[House Report 104-100]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-100
_______________________________________________________________________


 
PROVIDING FOR THE CONSIDERATION OF H.R. 1215, THE CONTRACT WITH AMERICA 
                         TAX RELIEF ACT OF 1995

                                _______


   April 4, 1995.--Referred to the House Calendar and ordered to be 
                                printed

_______________________________________________________________________


   Mr. Solomon, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 128]
    The Committee on Rules, having had under consideration 
House Resolution 128, by a record vote of 9 to 4, report the 
same to the House with the recommendation that the resolution 
be adopted.

       Brief Summary and Explanation of Provisions of Resolution

    The resolution provides for the consideration of H.R. 1215, 
the ``Contract With America Tax Relief Act of 1995'' under a 
modified closed rule.
    The rule waives all points of order against the bill (see 
next paragraph for an explanation of known waivers needed). The 
rule provides four hours of general debate, with two-hours 
allocated to the Ways and Means Committee, and one-hour each to 
the Budget and Commerce committees. The rule makes in order the 
text of H.R. 1327, as modified by the amendment printed in the 
Committee report, as the base bill for amendment purposes. All 
points of order against the amendment are waived. The rule 
makes in order one amendment in the nature of a substitute by 
Representative Gephardt of Missouri which is non-amendable but 
subject to one hour of debate. All points of order are waived 
against the Gephardt amendment. Finally, the rule provides one 
motion to recommit, with or without instructions.
    Two Budget Act points of order lie against the bill: 
section 303(a) for revenue changes preempting the coming budget 
resolution for fiscal year 1996; and section 311(a) for 
breaching the five-year revenue floor. Those points of order 
would also lie against the amendment in the nature of a 
substitute made in order as base text as well as the Gephardt 
substitute. In addition, both substitutes require a waiver of 
clause 7 of rule XVI, germaneness, since they contain matters 
from unrelated bills to offset the revenue losses; and the base 
text and Gephardt substitutes require a waiver of clause 5(a) 
of rule XXI, prohibiting appropriations in a legislative bill, 
because of its disposition of the U.S. Uranium Enrichment 
Corporation appropriations. Because all three vehicles may have 
other vulnerabilities, the Committee waived all points of order 
out of caution.
                Explanation of Modification to H.R. 1327

    The modification to H.R. 1327 (which is made base text for 
amendment purposes by the rule) does two things:
    First, it takes out a tax provision contained in the 
Commerce Committee's title III relating to the Privatization of 
the Uranium Enrichment Corporation. This is being done at the 
request of Chairman Archer of the Ways and Means Committee, 
with the agreement of the Commerce Committee. The tax provision 
in question was not referred to or reported by his committee.
    Second, the modification contains a revised version of the 
Upton-Castle-Martini amendment tying the tax provisions to 
deficit reduction and a balanced budget. The revised amendment 
makes the effectiveness of the tax provisions contingent upon 
the adoption of a fiscal 1996 budget resolution that will 
project a balanced budget by the year 2002; and on a 
confirmation in the reconciliation conference report that it 
meets the required deficit reduction targets. Thereafter, the 
amendment calls for annual monitoring of the deficit reduction 
targets and congressional action if necessary to bring the 
deficit back within the projected levels to achieve a balanced 
budget by 2002.
    Note.--No explanation or summary of the Gephardt amendment 
in the nature of a substitute was provided at the time the 
revised version was filed with the Committee at noon on 
Tuesday, April 4th.

                            Committee Votes

    Pursuant to clause 2(l)(B) of House rule XI the results of 
each rollcall vote on an amendment or motion to report, 
together with the names of those voting for and against, are 
printed below. The amendment numbers by the names of Members 
are the numbers assigned to amendments in the order they were 
filed with the Rules Committee. A summary of each amendment 
filed is included following the rollcall votes for reference 
purposes:

                    rules committee rollcall no. 121

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Ms. Pryce.
    Summary of Motion: Make in order amendment No. 24 by Rep. 
Ganske.
    Results: Rejected, 6 to 7.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Yea; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Yea; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall no. 122

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Moakley.
    Summary of Motion: Allow a division of the question and a 
separate vote on titles II and V (H.R. 1215), the senior 
citizen equity provisions.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Yea; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    rules committee rollcall No. 123

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 1 by Rep. 
Frost.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall No. 124

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 19 by Rep. 
Browder.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall No. 125

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 36 by Rep. 
Harman.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    Rules Committee Rollcall No. 126

    Date: April 4, 1995.
    Measure: Rule for consideration of H.R. 1215, Contract With 
America Tax Relief Act.
    Motion By: Mr. Moakley.
    Summary of Motion: Make in order amendment No. 23 by Reps. 
Kennedy and Burton.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    Rules Committee Rollcall No. 127

    Date: April 4, 1995.
    Measure: Rule for consideration of H.R. 1215, Contract With 
America Tax Relief Act.
    Motion By: Mr. Hall.
    Summary of Motion: Make in order amendment No. 34 by Rep. 
Wolf.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    Rules Committee Rollcall No. 128

    Date: April 4, 1995.
    Measure: Rule for consideration of H.R. 1215, Contract With 
America Tax Relief Act.
    Motion By: Mr. Hall.
    Summary of Motion: Make in order amendment No. 22 by Rep. 
Pryce.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    Rules Committee Rollcall No. 129

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Moakley.
    Summary of Motion: Make in order amendment No. 25 by Rep. 
Kleczka.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    Rules Committee Rollcall No. 130

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Hall.
    Summary of Motion: Make in order amendment No. 8 by Rep. 
Bunning.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    Rules Committee Rollcall No. 131

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 3 by Rep. 
Kennelly.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    rules committee rollcall no. 132

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 30 by Rep. 
Pomeroy.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall no. 133

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Beilenson.
    Summary of Motion: Make in order amendment No. 21 by Rep. 
Wyden.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall no. 134

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Beilenson.
    Summary of Motion: Make in order amendment No. 41 by Rep. 
Kleczka.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    rules committee rollcall no. 135

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Frost.
    Summary of Motion: Make in order amendment No. 33 by Rep. 
Evans.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall no. 136

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Beilenson.
    Summary of Motion: Make in order amendments: No. 35 by Rep. 
Stupak, No. 18 by Rep. Schiff, and No. 9 by Reps. Nadler and 
Lowey.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    rules committee rollcall no. 137

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Beilenson.
    Summary of Motion: Make in order amendments: No. 6 by Rep. 
Traficant, No. 7 by Rep. Meehan, No. 16 and No. 17 by Rep. 
Schiff, and No. 32 by Rep. Abercrombie.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.
                    Rules Committee Rollcall No. 138

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Hall.
    Summary of Motion: Make in order amendments: No. 4 by Rep. 
Sanders, and No. 39 by Rep. Orton.
    Results: Rejected, 4 to 9.
    Vote by Member: Quillen--Nay; Dreier--Nay; Goss--Nay; 
Linder--Nay; Pryce--Nay; Diaz-Balart--Nay; McInnis--Nay; 
Waldholtz--Nay; Moakley--Yea; Beilenson--Yea; Frost--Yea; 
Hall--Yea; Solomon--Nay.

                    Rules Committee Rollcall No. 139

    Date: April 4, 1995.
    Measure: Rule for the consideration of H.R. 1215, Contract 
With America Tax Relief Act.
    Motion By: Mr. Quillen.
    Summary of Motion: Report rule favorably to the House.
    Results: Adopted, 9 to 4.
    Vote by Member: Quillen--Yea; Dreier--Yea; Goss--Yea; 
Linder--Yea; Pryce--Yea; Diaz-Balart--Yea; McInnis--Yea; 
Waldholtz--Yea; Moakley--Nay; Beilenson--Nay; Frost--Nay; 
Hall--Nay; Solomon--Yea.
        Amendments Submitted to the Rules Committee on H.R. 1215

                          April 3 (3:00 P.M.)

    1. Frost (TX)--Prohibit the enactment of the tax provisions 
until the OMB Director certifies that the federal budget has 
been balanced for one fiscal year.
    2. Bass (NH)--Delays effective date of H.R. 1215 until 
which time Congress adopts a budget resolution which projects a 
balanced federal budget by fiscal year 2002.
    3. Kennelly--Increase the Social Security retirement test 
for the blind from the current law $11,280 annually by $2,000 a 
year through 1999 when it would be $19,280 and then all the way 
to $30,000 in 2000.
    4. Sanders--Amends IRA provisions of H.R. 1215: increases 
levels of tax deductible IRA contributions, increases the 
income thresholds that set eligibility for deductibility of IRA 
contributions, authorizes additional IRA contributions for 
nonworking spouses, allows penalty-free withdrawals for middle-
class taxpayers. Finances tax changes by establishment of a 
minimum tax on the income of foreign-owned companies.
    5. Traficant--Establishes a 10% domestic investment tax 
credit for purchased goods comprised of parts and services of 
which more than 50% are American-made.
    6. Traficant--Reduces the capital gains tax to 10% with the 
proceeds used to purchase public debt obligations. Proceeds of 
the sale must be invested in government securities.
    7. Meehan--Reduces the capital gains tax rate to 23.5 
percent for productive assets held for 3 years or longer; to 19 
percent for assets held 6 years or longer; indexes rates for 
inflation.
    8. Bunning--Amends the adoption tax credit to allow an 
individual to carry forward the balance of the available $5,000 
in tax credit and claim it against their tax liability in any 
future taxable year.
    9. Nadler/Lowey--Allows for the immediate repeal of the tax 
on Social Security; pays for this by striking the provisions 
eliminating the corporate minimum tax.
    10. Nadler--Require that tax liability be indexed to 
compensate for regional differences in the cost of living.
    11. Porter--Delays implementation of the tax cuts until the 
budget is in balance and the tax cut would not result in a 
budget deficit.
    12. Kolbe/Knollenberg--Creates a non-refundable 100% tax 
credit for up to $100 per wage earner/per year for donations to 
charities engaged in helping low-income Americans. Funds 
resulting in loss in revenue by repealing the EITC expansion 
enacted in OBRA '93.
    13. Zeliff/Istook--Ties the implementation of tax cuts to 
the ability of Congress to reach established spending cut 
targets (which establish a glide path to a balanced budget by 
2002). Tax cuts would remain in effect so long as Congress met 
the established spending target each year.
    14. Engel--Allows individuals to withdraw funding from an 
American Dream Savings account to be used to start-up or expand 
a business. Includes a limit on this withdrawal of $50,000.
    15. Allard--Repeals section 1257 of the tax code which 
requires the ordinary treatment of gain on the sale of 
converted wetlands (land converted to farming) and highly 
erodible cropland. Revenue loss offset by additional reductions 
in the discretionary caps from 1996-2000.
    16. Schiff--Eliminate the indexing for inflation, except 
for capital gains.
    17. Schiff--Places a maximum 6 month holding requirement 
for all capital gains recognition.
    18. Schiff--Scales back the elimination of the Alternative 
Minimum Tax by proposing a reduction to 18% from its current 
rate of 20%.
    19. Browder--Establishes annual deficit targets. Tax cuts 
would only be in effect for years where Congress met the 
established annual deficit targets.
    20. Kim--Establishes a clear, objective test under which an 
individual can qualify for independent contractor status; 
requires independent contractors to list 1099 income on their 
tax returns; increases penalty on businesses for not issuing 
1099's from $50 to $75 per offense and from $100 to $125 for 
doing so intentionally.
    21. Wyden/Morella/Regula/Kennedy (MA)--Attaches long term 
care insurance standards to the tax incentives.
    22. Pryce--Provides a tax credit equal to 50% of the 
expense incurred by an employer to provide licensed, on-site or 
site-adjacent dependent child care.
    23. Kennedy (MA)/Burton--Enhances the adoption incentives 
in H.R. 1215.
    24. Ganske--Lowers the child tax credit ``cap'' from 
$200,000 to $95,000 and shortens the phase out from $50,000 to 
$25,000.
    25. Kleczka--Requires that the use of federal offices for 
regular lodging purposes by Members of Congress be treated as a 
taxable employer benefit as in the private sector.
    26. Doolittle--Eliminates the $200,000 income eligibility 
ceiling on the child tax credit.
    27. MacIntosh--Second degree amendment to any amendment 
lowering the income limit for the $500 per-child tax credit. 
Directs the savings from such an amendment to increase the 
value of the marriage penalty tax credit from $145 to $310.
    28. Salmon/Tate/Burr--Gives taxpayers the choice of taking 
the $500 family tax credit, or having it reduce the public 
debt.
    29. Goodling--Lowers child tax credit limit from $200,000 
to $95,000 (phasing out at $120,000).
    30. Pomeroy--Amendment to raise the deduction of health 
insurance premiums for self-employed individuals from 25- to 
80-percent and allow employees who are ineligible to 
participate in employer-subsidized health plans to deduct 80 
percent of their health insurance premiums. This would be paid 
for by lowering the income eligibility for the $500 child tax 
credit from $200,000 to $55,000.
    31. Foglietta--Establishes an independent commission, 
similar to the Base Closure Commission, to develop 
recommendations for reducing corporate and farm subsidies for 
the purposes of deficit reduction.
    32. Abercrombie--Modifies the one-time capital gains 
exclusion for homeowners over 55 years of age by increasing the 
excluded amount, increasing the minimum ownership period, and 
increasing the minimum principal residence period.
    33. Evans--Amendment to reduce corporate tax loopholes and 
apply savings to deficit reduction.
    34. Wolf--Strikes the sections that change the employee 
contributions to the Civil Service Retirement System and 
Federal Employee Retirement System.
    35. Stupak--Strikes subtitle C which calls for a phaseout 
of the alternative minimum tax for corporations.
    36. Harman--Provides that savings cut from discretionary 
spending be put in a ``lockbox'' for deficit reduction.
    37. Gephardt--Democrat amendment in the nature of a 
substitute entitled ``The School Act.'' It includes provisions 
to: (a) let middle-income families deduct up to $10,000 in 
educational expenses every year, (b) let students deduct 
interest payments on their student loans, and (c) add Browder 
amendment stating that no tax cut can become law unless there 
is a plan to balance the budget and pay for the tax cuts. Cost 
would be offset by lowering discretionary caps to a freeze at 
1995 levels. Additional cuts may be necessary to fully offset 
costs of proposal.
    38. Hilliard--Amendment to declare the exclusion from gross 
income interest on certain waterway facility bonds issued 
before July 1, 1989 by the Marengo County Port Authority.
    39. Orton--Expands the current IRA statute to allow 
individuals to borrow or lend (to their children) money for a 
first time home purchase of a primary residence.
    40. Obey--Grants the President the authority to 
unilaterally reduce the lowest income tax rate during a period 
of low economic growth. Allows the President to regain the lost 
revenue when the economy is growing again by placing a surtax 
on higher income tax brackets.
    41. Kleczka--Requires that in order to qualify as a long 
term insurance contract, the contract must meet the relevant 
standards established in the National Association of Insurance 
Commissioners' Long Term Care Model Act and Regulations.
    42. Hansen--Amends the provisions relating to federal 
employees by making them only applicable to new employees 
starting employment after December 31, 1995.
                                 PART 1

    The amendment in the nature of a substitute to be 
considered as an original text pursuant to the rule consists of 
the text of H.R. 1327 modified by the following amendment:
    Page 25, strike lines 11 through 24; and
    At the end of title VI of the bill insert the following new 
subtitle:

       Subtitle G--Tax Reduction Contingent on Deficit Reduction

SEC. 6701. TAX REDUCTION CONTINGENT ON DEFICIT REDUCTION.

