C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. DECEMBER 15, 2015 RULES COMMITTEE PRINT 114-40 TEXT OF HOUSE AMENDMENT AMENDMENT TO TO THE SENATE H.R. 2029, MILITARY CONVETERANS AFFAIRS STRUCTION AND LATED #2 AGENCIES AND APPROPRIATIONS RE- ACT, 2016 [Showing the text of the Protecting Americans from Tax Hikes Act of 2015.] At the end of House amendment #1, insert the following: 3 DIVISION Q—PROTECTING AMERICANS FROM TAX HIKES ACT OF 2015 4 SECTION 1. SHORT TITLE, ETC. 1 2 5 (a) SHORT TITLE.—This division may be cited as the 6 ‘‘Protecting Americans from Tax Hikes Act of 2015’’. 7 (b) AMENDMENT OF 1986 CODE.—Except as other- 8 wise expressly provided, whenever in this division an 9 amendment or repeal is expressed in terms of an amend10 ment to, or repeal of, a section or other provision, the ref11 erence shall be considered to be made to a section or other 12 provision of the Internal Revenue Code of 1986. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 2 1 (c) TABLE OF CONTENTS.—The table of contents for 2 this division is as follows: DIVISION Q—PROTECTING AMERICANS FROM TAX HIKES ACT OF 2015 Sec. 1. Short title, etc. TITLE I—EXTENDERS Subtitle A—Permanent Extensions PART 1—TAX RELIEF Sec. Sec. Sec. Sec. FOR FAMILIES AND INDIVIDUALS 101. 102. 103. 104. Enhanced child tax credit made permanent. Enhanced American opportunity tax credit made permanent. Enhanced earned income tax credit made permanent. Extension and modification of deduction for certain expenses of elementary and secondary school teachers. Sec. 105. Extension of parity for exclusion from income for employer-provided mass transit and parking benefits. Sec. 106. Extension of deduction of State and local general sales taxes. PART 2—INCENTIVES FOR CHARITABLE GIVING Sec. 111. Extension and modification of special rule for contributions of capital gain real property made for conservation purposes. Sec. 112. Extension of tax-free distributions from individual retirement plans for charitable purposes. Sec. 113. Extension and modification of charitable deduction for contributions of food inventory. Sec. 114. Extension of modification of tax treatment of certain payments to controlling exempt organizations. Sec. 115. Extension of basis adjustment to stock of S corporations making charitable contributions of property. PART 3—INCENTIVES FOR GROWTH, JOBS, INVESTMENT, AND INNOVATION Sec. 121. Extension and modification of research credit. Sec. 122. Extension and modification of employer wage credit for employees who are active duty members of the uniformed services. Sec. 123. Extension of 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements. Sec. 124. Extension and modification of increased expensing limitations and treatment of certain real property as section 179 property. Sec. 125. Extension of treatment of certain dividends of regulated investment companies. Sec. 126. Extension of exclusion of 100 percent of gain on certain small business stock. Sec. 127. Extension of reduction in S-corporation recognition period for builtin gains tax. Sec. 128. Extension of subpart F exception for active financing income. PART 4—INCENTIVES FOR REAL ESTATE INVESTMENT L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 3 Sec. 131. Extension of minimum low-income housing tax credit rate for nonFederally subsidized buildings. Sec. 132. Extension of military housing allowance exclusion for determining whether a tenant in certain counties is low-income. Sec. 133. Extension of RIC qualified investment entity treatment under FIRPTA. Subtitle B—Extensions Through 2019 Sec. Sec. Sec. Sec. 141. 142. 143. 144. Extension of new markets tax credit. Extension and modification of work opportunity tax credit. Extension and modification of bonus depreciation. Extension of look-thru treatment of payments between related controlled foreign corporations under foreign personal holding company rules. Subtitle C—Extensions Through 2016 PART 1—TAX RELIEF FOR FAMILIES AND INDIVIDUALS Sec. 151. Extension and modification of exclusion from gross income of discharge of qualified principal residence indebtedness. Sec. 152. Extension of mortgage insurance premiums treated as qualified residence interest. Sec. 153. Extension of above-the-line deduction for qualified tuition and related expenses. PART 2—INCENTIVES Sec. Sec. Sec. Sec. Sec. Sec. 161. 162. 163. 164. 165. 166. Sec. 167. Sec. 168. Sec. 169. Sec. 170. Sec. 171. Sec. 172. Sec. 173. Sec. 174. FOR 181. 182. 183. 184. 185. AND INNOVATION Extension of Indian employment tax credit. Extension and modification of railroad track maintenance credit. Extension of mine rescue team training credit. Extension of qualified zone academy bonds. Extension of classification of certain race horses as 3-year property. Extension of 7-year recovery period for motorsports entertainment complexes. Extension and modification of accelerated depreciation for business property on an Indian reservation. Extension of election to expense mine safety equipment. Extension of special expensing rules for certain film and television productions; special expensing for live theatrical productions. Extension of deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. Extension and modification of empowerment zone tax incentives. Extension of temporary increase in limit on cover over of rum excise taxes to Puerto Rico and the Virgin Islands. Extension of American Samoa economic development credit. Moratorium on medical device excise tax. PART 3—INCENTIVES Sec. Sec. Sec. Sec. Sec. GROWTH, JOBS, INVESTMENT, Extension Extension Extension Extension Extension FOR ENERGY PRODUCTION AND CONSERVATION and modification of credit for nonbusiness energy property. of credit for alternative fuel vehicle refueling property. of credit for 2-wheeled plug-in electric vehicles. of second generation biofuel producer credit. of biodiesel and renewable diesel incentives. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00003 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 4 Sec. 186. Extension and modification of production credit for Indian coal facilities. Sec. 187. Extension of credits with respect to facilities producing energy from certain renewable resources. Sec. 188. Extension of credit for energy-efficient new homes. Sec. 189. Extension of special allowance for second generation biofuel plant property. Sec. 190. Extension of energy efficient commercial buildings deduction. Sec. 191. Extension of special rule for sales or dispositions to implement FERC or State electric restructuring policy for qualified electric utilities. Sec. 192. Extension of excise tax credits relating to alternative fuels. Sec. 193. Extension of credit for new qualified fuel cell motor vehicles. TITLE II—PROGRAM INTEGRITY Sec. 201. Modification of filing dates of returns and statements relating to employee wage information and nonemployee compensation to improve compliance. Sec. 202. Safe harbor for de minimis errors on information returns and payee statements. Sec. 203. Requirements for the issuance of ITINs. Sec. 204. Prevention of retroactive claims of earned income credit after issuance of social security number. Sec. 205. Prevention of retroactive claims of child tax credit. Sec. 206. Prevention of retroactive claims of American opportunity tax credit. Sec. 207. Procedures to reduce improper claims. Sec. 208. Restrictions on taxpayers who improperly claimed credits in prior year. Sec. 209. Treatment of credits for purposes of certain penalties. Sec. 210. Increase the penalty applicable to paid tax preparers who engage in willful or reckless conduct. Sec. 211. Employer identification number required for American opportunity tax credit. Sec. 212. Higher education information reporting only to include qualified tuition and related expenses actually paid. TITLE III—MISCELLANEOUS PROVISIONS Subtitle A—Family Tax Relief Sec. Sec. Sec. Sec. Sec. Sec. 301. 302. 303. 304. 305. 306. Exclusion for amounts received under the Work Colleges Program. Improvements to section 529 accounts. Elimination of residency requirement for qualified ABLE programs. Exclusion for wrongfully incarcerated individuals. Clarification of special rule for certain governmental plans. Rollovers permitted from other retirement plans into simple retirement accounts. Sec. 307. Technical amendment relating to rollover of certain airline payment amounts. Sec. 308. Treatment of early retirement distributions for nuclear materials couriers, United States Capitol Police, Supreme Court Police, and diplomatic security special agents. Sec. 309. Prevention of extension of tax collection period for members of the Armed Forces who are hospitalized as a result of combat zone injuries. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00004 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 5 Subtitle B—Real Estate Investment Trusts Sec. 311. Restriction on tax-free spinoffs involving REITs. Sec. 312. Reduction in percentage limitation on assets of REIT which may be taxable REIT subsidiaries. Sec. 313. Prohibited transaction safe harbors. Sec. 314. Repeal of preferential dividend rule for publicly offered REITs. Sec. 315. Authority for alternative remedies to address certain REIT distribution failures. Sec. 316. Limitations on designation of dividends by REITs. Sec. 317. Debt instruments of publicly offered REITs and mortgages treated as real estate assets. Sec. 318. Asset and income test clarification regarding ancillary personal property. Sec. 319. Hedging provisions. Sec. 320. Modification of REIT earnings and profits calculation to avoid duplicate taxation. Sec. 321. Treatment of certain services provided by taxable REIT subsidiaries. Sec. 322. Exception from FIRPTA for certain stock of REITs. Sec. 323. Exception for interests held by foreign retirement or pension funds. Sec. 324. Increase in rate of withholding of tax on dispositions of United States real property interests. Sec. 325. Interests in RICs and REITs not excluded from definition of United States real property interests. Sec. 326. Dividends derived from RICs and REITs ineligible for deduction for United States source portion of dividends from certain foreign corporations. Subtitle C—Additional Provisions Sec. 331. Deductibility of charitable contributions to agricultural research organizations. Sec. 332. Removal of bond requirements and extending filing periods for certain taxpayers with limited excise tax liability. Sec. 333. Modifications to alternative tax for certain small insurance companies. Sec. 334. Treatment of timber gains. Sec. 335. Modification of definition of hard cider. Sec. 336. Church plan clarification. Subtitle D—Revenue Provisions Sec. 341. Updated ASHRAE standards for energy efficient commercial buildings deduction. Sec. 342. Excise tax credit equivalency for liquified petroleum gas and liquified natural gas. Sec. 343. Exclusion from gross income of certain clean coal power grants to non-corporate taxpayers. Sec. 344. Clarification of valuation rule for early termination of certain charitable remainder unitrusts. Sec. 345. Prevention of transfer of certain losses from tax indifferent parties. Sec. 346. Treatment of certain persons as employers with respect to motion picture projects. TITLE IV—TAX ADMINISTRATION Subtitle A—Internal Revenue Service Reforms L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00005 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 6 Sec. 401. Duty to ensure that Internal Revenue Service employees are familiar with and act in accord with certain taxpayer rights. Sec. 402. IRS employees prohibited from using personal email accounts for official business. Sec. 403. Release of information regarding the status of certain investigations. Sec. 404. Administrative appeal relating to adverse determinations of tax-exempt status of certain organizations. Sec. 405. Organizations required to notify Secretary of intent to operate under 501(c)(4). Sec. 406. Declaratory judgments for 501(c)(4) and other exempt organizations. Sec. 407. Termination of employment of Internal Revenue Service employees for taking official actions for political purposes. Sec. 408. Gift tax not to apply to contributions to certain exempt organizations. Sec. 409. Extend Internal Revenue Service authority to require truncated Social Security numbers on Form W–2. Sec. 410. Clarification of enrolled agent credentials. Sec. 411. Partnership audit rules. Subtitle B—United States Tax Court PART 1—TAXPAYER ACCESS Sec. Sec. Sec. Sec. TO UNITED STATES TAX COURT 421. 422. 423. 424. Filing period for interest abatement cases. Small tax case election for interest abatement cases. Venue for appeal of spousal relief and collection cases. Suspension of running of period for filing petition of spousal relief and collection cases. Sec. 425. Application of Federal rules of evidence. PART 2—UNITED STATES TAX COURT ADMINISTRATION Sec. 431. Judicial conduct and disability procedures. Sec. 432. Administration, judicial conference, and fees. PART 3—CLARIFICATION RELATING TO UNITED STATES TAX COURT Sec. 441. Clarification relating to United States Tax Court. TITLE V—TRADE-RELATED PROVISIONS Sec. 501. Modification of effective date of provisions relating to tariff classification of recreational performance outerwear. Sec. 502. Agreement by Asia-Pacific Economic Cooperation members to reduce rates of duty on certain environmental goods. TITLE VI—BUDGETARY EFFECTS Sec. 601. Budgetary effects. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00006 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 7 2 TITLE I—EXTENDERS Subtitle A—Permanent Extensions 3 PART 1—TAX RELIEF FOR FAMILIES AND 4 INDIVIDUALS 5 SEC. 101. ENHANCED CHILD TAX CREDIT MADE PERMA- 1 6 NENT. 7 (a) IN GENERAL.—Section 24(d)(1)(B)(i) is amend- 8 ed by striking ‘‘$10,000’’ and inserting ‘‘$3,000’’. 9 (b) CONFORMING AMENDMENT.—Section 24(d) is 10 amended by striking paragraphs (3) and (4). 11 (c) EFFECTIVE DATE.—The amendments made by 12 this section shall apply to taxable years beginning after 13 the date of the enactment of this Act. 14 SEC. 102. ENHANCED AMERICAN OPPORTUNITY TAX CRED- 15 16 IT MADE PERMANENT. (a) IN GENERAL.—Section 25A(i) is amended by 17 striking ‘‘and before 2018’’. 18 (b) TREATMENT OF POSSESSIONS.—Section 19 1004(c)(1) of division B of the American Recovery and 20 Reinvestment Tax Act of 2009 by striking ‘‘and before 21 2018’’ each place it appears. 22 (c) EFFECTIVE DATE.—The amendments made by 23 this section shall apply to taxable years beginning after 24 the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 8 1 SEC. 103. ENHANCED EARNED INCOME TAX CREDIT MADE 2 PERMANENT. 3 (a) INCREASE IN CREDIT PERCENTAGE FOR 3 OR 4 MORE QUALIFYING CHILDREN MADE PERMANENT.—Sec5 tion 32(b)(1) is amended to read as follows: 6 ‘‘(1) PERCENTAGES.—The credit percentage 7 and the phaseout percentage shall be determined as 8 follows: ‘‘In the case of an eligible individual with: The credit percentage is: 1 qualifying child ........................................ 2 qualifying children ................................... 3 or more qualifying children ..................... No qualifying children ................................ 34 40 45 7.65 9 10 (b) REDUCTION OF The phaseout percentage is: 15.98 21.06 21.06 7.65’’. MARRIAGE PENALTY MADE PER- MANENT.— 11 12 (1) IN GENERAL.—Section 32(b)(2)(B) is amended to read as follows: 13 ‘‘(B) JOINT 14 ‘‘(i) IN RETURNS.— GENERAL.—In the case of a 15 joint return filed by an eligible individual 16 and such individual’s spouse, the phaseout 17 amount determined under subparagraph 18 (A) shall be increased by $5,000. 19 ‘‘(ii) INFLATION ADJUSTMENT.—In 20 the case of any taxable year beginning 21 after 2015, the $5,000 amount in clause L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 9 1 (i) shall be increased by an amount equal 2 to— 3 ‘‘(I) such dollar amount, multi- 4 plied by 5 ‘‘(II) the cost of living adjust- 6 ment determined under section 1(f)(3) 7 for the calendar year in which the tax- 8 able year begins determined by sub- 9 stituting ‘calendar year 2008’ for ‘cal- 10 endar year 1992’ in subparagraph (B) 11 thereof. 12 ‘‘(iii) ROUNDING.—Subparagraph (A) 13 of subsection (j)(2) shall apply after taking 14 into account any increase under clause 15 (ii).’’. 16 (c) CONFORMING AMENDMENT.—Section 32(b) is 17 amended by striking paragraph (3). 18 (d) EFFECTIVE DATE.—The amendments made by 19 this section shall apply to taxable years beginning after 20 December 31, 2015. 21 SEC. 104. EXTENSION AND MODIFICATION OF DEDUCTION 22 FOR CERTAIN EXPENSES OF ELEMENTARY 23 AND SECONDARY SCHOOL TEACHERS. 24 (a) DEDUCTION MADE PERMANENT.—Section 25 62(a)(2)(D) is amended by striking ‘‘In the case of taxable L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 10 1 years beginning during 2002, 2003, 2004, 2005, 2006, 2 2007, 2008, 2009, 2010, 2011, 2012, 2013, or 2014, the 3 deductions’’ and inserting ‘‘The deductions’’. 4 (b) INFLATION ADJUSTMENT.—Section 62(d) is 5 amended by adding at the end the following new para6 graph: 7 ‘‘(3) INFLATION ADJUSTMENT.—In the case of 8 any taxable year beginning after 2015, the $250 9 amount in subsection (a)(2)(D) shall be increased by 10 an amount equal to— 11 ‘‘(A) such dollar amount, multiplied by 12 ‘‘(B) the cost-of-living adjustment deter- 13 mined under section 1(f)(3) for the calendar 14 year in which the taxable year begins, deter- 15 mined by substituting ‘calendar year 2014’ for 16 ‘calendar year 1992’ in subparagraph (B) 17 thereof. 18 Any increase determined under the preceding sen- 19 tence shall be rounded to the nearest multiple of 20 $50.’’. 21 (c) PROFESSIONAL DEVELOPMENT EXPENSES.—Sec- 22 tion 62(a)(2)(D) is amended— 23 (1) by striking ‘‘educator in connection’’ and all 24 that follows and inserting ‘‘educator—’’, and 25 (2) by inserting at the end the following: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 11 1 ‘‘(i) by reason of the participation of 2 the educator in professional development 3 courses related to the curriculum in which 4 the educator provides instruction or to the 5 students for which the educator provides 6 instruction, and 7 ‘‘(ii) in connection with books, sup- 8 plies (other than nonathletic supplies for 9 courses of instruction in health or physical 10 education), computer equipment (including 11 related software and services) and other 12 equipment, and supplementary materials 13 used by the eligible educator in the class- 14 room.’’. 15 (d) EFFECTIVE DATES.— 16 (1) EXTENSION.—The amendment made by 17 subsection (a) shall apply to taxable years beginning 18 after December 31, 2014. 19 (2) MODIFICATIONS.—The amendments made 20 by subsections (b) and (c) shall apply to taxable 21 years beginning after December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 12 1 SEC. 105. EXTENSION OF PARITY FOR EXCLUSION FROM IN- 2 COME 3 TRANSIT AND PARKING BENEFITS. 4 FOR (a) MASS TRANSIT EMPLOYER-PROVIDED AND MASS PARKING PARITY.—Section 5 132(f)(2) is amended— 6 (1) by striking ‘‘$100’’ in subparagraph (A) 7 and inserting ‘‘$175’’, and 8 (2) by striking the last sentence. 9 (b) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to months after December 31, 11 2014. 12 SEC. 106. EXTENSION OF DEDUCTION OF STATE AND LOCAL 13 GENERAL SALES TAXES. 14 (a) IN GENERAL.—Section 164(b)(5) is amended by 15 striking subparagraph (I). 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall apply to taxable years beginning after 18 December 31, 2014. 19 PART 2—INCENTIVES FOR CHARITABLE GIVING 20 SEC. 111. EXTENSION AND MODIFICATION OF SPECIAL 21 RULE 22 GAIN REAL PROPERTY MADE FOR CONSERVA- 23 TION PURPOSES. 24 CONTRIBUTIONS OF CAPITAL (a) MADE PERMANENT.— 25 26 FOR (1) INDIVIDUALS.—Section 170(b)(1)(E) is amended by striking clause (vi). L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 13 1 (2) CORPORATIONS.—Section 170(b)(2)(B) is 2 amended by striking clause (iii). 3 (b) CONTRIBUTIONS 4 ERTY MADE FOR OF CAPITAL GAIN REAL PROP- CONSERVATION PURPOSES BY NATIVE 5 CORPORATIONS.— 6 (1) IN GENERAL.—Section 170(b)(2) is amend- 7 ed by redesignating subparagraph (C) as subpara- 8 graph (D), and by inserting after subparagraph (B) 9 the following new subparagraph: 10 ‘‘(C) QUALIFIED 11 TRIBUTIONS 12 TIONS.— 13 BY ‘‘(i) IN CONSERVATION CERTAIN NATIVE GENERAL.—Any CON- CORPORA- qualified con- 14 servation contribution (as defined in sub- 15 section (h)(1)) which— 16 ‘‘(I) is made by a Native Cor- 17 poration, and 18 ‘‘(II) is a contribution of prop- 19 erty which was land conveyed under 20 the Alaska Native Claims Settlement 21 Act, 22 shall be allowed to the extent that the ag- 23 gregate amount of such contributions does 24 not exceed the excess of the taxpayer’s tax- 25 able income over the amount of charitable L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 14 1 contributions allowable under subpara- 2 graph (A). 3 ‘‘(ii) CARRYOVER.—If the aggregate 4 amount of contributions described in clause 5 (i) exceeds the limitation of clause (i), such 6 excess shall be treated (in a manner con- 7 sistent with the rules of subsection (d)(2)) 8 as a charitable contribution to which clause 9 (i) applies in each of the 15 succeeding 10 taxable years in order of time. 11 ‘‘(iii) NATIVE CORPORATION.—For 12 purposes of this subparagraph, the term 13 ‘Native Corporation’ has the meaning 14 given such term by section 3(m) of the 15 Alaska Native Claims Settlement Act.’’. 16 (2) CONFORMING AMENDMENTS.— 17 (A) Section 170(b)(2)(A) is amended by 18 striking ‘‘subparagraph (B) applies’’ and insert- 19 ing ‘‘subparagraph (B) or (C) applies’’. 20 (B) Section 170(b)(2)(B)(ii) is amended by 21 striking ‘‘15 succeeding years’’ and inserting 22 ‘‘15 succeeding taxable years’’. 23 (3) VALID EXISTING RIGHTS PRESERVED.— 24 Nothing in this subsection (or any amendment made 25 by this subsection) shall be construed to modify the L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 15 1 existing property rights validly conveyed to Native 2 Corporations (within the meaning of section 3(m) of 3 the Alaska Native Claims Settlement Act) under 4 such Act. 5 (c) EFFECTIVE DATES.— 6 (1) EXTENSION.—The amendments made by 7 subsection (a) shall apply to contributions made in 8 taxable years beginning after December 31, 2014. 9 (2) MODIFICATION.—The amendments made by 10 subsection (b) shall apply to contributions made in 11 taxable years beginning after December 31, 2015. 12 SEC. 112. EXTENSION OF TAX-FREE DISTRIBUTIONS FROM 13 INDIVIDUAL RETIREMENT PLANS FOR CHARI- 14 TABLE PURPOSES. 15 (a) IN GENERAL.—Section 408(d)(8) is amended by 16 striking subparagraph (F). 17 (b) EFFECTIVE DATE.—The amendment made by 18 this section shall apply to distributions made in taxable 19 years beginning after December 31, 2014. 20 SEC. 113. EXTENSION AND MODIFICATION OF CHARITABLE 21 DEDUCTION FOR CONTRIBUTIONS OF FOOD 22 INVENTORY. 23 (a) PERMANENT EXTENSION.—Section 170(e)(3)(C) 24 is amended by striking clause (iv). L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 16 1 (b) MODIFICATIONS.—Section 170(e)(3)(C), as 2 amended by subsection (a), is amended by striking clause 3 (ii), by redesignating clause (iii) as clause (vi), and by in4 serting after clause (i) the following new clauses: 5 ‘‘(ii) LIMITATION.—The aggregate 6 amount of such contributions for any tax- 7 able year which may be taken into account 8 under this section shall not exceed— 9 ‘‘(I) in the case of any taxpayer 10 other than a C corporation, 15 per- 11 cent of the taxpayer’s aggregate net 12 income for such taxable year from all 13 trades or businesses from which such 14 contributions were made for such 15 year, computed without regard to this 16 section, and 17 ‘‘(II) in the case of a C corpora- 18 tion, 15 percent of taxable income (as 19 defined in subsection (b)(2)(D)). 20 ‘‘(iii) RULES 21 RELATED TO LIMITA- TION.— 22 ‘‘(I) CARRYOVER.—If such aggre- 23 gate amount exceeds the limitation 24 imposed under clause (ii), such excess 25 shall be treated (in a manner con- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 17 1 sistent with the rules of subsection 2 (d)) as a charitable contribution de- 3 scribed in clause (i) in each of the 5 4 succeeding taxable years in order of 5 time. 6 ‘‘(II) COORDINATION WITH OVER- 7 ALL CORPORATE LIMITATION.—In 8 case of any charitable contribution 9 which is allowable after the applica- 10 tion of clause (ii)(II), subsection 11 (b)(2)(A) shall not apply to such con- 12 tribution, but the limitation imposed 13 by such subsection shall be reduced 14 (but not below zero) by the aggregate 15 amount of such contributions. For 16 purposes of subsection (b)(2)(B), such 17 contributions shall be treated as al- 18 lowable under subsection (b)(2)(A). 19 ‘‘(iv) DETERMINATION 20 CERTAIN TAXPAYERS.—If 21 the OF BASIS FOR a taxpayer— ‘‘(I) does not account for inven- 22 tories under section 471, and 23 ‘‘(II) is not required to capitalize 24 indirect costs under section 263A, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 18 1 the taxpayer may elect, solely for purposes 2 of subparagraph (B), to treat the basis of 3 any apparently wholesome food as being 4 equal to 25 percent of the fair market 5 value of such food. 6 ‘‘(v) DETERMINATION OF FAIR MAR- 7 KET VALUE.—In 8 tribution of apparently wholesome food 9 which cannot or will not be sold solely by 10 reason of internal standards of the tax- 11 payer, lack of market, or similar cir- 12 cumstances, or by reason of being pro- 13 duced by the taxpayer exclusively for the 14 purposes of transferring the food to an or- 15 ganization described in subparagraph (A), 16 the fair market value of such contribution 17 shall be determined— the case of any such con- 18 ‘‘(I) without regard to such inter- 19 nal standards, such lack of market, 20 such circumstances, or such exclusive 21 purpose, and 22 ‘‘(II) by taking into account the 23 price at which the same or substan- 24 tially the same food items (as to both 25 type and quality) are sold by the tax- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 19 1 payer at the time of the contribution 2 (or, if not so sold at such time, in the 3 recent past).’’ 4 (c) EFFECTIVE DATES.— 5 (1) EXTENSION.—The amendment made by 6 subsection (a) shall apply to contributions made 7 after December 31, 2014. 8 (2) MODIFICATIONS.—The amendments made 9 by subsection (b) shall apply to taxable years begin- 10 ning after December 31, 2015. 11 SEC. 114. EXTENSION OF MODIFICATION OF TAX TREAT- 12 MENT OF CERTAIN PAYMENTS TO CONTROL- 13 LING EXEMPT ORGANIZATIONS. 14 (a) IN GENERAL.—Section 512(b)(13)(E) is amend- 15 ed by striking clause (iv). 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall apply to payments received or accrued 18 after December 31, 2014. 19 SEC. 115. EXTENSION OF BASIS ADJUSTMENT TO STOCK OF 20 S CORPORATIONS MAKING CHARITABLE CON- 21 TRIBUTIONS OF PROPERTY. 22 (a) IN GENERAL.—Section 1367(a)(2) is amended by 23 striking the last sentence. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 20 1 (b) EFFECTIVE DATE.—The amendment made by 2 this section shall apply to contributions made in taxable 3 years beginning after December 31, 2014. 4 PART 3—INCENTIVES FOR GROWTH, JOBS, 5 INVESTMENT, AND INNOVATION 6 SEC. 121. EXTENSION AND MODIFICATION OF RESEARCH 7 CREDIT. 8 (a) MADE PERMANENT.— 9 (1) IN 10 GENERAL.—Section 41 is amended by striking subsection (h). 11 (2) CONFORMING AMENDMENT.—Section 12 45C(b)(1) is amended by striking subparagraph (D). 13 (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN- 14 IMUM TAX IN CASE OF ELIGIBLE SMALL BUSINESS.— 15 Section 38(c)(4)(B) is amended by redesignating clauses 16 (ii) through (ix) as clauses (iii) through (x), respectively, 17 and by inserting after clause (i) the following new clause: 18 ‘‘(ii) the credit determined under sec- 19 tion 41 for the taxable year with respect to 20 an eligible small business (as defined in 21 paragraph (5)(C), after application of rules 22 similar to the rules of paragraph (5)(D)),’’. 23 24 (c) TREATMENT TAIN OF RESEARCH CREDIT FOR CER- STARTUP COMPANIES.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 21 1 (1) IN GENERAL.—Section 41, as amended by 2 subsection (a), is amended by adding at the end the 3 following new subsection: 4 ‘‘(h) TREATMENT OF CREDIT FOR QUALIFIED SMALL 5 BUSINESSES.— 6 ‘‘(1) IN GENERAL.—At the election of a quali- 7 fied small business for any taxable year, section 8 3111(f) shall apply to the payroll tax credit portion 9 of the credit otherwise determined under subsection 10 (a) for the taxable year and such portion shall not 11 be treated (other than for purposes of section 280C) 12 as a credit determined under subsection (a). 13 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 14 purposes of this subsection, the payroll tax credit 15 portion of the credit determined under subsection 16 (a) with respect to any qualified small business for 17 any taxable year is the least of— 18 ‘‘(A) the amount specified in the election 19 made under this subsection, 20 ‘‘(B) the credit determined under sub- 21 section (a) for the taxable year (determined be- 22 fore the application of this subsection), or 23 ‘‘(C) in the case of a qualified small busi- 24 ness other than a partnership or S corporation, 25 the amount of the business credit carryforward L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 22 1 under section 39 carried from the taxable year 2 (determined before the application of this sub- 3 section to the taxable year). 4 ‘‘(3) QUALIFIED 5 poses of this subsection— 6 ‘‘(A) IN SMALL BUSINESS.—For GENERAL.—The pur- term ‘qualified 7 small business’ means, with respect to any tax- 8 able year— 9 ‘‘(i) a corporation or partnership, if— 10 ‘‘(I) the gross receipts (as deter- 11 mined under the rules of section 12 448(c)(3), without regard to subpara- 13 graph (A) thereof) of such entity for 14 the 15 $5,000,000, and taxable year is less than 16 ‘‘(II) such entity did not have 17 gross receipts (as so determined) for 18 any taxable year preceding the 5-tax- 19 able-year period ending with such tax- 20 able year, and 21 ‘‘(ii) any person (other than a cor- 22 poration or partnership) who meets the re- 23 quirements of subclauses (I) and (II) of 24 clause (i), determined— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 23 1 ‘‘(I) by substituting ‘person’ for 2 ‘entity’ each place it appears, and 3 ‘‘(II) by only taking into account 4 the aggregate gross receipts received 5 by such person in carrying on all 6 trades or businesses of such person. 7 ‘‘(B) LIMITATION.—Such term shall not 8 include an organization which is exempt from 9 taxation under section 501. 10 ‘‘(4) ELECTION.— 11 ‘‘(A) IN 12 GENERAL.—Any election under this subsection for any taxable year— 13 ‘‘(i) shall specify the amount of the 14 credit to which such election applies, 15 ‘‘(ii) shall be made on or before the 16 due date (including extensions) of— 17 ‘‘(I) in the case of a qualified 18 small business which is a partnership, 19 the return required to be filed under 20 section 6031, 21 ‘‘(II) in the case of a qualified 22 small business which is an S corpora- 23 tion, the return required to be filed 24 under section 6037, and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 24 1 ‘‘(III) in the case of any other 2 qualified small business, the return of 3 tax for the taxable year, and 4 ‘‘(iii) may be revoked only with the 5 consent of the Secretary. 6 ‘‘(B) LIMITATIONS.— 7 ‘‘(i) AMOUNT.—The amount specified 8 in any election made under this subsection 9 shall not exceed $250,000. 10 ‘‘(ii) NUMBER OF TAXABLE YEARS.— 11 A person may not make an election under 12 this subsection if such person (or any other 13 person treated as a single taxpayer with 14 such person under paragraph (5)(A)) has 15 made an election under this subsection for 16 5 or more preceding taxable years. 17 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS 18 AND S CORPORATIONS.—In 19 fied small business which is a partnership or S 20 corporation, the election made under this sub- 21 section shall be made at the entity level. 22 ‘‘(5) AGGREGATION 23 ‘‘(A) IN the case of a quali- RULES.— GENERAL.—Except as provided in 24 subparagraph (B), all persons or entities treat- 25 ed as a single taxpayer under subsection (f)(1) L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 25 1 shall be treated as a single taxpayer for pur- 2 poses of this subsection. 3 ‘‘(B) SPECIAL 4 RULES.—For purposes of this subsection and section 3111(f)— 5 ‘‘(i) each of the persons treated as a 6 single taxpayer under subparagraph (A) 7 may separately make the election under 8 paragraph (1) for any taxable year, and 9 ‘‘(ii) the $250,000 amount under 10 paragraph (4)(B)(i) shall be allocated 11 among all persons treated as a single tax- 12 payer under subparagraph (A) in the same 13 manner as under subparagraph (A)(ii) or 14 (B)(ii) of subsection (f)(1), whichever is 15 applicable. 16 ‘‘(6) REGULATIONS.—The Secretary shall pre- 17 scribe such regulations as may be necessary to carry 18 out the purposes of this subsection, including— 19 ‘‘(A) regulations to prevent the avoidance 20 of the purposes of the limitations and aggrega- 21 tion rules under this subsection through the use 22 of successor companies or other means, 23 ‘‘(B) regulations to minimize compliance 24 and record-keeping burdens under this sub- 25 section, and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 26 1 ‘‘(C) regulations for recapturing the ben- 2 efit of credits determined under section 3111(f) 3 in cases where there is a subsequent adjustment 4 to the payroll tax credit portion of the credit 5 determined under subsection (a), including re- 6 quiring amended income tax returns in the 7 cases where there is such an adjustment.’’