‘‘(a) EXCLUSION.—Gross income shall not include
the value of any subsidy provided (directly or indirectly)
by a public utility to a customer for the purchase or instal-
lation of any energy conservation measure.’’
(2) Paragraph (2) of section 136(c) is amend-
ed—
(A) by striking subparagraph (A) and by
redesignating subparagraphs (B) and (C) as
subparagraphs (A) and (B), respectively, and
(B) by striking ‘‘AND SPECIAL RULES’’ in
the paragraph heading.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts received after Decem-
ber 31, 1996, unless received pursuant to a written bind-
ing contract in effect on September 13, 1995, and at all
times thereafter.
Subtitle B—Foreign Trust Tax
Compliance
SEC. 411. IMPROVED INFORMATION REPORTING ON FOR-
EIGN TRUSTS.
(a) IN GENERAL.—Section 6048 (relating to returns
as to certain foreign trusts) is amended to read as follows:
‘‘SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN
FOREIGN TRUSTS.
‘‘(a) NOTICE OF CERTAIN EVENTS.—
‘‘(1) GENERAL RULE.—On or before the 90th
day (or such later day as the Secretary may pre-
scribe) after any reportable event, the responsible
party shall provide written notice of such event to
the Secretary in accordance with paragraph (2).
‘‘(2) CONTENTS
OF
NOTICE.—The notice re-
quired by paragraph (1) shall contain such informa-
tion as the Secretary may prescribe, including—
‘‘(A) the amount of money or other prop-
erty (if any) transferred to the trust in connec-
tion with the reportable event, and
‘‘(B) the identity of the trust and of each
trustee and beneficiary (or class of bene-
ficiaries) of the trust.
‘‘(3) REPORTABLE
EVENT.—For purposes of
this subsection—
‘‘(A) IN GENERAL.—The term ‘reportable
event’ means—
‘‘(i) the creation of any foreign trust
by a United States person,
‘‘(ii) the transfer of any money or
property (directly or indirectly) to a for-
eign trust by a United States person, in-
cluding a transfer by reason of death, and
‘‘(iii) the death of a citizen or resident
of the United States if—
‘‘(I) the decedent was treated as
the owner of any portion of a foreign
trust under the rules of subpart E of
part I of subchapter J of chapter 1,
or
‘‘(II) any portion of a foreign
trust was included in the gross estate
of the decedent.
‘‘(B) EXCEPTIONS.—
‘‘(i) FAIR
MARKET
VALUE
SALES.—
Subparagraph (A)(ii) shall not apply to
any transfer of property to a trust in ex-
change for consideration of at least the fair
market value of the transferred property.
For purposes of the preceding sentence,
consideration other than cash shall be
taken into account at its fair market value
and the rules of section 679(a)(3) shall
apply.
‘‘(ii) DEFERRED COMPENSATION AND
CHARITABLE TRUSTS.—Subparagraph (A)
shall not apply with respect to a trust
which is—
‘‘(I) described in section 402(b),
404(a)(4), or 404A, or
‘‘(II) determined by the Sec-
retary to be described in section
501(c)(3).
‘‘(4) RESPONSIBLE
PARTY.—For purposes of
this 
subsection, 
the 
term 
‘responsible 
party’
means—
‘‘(A) the grantor in the case of the cre-
ation of an inter vivos trust,
‘‘(B) the transferor in the case of a report-
able event described in paragraph (3)(A)(ii)
other than a transfer by reason of death, and
‘‘(C) the executor of the decedent’s estate
in any other case.
‘‘(b) UNITED
STATES
GRANTOR
OF
FOREIGN
TRUST.—
‘‘(1) IN GENERAL.—If, at any time during any
taxable year of a United States person, such person
is treated as the owner of any portion of a foreign
trust under the rules of subpart E of part I of sub-
chapter J of chapter 1, such person shall be respon-
sible to ensure that—
‘‘(A) such trust makes a return for such
year which sets forth a full and complete ac-
counting of all trust activities and operations
for the year, the name of the United States
agent for such trust, and such other informa-
tion as the Secretary may prescribe, and
‘‘(B) such trust furnishes such information
as the Secretary may prescribe to each United
States person (i) who is treated as the owner of
any portion of such trust or (ii) who receives
(directly or indirectly) any distribution from the
trust.
‘‘(2) TRUSTS
NOT
HAVING
UNITED
STATES
AGENT.—
‘‘(A) IN
GENERAL.—If the rules of this
paragraph apply to any foreign trust, the deter-
mination of amounts required to be taken into
account with respect to such trust by a United
States person under the rules of subpart E of
part I of subchapter J of chapter 1 shall be de-
termined by the Secretary.
‘‘(B) UNITED STATES AGENT REQUIRED.—
The rules of this paragraph shall apply to any
foreign trust to which paragraph (1) applies un-
less such trust agrees (in such manner, subject
to such conditions, and at such time as the Sec-
retary shall prescribe) to authorize a United
States person to act as such trust’s limited
agent solely for purposes of applying sections
7602, 7603, and 7604 with respect to—
‘‘(i) any request by the Secretary to
examine records or produce testimony re-
lated to the proper treatment of amounts
required to be taken into account under
the rules referred to in subparagraph (A),
or
‘‘(ii) any summons by the Secretary
for such records or testimony.
The appearance of persons or production of
records by reason of a United States person
being such an agent shall not subject such per-
sons or records to legal process for any purpose
other than determining the correct treatment
under this title of the amounts required to be
taken into account under the rules referred to
in subparagraph (A). A foreign trust which ap-
points an agent described in this subparagraph
shall not be considered to have an office or a
permanent establishment in the United States,
or to be engaged in a trade or business in the
United States, solely because of the activities of
such agent pursuant to this subsection.
‘‘(C) OTHER
RULES
TO
APPLY.—Rules
similar to the rules of paragraphs (2) and (4)
of section 6038A(e) shall apply for purposes of
this paragraph.
‘‘(c) REPORTING BY UNITED STATES BENEFICIARIES
OF FOREIGN TRUSTS.—
‘‘(1) IN GENERAL.—If any United States per-
son receives (directly or indirectly) during any tax-
able year of such person any distribution from a for-
eign trust, such person shall make a return with re-
spect to such trust for such year which includes—
‘‘(A) the name of such trust,
‘‘(B) the aggregate amount of the distribu-
tions so received from such trust during such
taxable year, and
‘‘(C) such other information as the Sec-
retary may prescribe.
‘‘(2) INCLUSION IN INCOME IF RECORDS NOT
PROVIDED.—
‘‘(A) IN
GENERAL.—If adequate records
are not provided to the Secretary to determine
the proper treatment of any distribution from a
foreign trust, such distribution shall be treated
as an accumulation distribution includible in
the gross income of the distributee under chap-