I

103D CONGRESS

1ST SESSION H. R. 1216

To amend the Internal Revenue Code of 1986 and the Housing and Community Development Act of 1987 to provide tax incentives for investments

in enterprise zone businesses and domestic businesses.

IN THE HOUSE OF REPRESENTATIVES

MARCH 4, 1993

Mr. ANDREWS of New Jersey introduced the following bill; which was referred

jointly to the Committees on Ways and Means and Banking, Finance and

Urban Affairs

A BILL

To amend the Internal Revenue Code of 1986 and the Housing and Community Development Act of 1987 to provide

tax incentives for investments in enterprise zone businesses and domestic businesses.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Domestic Investment

5 Economic Growth Act’’.
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1 SEC. 2. EXCLUSION FOR GAIN ON INVESTMENTS IN ENTER2 PRISE ZONE BUSINESSES AND DOMESTIC

3 BUSINESSES.

4 (a) IN GENERAL.—Part III of subchapter B of chap5 ter 1 of the Internal Revenue Code of 1986 (relating to

6 items specifically excluded from gross income) is amended

7 by redesignating section 136 as section 137 and by insert8 ing after section 135 the following new section:

9 ‘‘SEC. 136. GAIN ON INVESTMENTS IN ENTERPRISE ZONE

10 BUSINESSES AND DOMESTIC BUSINESSES.

11 ‘‘(a) GENERAL RULE.—Gross income does not in12 clude any qualified investment gain.

13 ‘‘(b) QUALIFIED INVESTMENT GAIN.—For purposes

14 of this section—

15 ‘‘(1) IN GENERAL.—The term ‘qualified invest16 ment gain’ means the eligible percentage of any

17 long-term capital gain properly attributable to any

18 sale or exchange of a qualified investment, other

19 than a sale or exchange to a related person (within

20 the meaning of section 267(b)).

21 ‘‘(2) ELIGIBLE PERCENTAGE.—The term ‘eligi22 ble percentage’ means—

23 ‘‘(A) 100 percent, in the case of a qualified

24 investment with respect to an enterprise zone

25 business or urban enterprise zone, and
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1 ‘‘(B) 50 percent, in the case of any quali2 fied investment not described in subparagraph

3 (A).

4 ‘‘(c) QUALIFIED INVESTMENTS.—For purposes of

5 this section—

6 ‘‘(1) IN GENERAL.—The term ‘qualified invest7 ment’ means any eligible investment, if the holding

8 period of the taxpayer with respect to such invest9 ment is not less than 1 year.

10 ‘‘(2) ELIGIBLE INVESTMENT.—The term ‘eligi11 ble investment’ means the following:

12 ‘‘(A) Any stock, partnership interest, or

13 other ownership interest in an enterprise zone

14 business or domestic business.

15 ‘‘(B) Any real property located entirely

16 within an urban enterprise zone.

17 ‘‘(C) Any fund of a regulated investment

18 company, if all of the investments held by such

19 fund in each year are qualified investments.

20 ‘‘(3) ENTERPRISE ZONE BUSINESS.—The term

21 ‘enterprise zone business’ means any corporation or

22 partnership incorporated or formed in the United

23 States if substantially all of the activities of the cor24 poration or partnership involve the active conduct of
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1 1 or more trades or businesses in an urban enter2 prise zone.

3 ‘‘(4) DOMESTIC BUSINESS.—The term ‘domes4 tic business’ means any corporation or partnership

5 (other than an enterprise zone business) incor6 porated or formed in the United States if—

7 ‘‘(A) not less than 80 percent of the em8 ployees of the corporation or partnership are

9 United States citizens employed within the

10 United States, and

11 ‘‘(B) either—

12 ‘‘(i) the corporation devotes more then

13 25 percent of its annual expenses to pay14 roll, or

15 ‘‘(ii) substantially all of the activities

16 of the corporation or partnership involve

17 the active conduct of 1 or more trades or

18 businesses in the United States.

19 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this section—

21 ‘‘(1) URBAN ENTERPRISE ZONE.—The term

22 ‘urban enterprise zone’ means any area which is des23 ignated after the date of the enactment of this sec24 tion as an enterprise zone under section 701 of the

25 Housing and Community Development Act of 1987
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1 (42 U.S.C. 11501), other than an area described in

2 subsection (a)(2)(B) of such section.

