262
ity (as defined in section 7872(g)(4)), or
other licensed facility which extends med-
ical or nursing or ancillary services to pa-
tients and which, immediately before the
termination, expiration, default, or breach
of the lease of or mortgage secured by
such facility, was operated by a provider of
such services which was eligible for partici-
pation in the medicare program under title
XVIII of the Social Security Act with re-
spect to such facility.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 2000.
PART III—CONFORMITY WITH REGULATED
INVESTMENT COMPANY RULES
SEC. 731. CONFORMITY WITH REGULATED INVESTMENT
COMPANY RULES.
(a) DISTRIBUTION REQUIREMENT.—Clauses (i) and
(ii) of section 857(a)(1)(A) (relating to requirements ap-
plicable to real estate investment trusts) are each amended
by striking ‘‘95 percent (90 percent for taxable years be-
ginning before January 1, 1980)’’ and inserting ‘‘90 per-
cent’’.
263
(b) IMPOSITION
OF TAX.—Clause (i) of section
857(b)(5)(A) (relating to imposition of tax in case of fail-
ure to meet certain requirements) is amended by striking
‘‘95 percent (90 percent in the case of taxable years begin-
ning before January 1, 1980)’’ and inserting ‘‘90 per-
cent’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
PART IV—CLARIFICATION OF EXCEPTION FROM
IMPERMISSIBLE TENANT SERVICE INCOME
SEC. 741. CLARIFICATION OF EXCEPTION FOR INDE-
PENDENT OPERATORS.
(a) IN GENERAL.—Paragraph (3) of section 856(d)
(relating to independent contractor defined) is amended
by adding at the end the following flush sentence:
‘‘In the event that any class of stock of either the
real estate investment trust or such person is regu-
larly traded on an established securities market, only
persons who own, directly or indirectly, more than 5
percent of such class of stock shall be taken into ac-
count as owning any of the stock of such class for
purposes of applying the 35 percent limitation set
forth in subparagraph (B) (but all of the out-
standing stock of such class shall be considered out-
264
standing in order to compute the denominator for
purpose of determining the applicable percentage of
ownership).’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 2000.
PART V—MODIFICATION OF EARNINGS AND
PROFITS RULES
SEC. 751. MODIFICATION OF EARNINGS AND PROFITS
RULES.
(a) RULES
FOR DETERMINING WHETHER REGU-
LATED
INVESTMENT
COMPANY
HAS
EARNINGS
AND
PROFITS FROM NON-RIC YEAR.—Subsection (c) of sec-
tion 852 is amended by adding at the end the following
new paragraph:
‘‘(3) DISTRIBUTIONS TO MEET REQUIREMENTS
OF SUBSECTION (a)(2)(B).—Any distribution which
is made in order to comply with the requirements of
subsection (a)(2)(B)—
‘‘(A) shall be treated for purposes of this
subsection and subsection (a)(2)(B) as made
from the earliest earnings and profits accumu-
lated in any taxable year to which the provi-
sions of this part did not apply rather than the
265
most recently accumulated earnings and profits,
and
‘‘(B) to the extent treated under subpara-
graph (A) as made from accumulated earnings
and profits, shall not be treated as a distribu-
tion for purposes of subsection (b)(2)(D) and
section 855.’’.
(b) CLARIFICATION
OF
APPLICATION
OF
REIT
SPILLOVER DIVIDEND RULES
TO DISTRIBUTIONS TO
MEET
QUALIFICATION
REQUIREMENT.—Subparagraph
(B) of section 857(d)(3) is amended by inserting before
the period ‘‘and section 858’’.
(c) APPLICATION OF DEFICIENCY DIVIDEND PROCE-
DURES.—Paragraph (1) of section 852(e) is amended by
adding at the end the following new sentence: ‘‘If the de-
termination under subparagraph (A) is solely as a result
of the failure to meet the requirements of subsection
(a)(2), the preceding sentence shall also apply for pur-
poses of applying subsection (a)(2) to the non-RIC year.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to distributions after December 31,
2000.
266
Subtitle C—Private Activity Bond
Volume Cap
SEC. 761. ACCELERATION OF PHASE-IN OF INCREASE IN
VOLUME CAP ON PRIVATE ACTIVITY BONDS.
(a) IN GENERAL.—The table contained in section
146(d)(2) (relating to per capita limit; aggregate limit) is
amended to read as follows:
‘‘Calendar Year
Per Capita
Limit
Aggregate
Limit
2000 ....................................................................................
$55.00
165,000,000
2001 ....................................................................................
