HR 434 EAS

Resolved, That the bill from the House of Representatives (H.R. 434) entitled `An Act to authorize a new trade and investment policy for sub-Sahara Africa.', do pass with the following

AMENDMENTS:

Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) SHORT TITLE- This Act may be cited as the `Trade and Development Act of 1999'.

(b) TABLE OF CONTENTS-

Sec. 1. Short title; table of contents.

TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA

Subtitle A--Trade Policy for Sub-Saharan Africa

Sec. 101. Short title.

Sec. 102. Findings.

Sec. 103. Statement of policy.

Sec. 104. Sub-Saharan Africa defined.

Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

Sec. 111. Eligibility for certain benefits.

Sec. 112. Treatment of certain textiles and apparel.

Sec. 113. United States-sub-Saharan African trade and economic cooperation forum.

Sec. 114. United States-sub-Saharan Africa free trade area.

Sec. 115. Reporting requirement.

Sec. 116. Access to HIV/AIDS pharmaceuticals and medical technologies.

TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN

Subtitle A--Trade Policy for Caribbean Basin Countries

Sec. 201. Short title.

Sec. 202. Findings and policy.

Sec. 203. Definitions.

Subtitle B--Trade Benefits for Caribbean Basin Countries

Sec. 211. Temporary provisions to provide additional trade benefits to certain beneficiary countries.

Sec. 212. Adequate and effective protection for intellectual property rights.

Subtitle C--Cover Over of Tax on Distilled Spirits

Sec. 221. Suspension of limitation on cover over of tax on distilled spirits.

TITLE III--GENERALIZED SYSTEM OF PREFERENCES

Sec. 301. Extension of duty-free treatment under generalized system of preferences.

Sec. 302. Entry procedures for foreign trade zone operations.

TITLE IV--TRADE ADJUSTMENT ASSISTANCE

Sec. 401. Trade adjustment assistance.

Sec. 402. Trade adjustment assistance for textile and apparel workers.

TITLE V--REVENUE PROVISIONS

Sec. 501. Modification of installment method and repeal of installment method for accrual method taxpayers.

Sec. 502. Limitations on welfare benefit funds of 10 or more employer plans.

Sec. 503. Treatment of gain from constructive ownership transactions.

Sec. 504. Limitation on use of nonaccrual experience method of accounting.

Sec. 505. Allocation of basis on transfers of intangibles in certain nonrecognition transactions.

Sec. 506. Increase in elective withholding rate for nonperiodic distributions from deferred compensation plans.

TITLE VI--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

Subtitle A--Amendments to the Trade Act of 1974

Sec. 601. Short title.

Sec. 602. Trade adjustment assistance for farmers.

Subtitle B--Revenue Provisions Relating to Trade Adjustment Assistance

Sec. 610. Reference.

Sec. 611. Modifications to asset diversification test.

Sec. 612. Treatment of income and services provided by taxable REIT subsidiaries.

Sec. 613. Taxable REIT subsidiary.

Sec. 614. Limitation on earnings stripping.

Sec. 615. 100 percent tax on improperly allocated amounts.

Sec. 616. Effective date.

Sec. 617. Health care REITS.

Sec. 618. Conformity with regulated investment company rules.

Sec. 619. Clarification of exception for independent operators.

Sec. 620. Modification of earnings and profits rules.

Sec. 621. Modification of estimated tax rules for closely held real estate investment trusts.

Sec. 622. Controlled entities ineligible for REIT status.

Sec. 623. Modification of individual estimated tax safe harbor.

TITLE VII--OTHER TRADE PROVISIONS

Sec. 701. Normal trade relations for Albania.

Sec. 702. Normal trade relations for Kyrgyzstan.

Sec. 703. Report on employment and trade adjustment assistance.

Sec. 704. Trade adjustment assistance.

Sec. 705. Report on debt relief.

Sec. 706. HIV/AIDS effect on the sub-Saharan African workforce.

Sec. 707. Goods made with forced or indentured child labor.

Sec. 708. Reliquidation of certain nuclear fuel assemblies.

Sec. 709. Sense of the Senate regarding fair access to Japanese telecommunications facilities and services.

Sec. 710. Reports to the Finance and Ways and Means Committees.

Sec. 711. Clarification of section 334 of the Uruguay Round Agreements Act.

Sec. 712. Chief Agricultural Negotiator.

Sec. 713. Revision of retaliation list or other remedial action.

Sec. 714. Sense of Congress regarding comprehensive debt relief for the world's poorest countries.

Sec. 715. Report on trade adjustment assistance for agricultural commodity producers.

Sec. 716. Study on improving African agricultural practices.

Sec. 717. Anticorruption efforts.

Sec. 718. Sense of the Senate regarding efforts to combat desertification in Africa and other nations.

Sec. 719. Report on World Trade Organization Ministerial.

Sec. 720. Marking of imported jewelry.

Sec. 721. Sense of the Senate regarding tariff inversions.

Sec. 722. Limitations on benefits.

Sec. 723. Agriculture trade negotiating objectives and consultations with Congress.

Sec. 724. Application of denial of foreign tax credit regarding trade and investment with respect to certain foreign countries.

Sec. 725. Unreasonable acts, policies, and practices.

TITLE I--EXTENSION OF CERTAIN TRADE BENEFITS TO SUB-SAHARAN AFRICA

Subtitle A--Trade Policy for Sub-Saharan Africa

SEC. 101. SHORT TITLE.

This title may be cited as the `African Growth and Opportunity Act'.

SEC. 102. FINDINGS.

Congress finds that--

(1) it is in the mutual interest of the United States and the countries of sub-Saharan Africa to promote stable and sustainable economic growth and development in sub-Saharan Africa;

(2) the 48 countries of sub-Saharan Africa form a region richly endowed with both natural and human resources;

(3) sub-Saharan Africa represents a region of enormous economic potential and of enduring political significance to the United States;

(4) the region has experienced a rise in both economic development and political freedom as countries in sub-Saharan Africa have taken steps toward liberalizing their economies and encouraged broader participation in the political process;

(5) the countries of sub-Saharan Africa have made progress toward regional economic integration that can have positive benefits for the region;

(6) despite those gains, the per capita income in sub-Saharan Africa averages less than $500 annually;

(7) United States foreign direct investment in the region has fallen in recent years and the sub-Saharan African region receives only minor inflows of direct investment from around the world;

(8) trade between the United States and sub-Saharan Africa, apart from the import of oil, remains an insignificant part of total United States trade;

(9) trade and investment, as the American experience has shown, can represent powerful tools both for economic development and for building a stable political environment in which political freedom can flourish;

(10) increased trade and investment flows have the greatest impact in an economic environment in which trading partners eliminate barriers to trade and capital flows and encourage the development of a vibrant private sector that offers individual African citizens the freedom to expand their economic opportunities and provide for their families;

(11) offering the countries of sub-Saharan Africa enhanced trade preferences will encourage both higher levels of trade and direct investment in support of the positive economic and political developments under way throughout the region; and

(12) encouraging the reciprocal reduction of trade and investment barriers in Africa will enhance the benefits of trade and investment for the region as well as enhance commercial and political ties between the United States and sub-Saharan Africa.

SEC. 103. STATEMENT OF POLICY.

Congress supports--

(1) encouraging increased trade and investment between the United States and sub-Saharan Africa;

(2) reducing tariff and nontariff barriers and other obstacles to sub-Saharan African and United States trade;

(3) expanding United States assistance to sub-Saharan Africa's regional integration efforts;

(4) negotiating reciprocal and mutually beneficial trade agreements, including the possibility of establishing free trade areas that serve the interests of both the United States and the countries of sub-Saharan Africa;

(5) focusing on countries committed to accountable government, economic reform, and the eradication of poverty;

(6) strengthening and expanding the private sector in sub-Saharan Africa;

(7) supporting the development of civil societies and political freedom in sub-Saharan Africa; and

(8) establishing a United States-Sub-Saharan African Economic Cooperation Forum.

SEC. 104. SUB-SAHARAN AFRICA DEFINED.

In this title, the terms `sub-Saharan Africa', `sub-Saharan African country', `country in sub-Saharan Africa', and `countries in sub-Saharan Africa' refer to the following:

(1) Republic of Angola (Angola).

(2) Republic of Botswana (Botswana).

(3) Republic of Burundi (Burundi).

(4) Republic of Cape Verde (Cape Verde).

(5) Republic of Chad (Chad).

(6) Democratic Republic of Congo.

(7) Republic of the Congo (Congo).

(8) Republic of Djibouti (Djibouti).

(9) State of Eritrea (Eritrea).

(10) Gabonese Republic (Gabon).

(11) Republic of Ghana (Ghana).

(12) Republic of Guinea-Bissau (Guinea-Bissau).

(13) Kingdom of Lesotho (Lesotho).

(14) Republic of Madagascar (Madagascar).

(15) Republic of Mali (Mali).

(16) Republic of Mauritius (Mauritius).

(17) Republic of Namibia (Namibia).

(18) Federal Republic of Nigeria (Nigeria).

(19) Democratic Republic of Sao Tome and Principe (Sao Tome and Principe).

(20) Republic of Sierra Leone (Sierra Leone).

(21) Somalia.

(22) Kingdom of Swaziland (Swaziland).

(23) Republic of Togo (Togo).

(24) Republic of Zimbabwe (Zimbabwe).

(25) Republic of Benin (Benin).

(26) Burkina Faso (Burkina).

(27) Republic of Cameroon (Cameroon).

(28) Central African Republic.

(29) Federal Islamic Republic of the Comoros (Comoros).

(30) Republic of Cote d'Ivoire (Cote d'Ivoire).

(31) Republic of Equatorial Guinea (Equatorial Guinea).

(32) Ethiopia.

(33) Republic of the Gambia (Gambia).

(34) Republic of Guinea (Guinea).

(35) Republic of Kenya (Kenya).

(36) Republic of Liberia (Liberia).

(37) Republic of Malawi (Malawi).

(38) Islamic Republic of Mauritania (Mauritania).

(39) Republic of Mozambique (Mozambique).

(40) Republic of Niger (Niger).

(41) Republic of Rwanda (Rwanda).

(42) Republic of Senegal (Senegal).

(43) Republic of Seychelles (Seychelles).

(44) Republic of South Africa (South Africa).

(45) Republic of Sudan (Sudan).

(46) United Republic of Tanzania (Tanzania).

(47) Republic of Uganda (Uganda).

(48) Republic of Zambia (Zambia).

Subtitle B--Extension of Certain Trade Benefits to Sub-Saharan Africa

SEC. 111. ELIGIBILITY FOR CERTAIN BENEFITS.

(a) IN GENERAL- Title V of the Trade Act of 1974 is amended by inserting after section 506 the following new section:

`SEC. 506A. DESIGNATION OF SUB-SAHARAN AFRICAN COUNTRIES FOR CERTAIN BENEFITS.

`(a) AUTHORITY TO DESIGNATE-

`(1) IN GENERAL- Notwithstanding any other provision of law, the President is authorized to designate a country listed in section 104 of the African Growth and Opportunity Act as a beneficiary sub-Saharan African country eligible for the benefits described in subsection (b), if the President determines that the country--

`(A) has established, or is making continual progress toward establishing--

`(i) a market-based economy, where private property rights are protected and the principles of an open, rules-based trading system are observed;

`(ii) a democratic society, where the rule of law, political freedom, participatory democracy, and the right to due process and a fair trial are observed;

`(iii) an open trading system through the elimination of barriers to United States trade and investment and the resolution of bilateral trade and investment disputes;

`(iv) economic policies to reduce poverty, increase the availability of health care and educational opportunities, expand physical infrastructure, and promote the establishment of private enterprise; and

`(v) a system to combat corruption and bribery, such as signing the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;

`(B) does not engage in gross violations of internationally recognized human rights or provide support for acts of international terrorism and cooperates in international efforts to eliminate human rights violations and terrorist activities; and

`(C) subject to the authority granted to the President under section 502 (a), (d), and (e), otherwise satisfies the eligibility criteria set forth in section 502.

`(2) MONITORING AND REVIEW OF CERTAIN COUNTRIES- The President shall monitor and review the progress of each country listed in section 104 of the African Growth and Opportunity Act in meeting the requirements described in paragraph (1) in order to determine the current or potential eligibility of each country to be designated as a beneficiary sub-Saharan African country for purposes of subsection (a). The President shall include the reasons for the President's determinations in the annual report required by section 115 of the African Growth and Opportunity Act.

`(3) CONTINUING COMPLIANCE- If the President determines that a beneficiary sub-Saharan African country is not making continual progress in meeting the requirements described in paragraph (1), the President shall terminate the designation of that country as a beneficiary sub-Saharan African country for purposes of this section, effective on January 1 of the year following the year in which such determination is made.

`(b) PREFERENTIAL TARIFF TREATMENT FOR CERTAIN ARTICLES-

`(1) IN GENERAL- The President may provide duty-free treatment for any article described in section 503(b)(1) (B) through (G) (except for textile luggage) that is the growth, product, or manufacture of a beneficiary sub-Saharan African country described in subsection (a), if, after receiving the advice of the International Trade Commission in accordance with section 503(e), the President determines that such article is not import-sensitive in the context of imports from beneficiary sub-Saharan African countries.

`(2) RULES OF ORIGIN- The duty-free treatment provided under paragraph (1) shall apply to any article described in that paragraph that meets the requirements of section 503(a)(2), except that--

`(A) if the cost or value of materials produced in the customs territory of the United States is included with respect to that article, an amount not to exceed 15 percent of the appraised value of the article at the time it is entered that is attributed to such United States cost or value may be applied toward determining the percentage referred to in subparagraph (A) of section 503(a)(2); and

`(B) the cost or value of the materials included with respect to that article that are produced in one or more beneficiary sub-Saharan African countries shall be applied in determining such percentage.

`(c) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES, ETC- For purposes of this title, the terms `beneficiary sub-Saharan African country' and `beneficiary sub-Saharan African countries' mean a country or countries listed in section 104 of the African Growth and Opportunity Act that the President has determined is eligible under subsection (a) of this section.'.

(b) WAIVER OF COMPETITIVE NEED LIMITATION- Section 503(c)(2)(D) of the Trade Act of 1974 (19 U.S.C. 2463(c)(2)(D)) is amended to read as follows:

`(D) LEAST-DEVELOPED BENEFICIARY DEVELOPING COUNTRIES AND BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES- Subparagraph (A) shall not apply to any least-developed beneficiary developing country or any beneficiary sub-Saharan African country.'.

(c) TERMINATION- Title V of the Trade Act of 1974 is amended by inserting after section 506A, as added by subsection (a), the following new section:

`SEC. 506B. TERMINATION OF BENEFITS FOR SUB-SAHARAN AFRICAN COUNTRIES.

`In the case of a country listed in section 104 of the African Growth and Opportunity Act that is a beneficiary developing country, duty-free treatment provided under this title shall remain in effect through September 30, 2006.'.

(d) CLERICAL AMENDMENTS- The table of contents for title V of the Trade Act of 1974 is amended by inserting after the item relating to section 505 the following new items:

`506A. Designation of sub-Saharan African countries for certain benefits.

`506B. Termination of benefits for sub-Saharan African countries.'.

(e) EFFECTIVE DATE- The amendments made by this section take effect on October 1, 2000.

SEC. 112. TREATMENT OF CERTAIN TEXTILES AND APPAREL.

(a) PREFERENTIAL TREATMENT- Notwithstanding any other provision of law, textile and apparel articles described in subsection (b) (including textile luggage) imported from a beneficiary sub-Saharan African country, described in section 506A(c) of the Trade Act of 1974, shall enter the United States free of duty and free of any quantitative limitations, if--

(1) the country adopts an efficient visa system to guard against unlawful transshipment of textile and apparel goods and the use of counterfeit documents; and

(2) the country enacts legislation or promulgates regulations that would permit United States Customs Service verification teams to have the access necessary to investigate thoroughly allegations of transshipment through such country.

(b) PRODUCTS COVERED- The preferential treatment described in subsection (a) shall apply only to the following textile and apparel products:

(1) APPAREL ARTICLES ASSEMBLED IN BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES- Apparel articles assembled in one or more beneficiary sub-Saharan African countries from fabrics wholly formed and cut in the United States, from yarns wholly formed in the United States that are--

(A) entered under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States; or

(B) entered under chapter 61 or 62 of the Harmonized Tariff Schedule of the United States, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the Harmonized Tariff Schedule of the United States but for the fact that the articles were subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, or other similar processes.

(2) APPAREL ARTICLES CUT AND ASSEMBLED IN BENEFICIARY SUB-SAHARAN AFRICAN COUNTRIES- Apparel articles cut in one or more beneficiary sub-Saharan African countries from fabric wholly formed in the United States from yarns wholly formed in the United States, if such articles are assembled in one or more beneficiary sub-Saharan African countries with thread formed in the United States.

(3) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES- A handloomed, handmade, or folklore article of a beneficiary sub-Saharan African country or countries that is certified as such by the competent authority of such beneficiary country or countries. For purposes of this paragraph, the President, after consultation with the beneficiary sub-Saharan African country or countries concerned, shall determine which, if any, particular textile and apparel goods of the country (or countries) shall be treated as being handloomed, handmade, or folklore goods.

(c) PENALTIES FOR TRANSSHIPMENTS-

(1) PENALTIES FOR EXPORTERS- If the President determines, based on sufficient evidence, that an exporter has engaged in transshipment with respect to textile or apparel products from a beneficiary sub-Saharan African country, then the President shall deny all benefits under this section and section 506A of the Trade Act of 1974 to such exporter, any successor of such exporter, and any other entity owned or operated by the principal of the exporter for a period of 5 years.

(2) TRANSSHIPMENT DESCRIBED- Transshipment within the meaning of this subsection has occurred when preferential treatment for a textile or apparel article under subsection (a) has been claimed on the basis of material false information concerning the country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of this paragraph, false information is material if disclosure of the true information would mean or would have meant that the article is or was ineligible for preferential treatment under subsection (a).

