In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Equity and Accountability 
through Research Act of 2009''.

SEC. 2. NATIONAL INSTITUTE FOR MINORITY HEALTH AND HEALTH DISPARITIES.

    (a) Redesignation.--
            (1) In general.--Title IV of the Public Health Service Act 
        (42 U.S.C. 281 et seq.) is amended--
                    (A) in section 401(b)(24), by striking ``National 
                Center on Minority Health and Health Disparities'' and 
                inserting ``National Institute for Minority Health and 
                Health Disparities''; and
                    (B) in subpart 6 of part E--
                            (i) in the subpart heading, by striking 
                        ``Center'' and inserting ``Institute'';
                            (ii) in the headings of sections 485E and 
                        485H, by striking ``center'' and inserting 
                        ``institute''; and
                            (iii) by striking (other than in section 
                        485E(i)(1)) the term ``Center'' each place it 
                        appears and inserting ``Institute''.
            (2) References.--Any reference in any law, map, regulation, 
        document, paper, or other record of the United States to the 
        National Center on Minority Health and Health Disparities shall 
        be deemed to be a reference to the National Institute for 
        Minority Health and Health Disparities.
    (b) Duties; Authorities; Funding.--Section 485E of the Public 
Health Service Act (42 U.S.C. 287c-31) is amended--
            (1) by amending subsection (e) to read as follows:
    ``(e) Duties of the Director.--
            ``(1) Interagency coordination of minority health and 
        health disparity activities.--With respect to minority health 
        and health disparities, the Director of the Institute shall 
        plan, coordinate, and evaluate research and other activities 
        conducted or supported by the institutes and centers of the 
        National Institutes of Health. In carrying out the preceding 
        sentence, the Director of the Institute shall evaluate the 
        minority health and health disparity activities of each of such 
        institutes and centers and shall provide for the periodic 
        reevaluation of such activities. Such institutes and centers 
        shall be responsible for providing information to the 
        Institute, including data on clinical trials funded or 
        conducted by these institutes and centers.
            ``(2) Consultations.--The Director of the Institute shall 
        carry out this subpart (including developing and revising the 
        plan and budget required by subsection (f) in consultation with 
        the heads of the institutes and centers of the National 
        Institutes of Health, the advisory councils of such institutes 
        and centers, and the advisory council established pursuant to 
        subsection (j).
            ``(3) Coordination of activities.--The Director of the 
        Institute--
                    ``(A) shall act as the primary Federal official 
                with responsibility for coordinating all research and 
                activities conducted or supported by the National 
                Institutes of Health on minority or other health 
                disparities;
                    ``(B) shall represent the health disparities 
                research program of the National Institutes of Health, 
                including the minority health and other health 
                disparities research program, at all relevant executive 
                branch task forces, committees, and planning 
                activities; and
                    ``(C) shall maintain communications with all 
                relevant agencies of the Public Health Service, 
                including the Indian Health Service, and various other 
                departments and agencies of the Federal Government to 
                ensure the timely transmission of information 
                concerning advances in minority health disparities 
                research and other health disparities research among 
                these various agencies for dissemination to affected 
                communities and health care providers.'';
            (2) by amending subsection (f) to read as follows:
    ``(f) Strategic Plan.--
            ``(1) In general.--Subject to the provisions of this 
        section and other applicable law, the Director of the 
        Institute, in consultation with the Director of NIH, the 
        Directors of the other institutes and centers of the National 
        Institutes of Health, and the advisory council established 
        pursuant to subsection (j), shall--
                    ``(A) annually review and revise a strategic plan 
                (referred to in this section as `the plan') and budget 
                for the conduct and support of all minority health 
                disparity research and other health disparity research 
                activities of the institutes and centers of the 
                National Institutes of Health that include time-based 
                targeted objectives with measurable outcomes and assure 
                that the annual review and revision of the plan uses an 
                established trans-National Institutes of Health process 
                subject to timely review, approval, and dissemination;
                    ``(B) ensure that the plan and budget establish 
                priorities among the health disparities research 
                activities that such agencies are authorized to carry 
                out;
                    ``(C) ensure that the plan and budget establish 
                objectives regarding such activities, describe the 
                means for achieving the objectives, and designate the 
                date by which the objectives are expected to be 
                achieved;
                    ``(D) ensure that all amounts appropriated for such 
                activities are expended in accordance with the plan and 
                budget;
                    ``(E) annually submit to Congress a report on the 
                progress made with respect to the plan; and
                    ``(F) create and implement a plan for the systemic 
                review of research activities supported by the National 
                Institutes of Health that are within the mission of 
                both the Institute and other institutes and centers of 
                the National Institutes of Health, including by 
                establishing mechanisms for--
                            ``(i) tracking minority health and health 
                        disparity research conducted within the 
                        institutes and centers assessing the 
                        appropriateness of this research with regard to 
                        the overall goals and objectives of the plan;
                            ``(ii) the early identification of 
                        applications and proposals for grants, 
                        contracts, and cooperative agreements 
                        supporting extramural training, research, and 
                        development, that are submitted to the 
                        institutes and centers that are within the 
                        mission of the Institute;
                            ``(iii) providing the Institute with the 
                        written descriptions and scientific peer review 
                        results of such applications and proposals;
                            ``(iv) enabling the institutes and centers 
                        to consult with the Director of the Institute 
