In the Senate of the United States,
November 3, 1999.
Resolved, That the bill from the House of Representa-
tives (H.R. 434) entitled ‘‘An Act to authorize a new trade
and investment policy for sub-Sahara Africa.’’, do pass with
the following
AMENDMENTS:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Trade and Development Act of 1999’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
TITLE I—EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-
SAHARAN AFRICA
Subtitle A—Trade Policy for Sub-Saharan Africa
Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Statement of policy.
Sec. 104. Sub-Saharan Africa defined.
Subtitle B—Extension of Certain Trade Benefits to Sub-Saharan Africa
Sec. 111. Eligibility for certain benefits.
Sec. 112. Treatment of certain textiles and apparel.
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Sec. 113. United States-sub-Saharan African trade and economic cooperation
forum.
Sec. 114. United States-sub-Saharan Africa free trade area.
Sec. 115. Reporting requirement.
Sec. 116. Access to HIV/AIDS pharmaceuticals and medical technologies.
TITLE II—TRADE BENEFITS FOR CARIBBEAN BASIN
Subtitle A—Trade Policy for Caribbean Basin Countries
Sec. 201. Short title.
Sec. 202. Findings and policy.
Sec. 203. Definitions.
Subtitle B—Trade Benefits for Caribbean Basin Countries
Sec. 211. Temporary provisions to provide additional trade benefits to certain
beneficiary countries.
Sec. 212. Adequate and effective protection for intellectual property rights.
Subtitle C—Cover Over of Tax on Distilled Spirits
Sec. 221. Suspension of limitation on cover over of tax on distilled spirits.
TITLE III—GENERALIZED SYSTEM OF PREFERENCES
Sec. 301. Extension of duty-free treatment under generalized system of pref-
erences.
Sec. 302. Entry procedures for foreign trade zone operations.
TITLE IV—TRADE ADJUSTMENT ASSISTANCE
Sec. 401. Trade adjustment assistance.
Sec. 402. Trade adjustment assistance for textile and apparel workers.
TITLE V—REVENUE PROVISIONS
Sec. 501. Modification of installment method and repeal of installment method for
accrual method taxpayers.
Sec. 502. Limitations on welfare benefit funds of 10 or more employer plans.
Sec. 503. Treatment of gain from constructive ownership transactions.
Sec. 504. Limitation on use of nonaccrual experience method of accounting.
Sec. 505. Allocation of basis on transfers of intangibles in certain nonrecognition
transactions.
Sec. 506. Increase in elective withholding rate for nonperiodic distributions from
deferred compensation plans.
TITLE VI—TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Subtitle A—Amendments to the Trade Act of 1974
Sec. 601. Short title.
Sec. 602. Trade adjustment assistance for farmers.
Subtitle B—Revenue Provisions Relating to Trade Adjustment Assistance
Sec. 610. Reference.
Sec. 611. Modifications to asset diversification test.
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Sec. 612. Treatment of income and services provided by taxable REIT subsidi-
aries.
Sec. 613. Taxable REIT subsidiary.
Sec. 614. Limitation on earnings stripping.
Sec. 615. 100 percent tax on improperly allocated amounts.
Sec. 616. Effective date.
Sec. 617. Health care REITS.
Sec. 618. Conformity with regulated investment company rules.
Sec. 619. Clarification of exception for independent operators.
Sec. 620. Modification of earnings and profits rules.
Sec. 621. Modification of estimated tax rules for closely held real estate invest-
ment trusts.
Sec. 622. Controlled entities ineligible for REIT status.
Sec. 623. Modification of individual estimated tax safe harbor.
TITLE VII—OTHER TRADE PROVISIONS
Sec. 701. Normal trade relations for Albania.
Sec. 702. Normal trade relations for Kyrgyzstan.
Sec. 703. Report on employment and trade adjustment assistance.
Sec. 704. Trade adjustment assistance.
Sec. 705. Report on debt relief.
Sec. 706. HIV/AIDS effect on the sub-Saharan African workforce.
Sec. 707. Goods made with forced or indentured child labor.
Sec. 708. Reliquidation of certain nuclear fuel assemblies.
Sec. 709. Sense of the Senate regarding fair access to Japanese telecommuni-
cations facilities and services.
Sec. 710. Reports to the Finance and Ways and Means Committees.
Sec. 711. Clarification of section 334 of the Uruguay Round Agreements Act.
Sec. 712. Chief Agricultural Negotiator.
Sec. 713. Revision of retaliation list or other remedial action.
Sec. 714. Sense of Congress regarding comprehensive debt relief for the world’s
poorest countries.
Sec. 715. Report on trade adjustment assistance for agricultural commodity pro-
ducers.
Sec. 716. Study on improving African agricultural practices.
Sec. 717. Anticorruption efforts.
Sec. 718. Sense of the Senate regarding efforts to combat desertification in Africa
and other nations.
Sec. 719. Report on World Trade Organization Ministerial.
Sec. 720. Marking of imported jewelry.
Sec. 721. Sense of the Senate regarding tariff inversions.
Sec. 722. Limitations on benefits.
Sec. 723. Agriculture trade negotiating objectives and consultations with Con-
gress.
Sec. 724. Application of denial of foreign tax credit regarding trade and invest-
ment with respect to certain foreign countries.
Sec. 725. Unreasonable acts, policies, and practices.
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TITLE I—EXTENSION OF CER-
TAIN 
TRADE 
BENEFITS 
TO
SUB-SAHARAN AFRICA
Subtitle A—Trade Policy for Sub-
Saharan Africa
SEC. 101. SHORT TITLE.
This title may be cited as the ‘‘African Growth and
Opportunity Act’’.
SEC. 102. FINDINGS.
Congress finds that—
(1) it is in the mutual interest of the United
States and the countries of sub-Saharan Africa to
promote stable and sustainable economic growth and
development in sub-Saharan Africa;
(2) the 48 countries of sub-Saharan Africa form
a region richly endowed with both natural and
human resources;
(3) sub-Saharan Africa represents a region of
enormous economic potential and of enduring polit-
ical significance to the United States;
(4) the region has experienced a rise in both eco-
nomic development and political freedom as countries
in sub-Saharan Africa have taken steps toward liber-
alizing their economies and encouraged broader par-
ticipation in the political process;
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(5) the countries of sub-Saharan Africa have
made progress toward regional economic integration
that can have positive benefits for the region;
(6) despite those gains, the per capita income in
sub-Saharan Africa averages less than $500 annually;
(7) United States foreign direct investment in
the region has fallen in recent years and the sub-Sa-
haran African region receives only minor inflows of
direct investment from around the world;
(8) trade between the United States and sub-Sa-
haran Africa, apart from the import of oil, remains
an insignificant part of total United States trade;
(9) trade and investment, as the American expe-
rience has shown, can represent powerful tools both
for economic development and for building a stable
political environment in which political freedom can
flourish;
(10) increased trade and investment flows have
the greatest impact in an economic environment in
which trading partners eliminate barriers to trade
and capital flows and encourage the development of a
vibrant private sector that offers individual African
citizens the freedom to expand their economic oppor-
tunities and provide for their families;
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(11) offering the countries of sub-Saharan Africa
enhanced trade preferences will encourage both higher
levels of trade and direct investment in support of the
positive economic and political developments under
way throughout the region; and
(12) encouraging the reciprocal reduction of
trade and investment barriers in Africa will enhance
the benefits of trade and investment for the region as
well as enhance commercial and political ties between
the United States and sub-Saharan Africa.
SEC. 103. STATEMENT OF POLICY.
Congress supports—
(1) encouraging increased trade and investment
between the United States and sub-Saharan Africa;
(2) reducing tariff and nontariff barriers and
other obstacles to sub-Saharan African and United
States trade;
(3) expanding United States assistance to sub-
Saharan Africa’s regional integration efforts;
(4) negotiating reciprocal and mutually bene-
ficial trade agreements, including the possibility of es-
tablishing free trade areas that serve the interests of
both the United States and the countries of sub-Saha-
ran Africa;
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(5) focusing on countries committed to account-
able government, economic reform, and the eradi-
cation of poverty;
(6) strengthening and expanding the private sec-
tor in sub-Saharan Africa;
(7) supporting the development of civil societies
and political freedom in sub-Saharan Africa; and
(8) establishing a United States-Sub-Saharan
African Economic Cooperation Forum.
SEC. 104. SUB-SAHARAN AFRICA DEFINED.
In this title, the terms ‘‘sub-Saharan Africa’’, ‘‘sub-
Saharan African country’’, ‘‘country in sub-Saharan Afri-
ca’’, and ‘‘countries in sub-Saharan Africa’’ refer to the fol-
lowing:
(1) Republic of Angola (Angola).
(2) Republic of Botswana (Botswana).
(3) Republic of Burundi (Burundi).
(4) Republic of Cape Verde (Cape Verde).
(5) Republic of Chad (Chad).
(6) Democratic Republic of Congo.
(7) Republic of the Congo (Congo).
(8) Republic of Djibouti (Djibouti).
(9) State of Eritrea (Eritrea).
(10) Gabonese Republic (Gabon).
(11) Republic of Ghana (Ghana).
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(12) 
Republic 
of 
Guinea-Bissau 
(Guinea-
Bissau).
(13) Kingdom of Lesotho (Lesotho).
(14) Republic of Madagascar (Madagascar).
(15) Republic of Mali (Mali).
(16) Republic of Mauritius (Mauritius).
(17) Republic of Namibia (Namibia).
(18) Federal Republic of Nigeria (Nigeria).
(19) Democratic Republic of Sao Tome and
Principe (Sao Tome and Principe).
(20) Republic of Sierra Leone (Sierra Leone).
(21) Somalia.
(22) Kingdom of Swaziland (Swaziland).
(23) Republic of Togo (Togo).
(24) Republic of Zimbabwe (Zimbabwe).
(25) Republic of Benin (Benin).
(26) Burkina Faso (Burkina).
(27) Republic of Cameroon (Cameroon).
(28) Central African Republic.
(29) Federal Islamic Republic of the Comoros
(Comoros).
(30) Republic of Cote d’Ivoire (Cote d’Ivoire).
(31) Republic of Equatorial Guinea (Equatorial
Guinea).
(32) Ethiopia.
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(33) Republic of the Gambia (Gambia).
(34) Republic of Guinea (Guinea).
(35) Republic of Kenya (Kenya).
(36) Republic of Liberia (Liberia).
(37) Republic of Malawi (Malawi).
(38) Islamic Republic of Mauritania (Mauri-
tania).
(39) Republic of Mozambique (Mozambique).
(40) Republic of Niger (Niger).
(41) Republic of Rwanda (Rwanda).
(42) Republic of Senegal (Senegal).
(43) Republic of Seychelles (Seychelles).
(44) Republic of South Africa (South Africa).
(45) Republic of Sudan (Sudan).
(46) United Republic of Tanzania (Tanzania).
(47) Republic of Uganda (Uganda).
(48) Republic of Zambia (Zambia).
Subtitle B—Extension of Certain
Trade Benefits to Sub-Saharan
Africa
SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.
(a) IN GENERAL.—Title V of the Trade Act of 1974
is amended by inserting after section 506 the following new
section:
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‘‘SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN
COUNTRIES FOR CERTAIN BENEFITS.