60.00
180,000,000
2002 ....................................................................................
65.00
195,000,000
2003 ....................................................................................
70.00
210,000,000
2004 and thereafter ............................................................
75.00
225,000,000.’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to calendar years beginning after
1999.
Subtitle D—Exclusion from gross
income 
for 
certain 
forgiven
mortgage obligations
SEC. 771. EXCLUSION FROM GROSS INCOME FOR CERTAIN
FORGIVEN MORTGAGE OBLIGATIONS.
(a) IN GENERAL.—Paragraph (1) of section 108(a)
of the Internal Revenue Code of 1986 (relating to exclu-
sion from gross income) is amended by striking ‘‘or’’ at
the end of both subparagraphs (A) and (C), by striking
the period at the end of subparagraph (D) and inserting
‘‘, or’’, and by inserting after subparagraph (D) the fol-
lowing new subparagraph:
267
‘‘(E) in the case of an individual, the in-
debtedness discharged is qualified residential in-
debtedness.’’.
(b) 
QUALIFIED
RESIDENTIAL
INDEBTEDNESS
SHORTFALL.—Section 108 of such Code (relating to dis-
charge of indebtedness) is amended by adding at the end
the following new subsection:
‘‘(h) QUALIFIED RESIDENTIAL INDEBTEDNESS.—
‘‘(1) 
LIMITATIONS.—The 
amount 
excluded
under subparagraph (E) of subsection (a)(1) with
respect to any qualified residential indebtedness
shall not exceed the excess (if any) of—
‘‘(A) the outstanding principal amount of
such indebtedness (immediately before the dis-
charge), over
‘‘(B) the sum of—
‘‘(i) the amount realized from the sale
of the real property securing such indebt-
edness reduced by the cost of such sale,
and
‘‘(ii) the outstanding principal amount
of any other indebtedness secured by such
property.
‘‘(2) 
QUALIFIED
RESIDENTIAL
INDEBTED-
NESS.—
268
‘‘(A) IN
GENERAL.—The term ‘qualified
residential indebtedness’ means indebtedness
which—
‘‘(i) was incurred or assumed by the
taxpayer in connection with real property
used as a residence and is secured by such
real property,
‘‘(ii) is incurred or assumed to ac-
quire, construct, reconstruct, or substan-
tially improve such real property, and
‘‘(iii) with respect to which such tax-
payer makes an election to have this para-
graph apply.
‘‘(B) REFINANCED INDEBTEDNESS.—Such
term shall include indebtedness resulting from
the refinancing of indebtedness under subpara-
graph (A)(ii), but only to the extent the refi-
nanced indebtedness does not exceed the
amount of the indebtedness being refinanced.
‘‘(C) EXCEPTIONS.—Such term shall not
include qualified farm indebtedness or qualified
real property business indebtedness.’’.
(c) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 108(a) of such
Code is amended—
269
(A) in subparagraph (A) by striking ‘‘and
(D)’’ and inserting ‘‘(D), and (E)’’, and
(B) by amending subparagraph (B) to read
as follows:
‘‘(B) 
INSOLVENCY
EXCLUSION
TAKES
PRECEDENCE OVER QUALIFIED FARM EXCLU-
SION; QUALIFIED
REAL
PROPERTY
BUSINESS
EXCLUSION; 
AND
QUALIFIED
RESIDENTIAL
SHORTFALL
EXCLUSION.—Subparagraphs (C),
(D), and (E) of paragraph (1) shall not apply
to a discharge to the extent the taxpayer is in-
solvent.’’.
(2) Paragraph (1) of section 108(b) of such
Code is amended by striking ‘‘or (C)’’ and inserting
‘‘(C), or (E)’’.
(3) Subsection (c) of section 121 of such Code
is amended by adding at the end the following new
paragraph:
‘‘(4) SPECIAL RULE RELATING TO DISCHARGE
OF
INDEBTEDNESS.—The amount of gain which
(but for this paragraph) would be excluded from
gross income under subsection (a) with respect to a
principal residence shall be reduced by the amount
excluded 
from 
gross 
income 
under 
section
108(a)(1)(E) with respect to such residence.’’.
270
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to discharges after the date of the
enactment of this Act.
TITLE VIII—MISCELLANEOUS
PROVISIONS
SEC. 801. CREDIT FOR MODIFICATIONS TO INTER-CITY
BUSES REQUIRED UNDER THE AMERICANS
WITH DISABILITIES ACT OF 1990.
