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 ``Humanitarian Exports Leading to 
Peace Act of 2001''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The Iraqi people suffered under a decade of war and 
        continue to suffer under a repressive regime and the most 
        comprehensive economic sanctions ever imposed on any country.
            (2) The economic sanctions have caused extraordinary 
        hardship on the people of Iraq and failed to weaken the 
        leadership of Iraq, and have undermined the institutions of 
        civil society which are necessary for democratic political 
        life.
            (3) The investigative panel established by the United 
        Nations Security Council and other independent bodies have 
        confirmed that the United Nations Oil-for-Food program has 
        failed to adequately meet the needs of the Iraqi people.
            (4) According to the United States Department of 
        Agriculture, Iraq represents a potential market for nearly 
        $1,000,000,000 in agricultural products from the United States.
            (5) The sanctions regime continues to harm the Iraqi 
        population for the crimes of its leaders and has not served 
        either the goal of the United States of punishing Iraq's 
        leaders or disarming weapons of mass destruction.
            (6) Rigorous weapons inspections and adequate provision for 
        civilian needs in Iraq are not mutually exclusive.
            (7) The devastating effect of the economic sanctions on 
        Iraq has been reported by numerous international and 
        independent bodies, including the following:
                    (A) The Center for Economic and Social Rights of 
                the United Nations documented dramatic increases in 
                malnutrition and disease, leading to the deaths of 
                hundreds of thousands of children under the age of 5 
                since 1991.
                    (B) UNICEF reported in 1995 that ``no significant 
                movement towards food security can be achieved so long 
                as the embargo remains in place''. Further, despite the 
                Oil-for-Food Program, UNICEF reported in July 1999 
                survey findings that ``Both the infant mortality rate 
                and the under-five mortality rate consistently show a 
                major increase in mortality over the 10 years preceding 
                the survey. More specifically, the results show that 
                the infant mortality rate has increased from 47 deaths 
                per 1,000 live births for the period 1984-89, to 108 
                deaths per 1,000 live births for the period 1994-99.''.
                    (C) A report authorized by the United National 
                Security Council on March 30, 1999, found that ``the 
                gravity of the humanitarian situation of the Iraqi 
                people is indisputable and cannot be overstated.''. 
                Further, it emphasized that ``Even if not all suffering 
                in Iraq can be imputed to external factors, especially 
                sanctions, the Iraqi people would not be undergoing 
                such deprivations in the absence of the prolonged 
                measures imposed by the Security Council and the 
                effects of the war''.
                    (D) UNICEF and the World Food Program found in 1997 
                that ``One out of every 4 young Iraqi children is 
                malnourished. More than 750,000 children are suffering 
                from malnutrition''.

SEC. 3. LIMITATION ON PROHIBITIONS AND RESTRICTIONS ON TRADE WITH IRAQ 
              TO ALLOW FOR THE EXPORT OF FOOD, MEDICINES, AND CERTAIN 
              OTHER PRODUCTS.

    The sanctions applied with respect to Iraq under the Iraq Sanctions 
Act of 1990 (sections 586-586J of the Foreign Operations, Export 
Financing, and Related Programs Appropriations Act, 1991 (Public Law 
101-513)) or any other provision of law shall not apply with respect to 
the export to Iraq of any food or other agricultural products 
(including fertilizer), medicines, medical supplies, medical 
instruments, or medical equipment, or with respect to travel incident 
to the sale or delivery to Iraq of food or other agricultural products 
(including fertilizer), medicines, medical supplies, medical 
instruments, or medical equipment.

SEC. 4. ADMINISTRATION BY SECRETARY OF COMMERCE.

    (a) Administration by Secretary of Commerce.--The Secretary of 
Commerce shall exercise the authorities of the Export Administration 
Act of 1979, as in effect pursuant to the International Emergency 
Economic Powers Act, to carry out section 3, except that--
            (1) the Secretary may not require a license for the export 
        of any of the items to which section 3 applies; but
            (2) the Secretary shall require persons exporting such 
        items to notify the Secretary of such exports.
    (b) Regulations.--The Secretary of Commerce shall issue such 
regulations as are necessary to carry out section 3.

SEC. 5. CONFORMING AMENDMENT.