‘‘(a) AUTHORITY TO DESIGNATE.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law, the President is authorized to des-
ignate a country listed in section 104 of the African
Growth and Opportunity Act as a beneficiary sub-Sa-
haran African country eligible for the benefits de-
scribed in subsection (b), if the President determines
that the country—
‘‘(A) has established, or is making continual
progress toward establishing—
‘‘(i) a market-based economy, where
private property rights are protected and
the principles of an open, rules-based trad-
ing system are observed;
‘‘(ii) a democratic society, where the
rule of law, political freedom, participatory
democracy, and the right to due process and
a fair trial are observed;
‘‘(iii) an open trading system through
the elimination of barriers to United States
trade and investment and the resolution of
bilateral trade and investment disputes;
‘‘(iv) economic policies to reduce pov-
erty, increase the availability of health care
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and 
educational 
opportunities, 
expand
physical infrastructure, and promote the es-
tablishment of private enterprise; and
‘‘(v) a system to combat corruption
and bribery, such as signing the Convention
on Combating Bribery of Foreign Public
Officials in International Business Trans-
actions;
‘‘(B) does not engage in gross violations of
internationally recognized human rights or pro-
vide support for acts of international terrorism
and cooperates in international efforts to elimi-
nate human rights violations and terrorist ac-
tivities; and
‘‘(C) subject to the authority granted to the
President under section 502 (a), (d), and (e),
otherwise satisfies the eligibility criteria set forth
in section 502.
‘‘(2) MONITORING
AND
REVIEW
OF
CERTAIN
COUNTRIES.—The President shall monitor and review
the progress of each country listed in section 104 of
the African Growth and Opportunity Act in meeting
the requirements described in paragraph (1) in order
to determine the current or potential eligibility of
each country to be designated as a beneficiary sub-Sa-
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haran African country for purposes of subsection (a).
The President shall include the reasons for the Presi-
dent’s determinations in the annual report required
by section 115 of the African Growth and Oppor-
tunity Act.
‘‘(3) CONTINUING COMPLIANCE.—If the President
determines that a beneficiary sub-Saharan African
country is not making continual progress in meeting
the requirements described in paragraph (1), the
President shall terminate the designation of that
country as a beneficiary sub-Saharan African coun-
try for purposes of this section, effective on January
1 of the year following the year in which such deter-
mination is made.
‘‘(b) PREFERENTIAL TARIFF TREATMENT FOR CER-
TAIN ARTICLES.—
‘‘(1) IN GENERAL.—The President may provide
duty-free treatment for any article described in sec-
tion 503(b)(1) (B) through (G) (except for textile lug-
gage) that is the growth, product, or manufacture of
a beneficiary sub-Saharan African country described
in subsection (a), if, after receiving the advice of the
International Trade Commission in accordance with
section 503(e), the President determines that such ar-
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ticle is not import-sensitive in the context of imports
from beneficiary sub-Saharan African countries.
‘‘(2) RULES
OF
ORIGIN.—The duty-free treat-
ment provided under paragraph (1) shall apply to
any article described in that paragraph that meets
the requirements of section 503(a)(2), except that—
‘‘(A) if the cost or value of materials pro-
duced in the customs territory of the United
States is included with respect to that article, an
amount not to exceed 15 percent of the appraised
value of the article at the time it is entered that
is attributed to such United States cost or value
may be applied toward determining the percent-
age referred to in subparagraph (A) of section
503(a)(2); and
‘‘(B) the cost or value of the materials in-
cluded with respect to that article that are pro-
duced in one or more beneficiary sub-Saharan
African countries shall be applied in deter-
mining such percentage.
‘‘(c) BENEFICIARY SUB-SAHARAN AFRICAN COUN-
TRIES, ETC.—For purposes of this title, the terms ‘bene-
ficiary sub-Saharan African country’ and ‘beneficiary sub-
Saharan African countries’ mean a country or countries
listed in section 104 of the African Growth and Oppor-
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tunity Act that the President has determined is eligible
under subsection (a) of this section.’’.
(b) WAIVER OF COMPETITIVE NEED LIMITATION.—
Section 503(c)(2)(D) of the Trade Act of 1974 (19 U.S.C.
2463(c)(2)(D)) is amended to read as follows:
‘‘(D) LEAST-DEVELOPED BENEFICIARY DE-
VELOPING COUNTRIES AND BENEFICIARY SUB-SA-
HARAN AFRICAN COUNTRIES.—Subparagraph (A)
shall not apply to any least-developed beneficiary
developing country or any beneficiary sub-Saha-
ran African country.’’.
(c) TERMINATION.—Title V of the Trade Act of 1974
is amended by inserting after section 506A, as added by
subsection (a), the following new section:
‘‘SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN
AFRICAN COUNTRIES.
‘‘In the case of a country listed in section 104 of the
African Growth and Opportunity Act that is a beneficiary
developing country, duty-free treatment provided under this
title shall remain in effect through September 30, 2006.’’.
(d) CLERICAL AMENDMENTS.—The table of contents
for title V of the Trade Act of 1974 is amended by inserting
after the item relating to section 505 the following new
items:
‘‘506A. Designation of sub-Saharan African countries for certain benefits.
‘‘506B. Termination of benefits for sub-Saharan African countries.’’.
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(e) EFFECTIVE DATE.—The amendments made by this
section take effect on October 1, 2000.
SEC. 112. TREATMENT OF CERTAIN TEXTILES AND AP-
PAREL.
(a) PREFERENTIAL
TREATMENT.—Notwithstanding
any other provision of law, textile and apparel articles de-
scribed in subsection (b) (including textile luggage) im-
ported from a beneficiary sub-Saharan African country, de-
scribed in section 506A(c) of the Trade Act of 1974, shall
enter the United States free of duty and free of any quan-
titative limitations, if—
(1) the country adopts an efficient visa system to
guard against unlawful transshipment of textile and
apparel goods and the use of counterfeit documents;
and
(2) the country enacts legislation or promulgates
regulations that would permit United States Customs
Service verification teams to have the access necessary
to investigate thoroughly allegations of transshipment
through such country.
(b) PRODUCTS COVERED.—The preferential treatment
described in subsection (a) shall apply only to the following
textile and apparel products:
(1) APPAREL
ARTICLES
ASSEMBLED
IN
BENE-
FICIARY
SUB-SAHARAN
AFRICAN
COUNTRIES.—Ap-
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parel articles assembled in one or more beneficiary
sub-Saharan African countries from fabrics wholly
formed and cut in the United States, from yarns
wholly formed in the United States that are—
(A) entered under subheading 9802.00.80 of
the Harmonized Tariff Schedule of the United
States; or
(B) entered under chapter 61 or 62 of the
Harmonized Tariff Schedule of the United
States, if, after such assembly, the articles would
have qualified for entry under subheading
9802.00.80 of the Harmonized Tariff Schedule of
the United States but for the fact that the arti-
cles were subjected to stone-washing, enzyme-
washing, acid washing, perma-pressing, oven-
baking, bleaching, garment-dyeing, or other simi-
lar processes.
(2) APPAREL ARTICLES CUT AND ASSEMBLED IN
BENEFICIARY
SUB-SAHARAN
AFRICAN
COUNTRIES.—
Apparel articles cut in one or more beneficiary sub-
Saharan African countries from fabric wholly formed
in the United States from yarns wholly formed in the
United States, if such articles are assembled in one or
more beneficiary sub-Saharan African countries with
thread formed in the United States.
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(3) HANDLOOMED, HANDMADE, AND FOLKLORE
ARTICLES.—A handloomed, handmade, or folklore ar-
ticle of a beneficiary sub-Saharan African country or
countries that is certified as such by the competent
authority of such beneficiary country or countries.
For purposes of this paragraph, the President, after
consultation with the beneficiary sub-Saharan Afri-
can country or countries concerned, shall determine
which, if any, particular textile and apparel goods of
the country (or countries) shall be treated as being
handloomed, handmade, or folklore goods.
(c) PENALTIES FOR TRANSSHIPMENTS.—
(1) PENALTIES FOR EXPORTERS.—If the Presi-
dent determines, based on sufficient evidence, that an
exporter has engaged in transshipment with respect to
textile or apparel products from a beneficiary sub-Sa-
haran African country, then the President shall deny
all benefits under this section and section 506A of the
Trade Act of 1974 to such exporter, any successor of
such exporter, and any other entity owned or operated
by the principal of the exporter for a period of 5
years.
(2) 
TRANSSHIPMENT
DESCRIBED.—Trans-
shipment within the meaning of this subsection has
occurred when preferential treatment for a textile or
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apparel article under subsection (a) has been claimed
on the basis of material false information concerning
the country of origin, manufacture, processing, or as-
sembly of the article or any of its components. For
purposes of this paragraph, false information is mate-
rial if disclosure of the true information would mean
or would have meant that the article is or was ineli-
gible for preferential treatment under subsection (a).
(d) TECHNICAL ASSISTANCE.—The Customs Service
shall provide technical assistance to the beneficiary sub-Sa-
haran African countries for the implementation of the re-
quirements set forth in subsection (a) (1) and (2).
(e) MONITORING AND REPORTS TO CONGRESS.—The
Customs Service shall monitor and the Commissioner of
Customs shall submit to Congress, not later than March 31
of each year that this section is in effect, a report on the
effectiveness of the anti-circumvention systems described in
this section and on measures taken by countries in sub-Sa-
haran Africa which export textiles or apparel to the United
States to prevent circumvention as described in article 5
of the Agreement on Textiles and Clothing.
(f) SAFEGUARD.—The President shall have the author-
ity to impose appropriate remedies, including restrictions
on or the removal of quota-free and duty-free treatment pro-
vided under this section, in the event that textile and ap-
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parel articles from a beneficiary sub-Saharan African coun-
try are being imported in such increased quantities as to
cause serious damage, or actual threat thereof, to the domes-
tic industry producing like or directly competitive articles.
The President shall exercise his authority under this sub-
section consistent with the Agreement on Textiles and Cloth-
ing.
(g) DEFINITIONS.—In this section:
(1) AGREEMENT ON TEXTILES AND CLOTHING.—
The term ‘‘Agreement on Textiles and Clothing’’
means the Agreement on Textiles and Clothing re-
ferred to in section 101(d)(4) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(4)).
(2) BENEFICIARY SUB-SAHARAN AFRICAN COUN-
TRY, ETC.—The terms ‘‘beneficiary sub-Saharan Afri-
can country’’ and ‘‘beneficiary sub-Saharan African
countries’’ have the same meaning as such terms have
under section 506A(c) of the Trade Act of 1974.
(3) CUSTOMS
SERVICE.—The term ‘‘Customs
Service’’ means the United States Customs Service.
(h) EFFECTIVE DATE.—The amendments made by this
section take effect on October 1, 2000 and shall remain in
effect through September 30, 2006.
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SEC. 113. UNITED STATES-SUB-SAHARAN AFRICAN TRADE
AND ECONOMIC COOPERATION FORUM.
(a) DECLARATION OF POLICY.—The President shall
convene annual meetings between senior officials of the
United States Government and officials of the governments
of sub-Saharan African countries in order to foster close
economic ties between the United States and sub-Saharan
Africa.
