Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Indian Reservation Economic
Investment Act of 2001''.

SEC. 2. INVESTMENT TAX CREDIT FOR PROPERTY ON INDIAN RESERVATIONS.

(a) Allowance of Indian Reservation Credit.--Section 46 of the
Internal Revenue Code of 1986 (relating to investment credits) is
amended by striking ''and'' at the end of paragraph (2), by striking
the period at the end of paragraph (3) and inserting '', and'', and by
adding after paragraph (3) the following new paragraph:
''(4) the Indian reservation credit.''.
(b) Amount of Indian Reservation Credit.--
(1) In general.--Section 48 of such Code (relating to the
energy credit and the reforestation credit) is amended by
adding after subsection (b) the following new subsection:
''(c) Indian Reservation Credit.--
''(1) In general.--For purposes of section 46, the Indian
reservation credit for any taxable year is the Indian
reservation percentage of the qualified investment in qualified
Indian reservation property placed in service during such
taxable year, determined in accordance with the following
table:

''In the case of qualified Indian The Indian reservation percentage
reservation property which is--
is--
Reservation personal property................. 10
New reservation construction property......... 15
Reservation infrastructure investment......... 15
''(2) Qualified investment in qualified indian reservation
property defined.--For purposes of this subpart--
''(A) In general.--The term 'qualified Indian
reservation property' means property--
''(i) which is--
''(I) reservation personal
property;
''(II) new reservation construction
property; or
''(III) reservation infrastructure
investment; and
''(ii) not acquired (directly or
indirectly) by the taxpayer from a person who
is related to the taxpayer (within the meaning
of section 465(b)(3)(C)).
The term 'qualified Indian reservation property' does
not include any property (or any portion thereof)
placed in service for purposes of conducting or housing
class I, II, or III gaming (as defined in section 4 of
the Indian Gaming Regulatory Act (25 U.S.C. 2703)).
''(B) Qualified investment.--The term 'qualified
investment' means--
''(i) in the case of reservation
infrastructure investment, the amount expended
by the taxpayer for the acquisition or
construction of the reservation infrastructure
investment; and
''(ii) in the case of all other qualified
Indian reservation property, the taxpayer's
basis for such property.
''(C) Reservation personal property.--The term
'reservation personal property' means qualified
personal property which is used by the taxpayer
predominantly in the active conduct of a trade or
business within an Indian reservation. Property shall
not be treated as 'reservation personal property' if it
is used or located outside the Indian reservation on a
regular basis.
''(D) Qualified personal property.--The term
'qualified personal property' means property--
''(i) for which depreciation is allowable
under section 168;
''(ii) which is not--
''(I) nonresidential real property;
''(II) residential rental property;
or
''(III) real property which is not
described in subclause (I) or (II) and
which has a class life of more than
12.5 years.
For purposes of this subparagraph, the terms
'nonresidential real property', 'residential
rental property', and 'class life' have the
respective meanings given such terms by section
168.
''(E) New reservation construction property.--The
term 'new reservation construction property' means
qualified real property--
''(i) which is located in an Indian
reservation;
''(ii) which is used by the taxpayer
predominantly in the active conduct of a trade
or business within an Indian reservation; and
''(iii) which is originally placed in
service by the taxpayer.
''(F) Qualified real property.--The term 'qualified
real property' means property for which depreciation is
allowable under section 168 and which is described in
subclause (I), (II), or (III) of subparagraph (D)(ii).
''(G) Reservation infrastructure investment.--
''(i) In general.--The term 'reservation
infrastructure investment' means qualified
personal property or qualified real property
which--
''(I) benefits the tribal
infrastructure;
''(II) is available to the general
public; and
''(III) is placed in service in
connection with the taxpayer's active
conduct of a trade or business within
an Indian reservation.
''(ii) Property may be located outside the
reservation.--Qualified personal property and
qualified real property used or located outside
an Indian reservation shall be reservation
infrastructure investment only if its purpose
is to connect to existing tribal infrastructure
in the reservation, and shall include, but not
be limited to, roads, power lines, water
systems, railroad spurs, and communications
facilities.
''(H) Coordination with other credits.--The term
'qualified Indian reservation property' shall not
include any property with respect to which the energy
credit or the rehabilitation credit is allowed.
''(3) Real estate rentals.--For purposes of this section,
the rental to others of real property located within an Indian
reservation shall be treated as the active conduct of a trade
or business in an Indian reservation.
''(4) Indian reservation defined.--For purposes of this
subpart, the term 'Indian reservation' means--
''(A) a reservation, as defined in section 4(10) of
the Indian Child Welfare Act of 1978 (25 U.S.C.
1903(10)), or
''(B) lands held under the provisions of the Alaska
Native Claims Settlement Act (43 U.S.C. 1601 et seq.)
by a Native corporation as defined in section 3(m) of
such Act (43 U.S.C. 1602(m)).
''(5) Limitation based on unemployment.--
''(A) General rule.--The Indian reservation credit
allowed under section 46 for any taxable year shall
equal--
''(i) if the Indian unemployment rate on
the applicable Indian reservation for which the
