II 

115TH CONGRESS 

1ST SESSION S. 661 

To assist entrepreneurs, support development of the creative economy, and 

encourage international cultural exchange, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 15, 2017 

Mr. UDALL introduced the following bill; which was read twice and referred 

to the Committee on Finance 

A BILL 

To assist entrepreneurs, support development of the creative 

economy, and encourage international cultural exchange, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Comprehensive Resources for Entrepreneurs in the Arts 

6 to Transform the Economy Act of 2017’’ or the ‘‘CRE7 ATE Act of 2017’’. 

8 (b) TABLE OF CONTENTS.—The table of contents for 

9 this Act is as follows: 

Sec. 1. Short title; table of contents. 


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TITLE I—SUPPORT FOR ARTISTS AND ENTREPRENEURS 

Sec. 101. Charitable contributions of certain items created by the taxpayer. 

Sec. 102. Microloan program expansion. 

Sec. 103. SBA business loans for the creative economy. 

Sec. 104. SBA technical assistance programs. 

Sec. 105. Arts-focused economic development. 

Sec. 106. Arts-focused rural development. 

Sec. 107. International participation in the arts. 

Sec. 108. Disaster support for artists through FEMA. 

TITLE II—SUPPORT FOR THE CREATIVE ECONOMY 

Sec. 201. Modification of rules for charitable contributions of fractional gifts. 

Sec. 202. Capital gains tax rate relating to art. 

TITLE III—CREATIVE COMMUNITY DEVELOPMENT 

Sec. 301. Artist corps. 

Sec. 302. Community development entities focused on the arts for purposes of 

the new markets tax credit. 

Sec. 303. Demonstration program on support of local programs that promote 

creative and performance arts in local economic planning. 

1 TITLE I—SUPPORT FOR ARTISTS 

2 AND ENTREPRENEURS 

3 SEC. 101. CHARITABLE CONTRIBUTIONS OF CERTAIN 

4 ITEMS CREATED BY THE TAXPAYER. 

5 (a) IN GENERAL.—Subsection (e) of section 170 of 

6 the Internal Revenue Code of 1986 is amended by adding 

7 at the end the following new paragraph: 

8 ‘‘(8) SPECIAL RULE FOR CERTAIN CONTRIBU9 TIONS OF LITERARY, MUSICAL, OR ARTISTIC COM10 POSITIONS.— 

11 ‘‘(A) IN GENERAL.—In the case of a quali12 fied artistic charitable contribution— 

13 ‘‘(i) the amount of such contribution 

14 shall be the fair market value of the propVerDate Sep 11 2014 22:50 Mar 20, 2017 Jkt 069200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S661.IS S661

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1 erty contributed (determined at the time of 

2 such contribution), and 

3 ‘‘(ii) no reduction in the amount of 

4 such contribution shall be made under 

5 paragraph (1). 

6 ‘‘(B) QUALIFIED ARTISTIC CHARITABLE

7 CONTRIBUTION.—For purposes of this para8 graph, the term ‘qualified artistic charitable 

9 contribution’ means a charitable contribution of 

10 any literary, musical, artistic, or scholarly com11 position, or similar property, or the copyright 

12 thereon (or both), but only if— 

13 ‘‘(i) such property was created by the 

14 personal efforts of the taxpayer making 

15 such contribution no less than 18 months 

16 prior to such contribution, 

17 ‘‘(ii) the taxpayer— 

18 ‘‘(I) has received a qualified ap19 praisal of the fair market value of 

20 such property in accordance with the 

21 regulations under this section, and 

22 ‘‘(II) attaches to the taxpayer’s 

23 income tax return for the taxable year 

24 in which such contribution was made 

25 a copy of such appraisal, 


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1 ‘‘(iii) the donee is an organization de2 scribed in subsection (b)(1)(A), 

3 ‘‘(iv) the use of such property by the 

4 donee is related to the purpose or function 

5 constituting the basis for the donee’s ex6 emption under section 501 (or, in the case 