3 ‘‘(2) TREATMENT OF NEW BUSINESSES.—A

4 new corporation or partnership shall be treated as

5 an enterprise zone business or domestic business if

6 such corporation or partnership certifies an intent to

7 comply with the requirements set forth in subsection

8 (c)(3) or (c)(4), as the case may be.

9 ‘‘(e) COORDINATION WITH INVESTMENT SAVINGS

10 ACCOUNT PROVISIONS.—Subsection (a) shall not apply to

11 any amount distributed out of an investment savings ac12 count (within the meaning of section 220(c)).’’

13 (b) CLERICAL AMENDMENT.—The table of sections

14 for part III of subchapter B of chapter 1 of such Code

15 is amended by striking the item relating to section 136

16 and inserting the following:

‘‘Sec. 136. Gain on investments in enterprise zone businesses and

domestic businesses.

‘‘Sec. 137. Cross references to other Acts.’’

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

18 this section shall apply taxable years beginning after the

19 date of the enactment of this Act.

20 SEC. 3. DEDUCTION FOR CONTRIBUTIONS TO INVESTMENT

21 SAVINGS ACCOUNTS.

22 (a) IN GENERAL.—Part VII of subchapter B of chap23 ter 1 of the Internal Revenue Code of 1986 (relating to

24 additional itemized deductions for individuals) is amended
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1 by redesignating section 220 as section 221 and by insert2 ing after section 219 the following new section:

3 ‘‘SEC. 220. CONTRIBUTIONS TO INVESTMENT SAVINGS AC4 COUNTS.

5 ‘‘(a) DEDUCTION ALLOWED.—

6 ‘‘(1) IN GENERAL.—In the case of an individ7 ual, there shall be allowed as a deduction for the

8 taxable year an amount equal to the sum of—

9 ‘‘(A) 50 percent of the qualified contribu10 tions of the individual to an investment savings

11 account for the taxable year, and

‘‘(B) if the individual is not less than 591 12 ⁄2

13 years of age at the end of the taxable year, an

14 amount equal to the sum of—

15 ‘‘(i) 50 percent of the qualified con16 tributions of the individual to an invest17 ment savings account for the 10th preced18 ing taxable year, to the extent such con19 tributions remain in the account, and

20 ‘‘(ii) 50 percent of the qualified con21 tributions of the individual to an invest22 ment savings account for the 20th preced23 ing taxable year, to the extent such con24 tributions remain in the account.
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1 ‘‘(2) MAXIMUM ANNUAL AMOUNT.—The

2 amount allowable as a deduction under paragraph

3 (1) to any individual for a taxable year shall not ex4 ceed $100,000.

5 ‘‘(b) QUALIFIED CONTRIBUTIONS.—For purposes of

6 this section—

7 ‘‘(1) IN GENERAL.—The qualified contributions

8 of an individual for any taxable year shall be the

9 amount equal to the lesser of—

10 ‘‘(A) the individual’s qualified savings in11 crease amount for the taxable year, or

12 ‘‘(B) the contributions made by the indi13 vidual to the investment savings account during

14 the taxable year.

15 ‘‘(2) QUALIFIED SAVINGS INCREASE AMOUNT.—

16 The term ‘qualified savings increase amount’ means

17 the amount (if any) by which—

18 ‘‘(A) the individual’s qualified net worth

19 increase amount, exceeds

20 ‘‘(B) the applicable threshold amount.

21 ‘‘(3) QUALIFIED NET WORTH INCREASE

22 AMOUNT.—

23 ‘‘(A) IN GENERAL.—The term ‘qualified

24 net worth increase amount’ means the amount

25 (if any) by which—
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1 ‘‘(i) qualified net worth on December

2 31 of the taxable year, exceeds

3 ‘‘(ii) qualified net worth on January 1

4 of such taxable year.

5 ‘‘(B) QUALIFIED NET WORTH.—The term

6 ‘qualified net worth’ means net worth, deter7 mined without regard to any portion of the

8 value of property which is in excess of the ad9 justed basis.

10 ‘‘(4) APPLICABLE THRESHOLD AMOUNT.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subparagraph (B), the term ‘applicable thresh13 old amount’ means the national average quali14 fied net worth increase amount determined by

15 the Secretary for the taxable year for the tax

16 rate category of the taxpayer.

