I
104TH CONGRESS
1ST SESSION
H. R. 9
To create jobs, enhance wages, strengthen property rights, maintain certain
economic liberties, decentralize and reduce the power of the Federal
Government with respect to the States, localities, and citizens of the
United States, and to increase the accountability of Federal officials.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 4, 1995
Mr. ARCHER, Mr. DELAY, Mr. SAXTON, Mrs. SMITH of Washington, and Mr.
TAUZIN
(for 
themselves, 
Mr. 
HASTERT, 
Mr. 
DORNAN, 
Mr.
ROHRABACHER, Mr. BLUTE, Mr. SMITH of Texas, Mr. LINDER, Mr. KIM,
Mr. MICA, Mr. BACHUS, Ms. DANNER, Mr. HOKE, Mr. CLINGER, Mr.
BALLENGER, Mr. CALLAHAN, Mr. SHAW, Mr. NUSSLE, Mr. LARGENT,
Mr. COX, Mr. STOCKMAN, Mr. SMITH of Michigan, Mr. BAKER of Califor-
nia, Mr. HERGER, Mr. HEINEMAN, Mrs. FOWLER, Mr. SENSENBRENNER,
Mr. STEARNS, Mr. HUTCHINSON, Mr. HANCOCK, Mr. TALENT, Mr. EM-
ERSON, Mr. ENGLISH of Pennsylvania, Mr. ENSIGN, Mr. HOSTETTLER,
Mr. JONES, Mr. TIAHRT, Mrs. MYRICK, Mr. EWING, Mr. HOUGHTON,
Mrs. CUBIN, Mr. KINGSTON, Mr. HASTINGS of Washington, Mr. GANSKE,
Mr. SCHAEFER, Mr. BAKER of Louisiana, Mr. HALL of Texas, Mr.
WELDON of Florida, Mr. COBURN, Mr. WELLER, Mr. LEWIS of Ken-
tucky, Mr. BUNNING of Kentucky, Mr. FOLEY, Mr. INGLIS of South
Carolina, Mr. LIGHTFOOT, Mr. ISTOOK, Mr. CALVERT, Mr. HOBSON, Mr.
KNOLLENBERG, Mr. BILIRAKIS, Mr. HAYWORTH, Mr. FOX, Mr.
RADANOVICH, Mr. ROTH, Mr. WAMP, Mr. SOLOMON, Mr. BLILEY, Mr.
DOOLITTLE, Mr. PACKARD, Mr. GILMAN, Mr. MILLER of Florida, Mr.
ROYCE, Mr. FLANAGAN, Mr. LATHAM, Ms. MOLINARI, Mr. GUNDERSON,
Mr. THORNBERRY, Mr. RIGGS, Mr. ALLARD, Mr. CHRISTENSEN, Mr.
GOODLATTE, Mr. SANFORD, Mr. HILLEARY, Mr. COOLEY, Mr. WICKER,
Mr. BONO, Mr. FRISA, Mr. MCINTOSH, Mr. EVERETT, Mr. SMITH of
New Jersey, Mr. SHADEGG, Mrs. JOHNSON of Connecticut, Mr. CHRYS-
LER, Mr. CUNNINGHAM, Mr. CANADY, Mr. MCCOLLUM, Mr. GOODLING,
Mr. BARTON of Texas, Mr. BARR, Mr. ARMEY, Mr. FORBES, Mrs.
WALDHOLTZ, Mr. TATE, Ms. DUNN, Mr. MCHUGH, Mr. CRAPO, Mr.
