ganization are not deductible during the period of 
such suspension.’’.
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to designations made before, on, or after 
the date of the enactment of this Act. 
SEC. 109. ABOVE-THE-LINE DEDUCTION FOR OVERNIGHT 
TRAVEL EXPENSES OF NATIONAL GUARD AND 
RESERVE MEMBERS. 
(a) DEDUCTION ALLOWED.—Section 162 (relating to 
certain trade or business expenses) is amended by redesig-
nating subsection (p) as subsection (q) and inserting after 
subsection (o) the following new subsection: 
‘‘(p) TREATMENT OF EXPENSES OF MEMBERS OF RE-
SERVE COMPONENT OF ARMED FORCES OF THE UNITED 
STATES.—For purposes of subsection (a)(2), in the case of 
an individual who performs services as a member of a re-
serve component of the Armed Forces of the United States 
at any time during the taxable year, such individual shall 
be deemed to be away from home in the pursuit of a trade 
or business for any period during which such individual 
is away from home in connection with such services.’’. 
(b) DEDUCTION ALLOWED WHETHER OR NOT TAX-
PAYER ELECTS TO ITEMIZE.—Paragraph (2) of section 
62(a) (relating to certain trade and business deductions of
employees) is amended by adding at the end the following 
new subparagraph: 
‘‘(E) CERTAIN EXPENSES OF MEMBERS OF 
RESERVE COMPONENTS OF THE ARMED FORCES 
OF
THE
UNITED
STATES.—The deductions al-
lowed by section 162 which consist of expenses, 
not in excess of $500, paid or incurred by the 
taxpayer in connection with the performance of 
services by such taxpayer as a member of a re-
serve component of the Armed Forces of the 
United States for any period during which such 
individual is more than 100 miles away from 
home in connection with such services.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to amounts paid or incurred in taxable 
years beginning after December 31, 2002.
TITLE II—MISCELLANEOUS 
PROVISIONS
SEC. 201. TAX RELIEF AND ASSISTANCE FOR FAMILIES OF 
ASTRONAUTS WHO LOSE THEIR LIVES ON A 
SPACE MISSION. 
(a) INCOME TAX RELIEF.—
(1) IN GENERAL.—Subsection (d) of section 692 
(relating to income taxes of members of Armed Forces 
and victims of certain terrorist attacks on death) is
amended by adding at the end the following new 
paragraph: 
‘‘(5) RELIEF WITH RESPECT TO ASTRONAUTS.—
The provisions of this subsection shall apply to any 
astronaut whose death occurs while on a space mis-
sion, except that paragraph (3)(B) shall be applied by 
using the date of the death of the astronaut rather 
than September 11, 2001.’’. 
(2) CONFORMING AMENDMENTS.—
(A) Section 5(b)(1) is amended by inserting 
‘‘, astronauts,’’ after ‘‘Forces’’. 
(B) Section 6013(f)(2)(B) is amended by 
inserting ‘‘, astronauts,’’ after ‘‘Forces’’. 
(3) CLERICAL AMENDMENTS.—
(A) The heading of section 692 is amended 
by 
inserting 
‘‘, 
ASTRONAUTS,’’ 
after 
‘‘FORCES’’. 
(B) The item relating to section 692 in the 
table of sections for part II of subchapter J of 
chapter 1 is amended by inserting ‘‘, astro-
nauts,’’ after ‘‘Forces’’. 
(4) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply with respect to any as-
tronaut whose death occurs after December 31, 2002. 
(b) DEATH BENEFIT RELIEF.—
(1) IN GENERAL.—Subsection (i) of section 101 
(relating to certain death benefits) is amended by 
adding at the end the following new paragraph: 
‘‘(4) RELIEF WITH RESPECT TO ASTRONAUTS.—
The provisions of this subsection shall apply to any 
astronaut whose death occurs while on a space mis-
sion.’’. 
(2) CLERICAL
AMENDMENT.—The heading for 
subsection (i) of section 101 is amended by inserting 
‘‘OR ASTRONAUTS’’ after ‘‘VICTIMS’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to amounts paid after 
December 31, 2002, with respect to deaths occurring 
after such date. 
(c) ESTATE TAX RELIEF.—
(1) IN GENERAL.—Subsection (b) of section 2201 
(defining qualified decedent) is amended by striking 
‘‘and’’ at the end of paragraph (1)(B), by striking the 
period at the end of paragraph (2) and inserting ‘‘, 
and’’, and by adding at the end the following new 
paragraph: 
‘‘(3) any astronaut whose death occurs while on 
a space mission.’’. 
