Sec. 632. Minimum holding period for foreign tax credit on withholding taxes 
on income other than dividends. 
Sec. 633. Disallowance of certain partnership loss transfers. 
Sec. 634. No reduction of basis under section 734 in stock held by partnership 
in corporate partner. 
Sec. 635. Repeal of special rules for FASITs. 
Sec. 636. Limitation on transfer of built-in losses on REMIC residuals. 
Sec. 637. Clarification of banking business for purposes of determining invest-
ment of earnings in United States property. 
Sec. 638. Alternative tax for certain small insurance companies. 
Sec. 639. Denial of deduction for interest on underpayments attributable to 
nondisclosed reportable transactions. 
Sec. 640. Clarification of rules for payment of estimated tax for certain deemed 
asset sales. 
Sec. 641. Recognition of gain from the sale of a principal residence acquired 
in a like-kind exchange within 5 years of sale. 
Sec. 642. Prevention of mismatching of interest and original issue discount de-
ductions and income inclusions in transactions with related for-
eign persons. 
Sec. 643. Exclusion from gross income for interest on overpayments of income 
tax by individuals. 
Sec. 644. Deposits made to suspend running of interest on potential underpay-
ments. 
Sec. 645. Partial payment of tax liability in installment agreements. 
Sec. 646. Affirmation of consolidated return regulation authority. 
PART III—LEASING 
Sec. 647. Reform of tax treatment of certain leasing arrangements. 
Sec. 648. Limitation on deductions allocable to property used by governments 
or other tax-exempt entities. 
Sec. 649. Effective date. 
Subtitle C—Reduction of Fuel Tax Evasion 
Sec. 651. Exemption from certain excise taxes for mobile machinery. 
Sec. 652. Taxation of aviation-grade kerosene. 
Sec. 653. Dye injection equipment. 
Sec. 654. Authority to inspect on-site records. 
Sec. 655. Registration of pipeline or vessel operators required for exemption of 
bulk transfers to registered terminals or refineries. 
Sec. 656. Display of registration. 
Sec. 657. Penalties for failure to register and failure to report. 
Sec. 658. Collection from customs bond where importer not registered. 
Sec. 659. Modifications of tax on use of certain vehicles. 
Sec. 660. Modification of ultimate vendor refund claims with respect to farm-
ing. 
Sec. 661. Dedication of revenues from certain penalties to the Highway Trust 
Fund. 
Sec. 662. Taxable fuel refunds for certain ultimate vendors. 
Sec. 663. Two-party exchanges. 
Sec. 664. Simplification of tax on tires. 
Subtitle D—Nonqualified Deferred Compensation Plans 
Sec. 671. Treatment of nonqualified deferred compensation plans.
Subtitle E—Other Revenue Provisions 
Sec. 681. Qualified tax collection contracts. 
Sec. 682. Treatment of charitable contributions of patents and similar property. 
Sec. 683. Increased reporting for noncash charitable contributions. 
Sec. 684. Donations of motor vehicles, boats, and aircraft. 
Sec. 685. Extension of amortization of intangibles to sports franchises. 
Sec. 686. Modification of continuing levy on payments to Federal venders. 
Sec. 687. Modification of straddle rules. 
Sec. 688. Addition of vaccines against hepatitis A to list of taxable vaccines. 
Sec. 689. Addition of vaccines against influenza to list of taxable vaccines. 
Sec. 690. Extension of IRS user fees. 
Sec. 691. COBRA fees. 
TITLE VII—MARKET REFORM FOR TOBACCO GROWERS 
Sec. 701. Short title. 
Sec. 702. Effective date. 
Subtitle A—Termination of Federal Tobacco Quota and Price Support 
Programs 
Sec. 711. Termination of tobacco quota program and related provisions. 
Sec. 712. Termination of tobacco price support program and related provisions. 
Sec. 713. Continuation of liability and no net loss assessments to prevent losses 
on price support loans. 
Subtitle B—Transitional Payments to Tobacco Quota Holders and Active 
Producers of Tobacco 
Sec. 721. Definitions of active tobacco producer and quota holder. 
Sec. 722. Payments to tobacco quota holders. 
Sec. 723. Transition payments for active producers of quota tobacco. 
Sec. 724. Resolution of disputes. 
Sec. 725. Source of funds for payments. 
TITLE VIII—TRADE PROVISIONS 
Sec. 801. Ceiling fans. 