KOLBE, Mr. PAXON, Mr. YOUNG of Florida, Mr. COMBEST, Mr. COBLE,
Mr. EHRLICH, and Mrs. MEYERS of Kansas) introduced the following bill;
which was referred as follows:
Titles I–II, referred to the Committee on Ways and Means
Title III, referred to the Committee on Science and, in addition, to the Com-
mittees on Commerce and Government Reform and Oversight, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the commit-
tee concerned
Title IV, referred to the Committee on the Budget and, in addition, to the
Committees on Rules, Government Reform and Oversight, and the Judici-
ary, for a period to be subsequently determined by the Speaker, in each
case for consideration of such provisions as fall within the jurisdiction of
the committee concerned
Title V, referred to the Committee on Government Reform and Oversight
Title VI–IX, referred to the Committee on the Judiciary
Title X, referred to the Committee on the Budget and, in addition, to the
Committees on Government Reform and Oversight, Rules, and the Judici-
ary, for a period to be subsequently determined by the Speaker, in each
case for consideration of such provisions as fall within the jurisdiction of
the committee concerned
Title XI, referred to the Committee on Ways and Means and, in addition, to
the Committee on the Budget, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
Title XII, referred to the Committee on Ways and Means
JANUARY 19, 1995
Additional sponsors: Mr. STUMP, Mr. LUCAS, Mr. BURTON of Indiana, Mr.
NORWOOD, Mrs. VUCANOVICH, Mr. WALKER, Mr. HUNTER, Mr.
CREMEANS, Mr. LIVINGSTON, Mr. LATOURETTE, Mr. SAM JOHNSON of
Texas, and Mr. COLLINS of Georgia
FEBRUARY 9, 1995
Titles V, VI and section 4003 are rereferred to the Committee on Small
Business
FEBRUARY 9, 1995
Additional sponsors: Mrs. SEASTRAND, Mr. ROBERTS, Mr. POMBO, Mr.
CRANE, and Mr. FIELDS of Texas
A BILL
To create jobs, enhance wages, strengthen property rights,
maintain certain economic liberties, decentralize and re-
duce the power of the Federal Government with respect
to the States, localities, and citizens of the United States,
and to increase the accountability of Federal officials.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Job Creation and
Wage Enhancement Act of 1995’’.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I—CAPITAL GAINS REFORM
Sec. 1001. 50 percent capital gains deduction.
Sec. 1002. Indexing of certain assets for purposes of determining gain or loss.
Sec. 1003. Capital loss deduction allowed with respect to sale or exchange of
principal residence.
TITLE II—NEUTRAL COST RECOVERY
Sec. 2001. Depreciation adjustment for certain property placed in service after
December 31, 1994.
TITLE III—RISK ASSESSMENT AND COST/BENEFIT ANALYSIS FOR
NEW REGULATIONS
Sec. 3001. Findings
Subtitle A—Risk Assessment and Communication
Sec. 3101. Short title.
Sec. 3102. Purposes.
Sec. 3103. Effective date; applicability; savings provisions.
Sec. 3104. Principles for risk assessment.
Sec. 3105. Principles for risk characterization and communication.
Sec. 3106. Guidelines, plan for assessing new information, and report.
Sec. 3107. Definitions.
Subtitle B—Analysis of Risk Reduction Benefits and Costs
Sec. 3201. Analysis of risk reduction benefits and costs.
Subtitle C—Peer Review
Sec. 3301. Peer review program.
TITLE IV—ESTABLISHMENT OF FEDERAL REGULATORY BUDGET
COST CONTROL
Sec. 4001. Amendments to the Congressional Budget Act of 1974.
Sec. 4002. President’s annual budget submissions.
Sec. 4003. Estimation and disclosure of costs of Federal regulation.
TITLE V—STRENGTHENING OF PAPERWORK REDUCTION ACT
Sec. 5001. Short title.
Subtitle A—Authorization of Appropriations
Sec. 5101. Authorization of appropriations.
Subtitle B—Reducing the Burden of Federal Paperwork on the Public
Sec. 5201. Coverage of all federally sponsored paperwork burdens.
Sec. 5202. Paperwork reduction goals.
Subtitle C—Enhancing Government Responsibility and Accountability for
Reducing the Burden of Federal Paperwork
Sec. 5301. Reemphasizing the responsibility of the Director to control the bur-
den of Federal paperwork.
Sec. 5302. Enhancing agency responsibility to obtain public review of proposed
paperwork burdens.
