380
(B) CONFORMING AMENDMENT.—Paragraph
(2) of section 4042(b) is amended by striking
subparagraph (C).
(c) EFFECTIVE DATE.—The amendments made by this
subsection shall take effect on October 1, 1999 (October 1,
2003, in the case of the amendments made by subsection
(b)), but shall not take effect if section 1321 does not take
effect.
SEC. 1323. REPEAL OF EXCISE TAX ON FISHING TACKLE
BOXES.
(a) IN GENERAL.—Paragraph (6) of section 4162(a)
(defining sport fishing equipment) is amended by striking
subparagraph (C) and by redesignating subparagraphs (D)
through (J) as subparagraphs (C) through (I), respectively.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to articles sold by the manufacturer,
producer, or importer more than 30 days after the date of
the enactment of this Act.
SEC. 1324. CLARIFICATION OF EXCISE TAX IMPOSED ON
ARROW COMPONENTS.
(a) IN GENERAL.—Paragraph (2) of section 4161(b)
(relating to bows and arrows, etc.) is amended to read as
follows:
‘‘(2) ARROWS.—
381
‘‘(A) IN
GENERAL.—There is hereby im-
posed on the sale by the manufacturer, producer,
or importer of any shaft, point, article used to
attach a point to a shaft, nock, or vane of a type
used in the manufacture of any arrow which
after its assembly—
‘‘(i) measures 18 inches overall or more
in length, or
‘‘(ii) measures less than 18 inches over-
all in length but is suitable for use with a
bow described in paragraph (1)(A),
a tax equal to 12.4 percent of the price for which
so sold.
‘‘(B) REDUCED RATE ON CERTAIN HUNTING
POINTS.—Subparagraph (A) shall be applied by
substituting ‘11 percent’ for ‘12.4 percent’ in the
case of a point which is designed primarily for
use in hunting fish or large animals.’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to articles sold by the manufacturer,
producer, or importer after the close of the first calendar
month ending more than 30 days after the date of the enact-
ment of this Act.
382
Subtitle D—Improvements in Low-
Income Housing Credit
SEC. 1331. INCREASE IN STATE CEILING ON LOW-INCOME
HOUSING CREDIT.
(a) INCREASE IN STATE CEILING.—Clause (i) of sec-
tion 42(h)(3)(C) (relating to State housing credit ceiling)
is amended by striking ‘‘$1.25’’ and inserting ‘‘the applica-
ble amount under subparagraph (H)’’.
(b) APPLICABLE AMOUNT; ADJUSTMENT
OF STATE
CEILING FOR INCREASES IN COST-OF-LIVING.—Paragraph
(3) of section 42(h) (relating to housing credit dollar
amount for agencies) is amended by adding at the end the
following new subparagraphs:
‘‘(H) INITIAL AMOUNT
OF STATE CEIL-
ING.—For purposes of subparagraph (C)(i), the
applicable amount shall be determined under the
following table:
‘‘For calendar year
The applicable amount is
2000 .................................................................................... $1.35
2001 ....................................................................................
1.45
2002 ....................................................................................
1.55
2003 ....................................................................................
1.65
2004 and thereafter ...........................................................
1.75.
‘‘(I) COST-OF-LIVING ADJUSTMENT.—
‘‘(i) IN GENERAL.—In the case of a
calendar year after 2004 the $1.75 amount
in subparagraph (H) shall be increased by
an amount equal to—
383
‘‘(I) such dollar amount, multi-
plied by
‘‘(II) the cost-of-living adjustment
determined under section 1(f)(3) for
such calendar year by substituting ‘cal-
endar year 2003’ for ‘calendar year
1992’ in subparagraph (B) thereof.
‘‘(ii) ROUNDING.—Any increase under
clause (i) which is not a multiple of 5 cents
shall be rounded to the next lowest multiple
of 5 cents.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to calendar years after 1999.
SEC. 1332. MODIFICATION OF CRITERIA FOR ALLOCATING
HOUSING CREDITS AMONG PROJECTS.
(a) SELECTION CRITERIA.—Subparagraph (C) of sec-
tion 42(m)(1) (relating to certain selection criteria must
be used) is amended—
(1) by inserting ‘‘, including whether the project
includes the use of existing housing as part of a com-
munity revitalization plan’’ before the comma at the
end of clause (iii), and
(2) by striking clauses (v), (vi), and (vii) and
inserting the following new clauses:
384
‘‘(v) tenant populations with special
housing needs,
‘‘(vi) public housing waiting lists,
‘‘(vii) tenant populations of individ-
uals with children, and
‘‘(viii) projects intended for eventual
tenant ownership.’’
(b) PREFERENCE FOR COMMUNITY REVITALIZATION
PROJECTS LOCATED
IN QUALIFIED CENSUS TRACTS.—
Clause (ii) of section 42(m)(1)(B) is amended by striking
‘‘and’’ at the end of subclause (I), by adding ‘‘and’’ at the
end of subclause (II), and by inserting after subclause (II)
the following new subclause:
‘‘(III) projects which are located
in qualified census tracts (as defined
in subsection (d)(5)(C)) and the devel-
opment of which contributes to a con-
certed 
community 
revitalization
plan,’’.
SEC. 1333. ADDITIONAL RESPONSIBILITIES OF HOUSING
CREDIT AGENCIES.
(a) MARKET STUDY; PUBLIC DISCLOSURE OF RATION-
ALE FOR NOT FOLLOWING CREDIT ALLOCATION PRIOR-
ITIES.—Subparagraph (A) of section 42(m)(1) (relating to
responsibilities of housing credit agencies) is amended by
385
striking ‘‘and’’ at the end of clause (i), by striking the pe-
riod at the end of clause (ii) and inserting a comma, and
by adding at the end the following new clauses:
‘‘(iii) a comprehensive market study of
the housing needs of low-income individuals
in the area to be served by the project is
conducted before the credit allocation is
made and at the developer’s expense by a
disinterested party who is approved by such
agency, and
‘‘(iv) a written explanation is avail-
able to the general public for any allocation
of a housing credit dollar amount which is
not made in accordance with established
priorities and selection criteria of the hous-
ing credit agency.’’.
(b) SITE VISITS.—Clause (iii) of section 42(m)(1)(B)
(relating to qualified allocation plan) is amended by insert-
ing before the period ‘‘and in monitoring for noncompliance
with habitability standards through regular site visits’’.