                        prior to final approval of such applications 
                        and proposals; and
                            ``(v) reporting to the Director of the 
                        Institute all such applications and proposals 
                        that are approved for funding by the institutes 
                        and centers.
            ``(2) Certain components of plan and budget.--With respect 
        to health disparities research activities of the agencies of 
        the National Institutes of Health, the Director of the 
        Institute shall ensure that the plan and budget under paragraph 
        (1) provide for--
                    ``(A) basic research and applied research, 
                including research and development with respect to 
                products;
                    ``(B) research that is conducted by the agencies;
                    ``(C) research that is supported by the agencies;
                    ``(D) proposals developed pursuant to solicitations 
                by the agencies and for proposals developed 
                independently of such solicitations; and
                    ``(E) behavioral research and social sciences 
                research, which may include cultural and linguistic 
                research in each of the agencies.
            ``(3) Minority health disparities research.--The plan and 
        budget under paragraph (1) shall include a separate statement 
        of the plan and budget for minority health disparities 
        research.'';
            (3) by amending subsection (h) to read as follows:
    ``(h) Research Endowments.--
            ``(1) In general.--The Director of the Institute shall 
        carry out a program to facilitate minority health and health 
        disparities research and other health disparities research by 
        providing research endowments at--
                    ``(A) centers of excellence under section 736; and
                    ``(B) centers of excellence under section 485F.
            ``(2) Eligibility.--The Director of the Institute shall 
        provide for a research endowment under paragraph (1) only if 
        the institution involved meets the following conditions:
                    ``(A) The institution does not have an endowment 
                that is worth in excess of an amount equal to 50 
                percent of the national average of endowment funds at 
                institutions that conduct similar biomedical research 
                or training of health professionals.
                    ``(B) The application of the institution under 
                paragraph (1) regarding a research endowment has been 
                recommended pursuant to technical and scientific peer 
                review and has been approved by the advisory council 
                established pursuant to subsection (j).
                    ``(C) The institution at any time was deemed to be 
                eligible to receive a grant under section 736 and at 
                any time received a research endowment under paragraph 
                (1).''; and
            (4) by adding at the end the following:
    ``(k) Funding.--
            ``(1) Full funding budget.--
                    ``(A) In general.--With respect to a fiscal year, 
                the Director of the Institute shall prepare and submit 
                directly to the President, for review and transmittal 
                to Congress, a budget estimate for carrying out the 
                plan for the fiscal year, after reasonable opportunity 
                for comment (but without change) by the Secretary, the 
                Director of the National Institutes of Health, the 
                directors of the other institutes and centers of the 
                National Institutes of Health, and the advisory council 
                established pursuant to subsection (j). The budget 
                estimate shall include an estimate of the number and 
                type of personnel needs for the Institute.
                    ``(B) Amounts necessary.--The budget estimate 
                submitted under subparagraph (A) shall estimate the 
                amounts necessary for the institutes and centers of the 
                National Institutes of Health to carry out all minority 
                health and health disparities activities determined by 
                the Director of the Institute to be appropriate, 
                without regard to the probability that such amounts 
                will be appropriated.
            ``(2) Alternate budgets.--
                    ``(A) In general.--With respect to a fiscal year, 
                the Director of the Institute shall prepare and submit 
                to the Secretary and the Director of the National 
                Institutes of Health the budget estimates described in 
                subparagraph (B) for carrying out the plan for the 
                fiscal year. The Secretary and such Director shall 
                consider each of such estimates in making 
                recommendations to the President regarding a budget for 
                the plan for such year.
                    ``(B) Description.--With respect to the fiscal year 
                involved, the budget estimates referred to in 
                subparagraph (A) for the plan are as follows:
                            ``(i) The budget estimate submitted under 
                        paragraph (1).
                            ``(ii) A budget estimate developed on the 
                        assumption that the amounts appropriated will 
                        be sufficient only for--
                                    ``(I) continuing the conduct by the 
                                institutes and centers of the National 
                                Institutes of Health of existing 
                                minority health and health disparity 
                                activities (if approved for 
                                continuation), and continuing the 
                                support of such activities by the 
                                institutes and centers in the case of 
                                projects or programs for which the 
                                institutes or centers have made a 
                                commitment of continued support; and
                                    ``(II) carrying out activities that 
                                are in addition to activities specified 
                                in subclause (I), only for which the 
                                Director determines there is the most 
                                substantial need.
                            ``(iii) Such other budget estimates as the 
                        Director of the Institute determines to be 
                        appropriate.
    ``(l) Authorization of Appropriations.--There are authorized to be 
appropriated $1,000,000,000 for fiscal year 2010 and such sums as may 
be necessary for each of fiscal years 2011 through 2014, to carry out 
this section.''.
Example Output: Health Equity and Accountability through Research Act of 2009 - Amends the Public Health Service Act to rename the National Center on Minority Health and Health Disparities as the National Institute for Minority Health and Health Disparities. Revises and expands the duties of the Director of such Institute relating to coordination of research activities conducted by the National Institute of Health (NIH) and review of a strategic plan and budget for minority health disparity research.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Air and Health Quality Empowerment 
Zone Designation Act of 2008''.

