TASK DEFINITION: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
PROBLEM: SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Zero Gravity, Zero Tax Act of 
2003''.

SEC. 2. EXCLUSION OF SPACE-RELATED INCOME FROM GROSS INCOME.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 (relating to items specifically excluded 
from gross income) is amended by redesignating section 140 as section 
140A and inserting after section 139 the following new section:

``SEC. 140. SPACE-RELATED INCOME.

    ``(a) General Rule.--Gross income shall not include space-related 
income.
    ``(b) Space-Related Income.--
            ``(1) In general.--For purposes of this section, the term 
        `space-related income' means--
                    ``(A) income derived from the sale by the taxpayer 
                to an unrelated person of--
                            ``(i) any product or article which is 
                        produced by the taxpayer in outer space, and
                            ``(ii) any service provided by the taxpayer 
                        in or from outer space,
                    ``(B) income of an individual attributable to 
                services performed in or from outer space by such 
                individual in a trade or business, and
                    ``(C) any amount not described in subparagraph (A) 
                or (B) which is interest, rent, royalty, or similar 
                amount received with respect to production or service 
                described in subparagraph (A) or (B).
            ``(2) Exception for telecommunications services, etc.--
        Paragraph (1)(A)(ii) shall not apply to--
                    ``(A) any telecommunications service provided from 
                earth orbit,
                    ``(B) any service provided by a weather or other 
                earth observation satellite, and
                    ``(C) any other service provided on or before the 
                date of the enactment of this section of transporting 
                property to or from outer space.
            ``(3) Exception for wages.--Paragraph (1) shall not apply 
        to wages (as defined in section 3401) received by any employee 
        of an employer.
            ``(4) Proportional allocation between space-based and 
        earth-based activities.--In the case of any product or article 
        which is produced partly in space, space-related income shall 
        be an amount which bears the same ratio to the amount of gross 
        income attributable to the sale of such product or article as 
        the expenses attributable to producing such product or article 
        in space bears to the total expenses incurred in producing such 
        product or article.
            ``(5) Produced.--For purposes of this section, the term 
        `produced' includes created, fabricated, developed, grown, 
        manufactured, extracted, processed, cured, and aged.
    ``(c) Exclusion From Tariffs, Etc.--Any product--
            ``(1) which is manufactured in outer space, and
            ``(2) which was--
                    ``(A) launched from, and returned to Earth, within 
                the United States, or
                    ``(B) Manufactured at a facility in outer space 
                which is owned by 1 or more United States persons, 
                shall be exempt from all Federal excises, imposts, and 
                duties and any other Federal tariffs.
    ``(d) Phaseout of Benefits.--In the case of a taxable year 
beginning after December 31, 2012, the amount excluded under subsection 
(a) shall be reduced (but not below zero) by x/10th's of the amount 
excludable without regard to this subsection, where `x' is the number 
of years such taxable year is after the last taxable year beginning 
before January 1, 2013. A similar rule shall apply to the benefits 
under subsection (c).''.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 of such Code is amended by striking the last 
item and inserting the following new items:

                              ``Sec. 140. Space-related income.
                              ``Sec. 140A. Cross references to other 
                                        Acts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SEC. 3. CREDIT FOR PURCHASE OF QUALIFIED SPACE COMPANY STOCK.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45G. SPACE COMPANY INVESTMENT CREDIT.

