I

104TH CONGRESS

1ST SESSION H. R. 792

To amend the Internal Revenue Code of 1986 to provide incentives for

investments in tax enterprise zone businesses and domestic businesses.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 2, 1995

Mr. ANDREWS introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

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

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

3 SECTION 1. SHORT TITLE.

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

5 Economic Growth Act’’.

6 SEC. 2. EXCLUSION FOR GAIN ON INVESTMENTS IN ENTER7 PRISE ZONE BUSINESSES AND DOMESTIC

8 BUSINESSES.

9 (a) IN GENERAL.—Part III of subchapter B of chap10 ter 1 of the Internal Revenue Code of 1986 (relating to
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1 items specifically excluded from gross income) is amended

2 by redesignating section 137 as section 138 and by insert3 ing after section 136 the following new section:

4 ‘‘SEC. 137. GAIN ON INVESTMENTS IN ENTERPRISE ZONE

5 BUSINESSES AND DOMESTIC BUSINESSES.

6 ‘‘(a) GENERAL RULE.—Gross income does not in7 clude any qualified investment gain.

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

9 of this section—

10 ‘‘(1) IN GENERAL.—The term ‘qualified invest11 ment gain’ means the eligible percentage of any

12 long-term capital gain properly attributable to any

13 sale or exchange of a qualified investment, other

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

15 the meaning of section 267(b)).

16 ‘‘(2) ELIGIBLE PERCENTAGE.—The term ‘eligi17 ble percentage’ means—

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

19 investment with respect to an enterprise zone

20 business or urban enterprise zone, and

21 ‘‘(B) 50 percent, in the case of any quali22 fied investment not described in subparagraph

23 (A).

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

25 this section—
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1 ‘‘(1) IN GENERAL.—The term ‘qualified invest2 ment’ means any eligible investment, if the holding

3 period of the taxpayer with respect to such invest4 ment is not less than 1 year.

5 ‘‘(2) ELIGIBLE INVESTMENT.—The term ‘eligi6 ble investment’ means the following:

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

8 other ownership interest in an enterprise zone

9 business or domestic business.

10 ‘‘(B) Any real property located entirely

11 within an urban enterprise zone.

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

13 company, if all of the investments held by such

14 fund in each year are qualified investments.

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

16 ‘enterprise zone business’ has the meaning given to

17 such term by section 1397B.

18 ‘‘(4) DOMESTIC BUSINESS.—The term ‘domes19 tic business’ means any corporation or partnership

20 (other than an enterprise zone business) incor21 porated or formed in the United States if—

22 ‘‘(A) not less than 80 percent of the em23 ployees of the corporation or partnership are

24 United States citizens employed within the

25 United States, and
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1 ‘‘(B) either—

2 ‘‘(i) the corporation devotes more then

3 25 percent of its annual expenses to pay4 roll, or

5 ‘‘(ii) substantially all of the activities

6 of the corporation or partnership involve

7 the active conduct of 1 or more trades or

8 businesses in the United States.

9 ‘‘(d) DEFINITIONS AND SPECIAL RULES.—For pur10 poses of this section—

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

12 ‘urban enterprise zone’ means any empowerment

13 zone, or enterprise community, which is located

14 within an urban area (as defined in section 1393).

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

16 new corporation or partnership shall be treated as

17 an enterprise zone business or domestic business if

18 such corporation or partnership certifies an intent to

19 comply with the requirements set forth in subsection

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

21 ‘‘(e) COORDINATION WITH INVESTMENT SAVINGS

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

23 any amount distributed out of an investment savings ac24 count (within the meaning of section 220(c)).’’
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1 (b) CLERICAL AMENDMENT.—The table of sections

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

3 is amended by striking the item relating to section 137

4 and inserting the following:

‘‘Sec. 137. Gain on investments in enterprise zone businesses and

domestic businesses.

‘‘Sec. 138. Cross references to other Acts.’’

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

6 this section shall apply taxable years beginning after the

7 date of the enactment of this Act.

