To provide an amendment.

On page 8, beginning with line 13, strike all through the matter following line 2 on page 9, and insert: “(A) Joint return and surviving spouse.--In the case of a joint return or a surviving spouse, the amount under the following table:

“In the case of taxable years beginning: The exemption amount is:

Before 2001..................................................$45,000

In 2001 and 2002.............................................$49,000

In 2003.....................................................$ 60,500

In 2004......................................................$60,500

In 2005......................................................$60,500

After 2005...................................................$45,000.

“(B) Individual not married and not a surviving spouse.--In the case of an individual who is not a married individual and is not a surviving spouse, the amount under the following table:

“In the case of taxable years beginning: The exemption amount is:

Before 2001..................................................$33,750

In 2001 and 2002.............................................$35,750

In 2003......................................................$41,500

In 2004......................................................$41,500

In 2005......................................................$41,500

After 2005................................................$33,750.”.

Beginning on page 82, line 25, strike all through page 83, line 13, and insert: (2) Exception for existing fasits.--The amendments made by this section shall not apply to any FASIT in existence on the date of the enactment of this Act to the extent that regular interests issued by the FASIT before such date continue to remain outstanding in accordance with the original terms of issuance of such interests. On page 165, beginning with line 21, strike all through page 166, line 8, and insert: (a) General Rule.--If--(1) a taxpayer eligible to participate in--(A) the Department of the Treasury's Offshore Voluntary Compliance Initiative, or (B) the Department of the Treasury's voluntary disclosure initiative which applies to the taxpayer by reason of the taxpayer's underreporting of United States income tax liability through financial arrangements which rely on the use of offshore arrangements which were the subject of the initiative described in subparagraph (A), and (2) any interest or applicable penalty is imposed with respect to any arrangement to which any initiative described in paragraph (1) applied or to any underpayment of Federal income tax attributable to items arising in connection with any arrangement described in paragraph (1), then, notwithstanding any other provision of law, the amount of such interest or penalty shall be equal to twice that determined without regard to this section. On page 206, between lines 19 and 20, insert:

SEC. __. INCREASE IN AGE OF MINOR CHILDREN WHOSE UNEARNED INCOME IS TAXED AS IF PARENT'S INCOME.

(a) In General.--Section 1(g)(2)(A) (relating to child to whom subsection applies) is amended by striking “age 14” and inserting “age 18”. (b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2003.

SEC. __. CONSISTENT AMORTIZATION OF PERIODS FOR INTANGIBLES.

(a) Start-Up Expenditures.--(1) Allowance of deduction.--Paragraph (1) of section 195(b) (relating to start-up expenditures) is amended to read as follows: “(1) Allowance of deduction.--If a taxpayer elects the application of this subsection with respect to any start-up expenditures--“(A) the taxpayer shall be allowed a deduction for the taxable year in which the active trade or business begins in an amount equal to the lesser of--“(i) the amount of start-up expenditures with respect to the active trade or business, or “(ii) $5,000, reduced (but not below zero) by the amount by which such start-up expenditures exceed $50,000, and “(B) the remainder of such start-up expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the active trade or business begins.”. (2) Conforming amendment.--Subsection (b) of section 195 is amended by striking “Amortize” and inserting “Deduct” in the heading. (b) Organizational Expenditures.--Subsection (a) of section 248 (relating to organizational expenditures) is amended to read as follows: “(a) Election to Deduct.--If a corporation elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenditures--“(1) the corporation shall be allowed a deduction for the taxable year in which the corporation begins business in an amount equal to the lesser of--“(A) the amount of organizational expenditures with respect to the taxpayer, or “(B) $5,000, reduced (but not below zero) by the amount by which such organizational expenditures exceed $50,000, and “(2) the remainder of such organizational expenditures shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the corporation begins business.”. (c) Treatment of Organizational and Syndication Fees or Partnerships.--(1) In general.--Section 709(b) (relating to amortization of organization fees) is amended by redesignating paragraph (2) as paragraph (3) and by amending paragraph (1) to read as follows: “(1) Allowance of deduction.--If a taxpayer elects the application of this subsection (in accordance with regulations prescribed by the Secretary) with respect to any organizational expenses--“(A) the taxpayer shall be allowed a deduction for the taxable year in which the partnership begins business in an amount equal to the lesser of--“(i) the amount of organizational expenses with respect to the partnership, or “(ii) $5,000, reduced (but not below zero) by the amount by which such organizational expenses exceed $50,000, and “(B) the remainder of such organizational expenses shall be allowed as a deduction ratably over the 180-month period beginning with the month in which the partnership begins business. “(2) Dispositions before close of amortization period.--In any case in which a partnership is liquidated before the end of the period to which paragraph (1)(B) applies, any deferred expenses attributable to the partnership which were not allowed as a deduction by reason of this section may be deducted to the extent allowable under section 165.”. (2) Conforming amendment.--Subsection (b) of section 709 is amended by striking “Amortization” and inserting “Deduction” in the heading. (d) Effective Date.--The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act.