. 8 (2) CREDIT 9 ALLOWED AGAINST FICA TAXES.— Section 3111 is amended by adding at the end the 10 following new subsection: 11 ‘‘(f) CREDIT FOR RESEARCH EXPENDITURES OF 12 QUALIFIED SMALL BUSINESSES.— 13 ‘‘(1) IN GENERAL.—In the case of a taxpayer 14 who has made an election under section 41(h) for a 15 taxable year, there shall be allowed as a credit 16 against the tax imposed by subsection (a) for the 17 first calendar quarter which begins after the date on 18 which the taxpayer files the return specified in sec- 19 tion 41(h)(4)(A)(ii) an amount equal to the payroll 20 tax 21 41(h)(2). credit portion determined under section 22 ‘‘(2) LIMITATION.—The credit allowed by para- 23 graph (1) shall not exceed the tax imposed by sub- 24 section (a) for any calendar quarter on the wages L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 27 1 paid with respect to the employment of all individ- 2 uals in the employ of the employer. 3 ‘‘(3) CARRYOVER OF UNUSED CREDIT.—If the 4 amount of the credit under paragraph (1) exceeds 5 the limitation of paragraph (2) for any calendar 6 quarter, such excess shall be carried to the suc- 7 ceeding calendar quarter and allowed as a credit 8 under paragraph (1) for such quarter. 9 ‘‘(4) DEDUCTION ALLOWED FOR CREDITED 10 AMOUNTS.—The 11 shall not be taken into account for purposes of de- 12 termining the amount of any deduction allowed 13 under chapter 1 for taxes imposed under subsection 14 (a).’’. 15 (d) EFFECTIVE DATES.— credit allowed under paragraph (1) 16 (1) EXTENSION.—The amendments made by 17 subsection (a) shall apply to shall apply to amounts 18 paid or incurred after December 31, 2014. 19 (2) CREDIT ALLOWED AGAINST ALTERNATIVE 20 MINIMUM TAX IN CASE OF ELIGIBLE SMALL BUSI- 21 NESS.—The 22 shall apply to credits determined for taxable years 23 beginning after December 31, 2015. 24 25 amendments made by subsection (b) (3) TREATMENT OF RESEARCH CREDIT FOR CERTAIN STARTUP COMPANIES.—The amendments L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 28 1 made by subsection (c) shall apply to taxable years 2 beginning after December 31, 2015. 3 SEC. 122. EXTENSION AND MODIFICATION OF EMPLOYER 4 WAGE CREDIT FOR EMPLOYEES WHO ARE AC- 5 TIVE DUTY MEMBERS OF THE UNIFORMED 6 SERVICES. 7 (a) IN GENERAL.—Section 45P is amended by strik- 8 ing subsection (f). 9 (b) APPLICABILITY TO ALL EMPLOYERS.— 10 (1) IN GENERAL.—Section 45P(a) is amended 11 by striking ‘‘, in the case of an eligible small busi- 12 ness employer’’. 13 14 (2) CONFORMING AMENDMENT.—Section 45P(b)(3) is amended to read as follows: 15 ‘‘(3) CONTROLLED GROUPS.—All persons treat- 16 ed as a single employer under subsection (b), (c), 17 (m), or (o) of section 414 shall be treated as a single 18 employer.’’. 19 (c) EFFECTIVE DATE.— 20 (1) EXTENSION.—The amendment made by 21 subsection (a) shall apply to payments made after 22 December 31, 2014. 23 (2) MODIFICATION.—The amendments made by 24 subsection (b) shall apply to taxable years beginning 25 after December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 29 1 SEC. 123. EXTENSION OF 15-YEAR STRAIGHT-LINE COST RE- 2 COVERY FOR QUALIFIED LEASEHOLD IM- 3 PROVEMENTS, 4 BUILDINGS 5 QUALIFIED RETAIL IMPROVEMENTS. 6 (a) QUALIFIED LEASEHOLD IMPROVEMENT PROP- 7 ERTY AND QUALIFIED AND RESTAURANT IMPROVEMENTS, AND QUALIFIED RESTAURANT PROPERTY.—Clauses 8 (iv) and (v) of section 168(e)(3)(E) are each amended by 9 striking ‘‘placed in service before January 1, 2015’’. 10 (b) QUALIFIED RETAIL IMPROVEMENT PROPERTY.— 11 Section 168(e)(3)(E)(ix) is amended by striking ‘‘placed 12 in service after December 31, 2008, and before January 13 1, 2015’’. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to property placed in service after 16 December 31, 2014. 17 SEC. 124. EXTENSION AND MODIFICATION OF INCREASED 18 EXPENSING LIMITATIONS AND TREATMENT 19 OF CERTAIN REAL PROPERTY AS SECTION 20 179 PROPERTY. 21 (a) MADE PERMANENT.— 22 (1) DOLLAR LIMITATION.—Section 179(b)(1) is 23 amended by striking ‘‘shall not exceed—’’ and all 24 that 25 $500,000.’’. follows and inserting ‘‘shall not exceed L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 30 1 (2) REDUCTION LIMITATION.—Section IN 2 179(b)(2) is amended by striking ‘‘exceeds—’’ and 3 all that follows and inserting ‘‘exceeds $2,000,000.’’. 4 (b) COMPUTER SOFTWARE.—Section 5 179(d)(1)(A)(ii) is amended by striking ‘‘, to which section 6 167 applies, and which is placed in service in a taxable 7 year beginning after 2002 and before 2015’’ and inserting 8 ‘‘and to which section 167 applies’’. 9 (c) SPECIAL RULES FOR TREATMENT OF QUALIFIED 10 REAL PROPERTY.— 11 12 (1) EXTENSION FOR 2015.—Section 179(f) is amended— 13 (A) by striking ‘‘2015’’ in paragraph (1) 14 and inserting ‘‘2016’’, 15 (B) by striking ‘‘2014’’ each place it ap- 16 pears in paragraph (4) and inserting ‘‘2015’’, 17 and 18 (C) by striking ‘‘AND 2013’’ in the heading 19 of paragraph (4)(C) and inserting ‘‘2013, 20 2014’’. 21 (2) MADE 22 PERMANENT.—Section AND 179(f), as amended by paragraph (1), is amended— 23 (A) by striking ‘‘beginning after 2009 and 24 before 2016’’ in paragraph (1), and 25 (B) by striking paragraphs (3) and (4). L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 31 1 (d) ELECTION.—Section 179(c)(2) is amended— 2 3 (1) by striking ‘‘may not be revoked’’ and all that follows through ‘‘and before 2015’’, and 4 (2) by striking ‘‘IRREVOCABLE’’ in the heading 5 thereof. 6 (e) AIR CONDITIONING AND HEATING UNITS.—Sec- 7 tion 179(d)(1) is amended by striking ‘‘and shall not in8 clude air conditioning or heating units’’. 9 (f) INFLATION ADJUSTMENT.—Section 179(b) is 10 amended by adding at the end the following new para11 graph: 12 ‘‘(6) INFLATION 13 ‘‘(A) IN ADJUSTMENT.— GENERAL.—In the case of any 14 taxable year beginning after 2015, the dollar 15 amounts in paragraphs (1) and (2) shall each 16 be increased by an amount equal to— 17 ‘‘(i) such dollar amount, multiplied by 18 ‘‘(ii) the cost-of-living adjustment de- 19 termined under section 1(f)(3) for the cal- 20 endar year in which the taxable year be- 21 gins, determined by substituting ‘calendar 22 year 2014’ for ‘calendar year 1992’ in sub- 23 paragraph (B) thereof. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 32 1 ‘‘(B) ROUNDING.—The amount of any in- 2 crease under subparagraph (A) shall be round- 3 ed to the nearest multiple of $10,000.’’. 4 (g) EFFECTIVE DATES.— 5 (1) EXTENSION.—Except as provided in para- 6 graph (2), the amendments made by this section 7 shall apply to taxable years beginning after Decem- 8 ber 31, 2014. 9 (2) MODIFICATIONS.—The amendments made 10 by subsections (c)(2) and (e) shall apply to taxable 11 years beginning after December 31, 2015. 12 SEC. 125. EXTENSION OF TREATMENT OF CERTAIN DIVI- 13 DENDS OF REGULATED INVESTMENT COMPA- 14 NIES. 15 (a) IN GENERAL.—Section 871(k) is amended by 16 striking clause (v) of paragraph (1)(C) and clause (v) of 17 paragraph (2)(C). 18 (b) EFFECTIVE DATE.—The amendments made by 19 this section shall apply to taxable years beginning after 20 December 31, 2014. 21 SEC. 126. EXTENSION OF EXCLUSION OF 100 PERCENT OF 22 GAIN ON CERTAIN SMALL BUSINESS STOCK. 23 (a) IN GENERAL.—Section 1202(a)(4) is amended— 24 (1) by striking ‘‘and before January 1, 2015’’, 25 and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 33 1 (2) by striking ‘‘, 2011, 2012, 2013, AND 2014’’ in 2 the heading thereof and inserting ‘‘AND 3 AFTER’’. 4 (b) EFFECTIVE DATE.—The amendments made by THERE- 5 this section shall apply to stock acquired after December 6 31, 2014. 7 SEC. 127. EXTENSION OF REDUCTION IN S-CORPORATION 8 RECOGNITION PERIOD FOR BUILT-IN GAINS 9 TAX. 10 (a) IN GENERAL.—Section 1374(d)(7) is amended to 11 read as follows: 12 ‘‘(7) RECOGNITION 13 ‘‘(A) IN PERIOD.— GENERAL.—The term ‘recognition 14 period’ means the 5-year period beginning with 15 the 1st day of the 1st taxable year for which 16 the corporation was an S corporation. For pur- 17 poses of applying this section to any amount in- 18 cludible in income by reason of distributions to 19 shareholders pursuant to section 593(e), the 20 preceding sentence shall be applied without re- 21 gard to the phrase ‘5-year’. 22 ‘‘(B) INSTALLMENT SALES.—If an S cor- 23 poration sells an asset and reports the income 24 from the sale using the installment method 25 under section 453, the treatment of all pay- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 34 1 ments received shall be governed by the provi- 2 sions of this paragraph applicable to the taxable 3 year in which such sale was made.’’. 4 (b) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to taxable years beginning after 6 December 31, 2014. 7 SEC. 128. EXTENSION OF SUBPART F EXCEPTION FOR AC- 8 TIVE FINANCING INCOME. 9 (a) INSURANCE BUSINESSES.—Section 953(e) is 10 amended by striking paragraph (10) and by redesignating 11 paragraph (11) as paragraph (10). 12 13 (b) BANKING, FINANCING, NESSES.—Section OR SIMILAR BUSI- 954(h) is amended by striking para- 14 graph (9). 15 (c) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to taxable years of foreign corpora17 tions beginning after December 31, 2014, and to taxable 18 years of United States shareholders with or within which 19 any such taxable year of such foreign corporation ends. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 35 1 PART 4—INCENTIVES FOR REAL ESTATE 2 INVESTMENT 3 SEC. 131. EXTENSION OF MINIMUM LOW-INCOME HOUSING 4 TAX CREDIT RATE FOR NON-FEDERALLY SUB- 5 SIDIZED BUILDINGS. 6 (a) IN GENERAL.—Section 42(b)(2) is amended by 7 striking ‘‘with respect to housing credit dollar amount al8 locations made before January 1, 2015’’. 9 (b) CLERICAL AMENDMENT.—The heading for sec- 10 tion 42(b)(2) is amended by striking ‘‘TEMPORARY 11 IMUM’’ 12 MIN- and inserting ‘‘MINIMUM’’. (c) EFFECTIVE DATES.—The amendments made by 13 this section shall take effect on January 1, 2015. 14 SEC. 132. EXTENSION OF MILITARY HOUSING ALLOWANCE 15 EXCLUSION FOR DETERMINING WHETHER A 16 TENANT IN CERTAIN COUNTIES IS LOW-IN- 17 COME. 18 (a) IN GENERAL.—Section 3005(b) of the Housing 19 Assistance Tax Act of 2008 is amended by striking ‘‘and 20 before January 1, 2015’’ each place it appears. 21 (b) EFFECTIVE DATE.—The amendments made by 22 this section shall take effect as if included in the enact23 ment of section 3005 of the Housing Assistance Tax Act 24 of 2008. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 36 1 SEC. 133. EXTENSION OF RIC QUALIFIED INVESTMENT EN- 2 TITY TREATMENT UNDER FIRPTA. 3 (a) IN GENERAL.—Section 897(h)(4)(A) is amend- 4 ed— 5 (1) by striking clause (ii), and 6 (2) by striking all that precedes ‘‘regulated in- 7 vestment company which’’ and inserting the fol- 8 lowing: 9 ‘‘(A) QUALIFIED INVESTMENT ENTITY.— 10 The term ‘qualified investment entity’ means— 11 ‘‘(i) any real estate investment trust, 12 and 13 ‘‘(ii) any’’. 14 (b) EFFECTIVE DATE.— 15 (1) IN GENERAL.—The amendments made by 16 this section shall take effect on January 1, 2015. 17 Notwithstanding 18 amendments shall not apply with respect to the 19 withholding requirement under section 1445 of the 20 Internal Revenue Code of 1986 for any payment 21 made before the date of the enactment of this Act. 22 (2) AMOUNTS the preceding sentence, such WITHHELD ON OR BEFORE DATE 23 OF ENACTMENT.—In 24 ment company— the case of a regulated invest- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 37 1 (A) which makes a distribution after De- 2 cember 31, 2014, and before the date of the en- 3 actment of this Act, and 4 (B) which would (but for the second sen- 5 tence of paragraph (1)) have been required to 6 withhold with respect to such distribution under 7 section 1445 of such Code, 8 such investment company shall not be liable to any 9 person to whom such distribution was made for any 10 amount so withheld and paid over to the Secretary 11 of the Treasury. Subtitle B—Extensions Through 2019 12 13 14 SEC. 141. EXTENSION OF NEW MARKETS TAX CREDIT. 15 (a) IN GENERAL.—Section 45D(f)(1)(G) is amended 16 by striking ‘‘for 2010, 2011, 2012, 2013, and 2014’’ and 17 inserting ‘‘for each of calendar years 2010 through 2019’’. 18 (b) CARRYOVER OF UNUSED LIMITATION.—Section 19 45D(f)(3) is amended by striking ‘‘2019’’ and inserting 20 ‘‘2024’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to calendar years beginning after 23 December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 38 1 SEC. 142. EXTENSION AND MODIFICATION OF WORK OP- 2 PORTUNITY TAX CREDIT. 3 (a) IN GENERAL.—Section 51(c)(4) is amended by 4 striking ‘‘December 31, 2014’’ and inserting ‘‘December 5 31, 2019’’. 6 7 (b) CREDIT MENT FOR HIRING LONG-TERM UNEMPLOY- RECIPIENTS.— 8 (1) IN GENERAL.—Section 51(d)(1) is amended 9 by striking ‘‘or’’ at the end of subparagraph (H), by 10 striking the period at the end of subparagraph (I) 11 and inserting ‘‘, or’’, and by adding at the end the 12 following new subparagraph: 13 ‘‘(J) a qualified long-term unemployment 14 recipient.’’. 15 (2) QUALIFIED 16 RECIPIENT.—Section 17 the end the following new paragraph: 18 LONG-TERM UNEMPLOYMENT 51(d) is amended by adding at ‘‘(15) QUALIFIED LONG-TERM UNEMPLOYMENT 19 RECIPIENT.—The 20 ployment recipient’ means any individual who is cer- 21 tified by the designated local agency as being in a 22 period of unemployment which— 23 term ‘qualified long-term unem- ‘‘(A) is not less than 27 consecutive weeks, 24 and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 39 1 ‘‘(B) includes a period in which the indi- 2 vidual was receiving unemployment compensa- 3 tion under State or Federal law.’’. 4 (c) EFFECTIVE DATES.— 5 (1) EXTENSION.—The amendment made by 6 subsection (a) shall apply to individuals who begin 7 work for the employer after December 31, 2014. 8 (2) MODIFICATION.—The amendments made by 9 subsection (b) shall apply to individuals who begin 10 work for the employer after December 31, 2015. 11 SEC. 143. EXTENSION AND MODIFICATION OF BONUS DE- 12 13 PRECIATION. (a) EXTENDED FOR 2015.— 14 15 (1) IN GENERAL.—Section 168(k)(2) is amend- ed— 16 (A) by striking ‘‘January 1, 2016’’ in sub- 17 paragraph (A)(iv) and inserting ‘‘January 1, 18 2017’’, and 19 (B) by striking ‘‘January 1, 2015’’ each 20 place it appears and inserting ‘‘January 1, 21 2016’’. 22 (2) SPECIAL 23 CONTRACTS.—Section 24 by striking ‘‘January 1, 2015 (January 1, 2016’’ 25 and inserting ‘‘January 1, 2016 (January 1, 2017’’. RULE FOR FEDERAL LONG-TERM 460(c)(6)(B)(ii) is amended L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 40 1 2 (3) EXTENSION OF ELECTION TO ACCELERATE AMT CREDIT IN LIEU OF BONUS DEPRECIATION.— 3 (A) IN GENERAL.—Section 4 168(k)(4)(D)(iii)(II) is amended by striking 5 ‘‘January 1, 2015’’ and inserting ‘‘January 1, 6 2016’’. 7 (B) ROUND 5 EXTENSION PROPERTY.— 8 Section 168(k)(4) is amended by adding at the 9 end the following new subparagraph: 10 ‘‘(L) SPECIAL 11 RULES FOR ROUND 5 EX- TENSION PROPERTY.— 12 ‘‘(i) IN GENERAL.—In the case of 13 round 5 extension property, in applying 14 this paragraph to any taxpayer— 15 ‘‘(I) the limitation described in 16 subparagraph (B)(i) and the business 17 credit increase amount under sub- 18 paragraph (E)(iii) thereof shall not 19 apply, and 20 ‘‘(II) the bonus depreciation 21 amount, maximum amount, and max- 22 imum increase amount shall be com- 23 puted separately from amounts com- 24 puted with respect to eligible qualified L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 41 1 property which is not round 5 exten- 2 sion property. 3 ‘‘(ii) ELECTION.— 4 ‘‘(I) A taxpayer who has an elec- 5 tion in effect under this paragraph for 6 round 4 extension property shall be 7 treated as having an election in effect 8 for round 5 extension property unless 9 the taxpayer elects to not have this 10 paragraph apply to round 5 extension 11 property. 12 ‘‘(II) A taxpayer who does not 13 have an election in effect under this 14 paragraph for round 4 extension prop- 15 erty may elect to have this paragraph 16 apply to round 5 extension property. 17 ‘‘(iii) ROUND 5 EXTENSION PROP- 18 ERTY.—For 19 graph, the term ‘round 5 extension prop- 20 erty’ means property which is eligible 21 qualified property solely by reason of the 22 extension of the application of the special 23 allowance under paragraph (1) pursuant to 24 the 25 143(a)(1) of the Protecting Americans purposes of this subpara- amendments made by section L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 42 1 from Tax Hikes Act of 2015 (and the ap- 2 plication of such extension to this para- 3 graph pursuant to the amendment made 4 by section 143(a)(3) of such Act).’’. 5 (4) CONFORMING AMENDMENTS.— 6 (A) The heading for section 168(k) is 7 amended by striking ‘‘JANUARY 1, 2015’’ and 8 inserting ‘‘JANUARY 1, 2016’’. 9 (B) The heading for section 10 168(k)(2)(B)(ii) is amended by striking ‘‘PRE- 11 JANUARY 1, 2015’’ 12 1, 2016’’. 13 (5) EFFECTIVE 14 (A) IN and inserting ‘‘PRE-JANUARY DATE.— GENERAL.—Except as provided in 15 subparagraph (B), the amendments made by 16 this subsection shall apply to property placed in 17 service after December 31, 2014, in taxable 18 years ending after such date. 19 (B) ELECTION TO ACCELERATE AMT 20 CREDIT.—The 21 (3) shall apply to taxable years ending after 22 December 31, 2014. 23 (b) EXTENDED amendments made by paragraph AND MODIFIED FOR 2016 THROUGH 24 2019.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 43 1 (1) IN GENERAL.—Section 168(k)(2), as 2 amended by subsection (a), is amended to read as 3 follows: 4 5 ‘‘(2) QUALIFIED PROPERTY.—For purposes of this subsection— 6 ‘‘(A) IN 7 GENERAL.—The term ‘qualified property’ means property— 8 ‘‘(i)(I) to which this section applies 9 which has a recovery period of 20 years or 10 less, 11 ‘‘(II) which is computer software (as 12 defined in section 167(f)(1)(B)) for which 13 a deduction is allowable under section 14 167(a) without regard to this subsection, 15 ‘‘(III) which is water utility property, 16 or 17 ‘‘(IV) which is qualified improvement 18 property, 19 ‘‘(ii) the original use of which com- 20 mences with the taxpayer, and 21 ‘‘(iii) which is placed in service by the 22 taxpayer before January 1, 2020. 23 ‘‘(B) CERTAIN PROPERTY HAVING LONGER 24 PRODUCTION PERIODS TREATED AS QUALIFIED 25 PROPERTY.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 44 1 ‘‘(i) IN GENERAL.—The term ‘quali- 2 fied property’ includes any property if such 3 property— 4 ‘‘(I) meets the requirements of 5 clauses (i) and (ii) of subparagraph 6 (A), 7 ‘‘(II) is placed in service by the 8 taxpayer before January 1, 2021, 9 ‘‘(III) is acquired by the taxpayer 10 (or acquired pursuant to a written 11 contract entered into) before January 12 1, 2020, 13 ‘‘(IV) has a recovery period of at 14 least 10 years or is transportation 15 property, 16 ‘‘(V) is subject to section 263A, 17 and 18 ‘‘(VI) meets the requirements of 19 clause (iii) of section 263A(f)(1)(B) 20 (determined as if such clause also ap- 21 plies to property which has a long 22 useful life (within the meaning of sec- 23 tion 263A(f))). 24 ‘‘(ii) ONLY 25 PRE-JANUARY 1, 2020 BASIS ELIGIBLE FOR ADDITIONAL ALLOW- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 45 1 ANCE.—In 2 qualified property solely by reason of 3 clause (i), paragraph (1) shall apply only 4 to the extent of the adjusted basis thereof 5 attributable to manufacture, construction, 6 or production before January 1, 2020. 7 the case of property which is ‘‘(iii) TRANSPORTATION PROPERTY.— 8 For purposes of this subparagraph, the 9 term ‘transportation property’ means tan- 10 gible personal property used in the trade 11 or business of transporting persons or 12 property. 13 ‘‘(iv) 14 GRAPH.—This 15 apply to any property which is described in 16 subparagraph (C). 17 ‘‘(C) 18 APPLICATION subparagraph CERTAIN SUBPARA- OF shall AIRCRAFT.—The not term ‘qualified property’ includes property— 19 ‘‘(i) which meets the requirements of 20 subparagraph (A)(ii) and subclauses (II) 21 and (III) of subparagraph (B)(i), 22 ‘‘(ii) which is an aircraft which is not 23 a transportation property (as defined in 24 subparagraph (B)(iii)) other than for agri- 25 cultural or firefighting purposes, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 46 1 ‘‘(iii) which is purchased and on which 2 such purchaser, at the time of the contract 3 for purchase, has made a nonrefundable 4 deposit of the lesser of— 5 ‘‘(I) 10 percent of the cost, or 6 ‘‘(II) $100,000, and 7 ‘‘(iv) which has— 8 ‘‘(I) an estimated production pe- 9 riod exceeding 4 months, and 10 ‘‘(II) a cost exceeding $200,000. 11 ‘‘(D) EXCEPTION FOR ALTERNATIVE DE- 12 PRECIATION PROPERTY.—The 13 property’ shall not include any property to 14 which the alternative depreciation system under 15 subsection (g) applies, determined— term ‘qualified 16 ‘‘(i) without regard to paragraph (7) 17 of subsection (g) (relating to election to 18 have system apply), and 19 ‘‘(ii) after application of section 20 280F(b) (relating to listed property with 21 limited business use). 22 ‘‘(E) SPECIAL 23 ‘‘(i) RULES.— SELF-CONSTRUCTED PROP- 24 ERTY.—In 25 turing, constructing, or producing property the case of a taxpayer manufac- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 47 1 for the taxpayer’s own use, the require- 2 ments of subclause (III) of subparagraph 3 (B)(i) shall be treated as met if the tax- 4 payer begins manufacturing, constructing, 5 or producing the property before January 6 1, 2020. 7 ‘‘(ii) SALE-LEASEBACKS.—For pur- 8 poses of clause (iii) and subparagraph 9 (A)(ii), if property is— 10 ‘‘(I) originally placed in service 11 by a person, and 12 ‘‘(II) sold and leased back by 13 such person within 3 months after the 14 date such property was originally 15 placed in service, 16 such property shall be treated as originally 17 placed in service not earlier than the date 18 on which such property is used under the 19 leaseback referred to in subclause (II). 20 ‘‘(iii) SYNDICATION.—For purposes of 21 subparagraph (A)(ii), if— 22 ‘‘(I) property is originally placed 23 in service by the lessor of such prop- 24 erty, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 48 1 ‘‘(II) such property is sold by 2 such lessor or any subsequent pur- 3 chaser within 3 months after the date 4 such property was originally placed in 5 service (or, in the case of multiple 6 units of property subject to the same 7 lease, within 3 months after the date 8 the final unit is placed in service, so 9 long as the period between the time 10 the first unit is placed in service and 11 the time the last unit is placed in 12 service does not exceed 12 months), 13 and 14 ‘‘(III) the user of such property 15 after the last sale during such 3- 16 month period remains the same as 17 when such property was originally 18 placed in service, 19 such property shall be treated as originally 20 placed in service not earlier than the date 21 of such last sale. 22 ‘‘(F) 23 COORDINATION 280F.—For WITH SECTION purposes of section 280F— 24 ‘‘(i) AUTOMOBILES.—In the case of a 25 passenger automobile (as defined in section L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 49 1 280F(d)(5)) which is qualified property, 2 the Secretary shall increase the limitation 3 under section 280F(a)(1)(A)(i) by $8,000. 4 ‘‘(ii) LISTED PROPERTY.—The deduc- 5 tion allowable under paragraph (1) shall be 6 taken into account in computing any re- 7 capture amount under section 280F(b)(2). 8 ‘‘(iii) PHASE DOWN.—In the case of a 9 passenger automobile placed in service by 10 the taxpayer after December 31, 2017, 11 clause (i) shall be applied by substituting 12 for ‘$8,000’— 13 ‘‘(I) in the case of an automobile 14 placed in service during 2018, $6,400, 15 and 16 ‘‘(II) in the case of an automobile 17 placed in service during 2019, $4,800. 18 ‘‘(G) DEDUCTION ALLOWED IN COMPUTING 19 MINIMUM TAX.—For 20 alternative minimum taxable income under sec- 21 tion 55, the deduction under section 167 for 22 qualified property shall be determined without 23 regard to any adjustment under section 56.’’. 24 (2) QUALIFIED 25 purposes of determining IMPROVEMENT PROPERTY.— Section 168(k)(3) is amended to read as follows: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 50 1 2 ‘‘(3) QUALIFIED IMPROVEMENT PROPERTY.— For purposes of this subsection— 3 ‘‘(A) IN GENERAL.—The term ‘qualified 4 improvement property’ means any improvement 5 to an interior portion of a building which is 6 nonresidential real property if such improve- 7 ment is placed in service after the date such 8 building was first placed in service. 9 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN- 10 CLUDED.—Such 11 provement for which the expenditure is attrib- 12 utable to— term shall not include any im- 13 ‘‘(i) the enlargement of the building, 14 ‘‘(ii) any elevator or escalator, or 15 ‘‘(iii) the internal structural frame- 16 work of the building.’’. 17 (3) EXPANSION OF ELECTION TO ACCELERATE 18 AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 19 Section 168(k)(4), as amended by subsection (a), is 20 amended to read as follows: 21 22 ‘‘(4) ELECTION TO ACCELERATE AMT CREDITS IN LIEU OF BONUS DEPRECIATION.— 23 ‘‘(A) IN GENERAL.—If a corporation elects 24 to have this paragraph apply for any taxable 25 year— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 51 1 ‘‘(i) paragraphs (1) and (2)(F) shall 2 not apply to any qualified property placed 3 in service during such taxable year, 4 ‘‘(ii) the applicable depreciation meth- 5 od used under this section with respect to 6 such property shall be the straight line 7 method, and 8 ‘‘(iii) the limitation imposed by section 9 53(c) for such taxable year shall be in- 10 creased by the bonus depreciation amount 11 which is determined for such taxable year 12 under subparagraph (B). 13 ‘‘(B) BONUS 14 DEPRECIATION AMOUNT.— For purposes of this paragraph— 15 ‘‘(i) IN GENERAL.—The bonus depre- 16 ciation amount for any taxable year is an 17 amount equal to 20 percent of the excess 18 (if any) of— 19 ‘‘(I) the aggregate amount of de- 20 preciation which would be allowed 21 under this section for qualified prop- 22 erty placed in service by the taxpayer 23 during such taxable year if paragraph 24 (1) applied to all such property (and, 25 in the case of any such property which L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 52 1 is a passenger automobile (as defined 2 in section 280F(d)(5)), if paragraph 3 (2)(F) applied to such automobile), 4 over 5 ‘‘(II) the aggregate amount of 6 depreciation which would be allowed 7 under this section for qualified prop- 8 erty placed in service by the taxpayer 9 during such taxable year if para- 10 graphs (1) and (2)(F) did not apply 11 to any such property. 12 The aggregate amounts determined under 13 subclauses (I) and (II) shall be determined 14 without regard to any election made under 15 subparagraph (A) or subsection (b)(2)(D), 16 (b)(3)(D), or (g)(7). 17 ‘‘(ii) LIMITATION.—The bonus depre- 18 ciation amount for any taxable year shall 19 not exceed the lesser of— 20 ‘‘(I) 50 percent of the minimum 21 tax credit under section 53(b) for the 22 first taxable year ending after Decem- 23 ber 31, 2015, or 24 ‘‘(II) the minimum tax credit 25 under section 53(b) for such taxable L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 53 1 year determined by taking into ac- 2 count only the adjusted net minimum 3 tax for taxable years ending before 4 January 1, 2016 (determined by 5 treating credits as allowed on a first- 6 in, first-out basis). 7 ‘‘(iii) AGGREGATION RULE.—All cor- 8 porations which are treated as a single em- 9 ployer under section 52(a) shall be treat- 10 ed— 11 ‘‘(I) as 1 taxpayer for purposes 12 of this paragraph, and 13 ‘‘(II) as having elected the appli- 14 cation of this paragraph if any such 15 corporation so elects. 16 ‘‘(C) CREDIT REFUNDABLE.—For pur- 17 poses of section 6401(b), the aggregate increase 18 in the credits allowable under part IV of sub- 19 chapter A for any taxable year resulting from 20 the application of this paragraph shall be treat- 21 ed as allowed under subpart C of such part 22 (and not any other subpart). 23 ‘‘(D) OTHER RULES.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 54 1 ‘‘(i) ELECTION.—Any election under 2 this paragraph may be revoked only with 3 the consent of the Secretary. 4 ‘‘(ii) PARTNERSHIPS WITH ELECTING 5 PARTNERS.—In 6 which is a partner in a partnership and 7 which makes an election under subpara- 8 graph (A) for the taxable year, for pur- 9 poses of determining such corporation’s 10 distributive share of partnership items 11 under section 702 for such taxable year— 12 ‘‘(I) paragraphs (1) and (2)(F) 13 shall not apply to any qualified prop- 14 erty placed in service during such tax- 15 able year, and the case of a corporation 16 ‘‘(II) the applicable depreciation 17 method used under this section with 18 respect to such property shall be the 19 straight line method. 20 ‘‘(iii) CERTAIN PARTNERSHIPS.—In 21 the case of a partnership in which more 22 than 50 percent of the capital and profits 23 interests are owned (directly or indirectly) 24 at all times during the taxable year by 1 25 corporation (or by corporations treated as L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 55 1 1 taxpayer under subparagraph (B)(iii)), 2 each partner shall compute its bonus de- 3 preciation amount under clause (i) of sub- 4 paragraph (B) by taking into account its 5 distributive share of the amounts deter- 6 mined by the partnership under subclauses 7 (I) and (II) of such clause for the taxable 8 year of the partnership ending with or 9 within the taxable year of the partner.’’. 10 (4) SPECIAL RULES FOR CERTAIN 11 BEARING FRUITS AND NUTS.—Section 12 amended— PLANTS 168(k) is 13 (A) by striking paragraph (5), and 14 (B) by inserting after paragraph (4) the 15 following new paragraph: 16 ‘‘(5) SPECIAL 17 RULES FOR CERTAIN PLANTS BEARING FRUITS AND NUTS.— 18 ‘‘(A) IN GENERAL.—In the case of any 19 specified plant which is planted before January 20 1, 2020, or is grafted before such date to a 21 plant that has already been planted, by the tax- 22 payer in the ordinary course of the taxpayer’s 23 farming 24 263A(e)(4)) during a taxable year for which the business (as defined in section L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 56 1 taxpayer has elected the application of this 2 paragraph— 3 ‘‘(i) a depreciation deduction equal to 4 50 percent of the adjusted basis of such 5 specified plant shall be allowed under sec- 6 tion 167(a) for the taxable year in which 7 such specified plant is so planted or graft- 8 ed, and 9 ‘‘(ii) the adjusted basis of such speci- 10 fied plant shall be reduced by the amount 11 of such deduction. 12 ‘‘(B) SPECIFIED PLANT.—For purposes of 13 this paragraph, the term ‘specified plant’ 14 means— 15 ‘‘(i) any tree or vine which bears 16 fruits or nuts, and 17 ‘‘(ii) any other plant which will have 18 more than one yield of fruits or nuts and 19 which generally has a pre-productive period 20 of more than 2 years from the time of 21 planting or grafting to the time at which 22 such plant begins bearing fruits or nuts. 23 Such term shall not include any property which 24 is planted or grafted outside of the United 25 States. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 57 1 ‘‘(C) ELECTION REVOCABLE ONLY WITH 2 CONSENT.—An 3 may be revoked only with the consent of the 4 Secretary. election under this paragraph 5 ‘‘(D) ADDITIONAL 6 CLAIMED ONLY ONCE.—If 7 plies to any specified plant, such specified plant 8 shall not be treated as qualified property in the 9 taxable year in which placed in service. 10 ‘‘(E) DEDUCTION DEPRECIATION MAY BE this paragraph ap- ALLOWED IN COMPUTING 11 MINIMUM TAX.—Rules 12 paragraph (2)(G) shall apply for purposes of 13 this paragraph. 14 ‘‘(F) PHASE similar to the rules of DOWN.—In the case of a spec- 15 ified plant which is planted after December 31, 16 2017 (or is grafted to a plant that has already 17 been planted before such date), subparagraph 18 (A)(i) shall be applied by substituting for ‘50 19 percent’— 20 ‘‘(i) in the case of a plant which is 21 planted (or so grafted) in 2018, ‘40 per- 22 cent’, and 23 ‘‘(ii) in the case of a plant which is 24 planted (or so grafted) during 2019, ‘30 25 percent’.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 58 1 (5) PHASE DOWN OF BONUS DEPRECIATION.— 2 Section 168(k) is amended by adding at the end the 3 following new paragraph: 4 ‘‘(6) PHASE DOWN.—In the case of qualified 5 property placed in service by the taxpayer after De- 6 cember 31, 2017, paragraph (1)(A) shall be applied 7 by substituting for ‘50 percent’— 8 ‘‘(A) in the case of property placed in serv- 9 ice in 2018 (or in the case of property placed 10 in service in 2019 and described in paragraph 11 (2)(B) or (C) (determined by substituting 12 ‘2019’ for ‘2020’ in paragraphs (2)(B)(i)(III) 13 and (ii) and paragraph (2)(E)(i)), ‘40 percent’, 14 ‘‘(B) in the case of property placed in serv- 15 ice in 2019 (or in the case of property placed 16 in service in 2020 and described in paragraph 17 (2)(B) or (C), ‘30 percent’.’’. 18 (6) CONFORMING 19 AMENDMENTS.— (A) Section 168(e)(6) is amended— 20 (i) by redesignating subparagraphs 21 (A) and (B) as subparagraphs (D) and 22 (E), respectively, 23 (ii) by striking all that precedes sub- 24 paragraph (D) (as so redesignated) and in- 25 serting the following: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 59 1 2 ‘‘(6) QUALIFIED PROPERTY.