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(2) The amendments made by sections 201(b),
202(f), and 618(f) of the Economic Growth and Tax
Relief Reconciliation Act of 2001 shall not apply to
taxable years beginning during 2002 and 2003.
(c) TECHNICAL CORRECTION.—Section 24(d)(1)(B)
is amended by striking ‘‘amount of credit allowed by this
section’’ and inserting ‘‘aggregate amount of credits al-
lowed by this subpart’’.
(d) EFFECTIVE DATES.—
(1) The amendments made by subsections (a)
and (b) shall apply to taxable years beginning after
December 31, 2001.
(2) The amendment made by subsection (c)
shall apply to taxable years beginning after Decem-
ber 31, 2000.
SEC. 302. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) IN GENERAL.—Section 30 is amended—
(1) in subsection (b)(2)—
(A) by striking ‘‘December 31, 2001,’’ and
inserting ‘‘December 31, 2003,’’, and
(B) in subparagraphs (A), (B), and (C), by
striking ‘‘2002’’, ‘‘2003’’, and ‘‘2004’’, respec-
tively, and inserting ‘‘2004’’, ‘‘2005’’, and
‘‘2006’’, respectively, and
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(2) in subsection (e), by striking ‘‘December 31,
2004’’ and inserting ‘‘December 31, 2006’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (C) of section 280F(a)(1) is
amended by adding at the end the following new
clause
‘‘(iii) 
APPLICATION
OF
SUBPARA-
GRAPH.—This subparagraph shall apply to
property placed in service after August 5,
1997, and before January 1, 2007.’’.
(2) Subsection (b) of section 971 of the Tax-
payer Relief Act of 1997 is amended by striking
‘‘and before January 1, 2005’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
SEC. 303. CREDIT FOR ELECTRICITY PRODUCED FROM RE-
NEWABLE RESOURCES.
(a) IN GENERAL.—Subparagraphs (A), (B), and (C)
of section 45(c)(3) are each amended by striking ‘‘2002’’
and inserting ‘‘2004’’.
(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
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SEC. 304. WORK OPPORTUNITY CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section
51(c)(4) is amended by striking ‘‘2001’’ and inserting
‘‘2003’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to individuals who begin work
for the employer after December 31, 2001.
SEC. 305. WELFARE-TO-WORK CREDIT.
(a) IN GENERAL.—Subsection (f) of section 51A is
amended by striking ‘‘2001’’ and inserting ‘‘2003’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to individuals who begin work
for the employer after December 31, 2001.
SEC. 306. DEDUCTION FOR CLEAN-FUEL VEHICLES AND
CERTAIN REFUELING PROPERTY.
(a) IN GENERAL.—Section 179A is amended—
(1) in subsection (b)(1)(B)—
(A) by striking ‘‘December 31, 2001,’’ and
inserting ‘‘December 31, 2003,’’, and
(B) in clauses (i), (ii), and (iii), by striking
‘‘2002’’, ‘‘2003’’, and ‘‘2004’’, respectively, and
inserting ‘‘2004’’, ‘‘2005’’, and ‘‘2006’’, respec-
tively, and
(2) in subsection (f), by striking ‘‘December 31,
2004’’ and inserting ‘‘December 31, 2006’’.
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(b) EFFECTIVE DATE.—The amendments made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 307. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLE-
TION FOR OIL AND NATURAL GAS PRODUCED
FROM MARGINAL PROPERTIES.
(a) IN GENERAL.—Subparagraph (H) of section
613A(c)(6) is amended by striking ‘‘2002’’ and inserting
‘‘2004’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall apply to taxable years beginning after
December 31, 2001.
SEC. 308. QUALIFIED ZONE ACADEMY BONDS.
(a) 
IN
GENERAL.—Paragraph 
(1) 
of 
section
1397E(e) is amended by striking ‘‘2000, and 2001’’ and
inserting ‘‘2000, 2001, 2002, and 2003’’.
(b) EFFECTIVE DATE.—The amendment made by
subsection (a) shall take effect on the date of the enact-
ment of this Act.
SEC. 309. COVER OVER OF TAX ON DISTILLED SPIRITS.
(a) IN GENERAL.—Paragraph (1) of section 7652(f)
is amended by striking ‘‘January 1, 2002’’ and inserting
‘‘January 1, 2004’’.
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(1) Paragraph (2) of section 220(j) is amended
by striking ‘‘1998, 1999, or 2001’’ each place it ap-
pears and inserting ‘‘1998, 1999, 2001, or 2002’’.