Sec. 5303. Expediting review at the Office of Management and Budget.
Sec. 5304. Improving public and agency scrutiny of paperwork burdens pro-
posed for renewal.
Sec. 5305. Protection for whistleblowers of unauthorized paperwork burden.
Sec. 5306. Enhancing public participation.
Sec. 5307. Expediting review of an agency information collection request with
a reduced burden.
Subtitle D—Enhancing Agency Responsibility for Sharing and Disseminating
Public Information
Sec. 5401. Prescribing governmentwide standards for sharing and disseminat-
ing public information.
Sec. 5402. Agency responsibilities for sharing and disseminating public infor-
mation.
Sec. 5403. Agency information inventory/locator system.
Subtitle E—Additional Government Information Management Responsibility
Sec. 5501. Strengthening the statistical policy and coordination functions of the
Director.
Sec. 5502. Use of electronic information collection and dissemination tech-
niques to reduce burden.
Sec. 5503. Agency implementation.
Sec. 5504. Automatic data processing equipment plan.
Sec. 5505. Technical and conforming amendments.
Subtitle F—Effective Dates
Sec. 5601. Effective dates.
TITLE VI—STRENGTHENING REGULATORY FLEXIBILITY
Sec. 6001. Judicial review.
Sec. 6002. Consideration of direct and indirect effects of rules.
Sec. 6003. Rules opposed by SBA Chief Counsel for Advocacy.
Sec. 6004. Sense of Congress regarding SBA Chief Counsel for Advocacy.
TITLE VII—REGULATORY IMPACT ANALYSES
Sec. 7001. Short title.
Sec. 7002. Rule making notices for major rules.
Sec. 7003. Hearing requirement for proposed rules; extension of comment pe-
riod.
Sec. 7004. Regulatory impact analysis.
Sec. 7005. Additional responsibilities of Director of the Office of Management
and Budget.
Sec. 7006. Standard of clarity.
Sec. 7007. Report by OIRA.
Sec. 7008. Definitions.
TITLE VIII—PROTECTION AGAINST FEDERAL REGULATORY
ABUSE
Subtitle A—Citizens’ Regulatory Bill of Rights
Sec. 8101. Citizens’ regulatory bill of rights.
Subtitle B—Private Sector Whistleblowers’ Protection
Sec. 8201. Short title.
Sec. 8202. Purpose.
Sec. 8203. Coverage.
Sec. 8204. Prohibited regulatory practices.
Sec. 8205. Prohibited regulatory practice as a defense to agency action.
Sec. 8206. Enforcement.
Sec. 8207. Citizen suits.
Sec. 8208. Office of the Special Counsel.
Sec. 8209. Relation to criminal investigations.
TITLE IX—PRIVATE PROPERTY RIGHTS PROTECTIONS AND
COMPENSATION
Sec. 9001. Statement of purpose.
Sec. 9002. Compensation for Federal agency infringement or deprivation of
rights to private property.
Sec. 9003. Severability.
Sec. 9004. Definitions.
TITLE X—ESTABLISHMENT OF FEDERAL MANDATE BUDGET
COST CONTROL
Sec. 10001. Amendments to the Congressional Budget Act of 1974.
Sec. 10002. President’s annual budget submissions.
Sec. 10003. Estimation and disclosure of costs of Federal mandates.
TITLE XI—TAXPAYER DEBT BUY-DOWN
Sec. 11001. Designation of amounts for reduction of public debt.
Sec. 11002. Public Debt Reduction Trust Fund.
Sec. 11003. Taxpayer-generated sequestration of Federal spending to reduce
the public debt.
TITLE XII—SMALL BUSINESS INCENTIVES
Sec. 12001. Increase in unified estate and gift tax credits.
Sec. 12002. Increase in expense treatment for small businesses.
Sec. 12003. Clarification of definition of principal place of business.
Sec. 12004. Treatment of storage of product samples.
TITLE I—CAPITAL GAINS
REFORM
SEC. 1001. 50 PERCENT CAPITAL GAINS DEDUCTION.
