< Back to H.R. 627 (107th Congress, 2001–2002)

Text of the Rural American Prosperity Act of 2001

This bill was introduced on February 14, 2001, in a previous session of Congress, but was not enacted. The text of the bill below is as of Feb 14, 2001 (Introduced).

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HR 627 IH

107th CONGRESS

1st Session

H. R. 627

To provide tax and regulatory relief for farmers and to improve the competitiveness of American agricultural commodities and products in global markets.

IN THE HOUSE OF REPRESENTATIVES

February 14, 2001

Mr. BOEHNER (for himself, Mr. COOKSEY, Mr. PENCE, Mr. JOHNSON of Illinois, Mr. OSBORNE, Mr. NETHERCUTT, Mr. FLETCHER, Mr. LAHOOD, and Mr. HAYES) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committees on Agriculture, Rules, and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned


A BILL

To provide tax and regulatory relief for farmers and to improve the competitiveness of American agricultural commodities and products in global markets.

    Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Rural America Prosperity Act of 2001’.

    (b) TABLE OF CONTENTS- The table of contents of this Act is as follows:

      Sec. 1. Short title; table of contents.

TITLE I--TAX RELIEF FOR FARMERS

Subtitle A--General Tax Provisions

      Sec. 101. Deduction for 100 percent of health insurance costs of self-employed individuals.

      Sec. 102. Exclusion of gain from sale of farmland.

      Sec. 103. Income averaging for farmers not to increase alternative minimum tax liability.

      Sec. 104. Farm and ranch risk management accounts.

Subtitle B--Estate and Gift Tax Relief

      Sec. 111. Repeal of estate, gift, and generation-skipping taxes.

      Sec. 112. Termination of step up in basis at death.

      Sec. 113. Carryover basis at death.

      Sec. 114. Additional reductions of estate and gift tax rates.

      Sec. 115. Unified credit against estate and gift taxes replaced with unified exemption amount.

      Sec. 116. Deemed allocation of GST exemption to lifetime transfers to trusts; retroactive allocations.

      Sec. 117. Severing of trusts.

      Sec. 118. Modification of certain valuation rules.

      Sec. 119. Relief provisions.

      Sec. 120. Expansion of estate tax rule for conservation easements.

TITLE II--STUDY OF COSTS OF REGULATIONS ON FARMERS, RANCHERS, AND FORESTERS

      Sec. 201. Definitions.

      Sec. 202. Comptroller General study of regulations.

      Sec. 203. Response of Secretary of Agriculture.

TITLE III--EXTENSION OF TRADE AUTHORITIES PROCEDURES FOR RECIPROCAL TRADE AGREEMENTS

      Sec. 301. Short title.

      Sec. 302. Trade negotiating objectives.

      Sec. 303. Trade agreements authority.

      Sec. 304. Consultations.

      Sec. 305. Implementation of trade agreements.

      Sec. 306. Treatment of certain trade agreements.

      Sec. 307. Conforming amendments.

      Sec. 308. Definitions.

TITLE IV--AGRICULTURAL TRADE FREEDOM

      Sec. 401. Short title.

      Sec. 402. Definitions.

      Sec. 403. Agricultural commodities, livestock, and products exempt from unilateral agricultural sanctions.

      Sec. 404. Sale or barter of food assistance.

TITLE I--TAX RELIEF FOR FARMERS

Subtitle A--General Tax Provisions

SEC. 101. DEDUCTION FOR 100 PERCENT OF HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.

    (a) IN GENERAL- Paragraph (1) of section 162(l) of the Internal Revenue Code of 1986 (relating to special rules for health insurance costs of self-employed individuals) is amended to read as follows:

      ‘(1) ALLOWANCE OF DEDUCTION- In the case of an individual who is an employee within the meaning of section 401(c)(1), there shall be allowed as a deduction under this section an amount equal to 100 percent of the amount paid during the taxable year for insurance which constitutes medical care for the taxpayer, his spouse, and dependents.’.

    (b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 2001.

SEC. 102. EXCLUSION OF GAIN FROM SALE OF FARMLAND.

    (a) IN GENERAL- Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by inserting after section 121 the following:

‘SEC. 121A. EXCLUSION OF GAIN FROM SALE OF QUALIFIED FARM PROPERTY.

    ‘(a) EXCLUSION- In the case of a natural person, gross income shall not include gain from the sale or exchange of qualified farm property.

    ‘(b) LIMITATION-

      ‘(1) IN GENERAL- The amount of gain excluded from gross income under subsection (a) with respect to any taxable year shall not exceed $500,000 ($250,000 in the case of a married individual filing a separate return), reduced by the aggregate amount of gain excluded under subsection (a) for all preceding taxable years.

      ‘(2) SPECIAL RULE FOR JOINT RETURNS- The amount of the exclusion under subsection (a) on a joint return for any taxable year shall be allocated equally between the spouses for purposes of applying the limitation under paragraph (1) for any succeeding taxable year.

    ‘(c) QUALIFIED FARM PROPERTY- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘qualified farm property’ means real property located in the United States if, during periods aggregating 3 years or more of the 5-year period ending on the date of the sale or exchange of such real property--

        ‘(A) such real property was used by the taxpayer or a member of the family of the taxpayer as a farm for farming purposes, and

        ‘(B) there was material participation by the taxpayer (or such a member) in the operation of the farm.

      ‘(2) OTHER DEFINITIONS- The terms ‘member of the family’, ‘farm’, and ‘farming purposes’ have the respective meanings given such terms by paragraphs (2), (4), and (5) of section 2032A(e).

      ‘(3) SPECIAL RULES- Rules similar to the rules of paragraphs (4) and (5) of section 2032A(b) and paragraphs (3) and (6) of section 2032A(e) shall apply.

    ‘(d) OTHER RULES- For purposes of this section, rules similar to the rules of subsection (e) and subsection (f) of section 121 shall apply.’

    (b) CONFORMING AMENDMENT- The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 121 the following:

‘Sec. 121A. Exclusion of gain from sale of qualified farm property.’

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to any sale or exchange after the date of the enactment of this Act in taxable years ending after such date.

SEC. 103. INCOME AVERAGING FOR FARMERS NOT TO INCREASE ALTERNATIVE MINIMUM TAX LIABILITY.

    (a) IN GENERAL- Section 55(c) of the Internal Revenue Code of 1986 (defining regular tax) is amended by redesignating paragraph (2) as paragraph (3) and by inserting after paragraph (1) the following:

      ‘(2) COORDINATION WITH INCOME AVERAGING FOR FARMERS- Solely for purposes of this section, section 1301 (relating to averaging of farm income) shall not apply in computing the regular tax.’

    (b) EFFECTIVE DATE- The amendment made by this section shall apply to taxable years beginning after December 31, 1997.

SEC. 104. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    (a) IN GENERAL- Subpart C of part II of subchapter E of chapter 1 of the Internal Revenue Code of 1986 (relating to taxable year for which deductions taken) is amended by inserting after section 468B the following:

‘SEC. 468C. FARM AND RANCH RISK MANAGEMENT ACCOUNTS.

    ‘(a) DEDUCTION ALLOWED- In the case of an individual engaged in an eligible farming business, there shall be allowed as a deduction for any taxable year the amount paid in cash by the taxpayer during the taxable year to a Farm and Ranch Risk Management Account (hereinafter referred to as the ‘FARRM Account’).

    ‘(b) LIMITATION- The amount which a taxpayer may pay into the FARRM Account for any taxable year shall not exceed 20 percent of so much of the taxable income of the taxpayer (determined without regard to this section) which is attributable (determined in the manner applicable under section 1301) to any eligible farming business.

    ‘(c) ELIGIBLE FARMING BUSINESS- For purposes of this section, the term ‘eligible farming business’ means any farming business (as defined in section 263A(e)(4)) which is not a passive activity (within the meaning of section 469(c)) of the taxpayer.

    ‘(d) FARRM ACCOUNT- For purposes of this section--

      ‘(1) IN GENERAL- The term ‘FARRM Account’ means a trust created or organized in the United States for the exclusive benefit of the taxpayer, but only if the written governing instrument creating the trust meets the following requirements:

        ‘(A) No contribution will be accepted for any taxable year in excess of the amount allowed as a deduction under subsection (a) for such year.

        ‘(B) The trustee is a bank (as defined in section 408(n)) or another person who demonstrates to the satisfaction of the Secretary that the manner in which such person will administer the trust will be consistent with the requirements of this section.

        ‘(C) The assets of the trust consist entirely of cash or of obligations which have adequate stated interest (as defined in section 1274(c)(2)) and which pay such interest not less often than annually.

        ‘(D) All income of the trust is distributed currently to the grantor.

        ‘(E) The assets of the trust will not be commingled with other property except in a common trust fund or common investment fund.

      ‘(2) ACCOUNT TAXED AS GRANTOR TRUST- The grantor of a FARRM Account shall be treated for purposes of this title as the owner of such Account and shall be subject to tax thereon in accordance with subpart E of part I of subchapter J of this chapter (relating to grantors and others treated as substantial owners).

    ‘(e) INCLUSION OF AMOUNTS DISTRIBUTED-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), there shall be includible in the gross income of the taxpayer for any taxable year--

        ‘(A) any amount distributed from a FARRM Account of the taxpayer during such taxable year, and

        ‘(B) any deemed distribution under--

          ‘(i) subsection (f)(1) (relating to deposits not distributed within 5 years),

          ‘(ii) subsection (f)(2) (relating to cessation in eligible farming business), and

          ‘(iii) subparagraph (A) or (B) of subsection (f)(3) (relating to prohibited transactions and pledging account as security).

      ‘(2) EXCEPTIONS- Paragraph (1)(A) shall not apply to--

        ‘(A) any distribution to the extent attributable to income of the Account, and

        ‘(B) the distribution of any contribution paid during a taxable year to a FARRM Account to the extent that such contribution exceeds the limitation applicable under subsection (b) if requirements similar to the requirements of section 408(d)(4) are met.

      For purposes of subparagraph (A), distributions shall be treated as first attributable to income and then to other amounts.

    ‘(f) SPECIAL RULES-

      ‘(1) TAX ON DEPOSITS IN ACCOUNT WHICH ARE NOT DISTRIBUTED WITHIN 5 YEARS-

        ‘(A) IN GENERAL- If, at the close of any taxable year, there is a nonqualified balance in any FARRM Account--

          ‘(i) there shall be deemed distributed from such Account during such taxable year an amount equal to such balance, and

          ‘(ii) the taxpayer’s tax imposed by this chapter for such taxable year shall be increased by 10 percent of such deemed distribution.

        The preceding sentence shall not apply if an amount equal to such nonqualified balance is distributed from such Account to the taxpayer

before the due date (including extensions) for filing the return of tax imposed by this chapter for such year (or, if earlier, the date the taxpayer files such return for such year).

        ‘(B) NONQUALIFIED BALANCE- For purposes of subparagraph (A), the term ‘nonqualified balance’ means any balance in the Account on the last day of the taxable year which is attributable to amounts deposited in such Account before the 4th preceding taxable year.

        ‘(C) ORDERING RULE- For purposes of this paragraph, distributions from a FARRM Account (other than distributions of current income) shall be treated as made from deposits in the order in which such deposits were made, beginning with the earliest deposits.