    Notwithstanding any other provision of this title and any 
amendment made by this title, no provision of this title shall 
take effect unless--
          (1) the concurrent resolution on the budget for 
        fiscal year 1996, as agreed to, provides that the 
        budget of the United States will be in balance by 
        fiscal year 2002, and
          (2) the conference report, as agreed to, on the 
        reconciliation bill for that resolution--
                  (A) achieves the aggregate amount of deficit 
                reduction to effectuate the reconciliation 
                instructions required for the years covered by 
                that resolution necessary to so balance the 
                budget, and
                  (B) contains a statement, based on estimates 
                made by the Director of the Congressional 
                Budget Office, that such conference report does 
                so comply.

SEC. 6702. MONITORING.

    The Committees on the Budget of the House of 
Representatives and the Senate shall each monitor progress on 
achieving a balanced budget consistent with the most recently 
agreed to concurrent resolution on the budget for fiscal year 
1996 or any subsequent fiscal year (and the reconciliation Act 
for that resolution) or the most recently agreed to concurrent 
resolution on the budget that would achieve a balanced budget 
by fiscal year 2002 (and the reconciliation Act for that 
resolution). After consultation with the Director of the 
Congressional Budget Office, each such committee shall submit a 
report of its findings to its House and the President on or 
before December 15, 1995, and annually thereafter. Each such 
report shall contain the following:
          (1) Estimates of the deficit levels (based on 
        legislation enacted through the date of the report) for 
        each fiscal year through fiscal year 2002.
          (2) An analysis of the variance (if any) between 
        those estimated deficit levels and the levels set forth 
        in the concurrent resolution on the budget for fiscal 
        year 1996 or the most recently agreed to concurrent 
        resolution on the budget that would achieve a balanced 
        budget by fiscal year 2002.
          (3) Policy options to achieve the additional levels 
        of deficit reduction necessary to balance the budget of 
        the United States by fiscal year 2002.

SEC. 6703. CONGRESSIONAL ACTION.

    Each House of Congress shall incorporate the policy options 
included in the report of its Committee on the Budget under 
section 6702(a)(3) (or other policy options) in developing a 
concurrent resolution on the budget for any fiscal year that 
achieves the additional levels of deficit reduction necessary 
to balance the budget of the United States by fiscal year 2002.

SEC. 6704. PRESIDENTIAL ACTION.

    If the President submits a budget under section 1105(a) of 
title 31, United States Code, that does not provide for a 
balanced budget for the United States by fiscal year 2002, then 
the President shall include with that submission a complete 
budget that balances the budget by that fiscal year.
                              ----------                              

                                 PART 2

    The amendment in the nature of a substitute to be offered 
by Representative Gephardt of Missouri or his designee is as 
follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE CONTENTS.

  (a) Short Title.--This Act may be cited as the ``School Act of 
1995''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.

         TITLE I--INCENTIVES FOR INVESTMENT IN HIGHER EDUCATION

Sec. 101. Deduction for higher education expenses.
Sec. 102. Deduction for interest on loans for higher education.
Sec. 103. Expansion of education saving bond program.
Sec. 104. Deduction for IRA contributions available to all middle-
income taxpayers.
Sec. 105. Distributions from individual retirement plans may be used 
without penalty to pay higher education expenses.
Sec. 106. Spousal IRA computed on basis of compensation of both 
spouses.

    TITLE II--NONDEDUCTIBLE TAX-FREE INDIVIDUAL RETIREMENT ACCOUNTS

Sec. 201. Establishment of nondeductible tax-free individual retirement 
accounts.

          TITLE III--TAX BENEFITS CONTINGENT ON FEDERAL BUDGET

Sec. 301. Effective dates of tax benefits delayed until Federal budget 
projected to be in balance.
Sec. 302. Termination of tax benefits if Federal budget deficit 
reduction targets are not met.

TITLE IV--REVISIONS TO DISCRETIONARY SPENDING LIMITS AND BUDGET PROCESS

Sec. 401. Short title.
Sec. 402. Discretionary spending limits.
Sec. 403. General statement and definitions.
Sec. 404. Enforcing discretionary spending limits.
Sec. 405. Enforcing pay-as-you-go.
Sec. 406. Reports and orders.
Sec. 407. Technical correction.
Sec. 408. Effective date.
Sec. 409. Savings from provisions of this title reducing discretionary 
spending to be added to pay-as-you-go scorecard.
Sec. 410. Clarification of order in which adjustments to discretionary 
spending limits are to be made.

         TITLE V--PROVISIONS RELATING TO INTERNATIONAL TAXATION

Sec. 501. Revision of tax rules on expatriation.
Sec. 502. Improved information reporting on foreign trusts.
Sec. 503. Modification of rules relating to foreign trusts having one 
or more United States beneficiaries.
Sec. 504. Foreign persons not to be treated as owners under grantor 
trust rules.
Sec. 505. Gratuitous transfers by partnerships and foreign 
corporations.
Sec. 506. Information reporting regarding large foreign gifts.
Sec. 507. Modification of rules relating to foreign trusts which are 
not grantor trusts.
Sec. 508. Residence of estates and trusts.

 TITLE VI--EXTENSION OF AUTHORITY OF FEDERAL COMMUNICATIONS COMMISSION 
                       TO USE COMPETITIVE BIDDING

Sec. 601. Extension of authority.

  TITLE VII--PRIVATIZATION OF THE UNITED STATES ENRICHMENT CORPORATION

Sec. 701. Short title and reference.
Sec. 702. Production facility.
Sec. 703. Definitions.
Sec. 704. Employees of the corporation.
Sec. 705. Marketing and contracting authority.
Sec. 706. Privatization of the corporation.
Sec. 707. Periodic certification of compliance.
Sec. 708. Licensing of other technologies.
Sec. 709. Conforming amendments.
         TITLE I--INCENTIVES FOR INVESTMENT IN HIGHER EDUCATION

SEC. 101. DEDUCTION FOR HIGHER EDUCATION EXPENSES.

  (a) Deduction Allowed.-- Part VII of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to additional itemized 
deductions for individuals) is amended by redesignating section 220 as 
section 221 and by inserting after section 219 the following new 
section:
``SEC. 220. HIGHER EDUCATION TUITION AND FEES.

  ``(a) Allowance of Deduction.--In the case of an individual, there 
shall be allowed as a deduction the amount of qualified higher 
education expenses paid by the taxpayer during the taxable year.
  ``(b) Limitations.--
          ``(1) Dollar limitation.--
                  ``(A) In general.--The amount allowed as a deduction 
                under subsection (a) for any taxable year shall not 
                exceed $10,000.
                  ``(B) Phase-in.--In the case of taxable years 
                beginning in 1996, 1997, or 1998, `$5,000' shall be 
                substituted for `$10,000' in subparagraph (A).
          ``(2) Limitation based on modified adjusted gross income.--
                  ``(A) In general.--The amount which would (but for 
                this paragraph) be taken into account under paragraph 
                (1) shall be reduced (but not below zero) by the amount 
                determined under subparagraph (B).
                  ``(B) Amount of reduction.--The amount determined 
                under this subparagraph equals the amount which bears 
                the same ratio to the amount which would be so taken 
                into account as--
                          ``(i) the excess of--
                                  ``(I) the taxpayer's modified 
                                adjusted gross income for such taxable 
                                year, over
                                  ``(II) $50,000 ($75,000 in the case 
                                of a joint return), bears to
                          ``(ii) $10,000.
                  ``(C) Modified adjusted gross income.--The term 
                `modified adjusted gross income' means the adjusted 
                gross income of the taxpayer for the taxable year 
                determined--
                          ``(i) without regard to this section and 
                        sections 911, 931, and 933, and
                          ``(ii) after the application of sections 86, 
                        135, 219 and 469.
                For purposes of sections 86, 135, 219, and 469, 
                adjusted gross income shall be determined without 
                regard to the deduction allowed under this section.
  ``(c) Qualified Higher Education Expenses.--For purposes of this 
section--
          ``(1) Qualified higher education expenses.--
                  ``(A) In general.--The term `qualified higher 
                education expenses' means tuition and fees charged by 
                an educational institution and required for the 
                enrollment or attendance of--
                          ``(i) the taxpayer,
                          ``(ii) the taxpayer's spouse, or
                          ``(iii) any dependent of the taxpayer with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151,
                as an eligible student at an institution of higher 
                education.
                  ``(B) Exception for education involving sports, 
                etc.--Such term does not include expenses with respect 
                to any course or other education involving sports, 
                games, or hobbies, unless such expenses--
                          ``(i) are part of a degree program, or
                          ``(ii) are deductible under this chapter 
                        without regard to this section.
                  ``(C) Exception for nonacademic fees.--Such term does 
                not include any student activity fees, athletic fees, 
                insurance expenses, or other expenses unrelated to a 
                student's academic course of instruction.
                  ``(D) Eligible student.--For purposes of subparagraph 
                (A), the term `eligible student' means a student who--
                          ``(i) meets the requirements of section 
                        484(a)(1) of the Higher Education Act of 1965 
                        (20 U.S.C. 1091(a)(1)), as in effect on the 
                        date of the enactment of this section, and
                          ``(ii)(I) is carrying at least one-half the 
                        normal full-time work load for the course of 
                        study the student is pursuing, as determined by 
                        the institution of higher education, or
                          ``(II) is enrolled in a course which enables 
                        the student to improve the student's job skills 
                        or to acquire new job skills.
                  ``(E) Identification requirement.--No deduction shall 
                be allowed under subsection (a) to a taxpayer with 
                respect to an eligible student unless the taxpayer 
                includes the name, age, and taxpayer identification 
                number of such eligible student on the return of tax 
                for the taxable year.
          ``(2) Institution of higher education.--The term `institution 
        of higher education' means an institution which--
                  ``(A) is described in section 481 of the Higher 
                Education Act of 1965 (20 U.S.C. 1088), as in effect on 
                the date of the enactment of this section, and
                  ``(B) is eligible to participate in programs under 
                title IV of such Act.
  ``(d) Special Rules.--
          ``(1) No double benefit.--
                  ``(A) In general.--No deduction shall be allowed 
                under subsection (a) for qualified higher education 
                expenses with respect to which a deduction is allowable 
                to the taxpayer under any other provision of this 
                chapter unless the taxpayer irrevocably waives his 
                right to the deduction of such expenses under such 
                other provision.
                  ``(B) Dependents.--No deduction shall be allowed 
                under subsection (a) to any individual with respect to 
                whom a deduction under section 151 is allowable to 
                another taxpayer for a taxable year beginning in the 
                calendar year in which such individual's taxable year 
                begins.
                  ``(C) Savings bond exclusion.--A deduction shall be 
                allowed under subsection (a) for qualified higher 
                education expenses only to the extent the amount of 
                such expenses exceeds the amount excludable under 
                section 135 for the taxable year.
          ``(2) Limitation on taxable year of deduction.--
                  ``(A) In general.--A deduction shall be allowed under 
                subsection (a) for any taxable year only to the extent 
                the qualified higher education expenses are in 
                connection with enrollment at an institution of higher 
                education during the taxable year.
                  ``(B) Certain prepayments allowed.--Subparagraph (A) 
                shall not apply to qualified higher education expenses 
                paid during a taxable year if such expenses are in 
                connection with an academic term beginning during such 
                taxable year or during the 1st 3 months of the next 
                taxable year.
          ``(3) Adjustment for certain scholarships and veterans 
        benefits.--The amount of qualified higher education expenses 
        otherwise taken into account under subsection (a) with respect 
        to the education of an individual shall be reduced (before the 
        application of subsection (b)) by the sum of the amounts 
        received with respect to such individual for the taxable year 
        as--
                  ``(A) a qualified scholarship which under section 117 
                is not includable in gross income,
                  ``(B) an educational assistance allowance under 
                chapter 30, 31, 32, 34, or 35 of title 38, United 
                States Code, or
                  ``(C) a payment (other than a gift, bequest, devise, 
                or inheritance within the meaning of section 102(a)) 
                for educational expenses, or attributable to enrollment 
                at an eligible educational institution, which is exempt 
                from income taxation by any law of the United States.
          ``(4) No deduction for married individuals filing separate 
        returns.--If the taxpayer is a married individual (within the 
        meaning of section 7703), this section shall apply only if the 
        taxpayer and the taxpayer's spouse file a joint return for the 
        taxable year. The preceeding sentence shall not apply if the 
        taxpayer lives apart from his spouse at all times during the 
        taxable year.
          ``(5) Nonresident aliens.--If the taxpayer is a nonresident 
        alien individual for any portion of the taxable year, this 
        section shall apply only if such individual is treated as a 
        resident alien of the United States for purposes of this 
        chapter by reason of an election under subsection (g) or (h) of 
        section 6013.
          ``(6) Regulations.--The Secretary may prescribe such 
        regulations as may be necessary or appropriate to carry out 
        this section, including regulations requiring recordkeeping and 
        information reporting.''
  (b) Deduction Allowed in Computing Adjusted Gross Income.--Section 
62(a) of such Code is amended by inserting after paragraph (15) the 
following new paragraph:
          ``(16) Higher education tuition and fees.--The deduction 
        allowed by section 220.''
  (c) Conforming Amendment.--The table of sections for part VII of 
subchapter B of chapter 1 of such Code is amended by striking the item 
relating to section 220 and inserting:

                              ``Sec. 220. Higher education tuition and 
                                        fees.
                              ``Sec. 221. Cross reference.''
  (d) Effective Date.--The amendments made by this section shall apply 
to payments made after December 31, 1995.

SEC. 102. DEDUCTION FOR INTEREST ON LOANS FOR HIGHER EDUCATION.

