`[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4738 Reported in House (RH)]





                                                 Union Calendar No. 459

105th CONGRESS

  2d Session

                               H. R. 4738

                          [Report No. 105-817]

_______________________________________________________________________

                                 A BILL

 To amend the Internal Revenue Code of 1986 to extend certain expiring 
 provisions, provide tax relief for farmers and small businesses, and 
                          for other purposes.

_______________________________________________________________________

                            October 12, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed





                                                 Union Calendar No. 459
105th CONGRESS
  2d Session
                                H. R. 4738

                          [Report No. 105-817]

 To amend the Internal Revenue Code of 1986 to extend certain expiring 
 provisions, provide tax relief for farmers and small businesses, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 8, 1998

  Mr. Archer introduced the following bill; which was referred to the 
                      Committee on Ways and Means

                            October 12, 1998

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on October 
                                8, 1998]

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to extend certain expiring 
 provisions, provide tax relief for farmers and small businesses, and 
                          for other purposes.

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

SECTION 1. AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other provision, 
the reference shall be considered to be made to a section or other 
provision of the Internal Revenue Code of 1986.
    (b) Table of Contents.--

Sec. 1. Amendment of 1986 Code; table of contents.

   TITLE I--EXTENSION AND MODIFICATION OF CERTAIN EXPIRING PROVISIONS

                       Subtitle A--Tax Provisions

Sec. 101. Research credit.
Sec. 102. Work opportunity credit.
Sec. 103. Income averaging for farmers made permanent.
Sec. 104. Contributions of stock to private foundations; expanded 
                            public inspection of private foundations' 
                            annual returns.
Sec. 105. Subpart F exemption for active financing income.
Sec. 106. Disclosure of return information on income contingent student 
                            loans.

             Subtitle B--Generalized System of Preferences

Sec. 111. Extension of Generalized System of Preferences.

                       TITLE II--OTHER PROVISIONS

Sec. 201. Depreciation study.
Sec. 202. Production flexibility contract payments.
Sec. 203. 100 percent deduction for health insurance costs of self-
                            employed individuals.
Sec. 204. Increase in volume cap on private activity bonds.
Sec. 205. Modification of estimated tax safe harbors.
Sec. 206. Exemption for students employed by State schools, colleges, 
                            or universities.

                       TITLE III--REVENUE OFFSETS

Sec. 301. Treatment of certain deductible liquidating distributions of 
                            regulated investment companies and real 
                            estate investment trusts.
Sec. 302. Inclusion of rotavirus gastroenteritis as a taxable vaccine.
Sec. 303. Clarification and expansion of mathematical error assessment 
                            procedures.
Sec. 304. Clarification of definition of specified liability loss.

                    TITLE IV--TECHNICAL CORRECTIONS

Sec. 401. Definitions; coordination with other titles.
Sec. 402. Amendments related to Internal Revenue Service Restructuring 
                            and Reform Act of 1998.
Sec. 403. Amendments related to Taxpayer Relief Act of 1997.
Sec. 404. Amendments related to Tax Reform Act of 1984.
Sec. 405. Other amendments.

   TITLE I--EXTENSION AND MODIFICATION OF CERTAIN EXPIRING PROVISIONS

                       Subtitle A--Tax Provisions

SEC. 101. RESEARCH CREDIT.

    (a) Temporary Extension.--Paragraph (1) of section 41(h) (relating 
to termination) is amended--
            (1) by striking ``June 30, 1998'' and inserting ``December 
        31, 1999'';
            (2) by striking ``24-month'' and inserting ``42-month''; 
        and
            (3) by striking ``24 months'' and inserting ``42 months''.
    (b) Technical Amendment.--Subparagraph (D) of section 45C(b)(1) is 
amended by striking ``June 30, 1998'' and inserting ``December 31, 
1999''.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after June 30, 1998.

SEC. 102. WORK OPPORTUNITY CREDIT.

    (a) Temporary Extension.--Subparagraph (B) of section 51(c)(4) 
(relating to termination) is amended by striking ``June 30, 1998'' and 
inserting ``December 31, 1999''.
    (b) Effective Date.--The amendment made by this section shall apply 
to individuals who begin work for the employer after June 30, 1998.

SEC. 103. INCOME AVERAGING FOR FARMERS MADE PERMANENT.

    Subsection (c) of section 933 of the Taxpayer Relief Act of 1997 is 
amended by striking ``, and before January 1, 2001''.

SEC. 104. CONTRIBUTIONS OF STOCK TO PRIVATE FOUNDATIONS; EXPANDED 
              PUBLIC INSPECTION OF PRIVATE FOUNDATIONS' ANNUAL RETURNS.

    (a) Special Rule for Contributions of Stock Made Permanent.--
            (1) In general.--Paragraph (5) of section 170(e) is amended 
        by striking subparagraph (D) (relating to termination).
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to contributions made after June 30, 1998.
    (b) Expanded Public Inspection of Private Foundations' Annual 
Returns, Etc.--
            (1) In general.--Section 6104 (relating to publicity of 
        information required from certain exempt organizations and 
        certain trusts) is amended by striking subsections (d) and (e) 
        and inserting after subsection (c) the following new 
        subsection:
    ``(d) Public Inspection of Certain Annual Returns and Applications 
for Exemption.--
            ``(1) In general.--In the case of an organization described 
        in subsection (c) or (d) of section 501 and exempt from 
        taxation under section 501(a)--
                    ``(A) a copy of--
                            ``(i) the annual return filed under section 
                        6033 (relating to returns by exempt 
                        organizations) by such organization; and
                            ``(ii) if the organization filed an 
                        application for recognition of exemption under 
                        section 501, the exempt status application 
                        materials of such organization,
                shall be made available by such organization for 
                inspection during regular business hours by any 
                individual at the principal office of such organization 
                and, if such organization regularly maintains 1 or more 
                regional or district offices having 3 or more 
                employees, at each such regional or district office; 
                and
                    ``(B) upon request of an individual made at such 
                principal office or such a regional or district office, 
                a copy of such annual return and exempt status 
                application materials shall be provided to such 
                individual without charge other than a reasonable fee 
                for any reproduction and mailing costs.
        The request described in subparagraph (B) must be made in 
        person or in writing. If such request is made in person, such 
        copy shall be provided immediately and, if made in writing, 
        shall be provided within 30 days.
            ``(2) 3-year limitation on inspection of returns.--
        Paragraph (1) shall apply to an annual return filed under 
        section 6033 only during the 3-year period beginning on the 
        last day prescribed for filing such return (determined with 
        regard to any extension of time for filing).
            ``(3) Exceptions from disclosure requirement.--
                    ``(A) Nondisclosure of contributors, etc.--
                Paragraph (1) shall not require the disclosure of the 
                name or address of any contributor to the organization. 
                In the case of an organization described in section 
                501(d), paragraph (1) shall not require the disclosure 
                of the copies referred to in section 6031(b) with 
                respect to such organization.
                    ``(B) Nondisclosure of certain other information.--
                Paragraph (1) shall not require the disclosure of any 
                information if the Secretary withheld such information 
                from public inspection under subsection (a)(1)(D).
            ``(4) Limitation on providing copies.--Paragraph (1)(B) 
        shall not apply to any request if, in accordance with 
        regulations promulgated by the Secretary, the organization has 
        made the requested documents widely available, or the Secretary 
        determines, upon application by an organization, that such 
        request is part of a harassment campaign and that compliance 
        with such request is not in the public interest.
            ``(5) Exempt status application materials.--For purposes of 
        paragraph (1), the term `exempt status applicable materials' 
        means the application for recognition of exemption under 
        section 501 and any papers submitted in support of such 
        application and any letter or other document issued by the 
        Internal Revenue Service with respect to such application.''.
            (2) Conforming amendments.--
                    (A) Subsection (c) of section 6033 is amended by 
                adding ``and'' at the end of paragraph (1), by striking 
                paragraph (2), and by redesignating paragraph (3) as 
                paragraph (2).
                    (B) Subparagraph (C) of section 6652(c)(1) is 
                amended by striking ``subsection (d) or (e)(1) of 
                section 6104 (relating to public inspection of annual 
                returns)'' and inserting ``section 6104(d) with respect 
                to any annual return''.
                    (C) Subparagraph (D) of section 6652(c)(1) is 
                amended by striking ``section 6104(e)(2) (relating to 
                public inspection of applications for exemption)'' and 
                inserting ``section 6104(d) with respect to any exempt 
                status application materials (as defined in such 
                section)''.
                    (D) Section 6685 is amended by striking ``or (e)''.
                    (E) Section 7207 is amended by striking ``or (e)''.
            (3) Effective date.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the amendments made by this subsection shall apply 
                to requests made after the later of December 31, 1998, 
                or the 60th day after the Secretary of the Treasury 
                first issues the regulations referred to in such 
                section 6104(d)(4) of the Internal Revenue Code of 
                1986, as amended by this section.
                    (B) Publication of annual returns.--Section 6104(d) 
                of such Code, as in effect before the amendments made 
                by this subsection, shall not apply to any return the 
                due date for which is after the date such amendments 
                take effect under subparagraph (A).