SEC. 1334. MODIFICATIONS TO RULES RELATING TO BASIS
OF BUILDING WHICH IS ELIGIBLE FOR CRED-
IT.
(a) HOME ASSISTANCE NOT TO DISQUALIFY BUILD-
ING FOR ADDITIONAL CREDIT AVAILABLE TO BUILDINGS IN
386
HIGH COST AREAS.—Clause (i) of section 42(i)(2)(E) (re-
lating to buildings receiving HOME assistance) is amended
by striking the last sentence.
(b) ADJUSTED BASIS TO INCLUDE PORTION OF CER-
TAIN BUILDINGS USED BY LOW-INCOME INDIVIDUALS WHO
ARE NOT TENANTS AND BY PROJECT EMPLOYEES.—Para-
graph (4) of section 42(d) (relating to special rules relating
to determination of adjusted basis) is amended—
(1) by striking ‘‘subparagraph (B)’’ in subpara-
graph (A) and inserting ‘‘subparagraphs (B) and
(C)’’,
(2) by redesignating subparagraph (C) as sub-
paragraph (D), and
(3) by inserting after subparagraph (B) the fol-
lowing new subparagraph:
‘‘(C) INCLUSION
OF
BASIS
OF
PROPERTY
USED TO PROVIDE SERVICES FOR CERTAIN NON-
TENANTS.—
‘‘(i) IN GENERAL.—The adjusted basis
of any building located in a qualified cen-
sus tract (as defined in paragraph (5)(C))
shall be determined by taking into account
the adjusted basis of property (of a char-
acter subject to the allowance for deprecia-
tion and not otherwise taken into account)
387
used throughout the taxable year in pro-
viding any community service facility.
‘‘(ii) LIMITATION.—The increase in the
adjusted basis of any building which is
taken into account by reason of clause (i)
shall not exceed 20 percent of the eligible
basis of the qualified low-income housing
project of which it is a part. For purposes
of the preceding sentence, all community
service facilities which are part of the same
qualified low-income housing project shall
be treated as 1 facility.
‘‘(iii) COMMUNITY
SERVICE
FACIL-
ITY.—For purposes of this subparagraph,
the term ‘community service facility’ means
any facility designed to serve primarily in-
dividuals whose income is 60 percent or less
of area median income (within the meaning
of subsection (g)(1)(B)).’’.
SEC. 1335. OTHER MODIFICATIONS.
(a) ALLOCATION
OF CREDIT LIMIT
TO CERTAIN
BUILDINGS.—
(1) The first sentence of section 42(h)(1)(E)(ii) is
amended by striking ‘‘(as of’’ the first place it ap-
pears and inserting ‘‘(as of the later of the date which
388
is 6 months after the date that the allocation was
made or’’.
(2) The last sentence of section 42(h)(3)(C) is
amended by striking ‘‘project which’’ and inserting
‘‘project which fails to meet the 10 percent test under
paragraph (1)(E)(ii) on a date after the close of the
calendar year in which the allocation was made or
which’’.
(b) DETERMINATION OF WHETHER BUILDINGS ARE
LOCATED IN HIGH COST AREAS.—The first sentence of sec-
tion 42(d)(5)(C)(ii)(I) is amended—
(1) by inserting ‘‘either’’ before ‘‘in which 50
percent’’, and
(2) by inserting before the period ‘‘ or which has
a poverty rate of at least 25 percent’’.
SEC. 1336. CARRYFORWARD RULES.
(a) IN GENERAL.—Clause (ii) of section 42(h)(3)(D)
(relating to unused housing credit carryovers allocated
among certain states) is amended by striking ‘‘the excess’’
and all that follows and inserting ‘‘the excess (if any) of—
‘‘(I) the unused State housing
credit ceiling for the year preceding
such year, over
389
‘‘(II) the aggregate housing credit
dollar 
amount 
allocated 
for 
such
year.’’.
(b) CONFORMING AMENDMENT.—The second sentence
of section 42(h)(3)(C) (relating to State housing credit ceil-
ing) is amended by striking ‘‘clauses (i) and (iii)’’ and in-
serting ‘‘clauses (i) through (iv)’’.
SEC. 1337. EFFECTIVE DATE.
Except as otherwise provided in this subtitle, the
amendments made by this subtitle shall apply to—
(1) housing credit dollar amounts allocated after
December 31, 2000, and
(2) buildings placed in service after such date to
the extent paragraph (1) of section 42(h) of the Inter-
nal Revenue Code of 1986 does not apply to any
building by reason of paragraph (4) thereof, but only
with respect to bonds issued after such date.
390
Subtitle E—Entrepreneurial Equity
Capital Formation
PART I—TAX-FREE CONVERSIONS OF SPECIAL-
IZED SMALL BUSINESS INVESTMENT COMPA-
NIES INTO PASS-THRU ENTITIES
SEC. 1341. MODIFICATIONS TO PROVISIONS RELATING TO
REGULATED INVESTMENT COMPANIES.
(a) IN GENERAL.—Section 851 (relating to definition
of regulated investment company) is amended by adding
at the end the following new subsection:
‘‘(i) SPECIAL RULES FOR SPECIALIZED SMALL BUSI-
NESS INVESTMENT COMPANIES.—
‘‘(1) IN GENERAL.—For purposes of determining
whether a specialized small business investment com-
pany is a regulated investment company for purposes
of this subchapter—
‘‘(A) income derived from an investment as
a limited partner in a partnership shall be treat-
ed as qualifying income under subsection (b)(2)
if—
‘‘(i) the company does not participate
in the active management of the normal
business operations of the partnership, and
‘‘(ii) the company’s investment in such
partnership is an investment permitted for
391
specialized small business investment com-
panies under the Small Business Invest-
ment Act of 1958, and
‘‘(B) the requirements of subsection (b)(3)
shall be treated as met if, at the close of each
quarter of the taxable year, at least 50 percent
of the value of its total assets is represented by—
‘‘(i) assets described in subsection
(b)(3)(A)(i), and
‘‘(ii) other investments permitted to be
made by a specialized small business invest-
ment company under the Small Business
Investment Act of 1958.