SEC. __. CLARIFICATION OF DEFINITION OF NONQUALIFIED PREFERRED STOCK.

(a) In General.--Section 351(g)(3)(A) is amended by adding at the end the following: “Stock shall not be treated as participating in corporate growth to any significant extent unless there is a real and meaningful likelihood of the shareholder actually participating in the earnings and growth of the corporation.” (b) Effective Date.--The amendment made by this section shall apply to transactions after May 14, 2003.

SEC. __. CLASS LIVES FOR UTILITY GRADING COSTS.

(a) Gas Utility Property.--Section 168(e)(3)(E) (defining 15-year property) is amended by striking “and” at the end of clause (ii), by striking the period at the end of clause (iii) and inserting “, and”, and by adding at the end the following new clause: “(iv) initial clearing and grading land improvements with respect to gas utility property.” (b) Electric Utility Property.--Section 168(e)(3) is amended by adding at the end the following new subparagraph: “(F) 20-year property.--The term ‘20-year property' means initial clearing and grading land improvements with respect to any electric utility transmission and distribution plant.” (c) Conforming Amendments.--The table contained in section 168(g)(3)(B) is amended--(1) by inserting “or (E)(iv)” after “(E)(iii)”, and

(2) by adding at the end the following new item:

“(F) 225”............................................................

(d) Effective Date.--The amendments made by this section shall apply to property placed in service after the date of the enactment of this Act.

SEC. __. PROHIBITION ON NONRECOGNITION OF GAIN THROUGH COMPLETE LIQUIDATION OF HOLDING COMPANY.

(a) In General.--Section 332 is amended by adding at the end the following new subsection: “(d) Recognition of Gain on Liquidation of Certain Holding Companies.--“(1) In general.--Subsection (a) and section 331 shall not apply to any distribution in complete liquidation of an applicable holding company to the extent of the earnings and profits of such company. “(2) Applicable holding company.--For purposes of this subsection--“(A) In general.--The term ‘applicable holding company' means any corporation--“(i) which is a member of a chain of includible corporations with a common parent which is a foreign corporation, “(ii) the stock of which is directly owned by such common parent or another foreign corporation, “(iii) substantially all of the assets of which consist of stock in other members of such chain of corporations, and “(iv) which has not been in existence at least 5 years as of the date of the liquidation. “(B) Includible corporation.--The term ‘includible corporation' has the meaning given such term under section 1504(b) (without regard to paragraph (3) thereof).” (b) Effective Date.--The amendment made by this section shall apply to distributions in complete liquidation occurring after the date of the enactment of this Act.

SEC. __. LEASE TERM TO INCLUDE CERTAIN SERVICE CONTRACTS.

(a) In General.--Section 168(i)(3) (relating to lease term) is amended by adding at the end the following new subparagraph: “(C) Special rule for service contracts.--In determining a lease term, there shall be taken into account any optional service contract or other similar arrangement.” (b) Effective Date.--The amendment made by this section shall apply to leases entered into after the date of the enactment of this Act.

SEC. __. RECOGNITION OF GAIN FROM THE SALE OF A PRINCIPAL RESIDENCE ACQUIRED IN A LIKE-KIND EXCHANGE WITHIN 5 YEARS OF SALE.

(a) In General.--Section 121(d) (relating to special rules for exclusion of gain from sale of principal residence) is amended by adding at the end the following new paragraph: “(10) Property acquired in like-kind exchange.--If a taxpayer acquired property in an exchange to which section 1031 applied, subsection (a) shall not apply to the sale or exchange of such property if it occurs during the 5-year period beginning with the exchange to which section 1031 applied.” (b) Effective Date.--The amendment made by this section shall apply to sales or exchanges after the date of the enactment of this Act. Beginning on page 260, line 7, strike all through page 264, line 6, and insert:

SEC. 521. CIVIL RIGHTS TAX RELIEF.

