H. R. 2488—119 
percent for taxable years beginning before January 1, 1980)’’ and 
inserting ‘‘90 percent’’. 
(b) IMPOSITION
OF TAX.—Clause (i) of section 857(b)(5)(A) 
(relating to imposition of tax in case of failure to meet certain 
requirements) is amended by striking ‘‘95 percent (90 percent in 
the case of taxable years beginning before January 1, 1980)’’ and 
inserting ‘‘90 percent’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2000. 
PART 
IV—CLARIFICATION 
OF 
EXCEPTION 
FROM IMPERMISSIBLE TENANT SERVICE IN-
COME 
SEC. 1141. CLARIFICATION OF EXCEPTION FOR INDEPENDENT OPERA-
TORS. 
(a) IN GENERAL.—Paragraph (3) of section 856(d) (relating to 
independent contractor defined) is amended by adding at the end 
the following flush sentence: 
‘‘In the event that any class of stock of either the real estate 
investment trust or such person is regularly traded on an 
established securities market, only persons who own, directly 
or indirectly, more than 5 percent of such class of stock shall 
be taken into account as owning any of the stock of such 
class for purposes of applying the 35 percent limitation set 
forth in subparagraph (B) (but all of the outstanding stock 
of such class shall be considered outstanding in order to com-
pute the denominator for purpose of determining the applicable 
percentage of ownership).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2000. 
PART V—MODIFICATION OF EARNINGS AND 
PROFITS RULES 
SEC. 1151. MODIFICATION OF EARNINGS AND PROFITS RULES. 
(a) RULES FOR DETERMINING WHETHER REGULATED INVESTMENT 
COMPANY HAS EARNINGS
AND PROFITS FROM NON-RIC YEAR.— 
Subsection (c) of section 852 is amended by adding at the end 
the following new paragraph: 
‘‘(3) DISTRIBUTIONS TO MEET REQUIREMENTS OF SUBSECTION 
(a)(2)(B).—Any distribution which is made in order to comply 
with the requirements of subsection (a)(2)(B)— 
‘‘(A) shall be treated for purposes of this subsection 
and subsection (a)(2)(B) as made from the earliest earnings 
and profits accumulated in any taxable year to which the 
provisions of this part did not apply rather than the most 
recently accumulated earnings and profits, and 
‘‘(B) to the extent treated under subparagraph (A) as 
made from accumulated earnings and profits, shall not 
be treated as a distribution for purposes of subsection 
(b)(2)(D) and section 855.’’. 
(b) CLARIFICATION OF APPLICATION OF REIT SPILLOVER DIVI-
DEND RULES TO DISTRIBUTIONS TO MEET QUALIFICATION REQUIRE-
MENT.—Subparagraph (B) of section 857(d)(3) is amended by 
inserting before the period ‘‘and section 858’’. 
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H. R. 2488—120 
(c) APPLICATION OF DEFICIENCY DIVIDEND PROCEDURES.—Para-
graph (1) of section 852(e) is amended by adding at the end the 
following new sentence: ‘‘If the determination under subparagraph 
(A) is solely as a result of the failure to meet the requirements 
of subsection (a)(2), the preceding sentence shall also apply for 
purposes of applying subsection (a)(2) to the non-RIC year.’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions after December 31, 2000. 
Subtitle C—Modification of At-Risk Rules 
for Publicly Traded Nonrecourse Debt 
SEC. 1161. 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 treated as amount at 
risk) is amended by striking ‘‘share of’’ and all that follows and 
inserting ‘‘share of— 
‘‘(i) any qualified nonrecourse financing 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 financing, 
‘‘(II) is qualified publicly traded debt, and 
‘‘(III) is not borrowed by the taxpayer from 
a person described in subclause (I), (II), or (III) 
of section 49(a)(1)(D)(iv).’’. 
(b) QUALIFIED PUBLICLY TRADED DEBT.—Paragraph (6) of sec-
tion 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 limitation in section 
163(i)(1)(B).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to debt instruments issued after December 31, 1999. 
Subtitle D—Treatment of Certain 
Contributions to Capital of Retailers 
SEC. 1171. EXCLUSION FROM GROSS INCOME FOR CERTAIN CONTRIBU-
TIONS TO THE CAPITAL OF CERTAIN RETAILERS. 
(a) IN GENERAL.—Section 118 (relating to contributions to the 
capital of a corporation) is amended by redesignating subsections 
(d) and (e) as subsections (e) and (f ), respectively, and by inserting 
after subsection (c) the following new subsection: 
‘‘(d) 
SAFE
HARBOR
FOR
CONTRIBUTIONS
TO
CERTAIN 
RETAILERS.— 
‘‘(1) GENERAL RULE.—For purposes of this section, the term 
‘contribution to the capital of the taxpayer’ includes any amount 
of money or other property received by the taxpayer if— 
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H. R. 2488—121 
‘‘(A) the taxpayer has entered into an agreement to 
operate (or cause to be operated) a qualified retail business 
at a particular location for a period of at least 15 years, 
‘‘(B)(i) immediately after the receipt of such money 
or other property, the taxpayer owns the land and the 
structure to be used by the taxpayer in carrying on a 
qualified retail business at such location, or 
‘‘(ii) the taxpayer uses such amount to acquire owner-
ship of at least such land and structure, 
‘‘(C) such amount meets the requirements of the 
expenditure rule of paragraph (2), and 
‘‘(D) the contributor of such amount does not hold 
a beneficial interest in any property located on the premises 
of such qualified retail business other than de minimis 
amounts of property associated with the operation of prop-
erty adjacent to such premises. 