—For 3 LEASEHOLD IMPROVEMENT purposes of this subsection— ‘‘(A) IN GENERAL.—The term ‘qualified 4 leasehold improvement property’ means any im- 5 provement to an interior portion of a building 6 which is nonresidential real property if— 7 ‘‘(i) such improvement is made under 8 or pursuant to a lease (as defined in sub- 9 section (h)(7))— 10 ‘‘(I) by the lessee (or any subles- 11 see) of such portion, or 12 ‘‘(II) by the lessor of such por- 13 tion, 14 ‘‘(ii) such portion is to be occupied ex- 15 clusively by the lessee (or any sublessee) of 16 such portion, and 17 ‘‘(iii) such improvement is placed in 18 service more than 3 years after the date 19 the building was first placed in service. 20 ‘‘(B) CERTAIN IMPROVEMENTS NOT IN- 21 CLUDED.—Such 22 provement for which the expenditure is attrib- 23 utable to— term shall not include any im- 24 ‘‘(i) the enlargement of the building, 25 ‘‘(ii) any elevator or escalator, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 60 1 ‘‘(iii) any structural component bene- 2 fitting a common area, or 3 ‘‘(iv) the internal structural frame- 4 work of the building. 5 ‘‘(C) DEFINITIONS 6 AND SPECIAL RULES.— For purposes of this paragraph— 7 ‘‘(i) COMMITMENT TO LEASE TREAT- 8 ED AS LEASE.—A 9 into a lease shall be treated as a lease, and 10 the parties to such commitment shall be 11 treated as lessor and lessee, respectively. 12 ‘‘(ii) RELATED commitment to enter PERSONS.—A lease be- 13 tween related persons shall not be consid- 14 ered a lease. For purposes of the preceding 15 sentence, 16 means— the term ‘related persons’ 17 ‘‘(I) members of an affiliated 18 group (as defined in section 1504), 19 and 20 ‘‘(II) persons having a relation- 21 ship described in subsection (b) of 22 section 267; except that, for purposes 23 of this clause, the phrase ‘80 percent 24 or more’ shall be substituted for the 25 phrase ‘more than 50 percent’ each L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 61 1 place it appears in such subsection.’’, 2 and 3 (iii) by striking ‘‘subparagraph (A)’’ 4 in subparagraph (E) (as so redesignated) 5 and inserting ‘‘subparagraph (D)’’. 6 (B) Section 168(e)(7)(B) is amended by 7 striking ‘‘qualified leasehold improvement prop- 8 erty’’ and inserting ‘‘qualified improvement 9 property’’. 10 (C) Section 168(e)(8) is amended by strik- 11 ing subparagraph (D). 12 (D) Section 168(k), as amended by the 13 preceding provisions of this section, is amended 14 by adding at the end the following new para- 15 graph: 16 ‘‘(7) ELECTION OUT.—If a taxpayer makes an 17 election under this paragraph with respect to any 18 class of property for any taxable year, paragraphs 19 (1) and (2)(F) shall not apply to any qualified prop- 20 erty in such class placed in service during such tax- 21 able year. An election under this paragraph may be 22 revoked only with the consent of the Secretary.’’. 23 (E) Section 168(l)(3) is amended— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 62 1 (i) by striking ‘‘section 168(k)’’ in 2 subparagraph (A) and inserting ‘‘sub- 3 section (k)’’, and 4 (ii) by striking ‘‘section 5 168(k)(2)(D)(i)’’ in subparagraph (B) and 6 inserting ‘‘subsection (k)(2)(D)’’. 7 (F) Section 168(l)(4) is amended by strik- 8 ing ‘‘subparagraph (E) of section 168(k)(2)’’ 9 and all that follows and inserting ‘‘subsection 10 (k)(2)(E) shall apply.’’. 11 (G) Section 168(l)(5) is amended by strik- 12 ing ‘‘section 168(k)(2)(G)’’ and inserting ‘‘sub- 13 section (k)(2)(G)’’. 14 (H) Section 263A(c) is amended by adding 15 at the end the following new paragraph: 16 ‘‘(7) COORDINATION WITH SECTION 17 168(k)(5).—This section shall not apply to any 18 amount allowed as a deduction by reason of section 19 168(k)(5) (relating to special rules for certain plants 20 bearing fruits and nuts).’’. 21 (I) Section 460(c)(6)(B)(ii), as amended 22 by subsection (a), is amended to read as fol- 23 lows: 24 ‘‘(ii) is placed in service before Janu- 25 ary 1, 2020 (January 1, 2021 in the case L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 63 1 of 2 168(k)(2)(B)).’’. 3 (J) Section 168(k), as amended by sub- 4 section (a), is amended by striking ‘‘AND BE- 5 FORE 6 and inserting ‘‘AND BEFORE JANUARY 1, 7 2020’’. 8 (7) EFFECTIVE 9 property described in section JANUARY 1, 2016’’ in the heading thereof (A) IN DATES.— GENERAL.—Except as otherwise 10 provided in this paragraph, the amendments 11 made by this subsection shall apply to property 12 placed in service after December 31, 2015, in 13 taxable years ending after such date. 14 (B) EXPANSION OF ELECTION TO ACCEL- 15 ERATE AMT CREDITS IN LIEU OF BONUS DE- 16 PRECIATION.—The 17 graph (3) shall apply to taxable years ending 18 after December 31, 2015, except that in the 19 case of any taxable year beginning before Janu- 20 ary 1, 2016, and ending after December 31, 21 2015, 22 168(k)(4)(B)(ii) of the Internal Revenue Code 23 of 1986 (as amended by this section) shall be 24 the sum of— 25 the amendments made by para- limitation under section (i) the product of— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00063 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 64 1 (I) the maximum increase 2 amount (within the meaning of sec- 3 tion 168(k)(4)(C)(iii) of such Code, as 4 in effect before the amendments made 5 by this subsection), multiplied by 6 (II) a fraction the numerator of 7 which is the number of days in the 8 taxable year before January 1, 2016, 9 and the denominator of which is the 10 number of days in the taxable year, 11 plus 12 (ii) the product of— 13 (I) such limitation (determined 14 without regard to this subparagraph), 15 multiplied by 16 (II) a fraction the numerator of 17 which is the number of days in the 18 taxable year after December 31, 2015, 19 and the denominator of which is the 20 number of days in the taxable year. 21 (C) SPECIAL RULES FOR CERTAIN PLANTS 22 BEARING FRUITS AND NUTS.—The 23 made by paragraph (4) (other than subpara- 24 graph (A) thereof) shall apply to specified 25 plants (as defined in section 168(k)(5)(B) of amendments L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 65 1 the Internal Revenue Code of 1986, as amended 2 by this subsection) planted or grafted after De- 3 cember 31, 2015. 4 SEC. 144. EXTENSION OF LOOK-THRU TREATMENT OF PAY- 5 MENTS 6 FOREIGN CORPORATIONS UNDER FOREIGN 7 PERSONAL HOLDING COMPANY RULES. 8 BETWEEN RELATED CONTROLLED (a) IN GENERAL.—Section 954(c)(6)(C) is amended 9 by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 10 2020’’. 11 (b) EFFECTIVE DATE.—The amendment made by 12 this section shall apply to taxable years of foreign corpora13 tions beginning after December 31, 2014, and to taxable 14 years of United States shareholders with or within which 15 such taxable years of foreign corporations end. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 66 2 Subtitle C—Extensions Through 2016 3 PART 1—TAX RELIEF FOR FAMILIES AND 4 INDIVIDUALS 5 SEC. 151. EXTENSION AND MODIFICATION OF EXCLUSION 6 FROM GROSS INCOME OF DISCHARGE OF 7 QUALIFIED PRINCIPAL RESIDENCE INDEBT- 8 EDNESS. 1 9 (a) EXTENSION.—Section 108(a)(1)(E) is amended 10 by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 11 2017’’. 12 (b) MODIFICATION.—Section 108(a)(1)(E), as 13 amended by subsection (a), is amended by striking ‘‘dis14 charged before’’ and all that follows and inserting ‘‘dis15 charged— 16 ‘‘(i) before January 1, 2017, or 17 ‘‘(ii) subject to an arrangement that 18 is entered into and evidenced in writing be- 19 fore January 1, 2017.’’. 20 (c) EFFECTIVE DATES.— 21 (1) EXTENSION.—The amendment made by 22 subsection (a) shall apply to discharges of indebted- 23 ness after December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 67 1 (2) MODIFICATION.—The amendment made by 2 subsection (b) shall apply to discharges of indebted- 3 ness after December 31, 2015. 4 SEC. 152. EXTENSION OF MORTGAGE INSURANCE PRE- 5 MIUMS TREATED AS QUALIFIED RESIDENCE 6 INTEREST. 7 (a) IN GENERAL.—Subclause (I) of section 8 163(h)(3)(E)(iv) is amended by striking ‘‘December 31, 9 2014’’ and inserting ‘‘December 31, 2016’’. 10 (b) EFFECTIVE DATE.—The amendment made by 11 this section shall apply to amounts paid or accrued after 12 December 31, 2014. 13 SEC. 153. EXTENSION OF ABOVE-THE-LINE DEDUCTION FOR 14 QUALIFIED 15 PENSES. 16 TUITION AND RELATED EX- (a) IN GENERAL.—Section 222(e) is amended by 17 striking ‘‘December 31, 2014’’ and inserting ‘‘December 18 31, 2016’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to taxable years beginning after 21 December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 68 1 PART 2—INCENTIVES FOR GROWTH, JOBS, 2 INVESTMENT, AND INNOVATION 3 SEC. 161. EXTENSION OF INDIAN EMPLOYMENT TAX CRED- 4 IT. 5 (a) IN GENERAL.—Section 45A(f) is amended by 6 striking ‘‘December 31, 2014’’ and inserting ‘‘December 7 31, 2016’’. 8 (b) EFFECTIVE DATE.—The amendment made by 9 this section shall apply to taxable years beginning after 10 December 31, 2014. 11 SEC. 162. EXTENSION AND MODIFICATION OF RAILROAD 12 13 TRACK MAINTENANCE CREDIT. (a) EXTENSION.—Section 45G(f) is amended by 14 striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 15 2017’’. 16 (b) MODIFICATION.—Section 45G(d) is amended by 17 striking ‘‘January 1, 2005,’’ and inserting ‘‘January 1, 18 2015,’’. 19 (c) EFFECTIVE DATES.— 20 (1) EXTENSION.—The amendment made by 21 subsection (a) shall apply to expenditures paid or in- 22 curred in taxable years beginning after December 23 31, 2014. 24 (2) MODIFICATION.—The amendment made by 25 subsection (b) shall apply to expenditures paid or in- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 69 1 curred in taxable years beginning after December 2 31, 2015. 3 SEC. 163. EXTENSION OF MINE RESCUE TEAM TRAINING 4 CREDIT. 5 (a) IN GENERAL.—Section 45N(e) is amended by 6 striking ‘‘December 31, 2014’’ and inserting ‘‘December 7 31, 2016’’. 8 (b) EFFECTIVE DATE.—The amendment made by 9 this section shall apply to taxable years beginning after 10 December 31, 2014. 11 SEC. 164. EXTENSION OF QUALIFIED ZONE ACADEMY 12 BONDS. 13 (a) EXTENSION.—Section 54E(c)(1) is amended by 14 striking ‘‘and 2014’’ and inserting ‘‘2014, 2015, and 15 2016’’. 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall apply to obligations issued after Decem18 ber 31, 2014. 19 SEC. 165. EXTENSION OF CLASSIFICATION OF CERTAIN 20 RACE HORSES AS 3-YEAR PROPERTY. 21 (a) IN GENERAL.—Section 168(e)(3)(A)(i) is amend- 22 ed— 23 24 (1) by striking ‘‘January 1, 2015’’ in subclause (I) and inserting ‘‘January 1, 2017’’, and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 70 1 (2) by striking ‘‘December 31, 2014’’ in sub- 2 clause (II) and inserting ‘‘December 31, 2016’’. 3 (b) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to property placed in service after 5 December 31, 2014. 6 SEC. 166. EXTENSION OF 7-YEAR RECOVERY PERIOD FOR 7 MOTORSPORTS 8 PLEXES. 9 ENTERTAINMENT COM- (a) IN GENERAL.—Section 168(i)(15)(D) is amended 10 by striking ‘‘December 31, 2014’’ and inserting ‘‘Decem11 ber 31, 2016’’. 12 (b) EFFECTIVE DATE.—The amendment made by 13 this section shall apply to property placed in service after 14 December 31, 2014. 15 SEC. 167. EXTENSION AND MODIFICATION OF ACCELER- 16 ATED DEPRECIATION FOR BUSINESS PROP- 17 ERTY ON AN INDIAN RESERVATION. 18 (a) IN GENERAL.—Section 168(j)(8) is amended by 19 striking ‘‘December 31, 2014’’ and inserting ‘‘December 20 31, 2016’’. 21 (b) ELECTION TO HAVE SPECIAL RULES NOT 22 APPLY.—Section 168(j) is amended by redesignating 23 paragraph (8), as amended by subsection (a), as para24 graph (9), and by inserting after paragraph (7) the fol25 lowing new paragraph: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 71 1 ‘‘(8) ELECTION OUT.—If a taxpayer makes an 2 election under this paragraph with respect to any 3 class of property for any taxable year, this sub- 4 section shall not apply to all property in such class 5 placed in service during such taxable year. Such 6 election, once made, shall be irrevocable.’’. 7 (c) EFFECTIVE DATES.— 8 (1) EXTENSION.—The amendment made by 9 subsection (a) shall apply to property placed in serv- 10 ice after December 31, 2014. 11 (2) MODIFICATION.—The amendments made by 12 subsection (b) shall apply to taxable years beginning 13 after December 31, 2015. 14 SEC. 168. EXTENSION OF ELECTION TO EXPENSE MINE 15 16 SAFETY EQUIPMENT. (a) IN GENERAL.—Section 179E(g) is amended by 17 striking ‘‘December 31, 2014’’ and inserting ‘‘December 18 31, 2016’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to property placed in service after 21 December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 72 1 SEC. 169. EXTENSION OF SPECIAL EXPENSING RULES FOR 2 CERTAIN FILM AND TELEVISION PRODUC- 3 TIONS; SPECIAL EXPENSING FOR LIVE THE- 4 ATRICAL PRODUCTIONS. 5 (a) IN GENERAL.—Section 181(f) is amended by 6 striking ‘‘December 31, 2014’’ and inserting ‘‘December 7 31, 2016’’. 8 (b) APPLICATION TO LIVE PRODUCTIONS.— 9 (1) IN GENERAL.—Paragraph (1) of section 10 181(a) is amended by inserting ‘‘, and any qualified 11 live theatrical production,’’ after ‘‘any qualified film 12 or television production’’. 13 14 (2) CONFORMING AMENDMENTS.—Section 181 is amended— 15 (A) by inserting ‘‘or any qualified live the- 16 atrical production’’ after ‘‘qualified film or tele- 17 vision production’’ each place it appears in sub- 18 sections (a)(2), (b), and (c)(1), 19 (B) by inserting ‘‘or qualified live theat- 20 rical productions’’ after ‘‘qualified film or tele- 21 vision productions’’ in subsection (f), and 22 (C) by inserting ‘‘AND 23 RICAL’’ 24 the heading. 25 (3) CLERICAL 26 after ‘‘FILM LIVE THEAT- AND TELEVISION’’ AMENDMENT.—The in item relating to section 181 in the table of sections for part VI L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 73 1 of subchapter B of chapter 1 is amended to read as 2 follows: ‘‘Sec. 181. Treatment of certain qualified film and television and live theatrical productions.’’. 3 (c) QUALIFIED LIVE THEATRICAL PRODUCTION.— 4 Section 181 is amended— 5 (1) by redesignating subsections (e) and (f), as 6 amended by subsections (a) and (b), as subsections 7 (f) and (g), respectively, and 8 9 10 (2) by inserting after subsection (d) the following new subsection: ‘‘(e) QUALIFIED LIVE THEATRICAL PRODUCTION.— 11 For purposes of this section— 12 ‘‘(1) IN GENERAL.—The term ‘qualified live 13 theatrical production’ means any production de- 14 scribed in paragraph (2) if 75 percent of the total 15 compensation of the production is qualified com- 16 pensation (as defined in subsection (d)(3)). 17 ‘‘(2) PRODUCTION.— 18 ‘‘(A) IN GENERAL.—A production is de- 19 scribed in this paragraph if such production is 20 a live staged production of a play (with or with- 21 out music) which is derived from a written book 22 or script and is produced or presented by a tax- 23 able entity in any venue which has an audience 24 capacity of not more than 3,000 or a series of L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 74 1 venues the majority of which have an audience 2 capacity of not more than 3,000. 3 ‘‘(B) TOURING 4 COMPANIES, ETC.—In the case of multiple live staged productions— 5 ‘‘(i) for which the election under this 6 section would be allowable to the same tax- 7 payer, and 8 ‘‘(ii) which are— 9 ‘‘(I) separate phases of a produc- 10 tion, or 11 ‘‘(II) separate simultaneous stag- 12 ings of the same production in dif- 13 ferent geographical locations (not in- 14 cluding multiple performance locations 15 of any one touring production), 16 each such live staged production shall be treat- 17 ed as a separate production. 18 ‘‘(C) PHASE.—For purposes of subpara- 19 graph (B), the term ‘phase’ with respect to any 20 qualified live theatrical production refers to 21 each of the following, but only if each of the fol- 22 lowing is treated by the taxpayer as a separate 23 activity for all purposes of this title: 24 ‘‘(i) The initial staging of a live theat- 25 rical production. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 75 1 ‘‘(ii) Subsequent additional stagings 2 or touring of such production which are 3 produced by the same producer as the ini- 4 tial staging. 5 ‘‘(D) SEASONAL 6 ‘‘(i) IN PRODUCTIONS.— GENERAL.—In the case of a 7 live staged production not described in 8 subparagraph (B) which is produced or 9 presented by a taxable entity for not more 10 than 10 weeks of the taxable year, sub- 11 paragraph (A) shall be applied by sub- 12 stituting ‘6,500’ for ‘3,000’. 13 ‘‘(ii) SHORT TAXABLE YEARS.—For 14 purposes of clause (i), in the case of any 15 taxable year of less than 12 months, the 16 number of weeks for which a production is 17 produced or presented shall be annualized 18 by multiplying the number of weeks the 19 production is produced or presented during 20 such taxable year by 12 and dividing the 21 result by the number of months in such 22 taxable year. 23 ‘‘(E) EXCEPTION.—A production is not de- 24 scribed in this paragraph if such production in- 25 cludes or consists of any performance of con- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 76 1 duct described in section 2257(h)(1) of title 18, 2 United States Code.’’. 3 (d) EFFECTIVE DATE.— 4 (1) EXTENSION.—The amendment made by 5 subsection (a) shall apply to productions com- 6 mencing after December 31, 2014. 7 (2) MODIFICATIONS.— 8 (A) IN GENERAL.—The amendments made 9 by subsections (b) and (c) shall apply to pro- 10 ductions commencing after December 31, 2015. 11 (B) COMMENCEMENT.—For purposes of 12 subparagraph (A), the date on which a qualified 13 live theatrical production commences is the date 14 of the first public performance of such produc- 15 tion for a paying audience. 16 SEC. 170. EXTENSION OF DEDUCTION ALLOWABLE WITH 17 RESPECT TO INCOME ATTRIBUTABLE TO DO- 18 MESTIC PRODUCTION ACTIVITIES IN PUERTO 19 RICO. 20 (a) IN GENERAL.—Section 199(d)(8)(C) is amend- 21 ed— 22 23 (1) by striking ‘‘first 9 taxable years’’ and inserting ‘‘first 11 taxable years’’, and 24 25 (2) by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 2017’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 77 1 (b) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to taxable years beginning after 3 December 31, 2014. 4 SEC. 171. EXTENSION AND MODIFICATION OF EMPOWER- 5 6 MENT ZONE TAX INCENTIVES. (a) IN GENERAL.— 7 (1) EXTENSION.—Section 1391(d)(1)(A)(i) is 8 amended by striking ‘‘December 31, 2014’’ and in- 9 serting ‘‘December 31, 2016’’. 10 (2) TREATMENT OF CERTAIN TERMINATION 11 DATES SPECIFIED IN NOMINATIONS.—In 12 a designation of an empowerment zone the nomina- 13 tion for which included a termination date which is 14 contemporaneous with the date specified in subpara- 15 graph (A)(i) of section 1391(d)(1) of the Internal 16 Revenue Code of 1986 (as in effect before the enact- 17 ment of this Act), subparagraph (B) of such section 18 shall not apply with respect to such designation if, 19 after the date of the enactment of this section, the 20 entity which made such nomination amends the 21 nomination to provide for a new termination date in 22 such manner as the Secretary of the Treasury (or 23 the Secretary’s designee) may provide. 24 (b) MODIFICATION.—Section 1394(b)(3)(B)(i) is the case of 25 amended— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 78 1 2 (1) by striking ‘‘References’’ and inserting the following: 3 ‘‘(I) IN 4 provided 5 erences’’, and 6 7 in GENERAL.—Except subclause as (II), ref- (2) by adding at the end the following new subclause: 8 ‘‘(II) SPECIAL 9 FOR EM- PLOYEE RESIDENCE TEST.—For pur- RULE 10 poses of subsection (b)(6) and (c)(5) 11 of section 1397C, an employee shall 12 be treated as a resident of an em- 13 powerment zone if such employee is a 14 resident of an empowerment zone, an 15 enterprise community, or a qualified 16 low-income community within an ap- 17 plicable nominating jurisdiction.’’. 18 (c) DEFINITIONS.— 19 (1) QUALIFIED LOW-INCOME COMMUNITY.— 20 Section 1394(b)(3) is amended by redesignating sub- 21 paragraphs (C) and (D) as subparagraphs (D) and 22 (E), respectively, and by inserting after subpara- 23 graph (B) the following new subparagraph: 24 ‘‘(C) QUALIFIED 25 NITY.—For LOW-INCOME COMMU- purposes of subparagraph (B)— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 79 1 ‘‘(i) IN GENERAL.—The term ‘quali- 2 fied low-income community’ means any 3 population census tract if— 4 ‘‘(I) the poverty rate for such 5 tract is at least 20 percent, or 6 ‘‘(II) the median family income 7 for such tract does not exceed 80 per- 8 cent of statewide median family in- 9 come (or, in the case of a tract lo- 10 cated within a metropolitan area, met- 11 ropolitan area median family income 12 if greater). 13 Subclause (II) shall be applied using 14 possessionwide median family income in 15 the case of census tracts located within a 16 possession of the United States. 17 ‘‘(ii) TARGETED POPULATIONS.—The 18 Secretary shall prescribe regulations under 19 which 1 or more targeted populations 20 (within the meaning of section 103(20) of 21 the Riegle Community Development and 22 Regulatory Improvement Act of 1994) may 23 be treated as qualified low-income commu- 24 nities. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 80 1 ‘‘(iii) AREAS NOT WITHIN CENSUS 2 TRACTS.—In 3 not tracted for population census tracts, 4 the equivalent county divisions (as defined 5 by the Bureau of the Census for purposes 6 of defining poverty areas) shall be used for 7 purposes of determining poverty rates and 8 median family income. 9 the case of an area which is ‘‘(iv) MODIFICATION OF INCOME RE- 10 QUIREMENT FOR CENSUS TRACTS WITHIN 11 HIGH MIGRATION RURAL COUNTIES.— 12 ‘‘(I) IN GENERAL.—In the case 13 of a population census tract located 14 within a high migration rural county, 15 clause (i)(II) shall be applied to areas 16 not located within a metropolitan area 17 by substituting ‘85 percent’ for ‘80 18 percent’. 19 ‘‘(II) HIGH MIGRATION RURAL 20 COUNTY.—For 21 clause, the term ‘high migration rural 22 county’ means any county which, dur- 23 ing the 20-year period ending with the 24 year in which the most recent census 25 was conducted, has a net out-migra- purposes of this L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 81 1 tion of inhabitants from the county of 2 at least 10 percent of the population 3 of the county at the beginning of such 4 period.’’. 5 (2) APPLICABLE NOMINATING JURISDICTION.— 6 Section 1394(b)(3)(D), as redesignated by para- 7 graph (1), is amended by adding at the end the fol- 8 lowing new clause: 9 ‘‘(iii) APPLICABLE NOMINATING JU- 10 RISDICTION.—The 11 nating jurisdiction’ means, with respect to 12 any empowerment zone or enterprise com- 13 munity, any local government that nomi- 14 nated such community for designation 15 under section 1391.’’. 16 term ‘applicable nomi- (d) CONFORMING AMENDMENTS.— 17 (1) Section 1394(b)(3)(B)(iii) is amended by 18 striking ‘‘or an enterprise community’’ and inserting 19 ‘‘, an enterprise community, or a qualified low-in- 20 come community within an applicable nominating ju- 21 risdiction’’. 22 (2) Section 1394(b)(3)(D), as redesignated by 23 subsection (c)(1), is amended by striking ‘‘DEFINI- 24 TIONS’’ 25 (e) EFFECTIVE DATES.— and inserting ‘‘OTHER DEFINITIONS’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 82 1 (1) EXTENSIONS.—The amendment made by 2 subsection (a) shall apply to taxable years beginning 3 after December 31, 2014. 4 (2) MODIFICATIONS.—The amendments made 5 by subsections (b), (c), and (d) shall apply to bonds 6 issued after December 31, 2015. 7 SEC. 172. EXTENSION OF TEMPORARY INCREASE IN LIMIT 8 ON COVER OVER OF RUM EXCISE TAXES TO 9 PUERTO RICO AND THE VIRGIN ISLANDS. 10 (a) IN GENERAL.—Section 7652(f)(1) is amended by 11 striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 12 2017’’. 13 (b) EFFECTIVE DATE.—The amendment made by 14 this section shall apply to distilled spirits brought into the 15 United States after December 31, 2014. 16 SEC. 173. EXTENSION OF AMERICAN SAMOA ECONOMIC DE- 17 18 VELOPMENT CREDIT. (a) IN GENERAL.—Section 119(d) of division A of 19 the Tax Relief and Health Care Act of 2006 is amended— 20 21 (1) by striking ‘‘January 1, 2015’’ each place it appears and inserting ‘‘January 1, 2017’’, 22 (2) by striking ‘‘first 9 taxable years’’ in para- 23 graph (1) and inserting ‘‘first 11 taxable years’’, 24 and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 83 1 (3) by striking ‘‘first 3 taxable years’’ in para- 2 graph (2) and inserting ‘‘first 5 taxable years’’. 3 (b) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2014. 6 SEC. 174. MORATORIUM ON MEDICAL DEVICE EXCISE TAX. 7 (a) IN GENERAL.—Section 4191 is amended by add- 8 ing at the end the following new subsection: 9 ‘‘(c) MORATORIUM.—The tax imposed under sub- 10 section (a) shall not apply to sales during the period begin11 ning on January 1, 2016, and ending on December 31, 12 2017.’’. 13 (b) EFFECTIVE DATE.—The amendment made by 14 this section shall apply to sales after December 31, 2015. 15 PART 3—INCENTIVES FOR ENERGY PRODUCTION 16 AND CONSERVATION 17 SEC. 181. EXTENSION AND MODIFICATION OF CREDIT FOR 18 19 NONBUSINESS ENERGY PROPERTY. (a) EXTENSION.—Section 25C(g)(2) is amended by 20 striking ‘‘December 31, 2014’’ and inserting ‘‘December 21 31, 2016’’. 22 (b) UPDATED ENERGY STAR REQUIREMENTS.— 23 (1) IN GENERAL.—Section 25C(c)(1) is amend- 24 ed by striking ‘‘which meets’’ and all that follows 25 through ‘‘requirements)’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 84 1 (2) ENERGY 2 COMPONENT.—Section 3 ignating paragraphs (2) and (3) as paragraphs (3) 4 and (4), respectively, and by inserting after para- 5 graph (1) the following new paragraph: 6 EFFICIENT BUILDING ENVELOPE ‘‘(2) ENERGY 25C(c) is amended by redes- EFFICIENT BUILDING ENVELOPE 7 COMPONENT.—The 8 envelope component’ means a building envelope com- 9 ponent which meets— term ‘energy efficient building 10 ‘‘(A) applicable Energy Star program re- 11 quirements, in the case of a roof or roof prod- 12 ucts, 13 ‘‘(B) version 6.0 Energy Star program re- 14 quirements, in the case of an exterior window, 15 a skylight, or an exterior door, and 16 ‘‘(C) the prescriptive criteria for such com- 17 ponent established by the 2009 International 18 Energy Conservation Code, as such Code (in- 19 cluding supplements) is in effect on the date of 20 the enactment of the American Recovery and 21 Reinvestment Tax Act of 2009, in the case of 22 any other component.’’. 23 (c) EFFECTIVE DATES.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 85 1 (1) EXTENSION.—The amendment made by 2 subsection (a) shall apply to property placed in serv- 3 ice after December 31, 2014. 4 (2) MODIFICATION.—The amendments made by 5 subsection (b) shall apply to property placed in serv- 6 ice after December 31, 2015. 7 SEC. 182. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL 8 VEHICLE REFUELING PROPERTY. 9 (a) IN GENERAL.—Section 30C(g) is amended by 10 striking ‘‘December 31, 2014’’ and inserting ‘‘December 11 31, 2016’’. 12 (b) EFFECTIVE DATE.—The amendment made by 13 this section shall apply to property placed in service after 14 December 31, 2014. 15 SEC. 183. EXTENSION OF CREDIT FOR 2-WHEELED PLUG-IN 16 17 ELECTRIC VEHICLES. (a) IN GENERAL.—Section 30D(g)(3)(E) is amended 18 by striking ‘‘acquired’’ and all that follows and inserting 19 the following: ‘‘acquired— 20 ‘‘(i) after December 31, 2011, and be- 21 fore January 1, 2014, or 22 ‘‘(ii) in the case of a vehicle that has 23 2 wheels, after December 31, 2014, and 24 before January 1, 2017.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 86 1 (b) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to vehicles acquired after Decem3 ber 31, 2014. 4 SEC. 184. EXTENSION OF SECOND GENERATION BIOFUEL 5 PRODUCER CREDIT. 6 (a) IN GENERAL.—Section 40(b)(6)(J)(i) is amended 7 by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 8 2017’’. 9 (b) EFFECTIVE DATE.—The amendment made by 10 this subsection shall apply to qualified second generation 11 biofuel production after December 31, 2014. 12 SEC. 185. EXTENSION OF BIODIESEL AND RENEWABLE DIE- 13 14 SEL INCENTIVES. (a) INCOME TAX CREDIT.— 15 (1) IN GENERAL.—Subsection (g) of section 16 40A is amended by striking ‘‘December 31, 2014’’ 17 and inserting ‘‘December 31, 2016’’. 18 (2) EFFECTIVE DATE.—The amendment made 19 by this subsection shall apply to fuel sold or used 20 after December 31, 2014. 21 (b) EXCISE TAX INCENTIVES.— 22 (1) IN GENERAL.—Section 6426(c)(6) is 23 amended by striking ‘‘December 31, 2014’’ and in- 24 serting ‘‘December 31, 2016’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 87 1 (2) PAYMENTS.—Section 6427(e)(6)(B) is 2 amended by striking ‘‘December 31, 2014’’ and in- 3 serting ‘‘December 31, 2016’’. 4 (3) EFFECTIVE DATE.—The amendments made 5 by this subsection shall apply to fuel sold or used 6 after December 31, 2014. 7 (4) SPECIAL RULE FOR 2015.—Notwithstanding 8 any other provision of law, in the case of any bio- 9 diesel mixture credit properly determined under sec- 10 tion 6426(c) of the Internal Revenue Code of 1986 11 for the period beginning on January 1, 2015, and 12 ending on December 31, 2015, such credit shall be 13 allowed, and any refund or payment attributable to 14 such credit (including any payment under section 15 6427(e) of such Code) shall be made, only in such 16 manner as the Secretary of the Treasury (or the 17 Secretary’s delegate) shall provide. Such Secretary 18 shall issue guidance within 30 days after the date of 19 the enactment of this Act providing for a one-time 20 submission of claims covering periods described in 21 the preceding sentence. Such guidance shall provide 22 for a 180-day period for the submission of such 23 claims (in such manner as prescribed by such Sec- 24 retary) to begin not later than 30 days after such 25 guidance is issued. Such claims shall be paid by such L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 88 1 Secretary not later than 60 days after receipt. If 2 such Secretary has not paid pursuant to a claim 3 filed under this subsection within 60 days after the 4 date of the filing of such claim, the claim shall be 5 paid with interest from such date determined by 6 using the overpayment rate and method under sec- 7 tion 6621 of such Code. 8 SEC. 186. EXTENSION AND MODIFICATION OF PRODUCTION 9 CREDIT FOR INDIAN COAL FACILITIES. 10 (a) IN GENERAL.—Section 45(e)(10)(A) is amended 11 by striking ‘‘9-year period’’ each place it appears and in12 serting ‘‘11-year period’’. 13 14 (b) REPEAL ITY IS OF LIMITATION BASED ON DATE FACIL- PLACED IN SERVICE.—Section 45(d)(10) is amend- 15 ed to read as follows: 16 ‘‘(10) INDIAN COAL PRODUCTION FACILITY.— 17 The term ‘Indian coal production facility’ means a 18 facility that produces Indian coal.’’. 19 (c) TREATMENT OF SALES TO RELATED PARTIES.— 20 Section 45(e)(10)(A)(ii)(I) is amended by inserting ‘‘(ei21 ther directly by the taxpayer or after sale or transfer to 22 one or more related persons)’’ after ‘‘unrelated person’’. 23 24 (d) CREDIT ALLOWED AGAINST ALTERNATIVE MINIMUM TAX.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00088 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 89 1 (1) IN GENERAL.—Section 38(c)(4)(B), as 2 amended by the preceding provisions of this Act, is 3 amended by redesignating clauses (v) through (x) as 4 clauses (vi) through (xi), respectively, and by insert- 5 ing after clause (iv) the following new clause: 6 ‘‘(v) the credit determined under sec- 7 tion 45 to the extent that such credit is at- 8 tributable to section 45(e)(10) (relating to 9 Indian coal production facilities),’’. 10 (2) CONFORMING AMENDMENT.—Section 11 45(e)(10) is amended by striking subparagraph (D). 12 (e) EFFECTIVE DATES.— 13 (1) EXTENSION.—The amendments made by 14 subsection (a) shall apply to coal produced after De- 15 cember 31, 2014. 16 (2) MODIFICATIONS.—The amendments made 17 by subsections (b) and (c) shall apply to coal pro- 18 duced and sold after December 31, 2015, in taxable 19 years ending after such date. 20 (3) CREDIT 21 MINIMUM TAX.—The 22 section (d) shall apply to credits determined for tax- 23 able years beginning after December 31, 2015. ALLOWED AGAINST ALTERNATIVE amendments made by sub- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00089 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 90 1 SEC. 187. EXTENSION OF CREDITS WITH RESPECT TO FA- 2 CILITIES PRODUCING ENERGY FROM CER- 3 TAIN RENEWABLE RESOURCES. 4 (a) IN GENERAL.—The following provisions of sec- 5 tion 45(d) are each amended by striking ‘‘January 1, 6 2015’’ each place it appears and inserting ‘‘January 1, 7 2017’’: 8 (1) Paragraph (2)(A). 9 (2) Paragraph (3)(A). 10 (3) Paragraph (4)(B). 11 (4) Paragraph (6). 12 (5) Paragraph (7). 13 (6) Paragraph (9). 14 (7) Paragraph (11)(B). 15 (b) EXTENSION 16 FACILITIES AS OF ELECTION ENERGY TO TREAT QUALIFIED PROPERTY.—Section 17 48(a)(5)(C)(ii) is amended by striking ‘‘January 1, 2015’’ 18 and inserting ‘‘January 1, 2017’’. 19 (c) EFFECTIVE DATES.—The amendments made by 20 this section shall take effect on January 1, 2015. 21 SEC. 188. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT 22 23 NEW HOMES. (a) IN GENERAL.—Section 45L(g) is amended by 24 striking ‘‘December 31, 2014’’ and inserting ‘‘December 25 31, 2016’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00090 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 91 1 (b) EFFECTIVE DATE.—The amendment made by 2 this section shall apply to homes acquired after December 3 31, 2014. 4 SEC. 189. EXTENSION OF SPECIAL ALLOWANCE FOR SEC- 5 OND GENERATION BIOFUEL PLANT PROP- 6 ERTY. 7 (a) IN GENERAL.