(a) Deduction Allowed Whether or Not Taxpayer Itemizes Other Deductions.--Subsection (a) of section 62 (defining adjusted gross income) is amended by inserting after paragraph (18) the following new item: “(19) Costs involving discrimination suits, etc.--Any deduction allowable under this chapter for attorney fees and court costs paid by, or on behalf of, the taxpayer in connection with any action involving a claim of unlawful discrimination (as defined in subsection (e)) or a claim of a violation of subchapter III of chapter 37 of title 31, United States Code. The preceding sentence shall not apply to any deduction in excess of the amount includible in the taxpayer's gross income for the taxable year on account of a judgment or settlement (whether by suit or agreement and whether as lump sum or periodic payments) resulting from such claim.”. (b) Unlawful Discrimination Defined.--Section 62 is amended by adding at the end the following new subsection: “(e) Unlawful discrimination defined.--For purposes of subsection (a)(19), the term ‘unlawful discrimination' means an act that is unlawful under any of the following: “(1) Section 302 of the Civil Rights Act of 1991 (2 U.S.C. 1202). “(2) Section 201, 202, 203, 204, 205, 206, or 207 of the Congressional Accountability Act of 1995 (2 U.S.C. 1311, 1312, 1313, 1314, 1315, 1316, or 1317). “(3) The National Labor Relations Act (29 U.S.C. 151 et seq.). “(4) The Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.). “(5) Section 4 or 15 of the Age Discrimination in Employment Act of 1967 (29 U.S.C. 623 or 633a). “(6) Section 501 or 504 of the Rehabilitation Act of 1973 (29 U.S.C. 791 or 794). “(7) Section 510 of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1140). “(8) Title IX of the Education Amendments of 1972 (29 U.S.C. 1681 et seq.). “(9) The Employee Polygraph Protection Act of 1988 (29 U.S.C. 201 et seq.). “(10) The Worker Adjustment and Retraining Notification Act (29 U.S.C. 2102 et seq.). “(11) Section 105 of the Family and Medical Leave Act of 1993 (29 U.S.C. 2615). “(12) Chapter 43 of title 38, United States Code (relating to employment and reemployment rights of members of the uniformed services). “(13) Section 1977, 1979, or 1980 of the Revised Statutes (42 U.S.C. 1981, 1983, or 1985). “(14) Section 703, 704, or 717 of the Civil Rights Act of 1964 (42 U.S.C. 2000e-2, 2000e-3, or 2000e-16). “(15) Section 804, 805, 806, 808, or 818 of the Fair Housing Act (42 U.S.C. 3604, 3605, 3606, 3608, or 3617). “(16) Section 102, 202, 302, or 503 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12112, 12132, 12182, or 12203). “(17) Any provision of Federal law (popularly known as whistleblower protection provisions) prohibiting the discharge of an employee, the discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted under Federal law. “(18) Any provision of State or local law, or common law claims permitted under Federal, State, or local law--“(i) providing for the enforcement of civil rights, or “(ii) regulating any aspect of the employment relationship, including prohibiting the discharge of an employee, the discrimination against an employee, or any other form of retaliation or reprisal against an employee for asserting rights or taking other actions permitted by law.”. (c) Effective Date.--The amendments made by this section shall apply to fees and costs paid after the date of the enactment of this Act with respect to any judgment or settlement occurring after such date. At the end, insert the following: TITLE VII--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS Subtitle A--Extensions of Expiring Provisions SEC. 701. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO MENTAL HEALTH BENEFITS.

(a) In General.--Subsection (f) of section 9812 is amended by striking “2003” and inserting “2004”. (b) Effective Date.--The amendment made by subsection (a) shall apply to plan years beginning after December 31, 2002.

SEC. 702. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS AGAINST REGULAR AND MINIMUM TAX LIABILITY.

(a) In General.--Paragraph (2) of section 26(a) is amended--(1) by striking “rule for 2000, 2001, 2002, and 2003.--” and inserting “rule for 2000, 2001, 2002, 2003, and 2004.--”, and (2) by striking “during 2000, 2001, 2002, or 2003,” and inserting “during 2000, 2001, 2002, 2003, or 2004”. (b) Conforming Amendments.--(1) Section 904(h) is amended by striking “during 2000, 2001, 2002, or 2003” and inserting “during 2000, 2001, 2002, 2003, or 2004”. (2) The amendments made by sections 201(b), 202(f), and 618(b) of the Economic Growth and Tax Relief Reconciliation Act of 2001 shall not apply to taxable years beginning during 2004. (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2002.

SEC. 703. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES.