(2) CLERICAL AMENDMENTS.—
(A) The heading of section 2201 is amended 
by inserting ‘‘, DEATHS OF ASTRONAUTS,’’ 
after ‘‘FORCES’’. 
(B) The item relating to section 2201 in the 
table of sections for subchapter C of chapter 11 
is amended by inserting ‘‘, deaths of astronauts,’’ 
after ‘‘Forces’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to estates of decedents 
dying after December 31, 2002. 
SEC. 202. INCOME AVERAGING FOR FARMERS NOT TO IN-
CREASE ALTERNATIVE MINIMUM TAX. 
(a) IN GENERAL.—Subsection (c) of section 55 (defin-
ing regular tax) is amended by redesignating paragraph 
(2) as paragraph (3) and by inserting after paragraph (1) 
the following new paragraph: 
‘‘(2) COORDINATION
WITH
INCOME
AVERAGING 
FOR FARMERS.—Solely for purposes of this section, 
section 1301 (relating to averaging of farm income) 
shall not apply in computing the regular tax.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to taxable years beginning after De-
cember 31, 2002.
SEC. 203. CAPITAL GAIN TREATMENT UNDER SECTION 
631(b) TO APPLY TO OUTRIGHT SALES BY 
LANDOWNERS. 
(a) IN GENERAL.—The first sentence of section 631(b) 
(relating to disposal of timber with a retained economic in-
terest) is amended by striking ‘‘retains an economic interest 
in such timber’’ and inserting ‘‘either retains an economic 
interest in such timber or makes an outright sale of such 
timber’’. 
(b) CONFORMING AMENDMENTS.—
(1) The third sentence of section 631(b) is 
amended by striking ‘‘The date of disposal’’ and in-
serting ‘‘In the case of disposal of timber with a re-
tained economic interest, the date of disposal’’. 
(2) The heading for section 631(b) is amended by 
striking ‘‘WITH A RETAINED ECONOMIC INTEREST’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to sales after the date of the enactment 
of this Act.
SEC. 204. SPECIAL RULES FOR LIVESTOCK SOLD ON AC-
COUNT OF WEATHER-RELATED CONDITIONS. 
(a) RULES FOR REPLACEMENT OF INVOLUNTARILY 
CONVERTED LIVESTOCK.—Subsection (e) of section 1033 
(relating to involuntary conversions) is amended—
(1) by striking ‘‘CONDITIONS.—For purposes’’ 
and inserting ‘‘CONDITIONS.—
‘‘(1) IN GENERAL.—For purposes’’, and 
(2) by adding at the end the following new para-
graph: 
‘‘(2) EXTENSION OF REPLACEMENT PERIOD.—
‘‘(A) IN GENERAL.—In the case of drought, 
flood, or other weather-related conditions de-
scribed in paragraph (1) which result in the 
area being designated as eligible for assistance 
by the Federal Government, subsection (a)(2)(B) 
shall be applied with respect to any converted 
property by substituting ‘4 years’ for ‘2 years’. 
‘‘(B) 
FURTHER
EXTENSION
BY
SEC-
RETARY.—The Secretary may extend on a re-
gional basis the period for replacement under 
this section (after the application of subpara-
graph (A)) for such additional time as the Sec-
retary determines appropriate if the weather-re-
lated conditions which resulted in such applica-
tion continue for more than 3 years.’’. 
(b) INCOME INCLUSION RULES.—Subsection (e) of sec-
tion 451 (relating to special rule for proceeds from livestock 
sold on account of drought, flood, or other weather-related 
conditions) is amended by adding at the end the following 
new paragraph:
‘‘(3) SPECIAL
ELECTION
RULES.—If section 
1033(e)(2) applies to a sale or exchange of livestock 
described in paragraph (1), the election under para-
graph (1) shall be deemed valid if made during the 
replacement period described in such section.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to any taxable year with respect to 
which the due date (without regard to extensions) for the 
return is after December 31, 2002.
SEC. 205. SIMPLIFICATION OF EXCISE TAX IMPOSED ON 
BOWS AND ARROWS. 
(a) BOWS.—Paragraph (1) of section 4161(b) (relating 
to bows) is amended to read as follows: 
‘‘(1) BOWS.—
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale by the manufacturer, producer, 
or importer of any bow which has a draw weight 
of 30 pounds or more, a tax equal to 11 percent 
of the price for which so sold. 
‘‘(B) ARCHERY EQUIPMENT.—There is here-
by imposed on the sale by the manufacturer, pro-
ducer, or importer—
‘‘(i) of any part or accessory suitable 
for inclusion in or attachment to a bow de-
scribed in subparagraph (A), and
‘‘(ii) of any quiver or broadhead suit-
able for use with an arrow described in 
paragraph (3), 
a tax equal to 11 percent of the price for which 
so sold.’’. 