    ``(a) General Rule.--For purposes of section 38, the space company 
investment credit determined under this section for any taxable year is 
the amount paid in the taxable year for the purchase of qualified stock 
in a qualified space company.
    ``(b) Qualified Space Company.--For purposes of this section--
            ``(1) In general.--The term `qualified space company' means 
        a domestic C corporation if for the 3-taxable-year period 
        ending with the taxable year immediately preceding the taxable 
        year in which qualified stock is purchased--
                    ``(A) the average annual gross receipts of such 
                entity does not exceed $100,000,000, and
                    ``(B) more than 70 percent of such gross receipts 
                are derived from space-based business.
            ``(2) Space-based business.--The term `space-based 
        business' means a business whose gross receipts are 
        substantially space-related income, as defined in section 
        140(b).
            ``(3) Aggregation rules.--Rules similar to the rules of 
        section 1202(d)(3) shall apply.
    ``(c) Qualified Stock.--For purposes of this section--
            ``(1) In general.--Except as otherwise provided in this 
        section, the term `qualified stock' means any stock in a 
        domestic C corporation if--
                    ``(A) as of the date of issuance of such stock, 
                such corporation is a qualified space company, and
                    ``(B) except as provided in subsections (f) and 
                (h), such stock is acquired by the taxpayer at its 
                original issue (directly or through an underwriter)--
                            ``(i) in exchange for money or other 
                        property (not including stock), or
                            ``(ii) as compensation for services 
                        provided to such corporation (other than 
                        services performed as an underwriter of such 
                        stock).
            ``(2) Active business requirement.--Stock in a corporation 
        shall not be treated as qualified stock unless, during 
        substantially all of the taxpayer's holding period for such 
        stock--
                    ``(A) such corporation meets active business 
                requirements substantially similar to the requirements 
                of section 1202(e), determined on the basis that the 
                qualified trade or business is a space-based business, 
                and
                    ``(B) such corporation is a C corporation.
            ``(3) Certain purchase by corporation of its own stock.--
        Rules similar to the rules of section 1202(c)(3) shall apply.
    ``(e) Recapture.--If, during any taxable year ending with or within 
the 10-year period beginning on the date qualified stock was purchased 
by the taxpayer, the issuer of such stock ceases to a qualified space 
company, the tax under this chapter for such taxable year shall be 
increased by the aggregate decrease in the credits allowed under 
section 38 for all prior taxable years which would have resulted solely 
from reducing to zero any credit determined under subsection (a) with 
respect to such stock.
    ``(f) Termination.--This section shall not apply to stock acquired 
after December 31, 2011.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of such Code (defining current year business credit) is amended 
by striking ``plus'' at the end of paragraph (14), by striking the 
period at the end of paragraph (15) and inserting ``, plus'', and by 
adding at the end the following new paragraph:
            ``(16) space company investment credit determined under 
        section 45G(a).''.
    (c) Conforming Amendments.--
            (1) Section 39(d) of such Code is amended by adding at the 
        end the following new paragraph:
            ``(11) No carryback of space company investment credit 
        before january 1, 2004.--No portion of the unused business 
        credit for any taxable year which is attributable to the space 
        company investment credit determined under section 45G may be 
        carried back to a taxable year beginning before January 1, 
        2004.''.
            (2) Subsection (c) of section 196 of such Code is amended 
        by striking ``and'' at the end of paragraph (9), by striking 
        the period at the end of paragraph (10) and inserting ``, 
        and'', and by adding at the end the following new paragraph:
            ``(11) the space company investment credit determined under 
        section 45G(a).''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 45G. Space Company Investment 
                                        Credit.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to costs paid or incurred in taxable years beginning after 
December 31, 2003.

SEC. 4. CAPITAL GAINS EXCLUSION.

    (a) In General.--(1) Part I of subchapter P of the Internal Revenue 
Code of 1986 (relating to treatment of capital gains) is amended by 
adding at the end the following new section:

``SEC. 1203. EXCLUSION FOR GAINS FROM SALE OR EXCHANGE OF STOCK OF 
              QUALIFIED SPACE CORPORATIONS.

    ``(a) In General.--Gross income shall not include gain on the sale 
or exchange of any stock of a qualified space corporation.
    ``(b) Qualified Space Corporation.--For purposes of subsection (a), 
the term `qualified space corporation' means, with respect to any 
taxable year, a domestic corporation which is a C corporation if--
            ``(1) such corporation is organized exclusively for 
        providing to unrelated persons--
                    ``(A) any product or article which is produced 
                (within the meaning of section 140(b)(5)) by the 
                corporation in outer space, or
                    ``(B) any service provided by the corporation in or 
                from outer space, and
            ``(2) At least 90 percent of the expenses of such 
        corporation are attributable to the active conduct of a trade 
        or business of providing a product, article, or service 
        described in paragraph (1).
Such term shall not include a corporation providing a service, product, 
or article described in section 140(b)(2).''.
    (2) Clerical Amendment.--The table of sections for part I of 
subchapter P of such Code is amended by adding at the end the following 
new item:

                              ``Sec. 1203. Exclusion for gains from 
                                        sale or exchange of stock of 
                                        qualified space 
                                        corporations.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.