SEC. 2. PURPOSE.

    The purpose of this Act is to establish criteria through the use of 
which specific geographical areas--
            (1) shall be designated as air and health quality 
        empowerment zones; and
            (2) may apply for grants authorized for the purpose of 
        replacing or retrofitting polluting vehicles or engines (or 
        both vehicles and engines) in order to improve the health of 
        the population living in the zones.

SEC. 3. FINDINGS.

    Congress finds that--
            (1) the San Joaquin Valley faces serious air quality 
        challenges that impact the development, health, and economy of 
        the Valley;
            (2) the Valley emits approximately 624 tons of nitrogen 
        oxides per day, and attainment of the federally mandated 8-hour 
        ozone standard under the Clean Air Act requires emissions of 
        not more than 160 tons of oxides of nitrogen per day;
            (3) the Valley does not attain the federally mandated 
        standard for PM&lt;INF&gt;2.5&lt;/INF&gt;;
            (4) the children of the Valley miss 188,000 school days per 
        year, which translates to 1 in 4 of those children experiencing 
        a day of absence each year due to elevated ozone levels;
            (5) approximately 460 residents of the Valley die earlier 
        than they otherwise would due to elevated ozone levels, and 
        Valley residents experience 23,300 asthma attacks per year, a 
        rate that equals 3 times the State average and 5 times the 
        national average;
            (6) 1 in 5 children residing in the Valley have been 
        diagnosed with asthma;
            (7) nonattainment of Federal air quality standards costs 
        the Valley $3,200,000,000 annually;
            (8) the Valley experiences chronic double-digit 
        unemployment rates; and
            (9) the Federal Government must partner with the Valley and 
        the State to address air quality, health, and economic 
        development for the residents of the Valley through the 
        designation of the Valley as air quality empowerment zone that 
        is eligible for Federal grants and technical assistance.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Agency.--The term ``Agency'' means the Environmental 
        Protection Agency.
            (3) Clean air act.--The term ``Clean Air Act'' means the 
        Clean Air Act (42 U.S.C. 7401 et seq.).
            (4) PM&lt;INF&gt;2.5&lt;/INF&gt;.--The term ``PM&lt;INF&gt;2.5&lt;/INF&gt;'' means 
        particulate matter with a diameter that does not exceed 2.5 
        micrometers.
            (5) Strategic plan.--The term ``strategic plan'' means, 
        with respect to an area, the plan contained in the application 
        for designation of the area under section 5.
            (6) Valley.--The term ``Valley'' means the San Joaquin 
        Valley, California.

SEC. 5. AIR QUALITY EMPOWERMENT ZONE DESIGNATION PROCEDURES.

