shall not include 
     that portion of the distribution which represents a return of 
     any contributions to the plan.
       On page 52, between lines 11 and 12, insert the following:

     SEC. 423. TREATMENT OF BONDS ISSUED TO ACQUIRE RENEWABLE 
                   RESOURCES ON LAND SUBJECT TO CONSERVATION 
                   EASEMENT.

       (a) In General.--Section 145 (defining qualified 501(c)(3) 
     bond) is amended by redesignating subsection (e) as 
     subsection (f) and by inserting after subsection (d) the 
     following new subsection:
       ``(e) Bonds Issued To Acquire Renewable Resources on Land 
     Subject to Conservation Easement.--

[[Page 9212]]

       ``(1) In general.--If--
       ``(A) the proceeds of any bond are used to acquire land (or 
     a long-term lease thereof) together with any renewable 
     resource associated with the land (including standing timber, 
     agricultural crops, or water rights) from an unaffiliated 
     person,
       ``(B) the land is subject to a conservation restriction--
       ``(i) which is granted in perpetuity to an unaffiliated 
     person that is--

       ``(I) a 501(c)(3) organization, or
       ``(II) a Federal, State, or local government conservation 
     organization,

       ``(ii) which meets the requirements of clauses (ii) and 
     (iii)(II) of section 170(h)(4)(A),
       ``(iii) which exceeds the requirements of relevant 
     environmental and land use statutes and regulations, and
       ``(iv) which obligates the owner of the land to pay the 
     costs incurred by the holder of the conservation restriction 
     in monitoring compliance with such restriction,
       ``(C) a management plan which meets the requirements of the 
     statutes and regulations referred to in subparagraph (B)(iii) 
     is developed for the conservation of the renewable resources, 
     and
       ``(D) such bond would be a qualified 501(c)(3) bond (after 
     the application of paragraph (2)) but for the failure to use 
     revenues derived by the 501(c)(3) organization from the sale, 
     lease, or other use of such resource as otherwise required by 
     this part,
     such bond shall not fail to be a qualified 501(c)(3) bond by 
     reason of the failure to so use such revenues if the revenues 
     which are not used as otherwise required by this part are 
     used in a manner consistent with the stated charitable 
     purposes of the 501(c)(3) organization.
       ``(2) Treatment of timber, etc.--
       ``(A) In general.--For purposes of subsection (a), the cost 
     of any renewable resource acquired with proceeds of any bond 
     described in paragraph (1) shall be treated as a cost of 
     acquiring the land associated with the renewable resource and 
     such land shall not be treated as used for a private business 
     use because of the sale or leasing of the renewable resource 
     to, or other use of the renewable resource by, an 
     unaffiliated person to the extent that such sale, leasing, or 
     other use does not constitute an unrelated trade or business, 
     determined by applying section 513(a).
       ``(B) Application of bond maturity limitation.--For 
     purposes of section 147(b), the cost of any land or renewable 
     resource acquired with proceeds of any bond described in 
     paragraph (1) shall have an economic life commensurate with 
     the economic and ecological feasibility of the financing of 
     such land or renewable resource.
       ``(C) Unaffiliated person.--For purposes of this 
     subsection, the term `unaffiliated person' means any person 
     who controls not more than 20 percent of the governing body 
     of another person.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to obligations issued after January 1, 2002, and 
     before January 1, 2005.
       At the end of subtitle A of title VIII add the following:

     SEC. __. ACCELERATION OF BENEFITS OF WAGE TAX CREDITS FOR 
                   EMPOWERMENT ZONES.

       (a) In General.--Section 113(d) of the Community Renewal 
     Tax Relief Act of 2000 is amended by striking ``December 31, 
     2001'' and inserting ``the earlier of--
       ``(1) the date of the enactment of the Restoring Earnings 
     To Lift Individuals and Empower Families (RELIEF) Act of 
     2001, or
       ``(2) July 1, 2001''.
       At the end of subtitle D of Title IV add the following:

     SEC. __. CONTRIBUTIONS OF BOOK INVENTORY.

       (a) In General.--Section 170(e)(3) (relating to certain 
     contributions of ordinary income and capital gain property) 
     is amended by adding at the end the following new 
     subparagraph:
       ``(D) Special rule for contributions of book inventory for 
     educational purposes.--
       ``(i) Contributions of book inventory.--In determining 
     whether a qualified book contribution is a qualified 
     contribution, subparagraph (A) shall be applied without 
     regard to whether or not--

       ``(I) the donee is an organization described in the matter 
     preceding clause (i) of subparagraph (A), and
       ``(II) the property is to be used by the donee solely for 
     the care of the ill, the needy, or infants.

       ``(ii) Qualified book contribution.--For purposes of this 
     paragraph, the term `qualified book contribution' means a 
     charitable contribution of books, but only if the 
     contribution is to an organization--

       ``(I) described in subclause (I) or (III) of paragraph 
     (6)(B)(i), or
       ``(II) described in section 501(c)(3) and exempt from tax 
     under section 501(a) which is organized primarily to make 
     books available to the general public at no cost or to 
     operate a literacy program.''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after the date of the 
     enactment of this Act.
       At the appropriate place, insert the following:

     SEC. __. TREATMENT OF CERTAIN HOSPITAL SUPPORT ORGANIZATIONS 
                   AS QUALIFIED ORGANIZATIONS FOR PURPOSES OF 
                   DETERMINING ACQUISITION INDEBTEDNESS.