8 SEC. 3. DEDUCTION FOR CONTRIBUTIONS TO INVESTMENT

9 SAVINGS ACCOUNTS.

10 (a) IN GENERAL.—Part VII of subchapter B of chap11 ter 1 of the Internal Revenue Code of 1986 (relating to

12 additional itemized deductions for individuals) is amended

13 by redesignating section 220 as section 221 and by insert14 ing after section 219 the following new section:

15 ‘‘SEC. 220. CONTRIBUTIONS TO INVESTMENT SAVINGS AC16 COUNTS.

17 ‘‘(a) DEDUCTION ALLOWED.—

18 ‘‘(1) IN GENERAL.—In the case of an individ19 ual, there shall be allowed as a deduction for the

20 taxable year an amount equal to the sum of—

21 ‘‘(A) 50 percent of the qualified contribu22 tions of the individual to an investment savings

23 account for the taxable year, and
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‘‘(B) if the individual is not less than 591 1 ⁄2

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

3 amount equal to the sum of—

4 ‘‘(i) 50 percent of the qualified con5 tributions of the individual to an invest6 ment savings account for the 10th preced7 ing taxable year, to the extent such con8 tributions remain in the account, and

9 ‘‘(ii) 50 percent of the qualified con10 tributions of the individual to an invest11 ment savings account for the 20th preced12 ing taxable year, to the extent such con13 tributions remain in the account.

14 ‘‘(2) MAXIMUM ANNUAL AMOUNT.—The

15 amount allowable as a deduction under paragraph

16 (1) to any individual for a taxable year shall not ex17 ceed $100,000.

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

19 this section—

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

21 of an individual for any taxable year shall be the

22 amount equal to the lesser of—

23 ‘‘(A) the individual’s qualified savings in24 crease amount for the taxable year, or
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1 ‘‘(B) the contributions made by the indi2 vidual to the investment savings account during

3 the taxable year.

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

5 The term ‘qualified savings increase amount’ means

6 the amount (if any) by which—

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

8 increase amount, exceeds

9 ‘‘(B) the applicable threshold amount.

10 ‘‘(3) QUALIFIED NET WORTH INCREASE

11 AMOUNT.—

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

13 net worth increase amount’ means the amount

14 (if any) by which—

15 ‘‘(i) qualified net worth on December

16 31 of the taxable year, exceeds

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

18 of such taxable year.

19 ‘‘(B) QUALIFIED NET WORTH.—The term

20 ‘qualified net worth’ means net worth, deter21 mined without regard to any portion of the

22 value of property which is in excess of the ad23 justed basis.

24 ‘‘(4) APPLICABLE THRESHOLD AMOUNT.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraph (B), the term ‘applicable thresh3 old amount’ means the national average quali4 fied net worth increase amount determined by

5 the Secretary for the taxable year for the tax

6 rate category of the taxpayer.

7 ‘‘(B) 1ST YEAR.—For taxable years begin8 ning in 1996, the term ‘applicable threshold

9 amount’ means the applicable percentage of the

10 taxpayer’s adjusted gross income, determined in

11 accordance with the following table:

Applicable

‘‘If adjusted gross income is: Percentage:

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

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

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

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

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

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

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

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

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

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

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

12 ‘‘(5) TIME WHEN CONTRIBUTIONS DEEMED

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

14 contribution to an investment savings account on the

15 last day of the preceding taxable year if the con16 tribution is made on account of such taxable year

17 and is made not later than the time prescribed by

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

19 including extensions thereof).
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1 ‘‘(c) INVESTMENT SAVINGS ACCOUNT.—For pur2 poses of this section, the term ‘investment savings ac3 count’ means a trust created or organized in the United

4 States for the exclusive benefit of an individual and the

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

6 instrument creating the trust meets the following require7 ments:

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

9 is in cash.

10 ‘‘(2) The trustee is a bank (as defined in sec11 tion 408(n)) or another person who demonstrates to

12 the satisfaction of the Secretary that the manner in

13 which that person will administer the trust will be

14 consistent with the requirements of this section.

15 ‘‘(3) The trust assets will be invested only in—

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

17 section 137(c)(2)),

18 ‘‘(B) bonds issued by enterprise zone busi19 ness and domestic business, and

20 ‘‘(C) loans to enterprise zone businesses

21 and domestic businesses.

