exempt status application materials shall be
provided to such individual without charge
other than a reasonable fee for any reproduc-
tion and mailing costs.
The request described in subparagraph (B) must be
made in person or in writing. If such request is
made in person, such copy shall be provided imme-
diately and, if made in writing, shall be provided
within 30 days.
‘‘(2) 3-YEAR
LIMITATION
ON
INSPECTION
OF
RETURNS.—Paragraph (1) shall apply to an annual
return filed under section 6033 only during the 3-
year period beginning on the last day prescribed for
filing such return (determined with regard to any
extension of time for filing).
‘‘(3) EXCEPTIONS FROM DISCLOSURE REQUIRE-
MENT.—
‘‘(A) NONDISCLOSURE OF CONTRIBUTORS,
ETC.—Paragraph (1) shall not require the dis-
closure of the name or address of any contribu-
tor to the organization. In the case of an orga-
nization described in section 501(d), subpara-
graph (A) shall not require the disclosure of the
copies referred to in section 6031(b) with re-
spect to such organization.
‘‘(B) NONDISCLOSURE OF CERTAIN OTHER
INFORMATION.—Paragraph (1) shall not re-
quire the disclosure of any information if the
Secretary withheld such information from pub-
lic inspection under subsection (a)(1)(D).
‘‘(4) LIMITATION
ON
PROVIDING
COPIES.—
Paragraph (1)(B) shall not apply to any request if,
in accordance with regulations promulgated by the
Secretary, the organization has made the requested
documents widely available, or the Secretary deter-
mines, upon application by an organization, that
such request is part of a harassment campaign and
that compliance with such request is not in the pub-
lic interest.
‘‘(5) EXEMPT
STATUS
APPLICATION
MATE-
RIALS.—For purposes of paragraph (1), the term
‘exempt status applicable materials’ means the appli-
cation for recognition of exemption under section
501 and any papers submitted in support of such
application and any letter or other document issued
by the Internal Revenue Service with respect to such
application.’’.
(2) CONFORMING AMENDMENTS.—
(A) Subsection (c) of section 6033 is
amended by adding ‘‘and’’ at the end of para-
graph (1), by striking paragraph (2), and by re-
designating paragraph (3) as paragraph (2).
(B) 
Subparagraph 
(C) 
of 
section
6652(c)(1) is amended by striking ‘‘subsection
(d) or (e)(1) of section 6104 (relating to public
inspection of annual returns)’’ and inserting
‘‘section 6104(d) with respect to any annual re-
turn’’.
(C) 
Subparagraph 
(D) 
of 
section
6652(c)(1) is amended by striking ‘‘section
6104(e)(2) (relating to public inspection of ap-
plications for exemption)’’ and inserting ‘‘sec-
tion 6104(d) with respect to any exempt status
application materials (as defined in such sec-
tion)’’.
(D) Section 6685 is amended by striking
‘‘or (e)’’.
(E) Section 7207 is amended by striking
‘‘or (e)’’.
(3) EFFECTIVE DATE.—
(A) IN GENERAL.—Except as provided in
subparagraph (B), the amendments made by
this subsection shall apply to requests made
after the later of December 31, 1998, or the
60th day after the Secretary of the Treasury
first issues the regulations referred to such sec-
tion 6104(d)(4) of the Internal Revenue Code
of 1986, as amended by this section.
(B) PUBLICATION OF ANNUAL RETURNS.—
Section 6104(d) of such Code, as in effect be-
fore the amendments made by this subsection,
shall not apply to any return the due date for
which is after the date such amendments take
effect under subparagraph (A).
SEC. 105. SUBPART F EXEMPTION FOR ACTIVE FINANCING
INCOME.
