I

104TH CONGRESS

1ST SESSION H. R. 805

To provide for the creation of jobs in America, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 2, 1995

Mr. OWENS (for himself, Mr. SANDERS, Mr. BROWN of California, Mr. CONYERS, Mr. DELLUMS, Mr. HASTINGS of Florida, Mr. HINCHEY, Mrs.

MINK of Hawaii, and Mr. WATT of North Carolina) introduced the following bill; which was referred to the Committee on Ways and Means

and, in addition, to the Committees on Transportation and Infrastructure, Banking and Financial Services, Economic and Educational Opportunities, Commerce, and Appropriations, for a period to be subsequently

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To provide for the creation of jobs in America, and for

other purposes.

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

3 SECTION 1. SHORT TITLE.

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

5 ‘‘Job Creation and Invest in America Act of 1995’’.

6 (b) TABLE OF CONTENTS.—

Sec. 1. Short title.

TITLE I—PHYSICAL CAPITAL INVESTMENT
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Subtitle A—Highways and Mass Transit

Sec. 1001. Highway programs.

Sec. 1002. Federal Transit Act programs.

Subtitle B—Airports

Sec. 1101. Airport improvement program.

Subtitle C—Railroads

Sec. 1201. Local rail freight assistance.

Subtitle D—Water and Sewage Treatment Facilities

Sec. 1301. State water pollution control revolving funds.

Subtitle E—Environmental Restoration

Sec. 1401. Environmental restoration at facilities of the Department of Defense

and Department of Energy.

Subtitle F—Community Development Assistance

CHAPTER 1—COMMUNITY DEVELOPMENT BLOCK GRANTS

Sec. 1501. Authorization of appropriations.

CHAPTER 2—COMMUNITY BANKING AND ECONOMIC EMPOWERMENT ACT

Sec. 1511. Short title.

Sec. 1512. Authority of secretary.

Sec. 1513. Eligible community development lenders.

Sec. 1514. Capital and operating assistance for community development lenders.

Sec. 1515. Requirements of assisted community development lenders.

Sec. 1516. Application and approval for assistance.

Sec. 1517. Assistance agreements.

Sec. 1518. Books, records, and audits.

Sec. 1519. Technical assistance for organizing and operating community development lenders.

Sec. 1520. Relationship to Community Reinvestment Act of 1977.

Sec. 1521. Reports to Congress.

Sec. 1522. Regulations.

Sec. 1523. Definitions.

Sec. 1524. Authorization of appropriations.

Subtitle G—Education Infrastructure

Sec. 1601. Short title.

Sec. 1602. Findings.

Sec. 1603. Purpose.

Sec. 1604. Definitions.

Sec. 1605. Improvement of public elementary and secondary education facilities

program authorized.

Sec. 1606. Applications.

Sec. 1607. Authorized activities.

Sec. 1608. Requirements.

Sec. 1609. Contracts.
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Sec. 1610. Technical assistance.

Sec. 1611. Federal assessment.

Subtitle H—Renewable Energy and Energy Efficiency

Sec. 1701. Renewable energy.

Sec. 1702. Energy efficiency.

TITLE II—HUMAN CAPITAL INVESTMENT

Subtitle A—Job Training

Sec. 2001. Human capital investments in job training.

Subtitle B—Education

Sec. 2101. Educational personnel.

Subtitle C—Head Start

Sec. 2201. Amendments to the Head Start Act.

Subtitle D—Programs Under Public Health Service Act

CHAPTER 1—FUNDING INITIATIVE FOR PROGRAMS PROVIDING HEALTH

SERVICES

Sec. 2301. Funding initiative.

CHAPTER 2—COMMUNITY HEALTH ADVISOR PROGRAM

Sec. 2311. Short title.

Sec. 2312. Findings.

Sec. 2313. Formula grants regarding community health advisor programs.

Sec. 2314. Requirements regarding community health advisor programs.

Sec. 2315. Additional agreements.

Sec. 2316. Application for assistance; State plan.

Sec. 2317. Determination of amount of allotment.

Sec. 2318. Quality assurance; cost-effectiveness.

Sec. 2319. Evaluations; technical assistance.

Sec. 2320. Rule of construction regarding programs of indian health service.

Sec. 2321. Definitions.

Sec. 2322. Funding.

TITLE III—AMENDMENTS OF INTERNAL REVENUE CODE OF 1986

Subtitle A—Reduction in Employee Payroll Taxes; Credit for First-Time

Homebuyers

Sec. 3001. Credit for portion of social security taxes.

Sec. 3002. Credit for purchase of principal residence by first-time homebuyer.

Subtitle B—Revenue Increases

Sec. 3101. Stock transfer excise tax.

Sec. 3102. Repeal of preferential rate of tax on capital gains.

Sec. 3103. Repeal of credit for foreign taxes.

Sec. 3104. Repeal of deferral of income of controlled foreign corporations.

Sec. 3105. Use of formulaic approach under section 482.
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Sec. 3106. Repeal of increase in basis of property acquired from a decedent.

Sec. 3107. Phasein of capital gains tax on inherited property.

Sec. 3108. Additional exclusion of gain on sale of principal residence acquired

from a decedent.

TITLE IV—APPROPRIATIONS

Sec. 4001. Appropriations.

Sec. 4002. Designation as emergency requirement.

1 TITLE I—PHYSICAL CAPITAL

2 INVESTMENT

3 Subtitle A—Highways and Mass

4 Transit

5 SEC. 1001. HIGHWAY PROGRAMS.

6 (a) Section 1003 of the Intermodal Surface Trans7 portation Efficiency Act of 1991 (105 Stat. 1918–1922)

8 is amended by adding at the end the following:

9 ‘‘(d) ADDITIONAL FUNDING FROM HTF.—In addi10 tion to amounts made available by subsection (a), for the

11 purpose of carrying out the provisions of title 23, United

12 States Code, the following sums are authorized to be ap13 propriated out of the Highway Trust Fund (other than

14 the Mass Transit Account):

15 ‘‘(1) INTERSTATE MAINTENANCE PROGRAM.—

16 For the interstate maintenance program

17 $3,500,000,000 for each of fiscal years 1995 and

18 1996.

19 ‘‘(2) SURFACE TRANSPORTATION PROGRAM.—

20 For the surface transportation program
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1 $3,000,000,000 for each of fiscal years 1995 and

2 1996.

3 ‘‘(3) BRIDGE PROGRAM.—For the bridge pro4 gram $3,500,000,000 for each of fiscal years 1995

5 and 1996.’’.

6 (b) NON-APPLICABILITY OF OBLIGATION CEILING.—

7 Funds authorized by the amendment made by subsection

8 (a) shall not be subject to any obligation limitation.

9 SEC. 1002. FEDERAL TRANSIT PROGRAMS.

10 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

11 5338 of title 49, United States Code, is amended by add12 ing at the end the following:

13 ‘‘(m) ADDITIONAL FUNDING.—

14 ‘‘(1) FORMULA GRANT PROGRAMS.—

15 ‘‘(A) FROM THE TRUST FUND.—There

16 shall be available from the Mass Transit Ac17 count of the Highway Trust Fund to carry out

18 section 5311 of this title $125,000,000 for each

19 of fiscal years 1995 and 1996. Such sums shall

20 remain available until expended.

21 ‘‘(B) FROM GENERAL FUNDS.—There are

22 authorized to be appropriated to carry out sec23 tions 5307 and 5336 of this title $825,000,000

24 for each of fiscal years 1995 and 1996. Such

25 sums shall remain available until expended.
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1 ‘‘(2) DISCRETIONARY GRANTS AND LOANS.—

2 There shall be available from the Mass Transit Ac3 count of the Highway Trust Fund only to carry out

4 section 5309 of this title $650,000,000 for each of

5 fiscal years 1995 and 1996. Such sums shall remain

6 available until expended.’’.

7 (b) CONTRACT AUTHORITY.—Section 5338(k) of

8 such title is amended—

9 (1) in paragraph (1) by striking ‘‘or (e)’’ and

10 inserting ‘‘(e), (m)(1)(A), or (m)(2)’’; and

11 (2) in paragraph (2) by striking ‘‘or (b)(2)’’

12 and inserting ‘‘, (b)(2), or (m)(1)(B)’’.

13 (c) SPECIAL NEEDS OF ELDERLY PERSONS AND

14 PERSONS WITH DISABILITIES.—Section 5338(j)(1) of

15 such title is amended by striking ‘‘subsection (a)(2)’’ and

16 inserting ‘‘subsections (a)(2) and (m)(1)(B)’’.

17 (d) NON-APPLICABILITY OF OBLIGATION CEILING.—

18 Funds authorized by the amendment made by subsection

19 (a) shall not be subject to any obligation limitation.

20 Subtitle B—Airports

21 SEC. 1101. AIRPORT IMPROVEMENT PROGRAM.

22 Section 48103 of title 49, United States Code, is

23 amended by adding at the end the following: ‘‘In addition

24 to amounts made available by the preceding sentence,

25 there shall be available to the Secretary for such grants
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1 (including grants for airport noise compatibility planning

2 under such section 47505(a)(2)) and for carrying out

3 noise compatibility programs or parts thereof under such

4 section 47504(c) $1,000,000,000 for each of fiscal years

5 1995 and 1996.’’.

6 Subtitle C—Railroads

7 SEC. 1201. LOCAL RAIL FREIGHT ASSISTANCE.

8 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

9 22108(a)(1) of title 49, United States Code, is amended

10 by adding at the end the following:

11 ‘‘(C) $1,000,000,000 for the fiscal year ending

12 September 30, 1995.

13 ‘‘(D) $1,000,000,000 for the fiscal year ending

14 September 30, 1996.’’.

15 (b) LIMITATION ON APPROPRIATIONS.—Section

16 22108(a)(3) of such title is amended by striking ‘‘after

17 September 30, 1994’’ and inserting ‘‘after September 30,

18 1996’’.

19 Subtitle D—Water and Sewage

20 Treatment Facilities

21 SEC. 1301. STATE WATER POLLUTION CONTROL REVOLV22 ING FUNDS.

23 Section 607 of the Federal Water Pollution Control

24 Act (33 U.S.C. 1387) is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (4);

3 (2) by striking the period at the end of para4 graph (5) and inserting a semicolon; and

5 (3) by adding at the end the following:

6 ‘‘(6) $4,000,000,000 for fiscal year 1995; and

7 ‘‘(7) $4,000,000,000 for fiscal year 1996.’’.

8 Subtitle E—Environmental

9 Restoration

10 SEC. 1401. ENVIRONMENTAL RESTORATION AT FACILITIES

11 OF THE DEPARTMENT OF DEFENSE AND DE12 PARTMENT OF ENERGY.

13 (a) AUTHORIZATION OF APPROPRIATIONS.—

14 (1) DEPARTMENT OF DEFENSE.—There is

15 hereby authorized to be appropriated to the Sec16 retary of Defense for each of fiscal years 1995 and

17 1996 for environmental restoration the following:

18 (A) $1,000,000,000, for deposit into the

19 Defense Environmental Restoration Account es20 tablished in section 2703 of title 10, United

21 States Code.

22 (B) $1,000,000,000, for deposit into the

23 Department of Defense Base Closure Account

24 1990 established in section 2906(a) of the Na25 tional Defense Authorization Act for Fiscal
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1 Year 1991 (Public Law 101–510; 10 U.S.C.

2 2687 note), of which—

3 (i) $500,000,000 shall be used to

4 carry out environmental restoration activi5 ties at military installations selected in

6 1993 for closure or realignment under the

7 Defense Base Closure and Realignment

8 Act of 1990 (part A of title XXIX of Pub9 lic Law 101–510; 10 U.S.C. 2687 note);

10 and

11 (ii) $500,000,000 shall be used to

12 carry out environmental restoration activi13 ties at military installations selected in

14 1995 for closure or realignment under

15 such Act.

16 (2) DEPARTMENT OF ENERGY.—There is ap17 propriated to the Secretary of Energy for each of

18 fiscal years 1995 and 1996 for environmental res19 toration and waste management at defense nuclear

20 facilities the following:

21 (A) $1,000,000,000, for environmental res22 toration.

23 (B) $750,000,000, for waste management.

24 (C) $250,000,000, for corrective activities.
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1 (b) APPROPRIATIONS FOR FISCAL YEAR 1995.—The

2 following sums are appropriated, out of any money in the

3 Treasury not otherwise appropriated, for the fiscal year

4 ending September 30, 1995, to implement the provisions

5 of this Act, namely:

6 DEPARTMENT OF DEFENSE

7 OPERATION AND MAINTENANCE

8 ENVIRONMENTAL RESTORATION, DEFENSE

9 For the Department of Defense, for deposit into the

10 Defense Environmental Restoration Account established

11 in section 2703 of title 10, United States Code,

12 $1,000,000,000, to remain available until transferred.

13 MILITARY CONSTRUCTION

14 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART II

15 For deposit into the Department of Defense Closure

16 Account 1990 established by section 2906(a) of the Na17 tional Defense Authorization Act for Fiscal Year 1991

18 (Public Law 101–510; 10 U.S.C. 2687 note),

19 $500,000,000, to be available solely for environmental res20 toration and to remain available until expended.

21 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART III

22 For deposit into the Department of Defense Closure

23 Account 1990 established by section 2906(a) of the Na24 tional Defense Authorization Act for Fiscal Year 1991

25 (Public Law 101–510; 10 U.S.C. 2687 note),
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1 $500,000,000, to be available solely for environmental res2 toration and to remain available until expended.

3 DEPARTMENT OF ENERGY

4 DEFENSE ENVIRONMENTAL RESTORATION AND WASTE

5 MANAGEMENT

6 For Department of Energy expenses necessary for

7 atomic energy defense environmental restoration and

8 waste management activities, $2,000,000,000, to remain

9 available until expended: Provided, That of the funds ap10 propriated herein, $1,000,000,000 shall be available for

11 environmental restoration, $750,000,000 shall be available

12 for waste management, and $250,000,000 shall be avail13 able for corrective activities.

14 (c) APPROPRIATIONS FOR FISCAL YEAR 1996.—The

15 following sums are appropriated, out of any money in the

16 Treasury not otherwise appropriated, for the fiscal year

17 ending September 30, 1996, to implement the provisions

18 of this Act, namely:

19 DEPARTMENT OF DEFENSE

20 OPERATION AND MAINTENANCE

21 ENVIRONMENTAL RESTORATION, DEFENSE

22 For the Department of Defense, for deposit into the

23 Defense Environmental Restoration Account established

24 in section 2703 of title 10, United States Code,

25 $1,000,000,000, to remain available until transferred.
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1 MILITARY CONSTRUCTION

2 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART II

3 For deposit into the Department of Defense Closure

4 Account 1990 established by section 2906(a) of the Na5 tional Defense Authorization Act for Fiscal Year 1991

6 (Public Law 101–510; 10 U.S.C. 2687 note),

7 $500,000,000, to be available solely for environmental res8 toration and to remain available until expended.

9 BASE REALIGNMENT AND CLOSURE ACCOUNT, PART III

10 For deposit into the Department of Defense Closure

11 Account 1990 established by section 2906(a) of the Na12 tional Defense Authorization Act for Fiscal Year 1991

13 (Public Law 101–510; 10 U.S.C. 2687 note),

14 $500,000,000, to be available solely for environmental res15 toration and to remain available until expended.

16 DEPARTMENT OF ENERGY

17 DEFENSE ENVIRONMENTAL RESTORATION AND WASTE

18 MANAGEMENT

19 For Department of Energy expenses necessary for

20 atomic energy defense environmental restoration and

21 waste management activities, $2,000,000,000, to remain

22 available until expended: Provided, That of the funds ap23 propriated herein, $1,000,000,000 shall be available for

24 environmental restoration, $750,000,000 shall be available

25 for waste management, and $250,000,000 shall be avail26 able for corrective activities.
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1 (d) DESIGNATION AS EMERGENCY REQUIREMENT.—

2 The entire amount appropriated under this section is des3 ignated by Congress as an emergency requirement pursu4 ant to section 251(b)(2)(D)(i) of the Balanced Budget and

5 Emergency Deficit Control Act of 1985.

6 Subtitle F—Community

7 Development Assistance

8 CHAPTER 1—COMMUNITY DEVELOPMENT

9 BLOCK GRANTS

10 SEC. 1501. AUTHORIZATION OF APPROPRIATIONS.

11 For assistance under section 106 of the Housing and

12 Community Development Act of 1974, there is authorized

13 to be appropriated, in addition to any amounts authorized

14 under section 103 of such Act, $2,000,000,000 for fiscal

15 year 1995 and $2,000,000,000 for fiscal year 1996.

16 CHAPTER 2—COMMUNITY BANKING AND

17 ECONOMIC EMPOWERMENT ACT

18 SEC. 1511. SHORT TITLE.

19 This chapter may be cited as the ‘‘Community Bank20 ing and Economic Empowerment Act’’.

21 SEC. 1512. AUTHORITY OF SECRETARY.

22 (a) IN GENERAL.—To make credit and credit-related

23 services available to low-income families and others not

24 adequately served by traditional lending institutions and

25 promote community development, economic development,
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1 and revitalization of low-income neighborhoods, the Sec2 retary of Housing and Urban Development shall provide,

3 to the extent amounts are provided in appropriation

4 Acts—

5 (1) assistance under section 1514 to community

6 development lenders and other eligible entities that

7 have submitted applications under section 1516 that

8 have been approved by the Secretary and have en9 tered into agreements with the Secretary under sec10 tion 1517; and

11 (2) technical assistance under section 1519 to

12 assist in organizing and operating community devel13 opment lenders.

14 (b) CONSULTATION.—The Secretary of Housing and

15 Urban Development shall consult with the Secretary of the

16 Treasury in developing, implementing, and carrying out

17 this chapter, and in providing assistance to community de18 velopment lenders under section 1514.

19 SEC. 1513. ELIGIBLE COMMUNITY DEVELOPMENT LEND20 ERS.

21 (a) IN GENERAL.—Applications for assistance under

22 section 1514 may be submitted only by the following enti23 ties:

24 (1) COMMUNITY DEVELOPMENT LENDERS.—

25 Any corporation, partnership, organization, agency,
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1 person, or other entity (which may include for-profit

2 and nonprofit entities, community development cor3 porations, microenterprise organizations, community

4 organizations, and other entities and persons) that—

5 (A) is organized for the purposes described

6 in subsection (b); and

7 (B) is not a depository institution (as such

8 term is defined in section 3(c) of the Federal

9 Deposit Insurance Act) or a credit union, or an

10 affiliate or subsidiary of a depository institution

11 or credit union (including community develop12 ment credit unions, savings and loan associa13 tions, and other depository institutions).

14 (2) ELIGIBLE ENTITIES ESTABLISHING COMMU15 NITY DEVELOPMENT LENDERS.—Any corporation,

16 partnership, organization, agency, person, or other

17 entity that—

18 (A) is engaged in organizing or establish19 ing a community development financial institu20 tion; and

21 (B) is not a depository institution (as such

22 term is defined in section 3(c) of the Federal

23 Deposit Insurance Act) or a credit union, or an

24 affiliate or subsidiary of a depository institution

25 or credit union (including community develop-
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1 ment credit unions, savings and loan associa2 tions, and other depository institutions).