(d) TECHNICAL ASSISTANCE- The Customs Service shall provide technical assistance to the beneficiary sub-Saharan African countries for the implementation of the requirements set forth in subsection (a) (1) and (2).

(e) MONITORING AND REPORTS TO CONGRESS- The Customs Service shall monitor and the Commissioner of Customs shall submit to Congress, not later than March 31 of each year that this section is in effect, a report on the effectiveness of the anti-circumvention systems described in this section and on measures taken by countries in sub-Saharan Africa which export textiles or apparel to the United States to prevent circumvention as described in article 5 of the Agreement on Textiles and Clothing.

(f) SAFEGUARD- The President shall have the authority to impose appropriate remedies, including restrictions on or the removal of quota-free and duty-free treatment provided under this section, in the event that textile and apparel articles from a beneficiary sub-Saharan African country are being imported in such increased quantities as to cause serious damage, or actual threat thereof, to the domestic industry producing like or directly competitive articles. The President shall exercise his authority under this subsection consistent with the Agreement on Textiles and Clothing.

(g) DEFINITIONS- In this section:

(1) AGREEMENT ON TEXTILES AND CLOTHING- The term `Agreement on Textiles and Clothing' means the Agreement on Textiles and Clothing referred to in section 101(d)(4) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(4)).

(2) BENEFICIARY SUB-SAHARAN AFRICAN COUNTRY, ETC- The terms `beneficiary sub-Saharan African country' and `beneficiary sub-Saharan African countries' have the same meaning as such terms have under section 506A(c) of the Trade Act of 1974.

(3) CUSTOMS SERVICE- The term `Customs Service' means the United States Customs Service.

(h) EFFECTIVE DATE- The amendments made by this section take effect on October 1, 2000 and shall remain in effect through September 30, 2006.

SEC. 113. UNITED STATES-SUB-SAHARAN AFRICAN TRADE AND ECONOMIC COOPERATION FORUM.

(a) DECLARATION OF POLICY- The President shall convene annual meetings between senior officials of the United States Government and officials of the governments of sub-Saharan African countries in order to foster close economic ties between the United States and sub-Saharan Africa.

(b) ESTABLISHMENT- Not later than 12 months after the date of enactment of this Act, the President, after consulting with the officials of interested sub-Saharan African governments, shall establish a United States-Sub-Saharan African Trade and Economic Cooperation Forum (in this section referred to as the `Forum').

(c) REQUIREMENTS- In creating the Forum, the President shall meet the following requirements:

(1) FIRST MEETING- The President shall direct the Secretary of Commerce, the Secretary of the Treasury, the Secretary of State, and the United States Trade Representative to invite their counterparts from interested sub-Saharan African governments and representatives of appropriate regional organizations to participate in the first annual meeting to discuss expanding trade and investment relations between the United States and sub-Saharan Africa.

(2) NONGOVERNMENTAL ORGANIZATIONS-

(A) IN GENERAL- The President, in consultation with Congress, shall invite United States nongovernmental organizations to host meetings with their counterparts from sub-Saharan Africa in conjunction with meetings of the Forum for the purpose of discussing the issues described in paragraph (1).

(B) PRIVATE SECTOR- The President, in consultation with Congress, shall invite United States representatives of the private sector to host meetings with their counterparts from sub-Saharan Africa in conjunction with meetings of the Forum for the purpose of discussing the issues described in paragraph (1).

(3) ANNUAL MEETINGS- As soon as practicable after the date of enactment of this Act, the President shall meet with the heads of the governments of interested sub-Saharan African countries for the purpose of discussing the issues described in paragraph (1).

SEC. 114. UNITED STATES-SUB-SAHARAN AFRICA FREE TRADE AREA.

(a) IN GENERAL- The President shall examine the feasibility of negotiating a free trade agreement (or agreements) with interested sub-Saharan African countries.

(b) REPORT TO CONGRESS- Not later than 12 months after the date of enactment of this Act, the President shall submit a report to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives regarding the President's conclusions on the feasibility of negotiating such agreement (or agreements). If the President determines that the negotiation of any such free trade agreement is feasible, the President shall provide a detailed plan for such negotiation that outlines the objectives, timing, any potential benefits to the United States and sub-Saharan Africa, and the likely economic impact of any such agreement.

SEC. 115. REPORTING REQUIREMENT.

Not later than 1 year after the date of enactment of this Act, and annually thereafter for 4 years, the President shall submit a report to Congress on the implementation of this title.

SEC. 116. ACCESS TO HIV/AIDS PHARMACEUTICALS AND MEDICAL TECHNOLOGIES.

(a) FINDINGS- Congress finds that--

(1) since the onset of the worldwide HIV/AIDS epidemic, approximately 34,000,000 people living in sub-Saharan Africa have been infected with the disease;

(2) of those infected, approximately 11,500,000 have died; and

(3) the deaths represent 83 percent of the total HIV/AIDS-related deaths worldwide.

(b) SENSE OF CONGRESS- It is the sense of Congress that--

(1) it is in the interest of the United States to take all necessary steps to prevent further spread of infectious disease, particularly HIV/AIDS;

(2) there is critical need for effective incentives to develop new pharmaceuticals, vaccines, and therapies to combat the HIV/AIDS crisis, especially effective global standards for protecting pharmaceutical and medical innovation;

(3) the overriding priority for responding to the crisis on HIV/AIDS in sub-Saharan Africa should be the development of the infrastructure necessary to deliver adequate health care services, and of public education to prevent transmission and infection, rather than legal standards issues; and

(4) individual countries should have the ability to determine the availability of pharmaceuticals and health care for their citizens in general, and particularly with respect to the HIV/AIDS epidemic.

(c) LIMITATION ON USE OF FUNDS- Funds appropriated or otherwise made available to any department or agency of the United States may not be obligated or expended to seek, through negotiation or otherwise, the revocation or revision of any intellectual property or competition law or policy that regulates HIV/AIDS pharmaceuticals or medical technologies of a beneficiary sub-Saharan African country if the law or policy promotes access to HIV/AIDS pharmaceuticals or medical technologies and the law or policy of the country provides adequate and effective intellectual property protection consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act.

TITLE II--TRADE BENEFITS FOR CARIBBEAN BASIN

Subtitle A--Trade Policy for Caribbean Basin Countries

SEC. 201. SHORT TITLE.

This title may be cited as the `United States-Caribbean Basin Trade Enhancement Act'.

SEC. 202. FINDINGS AND POLICY.

(a) FINDINGS- Congress makes the following findings:

(1) The Caribbean Basin Economic Recovery Act (referred to in this title as `CBERA') represents a permanent commitment by the United States to encourage the development of strong democratic governments and revitalized economies in neighboring countries in the Caribbean Basin.

(2) Thirty-four democratically elected leaders agreed at the 1994 Summit of the Americas to conclude negotiation of a Free Trade Area of the Americas (referred to in this title as `FTAA') by the year 2005.

(3) The economic security of the countries in the Caribbean Basin will be enhanced by the completion of the FTAA.

(4) Offering temporary benefits to Caribbean Basin countries will enhance trade between the United States and the Caribbean Basin, encourage development of trade and investment policies that will facilitate participation of Caribbean Basin countries in the FTAA, preserve the United States commitment to Caribbean Basin beneficiary countries, help further economic development in the Caribbean Basin region, and accelerate the trend toward more open economies in the region.

(5) Promotion of the growth of free enterprise and economic opportunity in the Caribbean Basin will enhance the national security interests of the United States.

(6) Increased trade and economic activity between the United States and Caribbean Basin beneficiary countries will create expanding export opportunities for United States businesses and workers.

(b) POLICY- It is the policy of the United States to--

(1) offer Caribbean Basin beneficiary countries willing to prepare to become a party to the FTAA or a comparable trade agreement, tariff treatment essentially equivalent to that accorded to products of NAFTA countries for certain products not currently eligible for duty-free treatment under the CBERA; and

(2) seek the participation of Caribbean Basin beneficiary countries in the FTAA or a trade agreement comparable to the FTAA at the earliest possible date, with the goal of achieving full participation in such agreement not later than 2005.

SEC. 203. DEFINITIONS.

In this title:

(1) BENEFICIARY COUNTRY- The term `beneficiary country' has the meaning given the term in section 212(a)(1)(A) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(a)(1)(A)).

(2) CBTEA- The term `CBTEA' means the United States-Caribbean Basin Trade Enhancement Act.

(3) NAFTA- The term `NAFTA' means the North American Free Trade Agreement entered into between the United States, Mexico, and Canada on December 17, 1992.

(4) NAFTA COUNTRY- The term `NAFTA country' means any country with respect to which the NAFTA is in force.

(5) WTO AND WTO MEMBER- The terms `WTO' and `WTO member' have the meanings given those terms in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501).

Subtitle B--Trade Benefits for Caribbean Basin Countries

SEC. 211. TEMPORARY PROVISIONS TO PROVIDE ADDITIONAL TRADE BENEFITS TO CERTAIN BENEFICIARY COUNTRIES.

(a) TEMPORARY PROVISIONS- Section 213(b) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(b)) is amended to read as follows:

`(b) IMPORT-SENSITIVE ARTICLES-

`(1) IN GENERAL- Subject to paragraphs (2) through (5), the duty-free treatment provided under this title does not apply to--

`(A) textile and apparel articles which were not eligible articles for purposes of this title on January 1, 1994, as this title was in effect on that date;

`(B) footwear not designated at the time of the effective date of this title as eligible articles for the purpose of the generalized system of preferences under title V of the Trade Act of 1974;

`(C) tuna, prepared or preserved in any manner, in airtight containers;

`(D) petroleum, or any product derived from petroleum, provided for in headings 2709 and 2710 of the HTS;

`(E) watches and watch parts (including cases, bracelets, and straps), of whatever type including, but not limited to, mechanical, quartz digital or quartz analog, if such watches or watch parts contain any material which is the product of any country with respect to which HTS column 2 rates of duty apply; or

`(F) articles to which reduced rates of duty apply under subsection (h).

`(2) TRANSITION PERIOD TREATMENT OF CERTAIN TEXTILE AND APPAREL ARTICLES-

`(A) PRODUCTS COVERED- During the transition period, the preferential treatment described in subparagraph (B) shall apply to the following products:

`(i) APPAREL ARTICLES ASSEMBLED IN A CBTEA BENEFICIARY COUNTRY- Apparel articles assembled in a CBTEA beneficiary country from fabrics wholly formed and cut in the United States, from yarns wholly formed in the United States that are--

`(I) entered under subheading 9802.00.80 of the HTS; or

`(II) entered under chapter 61 or 62 of the HTS, if, after such assembly, the articles would have qualified for entry under subheading 9802.00.80 of the HTS but for the fact that the articles were subjected to stone-washing, enzyme-washing, acid washing, perma-pressing, oven-baking, bleaching, garment-dyeing, or other similar processes.

`(ii) APPAREL ARTICLES CUT AND ASSEMBLED IN A CBTEA BENEFICIARY COUNTRY- Apparel articles cut in a CBTEA beneficiary country from fabric wholly formed in the United States from yarns wholly formed in the United States, if such articles are assembled in such country with thread formed in the United States.

`(iii) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES- A handloomed, handmade, or folklore article of a CBTEA beneficiary country identified under subparagraph (C) that is certified as such by the competent authority of such beneficiary country.

`(iv) TEXTILE LUGGAGE- Textile luggage--

`(I) assembled in a CBTEA beneficiary country from fabric wholly formed and cut in the United States, from yarns wholly formed in the United States, that is entered under subheading 9802.00.80 of the HTS; or

`(II) assembled from fabric cut in a CBTEA beneficiary country from fabric wholly formed in the United States from yarns wholly formed in the United States, if such luggage is assembled in such country with thread formed in the United States.

`(B) PREFERENTIAL TREATMENT- Except as provided in subparagraph (E), during the transition period, the articles described in subparagraph (A) shall enter the United States free of duty and free of any quantitative limitations.

`(C) HANDLOOMED, HANDMADE, AND FOLKLORE ARTICLES DEFINED- For purposes of subparagraph (A)(iii), the President, after consultation with the CBTEA beneficiary country concerned, shall determine which, if any, particular textile and apparel goods of the country shall be treated as being handloomed, handmade, or folklore goods of a kind described in section 2.3 (a), (b), or (c) or Appendix 3.1.B.11 of the Annex.

`(D) PENALTIES FOR TRANSSHIPMENTS-

`(i) PENALTIES FOR EXPORTERS- If the President determines, based on sufficient evidence, that an exporter has engaged in transshipment with respect to textile or apparel products from a CBTEA beneficiary country, then the President shall deny all benefits under this title to such exporter, and any successor of such exporter, for a period of 2 years.

`(ii) PENALTIES FOR COUNTRIES- Whenever the President finds, based on sufficient evidence, that transshipment has occurred, the President shall request that the CBTEA beneficiary country or countries through whose territory the transshipment has occurred take all necessary and appropriate actions to prevent such transshipment. If the President determines that a country is not taking such actions, the President shall reduce the quantities of textile and apparel articles that may be imported into the United States from such country by the quantity of the transshipped articles multiplied by 3.

`(iii) TRANSSHIPMENT DESCRIBED- Transshipment within the meaning of this subparagraph has occurred when preferential treatment for a textile or apparel article under subparagraph (B) has been claimed on the basis of material false information concerning the country of origin, manufacture, processing, or assembly of the article or any of its components. For purposes of this clause, false information is material if disclosure of the true information would mean or would have meant that the article is or was ineligible for preferential treatment under subparagraph (B).

`(E) BILATERAL EMERGENCY ACTIONS-

`(i) IN GENERAL- The President may take bilateral emergency tariff actions of a kind described in section 4 of the Annex with respect to any apparel article imported from a CBTEA beneficiary country if the application of tariff treatment under subparagraph (B) to such article results in conditions that would be cause for the taking of such actions under such section 4 with respect to a like article described in the same 8-digit subheading of the HTS that is imported from Mexico.

`(ii) RULES RELATING TO BILATERAL EMERGENCY ACTION- For purposes of applying bilateral emergency action under this subparagraph--

`(I) the requirements of paragraph (5) of section 4 of the Annex (relating to providing compensation) shall not apply;

`(II) the term `transition period' in section 4 of the Annex shall have the meaning given that term in paragraph (5)(D) of this subsection; and

`(III) the requirements to consult specified in section 4 of the Annex shall be treated as satisfied if the President requests consultations with the beneficiary country in question and the country does not agree to consult within the time period specified under section 4.

`(3) TRANSITION PERIOD TREATMENT OF CERTAIN OTHER ARTICLES ORIGINATING IN BENEFICIARY COUNTRIES-

`(A) EQUIVALENT TARIFF TREATMENT-

`(i) IN GENERAL- Subject to clause (ii), the tariff treatment accorded at any time during the transition period to any article referred to in any of subparagraphs (B) through (F) of paragraph (1) that originates in the territory of a CBTEA beneficiary country shall be identical to the tariff treatment that is accorded at such time under Annex 302.2 of the NAFTA to an article described in the same 8-digit subheading of the HTS that is a good of Mexico and is imported into the United States.

`(ii) EXCEPTION- Clause (i) does not apply to any article accorded duty-free treatment under U.S. Note 2(b) to subchapter II of chapter 98 of the HTS.

`(B) RELATIONSHIP TO SUBSECTION (h) DUTY REDUCTIONS- If at any time during the transition period the rate of duty that would (but for action taken under subparagraph (A)(i) in regard to such period) apply with respect to any article under subsection (h) is a rate of duty that is lower than the rate of duty resulting from such action, then such lower rate of duty shall be applied for the purposes of implementing such action.

`(4) CUSTOMS PROCEDURES-

`(A) IN GENERAL-

`(i) REGULATIONS- Any importer that claims preferential treatment under paragraph (2) or (3) shall comply with customs procedures similar in all material respects to the requirements of Article 502(1) of the NAFTA as implemented pursuant to United States law, in accordance with regulations promulgated by the Secretary of the Treasury.

`(ii) DETERMINATION-

`(I) IN GENERAL- In order to qualify for the preferential treatment under paragraph (2) or (3) and for a Certificate of Origin to be valid with respect to any article for which such treatment is claimed, there shall be in effect a determination by the President that each country described in subclause (II)--

`(aa) has implemented and follows, or

`(bb) is making substantial progress toward implementing and following,

procedures and requirements similar in all material respects to the relevant procedures and requirements under chapter 5 of the NAFTA.

`(II) COUNTRY DESCRIBED- A country is described in this subclause if it is a CBTEA beneficiary country--

`(aa) from which the article is exported, or

`(bb) in which materials used in the production of the article originate or in which the article or such materials undergo production that contributes to a claim that the article is eligible for preferential treatment.

`(B) CERTIFICATE OF ORIGIN- The Certificate of Origin that otherwise would be required pursuant to the provisions of subparagraph (A) shall not be required in the case of an article imported under paragraph (2) or (3) if such Certificate of Origin would not be required under Article 503 of the NAFTA (as implemented pursuant to United States law), if the article were imported from Mexico.

`(5) DEFINITIONS AND SPECIAL RULES- For purposes of this subsection--

`(A) ANNEX- The term `the Annex' means Annex 300-B of the NAFTA.

`(B) CBTEA BENEFICIARY COUNTRY- The term `CBTEA beneficiary country' means any `beneficiary country', as defined by section 212(a)(1)(A) of this title, which the President designates as a CBTEA beneficiary country, taking into account the following criteria:

`(i) Whether a beneficiary country has demonstrated a commitment to--

`(I) undertake its obligations under the WTO on or ahead of schedule;

`(II) participate in negotiations toward the completion of the FTAA or a comparable trade agreement; and

`(III) undertake other steps necessary for that country to become a party to the FTAA or a comparable trade agreement.

`(ii) The extent to which the country follows accepted rules of international trade provided for under the agreements listed in section 101(d) of the Uruguay Round Agreements Act.