    Section 906(a)(1) of the Trade Sanctions Reform and Export 
Enhancement Act of 2000 (title IX of H.R. 5426 of the 106th Congress, 
as enacted into law by section 1(a) of Public Law 106-387) is amended 
by inserting ``(other than Iraq)'' after ``government of a country''.

SEC. 6. SENSE OF CONGRESS.

    It is the sense of the Congress that the United States Government 
should take all necessary steps to end the suffering of innocent 
populations, primarily children and the elderly, by allowing the free 
flow of humanitarian aid to Iraq without threat of prosecution. Such 
steps should include, but not be limited to, using its position as a 
permanent member of the United Nations Security Council--
            (1) to lift the economic sanctions on Iraq so as to allow 
        exports and travel referred to in section 3; and
            (2) to recommend a ban on transfers of weapons to Iraq by 
        countries that are members of the United Nations.

SEC. 7. REPORT TO CONGRESS.

    Not later than 6 months after the date of the enactment of this 
Act, the President shall transmit to the Congress a report that sets 
forth--
            (1) the extent (expressed in volume and dollar amounts) of 
        sales to Iraq of food and other agricultural products 
        (including fertilizer), medicines, medical supplies, medical 
        instruments, and medical equipment, since the enactment of this 
        Act;
            (2) the impact the exports have had on food security in 
        Iraq;
            (3) a description of the types and end users of the goods 
        so exported;
            (4) whether there has been any indication that any 
        medicines, medical supplies, medical instruments, or medical 
        equipment exported to Iraq since the enactment of this Act--
                    (A) have been diverted by the Government of Iraq or 
                any other third party from the intended recipients; or
                    (B) have been used for any unintended 
                nonhumanitarian or dual-use purposes; and
            (5) what steps the United States has taken through the 
        United Nations, with the cooperation of Security Council 
        members, to--
                    (A) lift nonmilitary sanctions on Iraq, including 
                actions described in section 6; or
                    (B) impose a strict regional arms control regime 
                pursuant to Article 14 of Security Council Resolution 
                687.

SOLUTION: Humanitarian Exports Leading to Peace Act of 2001 - Declares that certain sanctions prohibiting trade with Iraq under the Iraq Sanctions Act of 1990 or any other provision of law shall not apply with respect to the export of any food or other agricultural products (including fertilizer), medicines, medical supplies, medical instruments, or medical equipment, or with respect to travel incident to the sale or delivery of such items.Directs the Secretary of Commerce to exercise the authorities of the Export Administration Act of 1979 (as in effect pursuant to the International Emergency Economic Powers Act) to carry out this Act; except that the Secretary may not require a license for the export of humanitarian assistance, but shall require persons to notify the Secretary when exporting such assistance.Amends the Trade Sanctions Reform and Export Enhancement Act of 2000 to repeal a specified section prohibiting the export to Iraq of agricultural commodities (including the financing of their sale), medicine, or medical devices, and travel (effectively allowing the export of such commodities and travel to such country).Expresses the sense of Congress that the U.S. Government should take all necessary steps to end the suffering of innocent populations, primarily children and the elderly, by allowing the free flow of humanitarian aid to Iraq without threat of prosecution. Urges the U.S. Government to use its position as a permanent member of the United Nations (UN) Security Council to lift the economic sanctions on Iraq so as to allow such exports and travel there, and to recommend a ban on transfers of weapons to such country by countries that are members of the UN.