3 (b) PURPOSE.—To be eligible to receive assistance

4 under section 1514, a community development lender ap5 plying for such assistance (or to be established by the eligi6 ble entity applying for such assistance) shall have among

7 its principal purposes making credit and credit-related

8 services available to low-income families and in low-income

9 neighborhoods and promoting the development and revital10 ization of low-income neighborhoods. The community de11 velopment lender shall carry out such purpose by making

12 loans to individuals, families, businesses, organizations,

13 and other entities and conducting such other activities and

14 services relating to making loans (such as loan counseling

15 and servicing) as the lender considers appropriate. Such

16 loans may include mortgage loans, loans for housing devel17 opment, rehabilitation, and weatherization, business devel18 opment and assistance loans, personal loans, operating

19 loans, construction loans, loans for community and

20 economic development activities, and other repayable

21 assistance.

22 (c) GOVERNANCE.—To be eligible to receive assist23 ance under section 1514, a community development lender

24 applying for such assistance (or to be established by the
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1 eligible entity applying for such assistance) shall be gov2 erned by a board of directors that—

3 (1) is solely responsible for determining policy

4 for the community development lender with respect

5 to management and operations, lending activities,

6 loan standards and implementation, employment,

7 asset management, and any other issues; and

8 (2) includes among its members a significant

9 number of members who are individuals meeting the

10 requirements of any of subparagraphs (A) through

11 (D), who shall include—

12 (A) individuals who are members of low-in13 come families;

14 (B) individuals who are residents of the

15 low-income neighborhood served by the lender;

16 (C) individuals who are experienced in pro17 viding financial assistance or financial advice to

18 low-income individuals or residents, businesses,

19 or organizations in low-income neighborhoods;

20 and

21 (D) individuals who have significant expe22 rience in serving the low-income neighborhood

23 served by the lender, the community in which

24 such neighborhood is located, or any other low25 income neighborhood.
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1 SEC. 1514. CAPITAL AND OPERATING ASSISTANCE FOR

2 COMMUNITY DEVELOPMENT LENDERS.

3 (a) AUTHORITY.—The Secretary may provide assist4 ance under this section to community development lenders

5 and eligible entities establishing community development

6 lenders, for the purposes under subsection (b).

7 (b) PURPOSES.—Assistance under this section may

8 be used only as provided in the assistance agreement

9 under section 1517 for the community development lender

10 or eligible entity and only for the following purposes:

11 (1) FEASIBILITY STUDIES.—To carry out stud12 ies to determine the feasibility of establishing a pro13 gram to make loans for the purposes under section

14 1513(b) within a particular low-income neighbor15 hood.

16 (2) CAPITAL ASSISTANCE.—To provide capital

17 for the community development lender—

18 (A) to establish or supplement amounts

19 available for loans for the purposes under sec20 tion 1513(b);

21 (B) to provide credit enhancement for

22 loans for the purposes under section 1513(b);

23 (C) to establish or supplement capital re24 serves of the lender; and

25 (D) to carry out other activities, as the

26 Secretary may provide.
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1 (3) OPERATING COSTS.—To provide amounts to

2 cover operating costs of the community development

3 lender, including marketing and management activi4 ties, business planning and counseling services, staff

5 training, planning costs, costs relating to establish6 ing the community development lender or changing

7 the activities or management of a financial institu8 tion or other organization or entity to include com9 munity development lending activities.

10 (c) OTHER TERMS.—The Secretary may establish

11 any terms and conditions of assistance under this section

12 that the Secretary considers appropriate to carry out the

13 purposes of this subtitle, including limitations on the

14 amount of assistance provided to any community develop15 ment lender or eligible entity, limitations on the number

16 of applications that may be approved for any single com17 munity development lender or eligible entity, and require18 ments and limitations for the amounts and timing of the

19 disbursement of assistance.

20 (d) NON-FEDERAL FUNDS REQUIREMENT.—The

21 Secretary may not provide assistance under this section

22 to any eligible entity for the establishment of a community

23 development lender in an amount in excess of 9 times the

24 amount that the entity certifies, as the Secretary shall re25 quire, that the entity will contribute from non-Federal
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1 sources to the community development lender established

2 with amounts provided under this section.

3 SEC. 1515. REQUIREMENTS OF ASSISTED COMMUNITY DE4 VELOPMENT LENDERS.

5 (a) PROHIBITION OF DIRECT ASSISTANCE.—A com6 munity development lender that receives assistance under

7 section 1514 (or established by an eligible entity that re8 ceives such assistance) may not provide amounts to any

9 person from assistance received under such section in the

10 form of a grant or nonrepayable advance or on any other

11 nonrepayable basis, during the assistance agreement term

12 established by the assistance agreement for the lender

13 under section 1517.

14 (b) LOW-INCOME FAMILY REQUIREMENTS.—

15 (1) REQUIREMENT.—In each calendar year dur16 ing the applicable assistance agreement term, a com17 munity development lender that receives assistance

18 under section 1514 (or established by an eligible en19 tity that receives such assistance) shall make loans

20 under section 1513(b) benefiting low-income fami21 lies—

22 (A) in a number that is not less than 50

23 percent of the total number of loans made by

24 the lender during such year; and
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1 (B) in an amount such that the sum of the

2 principal amounts of such loans is not less than

3 50 percent of the sum of the principal amounts

4 of all loans made by the lender during such

5 year.

6 (2) DETERMINATION OF BENEFIT.—

7 (A) DIRECT BENEFIT.—A loan shall be

8 considered to benefit a low-income family for

9 purposes of paragraph (1) if the loan—

10 (i) is made to such a family;

11 (ii) is made for an activity that is car12 ried out in a low-income neighborhood and

13 for providing services for such families;

14 (iii) is made for providing facilities de15 signed for the use predominantly by such

16 families; or

17 (iv) is made for an activity that in18 volves employment of persons, a majority

19 of whom are members of such families.

20 (B) ACTIVITIES OF GENERAL BENEFIT.—

21 In any case in which an activity assisted with

22 a loan is designed to serve an area generally

23 and is clearly designed to meet identified needs

24 of low-income families in such area, such loan

25 or activity shall be considered to benefit low-in-
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1 come families for purposes of paragraph (1) to

2 the extent that the area is a low-income neigh3 borhood.

4 (C) HOUSING.—A loan for the acquisition,

5 construction, or rehabilitation of property to

6 provide housing shall be considered to benefit

7 low-income families for purposes of paragraph

8 (1) only to the extent that such housing, upon

9 completion, is occupied by low-income families.

10 (c) LOW-INCOME NEIGHBORHOOD REQUIRE11 MENTS.—In each calendar year during the applicable as12 sistance agreement term, a community development lender

13 that receives assistance under section 1514 (or established

14 by an eligible entity that receives such assistance) shall

15 make loans under section 1513(b) for facilities or activities

16 that serve the low-income neighborhood served by the

17 lender—

18 (1) in a number that is not less than 50 percent

19 of the total number of loans made by the lender dur20 ing such year; and

21 (2) in an amount such that the sum of the prin22 cipal amounts of such loans is not less than 50 per23 cent of the sum of the principal amounts of all loans

24 made by the lender during such year.
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1 (d) EMPLOYMENT PLAN.—During the applicable as2 sistance agreement term, a community development lender

3 that receives assistance under section 1514 (or established

4 by an eligible entity that receives such assistance) shall

5 establish and comply with a written employment plan

6 under this subsection. The Secretary shall, by regulation,

7 require that each employment plan under this subsection

8 set forth a policy for hiring employees of the community

9 development lender that—

10 (1) furthers the purposes of this subtitle by

11 providing employment opportunities in the neighbor12 hood served by the community development lender

13 for residents of the neighborhood; and

14 (2) gives preference in hiring to—

15 (A) individuals who are members of low-in16 come families residing in the neighborhood

17 served by the community development lender;

18 and

19 (B) individuals who were formerly em20 ployed in positions at any office or branch of a

21 depository institution, credit union, or other fi22 nancial institution that is or was located in the

23 neighborhood served by the community develop24 ment lender and who are not employed in such

25 positions because of the closing or reorganiza-
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1 tion of the office, branch, or institution, or be2 cause of the elimination of such positions or

3 any decrease in compensation paid for such

4 positions.

5 (e) RESERVE REQUIREMENTS.—

6 (1) MAINTENANCE OF RESERVE.—During the

7 applicable assistance agreement term, a community

8 development lender that receives assistance under

9 section 1514 (or established by an eligible entity

10 that receives such assistance) shall maintain, at all

11 times, a reserve against losses on loans and any

12 other losses in the amount determined under para13 graph (2).

14 (2) ESTABLISHMENT OF REQUIREMENTS.—The

15 Secretary shall, by regulation, establish reserve

16 amounts to be maintained by community develop17 ment lenders taking into consideration the purposes

18 of such lenders, the nature of lending engaged in by

19 such lenders, the size and amount of business of

20 such lenders, the need for such lending in the com21 munities and low-income neighborhoods served by

22 such lenders, and any other factors the Secretary

23 considers appropriate.

24 (3) REPLENISHMENT.—If at any time during

25 the applicable assistance agreement term, the
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1 amount reserved by a community development lender

2 under this subsection is less than the amount re3 quired to be reserved under the regulations issued

4 pursuant to paragraph (2), the Secretary may take

5 such actions as the Secretary may, by regulation,

6 provide that are consistent with the purposes of this

7 subtitle, including withholding any assistance

8 amounts to be provided to the lender under the

9 agreement under section 1517 but not yet disbursed

10 and requiring the lender to replenish the reserve by

11 regular contributions in the amounts determined by

12 the Secretary.

13 (f) STAFF.—During the applicable assistance agree14 ment term, a community development lender that receives

15 assistance under section 1514 (or established by an eligi16 ble entity that receives assistance under such section) shall

17 maintain personnel qualified and capable of conducting

18 the activities described under section 1513(b) and the

19 other activities of the lender relating to community devel20 opment, as the Secretary may require.

21 SEC. 1516. APPLICATION AND APPROVAL FOR ASSISTANCE.

22 (a) REQUIREMENT.—The Secretary may provide as23 sistance under section 1514 only to community develop24 ment lenders and eligible entities establishing community

25 development lenders that have submitted applications
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1 under this section to the Secretary that have been ap2 proved under subsection (d).

3 (b) TIME AND MANNER.—The Secretary shall estab4 lish requirements regarding the submission of applications

5 under this section, which shall include requirements for

6 the time and manner of submission.

7 (c) CONTENTS.—An application under this section

8 shall contain the following information:

9 (1) COMMUNITY DEVELOPMENT LENDER.—A

10 description of—

11 (A) the existing community development fi12 nancial institution to be assisted; or

13 (B) in the case of an eligible entity submit14 ting the application for assistance, the commu15 nity development lender to be established by the

16 eligible entity, the existing relationship between

17 the eligible entity and the community develop18 ment lender to be established, and any continu19 ing relationship that will exist between the

20 eligible entity and the community development

21 lender.

22 (2) LOW-INCOME NEIGHBORHOOD SERVED.—

23 Identification and a description of the low-income

24 neighborhood in which the community development

25 lender is, or is to be, located and conduct its prin-
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1 cipal operations and a description of the existing

2 availability of credit and credit-related services in

3 such neighborhood.

4 (3) TYPES OF BUSINESS.—A description of the

5 types of business engaged in, or to be engaged in,

6 by the community development lender and of the

7 need for such business in the neighborhood served

8 by the community development lender.

9 (4) BOARD OF DIRECTORS AND OPERATION.—

10 In the case of an application by an existing commu11 nity development lender, a description of the board

12 of directors of the community development lender

13 and the structure of the management and operations

14 of the community development lender.

15 (5) FINANCIAL EXPERTISE.—In the case of an

16 application by an existing community development

17 lender, a description of any lending or financial ex18 pertise or experience of the members of the board of

19 directors of the community development lender and

20 the managers or employees of the lender.

21 (6) FINANCIAL HISTORY.—In the case of an ap22 plication by an existing community development

23 lender, any financial information regarding the com24 munity development lender that the Secretary con25 siders necessary in determining whether to provide
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1 assistance to the community development lender, in2 cluding information regarding any history of compli3 ance with the requirements of section 1515.

4 (7) REGULATION.—Identification of any Fed5 eral, State, and local laws, ordinances, and regula6 tions under which the financial operations of the

7 community development lender are, or are to be,

8 subject to the supervision, approval, regulation, or

9 insuring of any agency or other instrumentality of

10 the Federal Government or the State or local gov11 ernment and identification of the agency or instru12 mentality.

13 (8) NEW COMMUNITY DEVELOPMENT LEND14 ERS.—In the case of an application by an eligible

15 entity for assistance for the establishment of a com16 munity development lender, any financial, organiza17 tional, or other information that the Secretary con18 siders necessary in determining whether to provide

19 such assistance.

20 (9) ASSISTANCE.—A description of the amount

21 of assistance for which the community development

22 lender or eligible entity is applying and a description

23 of the purposes for which such assistance will be

24 used.
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1 (10) EMPLOYMENT PLAN.—An employment

2 plan in accordance with the regulations issued under

3 section 1515(d).

4 (11) COMPLIANCE WITH REQUIREMENTS.—A

5 description of the actions to be taken by the commu6 nity development lender (or the eligible entity estab7 lishing the community development lender) to ensure

8 compliance with the requirements under section

9 1515.

10 (12) OTHER.—Any other information the Sec11 retary considers appropriate to carry out, and en12 sure compliance with, the provisions of this subtitle.

13 (d) REVIEW AND APPROVAL.—

14 (1) REVIEW.—The Secretary shall promptly re15 view each application submitted under this section.

16 (2) MINIMUM STANDARDS FOR APPROVAL.—

17 The Secretary may approve an application under

18 this section for assistance only if the Secretary de19 termines, based on the information contained in an

20 application, that—

21 (A) the lender will operate in accordance

22 with the requirements of this chapter and in a

23 financially safe and sound manner; and

24 (B) the assistance is necessary and appro25 priate to facilitate the provision of credit and
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1 credit-related services in the neighborhood

2 served by the lender to low-income families and

3 others not adequately served by traditional

4 lending institutions.

5 (3) SELECTION CRITERIA.—The Secretary shall

6 approve applications under this subsection based on

7 competitive selection criteria, which the Secretary

8 shall establish by regulation.

9 (4) NOTIFICATION.—The Secretary shall

10 promptly notify each applicant of the approval or

11 disapproval of the applicant’s application. In the

12 case of any disapproval, such notification shall in13 clude a statement of the reasons for the disapproval

14 and of the availability of technical assistance under

15 section 1519.

16 SEC. 1517. ASSISTANCE AGREEMENTS.

17 (a) REQUIREMENT.—The Secretary may not provide

18 assistance under section 1514 for an application for such

19 assistance approved under section 1516 unless the com20 munity development lender or eligible entity submitting

21 the application enters into a written agreement with the

22 Secretary under this section.

23 (b) CONTENTS.—An agreement under this section

24 shall provide the following:
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1 (1) NEIGHBORHOOD SERVED.—A delineation of

2 the boundaries of the low-income neighborhood with3 in which the community development lender shall be

4 located and in which the lender shall conduct its

5 principal operations.

6 (2) COMPLIANCE WITH REQUIREMENTS.—That

7 the community development lender shall comply with

8 the requirements under section 1515.

9 (3) SAFE AND SOUND OPERATION.—That the

10 community development lender shall operate in a fi11 nancially safe and sound manner.

12 (4) BOOKS AND RECORDS.—That the commu13 nity development lender shall operate and maintain

14 books and records in accordance with the regulations

15 issued by the Secretary under section 1518 and will

16 provide the Secretary with access to such books and

17 records for purposes of determining the compliance

18 of the lender with the requirements of this subtitle

19 and the provisions of the agreement under this

20 section.

21 (5) PERFORMANCE STANDARDS AND SANC22 TIONS.—Standards for the performance and finan23 cial operation of the community development lender

24 appropriate for the particular lender, including

25 standards relating to the lending volume, portfolio
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1 performance, personnel development, service to the

2 neighborhood served by the lender, and sanctions for

3 failure to comply with such standards.

4 (6) REPORTS.—That the community develop5 ment lender (or the eligible entity establishing the

6 community development lender) shall submit reports

7 to the Secretary including such information, at such

8 times, and in such manner, as required by the Sec9 retary and provided in the agreement.

10 (7) ASSISTANCE.—The amount of assistance to

11 be provided to the community development lender

12 (or eligible entity establishing the community devel13 opment lender), the purposes under section 1514(b)

14 for which such assistance will be used, and the tim15 ing and terms of the disbursement of such assist16 ance.

17 (8) OTHER CONDITIONS.—That the community

18 development lender shall comply with any other writ19 ten conditions (which shall be contained in the

20 agreement) that the Secretary considers appropriate

21 to carry out the purposes of this subtitle.

22 (9) PERIOD OF COMPLIANCE.—The period dur23 ing which the community development lender shall

24 comply with the provisions of the agreement under
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1 this section, which shall not be shorter than 12

2 months in duration.

3 (c) FEDERAL OR OTHER REGULATION OF LEND4 ER.—An agreement under this section may not be con5 strued to annul, alter, affect, or exempt the community

6 development lender receiving assistance pursuant to the

7 agreement (or established by the eligible entity receiving

8 such assistance) from complying with any Federal, State,

9 or local laws, ordinances, and regulations applicable to the

10 financial and other operations of community development

11 lender or with any orders or rulings of any agency or in12 strumentality of the Federal Government or the State or

13 local government responsible for the supervision, approval,

14 regulation, or insuring of the community development

15 lender.

16 SEC. 1518. BOOKS, RECORDS, AND AUDITS.

17 (a) BOOKS AND RECORDS.—During the applicable

18 assistance agreement term, a community development

19 lender that receives assistance under section 1514 (or es20 tablished by an eligible entity that receives such assist21 ance) shall maintain the books and records of the lender

22 in the manner that the Secretary shall, by regulation,

23 require.

24 (b) EXAMINATIONS AND AUDITS.—
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1 (1) RECERTIFICATION.—The Secretary shall,

2 not less than once each year during the applicable

3 assistance agreement term, conduct an examination

4 of the books, records, and financial accounts and

5 transactions of each community development lender

6 receiving assistance under section 1514 (or estab7 lished by an eligible entity receiving assistance under

8 such section) for the purpose of determining compli9 ance of the lender with this subtitle and the provi10 sions of the agreement.

11 (2) OTHER.—During the applicable assistance

12 agreement term, the Secretary may conduct any

13 other examinations and audits of such a community

14 development lender and its accounts and trans15 actions that the Secretary considers appropriate to

16 determine the condition of the lender and compliance

17 with the provisions of the assistance agreement.