(a) IN GENERAL.—Subsection (a) of section 44 (re-
lating to expenditures to provide access to disabled individ-
uals) is amended to read as follows:
‘‘(a) GENERAL RULE.—For purposes of section 38,
the amount of the disabled access credit determined under
this section for any taxable year shall be an amount equal
to the sum of—
‘‘(1) in the case of an eligible small business, 50
percent of so much of the eligible access expendi-
tures for the taxable year as exceed $250 but do not
exceed $10,250, and
‘‘(2) 50 percent of so much of the eligible bus
access expenditures for the taxable year with respect
to each eligible bus as exceed $250 but do not ex-
ceed $30,250.’’.
(b) ELIGIBLE BUS ACCESS EXPENDITURES.—Sec-
tion 44 is amended by redesignating subsections (d) and
271
(e) as subsections (e) and (f), respectively, and by insert-
ing after subsection (c) the following new subsection:
‘‘(d) ELIGIBLE BUS ACCESS EXPENDITURES.—For
purposes of this section—
‘‘(1) IN GENERAL.—The term ‘eligible bus ac-
cess expenditures’ means amounts paid or incurred
by the taxpayer for the purpose of enabling the tax-
payer’s eligible bus to comply with applicable re-
quirements under the Americans With Disabilities
Act of 1990 (as in effect on the date of the enact-
ment of this subsection).
‘‘(2) 
CERTAIN
EXPENDITURES
NOT
IN-
CLUDED.—The amount of eligible bus access ex-
penditures otherwise taken into account under sub-
section (a)(2) shall be reduced to the extent that
funds for such expenditures are received under any
Federal, State, or local program.
‘‘(3) ELIGIBLE BUS.—The term ‘eligible bus’
means any automobile bus eligible for a refund
under section 6427(b) by reason of transportation
described in section 6427(b)(1)(A).’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999, and before January 1, 2012.
272
SEC. 802. CERTAIN EDUCATIONAL BENEFITS PROVIDED BY
AN EMPLOYER TO CHILDREN OF EMPLOYEES
EXCLUDABLE FROM GROSS INCOME AS A
SCHOLARSHIP.
(a) IN GENERAL.—Section 117 (relating to qualified
scholarships) is amended by adding at the end the fol-
lowing new subsection:
‘‘(e) EMPLOYER-PROVIDED EDUCATIONAL BENEFITS
PROVIDED TO CHILDREN OF EMPLOYEES.—
‘‘(1) IN
GENERAL.—In determining whether
any amount is a qualified scholarship for purposes
of subsection (a), the fact that such amount is pro-
vided in connection with an employment relationship
shall be disregarded if—
‘‘(A) such amount is provided by the em-
ployer to a child (as defined in section
151(c)(3)) of an employee of such employer,
‘‘(B) such amount is provided pursuant to
a plan which meets the nondiscrimination re-
quirements of subsection (d)(3), and
‘‘(C) amounts provided under such plan
are in addition to any other compensation pay-
able to employees and such plan does not pro-
vide employees with a choice between such
amounts and any other benefit.
273
For purposes of subparagraph (C), the business
practices of the employer (as well as such plan) shall
be taken into account.
‘‘(2) DOLLAR LIMITATIONS.—
‘‘(A) PER CHILD.—The amount excluded
from the gross income of the employee by rea-
son of paragraph (1) for a taxable year with re-
spect to amounts provided to each child of such
employee shall not exceed $2,000.
‘‘(B) AGGREGATE LIMIT.—The amount ex-
cluded from the gross income of the employee
by reason of paragraph (1) for a taxable year
(after the application of subparagraph (A))
shall not exceed the excess of the dollar amount
contained in section 127(a)(2) over the amount
excluded from the employee’s gross income
under section 127 for such year.
‘‘(3) PRINCIPAL
SHAREHOLDERS
AND
OWN-
ERS.—Paragraph (1) shall not apply to any amount
provided to any child of any individual if such indi-
vidual (or such individual’s spouse) owns (on any
day of the year) more than 5 percent of the stock
or of the capital or profits interest in the employer.
‘‘(4) DEGREE REQUIREMENT NOT TO APPLY.—
In the case of an amount which is treated as a quali-
274
fied scholarship by reason of this subsection, sub-
section (a) shall be applied without regard to the re-
quirement that the recipient be a candidate for a de-
gree.
‘‘(5) CERTAIN OTHER RULES TO APPLY.—Rules
similar to the rules of paragraphs (4), (5), and (7)
of section 127(c) shall apply for purposes of this
subsection.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 803. TAX INCENTIVES FOR QUALIFIED UNITED STATES
INDEPENDENT FILM AND TELEVISION PRO-
DUCTION.