‘‘(2) COORDINATION OF DISTRIBUTION REQUIRE-
MENTS
WITH
SBIC
REQUIREMENTS.—A specialized
small business investment company shall be treated as
meeting the requirements of section 852(a)(1) if the
deduction for dividends paid during the taxable year
(as defined in section 561, but without regard to cap-
ital gain dividends) equals or exceeds the lesser of the
amount required under section 852(a)(1) or 100 per-
cent of the maximum amount that the company
would be permitted to distribute during such year
under the Small Business Investment Act of 1958.
392
‘‘(3) SPECIALIZED SMALL BUSINESS INVESTMENT
COMPANY.—For purposes of this subsection, the term
‘specialized small business investment company’ has
the meaning given to such term by section 1044(c)(3).
‘‘(4) REFERENCES TO 1958 ACT.—For purposes of
this subsection, references to the Small Business In-
vestment Act of 1958 shall be treated as references to
such Act as in effect on May 13, 1993.’’
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after the date
of enactment of this Act.
SEC. 1342. TAX-FREE REORGANIZATION OF SPECIALIZED
SMALL BUSINESS INVESTMENT COMPANY AS
A PARTNERSHIP.
(a) IN GENERAL.—If, within 180 days after the date
of the enactment of this Act, a corporation which is a spe-
cialized small business investment company transfers sub-
stantially all of its assets to a partnership (including its
license to operate as a specialized small business investment
company) solely in exchange for partnership interests in
such partnership, no gain or loss shall be recognized to the
corporation on such a transfer if—
(1) immediately after such exchange, such cor-
poration holds partnership interests in such partner-
ship having a value equal to at least 80 percent of the
393
total value of all partnership interests in such part-
nership, and
(2) before the 90th day after such exchange, such
corporation transfers all partnership interests held by
the corporation in such partnership, and all remain-
ing assets of the corporation, to its shareholders in the
complete liquidation of such corporation.
(b) NONRECOGNITION OF GAIN OR LOSS TO CORPORA-
TION ON DISTRIBUTION OF PARTNERSHIP INTERESTS.—In
the case of any distribution of a partnership interest ac-
quired by the liquidating corporation in an exchange to
which subsection (a) applies—
(1) no gain or loss shall be recognized to the liq-
uidating corporation by reason of such distribution,
and
(2) such distribution shall not be treated as a
sale or exchange for purposes of section 708(b)(1)(B)
of the Internal Revenue Code of 1986.
(c) GAIN RECOGNIZED BY SHAREHOLDERS ON RE-
CEIPT OF PROPERTY OTHER THAN PARTNERSHIP INTER-
ESTS.—
(1) IN GENERAL.—No gain or loss shall be recog-
nized to a shareholder of a corporation on the transfer
of such shareholder’s stock in such corporation to such
corporation solely in exchange for a partnership in-
394
terest in the partnership referred to in subsection
(a)(1).
(2) RECEIPT OF PROPERTY.—If paragraph (1)
would apply to an exchange but for the fact that there
is received, in addition to the partnership interests
permitted to be received under paragraph (1), other
property or money, then—
(A) gain (if any) to such recipient shall be
recognized, but not in excess of—
(i) the amount of money received, plus
(ii) the fair market value of such other
property received, and
(B) no loss to such recipient shall be recog-
nized.
(d) BASIS.—The basis of property received in any ex-
change to which this section applies shall be determined in
accordance with rules similar to the rules of section 358
of the Internal Revenue Code of 1986.
(e) ADDITIONAL REQUIREMENTS.—This section shall
not apply to any specialized small business investment com-
pany unless—
(1) such company elects to be subject to tax on
its built-in gains computed in a manner similar to
that provided in section 1374 of such Code (without
395
regard to any recognition period (as defined in sub-
section (d)(7) thereof)), and
(2) such company distributes all of its accumu-
lated earnings and profits (in distributions to which
section 301 of such Code applies) before its liquida-
tion under this section.
If, after making an election under paragraph (1), a com-
pany ceases to be a specialized small business investment
company, such company shall be treated as having disposed
of all of its assets for purposes of applying paragraph (1).
(f) SPECIALIZED SMALL BUSINESS INVESTMENT COM-
PANY.—For purposes of this section, the term ‘‘specialized
small business investment company’’ has the meaning given
to such term by section 1044(c)(3) of such Code.
PART II—ADDITIONAL INCENTIVES RELATED TO
INVESTING IN SPECIALIZED SMALL BUSI-
NESS INVESTMENT COMPANIES
SEC. 1346. EXPANSION OF NONRECOGNITION TREATMENT
FOR SECURITIES GAIN ROLLED OVER INTO
SPECIALIZED SMALL BUSINESS INVESTMENT
COMPANIES.
(a) EXTENSION OF ROLLOVER PERIOD.—Paragraph
(1) of section 1044(a) (relating to nonrecognition of gain)
is amended by striking ‘‘60-day period’’ and inserting
‘‘180-day period’’.
396
(b) INCREASE OF MAXIMUM EXCLUSION.—
(1) IN GENERAL.—Paragraphs (1) and (2) of
section 1044(b) (relating to limitations) are amended
to read as follows:
‘‘(1) LIMITATION ON INDIVIDUALS.—In the case
of an individual, the amount of gain which may be
excluded under subsection (a) for any taxable year
shall not exceed—
‘‘(A) $750,000, reduced by
‘‘(B) the amount of gain excluded under
subsection (a) for all preceding taxable years.
‘‘(2) LIMITATION ON C CORPORATIONS.—In the
case of a C corporation, the amount of gain which
may be excluded under subsection (a) for any taxable
year shall not exceed—
‘‘(A) $2,000,000, reduced by
‘‘(B) the amount of gain excluded under
subsection (a) for all preceding taxable years.’’
(2) CONFORMING
AMENDMENT.—Subparagraph
(A) of section 1044(b)(3) (relating to special rules for
married individuals) is amended to read as follows:
‘‘(A) SEPARATE RETURNS.—In the case of a
separate return by a married individual, para-
graph (1) shall be applied by substituting
‘$375,000’ for ‘$750,000’.’’
397
(c) EXTENSION TO PREFERRED STOCK.—Paragraph
(1) of section 1044(a) is amended by striking ‘‘common’’.
(d) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales occurring after the date of the
enactment of this Act.
SEC. 1347. MODIFICATIONS TO EXCLUSION FOR GAIN FROM
QUALIFIED SMALL BUSINESS STOCK.