18 SEC. 1519. TECHNICAL ASSISTANCE FOR ORGANIZING AND

19 OPERATING COMMUNITY DEVELOPMENT

20 LENDERS.

21 (a) ASSISTANCE TO ESTABLISH COMMUNITY DEVEL22 OPMENT LENDERS.—The Secretary shall carry out a pro23 gram under this subsection to provide technical assistance

24 in establishing community development financial institu25 tions, which shall include—
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1 (1) educating organizations, financial institu2 tions, governmental agencies, and other entities and

3 persons in low-income neighborhoods and elsewhere

4 regarding the need for, capabilities, functions, and

5 organization of community development lenders;

6 (2) educating and training organizations, finan7 cial institutions, and other entities and persons in

8 organizing community development lenders and ap9 plying for assistance under this subtitle for estab10 lishment of community development lenders;

11 (3) assisting entities and persons interested in

12 establishing community development lenders in iden13 tifying community lending needs and meeting the

14 application requirements and preparing applications

15 under this subtitle; and

16 (4) assisting community development lenders

17 and eligible entities whose applications have been

18 disapproved under section 1516(d) to submit approv19 able applications for assistance under section 1514.

20 (b) ASSISTANCE FOR OPERATING COMMUNITY DE21 VELOPMENT LENDERS.—The Secretary shall carry out a

22 program under this subsection to provide technical assist23 ance to community development lenders, which shall in24 clude—
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1 (1) education and training regarding manage2 ment and operation of the lenders, including design3 ing and utilizing lending practices to target credit to

4 low-income families and neighborhoods, complying

5 with financial and accounting standards under the

6 agreement for the lender under section 1517, and

7 implementing effective asset management and fund

8 development techniques;

9 (2) collecting and disseminating information

10 from various community development lenders re11 garding successful management and operation tech12 niques, lending practices, and lending activities; and

13 (3) training personnel of lenders to meet re14 quirements under section 1515(f).

15 (c) PROVISION OF ASSISTANCE.—The Secretary may

16 provide technical assistance under this section directly or

17 through public or private organizations pursuant to con18 tracts with such organizations or grants to such organiza19 tions.

20 (d) ADMINISTRATION.—The Secretary may provide

21 for making technical assistance under this section avail22 able to community development lenders and eligible enti23 ties that receive assistance under section 1514 pursuant

24 to a request for such assistance in an application under

25 section 1516, approval of the application, and the inclu-
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1 sion of terms in the assistance agreement under section

2 1517 providing for such assistance.

3 SEC. 1520. RELATIONSHIP TO COMMUNITY REINVESTMENT

4 ACT OF 1977.

5 Section 807(b) of the Community Reinvestment Act

6 of 1977 (12 U.S.C. 2906(b)) is amended by adding at the

7 end the following new paragraph:

8 ‘‘(3) COORDINATION WITH COMMUNITY BANK9 ING AND ECONOMIC EMPOWERMENT ACT.—No regu10 lated financial institution may receive a rating of

11 ‘outstanding record of meeting community credit

12 needs’ or ‘satisfactory record of meeting community

13 credit needs’ solely on the basis of loans to or invest14 ments in community development lenders.’’.

15 SEC. 1521. REPORTS TO CONGRESS.

16 The Secretary shall submit a report to the Congress

17 not later than July 1 of each year in which the Secretary

18 provides assistance under section 1514 to community de19 velopment lenders or eligible entities, which shall de20 scribe—

21 (1) the assistance provided under such section,

22 the purposes for which such assistance will be used,

23 the neighborhoods to be served by the community

24 development lenders assisted, and the activities of

25 community development lenders assisted; and
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1 (2) any technical assistance provided under sec2 tion 1519 by the Secretary.

3 SEC. 1522. REGULATIONS.

4 The Secretary of Housing and Urban Development,

5 jointly with the Secretary of the Treasury, shall issue any

6 regulations necessary to carry out this subtitle.

7 SEC. 1523. DEFINITIONS.

8 For purposes of this chapter:

9 (1) The term ‘‘assistance agreement’’ means an

10 agreement under section 1517 between the Secretary

11 and a community development lender or eligible en12 tity receiving assistance under section 1514.

13 (2) The term ‘‘assistance agreement term’’

14 means the period established by an assistance agree15 ment during which the community development lend16 er that receives assistance under section 1514 pursu17 ant to the agreement (or established by the eligible

18 entity that receives such assistance) shall comply

19 with the provision of the agreement.

20 (3) The term ‘‘community development finan21 cial institution’’ means a financial institution de22 scribed in section 1513(a)(1) that meets the require23 ments under subsections (b) and (c) of section 1513.

24 (4) The term ‘‘community development lender’’

25 means a community development financial institu-
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1 tion that meets the requirements under subsections

2 (b) and (c) of section 1513.

3 (5) The term ‘‘eligible entity’’ means any entity

4 described in section 1513(a)(2).

5 (6) The term ‘‘low-income family’’ means any

6 individual or family whose income does not exceed

7 80 percent of the median income for the area, as de8 termined by the Secretary with adjustments for

9 smaller and larger families; except that the Sec10 retary may establish income ceilings higher or lower

11 than 80 percent of the median for the area on the

12 basis of any findings by the Secretary that such

13 variations are necessary because of unusually high

14 or low prevailing incomes.

15 (7) The term ‘‘low-income neighborhood’’

16 means any area within a city, county, town, town17 ship, parish, village, or other general purpose sub18 division of a State—

19 (A) that has a continuous boundary; and

20 (B) in which not less than 20 percent of

21 the residents are members of low-income fami22 lies.

23 (8) The term ‘‘low-income neighborhood served

24 by a community development lender’’ means the low25 income neighborhood identified in an application
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1 under section 1516 and an assistance agreement

2 under section 1517 as the area in which the commu3 nity development lender that receives assistance pur4 suant to such application and agreement (or estab5 lished by the eligible entity that receives such assist6 ance) will be located and conduct its principal oper7 ations.

8 (9) The term ‘‘Secretary’’ means the Secretary

9 of Housing and Urban Development.

10 SEC. 1524. AUTHORIZATION OF APPROPRIATIONS.

11 There is authorized to be appropriated for each of

12 fiscal years 1995 and 1996—

13 (1) $800,000,000 for assistance under section

14 1514; and

15 (2) $200,000,000 for providing technical assist16 ance under section 1519.

17 Subtitle G—Education

18 Infrastructure

19 SEC. 1601. SHORT TITLE.

20 This subtitle may be cited as the ‘‘Education Infra21 structure Act of 1994’’.

22 SEC. 1602. FINDINGS.

23 The Congress finds that—

24 (1) improving the quality of public elementary

25 and secondary school libraries, media centers, and
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1 facilities will help our Nation meet the National

2 Education Goals;

3 (2) Federal, State, and local funding for the re4 pair, renovation, alteration and construction of pub5 lic elementary and secondary school libraries, media

6 centers, and facilities has not adequately reflected

7 need; and

8 (3) the challenges facing our Nation’s public el9 ementary and secondary schools require the con10 certed and collaborative efforts of all levels of gov11 ernment and all sectors of the community.

12 SEC. 1603. PURPOSE.

13 It is the purpose of this subtitle to help our Nation

14 meet the National Education Goals through the repair,

15 renovation, alteration and construction of public elemen16 tary and secondary school libraries, media centers, and fa17 cilities, used for academic or vocational instruction.

18 SEC. 1604. DEFINITIONS.

19 For purposes of this subtitle—

20 (1) the term ‘‘alteration’’ refers to any change

21 to an existing property for use for a different pur22 pose or function;

23 (2) the term ‘‘construction’’ refers to the erec24 tion of a building, structure, or facility, including the

25 concurrent installation of equipment, site prepara-
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1 tion, associated roads, parking, and utilities, which

2 provides area or cubage not previously available, in3 cluding—

4 (A) freestanding structures, additional

5 wings, or floors, enclosed courtyards or

6 entryways, and any other means to provide usa7 ble program space that did not previously exist;

8 and

9 (B) the complete replacement of an exist10 ing facility;

11 (3) the term ‘‘eligible local educational agency’’

12 means a local educational agency, as such term is

13 defined in section 1471 of the Elementary and Sec14 ondary Education Act of 1965, which demonstrates

15 in the application submitted under section 1607 that

16 such agency—

17 (A) has urgent repair, renovation, alter18 ation and construction needs for its public ele19 mentary or secondary school libraries, media

20 centers, and facilities, used for academic or vo21 cational instruction; and

22 (B) serves large numbers or percentages of

23 disadvantaged students;
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1 (4) the term ‘‘renovation’’ refers to any change

2 to an existing property to allow its more efficient use

3 within such property’s designated purpose;

4 (5) the term ‘‘repair’’ refers to the restoration

5 of a failed or failing real property facility, compo6 nent, or a building system to such a condition that

7 such facility, component, or system may be used ef8 fectively for its designated purpose, if, due to the na9 ture or extent of the deterioration or damage to such

10 facility, component, or system, such deterioration or

11 damage cannot be corrected through normal mainte12 nance; and

13 (6) the term ‘‘Secretary’’, unless otherwise

14 specified, means the Secretary of Education.

15 SEC. 1605. IMPROVEMENT OF PUBLIC ELEMENTARY AND

16 SECONDARY EDUCATION FACILITIES PRO17 GRAM AUTHORIZED.

18 (a) PROGRAM AUTHORITY.—From amounts appro19 priated pursuant to the authority of subsection (b) in any

20 fiscal year, the Secretary shall award grants to eligible

21 local educational agencies having applications approved

22 under section 1606 to carry out the authorized activities

23 described in section 1607.

24 (b) AUTHORIZATION OF APPROPRIATIONS.—There

25 are to be appropriated $3,000,000,000 for fiscal year
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1 1995, and such sums as may be necessary for each of the

2 fiscal years 1996 through 2004, to carry out this subtitle.

3 SEC. 1606. APPLICATIONS.

4 (a) CONTENTS REQUIRED.—Each eligible local edu5 cational agency desiring to receive a grant under this sub6 title shall submit an application to the Secretary. Each

7 such application shall—

8 (1) contain an assurance that such application

9 was developed in consultation with parents and

10 classroom teachers; and

11 (2) include—

12 (A) a description of each architectural,

13 civil, structural, mechanical, electrical, or tele14 phone line, deficiency to be corrected with funds

15 provided under this subtitle, including the prior16 ity for the repair of the deficiency;

17 (B) a description of the corrective action to

18 be supported with funds provided under this

19 subtitle;

20 (C) a cost estimate of the proposed correc21 tive action;

22 (D) an identification of the total amount

23 and percentage of such agency’s budget used in

24 the preceding fiscal year for the maintenance,

25 repair, renovation, alteration, and construction
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1 of public elementary and secondary school li2 braries, media centers, and facilities;

3 (E) a description of how such agency plans

4 to maintain the repair, renovation, alteration,

5 or construction supported with funds provided

6 under this subtitle;

7 (F) a description of the extent to which the

8 repair, renovation, alteration, or construction

9 will help the Secretary meet the goals described

10 in section 1609(1)(A); and

11 (G) such other information as the Sec12 retary may reasonably require.

13 (b) PRIORITIES IN SELECTION OF APPLICATIONS.—

14 In selecting applications for the award of grant funds

15 under this subtitle, the Secretary shall give priority to

16 local educational agencies that—

17 (1) are seeking funds for the repair, renovation,

18 alteration, or construction of facilities that are the

19 oldest for which funds are sought under this sub20 title;

21 (2) have the highest number of facilities with

22 health and safety hazards from one or more of the

23 following sources: asbestos, lead, radon, plumbing,

24 electrical wiring; and
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1 (3) serve areas with high rates of unemploy2 ment.

3 SEC. 1607. AUTHORIZED ACTIVITIES.

4 Each eligible local educational agency receiving a

5 grant under this subtitle shall use such grant funds to help

6 our Nation meet the National Education Goals through

7 the repair, renovation, alteration, and construction of a

8 public elementary or secondary school library, media cen9 ter, or facility, used for academic or vocational instruction,

10 including—

11 (1) inspection of such library, center, or facility;

12 (2) repairing such library, center, or facility

13 that poses a health or safety risk to students;

14 (3) upgrading of and alteration to such library,

15 center, or facility in order to accommodate new in16 structional technology;

17 (4) meeting the requirements of section 504 of

18 the Rehabilitation Act of 1973 and the Americans

19 with Disabilities Act of 1990;

20 (5) removal or containment of severely hazard21 ous material such as asbestos, lead, and radon using

22 a cost-effective method;

23 (6) installation or upgrading of school security

24 and communications systems;

25 (7) energy conservation;
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1 (8) meeting Federal, State, or local codes relat2 ed to fire, air, light, noise, waste disposal, building

3 height, or other codes passed since the initial con4 struction of such library, center, or facility; and

5 (9) replacing an old library, center, or facility

6 that is most cost-effectively torn down rather than

7 renovated.

8 SEC. 1608. REQUIREMENTS.

9 (a) SPECIAL RULES.—

10 (1) MAINTENANCE OF EFFORT.—An eligible

11 local educational agency may receive a grant under

12 this subtitle for any fiscal year only if the Secretary

13 finds that either the combined fiscal effort per stu14 dent or the aggregate expenditures of that agency

15 and the State with respect to the provision of free

16 public education by such local educational agency for

17 the preceding fiscal year was not less than 90 per18 cent of such combined fiscal effort or aggregate ex19 penditures for the fiscal year for which the deter20 mination is made.

21 (2) SUPPLEMENT NOT SUPPLANT.—An eligible

22 local educational agency shall use funds received

23 under this subtitle only to supplement the amount of

24 funds that would, in the absence of such Federal

25 funds, be made available from non-Federal sources
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1 for the repair and construction of school facilities

2 used for educational purposes, and not to supplant

3 such funds.

4 (b) GENERAL LIMITATIONS.—

5 (1) REAL PROPERTY.—No part of any grant

6 funds under this subtitle shall be used for the acqui7 sition of any interest in real property.

8 (2) MAINTENANCE.—Nothing in this subtitle

9 shall be construed to authorize the payment of main10 tenance costs in connection with any projects con11 structed in whole or in part with Federal funds pro12 vided under this subtitle.

13 (3) ENVIRONMENTAL SAFEGUARDS.—All

14 projects carried out with Federal funds provided

15 under this subtitle shall comply with all relevant

16 Federal, State, and local environmental laws and

17 regulations.

18 (4) APPLICABILITY OF LAWS REGARDING INDI19 VIDUALS WITH DISABILITIES.—Sections 504 and

20 505 of the Rehabilitation Act of 1973 and the Amer21 icans with Disabilities Act of 1990 shall apply to

22 projects carried out with Federal funds provided

23 under this subtitle.
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1 SEC. 1609. CONTRACTS.

2 If a project assisted under this subtitle will be carried

3 out pursuant to a contract, the following limitations shall

4 apply:

5 (1) MINORITY PARTICIPATION.—The Secretary

6 shall establish—

7 (A) goals for the participation of small

8 business concerns as contractors or subcontrac9 tors that meet or exceed the governmentwide

10 goals established pursuant to section 15(g)(1)

11 of the Small Business Act (15 U.S.C.

12 644(g)(1)) for the participation of such con13 cerns in contracts supported with funds under

14 this subtitle (and subcontracts under such con15 tracts); and

16 (B) an evaluation process for such partici17 pation that gives significant weight to the goals

18 described in subparagraph (A).

19 (2) DAVIS-BACON.—All laborers and mechanics

20 employed by contractors or subcontractors in the

21 performance of any contract and subcontract for the

22 repair, renovation, alteration, or construction, in23 cluding painting and decorating, of any building or

24 work that is financed in whole or in part by a grant

25 under this subtitle, shall be paid wages not less than

26 those determined by the Secretary of Labor in ac-
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1 cordance with the Act of March 3, 1931 (commonly

2 known as the Davis-Bacon Act); as amended (40

3 U.S.C. 276a–276a–5). The Secretary of Labor shall

4 have the authority and functions set forth in reorga5 nization plan of No. 14 of 1950 (15 FR 3176; 64

6 Stat. 1267) and section 2 of the Act of June 1,

7 1934 (commonly known as the Copeland Anti-Kick8 back Act) as amended (40 U.S.C. 276c, 48 Stat.

9 948).

10 SEC. 1610. TECHNICAL ASSISTANCE.

11 The comprehensive regional centers established under

12 section 2203 of the Elementary and Secondary Education

13 Act of 1965 may provide assistance in the repair, renova14 tion, alteration, and construction of public elementary or

15 secondary school libraries, media centers, or facilities to

16 eligible local educational agencies receiving assistance

17 under this subtitle.

18 SEC. 1611. FEDERAL ASSESSMENT.

19 The Secretary shall reserve not more than 1 percent

20 of funds appropriated pursuant to the authority of section

21 1605(b)—

22 (1) to collect such data as the Secretary deter23 mines necessary at the school, local, and State levels;

24 and
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1 (2) to conduct studies and evaluations, includ2 ing national studies and evaluations, in order to—

3 (A) monitor the progress of projects sup4 ported with funds provided under this subtitle;

5 and

6 (B) evaluate the state of American public

7 elementary and secondary school libraries,

8 media centers, and facilities; and

9 (3) to report to the Congress by July 1, 1997,

10 regarding the findings of the studies and evaluations

11 described in paragraph (2).

12 Subtitle H—Renewable Energy and

13 Energy Efficiency

14 SEC. 1701. RENEWABLE ENERGY.

15 In addition to any amounts otherwise authorized to

16 be appropriated, there are authorized to be appropriated

17 to the Secretary of Energy $250,000,000 for fiscal year

18 1995 and $250,000,000 for fiscal year 1996 for renewable

19 energy research, development, and demonstration pro20 grams described in section 4(c) of the Renewable Energy

21 and Efficiency Technology Competitiveness Act of 1989

22 (42 U.S.C. 12003(c)).

23 SEC. 1702. ENERGY EFFICIENCY.

24 (a) FEDERAL ENERGY EFFICIENCY FUND.—Section

25 546(b)(4) of the National Energy Conservation Policy Act
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1 (42 U.S.C. 8256(b)(4)) is amended by striking

2 ‘‘$50,000,000 for fiscal year 1995’’ and inserting in lieu

3 thereof ‘‘$200,000,000 for fiscal year 1995, $125,000,000

4 for fiscal year 1996’’.

5 (b) NEW TECHNOLOGY DEMONSTRATION PRO6 GRAM.—Section 549(f) of the National Energy Conserva7 tion Policy Act (42 U.S.C. 8258a(f)) is amended by strik8 ing ‘‘, 1994, and 1995’’ and inserting in lieu thereof ‘‘and

9 1994, $300,000,000 for fiscal year 1995, and

10 $375,000,000 for fiscal year 1996’’.

11 TITLE II—HUMAN CAPITAL

12 INVESTMENT

13 Subtitle A—Job Training

14 SEC. 2001. HUMAN CAPITAL INVESTMENTS IN JOB TRAIN15 ING.

16 (a) ESTABLISHMENT OF ALLIED HEALTH PROFES17 SIONAL JOB TRAINING PROGRAM UNDER THE JOB

18 TRAINING PARTNERSHIP ACT.—

19 (1) IN GENERAL.—Part D of title IV of the Job

20 Training Partnership Act (29 U.S.C. 1731 et seq.)

21 is amended by adding at the end the following new

22 section:
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1 ‘‘SEC. 457. ALLIED HEALTH PROFESSIONAL JOB TRAINING

2 PROGRAM.

3 ‘‘(a) AUTHORIZATION.—The Secretary shall provide

4 grants to institutions of higher education to establish pro5 grams to provide job training assistance to at-risk youths

6 and long-term welfare recipients to enable such youths and

7 recipients to become allied health professionals.