7 of a governmental unit, to any purpose or 

8 function described under subsection (c)), 

9 ‘‘(v) the taxpayer receives from the 

10 donee a written statement representing 

11 that the donee’s use of the property will be 

12 in accordance with the provisions of clause 

13 (iv), and 

14 ‘‘(vi) the written appraisal referred to 

15 in clause (ii) includes evidence of the ex16 tent (if any) to which property created by 

17 the personal efforts of the taxpayer and of 

18 the same type as the donated property is 

19 or has been— 

20 ‘‘(I) owned, maintained, and dis21 played by organizations described in 

22 subsection (b)(1)(A), and 

23 ‘‘(II) sold to or exchanged by 

24 persons other than the taxpayer, 


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1 donee, or any related person (as de2 fined in section 465(b)(3)(C)). 

3 ‘‘(C) MAXIMUM DOLLAR LIMITATION; NO

4 CARRYOVER OF INCREASED DEDUCTION.—The 

5 increase in the deduction under this section by 

6 reason of this paragraph for any taxable year— 

7 ‘‘(i) shall not exceed the artistic ad8 justed gross income of the taxpayer for 

9 such taxable year, and 

10 ‘‘(ii) shall not be taken into account in 

11 determining the amount which may be car12 ried from such taxable year under sub13 section (d). 

14 ‘‘(D) ARTISTIC ADJUSTED GROSS IN15 COME.—For purposes of this paragraph, the 

16 term ‘artistic adjusted gross income’ means 

17 that portion of the adjusted gross income of the 

18 taxpayer for the taxable year attributable to— 

19 ‘‘(i) income from the sale or use of 

20 property created by the personal efforts of 

21 the taxpayer which is of the same type as 

22 the donated property, and 

23 ‘‘(ii) income from teaching, lecturing, 

24 performing, or similar activity with respect 

25 to property described in clause (i). 


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1 ‘‘(E) PARAGRAPH NOT TO APPLY TO CER2 TAIN CONTRIBUTIONS.—Subparagraph (A) shall 

3 not apply to any charitable contribution of any 

4 letter, memorandum, or similar property which 

5 was written, prepared, or produced by or for an 

6 individual while the individual is an officer or 

7 employee of any person (including any govern8 ment agency or instrumentality) unless such 

9 letter, memorandum, or similar property is en10 tirely personal. 

11 ‘‘(F) COPYRIGHT TREATED AS SEPARATE

12 PROPERTY FOR PARTIAL INTEREST RULE.—In 

13 the case of a qualified artistic charitable con14 tribution, the tangible literary, musical, artistic, 

15 or scholarly composition, or similar property 

16 and the copyright on such work shall be treated 

17 as separate properties for purposes of this para18 graph and subsection (f)(3).’’. 

19 (b) EFFECTIVE DATE.—The amendment made by 

20 this section shall apply to contributions made after the 

21 date of the enactment of this Act in taxable years ending 

22 after such date. 


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1 SEC. 102. MICROLOAN PROGRAM EXPANSION. 

2 Section 7(m)(6) of the Small Business Act (15 

3 U.S.C. 636(m)(6)) is amended by adding at the end the 

4 following: 

5 ‘‘(F) LOAN CRITERIA FOR ARTISTS AND

6 ARTS ENTREPRENEURS.—The Administration, 

7 in consultation with eligible intermediaries, 

8 shall develop loan criteria to ensure that small 

9 business concerns owned and controlled by art10 ists and small business concerns that support 

11 the creative economy receive loan proceeds 

12 under this subsection.’’. 

13 SEC. 103. SBA BUSINESS LOANS FOR THE CREATIVE ECON14 OMY. 

15 Section 7(a) of the Small Business Act (15 U.S.C. 

16 636(a)) is amended by adding at the end the following: 

17 ‘‘(35) CREATIVE ECONOMY.—In providing as18 sistance under this subsection, the Administration 

19 shall develop procedures to evaluate the business 

20 proposals and business plans of small business con21 cerns that focus on economic development, job cre22 ation, and community growth with respect to the 

23 creative economy.’’. 