(b) ESTABLISHMENT.—Not later than 12 months after
the date of enactment of this Act, the President, after con-
sulting with the officials of interested sub-Saharan African
governments, shall establish a United States-Sub-Saharan
African Trade and Economic Cooperation Forum (in this
section referred to as the ‘‘Forum’’).
(c) REQUIREMENTS.—In creating the Forum, the
President shall meet the following requirements:
(1) FIRST MEETING.—The President shall direct
the Secretary of Commerce, the Secretary of the
Treasury, the Secretary of State, and the United
States Trade Representative to invite their counter-
parts from interested sub-Saharan African govern-
ments and representatives of appropriate regional or-
ganizations to participate in the first annual meeting
to discuss expanding trade and investment relations
between the United States and sub-Saharan Africa.
(2) NONGOVERNMENTAL ORGANIZATIONS.—
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(A) IN GENERAL.—The President, in con-
sultation with Congress, shall invite United
States nongovernmental organizations to host
meetings with their counterparts from sub-Saha-
ran Africa in conjunction with meetings of the
Forum for the purpose of discussing the issues
described in paragraph (1).
(B) PRIVATE SECTOR.—The President, in
consultation with Congress, shall invite United
States representatives of the private sector to host
meetings with their counterparts from sub-Saha-
ran Africa in conjunction with meetings of the
Forum for the purpose of discussing the issues
described in paragraph (1).
(3) ANNUAL MEETINGS.—As soon as practicable
after the date of enactment of this Act, the President
shall meet with the heads of the governments of inter-
ested sub-Saharan African countries for the purpose
of discussing the issues described in paragraph (1).
SEC. 114. UNITED STATES-SUB-SAHARAN AFRICA FREE
TRADE AREA.
(a) IN GENERAL.—The President shall examine the
feasibility of negotiating a free trade agreement (or agree-
ments) with interested sub-Saharan African countries.
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(b) REPORT TO CONGRESS.—Not later than 12 months
after the date of enactment of this Act, the President shall
submit a report to the Committee on Finance of the Senate
and the Committee on Ways and Means of the House of
Representatives regarding the President’s conclusions on the
feasibility of negotiating such agreement (or agreements).
If the President determines that the negotiation of any such
free trade agreement is feasible, the President shall provide
a detailed plan for such negotiation that outlines the objec-
tives, timing, any potential benefits to the United States
and sub-Saharan Africa, and the likely economic impact
of any such agreement.
SEC. 115. REPORTING REQUIREMENT.
Not later than 1 year after the date of enactment of
this Act, and annually thereafter for 4 years, the President
shall submit a report to Congress on the implementation
of this title.
SEC. 116. ACCESS TO HIV/AIDS PHARMACEUTICALS AND
MEDICAL TECHNOLOGIES.
(a) FINDINGS.—Congress finds that—
(1) since the onset of the worldwide HIV/AIDS
epidemic, approximately 34,000,000 people living in
sub-Saharan Africa have been infected with the dis-
ease;
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(2) of those infected, approximately 11,500,000
have died; and
(3) the deaths represent 83 percent of the total
HIV/AIDS-related deaths worldwide.
(b) SENSE OF CONGRESS.—It is the sense of Congress
that—
(1) it is in the interest of the United States to
take all necessary steps to prevent further spread of
infectious disease, particularly HIV/AIDS;
(2) there is critical need for effective incentives
to develop new pharmaceuticals, vaccines, and thera-
pies to combat the HIV/AIDS crisis, especially effec-
tive global standards for protecting pharmaceutical
and medical innovation;
(3) the overriding priority for responding to the
crisis on HIV/AIDS in sub-Saharan Africa should be
the development of the infrastructure necessary to de-
liver adequate health care services, and of public edu-
cation to prevent transmission and infection, rather
than legal standards issues; and
(4) individual countries should have the ability
to determine the availability of pharmaceuticals and
health care for their citizens in general, and particu-
larly with respect to the HIV/AIDS epidemic.
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(c) LIMITATION ON USE OF FUNDS.—Funds appro-
priated or otherwise made available to any department or
agency of the United States may not be obligated or ex-
pended to seek, through negotiation or otherwise, the revoca-
tion or revision of any intellectual property or competition
law or policy that regulates HIV/AIDS pharmaceuticals or
medical technologies of a beneficiary sub-Saharan African
country if the law or policy promotes access to HIV/AIDS
pharmaceuticals or medical technologies and the law or pol-
icy of the country provides adequate and effective intellec-
tual property protection consistent with the Agreement on
Trade-Related Aspects of Intellectual Property Rights re-
ferred to in section 101(d)(15) of the Uruguay Round
Agreements Act.
TITLE II—TRADE BENEFITS FOR
CARIBBEAN BASIN
Subtitle A—Trade Policy for
Caribbean Basin Countries
SEC. 201. SHORT TITLE.
This title may be cited as the ‘‘United States-Carib-
bean Basin Trade Enhancement Act’’.
SEC. 202. FINDINGS AND POLICY.
(a) FINDINGS.—Congress makes the following findings:
(1) The Caribbean Basin Economic Recovery Act
(referred to in this title as ‘‘CBERA’’) represents a
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permanent commitment by the United States to en-
courage the development of strong democratic govern-
ments and revitalized economies in neighboring coun-
tries in the Caribbean Basin.
(2) Thirty-four democratically elected leaders
agreed at the 1994 Summit of the Americas to con-
clude negotiation of a Free Trade Area of the Amer-
icas (referred to in this title as ‘‘FTAA’’) by the year
2005.
(3) The economic security of the countries in the
Caribbean Basin will be enhanced by the completion
of the FTAA.
(4) Offering temporary benefits to Caribbean
Basin countries will enhance trade between the
United States and the Caribbean Basin, encourage
development of trade and investment policies that will
facilitate participation of Caribbean Basin countries
in the FTAA, preserve the United States commitment
to Caribbean Basin beneficiary countries, help further
economic development in the Caribbean Basin region,
and accelerate the trend toward more open economies
in the region.
(5) Promotion of the growth of free enterprise
and economic opportunity in the Caribbean Basin
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will enhance the national security interests of the
United States.
(6) Increased trade and economic activity be-
tween the United States and Caribbean Basin bene-
ficiary countries will create expanding export oppor-
tunities for United States businesses and workers.
(b) POLICY.—It is the policy of the United States to—
(1) offer Caribbean Basin beneficiary countries
willing to prepare to become a party to the FTAA or
a comparable trade agreement, tariff treatment essen-
tially equivalent to that accorded to products of
NAFTA countries for certain products not currently
eligible for duty-free treatment under the CBERA;
and
(2) seek the participation of Caribbean Basin
beneficiary countries in the FTAA or a trade agree-
ment comparable to the FTAA at the earliest possible
date, with the goal of achieving full participation in
such agreement not later than 2005.
SEC. 203. DEFINITIONS.
In this title:
(1) BENEFICIARY
COUNTRY.—The term ‘‘bene-
ficiary country’’ has the meaning given the term in
section 212(a)(1)(A) of the Caribbean Basin Eco-
nomic Recovery Act (19 U.S.C. 2702(a)(1)(A)).
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(2) CBTEA.—The term ‘‘CBTEA’’ means the
United States-Caribbean Basin Trade Enhancement
Act.
(3) NAFTA.—The term ‘‘NAFTA’’ means the
North American Free Trade Agreement entered into
between the United States, Mexico, and Canada on
December 17, 1992.
(4) NAFTA 
COUNTRY.—The term ‘‘NAFTA
country’’ means any country with respect to which
the NAFTA is in force.
(5) WTO 
AND
WTO
MEMBER.—The terms
‘‘WTO’’ and ‘‘WTO member’’ have the meanings given
those terms in section 2 of the Uruguay Round Agree-
ments Act (19 U.S.C. 3501).
Subtitle B—Trade Benefits for
Caribbean Basin Countries
SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDI-
TIONAL TRADE BENEFITS TO CERTAIN BENE-
FICIARY COUNTRIES.
(a) TEMPORARY PROVISIONS.—Section 213(b) of the
Caribbean Basin Economic Recovery Act (19 U.S.C.
2703(b)) is amended to read as follows:
‘‘(b) IMPORT-SENSITIVE ARTICLES.—
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‘‘(1) IN GENERAL.—Subject to paragraphs (2)
through (5), the duty-free treatment provided under
this title does not apply to—
‘‘(A) textile and apparel articles which were
not eligible articles for purposes of this title on
January 1, 1994, as this title was in effect on
that date;
‘‘(B) footwear not designated at the time of
the effective date of this title as eligible articles
for the purpose of the generalized system of pref-
erences under title V of the Trade Act of 1974;
‘‘(C) tuna, prepared or preserved in any
manner, in airtight containers;
‘‘(D) petroleum, or any product derived
from petroleum, provided for in headings 2709
and 2710 of the HTS;
‘‘(E) watches and watch parts (including
cases, bracelets, and straps), of whatever type in-
cluding, but not limited to, mechanical, quartz
digital or quartz analog, if such watches or
watch parts contain any material which is the
product of any country with respect to which
HTS column 2 rates of duty apply; or
‘‘(F) articles to which reduced rates of duty
apply under subsection (h).
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‘‘(2) TRANSITION PERIOD TREATMENT OF CER-
TAIN TEXTILE AND APPAREL ARTICLES.—
‘‘(A) PRODUCTS
COVERED.—During the
transition period, the preferential treatment de-
scribed in subparagraph (B) shall apply to the
following products:
‘‘(i) APPAREL
ARTICLES
ASSEMBLED
IN A CBTEA BENEFICIARY COUNTRY.—Ap-
parel articles assembled in a CBTEA bene-
ficiary country from fabrics wholly formed
and cut in the United States, from yarns
wholly formed in the United States that
are—
‘‘(I) entered under subheading
9802.00.80 of the HTS; or
‘‘(II) entered under chapter 61 or
62 of the HTS, if, after such assembly,
the articles would have qualified for
entry under subheading 9802.00.80 of
the HTS but for the fact that the arti-
cles were subjected to stone-washing,
enzyme-washing, acid washing, perma-
pressing, oven-baking, bleaching, gar-
ment-dyeing, or other similar proc-
esses.
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‘‘(ii) APPAREL ARTICLES CUT AND AS-
SEMBLED IN A CBTEA BENEFICIARY COUN-
TRY.—Apparel articles cut in a CBTEA
beneficiary country from fabric wholly
formed in the United States from yarns
wholly formed in the United States, if such
articles are assembled in such country with
thread formed in the United States.
‘‘(iii) HANDLOOMED, HANDMADE, AND
FOLKLORE
ARTICLES.—A 
handloomed,
handmade, or folklore article of a CBTEA
beneficiary country identified under sub-
paragraph (C) that is certified as such by
the competent authority of such beneficiary
country.
‘‘(iv) 
TEXTILE
LUGGAGE.—Textile
luggage—
‘‘(I) assembled in a CBTEA bene-
ficiary country from fabric wholly
formed and cut in the United States,
from yarns wholly formed in the
United States, that is entered under
subheading 9802.00.80 of the HTS; or
‘‘(II) assembled from fabric cut in
a CBTEA beneficiary country from
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fabric wholly formed in the United
States from yarns wholly formed in the
United States, if such luggage is as-
sembled in such country with thread
formed in the United States.
‘‘(B) PREFERENTIAL TREATMENT.—Except
as provided in subparagraph (E), during the
transition period, the articles described in sub-
paragraph (A) shall enter the United States free
of duty and free of any quantitative limitations.