22 ‘‘(4) The interest of the individual in the bal23 ance of the individual’s account is nonforfeitable.
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1 ‘‘(5) The assets of the trust will not be commin2 gled with other property except in a common trust

3 fund or common investment fund.

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

5 ‘‘(1) IN GENERAL.—Except as otherwise pro6 vided in this subsection, any amount distributed out

7 of an investment savings account shall be included

8 in the gross income of the distributee for the taxable

9 year in which the distribution is received.

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

11 YEARS.—Paragraph (1) shall not apply to any dis12 tribution from an investment savings account to the

13 extent attributable to amounts held in the account

14 for at least a 10-year period.

15 ‘‘(3) EXCESS CONTRIBUTIONS RETURNED BE16 FORE DUE DATE OF RETURN.—Paragraph (1) shall

17 not apply to the distribution of any contribution paid

18 during a taxable year to an investment savings ac19 count to the extent that such contribution exceeds

20 the amount allowable as a deduction under sub21 section (a) if—

22 ‘‘(A) such distribution is received on or be23 fore the day prescribed by law (including exten24 sions of time) for filing such individual’s return

25 for such taxable year,
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1 ‘‘(B) no deduction is allowed under sub2 section (a) with respect to such excess contribu3 tion, and

4 ‘‘(C) such distribution is accompanied by

5 the amount of net income attributable to such

6 excess contribution.

7 Any net income described in subparagraph (C) shall

8 be included in the gross income of the individual for

9 the taxable year in which such excess contribution

10 was made.

11 ‘‘(e) TAX TREATMENT OF ACCOUNTS.—

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

13 savings account is exempt from taxation under this

14 subtitle unless such account has ceased to be an in15 vestment savings account by reason of paragraph

16 (2). Notwithstanding the preceding sentence, any

17 such account is subject to the taxes imposed by sec18 tion 511 (relating to imposition of tax on unrelated

19 business income of charitable, etc. organizations).

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

21 INDIVIDUAL ENGAGES IN PROHIBITED TRANS22 ACTION.—

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

24 whose benefit an investment savings account is

25 established or any individual who contributes to
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1 such account engages in any transaction prohib2 ited by section 4975 with respect to the ac3 count, the account shall cease to be an invest4 ment savings account as of the first day of the

5 taxable year (of the individual so engaging in

6 such transaction) during which such transaction

7 occurs.

8 ‘‘(B) ACCOUNT TREATED AS DISTRIBUTING

9 ALL ITS ASSETS.—In any case in which any ac10 count ceases to be an investment savings ac11 count by reason of subparagraph (A) as of the

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

13 subsection (d) shall apply as if there was a dis14 tribution on such first day in an amount equal

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

16 all assets in the account (on such first day).

17 ‘‘(3) EFFECT OF PLEDGING ACCOUNT AS SECU18 RITY.—If, during any taxable year, the individual for

19 whose benefit an investment savings account is es20 tablished, or any individual who contributes to such

21 account, uses the account or any portion thereof as

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

23 treated as distributed to the individual so using such

24 portion.
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1 ‘‘(f) ADDITIONAL TAX ON CERTAIN AMOUNTS IN2 CLUDED IN GROSS INCOME.—

3 ‘‘(1) IN GENERAL.—Except as otherwise pro4 vided in this subsection, in the case of any distribu5 tion from an investment savings account, the tax li6 ability of each distributee under this chapter for the

7 taxable year in which the distribution is received

8 shall be increased by an amount equal to 10 percent

9 of the amount of the distribution which is includible

10 in the gross income of such distributee for such tax11 able year.

12 ‘‘(2) QUALIFIED DISTRIBUTIONS FROM

13 AMOUNTS HELD IN ACCOUNT FOR 5 YEARS.—

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

15 not apply to any qualified distribution from an

16 investment savings account, to the extent at17 tributable to amounts held in the account for at

18 least a 5-year period.

19 ‘‘(B) QUALIFIED DISTRIBUTION.—For

20 purposes of subparagraph (A), the term ‘quali21 fied distribution’ means any distribution re22 ceived from an investment savings account, to

23 the extent used within a reasonable period to

24 pay any of the following expenses:
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1 ‘‘(i) HOME PURCHASE EXPENSES.—

2 Expenses relating to the acquisition of a

3 principal residence (within the meaning of

4 section 1034) for the individual for whose

5 benefit the account is established.