—Section 168(l)(2)(D) is amended 8 by striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 9 2017’’. 10 (b) EFFECTIVE DATE.—The amendment made by 11 this section shall apply to property placed in service after 12 December 31, 2014. 13 SEC. 190. EXTENSION OF ENERGY EFFICIENT COMMERCIAL 14 15 BUILDINGS DEDUCTION. (a) IN GENERAL.—Section 179D(h) is amended by 16 striking ‘‘December 31, 2014’’ and inserting ‘‘December 17 31, 2016’’. 18 (b) EFFECTIVE DATE.—The amendment made by 19 subsection (a) shall apply to property placed in service 20 after December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 92 1 SEC. 191. EXTENSION OF SPECIAL RULE FOR SALES OR DIS- 2 POSITIONS TO IMPLEMENT FERC OR STATE 3 ELECTRIC 4 QUALIFIED ELECTRIC UTILITIES. 5 RESTRUCTURING POLICY FOR (a) IN GENERAL.—Section 451(i)(3) is amended by 6 striking ‘‘January 1, 2015’’ and inserting ‘‘January 1, 7 2017’’. 8 (b) EFFECTIVE DATE.—The amendment made by 9 this section shall apply to dispositions after December 31, 10 2014. 11 SEC. 192. EXTENSION OF EXCISE TAX CREDITS RELATING 12 13 TO ALTERNATIVE FUELS. (a) EXTENSION ALTERNATIVE FUELS EXCISE OF 14 TAX CREDITS.— 15 (1) IN GENERAL.—Sections 6426(d)(5) and 16 6426(e)(3) are each amended by striking ‘‘December 17 31, 2014’’ and inserting ‘‘December 31, 2016’’. 18 (2) OUTLAY PAYMENTS FOR ALTERNATIVE 19 FUELS.—Section 20 ing ‘‘December 31, 2014’’ and inserting ‘‘December 21 31, 2016’’. 22 (b) EFFECTIVE DATE.—The amendments made by 6427(e)(6)(C) is amended by strik- 23 this section shall apply to fuel sold or used after December 24 31, 2014. 25 (c) SPECIAL RULE FOR 2015.—Notwithstanding any 26 other provision of law, in the case of any alternative fuel L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 93 1 credit properly determined under section 6426(d) of the 2 Internal Revenue Code of 1986 for the period beginning 3 on January 1, 2015, and ending on December 31, 2015, 4 such credit shall be allowed, and any refund or payment 5 attributable to such credit (including any payment under 6 section 6427(e) of such Code) shall be made, only in such 7 manner as the Secretary of the Treasury (or the Sec8 retary’s delegate) shall provide. Such Secretary shall issue 9 guidance within 30 days after the date of the enactment 10 of this Act providing for a one-time submission of claims 11 covering periods described in the preceding sentence. Such 12 guidance shall provide for a 180-day period for the sub13 mission of such claims (in such manner as prescribed by 14 such Secretary) to begin not later than 30 days after such 15 guidance is issued. Such claims shall be paid by such Sec16 retary not later than 60 days after receipt. If such Sec17 retary has not paid pursuant to a claim filed under this 18 subsection within 60 days after the date of the filing of 19 such claim, the claim shall be paid with interest from such 20 date determined by using the overpayment rate and meth21 od under section 6621 of such Code. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00093 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 94 1 SEC. 193. EXTENSION OF CREDIT FOR NEW QUALIFIED 2 FUEL CELL MOTOR VEHICLES. 3 (a) IN GENERAL.—Section 30B(k)(1) is amended by 4 striking ‘‘December 31, 2014’’ and inserting ‘‘December 5 31, 2016’’. 6 (b) EFFECTIVE DATE.—The amendment made by 7 this section shall apply to property purchased after De8 cember 31, 2014. TITLE II—PROGRAM INTEGRITY 9 10 SEC. 201. MODIFICATION OF FILING DATES OF RETURNS 11 AND STATEMENTS RELATING TO EMPLOYEE 12 WAGE 13 COMPENSATION TO IMPROVE COMPLIANCE. 14 INFORMATION AND NONEMPLOYEE (a) IN GENERAL.—Section 6071 is amended by re- 15 designating subsection (c) as subsection (d), and by insert16 ing after subsection (b) the following new subsection: 17 ‘‘(c) RETURNS AND 18 PLOYEE 19 PENSATION.—Forms STATEMENTS RELATING WAGE INFORMATION AND TO EM- NONEMPLOYEE COM- W–2 and W–3 and any returns or 20 statements required by the Secretary to report non21 employee compensation shall be filed on or before January 22 31 of the year following the calendar year to which such 23 returns relate.’’. 24 (b) DATE FOR CERTAIN REFUNDS.—Section 6402 is 25 amended by adding at the end the following new sub26 section: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00094 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 95 1 ‘‘(m) EARLIEST DATE FOR CERTAIN REFUNDS.—No 2 credit or refund of an overpayment for a taxable year shall 3 be made to a taxpayer before the 15th day of the second 4 month following the close of such taxable year if a credit 5 is allowed to such taxpayer under section 24 (by reason 6 of subsection (d) thereof) or 32 for such taxable year.’’. 7 (c) CONFORMING AMENDMENT.—Section 6071(b) is 8 amended by striking ‘‘subparts B and C of part III of 9 this subchapter’’ and inserting ‘‘subpart B of part III of 10 this subchapter (other than returns and statements re11 quired to be filed with respect to nonemployee compensa12 tion)’’. 13 (d) EFFECTIVE DATES.— 14 (1) IN GENERAL.—Except as provided in para- 15 graph (2), the amendments made by this section 16 shall apply to returns and statements relating to cal- 17 endar years beginning after the date of the enact- 18 ment of this Act. 19 (2) DATE FOR CERTAIN REFUNDS.—The 20 amendment made by subsection (b) shall apply to 21 credits or refunds made after December 31, 2016. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 96 1 SEC. 202. SAFE HARBOR FOR DE MINIMIS ERRORS ON IN- 2 FORMATION RETURNS AND PAYEE STATE- 3 MENTS. 4 (a) IN GENERAL.—Section 6721(c) is amended by 5 adding at the end the following new paragraph: 6 7 ‘‘(3) SAFE HARBOR FOR CERTAIN DE MINIMIS ERRORS.— 8 ‘‘(A) IN 9 GENERAL.—If, with respect to an information return filed with the Secretary— 10 ‘‘(i) there are 1 or more failures de- 11 scribed in subsection (a)(2)(B) relating to 12 an incorrect dollar amount, 13 ‘‘(ii) no single amount in error differs 14 from the correct amount by more than 15 $100, and 16 ‘‘(iii) no single amount reported for 17 tax withheld on any information return dif- 18 fers from the correct amount by more than 19 $25, 20 then no correction shall be required and, for 21 purposes of this section, such return shall be 22 treated as having been filed with all of the cor- 23 rect required information. 24 ‘‘(B) EXCEPTION.—Subparagraph (A) 25 shall not apply with respect to any incorrect 26 dollar amount to the extent that such error re- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 97 1 lates to an amount with respect to which an 2 election is made under section 6722(c)(3)(B). 3 ‘‘(C) REGULATORY AUTHORITY.—The Sec- 4 retary may issue regulations to prevent the 5 abuse of the safe harbor under this paragraph, 6 including regulations providing that this para- 7 graph shall not apply to the extent necessary to 8 prevent any such abuse.’’. 9 10 (b) FAILURE TO FURNISH CORRECT PAYEE STATEMENT.—Section 6722(c) is amended by adding at the end 11 the following new paragraph: 12 13 ‘‘(3) SAFE HARBOR FOR CERTAIN DE MINIMIS ERRORS.— 14 ‘‘(A) IN 15 payee statement— GENERAL.—If, with respect to any 16 ‘‘(i) there are 1 or more failures de- 17 scribed in subsection (a)(2)(B) relating to 18 an incorrect dollar amount, 19 ‘‘(ii) no single amount in error differs 20 from the correct amount by more than 21 $100, and 22 ‘‘(iii) no single amount reported for 23 tax withheld on any information return dif- 24 fers from the correct amount by more than 25 $25, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 98 1 then no correction shall be required and, for 2 purposes of this section, such statement shall be 3 treated as having been filed with all of the cor- 4 rect required information. 5 ‘‘(B) EXCEPTION.—Subparagraph (A) 6 shall not apply to any payee statement if the 7 person to whom such statement is required to 8 be furnished makes an election (at such time 9 and in such manner as the Secretary may pre- 10 scribe) that subparagraph (A) not apply with 11 respect to such statement. 12 ‘‘(C) REGULATORY AUTHORITY.—The Sec- 13 retary may issue regulations to prevent the 14 abuse of the safe harbor under this paragraph, 15 including regulations providing that this para- 16 graph shall not apply to the extent necessary to 17 prevent any such abuse.’’. 18 (c) APPLICATION TO BROKER REPORTING OF 19 BASIS.—Section 6045(g)(2)(B) is amended by adding at 20 the end the following new clause: 21 ‘‘(iii) TREATMENT OF UNCORRECTED 22 DE MINIMIS ERRORS.—Except 23 provided by the Secretary, the customer’s 24 adjusted basis shall be determined by 25 treating any incorrect dollar amount which as otherwise L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 99 1 is not required to be corrected by reason of 2 section 6721(c)(3) or section 6722(c)(3) as 3 the correct amount.’’. 4 (d) CONFORMING AMENDMENTS.— 5 (1) Section 6721(c) is amended by striking 6 ‘‘EXCEPTION 7 CLUDE 8 ing and inserting ‘‘EXCEPTIONS 9 MINIMIS FAILURES’’. 10 FOR DE MINIMIS FAILURES TO IN- ALL REQUIRED INFORMATION’’ in the headFOR CERTAIN DE (2) Section 6721(c)(1) is amended by striking 11 ‘‘IN 12 CEPTION FOR DE MINIMIS FAILURE TO INCLUDE ALL 13 REQUIRED INFORMATION’’. 14 (e) EFFECTIVE DATE.—The amendments made by GENERAL’’ in the heading and inserting ‘‘EX- 15 this section shall apply to returns required to be filed, and 16 payee statements required to be provided, after December 17 31, 2016. 18 SEC. 203. REQUIREMENTS FOR THE ISSUANCE OF ITINS. 19 (a) IN GENERAL.—Section 6109 is amended by add- 20 ing at the end the following new subsection: 21 22 ‘‘(i) SPECIAL RULES RELATING OF TO THE ISSUANCE ITINS.— 23 ‘‘(1) IN GENERAL.—The Secretary is authorized 24 to issue an individual taxpayer identification number 25 to an individual only if the applicant submits an ap- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 100 1 plication, using such form as the Secretary may re- 2 quire and including the required documentation— 3 ‘‘(A) in the case of an applicant not de- 4 scribed in subparagraph (B)— 5 ‘‘(i) in person to an employee of the 6 Internal Revenue Service or a community- 7 based certified acceptance agent approved 8 by the Secretary, or 9 ‘‘(ii) by mail, pursuant to rules pre- 10 scribed by the Secretary, or 11 ‘‘(B) in the case of an applicant who re- 12 sides outside of the United States, by mail or 13 in person to an employee of the Internal Rev- 14 enue Service or a designee of the Secretary at 15 a United States diplomatic mission or consular 16 post. 17 ‘‘(2) REQUIRED 18 poses of this subsection— 19 ‘‘(A) IN DOCUMENTATION.—For GENERAL.—The pur- term ‘required 20 documentation’ includes such documentation as 21 the Secretary may require that proves the indi- 22 vidual’s identity, foreign status, and residency. 23 ‘‘(B) VALIDITY 24 OF DOCUMENTS.—The Sec- retary may accept only original documents or L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 101 1 certified copies meeting the requirements of the 2 Secretary. 3 ‘‘(3) TERM 4 OF ITIN.— ‘‘(A) IN GENERAL.—An individual tax- 5 payer identification number issued after Decem- 6 ber 31, 2012, shall remain in effect unless the 7 individual to whom such number is issued does 8 not file a return of tax (or is not included as 9 a dependent on the return of tax of another 10 taxpayer) for 3 consecutive taxable years. In 11 the case of an individual described in the pre- 12 ceding sentence, such number shall expire on 13 the last day of such third consecutive taxable 14 year. 15 ‘‘(B) SPECIAL RULE FOR EXISTING 16 ITINS.—In 17 spect to whom an individual taxpayer identifica- 18 tion number was issued before January 1, 19 2013, such number shall remain in effect until 20 the earlier of— the case of an individual with re- 21 ‘‘(i) the applicable date, or 22 ‘‘(ii) if the individual does not file a 23 return of tax (or is not included as a de- 24 pendent on the return of tax of another L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 102 1 taxpayer) for 3 consecutive taxable years, 2 the earlier of— 3 ‘‘(I) the last day of such third 4 consecutive taxable year, or 5 ‘‘(II) the last day of the taxable 6 year that includes the date of the en- 7 actment of this subsection. 8 ‘‘(C) APPLICABLE 9 DATE.—For purposes of subparagraph (B), the term ‘applicable date’ 10 means— 11 ‘‘(i) January 1, 2017, in the case of 12 an individual taxpayer identification num- 13 ber issued before January 1, 2008, 14 ‘‘(ii) January 1, 2018, in the case of 15 an individual taxpayer identification num- 16 ber issued in 2008, 17 ‘‘(iii) January 1, 2019, in the case of 18 an individual taxpayer identification num- 19 ber issued in 2009 or 2010, and 20 ‘‘(iv) January 1, 2020, in the case of 21 an individual taxpayer identification num- 22 ber issued in 2011 or 2012. 23 ‘‘(4) DISTINGUISHING ITINS ISSUED SOLELY 24 FOR PURPOSES OF TREATY BENEFITS.—The 25 retary shall implement a system that ensures that Sec- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 103 1 individual taxpayer identification numbers issued 2 solely for purposes of claiming tax treaty benefits 3 are used only for such purposes, by distinguishing 4 such numbers from other individual taxpayer identi- 5 fication numbers issued.’’. 6 (b) AUDIT BY TIGTA.—Not later than 2 years after 7 the date of the enactment of this Act, and every 2 years 8 thereafter, the Treasury Inspector General for Tax Ad9 ministration shall conduct an audit of the program of the 10 Internal Revenue Service for the issuance of individual 11 taxpayer identification numbers pursuant to section 12 6109(i) of the Internal Revenue Code of 1986 (as added 13 by this section) and report the results of such audit to 14 the Committee on Finance of the Senate and the Com15 mittee on the Ways and Means of the House of Represent16 atives. 17 (c) COMMUNITY-BASED CERTIFIED ACCEPTANCE 18 AGENTS.—The Secretary of the Treasury, or the Sec19 retary’s delegate, shall maintain a program for training 20 and approving community-based certified acceptance 21 agents for purposes of section 6109(i)(1)(A)(i) of the In22 ternal Revenue Code of 1986 (as added by this section). 23 Persons eligible to be acceptance agents under such pro24 gram include— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 104 1 (1) financial institutions (as defined in section 2 265(b)(5) of such Code and the regulations there- 3 under), 4 (2) colleges and universities which are described 5 in section 501(c)(3) of such Code and exempt from 6 taxation under section 501(a) of such Code, 7 8 (3) Federal agencies (as defined in section 6402(h) of such Code), 9 10 (4) State and local governments, including agencies responsible for vital records, 11 (5) community-based organizations which are 12 described in subsection (c)(3) or (d) of section 501 13 of such Code and exempt from taxation under sec- 14 tion 501(a) of such Code, 15 16 (6) persons that provide assistance to taxpayers in the preparation of their tax returns, and 17 (7) other persons or categories of persons as 18 authorized by regulations or other guidance of the 19 Secretary of the Treasury. 20 (d) ITIN STUDY.— 21 (1) IN GENERAL.—The Secretary of the Treas- 22 ury, or the Secretary’s delegate, shall conduct a 23 study on the effectiveness of the application process 24 for individual taxpayer identification numbers before 25 the implementation of the amendments made by this L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 105 1 section, the effects of the amendments made by this 2 section on such application process, the comparative 3 effectiveness of an in-person review process for ap- 4 plication versus other methods of reducing fraud in 5 the ITIN program and improper payments to ITIN 6 holders as a result, and possible administrative and 7 legislative recommendations to improve such process. 8 9 (2) SPECIFIC REQUIREMENTS.—Such study shall include an evaluation of the following: 10 (A) Possible administrative and legislative 11 recommendations to reduce fraud and improper 12 payments through the use of individual tax- 13 payer identification numbers (hereinafter re- 14 ferred to as ‘‘ITINs’’). 15 (B) If data supports an in-person initial 16 review of ITIN applications to reduce fraud and 17 improper payments, the administrative and leg- 18 islative steps needed to implement such an in- 19 person initial review of ITIN applications, in 20 conjunction with an expansion of the commu- 21 nity-based certified acceptance agent program 22 under 23 transitioning to such a program by 2020. 24 subsection (c), with a goal of (C) Strategies for more efficient processing 25 of ITIN applications. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00105 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 106 1 (D) The acceptance agent program as in 2 existence on the date of the enactment of this 3 Act and ways to expand the geographic avail- 4 ability of agents through the community-based 5 certified acceptance agent program under sub- 6 section (c). 7 (E) Strategies for the Internal Revenue 8 Service to work with other Federal agencies, 9 State and local governments, and other organi- 10 zations and persons described in subsection (c) 11 to encourage participation in the community- 12 based certified acceptance agent program under 13 subsection (c) to facilitate in-person initial re- 14 view of ITIN applications. 15 (F) Typical characteristics (derived from 16 Form W–7 and other sources) of mail applica- 17 tions for ITINs as compared with typical char- 18 acteristics of in-person applications. 19 (G) Typical characteristics (derived from 20 17 Form W–7 and other sources) of ITIN ap- 21 plications before the Internal Revenue Service 22 revised its application procedures in 2012 as 23 compared with typical characteristics of ITIN 24 applications made after such revisions went into 25 effect. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 107 1 (3) REPORT.—The Secretary, or the Secretary’s 2 delegate, shall submit to the Committee on Finance 3 of the Senate and the Committee on Ways and 4 Means of the House of Representatives a report de- 5 tailing the study under paragraph (1) and its find- 6 ings not later than 1 year after the date of the en- 7 actment of this Act. 8 (4) ADMINISTRATIVE STEPS.—The Secretary of 9 the Treasury shall implement any administrative 10 steps identified by the report under paragraph (3) 11 not later than 180 days after submitting such re- 12 port. 13 (e) MATHEMATICAL 14 ITY.—Paragraph OR CLERICAL ERROR AUTHOR- (2) of section 6213(g) of the Internal 15 Revenue Code of 1986 is amended by striking ‘‘and’’ at 16 the end of subparagraph (M), by striking the period at 17 the end of subparagraph (N) and inserting ‘‘, and’’, and 18 by inserting after subparagraph (N) the following new 19 subparagraph: 20 ‘‘(O) the inclusion on a return of an indi- 21 vidual taxpayer identification number issued 22 under section 6109(i) which has expired, been 23 revoked by the Secretary, or is otherwise in- 24 valid.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00107 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 108 1 (f) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to applications for individual tax3 payer identification numbers made after the date of the 4 enactment of this Act. 5 SEC. 204. PREVENTION OF RETROACTIVE CLAIMS OF 6 EARNED INCOME CREDIT AFTER ISSUANCE 7 OF SOCIAL SECURITY NUMBER. 8 (a) IN GENERAL.—Section 32(m) is amended by in- 9 serting ‘‘on or before the due date for filing the return 10 for the taxable year’’ before the period at the end. 11 (b) EFFECTIVE DATE.— 12 (1) IN GENERAL.—Except as provided in para- 13 graph (2), the amendment made by this section shall 14 apply to any return of tax, and any amendment or 15 supplement to any return of tax, which is filed after 16 the date of the enactment of this Act. 17 (2) EXCEPTION FOR TIMELY-FILED 2015 RE- 18 TURNS.—The 19 not apply to any return of tax (other than an 20 amendment or supplement to any return of tax) for 21 any taxable year which includes the date of the en- 22 actment of this Act if such return is filed on or be- 23 fore the due date for such return of tax. amendment made by this section shall L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 109 1 SEC. 205. PREVENTION OF RETROACTIVE CLAIMS OF CHILD 2 TAX CREDIT. 3 4 (a) QUALIFYING CHILD IDENTIFICATION REQUIREMENT.—Section 24(e) is amended by inserting ‘‘and such 5 taxpayer identification number was issued on or before the 6 due date for filing such return’’ before the period at the 7 end. 8 (b) TAXPAYER IDENTIFICATION REQUIREMENT.— 9 Section 24(e), as amended by subsection (a) is amended— 10 (1) by striking ‘‘IDENTIFICATION REQUIRE- 11 MENT.—No 12 the following: ‘‘IDENTIFICATION REQUIREMENTS.— 13 14 ‘‘(1) QUALIFYING QUIREMENT.—No 15 16 credit shall be allowed’’ and inserting CHILD IDENTIFICATION RE- credit shall be allowed’’, and (2) by adding at the end the following new paragraph: 17 ‘‘(2) TAXPAYER IDENTIFICATION REQUIRE- 18 MENT.—No 19 if the identifying number of the taxpayer was issued 20 after the due date for filing the return for the tax- 21 able year.’’. 22 (c) EFFECTIVE DATE.— 23 (1) IN credit shall be allowed under this section GENERAL.—The amendments made by 24 this section shall apply to any return of tax, and any 25 amendment or supplement to any return of tax, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00109 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 110 1 which is filed after the date of the enactment of this 2 Act. 3 (2) EXCEPTION FOR TIMELY-FILED 2015 RE- 4 TURNS.—The 5 shall not apply to any return of tax (other than an 6 amendment or supplement to any return of tax) for 7 any taxable year which includes the date of the en- 8 actment of this Act if such return is filed on or be- 9 fore the due date for such return of tax. amendments made by this section 10 SEC. 206. PREVENTION OF RETROACTIVE CLAIMS OF AMER- 11 ICAN OPPORTUNITY TAX CREDIT. 12 (a) IN GENERAL.—Section 25A(i) is amended— 13 (1) by striking paragraph (6), and 14 (2) by inserting after paragraph (5) the fol- 15 lowing new paragraph: 16 ‘‘(6) IDENTIFICATION NUMBERS.— 17 ‘‘(A) STUDENT.—The requirements of sub- 18 section (g)(1) shall not be treated as met with 19 respect to the Hope Scholarship Credit unless 20 the individual’s taxpayer identification number 21 was issued on or before the due date for filing 22 the return of tax for the taxable year. 23 ‘‘(B) TAXPAYER.—No Hope Scholarship 24 Credit shall be allowed under this section if the 25 identifying number of the taxpayer was issued L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00110 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 111 1 after the due date for filing the return for the 2 taxable year.’’. 3 (b) EFFECTIVE DATES.— 4 (1) IN GENERAL.—Except as provided in para- 5 graph (2), the amendment made by subsection 6 (a)(2) shall apply to any return of tax, and any 7 amendment or supplement to any return of tax, 8 which is filed after the date of the enactment of this 9 Act. 10 (2) EXCEPTION FOR TIMELY-FILED 2015 RE- 11 TURNS.—The 12 shall not apply to any return of tax (other than an 13 amendment or supplement to any return of tax) for 14 any taxable year which includes the date of the en- 15 actment of this Act if such return is filed on or be- 16 fore the due date for such return of tax. 17 amendment made by subsection (a)(2) (3) REPEAL OF DEADWOOD.—The amendment 18 made by subsection (a)(1) shall take effect on the 19 date of the enactment of this Act. 20 SEC. 207. PROCEDURES TO REDUCE IMPROPER CLAIMS. 21 (a) DUE DILIGENCE REQUIREMENTS.—Section 22 6695(g) is amended— 23 24 (1) by striking ‘‘section 32’’and inserting ‘‘section 24, 25A(a)(1), or 32’’, and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00111 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 112 1 (2) in the heading by inserting ‘‘CHILD TAX 2 CREDIT; AMERICAN OPPORTUNITY TAX CREDIT; 3 AND’’ 4 (b) RETURN PREPARER DUE DILIGENCE STUDY.— 5 before ‘‘EARNED INCOME CREDIT’’. (1) IN GENERAL.—The Secretary of the Treas- 6 ury, or his delegate, shall conduct a study of the ef- 7 fectiveness of tax return preparer due diligence re- 8 quirements for claiming the earned income tax credit 9 under section 32 of the Internal Revenue Code of 10 1986, the child tax credit under section 24 of such 11 Code, and the American opportunity tax credit 12 under section 25A(i) of such Code. 13 14 (2) REQUIREMENTS.—Such study shall include an evaluation of the following: 15 (A) The effectiveness of the questions cur- 16 rently asked as part of the due-diligence re- 17 quirement with respect to minimizing error and 18 fraud. 19 (B) Whether all such questions are nec- 20 essary and support improved compliance. 21 (C) The comparative effectiveness of such 22 questions relative to other means of deter- 23 mining (i) eligibility for these tax credits and 24 (ii) the correct amount of tax credit. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00112 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 113 1 (D) Whether due diligence of this type 2 should apply to other methods of tax filing and 3 whether such requirements should vary based 4 on the methods to increase effectiveness. 5 (E) The effectiveness of the preparer pen- 6 alty under section 6695(g) in enforcing the due 7 diligence requirements. 8 (3) REPORT.—The Secretary, or his delegate, 9 shall submit to the Committee on Ways and Means 10 of the House of Representatives and the Committee 11 on Finance of the Senate a report detailing the 12 study and its findings— 13 (A) in the case of the portion of the study 14 that relates to the earned income tax credit, not 15 later than 1 year after the date of enactment of 16 this Act, and 17 (B) in the case of the portions of the study 18 that relate to the child tax credit and the Amer- 19 ican opportunity tax credit, not later than 2 20 years after the date of the enactment of this 21 Act. 22 (c) EFFECTIVE DATE.—The amendment made by 23 this section shall apply to taxable years beginning after 24 December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00113 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 114 1 SEC. 208. RESTRICTIONS ON TAXPAYERS WHO IMPROP- 2 ERLY CLAIMED CREDITS IN PRIOR YEAR. 3 (a) RESTRICTIONS.— 4 (1) CHILD TAX CREDIT.—Section 24 is amend- 5 ed by adding at the end the following new sub- 6 section: 7 ‘‘(g) RESTRICTIONS 8 ERLY TAXPAYERS WHO IMPROP- CLAIMED CREDIT IN PRIOR YEAR.— 9 10 ON ‘‘(1) TAXPAYERS MAKING PRIOR FRAUDULENT OR RECKLESS CLAIMS.— 11 ‘‘(A) IN GENERAL.—No credit shall be al- 12 lowed under this section for any taxable year in 13 the disallowance period. 14 ‘‘(B) DISALLOWANCE PERIOD.—For pur- 15 poses of subparagraph (A), the disallowance pe- 16 riod is— 17 ‘‘(i) the period of 10 taxable years 18 after the most recent taxable year for 19 which there was a final determination that 20 the taxpayer’s claim of credit under this 21 section was due to fraud, and 22 ‘‘(ii) the period of 2 taxable years 23 after the most recent taxable year for 24 which there was a final determination that 25 the taxpayer’s claim of credit under this 26 section was due to reckless or intentional L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00114 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 115 1 disregard of rules and regulations (but not 2 due to fraud). 3 ‘‘(2) TAXPAYERS MAKING IMPROPER PRIOR 4 CLAIMS.—In 5 credit under this section for any taxable year as a 6 result of the deficiency procedures under subchapter 7 B of chapter 63, no credit shall be allowed under 8 this section for any subsequent taxable year unless 9 the taxpayer provides such information as the Sec- 10 retary may require to demonstrate eligibility for 11 such credit.’’. 12 the case of a taxpayer who is denied (2) AMERICAN OPPORTUNITY TAX CREDIT.— 13 Section 25A(i), as amended by the preceding provi- 14 sions of this Act, is amended by adding at the end 15 the following new paragraph: 16 ‘‘(7) RESTRICTIONS 17 ON TAXPAYERS WHO IM- PROPERLY CLAIMED CREDIT IN PRIOR YEAR.— 18 ‘‘(A) TAXPAYERS 19 MAKING PRIOR FRAUDU- LENT OR RECKLESS CLAIMS.— 20 ‘‘(i) IN GENERAL.—No credit shall be 21 allowed under this section for any taxable 22 year in the disallowance period. 23 ‘‘(ii) DISALLOWANCE PERIOD.—For 24 purposes of clause (i), the disallowance pe- 25 riod is— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00115 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 116 1 ‘‘(I) the period of 10 taxable 2 years after the most recent taxable 3 year for which there was a final deter- 4 mination that the taxpayer’s claim of 5 credit under this section was due to 6 fraud, and 7 ‘‘(II) the period of 2 taxable 8 years after the most recent taxable 9 year for which there was a final deter- 10 mination that the taxpayer’s claim of 11 credit under this section was due to 12 reckless or intentional disregard of 13 rules and regulations (but not due to 14 fraud). 15 ‘‘(B) TAXPAYERS MAKING IMPROPER 16 PRIOR CLAIMS.—In 17 is denied credit under this section for any tax- 18 able year as a result of the deficiency proce- 19 dures under subchapter B of chapter 63, no 20 credit shall be allowed under this section for 21 any subsequent taxable year unless the taxpayer 22 provides such information as the Secretary may 23 require to demonstrate eligibility for such cred- 24 it.’’. 25 the case of a taxpayer who (b) MATH ERROR AUTHORITY.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00116 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 117 1 (1) EARNED INCOME TAX CREDIT.—Section 2 6213(g)(2)(K) is amended by inserting before the 3 comma at the end the following: ‘‘or an entry on the 4 return claiming the credit under section 32 for a 5 taxable year for which the credit is disallowed under 6 subsection (k)(1) thereof’’. 7 (2) AMERICAN OPPORTUNITY TAX CREDIT AND 8 CHILD TAX CREDIT.—Section 9 ed by the preceding provisions of this Act, is amend- 10 ed by striking ‘‘and’’ at the end of subparagraph 11 (N), by striking the period at the end of subpara- 12 graph (O), and by inserting after subparagraph (O) 13 the following new subparagraphs: 6213(g)(2), as amend- 14 ‘‘(P) an omission of information required 15 by section 24(h)(2) or an entry on the return 16 claiming the credit under section 24 for a tax- 17 able year for which the credit is disallowed 18 under subsection (h)(1) thereof, and 19 ‘‘(Q) an omission of information required 20 by section 25A(i)(8)(B) or an entry on the re- 21 turn claiming the credit determined under sec- 22 tion 25A(i) for a taxable year for which the 23 credit is disallowed under paragraph (8)(A) 24 thereof.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00117 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 118 1 (c) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to taxable years beginning after 3 December 31, 2015. 4 SEC. 209. TREATMENT OF CREDITS FOR PURPOSES OF CER- 5 TAIN PENALTIES. 6 (a) APPLICATION OF UNDERPAYMENT PENALTIES.— 7 Section 6664(a) is amended by adding at the end the fol8 lowing: ‘‘A rule similar to the rule of section 6211(b)(4) 9 shall apply for purposes of this subsection.’’. 10 (b) PENALTY FOR 11 MADE APPLICABLE TO ERRONEOUS CLAIM OF CREDIT EARNED INCOME CREDIT.—Sec- 12 tion 6676(a) is amended by striking ‘‘(other than a claim 13 for a refund or credit relating to the earned income credit 14 under section 32)’’. 15 16 (c) REASONABLE CAUSE EXCEPTION NEOUS 17 FOR ERRO- CLAIM FOR REFUND OR CREDIT.— (1) IN GENERAL.—Section 6676(a) is amended 18 by striking ‘‘has a reasonable basis’’ and inserting 19 ‘‘is due to reasonable cause’’. 20 (2) NONECONOMIC SUBSTANCE TRANS- 21 ACTIONS.—Section 22 ‘‘having a reasonable basis’’ and inserting ‘‘due to 23 reasonable cause’’. 24 (d) EFFECTIVE DATES.— 6676(c) is amended by striking L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00118 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 119 1 (1) UNDERPAYMENT 2 PENALTIES.—The amend- ment made by subsection (a) shall apply to— 3 (A) returns filed after the date of the en- 4 actment of this Act, and 5 (B) returns filed on or before such date if 6 the period specified in section 6501 of the In- 7 ternal Revenue Code of 1986 for assessment of 8 the taxes with respect to which such return re- 9 lates has not expired as of such date. 10 (2) PENALTY FOR ERRONEOUS CLAIM OF CRED- 11 IT.—The 12 apply to claims filed after the date of the enactment 13 of this Act. amendment made by subsection (b) shall 14 SEC. 210. INCREASE THE PENALTY APPLICABLE TO PAID 15 TAX PREPARERS WHO ENGAGE IN WILLFUL 16 OR RECKLESS CONDUCT. 17 (a) IN GENERAL.—Section 6694(b)(1)(B) is amend- 18 ed by striking ‘‘50 percent’’ and inserting ‘‘75 percent’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to returns prepared for taxable 21 years ending after the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00119 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 120 1 SEC. 211. EMPLOYER IDENTIFICATION NUMBER REQUIRED 2 3 FOR AMERICAN OPPORTUNITY TAX CREDIT. (a) IN GENERAL.—Section 25A(i)(6), as added by 4 this Act, is amended by adding at the end the following 5 new subparagraph: 6 ‘‘(C) INSTITUTION.—No Hope Scholarship 7 Credit shall be allowed under this section unless 8 the taxpayer includes the employer identifica- 9 tion number of any institution to which quali- 10 fied tuition and related expenses were paid with 11 respect to the individual.’’. 12 (b) INFORMATION REPORTING.