17 ‘‘(B) 1ST YEAR.—For taxable years begin18 ning in 1993, the term ‘applicable threshold

19 amount’ means the applicable percentage of the

20 taxpayer’s adjusted gross income, determined in

21 accordance with the following table:

Applicable

‘‘If adjusted gross income is: Percentage:

Not over $13,000 ..................................................................... 0

Over $13,000 but not over $24,000 ........................................ 0

Over $24,000 but not over $36,000 ........................................ 0

Over $36,000 but not over $55,000 ........................................ 5

Over $55,000 but not over $70,000 ........................................ 7

Over $70,000 but not over $100,000 ...................................... 9

Over $100,000 but not over $140,000 .................................... 15
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Applicable

‘‘If adjusted gross income is: Percentage:

Over $140,000 but not over $200,000 .................................... 18

Over $200,000 but not over $500,000 .................................... 20

Over $500,000 but not over $1,000,000 ................................. 25

Over $1,000,000 ...................................................................... 30.

1 ‘‘(5) TIME WHEN CONTRIBUTIONS DEEMED

2 MADE.—A taxpayer shall be deemed to have made a

3 contribution to an investment savings account on the

4 last day of the preceding taxable year if the con5 tribution is made on account of such taxable year

6 and is made not later than the time prescribed by

7 law for filing the return for such taxable year (not

8 including extensions thereof).

9 ‘‘(c) INVESTMENT SAVINGS ACCOUNT.—For pur10 poses of this section, the term ‘investment savings ac11 count’ means a trust created or organized in the United

12 States for the exclusive benefit of an individual and the

13 individual’s beneficiaries, but only if the written governing

14 instrument creating the trust meets the following require15 ments:

16 ‘‘(1) No contribution will be accepted unless it

17 is in cash.

18 ‘‘(2) The trustee is a bank (as defined in sec19 tion 408(n)) or another person who demonstrates to

20 the satisfaction of the Secretary that the manner in

21 which that person will administer the trust will be

22 consistent with the requirements of this section.
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1 ‘‘(3) The trust assets will be invested only in—

2 ‘‘(A) eligible investments (as defined by

3 section 136(c)(2)),

4 ‘‘(B) bonds issued by enterprise zone busi5 ness and domestic business, and

6 ‘‘(C) loans to enterprise zone businesses

7 and domestic businesses.

8 ‘‘(4) The interest of the individual in the bal9 ance of the individual’s account is nonforfeitable.

10 ‘‘(5) The assets of the trust will not be commin11 gled with other property except in a common trust

12 fund or common investment fund.

13 ‘‘(d) TAX TREATMENT OF DISTRIBUTIONS.—

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, any amount distributed out

16 of an investment savings account shall be included

17 in the gross income of the distributee for the taxable

18 year in which the distribution is received.

19 ‘‘(2) AMOUNTS HELD IN ACCOUNT FOR 10

20 YEARS.—Paragraph (1) shall not apply to any dis21 tribution from an investment savings account to the

22 extent attributable to amounts held in the account

23 for at least a 10-year period.

24 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE25 FORE DUE DATE OF RETURN.—Paragraph (1) shall
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1 not apply to the distribution of any contribution paid

2 during a taxable year to an investment savings ac3 count to the extent that such contribution exceeds

4 the amount allowable as a deduction under sub5 section (a) if—

6 ‘‘(A) such distribution is received on or be7 fore the day prescribed by law (including exten8 sions of time) for filing such individual’s return

9 for such taxable year,

10 ‘‘(B) no deduction is allowed under sub11 section (a) with respect to such excess contribu12 tion, and

13 ‘‘(C) such distribution is accompanied by

14 the amount of net income attributable to such

15 excess contribution.

16 Any net income described in subparagraph (C) shall

17 be included in the gross income of the individual for

18 the taxable year in which such excess contribution

19 was made.

20 ‘‘(e) TAX TREATMENT OF ACCOUNTS.—

21 ‘‘(1) EXEMPTION FROM TAX.—An investment

22 savings account is exempt from taxation under this

23 subtitle unless such account has ceased to be an in24 vestment savings account by reason of paragraph

25 (2). Notwithstanding the preceding sentence, any
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1 such account is subject to the taxes imposed by sec2 tion 511 (relating to imposition of tax on unrelated

3 business income of charitable, etc. organizations).

