(ii) by striking the period at the end
of paragraph (12) and inserting ‘‘, plus’’,
and
(iii) by adding at the end the fol-
lowing new paragraph:
‘‘(13) in the case of a corporation, the special-
ized training center credit determined under section
1400I(a).’’
(B) Subsection (d) of section 39 of such
Code (relating to carryback and carryforward of
unused credits) is amended by adding at the
end the following new paragraph:
‘‘(9) NO CARRYBACK OF SECTION 1400I CREDIT
BEFORE JANUARY 1, 2000.—No portion of the un-
used business credit for any taxable year which is
attributable to the credit determined under section
1400I may be carried back to a taxable year begin-
ning before January 1, 2000.’’.
(d) OTHER CONFORMING AMENDMENTS.—
(1) Subchapter U of chapter 1 of such Code is
amended by striking part IV, by redesignating part
V as part IV, and by redesignating section 1397F
as section 1397E.
(2) The table of subchapters for chapter 1 of
such Code is amended by adding at the end the fol-
lowing new item:
‘‘Subchapter X. Public school modernization provisions.’’
(3) The table of parts of subchapter U of chap-
ter 1 of such Code is amended by striking the last
2 items and inserting the following item:
‘‘Part IV. Regulations.’’
(e) EFFECTIVE DATES.—
(1) IN
GENERAL.—Except as otherwise pro-
vided in this subsection, the amendments made by
this section shall apply to obligations issued after
December 31, 1999.
(2) CREDIT FOR CORPORATE CONTRIBUTIONS
TO
SPECIALIZED
TRAINING
CENTERS.—Section
1400I of the Internal Revenue Code of 1986 (as
added by this section) shall apply to taxable years
beginning after December 31, 1999.
(3) REPEAL OF RESTRICTION ON ZONE ACAD-
EMY
BOND
HOLDERS.—In the case of bonds to
which section 1397E of the Internal Revenue Code
of 1986 (as in effect before the date of the enact-
ment of this Act) applies, the limitation of such sec-
tion to eligible taxpayers (as defined in subsection
(d)(6) of such section) shall not apply after the date
of the enactment of this Act.
(f) APPLICATION OF CERTAIN LABOR STANDARDS
ON CONSTRUCTION PROJECTS FINANCED UNDER PUBLIC
SCHOOL MODERNIZATION PROGRAM.—Section 439 of the
General Education Provisions Act (relating to labor stand-
ards) is amended—
(1) by inserting ‘‘(a)’’ before ‘‘All laborers and
mechanics’’, and
(2) by adding at the end the following:
‘‘(b)(1) For purposes of this section, the term ‘appli-
cable program’ also includes the qualified zone academy
bond provisions enacted by section 226 of the Taxpayer
Relief Act of 1997 and the program established by section
2 of the Public School Modernization Act of 1999.
‘‘(2) A State or local government participating in a
program described in paragraph (1) shall—
‘‘(A) in the awarding of contracts, give priority
to contractors with substantial numbers of employ-
ees residing in the local education area to be served
by the school being constructed; and
‘‘(B) include in the construction contract for
such school a requirement that the contractor give
priority in hiring new workers to individuals residing
in such local education area.
‘‘(3) In the case of a program described in paragraph
(1), nothing in this subsection or subsection (a) shall be
construed to deny any tax credit allowed under such pro-
gram. If amounts are required to be withheld from con-
tractors to pay wages to which workers are entitled, such
amounts shall be treated as expended for construction pur-
poses in determining whether the requirements of such
program are met.’’.
(g) EMPLOYMENT AND TRAINING ACTIVITIES RE-
LATING
TO CONSTRUCTION
OR RECONSTRUCTION
OF
PUBLIC SCHOOL FACILITIES.—
(1) IN GENERAL.—Section 134 of the Work-
force Investment Act of 1998 (29 U.S.C. 2864) is
amended by adding at the end the following:
‘‘(f) LOCAL EMPLOYMENT AND TRAINING ACTIVI-
TIES RELATING TO CONSTRUCTION OR RECONSTRUCTION
OF PUBLIC SCHOOL FACILITIES.—
‘‘(1) IN GENERAL.—In order to provide training
services related to construction or reconstruction of
public school facilities receiving funding assistance
under an applicable program, each State shall estab-
lish a specialized program of training meeting the
following requirements:
‘‘(A) The specialized program provides
training for jobs in the construction industry.
‘‘(B) The program is designed to provide
trained workers for projects for the construction
or reconstruction of public school facilities re-
ceiving funding assistance under an applicable
program.
‘‘(C) The program is designed to ensure
that skilled workers (residing in the area to be
served by the school facilities) will be available
for the construction or reconstruction work.
‘‘(2) COORDINATION.—The specialized program
established under paragraph (1) shall be integrated
with other activities under this Act, with the activi-
ties carried out under the National Apprenticeship
Act of 1937 by the State Apprenticeship Council or
through the Bureau of Apprenticeship and Training
in the Department of Labor, as appropriate, and
with activities carried out under the Carl D. Perkins
Vocational and Technical Education Act of 1998.
Nothing in this subsection shall be construed to re-
quire services duplicative of those referred to in the
preceding sentence.
‘‘(3) APPLICABLE
PROGRAM.—In this sub-
section, the term ‘applicable program’ has the mean-
ing given the term in section 439(b) of the General
Education Provisions Act (relating to labor stand-
ards).’’.
(2) STATE PLAN.—Section 112(b)(17)(A) of
the Workforce Investment Act of 1998 (29 U.S.C.
2822(b)(17)(A)) is amended—
(A) in clause (iii), by striking ‘‘and’’ at the
end;
(B) by redesignating clause (iv) as clause
(v); and
(C) by inserting after clause (iii) the fol-
lowing:
‘‘(iv) how the State will establish and carry
out a specialized program of training under sec-
tion 134(f); and’’.
TITLE III—EMPLOYMENT
SEC. 301. EXTENSION OF WORK OPPORTUNITY CREDIT AND
WELFARE-TO-WORK CREDIT.
(a) WORK OPPORTUNITY CREDIT.—Subparagraph
(B) of section 51(c)(4) of the Internal Revenue Code of
1986 (relating to termination) is amended by striking
‘‘June 30, 1999’’ and inserting ‘‘June 30, 2004’’.
(b) WELFARE-TO-WORK CREDIT.—Subparagraph (f)
of section 51A of such Code (relating to temporary incen-
tives for employing long-term family assistance recipients)
is amended by striking ‘‘June 30, 1999’’ and inserting
‘‘June 30, 2004’’.
TITLE IV—ENERGY
SEC. 401. CREDIT FOR CERTAIN ENERGY-EFFICIENT PROP-
ERTY USED IN BUSINESS.
(a) IN GENERAL.—Subpart E of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after section 48 the fol-
lowing new section:
‘‘SEC. 48A. ENERGY CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
energy credit for any taxable year is the sum of—
‘‘(1) the amount equal to the energy percentage
of the basis of each energy property placed in service
during such taxable year, and
‘‘(2) the credit amount for each qualified hybrid
vehicle placed in service during the taxable year.
‘‘(b) ENERGY PERCENTAGE.—
‘‘(1) IN
GENERAL.—The energy percentage
shall be determined in accordance with the following
table:
‘‘Column A—Description
Column B—Energy
Percentage
Column C—Period
In the case of:
The energy percent-
age is:
For the period:
Beginning on:
Ending on:
Solar energy property (other than elected solar
hot water property and photovoltaic property)
and geothermal energy property .....................
10 percent
1/1/2000
no end date
Elected solar hot water property .........................
15 percent
1/1/2000
12/31/2004
Photovoltaic property ..........................................
15 percent
1/1/2000
12/31/2006
20 percent energy-efficient building property .....
20 percent
1/1/2000
12/31/2003
10 percent energy-efficient building property .....
10 percent
1/1/2000
12/31/2001
Combined heat and power system property ........
8 percent
1/1/2000
12/31/2002.
‘‘(2) PERIODS FOR WHICH PERCENTAGE NOT
SPECIFIED.—In the case of any energy property, the
energy percentage shall be zero for any period for
which an energy percentage is not specified for such
property under paragraph (1).
‘‘(3) COORDINATION WITH REHABILITATION.—
The energy percentage shall not apply to that por-
tion of the basis of any property which is attrib-
utable to qualified rehabilitation expenditures.
‘‘(4) TRANSITIONAL RULES.—Rules similar to
the rules of section 48(m) (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990) shall apply for purposes
of this subsection.
‘‘(c) MAXIMUM CREDIT FOR CERTAIN PROPERTY.—
In the case of property described in the following table,
the amount of the current year business credit under sub-
section (a) for the taxable year for each item of such prop-
erty with respect to a building shall not exceed the amount
specified for such property in such table:
Description of property:
Maximum allowable
credit amount is:
Elected solar hot water property .....................................
$1,000.
Photovoltaic property with respect to which the energy
percentage is greater than 10 percent.
$2,000.
20 percent energy-efficient building property:
fuel cell described in subsection (e)(3)(A) ...............
$500 per each
kw/hr of capacity.
natural gas heat pump described in subsection
(e)(3)(D).
$1,000.
Description of property:
Maximum allowable
credit amount is:
20 percent energy-efficient building property (other than
a fuel cell and a natural gas heat pump)
$500.
10 percent energy-efficient building property ..................
$250.
‘‘(d) ENERGY PROPERTY DEFINED.—
‘‘(1) IN GENERAL.—For purposes of this sub-
part, the term ‘energy property’ means any
property—
‘‘(A) which is—
‘‘(i) solar energy property,
‘‘(ii) geothermal energy property,
‘‘(iii) 
percent 
energy-efficient
building property,
‘‘(iv) 10 percent energy-efficient build-
ing property, or
‘‘(v) combined heat and power system
property,
‘‘(B)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer,
or
‘‘(ii) which is acquired by the taxpayer if
the original use of such property commences
with the taxpayer,
‘‘(C) with respect to which depreciation (or
amortization in lieu of depreciation) is allow-
able, and
‘‘(D) which meets the performance and
quality standards (if any), and the certification
requirements (if any), which—
‘‘(i) have been prescribed by the Sec-
retary by regulations (after consultation
with the Secretary of Energy or the Ad-
ministrator of the Environmental Protec-
tion Agency, as appropriate), and
‘‘(ii) are in effect at the time of the
acquisition of the property.
‘‘(2) EXCEPTION.—Such term shall not include
any property which is public utility property (as de-
fined in section 46(f)(5) as in effect on the day be-
fore the date of the enactment of the Revenue Rec-
onciliation Act of 1990). The preceding sentence
shall not apply to combined heat and power system
property.
‘‘(e) DEFINITIONS RELATING TO TYPES OF ENERGY
PROPERTY.—For purposes of this section—
‘‘(1) SOLAR ENERGY PROPERTY.—
‘‘(A) IN GENERAL.—The term ‘solar en-
ergy property’ means equipment which uses
solar energy—
‘‘(i) to generate electricity,
‘‘(ii) to heat or cool (or provide hot
water for use in) a structure, or
‘‘(iii) to provide solar process heat.
‘‘(B) ELECTED
SOLAR
WATER
HEATING
PROPERTY.—
‘‘(i) IN GENERAL.—The term ‘elected
solar water heating property’ means prop-
erty which is solar energy property by rea-
son of subparagraph (A)(ii) and for which
an election under this subparagraph is in
effect.
‘‘(ii) ELECTION.—For purposes of
clause (i) and the energy percentage speci-
fied in the table in subsection (b)(1), a tax-
payer may elect to treat property described
in clause (i) as elected solar water heating
property.
‘‘(C) 
PHOTOVOLTAIC
PROPERTY.—The
term ‘photovoltaic property’ means solar energy
property which uses a solar photovoltaic process
to generate electricity.
‘‘(D) SWIMMING
POOLS, ETC., USED
AS
STORAGE
MEDIUM.—The term ‘solar energy
property’ shall not include a swimming pool,
hot tub, or any other energy storage medium
which has a function other than the function of
such storage.
‘‘(E) SOLAR PANELS.—No solar panel or
other property installed as a roof (or portion
thereof) shall fail to be treated as solar energy
property solely because it constitutes a struc-
tural component of the structure on which it is
installed.
‘‘(2) GEOTHERMAL
ENERGY
PROPERTY.—The
term ‘geothermal energy property’ means equipment
used to produce, distribute, or use energy derived
from a geothermal deposit (within the meaning of
section 613(e)(2)), but only, in the case of electricity
generated by geothermal power, up to (but not in-
cluding) the electrical transmission stage.
‘‘(3) 20 PERCENT ENERGY-EFFICIENT BUILD-
ING PROPERTY.—The term ‘20 percent energy-effi-
cient building property’ means—
‘‘(A) a fuel cell that—
‘‘(i) generates electricity and heat
using an electrochemical process,
‘‘(ii) has an electricity-only generation
efficiency greater than 35 percent, and
‘‘(iii) has a minimum generating ca-
pacity of 5 kilowatts,
‘‘(B) an electric heat pump hot water heat-
er that yields an energy factor of 1.7 or greater,
‘‘(C) an electric heat pump that has a
heating system performance factor (HSPF) of
9 or greater and a cooling seasonal energy effi-
ciency ratio (SEER) of 15 or greater,
‘‘(D) a natural gas heat pump that has a
coefficient of performance of not less than 1.25
for heating and not less than 0.70 for cooling,
‘‘(E) a central air conditioner that has a
cooling seasonal energy efficiency ratio (SEER)
of 15 or greater, and
‘‘(F) an advanced natural gas water heater
that has an energy factor of at least 0.80.
‘‘(4) 10 PERCENT ENERGY-EFFICIENT BUILD-
ING PROPERTY.—The term ‘10 percent energy-effi-
cient building property’ means—
‘‘(A) an electric heat pump that has a
heating system performance factor (HSPF) of
7.5 or greater and a cooling seasonal energy ef-
ficiency ratio (SEER) of 13.5 or greater,
‘‘(B) a central air conditioner that has a
cooling seasonal energy efficiency ratio (SEER)
of 13.5 or greater, and
‘‘(C) an advanced natural gas water heater
that has an energy factor of at least 0.65.
‘‘(5) COMBINED
HEAT
AND
POWER
SYSTEM
PROPERTY.—
‘‘(A) IN GENERAL.—The term ‘combined
heat and power system property’ means prop-
erty comprising a system—
‘‘(i) which uses the same energy
source for the simultaneous or sequential
generation of electrical power, mechanical
shaft power, or both, in combination with
the generation of steam or other forms of
useful thermal energy (including heating
and cooling applications),
‘‘(ii) which has an electrical capacity
of more than 50 kilowatts or a mechanical
energy capacity of more than 67 horse-
power or an equivalent combination of elec-
trical and mechanical energy capacities,
‘‘(iii) which produces—
‘‘(I) at least 20 percent of its
total useful energy in the form of
thermal energy, and
‘‘(II) at least 20 percent of its
total useful energy in the form of elec-
trical or mechanical power (or a com-
bination thereof), and
‘‘(iv) the energy efficiency percentage
of which exceeds 60 percent (70 percent in
the case of a system with an electrical ca-
pacity in excess of 50 megawatts or a me-
chanical energy capacity in excess of
67,000 horsepower, or an equivalent com-
bination of electrical and mechanical en-
ergy capacities).
