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 ``Medicare Identity Theft Prevention 
Act of 2010''.

SEC. 2. PROHIBITION OF INCLUSION OF SOCIAL SECURITY ACCOUNT NUMBERS ON 
              MEDICARE CARDS.

    (a) In General.--Section 205(c)(2)(C) of the Social Security Act 
(42 U.S.C. 405(c)(2)(C)), as amended by section 1414(a)(2) of the 
Patient Protection and Affordable Care Act (Public Law 111-148), is 
amended by adding at the end the following new clause:
    ``(xi) The Secretary of Health and Human Services, in consultation 
with the Commissioner of Social Security, shall establish cost-
effective procedures to ensure that a social security account number 
(or any derivative thereof) is not displayed, coded, or embedded on the 
Medicare card issued to an individual who is entitled to benefits under 
part A of title XVIII or enrolled under part B of title XVIII and that 
any other identifier displayed on such card is easily identifiable as 
not being the social security account number (or a derivative 
thereof).''.
    (b) Effective Date.--
            (1) In general.--The amendment made by subsection (a) shall 
        apply with respect to Medicare cards issued on and after an 
        effective date specified by the Secretary of Health and Human 
        Services, but in no case shall such effective date be later 
        than the date that is 24 months after the date adequate funding 
        is provided pursuant to subsection (d)(2).
            (2) Reissuance.--Subject to subsection (d)(2), in the case 
        of individuals who have been issued such cards before such 
        date, the Secretary of Health and Human Services--
                    (A) shall provide for the reissuance for such 
                individuals of such a card that complies with such 
                amendment not later than 3 years after the effective 
                date specified under paragraph (1); and
                    (B) may permit such individuals to apply for the 
                reissuance of such a card that complies with such 
                amendment before the date of reissuance otherwise 
                provided under subparagraph (A) in such exceptional 
                circumstances as the Secretary may specify.
    (c) Outreach Program.--Subject to subsection (d)(2), the Secretary 
of Health and Human Services, in consultation with the Commissioner of 
Social Security, shall conduct an outreach program to Medicare 
beneficiaries and providers about the new Medicare card provided under 
this section.
    (d) Report to Congress and Limitations on Effective Date.--
            (1) Report.--Not later than 90 days after the date of the 
        enactment of this Act, the Secretary of Health and Human 
        Services, acting through the Administrator of the Centers for 
        Medicare & Medicaid Services and in consultation with the 
        Commissioner of Social Security, shall submit to Congress a 
        report that includes detailed options regarding the 
        implementation of this section, including line-item estimates 
        of and justifications for the costs associated with such 
        options and estimates of timeframes for each stage of 
        implementation. In recommending such options, the Secretary 
        shall take into consideration, among other factors, cost-
        effectiveness and beneficiary outreach and education.
            (2) Limitation; modification of deadlines.--With respect to 
        the amendment made by subsection (a), and the requirements of 
        subsections (b) and (c)--
                    (A) such amendment and requirements shall not apply 
                until adequate funding is appropriated pursuant to 
                paragraph (3) to implement the provisions of this 
                section, as determined by Congress; and
                    (B) any deadlines otherwise established under this 
                section for such amendment and requirements are 
                contingent upon the receipt of adequate funding (as 
                determined in subparagraph (A)) for such 
                implementation.
        The previous sentence shall not affect the timely submission of 
        the report required under paragraph (1).
            (3) Authorization of appropriations.--
                    (A) In general.--In addition to any amounts made 
                available to the Secretary of Health and Human Services 
                for the Program Management Account of the Centers for 
                Medicare & Medicaid Services for administrative 
                expenses and to the Commissioner of Social Security for 
                administrative expenses, and subject to subparagraph 
                (B), taking into consideration the report submitted 
                under paragraph (1), there are authorized to be 
                appropriated such sums as are necessary to carry out 
                the previous subsections of this section, including 
                section 205(c)(2)(C)(xi) of the Social Security Act, as 
                added by subsection (a), for each of the five fiscal 
                years beginning after the date of submittal of the 
                report under paragraph (1).
                    (B) Limitation.--Such funds are not authorized to 
                be appropriated until after receipt of the report 
                provided under paragraph (1).
Example Output: Medicare Identity Theft Prevention Act of 2010 - Amends title II (Old Age, Survivors and Disability Insurance) (OASDI) of the Social Security Act to direct the Secretary of Health and Human Services (HHS) to establish cost-effective procedures to ensure that: (1) a Social Security account number (or any derivative) is not displayed, coded, or embedded on the Medicare card issued to an individual entitled to benefits under part A (Hospital Insurance) of title XVIII (Medicare) of the Social Security Act or enrolled under Medicare part B (Supplementary Medical Insurance); and (2) any other identifier displayed on such card is easily identifiable as not being the Social Security account number (or a derivative).