—Section 13 6050S(b)(2) is amended by striking ‘‘and’’ at the end of 14 subparagraph (B), by redesignating subparagraph (C) as 15 subparagraph (D), and by inserting after subparagraph 16 (B) the following new subparagraph: 17 ‘‘(C) the employer identification number of 18 19 the institution, and’’. (c) EFFECTIVE DATE.— 20 (1) SUBSECTION (a).—The amendments made 21 by subsection (a) shall apply to taxable years begin- 22 ning after December 31, 2015. 23 (2) SUBSECTION (b).—The amendments made 24 by subsection (b) shall apply to expenses paid after 25 December 31, 2015, for education furnished in aca- 26 demic periods beginning after such date. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00120 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 121 1 SEC. 212. HIGHER EDUCATION INFORMATION REPORTING 2 ONLY TO INCLUDE QUALIFIED TUITION AND 3 RELATED EXPENSES ACTUALLY PAID. 4 (a) IN GENERAL.—Section 6050S(b)(2)(B)(i) is 5 amended by striking ‘‘or the aggregate amount billed’’. 6 (b) EFFECTIVE DATE.—The amendments made by 7 subsection (b) shall apply to expenses paid after December 8 31, 2015, for education furnished in academic periods be9 ginning after such date. 12 TITLE III—MISCELLANEOUS PROVISIONS Subtitle A—Family Tax Relief 13 SEC. 301. EXCLUSION FOR AMOUNTS RECEIVED UNDER 14 THE WORK COLLEGES PROGRAM. 10 11 15 (a) IN GENERAL.—Paragraph (2) of section 117(c) 16 is amended by striking ‘‘or’’ at the end of subparagraph 17 (A), by striking the period at the end of subparagraph 18 (B) and inserting ‘‘, or’’, and by adding at the end the 19 following new subparagraph: 20 ‘‘(C) a comprehensive student work-learn- 21 ing-service program (as defined in section 22 448(e) of the Higher Education Act of 1965) 23 operated by a work college (as defined in such 24 section).’’. 25 (b) EFFECTIVE DATE.—The amendments made by 26 this section shall apply to amounts received in taxable L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00121 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 122 1 years beginning after the date of the enactment of this 2 Act. 3 SEC. 302. IMPROVEMENTS TO SECTION 529 ACCOUNTS. 4 (a) COMPUTER TECHNOLOGY 5 MANENTLY 6 CATION 7 8 ALLOWED AS A AND EQUIPMENT PER- QUALIFIED HIGHER EDU- EXPENSE FOR SECTION 529 ACCOUNTS.— (1) IN GENERAL.—Section 529(e)(3)(A)(iii) is amended to read as follows: 9 ‘‘(iii) expenses for the purchase of 10 computer or peripheral equipment (as de- 11 fined in section 168(i)(2)(B)), computer 12 software 13 197(e)(3)(B)), or Internet access and re- 14 lated services, if such equipment, software, 15 or services are to be used primarily by the 16 beneficiary during any of the years the 17 beneficiary is enrolled at an eligible edu- 18 cational institution.’’. 19 (as (2) EFFECTIVE defined DATE.—The in section amendment made 20 by this subsection shall apply to taxable years begin- 21 ning after December 31, 2014. 22 (b) ELIMINATION OF DISTRIBUTION AGGREGATION 23 REQUIREMENTS.— 24 25 (1) IN GENERAL.—Section 529(c)(3) is amend- ed by striking subparagraph (D). L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00122 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 123 1 (2) EFFECTIVE DATE.—The amendment made 2 by this subsection shall apply to distributions after 3 December 31, 2014. 4 (c) RECONTRIBUTION OF REFUNDED AMOUNTS.— 5 (1) IN GENERAL.—Section 529(c)(3), as 6 amended by subsection (b), is amended by adding at 7 the end the following new subparagraph: 8 ‘‘(D) SPECIAL 9 RULE FOR CONTRIBUTIONS OF REFUNDED AMOUNTS.—In the case of a 10 beneficiary who receives a refund of any quali- 11 fied higher education expenses from an eligible 12 educational institution, subparagraph (A) shall 13 not apply to that portion of any distribution for 14 the taxable year which is recontributed to a 15 qualified tuition program of which such indi- 16 vidual is a beneficiary, but only to the extent 17 such recontribution is made not later than 60 18 days after the date of such refund and does not 19 exceed the refunded amount.’’. 20 (2) EFFECTIVE 21 (A) IN DATE.— GENERAL.—The amendment made 22 by this subsection shall apply with respect to 23 refunds of qualified higher education expenses 24 after December 31, 2014. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00123 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 124 1 (B) TRANSITION RULE.—In the case of a 2 refund of qualified higher education expenses 3 received after December 31, 2014, and before 4 the date of the enactment of this Act, section 5 529(c)(3)(D) of the Internal Revenue Code of 6 1986 (as added by this subsection) shall be ap- 7 plied by substituting ‘‘not later than 60 days 8 after the date of the enactment of this subpara- 9 graph’’ for ‘‘not later than 60 days after the 10 11 date of such refund’’. SEC. 303. ELIMINATION OF RESIDENCY REQUIREMENT FOR 12 13 QUALIFIED ABLE PROGRAMS. (a) IN GENERAL.—Section 529A(b)(1) is amended by 14 striking subparagraph (C), by inserting ‘‘and’’ at the end 15 of subparagraph (B), and by redesignating subparagraph 16 (D) as subparagraph (C). 17 (b) CONFORMING AMENDMENTS.— 18 19 (1) The second sentence of section 529A(d)(3) is amended by striking ‘‘and State of residence’’. 20 (2) Section 529A(e) is amended by striking 21 paragraph (7). 22 (c) TECHNICAL AMENDMENTS.— 23 24 (1) Section 529A(d)(4) is amended by striking ‘‘section 4’’ and inserting ‘‘section 103’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00124 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 125 1 (2) Section 529A(c)(1)(C)(i) is amended by 2 striking ‘‘family member’’ and inserting ‘‘member of 3 the family’’. 4 (d) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to taxable years beginning after 6 December 31, 2014. 7 SEC. 304. EXCLUSION FOR WRONGFULLY INCARCERATED 8 INDIVIDUALS. 9 (a) IN GENERAL.—Part III of subchapter B of chap- 10 ter 1 is amended by inserting before section 140 the fol11 lowing new section: 12 ‘‘SEC. 139F. CERTAIN AMOUNTS RECEIVED BY WRONG- 13 FULLY INCARCERATED INDIVIDUALS. 14 ‘‘(a) EXCLUSION FROM GROSS INCOME.—In the case 15 of any wrongfully incarcerated individual, gross income 16 shall not include any civil damages, restitution, or other 17 monetary award (including compensatory or statutory 18 damages and restitution imposed in a criminal matter) re19 lating to the incarceration of such individual for the cov20 ered offense for which such individual was convicted. 21 ‘‘(b) WRONGFULLY INCARCERATED INDIVIDUAL.— 22 For purposes of this section, the term ‘wrongfully incar23 cerated individual’ means an individual— 24 ‘‘(1) who was convicted of a covered offense, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00125 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 126 1 ‘‘(2) who served all or part of a sentence of im- 2 prisonment relating to that covered offense, and 3 ‘‘(3)(A) who was pardoned, granted clemency, 4 or granted amnesty for that covered offense because 5 that individual was innocent of that covered offense, 6 or 7 ‘‘(B)(i) for whom the judgment of conviction for 8 that covered offense was reversed or vacated, and 9 ‘‘(ii) for whom the indictment, information, or 10 other accusatory instrument for that covered offense 11 was dismissed or who was found not guilty at a new 12 trial after the judgment of conviction for that cov- 13 ered offense was reversed or vacated. 14 ‘‘(c) COVERED OFFENSE.—For purposes of this sec- 15 tion, the term ‘covered offense’ means any criminal offense 16 under Federal or State law, and includes any criminal of17 fense arising from the same course of conduct as that 18 criminal offense.’’. 19 (b) CONFORMING AMENDMENT.—The table of sec- 20 tions for part III of subchapter B of chapter 1 is amended 21 by inserting after the item relating to section 139E the 22 following new item: ‘‘Sec. 139F. Certain amounts received by wrongfully incarcerated individuals.’’. 23 (c) EFFECTIVE DATE.—The amendments made by 24 this section shall apply to taxable years beginning before, 25 on, or after the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00126 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 127 1 (d) WAIVER OF LIMITATIONS.—If the credit or re- 2 fund of any overpayment of tax resulting from the applica3 tion of this Act to a period before the date of enactment 4 of this Act is prevented as of such date by the operation 5 of any law or rule of law (including res judicata), such 6 credit or refund may nevertheless be allowed or made if 7 the claim therefor is filed before the close of the 1-year 8 period beginning on the date of the enactment of this Act. 9 SEC. 305. CLARIFICATION OF SPECIAL RULE FOR CERTAIN 10 11 GOVERNMENTAL PLANS. (a) IN GENERAL.—Paragraph (1) of section 105(j) 12 is amended— 13 14 (1) by striking ‘‘the taxpayer’’ and inserting ‘‘a qualified taxpayer’’, and 15 (2) by striking ‘‘deceased plan participant’s 16 beneficiary’’ and inserting ‘‘deceased employee’s ben- 17 eficiary (other than an individual described in para- 18 graph (3)(B))’’. 19 (b) QUALIFIED TAXPAYER.—Subsection (j) of section 20 105 is amended by adding at the end the following new 21 paragraph: 22 ‘‘(3) QUALIFIED TAXPAYER.—For purposes of 23 paragraph (1), with respect to an accident or health 24 plan described in paragraph (2), the term ‘qualified 25 taxpayer’ means a taxpayer who is— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00127 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 128 1 ‘‘(A) an employee, or 2 ‘‘(B) the spouse, dependent (as defined for 3 purposes of subsection (b)), or child (as defined 4 for purposes of such subsection) of an em- 5 ployee.’’. 6 (c) APPLICATION TO POLITICAL SUBDIVISIONS OF 7 STATES.—Paragraph (2) of section 105(j) is amended— 8 (1) by inserting ‘‘or established by or on behalf 9 of a State or political subdivision thereof’’ after 10 ‘‘public retirement system’’, and 11 (2) by inserting ‘‘or 501(c)(9)’’ after ‘‘section 12 115’’ in subparagraph (B). 13 (d) EFFECTIVE DATE.—The amendments made by 14 this section shall apply to payments after the date of the 15 enactment of this Act. 16 SEC. 306. ROLLOVERS PERMITTED FROM OTHER RETIRE- 17 MENT PLANS INTO SIMPLE RETIREMENT AC- 18 COUNTS. 19 (a) IN GENERAL.—Section 408(p)(1)(B) is amended 20 by inserting ‘‘except in the case of a rollover contribution 21 described in subsection (d)(3)(G) or a rollover contribution 22 otherwise described in subsection (d)(3) or in section 23 402(c), 403(a)(4), 403(b)(8), or 457(e)(16), which is 24 made after the 2-year period described in section L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00128 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 129 1 72(t)(6),’’ before ‘‘with respect to which the only contribu2 tions allowed’’. 3 (b) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to contributions made after the 5 date of the enactment of this Act. 6 SEC. 307. TECHNICAL AMENDMENT RELATING TO ROLL- 7 OVER 8 AMOUNTS. 9 OF CERTAIN AIRLINE PAYMENT (a) IN GENERAL.—Section 1106(a) of the FAA Mod- 10 ernization and Reform Act of 2012 (26 U.S.C. 408 note) 11 is amended by adding at the end the following new para12 graph: 13 ‘‘(6) SPECIAL RULE FOR CERTAIN AIRLINE PAY- 14 MENT AMOUNTS.—In 15 became an airline payment amount by reason of the 16 amendments made by section 1(b) of Public Law 17 113–243 (26 U.S.C. 408 note), paragraph (1) shall 18 be applied by substituting ‘(or, if later, within the 19 period beginning on December 18, 2014, and ending 20 on the date which is 180 days after the date of en- 21 actment of the Protecting Americans from Tax 22 Hikes Act of 2015)’ for ‘(or, if later, within 180 23 days of the date of the enactment of this Act)’.’’. the case of any amount which L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00129 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 130 1 (b) EFFECTIVE DATE.—The amendment made by 2 this section shall take effect as if included in Public Law 3 113–243 (26 U.S.C. 408 note). 4 SEC. 308. TREATMENT OF EARLY RETIREMENT DISTRIBU- 5 TIONS FOR NUCLEAR MATERIALS COURIERS, 6 UNITED STATES CAPITOL POLICE, SUPREME 7 COURT POLICE, AND DIPLOMATIC SECURITY 8 SPECIAL AGENTS. 9 (a) IN GENERAL.—Section 72(t)(10)(B)(ii), as added 10 by Public Law 114–26, is amended by striking ‘‘or any’’ 11 and inserting ‘‘any’’ and by inserting before the period at 12 the end the following: ‘‘, any nuclear materials courier de13 scribed in section 8331(27) or 8401(33) of such title, any 14 member of the United States Capitol Police, any member 15 of the Supreme Court Police, or any diplomatic security 16 special agent of the Department of State’’. 17 (b) EFFECTIVE DATE.—The amendments made by 18 this section shall apply to distributions after December 31, 19 2015. 20 SEC. 309. PREVENTION OF EXTENSION OF TAX COLLEC- 21 TION PERIOD FOR MEMBERS OF THE ARMED 22 FORCES WHO ARE HOSPITALIZED AS A RE- 23 SULT OF COMBAT ZONE INJURIES. 24 (a) IN GENERAL.—Section 7508(e) is amended by 25 adding at the end the following new paragraph: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00130 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 131 1 ‘‘(3) COLLECTION PERIOD AFTER ASSESSMENT 2 NOT EXTENDED AS A RESULT OF HOSPITALIZA- 3 TION.—With 4 qualified hospitalization described in subsection (a) 5 and the next 180 days thereafter, subsection (a) 6 shall not apply in the application of section 6502.’’. 7 (b) EFFECTIVE DATE.—The amendment made by respect to any period of continuous 8 this section shall apply to taxes assessed before, on, or 9 after the date of the enactment of this Act. 11 Subtitle B—Real Estate Investment Trusts 12 SEC. 311. RESTRICTION ON TAX-FREE SPINOFFS INVOLV- 10 13 14 ING REITS. (a) IN GENERAL.—Section 355 is amended by adding 15 at the end the following new subsection: 16 ‘‘(h) RESTRICTION ON DISTRIBUTIONS INVOLVING 17 REAL ESTATE INVESTMENT TRUSTS.— 18 ‘‘(1) IN GENERAL.—This section (and so much 19 of section 356 as relates to this section) shall not 20 apply to any distribution if either the distributing 21 corporation or controlled corporation is a real estate 22 investment trust. 23 ‘‘(2) EXCEPTIONS 24 FOR CERTAIN SPINOFFS.— ‘‘(A) SPINOFFS 25 OF A REAL ESTATE IN- VESTMENT TRUST BY ANOTHER REAL ESTATE L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00131 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 132 1 INVESTMENT TRUST.—Paragraph 2 apply to any distribution if, immediately after 3 the distribution, the distributing corporation 4 and the controlled corporation are both real es- 5 tate investment trusts. 6 ‘‘(B) SPINOFFS OF (1) shall not CERTAIN 7 REIT SUBSIDIARIES.—Paragraph 8 apply to any distribution if— TAXABLE (1) shall not 9 ‘‘(i) the distributing corporation has 10 been a real estate investment trust at all 11 times during the 3-year period ending on 12 the date of such distribution, 13 ‘‘(ii) the controlled corporation has 14 been a taxable REIT subsidiary (as de- 15 fined in section 856(l)) of the distributing 16 corporation at all times during such pe- 17 riod, and 18 ‘‘(iii) the distributing corporation had 19 control (as defined in section 368(c) ap- 20 plied by taking into account stock owned 21 directly or indirectly, including through 22 one or more corporations or partnerships, 23 by the distributing corporation) of the con- 24 trolled corporation at all times during such 25 period. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00132 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 133 1 A controlled corporation will be treated as 2 meeting the requirements of clauses (ii) and 3 (iii) if the stock of such corporation was distrib- 4 uted by a taxable REIT subsidiary in a trans- 5 action to which this section (or so much of sec- 6 tion 356 as relates to this section) applies and 7 the assets of such corporation consist solely of 8 the stock or assets of assets held by one or 9 more taxable REIT subsidiaries of the distrib- 10 uting corporation meeting the requirements of 11 clauses (ii) and (iii). For purposes of clause 12 (iii), control of a partnership means ownership 13 of 80 percent of the profits interest and 80 per- 14 cent of the capital interests.’’. 15 (b) PREVENTION OF REIT ELECTION FOLLOWING 16 TAX-FREE SPIN OFF.—Section 856(c) is amended by re17 designating paragraph (8) as paragraph (9) and by insert18 ing after paragraph (7) the following new paragraph: 19 ‘‘(8) ELECTION AFTER TAX-FREE REORGANIZA- 20 TION.—If 21 tion or a controlled corporation (other than a con- 22 trolled corporation with respect to a distribution de- 23 scribed in section 355(h)(2)(A)) with respect to any 24 distribution to which section 355 (or so much of sec- 25 tion 356 as relates to section 355) applied, such cor- a corporation was a distributing corpora- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00133 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 134 1 poration (and any successor corporation) shall not 2 be eligible to make any election under paragraph (1) 3 for any taxable year beginning before the end of the 4 10-year period beginning on the date of such dis- 5 tribution.’’. 6 (c) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to distributions on or after Decem8 ber 7, 2015, but shall not apply to any distribution pursu9 ant to a transaction described in a ruling request initially 10 submitted to the Internal Revenue Service on or before 11 such date, which request has not been withdrawn and with 12 respect to which a ruling has not been issued or denied 13 in its entirety as of such date. 14 SEC. 312. REDUCTION IN PERCENTAGE LIMITATION ON AS- 15 SETS OF REIT WHICH MAY BE TAXABLE REIT 16 SUBSIDIARIES. 17 (a) IN GENERAL.—Section 856(c)(4)(B)(ii) is 18 amended by striking ‘‘25 percent’’ and inserting ‘‘20 per19 cent’’. 20 (b) EFFECTIVE DATE.—The amendment made by 21 this section shall apply to taxable years beginning after 22 December 31, 2017. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00134 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 135 1 SEC. 313. PROHIBITED TRANSACTION SAFE HARBORS. 2 (a) ALTERNATIVE 3–YEAR AVERAGING TEST 3 PERCENTAGE 4 OF FOR ASSETS THAT CAN BE SOLD ANNU- ALLY.— 5 (1) IN GENERAL.—Clause (iii) of section 6 857(b)(6)(C) is amended by inserting before the 7 semicolon at the end the following: ‘‘, or (IV) the 8 trust satisfies the requirements of subclause (II) ap- 9 plied by substituting ‘20 percent’ for ‘10 percent’ 10 and the 3-year average adjusted bases percentage 11 for the taxable year (as defined in subparagraph 12 (G)) does not exceed 10 percent, or (V) the trust 13 satisfies the requirements of subclause (III) applied 14 by substituting ‘20 percent’ for ‘10 percent’ and the 15 3-year average fair market value percentage for the 16 taxable year (as defined in subparagraph (H)) does 17 not exceed 10 percent’’. 18 (2) 3-YEAR AVERAGE ADJUSTED BASES AND 19 FAIR 20 (6) of section 857(b) is amended by redesignating 21 subparagraphs (G) and (H) as subparagraphs (I) 22 and (J), respectively, and by inserting after subpara- 23 graph (F) the following new subparagraphs: MARKET 24 PERCENTAGES.—Paragraph VALUE ‘‘(G) 3-YEAR AVERAGE ADJUSTED BASES 25 PERCENTAGE.—The 26 justed bases percentage’ means, with respect to term ‘3-year average ad- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00135 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 136 1 any taxable year, the ratio (expressed as a per- 2 centage) of— 3 ‘‘(i) the aggregate adjusted bases (as 4 determined for purposes of computing 5 earnings and profits) of property (other 6 than sales of foreclosure property or sales 7 to which section 1033 applies) sold during 8 the 3 taxable year period ending with such 9 taxable year, divided by 10 ‘‘(ii) the sum of the aggregate ad- 11 justed bases (as so determined) of all of 12 the assets of the trust as of the beginning 13 of each of the 3 taxable years which are 14 part of the period referred to in clause (i). 15 ‘‘(H) 3-YEAR AVERAGE FAIR MARKET 16 VALUE PERCENTAGE.—The 17 age fair market value percentage’ means, with 18 respect to any taxable year, the ratio (expressed 19 as a percentage) of— term ‘3-year aver- 20 ‘‘(i) the fair market value of property 21 (other than sales of foreclosure property or 22 sales to which section 1033 applies) sold 23 during the 3 taxable year period ending 24 with such taxable year, divided by L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00136 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 137 1 ‘‘(ii) the sum of the fair market value 2 of all of the assets of the trust as of the 3 beginning of each of the 3 taxable years 4 which are part of the period referred to in 5 clause (i).’’. 6 (3) CONFORMING AMENDMENTS.—Clause (iv) 7 of section 857(b)(6)(D) is amended by adding ‘‘or’’ 8 at the end of subclause (III) and by adding at the 9 end the following new subclauses: 10 ‘‘(IV) the trust satisfies the re- 11 quirements of subclause (II) applied 12 by substituting ‘20 percent’ for ‘10 13 percent’ and the 3-year average ad- 14 justed bases percentage for the tax- 15 able year (as defined in subparagraph 16 (G)) does not exceed 10 percent, or 17 ‘‘(V) the trust satisfies the re- 18 quirements of subclause (III) applied 19 by substituting ‘20 percent’ for ‘10 20 percent’ and the 3-year average fair 21 market value percentage for the tax- 22 able year (as defined in subparagraph 23 (H)) does not exceed 10 percent,’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00137 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 138 1 2 (b) APPLICATION OF OF SAFE HARBORS INDEPENDENT DETERMINATION WHETHER REAL ESTATE ASSET IS 3 INVENTORY PROPERTY.— 4 (1) IN GENERAL.—Subparagraphs (C) and (D) 5 of section 857(b)(6) are each amended by striking 6 ‘‘and which is described in section 1221(a)(1)’’ in 7 the matter preceding clause (i). 8 9 10 (2) NO INFERENCE FROM SAFE HARBORS.— Subparagraph (F) of section 857(b)(6) is amended to read as follows: 11 ‘‘(F) NO INFERENCE WITH RESPECT TO 12 TREATMENT AS INVENTORY PROPERTY.—The 13 determination of whether property is described 14 in section 1221(a)(1) shall be made without re- 15 gard to this paragraph.’’. 16 (c) EFFECTIVE DATES.— 17 (1) IN GENERAL.—The amendments made by 18 subsection (a) shall apply to taxable years beginning 19 after the date of the enactment of this Act. 20 (2) APPLICATION 21 (A) IN OF SAFE HARBORS.— GENERAL.—Except as provided in 22 subparagraph (B), the amendments made by 23 subsection (b) shall take effect as if included in 24 section 3051 of the Housing Assistance Tax 25 Act of 2008. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00138 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 139 1 (B) RETROACTIVE APPLICATION OF NO IN- 2 FERENCE NOT APPLICABLE TO CERTAIN TIM- 3 BER PROPERTY PREVIOUSLY TREATED AS NOT 4 INVENTORY PROPERTY.—The 5 by subsection (b)(2) shall not apply to any sale 6 of property to which section 857(b)(6)(G) of the 7 Internal Revenue Code of 1986 (as in effect on 8 the day before the date of the enactment of this 9 Act) applies. 10 amendment made SEC. 314. REPEAL OF PREFERENTIAL DIVIDEND RULE FOR 11 12 PUBLICLY OFFERED REITS. (a) IN GENERAL.—Section 562(c) is amended by in- 13 serting ‘‘or a publicly offered REIT’’ after ‘‘a publicly of14 fered regulated investment company (as defined in section 15 67(c)(2)(B))’’. 16 (b) PUBLICLY OFFERED REIT.—Section 562(c), as 17 amended by subsection (a), is amended— 18 19 (1) by striking ‘‘Except in the case of’’ and inserting the following: 20 ‘‘(1) IN 21 (2) by adding at the end the following new 22 GENERAL.—Except in the case of’’, and paragraph: 23 ‘‘(2) PUBLICLY OFFERED REIT.—For purposes 24 of this subsection, the term ‘publicly offered REIT’ 25 means a real estate investment trust which is re- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00139 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 140 1 quired to file annual and periodic reports with the 2 Securities and Exchange Commission under the Se- 3 curities Exchange Act of 1934.’’. 4 (c) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to distributions in taxable years 6 beginning after December 31, 2014. 7 SEC. 315. AUTHORITY FOR ALTERNATIVE REMEDIES TO AD- 8 DRESS CERTAIN REIT DISTRIBUTION FAIL- 9 URES. 10 (a) IN GENERAL.—Subsection (e) of section 562 is 11 amended— 12 13 (1) by striking ‘‘In the case of a real estate investment trust’’ and inserting the following: 14 ‘‘(1) DETERMINATION OF EARNINGS AND PROF- 15 ITS FOR PURPOSES OF DIVIDENDS PAID DEDUC- 16 TION.—In 17 trust’’, and 18 19 the case of a real estate investment (2) by adding at the end the following new paragraph: 20 ‘‘(2) AUTHORITY TO PROVIDE ALTERNATIVE 21 REMEDIES FOR CERTAIN FAILURES.—In 22 a failure of a distribution by a real estate investment 23 trust to comply with the requirements of subsection 24 (c), the Secretary may provide an appropriate rem- 25 edy to cure such failure in lieu of not considering the case of L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00140 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 141 1 the distribution to be a dividend for purposes of 2 computing the dividends paid deduction if— 3 ‘‘(A) the Secretary determines that such 4 failure is inadvertent or is due to reasonable 5 cause and not due to willful neglect, or 6 ‘‘(B) such failure is of a type of failure 7 which the Secretary has identified for purposes 8 of this paragraph as being described in sub- 9 paragraph (A).’’. 10 (b) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to distributions in taxable years 12 beginning after December 31, 2015. 13 SEC. 316. LIMITATIONS ON DESIGNATION OF DIVIDENDS BY 14 REITS. 15 (a) IN GENERAL.—Section 857 is amended by redes- 16 ignating subsection (g) as subsection (h) and by inserting 17 after subsection (f) the following new subsection: 18 19 ‘‘(g) LIMITATIONS ON DESIGNATION OF DIVI- DENDS.— 20 ‘‘(1) OVERALL LIMITATION.—The aggregate 21 amount of dividends designated by a real estate in- 22 vestment trust under subsections (b)(3)(C) and 23 (c)(2)(A) with respect to any taxable year may not 24 exceed the dividends paid by such trust with respect 25 to such year. For purposes of the preceding sen- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00141 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 142 1 tence, dividends paid after the close of the taxable 2 year described in section 858 shall be treated as 3 paid with respect to such year. 4 ‘‘(2) PROPORTIONALITY.—The Secretary may 5 prescribe regulations or other guidance requiring the 6 proportionality of the designation of particular types 7 of dividends among shares or beneficial interests of 8 a real estate investment trust.’’. 9 (b) EFFECTIVE DATE.—The amendments made by 10 this section shall apply to distributions in taxable years 11 beginning after December 31, 2015. 12 SEC. 317. DEBT INSTRUMENTS OF PUBLICLY OFFERED 13 REITS AND MORTGAGES TREATED AS REAL 14 ESTATE ASSETS. 15 (a) DEBT INSTRUMENTS OF PUBLICLY OFFERED 16 REITS TREATED AS REAL ESTATE ASSETS.— 17 18 (1) IN GENERAL.—Subparagraph (B) of section 856(c)(5) is amended— 19 (A) by striking ‘‘and shares’’ and inserting 20 ‘‘, shares’’, and 21 (B) by inserting ‘‘, and debt instruments 22 issued by publicly offered REITs’’ before the 23 period at the end of the first sentence. 24 (2) INCOME 25 STRUMENTS OF FROM NONQUALIFIED DEBT INPUBLICLY OFFERED REITS NOT L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00142 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 143 1 QUALIFIED FOR PURPOSES OF SATISFYING THE 75 2 PERCENT GROSS INCOME TEST.—Subparagraph 3 of section 856(c)(3) is amended by inserting ‘‘(other 4 than a nonqualified publicly offered REIT debt in- 5 strument)’’ after ‘‘real estate asset’’. 6 (3) 25 (H) PERCENT ASSET LIMITATION ON HOLD- 7 ING OF NONQUALIFIED DEBT INSTRUMENTS OF PUB- 8 LICLY OFFERED REITS.—Subparagraph 9 tion 856(c)(4) is amended by redesignating clause 10 (iii) as clause (iv) and by inserting after clause (ii) 11 the following new clause: (B) of sec- 12 ‘‘(iii) not more than 25 percent of the 13 value of its total assets is represented by 14 nonqualified publicly offered REIT debt in- 15 struments, and’’. 16 (4) DEFINITIONS RELATED TO DEBT INSTRU- 17 MENTS OF PUBLICLY OFFERED REITS.—Paragraph 18 (5) of section 856(c) is amended by adding at the 19 end the following new subparagraph: 20 ‘‘(L) DEFINITIONS 21 RELATED TO DEBT IN- STRUMENTS OF PUBLICLY OFFERED REITS.— 22 ‘‘(i) PUBLICLY OFFERED REIT.—The 23 term ‘publicly offered REIT’ has the 24 meaning given such term by section 25 562(c)(2). L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00143 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 144 1 ‘‘(ii) NONQUALIFIED PUBLICLY OF- 2 FERED 3 term ‘nonqualified publicly offered REIT 4 debt instrument’ means any real estate 5 asset which would cease to be a real estate 6 asset if subparagraph (B) were applied 7 without regard to the reference to ‘debt in- 8 struments 9 REITs’.’’. 10 (b) INTERESTS REIT IN INSTRUMENT.—The DEBT issued by MORTGAGES 11 REAL PROPERTY TREATED AS publicly ON offered INTERESTS IN REAL ESTATE ASSETS.— 12 Subparagraph (B) of section 856(c)(5) is amended by in13 serting ‘‘or on interests in real property’’ after ‘‘interests 14 in mortgages on real property’’. 15 (c) EFFECTIVE DATE.—The amendments made by 16 this section shall apply to taxable years beginning after 17 December 31, 2015. 18 SEC. 318. ASSET AND INCOME TEST CLARIFICATION RE- 19 20 GARDING ANCILLARY PERSONAL PROPERTY. (a) IN GENERAL.—Subsection (c) of section 856, as 21 amended by the preceding provisions of this Act, is amend22 ed by redesignating paragraph (9) as paragraph (10) and 23 by inserting after paragraph (8) the following new para24 graph: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00144 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 145 1 ‘‘(9) SPECIAL RULES FOR CERTAIN PERSONAL 2 PROPERTY WHICH IS ANCILLARY TO REAL PROP- 3 ERTY.— 4 ‘‘(A) CERTAIN PERSONAL PROPERTY 5 LEASED IN CONNECTION WITH REAL PROP- 6 ERTY.—Personal 7 real estate asset for purposes of paragraph 8 (4)(A) to the extent that rents attributable to 9 such personal property are treated as rents 10 from real property under subsection (d)(1)(C). 11 ‘‘(B) property shall be treated as a CERTAIN PERSONAL PROPERTY 12 MORTGAGED IN CONNECTION WITH REAL PROP- 13 ERTY.—In 14 a mortgage on both real property and personal 15 property, if the fair market value of such per- 16 sonal property does not exceed 15 percent of 17 the total fair market value of all such property, 18 such obligation shall be treated— 19 the case of an obligation secured by ‘‘(i) for purposes of paragraph (3)(B), 20 as an obligation described therein, and 21 ‘‘(ii) 22 for purposes of paragraph (4)(A), as a real estate asset. 23 For purposes of the preceding sentence, the fair 24 market value of all such property shall be deter- 25 mined in the same manner as the fair market L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00145 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 146 1 value of real property is determined for pur- 2 poses of apportioning interest income between 3 real property and personal property under para- 4 graph (3)(B).’’. 5 (b) EFFECTIVE DATE.—The amendments made by 6 this section shall apply to taxable years beginning after 7 December 31, 2015. 8 SEC. 319. HEDGING PROVISIONS. 9 10 (a) MODIFICATION OF A TO PERMIT THE HEDGING TRANSACTION USING TERMINATION AN ADDITIONAL 11 HEDGING INSTRUMENT.—Subparagraph (G) of section 12 856(c)(5) is amended by striking ‘‘and’’ at the end of 13 clause (i), by striking the period at the end of clause (ii) 14 and inserting ‘‘, and’’, and by adding at the end the fol15 lowing new clause: 16 ‘‘(iii) if— 17 ‘‘(I) a real estate investment 18 trust enters into one or more positions 19 described in clause (i) with respect to 20 indebtedness described in clause (i) or 21 one or more positions described in 22 clause (ii) with respect to property 23 which generates income or gain de- 24 scribed in paragraph (2) or (3), L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00146 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 147 1 ‘‘(II) any portion of such indebt- 2 edness is extinguished or any portion 3 of such property is disposed of, and 4 ‘‘(III) in connection with such ex- 5 tinguishment 6 trust enters into one or more trans- 7 actions which would be hedging trans- 8 actions described in clause (ii) or (iii) 9 of section 1221(b)(2)(A) with respect 10 to any position referred to in sub- 11 clause (I) if such position were ordi- 12 nary property, or disposition, such 13 any income of such trust from any position 14 referred to in subclause (I) and from any 15 transaction referred to in subclause (III) 16 (including gain from the termination of 17 any such position or transaction) shall not 18 constitute gross income under paragraphs 19 (2) and (3) to the extent that such trans- 20 action hedges such position.’’. 21 (b) IDENTIFICATION REQUIREMENTS.— 22 (1) IN GENERAL.—Subparagraph (G) of section 23 856(c)(5), as amended by subsection (a), is amended 24 by striking ‘‘and’’ at the end of clause (ii), by strik- 25 ing the period at the end of clause (iii) and inserting L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00147 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 148 1 ‘‘, and’’, and by adding at the end the following new 2 clause: 3 ‘‘(iv) clauses (i), (ii), and (iii) shall 4 not apply with respect to any transaction 5 unless such transaction satisfies the identi- 6 fication requirement described in section 7 1221(a)(7) (determined after taking into 8 account any curative provisions provided 9 under the regulations referred to there- 10 in).’’. 11 12 (2) CONFORMING AMENDMENTS.