(b) ARROWS.—Subsection (b) of section 4161 (relating 
to bows and arrows, etc.) is amended by redesignating para-
graph (3) as paragraph (4) and inserting after paragraph 
(2) the following: 
‘‘(3) ARROWS.—
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale by the manufacturer, producer, 
or importer of any arrow, a tax equal to 12 per-
cent of the price for which so sold. 
‘‘(B) EXCEPTION.—The tax imposed by sub-
paragraph (A) on an arrow shall not apply if 
the arrow contains an arrow shaft subject to the 
tax imposed by paragraph (2). 
‘‘(C) ARROW.—For purposes of this para-
graph, the term ‘arrow’ means any shaft de-
scribed in paragraph (2) to which additional 
components are attached.’’. 
(c) CONFORMING AMENDMENT.—The heading of sec-
tion 4161(b)(2) is amended by striking ‘‘ARROWS.—’’ and 
inserting ‘‘ARROW COMPONENTS.—’’.
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to articles sold by the manufacturer, 
producer, or importer after the 90th day after the date of 
the enactment of this Act.
SEC. 206. REPEAL OF EXCISE TAX ON FISHING TACKLE 
BOXES. 
(a) REPEAL.—Paragraph (6) of section 4162(a) (de-
fining sport fishing equipment) is amended by striking sub-
paragraph (C) and by redesignating subparagraphs (D) 
through (J) as subparagraphs (C) through (I), respectively. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall take effect 30 days after the date of the enact-
ment of this Act.
SEC. 207. REDUCED MOTOR FUEL EXCISE TAX ON CERTAIN 
MIXTURES OF DIESEL FUEL. 
(a) 
IN
GENERAL.—Clause 
(iii) 
of 
section 
4081(a)(2)(A) is amended by inserting before the period 
‘‘(19.7 cents per gallon in the case of a diesel-water fuel 
emulsion at least 14 percent of which is water)’’. 
(b) REFUNDS FOR TAX-PAID PURCHASES.—
(1) IN GENERAL.—Section 6427 (relating to fuels 
not used for taxable purchases) is amended by redes-
ignating subsections (m) through (p) as subsections 
(n) through (q), respectively, and by inserting after 
subsection (l) the following new subsection:
SEC. 208. EXPANSION OF HUMAN CLINICAL TRIALS QUALI-
FYING FOR ORPHAN DRUG CREDIT. 
(a) IN GENERAL.—Paragraph (2) of section 45C(b) 
(relating to qualified clinical testing expenses) is amended 
by adding at the end the following new subparagraph: 
‘‘(C) TREATMENT
OF
CERTAIN
EXPENSES 
INCURRED BEFORE DESIGNATION.—For purposes 
of subparagraph (A)(ii)(I), if a drug is des-
ignated under section 526 of the Federal Food, 
Drug, and Cosmetic Act not later than the due 
date (including extensions) for filing the return 
of tax under this subtitle for the taxable year in 
which the application for such designation of 
such drug was filed, such drug shall be treated 
as having been designated on the date that such 
application was filed.’’. 
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to expenses incurred after the date 
of the enactment of this Act. 
SEC. 209. HEALTH INSURANCE COSTS OF ELIGIBLE INDI-
VIDUALS. 
(a) CONSUMER OPTIONS.—Paragraph (2) of section 
35(e) is amended by inserting at the end the following new 
subparagraph: 
‘‘(C) WAIVER BY ELIGIBLE INDIVIDUALS.—
With respect to any month which ends before
January 1, 2005, this paragraph shall not apply 
with respect to any eligible individual and such 
individual’s qualifying family members if such 
eligible individual elects to waive the application 
of this paragraph with respect to such month.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to months beginning after the date of 
the enactment of this Act.
SEC. 210. TREATMENT UNDER AT-RISK RULES OF PUBLICLY 
TRADED NONRECOURSE DEBT. 
(a) IN
GENERAL.—Subparagraph (A) of section 
465(b)(6) (relating to qualified nonrecourse financing treat-
ed as amount at risk) is amended by striking ‘‘share of’’ 
and all that follows and inserting ‘‘share of—
‘‘(i) any qualified nonrecourse financ-
ing which is secured by real property used 
in such activity, and 
‘‘(ii) any other financing which—
‘‘(I) would (but for subparagraph 
(B)(ii)) be qualified nonrecourse fi-
nancing, 
‘‘(II) is qualified publicly traded 
debt, and 
‘‘(III) is not borrowed by the tax-
payer from a person described in sub-
clause (I), (II), or (III) of section 
49(a)(1)(D)(iv).’’. 