      ‘(2) CESSATION IN ELIGIBLE BUSINESS- At the close of the first disqualification period after a period for which the taxpayer was engaged in an eligible farming business, there shall be deemed distributed from the FARRM Account of the taxpayer an amount equal to the balance in such Account (if any) at the close of such disqualification period. For purposes of the preceding sentence, the term ‘disqualification period’ means any period of 2 consecutive taxable years for which the taxpayer is not engaged in an eligible farming business.

      ‘(3) CERTAIN RULES TO APPLY- Rules similar to the following rules shall apply for purposes of this section:

        ‘(A) Section 220(f)(8) (relating to treatment on death).

        ‘(B) Section 408(e)(2) (relating to loss of exemption of account where individual engages in prohibited transaction).

        ‘(C) Section 408(e)(4) (relating to effect of pledging account as security).

        ‘(D) Section 408(g) (relating to community property laws).

        ‘(E) Section 408(h) (relating to custodial accounts).

      ‘(4) TIME WHEN PAYMENTS DEEMED MADE- For purposes of this section, a taxpayer shall be deemed to have made a payment to a FARRM Account on the last day of a taxable year if such payment is made on account of such taxable year and is made on or before the due date (without regard to extensions) for filing the return of tax for such taxable year.

      ‘(5) INDIVIDUAL- For purposes of this section, the term ‘individual’ shall not include an estate or trust.

      ‘(6) DEDUCTION NOT ALLOWED FOR SELF-EMPLOYMENT TAX- The deduction allowable by reason of subsection (a) shall not be taken into account in determining an individual’s net earnings from self-employment (within the meaning of section 1402(a)) for purposes of chapter 2.

    ‘(g) REPORTS- The trustee of a FARRM Account shall make such reports regarding such Account to the Secretary and to the person for whose benefit the Account is maintained with respect to contributions, distributions, and such other matters as the Secretary may require under regulations. The reports required by this subsection shall be filed at such time and in such manner and furnished to such persons at such time and in such manner as may be required by such regulations.’.

    (b) TAX ON EXCESS CONTRIBUTIONS-

      (1) Subsection (a) of section 4973 of the Internal Revenue Code of 1986 (relating to tax on excess contributions to certain tax-favored accounts and annuities) is amended by striking ‘or’ at the end of paragraph (3), by redesignating paragraph (4) as paragraph (5), and by inserting after paragraph (3) the following:

      ‘(4) a FARRM Account (within the meaning of section 468C(d)), or’.

      (2) Section 4973 of such Code, is amended by adding at the end the following:

    ‘(g) EXCESS CONTRIBUTIONS TO FARRM ACCOUNTS- For purposes of this section, in the case of a FARRM Account (within the meaning of section 468C(d)), the term ‘excess contributions’ means the amount by which the amount contributed for the taxable year to the Account exceeds the amount which may be contributed to the Account under section 468C(b) for such taxable year. For purposes of this subsection, any contribution which is distributed out of the FARRM Account in a distribution to which section 468C(e)(2)(B) applies shall be treated as an amount not contributed.’.

      (3) The section heading for section 4973 of such Code is amended to read as follows:

‘SEC. 4973. EXCESS CONTRIBUTIONS TO CERTAIN ACCOUNTS, ANNUITIES, ETC.’.

      (4) The table of sections for chapter 43 of such Code is amended by striking the item relating to section 4973 and inserting the following:

‘Sec. 4973. Excess contributions to certain accounts, annuities, etc.’.

    (c) TAX ON PROHIBITED TRANSACTIONS-

      (1) Subsection (c) of section 4975 of the Internal Revenue Code of 1986 (relating to tax on prohibited transactions) is amended by adding at the end the following:

      ‘(6) SPECIAL RULE FOR FARRM ACCOUNTS- A person for whose benefit a FARRM Account (within the meaning of section 468C(d)) is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if, with respect to such transaction, the account ceases to be a FARRM Account by reason of the application of section 468C(f)(3)(A) to such account.’.

      (2) Paragraph (1) of section 4975(e) of such Code is amended by redesignating subparagraphs (E) and (F) as subparagraphs (F) and (G), respectively, and by inserting after subparagraph (D) the following:

        ‘(E) a FARRM Account described in section 468C(d),’.

    (d) FAILURE TO PROVIDE REPORTS ON FARRM ACCOUNTS- Paragraph (2) of section 6693(a) of the Internal Revenue Code of 1986 (relating to failure to provide

reports on certain tax-favored accounts or annuities) is amended by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively, and by inserting after subparagraph (B) the following:

        ‘(C) section 468C(g) (relating to FARRM Accounts),’.

    (e) CLERICAL AMENDMENT- The table of sections for subpart C of part II of subchapter E of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 468B the following:

‘Sec. 468C. Farm and Ranch Risk Management Accounts.’.

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

Subtitle B--Estate and Gift Tax Relief

SEC. 111. REPEAL OF ESTATE, GIFT, AND GENERATION-SKIPPING TAXES.

    (a) IN GENERAL- Subtitle B of the Internal Revenue Code of 1986 is hereby repealed.

    (b) EFFECTIVE DATE- The repeal made by subsection (a) shall apply to the estates of decedents dying, and gifts and generation-skipping transfers made, after December 31, 2010.

SEC. 112. TERMINATION OF STEP UP IN BASIS AT DEATH.

    (a) TERMINATION OF APPLICATION OF SECTION 1014- Section 1014 of the Internal Revenue Code of 1986 (relating to basis of property acquired from a decedent) is amended by adding at the end the following:

    ‘(f) TERMINATION- In the case of a decedent dying after December 31, 2010, this section shall not apply to property for which basis is provided by section 1022.’.

    (b) CONFORMING AMENDMENT- Subsection (a) of section 1016 of the Internal Revenue Code of 1986 (relating to adjustments to basis) is amended by striking ‘and’ at the end of paragraph (26), by striking the period at the end of paragraph (27) and inserting ‘, and’, and by adding at the end the following:

      ‘(28) to the extent provided in section 1022 (relating to basis for certain property acquired from a decedent dying after December 31, 2010).’.

SEC. 113. CARRYOVER BASIS AT DEATH.

    (a) GENERAL RULE- Part II of subchapter O of chapter 1 of the Internal Revenue Code of 1986 (relating to basis rules of general application) is amended by inserting after section 1021 the following new section:

‘SEC. 1022. CARRYOVER BASIS FOR CERTAIN PROPERTY ACQUIRED FROM A DECEDENT DYING AFTER DECEMBER 31, 2010.

    ‘(a) CARRYOVER BASIS- Except as otherwise provided in this section, the basis of carryover basis property in the hands of a person acquiring such property from a decedent shall be determined under section 1015.

    ‘(b) CARRYOVER BASIS PROPERTY DEFINED-

      ‘(1) IN GENERAL- For purposes of this section, the term ‘carryover basis property’ means any property--

        ‘(A) which is acquired from or passed from a decedent who died after December 31, 2010, and

        ‘(B) which is not excluded pursuant to paragraph (2).

      The property taken into account under subparagraph (A) shall be determined under section 1014(b) without regard to subparagraph (A) of the last sentence of paragraph (9) thereof.

      ‘(2) CERTAIN PROPERTY NOT CARRYOVER BASIS PROPERTY- The term ‘carryover basis property’ does not include--

        ‘(A) any item of gross income in respect of a decedent described in section 691,

        ‘(B) property of the decedent to the extent that the aggregate adjusted fair market value of such property does not exceed $1,300,000, and

        ‘(C) property which was acquired from the decedent by the surviving spouse of the decedent (and which would be carryover basis property without regard to this subparagraph) but only if the value of such property would have been deductible from the value of the taxable estate of the decedent under section 2056, as in effect on the day before the date of the enactment of the Rural America Prosperity Act of 2001.

      For purposes of this subsection, the term ‘adjusted fair market value’ means, with respect to any property, fair market value reduced by any indebtedness secured by such property.

      ‘(3) LIMITATION ON EXCEPTION FOR PROPERTY ACQUIRED BY SURVIVING SPOUSE- The adjusted fair market value of property which is not carryover basis property by reason of paragraph (2)(C) shall not exceed $3,000,000.

      ‘(4) ALLOCATION OF EXCEPTED AMOUNTS- The executor shall allocate the limitations under paragraphs (2)(B) and (3).

      ‘(5) INFLATION ADJUSTMENT OF EXCEPTED AMOUNTS- In the case of decedents dying in a calendar year after 2011, the dollar amounts in paragraphs (2)(B) and (3) shall each be increased by an amount equal to the product of--

        ‘(A) such dollar amount, and

        ‘(B) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting ‘2010’ for ‘1992’ in subparagraph (B) thereof.

      If any increase determined under the preceding sentence is not a multiple of $10,000, such increase shall be rounded to the nearest multiple of $10,000.

    ‘(c) REGULATIONS- The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.’.

    (b) MISCELLANEOUS AMENDMENTS RELATED TO CARRYOVER BASIS-

      (1) CAPITAL GAIN TREATMENT FOR INHERITED ART WORK OR SIMILAR PROPERTY-

        (A) IN GENERAL- Subparagraph (C) of section 1221(a)(3) of the Internal Revenue

Code of 1986 (defining capital asset) is amended by inserting ‘(other than by reason of section 1022)’ after ‘is determined’.

        (B) COORDINATION WITH SECTION 170- Paragraph (1) of section 170(e) of such Code (relating to certain contributions of ordinary income and capital gain property) is amended by adding at the end the following: ‘For purposes of this paragraph, the determination of whether property is a capital asset shall be made without regard to the exception contained in section 1221(a)(3)(C) for basis determined under section 1022.’.

      (2) DEFINITION OF EXECUTOR- Section 7701(a) of such Code (relating to definitions) is amended by adding at the end the following:

      ‘(47) EXECUTOR- The term ‘executor’ means the executor or administrator of the decedent, or, if there is no executor or administrator appointed, qualified, and acting within the United States, then any person in actual or constructive possession of any property of the decedent.’.

      (3) CLERICAL AMENDMENT- The table of sections for part II of subchapter O of chapter 1 of such Code is amended by adding at the end the following new item:

‘Sec. 1022. Carryover basis for certain property acquired from a decedent dying after December 31, 2010.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to estates of decedents dying after December 31, 2010.

SEC. 114. ADDITIONAL REDUCTIONS OF ESTATE AND GIFT TAX RATES.

    (a) MAXIMUM RATE OF TAX REDUCED TO 50 PERCENT-

      (1) IN GENERAL- The table contained in section 2001(c)(1) of the Internal Revenue Code of 1986 is amended by striking the two highest brackets and inserting the following:

‘Over $2,500,000


$1,025,800, plus 50% of the excess over $2,500,000.’.

      (2) PHASE-IN OF REDUCED RATE- Subsection (c) of section 2001 of such Code is amended by adding at the end the following new paragraph:

      ‘(3) PHASE-IN OF REDUCED RATE- In the case of decedents dying, and gifts made, during 2002, the last item in the table contained in paragraph (1) shall be applied by substituting ‘53%’ for ‘50%’.’.