SEC. 105. SUBPART F EXEMPTION FOR ACTIVE FINANCING INCOME.

    (a) Income Derived From Banking, Financing, or Similar 
Businesses.--Section 954(h) (relating to income derived in the active 
conduct of banking, financing, or similar businesses) is amended to 
read as follows:
    ``(h) Special Rule for Income Derived in the Active Conduct of 
Banking, Financing, or Similar Businesses.--
            ``(1) In general.--For purposes of subsection (c)(1), 
        foreign personal holding company income shall not include 
        qualified banking or financing income of an eligible controlled 
        foreign corporation.
            ``(2) Eligible controlled foreign corporation.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `eligible controlled 
                foreign corporation' means a controlled foreign 
                corporation which--
                            ``(i) is predominantly engaged in the 
                        active conduct of a banking, financing, or 
                        similar business, and
                            ``(ii) conducts substantial activity with 
                        respect to such business.
                    ``(B) Predominantly engaged.--A controlled foreign 
                corporation shall be treated as predominantly engaged 
                in the active conduct of a banking, financing, or 
                similar business if--
                            ``(i) more than 70 percent of the gross 
                        income of the controlled foreign corporation is 
                        derived directly from the active and regular 
                        conduct of a lending or finance business from 
                        transactions with customers which are not 
                        related persons,
                            ``(ii) it is engaged in the active conduct 
                        of a banking business and is an institution 
                        licensed to do business as a bank in the United 
                        States (or is any other corporation not so 
                        licensed which is specified by the Secretary in 
                        regulations), or
                            ``(iii) it is engaged in the active conduct 
                        of a securities business and is registered as a 
                        securities broker or dealer under section 15(a) 
                        of the Securities Exchange Act of 1934 or is 
                        registered as a Government securities broker or 
                        dealer under section 15C(a) of such Act (or is 
                        any other corporation not so registered which 
                        is specified by the Secretary in regulations).
            ``(3) Qualified banking or financing income.--For purposes 
        of this subsection--
                    ``(A) In general.--The term `qualified banking or 
                financing income' means income of an eligible 
                controlled foreign corporation which--
                            ``(i) is derived in the active conduct of a 
                        banking, financing, or similar business by--
                                    ``(I) such eligible controlled 
                                foreign corporation, or
                                    ``(II) a qualified business unit of 
                                such eligible controlled foreign 
                                corporation;
                            ``(ii) is derived from one or more 
                        transactions--
                                    ``(I) with customers located in a 
                                country other than the United States, 
                                and
                                    ``(II) substantially all of the 
                                activities in connection with which are 
                                conducted directly by the corporation 
                                or unit in its home country; and
                            ``(iii) is treated as earned by such 
                        corporation or unit in its home country for 
                        purposes of such country's tax laws.
                    ``(B) Limitation on nonbanking and nonsecurities 
                businesses.--No income of an eligible controlled 
                foreign corporation not described in clause (ii) or 
                (iii) of paragraph (2)(B) (or of a qualified business 
                unit of such corporation) shall be treated as qualified 
                banking or financing income unless more than 30 percent 
                of such corporation's or unit's gross income is derived 
                directly from the active and regular conduct of a 
                lending or finance business from transactions with 
                customers which are not related persons and which are 
                located within such corporation's or unit's home 
                country.
                    ``(C) Substantial activity requirement for cross 
                border income.--The term `qualified banking or 
                financing income' shall not include income derived from 
                1 or more transactions with customers located in a 
                country other than the home country of the eligible 
                controlled foreign corporation or a qualified business 
                unit of such corporation unless such corporation or 
                unit conducts substantial activity with respect to a 
                banking, financing, or similar business in its home 
                country.
                    ``(D) Determinations made separately.--For purposes 
                of this paragraph, the qualified banking or financing 
                income of an eligible controlled foreign corporation 
                and each qualified business unit of such corporation 
                shall be determined separately for such corporation and 
                each such unit by taking into account--
                            ``(i) in the case of the eligible 
                        controlled foreign corporation, only items of 
                        income, deduction, gain, or loss and activities 
                        of such corporation not properly allocable or 
                        attributable to any qualified business unit of 
                        such corporation; and
                            ``(ii) in the case of a qualified business 
                        unit, only items of income, deduction, gain, or 
                        loss and activities properly allocable or 
                        attributable to such unit.
            ``(4) Lending or finance business.--For purposes of this 
        subsection, the term `lending or finance business' means the 
        business of--
                    ``(A) making loans;
                    ``(B) purchasing or discounting accounts 
                receivable, notes, or installment obligations;
                    ``(C) engaging in leasing (including entering into 
                leases and purchasing, servicing, and disposing of 
                leases and leased assets);
                    ``(D) issuing letters of credit or providing 
                guarantees;
                    ``(E) providing charge and credit card services; or
                    ``(F) rendering services or making facilities 
                available in connection with activities described in 
                subparagraphs (A) through (E) carried on by--
                            ``(i) the corporation (or qualified 
                        business unit) rendering services or making 
                        facilities available; or
                            ``(ii) another corporation (or qualified 
                        business unit of a corporation) which is a 
                        member of the same affiliated group (as defined 
                        in section 1504, but determined without regard 
                        to section 1504(b)(3)).
            ``(5) Other definitions.--For purposes of this subsection--
                    ``(A) Customer.--The term `customer' means, with 
                respect to any controlled foreign corporation or 
                qualified business unit, any person which has a 
                customer relationship with such corporation or unit and 
                which is acting in its capacity as such.
                    ``(B) Home country.--Except as provided in 
                regulations--
                            ``(i) Controlled foreign corporation.--The 
                        term `home country' means, with respect to any 
                        controlled foreign corporation, the country 
                        under the laws of which the corporation was 
                        created or organized.
                            ``(ii) Qualified business unit.--The term 
                        `home country' means, with respect to any 
                        qualified business unit, the country in which 
                        such unit maintains its principal office.
                    ``(C) Located.--The determination of where a 
                customer is located shall be made under rules 
                prescribed by the Secretary.
                    ``(D) Qualified business unit.--The term `qualified 
                business unit' has the meaning given such term by 
                section 989(a).
                    ``(E) Related person.--The term `related person' 
                has the meaning given such term by subsection (d)(3).
            ``(6) Coordination with exception for dealers.--Paragraph 
        (1) shall not apply to income described in subsection 
        (c)(2)(C)(ii) of a dealer in securities (within the meaning of 
        section 475) which is an eligible controlled foreign 
        corporation described in paragraph (2)(B)(iii).
            ``(7) Anti-abuse rules.--For purposes of applying this 
        subsection and subsection (c)(2)(C)(ii)--
                    ``(A) there shall be disregarded any item of 
                income, gain, loss, or deduction with respect to any 
                transaction or series of transactions one of the 
                principal purposes of which is qualifying income or 
                gain for the exclusion under this section, including 
                any transaction or series of transactions a principal 
                purpose of which is the acceleration or deferral of any 
                item in order to claim the benefits of such exclusion 
                through the application of this subsection;
                    ``(B) there shall be disregarded any item of 
                income, gain, loss, or deduction of an entity which is 
                not engaged in regular and continuous transactions with 
                customers which are not related persons;
                    ``(C) there shall be disregarded any item of 
                income, gain, loss, or deduction with respect to any 
                transaction or series of transactions utilizing, or 
                doing business with--
                            ``(i) one or more entities in order to 
                        satisfy any home country requirement under this 
                        subsection, or
                            ``(ii) a special purpose entity or 
                        arrangement, including a securitization, 
                        financing, or similar entity or arrangement,
                if one of the principal purposes of such transaction or 
                series of transactions is qualifying income or gain for 
                the exclusion under this subsection; and
                    ``(D) a related person, an officer, a director, or 
                an employee with respect to any controlled foreign 
                corporation (or qualified business unit) which would 
                otherwise be treated as a customer of such corporation 
                or unit with respect to any transaction shall not be so 
                treated if a principal purpose of such transaction is 
                to satisfy any requirement of this subsection.
            ``(8) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection, subsection (c)(1)(B)(i), 
        subsection (c)(2)(C)(ii), and the last sentence of subsection 
        (e)(2).
            ``(9) Application.--This subsection, subsection 
        (c)(2)(C)(ii), and the last sentence of subsection (e)(2) shall 
        apply only to the first taxable year of a foreign corporation 
        beginning after December 31, 1998, and before January 1, 2000, 
        and to taxable years of United States shareholders with or 
        within which such taxable year of such foreign corporation 
        ends.''.
    (b) Income Derived From Insurance Business.--
            (1) Income attributable to issuance or reinsurance.--
                    (A) In general.--Section 953(a) (defining insurance 
                income) is amended to read as follows:
    ``(a) Insurance Income.--
            ``(1) In general.--For purposes of section 952(a)(1), the 
        term `insurance income' means any income which--
                    ``(A) is attributable to the issuing (or 
                reinsuring) of an insurance or annuity contract; and
                    ``(B) would (subject to the modifications provided 
                by subsection (b)) be taxed under subchapter L of this 