(a) IN GENERAL.—Subpart C of part IV of sub-
chapter A of chapter 1 (relating to refundable credits) is
amended by redesignating section 35 as section 36 and
by inserting after section 34 the following new section:
‘‘SEC. 35. UNITED STATES INDEPENDENT FILM AND TELE-
VISION PRODUCTION WAGE CREDIT.
‘‘(a) AMOUNT OF CREDIT.—There shall be allowed
as a credit against the tax imposed by this subtitle for
the taxable year an amount equal to 20 percent of the
qualified wages paid or incurred during the calendar year
which ends with or within the taxable year.
275
‘‘(b) ONLY FIRST $20,000 OF WAGES PER YEAR
TAKEN INTO ACCOUNT.—With respect to each qualified
United States independent film and television production,
the amount of qualified wages paid or incurred to each
qualified United States independent film and television
production employee which may be taken into account for
a calendar year shall not exceed $20,000.
‘‘(c) QUALIFIED
WAGES.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘qualified wages’
means any wages paid or incurred by an employer
for services performed by an employee while such
employee is a qualified United States independent
film and television production employee.
‘‘(2) 
QUALIFIED
UNITED
STATES
INDE-
PENDENT FILM AND TELEVISION PRODUCTION EM-
PLOYEE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
United States independent film and television
production employee’ means, with respect to
any period, any employee of an employer if sub-
stantially all of the services performed during
such period by such employee for such employer
are performed in an activity related to any
qualified United States independent film and
276
television production in a trade or business of
the employer.
‘‘(B) CERTAIN
INDIVIDUALS
NOT
ELIGI-
BLE.—Such term shall not include—
‘‘(i) any individual described in sub-
paragraph (A), (B), or (C) of section
51(i)(1), and
‘‘(ii) any 5-percent owner (as defined
in section 416(i)(1)(B).
‘‘(3) COORDINATION WITH OTHER WAGE CRED-
ITS.—No credit shall be allowed under any other
provision of this chapter for wages paid to any em-
ployee during any calendar year if the employer is
allowed a credit under this section for any of such
wages.
‘‘(4) WAGES.—The term ‘wages’ has the same
meaning as when used in section 51.
‘‘(d) QUALIFIED UNITED STATES INDEPENDENT
FILM AND TELEVISION PRODUCTION.—For purposes of
this section—
‘‘(1) IN GENERAL.—The term ‘qualified United
States independent film and television production’
means any production of any motion picture (wheth-
er released theatrically or directly to video cassette
277
or any other format), a mini series, or a pilot pro-
duction for a dramatic series if—
‘‘(A) the production is produced in whole
or in substantial part within the United States
(determined on the basis of proportion of the
qualified United States independent film and
television production employees with respect to
such production to total employee performing
services related to such production),
‘‘(B) the production is created primarily
for use as public entertainment or for edu-
cational purposes, and
‘‘(C) the total production cost of the pro-
duction is less than $10,000,000.
‘‘(2) 
PUBLIC
ENTERTAINMENT.—The 
term
‘public entertainment’ includes a motion picture
film, video tape, or television program intended for
initial broadcast via the public broadcast spectrum
or delivered via cable distribution, or productions
that are submitted to a national organization that
rates films for violent or adult content. Such term
does not include any film or tape the market for
which is primarily topical, is otherwise essentially
transitory in nature, or is produced for private non-
commercial use.
278
‘‘(3) TOTAL
PRODUCTION
COST.—The term
‘total production cost’ includes costs incurred in the
delivery of the final master copy but does not in-
clude development, acquisition, and marketing costs
of the qualified United States independent film and
television production.
‘‘(e) CONTROLLED GROUPS.—For purposes of this
section—
‘‘(1) all employers treated as a single employer
under subsection (a) or (b) of section 52 shall be
treated as a single employer for purposes of this
subpart, and
‘‘(2) the credit (if any) determined under this
section with respect to each such employer shall be
its proportionate share of the wages giving rise to
such credit.
‘‘(f) CERTAIN OTHER RULES MADE APPLICABLE.—
Rules similar to the rules of section 51(k) and subsections
(c) and (d) of section 52 shall apply for purposes of this
section.’’.
(b) DENIAL OF DOUBLE BENEFIT.—Subsection (a)
of section 280C is amended by inserting ‘‘35,’’ before
‘‘45A(a),’’.
(c) CONFORMING AMENDMENTS.—