    (b) REPEAL OF PHASEOUT OF GRADUATED RATES- Subsection (c) of section 2001 of the Internal Revenue Code of 1986 is amended by striking paragraph (2) and redesignating paragraph (3), as added by subsection (a), as paragraph (2).

    (c) ADDITIONAL REDUCTIONS OF RATES OF TAX- Subsection (c) of section 2001 of the Internal Revenue Code of 1986, as so amended, is amended by adding at the end the following new paragraph:

      ‘(3) PHASEDOWN OF TAX- In the case of estates of decedents dying, and gifts made, during any calendar year after 2003 and before 2011--

        ‘(A) IN GENERAL- Except as provided in subparagraph (C), the tentative tax under this subsection shall be determined by using a table prescribed by the Secretary (in lieu of using the table contained in paragraph (1)) which is the same as such table; except that--

          ‘(i) each of the rates of tax shall be reduced by the number of percentage points determined under subparagraph (B), and

          ‘(ii) the amounts setting forth the tax shall be adjusted to the extent necessary to reflect the adjustments under clause (i).

        ‘(B) PERCENTAGE POINTS OF REDUCTION-

--The number of

‘For calendar year:

--percentage points is:

          2004

--1.0

          2005

--2.0

          2006

--3.0

          2007

--4.0

          2008

--5.5

          2009

--7.5

          2010

--9.5.

        ‘(C) COORDINATION WITH INCOME TAX RATES- The reductions under subparagraph (A)--

          ‘(i) shall not reduce any rate under paragraph (1) below the lowest rate in section 1(c), and

          ‘(ii) shall not reduce the highest rate under paragraph (1) below the highest rate in section 1(c).

        ‘(D) COORDINATION WITH CREDIT FOR STATE DEATH TAXES- Rules similar to the rules of subparagraph (A) shall apply to the table contained in section 2011(b) except that the Secretary shall prescribe percentage point reductions which maintain the proportionate relationship (as in effect before any reduction under this paragraph) between the credit under section 2011 and the tax rates under subsection (c).’.

    (d) EFFECTIVE DATES-

      (1) SUBSECTIONS (a) AND (b)- The amendments made by subsections (a) and (b) shall apply to estates of decedents dying, and gifts made, after December 31, 2001.

      (2) SUBSECTION (c)- The amendment made by subsection (c) shall apply to estates of decedents dying, and gifts made, after December 31, 2003.

SEC. 115. UNIFIED CREDIT AGAINST ESTATE AND GIFT TAXES REPLACED WITH UNIFIED EXEMPTION AMOUNT.

    (a) IN GENERAL-

      (1) ESTATE TAX- Subsection (b) of section 2001 of the Internal Revenue Code of 1986 (relating to computation of tax) is amended to read as follows:

    ‘(b) COMPUTATION OF TAX-

      ‘(1) IN GENERAL- The tax imposed by this section shall be the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2), over

        ‘(B) the aggregate amount of tax which would have been payable under chapter 12 with respect to gifts made by the decedent after December 31, 1976, if the provisions of subsection

      (c) (as in effect at the decedent’s death) had been applicable at the time of such gifts.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph is a tax computed under subsection (c) on the excess of--

        ‘(A) the sum of--

          ‘(i) the amount of the taxable estate, and

          ‘(ii) the amount of the adjusted taxable gifts, over

        ‘(B) the exemption amount for the calendar year in which the decedent died.

      ‘(3) EXEMPTION AMOUNT- For purposes of paragraph (2), the term ‘exemption amount’ means the amount determined in accordance with the following table:

‘In the case of

--The exemption

calendar year:

--amount is:

2002 and 2003

--$700,000

2004

--$850,000

2005

--$950,000

2006 or thereafter

--$1,000,000.

      ‘(4) ADJUSTED TAXABLE GIFTS- For purposes of paragraph (2), the term ‘adjusted taxable gifts’ means the total amount of the taxable gifts (within the meaning of section 2503) made by the decedent after December 31, 1976, other than gifts which are includible in the gross estate of the decedent.’.

      (2) GIFT TAX- Subsection (a) of section 2502 of such Code (relating to computation of tax) is amended to read as follows:

    ‘(a) COMPUTATION OF TAX-

      ‘(1) IN GENERAL- The tax imposed by section 2501 for each calendar year shall be the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2), over

        ‘(B) the tax paid under this section for all prior calendar periods.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph for a calendar year is a tax computed under section 2001(c) on the excess of--

        ‘(A) the aggregate sum of the taxable gifts for such calendar year and for each of the preceding calendar periods, over

        ‘(B) the exemption amount under section 2001(b)(3) for such calendar year.’.

    (b) REPEAL OF UNIFIED CREDITS-

      (1) Section 2010 of the Internal Revenue Code of 1986 (relating to unified credit against estate tax) is hereby repealed.

      (2) Section 2505 of such Code (relating to unified credit against gift tax) is hereby repealed.

    (c) CONFORMING AMENDMENTS-

      (1)(A) Subsection (b) of section 2011 of the Internal Revenue Code of 1986 is amended--

        (i) by striking ‘adjusted’ in the table; and

        (ii) by striking the last sentence.

      (B) Subsection (f) of section 2011 of such Code is amended by striking ‘, reduced by the amount of the unified credit provided by section 2010’.

      (2) Subsection (a) of section 2012 of such Code is amended by striking ‘and the unified credit provided by section 2010’.

      (3) Subparagraph (A) of section 2013(c)(1) of such Code is amended by striking ‘2010,’.

      (4) Paragraph (2) of section 2014(b) of such Code is amended by striking ‘2010, 2011,’ and inserting ‘2011’.

      (5) Clause (ii) of section 2056A(b)(12)(C) of such Code is amended to read as follows:

          ‘(ii) to treat any reduction in the tax imposed by paragraph (1)(A) by reason of the credit allowable under section 2010 (as in effect on the day before the date of the enactment of the Rural America Prosperity Act of 2001) or the exemption amount allowable under section 2001(b) with respect to the decedent as a credit under section 2505 (as so in effect) or exemption under section 2521 (as the case may be) allowable to such surviving spouse for purposes of determining the amount of the exemption allowable under section 2521 with respect to taxable gifts made by the surviving spouse during the year in which the spouse becomes a citizen or any subsequent year,’.

      (6) Subsection (a) of section 2057 of such Code is amended by striking paragraphs (2) and (3) and inserting the following new paragraph:

      ‘(2) MAXIMUM DEDUCTION- The deduction allowed by this section shall not exceed the excess of $1,300,000 over the exemption amount (as defined in section 2001(b)(3)).’.

      (7)(A) Subsection (b) of section 2101 of such Code is amended to read as follows:

    ‘(b) COMPUTATION OF TAX-

      ‘(1) IN GENERAL- The tax imposed by this section shall be the amount equal to the excess (if any) of--

        ‘(A) the tentative tax determined under paragraph (2), over

        ‘(B) a tentative tax computed under section 2001(c) on the amount of the adjusted taxable gifts.

      ‘(2) TENTATIVE TAX- For purposes of paragraph (1), the tentative tax determined under this paragraph is a tax computed under section 2001(c) on the excess of--

        ‘(A) the sum of--

          ‘(i) the amount of the taxable estate, and

          ‘(ii) the amount of the adjusted taxable gifts, over

        ‘(B) the exemption amount for the calendar year in which the decedent died.

      ‘(3) EXEMPTION AMOUNT-

        ‘(A) IN GENERAL- The term ‘exemption amount’ means $60,000.

        ‘(B) RESIDENTS OF POSSESSIONS OF THE UNITED STATES- In the case of a decedent who is considered to be a nonresident not a citizen of the United States under section 2209, the exemption amount under this paragraph shall be the greater of--

          ‘(i) $60,000, or

          ‘(ii) that proportion of $175,000 which the value of that part of the decedent’s gross estate which at the time of his death is situated in the United States bears to the value of his entire gross estate wherever situated.

        ‘(C) SPECIAL RULES-

          ‘(i) COORDINATION WITH TREATIES- To the extent required under any treaty obligation of the United States, the exemption amount allowed under this paragraph shall be equal to the amount which bears the same ratio to the exemption amount under section 2001(b)(3) (for the calendar year in which the decedent died) as the value of the part of the decedent’s gross estate which at the time of his death is situated in the United States bears to the value of his entire gross estate wherever situated. For purposes of the preceding sentence, property shall not be

treated as situated in the United States if such property is exempt from the tax imposed by this subchapter under any treaty obligation of the United States.

          ‘(ii) COORDINATION WITH GIFT TAX EXEMPTION AND UNIFIED CREDIT- If an exemption has been allowed under section 2521 (or a credit has been allowed under section 2505 as in effect on the day before the date of the enactment of the Rural America Prosperity Act of 2001) with respect to any gift made by the decedent, each dollar amount contained in subparagraph (A) or (B) or the exemption amount applicable under clause (i) of this subparagraph (whichever applies) shall be reduced by the exemption so allowed under section 2521 (or, in the case of such a credit, by the amount of the gift for which the credit was so allowed).’.

      (8) Section 2102 of such Code is amended by striking subsection (c).

      (9)(A) Subsection (a) of section 2107 of such Code is amended by adding at the end the following new paragraph:

      ‘(3) LIMITATION ON EXEMPTION AMOUNT- Subparagraphs (B) and (C) of section 2101(b)(3) shall not apply in applying section 2101 for purposes of this section.’.

      (B) Subsection (c) of section 2107 of such Code is amended--

        (i) by striking paragraph (1) and by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively, and

        (ii) by striking the second sentence of paragraph (2) (as so redesignated).

      (10) Paragraph (1) of section 6018(a) of such Code is amended by striking ‘the applicable exclusion amount in effect under section 2010(c)’ and inserting ‘the exemption amount under section 2001(b)(3)’.

      (11) Subparagraph (A) of section 6601(j)(2) of such Code is amended to read as follows:

        ‘(A) the amount of the tentative tax which would be determined under the rate schedule set forth in section 2001(c) if the amount with respect to which such tentative tax is to be computed were $1,000,000, or’.

      (12) The table of sections for part II of subchapter A of chapter 11 of such Code is amended by striking the item relating to section 2010.

      (13) The table of sections for subchapter A of chapter 12 of such Code is amended by striking the item relating to section 2505.

    (d) EFFECTIVE DATE- The amendments made by this section--

      (1) insofar as they relate to the tax imposed by chapter 11 of the Internal Revenue Code of 1986, shall apply to estates of decedents dying after December 31, 2001, and

      (2) insofar as they relate to the tax imposed by chapter 12 of such Code, shall apply to gifts made after December 31, 2001.

SEC. 116. DEEMED ALLOCATION OF GST EXEMPTION TO LIFETIME TRANSFERS TO TRUSTS; RETROACTIVE ALLOCATIONS.

    (a) IN GENERAL- Section 2632 of the Internal Revenue Code of 1986 (relating to special rules for allocation of GST exemption) is amended by redesignating subsection (c) as subsection (e) and by inserting after subsection (b) the following new subsections:

    ‘(c) DEEMED ALLOCATION TO CERTAIN LIFETIME TRANSFERS TO GST TRUSTS-

      ‘(1) IN GENERAL- If any individual makes an indirect skip during such individual’s lifetime, any unused portion of such individual’s GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero. If the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.