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``End-User Protection Act of 2014''.

SEC. 2. DEFINITIONS.

    (a) In General.--Section 1a of the Commodity Exchange Act (7 U.S.C. 
1a) is amended--
            (1) by redesignating paragraphs (8) through (51) as 
        paragraphs (9) through (52), respectively;
            (2) by inserting after paragraph (7) the following:
            ``(8) Commercial market participant.--The term `commercial 
        market participant' means any producer, processor, merchant, or 
        commercial user of an exempt or agricultural commodity, or the 
        products or by-products of an exempt or agricultural 
        commodity.'';
            (3) in subparagraph (B) of paragraph (48) (as so 
        redesignated), by striking clause (ii) and inserting the 
        following:
                            ``(ii) any purchase or sale of a 
                        nonfinancial commodity or security for deferred 
                        shipment or delivery, so long as the 
                        transaction is intended to be physically 
                        settled, including any stand-alone or embedded 
                        option for which exercise would result in a 
                        physical delivery obligation;''; and
            (4) in paragraph (50) (as redesignated by paragraph (1)), 
        by striking subparagraph (D) and inserting the following:
                    ``(D) De minimis exception.--
                            ``(i) In general.--The Commission shall 
                        exempt from designation as a swap dealer an 
                        entity that engages in a de minimis quantity of 
                        swap dealing (which shall not be less than 
                        $8,000,000,000) in connection with transactions 
                        with or on behalf of its customers.
                            ``(ii) Regulations.--The Commission shall 
                        promulgate regulations to establish the factors 
                        to be used in a determination under clause (i) 
                        to exempt, including any monetary or other 
                        levels established by the Commission, and those 
                        levels shall only be amended or changed through 
                        an affirmative action of the Commission 
                        undertaken by rule or regulation.''.
    (b) Financial Entity.--Section 2(h)(7)(C) of the Commodity Exchange 
Act (7 U.S.C. 2(h)(7)(C)) is amended--
            (1) in clause (iii)--
                    (A) by striking ``an entity whose'' and inserting 
                the following: ``an entity--
                                    ``(I) whose'';
                    (B) by striking the period at the end and inserting 
                a semicolon; and
                    (C) by adding at the end the following:
                                    ``(II) that is--
                                            ``(aa) a commercial market 
                                        participant;
                                            ``(bb) included in clause 
                                        (i)(VIII); and
                                            ``(cc) not supervised by a 
                                        prudential regulator; or
                                    ``(III) that is included in clause 
                                (i)(VIII) because--
                                            ``(aa) the entity regularly 
                                        enters into foreign exchange or 
                                        derivatives transactions on 
                                        behalf of, or to hedge or 
                                        mitigate, whether directly or 
                                        indirectly, the commercial risk 
                                        of 1 or more entities within 
                                        the same commercial enterprise 
                                        as the entity; or
                                            ``(bb) of the making of 
                                        loans to 1 or more entities 
                                        within the same commercial 
                                        enterprise as the entity.''; 
                                        and
            (2) by adding at the end the following:
                            ``(iv) Same commercial enterprise.--For 
                        purposes of clause (iii)(III), an entity shall 
                        be considered to be within the same commercial 
                        enterprise as another entity if--
                                    ``(I) 1 of the entities owns, 
                                directly or indirectly, at least a 
                                majority ownership interest in the 
                                other entity and reports its financial 
                                statements on a consolidated basis and 
                                the consolidated financial statements 
                                include the financial results of both 
                                entities; or
                                    ``(II) a third party owns at least 
                                a majority ownership interest in both 
                                entities and reports its financial 
                                statements on a consolidated basis and 
                                the financial statements of the third 
                                party include the financial results of 
                                both entities.
                            ``(v) Predominantly engaged.--
                                    ``(I) In general.--Not later than 
                                90 days after the date of enactment of 
                                this clause, the Commission shall 
                                promulgate regulations defining the 
                                term `predominantly engaged' for 
                                purposes of clause (i)(VIII).
                                    ``(II) Minimum revenues.--The 
                                regulations shall provide that an 
                                entity shall not be considered to be 
                                predominantly engaged in activities 
                                that are in the business of banking or 
                                financial in nature if the consolidated 
                                revenues of the entity derived from the 
                                activities constitute less than a 
                                percentage (as specified by the 
                                Commission in the regulations) of the 
                                total consolidated revenues of the 
                                entity.
                                    ``(III) Revenues from banking or 
                                financial activities.--In determining 
                                the percentage of the revenues of an 
                                entity that are derived from activities 
                                that are in the business of banking or 
                                financial in nature, the regulations 
                                shall exclude all revenues that are or 
                                result from foreign exchange or 
                                derivatives transactions used to hedge 
                                or mitigate commercial risk (as defined 
                                by the Commission in the 
                                regulations).''.