`(iii) The extent to which the country provides protection of intellectual property rights--

`(I) in accordance with standards established in the Agreement on Trade-Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act;

`(II) in accordance with standards established in chapter 17 of the NAFTA; and

`(III) by granting the holders of copyrights the ability to control the importation and sale of products that embody copyrighted works, extending the period set forth in Article 1711(6) of NAFTA for protecting test data for agricultural chemicals to 10 years, protecting trademarks regardless of their subsequent designation as geographic indications, and providing enforcement against the importation of infringing products at the border.

`(iv) The extent to which the country provides protections to investors and investments of the United States substantially equivalent to those set forth in chapter 11 of the NAFTA.

`(v) The extent to which the country provides the United States and other WTO members nondiscriminatory, equitable, and reasonable market access with respect to the products for which benefits are provided under paragraphs (2) and (3), and in other relevant product sectors as determined by the President.

`(vi) The extent to which the country provides internationally recognized worker rights, including--

`(I) the right of association,

`(II) the right to organize and bargain collectively,

`(III) prohibition on the use of any form of coerced or compulsory labor,

`(IV) a minimum age for the employment of children, and

`(V) acceptable conditions of work with respect to minimum wages, hours of work, and occupational safety and health;

`(vii) Whether the country has met the counter-narcotics certification criteria set forth in section 490 of the Foreign Assistance Act of 1961 (22 U.S.C. 2291j) for eligibility for United States assistance.

`(viii) The extent to which the country becomes a party to and implements the Inter-American Convention Against Corruption, and becomes party to a convention regarding the extradition of its nationals.

`(ix) The extent to which the country--

`(I) supports the multilateral and regional objectives of the United States with respect to government procurement, including the negotiation of government procurement provisions as part of the FTAA and conclusion of a WTO transparency agreement as provided in the declaration of the WTO Ministerial Conference held in Singapore on December 9 through 13, 1996; and

`(II) applies transparent and competitive procedures in government procurement equivalent to those contained in the WTO Agreement on Government Procurement (described in section 101(d)(17) of the Uruguay Round Agreements Act).

`(x) The extent to which the country follows the rules on customs valuation set forth in the WTO Agreement on Implementation of Article VII of the GATT 1994 (described in section 101(d)(8) of the Uruguay Round Agreements Act).

`(xi) The extent to which the country affords to products of the United States which the President determines to be of commercial importance to the United States with respect to such country, and on a nondiscriminatory basis to like products of other WTO members, tariff treatment that is no less favorable than the most favorable tariff treatment provided by the country to any other country pursuant to any free trade agreement to which such country is a party, other than the Central American Common Market or the Caribbean Community and Common Market.

`(C) CBTEA ORIGINATING GOOD-

`(i) IN GENERAL- The term `CBTEA originating good' means a good that meets the rules of origin for a good set forth in chapter 4 of the NAFTA as implemented pursuant to United States law.

`(ii) APPLICATION OF CHAPTER 4- In applying chapter 4 with respect to a CBTEA beneficiary country for purposes of this subsection--

`(I) no country other than the United States and a CBTEA beneficiary country may be treated as being a party to the NAFTA;

`(II) any reference to trade between the United States and Mexico shall be deemed to refer to trade between the United States and a CBTEA beneficiary country;

`(III) any reference to a party shall be deemed to refer to a CBTEA beneficiary country or the United States; and

`(IV) any reference to parties shall be deemed to refer to any combination of CBTEA beneficiary countries or to the United States and a CBTEA beneficiary country (or any combination thereof).

`(D) TRANSITION PERIOD- The term `transition period' means, with respect to a CBTEA beneficiary country, the period that begins on October 1, 2000, and ends on the earlier of--

`(i) December 31, 2004, or

`(ii) the date on which the FTAA or a comparable trade agreement enters into force with respect to the United States and the CBTEA beneficiary country.

`(E) CBTEA- The term `CBTEA' means the United States-Caribbean Basin Trade Enhancement Act.

`(F) FTAA- The term `FTAA' means the Free Trade Area of the Americas.'.

(b) DETERMINATION REGARDING RETENTION OF DESIGNATION- Section 212(e) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(e)) is amended--

(1) in paragraph (1)--

(A) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

(B) by inserting `(A)' after `(1)';

(C) by striking `would be barred' and all that follows through the end period and inserting: `no longer satisfies one or more of the conditions for designation as a beneficiary country set forth in subsection (b) or such country fails adequately to meet one or more of the criteria set forth in subsection (c).'; and

(D) by adding at the end the following:

`(B) The President may, after the requirements of subsection (a)(2) and paragraph (2) have been met--

`(i) withdraw or suspend the designation of any country as a CBTEA beneficiary country, or

`(ii) withdraw, suspend, or limit the application of preferential treatment under section 213(b) (2) and (3) to any article of any country, if, after such designation, the President determines that as a result of changed circumstances, the performance of such country is not satisfactory under the criteria set forth in section 213(b)(5)(B).'; and

(2) by adding after paragraph (2) the following new paragraph:

`(3) If preferential treatment under section 213(b) (2) and (3) is withdrawn, suspended, or limited with respect to a CBTEA beneficiary country, such country shall not be deemed to be a `party' for the purposes of applying section 213(b)(5)(C) to imports of articles for which preferential treatment has been withdrawn, suspended, or limited with respect to such country.'.

(c) REPORTING REQUIREMENTS-

(1) Section 212(f) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(f)) is amended to read as follows:

`(f) REPORTING REQUIREMENTS-

`(1) IN GENERAL- Not later than December 31, 2001, and every 2 years thereafter during the period this title is in effect, the United States Trade Representative shall submit to Congress a report regarding the operation of this title, including--

`(A) with respect to subsections (b) and (c), the results of a general review of beneficiary countries based on the considerations described in such subsections; and

`(B) the performance of each beneficiary country or CBTEA beneficiary country, as the case may be, under the criteria set forth in section 213(b)(5)(B)(ii).

`(2) PUBLIC COMMENT- Before submitting the report described in paragraph (1), the United States Trade Representative shall publish a notice in the Federal Register requesting public comments on whether beneficiary countries are meeting the criteria listed in section 213(b)(5)(B)(i), and on the performance of each beneficiary country or CBTEA beneficiary country, as the case may be, with respect to the criteria listed in section 213(b)(5)(B)(ii).'.

(2) Section 203(f) of the Andean Trade Preference Act (19 U.S.C. 3202(f)) is amended--

(A) by striking `TRIENNIAL REPORT' in the heading and inserting `REPORT'; and

(B) by striking `On or before' and all that follows through `enactment of this title' and inserting `Not later than January 31, 2001'.

(d) INTERNATIONAL TRADE COMMISSION REPORTS-

(1) Section 215(a) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2704(a)) is amended to read as follows:

`(a) REPORTING REQUIREMENT-

`(1) IN GENERAL- The United States International Trade Commission (in this section referred to as the `Commission') shall submit to Congress and the President biennial reports regarding the economic impact of this title on United States industries and consumers and on the economy of the beneficiary countries.

`(2) FIRST REPORT- The first report shall be submitted not later than September 30, 2001.

`(3) TREATMENT OF PUERTO RICO, ETC- For purposes of this section, industries in the Commonwealth of Puerto Rico and the insular possessions of the United States are considered to be United States industries.'.

(2) Section 206(a) of the Andean Trade Preference Act (19 U.S.C. 3204(a)) is amended to read as follows:

`(a) REPORTING REQUIREMENTS-

`(1) IN GENERAL- The United States International Trade Commission (in this section referred to as the `Commission') shall submit to Congress and the President biennial reports regarding the economic impact of this title on United States industries and consumers, and, in conjunction with other agencies, the effectiveness of this title in promoting drug-related crop eradication and crop substitution efforts of the beneficiary countries.

`(2) SUBMISSION- During the period that this title is in effect, the report required by paragraph (1) shall be submitted on December 31 of each year that the report required by section 215 of the Caribbean Basin Economic Recovery Act is not submitted.

`(3) TREATMENT OF PUERTO RICO, ETC- For purposes of this section, industries in the Commonwealth of Puerto Rico and the insular possessions of the United States are considered to be United States industries.'.

(e) TECHNICAL AND CONFORMING AMENDMENTS-

(1) IN GENERAL-

(A) Section 211 of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701) is amended by inserting `(or other preferential treatment)' after `treatment'.

(B) Section 213(a)(1) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2703(a)(1)) is amended by inserting `and except as provided in subsection (b) (2) and (3),' after `Tax Reform Act of 1986,'.

(2) DEFINITIONS- Section 212(a)(1) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(a)(1)) is amended by adding at the end the following new subparagraphs:

`(D) The term `NAFTA' means the North American Free Trade Agreement entered into between the United States, Mexico, and Canada on December 17, 1992.

`(E) The terms `WTO' and `WTO member' have the meanings given those terms in section 2 of the Uruguay Round Agreements Act (19 U.S.C. 3501).'.

SEC. 212. ADEQUATE AND EFFECTIVE PROTECTION FOR INTELLECTUAL PROPERTY RIGHTS.

Section 212(c) of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2702(c)) is amended by adding at the end the following flush sentence:

`Notwithstanding any other provision of law, the President may determine that a country is not providing adequate and effective protection of intellectual property rights under paragraph (9), even if the country is in compliance with the country's obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights described in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).'.

Subtitle C--Cover Over of Tax on Distilled Spirits

SEC. 221. SUSPENSION OF LIMITATION ON COVER OVER OF TAX ON DISTILLED SPIRITS.

(a) IN GENERAL- Section 7652(f) of the Internal Revenue Code of 1986 (relating to limitation on cover over of tax on distilled spirits) is amended by adding at the end the following new flush sentence:

`The preceding sentence shall not apply to articles that are tax-determined after June 30, 1999, and before October 1, 1999.'

(b) EFFECTIVE DATE-

(1) IN GENERAL- The amendment made by this section shall apply to articles that are tax-determined after June 30, 1999.

(2) SPECIAL RULE-

(A) IN GENERAL- The treasury of Puerto Rico shall make a Conservation Trust Fund transfer within 30 days after the date of each cover over payment (made to such treasury under section 7652(e) of the Internal Revenue Code of 1986) to which section 7652(f) of such Code does not apply by reason of the last sentence thereof.

(B) CONSERVATION TRUST FUND TRANSFER-

(i) IN GENERAL- For purposes of this paragraph, the term `Conservation Trust Fund transfer' means a transfer to the Puerto Rico Conservation Trust Fund of an amount equal to 50 cents per proof gallon of the taxes imposed under section 5001 or section 7652 of such Code on distilled spirits that are covered over to the treasury of Puerto Rico under section 7652(e) of such Code.

(ii) TREATMENT OF TRANSFER- Each Conservation Trust Fund transfer shall be treated as principal for an endowment, the income from which to be available for use by the Puerto Rico Conservation Trust Fund for the purposes for which the Trust Fund was established.

(iii) RESULT OF NONTRANSFER-

(I) IN GENERAL- Upon notification by the Secretary of the Interior that a Conservation Trust Fund transfer has not been made by the treasury of Puerto Rico as required by subparagraph (A), the Secretary of the Treasury shall, except as provided in subclause (II), deduct and withhold from the next cover over payment to be made to the treasury of Puerto Rico under section 7652(e) of such Code an amount equal to the appropriate Conservation Trust Fund transfer and interest thereon at the underpayment rate established under section 6621 of such Code as of the due date of such transfer. The Secretary of the Treasury shall transfer such amount deducted and withheld, and the interest thereon, directly to the Puerto Rico Conservation Trust Fund.

(II) GOOD CAUSE EXCEPTION- If the Secretary of the Interior finds, after consultation with the Governor of Puerto Rico, that the failure by the treasury of Puerto Rico to make a required transfer was for good cause, and notifies the Secretary of the Treasury of the finding of such good cause before the due date of the next cover over payment following the notification of nontransfer, then the Secretary of the Treasury shall not deduct the amount of such nontransfer from any cover over payment.

(C) PUERTO RICO CONSERVATION TRUST FUND- For purposes of this paragraph, the term `Puerto Rico Conservation Trust Fund' means the fund established pursuant to a Memorandum of Understanding between the United States Department of the Interior and the Commonwealth of Puerto Rico, dated December 24, 1968.

TITLE III--GENERALIZED SYSTEM OF PREFERENCES

SEC. 301. EXTENSION OF DUTY-FREE TREATMENT UNDER GENERALIZED SYSTEM OF PREFERENCES.

(a) IN GENERAL- Section 505 of the Trade Act of 1974 (19 U.S.C. 2465) is amended by striking `June 30, 1999' and inserting `June 30, 2004'.

(b) EFFECTIVE DATE-

(1) IN GENERAL- The amendment made by this section applies to articles entered on or after the date of the enactment of this Act.

(2) RETROACTIVE APPLICATION FOR CERTAIN LIQUIDATIONS AND RELIQUIDATIONS-

(A) GENERAL RULE- Notwithstanding section 514 of the Tariff Act of 1930 or any other provision of law, and subject to paragraph (3), any entry--

(i) of an article to which duty-free treatment under title V of the Trade Act of 1974 would have applied if such entry had been made on June 30, 1999, and

(ii) that was made--

(I) after June 30, 1999, and

(II) before the date of enactment of this Act,

shall be liquidated or reliquidated as free of duty, and the Secretary of the Treasury shall refund any duty paid with respect to such entry.

(B) ENTRY- As used in this paragraph, the term `entry' includes a withdrawal from warehouse for consumption.

(3) REQUESTS- Liquidation or reliquidation may be made under paragraph (2) with respect to an entry only if a request therefore is filed with the Customs Service, within 180 days after the date of enactment of this Act, that contains sufficient information to enable the Customs Service--

(A) to locate the entry, or

(B) to reconstruct the entry if it cannot be located.

SEC. 302. ENTRY PROCEDURES FOR FOREIGN TRADE ZONE OPERATIONS.

(a) IN GENERAL- Section 484 of the Tariff Act of 1930 (19 U.S.C. 1484) is amended by adding at the end the following new subsection:

`(i) SPECIAL RULE FOR FOREIGN TRADE ZONE OPERATIONS-

`(1) IN GENERAL- Notwithstanding any other provision of law and except as provided in paragraph (3), all merchandise (including merchandise of different classes, types, and categories), withdrawn from a foreign trade zone during any 7-day period, shall, at the option of the operator or user of the zone, be the subject of a single estimated entry or release filed on or before the first day of the 7-day period in which the merchandise is to be withdrawn from the zone. The estimated entry or release shall be treated as a single entry and a single release of merchandise for purposes of section 13031(a)(9)(A) of the Consolidated Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 58c(a)(9)(A)) and all fee exclusions and limitations of such section 13031 shall apply, including the maximum and minimum fee amounts provided for under subsection (b)(8)(A)(i) of such section. The entry summary for the estimated entry or release shall cover only the merchandise actually withdrawn from the foreign trade zone during the 7-day period.

`(2) OTHER REQUIREMENTS- The Secretary of the Treasury may require that the operator or user of the zone--

`(A) use an electronic data interchange approved by the Customs Service--

`(i) to file the entries described in paragraph (1); and

`(ii) to pay the applicable duties, fees, and taxes with respect to the entries; and

`(B) satisfy the Customs Service that accounting, transportation, and other controls over the merchandise are adequate to protect the revenue and meet the requirements of other Federal agencies.

`(3) EXCEPTION- The provisions of paragraph (1) shall not apply to merchandise the entry of which is prohibited by law or merchandise for which the filing of an entry summary is required before the merchandise is released from customs custody.

`(4) FOREIGN TRADE ZONE; ZONE- In this subsection, the terms `foreign trade zone' and `zone' mean a zone established pursuant to the Act of June 18, 1934, commonly known as the Foreign Trade Zones Act (19 U.S.C. 81a et seq.).'.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect on the date that is 60 days after the date of enactment of this Act.

TITLE IV--TRADE ADJUSTMENT ASSISTANCE

SEC. 401. TRADE ADJUSTMENT ASSISTANCE.

(a) ASSISTANCE FOR WORKERS- Section 245 of the Trade Act of 1974 (19 U.S.C. 2317) is amended--

(1) in subsection (a), by striking `June 30, 1999' and inserting `September 30, 2001'; and

(2) in subsection (b), by striking `June 30, 1999' and inserting `September 30, 2001'.

(b) NAFTA TRANSITIONAL PROGRAM- Section 250(d)(2) of the Trade Act of 1974 (19 U.S.C. 2331(d)(2)) is amended by striking `the period beginning October 1, 1998, and ending June 30, 1999, shall not exceed $15,000,000' and inserting `the period beginning October 1, 1998, and ending September 30, 2001, shall not exceed $30,000,000 for any fiscal year'.

(c) ADJUSTMENT FOR FIRMS- Section 256(b) of the Trade Act of 1974 (19 U.S.C. 2346(b)) is amended by striking `June 30, 1999' and inserting `September 30, 2001'.

(d) TERMINATION- Section 285(c) of the Trade Act of 1974 (19 U.S.C. 2271 note preceding) is amended by striking `June 30, 1999' each place it appears and inserting `September 30, 2001'.

(e) EFFECTIVE DATE- The amendments made by this section take effect on July 1, 1999.

SEC. 402. TRADE ADJUSTMENT ASSISTANCE FOR TEXTILE AND APPAREL WORKERS.

Notwithstanding any other provision of law, workers in textile and apparel firms who lose their jobs or are threatened with job loss as a result of either (1) a decrease in the firm's sales or production; or (2) a firm's plant or facility closure or relocation, shall be certified by the Secretary of Labor as eligible to receive adjustment assistance at the same level of benefits as workers certified under subchapter D of chapter 2 of title II of the Trade Act of 1974 not later than 30 days after the date a petition for certification is filed under such title II.

TITLE V--REVENUE PROVISIONS

SEC. 501. MODIFICATION OF INSTALLMENT METHOD AND REPEAL OF INSTALLMENT METHOD FOR ACCRUAL METHOD TAXPAYERS.