    (a) In General.--From among the areas nominated for designation 
under this section, the Administrator may designate 1 or more areas as 
air and health quality empowerment zones.
    (b) Period for Which Designation Is in Effect.--
            (1) In general.--Any designation under this section shall 
        remain in effect during the period beginning on the date of the 
        designation and ending on the earlier of--
                    (A) the last day of the tenth calendar year 
                beginning on the date of the designation; or
                    (B) the date on which the Administrator revokes the 
                designation.
            (2) Revocation of designation.--The Administrator may 
        revoke the designation under this section of an area if the 
        Administrator determines that the local air pollution control 
        district in which the designated area is located--
                    (A) has been designated as being in attainment with 
                the national ambient air quality standard for 
                PM&lt;INF&gt;2.5&lt;/INF&gt; and ozone promulgated under the Clean 
                Air Act; or
                    (B) is not complying substantially with, or fails 
                to make progress in achieving the goals of, the 
                strategic plan.
    (c) Limitations on Designations.--No area may be designated under 
subsection (a) unless--
            (1) the area is nominated for designation by the air 
        pollution control district with jurisdiction over the area;
            (2) the air pollution control district provides written 
        assurances satisfactory to the Administrator that the strategic 
        plan will be implemented; and
            (3) the Administrator determines that any information 
        provided is reasonably accurate.
    (d) Application.--No area may be designated under subsection (a) 
unless the application for the designation--
            (1) demonstrates that the nominated area satisfies the 
        eligibility criteria described in section 6; and
            (2) includes a strategic plan for accomplishing the 
        purposes of this Act that--
                    (A) describes--
                            (i) the process by which the nominated area 
                        is a full partner in the process of developing 
                        and implementing the plan; and
                            (ii) the extent to which local institutions 
                        and organizations have contributed to the 
                        planning process;
                    (B) identifies--
                            (i) the amount of State, local, and private 
                        resources that will be available for the 
                        nominated area; and
                            (ii) the private/public partnerships to be 
                        used (which may include participation by, and 
                        cooperation with, institutions of higher 
                        education, medical centers, and other private 
                        and public entities);
                    (C) identifies the funding requested under any 
                Federal program in support of the purposes of this Act;
                    (D) identifies baselines, methods, and benchmarks 
                for measuring the success of carrying out the strategic 
                plan; and
                    (E) includes such other information as may be 
                required by the Administrator.

SEC. 6. ELIGIBILITY CRITERIA.

    (a) In General.--A nominated area shall be eligible for designation 
under section 5(a) only if the area meets all of the following 
criteria:
            (1) Nonattainment.--The nominated area has been designated 
        as being--
                    (A) in extreme nonattainment of the 8-hour ozone 
                national ambient air quality standard promulgated by 
                the Administrator under the Clean Air Act; and
                    (B) in nonattainment of national ambient air 
                quality standard for PM&lt;INF&gt;2.5&lt;/INF&gt; promulgated by 
                the Administrator under that Act.
            (2) Agricultural sources.--The nominated area has--
                    (A) emissions of oxides of nitrogen from farm 
                equipment of at least 30 tons per day in calendar year 
                2010; or
                    (B) emissions of volatile organic compounds from 
                farming operations of at least 40 tons per day in 
                calendar year 2010.
            (3) Air-related health effects.--As of the date of 
        nomination, the nominated area--
                    (A) meets or exceeds the national average per 
                capita incidence of asthma; and
                    (B) meets or exceeds the national average of school 
                days missed due to the health impact of elevated ozone 
                levels.
            (4) Economic impact.--As of the date of nomination, the 
        nominated area experiences unemployment rates higher than the 
        national average.
            (5) State matching funds.--The nominated area is located 
        within a State and local area that will match at least \1/2\ of 
        the funds provided by the Federal Government under this Act.

SEC. 7. ELIGIBLE GRANT APPLICANTS.

    Any air pollution control district or other local governmental 
entity authorized to regulate air quality in a State under the Clean 
Air Act may apply for a grant under this Act.

SEC. 8. AUTHORIZATION OF AIR AND HEALTH EMPOWERMENT GRANTS.