8 ‘‘(b) APPLICATION.—The Secretary may provide a

9 grant to an institution of higher education under sub10 section (a) only if such institution submits to the Sec11 retary an application which contains such information as

12 the Secretary may reasonably require.

13 ‘‘(c) USE OF AMOUNTS.—An institution of higher

14 education shall use amounts received from a grant under

15 subsection (a) to establish a program to provide job train16 ing assistance to at-risk youths and long-term welfare re17 cipients to enable such youths and recipients to become

18 allied health professionals. In carrying out such program,

19 the institution of higher education shall meet the following

20 requirements:

21 ‘‘(1) The institution will consult with represent22 atives from labor unions in carrying out the program

23 and will allow such representatives to assist such in24 stitution in the recruitment and orientation of indi25 viduals for the program.
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1 ‘‘(2) The institution will disseminate informa2 tion relating to the program in areas of substantial

3 unemployment where the need for increased access

4 to health care services is the greatest.

5 ‘‘(3) In accepting individuals into the program,

6 the institution will give priority to individuals from

7 underrepresented populations.

8 ‘‘(4) To the extent practicable, the training of

9 an individual in the program will not exceed 2 years.

10 ‘‘(5) To the extent practicable, the institution

11 will provide individuals in the program with services

12 leading to guaranteed job placement in the allied

13 health profession.

14 ‘‘(d) DEFINITIONS.—For purposes of this section, the

15 following definitions apply:

16 ‘‘(1) ALLIED HEALTH PROFESSIONALS.—The

17 term ‘allied health professionals’ has the meaning

18 given such term in section 799(5) of the Public

19 Health Service Act (42 U.S.C. 295p(5)).

20 ‘‘(2) FAMILY ADJUSTED INCOME.—

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

22 subparagraph (C), the term ‘family adjusted in23 come’ means, with respect to a family, the sum

24 of the adjusted incomes (as defined in subpara25 graph (B)) for all members of the family.
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1 ‘‘(B) ADJUSTED INCOME.—In subpara2 graph (A), the term ‘adjusted income’ means,

3 with respect to an individual, adjusted gross in4 come (as defined in section 62(a) of the Inter5 nal Revenue Code of 1986)—

6 ‘‘(i) determined without regard to sec7 tions 135, 162(l), 911, 931, and 933 of

8 such Code, and

9 ‘‘(ii) increased by the amount of inter10 est received or accrued by the individual

11 which is exempt from tax.

12 ‘‘(C) PRESENCE OF ADDITIONAL DEPEND13 ENTS.—At the option of an individual, a family

14 may include (and not be required to separate

15 out) the income of other individuals who are

16 claimed as dependents of the family for income

17 tax purposes, but such individuals shall not be

18 counted as part of the family for purposes of

19 determining the size of the family.

20 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.—

21 The term ‘institution of higher education’ means an

22 institution of higher education (as such term is de23 fined in section 481 of the Higher Education Act of

24 1965 (20 U.S.C. 1088)) which—
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1 ‘‘(A) continues to meet the eligibility and

2 certification requirements under title IV of such

3 Act (20 U.S.C. 1070 et seq.); and

4 ‘‘(B) has the capacity to train individuals

5 to become allied health professionals, as deter6 mined by the Secretary.

7 ‘‘(4) LONG-TERM WELFARE RECIPIENT DE8 FINED.—The term ‘long-term welfare recipient’

9 means an individual who, in accordance with rules

10 established by the Secretary, is identified as—

11 ‘‘(A) having been substantially unemployed

12 over a consecutive period of at least 2 years im13 mediately preceding the date of application for

14 the program;

15 ‘‘(B) having, during such period, been re16 ceiving (or a member of a household that has

17 been receiving) benefits under one or more Fed18 eral or State welfare programs identified under

19 such rules, including the AFDC program, the

20 SSI program, and medicaid; and

21 ‘‘(C) having family adjusted income that

22 does not exceed 200 percent of the applicable

23 poverty level for the class of enrollment in24 volved.
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1 ‘‘(5) UNDERREPRESENTED POPULATIONS.—

2 The term ‘underrepresented populations’ includes

3 minorities, individuals with disabilities, the poor, and

4 persons with limited English proficiency.’’.

5 (2) AUTHORIZATION OF APPROPRIATIONS.—

6 Section 3(c) of such Act (29 U.S.C. 1502(c)) is

7 amended—

8 (A) in paragraph (1), by striking ‘‘There

9 are authorized’’ and inserting ‘‘Except as pro10 vided in paragraph (6), there are authorized’’;

11 and

12 (B) by adding at the end the following new

13 paragraph:

14 ‘‘(6) In addition to amounts authorized to be appro15 priated under paragraph (1), there are authorized to be

16 appropriated to carry out section 457 $2,000,000,000 for

17 each of the fiscal years 1995 and 1996 and such sums

18 as may be necessary for fiscal year 1997.’’.

19 (3) CONFORMING AMENDMENT.—The table of

20 contents of such Act is amended by inserting after

21 the item relating to section 456 the following new

22 item:

‘‘Sec. 457. Allied health professional job training program.’’.

23 (4) EFFECTIVE DATE.—The amendments made

24 by this subsection shall take effect on October 1,
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1 1994, or the date of the enactment of this Act,

2 whichever occurs later.

3 (b) INCREASE IN AUTHORIZATION OF APPROPRIA4 TIONS FOR CERTAIN YOUTH JOB TRAINING PROGRAMS.—

5 (1) YOUTH FAIR CHANCE PROGRAM.—Section

6 3(c)(3) of the Job Training Partnership Act (29

7 U.S.C. 1502(c)(3)) is amended by striking

8 ‘‘$100,000,000’’ and all that follows through

9 ‘‘1997’’ and inserting ‘‘$700,000,000 for each of the

10 fiscal years 1995 and 1996 and such sums as may

11 be necessary for fiscal year 1997’’.

12 (2) YOUTHBILD PROGRAM.—Section 402 of the

13 Homeownership and Opportunity Through HOPE

14 Act (42 U.S.C. 12870) is amended—

15 (A) by redesignating subsection (c) as sub16 section (d); and

17 (B) by inserting after subsection (b) the

18 following new subsection:

19 ‘‘(c) YOUTHBILD PROGRAM.—

20 ‘‘(1) IN GENERAL.—There are authorized to be

21 appropriated for activities authorized under subtitle

22 D $400,000,000 for each of the fiscal years 1995

23 and 1996 and such sums as may be necessary for

24 fiscal year 1997.
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1 ‘‘(2) AVAILABILITY.—Amounts appropriated

2 pursuant to the authorization of appropriations

3 under paragraph (1) are authorized to remain avail4 able until expended.’’.

5 Subtitle B—Education

6 SEC. 2101. EDUCATIONAL PERSONNEL.

7 (a) ADULT EDUCATION.—Section 313 of the Adult

8 Education Act is amended by striking ‘‘1995’’ and insert9 ing ‘‘and $760,000,000 for each of the fiscal years 1995

10 and 1996’’.

11 (b) ELEMENTARY AND SECONDARY EDUCATION.—

12 Section 1502 of the Elementary and Secondary Education

13 Act is amended—

14 (1) by striking ‘‘and’’; and

15 (2) by inserting ‘‘$2,456,000,000 for each of

16 the fiscal years 1995 and 1996,’’ after ‘‘1993,’’.

17 Subtitle C—Head Start

18 SEC. 2201. AMENDMENTS TO THE HEAD START ACT.

19 Section 629(a) of the Head Start Act (42 U.S.C.

20 9834(a)) is amended—

21 (1) by striking ‘‘1993, and’’ and inserting

22 ‘‘1993,’’, and

23 (2) by inserting ‘‘, $11,660,000 for fiscal year

24 1995, and $15,660,000 for fiscal year 1996’’ before

25 the period at the end.
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1 Subtitle D—Programs Under

2 Public Health Service Act

3 CHAPTER 1—FUNDING INITIATIVE FOR

4 PROGRAMS PROVIDING HEALTH

5 SERVICES

6 SEC. 2301. FUNDING INITIATIVE.

7 (a) COMMUNITY HEALTH CENTERS.—In addition to

8 any other authorizations of appropriations that are avail9 able for the purpose of carrying out section 330 of the

10 Public Health Service Act, there are authorized to be ap11 propriated for such purpose $200,000,000 for fiscal year

12 1995.

13 (b) MIGRANT HEALTH CENTERS.—In addition to any

14 other authorizations of appropriations that are available

15 for the purpose of carrying out section 329 of the Public

16 Health Service Act, there are authorized to be appro17 priated for such purpose $100,000,000 for fiscal year

18 1995.

19 (c) HEALTH CARE FOR THE HOMELESS.—In addi20 tion to any other authorizations of appropriations that are

21 available for the purpose of carrying out section 340 of

22 the Public Health Service Act, there are authorized to be

23 appropriated for such purpose $100,000,000 for fiscal

24 year 1995.
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1 (d) PREVENTIVE SERVICES REGARDING TUBER2 CULOSIS.—In addition to any other authorizations of ap3 propriations that are available for the purpose of carrying

4 out section 317E of the Public Health Service Act (as

5 added by section 301 of Public Law 103–183; 107 Stat.

6 2233), there are authorized to be appropriated for such

7 purpose $150,000,000 for fiscal year 1995.

8 (e) PREVENTIVE SERVICES REGARDING BREAST AND

9 CERVICAL CANCER.—In addition to any other authoriza10 tions of appropriations that are available for the purpose

11 of carrying out the program under section 1501 of the

12 Public Health Service Act, there are authorized to be ap13 propriated for such purpose $120,000,000 for fiscal year

14 1995.

15 (f) PREVENTIVE SERVICES REGARDING LEAD EXPO16 SURE.—In addition to any other authorizations of appro17 priations that are available for the purpose of carrying out

18 section 317A of the Public Health Service Act, there are

19 authorized to be appropriated for such purpose

20 $16,000,000 for fiscal year 1995.

21 (g) PREVENTIVE SERVICES REGARDING HIV DIS22 EASE.—In addition to any other authorizations of appro23 priations that are available for the purpose of carrying out

24 under the Public Health Service Act programs to prevent

25 infection with the human immunodeficiency virus, there
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1 are authorized to be appropriated for such purpose

2 $40,000,000 for fiscal year 1995.

3 (h) IMMUNIZATION PROGRAM.—In addition to any

4 other authorizations of appropriations that are available

5 for the purpose of carrying out the immunization program

6 under section 317(j) of the Public Health Service Act,

7 there are authorized to be appropriated for such purpose

8 $200,000,000 for fiscal year 1995.

9 (i) CANCER REGISTRIES.—In addition to any other

10 authorizations of appropriations that are available for the

11 purpose of carrying out the program for cancer registries

12 under section 399H of the Public Health Service Act,

13 there are authorized to be appropriated for such purpose

14 $13,000,000 for fiscal year 1995.

15 (j) PREVENTIVE SERVICES REGARDING PROSTATE

16 CANCER.—In addition to any other authorizations of ap17 propriations that are available for the purpose of carrying

18 out section 317D of the Public Health Service Act, there

19 are authorized to be appropriated for such purpose

20 $4,000,000 for fiscal year 1995.

21 (k) COMPREHENSIVE SCHOOL HEALTH EDU22 CATION.—In addition to any other authorizations of ap23 propriations that are available for the purpose of carrying

24 out under the Public Health Service Act a program to pro25 vide comprehensive health education to school children,
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1 there are authorized to be appropriated for such purpose

2 $40,000,000 for fiscal year 1995.

3 (l) PREVENTION AND CONTROL OF SEXUALLY

4 TRANSMITTED DISEASES.—In addition to any other au5 thorizations of appropriations that are available for the

6 purpose of carrying out section 318 of the Public Health

7 Service Act, there are authorized to be appropriated for

8 such purpose $10,000,000 for fiscal year 1995.

9 (m) PREVENTION AND CONTROL OF DIABETES.—In

10 addition to any other authorizations of appropriations that

11 are available for the purpose of carrying out under the

12 Public Health Service Act a program for the prevention

13 and control of diabetes, there are authorized to be appro14 priated for such purpose $20,000,000 for fiscal year 1995.

15 (n) CHILD DAY CARE HEALTH AND SAFETY.—In ad16 dition to any other authorizations of appropriations that

17 are available for the purpose of carrying out under the

18 Public Health Service Act a program for child day care

19 health and safety, there are authorized to be appropriated

20 for such purpose $5,000,000 for fiscal year 1995.

21 (o) PREVENTION AND CONTROL OF INJURIES.—In

22 addition to any other authorizations of appropriations that

23 are available for the purpose of carrying out part J of

24 title III of the Public Health Service Act, there are author-
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1 ized to be appropriated for such purpose $5,000,000 for

2 fiscal year 1995.

3 (p) ASTHMA.—In addition to any other authoriza4 tions of appropriations that are available for the purpose

5 of carrying out under the Public Health Service Act a pro6 gram regarding asthma, there are authorized to be appro7 priated for such purpose $5,000,000 for fiscal year 1995.

8 (q) ENVIRONMENTAL HEALTH.—

9 (1) URGENT THREAT TO PUBLIC HEALTH.—In

10 addition to any other authorizations of appropria11 tions that are available for the purpose of carrying

12 out under the Public Health Service Act a program

13 to respond to urgent environmental threats to the

14 public health, there are authorized to be appro15 priated for such purpose $32,000,000 for fiscal year

16 1995.

17 (2) ACTIVITIES REGARDING BORDER WITH

18 MEXICO.—In addition to any other authorizations of

19 appropriations that are available for the purpose of

20 carrying out under the Public Health Service Act a

21 program to provide environmental services regarding

22 the health of individuals in the United States in the

23 vicinity of the international border with Mexico,

24 there are authorized to be appropriated for such

25 purpose $10,000,000 for fiscal year 1995.
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1 (r) BLOCK GRANTS FOR COMMUNITY MENTAL

2 HEALTH SERVICES.—In addition to any other authoriza3 tions of appropriations that are available for the purpose

4 of carrying out subpart I of part B of title XIX of the

5 Public Health Service Act, there are authorized to be ap6 propriated for such purpose $50,000,000 for fiscal year

7 1995.

8 (s) BLOCK GRANTS FOR PREVENTION AND TREAT9 MENT OF SUBSTANCE ABUSE.—In addition to any other

10 authorizations of appropriations that are available for the

11 purpose of carrying out subpart II of part B of title XIX

12 of the Public Health Service Act, there are authorized to

13 be appropriated for such purpose $50,000,000 for fiscal

14 year 1995.

15 (t) BLOCK GRANTS FOR PREVENTIVE HEALTH

16 SERVICES.—In addition to any other authorizations of ap17 propriations that are available for the purpose of carrying

18 out part A of title XIX of the Public Health Service Act,

19 there are authorized to be appropriated for such purpose

20 $30,000,000 for fiscal year 1995.

21 (u) SCHOLARSHIP AND LOAN REPAYMENT PRO22 GRAMS OF NATIONAL HEALTH SERVICE CORPS.—In addi23 tion to any other authorizations of appropriations that are

24 available for the purpose of contracts under sections 338A

25 and 338B of the Public Health Service Act, there are au-
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1 thorized to be appropriated for such purpose

2 $100,000,000 for fiscal year 1995.

3 (v) SOCIAL SECURITY ACT; MATERNAL AND CHILD

4 HEALTH BLOCK GRANT.—In addition to any other au5 thorizations of appropriations that are available for the

6 purpose of carrying out title V of the Social Security Act,

7 there are authorized to be appropriated for such purpose

8 $100,000,000 for fiscal year 1995.

9 CHAPTER 2—COMMUNITY HEALTH

10 ADVISOR PROGRAM

11 SEC. 2311. SHORT TITLE.

12 This chapter may be cited as the ‘‘National Commu13 nity Health Advisor Act’’.

14 SEC. 2312. FINDINGS.

15 The Congress finds the following:

16 (1) Poverty, geographic isolation, cultural dif17 ferences, lack of transportation, low literacy, lack of

18 access to services and further difficulties resulting

19 from a lack of continuity of care, are barriers for

20 millions of low-income and underserved Americans in

21 the current health care delivery system.

22 (2) The Public Health Service has determined

23 that many health problems are rooted in poverty and

24 hit hardest at those least able to protect themselves.
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1 (3) The Public Health Service has established

2 goals and objectives regarding improvements in the

3 health of the public by the year 2000. An evaluation

4 by the Service, entitled ‘‘Health United States 1992

5 and Healthy People 2000 Review’’, illustrates the

6 acute access problem faced by rural areas and the

7 inner cities. The evaluation cites the fact that sub8 urbs have the lowest death rates, while death rates

9 in rural counties are 12 percent higher and in large

10 core metropolitan counties, 19 percent higher.

11 (4) Discussions of health care reform focus al12 most exclusively on questions of how to extend

13 health insurance to the Nation’s 35–40 million unin14 sured and make services available while simulta15 neously bringing medical costs under control; how16 ever, it is imperative to correct the fundamental and

17 deep-rooted obstacles that low-income urban and

18 rural Americans confront when trying to access med19 ical care and preventive health services. For exam20 ple, in 1991, 19 million American women qualified

21 for mammography screening benefits through Medi22 care; however, only 670,000 (or less than 3 percent)

23 took advantage of this benefit.

24 (5) People who are local, indigenous members

25 and residents of underserved communities are
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1 uniquely knowledgeable about their populations’

2 needs; where such individuals are already serving as

3 community health advisors, they communicate to

4 health and social service providers the needs of com5 munity members, provide quality health promotion

6 and disease prevention information to the commu7 nity and serve as the crucial link between their com8 munities and providers to increase utilization of

9 available preventive health services and to reach out

10 to communities to increase the effectiveness of the

11 health care delivery system, reduce preventable mor12 bidity and mortality, and improve the quality of life.

13 SEC. 2313. FORMULA GRANTS REGARDING COMMUNITY

14 HEALTH ADVISOR PROGRAMS.

15 (a) FORMULA GRANTS.—

16 (1) IN GENERAL.—In the case of each State (or

17 entity designated by a State under subsection (b))

18 that submits to the Secretary an application in ac19 cordance with section 2316 for a fiscal year, the

20 Secretary of Health and Human Services, acting

21 through the Director of the Centers for Disease

22 Control and Prevention and in coordination with the

23 heads of the agencies specified in paragraph (2),

24 shall make an award of financial assistance to the

25 State or entity for the development and operation of
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1 community health advisor programs under section

2 2314(b). The award shall consist of the allotment

3 determined under section 2317 with respect to the

4 State, subject to section 2322(b).

5 (2) COORDINATION WITH OTHER AGENCIES.—

6 The agencies referred to in paragraph (1) regarding

7 coordination are the Health Resources and Services

8 Administration, the National Institutes of Health,

9 and the Substance Abuse and Mental Health Serv10 ices Administration.