Sec. 802. Certain steam generators, and certain reactor vessel heads, used in 
nuclear facilities.
TITLE I—END SANCTIONS AND 
REDUCE 
CORPORATE 
TAX 
RATES FOR DOMESTIC MANU-
FACTURING AND SMALL COR-
PORATIONS 
SEC. 101. REPEAL OF EXCLUSION FOR EXTRATERRITORIAL 
INCOME. 
(a) IN GENERAL.—Section 114 is hereby repealed. 
(b) CONFORMING AMENDMENTS.— 
(1) Subpart E of part III of subchapter N of 
chapter 1 (relating to qualifying foreign trade in-
come) is hereby repealed. 
(2) The table of subparts for such part III is 
amended by striking the item relating to subpart E. 
(3) The table of sections for part III of sub-
chapter B of chapter 1 is amended by striking the 
item relating to section 114. 
(4) 
The 
second 
sentence 
of 
section 
56(g)(4)(B)(i) is amended by striking ‘‘114 or’’. 
(5) Section 275(a) is amended— 
(A) by inserting ‘‘or’’ at the end of para-
graph (4)(A), by striking ‘‘or’’ at the end of 
paragraph (4)(B) and inserting a period, and 
by striking subparagraph (C), and 
(B) by striking the last sentence.
(6) Paragraph (3) of section 864(e) is amend-
ed— 
(A) by striking: 
‘‘(3) TAX-EXEMPT
ASSETS
NOT
TAKEN
INTO 
ACCOUNT.— 
‘‘(A) IN GENERAL.—For purposes of’’; and 
inserting: 
‘‘(3) TAX-EXEMPT
ASSETS
NOT
TAKEN
INTO 
ACCOUNT.—For purposes of’’, and 
(B) by striking subparagraph (B). 
(7) Section 903 is amended by striking ‘‘114, 
164(a),’’ and inserting ‘‘164(a)’’. 
(8) Section 999(c)(1) is amended by striking 
‘‘941(a)(5),’’. 
(c) EFFECTIVE DATE.—Except as provided in sub-
section (d), the amendments made by this section shall 
apply to transactions after December 31, 2004. 
(d) TRANSITIONAL RULE FOR 2005 AND 2006.— 
(1) IN GENERAL.—In the case of transactions 
during 2005 or 2006, the amount includible in gross 
income by reason of the amendments made by this 
section shall not exceed the applicable percentage of 
the amount which would have been so included but 
for this subsection.
(2) APPLICABLE PERCENTAGE.—For purposes 
of paragraph (1), the applicable percentage shall be 
as follows: 
(A) For 2005, the applicable percentage 
shall be 20 percent. 
(B) For 2006, the applicable percentage 
shall be 40 percent. 
(e) REVOCATION OF ELECTION TO BE TREATED AS 
DOMESTIC CORPORATION.—If, during the 1-year period 
beginning on the date of the enactment of this Act, a cor-
poration for which an election is in effect under section 
943(e) of the Internal Revenue Code of 1986 revokes such 
election, no gain or loss shall be recognized with respect 
to property treated as transferred under clause (ii) of sec-
tion 943(e)(4)(B) of such Code to the extent such prop-
erty— 
(1) was treated as transferred under clause (i) 
thereof, or 
(2) was acquired during a taxable year to which 
such election applies and before May 1, 2003, in the 
ordinary course of its trade or business. 
The Secretary of the Treasury (or such Secretary’s dele-
gate) may prescribe such regulations as may be necessary 
to prevent the abuse of the purposes of this subsection.
(f) BINDING CONTRACTS.—The amendments made 
by this section shall not apply to any transaction in the 
ordinary course of a trade or business which occurs pursu-
ant to a binding contract— 
(1) which is between the taxpayer and a person 
who is not a related person (as defined in section 
943(b)(3) of such Code, as in effect on the day be-
fore the date of the enactment of this Act), and 
(2) which is in effect on January 14, 2002, and 
at all times thereafter. 
For purposes of this subsection, a binding contract shall 
include a purchase option, renewal option, or replacement 
option which is included in such contract and which is en-
forceable against the seller or lessor. 
SEC. 102. REDUCED CORPORATE INCOME TAX RATE FOR 
DOMESTIC 
PRODUCTION 
ACTIVITIES 
IN-
COME. 