    (a) Eligibility.--
            (1) In general.--Each area designated as an air and health 
        quality empowerment zone under section 5(a) shall be eligible 
        to receive 1 or more grants under this section.
            (2) Amount of grants.--The amount of each grant awarded to 
        a designated air and health quality empowerment zone shall be 
        determined by the Administrator based upon a review of--
                    (A) the information contained in the applications 
                required by section 5(d); and
                    (B) the needs set forth in the applications by 
                those designated as beneficiaries.
            (3) Timing of grants.--With respect to each designated air 
        and health quality empowerment zone, the Administrator shall 
        make--
                    (A) a grant under this section to each such zone on 
                the date of designation of the zone under section 5(a); 
                and
                    (B) the grant under this section to each such zone 
                available on the first day of the first fiscal year 
                that begins after the date of designation of the zone.
            (4) Oversight of grants.--The air pollution control 
        district or other local government entity authorized to 
        regulate air quality in an area designated as an air and health 
        safety empowerment zone under section 5(a) shall oversee the 
        use of any grant funds provided to the zone under this section.
    (b) Use of Grants.--Each air and health safety empowerment zone 
that receives a grant under this section shall use the grant solely--
            (1) to carry out activities that achieve the purposes 
        described in section 2;
            (2) in accordance with the strategic plan for the zone; and
            (3) for activities that benefit the residents of the zone 
        for which the grant is made through improved air quality and 
        health.
    (c) Authorization of Appropriations.--There is authorized to be 
appropriated to the Administrator to provide grants under this section 
$20,000,000 for each of fiscal years 2009 through 2013.
Example Output: Air and Health Quality Empowerment Zone Designation Act of 2008 - Authorizes the Administrator of the Environmental Protection Agency (EPA) to designate areas nominated by local air pollution control districts as air and health quality empowerment zones, which shall be eligible for grants for replacing or retrofitting polluting vehicles and/or engines in order to improve the health of the population living in the zones.

Sets forth area eligibility requirements, including: (1) being in nonattainment of specified national ambient air quality standards for ozone or PM2.5 (particulate matter with a diameter that does not exceed 2.5 micrometers); (2) having specified emission levels from agricultural sources; (3) meeting or exceeding national averages for asthma, school days missed for ozone levels, and unemployment; and (4) being eligible for state or local matching funds.

Prohibits an area from being designated unless the relevant district provides satisfactory assurances that the strategic plan (to be contained in its application) will be implemented. Authorizes the Administrator to revoke the designation if the relevant district: (1) has been designated as being in attainment with the air quality standards; or (2) is failing to comply with, or make progress in achieving the goals of, its strategic plan.

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business and Financial 
Institutions Tax Relief Act of 1999''.

SEC. 2. EXPANSION OF S CORPORATION ELIGIBLE SHAREHOLDERS TO INCLUDE 
              IRAS.

    (a) In General.--Section 1361(c)(2)(A) of the Internal Revenue Code 
of 1986 (relating to certain trusts permitted as shareholders) is 
amended by inserting after clause (v) the following:
                            ``(vi) A trust which constitutes an 
                        individual retirement account under section 
                        408(a), including one designated as a Roth IRA 
                        under section 408A.''
    (b) Treatment as Shareholder.--Section 1361(c)(2)(B) of the 
Internal Revenue Code of 1986 (relating to treatment as shareholders) 
is amended by adding at the end the following:
                            ``(vi) In the case of a trust described in 
                        clause (vi) of subparagraph (A), the individual 
                        for whose benefit the trust was created shall 
                        be treated as a shareholder.''
    (c) Sale of Stock in IRA Relating To S Corporation Election Exempt 
From Prohibited Transaction Rules.--Section 4975(d) of the Internal 
Revenue Code of 1986 (relating to exemptions) is amended by striking 
``or'' at the end of paragraph (14), by striking the period at the end 
of paragraph (15) and inserting ``; or'', and by adding at the end the 
following:
            ``(16) a sale of stock held by a trust which constitutes an 
        individual retirement account under section 408(a) to the 
        individual for whose benefit such account is established if 
        such sale is pursuant to an election under section 1362(a).''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 3. EXCLUSION OF INVESTMENT SECURITIES INCOME FROM PASSIVE INCOME 
              TEST FOR BANK S CORPORATIONS.