11 (b) DESIGNATED ENTITIES.—With respect to the

12 State involved, an entity other than the State may receive

13 an award under subsection (a) only if the entity—

14 (1) is a public or nonprofit private academic or15 ganization (or other public or nonprofit private en16 tity); and

17 (2) has been designated by the State to carry

18 out the purpose described in such subsection in the

19 State and to receive amounts under such subsection

20 in lieu of the State.

21 (c) ROLE OF STATE AGENCY FOR PUBLIC

22 HEALTH.—A funding agreement for an award under sub23 section (a) is that—

24 (1) if the applicant is a State, the award will

25 be administered by the State agency with the prin-
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1 cipal responsibility for carrying out public health

2 programs; and

3 (2) if the applicant is an entity designated

4 under subsection (b), the award will be administered

5 in consultation with such State agency.

6 (d) STATEWIDE RESPONSIBILITIES; LIMITATION ON

7 EXPENDITURES.—

8 (1) STATEWIDE RESPONSIBILITIES.—A funding

9 agreement for an award under subsection (a) is that

10 the applicant involved will—

11 (A) operate a clearinghouse to maintain

12 and disseminate information on community

13 health advisor programs (and similar programs)

14 in the State, including information on develop15 ing and operating such programs, on training

16 individuals to participate in the programs, and

17 on evaluation of the programs;

18 (B) provide to community health advisor

19 programs in the State technical assistance in

20 training community health advisors under sec21 tion 2315(g)(1); and

22 (C) coordinate the activities carried out in

23 the State under the award, including coordina24 tion between the various community health ad25 visor programs and coordination between such
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1 programs and related activities of the State and

2 of other public or private entities.

3 (2) LIMITATION.—A funding agreement for an

4 award under subsection (a) is that the applicant in5 volved will not expend more than 15 percent of the

6 award in the aggregate for carrying out paragraph

7 (1) and for the expenses of administering the award

8 with respect to the State involved, including the

9 process of receiving payments from the Secretary

10 under the award, allocating the payments among the

11 entities that are to develop and operate the commu12 nity health advisor programs involved, and monitor13 ing compliance with the funding agreements made

14 under this chapter by the applicant.

15 SEC. 2314. REQUIREMENTS REGARDING COMMUNITY

16 HEALTH ADVISOR PROGRAMS.

17 (a) PURPOSE OF AWARD; HEALTHY PEOPLE 2000

18 OBJECTIVES.—

19 (1) IN GENERAL.—Subject to paragraph (2), a

20 funding agreement for an award under section 2313

21 for an applicant is that the purpose of the award is,

22 through community health advisor programs under

23 subsection (b), to assist the State involved in attain24 ing the Healthy People 2000 Objectives (as defined

25 in subsection (d).
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1 (2) AUTHORITY REGARDING SELECTION OF PRI2 ORITY OBJECTIVES.—With respect to compliance

3 with the agreement made under paragraph (1), an

4 applicant receiving an award under section 2313

5 may, from among the various Healthy People 2000

6 Objectives, select one or more Objectives to be given

7 priority in the operation of a community health advi8 sor program of the applicant, subject to the appli9 cant selecting such priorities in consultation with the

10 entity that is to carry out the program.

11 (b) REQUIREMENTS FOR PROGRAMS.—

12 (1) IN GENERAL.—A funding agreement for an

13 award under section 2313 for an applicant is that,

14 in expending the award, the purpose described in

15 subsection (a)(1) will be carried out in accordance

16 with the following:

17 (A) For each community for which the

18 purpose is to be carried out, the applicant will

19 establish a program in accordance with this

20 subsection.

21 (B) The program will be carried out in a

22 community only if the applicant has, under sec23 tion 2315(a), identified the community as hav24 ing a significant need for the program.
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1 (C) The program will be operated by a

2 public or nonprofit private entity with experi3 ence in providing health or health-related social

4 services to individuals who are underserved with

5 respect to such services.

6 (D) The services of the program, as speci7 fied in paragraph (2), will be provided prin8 cipally by community health advisors (as de9 fined in subsection (d)).

10 (2) AUTHORIZED PROGRAM SERVICES.—For

11 purposes of paragraph (1)(D), the services specified

12 in this paragraph for a program are as follows:

13 (A) The program will collaborate with

14 health care providers and related entities in

15 order to facilitate the provision of health serv16 ices and health-related social services (including

17 collaborating with local health departments,

18 community health centers, migrant health cen19 ters, rural health clinics, hospitals, physicians

20 and nurses, providers of health education, and

21 providers of social services).

22 (B) The program will provide public edu23 cation on health promotion and disease preven24 tion and facilitate the use of available health

25 services and health-related social services.
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1 (C) The program will provide health-relat2 ed counseling.

3 (D) The program will provide referrals for

4 available health services and health-related so5 cial services.

6 (E) For the purpose of increasing the ca7 pacity of individuals to utilize health services

8 and health-related social services under Federal,

9 State, and local programs, the following condi10 tions will be met:

11 (i) The program will assist individuals

12 in establishing eligibility under the pro13 grams and in receiving the services or

14 other benefits of the programs.

15 (ii) The program will provide such

16 other services as the Secretary determines

17 to be appropriate, which services may in18 clude (but are not limited to) transpor19 tation and translation services.

20 (F) The program will provide outreach

21 services to inform the community of the avail22 ability of the services of the program.

23 (G) The program will undertake special

24 outreach activities to—
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1 (i) recruit individuals with disabilities

2 for service as community health advisors,

3 and

4 (ii) ensure that the services of the

5 program are accessible and available to in6 dividuals with disabilities who reside within

7 the community.

8 (c) PRIORITY FOR MEDICALLY UNDERSERVED COM9 MUNITIES.—A funding agreement for an award under sec10 tion 2313 is that the applicant involved will give priority

11 to developing and operating community health advisor

12 programs for medically underserved communities.

13 (d) CERTAIN DEFINITIONS.—

14 (1) COMMUNITY HEALTH ADVISOR.—For pur15 poses of this chapter, the term ‘‘community health

16 advisor’’ means an individual—

17 (A) who has demonstrated the capacity to

18 carry out one or more of the authorized pro19 gram services;

20 (B) who, for not less than 1 year, has been

21 a resident of the community in which the com22 munity health advisor program involved is to be

23 operated; and

24 (C) is a member of a socioeconomic group

25 to be served by the program.
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1 (2) HEALTHY PEOPLE 2000 OBJECTIVES.—For

2 purposes of this chapter, the term ‘‘Healthy People

3 2000 Objectives’’ means the objectives established by

4 the Secretary toward the goals of increasing the

5 span of healthy life, reducing health disparities

6 among various populations, and providing access to

7 preventive services, which objectives apply to the

8 health status of the population of the United States

9 for the year 2000.

10 (3) MEDICALLY UNDERSERVED COMMUNITY.—

11 For purposes of this chapter, the term ‘‘medically

12 underserved community’’ means—

13 (A) a community that has a substantial

14 number of individuals who are members of a

15 medically underserved population, as defined in

16 section 330 of the Public Health Service Act; or

17 (B) a community a significant portion of

18 which is a health professional shortage area

19 designated under section 332 of such Act.

20 SEC. 2315. ADDITIONAL AGREEMENTS.

21 (a) IDENTIFICATION OF COMMUNITY NEEDS.—A

22 funding agreement for an award under section 2313 is

23 that the applicant involved will—

24 (1) identify the needs of the community in25 volved for the authorized program services;
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1 (2) in identifying such needs, consult with

2 members of the community, with individuals and

3 programs that provide health services in the commu4 nity, and with individuals and programs that provide

5 health-related social services in the community; and

6 (3) consider such needs in carrying out a com7 munity health advisor program for the community.

8 (b) MATCHING FUNDS.—

9 (1) IN GENERAL.—With respect to the cost of

10 carrying out a community health advisor program, a

11 funding agreement for an award under section 2313

12 is that the applicant involved will make available (di13 rectly or through donations from public or private

14 entities) non-Federal contributions toward such cost

15 in an amount that is not less than 25 percent of

16 such cost.

17 (2) DETERMINATION OF AMOUNT CONTRIB18 UTED.—

19 (A) Non-Federal contributions required in

20 paragraph (1) may be in cash or in kind, fairly

21 evaluated, including plant, equipment, or serv22 ices. Amounts provided by the Federal Govern23 ment, or services assisted or subsidized to any

24 significant extent by the Federal Government,
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1 may not be included in determining the amount

2 of such non-Federal contributions.

3 (B) With respect to the State in which the

4 community health advisor program involved is

5 to be carried out, amounts provided by the

6 State in compliance with subsection (c) shall be

7 included in determining the amount of non-Fed8 eral contributions under paragraph (1).

9 (c) MAINTENANCE OF EFFORT.—With respect to the

10 purposes for which an award under section 2313 is au11 thorized in this chapter to be expended, the Secretary may

12 make such an award only if the State involved agrees to

13 maintain expenditures of non-Federal amounts for such

14 purposes at a level that is not less than the level of such

15 expenditures maintained by the State for the fiscal year

16 preceding the first fiscal year for which such an award

17 is made with respect to the State.

18 (d) CULTURAL CONTEXT OF SERVICES.—A funding

19 agreement for an award under section 2313 for an appli20 cant is that the services of the community health advisor

21 program involved will be provided in the language and cul22 tural context most appropriate for the individuals served

23 by the program.

24 (e) NUMBER OF PROGRAMS PER AWARD; PROGRAMS

25 FOR URBAN AND RURAL AREAS.—A funding agreement
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1 for an award under section 2313 for an applicant is that

2 the number of community health advisor programs oper3 ated in the State with the award will be determined by

4 the Secretary, except that (subject to section

5 2314(b)(1)(B)) such a program will be carried out in not

6 less than one urban area of the State, and in not less than

7 one rural area of the State.

8 (f) ONGOING SUPERVISION OF ADVISORS.—A fund9 ing agreement for an award under section 2313 is that

10 the applicant involved will ensure that each community

11 health advisor program operated with the award provides

12 for the ongoing supervision of the community health advi13 sors of the program.

14 (g) CERTAIN EXPENDITURES.—

15 (1) TRAINING; CONTINUING EDUCATION.—

16 Funding agreements for an award under section

17 2313 include the following:

18 (A) The applicant involved will ensure

19 that, for each community health advisor pro20 gram operated with the award, a program is

21 carried out to train community health advisors

22 to provide the authorized program services, in23 cluding practical experiences in providing serv24 ices for health promotion and disease preven25 tion.
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1 (B) The program of training will provide

2 for the continuing education of the community

3 health advisors.

4 (C) Not more than 15 percent of the

5 award will be expended for the program of

6 training.

7 (2) COMPENSATION.—With respect to compli8 ance with the agreements made under this chapter,

9 the purposes for which an award under section 2313

10 may be expended include providing compensation for

11 the services of community health advisors.

12 (h) REPORTS TO SECRETARY; ASSESSMENT OF EF13 FECTIVENESS.—Funding agreements for an award under

14 section 2313 for an applicant include the following:

15 (1) The applicant will ensure that, for each fis16 cal year for which a community health advisor pro17 gram receives amounts from the award, the program

18 will prepare a report describing the activities of the

19 program for such year, including—

20 (A) a specification of the number of indi21 viduals served by the program;

22 (B) a specification of the entities with

23 which the program has collaborated in carrying

24 out the purpose described in section 2314(a)(1);

25 and
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1 (C) an assessment of the extent of the ef2 fectiveness of the program in carrying out such

3 purpose.

4 (2) Such reports will include such additional in5 formation regarding the applicant and the programs

6 as the Secretary may require.

7 (3) The applicant will prepare the reports as a

8 single document and will submit the document to the

9 Secretary not later than February 1 of the fiscal

10 year following the fiscal year for which the reports

11 were prepared.

12 SEC. 2316. APPLICATION FOR ASSISTANCE; STATE PLAN.

13 For purposes of section 2313, an application is in ac14 cordance with this section if—

15 (1) the application is submitted not later than

16 the date specified by the Secretary;

17 (2) the application contains each funding agree18 ment described in this chapter;

19 (3) the application contains a State plan de20 scribing the purposes for which the award is to be

21 expended in the State, including a description of the

22 manner in which the applicant will comply with each

23 such funding agreement; and

24 (4) the application is in such form, is made in

25 such manner, and contains such agreements, assur-
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1 ances, and information as the Secretary determines

2 to be necessary to carry out this chapter.

3 SEC. 2317. DETERMINATION OF AMOUNT OF ALLOTMENT.

4 (a) IN GENERAL.—For purposes of section 2313, the

5 allotment under this section with respect to a State for

6 a fiscal year is the greater of—

7 (1) the sum of the respective amounts deter8 mined for the State under subsection (b) and sub9 section (c); and

10 (2) $500,000.

11 (b) AMOUNT RELATING TO POPULATION.—For pur12 poses of subsection (a), the amount determined under this

13 subsection is the product of—

14 (1) an amount equal to 50 percent of the

15 amount appropriated under section 2322 for the fis16 cal year and available for awards under section

17 2313; and

18 (2) the percentage constituted by the ratio of—

19 (A) the number of individuals residing in

20 the State involved; to

21 (B) the sum of the respective amounts de22 termined for each State under subparagraph

23 (A).
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1 (c) AMOUNT RELATING TO POVERTY LEVEL.—For

2 purposes of subsection (a), the amount determined under

3 this subsection is the product of—

4 (1) the amount determined under subsection

5 (b)(1); and

6 (2) the percentage constituted by the ratio of—

7 (A) the number of individuals residing in

8 the State whose income is at or below an

9 amount equal to 200 percent of the official pov10 erty line; to

11 (B) the sum of the respective amounts de12 termined for each State under subparagraph

13 (A).

14 SEC. 2318. QUALITY ASSURANCE; COST-EFFECTIVENESS.

15 The Secretary shall establish guidelines for assuring

16 the quality of community health advisor programs (includ17 ing quality in the training of community health advisors)

18 and for assuring the cost-effectiveness of the programs.

19 A funding agreement for an award under section 2313 is

20 that the applicant involved will carry out such programs

21 in accordance with the guidelines.

22 SEC. 2319. EVALUATIONS; TECHNICAL ASSISTANCE.

23 (a) EVALUATIONS.—The Secretary shall conduct

24 evaluations of community health advisor programs, and

25 may disseminate information developed as result of the
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1 evaluations. In conducting such evaluations, the Secretary

2 shall determine whether the programs are in compliance

3 with the guidelines established under section 2318.

4 (b) TECHNICAL ASSISTANCE.—The Secretary may

5 provide technical assistance to recipients of awards under

6 section 2313 with respect to the planning, development,

7 and operation of community health advisor programs.

8 (c) GRANTS AND CONTRACTS.—The Secretary may

9 carry out this section directly or through grants, coopera10 tive agreements, or contracts.

11 (d) LIMITATION ON EXPENDITURES.—Of the

12 amounts appropriated under section 2322 for a fiscal year,

13 the Secretary may reserve not more than 10 percent for

14 carrying out this section.

15 SEC. 2320. RULE OF CONSTRUCTION REGARDING PRO16 GRAMS OF INDIAN HEALTH SERVICE.

17 This chapter may not be construed as requiring the

18 Secretary to modify or terminate the program carried out

19 by the Director of the Indian Health Service and des20 ignated by such Director as the Community Health Rep21 resentative Program. The Secretary shall ensure that sup22 port for such Program is not supplanted by awards under

23 section 2313. In communities in which both such Program

24 and a community health advisor program are being carried

25 out, the Secretary shall ensure that the community health
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1 advisor program works in cooperation with, and as a com2 plement to, the Community Health Representative Pro3 gram.

4 SEC. 2321. DEFINITIONS.

5 For purposes of this chapter:

6 (1) The term ‘‘authorized program services’’,

7 with respect to a community health advisor program,

8 means the services specified in section 2314(b)(2).

9 (2) The term ‘‘community health advisor’’ has

10 the meaning given such term in section 2314(d).

11 (3) The term ‘‘community health advisor pro12 gram’’ means a program carried out under section

13 2314(b).

14 (4) The term ‘‘financial assistance’’, with re15 spect to an award under section 2313, means a

16 grant, cooperative agreement, or a contract.

17 (5) The term ‘‘funding agreement’’ means an

18 agreement required as a condition of receiving an

19 award under section 2313.

20 (6) The term ‘‘Healthy People 2000 Objectives’’

21 has the meaning given such term in section 2314(d).

22 (7) The term ‘‘medically underserved commu23 nity’’ has the meaning given such term in section

24 2314(d).
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1 (8) The term ‘‘official poverty line’’ means the

2 official poverty line established by the Director of

3 the Office of Management and Budget and revised

4 by the Secretary in accordance with section 673(2)

5 of the Omnibus Budget Reconciliation Act of 1981,

6 which poverty line is applicable to the size of the

7 family involved.

8 (9) The term ‘‘Secretary’’ means the Secretary

9 of Health and Human Services.

10 (10) The term ‘‘State’’ means each of the sev11 eral States, the District of Columbia, and each of

12 the Commonwealth of Puerto Rico, American

13 Samoa, Guam, the Commonwealth of the Northern

14 Mariana Islands, the Virgin Islands, and the Trust

15 Territory of the Pacific Islands.

16 (11) The term ‘‘State involved’’, with respect to

17 an applicant for an award under section 2313,

18 means the State in which the applicant is to carry

19 out a community health advisor program.

20 SEC. 2322. FUNDING.

21 (a) AUTHORIZATION OF APPROPRIATIONS.—For the

22 purpose of carrying out this chapter, there is authorized

23 to be appropriated $100,000,000 for each of the fiscal

24 years 1995 through 2000.
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1 (b) EFFECT OF INSUFFICIENT APPROPRIATIONS FOR

2 MINIMUM ALLOTMENTS.—

3 (1) IN GENERAL.—If the amounts made avail4 able under subsection (a) for a fiscal year are insuf5 ficient for providing each State (or entity designated

6 by the State pursuant to section 2313, as the case

7 may be) with an award under section 2313 in an

8 amount equal to or greater than the amount speci9 fied in section 2317(a)(2), the Secretary shall, from

10 such amounts as are made available under sub11 section (a), make such awards on a discretionary

12 basis.

13 (2) RULE OF CONSTRUCTION.—For purposes of

14 paragraph (1), awards under section 2313 are made

15 on a discretionary basis if the Secretary determines

16 which States (or entities designated by States pursu17 ant to such section, as the case may be) are to re18 ceive such awards, subject to meeting the require19 ments of this chapter for such an award, and the

20 Secretary determines the amount of such awards.
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1 TITLE III—AMENDMENTS OF IN2 TERNAL REVENUE CODE OF

3 1986

4 Subtitle A—Reduction in Employee

5 Payroll Taxes; Credit for First6 Time Homebuyers

7 SEC. 3001. CREDIT FOR PORTION OF SOCIAL SECURITY

8 TAXES.

9 (a) GENERAL RULE.—Subpart C of part IV of sub10 chapter A of chapter 1 of the Internal Revenue Code of

11 1986 (relating to refundable credits) is amended by redes12 ignating section 35 as section 36 and by inserting after

13 section 34 the following new section:

14 ‘‘SEC. 35. CREDIT FOR PORTION OF SOCIAL SECURITY

15 TAXES.

16 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in17 dividual, there shall be allowed as a credit against the tax

18 imposed by this subtitle for the taxable year an amount

19 equal to 20 percent of the taxpayer’s social security taxes

20 for the taxable year.