  (a) In General.--Paragraph (2) of section 163(h) of the Internal 
Revenue Code of 1986 (defining personal interest) is amended by 
striking ``and'' at the end of subparagraph (D), by redesignating 
subparagraph (E) as subparagraph (F), and by inserting after 
subparagraph (D) the following new subparagraph:
                  ``(E) any interest on a qualified higher education 
                loan, and''.
  (b) Qualified Higher Education Loan Defined.--Paragraph (5) of 
section 163(h) of such Code (relating to phase-in of limitations) is 
amended to read as follows:
          ``(5) Qualified higher education loan.--For purposes of this 
        subsection--
                  ``(A) In general.--The term `qualified higher 
                education loan' means any loan incurred by the taxpayer 
                under a State or Federal student loan program to pay 
                qualified higher education expenses (as defined in 
                section 220(c))--
                          ``(i) which are paid or incurred within a 
                        reasonable period of time before or after the 
                        indebtedness is incurred, and
                          ``(ii) which are attributable to education 
                        furnished during a period during which the 
                        recipient was an eligible student (as defined 
                        in such section).
                Such term includes indebtedness used to refinance 
                indebtedness which qualifies as a qualified higher 
                education loan.
                  ``(B) Reduction of benefit for higher income 
                taxpayers.--
                          ``(i) In general.--The amount of interest 
                        which would (but for this subparagraph) be 
                        taken into account under paragraph (2)(E) for 
                        the taxable year shall be reduced (but not 
                        below zero) by the amount which bears the same 
                        ratio to the amount of such interest as--
                                  ``(I) the excess of the taxpayer's 
                                modified adjusted gross income for such 
                                taxable year over $50,000 ($75,000 in 
                                the case of a joint return), bears to
                                  ``(II) $10,000.
                          ``(ii) Modified adjusted gross income.--For 
                        purposes of clause (i), the term `modified 
                        adjusted gross income' means the adjusted gross 
                        income of the taxpayer for the taxable year 
                        determined--
                                  ``(I) without regard to paragraph 
                                (2)(E) and sections 911, 931, and 933, 
                                and
                                  ``(II) after the application of 
                                sections 86, 135, 219, 220, and 469.
                        For purposes of sections 86, 135, 219, 220, and 
                        469, adjusted gross income shall be determined 
                        without regard to the deduction allowed by 
                        reason of paragraph (2)(E).
                  ``(C) Coordination with limitation on home equity 
                indebtedness.--Any qualified higher education loan 
                shall not be taken into account for purposes of 
                applying the limitation of paragraph (3)(C)(ii).
                  ``(D) Coordination with savings bond exclusion.--The 
                amount of qualified higher education expenses for any 
                taxable year otherwise taken into account under 
                subparagraph (A) shall be reduced by any amount 
                excludable from gross income under section 135 for such 
                taxable year.
                  ``(E) Other rules to apply.--Rules similar to the 
                rules of subparagraphs (B) and (C) of paragraph (1), 
                and paragraphs (3), (4), and (5), of section 220(d), 
                shall apply for purposes of this section.''
  (c) Deduction Allowed in Computing Adjusted Gross Income.--Section 
62(a) of such Code is amended by inserting after paragraph (16) the 
following new paragraph:
          ``(17) Interest on loans for higher education.--The deduction 
        allowed by section 163 to the extent attributable to any 
        qualified higher education loan (as defined in section 
        163(h)(5)).''
  (d) Effective Date.--The amendments made by this section shall apply 
to amounts paid or accrued after December 31, 1995.

SEC. 103. EXPANSION OF EDUCATION SAVING BOND PROGRAM.

  (a) Higher Yield on Guaranteed Education Plan Bonds.--Subsection (b) 
of section 3101 of title 31, United States Code, is amended by adding 
at the end the following new paragraph:
          ``(3)(A) The Secretary shall issue savings bonds which are 
        designated as Guaranteed Education Plan Bonds.
          ``(B)(i) Except as provided in clause (ii) or by the 
        Secretary, Guaranteed Education Plan Bonds shall have the same 
        terms and conditions as other savings bonds.
          ``(ii) Guaranteed Education Plan Bonds, if redeemed under 
        circumstances such that the Secretary is reasonably certain 
        that the redemption proceeds will be used to pay the qualified 
        higher education expenses (as defined in section 135 of the 
        Internal Revenue Code of 1986) of the individual holding the 
        bond, shall have an investment yield which is materially 
        greater than the investment yield when not so used.''
  (b) Reduction of Age Limit on Individual To Whom Bond Issued.--
Subparagraph (B) of section 135(b)(1) is amended by striking ``age 24'' 
and inserting ``age 21''.
  (c) Taxpayer Need Not Be Purchaser of Bond.--Nothing in section 135 
of the Internal Revenue Code of 1986 shall be construed to require 
that, in order for a savings bond to be a qualified United States 
savings bond under such section, the purchaser of the bond must be the 
individual to whom the bond is issued.
  (d) Limitation on Inflation Adjustment.--Subparagraph (B) of section 
135(b)(2) is amended by adding at the end the following new flush 
sentence:
                ``In no event shall be adjustment under this 
                subparagraph increase the $40,000 amount to more than 
                $50,000 or the $60,000 amount to more than $70,000.''
  (e) Effective Date.--
          (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to bonds issued 
        after the date of the enactment of this Act.
          (2) Subsection (d).--The amendment made by subsection (d) 
        shall apply to taxable years beginning after December 31, 1995.
  (e) Authorization of Appropriations.--There are authorized to be 
appropriated for the administrative expenses of the Department of the 
Treasury to carry out the amendment made by subsection (a)--
          (1) $650,000 for the fiscal year beginning after the date of 
        the enactment of this Act, and
          (2) $11,900,000 for each following fiscal year.

SEC. 104. DEDUCTION FOR IRA CONTRIBUTIONS AVAILABLE TO ALL MIDDLE-
                    INCOME TAXPAYERS.

  (a) In General.--Subparagraph (B) of section 219(g)(3) of the 
Internal Revenue Code of 1986 is amended--
          (1) by striking ``$40,000'' in clause (i) and inserting 
        ``$75,000'', and
          (2) by striking ``$25,000'' in clause (ii) and inserting 
        ``$50,000''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
to contributions for taxable years beginning after December 31, 1995.

SEC. 105. DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT PLANS MAY BE USED 
                    WITHOUT PENALTY TO PAY HIGHER EDUCATION EXPENSES.

  (a) In General.--Paragraph (2) of section 72(t) of the Internal 
Revenue Code of 1986 (relating to exceptions to 10-percent additional 
tax on early distributions from qualified retirement plans) is amended 
by adding at the end thereof the following new subparagraph:
                  ``(D) Distributions from individual retirement plans 
                for higher educational expenses.--Distributions to an 
                individual from an individual retirement plan to the 
                extent such distributions during the taxable year do 
                not exceed the amount allowed as a deduction under 
                section 220 to the taxpayer for such taxable year.''
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
to distributions after December 31, 1995.

SEC. 106. SPOUSAL IRA COMPUTED ON BASIS OF COMPENSATION OF BOTH 
                    SPOUSES.

  (a) In General.--Subsection (c) of section 219 of the Internal 
Revenue Code of 1986 (relating to special rules for certain married 
individuals) is amended to read as follows:
  ``(c) Special Rules for Certain Married Individuals.--
          ``(1) In general.--In the case of an individual to whom this 
        paragraph applies for the taxable year, the limitation of 
        subsection (b)(1) shall be equal to the lesser of--
                  ``(A) $2,000, or
                  ``(B) the sum of--
                          ``(i) the compensation includible in such 
                        individual's gross income for the taxable year, 
                        plus
                          ``(ii) the compensation includible in the 
                        gross income of such individual's spouse for 
                        the taxable year reduced by the amount 
                        allowable as a deduction under subsection (a) 
                        to such spouse for such taxable year.
          ``(2) Individuals to whom paragraph (1) applies.--Paragraph 
        (1) shall apply to any individual if--
                  ``(A) such individual files a joint return for the 
                taxable year, and
                  ``(B) the amount of compensation (if any) includible 
                in such individual's gross income for the taxable year 
                is less than the compensation includible in the gross 
                income of such individual's spouse for the taxable 
                year.
          ``(3) Phasein of benefit.--The amount determined under 
        paragraph (1)(B)(ii) for any taxable year beginning in a 
        calendar year shall not exceed the sum of--
                  ``(A) $250, plus
                  ``(B) the product of $250 and the number of calendar 
                years which such calendar year is after 1996.''
  (b) Technical Amendment.--Paragraph (2) of section 219(f) of such 
Code (relating to other definitions and special rules) is amended by 
striking ``subsections (b) and (c)'' and inserting ``subsection (b)''.
  (c) Effective Date.--The amendments made by this section shall apply 
to contributions for taxable years beginning after December 31, 1995.

    TITLE II--NONDEDUCTIBLE TAX-FREE INDIVIDUAL RETIREMENT ACCOUNTS

SEC. 201. ESTABLISHMENT OF NONDEDUCTIBLE TAX-FREE INDIVIDUAL RETIREMENT 
                    ACCOUNTS.

  (a) In General.--Subpart A of part I of subchapter D of chapter 1 of 
the Internal Revenue Code of 1986 (relating to pension, profit-sharing, 
stock bonus plans, etc.) is amended by inserting after section 408 the 
following new section:

``SEC. 408A. SPECIAL INDIVIDUAL RETIREMENT ACCOUNTS.

  ``(a) General Rule.--Except as provided in this chapter, a special 
individual retirement account shall be treated for purposes of this 
title in the same manner as an individual retirement plan.
  ``(b) Special Individual Retirement Account.--For purposes of this 
title, the term `special individual retirement account' means an 
individual retirement plan which is designated at the time of 
establishment of the plan as a special individual retirement account.
  ``(c) Treatment of Contributions.--
          ``(1) No deduction allowed.--No deduction shall be allowed 
        under section 219 for a contribution to a special individual 
        retirement account.
          ``(2) Contribution limit.--The aggregate amount of 
        contributions for any taxable year to all special individual 
        retirement accounts maintained for the benefit of an individual 
        shall not exceed the excess (if any) of--
                  ``(A) the maximum amount allowable as a deduction 
                under section 219 with respect to such individual for 
                such taxable year, over
                  ``(B) the amount so allowed.
          ``(3) Special rules for qualified transfers.--
                  ``(A) In general.--No rollover contribution may be 
                made to a special individual retirement account unless 
                it is a qualified transfer.
                  ``(B) Limit not to apply.--The limitation under 
                paragraph (2) shall not apply to a qualified transfer 
                to a special individual retirement account.
  ``(d) Tax Treatment of Distributions.--
          ``(1) In general.--Except as provided in this subsection, any 
        amount paid or distributed out of a special individual 
        retirement account shall not be included in the gross income of 
        the distributee.
          ``(2) Exception for earnings on contributions held less than 
        5 years.--
                  ``(A) In general.--Any amount distributed out of a 
                special individual retirement account which consists of 
                earnings allocable to contributions made to the account 
                during the 5-year period ending on the day before such 
                distribution shall be included in the gross income of 
                the distributee for the taxable year in which the 
                distribution occurs.
                  ``(B) Ordering rule.--
                          ``(i) First-in, first-out rule.--
                        Distributions from a special individual 
                        retirement account shall be treated as having 
                        been made--
                                  ``(I) first from the earliest 
                                contribution (and earnings allocable 
                                thereto) remaining in the account at 
                                the time of the distribution, and
                                  ``(II) then from other contributions 
                                (and earnings allocable thereto) in the 
                                order in which made.
                          ``(ii) Allocations between contributions and 
                        earnings.--Any portion of a distribution 
                        allocated to a contribution (and earnings 
                        allocable thereto) shall be treated as 
                        allocated first to the earnings and then to the 
                        contribution.
                          ``(iii) Allocation of earnings.--Earnings 
                        shall be allocated to a contribution in such 
                        manner as the Secretary may by regulations 
                        prescribe.
                          ``(iv) Contributions in same year.--Except as 
                        provided in regulations, all contributions made 
                        during the same taxable year may be treated as 
                        1 contribution for purposes of this 
                        subparagraph.
                  ``(C) Cross reference.--

                  ``For additional tax for early withdrawal, see 
section 72(t).
          ``(3) Qualified transfer.--
                  ``(A) In general.--Paragraph (2) shall not apply to 
                any distribution which is transferred in a qualified 
                transfer to another special individual retirement 
                account.
                  ``(B) Contribution period.--For purposes of paragraph 
                (2), the special individual retirement account to which 
                any contributions are transferred shall be treated as 
                having held such contributions during any period such 
                contributions were held (or are treated as held under 
                this subparagraph) by the special individual retirement 
                account from which transferred.
          ``(4) Special rules relating to certain transfers.--
                  ``(A) In general.--Notwithstanding any other 
                provision of law, in the case of a qualified transfer 
                to a special individual retirement account from an 
                individual retirement plan which is not a special 
                individual retirement account--
                          ``(i) there shall be included in gross income 
                        any amount which, but for the qualified 
                        transfer, would be includible in gross income, 
                        but
                          ``(ii) section 72(t) shall not apply to such 
                        amount.
                  ``(B) Time for inclusion.--In the case of any 
                qualified transfer which occurs before January 1, 1997, 
                any amount includible in gross income under 
                subparagraph (A) with respect to such contribution 
                shall be includible ratably over the 4-taxable year 
                period beginning in the taxable year in which the 
                amount was paid or distributed out of the individual 
                retirement plan.
  ``(e) Qualified Transfer.--For purposes of this section--
          ``(1) In general.--The term `qualified transfer' means a 
        transfer to a special individual retirement account from 
        another such account or from an individual retirement plan but 
        only if such transfer meets the requirements of section 
        408(d)(3).
          ``(2) Limitation.--A transfer otherwise described in 
        paragraph (1) shall not be treated as a qualified transfer if 
        the taxpayer's adjusted gross income for the taxable year of 
        the transfer exceeds the sum of--
                  ``(A) the applicable dollar amount, plus
                  ``(B) the dollar amount applicable for the taxable 
                year under section 219(g)(2)(A)(ii).
        This paragraph shall not apply to a transfer from a special 
        individual retirement account to another special individual 
        retirement account.
          ``(3) Definitions.--For purposes of this subsection, the 
        terms `adjusted gross income' and `applicable dollar amount' 
        have the meanings given such terms by section 219(g)(3), except 
        subparagraph (A)(ii) thereof shall be applied without regard to 
        the phrase `or the deduction allowable under this section'.''
  (b) Early Withdrawal Penalty.--Section 72(t) of such Code is amended 
by adding at the end the following new paragraph:
          ``(6) Rules relating to special individual retirement 
        accounts.--In the case of a special individual retirement 
        account under section 408A--
                  ``(A) this subsection shall only apply to 
                distributions out of such account which consist of 
                earnings allocable to contributions made to the account 
                during the 5-year period ending on the day before such 
                distribution, and
                  ``(B) paragraph (2)(A)(i) shall not apply to any 
                distribution described in subparagraph (A).''
  (c) Excess Contributions.--Section 4973(b) of such Code is amended by 
adding at the end the following new sentence: ``For purposes of 
paragraphs (1)(B) and (2)(C), the amount allowable as a deduction under 
section 219 shall be computed without regard to section 408A.''
  (d) Conforming Amendment.--The table of sections for subpart A of 
part I of subchapter D of chapter 1 of such Code is amended by 
inserting after the item relating to section 408 the following new 
item:

                              ``Sec. 408A. Special individual 
                                        retirement accounts.''
  (e) Effective Date.--The amendments made by this section shall apply 
to taxable years beginning after December 31, 1995.