SOLUTION: Zero Gravity, Zero Tax Act of 2003 - Amends the Internal Revenue Code to exclude from gross income: (1) space-related income; and (2) gain on the sale or exchange of any stock of a qualified space corporation.Establishes a space company investment credit for the purchase of qualified stock in a qualified space company.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Workforce Improvement and 
Jobs Protection Act''.

SEC. 2. EXEMPTING ALIENS EARNING MASTER'S OR HIGHER DEGREE IN UNITED 
              STATES FROM NUMERICAL LIMITATIONS ON H-1B NONIMMIGRANTS.

    Section 214(g) of the Immigration and Nationality Act (8 U.S.C. 
1184(g)) is amended by adding at the end the following:
    ``(9) For any fiscal year, the applicable numerical limitation 
contained in paragraph (1)(A) shall not apply to any nonimmigrant alien 
issued a visa or otherwise provided status under section 
101(a)(15)(H)(i)(b) who has earned a master's or higher degree from an 
institution of higher education (as defined in section 101(a) of the 
Higher Education Act of 1965 (20 U.S.C. 1001(a))), until the number of 
aliens who are exempted from such numerical limitation during such year 
exceeds 20,000.''.

SEC. 3. MAKING PERMANENT CERTAIN REQUIREMENTS AND AUTHORITIES WITH 
              RESPECT TO H-1B NONIMMIGRANTS.

    (a) Attestation Requirements.--Section 212(n)(1)(E)(ii) of the 
Immigration and Nationality Act (8 U.S.C. 1182(n)(1)(E)(ii)) is amended 
by striking ``subparagraph, and before October 1, 2003,'' and inserting 
``subparagraph''.
    (b) Fee.--Section 214(c)(9)(A) of the Immigration and Nationality 
Act (8 U.S.C. 1184(c)(9)(A)) is amended by striking ``before October 1, 
2003''.
    (c) Department of Labor Investigative Authorities.--Section 
413(e)(2) of the American Competitiveness and Workforce Improvement Act 
of 1998 (8 U.S.C. 1182 note) is repealed.
    (d) Effective Dates.--
            (1) Attestation requirements.--The amendment made by 
        subsection (a) shall apply to applications under section 
        212(n)(1) of the Immigration and Nationality Act filed on or 
        after the date that is 30 days after the date of the enactment 
        of this Act.
            (2) Fee.--The amendment made by subsection (b) shall apply 
        to petitions under section 214(c) of the Immigration and 
        Nationality Act filed on or after the date that is 30 days 
        after the date of the enactment of this Act.
            (3) Department of labor investigative authority.--The 
        amendment made by subsection (c) shall take effect on the date 
        of the enactment of this Act.

SEC. 4. FRAUD PREVENTION AND DETECTION FEE.