21 ‘‘(b) LIMITATION.—The amount of the credit allow22 able under subsection (a) to any taxpayer for any taxable

23 year shall not exceed $200 ($400 in the case of a joint

24 return).
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1 ‘‘(c) SOCIAL SECURITY TAXES.—For purposes of this

2 section—

3 ‘‘(1) IN GENERAL.—The term ‘social security

4 taxes’ means, with respect to any taxpayer for any

5 taxable year—

6 ‘‘(A) the amount of the taxes imposed by

7 subsections (a) and (b) of section 3101 on

8 amounts received by the taxpayer during the

9 calendar year in which the taxable year begins,

10 ‘‘(B) the amount of the taxes imposed by

11 section 3201(a) on amounts received by the tax12 payer during the calendar year in which the

13 taxable year begins,

14 ‘‘(C) 50 percent of the taxes imposed by

15 subsections (a) and (b) of section 1401 on the

16 self-employment income of the taxpayer for the

17 taxable year, and

18 ‘‘(D) 50 percent of the taxes imposed by

19 section 3211(a)(1) on amounts received by the

20 taxpayer during the calendar year in which the

21 taxable year begins.

22 ‘‘(2) COORDINATION WITH SPECIAL REFUND OF

23 SOCIAL SECURITY TAXES.—The term ‘social security

24 taxes’ shall not include any taxes to the extent the
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1 taxpayer is entitled to a special refund of such taxes

2 under section 6413(c).

3 ‘‘(3) SPECIAL RULE.—Any amounts paid pursu4 ant to an agreement under section 3121(l) (relating

5 to agreements entered into by American employers

6 with respect to foreign affiliates) which are equiva7 lent to the taxes referred to in paragraph (1)(A)

8 shall be treated as taxes referred to in such para9 graph.

10 ‘‘(d) YEARS TO WHICH SECTION APPLIES.—This

11 section shall only apply to taxable years beginning after

12 December 31, 1994, and before January 1, 1997.’’

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

14 for subpart C of part IV of subchapter A of chapter 1

15 is amended by striking the item relating to section 35 and

16 inserting the following:

‘‘Sec. 35. Credit for portion of social security taxes.

‘‘Sec. 36. Overpayments of tax.’’

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

18 this section shall apply to taxable years beginning after

19 December 31, 1994.

20 SEC. 3002. CREDIT FOR PURCHASE OF PRINCIPAL RESI21 DENCE BY FIRST-TIME HOMEBUYER.

22 (a) IN GENERAL.—Subpart A of part IV of sub23 chapter A of chapter 1 of the Internal Revenue Code of

24 1986 (relating to nonrefundable personal credits) is
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1 amended by inserting after section 22 the following new

2 section:

3 ‘‘SEC. 23. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST4 TIME HOMEBUYER.

5 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of a first6 time homebuyer, there shall be allowed as a credit against

7 the tax imposed by this chapter an amount equal to 10

8 percent of the purchase price of the first principal resi9 dence purchased by the taxpayer during the eligibility pe10 riod. Except as otherwise provided in this section, such

11 credit shall be allowed for the taxable year in which such

12 residence is purchased.

13 ‘‘(b) LIMITATIONS.—

14 ‘‘(1) MAXIMUM OVERALL CREDIT.—The credit

15 allowed by subsection (a) to the taxpayer shall not

16 exceed $6,000.

17 ‘‘(2) PHASEOUT OF CREDIT BASED ON AD18 JUSTED GROSS INCOME.—If the adjusted gross in19 come of the taxpayer for the taxable year in which

20 the residence is purchased exceeds $50,000, the

21 $6,000 amount in paragraph (1) shall be reduced

22 (but not below zero) by $100 for each $200 of such

23 excess.

24 ‘‘(c) FIRST-TIME HOMEBUYER.—For purposes of

25 this section—
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1 ‘‘(1) IN GENERAL.—The term ‘first-time home2 buyer’ means any individual unless such individual

3 or such individual’s spouse had a present ownership

4 interest in any residence at any time during the 3-

5 year period ending on the date of the purchase of

6 the residence referred to in subsection (a).

7 ‘‘(2) UNMARRIED JOINT OWNERS.—An individ8 ual shall not be treated as a first-time homebuyer

9 with respect to any residence unless all the individ10 uals purchasing such residence with such individual

11 are first-time homebuyers.

12 ‘‘(3) ALLOCATION OF LIMITS.—All individuals

13 purchasing a residence shall be treated as 1 individ14 ual for purposes of determining the maximum credit

15 under subsection (a); and such maximum credit, and

16 the $50,000 amount in subsection (b)(2), shall be al17 located among such individuals under regulations

18 prescribed by the Secretary.

19 ‘‘(4) CERTAIN INDIVIDUALS INELIGIBLE.—The

20 term ‘first-time homebuyer’ shall not include any in21 dividual if, on the date of the purchase of the resi22 dence, the period of time specified in section 1034(a)

23 is suspended under subsection (h) or (k) of section

24 1034 with respect to such individual.
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1 ‘‘(5) CERTAIN INDIRECT INTERESTS NOT

2 TAKEN INTO ACCOUNT.—Except as provided in regu3 lations prescribed by the Secretary, an individual

4 shall not be treated as holding an interest in a resi5 dence by reason of holding an interest in a partner6 ship, S corporation, or trust.

7 ‘‘(d) OTHER DEFINITIONS.—For purposes of this

8 section—

9 ‘‘(1) ELIGIBILITY PERIOD.—

10 ‘‘(A) IN GENERAL.—The term ‘eligibility

11 period’ means the period beginning after De12 cember 31, 1994, and ending before January 1,

13 1997.

14 ‘‘(B) BINDING CONTRACTS.—A residence

15 shall be treated as purchased during the eligi16 bility period if—

17 ‘‘(i) during the eligibility period, the

18 purchaser enters into a binding contract to

19 purchase the residence, and

20 ‘‘(ii) the purchaser purchases and oc21 cupies the residence before July 1, 1997.

22 For purposes of clause (i), a contract shall not

23 fail to be treated as binding merely because it

24 is contingent on financing or on the condition

25 of the residence.
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1 ‘‘(2) PURCHASE.—The term ‘purchase’ means

2 any acquisition of property, but only if—

3 ‘‘(A) the property is not acquired from a

4 person whose relationship to the person acquir5 ing it would result in the disallowance of losses

6 under section 267 or 707(b), and

7 ‘‘(B) the basis of the property in the hands

8 of the person acquiring it is not determined—

9 ‘‘(i) in whole or in part by reference

10 to the adjusted basis of such property in

11 the hands of the person from whom ac12 quired, or

13 ‘‘(ii) under section 1014(a) (relating

14 to property acquired from a decedent).

15 ‘‘(3) PRINCIPAL RESIDENCE.—The term ‘prin16 cipal residence’ has the same meaning as when used

17 in section 1034.

18 ‘‘(4) PURCHASE PRICE.—The term ‘purchase

19 price’ means the adjusted basis of the residence on

20 the date of its acquisition.

21 ‘‘(e) CARRYOVER OF UNUSED CREDIT.—

22 ‘‘(1) IN GENERAL.—If—

23 ‘‘(A) the credit allowable under subsection

24 (a) after the application of subsection (b) ex25 ceeds
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1 ‘‘(B) the limitation imposed by section

2 26(a) reduced by the sum of the credits allow3 able under sections 21 and 22,

4 such excess shall be carried to the succeeding tax5 able year and shall be allowable under subsection (a)

6 for such succeeding taxable year.

7 ‘‘(2) 5-YEAR LIMIT ON CARRYFORWARD.—No

8 amount may be carried under paragraph (1) to any

9 taxable year after the 5th taxable year after the tax10 able year in which the residence is purchased.

11 ‘‘(f) RECAPTURE OF CREDIT FOR CERTAIN DISPOSI12 TIONS.—

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graphs (2) and (3), if the taxpayer disposes of prop15 erty with respect to the purchase of which a credit

16 was allowed under subsection (a) and such disposi17 tion occurs at any time within 36 months after the

18 date the taxpayer acquired the property as his prin19 cipal residence, then the tax imposed under this

20 chapter for the taxable year in which the disposition

21 occurs is increased by an amount equal to the

22 amount allowed as a credit for the purchase of such

23 property.

24 ‘‘(2) ACQUISITION OF NEW RESIDENCE.—If, in

25 connection with a disposition described in paragraph
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1 (1) and within the applicable period prescribed in

2 section 1034, the taxpayer purchases a new principal

3 residence, then paragraph (1) shall not apply and

4 the tax imposed by this chapter for the taxable year

5 in which the new principal residence is purchased is

6 increased to the extent the amount of the credit that

7 could be claimed under this section on the purchase

8 of the new residence (were such residence purchased

9 during the eligibility period) is less than the amount

10 of credit claimed by the taxpayer under this section.

11 ‘‘(3) DEATH OF OWNER; CASUALTY LOSS; IN12 VOLUNTARY CONVERSION; ETC.—Paragraph (1)

13 shall not apply to—

14 ‘‘(A) a disposition of a residence made on

15 account of the death of any individual having a

16 legal or equitable interest therein occurring dur17 ing the 36-month period referred to in para18 graph (1),

19 ‘‘(B) a disposition of the old residence if it

20 is substantially or completely destroyed by a

21 casualty described in section 165(c)(3) or

22 compulsorily or involuntarily converted (within

23 the meaning of section 1033(a)), or

24 ‘‘(C) a disposition pursuant to a settlement

25 in a divorce or legal separation proceeding
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1 where the residence is sold or the other spouse

2 retains the residence as a principal residence.

3 ‘‘(g) BASIS ADJUSTMENT.—For purposes of this sub4 title, if a credit is allowed under this section with respect

5 to the purchase of any residence, the basis of such resi6 dence shall be reduced by the amount of the credit so al7 lowed.’’.

8 (b) CONFORMING AMENDMENTS.—

9 (1) Subsection (a) of section 1016 of such Code

10 is amended by striking ‘‘and’’ at the end of para11 graph (24), by striking the period at the end of

12 paragraph (25) and inserting ‘‘, and’’, and by add13 ing at the end thereof the following new paragraph:

14 ‘‘(26) in the case of a residence with respect to

15 which a credit was allowed under section 23, to the

16 extent provided in section 23(g).’’

17 (2) The table of sections for subpart A of part

18 IV of subchapter A of chapter 1 of such Code is

19 amended by inserting after the item relating to sec20 tion 22 the following new item:

‘‘Sec. 23. Purchase of principal residence by first-time homebuyer.’’

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

22 this section shall apply to taxable years ending after De23 cember 31, 1994.
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1 Subtitle B—Revenue Increases

2 SEC. 3101. STOCK TRANSFER EXCISE TAX.

3 (a) IN GENERAL.—Chapter 34 of the Internal Reve4 nue Code of 1986 is amended by striking the chapter

5 heading and inserting the following:

6 ‘‘CHAPTER 34—TAX ON CERTAIN

7 FINANCIAL TRANSACTIONS

‘‘Subchapter A. Tax on stock transfers.

‘‘Subchapter B. Policies issued by foreign insurers.

8 ‘‘SUBCHAPTER A—TAX ON STOCK TRANSFERS

‘‘Sec. 4301. Imposition of tax.

‘‘Sec. 4302. Collection of tax.

‘‘Sec. 4303. Taxable stock transfer.

‘‘Sec. 4304. Taxable stock.

9 ‘‘SEC. 4301. IMPOSITION OF TAX.

10 ‘‘(a) IN GENERAL.—There is hereby imposed on each

11 taxable stock transfer a tax equal to 0.25 percent of the

12 amount realized by the transferor of the taxable stock.

13 ‘‘(b) AMOUNT REALIZED.—For purposes of sub14 section (a)—

15 ‘‘(1) IN GENERAL.—Except as otherwise pro16 vided in this subsection, the term ‘amount realized’

17 has the same meaning as when used in section 1001.

18 ‘‘(2) TRANSFERS WHICH ARE NOT SALES OR

19 EXCHANGES.—In the case of any taxable stock

20 transfer which is not a sale or exchange, the amount
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1 realized is the fair market value of the taxable stock

2 involved.

3 ‘‘(3) CERTAIN ITEMS NOT TAKEN INTO AC4 COUNT.—The following amounts shall not be taken

5 into account in computing the amount realized from

6 any taxable stock transfer:

7 ‘‘(A) The tax imposed by this section.

8 ‘‘(B) Any brokerage or similar fees or com9 missions.

10 ‘‘(C) Any State, local or foreign tax im11 posed on the taxable stock transfer.

12 ‘‘(c) TAX PAID BY TRANSFEROR.—The tax imposed

13 by subsection (a) shall be paid by the transferor of the

14 taxable stock.

15 ‘‘SEC. 4302. COLLECTION OF TAX.

16 ‘‘(a) COLLECTED BY BROKER.—Every broker who—

17 ‘‘(1) acts on behalf of the transferor in any tax18 able stock transfer, and

19 ‘‘(2) receives any payment on behalf of the

20 transferor for such transfer,

21 shall collect the amount of the tax imposed by section

22 4301 by deducting and withholding such tax from the

23 amount of any such payment. Any person required to de24 duct and withhold any tax under the preceding sentence

25 is hereby made liable for such tax and is hereby indem-
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1 nified against the claims and demands of any person for

2 the amount of any payment so deducted and withheld.

3 ‘‘(b) PAYMENT BY TRANSFEROR WHERE NO

4 BROKER.—In any case in which there is no broker re5 quired to collect the tax under subsection (a), the trans6 feror shall pay such tax in such manner as the Secretary

7 shall by regulations prescribe.

8 ‘‘SEC. 4303. TAXABLE STOCK TRANSFER.

9 ‘‘(a) GENERAL RULE.—For purposes of this sub10 chapter, the term ‘taxable stock transfer’ means any

11 transfer of a taxable stock if such transfer is made

12 through an established securities market in the United

13 States.

14 ‘‘(b) EXEMPTIONS.—For purposes of this subchapter,

15 the term ‘taxable stock transfer’ does not include—

16 ‘‘(1) DEATH.—Any transfer at death.

17 ‘‘(2) GIFT.—Any transfer to the extent such

18 transfer is a gift.

19 ‘‘(3) BETWEEN SPOUSES OR INCIDENT TO DI20 VORCE.—Any transfer described in section 1041(a).

21 ‘‘SEC. 4304. TAXABLE STOCK DEFINED.

22 ‘‘(a) TAXABLE STOCK.—For purposes of this sub23 chapter, the term ‘taxable stock’ means any stock in a cor24 poration or interest in a partnership which is publicly
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1 traded on an established securities market in the United

2 States.

3 ‘‘SUBCHAPTER B—POLICIES ISSUED BY FOREIGN

4 INSURERS’’.

5 (b) CONFORMING AMENDMENTS.—

6 (1) The table of chapters for subtitle D of such

7 Code is amended by striking the item relating to

8 chapter 34 and inserting the following:

‘‘Chapter 34. Tax on certain financial transactions.’’

9 (2) Sections 4372(c) and 4374 of such Code

10 are each amended by striking ‘‘this chapter’’ and in11 serting ‘‘this subchapter’’.

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

13 this section shall apply to transfers after December 31,

14 1996.

15 SEC. 3102. REPEAL OF PREFERENTIAL RATE OF TAX ON

16 CAPITAL GAINS.

17 (a) IN GENERAL.— Section 1 of the Internal Revenue

18 Code of 1986 is amended by striking subsection (h).

19 (b) CONFORMING AMENDMENTS.—

20 (1) Paragraph (4) of section 691(c) of such

21 Code is amended by striking ‘‘1(h),’’.

22 (2)(A) Subparagraph (B) of section 904(b)(2)

23 of such Code is amended by striking ‘‘In the case of

24 any taxable year’’ and inserting ‘‘In the case of a

25 corporation with respect to any taxable year’’.
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1 (B) Subparagraph (D) of section 904(b)(3) of

2 such Code is amended by striking ‘‘if—’’ and all

3 that follows through ‘‘(ii) in the case of a corpora4 tion,’’ and inserting ‘‘if’’.

5 (C) Subparagraph (E) of section 904(b)(3) of

6 such Code is amended to read as follows:

7 ‘‘(E) RATE DIFFERENTIAL PORTION.—The

8 rate differential portion of foreign source net

9 capital gain, net capital gain, or the excess of

10 net capital gain from sources within the United

11 States over net capital gain, as the case may

12 be, is the same proportion of such amount as—

13 ‘‘(i) the excess of—

14 ‘‘(I) the highest rate of tax speci15 fied in section 11(b), over

16 ‘‘(II) the alternative rate of tax

17 under section 1201(a), bears to

18 ‘‘(ii) the highest rate of tax specified

19 in section 11(b).’’

20 (3) Paragraph (1) of section 1445(e) of such

21 Code is amended by striking ‘‘(or, to the extent pro22 vided in regulations, 28 percent)’’.

23 (4)(A) The second sentence of section

24 7518(g)(6)(A) of such Code is amended—
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1 (i) by striking ‘‘With respect to’’ and in2 serting ‘‘In the case of a corporation, with re3 spect to’’,

4 (ii) by striking ‘‘1(h) or’’, and

5 (iii) by striking ‘‘28 percent (34 percent in

6 the case of a corporation’’ and inserting ‘‘34

7 percent’’.

8 (B) The second sentence of section

9 607(h)(6)(A) of the Merchant Marine Act, 1936 is

10 amended—

11 (i) by striking ‘‘With respect to’’ and in12 serting ‘‘In the case of a corporation, with re13 spect to’’,

14 (ii) by striking ‘‘1(h) or’’, and

15 (iii) by striking ‘‘28 percent (34 percent in

16 the case of a corporation’’ and inserting ‘‘34

17 percent’’.

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

19 this section shall apply to taxable years beginning after

20 December 31, 1996.

21 SEC. 3103. REPEAL OF CREDIT FOR FOREIGN TAXES.

22 (a) IN GENERAL.—Section 901 of the Internal Reve23 nue Code of 1986 (relating to taxes of foreign countries

24 and of possessions of the United States) is amended by
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1 redesignating subsection (k) as subsection (l) and by in2 serting after subsection (j) the following new subsection:

3 ‘‘(k) TERMINATION OF FOREIGN TAX CREDIT.—

4 ‘‘(1) IN GENERAL.—No credit shall be allowed

5 under subsection (a) for any income, war profits, or

6 excess profits taxes paid or accrued (or deemed paid

7 under section 902 or 960) for any taxable year be8 ginning after the date of the enactment of this sub9 section.

10 ‘‘(2) TAXES ALLOWED AS DEDUCTION.—Section

11 275(4) shall not apply to any tax for which credit

12 is not allowable by reason of this subsection.’’

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

14 this section shall apply to taxable years beginning after

15 the date of the enactment of this Act.

