```

[Journal of the House of Representatives, 1995]
[Wednesday, April 5, 1995 (56), Para 56.12 Recorded Vote]
[Pages 537-547]
[From the U.S. Government Publishing Office, www.gpo.gov]

para.56.12  recorded vote

  A recorded vote by electronic device was ordered in the Committee of 
the Whole on the following amendment in the nature of a substitute 
submitted by Mr. GEPHARDT:

       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--

[[Page 538]]

       ``(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)

[[Page 539]]

     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

[[Page 540]]

     `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''.

[[Page 541]]

     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.''

[[Page 542]]

       (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.--

[[Page 543]]

       (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 in

[[Page 544]]

     come, 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 rechar- acterized 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

[[Page 545]]

     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

[[Page 546]]

     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.

[[Page 547]]

       ``(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.

It was decided in the

Yeas

119

negative

Nays

313
```