(a) IN GENERAL.—Section 1202 (relating to 50-per-
cent exclusion for gain from certain small business stock)
is amended by redesignating subsection (k) as subsection
(l) and by inserting after subsection (j) the following new
subsection:
‘‘(k) SPECIAL RULES FOR SPECIALIZED SMALL BUSI-
NESS INVESTMENT COMPANIES.—
‘‘(1) INCREASE IN EXCLUSION.—In the case of—
‘‘(A) the sale or exchange of stock in a spe-
cialized small business investment company, and
‘‘(B) any amount treated under subsection
(g) as gain described in subsection (a) by reason
of the sale or exchange of stock in a specialized
small business investment company,
subsection (a) shall be applied by substituting ‘60
percent’ for ‘50 percent’.
‘‘(2) WAIVER
OF
ACTIVE
BUSINESS
REQUIRE-
MENT.—Notwithstanding any provision of subsection
398
(e), a corporation shall be treated as meeting the ac-
tive business requirements of such subsection for any
period during which such corporation qualifies as a
specialized small business investment company.
‘‘(3) SPECIALIZED SMALL BUSINESS INVESTMENT
COMPANY.—For purposes of this section, the term
‘specialized small business investment company’
means any eligible corporation (as defined in sub-
section (e)(4)) which is licensed to operate under sec-
tion 301(d) of the Small Business Investment Act of
1958 (as in effect on May 13, 1993).’’
(b) CONFORMING AMENDMENT.—Section 1202(c)(2) is
amended to read as follows:
‘‘(2) ACTIVE
BUSINESS
REQUIREMENT, ETC.—
Stock in a corporation shall not be treated as quali-
fied small business stock unless, during substantially
all of the taxpayer’s holding period for such stock,
such corporation meets the active business require-
ments of subsection (e) and such corporation is a C
corporation.’’
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales and exchanges occurring after
the date of the enactment of this Act.
399
Subtitle F—Other Provisions
SEC. 1351. INCREASE IN VOLUME CAP ON PRIVATE ACTIV-
ITY BONDS.
(a) IN GENERAL.—Subsection (d) of section 146 (relat-
ing to volume cap) is amended by striking paragraph (2),
by redesignating paragraphs (3) and (4) as paragraphs (2)
and (3), respectively, and by striking paragraph (1) and
inserting the following new paragraph:
‘‘(1) IN GENERAL.—The State ceiling applicable
to any State for any calendar year shall be the great-
er of—
‘‘(A) an amount equal to $75 multiplied by
the State population, or
‘‘(B) $225,000,000.
Subparagraph (B) shall not apply to any possession
of the United States.’’.
(b) CONFORMING AMENDMENT.—Sections 25(f)(3) and
42(h)(3)(E)(iii) are each amended by striking ‘‘section
146(d)(3)(C)’’ and inserting ‘‘section 146(d)(2)(C)’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to calendar years after 1999.
SEC. 1352. TAX TREATMENT OF ALASKA NATIVE SETTLE-
MENT TRUSTS.
(a) IN GENERAL.—Subpart A of part I of subchapter
J of chapter 1 (relating to general rules for taxation of
400
trusts and estates) is amended by adding at the end the
following new section:
‘‘SEC. 
646. 
ELECTING 
ALASKA 
NATIVE 
SETTLEMENT
TRUSTS.
‘‘(a) IN GENERAL.—Except as otherwise provided in
this section, the provisions of this subchapter and section
1(e) shall apply to all Settlement Trusts.
‘‘(b) BENEFICIARIES OF ELECTING TRUST NOT TAXED
ON CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—In the case of a Settlement
Trust for which an election under paragraph (2) is
in effect for any taxable year, no amount shall be in-
cludible in the gross income of a beneficiary of the
Settlement Trust by reason of a contribution to the
Settlement Trust made during such taxable year.
‘‘(2) ONE-TIME ELECTION.—
‘‘(A) IN
GENERAL.—A Settlement Trust
may elect to have the provisions of this section
apply to the trust and its beneficiaries.
‘‘(B) TIME AND METHOD OF ELECTION.—
An election under subparagraph (A) shall be
made—
‘‘(i) before the due date (including ex-
tensions) for filing the Settlement Trust’s
return of tax for the 1st taxable year of the
401
Settlement Trust ending after December 31,
1999, and
‘‘(ii) by attaching to such return of tax
a statement specifically providing for such
election.
‘‘(C) PERIOD
ELECTION
IN
EFFECT.—Ex-
cept as provided in paragraph (3), an election
under subparagraph (A)—
‘‘(i) shall apply to the 1st taxable year
described in subparagraph (B)(i) and all
subsequent taxable years, and
‘‘(ii) may not be revoked once it is
made.
‘‘(c) SPECIAL RULES WHERE TRANSFER RESTRIC-
TIONS MODIFIED.—
‘‘(1) TRANSFER OF BENEFICIAL INTERESTS.—If,
at any time, a beneficial interest in a Settlement
Trust may be disposed of to a person in a manner
which would not be permitted by section 7(h) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1606(h)) if the interest were Settlement Common
Stock—
‘‘(A) no election may be made under sub-
section (b)(2) with respect to such trust, and
402
‘‘(B) if such an election is in effect as of
such time, such election shall cease to apply for
purposes of subsection (b)(1) as of the 1st day of
the taxable year following the taxable year in
which such disposition is first permitted.
‘‘(2) STOCK IN CORPORATION.—If—
‘‘(A) the Settlement Common Stock in any
Native Corporation which transferred assets to a
Settlement Trust making an election under sub-
section (b)(2) may be disposed of to a person in
a manner not permitted by section 7(h) of the
Alaska Native Claims Settlement Act (43 U.S.C.
1606(h)), and
‘‘(B) at any time after such disposition of
stock is first permitted, such corporation trans-
fers assets to such trust,
subparagraph (B) of paragraph (1) shall be applied
to such trust on and after the date of the transfer in
the same manner as if the trust permitted disposi-
tions of beneficial interests in the trust in a manner
not permitted by such section 7(h).
‘‘(c) TAX TREATMENT OF DISTRIBUTIONS TO BENE-
FICIARIES.—
‘‘(1) IN GENERAL.—In the case of a Settlement
Trust for which an election under subsection (b)(2) is
403
in effect for any taxable year, any distribution to a
beneficiary shall be included in gross income of the
beneficiary as ordinary income to the extent such dis-
tribution reduces the earnings and profits of any Na-
tive Corporation making a contribution to such
Trust.