‘‘(2) EXPENDITURE RULE.—An amount meets the require-
ments of this paragraph if— 
‘‘(A) an amount equal to such amount is expended 
for the acquisition of land or for acquisition or construction 
of other property described in section 1231(b)— 
‘‘(i) which was the purpose motivating the contribu-
tion, and 
‘‘(ii) which is used predominantly in a qualified 
retail business at the location referred to in paragraph 
(1)(A), 
‘‘(B) the expenditure referred to in subparagraph (A) 
occurs before the end of the second taxable year after 
the year in which such amount was received, and 
‘‘(C) accurate records are kept of the amounts contrib-
uted and expenditures made on the basis of the project 
for which the contribution was made and on the basis 
of the year of the contribution expenditure. 
‘‘(3) DEFINITION OF QUALIFIED RETAIL BUSINESS.— 
‘‘(A) IN GENERAL.—Except as provided in subparagraph 
(B), the term ‘qualified retail business’ means a trade or 
business of selling tangible personal property to the general 
public if the premises on which such trade or business 
is conducted is in close proximity to property that the 
contributor of the amount referred to in paragraph (1) 
is developing or operating for profit (or, in the case of 
a contributor which is a governmental entity, is attempting 
to revitalize). 
‘‘(B) SERVICES.—A trade or business shall not fail to 
be treated as a qualified retail business by reason of sales 
of services if such sales are incident to the sale of tangible 
personal property or if the services are de minimis in 
amount. 
‘‘(4) SPECIAL RULES.— 
‘‘(A) LEASES.—For purposes of paragraph (1)(B)(i), 
property shall be treated as owned by the taxpayer if 
the taxpayer is the lessee of such property under a lease 
having a term of at least 30 years and on which only 
nominal rent is required. 
‘‘(B) CONTROLLED GROUPS.—For purposes of this sub-
section, all persons treated as a single employer under 
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H. R. 2488—122 
subsection (a) or (b) of section 52 shall be treated as one 
person. 
‘‘(5) DISALLOWANCE OF DEDUCTIONS AND CREDITS; ADJUSTED 
BASIS.—Notwithstanding any other provision of this subtitle, 
no deduction or credit shall be allowed for, or by reason of, 
any amount received by the taxpayer which constitutes a con-
tribution to capital to which this subsection applies. The 
adjusted basis of any property acquired with the contributions 
to which this subsection applies shall be reduced by the amount 
of the contributions to which this subsection applies. 
‘‘(6) REGULATIONS.—The Secretary shall prescribe such 
regulations are appropriate to prevent the abuse of the purposes 
of the subsection, including regulations which allocate income 
and deductions (or adjust the amount excludable under this 
subsection) in cases in which— 
‘‘(A) payments in excess of fair market value are paid 
to the contributor by the taxpayer, or 
‘‘(B) the contributor and the taxpayer are related par-
ties.’’. 
(b) CONFORMING AMENDMENT.—Subsection (e) of section 118 
(as redesignated by subsection (a)) is amended by adding at the 
end the following flush sentence: 
‘‘Rules similar to the rules of the preceding sentence shall apply 
to any amount treated as a contribution to the capital of the 
taxpayer under subsection (d).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to amounts received after December 31, 1999. 
Subtitle E—Private Activity Bond Volume 
Cap 
SEC. 1181. ACCELERATION OF PHASE-IN OF INCREASE IN VOLUME 
CAP ON PRIVATE ACTIVITY BONDS. 
(a) IN GENERAL.—The table contained in section 146(d)(2) 
(relating to per capita limit; aggregate limit) is amended to read 
as follows: 
‘‘Calendar Year 
Per Capita 
Limit 
Aggregate 
Limit 
2000 ......................................................................
$55.00 
165,000,000
2001 ......................................................................
60.00 
180,000,000
2002 ......................................................................
65.00 
195,000,000
2003 ......................................................................
70.00 
210,000,000
2004 and thereafter ............................................
75.00 
225,000,000.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to calendar years beginning after 1999. 
Subtitle F—Deduction for Renovating 
Historic Homes 
SEC. 1191. DEDUCTION FOR RENOVATING HISTORIC HOMES. 
(a) IN GENERAL.—Part VII of subchapter B of chapter 1 (relating 
to additional itemized deductions for individuals) is amended by 
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