24 SEC. 104. SBA TECHNICAL ASSISTANCE PROGRAMS. 

25 Section 21 of the Small Business Act (15 U.S.C. 648) 

26 is amended by adding at the end the following: 


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1 ‘‘(o) TECHNICAL ASSISTANCE PROGRAMS FOR ART2 ISTS AND ARTS ENTREPRENEURS.—The Administration, 

3 in consultation with relevant stakeholders, shall develop 

4 technical assistance programs to be carried out by small 

5 business development centers under this subsection that 

6 target the specific needs of artists and arts entre7 preneurs.’’. 

8 SEC. 105. ARTS-FOCUSED ECONOMIC DEVELOPMENT. 

9 Title II of the Public Works and Economic Develop10 ment Act of 1965 (42 U.S.C. 3141 et seq.) is amended 

11 by adding at the end the following: 

12 ‘‘SEC. 219. ARTS-FOCUSED ECONOMIC DEVELOPMENT. 

13 ‘‘(a) DEFINITIONS.—In this section: 

14 ‘‘(1) BUSINESS INCUBATION PROGRAM.—The 

15 term ‘business incubation program’ means a pro16 gram that— 

17 ‘‘(A) accelerates the successful develop18 ment of entrepreneurial businesses through 

19 business support resources and services, devel20 oped or orchestrated by incubator management; 

21 ‘‘(B) is designed to produce successful 

22 businesses; and 

23 ‘‘(C) provides management guidance, tech24 nical assistance, and consulting designed for 


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1 young, growing businesses, including by pro2 viding— 

3 ‘‘(i) rental space and flexible leases; 

4 ‘‘(ii) shared basic business services 

5 and equipment; 

6 ‘‘(iii) technology support services; and 

7 ‘‘(iv) assistance in obtaining financing 

8 necessary for growth of the business. 

9 ‘‘(2) INCUBATOR.—The term ‘incubator’ means 

10 a multitenant facility with on-site management that 

11 directs a business incubation program. 

12 ‘‘(b) ARTS-FOCUSED ECONOMIC DEVELOPMENT.—In 

13 providing grants and assistance under this Act (including 

14 through the local technical assistance, partnership plan15 ning, and comprehensive economic development strategies 

16 programs of the Economic Development Administration), 

17 the Secretary shall provide to artists and the creative 

18 economy support through traditional economic develop19 ment tools, including— 

20 ‘‘(1) incubators; and 

21 ‘‘(2) economic development planning and tech22 nical assistance.’’. 


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1 SEC. 106. ARTS-FOCUSED RURAL DEVELOPMENT. 

2 The Consolidated Farm and Rural Development Act 

3 (7 U.S.C. 1921 et seq.) is amended by adding at the end 

4 the following: 

5 ‘‘Subtitle J—Arts-Focused 

6 Economic Development 

7 ‘‘SEC. 386A. ARTS-FOCUSED ECONOMIC DEVELOPMENT. 

8 ‘‘(a) DEFINITIONS.—In this section: 

9 ‘‘(1) BUSINESS INCUBATION PROGRAM.—The 

10 term ‘business incubation program’ means a pro11 gram that— 

12 ‘‘(A) accelerates the successful develop13 ment of entrepreneurial businesses through 

14 business support resources and services, devel15 oped or orchestrated by incubator management; 

16 ‘‘(B) is designed to produce successful 

17 businesses; and 

18 ‘‘(C) provides management guidance, tech19 nical assistance, and consulting designed for 

20 young, growing businesses, including by pro21 viding— 

22 ‘‘(i) rental space and flexible leases; 

23 ‘‘(ii) shared basic business services 

24 and equipment; 

25 ‘‘(iii) technology support services; and 


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1 ‘‘(iv) assistance in obtaining financing 

2 necessary for growth of the business. 