‘‘(2) EARNINGS
AND
PROFITS.—The earnings
and profits of any Native Corporation making a con-
tribution to a Settlement Trust shall not be reduced
on account thereof at the time of such contribution,
but such earnings and profits shall be reduced (up to
the amount of such contribution) as distributions are
thereafter made by the Settlement Trust which exceed
the sum of—
‘‘(A) such Trust’s total undistributed net in-
come for all prior years during which an election
under subsection (b)(2) is in effect, and
‘‘(B) such Trust’s distributable net income.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) NATIVE CORPORATION.—The term ‘Native
Corporation’ has the meaning given such term by sec-
tion 3(m) of the Alaska Native Claims Settlement Act
(43 U.S.C. 1602(m)).
‘‘(2) SETTLEMENT TRUST.—The term ‘Settlement
Trust’ means a trust which constitutes a Settlement
404
Trust under section 39 of the Alaska Native Claims
Settlement Act (43 U.S.C. 1629e).’’
(b) WITHHOLDING ON DISTRIBUTIONS BY ELECTING
ANCSA SETTLEMENT TRUSTS.—Section 3402 is amended
by adding at the end the following new subsection:
‘‘(t) TAX
WITHHOLDING
ON
DISTRIBUTIONS
BY
ELECTING ANCSA SETTLEMENT TRUSTS.—
‘‘(1) IN GENERAL.—Any Settlement Trust (as de-
fined in section 646(d)) for which an election under
section 646(b)(2) is in effect (in this subsection re-
ferred to as an ‘electing trust’) and which makes a
payment to any beneficiary which is includable in
gross income under section 646(c) shall deduct and
withhold from such payment a tax in an amount
equal to such payment’s proportionate share of the
annualized tax.
‘‘(2) EXCEPTION.—The tax imposed by para-
graph (1) shall not apply to any payment to the ex-
tent that such payment, when annualized, does not
exceed an amount equal to the amount in effect under
section 6012(a)(1)(A)(i) for taxable years beginning
in the calendar year in which the payment is made.
‘‘(3) ANNUALIZED TAX.—For purposes of para-
graph (1), the term ‘annualized tax’ means, with re-
spect to any payment, the amount of tax which would
405
be imposed by section 1(c) (determined without re-
gard to any rate of tax in excess of 31 percent) on
an amount of taxable income equal to the excess of—
‘‘(A) the annualized amount of such pay-
ment, over
‘‘(B) the amount determined under para-
graph (2).
‘‘(4) ANNUALIZATION.—For purposes of this sub-
section, amounts shall be annualized in the manner
prescribed by the Secretary.
‘‘(5) ALTERNATE WITHHOLDING PROCEDURES.—
At the election of an electing trust, the tax imposed
by this subsection on any payment made by such
trust shall be determined in accordance with such ta-
bles or computational procedures as may be specified
in regulations prescribed by the Secretary (in lieu of
in accordance with paragraphs (2) and (3)).
‘‘(6) COORDINATION WITH OTHER SECTIONS.—
For purposes of this chapter and so much of subtitle
F as relates to this chapter, payments which are sub-
ject to withholding under this subsection shall be
treated as if they were wages paid by an employer to
an employee.’’
(c) REPORTING.—Section 6041 is amended by adding
at the end the following new subsection:
406
‘‘(f) APPLICATION TO ALASKA NATIVE SETTLEMENT
TRUSTS.—In the case of any distribution from a Settlement
Trust (as defined in section 646(d)) to a beneficiary which
is includable in gross income under section 646(c), this sec-
tion shall apply, except that—
‘‘(1) this section shall apply to such distribution
without regard to the amount thereof,
‘‘(2) the Settlement Trust shall include on any
return or statement required by this section informa-
tion as to the character of such distribution (if appli-
cable) and the amount of tax imposed by chapter 1
which has been deducted and withheld from such dis-
tribution, and
‘‘(3) the filing of any return or statement re-
quired by this section shall satisfy any requirement to
file any other form or schedule under this title with
respect to distributive share information (including
any form or schedule to be included with the trust’s
tax return).’’
(d) CLERICAL AMENDMENT.—The table of sections for
subpart A of part I of subchapter J of chapter 1 is amended
by adding at the end the following new item:
‘‘Sec. 646. Electing Alaska Native Settlement Trusts.’’
(e) EFFECTIVE DATE.—The amendments made by this
section shall apply to taxable years of Settlement Trusts
407
ending after December 31, 1999, and to contributions to
such trusts after such date.
SEC. 1353. INCREASE IN THRESHOLD FOR JOINT COM-
MITTEE REPORTS ON REFUNDS AND CRED-
ITS.
(a) GENERAL RULE.—Subsections (a) and (b) of sec-
tion 6405 are each amended by striking ‘‘$1,000,000’’ and
inserting ‘‘$2,000,000’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall take effect on the date of the enactment
of this Act, except that such amendment shall not apply
with respect to any refund or credit with respect to a report
that has been made before such date of enactment under
section 6405 of the Internal Revenue Code of 1986.
SEC. 1354. CLARIFICATION OF DEPRECIATION STUDY.
Paragraph (1) of section 2022 of the Tax and Trade
Relief Extension Act of 1998 (Public Law 105–277; 112
Stat. 2681-903) is amended by inserting after ‘‘1986,’’ the
following: ‘‘including such periods and methods applicable
to section 1250 property used in connection with a fran-
chise (within the meaning of section 1253) and owned by
the franchisee,’’.
408
Subtitle G—Tax Court Provisions
SEC. 1361. TAX COURT FILING FEE IN ALL CASES COM-
MENCED BY FILING PETITION.
(a) IN GENERAL.—Section 7451 (relating to fee for fil-
ing a Tax Court petition) is amended by striking all that
follows ‘‘petition’’ and inserting a period.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date of the enactment of this
Act.
SEC. 1362. EXPANDED USE OF TAX COURT PRACTICE FEE.
Subsection (b) of section 7475 (relating to use of fees)
is amended by inserting before the period at the end ‘‘and
to provide services to pro se taxpayers’’.
SEC. 1363. CONFIRMATION OF AUTHORITY OF TAX COURT
TO 
APPLY 
DOCTRINE 
OF 
EQUITABLE
RECOUPMENT.