(a) REPEAL OF INSTALLMENT METHOD FOR ACCRUAL BASIS TAXPAYERS-

(1) IN GENERAL- Subsection (a) of section 453 of the Internal Revenue Code of 1986 (relating to installment method) is amended to read as follows:

`(a) USE OF INSTALLMENT METHOD-

`(1) IN GENERAL- Except as otherwise provided in this section, income from an installment sale shall be taken into account for purposes of this title under the installment method.

`(2) ACCRUAL METHOD TAXPAYER- The installment method shall not apply to income from an installment sale if such income would be reported under an accrual method of accounting without regard to this section. The preceding sentence shall not apply to a disposition described in subparagraph (A) or (B) of subsection (l)(2).'.

(2) CONFORMING AMENDMENTS- Sections 453(d)(1), 453(i)(1), and 453(k) are each amended by striking `(a)' each place it appears and inserting `(a)(1)'.

(b) MODIFICATION OF PLEDGE RULES- Paragraph (4) of section 453A(d) of the Internal Revenue Code of 1986 (relating to pledges, etc., of installment obligations) is amended by adding at the end the following: `A payment shall be treated as directly secured by an interest in an installment obligation to the extent an arrangement allows the taxpayer to satisfy all or a portion of the indebtedness with the installment obligation.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to sales or other dispositions occurring on or after the date of the enactment of this Act.

SEC. 502. LIMITATIONS ON WELFARE BENEFIT FUNDS OF 10 OR MORE EMPLOYER PLANS.

(a) BENEFITS TO WHICH EXCEPTION APPLIES- Section 419A(f)(6)(A) of the Internal Revenue Code of 1986 (relating to exception for 10 or more employer plans) is amended to read as follows:

`(A) IN GENERAL- This subpart shall not apply to a welfare benefit fund which is part of a 10 or more employer plan if the only benefits provided through the fund are one or more of the following:

`(i) Medical benefits.

`(ii) Disability benefits.

`(iii) Group term life insurance benefits which do not provide directly or indirectly for any cash surrender value or other money that can be paid, assigned, borrowed, or pledged for collateral for a loan.

The preceding sentence shall not apply to any plan which maintains experience-rating arrangements with respect to individual employers.'.

(b) LIMITATION ON USE OF AMOUNTS FOR OTHER PURPOSES- Section 4976(b) of the Internal Revenue Code of 1986 (defining disqualified benefit) is amended by adding at the end the following new paragraph:

`(5) SPECIAL RULE FOR 10 OR MORE EMPLOYER PLANS EXEMPTED FROM PREFUNDING LIMITS- For purposes of paragraph (1)(C), if--

`(A) subpart D of part I of subchapter D of chapter 1 does not apply by reason of section 419A(f)(6) to contributions to provide one or more welfare benefits through a welfare benefit fund under a 10 or more employer plan, and

`(B) any portion of the welfare benefit fund attributable to such contributions is used for a purpose other than that for which the contributions were made,

then such portion shall be treated as reverting to the benefit of the employers maintaining the fund.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to contributions paid or accrued after June 9, 1999, in taxable years ending after such date.

SEC. 503. TREATMENT OF GAIN FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

(a) IN GENERAL- Part IV of subchapter P of chapter 1 of the Internal Revenue Code of 1986 (relating to special rules for determining capital gains and losses) is amended by inserting after section 1259 the following new section:

`SEC. 1260. GAINS FROM CONSTRUCTIVE OWNERSHIP TRANSACTIONS.

`(a) IN GENERAL- If the taxpayer has gain from a constructive ownership transaction with respect to any financial asset and such gain would (without regard to this section) be treated as a long-term capital gain--

`(1) such gain shall be treated as ordinary income to the extent that such gain exceeds the net underlying long-term capital gain, and

`(2) to the extent such gain is treated as a long-term capital gain after the application of paragraph (1), the determination of the capital gain rate (or rates) applicable to such gain under section 1(h) shall be determined on the basis of the respective rate (or rates) that would have been applicable to the net underlying long-term capital gain.

`(b) INTEREST CHARGE ON DEFERRAL OF GAIN RECOGNITION-

`(1) IN GENERAL- If any gain is treated as ordinary income for any taxable year by reason of subsection (a)(1), the tax imposed by this chapter for such taxable year shall be increased by the amount of interest determined under paragraph (2) with respect to each prior taxable year during any portion of which the constructive ownership transaction was open. Any amount payable under this paragraph shall be taken into account in computing the amount of any deduction allowable to the taxpayer for interest paid or accrued during such taxable year.

`(2) AMOUNT OF INTEREST- The amount of interest determined under this paragraph with respect to a prior taxable year is the amount of interest which would have been imposed under section 6601 on the underpayment of tax for such year which would have resulted if the gain (which is treated as ordinary income by reason of subsection (a)(1)) had been included in gross income in the taxable years in which it accrued (determined by treating the income as accruing at a constant rate equal to the applicable Federal rate as in effect on the day the transaction closed). The period during which such interest shall accrue shall end on the due date (without extensions) for the return of tax imposed by this chapter for the taxable year in which such transaction closed.

`(3) APPLICABLE FEDERAL RATE- For purposes of paragraph (2), the applicable Federal rate is the applicable Federal rate determined under 1274(d) (compounded semiannually) which would apply to a debt instrument with a term equal to the period the transaction was open.

`(4) NO CREDITS AGAINST INCREASE IN TAX- Any increase in tax under paragraph (1) shall not be treated as tax imposed by this chapter for purposes of determining--

`(A) the amount of any credit allowable under this chapter, or

`(B) the amount of the tax imposed by section 55.

`(c) FINANCIAL ASSET- For purposes of this section--

`(1) IN GENERAL- The term `financial asset' means--

`(A) any equity interest in any pass-thru entity, and

`(B) to the extent provided in regulations--

`(i) any debt instrument, and

`(ii) any stock in a corporation which is not a pass-thru entity.

`(2) PASS-THRU ENTITY- For purposes of paragraph (1), the term `pass-thru entity' means--

`(A) a regulated investment company,

`(B) a real estate investment trust,

`(C) an S corporation,

`(D) a partnership,

`(E) a trust,

`(F) a common trust fund,

`(G) a passive foreign investment company (as defined in section 1297 without regard to subsection (e) thereof),

`(H) a foreign personal holding company,

`(I) a foreign investment company (as defined in section 1246(b)), and

`(J) a REMIC.

`(d) CONSTRUCTIVE OWNERSHIP TRANSACTION- For purposes of this section--

`(1) IN GENERAL- The taxpayer shall be treated as having entered into a constructive ownership transaction with respect to any financial asset if the taxpayer--

`(A) holds a long position under a notional principal contract with respect to the financial asset,

`(B) enters into a forward or futures contract to acquire the financial asset,

`(C) is the holder of a call option, and is the grantor of a put option, with respect to the financial asset and such options have substantially equal strike prices and substantially contemporaneous maturity dates, or

`(D) to the extent provided in regulations prescribed by the Secretary, enters into one or more other transactions (or acquires one or more positions) that have substantially the same effect as a transaction described in any of the preceding subparagraphs.

`(2) EXCEPTION FOR POSITIONS WHICH ARE MARKED TO MARKET- This section shall not apply to any constructive ownership transaction if all of the positions which are part of such transaction are marked to market under any provision of this title or the regulations thereunder.

`(3) LONG POSITION UNDER NOTIONAL PRINCIPAL CONTRACT- A person shall be treated as holding a long position under a notional principal contract with respect to any financial asset if such person--

`(A) has the right to be paid (or receive credit for) all or substantially all of the investment yield (including appreciation) on such financial asset for a specified period, and

`(B) is obligated to reimburse (or provide credit for) all or substantially all of any decline in the value of such financial asset.

`(4) FORWARD CONTRACT- The term `forward contract' means any contract to acquire in the future (or provide or receive credit for the future value of) any financial asset.

`(e) NET UNDERLYING LONG-TERM CAPITAL GAIN- For purposes of this section, in the case of any constructive ownership transaction with respect to any financial asset, the term `net underlying long-term capital gain' means the aggregate net capital gain that the taxpayer would have had if--

`(1) the financial asset had been acquired for fair market value on the date such transaction was opened and sold for fair market value on the date such transaction was closed, and

`(2) only gains and losses that would have resulted from the deemed ownership under paragraph (1) were taken into account.

The amount of the net underlying long-term capital gain with respect to any financial asset shall be treated as zero unless the amount thereof is established by clear and convincing evidence.

`(f) SPECIAL RULE WHERE TAXPAYER TAKES DELIVERY- Except as provided in regulations prescribed by the Secretary, if a constructive ownership transaction is closed by reason of taking delivery, this section shall be applied as if the taxpayer had sold all the contracts, options, or other positions which are part of such transaction for fair market value on the closing date. The amount of gain recognized under the preceding sentence shall not exceed the amount of gain treated as ordinary income under subsection (a). Proper adjustments shall be made in the amount of any gain or loss subsequently realized for gain recognized and treated as ordinary income under this subsection.

`(g) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section, including regulations--

`(1) to permit taxpayers to mark to market constructive ownership transactions in lieu of applying this section, and

`(2) to exclude certain forward contracts which do not convey substantially all of the economic return with respect to a financial asset.'.

(b) CLERICAL AMENDMENT- The table of sections for part IV of subchapter P of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

`Sec. 1260. Gains from constructive ownership transactions.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to transactions entered into after July 11, 1999.

SEC. 504. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD OF ACCOUNTING.

(a) IN GENERAL- Section 448(d)(5) of the Internal Revenue Code of 1986 (relating to special rule for services) is amended--

(1) by inserting `in fields described in paragraph (2)(A)' after `services by such person', and

(2) by inserting `CERTAIN PERSONAL' before `SERVICES' in the heading.

(b) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act.

(2) CHANGE IN METHOD OF ACCOUNTING- In the case of any taxpayer required by the amendments made by this section to change its method of accounting for its first taxable year ending after the date of the enactment of this Act--

(A) such change shall be treated as initiated by the taxpayer,

(B) such change shall be treated as made with the consent of the Secretary of the Treasury, and

(C) the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account over a period (not greater than 4 taxable years) beginning with such first taxable year.

SEC. 505. ALLOCATION OF BASIS ON TRANSFERS OF INTANGIBLES IN CERTAIN NONRECOGNITION TRANSACTIONS.

(a) TRANSFERS TO CORPORATIONS- Section 351 of the Internal Revenue Code of 1986 (relating to transfer to corporation controlled by transferor) is amended by redesignating subsection (h) as subsection (i) and by inserting after subsection (g) the following new subsection:

`(h) TREATMENT OF TRANSFERS OF INTANGIBLE PROPERTY-

`(1) TRANSFERS OF LESS THAN ALL SUBSTANTIAL RIGHTS.

`(A) IN GENERAL- A transfer of an interest in intangible property (as defined in section 936(h)(3)(B)) shall be treated under this section as a transfer of property even if the transfer is of less than all of the substantial rights of the transferor in the property.

`(B) ALLOCATION OF BASIS- In the case of a transfer of less than all of the substantial rights of the transferor in the intangible property, the transferor's basis immediately before the transfer shall be allocated among the rights retained by the transferor and the rights transferred on the basis of their respective fair market values.

`(2) NONRECOGNITION NOT TO APPLY TO INTANGIBLE PROPERTY DEVELOPED FOR TRANSFEREE- This section shall not apply to a transfer of intangible property developed by the transferor or any related person if such development was pursuant to an arrangement with the transferee.'.

(b) TRANSFERS TO PARTNERSHIPS- Subsection (d) of section 721 of the Internal Revenue Code of 1986 is amended to read as follows:

`(d) TRANSFERS OF INTANGIBLE PROPERTY-

`(1) IN GENERAL- Rules similar to the rules of section 351(h) shall apply for purposes of this section.

`(2) TRANSFERS TO FOREIGN PARTNERSHIPS- For regulatory authority to treat intangibles transferred to a partnership as sold, see section 367(d)(3).'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to transfers on or after the date of the enactment of this Act.

SEC. 506. INCREASE IN ELECTIVE WITHHOLDING RATE FOR NONPERIODIC DISTRIBUTIONS FROM DEFERRED COMPENSATION PLANS.

(a) IN GENERAL- Section 3405(b)(1) of the Internal Revenue Code of 1986 (relating to withholding) is amended by striking `10 percent' and inserting `15 percent'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to distributions after December 31, 2000.

TITLE VI--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

Subtitle A--Amendments to the Trade Act of 1974

SEC. 601. SHORT TITLE.

This title may be cited as the `Trade Adjustment Assistance for Farmers Act'.

SEC. 602. TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.

(a) IN GENERAL- Title II of the Trade Act of 1974 (19 U.S.C. 2251 et seq.) is amended by adding at the end the following new chapter:

`CHAPTER 6--ADJUSTMENT ASSISTANCE FOR FARMERS

`SEC. 291. DEFINITIONS.

`In this chapter:

`(1) AGRICULTURAL COMMODITY PRODUCER- The term `agricultural commodity producer' means any person who is engaged in the production and sale of an agricultural commodity in the United States and who owns or shares the ownership and risk of loss of the agricultural commodity.

`(2) AGRICULTURAL COMMODITY- The term `agricultural commodity' means any agricultural commodity (including livestock, fish, or harvested seafood) in its raw or natural state.

`(3) DULY AUTHORIZED REPRESENTATIVE- The term `duly authorized representative' means an association of agricultural commodity producers.

`(4) NATIONAL AVERAGE PRICE- The term `national average price' means the national average price paid to an agricultural commodity producer for an agricultural commodity in a marketing year as determined by the Secretary of Agriculture.

`(5) CONTRIBUTED IMPORTANTLY-

`(A) IN GENERAL- The term `contributed importantly' means a cause which is important but not necessarily more important than any other cause.

`(B) DETERMINATION OF CONTRIBUTED IMPORTANTLY- The determination of whether imports of articles like or directly competitive with an agricultural commodity with respect to which the petition under this chapter was filed contributed importantly to a decline in the price of the agricultural commodity shall be made by the Secretary of Agriculture.

`(6) SECRETARY- The term `Secretary' means the Secretary of Agriculture.

`SEC. 292. PETITIONS; GROUP ELIGIBILITY.

`(a) IN GENERAL- A petition for a certification of eligibility to apply for adjustment assistance under this chapter may be filed with the Secretary by a group of agricultural commodity producers or by their duly authorized representative. Upon receipt of the petition, the Secretary shall promptly publish notice in the Federal Register that the Secretary has received the petition and initiated an investigation.

`(b) HEARINGS- If the petitioner, or any other person found by the Secretary to have a substantial interest in the proceedings, submits not later than 10 days after the date of the Secretary's publication under subsection (a) a request for a hearing, the Secretary shall provide for a public hearing and afford such interested persons an opportunity to be present, to produce evidence, and to be heard.

`(c) GROUP ELIGIBILITY REQUIREMENTS- The Secretary shall certify a group of agricultural commodity producers as eligible to apply for adjustment assistance under this chapter if the Secretary determines--

`(1) that the national average price for the agricultural commodity, or a class of goods within the agricultural commodity, produced by the group for the most recent marketing year for which the national average price is available is less than 80 percent of the average of the national average price for such agricultural commodity, or such class of goods, for the 5 marketing years preceding the most recent marketing year; and

`(2) that either--

`(A) increases in imports of articles like or directly competitive with the agricultural commodity, or class of goods within the agricultural commodity, produced by the group contributed importantly to the decline in price described in paragraph (1); or

`(B) imports of articles like or directly competitive with the agricultural commodity, or class of goods within the agricultural commodity, produced by the group account for a significant percentage of the domestic market for the agricultural commodity (or class of goods) and have contributed importantly to the decline in price described in paragraph (1).

`(d) SPECIAL RULE FOR QUALIFIED SUBSEQUENT YEARS- A group of agricultural commodity producers certified as eligible under section 293 shall be eligible to apply for assistance under this chapter in any qualified year after the year the group is first certified, if the Secretary determines that--

`(1) the national average price for the agricultural commodity, or class of goods within the agricultural commodity, produced by the group for the most recent marketing year for which the national average price is available is equal to or less than the price determined under subsection (c)(1); and

`(2) the requirements of subsection (c)(2) (A) or (B) are met.

`(e) DETERMINATION OF QUALIFIED YEAR AND COMMODITY- In this chapter:

`(1) QUALIFIED YEAR- The term `qualified year', with respect to a group of agricultural commodity producers certified as eligible under section 293, means each consecutive year after the year in which the group is certified that the Secretary makes the determination under subsection (c) or (d), as the case may be.

`(2) CLASSES OF GOODS WITHIN A COMMODITY- In any case in which there are separate classes of goods within an agricultural commodity, the Secretary shall treat each class as a separate commodity in determining group eligibility, the national average price, and level of imports under this section and section 296.

`SEC. 293. DETERMINATIONS BY SECRETARY.

`(a) IN GENERAL- As soon as possible after the date on which a petition is filed under section 292, but in any event not later than 60 days after that date, the Secretary shall determine whether the petitioning group meets the requirements of section 292(c) (or (d), as the case may be) and shall, if so, issue a certification of eligibility to apply for assistance under this chapter covering agricultural commodity producers in any group that meet the requirements. Each certification shall specify the date on which eligibility under this chapter begins.

`(b) NOTICE- Upon making a determination on a petition, the Secretary shall promptly publish a summary of the determination in the Federal Register together with the Secretary's reasons for making the determination.

`(c) TERMINATION OF CERTIFICATION- Whenever the Secretary determines, with respect to any certification of eligibility under this chapter, that the decline in price for the agricultural commodity covered by the certification is no longer attributable to the conditions described in section 292, the Secretary shall terminate such certification and promptly cause notice of such termination to be published in the Federal Register together with the Secretary's reasons for making such determination.

`SEC. 294. STUDY BY SECRETARY WHEN INTERNATIONAL TRADE COMMISSION BEGINS INVESTIGATION.