4 ‘‘(2) LOSS OF EXEMPTION OF ACCOUNT WHERE

5 INDIVIDUAL ENGAGES IN PROHIBITED TRANS6 ACTION.—

7 ‘‘(A) IN GENERAL.—If the individual for

8 whose benefit an investment savings account is

9 established or any individual who contributes to

10 such account engages in any transaction prohib11 ited by section 4975 with respect to the ac12 count, the account shall cease to be an invest13 ment savings account as of the first day of the

14 taxable year (of the individual so engaging in

15 such transaction) during which such transaction

16 occurs.

17 ‘‘(B) ACCOUNT TREATED AS DISTRIBUTING

18 ALL ITS ASSETS.—In any case in which any ac19 count ceases to be an investment savings ac20 count by reason of subparagraph (A) as of the

21 first day of any taxable year, paragraph (1) of

22 subsection (d) shall apply as if there was a dis23 tribution on such first day in an amount equal

24 to the fair market value (on such first day) of

25 all assets in the account (on such first day).
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1 ‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU2 RITY.—If, during any taxable year, the individual for

3 whose benefit an investment savings account is es4 tablished, or any individual who contributes to such

5 account, uses the account or any portion thereof as

6 security for a loan, the portion so used shall be

7 treated as distributed to the individual so using such

8 portion.

9 ‘‘(f) ADDITIONAL TAX ON CERTAIN AMOUNTS IN10 CLUDED IN GROSS INCOME.—

11 ‘‘(1) IN GENERAL.—Except as otherwise pro12 vided in this subsection, in the case of any distribu13 tion from an investment savings account, the tax li14 ability of each distributee under this chapter for the

15 taxable year in which the distribution is received

16 shall be increased by an amount equal to 10 percent

17 of the amount of the distribution which is includible

18 in the gross income of such distributee for such tax19 able year.

20 ‘‘(2) QUALIFIED DISTRIBUTIONS FROM

21 AMOUNTS HELD IN ACCOUNT FOR 5 YEARS.—

22 ‘‘(A) IN GENERAL.—Paragraph (1) shall

23 not apply to any qualified distribution from an

24 investment savings account, to the extent at-
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1 tributable to amounts held in the account for at

2 least a 5-year period.

3 ‘‘(B) QUALIFIED DISTRIBUTION.—For

4 purposes of subparagraph (A), the term ‘quali5 fied distribution’ means any distribution re6 ceived from an investment savings account, to

7 the extent used within a reasonable period to

8 pay any of the following expenses:

9 ‘‘(i) HOME PURCHASE EXPENSES.—

10 Expenses relating to the acquisition of a

11 principal residence (within the meaning of

12 section 1034) for the individual for whose

13 benefit the account is established.

14 ‘‘(ii) AUTOMOBILE PURCHASE EX15 PENSES.—Expenses relating to the acquisi16 tion of an automobile for the individual for

17 whose benefit the account is established.

18 ‘‘(iii) EDUCATION EXPENSES.—Quali19 fied higher education expenses (within the

20 meaning of section 135(c)(2)).

21 ‘‘(iv) MEDICAL EXPENSES.—Medical

22 expenses (within the meaning of section

23 72(t)(2)(B)).

24 ‘‘(3) ADDITIONAL EXCEPTIONS.—Paragraph (1)

25 shall not apply if the distribution is made after the
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1 individual for whose benefit the investment savings

2 account is established—

‘‘(A) attains 591 3 ⁄2 years of age, or

4 ‘‘(B) becomes disabled within the meaning

5 of section 72(m)(7) or dies.

6 ‘‘(4) DISQUALIFICATION CASES.—If an amount

7 is includible in the gross income of an individual for

8 a taxable year because such amount is required to

9 be treated as a distribution under paragraph (2) or

10 (3) of subsection (e), such individual’s tax liability

11 under this chapter for such taxable year shall be in12 creased by an amount equal to 10 percent of such

13 amount required to be treated as a distribution and

14 included in the gross income of such individual.

15 ‘‘(g) COMMUNITY PROPERTY LAWS.—This section

16 shall be applied without regard to any community property

17 laws.

18 ‘‘(h) SPECIAL RULES.—For purposes of this sec19 tion—

20 ‘‘(1) ORDERING RULE.—Distributions from an

21 investment savings account shall be treated as hav22 ing been made—

23 ‘‘(A) first from the earliest contribution re24 maining in the account at the time of the dis25 tribution,
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1 ‘‘(B) second from other contributions in

2 the order in which made, and

3 ‘‘(C) third from earnings.