(a) CONFIRMATION OF AUTHORITY OF TAX COURT TO
APPLY DOCTRINE
OF EQUITABLE RECOUPMENT.—Sub-
section (b) of section 6214 (relating to jurisdiction over
other years and quarters) is amended by adding at the end
the following new sentence: ‘‘Notwithstanding the preceding
sentence, the Tax Court may apply the doctrine of equitable
recoupment to the same extent that it is available in civil
tax cases before the district courts of the United States and
the United States Court of Federal Claims.’’.
409
(b) EFFECTIVE DATE.—The amendments made by this
section shall apply to any action or proceeding in the Tax
Court with respect to which a decision has not become final
(as determined under section 7481 of the Internal Revenue
Code of 1986) as of the date of the enactment of this Act.
Subtitle H—Tax-Free Transfer of
Bottled Distilled Spirits to Bond-
ed Dealers
SEC. 1371. TAX-FREE TRANSFER OF BOTTLED DISTILLED
SPIRITS FROM DISTILLED SPIRITS PLANT TO
BONDED DEALER.
(a) DOMESTIC BOTTLED DISTILLED SPIRITS.—
(1) IN GENERAL.—The last sentence of section
5212 is amended by inserting before the period ‘‘and
shall not apply to bottled distilled spirits transferred
from a distilled spirits plant (other than a bonded
dealer) to a bonded dealer if the proprietor of such
plant notifies (in such form and manner as the Sec-
retary prescribes by regulations) such bonded dealer
of the amount of tax determined on the distilled spir-
its so transferred’’.
(2) TRANSFER
OF
LIABILITY
CONTINGENT
ON
FURNISHING OF CERTAIN INFORMATION.—Paragraph
(2) of section 5005(c) is amended by adding at the
end the following new sentence: ‘‘In the case of a
410
transfer of bottled distilled spirits from a distilled
spirits plant to a bonded dealer, the preceding provi-
sions of this subsection shall apply only to the extent
of the amount specified by the proprietor of such
plant in accordance with the last sentence of section
5212.’’
(b) COMPARABLE TREATMENT FOR IMPORTED BOT-
TLED DISTILLED SPIRITS.—Subsection (a) of section 5232
is amended to read as follows:
‘‘(a) TRANSFER TO DISTILLED SPIRITS PLANT WITH-
OUT PAYMENT OF TAX.—
‘‘(1) IN GENERAL.—Distilled spirits imported or
brought into the United States in bulk containers
may, under such regulations as the Secretary shall
prescribe, be withdrawn from customs custody and
transferred in such bulk containers or by pipeline to
the bonded premises of a distilled spirits plant with-
out payment of the internal revenue tax imposed on
such distilled spirits by section 5001.
‘‘(2) IMPORTED BOTTLED DISTILLED SPIRITS.—
The restriction under paragraph (1) to transfers in
bulk or by pipeline shall not apply to bottled distilled
spirits transferred from customs custody to a bonded
dealer if the proprietor of the customs bonded ware-
house notifies (in such form and manner as the Sec-
411
retary prescribes by regulations) such bonded dealer
of the amount of tax determined on the distilled spir-
its so transferred.
‘‘(3) TRANSFER OF LIABILITY.—The person oper-
ating the bonded premises of the distilled spirits plant
to which such spirits are transferred shall become lia-
ble for the tax on distilled spirits withdrawn from
customs custody under this section upon release of the
spirits from customs custody, and the importer, or the
person bringing such distilled spirits into the United
States, shall thereupon be relieved of his liability for
such tax. In the case of a transfer of bottled distilled
spirits from a customs bonded warehouse to a bonded
dealer, the preceding sentence shall apply only to the
extent of the amount specified by the proprietor of
such warehouse in accordance with paragraph (2).’’
(c) PENALTY FOR FALSE OR ERRONEOUS INFORMA-
TION TO BONDED DEALERS.—
(1) IN GENERAL.—Section 5684 is amended by
redesignating subsections (b) and (c) as subsections
(c) and (d), respectively, and inserting after sub-
section (a) the following new subsection:
‘‘(b) FALSE OR ERRONEOUS INFORMATION TO BONDED
DEALERS.—Any distilled spirits plant or importer which
furnishes false or erroneous information to a bonded dealer
412
relating to the amount of tax determined on a product, as
required under sections 5212 and 5232, shall, in addition
to any other penalty imposed by this title, be liable for a
penalty equal to the greater of $1,000 or 5 times the amount
of additional tax due on the product.’’
(2) CONFORMING
AMENDMENT.—Subsection (c)
of section 5684, as redesignated by paragraph (1), is
amended by striking ‘‘subsection (a)’’ and inserting
‘‘subsections (a) and (b)’’.
SEC. 1372. ESTABLISHMENT OF DISTILLED SPIRITS PLANT.
Section 5171 is amended—
(1) by striking from subsection (a) ‘‘or proc-
essor’’ and inserting ‘‘processor, or bonded dealer’’,
and
(2) by striking from subsection (b) ‘‘or both.’’
and inserting ‘‘as a bonded dealer, or as any com-
bination thereof.’’
SEC. 1373. DISTILLED SPIRITS PLANTS.
Section 5178(a) is amended by adding at the end the
following new paragraph:
‘‘(5) BONDED DEALER OPERATIONS.—Any per-
son establishing a distilled spirits plant to conduct
operations as a bonded dealer may, as described in
the application for registration—
413
‘‘(A) store distilled spirits in any approved
container on the bonded premises of such plant,
and
‘‘(B) under such regulations as the Sec-
retary shall prescribe, store taxpaid distilled
spirits, beer and wine and such other beverages
and items (products) not subject to tax or regula-
tion under this title on such bonded premises.’’
SEC. 1374. BONDED DEALERS.
(a) IN GENERAL.—Subpart A of part I of subchapter
A of chapter 51 (relating to distilled spirits) is amended
by adding at the end the following new section:
‘‘SEC. 5011. ELECTION TO BE TREATED AS BONDED DEALER.
‘‘(a) ELECTION.—
‘‘(1) IN GENERAL.—Any wholesale dealer, or any
control State entity, may elect to be treated as a
bonded dealer if such wholesale dealer or entity sells
bottled distilled spirits exclusively to 1 or more of the
following: wholesale dealers in liquor, independent re-
tail dealers, or other bonded dealers.
