AMENDMENTS RELATED TO SMALL BUSINESS JOB PROTECTION ACT OF 1996.

SEC. 1601. AMENDMENTS RELATED TO SMALL BUSINESS JOB PROTECTION ACT OF 1996. (a) Amendments Related to Subtitle A.— (1) Amendment related to section me.—Paragraph (1) of section 6050R(c) is amended by striking “name and address” and inserting “name, address, and phone number of the information contact”. (2) Amendment to section 1116.—Paragraphs (1) and (2)(C) of section 1116(b) of the Small Business Job Protection Act of 1996 shall each be applied as if the reference to chapter 68 were a reference to chapter 61.111 STAT. 1087 (b) Amendment Related to Subtitle B.—Subsection (c) of section 52 is amended by striking “targeted jobs credit” and inserting “work opportunity credit”. (c) Amendments Related to Subtitle C.— (1) Amendment related to section 1302.—Subparagraph (B) of section 1361(e)(1) is amended by striking “and” at the end of clause (i), striking the period at the end of clause (ii) and inserting and”, and adding at the end the following new clause: “(iii) any charitable remainder annuity trust or charitable remainder unitrust (as defined in section 664(d)).”. (2) Effective date for section 1307.— (A) Notwithstanding section 1317 of the Small Business Job Protection Act of 1996, the amendments made by subsections (a) and (b) of section 1307 of such Act shall apply to determinations made after December 31, 1996. (B) In no event shall the 120-day period referred to in section 1377(b)(1)(B) of the Internal Revenue Code of 1986 (as added by such section 1307) expire before the end of the 120-day period beginning on the date of the enactment of this Act. (3) Amendment related to section 1308.—Subparagraph (A) of section 1361(b)(3) is amended by striking “For purposes of this title” and inserting “Except as provided in regulations prescribed by the Secretary, for purposes of this title”. (4) Amendments related to section 1316.— (A) Paragraph (2) of section 512(e) is amended by striking “within the meaning of section 1012” and inserting “as defined in section 1361(e)(1)(C)”. (B) Paragraph (7) of section 1361(c) is redesignated as paragraph (6). (C) Subparagraph (B) of section 1361(b)(1) is amended by striking “subsection (c)(7)” and inserting “subsection (c)(6)”. (D) Paragraph (1) of section 512(e) is amended by striking “section 1361(c)(7)” and inserting “section 1361(c)(6)”. (d) Amendments Related to Subtitle D.— (1) Amendments related to section 1421.— (A) Subsection (i) of section 408 is amended in the last sentence by striking “30 days” and inserting “31 days”. (B) Subparagraph (H) of section 408(k)(6) is amended by striking “if the terms of such pension” and inserting “of an employer if the terms of simplified employee pensions of such employer”. (C)(i) Subparagraph (B) of section 408(1)(2) is amended— (I) by inserting “and the issuer of an annuity established under such an arrangement” after “under subsection (p)”, and (II) in clause (i), by inserting “or issuer” after “trustee”. (ii) Paragraph (2) of section 6693(c) is amended— (I) by inserting “or issuer” after “trustee”, and (II) in the heading, by inserting “and issuer” after “trustee”.111 STAT. 1088 (D) Subsection (p) of section 408 is amended by adding at the end the following new paragraph: “(8) Coordination with maximum limitation under subsection (a).—In the case of any simple retirement account, subsections (a)(1) and (b)(2) shall be applied by substituting ‘the sum of the dollar amount in effect under paragraph (2)(A)(ii) of this subsection and the employer contribution required under subparagraph (A)(iii) or (B)(i) of paragraph (2) of this subsection, whichever is applicable’ for ‘$2,000’.”. (E) Clause (i) of section 408(p)(2)(D) is amended by adding at the end the following new sentence: “If only individuals other than employees described in subparagraph (A) or (B) of section 410(b)(3) are eligible to participate in such arrangement, then the preceding sentence shall be applied without regard to any qualified plan in which only employees so described are eligible to participate.”. (F) Subparagraph (D) of section 408(p)(2) is amended by adding at the end the following new clause: “(iii) Grace period.—In the case of an employer who establishes and maintains a plan under this subsection for 1 or more years and who fails to meet any requirement of this subsection for any subsequent year due to any acquisition, disposition, or similar transaction involving another such employer, rules similar to the rules of section 410(b)(6)(C) shall apply for purposes of this subsection.”