SEC. 3. REPORTING OF ILLIQUID SWAPS SO AS TO NOT DISADVANTAGE CERTAIN 
              NON-FINANCIAL END USERS.

    Section 2(a)(13) of the Commodity Exchange Act (7 U.S.C. 2(a)(13)) 
is amended--
            (1) in subparagraph (C), by striking ``The Commission'' and 
        inserting ``Except as provided in subparagraph (D), the 
        Commission'';
            (2) by redesignating subparagraphs (D) through (G) as 
        subparagraphs (E) through (H), respectively; and
            (3) by inserting after subparagraph (C) the following:
                    ``(D) Requirements for swap transactions in 
                illiquid markets.--
                            ``(i) Definition of illiquid markets.--In 
                        this subparagraph, the term `illiquid markets' 
                        means any market in which the volume and 
                        frequency of trading in swaps is at such a 
                        level as to allow identification of individual 
                        market participants.
                            ``(ii) Requirements.--Notwithstanding 
                        subparagraph (C), the Commission shall--
                                    ``(I) provide by rule for the 
                                public reporting of swap transactions, 
                                including price and volume data, in 
                                illiquid markets that are not cleared 
                                and entered into by a nonfinancial 
                                entity that is hedging or mitigating 
                                commercial risk in accordance with 
                                subsection (h)(7)(A); and
                                    ``(II) ensure that the swap 
                                transaction information described in 
                                subclause (I) is available to the 
                                public not sooner than 30 days after 
                                the swap transaction has been executed 
                                or at such later date as the Commission 
                                determines appropriate to protect the 
                                identity of participants and positions 
                                in illiquid markets and to prevent the 
                                elimination or reduction of market 
                                liquidity.''.

SEC. 4. TREATMENT OF AFFILIATES.

    Section 2(h)(7)(D)(i) of the Commodity Exchange Act (7 U.S.C. 
2(h)(7)(D)(i)) is amended--
            (1) by striking ``An affiliate'' and inserting ``A person 
        that is a financial entity and is an affiliate'';
            (2) by striking ``(including affiliate entities 
        predominantly engaged in providing financing for the purchase 
        of the merchandise or manufactured goods of the person)''; and
            (3) by striking ``and as an agent''.

SEC. 5. APPLICABILITY TO BONA FIDE HEDGE TRANSACTIONS OR POSITIONS.

    Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 6a(c)) is 
amended--
            (1) in the second sentence of paragraph (1), by striking 
        ``into the future for which'' and inserting ``in the future, to 
        be determined by the Commission, for which either an 
        appropriate swap is available or''; and
            (2) in paragraph (2)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``subsection (a)(2)'' and all that follows 
                through ``position that--'' and inserting ``paragraphs 
                (2) and (5) of subsection (a) for swaps, contracts of 
                sale for future delivery, or options on the contracts 
                or commodities, a bona fide hedging transaction or 
                position is a transaction or position that--''; and
                    (B) in subparagraph (A)(ii), by striking ``of 
                risks'' and inserting ``or management of current or 
                anticipated risks''; and
            (3) by adding at the end the following:
            ``(3) Commission definition.--The Commission may further 
        define, by rule or regulation, what constitutes a bona fide 
        hedging transaction or position so long as the rule or 
        regulation is consistent with the requirements of subparagraphs 
        (A) and (B) of paragraph (2).''.