(a) GENERAL RULE.—Part I of subchapter P of
chapter 1 of the Internal Revenue Code of 1986 (relating
to treatment of capital gains) is amended to read as fol-
lows:
‘‘PART I—TREATMENT OF CAPITAL GAINS
‘‘Sec. 1201. Capital gains deduction.
‘‘SEC. 1201. CAPITAL GAINS DEDUCTION.
‘‘(a) GENERAL RULE.—If for any taxable year a tax-
payer has a net capital gain, 50 percent of such gain shall
be a deduction from gross income.
‘‘(b) ESTATES AND TRUSTS.—In the case of an es-
tate or trust, the deduction shall be computed by excluding
the portion (if any) of the gains for the taxable year from
sales or exchanges of capital assets which, under sections
652 and 662 (relating to inclusions of amounts in gross
income of beneficiaries of trusts), is includible by the in-
come beneficiaries as gain derived from the sale or ex-
change of capital assets.
‘‘(c) COORDINATION WITH TREATMENT OF CAPITAL
GAIN UNDER LIMITATION ON INVESTMENT INTEREST.—
For purposes of this section, the net capital gain for any
taxable year shall be reduced (but not below zero) by the
amount which the taxpayer takes into account as invest-
ment income under section 163(d)(4)(B)(iii).
‘‘(d) TRANSITIONAL RULE.—
‘‘(1) IN GENERAL.—In the case of a taxable
year which includes January 1, 1995—
‘‘(A) the amount taken into account as the
net capital gain under subsection (a) shall not
exceed the net capital gain determined by only
taking into account gains and losses properly
taken into account for the portion of the tax-
able year on or after January 1, 1995, and
‘‘(B) if the net capital gain for such year
exceeds the amount taken into account under
subsection (a), the rate of tax imposed by sec-
tion 1 on such excess shall not exceed 28 per-
cent.
‘‘(2) SPECIAL
RULES
FOR
PASS-THRU
ENTI-
TIES.—
‘‘(A) IN GENERAL.—In applying paragraph
(1) with respect to any pass-thru entity, the de-
termination of when gains and losses are prop-
erly taken into account shall be made at the en-
tity level.
‘‘(B) PASS-THRU ENTITY DEFINED.—For
purposes of subparagraph (A), the term ‘pass-
thru entity’ means—
‘‘(i) a regulated investment company,
‘‘(ii) a real estate investment trust,
‘‘(iii) an S corporation,
‘‘(iv) a partnership,
‘‘(v) an estate or trust, and
‘‘(vi) a common trust fund.’’
(b) DEDUCTION ALLOWABLE
IN COMPUTING AD-
JUSTED GROSS INCOME.—Subsection (a) of section 62 of
such Code is amended by inserting after paragraph (15)
the following new paragraph:
‘‘(16) LONG-TERM
CAPITAL
GAINS.—The de-
duction allowed by section 1201.’’
(c) TECHNICAL AND CONFORMING CHANGES.—
(1) Section 13113 of the Revenue Reconcili-
ation Act of 1993 (relating to 50-percent exclusion
for gain from certain small business stock), and the
amendments made by such section, are hereby re-
pealed; and the Internal Revenue Code of 1986 shall
be applied as if such section (and amendments) had
never been enacted.
(2) Section 1 of such Code is amended by strik-
ing subsection (h).
(3) Paragraph (1) of section 170(e) of such
Code is amended by striking ‘‘the amount of gain’’
in the material following subparagraph (B)(ii) and
inserting ‘‘50 percent of the amount of gain’’.
(4)(A) Paragraph (2) of section 172(d) of such
Code is amended to read as follows:
‘‘(2) CAPITAL GAINS AND LOSSES.—
‘‘(A) LOSSES OF TAXPAYERS OTHER THAN
CORPORATIONS.—In the case of a taxpayer
other than a corporation, the amount deductible
on account of losses from sales or exchanges of
capital assets shall not exceed the amount in-
cludible on account of gains from sales or ex-
changes of capital assets.