(a) INCOME DERIVED FROM BANKING, FINANCING,
OR SIMILAR BUSINESSES.—Section 954(h) (relating to in-
come derived in the active conduct of banking, financing,
or similar businesses) is amended to read as follows:
‘‘(h) SPECIAL RULE FOR INCOME DERIVED IN THE
ACTIVE CONDUCT OF BANKING, FINANCING, OR SIMILAR
BUSINESSES.—
‘‘(1) IN GENERAL.—For purposes of subsection
(c)(1), foreign personal holding company income
shall not include qualified banking or financing in-
come of an eligible controlled foreign corporation.
‘‘(2) ELIGIBLE
CONTROLLED
FOREIGN
COR-
PORATION.—For purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘eligible con-
trolled foreign corporation’ means a controlled
foreign corporation which—
‘‘(i) is predominantly engaged in the
active conduct of a banking, financing, or
similar business, and
‘‘(ii) conducts substantial activity with
respect to such business.
‘‘(B) PREDOMINANTLY ENGAGED.—A con-
trolled foreign corporation shall be treated as
predominantly engaged in the active conduct of
a banking, financing, or similar business if—
‘‘(i) more than 70 percent of the gross
income of the controlled foreign corpora-
tion is derived directly from the active and
regular conduct of a lending or finance
business from transactions with customers
which are not related persons,
‘‘(ii) it is engaged in the active con-
duct of a banking business and is an insti-
tution licensed to do business as a bank in
the United States (or is any other corpora-
tion not so licensed which is specified by
the Secretary in regulations), or
‘‘(iii) it is engaged in the active con-
duct of a securities business and is reg-
istered as a securities broker or dealer
under section 15(a) of the Securities Ex-
change Act of 1934 or is registered as a
Government securities broker or dealer
under section 15C(a) of such Act (or is
any other corporation not so registered
which is specified by the Secretary in regu-
lations).
‘‘(3) QUALIFIED BANKING OR FINANCING IN-
COME.—For purposes of this subsection—
‘‘(A) IN
GENERAL.—The term ‘qualified
banking or financing income’ means income of
an 
eligible 
controlled 
foreign 
corporation
which—
‘‘(i) is derived in the active conduct of
a banking, financing, or similar business
by—
‘‘(I) such eligible controlled for-
eign corporation, or
‘‘(II) a qualified business unit of
such eligible controlled foreign cor-
poration;
‘‘(ii) is derived from one or more
transactions—
‘‘(I) with customers located in a
country other than the United States,
and
‘‘(II) substantially all of the ac-
tivities in connection with which are
conducted directly by the corporation
or unit in its home country; and
‘‘(iii) is treated as earned by such cor-
poration or unit in its home country for
purposes of such country’s tax laws.
‘‘(B) LIMITATION
ON
NONBANKING
AND
NONSECURITIES
BUSINESSES.—No income of
an eligible controlled foreign corporation not de-
scribed in clause (ii) or (iii) of paragraph
(2)(B) (or of a qualified business unit of such
corporation) shall be treated as qualified bank-
ing or financing income unless more than 30
percent of such corporation’s or unit’s gross in-
come is derived directly from the active and
regular conduct of a lending or finance business
from transactions with customers which are not
related persons and which are located within
such corporation’s or unit’s home country.
‘‘(C) SUBSTANTIAL
ACTIVITY
REQUIRE-
MENT FOR CROSS BORDER INCOME.—The term
‘qualified banking or financing income’ shall
not include income derived from 1 or more
transactions with customers located in a coun-
try other than the home country of the eligible
controlled foreign corporation or a qualified
business unit of such corporation unless such
corporation or unit conducts substantial activity
with respect to a banking, financing, or similar
business in its home country.
‘‘(D) 
DETERMINATIONS
MADE
SEPA-
RATELY.—For purposes of this paragraph, the
qualified banking or financing income of an eli-
gible controlled foreign corporation and each
qualified business unit of such corporation shall
be determined separately for such corporation
and each such unit by taking into account—
‘‘(i) in the case of the eligible con-
trolled foreign corporation, only items of
income, deduction, gain, or loss and activi-
ties of such corporation not properly allo-
cable or attributable to any qualified busi-
ness unit of such corporation; and
‘‘(ii) in the case of a qualified busi-
ness unit, only items of income, deduction,
gain, or loss and activities properly alloca-
ble or attributable to such unit.