. (G) Paragraph (5) of section 408(p) is amended in the text preceding subparagraph (A) by striking “simplified” and inserting “simple”. (2) Amendments related to section 1422.— (A) Clause (ii) of section 401(k)(11)(D) is amended by striking the period and inserting “if such plan allows only contributions required under this paragraph.”. (B) Paragraph (11) of section 401(k) is amended by adding at the end the following new subparagraph: “(E) Cost-of-living adjustment.—The Secretary shall adjust the $6,000 amount under subparagraph (B)(i)(I) at the same time and in the same manner as under section 408(p)(2)(E).”. (C) Subparagraph (A) of section 404(a)(3) is amended— (i) in clause (i), by striking “not in excess of” and all that follows and inserting the following: “not in excess of the greater of— “(I) 15 percent of the compensation otherwise paid or accrued during the taxable year to the beneficiaries under the stock bonus or profit-sharing plan, or “(II) the amount such employer is required to contribute to such trust under section 401(k)(11) for such year.”, and (ii) in clause (ii), by striking “15 percent” and all that follows and inserting the following “the amount described in subclause (I) or (II) of clause (i), whichever is greater, with respect to such taxable year.”. (D) Subparagraph (B) of section 401(k)(11) is amended by adding at the end the following new clause:111 STAT. 1089 “(iii) Administrative requirements.— “(I) In general.—Rules similar to the rules of subparagraphs (B) and (C) of section 408(p)(5) shall apply for purposes of this subparagraph. “(II) Notice of election period.—The requirements of this subparagraph shall not be treated as met with respect to any year unless the employer notifies each employee eligible to participate, within a reasonable period of time before the 60th day before the beginning of such year (and, for the first year the employee is so eligible, the 60th day before the first day such employee is so eligible), of the rules similar to the rules of section 408(p)(5)(C) which apply by reason of subclause (I).”. (3) Amendment related to section 1433.—The heading of paragraph (11) of section 401(m) is amended by striking “Alternative” and inserting “Additional alternative”. (4) Clarification of section 1450.— (A) Section 403(b)(11) of the Internal Revenue Code of 1986 shall not apply with respect to a distribution from a contract described in section 1450(b)(1) of such Act to the extent that such distribution is not includible in income by reason of— (i) in the case of distributions before January 1, 1998, section 403 (b)(8) or (b)(10) of such Code (determined after the application of section 1450(b)(2) of such Act), and (ii) in the case of distributions on and after such date, such section 403(b)(1). (B) This paragraph shall apply as if included in section 1450 of the Small Business Job Protection Act of 1996. (5) Amendment related to section 1451.—Clause (ii) of section 205(c)(8)(A) of the Employee Retirement Income Security Act of 1974 is amended by striking “Secretary” and inserting “Secretary of the Treasury”. (6) Amendments related to section 1461.— (A) Section 414(e)(5)(A) is amended to read as follows: “(A) Certain ministers may participate.—For purposes of this part— “(i) In general.—A duly ordained, commissioned, or licensed minister of a church is described in paragraph (3)(B) if, in connection with the exercise of their ministry, the minister— “(I) is a self-employed individual (within the meaning of section 401(c)(1)(B), or “(II) is employed by an organization other than an organization which is described in section 501(c)(3) and with respect to which the minister shares common religious bonds. “(ii) Treatment as employer and employee.—For purposes of sections 403(b)(1)(A) and 404(a)(10), a minister described in clause (i)(I) shall be treated as employed by the minister’s own employer which is an organization described in section 501(c)(3) and exempt from tax under section 501(a).”.111 STAT. 1090 (B) Section 403(b)(1)(A) is amended by striking “or” at the end of clause (i), by inserting “or” at the end of clause (ii), and by adding at the end the following new clause: “(iii) for the minister described in section 414(e)(5)(A) by the minister or by an employer,”. (7) Amendment related to section 1462.—The paragraph (7) of section 414(q) added by section 1462 of the Small Business Job Protection Act of 1996 is redesignated as paragraph (9). (e) Amendment Related to Subtitle E.—Subparagraph (A) of section 956(b)(1) is amended by inserting “to the extent such amount was accumulated in prior taxable years” after “section 316(a)(1)”. (f) Amendments Related to Subtitle F.