H. R. 4520—125
substances, pollutants, or contaminants which
complicate the expansion, redevelopment, or reuse
of the property given the property’s reasonably
anticipated future land uses or capacity for uses
of the property.
‘‘(II) The reasonably anticipated future land
uses or capacity for uses of the property are more
economically productive or environmentally bene-
ficial than the uses of the property in existence
on the date of the certification described in
subparagraph (C)(i). For purposes of the preceding
sentence, use of property as a landfill or other
hazardous waste facility shall not be considered
more economically productive or environmentally
beneficial.
‘‘(III) A remediation plan has been imple-
mented to bring the property into compliance with
all applicable local, State, and Federal environ-
mental laws, regulations, and standards and to
ensure that the remediation protects human health
and the environment.
‘‘(IV) The remediation plan described in sub-
clause (III), including any physical improvements
required to remediate the property, is either com-
plete or substantially complete, and, if substan-
tially complete, sufficient monitoring, funding,
institutional controls, and financial assurances
have been put in place to ensure the complete
remediation of the property in accordance with
the remediation plan as soon as is reasonably prac-
ticable after the sale, exchange, or other disposi-
tion of such property.
‘‘(V) Public notice and the opportunity for com-
ment on the request for certification was completed
before the date of such request. Such notice and
opportunity for comment shall be in the same form
and manner as required for public participation
required under section 117(a) of the Comprehen-
sive Environmental Response, Compensation, and
Liability Act of 1980 (as in effect on the date
of the enactment of this paragraph). For purposes
of this subclause, public notice shall include, at
a minimum, publication in a major local newspaper
of general circulation.
‘‘(iii) ATTACHMENT
TO
TAX
RETURNS.—A copy of
each of the requests for certification described in clause
(ii) of subparagraph (C) and this subparagraph shall
be included in the tax return of the eligible taxpayer
(and, where applicable, of the qualifying partnership)
for the taxable year during which the transfer occurs.
‘‘(iv) SUBSTANTIAL COMPLETION.—For purposes of
this subparagraph, a remedial action is substantially
complete when any necessary physical construction is
complete, all immediate threats have been eliminated,
and all long-term threats are under control.
‘‘(E) ELIGIBLE REMEDIATION EXPENDITURES.—For pur-
poses of this paragraph—
H. R. 4520—126
‘‘(i) IN GENERAL.—The term ‘eligible remediation
expenditures’ means, with respect to any qualifying
brownfield property, any amount paid or incurred by
the eligible taxpayer to an unrelated third person to
obtain a Phase I environmental site assessment of
the property, and any amount so paid or incurred
after the date of the certification described in subpara-
graph (C)(i) for goods and services necessary to obtain
a certification described in subparagraph (D)(i) with
respect to such property, including expenditures—
‘‘(I) to manage, remove, control, contain, abate,
or otherwise remediate a hazardous substance,
pollutant, or contaminant on the property,
‘‘(II) to obtain a Phase II environmental site
assessment of the property, including any expendi-
ture to monitor, sample, study, assess, or otherwise
evaluate the release, threat of release, or presence
of a hazardous substance, pollutant, or contami-
nant on the property,
‘‘(III) to obtain environmental regulatory cer-
tifications and approvals required to manage the
remediation and monitoring of the hazardous sub-
stance, pollutant, or contaminant on the property,
and
‘‘(IV) regardless of whether it is necessary to
obtain a certification described in subparagraph
(D)(i)(II), to obtain remediation cost-cap or stop-
loss coverage, re-opener or regulatory action cov-
erage, or similar coverage under environmental
insurance policies, or financial guarantees required
to manage such remediation and monitoring.
