S.Amdt. 4367

1. Adds TITLE VIII--ALASKA COMMUNITY DEVELOPMENT QUOTA PROGRAM at the end of the bill

   Adds a title

   In H.R. 4213 · Engrossed Amendment House

   (3) in the Senate, are designated as an emergency requirement pursuant to section 403(a) of S. Con. Res. 13 (111th Congress), the concurrent resolution on the budget for fiscal year 2010.

   Inserted: TITLE VIII--ALASKA COMMUNITY DEVELOPMENT QUOTA PROGRAM

   Inserted: SEC. 801. SHORT TITLE.

   Inserted: This title may be cited as the "Western Alaska Community Development Organizations Tax Relief Act".

   Inserted: SEC. 802. FINDINGS.

   Inserted: Congress finds the following:

   Inserted: (1) In 1990, Congress established a Joint Federal-State Commission on Policies and Programs Affecting Alaska Natives to investigate economic and social conditions in rural Alaska communities that are Native villages for the purposes of the Alaska Native Claims Settlement Act; the Commission reported very high unemployment and widespread poverty.

   Inserted: (2) In 1992, the United States Secretary of Commerce approved Amendment 18 to the Bering Sea and Aleutian Island (BSAI) Fishery Management Plan creating the Western Alaska Community Development Quota (CDQ) Program to promote the economic development of the 65 villages of the western Alaska region which were organized as six coalitions.

   Inserted: (3) In 1994, the Commission recommended to Congress that it amend the Magnuson-Stevens Fishery Conservation and Management Act to codify the establishment of the CDQ Program and expand the program to include all commercial fisheries that are conducted in the Bering Sea-Aleutian Islands Management Area.

   Inserted: (4) In 1996, Congress implemented the recommendation of the Commission by enacting section 305(i)(1) of the Magnuson-Stevens Fishery Conservation and Management Act subparagraph (A) of which established the western Alaska community development program--

   Inserted: (A) to provide eligible western Alaska villages with the opportunity to participate and invest in fisheries in the Bering Sea and Aleutian Islands Management Area;

   Inserted: (B) to support economic development in western Alaska;

   Inserted: (C) to alleviate poverty and provide economic and social benefits for residents of western Alaska; and

   Show 14 more inserted paragraphsShow less

   Inserted: (D) to achieve sustainable and diversified local economies in western Alaska.

   Inserted: (5) In 2006, Congress, in section 416 of the Conference Report to Coast Guard and Maritime Transportation Act of 2006, stated its intent that "all activities of the CDQ groups continue to be considered tax-exempt (as has been the practice since the program's inception in 1992) so that the six CDQ groups can more readily address the pressing economic needs of the region".

   Inserted: (6) The original six coalitions organized as six corporations and are recognized as tax-exempt under either section 501(c)(3) or section 501(c)(4) of the Internal Revenue Code of 1986.

   Inserted: (7) Today, the six CDQ organizations are making important and ongoing contributions to the economic development and the alleviation of poverty in the western Alaska region consistent with the purposes Congress has established for the CDQ Program. As the program was intended, the organizations have become bona fide participants in the BSAI commercial fisheries. The CDQ organizations are using the revenue that their participation generates to create employment and economic development opportunities that would have been impossible in western Alaska prior to the CDQ Program.

   Inserted: (8) The CDQ organizations have paid, and will continue to pay, income tax on income generated from their activities and investments outside of the BSAI area.

   Inserted: (9) Excluding income generated from the CDQ organizations' fishery-related activities and investments inside the BSAI area from unrelated business taxable income is consistent with the intent of Congress.

   Inserted: SEC. 803. CLARIFICATION OF TAX-EXEMPT TREATMENT OF CERTAIN INCOME OF SIX ALASKA COMMUNITY DEVELOPMENT QUOTA (CDQ) PROGRAM ORGANIZATIONS.

   Inserted: (a) Clarification.--

   Inserted: (1) In general.--Section 512(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

   Inserted: "(20) Treatment of certain income of six alaska community development quota (cdq) program organizations.--There shall be excluded all income derived from a trade or business carried on by a Community Development Quota entity identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)(D) participating or investing in the harvesting, processing, transportation, sales, or marketing of fish and fish product in the Bering Sea and Aleutian Islands Management Area if the conduct of such trade or business is in furtherance of one or more of the purposes specified in section 305(i)(1)(A) of such Act. Such excluded income received after the date of the enactment of this paragraph shall be reported by such entity on the annual return required under section 6033 and in any annual report required under section 305(i)(1)(F)(ii) of such Act (16 U.S.C. 1855(i)(1)(F)(ii)).".

   Inserted: (2) Effective date.--The amendment made by paragraph (1) shall apply to income received before, on, or after the date of the enactment of this Act.

   Inserted: (b) Application to Certain Wholly Owned Subsidiaries.--If the assets of a trade or business described in section 512(b)(20) of the Internal Revenue Code of 1986 (as added by subsection (a)(1)) of any subsidiary wholly owned by a Community Development Quota entity identified in section 305(i)(1)(D) of the Magnuson-Stevens Fishery Conservation and Management Act (16 U.S.C. 1855(i)(1)(D) are transferred to such entity (including in liquidation of such subsidiary) not later than 18 months after the date of the enactment of this Act--

   Inserted: (1) no gain resulting from such transfer shall be recognized to either such subsidiary or such entity under such Code, and

   Inserted: (2) all income derived by such subsidiary from such transferred trade or business shall be exempt from taxation under such Code.

   Original wording

   At the end, add the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed