(b) TEMPORARY SUSPENSION OF 90 PERCENT LIMIT
ON CERTAIN NOL CARRYBACKS.—Subclause (I) of sec-
tion 56(d)(1)(A)(ii) is amended—
(1) by striking ‘‘or 2002’’ and inserting ‘‘,
2002, 2003, 2004, or 2005’’, and
(2) by striking ‘‘and 2002’’ and inserting ‘‘,
2002, 2003, 2004, or 2005’’.
(c) TECHNICAL CORRECTIONS.—
(1) Subparagraph (H) of section 172(b)(1) is
amended by striking ‘‘a taxpayer which has’’.
(2) Section 102(c)(2) of the Job Creation and
Worker Assistance Act of 2002 (Public Law 107–
147) is amended by striking ‘‘before January 1,
2003’’ and inserting ‘‘after December 31, 1990’’.
(3)(A) Subclause (I) of section 56(d)(1)(A)(i) is
amended by striking ‘‘attributable to carryovers’’.
(B) Subclause (I) of section 56(d)(1)(A)(ii) is
amended—
(i) by striking ‘‘for taxable years’’ and in-
serting ‘‘from taxable years’’, and
(ii) by striking ‘‘carryforwards’’ and insert-
ing ‘‘carryovers’’.
(d) EFFECTIVE DATES.—
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section
shall apply to net operating losses for taxable years
ending after December 31, 2002.
(2) TECHNICAL
CORRECTIONS.—The amend-
ments made by subsection (c) shall take effect as if
included in the amendments made by section 102 of
the Job Creation and Worker Assistance Act of
2002.
(3) ELECTION.—In the case of a net operating
loss for a taxable year ending during 2003—
(A) any election made under section
172(b)(3) of such Code may (notwithstanding
such section) be revoked before November 1,
2003, and
(B) any election made under section 172(j)
of such Code shall (notwithstanding such sec-
tion) be treated as timely made if made before
November 1, 2003.
TITLE III—REDUCTION IN TAXES
ON DIVIDENDS AND CAPITAL
GAINS
SEC. 301. REDUCTION IN CAPITAL GAINS RATES FOR INDI-
VIDUALS; REPEAL OF 5-YEAR HOLDING PE-
RIOD REQUIREMENT.
(a) IN GENERAL.—
(1) Sections 1(h)(1)(B) and 55(b)(3)(B) are
each amended by striking ‘‘10 percent’’ and insert-
ing ‘‘5 percent’’.
(2) The following sections are each amended by
striking ‘‘20 percent’’ and inserting ‘‘15 percent’’:
(A) Section 1(h)(1)(C).
(B) Section 55(b)(3)(C).
(C) Section 1445(e)(1).
(D) The second sentence of section
7518(g)(6)(A).
(E) The second sentence of section
607(h)(6)(A) of the Merchant Marine Act,
1936.
(b) CONFORMING AMENDMENTS.—
(1) Section 1(h) is amended—
(A) by striking paragraphs (2) and (9),
(B) 
by 
redesignating 
paragraphs 
(3)
through (8) as paragraphs (2) through (7), re-
spectively, and
(C) by redesignating paragraphs (10),
(11), and (12) as paragraphs (8), (9), and (10),
respectively.
(2) Paragraph (3) of section 55(b) is amended
by striking ‘‘In the case of taxable years beginning
after December 31, 2000, rules similar to the rules
of section 1(h)(2) shall apply for purposes of sub-
paragraphs (B) and (C).’’.
(3) 
Paragraph 
(7) 
of 
section 
57(a) 
is
amended—
(A) by striking ‘‘42 percent’’ the first place
it appears and inserting ‘‘7 percent’’, and
(B) by striking the last sentence.
(c) TRANSITIONAL RULES
FOR TAXABLE YEARS
WHICH INCLUDE MAY 6, 2003.—For purposes of apply-
ing section 1(h) of the Internal Revenue Code of 1986 in
the case of a taxable year which includes May 6, 2003—
(1) The amount of tax determined under sub-
paragraph (B) of section 1(h)(1) of such Code shall
be the sum of—
(A) 5 percent of the lesser of—
(i) the net capital gain determined by
taking into account only gain or loss prop-
erly taken into account for the portion of
the taxable year on or after May 6, 2003
(determined without regard to collectibles
gain or loss, gain described in section
1(h)(6)(A)(i) of such Code, and section
1202 gain), or
(ii) the amount on which a tax is de-
termined under such subparagraph (with-
out regard to this subsection),
(B) 8 percent of the lesser of—
(i) the qualified 5-year gain (as de-
fined in section 1(h)(9) of the Internal
Revenue Code of 1986, as in effect on the
day before the date of the enactment of
this Act) properly taken into account for
the portion of the taxable year before May
6, 2003, over
(ii) the excess (if any) of—
(I) the amount on which a tax is
determined under such subparagraph
(without regard to this subsection),
over
(II) the amount on which a tax is
determined under subparagraph (A),
plus
(C) 10 percent of the excess (if any) of—
(i) the amount on which a tax is de-
termined under such subparagraph (with-
out regard to this subsection), over