— (1) Amendments related to section 1601.— (A) The heading of section 30A is amended to read as follows: “SEC. 30A. PUERTO RICO ECONOMIC ACTIVITY CREDIT”. (B) The table of sections for subpart B of part IV of subchapter A of chapter 1 is amended in the item relating to section 30A by striking “Puerto Rican” and inserting “Puerto Rico”. (C) Paragraph (1) of section 55(c) is amended by striking “Puerto Rican” and inserting “Puerto Rico”. (2) Amendments related to section 1606.— (A) Clause (ii) of section 9503(c)(2)(A) is amended by striking “(or with respect to qualified diesel-powered highway vehicles purchased before January 1, 1999)”. (B) Subparagraph (A) of section 9503(e)(5) is amended by striking except that” and all that follows and inserting a period. (3) Amendments related to section 1607.— (A) Subsection (f) of section 4001 (relating to phasedown of tax on luxury passenger automobiles) is amended— (i) by inserting “and section 4003(a)” after “subsection (a)”, and (ii) by inserting “, each place it appears,” before “the percentage”. (B) Subsection (g) of section 4001 (relating to termination) is amended by striking “tax imposed by this section” and inserting “taxes imposed by this section and section 4003” and by striking “or use” and inserting “, use, or installation”. (C) The amendments made by this paragraph shall apply to sales after the date of the enactment of this Act. (4) Amendments related to section 1609.— (A) Subsection (1) of section 4041 is amended— (i) by inserting “or a fixed-wing aircraft” after “helicopter”, and (ii) in the heading, by striking “Helicopter”. (B) The last sentence of section 4041(a)(2) is amended by striking “section 4081(a)(2)(A)” and inserting “section 4081(a)(2)(A)(i)”.111 STAT. 1091 (C) Subsection (b) of section 4092 is amended by striking “section 4041(c)(4)” and inserting “section 4041(c)(2)”. (D) Subsection (g) of section 4261 (as redesignated by title X) is amended by inserting “on that flight” after “dedicated”. (E) Paragraph (1) of section 1609(h) of such Act is amended by striking “paragraph (3)(A)(i)” and inserting “paragraph (3)(A)”. (F) Paragraph (4) of section 1609(h) of such Act is amended by inserting before the period “or exclusively for the use described in section 4092(b) of such Code”. (5) Amendments related to section 1616.— (A) Subparagraph (A) of section 593(e)(1) is amended by inserting “(and, in the case of an S corporation, the accumulated adjustments account, as defined in section 1368(e)(D)” after “1951,”. (B) Paragraph (7) of section 1374(d) is amended by adding at the end the following new sentence: “For purposes of applying this section to any amount includible in income by reason of section 593(e), the preceding sentence shall be applied without regard to the phrase ‘10-year’.”. (6) Amendments related to section 1621.— (A) Subparagraph (A) of section 860L(b)(1) is amended in the text preceding clause (i) by striking “after the startup date” and inserting “on or after the startup date”. (B) Paragraph (2) of section 860L(a) is amended by striking “section 8601(c)(2)” and inserting “section 8601(b)(2)”. (C) Subparagraph (B) of section 860L(e)(2) is amended by inserting “other than foreclosure property” after “any permitted asset”. (D) Subparagraph (A) of section 860L(e)(3) is amended by striking “if the FASIT” and all that follows and inserting the following new flush text after clause (ii): “if the FASIT were treated as a REMIC and permitted assets (other than cash or cash equivalents) were treated as qualified mortgages.”. (E)(i) Paragraph (3) of section 860L(e) is amended by adding at the end the following new subparagraph: “(D) Income from dispositions of former hedge assets.—Paragraph (2)(A) shall not apply to income derived from the disposition of— “(i) an asset which was described in subsection (c)(1)(D) when first acquired by the FASIT but on the date of such disposition was no longer described in subsection (c)(1)(D)(ii), or “(ii) a contract right to acquire an asset described in clause (i).”. (ii) Subparagraph (A) of section 860L(e)(2) is amended by inserting “except as provided in paragraph (3),” before “the receipt”. (g) Amendments Related to Subtitle G.— (1) Extension of period for claiming refunds for alcohol fuels.—Notwithstanding section 6427(i)(3)(C) of the Internal Revenue Code of 1986, a claim filed under section 6427(f) of such Code for any period after September 30, 1995, and before October 1, 1996, shall be treated as timely filed 111 STAT. 1092if filed before the 60th day after the date of the enactment of this Act. (2) Amendments to Sections 1703 and 1704.