    (a) Imposition of Fee.--Section 214(c) of the Immigration and 
Nationality Act (8 U.S.C. 1184(c)) is amended by adding at the end the 
following:
    ``(12)(A) In addition to any other fees authorized by law, the 
Secretary of Homeland Security shall impose a fraud prevention and 
detection fee on an employer filing a petition under paragraph (1)--
            ``(i) initially to grant an alien nonimmigrant status 
        described in subparagraph (H)(i)(b) or (L) of section 
        101(a)(15); or
            ``(ii) to obtain authorization for an alien having such 
        status to change employers.
    ``(B) In addition to any other fees authorized by law, the 
Secretary of State shall impose a fraud prevention and detection fee on 
an alien filing an application abroad for a visa authorizing admission 
to the United States as a nonimmigrant described in section 
101(a)(15)(L), if the alien is covered under a blanket petition 
described in paragraph (2)(A).
    ``(C) The amount of the fee imposed under subparagraph (A) or (B) 
shall be $500.
    ``(D) The fee imposed under subparagraph (A) or (B) shall only 
apply to principal aliens and not to the spouses or children who are 
accompanying or following to join such principal aliens.
    ``(E) Fees collected under this paragraph shall be deposited in the 
Treasury in accordance with section 286(v).''.
    (b) Establishment of Account; Use of Fees.--Section 286 of the 
Immigration and Nationality Act (8 U.S.C. 1356) is amended by adding at 
the end the following:
    ``(v) H-1B and L Fraud Prevention and Detection Account.--
            ``(1) In general.--There is established in the general fund 
        of the Treasury a separate account, which shall be known as the 
        `H-1B and L Fraud Prevention and Detection Account'. 
        Notwithstanding any other provision of law, there shall be 
        deposited as offsetting receipts into the account all fees 
        collected under section 214(c)(12).
            ``(2) Use of fees to combat fraud.--
                    ``(A) Secretary of state.--One-third of the amounts 
                deposited into the H-1B and L Fraud Prevention and 
                Detection Account shall remain available to the 
                Secretary of State until expended for programs and 
                activities at United States embassies and consulates 
                abroad--
                            ``(i) to increase the number diplomatic 
                        security personnel assigned exclusively to the 
                        function of preventing and detecting fraud by 
                        applicants for visas described in subparagraph 
                        (H)(i) or (L) of section 101(a)(15);
                            ``(ii) otherwise to prevent and detect such 
                        fraud pursuant to the terms of a memorandum of 
                        understanding or other cooperative agreement 
                        between the Secretary of State and the 
                        Secretary of Homeland Security; and
                            ``(iii) upon request by the Secretary of 
                        Homeland Security, to assist such Secretary in 
                        carrying out the fraud prevention and detection 
                        programs and activities described in 
                        subparagraph (B).
                    ``(B) Secretary of homeland security.--One-third of 
                the amounts deposited into the H-1B and L Fraud 
                Prevention and Detection Account shall remain available 
                to the Secretary of Homeland Security until expended 
                for programs and activities to prevent and detect fraud 
                with respect to petitions under paragraph (1) or (2)(A) 
                of section 214(c) to grant an alien nonimmigrant status 
                described in subparagraph (H)(i) or (L) of section 
                101(a)(15).
                    ``(C) Secretary of labor.--One-third of the amounts 
                deposited into the H-1B and L Fraud Prevention and 
                Detection Account shall remain available to the 
                Secretary of Labor until expended for enforcement 
                programs and activities described in section 212(n).
                    ``(D) Consultation.--The Secretary of State, the 
                Secretary of Homeland Security, and the Secretary of 
                Labor shall consult one another with respect to the use 
                of the funds in the H-1B and L Fraud Prevention and 
                Detection Account.''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act, and the fees imposed 
under such amendments shall apply to petitions under section 214(c) of 
the Immigration and Nationality Act, and applications for nonimmigrant 
visas under section 222 of such Act, filed on or after the date that is 
90 days after the date of the enactment of this Act.

SEC. 5. ENSURING INTEGRITY OF VISAS FOR INTRACOMPANY TRANSFEREES.

    (a) Nonimmigrant L-1 Visa Category.--
            (1) In general.--Section 214(c)(2) of the Immigration and 
        Nationality Act (8 U.S.C. 1184(c)(2)) is amended by adding at 
        the end the following:
    ``(F) An alien who will serve in a capacity involving specialized 
knowledge with respect to an employer for purposes of section 
101(a)(15)(L) and will be stationed primarily at the worksite of an 
employer other than the petitioning employer or its affiliate, 
subsidiary, or parent shall not be eligible for classification under 
section 101(a)(15)(L) if--
            ``(i) the alien will be controlled and supervised 
        principally by such unaffiliated employer; or
            ``(ii) the placement of the alien at the worksite of the 
        unaffiliated employer is part of an arrangement merely to 
        provide labor for the unaffiliated employer rather than in 
        connection with the provision of a product or service for which 
        specialized knowledge specific to the petitioning employer is 
        necessary.''.
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply to petitions filed on or after the effective date 
        of this section, whether for initial, extended, or amended 
        classification.
    (b) Requirement for Prior Continuous Employment for Certain 
Intracompany Transferees.--
            (1) In general.--Section 214(c)(2)(A) of the Immigration 
        and Nationality Act (8 U.S.C. 1184(c)(2)(A)) is amended by 
        striking the last sentence (relating to reduction of the 1-year 
        period of continuous employment abroad to 6 months).
            (2) Applicability.--The amendment made by paragraph (1) 
        shall apply only to petitions for initial classification filed 
        on or after the effective date of this section.
    (c) Maintenance of Statistics.--
            (1) In general.--The Secretary of Homeland Security shall 
        maintain statistics regarding petitions filed, approved, 
        extended, and amended with respect to nonimmigrants described 
        in section 101(a)(15)(L) of the Immigration and Nationality Act 
        (8 U.S.C. 1101(a)(15)(L)), including the number of such 
        nonimmigrants who are classified on the basis of specialized 
        knowledge and the number of nonimmigrants who are classified on 
        the basis of specialized knowledge in order to work primarily 
        at offsite locations.
            (2) Applicability.--Paragraph (1) shall apply to petitions 
        filed on or after the effective date of this section.
    (d) Effective Date.--This section and the amendments made by this 
section shall take effect 180 days after the date of the enactment of 
this Act.