‘‘(B) SPECIAL RULES.—
‘‘(i) ENERGY
EFFICIENCY
PERCENT-
AGE.—For 
purposes 
of 
subparagraph
(A)(iv), the energy efficiency percentage of
a system is the fraction—
‘‘(I) the numerator of which is
the total useful electrical, thermal,
and mechanical power produced by
the system at normal operating rates,
and
‘‘(II) the denominator of which is
the lower heating value of the primary
fuel source for the system.
‘‘(ii) DETERMINATIONS MADE ON BTU
BASIS.—The energy efficiency percentage
and the percentages under subparagraph
(A)(iii) shall be determined on a Btu basis.
‘‘(iii) INPUT AND OUTPUT PROPERTY
NOT INCLUDED.—The term ‘combined heat
and power system property’ does not in-
clude property used to transport the en-
ergy source to the facility or to distribute
energy produced by the facility.
‘‘(iv) ACCOUNTING RULE FOR PUBLIC
UTILITY
PROPERTY.—In the case that
combined heat and power system property
is public utility property (as defined in sec-
tion 46(f)(5) as in effect on the day before
the date of the enactment of the Revenue
Reconciliation Act of 1990), the taxpayer
may only claim the credit under subsection
(a)(1) if, with respect to such property, the
taxpayer uses a normalization method of
accounting.
‘‘(v) DEPRECIATION.—No credit shall
be allowed for any combined heat and
power system property unless the taxpayer
elects to treat such property for purposes
of section 168 as having a class life of not
less than 22 years.
‘‘(f) QUALIFIED HYBRID VEHICLES.—For purposes
of subsection (a)(2)—
‘‘(1) CREDIT AMOUNT.—
‘‘(A) IN GENERAL.—The credit amount for
each qualified hybrid vehicle with a recharge-
able energy storage system that provides the
applicable percentage of the maximum available
power shall be the amount specified in the fol-
lowing table:
‘‘Applicable percentage
Credit amount is:
Greater than or equal to—
Less than—
5 percent .........................
10 percent
$ 500
10 percent .......................
20 percent
$1,000
20 percent .......................
30 percent
$1,500
30 percent .......................
$2,000
‘‘(B) INCREASE IN CREDIT AMOUNT FOR
REGENERATIVE BRAKING SYSTEM.—In the case
of a qualified hybrid vehicle that actively em-
ploys a regenerative braking system which sup-
plies to the rechargeable energy storage system
the applicable percentage of the energy avail-
able from braking in a typical 60 miles per
hour to 0 miles per hour braking event, the
credit amount determined under subparagraph
(A) shall be increased by the amount specified
in the following table:
‘‘Applicable percentage
Credit amount
increase is:
Greater than or equal to—
Less than—
20 percent .......................
40 percent
$ 250
40 percent .......................
60 percent
$ 500
60 percent .......................
$1,000
‘‘(2) QUALIFIED HYBRID VEHICLE.—The term
‘qualified hybrid vehicle means an automobile that
meets all applicable regulatory requirements and
that can draw propulsion energy from both of the
following on-board sources of stored energy:
‘‘(A) A consumable fuel.
‘‘(B) A rechargeable energy storage sys-
tem.
‘‘(3) MAXIMUM AVAILABLE POWER.—The term
‘maximum available power’ means the maximum
value of the sum of the heat engine and electric
drive system power or other non-heat energy conver-
sion devices available for a driver’s command for
maximum acceleration at vehicle speeds under 75
miles per hour.
‘‘(4) AUTOMOBILE.—The term ‘automobile’ has
the meaning given such term by section 4064(b)(1)
(without regard to subparagraphs (B) and (C) there-
of). A vehicle shall not fail to be treated as an auto-
mobile solely by reason of weight if such vehicle is
rated at 8,500 pounds gross vehicle weight rating or
less.
‘‘(5) DOUBLE BENEFIT; PROPERTY USED OUT-
SIDE UNITED STATES, ETC., NOT QUALIFIED.—No
credit shall be allowed under subsection (a)(2) with
respect to—
‘‘(A) any property for which a credit is al-
lowed under section 25C or 30,
‘‘(B) any property referred to in section
50(b), and
‘‘(C) the portion of the cost of any prop-
erty taken into account under section 179 or
179A.
‘‘(6) REGULATIONS.—
‘‘(A) TREASURY.—The Secretary shall pre-
scribe such regulations as may be necessary or
appropriate to carry out the purposes of this
subsection.
‘‘(B) 
ENVIRONMENTAL
PROTECTION
AGENCY.—
‘‘(A) TREASURY.—The Administrator of
the Environmental Protection Agency shall pre-
scribe such regulations as may be necessary or
appropriate to specify the testing and calcula-
tion procedures that would be used to deter-
mine whether a vehicle meets the qualifications
for a credit under this subsection.
‘‘(7) TERMINATION.—Paragraph (2) shall not
apply with respect to any vehicle placed in service
during a calendar year ending before January 1,
2003, or after December 31, 2006.
‘‘(g) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) SPECIAL RULE FOR PROPERTY FINANCED
BY SUBSIDIZED ENERGY FINANCING OR INDUSTRIAL
DEVELOPMENT BONDS.—
‘‘(A) REDUCTION OF BASIS.—For purposes
of applying the energy percentage to any prop-
erty, if such property is financed in whole or in
part by—
‘‘(i) subsidized energy financing, or
‘‘(ii) the proceeds of a private activity
bond (within the meaning of section 141)
the interest on which is exempt from tax
under section 103,
the amount taken into account as the basis of
such property shall not exceed the amount
which (but for this subparagraph) would be so
taken into account multiplied by the fraction
determined under subparagraph (B).
‘‘(B) DETERMINATION OF FRACTION.—For
purposes of subparagraph (A), the fraction de-
termined under this subparagraph is 1 reduced
by a fraction—
‘‘(i) the numerator of which is that
portion of the basis of the property which
is allocable to such financing or proceeds,
and
‘‘(ii) the denominator of which is the
basis of the property.
‘‘(C) SUBSIDIZED
ENERGY
FINANCING.—
For purposes of subparagraph (A), the term
‘subsidized energy financing’ means financing
provided under a Federal, State, or local pro-
gram a principal purpose of which is to provide
subsidized financing for projects designed to
conserve or produce energy.
‘‘(2) BUSINESS USE.—The rule similar to the
rule of section 25(B)(d)(5)(B) shall apply for pur-
poses of determining the business use of a vehicle.
‘‘(3) CERTAIN PROGRESS EXPENDITURE RULES
MADE APPLICABLE.—Rules similar to the rules of
subsections (c)(4) and (d) of section 46 (as in effect
on the day before the date of the enactment of the
Revenue Reconciliation Act of 1990) shall apply for
purposes of this section.
‘‘(4) 
DOUBLE
BENEFIT.—Property 
which
would, but for this paragraph, be eligible for credit
under more than one provision of this section shall
be eligible only under one such provision, the provi-
sion specified by the taxpayer.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 48 of such Code is amended to read
as follows:
‘‘SEC. 48. REFORESTATION CREDIT.
‘‘(a) IN GENERAL.—For purposes of section 46, the
reforestation credit for any taxable year is 10 percent of
the portion of the amortizable basis of any qualified timber
property which was acquired during such taxable year and
which is taken into account under section 194 (after the
application of section 194(b)(1)).
‘‘(b) DEFINITIONS.—For purposes of this subpart,
the terms ‘amortizable basis’ and ‘qualified timber prop-
erty’ have the respective meanings given to such terms by
section 194.’’.
(2) Subsection (d) of section 39 of such Code
is amended by adding at the end the following new
paragraph:
‘‘(10) NO CARRYBACK OF ENERGY CREDIT BE-
FORE EFFECTIVE DATE.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the energy credit determined under section
48A may be carried back to a taxable year ending
before the date of the enactment of section 48A.’’.
(3) Paragraph (3) of section 50(c) of such Code
is amended by adding at the end the following flush
sentence:
‘‘In the case of the energy credit, the preceding sen-
tence shall apply only to so much of such credit as
relates to solar energy property and geothermal
property (as such terms are defined in section
48A(e)).’’.
(4) Subclause (III) of section 29(b)(3)(A)(i) of
such 
Code 
is 
amended 
by 
striking 
‘‘section
48(a)(4)(C)’’ and inserting ‘‘section 48A(g)(1)(C)’’.
(5) Subparagraph (E) of section 50(a)(2) of
such Code is amended by striking ‘‘section 48(a)(5)’’
and inserting ‘‘section 48A(g)(3)’’.
(6) Subparagraph (B) of section 168(e)(3) of
such Code is amended—
(A) in clause (vi)(I)—
(i) by striking ‘‘section 48(a)(3)’’ and
inserting ‘‘paragraphs (1) and (2) of sec-
tion 48A(e)’’, and
(ii) by striking ‘‘clause (i)’’ and in-
serting ‘‘paragraph (1)(A)’’, and
(B) in the last sentence by striking ‘‘sec-
tion 
48(a)(3)’’ 
and 
inserting 
‘‘section
48A(d)(2)’’.
(7) Subparagraph (E) of section 168(e)(3) of
such Code is amended by striking ‘‘and’’ at the end
of clause (ii), by striking the period at the end of
clause (iii) and inserting ‘‘, and’’, and by inserting
after clause (iii) the following new clause:
‘‘(iv) any combined heat and power
system property (as defined in section
48A(e)(5)) for which a credit is allowed
under section 48A and which, but for this
clause, would have a recovery period of less
than 15 years.’’.
(8) The table contained in subparagraph (B) of
section 168(g)(3) of such Code is amended by add-
ing at the end the following:
‘‘(E)(iv) ......................................................................................
22’’.
(c) CLERICAL AMENDMENT.—The table of sections
for subpart E of part IV of subchapter A of chapter 1
of such Code is amended by striking the item relating to
section 48 and inserting the following new items:
‘‘Sec. 48. Reforestation credit.
‘‘Sec. 48A. Energy credit.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to periods after December 31,
1999, under rules similar to the rules of section 48(m)
of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of the Revenue Rec-
onciliation Act of 1990).
SEC. 402. EXTENSION OF CREDIT FOR QUALIFIED ELEC-
TRIC VEHICLES.
(a) EXTENSION OF CREDIT FOR QUALIFIED ELEC-
TRIC VEHICLES.—Subsection (f) of section 30 of the In-
ternal Revenue Code of 1986 (relating to termination) is
amended by striking ‘‘December 31, 2004’’ and inserting
‘‘December 31, 2006’’.
(b) REPEAL OF PHASEOUT.—Subsection (b) of sec-
tion 30 of such Code (relating to limitations) is amended
by striking paragraph (2) and redesignating paragraph
(3) as paragraph (2).
(c) NO DOUBLE BENEFIT.—
(1) Subsection (d) of section 30 of such Code
(relating to special rules) is amended by adding at
the end the following new paragraph:
‘‘(5) No credit shall be allowed under sub-
section (a) with respect to any vehicle if the tax-
payer claims a credit for such vehicle under section
25C(a)(1)(B) or 48A(f).’’.
(2) Paragraph (3) of section 30(d) of such Code
(relating to property used outside United States,
etc., not qualified) is amended by striking ‘‘section
50(b)’’ and inserting ‘‘section 25C, 48A, or 50(b)’’.
(3) Paragraph (5) of section 179A(e) of such
Code (relating to property used outside United
States, etc., not qualified) is amended by striking
‘‘section 50(b)’’ and inserting ‘‘section 25C, 48A, or
50(b)’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to property placed in service after
the date of the enactment of this Act.
SEC. 403. MODIFICATIONS TO CREDIT FOR ELECTRICITY
PRODUCED FROM CERTAIN RENEWABLE RE-
SOURCES.
(a) EXTENSION.—Paragraph (3) of section 45(c) of
the Internal Revenue Code of 1986 (relating to qualified
facility) is amended by striking ‘‘July 1, 1999’’ and insert-
ing ‘‘July 1, 2004’’.
(b) QUALIFIED FACILITIES INCLUDE ALL BIOMASS
FACILITIES.—
(1) IN
GENERAL.—Paragraph (1) of section
45(c) of such Code (relating to definition of qualified
energy resources) is amended by striking ‘‘and’’ at
the end of subparagraph (A), by striking the period
at the end of subparagraph (B), and by inserting
after subparagraph (B) the following:
‘‘(C) biomass (other than closed-loop bio-
mass).’’.
(2) BIOMASS DEFINED.—Paragraph (2) of sec-
tion 45(c) of such Code is amended to read as fol-
lows:
‘‘(2) BIOMASS.—
‘‘(A) IN
GENERAL.—The term ‘biomass’
means—
‘‘(i) closed-loop biomass, and
‘‘(ii) any solid, nonhazardous, cel-
lulosic waste material, which is segregated
from other waste materials, and which is
derived from—
‘‘(I) any of the following forest-
related 
resources: 
mill 
residues,
precommercial thinnings, slash, and
brush, but not including old-growth
timber,
‘‘(II) waste pallets, crates, and
dunnage, and landscape or right-of-
way tree trimmings, but not including
unsegregated municipal solid waste
(garbage) and post-consumer waste-
paper, or
‘‘(III) agriculture sources, includ-
ing orchard tree crops, vineyard,
grain, legumes, sugar, and other crop
by-products or residues.
‘‘(B) CLOSED-LOOP
BIOMASS.—The term
‘closed-loop biomass’ means any organic mate-
rial from a plant which is planted exclusively
for purposes of being used at a qualified facility
to produce electricity.’’.
(c) ELECTRICITY PRODUCED FROM BIOMASS CO-
FIRED IN COAL PLANTS.—
(1) CREDIT AMOUNT.—Paragraph (1) of section
45(a) of such Code (relating to general rule) is
amended by inserting ‘‘(1.0 cents in the case of elec-
tricity produced from biomass co-fired in a facility
which produces electricity from coal) after ‘‘1.5
cents’’.
(2) QUALIFIED
FACILITY.—Paragraph (3) of
section 45(c) of such Code (relating to definitions)
is amended by striking the period at the end and in-
serting the following: ‘‘, and any facility using bio-
mass other than closed loop biomass to produce elec-
tricity which is owned by the taxpayer and which is
originally placed in service after June 30, 1999.’’.
(3) ADJUSTMENT FOR INFLATION.—
(A) IN GENERAL.—Paragraph (2) of sec-
tion 45(b) of such Code (relating to credit and
phaseout adjustment based on inflation) is
amended by striking ‘‘1.5 cent amount’’ and in-
serting ‘‘1.5 and 1.0 cent amounts’’.
(B) BASE YEAR FOR INFLATION ADJUST-
MENT FACTOR.—Subparagraph (B) of section
45(d)(2) of such Code (relating to inflation ad-
justment factor) is amended by adding at the
end the following new sentence: ‘‘In the case of
the 1.0 cents amount in subsection (a), the first
sentence of this subparagraph shall be applied
by substituting ‘1999’ for ‘1992’.’’.