‘‘(B) DEDUCTION UNDER SECTION 1201.—
The deduction under section 1201 shall not be
allowed.’’
(B) Subparagraph (B) of section 172(d)(4) of
such Code is amended by striking ‘‘paragraphs (1)
and (3)’’ and inserting ‘‘paragraphs (1), (2)(B), and
(3)’’.
(5) Paragraph (4) of section 642(c) of such
Code is amended to read as follows:
‘‘(4) ADJUSTMENTS.—To the extent that the
amount otherwise allowable as a deduction under
this subsection consists of gain from the sale or ex-
change of capital assets held for more than 1 year,
proper adjustment shall be made for any deduction
allowable to the estate or trust under section 1201
(relating to deduction for excess of capital gains over
capital losses). In the case of a trust, the deduction
allowed by this subsection shall be subject to section
681 (relating to unrelated business income).’’
(6) Paragraph (3) of section 643(a) of such
Code is amended by adding at the end thereof the
following new sentence: ‘‘The deduction under sec-
tion 1201 (relating to deduction of excess of capital
gains over capital losses) shall not be taken into ac-
count.’’
(7) Paragraph (4) of section 691(c) of such
Code is amended by striking ‘‘sections 1(h), 1201,
and 1211’’ and inserting ‘‘sections 1201 and 1211’’.
(8) The second sentence of section 871(a)(2) of
such Code is amended by inserting ‘‘such gains and
losses shall be determined without regard to section
1201 (relating to deduction for capital gains) and’’
after ‘‘except that’’.
(9) Subsection (d) of section 1044 of such Code
is amended by striking the last sentence.
(10)(A) Paragraph (2) of section 1211(b) of
such Code is amended to read as follows:
‘‘(2) the sum of—
‘‘(A) the excess of the net short-term cap-
ital loss over the net long-term capital gain, and
‘‘(B) one-half of the excess of the net long-
term capital loss over the net short-term capital
gain.’’
(B) So much of paragraph (2) of section
1212(b) of such Code as precedes subparagraph (B)
thereof is amended to read as follows:
‘‘(2) SPECIAL RULES.—
‘‘(A) ADJUSTMENTS.—
‘‘(i) For purposes of determining the
excess referred to in paragraph (1)(A),
there shall be treated as short-term capital
gain in the taxable year an amount equal
to the lesser of—
‘‘(I) the amount allowed for the
taxable year under paragraph (1) or
(2) of section 1211(b), or
‘‘(II) the adjusted taxable income
for such taxable year.
‘‘(ii) For purposes of determining the
excess referred to in paragraph (1)(B),
there shall be treated as short-term capital
gain in the taxable year an amount equal
to the sum of—
‘‘(I) the amount allowed for the
taxable year under paragraph (1) or
(2) of section 1211(b) or the adjusted
taxable income for such taxable year,
whichever is the least, plus
‘‘(II) the excess of the amount
described in subclause (I) over the net
short-term capital loss (determined
without regard to this subsection) for
such year.’’
(11) Paragraph (1) of section 1402(i) of such
Code is amended by inserting ‘‘, and the deduction
provided by section 1201 shall not apply’’ before the
period at the end thereof.
(12) Section 12 of such Code is amended by
striking paragraph (4) and redesignating the follow-
ing paragraphs accordingly.
(13) Paragraph (2) of section 527(b) of such
Code is hereby repealed.
(14) Subparagraph (D) of section 593(b)(2) of
such Code is amended by adding ‘‘and’’ at the end
of clause (iii), by striking ‘‘, and’’ at the end of
clause (iv) and inserting a period, and by striking
clause (v).
(15) Paragraph (2) of section 801(a) of such
Code is hereby repealed.
(16) Subsection (c) of section 831 of such Code
is amended by striking paragraph (1) and redesig-
nating the following paragraphs accordingly.