—Subpara- graph (G) of section 856(c)(5) is amended— 13 (A) by striking ‘‘which is clearly identified 14 pursuant to section 1221(a)(7)’’ in clause (i), 15 and 16 (B) by striking ‘‘, but only if such trans- 17 action is clearly identified as such before the 18 close of the day on which it was acquired, origi- 19 nated, or entered into (or such other time as 20 the Secretary may prescribe)’’ in clause (ii). 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to taxable years beginning after 23 December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00148 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 149 1 SEC. 320. MODIFICATION OF REIT EARNINGS AND PROFITS 2 CALCULATION TO AVOID DUPLICATE TAX- 3 ATION. 4 (a) EARNINGS 5 AMOUNTS ALLOWED AND IN PROFITS NOT INCREASED COMPUTING TAXABLE INCOME BY IN 6 PRIOR YEARS.—Section 857(d) is amended— 7 8 (1) by amending paragraph (1) to read as follows: 9 ‘‘(1) IN GENERAL.—The earnings and profits of 10 a real estate investment trust for any taxable year 11 (but not its accumulated earnings) shall not be re- 12 duced by any amount which— 13 ‘‘(A) is not allowable in computing its tax- 14 able income for such taxable year, and 15 ‘‘(B) was not allowable in computing its 16 taxable income for any prior taxable year.’’, and 17 (2) by adding at the end the following new 18 paragraphs: 19 ‘‘(4) REAL ESTATE INVESTMENT TRUST.—For 20 purposes of this subsection, the term ‘real estate in- 21 vestment trust’ includes a domestic corporation, 22 trust, or association which is a real estate invest- 23 ment trust determined without regard to the require- 24 ments of subsection (a). 25 ‘‘(5) SPECIAL 26 RULES FOR DETERMINING EARN- INGS AND PROFITS FOR PURPOSES OF THE DEDUC- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00149 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 150 1 TION FOR DIVIDENDS PAID.—For 2 determining the earnings and profits of a real estate 3 investment trust for purposes of the deduction for 4 dividends paid, see section 562(e)(1).’’. 5 (b) EXCEPTION FOR PURPOSES special rules for OF DETERMINING 6 DIVIDENDS PAID DEDUCTION.—Section 562(e)(1), as 7 amended by the preceding provisions of this Act, is amend8 ed by striking ‘‘deduction, the earnings’’ and all that fol9 lows and inserting the following: ‘‘deduction— 10 ‘‘(A) the earnings and profits of such trust 11 for any taxable year (but not its accumulated 12 earnings) shall be increased by the amount of 13 gain (if any) on the sale or exchange of real 14 property which is taken into account in deter- 15 mining the taxable income of such trust for 16 such taxable year (and not otherwise taken into 17 account in determining such earnings and prof- 18 its), and 19 ‘‘(B) section 857(d)(1) shall be applied 20 without regard to subparagraph (B) thereof.’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to taxable years beginning after 23 December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00150 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 151 1 SEC. 321. TREATMENT OF CERTAIN SERVICES PROVIDED 2 BY TAXABLE REIT SUBSIDIARIES. 3 (a) TAXABLE REIT SUBSIDIARIES TREATED 4 SAME MANNER AS INDEPENDENT CONTRACTORS IN FOR 5 CERTAIN PURPOSES.— 6 (1) MARKETING AND DEVELOPMENT EXPENSES 7 UNDER RENTAL PROPERTY SAFE HARBOR.—Clause 8 (v) of section 857(b)(6)(C) is amended by inserting 9 ‘‘or a taxable REIT subsidiary’’ before the period at 10 the end. 11 (2) MARKETING EXPENSES UNDER TIMBER 12 SAFE HARBOR.—Clause 13 is amended by striking ‘‘, in the case of a sale on 14 or before the termination date,’’. 15 (3) FORECLOSURE (v) of section 857(b)(6)(D) PROPERTY GRACE PERIOD.— 16 Subparagraph (C) of section 856(e)(4) is amended 17 by inserting ‘‘or through a taxable REIT subsidiary’’ 18 after ‘‘receive any income’’. 19 (b) TAX 20 ON REDETERMINED TRS SERVICE IN- COME.— 21 (1) IN GENERAL.—Subparagraph (A) of section 22 857(b)(7) is amended by striking ‘‘and excess inter- 23 est’’ and inserting ‘‘excess interest, and redeter- 24 mined TRS service income’’. 25 26 (2) REDETERMINED TRS SERVICE INCOME.— Paragraph (7) of section 857(b) is amended by re- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00151 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 152 1 designating subparagraphs (E) and (F) as subpara- 2 graphs (F) and (G), respectively, and inserting after 3 subparagraph (D) the following new subparagraph: 4 ‘‘(E) REDETERMINED 5 TRS SERVICE IN- COME.— 6 ‘‘(i) IN GENERAL.—The term ‘redeter- 7 mined TRS service income’ means gross 8 income of a taxable REIT subsidiary of a 9 real estate investment trust attributable to 10 services provided to, or on behalf of, such 11 trust (less deductions properly allocable 12 thereto) to the extent the amount of such 13 income (less such deductions) would (but 14 for subparagraph (F)) be increased on dis- 15 tribution, 16 under section 482. 17 apportionment, ‘‘(ii) COORDINATION or allocation WITH REDETER- 18 MINED RENTS.—Clause 19 with respect to gross income attributable 20 to services furnished or rendered to a ten- 21 ant of the real estate investment trust (or 22 to deductions properly allocable thereto).’’. 23 24 (3) CONFORMING (i) shall not apply AMENDMENTS.—Subpara- graphs (B)(i) and (C) of section 857(b)(7) are each L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00152 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 153 1 amended by striking ‘‘subparagraph (E)’’ and insert- 2 ing ‘‘subparagraph (F)’’. 3 (c) EFFECTIVE DATE.—The amendments made by 4 this section shall apply to taxable years beginning after 5 December 31, 2015. 6 SEC. 322. EXCEPTION FROM FIRPTA FOR CERTAIN STOCK 7 8 OF REITS. (a) MODIFICATIONS OF OWNERSHIP RULES.— 9 (1) IN GENERAL.—Section 897 is amended by 10 adding at the end the following new subsection: 11 ‘‘(k) SPECIAL RULES RELATING TO REAL ESTATE 12 INVESTMENT TRUSTS.— 13 ‘‘(1) INCREASE IN PERCENTAGE OWNERSHIP 14 FOR EXCEPTIONS FOR PERSONS HOLDING PUBLICLY 15 TRADED STOCK.— 16 ‘‘(A) DISPOSITIONS.—In the case of any 17 disposition of stock in a real estate investment 18 trust, paragraphs (3) and (6)(C) of subsection 19 (c) shall each be applied by substituting ‘more 20 than 10 percent’ for ‘more than 5 percent’. 21 ‘‘(B) DISTRIBUTIONS.—In the case of any 22 distribution from a real estate investment trust, 23 subsection (h)(1) shall be applied by sub- 24 stituting ‘10 percent’ for ‘5 percent’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00153 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 154 1 2 ‘‘(2) STOCK HELD BY QUALIFIED SHARE- HOLDERS NOT TREATED AS USRPI.— 3 ‘‘(A) IN 4 GENERAL.—Except as provided in subparagraph (B)— 5 ‘‘(i) stock of a real estate investment 6 trust which is held directly (or indirectly 7 through 1 or more partnerships) by a 8 qualified shareholder shall not be treated 9 as a United States real property interest, 10 and 11 ‘‘(ii) notwithstanding subsection 12 (h)(1), any distribution to a qualified 13 shareholder shall not be treated as gain 14 recognized from the sale or exchange of a 15 United States real property interest to the 16 extent the stock of the real estate invest- 17 ment trust held by such qualified share- 18 holder is not treated as a United States 19 real property interest under clause (i). 20 ‘‘(B) EXCEPTION.—In the case of a quali- 21 fied shareholder with 1 or more applicable in- 22 vestors— 23 ‘‘(i) subparagraph (A)(i) shall not 24 apply to so much of the stock of a real es- 25 tate investment trust held by a qualified L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00154 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 155 1 shareholder as bears the same ratio to the 2 value of the interests (other than interests 3 held solely as a creditor) held by such ap- 4 plicable investors in the qualified share- 5 holder bears to value of all interests (other 6 than interests held solely as a creditor) in 7 the qualified shareholder, and 8 ‘‘(ii) a percentage equal to the ratio 9 determined under clause (i) of the amounts 10 realized by the qualified shareholder with 11 respect to any disposition of stock in the 12 real estate investment trust or with respect 13 to any distribution from the real estate in- 14 vestment trust attributable to gain from 15 sales or exchanges of a United States real 16 property interest shall be treated as 17 amounts realized from the disposition of 18 United States real property interests. 19 ‘‘(C) SPECIAL RULE FOR CERTAIN DIS- 20 TRIBUTIONS 21 CHANGE.—If 22 vestment trust is treated as a sale or exchange 23 of stock under section 301(c)(3), 302, or 331 24 with respect to a qualified shareholder— TREATED AS SALE OR EX- a distribution by a real estate in- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00155 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 156 1 ‘‘(i) in the case of an applicable inves- 2 tor, subparagraph (B) shall apply with re- 3 spect to such distribution, and 4 ‘‘(ii) in the case of any other person, 5 such distribution shall be treated under 6 section 857(b)(3)(F) as a dividend from a 7 real 8 standing any other provision of this title. 9 ‘‘(D) APPLICABLE estate investment trust notwith- INVESTOR.—For pur- 10 poses of this paragraph, the term ‘applicable in- 11 vestor’ means, with respect to any qualified 12 shareholder holding stock in a real estate in- 13 vestment trust, a person (other than a qualified 14 shareholder) which— 15 ‘‘(i) holds an interest (other than an 16 interest solely as a creditor) in such quali- 17 fied shareholder, and 18 ‘‘(ii) holds more than 10 percent of 19 the stock of such real estate investment 20 trust (whether or not by reason of the per- 21 son’s ownership interest in the qualified 22 shareholder). 23 ‘‘(E) CONSTRUCTIVE OWNERSHIP 24 RULES.—For 25 and (C) and paragraph (4), the constructive purposes of subparagraphs (B)(i) L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00156 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 157 1 ownership rules under subsection (c)(6)(C) shall 2 apply. 3 ‘‘(3) QUALIFIED 4 SHAREHOLDER.—For purposes of this subsection— 5 ‘‘(A) IN 6 GENERAL.—The term ‘qualified shareholder’ means a foreign person which— 7 ‘‘(i)(I) is eligible for benefits of a com- 8 prehensive income tax treaty with the 9 United States which includes an exchange 10 of information program and the principal 11 class of interests of which is listed and reg- 12 ularly traded on 1 or more recognized 13 stock exchanges (as defined in such com- 14 prehensive income tax treaty), or 15 ‘‘(II) is a foreign partnership that is 16 created or organized under foreign law as 17 a limited partnership in a jurisdiction that 18 has an agreement for the exchange of in- 19 formation with respect to taxes with the 20 United States and has a class of limited 21 partnership units which is regularly traded 22 on the New York Stock Exchange or 23 Nasdaq Stock Market and such class of 24 limited partnership units value is greater L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00157 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 158 1 than 50 percent of the value of all the 2 partnership units, 3 ‘‘(ii) is a qualified collective invest- 4 ment vehicle, and 5 ‘‘(iii) maintains records on the iden- 6 tity of each person who, at any time during 7 the foreign person’s taxable year, holds di- 8 rectly 5 percent or more of the class of in- 9 terest described in subclause (I) or (II) of 10 clause (i), as the case may be. 11 ‘‘(B) QUALIFIED COLLECTIVE INVEST- 12 MENT VEHICLE.—For 13 section, the term ‘qualified collective investment 14 vehicle’ means a foreign person— purposes of this sub- 15 ‘‘(i) which, under the comprehensive 16 income tax treaty described in subpara- 17 graph (A)(i), is eligible for a reduced rate 18 of withholding with respect to ordinary 19 dividends paid by a real estate investment 20 trust even if such person holds more than 21 10 percent of the stock of such real estate 22 investment trust, 23 ‘‘(ii) which— 24 ‘‘(I) is a publicly traded partner- 25 ship (as defined in section 7704(b)) to L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00158 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 159 1 which subsection (a) of section 7704 2 does not apply, 3 ‘‘(II) is a withholding foreign 4 partnership for purposes of chapters 5 3, 4, and 61, 6 ‘‘(III) if such foreign partnership 7 were a United States corporation, 8 would be a United States real prop- 9 erty holding corporation (determined 10 without regard to paragraph (1)) at 11 any time during the 5-year period 12 ending on the date of disposition of, 13 or distribution with respect to, such 14 partnership’s interests in a real estate 15 investment trust, or 16 ‘‘(iii) which is designated as a quali- 17 fied collective investment vehicle by the 18 Secretary and is either— 19 ‘‘(I) fiscally transparent within 20 the meaning of section 894, or 21 ‘‘(II) required to include divi- 22 dends in its gross income, but entitled 23 to a deduction for distributions to per- 24 sons holding interests (other than in- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00159 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 160 1 terests solely as a creditor) in such 2 foreign person. 3 ‘‘(4) PARTNERSHIP 4 ‘‘(A) IN ALLOCATIONS.— GENERAL.—For the purposes of 5 this subsection, in the case of an applicable in- 6 vestor who is a nonresident alien individual or 7 a foreign corporation and is a partner in a part- 8 nership that is a qualified shareholder, if such 9 partner’s proportionate share of USRPI gain 10 for the taxable year exceeds such partner’s dis- 11 tributive share of USRPI gain for the taxable 12 year, then 13 ‘‘(i) such partner’s distributive share 14 of the amount of gain taken into account 15 under subsection (a)(1) by the partner for 16 the taxable year (determined without re- 17 gard to this paragraph) shall be increased 18 by the amount of such excess, and 19 ‘‘(ii) such partner’s distributive share 20 of items of income or gain for the taxable 21 year that are not treated as gain taken 22 into account under subsection (a)(1) (de- 23 termined without regard to this paragraph) 24 shall be decreased (but not below zero) by 25 the amount of such excess. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00160 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 161 1 ‘‘(B) USRPI GAIN.—For the purposes of 2 this paragraph, the term ‘USRPI gain’ means 3 the excess (if any) of— 4 ‘‘(i) the sum of— 5 ‘‘(I) any gain recognized from 6 the disposition of a United States real 7 property interest, and 8 ‘‘(II) any distribution by a real 9 estate investment trust that is treated 10 as gain recognized from the sale or 11 exchange of a United States real 12 property interest, over 13 ‘‘(ii) any loss recognized from the dis- 14 position of a United States real property 15 interest. 16 ‘‘(C) PROPORTIONATE SHARE OF USRPI 17 GAIN.—For 18 plicable 19 USRPI gain shall be determined on the basis of 20 such investor’s share of partnership items of in- 21 come or gain (excluding gain allocated under 22 section 704(c)), whichever results in the largest 23 proportionate share. If the investor’s share of 24 partnership items of income or gain (excluding 25 gain allocated under section 704(c)) may vary purposes of this paragraph, an ap- investor’s proportionate share of L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00161 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 162 1 during the period such investor is a partner in 2 the partnership, such share shall be the highest 3 share such investor may receive.’’. 4 (2) CONFORMING AMENDMENTS.— 5 (A) Section 897(c)(1)(A) is amended by in- 6 serting ‘‘or subsection (k)’’ after ‘‘subparagraph 7 (B)’’ in the matter preceding clause (i). 8 (B) Section 857(b)(3)(F) is amended by 9 inserting ‘‘or subparagraph (A)(ii) or (C) of 10 section 897(k)(2)’’ after ‘‘897(h)(1)’’. 11 (b) DETERMINATION OF DOMESTIC CONTROL.— 12 (1) SPECIAL 13 (A) IN OWNERSHIP RULES.— GENERAL.—Section 897(h)(4) is 14 amended by adding at the end the following 15 new subparagraph: 16 ‘‘(E) SPECIAL OWNERSHIP RULES.—For 17 purposes of determining the holder of stock 18 under subparagraphs (B) and (C)— 19 ‘‘(i) in the case of any class of stock 20 of the qualified investment entity which is 21 regularly traded on an established securi- 22 ties market in the United States, a person 23 holding less than 5 percent of such class of 24 stock at all times during the testing period 25 shall be treated as a United States person L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00162 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 163 1 unless the qualified investment entity has 2 actual knowledge that such person is not a 3 United States person, 4 ‘‘(ii) any stock in the qualified invest- 5 ment entity held by another qualified in- 6 vestment entity— 7 ‘‘(I) any class of stock of which 8 is regularly traded on an established 9 securities market, or 10 ‘‘(II) which is a regulated invest- 11 ment company which issues redeem- 12 able securities (within the meaning of 13 section 2 of the Investment Company 14 Act of 1940), 15 shall be treated as held by a foreign per- 16 son, except that if such other qualified in- 17 vestment entity is domestically controlled 18 (determined after application of this sub- 19 paragraph), such stock shall be treated as 20 held by a United States person, and 21 ‘‘(iii) any stock in the qualified invest- 22 ment entity held by any other qualified in- 23 vestment entity not described in subclause 24 (I) or (II) of clause (ii) shall only be treat- 25 ed as held by a United States person in L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00163 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 164 1 proportion to the stock of such other quali- 2 fied investment entity which is (or is treat- 3 ed under clause (ii) or (iii) as) held by a 4 United States person.’’. 5 (B) CONFORMING AMENDMENT.—The 6 heading for paragraph (4) of section 897(h) is 7 amended by inserting ‘‘AND 8 after ‘‘DEFINITIONS’’. 9 (2) TECHNICAL SPECIAL RULES’’ AMENDMENT.—Clause (ii) of 10 section 897(h)(4)(A) is amended by inserting ‘‘and 11 for purposes of determining whether a real estate in- 12 vestment trust is a domestically controlled qualified 13 investment entity under this subsection’’ after ‘‘real 14 estate investment trust’’. 15 (c) EFFECTIVE DATES.— 16 (1) IN GENERAL.—The amendments made by 17 subsection (a) shall take effect on the date of enact- 18 ment and shall apply to— 19 (A) any disposition on and after the date 20 of the enactment of this Act, and 21 (B) any distribution by a real estate in- 22 vestment trust on or after the date of the en- 23 actment of this Act which is treated as a deduc- 24 tion for a taxable year of such trust ending 25 after such date. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00164 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 165 1 (2) DETERMINATION OF DOMESTIC CONTROL.— 2 The amendments made by subsection (b)(1) shall 3 take effect on the date of the enactment of this Act. 4 (3) TECHNICAL AMENDMENT.—The amendment 5 made by subsection (b)(2) shall take effect on Janu- 6 ary 1, 2015. 7 SEC. 323. EXCEPTION FOR INTERESTS HELD BY FOREIGN 8 9 RETIREMENT OR PENSION FUNDS. (a) IN GENERAL.—Section 897, as amended by the 10 preceding provisions of this Act, is amended by adding at 11 the end the following new subsection: 12 ‘‘(l) EXCEPTION FOR INTERESTS HELD BY FOREIGN 13 PENSION FUNDS.— 14 ‘‘(1) IN GENERAL.—This section shall not apply 15 to any United States real property interest held di- 16 rectly (or indirectly through 1 or more partnerships) 17 by, or to any distribution received from a real estate 18 investment trust by— 19 ‘‘(A) a qualified foreign pension fund, or 20 ‘‘(B) any entity all of the interests of 21 which are held by a qualified foreign pension 22 fund. 23 ‘‘(2) QUALIFIED 24 FOREIGN PENSION FUND.— For purposes of this subsection, the term ‘qualified L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00165 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 166 1 foreign pension fund’ means any trust, corporation, 2 or other organization or arrangement— 3 ‘‘(A) which is created or organized under 4 the law of a country other than the United 5 States, 6 ‘‘(B) which is established to provide retire- 7 ment or pension benefits to participants or 8 beneficiaries that are current or former employ- 9 ees (or persons designated by such employees) 10 of one or more employers in consideration for 11 services rendered, 12 ‘‘(C) which does not have a single partici- 13 pant or beneficiary with a right to more than 14 five percent of its assets or income, 15 ‘‘(D) which is subject to government regu- 16 lation and provides annual information report- 17 ing about its beneficiaries to the relevant tax 18 authorities in the country in which it is estab- 19 lished or operates, and 20 ‘‘(E) with respect to which, under the laws 21 of the country in which it is established or oper- 22 ates— 23 ‘‘(i) contributions to such trust, cor- 24 poration, organization, or arrangement 25 which would otherwise be subject to tax L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00166 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 167 1 under such laws are deductible or excluded 2 from the gross income of such entity or 3 taxed at a reduced rate, or 4 ‘‘(ii) taxation of any investment in- 5 come of such trust, corporation, organiza- 6 tion or arrangement is deferred or such in- 7 come is taxed at a reduced rate. 8 ‘‘(3) REGULATIONS.—The Secretary shall pre- 9 scribe such regulations as may be necessary or ap- 10 propriate to carry out the purposes of this sub- 11 section.’’. 12 (b) EXEMPTION FROM WITHHOLDING.—Section 13 1445(f)(3) is amended by striking ‘‘any person’’ and all 14 that follows and inserting the following: ‘‘any person other 15 than— 16 ‘‘(A) a United States person, and 17 ‘‘(B) except as otherwise provided by the 18 Secretary, an entity with respect to which sec- 19 tion 897 does not apply by reason of subsection 20 (l) thereof.’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to dispositions and distributions 23 after the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00167 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 168 1 SEC. 324. INCREASE IN RATE OF WITHHOLDING OF TAX ON 2 DISPOSITIONS 3 PROPERTY INTERESTS. 4 OF UNITED STATES REAL (a) IN GENERAL.—Subsections (a), (e)(3), (e)(4), 5 and (e)(5) of section 1445 are each amended by striking 6 ‘‘10 percent’’ and inserting ‘‘15 percent’’. 7 (b) EXCEPTION FOR CERTAIN RESIDENCES.—Sec- 8 tion 1445(c) is amended by adding at the end the fol9 lowing new paragraph: 10 ‘‘(4) REDUCED RATE OF WITHHOLDING FOR 11 RESIDENCE WHERE AMOUNT REALIZED DOES NOT 12 EXCEED $1,000,000.—In the case of a disposition— 13 ‘‘(A) of property which is acquired by the 14 transferee for use by the transferee as a resi- 15 dence, 16 ‘‘(B) with respect to which the amount re- 17 alized for such property does not exceed 18 $1,000,000, and 19 ‘‘(C) to which subsection (b)(5) does not 20 apply, 21 subsection (a) shall be applied by substituting ‘10 22 percent’ for ‘15 percent’.’’. 23 (c) EFFECTIVE DATE.—The amendments made by 24 this section shall apply to dispositions after the date which 25 is 60 days after the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00168 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 169 1 SEC. 325. INTERESTS IN RICS AND REITS NOT EXCLUDED 2 FROM DEFINITION OF UNITED STATES REAL 3 PROPERTY INTERESTS. 4 (a) IN GENERAL.—Section 897(c)(1)(B) is amended 5 by striking ‘‘and’’ at the end of clause (i), by striking the 6 period at the end of clause (ii)(II) and inserting ‘‘, and’’, 7 and by adding at the end the following new clause: 8 ‘‘(iii) neither such corporation nor any 9 predecessor of such corporation was a reg- 10 ulated investment company or a real estate 11 investment trust at any time during the 12 shorter of the periods described in sub- 13 paragraph (A)(ii).’’. 14 (b) EFFECTIVE DATE.—The amendment made by 15 this section shall apply to dispositions on or after the date 16 of the enactment of this Act. 17 SEC. 326. DIVIDENDS DERIVED FROM RICS AND REITS IN- 18 ELIGIBLE 19 STATES SOURCE PORTION OF DIVIDENDS 20 FROM CERTAIN FOREIGN CORPORATIONS. 21 FOR DEDUCTION FOR UNITED (a) IN GENERAL.—Section 245(a) is amended by 22 adding at the end the following new paragraph: 23 ‘‘(12) DIVIDENDS DERIVED FROM RICS AND 24 REITS INELIGIBLE FOR DEDUCTION.—Regulated 25 vestment companies and real estate investment in- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00169 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 170 1 trusts shall not be treated as domestic corporations 2 for purposes of paragraph (5)(B).’’. 3 (b) EFFECTIVE DATE.—The amendment made by 4 this section shall apply to dividends received from regu5 lated investment companies and real estate investment 6 trusts on or after the date of the enactment of this Act. 7 (c) NO INFERENCE.—Nothing contained in this sec- 8 tion or the amendments made by this section shall be con9 strued to create any inference with respect to the proper 10 treatment under section 245 of the Internal Revenue Code 11 of 1986 of dividends received from regulated investment 12 companies or real estate investment trusts before the date 13 of the enactment of this Act. 14 Subtitle C—Additional Provisions 15 SEC. 331. DEDUCTIBILITY OF CHARITABLE CONTRIBU- 16 TIONS TO AGRICULTURAL RESEARCH ORGA- 17 NIZATIONS. 18 (a) IN GENERAL.—Subparagraph (A) of section 19 170(b)(1) is amended by striking ‘‘or’’ at the end of clause 20 (vii), by striking the comma at the end of clause (viii) and 21 inserting ‘‘, or’’, and by inserting after clause (viii) the 22 following new clause: 23 ‘‘(ix) an agricultural research organi- 24 zation directly engaged in the continuous 25 active conduct of agricultural research (as L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00170 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 171 1 defined in section 1404 of the Agricultural 2 Research, Extension, and Teaching Policy 3 Act of 1977) in conjunction with a land- 4 grant college or university (as defined in 5 such section) or a non-land grant college of 6 agriculture (as defined in such section), 7 and during the calendar year in which the 8 contribution is made such organization is 9 committed to spend such contribution for 10 such research before January 1 of the fifth 11 calendar year which begins after the date 12 such contribution is made,’’. 13 (b) EXPENDITURES TO INFLUENCE LEGISLATION.— 14 Paragraph (4) of section 501(h) is amended by redesig15 nating subparagraphs (E) and (F) as subparagraphs (F) 16 and (G), respectively, and by inserting after subparagraph 17 (D) the following new subparagraph: 18 ‘‘(E) section 170(b)(1)(A)(ix) (relating to 19 20 agricultural research organizations),’’. (c) EFFECTIVE DATE.—The amendments made by 21 this section shall apply to contributions made on and after 22 the date of the enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00171 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 172 1 SEC. 332. REMOVAL OF BOND REQUIREMENTS AND EX- 2 TENDING 3 TAXPAYERS WITH LIMITED EXCISE TAX LI- 4 ABILITY. 5 FILING PERIODS FOR CERTAIN (a) FILING REQUIREMENTS.—Paragraph (4) of sec- 6 tion 5061(d) of the Internal Revenue Code of 1986 is 7 amended— 8 (1) in subparagraph (A)— 9 (A) by striking ‘‘In the case of’’ and in- 10 serting the following: 11 ‘‘(i) MORE THAN $1,000 AND NOT 12 MORE THAN $50,000 IN TAXES.—Except 13 provided in clause (ii), in the case of’’, 14 (B) by striking ‘‘under bond for deferred 15 as payment’’, and 16 (C) by adding at the end the following new 17 clause: 18 ‘‘(ii) NOT MORE THAN $1,000 IN 19 TAXES.—In 20 reasonably expects to be liable for not 21 more than $1,000 in taxes imposed with 22 respect to distilled spirits, wines, and beer 23 under subparts A, C, and D and section 24 7652 for the calendar year and who was 25 liable for not more than $1,000 in such 26 taxes in the preceding calendar year, the the case of any taxpayer who L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00172 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 173 1 last day for the payment of tax on with- 2 drawals, removals, and entries (and arti- 3 cles brought into the United States from 4 Puerto Rico) shall be the 14th day after 5 the last day of the calendar year.’’, and 6 (2) in subparagraph (B)— 7 (A) by striking ‘‘Subparagraph (A)’’ and 8 inserting the following: 9 ‘‘(i) EXCEEDS $50,000 LIMIT.—Sub- 10 paragraph (A)(i)’’, and 11 (B) by adding at the end the following new 12 clause: 13 ‘‘(ii) EXCEEDS $1,000 LIMIT.—Sub- 14 paragraph (A)(ii) shall not apply to any 15 taxpayer for any portion of the calendar 16 year following the first date on which the 17 aggregate amount of tax due under sub- 18 parts A, C, and D and section 7652 from 19 such taxpayer during such calendar year 20 exceeds $1,000, and any tax under such 21 subparts which has not been paid on such 22 date shall be due on the 14th day after the 23 last day of the calendar quarter in which 24 such date occurs.’’. 25 (b) BOND REQUIREMENTS.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00173 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 174 1 2 (1) IN GENERAL.—Section 5551 of such Code is amended— 3 (A) in subsection (a), by striking ‘‘No indi- 4 vidual’’ and inserting ‘‘Except as provided 5 under subsection (d), no individual’’, and 6 (B) by adding at the end the following new 7 8 subsection: ‘‘(d) REMOVAL OF BOND REQUIREMENTS.— 9 ‘‘(1) IN GENERAL.—During any period to which 10 subparagraph (A) of section 5061(d)(4) applies to a 11 taxpayer (determined after application of subpara- 12 graph (B) thereof), such taxpayer shall not be re- 13 quired to furnish any bond covering operations or 14 withdrawals of distilled spirits or wines for non- 15 industrial use or of beer. 16 ‘‘(2) 17 MENTS.—Any 18 paragraph (1) shall be treated as if sufficient bond 19 has been furnished for purposes of covering oper- 20 ations and withdrawals of distilled spirits or wines 21 for nonindustrial use or of beer for purposes of any 22 requirements relating to bonds under this chapter.’’. 23 SATISFACTION OF BOND REQUIRE- taxpayer for any period described in (2) CONFORMING AMENDMENTS.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00174 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 175 1 (A) BONDS 2 PLANTS.—Section 3 amended— FOR DISTILLED SPIRITS 5173(a) of such Code is 4 (i) in paragraph (1), by striking ‘‘No 5 person’’ and inserting ‘‘Except as provided 6 under section 5551(d), no person’’, and 7 (ii) in paragraph (2), by striking ‘‘No 8 distilled spirits’’ and inserting ‘‘Except as 9 provided under section 5551(d), no dis- 10 tilled spirits’’. 11 (B) BONDED 12 CELLARS.—Section 5351 of such Code is amended— 13 (i) by striking ‘‘Any person’’ and in- 14 15 WINE serting the following: ‘‘(a) IN GENERAL.—Any person’’, 16 (ii) by inserting ‘‘, except as provided 17 under section 5551(d),’’ before ‘‘file bond’’, 18 (iii) by striking ‘‘Such premises shall’’ 19 and all that follows through the period, 20 and 21 (iv) by adding at the end the following 22 23 new subsection: ‘‘(b) DEFINITIONS.—For purposes of this chapter— 24 25 ‘‘(1) BONDED WINE CELLAR.—The term ‘bond- ed wine cellar’ means any premises described in sub- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00175 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 176 1 section (a), including any such premises established 2 by a taxpayer described in section 5551(d). 3 ‘‘(2) BONDED WINERY.—At the discretion of 4 the Secretary, any bonded wine cellar that engages 5 in production operations may be designated as a 6 ‘bonded winery’.’’. 7 (C) BONDS FOR BREWERIES.—Section 8 5401 of such Code is amended by adding at the 9 end the following new subsection: 10 ‘‘(c) EXCEPTION FROM BOND REQUIREMENTS FOR 11 CERTAIN BREWERIES.—Subsection (b) shall not apply to 12 any taxpayer for any period described in section 13 5551(d).’’. 14 (c) EFFECTIVE DATE.—The amendments made by 15 this section shall apply to any calendar quarters beginning 16 more than 1 year after the date of the enactment of this 17 Act. 18 SEC. 333. MODIFICATIONS TO ALTERNATIVE TAX FOR CER- 19 20 TAIN SMALL INSURANCE COMPANIES. (a) ADDITIONAL REQUIREMENT FOR COMPANIES TO 21 WHICH ALTERNATIVE TAX APPLIES.— 22 (1) ADDED 23 REQUIREMENT.— (A) IN 24 GENERAL.—Subparagraph (A) of section 831(b)(2) is amended— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00176 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 177 1 (i) by striking ‘‘(including inter- 2 insurers and reciprocal underwriters)’’, and 3 (ii) by striking ‘‘and’’ at the end of 4 clause (i), by redesignating clause (ii) as 5 clause (iii), and by inserting after clause 6 (i) the following new clause: 7 ‘‘(ii) such company meets the diver- 8 sification requirements of subparagraph 9 (B), and’’. 10 (B) DIVERSIFICATION REQUIREMENT.— 11 Paragraph (2) of section 831(b) is amended by 12 redesignating subparagraphs (B) as subpara- 13 graph (C) and by inserting after subparagraph 14 (A) the following new subparagraph: 15 ‘‘(B) DIVERSIFICATION 16 ‘‘(i) IN REQUIREMENTS.— GENERAL.