(a) In General.--Subparagraphs (A), (B), and (C) of section 45(c)(3) are each amended by striking “2004” and inserting “2005”. (b) Effective Date.--The amendments made by subsection (a) shall apply to facilities placed in service after December 31, 2002.

SEC. 704. WORK OPPORTUNITY CREDIT.

(a) In General.--Subparagraph (B) of section 51(c)(4) is amended by striking “2003” and inserting “2004”. (b) Effective Date.--The amendment made by subsection (a) shall apply to individuals who begin work for the employer after December 31, 2002.

SEC. 705. WELFARE-TO-WORK CREDIT.

(a) In General.--Subsection (f) of section 51A is amended by striking “2003” and inserting “2004”. (b) Effective Date.--The amendment made by subsection (a) shall apply to individuals who begin work for the employer after December 31, 2002.

SEC. 706. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS PRODUCED FROM MARGINAL PROPERTIES.

(a) In General.--Subparagraph (H) of section 613A(c)(6) is amended by striking “2004” and inserting “2005”. (b) Effective Date.--The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2002.

SEC. 707. QUALIFIED ZONE ACADEMY BONDS.

(a) In General.--Paragraph (1) of section 1397E(e) is amended by striking “2000, 2001, 2002, and 2003” and inserting “2000, 2001, 2002, 2003, and 2004”. (b) Effective Date.--The amendment made by subsection (a) shall apply to obligations issued after the date of the enactment of this Act.

SEC. 708. COVER OVER OF TAX ON DISTILLED SPIRITS.

(a) In General.--Paragraph (1) of section 7652(f) is amended by striking “January 1, 2004” and inserting “January 1, 2005”.

(b) Effective Date.--The amendment made by subsection (a) shall apply to articles brought into the United States after December 31, 2002.

SEC. 709. DEDUCTION FOR CORPORATE DONATIONS OF COMPUTER TECHNOLOGY.

(a) Extension of Deduction.--Section 170(e)(6)(G) (relating to termination) is amended by striking “December 31, 2003” and inserting “December 31, 2004”. (b) Effective Date.--The amendments made by this section shall apply to contributions made after December 31, 2002.

SEC. 710. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.

(a) In General.--Section 30 is amended--(1) in subsection (b)(2)--(A) by striking “December 31, 2003,” and inserting “December 31, 2004,”, and (B) in subparagraphs (A), (B), and (C), by striking “2004”, “2005”, and “2006”, respectively, and inserting “2005”, “2006”, and “2007”, respectively. (2) in subsection (e), by striking “December 31, 2006” and inserting “December 31, 2007”. (b) Conforming Amendments.--Clause (iii) of section 280F(a)(1)(C) is amended by striking “2007” and inserting “2008”. (c) Effective Date.--The amendments made by this section shall apply to property placed in service after December 31, 2002.

SEC. 711. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN REFUELING PROPERTY.

(a) In General.--Section 179A is amended--(1) in subsection (b)(1)(B)--(A) by striking “December 31, 2003,” and inserting “December 31, 2004,”, and (B) in clauses (i), (ii), and (iii), by striking “2004”, “2005”, and “2006”, respectively, and inserting “2005”, “2006”, and “2007”, respectively, and (2) in subsection (f), by striking “December 31, 2006” and inserting “December 31, 2007”. (b) Effective Date.--The amendments made by subsection (a) shall apply to property placed in service after December 31, 2002.

SEC. 712. DEDUCTION FOR CERTAIN EXPENSES OF SCHOOL TEACHERS.

(a) In General.--Subparagraph (D) of section 62(a)(2) is amended by striking “during 2002 or 2003” and inserting “during 2002, 2003, or 2004”. (b) Effective Date.--The amendment made by subsection (a) shall apply to taxable years beginning after December 31, 2002.

SEC. 713. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.

(a) In General.--Paragraphs (2) and (3)(B) of section 220(i) (defining cut-off year) are each amended by striking “2003” each place it appears and inserting “2004”. (b) Conforming Amendments.--(1) Paragraph (2) of section 220(j) is amended by striking “1998, 1999, 2001, or 2002” each place it appears and inserting “1998, 1999, 2001, 2002, or 2003”. (2) Subparagraph (A) of section 220(j)(4) is amended by striking “and 2002” and inserting “2002, and 2003”. (c) Effective Date.--The amendments made by this section shall take effect on January 1, 2003.

SEC. 714. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

(a) Extension of Termination Date.--Subsection (h) of section 198 is amended by striking “2003” and inserting “2004”. (b) Effective Date.--The amendments made by this section shall apply to expenditures paid or incurred after December 31, 2002.