      ‘(2) UNUSED PORTION- For purposes of paragraph (1), the unused portion of an individual’s GST exemption is that portion of such exemption which has not previously been--

        ‘(A) allocated by such individual,

        ‘(B) treated as allocated under subsection (b) with respect to a direct skip occurring during or before the calendar year in which the indirect skip is made, or

        ‘(C) treated as allocated under paragraph (1) with respect to a prior indirect skip.

      ‘(3) DEFINITIONS-

        ‘(A) INDIRECT SKIP- For purposes of this subsection, the term ‘indirect skip’ means any transfer of property (other than a direct skip) subject to the tax imposed by chapter 12 made to a GST trust.

        ‘(B) GST TRUST- The term ‘GST trust’ means a trust that could have a generation-skipping transfer with respect to the transferor unless--

          ‘(i) the trust instrument provides that more than 25 percent of the trust corpus must be distributed to or may be withdrawn by one or more individuals who are non-skip persons--

            ‘(I) before the date that the individual attains age 46,

            ‘(II) on or before one or more dates specified in the trust instrument that will occur before the date that such individual attains age 46, or

            ‘(III) upon the occurrence of an event that, in accordance with regulations prescribed by the Secretary, may reasonably be expected to occur before the date that such individual attains age 46;

          ‘(ii) the trust instrument provides that more than 25 percent of the trust corpus must be distributed to or may be withdrawn by one or more individuals who are

non-skip persons and who are living on the date of death of another person identified in the instrument (by name or by class) who is more than 10 years older than such individuals;

          ‘(iii) the trust instrument provides that, if one or more individuals who are non-skip persons die on or before a date or event described in clause (i) or (ii), more than 25 percent of the trust corpus either must be distributed to the estate or estates of one or more of such individuals or is subject to a general power of appointment exercisable by one or more of such individuals;

          ‘(iv) the trust is a trust any portion of which would be included in the gross estate of a non-skip person (other than the transferor) if such person died immediately after the transfer;

          ‘(v) the trust is a charitable lead annuity trust (within the meaning of section 2642(e)(3)(A)) or a charitable remainder annuity trust or a charitable remainder unitrust (within the meaning of section 664(d)); or

          ‘(vi) the trust is a trust with respect to which a deduction was allowed under section 2522 for the amount of an interest in the form of the right to receive annual payments of a fixed percentage of the net fair market value of the trust property (determined yearly) and which is required to pay principal to a non-skip person if such person is alive when the yearly payments for which the deduction was allowed terminate.

        For purposes of this subparagraph, the value of transferred property shall not be considered to be includible in the gross estate of a non-skip person or subject to a right of withdrawal by reason of such person holding a right to withdraw so much of such property as does not exceed the amount referred to in section 2503(b) with respect to any transferor, and it shall be assumed that powers of appointment held by non-skip persons will not be exercised.

      ‘(4) AUTOMATIC ALLOCATIONS TO CERTAIN GST TRUSTS- For purposes of this subsection, an

indirect skip to which section 2642(f) applies shall be deemed to have been made only at the close of the estate tax inclusion period. The fair market value of such transfer shall be the fair market value of the trust property at the close of the estate tax inclusion period.

      ‘(5) APPLICABILITY AND EFFECT-

        ‘(A) IN GENERAL- An individual--

          ‘(i) may elect to have this subsection not apply to--

            ‘(I) an indirect skip, or

            ‘(II) any or all transfers made by such individual to a particular trust, and

          ‘(ii) may elect to treat any trust as a GST trust for purposes of this subsection with respect to any or all transfers made by such individual to such trust.

        ‘(B) ELECTIONS-

          ‘(i) ELECTIONS WITH RESPECT TO INDIRECT SKIPS- An election under subparagraph (A)(i)(I) shall be deemed to be timely if filed on a timely filed gift tax return for the calendar year in which the transfer was made or deemed to have been made pursuant to paragraph (4) or on such later date or dates as may be prescribed by the Secretary.

          ‘(ii) OTHER ELECTIONS- An election under clause (i)(II) or (ii) of subparagraph (A) may be made on a timely filed gift tax return for the calendar year for which the election is to become effective.

    ‘(d) RETROACTIVE ALLOCATIONS-

      ‘(1) IN GENERAL- If--

        ‘(A) a non-skip person has an interest or a future interest in a trust to which any transfer has been made,

        ‘(B) such person--

          ‘(i) is a lineal descendant of a grandparent of the transferor or of a grandparent of the transferor’s spouse or former spouse, and

          ‘(ii) is assigned to a generation below the generation assignment of the transferor, and

        ‘(C) such person predeceases the transferor,

      then the transferor may make an allocation of any of such transferor’s unused GST exemption to any previous transfer or transfers to the trust on a chronological basis.

      ‘(2) SPECIAL RULES- If the allocation under paragraph (1) by the transferor is made on a gift tax return filed on or before the date prescribed by section 6075(b) for gifts made within the calendar year within which the non-skip person’s death occurred--

        ‘(A) the value of such transfer or transfers for purposes of section 2642(a) shall be determined as if such allocation had been made on a timely filed gift tax return for each calendar year within which each transfer was made,

        ‘(B) such allocation shall be effective immediately before such death, and

        ‘(C) the amount of the transferor’s unused GST exemption available to be allocated shall be determined immediately before such death.

      ‘(3) FUTURE INTEREST- For purposes of this subsection, a person has a future interest in a trust if the trust may permit income or corpus to be paid to such person on a date or dates in the future.’.

    (b) CONFORMING AMENDMENT- Paragraph (2) of section 2632(b) of the Internal Revenue Code of 1986 is

amended by striking ‘with respect to a direct skip’ and inserting ‘or subsection (c)(1)’.

    (c) EFFECTIVE DATES-

      (1) DEEMED ALLOCATION- Section 2632(c) of the Internal Revenue Code of 1986 (as added by subsection (a)), and the amendment made by subsection (b), shall apply to transfers subject to chapter 11 or 12 made after December 31, 2000, and to estate tax inclusion periods ending after December 31, 2000.

      (2) RETROACTIVE ALLOCATIONS- Section 2632(d) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to deaths of non-skip persons occurring after December 31, 2000.

SEC. 117. SEVERING OF TRUSTS.

    (a) IN GENERAL- Subsection (a) of section 2642 of the Internal Revenue Code of 1986 (relating to inclusion ratio) is amended by adding at the end the following new paragraph:

      ‘(3) SEVERING OF TRUSTS-

        ‘(A) IN GENERAL- If a trust is severed in a qualified severance, the trusts resulting from such severance shall be treated as separate trusts thereafter for purposes of this chapter.

        ‘(B) QUALIFIED SEVERANCE- For purposes of subparagraph (A)--

          ‘(i) IN GENERAL- The term ‘qualified severance’ means the division of a single trust and the creation (by any means available under the governing instrument or under local law) of two or more trusts if--

            ‘(I) the single trust was divided on a fractional basis, and

            ‘(II) the terms of the new trusts, in the aggregate, provide for the same succession of interests of beneficiaries as are provided in the original trust.

          ‘(ii) TRUSTS WITH INCLUSION RATIO GREATER THAN ZERO- If a trust has an inclusion ratio of greater than zero and less than 1, a severance is a qualified severance only if the single trust is divided into two trusts, one of which receives a fractional share of the total value of all trust assets equal to the applicable fraction of the single trust immediately before the severance. In such case, the trust receiving such fractional share shall have an inclusion ratio of zero and the other trust shall have an inclusion ratio of 1.

          ‘(iii) REGULATIONS- The term ‘qualified severance’ includes any other severance permitted under regulations prescribed by the Secretary.

        ‘(C) TIMING AND MANNER OF SEVERANCES- A severance pursuant to this paragraph may be made at any time. The Secretary shall prescribe by forms or regulations the manner in which the qualified severance shall be reported to the Secretary.’.

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

SEC. 118. MODIFICATION OF CERTAIN VALUATION RULES.

    (a) GIFTS FOR WHICH GIFT TAX RETURN FILED OR DEEMED ALLOCATION MADE- Paragraph (1) of section 2642(b) of the Internal Revenue Code of 1986 (relating to valuation rules, etc.) is amended to read as follows:

      ‘(1) GIFTS FOR WHICH GIFT TAX RETURN FILED OR DEEMED ALLOCATION MADE- If the allocation of the GST exemption to any transfers of property is made on a gift tax return filed on or before the date prescribed by section 6075(b) for such

transfer or is deemed to be made under section 2632 (b)(1) or (c)(1)--

        ‘(A) the value of such property for purposes of subsection (a) shall be its value as finally determined for purposes of chapter 12 (within the meaning of section 2001(f)(2)), or, in the case of an allocation deemed to have been made at the close of an estate tax inclusion period, its value at the time of the close of the estate tax inclusion period, and

        ‘(B) such allocation shall be effective on and after the date of such transfer, or, in the case of an allocation deemed to have been made at the close of an estate tax inclusion period, on and after the close of such estate tax inclusion period.’.

    (b) TRANSFERS AT DEATH- Subparagraph (A) of section 2642(b)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

        ‘(A) TRANSFERS AT DEATH- If property is transferred as a result of the death of the transferor, the value of such property for purposes of subsection (a) shall be its value as finally determined for purposes of chapter 11; except that, if the requirements prescribed by the Secretary respecting allocation of post-death changes in value are not met, the value of such property shall be determined as of the time of the distribution concerned.’.

    (c) EFFECTIVE DATE- The amendments made by this section shall apply to transfers subject to chapter 11 or 12 of the Internal Revenue Code of 1986 made after December 31, 2000.

SEC. 119. RELIEF PROVISIONS.

    (a) IN GENERAL- Section 2642 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

    ‘(g) RELIEF PROVISIONS-

      ‘(1) RELIEF FROM LATE ELECTIONS-

        ‘(A) IN GENERAL- The Secretary shall by regulation prescribe such circumstances and procedures under which extensions of time will be granted to make--

          ‘(i) an allocation of GST exemption described in paragraph (1) or (2) of subsection (b), and

          ‘(ii) an election under subsection (b)(3) or (c)(5) of section 2632.

        Such regulations shall include procedures for requesting comparable relief with respect to

transfers made before the date of the enactment of this paragraph.

        ‘(B) BASIS FOR DETERMINATIONS- In determining whether to grant relief under this paragraph, the Secretary shall take into account all relevant circumstances, including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the Secretary deems relevant. For purposes of determining whether to grant relief under this paragraph, the time for making the allocation (or election) shall be treated as if not expressly prescribed by statute.

      ‘(2) SUBSTANTIAL COMPLIANCE- An allocation of GST exemption under section 2632 that demonstrates an intent to have the lowest possible inclusion ratio with respect to a transfer or a trust shall be deemed to be an allocation of so much of the transferor’s unused GST exemption as produces the lowest possible inclusion ratio. In determining whether there has been substantial compliance, all relevant circumstances shall be taken into account, including evidence of intent contained in the trust instrument or instrument of transfer and such other factors as the Secretary deems relevant.’.

    (b) EFFECTIVE DATES-

      (1) RELIEF FROM LATE ELECTIONS- Section 2642(g)(1) of the Internal Revenue Code of 1986 (as added by subsection (a)) shall apply to requests pending on, or filed after, December 31, 2000.

      (2) SUBSTANTIAL COMPLIANCE- Section 2642(g)(2) of such Code (as so added) shall apply to transfers subject to chapter 11 or 12 of the Internal Revenue Code of 1986 made after December 31, 2000. No implication is intended with respect to the availability of relief from late elections or the application of a rule of substantial compliance on or before such date.

SEC. 120. EXPANSION OF ESTATE TAX RULE FOR CONSERVATION EASEMENTS.

    (a) WHERE LAND IS LOCATED-

      (1) IN GENERAL- Clause (i) of section 2031(c)(8)(A) of the Internal Revenue Code of 1986 (defining land subject to a conservation easement) is amended--

        (A) by striking ‘25 miles’ both places it appears and inserting ‘50 miles’; and

        (B) striking ‘10 miles’ and inserting ‘25 miles’.

      (2) EFFECTIVE DATE- The amendments made by this subsection shall apply to estates of decedents dying after December 31, 2000.

    (b) CLARIFICATION OF DATE FOR DETERMINING VALUE OF LAND AND EASEMENT-

      (1) IN GENERAL- Section 2031(c)(2) of the Internal Revenue Code of 1986 (defining applicable percentage) is amended by adding at the end the following new sentence: ‘The values taken into account under the preceding sentence shall be such values as of the date of the contribution referred to in paragraph (8)(B).’.

      (2) EFFECTIVE DATE- The amendment made by this subsection shall apply to estates of decedents dying after December 31, 1997.

TITLE II--STUDY OF COSTS OF REGULATIONS ON FARMERS, RANCHERS, AND FORESTERS

SEC. 201. DEFINITIONS.

    In this title:

      (1) REGULATION-

        (A) IN GENERAL- The term ‘regulation’ means the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy.

        (B) EXCLUSION- The term ‘regulation’ does not include--

          (i) the approval or prescription, on a case-by-case or consolidated case basis, for the future of rates, wages, corporations, or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor, or of valuations, costs, or accounting, or practices bearing on activities described in this clause; or

          (ii) the granting of an application for a license, registration, or similar authority, granting or recognizing an exemption, granting a variance or petition for relief from a regulatory requirement, or other action relieving a restriction or taking any action necessary to permit new or improved applications of technology.

      (2) LICENSE- The term ‘license’ means the whole or part of an agency permit, certificate, approval, registration, charter, membership, statutory exemption, or other form of permission.

SEC. 202. COMPTROLLER GENERAL STUDY OF REGULATIONS.

    (a) DATA REVIEW AND COLLECTION- The Comptroller General of the United States shall--

      (1) conduct a review of existing Federal and non-Federal studies and data regarding the cost to farmers, ranchers, and foresters of complying with existing or proposed Federal regulations directly affecting farmers, ranchers, and foresters; and

      (2) as necessary, obtain and analyze new data concerning the costs to farmers, ranchers, and foresters of complying with Federal regulations proposed as of June 30, 2000, directly affecting farmers, ranchers, and foresters.

    (b) USE OF DATA- Using the studies and data reviewed and collected under subsection (a), the Comptroller General shall--

      (1) assess the overall costs to farmers, ranchers, and foresters of complying with existing and proposed Federal regulations directly affecting farmers, ranchers, and foresters; and

      (2) identify and recommend reasonable alternatives to those regulations that will achieve the objectives of the regulations at less cost to farmers, ranchers, and foresters.

    (c) SUBMISSION OF RESULTS- Not later than June 30, 2001, the Comptroller General shall submit to the Secretary of Agriculture, the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Committee on Agriculture of the House of Representatives the results of the assessment conducted under subsection (b)(1) and the recommendations prepared under subsection (b)(2).

SEC. 203. RESPONSE OF SECRETARY OF AGRICULTURE.

    Not later than September 30, 2001, the Secretary of Agriculture shall submit to the Committee on Agriculture, Nutrition, and Forestry of the Senate, and the Committee on Agriculture of the House of Representatives a report responding to the recommendations of the Comptroller General under section 202 regarding reasonable alternatives that could achieve the objectives of Federal regulations at less cost to farmers, ranchers, and foresters.

TITLE III--EXTENSION OF TRADE AUTHORITIES PROCEDURES FOR RECIPROCAL TRADE AGREEMENTS

SEC. 301. SHORT TITLE.

    This title may be cited as the ‘Reciprocal Trade Agreement Authorities Act of 2001’.

SEC. 302. TRADE NEGOTIATING OBJECTIVES.

    (a) OVERALL TRADE NEGOTIATING OBJECTIVES- The overall trade negotiating objectives of the United States for agreements subject to the provisions of section 303 are--

      (1) to obtain more open, equitable, and reciprocal market access;

      (2) to obtain the reduction or elimination of barriers and distortions that are directly related to trade and that decrease market opportunities for United States exports or otherwise distort United States trade;

      (3) to further strengthen the system of international trading disciplines and procedures, including dispute settlement; and

      (4) to foster economic growth, raise living standards, and promote full employment in the United States and to enhance the global economy.

    (b) PRINCIPAL TRADE NEGOTIATING OBJECTIVES-

      (1) TRADE BARRIERS AND DISTORTIONS- The principal negotiating objectives of the United States regarding trade barriers and other trade distortions are--

        (A) to expand competitive market opportunities for United States exports and to obtain fairer and more open conditions of trade by reducing or eliminating tariff and nontariff barriers and policies and practices of foreign governments directly related to trade that decrease market opportunities for United States exports or otherwise distort United States trade; and

        (B) to obtain reciprocal tariff and nontariff barrier elimination agreements, with particular attention to those tariff categories covered in section 111(b) of the Uruguay Round Agreements Act (19 U.S.C. 3521(b)).

      (2) TRADE IN SERVICES- The principal negotiating objective of the United States regarding trade in services is to reduce or eliminate barriers to international trade in services, including regulatory and other barriers that deny national treatment or unreasonably restrict the establishment or operations of service suppliers.

      (3) FOREIGN INVESTMENT- The principal negotiating objective of the United States regarding foreign investment is to reduce or eliminate artificial or trade-distorting barriers to trade-related foreign investment by--

        (A) reducing or eliminating exceptions to the principle of national treatment;

        (B) freeing the transfer of funds relating to investments;

        (C) reducing or eliminating performance requirements and other unreasonable barriers to the establishment and operation of investments;

        (D) seeking to establish standards for expropriation and compensation for expropriation, consistent with United States legal principles and practice; and

        (E) providing meaningful procedures for resolving investment disputes.

      (4) INTELLECTUAL PROPERTY- The principal negotiating objectives of the United States regarding trade-related intellectual property are--

        (A) to further promote adequate and effective protection of intellectual property rights, including through--

          (i)(I) ensuring accelerated and full implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)), particularly with respect to United States industries whose products are subject to the lengthiest transition periods for full compliance by developing countries with that Agreement, and

          (II) ensuring that the provisions of any multilateral or bilateral trade agreement entered into by the United States provide protection at least as strong as the protection afforded by chapter 17 of the North American Free Trade Agreement and the annexes thereto;

          (ii) providing strong protection for new and emerging technologies and new methods of transmitting and distributing products embodying intellectual property;

          (iii) preventing or eliminating discrimination with respect to matters affecting the availability, acquisition, scope, maintenance, use, and enforcement of intellectual property rights; and

          (iv) providing strong enforcement of intellectual property rights, including through accessible, expeditious, and effective civil, administrative, and criminal enforcement mechanisms; and

        (B) to secure fair, equitable, and nondiscriminatory market access opportunities for United States persons that rely upon intellectual property protection.

      (5) TRANSPARENCY- The principal negotiating objective of the United States with respect to transparency is to obtain broader application of the principle of transparency through--

        (A) increased and more timely public access to information regarding trade issues and the activities of international trade institutions; and

        (B) increased openness of dispute settlement proceedings, including under the World Trade Organization.

      (6) RECIPROCAL TRADE IN AGRICULTURE- The principal negotiating objective of the United States with respect to agriculture is to obtain competitive opportunities for United States exports in foreign markets substantially equivalent to the competitive opportunities afforded foreign exports in United States markets and to achieve fairer and more open conditions of trade in bulk and value-added commodities by--

        (A) reducing or eliminating, by a date certain, tariffs or other charges that decrease market opportunities for United States exports--

          (i) giving priority to those products that are subject to significantly higher tariffs or subsidy regimes of major producing countries; and

          (ii) providing reasonable adjustment periods for United States import-sensitive products, in close consultation with the Congress on such products before initiating tariff reduction negotiations;

        (B) reducing or eliminating subsidies that decrease market opportunities for United States exports or unfairly distort agriculture markets to the detriment of the United States;

        (C) developing, strengthening, and clarifying rules and effective dispute settlement mechanisms to eliminate practices that unfairly decrease United States market access opportunities or distort agricultural markets to the detriment of the United States, including--

          (i) unfair or trade-distorting activities of export state trading enterprises and other administrative mechanisms, with emphasis on requiring price transparency in the operation of export state trading enterprises and such other mechanisms;

          (ii) unjustified trade restrictions or commercial requirements affecting new technologies, including biotechnology;

          (iii) unjustified sanitary or phytosanitary restrictions, including those not based on scientific principles in contravention of the Uruguay Round Agreements;

          (iv) other unjustified technical barriers to trade; and

          (v) restrictive rules in the administration of tariff rate quotas;

        (D) improving import relief mechanisms to recognize the unique characteristics of perishable agriculture;

        (E) taking into account whether a party to the negotiations has failed to adhere to the provisions of already existing trade agreements with the United States or has circumvented obligations under those agreements;

        (F) taking into account whether a product is subject to market distortions by reason of a failure of a major producing country to adhere to the provisions of already existing trade agreements with the United States or by the circumvention by that country of its obligations under those agreements; and

        (G) otherwise ensuring that countries that accede to the World Trade Organization have made meaningful market liberalization commitments in agriculture.

      (7) LABOR, THE ENVIRONMENT, AND OTHER MATTERS- The principal negotiating objective of the United States regarding labor, the environment, and other matters is to address the following aspects of foreign government policies and practices regarding labor, the environment, and other matters that are directly related to trade:

        (A) To ensure that foreign labor, environmental, health, or safety policies and practices do not arbitrarily or unjustifiably discriminate or serve as disguised barriers to trade.

        (B) To ensure that foreign governments do not derogate from or waive existing domestic environmental, health, safety, or labor measures, including measures that deter exploitative child labor, as an encouragement to gain competitive advantage in international trade or investment. Nothing in this subparagraph is intended to address changes to a country’s laws that are consistent with sound macroeconomic development.

      (8) WTO EXTENDED NEGOTIATIONS- The principal negotiating objectives of the United States regarding trade in financial services are those set forth in section 135(a) of the Uruguay Round Agreements Act (19 U.S.C. 3555(a)), regarding trade in civil aircraft are those set forth in section 135(c) of that Act, and regarding rules of origin are the conclusion of an agreement described in section 132 of that Act (19 U.S.C. 3552).