‘‘(2) ELECTION BY CERTAIN ENTITIES NOT PER-
MITTED.—
‘‘(A) RETAIL DEALERS.—Except in the case
of a control State entity, the election under para-
414
graph (1) may not be made by a retail dealer in
liquor.
‘‘(B) SMALL DEALERS.—The election under
paragraph (1) may not be made by any person
who is part of a group treated as a single tax-
payer under section 5061(e)(3) if the gross re-
ceipts of such group from the sale of distilled
spirits during the 12-month period prior to mak-
ing such election is less than $10,000,000.
‘‘(3) CONTROL STATE ENTITIES PERMITTED TO
SELL TO RELATED RETAIL DEALERS.—In the case of
a control State entity, paragraph (1) shall be applied
by substituting ‘retail dealers’ for ‘independent retail
dealers’.
‘‘(b) INDEPENDENT RETAIL DEALER.—For purposes of
subsection (a), the term ‘independent retail dealer’ means,
with respect to a bonded dealer, any retail dealer if—
‘‘(1) the bonded dealer does not have a greater
than 10 percent ownership interest in, or control of,
the retail dealer,
‘‘(2) the retail dealer does not have a greater
than 10 percent ownership interest in, or control of,
the bonded dealer, and
415
‘‘(3) no person has a greater than 10 percent
ownership interest in, or control of, both the bonded
and retail dealer.
For purposes of this subsection, rules similar to the rules
of section 318 shall apply.
‘‘(c) INVENTORY OWNED AT TIME OF ELECTION.—Any
bottled distilled spirits in the inventory of any person elect-
ing under this section to be treated as a bonded dealer shall
not be subject to additional Federal excise tax on such spir-
its as a result of the election being in effect to the extent
that the bonded dealer establishes that the Federal excise
tax previously has been determined and paid at the time
the election becomes effective.
‘‘(d) REVOCATION OF ELECTION.—The election made
under this section may be revoked by the bonded dealer at
any time, but once revoked shall not be made again without
the consent of the Secretary. When the election is revoked,
the bonded dealer shall immediately withdraw the distilled
spirits on determination of tax in accordance with a tax
payment procedure established by the Secretary.
‘‘(e) APPROVAL OF APPLICATION.—Any application
under section 5171(c) submitted by a person electing to be
treated as a bonded dealer shall be subject to the same condi-
tions as an application for a basic permit under section
204(a)(2) of title 27 of the United States Code (the Federal
416
Alcohol Administration Act) and shall be accorded notice
and hearing as described in section 204(b) of such title 27.
‘‘(f) ADDITIONAL TAX.—
‘‘(1) IN GENERAL.—In addition to any other tax
imposed by this chapter, there is hereby imposed on
each bonded dealer a tax for each semimonthly period
under section 5061(d) for which an election under
this section is in effect for such dealer.
‘‘(2) AMOUNT OF TAX.—The tax imposed by this
subsection for any semimonthly period shall be equal
to 1.5 percent of the liability for tax under sections
5001 and 7652 of such dealer for such semimonthly
period.
‘‘(3) PAYMENT OF TAX.—The tax imposed by this
subsection shall be paid with the return of tax for
such semimonthly period.
‘‘(4) TAXPAYERS NOT PAYING ON SEMIMONTHLY
BASIS.—If the taxes referred to in paragraph (2) are
not paid on the basis of semimonthly periods, this
subsection shall be applied by substituting the time
such taxes are required to be paid for such periods.
‘‘(5) TERMINATION.—The tax imposed by this
subsection shall not apply to any semimonthly period
ending after December 31, 2010.’’
(b) CONFORMING AMENDMENTS.—
417
(1) Section 5002(a) is amended by adding the
end the following new paragraphs:
‘‘(16) BONDED DEALER.—The term ‘bonded deal-
er’ means any person who has elected under section
5011 to be treated as a bonded dealer.
‘‘(17) CONTROL STATE ENTITY.—The term ‘con-
trol State entity’ means a State or a political sub-
division of a State in which only the State or a polit-
ical subdivision thereof is allowed under applicable
law to perform distilled spirit operations, or any in-
strumentality of such a State or political subdivi-
sion.’’
(2) The table of sections of subpart A of part I
of subchapter A of chapter 51 and the table of con-
tents of subtitle E are each amended by adding at the
appropriate places:
‘‘Sec. 5011. Election to be treated as bonded dealer.’’
SEC. 1375. TIME FOR COLLECTING TAX ON DISTILLED SPIR-
ITS.
(a) IN GENERAL.—Section 5061(d) is amended by
adding at the end the following new paragraph:
‘‘(6) ADVANCED PAYMENT OF DISTILLED SPIRITS
TAX BY BONDED DEALERS.—Notwithstanding the pre-
ceding provisions of this subsection, in the case of any
tax imposed by section 5001, 5011(f), or 7652 with
respect to a bonded dealer who has an election under
418
section 5011 in effect on September 20 of any year,
any payment which would, but for this paragraph, be
due in October or November of that year, shall be
made on such September 20. No penalty or interest
shall be imposed for the period after such September
20 and before the due date for such payment (deter-
mined without regard to this paragraph) to the extent
that the tax due exceeds the payment which would
have been due in such October and November had the
election under section 5011 been in effect.’’
(b) PAYMENT BY ELECTRONIC FUND TRANSFER.—Sec-
tion 5061(e)(1) is amended by inserting ‘‘and any bonded
dealer,’’ after ‘‘respectively,’’.
SEC. 1376. EXEMPTION FROM OCCUPATIONAL TAX NOT AP-
PLICABLE.
Section 5113(a) is amended by adding at the end the
following new sentence: ‘‘The exemption under this sub-
section shall not apply to a proprietor of a distilled spirits
plant whose premises are used for operations of a bonded
dealer.’’
SEC. 
1377. 
TECHNICAL, 
CONFORMING, 
AND 
CLERICAL
AMENDMENTS.
(a) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 5003(3) is amended by striking ‘‘cer-
tain’’.
419
(2) Subsection (a) of section 5214 is amended by
inserting ‘‘(other than a bonded dealer)’’ after ‘‘dis-
tilled spirits plant’’.
(3) Section 5362(b)(5) is amended by adding at
the end the following new sentence: ‘‘This term shall
not apply to premises used for operations as a bonded
dealer.’’.