                chapter if such income were the income of a domestic 
                insurance company.
            ``(2) Exception.--Such term shall not include any exempt 
        insurance income (as defined in subsection (e)).''.
                    (B) Exempt insurance income.--Section 953 (relating 
                to insurance income) is amended by adding at the end 
                the following new subsection:
    ``(e) Exempt Insurance Income.--For purposes of this section--
            ``(1) Exempt insurance income defined.--
                    ``(A) In general.--The term `exempt insurance 
                income' means income derived by a qualifying insurance 
                company which--
                            ``(i) is attributable to the issuing (or 
                        reinsuring) of an exempt contract by such 
                        company or a qualifying insurance company 
                        branch of such company; and
                            ``(ii) is treated as earned by such company 
                        or branch in its home country for purposes of 
                        such country's tax laws.
                    ``(B) Exception for certain arrangements.--Such 
                term shall not include income attributable to the 
                issuing (or reinsuring) of an exempt contract as the 
                result of any arrangement whereby another corporation 
                receives a substantially equal amount of premiums or 
                other consideration in respect of issuing (or 
                reinsuring) a contract which is not an exempt contract.
                    ``(C) Determinations made separately.--For purposes 
                of this subsection and section 954(i), the exempt 
                insurance income and exempt contracts of a qualifying 
                insurance company or any qualifying insurance company 
                branch of such company shall be determined separately 
                for such company and each such branch by taking into 
                account--
                            ``(i) in the case of the qualifying 
                        insurance company, only items of income, 
                        deduction, gain, or loss, and activities of 
                        such company not properly allocable or 
                        attributable to any qualifying insurance 
                        company branch of such company; and
                            ``(ii) in the case of a qualifying 
                        insurance company branch, only items of income, 
                        deduction, gain, or loss and activities 
                        properly allocable or attributable to such 
                        unit.
            ``(2) Exempt contract.--
                    ``(A) In general.--The term `exempt contract' means 
                an insurance or annuity contract issued or reinsured by 
                a qualifying insurance company or qualifying insurance 
                company branch in connection with property in, 
                liability arising out of activity in, or the lives or 
                health of residents of, a country other than the United 
                States.
                    ``(B) Minimum home country income required.--
                            ``(i) In general.--No contract of a 
                        qualifying insurance company or of a qualifying 
                        insurance company branch shall be treated as an 
                        exempt contract unless such company or branch 
                        derives more than 30 percent of its net written 
                        premiums from exempt contracts (determined 
                        without regard to this subparagraph)--
                                    ``(I) which cover applicable home 
                                country risks; and
                                    ``(II) with respect to which no 
                                policyholder, insured, annuitant, or 
                                beneficiary is a related person (as 
                                defined in section 954(d)(3)).
                            ``(ii) Applicable home country risks.--The 
                        term `applicable home country risks' means 
                        risks in connection with property in, liability 
                        arising out of activity in, or the lives or 
                        health of residents of, the home country of the 
                        qualifying insurance company or qualifying 
                        insurance company branch, as the case may be, 
                        issuing or reinsuring the contract covering the 
                        risks.
                    ``(C) Substantial activity requirements for cross 
                border risks.--A contract issued by a qualifying 
                insurance company or qualifying insurance company 
                branch which covers risks other than applicable home 
                country risks (as defined in subparagraph (B)(ii)) 
                shall not be treated as an exempt contract unless such 
                company or branch, as the case may be--
                            ``(i) conducts substantial activity with 
                        respect to an insurance business in its home 
                        country; and
                            ``(ii) performs in its home country 
                        substantially all of the activities necessary 
                        to give rise to the income generated by such 
                        contract.
            ``(3) Qualifying insurance company.--The term `qualifying 
        insurance company' means any controlled foreign corporation 
        which--
                    ``(A) is subject to regulation as an insurance (or 
                reinsurance) company by its home country, and is 
                licensed, authorized, or regulated by the applicable 
                insurance regulatory body for its home country to sell 
                insurance, reinsurance, or annuity contracts to persons 
                other than related persons (within the meaning of 
                section 954(d)(3)) in such home country;
                    ``(B) derives more than 50 percent of its aggregate 
                net written premiums from the issuance or reinsurance 
                by such controlled foreign corporation and each of its 
                qualifying insurance company branches of contracts--
                            ``(i) covering applicable home country 
                        risks (as defined in paragraph (2)) of such 
                        corporation or branch, as the case may be; and
                            ``(ii) with respect to which no 
                        policyholder, insured, annuitant, or 
                        beneficiary is a related person (as defined in 
                        section 954(d)(3));
                except that in the case of a branch, such premiums 
                shall only be taken into account to the extent such 
                premiums are treated as earned by such branch in its 
                home country for purposes of such country's tax laws; 
                and
                    ``(C) is engaged in the insurance business and 
                would be subject to tax under subchapter L if it were a 
                domestic corporation.
            ``(4) Qualifying insurance company branch.--The term 
        `qualifying insurance company branch' means a qualified 
        business unit (within the meaning of section 989(a)) of a 
        controlled foreign corporation if--
                    ``(A) such unit is licensed, authorized, or 
                regulated by the applicable insurance regulatory body 
                for its home country to sell insurance, reinsurance, or 
                annuity contracts to persons other than related persons 
                (within the meaning of section 954(d)(3)) in such home 
                country; and
                    ``(B) such controlled foreign corporation is a 
                qualifying insurance company, determined under 
                paragraph (3) as if such unit were a qualifying 
                insurance company branch.
            ``(5) Life insurance or annuity contract.--For purposes of 
        this section and section 954, the determination of whether a 
        contract issued by a controlled foreign corporation or a 
        qualified business unit (within the meaning of section 989(a)) 
        is a life insurance contract or an annuity contract shall be 
        made without regard to sections 72(s), 101(f), 817(h), and 7702 
        if--
                    ``(A) such contract is regulated as a life 
                insurance or annuity contract by the corporation's or 
                unit's home country; and
                    ``(B) no policyholder, insured, annuitant, or 
                beneficiary with respect to the contract is a United 
                States person.
            ``(6) Home country.--For purposes of this subsection, 
        except as provided in regulations--
                    ``(A) Controlled foreign corporation.--The term 
                `home country' means, with respect to a controlled 
                foreign corporation, the country in which such 
                corporation is created or organized.
                    ``(B) Qualified business unit.--The term `home 
                country' means, with respect to a qualified business 
                unit (as defined in section 989(a)), the country in 
                which the principal office of such unit is located and 
                in which such unit is licensed, authorized, or 
                regulated by the applicable insurance regulatory body 
                to sell insurance, reinsurance, or annuity contracts to 
                persons other than related persons (as defined in 
                section 954(d)(3)) in such country.
            ``(7) Anti-abuse rules.--For purposes of applying this 
        subsection and section 954(i)--
                    ``(A) the rules of section 954(h)(7) (other than 
                subparagraph (B) thereof) shall apply;
                    ``(B) there shall be disregarded any item of 
                income, gain, loss, or deduction of, or derived from, 
                an entity which is not engaged in regular and 
                continuous transactions with persons which are not 
                related persons;
                    ``(C) there shall be disregarded any change in the 
                method of computing reserves a principal purpose of 
                which is the acceleration or deferral of any item in 
                order to claim the benefits of this subsection or 
                section 954(i);
                    ``(D) a contract of insurance or reinsurance shall 
                not be treated as an exempt contract (and premiums from 
                such contract shall not be taken into account for 
                purposes of paragraph (2)(B) or (3)) if--
                            ``(i) any policyholder, insured, annuitant, 
                        or beneficiary is a resident of the United 
                        States and such contract was marketed to such 
                        resident and was written to cover a risk 
                        outside the United States; or
                            ``(ii) the contract covers risks located 
                        within and without the United States and the 
                        qualifying insurance company or qualifying 
                        insurance company branch does not maintain such 
                        contemporaneous records, and file such reports, 
                        with respect to such contract as the Secretary 
                        may require;
                    ``(E) the Secretary may prescribe rules for the 
                allocation of contracts (and income from contracts) 
                among 2 or more qualifying insurance company branches 
                of a qualifying insurance company in order to clearly 
                reflect the income of such branches; and
                    ``(F) premiums from a contract shall not be taken 
                into account for purposes of paragraph (2)(B) or (3) if 
                such contract reinsures a contract issued or reinsured 
                by a related person (as defined in section 954(d)(3)).
        For purposes of subparagraph (D), the determination of where 
        risks are located shall be made under the principles of section 
        953.
            ``(8) Coordination with subsection (c).--In determining 
        insurance income for purposes of subsection (c), exempt 
        insurance income shall not include income derived from exempt 
        contracts which cover risks other than applicable home country 
        risks.
            ``(9) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary or appropriate to carry out the 
        purposes of this subsection and section 954(i).
            ``(10) Application.--This subsection and section 954(i) 
        shall apply only to the first taxable year of a foreign 
        corporation beginning after December 31, 1998, and before 
        January 1, 2000, and to taxable years of United States 
        shareholders with or within which such taxable year of such 
        foreign corporation ends.
            ``(11) Cross reference.--