3 ‘‘(2) INCUBATOR.—The term ‘incubator’ means 

4 a multitenant facility with on-site management that 

5 directs a business incubation program. 

6 ‘‘(b) ARTS-FOCUSED ECONOMIC DEVELOPMENT.—In 

7 providing grants and assistance under this Act (including 

8 through the local technical assistance, partnership plan9 ning, and comprehensive economic development strategies 

10 programs of the Office of Rural Development), the Sec11 retary, acting through the Under Secretary for Rural De12 velopment, shall provide to artists and the creative econ13 omy support through traditional economic development 

14 tools, including— 

15 ‘‘(1) incubators; and 

16 ‘‘(2) economic development planning and tech17 nical assistance.’’. 

18 SEC. 107. INTERNATIONAL PARTICIPATION IN THE ARTS. 

19 Section 214(c)(6)(D) of the Immigration and Nation20 ality Act (8 U.S.C. 1184(c)(6)(D)) is amended— 

21 (1) in the first sentence, by inserting ‘‘(i)’’ be22 fore ‘‘Any person’’; 

23 (2) in the second sentence— 

24 (A) by striking ‘‘Once’’ and inserting ‘‘Ex25 cept as provided in clause (ii), once’’; and 


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1 (B) by striking ‘‘Attorney General shall’’ 

2 and inserting ‘‘Secretary of Homeland Security 

3 shall’’; 

4 (3) in the third sentence, by striking ‘‘The At5 torney General’’ and inserting ‘‘The Secretary’’; and 

6 (4) by adding at the end the following: 

7 ‘‘(ii) The Secretary of Homeland Security shall adju8 dicate each petition for an alien with extraordinary ability 

9 in the arts (as described in section 101(a)(15)(O)(i)), an 

10 alien accompanying such an alien (as described in section 

11 101(a)(15)(O)(ii)), or an alien described in section 

12 101(a)(15)(P) (other than an alien described in section 

13 214(c)(4)(A) (relating to athletes)) not later than 14 days 

14 after— 

15 ‘‘(I) the date on which the petitioner submits 

16 the petition with a written advisory opinion, letter of 

17 no objection, or request for a waiver; or 

18 ‘‘(II) the date on which the 15-day period de19 scribed in clause (i) has expired, if the petitioner has 

20 had an opportunity to supply rebuttal evidence. 

21 ‘‘(iii) If a petition described in clause (ii) is not adju22 dicated by the end of the 14-day period described in clause 

23 (ii) and the petitioner is an arts organization described 

24 in paragraph (3), (5), or (6) of section 501(c) of the Inter25 nal Revenue Code of 1986 and exempt from tax under 


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1 section 501(a) of such Code for the taxable year preceding 

2 the calendar year in which the petition is submitted, or 

3 an individual or entity petitioning primarily on behalf of 

4 such an organization, the Secretary of Homeland Security 

5 shall provide the petitioner with the premium-processing 

6 services referred to in section 286(u), without a fee.’’. 

7 SEC. 108. DISASTER SUPPORT FOR ARTISTS THROUGH 

8 FEMA. 

9 (a) IN GENERAL.—The President, acting through the 

10 Administrator of the Federal Emergency Management 

11 Agency, shall promulgate rules to ensure that expenses in12 curred, as a result of a major disaster or emergency, by 

13 a self-employed or freelance worker, including a craft art14 ist, fine artist, designer, literary artist, performing artist, 

15 or musician, to repair or replace tools needed by the self16 employed or freelance worker are considered eligible ex17 penses for assistance under section 408 of the Robert T. 

18 Stafford Disaster Relief and Emergency Assistance Act 

19 (42 U.S.C. 5174). 