‘‘(4) LENDING
OR
FINANCE
BUSINESS.—For
purposes of this subsection, the term ‘lending or fi-
nance business’ means the business of—
‘‘(A) making loans;
‘‘(B) purchasing or discounting accounts
receivable, notes, or installment obligations;
‘‘(C) engaging in leasing (including enter-
ing into leases and purchasing, servicing, and
disposing of leases and leased assets);
‘‘(D) issuing letters of credit or providing
guarantees;
‘‘(E) providing charge and credit card
services; or
‘‘(F) rendering services or making facilities
available in connection with activities described
in subparagraphs (A) through (E) carried on
by—
‘‘(i) the corporation (or qualified busi-
ness unit) rendering services or making fa-
cilities available; or
‘‘(ii) another corporation (or qualified
business unit of a corporation) which is a
member of the same affiliated group (as
defined in section 1504, but determined
without regard to section 1504(b)(3)).
‘‘(5) OTHER
DEFINITIONS.—For purposes of
this subsection—
‘‘(A) CUSTOMER.—The term ‘customer’
means, with respect to any controlled foreign
corporation or qualified business unit, any per-
son which has a customer relationship with
such corporation or unit and which is acting in
its capacity as such.
‘‘(B) HOME
COUNTRY.—Except as pro-
vided in regulations—
‘‘(i) CONTROLLED FOREIGN CORPORA-
TION.—The term ‘home country’ means,
with respect to any controlled foreign cor-
poration, the country under the laws of
which the corporation was created or orga-
nized.
‘‘(ii) QUALIFIED
BUSINESS
UNIT.—
The term ‘home country’ means, with re-
spect to any qualified business unit, the
country in which such unit maintains its
principal office.
‘‘(C) LOCATED.—The determination of
where a customer is located shall be made
under rules prescribed by the Secretary.
‘‘(D) QUALIFIED
BUSINESS
UNIT.—The
term ‘qualified business unit’ has the meaning
given such term by section 989(a).
‘‘(E) RELATED PERSON.—The term ‘relat-
ed person’ has the meaning given such term by
subsection (d)(3).
‘‘(6) COORDINATION
WITH
EXCEPTION
FOR
DEALERS.—Paragraph (1) shall not apply to income
described in subsection (c)(2)(C)(ii) of a dealer in
securities (within the meaning of section 475) which
is an eligible controlled foreign corporation described
in paragraph (2)(B)(iii).
‘‘(7) ANTI-ABUSE RULES.—For purposes of ap-
plying this subsection and subsection (c)(2)(C)(ii)—
‘‘(A) there shall be disregarded any item of
income, gain, loss, or deduction with respect to
any transaction or series of transactions one of
the principal purposes of which is qualifying in-
come or gain for the exclusion under this sec-
tion, including any transaction or series of
transactions a principal purpose of which is the
acceleration or deferral of any item in order to
claim the benefits of such exclusion through the
application of this subsection;
‘‘(B) there shall be disregarded any item of
income, gain, loss, or deduction of an entity
which is not engaged in regular and continuous
transactions with customers which are not re-
lated persons;
‘‘(C) there shall be disregarded any item of
income, gain, loss, or deduction with respect to
any transaction or series of transactions utiliz-
ing, or doing business with—
‘‘(i) one or more entities in order to
satisfy any home country requirement
under this subsection, or
‘‘(ii) a special purpose entity or ar-
rangement, including a securitization, fi-
nancing, or similar entity or arrangement,
if one of the principal purposes of such trans-
action or series of transactions is qualifying in-
come or gain for the exclusion under this sub-
section; and
‘‘(D) a related person, an officer, a direc-
tor, or an employee with respect to any con-
trolled foreign corporation (or qualified business
unit) which would otherwise be treated as a
customer of such corporation or unit with re-
spect to any transaction shall not be so treated
if a principal purpose of such transaction is to
satisfy any requirement of this subsection.