6 ‘‘(ii) AUTOMOBILE PURCHASE EX7 PENSES.—Expenses relating to the acquisi8 tion of an automobile for the individual for

9 whose benefit the account is established.

10 ‘‘(iii) EDUCATION EXPENSES.—Quali11 fied higher education expenses (within the

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

13 ‘‘(iv) MEDICAL EXPENSES.—Medical

14 expenses (within the meaning of section

15 72(t)(2)(B)).

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

17 shall not apply if the distribution is made after the

18 individual for whose benefit the investment savings

19 account is established—

‘‘(A) attains 591 20 ⁄2 years of age, or

21 ‘‘(B) becomes disabled within the meaning

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

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

24 is includible in the gross income of an individual for

25 a taxable year because such amount is required to
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1 be treated as a distribution under paragraph (2) or

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

3 under this chapter for such taxable year shall be in4 creased by an amount equal to 10 percent of such

5 amount required to be treated as a distribution and

6 included in the gross income of such individual.

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

8 shall be applied without regard to any community property

9 laws.

10 ‘‘(h) SPECIAL RULES.—For purposes of this sec11 tion—

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

13 investment savings account shall be treated as hav14 ing been made—

15 ‘‘(A) first from the earliest contribution re16 maining in the account at the time of the dis17 tribution,

18 ‘‘(B) second from other contributions in

19 the order in which made, and

20 ‘‘(C) third from earnings.

21 ‘‘(2) CUSTODIAL ACCOUNTS.—A custodial ac22 count shall be treated as a trust if the assets of such

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

24 408(n)) or another person who demonstrates, to the

25 satisfaction of the Secretary, that the manner in
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1 which he will administer the account will be consist2 ent with the requirements of this section, and if the

3 custodial account would, except for the fact that it

4 is not a trust, constitute an investment savings ac5 count described in subsection (c). For purposes of

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

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

8 custodian of such account shall be treated as the

9 trustee thereof.

10 ‘‘(i) REPORTS.—

11 ‘‘(1) IN GENERAL.—The trustee of an invest12 ment savings account shall make such reports re13 garding such account to the Secretary and to the in14 dividual for whose benefit the account is maintained

15 with respect to contributions, distributions, and such

16 other matters as the Secretary may require under

17 regulations. Except as provided in paragraph (2),

18 the reports required by this subsection shall be filed

19 at such time and in such manner and furnished to

20 such individuals at such time and in such manner as

21 may be required by those regulations.

22 ‘‘(2) FIRST REPORT.—The trustee of an invest23 ment savings account shall make the first report re24 quired under paragraph (1) not later than the expi-
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1 ration of the 3-month period beginning on the date

2 on which the account is established.’’

3 (b) ALLOWANCE OF DEDUCTION IN COMPUTING AD4 JUSTED GROSS INCOME.—Subsection (a) of section 62 of

5 such Code (defining adjusted gross income) is amended

6 by inserting after paragraph (15) the following new para7 graph:

8 ‘‘(16) CONTRIBUTIONS TO INVESTMENT SAV9 INGS ACCOUNTS.—The deduction allowed by section

10 220(a).’’

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

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

13 amended by adding at the end the following new sub14 section:

15 ‘‘(h) INVESTMENT SAVINGS ACCOUNTS.—Any con16 tribution made by an individual to an investment savings

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

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

19 transfer of property by gift for purposes of this chapter.’’

20 (d) TAX ON EXCESS CONTRIBUTIONS.—Section 4973

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

22 individual retirement accounts, certain section 403(b) con23 tracts, and certain individual retirement annuities) is

24 amended—
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1 (1) in subsection (a), by striking ‘‘or’’ at the

2 end of paragraph (1), by redesignating paragraph

3 (2) as paragraph (3), and by inserting after para4 graph (1) the following new paragraph:

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

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

7 (2) by adding at the end the following new sub8 section:

9 ‘‘(d) EXCESS CONTRIBUTIONS TO INVESTMENT SAV10 INGS ACCOUNTS.—For purposes of this section, in the

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

12 contributions’ means the amount by which the amount

13 contributed for the taxable year to the account exceeds

14 the amount allowable as a deduction under section 220

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

16 contribution which is distributed out of the investment

17 savings account in a distribution to which section

18 220(d)(3) applies shall be treated as an amount not con19 tributed.’’