(d) CREDIT NOT TO APPLY TO ELECTRICITY SOLD
TO UTILITIES UNDER CERTAIN CONTRACTS.—Subsection
(b) of section 45 of such Code (relating to limitations and
adjustments) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(4) CREDIT NOT TO APPLY TO ELECTRICITY
SOLD TO UTILITIES UNDER CERTAIN CONTRACTS.—
‘‘(A) IN GENERAL.—The credit determined
under subsection (a) shall not apply to
electricity—
‘‘(i) produced at a qualified facility
placed in service by the taxpayer after
June 30, 1999, and
‘‘(ii) sold to a utility pursuant to a
contract originally entered into before Jan-
uary 1, 1987 (whether or not amended or
restated after that date).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply if—
‘‘(i) the prices for energy and capacity
from such facility are established pursuant
to an amendment to the contract referred
to in subparagraph (A)(ii),
‘‘(ii) such amendment provides that
the prices set forth in the contract which
exceed avoided cost prices determined at
the time of delivery shall apply only to an-
nual quantities of electricity (prorated for
partial years) which do not exceed the
greater of—
‘‘(I) the average annual quantity
of electricity sold to the utility under
the contract during calendar years
1994, 1995, 1996, 1997, and 1998,
or
‘‘(II) the estimate of the annual
electricity production set forth in the
contract, or, if there is no such esti-
mate, the greatest annual quantity of
electricity sold to the utility under the
contract in any of the calendar years
1996, 1997, or 1998, and
‘‘(iii) such amendment provides that
energy and capacity in excess of the limita-
tion in clause (ii) may be—
‘‘(I) sold to the utility only at
prices that do not exceed avoided cost
prices determined at the time of deliv-
ery, or
‘‘(II) sold to a third party subject
to a mutually agreed upon advance
notice to the utility.
For purposes of this subparagraph, avoided cost
prices shall be determined as provided for in
section 292.304(d)(1) of title 18, Code of Fed-
eral Regulations, or any successor regulation.’’.
(e) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as provided by para-
graph (2), the amendments made by this section
shall apply to taxable years ending after June 30,
1999.
(2) 
ADJUSTMENT
FOR
INFLATION.—The
amendments made by subsection (c)(3) shall apply
to taxable years ending after December 31, 1999.
SEC. 404. CREDIT FOR CERTAIN NONBUSINESS ENERGY
PROPERTY.
(a) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to nonrefundable personal credits) is
amended by inserting after section 25A the following new
section:
‘‘SEC. 25C. NONBUSINESS ENERGY PROPERTY.
‘‘(a) ALLOWANCE OF CREDIT.—
‘‘(1) IN
GENERAL.—In the case of an indi-
vidual, there shall be allowed as a credit against the
tax imposed by this chapter for the taxable year an
amount equal to the sum of—
‘‘(A) the applicable percentage of residen-
tial energy property expenditures made by the
taxpayer during such year,
‘‘(B) the credit amount (determined under
section 48A(f)) for each vehicle purchased dur-
ing the taxable year which is a qualified hybrid
vehicle (as defined in section 48A(f)(2)), and
‘‘(C) the credit amount specified in the fol-
lowing table for a new, highly energy-efficient
principal residence:
‘‘New, 
Highly 
Energy-Effi-
cient 
Principal 
Resi-
dence:
Credit Amount:
30 percent property .......................
$1,000.
40 percent property .......................
$1,500.
50 percent property .......................
$2,000.
‘‘(2) APPLICABLE PERCENTAGE.—
‘‘(A) IN
GENERAL.—The applicable per-
centage shall be determined in accordance with
the following table:
‘‘Column A—Description
Column B— Appli-
cable Percentage
Column C—Period
In the case of:
The applicable per-
centage is:
For the period:
Beginning on:
Ending on:
20 percent energy-efficient building property .....
20 percent
1/1/2000
12/31/2003
10 percent energy-efficient building property .....
10 percent
1/1/2000
12/31/2001
Solar water heating property ..............................
15 percent
1/1/2000
12/31/2006
Photovoltaic property ..........................................
15 percent
1/1/2000
12/31/2006.
‘‘(B) PERIODS
FOR
WHICH
PERCENTAGE
NOT SPECIFIED.—In the case of any residential
energy property, the applicable percentage shall
be zero for any period for which an applicable
percentage is not specified for such property
under subparagraph (A).
‘‘(b) MAXIMUM CREDIT.—
‘‘(1) IN GENERAL.—In the case of property de-
scribed in the following table, the amount of the
credit allowed under subsection (a)(1)(A) for the
taxable year for each item of such property with re-
spect to a dwelling unit shall not exceed the amount
specified for such property in such table:
‘‘Description of property item:
Maximum allowable
credit amount is:
20 percent energy-efficient building property (other than
a fuel cell or natural gas heat pump).
$500.
20 percent energy-efficient building property:
fuel cell described in section 48A(e)(3)(A) ..............
$500 per each
kw/hr of capacity.
natural gas heat pump described in section
48A(e)(3)(D).
$1,000.
10 percent energy-efficient building property ..................
$250.
Solar water heating property ...........................................
$1,000.
Photovoltaic property .......................................................
$2,000.
‘‘(2) COORDINATION
OF
LIMITATIONS.—If a
credit is allowed to the taxpayer for any taxable year
by reason of an acquisition of a new, highly energy-
efficient principal residence, no other credit shall be
allowed under subsection (a)(1)(A) with respect to
such residence during the 1-taxable year period be-
ginning with such taxable year.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) RESIDENTIAL ENERGY PROPERTY EX-
PENDITURES.—The term ‘residential energy prop-
erty expenditures’ means expenditures made by the
taxpayer for qualified energy property installed on or
in connection with a dwelling unit which—
‘‘(A) is located in the United States, and
‘‘(B) is used by the taxpayer as a resi-
dence.
Such term includes expenditures for labor costs
properly allocable to the onsite preparation, assem-
bly, or original installation of the property.
‘‘(2) QUALIFIED ENERGY PROPERTY.—
‘‘(A) IN
GENERAL.—The term ‘qualified
energy property’ means—
‘‘(i) energy-efficient building property,
‘‘(ii) solar water heating property, and
‘‘(iii) photovoltaic property.
‘‘(B) SWIMMING
POOL, ETC., USED
AS
STORAGE MEDIUM; SOLAR PANELS.—For pur-
poses of this paragraph, the provisions of sub-
paragraphs (D) and (E) section 48A(e)(1) shall
apply.
‘‘(3) 
ENERGY-EFFICIENT
BUILDING
PROP-
ERTY.—The term ‘energy-efficient building property’
has the meaning given to such term by paragraphs
(3) and (4) of section 48A(e).
‘‘(4) SOLAR WATER HEATING PROPERTY.—The
term ‘solar water heating property’ means property
which, when installed in connection with a structure,
uses solar energy for the purpose of providing hot
water for use within such structure.
‘‘(5) PHOTOVOLTAIC
PROPERTY.—The term
‘photovoltaic property’ has the meaning given to
such term by section 48A(e)(1)(C).
‘‘(6) NEW, HIGHLY ENERGY-EFFICIENT PRIN-
CIPAL RESIDENCE.—
‘‘(A) IN
GENERAL.—Property is a new,
highly energy-efficient principal residence if—
‘‘(i) such property is located in the
United States,
‘‘(ii) the original use of such property
commences with the taxpayer and is, at
the time of such use, the principal resi-
dence of the taxpayer, and
‘‘(iii) such property is certified before
such use commences as being 50 percent
property, 40 percent property, or 30 per-
cent property.
‘‘(B) 50, 40, OR 30 PERCENT PROPERTY.—
‘‘(i) IN
GENERAL.—For purposes of
subparagraph (A), property is 50 percent
property, 40 percent property, or 30 per-
cent property if the projected energy usage
of such property is reduced by 50 percent,
40 percent, or 30 percent, respectively,
compared to the energy usage of a ref-
erence house that complies with minimum
standard practice, such as the 1998 Inter-
national Energy Conservation Code of the
International Code Council, as determined
according to the requirements specified in
clause (ii).
‘‘(ii) PROCEDURES.—
‘‘(I) IN GENERAL.—For purposes
of clause (i), energy usage shall be
demonstrated either by a component-
based approach or a performance-
based approach.
‘‘(II) COMPONENT APPROACH.—
Compliance by the component ap-
proach is achieved when all of the
components of the house comply with
the requirements of prescriptive pack-
ages established by the Secretary of
Energy, in consultation with the Ad-
ministrator of the Environmental Pro-
tection Agency, such that they are
equivalent to the results of using the
performance-based approach of sub-
clause (III) to achieve the required re-
duction in energy usage.
‘‘(III) PERFORMANCE-BASED AP-
PROACH.—Performance-based compli-
ance shall be demonstrated in terms
of the required percentage reductions
in projected energy use. Computer
software used in support of perform-
ance-based compliance must meet all
of the procedures and methods for
calculating energy savings reductions
that are promulgated by the Secretary
of Energy. Such regulations on the
specifications for software shall be
based in the 1998 California Residen-
tial Alternative Calculation Method
Approval Manual, except that the cal-
culation procedures shall be developed
such that the same energy efficiency
measures qualify a home for tax cred-
its regardless of whether the home
uses a gas or oil furnace or boiler, or
an electric heat pump.
‘‘(IV) APPROVAL OF SOFTWARE
SUBMISSIONS.—The Secretary of En-
ergy shall approve software submis-
sions that comply with the calculation
requirements of subclause (III).
‘‘(C) 
DETERMINATIONS
OF
COMPLI-
ANCE.—A determination of compliance made
for the purposes of this paragraph shall be filed
with the Secretary of Energy within 1 year of
the date of such determination and shall include
the TIN of the certifier, the address of the
building in compliance, and the identity of the
person for whom such determination was per-
formed. Determinations of compliance filed with
the Secretary of Energy shall be available for
inspection by the Secretary.
‘‘(D) COMPLIANCE.—
‘‘(i) IN GENERAL.—The Secretary of
Energy in consultation with the Secretary
of the Treasury shall establish require-
ments for certification and compliance pro-
cedures after examining the requirements
for energy consultants and home energy
ratings providers specified by the Mortgage
Industry National Accreditation Proce-
dures for Home Energy Rating Systems.
‘‘(ii) INDIVIDUALS QUALIFIED TO DE-
TERMINE COMPLIANCE.—Individuals quali-
fied to determine compliance shall be only
those individuals who are recognized by an
organization certified by the Secretary of
Energy for such purposes.
‘‘(D) PRINCIPAL
RESIDENCE.—The term
‘principal residence’ has the same meaning as
when used in section 121, except that the pe-
riod for which a building is treated as the prin-
cipal residence of the taxpayer shall also include
the 60-day period ending on the 1st day on
which it would (but for this subparagraph) first
be treated as his principal residence.
‘‘(d) SPECIAL
RULES.—For purposes of this
section—
‘‘(1) DOLLAR AMOUNTS IN CASE OF JOINT OC-
CUPANCY.—In the case of any dwelling unit which if
jointly occupied and used during any calendar year
as a residence by 2 or more individuals the following
shall apply:
‘‘(A) The amount of the credit allowable
under subsection (a) by reason of expenditures
made during such calendar year by any of such
individuals with respect to such dwelling unit
shall be determined by treating all of such indi-
100
viduals as 1 taxpayer whose taxable year is
such calendar year.
‘‘(B) There shall be allowable with respect
to such expenditures to each of such individ-
uals, a credit under subsection (a) for the tax-
able year in which such calendar year ends in
an amount which bears the same ratio to the
amount determined under subparagraph (A) as
the amount of such expenditures made by such
individual during such calendar year bears to
the aggregate of such expenditures made by all
of such individuals during such calendar year.
‘‘(2) TENANT-STOCKHOLDER IN COOPERATIVE
HOUSING
CORPORATION.—In the case of an indi-
vidual who is a tenant-stockholder (as defined in sec-
tion 216) in a cooperative housing corporation (as
defined in such section), such individual shall be
treated as having made his tenant-stockholder’s pro-
portionate share (as defined in section 216(b)(3)) of
any expenditures of such corporation.
‘‘(3) CONDOMINIUMS.—
‘‘(A) IN GENERAL.—In the case of an indi-
vidual who is a member of a condominium man-
agement association with respect to a condo-
minium which he owns, such individual shall be
101
treated as having made his proportionate share
of any expenditures of such association.
‘‘(B) CONDOMINIUM
MANAGEMENT
ASSO-
CIATION.—For purposes of this paragraph, the
term ‘condominium management association’
means an organization which meets the require-
ments of paragraph (1) of section 528(c) (other
than subparagraph (E) thereof) with respect to
a condominium project substantially all of the
units of which are used as residences.
‘‘(4) JOINT OWNERSHIP OF ENERGY ITEMS.—
‘‘(A) IN GENERAL.—Any expenditure oth-
erwise qualifying as a residential energy prop-
erty expenditure shall not be treated as failing
to so qualify merely because such expenditure
was made with respect to 2 or more dwelling
units.
‘‘(B) LIMITS
APPLIED
SEPARATELY.—In
the case of any expenditure described in sub-
paragraph (A), the amount of the credit allow-
able under subsection (a) shall (subject to para-
graph (1)) be computed separately with respect
to the amount of the expenditure made for each
dwelling unit.
‘‘(5) ALLOCATION IN CERTAIN CASES.—
102
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), if less than 80 percent of
the use of an item is for nonbusiness purposes,
only that portion of the expenditures for such
item which is properly allocable to use for non-
business purposes shall be taken into account.
For purposes of this paragraph, use for a swim-
ming pool shall be treated as use which is not
for nonbusiness purposes.
‘‘(B) SPECIAL RULE FOR VEHICLES.—For
purposes of this section and section 48A, a ve-
hicle shall be treated as used entirely for busi-
ness or nonbusiness purposes if the majority of
the use of such vehicle is for business or non-
business purposes, as the case may be.
‘‘(6) DOUBLE BENEFIT; PROPERTY USED OUT-
SIDE UNITED STATES, ETC., NOT QUALIFIED.—No
credit shall be allowed under subsection (a)(1)(B)
with respect to—
‘‘(A) any property for which a credit is al-
lowed under section 30 or 48A,
‘‘(B) any property referred to in section
50(b), and
103
‘‘(C) the portion of the cost of any prop-
erty taken into account under section 179 or
179A.
‘‘(7) WHEN EXPENDITURE MADE; AMOUNT OF
EXPENDITURE.—
‘‘(A) IN GENERAL.—Except as provided in
subparagraph (B), an expenditure with respect
to an item shall be treated as made when the
original installation of the item is completed.
‘‘(B) EXPENDITURES PART OF BUILDING
CONSTRUCTION.—In the case of an expenditure
in connection with the construction of a struc-
ture, such expenditure shall be treated as made
when the original use of the constructed struc-
ture by the taxpayer begins.
‘‘(C) AMOUNT.—The amount of any ex-
penditure shall be the cost thereof.
‘‘(8) PROPERTY FINANCED BY SUBSIDIZED EN-
ERGY FINANCING.—
‘‘(A) REDUCTION
OF
EXPENDITURES.—
For purposes of determining the amount of res-
idential energy property expenditures made by
any individual with respect to any dwelling unit,
there shall not be taken in to account expendi-
104
tures which are made from subsidized energy fi-
nancing (as defined in section 48A(g)(1)).