PROBLEM: SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``California Forest 
Ecosystems Health Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Ecosystem management plans for National Forest System lands in 
                            California.
Sec. 5. Process for full implementation of ecosystem management plans.
Sec. 6. Research and monitoring program.
Sec. 7. Miscellaneous requirements.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Although people have had an active part in the 
        development and maintenance of forest structure and the 
        condition of the National Forest System lands in the State of 
        California for many years, recent forest management policies 
        have often resulted in a degeneration of the forest structure 
        and a loss of forest health and vigor.
            (2) The Forest Service, through the judicious use of 
        ecosystem management, has an opportunity to reverse these 
        forest management policies and restore the health and vigor of 
        National Forest System lands in California.
            (3) Ecosystems are dynamic and in a state of constant 
        change, and it is not possible to preserve a given ecosystem 
        condition in a static state over a period of time.
            (4) The many and varied resources and uses of National 
        Forest System lands provide both tangible and intangible 
        benefits to the people of the United States.
            (5) Although management of National Forest System lands in 
        California has traditionally placed first priority on the need 
        to produce maximum volumes of timber, the other multiple forest 
        resources and services are equally important to the people of 
        California and the United States.
            (6) Ecosystem management must balance the needs of outdoor 
        recreation, range, timber, watershed, fish, and wildlife, as 
        required by the Multiple-Use Sustained-Yield Act of 1960 (16 
        U.S.C. 528 et seq.), as well as protect soil and air quality 
        and provide for forest research.
            (7) National Forest System lands in California include some 
        of the most unique forest ecosystems in the world, including 
        giant sequoias, coastal redwoods, and bristlecone pines.
            (8) Destructive forest fires classified by the Forest 
        Service as ``intense'' have occurred in unprecedented numbers 
        and size on the National Forest System lands in California in 
        recent years, and these fires pose a threat to the very health 
        of the forests and present a danger to human life and property.
            (9) The Forest Service, through the judicious use of 
        ecosystem management, has an opportunity to reduce the 
        likelihood that fires classified as ``intense'' will occur with 
        such frequency and, at the same time, to improve forest vigor 
        and visitor safety.
            (10) Ecosystem management that considers the needs of all 
        species and their ability to interact with the presence of 
        humans can integrate both the conservation needs of the many 
        species of the ecosystems and the multiple use activities of 
        humans.
            (11) Identification of sound management options is both a 
        biological issue and a social issue, and the resulting 
        management policies must be socially acceptable, ecologically 
        sustainable, scientifically sound, legally responsible, and 
        economically viable.
            (12) The results of management practices in local 
        ecosystems can have a profound effect on the levels of demand 
        for commodity outputs from other ecosystems around the world.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Adaptive management.--The term ``adaptive management'' 
        means the experimental and monitored application of 
        scientifically derived management decisions to gain knowledge 
        that is then used to improve subsequent management decisions.
            (2) Ecosystem.--The term ``ecosystem'' means a community of 
        organisms and its environment that functions as a unit.
            (3) Ecosystem management.--The term ``ecosystem 
        management'' means the integration of ecological, economic, and 
        social factors to meet the biological needs of all associated 
        organisms and human needs through diverse, healthy, and 
        productive ecosystems, addressing resource supply, 
        conservation, and demand as opposed to a strategy for managing 
        individual species.
            (4) Ecosystem management plans.--The terms ``ecosystem 
        management plans'' and ``plans'' mean the ecosystem management 
        plans for National Forest System lands in the State of 
        California required to be developed by section 4(a).
            (5) National forest system.--The term ``National Forest 
        System'' has the meaning given that term in section 11(a) of 
        the Forest and Rangeland Renewable Resources Planning Act of 
        1974 (16 U.S.C. 1609(a)).
            (6) Seral stages.--The term ``seral stages'' means the 
        various age or life stages of a vegetative community as it 
        progresses from initial establishment toward a climax stage or 
        equilibrium.
            (7) Secretary.--The term ``Secretary'' means the Secretary 
        of Agriculture.
            (8) Stand.--The term ``stand'' means an area within a 
        forest where the trees have similar characteristics with 
        respect to species composition, size, condition, and age.
            (9) Vigor.--The term ``vigor'', with respect to forest 
        ecosystems, means the relative health of stands of trees and 
        related vegetation, including their actual growth rates as 
        compared with potential growth rates and their ability to 
        protect themselves naturally from forest pests, diseases, and 
        the effects of natural disaster.

SEC. 4. ECOSYSTEM MANAGEMENT PLANS FOR NATIONAL FOREST SYSTEM LANDS IN 
              CALIFORNIA.