       (a) In General.--Subparagraph (C) of section 514(c)(9) 
     (relating to real property acquired by a qualified 
     organization) is amended by striking ``or'' at the end of 
     clause (ii), by striking the period at the end of clause 
     (iii) and inserting ``; or'', and by adding at the end the 
     following new clause:

       ``(iv) a qualified hospital support organization (as 
     defined in subparagraph (I)).''.

       (b) Qualified Hospital Support Organizations.--Paragraph 
     (9) of section 514(c) is amended by adding at the end the 
     following new subparagraph:
       ``(I) Qualified hospital support organizations.--For 
     purposes of subparagraph (C)(iv), the term `qualified 
     hospital support organization' means, with respect to any 
     eligible indebtedness (including any qualified refinancing of 
     such eligible indebtedness), a support organization (as 
     defined in section 509(a)(3)) which supports a hospital 
     described in section 119(d)(4)(B) and with respect to which--

       ``(i) more than half of its assets (by value) at any time 
     since its organization--

       ``(I) were acquired, directly or indirectly, by gift or 
     devise, and
       ``(II) consisted of real property, and

       ``(ii) the fair market value of the organization's real 
     estate acquired, directly or indirectly, by gift or devise, 
     exceeded 10 percent of the fair market value of all 
     investment assets held by the organization immediately prior 
     to the time that the eligible indebtedness was incurred.

     For purposes of this subparagraph, the term `eligible 
     indebtedness' means indebtedness secured by real property 
     acquired by the organization, directly or indirectly, by gift 
     or devise, the proceeds of which are used exclusively to 
     acquire any leasehold interest in such real property or for 
     improvements on, or repairs to, such real property. A 
     determination under clauses (i) and (ii) of this subparagraph 
     shall be made each time such an eligible indebtedness (or the 
     qualified refinancing of such an eligible indebtedness) is 
     incurred. For purposes of this subparagraph, a refinancing of 
     such an eligible indebtedness shall be considered qualified 
     if such refinancing does not exceed the amount of the 
     refinanced eligible indebtedness immediately before the 
     refinancing.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to indebtedness incurred after December 31, 2003.
       On page 314, after line 21, add the following:

     SEC. __. TAX-EXEMPT BOND AUTHORITY FOR TREATMENT FACILITIES 
                   REDUCING ARSENIC LEVELS IN DRINKING WATER.

       (a) In General.--Section 142(e) (relating to facilities for 
     the furnishing of water) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B), respectively,
       (2) by striking ``For purposes'' and inserting the 
     following:
       ``(1) In general.--For purposes'', and
       (3) by adding at the end the following:
       ``(2) Facilities reducing arsenic levels included.--Such 
     term includes improvements to facilities in order to comply 
     with the 10 parts per billion arsenic standard recommended by 
     the National Academy of Sciences.''.
       (b) Facilities Not Subject To State Cap.--Section 146(g) 
     (relating to exception for certain bonds) is amended--
       (1) by striking ``and'' at the end of paragraph (3),
       (2) by striking the period at the end of paragraph (4) and 
     inserting ``, and'', and
       (3) by inserting after paragraph (4), the following new 
     paragraph:
       ``(5) any exempt facility bond issued as part of an issue 
     described in section 142(a)(4) (relating to facilities for 
     the furnishing of water), but only to the extent the property 
     to be financed by the net proceeds of the issue is described 
     in section 142(e)(2).''.
       (c) Exempt from AMT.--Section 57(a)(5)(C) (relating to tax-
     exempt interest of specified private activity bonds) is 
     amended by adding at the end the following new clause:
       ``(v) Exception for certain water facility bonds.--For 
     purposes of clause (i), the term `private activity bond' 
     shall not include any exempt facility bond issued as part of 
     an issue described in section 142(a)(4) (relating to 
     facilities for the furnishing of water), but only to the 
     extent the property to be financed by the net proceeds of the 
     issue is described in section 142(e)(2).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
       Beginning on page 19, line 21, strike all through page 22, 
     line 1, and insert:
       ``(7) Applicable percentage.--For purposes of paragraph 
     (2), the applicable percentage shall be determined in 
     accordance with the following table:

``For taxable years beginning in calendarThe applicable percentage is--
      2005.........................................................174 
      2006.........................................................184 
      2007.........................................................187 
      2008.........................................................190 

[[Page 9213]]

      2009 and thereafter.......................................200.''.
       (c) Technical Amendments.--
       On page 21, line 2, strike ``2005'' and insert ``2004''.
       On page 21, strike the table following line 21, and insert:
``For taxable years beginning in calendarThe applicable percentage is--
      2005.........................................................174 
      2006.........................................................184 
      2007.........................................................187 
      2008.........................................................190 
      2009 and thereafter..........................................200.
       At the end of subtitle A of title VIII, insert:

     SEC. __. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAX PAYMENTS 
                   DUE IN 2011.

       Notwithstanding section 6655 of the Internal Revenue Code 
     of 1986, the amount of any required installment of any 
     corporate estimated tax payment due under such section in 
     July, August, or September of 2011 shall be equal to 170 
     percent of the amount of such installment determined without 
     regard to this section.

                          ____________________