‘‘(B) DOLLAR LIMITS REDUCED.—The dol-
lar amounts in the table contained in subsection
(b)(1) with respect to each property purchased
for such dwelling unit for any taxable year of
such taxpayer shall be reduced proportionately
by an amount equal to the sum of—
‘‘(i) the amount of the expenditures
made by the taxpayer during such taxable
year with respect to such dwelling unit and
not taken into account by reason of sub-
paragraph (A), and
‘‘(ii) the amount of any Federal,
State, or local grant received by the tax-
payer during such taxable year which is
used to make residential energy property
expenditures with respect to the dwelling
unit and is not included in the gross in-
come of such taxpayer.
‘‘(e) BASIS ADJUSTMENTS.—For purposes of this
subtitle, if a credit is allowed under this section for any
expenditure with respect to any property, the increase in
the basis of such property which would (but for this sub-
105
section) result from such expenditure shall be reduced by
the amount of the credit so allowed.’’.
(b) CONFORMING AMENDMENTS.—
(1) Subsection (a) of section 1016 of such Code
is amended by striking ‘‘and’’ at the end of para-
graph (26), by striking the period at the end of
paragraph (27) and inserting ‘‘; and’’, and by add-
ing at the end the following new paragraph:
‘‘(28) to the extent provided in section 25C(e),
in the case of amounts with respect to which a credit
has been allowed under section 25C.’’.
(2) The table of sections for subpart A of part
IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to sec-
tion 25A the following new item:
‘‘Sec. 25C. Nonbusiness energy property.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenditures after December 31,
1999.
SEC. 405. EXTENSION OF WIND AND BIOMASS TAX CREDIT.
(a) IN GENERAL.—Paragraph (3) of section 45(c) of
the Internal Revenue Code of 1986 (defining qualified fa-
cility) is amended to read as follows:
‘‘(3) QUALIFIED FACILITY.—The term ‘quali-
fied facility’ means any facility owned by the tax-
payer which is originally placed in service—
106
‘‘(A) in the case of a facility using wind to
produce electricity, after December 31, 1993,
and before July 1, 2004, and
‘‘(B) in the case of a facility using closed-
loop biomass to produce electricity, after De-
cember 31, 1992, and before July 1, 1999.’’.
(b) CREDIT NOT TO APPLY TO ELECTRICITY SOLD
TO UTILITIES UNDER CERTAIN CONTRACTS.—Subsection
(b) of section 45 of such Code is amended by adding at
the end the following new paragraph:
‘‘(4) CREDIT NOT TO APPLY TO ELECTRICITY
SOLD TO UTILITIES UNDER CERTAIN CONTRACTS.—
‘‘(A) IN GENERAL.—The credit determined
under subsection (a) shall not apply to
electricity—
‘‘(i) produced at a qualified facility
placed in service by the taxpayer after
June 30, 1999, and
‘‘(ii) sold to a utility pursuant to a
contract originally entered into before Jan-
uary 1, 1987 (whether or not amended or
restated after that date).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply if—
107
‘‘(i) the prices for energy and capacity
from such facility are established pursuant
to an amendment to the contract referred
to in subparagraph (A)(ii);
‘‘(ii) such amendment provides that
the prices set forth in the contract which
exceed avoided cost prices determined at
the time of delivery shall apply only to an-
nual quantities of electricity (prorated for
partial years) which do not exceed the
greater of—
‘‘(I) the average annual quantity
of electricity sold to the utility under
the contract during calendar years
1994, 1995, 1996, 1997, and 1998,
or
‘‘(II) the estimate of the annual
electricity production set forth in the
contract, or, if there is no such esti-
mate, the greatest annual quantity of
electricity sold to the utility under the
contract in any of the calendar years
1996, 1997, or 1998; and
108
‘‘(iii) such amendment provides that
energy and capacity in excess of the limita-
tion in clause (ii) may be—
‘‘(I) sold to the utility only at
prices that do not exceed avoided cost
prices determined at the time of deliv-
ery, or
‘‘(II) sold to a third party subject
to a mutually agreed upon advance
notice to the utility.
For purposes of this subparagraph, avoided cost
prices shall be determined as provided for in 18
CFR 292.304(d)(1) or any successor regula-
tion.’’.
SEC. 406. KEROSENE TAX EQUALIZER ACT.
(a) VENDOR REFUNDS OF FEDERAL EXCISE TAXES
ON UNDYED KEROSENE USED IN UNVENTED HEATERS
FOR HOME HEATING PURPOSES.—
(1) IN GENERAL.—Subparagraph (B) of section
6427(l)(5) of the Internal Revenue Code of 1986
(relating to sales of kerosene not for use in motor
fuel) is amended by striking ‘‘or’’ at the end of
clause (i), by striking the period at the end of clause
(ii) and inserting ‘‘, or’’, and by adding at the end
the following new clause:
109
‘‘(iii) in a qualified residential sale (as
defined in subparagraph (D)).’’
(2) QUALIFIED
RESIDENTIAL
SALE.—Para-
graph (5) of section 6427(l) of such Code is amend-
ed by adding at the end the following new subpara-
graph:
‘‘(D) QUALIFIED
RESIDENTIAL
SALE.—
For purposes of subparagraph (B)(iii), the term
‘qualified residential sale’ means any sale of
kerosene if—
‘‘(i) the kerosene is delivered into a
storage tank (of at least 50 but not more
than 200 gallons) located at a residence
for use as a fuel in an unvented heater
used for heating the residence, and
‘‘(ii) the vendor reasonably believes
that the kerosene is being so used.
Such term shall not include any sale which is
more than 30 days after the date of the submis-
sion to Congress of a study conducted by the
Secretary which finds that kerosene which is
dyed pursuant to section 4082 may be burned
in unvented residential heaters without endan-
gering the health or safety of the residents.’’
110
(3) REFUNDS.—Subparagraph (A) of section
6427(f)(4) of such Code is amended by adding at
the end the following new sentence: ‘‘In a case to
which subsection (l)(5)(B)(iii) applies, clause (ii)
shall be applied by substituting ‘1 month’ for ‘1
week’ and paragraph (3)(B) shall be applied by sub-
stituting ‘45 days’ for ‘20 days’.’’
(4) EFFECTIVE DATE.—The amendments made
by this section shall apply to sales after the date of
the enactment of this Act.
(b) STUDY OF SAFETY OF USING DYED KEROSENE
IN UNVENTED RESIDENTIAL HEATERS.—The Secretary
of the Treasury or such Secretary’s delegate shall conduct
a study of whether kerosene which has been dyed for Fed-
eral tax purposes may be used as a fuel in unvented resi-
dential heaters without endangering the health or safety
of the residents. The results of such study shall be sub-
mitted to each House of Congress not later than January
1, 2000.
TITLE V—ENVIRONMENT
SEC. 501. BETTER AMERICA BONDS TAX CREDIT.
(a) IN GENERAL.—Subpart B of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
section:
111
‘‘SEC. 30B. CREDIT TO HOLDERS OF BETTER AMERICA
BONDS.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of a tax-
payer who holds a Better America Bond on a credit allow-
ance date of such bond which occurs during the taxable
year, there shall be allowed as a credit against the tax
imposed by this chapter for such taxable year an amount
equal to the sum of the credits determined under sub-
section (b) with respect to credit allowance dates during
such year on which the taxpayer holds such bond.
‘‘(b) AMOUNT OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of the credit
determined under this subsection with respect to any
credit allowance date for a Better America Bond is
25 percent of the annual credit determined with re-
spect to such bond.
‘‘(2) ANNUAL CREDIT.—The annual credit de-
termined with respect to any Better America Bond
is the product of—
‘‘(A) the applicable credit rate, multiplied
by
‘‘(B) the outstanding face amount of the
bond.
‘‘(3) APPLICABLE CREDIT RATE.—For purposes
of paragraph (1), the applicable credit rate with re-
spect to an issue is the rate equal to an average
112
market yield (as of the day before the date of
issuance of the issue) on outstanding long-term cor-
porate debt obligations (determined under regula-
tions prescribed by the Secretary).
‘‘(4) SPECIAL RULE FOR ISSUANCE AND RE-
DEMPTION.—In the case of a bond which is issued
during the 3-month period ending on a credit allow-
ance date, the amount of the credit determined
under this subsection with respect to such credit al-
lowance date shall be a ratable portion of the credit
otherwise determined based on the portion of the 3-
month period during which the bond is outstanding.
A similar rule shall apply when the bond is re-
deemed.
‘‘(c) BETTER AMERICA BOND.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘Better America
Bond’ means any bond issued as part of an issue
if—
‘‘(A) 95 percent or more of the proceeds of
such issue are to be used for any qualified pur-
pose,
‘‘(B) the bond is issued by a State or local
government within the jurisdiction of which the
113
qualified purpose of the issue is to be carried
out,
‘‘(C) the issuer designates such bond for
purposes of this section,
‘‘(D) the term of each bond which is part
of such issue does not exceed 15 years,
‘‘(E) the requirements of section 147(f)
are met with respect to such issue, and
‘‘(F) except in the case of the proceeds of
such issue which are to be used for the qualified
purpose described in paragraph (2)(A)(iv), the
payment of the principal of such issue is se-
cured by taxes of general applicability imposed
by a general purpose governmental unit.
‘‘(2) QUALIFIED PURPOSE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
purpose’ means any of the following:
‘‘(i) The acquisition of land for use as
open space, wetlands, public parks, or
greenways, and the provision of visitor fa-
cilities (such as campgrounds and hiking
or biking trails) for land so used, but only
if—
114
‘‘(I) such land and facilities are
to be owned by the issuer or a quali-
fied owner, and
‘‘(II) the initial owner of such
land and facilities records pursuant to
State law a qualified restrictive cov-
enant with respect to such land and
facilities.
‘‘(ii) The remediation of land acquired
under clause (i) (or other publicly owned
land) to enhance water quality by—
‘‘(I) restoring hydrology or plant-
ing trees or other vegetation,
‘‘(II) 
undertaking 
reasonable
measures to control erosion,
‘‘(III) restoring wetlands, or
‘‘(IV) 
remediating 
conditions
caused by the prior disposal of toxic
or other waste.
‘‘(iii) The acquisition by the issuer or
any qualified owner of any restriction on
privately owned open land which prevents
commercial development and any substan-
tial change in the use or character of the
land if such restriction would, if contrib-
115
uted by the owner of the open land to a
qualified organization (as defined in sec-
tion 170(h)(3)), be a qualified conservation
contribution (as defined in section 170(h)).
‘‘(iv) The environmental assessment
and remediation of real property owned by
any State or local government if—
‘‘(I) such property was acquired
by such government as a result of
being abandoned by the prior owner,
and
‘‘(II) such property is located in
an area at or on which there has been
a release (or threat of release) or dis-
posal of any hazardous substance (as
defined in section 198).
‘‘(B) REMEDIATION OF NATIONAL PRIOR-
ITIES
LISTED
SITES
NOT
QUALIFIED
PUR-
POSE.—Subparagraph (A)(ii) shall not apply to
remediation of any site which is on, or proposed
for, the national priorities list under section
105(a)(8)(B) of the Comprehensive Environ-
mental Response, Compensation, and Liability
Act of 1980.
116
‘‘(C) QUALIFIED OWNER.—For purposes of
this paragraph, the term ‘qualified owner’
means any organization described in section
501(c)(3) whose exempt purpose includes envi-
ronmental protection.
‘‘(D) 
QUALIFIED
RESTRICTIVE
COV-
ENANT.—For 
purposes 
of 
subparagraph
(A)(i)(II), the term ‘qualified restrictive cov-
enant’ means, with respect to land or facilities,
any covenant which prohibits the person who
owns such land or facilities at the end of the
term of the bond from selling or otherwise per-
mitting a use of such land or facilities which is
not described in subparagraph (A) unless—
‘‘(i) a reasonable period is allowed for
a qualified owner to purchase such land or
facilities,
‘‘(ii) the purchase price is not greater
than the price originally paid in conjunc-
tion with the expenditure of bond proceeds,
and
‘‘(iii) the purchaser records pursuant
to State law a covenant with respect to the
purchased land and facilities which pro-
tects in perpetuity the use of such land
117
and facilities for a use described in sub-
paragraph (A).
‘‘(3) PUBLIC
AVAILABILITY
REQUIREMENT,
ETC.—
‘‘(A) IN
GENERAL.—The term ‘Better
America Bond’ shall not include any bond
which is part of an issue if—
‘‘(i) any portion of the proceeds of the
issue are to be used for any private busi-
ness use (as defined in section 141(b)(6)),
or
‘‘(ii) the payment of the principal of,
or the interest on, any portion of such pro-
ceeds is (under the terms of such issue or
any underlying arrangement) directly or
indirectly secured or to be derived as de-
scribed in subparagraph (A) or (B) of sec-
tion 141(b)(2).
‘‘(B) 
EXCEPTION.—Subparagraph 
(A)
shall not apply to proceeds used for a qualified
purpose described in paragraph (2)(A)(iv).
‘‘(d) LIMITATION
ON AMOUNT
OF BONDS DES-
IGNATED.—
‘‘(1) IN
GENERAL.—The maximum aggregate
face amount of bonds issued during any calendar
118
year which may be designated under subsection
(c)(1) by any issuer shall not exceed the limitation
amount allocated under paragraph (3) for such cal-
endar year to such issuer.
‘‘(2) NATIONAL
LIMITATION
ON
AMOUNT
OF
BONDS
DESIGNATED.—There is a national Better
America Bond limitation for each calendar year.
Such limitation is—
‘‘(A) $1,900,000,000 for each of calendar
years 2000, 2001, 2002, 2003, and 2004, and
‘‘(B) except as provided in paragraph (4),
zero after 2004.
‘‘(3) ALLOCATION
OF
LIMITATION
AMONG
STATES AND LOCAL GOVERNMENTS.—
‘‘(A) IN GENERAL.—The national Better
America Bond limitation for any calendar year
shall be allocated by the EPA Administrator to
States and local governments having approved
applications. As part of the competitive applica-
tion process, the Environmental Protection
Agency should, when possible, allocate such lim-
itation on a per capita basis.
‘‘(B) APPROVED APPLICATION.—For pur-
poses of subparagraph (A), the term ‘approved
application’ means an application which is ap-
119
proved by the EPA Administrator and includes
such information as the EPA Administrator
shall specify.
‘‘(4) CARRYOVER OF UNUSED LIMITATION.—If
for any calendar year—
‘‘(A) the amount allocated under para-
graph (4) to any State or local government, ex-
ceeds
‘‘(B) the amount of bonds issued during
such year which are designated under sub-
section (c)(1) pursuant to such allocation,
the limitation amount under paragraph (3) for such
State or local government for the following calendar
year shall be increased by the amount of such ex-
cess.
