REPEAL OF RULES PERMITTING LOSS TRANSFERS BY ALASKA NATIVE CORPORATIONS.

SEC. 5021. REPEAL OF RULES PERMITTING LOSS TRANSFERS BY ALASKA NATIVE CORPORATIONS. (a) General Rule.— Nothing in section 60(b)(5) of the Tax Reform Act of 1984 (as amended by section 1804(e)(4) of the Tax Reform Act of 1986)— (1) shall allow any loss (or credit) of any corporation which arises after April 26, 1988, to be used to offset the income (or tax) of another corporation if such use would not be allowable without regard to such section 60(b)(5) as so amended, or (2) shall allow any loss (or credit) of any corporation which arises on or before such date to be used to offset disqualified income (or tax attributable to such income) of another corporation if such use would not be allowable without regard to such section 60(b)(5) as so amended. (b) Exception for Existing Contracts.— (1) In general.— Subsection (a) shall not apply to any loss (or credit) of any corporation if— (A) such corporation was in existence on April 26, 1988, and (B) such loss (or credit) is used to offset income assigned (or attributable to property contributed) pursuant to a binding contract entered into before July 26, 1988. 102 STAT. 3667 (2) $40,000,000 limitation.— The aggregate amount of losses (and the deduction equivalent of credits as determined in the same manner as under section 469(j)(5) of the 1986 Code) to which paragraph (1) applies with respect to any corporation shall not exceed $40,000,000. For purposes of this paragraph, a Native Corporation and all other corporations all of the stock of which is owned directly by such corporation shall be treated as 1 corporation. (3) Special rule for corporations under title ii.— In the case of a corporation which on April 26, 1988, was under the jurisdiction of a Federal district court under title 11 of the United States Code— (A) paragraph (1)(B) shall be applied by substituting the date 1 year after the date of the enactment of this Act for “July 26, 1988”, (B) paragraph (1) shall not apply to any loss or credit which arises on or after the date 1 year after the date of the enactment of this Act, and (C) paragraph (2) shall be applied by substituting “$99,000,000” for “$40,000,000”. (c) Special Administrative Rules.— (1) Notice to native corporations of proposed tax adjustments.— Notwithstanding section 6103 of the 1986 Code, the Secretary of the Treasury or his delegate shall notify a Native Corporation or its designated representative of any proposed adjustment— (A) of the tax liability of a taxpayer which has contracted with the Native Corporation (or other corporation all of the stock of which is owned directly by the Native Corporation) for the use of losses of such Native Corporation (or such other corporation), and (B) which is attributable to an asserted overstatement of losses by, or misassignment of income (or income attributable to property contributed) to, an affiliated group of which the Native Corporation (or such other corporation) is a member. Such notice shall only include information with respect to the transaction between the taxpayer and the Native Corporation. (2) Rights of native corporation.— (A) In general.— If a Native Corporation receives a notice under paragraph (1), the Native Corporation shall have the right to— (i) submit to the Secretary of the Treasury or his delegate a written statement regarding the proposed adjustment, and (ii) meet with the Secretary of the Treasury or his delegate with respect to such proposed adjustment. The Secretary of the Treasury or his delegate may discuss such proposed adjustment with the Native Corporation or its designated representative. (B) Extension of statute of limitations.— Subparagraph (A) shall not apply if the Secretary of the Treasury or his delegate determines that an extension of the statute of limitation is necessary to permit the participation described in subparagraph (A) and the taxpayer and the Secretary or his delegate have not agreed to such extension. 102 STAT. 3668 (3) Judicial, proceedings.— In the case of any proceeding in a Federal court or the United States Tax Court involving a proposed adjustment under paragraph (1), the Native Corporation, subject to the rules of such court, may file an amicus brief concerning such adjustment (4) Failures.— For purposes of the 1986 Code, any failure by the Secretary of the Treasury or his debate to comply with the provisions of this subsection shall not affect the validity of the determination of the Internal Revenue Service of any adjustment of tax liability of any taxpayer described in paragraph (1). (d) Disqualified Income Defined.— For purposes of subsection (a), the term “disqualified income” means any income assigned (or attributable to property contributed) after April 26, 1988, by a person who is not a Native Corporation or a corporation all the stock of which is owned directly by a Native Corporation. (e) Basis Determination.— For purposes of determining basis for Federal tax purposes, no provision in any law (whether enacted before, on, or after the date of the enactment of this Act) shall affect the date on which the transfer to the Native Corporation is made. The preceding sentence shall apply to all taxable years whether beginning before, on, or after such date of enactment.