SEC. 6. REPORTING AND RECORDKEEPING.

    Section 4g(f) of the Commodity Exchange Act (7 U.S.C. 6g(f)) is 
amended--
            (1) by striking ``(f) Nothing contained in this section'' 
        and inserting the following:
    ``(f) Authority of Commission To Make Separate Determinations 
Unimpaired.--
            ``(1) In general.--Except as provided in paragraph (2), 
        nothing in this section''; and
            (2) by adding at the end the following:
            ``(2) Exception.--If the Commission imposes any requirement 
        under this section on any person that is not registered, or 
        required to be registered, with the Commission in any capacity, 
        that person shall satisfy the requirements of any rule, order, 
        or regulation under this section by maintaining a written 
        record of each cash or forward transaction related to a 
        reportable or hedging commodity interest transaction, futures 
        contract, option on a futures contract, or swap.
            ``(3) Sufficiency.--A written record described in paragraph 
        (2) shall be sufficient if the written record--
                    ``(A) memorializes the final agreement between the 
                parties, including the material economic terms of the 
                transaction; and
                    ``(B) is identifiable and searchable by 
                transaction.''.

SEC. 7. MARGIN REQUIREMENTS.

    (a) Commodity Exchange Act Amendment.--Section 4s(e) of the 
Commodity Exchange Act (7 U.S.C. 6s(e)) is amended by adding at the end 
the following:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), including 
        the initial and variation margin requirements imposed by rules 
        adopted pursuant to paragraphs (2)(A)(ii) and (2)(B)(ii), shall 
        not apply to a swap in which a counterparty qualifies for an 
        exception under section 2(h)(7)(A) or 2(h)(7)(D), or an 
        exemption issued under section 4(c)(1) from the requirements of 
        section 2(h)(1)(A) for cooperative entities as defined in that 
        exemption.''.
    (b) Securities Exchange Act Amendment.--Section 15F(e) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)) is amended by 
adding at the end the following:
            ``(4) Applicability with respect to counterparties.--The 
        requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall not 
        apply to a security-based swap in which a counterparty 
        qualifies for an exception under section 3C(g)(1) or satisfies 
        the criteria in section 3C(g)(4).''.
    (c) Implementation.--The amendments made by this section to the 
Commodity Exchange Act (7 U.S.C. 1 et seq.) shall be implemented--
            (1) without regard to--
                    (A) chapter 35 of title 44, United States Code; and
                    (B) the notice and comment provisions of section 
                553 of title 5, United States Code;
            (2) through the promulgation of an interim final rule, 
        pursuant to which public comment is sought before a final rule 
        is issued; and
            (3) such that paragraph (1) shall apply solely to changes 
        to rules and regulations, or proposed rules and regulations, 
        that are limited to and directly a consequence of the 
        amendments.

SEC. 8. ANALYSIS BY THE COMMODITY FUTURES TRADING COMMISSION OF THE 
              COSTS AND BENEFITS OF REGULATIONS AND ORDERS.