(17)(A) Subparagraph (A) of section 852(b)(3)
of such Code is amended by striking ‘‘, determined
as provided in section 1201(a), on’’ and inserting
‘‘of 17.5 percent of’’.
(B) Clause (iii) of section 852(b)(3)(D) of such
Code is amended—
(i) by striking ‘‘65 percent’’ and inserting
‘‘82.5 percent’’, and
(ii) by striking ‘‘section 1201(a)’’ and in-
serting ‘‘subparagraph (A)’’.
(18) Clause (ii) of section 857(b)(3)(A) of such
Code is amended by striking ‘‘determined at the rate
provided in section 1201(a) on’’ and inserting ‘‘of
17.5 percent of’’.
(19) Paragraph (1) of section 882(a) of such
Code is amended by striking ‘‘section 11, 55, 59A,
or 1201(a)’’ and inserting ‘‘section 11, 55, or 59A’’.
(20) Subsection (b) of section 904 of such Code
is amended by striking paragraphs (2)(B), (3)(B),
(3)(D), and (3)(E).
(21) Subsection (b) of section 1374 of such
Code is amended by striking paragraph (4).
(22) Subsection (b) of section 1381 is amended
by striking ‘‘or 1201’’.
(23) Subsection (e) of section 1445 of such
Code is amended—
(A) in paragraph (1) by striking ‘‘35 per-
cent (or, to the extent provided in regulations,
28 percent)’’ and inserting ‘‘17.5 percent (or, to
the extent provided in regulations, 19.8 per-
cent)’’, and
(B) in paragraph (2) by striking ‘‘35 per-
cent’’ and inserting ‘‘17.5 percent’’.
(24) Clause (i) of section 6425(c)(1)(A) of such
Code is amended by striking ‘‘or 1201(a)’’.
(25) Clause (i) of section 6655(g)(1)(A) of such
Code is amended by striking ‘‘or 1201(a)’’.
(26)(A) 
The 
second 
sentence 
of 
section
7518(g)(6)(A) of such Code is amended—
(i) by striking ‘‘during a taxable year to
which section 1(h) or 1201(a) applies’’, and
(ii) by striking ‘‘28 percent (34 percent’’
and inserting ‘‘19.8 percent (17.5 percent’’.
(B) 
The 
second 
sentence 
of 
section
607(h)(6)(A) of the Merchant Marine Act, 1936 is
amended—
(i) by striking ‘‘during a taxable year to
which section 1(h) or 1201(a) of such Code ap-
plies’’, and
(ii) by striking ‘‘28 percent (34 percent’’
and inserting ‘‘19.8 percent (17.5 percent’’.
(d) EFFECTIVE DATE.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by
this section shall apply to taxable years ending after
December 31, 1994.
(2) CONTRIBUTIONS.—The amendment made
by subsection (c)(3) shall apply only to contributions
on or after January 1, 1995.
(3) WITHHOLDING.—The amendment made by
subsection (c)(23) shall apply only to amounts paid
after the date of the enactment of this Act.
SEC. 1002. INDEXING OF CERTAIN ASSETS FOR PURPOSES
OF DETERMINING GAIN OR LOSS.
(a) IN GENERAL.—Part II of subchapter O of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
basis rules of general application) is amended by inserting
after section 1021 the following new section:
‘‘SEC. 1022. INDEXING OF CERTAIN ASSETS FOR PURPOSES
OF DETERMINING GAIN OR LOSS.
‘‘(a) GENERAL RULE.—
‘‘(1) INDEXED
BASIS
SUBSTITUTED
FOR
AD-
JUSTED
BASIS.—Except as otherwise provided in
this subsection, if an indexed asset which has been
held for more than 1 year is sold or otherwise dis-
posed of, for purposes of this title the indexed basis
of the asset shall be substituted for its adjusted
basis.
‘‘(2) EXCEPTION
FOR
DEPRECIATION, ETC.—
The deduction for depreciation, depletion, and amor-
tization shall be determined without regard to the
application of paragraph (1) to the taxpayer or any
other person.