          TITLE III--TAX BENEFITS CONTINGENT ON FEDERAL BUDGET
SEC. 301. EFFECTIVE DATES OF TAX BENEFITS DELAYED UNTIL FEDERAL BUDGET 
                    PROJECTED TO BE IN BALANCE.

  (a) In General.--Notwithstanding any provision of title I or II of 
this Act and any amendment made by such titles, except as otherwise 
provided in this section--
          (1) any reference in this such titles (or in any amendment 
        made by such titles) to 1995 shall be treated as a reference to 
        the calendar year ending in the first successful deficit 
        reduction year, and
          (2) any reference in such titles (or in any amendment made by 
        such titles) to any later calendar year shall be treated as a 
        reference to the calendar year which is the same number of 
        years after such first calendar year as such later year is 
        after 1995.
  (b) First Successful Deficit Reduction Year.--For purposes of this 
section and section 302--
          (1) In general.--The term ``first successful deficit 
        reduction year'' means the first fiscal year beginning after 
        the date of the enactment of this Act with respect to which 
        there is an OMB certification before the beginning of such 
        fiscal year that the budget of the United States will be in 
        balance by fiscal year 2002 based upon estimates of enacted 
        legislation, including the amendments made by this Act.
          (2) OMB certification.--The term ``OMB certification'' means 
        a written certification by the Director of the Office of 
        Management and Budget to the President and the Congress.
  (c) Certification During 1995.--Subsection (a) shall not apply if 
there is an OMB certification made during 1995 that the budget of the 
United States will be in balance by fiscal year 2002 based upon 
estimates of enacted legislation, including the amendments made by this 
Act.

SEC. 302. TERMINATION OF TAX BENEFITS IF FEDERAL BUDGET DEFICIT 
                    REDUCTION TARGETS ARE NOT MET.

  (a) No Credits, Deductions, Exclusions, Preferential Rate of Tax, 
Etc.--No tax benefit provided by any provision of the Internal Revenue 
Code of 1986 added by title I or II of this Act shall apply to any 
taxable year beginning after the calendar year in which the first 
failed deficit reduction year ends.
  (b) First Failed Deficit Reduction Year.--For purposes of this 
section, the term ``first failed deficit reduction year'' means the 
first fiscal year (beginning after the earliest date on which any 
amendment made by title I or II takes effect) with respect to which 
there is an OMB certification during the 3-month period after the close 
of such fiscal year that the actual deficit in the budget of the United 
States for such fiscal year was greater than the deficit target for 
such fiscal year specified in the following table:

                                                     The deficit target
``In the case of fiscal year:                         (in billions) is:
  1996.........................................................    $150
  1997.........................................................     125
  1998.........................................................     100
  1999.........................................................      75
  2000.........................................................      50
  2001.........................................................      25
  2002 or thereafter...........................................      0.
TITLE IV--REVISIONS TO DISCRETIONARY SPENDING LIMITS AND BUDGET PROCESS

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Discretionary Spending Reduction and 
Control Act of 1995''.

SEC. 402. DISCRETIONARY SPENDING LIMITS.

  (a) Limits.--Section 601(a)(2) of the Congressional Budget Act of 
1974 is amended by striking subparagraphs (A), (B), (C), (D), and (F), 
by redesignating subparagraph (E) as subparagraph (A) and by striking 
``and'' at the end of that subparagraph, and by inserting after 
subparagraph (A) the following new subparagraphs:
                  ``(B) with respect to fiscal year 1996, for the 
                discretionary category: $516,478,000,000 in new budget 
                authority and $549,054,000,000 in outlays;
                  ``(C) with respect to fiscal year 1997, for the 
                discretionary category: $522,894,000,000 in new budget 
                authority and $544,051,000,000 in outlays;
                  ``(D) with respect to fiscal year 1998, for the 
                discretionary category: $528,810,000,000 in new budget 
                authority and $545,548,000,000 in outlays;
                  ``(E) with respect to fiscal year 1999, for the 
                discretionary category: $527,753,000,000 in new budget 
                authority and $544,402,000,000 in outlays; and
                  ``(F) with respect to fiscal year 2000, for the 
                discretionary category: $527,040,000,000 in new budget 
                authority and $543,357,000,000 in outlays;''.
  (b) Committee Allocations and Enforcement.--Section 602 of the 
Congressional Budget Act of 1974 is amended--
          (1) in subsection (c), by striking ``1995'' and inserting 
        ``2000'' and by striking its last sentence; and
          (2) in subsection (d), by striking ``1992 to 1995'' in the 
        side heading and inserting ``1995 to 2000'' and by striking 
        ``1992 through 1995'' and inserting ``1995 through 2000''.
  (c) Five-Year Budget Resolutions.--Section 606 of the Congressional 
Budget Act of 1974 is amended--
          (1) in subsection (a), by striking ``1992, 1993, 1994, or 
        1995'' and inserting ``1995, 1996, 1997, 1998, 1999, or 2000''; 
        and
          (2) in subsection (d)(1), by striking ``1992, 1993, 1994, and 
        1995'' and inserting ``1995, 1996, 1997, 1998, 1999, and 
        2000'', and by striking ``(i) and (ii)''.
  (d) Effective Date.--Section 607 of the Congressional Budget Act of 
1974 is amended by striking ``1991 to 1998'' and inserting ``1995 to 
2000''.
  (e) Sequestration Regarding Crime Trust Fund.--Section 251A(b)(1) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 is 
amended by striking its last sentence and inserting the following:
                  ``(E) For fiscal year 1999, $5,639,000,000.
                  ``(F) For fiscal year 2000, $6,225,000,000.

SEC. 403. GENERAL STATEMENT AND DEFINITIONS.

  (a) General Statement.--Section 250(b) of the Balanced Budget and 
Emergency Deficit Control Act of 1985 is amended by striking the first 
sentence and inserting the following: ``This part provides for the 
enforcement of deficit reduction through discretionary spending limits 
and pay-as-you-go requirements for fiscal years 1995 through 2000.''.
  (b) Definitions.--Section 250(c) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended--
          (1) by striking paragraph (4) and inserting the following:
          ``(4) The term `category' means all discretionary 
        appropriations.'';
          (2) by striking paragraph (6) and inserting the following:
          ``(6) The term `budgetary resources' means new budget 
        authority, unobligated balances, direct spending authority, and 
        obligation limitations.'';
          (3) in paragraph (9), by striking ``1992'' and inserting 
        ``1995'';
          (4) in paragraph (14), by striking ``1995'' and inserting 
        ``2000''; and
          (5) by striking paragraph (17) and by redesignating 
        paragraphs (18) through (21) as paragraphs (17) through (20), 
        respectively.

SEC. 404. ENFORCING DISCRETIONARY SPENDING LIMITS.

  Section 251 of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended--
          (1) in the side heading of subsection (a), by striking 
        ``1991-1998'' and inserting ``1995-2000'';
          (2) in the first sentence of subsection (b)(1), by striking 
        ``1992, 1993, 1994, 1995, 1996, 1997 or 1998'' and inserting 
        ``1995, 1996, 1997, 1998, 1999, or 2000'' and by striking 
        ``through 1998'' and inserting ``through 2000'';
          (3) in subsection (b)(1), by striking subparagraphs (B) and 
        (C) and by striking ``the following:'' and all that follows 
        through ``The adjustments'' and inserting ``the following: the 
        adjustments'';
          (4) in subsection (b)(2), by striking ``1991, 1992, 1993, 
        1994, 1995, 1996, 1997, or 1998'' and inserting ``1995, 1996, 
        1997, 1998, 1999, or 2000'' and by striking ``through 1998'' 
        and inserting ``through 2000'';
          (5) by striking subparagraphs (A), (B), and (C) of subsection 
        (b)(2);
          (6) in subsection (b)(2)(E), by striking clauses (i), (ii), 
        and (iii) and by striking ``(iv) if, for fiscal years 1994, 
        1995, 1996, 1997, and 1998'' and inserting ``If, for fiscal 
        years 1995, 1996, 1997, 1998, 1999, and 2000''; and
          (7) in subsection (b)(2)(F), strike everything after ``the 
        adjustment in outlays'' and insert ``for a category for a 
        fiscal year shall not exceed 0.5 percent of the adjusted 
        discretionary spending limit on outlays for that fiscal year in 
        fiscal year 1996, 1997, 1998, 1999, or 2000.''.

SEC. 405. ENFORCING PAY-AS-YOU-GO.

  Section 252 of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended--
          (1) in the side heading of subsection (a), by striking 
        ``1992-1998'' and inserting ``1995-2000'';
          (2) in subsection (d), by striking ``1998'' each place it 
        appears and inserting ``2000''; and
          (3) in subsection (e), by striking ``1991 through 1998'' and 
        inserting ``1995 through 2000'' and by striking ``through 
        1995'' and inserting ``through 2000''.

SEC. 406. REPORTS AND ORDERS.

  Section 254 of the Balanced Budget and Emergency Deficit Control Act 
of 1985 is amended--
          (1) in subsection (d)(2), by striking ``1998'' and inserting 
        ``2000''; and
          (2) in subsection (g), by striking ``1998'' each place it 
        appears and inserting ``2000''.

SEC. 407. TECHNICAL CORRECTION.

  Section 258 of the Balanced Budget and Emergency Deficit Control Act 
of 1985, entitled ``Modification of Presidential Order'', is repealed.

SEC. 408. EFFECTIVE DATE.

  (a) Expiration.--Section 275(b) of the Balanced Budget and Emergency 
Deficit Control Act of 1985 is amended by striking ``1995'' and 
inserting ``2000''.
  (b) Expiration.--Section 14002(c)(3) of the Omnibus Budget 
Reconciliation Act of 1993 (2 U.S.C. 900 note; 2 U.S.C. 665 note) is 
repealed.
SEC. 409. SAVINGS FROM PROVISIONS OF THIS TITLE REDUCING DISCRETIONARY 
                    SPENDING TO BE ADDED TO PAY-AS-YOU-GO SCORECARD.

  (a)(1) The net change in outlays for any fiscal year through fiscal 
year 2000 estimated to result from provisions of this title revising or 
extending limits on discretionary spending and spending from the 
Violent Crime Reduction Trust Fund shall be considered a change in 
direct spending for purposes of section 252 of the Balanced Budget and 
Emergency Deficit Control Act of 1985.
  (2) In applying paragraph (1), the change in outlays resulting from 
provisions of this title revising and extending the limits on 
discretionary spending set forth in section 601(a)(2) of the 
Congressional Budget Act of 1974 shall be computed as follows:
          (A) For fiscal years 1996 through 1998, by comparing the 
        outlay limit resulting from this title for each year with the 
        outlay limit for that year in effect immediately prior to 
        enactment of this Act.
          (B) For fiscal years 1999 and 2000, by comparing the outlay 
        limit resulting from this title for each year with the limit 
        for fiscal year 1998 in effect immediately prior to enactment 
        of this Act.
  (3) In applying paragraph (1), the change in outlays resulting from 
provisions of this title extending the limits on spending from the 
Violent Crime Reduction Trust Fund set forth in section 251A(b)(1) of 
the Balanced Budget and Emergency Deficit Control Act of 1985 shall be 
computed by comparing the outlay limit resulting from this title for 
each year with the level of outlays for that year referred to in the 
last 2 sentences of section 251A(b)(1) of such Act as in effect 
immediately before the enactment of this Act.
  (b) Except as provided in subsection (a), no statutory reduction in 
the discretionary spending limits shall be counted in estimates under 
section 252(d) of the Balanced Budget and Emergency Deficit Control Act 
of 1985.

SEC. 410. CLARIFICATION OF ORDER IN WHICH ADJUSTMENTS TO DISCRETIONARY 
                    SPENDING LIMITS ARE TO BE MADE.

  In the OMB final sequestration report for fiscal year 1996--
          (1) all adjustments required by section 251(b)(2) made after 
        the preview report for fiscal year 1996 shall be made to the 
        discretionary spending limits set forth in 601(a)(2) of the 
        Congressional Budget Act of 1974 as amended by section 402; and
          (2) all statutory changes in the discretionary spending 
        limits made by the Personal Responsibility Act of 1995 or by 
        the Act entitled ``An Act making emergency supplemental 
        appropriations for additional disaster assistance and making 
        rescissions for the fiscal year ending September 30, 1995, and 
        for other purposes'' shall be made to those limits.
         TITLE V--PROVISIONS RELATING TO INTERNATIONAL TAXATION
SEC. 501. REVISION OF TAX RULES ON EXPATRIATION.

  (a) In General.--Subpart A of part II of subchapter N of chapter 1 of 
the Internal Revenue Code of 1986 is amended by inserting after section 
877 the following new section:

``SEC. 877A. TAX RESPONSIBILITIES OF EXPATRIATION.