SOLUTION: American Workforce Improvement and Jobs Protection Act - Amends the Immigration and Nationality Act to exempt up to 20,000 aliens holding a master's or higher degree from the numerical limitation on H-1B (temporary employment in a specialty occupation) nonimmigrants in any fiscal year.

Makes permanent: (1) the attestation requirement concerning nondisplacement of U.S. workers applicable to H-1B-dependent employers and willful violators; (2) the filing fee applicable to H-1B petitioners; and (3) the Secretary of Labor's authority under the American Competitiveness and Workforce Improvement Act to investigate an employer's alleged failure to meet specified labor attestation conditions (by repealing a sunset provision in that Act).

Requires the Secretary of Homeland Security to impose a fraud prevention and detection fee on H-1B or L (intracompany business personnel) petitioners for use in combating fraud and carrying out labor attestation enforcement activities. Establishes an H-1B and L Fraud Prevention and Detection Account for the deposit of such fees.

Renders ineligible for L visa status those aliens who will serve in a capacity involving specialized knowledge at the worksite of an employer other than the petitioning employer or its affiliate if: (1) the alien will be controlled principally by the unaffiliated employer; or (2) the placement with the unaffiliated employer is part of an arrangement merely to provide labor rather than to use the alien's specialized knowledge.

Eliminates the current reduction in the continuous employment requirement for aliens seeking L visa status pursuant to an employer's blanket petition.

Requires the Secretary of Homeland Security to maintain statistics regarding L visa petitions.

PROBLEM: SECTION 1. CAPITAL GAINS DEDUCTION.

    (a) General Rule.--Part I of subchapter P of chapter 1 of the 
Internal Revenue Code of 1986 (relating to treatment of capital gains) 
is amended to read as follows:

                  ``PART I--TREATMENT OF CAPITAL GAINS

                              ``Sec. 1201. Capital gains deduction.

``SEC. 1201. CAPITAL GAINS DEDUCTION.