                                ``For income exempt from foreign 
personal holding company income, see section 954(i).''.
            (2) Exemption from foreign personal holding company 
        income.--Section 954 (defining foreign base company income) is 
        amended by adding at the end the following new subsection:
    ``(i) Special Rule for Income Derived in the Active Conduct of 
Insurance Business.--
            ``(1) In general.--For purposes of subsection (c)(1), 
        foreign personal holding company income shall not include 
        qualified insurance income of a qualifying insurance company.
            ``(2) Qualified insurance income.--The term `qualified 
        insurance income' means income of a qualifying insurance 
        company which is--
                    ``(A) received from a person other than a related 
                person (within the meaning of subsection (d)(3)) and 
                derived from the investments made by a qualifying 
                insurance company or a qualifying insurance company 
                branch of its reserves allocable to exempt contracts or 
                of 80 percent of its unearned premiums from exempt 
                contracts (as both are determined in the manner 
                prescribed under paragraph (4)), or
                    ``(B) received from a person other than a related 
                person (within the meaning of subsection (d)(3)) and 
                derived from investments made by a qualifying insurance 
                company or a qualifying insurance company branch of an 
                amount of its assets allocable to exempt contracts 
                equal to--
                            ``(i) in the case of property, casualty, or 
                        health insurance contracts, one-third of its 
                        premiums earned on such insurance contracts 
                        during the taxable year (as defined in section 
                        832(b)(4)), and
                            ``(ii) in the case of life insurance or 
                        annuity contracts, 10 percent of the reserves 
                        described in subparagraph (A) for such 
                        contracts.
            ``(3) Principles for determining insurance income.--Except 
        as provided by the Secretary, for purposes of subparagraphs (A) 
        and (B) of paragraph (2)--
                    ``(A) in the case of any contract which is a 
                separate account-type contract (including any variable 
                contract not meeting the requirements of section 817), 
                income credited under such contract shall be allocable 
                only to such contract, and
                    ``(B) income not allocable under subparagraph (A) 
                shall be allocated ratably among contracts not 
                described in subparagraph (A).
            ``(4) Methods for determining unearned premiums and 
        reserves.--For purposes of paragraph (2)(A)--
                    ``(A) Property and casualty contracts.--The 
                unearned premiums and reserves of a qualifying 
                insurance company or a qualifying insurance company 
                branch with respect to property, casualty, or health 
                insurance contracts shall be determined using the same 
                methods and interest rates which would be used if such 
                company or branch were subject to tax under subchapter 
                L, except that--
                            ``(i) the interest rate determined for the 
                        functional currency of the company or branch, 
                        and which, except as provided by the Secretary, 
                        is calculated in the same manner as the Federal 
                        mid-term rate under section 1274(d), shall be 
                        substituted for the applicable Federal interest 
                        rate, and
                            ``(ii) such company or branch shall use the 
                        appropriate foreign loss payment pattern.
                    ``(B) Life insurance and annuity contracts.--The 
                amount of the reserve of a qualifying insurance company 
                or qualifying insurance company branch for any life 
                insurance or annuity contract shall be equal to the 
                greater of--
                            ``(i) the net surrender value of such 
                        contract (as defined in section 807(e)(1)(A)), 
                        or
                            ``(ii) the reserve determined under 
                        paragraph (5).
                    ``(C) Limitation on reserves.--In no event shall 
                the reserve determined under this paragraph for any 
                contract as of any time exceed the amount which would 
                be taken into account with respect to such contract as 
                of such time in determining foreign statement reserves 
                (less any catastrophe, deficiency, equalization, or 
                similar reserves).
            ``(5) Amount of reserve.--The amount of the reserve 
        determined under this paragraph with respect to any contract 
        shall be determined in the same manner as it would be 
        determined if the qualifying insurance company or qualifying 
        insurance company branch were subject to tax under subchapter 
        L, except that in applying such subchapter--
                    ``(A) the interest rate determined for the 
                functional currency of the company or branch, and 
                which, except as provided by the Secretary, is 
                calculated in the same manner as the Federal mid-term 
                rate under section 1274(d), shall be substituted for 
the applicable Federal interest rate;
                    ``(B) the highest assumed interest rate permitted 
                to be used in determining foreign statement reserves 
                shall be substituted for the prevailing State assumed 
                interest rate; and
                    ``(C) tables for mortality and morbidity which 
                reasonably reflect the current mortality and morbidity 
                risks in the company's or branch's home country shall 
                be substituted for the mortality and morbidity tables 
                otherwise used for such subchapter.
        The Secretary may provide that the interest rate and mortality 
        and morbidity tables of a qualifying insurance company may be 
        used for 1 or more of its qualifying insurance company branches 
        when appropriate.
            ``(6) Definitions.--For purposes of this subsection, any 
        term used in this subsection which is also used in section 
        953(e) shall have the meaning given such term by section 
        953.''.
            (3) Reserves.--Section 953(b) is amended by redesignating 
        paragraph (3) as paragraph (4) and by inserting after paragraph 
        (2) the following new paragraph:
            ``(3) Reserves for any insurance or annuity contract shall 
        be determined in the same manner as under section 954(i).''.
    (c) Special Rules for Dealers.--Section 954(c)(2)(C) is amended to 
read as follows:
                    ``(C) Exception for dealers.--Except as provided by 
                regulations, in the case of a regular dealer in 
                property which is property described in paragraph 
                (1)(B), forward contracts, option contracts, or similar 
                financial instruments (including notional principal 
                contracts and all instruments referenced to 
                commodities), there shall not be taken into account in 
                computing foreign personal holding company income--
                            ``(i) any item of income, gain, deduction, 
                        or loss (other than any item described in 
                        subparagraph (A), (E), or (G) of paragraph (1)) 
                        from any transaction (including hedging 
                        transactions) entered into in the ordinary 
                        course of such dealer's trade or business as 
                        such a dealer; and
                            ``(ii) if such dealer is a dealer in 
                        securities (within the meaning of section 475), 
                        any interest or dividend or equivalent amount 
                        described in subparagraph (E) or (G) of 
                        paragraph (1) from any transaction (including 
                        any hedging transaction or transaction 
                        described in section 956(c)(2)(J)) entered into 
                        in the ordinary course of such dealer's trade 
                        or business as such a dealer in securities, but 
                        only if the income from the transaction is 
                        attributable to activities of the dealer in the 
                        country under the laws of which the dealer is 
                        created or organized (or in the case of a 
                        qualified business unit described in section 
                        989(a), is attributable to activities of the 
                        unit in the country in which the unit both 
                        maintains its principal office and conducts 
                        substantial business activity).''.
    (d) Exemption From Foreign Base Company Services Income.--Paragraph 
(2) of section 954(e) is amended by inserting ``or'' at the end of 
subparagraph (A), by striking ``, or'' at the end of subparagraph (B) 
and inserting a period, by striking subparagraph (C), and by adding at 
the end the following new flush sentence:
        ``Paragraph (1) shall also not apply to income which is exempt 
        insurance income (as defined in section 953(e)) or which is not 
        treated as foreign personal holding income by reason of 
        subsection (c)(2)(C)(ii), (h), or (i).''.
    (e) Exemption for Gain.--Section 954(c)(1)(B)(i) (relating to net 
gains from certain property transactions) is amended by inserting 
``other than property which gives rise to income not treated as foreign 
personal holding company income by reason of subsection (h) or (i) for 
the taxable year'' before the comma at the end.