‘‘(ii) EXCEPTIONS.—Such term shall not include—
‘‘(I) any portion of the purchase price paid
or incurred by the eligible taxpayer to acquire
the qualifying brownfield property,
‘‘(II) environmental insurance costs paid or
incurred to obtain legal defense coverage, owner/
operator liability coverage, lender liability cov-
erage, professional liability coverage, or similar
types of coverage,
‘‘(III) any amount paid or incurred to the
extent such amount is reimbursed, funded, or
otherwise subsidized by grants provided by the
United States, a State, or a political subdivision
of a State for use in connection with the property,
proceeds of an issue of State or local government
obligations used to provide financing for the prop-
erty the interest of which is exempt from tax under
section 103, or subsidized financing provided
(directly or indirectly) under a Federal, State, or
local program provided in connection with the
property, or
‘‘(IV) any expenditure paid or incurred before
the date of the enactment of this paragraph.
H. R. 4520—127
For purposes of subclause (III), the Secretary may issue
guidance regarding the treatment of government-pro-
vided funds for purposes of determining eligible
remediation expenditures.
‘‘(F) DETERMINATION OF GAIN OR LOSS.—For purposes
of this paragraph, the determination of gain or loss shall
not include an amount treated as gain which is ordinary
income with respect to section 1245 or section 1250 prop-
erty, including amounts deducted as section 198 expenses
which are subject to the recapture rules of section 198(e),
if the taxpayer had deducted such amounts in the computa-
tion of its unrelated business taxable income.
‘‘(G) SPECIAL RULES FOR PARTNERSHIPS.—
‘‘(i) IN GENERAL.—In the case of an eligible tax-
payer which is a partner of a qualifying partnership
which acquires, remediates, and sells, exchanges, or
otherwise disposes of a qualifying brownfield property,
this paragraph shall apply to the eligible taxpayer’s
distributive share of the qualifying partnership’s gain
or loss from the sale, exchange, or other disposition
of such property.
‘‘(ii) QUALIFYING PARTNERSHIP.—The term ‘quali-
fying partnership’ means a partnership which—
‘‘(I) has a partnership agreement which satis-
fies the requirements of section 514(c)(9)(B)(vi) at
all times beginning on the date of the first certifi-
cation received by the partnership under subpara-
graph (C)(i),
‘‘(II) satisfies the requirements of subpara-
graphs (B)(i), (C), (D), and (E), if ‘qualified partner-
ship’ is substituted for ‘eligible taxpayer’ each place
it appears therein (except subparagraph (D)(iii)),
and
‘‘(III) is not an organization which would be
prevented from constituting an eligible taxpayer
by reason of subparagraph (B)(ii).
‘‘(iii) REQUIREMENT THAT TAX-EXEMPT PARTNER BE
A
PARTNER
SINCE
FIRST
CERTIFICATION.—This para-
graph shall apply with respect to any eligible taxpayer
which is a partner of a partnership which acquires,
remediates, and sells, exchanges, or otherwise disposes
of a qualifying brownfield property only if such eligible
taxpayer was a partner of the qualifying partnership
at all times beginning on the date of the first certifi-
cation received by the partnership under subparagraph
(C)(i) and ending on the date of the sale, exchange,
or other disposition of the property by the partnership.
‘‘(iv) REGULATIONS.—The Secretary shall prescribe
such regulations as are necessary to prevent abuse
of the requirements of this subparagraph, including
abuse through—
‘‘(I) the use of special allocations of gains or
losses, or
‘‘(II) changes in ownership of partnership
interests held by eligible taxpayers.
‘‘(H) SPECIAL RULES FOR MULTIPLE PROPERTIES.—
H. R. 4520—128
‘‘(i) IN GENERAL.—An eligible taxpayer or a quali-
fying partnership of which the eligible taxpayer is a
partner may make a 1-time election to apply this para-
graph to more than 1 qualifying brownfield property
by averaging the eligible remediation expenditures for
all such properties acquired during the election period.
If the eligible taxpayer or qualifying partnership makes
such an election, the election shall apply to all qualified
sales, exchanges, or other dispositions of qualifying
brownfield properties the acquisition and transfer of
which occur during the period for which the election
remains in effect.