(a) LIMITATION ON TAX ON QUALIFIED PRODUCTION 
ACTIVITIES INCOME.—Section 11 is amended by redesig-
nating subsections (c) and (d) as subsections (d) and (e), 
respectively, and by inserting after subsection (b) the fol-
lowing new subsection: 
‘‘(c) LIMITATION ON TAX ON QUALIFIED PRODUC-
TION ACTIVITIES INCOME.—
‘‘(1) IN GENERAL.—If a corporation has quali-
fied production activities income for any taxable 
year, the tax imposed by this section shall not exceed 
the sum of— 
‘‘(A) a tax computed at the rates and in 
the manner as if this subsection had not been 
enacted on the taxable income reduced by the 
amount of qualified production activities in-
come, plus 
‘‘(B) a tax equal to 32 percent (34 percent 
in the case of taxable years beginning before 
January 1, 2007) of the qualified production 
activities income (or, if less, taxable income). 
‘‘(2) QUALIFIED
PRODUCTION
ACTIVITIES
IN-
COME.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
production activities income’ for any taxable 
year means an amount equal to the excess (if 
any) of— 
‘‘(i) the taxpayer’s domestic produc-
tion gross receipts for such taxable year, 
over 
‘‘(ii) the sum of— 
‘‘(I) the cost of goods sold that 
are allocable to such receipts,
‘‘(II) other deductions, expenses, 
or losses directly allocable to such re-
ceipts, and 
‘‘(III) a ratable portion of other 
deductions, expenses, and losses that 
are not directly allocable to such re-
ceipts or another class of income. 
‘‘(B) ALLOCATION
METHOD.—The Sec-
retary shall prescribe rules for the proper allo-
cation of items of income, deduction, expense, 
and loss for purposes of determining income at-
tributable to domestic production activities. 
‘‘(3) 
DOMESTIC
PRODUCTION
GROSS
RE-
CEIPTS.—For purposes of this subsection, the term 
‘domestic production gross receipts’ means the gross 
receipts of the taxpayer which are derived from— 
‘‘(A) any lease, rental, license, sale, ex-
change, or other disposition of— 
‘‘(i) qualifying production property 
which was manufactured, produced, grown, 
or extracted in whole or in significant part 
by the taxpayer within the United States, 
or 
‘‘(ii) any qualified film produced by 
the taxpayer, or
‘‘(B) construction, engineering, or architec-
tural services performed in the United States 
for construction projects in the United States. 
‘‘(4) QUALIFYING
PRODUCTION
PROPERTY.— 
For purposes of this subsection, the term ‘qualifying 
production property’ means— 
‘‘(A) tangible personal property, 
‘‘(B) any computer software, and 
‘‘(C) any property described in section 
168(f)(4). 
‘‘(5) QUALIFIED FILM.—For purposes of this 
subsection— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
film’ means any property described in section 
168(f)(3) if not less than 50 percent of the 
total compensation relating to the production of 
such property is compensation for services per-
formed in the United States by actors, produc-
tion personnel, directors, and producers. 
‘‘(B) EXCEPTION.—Such term does not in-
clude property with respect to which records are 
required to be maintained under section 2257 
of title 18, United States Code. 
‘‘(6) RELATED PERSONS.—For purposes of this 
subsection—
‘‘(A) IN
GENERAL.—The term ‘domestic 
production gross receipts’ shall not include any 
gross receipts of the taxpayer derived from 
property leased, licensed, or rented by the tax-
payer for use by any related person. 
‘‘(B) RELATED PERSON.—For purposes of 
subparagraph (A), a person shall be treated as 
related to another person if such persons are 
treated as a single employer under subsection 
(a) or (b) of section 52 or subsection (m) or (o) 
of section 414, except that determinations 
under subsections (a) and (b) of section 52 
shall be made without regard to section 
1563(b).’’. 
(b) SPECIAL RULE RELATING
TO ELECTION TO 
TREAT CUTTING OF TIMBER AS A SALE OR EXCHANGE.— 
In the case of a corporation, any election under section 
631(a) of the Internal Revenue Code of 1986 made for 
a taxable year ending on or before the date of the enact-
ment of this Act may be revoked by the taxpayer for any 
taxable year ending after such date. For purposes of deter-
mining whether such taxpayer may make a further elec-
tion under such section, such election (and any revocation 
under this section) shall not be taken into account.