  ``(a) General Rules.--For purposes of this subtitle--
          ``(1) Citizens.--If any United States citizen relinquishes 
        his citizenship during a taxable year, all property held by 
        such citizen at the time immediately before such relinquishment 
        shall be treated as sold at such time for its fair market value 
        and any gain or loss shall be taken into account for such 
        taxable year.
          ``(2) Certain residents.--If any long-term resident of the 
        United States ceases to be subject to tax as a resident of the 
        United States for any portion of any taxable year, all property 
        held by such resident at the time of such cessation shall be 
        treated as sold at such time for its fair market value and any 
        gain or loss shall be taken into account for the taxable year 
        which includes the date of such cessation.
  ``(b) Exclusion for Certain Gain.--The amount which would (but for 
this subsection) be includible in the gross income of any taxpayer by 
reason of subsection (a) shall be reduced (but not below zero) by 
$600,000.
  ``(c) Property Treated as Held.--For purposes of this section, except 
as otherwise provided by the Secretary, an individual shall be treated 
as holding--
          ``(1) all property which would be includible in his gross 
        estate under chapter 11 were such individual to die at the time 
        the property is treated as sold,
          ``(2) any other interest in a trust which the individual is 
        treated as holding under the rules of section 679(e) 
        (determined by treating such section as applying to foreign and 
        domestic trusts), and
          ``(3) any other interest in property specified by the 
        Secretary as necessary or appropriate to carry out the purposes 
        of this section.
  ``(d) Exceptions.--The following property shall not be treated as 
sold for purposes of this section:
          ``(1) United states real property interests.--Any United 
        States real property interest (as defined in section 
        897(c)(1)), other than stock of a United States real property 
        holding corporation which does not, on the date the individual 
        relinquishes his citizenship or ceases to be subject to tax as 
        a resident, meet the requirements of section 897(c)(2).
          ``(2) Interest in certain retirement plans.--
                  ``(A) In general.--Any interest in a qualified 
                retirement plan (as defined in section 4974(d)), other 
                than any interest attributable to contributions which 
                are in excess of any limitation or which violate any 
                condition for tax-favored treatment.
                  ``(B) Foreign pension plans.--
                          ``(i) In general.--Under regulations 
                        prescribed by the Secretary, interests in 
                        foreign pension plans or similar retirement 
                        arrangements or programs.
                          ``(ii) Limitation.--The value of property 
                        which is treated as not sold by reason of this 
                        subparagraph shall not exceed $500,000.
  ``(e) Definitions.--For purposes of this section--
          ``(1) Relinquishment of citizenship.--A citizen shall be 
        treated as relinquishing his United States citizenship on the 
        date the United States Department of State issues to the 
        individual a certificate of loss of nationality or on the date 
        a court of the United States cancels a naturalized citizen's 
        certificate of naturalization.
          ``(2) Long-term resident.--
                  ``(A) In general.--The term `long-term resident' 
                means any individual (other than a citizen of the 
                United States) who is a lawful permanent resident of 
                the United States and, as a result of such status, has 
                been subject to tax as a resident in at least 10 
                taxable years during the period of 15 taxable years 
                ending with the taxable year during which the sale 
                under subsection (a) is treated as occurring.
                  ``(B) Special rule.--For purposes of subparagraph 
                (A), there shall not be taken into account--
                          ``(i) any taxable year during which any prior 
                        sale is treated under subsection (a) as 
                        occurring, or
                          ``(ii) any taxable year prior to the taxable 
                        year referred to in clause (i).
  ``(f) Termination of Deferrals, Etc.--On the date any property held 
by an individual is treated as sold under subsection (a)--
          ``(1) any period deferring recognition of income or gain 
        shall terminate, and
          ``(2) any extension of time for payment of tax shall cease to 
        apply and the unpaid portion of such tax shall be due and 
        payable.
  ``(g) Election by Expatriating Residents.--Solely for purposes of 
determining gain under subsection (a)--
          ``(1) In general.--At the election of a resident not a 
        citizen of the United States, property--
                  ``(A) which was held by such resident on the date the 
                individual first became a resident of the United States 
                during the period of long-term residency to which the 
                treatment under subsection (a) relates, and
                  ``(B) which is treated as sold under subsection (a),
        shall be treated as having a basis on such date of not less 
        than the fair market value of such property on such date.
          ``(2) Election.--Such an election shall apply to all property 
        described in paragraph (1), and, once made, shall be 
        irrevocable.
  ``(h) Deferral of Tax on Closely Held Business Interests.--The 
District Director may enter into an agreement with any individual which 
permits such individual to defer payment for not more than 5 years of 
any tax imposed by subsection (a) by reason of holding any interest in 
a closely held business (as defined in section 6166(b)) other than a 
United States real property interest described in subsection (d)(1).
  ``(i) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary or appropriate to carry out the purposes of this 
section.
  ``(j) Cross Reference.--

                  ``For termination of United States citizenship for 
tax purposes, see section 7701(a)(47).''
  (b) Definition of Termination of United States Citizenship.--Section 
7701(a) of such Code is amended by adding at the end the following new 
paragraph:
          ``(47) Termination of united states citizenship.--An 
        individual shall not cease to be treated as a United States 
        citizen before the date on which the individual's citizenship 
        is treated as relinquished under section 877A(e)(1).''
  (c) Conforming Amendments.--
          (1) Section 877 of such Code is amended by adding at the end 
        the following new subsection:
  ``(f) Termination.--This section shall not apply to any individual 
who is subject to the provisions of section 877A.''
          (2) Paragraph (10) of section 7701(b) of such Code is amended 
        by adding at the end the following new sentence: ``This 
        paragraph shall not apply to any individual who is subject to 
        the provisions of section 877A.''
  (d) Clerical Amendment.--The table of sections for subpart A of part 
II of subchapter N of chapter 1 of such Code is amended by inserting 
after the item relating to section 877 the following new item:

                              ``Sec. 877A. Tax responsibilities of 
                                        expatriation.''
  (e) Effective Date.--The amendments made by this section shall apply 
to--
          (1) United States citizens who relinquish (within the meaning 
        of section 877A(e)(1) of the Internal Revenue Code of 1986, as 
        added by this section) United States citizenship on or after 
        February 6, 1995, and
          (2) long-term residents (as defined in such section) who 
        cease to be subject to tax as residents of the United States on 
        or after such date.

SEC. 502. IMPROVED INFORMATION REPORTING ON FOREIGN TRUSTS.

  (a) In General.--Section 6048 of the Internal Revenue Code of 1986 
(relating to returns as to certain foreign trusts) is amended to read 
as follows:
``SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN FOREIGN TRUSTS.

  ``(a) Notice of Certain Events.--
          ``(1) General rule.--On or before the 90th day (or such later 
        day as the Secretary may prescribe) after any reportable event, 
        the responsible party shall--
                  ``(A) notify each trustee of the trust of the 
                requirements of subsection (b), and
                  ``(B) provide written notice of such event to the 
                Secretary in accordance with paragraph (2).
          ``(2) Contents of notice.--The notice required by paragraph 
        (1)(B) shall contain such information as the Secretary may 
        prescribe, including--
                  ``(A) the amount of money or other property (if any) 
                transferred to the trust in connection with the 
                reportable event,
                  ``(B) the identity of the trust and of each trustee 
                and beneficiary (or class of beneficiaries) of the 
                trust, and
                  ``(C) a statement that each trustee of the trust has 
                been informed of the requirements of subsection (b).
          ``(3) Reportable event.--For purposes of this subsection, the 
        term `reportable event' means--
                  ``(A) the creation of any foreign trust by a United 
                States person,
                  ``(B) the transfer of any money or property to a 
                foreign trust by a United States person, including a 
                transfer by reason of death,
                  ``(C) a domestic trust becoming a foreign trust,
                  ``(D) the death of a citizen or resident of the 
                United States who is a grantor of a foreign trust, and
                  ``(E) the residency starting date (within the meaning 
                of section 7701(b)(2)(A)) of a grantor of a foreign 
                trust subject to tax under section 679(a)(3).
        Subparagraphs (A) and (B) shall not apply with respect to a 
        trust described in section 404(a)(4) or 404A.
          ``(4) Responsible party.--For purposes of this subsection, 
        the term `responsible party' means--
                  ``(A) the grantor in the case of a reportable event 
                described in subparagraph (A) or (E) of paragraph (3),
                  ``(B) the transferor in the case of a reportable 
                event described in paragraph (3)(B) other than a 
                transfer by reason of death,
                  ``(C) the trustee of the domestic trust in the case 
                of a reportable event described in paragraph (3)(C), 
                and
                  ``(D) the executor of the decedent's estate in the 
                case of a transfer by reason of death.
  ``(b) Trust Reporting Requirements.--If a foreign trust, at any time 
during a taxable year of such trust--
          ``(1) has a grantor who is a United States person and--
                  ``(A) such grantor is treated as the owner of any 
                portion of such trust under the rules of subpart E of 
                part I of subchapter J of chapter 1, or
                  ``(B) any portion of such trust would be included in 
                the gross estate of such grantor if the grantor were to 
                die at such time, or
          ``(2) directly or indirectly distributes, credits, or 
        allocates money or property to any United States person 
        (whether or not the trust has a grantor described in paragraph 
        (1)),
then such trust shall meet the requirements of subsection (c) (relating 
to trust information and agent) and subsection (d) (relating to annual 
return).
  ``(c) Contents of Section 6048 Statement.--
          ``(1) In general.--The requirements of this subsection are 
        met if the trust files with the Secretary a statement which 
        contains such information as the Secretary may prescribe and 
        which--
                  ``(A) identifies a United States person who is the 
                trust's limited agent to provide the Secretary with 
                such information that reasonably should be available to 
                the trust for purposes of applying sections 7602, 7603, 
                and 7604 with respect to any request by the Secretary 
                to examine trust records or produce testimony related 
                to any transaction by the trust or with respect to any 
                summons by the Secretary for such records or testimony, 
                and
                  ``(B) contains an agreement to comply with the 
                requirements of subsection (d).
          ``(2) Special rule.--A foreign trust which appoints an agent 
        described in paragraph (1)(A) shall not be considered to have 
        an office or a permanent establishment in the United States 
        solely because of the activities of such agent pursuant to this 
        section. For purposes of this section, the appearance of 
        persons or production of records by reason of the creation of 
        the agency shall not subject such persons or records to legal 
        process for any purpose other than determining the correct 
        treatment under this title of the activities and operations of 
        the trust.
  ``(d) Annual Returns and Statements.--The requirements of this 
subsection are met if--
          ``(1) the trust makes a return for the taxable year which 
        sets forth a full and complete accounting of all trust 
        activities and operations for the taxable year, and contains 
        such other information as the Secretary may prescribe; and
          ``(2) the trust furnishes such information as the Secretary 
        may prescribe to each United States person--
                  ``(A) who is treated as the owner of any portion of 
                such trust under the rules of subpart E of part I of 
                subchapter J of chapter 1,
                  ``(B) to whom any item with respect to the taxable 
                year is credited or allocated, or
                  ``(C) who receives a distribution from such trust 
                with respect to the taxable year.
  ``(e) Time and Manner of Filing Information.--Any notice, statement, 
or return required under this section shall be made at such time and in 
such manner as the Secretary shall prescribe.
  ``(f) Modification of Return Requirements.--The Secretary is 
authorized to suspend or modify any requirement of this section if the 
Secretary determines that the United States has no significant tax 
interest in obtaining the required information.''
  (b) Penalties.--Section 6677 of such Code (relating to failure to 
file information returns with respect to certain foreign trusts) is 
amended to read as follows:

``SEC. 6677. FAILURE TO FILE INFORMATION WITH RESPECT TO CERTAIN 
                    FOREIGN TRUSTS.

  ``(a) Failure To Report Certain Events.--
          ``(1) In general.--In the case of a reportable event 
        described in any subparagraph of section 6048(a)(3) for which a 
        responsible party does not file a written notice meeting the 
        requirements of section 6048(a)(2) within the time specified in 
        section 6048(a)(1), the responsible party shall pay a penalty 
        of $10,000. If any failure described in the preceding sentence 
        continues for more than 90 days after the day on which the 
        Secretary mails notice of such failure to the responsible 
        party, such party shall pay a penalty (in addition to the 
        $10,000 amount) of $10,000 for each 30-day period (or fraction 
        thereof) during which such failure continues after the 
        expiration of such 90-day period.
          ``(2) 35-percent penalty.--In the case of a reportable event 
        described in subparagraph (A), (B), or (C) of section 
        6048(a)(3) (other than a transfer by reason of death), the 
        aggregate amount of the penalties under paragraph (1) shall not 
        be less than an amount equal to 35 percent of the gross value 
        of the property involved in such event (determined as of the 
        date of the event).
          ``(3) Responsible party.--For purposes of this subsection, 
        the term `responsible party' has the meaning given to such term 
        by section 6048(a)(4).
  ``(b) Failure To Make Certain Statements and Returns.--
          ``(1) In general.--In the case of any failure to meet the 
        requirements of section 6048(b), the appropriate tax treatment 
        of any trust transactions or operations shall be determined by 
        the Secretary in the Secretary's sole discretion from the 
        Secretary's own knowledge or from such information as the 
        Secretary may obtain through testimony or otherwise.
          ``(2) Monetary penalty.--In the case of any failure to meet 
        the requirements of section 6048(b) with respect to a trust 
        described in such section by reason of paragraph (1) thereof, 
        the grantor described in such paragraph (1) shall pay a penalty 
        of $10,000 for each taxable year with respect to which the 
        foreign trust fails to meet such requirements. If any failure 
        described in the preceding sentence continues for more than 90 
        days after the day on which the Secretary mails notice of such 
        failure to such grantor, such grantor shall pay a penalty (in 
        addition to any other penalty) of $10,000 for each 30-day 
        period (or fraction thereof) during which such failure 
        continues after the expiration of such 90-day period.
  ``(c) Reasonable Cause Exception.--No penalty shall be imposed by 
this section on any failure which is shown to be due to reasonable 
cause and not due to willful neglect. The fact that a foreign 
jurisdiction would impose a civil or criminal penalty on the taxpayer 
(or any other person) for disclosing the requested documentation is not 
reasonable cause.
  ``(d) Deficiency Procedures Not To Apply.--Subchapter B of chapter 63 
(relating to deficiency procedures for income, estate, gift, and 
certain excise taxes) shall not apply in respect of the assessment or 
collection of any penalty imposed by this section.''
  (c) Clerical Amendments.--
          (1) The table of sections for subpart B of part III of 
        subchapter A of chapter 61 of such Code is amended by striking 
        the item relating to section 6048 and inserting the following 
        new item:

                              ``Sec. 6048. Information with respect to 
                                        certain foreign trusts.''
          (2) The table of sections for part I of subchapter B of 
        chapter 68 of such Code is amended by striking the item 
        relating to section 6677 and inserting the following new item:

                              ``Sec. 6677. Failure to file information 
                                        with respect to certain foreign 
                                        trusts.''
  (d) Effective Dates.--
          (1) In general.--The amendments made by this section shall 
        apply--
                  (A) to reportable events occurring on or after 
                February 6, 1995, and
                  (B) to the extent such amendments require reporting 
                for any taxable year under section 6048(b) of the 
                Internal Revenue Code of 1986 (as added by this 
                section), to taxable years beginning after the date of 
                the enactment of this Act.
          (2) Notices.--For purposes of section 6048(a) of such Code, 
        the 90th day referred to therein shall in no event be treated 
        as being earlier than the 90th day after the date of the 
        enactment of this Act.
SEC. 503. MODIFICATION OF RULES RELATING TO FOREIGN TRUSTS HAVING ONE 
                    OR MORE UNITED STATES BENEFICIARIES.

  (a) In General.--Section 679 of the Internal Revenue Code of 1986 
(relating to foreign trusts having one or more United States 
beneficiaries) is amended to read as follows:
``SEC. 679. FOREIGN TRUSTS HAVING ONE OR MORE UNITED STATES 
                    BENEFICIARIES.