    (a) Plans Required.--Notwithstanding the planning provisions of 
section 6 of the Forest and Rangeland Renewable Resources Planning Act 
of 1974 (16 U.S.C. 1604), the Secretary of Agriculture shall develop 
and implement ecosystem management plans pursuant to this Act to 
develop and demonstrate ecosystem management, including adaptive 
management techniques, for National Forest System lands described in 
subsection (b).
    (b) Federal Lands Covered by Plans.--The ecosystem management plans 
required by subsection (a) shall apply to all management units of the 
National Forest System located in the State of California. In the case 
of National Forest System lands in California that have been designated 
by law for special management before the date of the enactment of this 
Act, the Secretary shall incorporate into the ecosystem management 
plans applicable to those lands any statutory provisions that are in 
effect on such date and applicable to those lands.
    (c) Principles of Plans.--Ecosystem management plans shall embody 
the following principles:
            (1) Application of management techniques that will enhance 
        the health and vigor of the renewable natural resources on the 
        National Forest System lands covered by the plans and provide 
        for the continued protection of the soil, air, and water 
        resources of these lands.
            (2) Improvement of the forest ecosystems on these lands 
        toward desired forest conditions that--
                    (A) provide a mosaic of forest seral stages--
                            (i) representing a range of wildlife 
                        habitats necessary to meet the needs of the 
                        species indigenous to the ecosystem being 
                        managed; and
                            (ii) designed in such a way as to obviate 
                        the need for corridors or special management 
                        areas to meet the needs of given species or 
                        situations;
                    (B) minimize the danger of stand-destroying 
                uncontrolled wildfire;
                    (C) increase or maintain the health and vigor of 
                stands at a level that will permit the stands to resist 
                naturally, to the greatest degree practicable, insect 
                and disease attacks and the effects of other natural 
                disasters while incorporating the concern that some 
                level of dead-wood, both standing and down, is 
                desirable in healthy ecosystems;
                    (D) maintain the sustainable economic well-being 
                and stability of communities in areas dependent upon 
                national forest resources; and
                    (E) are developed, to the extent possible, with 
                consideration of the conditions that are known to have 
                existed on these lands or on similar lands before the 
                impacts of European settlement.
            (3) Concentration of management activities on the condition 
        of the renewable resources of an ecosystem rather than on 
        producing targeted outputs, with projected outputs based upon 
        attainment of specific stand conditions.
            (4) Emphasis on tangible management results rather than on 
        procedural standards and guidelines, but with development of 
        scientifically credible monitoring standards and guidelines to 
        assess both short- and long-term management results.
            (5) Except for any statutory provisions incorporated under 
        subsection (b) with respect to specific lands, prohibition on 
        requiring the allocation or categorization of tracts of land 
        for specific preselected ecosystem management emphases.
            (6) Consideration of the habitat needs of all species 
        across a broad landscape using management indicator species 
        whose presence will reflect a suitable amount and distribution 
        of particular habitat elements, rather than concentrating on 
        the needs of single species in a limited area.
            (7) Application across the entire unreserved land base in 
        such a manner as to harmonize the various multiple uses.
            (8) Incorporation of maximum flexibility in resource 
        decisionmaking through the use of adaptive management.
    (d) Management to Promote Desired Forest Conditions.--
            (1) In general.--Ecosystem management under the ecosystem 
        management plans shall be planned and practiced in a manner 
        that--
                    (A) considers the entire landscape in a management 
                unit of the National Forest System covered by a plan; 
                and
                    (B) benefits, to the extent practicable, all 
                renewable resources and the human resource in or 
                dependent upon the management unit.
            (2) Individual projects.--Individual management projects in 
        a management unit of the National Forest System covered by the 
        ecosystem management plans shall be designed to provide 
        multiresource benefits, promote the desired forest conditions 
        described in subsection (c)(2), and achieve maximum project 
        operating efficiency.
    (e) Selection of Acres for Ecosystem Management Activities.--
            (1) Minimum acres.--Ecosystem management plans shall 
        specify the minimum number of acres on which ecosystem 
        management activities will be applied annually in any 
        management unit of the National Forest System covered by the 
        plans. Such acreage shall be determined on the basis of the 
        total number of acres in the management unit, the work to be 
        performed across the unit as a whole during the plan period, 
        and the pro rata annual acreage on which ecosystem management 
        activities must be applied in order to establish and maintain 
        the desired forest condition during the specified plan period.
            (2) Effect of natural disasters.--In case of natural 
        disasters, such as wildfire, flood, windthrow, insect or 
        disease attack, a revision of the schedule of acres to be 
        treated may be granted by the Secretary in order to conduct 
        restoration and rehabilitation activities on the acres affected 
        by the natural disaster.
    (f) Participation in Development.--To ensure that the ecosystem 
management plans are economically, scientifically, and socially 
acceptable, the Secretary shall develop the plans through the use of 
public involvement programs that emphasize input from residents of 
local communities to be affected by the plans. The Secretary shall 
continue to consult with all interested persons in evaluating or 
modifying the plans.