16 SEC. 3104. REPEAL OF DEFERRAL OF INCOME OF CON17 TROLLED FOREIGN CORPORATIONS.

18 (a) GENERAL RULE.—Subpart F of part III of sub19 chapter N of chapter 1 of the Internal Revenue Code of

20 1986 is amended by striking sections 952, 953, and 954

21 and inserting the following new sections:

22 ‘‘SEC. 952. SUBPART F INCOME.

23 ‘‘(a) GENERAL RULE.—For purposes of this subpart,

24 the term ‘subpart F income’ means the earnings and prof-
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1 its of the controlled foreign corporation for the taxable

2 year computed with the following adjustments:

3 ‘‘(1) There shall be excluded the amount of the

4 earnings and profits which are attributable to in5 come from sources within the United States which

6 is effectively connected with the conduct by the con7 trolled foreign corporation of a trade or business

8 within the United States, except to the extent such

9 income is exempt from taxation (or subject to a re10 duced rate of tax) pursuant to a treaty obligation of

11 the United States. For purposes of the preceding

12 sentence, income described in paragraph (2) or (3)

13 of section 921(d) shall be treated as derived from

14 sources within the United States.

15 ‘‘(2) In determining earnings and profits (or

16 the deficit in earnings and profits), the amount of

17 any illegal bribe, kickback, or other payment (within

18 the meaning of section 162(c)) shall not be taken

19 into account to decrease such earnings and profits or

20 to increase such deficit. The payments referred to in

21 the preceding sentence are payments which would be

22 unlawful under the Foreign Corrupt Practices Act of

23 1977 if the payor were a United States person.

24 ‘‘(3) Under regulations prescribed by the Sec25 retary, there shall be excluded the part of any earn-
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1 ings and profits if it is established to the satisfaction

2 of the Secretary that such part could not have been

3 distributed by the controlled foreign corporation to

4 United States shareholders who own (within the

5 meaning of section 958(a)) stock of such controlled

6 foreign corporation because of currency or other re7 strictions or limitations imposed under the laws of

8 any foreign country.

9 ‘‘(4) Earnings and profits shall be determined

10 without regard to paragraphs (4), (5), and (6) of

11 section 312(n). Under regulations, the preceding

12 sentence shall not apply to the extent it would in13 crease earnings and profits by an amount which was

14 previously distributed by the controlled foreign cor15 poration.

16 Except as provided in this subsection and section

17 312(k)(4), the earnings and profits of any foreign corpora18 tion, and the deficit and earnings and profits of any for19 eign corporation for any taxable year shall be determined

20 according to rules similar to those applicable to domestic

21 corporations, under regulations prescribed by the Sec22 retary.

23 ‘‘(b) CERTAIN DEFICITS MAY BE TAKEN INTO AC24 COUNT.—
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1 ‘‘(1) TREATMENT OF CERTAIN PRIOR YEAR

2 DEFICITS.—

3 ‘‘(A) IN GENERAL.—The amount included

4 in the gross income of any United States share5 holder under section 951(a)(1)(A)(i) for any

6 taxable year with respect to any controlled for7 eign corporation shall be reduced by the amount

8 of such shareholder’s pro rata share of any

9 qualified deficit of such controlled foreign cor10 poration.

11 ‘‘(B) QUALIFIED DEFICIT.—For purposes

12 of this paragraph—

13 ‘‘(i) IN GENERAL.—The term ‘quali14 fied deficit’ means any deficit in the earn15 ings and profits of the controlled foreign

16 corporation for any prior taxable year

17 which began after December 31, 1995, and

18 for which such corporation was a con19 trolled foreign corporation, but only to the

20 extent such deficit has not previously been

21 taken into account under this paragraph.

22 ‘‘(ii) SPECIAL RULE FOR DEFICITS

23 BEFORE 1996.—The term ‘qualified deficit’

24 includes any deficit in earnings and profits

25 for any taxable year beginning before Jan-
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1 uary 1, 1996, to the extent that such defi2 cit qualified as a qualified deficit under

3 subsection (c)(1)(B) of this section (as in

4 effect on the day before the date of the en5 actment of the Job Creation and Invest in

6 America Act of 1995); except that any

7 such deficit may be taken into account

8 under this paragraph only to offset

9 amounts attributable to the same activity

10 as the activity giving rise to such deficit.

11 ‘‘(C) PRO RATA SHARE.—For purposes of

12 this paragraph, the shareholder’s pro rata share

13 of any deficit shall be determined under rules

14 similar to the rules of section 951(a)(2) for

15 whichever of the following yields the smallest

16 share:

17 ‘‘(i) the close of the taxable year, or

18 ‘‘(ii) the close of the taxable year in

19 which the deficit arose.

20 ‘‘(2) CERTAIN DEFICITS OF MEMBER OF THE

21 SAME CHAIN OF CORPORATIONS MAY BE TAKEN

22 INTO ACCOUNT.—

23 ‘‘(A) IN GENERAL.—A controlled foreign

24 corporation may elect to reduce the amount of

25 its subpart F income for any taxable year by
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1 the amount of any deficit in earnings and prof2 its of a qualified chain member for a taxable

3 year ending with (or within) the taxable year of

4 such controlled foreign corporation. To the ex5 tent any deficit reduces subpart F income

6 under the preceding sentence, such deficit shall

7 not be taken into account under paragraph (1).

8 ‘‘(B) QUALIFIED CHAIN MEMBER.—For

9 purposes of this paragraph, the term ‘qualified

10 chain member’ means, with respect to any con11 trolled foreign corporation, any other corpora12 tion which is created or organized under the

13 laws of the same foreign country as the con14 trolled foreign corporation but only if—

15 ‘‘(i) all the stock of such other cor16 poration (other than directors’ qualifying

17 shares) is owned at all times during the

18 taxable year in which the deficit arose (di19 rectly or through 1 or more corporations

20 other than the common parent) by such

21 controlled foreign corporation, or

22 ‘‘(ii) all the stock of such controlled

23 foreign corporation (other than directors’

24 qualifying shares) is owned at all times

25 during the taxable year in which the deficit
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1 arose (directly or through 1 or more cor2 porations other than the common parent)

3 by such other corporation.

4 ‘‘(C) COORDINATION.—This paragraph

5 shall be applied after paragraph (1).

6 ‘‘(3) DETERMINATION OF DEFICIT.—In deter7 mining the amount of any deficit in earnings and

8 profits, the adjustments set forth in subsection (a)

9 shall apply.

10 ‘‘SEC. 953. SPECIAL RULES FOR CERTAIN INSURANCE COM11 PANIES.

12 ‘‘(a) SPECIAL RULE FOR CERTAIN CAPTIVE INSUR13 ANCE COMPANIES.—

14 ‘‘(1) IN GENERAL.—For purposes only of tak15 ing into account subpart F income which is attrib16 utable to related person insurance income—

17 ‘‘(A) the term ‘United States shareholder’

18 means, with respect to any foreign corporation,

19 a United States person (as defined in section

20 957(c)) who owns (within the meaning of sec21 tion 958(a)) any stock of the foreign corpora22 tion,

23 ‘‘(B) the term ‘controlled foreign corpora24 tion’ has the meaning given to such term by

25 section 957(a) determined by substituting ‘25
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1 percent or more’ for ‘more than 50 percent’,

2 and

3 ‘‘(C) the pro rata share referred to in sec4 tion 951(a)(1)(A)(i) shall be determined under

5 paragraph (5) of this subsection.

6 ‘‘(2) RELATED PERSON INSURANCE INCOME.—

7 For purposes of this subsection, the term ‘related

8 person insurance income’ means any insurance in9 come (within the meaning of subsection (c)) attrib10 utable to a policy of insurance or reinsurance with

11 respect to which the person (directly or indirectly)

12 insured is a United States shareholder in the foreign

13 corporation or a related person to such a share14 holder.

15 ‘‘(3) EXCEPTIONS.—

16 ‘‘(A) CORPORATIONS NOT HELD BY

17 INSUREDS.—Paragraph (1) shall not apply to

18 any foreign corporation if at all times during

19 the taxable year of such foreign corporation—

20 ‘‘(i) less than 20 percent of the total

21 combined voting power of all classes of

22 stock of such corporation entitled to vote,

23 and

24 ‘‘(ii) less than 20 percent of the total

25 value of such corporation,
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1 is owned (directly or indirectly) under the prin2 ciples of section 883(c)(4) by persons who are

3 (directly or indirectly) insured under any policy

4 of insurance or reinsurance issued by such cor5 poration or who are related persons to any such

6 person.

7 ‘‘(B) DE MINIMIS EXCEPTION.—Paragraph

8 (1) shall not apply to any foreign corporation

9 for a taxable year of such corporation if the re10 lated person insurance income (determined on a

11 gross basis) of such corporation for such tax12 able year is less than 20 percent of its insur13 ance income (as so determined) for such taxable

14 year determined without regard to those provi15 sions of subsection (c)(1) which limit insurance

16 income to income from countries other than the

17 country in which the corporation was created or

18 organized.

19 ‘‘(C) ELECTION TO TREAT INCOME AS EF20 FECTIVELY CONNECTED.—Paragraph (1) shall

21 not apply to any foreign corporation for any

22 taxable year if—

23 ‘‘(i) such corporation elects (at such

24 time and in such manner as the Secretary

25 may prescribe)—
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1 ‘‘(I) to treat its related person in2 surance income for such taxable year

3 as income effectively connected with

4 the conduct of a trade or business in

5 the United States, and

6 ‘‘(II) to waive all benefits (other

7 than with respect to section 884) with

8 respect to related person insurance in9 come granted by the United States

10 under any treaty between the United

11 States and any foreign country, and

12 ‘‘(ii) such corporation meets such re13 quirements as the Secretary shall prescribe

14 to ensure that the tax imposed by this

15 chapter on such income is paid.

16 An election under this subparagraph made for

17 any taxable year shall not be effective if the

18 corporation (or any predecessor thereof) was a

19 disqualified corporation for the taxable year for

20 which the election was made or for any prior

21 taxable year beginning after 1986.

22 ‘‘(D) SPECIAL RULES FOR SUBPARAGRAPH

23 (C).—

24 ‘‘(i) PERIOD DURING WHICH ELEC25 TION IN EFFECT.—
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1 ‘‘(I) IN GENERAL.—Except as

2 provided in subclause (II), any elec3 tion under subparagraph (C) shall

4 apply to the taxable year for which

5 made and all subsequent taxable years

6 unless revoked with the consent of the

7 Secretary.

8 ‘‘(II) TERMINATION.—If a for9 eign corporation which made an elec10 tion under subparagraph (C) for any

11 taxable year is a disqualified corpora12 tion for any subsequent taxable year,

13 such election shall not apply to any

14 taxable year beginning after such sub15 sequent taxable year.

16 ‘‘(ii) EXEMPTION FROM TAX IMPOSED

17 BY SECTION 4371.—The tax imposed by

18 section 4371 shall not apply with respect

19 to any related person insurance income

20 treated as effectively connected with the

21 conduct of a trade or business within the

22 United States under subparagraph (C).

23 ‘‘(E) DISQUALIFIED CORPORATION.—For

24 purposes of this paragraph the term ‘disquali25 fied corporation’ means, with respect to any
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1 taxable year, any foreign corporation which is a

2 controlled foreign corporation for an uninter3 rupted period of 30 days or more during such

4 taxable year (determined without regard to this

5 subsection) but only if a United States share6 holder (determined without regard to this sub7 section) owns (within the meaning of section

8 958(a)) stock in such corporation at some time

9 during such taxable year.

10 ‘‘(4) TREATMENT OF MUTUAL INSURANCE COM11 PANIES.—In the case of a mutual insurance com12 pany—

13 ‘‘(A) this subsection shall apply,

14 ‘‘(B) policyholders of such company shall

15 be treated as shareholders, and

16 ‘‘(C) appropriate adjustments in the appli17 cation of this subpart shall be made under reg18 ulations prescribed by the Secretary.

19 ‘‘(5) DETERMINATION OF PRO RATA SHARE.—

20 ‘‘(A) IN GENERAL.—The pro rata share

21 determined under this paragraph for any Unit22 ed States shareholder is the lesser of—

23 ‘‘(i) the amount which would be deter24 mined under paragraph (2) of section

25 951(a) if—
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1 ‘‘(I) only related person insur2 ance income were taken into account,

3 ‘‘(II) stock owned (within the

4 meaning of section 958(a)) by United

5 States shareholders on the last day of

6 the taxable year were the only stock

7 in the foreign corporation, and

8 ‘‘(III) only distributions received

9 by United States shareholders were

10 taken into account under subpara11 graph (B) of such paragraph (2), or

12 ‘‘(ii) the amount which would be de13 termined under paragraph (2) of section

14 951(a) on the basis of the entire subpart

15 F income of the foreign corporation for the

16 taxable year.

17 ‘‘(B) COORDINATION WITH OTHER PROVI18 SIONS.—The Secretary shall prescribe regula19 tions providing for such modifications to the

20 provisions of this subpart as may be necessary

21 or appropriate by reason of subparagraph (A).

22 ‘‘(6) RELATED PERSON.—For purposes of this

23 subsection—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), the term ‘related person’ has

3 the meaning given such term by section 964(a).

4 ‘‘(B) TREATMENT OF CERTAIN LIABILITY

5 INSURANCE POLICIES.—In the case of any pol6 icy of insurance covering liability arising from

7 services performed as a director, officer, or em8 ployee of a corporation or as a partner or em9 ployee of a partnership, the person performing

10 such services and the entity for which such

11 services are performed shall be treated as relat12 ed persons.

13 ‘‘(7) COORDINATION WITH SECTION 1248.—For

14 purposes of section 1248, if any person is (or would

15 be but for paragraph (3)) treated under paragraph

16 (1) as a United States shareholder with respect to

17 any foreign corporation which would be taxed under

18 subchapter L if it were a domestic corporation and

19 which is (or would be but for paragraph (3)) treated

20 under paragraph (1) as a controlled foreign corpora21 tion—

22 ‘‘(A) such person shall be treated as meet23 ing the stock ownership requirements of section

24 1248(a)(2) with respect to such foreign cor25 poration, and
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1 ‘‘(B) such foreign corporation shall be

2 treated as a controlled foreign corporation.

3 ‘‘(8) REGULATIONS.—The Secretary shall pre4 scribe such regulations as may be necessary to carry

5 out the purposes of this subsection, including—

6 ‘‘(A) regulations preventing the avoidance

7 of this subsection through cross insurance ar8 rangements or otherwise, and

9 ‘‘(B) regulations which may provide that a

10 person will not be treated as a United States

11 shareholder under paragraph (1) with respect

12 to any foreign corporation if neither such per13 son (nor any related person to such person) is

14 (directly or indirectly) insured under any policy

15 of insurance or reinsurance issued by such for16 eign corporation.

17 ‘‘(b) ELECTION BY FOREIGN INSURANCE COMPANY

18 TO BE TREATED AS DOMESTIC CORPORATION.—

19 ‘‘(1) IN GENERAL.—If—

20 ‘‘(A) a foreign corporation is a controlled

21 foreign corporation (as defined in section

22 957(a) by substituting ‘25 percent or more’ for

23 ‘more than 50 percent’ and by using the defini24 tion of United States shareholder under sub25 section (a)(1)(A)),
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1 ‘‘(B) such foreign corporation would qual2 ify under part I or II of subchapter L for the

3 taxable year if it were a domestic corporation,

4 ‘‘(C) such foreign corporation meets such

5 requirements as the Secretary shall prescribe to

6 ensure that the taxes imposed by this chapter

7 on such foreign corporation are paid, and

8 ‘‘(D) such foreign corporation makes an

9 election to have this paragraph apply and

10 waives all benefits to such corporation granted

11 by the United States under any treaty,

12 for purposes of this title, such corporation shall be

13 treated as a domestic corporation.

14 ‘‘(2) PERIOD DURING WHICH ELECTION IS IN

15 EFFECT.—

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

17 subparagraph (B), an election under paragraph

18 (1) shall apply to the taxable year for which

19 made and all subsequent taxable years unless

20 revoked with the consent of the Secretary.

21 ‘‘(B) TERMINATION.—If a corporation

22 which made an election under paragraph (1) for

23 any taxable year fails to meet the requirements

24 of subparagraphs (A), (B), and (C), of para25 graph (1) for any subsequent taxable year, such
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1 election shall not apply to any taxable year be2 ginning after such subsequent taxable year.

3 ‘‘(3) TREATMENT OF LOSSES.—If any corpora4 tion treated as a domestic corporation under this

5 subsection is treated as a member of an affiliated

6 group for purposes of chapter 6 (relating to consoli7 dated returns), any loss of such corporation shall be

8 treated as a dual consolidated loss for purposes of

9 section 1503(d) without regard to paragraph (2)(B)

10 thereof.

11 ‘‘(4) EFFECT OF ELECTION.—

12 ‘‘(A) IN GENERAL.—For purposes of sec13 tion 367, any foreign corporation making an

14 election under paragraph (1) shall be treated as

15 transferring (as the 1st day of the 1st taxable

16 year to which such election applies) all of its as17 sets to a domestic corporation in connection

18 with an exchange to which section 354 applies.

19 ‘‘(B) EXCEPTION FOR PRE-1988 EARNINGS

20 AND PROFIT.—

21 ‘‘(i) IN GENERAL.—Earnings and

22 profits of the foreign corporation accumu23 lated in taxable years beginning before

24 January 1, 1988, shall not be included in

25 the gross income of the persons holding
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1 stock in such corporation by reason of sub2 paragraph (A).

3 ‘‘(ii) TREATMENT OF DISTRIBU4 TIONS.—For purposes of this title, any dis5 tribution made by a corporation to which

6 an election under paragraph (1) applies

7 out of earnings and profits accumulated in

8 taxable years beginning before January 1,

9 1988, shall be treated as a distribution

10 made by a foreign corporation.

11 ‘‘(iii) CERTAIN RULES TO CONTINUE

12 TO APPLY TO PRE-1988 EARNINGS.—The

13 provisions specified in clause (iv) shall be

14 applied without regard to paragraph (1),

15 except that, in the case of a corporation to

16 which an election under paragraph (1) ap17 plies, only earnings and profits accumu18 lated in taxable years beginning before

19 January 1, 1988, shall be taken into ac20 count.

21 ‘‘(iv) SPECIFIED PROVISIONS.—The

22 provisions specified in this clause are:

23 ‘‘(I) Section 1248 (relating to

24 gain from certain sales or exchanges
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1 of stock in certain foreign corpora2 tions).

3 ‘‘(II) This subpart to the extent

4 such subpart related to earnings in5 vested in United States property or

6 amounts referred to in clause (ii) or

7 (iii) of section 951(a)(1)(A).

8 ‘‘(III) Section 884 to the extent

9 the foreign corporation reinvested

10 1987 earnings and profits in United

11 States assets.

12 ‘‘(5) EFFECT OF TERMINATION.—For purposes

13 of section 367, if—

14 ‘‘(A) an election is made by a corporation

15 under paragraph (1) for any taxable year, and

16 ‘‘(B) such election ceases to apply for any

17 subsequent taxable year,

18 such corporation shall be treated as a domestic cor19 poration transferring (as of the 1st day of such sub20 sequent taxable year) all of its property to a foreign

21 corporation in connection with an exchange to which

22 section 354 applies.