    Section 15(a) of the Commodity Exchange Act (7 U.S.C. 19(a)) is 
amended by striking paragraphs (1) and (2) and inserting the following:
            ``(1) In general.--Before promulgating a regulation under 
        this Act or issuing an order (except as provided in paragraph 
        (3)), the Commission, acting through the Office of the Chief 
        Economist, shall--
                    ``(A) state a justification for the regulation or 
                order;
                    ``(B) state the baseline for the cost-benefit 
                analysis and explain how the regulation or order 
                measures costs against the baseline;
                    ``(C) assess the costs and benefits, both 
                qualitative and quantitative, of the intended 
                regulation or order;
                    ``(D) measure, and seek to improve, the actual 
                results of regulatory requirements; and
                    ``(E) propose or adopt a regulation or order only 
                on a reasoned determination that the benefits of the 
                intended regulation or order justify the costs of the 
                intended regulation or order (recognizing that some 
                benefits and costs are difficult to quantify).
            ``(2) Considerations.--In making a reasoned determination 
        of costs and benefits under paragraph (1), the Commission shall 
        consider--
                    ``(A) the protection of market participants and the 
                public;
                    ``(B) the efficiency, competitiveness, and 
                financial integrity of futures and swaps markets;
                    ``(C) the impact on market liquidity in the futures 
                and swaps markets;
                    ``(D) price discovery;
                    ``(E) sound risk management practices;
                    ``(F) the cost of available alternatives to direct 
                regulation;
                    ``(G) the degree and nature of the risks posed by 
                various activities within the scope of the jurisdiction 
                of the Commission;
                    ``(H) whether, consistent with obtaining regulatory 
                objectives, the regulation or order is tailored to 
                impose the least burden on society, including market 
                participants, individuals, businesses of differing 
                sizes, and other entities (including small communities 
                and governmental entities), taking into account, to the 
                extent practicable, the cumulative costs of regulations 
                and orders;
                    ``(I) whether the regulation or order is 
                inconsistent, incompatible, or duplicative of other 
                Federal regulations and orders; and
                    ``(J) whether, in choosing among alternative 
                regulatory approaches, those approaches maximize net 
                benefits (including potential economic, environmental, 
                and other benefits, distributive impacts, and 
                equity).''.
Example Output: End-User Protection Act of 2014 - Amends the Commodity Exchange Act with respect to exceptions to the requirement that any swap be cleared by a derivatives clearing organization either registered under that Act, or exempted from registration, if the swap is required to be cleared. Revises the definition of a financial entity subject to such requirement to exclude one that: (1) is a commercial market participant predominantly engaged in activities in the business of banking, or in activities that are financial in nature, but is not supervised by a prudential regulator; or (2) is considered as predominantly engaged in activities in the business of banking or in financial activities because it regularly enters into foreign exchange or derivatives transactions on behalf of, or to hedge or mitigate the commercial risk of, one or more other entities within the entity's same commercial enterprise, or because of making loans to one or more of such other entities. Directs the Commodity Futures Trading Commission (CFTC) to provide by rule for the public reporting of swap transactions, including price and volume data, in illiquid markets that are not cleared and entered into by a nonfinancial entity that is hedging or mitigating commercial risk. Defines &quot;illiquid&quot; as any market in which the volume and frequency of trading in swaps is at such a level as to allow identification of individual market participants. Requires the CFTC to ensure that such swap transaction information is not available to the public until 30 days after the transaction has been executed, or at an appropriate later date, in order to: (1) protect the identity of participants and positions in illiquid markets, and (2) prevent the elimination or reduction of market liquidity. Accords financial entities exempt from swap-clearing requirements the same treatment as exempted affiliates. Revises the exemption of bona fide hedge transactions or positions from certain trading limitations to set criteria for CFTC rules or regulations treating swaps, contracts of sale for future delivery, or options on the contracts or commodities as bona fide hedge transactions or positions also exempt from those limitations. Declares that, if the CFTC imposes any reporting and recordkeeping requirement on any person that is not registered, or required to be registered, with the CFTC, that person shall satisfy the requirements of any pertinent rule, order, or regulation by maintaining a written record of each cash or forward transaction related to a reportable or hedging commodity interest transaction, futures contract, option on a futures contract, or swap. Makes such a written record sufficient if it: (1) memorializes the final agreement between the parties, including the transaction's material economic terms; and (2) is identifiable and searchable by transaction. States that certain requirements for adoption of rules governing capital and margin requirements for swap dealers and major swap participants, including the initial and variation margin requirements imposed by rules adopted according to such requirements, shall not apply to a swap in which a counterparty qualifies for specified exceptions or exemptions. Revises requirements for a CFTC cost-benefit analysis made before an order is issued. Requires the CFTC, acting through the Office of the Chief Economist, among other things to:  state a justification for the regulation or order; state the baseline for the cost-benefit analysis and explain how the regulation or order measures costs against the baseline; assess the costs and benefits, both qualitative and quantitative, of the intended regulation or order; measure, and seek to improve, the actual results of regulatory requirements; and propose or adopt a regulation or order only on a reasoned determination that the benefits of the intended regulation or order justify its costs. 