SEC. 5. PROCESS FOR FULL IMPLEMENTATION OF ECOSYSTEM MANAGEMENT PLANS.

    (a) Implementation.--Beginning not later than January 1, 1995, the 
Secretary shall begin to implement the ecosystem management plans. The 
Secretary shall develop and implement the plans progressively over a 
five-year period to ensure full application of all plans not later than 
January 1, 2000, to all National Forest System lands described in 
section 4(b). Upon implementation of an ecosystem management plan for 
any portion of the lands described in such section, the plan shall 
replace and supersede any land and resource management plan (or portion 
of such a plan) then in effect for such lands.
    (b) Yearly Expansion.--During each year of the period specified in 
subsection (a), the Secretary shall expand application of the ecosystem 
management plans to contiguous areas required to be covered by such 
plans, as described in section 4(b). To the extent the Secretary 
considers it to be necessary, the Secretary may modify the ecosystem 
management plans for each new addition in order to incorporate the 
lessons gained from experience. Adaptive management shall be used to 
evaluate management decisions and to develop new information to be used 
to keep the plans and subsequent management decisions up-to-date.
    (c) Modification of Ecosystem Management Plans.--The Secretary 
shall modify the ecosystem management plans to incorporate findings 
from research, adaptive management projects, or monitoring to the 
extent such findings indicate changes in the plans are necessary or 
appropriate to achieve the principles described in section 4(c). Before 
the end of the first two years of the period specified in subsection 
(a), the Secretary shall issue regulations that set forth the process 
to be used for any modification of the ecosystem management plans.
    (d) Consistency.--Resource plans and permits and other instruments 
for the use and occupancy of National Forest System lands covered by an 
ecosystem management plan that are executed subsequent to the 
implementation date of the plan with respect to such lands shall be 
consistent with the plan. If the ecosystem management plan is modified, 
resource plans and permits and other instruments that are executed 
subsequent to the date of the modification shall be consistent with the 
modified plan. Appropriate supplemental documents under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) shall be 
prepared for those resource plans and permits, contracts, and other 
instruments in existence upon adoption of the ecosystem management plan 
or any modification of the plan. Any revisions in existing resource 
plans and permits, contracts, and other instruments shall be consistent 
with the supplemental document findings and subject to the agreement of 
all contractual parties. Any revision in present or future permits, 
contracts, and other instruments made pursuant to this subsection shall 
be subject to valid existing rights.

SEC. 6. RESEARCH AND MONITORING PROGRAM.

    The Secretary shall describe in detail in the ecosystem management 
plans and implement as part of the plans a targeted program of research 
and monitoring aimed at measuring the effects of the management regimes 
adopted under the plans. The Secretary shall ensure that monitoring is 
sufficient to measure the responses of the various resources to 
management practices and to provide a basis for adjustments of 
subsequent management decisions.

SEC. 7. MISCELLANEOUS REQUIREMENTS.

    (a) Increased Use of Certified Professional Practitioners.--With 
respect to National Forest System lands covered by the ecosystem 
management plans, the Secretary shall endeavor to increase the amount 
of field work to be done by professional practitioners certified by the 
Forest Service.
    (b) Accountability Procedures.--The Secretary shall develop 
accountability procedures to annually measure and inform the Congress 
concerning the work (as described in section 4(e)) achieved through the 
use of funds appropriated each year for National Forest System lands 
covered by the ecosystem management plans. The selection of acres upon 
which such work will be performed shall be controlled through the 
planning process. The accountability procedures required by this 
subsection shall be established and in operation before the end of the 
first two years of the period specified in section 5(a) and shall be 
designed to ensure the accomplishment of the work in accordance with 
plan direction.
    (c) Budgetary Considerations.--The Secretary shall develop budgets 
for each management unit of the National Forest System covered by 
ecosystem management plans on the basis of estimated benefits to the 
various resources affected by the ecosystem management activities, and 
such budgets will be justified on such basis. The Secretary shall 
provide the managers of these units the flexibility to accomplish over-
all objectives within over-all budgets in lieu of requiring and 
preparing detailed line-item budgets for each unit of work, except that 
accountability procedures developed under subsection (b) shall include 
requirements for detailed explanations of expenditures and estimates of 
benefits for each resource.