(b) QUALIFIED PUBLICLY TRADED DEBT.—Paragraph 
(6) of section 465(b) is amended by adding at the end the 
following new subparagraph: 
‘‘(F) 
QUALIFIED
PUBLICLY
TRADED 
DEBT.—For purposes of subparagraph (A), the 
term ‘qualified publicly traded debt’ means any 
debt instrument which is readily tradable on an 
established securities market. Such term shall not 
include any debt instrument which has a yield 
to maturity which equals or exceeds the limita-
tion in section 163(i)(1)(B).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to debt instruments issued after the date 
of the enactment of this Act. 
SEC. 211. EXCLUSION OF INCOME DERIVED FROM CERTAIN 
WAGERS ON HORSE RACES FROM GROSS IN-
COME OF NONRESIDENT ALIEN INDIVIDUALS. 
(a) IN GENERAL.—Subsection (b) of section 872 (relat-
ing to exclusions) is amended by redesignating paragraphs 
(5), (6), and (7) as paragraphs (6), (7), and (8), respec-
tively, and inserting after paragraph (4) the following new 
paragraph:
‘‘(5) INCOME DERIVED FROM WAGERING TRANS-
ACTIONS IN CERTAIN PARIMUTUEL POOLS.—Gross in-
come derived by a nonresident alien individual from 
a legal wagering transaction initiated outside the 
United States in a parimutuel pool with respect to a 
live horse race in the United States.’’. 
(b) CONFORMING AMENDMENT.—Section 883(a)(4) is 
amended by striking ‘‘(5), (6), and (7)’’ and inserting ‘‘(6), 
(7), and (8)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to proceeds from wagering transactions 
after September 30, 2003. 
SEC. 212. PAYMENT OF DIVIDENDS ON STOCK OF COOPERA-
TIVES WITHOUT REDUCING PATRONAGE DIVI-
DENDS. 
(a) IN GENERAL.—Subsection (a) of section 1388 (re-
lating to patronage dividend defined) is amended by adding 
at the end the following: ‘‘For purposes of paragraph (3), 
net earnings shall not be reduced by amounts paid during 
the year as dividends on capital stock or other proprietary 
capital interests of the organization to the extent that the 
articles of incorporation or bylaws of such organization or 
other contract with patrons provide that such dividends are 
in addition to amounts otherwise payable to patrons which
are derived from business done with or for patrons during 
the taxable year.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to distributions in taxable years begin-
ning after the date of the enactment of this Act. 
SEC. 213. PILOT PROJECT FOR FOREST CONSERVATION AC-
TIVITIES. 
(a) TAX-EXEMPT BOND FINANCING.—
(1) IN GENERAL.—For purposes of the Internal 
Revenue Code of 1986, any qualified forest conserva-
tion bond shall be treated as an exempt facility bond 
under section 142 of such Code. 
(2) QUALIFIED FOREST CONSERVATION BOND.—
For purposes of this section, the term ‘‘qualified forest 
conservation bond’’ means any bond issued as part of 
an issue if—
(A) 95 percent or more of the net proceeds 
(as defined in section 150(a)(3) of such Code) of 
such issue are to be used for qualified project 
costs, 
(B) such bond is an obligation of the State 
of Washington or any political subdivision there-
of and is issued for the Evergreen Forest Trust, 
and
(C) such bond is issued before October 1, 
2004. 
(3) 
LIMITATION
ON
AGGREGATE
AMOUNT 
ISSUED.—The maximum aggregate face amount of 
bonds which may be issued under this section shall 
not exceed $250,000,000. 
(4) QUALIFIED PROJECT COSTS.—For purposes 
of this subsection, the term ‘‘qualified project costs’’ 
means the sum of—
(A) the cost of acquisition by the Evergreen 
Forest Trust from an unrelated person of forests 
and forest land—
(i) which are located in the State of 
Washington, and 
(ii) which at the time of acquisition or 
immediately thereafter are subject to a con-
servation restriction described in subsection 
(c)(2), 
(B) capitalized interest on the qualified for-
est conservation bonds for the 3-year period be-
ginning on the date of issuance of such bonds, 
and 
(C) credit enhancement fees which constitute 
qualified guarantee fees (within the meaning of 
section 148 of such Code).
(5) SPECIAL RULES.—In applying the Internal 
Revenue Code of 1986 to any qualified forest con-
servation bond, the following modifications shall 
apply: 
(A) Section 146 of such Code (relating to 
volume cap) shall not apply. 
(B) For purposes of section 147(b) of such 
Code (relating to maturity may not exceed 120 
percent of economic life), the land and standing 
timber acquired with proceeds of qualified forest 
conservation bonds shall have an economic life of 
35 years. 