‘‘(C) HANDLOOMED, HANDMADE, AND FOLK-
LORE ARTICLES DEFINED.—For purposes of sub-
paragraph (A)(iii), the President, after consulta-
tion with the CBTEA beneficiary country con-
cerned, shall determine which, if any, particular
textile and apparel goods of the country shall be
treated as being handloomed, handmade, or folk-
lore goods of a kind described in section 2.3 (a),
(b), or (c) or Appendix 3.1.B.11 of the Annex.
‘‘(D) PENALTIES FOR TRANSSHIPMENTS.—
‘‘(i) PENALTIES FOR EXPORTERS.—If
the President determines, based on sufficient
evidence, that an exporter has engaged in
transshipment with respect to textile or ap-
parel products from a CBTEA beneficiary
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country, then the President shall deny all
benefits under this title to such exporter,
and any successor of such exporter, for a pe-
riod of 2 years.
‘‘(ii) PENALTIES
FOR
COUNTRIES.—
Whenever the President finds, based on suf-
ficient evidence, that transshipment has oc-
curred, the President shall request that the
CBTEA beneficiary country or countries
through whose territory the transshipment
has occurred take all necessary and appro-
priate actions to prevent such trans-
shipment. If the President determines that a
country is not taking such actions, the
President shall reduce the quantities of tex-
tile and apparel articles that may be im-
ported into the United States from such
country by the quantity of the transshipped
articles multiplied by 3.
‘‘(iii) TRANSSHIPMENT DESCRIBED.—
Transshipment within the meaning of this
subparagraph has occurred when pref-
erential treatment for a textile or apparel
article under subparagraph (B) has been
claimed on the basis of material false infor-
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mation concerning the country of origin,
manufacture, processing, or assembly of the
article or any of its components. For pur-
poses of this clause, false information is ma-
terial if disclosure of the true information
would mean or would have meant that the
article is or was ineligible for preferential
treatment under subparagraph (B).
‘‘(E) BILATERAL EMERGENCY ACTIONS.—
‘‘(i) IN GENERAL.—The President may
take bilateral emergency tariff actions of a
kind described in section 4 of the Annex
with respect to any apparel article im-
ported from a CBTEA beneficiary country
if the application of tariff treatment under
subparagraph (B) to such article results in
conditions that would be cause for the tak-
ing of such actions under such section 4
with respect to a like article described in the
same 8-digit subheading of the HTS that is
imported from Mexico.
‘‘(ii) RULES RELATING TO BILATERAL
EMERGENCY ACTION.—For purposes of ap-
plying bilateral emergency action under
this subparagraph—
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‘‘(I) the requirements of para-
graph (5) of section 4 of the Annex (re-
lating 
to 
providing 
compensation)
shall not apply;
‘‘(II) the term ‘transition period’
in section 4 of the Annex shall have the
meaning given that term in paragraph
(5)(D) of this subsection; and
‘‘(III) the requirements to consult
specified in section 4 of the Annex
shall be treated as satisfied if the
President requests consultations with
the beneficiary country in question and
the country does not agree to consult
within the time period specified under
section 4.
‘‘(3) TRANSITION PERIOD TREATMENT OF CER-
TAIN OTHER ARTICLES ORIGINATING IN BENEFICIARY
COUNTRIES.—
‘‘(A) EQUIVALENT TARIFF TREATMENT.—
‘‘(i) IN
GENERAL.—Subject to clause
(ii), the tariff treatment accorded at any
time during the transition period to any
article referred to in any of subparagraphs
(B) through (F) of paragraph (1) that
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originates in the territory of a CBTEA ben-
eficiary country shall be identical to the
tariff treatment that is accorded at such
time under Annex 302.2 of the NAFTA to
an article described in the same 8-digit sub-
heading of the HTS that is a good of Mexico
and is imported into the United States.
‘‘(ii) EXCEPTION.—Clause (i) does not
apply to any article accorded duty-free
treatment under U.S. Note 2(b) to sub-
chapter II of chapter 98 of the HTS.
‘‘(B) RELATIONSHIP
TO
SUBSECTION (h)
DUTY REDUCTIONS.—If at any time during the
transition period the rate of duty that would
(but for action taken under subparagraph (A)(i)
in regard to such period) apply with respect to
any article under subsection (h) is a rate of duty
that is lower than the rate of duty resulting from
such action, then such lower rate of duty shall be
applied for the purposes of implementing such
action.
‘‘(4) CUSTOMS PROCEDURES.—
‘‘(A) IN GENERAL.—
‘‘(i) 
REGULATIONS.—Any 
importer
that claims preferential treatment under
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paragraph (2) or (3) shall comply with cus-
toms procedures similar in all material re-
spects to the requirements of Article 502(1)
of the NAFTA as implemented pursuant to
United States law, in accordance with regu-
lations promulgated by the Secretary of the
Treasury.
‘‘(ii) DETERMINATION.—
‘‘(I) IN
GENERAL.—In order to
qualify for the preferential treatment
under paragraph (2) or (3) and for a
Certificate of Origin to be valid with
respect to any article for which such
treatment is claimed, there shall be in
effect a determination by the President
that each country described in sub-
clause (II)—
‘‘(aa) has implemented and
follows, or
‘‘(bb) is making substantial
progress 
toward 
implementing
and following,
procedures and requirements similar
in all material respects to the relevant
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procedures and requirements under
chapter 5 of the NAFTA.
‘‘(II) COUNTRY
DESCRIBED.—A
country is described in this subclause if
it is a CBTEA beneficiary country—
‘‘(aa) from which the article
is exported, or
‘‘(bb) in which materials
used in the production of the arti-
cle originate or in which the arti-
cle or such materials undergo pro-
duction that contributes to a
claim that the article is eligible
for preferential treatment.
‘‘(B) CERTIFICATE OF ORIGIN.—The Certifi-
cate of Origin that otherwise would be required
pursuant to the provisions of subparagraph (A)
shall not be required in the case of an article im-
ported under paragraph (2) or (3) if such Cer-
tificate of Origin would not be required under
Article 503 of the NAFTA (as implemented pur-
suant to United States law), if the article were
imported from Mexico.
‘‘(5) DEFINITIONS
AND
SPECIAL
RULES.—For
purposes of this subsection—
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‘‘(A) ANNEX.—The term ‘the Annex’ means
Annex 300–B of the NAFTA.
‘‘(B) CBTEA BENEFICIARY COUNTRY.—The
term ‘CBTEA beneficiary country’ means any
‘beneficiary country’, as defined by section
212(a)(1)(A) of this title, which the President
designates as a CBTEA beneficiary country, tak-
ing into account the following criteria:
‘‘(i) Whether a beneficiary country has
demonstrated a commitment to—
‘‘(I) 
undertake 
its 
obligations
under the WTO on or ahead of sched-
ule;
‘‘(II) participate in negotiations
toward the completion of the FTAA or
a comparable trade agreement; and
‘‘(III) undertake other steps nec-
essary for that country to become a
party to the FTAA or a comparable
trade agreement.
‘‘(ii) The extent to which the country
follows accepted rules of international trade
provided for under the agreements listed in
section 101(d) of the Uruguay Round Agree-
ments Act.
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‘‘(iii) The extent to which the country
provides protection of intellectual property
rights—
‘‘(I) in accordance with standards
established in the Agreement on Trade-
Related Aspects of Intellectual Prop-
erty 
Rights 
described 
in 
section
101(d)(15) of the Uruguay Round
Agreements Act;
‘‘(II) in accordance with stand-
ards established in chapter 17 of the
NAFTA; and
‘‘(III) by granting the holders of
copyrights the ability to control the
importation and sale of products that
embody copyrighted works, extending
the period set forth in Article 1711(6)
of NAFTA for protecting test data for
agricultural chemicals to 10 years,
protecting trademarks regardless of
their subsequent designation as geo-
graphic indications, and providing en-
forcement against the importation of
infringing products at the border.
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‘‘(iv) The extent to which the country
provides protections to investors and invest-
ments of the United States substantially
equivalent to those set forth in chapter 11 of
the NAFTA.
‘‘(v) The extent to which the country
provides the United States and other WTO
members nondiscriminatory, equitable, and
reasonable market access with respect to the
products for which benefits are provided
under paragraphs (2) and (3), and in other
relevant product sectors as determined by
the President.
‘‘(vi) The extent to which the country
provides internationally recognized worker
rights, including—
‘‘(I) the right of association,
‘‘(II) the right to organize and
bargain collectively,
‘‘(III) prohibition on the use of
any form of coerced or compulsory
labor,
‘‘(IV) a minimum age for the em-
ployment of children, and
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‘‘(V) acceptable conditions of work
with respect to minimum wages, hours
of work, and occupational safety and
health;
‘‘(vii) Whether the country has met the
counter-narcotics certification criteria set
forth in section 490 of the Foreign Assist-
ance Act of 1961 (22 U.S.C. 2291j) for eligi-
bility for United States assistance.
‘‘(viii) The extent to which the country
becomes a party to and implements the
Inter-American Convention Against Cor-
ruption, and becomes party to a convention
regarding the extradition of its nationals.
‘‘(ix) 
The 
extent 
to 
which 
the
country—
‘‘(I) supports the multilateral and
regional objectives of the United States
with respect to government procure-
ment, including the negotiation of gov-
ernment procurement provisions as
part of the FTAA and conclusion of a
WTO transparency agreement as pro-
vided in the declaration of the WTO
Ministerial Conference held in Singa-
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pore on December 9 through 13, 1996;
and
‘‘(II) applies transparent and
competitive procedures in government
procurement equivalent to those con-
tained in the WTO Agreement on Gov-
ernment Procurement (described in sec-
tion 101(d)(17) of the Uruguay Round
Agreements Act).
‘‘(x) The extent to which the country
follows the rules on customs valuation set
forth in the WTO Agreement on Implemen-
tation of Article VII of the GATT 1994 (de-
scribed in section 101(d)(8) of the Uruguay
Round Agreements Act).
‘‘(xi) The extent to which the country
affords to products of the United States
which the President determines to be of
commercial importance to the United States
with respect to such country, and on a non-
discriminatory basis to like products of
other WTO members, tariff treatment that
is no less favorable than the most favorable
tariff treatment provided by the country to
any other country pursuant to any free
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trade agreement to which such country is a
party, other than the Central American
Common Market or the Caribbean Commu-
nity and Common Market.
‘‘(C) CBTEA ORIGINATING GOOD.—
‘‘(i) IN GENERAL.—The term ‘CBTEA
originating good’ means a good that meets
the rules of origin for a good set forth in
chapter 4 of the NAFTA as implemented
pursuant to United States law.
‘‘(ii) APPLICATION OF CHAPTER 4.—In
applying chapter 4 with respect to a
CBTEA beneficiary country for purposes of
this subsection—
‘‘(I) no country other than the
United States and a CBTEA bene-
ficiary country may be treated as
being a party to the NAFTA;
‘‘(II) any reference to trade be-
tween the United States and Mexico
shall be deemed to refer to trade be-
tween the United States and a CBTEA
beneficiary country;
‘‘(III) any reference to a party
shall be deemed to refer to a CBTEA
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beneficiary country or the United
States; and
‘‘(IV) any reference to parties
shall be deemed to refer to any com-
bination of CBTEA beneficiary coun-
tries or to the United States and a
CBTEA beneficiary country (or any
combination thereof).