‘‘(b) INDEXED ASSET.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘indexed asset’ means—
‘‘(A) stock in a corporation, and
‘‘(B) tangible property (or any interest
therein),
which is a capital asset or property used in the trade
or business (as defined in section 1231(b)).
‘‘(2) CERTAIN
PROPERTY
EXCLUDED.—For
purposes of this section, the term ‘indexed asset’
does not include—
‘‘(A) CREDITOR’S INTEREST.—Any interest
in property which is in the nature of a credi-
tor’s interest.
‘‘(B) OPTIONS.—Any option or other right
to acquire an interest in property.
‘‘(C) NET LEASE PROPERTY.—In the case
of a lessor, net lease property (within the mean-
ing of subsection (i)(3)).
‘‘(D) CERTAIN PREFERRED STOCK.—Stock
which is fixed and preferred as to dividends and
does not participate in corporate growth to any
significant extent.
‘‘(E) 
STOCK
IN
FOREIGN
CORPORA-
TIONS.—Stock in a foreign corporation.
‘‘(F) STOCK IN S CORPORATIONS.—Stock
in an S corporation.
‘‘(3) EXCEPTION FOR STOCK IN FOREIGN COR-
PORATION WHICH IS REGULARLY TRADED ON NA-
TIONAL
OR
REGIONAL
EXCHANGE.—Paragraph
(2)(E) shall not apply to stock in a foreign corpora-
tion the stock of which is listed on the New York
Stock Exchange, the American Stock Exchange, the
national market system operated by the National As-
sociation of Securities Dealers, or any domestic re-
gional exchange for which quotations are published
on a regular basis other than—
‘‘(A) stock of a foreign investment com-
pany (within the meaning of section 1246(b)),
‘‘(B) stock in a passive foreign investment
company (as defined in section 1296), and
‘‘(C) stock in a foreign corporation held by
a United States person who meets the require-
ments of section 1248(a)(2).
‘‘(4) TREATMENT
OF
AMERICAN
DEPOSITORY
RECEIPTS.—For purposes of this section, an Amer-
ican depository receipt for stock in a foreign cor-
poration shall be treated as stock in such corpora-
tion.
‘‘(c) INDEXED BASIS.—For purposes of this sec-
tion—
‘‘(1) GENERAL RULE.—The indexed basis for
any asset is—
‘‘(A) the adjusted basis of the asset, multi-
plied by
‘‘(B) the applicable inflation ratio.
‘‘(2) APPLICABLE INFLATION RATIO.—The ap-
plicable inflation ratio for any asset is the percent-
age arrived at by dividing—
‘‘(A) the gross domestic product deflator
for the calendar quarter in which the disposi-
tion takes place, by
‘‘(B) the gross domestic product deflator
for the calendar quarter in which the asset was
acquired by the taxpayer (or, if later, the cal-
endar quarter ending on December 31, 1994).
The applicable inflation ratio shall never be less than
1. The applicable inflation ratio for any asset shall
be rounded to the nearest 1⁄1000.
‘‘(3) GROSS DOMESTIC PRODUCT DEFLATOR.—
The gross domestic product deflator for any cal-
endar quarter is the implicit price deflator for the
gross domestic product for such quarter (as shown
in the first revision thereof).
‘‘(d) SHORT SALES.—
‘‘(1) IN GENERAL.—In the case of a short sale
of an indexed asset with a short sale period in excess
of 1 year, for purposes of this title, the amount real-
ized shall be an amount equal to the amount realized
(determined without regard to this paragraph) mul-
tiplied by the applicable inflation ratio. In applying
subsection (c)(2) for purposes of the preceding sen-
tence, the date on which the property is sold short
shall be treated as the date of acquisition and the
closing date for the sale shall be treated as the date
of disposition.
‘‘(2) SHORT
SALE
OF
SUBSTANTIALLY
IDEN-
TICAL PROPERTY.—If the taxpayer or the taxpayer’s
spouse sells short property substantially identical to
an asset held by the taxpayer, the asset held by the
taxpayer and the substantially identical property
shall not be treated as indexed assets for the short
sale period.