(C) Subsections (c) and (d) of section 147 
of such Code (relating to limitations on acquisi-
tion of land and existing property) shall not 
apply. 
(D) Section 57(a)(5) of such Code (relating 
to tax-exempt interest) shall not apply to interest 
on qualified forest conservation bonds. 
(6) 
TREATMENT
OF
CURRENT
REFUNDING 
BONDS.—Paragraphs (2)(C) and (3) shall not apply 
to any bond (or series of bonds) issued to refund a 
qualified forest conservation bond issued before Octo-
ber 1, 2004, if—
(2) QUALIFIED
HARVESTING
ACTIVITY.—For 
purposes of paragraph (1)—
(A) IN GENERAL.—The term ‘‘qualified har-
vesting activity’’ means the sale, lease, or har-
vesting, of standing timber—
(i) on land owned by the Evergreen 
Forest Trust which was acquired with pro-
ceeds of qualified forest conservation bonds, 
and 
(ii) pursuant to a qualified conserva-
tion plan adopted by the Evergreen Forest 
Trust. 
(B) EXCEPTIONS.—
(i) CESSATION AS QUALIFIED ORGANI-
ZATION.—The term ‘‘qualified harvesting 
activity’’ shall not include any sale, lease, 
or harvesting during any period that the 
Evergreen Forest Trust is not a qualified 
organization. 
(ii) EXCEEDING
LIMITS
ON
HAR-
VESTING.—The term ‘‘qualified harvesting 
activity’’ shall not include any sale, lease, 
or harvesting of standing timber on land 
acquired with proceeds of qualified forest 
conservation bonds to the extent that—
(I) the average annual area of 
timber harvested from such land ex-
ceeds 2.5 percent of the total area of 
such land, or 
(II) the quantity of timber re-
moved from such land exceeds the 
quantity which can be removed from 
such land annually in perpetuity on a 
sustained-yield basis with respect to 
such land. 
The limitations under subclauses (I) and 
(II) shall not apply to salvage or sanitation 
harvesting of timber stands which are sub-
stantially damaged by fire, windthrow, or 
other catastrophe, or which are in imminent 
danger from insect or disease attack. 
(3) TERMINATION.—This subsection shall not 
apply to any qualified harvesting activity occurring 
after the date on which there is no outstanding quali-
fied forest conservation bond or any such bond ceases 
to be a tax-exempt bond. 
(4) PARTIAL RECAPTURE OF BENEFITS IF HAR-
VESTING LIMIT EXCEEDED.—If, as of the date that 
this subsection ceases to apply under paragraph (3), 
the average annual area of timber harvested from the
land 
exceeds 
the 
requirement 
of 
paragraph 
(2)(B)(ii)(I), the tax imposed by chapter 1 of the In-
ternal Revenue Code of 1986 shall be increased, under 
rules prescribed by the Secretary, by the sum of the 
tax benefit attributable to such excess and interest at 
the underpayment rate under section 6621 for the pe-
riod of the underpayment. 
(c) DEFINITIONS.—For purposes of this section—
(1) QUALIFIED CONSERVATION PLAN.—The term 
‘‘qualified conservation plan’’ means a multiple land 
use program or plan which—
(A) is designed and administered primarily 
for the purposes of protecting and enhancing 
wildlife and fish, timber, scenic attributes, recre-
ation, and soil and water quality of the forest 
and forest land, 
(B) mandates that conservation of forest 
and forest land is the single-most significant use 
of the forest and forest land, 
(C) requires that timber harvesting be con-
sistent with—
(i) restoring and maintaining reference 
conditions for the Westside Douglas Fir for-
est type,
(ii) restoring and maintaining a rep-
resentative sample of young, mid, and late 
successional forest age classes, 
(iii) maintaining or restoring the re-
sources’ ecological health for purposes of 
preventing damage from fire, insect, or dis-
ease, 
(iv) maintaining or enhancing wildlife 
or fish habitat, 
(v) enhancing research opportunities 
in sustainable renewable resource uses, or 
(vi) preserving or protecting open 
space. 
(2) CONSERVATION RESTRICTION.—The conserva-
tion restriction described in this paragraph is a re-
striction which—
(A) is granted in perpetuity to an unrelated 
person which is described in section 170(h)(3) of 
such Code and which, in the case of a nongovern-
mental unit, is organized and operated for con-
servation purposes, 
(B) meets the requirements of clause (ii) or 
(iii)(II) of section 170(h)(4)(A) of such Code, 
(C) obligates the Evergreen Forest Trust to 
pay the costs incurred by the holder of the con-
servation restriction in monitoring compliance 
with such restriction, and 
(D) requires an increasing level of conserva-
tion benefits to be provided whenever cir-
cumstances allow it. 