    (c) INTERNATIONAL ECONOMIC POLICY OBJECTIVES-

      (1) IN GENERAL- The President should take into account the relationship between trade agreements and other important priorities of the United States and seek to ensure that the trade agreements entered into by the United States complement and reinforce other policy goals. The United States priorities in this area include--

        (A) seeking to ensure that trade and environmental policies are mutually supportive;

        (B) seeking to protect and preserve the environment and enhance the international means for doing so, while optimizing the use of the world’s resources;

        (C) promoting respect for worker rights and the rights of children and an understanding of the relationship between trade and worker rights, particularly by working with the International Labor Organization to encourage the observance and enforcement of core labor standards, including the prohibition on exploitative child labor; and

        (D) supplementing and strengthening standards for protection of intellectual property under conventions administered by international organizations other than the World Trade Organization, expanding these conventions to cover new and emerging technologies, and eliminating discrimination and unreasonable exceptions or preconditions to such protection.

      (2) APPLICABILITY OF TRADE AUTHORITIES PROCEDURES- Nothing in this subsection shall be construed to authorize the use of the trade authorities procedures described in section 303 to modify United States law.

    (d) GUIDANCE FOR NEGOTIATORS-

      (1) DOMESTIC OBJECTIVES- In pursuing the negotiating objectives described in subsection (b), the negotiators on behalf of the United States shall take into account United States domestic objectives, including the protection of health and safety, essential security, environmental, consumer, and employment opportunity interests, and the law and regulations related thereto.

      (2) CONSULTATIONS WITH CONGRESSIONAL ADVISERS AND ENFORCEMENT OF THE TRADE LAWS- In the course of negotiations conducted under this title, the United States Trade Representative shall--

        (A) consult closely and on a timely basis with, and keep fully apprised of the negotiations, the congressional advisers on trade policy and negotiations appointed under section 161 of the Trade Act of 1974; and

        (B) preserve the ability of the United States to enforce rigorously its trade laws, including the antidumping and countervailing duty laws, and avoid agreements which lessen the effectiveness of domestic and international disciplines on unfair trade, especially dumping and subsidies, in order to ensure that United States workers, agricultural producers, and firms can compete fully on fair terms and enjoy the benefits of reciprocal trade concessions.

    (e) ADHERENCE TO OBLIGATIONS UNDER URUGUAY ROUND AGREEMENTS- In determining whether to enter into negotiations with a particular country, the President shall take into account the extent to which that country has implemented, or has accelerated the implementation of, its obligations under the Uruguay Round Agreements.

SEC. 303. TRADE AGREEMENTS AUTHORITY.

    (a) AGREEMENTS REGARDING TARIFF BARRIERS-

      (1) IN GENERAL- Whenever the President determines that one or more existing duties or other import restrictions of any foreign country or the United States are unduly burdening and restricting the foreign trade of the United States and that the purposes, policies, and objectives of this title will be promoted thereby, the President--

        (A) may enter into trade agreements with foreign countries before--

          (i) October 1, 2003, or

          (ii) October 1, 2007, if trade authorities procedures are extended under subsection (c), and

        (B) may, subject to paragraphs (2) and (3), proclaim--

          (i) such modification or continuance of any existing duty,

          (ii) such continuance of existing duty-free or excise treatment, or

          (iii) such additional duties,

        as the President determines to be required or appropriate to carry out any such trade agreement. The President shall notify the Congress of the President’s intention to enter into an agreement under this subsection.

      (2) LIMITATIONS- No proclamation may be made under paragraph (1) that--

        (A) reduces any rate of duty (other than a rate of duty that does not exceed 5 percent ad valorem on the date of the enactment of this Act) to a rate of duty which is less than 50 percent of the rate of such duty that applies on such date of enactment;

        (B) reduces the rate of duty on an article to take effect on a date that is more than 10 years after the first reduction that is proclaimed to carry out a trade agreement with respect to such article; or

        (C) increases any rate of duty above the rate that applied on January 1, 2001.

      (3) AGGREGATE REDUCTION; EXEMPTION FROM STAGING-

        (A) AGGREGATE REDUCTION- Except as provided in subparagraph (B), the aggregate reduction in the rate of duty on any article which is in effect on any day pursuant to a trade agreement entered into under paragraph (1) shall not exceed the aggregate reduction which would have been in effect on such day if--

          (i) a reduction of 3 percent ad valorem or a reduction of one-tenth of the total reduction, whichever is greater, had taken effect on the effective date of the first reduction proclaimed under paragraph (1) to carry out such agreement with respect to such article; and

          (ii) a reduction equal to the amount applicable under clause (i) had taken effect at 1-year intervals after the effective date of such first reduction.

        (B) EXEMPTION FROM STAGING- No staging is required under subparagraph (A) with respect to a duty reduction that is proclaimed under paragraph (1) for an article of a kind that is not produced in the United States. The United States International Trade Commission shall advise the President of the identity of articles that may be exempted from staging under this subparagraph.

      (4) ROUNDING- If the President determines that such action will simplify the computation of reductions under paragraph (3), the President may round an annual reduction by an amount equal to the lesser of--

        (A) the difference between the reduction without regard to this paragraph and the next lower whole number; or

        (B) one-half of 1 percent ad valorem.

      (5) OTHER LIMITATIONS- A rate of duty reduction that may not be proclaimed by reason of paragraph (2) may take effect only if a provision authorizing such reduction is included within an implementing bill provided for under section 305 and that bill is enacted into law.

      (6) OTHER TARIFF MODIFICATIONS- Notwithstanding paragraphs (1)(B) and (2) through (5), and subject to the consultation and layover requirements of section 115 of the Uruguay Round Agreements Act, the President may proclaim the modification of any duty or staged rate reduction of any duty set forth in Schedule XX, as defined in section 2(5) of that Act, if the United States agrees to such modification or staged rate reduction in a negotiation for the reciprocal elimination or harmonization of duties under the auspices of the World Trade Organization or as part of an interim agreement leading to the formation of a regional free-trade area.

      (7) AUTHORITY UNDER URUGUAY ROUND AGREEMENTS ACT NOT AFFECTED- Nothing in this subsection shall limit the authority provided to the President under section 111(b) of the Uruguay Round Agreements Act (19 U.S.C. 3521(b)).

    (b) AGREEMENTS REGARDING TARIFF AND NONTARIFF BARRIERS-

      (1) IN GENERAL- (A) Whenever the President determines that--

        (i) one or more existing duties or any other import restriction of any foreign country or the United States or any other barrier to, or other distortion of, international trade unduly burdens or restricts the foreign trade of the United States or adversely affects the United States economy, or

        (ii) the imposition of any such barrier or distortion is likely to result in such a burden, restriction, or effect,

      and that the purposes, policies, and objectives of this title will be promoted thereby, the President may enter into a trade agreement described in subparagraph (B) during the period described in subparagraph (C).

      (B) The President may enter into a trade agreement under subparagraph (A) with foreign countries providing for--

        (i) the reduction or elimination of a duty, restriction, barrier, or other distortion described in subparagraph (A), or

        (ii) the prohibition of, or limitation on the imposition of, such barrier or other distortion.

      (C) The President may enter into a trade agreement under this paragraph before--

        (i) October 1, 2003, or

        (ii) October 1, 2007, if trade authorities procedures are extended under subsection (c).

      (2) CONDITIONS- A trade agreement may be entered into under this subsection only if such agreement makes progress in meeting the applicable objectives described in section 302 and the President satisfies the conditions set forth in section 304.

      (3) BILLS QUALIFYING FOR TRADE AUTHORITIES PROCEDURES- The provisions of section 151 of the Trade Act of 1974 (in this title referred to as ‘trade authorities procedures’) apply to a bill of either House of Congress consisting only of--

        (A) a provision approving a trade agreement entered into under this subsection and approving the statement of administrative action, if any, proposed to implement such trade agreement,

        (B) provisions directly related to the principal trade negotiating objectives set forth in section 302(b) achieved in such trade agreement, if those provisions are necessary for the operation or implementation of United States rights or obligations under such trade agreement,

        (C) provisions that define and clarify, or provisions that are related to, the operation or effect of the provisions of the trade agreement,

        (D) provisions to provide adjustment assistance to workers and firms adversely affected by trade, and

        (E) provisions necessary for purposes of complying with section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985 in implementing the trade agreement,

      to the same extent as such section 151 applies to implementing bills under that section. A bill to which this subparagraph applies shall hereafter in this title be referred to as an ‘implementing bill’.

    (c) EXTENSION DISAPPROVAL PROCESS FOR CONGRESSIONAL TRADE AUTHORITIES PROCEDURES-

      (1) IN GENERAL- Except as provided in section 305(b)--

        (A) the trade authorities procedures apply to implementing bills submitted with respect to trade agreements entered into under subsection (b) before October 1, 2003; and

        (B) the trade authorities procedures shall be extended to implementing bills submitted with respect to trade agreements entered into under subsection (b) after September 30, 2003, and before October 1, 2007, if (and only if)--

          (i) the President requests such extension under paragraph (2); and

          (ii) neither House of the Congress adopts an extension disapproval resolution under paragraph (5) before October 1, 2003.

      (2) REPORT TO CONGRESS BY THE PRESIDENT- If the President is of the opinion that the trade authorities procedures should be extended to implementing bills described in paragraph (1)(B), the President shall submit to the Congress, not later than July 1, 2003, a written report that contains a request for such extension, together with--

        (A) a description of all trade agreements that have been negotiated under subsection (b) and the anticipated schedule for submitting such agreements to the Congress for approval;

        (B) a description of the progress that has been made in negotiations to achieve the purposes, policies, and objectives of this title, and a statement that such progress justifies the continuation of negotiations; and

        (C) a statement of the reasons why the extension is needed to complete the negotiations.

      (3) REPORT TO CONGRESS BY THE ADVISORY COMMITTEE- The President shall promptly inform the Advisory Committee for Trade Policy and Negotiations established under section 135 of the Trade Act of 1974 (19 U.S.C. 2155) of the President’s decision to submit a report to the Congress under paragraph (2). The Advisory Committee shall submit to the Congress as soon as practicable, but not later than August 1, 2003, a written report that contains--

        (A) its views regarding the progress that has been made in negotiations to achieve the purposes, policies, and objectives of this title; and

        (B) a statement of its views, and the reasons therefor, regarding whether the extension requested under paragraph (2) should be approved or disapproved.

      (4) REPORTS MAY BE CLASSIFIED- The reports submitted to the Congress under paragraphs (2) and (3), or any portion of such reports, may be classified to the extent the President determines appropriate.

      (5) EXTENSION DISAPPROVAL RESOLUTIONS- (A) For purposes of paragraph (1), the term ‘extension disapproval resolution’ means a resolution of either House of the Congress, the sole matter after the resolving clause of which is as follows: ‘That the XX disapproves the request of the President for the extension, under section 303(c)(1)(B)(i) of the Reciprocal Trade Agreement Authorities Act of 2001, of the provisions of section 151 of the Trade Act of 1974 to any implementing bill submitted with respect to any trade agreement entered into under section 303(b) of the Reciprocal Trade Agreement Authorities Act of 2001 after September 30, 2003.’, with the blank space being filled with the name of the resolving House of the Congress.