SOLUTION: California Forest Ecosystems Health Act - Directs the Secretary of Agriculture to develop and implement ecosystem management plans for National Forest System lands in California.

PROBLEM: SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Start-Up Success Accounts Act of 
2001''.

SEC. 2. START-UP SUCCESS ACCOUNTS.

    (a) In General.--Subpart C of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 (relating to taxable year for 
which deductions taken) is amended by inserting after section 468B the 
following new section:

``SEC. 468C. START-UP SUCCESS ACCOUNTS.

    ``(a) Deduction Allowed.--In the case of a taxpayer which is an 
eligible small business, there shall be allowed as a deduction for any 
taxable year the amount paid in cash by such taxpayer to a Start-up 
Success Account (hereafter in this section also referred to as an `SUSA 
Account').
    ``(b) Limitation.--
            ``(1) In general.--The amount which a taxpayer may pay into 
        the SUSA Account for any taxable year shall not exceed 
        whichever of the following is the least:
                    ``(A) 20 percent of so much of the taxable income 
                of the taxpayer (determined without regard to this 
                section) which is attributable to any trade or 
                business.
                    ``(B) $50,000.
                    ``(C) $100,000, reduced by the aggregate amount 
                paid by the taxpayer (and all related persons) into 
                SUSA accounts for all prior taxable years.
            ``(2) Deduction allowed only during startup period.--No 
        deduction shall be allowed under this section with respect to 
        any eligible small business for any taxable year after the 5th 
        taxable year that such business (or any predecessor) is engaged 
        in a trade or business.
            ``(3) Dollar limitation on controlled groups.--
                    ``(A) In general.--For purposes of paragraph (1)--
                            ``(i) all component members of a controlled 
                        group shall be treated as one taxpayer, and
                            ``(ii) the Secretary shall apportion the 
                        dollar limitations contained in paragraph (1) 
                        among the component members of such controlled 
                        group in such manner as he shall by regulations 
                        prescribe.
                    ``(B) Controlled group defined.--For purposes of 
                subparagraph (A), the term `controlled group' has the 
                meaning given such term by section 1563(a); except 
                that, for such purposes, `more than 50 percent' shall 
                be substituted for `at least 80 percent' each place it 
                appears in section 1563(a)(1).
            ``(4) Partnerships and s corporations.--In the case of a 
        partnership, the limitation under paragraph (1) shall apply 
        with respect to the partnership and each partner. A similar 
        rule shall apply in the case of an S corporation and its 
        shareholders.
            ``(5) Related persons.--For purposes of paragraph (1)(C), a 
        person (hereinafter in this paragraph referred to as the 
        `related person') is related to any person if the related 
        person bears a relationship to such person specified in section 
        267(b) or 707(b)(1), or the related person and such person are 
        engaged in trades or businesses under common control (within 
        the meaning of subsections (a) and (b) of section 52. For 
        purposes of the preceding sentence, in applying section 267(b) 
        or 707(b)(1), `10 percent' shall be substituted for `50 
        percent'.
    ``(c) Eligible Small Business.--
            ``(1) In general.--For purposes of this section, the term 
        `eligible small business' means, with respect to any taxable 
        year, any person actively engaged in a trade or business if for 
        all prior taxable years beginning after December 31, 1999, the 
        taxpayer (or any predecessor) met the $2,000,000 gross receipts 
test of paragraph (2). In the case of a taxpayer to which section 469 
applies, such term shall not include any trade or business which is a 
passive activity (within the meaning of section 469(c)) of the 
taxpayer.
            ``(2) $2,000,000 gross receipts tests.--A person meets the 
        $2,000,000 gross receipts tests of this paragraph for any prior 
        taxable year if such person would meet the test of section 
        448(c) were such section applied by substituting `$2,000,000' 
        for `$5,000,000'.
    ``(d) Start-up Success Account.--For purposes of this section--
            ``(1) In general.--The terms `Start-up Success Account' and 
        `SUSA Account' means a trust created or organized in the United 
        States for the exclusive benefit of an eligible small business, 
        but only if the written governing instrument creating the trust 