‘‘(ii) ELECTION.—An election under clause (i) shall
be made with the eligible taxpayer’s or qualifying part-
nership’s timely filed tax return (including extensions)
for the first taxable year for which the taxpayer or
qualifying partnership intends to have the election
apply. An election under clause (i) is effective for the
period—
‘‘(I) beginning on the date which is the first
day of the taxable year of the return in which
the election is included or a later day in such
taxable year selected by the eligible taxpayer or
qualifying partnership, and
‘‘(II) ending on the date which is the earliest
of a date of revocation selected by the eligible
taxpayer or qualifying partnership, the date which
is 8 years after the date described in subclause
(I), or, in the case of an election by a qualifying
partnership of which the eligible taxpayer is a
partner, the date of the termination of the quali-
fying partnership.
‘‘(iii) REVOCATION.—An eligible taxpayer or quali-
fying partnership may revoke an election under clause
(i)(II) by filing a statement of revocation with a timely
filed tax return (including extensions). A revocation
is effective as of the first day of the taxable year
of the return in which the revocation is included or
a later day in such taxable year selected by the eligible
taxpayer or qualifying partnership. Once an eligible
taxpayer or qualifying partnership revokes the election,
the eligible taxpayer or qualifying partnership is ineli-
gible to make another election under clause (i) with
respect to any qualifying brownfield property subject
to the revoked election.
‘‘(I) RECAPTURE.—If an eligible taxpayer excludes gain
or loss from a sale, exchange, or other disposition of prop-
erty to which an election under subparagraph (H) applies,
and such property fails to satisfy the requirements of this
paragraph, the unrelated business taxable income of the
eligible taxpayer for the taxable year in which such failure
occurs shall be determined by including any previously
excluded gain or loss from such sale, exchange, or other
disposition allocable to such taxpayer, and interest shall
be determined at the overpayment rate established under
section 6621 on any resulting tax for the period beginning
with the due date of the return for the taxable year during
H. R. 4520—129
which such sale, exchange, or other disposition occurred,
and ending on the date of payment of the tax.
‘‘(J) RELATED
PERSONS.—For purposes of this para-
graph, a person shall be treated as related to another
person if—
‘‘(i) such person bears a relationship to such other
person described in section 267(b) (determined without
regard to paragraph (9) thereof), or section 707(b)(1),
determined by substituting ‘25 percent’ for ‘50 percent’
each place it appears therein, and
‘‘(ii) in the case such other person is a nonprofit
organization, if such person controls directly or
indirectly more than 25 percent of the governing body
of such organization.
‘‘(K) TERMINATION.—Except for purposes of deter-
mining the average eligible remediation expenditures for
properties acquired during the election period under
subparagraph (H), this paragraph shall not apply to any
property acquired by the eligible taxpayer or qualifying
partnership after December 31, 2009.’’.
(b) EXCLUSION FROM DEFINITION
OF DEBT-FINANCED PROP-
ERTY.—Section 514(b)(1) (defining debt-financed property) is
amended by striking ‘‘or’’ at the end of subparagraph (C), by striking
the period at the end of subparagraph (D) and inserting ‘‘; or’’,
and by inserting after subparagraph (D) the following new subpara-
graph:
‘‘(E) any property the gain or loss from the sale,
exchange, or other disposition of which would be excluded
by reason of the provisions of section 512(b)(18) in com-
puting the gross income of any unrelated trade or busi-
ness.’’.
(c) SAVINGS CLAUSE.—Nothing in the amendments made by
this section shall affect any duty, liability, or other requirement
imposed under any other Federal or State law. Notwithstanding
section 128(b) of the Comprehensive Environmental Response, Com-
pensation, and Liability Act of 1980, a certification provided by
the Environmental Protection Agency or an appropriate State
agency (within the meaning of section 198(c)(4) of the Internal
Revenue Code of 1986) shall not affect the liability of any person
under section 107(a) of such Act.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to any gain or loss on the sale, exchange, or other
disposition of any property acquired by the taxpayer after December
31, 2004.
SEC. 703. CIVIL RIGHTS TAX RELIEF.