  ``(a) Transferor Treated as Owner.--
          ``(1) In general.--A United States person who directly or 
        indirectly transfers property to a foreign trust (other than a 
        trust described in section 404(a)(4) or section 404A) shall be 
        treated as the owner for his taxable year of the portion of 
        such trust attributable to such property if for such year there 
        is a United States beneficiary of such trust.
          ``(2) Exception.--
                  ``(A) In general.--Paragraph (1) shall not apply to 
                any sale or exchange of property to a trust if--
                          ``(i) the trust pays fair market value for 
                        such property, and
                          ``(ii) all of the gain to the transferor is 
                        recognized at the time of transfer.
                  ``(B) Certain obligations not taken into account.--
                For purposes of subparagraph (A), in determining 
                whether the transferor received fair market value, 
                there shall not be taken into account--
                          ``(i) any obligation of--
                                  ``(I) the trust,
                                  ``(II) any grantor or beneficiary of 
                                the trust, or
                                  ``(III) any person who is related 
                                (within the meaning of section 
                                643(i)(3)) to any grantor or 
                                beneficiary of the trust, and
                          ``(ii) except as provided in regulations, any 
                        obligation which is guaranteed by a person 
                        described in clause (i).
                  ``(C) Treatment of deemed sale election under section 
                1057.--For purposes of subparagraph (A), a transfer 
                with respect to which an election under section 1057 is 
                made shall not be treated as a sale or exchange.
          ``(3) Special rules applicable to foreign grantor who later 
        becomes a united states person.--A nonresident alien individual 
        who becomes a United States resident within 5 years after 
        directly or indirectly transferring property to a foreign trust 
        shall be treated for purposes of this section and section 6048 
        as having transferred such property, and any undistributed 
        income (including all realized and unrealized gains) 
        attributable thereto, to the foreign trust immediately after 
        becoming a United States resident. For this purpose, a 
        nonresident alien shall be treated as becoming a resident of 
        the United States on the residency starting date (within the 
        meaning of section 7701(b)(2)(A)).
  ``(b) Beneficiaries Treated as Transferors in Certain Cases.--For 
purposes of this section and section 6048, if--
          ``(1) a citizen or resident of the United States who is 
        treated as the owner of any portion of a trust under subsection 
        (a) dies,
          ``(2) property is transferred to a foreign trust by reason of 
        the death of a citizen or resident of the United States, or
          ``(3) a domestic trust to which any United States person made 
        a transfer becomes a foreign trust,
then, except as otherwise provided in regulations, the trust 
beneficiaries shall be treated as having transferred to such trust (as 
of the date of the applicable event under paragraph (1), (2), or (3)) 
their respective interests (as determined under subsection (e)) in the 
property involved.
  ``(c) Trusts Acquiring United States Beneficiaries.--If--
          ``(1) subsection (a) applies to a trust for the transferor's 
        taxable year, and
          ``(2) subsection (a) would have applied to the trust for the 
        transferor's immediately preceding taxable year but for the 
        fact that for such preceding taxable year there was no United 
        States beneficiary for any portion of the trust,
then, for purposes of this subtitle, the transferor shall be treated as 
having received as an accumulation distribution taxable under subpart D 
an amount equal to the undistributed net income (as determined under 
section 665(a) as of the close of such immediately preceding taxable 
year) attributable to the portion of the trust referred to in 
subsection (a).
  ``(d) Trusts Treated as Having a United States Beneficiary.--
          ``(1) In general.--For purposes of this section, a trust 
        shall be treated as having a United States beneficiary for the 
        taxable year unless--
                  ``(A) under the terms of the trust, no part of the 
                income or corpus of the trust may be paid or 
                accumulated during the taxable year to or for the 
                benefit of a United States person, and
                  ``(B) if the trust were terminated at any time during 
                the taxable year, no part of the income or corpus of 
                such trust could be paid to or for the benefit of a 
                United States person.
        To the extent provided by the Secretary, for purposes of this 
        subsection, the term `United States person' includes any person 
        who was a United States person at any time during the existence 
        of the trust.
          ``(2) Attribution of ownership.--For purposes of paragraph 
        (1), an amount shall be treated as paid or accumulated to or 
        for the benefit of a United States person if such amount is 
        paid to or accumulated for a foreign corporation, foreign 
        partnership, or foreign trust or estate, and--
                  ``(A) in the case of a foreign corporation, more than 
                50 percent of the total combined voting power of all 
                classes of stock of such corporation entitled to vote 
                is owned (within the meaning of section 958(a)) or is 
                considered to be owned (within the meaning of section 
                958(b)) by United States shareholders (as defined in 
                section 951(b)),
                  ``(B) in the case of a foreign partnership, a United 
                States person is a partner of such partnership, or
                  ``(C) in the case of a foreign trust or estate, such 
                trust or estate has a United States beneficiary (within 
                the meaning of paragraph (1)).
  ``(e) Determination of Beneficiaries' Interests in Trust.--
          ``(1) General rule.--For purposes of this section, a 
        beneficiary's interest in a foreign trust shall be based upon 
        all relevant facts and circumstances, including the terms of 
        the trust instrument and any letter of wishes or similar 
        document, historical patterns of trust distributions, and the 
        existence of and functions performed by a trust protector or 
        any similar advisor.
          ``(2) Special rule.--In the case of beneficiaries whose 
        interests in a trust cannot be determined under paragraph (1)--
                  ``(A) the beneficiary having the closest degree of 
                kinship to the grantor shall be treated as holding the 
                remaining interests in the trust not determined under 
                paragraph (1) to be held by any other beneficiary, and
                  ``(B) if 2 or more beneficiaries have the same degree 
                of kinship to the grantor, such remaining interests 
                shall be treated as held equally by such beneficiaries.
          ``(3) Constructive ownership.--If a beneficiary of a foreign 
        trust is a corporation, partnership, trust, or estate, the 
        shareholders, partners, or beneficiaries shall be deemed to be 
        the trust beneficiaries for purposes of this section.
          ``(4) Taxpayer return position.--A taxpayer shall clearly 
        indicate on its income tax return--
                  ``(A) the methodology used to determine that 
                taxpayer's trust interest under this section, and
                  ``(B) if the taxpayer knows (or has reason to know) 
                that any other beneficiary of such trust is using a 
                different methodology to determine such beneficiary's 
                trust interest under this section.
  ``(f) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary or appropriate to carry out the purposes of this 
section.''
  (b) Effective Date.--
          (1) In general.--Except as otherwise provided in this 
        subsection, the amendments made by
        this section shall apply to taxable years ending on or after 
February 6, 1995.
          (2) Section 679(a).--Paragraphs (2) and (3) of section 679(a) 
        of the Internal Revenue Code of 1986 (as added by this section) 
        shall apply to--
                  (A) any trust created on or after February 6, 1995, 
                and
                  (B) the portion of any trust created before such date 
                which is attributable to actual transfers of property 
                to the trust on or after such date.
          (3) Section 679(b).--
                  (A) In general.--Paragraphs (1) and (2) of section 
                679(b) of such Code (as so added) shall apply to--
                          (i) any trust created on or after the date of 
                        the enactment of this Act, and
                          (ii) the portion of any trust created before 
                        such date which is attributable to actual 
                        transfers of property to the trust on or after 
                        such date.
                  (B) Section 679(b)(3).--Section 679(b)(3) of such 
                Code (as so added) shall take effect on February 6, 
                1995, without regard to when the property was 
                transferred to the trust.
SEC. 504. FOREIGN PERSONS NOT TO BE TREATED AS OWNERS UNDER GRANTOR 
                    TRUST RULES.

  (a) In General.--So much of section 672(f) of the Internal Revenue 
Code of 1986 (relating to special rule where grantor is foreign person) 
as precedes paragraph (2) is amended to read as follows:
  ``(f) Subpart Not To Result in Foreign Ownership.--
          ``(1) In general.--Notwithstanding any other provision of 
        this subpart, this subpart shall apply only to the extent such 
        application results in an amount being included (directly or 
        through 1 or more entities) in the gross income of a citizen or 
        resident of the United States or a domestic corporation. The 
        preceding sentence shall not apply to any portion of an 
        investment trust if such trust is treated as a trust for 
        purposes of this title and the grantor of such portion is the 
        sole beneficiary of such portion.''
  (b) Credit for Certain Taxes.--Paragraph (2) of section 665(d) of 
such Code is amended by adding at the end the following new sentence: 
``Under rules or regulations prescribed by the Secretary, in the case 
of any foreign trust of which the settlor or another person would be 
treated as owner of any portion of the trust under subpart E but for 
section 672(f), the term `taxes imposed on the trust' includes the 
allocable amount of any income, war profits, and excess profits taxes 
imposed by any foreign country or possession of the United States on 
the settlor or such other person in respect of trust income.''
  (c) Distributions by Certain Foreign Trusts Through Nominees.--
          (1) Section 643 of such Code is amended by adding at the end 
        the following new subsection:
  ``(h) Distributions by Certain Foreign Trusts Through Nominees.--For 
purposes of this part, any amount paid to a United States person which 
is derived directly or indirectly from a foreign trust of which the 
payor is not the grantor shall be deemed in the year of payment to have 
been directly paid by the foreign trust to such United States person.''
          (2) Section 665 of such Code is amended by striking 
        subsection (c).
  (d) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
  (e) Transitional Rule.--If--
          (1) by reason of the amendments made by this section, any 
        person other than a United States person ceases to be treated 
        as the owner of a portion of a domestic trust, and
          (2) before January 1, 1996, such trust becomes a foreign 
        trust, or the assets of such trust are transferred to a foreign 
        trust,
no tax shall be imposed by section 1491 of the Internal Revenue Code of 
1986 by reason of such trust becoming a foreign trust or the assets of 
such trust being transferred to a foreign trust.
SEC. 505. GRATUITOUS TRANSFERS BY PARTNERSHIPS AND FOREIGN 
                    CORPORATIONS.

  (a) In General.--Subchapter C of chapter 80 of the Internal Revenue 
Code of 1986 (relating to provisions affecting more than one subtitle) 
is amended by adding at the end the following new section:
``SEC. 7874. PURPORTED GIFTS BY PARTNERSHIPS AND FOREIGN CORPORATIONS.

  ``(a) In General.--Any property (including money) that is purportedly 
a direct or indirect gift by a partnership or a foreign corporation to 
a person who is not a partner of the partnership or a shareholder of 
the corporation, respectively, may be recharacterized by the Secretary 
to prevent the avoidance of tax. The Secretary may not recharacterize 
gifts made for bona fide business or charitable purposes.
  ``(b) Statements on Recipient's Return.--A taxpayer who receives a 
purported gift subject to subsection (a) shall attach a statement to 
his income tax return for the year of receipt that identifies the 
property received and describes fully the circumstances surrounding the 
purported gift.
  ``(c) Exemption.--Subsection (a) shall not apply to purported gifts 
received by any person during any taxable year if the amount thereof is 
less than $2,500.
  ``(d) Regulations.--The Secretary may prescribe such rules as may be 
necessary or appropriate to carry out the purposes of this section.''
  (b) Clerical Amendment.--The table of sections for such subchapter C 
is amended by adding at the end the following new item:

                              ``Sec. 7874. Purported gifts by 
                                        partnerships and foreign 
                                        corporations.''
  (c) Effective Date.--The amendments made by this section shall apply 
to amounts received after the date of the enactment of this Act.
SEC. 506. INFORMATION REPORTING REGARDING LARGE FOREIGN GIFTS.

  (a) In General.--Subpart A of part III of subchapter A of chapter 61 
of the Internal Revenue Code of 1986 is amended by inserting after 
section 6039E the following new section:

``SEC. 6039F. NOTICE OF LARGE GIFTS RECEIVED FROM FOREIGN PERSONS.

  ``(a) In General.--If the value of the aggregate foreign gifts 
received by a United States person (other than an organization 
described in section 501(c) and exempt from tax under section 501(a)) 
during any taxable year exceeds $100,000, such United States person 
shall furnish (at such time and in such manner as the Secretary shall 
prescribe) such information as the Secretary may prescribe regarding 
each foreign gift received during such year.
  ``(b) Foreign Gift.--For purposes of this section, the term `foreign 
gift' means any amount received from a person other than a United 
States person which the recipient treats as a gift or bequest. Such 
term shall not include any qualified transfer (within the meaning of 
section 2503(e)(2)).
  ``(c) Penalty for Failure To File Information.--
          ``(1) In general.--If a United States person fails to furnish 
        the information required by subsection (a) with respect to any 
        foreign gift within the time prescribed therefor (including 
        extensions)--
                  ``(A) the tax consequences of the receipt of such 
                gift shall be determined by the Secretary in the 
                Secretary's sole discretion from the Secretary's own 
                knowledge or from such information as the Secretary may 
                obtain through testimony or otherwise, and
                  ``(B) such United States person shall pay (upon 
                notice and demand by the Secretary and in the same 
                manner as tax) an amount equal to 5 percent of the 
                amount of such foreign gift for each month for which 
                the failure continues (not to exceed 25 percent of such 
                amount in the aggregate).
          ``(2) Reasonable cause exception.-- Paragraph (1) shall not 
        apply to any failure to report a foreign gift if the United 
        States person shows that the failure is due to reasonable cause 
        and not due to willful neglect.
  ``(d) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out the purposes of this section.''.
  (b) Clerical Amendment.--The table of sections for such subpart is 
amended by inserting after the item relating to section 6039E the 
following new item:

                              ``Sec. 6039F. Notice of large gifts 
                                        received from foreign 
                                        persons.''
  (c) Effective Date.--The amendments made by this section shall apply 
to amounts received after the date of the enactment of this Act in 
taxable years ending after such date.
SEC. 507. MODIFICATION OF RULES RELATING TO FOREIGN TRUSTS WHICH ARE 
                    NOT GRANTOR TRUSTS.