        meets the following requirements:
                    ``(A) No contribution will be accepted for any 
                taxable year in excess of the amount allowed as a 
                deduction under subsection (a) for such year.
                    ``(B) The trustee is a bank (as defined in section 
                408(n)) or another person who demonstrates to the 
                satisfaction of the Secretary that the manner in which 
                such person will administer the trust will be 
                consistent with the requirements of this section.
                    ``(C) The assets of the trust consist entirely of 
                cash or of obligations which have adequate stated 
                interest (as defined in section 1274(c)(2)) and which 
                pay such interest not less often than annually.
                    ``(D) All income of the trust is distributed 
                currently to the grantor.
                    ``(E) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
            ``(2) Account taxed as grantor trust.--The grantor of an 
        SUSA Account shall be treated for purposes of this title as the 
        owner of such Account and shall be subject to tax thereon in 
        accordance with subpart E of part I of subchapter J of this 
        chapter (relating to grantors and others treated as substantial 
        owners).
    ``(e) Inclusion of Amounts Distributed.--
            ``(1) In general.--Except as provided in paragraph (2), 
        there shall be includible in the gross income of the taxpayer 
        for any taxable year--
                    ``(A) any amount distributed from an SUSA Account 
                of the taxpayer during such taxable year (to the extent 
                not previously included in gross income), and
                    ``(B) any deemed distribution under--
                            ``(i) subsection (f)(1) (relating to 
                        deposits not distributed within 5 years),
                            ``(ii) subsection (f)(2) (relating to 
                        cessation in trade or business), and
                            ``(iii) subparagraph (A) or (B) of 
                        subsection (f)(3) (relating to prohibited 
                        transactions and pledging account as security).
            ``(2) Exceptions.--Gross income shall not include the 
        distribution of any contribution paid during a taxable year to 
        an SUSA Account to the extent that such contribution exceeds 
        the limitation applicable under subsection (b) if requirements 
        similar to the requirements of section 408(d)(4) are met.
            ``(3) Exclusion from self-employment tax.--Amounts included 
        in gross income under this subsection shall not be included in 
        determining net earnings from self-employment under section 
        1402.
    ``(f) Special Rules.--
            ``(1) Tax on deposits in account which are not distributed 
        within 5 years.--
                    ``(A) In general.--If, at the close of any taxable 
                year, there is a nonqualified balance in any SUSA 
                Account--
                            ``(i) there shall be deemed distributed 
                        from such Account during such taxable year an 
                        amount equal to such balance, and
                            ``(ii) the taxpayer's tax imposed by this 
                        chapter for such taxable year shall be 
                        increased by 10 percent of such deemed 
                        distribution.
                The preceding sentence shall not apply if an amount 
                equal to such nonqualified balance is distributed from 
                such Account to the taxpayer before the due date 
                (including extensions) for filing the return of tax 
                imposed by this chapter for such year (or, if earlier, 
                the date the taxpayer files such return for such year).
                    ``(B) Nonqualified balance.--For purposes of 
                subparagraph (A), the term `nonqualified balance' means 
                any balance in the Account on the last day of the 
                taxable year which is attributable to amounts deposited 
in such Account before the 4th preceding taxable year.
                    ``(C) Ordering rule.--For purposes of this 
                paragraph, distributions from an SUSA Account shall be 
                treated as made from deposits in the order in which 
                such deposits were made, beginning with the earliest 
                deposits.
            ``(2) Cessation in trade or business.--At the close of the 
        first disqualification period after a period for which the 
        taxpayer was engaged in the trade or business referred to in 
        subsection (a), there shall be deemed distributed from the SUSA 
        Account (if any) of the taxpayer an amount equal to the balance 