‘‘(e) LIMITATION BASED ON AMOUNT OF TAX.—
‘‘(1) IN GENERAL.—The credit allowed under
subsection (a) for any taxable year shall not exceed
the excess of—
‘‘(A) the sum of the regular tax liability
(as defined in section 26(b)) plus the tax im-
posed by section 55, over
‘‘(B) the sum of the credits allowable
under part IV of subchapter A (other than sub-
part C thereof, relating to refundable credits).
120
‘‘(2) CARRYOVER OF UNUSED CREDIT.—If the
credit allowable under subsection (a) exceeds the
limitation imposed by paragraph (1) for such taxable
year, such excess shall be carried to the succeeding
taxable year and added to the credit allowable under
subsection (a) for such taxable year.
‘‘(f) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) CREDIT
ALLOWANCE
DATE.—The term
‘credit allowance date’ means—
‘‘(A) March 15,
‘‘(B) June 15,
‘‘(C) September 15, and
‘‘(D) December 15.
Such term includes the last day on which the bond
is outstanding.
‘‘(2) BOND.—The term ‘bond’ includes any ob-
ligation.
‘‘(3) STATE.—The term ‘State’ includes the
District of Columbia, any possession of the United
States, and any Indian tribal government (within the
meaning of section 7871).
‘‘(4) LOCAL
GOVERNMENT.—The term ‘local
government’ means—
121
‘‘(A) any county, city, town, township, par-
ish, village, or other general purpose political
subdivision of a State, and
‘‘(B) any combination of political subdivi-
sions described in subparagraph (A) recognized
by the EPA Administrator.
‘‘(5) EPA ADMINISTRATOR.—The term ‘EPA
Administrator’ means the Administrator of the Envi-
ronmental Protection Agency.
‘‘(g) CREDIT INCLUDED IN GROSS INCOME.—Gross
income includes the amount of the credit allowed to the
taxpayer under this section (determined without regard to
subsection (e)) and the amount so included shall be treat-
ed as interest income.
‘‘(h) SPECIAL RULES RELATING TO ARBITRAGE.—
‘‘(1) IN GENERAL.—A bond shall not be treated
as failing to meet the requirements of subsection
(c)(1) solely by reason of the fact that the proceeds
of the issue of which such bond is a part are in-
vested for a temporary period (but not more than 36
months) until such proceeds are needed for the pur-
pose for which such issue was issued.
‘‘(2) REASONABLE EXPECTATION AND BINDING
COMMITMENT REQUIREMENTS.—Paragraph (1) shall
122
apply to an issue only if, as of the date of
issuance—
‘‘(A) the issuer reasonably expects that—
‘‘(i) at least 95 percent of the pro-
ceeds of the issue will be spent for a quali-
fied purpose within the 3-year period be-
ginning on such date, and
‘‘(ii) property financed with such pro-
ceeds will be used for qualified purposes
for at least 15 years after being so fi-
nanced,
‘‘(B) there is a binding commitment with
a third party to spend at least 10 percent of the
proceeds of the issue for qualified purposes
within the 6-month period beginning on such
date, and
‘‘(C) the issuer reasonably expects that the
remaining proceeds of the issue will be spent
with due diligence for qualified purposes.
‘‘(3) EARNINGS ON PROCEEDS.—Any earnings
on proceeds during the temporary period shall be
treated as proceeds of the issue for purposes of ap-
plying subsection (c)(1) and paragraph (1) of this
subsection.
123
‘‘(i) DENIAL OF DEDUCTION FOR ENVIRONMENTAL
REMEDIATION EXPENDITURES.—Expenditures financed
by any Better America Bond shall not be allowed as a
deduction under section 198.
‘‘(j) OTHER SPECIAL RULES.—
‘‘(1) BONDS
HELD
BY
REGULATED
INVEST-
MENT COMPANIES.—If any Better America Bond is
held by a regulated investment company, the credit
determined under subsection (a) shall be allowed to
shareholders of such company under procedures pre-
scribed by the Secretary.
‘‘(2) CREDITS MAY BE STRIPPED.—Under regu-
lations prescribed by the Secretary—
‘‘(A) IN GENERAL.—There may be a sepa-
ration (including at issuance) of the ownership
of a Better America Bond and the entitlement
to the credit under this section with respect to
such bond. In case of any such separation, the
credit under this section shall be allowed to the
person who on the credit allowance date holds
the instrument evidencing the entitlement to
the credit and not to the holder of the bond.
‘‘(B) CERTAIN RULES TO APPLY.—In the
case of a separation described in subparagraph
(A), the rules of section 1286 shall apply to the
124
Better America Bond as if it were a stripped
bond and to the credit under this section as if
it were a stripped coupon.
‘‘(3) TREATMENT
FOR
ESTIMATED
TAX
PUR-
POSES.—Solely for purposes of sections 6654 and
6655, the credit allowed by this section to a tax-
payer by reason of holding a Better America Bond
on a credit allowance date shall be treated as if it
were a payment of estimated tax made by the tax-
payer on such date.
‘‘(4) CREDIT MAY BE TRANSFERRED.—Nothing
in any law or rule of law shall be construed to limit
the transferability of the credit allowed by this sec-
tion through sale and repurchase agreements.
‘‘(5) REPORTING.—Issuers of Better America
Bonds shall submit reports similar to the reports re-
quired under section 149(e).
‘‘(k) RECAPTURE OF PORTION OF CREDIT WHERE
CESSATION OF QUALIFIED USE.—
‘‘(1) IN GENERAL.—If any bond which when
issued purported to be a Better America Bond
ceases to meet the requirements of subsection (c),
the issuer shall pay to the United States (at the
time required by the Secretary) an amount equal to
the aggregate of the credits allowable under this sec-
125
tion (determined without regard to subsection (e))
for taxable years ending during the calendar year in
which such cessation occurs and the 2 preceding cal-
endar years.
‘‘(2) FAILURE TO PAY.—If the issuer fails to
timely pay the amount required by paragraph (1)
with respect to any issue, the tax imposed by this
chapter on each holder of any bond which is part of
such issue shall be increased (for the taxable year of
the holder in which such cessation occurs) by the ag-
gregate decrease in the credits allowed under this
section to such holder for taxable years beginning in
such 3 calendar years which would have resulted
solely from denying any credit under this section
with respect to such issue for such taxable years.
‘‘(3) SPECIAL RULES.—
‘‘(A) TAX
BENEFIT
RULE.—The tax for
the taxable year shall be increased under para-
graph (2) only with respect to credits allowed
by reason of this section which were used to re-
duce tax liability. In the case of credits not so
used to reduce tax liability, the carryforwards
and carrybacks under section 39 shall be appro-
priately adjusted.
126
‘‘(B) NO CREDITS AGAINST TAX.—Any in-
crease in tax under paragraph (2) shall not be
treated as a tax imposed by this chapter for
purposes of determining—
‘‘(i) the amount of any credit allow-
able under this part, or
‘‘(ii) the amount of the tax imposed
by section 55.
‘‘(l) TERMINATION.—This section shall not apply to
any bond issued after December 31, 2004.’’
(b) REPORTING.—Subsection (d) of section 6049 of
such Code (relating to returns regarding payments of in-
terest) is amended by adding at the end the following new
paragraph:
‘‘(8) REPORTING OF CREDIT ON BETTER AMER-
ICA BONDS.—
‘‘(A) IN GENERAL.—For purposes of sub-
section (a), the term ‘interest’ includes amounts
includible in gross income under section 30B(g)
and such amounts shall be treated as paid on
the credit allowance date (as defined in section
30B(f)(1)).
‘‘(B) 
REPORTING
TO
CORPORATIONS,
ETC.—Except as otherwise provided in regula-
tions, in the case of any interest described in
127
subparagraph (A) of this paragraph, subsection
(b)(4) of this section shall be applied without
regard to subparagraphs (A), (H), (I), (J), (K),
and (L)(i).
‘‘(C) REGULATORY AUTHORITY.—The Sec-
retary may prescribe such regulations as are
necessary or appropriate to carry out the pur-
poses of this paragraph, including regulations
which require more frequent or more detailed
reporting.’’
(c) CONFORMING AMENDMENT.—The table of sec-
tions for subpart B of part IV of subchapter A of chapter
1 of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 30B. Credit to holders of Better America Bonds.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to obligations issued after Decem-
ber 31, 1999.
(e) GUIDELINES FOR APPLICATIONS.—Not later than
January 1, 2000, guidelines specifying the criteria to be
used in approving applications under section 30B(d)(3) of
the Internal Revenue Code of 1986 (as added by this Act)
shall be developed and published by the Administrator of
the Environmental Protection Agency in the Federal Reg-
ister.
128
SEC. 502. PERMANENT EXTENSION OF BROWNFIELDS TAX
DEDUCTION AT 100 PERCENT.
(a) IN GENERAL.—Clause (ii) of section 198(c)(1)(A)
of the Internal Revenue Code of 1986 (relating to quali-
fied contaminated sites) is amended to read as follows:
‘‘(ii) which is within the United
States, and’’.
(b) CONFORMING AMENDMENT.—Paragraph (2) of
section 198(c) of such Code is amended to read as follows:
‘‘(2) NATIONAL PRIORITIES LISTED SITES NOT
INCLUDED.—Such term shall not include any site
which is on, or proposed for, the national priorities
list under section 105(a)(8)(B) of the Comprehen-
sive Environmental Response, Compensation, and
Liability Act of 1980 (as in effect on the date of
the enactment of this section).’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenditures paid or incurred
after the date of the enactment of this Act in taxable years
ending after such date.
SEC. 503. RESTORATION OF DEDUCTION FOR DEMOLITION
OF CERTAIN STRUCTURES.
(a) IN GENERAL.—So much of section 280B of the
Internal Revenue Code of 1986 (relating to demolition of
structures) as precedes paragraph (1) is amended to read
as follows:
129
‘‘SEC. 280B. DEMOLITION OF CERTIFIED HISTORIC STRUC-
TURES 
AND 
HISTORICALLY 
RESIDENTIAL
STRUCTURES.
‘‘(a) IN GENERAL.—In the case of the demolition of
any certified historic structure or historically residential
structure—’’.
(b) CERTIFIED HISTORIC STRUCTURE; HISTORI-
CALLY RESIDENTIAL STRUCTURE.—Section 280B of such
Code is amended by adding at the end the following new
subsection:
‘‘(b) CERTIFIED HISTORIC STRUCTURE; RESIDEN-
TIAL STRUCTURE.—For purposes of this section—
‘‘(1) CERTIFIED
HISTORIC
STRUCTURE.—The
term ‘certified historic structure’ means—
‘‘(A) a certified historic structure (as de-
fined in section 47(c)(3)), and
‘‘(B) any building (and its structural com-
ponents) which is designated as a certified his-
toric structure by the appropriate agency of a
State or local government.
‘‘(2) 
HISTORICALLY
RESIDENTIAL
STRUC-
TURE.—The term ‘historically residential structure’
means any building (other than a certified historic
structure) and its structural components if the first
use of such building after its initial construction was
for residential purposes.’’
130
(c) CLERICAL AMENDMENT.—The item relating to
section 280B in the table of sections for part IX of sub-
chapter B of chapter 1 of such Code is amended to read
as follows:
‘‘Sec. 280B. Demolition of certified historic structures and his-
torically residential structures.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to demolitions commencing after
the date of the enactment of this Act.
SEC. 504. INCREASE IN LAND DONATION TAX DEDUCTION
FROM 30 PERCENT TO 50 PERCENT.
(a) MODIFICATIONS TO ENCOURAGE CONTRIBU-
TIONS OF CAPITAL GAIN REAL PROPERTY MADE FOR
CONSERVATION PURPOSES AND QUALIFIED CONSERVA-
TION CONTRIBUTIONS.—
(1) CONTRIBUTIONS
OF
CAPITAL
GAIN
REAL
PROPERTY
MADE
FOR
CONSERVATION
PURPOSES
AND OF QUALIFIED CONSERVATION CONTRIBUTIONS
NOT
SUBJECT
TO
SPECIAL
LIMITATION
ON
CON-
TRIBUTIONS
OF
CAPITAL
GAIN
PROPERTY.—Sub-
paragraph (C) of section 170(b)(1) of the Internal
Revenue Code of 1986 (relating to special limitation
with respect to contributions described in subpara-
graph (A) of capital gain property) is amended by
redesignating clause (iv) as clause (v) and by insert-
ing after clause (iii) the following new clause:
131
‘‘(iv) In the case of charitable con-
tributions described in subparagraph (A)
of capital gain property, clauses (i) and (ii)
shall not apply to—
‘‘(I) any qualified conservation
contribution (as defined in section
170(h)), or
‘‘(II) any other contribution of
capital gain property which is real
property if the contribution is of the
donor’s entire interest in such prop-
erty and is to a qualified organization
(as defined in section 170(h)(3))
which is organized for conservation
purposes 
(as 
defined 
in 
section
170(h)(4)(A)) and which provides the
taxpayer, at the time of such dona-
tion, a letter of intent which contains
an acknowledgment of the donee’s in-
tent that the property is being ac-
quired for any such conservation pur-
pose.’’.
(2) UNLIMITED
CARRYOVER
FOR
CONTRIBU-
TIONS OF CAPITAL GAIN REAL PROPERTY FOR CON-
SERVATION
PURPOSES
AND
OF
QUALIFIED
CON-
132
SERVATION CONTRIBUTIONS OF CAPITAL GAIN PROP-
ERTY.—Paragraph (1) of section 170(d) of such
Code in amended by adding at the end the following
new subparagraph:
‘‘(C) UNLIMITED
CARRYOVER
FOR
CON-
TRIBUTIONS OF CAPITAL GAIN REAL PROPERTY
FOR CONSERVATION PURPOSES AND OF QUALI-
FIED CONSERVATION CONTRIBUTIONS OF CAP-
ITAL GAIN PROPERTY.—The 5 taxable year lim-
itation in subparagraph (A) shall not apply to
any charitable contribution to which clauses (i)
and (ii) of subsection (b)(1)(C) do not apply by
reason of clause (iv) thereof. For purposes of
this paragraph, the excess described in the ma-
terial preceding clause (i) of subparagraph (A)
shall be treated as attributable to contributions
described in the preceding sentence of this sub-
paragraph to the extent of such contributions.’’.
(3) EFFECTIVE DATE.—The amendment made
by this section shall apply to contributions made in
taxable years beginning after the date of the enact-
ment of this Act.
(b) MODIFICATION OF RULES RELATING TO ESTATE
TAX EXCLUSION
FOR LAND SUBJECT
TO QUALIFIED
CONSERVATION EASEMENT.—
133
(1) REPEAL
OF
CERTAIN
RESTRICTIONS
ON
WHERE LAND IS LOCATED.—Clause (i) of section
2031(c)(8)(A) of the Internal Revenue Code of 1986
is amended to read as follows:
‘‘(i) which is located in the United
States or any possession of the United
States,’’.
(2) REPEAL OF LIMITATION ON EXCLUSION.—
(A) IN GENERAL.—Paragraph (1) of sec-
tion 2031(c) of such Code is amended by strik-
ing ‘‘the lesser of—’’ and all that follows and
inserting ‘‘the applicable percentage of the
value of land subject to a qualified conservation
easement, reduced by the amount of any deduc-
tion under section 2055(f) with respect to such
land.’’