`(a) IN GENERAL- Whenever the International Trade Commission (in this chapter referred to as the `Commission') begins an investigation under section 202 with respect to an agricultural commodity, the Commission shall immediately notify the Secretary of the investigation. Upon receipt of the notification, the Secretary shall immediately begin a study of--

`(1) the number of agricultural commodity producers producing a like or directly competitive agricultural commodity who have been or are likely to be certified as eligible for adjustment assistance under this chapter, and

`(2) the extent to which the adjustment of such producers to the import competition may be facilitated through the use of existing programs.

`(b) REPORT- The report of the Secretary of the study under subsection (a) shall be made to the President not later than 15 days after the day on which the Commission makes its report under section 202(f). Upon making his report to the President, the Secretary shall also promptly make it public (with the exception of information which the Secretary determines to be confidential) and shall have a summary of it published in the Federal Register.

`SEC. 295. BENEFIT INFORMATION TO AGRICULTURAL COMMODITY PRODUCERS.

`(a) IN GENERAL- The Secretary shall provide full information to producers about the benefit allowances, training, and other employment services available under this title and about the petition and application procedures, and the appropriate filing dates, for such allowances, training, and services. The Secretary shall provide whatever assistance is necessary to enable groups to prepare petitions or applications for program benefits under this title.

`(b) NOTICE OF BENEFITS-

`(1) IN GENERAL- The Secretary shall mail written notice of the benefits available under this chapter to each agricultural commodity producer that the Secretary has reason to believe is covered by a certification made under this chapter.

`(2) OTHER NOTICE- The Secretary shall publish notice of the benefits available under this chapter to agricultural commodity producers that are covered by each certification made under this chapter in newspapers of general circulation in the areas in which such producers reside.

`SEC. 296. QUALIFYING REQUIREMENTS FOR AGRICULTURAL COMMODITY PRODUCERS.

`(a) IN GENERAL- Payment of a trade adjustment allowance shall be made to an adversely affected agricultural commodity producer covered by a certification under this chapter who files an application for such allowance within 90 days after the date on which the Secretary makes a determination and issues a certification of eligibility under section 293, if the following conditions are met:

`(1) The producer submits to the Secretary sufficient information to establish the amount of agricultural commodity covered by the application filed under subsection (a), that was produced by the producer in the most recent year.

`(2) The producer certifies that the producer has not received cash benefits under any provision of this title other than this chapter.

`(3) The producer's net farm income (as determined by the Secretary) for the most recent year is less than the producer's net farm income for the latest year in which no adjustment assistance was received by the producer under this chapter.

`(4) The producer certifies that the producer has met with an Extension Service employee or agent to obtain, at no cost to the producer, information and technical assistance that will assist the producer in adjusting to import competition with respect to the adversely affected agricultural commodity, including--

`(A) information regarding the feasibility and desirability of substituting 1 or more alternative commodities for the adversely affected agricultural commodity; and

`(B) technical assistance that will improve the competitiveness of the production and marketing of the adversely affected agricultural commodity by the producer, including yield and marketing improvements.

`(b) AMOUNT OF CASH BENEFITS-

`(1) IN GENERAL- Subject to the provisions of section 298, an adversely affected agricultural commodity producer described in subsection (a) shall be entitled to adjustment assistance under this chapter in an amount equal to the product of--

`(A) one-half of the difference between--

`(i) an amount equal to 80 percent of the average of the national average price of the agricultural commodity covered by the application described in subsection (a) for the 5 marketing years preceding the most recent marketing year, and

`(ii) the national average price of the agricultural commodity for the most recent marketing year, and

`(B) the amount of the agricultural commodity produced by the agricultural commodity producer in the most recent marketing year.

`(2) SPECIAL RULE FOR SUBSEQUENT QUALIFIED YEARS- The amount of cash benefits for a qualified year shall be determined in the same manner as cash benefits are determined under paragraph (1) except that the average national price of the agricultural commodity shall be determined under paragraph (1)(A)(i) by using the 5-marketing-year period used to determine the amount of cash benefits for the first certification.

`(c) MAXIMUM AMOUNT OF CASH ASSISTANCE- The maximum amount of cash benefits an agricultural commodity producer may receive in any 12-month period shall not exceed $10,000.

`(d) LIMITATIONS ON OTHER ASSISTANCE- An agricultural commodity producer entitled to receive a cash benefit under this chapter--

`(1) shall not be eligible for any other cash benefit under this title, and

`(2) shall be entitled to employment services and training benefits under sections 235 and 236.

`SEC. 297. FRAUD AND RECOVERY OF OVERPAYMENTS.

`(a) IN GENERAL-

`(1) REPAYMENT- If the Secretary, or a court of competent jurisdiction, determines that any person has received any payment under this chapter to which the person was not entitled, such person shall be liable to repay such amount to the Secretary, except that the Secretary may waive such repayment if the Secretary determines, in accordance with guidelines prescribed by the Secretary that--

`(A) the payment was made without fault on the part of such person, and

`(B) requiring such repayment would be contrary to equity and good conscience.

`(2) RECOVERY OF OVERPAYMENT- Unless an overpayment is otherwise recovered, or waived under paragraph (1), the Secretary shall recover the overpayment by deductions from any sums payable to such person under this chapter.

`(b) FALSE STATEMENTS- If the Secretary, or a court of competent jurisdiction, determines that a person--

`(1) knowingly has made, or caused another to make, a false statement or representation of a material fact, or

`(2) knowingly has failed, or caused another to fail, to disclose a material fact,

and as a result of such false statement or representation, or of such nondisclosure, such person has received any payment under this chapter to which the person was not entitled, such person shall, in addition to any other penalty provided by law, be ineligible for any further payments under this chapter.

`(c) NOTICE AND DETERMINATION- Except for overpayments determined by a court of competent jurisdiction, no repayment may be required, and no deduction may be made, under this section until a determination under subsection (a)(1) by the Secretary has been made, notice of the determination and an opportunity for a fair hearing thereon has been given to the person concerned, and the determination has become final.

`(d) PAYMENT TO TREASURY- Any amount recovered under this section shall be returned to the Treasury of the United States.

`(e) PENALTIES- Whoever makes a false statement of a material fact knowing it to be false, or knowingly fails to disclose a material fact, for the purpose of obtaining or increasing for himself or for any other person any payment authorized to be furnished under this chapter shall be fined not more than $10,000 or imprisoned for not more than 1 year, or both.

`SEC. 298. AUTHORIZATION OF APPROPRIATIONS.

`(a) IN GENERAL- There are authorized to be appropriated and there are appropriated to the Department of Agriculture for fiscal years 2000 through 2001, such sums as may be necessary to carry out the purposes of this chapter not to exceed $100,000,000 for each fiscal year.'.

`(b) PROPORTIONATE REDUCTION- If in any year, the amount appropriated under this chapter is insufficient to meet the requirements for adjustment assistance payable under this chapter, the amount of assistance payable under this chapter shall be reduced proportionately.'.

(b) CONFORMING AMENDMENT- The table of contents for title II of the Trade Act of 1974 is amended by inserting after the items relating to chapter 5, the following:

`Chapter 6--Adjustment Assistance for Farmers

`Sec. 291. Definitions.

`Sec. 292. Petitions; group eligibility.

`Sec. 293. Determinations by Secretary.

`Sec. 294. Study by Secretary when International Trade Commission begins investigation.

`Sec. 295. Benefit information to agricultural commodity producers.

`Sec. 296. Qualifying requirements for agricultural commodity producers.

`Sec. 297. Fraud and recovery of overpayments.

`Sec. 298. Authorization of appropriations.'.

Subtitle B--Revenue Provisions Relating to Trade Adjustment Assistance

SEC. 610. REFERENCE.

Except as otherwise expressly provided, whenever in this subtitle an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

SEC. 611. MODIFICATIONS TO ASSET DIVERSIFICATION TEST.

(a) IN GENERAL- Subparagraph (B) of section 856(c)(4) is amended to read as follows:

`(B)(i) not more than 25 percent of the value of its total assets is represented by securities (other than those includible under subparagraph (A)),

`(ii) not more than 20 percent of the value of its total assets is represented by securities of 1 or more taxable REIT subsidiaries, and

`(iii) except with respect to a taxable REIT subsidiary and securities includible under subparagraph (A)--

`(I) not more than 5 percent of the value of its total assets is represented by securities of any one issuer,

`(II) the trust does not hold securities possessing more than 10 percent of the total voting power of the outstanding securities of any one issuer, and

`(III) the trust does not hold securities having a value of more than 10 percent of the total value of the outstanding securities of any one issuer.'.

(b) EXCEPTION FOR STRAIGHT DEBT SECURITIES- Subsection (c) of section 856 is amended by adding at the end the following new paragraph:

`(7) STRAIGHT DEBT SAFE HARBOR IN APPLYING PARAGRAPH (4)- Securities of an issuer which are straight debt (as defined in section 1361(c)(5) without regard to subparagraph (B)(iii) thereof) shall not be taken into account in applying paragraph (4)(B)(ii)(III) if--

`(A) the issuer is an individual, or

`(B) the only securities of such issuer which are held by the trust or a taxable REIT subsidiary of the trust are straight debt (as so defined), or

`(C) the issuer is a partnership and the trust holds at least a 20 percent profits interest in the partnership.'.

SEC. 612. TREATMENT OF INCOME AND SERVICES PROVIDED BY TAXABLE REIT SUBSIDIARIES.

(a) INCOME FROM TAXABLE REIT SUBSIDIARIES NOT TREATED AS IMPERMISSIBLE TENANT SERVICE INCOME- Clause (i) of section 856(d)(7)(C) (relating to exceptions to impermissible tenant service income) is amended by inserting `or through a taxable REIT subsidiary of such trust' after `income'.

(b) CERTAIN INCOME FROM TAXABLE REIT SUBSIDIARIES NOT EXCLUDED FROM RENTS FROM REAL PROPERTY-

(1) IN GENERAL- Subsection (d) of section 856 (relating to rents from real property defined) is amended by adding at the end the following new paragraphs:

`(8) SPECIAL RULE FOR TAXABLE REIT SUBSIDIARIES- For purposes of this subsection, amounts paid to a real estate investment trust by a taxable REIT subsidiary of such trust shall not be excluded from rents from real property by reason of paragraph (2)(B) if the requirements of either of the following subparagraphs are met:

`(A) LIMITED RENTAL EXCEPTION- The requirements of this subparagraph are met with respect to any property if at least 90 percent of the leased space of the property is rented to persons other than taxable REIT subsidiaries of such trust and other than persons described in section 856(d)(2)(B). The preceding sentence shall apply only to the extent that the amounts paid to the trust as rents from real property (as defined in paragraph (1) without regard to paragraph (2)(B)) from such property are substantially comparable to such rents made by the other tenants of the trust's property for comparable space.

`(B) EXCEPTION FOR CERTAIN LODGING FACILITIES- The requirements of this subparagraph are met with respect to an interest in real property which is a qualified lodging facility leased by the trust to a taxable REIT subsidiary of the trust if the property is operated on behalf of such subsidiary by a person who is an eligible independent contractor.

`(9) ELIGIBLE INDEPENDENT CONTRACTOR- For purposes of paragraph (8)(B)--

`(A) IN GENERAL- The term `eligible independent contractor' means, with respect to any qualified lodging facility, any independent contractor if, at the time such contractor enters into a management agreement or other similar service contract with the taxable REIT subsidiary to operate the facility, such contractor (or any related person) is actively engaged in the trade or business of operating qualified lodging facilities for any person who is not a related person with respect to the real estate investment trust or the taxable REIT subsidiary.

`(B) SPECIAL RULES- Solely for purposes of this paragraph and paragraph (8)(B), a person shall not fail to be treated as an independent contractor with respect to any qualified lodging facility by reason of any of the following:

`(i) The taxable REIT subsidiary bears the expenses for the operation of the facility pursuant to the management agreement or other similar service contract.

`(ii) The taxable REIT subsidiary receives the revenues from the operation of such facility, net of expenses for such operation and fees payable to the operator pursuant to such agreement or contract.

`(iii) The real estate investment trust receives income from such person with respect to another property that is attributable to a lease of such other property to such person that was in effect as of the later of--

`(I) January 1, 1999, or

`(II) the earliest date that any taxable REIT subsidiary of such trust entered into a management agreement or other similar service contract with such person with respect to such qualified lodging facility.

`(C) RENEWALS, ETC., OF EXISTING LEASES- For purposes of subparagraph (B)(iii)--

`(i) a lease shall be treated as in effect on January 1, 1999, without regard to its renewal after such date, so long as such renewal is pursuant to the terms of such lease as in effect on whichever of the dates under subparagraph (B)(iii) is the latest, and

`(ii) a lease of a property entered into after whichever of the dates under subparagraph (B)(iii) is the latest shall be treated as in effect on such date if--

`(I) on such date, a lease of such property from the trust was in effect, and

`(II) under the terms of the new lease, such trust receives a substantially similar or lesser benefit in comparison to the lease referred to in subclause (I).

`(D) QUALIFIED LODGING FACILITY- For purposes of this paragraph--

`(i) IN GENERAL- The term `qualified lodging facility' means any lodging facility unless wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility.

`(ii) LODGING FACILITY- The term `lodging facility' means a hotel, motel, or other establishment more than one-half of the dwelling units in which are used on a transient basis.

`(iii) CUSTOMARY AMENITIES AND FACILITIES- The term `lodging facility' includes customary amenities and facilities operated as part of, or associated with, the lodging facility so long as such amenities and facilities are customary for other properties of a comparable size and class owned by other owners unrelated to such real estate investment trust.

`(E) OPERATE INCLUDES MANAGE- References in this paragraph to operating a property shall be treated as including a reference to managing the property.

`(F) RELATED PERSON- Persons shall be treated as related to each other if such persons are treated as a single employer under subsection (a) or (b) of section 52.'.

(2) CONFORMING AMENDMENT- Subparagraph (B) of section 856(d)(2) is amended by inserting `except as provided in paragraph (8),' after `(B)'.

(3) DETERMINING RENTS FROM REAL PROPERTY-

(A)(i) Paragraph (1) of section 856(d) is amended by striking `adjusted bases' each place it occurs and inserting `fair market values'.

(ii) The amendment made by this subparagraph shall apply to taxable years beginning after December 31, 2000.

(B)(i) Clause (i) of section 856(d)(2)(B) is amended by striking `number' and inserting `value'.

(ii) The amendment made by this subparagraph shall apply to amounts received or accrued in taxable years beginning after December 31, 2000, except for amounts paid pursuant to leases in effect on July 12, 1999, or pursuant to a binding contract in effect on such date and at all times thereafter.

SEC. 613. TAXABLE REIT SUBSIDIARY.

(a) IN GENERAL- Section 856 is amended by adding at the end the following new subsection:

`(l) TAXABLE REIT SUBSIDIARY- For purposes of this part--

`(1) IN GENERAL- The term `taxable REIT subsidiary' means, with respect to a real estate investment trust, a corporation (other than a real estate investment trust) if--

`(A) such trust directly or indirectly owns stock in such corporation, and

`(B) such trust and such corporation jointly elect that such corporation shall be treated as a taxable REIT subsidiary of such trust for purposes of this part.

Such an election, once made, shall be irrevocable unless both such trust and corporation consent to its revocation. Such election, and any revocation thereof, may be made without the consent of the Secretary.

`(2) 35 PERCENT OWNERSHIP IN ANOTHER TAXABLE REIT SUBSIDIARY- The term `taxable REIT subsidiary' includes, with respect to any real estate investment trust, any corporation (other than a real estate investment trust) with respect to which a taxable REIT subsidiary of such trust owns directly or indirectly--

`(A) securities possessing more than 35 percent of the total voting power of the outstanding securities of such corporation, or

`(B) securities having a value of more than 35 percent of the total value of the outstanding securities of such corporation.

The preceding sentence shall not apply to a qualified REIT subsidiary (as defined in subsection (i)(2)). The rule of section 856(c)(7) shall apply for purposes of subparagraph (B).

`(3) EXCEPTIONS- The term `taxable REIT subsidiary' shall not include--

`(A) any corporation which directly or indirectly operates or manages a lodging facility or a health care facility, and

`(B) any corporation which directly or indirectly provides to any other person (under a franchise, license, or otherwise) rights to any brand name under which any lodging facility or health care facility is operated.

Subparagraph (B) shall not apply to rights provided to an eligible independent contractor to operate or manage a lodging facility if such rights are held by such corporation as a franchisee, licensee, or in a similar capacity and such lodging facility is either owned by such corporation or is leased to such corporation from the real estate investment trust.

`(4) DEFINITIONS- For purposes of paragraph (3)--

`(A) LODGING FACILITY- The term `lodging facility' has the meaning given to such term by paragraph (9)(D)(ii).

`(B) HEALTH CARE FACILITY- The term `health care facility' has the meaning given to such term by subsection (e)(6)(D)(ii).'.

(b) CONFORMING AMENDMENT- Paragraph (2) of section 856(i) is amended by adding at the end the following new sentence: `Such term shall not include a taxable REIT subsidiary.'.

SEC. 614. LIMITATION ON EARNINGS STRIPPING.

Paragraph (3) of section 163(j) (relating to limitation on deduction for interest on certain indebtedness) is amended by striking `and' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `, and', and by adding at the end the following new subparagraph:

`(C) any interest paid or accrued (directly or indirectly) by a taxable REIT subsidiary (as defined in section 856(l)) of a real estate investment trust to such trust.'.

SEC. 615. 100 PERCENT TAX ON IMPROPERLY ALLOCATED AMOUNTS.

(a) IN GENERAL- Subsection (b) of section 857 (relating to method of taxation of real estate investment trusts and holders of shares or certificates of beneficial interest) is amended by redesignating paragraphs (7) and (8) as paragraphs (8) and (9), respectively, and by inserting after paragraph (6) the following new paragraph:

`(7) INCOME FROM REDETERMINED RENTS, REDETERMINED DEDUCTIONS, AND EXCESS INTEREST-

`(A) IMPOSITION OF TAX- There is hereby imposed for each taxable year of the real estate investment trust a tax equal to 100 percent of redetermined rents, redetermined deductions, and excess interest.