        in such Account at the close of such disqualification period. 
        For purposes of the preceding sentence, the term 
        `disqualification period' means any period of 2 consecutive 
        taxable years for which the taxpayer is not engaged in the 
        trade or business referred to in subsection (a).
            ``(3) Certain rules to apply.--Rules similar to the 
        following rules shall apply for purposes of this section:
                    ``(A) Section 408(e)(2) (relating to loss of 
                exemption of account where individual engages in 
                prohibited transaction).
                    ``(B) Section 408(e)(4) (relating to effect of 
                pledging account as security).
                    ``(C) Section 408(g) (relating to community 
                property laws).
                    ``(D) Section 408(h) (relating to custodial 
                accounts).
            ``(4) Time when payments deemed made.--For purposes of this 
        section, a taxpayer shall be deemed to have made a payment to 
        an SUSA Account on the last day of a taxable year if such 
        payment is made on account of such taxable year and is made 
        within 3\1/2\ months after the close of such taxable year.
    ``(g) Reports.--The trustee of an SUSA Account shall make such 
reports regarding such Account to the Secretary and to the person for 
whose benefit the Account is maintained with respect to contributions, 
distributions, and such other matters as the Secretary may require 
under regulations. The reports required by this subsection shall be 
filed at such time and in such manner and furnished to such persons at 
such time and in such manner as may be required by those 
regulations.''.
    (b) Tax on Excess Contributions.--
            (1) Subsection (a) of section 4973 of such Code (relating 
        to tax on certain excess contributions) is amended by striking 
        ``or'' at the end of paragraph (3), by redesignating paragraph 
        (4) as paragraph (5), and by inserting after paragraph (3) the 
        following new paragraph:
            ``(4) an SUSA Account (within the meaning of section 
        468C(d)), or''.
            (2) Section 4973 of such Code is amended by adding at the 
        end the following new subsection:
    ``(g) Excess Contributions to SUSA Accounts.--For purposes of this 
section, in the case of SUSA Accounts (within the meaning of section 
468C(d)), the term `excess contributions' means the amount by which the 
amount contributed for the taxable year to the Account exceeds the 
amount which may be contributed to the Account under section 468C(b) 
for such taxable year. For purposes of this subsection, any 
contribution which is distributed out of the SUSA Account in a 
distribution to which section 468C(e)(2)(B) applies shall be treated as 
an amount not contributed.''.
    (c) Tax on Prohibited Transactions.--
            (1) Subsection (c) of section 4975 of such Code (relating 
        to prohibited transactions) is amended by adding at the end the 
        following new paragraph:
            ``(6) Special rule for susa accounts.--A person for whose 
        benefit an SUSA Account (within the meaning of section 468C(d)) 
        is established shall be exempt from the tax imposed by this 
        section with respect to any transaction concerning such Account 
        (which would otherwise be taxable under this section) if, with 
        respect to such transaction, the account ceases to be an SUSA 
        Account by reason of the application of section 468C(f)(3)(A) 
        to such Account.''.
            (2) Paragraph (1) of section 4975(e) of such Code is 
        amended by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively, and by inserting after 
        subparagraph (D) the following new subparagraph:
                    ``(E) an SUSA Account described in section 
                468C(d),''.
    (d) Failure To Provide Reports on SUSA Accounts.--Paragraph (2) of 
section 6693(a) of such Code (relating to failure to provide reports on 
certain tax-favored accounts or annuities) is amended by redesignating 
subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, 
and by inserting after subparagraph (B) the following new subparagraph:
                    ``(C) section 468C(g) (relating to SUSA 
                Accounts),''.
    (e) Clerical Amendment.--The table of sections for subpart C of 
part II of subchapter E of chapter 1 of such Code is amended by 
inserting after the item relating to section 468B the following new 
item:

                              ``Sec. 468C. Start-up Success 
                                        Accounts.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SOLUTION:
Start-Up Success Accounts Act of 2001 - Amends the Internal Revenue Code to allow a limited deduction, to an eligible small business taxpayer during its start-up period, for amounts paid in cash by such a taxpayer to a Start-up Success Account.