(3) 
QUALIFIED
ORGANIZATION.—The 
term 
‘‘qualified organization’’ means an organization—
(A) which is a nonprofit organization orga-
nized and operated exclusively for charitable, sci-
entific, or educational purposes including but 
not limited to acquiring, protecting, restoring, 
managing, and developing forest lands and other 
renewable resources for the long-term charitable, 
educational, scientific, and public benefit of the 
State of Washington, 
(B) more than half of the value of the prop-
erty of which consists of forests and forest land 
acquired with the proceeds from qualified forest 
conservation bonds, 
(C) which periodically conducts educational 
programs designed to inform the public of envi-
ronmentally sensitive forestry management and 
conservation techniques, 
(D) which has a board of directors that at 
all times is comprised of 9 members—
(i) at least 2 of whom represent the 
holders of the conservation restriction de-
scribed in paragraph (2), and 
(ii) at least 2 of whom are public offi-
cials, 
(E) of which not more than one-third of the 
members of the board of directors is comprised of 
individuals who are or were at any time within 
5 years before the beginning of a term of mem-
bership on the board, an employee of, inde-
pendent contractor with respect to, officer of, di-
rector of, or held a material financial interest in, 
a commercial forest products enterprise with 
which the Evergreen Forest Trust has a contrac-
tual or other financial arrangement, 
(F) the bylaws of which require at least 
two-thirds of the members of the board of direc-
tors to vote affirmatively to approve the qualified 
conservation program and any change thereto, 
and 
(G) upon dissolution, is required to dedicate 
its assets to—
(i) an organization described in section 
501(c)(3) of such Code which is organized 
and operated for conservation purposes, or
(ii) a governmental unit described in 
section 170(c)(1) of such Code. 
(4) EVERGREEN FOREST TRUST.—The term ‘‘Ev-
ergreen Forest Trust’’ means a nonprofit corporation 
known as the Evergreen Forest Trust which was in-
corporated on February 25, 2000, under chapter 
24.03 of the Revised Code of Washington and which, 
on May 11, 2001, was recognized as an organization 
described in section 501(c)(3) of the Internal Revenue 
Code of 1986. 
(5) UNRELATED PERSON.—The term ‘‘unrelated 
person’’ means a person who is not a related person. 
(6) RELATED PERSON.—A person shall be treat-
ed as related to another person if—
(A) such person bears a relationship to such 
other person described in section 267(b) (deter-
mined without regard to paragraph (9) thereof), 
or 707(b)(1), of such Code, determined by sub-
stituting ‘‘25 percent’’ for ‘‘50 percent’’ each 
place it occurs therein, and 
(B) in the case such other person is a non-
profit organization, if such person controls di-
rectly or indirectly more than 25 percent of the 
governing body of such organization.
SEC. 214. PROTECTION OF SOCIAL SECURITY. 
The amounts transferred to any trust fund under title 
II of the Social Security Act shall be determined as if this 
title (other than this section) and title I of this Act had 
not been enacted.
TITLE III—REVENUE 
PROVISIONS
SEC. 301. INDIVIDUAL EXPATRIATION TO AVOID TAX. 
(a) EXPATRIATION TO AVOID TAX.—
(1) IN GENERAL.—Subsection (a) of section 877 
(relating to treatment of expatriates) is amended to 
read as follows: 
‘‘(a) TREATMENT OF EXPATRIATES.—
‘‘(1) IN GENERAL.—Every nonresident alien in-
dividual to whom this section applies and who, with-
in the 10-year period immediately preceding the close 
of the taxable year, lost United States citizenship 
shall be taxable for such taxable year in the manner 
provided in subsection (b) if the tax imposed pursu-
ant to such subsection (after any reduction in such 
tax under the last sentence of such subsection) exceeds 
the tax which, without regard to this section, is im-
posed pursuant to section 871. 
‘‘(2) INDIVIDUALS SUBJECT TO THIS SECTION.—
This section shall apply to any individual if—
‘‘(A) the average annual net income tax (as 
defined in section 38(c)(1)) of such individual 
for the period of 5 taxable years ending before 
the date of the loss of United States citizenship 
is greater than $122,000, 
‘‘(B) the net worth of the individual as of 
such date is $2,000,000 or more, or 
‘‘(C) such individual fails to certify under 
penalty of perjury that he has met the require-
ments of this title for the 5 preceding taxable 
years or fails to submit such evidence of such 
compliance as the Secretary may require. 