Example Input: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capital Gains Reform Act of 1997''.

SEC. 2. 70-PERCENT CAPITAL GAINS DEDUCTION FOR TAXPAYERS OTHER THAN 
              CORPORATIONS.

    (a) In General.--Section 1202 of the Internal Revenue Code of 1986 
is amended to read as follows:

``SEC. 1202. CAPITAL GAINS DEDUCTION.

    ``(a) General Rule.--If for any taxable year a taxpayer other than 
a corporation has a net capital gain, 70 percent of such gain shall be 
a deduction from gross income.
    ``(b) Estates and Trusts.--In the case of an estate or trust, the 
deduction shall be computed by excluding the portion (if any) of the 
gains for the taxable year from sales or exchanges of capital assets 
which, under sections 652 and 662 (relating to inclusions of amounts in 
gross income of beneficiaries of trusts), is includible by the income 
beneficiaries as gain derived from the sale or exchange of capital 
assets.
    ``(c) Coordination With Treatment of Capital Gain Under Limitation 
on Investment Interest.--For purposes of this section, the net capital 
gain for any taxable year shall be reduced (but not below zero) by the 
amount which the taxpayer takes into account as investment income under 
section 163(d)(4)(B)(iii).
    ``(d) Transitional Rule.--
            ``(1) In general.--In the case of a taxable year which 
        includes January 1 of the year following the date of enactment 
        of this section--
                    ``(A) the amount taken into account as the net 
                capital gain under subsection (a) shall not exceed the 
                net capital gain determined by only taking into account 
                gains and losses properly taken into account for the 
                portion of the taxable year on or after such January 1, 
                and
                    ``(B) the amount of the net capital gain taken into 
                account in applying section 1(h) for such year shall be 
                reduced by the amount taken into account under 
                subparagraph (A) for such year.
            ``(2) Special rules for pass-thru entities.--
                    ``(A) In general.--In applying paragraph (1) with 
                respect to any pass-thru entity, the determination of 
                when gains and losses are properly taken into account 
                shall be made at the entity level.
                    ``(B) Pass-thru entity defined.--For purposes of 
                subparagraph (A), the term `pass-thru entity' means--
                            ``(i) a regulated investment company,
                            ``(ii) a real estate investment trust,
                            ``(iii) an S corporation,
                            ``(iv) a partnership,
                            ``(v) an estate or trust, and
                            ``(vi) a common trust fund.''.
    (b) Deduction Allowable in Computing Adjusted Gross Income.--
Section 62(a) of the Internal Revenue Code of 1986 (defining adjusted 
gross income) is amended by inserting after paragraph (15) the 
following new paragraph:
            ``(16) Long-term capital gains.--The deduction allowed by 
        section 1202.''.
    (c) Conforming Amendments.--
            (1) Section 1 of the Internal Revenue Code of 1986 is 
        amended by striking subsection (h).
            (2) Section 170(e)(1) of such Code is amended by striking 
        ``the amount of gain'' in the material following subparagraph 
        (B)(ii) and inserting ``30 percent (100 percent in the case of 
        a corporation) of the amount of gain''.
            (3) Section 172(d)(2)(B) of such Code is amended to read as 
        follows:
                    ``(B) the deduction under section 1202 shall not be 
                allowed.''.
            (4) The last sentence of section 453A(c)(3) of such Code is 
        amended by striking all that follows ``long-term capital 
        gain,'' and inserting ``the maximum rate on net capital gain 
        under section 1201 or the deduction under section 1202 
        (whichever is appropriate) shall be taken into account.''.
            (5) Section 642(c)(4) of such Code is amended to read as 
        follows:
            ``(4) Adjustments.--To the extent that the amount otherwise 
        allowable as a deduction under this subsection consists of gain 
        from the sale or exchange of capital assets held for more than 
        1 year, proper adjustment shall be made for any deduction 
        allowable to the estate or trust under section 1202 (relating 
        to capital gains deduction). In the case of a trust, the 
        deduction allowed by this subsection shall be subject to 
        section 681 (relating to unrelated business income).''.
            (6) The last sentence of section 643(a)(3) of such Code is 
        amended to read as follows: ``The deduction under section 1202 
        (relating to capital gains deduction) shall not be taken into 
        account.''.
            (7) Section 643(a)(6)(C) of such Code is amended by 
        inserting ``(i)'' before ``there shall'' and by inserting 
        before the period ``, and (ii) the deduction under section 1202 
        (relating to capital gains deduction) shall not be taken into 
        account''.
            (8)(A) Section 904(b)(2) of such Code is amended by 
        striking subparagraph (A), by redesignating subparagraph (B) as 
        subparagraph (A), and by inserting after subparagraph (A) (as 
        so redesignated) the following:
                    ``(B) Other taxpayers.--In the case of a taxpayer 
                other than a corporation, taxable income from sources 
                outside the United States shall include gain from the 
                sale or exchange of capital assets only to the extent 
                of foreign source capital gain net income.''.
            (B) Section 904(b)(2)(A) of such Code, as so redesignated, 
        is amended--