SEC. 106. DISCLOSURE OF RETURN INFORMATION ON INCOME CONTINGENT STUDENT 
              LOANS.

    Subparagraph (D) of section 6103(l)(13) (relating to disclosure of 
return information to carry out income contingent repayment of student 
loans) is amended by striking ``September 30, 1998'' and inserting 
``September 30, 2003''.

             Subtitle B--Generalized System of Preferences

SEC. 111. EXTENSION OF GENERALIZED SYSTEM OF PREFERENCES.

    (a) Extension of Duty-Free Treatment Under System.--Section 505 of 
the Trade Act of 1974 (29 U.S.C. 2465) is amended by striking ``June 
30, 1998'' and inserting ``December 31, 1999''.
    (b) Retroactive Application for Certain Liquidations and 
Reliquidations.--
            (1) In general.--Notwithstanding section 514 of the Tariff 
        Act of 1930 or any other provision of law, and subject to 
        paragraph (2), any entry--
                    (A) of an article to which duty-free treatment 
                under title V of the Trade Act of 1974 would have 
                applied if such title had been in effect during the 
                period beginning on July 1, 1998, and ending on the day 
                before the date of the enactment of this Act; and
                    (B) that was made after June 30, 1998, and before 
                the date of the enactment of this Act,
        shall be liquidated or reliquidated as free of duty, and the 
        Secretary of the Treasury shall refund any duty paid with 
        respect to such entry. As used in this subsection, the term 
        ``entry'' includes a withdrawal from warehouse for consumption.
            (2) Requests.--Liquidation or reliquidation may be made 
        under paragraph (1) with respect to an entry only if a request 
        therefor is filed with the Customs Service, within 180 days 
        after the date of the enactment of this Act, that contains 
        sufficient information to enable the Customs Service--
                    (A) to locate the entry; or
                    (B) to reconstruct the entry if it cannot be 
                located.

                       TITLE II--OTHER PROVISIONS

SEC. 201. DEPRECIATION STUDY.

    The Secretary of the Treasury (or the Secretary's delegate)--
            (1) shall conduct a comprehensive study of the recovery 
        periods and depreciation methods under section 168 of the 
        Internal Revenue Code of 1986, and
            (2) not later than March 31, 2000, shall submit the results 
        of such study, together with recommendations for determining 
        such periods and methods in a more rational manner, to the 
        Committee on Ways and Means of the House of Representatives and 
        the Committee on Finance of the Senate.

SEC. 202. PRODUCTION FLEXIBILITY CONTRACT PAYMENTS.

    (a) In General.--The options under paragraphs (2) and (3) of 
section 112(d) of the Federal Agriculture Improvement and Reform Act of 
1996 (7 U.S.C. 7212(d) (2) and (3)), as in effect on the date of the 
enactment of this Act, shall be disregarded in determining the taxable 
year for which any payment under a production flexibility contract 
under subtitle B of title I of such Act (as so in effect) is properly 
includible in gross income for purposes of the Internal Revenue Code of 
1986.
    (b) Effective Date.--Subsection (a) shall apply to taxable years 
ending after December 31, 1995.

SEC. 203. 100 PERCENT DEDUCTION FOR HEALTH INSURANCE COSTS OF SELF-
              EMPLOYED INDIVIDUALS.

    (a) In General.--The table contained in subparagraph (B) of section 
162(l)(1) (relating to special rules for health insurance costs of 
self-employed individuals) is amended by striking the last 4 items and 
inserting the following new items:

    ``2002........................................                  75 
     2003 and thereafter..........................               100.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1998.

SEC. 204. INCREASE IN VOLUME CAP ON PRIVATE ACTIVITY BONDS.

    (a) In General.--Subsection (d) of section 146 (relating to volume 
cap) is amended by striking paragraphs (1) and (2) and inserting the 
following new paragraphs:
            ``(1) In general.--The State ceiling applicable to any 
        State for any calendar year shall be the greater of--
                    ``(A) an amount equal to the per capita limit for 
                such year multiplied by the State population, or
                    ``(B) the aggregate limit for such year.
        Subparagraph (B) shall not apply to any possession of the 
        United States.
            ``(2) Per capita limit; aggregate limit.--For purposes of 
        paragraph (1), the per capita limit, and the aggregate limit, 
        for any calendar year shall be determined in accordance with 
        the following table:
      

  1999 through 2002..........          $50              $150,000,000
  2003.......................           55               165,000,000
  2004.......................           60               180,000,000
  2005.......................           65               195,000,000
  2006.......................           70               210,000,000
  2007 and thereafter........           75              225,000,000.''

    (b) Effective Date.--The amendment made by this section shall apply 
to calendar years after 1998.

SEC. 205. MODIFICATION OF ESTIMATED TAX SAFE HARBORS.

    (a) In General.--The table contained in clause (i) of section 
6654(d)(1)(C) (relating to limitation on use of preceding year's tax) 
is amended by striking the item relating to 1998, 1999, or 2000 and 
inserting the following new items:

    ``1998........................................                 105 
     1999 or 2000.................................               106''.