(B) CONFORMING AMENDMENTS.—
(i) Subsection (c) of section 2031 of
such Code is amended by striking para-
graph (3) and by redesignating paragraphs
(4) through (10) as paragraphs (3)
through (9), respectively.
(ii) Paragraphs (2) and (6) of section
2031(c) of such Code, as redesignated by
subparagraph (A), are each amended by
134
striking ‘‘paragraph (5)’’ and inserting
‘‘paragraph (4)’’.
(iii) 
Paragraphs 
(1), 
(6), 
and
(7)(A)(iii) of section 2031(c) of such Code,
as redesignated by subparagraph (A), are
each amended by striking ‘‘paragraph (6)’’
and inserting ‘‘paragraph (5)’’.
(3) DATE FOR DETERMINING VALUE OF LAND
AND EASEMENT.—Paragraph (2) of section 2032(c)
of such Code (defining applicable percentage) is
amended by adding at the end the following new
sentence: ‘‘The values taken into account under the
preceding sentence shall be such values as of the
date of the contribution referred to in paragraph
(7)(B).’’
(4) 
CERTAIN
COMMERCIAL
RECREATIONAL
USES
PERMITTED.—Subparagraph (B) of section
2031(c)(7) of such Code, as redesignated by sub-
section (b), is amended to read as follows:
‘‘(B) QUALIFIED
CONSERVATION
EASE-
MENT.—
‘‘(i) IN GENERAL.—The term ‘quali-
fied conservation easement’ means a quali-
fied conservation contribution (as defined
in section 170(h)(1)) of a qualified real
135
property interest (as defined in section
170(h)(2)(C)), except that clause (iv) of
section 170(h)(4)(A) shall not apply, and
the restriction on the use of such interest
described in section 170(h)(2)(C) shall in-
clude a prohibition on more than a de
minimis use for a commercial recreational
activity.
‘‘(ii) SPECIAL RULES.—For purposes
of this paragraph—
‘‘(I) RETAINED RIGHTS.—Rights
retained in the conservation easement
to lease the land for hunting and fish-
ing, so long as such leases are not in-
consistent with the conservation pur-
pose of the easement, shall be deemed
to be de minimis use.
‘‘(II) 
PRE-EFFECTIVE
DATE
EASEMENTS.—Easements 
otherwise
qualifying under the provisions of this
subsection that were donated on or
before the date of the enactment of
this subclause, shall be deemed to
allow no more than de minimis use for
a commercial recreational activity un-
136
less by their terms they expressly pro-
vide for commercial recreational activ-
ity in excess of that otherwise allowed
by this subparagraph.
‘‘(III) AUTHORITY
TO
EXTIN-
GUISH RIGHT OF COMMERCIAL RECRE-
ATION
ACTIVITY.—For purposes of
this section, if the executor of an es-
tate and every person in being who
has an interest in the land execute an
agreement to amend or extinguish any
right under the easement of commer-
cial recreation activity in the land so
as to ensure that such land is used for
no more than de minimis commercial
recreational activity, such agreement
shall be treated as in effect as of the
date of the election described in para-
graph (5).’’
(5) EXCLUSION
APPLICABLE
TO
SOLD
EASE-
MENTS.—Clause (i) of section 2031(c)(7) of such
Code, as amended by subsection (d), is amended by
adding at the end the following new sentence: ‘‘A
transfer for value of a qualified real property inter-
est (as defined under section 170(h)(2)(C)) shall not
137
fail to be treated as a qualified conservation ease-
ment if such interest would meet the requirements
of the preceding sentence were it donated to the pur-
chaser and any reference in this section to a con-
tribution shall be treated as including a reference to
such a transfer.’’
(6) EFFECTIVE DATE.—The amendments made
by this section shall take effect as if included in the
amendments made by section 508 of the Taxpayer
Relief Act of 1997.
SEC. 505. TEMPORARY SUSPENSION OF MAXIMUM AMOUNT
OF AMORTIZABLE REFORESTATION EXPENDI-
TURES.
(a) INCREASE IN DOLLAR LIMITATION.—Paragraph
(1) of section 194(b) of the Internal Revenue Code of
1986 (relating to amortization of reforestation expendi-
tures) is amended by striking ‘‘$10,000 ($5,000’’ and in-
serting ‘‘$25,000 ($12,500’’.
(b) TEMPORARY SUSPENSION OF INCREASED DOL-
LAR LIMITATION.—Subsection (b) of section 194(b) of
such Code (relating to amortization of reforestation ex-
penditures) is amended by adding at the end the following
new paragraph:
‘‘(5) SUSPENSION
OF
DOLLAR
LIMITATION.—
Paragraph (1) shall not apply to taxable years be-
138
ginning after December 31, 1999, and before Janu-
ary 1, 2004.
(c) CONFORMING AMENDMENT.—Paragraph (1) of
section 48(b) of such Code is amended by striking ‘‘section
194(b)(1)’’ and inserting ‘‘section 194(b)(1) and without
regard to section 194(b)(5)’’.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1998.
TITLE VI—ESTATE TAX
REDUCTION
SEC. 601. REPEAL OF LIMITATION ON ESTATE TAX DEDUC-
TION FOR FAMILY-OWNED BUSINESS INTER-
ESTS.
(a) IN GENERAL.—Subsection (a) of section 2057 of
the Internal Revenue Code of 1986 (relating to family-
owned business interests) is amended to read as follows:
‘‘(a) ALLOWANCE OF DEDUCTION.—For purposes of
the tax imposed by section 2001, in the case of an estate
of a decedent to which this section applies, the value of
the taxable estate shall be determined by deducting from
the value of the gross estate the adjusted value of the
qualified family-owned business interests of the decedent
which are described in subsection (b)(2).’’
139
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to estates of decedents dying
after the date of the enactment of this Act.
SEC. 602. UNIFIED CREDIT INCREASED BY UNUSED UNI-
FIED CREDIT OF PREDECEASED SPOUSE.
(a) IN GENERAL.—Section 2010 of the Internal Rev-
enue Code of 1986 (relating to unified credit against es-
tate tax) is amended by redesignating subsections (c) and
(d) as subsections (d) and (e), respectively, and by insert-
ing after subsection (a) the following new subsection:
‘‘(c) INCREASE IN CREDIT FOR UNUSED UNIFIED
CREDIT OF PREDECEASED SPOUSE.—
‘‘(1) IN GENERAL.—The amount of the credit
allowable under subsection (a) shall be increased by
the aggregate of the amounts of the unused pre-
deceased spouse credit.
‘‘(2) UNUSED
PREDECEASED
SPOUSE
CRED-
IT.—For purposes of paragraph (1)—
‘‘(A) IN GENERAL.—The term ‘unused pre-
deceased spouse credit’ means, with respect to
any predeceased spouse of the decedent, the
amount equal to the excess of—
‘‘(i) the maximum amount allowable
under subsection (a) to the estate of such
spouse, over
140
‘‘(ii) the tax imposed by section 2001
reduced by the credits against such tax
other than the credit allowed by this sec-
tion.
‘‘(B) LIMITATION
BASED
ON
CREDIT
EQUIVALENT OF VALUE OF PROPERTY PASSING
TO DECEDENT FROM PREDECEASED SPOUSE.—
The amount of the unused predeceased spouse
credit with respect to any predeceased spouse
shall not exceed the credit equivalent of the ag-
gregate value of property acquired from or
passing from (within the meaning of section
1014) the predeceased spouse to the decedent.
‘‘(C) CREDIT EQUIVALENT.—For purposes
of subparagraph (B), the credit equivalent is
the amount of the tentative tax which would be
determined under the rate schedule set forth in
section 2001(c) if the amount with respect to
which the tentative tax is to be computed were
the aggregate value of the property referred to
in subparagraph (B).
‘‘(3) LIMITATION
ON
AGGREGATE
INCREASE
WHERE MORE THAN 1 PREDECEASED SPOUSE.—In
no event may the amount of the increase under
141
paragraph (1) exceed the dollar amount contained in
subsection (a).
‘‘(4) PREDECEASED SPOUSE.—For purposes of
this subsection, the term ‘predeceased spouse’
means, with respect to the decedent, an individual
who was married to the decedent on the date of such
individual’s death.’’
(b) GIFT TAX.—Section 2505 of such Code is amend-
ed by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively, and by inserting after subsection
(a) the following new subsection:
‘‘(b) INCREASE IN CREDIT FOR UNUSED UNIFIED
CREDIT OF PREDECEASED SPOUSE.—Rules similar to the
rules of section 2010(c) shall apply with respect to cal-
endar years beginning after the date of death of any pre-
deceased spouse of the donor.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to estates of decedents dying, and
gifts made, after the date of the enactment of this Act.
142
TITLE VII—FAMILY
ENHANCEMENT
SEC. 701. NONREFUNDABLE PERSONAL CREDITS ALLOWED
AGAINST ALTERNATIVE MINIMUM TAX.
(a) IN GENERAL.—Subsection (a) of section 26 of the
Internal Revenue Code of 1986 is amended to read as fol-
lows:
‘‘(a) LIMITATION BASED ON AMOUNT OF TAX.—The
aggregate amount of credits allowed by this subpart for
the taxable year shall not exceed the taxpayer’s regular
tax liability for the taxable year.’’
(b) CONFORMING AMENDMENT.—Subsection (d) of
section 24 of such Code is amended by striking paragraph
(2) and by redesignating paragraph (3) as paragraph (2).
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 702. ELIMINATION OF MARRIAGE PENALTY IN STAND-
ARD DEDUCTION.
(a) IN GENERAL.—Paragraph (2) of section 63(c) of
the Internal Revenue Code of 1986 (relating to standard
deduction) is amended—
(1) by striking ‘‘$5,000’’ in subparagraph (A)
and inserting ‘‘twice the dollar amount in effect
under subparagraph (C) for the taxable year’’,
143
(2) by adding ‘‘or’’ at the end of subparagraph
(B),
(3) by striking ‘‘in the case of’’ and all that fol-
lows in subparagraph (C) and inserting ‘‘in any
other case.’’, and
(4) by striking subparagraph (D).
(b) TECHNICAL AMENDMENT.—Subparagraph (B) of
section 1(f)(6) of such Code is amended by striking
‘‘(other than with’’ and all that follows through ‘‘shall be
applied’’ and inserting ‘‘(other than sections 63(c)(4) and
151(d)(4)(A)) shall be applied’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 703. EXPANSION OF DEPENDENT CARE TAX CREDIT.
(a) IN GENERAL.—Paragraph (2) of section 21(a) of
the Internal Revenue Code of 1986 (relating to expenses
for household and dependent care services necessary for
gainful employment) is amended to read as follows:
‘‘(2) APPLICABLE PERCENTAGE DEFINED.—For
purposes of paragraph (1), the term ‘applicable per-
centage’ means 50 percent reduced (but not below
20 percent) by 1 percentage point for each $1,000
(or fraction thereof) by which the taxpayer’s ad-
144
justed gross income for the taxable year exceeds
$30,000.’’
(b) MINIMUM CREDIT ALLOWED FOR STAY-AT-HOME
PARENTS.—Section 21(e) of such Code (relating to special
rules) is amended by adding at the end the following:
‘‘(11) MINIMUM CREDIT ALLOWED FOR STAY-
AT-HOME
PARENTS.—Notwithstanding 
subsection
(d), in the case of any taxpayer with one or more
qualifying 
individuals 
described 
in 
subsection
(b)(1)(A) under the age of 1 at any time during the
taxable year, such taxpayer shall be deemed to have
employment-related expenses with respect to such
qualifying individuals in an amount equal to the
greater of—
‘‘(A) the amount of employment-related ex-
penses incurred for such qualifying individuals
for the taxable year (determined under this sec-
tion without regard to this paragraph), or
‘‘(B) $125 for each month in such taxable
year during which such qualifying individual is
under the age of 1.’’.
(c) 
INFLATION
ADJUSTMENT
OF
DOLLAR
AMOUNTS.—
(1) Section 21 of such Code is amended by re-
designating subsection (f) as subsection (g) and by
145
inserting after subsection (e) the following new sub-
section:
‘‘(f) INFLATION ADJUSTMENT.—In the case of any
taxable year beginning in a calendar year after 2000, the
$30,000 amount contained in subsection (a), the $2,400
amount in subsection (c), and the $125 amount in sub-
section (e)(11) shall be increased by an amount equal to—
‘‘(1) such dollar amount, multiplied by
‘‘(2) the cost-of-living adjustment determined
under section 1(f)(3) for such calendar year by sub-
stituting ‘calendar year 1999’ for ‘calendar year
1992’ in subparagraph (B) thereof.
If the increase determined under the preceding sentence
is not a multiple of $50 ($5 in the case of the amount
in subsection (e)(11)), such amount shall be rounded to
the next lowest multiple thereof.’’
(2) Paragraph (2) of section 21(c) of such Code
is amended by striking ‘‘$4,800’’ and inserting
‘‘twice the dollar amount applicable under paragraph
(1)’’.
(3) Paragraph (2) of section 21(d) of such Code
is amended by striking ‘‘less than—’’ and all that
follows through the end of the first sentence and in-
serting ‘‘less than 1⁄12 of the amount which applies
146
under subsection (c) to the taxpayer for the taxable
year.’’
(d) CREDIT ALLOWED BASED
ON RESIDENCY
IN
CERTAIN CASES.—Subsection (e) of section 21 of such
Code is amended by adding at the end the following new
paragraph:
‘‘(12) CREDIT ALLOWED BASED ON RESIDENCY
IN CERTAIN CASES.—In the case of a taxpayer—
‘‘(A) who does not satisfy the household
maintenance test of subsection (a) for any pe-
riod, but
‘‘(B) whose principal place of abode for
such period is also the principal place of abode
of any qualifying individual,
then such taxpayer shall be treated as satis-
fying such test for such period but the amount
of credit allowable under this section with re-
spect to such individual shall be determined by
allowing only 1⁄12 of the limitation under sub-
section (c) for each full month that the require-
ment of subparagraph (B) is met.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
147
SEC. 704. EMPLOYER-PROVIDED CHILD CARE SERVICES.
(a) GENERAL RULE.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
section:
‘‘SEC. 45F. EMPLOYER EXPENSES IN PROVIDING DEPEND-
ENT CARE SERVICES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the employer day care center credit determined under this
section for the taxable year is the amount determined
under subsection (b) with respect to each qualified day
care center of the taxpayer.
‘‘(b) CREDIT PER FACILITY.—For purposes of this
section—
‘‘(1) IN
GENERAL.—The amount determined
under this subsection for any taxable year with re-
spect to any qualified day care facility of the tax-
payer is 50 percent of the excess (if any) of—
‘‘(A) the expenses paid or incurred by the
taxpayer during the taxable year in providing
dependent care services at such facility for em-
ployees, over
‘‘(B) the aggregate amount received or ac-
crued during the taxable year by the employer
for such services.
148
‘‘(2) DEPRECIATION
ALLOWANCES.—For pur-
poses of paragraph (1), depreciation allowances
under section 167 shall be treated as expenses.