‘‘(8) REGULATIONS.—The Secretary shall pre-
scribe such regulations as may be necessary or ap-
propriate to carry out the purposes of this sub-
section, 
subsection 
(c)(1)(B)(i), 
subsection
(c)(2)(C)(ii), and the last sentence of subsection
(e)(2).
‘‘(9) 
APPLICATION.—This 
subsection, 
sub-
section (c)(2)(C)(ii), and the last sentence of sub-
section (e)(2) shall apply only to the first taxable
year of a foreign corporation beginning after Decem-
ber 31, 1998, and before January 1, 2000, and to
taxable years of United States shareholders with or
within which such taxable year of such foreign cor-
poration ends.’’.
(b) INCOME
DERIVED
FROM
INSURANCE
BUSI-
NESS.—
(1) INCOME ATTRIBUTABLE TO ISSUANCE OR
REINSURANCE.—
(A) IN GENERAL.—Section 953(a) (defin-
ing insurance income) is amended to read as
follows:
‘‘(a) INSURANCE INCOME.—
‘‘(1) IN
GENERAL.—For purposes of section
952(a)(1), the term ‘insurance income’ means any
income which—
‘‘(A) is attributable to the issuing (or rein-
suring) of an insurance or annuity contract;
and
‘‘(B) would (subject to the modifications
provided by subsection (b)) be taxed under sub-
chapter L of this chapter if such income were
the income of a domestic insurance company.
‘‘(2) EXCEPTION.—Such term shall not include
any exempt insurance income (as defined in sub-
section (e)).’’.
(B) EXEMPT
INSURANCE
INCOME.—Sec-
tion 953 (relating to insurance income) is
amended by adding at the end the following
new subsection:
‘‘(e) EXEMPT INSURANCE INCOME.—For purposes of
this section—
‘‘(1) EXEMPT INSURANCE INCOME DEFINED.—
‘‘(A) IN GENERAL.—The term ‘exempt in-
surance income’ means income derived by a
qualifying insurance company which—
‘‘(i) is attributable to the issuing (or
reinsuring) of an exempt contract by such
company or a qualifying insurance com-
pany branch of such company; and
‘‘(ii) is treated as earned by such com-
pany or branch in its home country for
purposes of such country’s tax laws.
‘‘(B) EXCEPTION FOR CERTAIN ARRANGE-
MENTS.—Such term shall not include income
attributable to the issuing (or reinsuring) of an
exempt contract as the result of any arrange-
ment whereby another corporation receives a
substantially equal amount of premiums or
other consideration in respect of issuing (or re-
insuring) a contract which is not an exempt
contract.
‘‘(C) 
DETERMINATIONS
MADE
SEPA-
RATELY.—For purposes of this subsection and
section 954(i), the exempt insurance income
and exempt contracts of a qualifying insurance
company or any qualifying insurance company
branch of such company shall be determined
separately for such company and each such
branch by taking into account—
‘‘(i) in the case of the qualifying in-
surance company, only items of income, de-
duction, gain, or loss, and activities of such
company not properly allocable or attrib-
utable to any qualifying insurance com-
pany branch of such company; and
‘‘(ii) in the case of a qualifying insur-
ance company branch, only items of in-
come, deduction, gain, or loss and activities
properly allocable or attributable to such
unit.
‘‘(2) EXEMPT CONTRACT.—
‘‘(A) IN
GENERAL.—The term ‘exempt
contract’ means an insurance or annuity con-
tract issued or reinsured by a qualifying insur-
ance company or qualifying insurance company
branch in connection with property in, liability
arising out of activity in, or the lives or health
of residents of, a country other than the United
States.