—An insurance com- 17 pany meets the requirements of this sub- 18 paragraph if— 19 ‘‘(I) no more than 20 percent of 20 the net written premiums (or, if 21 greater, direct written premiums) of 22 such company for the taxable year is 23 attributable to any one policyholder, 24 or L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00177 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 178 1 ‘‘(II) such insurance company 2 does not meet the requirement of sub- 3 clause (I) and no person who holds 4 (directly or indirectly) an interest in 5 such insurance company is a specified 6 holder who holds (directly or indi- 7 rectly) aggregate interests in such in- 8 surance company which constitute a 9 percentage of the entire interests in 10 such insurance company which is 11 more than a de minimis percentage 12 higher than the percentage of inter- 13 ests in the specified assets with re- 14 spect to such insurance company held 15 (directly or indirectly) by such speci- 16 fied holder. 17 ‘‘(ii) DEFINITIONS.—For purposes of 18 clause (i)(II)— 19 ‘‘(I) SPECIFIED HOLDER.—The 20 term ‘specified holder’ means, with re- 21 spect to any insurance company, any 22 individual who holds (directly or indi- 23 rectly) an interest in such insurance 24 company and who is a spouse or lineal 25 descendant (including by adoption) of L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00178 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 179 1 an individual who holds an interest 2 (directly or indirectly) in the specified 3 assets with respect to such insurance 4 company. 5 ‘‘(II) SPECIFIED ASSETS.—The 6 term ‘specified assets’ means, with re- 7 spect to any insurance company, the 8 trades or businesses, rights, or assets 9 with respect to which the net written 10 premiums (or direct written pre- 11 miums) of such insurance company 12 are paid. 13 ‘‘(III) INDIRECT INTEREST.—An 14 indirect interest includes any interest 15 held through a trust, estate, partner- 16 ship, or corporation. 17 ‘‘(IV) DE MINIMIS.—Except as 18 otherwise provided by the Secretary in 19 regulations or other guidance, 2 per- 20 centage points or less shall be treated 21 as de minimis.’’. 22 (C) CONFORMING AMENDMENTS.—The 23 second sentence section 831(b)(2)(A) is amend- 24 ed— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00179 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 180 1 (i) by striking ‘‘clause (ii)’’ and in- 2 serting ‘‘clause (iii)’’, and 3 (ii) by striking ‘‘clause (i)’’ and in- 4 serting ‘‘clauses (i) and (ii)’’. 5 (2) TREATMENT OF RELATED POLICY- 6 HOLDERS.—Clause 7 redesignated by paragraph (1)(B), is amended— (i) of section 831(b)(2)(C), as 8 (A) by striking ‘‘For purposes of subpara- 9 graph (A), in determining’’ and inserting ‘‘For 10 purposes of this paragraph— 11 ‘‘(I) in determining’’, 12 (B) by striking the period at the end and 13 inserting ‘‘, and’’, and 14 (C) by adding at the end the following new 15 subclause: 16 ‘‘(II) in determining the attribu- 17 tion of premiums to any policyholder 18 under subparagraph (B)(i), all policy- 19 holders which are related (within the 20 meaning of section 267(b) or 707(b)) 21 or are members of the same controlled 22 group shall be treated as one policy- 23 holder.’’. 24 (3) REPORTING.—Section 831 is amended by 25 redesignating subsection (d) as subsection (e) and by L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00180 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 181 1 inserting after subsection (c) the following new sub- 2 section: 3 ‘‘(d) REPORTING.—Every insurance company for 4 which an election is in effect under subsection (b) for any 5 taxable year shall furnish to the Secretary at such time 6 and in such manner as the Secretary shall prescribe such 7 information for such taxable year as the Secretary shall 8 require with respect to the requirements of subsection 9 (b)(2)(A)(ii).’’. 10 (b) INCREASE IN LIMITATION ON PREMIUMS.— 11 (1) IN GENERAL.—Clause (i) of section 12 831(b)(2)(A) is amended by striking ‘‘$1,200,000’’ 13 and inserting ‘‘$2,200,000’’. 14 (2) INFLATION ADJUSTMENT.—Paragraph (2) 15 of section 831(b), as amended by subsection 16 (a)(1)(B), is amended by adding at the end the fol- 17 lowing new subparagraph: 18 ‘‘(D) INFLATION ADJUSTMENT.—In the 19 case of any taxable year beginning in a calendar 20 year after 2015, the dollar amount set forth in 21 subparagraph (A)(i) shall be increased by an 22 amount equal to— 23 ‘‘(i) such dollar amount, multiplied by 24 ‘‘(ii) the cost-of-living adjustment de- 25 termined under section 1(f)(3) for such L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00181 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 182 1 calendar year by substituting ‘calendar 2 year 2013’ for ‘calendar year 1992’ in sub- 3 paragraph (B) thereof. 4 If the amount as adjusted under the preceding 5 sentence is not a multiple of $50,000, such 6 amount shall be rounded to the next lowest 7 multiple of $50,000.’’. 8 (c) EFFECTIVE DATE.—The amendments made by 9 this section shall apply to taxable years beginning after 10 December 31, 2016. 11 SEC. 334. TREATMENT OF TIMBER GAINS. 12 (a) IN GENERAL.—Section 1201(b) is amended to 13 read as follows: 14 ‘‘(b) SPECIAL RATE FOR QUALIFIED TIMBER 15 GAINS.— 16 ‘‘(1) IN GENERAL.—If, for any taxable year be- 17 ginning in 2016, a corporation has both a net cap- 18 ital gain and qualified timber gain— 19 ‘‘(A) subsection (a) shall apply to such cor- 20 poration for the taxable year without regard to 21 whether the applicable tax rate exceeds 35 per- 22 cent, and 23 ‘‘(B) the tax computed under subsection 24 (a)(2) shall be equal to the sum of— 25 ‘‘(i) 23.8 percent of the least of— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00182 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 183 1 ‘‘(I) qualified timber gain, 2 ‘‘(II) net capital gain, or 3 ‘‘(III) taxable income, plus 4 ‘‘(ii) 35 percent of the excess (if any) 5 of taxable income over the sum of the 6 amounts for which a tax was determined 7 under subsection (a)(1) and clause (i). 8 ‘‘(2) QUALIFIED TIMBER GAIN.—For purposes 9 of this section, the term ‘qualified timber gain’ 10 means, with respect to any taxpayer for any taxable 11 year, the excess (if any) of— 12 ‘‘(A) the sum of the taxpayer’s gains de- 13 scribed in subsections (a) and (b) of section 631 14 for such year, over 15 ‘‘(B) the sum of the taxpayer’s losses de- 16 scribed in such subsections for such year. 17 For purposes of subparagraphs (A) and (B), only 18 timber held more than 15 years shall be taken into 19 account.’’. 20 (b) CONFORMING AMENDMENT.—Section 55(b) is 21 amended by striking paragraph (4). 22 (c) EFFECTIVE DATE.—The amendments made by 23 this section shall apply to taxable years beginning after 24 December 31, 2015. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00183 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 184 1 SEC. 335. MODIFICATION OF DEFINITION OF HARD CIDER. 2 (a) IN GENERAL.—Section 5041 of the Internal Rev- 3 enue Code of 1986 is amended— 4 (1) in paragraph (6) of subsection (b), by strik- 5 ing ‘‘which is a still wine’’ and all that follows 6 through ‘‘alcohol by volume’’, and 7 (2) by adding at the end the following new sub- 8 section: 9 ‘‘(g) HARD CIDER.—For purposes of subsection 10 (b)(6), the term ‘hard cider’ means a wine— 11 ‘‘(1) containing not more than 0.64 gram of 12 carbon dioxide per hundred milliliters of wine, except 13 that the Secretary may by regulations prescribe such 14 tolerances to this limitation as may be reasonably 15 necessary in good commercial practice, 16 ‘‘(2) which is derived primarily— 17 ‘‘(A) from apples or pears, or 18 ‘‘(B) from— 19 ‘‘(i) apple juice concentrate or pear 20 juice concentrate, and 21 ‘‘(ii) water, 22 23 ‘‘(3) which contains no fruit product or fruit flavoring other than apple or pear, and 24 ‘‘(4) which contains at least one-half of 1 per- 25 cent and less than 8.5 percent alcohol by volume.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00184 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 185 1 (b) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to hard cider removed during cal3 endar years beginning after December 31, 2016. 4 SEC. 336. CHURCH PLAN CLARIFICATION. 5 (a) APPLICATION OF CONTROLLED GROUP RULES TO 6 CHURCH PLANS.— 7 (1) IN 8 ing the following: 10 ‘‘(1) IN GENERAL.—Except as provided in para- graph (2), for purposes’’, and 12 (B) by adding at the end the following new 13 paragraph: 14 ‘‘(2) SPECIAL 15 414(c) is amended— (A) by striking ‘‘For purposes’’ and insert- 9 11 GENERAL.—Section RULES RELATING TO CHURCH PLANS.— 16 ‘‘(A) GENERAL RULE.—Except as provided 17 in subparagraphs (B) and (C), for purposes of 18 this subsection and subsection (m), an organi- 19 zation that is otherwise eligible to participate in 20 a church plan shall not be aggregated with an- 21 other such organization and treated as a single 22 employer with such other organization for a 23 plan year beginning in a taxable year unless— 24 ‘‘(i) one such organization provides 25 (directly or indirectly) at least 80 percent L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00185 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 186 1 of the operating funds for the other orga- 2 nization during the preceding taxable year 3 of the recipient organization, and 4 ‘‘(ii) there is a degree of common 5 management or supervision between the or- 6 ganizations such that the organization pro- 7 viding the operating funds is directly in- 8 volved in the day-to-day operations of the 9 other organization. 10 ‘‘(B) 11 TROLLED 12 subparagraph (A), for purposes of this sub- 13 section and subsection (m), an organization 14 that is a nonqualified church-controlled organi- 15 zation shall be aggregated with 1 or more other 16 nonqualified church-controlled organizations, or 17 with an organization that is not exempt from 18 tax under section 501, and treated as a single 19 employer with such other organization, if at 20 least 80 percent of the directors or trustees of 21 such other organization are either representa- 22 tives of, or directly or indirectly controlled by, 23 such nonqualified church-controlled organiza- 24 tion. For purposes of this subparagraph, the 25 term ‘nonqualified church-controlled organiza- NONQUALIFIED CHURCH-CON- ORGANIZATIONS.—Notwithstanding L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00186 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 187 1 tion’ means a church-controlled tax-exempt or- 2 ganization described in section 501(c)(3) that is 3 not a qualified church-controlled organization 4 (as defined in section 3121(w)(3)(B)). 5 ‘‘(C) PERMISSIVE AGGREGATION AMONG 6 CHURCH-RELATED 7 church or convention or association of churches 8 with which an organization described in sub- 9 paragraph (A) is associated (within the mean- 10 ing of subsection (e)(3)(D)), or an organization 11 designated by such church or convention or as- 12 sociation of churches, may elect to treat such 13 organizations as a single employer for a plan 14 year. Such election, once made, shall apply to 15 all succeeding plan years unless revoked with 16 notice provided to the Secretary in such manner 17 as the Secretary shall prescribe. 18 ORGANIZATIONS.—The ‘‘(D) PERMISSIVE DISAGGREGATION OF 19 CHURCH-RELATED ORGANIZATIONS.—For 20 poses of subparagraph (A), in the case of a 21 church plan, an employer may elect to treat 22 churches (as defined in section 403(b)(12)(B)) 23 separately from entities that are not churches 24 (as so defined), without regard to whether such 25 entities maintain separate church plans. Such pur- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00187 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 188 1 election, once made, shall apply to all suc- 2 ceeding plan years unless revoked with notice 3 provided to the Secretary in such manner as the 4 Secretary shall prescribe.’’. 5 (2) CLARIFICATION RELATING TO APPLICATION 6 OF 7 1.414(c)–5(f) shall continue to apply to each para- 8 graph of section 414(c) of the Internal Revenue 9 Code of 1986, as amended by paragraph (1). ANTI-ABUSE 10 RULE.—The (3) EFFECTIVE rule of 26 CFR DATE.—The amendments made 11 by paragraph (1) shall apply to years beginning be- 12 fore, on, or after the date of the enactment of this 13 Act. 14 (b) APPLICATION 15 LIMITATIONS TO OF CONTRIBUTION AND FUNDING 403(b) GRANDFATHERED DEFINED 16 BENEFIT PLANS.— 17 (1) IN GENERAL.—Section 251(e)(5) of the Tax 18 Equity and Fiscal Responsibility Act of 1982 (Public 19 Law 97–248), is amended— 20 (A) by striking ‘‘403(b)(2)’’ and inserting 21 ‘‘403(b)’’, and 22 (B) by inserting before the period at the 23 end the following: ‘‘, and shall be subject to the 24 applicable limitations of section 415(b) of such 25 Code as if it were a defined benefit plan under L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00188 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 189 1 section 401(a) of such Code (and not to the 2 limitations of section 415(c) of such Code).’’. 3 (2) EFFECTIVE DATE.—The amendments made 4 by this subsection shall apply to years beginning be- 5 fore, on, or after the date of the enactment of this 6 Act. 7 (c) AUTOMATIC ENROLLMENT 8 (1) IN GENERAL.—This BY CHURCH PLANS.— subsection shall super- 9 sede any law of a State that relates to wage, salary, 10 or payroll payment, collection, deduction, garnish- 11 ment, assignment, or withholding which would di- 12 rectly or indirectly prohibit or restrict the inclusion 13 in any church plan (as defined in section 414(e) of 14 the Internal Revenue Code of 1986) of an automatic 15 contribution arrangement. 16 (2) DEFINITION OF AUTOMATIC CONTRIBUTION 17 ARRANGEMENT.—For 18 the term ‘‘automatic contribution arrangement’’ 19 means an arrangement— purposes of this subsection, 20 (A) under which a participant may elect to 21 have the plan sponsor or the employer make 22 payments as contributions under the plan on 23 behalf of the participant, or to the participant 24 directly in cash, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00189 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 190 1 (B) under which a participant is treated as 2 having elected to have the plan sponsor or the 3 employer make such contributions in an amount 4 equal to a uniform percentage of compensation 5 provided under the plan until the participant 6 specifically elects not to have such contributions 7 made (or specifically elects to have such con- 8 tributions made at a different percentage), and 9 (C) under which the notice and election re- 10 quirements of paragraph (3), and the invest- 11 ment requirements of paragraph (4), are satis- 12 fied. 13 (3) NOTICE 14 (A) IN REQUIREMENTS.— GENERAL.—The plan sponsor of, or 15 plan administrator or employer maintaining, an 16 automatic contribution arrangement shall, with- 17 in a reasonable period before the first day of 18 each plan year, provide to each participant to 19 whom the arrangement applies for such plan 20 year notice of the participant’s rights and obli- 21 gations under the arrangement which— 22 (i) is sufficiently accurate and com- 23 prehensive to apprise the participant of 24 such rights and obligations, and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00190 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 191 1 (ii) is written in a manner calculated 2 to be understood by the average partici- 3 pant to whom the arrangement applies. 4 (B) ELECTION REQUIREMENTS.—A notice 5 shall not be treated as meeting the require- 6 ments of subparagraph (A) with respect to a 7 participant unless— 8 (i) the notice includes an explanation 9 of the participant’s right under the ar- 10 rangement not to have elective contribu- 11 tions made on the participant’s behalf (or 12 to elect to have such contributions made at 13 a different percentage), 14 (ii) the participant has a reasonable 15 period of time, after receipt of the expla- 16 nation described in clause (i) and before 17 the first elective contribution is made, to 18 make such election, and 19 (iii) the notice explains how contribu- 20 tions made under the arrangement will be 21 invested in the absence of any investment 22 election by the participant. 23 (4) DEFAULT INVESTMENT.—If no affirmative 24 investment election has been made with respect to 25 any automatic contribution arrangement, contribu- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00191 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 192 1 tions to such arrangement shall be invested in a de- 2 fault investment selected with the care, skill, pru- 3 dence, and diligence that a prudent person selecting 4 an investment option would use. 5 (5) EFFECTIVE DATE.—This subsection shall 6 take effect on the date of the enactment of this Act. 7 (d) ALLOW CERTAIN PLAN TRANSFERS 8 AND MERG- ERS.— 9 (1) IN GENERAL.—Section 414 is amended by 10 adding at the end the following new subsection: 11 ‘‘(z) CERTAIN PLAN TRANSFERS 12 ‘‘(1) IN GENERAL.—Under AND MERGERS.— rules prescribed by 13 the Secretary, except as provided in paragraph (2), 14 no amount shall be includible in gross income by 15 reason of— 16 ‘‘(A) a transfer of all or a portion of the 17 accrued benefit of a participant or beneficiary, 18 whether or not vested, from a church plan that 19 is a plan described in section 401(a) or an an- 20 nuity contract described in section 403(b) to an 21 annuity contract described in section 403(b), if 22 such plan and annuity contract are both main- 23 tained by the same church or convention or as- 24 sociation of churches, L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00192 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 193 1 ‘‘(B) a transfer of all or a portion of the 2 accrued benefit of a participant or beneficiary, 3 whether or not vested, from an annuity contract 4 described in section 403(b) to a church plan 5 that is a plan described in section 401(a), if 6 such plan and annuity contract are both main- 7 tained by the same church or convention or as- 8 sociation of churches, or 9 ‘‘(C) a merger of a church plan that is a 10 plan described in section 401(a), or an annuity 11 contract described in section 403(b), with an 12 annuity contract described in section 403(b), if 13 such plan and annuity contract are both main- 14 tained by the same church or convention or as- 15 sociation of churches. 16 ‘‘(2) LIMITATION.—Paragraph (1) shall not 17 apply to a transfer or merger unless the partici- 18 pant’s or beneficiary’s total accrued benefit imme- 19 diately after the transfer or merger is equal to or 20 greater than the participant’s or beneficiary’s total 21 accrued benefit immediately before the transfer or 22 merger, and such total accrued benefit is nonforfeit- 23 able after the transfer or merger. 24 ‘‘(3) QUALIFICATION.—A plan or annuity con- 25 tract shall not fail to be considered to be described L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00193 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 194 1 in section 401(a) or 403(b) merely because such 2 plan or annuity contract engages in a transfer or 3 merger described in this subsection. 4 5 ‘‘(4) DEFINITIONS.—For purposes of this subsection— 6 ‘‘(A) CHURCH OR CONVENTION OR ASSO- 7 CIATION OF CHURCHES.—The 8 convention or association of churches’ includes 9 an organization described in subparagraph (A) 10 term ‘church or or (B)(ii) of subsection (e)(3). 11 ‘‘(B) ANNUITY CONTRACT.—The term ‘an- 12 nuity contract’ includes a custodial account de- 13 scribed in section 403(b)(7) and a retirement 14 income account described in section 403(b)(9). 15 ‘‘(C) ACCRUED 16 BENEFIT.—The term ‘ac- crued benefit’ means— 17 ‘‘(i) in the case of a defined benefit 18 plan, the employee’s accrued benefit deter- 19 mined under the plan, and 20 ‘‘(ii) in the case of a plan other than 21 a defined benefit plan, the balance of the 22 employee’s account under the plan.’’. 23 24 (2) EFFECTIVE DATE.—The amendment made by this subsection shall apply to transfers or merg- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00194 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 195 1 ers occurring after the date of the enactment of this 2 Act. 3 (e) INVESTMENTS 4 BY CHURCH PLANS IN COLLEC- TRUSTS.— TIVE 5 (1) IN GENERAL.—In the case of— 6 (A) a church plan (as defined in section 7 414(e) of the Internal Revenue Code of 1986), 8 including a plan described in section 401(a) of 9 such Code and a retirement income account de- 10 scribed in section 403(b)(9) of such Code, and 11 (B) an organization described in section 12 414(e)(3)(A) of such Code the principal pur- 13 pose or function of which is the administration 14 of such a plan or account, 15 the assets of such plan, account, or organization (in- 16 cluding any assets otherwise permitted to be com- 17 mingled for investment purposes with the assets of 18 such a plan, account, or organization) may be in- 19 vested in a group trust otherwise described in Inter- 20 nal Revenue Service Revenue Ruling 81–100 (as 21 modified by Internal Revenue Service Revenue Rul- 22 ings 2004–67, 2011–1, and 2014–24), or any subse- 23 quent revenue ruling that supersedes or modifies 24 such revenue ruling, without adversely affecting the 25 tax status of the group trust, such plan, account, or L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00195 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 196 1 organization, or any other plan or trust that invests 2 in the group trust. 3 (2) EFFECTIVE DATE.—This subsection shall 4 apply to investments made after the date of the en- 5 actment of this Act. 6 Subtitle D—Revenue Provisions 7 SEC. 341. UPDATED ASHRAE STANDARDS FOR ENERGY EF- 8 FICIENT COMMERCIAL BUILDINGS DEDUC- 9 TION. 10 (a) IN GENERAL.—Paragraph (1) of section 179D(c) 11 is amended by striking ‘‘Standard 90.1–2001’’ each place 12 it appears and inserting ‘‘Standard 90.1–2007’’. 13 (b) CONFORMING AMENDMENTS.— 14 (1) Paragraph (2) of section 179D(c) is amend- 15 ed to read as follows: 16 ‘‘(2) STANDARD 90.1–2007.—The term ‘Stand- 17 ard 90.1–2007’ means Standard 90.1–2007 of the 18 American Society of Heating, Refrigerating, and Air 19 Conditioning Engineers and the Illuminating Engi- 20 neering Society of North America (as in effect on 21 the day before the date of the adoption of Standard 22 90.1–2010 of such Societies).’’. 23 (2) Subsection (f) of section 179D is amended 24 by striking ‘‘Standard 90.1–2001’’ each place it ap- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00196 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 197 1 pears in paragraphs (1) and (2)(C)(i) and inserting 2 ‘‘Standard 90.1–2007’’. 3 (3) Paragraph (1) of section 179D(f) is amend- 4 ed— 5 (A) by striking ‘‘Table 9.3.1.1’’ and insert- 6 ing ‘‘Table 9.5.1’’, and 7 (B) by striking ‘‘Table 9.3.1.2’’ and insert- 8 ing ‘‘Table 9.6.1’’. 9 (c) EFFECTIVE DATE.—The amendments made by 10 this subsection shall apply to property placed in service 11 after December 31, 2015. 12 SEC. 342. EXCISE TAX CREDIT EQUIVALENCY FOR 13 LIQUIFIED PETROLEUM GAS AND LIQUIFIED 14 NATURAL GAS. 15 (a) IN GENERAL.—Section 6426 is amended by add- 16 ing at the end the following new subsection: 17 ‘‘(j) ENERGY EQUIVALENCY DETERMINATIONS 18 LIQUEFIED PETROLEUM GAS AND FOR LIQUEFIED NATURAL 19 GAS.—For purposes of determining any credit under this 20 section, any reference to the number of gallons of an alter21 native fuel or the gasoline gallon equivalent of such a fuel 22 shall be treated as a reference to— 23 ‘‘(1) in the case of liquefied petroleum gas, the 24 energy equivalent of a gallon of gasoline, as defined 25 in section 4041(a)(2)(C), and L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00197 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 198 1 ‘‘(2) in the case of liquefied natural gas, the en- 2 ergy equivalent of a gallon of diesel, as defined in 3 section 4041(a)(2)(D).’’. 4 (b) EFFECTIVE DATE.—The amendments made by 5 this section shall apply to fuel sold or used after December 6 31, 2015. 7 SEC. 343. EXCLUSION FROM GROSS INCOME OF CERTAIN 8 CLEAN COAL POWER GRANTS TO NON-COR- 9 PORATE TAXPAYERS. 10 (a) GENERAL RULE.—In the case of an eligible tax- 11 payer other than a corporation, gross income for purposes 12 of the Internal Revenue Code of 1986 shall not include 13 any amount received under section 402 of the Energy Pol14 icy Act of 2005. 15 (b) REDUCTION IN BASIS.—The basis of any prop- 16 erty subject to the allowance for depreciation under the 17 Internal Revenue Code of 1986 which is acquired with any 18 amount to which subsection (a) applies during the 1219 month period beginning on the day such amount is re20 ceived shall be reduced by an amount equal to such 21 amount. The excess (if any) of such amount over the 22 amount of the reduction under the preceding sentence 23 shall be applied to the reduction (as of the last day of 24 the period specified in the preceding sentence) of the basis 25 of any other property held by the taxpayer. The particular L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00198 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 199 1 properties to which the reductions required by this sub2 section are allocated shall be determined by the Secretary 3 of the Treasury (or the Secretary’s delegate) under regula4 tions similar to the regulations under section 362(c)(2) of 5 such Code. 6 (c) LIMITATION 7 CONTRIBUTIONS TO TO AMOUNTS WHICH WOULD BE CAPITAL.—Subsection (a) shall not 8 apply to any amount unless such amount, if received by 9 a corporation, would be excluded from gross income under 10 section 118 of the Internal Revenue Code of 1986. 11 (d) ELIGIBLE TAXPAYER.—For purposes of this sec- 12 tion, with respect to any amount received under section 13 402 of the Energy Policy Act of 2005, the term ‘‘eligible 14 taxpayer’’ means a taxpayer that makes a payment to the 15 Secretary of the Treasury (or the Secretary’s delegate) 16 equal to 1.18 percent of the amount so received. Such pay17 ment shall be made at such time and in such manner as 18 such Secretary (or the Secretary’s delegate) shall pre19 scribe. In the case of a partnership, such Secretary (or 20 the Secretary’s delegate) shall prescribe regulations to de21 termine the allocation of such payment amount among the 22 partners. 23 (e) EFFECTIVE DATE.—This section shall apply to 24 amounts received under section 402 of the Energy Policy L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00199 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 200 1 Act of 2005 in taxable years beginning after December 2 31, 2011. 3 SEC. 344. CLARIFICATION OF VALUATION RULE FOR EARLY 4 TERMINATION OF CERTAIN CHARITABLE RE- 5 MAINDER UNITRUSTS. 6 (a) IN GENERAL.—Section 664(e) is amended— 7 (1) by adding at the end the following: ‘‘In the 8 case of the early termination of a trust which is a 9 charitable remainder unitrust by reason of sub- 10 section (d)(3), the valuation of interests in such 11 trust for purposes of this section shall be made 12 under rules similar to the rules of the preceding sen- 13 tence.’’, and 14 (2) by striking ‘‘FOR PURPOSES OF CHARI- 15 TABLE 16 inserting ‘‘OF INTERESTS’’. 17 (b) EFFECTIVE DATE.—The amendment made by CONTRIBUTION’’ in the heading thereof and 18 this section shall apply to terminations of trusts occurring 19 after the date of the enactment of this Act. 20 SEC. 345. PREVENTION OF TRANSFER OF CERTAIN LOSSES 21 22 FROM TAX INDIFFERENT PARTIES. (a) IN GENERAL.—Section 267(d) is amended to 23 read as follows: 24 ‘‘(d) AMOUNT OF GAIN WHERE LOSS PREVIOUSLY 25 DISALLOWED.— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00200 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 201 1 ‘‘(1) IN GENERAL.—If— 2 ‘‘(A) in the case of a sale or exchange of 3 property to the taxpayer a loss sustained by the 4 transferor is not allowable to the transferor as 5 a deduction by reason of subsection (a)(1), and 6 ‘‘(B) the taxpayer sells or otherwise dis- 7 poses of such property (or of other property the 8 basis of which in the taxpayer’s hands is deter- 9 mined directly or indirectly by reference to such 10 property) at a gain, 11 then such gain shall be recognized only to the extent 12 that it exceeds so much of such loss as is properly 13 allocable to the property sold or otherwise disposed 14 of by the taxpayer. 15 ‘‘(2) EXCEPTION FOR WASH SALES.—Para- 16 graph (1) shall not apply if the loss sustained by the 17 transferor is not allowable to the transferor as a de- 18 duction by reason of section 1091 (relating to wash 19 sales). 20 ‘‘(3) EXCEPTION FOR TRANSFERS FROM TAX 21 INDIFFERENT PARTIES.—Paragraph 22 apply to the extent any loss sustained by the trans- 23 feror (if allowed) would not be taken into account in 24 determining a tax imposed under section 1 or 11 or (1) shall not L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00201 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 202 1 a tax computed as provided by either of such sec- 2 tions.’’. 3 (b) EFFECTIVE DATE.—The amendment made by 4 this section shall apply to sales and other dispositions of 5 property acquired after December 31, 2015, by the tax6 payer in a sale or exchange to which section 267(a)(1) 7 of the Internal Revenue Code of 1986 applied. 8 SEC. 346. TREATMENT OF CERTAIN PERSONS AS EMPLOY- 9 ERS WITH RESPECT TO MOTION PICTURE 10 PROJECTS. 11 (a) IN GENERAL.—Chapter 25 (relating to general 12 provisions relating to employment taxes) is amended by 13 adding at the end the following new section: 14 ‘‘SEC. 3512. TREATMENT OF CERTAIN PERSONS AS EMPLOY- 15 ERS WITH RESPECT TO MOTION PICTURE 16 PROJECTS. 17 ‘‘(a) IN GENERAL.—For purposes of sections 18 3121(a)(1) and 3306(b)(1), remuneration paid to a mo19 tion picture project worker by a motion picture project em20 ployer during a calendar year shall be treated as remu21 neration paid with respect to employment of such worker 22 by such employer during the calendar year. The identity 23 of such employer for such purposes shall be determined 24 as set forth in this section and without regard to the usual L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00202 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 203 1 common law rules applicable in determining the employer2 employee relationship. 3 ‘‘(b) DEFINITIONS.—For purposes of this section— 4 ‘‘(1) MOTION PICTURE PROJECT EMPLOYER.— 5 The term ‘motion picture project employer’ means 6 any person if— 7 ‘‘(A) such person (directly or through af- 8 filiates)— 9 ‘‘(i) is a party to a written contract 10 covering the services of motion picture 11 project workers with respect to motion pic- 12 ture projects in the course of a client’s 13 trade or business, 14 ‘‘(ii) is contractually obligated to pay 15 remuneration to the motion picture project 16 workers without regard to payment or re- 17 imbursement by any other person, 18 ‘‘(iii) controls the payment (within the 19 meaning of section 3401(d)(1)) of remu- 20 neration to the motion picture project 21 workers and pays such remuneration from 22 its own account or accounts, 23 ‘‘(iv) is a signatory to one or more 24 collective bargaining agreements with a 25 labor organization (as defined in 29 U.S.C. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00203 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 204 1 152(5)) that represents motion picture 2 project workers, and 3 ‘‘(v) has treated substantially all mo- 4 tion picture project workers that such per- 5 son pays as employees and not as inde- 6 pendent contractors during such calendar 7 year for purposes of determining employ- 8 ment taxes under this subtitle, and 9 ‘‘(B) at least 80 percent of all remunera- 10 tion (to which section 3121 applies) paid by 11 such person in such calendar year is paid to 12 motion picture project workers. 13 ‘‘(2) MOTION PICTURE PROJECT WORKER.— 14 The term ‘motion picture project worker’ means any 15 individual who provides services on motion picture 16 projects for clients who are not affiliated with the 17 motion picture project employer. 18 ‘‘(3) MOTION PICTURE PROJECT.—The term 19 ‘motion picture project’ means the production of any 20 property described in section 168(f)(3). Such term 21 does not include property with respect to which 22 records are required to be maintained under section 23 2257 of title 18, United States Code. 24 25 ‘‘(4) AFFILIATE; AFFILIATED.—A person shall be treated as an affiliate of, or affiliated with, an- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00204 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 205 1 other person if such persons are treated as a single 2 employer under subsection (b) or (c) of section 3 414.’’. 4 (b) CLERICAL AMENDMENT.—The table of sections 5 for such chapter 25 is amended by adding at the end the 6 following new item: ‘‘Sec. 3512. Treatment of certain persons as employers with respect to motion picture projects.’’. 7 (c) EFFECTIVE DATE.—The amendments made by 8 this section shall apply to remuneration paid after Decem9 ber 31, 2015. 10 (d) NO INFERENCE.—Nothing in the amendments 11 made by this section shall be construed to create any infer12 ence on the law before the date of the enactment of this 13 Act. 16 TITLE IV—TAX ADMINISTRATION Subtitle A—Internal Revenue Service Reforms 17 SEC. 401. DUTY TO ENSURE THAT INTERNAL REVENUE 18 SERVICE EMPLOYEES ARE FAMILIAR WITH 19 AND ACT IN ACCORD WITH CERTAIN TAX- 20 PAYER RIGHTS. 14 15 21 (a) IN GENERAL.—Section 7803(a) is amended by 22 redesignating paragraph (3) as paragraph (4) and by in23 serting after paragraph (2) the following new paragraph: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00205 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 206 1 ‘‘(3) EXECUTION OF DUTIES IN ACCORD WITH 2 TAXPAYER RIGHTS.