In the case of the loss of United States citizenship in 
any calendar year after 2003, such $122,000 amount 
shall be increased by an amount equal to such dollar 
amount multiplied by the cost-of-living adjustment 
determined under section 1(f)(3) for such calendar 
year by substituting ‘2002’ for ‘1992’ in subpara-
graph (B) thereof. Any increase under the preceding 
sentence shall be rounded to the nearest multiple of 
$1,000.’’. 
(2) REVISION
OF
EXCEPTIONS
FROM
ALTER-
NATIVE TAX.—Subsection (c) of section 877 (relating 
to tax avoidance not presumed in certain cases) is 
amended to read as follows:
‘‘(c) EXCEPTIONS.—
‘‘(1) IN GENERAL.—Subparagraphs (A) and (B) 
of subsection (a)(2) shall not apply to an individual 
described in paragraph (2) or (3). 
‘‘(2) DUAL CITIZENS.—
‘‘(A) IN GENERAL.—An individual is de-
scribed in this paragraph if—
‘‘(i) the individual became at birth a 
citizen of the United States and a citizen of 
another country and continues to be a cit-
izen of such other country, and 
‘‘(ii) the individual has had no sub-
stantial contacts with the United States. 
‘‘(B) SUBSTANTIAL
CONTACTS.—An indi-
vidual shall be treated as having no substantial 
contacts with the United States only if the indi-
vidual—
‘‘(i) was never a resident of the United 
States (as defined in section 7701(b)), 
‘‘(ii) has never held a United States 
passport, and 
‘‘(iii) was not present in the United 
States for more than 30 days during any 
calendar year which is 1 of the 10 calendar
years preceding the individual’s loss of 
United States citizenship. 
‘‘(3) CERTAIN
MINORS.—An individual is de-
scribed in this paragraph if—
‘‘(A) the individual became at birth a cit-
izen of the United States, 
‘‘(B) neither parent of such individual was 
a citizen of the United States at the time of such 
birth, 
‘‘(C) the individual’s loss of United States 
citizenship occurs before such individual attains 
age 181⁄2, and 
‘‘(D) the individual was not present in the 
United States for more than 30 days during any 
calendar year which is 1 of the 10 calendar 
years preceding the individual’s loss of United 
States citizenship.’’. 
(3) CONFORMING AMENDMENT.—Section 2107(a) 
is amended to read as follows: 
‘‘(a) TREATMENT OF EXPATRIATES.—A tax computed 
in accordance with the table contained in section 2001 is 
hereby imposed on the transfer of the taxable estate, deter-
mined as provided in section 2106, of every decedent non-
resident not a citizen of the United States if the date of
death occurs during a taxable year with respect to which 
the decedent is subject to tax under section 877(b).’’. 
(b) SPECIAL RULES FOR DETERMINING WHEN AN IN-
DIVIDUAL IS NO LONGER A UNITED STATES CITIZEN OR 
LONG-TERM RESIDENT.—Section 7701 (relating to defini-
tions) is amended by redesignating subsection (n) as sub-
section (o) and by inserting after subsection (m) the fol-
lowing new subsection: 
‘‘(n) SPECIAL RULES FOR DETERMINING WHEN AN IN-
DIVIDUAL IS NO LONGER A UNITED STATES CITIZEN OR 
LONG-TERM RESIDENT.—An individual who would not 
(but for this subsection) be treated as a citizen or resident 
of the United States shall continue to be treated as a citizen 
or resident of the United States until such individual—
‘‘(1) gives notice of an expatriating act or termi-
nation of residency (with the requisite intent to relin-
quish citizenship or terminate residency) to the Sec-
retary of State or the Secretary of Homeland Secu-
rity, and 
‘‘(2) provides a statement in accordance with 
section 6039G.’’. 
(c) PHYSICAL PRESENCE IN THE UNITED STATES FOR 
MORE THAN 30 DAYS.—Section 877 (relating to expatria-
tion to avoid tax) is amended by adding at the end the 
following new subsection:
‘‘(g) PHYSICAL PRESENCE.—This section shall not 
apply to any individual for any taxable year during the 
10-year period referred to in subsection (a) in which such 
individual is present in the United States for more than 
30 days in the calendar year ending in such taxable year, 
and such individual shall be treated for purposes of this 
title as a citizen or resident of the United States for such 
taxable year.’’. 
(d) TRANSFERS SUBJECT TO GIFT TAX.—Subsection 
(a) of section 2501 (relating to taxable transfers) is amend-
ed by adding at the end the following: 
‘‘(6) TRANSFERS OF CERTAIN STOCK.—
‘‘(A) IN
GENERAL.—Paragraph (3) shall 
not apply to the transfer of stock described in 
subparagraph (B) by any individual to whom 
section 877(b) applies, and section 2511(a) shall 
be applied without regard to whether such stock 
is property which is situated within the United 
States. 