‘‘(B) MINIMUM
HOME
COUNTRY
INCOME
REQUIRED.—
‘‘(i) IN GENERAL.—No contract of a
qualifying insurance company or of a
qualifying insurance company branch shall
be treated as an exempt contract unless
such company or branch derives more than
30 percent of its net written premiums
from exempt contracts (determined without
regard to this subparagraph)—
‘‘(I) which cover applicable home
country risks; and
‘‘(II) with respect to which no
policyholder, insured, annuitant, or
beneficiary is a related person (as de-
fined in section 954(d)(3)).
‘‘(ii) APPLICABLE
HOME
COUNTRY
RISKS.—The term ‘applicable home coun-
try risks’ means risks in connection with
property in, liability arising out of activity
in, or the lives or health of residents of,
the home country of the qualifying insur-
ance company or qualifying insurance com-
pany branch, as the case may be, issuing
or reinsuring the contract covering the
risks.
‘‘(C) SUBSTANTIAL
ACTIVITY
REQUIRE-
MENTS FOR CROSS BORDER RISKS.—A contract
issued by a qualifying insurance company or
qualifying insurance company branch which
covers risks other than applicable home country
risks (as defined in subparagraph (B)(ii)) shall
not be treated as an exempt contract unless
such company or branch, as the case may be—
‘‘(i) conducts substantial activity with
respect to an insurance business in its
home country; and
‘‘(ii) performs in its home country
substantially all of the activities necessary
to give rise to the income generated by
such contract.
‘‘(3) QUALIFYING INSURANCE COMPANY.—The
term ‘qualifying insurance company’ means any con-
trolled foreign corporation which—
‘‘(A) is subject to regulation as an insur-
ance (or reinsurance) company by its home
country, and is licensed, authorized, or regu-
lated by the applicable insurance regulatory
body for its home country to sell insurance, re-
insurance, or annuity contracts to persons other
than related persons (within the meaning of
section 954(d)(3)) in such home country;
‘‘(B) derives more than 50 percent of its
aggregate net written premiums from the
issuance or reinsurance by such controlled for-
eign corporation and each of its qualifying in-
surance company branches of contracts—
‘‘(i) covering applicable home country
risks (as defined in paragraph (2)) of such
corporation or branch, as the case may be;
and
‘‘(ii) with respect to which no policy-
holder, insured, annuitant, or beneficiary is
a related person (as defined in section
954(d)(3));
except that in the case of a branch, such pre-
miums shall only be taken into account to the
extent such premiums are treated as earned by
such branch in its home country for purposes of
such country’s tax laws; and
‘‘(C) is engaged in the insurance business
and would be subject to tax under subchapter
L if it were a domestic corporation.
‘‘(4) 
QUALIFYING
INSURANCE
COMPANY
BRANCH.—The term ‘qualifying insurance company
SEC. 106. DISCLOSURE OF RETURN INFORMATION ON IN-
COME CONTINGENT STUDENT LOANS.
Subparagraph (D) of section 6103(l)(13) (relating to
disclosure of return information to carry out income con-
tingent repayment of student loans) is amended by strik-
ing ‘‘September 30, 1998’’ and inserting ‘‘September 30,
2003’’.
Subtitle B—Generalized System of
Preferences
SEC. 111. EXTENSION OF GENERALIZED SYSTEM OF PREF-
ERENCES.
(a) EXTENSION OF DUTY-FREE TREATMENT UNDER
SYSTEM.—Section 505 of the Trade Act of 1974 (29
U.S.C. 2465) is amended by striking ‘‘June 30, 1998’’ and
inserting ‘‘December 31, 1999’’.
(b) RETROACTIVE APPLICATION FOR CERTAIN LIQ-
UIDATIONS AND RELIQUIDATIONS.—
(1) IN GENERAL.—Notwithstanding section 514
of the Tariff Act of 1930 or any other provision of
law, and subject to paragraph (2), any entry—
(A) of an article to which duty-free treat-
ment under title V of the Trade Act of 1974
would have applied if such title had been in ef-
fect during the period beginning on July 1,
1998, and ending on the day before the date of
the enactment of this Act; and