—In 3 Commissioner shall ensure that employees of the In- 4 ternal Revenue Service are familiar with and act in 5 accord with taxpayer rights as afforded by other 6 provisions of this title, including— discharging his duties, the 7 ‘‘(A) the right to be informed, 8 ‘‘(B) the right to quality service, 9 ‘‘(C) the right to pay no more than the 10 correct amount of tax, 11 ‘‘(D) the right to challenge the position of 12 the Internal Revenue Service and be heard, 13 ‘‘(E) the right to appeal a decision of the 14 Internal Revenue Service in an independent 15 forum, 16 ‘‘(F) the right to finality, 17 ‘‘(G) the right to privacy, 18 ‘‘(H) the right to confidentiality, 19 ‘‘(I) the right to retain representation, and 20 ‘‘(J) the right to a fair and just tax sys- 21 22 tem.’’. (b) EFFECTIVE DATE.—The amendments made by 23 this section shall take effect on the date of the enactment 24 of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00206 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 207 1 SEC. 402. IRS EMPLOYEES PROHIBITED FROM USING PER- 2 SONAL 3 BUSINESS. 4 EMAIL ACCOUNTS FOR OFFICIAL No officer or employee of the Internal Revenue Serv- 5 ice may use a personal email account to conduct any offi6 cial business of the Government. 7 SEC. 403. RELEASE OF INFORMATION REGARDING THE STA- 8 9 TUS OF CERTAIN INVESTIGATIONS. (a) IN GENERAL.—Section 6103(e) is amended by 10 adding at the end the following new paragraph: 11 ‘‘(11) DISCLOSURE OF INFORMATION REGARD- 12 ING STATUS OF INVESTIGATION OF VIOLATION OF 13 THIS SECTION.—In 14 vides to the Secretary information indicating a viola- 15 tion of section 7213, 7213A, or 7214 with respect 16 to any return or return information of such person, 17 the Secretary may disclose to such person (or such 18 person’s designee)— the case of a person who pro- 19 ‘‘(A) whether an investigation based on the 20 person’s provision of such information has been 21 initiated and whether it is open or closed, 22 ‘‘(B) whether any such investigation sub- 23 stantiated such a violation by any individual, 24 and 25 ‘‘(C) whether any action has been taken 26 with respect to such individual (including L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00207 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 208 1 whether a referral has been made for prosecu- 2 tion of such individual).’’. 3 (b) EFFECTIVE DATE.—The amendment made by 4 this section shall apply to disclosures made on or after 5 the date of the enactment of this Act. 6 SEC. 404. ADMINISTRATIVE APPEAL RELATING TO AD- 7 VERSE 8 STATUS OF CERTAIN ORGANIZATIONS. 9 (a) IN GENERAL.—Section 7123 is amended by add- DETERMINATIONS OF TAX-EXEMPT 10 ing at the end of the following: 11 12 ‘‘(c) ADMINISTRATIVE APPEAL RELATING VERSE DETERMINATION OF TO TAX-EXEMPT STATUS ADOF 13 CERTAIN ORGANIZATIONS.— 14 ‘‘(1) IN GENERAL.—The Secretary shall pre- 15 scribe procedures under which an organization which 16 claims to be described in section 501(c) may request 17 an administrative appeal (including a conference re- 18 lating to such appeal if requested by the organiza- 19 tion) to the Internal Revenue Service Office of Ap- 20 peals of an adverse determination described in para- 21 graph (2). 22 ‘‘(2) ADVERSE DETERMINATIONS.—For pur- 23 poses of paragraph (1), an adverse determination is 24 described in this paragraph if such determination is 25 adverse to an organization with respect to— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00208 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 209 1 ‘‘(A) the initial qualification or continuing 2 qualification of the organization as exempt from 3 tax under section 501(a) or as an organization 4 described in section 170(c)(2), 5 ‘‘(B) the initial classification or continuing 6 classification of the organization as a private 7 foundation under section 509(a), or 8 ‘‘(C) the initial classification or continuing 9 classification of the organization as a private 10 operating 11 4942(j)(3).’’. 12 foundation under section (b) EFFECTIVE DATE.—The amendment made by 13 subsection (a) shall apply to determinations made on or 14 after May 19, 2014. 15 SEC. 405. ORGANIZATIONS REQUIRED TO NOTIFY SEC- 16 RETARY OF INTENT TO OPERATE UNDER 17 501(c)(4). 18 (a) IN GENERAL.—Part I of subchapter F of chapter 19 1 is amended by adding at the end the following new sec20 tion: 21 ‘‘SEC. 506. ORGANIZATIONS REQUIRED TO NOTIFY SEC- 22 RETARY OF INTENT TO OPERATE UNDER 23 501(c)(4). 24 ‘‘(a) IN GENERAL.—An organization described in 25 section 501(c)(4) shall, not later than 60 days after the L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00209 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 210 1 organization is established, notify the Secretary (in such 2 manner as the Secretary shall by regulation prescribe) 3 that it is operating as such. 4 ‘‘(b) CONTENTS OF NOTICE.—The notice required 5 under subsection (a) shall include the following informa6 tion: 7 8 ‘‘(1) The name, address, and taxpayer identification number of the organization. 9 10 ‘‘(2) The date on which, and the State under the laws of which, the organization was organized. 11 ‘‘(3) A statement of the purpose of the organi- 12 zation. 13 ‘‘(c) ACKNOWLEDGMENT OF RECEIPT.—Not later 14 than 60 days after receipt of such a notice, the Secretary 15 shall send to the organization an acknowledgment of such 16 receipt. 17 ‘‘(d) EXTENSION FOR REASONABLE CAUSE.—The 18 Secretary may, for reasonable cause, extend the 60-day 19 period described in subsection (a). 20 ‘‘(e) USER FEE.—The Secretary shall impose a rea- 21 sonable user fee for submission of the notice under sub22 section (a). 23 ‘‘(f) REQUEST FOR DETERMINATION.—Upon request 24 by an organization to be treated as an organization de25 scribed in section 501(c)(4), the Secretary may issue a de- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00210 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 211 1 termination with respect to such treatment. Such request 2 shall be treated for purposes of section 6104 as an applica3 tion for exemption from taxation under section 501(a).’’. 4 5 (b) SUPPORTING INFORMATION WITH FIRST RETURN.—Section 6 7 6033(f) is amended— (1) by striking the period at the end and inserting ‘‘, and’’, 8 (2) by striking ‘‘include on the return required 9 under subsection (a) the information’’ and inserting 10 the following: ‘‘include on the return required under 11 subsection (a)— 12 ‘‘(1) the information’’, and 13 (3) by adding at the end the following new 14 paragraph: 15 ‘‘(2) in the case of the first such return filed by 16 such an organization after submitting a notice to the 17 Secretary under section 506(a), such information as 18 the Secretary shall by regulation require in support 19 of the organization’s treatment as an organization 20 described in section 501(c)(4).’’. 21 (c) FAILURE TO FILE INITIAL NOTIFICATION.—Sec- 22 tion 6652(c) is amended by redesignating paragraphs (4), 23 (5), and (6) as paragraphs (5), (6), and (7), respectively, 24 and by inserting after paragraph (3) the following new 25 paragraph: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00211 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 212 1 ‘‘(4) NOTICES 2 UNDER SECTION ‘‘(A) PENALTY 506.— ON ORGANIZATION.—In the 3 case of a failure to submit a notice required 4 under section 506(a) (relating to organizations 5 required to notify Secretary of intent to operate 6 as 501(c)(4)) on the date and in the manner 7 prescribed therefor, there shall be paid by the 8 organization failing to so submit $20 for each 9 day during which such failure continues, but 10 the total amount imposed under this subpara- 11 graph on any organization for failure to submit 12 any one notice shall not exceed $5,000. 13 ‘‘(B) MANAGERS.—The Secretary may 14 make written demand on an organization sub- 15 ject to penalty under subparagraph (A) speci- 16 fying in such demand a reasonable future date 17 by which the notice shall be submitted for pur- 18 poses of this subparagraph. If such notice is not 19 submitted on or before such date, there shall be 20 paid by the person failing to so submit $20 for 21 each day after the expiration of the time speci- 22 fied in the written demand during which such 23 failure continues, but the total amount imposed 24 under this subparagraph on all persons for fail- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00212 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 213 1 ure to submit any one notice shall not exceed 2 $5,000.’’. 3 (d) CLERICAL AMENDMENT.—The table of sections 4 for part I of subchapter F of chapter 1 is amended by 5 adding at the end the following new item: ‘‘Sec. 506. Organizations required to notify Secretary of intent to operate under 501(c)(4).’’. 6 (e) LIMITATION.—Notwithstanding any other provi- 7 sion of law, any fees collected pursuant to section 506(e) 8 of the Internal Revenue Code of 1986, as added by sub9 section (a), shall not be expended by the Secretary of the 10 Treasury or the Secretary’s delegate unless provided by 11 an appropriations Act. 12 (f) EFFECTIVE DATE.— 13 (1) IN GENERAL.—The amendments made by 14 this section shall apply to organizations which are 15 described in section 501(c)(4) of the Internal Rev- 16 enue Code of 1986 and organized after the date of 17 the enactment of this Act. 18 (2) CERTAIN EXISTING ORGANIZATIONS.—In 19 the case of any other organization described in sec- 20 tion 501(c)(4) of such Code, the amendments made 21 by this section shall apply to such organization only 22 if, on or before the date of the enactment of this 23 Act— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00213 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 214 1 (A) such organization has not applied for 2 a written determination of recognition as an or- 3 ganization described in section 501(c)(4) of 4 such Code, and 5 (B) such organization has not filed at least 6 one annual return or notice required under sub- 7 section (a)(1) or (i) (as the case may be) of sec- 8 tion 6033 of such Code. 9 In the case of any organization to which the amend- 10 ments made by this section apply by reason of the 11 preceding sentence, such organization shall submit 12 the notice required by section 506(a) of such Code, 13 as added by this Act, not later than 180 days after 14 the date of the enactment of this Act. 15 SEC. 406. DECLARATORY JUDGMENTS FOR 501(c)(4) AND 16 17 OTHER EXEMPT ORGANIZATIONS. (a) IN GENERAL.—Section 7428(a)(1) is amended by 18 striking ‘‘or’’ at the end of subparagraph (C) and by in19 serting after subparagraph (D) the following new subpara20 graph: 21 ‘‘(E) with respect to the initial qualifica- 22 tion or continuing qualification of an organiza- 23 tion as an organization described in section 24 501(c) (other than paragraph (3)) or 501(d) 25 and exempt from tax under section 501(a), or’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00214 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 215 1 (b) EFFECTIVE DATE.—The amendments made by 2 this section shall apply to pleadings filed after the date 3 of the enactment of this Act. 4 SEC. 407. TERMINATION OF EMPLOYMENT OF INTERNAL 5 REVENUE SERVICE EMPLOYEES FOR TAKING 6 OFFICIAL 7 POSES. 8 ACTIONS FOR POLITICAL PUR- (a) IN GENERAL.—Paragraph (10) of section 9 1203(b) of the Internal Revenue Service Restructuring 10 and Reform Act of 1998 is amended to read as follows: 11 ‘‘(10) performing, delaying, or failing to per- 12 form (or threatening to perform, delay, or fail to 13 perform) any official action (including any audit) 14 with respect to a taxpayer for purpose of extracting 15 personal gain or benefit or for a political purpose.’’. 16 (b) EFFECTIVE DATE.—The amendment made by 17 this section shall take effect on the date of the enactment 18 of this Act. 19 SEC. 408. GIFT TAX NOT TO APPLY TO CONTRIBUTIONS TO 20 21 CERTAIN EXEMPT ORGANIZATIONS. (a) IN GENERAL.—Section 2501(a) is amended by 22 adding at the end the following new paragraph: 23 ‘‘(6) TRANSFERS TO CERTAIN EXEMPT ORGANI- 24 ZATIONS.—Paragraph (1) shall not apply to the 25 transfer of money or other property to an organiza- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00215 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 216 1 tion described in paragraph (4), (5), or (6) of sec- 2 tion 501(c) and exempt from tax under section 3 501(a), for the use of such organization.’’. 4 (b) EFFECTIVE DATE.—The amendment made by 5 subsection (a) shall apply to gifts made after the date of 6 the enactment of this Act. 7 (c) NO INFERENCE.—Nothing in the amendment 8 made by subsection (a) shall be construed to create any 9 inference with respect to whether any transfer of property 10 (whether made before, on, or after the date of the enact11 ment of this Act) to an organization described in para12 graph (4), (5), or (6) of section 501(c) of the Internal 13 Revenue Code of 1986 is a transfer of property by gift 14 for purposes of chapter 12 of such Code. 15 SEC. 409. EXTEND INTERNAL REVENUE SERVICE AUTHOR- 16 ITY TO REQUIRE TRUNCATED SOCIAL SECU- 17 RITY NUMBERS ON FORM W–2. 18 (a) WAGES.—Section 6051(a)(2) is amended by 19 striking ‘‘his social security account number’’ and insert20 ing ‘‘an identifying number for the employee’’. 21 (b) EFFECTIVE DATE.—The amendment made by 22 this section shall take effect on the date of the enactment 23 of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00216 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 217 1 SEC. 410. CLARIFICATION OF ENROLLED AGENT CREDEN- 2 TIALS. 3 Section 330 of title 31, United States Code, is 4 amended— 5 (1) by redesignating subsections (b), (c), and 6 (d) as subsections (c), (d), and (e), respectively, and 7 (2) by inserting after subsection (a) the fol- 8 lowing new subsection: 9 ‘‘(b) Any enrolled agents properly licensed to practice 10 as required under rules promulgated under subsection (a) 11 shall be allowed to use the credentials or designation of 12 ‘enrolled agent’, ‘EA’, or ‘E.A.’.’’. 13 SEC. 411. PARTNERSHIP AUDIT RULES. 14 15 (a) CORRECTION TIONS TO IMPUTED 16 17 AND CLARIFICATION TO MODIFICA- UNDERPAYMENTS.— (1) Section 6225(c)(4)(A)(i) is amended by striking ‘‘in the case of ordinary income,’’. 18 (2) Section 6225(c) is amended by redesig- 19 nating paragraphs (5) through (7) as paragraphs 20 (6) through (8), respectively, and by inserting after 21 paragraph (4) the following new paragraph: 22 ‘‘(5) CERTAIN PASSIVE LOSSES OF PUBLICLY 23 TRADED PARTNERSHIPS.— 24 ‘‘(A) IN GENERAL.—In the case of a pub- 25 licly traded partnership (as defined in section 26 469(k)(2)), such procedures shall provide— L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00217 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 218 1 ‘‘(i) for determining the imputed un- 2 derpayment without regard to the portion 3 thereof that the partnership demonstrates 4 is attributable to a net decrease in a speci- 5 fied passive activity loss which is allocable 6 to a specified partner, and 7 ‘‘(ii) for the partnership to take such 8 net decrease into account as an adjustment 9 in the adjustment year with respect to the 10 specified partners to which such net de- 11 crease relates. 12 ‘‘(B) SPECIFIED PASSIVE ACTIVITY 13 LOSS.—For 14 term ‘specified passive activity loss’ means, with 15 respect to any specified partner of such publicly 16 traded partnership, the lesser of— purposes of this paragraph, the 17 ‘‘(i) the passive activity loss of such 18 partner which is separately determined 19 with respect to such partnership under sec- 20 tion 469(k) with respect to such partner’s 21 taxable year in which or with which the re- 22 viewed year of such partnership ends, or 23 ‘‘(ii) such passive activity loss so de- 24 termined with respect to such partner’s L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00218 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 219 1 taxable year in which or with which the ad- 2 justment year of such partnership ends. 3 ‘‘(C) SPECIFIED PARTNER.—For purposes 4 of this paragraph, the term ‘specified partner’ 5 means any person if such person— 6 ‘‘(i) is a partner of the publicly traded 7 partnership referred to in subparagraph 8 (A), 9 ‘‘(ii) is described in section 469(a)(2), 10 and 11 ‘‘(iii) has a specified passive activity 12 loss with respect to such publicly traded 13 partnership, 14 with respect to each taxable year of such person 15 which is during the period beginning with the 16 taxable year of such person in which or with 17 which the reviewed year of such publicly traded 18 partnership ends and ending with the taxable 19 year of such person in which or with which the 20 adjustment year of such publicly traded part- 21 nership ends.’’. 22 (b) CORRECTION AND CLARIFICATION TO JUDICIAL 23 REVIEW OF PARTNERSHIP ADJUSTMENT .— 24 25 (1) Section 6226 is amended by adding at the end the following new subsection: L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00219 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 220 1 ‘‘(d) JUDICIAL REVIEW.—For the time period within 2 which a partnership may file a petition for a readjustment, 3 see section 6234(a).’’. 4 (2) Subsections (a)(3), (b)(1), and (d) of sec- 5 tion 6234 are each amended by striking ‘‘the Claims 6 Court’’ and inserting ‘‘the Court of Federal Claims’’. 7 (3) The heading for section 6234(b) is amended 8 by striking ‘‘CLAIMS COURT’’ and inserting ‘‘COURT 9 OF 10 FEDERAL CLAIMS’’. (c) CORRECTION AND CLARIFICATION TO PERIOD OF 11 LIMITATIONS ON MAKING ADJUSTMENTS.— 12 13 (1) Section 6235(a)(2) is amended by striking ‘‘paragraph (4)’’ and inserting ‘‘paragraph (7)’’. 14 (2) Section 6235(a)(3) is amended by striking 15 ‘‘270 days’’ and inserting ‘‘330 days (plus the num- 16 ber of days of any extension consented to by the 17 Secretary under section 6225(c)(7)’’. 18 (d) TECHNICAL AMENDMENT.—Section 6031(b) is 19 amended by striking the last sentence and inserting the 20 following: ‘‘Except as provided in the procedures under 21 section 6225(c), with respect to statements under section 22 6226, or as otherwise provided by the Secretary, informa23 tion required to be furnished by the partnership under this 24 subsection may not be amended after the due date of the L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00220 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 221 1 return under subsection (a) to which such information re2 lates.’’. 3 (e) EFFECTIVE DATE.—The amendments made by 4 this section shall take effect as if included in section 1101 5 of the Bipartisan Budget Act of 2015. 7 Subtitle B—United States Tax Court 8 PART 1—TAXPAYER ACCESS TO UNITED STATES 9 TAX COURT 6 10 SEC. 421. FILING PERIOD FOR INTEREST ABATEMENT 11 12 CASES. (a) IN GENERAL.—Subsection (h) of section 6404 is 13 amended— 14 15 (1) by striking ‘‘REVIEW OF DENIAL’’ in the heading and inserting ‘‘JUDICIAL REVIEW’’, and 16 (2) by striking ‘‘if such action is brought’’ and 17 all that follows in paragraph (1) and inserting ‘‘if 18 such action is brought— 19 ‘‘(A) at any time after the earlier of— 20 ‘‘(i) the date of the mailing of the 21 Secretary’s final determination not to 22 abate such interest, or 23 ‘‘(ii) the date which is 180 days after 24 the date of the filing with the Secretary (in 25 such form as the Secretary may prescribe) L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00221 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 222 1 of a claim for abatement under this sec- 2 tion, and 3 ‘‘(B) not later than the date which is 180 4 days after the date described in subparagraph 5 (A)(i).’’. 6 (b) EFFECTIVE DATE.—The amendments made by 7 this section shall apply to claims for abatement of interest 8 filed with the Secretary of the Treasury after the date of 9 the enactment of this Act. 10 SEC. 422. SMALL TAX CASE ELECTION FOR INTEREST 11 12 ABATEMENT CASES. (a) IN GENERAL.—Subsection (f) of section 7463 is 13 amended— 14 15 (1) by striking ‘‘and’’ at the end of paragraph (1), 16 17 (2) by striking the period at the end of paragraph (2) and inserting ‘‘, and’’, and 18 19 (3) by adding at the end the following new paragraph: 20 ‘‘(3) a petition to the Tax Court under section 21 6404(h) in which the amount of the abatement 22 sought does not exceed $50,000.’’. 23 (b) EFFECTIVE DATE.—The amendments made by 24 this section shall apply to cases pending as of the day after L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00222 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 223 1 the date of the enactment of this Act, and cases com2 menced after such date of enactment. 3 SEC. 423. VENUE FOR APPEAL OF SPOUSAL RELIEF AND 4 5 COLLECTION CASES. (a) IN GENERAL.—Paragraph (1) of section 7482(b) 6 is amended— 7 8 (1) by striking ‘‘or’’ at the end of subparagraph (D), 9 10 (2) by striking the period at the end of subparagraph (E), and 11 12 (3) by inserting after subparagraph (E) the following new subparagraphs: 13 ‘‘(F) in the case of a petition under section 14 6015(e), the legal residence of the petitioner, or 15 ‘‘(G) in the case of a petition under section 16 6320 or 6330— 17 ‘‘(i) the legal residence of the peti- 18 tioner if the petitioner is an individual, and 19 ‘‘(ii) the principal place of business or 20 principal office or agency if the petitioner 21 is an entity other than an individual.’’. 22 (b) EFFECTIVE DATE.— 23 (1) IN GENERAL.—The amendments made by 24 this section shall apply to petitions filed after the 25 date of enactment of this Act. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00223 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 224 1 (2) EFFECT ON EXISTING PROCEEDINGS.— 2 Nothing in this section shall be construed to create 3 any inference with respect to the application of sec- 4 tion 7482 of the Internal Revenue Code of 1986 5 with respect to court proceedings filed on or before 6 the date of the enactment of this Act. 7 SEC. 424. SUSPENSION OF RUNNING OF PERIOD FOR FIL- 8 ING PETITION OF SPOUSAL RELIEF AND COL- 9 LECTION CASES. 10 (a) PETITIONS FOR SPOUSAL RELIEF.— 11 (1) IN GENERAL.—Subsection (e) of section 12 6015 is amended by adding at the end the following 13 new paragraph: 14 ‘‘(6) SUSPENSION OF RUNNING OF PERIOD FOR 15 FILING PETITION IN TITLE 11 CASES.—In 16 of a person who is prohibited by reason of a case 17 under title 11, United States Code, from filing a pe- 18 tition under paragraph (1)(A) with respect to a final 19 determination of relief under this section, the run- 20 ning of the period prescribed by such paragraph for 21 filing such a petition with respect to such final de- 22 termination shall be suspended for the period during 23 which the person is so prohibited from filing such a 24 petition, and for 60 days thereafter.’’. the case L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00224 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 225 1 (2) EFFECTIVE DATE.—The amendment made 2 by this subsection shall apply to petitions filed under 3 section 6015(e) of the Internal Revenue Code of 4 1986 after the date of the enactment of this Act. 5 (b) COLLECTION PROCEEDINGS.— 6 7 (1) IN GENERAL.—Subsection (d) of section 6330 is amended— 8 (A) by striking ‘‘appeal such determination 9 to the Tax Court’’ in paragraph (1) and insert- 10 ing ‘‘petition the Tax Court for review of such 11 determination’’, 12 (B) by striking ‘‘JUDICIAL 13 TERMINATION’’ 14 and inserting ‘‘PETITION 15 COURT’’, 16 REVIEW OF DE- in the heading of paragraph (1) FOR REVIEW BY TAX (C) by redesignating paragraph (2) as 17 paragraph (3), and 18 (D) by inserting after paragraph (1) the 19 following new paragraph: 20 ‘‘(2) SUSPENSION OF RUNNING OF PERIOD FOR 21 FILING PETITION IN TITLE 11 CASES.—In 22 of a person who is prohibited by reason of a case 23 under title 11, United States Code, from filing a pe- 24 tition under paragraph (1) with respect to a deter- 25 mination under this section, the running of the pe- the case L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00225 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 226 1 riod prescribed by such subsection for filing such a 2 petition with respect to such determination shall be 3 suspended for the period during which the person is 4 so prohibited from filing such a petition, and for 30 5 days thereafter, and’’. 6 (2) EFFECTIVE DATE.—The amendments made 7 by this subsection shall apply to petitions filed under 8 section 6330 of the Internal Revenue Code of 1986 9 after the date of the enactment of this Act. 10 (c) CONFORMING AMENDMENT.—Subsection (c) of 11 section 6320 is amended by striking ‘‘(2)(B)’’ and insert12 ing ‘‘(3)(B)’’. 13 SEC. 425. APPLICATION OF FEDERAL RULES OF EVIDENCE. 14 (a) IN GENERAL.—Section 7453 is amended by strik- 15 ing ‘‘the rules of evidence applicable in trials without a 16 jury in the United States District Court of the District 17 of Columbia’’ and inserting ‘‘the Federal Rules of Evi18 dence’’. 19 (b) EFFECTIVE DATE.—The amendment made by 20 this section shall apply to proceedings commenced after 21 the date of the enactment of this Act and, to the extent 22 that it is just and practicable, to all proceedings pending 23 on such date. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00226 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 227 1 PART 2—UNITED STATES TAX COURT 2 ADMINISTRATION 3 SEC. 431. JUDICIAL CONDUCT AND DISABILITY PROCE- 4 DURES. 5 (a) IN GENERAL.—Part II of subchapter C of chap- 6 ter 76 is amended by adding at the end the following new 7 section: 8 ‘‘SEC. 7466. JUDICIAL CONDUCT AND DISABILITY PROCE- 9 10 DURES. ‘‘(a) IN GENERAL.—The Tax Court shall prescribe 11 rules, consistent with the provisions of chapter 16 of title 12 28, United States Code, establishing procedures for the 13 filing of complaints with respect to the conduct of any 14 judge or special trial judge of the Tax Court and for the 15 investigation and resolution of such complaints. In inves16 tigating and taking action with respect to any such com17 plaint, the Tax Court shall have the powers granted to 18 a judicial council under such chapter. 19 ‘‘(b) JUDICIAL COUNCIL.—The provisions of sections 20 354(b) through 360 of title 28, United States Code, re21 garding referral or certification to, and petition for review 22 in the Judicial Conference of the United States, and action 23 thereon, shall apply to the exercise by the Tax Court of 24 the powers of a judicial council under subsection (a). The 25 determination pursuant to section 354(b) or 355 of title 26 28, United States Code, shall be made based on the L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00227 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 228 1 grounds for removal of a judge from office under section 2 7443(f), and certification and transmittal by the Con3 ference of any complaint shall be made to the President 4 for consideration under section 7443(f). 5 ‘‘(c) HEARINGS.— 6 ‘‘(1) IN GENERAL.—In conducting hearings 7 pursuant to subsection (a), the Tax Court may exer- 8 cise the authority provided under section 1821 of 9 title 28, United States Code, to pay the fees and al- 10 lowances described in that section. 11 ‘‘(2) REIMBURSEMENT FOR EXPENSES.—The 12 Tax Court shall have the power provided under sec- 13 tion 361 of such title 28 to award reimbursement for 14 the reasonable expenses described in that section. 15 Reimbursements under this paragraph shall be made 16 out of any funds appropriated for purposes of the 17 Tax Court.’’. 18 (b) CLERICAL AMENDMENT.—The table of sections 19 for part II of subchapter C of chapter 76 is amended by 20 adding at the end the following new item: ‘‘Sec. 7466. Judicial conduct and disability procedures.’’. 21 (c) EFFECTIVE DATE.—The amendments made by 22 this section shall apply to proceedings commenced after 23 the date which is 180 days after the date of the enactment 24 of this Act and, to the extent just and practicable, all pro25 ceedings pending on such date. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00228 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 229 1 SEC. 432. ADMINISTRATION, JUDICIAL CONFERENCE, AND 2 FEES. 3 (a) IN GENERAL.—Part III of subchapter C of chap- 4 ter 76 is amended by inserting before section 7471 the 5 following new sections: 6 ‘‘SEC. 7470. ADMINISTRATION. 7 ‘‘Notwithstanding any other provision of law, the Tax 8 Court may exercise, for purposes of management, adminis9 tration, and expenditure of funds of the Court, the au10 thorities provided for such purposes by any provision of 11 law (including any limitation with respect to such provi12 sion of law) applicable to a court of the United States (as 13 that term is defined in section 451 of title 28, United 14 States Code), except to the extent that such provision of 15 law is inconsistent with a provision of this subchapter. 16 ‘‘SEC. 7470A. JUDICIAL CONFERENCE. 17 ‘‘(a) JUDICIAL CONFERENCE.—The chief judge may 18 summon the judges and special trial judges of the Tax 19 Court to an annual judicial conference, at such time and 20 place as the chief judge shall designate, for the purpose 21 of considering the business of the Tax Court and recom22 mending means of improving the administration of justice 23 within the jurisdiction of the Tax Court. The Tax Court 24 shall provide by its rules for representation and active par25 ticipation at such conferences by persons admitted to prac- L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00229 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 230 1 tice before the Tax Court and by other persons active in 2 the legal profession. 3 ‘‘(b) REGISTRATION FEE.—The Tax Court may im- 4 pose a reasonable registration fee on persons (other than 5 judges and special trial judges of the Tax Court) partici6 pating at judicial conferences convened pursuant to sub7 section (a). Amounts so received by the Tax Court shall 8 be available to the Tax Court to defray the expenses of 9 such conferences.’’. 10 (b) DISPOSITION OF FEES.—Section 7473 is amend- 11 ed to read as follows: 12 ‘‘SEC. 7473. DISPOSITION OF FEES. 13 ‘‘Except as provided in sections 7470A and 7475, all 14 fees received by the Tax Court pursuant to this title shall 15 be deposited into a special fund of the Treasury to be 16 available to offset funds appropriated for the operation 17 and maintenance of the Tax Court.’’. 18 (c) CLERICAL AMENDMENTS.—The table of sections 19 for part III of subchapter C of chapter 76 is amended 20 by inserting before the item relating to section 7471 the 21 following new items: ‘‘Sec. 7470. Administration. ‘‘Sec. 7470A. Judicial conference.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00230 Fmt 6652 Sfmt 6211 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 231 1 PART 3—CLARIFICATION RELATING TO UNITED 2 STATES TAX COURT 3 SEC. 441. CLARIFICATION RELATING TO UNITED STATES 4 TAX COURT. 5 Section 7441 is amended by adding at the end the 6 following: ‘‘The Tax Court is not an agency of, and shall 7 be independent of, the executive branch of the Govern8 ment.’’. 10 TITLE V—TRADE-RELATED PROVISIONS 11 SEC. 501. MODIFICATION OF EFFECTIVE DATE OF PROVI- 12 SIONS RELATING TO TARIFF CLASSIFICATION 13 OF RECREATIONAL PERFORMANCE OUTER- 14 WEAR. 9 15 Section 601(c) of the Trade Preferences Extension 16 Act of 2015 (Public Law 114–27; 129 Stat. 412) is 17 amended— 18 (1) in paragraph (1), by striking ‘‘the 180th 19 day after the date of the enactment of this Act’’ and 20 inserting ‘‘March 31, 2016’’; and 21 22 (2) in paragraph (2), by striking ‘‘such 180th day’’ and inserting ‘‘March 31, 2016’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00231 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 232 1 SEC. 502. AGREEMENT BY ASIA-PACIFIC ECONOMIC CO- 2 OPERATION MEMBERS TO REDUCE RATES OF 3 DUTY ON CERTAIN ENVIRONMENTAL GOODS. 4 Section 107 of the Bipartisan Congressional Trade 5 Priorities and Accountability Act of 2015 (Public Law 6 114–26; 19 U.S.C. 4206) is amended by adding at the 7 end the following: 8 9 ‘‘(c) AGREEMENT BY ASIA-PACIFIC ECONOMIC CO- MEMBERS TO REDUCE RATES OPERATION 10 CERTAIN 11 the ENVIRONMENTAL notification OF DUTY ON GOODS.—Notwithstanding requirement described in section 12 103(a)(2), the President may exercise the proclamation 13 authority provided for in section 103(a)(1)(B) to imple14 ment an agreement by members of the Asia-Pacific Eco15 nomic Cooperation (APEC) to reduce any rate of duty on 16 certain environmental goods included in Annex C of the 17 APEC Leaders Declaration issued on September 9, 2012, 18 if (and only if) the President, as soon as feasible after 19 the date of the enactment of this subsection, and before 20 exercising proclamation authority under section 21 103(a)(1)(B), notifies Congress of the negotiations relat22 ing to the agreement and the specific United States objec23 tives in the negotiations.’’. L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00232 Fmt 6652 Sfmt 6201 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250 C:\USERS\HHALPERN\DESKTOP\121515.250.XML H.L.C. 233 1 TITLE VI—BUDGETARY EFFECTS 2 SEC. 601. BUDGETARY EFFECTS. 3 (a) PAYGO SCORECARD.—The budgetary effects of 4 this Act shall not be entered on either PAYGO scorecard 5 maintained pursuant to section 4(d) of the Statutory Pay6 As-You-Go Act of 2010. 7 (b) SENATE PAYGO SCORECARD.—The budgetary ef- 8 fects of this Act shall not be entered on any PAYGO score9 card maintained for purposes of section 201 of S. Con. 10 Res. 21 (110th Congress). ◊ L:\vr\121515\R121515.006.xml December 15, 2015 (11:54 p.m.) VerDate Nov 24 2008 23:54 Dec 15, 2015 Jkt 000000 PO 00000 Frm 00233 Fmt 6652 Sfmt 6301 C:\USERS\HHALPERN\APPDATA\ROAMING\SOFTQUAD\XMETAL\7.0\GEN\C\121515.250