(4) Section 5551(a) is amended by inserting
‘‘bonded dealer,’’ after ‘‘processor,’’ each place it ap-
pears.
(5) Section 5601(a) (2), (3), (4), (5), and (b) are
amended by inserting ‘‘, bonded dealer’’ before ‘‘or
processor’’ each place it appears.
(6) Section 5602 is amended—
(A) by inserting ‘‘, warehouseman, proc-
essor, or bonded dealer’’ after ‘‘distiller’’, and
(B) by inserting ‘‘or possessed’’ after ‘‘dis-
tilled’’.
(7) Sections 5180 and 5681 are repealed.
(b) CLERICAL AMENDMENTS.—
(1) The table of sections for subchapter B of
chapter 51 is amended by striking the item relating
to section 5180.
420
(2) The table of sections for part IV of sub-
chapter J of chapter 51 is amended by striking the
item relating to section 5681.
SEC. 1378. COOPERATIVE AGREEMENTS.
(a) STUDY.—The Secretary of the Treasury shall study
and report to Congress concerning possible administrative
efficiencies which could inure to the benefit of the Federal
Government of cooperative agreements with States regard-
ing the collection of distilled spirits excise taxes. Such study
shall include, but not be limited to, possible benefits of the
standardization of forms and collection procedures and
shall be submitted 1 year after the date of the enactment
of this Act.
(b) COOPERATIVE AGREEMENT.—The Secretary of the
Treasury is authorized to enter into such cooperative agree-
ments with States which the Secretary deems will increase
the efficient collection of distilled spirits excise taxes.
SEC. 1379. EFFECTIVE DATE.
(a) IN GENERAL.—Except as otherwise provided in
this section, the amendments made by this subtitle shall
take effect at the beginning of the first calendar quarter that
begins after one hundred and twenty days following enact-
ment.
(b) AUTHORITY TO ESTABLISH DISTILLED SPIRITS
PLANT.—
421
(1) IN GENERAL.—The amendments made by sec-
tion 1372 of this Act shall take effect on the date of
enactment of this Act.
(2) 
DEEMED
QUALIFICATION
IN
CERTAIN
CASES.—Each wholesale dealer—
(A) who is required to file an application
for registration under section 5171(c) of the In-
ternal Revenue Code of 1986,
(B) whose operations are required to be cov-
ered by a basic permit under the Federal Alcohol
Administration Act (27 U.S.C. 203 and 204)
and who has received such a basic permit as an
importer, wholesaler, or both, and
(C) has obtained a bond required under this
subchapter,
shall be treated as having such application approved
as of the first day of the first calendar quarter that
begins at least 9 months after the application is filed
until such time as the Secretary or the Secretary’s
delegate takes final action on such application.
(3) CONTROL STATE ENTITIES.—In the case of a
control State entity, paragraph (2) shall be applied
without regard to subparagraph (B) thereof.
(c) EQUITABLE TREATMENT OF BONDED DEALERS
USING LIFO INVENTORY.—The Secretary of the Treasury
422
or the Secretary’s delegate shall provide such rules as may
be necessary to assure that taxpayers using the last-in first-
out method of inventory valuation do not suffer a recapture
of their LIFO reserve by reason of making the election
under section 5011 of such Code or by reason of operating
a bonded wine cellar as permitted by section 5351 of such
Code.
SEC. 1380. STUDY.
Not later than June 1, 2002, the Secretary of the
Treasury or the Secretary’s delegate shall prepare and sub-
mit to the Congress a report—
(1) on the extent to which (if any) there has been
a decrease in compliance with the provisions of chap-
ter 51 of the Internal Revenue Code of 1986 by reason
of the amendments made by this subtitle, and
(2) on any particular compliance issues in ap-
plying the credit allowable by section 5010 of such
Code under the amendments made by this subtitle.
TITLE XIV—EXTENSIONS OF
EXPIRING PROVISIONS
SEC. 1401. RESEARCH CREDIT.
(a) EXTENSION.—
(1) IN
GENERAL.—Paragraph (1) of section
41(h) (relating to termination) is amended—
423
(A) by striking ‘‘June 30, 1999’’ and insert-
ing ‘‘June 30, 2004’’, and
(B) by striking the material following sub-
paragraph (B).
(2) 
TECHNICAL
AMENDMENT.—Subparagraph
(D) of section 45C(b)(1) is amended by striking
‘‘June 30, 1999’’ and inserting ‘‘June 30, 2004’’.
(3) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to amounts paid or in-
curred after June 30, 1999.
(b) INCREASE IN PERCENTAGES UNDER ALTERNATIVE
INCREMENTAL CREDIT.—
(1) IN GENERAL.—Subparagraph (A) of section
41(c)(4) is amended—
(A) by striking ‘‘1.65 percent’’ and insert-
ing ‘‘2.65 percent’’,
(B) by striking ‘‘2.2 percent’’ and inserting
‘‘3.2 percent’’, and
(C) by striking ‘‘2.75 percent’’ and insert-
ing ‘‘3.75 percent’’.
(2) EFFECTIVE DATE.—The amendments made
by this subsection shall apply to taxable years begin-
ning after June 30, 1999.
424
SEC. 1402. SUBPART F EXEMPTION FOR ACTIVE FINANCING
INCOME.
(a) IN GENERAL.—Sections 953(e)(10) and 954(h)(9)
are each amended—
(1) by striking ‘‘the first taxable year’’ and in-
serting ‘‘taxable years’’, and
(2) by striking ‘‘January 1, 2000’’ and inserting
‘‘January 1, 2005’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1999.
SEC. 1403. TAXABLE INCOME LIMIT ON PERCENTAGE DE-
PLETION FOR MARGINAL PRODUCTION.
(a) IN
GENERAL.—Subparagraph (H) of section
613A(c)(6) is amended by striking ‘‘January 1, 2000’’ and
inserting ‘‘January 1, 2005’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall apply to taxable years beginning after Decem-
ber 31, 1999.
SEC. 1404. WORK OPPORTUNITY CREDIT AND WELFARE-TO-
WORK CREDIT.
(a) TEMPORARY EXTENSION.—Sections 51(c)(4)(B)
and 51A(f) (relating to termination) are each amended by
striking ‘‘June 30, 1999’’ and inserting ‘‘December 31,
2001’’.