    (b) Effective Date.--The amendment made by this section shall apply 
with respect to any installment payment for taxable years beginning 
after December 31, 1999.

SEC. 206. EXEMPTION FOR STUDENTS EMPLOYED BY STATE SCHOOLS, COLLEGES, 
              OR UNIVERSITIES.

    (a) In General.--Notwithstanding section 218 of the Social Security 
Act, any agreement with a State (or any modification thereof) entered 
into pursuant to such section may, at the option of such State, be 
modified at any time on or after January 1, 1999, and on or before 
March 31, 1999, so as to exclude service performed in the employ of a 
school, college, or university if such service is performed by a 
student who is enrolled and is regularly attending classes at such 
school, college, or university.
    (b) Effective Date of Modification.--Any modification of an 
agreement pursuant to subsection (a) shall be effective with respect to 
services performed after June 30, 1999.
    (c) Irrevocability of Modification.--If any modification of an 
agreement pursuant to subsection (a) terminates coverage with respect 
to service performed in the employ of a school, college, or university, 
by a student who is enrolled and regularly attending classes at such 
school, college, or university, the Commissioner of Social Security and 
the State may not thereafter modify such agreement so as to again make 
the agreement applicable to such service performed in the employ of 
such school, college, or university.

                       TITLE III--REVENUE OFFSETS

SEC. 301. TREATMENT OF CERTAIN DEDUCTIBLE LIQUIDATING DISTRIBUTIONS OF 
              REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT 
              TRUSTS.

    (a) In General.--Section 332 (relating to complete liquidations of 
subsidiaries) is amended by adding at the end the following new 
subsection:
    ``(c) Deductible Liquidating Distributions of Regulated Investment 
Companies and Real Estate Investment Trusts.--If a corporation receives 
a distribution from a regulated investment company or a real estate 
investment trust which is considered under subsection (b) as being in 
complete liquidation of such company or trust, then, notwithstanding 
any other provision of this chapter, such corporation shall recognize 
and treat as a dividend from such company or trust an amount equal to 
the deduction for dividends paid allowable to such company or trust by 
reason of such distribution.''.
    (b) Conforming Amendments.--
            (1) The material preceding paragraph (1) of section 332(b) 
        is amended by striking ``subsection (a)'' and inserting ``this 
        section''.
            (2) Paragraph (1) of section 334(b) is amended by striking 
        ``section 332(a)'' and inserting ``section 332''.
    (c) Effective Date.--The amendments made by this section shall 
apply to distributions after May 21, 1998.

SEC. 302. INCLUSION OF ROTAVIRUS GASTROENTERITIS AS A TAXABLE VACCINE.

    (a) In General.--Paragraph (1) of section 4132 (defining taxable 
vaccine) is amended by adding at the end the following new 
subparagraph:
                    ``(K) Any vaccine against rotavirus 
                gastroenteritis.''.
    (b) Effective Date.--
            (1) Sales.--The amendment made by this section shall apply 
        to sales after the date of the enactment of this Act.
            (2) Deliveries.--For purposes of paragraph (1), in the case 
        of sales on or before the date of the enactment of this Act for 
        which delivery is made after such date, the delivery date shall 
        be considered the sale date.

SEC. 303. CLARIFICATION AND EXPANSION OF MATHEMATICAL ERROR ASSESSMENT 
              PROCEDURES.

    (a) TIN Deemed Incorrect if Information on Return Differs With 
Agency Records.--Paragraph (2) of section 6213(g) (defining 
mathematical or clerical error) is amended by adding at the end the 
following flush sentence:
        ``A taxpayer shall be treated as having omitted a correct TIN 
        for purposes of the preceding sentence if information provided 
        by the taxpayer on the return with respect to the individual 
        whose TIN was provided differs from the information the 
        Secretary obtains from the person issuing the TIN.''.
    (b) Expansion of Mathematical Error Procedures to Cases Where TIN 
Establishes Individual Not Eligible for Tax Credit.--Paragraph (2) of 
section 6213(g) is amended by striking ``and'' at the end of 
subparagraph (J), by striking the period at the end of the subparagraph 
(K) and inserting ``, and'', and by inserting after subparagraph (K) 
the following new subparagraph:
                    ``(L) the inclusion on a return of a TIN required 
                to be included on the return under section 21, 24, or 
                32 if--
                            ``(i) such TIN is of an individual whose 
                        age affects the amount of the credit under such 
                        section; and
                            ``(ii) the computation of the credit on the 
                        return reflects the treatment of such 
                        individual as being of an age different from 
                        the individual's age based on such TIN.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act.

SEC. 304. CLARIFICATION OF DEFINITION OF SPECIFIED LIABILITY LOSS.

    (a) In General.--Subparagraph (B) of section 172(f)(1) (defining 
specified liability loss) is amended to read as follows:
                    ``(B)(i) Any amount allowable as a deduction under 
                this chapter (other than section 468(a)(1) or 468A(a)) 
                which is in satisfaction of a liability under a Federal 
                or State law requiring--
                            ``(I) the reclamation of land;
                            ``(II) the decommissioning of a nuclear 
                        power plant (or any unit thereof);
                            ``(III) the dismantlement of a drilling 
                        platform;
                            ``(IV) the remediation of environmental 
                        contamination; or
                            ``(V) a payment under any workers 
                        compensation act (within the meaning of section 
                        461(h)(2)(C)(i)).
                    ``(ii) A liability shall be taken into account 
                under this subparagraph only if--
                            ``(I) the act (or failure to act) giving 
                        rise to such liability occurs at least 3 years 
                        before the beginning of the taxable year; and
                            ``(II) the taxpayer used an accrual method 
                        of accounting throughout the period or periods 
                        during which such act (or failure to act) 
                        occurred.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to net operating losses arising in taxable years ending after the date 
of the enactment of this Act.

                    TITLE IV--TECHNICAL CORRECTIONS

SEC. 401. DEFINITIONS; COORDINATION WITH OTHER TITLES.

    (a) Definitions.--For purposes of this title--
            (1) 1986 code.--The term ``1986 Code'' means the Internal 
        Revenue Code of 1986.
            (2) 1998 act.--The term ``1998 Act'' means the Internal 
        Revenue Service Restructuring and Reform Act of 1998 (Public 
        Law 105-206).
            (3) 1997 act.--The term ``1997 Act'' means the Taxpayer 
        Relief Act of 1997 (Public Law 105-34).
    (b) Coordination With Other Titles.--For purposes of applying the 
amendments made by any title of this Act other than this title, the 
provisions of this title shall be treated as having been enacted 
immediately before the provisions of such other titles.

SEC. 402. AMENDMENTS RELATED TO INTERNAL REVENUE SERVICE RESTRUCTURING 
              AND REFORM ACT OF 1998.