    (a) In General.--Section 1362(d)(3)(C) of the Internal Revenue Code 
of 1986 (defining passive investment income) is amended by adding at 
the end the following:
                            ``(v) Exception for banks; etc.--In the 
                        case of a bank (as defined in section 581), a 
                        bank holding company (as defined in section 
                        246A(c)(3)(B)(ii)), or a qualified subchapter S 
                        subsidiary bank, the term `passive investment 
                        income' shall not include--
                                    ``(I) interest income earned by 
                                such bank, bank holding company, or 
                                qualified subchapter S subsidiary bank, 
                                or
                                    ``(II) dividends on assets required 
                                to be held by such bank, bank holding 
                                company, or qualified subchapter S 
                                subsidiary bank to conduct a banking 
                                business, including stock in the 
                                Federal Reserve Bank, the Federal Home 
                                Loan Bank, or the Federal Agricultural 
                                Mortgage Bank or participation 
                                certificates issued by a Federal 
                                Intermediate Credit Bank.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1996.

SEC. 4. INCREASE IN NUMBER OF ELIGIBLE SHAREHOLDERS TO 150.

    (a) In General.--Section 1361(b)(1)(A) of the Internal Revenue Code 
of 1986 (defining small business corporation) is amended by striking 
``75'' and inserting ``150''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 5. TREATMENT OF QUALIFYING DIRECTOR SHARES.

    (a) In General.--Section 1361 of the Internal Revenue Code of 1986 
is amended by adding at the end the following:
    ``(f) Treatment of Qualifying Director Shares.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) qualifying director shares shall not be 
                treated as a second class of stock, and
                    ``(B) no person shall be treated as a shareholder 
                of the corporation by reason of holding qualifying 
                director shares.
            ``(2) Qualifying director shares defined.--For purposes of 
        this subsection, the term `qualifying director shares' means 
        any shares of stock in a bank (as defined in section 581) or in 
        a bank holding company registered as such with the Federal 
        Reserve System--
                            ``(i) which are held by an individual 
                        solely by reason of status as a director of 
                        such bank or company or its controlled 
                        subsidiary; and
                            ``(ii) which are subject to an agreement 
                        pursuant to which the holder is required to 
                        dispose of the shares of stock upon termination 
                        of the holder's status as a director at the 
                        same price as the individual acquired such 
                        shares of stock.
            ``(3) Distributions.--A distribution (not in part or full 
        payment in exchange for stock) made by the corporation with 
        respect to qualifying director shares shall be includible as 
        ordinary income of the holder and deductible to the corporation 
        as an expense in computing taxable income under section 1363(b) 
        in the year such distribution is received.''
    (b) Conforming Amendments.--
            (1) Section 1361(b)(1) of the Internal Revenue Code of 1986 
        is amended by inserting ``, except as provided in subsection 
        (f),'' before ``which does not''.
            (2) Section 1366(a) of such Code is amended by adding at 
        the end the following:
            ``(3) Allocation with respect to qualifying director 
        shares.--The holders of qualifying director shares (as defined 
        in section 1361(f)) shall not, with respect to such shares of 
        stock, be allocated any of the items described in paragraph 
        (1).''
            (3) Section 1373(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (1), by striking the period at 
        the end of paragraph (2) and inserting ``, and'', and adding at 
        the end the following:
            ``(3) no amount of an expense deductible under this 
        subchapter by reason of section 1361(f)(3) shall be apportioned 
        or allocated to such income.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1996.

SEC. 6. BAD DEBT CHARGE OFFS IN YEARS AFTER ELECTION YEAR TREATED AS 
              ITEMS OF BUILT-IN LOSS.

    The Secretary of the Treasury shall modify Regulation 1.1374-4(f) 
for S corporation elections made in taxable years beginning after 
December 31, 1996, with respect to bad debt deductions under section 
166 of the Internal Revenue Code of 1986 to treat such deductions as 
built-in losses under section 1374(d)(4) of such Code during the entire 
period during which the bank recognizes built-in gains from changing 
its accounting method for recognizing bad debts from the reserve method 
under section 585 of such Code to the charge-off method under section 
166 of such Code.

SEC. 7. INCLUSION OF BANKS IN 3-YEAR S CORPORATION RULE FOR CORPORATE 
              PREFERENCE ITEMS.

    (a) In General.--Section 1363(b) of the Internal Revenue Code of 
1986 (relating to computation of corporation's taxable income) is 
amended by adding at the end the following new flush sentence:
``Paragraph (4) shall apply to any bank whether such bank is an S 
corporation or a qualified subchapter S subsidiary.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 8. EXPANSION OF S CORPORATION ELIGIBLE SHAREHOLDERS TO INCLUDE 
              FAMILY LIMITED PARTNERSHIPS.