‘‘(D) TRANSITION PERIOD.—The term ‘tran-
sition period’ means, with respect to a CBTEA
beneficiary country, the period that begins on
October 1, 2000, and ends on the earlier of—
‘‘(i) December 31, 2004, or
‘‘(ii) the date on which the FTAA or a
comparable trade agreement enters into
force with respect to the United States and
the CBTEA beneficiary country.
‘‘(E) CBTEA.—The term ‘CBTEA’ means
the United States-Caribbean Basin Trade En-
hancement Act.
‘‘(F) FTAA.—The term ‘FTAA’ means the
Free Trade Area of the Americas.’’.
(b) DETERMINATION REGARDING RETENTION OF DES-
IGNATION.—Section 212(e) of the Caribbean Basin Eco-
nomic Recovery Act (19 U.S.C. 2702(e)) is amended—
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(1) in paragraph (1)—
(A) by redesignating subparagraphs (A)
and (B) as clauses (i) and (ii), respectively;
(B) by inserting ‘‘(A)’’ after ‘‘(1)’’;
(C) by striking ‘‘would be barred’’ and all
that follows through the end period and insert-
ing: ‘‘no longer satisfies one or more of the condi-
tions for designation as a beneficiary country set
forth in subsection (b) or such country fails ade-
quately to meet one or more of the criteria set
forth in subsection (c).’’; and
(D) by adding at the end the following:
‘‘(B) The President may, after the require-
ments of subsection (a)(2) and paragraph (2)
have been met—
‘‘(i) withdraw or suspend the designa-
tion of any country as a CBTEA bene-
ficiary country, or
‘‘(ii) withdraw, suspend, or limit the
application of preferential treatment under
section 213(b) (2) and (3) to any article of
any country, if, after such designation, the
President determines that as a result of
changed circumstances, the performance of
such country is not satisfactory under the
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criteria set forth in section 213(b)(5)(B).’’;
and
(2) by adding after paragraph (2) the following
new paragraph:
‘‘(3) If preferential treatment under section
213(b) (2) and (3) is withdrawn, suspended, or lim-
ited with respect to a CBTEA beneficiary country,
such country shall not be deemed to be a ‘party’ for
the purposes of applying section 213(b)(5)(C) to im-
ports of articles for which preferential treatment has
been withdrawn, suspended, or limited with respect to
such country.’’.
(c) REPORTING REQUIREMENTS.—
(1) Section 212(f) of the Caribbean Basin Eco-
nomic Recovery Act (19 U.S.C. 2702(f)) is amended
to read as follows:
‘‘(f) REPORTING REQUIREMENTS.—
‘‘(1) IN GENERAL.—Not later than December 31,
2001, and every 2 years thereafter during the period
this title is in effect, the United States Trade Rep-
resentative shall submit to Congress a report regard-
ing the operation of this title, including—
‘‘(A) with respect to subsections (b) and (c),
the results of a general review of beneficiary
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countries based on the considerations described
in such subsections; and
‘‘(B) the performance of each beneficiary
country or CBTEA beneficiary country, as the
case may be, under the criteria set forth in sec-
tion 213(b)(5)(B)(ii).
‘‘(2) PUBLIC COMMENT.—Before submitting the
report described in paragraph (1), the United States
Trade Representative shall publish a notice in the
Federal Register requesting public comments on
whether beneficiary countries are meeting the criteria
listed in section 213(b)(5)(B)(i), and on the perform-
ance of each beneficiary country or CBTEA bene-
ficiary country, as the case may be, with respect to
the criteria listed in section 213(b)(5)(B)(ii).’’.
(2) Section 203(f) of the Andean Trade Pref-
erence Act (19 U.S.C. 3202(f)) is amended—
(A) by striking ‘‘TRIENNIAL REPORT’’ in
the heading and inserting ‘‘REPORT’’; and
(B) by striking ‘‘On or before’’ and all that
follows through ‘‘enactment of this title’’ and in-
serting ‘‘Not later than January 31, 2001’’.
(d) INTERNATIONAL TRADE COMMISSION REPORTS.—
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(1) Section 215(a) of the Caribbean Basin Eco-
nomic Recovery Act (19 U.S.C. 2704(a)) is amended
to read as follows:
‘‘(a) REPORTING REQUIREMENT.—
‘‘(1) IN
GENERAL.—The United States Inter-
national Trade Commission (in this section referred
to as the ‘Commission’) shall submit to Congress and
the President biennial reports regarding the economic
impact of this title on United States industries and
consumers and on the economy of the beneficiary
countries.
‘‘(2) FIRST REPORT.—The first report shall be
submitted not later than September 30, 2001.
‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For
purposes of this section, industries in the Common-
wealth of Puerto Rico and the insular possessions of
the United States are considered to be United States
industries.’’.
(2) Section 206(a) of the Andean Trade Pref-
erence Act (19 U.S.C. 3204(a)) is amended to read as
follows:
‘‘(a) REPORTING REQUIREMENTS.—
‘‘(1) IN
GENERAL.—The United States Inter-
national Trade Commission (in this section referred
to as the ‘Commission’) shall submit to Congress and
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the President biennial reports regarding the economic
impact of this title on United States industries and
consumers, and, in conjunction with other agencies,
the effectiveness of this title in promoting drug-related
crop eradication and crop substitution efforts of the
beneficiary countries.
‘‘(2) SUBMISSION.—During the period that this
title is in effect, the report required by paragraph (1)
shall be submitted on December 31 of each year that
the report required by section 215 of the Caribbean
Basin Economic Recovery Act is not submitted.
‘‘(3) TREATMENT OF PUERTO RICO, ETC.—For
purposes of this section, industries in the Common-
wealth of Puerto Rico and the insular possessions of
the United States are considered to be United States
industries.’’.
(e) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) IN GENERAL.—
(A) Section 211 of the Caribbean Basin
Economic Recovery Act (19 U.S.C. 2701) is
amended by inserting ‘‘(or other preferential
treatment)’’ after ‘‘treatment’’.
(B) Section 213(a)(1) of the Caribbean
Basin Economic Recovery Act (19 U.S.C.
2703(a)(1)) is amended by inserting ‘‘and except
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as provided in subsection (b) (2) and (3),’’ after
‘‘Tax Reform Act of 1986,’’.
(2) DEFINITIONS.—Section 212(a)(1) of the Car-
ibbean Basin Economic Recovery Act (19 U.S.C.
2702(a)(1)) is amended by adding at the end the fol-
lowing new subparagraphs:
‘‘(D) The term ‘NAFTA’ means the North
American Free Trade Agreement entered into be-
tween the United States, Mexico, and Canada on
December 17, 1992.
‘‘(E) The terms ‘WTO’ and ‘WTO member’
have the meanings given those terms in section
2 of the Uruguay Round Agreements Act (19
U.S.C. 3501).’’.
SEC. 212. ADEQUATE AND EFFECTIVE PROTECTION FOR IN-
TELLECTUAL PROPERTY RIGHTS.
Section 212(c) of the Caribbean Basin Economic Re-
covery Act (19 U.S.C. 2702(c)) is amended by adding at
the end the following flush sentence:
‘‘Notwithstanding any other provision of law, the President
may determine that a country is not providing adequate
and effective protection of intellectual property rights under
paragraph (9), even if the country is in compliance with
the country’s obligations under the Agreement on Trade-Re-
lated Aspects of Intellectual Property Rights described in
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section 101(d)(15) of the Uruguay Round Agreements Act
(19 U.S.C. 3511(d)(15)).’’.
Subtitle C—Cover Over of Tax on
Distilled Spirits
SEC. 221. SUSPENSION OF LIMITATION ON COVER OVER OF
TAX ON DISTILLED SPIRITS.
(a) IN GENERAL.—Section 7652(f) of the Internal Rev-
enue Code of 1986 (relating to limitation on cover over of
tax on distilled spirits) is amended by adding at the end
the following new flush sentence:
‘‘The preceding sentence shall not apply to articles that are
tax-determined after June 30, 1999, and before October 1,
1999.’’
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this
section shall apply to articles that are tax-determined
after June 30, 1999.
(2) SPECIAL RULE.—
(A) IN GENERAL.—The treasury of Puerto
Rico shall make a Conservation Trust Fund
transfer within 30 days after the date of each
cover over payment (made to such treasury
under section 7652(e) of the Internal Revenue
Code of 1986) to which section 7652(f) of such
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Code does not apply by reason of the last sen-
tence thereof.
(B) CONSERVATION
TRUST
FUND
TRANS-
FER.—
(i) IN GENERAL.—For purposes of this
paragraph, the term ‘‘Conservation Trust
Fund transfer’’ means a transfer to the
Puerto Rico Conservation Trust Fund of an
amount equal to 50 cents per proof gallon
of the taxes imposed under section 5001 or
section 7652 of such Code on distilled spir-
its that are covered over to the treasury of
Puerto Rico under section 7652(e) of such
Code.
(ii) TREATMENT OF TRANSFER.—Each
Conservation Trust Fund transfer shall be
treated as principal for an endowment, the
income from which to be available for use
by the Puerto Rico Conservation Trust
Fund for the purposes for which the Trust
Fund was established.
(iii) RESULT OF NONTRANSFER.—
(I) IN GENERAL.—Upon notifica-
tion by the Secretary of the Interior
that a Conservation Trust Fund trans-
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fer has not been made by the treasury
of Puerto Rico as required by subpara-
graph (A), the Secretary of the Treas-
ury shall, except as provided in sub-
clause (II), deduct and withhold from
the next cover over payment to be made
to the treasury of Puerto Rico under
section 7652(e) of such Code an
amount equal to the appropriate Con-
servation Trust Fund transfer and in-
terest thereon at the underpayment
rate established under section 6621 of
such Code as of the due date of such
transfer. The Secretary of the Treasury
shall transfer such amount deducted
and withheld, and the interest thereon,
directly to the Puerto Rico Conserva-
tion Trust Fund.
(II) GOOD CAUSE EXCEPTION.—If
the Secretary of the Interior finds,
after consultation with the Governor of
Puerto Rico, that the failure by the
treasury of Puerto Rico to make a re-
quired transfer was for good cause, and
notifies the Secretary of the Treasury
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of the finding of such good cause before
the due date of the next cover over pay-
ment following the notification of non-
transfer, then the Secretary of the
Treasury shall not deduct the amount
of such nontransfer from any cover
over payment.
(C) PUERTO
RICO
CONSERVATION
TRUST
FUND.—For purposes of this paragraph, the term
‘‘Puerto Rico Conservation Trust Fund’’ means
the fund established pursuant to a Memorandum
of Understanding between the United States De-
partment of the Interior and the Commonwealth
of Puerto Rico, dated December 24, 1968.
TITLE III—GENERALIZED
SYSTEM OF PREFERENCES
SEC. 301. EXTENSION OF DUTY-FREE TREATMENT UNDER
GENERALIZED SYSTEM OF PREFERENCES.
(a) IN GENERAL.—Section 505 of the Trade Act of
1974 (19 U.S.C. 2465) is amended by striking ‘‘June 30,
1999’’ and inserting ‘‘June 30, 2004’’.