20 (b) REQUIREMENT.—The rules promulgated under 

21 subsection (a) may not require, as a condition of receiving 

22 such assistance under section 408 of the Robert T. Staf23 ford Disaster Relief and Emergency Assistance Act (42 

24 U.S.C. 5174), an applicant— 


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1 (1) to apply or be declined for assistance from 

2 the Small Business Administration; or 

3 (2) to demonstrate that assistance received 

4 from the Small Business Administration does not 

5 satisfy the total necessary expenses or serious needs 

6 arising out of a major disaster or emergency. 

7 TITLE II—SUPPORT FOR THE 

8 CREATIVE ECONOMY 

9 SEC. 201. MODIFICATION OF RULES FOR CHARITABLE CON10 TRIBUTIONS OF FRACTIONAL GIFTS. 

11 (a) INCOME TAX.— 

12 (1) ADDITIONAL REQUIREMENTS FOR DEDUC13 TION.—Paragraph (1) of section 170(o) of the Inter14 nal Revenue Code of 1986 is amended to read as fol15 lows: 

16 ‘‘(1) DENIAL OF DEDUCTION IN CERTAIN

17 CASES.— 

18 ‘‘(A) IN GENERAL.—No deduction shall be 

19 allowed for a contribution of an undivided por20 tion of a taxpayer’s entire interest in tangible 

21 personal property unless— 

22 ‘‘(i) all interests in the property are 

23 held immediately before such contribution 

24 by— 

25 ‘‘(I) the taxpayer, or 


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1 ‘‘(II) the taxpayer and the donee, 

2 ‘‘(ii) in the case of an initial fractional 

3 contribution, such contribution is an undi4 vided portion of not less than 10 percent 

5 of all interests in the property, 

6 ‘‘(iii) in the case of an initial frac7 tional contribution, the contribution is 

8 made pursuant to a written binding con9 tract which requires the donor— 

10 ‘‘(I) to contribute not less than 

11 20 percent of all interests in the prop12 erty on or before the date that is 11 

13 years after the date of the initial frac14 tional contribution, and 

15 ‘‘(II) to contribute all of the in16 terests in such property to the donee 

17 (or if such donee is no longer in exist18 ence, to any person described in sub19 section (c)) on or before the earlier of 

20 the date of the death of the donor or 

21 the date which is 20 years after the 

22 date of the initial fractional contribu23 tion, and 

24 ‘‘(iv) if the value of the tangible per25 sonal property with respect to which the 


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1 undivided portion of the taxpayer’s entire 

2 interest relates is greater than $1,000,000 

3 (or such greater amount as determined by 

4 the Secretary), the taxpayer attaches to 

5 the return for the taxable year in which 

6 such contribution is made a statement of 

7 value obtained from the Internal Revenue 

8 Service. 

9 In the case of a donor who dies before the date 

10 which is 20 years after the date of the initial 

11 fractional contribution, clause (iii)(II) is satis12 fied with respect to such initial fractional con13 tribution if the donor’s will specifies that all of 

14 the interests in such property will be contrib15 uted to the donee before such date. 

16 ‘‘(B) EXCEPTIONS.—The Secretary may, 

17 by regulation, provide for exceptions to sub18 paragraph (A)(i) in cases where all persons who 

19 hold an interest in the property make propor20 tional contributions of an undivided portion of 

21 the entire interest held by such persons. Such 

22 regulations may modify the requirements of 

23 clauses (ii) and (iii) of subparagraph (A) to the 

24 extent necessary to carry out the purposes of 

25 this subparagraph.’’. 