    ``(a) General Rule.--If for any taxable year a taxpayer has a net 
capital gain, 30 percent of such gain shall be a deduction from gross 
income.
    ``(b) Estate 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) Transitional Rule.--In the case of a taxable year in which 
the date of the enactment of this sentence occurs, 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 after such date of enactment.''
    (b) Deduction Allowable in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by inserting after 
paragraph (13) the following new paragraph:
            ``(14) Long-term capital gains.--The deduction allowed by 
        section 1201.''
    (c) Technical and Conforming Changes.--
            (1) Section 1 of such Code is amended by striking 
        subsection (j).
            (2) Paragraph (1) of section 170(e) of such Code is amended 
        by striking ``the amount of gain'' in the material following 
        subparagraph (B)(ii) and inserting ``50 percent of the amount 
        of gain''.
            (3)(A) Paragraph (2) of section 172(d) of such Code is 
        amended to read as follows:
            ``(2) Capital gains and losses.--
                    ``(A) Losses of taxpayers other than 
                corporations.--In the case of a taxpayer other than a 
                corporation, the amount deductible on account of losses 
                from sales or exchanges of capital assets shall not 
                exceed the amount includible on account of gains from 
                sales or exchanges of capital assets.
                    ``(B) Deduction under section 1201.--The deduction 
                under section 1201 shall not be allowed.''
            (B) Subparagraph (B) of section 172(d)(4) of such Code is 
        amended by striking ``paragraphs (1) and (3)'' and inserting 
        ``paragraphs (1), (2)(B), and (3)''.
            (4) Paragraph (4) of section 642(c) 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 1201 (relating 
        to deduction for excess of capital gains over capital losses). 
        In the case of a trust, the deduction allowed by this 
        subsection shall be subject to section 681 (relating to 
        unrelated business income).''
            (5) Paragraph (3) of section 643(a) of such Code is amended 
        by adding at the end thereof the following new sentence: ``The 
        deduction under section 1201 (relating to deduction of excess 
        of capital gains over capital losses) shall not be taken into 
        account.''
            (6) Paragraph (4) of section 691(c) of such Code is amended 
        by striking ``sections 1(j), 1201, and 1211'' and inserting 
        ``sections 1201 and 1211''.
            (7) The second sentence of section 871(a)(2) of such Code 
        is amended by inserting ``such gains and losses shall be 
        determined without regard to section 1201 (relating to 
        deduction for capital gains) and'' after ``except that''.
            (8)(A) Subsection (b) of section 1211 of such Code is 
        amended by striking ``the lower of'' and all that follows down 
        through the period at the end thereof and inserting ``whichever 
        of the following is the smallest--
            ``(1) $3,000 ($1,500 in the case of a married individual 
        filing a separate return),
            ``(2) the excess of such losses over such gains, or
            ``(3) 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 paragraph (2) of section 1212(b) 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), (2), 
                                or (3) 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 lesser 
                        of--
                                    ``(I) the sum of the amount allowed 
                                for the taxable year under paragraph 
                                (1), (2), or (3) of section 1211(b), 
                                and the excess of the amount so allowed 
                                over the net short-term capital loss 
                                (determined without regard to this 
                                subsection) for such year, or
                                    ``(II) the adjusted taxable income 
                                for such taxable year.''
            (C) Clause (i) of section 1211(b)(2)(B) of such Code is 
        amended by striking ``paragraph (1) or (2)'' and inserting 
        ``paragraph (1), (2), or (3)''.
            (D) In the case of a taxable year in which the date of the 
        enactment of this Act occurs, proper adjustments in the 
        application of the provisions amended by this paragraph shall 
        be made to take into account the provisions of section 1201(c) 
        of such Code (as amended by subsection (a)).
            (9) Paragraph (1) of section 1402(i) of such Code is 
        amended by inserting ``, and the deduction provided by section 
        1201 shall not apply'' before the period at the end thereof.
            (10) Section 12 of such Code is amended by striking 
        paragraph (4) and redesignating the following paragraphs 
        accordingly.
            (11) Paragraph (2) of section 527(b) of such Code is hereby 
        repealed.
            (12) Paragraph (2) of section 801(a) of such Code is hereby 
        repealed.
            (13) Subsection (c) of section 831(c) of such Code is 
        amended by striking paragraph (1) and redesignating the 
        following paragraphs accordingly.
            (14)(A) Subparagraph (A) of section 852(b)(3) of such Code 
        is amended by striking ``, determined as provided in section 
        1201(a), on'' and inserting ``of 17 percent of''.
            (B) Clause (iii) of section 852(b)(3)(D) of such Code is 
        amended--
                    (i) by striking ``66 percent'' and inserting ``83 
                percent'', and
                    (ii) by striking ``section 1201(a)'' and inserting 
                ``subparagraph (A)''.
            (15) Clause (ii) of section 857(b)(3)(A) of such Code is 
        amended by striking ``determined at the rate provided in 
        section 1201(a) on'' and inserting ``of 17 percent of''.
            (16) Paragraph (1) of section 882(a) of such Code is 
        amended by striking ``section 11, 55, or 1201(a)'' and 
        inserting ``section 11 or 55''.
            (17) Subsection (b) of section 904 of such Code is amended 
        by striking paragraphs (2)(B), (3)(B), (3)(D), and (3)(E).
            (18) Subsection (b) of section 1374 of such Code is amended 
        by striking paragraph (4).
            (19) Subsection (b) of section 1381 is amended by striking 
        ``or 1201''.
            (20) Clause (i) of section 6425(c)(1)(A) of such Code is 
        amended by striking ``or 1201(a)''.
            (21) Clause (i) of section 6655(g)(1)(A) of such Code is 
        amended by striking ``or 1201(a)''.
            (22)(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(j) or 1201(a) applies'', and
                    (ii) by striking ``28 percent (34 percent'' and 
                inserting ``14 percent (17 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(j) or 1201(a) of such Code applies'', and
                    (ii) by striking ``28 percent (34 percent'' and 
                inserting ``14 percent (17 percent''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after the date of the enactment of this 
Act; except that the amendment made by subsection (c)(2) shall apply 
only to contributions after such date of enactment.

SOLUTION:
Amends the Internal Revenue Code to allow a 30 percent income tax deduction for the net capital gain of both corporate and noncorporate taxpayers.