    (a) In General.--Section 1361(b)(1)(B) of the Internal Revenue Code 
of 1986 (defining small business corporation) is amended--
            (1) by striking ``or an organization'' and inserting ``an 
        organization'', and
            (2) by inserting ``, or a family partnership described in 
        subsection (c)(8)'' after ``subsection (c)(6)''.
    (b) Family Partnership.--Section 1361(c) of the Internal Revenue 
Code of 1986 (relating to special rules for applying subsection (b)), 
as amended by section 5, is amended by adding at the end the following:
            ``(8) Family partnerships.--
                    ``(A) In general.--For purposes of subsection 
                (b)(1)(B), any partnership or limited liability company 
                may be a shareholder in an S corporation if--
                            ``(i) all partners or members are members 
                        of 1 family as determined under section 
                        704(e)(3), and
                            ``(ii) all of the partners or members would 
                        otherwise be eligible shareholders of an S 
                        corporation.
                    ``(B) Treatment as shareholders.--For purposes of 
                subsection (b)(1)(A), in the case of a partnership or 
                limited liability company described in subparagraph 
                (A), each partner or member shall be treated as a 
                shareholder.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 9. ISSUANCE OF PREFERRED STOCK PERMITTED.

    (a) In General.--Section 1361 of the Internal Revenue Code of 1986, 
as amended by section 5(a), is amended by adding at the end the 
following:
    ``(g) Treatment of Qualified Preferred Stock.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) qualified preferred stock shall not be 
                treated as a second class of stock, and
                    ``(B) no person shall be treated as a shareholder 
                of the corporation by reason of holding qualified 
                preferred stock.
            ``(2) Qualified preferred stock defined.--For purposes of 
        this subsection, the term `qualified preferred stock' means 
        stock which meets the requirements of subparagraphs (A), (B), 
        and (C) of section 1504(a)(4). Stock shall not fail to be 
        treated as qualified preferred stock solely because it is 
        convertible into other stock.
            ``(3) Distributions.--A distribution (not in part or full 
        payment in exchange for stock) made by the corporation with 
        respect to qualified preferred stock shall be includible as 
        ordinary income of the holder and deductible to the corporation 
        as an expense in computing taxable income under section 1363(b) 
        in the year such distribution is received.''
    (b) Conforming Amendments.--
            (1) Section 1361(b)(1) of the Internal Revenue Code of 
        1986, as amended by section 5(b)(1), is amended by striking 
        ``subsection (f)'' and inserting ``subsections (f) and (g)''.
            (2) Section 1366(a) of such Code, as amended by section 
        5(b)(2), is amended by adding at the end the following:
            ``(4) Allocation with respect to qualified preferred 
        stock.--The holders of qualified preferred stock (as defined in 
        section 1361(g)) shall not, with respect to such stock, be 
        allocated any of the items described in paragraph (1).''
            (3) Section 1373(a)(3) of such Code, as added by section 
        5(b)(3), is amended by inserting ``or 1361(g)(3)'' after 
        ``section 1361(f)(3)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 10. CONSENT TO ELECTIONS.