(a) DEDUCTION ALLOWED WHETHER OR NOT TAXPAYER ITEMIZES
OTHER DEDUCTIONS.—Subsection (a) of section 62 (defining adjusted
gross income) is amended by inserting after paragraph (18) the
following new item:
‘‘(19) COSTS INVOLVING DISCRIMINATION SUITS, ETC.—Any
deduction allowable under this chapter for attorney fees and
court costs paid by, or on behalf of, the taxpayer in connection
with any action involving a claim of unlawful discrimination
(as defined in subsection (e)) or a claim of a violation of sub-
chapter III of chapter 37 of title 31, United States Code or
a claim made under section 1862(b)(3)(A) of the Social Security
H. R. 4520—130
Act (42 U.S.C. 1395y(b)(3)(A)). The preceding sentence shall
not apply to any deduction in excess of the amount includible
in the taxpayer’s gross income for the taxable year on account
of a judgment or settlement (whether by suit or agreement
and whether as lump sum or periodic payments) resulting
from such claim.’’.
(b) UNLAWFUL
DISCRIMINATION
DEFINED.—Section 62 is
amended by adding at the end the following new subsection:
‘‘(e) UNLAWFUL DISCRIMINATION DEFINED.—For purposes of sub-
section (a)(19), the term ‘unlawful discrimination’ means an act
that is unlawful under any of the following:
‘‘(1) Section 302 of the Civil Rights Act of 1991 (2 U.S.C.
1202).
‘‘(2) Section 201, 202, 203, 204, 205, 206, or 207 of the
Congressional Accountability Act of 1995 (2 U.S.C. 1311, 1312,
1313, 1314, 1315, 1316, or 1317).
‘‘(3) The National Labor Relations Act (29 U.S.C. 151 et
seq.).
‘‘(4) The Fair Labor Standards Act of 1938 (29 U.S.C.
201 et seq.).
‘‘(5) Section 4 or 15 of the Age Discrimination in Employ-
ment Act of 1967 (29 U.S.C. 623 or 633a).
‘‘(6) Section 501 or 504 of the Rehabilitation Act of 1973
(29 U.S.C. 791 or 794).
‘‘(7) Section 510 of the Employee Retirement Income Secu-
rity Act of 1974 (29 U.S.C. 1140).
‘‘(8) Title IX of the Education Amendments of 1972 (20
U.S.C. 1681 et seq.).
‘‘(9) The Employee Polygraph Protection Act of 1988 (29
U.S.C. 2001 et seq.).
‘‘(10) The Worker Adjustment and Retraining Notification
Act (29 U.S.C. 2102 et seq.).
‘‘(11) Section 105 of the Family and Medical Leave Act
of 1993 (29 U.S.C. 2615).
‘‘(12) Chapter 43 of title 38, United States Code (relating
to employment and reemployment rights of members of the
uniformed services).
‘‘(13) Section 1977, 1979, or 1980 of the Revised Statutes
(42 U.S.C. 1981, 1983, or 1985).
‘‘(14) Section 703, 704, or 717 of the Civil Rights Act
of 1964 (42 U.S.C. 2000e–2, 2000e–3, or 2000e–16).
‘‘(15) Section 804, 805, 806, 808, or 818 of the Fair Housing
Act (42 U.S.C. 3604, 3605, 3606, 3608, or 3617).
‘‘(16) Section 102, 202, 302, or 503 of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12112, 12132, 12182, or
12203).
‘‘(17) Any provision of Federal law (popularly known as
whistleblower protection provisions) prohibiting the discharge
of an employee, the discrimination against an employee, or
any other form of retaliation or reprisal against an employee
for asserting rights or taking other actions permitted under
Federal law.
‘‘(18) Any provision of Federal, State, or local law, or
common law claims permitted under Federal, State, or local
law—
‘‘(i) providing for the enforcement of civil rights,
or
H. R. 4520—131
‘‘(ii) regulating any aspect of the employment rela-
tionship, including claims for wages, compensation, or
benefits, or prohibiting the discharge of an employee,
the discrimination against an employee, or any other
form of retaliation or reprisal against an employee
for asserting rights or taking other actions permitted
by law.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to fees and costs paid after the date of the enactment
of this Act with respect to any judgment or settlement occurring
after such date.