(b) EFFECTIVE DATE.—
(1) IN GENERAL.—The amendment made by this
section applies to articles entered on or after the date
of the enactment of this Act.
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(2) RETROACTIVE
APPLICATION
FOR
CERTAIN
LIQUIDATIONS AND RELIQUIDATIONS.—
(A) GENERAL RULE.—Notwithstanding sec-
tion 514 of the Tariff Act of 1930 or any other
provision of law, and subject to paragraph (3),
any entry—
(i) of an article to which duty-free
treatment under title V of the Trade Act of
1974 would have applied if such entry had
been made on June 30, 1999, and
(ii) that was made—
(I) after June 30, 1999, and
(II) before the date of enactment
of this Act,
shall be liquidated or reliquidated as free of
duty, and the Secretary of the Treasury shall re-
fund any duty paid with respect to such entry.
(B) ENTRY.—As used in this paragraph,
the term ‘‘entry’’ includes a withdrawal from
warehouse for consumption.
(3) REQUESTS.—Liquidation or reliquidation
may be made under paragraph (2) with respect to an
entry only if a request therefore is filed with the Cus-
toms Service, within 180 days after the date of enact-
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ment of this Act, that contains sufficient information
to enable the Customs Service—
(A) to locate the entry, or
(B) to reconstruct the entry if it cannot be
located.
SEC. 302. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE
OPERATIONS.
(a) IN GENERAL.—Section 484 of the Tariff Act of
1930 (19 U.S.C. 1484) is amended by adding at the end
the following new subsection:
‘‘(i) SPECIAL RULE FOR FOREIGN TRADE ZONE OP-
ERATIONS.—
‘‘(1) IN GENERAL.—Notwithstanding any other
provision of law and except as provided in paragraph
(3), all merchandise (including merchandise of dif-
ferent classes, types, and categories), withdrawn from
a foreign trade zone during any 7-day period, shall,
at the option of the operator or user of the zone, be
the subject of a single estimated entry or release filed
on or before the first day of the 7-day period in which
the merchandise is to be withdrawn from the zone.
The estimated entry or release shall be treated as a
single entry and a single release of merchandise for
purposes of section 13031(a)(9)(A) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (19
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U.S.C. 58c(a)(9)(A)) and all fee exclusions and limi-
tations of such section 13031 shall apply, including
the maximum and minimum fee amounts provided
for under subsection (b)(8)(A)(i) of such section. The
entry summary for the estimated entry or release
shall cover only the merchandise actually withdrawn
from the foreign trade zone during the 7-day period.
‘‘(2) OTHER REQUIREMENTS.— The Secretary of
the Treasury may require that the operator or user of
the zone—
‘‘(A) use an electronic data interchange ap-
proved by the Customs Service—
‘‘(i) to file the entries described in
paragraph (1); and
‘‘(ii) to pay the applicable duties, fees,
and taxes with respect to the entries; and
‘‘(B) satisfy the Customs Service that ac-
counting, transportation, and other controls over
the merchandise are adequate to protect the rev-
enue and meet the requirements of other Federal
agencies.
‘‘(3) EXCEPTION.—The provisions of paragraph
(1) shall not apply to merchandise the entry of which
is prohibited by law or merchandise for which the fil-
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ing of an entry summary is required before the mer-
chandise is released from customs custody.
‘‘(4) FOREIGN TRADE ZONE; ZONE.—In this sub-
section, the terms ‘foreign trade zone’ and ‘zone’ mean
a zone established pursuant to the Act of June 18,
1934, commonly known as the Foreign Trade Zones
Act (19 U.S.C. 81a et seq.).’’.
(b) EFFECTIVE DATE.—The amendment made by this
section shall take effect on the date that is 60 days after
the date of enactment of this Act.
TITLE IV—TRADE ADJUSTMENT
ASSISTANCE
SEC. 401. TRADE ADJUSTMENT ASSISTANCE.
(a) ASSISTANCE FOR WORKERS.—Section 245 of the
Trade Act of 1974 (19 U.S.C. 2317) is amended—
(1) in subsection (a), by striking ‘‘June 30,
1999’’ and inserting ‘‘September 30, 2001’’; and
(2) in subsection (b), by striking ‘‘June 30,
1999’’ and inserting ‘‘September 30, 2001’’.
(b) 
NAFTA 
TRANSITIONAL
PROGRAM.—Section
250(d)(2) of the Trade Act of 1974 (19 U.S.C. 2331(d)(2))
is amended by striking ‘‘the period beginning October 1,
1998, and ending June 30, 1999, shall not exceed
$15,000,000’’ and inserting ‘‘the period beginning October
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1, 1998, and ending September 30, 2001, shall not exceed
$30,000,000 for any fiscal year’’.
(c) ADJUSTMENT FOR FIRMS.—Section 256(b) of the
Trade Act of 1974 (19 U.S.C. 2346(b)) is amended by strik-
ing ‘‘June 30, 1999’’ and inserting ‘‘September 30, 2001’’.
(d) TERMINATION.—Section 285(c) of the Trade Act of
1974 (19 U.S.C. 2271 note preceding) is amended by strik-
ing ‘‘June 30, 1999’’ each place it appears and inserting
‘‘September 30, 2001’’.
(e) EFFECTIVE DATE.—The amendments made by this
section take effect on July 1, 1999.
SEC. 402. TRADE ADJUSTMENT ASSISTANCE FOR TEXTILE
AND APPAREL WORKERS.
Notwithstanding any other provision of law, workers
in textile and apparel firms who lose their jobs or are
threatened with job loss as a result of either (1) a decrease
in the firm’s sales or production; or (2) a firm’s plant or
facility closure or relocation, shall be certified by the Sec-
retary of Labor as eligible to receive adjustment assistance
at the same level of benefits as workers certified under sub-
chapter D of chapter 2 of title II of the Trade Act of 1974
not later than 30 days after the date a petition for certifi-
cation is filed under such title II.
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TITLE V—REVENUE PROVISIONS
SEC. 501. MODIFICATION OF INSTALLMENT METHOD AND
REPEAL OF INSTALLMENT METHOD FOR AC-
CRUAL METHOD TAXPAYERS.
(a) REPEAL OF INSTALLMENT METHOD FOR ACCRUAL
BASIS TAXPAYERS.—
(1) IN GENERAL.—Subsection (a) of section 453
of the Internal Revenue Code of 1986 (relating to in-
stallment method) is amended to read as follows:
‘‘(a) USE OF INSTALLMENT METHOD.—
‘‘(1) IN GENERAL.—Except as otherwise provided
in this section, income from an installment sale shall
be taken into account for purposes of this title under
the installment method.
‘‘(2) ACCRUAL METHOD TAXPAYER.—The install-
ment method shall not apply to income from an in-
stallment sale if such income would be reported under
an accrual method of accounting without regard to
this section. The preceding sentence shall not apply to
a disposition described in subparagraph (A) or (B) of
subsection (l)(2).’’.
(2) 
CONFORMING
AMENDMENTS.—Sections
453(d)(1), 453(i)(1), and 453(k) are each amended by
striking ‘‘(a)’’ each place it appears and inserting
‘‘(a)(1)’’.
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(b) MODIFICATION OF PLEDGE RULES.—Paragraph
(4) of section 453A(d) of the Internal Revenue Code of 1986
(relating to pledges, etc., of installment obligations) is
amended by adding at the end the following: ‘‘A payment
shall be treated as directly secured by an interest in an
installment obligation to the extent an arrangement allows
the taxpayer to satisfy all or a portion of the indebtedness
with the installment obligation.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to sales or other dispositions occurring
on or after the date of the enactment of this Act.
SEC. 502. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10
OR MORE EMPLOYER PLANS.
(a) BENEFITS TO WHICH EXCEPTION APPLIES.—Sec-
tion 419A(f)(6)(A) of the Internal Revenue Code of 1986
(relating to exception for 10 or more employer plans) is
amended to read as follows:
‘‘(A) IN GENERAL.—This subpart shall not
apply to a welfare benefit fund which is part of
a 10 or more employer plan if the only benefits
provided through the fund are one or more of the
following:
‘‘(i) Medical benefits.
‘‘(ii) Disability benefits.
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‘‘(iii) Group term life insurance bene-
fits which do not provide directly or indi-
rectly for any cash surrender value or other
money that can be paid, assigned, borrowed,
or pledged for collateral for a loan.
The preceding sentence shall not apply to any
plan which maintains experience-rating arrange-
ments with respect to individual employers.’’.
(b) LIMITATION ON USE OF AMOUNTS FOR OTHER
PURPOSES.—Section 4976(b) of the Internal Revenue Code
of 1986 (defining disqualified benefit) is amended by add-
ing at the end the following new paragraph:
‘‘(5) SPECIAL RULE FOR 10 OR MORE EMPLOYER
PLANS EXEMPTED FROM PREFUNDING LIMITS.—For
purposes of paragraph (1)(C), if—
‘‘(A) subpart D of part I of subchapter D
of chapter 1 does not apply by reason of section
419A(f)(6) to contributions to provide one or
more welfare benefits through a welfare benefit
fund under a 10 or more employer plan, and
‘‘(B) any portion of the welfare benefit fund
attributable to such contributions is used for a
purpose other than that for which the contribu-
tions were made,
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then such portion shall be treated as reverting to the
benefit of the employers maintaining the fund.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to contributions paid or accrued after
June 9, 1999, in taxable years ending after such date.
SEC. 503. TREATMENT OF GAIN FROM CONSTRUCTIVE OWN-
ERSHIP TRANSACTIONS.
(a) IN GENERAL.—Part IV of subchapter P of chapter
1 of the Internal Revenue Code of 1986 (relating to special
rules for determining capital gains and losses) is amended
by inserting after section 1259 the following new section:
‘‘SEC. 1260. GAINS FROM CONSTRUCTIVE OWNERSHIP
TRANSACTIONS.
‘‘(a) IN GENERAL.—If the taxpayer has gain from a
constructive ownership transaction with respect to any fi-
nancial asset and such gain would (without regard to this
section) be treated as a long-term capital gain—
‘‘(1) such gain shall be treated as ordinary in-
come to the extent that such gain exceeds the net un-
derlying long-term capital gain, and
‘‘(2) to the extent such gain is treated as a long-
term capital gain after the application of paragraph
(1), the determination of the capital gain rate (or
rates) applicable to such gain under section 1(h) shall
be determined on the basis of the respective rate (or
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rates) that would have been applicable to the net un-
derlying long-term capital gain.
‘‘(b) INTEREST CHARGE ON DEFERRAL OF GAIN REC-
OGNITION.—
‘‘(1) IN GENERAL.—If any gain is treated as or-
dinary income for any taxable year by reason of sub-
section (a)(1), the tax imposed by this chapter for
such taxable year shall be increased by the amount of
interest determined under paragraph (2) with respect
to each prior taxable year during any portion of
which the constructive ownership transaction was
open. Any amount payable under this paragraph
shall be taken into account in computing the amount
of any deduction allowable to the taxpayer for interest
paid or accrued during such taxable year.