      (B) Extension disapproval resolutions--

        (i) may be introduced in either House of the Congress by any member of such House; and

        (ii) shall be referred, in the House of Representatives, to the Committee on Ways and Means and, in addition, to the Committee on Rules.

      (C) The provisions of sections 152(d) and (e) of the Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the floor consideration of certain resolutions in the House and Senate) apply to extension disapproval resolutions.

      (D) It is not in order for--

        (i) the Senate to consider any extension disapproval resolution not

reported by the Committee on Finance;

        (ii) the House of Representatives to consider any extension disapproval resolution not reported by the Committee on Ways and Means and, in addition, by the Committee on Rules; or

        (iii) either House of the Congress to consider an extension disapproval resolution after September 30, 2003.

SEC. 304. CONSULTATIONS.

    (a) NOTICE AND CONSULTATION BEFORE NEGOTIATION-

      (1) IN GENERAL- The President, with respect to any agreement that is subject to the provisions of section 303(b), shall--

        (A) provide, at least 90 calendar days before initiating negotiations, written notice to the Congress of the President’s intention to enter into the negotiations and set forth therein the date the President intends to initiate such negotiations, the specific United States objectives for the negotiations, and whether the President intends to seek an agreement, or changes to an existing agreement; and

        (B) before and after submission of the notice, consult regarding the negotiations with the Committee on Finance of the Senate and the

Committee on Ways and Means of the House of Representatives and such other committees of the House and Senate as the President deems appropriate.

      (2) CONSULTATIONS REGARDING NEGOTIATIONS ON CERTAIN OBJECTIVES-

        (A) CONSULTATION- In addition to the requirements set forth in paragraph (1), before initiating negotiations with respect to a trade agreement subject to section 303(b) where the subject matter of such negotiations is directly related to the principal trade negotiating objectives set forth in section 302(b)(1) or section 302(b)(7), the President shall consult with the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate and with the appropriate advisory groups established under section 135 of the Trade Act of 1974 with respect to such negotiations.

        (B) SCOPE- The consultations described in subparagraph (A) shall concern the manner in which the negotiation will address the objective of reducing or eliminating a specific tariff or nontariff barrier or foreign government policy or practice directly related to trade that decreases market opportunities for United States exports or otherwise distorts United States trade.

      (3) NEGOTIATIONS REGARDING AGRICULTURE- Before initiating negotiations the subject matter of which is directly related to the subject matter under section 302(b)(6)(A) with any country, the President shall assess whether United States tariffs on agriculture products that were bound under the Uruguay Round Agreements are lower than the tariffs bound by that country. In addition, the President shall consider whether the tariff levels bound and applied throughout the world with respect to imports from the United States are higher than United States tariffs and whether the negotiation provides an opportunity to address any such disparity. The President shall consult with the Committee on Ways and Means and the Committee on Agriculture of the House of Representatives and the Committee on Finance and the Committee on Agriculture, Nutrition, and Forestry of the Senate concerning the results of the assessment, whether it is appropriate for the United States to agree to further tariff reductions based on the conclusions reached in the assessment, and how all applicable negotiating objectives will be met.

    (b) CONSULTATION WITH CONGRESS BEFORE AGREEMENTS ENTERED INTO-

      (1) CONSULTATION- Before entering into any trade agreement under section 303(b), the President shall consult with--

        (A) the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate; and

        (B) each other committee of the House and the Senate, and each joint committee of the Congress, which has jurisdiction over legislation involving subject matters which would be affected by the trade agreement.

      (2) SCOPE- The consultation described in paragraph (1) shall include consultation with respect to--

        (A) the nature of the agreement;

        (B) how and to what extent the agreement will achieve the applicable purposes, policies, and objectives of this title; and

        (C) the implementation of the agreement under section 305, including the general effect of the agreement on existing laws.

    (c) ADVISORY COMMITTEE REPORTS- The report required under section 135(e)(1) of the Trade Act of 1974 regarding any trade agreement entered into under section 303(a) or (b) of this Act shall be provided to the President, the Congress, and the United States Trade Representative not later than 30 days after the date on which the President notifies the Congress under section 303(a)(1) or 305(a)(1)(A) of the President’s intention to enter into the agreement.

SEC. 305. IMPLEMENTATION OF TRADE AGREEMENTS.

    (a) IN GENERAL-

      (1) NOTIFICATION AND SUBMISSION- Any agreement entered into under section 303(b) shall enter into force with respect to the United States if (and only if)--

        (A) the President, at least 90 calendar days before the day on which the President enters into the trade agreement, notifies the House of Representatives and the Senate of the President’s intention to enter into the agreement, and promptly thereafter publishes notice of such intention in the Federal Register;

        (B) within 60 days after entering into the agreement, the President submits to the Congress a description of those changes to existing laws that the President considers would be required in order to bring the United States into compliance with the agreement;

        (C) after entering into the agreement, the President submits a copy of the final legal text of the agreement, together with--

          (i) a draft of an implementing bill described in section 303(b)(3);

          (ii) a statement of any administrative action proposed to implement the trade agreement; and

          (iii) the supporting information described in paragraph (2); and

        (D) the implementing bill is enacted into law.

      (2) SUPPORTING INFORMATION- The supporting information required under paragraph (1)(C)(iii) consists of--

        (A) an explanation as to how the implementing bill and proposed administrative action will change or affect existing law; and

        (B) a statement--

          (i) asserting that the agreement makes progress in achieving the applicable

purposes, policies, and objectives of this title;

          (ii) setting forth the reasons of the President regarding--

            (I) how and to what extent the agreement makes progress in achieving the applicable purposes, policies, and objectives referred to in clause (i);

            (II) whether and how the agreement changes provisions of an agreement previously negotiated;

            (III) how the agreement serves the interests of United States commerce; and

            (IV) how the implementing bill meets the standards set forth in section 303(b)(3).

      (3) RECIPROCAL BENEFITS- In order to ensure that a foreign country that is not a party to a trade agreement entered into under section 303(b) does not receive benefits under the agreement unless the country is also subject to the obligations under the agreement, the implementing bill submitted with respect to the agreement shall provide that the benefits and obligations under the agreement apply only to the parties to the agreement, if such application is consistent with the terms of the agreement. The implementing bill may also provide that the benefits and obligations under the agreement do not apply uniformly to all parties to the agreement, if such application is consistent with the terms of the agreement.

    (b) LIMITATIONS ON TRADE AUTHORITIES PROCEDURES-

      (1) FOR LACK OF CONSULTATIONS-

        (A) IN GENERAL- The trade authorities procedures shall not apply to any implementing bill submitted with respect to a trade agreement entered into under section 303(b) if during the 60-day period beginning on the date that one House of Congress agrees to a procedural disapproval resolution for lack of notice or consultations with respect to that trade agreement, the other House separately agrees to a procedural disapproval resolution with respect to that agreement.

        (B) PROCEDURAL DISAPPROVAL RESOLUTION- For purposes of this paragraph, the term ‘procedural disapproval resolution’ means a resolution of either House of Congress, the sole matter after the resolving clause of which is as follows: ‘That the President has failed or refused to notify or consult (as the case may be) with Congress in accordance with section 304 or 305 of the Reciprocal Trade Agreement Authorities Act of 2001 on negotiations with respect to, or entering into, a trade agreement to which section 303(b) of that Act applies and, therefore, the provisions of section 151 of the Trade Act of 1974 shall not apply to any implementing bill submitted with respect to that trade agreement.’.

      (2) PROCEDURES FOR CONSIDERING RESOLUTIONS- (A) Procedural disapproval resolutions--

        (i) in the House of Representatives--

          (I) shall be introduced by the chairman or ranking minority member of the Committee on Ways and Means or the chairman or ranking minority member of the Committee on Rules;

          (II) shall be referred to the Committee on Ways and Means and, in addition, to the Committee on Rules; and

          (III) may not be amended by either Committee; and

        (ii) in the Senate shall be original resolutions of the Committee on Finance.

      (B) The provisions of section 152(d) and (e) of the Trade Act of 1974 (19 U.S.C. 2192(d) and (e)) (relating to the floor consideration of certain resolutions in the House and Senate) apply to procedural disapproval resolutions.

      (C) It is not in order for the House of Representatives to consider any procedural disapproval resolution not reported by the Committee on Ways and Means and, in addition, by the Committee on Rules.

    (c) RULES OF HOUSE OF REPRESENTATIVES AND SENATE- Subsection (b) of this section and section 103(c) are enacted by the Congress--

      (1) as an exercise of the rulemaking power of the House of Representatives and the Senate, respectively, and as such are deemed a part of the rules of each House, respectively, and such procedures supersede other rules only to the extent that they are inconsistent with such other rules; and

      (2) with the full recognition of the constitutional right of either House to change the rules (so far as relating to the procedures of that House) at any time, in the same manner, and to the same extent as any other rule of that House.

SEC. 306. TREATMENT OF CERTAIN TRADE AGREEMENTS.

    (a) CERTAIN AGREEMENTS- Notwithstanding section 303(b)(2), if an agreement to which section 303(b) applies--

      (1) is entered into under the auspices of the World Trade Organization regarding trade in information technology products,

      (2) is entered into under the auspices of the World Trade Organization regarding extended negotiations on financial services as described in section 135(a) of the Uruguay Round Agreements Act (19 U.S.C. 3555(a)),

      (3) is entered into under the auspices of the World Trade Organization regarding the rules of origin work program described in Article 9 of the Agreement on Rules of Origin referred to in section 101(d)(10) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(10)), or

      (4) is entered into with Chile,

    and results from negotiations that were commenced before the date of the enactment of this Act, subsection (b) shall apply.

    (b) TREATMENT OF AGREEMENTS- In the case of any agreement to which subsection (a) applies--

      (1) the applicability of the trade authorities procedures to implementing bills shall be determined without regard to the requirements of section 304(a), and any procedural disapproval resolution under section 305(b)(1)(B) shall not be in order on the basis of a failure or refusal to comply with the provisions of section 304(a); and

      (2) the President shall consult regarding the negotiations described in subsection (a) with the committees described in section 304(a)(1)(B) as soon as feasible after the enactment of this Act.

SEC. 307. CONFORMING AMENDMENTS.

    (a) IN GENERAL- Title I of the Trade Act of 1974 (19 U.S.C. 2111 et seq.) is amended as follows:

      (1) IMPLEMENTING BILL-

        (A) Section 151(b)(1) (19 U.S.C. 2191(b)(1)) is amended by striking ‘section 1103(a)(1) of the Omnibus Trade and Competitiveness Act of 1988, or section 282 of the Uruguay Round Agreements Act’ and inserting ‘section 282 of the Uruguay Round Agreements Act, or section 305(a)(1) of the Reciprocal Trade Agreement Authorities Act of 2001’.

        (B) Section 151(c)(1) (19 U.S.C. 2191(c)(1)) is amended by striking ‘or section 282 of the Uruguay Round Agreements Act’ and inserting ‘, section 282 of the Uruguay Round Agreements Act, or section 305(a)(1) of the Reciprocal Trade Agreement Authorities Act of 2001’.