SEC. 704. MODIFICATION OF CLASS LIFE FOR CERTAIN TRACK FACILI-
TIES.
(a) 7-YEAR PROPERTY.—Subparagraph (C) of section 168(e)(3)
(relating to classification of certain property) is amended by redesig-
nating clause (ii) as clause (iii) and by inserting after clause (i)
the following new clause:
‘‘(ii) any motorsports entertainment complex, and’’.
(b) DEFINITION.—Section 168(i) (relating to definitions and spe-
cial rules) is amended by adding at the end the following new
paragraph:
‘‘(15) MOTORSPORTS ENTERTAINMENT COMPLEX.—
‘‘(A) IN
GENERAL.—The term ‘motorsports entertain-
ment complex’ means a racing track facility which—
‘‘(i) is permanently situated on land, and
‘‘(ii) during the 36-month period following the first
day of the month in which the asset is placed in
service, hosts 1 or more racing events for automobiles
(of any type), trucks, or motorcycles which are open
to the public for the price of admission.
‘‘(B) ANCILLARY AND SUPPORT FACILITIES.—Such term
shall include, if owned by the taxpayer who owns the
complex and provided for the benefit of patrons of the
complex—
‘‘(i) ancillary facilities and land improvements in
support of the complex’s activities (including parking
lots, sidewalks, waterways, bridges, fences, and land-
scaping),
‘‘(ii) support facilities (including food and beverage
retailing, souvenir vending, and other nonlodging
accommodations), and
‘‘(iii) appurtenances associated with such facilities
and related attractions and amusements (including
ticket booths, race track surfaces, suites and hospitality
facilities, grandstands and viewing structures, props,
walls, facilities that support the delivery of entertain-
ment services, other special purpose structures,
facades, shop interiors, and buildings).
‘‘(C) EXCEPTION.—Such term shall not include any
transportation equipment, administrative services assets,
warehouses, administrative buildings, hotels, or motels.
‘‘(D) TERMINATION.—This paragraph shall not apply
to any property placed in service after December 31, 2007.’’.
(c) EFFECTIVE DATE.—
H. R. 4520—132
(1) IN GENERAL.—The amendments made by this section
shall apply to any property placed in service after the date
of the enactment of this Act.
(2) SPECIAL RULE FOR ASSET CLASS 80.0.—In the case of
race track facilities placed in service after the date of the
enactment of this Act, such facilities shall not be treated as
theme and amusement facilities classified under asset class
80.0.
(3) NO INFERENCE.—Nothing in this section or the amend-
ments made by this section shall be construed to affect the
treatment of property placed in service on or before the date
of the enactment of this Act.
SEC. 705. SUSPENSION OF POLICYHOLDERS SURPLUS ACCOUNT
PROVISIONS.
(a) DISTRIBUTIONS TO SHAREHOLDERS FROM PRE-1984 POLICY-
HOLDERS SURPLUS ACCOUNT.—Section 815 (relating to distributions
to shareholders from pre-1984 policyholders surplus account) is
amended by adding at the end the following:
‘‘(g) SPECIAL RULES APPLICABLE DURING 2005 AND 2006.—In
the case of any taxable year of a stock life insurance company
beginning after December 31, 2004, and before January 1, 2007—
‘‘(1) the amount under subsection (a)(2) for such taxable
year shall be treated as zero, and
‘‘(2) notwithstanding subsection (b), in determining any
subtractions from an account under subsections (c)(3) and (d)(3),
any distribution to shareholders during such taxable year shall
be treated as made first out of the policyholders surplus
account, then out of the shareholders surplus account, and
finally out of other accounts.’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to taxable years beginning after December 31, 2004.
SEC. 706. CERTAIN ALASKA NATURAL GAS PIPELINE PROPERTY
TREATED AS 7-YEAR PROPERTY.