`(B) REDETERMINED RENTS-

`(i) IN GENERAL- The term `redetermined rents' means rents from real property (as defined in subsection 856(d)) the amount of which would (but for subparagraph (E)) be reduced on distribution, apportionment, or allocation under section 482 to clearly reflect income as a result of services furnished or rendered by a taxable REIT subsidiary of the real estate investment trust to a tenant of such trust.

`(ii) EXCEPTION FOR CERTAIN SERVICES- Clause (i) shall not apply to amounts received directly or indirectly by a real estate investment trust for services described in paragraph (1)(B) or (7)(C)(i) of section 856(d).

`(iii) EXCEPTION FOR DE MINIMIS AMOUNTS- Clause (i) shall not apply to amounts described in section 856(d)(7)(A) with respect to a property to the extent such amounts do not exceed the one percent threshold described in section 856(d)(7)(B) with respect to such property.

`(iv) EXCEPTION FOR COMPARABLY PRICED SERVICES- Clause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if--

`(I) such subsidiary renders a significant amount of similar services to persons other than such trust and tenants of such trust who are unrelated (within the meaning of section 856(d)(8)(F)) to such subsidiary, trust, and tenants, but

`(II) only to the extent the charge for such service so rendered is substantially comparable to the charge for the similar services rendered to persons referred to in subclause (I).

`(v) EXCEPTION FOR CERTAIN SEPARATELY CHARGED SERVICES- Clause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if--

`(I) the rents paid to the trust by tenants (leasing at least 25 percent of the net leasable space in the trust's property) who are not receiving such service from such subsidiary are substantially comparable to the rents paid by tenants leasing comparable space who are receiving such service from such subsidiary, and

`(II) the charge for such service from such subsidiary is separately stated.

`(vi) EXCEPTION FOR CERTAIN SERVICES BASED ON SUBSIDIARY'S INCOME FROM THE SERVICES- Clause (i) shall not apply to any service rendered by a taxable REIT subsidiary of a real estate investment trust to a tenant of such trust if the gross income of such subsidiary from such service is not less than 150 percent of such subsidiary's direct cost in furnishing or rendering the service.

`(vii) EXCEPTIONS GRANTED BY SECRETARY- The Secretary may waive the tax otherwise imposed by subparagraph (A) if the trust establishes to the satisfaction of the Secretary that rents charged to tenants were established on an arms' length basis even though a taxable REIT subsidiary of the trust provided services to such tenants.

`(C) REDETERMINED DEDUCTIONS- The term `redetermined deductions' means deductions (other than redetermined rents) of a taxable REIT subsidiary of a real estate investment trust if the amount of such deductions would (but for subparagraph (E)) be decreased on distribution, apportionment, or allocation under section 482 to clearly reflect income as between such subsidiary and such trust.

`(D) EXCESS INTEREST- The term `excess interest' means any deductions for interest payments by a taxable REIT subsidiary of a real estate investment trust to such trust to the extent that the interest payments are in excess of a rate that is commercially reasonable.

`(E) COORDINATION WITH SECTION 482- The imposition of tax under subparagraph (A) shall be in lieu of any distribution, apportionment, or allocation under section 482.

`(F) REGULATORY AUTHORITY- The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this paragraph. Until the Secretary prescribes such regulations, real estate investment trusts and their taxable REIT subsidiaries may base their allocations on any reasonable method.'.

(b) AMOUNT SUBJECT TO TAX NOT REQUIRED TO BE DISTRIBUTED- Subparagraph (E) of section 857(b)(2) (relating to real estate investment trust taxable income) is amended by striking `paragraph (5)' and inserting `paragraphs (5) and (7)'.

SEC. 616. EFFECTIVE DATE.

(a) IN GENERAL- The amendments made by sections 611 through 615 shall apply to taxable years beginning after December 31, 2000.

(b) TRANSITIONAL RULES RELATED TO SECTION 611-

(1) EXISTING ARRANGEMENTS-

(A) IN GENERAL- Except as otherwise provided in this paragraph, the amendment made by section 611 shall not apply to a real estate investment trust with respect to--

(i) securities of a corporation held directly or indirectly by such trust on July 12, 1999,

(ii) securities of a corporation held by an entity on July 12, 1999, if such trust acquires control of such entity pursuant to a written binding contract in effect on such date and at all times thereafter before such acquisition,

(iii) securities received by such trust (or a successor) in exchange for, or with respect to, securities described in clause (i) or (ii) in a transaction in which gain or loss is not recognized, and

(iv) securities acquired directly or indirectly by such trust as part of a reorganization (as defined in section 368(a)(1) of the Internal Revenue Code of 1986) with respect to such trust if such securities are described in clause (i), (ii), or (iii) with respect to any other real estate investment trust.

(B) NEW TRADE OR BUSINESS OR SUBSTANTIAL NEW ASSETS- Subparagraph (A) shall cease to apply to securities of a corporation as of the first day after July 12, 1999, on which such corporation engages in a substantial new line of business, or acquires any substantial asset, other than--

(i) pursuant to a binding contract in effect on such date and at all times thereafter before the acquisition of such asset,

(ii) in a transaction in which gain or loss is not recognized by reason of section 1031 or 1033 of the Internal Revenue Code of 1986, or

(iii) in a reorganization (as so defined) with another corporation the securities of which are described in paragraph (1)(A) of this subsection.

(C) LIMITATION ON TRANSITION RULES- Subparagraph (A) shall cease to apply to securities of a corporation held, acquired, or received, directly or indirectly, by a real estate investment trust as of the first day after July 12, 1999, on which such trust acquires any additional securities of such corporation other than--

(i) pursuant to a binding contract in effect on July 12, 1999, and at all times thereafter, or

(ii) in a reorganization (as so defined) with another corporation the securities of which are described in paragraph (1)(A) of this subsection.

(2) TAX-FREE CONVERSION- If--

(A) at the time of an election for a corporation to become a taxable REIT subsidiary, the amendment made by section 611 does not apply to such corporation by reason of paragraph (1), and

(B) such election first takes effect before January 1, 2004,

such election shall be treated as a reorganization qualifying under section 368(a)(1)(A) of such Code.

SEC. 617. HEALTH CARE REITS.

(a) SPECIAL FORECLOSURE RULE FOR HEALTH CARE PROPERTIES- Subsection (e) of section 856 (relating to special rules for foreclosure property) is amended by adding at the end the following new paragraph:

`(6) SPECIAL RULE FOR QUALIFIED HEALTH CARE PROPERTIES- For purposes of this subsection--

`(A) ACQUISITION AT EXPIRATION OF LEASE- The term `foreclosure property' shall include any qualified health care property acquired by a real estate investment trust as the result of the termination of a lease of such property (other than a termination by reason of a default, or the imminence of a default, on the lease).

`(B) GRACE PERIOD- In the case of a qualified health care property which is foreclosure property solely by reason of subparagraph (A), in lieu of applying paragraphs (2) and (3)--

`(i) the qualified health care property shall cease to be foreclosure property as of the close of the second taxable year after the taxable year in which such trust acquired such property, and

`(ii) if the real estate investment trust establishes to the satisfaction of the Secretary that an extension of the grace period in clause (i) is necessary to the orderly leasing or liquidation of the trust's interest in such qualified health care property, the Secretary may grant one or more extensions of the grace period for such qualified health care property.

Any such extension shall not extend the grace period beyond the close of the 6th year after the taxable year in which such trust acquired such qualified health care property.

`(C) INCOME FROM INDEPENDENT CONTRACTORS- For purposes of applying paragraph (4)(C) with respect to qualified health care property which is foreclosure property by reason of subparagraph (A) or paragraph (1), income derived or received by the trust from an independent contractor shall be disregarded to the extent such income is attributable to--

`(i) any lease of property in effect on the date the real estate investment trust acquired the qualified health care property (without regard to its renewal after such date so long as such renewal is pursuant to the terms of such lease as in effect on such date), or

`(ii) any lease of property entered into after such date if--

`(I) on such date, a lease of such property from the trust was in effect, and

`(II) under the terms of the new lease, such trust receives a substantially similar or lesser benefit in comparison to the lease referred to in subclause (I).

`(D) QUALIFIED HEALTH CARE PROPERTY-

`(i) IN GENERAL- The term `qualified health care property' means any real property (including interests therein), and any personal property incident to such real property, which--

`(I) is a health care facility, or

`(II) is necessary or incidental to the use of a health care facility.

`(ii) HEALTH CARE FACILITY- For purposes of clause (i), the term `health care facility' means a hospital, nursing facility, assisted living facility, congregate care facility, qualified continuing care facility (as defined in section 7872(g)(4)), or other licensed facility which extends medical or nursing or ancillary services to patients and which, immediately before the termination, expiration, default, or breach of the lease of or mortgage secured by such facility, was operated by a provider of such services which was eligible for participation in the medicare program under title XVIII of the Social Security Act with respect to such facility.'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 618. CONFORMITY WITH REGULATED INVESTMENT COMPANY RULES.

(a) DISTRIBUTION REQUIREMENT- Clauses (i) and (ii) of section 857(a)(1)(A) (relating to requirements applicable to real estate investment trusts) are each amended by striking `95 percent (90 percent for taxable years beginning before January 1, 1980)' and inserting `90 percent'.

(b) IMPOSITION OF TAX- Clause (i) of section 857(b)(5)(A) (relating to imposition of tax in case of failure to meet certain requirements) is amended by striking `95 percent (90 percent in the case of taxable years beginning before January 1, 1980)' and inserting `90 percent'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 619. CLARIFICATION OF EXCEPTION FOR INDEPENDENT OPERATORS.

(a) IN GENERAL- Paragraph (3) of section 856(d) (relating to independent contractor defined) is amended by adding at the end the following flush sentence:

`In the event that any class of stock of either the real estate investment trust or such person is regularly traded on an established securities market, only persons who own, directly or indirectly, more than 5 percent of such class of stock shall be taken into account as owning any of the stock of such class for purposes of applying the 35 percent limitation set forth in subparagraph (B) (but all of the outstanding stock of such class shall be considered outstanding in order to compute the denominator for purpose of determining the applicable percentage of ownership).'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2000.

SEC. 620. MODIFICATION OF EARNINGS AND PROFITS RULES.

(a) RULES FOR DETERMINING WHETHER REGULATED INVESTMENT COMPANY HAS EARNINGS AND PROFITS FROM NON-RIC YEAR- Subsection (c) of section 852 is amended by adding at the end the following new paragraph:

`(3) DISTRIBUTIONS TO MEET REQUIREMENTS OF SUBSECTION (a)(2)(B)- Any distribution which is made in order to comply with the requirements of subsection (a)(2)(B)--

`(A) shall be treated for purposes of this subsection and subsection (a)(2)(B) as made from the earliest earnings and profits accumulated in any taxable year to which the provisions of this part did not apply rather than the most recently accumulated earnings and profits, and

`(B) to the extent treated under subparagraph (A) as made from accumulated earnings and profits, shall not be treated as a distribution for purposes of subsection (b)(2)(D) and section 855.'.

(b) CLARIFICATION OF APPLICATION OF REIT SPILLOVER DIVIDEND RULES TO DISTRIBUTIONS TO MEET QUALIFICATION REQUIREMENT- Subparagraph (B) of section 857(d)(3) is amended by inserting before the period `and section 858'.

(c) APPLICATION OF DEFICIENCY DIVIDEND PROCEDURES- Paragraph (1) of section 852(e) is amended by adding at the end the following new sentence: `If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year.'.

(d) EFFECTIVE DATE- The amendments made by this section shall apply to distributions after December 31, 2000.

SEC. 621. MODIFICATION OF ESTIMATED TAX RULES FOR CLOSELY HELD REAL ESTATE INVESTMENT TRUSTS.

(a) IN GENERAL- Subsection (e) of section 6655 (relating to estimated tax by corporations) is amended by adding at the end the following new paragraph:

`(5) TREATMENT OF CERTAIN REIT DIVIDENDS-

`(A) IN GENERAL- Any dividend received from a closely held real estate investment trust by any person which owns (after application of subsections (d)(5) and (l)(3)(B) of section 856) 10 percent or more (by vote or value) of the stock or beneficial interests in the trust shall be taken into account in computing annualized income installments under paragraph (2) in a manner similar to the manner under which partnership income inclusions are taken into account.

`(B) CLOSELY HELD REIT- For purposes of subparagraph (A), the term `closely held real estate investment trust' means a real estate investment trust with respect to which 5 or fewer persons own (after application of subsections (d)(5) and (l)(3)(B) of section 856) 50 percent or more (by vote or value) of the stock or beneficial interests in the trust.'

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to estimated tax payments due on or after November 15, 1999.

SEC. 622. CONTROLLED ENTITIES INELIGIBLE FOR REIT STATUS.

(a) IN GENERAL- Subsection (a) of section 856 (relating to definition of real estate investment trust) is amended by striking `and' at the end of paragraph (6), by redesignating paragraph (7) as paragraph (8), and by inserting after paragraph (6) the following new paragraph:

`(7) which is not a controlled entity (as defined in subsection (l)); and'.

(b) CONTROLLED ENTITY- Section 856 is amended by adding at the end the following new subsection:

`(l) CONTROLLED ENTITY-

`(1) IN GENERAL- For purposes of subsection (a)(7), an entity is a controlled entity if, at any time during the taxable year, one person (other than a qualified entity)--

`(A) in the case of a corporation, owns stock--

`(i) possessing at least 50 percent of the total voting power of the stock of such corporation, or

`(ii) having a value equal to at least 50 percent of the total value of the stock of such corporation, or

`(B) in the case of a trust, owns beneficial interests in the trust which would meet the requirements of subparagraph (A) if such interests were stock.

`(2) QUALIFIED ENTITY- For purposes of paragraph (1), the term `qualified entity' means--

`(A) any real estate investment trust, and

`(B) any partnership in which one real estate investment trust owns at least 50 percent of the capital and profits interests in the partnership.

`(3) ATTRIBUTION RULES- For purposes of this paragraphs (1) and (2)--

`(A) IN GENERAL- Rules similar to the rules of subsections (d)(5) and (h)(3) shall apply; except that section 318(a)(3)(C) shall not be applied under such rules to treat stock owned by a qualified entity as being owned by a person which is not a qualified entity.

`(B) STAPLED ENTITIES- A group of entities which are stapled entities (as defined in section 269B(c)(2)) shall be treated as one person.

`(4) EXCEPTION FOR CERTAIN NEW REITS-

`(A) IN GENERAL- The term `controlled entity' shall not include an incubator REIT.

`(B) INCUBATOR REIT- A corporation shall be treated as an incubator REIT for any taxable year during the eligibility period if it meets all the following requirements for such year:

`(i) The corporation elects to be treated as an incubator REIT.

`(ii) The corporation has only voting common stock outstanding.

`(iii) Not more than 50 percent of the corporation's real estate assets consist of mortgages.

`(iv) From not later than the beginning of the last half of the second taxable year, at least 10 percent of the corporation's capital is provided by lenders or equity investors who are unrelated to the corporation's largest shareholder.

`(v) The corporation annually increases the value of its real estate assets by at least 10 percent.

`(vi) The directors of the corporation adopt a resolution setting forth an intent to engage in a going public transaction.

No election may be made with respect to any REIT if an election under this subsection was in effect for any predecessor of such REIT. The requirement of clause (ii) shall not fail to be met merely because a going public transaction is accomplished through a transaction described in section 368(a)(1) with another corporation which had another class of stock outstanding prior to the transaction.

`(C) ELIGIBILITY PERIOD-

`(i) IN GENERAL- The eligibility period (for which an incubator REIT election can be made) begins with the REIT's second taxable year and ends at the close of the REIT's third taxable year, except that the REIT may, subject to clauses (ii), (iii), and (iv), elect to extend such period for an additional 2 taxable years.

`(ii) GOING PUBLIC TRANSACTION- A REIT may not elect to extend the eligibility period under clause (i) unless it enters into an agreement with the Secretary that if it does not engage in a going public transaction by the end of the extended eligibility period, it shall pay Federal income taxes for the 2 years of the extended eligibility period as if it had not made an incubator REIT election and had ceased to qualify as a REIT for those 2 taxable years.

`(iii) RETURNS, INTEREST, AND NOTICE-

`(I) RETURNS- In the event the corporation ceases to be treated as a REIT by operation of clause (ii), the corporation shall file any appropriate amended returns reflecting the change in status within 3 months of the close of the extended eligibility period.

`(II) INTEREST- Interest shall be payable on any tax imposed by reason of clause (ii) for any taxable year but, unless there was a finding under subparagraph (D), no substantial underpayment penalties shall be imposed.

`(III) NOTICE- The corporation shall, at the same time it files its returns under subclause (I), notify its shareholders and any other persons whose tax position is, or may reasonably be expected to be, affected by the change in status so they also may file any appropriate amended returns to conform their tax treatment consistent with the corporation's loss of REIT status.

`(IV) REGULATIONS- The Secretary shall provide appropriate regulations setting forth transferee liability and other provisions to ensure collection of tax and the proper administration of this provision.

`(iv) Clauses (ii) and (iii) shall not apply if the corporation allows its incubator REIT status to lapse at the end of the initial 2-year eligibility period without engaging in a going public transaction if the corporation is not a controlled entity as of the beginning of its fourth taxable year. In such a case, the corporation's directors may still be liable for the penalties described in subparagraph (D) during the eligibility period.

`(D) SPECIAL PENALTIES- If the Secretary determines that an incubator REIT election was filed for a principal purpose other than as part of a reasonable plan to undertake a going public transaction, an excise tax of $20,000 shall be imposed on each of the corporation's directors for each taxable year for which an election was in effect.

`(E) GOING PUBLIC TRANSACTION- For purposes of this paragraph, a going public transaction means--

`(i) a public offering of shares of the stock of the incubator REIT;

`(ii) a transaction, or series of transactions, that results in the stock of the incubator REIT being regularly traded on an established securities market and that results in at least 50 percent of such stock being held by shareholders who are unrelated to persons who held such stock before it began to be so regularly traded; or

`(iii) any transaction resulting in ownership of the REIT by 200 or more persons (excluding the largest single shareholder) who in the aggregate own at least 50 percent of the stock of the REIT.