—Sections 1703(n)(8) and 1704(j)(4)(B) of the Small Business Job Protection Act of 1996 shall each be applied as if such sections referred to section 1702 instead of section 1602. (h) Amendments Related to Subtitle H.— (1) Amendments related to section 1806.— (A) Subparagraph (B) of section 529(e)(1) is amended by striking “subsection (c)(2)(C)” and inserting “subsection (c)(3)(C)”. (B) Subparagraph (C) of section 529(e)(1) is amended by inserting “(or agency or instrumentality thereof)” after “local government”. (C) Paragraph (2) of section 1806(c) of the Small Business Job Protection Act of 1996 is amended by striking so much of the first sentence as follows subparagraph (B)(ii) and inserting the following: “then such program (as in effect on August 20, 1996) shall be treated as a qualified State tuition program with respect to contributions (and earnings allocable thereto) pursuant to contracts entered into under such program before the first date on which such program meets such requirements (determined without regard to this paragraph) and the provisions of such program (as so in effect) shall apply in lieu of section 529(b) of the Internal Revenue Code of 1986 with respect to such contributions and earnings.” (2) Amendments related to section 1807.— (A) Paragraph (2) of section 23(a) is amended to read as follows: “(2) Year credit allowed.—The credit under paragraph (1) with respect to any expense shall be allowed— “(A) in the case of any expense paid or incurred before the taxable year in which such adoption becomes final, for the taxable year following the taxable year during which such expense is paid or incurred, and “(B) in the case of an expense paid or incurred during or after the taxable year in which such adoption becomes final, for the taxable year in which such expense is paid or incurred.”. (B) Subparagraph (B) of section 23(b)(2) is amended by striking “determined—” and all that follows and inserting the following: “determined without regard to sections 911, 931, and 933.”. (C) Paragraph (1) of section 137(b) (relating to adoption assistance programs) is amended by striking “amount excludable from gross income” and inserting “of the amounts paid or expenses incurred which may be taken into account”. (D)(i) Subparagraph (C) of section 414(n)(3) is amended by inserting “137,” after “132,”. (ii) Paragraph (2) of section 414(t) is amended by inserting “137,” after “132”. (iii) Paragraph (1) of section 6039GD(d) is amended by striking “or 129” and inserting “129, or 137”. (i) Amendments Related to Subtitle I.—111 STAT. 1093 (1) Amendment related to section 1901.—Subsection (b) of section 6048 is amended in the heading by striking “Grantor” and inserting “Owner”. (2) Amendments related to section 1903.— Clauses (ii) and (iii) of section 679(a)(3)(C) are each amended by inserting “, owner,” after “grantor”. (3) Amendments related to section 1907.— (A) Clause (ii) of section 7701(a)(30)(E) is amended by striking “fiduciaries” and inserting “persons”. (B) Subsection (b) of section 641 is amended by adding at the end the following new sentence: “For purposes of this subsection, a foreign trust or foreign estate shall be treated as a nonresident alien individual who is not present in the United States at any time.”. (4) Effective date related to subtitle i.—The Secretary of the Treasury may by regulations or other administrative guidance provide that the amendments made by section 1907(a) of the Small Business Job Protection Act of 1996 shall not apply to a trust with respect to a reasonable period beginning on the date of the enactment of such Act, if— (A) such trust is in existence on August 20, 1996, and is a United States person for purposes of the Internal Revenue Code of 1986 on such date (determined without regard to such amendments), (B) no election is in effect under section 1907(a)(3)(B) of such Act with respect to such trust, (C) before the expiration of such reasonable period, such trust makes the modifications necessary to be treated as a United States person for purposes of such Code (determined with regard to such amendments), and (D) such trust meets such other conditions as the Secretary may require. (j) Effective Date.— (1) In general.—Except as provided in paragraph (2), the amendments made by this section shall take effect as if included in the provisions of the Small Business Job Protection Act of 1996 to which they relate. (2) Certain administrative requirements with respect to certain pension plans.—The amendment made by subsection (d)(2)(D) shall apply to calendar years beginning after the date of the enactment of this Act.