    (a) Amendment Related to Section 1101 of 1998 Act.--Paragraph (5) 
of section 6103(h) of the 1986 Code, as added by section 1101(b) of the 
1998 Act, is redesignated as paragraph (6).
    (b) Amendment Related to Section 3001 of 1998 Act.--Paragraph (2) 
of section 7491(a) of the 1986 Code is amended by adding at the end the 
following flush sentence:
        ``Subparagraph (C) shall not apply to any qualified revocable 
        trust (as defined in section 645(b)(1)) with respect to 
        liability for tax for any taxable year ending after the date of 
        the decedent's death and before the applicable date (as defined 
        in section 645(b)(2)).''.
    (c) Amendments Related to Section 3201 of 1998 Act.--
            (1) Section 7421(a) of the 1986 Code is amended by striking 
        ``6015(d)'' and inserting ``6015(e)''.
            (2) Subparagraph (A) of section 6015(e)(3) is amended by 
        striking ``of this section'' and inserting ``of subsection (b) 
        or (f)''.
    (d) Amendment Related to Section 3301 of 1998 Act.--Paragraph (2) 
of section 3301(c) of the 1998 Act is amended by striking ``The 
amendments'' and inserting ``Subject to any applicable statute of 
limitation not having expired with regard to either a tax underpayment 
or a tax overpayment, the amendments''.
    (e) Amendment Related to Section 3401 of 1998 Act.--Section 3401(c) 
of the 1998 Act is amended--
            (1) in paragraph (1), by striking ``7443(b)'' and inserting 
        ``7443A(b)''; and
            (2) in paragraph (2), by striking ``7443(c)'' and inserting 
        ``7443A(c)''.
    (f) Amendment Related to Section 3433 of 1998 Act.--Section 7421(a) 
of the 1986 Code is amended by inserting ``6331(i),'' after 
``6246(b),''.
    (g) Amendment Related to Section 3467 of 1998 Act.--The subsection 
(d) of section 6159 of the 1986 Code relating to cross reference is 
redesignated as subsection (e).
    (h) Amendment Related to Section 3708 of 1998 Act.--Subparagraph 
(A) of section 6103(p)(3) of the 1986 Code is amended by inserting 
``(f)(5),'' after ``(c), (e),''.
    (i) Amendments Related to Section 5001 of 1998 Act.--
            (1) Subparagraph (B) of section 1(h)(13) of the 1986 Code 
        is amended by striking ``paragraph (7)(A)'' and inserting 
        ``paragraph (7)(A)(i)''.
            (2)(A) Subparagraphs (A)(i)(II), (A)(ii)(II), and (B)(ii) 
        of section 1(h)(13) of the 1986 Code shall not apply to any 
        distribution after December 31, 1997, by a regulated investment 
        company or a real estate investment trust with respect to--
                    (i) gains and losses recognized directly by such 
                company or trust, and
                    (ii) amounts properly taken into account by such 
                company or trust by reason of holding (directly or 
                indirectly) an interest in another such company or 
                trust to the extent that such subparagraphs did not 
                apply to such other company or trust with respect to 
                such amounts.
            (B) Subparagraph (A) shall not apply to any distribution 
        which is treated under section 852(b)(7) or 857(b)(8) of the 
        1986 Code as received on December 31, 1997.
            (C) For purposes of subparagraph (A), any amount which is 
        includible in gross income of its shareholders under section 
        852(b)(3)(D) or 857(b)(3)(D) of the 1986 Code after December 
        31, 1997, shall be treated as distributed after such date.
            (D)(i) For purposes of subparagraph (A), in the case of a 
        qualified partnership with respect to which a regulated 
        investment company meets the holding requirement of clause 
        (iii)--
                    (I) the subparagraphs referred to in subparagraph 
                (A) shall not apply to gains and losses recognized 
                directly by such partnership for purposes of 
                determining such company's distributive share of such 
                gains and losses, and
                    (II) such company's distributive share of such 
                gains and losses (as so determined) shall be treated as 
                recognized directly by such company.
        The preceding sentence shall apply only if the qualified 
        partnership provides the company with written documentation of 
        such distributive share as so determined.
            (ii) For purposes of clause (i), the term ``qualified 
        partnership'' means, with respect to a regulated investment 
        company, any partnership if--
                    (I) the partnership is an investment company 
                registered under the Investment Company Act of 1940,
                    (II) the regulated investment company is permitted 
                to invest in such partnership by reason of section 
                12(d)(1)(E) of such Act or an exemptive order of the 
                Securities and Exchange Commission under such section, 
                and
                    (III) the regulated investment company and the 
                partnership have the same taxable year.
            (iii) A regulated investment company meets the holding 
        requirement of this clause with respect to a qualified 
        partnership if (as of January 1, 1998)--
                    (I) the value of the interests of the regulated 
                investment company in such partnership is 35 percent or 
                more of the value of such company's total assets, or
                    (II) the value of the interests of the regulated 
                investment company in such partnership and all other 
                qualified partnerships is 90 percent or more of the 
                value of such company's total assets.
            (3) Paragraph (13) of section 1(h) of the 1986 Code is 
        amended by adding at the end the following new subparagraph:
                    ``(D) Charitable remainder trusts.--Subparagraphs 
                (A) and (B)(ii) shall not apply to any capital gain 
                distribution made by a trust described in section 
                664.''
    (j) Amendment Related to Section 7004 of 1998 Act.--Clause (i) of 
section 408A(c)(3)(C) of the 1986 Code, as amended by section 7004 of 
the 1998 Act, is amended by striking the period at the end of subclause 
(II) and inserting ``, and''.
    (k) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the 1998 Act to which they 
relate.

SEC. 403. AMENDMENTS RELATED TO TAXPAYER RELIEF ACT OF 1997.