‘‘(B) VALUATION.—For purposes of sub-
paragraph (A), the value of stock shall be deter-
mined as provided in section 2103, except that—
‘‘(i) if the donor owned (within the 
meaning of section 958(a)) at the time of 
such transfer 10 percent or more of the total
combined voting power of all classes of stock 
entitled to vote of a foreign corporation, and 
‘‘(ii) if such donor owned (within the 
meaning of section 958(a)), or is considered 
to have owned (by applying the ownership 
rules of section 958(b)), at the time of such 
transfer, more than 50 percent of—
‘‘(I) the total combined voting 
power of all classes of stock entitled to 
vote of such corporation, or 
‘‘(II) the total value of the stock of 
such corporation, then that proportion 
of the fair market value of the stock of 
such foreign corporation owned (within 
the meaning of section 958(a)) by such 
donor at the time of such transfer, 
which the fair market value of any as-
sets owned by such foreign corporation 
and situated in the United States, at 
the time of such transfer, bears to the 
total fair market value of all assets 
owned by such foreign corporation at 
the time of such transfer, shall be in-
cluded in the value of such property.
For purposes of the preceding sentence, a 
donor shall be treated as owning stock of a 
foreign corporation at the time of such 
transfer if, at such time, by trust or other-
wise, within the meaning of sections 2035 to 
2038, inclusive, he owned such stock.’’.
(e) ENHANCED INFORMATION REPORTING FROM INDI-
VIDUALS LOSING UNITED STATES CITIZENSHIP.—
(1) IN
GENERAL.—Subsection (a) of section 
6039G is amended to read as follows: 
‘‘(a) IN GENERAL.—Notwithstanding any other provi-
sion of law, any individual to whom section 877(b) applies 
for any taxable year shall provide a statement for such tax-
able year which includes the information described in sub-
section (b).’’. 
(2) INFORMATION TO BE PROVIDED.—Subsection 
(b) of section 6039G is amended to read as follows: 
‘‘(b) INFORMATION TO BE PROVIDED.—Information 
required under subsection (a) shall include—
‘‘(1) the taxpayer’s TIN, 
‘‘(2) the mailing address of such individual’s 
principal foreign residence, 
‘‘(3) the foreign country, in which such indi-
vidual is residing,
‘‘(4) the foreign country of which such individual 
is a citizen, 
‘‘(5) information detailing the assets and liabil-
ities of such individual, 
‘‘(6) the number of days that the individual was 
present in the United States during the taxable year, 
and 
‘‘(7) such other information as the Secretary 
may prescribe.’’. 
(3) INCREASE IN PENALTY.—Subsection (d) of 
section 6039G is amended to read as follows: 
‘‘(d) PENALTY.—If—
‘‘(1) an individual is required to file a statement 
under subsection (a) for any taxable year, and 
‘‘(2) fails to file such a statement with the Sec-
retary on or before the date such statement is required 
to be filed or fails to include all the information re-
quired to be shown on the statement or includes incor-
rect information, 
such individual shall pay a penalty of $5,000 unless it is 
shown that such failure is due to reasonable cause and not 
to willful neglect.’’. 
(4) CONFORMING AMENDMENT.—Section 6039G 
is amended by striking subsections (c), (f), and (g)
and by redesignating subsections (d) and (e) as sub-
section (c) and (d), respectively.
(f) EFFECTIVE DATE.—The amendments made by this 
section shall apply to individuals who expatriate after Feb-
ruary 27, 2003. 
SEC. 302. VACCINE TAX TO APPLY TO HEPATITIS A VAC-
CINE. 
(a) IN GENERAL.—Paragraph (1) of section 4132(a) 
(defining taxable vaccine) is amended by redesignating sub-
paragraphs (I), (J), (K), and (L) as subparagraphs (J), 
(K), (L), and (M), respectively, and by inserting after sub-
paragraph (H) the following new subparagraph: 
‘‘(I) Any vaccine against hepatitis A.’’
(b) EFFECTIVE DATE.—
(1) SALES, ETC.—The amendments made by sub-
section (a) shall apply to sales and uses on or after 
the first day of the first month which begins more 
than 4 weeks after the date of the enactment of this 
Act. 
(2) DELIVERIES.—For purposes of paragraph 
(1) and section 4131 of the Internal Revenue Code of 
1986, in the case of sales on or before the effective date 
described in such paragraph for which delivery is 
made after such date, the delivery date shall be con-
sidered the sale date.