                    (i) by striking all that precedes clause (i) and 
                inserting the following:
                    ``(A) Corporations.--In the case of a corporation--
                '', and
                    (ii) in clause (i), by striking ``in lieu of 
                applying subparagraph (A),''.
            (C) Section 904(b)(3) of such Code is amended by striking 
        subparagraphs (D) and (E) and inserting the following:
                    ``(D) Rate differential portion.--The rate 
                differential portion of foreign source net capital 
                gain, net capital gain, or the excess of net capital 
                gain from sources within the United States over net 
                capital gain, as the case may be, is the same 
                proportion of such amount as the excess of the highest 
rate of tax specified in section 11(b) over the alternative rate of tax 
under section 1201(a) bears to the highest rate of tax specified in 
section 11(b).''.
            (D) Section 593(b)(2)(D)(v) of such Code is amended--
                    (i) by striking ``if there is a capital gain rate 
                differential (as defined in section 904(b)(3)(D)) for 
                the taxable year,'', and
                    (ii) by striking ``section 904(b)(3)(E)'' and 
                inserting ``section 904(b)(3)(D)''.
            (9) Section 1044(d) of such Code is amended by striking the 
        last sentence.
            (10)(A) Section 1211(b)(2) of such Code is amended to read 
        as follows:
            ``(2) the sum of--
                    ``(A) the excess of the net short-term capital loss 
                over the net long-term capital gain, and
                    ``(B) one-half of the excess of the net long-term 
                capital loss over the net short-term capital gain.''.
            (B) So much of section 1212(b)(2) of such Code as precedes 
        subparagraph (B) thereof is amended to read as follows:
            ``(2) Special rules.--
                    ``(A) Adjustments.--
                            ``(i) For purposes of determining the 
                        excess referred to in paragraph (1)(A), there 
                        shall be treated as short-term capital gain in 
                        the taxable year an amount equal to the lesser 
                        of--
                                    ``(I) the amount allowed for the 
                                taxable year under paragraph (1) or (2) 
                                of section 1211(b), or
                                    ``(II) the adjusted taxable income 
                                for such taxable year.
                            ``(ii) For purposes of determining the 
                        excess referred to in paragraph (1)(B), there 
                        shall be treated as short-term capital gain in 
                        the taxable year an amount equal to the sum 
                        of--
                                    ``(I) the amount allowed for the 
                                taxable year under paragraph (1) or (2) 
                                of section 1211(b) or the adjusted 
                                taxable income for such taxable year, 
                                whichever is the least, plus
                                    ``(II) the excess of the amount 
                                described in subclause (I) over the net 
                                short-term capital loss (determined) 
                                without regard to this subsection) for 
                                such year.''.
            (C) Section 1212(b) of such Code is amended by adding at 
        the end of the following:
            ``(3) Transitional rule.--In the case of any amount which, 
        under this subsection and section 1211(b) (as in effect for 
        taxable year beginning before January 1, 1998), is treated as a 
        capital loss in the first taxable year beginning after December 
        31, 1997, paragraph (2) and section 1211(b) (as so in effect) 
        shall apply (and paragraph (2) and section 1211(b) as in effect 
        for taxable years beginning after December 31, 1997, shall not 
        apply) to the extent such amount exceeds the total of any 
        capital gain net income (determined without regard to this 
        subsection) for taxable years beginning after December 31, 
        1997.''.
            (11) Section 1402(i)(1) of such Code is amended by 
        inserting``, and the deduction provided by section 1202 shall 
        not apply'' before the period at the end thereof.
            (12) Section 1445(e) of such Code is amended--
                    (A) in paragraph (1), by striking ``35 percent (or, 
                to the extent provided in regulations, 28 percent)'' 
and inserting ``22 percent (or, to the extent provided in regulation, 
15.6 percent)'', and
                    (B) in paragraph (2), by striking ``35 percent'' 
                and inserting ``22 percent''.
            (13)(A) The second sentence of section 7518(g)(6)(A) of 
        such Code is amended--
                    (i) by striking ``during a taxable year to which 
                section 1(h) or 1201(a) applies'', and
                    (ii) by striking ``28 percent (34 percent'' and 
                inserting ``15.6 percent (22 percent''.
            (B) The second sentence of section 607(h)(6)(A) of the 
        Merchant Marine Act, 1936 is amended--
                    (i) by striking ``during a taxable year to which 
                section 1(h) or 1201(a) of such Code applies'', and
                    (ii) by striking ``28 percent (34 percent'' and 
                inserting ``15.6 percent (22 percent''.
            (14) The item relating to section 1202 in the table of 
        sections for part I of subchapter P of chapter 1 of such Code 
        is amended to read as follows:

                              ``Sec. 1202, Capital gains deduction.''.
    (d) Effective Dates.--
            (1) In general.--Except as otherwise provided in this 
        subsection, the amendments, made by this section apply to 
        taxable years ending after December 31 of the year which 
        includes the date of enactment of this Act.
            (2) Repeal of section 1(h).--The amendment made by 
        subsection (c)(1) applies to taxable years beginning on or 
        after January 1 of the year following the date of enactment of 
        this Act.
            (3) Contributions.--The amendment made by subsection (c)(2) 
        applies to contributions on or after January 1 of the year 
        following the date of enactment of this Act.
            (4) Use of long-term losses.--The amendments made by 
        subsection (c)(10) apply to taxable years beginning on or after 
        January 1 of the second year following the date of enactment of 
        this Act.
            (5) Withholding.--The amendments made by subsection (c)(12) 
        apply only to amounts paid on or after January 1 of the year 
        following the date of enactment of this Act.

SEC. 3. REDUCTION OF ALTERNATIVE CAPITAL GAIN TAX FOR CORPORATIONS.

    (a) In General.--Section 1201(a)(2) of the Internal Revenue Code of 
1986 (relating to alternative tax for corporations) is amended by 
striking ``35 percent'' and inserting ``22 percent''.
    (b) Transitional Rule.--Section 1201(b) of the Internal Revenue 
Code of 1986 is amended to read as follows:
    ``(b) Transitional Rule.--
            ``(1) In general.--In applying this section, net capital 
        gain for any taxable year shall not exceed the net capital gain 
        determined by taking into account only gains and losses 
        properly taken into account for the portion of the taxable year 
        on or after January 1 of the year following the date of 
        enactment of this subsection.
            ``(2) Special rule for pass-thru entities.--Section 
        1202(d)(2) shall apply for purposes of paragraph (1).''.
    (c) Conforming Amendment.--Section 852(b)(3)(D)(iii) of the 
Internal Revenue Code of 1986 is amended by striking ``65 percent'' and 
inserting ``78 percent''.
    (d) Effective Date.--The amendments made by this section apply to 
taxable years ending after December 31 of the year which includes the 
date of enactment of this Act.
Example Output:
Capital Gains Reform Act of 1997 - Amends the Internal Revenue Code to revise rules concerning capital gain for taxpayers other than corporations to establish a new general rule which provides that if for any taxable year a taxpayer other than a corporation has a capital gain, 70 percent of such gain shall be a deduction from gross income. 
Reduces the alternative capital gain tax for corporations.