‘‘(c) QUALIFIED DAY CARE CENTER.—For purposes
of this section, the term ‘qualified day care center’ means
any day care center—
‘‘(1) which is operated by the taxpayer exclu-
sively for purposes of providing dependent care serv-
ices to employees,
‘‘(2) which is located on the business premises
of the taxpayer or on a site adjacent to such prem-
ises,
‘‘(3) which complies with all applicable laws and
regulations of a State or unit of local government,
and
‘‘(4) the operation of which is part of a depend-
ent care assistance program (as defined in section
129(d)).’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code is
amended by striking ‘‘plus’’ at the end of paragraph (13),
by striking the period at the end of paragraph (14) and
inserting ‘‘, plus’’, and by adding at the end thereof the
following new paragraph:
149
‘‘(15) the employer day care center credit deter-
mined under section 45F(a).’’
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code is amended by adding at the end thereof the
following new subsection:
‘‘(d) CREDIT FOR EMPLOYER DAY CARE CENTER
EXPENSES.—No deduction shall be allowed for that por-
tion of the expenses referred to in section 45F(b)(1)(A)
otherwise allowable as a deduction for the taxable year
which is equal to the amount of the credit determined for
such taxable year under section 45F(a).’’
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 45F. Employer expenses in providing dependent care serv-
ices.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
TITLE VIII—HEALTH CARE
SEC. 801. CREDIT FOR TAXPAYERS WITH LONG-TERM CARE
NEEDS.
(a) ALLOWANCE OF CREDIT.—
150
(1) IN GENERAL.—Section 24(a) of the Internal
Revenue Code of 1986 (relating to allowance of child
tax credit) is amended to read as follows:
‘‘(a) ALLOWANCE OF CREDIT.—There shall be al-
lowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of—
‘‘(1) $500 multiplied by the number of quali-
fying children of the taxpayer, plus
‘‘(2) $1,000 multiplied by the number of appli-
cable individuals with respect to whom the taxpayer
is an eligible caregiver for the taxable year.
In any case in which the applicable individual and the eli-
gible caregiver are the same individual, the credit allowed
by paragraph (2) with respect to such individual shall not
exceed the aggregate amount paid by the taxpayer during
the taxable year (not compensated for by insurance or oth-
erwise) for qualified long-term care services (as defined
in section 7702B(c)) for such individual.’’
(2) ADDITIONAL CREDIT FOR TAXPAYER WITH
3 OR MORE SEPARATE CREDIT AMOUNTS.—So much
of section 24(d) of such Code as precedes paragraph
(1)(A) thereof is amended to read as follows:
‘‘(d) ADDITIONAL CREDIT FOR TAXPAYERS WITH 3
OR MORE SEPARATE CREDIT AMOUNTS.—
151
‘‘(1) IN GENERAL.—If the sum of the number
of qualifying children of the taxpayer and the num-
ber of applicable individuals with respect to which
the taxpayer is an eligible caregiver is 3 or more for
any taxable year, the aggregate credits allowed
under subpart C shall be increased by the lesser
of—’’.
(3) CONFORMING AMENDMENTS.—
(A) The heading for section 32(n) of such
Code is amended by striking ‘‘CHILD’’ and in-
serting ‘‘FAMILY CARE’’.
(B) The heading for section 24 is amended
to read as follows:
‘‘SEC. 24. FAMILY CARE CREDIT.’’
(C) The table of sections for subpart A of
part IV of subchapter A of chapter 1 of such
Code is amended by striking the item relating
to section 24 and inserting the following new
item:
‘‘Sec. 24. Family care credit.’’.
(b) DEFINITIONS.—Section 24(c) of such Code (de-
fining qualifying child) is amended to read as follows:
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFYING CHILD.—
‘‘(A) IN GENERAL.—The term ‘qualifying
child’ means any individual if—
152
‘‘(i) the taxpayer is allowed a deduc-
tion under section 151 with respect to such
individual for the taxable year,
‘‘(ii) such individual has not attained
the age of 17 as of the close of the cal-
endar year in which the taxable year of the
taxpayer begins, and
‘‘(iii) such individual bears a relation-
ship to the taxpayer described in section
32(c)(3)(B).
‘‘(B) EXCEPTION FOR CERTAIN NONCITI-
ZENS.—The term ‘qualifying child’ shall not in-
clude any individual who would not be a de-
pendent if the first sentence of section
152(b)(3) were applied without regard to all
that follows ‘resident of the United States’.
‘‘(2) APPLICABLE INDIVIDUAL.—
‘‘(A) IN GENERAL.—The term ‘applicable
individual’ means, with respect to any taxable
year, any individual who has been certified, be-
fore the due date for filing the return of tax for
the taxable year (without extensions), by a phy-
sician (as defined in section 1861(r)(1) of the
Social Security Act) as being an individual with
153
long-term care needs described in subparagraph
(B) for a period—
‘‘(i) which is at least 180 consecutive
days, and
‘‘(ii) a portion of which occurs within
the taxable year.
Such term shall not include any individual oth-
erwise meeting the requirements of the pre-
ceding sentence unless within the 391⁄2 month
period ending on such due date (or such other
period as the Secretary prescribes) a physician
(as so defined) has certified that such indi-
vidual meets such requirements.
‘‘(B) INDIVIDUALS WITH LONG-TERM CARE
NEEDS.—An individual is described in this sub-
paragraph if the individual meets any of the fol-
lowing requirements:
‘‘(i) The individual is at least 6 years
of age and—
‘‘(I) is unable to perform (with-
out substantial assistance from an-
other individual) at least 3 activities
of daily living (as defined in section
7702B(c)(2)(B)) due to a loss of
functional capacity, or
154
‘‘(II) requires substantial super-
vision to protect such individual from
threats to health and safety due to se-
vere cognitive impairment and is un-
able to preform, without reminding or
cuing assistance, at least 1 activity of
at least 1 activity of daily living (as so
defined) or to the extent provided in
regulations prescribed by the Sec-
retary (in consultation with the Sec-
retary of Health and Human Serv-
ices), is unable to engage in age ap-
propriate activities.
‘‘(ii) The individual is at least 2 but
not 6 years of age and is unable due to a
loss of functional capacity to perform
(without substantial assistance from an-
other individual) at least 2 of the following
activities: eating, transferring, or mobility.
‘‘(iii) The individual is under 2 years
of age and requires specific durable med-
ical equipment by reason of a severe health
condition or requires a skilled practitioner
trained to address the individual’s condi-
155
tion to be available if the individual’s par-
ents or guardians are absent.
‘‘(3) ELIGIBLE CAREGIVER.—
‘‘(A) IN GENERAL.—A taxpayer shall be
treated as an eligible caregiver for any taxable
year with respect to the following individuals:
‘‘(i) The taxpayer.
‘‘(ii) The taxpayer’s spouse.
‘‘(iii) An individual with respect to
whom the taxpayer is allowed a deduction
under section 151 for the taxable year.
‘‘(iv) An individual who would be de-
scribed in clause (iii) for the taxable year
if section 151(c)(1)(A) were applied by
substituting for the exemption amount an
amount equal to the sum of the exemption
amount, the standard deduction under sec-
tion 63(c)(2)(C), and any additional stand-
ard deduction under section 63(c)(3) which
would be applicable to the individual if
clause (iii) applied.
‘‘(v) An individual who would be de-
scribed in clause (iii) for the taxable year
if—
156
‘‘(I) the requirements of clause
(iv) are met with respect to the indi-
vidual, and
‘‘(II) the requirements of sub-
paragraph (B) are met with respect to
the individual in lieu of the support
test of section 152(a).
‘‘(B) RESIDENCY
TEST.—The require-
ments of this subparagraph are met if an indi-
vidual has as his principal place of abode the
home of the taxpayer and—
‘‘(i) in the case of an individual who
is an ancestor or descendant of the tax-
payer or the taxpayer’s spouse, is a mem-
ber of the taxpayer’s household for over
half the taxable year, or
‘‘(ii) in the case of any other indi-
vidual, is a member of the taxpayer’s
household for the entire taxable year.
‘‘(C) SPECIAL RULES WHERE MORE THAN
1 ELIGIBLE CAREGIVER.—
‘‘(i) IN GENERAL.—If more than 1 in-
dividual is an eligible caregiver with re-
spect to the same applicable individual for
taxable years ending with or within the
157
same calendar year, a taxpayer shall be
treated as the eligible caregiver if each
such individual (other than the taxpayer)
files a written declaration (in such form
and manner as the Secretary may pre-
scribe) that such individual will not claim
such applicable individual for the credit
under this section.
‘‘(ii) NO AGREEMENT.—If each indi-
vidual required under clause (i) to file a
written declaration under clause (i) does
not do so, the individual with the highest
modified adjusted gross income (as defined
in section 32(c)(5)) shall be treated as the
eligible caregiver.
‘‘(iii) MARRIED
INDIVIDUALS
FILING
SEPARATELY.—In the case of married indi-
viduals filing separately, the determination
under this subparagraph as to whether the
husband or wife is the eligible caregiver
shall be made under the rules of clause (ii)
(whether or not 1 of them has filed a writ-
ten declaration under clause (i)).’’.
(c) IDENTIFICATION REQUIREMENTS.—
158
(1) IN GENERAL.—Section 24(e) of such Code
is amended by adding at the end the following new
sentence: ‘‘No credit shall be allowed under this sec-
tion to a taxpayer with respect to any applicable in-
dividual unless the taxpayer includes the name and
taxpayer identification number of such individual,
and the identification number of the physician certi-
fying such individual, on the return of tax for the
taxable year.’’.
(2) ASSESSMENT.—Section 6213(g)(2)(I) of
such Code is amended—
(A) by inserting ‘‘or physician identifica-
tion’’ after ‘‘correct TIN’’, and
(B) by striking ‘‘child’’ and inserting
‘‘family care’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 1999.
SEC. 802. CREDIT FOR EMPLOYER HEALTH CARE COSTS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
159
‘‘SEC. 45G. CREDIT TO EMPLOYERS MAINTAINING SELF-IN-
SURED HEALTH PLAN FOR COST OF PRO-
VIDING HEALTH COVERAGE FOR EMPLOY-
EES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
in the case of an eligible employer, the health coverage
cost credit determined under this section for the taxable
year is an amount equal to 3 percent of the amount paid
or incurred by the taxpayer during the taxable year for
health coverage for such employer’s employees and their
spouses and dependents.
‘‘(b) ELIGIBLE EMPLOYER.—For purposes of this
section, the term ‘eligible employer’ means any employer
who, throughout the taxable year, maintains a group
health plan for such employer’s employees and their
spouses and dependents which is not provided through in-
surance.
‘‘(c) SPECIAL RULES.—
‘‘(1) ONLY
NONGOVERNMENTAL
COVERAGE
TAKEN INTO ACCOUNT.—Amounts paid or incurred
for coverage under Medicare or any other govern-
ment program shall not be taken into account under
subsection (a).
‘‘(2) DENIAL OF DOUBLE BENEFIT.—No deduc-
tion shall be allowed for that portion of the amount
taken into account under subsection (a) (which is
160
otherwise allowable as a deduction for the taxable
year) equal to the amount of the credit determined
for such taxable year under subsection (a).’’
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—
(1) IN GENERAL.—Subsection (b) of section 38
of such Code is amended by striking ‘‘plus’’ at the
end of paragraph (14), by striking the period at the
end of paragraph (15) and inserting ‘‘, plus’’, and
by adding at the end the following new paragraph:
‘‘(16) in the case of a eligible employer (as de-
fined in section 45G(b)), the health coverage cost
credit determined under section 45G(a).’’
(2) DENIAL OF CARRYBACKS TO PRE-EFFEC-
TIVE DATE YEARS.—Subsection (d) of section 39 of
such Code is amended by adding at the end the fol-
lowing new paragraph:
‘‘(11) NO CARRYBACK OF SECTION 45G CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the health coverage cost credit determined
under section 45G may be carried back to a taxable
year beginning on or before the date of the enact-
ment of section 45G.’’
161
(c) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 45G. Credit to employers maintaining self-insured health
plan for cost of providing health coverage for em-
ployees.’’
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 803. EMERGENCY MEDICAL SERVICES ENHANCEMENT
ACT.
(a) GENERAL RULE.—Subsection (e) of section 150
of the Internal Revenue Code of 1986 is amended to read
as follows:
‘‘(e) BONDS OF CERTAIN VOLUNTEER FIRE DEPART-
MENTS OR EMERGENCY SERVICE ORGANIZATIONS.—For
purposes of this part and section 103—
‘‘(1) IN GENERAL.—A bond of a volunteer fire
or other emergency services organization shall be
treated as a bond of a political subdivision of a State
if—
‘‘(A) such organization is a qualified volun-
teer fire or other emergency services organiza-
tion with respect to an area within the jurisdic-
tion of such political subdivision, and
162
‘‘(B) such bond is issued as part of an
issue 95 percent or more of the net proceeds of
which are to be used for the acquisition, con-
struction, reconstruction, or improvement of—
‘‘(i) a firehouse or other building used
or to be used by such organization in pro-
viding qualified services (including land
which is functionally related and subordi-
nate thereto), or
‘‘(ii) a firetruck, ambulance, or other
vehicle used or to be used by such organi-
zation in providing qualified services.
‘‘(2) QUALIFIED VOLUNTEER FIRE OR OTHER
EMERGENCY
SERVICES
ORGANIZATION.—For pur-
poses of this subsection, the term ‘qualified volun-
teer fire or other emergency services organization’
means, with respect to a political subdivision of a
State, any organization—
‘‘(A) which is organized and operated to
provide qualified services for persons in an area
(within the jurisdiction of such political subdivi-
sion) which is not provided with any other
qualified services of the type provided by such
organization, and
163
‘‘(B) which is required (by written agree-
ment) by the political subdivision to furnish
qualified services in such area.
For purposes of subparagraph (A), other qualified
services provided in an area shall be disregarded in
determining whether an organization is a qualified
volunteer fire or other emergency services organiza-
tion if such other qualified services are provided by
a qualified volunteer fire or other emergency services
organization (determined with the application of this
sentence) and such organization and the provider of
such other services have been continuously providing
qualified services to such area since January 1,
1999.
‘‘(3) TREATMENT AS PRIVATE ACTIVITY BONDS
ONLY FOR CERTAIN PURPOSES.—Bonds which are
part of an issue which meets the requirements of
paragraph (1) shall not be treated as private activity
bonds except for purposes of sections 147(f) and
149(d).
‘‘(4) QUALIFIED
SERVICES.—For purposes of
this subsection, the term ‘qualified services’ means
any firefighting, rescue, or emergency medical serv-
ices.’’
164
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to obligations issued after the
date of the enactment of this Act.
SEC. 804. DEDUCTION FOR HEALTH INSURANCE COSTS FOR
SELF-EMPLOYED INDIVIDUALS.
(a) IN GENERAL.—Paragraph (1) of section 162(l)
of the Internal Revenue Code of 1986 is amended to read
as follows:
‘‘(1) ALLOWANCE OF DEDUCTION.—In the case
of an individual who is an employee within the
meaning of section 401(c)(1), there shall be allowed
as a deduction under this section an amount equal
to 100 percent of the amount paid during the tax-
able year for insurance which constitutes medical
care for the taxpayer, his spouse, and dependents.’’