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1 (2) VALUATION OF SUBSEQUENT GIFTS.—Para2 graph (2) of section 170(o) of such Code is amended 

3 to read as follows: 

4 ‘‘(2) VALUATION OF SUBSEQUENT GIFTS.—In 

5 the case of any additional contribution, the fair mar6 ket value of such contribution shall be determined by 

7 using a certified appraisal from the Art Advisory 

8 Panel of the Commissioner of Internal Revenue.’’. 

9 (3) RECAPTURE OF DEDUCTION.—Paragraph 

10 (3) of section 170(o) of such Code is amended— 

11 (A) by redesignating subparagraph (B) as 

12 subparagraph (C), and 

13 (B) by striking subparagraph (A) and in14 serting the following: 

15 ‘‘(A) RECAPTURE.—The Secretary shall 

16 provide for the recapture of the amount of any 

17 deduction allowed under this section (plus inter18 est) with respect to any contribution of an undi19 vided portion of a taxpayer’s entire interest in 

20 tangible personal property— 

21 ‘‘(i) in any case in which the donor 

22 fails to meet the requirements described in 

23 paragraph (1)(A)(iii), and 

24 ‘‘(ii) in any case where such property 

25 is not in the physical possession of the 


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1 donee (other than in the case of art which 

2 is fragile or unwieldy) and used in a use 

3 which is related to a purpose or function 

4 constituting the basis for the donee organi5 zation’s exemption under section 501 dur6 ing any applicable period for a period of 

7 time which bears substantially the same 

8 ratio to 5 years as— 

9 ‘‘(I) the percentage of the undi10 vided interest of the donee in the 

11 property (determined on the day after 

12 such contribution was made), bears to 

13 ‘‘(II) 100 percent. 

14 ‘‘(B) APPLICABLE PERIOD.—For purposes 

15 of subparagraph (A), the applicable period 

16 means— 

17 ‘‘(i) the 5-year period beginning on 

18 the date of the later of the initial fractional 

19 contribution, and 

20 ‘‘(ii) each subsequent 5-year period 

21 occurring during the 20-year period de22 scribed in paragraph (1)(A)(iii)(II).’’. 

23 (b) GIFT TAX.— 

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1 ternal Revenue Code of 1986 is amended to read as 

2 follows: 

3 ‘‘(1) DENIAL OF DEDUCTION IN CERTAIN

4 CASES.— 

5 ‘‘(A) IN GENERAL.—No deduction shall be 

6 allowed for a contribution of an undivided por7 tion of a taxpayer’s entire interest in tangible 

8 personal property unless— 

9 ‘‘(i) all interests in the property are 

10 held immediately before such contribution 

11 by— 

12 ‘‘(I) the taxpayer, or 

13 ‘‘(II) the taxpayer and the donee, 

14 ‘‘(ii) in the case of an initial fractional 

15 contribution, such contribution is an undi16 vided portion of not less than 10 percent 

17 of all interests in the property, 

18 ‘‘(iii) in the case of an initial frac19 tional contribution, the contribution is 

20 made pursuant to a written binding con21 tract which requires the donor— 

22 ‘‘(I) to contribute not less than 

23 20 percent of all interests in the prop24 erty on or before the date that is 11 


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1 years after the date of the initial frac2 tional contribution, and 

3 ‘‘(II) to contribute all of the in4 terests in such property to the donee 

5 (or if such donee is no longer in exist6 ence, to any person described in sub7 section (c)) on or before the earlier of 

8 the date of the death of the donor or 

9 the date which is 20 years after the 

10 date of the initial fractional contribu11 tion, and 

12 ‘‘(iv) if the value of the tangible per13 sonal property with respect to which the 

14 undivided portion of the taxpayer’s entire 

15 interest relates is greater than $1,000,000 

16 (or such greater amount as determined by 

17 the Secretary), the taxpayer attaches to 

18 the return for the taxable year in which 

19 such contribution is made a statement of 

20 value obtained from the Internal Revenue 

21 Service. 

22 In the case of a donor who dies before the date 

23 which is 20 years after the date of the initial 

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1 tribution if the donor’s will specifies that all of 

2 the interests in such property will be contrib3 uted to the donee before such date. 