4 ‘‘(2) CUSTODIAL ACCOUNTS.—A custodial ac5 count shall be treated as a trust if the assets of such

6 account are held by a bank (as defined in section

7 408(n)) or another person who demonstrates, to the

8 satisfaction of the Secretary, that the manner in

9 which he will administer the account will be consist10 ent with the requirements of this section, and if the

11 custodial account would, except for the fact that it

12 is not a trust, constitute an investment savings ac13 count described in subsection (c). For purposes of

14 this title, in the case of a custodial account treated

15 as a trust by reason of the preceding sentence, the

16 custodian of such account shall be treated as the

17 trustee thereof.

18 ‘‘(i) REPORTS.—

19 ‘‘(1) IN GENERAL.—The trustee of an invest20 ment savings account shall make such reports re21 garding such account to the Secretary and to the in22 dividual for whose benefit the account is maintained

23 with respect to contributions, distributions, and such

24 other matters as the Secretary may require under

25 regulations. Except as provided in paragraph (2),
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1 the reports required by this subsection shall be filed

2 at such time and in such manner and furnished to

3 such individuals at such time and in such manner as

4 may be required by those regulations.

5 ‘‘(2) FIRST REPORT.—The trustee of an invest6 ment savings account shall make the first report re7 quired under paragraph (1) not later than the expi8 ration of the 3-month period beginning on the date

9 on which the account is established.’’

10 (b) ALLOWANCE OF DEDUCTION IN COMPUTING AD11 JUSTED GROSS INCOME.—Subsection (a) of section 62 of

12 such Code (defining adjusted gross income) is amended

13 by adding at the end the following new paragraph:

14 ‘‘(14) CONTRIBUTIONS TO INVESTMENT SAV15 INGS ACCOUNTS.—The deduction allowed by section

16 220(a).’’

17 (c) CONTRIBUTION NOT SUBJECT TO GIFT TAX.—

18 Section 2503 of such Code (relating to taxable gifts) is

19 amended by adding at the end the following new sub20 section:

21 ‘‘(h) INVESTMENT SAVINGS ACCOUNTS.—Any con22 tribution made by an individual to an investment savings

23 account described in section 220(c) which is allowable as

24 a deduction under section 220 shall not be treated as a

25 transfer of property by gift for purposes of this chapter.’’
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1 (d) TAX ON EXCESS CONTRIBUTIONS.—Section 4973

2 of such Code (relating to tax on excess contributions to

3 individual retirement accounts, certain section 403(b) con4 tracts, and certain individual retirement annuities) is

5 amended—

6 (1) in subsection (a), by striking ‘‘or’’ at the

7 end of paragraph (1), by redesignating paragraph

8 (2) as paragraph (3), and by inserting after para9 graph (1) the following new paragraph:

10 ‘‘(2) an investment savings account (within the

11 meaning of section 220(c)), or’’, and

12 (2) by adding at the end the following new sub13 section:

14 ‘‘(d) EXCESS CONTRIBUTIONS TO INVESTMENT SAV15 INGS ACCOUNTS.—For purposes of this section, in the

16 case of an investment savings account, the term ‘excess

17 contributions’ means the amount by which the amount

18 contributed for the taxable year to the account exceeds

19 the amount allowable as a deduction under section 220

20 for such taxable year. For purposes of this subsection, any

21 contribution which is distributed out of the investment

22 savings account in a distribution to which section

23 220(d)(3) applies shall be treated as an amount not con24 tributed.’’
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1 (e) TAX ON PROHIBITED TRANSACTIONS.—Section

2 4975 of such Code (relating to prohibited transactions)

3 is amended—

4 (1) by adding at the end of subsection (c) the

5 following new paragraph:

6 ‘‘(4) SPECIAL RULE FOR INVESTMENT SAVINGS

7 ACCOUNTS.—An individual for whose benefit an in8 vestment savings account is established and any con9 tributor to such account shall be exempt from the

10 tax imposed by this section with respect to any

11 transaction concerning such account (which would

12 otherwise be taxable under this section) if, with re13 spect to such transaction, the account ceases to be

14 an investment savings account by reason of the ap15 plication of section 220(e)(2)(A) to such account.’’,

16 and

17 (2) in subsection (e)(1), by inserting ‘‘, an in18 vestment savings account described in section

19 220(c),’’ after ‘‘described in section 408(a)’’.