    (a) 90 Percent of Shares Required for Consent to Election.--Section 
1362(a)(2) of the Internal Revenue Code of 1986 (relating to all 
shareholders must consent to election) is amended--
            (1) by striking ``all persons who are shareholders in'' and 
        inserting ``shareholders holding at least 90 percent of the 
        shares of'', and
            (2) by striking ``All shareholders'' in the heading and 
        inserting ``At least 90 percent of shares''.
    (b) Rules for Consent.--Section 1362(a) of the Internal Revenue 
Code of 1986 (relating to election) is amended by adding at the end the 
following:
            ``(3) Rules for consent.--For purposes of making any 
        consent required under paragraph (2) or subsection (d)(1)(B)--
                    ``(A) each joint owner of shares shall consent with 
                respect to such shares,
                    ``(B) the personal representative or other 
                fiduciary authorized to act on behalf of the estate of 
                a deceased individual shall consent for the estate,
                    ``(C) one parent, the custodian, the guardian, or 
                the conservator shall consent with respect to shares 
                owned by a minor or subject to a custodianship, 
                guardianship, conservatorship, or similar arrangement,
                    ``(D) the trustee of a trust shall consent with 
                respect to shares owned in trust,
                    ``(E) the trustee of the estate of a bankrupt 
                individual shall consent for shares owned by a 
                bankruptcy estate,
                    ``(F) an authorized officer or the trustee of an 
                organization described in subsection (c)(6) shall 
                consent for the shares owned by such organization, and
                    ``(G) in the case of a partnership or limited 
                liability company described in subsection (c)(8)--
                            ``(i) all general partners shall consent 
                        with respect to shares owned by such 
                        partnership,
                            ``(ii) all managers shall consent with 
                        respect to shares owned by such company if 
                        management of such company is vested in 1 or 
                        more managers, and
                            ``(iii) all members shall consent with 
                        respect to shares owned by such company if 
                        management of such company is vested in the 
                        members.''
    (c) Treatment of Nonconsenting Shareholder Stock.--
            (1) In general.--Section 1361 of the Internal Revenue Code 
        of 1986, as amended by section 9(a), is amended by adding at 
        the end the following:
    ``(h) Treatment of Nonconsenting Shareholder Stock.--
            ``(1) In general.--For purposes of this subchapter--
                    ``(A) nonconsenting shareholder stock shall not be 
                treated as a second class of stock,
                    ``(B) such stock shall be treated as C corporation 
                stock, and
                    ``(C) the shareholder's pro rata share under 
                section 1366(a)(1) with respect to such stock shall be 
                subject to tax paid by the S corporation at the highest 
                rate of tax specified in section 11(b).
            ``(2) Nonconsenting shareholder stock defined.--For 
        purposes of this subsection, the term `nonconsenting 
        shareholder stock' means stock of an S corporation which is 
        held by a shareholder who did not consent to an election under 
        section 1362(a) with respect to such S corporation.
            ``(3) Distributions.--A distribution (not in part or full 
        payment in exchange for stock) made by the corporation with 
        respect to nonconsenting shareholder stock shall be includible 
        as ordinary income of the holder and deductible to the 
        corporation as an expense in computing taxable income under 
        section 1363(b) in the year such distribution is received.''
            (2) Conforming amendment.--Section 1361(b)(1) of the 
        Internal Revenue Code of 1986, as amended by section 9(b)(1), 
        is amended by striking ``subsections (f) and (g)'' and 
        inserting ``subsections (f), (g), and (h)''.
    (d) Effective Date.--The amendments made by this section shall 
apply to elections made in taxable years beginning after December 31, 
1999.

SEC. 11. INFORMATION RETURNS FOR QUALIFIED SUBCHAPTER S SUBSIDIARIES.

    (a) In General.--Section 1361(b)(3)(A) of the Internal Revenue Code 
of 1986 (relating to treatment of certain wholly owned subsidiaries) is 
amended by inserting ``and in the case of information returns required 
under part III of subchapter A of chapter 61'' after ``Secretary''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.
Example Output:
Small Business and Financial Institutions Tax Relief Act of 1999 - Amends the Internal Revenue Code to permit S corporation eligible shareholders to include individual retirement accounts (IRAs). 
(Sec. 2) Exempts from prohibited transaction rules any sale of stock in an IRA pursuant to a small business corporation's election to be an S corporation. 
(Sec. 3) Excludes from the definition of passive income for purposes of S status termination any interest income earned by or dividends on assets required to be held by a bank, a bank holding company, or a qualified subchapter S subsidiary bank. 
(Sec. 4) Increases from 75 to 150 the maximum number of shareholders a small business organization may have to be eligible to elect S corporation treatment. 
(Sec. 5) States that stock held by a bank director as required by banking regulations (director qualifying stock) shall not be considered a disqualifying second class of S corporation stock. 
(Sec. 6) Directs the Secretary of the Treasury to modify a certain regulation to permit an S corporation bank to treat certain bad debt deductions as built-in losses during the entire period during which the bank recognized built-in gains from changing its accounting method for recognizing bad debts from the reserve method to the charge-off method. 
(Sec. 7) Includes all banks within the three-year deduction preference rule. 
(Sec. 8) Makes family limited partnerships eligible to be S corporation shareholders. 
(Sec. 9) Permits the issuance of qualified preferred stock, which shall not be treated as second class stock.  Makes any distribution (not in payment in exchange for stock) made by an S corporation with respect to qualified preferred stock includible as ordinary income of the holder and deductible to the corporation as an expense. 
(Sec. 10) Reduces from 100 percent to 90 percent the percentage of shares held by shareholders necessary for consent to election by a small business organization to be an S corporation.  Prescribes rules for such consent. 
(Sec. 11) Revises exceptions to the criteria for the treatment of certain wholly owned subchapter S subsidiaries with reference to required information returns.