4 ‘‘(B) EXCEPTIONS.—The Secretary may, 

5 by regulation, provide for exceptions to sub6 paragraph (A)(i) in cases where all persons who 

7 hold an interest in the property make propor8 tional contributions of an undivided portion of 

9 the entire interest held by such persons. Such 

10 regulations may modify the requirements of 

11 clauses (ii) and (iii) of subparagraph (A) to the 

12 extent necessary to carry out the purposes of 

13 this subparagraph.’’. 

14 (2) RECAPTURE OF DEDUCTION.—Paragraph 

15 (2) of section 2522(e) of such Code is amended— 

16 (A) by redesignating subparagraphs (B) 

17 and (C) as subparagraphs (C) and (D), respec18 tively, and 

19 (B) by striking subparagraph (A) and in20 serting the following: 

21 ‘‘(A) RECAPTURE.—The Secretary shall 

22 provide for the recapture of the amount of any 

23 deduction allowed under this section (plus inter24 est) with respect to any contribution of an undiVerDate Sep 11 2014 22:50 Mar 20, 2017 Jkt 069200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S661.IS S661

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1 vided portion of a taxpayer’s entire interest in 

2 tangible personal property— 

3 ‘‘(i) in any case in which the donor 

4 fails to meet the requirements described in 

5 paragraph (1)(A)(iii), and 

6 ‘‘(ii) in any case where such property 

7 is not in the physical possession of the 

8 donee (other than in the case of art which 

9 is fragile or unwieldy) and used in a use 

10 which is related to a purpose or function 

11 constituting the basis for the donee organi12 zation’s exemption under section 501 dur13 ing any applicable period for a period of 

14 time which bears substantially the same 

15 ratio to 5 years as— 

16 ‘‘(I) the percentage of the undi17 vided interest of the donee in the 

18 property (determined on the day after 

19 such contribution was made), bears to 

20 ‘‘(II) 100 percent. 

21 ‘‘(B) APPLICABLE PERIOD.—For purposes 

22 of subparagraph (A), the applicable period 

23 means— 


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1 ‘‘(i) the 5-year period beginning on 

2 the date of the later of the initial fractional 

3 contribution, and 

4 ‘‘(ii) each subsequent 5-year period 

5 occurring during the 20-year period de6 scribed in paragraph (1)(A)(iii)(II).’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to contributions and gifts made 

9 after the date of the enactment of this Act. 

10 (d) TRANSITION RULE.—In the case of any addi11 tional contribution (as defined in section 170(o)(4) of the 

12 Internal Revenue Code of 1986) with respect to an initial 

13 fractional contribution (as defined in such section) made 

14 after August 17, 2006, and before the date of the enact15 ment of this Act— 

16 (1) except for purposes of determining the fair 

17 market value of such contribution under section 

18 170(o)(2) of the Internal Revenue Code of 1986 (as 

19 amended by this Act), such contribution shall be 

20 treated as an initial fractional contribution (as so 

21 defined) subject to the amendments made by this 

22 section, and 

23 (2) sections 170(o)(3)(A)(i) and 

24 2522(e)(3)(A)(i) of such Code (as in effect before 

25 the date of the enactment of this Act) shall not 


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1 apply with respect to any prior contribution of an 

2 undivided portion of the taxpayer’s interest in the 

3 property. 

4 SEC. 202. CAPITAL GAINS TAX RATE RELATING TO ART. 

5 (a) EXCLUSION FROM 28-PERCENT RATE GAIN.— 

6 Subparagraph (A) of section 1(h)(5) of the Internal Rev7 enue Code of 1986 is amended by striking ‘‘paragraph 

8 (3)’’ and inserting ‘‘paragraph (2)(A) or (3)’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 this section shall apply to taxable years beginning after 

11 the date of the enactment of this Act. 