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to taxable years beginning after
December 31, 1998.
TITLE IX—HOUSING
SEC. 901. EXTENSION OF FIRST-TIME DISTRICT OF COLUM-
BIA HOME BUYER TAX CREDIT.
Subsection (i) of section 1400C of the Internal Rev-
enue Code of 1986 is amended by striking ‘‘2001’’ and
inserting ‘‘2006’’.
165
SEC. 902. INCREASE STATE CEILING IN LOW-INCOME HOUS-
ING TAX CREDIT.
(a) IN GENERAL.—Clause (i) of section 42(h)(3)(C)
of the Internal Revenue Code of 1986 (relating to State
housing credit ceiling) is amended by striking ‘‘$1.25’’ and
inserting ‘‘$1.75’’.
(b) ADJUSTMENT
OF
STATE
CEILING
FOR
IN-
CREASES IN COST-OF-LIVING.—Paragraph (3) of section
42(h) of such Code (relating to housing credit dollar
amount for agencies) is amended by adding at the end
the following new subparagraph:
‘‘(H) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of a
calendar year after 2000, the dollar
amount contained in subparagraph (C)(i)
shall be increased by an amount equal to—
‘‘(I) such dollar amount, multi-
plied by
‘‘(II) the cost-of-living adjust-
ment determined under section 1(f)(3)
for such calendar year by substituting
‘calendar year 1999’ for ‘calendar
year 1992’ in subparagraph (B) there-
of.
‘‘(ii) ROUNDING.—If any increase
under clause (i) is not a multiple of 5
166
cents, such increase shall be rounded to
the next lowest multiple of 5 cents.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to calendar years after 1999.
TITLE X—RESEARCH AND
BUSINESS
SEC. 1001. INCREASE IN EXPENSE TREATMENT FOR SMALL
BUSINESSES.
(a) GENERAL RULE.—Paragraph (1) of section
179(b) of the Internal Revenue Code of 1986 (relating to
dollar limitation) is amended to read as follows:
‘‘(1) DOLLAR LIMITATION.—The aggregate cost
which may be taken into account under subsection
(a) for any taxable year shall not exceed $25,000.’’
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 1999.
SEC. 1002. MEDICAL INNOVATION TAX CREDIT.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
inserting after section 41 the following:
‘‘SEC. 41A. CREDIT FOR MEDICAL INNOVATION EXPENSES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the medical innovation credit determined under this sec-
167
tion for the taxable year shall be an amount equal to 20
percent of the excess (if any) of—
‘‘(1) the qualified medical innovation expenses
for the taxable year, over
‘‘(2) the medical innovation base period
amount.
‘‘(b) 
QUALIFIED
MEDICAL
INNOVATION
EX-
PENSES.—For purposes of this section—
‘‘(1) IN GENERAL.—The term ‘qualified medical
innovation expenses’ means the amounts which are
paid or incurred by the taxpayer during the taxable
year directly or indirectly to any qualified academic
institution for clinical testing research activities.
‘‘(2) CLINICAL
TESTING
RESEARCH
ACTIVI-
TIES.—
‘‘(A) IN
GENERAL.—The term ‘clinical
testing research activities’ means human clinical
testing conducted at any qualified academic in-
stitution in the development of any product,
which occurs before—
‘‘(i) the date on which an application
with respect to such product is approved
under section 505(b), 506, or 507 of the
Federal Food, Drug, and Cosmetic Act,
168
‘‘(ii) the date on which a license for
such product is issued under section 351 of
the Public Health Service Act, or
‘‘(iii) the date classification or ap-
proval of such product which is a device in-
tended for human use is given under sec-
tion 513, 514, or 515 of the Federal Food,
Drug, and Cosmetic Act.
‘‘(B) 
PRODUCT.—The 
term 
‘product’
means any drug, biologic, or medical device.
‘‘(3) QUALIFIED ACADEMIC INSTITUTION.—The
term ‘qualified academic institution’ means any of
the following institutions:
‘‘(A) 
EDUCATIONAL
INSTITUTION.—A
qualified organization described in section
170(b)(1)(A)(iii) which is owned or affiliated
with an institution of higher education as de-
scribed in section 3304(f).
‘‘(B) TEACHING
HOSPITAL.—A teaching
hospital which—
‘‘(i) is publicly supported or owned by
an 
organization 
described 
in 
section
501(c)(3), and
169
‘‘(ii) is affiliated with an organization
meeting the requirements of subparagraph
(A).
‘‘(C) FOUNDATION.—A medical research
organization described in section 501(c)(3)
(other than a private foundation) which is affili-
ated with, or owned by—
‘‘(i) an organization meeting the re-
quirements of subparagraph (A), or
‘‘(ii) a teaching hospital meeting the
requirements of subparagraph (B).
‘‘(D) 
CHARITABLE
RESEARCH
HOS-
PITAL.—A hospital that is designated as a can-
cer center by the National Cancer Institute.
‘‘(4) EXCLUSION
FOR
AMOUNTS
FUNDED
BY
GRANTS, ETC.—The term ‘qualified medical innova-
tion expenses’ shall not include any amount to the
extent such amount is funded by any grant, con-
tract, or otherwise by another person (or any gov-
ernmental entity).
‘‘(c) 
MEDICAL
INNOVATION
BASE
PERIOD
AMOUNT.—For purposes of this section, the term ‘medical
innovation base period amount’ means the average annual
qualified medical innovation expenses paid by the taxpayer
during the 3-taxable year period ending with the taxable
170
year immediately preceding the first taxable year of the
taxpayer beginning after December 31, 1998.
‘‘(d) SPECIAL RULES.—
‘‘(1) LIMITATION ON FOREIGN TESTING.—No
credit shall be allowed under this section with re-
spect to any clinical testing research activities con-
ducted outside the United States.
‘‘(2) CERTAIN
RULES
MADE
APPLICABLE.—
Rules similar to the rules of subsections (f) and (g)
of section 41 shall apply for purposes of this section.
‘‘(3) ELECTION.—This section shall apply to
any taxpayer for any taxable year only if such tax-
payer elects to have this section apply for such tax-
able year.
‘‘(4) COORDINATION
WITH
CREDIT
FOR
IN-
CREASING
RESEARCH
EXPENDITURES
AND
WITH
CREDIT FOR CLINICAL TESTING EXPENSES FOR CER-
TAIN DRUGS FOR RARE DISEASES.—Any qualified
medical innovation expense for a taxable year to
which an election under this section applies shall not
be taken into account for purposes of determining
the credit allowable under section 41 or 45C for
such taxable year.
171
‘‘(e) TERMINATION.—This section shall not apply to
any expense paid or incurred after the date specified in
section 41(h)(1)(B).’’.
(b) CREDIT TO BE PART OF GENERAL BUSINESS
CREDIT.—
(1) IN GENERAL.—Section 38(b) of such Code
(relating to current year business credits) is amend-
ed by striking ‘‘plus’’ at the end of paragraph (15),
by striking the period at the end of paragraph (16)
and inserting ‘‘, plus’’, and by adding at the end the
following:
‘‘(17) the medical innovation expenses credit
determined under section 41A(a).’’.
(2) TRANSITION RULE.—Section 39(d) of such
Code is amended by adding at the end the following
new paragraph:
‘‘(12) NO CARRYBACK OF SECTION 41A CREDIT
BEFORE
ENACTMENT.—No portion of the unused
business credit for any taxable year which is attrib-
utable to the medical innovation credit determined
under section 41A may be carried back to a taxable
year beginning before January 1, 1999.’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code is amended by adding at the end the following
new subsection:
172
‘‘(d) CREDIT FOR INCREASING MEDICAL INNOVA-
TION EXPENSES.—
‘‘(1) IN GENERAL.—No deduction shall be al-
lowed for that portion of the qualified medical inno-
vation expenses (as defined in section 41A(b)) other-
wise allowable as a deduction for the taxable year
which is equal to the amount of the credit deter-
mined for such taxable year under section 41A(a).
‘‘(2) CERTAIN RULES TO APPLY.—Rules similar
to the rules of paragraphs (2), (3), and (4) of sub-
section (c) shall apply for purposes of this sub-
section.’’
(d) DEDUCTION FOR UNUSED PORTION OF CRED-
IT.—Section 196(c) of such Code (defining qualified busi-
ness credits) is amended by redesignating paragraphs (5)
through (8) as paragraphs (6) through (9), respectively,
and by inserting after paragraph (4) the following new
paragraph:
‘‘(5) the medical innovation expenses credit de-
termined under section 41A(a) (other than such
credit determined under the rules of section
280C(d)(2)),’’.
(e) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
174
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid or incurred after
June 30, 1999.
TITLE XI—RETIREMENT
SECURITY
SEC. 1101. ADJUSTMENT IN MONTHLY EXEMPT AMOUNT
FOR PURPOSES OF THE SOCIAL SECURITY
EARNINGS TEST.
(a) INCREASE IN MONTHLY EXEMPT AMOUNT FOR
INDIVIDUALS
WHO
HAVE
ATTAINED
RETIREMENT
AGE.—Section 203(f)(8)(D) of the Social Security Act (42
U.S.C. 403(f)(8)(D)) is amended—
(1) in clause (iii), by inserting ‘‘and’’ at the
end; and
(2) by striking clauses (iv) through (vii) and in-
serting the following new clause:
‘‘(iv) for each month of any taxable
year ending after 1999 and before 2001,
$2,500.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 203(f)(8)(B)(ii) of such Act (42
U.S.C. 403(f)(8)(B)(ii)) is amended—
(A) by striking ‘‘after 2001 and before
2003’’ and inserting ‘‘after 1999 and before
2001’’; and
175
(B) in subclause (II), by striking ‘‘2001’’
and inserting ‘‘1998’’.
(2) The second sentence of section 223(d)(4)(A)
of such Act (42 U.S.C. 423(d)(4)(A)) is amended by
inserting ‘‘and section 1101 of the Pro-Family, Pro-
Growth, Pro-Reform Tax Reduction Act of 1999’’
after ‘‘1996’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to taxable years begin-
ning after 1999.
SEC. 1102. SMALL BUSINESS CREDIT FOR PENSION PLAN
START-UP COSTS.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45H. SMALL EMPLOYER PENSION PLAN START-UP
COSTS.
‘‘(a) GENERAL RULE.—For purposes of section 38,
in the case of an eligible employer, the small employer pen-
sion plan start-up cost credit determined under this sec-
tion for any taxable year is an amount equal to 50 percent
of the qualified start-up costs paid or incurred by the tax-
payer during the taxable year.
176
‘‘(b) DOLLAR LIMITATION.—The amount of the cred-
it determined under this section for any taxable year shall
not exceed—
‘‘(1) $1,000 for the first taxable year ending
after the date the employer established the qualified
employer plan to which such costs relate,
‘‘(2) $500 for each of the second and third tax-
able years ending after such date, and
‘‘(3) zero for each taxable year thereafter.
‘‘(c) ELIGIBLE EMPLOYER.—For purposes of this
section—
‘‘(1) IN
GENERAL.—The term ‘eligible em-
ployer’ has the meaning given such term by section
408(p)(2)(C)(i).
‘‘(2) EMPLOYERS
MAINTAINING
QUALIFIED
PLANS
DURING
1998
NOT
ELIGIBLE.—Such term
shall not include an employer if such employer (or
any predecessor employer) maintained a qualified
plan (as defined in section 408(p)(2)(D)(ii)) with re-
spect to which contributions were made, or benefits
were accrued, for service in 1998. If only individuals
other than employees described in subparagraph (A)
or (B) of section 410(b)(3) are eligible to participate
in the qualified employer plan referred to in sub-
section (d)(1), then the preceding sentence shall be
177
applied without regard to any qualified plan in
which only employees so described are eligible to
participate.
‘‘(d) OTHER DEFINITIONS.—For purposes of this
section—
‘‘(1) QUALIFIED START-UP COSTS.—
‘‘(A) IN
GENERAL.—The term ‘qualified
start-up costs’ means any ordinary and nec-
essary expenses of an eligible employer which—
‘‘(i) are paid or incurred in connection
with the establishment of a qualified em-
ployer plan in which at least 2 individuals
are eligible to participate, and
‘‘(ii) are of a nonrecurring nature.
‘‘(B) PLAN
MUST
BE
ESTABLISHED
BE-
FORE JANUARY 1, 2002.—Such term shall not
include any expense in connection with a plan
established after December 31, 2001.
‘‘(2) QUALIFIED EMPLOYER PLAN.—The term
‘qualified employer plan’ has the meaning given to
such term by section 4972(d).
‘‘(e) 
SPECIAL
RULES.—For 
purposes 
of 
this
section—
‘‘(1) AGGREGATION RULES.—All persons treat-
ed as a single employer under subsection (a) or (b)
178
of section 52, or subsection (n) or (o) of section 414,
shall be treated as 1 person.
‘‘(2) DISALLOWANCE OF DEDUCTION.—No de-
duction shall be allowable under this chapter for any
qualified start-up costs for which a credit is deter-
mined under subsection (a).
‘‘(3) ELECTION NOT TO CLAIM CREDIT.—This
section shall not apply to a taxpayer for any taxable
year if such taxpayer elects to have this section not
apply for such taxable year.’’.
(b) CREDIT ALLOWED AS PART OF GENERAL BUSI-
NESS CREDIT.—Section 38(b) of such Code (defining cur-
rent year business credit) is amended by striking ‘‘plus’’
at the end of paragraph (16), by striking the period at
the end of paragraph (17) and inserting ‘‘, plus’’, and by
adding at the end the following new paragraph:
‘‘(18) in the case of an eligible employer (as de-
fined in section 45H(c)), the small employer pension
plan start-up cost credit determined under section
45H(a).’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 39(d) of such Code is amended by
adding at the end the following new paragraph:
‘‘(13) NO
CARRYBACK
OF
SMALL
EMPLOYER
PENSION PLAN START-UP COST CREDIT BEFORE EF-
179
FECTIVE DATE.—No portion of the unused business
credit for any taxable year which is attributable to
the small employer pension plan start-up cost credit
determined under section 45H may be carried back
to a taxable year ending on or before the date of the
enactment of section 45H.’’.
(2) The table of sections for subpart D of part
IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following new
item:
‘‘Sec. 45H. Small employer pension plan start-up costs.’’.
(d) EFFECTIVE DATE.—The amendments made by
this section shall apply to costs paid or incurred in taxable
years ending after the date of the enactment of this Act.
SEC. 1103. INCREASE IN TAXPAYER IRA CONTRIBUTIONS.
(a) INCREASE IN MAXIMUM AMOUNT OF DEDUC-
TION.—Subparagraph (A) of section 219(b)(1) of the In-
ternal Revenue Code of 1986 (relating to maximum
amount of deduction) is amended by striking ‘‘$2,000’’
and inserting ‘‘$5,000’’.
(b) 
CONFORMING
AMENDMENTS.—Subsections
(a)(1), (b)(2), (j), and (p)(8) of section 408 of such Code
are each amended by striking ‘‘$2,000’’ each place it ap-
pears and inserting ‘‘$5,000’’.