  (a) Modification of Interest Charge on Accumulation Distributions.--
Subsection (a) of section 668 of the Internal Revenue Code of 1986 
(relating to interest charge on accumulation distributions from foreign 
trusts) is amended to read as follows:
  ``(a) General Rule.--For purposes of the tax determined under section 
667(a)--
          ``(1) Sum of interest charges for each throwback year.--The 
        interest charge (determined under paragraph (2)) with respect 
        to any distribution is the sum of the interest charges for each 
        of the throwback years to which such distribution is allocated 
        under section 666(a).
          ``(2) Interest charge for year.--Except as provided in 
        paragraph (6), the interest charge for any throwback year on 
        such year's allocable share of the partial tax computed under 
        section 667(b) with respect to any distribution shall be 
        determined for the period--
                  ``(A) beginning on the due date for the throwback 
                year, and
                  ``(B) ending on the due date for the taxable year of 
                the distribution,
        by using the rates and method applicable under section 6621 for 
        underpayments of tax for such period. For purposes of the 
        preceding sentence, the term `due date' means the date 
        prescribed by law (determined without regard to extensions) for 
        filing the return of the tax imposed by this chapter for the 
        taxable year.
          ``(3) Allocable partial tax.--For purposes of paragraph (2), 
        a throwback year's allocable share of the partial tax is an 
        amount equal to such partial tax multiplied by the fraction--
                  ``(A) the numerator of which is the amount deemed by 
                section 666(a) to be distributed on the last day of 
                such throwback year, and
                  ``(B) the denominator of which is the accumulation 
                distribution taken into account under section 666(a).
          ``(4) Throwback year.--For purposes of this subsection, the 
        term `throwback year' means any taxable year to which a 
        distribution is allocated under section 666(a).
          ``(5) Periods of nonresidence.--The period under paragraph 
        (2) shall not include any portion thereof during which the 
        beneficiary was not a citizen or resident of the United States.
          ``(6) Throwback years before 1996.--In the case of any 
        throwback year beginning before 1996--
                  ``(A) interest for the portion of the period 
                described in paragraph (2) which occurs before the 
                first taxable year beginning after 1995 shall be 
                determined by using an interest rate of 6 percent and 
                no compounding, and
                  ``(B) interest for the remaining portion of such 
                period shall be determined as if the partial tax 
                computed under section 667(b) for the throwback year 
                were increased (as of the beginning of such first 
                taxable year) by the amount of the interest determined 
                under subparagraph (A).''
  (b) Rule When Information Not Available.--Subsection (d) of section 
666 of such Code is amended by adding at the end the following: ``In 
the case of a distribution from a foreign trust to which section 
6048(b) applies, adequate records shall not be considered to be 
available for purposes of the preceding sentence unless such trust 
meets the requirements referred to in such section. If a taxpayer is 
not able to demonstrate when a trust was created, the Secretary may use 
any reasonable approximation based on available evidence.''
  (c) Abusive Transactions.--Section 643(a) of such Code is amended by 
inserting after paragraph (6) the following new paragraph:
          ``(7) Abusive transactions.--The Secretary shall prescribe 
        such regulations as may be necessary or appropriate to carry 
        out the purposes of this part, including regulations to prevent 
        avoidance of such purposes.''
  (d) Treatment of Use of Trust Property.--Section 643 of such Code 
(relating to definitions applicable to subparts A, B, C, and D) is 
amended by adding at the end the following new subsection:
  ``(i) Use of Foreign Trust Property.--
          ``(1) General rule.--For purposes of subparts B, C, and D, 
        if, during a taxable year of a foreign trust a trust 
        participant of such trust directly or indirectly uses any of 
        the trust's property, the use value for such taxable year shall 
        be treated as an amount paid to such participant (other than 
        from income for the taxable year) within the meaning of 
        sections 661(a)(2) and section 662(a)(2).
          ``(2) Exemption.--Paragraph (1) shall not apply to any trust 
        participant as to whom the aggregate use value during the 
        taxable year does not exceed $2,500.
          ``(3) Definitions and special rules.--For purposes of this 
        subsection--
                  ``(A) Use value.--Except as provided in subparagraph 
                (B), the term `use value' means the fair market value 
                of the use of property reduced by any amount paid for 
                such use by the trust participant or by any person who 
                is related to such participant.
                  ``(B) Special rule for cash and cash equivalent.--A 
                direct or indirect loan of cash, or cash equivalent, by 
                a foreign trust shall be treated as a use of trust 
                property by the borrower and the full amount of the 
                loan principal shall be the use value.
                  ``(C) Use by related party.--
                          ``(i) Use by a person who is related to a 
                        trust participant shall be treated as use by 
                        the participant.
                          ``(ii) If property is used by any person who 
                        is a related person with respect to more than 
                        one trust participant, then the property shall 
                        be treated as used by the trust participant 
                        most closely related, by blood or otherwise, to 
                        such person.
                  ``(D) Property includes cash and cash equivalents.--
                The term `property' includes cash and cash equivalents.
                  ``(E) Trust participant.--The term `trust 
                participant' means each grantor and beneficiary of the 
                trust.
                  ``(F) Related person.--A person is related to a trust 
                participant if the relationship between such persons 
                would result in a disallowance of losses under section 
                267(b) or 707(b). In applying section 267 for purposes 
                of the preceding sentence--
                          ``(i) section 267(e) shall be applied as if 
                        such person or the trust participant were a 
                        pass-thru entity,
                          ``(ii) section 267(b) shall be applied by 
                        substituting `at least 10 percent' for `more 
                        than 50 percent' each place it appears, and
                          ``(iii) in determining the family of an 
                        individual under section 267(c)(4), such 
                        section shall be treated as including the 
                        spouse (and former spouse) of such individual 
                        and of each other person who is treated under 
                        such section as being a member of the family of 
                        such individual or spouse.
                  ``(G) Subsequent transactions regarding loan 
                principal.--If any loan described in subparagraph (B) 
                is taken into account under paragraph (1), any 
                subsequent transaction between the trust and the 
                original borrower regarding the principal of the loan 
                (by way of complete or partial repayment, satisfaction, 
                cancellation, discharge, or otherwise) shall be 
                disregarded for purposes of this title.''
  (e) Effective Dates.--
          (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this section shall apply to taxable years 
        beginning after the date of the enactment of this Act.
          (2) Interest charge.--The amendment made by subsection (a) 
        shall apply to interest for throwback years beginning before, 
        on, or after the date of the enactment of this Act.
SEC. 508. RESIDENCE OF ESTATES AND TRUSTS.

  (a) Treatment as United States Person.--Paragraph (30) of section 
7701(a) of the Internal Revenue Code of 1986 is amended by striking 
subparagraph (D) and by inserting after subparagraph (C) the following:
                  ``(D) any estate or trust if--
                          ``(i) a court within the United States is 
                        able to exercise primary supervision over the 
                        administration of the estate or trust, and
                          ``(ii) in the case of a trust, one or more 
                        United States fiduciaries have the authority to 
                        control all substantial decisions of the 
                        trust.''
  (b) Conforming Amendment.--Paragraph (31) of section 7701(a) of such 
Code is amended to read as follows:
          ``(31) Foreign estate or trust.--The term `foreign estate' or 
        `foreign trust' means any estate or trust other than an estate 
        or trust described in section 7701(a)(30)(D).''
  (c) Effective Date.--The amendments made by this section shall 
apply--
          (1) to taxable years beginning after December 31, 1996, and
          (2) at the election of the trustee of a trust, to taxable 
        years beginning after the date of the enactment of this Act and 
        on or before December 31, 1996.
Such an election, once made, shall be irrevocable.

 TITLE VI--EXTENSION OF AUTHORITY OF FEDERAL COMMUNICATIONS COMMISSION 
                       TO USE COMPETITIVE BIDDING

SEC. 601. EXTENSION OF AUTHORITY.

  Section 309(j)(11) of the Communications Act of 1934 (47 U.S.C. 
309(j)(11)) is amended by striking ``September 30, 1998'' and inserting 
``September 30, 2000''.
  TITLE VII--PRIVATIZATION OF THE UNITED STATES ENRICHMENT CORPORATION

SEC. 701. SHORT TITLE AND REFERENCE.

  (a) Short Title.--This title may be cited as the ``USEC Privatization 
Act''.
  (b) Reference.--Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Atomic 
Energy Act of 1954 (42 U.S.C. 2011 et seq.).

SEC. 702. PRODUCTION FACILITY.

  Paragraph v. of section 11 (42 U.S.C. 2014 v.) is amended by striking 
``or the construction and operation of a uranium enrichment production 
facility using Atomic Vapor Laser Isotope Separation technology''.

SEC. 703. DEFINITIONS.

  Section 1201 (42 U.S.C. 2297) is amended--
          (1) in paragraph (4), by inserting before the period the 
        following: ``and any successor corporation established through 
        privatization of the Corporation'';
          (2) by redesignating paragraphs (10) through (13) as 
        paragraphs (14) through (17), respectively, and by inserting 
        after paragraph (9) the following new paragraphs:
          ``(10) The term `low-level radioactive waste' has the meaning 
        given such term in section 102(9) of the Low-Level Radioactive 
        Waste Policy Amendments Act of 1985 (42 U.S.C. 2021b(9)).
          ``(11) The term `mixed waste' has the meaning given such term 
        in section 1004(41) of the Solid Waste Disposal Act (42 U.S.C. 
        6903(41)).
          ``(12) The term `privatization' means the transfer of 
        ownership of the Corporation to private investors pursuant to 
        chapter 25.
          ``(13) The term `privatization date' means the date on which 
        100 percent of ownership of the Corporation has been 
        transferred to private investors.'';
          (3) by inserting after paragraph (17) (as redesignated) the 
        following new paragraph:
          ``(18) The term `transition date' means July 1, 1993.''; and
          (4) by redesignating the unredesignated paragraph (14) as 
        paragraph (19).

SEC. 704. EMPLOYEES OF THE CORPORATION.

  (a) Paragraph (2).--Paragraphs (1) and (2) of section 1305(e) (42 
U.S.C. 2297b-4(e)(1)(2)) are amended to read as follows:
          ``(1) In general.--It is the purpose of this subsection to 
        ensure that the privatization of the Corporation shall not 
        result in any adverse effects on the pension benefits of 
        employees at facilities that are operated, directly or under 
        contract, in the performance of the functions vested in the 
        Corporation.
          ``(2) Applicability of existing collective bargaining 
        agreement.--The Corporation shall abide by the terms of the 
        collective bargaining agreement in effect on the privatization 
        date at each individual facility.''.
  (b) Paragraph (4).--Paragraph (4) of section 1305(e) (42 U.S.C. 
2297b-4(e)(4)) is amended--
          (1) by striking ``and detailees'' in the heading;
          (2) by striking the first sentence;
          (3) in the second sentence, by inserting ``from other Federal 
        employment'' after ``transfer to the Corporation''; and
          (4) by striking the last sentence.

SEC. 705. MARKETING AND CONTRACTING AUTHORITY.

  (a) Marketing Authority.--Section 1401(a) (42 U.S.C. 2297c(a)) is 
amended effective on the privatization date (as defined in section 
1201(13) of the Atomic Energy Act of 1954)--
          (1) by amending the subsection heading to read ``Marketing 
        Authority.--''; and
          (2) by striking the first sentence.
  (b) Transfer of Contracts.--Section 1401(b) (42 U.S.C. 2297c(b)) is 
amended--
          (1) in paragraph (2)(B), by adding at the end the following: 
        ``The privatization of the Corporation shall not affect the 
        terms of, or the rights or obligations of the parties to, any 
        such power purchase contract.''; and
          (2) by adding at the end the following:
          ``(3) Effect of transfer.--
                  ``(A) As a result of the transfer pursuant to 
                paragraph (1), all rights, privileges, and benefits 
                under such contracts, agreements, and leases, including 
                the right to amend, modify, extend, revise, or 
                terminate any of such contracts, agreements, or leases 
                were irrevocably assigned to the Corporation for its 
                exclusive benefit.
                  ``(B) Notwithstanding the transfer pursuant to 
                paragraph (1), the United States shall remain obligated 
                to the parties to the contracts, agreements, and leases 
                transferred pursuant to paragraph (1) for the 
                performance of the obligations of the United States 
                thereunder during the term thereof. The Corporation 
                shall reimburse the United States for any amount paid 
                by the United States in respect of such obligations 
                arising after the privatization date to the extent such 
                amount is a legal and valid obligation of the 
                Corporation then due.
                  ``(C) After the privatization date, upon any material 
                amendment, modification, extension, revision, 
                replacement, or termination of any contract, agreement, 
                or lease transferred under paragraph (1), the United 
                States shall be released from further obligation under 
                such contract, agreement, or lease, except that such 
                action shall not release the United States from 
                obligations arising under such contract, agreement, or 
                lease prior to such time.''.
  (c) Pricing.--Section 1402 (42 U.S.C. 2297c-1) is amended to read as 
follows:

``SEC. 1402. PRICING.

  ``The Corporation shall establish prices for its products, materials, 
and services provided to customers on a basis that will allow it to 
attain the normal business objectives of a profitmaking corporation.''.
  (d) Leasing of Gaseous Diffusion Facilities of Department.--Effective 
on the privatization date (as defined in section 1201(13) of the Atomic 
Energy Act of 1954), section 1403 (42 U.S.C. 2297c-2) is amended by 
adding at the end the following:
  ``(h) Low-Level Radioactive Waste and Mixed Waste.--
          ``(1) Responsibility of the department; costs.--
                  ``(A) With respect to low-level radioactive waste and 
                mixed waste generated by the Corporation as a result of 
                the operation of the facilities and related property 
                leased by the Corporation pursuant to subsection (a) or 
                as a result of treatment of such wastes at a location 
                other than the facilities and related property leased 
                by the Corporation pursuant to subsection (a) the 
                Department, at the request of the Corporation, shall--
                          ``(i) accept for treatment or disposal of all 
                        such wastes for which treatment or disposal 
                        technologies and capacities exist, whether 
                        within the Department or elsewhere; and
                          ``(ii) accept for storage (or ultimately 
                        treatment or disposal) all such wastes for 
                        which treatment and disposal technologies or 
                        capacities do not exist, pending development of 
                        such technologies or availability of such 
                        capacities for such wastes.
                  ``(B) All low-level wastes and mixed wastes that the 
                Department accepts for treatment, storage, or disposal 
                pursuant to subparagraph (A) shall, for the purpose of 
                any permits, licenses, authorizations, agreements, or 
                orders involving the Department and other Federal 
                agencies or State or local governments, be deemed to be 
                generated by the Department and the Department shall 
                handle such wastes in accordance with any such permits, 
                licenses, authorizations, agreements, or orders. The 
                Department shall obtain any additional permits, 
                licenses, or authorizations necessary to handle such 
                wastes, shall amend any such agreements or orders as 
                necessary to handle such wastes, and shall handle such 
                wastes in accordance therewith.
                  ``(C) The Corporation shall reimburse the Department 
                for the treatment, storage, or disposal of low-level 
                radioactive waste or mixed waste pursuant to 
                subparagraph (A) in an amount equal to the Department's 
                costs but in no event greater than an amount equal to 
                that which would be charged by commercial, State, 
                regional, or interstate compact entities for treatment, 
                storage, or disposal of such waste.
          ``(2) Agreements with other persons.--The Corporation may 
        also enter into agreements for the treatment, storage, or 
        disposal of low-level radioactive waste and mixed waste 
        generated by the Corporation as a result of the operation of 
        the facilities and related property leased by the Corporation 
        pursuant to subsection (a) with any person other than the 
        Department that is authorized by applicable laws and 
        regulations to treat, store, or dispose of such wastes.''.
  (e) Liabilities.--
          (1) Subsection (a) of section 1406 (42 U.S.C. 2297c-5(a)) is 
        amended--
                  (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                  (B) by adding at the end the following: ``As of the 
                privatization date, all liabilities attributable to the 
                operation of the Corporation from the transition date 
                to the privatization date shall be direct liabilities 
                of the United States.''.
          (2) Subsection (b) of section 1406 (42 U.S.C. 2297c-5(b)) is 
        amended--
                  (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                  (B) by adding at the end the following: ``As of the 
                privatization date, any judgment entered against the 
                Corporation imposing liability arising out of the 
                operation of the Corporation from the transition date 
                to the privatization date shall be considered a 
                judgment against the United States.''.
          (3) Subsection (d) of section 1406 (42 U.S.C. 2297c-5(d)) is 
        amended--
                  (A) by inserting ``and Privatization'' after 
                ``Transition'' in the heading; and
                  (B) by striking ``the transition date'' and inserting 
                ``the privatization date (or, in the event the 
                privatization date does not occur, the transition 
                date)''.
  (f) Transfer of Uranium.--Title II (42 U.S.C. 2297 et seq.) is 
amended by redesignating section 1408 as section 1409 and by inserting 
after section 1407 the following:

``SEC. 1408. TRANSFER OF URANIUM.