20 (e) TAX ON PROHIBITED TRANSACTIONS.—Section

21 4975 of such Code (relating to prohibited transactions)

22 is amended—

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

24 following new paragraph:
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1 ‘‘(4) SPECIAL RULE FOR INVESTMENT SAVINGS

2 ACCOUNTS.—An individual for whose benefit an in3 vestment savings account is established and any con4 tributor to such account shall be exempt from the

5 tax imposed by this section with respect to any

6 transaction concerning such account (which would

7 otherwise be taxable under this section) if, with re8 spect to such transaction, the account ceases to be

9 an investment savings account by reason of the ap10 plication of section 220(e)(2)(A) to such account.’’,

11 and

12 (2) in subsection (e)(1), by inserting ‘‘, an in13 vestment savings account described in section

14 220(c),’’ after ‘‘described in section 408(a)’’.

15 (f) FAILURE TO PROVIDE REPORTS ON INVESTMENT

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

17 such Code (relating to failure to provide reports on indi18 vidual retirement accounts or annuities) is amended by

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

20 required by section 220(i) to file a report regarding an

21 investment savings account at the time and in the manner

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

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

24 to reasonable cause.’’
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1 (g) ADDITIONAL PENALTIES.—Part I of subchapter

2 B of chapter 68 of such Code (relating to assessable pen3 alties) is amended by adding at the end the following new

4 section:

5 ‘‘SEC. 6716. PROMOTION OF NONQUALIFIED INVESTMENT

6 AS ELIGIBLE FOR DOMESTIC INVESTMENT

7 ECONOMIC GROWTH EXCLUSION OR DEDUC8 TION.

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

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

11 account is eligible for an exclusion under section 137

12 or deduction under section 220, and

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

14 was no reasonable basis for such statement,

15 such person shall pay a penalty equal to twice the aggre16 gate amount of exclusions and deductions taken by other

17 persons under such sections in reliance on such statement.

18 ‘‘(b) PENALTY IN ADDITION TO OTHER PEN19 ALTIES.—The penalty imposed by subsection (a) shall be

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

21 (h) CLERICAL AMENDMENTS.—

22 (1) The table of sections for part VII of sub23 chapter B of chapter 1 of such Code is amended by

24 striking the item relating to section 220 and insert25 ing the following new items:

‘‘Sec. 220. Contributions to investment savings accounts.
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‘‘Sec. 221. Cross reference.’’

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

2 such Code is amended to read as follows:

3 ‘‘SEC. 4973. TAX ON EXCESS CONTRIBUTIONS TO INDIVID4 UAL RETIREMENT ACCOUNTS, INVESTMENT

5 SAVINGS ACCOUNTS, CERTAIN 403(b) CON6 TRACTS, AND CERTAIN INDIVIDUAL RETIRE7 MENT ANNUITIES.’’

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

9 Code is amended by striking the item relating to sec10 tion 4973 and inserting the following new item:

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

accounts, investment savings accounts, certain

403(b) contracts, and certain individual retirement

annuities.’’

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

12 such Code is amended to read as follows:

13 ‘‘SEC. 6693. FAILURE TO PROVIDE REPORTS ON INDIVIDUAL

14 RETIREMENT ACCOUNTS OR ANNUITIES OR

15 ON INVESTMENT SAVINGS ACCOUNTS; PEN16 ALTIES RELATING TO DESIGNATED NON17 DEDUCTIBLE CONTRIBUTIONS.’’

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

19 chapter 68 of such Code is amended by striking the

20 item relating to section 6693 and inserting the fol21 lowing new item:
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‘‘Sec. 6693. Failure to provide reports on individual retirement

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

1 (4) The table of sections for part I of sub2 chapter B of chapter 68 of such Code is amended

3 by adding at the end the following new item:

‘‘Sec. 6716. Promotion of nonqualified investment as eligible for

domestic investment economic growth exclusion or

deduction.’’

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

5 this section shall apply to taxable years beginning after

6 the date of the enactment of this Act.

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