credit is sought exceeds 300 percent of the
national average unemployment rate at any time
during the calendar year in which the property
is placed in service or during the immediately
preceding 2 calendar years, 100 percent of such
credit;
''(ii) if such Indian unemployment rate
exceeds 150 percent but not 300 percent, 50
percent of such credit; and
''(iii) if such Indian unemployment rate
does not exceed 150 percent, 0 percent of such
credit.
''(B) Special rule for large projects.--In the case
of a qualified Indian reservation property which has
(or is a component of a project which has) a projected
construction period of more than 2 years or a cost of
more than $1,000,000, subparagraph (A) shall be applied
by substituting 'during the earlier of the calendar
year in which the taxpayer enters into a binding
agreement to make a qualified investment or the first
calendar year in which the taxpayer has expended at
least 10 percent of the taxpayer's qualified
investment, or the preceding calendar year' for 'during
the calendar year in which the property is placed in
service or during the immediately preceding 2 calendar
years'.
''(C) Determination of indian unemployment.--For
purposes of this paragraph, with respect to any Indian
reservation, the Indian unemployment rate shall be
based upon Indians unemployed and able to work, and
shall be certified by the Secretary of the Interior.
''(6) Coordination with nonrevenue laws.--Any reference in
this subsection to a provision not contained in this title
shall be treated for purposes of this subsection as a reference
to such provision as in effect on the date of the enactment of
this paragraph.''.
(2) Lodging to qualify.--Paragraph (2) of section 50(b) of
such Code (relating to property used for lodging) is amended by
striking ''and'' at the end of subparagraph (C), by striking
the period at the end of subparagraph (D) and inserting '';
and'', and by adding at the end the following subparagraph:
''(E) new reservation construction property.''.
(c) Recapture.--Subsection (a) of section 50 of such Code (relating
to recapture in case of dispositions, etc.), is amended by adding at
the end the following new paragraph:
''(6) Special rules for indian reservation property.--
''(A) In general.--If, during any taxable year,
property with respect to which the taxpayer claimed an
Indian reservation credit--
''(i) is disposed of; or
''(ii) in the case of reservation personal
property--
''(I) otherwise ceases to be
investment credit property with respect
to the taxpayer; or
''(II) is removed from the Indian
reservation, converted, or otherwise
ceases to be Indian reservation
property,
the tax under this chapter for such taxable year shall
be increased by the amount described in subparagraph
(B).
''(B) Amount of increase.--The increase in tax
under subparagraph (A) shall equal the aggregate
decrease in the credits allowed under section 38 by
reason of section 48(c) for all prior taxable years
which would have resulted had the qualified investment
taken into account with respect to the property been
limited to an amount which bears the same ratio to the
qualified investment with respect to such property as
the period such property was held by the taxpayer bears
to the applicable recovery period under section 168(g).
''(C) Coordination with other recapture
provisions.--In the case of property to which this
paragraph applies, paragraph (1) shall not apply and
the rules of paragraphs (3), (4), and (5) shall
apply.''.
(d) Basis Adjustment To Reflect Investment Credit.--Paragraph (3)
of section 50(c) of such Code (relating to basis adjustment to
investment credit property) is amended by striking ''energy credit or
reforestation credit'' and inserting ''energy credit, reforestation
credit, or Indian reservation credit other than with respect to any
expenditure for new reservation construction property''.
(e) Certain Governmental Use Property To Qualify.--Paragraph (4) of
section 50(b) of such Code (relating to property used by governmental
units or foreign persons or entities) is amended by redesignating
subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively,
and by inserting after subparagraph (C) the following new subparagraph:
''(D) Exception for reservation infrastructure
investment.--This paragraph shall not apply for
purposes of determining the Indian reservation credit
with respect to reservation infrastructure
investment.''.
(f) Application of At-Risk Rules.--Subparagraph (C) of section
49(a)(1) of such Code is amended by striking ''and'' at the end of
clause (ii), by striking the period at the end of clause (iii) and
inserting '', and'', and by adding at the end the following new clause:
''(iv) the qualified investment in
qualified Indian reservation property.''.
(g) Clerical Amendments.--
(1) Section 48 of such Code is amended by striking the
heading and inserting the following:

''SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; INDIAN RESERVATION
CREDIT.''.

(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by striking the item
relating to section 48 and inserting the following:

''Sec. 48. Energy credit; reforestation
credit; Indian reservation
credit.''.
(h) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 2001.
Student:
Indian Reservation Economic Investment Act of 2001 - Amends the Internal Revenue Code to allow an Indian reservation investment credit based on specified amounts. Includes qualified personal property and qualified real property used or located outside an Indian reservation which is connected to existing tribal infrastructure in the reservation, including roads, power lines, water systems, railroad spurs, and communication facilities as a reservation infrastructure investment. Limits the credit based on the Indian unemployment rate. Provides for recapture of the credit in certain cases.