  ``The Secretary may, before the privatization date, transfer to the 
Corporation without charge raw uranium, low-enriched uranium, and 
highly enriched uranium.''.

SEC. 706. PRIVATIZATION OF THE CORPORATION.

  (a) Establishment of Private Corporation.--Chapter 25 (42 U.S.C. 
2297d et seq.) is amended by adding at the end the following new 
section:

``SEC. 1503. ESTABLISHMENT OF PRIVATE CORPORATION.

  ``(a) Establishment.--
          ``(1) In general.--In order to facilitate privatization, the 
        Corporation may provide for the establishment of a private 
        corporation organized under the laws of any of the several 
        States. Such corporation shall have among its purposes the 
        following:
                  ``(A) To help maintain a reliable and economical 
                domestic source of uranium enrichment services.
                  ``(B) To undertake any and all activities as provided 
                in its corporate charter.
          ``(2) Authorities.--The corporation established pursuant to 
        paragraph (1) shall be authorized to--
                  ``(A) enrich uranium, provide for uranium to be 
                enriched by others, or acquire enriched uranium 
                (including low-enriched uranium derived from highly 
                enriched uranium);
                  ``(B) conduct, or provide for conducting, those 
                research and development activities related to uranium 
                enrichment and related processes and activities the 
                corporation considers necessary or advisable to 
                maintain itself as a commercial enterprise operating on 
                a profitable and efficient basis;
                  ``(C) enter into transactions regarding uranium, 
                enriched uranium, or depleted uranium with--
                          ``(i) persons licensed under section 53, 63, 
                        103, or 104 in accordance with the licenses 
                        held by those persons;
                          ``(ii) persons in accordance with, and within 
                        the period of, an agreement for cooperation 
                        arranged under section 123; or
                          ``(iii) persons otherwise authorized by law 
                        to enter into such transactions;
                  ``(D) enter into contracts with persons licensed 
                under section 53, 63, 103, or 104, for as long as the 
                corporation considers necessary or desirable, to 
                provide uranium or uranium enrichment and related 
                services;
                  ``(E) enter into contracts to provide uranium or 
                uranium enrichment and related services in accordance 
                with, and within the period of, an agreement for 
                cooperation arranged under section 123 or as otherwise 
                authorized by law; and
                  ``(F) take any and all such other actions as are 
                permitted by the law of the jurisdiction of 
                incorporation of the corporation.
          ``(3) Transfer of assets.--For purposes of implementing the 
        privatization, the Corporation may transfer some or all of its 
        assets and obligations to the corporation established pursuant 
        to this section, including--
                  ``(A) all of the Corporation's assets, including all 
                contracts, agreements, and leases, including all 
                uranium enrichment contracts and power purchase 
                contracts;
                  ``(B) all funds in accounts of the Corporation held 
                by the Treasury or on deposit with any bank or other 
                financial institution;
                  ``(C) all of the Corporation's rights, duties, and 
                obligations, accruing subsequent to the privatization 
                date, under the power purchase contracts covered by 
                section 1401(b)(2)(B); and
                  ``(D) all of the Corporation's rights, duties, and 
                obligations, accruing subsequent to the privatization 
                date, under the lease agreement between the Department 
                and the Corporation executed by the Department and the 
                Corporation pursuant to section 1403.
          ``(4) Merger or consolidation.--For purposes of implementing 
        the privatization, the Corporation may merge or consolidate 
        with the corporation established pursuant to subsection (a)(1) 
        if such action is contemplated by the plan for privatization 
        approved by the President under section 1502(b). The Board 
        shall have exclusive authority to approve such merger or 
        consolidation and to take all further actions necessary to 
        consummate such merger or consolidation, and no action by or in 
        respect of shareholders shall be required. The merger or 
        consolidation shall be effected in accordance with, and have 
        the effects of a merger or consolidation under, the laws of the 
        jurisdiction of incorporation of the surviving corporation, and 
        all rights and benefits provided under this title to the 
        Corporation shall apply to the surviving corporation as if it 
        were the Corporation.
          ``(5) Tax treatment of privatization.--
                  ``(A) Transfer of assets or merger.--No income, gain, 
                or loss shall be recognized by any person by reason of 
                the transfer of the Corporation's assets to, or the 
                Corporation's merger with, the corporation established 
                pursuant to subsection (a)(1) in connection with the 
                privatization.
                  ``(B) Cancellation of debt and common stock.--No 
                income, gain, or loss shall be recognized by any person 
                by reason of any cancellation of any obligation or 
                common stock of the Corporation in connection with the 
                privatization.
  ``(b) OSHA Requirements.--For purposes of the regulation of 
radiological and nonradiological hazards under the Occupational Safety 
and Health Act of 1970, the corporation established pursuant to 
subsection (a)(1) shall be treated in the same manner as other 
employers licensed by the Nuclear Regulatory Commission. Any 
interagency agreement entered into between the Nuclear Regulatory 
Commission and the Occupational Safety and Health Administration 
governing the scope of their respective regulatory authorities shall 
apply to the corporation as if the corporation were a Nuclear 
Regulatory Commission licensee.
  ``(c) Legal Status of Private Corporation.--
          ``(1) Not federal agency.--The corporation established 
        pursuant to subsection (a)(1) shall not be an agency, 
        instrumentality, or establishment of the United States 
        Government and shall not be a Government corporation or 
        Government-controlled corporation.
          ``(2) No recourse against united states.--Obligations of the 
        corporation established pursuant to subsection (a)(1) shall not 
        be obligations of, or guaranteed as to principal or interest 
        by, the Corporation or the United States, and the obligations 
        shall so plainly state.
          ``(3) No claims court jurisdiction.--No action under section 
        1491 of title 28, United States Code, shall be allowable 
        against the United States based on the actions of the 
        corporation established pursuant to subsection (a)(1).
  ``(d) Board of Director's Election After Public Offering.--In the 
event that the privatization is implemented by means of a public 
offering, an election of the members of the board of directors of the 
Corporation by the shareholders shall be conducted before the end of 
the 1-year period beginning the date shares are first offered to the 
public pursuant to such public offering.
  ``(e) Adequate Proceeds.--The Secretary of Energy shall not allow the 
privatization of the Corporation unless before the sale date the 
Secretary determines that the estimated sum of the gross proceeds from 
the sale of the Corporation will be an adequate amount.''.
  (b) Ownership Limitations.--Chapter 25 (as amended by subsection (a)) 
is amended by adding at the end the following new section:

``SEC. 1504. OWNERSHIP LIMITATIONS.

  ``(a) Securities Limitation.--In the event that the privatization is 
implemented by means of a public offering, during a period of 3 years 
beginning on the privatization date, no person, directly or indirectly, 
may acquire or hold securities representing more than 10 percent of the 
total votes of all outstanding voting securities of the Corporation.
  ``(b) Application.--Subsection (a) shall not apply--
          ``(1) to any employee stock ownership plan of the 
        Corporation,
          ``(2) to underwriting syndicates holding shares for resale, 
        or
          ``(3) in the case of shares beneficially held for others, to 
        commercial banks, broker-dealers, clearing corporations, or 
        other nominees.
  ``(c) No director, officer, or employee of the Corporation may 
acquire any securities, or any right to acquire securities, of the 
Corporation--
          ``(1) in the public offering of securities of the Corporation 
        in the implementation of the privatization,
          ``(2) pursuant to any agreement, arrangement, or 
        understanding entered into before the privatization date, or
          ``(3) before the election of directors of the Corporation 
        under section 1503(d) on any terms more favorable than those 
        offered to the general public.''.
  (c) Exemption From Liability.--Chapter 25 (as amended by subsection 
(b)) is amended by adding at the end the following new section:

``SEC. 1505. EXEMPTION FROM LIABILITY.

  ``(a) In General.--No director, officer, employee, or agent of the 
Corporation shall be liable, for money damages or otherwise, to any 
party if, with respect to the subject matter of the action, suit, or 
proceeding, such person was fulfilling a duty, in connection with any 
action taken in connection with the privatization, which such person in 
good faith reasonably believed to be required by law or vested in such 
person.
  ``(b) Exception.--The privatization shall be subject to the 
Securities Act of 1933 and the Securities Exchange Act of 1934. The 
exemption set forth in subsection (a) shall not apply to claims arising 
under such Acts or under the Constitution or laws of any State, 
territory, or possession of the United States relating to transactions 
in securities, which claims are in connection with a public offering 
implementing the privatization.''.
  (d) Resolution of Certain Issues.--Chapter 25 (as amended by 
subsection (c)) is amended by adding at the end the following new 
section:
``SEC. 1506. RESOLUTION OF CERTAIN ISSUES.

  ``(a) Corporation Actions.--Notwithstanding any provision of any 
agreement to which the Corporation is a party, the Corporation shall 
not be considered to be in breach, default, or violation of any such 
agreement because of any provision of this chapter or any action the 
Corporation is required to take under this chapter.
  ``(b) Right To Sue Withdrawn.--The United States hereby withdraws any 
stated or implied consent for the United States, or any agent or 
officer of the United States, to be sued by any person for any legal, 
equitable, or other relief with respect to any claim arising out of, or 
resulting from, acts or omissions under this chapter.''.
  (e) Application of Privatization Proceeds.--Chapter 25 (as amended by 
subsection (d)) is amended by adding at the end the following new 
section:

``SEC. 1507. APPLICATION OF PRIVATIZATION PROCEEDS.

  ``The proceeds from the privatization shall be included in the budget 
baseline required by the Balanced Budget and Emergency Deficit Control 
Act of 1985 and shall be counted as an offset to direct spending for 
purposes of section 252 of such Act, notwithstanding section 257(e) of 
such Act.''.
  (f) Conforming Amendment.--The table of contents for chapter 25 is 
amended by inserting after the item for section 1502 the following:

``Sec. 1503. Establishment of Private Corporation.
``Sec. 1504. Ownership Limitations.
``Sec. 1505. Exemption from Liability.
``Sec. 1506. Resolution of Certain Issues.
``Sec. 1507. Application of Privatization Proceeds.''.
  (g) Section 193 (42 U.S.C. 2243) is amended by adding at the end the 
following:
  ``(f) Limitation.--If the privatization of the United States 
Enrichment Corporation results in the Corporation being--
          ``(1) owned, controlled, or dominated by a foreign 
        corporation or a foreign government, or
          ``(2) otherwise inimical to the common defense or security of 
        the United States,
any license held by the Corporation under sections 53 and 63 shall be 
terminated.''.
  (h) Period for Congressional Review.--Section 1502(d) (42 U.S.C. 
2297d-1(d)) is amended by striking ``less than 60 days after 
notification of the Congress'' and inserting ``less than 60 days after 
the date of the report to Congress by the Comptroller General under 
subsection (c)''.

SEC. 707. PERIODIC CERTIFICATION OF COMPLIANCE.

  Section 1701(c)(2) (42 U.S.C. 2297f(c)(2)) is amended by striking 
``Annual application for certificate of compliance.--The Corporation 
shall apply at least annually to the Nuclear Regulatory Commission for 
a certificate of compliance under paragraph (1).'' and inserting 
``Periodic application for certificate of compliance.--The Corporation 
shall apply to the Nuclear Regulatory Commission for a certificate of 
compliance under paragraph (1) periodically, as determined by the 
Nuclear Regulatory Commission, but not less than every 5 years.''.

SEC. 708. LICENSING OF OTHER TECHNOLOGIES.

  Subsection (a) of section 1702 (42 U.S.C. 2297f-1(a)) is amended by 
striking ``other than'' and inserting ``including''.

SEC. 709. CONFORMING AMENDMENTS.

  (a) Repeals in Atomic Energy Act of 1954 as of the Privatization 
Date.--
          (1) Repeals.--As of the privatization date (as defined in 
        section 1201(13) of the Atomic Energy Act of 1954), the 
        following sections (as in effect on such privatization date) of 
        the Atomic Energy Act of 1954 are repealed:
                  (A) Section 1202.
                  (B) Sections 1301 through 1304.
                  (C) Sections 1306 through 1316.
                  (D) Sections 1404 and 1405.
                  (E) Section 1601.
                  (F) Sections 1603 through 1607.
          (2) Conforming amendment.--The table of contents of such Act 
        is amended by repealing the items referring to sections 
        repealed by paragraph (1).
  (b) Statutory Modifications.--As of such privatization date, the 
following shall take effect:
          (1) For purposes of title I of the Atomic Energy Act of 1954, 
        all references in such Act to the ``United States Enrichment 
        Corporation'' shall be deemed to be references to the 
        corporation established pursuant to section 1503 of the Atomic 
        Energy Act of 1954 (as added by section 6(a)).
          (2) Section 1018(1) of the Energy Policy Act of 1992 (42 
        U.S.C. 2296b-7(1)) is amended by striking ``the United States'' 
        and all that follows through the period and inserting ``the 
        corporation referred to in section 1201(4) of the Atomic Energy 
        Act of 1954.''.
          (3) Section 9101(3) of title 31, United States Code, is 
        amended by striking subparagraph (N), as added by section 
        902(b) of Public Law 102-486.
  (c) Revision of Section 1305.--As of such privatization date, section 
1305 of the Atomic Energy Act of 1954 (42 U.S.C 2297b-4) is amended--
          (1) by repealing subsections (a), (b), (c), and (d), and
          (2) in subsection (e)--
                  (A) by striking the subsection designation and 
                heading,
                  (B) by redesignating paragraphs (1) and (2) (as added 
                by section 4(a)) as subsections (a)  and  (b)  and  by 
                moving the margins 2-ems to the left,
                  (C) by striking paragraph (3), and
                  (D) by redesignating paragraph (4) (as amended by 
                section 4(b)) as subsection (c), and by moving the 
                margins 2-ems to the left.