‘‘(3) SHORT SALE PERIOD.—For purposes of
this subsection, the short sale period begins on the
day after property is sold and ends on the closing
date for the sale.
‘‘(e) TREATMENT
OF
REGULATED
INVESTMENT
COMPANIES AND REAL ESTATE INVESTMENT TRUSTS.—
‘‘(1) ADJUSTMENTS AT ENTITY LEVEL.—
‘‘(A) IN GENERAL.—Except as otherwise
provided in this paragraph, the adjustment
under subsection (a) shall be allowed to any
qualified investment entity (including for pur-
poses of determining the earnings and profits of
such entity).
‘‘(B) 
EXCEPTION
FOR
QUALIFICATION
PURPOSES.—This section shall not apply for
purposes of sections 851(b) and 856(c).
‘‘(2) ADJUSTMENTS
TO
INTERESTS
HELD
IN
ENTITY.—
‘‘(A) IN GENERAL.—Stock in a qualified
investment entity shall be an indexed asset for
any calendar month in the same ratio as the
fair market value of the assets held by such en-
tity at the close of such month which are in-
dexed assets bears to the fair market value of
all assets of such entity at the close of such
month.
‘‘(B) RATIO OF 90 PERCENT OR MORE.—If
the ratio for any calendar month determined
under subparagraph (A) would (but for this
subparagraph) be 90 percent or more, such
ratio for such month shall be 100 percent.
‘‘(C) RATIO OF 10 PERCENT OR LESS.—If
the ratio for any calendar month determined
under subparagraph (A) would (but for this
subparagraph) be 10 percent or less, such ratio
for such month shall be zero.
‘‘(D) VALUATION OF ASSETS IN CASE OF
REAL ESTATE INVESTMENT TRUSTS.—Nothing
issue regulations or rules producing direct costs to
the private sector; and
‘‘(2) changes in laws necessary to achieve re-
ductions in the level of personnel and administrative
overhead and to achieve programmatic savings for
the budget year and the outyears for those agencies
of the following:
‘‘(A) In the first outyear, one-fourth of the
percent of reduction in regulatory authority
from the aggregate regulatory base.
‘‘(B) In the second outyear, one-third of
the percent of reduction in regulatory authority
from the aggregate regulatory base.
‘‘(C) In the third, fourth, fifth, and sixth
years following the budget year, one-half of the
percent of reduction in regulatory authority
from the aggregate regulatory base.
Section 310(c) shall not apply with respect to directions
made under this section.
‘‘(b) ALLOCATION OF TOTALS.—(1) The Committees
on the Budget of the House of Representatives and the
Senate shall each allocate aggregate 2-year regulatory au-
thority among each committee of its House and by major
functional category for the first budget year beginning
after the date of enactment of this section and for the
117
the acceptance or the date of the issuance of the decision,
respectively.
(g) NATURE OF REMEDY.—
(1) PROHIBITION
OF
LIMITATION
ON
OTHER
CLAIMS.—No provision of this title shall be con-
strued to limit the rights of any person to pursue
any claim or cause of action under the Constitution
or any other law (including a claim or cause of ac-
tion concerning personal property).
(2) PROHIBITION
OF
USE
AS
CONDITION
PRECEDENT.—Submission of a request for com-
pensation, or receipt of compensation, under this
title shall not be a condition precedent for any claim
or cause of action under any law.
(h) LIMITATION ON DOUBLE RECOVERY.—
(1) COURT
AWARDS
OF
DAMAGES.—Notwith-
standing subsection (g), a court may credit a pay-
ment made pursuant to subsection (a) for any reduc-
tion in the value of property against the amount of
damages awarded pursuant to any claim or cause of
action, under the Constitution or any other law, that
arises from the same reduction in the value of the
same property.
(2) PAYMENTS
UNDER
THIS
TITLE.—The
amount awarded pursuant to any claim or cause of