‘‘(2) AMOUNT OF INTEREST.—The amount of in-
terest determined under this paragraph with respect
to a prior taxable year is the amount of interest
which would have been imposed under section 6601
on the underpayment of tax for such year which
would have resulted if the gain (which is treated as
ordinary income by reason of subsection (a)(1)) had
been included in gross income in the taxable years in
which it accrued (determined by treating the income
as accruing at a constant rate equal to the applicable
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Federal rate as in effect on the day the transaction
closed). The period during which such interest shall
accrue shall end on the due date (without extensions)
for the return of tax imposed by this chapter for the
taxable year in which such transaction closed.
‘‘(3) APPLICABLE FEDERAL RATE.—For purposes
of paragraph (2), the applicable Federal rate is the
applicable Federal rate determined under 1274(d)
(compounded semiannually) which would apply to a
debt instrument with a term equal to the period the
transaction was open.
‘‘(4) NO CREDITS AGAINST INCREASE IN TAX.—
Any increase in tax under paragraph (1) shall not be
treated as tax imposed by this chapter for purposes
of determining—
‘‘(A) the amount of any credit allowable
under this chapter, or
‘‘(B) the amount of the tax imposed by sec-
tion 55.
‘‘(c) 
FINANCIAL
ASSET.—For 
purposes 
of 
this
section—
‘‘(1) IN
GENERAL.—The term ‘financial asset’
means—
‘‘(A) any equity interest in any pass-thru
entity, and
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‘‘(B) to the extent provided in regulations—
‘‘(i) any debt instrument, and
‘‘(ii) any stock in a corporation which
is not a pass-thru entity.
‘‘(2) PASS-THRU ENTITY.—For purposes of para-
graph (1), the term ‘pass-thru entity’ means—
‘‘(A) a regulated investment company,
‘‘(B) a real estate investment trust,
‘‘(C) an S corporation,
‘‘(D) a partnership,
‘‘(E) a trust,
‘‘(F) a common trust fund,
‘‘(G) a passive foreign investment company
(as defined in section 1297 without regard to
subsection (e) thereof),
‘‘(H) a foreign personal holding company,
‘‘(I) a foreign investment company (as de-
fined in section 1246(b)), and
‘‘(J) a REMIC.
‘‘(d) CONSTRUCTIVE OWNERSHIP TRANSACTION.—For
purposes of this section—
‘‘(1) IN GENERAL.—The taxpayer shall be treated
as having entered into a constructive ownership
transaction with respect to any financial asset if the
taxpayer—
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‘‘(A) holds a long position under a notional
principal contract with respect to the financial
asset,
‘‘(B) enters into a forward or futures con-
tract to acquire the financial asset,
‘‘(C) is the holder of a call option, and is
the grantor of a put option, with respect to the
financial asset and such options have substan-
tially equal strike prices and substantially con-
temporaneous maturity dates, or
‘‘(D) to the extent provided in regulations
prescribed by the Secretary, enters into one or
more other transactions (or acquires one or more
positions) that have substantially the same effect
as a transaction described in any of the pre-
ceding subparagraphs.
‘‘(2) EXCEPTION
FOR
POSITIONS
WHICH
ARE
MARKED TO MARKET.—This section shall not apply to
any constructive ownership transaction if all of the
positions which are part of such transaction are
marked to market under any provision of this title or
the regulations thereunder.
‘‘(3) LONG
POSITION
UNDER
NOTIONAL
PRIN-
CIPAL CONTRACT.—A person shall be treated as hold-
ing a long position under a notional principal con-
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tract with respect to any financial asset if such
person—
‘‘(A) has the right to be paid (or receive
credit for) all or substantially all of the invest-
ment yield (including appreciation) on such fi-
nancial asset for a specified period, and
‘‘(B) is obligated to reimburse (or provide
credit for) all or substantially all of any decline
in the value of such financial asset.
‘‘(4) FORWARD CONTRACT.—The term ‘forward
contract’ means any contract to acquire in the future
(or provide or receive credit for the future value of)
any financial asset.
‘‘(e) NET UNDERLYING LONG-TERM CAPITAL GAIN.—
For purposes of this section, in the case of any constructive
ownership transaction with respect to any financial asset,
the term ‘net underlying long-term capital gain’ means the
aggregate net capital gain that the taxpayer would have
had if—
‘‘(1) the financial asset had been acquired for
fair market value on the date such transaction was
opened and sold for fair market value on the date
such transaction was closed, and
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‘‘(2) only gains and losses that would have re-
sulted from the deemed ownership under paragraph
(1) were taken into account.
The amount of the net underlying long-term capital gain
with respect to any financial asset shall be treated as zero
unless the amount thereof is established by clear and con-
vincing evidence.
‘‘(f) SPECIAL RULE WHERE TAXPAYER TAKES DELIV-
ERY.—Except as provided in regulations prescribed by the
Secretary, if a constructive ownership transaction is closed
by reason of taking delivery, this section shall be applied
as if the taxpayer had sold all the contracts, options, or
other positions which are part of such transaction for fair
market value on the closing date. The amount of gain recog-
nized under the preceding sentence shall not exceed the
amount of gain treated as ordinary income under sub-
section (a). Proper adjustments shall be made in the
amount of any gain or loss subsequently realized for gain
recognized and treated as ordinary income under this sub-
section.
‘‘(g) REGULATIONS.—The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this section, including
regulations—
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‘‘(1) to permit taxpayers to mark to market con-
structive ownership transactions in lieu of applying
this section, and
‘‘(2) to exclude certain forward contracts which
do not convey substantially all of the economic return
with respect to a financial asset.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
part IV of subchapter P of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end the following
new item:
‘‘Sec. 1260. Gains from constructive ownership transactions.’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to transactions entered into after July
11, 1999.
SEC. 504. LIMITATION ON USE OF NONACCRUAL EXPERI-
ENCE METHOD OF ACCOUNTING.
(a) IN GENERAL.—Section 448(d)(5) of the Internal
Revenue Code of 1986 (relating to special rule for services)
is amended—
(1) by inserting ‘‘in fields described in para-
graph (2)(A)’’ after ‘‘services by such person’’, and
(2) by inserting ‘‘CERTAIN
PERSONAL’’ before
‘‘SERVICES’’ in the heading.
(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 amendments
made by this section to change its method of account-
ing for its first taxable year ending after the date of
the enactment of this Act—
(A) such change shall be treated as initiated
by the taxpayer,
(B) such change shall be treated as made
with the consent of the Secretary of the Treasury,
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 period
(not greater than 4 taxable years) beginning
with such first taxable year.
SEC. 505. ALLOCATION OF BASIS ON TRANSFERS OF INTAN-
GIBLES 
IN 
CERTAIN 
NONRECOGNITION
TRANSACTIONS.
(a) TRANSFERS TO CORPORATIONS.—Section 351 of
the Internal Revenue Code of 1986 (relating to transfer to
corporation controlled by transferor) is amended by redesig-
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nating subsection (h) as subsection (i) and by inserting
after subsection (g) the following new subsection:
‘‘(h) TREATMENT
OF TRANSFERS
OF INTANGIBLE
PROPERTY.—
‘‘(1) TRANSFERS OF LESS THAN ALL SUBSTAN-
TIAL RIGHTS.
‘‘(A) IN GENERAL.—A transfer of an inter-
est in intangible property (as defined in section
936(h)(3)(B)) shall be treated under this section
as a transfer of property even if the transfer is
of less than all of the substantial rights of the
transferor in the property.
‘‘(B) ALLOCATION OF BASIS.—In the case of
a transfer of less than all of the substantial
rights of the transferor in the intangible prop-
erty, the transferor’s basis immediately before the
transfer shall be allocated among the rights re-
tained by the transferor and the rights trans-
ferred on the basis of their respective fair market
values.
‘‘(2) NONRECOGNITION NOT TO APPLY TO INTAN-
GIBLE
PROPERTY
DEVELOPED
FOR
TRANSFEREE.—
This section shall not apply to a transfer of intan-
gible property developed by the transferor or any re-
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lated person if such development was pursuant to an
arrangement with the transferee.’’.
(b) TRANSFERS TO PARTNERSHIPS.—Subsection (d) of
section 721 of the Internal Revenue Code of 1986 is amend-
ed to read as follows:
‘‘(d) TRANSFERS OF INTANGIBLE PROPERTY.—
‘‘(1) IN GENERAL.—Rules similar to the rules of
section 351(h) shall apply for purposes of this section.
‘‘(2) TRANSFERS TO FOREIGN PARTNERSHIPS.—
For regulatory authority to treat intangibles trans-
ferred 
to 
a 
partnership 
as 
sold, 
see 
section
367(d)(3).’’.
(c) EFFECTIVE DATE.—The amendments made by this
section shall apply to transfers on or after the date of the
enactment of this Act.
SEC. 506. INCREASE IN ELECTIVE WITHHOLDING RATE FOR
NONPERIODIC 
DISTRIBUTIONS 
FROM 
DE-
FERRED COMPENSATION PLANS.
(a) IN GENERAL.—Section 3405(b)(1) of the Internal
Revenue Code of 1986 (relating to withholding) is amended
by striking ‘‘10 percent’’ and inserting ‘‘15 percent’’.
(b) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to distributions after December 31,
2000.
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TITLE VI—TRADE ADJUSTMENT
ASSISTANCE FOR FARMERS
Subtitle A—Amendments to the
Trade Act of 1974
SEC. 601. SHORT TITLE.
This title may be cited as the ‘‘Trade Adjustment As-
sistance for Farmers Act’’.
SEC. 602. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.
(a) IN GENERAL.—Title II of the Trade Act of 1974
(19 U.S.C. 2251 et seq.) is amended by adding at the end
the following new chapter:
‘‘CHAPTER 6—ADJUSTMENT ASSISTANCE
FOR FARMERS
‘‘SEC. 291. DEFINITIONS.
‘‘In this chapter:
‘‘(1) AGRICULTURAL
COMMODITY
PRODUCER.—
The term ‘agricultural commodity producer’ means
any person who is engaged in the production and sale
of an agricultural commodity in the United States
and who owns or shares the ownership and risk of
loss of the agricultural commodity.
‘‘(2) AGRICULTURAL COMMODITY.—The term ‘ag-
ricultural commodity’ means any agricultural com-
modity (including livestock, fish, or harvested seafood)
in its raw or natural state.
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‘‘(3) DULY AUTHORIZED REPRESENTATIVE.—The
term ‘duly authorized representative’ means an asso-
ciation of agricultural commodity producers.
‘‘(4) NATIONAL AVERAGE PRICE.—The term ‘na-
tional average price’ means the national average
price paid to an agricultural commodity producer for
an agricultural commodity in a marketing year as
determined by the Secretary of Agriculture.
‘‘(5) CONTRIBUTED IMPORTANTLY.—
‘‘(A) IN GENERAL.—The term ‘contributed
importantly’ means a cause which is important
but not necessarily more important than any
other cause.
‘‘(B) DETERMINATION OF CONTRIBUTED IM-
PORTANTLY.—The determination of whether im-
ports of articles like or directly competitive with
an agricultural commodity with respect to which
the petition under this chapter was filed contrib-
uted importantly to a decline in the price of the
agricultural commodity shall be made by the
Secretary of Agriculture.
‘‘(6) SECRETARY.—The term ‘Secretary’ means
the Secretary of Agriculture.
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‘‘SEC. 292. PETITIONS; GROUP ELIGIBILITY.