(a) IN GENERAL.—Section 168(e)(3)(C) (defining 7-year prop-
erty), as amended by this Act, is amended by striking ‘‘and’’ at
the end of clause (ii), by redesignating clause (iii) as clause (iv),
and by inserting after clause (ii) the following new clause:
‘‘(iii) any Alaska natural gas pipeline, and’’.
(b) ALASKA NATURAL GAS PIPELINE.—Section 168(i) (relating
to definitions and special rules), as amended by this Act, is amended
by inserting after paragraph (15) the following new paragraph:
‘‘(16) ALASKA NATURAL GAS PIPELINE.—The term ‘Alaska
natural gas pipeline’ means the natural gas pipeline system
located in the State of Alaska which—
‘‘(A) has a capacity of more than 500,000,000,000 Btu
of natural gas per day, and
‘‘(B) is—
‘‘(i) placed in service after December 31, 2013,
or
‘‘(ii) treated as placed in service on January 1,
2014, if the taxpayer who places such system in service
before January 1, 2014, elects such treatment.
Such term includes the pipe, trunk lines, related equipment,
and appurtenances used to carry natural gas, but does not
include any gas processing plant.’’.
H. R. 4520—133
(c) ALTERNATIVE
SYSTEM.—The table contained in section
168(g)(3)(B) (relating to special rule for certain property assigned
to classes) is amended by inserting after the item relating to
subparagraph (C)(ii) the following new item:
‘‘(C)(iii) ....................................................................................................................
22’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to property placed in service after December 31, 2004.
SEC. 707. EXTENSION OF ENHANCED OIL RECOVERY CREDIT TO CER-
TAIN ALASKA FACILITIES.
(a) IN GENERAL.—Section 43(c)(1) (defining qualified enhanced
oil recovery costs) is amended by adding at the end the following
new subparagraph:
‘‘(D) Any amount which is paid or incurred during
the taxable year to construct a gas treatment plant which—
‘‘(i) is located in the area of the United States
(within the meaning of section 638(1)) lying north of
64 degrees North latitude,
‘‘(ii) prepares Alaska natural gas for transportation
through a pipeline with a capacity of at least
2,000,000,000,000 Btu of natural gas per day, and
‘‘(iii) produces carbon dioxide which is injected into
hydrocarbon-bearing geological formations.’’.
(b) ALASKA NATURAL GAS.—Section 43(c) is amended by adding
at the end the following new paragraph:
‘‘(5) ALASKA
NATURAL
GAS.—For purposes of paragraph
(1)(D)—
‘‘(1) IN GENERAL.—The term ‘Alaska natural gas’ means
natural gas entering the Alaska natural gas pipeline (as defined
in section 168(i)(16) (determined without regard to subpara-
graph (B) thereof)) which is produced from a well—
‘‘(A) located in the area of the State of Alaska lying
north of 64 degrees North latitude, determined by excluding
the area of the Alaska National Wildlife Refuge (including
the continental shelf thereof within the meaning of section
638(1)), and
‘‘(B) pursuant to the applicable State and Federal pollu-
tion prevention, control, and permit requirements from
such area (including the continental shelf thereof within
the meaning of section 638(1)).
‘‘(2) NATURAL GAS.—The term ‘natural gas’ has the meaning
given such term by section 613A(e)(2).’’.
(c) EFFECTIVE DATE.—The amendment made by this section
shall apply to costs paid or incurred in taxable years beginning
after December 31, 2004.
SEC. 708. METHOD OF ACCOUNTING FOR NAVAL SHIPBUILDERS.
(a) IN GENERAL.—In the case of a qualified naval ship contract,
the taxable income of such contract during the 5-taxable year period
beginning with the taxable year in which the contract commence-
ment date occurs shall be determined under a method identical
to the method used in the case of a qualified ship contract (as
defined in section 10203(b)(2)(B) of the Revenue Act of 1987).
(b) RECAPTURE OF TAX BENEFIT.—In the case of a qualified
naval ship contract to which subsection (a) applies, the taxpayer’s
tax imposed by chapter 1 of the Internal Revenue Code of 1986
for the first taxable year following the 5-taxable year period