    (a) Amendments Related to Section 202 of 1997 Act.--
            (1) Paragraph (2) of section 163(h) of the 1986 Code is 
        amended by striking ``and'' at the end of subparagraph (D), by 
        striking the period at the end of subparagraph (E) and 
        inserting ``, and'', and by adding at the end the following new 
        subparagraph:
                    ``(F) any interest allowable as a deduction under 
                section 221 (relating to interest on educational 
                loans).''
            (2)(A) Subparagraph (C) of section 221(b)(2) of the 1986 
        Code is amended--
                    (i) by striking ``135, 137,'' in clause (i),
                    (ii) by inserting ``135, 137,'' after ``sections 
                86,'' in clause (ii), and
                    (iii) by striking the last sentence.
            (B) Sections 86(b)(2)(A), 135(c)(4)(A), and 
        219(g)(3)(A)(ii) of the 1986 Code are each amended by inserting 
        ``221,'' after ``137,''.
            (C) Subparagraph (A) of section 137(b)(3) of the 1986 Code 
        is amended by inserting ``221,'' before ``911,''.
            (D) Clause (iii) of section 469(i)(3)(E) of the 1986 Code 
        is amended to read as follows:
                            ``(iii) the amounts allowable as a 
                        deduction under sections 219 and 221, and''.
            (3) The last sentence of section 221(e)(1) of the 1986 Code 
        is amended by inserting before the period ``or to any person by 
        reason of a loan under any qualified employer plan (as defined 
        in section 72(p)(4)) or under any contract referred to in 
        section 72(p)(5)''.
    (b) Provision Related to Section 311 of 1997 Act.--In the case of 
any capital gain distribution made after 1997 by a trust to which 
section 664 of the 1986 Code applies with respect to amounts properly 
taken into account by such trust during 1997, paragraphs (5)(A)(i)(I), 
(5)(A)(ii)(I), and (13)(A) of section 1(h) of the 1986 Code (as in 
effect for taxable years ending on December 31, 1997) shall not apply.
    (c) Amendment Related to Section 506 of 1997 Act.--Section 
2001(f)(2) of the 1986 Code is amended by adding at the end the 
following:
        ``For purposes of subparagraph (A), the value of an item shall 
        be treated as shown on a return if the item is disclosed in the 
        return, or in a statement attached to the return, in a manner 
        adequate to apprise the Secretary of the nature of such 
        item.''.
    (d) Amendments Related to Section 904 of 1997 Act.--
            (1) Paragraph (1) of section 9510(c) of the 1986 Code is 
        amended to read as follows:
            ``(1) In general.--Amounts in the Vaccine Injury 
        Compensation Trust Fund shall be available, as provided in 
        appropriation Acts, only for--
                    ``(A) the payment of compensation under subtitle 2 
                of title XXI of the Public Health Service Act (as in 
                effect on August 5, 1997) for vaccine-related injury or 
                death with respect to any vaccine--
                            ``(i) which is administered after September 
                        30, 1988, and
                            ``(ii) which is a taxable vaccine (as 
                        defined in section 4132(a)(1)) at the time 
                        compensation is paid under such subtitle 2, or
                    ``(B) the payment of all expenses of administration 
                (but not in excess of $9,500,000 for any fiscal year) 
                incurred by the Federal Government in administering 
                such subtitle.''.
            (2) Section 9510(b) of the 1986 Code is amended by adding 
        at the end the following new paragraph:
            ``(3) Limitation on transfers to vaccine injury 
        compensation trust fund.--No amount may be appropriated to the 
        Vaccine Injury Compensation Trust Fund on and after the date of 
        any expenditure from the Trust Fund which is not permitted by 
        this section. The determination of whether an expenditure is so 
        permitted shall be made without regard to--
                    ``(A) any provision of law which is not contained 
                or referenced in this title or in a revenue Act, and
                    ``(B) whether such provision of law is a 
                subsequently enacted provision or directly or 
                indirectly seeks to waive the application of this 
                paragraph.''.
    (e) Amendments Related to Section 915 of 1997 Act.--
            (1) Section 915 of the 1997 Act is amended--
                    (A) in subsection (b), by inserting ``or 1998'' 
                after ``1997'', and
                    (B) by amending subsection (d) to read as follows:
    ``(d) Effective Date.--This section shall apply to taxable years 
ending with or within calendar year 1997.''.
            (2) Paragraph (2) of section 6404(h) of the 1986 Code is 
        amended by inserting ``Robert T. Stafford'' before 
        ``Disaster''.
    (f) Amendments Related to Section 1012 of 1997 Act.--
            (1) Paragraph (2) of section 351(c) of the 1986 Code, as 
        amended by section 6010(c) of the 1998 Act, is amended by 
        inserting ``, or the fact that the corporation whose stock was 
        distributed issues additional stock,'' after ``dispose of part 
        or all of the distributed stock''.
            (2) Clause (ii) of section 368(a)(2)(H) of the 1986 Code, 
        as amended by section 6010(c) of the 1998 Act, is amended by 
        inserting ``, or the fact that the corporation whose stock was 
        distributed issues additional stock,'' after ``dispose of part 
        or all of the distributed stock''.
    (g) Provision Related to Section 1042 of 1997 Act.--Rules similar 
to the rules of section 1.1502-75(d)(5) of the Treasury Regulations 
shall apply with respect to any organization described in section 
1042(b) of the 1997 Act.
    (h) Amendment Related to Section 1082 of 1997 Act.--Subparagraph 
(F) of section 172(b)(1) of the 1986 Code is amended by adding at the 
end the following new clause:
                            ``(iv) Coordination with paragraph (2).--
                        For purposes of applying paragraph (2), an 
                        eligible loss for any taxable year shall be 
                        treated in a manner similar to the manner in 
                        which a specified liability loss is treated.''
    (i) Amendment Related to Section 1084 of 1997 Act.--Paragraph (3) 
of section 264(f) of the 1986 Code is amended by adding at the end the 
following flush sentence:
        ``If the amount described in subparagraph (A) with respect to 
        any policy or contract does not reasonably approximate its 
        actual value, the amount taken into account under subparagraph 
        (A) shall be the greater of the amount of the insurance company 
        liability or the insurance company reserve with respect to such 
        policy or contract (as determined for purposes of the annual 
        statement approved by the National Association of Insurance 
        Commissioners) or shall be such other amount as is determined 
        by the Secretary.''
    (j) Amendment Related to Section 1175 of 1997 Act.--Subparagraph 
(C) of section 954(e)(2) of the 1986 Code is amended by striking 
``subsection (h)(8)'' and inserting ``subsection (h)(9)''.
    (k) Amendment Related to Section 1205 of 1997 Act.--Paragraph (2) 
of section 6311(d) of the 1986 Code is amended by striking ``under such 
contracts'' in the last sentence and inserting ``under any such 
contract for the use of credit, debit, or charge cards for the payment 
of taxes imposed by subtitle A''.
    (l) Effective Date.--The amendments made by this section shall take 
effect as if included in the provisions of the 1997 Act to which they 
relate.

SEC. 404. AMENDMENTS RELATED TO TAX REFORM ACT OF 1984.

    (a) In General.--Subparagraph (C) of section 172(d)(4) of the 1986 
Code is amended to read as follows:
                    ``(C) any deduction for casualty or theft losses 
                allowable under paragraph (2) or (3) of section 165(c) 
                shall be treated as attributable to the trade or 
                business; and''.
    (b) Conforming Amendments.--
            (1) Paragraph (3) of section 67(b) of the 1986 Code is 
        amended by striking ``for losses described in subsection (c)(3) 
        or (d) of section 165'' and inserting ``for casualty or theft 
        losses described in paragraph (2) or (3) of section 165(c) or 
        for losses described in section 165(d)''.
            (2) Paragraph (3) of section 68(c) of the 1986 Code is 
        amended by striking ``for losses described in subsection (c)(3) 
        or (d) of section 165'' and inserting ``for casualty or theft 
        losses described in paragraph (2) or (3) of section 165(c) or 
        for losses described in section 165(d)''.
            (3) Paragraph (1) of section 873(b) is amended to read as 
        follows:
            ``(1) Losses.--The deduction allowed by section 165 for 
        casualty or theft losses described in paragraph (2) or (3) of 
        section 165(c), but only if the loss is of property located 
        within the United States.''
    (c) Effective Dates.--
            (1) The amendments made by subsections (a) and (b)(3) shall 
        apply to taxable years beginning after December 31, 1983.
            (2) The amendment made by subsection (b)(1) shall apply to 
        taxable years beginning after December 31, 1986.
            (3) The amendment made by subsection (b)(2) shall apply to 
        taxable years beginning after December 31, 1990.

SEC. 405. OTHER AMENDMENTS.

    (a) Amendments Related to Section 6103 of 1986 Code.--
            (1) Subsection (j) of section 6103 of the 1986 Code is 
        amended by adding at the end the following new paragraph:
            ``(5) Department of agriculture.--Upon request in writing 
        by the Secretary of Agriculture, the Secretary shall furnish 
        such returns, or return information reflected thereon, as the 
        Secretary may prescribe by regulation to officers and employees 
        of the Department of Agriculture whose official duties require 
        access to such returns or information for the purpose of, but 
        only to the extent necessary in, structuring, preparing, and 
        conducting the census of agriculture pursuant to the Census of 
        Agriculture Act of 1997 (Public Law 105-113).''.
            (2) Paragraph (4) of section 6103(p) of the 1986 Code is 
        amended by striking ``(j)(1) or (2)'' in the material preceding 
        subparagraph (A) and in subparagraph (F) and inserting 
        ``(j)(1), (2), or (5)''.
            (3) The amendments made by this subsection shall apply to 
        requests made on or after the date of the enactment of this 
        Act.
    (b) Amendment Related to Section 9004 of Transportation Equity Act 
for the 21st Century.--
            (1) Paragraph (2) of section 9503(f) of the 1986 Code is 
        amended to read as follows:
            ``(2) notwithstanding section 9602(b), obligations held by 
        such Fund after September 30, 1998, shall be obligations of the 
        United States which are not interest-bearing.''
            (2) The amendment made by paragraph (1) shall take effect 
        on October 1, 1998.
    (c) Clerical Amendments.--
            (1) Clause (i) of section 51(d)(6)(B) of the 1986 Code is 
        amended by striking ``rehabilitation plan'' and inserting 
        ``plan for employment''. The reference to ``plan for 
        employment'' in such clause shall be treated as including a 
        reference to the rehabilitation plan referred to in such clause 
        as in effect before the amendment made by the preceding 
        sentence.
            (2) Paragraph (3) of section 56(a) of the 1986 Code is 
        amended by striking ``section 460(b)(2)'' and inserting 
        ``section 460(b)(1)'' and by striking ``section 460(b)(4)'' and 
        inserting ``section 460(b)(3)''.
            (3) Paragraph (10) of section 2031(c) of the 1986 Code is 
        amended by striking ``section 2033A(e)(3)'' and inserting 
        ``section 2057(e)(3)''.
            (4) Subparagraphs (C) and (D) of section 6693(a)(2) of the 
        1986 Code are each amended by striking ``Section'' and 
        inserting ``section''.`