12 TITLE III—CREATIVE 

13 COMMUNITY DEVELOPMENT 

14 SEC. 301. ARTIST CORPS. 

15 (a) CORPS.—Section 122(a) of the National and 

16 Community Service Act of 1990 (42 U.S.C. 12572(a)) is 

17 amended by adding at the end the following: 

18 ‘‘(6) ARTIST CORPS.— 

19 ‘‘(A) IN GENERAL.—The recipient may 

20 carry out national service programs through an 

21 Artist Corps that identifies and meets unmet 

22 needs within communities through artistic ac23 tivities such as those described in subparagraph 

24 (B) and improves performance on the indicators 

25 described in subparagraph (C). 


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1 ‘‘(B) ACTIVITIES.—An Artist Corps de2 scribed in this paragraph may carry out activi3 ties such as— 

4 ‘‘(i) providing skilled visual and per5 formance artists to address community 

6 needs through artistic activities in edu7 cation, health care, and therapeutic set8 tings, and in other settings in the commu9 nity; or 

10 ‘‘(ii) providing other artistic activities, 

11 addressing unmet community needs, that 

12 the Corporation may designate, such as 

13 technical assistance for grant writing, mar14 keting, and financial planning. 

15 ‘‘(C) ARTIST CORPS INDICATORS.—The in16 dicators for a corps program described in this 

17 paragraph are— 

18 ‘‘(i) any indicator relating to meeting 

19 critical needs that the Corporation estab20 lishes; or 

21 ‘‘(ii) any local indicator (applicable to 

22 a particular recipient or community and on 

23 which an improvement in performance is 

24 needed) relating to meeting critical needs, 


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1 that is approved by the Corporation or a 

2 State Commission.’’. 

3 (b) CONFORMING AMENDMENTS.—Section 122 of 

4 such Act is amended— 

5 (1) in subsection (b)(3), by striking ‘‘or (5)’’ 

6 and inserting ‘‘(5), or (6)’’; and 

7 (2) in subsection (c)(1), in the matter preceding 

8 subparagraph (A), by striking ‘‘through (5)’’ and in9 serting ‘‘through (6)’’. 

10 SEC. 302. COMMUNITY DEVELOPMENT ENTITIES FOCUSED 

11 ON THE ARTS FOR PURPOSES OF THE NEW 

12 MARKETS TAX CREDIT. 

13 (a) IN GENERAL.—Not later than 1 year after the 

14 date of the enactment of this Act, the Secretary of the 

15 Treasury shall develop and promulgate guidelines for the 

16 creation and operation of qualified community develop17 ment entities— 

18 (1) which will be eligible to be certified as such 

19 by the Secretary of the Treasury under section 

20 45D(c)(1)(C) of the Internal Revenue Code of 1986; 

21 (2) a qualified equity investment in which will, 

22 subject to allocation under section 45D(f) of such 

23 Code, be eligible for the credit under such section 

24 45D; and 


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1 (3) which will focus on investment in and the 

2 development and encouragement of the creative 

3 economy in low-income communities. 

4 (b) DEFINITIONS.—For purposes of this section, any 

5 term used in subsection (a) which is also used in section 

6 45D of the Internal Revenue Code of 1986 has the same 

7 meaning as when used in such section. 

8 SEC. 303. DEMONSTRATION PROGRAM ON SUPPORT OF 

9 LOCAL PROGRAMS THAT PROMOTE CRE10 ATIVE AND PERFORMANCE ARTS IN LOCAL 

11 ECONOMIC PLANNING. 

12 (a) DEMONSTRATION PROGRAM REQUIRED.—The 

13 Secretary of Commerce shall establish a demonstration 

14 program to assess the feasibility and advisability of pro15 viding support to covered programs to promote creative 

16 and performing arts in the economic planning of local gov17 ernments. 

18 (b) COVERED PROGRAMS.—For purposes of the dem19 onstration program required by subsection (a), a covered 

20 program is any program that— 

21 (1) was in effect on the day before the date of 

22 the enactment of this Act; and 

23 (2) the Secretary considers part of an art com24 munity. 

Æ 


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