For the purposes of this subparagraph, the rules of paragraph (3) shall apply in determining the ownership of stock.

`(F) DEFINITIONS- The term `established securities market' shall have the meaning set forth in the regulations under section 897.'

(c) CONFORMING AMENDMENT- Paragraph (2) of section 856(h) is amended by striking `and (6)' each place it appears and inserting `, (6), and (7)'.

(d) EFFECTIVE DATE-

(1) IN GENERAL- The amendments made by this section shall apply to taxable years ending after July 14, 1999.

(2) EXCEPTION FOR EXISTING CONTROLLED ENTITIES- The amendments made by this section shall not apply to any entity which is a controlled entity (as defined in section 856(l) of the Internal Revenue Code of 1986, as added by this section) as of July 14, 1999, which is a real estate investment trust for the taxable year which includes such date, and which has significant business assets or activities as of such date. For purposes of the preceding sentence, an entity shall be treated as such a controlled entity on July 14, 1999, if it becomes such an entity after such date in a transaction--

(A) made pursuant to a written agreement which was binding on such date and at all times thereafter, or

(B) described on or before such date in a filing with the Securities and Exchange Commission required solely by reason of the transaction.

SEC. 623. MODIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR.

(a) IN GENERAL- The table contained in clause (i) of section 6654(d)(1)(C) (relating to limitation on use of preceding year's tax) is amended by striking all matter beginning with the item relating to 1999 or 2000 and inserting the following new items:

106.5

106

112

110'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply with respect to any installment payment for taxable years beginning after December 31, 1999.

TITLE VII--OTHER TRADE PROVISIONS

SEC. 701. NORMAL TRADE RELATIONS FOR ALBANIA.

(a) FINDINGS- Congress makes the following findings:

(1) Albania has been found to be in full compliance with the freedom of emigration requirements under title IV of the Trade Act of 1974.

(2) Since its emergence from communism, Albania has made progress toward democratic rule and the creation of a free-market economy.

(3) Albania has concluded a bilateral investment treaty with the United States.

(4) Albania has demonstrated a strong desire to build a friendly relationship with the United States and has been very cooperative with NATO and the international community during and after the Kosova crisis.

(5) The extension of unconditional normal trade relations treatment to the products of Albania will enable the United States to avail itself of all rights under the World Trade Organization with respect to Albania when that country becomes a member of the World Trade Organization.

(b) TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF 1974 TO ALBANIA-

(1) PRESIDENTIAL DETERMINATIONS AND EXTENSIONS OF NONDISCRIMINATORY TREATMENT- Notwithstanding any provision of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the President may--

(A) determine that such title should no longer apply to Albania; and

(B) after making a determination under subparagraph (A) with respect to Albania, proclaim the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of that country.

(2) TERMINATION OF APPLICATION OF TITLE IV- On or after the effective date of the extension under paragraph (1)(B) of nondiscriminatory treatment to the products of Albania, title IV of the Trade Act of 1974 shall cease to apply to that country.

SEC. 702. NORMAL TRADE RELATIONS FOR KYRGYZSTAN.

(a) FINDINGS- Congress makes the following findings:

(1) Kyrgyzstan has been found to be in full compliance with the freedom of emigration requirements under title IV of the Trade Act of 1974.

(2) Since its independence from the Soviet Union in 1991, Kyrgyzstan has made great progress toward democratic rule and toward creating a free-market economic system.

(3) Kyrgyzstan concluded a bilateral investment treaty with the United States in 1994.

(4) Kyrgyzstan has demonstrated a strong desire to build a friendly and cooperative relationship with the United States.

(5) The extension of unconditional normal trade relations treatment to the products of Kyrgyzstan will enable the United States to avail itself of all rights under the World Trade Organization with respect to Kyrgyzstan.

(b) TERMINATION OF APPLICATION OF TITLE IV OF THE TRADE ACT OF 1974 TO KYRGYZSTAN-

(1) PRESIDENTIAL DETERMINATIONS AND EXTENSIONS OF NONDISCRIMINATORY TREATMENT- Notwithstanding any provision of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et seq.), the President may--

(A) determine that such title should no longer apply to Kyrgyzstan; and

(B) after making a determination under subparagraph (A) with respect to Kyrgyzstan, proclaim the extension of nondiscriminatory treatment (normal trade relations treatment) to the products of that country.

(2) TERMINATION OF APPLICATION OF TITLE IV- On or after the effective date of the extension under paragraph (1)(B) of nondiscriminatory treatment to the products of Kyrgyzstan, title IV of the Trade Act of 1974 shall cease to apply to that country.

SEC. 703. REPORT ON EMPLOYMENT AND TRADE ADJUSTMENT ASSISTANCE.

(a) IN GENERAL- Not later than 9 months after the date of enactment of this section, the Comptroller General of the United States shall submit a report to Congress regarding the efficiency and effectiveness of Federal and State coordination of employment and retraining activities associated with the following programs and legislation:

(1) trade adjustment assistance (including NAFTA trade adjustment assistance) provided for under title II of the Trade Act of 1974;

(2) the Job Training Partnership Act;

(3) the Workforce Investment Act; and

(4) unemployment insurance.

(b) PERIOD COVERED- The report shall cover the activities involved in the programs and legislation listed in subsection (a) from January 1, 1994, to December 31, 1999.

(c) DATA AND RECOMMENDATIONS- The report shall at a minimum include specific data and recommendations regarding--

(1) the compatibility of program requirements related to the employment and retraining of dislocated workers in the United States, with particular emphasis on the trade adjustment assistance programs provided for under title II of the Trade Act of 1974;

(2) the compatibility of application procedures related to the employment and retraining of dislocated workers in the United States;

(3) the capacity of the programs in addressing foreign trade and the transfer of production to other countries on workers in the United States measured in terms of loss of employment and wages;

(4) the capacity of the programs in addressing foreign trade and the transfer of production to other countries on secondary workers in the United States measured in terms of loss of employment and wages;

(5) how the impact of foreign trade and the transfer of production to other countries would have changed the number of beneficiaries covered under the trade adjustment assistance program if the trade adjustment assistance program covered secondary workers in the United States; and

(6) the effectiveness of the programs described in subsection (a) in achieving reemployment of United States workers and maintaining wage levels of United States workers who have been dislocated as a result of foreign trade and the transfer of production to other countries.

SEC. 704. TRADE ADJUSTMENT ASSISTANCE.

(a) CERTIFICATION OF ELIGIBILITY FOR WORKERS REQUIRED FOR DECOMMISSIONING OR CLOSURE OF FACILITY-

(1) IN GENERAL- Notwithstanding any other provision of law or any decision by the Secretary of Labor denying certification or eligibility for certification for adjustment assistance under title II of the Trade Act of 1974, a qualified worker described in paragraph (2) shall be certified by the Secretary as eligible to apply for adjustment assistance under such title II.

(2) QUALIFIED WORKER- For purposes of this subsection, a `qualified worker' means a worker who--

(A) was determined to be covered under Trade Adjustment Assistance Certification TA-W-28,438; and

(B) was necessary for the decommissioning or closure of a nuclear power facility.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect on the date of enactment of this Act.

SEC. 705. REPORT ON DEBT RELIEF.

The President shall, not later than 180 days after the date of enactment of this Act, submit to Congress a report on the President's recommendations for bilateral debt relief for sub-Saharan African countries, the President's recommendations for new loan, credit, and guarantee programs and procedures for such countries, and the President's assessment of how debt relief will affect the ability of each such country to participate fully in the international trading system.

SEC. 706. HIV/AIDS EFFECT ON THE SUB-SAHARAN AFRICAN WORKFORCE.

In selecting issues of common interest to the United States-Sub-Saharan African Trade and Economic Cooperation Forum, the President shall instruct the United States delegates to the Forum to promote a review by the Forum of the HIV/AIDS epidemic in each sub-Saharan African country and the effect of the HIV/AIDS epidemic on human and social development in each country.

SEC. 707. GOODS MADE WITH FORCED OR INDENTURED CHILD LABOR.

(a) IN GENERAL- Section 307 of the Tariff Act of 1930 (19 U.S.C. 1307) is amended by adding at the end the following new sentence: `For purposes of this section, the term `forced labor or/and indentured labor' includes forced or indentured child labor.'.

(b) EFFECTIVE DATE- The amendment made by this section shall take effect on the date of enactment of this Act.

SEC. 708. RELIQUIDATION OF CERTAIN NUCLEAR FUEL ASSEMBLIES.

(a) IN GENERAL- Notwithstanding section 514 of the Tariff Act of 1930 (19 U.S.C. 1514) or any other provision of law, upon proper request filed with the Secretary of the Treasury not later than 90 days after the date of enactment of this Act, the Secretary shall--

(1) reliquidate as free of duty the entries listed in subsection (b); and

(2) refund any duties paid with respect to such entries as shown on Customs Service Collection Receipt Number 527006753.

(b) ENTRIES- The entries referred to in subsection (a) are as follows:

Date of entry

062-2320014-5

January 16, 1996

062-2320085-5

February 13, 1996

839-4030989-7

January 25, 1996

839-4031053-1

December 2, 1996

839-4031591-0

January 21, 1997.

SEC. 709. SENSE OF THE SENATE REGARDING FAIR ACCESS TO JAPANESE TELECOMMUNICATIONS FACILITIES AND SERVICES.

(a) FINDINGS- The Senate makes the following findings:

(1) The United States has a deep and sustained interest in the promotion of deregulation, competition, and regulatory reform in Japan.

(2) New and bold measures by the Government of Japan regarding regulatory reform will help remove the regulatory and structural impediments to the effective functioning of market forces in the Japanese economy.

(3) Regulatory reform will increase the efficient allocation of resources in Japan, which is critical to returning Japan to a long-term growth path powered by domestic demand.

(4) Regulatory reform will not only improve market access for United States business and other foreign firms, but will also enhance consumer choice and economic prosperity in Japan.

(5) A sustained recovery of the Japanese economy is vital to a sustained recovery of Asian economies.

(6) The Japanese economy must serve as one of the main engines of growth for Asia and for the global economy.

(7) The Governments of the United States and Japan reconfirmed the critical importance of deregulation, competition, and regulatory reform when the two governments established the Enhanced Initiative on Deregulation and Competition Policy in 1997.

(8) Telecommunications is a critical sector requiring reform in Japan, where the market is hampered by a history of laws, regulations, and monopolistic practices that do not meet the needs of a competitive market.

(9) As the result of Japan's laws, regulations, and monopolistic practices, Japanese consumers and Japanese industry have been denied the broad benefits of innovative telecommunications services, cutting edge technology, and lower prices that competition would bring to the market.

(10) Japan's significant lag in developing broadband and Internet services, and Japan's lag in the entire area of electronic commerce, is a direct result of a noncompetitive telecommunications regulatory structure.

(11) Japan's lag in developing broadband and Internet services is evidenced by the following:

(A) Japan has only 17,000,000 Internet users, while the United States has 80,000,000 Internet users.

(B) Japan hosts fewer than 2,000,000 websites, while the United States hosts over 30,000,000 websites.

(C) Electronic commerce in Japan is valued at less than $1,000,000,000, while in the United States electronic commerce is valued at over $30,000,000,000.

(D) 19 percent of Japan's schools are connected to the Internet, while in the United States 89 percent of schools are connected.

(12) Leading edge foreign telecommunications companies, because of their high level of technology and innovation, are the key to building the necessary telecommunications infrastructure in Japan, which will only be able to serve Japanese consumers and industry if there is a fundamental change in Japan's regulatory approach to telecommunications.

(b) SENSE OF THE SENATE- It is the sense of the Senate that--

(1) the appropriate officials in the executive branch should implement vigorously the call for Japan to undertake a major regulatory reform in the telecommunications sector, the so-called `Telecommunications Big Bang';

(2) a `Telecommunications Big Bang' must address fundamental legislative and regulatory issues within a strictly defined timeframe;

(3) the new telecommunications regulatory framework should put competition first in order to encourage new and innovative businesses to enter the telecommunications market in Japan;

(4) the Government of Japan should ensure that Nippon Telegraph and Telephone Corporation (NTT) and its affiliates (the NTT Group) are prevented from using their dominant position in the wired and wireless market in an anticompetitive manner; and

(5) the Government of Japan should take credible steps to ensure that competitive carriers have reasonable, cost-based, and nondiscriminatory access to the rights-of-way, facilities, and services controlled by NTT, the NTT Group, other utilities, and the Government of Japan, including--

(A) access to interconnection at market-based rates;

(B) unrestricted access to unbundled elements of the network belonging to NTT and the NTT Group; and

(C) access to public roads for the installation of facilities.

SEC. 710. REPORTS TO THE FINANCE AND WAYS AND MEANS COMMITTEES.

(a) REPORTS REGARDING INITIATIVES TO UPDATE THE INTERNATIONAL MONETARY FUND- Section 607 of the Foreign Operations, Export Financing, and Related Appropriations Act, 1999 (as contained in section 101(d) of division A of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999) (Public Law 105-277; 112 Stat. 2681-224), relating to international financial programs and reform, is amended--

(1) by inserting `Finance,' after `Foreign Relations,'; and

(2) by inserting `, Ways and Means,' before `and Banking and Financial Services'.

(b) REPORTS ON FINANCIAL STABILIZATION PROGRAMS- Section 1704(b) of the International Financial Institutions Act (22 U.S.C. 262r-3(b)) is amended to read as follows:

`(b) TIMING- Not later than March 15, 1999, and semiannually thereafter, the Secretary of the Treasury shall submit to the Committees on Banking and Financial Services, Ways and Means, and International Relations of the House of Representatives and the Committees on Finance, Foreign Relations, and Banking, Housing, and Urban Affairs of the Senate a report on the matters described in subsection (a).'.

(c) ANNUAL REPORT ON THE STATE OF THE INTERNATIONAL FINANCIAL SYSTEM, IMF REFORM, AND COMPLIANCE WITH IMF AGREEMENTS- Section 1705(a) of the International Financial Institutions Act (22 U.S.C. 262r-4(a)) is amended by striking `Committee on Banking and Financial Services of the House of Representatives and the Committee on Foreign Relations of the Senate' and inserting `Committees on Banking and Financial Services and on Ways and Means of the House of Representatives and the Committees on Finance and on Foreign Relations of the Senate'.

(d) AUDITS OF THE IMF- Section 1706(a) of the International Financial Institutions Act (22 U.S.C. 262r-5(a)) is amended by striking `Committee on Banking and Financial Services of the House of Representatives and the Committee on Foreign Relations of the Senate' and inserting `Committees on Banking and Financial Services and on Ways and Means of the House of Representatives and the Committees on Finance and on Foreign Relations of the Senate'.

(e) REPORT ON PROTECTION OF BORDERS AGAINST DRUG TRAFFIC- Section 629 of the Treasury and General Government Appropriations Act, 1999 (as contained in section 101(h) of division A of the Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999) (Public Law 105-277; 112 Stat. 2681-522), relating to general provisions, is amended by adding at the end the following new paragraph:

`(3) For purposes of paragraph (1), the term `appropriate congressional committees' includes the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives.'.

SEC. 711. CLARIFICATION OF SECTION 334 OF THE URUGUAY ROUND AGREEMENTS ACT.

(a) IN GENERAL- Section 334(b)(2) of the Uruguay Round Agreements Act (19 U.S.C. 3592(b)(2)) is amended--

(1) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively;

(2) in the matter preceding clause (i) (as redesignated), by striking `Notwithstanding paragraph (1)(D)' and inserting `(A) Notwithstanding paragraph (1)(D) and except as provided in subparagraphs (B) and (C)'; and

(3) by adding at the end the following:

`(B) Notwithstanding paragraph (1)(C), fabric classified under the HTS as of silk, cotton, man-made fiber, or vegetable fiber shall be considered to originate in, and be the growth, product, or manufacture of, the country, territory, or possession in which the fabric is both dyed and printed when accompanied by 2 or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing.

`(C) Notwithstanding paragraph (1)(D), goods classified under HTS heading 6117.10, 6213.00, 6214.00, 6302.22, 6302.29, 6302.52, 6302.53, 6302.59, 6302.92, 6302.93, 6302.99, 6303.92, 6303.99, 6304.19, 6304.93, 6304.99, 9404.90.85, or 9404.90.95, except for goods classified under such headings as of cotton or of wool or consisting of fiber blends containing 16 percent or more by weight of cotton, shall be considered to originate in, and be the growth, product, or manufacture of, the country, territory, or possession in which the fabric is both dyed and printed when accompanied by 2 or more of the following finishing operations: bleaching, shrinking, fulling, napping, decating, permanent stiffening, weighting, permanent embossing, or moireing.'.

(b) EFFECTIVE DATE- The amendments made by this section apply to goods entered, or withdrawn from warehouse for consumption, on or after the date of enactment of this Act.

SEC. 712. CHIEF AGRICULTURAL NEGOTIATOR.

(a) ESTABLISHMENT OF A POSITION- There is established the position of Chief Agricultural Negotiator in the Office of the United States Trade Representative. The Chief Agricultural Negotiator shall be appointed by the President, with the rank of Ambassador, by and with the advice and consent of the Senate.

(b) FUNCTIONS- The primary function of the Chief Agricultural Negotiator shall be to conduct trade negotiations and to enforce trade agreements relating to United States agricultural products and services. The Chief Agricultural Negotiator shall be a vigorous advocate on behalf of United States agricultural interests. The Chief Agricultural Negotiator shall perform such other functions as the United States Trade Representative may direct.

(c) COMPENSATION- The Chief Agricultural Negotiator shall be paid at the highest rate of basic pay payable to a member of the Senior Executive Service.

SEC. 713. REVISION OF RETALIATION LIST OR OTHER REMEDIAL ACTION.