(2) Subparagraph (A) of section 220(j)(4) is
amended by striking ‘‘and 2001’’ and inserting
‘‘2001, and 2002’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
Subtitle C—Permanent Extensions
SEC. 331. SUBPART F EXEMPTION FOR ACTIVE FINANCING.
(a) IN GENERAL.—
(1) Section 953(e)(10) is amended—
(A) by striking ‘‘, and before January 1,
2002,’’, and
(B) by striking the second sentence.
(2) Section 954(h)(9) is amended by striking ‘‘,
and before January 1, 2002,’’.
(b) LIFE INSURANCE AND ANNUITY CONTRACTS.—
(1) IN GENERAL.—Subparagraph (B) of section
954(i)(4) is amended to read as follows:
‘‘(B) LIFE INSURANCE AND ANNUITY CON-
TRACTS.—
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (ii), the amount of the re-
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serve of a qualifying insurance company or
qualifying insurance company branch for
any life insurance or annuity contract shall
be equal to the greater of—
‘‘(I) the net surrender value of
such contract (as defined in section
807(e)(1)(A)), or
‘‘(II) 
the 
reserve 
determined
under paragraph (5).
‘‘(ii) RULING REQUEST.—The amount
of the reserve under clause (i) shall be the
foreign statement reserve for the contract
(less any catastrophe, deficiency, equali-
zation, or similar reserves), if, pursuant to
a ruling request submitted by the taxpayer,
the Secretary determines that the factors
taken into account in determining the for-
eign statement reserve provide an appro-
priate means of measuring income.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
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Subtitle D—Other Provisions
SEC. 341. EXCLUDED CANCELLATION OF INDEBTEDNESS
INCOME OF S CORPORATION NOT TO RESULT
IN ADJUSTMENT TO BASIS OF STOCK OF
SHAREHOLDERS.
(a) IN GENERAL.—Subparagraph (A) of section
108(d)(7) (relating to certain provisions to be applied at
corporate level) is amended by inserting before the period
‘‘, including by not taking into account under section
1366(a) any amount excluded under subsection (a) of this
section’’.
(b) EFFECTIVE DATE.—The amendment made by
this section shall apply to discharges of indebtedness after
October 11, 2001, in taxable years ending after such date.
SEC. 342. LIMITATION ON USE OF NONACCRUAL EXPERI-
ENCE METHOD OF ACCOUNTING.
(a) IN GENERAL.—Paragraph (5) of section 448(d)
is amended to read as follows:
‘‘(5) SPECIAL RULE FOR CERTAIN SERVICES.—
‘‘(A) IN
GENERAL.—In the case of any
person using an accrual method of accounting
with respect to amounts to be received for the
performance of services by such person, such
person shall not be required to accrue any por-
tion of such amounts which (on the basis of
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such person’s experience) will not be collected
if—
‘‘(i) such services are in fields referred
to in paragraph (2)(A), or
‘‘(ii) such person meets the gross re-
ceipts test of subsection (c) for all prior
taxable years.
‘‘(B) EXCEPTION.—This paragraph shall
not apply to any amount if interest is required
to be paid on such amount or there is any pen-
alty for failure to timely pay such amount.
‘‘(C) REGULATIONS.—The Secretary shall
prescribe regulations to permit taxpayers to de-
termine amounts referred to in subparagraph
(A) using computations or formulas which,
based on experience, accurately reflect the
amount of income that will not be collected by
such person. A taxpayer may adopt, or request
consent of the Secretary to change to, a com-
putation or formula that clearly reflects the tax-
payer’s experience. A request under the pre-
ceding sentence shall be approved only if such
computation or formula clearly reflects the tax-
payer’s experience.’’.
(b) EFFECTIVE DATE.—
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(1) IN GENERAL.—The amendments made by
this section shall apply to taxable years ending after
the date of the enactment of this Act.
(2) CHANGE IN METHOD OF ACCOUNTING.—In
the case of any taxpayer required by the amend-
ments made by this section to change its method of
accounting for its first taxable year ending after the
date of the enactment of this Act—
(A) such change shall be treated as initi-
ated by the taxpayer,
(B) such change shall be treated as made
with the consent of the Secretary of the Treas-
ury, and
(C) the net amount of the adjustments re-
quired to be taken into account by the taxpayer
under section 481 of the Internal Revenue Code
of 1986 shall be taken into account over a pe-
riod of 4 years (or if less, the number of taxable
years that the taxpayer used the method per-
mitted under section 448(d)(5) of such Code as
in effect before the date of the enactment of
this Act) beginning with such first taxable year.