23 ‘‘(6) ADDITIONAL TAX ON CORPORATION MAK24 ING ELECTION.—
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1 ‘‘(A) IN GENERAL.—If a corporation

2 makes an election under paragraph (1), the

3 amount of tax imposed by this chapter for the

4 1st taxable year to which such election applies

5 shall be increased by the amount determined

6 under subparagraph (B).

7 ‘‘(B) AMOUNT OF TAX.—The amount of

8 tax determined under this paragraph shall be

9 equal to the lesser of—

‘‘(i) 3 10 ⁄4 of 1 percent of the aggregate

11 amount of capital and accumulated surplus

12 of the corporation as of December 31,

13 1987, or

14 ‘‘(ii) $1,500,000.

15 ‘‘(c) INSURANCE INCOME DEFINED.—For purposes

16 of this section, the term ‘insurance income’ means any in17 come which—

18 ‘‘(1) is attributable to the issuing (or reinsur19 ing) of any insurance or annuity contract—

20 ‘‘(A) in connection with property in, liabil21 ity arising out of activity in, or in connection

22 with the lives or health of residents of, a coun23 try other than the country under the laws of

24 which the controlled foreign corporation is cre25 ated or organized, or
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1 ‘‘(B) in connection with risks not described

2 in subparagraph (A) as the result of any ar3 rangement whereby another corporation receives

4 a substantially equal amount of premiums or

5 other consideration in respect of issuing (or re6 insuring) a contract described in subparagraph

7 (A), and

8 ‘‘(2) would (subject to the modifications pro9 vided by paragraphs (1) and (2) of subsection (d))

10 be taxed under subchapter L of this chapter if such

11 income were the income of a domestic insurance

12 company.

13 ‘‘(d) SPECIAL RULES.—In determining the amount

14 of insurance income—

15 ‘‘(1) The following provisions of subchapter L

16 shall not apply:

17 ‘‘(A) The small life insurance company de18 duction.

19 ‘‘(B) Section 805(a)(5) (relating to oper20 ations loss deduction).

21 ‘‘(C) Section 832(c)(5) (relating to certain

22 capital losses).

23 ‘‘(2) The items referred to in—

24 ‘‘(A) section 803(a)(1) (relating to gross

25 amount of premiums and other considerations),
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1 ‘‘(B) section 803(a)(2) (relating to net de2 crease in reserves),

3 ‘‘(C) section 805(a)(2) (relating to net in4 crease in reserves), and

5 ‘‘(D) section 832(b)(4) (relating to pre6 miums earned on insurance contracts),

7 shall be taken into account only to the extent they

8 are in respect of any reinsurance or the issuing of

9 any insurance or annuity contract described in sub10 section (a)(1).

11 ‘‘(3) All items of income, expenses, losses, and

12 deductions shall be properly allocated or apportioned

13 under regulations prescribed by the Secretary.’’

14 (b) REPEAL OF EXPORT TRADE CORPORATION PRO15 VISIONS.—Subpart G of part III of subchapter N of chap16 ter 1 of such Code (relating to export trade corporations)

17 is hereby repealed.

18 (c) CONFORMING AMENDMENTS TO SUBPART F.—

19 (1) Subparagraph (A) of section 955(a)(1) of

20 such Code is amended by inserting ‘‘(as in effect for

21 taxable years beginning before 1987)’’ after ‘‘section

22 954(b)(2)’’.

23 (2) Subsection (b) of section 955 of such Code

24 is amended by striking ‘‘within the meaning of sec-
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1 tion 954(d)(3)’’ and inserting ‘‘within the meaning

2 of section 964(a)’’.

3 (3) Paragraph (2) of section 956(c) of such

4 Code is amended—

5 (A) by striking ‘‘section 953(a)(1)’’ in sub6 paragraph (E) and inserting ‘‘section

7 953(c)(1)’’, and

8 (B) by inserting ‘‘(as in effect on the day

9 before the date of the enactment of the Job

10 Creation and Invest in America Act of 1995) or

11 under section 952(a)(1)’’ after ‘‘section 952(b)’’

12 in subparagraph (H).

13 (4) Subsection (b) of section 957 of such Code

14 is amended—

15 (A) by striking ‘‘income described in sec16 tion 953(a)’’ and inserting ‘‘subpart F income

17 attributable to income described in section

18 953(c)’’, and

19 (B) by striking ‘‘section 953(a)(1)’’ and in20 serting ‘‘section 953(c)(1)’’.

21 (5) Subsection (b) of section 958 of such Code

22 is amended—

23 (A) by striking ‘‘954(d)(3), 956(b)(2), and

24 957’’ and inserting ‘‘956(b)(2), 957, and

25 964(a)’’, and
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1 (B) by striking ‘‘954(d)(3)’’ the second

2 place it appears and inserting ‘‘964(a)’’.

3 (6) Subsection (b) of section 959 of such Code

4 is amended by striking ‘‘be also included in the gross

5 income’’ and inserting ‘‘be also included in the sub6 part F income’’.

7 (7) Subsection (a) of section 964 of such Code

8 is amended to read as follows:

9 ‘‘(a) RELATED PERSON.—For purposes of this part,

10 a person is a related person with respect to a controlled

11 foreign corporation, if—

12 ‘‘(1) such person is an individual, corporation,

13 partnership, trust, or estate which controls, or is

14 controlled by, the controlled foreign corporation, or

15 ‘‘(2) such person is a corporation, partnership,

16 trust, or estate which is controlled by the same per17 son or persons which control the controlled foreign

18 corporation.

19 For purposes of the preceding sentence, control means,

20 with respect to a corporation, the ownership, directly or

21 indirectly, of stock possessing more than 50 percent of the

22 total voting power of all classes of stock entitled to vote

23 or of the total value of stock of such corporation. In the

24 case of a partnership, trust, or estate, control means the

25 ownership, directly or indirectly, more than 50 percent (by
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1 value) of the beneficial interests in such partnership, trust,

2 or estate. For purposes of this paragraph, rules similar

3 to the rules of section 958 shall apply.’’

4 (8) Section 964 of such Code is amended by

5 striking subsection (b).

6 (9) The table of sections for subpart F of part

7 III of subchapter N of chapter 1 of such Code is

8 amended by striking the items relating to sections

9 952, 953 and 954 and inserting the following:

‘‘Sec. 952. Subpart F income.

‘‘Sec. 953. Special rules for certain insurance companies.’’

10 (f) OTHER CONFORMING AMENDMENTS.—

11 (1) Paragraph (2) of section 552(c) of such

12 Code is amended—

13 (A) by amending subparagraph (A) to read

14 as follows:

15 ‘‘(A) is received from a related person

16 which (i) is a corporation created or organized

17 under the laws of the same foreign country

18 under the laws of which the foreign corporation

19 involved was created or organized, and (ii) has

20 a substantial part of its assets used in its trade

21 or business located in such same foreign coun22 try, and’’, and

23 (B) by striking ‘‘954(d)(3)’’ and inserting

24 ‘‘964(a)’’.
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1 (2) Subparagraph (B) of section 861(c)(2) of

2 such Code is amended by striking ‘‘954(d)(3)’’ and

3 inserting ‘‘964(a)’’.

4 (3) Subparagraph (A) of section 864(d)(5) of

5 such Code is amended by striking clauses (ii), (iii),

6 and (iv).

7 (4) Subparagraph (A) of section 881(c)(5) of

8 such Code is hereby repealed.

9 (5) Subparagraph (D) of section 884(d)(2) of

10 such Code is amended by striking ‘‘953(c)(3)(C)’’

11 and inserting ‘‘953(a)(3)(C)’’.

12 (6) Subparagraph (A) of section 898(b)(3) of

13 such Code is amended—

14 (A) by striking ‘‘953(c)(2)’’ and inserting

15 ‘‘953(a)(2)’’, and

16 (B) by striking ‘‘953(c)(1) and inserting

17 ‘‘953(a)(1)’’.

18 (7) Clause (i) of section 904(d)(2)(A) of such

19 Code is amended by inserting ‘‘, as in effect on the

20 day before the date of the enactment of the Job Cre21 ation and Invest in America Act of 1995,’’ after

22 ‘‘section 954(c)’’.

23 (8) Subclause (III) of section 904(d)(2)(C)(ii)

24 of such Code is amended by striking ‘‘953(a)’’ and

25 inserting ‘‘953(c)’’.
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1 (9) Subparagraph (D) of section 904(d)(2) of

2 such Code is amended—

3 (A) by inserting ‘‘, as in effect on the day

4 before the date of the enactment of the Job

5 Creation and Invest in America Act of 1995,’’

6 after ‘‘954(f)’’, and

7 (B) by inserting ‘‘or passive income’’ be8 fore the period at the end thereof.

9 (10) Subparagraph (H) of section 904(d)(2) of

10 such Code is amended by striking ‘‘954(d)(3)’’ and

11 inserting ‘‘964(a)’’.

12 (11) Subparagraph (E) of section 904(d)(3) of

13 such Code is hereby repealed.

14 (12) Subparagraph (C) of section 988(a)(3) of

15 such Code is amended by striking ‘‘954(d)(3)’’ and

16 inserting ‘‘964(a)’’.

17 (13) Subsection (c) of section 999 of such Code

18 is amended—

19 (A) by striking ‘‘, 952(a)(3),’’ in para20 graph (1), and

21 (B) by striking ‘‘, the addition to subpart

22 F income under section 952(a)(3),’’ in para23 graph (2).
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1 (14) Subsection (a) of section 6046 of such

2 Code is amended by striking ‘‘953(c)’’ and inserting

3 ‘‘953(a)’’.

4 (15) The table of subparts for part III of sub5 chapter M of chapter 1 of such Code is amended by

6 striking the item relating to subpart G.

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

8 this section shall apply to taxable years of controlled for9 eign corporations beginning after December 31, 1995, and

10 to the taxable years of United States shareholders with

11 which (or in which) such taxable years of controlled for12 eign corporations end.

13 SEC. 3105. USE OF FORMULAIC APPROACH UNDER SECTION

14 482.

15 Not later than January 1, 1996, the Secretary of the

16 Treasury or his delegate shall prescribe regulations under

17 section 482 of the Internal Revenue Code of 1986 which

18 use a formulaic approach to clearly reflect income of mul19 tinational corporations.

20 SEC. 3106. REPEAL OF INCREASE IN BASIS OF PROPERTY

21 ACQUIRED FROM A DECEDENT.

22 (a) IN GENERAL.—Section 1014 of the Internal Rev23 enue Code of 1986 (relating to basis of property acquired

24 from a decedent) is hereby repealed.
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1 (b) BASIS TO BE DETERMINED UNDER RULES AP2 PLICABLE TO GIFTS.—Section 1015 of such Code (relat3 ing to basis of property acquired by gifts and transfers

4 in trusts) is amended by adding at the end the following

5 new subsection:

6 ‘‘(f) PROPERTY ACQUIRED FROM OR PASSING FROM

7 A DECEDENT.—

8 ‘‘(1) IN GENERAL.—Property acquired from a

9 decedent dying after December 31, 1995, or passed

10 from such a decedent shall be treated for purposes

11 of subsection (a) as acquired by gift for purposes of

12 this section.

13 ‘‘(2) PROPERTY ACQUIRED FROM A DECE14 DENT.—Section 1014(b) (as in effect on the day be15 fore the date of the enactment of the Citizens’ Tax

16 Relief Act of 1995) shall apply for purposes of

17 whether property is considered to have been acquired

18 from or to have passed from the decedent.

19 ‘‘(3) INCREASE IN BASIS FOR ESTATE TAX

20 PAID.—

21 ‘‘(A) IN GENERAL.—The basis of any

22 property which this subsection applies shall be

23 the basis determined under subsection (a) in24 creased by the portion of the aggregate death
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1 tax adjustment which is allocated to the prop2 erty pursuant to this paragraph.

3 ‘‘(B) LIMITATION.—The death tax adjust4 ment for any property shall not exceed—

5 ‘‘(i) the net appreciation in such prop6 erty, multiplied by

7 ‘‘(ii) the Federal marginal estate tax

8 rate.

9 ‘‘(C) NET APPRECIATION.—For purposes

10 of this paragraph, the net appreciation in value

11 of any property is the amount by which—

12 ‘‘(i) the fair market value of such

13 property, exceeds

14 ‘‘(ii) the initial basis of such property

15 increased by the minimum basis adjust16 ment of such property.

17 ‘‘(4) AGGREGATE DEATH TAX ADJUSTMENT.—

18 In the case of any estate—

19 ‘‘(A) IN GENERAL.—The aggregate death

20 tax adjustment is the product of—

21 ‘‘(i) the aggregate net appreciation of

22 all properties which have net appreciation,

23 and

24 ‘‘(ii) the Federal marginal estate tax

25 rate.
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1 ‘‘(B) LIMITATION.—The amount taken

2 into account under subparagraph (A)(i) shall

3 not exceed the taxable estate.

4 ‘‘(C) FEDERAL MARGINAL ESTATE TAX

5 RATE.—The term ‘Federal marginal estate tax

6 rate’ means the highest rate in the rate sched7 ule set forth in section 2001(c)—

8 ‘‘(i) which is used in determining the

9 tentative tax under section 2001(b)(1) with

10 respect to the estate of the decedent, and

11 ‘‘(ii) the amount subject to which is at

12 least $50,000.

13 In no event shall the Federal marginal estate

14 tax rate be less than 30 percent.

15 ‘‘(5) ALLOCATION RULES.—The executor shall

16 allocate the adjustments under this subsection

17 among the properties on the return of the tax im18 posed by chapter 11.’’.

19 (c) CONFORMING AMENDMENTS.—

20 (1) The table of sections for part II of sub21 chapter O of chapter 1 of such Code is amended by

22 striking the item relating to section 1014.

23 (2) The heading of section 1015 of such Code

24 is amended to read as follows:
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1 ‘‘SEC. 1015. BASIS OF PROPERTY ACQUIRED BY GIFT, FROM

2 A DECEDENT, OR TRANSFERRED IN TRUST.’’.

3 (3) The table of sections for part II of sub4 chapter O of chapter 1 of such Code is amended by

5 striking the item relating to section 1015 and insert6 ing the following new item:

‘‘Sec. 1015. Basis of property acquired by gift, from a decedent,

or transferred in trust.’’.

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

8 this section shall apply to decedents dying after December

9 31, 1995.

10 SEC. 3107. PHASE IN OF CAPITAL GAINS TAX ON INHERITED

11 PROPERTY.

12 (a) IN GENERAL.—Subsection (h) of section 1 of the

13 Internal Revenue Code of 1986 (relating to maximum cap14 ital gains rate) is amended to read as follows:

15 ‘‘(h) MAXIMUM CAPITAL GAINS RATE.—

16 ‘‘(1) IN GENERAL.—If a taxpayer has a net

17 capital gain for any taxable year, then the tax im18 posed by this section shall not exceed the sum of—

19 ‘‘(A) a tax computed at the rates and in

20 the same manner as if this subsection had not

21 been enacted on the greater of—

22 ‘‘(i) taxable income reduced by the

23 amount of the net capital gain, or
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1 ‘‘(ii) the amount of taxable income

2 taxed at a rate below 28 percent, plus

3 ‘‘(B) a tax equal to the sum of—

4 ‘‘(i) the applicable percentage of so

5 much of such net capital gain as is attrib6 utable to property acquired by the tax7 payer from a decedent dying after Decem8 ber 31, 1995 (or passed to the taxpayer

9 from such a decedent), and

10 ‘‘(ii) 28 percent of the amount of the

11 taxable income in excess of the sum of the

12 amount determined under subparagraph

13 (A) and the net capital gain described in

14 clause (i) of this subparagraph.

15 ‘‘(2) APPLICABLE PERCENTAGE.—For purposes

16 of paragraph (1), the term ‘applicable percentage’

17 means—

18 ‘‘(A) 10 percent in the case of taxable

19 years beginning after December 31, 1994, and

20 before January 1, 1997,

21 ‘‘(B) 15 percent in the case of taxable

22 years beginning during 1997,

23 ‘‘(C) 20 percent in the case of taxable

24 years beginning during 1998, and
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1 ‘‘(D) 25 percent in the case of taxable

2 years beginning during 1999.

3 ‘‘(3) ELECTION TO MARK-TO-MARKET PROP4 ERTY ACQUIRED FROM A DECEDENT.—If the tax5 payer elects this paragraph with respect to any prop6 erty described in paragraph (1)(B)(i), such property

7 shall be treated as sold (for its fair market value as

8 of the first day of the taxpayer year) and any gain

9 or loss shall be treated as received or accrued on

10 such day.’’.

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

12 this section shall apply to taxable years ending after De13 cember 31, 1995.

14 SEC. 3108. ADDITIONAL EXCLUSION OF GAIN ON SALE OF

15 PRINCIPAL RESIDENCE ACQUIRED FROM A

16 DECEDENT.

17 (a) IN GENERAL.—Subsection (d) of section 121 of

18 the Internal Revenue Code of 1986 (relating to one-time

19 exclusion of gain from sale of principal residence by indi20 vidual who has attained age 55) is amended by adding

21 at the end the following new paragraph:

22 ‘‘(10) SPECIAL RULES FOR RESIDENCE AC23 QUIRED FROM DECEDENT.—

24 ‘‘(A) IN GENERAL.—In the case of a resi25 dence which was acquired by the taxpayer from
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1 a decedent dying after December 31, 1995, or

2 to whom such residence passed from such a de3 cedent (within the meaning of section

4 1015(f)(2))—

5 ‘‘(i) subsection (a)(1) shall not apply,

6 ‘‘(ii) the requirement of subsection

7 (a)(2) shall be treated as met if the dece8 dent satisfied such requirement as of the

9 date of death or the taxpayer satisfies such

10 requirement, and

11 ‘‘(iii) subsection (b)(1) shall be ap12 plied by substituting ‘$250,000’ for

13 ‘$125,000’ and ‘$125,000’ for ‘$62,500’.

14 ‘‘(B) ADDITIONAL ELECTION.—Any elec15 tion under this section with respect to any resi16 dence to which subparagraph (A) applies shall

17 not be taken into account in determining

18 whether any other election may be made under

19 this section.’’.

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

21 this section shall apply to sales and exchanges after De22 cember 31, 1995, in taxable years ending after such date.
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1 TITLE IV—APPROPRIATIONS

2 SEC. 4001. APPROPRIATIONS.

3 There is hereby appropriated for any fiscal year, out

4 of any money in the Treasury not otherwise appropriated,

5 an amount equal to each amount authorized by this Act

6 for such fiscal year. Any amount appropriated under the

7 preceding sentence for any fiscal year shall be expended

8 only for the purpose for which authorized and shall remain

9 available until the close of the second following fiscal year.

10 SEC. 4002. DESIGNATION AS EMERGENCY REQUIREMENT.

11 The entire amount appropriated under this Act is

12 designated by Congress as an emergency requirement pur13 suant to section 251(b)(2)(D)(i) of the Balanced Budget

14 and Emergency Deficit Control Act of 1985.

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