‘‘(a) IN GENERAL.—A petition for a certification of
eligibility to apply for adjustment assistance under this
chapter may be filed with the Secretary by a group of agri-
cultural commodity producers or by their duly authorized
representative. Upon receipt of the petition, the Secretary
shall promptly publish notice in the Federal Register that
the Secretary has received the petition and initiated an in-
vestigation.
‘‘(b) HEARINGS.—If the petitioner, or any other person
found by the Secretary to have a substantial interest in the
proceedings, submits not later than 10 days after the date
of the Secretary’s publication under subsection (a) a request
for a hearing, the Secretary shall provide for a public hear-
ing and afford such interested persons an opportunity to
be present, to produce evidence, and to be heard.
‘‘(c) GROUP ELIGIBILITY REQUIREMENTS.—The Sec-
retary shall certify a group of agricultural commodity pro-
ducers as eligible to apply for adjustment assistance under
this chapter if the Secretary determines—
‘‘(1) that the national average price for the agri-
cultural commodity, or a class of goods within the ag-
ricultural commodity, produced by the group for the
most recent marketing year for which the national av-
erage price is available is less than 80 percent of the
average of the national average price for such agricul-
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tural commodity, or such class of goods, for the 5
marketing years preceding the most recent marketing
year; and
‘‘(2) that either—
‘‘(A) increases in imports of articles like or
directly competitive with the agricultural com-
modity, or class of goods within the agricultural
commodity, produced by the group contributed
importantly to the decline in price described in
paragraph (1); or
‘‘(B) imports of articles like or directly
competitive with the agricultural commodity, or
class of goods within the agricultural commodity,
produced by the group account for a significant
percentage of the domestic market for the agri-
cultural commodity (or class of goods) and have
contributed importantly to the decline in price
described in paragraph (1).
‘‘(d) SPECIAL RULE FOR QUALIFIED SUBSEQUENT
YEARS.—A group of agricultural commodity producers cer-
tified as eligible under section 293 shall be eligible to apply
for assistance under this chapter in any qualified year after
the year the group is first certified, if the Secretary deter-
mines that—
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‘‘(1) the national average price for the agricul-
tural commodity, or class of goods within the agricul-
tural commodity, produced by the group for the most
recent marketing year for which the national average
price is available is equal to or less than the price de-
termined under subsection (c)(1); and
‘‘(2) the requirements of subsection (c)(2) (A) or
(B) are met.
‘‘(e) DETERMINATION OF QUALIFIED YEAR AND COM-
MODITY.—In this chapter:
‘‘(1) QUALIFIED
YEAR.—The term ‘qualified
year’, with respect to a group of agricultural com-
modity producers certified as eligible under section
293, means each consecutive year after the year in
which the group is certified that the Secretary makes
the determination under subsection (c) or (d), as the
case may be.
‘‘(2) CLASSES
OF
GOODS
WITHIN
A
COM-
MODITY.—In any case in which there are separate
classes of goods within an agricultural commodity,
the Secretary shall treat each class as a separate com-
modity in determining group eligibility, the national
average price, and level of imports under this section
and section 296.
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‘‘SEC. 293. DETERMINATIONS BY SECRETARY.
‘‘(a) IN GENERAL.—As soon as possible after the date
on which a petition is filed under section 292, but in any
event not later than 60 days after that date, the Secretary
shall determine whether the petitioning group meets the re-
quirements of section 292(c) (or (d), as the case may be)
and shall, if so, issue a certification of eligibility to apply
for assistance under this chapter covering agricultural com-
modity producers in any group that meet the requirements.
Each certification shall specify the date on which eligibility
under this chapter begins.
‘‘(b) NOTICE.—Upon making a determination on a pe-
tition, the Secretary shall promptly publish a summary of
the determination in the Federal Register together with the
Secretary’s reasons for making the determination.
‘‘(c) TERMINATION OF CERTIFICATION.—Whenever the
Secretary determines, with respect to any certification of
eligibility under this chapter, that the decline in price for
the agricultural commodity covered by the certification is
no longer attributable to the conditions described in section
292, the Secretary shall terminate such certification and
promptly cause notice of such termination to be published
in the Federal Register together with the Secretary’s reasons
for making such determination.
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‘‘SEC. 294. STUDY BY SECRETARY WHEN INTERNATIONAL
TRADE COMMISSION BEGINS INVESTIGATION.
‘‘(a) IN GENERAL.—Whenever the International Trade
Commission (in this chapter referred to as the ‘Commis-
sion’) begins an investigation under section 202 with re-
spect to an agricultural commodity, the Commission shall
immediately notify the Secretary of the investigation. Upon
receipt of the notification, the Secretary shall immediately
begin a study of—
‘‘(1) the number of agricultural commodity pro-
ducers producing a like or directly competitive agri-
cultural commodity who have been or are likely to be
certified as eligible for adjustment assistance under
this chapter, and
‘‘(2) the extent to which the adjustment of such
producers to the import competition may be facili-
tated through the use of existing programs.
‘‘(b) REPORT.—The report of the Secretary of the study
under subsection (a) shall be made to the President not later
than 15 days after the day on which the Commission makes
its report under section 202(f). Upon making his report to
the President, the Secretary shall also promptly make it
public (with the exception of information which the Sec-
retary determines to be confidential) and shall have a sum-
mary of it published in the Federal Register.
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‘‘SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COM-
MODITY PRODUCERS.
‘‘(a) IN GENERAL.—The Secretary shall provide full
information to producers about the benefit allowances,
training, and other employment services available under
this title and about the petition and application procedures,
and the appropriate filing dates, for such allowances, train-
ing, and services. The Secretary shall provide whatever as-
sistance is necessary to enable groups to prepare petitions
or applications for program benefits under this title.
‘‘(b) NOTICE OF BENEFITS.—
‘‘(1) IN
GENERAL.—The Secretary shall mail
written notice of the benefits available under this
chapter to each agricultural commodity producer that
the Secretary has reason to believe is covered by a cer-
tification made under this chapter.
‘‘(2) OTHER NOTICE.—The Secretary shall pub-
lish notice of the benefits available under this chapter
to agricultural commodity producers that are covered
by each certification made under this chapter in
newspapers of general circulation in the areas in
which such producers reside.
‘‘SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICUL-
TURAL COMMODITY PRODUCERS.
‘‘(a) IN GENERAL.—Payment of a trade adjustment al-
lowance shall be made to an adversely affected agricultural
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commodity producer covered by a certification under this
chapter who files an application for such allowance within
90 days after the date on which the Secretary makes a deter-
mination and issues a certification of eligibility under sec-
tion 293, if the following conditions are met:
‘‘(1) The producer submits to the Secretary suffi-
cient information to establish the amount of agricul-
tural commodity covered by the application filed
under subsection (a), that was produced by the pro-
ducer in the most recent year.
‘‘(2) The producer certifies that the producer has
not received cash benefits under any provision of this
title other than this chapter.
‘‘(3) The producer’s net farm income (as deter-
mined by the Secretary) for the most recent year is
less than the producer’s net farm income for the latest
year in which no adjustment assistance was received
by the producer under this chapter.
‘‘(4) The producer certifies that the producer has
met with an Extension Service employee or agent to
obtain, at no cost to the producer, information and
technical assistance that will assist the producer in
adjusting to import competition with respect to the
adversely 
affected 
agricultural 
commodity,
including—
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‘‘(A) information regarding the feasibility
and desirability of substituting 1 or more alter-
native commodities for the adversely affected ag-
ricultural commodity; and
‘‘(B) technical assistance that will improve
the competitiveness of the production and mar-
keting of the adversely affected agricultural com-
modity by the producer, including yield and
marketing improvements.
‘‘(b) AMOUNT OF CASH BENEFITS.—
‘‘(1) IN GENERAL.—Subject to the provisions of
section 298, an adversely affected agricultural com-
modity producer described in subsection (a) shall be
entitled to adjustment assistance under this chapter
in an amount equal to the product of—
‘‘(A) one-half of the difference between—
‘‘(i) an amount equal to 80 percent of
the average of the national average price of
the agricultural commodity covered by the
application described in subsection (a) for
the 5 marketing years preceding the most
recent marketing year, and
‘‘(ii) the national average price of the
agricultural commodity for the most recent
marketing year, and
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‘‘(B) the amount of the agricultural com-
modity produced by the agricultural commodity
producer in the most recent marketing year.
‘‘(2) SPECIAL
RULE
FOR
SUBSEQUENT
QUALI-
FIED
YEARS.—The amount of cash benefits for a
qualified year shall be determined in the same man-
ner as cash benefits are determined under paragraph
(1) except that the average national price of the agri-
cultural commodity shall be determined under para-
graph (1)(A)(i) by using the 5-marketing-year period
used to determine the amount of cash benefits for the
first certification.
‘‘(c) MAXIMUM AMOUNT OF CASH ASSISTANCE.—The
maximum amount of cash benefits an agricultural com-
modity producer may receive in any 12-month period shall
not exceed $10,000.
‘‘(d) LIMITATIONS ON OTHER ASSISTANCE.—An agri-
cultural commodity producer entitled to receive a cash ben-
efit under this chapter—
‘‘(1) shall not be eligible for any other cash ben-
efit under this title, and
‘‘(2) shall be entitled to employment services and
training benefits under sections 235 and 236.
‘‘SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.
‘‘(a) IN GENERAL.—
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‘‘(1) REPAYMENT.—If the Secretary, or a court
of competent jurisdiction, determines that any person
has received any payment under this chapter to which
the person was not entitled, such person shall be liable
to repay such amount to the Secretary, except that the
Secretary may waive such repayment if the Secretary
determines, in accordance with guidelines prescribed
by the Secretary that—
‘‘(A) the payment was made without fault
on the part of such person, and
‘‘(B) requiring such repayment would be
contrary to equity and good conscience.
‘‘(2) RECOVERY OF OVERPAYMENT.—Unless an
overpayment is otherwise recovered, or waived under
paragraph (1), the Secretary shall recover the over-
payment by deductions from any sums payable to
such person under this chapter.
‘‘(b) FALSE STATEMENTS.—If the Secretary, or a court
of competent jurisdiction, determines that a person—
‘‘(1) knowingly has made, or caused another to
make, a false statement or representation of a mate-
rial fact, or
‘‘(2) knowingly has failed, or caused another to
fail, to disclose a material fact,
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and as a result of such false statement or representation,
or of such nondisclosure, such person has received any pay-
ment under this chapter to which the person was not enti-
tled, such person shall, in addition to any other penalty
provided by law, be ineligible for any further payments
under this chapter.
‘‘(c) NOTICE AND DETERMINATION.—Except for over-
payments determined by a court of competent jurisdiction,
no repayment may be required, and no deduction may be
made, under this section until a determination under sub-
section (a)(1) by the Secretary has been made, notice of the
determination and an opportunity for a fair hearing there-
on has been given to the person concerned, and the deter-
mination has become final.
‘‘(d) PAYMENT TO TREASURY.—Any amount recovered
under this section shall be returned to the Treasury of the
United States.
‘‘(e) PENALTIES.—Whoever makes a false statement of
a material fact knowing it to be false, or knowingly fails
to disclose a material fact, for the purpose of obtaining or
increasing for himself or for any other person any payment
authorized to be furnished under this chapter shall be fined
not more than $10,000 or imprisoned for not more than
1 year, or both.