20 (f) FAILURE TO PROVIDE REPORTS ON INVESTMENT

21 SAVINGS ACCOUNTS.—Subsection (a) of section 6693 of

22 such Code (relating to failure to provide reports on indi23 vidual retirement accounts or annuities) is amended by

24 adding at the end the following new sentence: ‘‘The person

25 required by section 220(i) to file a report regarding an
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1 investment savings account at the time and in the manner

2 required by such section shall pay a penalty of $50 for

3 each failure, unless it is shown that such failure is due

4 to reasonable cause.’’

5 (g) ADDITIONAL PENALTIES.—Part I of subchapter

6 B of chapter 68 of such Code (relating to assessable pen7 alties) is amended by adding at the end the following new

8 section:

9 ‘‘SEC. 6714. PROMOTION OF NONQUALIFIED INVESTMENT

10 AS ELIGIBLE FOR DOMESTIC INVESTMENT

11 ECONOMIC GROWTH EXCLUSION OR DEDUC12 TION.

13 ‘‘(a) IMPOSITION OF PENALTY.—If any person—

14 ‘‘(1) makes a statement that an investment or

15 account is eligible for an exclusion under section 136

16 or deduction under section 220, and

17 ‘‘(2) at the time such statement is made, there

18 was no reasonable basis for such statement,

19 such person shall pay a penalty equal to twice the aggre20 gate amount of exclusions and deductions taken by other

21 persons under such sections in reliance on such statement.

22 ‘‘(b) PENALTY IN ADDITION TO OTHER PEN23 ALTIES.—The penalty imposed by subsection (a) shall be

24 in addition to any other penalty provided by law.’’

25 (h) CLERICAL AMENDMENTS.—
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1 (1) The table of sections for part VII of sub2 chapter B of chapter 1 of such Code is amended by

3 striking the item relating to section 220 and insert4 ing the following new items:

‘‘Sec. 220. Contributions to investment savings accounts.

‘‘Sec. 221. Cross reference.’’

5 (2)(A) The section heading for section 4973 of

6 such Code is amended to read as follows:

7 ‘‘SEC. 4973. TAX ON EXCESS CONTRIBUTIONS TO INDIVID8 UAL RETIREMENT ACCOUNTS, INVESTMENT

9 SAVINGS ACCOUNTS, CERTAIN 403(b) CON10 TRACTS, AND CERTAIN INDIVIDUAL RETIRE11 MENT ANNUITIES.’’

12 (B) The table of sections for chapter 43 of such

13 Code is amended by striking the item relating to sec14 tion 4973 and inserting the following new item:

‘‘Sec. 4973. Tax on excess contributions to individual retirement

accounts, investment savings accounts, certain

403(b) contracts, and certain individual retirement

annuities.’’

15 (3)(A) The section heading for section 6693 of

16 such Code is amended to read as follows:
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1 ‘‘SEC. 6693. FAILURE TO PROVIDE REPORTS ON INDIVIDUAL

2 RETIREMENT ACCOUNTS OR ANNUITIES OR

3 ON INVESTMENT SAVINGS ACCOUNTS; PEN4 ALTIES RELATING TO DESIGNATED NON5 DEDUCTIBLE CONTRIBUTIONS.’’

6 (B) The table of sections for subchapter B of

7 chapter 68 of such Code is amended by striking the

8 item relating to section 6693 and inserting the fol9 lowing new item:

‘‘Sec. 6693. Failure to provide reports on individual retirement

accounts or annuities or on investment savings accounts; penalties relating to designated nondeductible contributions.’’

10 (4) The table of sections for part I of sub11 chapter B of chapter 68 of such Code is amended

12 by adding at the end the following new item:

‘‘Sec. 6714. Promotion of nonqualified investment as eligible for

domestic investment economic growth exclusion or

deduction.’’

13 (i) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years beginning after

15 the date of the enactment of this Act.

16 SEC. 4. DESIGNATION OF ENTERPRISE ZONES.

17 Section 701(a)(4)(B) of the Housing and Community

18 Development Act of 1987 (42 U.S.C. 11501(a)(4)(B)) is

19 amended to read as follows:

20 ‘‘(B) TIME LIMITATIONS.—The Secretary

21 shall designate nominated areas as enterprise

22 zones only during the 24-month period begin-
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1 ning on the date of the enactment of the Do2 mestic Investment Economic Growth Act.’’

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