Section 306(b)(2) of the Trade Act of 1974 (19 U.S.C. 2416(b)(2)) is amended--

(1) by striking `If the' and inserting the following:

`(A) FAILURE TO IMPLEMENT RECOMMENDATION- If the'; and

(2) by adding at the end the following:

`(B) REVISION OF RETALIATION LIST AND ACTION-

`(i) IN GENERAL- Except as provided in clause (ii), in the event that the United States initiates a retaliation list or takes any other action described in section 301(c)(1) (A) or (B) against the goods of a foreign country or countries because of the failure of such country or countries to implement the recommendation made pursuant to a dispute settlement proceeding under the World Trade Organization, the Trade Representative shall periodically revise the list or action to affect other goods of the country or countries that have failed to implement the recommendation.

`(ii) EXCEPTION- The Trade Representative is not required to revise the retaliation list or the action described in clause (i) with respect to a country, if--

`(I) the Trade Representative determines that implementation of a recommendation made pursuant to a dispute settlement proceeding described in clause (i) by the country is imminent; or

`(II) the Trade Representative together with the petitioner involved in the initial investigation under this chapter (or if no petition was filed, the affected United States industry) agree that it is unnecessary to revise the retaliation list.

`(C) SCHEDULE FOR REVISING LIST OR ACTION- The Trade Representative shall, 120 days after the date the retaliation list or other section 301(a) action is first taken, and every 180 days thereafter, review the list or action taken and revise, in whole or in part, the list or action to affect other goods of the subject country or countries.

`(D) STANDARDS FOR REVISING LIST OR ACTION- In revising any list or action against a country or countries under this subsection, the Trade Representative shall act in a manner that is most likely to result in the country or countries implementing the recommendations adopted in the dispute settlement proceeding or in achieving a mutually satisfactory solution to the issue that gave rise to the dispute settlement proceeding. The Trade Representative shall consult with the petitioner, if any, involved in the initial investigation under this chapter.

`(E) RETALIATION LIST- The term `retaliation list' means the list of products of a foreign country or countries that have failed to comply with the report of the panel or Appellate Body of the WTO and with respect to which the Trade Representative is imposing duties above the level that would otherwise be imposed under the Harmonized Tariff Schedule of the United States.'.

SEC. 714. SENSE OF CONGRESS REGARDING COMPREHENSIVE DEBT RELIEF FOR THE WORLD'S POOREST COUNTRIES.

(a) FINDINGS- Congress makes the following findings:

(1) The burden of external debt has become a major impediment to economic growth and poverty reduction in many of the world's poorest countries.

(2) Until recently, the United States Government and other official creditors sought to address this problem by rescheduling loans and in some cases providing limited debt reduction.

(3) Despite such efforts, the cumulative debt of many of the world's poorest countries continued to grow beyond their capacity to repay.

(4) In 1997, the Group of Seven, the World Bank, and the International Monetary Fund adopted the Heavily Indebted Poor Countries Initiative (HIPC), a commitment by the international community that all multilateral and bilateral creditors, acting in a coordinated and concerted fashion, would reduce poor country debt to a sustainable level.

(5) The HIPC Initiative is currently undergoing reforms to address concerns raised about country conditionality, the amount of debt forgiven, and the allocation of savings realized through the debt forgiveness program to ensure that the Initiative accomplishes the goals of economic growth and poverty alleviation in the world's poorest countries.

(6) Recently, the President requested Congress to provide additional resources for bilateral debt forgiveness and additional United States contributions to the HIPC Trust Fund.

(b) SENSE OF CONGRESS- It is the sense of Congress that--

(1) Congress and the President should work together, without undue delay and in concert with the international community, to make comprehensive debt relief available to the world's poorest countries in a manner that promotes economic growth and poverty alleviation;

(2) this program of bilateral and multilateral debt relief should be designed to strengthen and expand the private sector, encourage increased trade and investment, support the development of free markets, and promote broad-scale economic growth in beneficiary countries;

(3) this program of debt relief should also support the adoption of policies to alleviate poverty and to ensure that benefits are shared widely among the population, such as through initiatives to advance education, improve health, combat AIDS, and promote clean water and environmental protection;

(4) these debt relief agreements should be designed and implemented in a transparent manner and with the broad participation of the citizenry of the debtor country and should ensure that country circumstances are adequately taken into account;

(5) no country should receive the benefits of debt relief if that country does not cooperate with the United States on terrorism or narcotics enforcement, is a gross violator of the human rights of its citizens, or is engaged in conflict or spends excessively on its military; and

(6) in order to prevent adverse impact on a key industry in many developing countries, the International Monetary Fund must mobilize its own resources for providing debt relief to eligible countries without allowing gold to reach the open market, or otherwise adversely affecting the market price of gold.

SEC. 715. REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR AGRICULTURAL COMMODITY PRODUCERS.

(a) IN GENERAL- Not later than 4 months after the date of enactment of this Act, the Secretary of Labor, in consultation with the Secretary of Agriculture and the Secretary of Commerce, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate a report that--

(1) examines the applicability to agricultural commodity producers of trade adjustment assistance programs established under title II of the Trade Act of 1974; and

(2) sets forth recommendations to improve the operation of those programs as the programs apply to agricultural commodity producers or to establish a new trade adjustment assistance program for agricultural commodity producers.

(b) CONTENTS- In preparing the report required by subsection (a), the Secretary of Labor shall--

(1) assess the degree to which the existing trade adjustment assistance programs address the adverse effects on agricultural commodity producers due to price suppression caused by increased imports of like or directly competitive agricultural commodities; and

(2) examine the effectiveness of the program benefits authorized under subchapter B of chapter 2 and chapter 3 of title II of the Trade Act of 1974 in remedying the adverse effects, including price suppression, caused by increased imports of like or directly competitive agricultural commodities.

(c) DEFINITIONS- In this section:

(1) AGRICULTURAL COMMODITY- The term `agricultural commodity' means any agricultural commodity, including livestock, fish or harvested seafood in its raw or natural state.

(2) AGRICULTURAL COMMODITY PRODUCER- The term `agricultural commodity producer' means any person who is engaged in the production and sale of an agricultural commodity in the United States and who owns or shares the ownership and risk of loss of the agricultural commodity.

SEC. 716. STUDY ON IMPROVING AFRICAN AGRICULTURAL PRACTICES.

(a) IN GENERAL- The United States Department of Agriculture, in consultation with American Land Grant Colleges and Universities and not-for-profit international organizations, is authorized to conduct a two-year study on ways to improve the flow of American farming techniques and practices to African farmers. The study conducted by the Department of Agriculture shall include an examination of ways of improving or utilizing--

(1) knowledge of insect and sanitation procedures;

(2) modern farming and soil conservation techniques;

(3) modern farming equipment (including maintaining the equipment);

(4) marketing crop yields to prospective purchasers; and

(5) crop maximization practices.

The study shall be submitted to the Committee on Agriculture, Nutrition, and Forestry of the Senate and the Committee on Agriculture of the House of Representatives not later than September 30, 2001.

(b) LAND GRANT COLLEGES AND NOT-FOR-PROFIT INSTITUTIONS- The Department of Agriculture is encouraged to consult with American Land Grant Colleges and not-for-profit international organizations that have firsthand knowledge of current African farming practices.

(c) AUTHORIZATION OF FUNDING- There is authorized to be appropriated $2,000,000 to conduct the study described in subsection (a).

SEC. 717. ANTICORRUPTION EFFORTS.

(a) FINDINGS- Congress makes the following findings:

(1) Corruption and bribery of public officials is a major problem in many African countries and represents a serious threat to the development of a functioning domestic private sector, to United States business and trade interests, and to prospects for democracy and good governance in African countries.

(2) Of the 17 countries in sub-Saharan Africa rated by the international watchdog group, Transparency International, as part of the 1998 Corruption Perception Index, 13 ranked in the bottom half.

(3) The Organization for Economic Cooperation and Development (OECD) Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which has been signed by all 29 members of the OECD plus Argentina, Brazil, Bulgaria, Chile, and the Slovak Republic and which entered into force on February 15, 1999, represents a significant step in the elimination of bribery and corruption in international commerce.

(4) As a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the United States should encourage the highest standards possible with respect to bribery and corruption.

(b) SENSE OF CONGRESS- It is the sense of Congress that the United States should encourage at every opportunity the accession of sub-Saharan African countries, as defined in section 104, to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.

SEC. 718. SENSE OF THE SENATE REGARDING EFFORTS TO COMBAT DESERTIFICATION IN AFRICA AND OTHER NATIONS.

(a) FINDINGS- Congress finds that--

(1) desertification affects approximately one-sixth of the world's population and one-quarter of the total land area;

(2) over 1,000,000 hectares of Africa are affected by desertification;

(3) dryland degradation is an underlying cause of recurrent famine in Africa;

(4) the United Nations Environment Programme estimates that desertification costs the world $42,000,000,000 a year, not including incalculable costs in human suffering; and

(5) the United States can strengthen its partnerships throughout Africa and other nations affected by desertification, help alleviate social and economic crises caused by misuse of natural resources, and reduce dependence on foreign aid, by taking a leading role to combat desertification.

(b) SENSE OF THE SENATE- It is the sense of the Senate that the United States should expeditiously work with the international community, particularly Africa and other nations affected by desertification, to--

(1) strengthen international cooperation to combat desertification;

(2) promote the development of national and regional strategies to address desertification and increase public awareness of this serious problem and its effects;

(3) develop and implement national action programs that identify the causes of desertification and measures to address it; and

(4) recognize the essential role of local governments and nongovernmental organizations in developing and implementing measures to address desertification.

SEC. 719. REPORT ON WORLD TRADE ORGANIZATION MINISTERIAL.

(a) SENSE OF CONGRESS- Congress recognizes the importance of the new round of international trade negotiations that will be launched at the World Trade Organization (WTO) Ministerial Conference in Seattle, Washington, from November 30 to December 3, 1999.

(b) REPORT- Not later than February 3, 2000, the United States Trade Representative shall submit a report to Congress regarding discussions on the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the Antidumping Agreement) and the Agreement on Subsidies and Countervailing Measures during the Seattle Ministerial Conference. The report shall include a complete description of such discussions, including proposals made to renegotiate those agreements, the member government making the proposal, and the United States Trade Representative's response to the proposal, with a description as to how the response achieves United States trade goals.

SEC. 720. MARKING OF IMPORTED JEWELRY.

(a) MARKING REQUIREMENT- Not later than the date that is 1 year after the date of enactment of this Act, the Secretary of the Treasury shall prescribe and implement regulations that require that all jewelry described in subsection (b) that enters the customs territory of the United States have the English name of the country of origin indelibly marked in a conspicuous place on such jewelry by cutting, die-sinking, engraving, stamping, or some other permanent method to the same extent as such marking is required for Native American-style jewelry under section 134.43 of title 19, Code of Federal Regulations, as in effect on October 1, 1998.

(b) JEWELRY- The jewelry described in this subsection means any article described in heading 7117 of the Harmonized Tariff Schedule of the United States.

(c) DEFINITION- As used in this section, the term `enters the customs territory of the United States' means enters, or is withdrawn from warehouse for consumption, in the customs territory of the United States.

SEC. 721. SENSE OF THE SENATE REGARDING TARIFF INVERSIONS.

It is the sense of the Senate that United States trade policy should, while taking into account the conditions of United States producers, especially those currently facing tariff phase-outs negotiated under prior trade agreements, place a priority on the elimination or amelioration of tariff inversions that undermine the competitiveness of United States consuming industries.

SEC. 722. LIMITATIONS ON BENEFITS.

(a) IN GENERAL- Notwithstanding any other provision of law, no benefits under this Act shall be granted to any country (or to any designated zone in that country) that does not meet and effectively enforce the standards regarding child labor established by the ILO Convention (No. 182) for the Elimination of the Worst Forms of Child Labor.

(b) REPORT- Not later than 12 months after the date of enactment of this Act and annually thereafter, the President, after consultation with the Trade Policy Review Committee, shall submit a report to Congress on the enforcement of, and compliance with, the standards described in subsection (a).

SEC. 723. AGRICULTURE TRADE NEGOTIATING OBJECTIVES AND CONSULTATIONS WITH CONGRESS.

(a) FINDINGS- Congress finds that--

(1) United States agriculture contributes positively to the United States balance of trade and United States agricultural exports support in excess of 1,000,000 United States jobs;

(2) United States agriculture competes successfully worldwide despite the fact that United States producers are at a competitive disadvantage because of the trade distorting support and subsidy practices of other countries and despite the fact that significant tariff and nontariff barriers exist to United States exports; and

(3) a successful conclusion of the next round of World Trade Organization negotiations is critically important to the United States agricultural sector.

(b) OBJECTIVES- The agricultural trade negotiating objectives of the United States with respect to the World Trade Organization negotiations include--

(1) immediately eliminating all export subsidies worldwide while maintaining bona fide food aid and preserving United States market development and export credit programs that allow the United States to compete with other foreign export promotion efforts;

(2) leveling the playing field for United States producers of agricultural products by eliminating blue box subsidies and disciplining domestic supports in a way that forces producers to face world prices on all production in excess of domestic food security needs while allowing the preservation of non-trade distorting programs to support family farms and rural communities;

(3) disciplining state trading enterprises by insisting on transparency and banning discriminatory pricing practices that amount to de facto export subsidies so that the enterprises do not (except in cases of bona fide food aid) sell in foreign markets at prices below domestic market prices or prices below the full costs of acquiring and delivering agricultural products to the foreign markets;

(4) insisting that the Sanitary and Phytosanitary Accord agreed to in the Uruguay Round applies to new technologies, including biotechnology, and clarifying that labeling requirements to allow consumers to make choices regarding biotechnology products or other regulatory requirements cannot be used as disguised barriers to trade;

(5) increasing opportunities for United States exports of agricultural products by first reducing tariff and nontariff barriers to trade to the same or lower levels than exist in the United States and then eliminating barriers, such as--

(A) restrictive or trade distorting practices that adversely impact perishable or cyclical products;

(B) restrictive rules in the administration of tariff-rate quotas; and

(C) unjustified sanitary and phytosanitary restrictions or other unjustified technical barriers to agricultural trade;

(6) encouraging government policies that avoid price-depressing surpluses; and

(7) strengthening dispute settlement procedures so that countries cannot maintain unjustified restrictions on United States exports in contravention of their commitments.

(c) CONSULTATION WITH CONGRESSIONAL COMMITTEES-

(1) CONSULTATION BEFORE OFFER MADE- Before the United States Trade Representative negotiates a trade agreement that would reduce tariffs on agricultural products or require a change in United States agricultural law, the United States Trade Representative shall consult with the Committee on Agriculture, Nutrition, and Forestry and the Committee on Finance of the Senate and the Committee on Agriculture and the Committee on Ways and Means of the House of Representatives.

(2) CONSULTATION BEFORE AGREEMENT INITIALED- Not less than 48 hours before initialing an agreement relating to agricultural trade negotiated under the auspices of the World Trade Organization, the United States Trade Representative shall consult closely with the committees referred to in paragraph (1) regarding--

(A) the details of the agreement;

(B) the potential impact of the agreement on United States agricultural producers; and

(C) any changes in United States law necessary to implement the agreement.

(3) NO SECRET SIDE DEALS- Any agreement or other understanding (whether verbal or in writing) that relates to agricultural trade that is not disclosed to the Congress before legislation implementing a trade agreement is introduced in either house of Congress shall not be considered to be part of the agreement approved by Congress and shall have no force and effect under United States law or in any dispute settlement body.

(d) SENSE OF THE SENATE- It is the sense of the Senate that--

(1) reaching a successful agreement on agriculture should be the top priority of United States negotiators; and

(2) if the primary competitors of the United States do not reduce their trade distorting domestic supports and export subsidies in accordance with the negotiating objectives expressed in this section, the United States should take steps to increase the leverage of United States negotiators and level the playing field for United States producers in order to improve United States farm income and to encourage United States competitors to eliminate export subsidies and domestic supports that are harmful to United States farmers and ranchers.

SEC. 724. APPLICATION OF DENIAL OF FOREIGN TAX CREDIT REGARDING TRADE AND INVESTMENT WITH RESPECT TO CERTAIN FOREIGN COUNTRIES.

(a) IN GENERAL- Section 901(j) of the Internal Revenue Code of 1986 (relating to denial of foreign tax credit, etc., regarding trade and investment with respect to certain foreign countries) is amended by adding at the end the following new paragraph:

`(5) WAIVER OF DENIAL-

`(A) IN GENERAL- Paragraph (1) shall not apply with respect to taxes paid or accrued to a country if the President--

`(i) determines that a waiver of the application of such paragraph is in the national interest of the United States and will expand trade and investment opportunities for United States companies in such country, and

`(ii) reports such waiver under subparagraph (B).

`(B) REPORT- Not less than 30 days before the date on which a waiver is granted under this paragraph, the President shall report to Congress--

`(i) the intention to grant such waiver, and

`(ii) the reason for the determination under subparagraph (A)(i).'.

(b) EFFECTIVE DATE- The amendment made by this section shall apply on or after February 1, 2001.

SEC. 725. UNREASONABLE ACTS, POLICIES, AND PRACTICES.

Section 301(d)(3)(B)(i) of the Trade Act of 1974 (19 U.S.C. 2411(d)(3)(B)(i)) is amended by striking subclause (IV) and inserting the following:

`(IV) market opportunities, including the toleration by a foreign government of systematic anticompetitive activities, which include predatory pricing, discriminatory pricing, or pricing below cost of production by enterprises or among enterprises in the foreign country (including state trading enterprises and state corporations) if the acts, policies, or practices are inconsistent with commercial practices and have the effect of restricting access of United States goods or services to the foreign market or third country markets,'.

Amend the title so as to read: `An Act to authorize a new trade and investment policy for sub-Saharan Africa, expand trade benefits to the countries in the Caribbean Basin, renew the generalized system of preferences, and reauthorize the trade adjustment assistance programs.'.

Attest:

Secretary.

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