      (2) ADVICE FROM INTERNATIONAL TRADE COMMISSION- Section 131 (19 U.S.C. 2151) is amended--

        (A) in subsection (a)--

          (i) in paragraph (1), by striking ‘section 123 of this Act or section 1102 (a) or (c) of the Omnibus Trade and Competitiveness Act of 1988,’ and inserting ‘section 123 of this Act or section 303(a) or (b) of the Reciprocal Trade Agreement Authorities Act of 2001,’; and

          (ii) in paragraph (2), by striking ‘section 1102 (b) or (c) of the Omnibus Trade and Competitiveness Act of 1988’ and inserting ‘section 303(b) of the Reciprocal

Trade Agreement Authorities Act of 2001’;

        (B) in subsection (b), by striking ‘section 1102(a)(3)(A)’ and inserting ‘section 303(a)(3)(A) of the Reciprocal Trade Agreement Authorities Act of 2001’ before the end period; and

        (C) in subsection (c), by striking ‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988,’ and inserting ‘section 303 of the Reciprocal Trade Agreement Authorities Act of 2001,’.

      (3) HEARINGS AND ADVICE- Sections 132, 133(a), and 134(a) (19 U.S.C. 2152, 2153(a), and 2154(a)) are each amended by striking ‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988,’ each place it appears and inserting ‘section 303 of the Reciprocal Trade Agreement Authorities Act of 2001,’.

      (4) PREREQUISITES FOR OFFERS- Section 134(b) (19 U.S.C. 2154(b)) is amended by striking ‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988’ and inserting ‘section 303 of the Reciprocal Trade Agreement Authorities Act of 2001’.

      (5) ADVICE FROM PRIVATE AND PUBLIC SECTORS- Section 135 (19 U.S.C. 2155) is amended--

        (A) in subsection (a)(1)(A), by striking ‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988’ and inserting ‘section 303 of the Reciprocal Trade Agreement Authorities Act of 2001’;

        (B) in subsection (e)(1)--

          (i) by striking ‘section 1102 of the Omnibus Trade and Competitiveness Act of 1988’ each place it appears and inserting ‘section 303 of the Reciprocal Trade Agreement Authorities Act of 2001’; and

          (ii) by striking ‘section 1103(a)(1)(A) of such Act of 1988’ and inserting ‘section 305(a)(1)(A) of the Reciprocal Trade Agreement Authorities Act of 2001’; and

        (C) in subsection (e)(2), by striking ‘section 1101 of the Omnibus Trade and Competitiveness Act of 1988’ and inserting ‘section 302 of the Reciprocal Trade Agreement Authorities Act of 2001’.

      (6) TRANSMISSION OF AGREEMENTS TO CONGRESS- Section 162(a) (19 U.S.C. 2212(a)) is amended by striking ‘or under section 1102 of the Omnibus Trade and Competitiveness Act of 1988’ and inserting ‘or under section 303 of the Reciprocal Trade Agreement Authorities Act of 2001’.

    (b) APPLICATION OF CERTAIN PROVISIONS- For purposes of applying sections 125, 126, and 127 of the Trade Act of 1974 (19 U.S.C. 2135, 2136(a), and 2137)--

      (1) any trade agreement entered into under section 303 shall be treated as an agreement entered into under section 101 or 102, as appropriate, of the Trade Act of 1974 (19 U.S.C. 2111 or 2112); and

      (2) any proclamation or Executive order issued pursuant to a trade agreement entered into under section 303 shall be treated as a proclamation or Executive order issued pursuant to a trade agreement entered into under section 102 of the Trade Act of 1974.

SEC. 308. DEFINITIONS.

    In this title:

      (1) UNITED STATES PERSON- The term ‘United States person’ means--

        (A) a United States citizen;

        (B) a partnership, corporation, or other legal entity organized under the laws of the United States; and

        (C) a partnership, corporation, or other legal entity that is organized under the laws of a foreign country and is controlled by entities described in subparagraph (B) or United States citizens, or both.

      (2) URUGUAY ROUND AGREEMENTS- The term ‘Uruguay Round Agreements’ has the meaning given that term in section 2(7) of the Uruguay Round Agreements Act (19 U.S.C. 3501(7)).

      (3) WORLD TRADE ORGANIZATION- The term ‘World Trade Organization’ means the organization established pursuant to the WTO Agreement.

      (4) WTO AGREEMENT- The term ‘WTO Agreement’ means the Agreement Establishing the World Trade Organization entered into on April 15, 1994.

TITLE IV--AGRICULTURAL TRADE FREEDOM

SEC. 401. SHORT TITLE.

    This title may be cited as the ‘Agricultural Trade Freedom Act’.

SEC. 402. DEFINITIONS.

    In this title, the terms ‘agricultural commodity’ and ‘United States agricultural commodity’ have the meanings given the terms in section 102 of the Agricultural Trade Act of 1978 (7 U.S.C. 5602).

SEC. 403. AGRICULTURAL COMMODITIES, LIVESTOCK, AND PRODUCTS EXEMPT FROM UNILATERAL AGRICULTURAL SANCTIONS.

    Subtitle B of title IV of the Agricultural Trade Act of 1978 (7 U.S.C. 5661 et seq.) is amended by adding at the end the following:

‘SEC. 418. AGRICULTURAL COMMODITIES, LIVESTOCK, AND PRODUCTS EXEMPT FROM UNILATERAL AGRICULTURAL SANCTIONS.

    ‘(a) DEFINITIONS- In this section:

      ‘(1) CURRENT SANCTION- The term ‘current sanction’ means a unilateral agricultural sanction that is in effect on the date of enactment of the Agricultural Trade Freedom Act.

      ‘(2) NEW SANCTION- The term ‘new sanction’ means a unilateral agricultural sanction that becomes effective after the date of enactment of that Act.

      ‘(3) UNILATERAL AGRICULTURAL SANCTION- The term ‘unilateral agricultural sanction’ means any prohibition, restriction, or condition that is imposed on the export of an agricultural commodity to a foreign country or foreign entity and that is imposed by the United States for reasons of the national interest, except in a case in which the United States imposes the measure pursuant to a multilateral regime and the other members of that regime have agreed to impose substantially equivalent measures.

    ‘(b) EXEMPTION-

      ‘(1) IN GENERAL- Subject to paragraphs (2) and (3) and notwithstanding any other provision of law, agricultural commodities made available as a result of commercial sales shall be exempt from a unilateral agricultural sanction imposed by the United States on another country.

      ‘(2) EXCLUSIONS- Paragraph (1) shall not apply to agricultural commodities made available as a result of programs carried out under--

        ‘(A) the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1691 et seq.);

        ‘(B) section 416 of the Agricultural Act of 1949 (7 U.S.C. 1431);

        ‘(C) the Food for Progress Act of 1985 (7 U.S.C. 1736o);

        ‘(D) the Agricultural Trade Act of 1978 (7 U.S.C. 5601 et seq.); or

        ‘(E) section 153 of the Food Security Act of 1985 (15 U.S.C. 713a-14).

      ‘(3) DETERMINATION BY PRESIDENT- The President may include agricultural commodities made available as a result of the activities described in paragraph (1) in the unilateral agricultural sanction imposed on a foreign country or foreign entity if--

        ‘(A) a declaration of war by Congress is in effect with respect to the foreign country or foreign entity; or

        ‘(B)(i) the President determines that inclusion of the agricultural commodities is in the national interest;

        ‘(ii) the President submits the report required under subsection (d); and

        ‘(iii) Congress has not approved a joint resolution stating the disapproval of Congress of the report submitted under subsection (d).

      ‘(4) EFFECT ON AGRICULTURAL TRADE- Nothing in this subsection requires the imposition of a unilateral agricultural sanction with respect to an agricultural commodity, whether exported in connection with a commercial sale or a program described in paragraph (2).

    ‘(c) CURRENT SANCTIONS-

      ‘(1) IN GENERAL- Subject to paragraph (2), the exemption under subsection (b)(1) shall apply to a current sanction.

      ‘(2) PRESIDENTIAL REVIEW- Not later than 90 days after the date of enactment of the Agricultural Trade Freedom Act, the President shall review each current sanction to determine whether the exemption under subsection (b)(1) should apply to the current sanction.

      ‘(3) APPLICATION- The exemption under subsection (b)(1) shall apply to a current sanction beginning on the date that is 180 days after the date of enactment of the Agricultural Trade Freedom Act unless the President determines that the exemption should not apply to the current sanction for reasons of the national interest.

    ‘(d) REPORT-

      ‘(1) IN GENERAL- If the President determines under subsection (b)(3)(B)(i) or (c)(3) that the exemption should not apply to a unilateral agricultural sanction, the President shall submit a report to Congress not later than 15 days after the date of the determination.

      ‘(2) CONTENTS OF REPORT- The report shall contain--

        ‘(A) an explanation of--

          ‘(i) the economic activity that is proposed to be prohibited, restricted, or conditioned by the unilateral agricultural sanction; and

          ‘(ii) the national interest for which the exemption should not apply to the unilateral agricultural sanction; and

        ‘(B) an assessment by the Secretary--

          ‘(i) regarding export sales--

            ‘(I) in the case of a current sanction, whether markets in the sanctioned country or countries present a substantial trade opportunity for export sales of a United States agricultural commodity; or

            ‘(II) in the case of a new sanction, the extent to which any country or countries to be sanctioned or likely to be sanctioned are markets that accounted for, during the preceding calendar year, more than 3 percent of

export sales of a United States agricultural commodity;

          ‘(ii) regarding the effect on United States agricultural commodities--

            ‘(I) in the case of a current sanction, the potential for export sales of United States agricultural commodities in the sanctioned country or countries; and

            ‘(II) in the case of a new sanction, the likelihood that exports of United States agricultural commodities will be affected by the new sanction or by retaliation by any country to be sanctioned or likely to be sanctioned, including a description of specific United States agricultural commodities that are most likely to be affected;

          ‘(iii) regarding the income of agricultural producers--

            ‘(I) in the case of a current sanction, the potential for increasing the income of producers of the United States agricultural commodities involved; and

            ‘(II) in the case of a new sanction, the likely effect on incomes of producers of the agricultural commodities involved;

          ‘(iv) regarding displacement of United States suppliers--

            ‘(I) in the case of a current sanction, the potential for increased competition for United States suppliers of the agricultural commodity in countries that are not subject to the current sanction because of uncertainty about the reliability of the United States suppliers; and

            ‘(II) in the case of a new sanction, the extent to which the new sanction would permit foreign suppliers to replace United States suppliers; and

          ‘(v) regarding the reputation of United States agricultural producers as reliable suppliers--

            ‘(I) in the case of a current sanction, whether removing the sanction would improve the reputation of United States producers as reliable suppliers of agricultural commodities in general, and of specific agricultural commodities identified by the Secretary; and

            ‘(II) in the case of a new sanction, the likely effect of the proposed sanction on the reputation of United States producers as reliable suppliers of agricultural commodities in general, and of specific agricultural commodities identified by the Secretary.

    ‘(e) CONGRESSIONAL PRIORITY PROCEDURES-

      ‘(1) JOINT RESOLUTION- In this subsection, the term ‘joint resolution’ means only a joint resolution introduced within 10 session days of Congress after the date on which the report of the President under subsection (d) is received by Congress, the matter after the resolving clause of which is as follows: ‘That Congress disapproves the report of the President pursuant to section 418(d) of the Agricultural Trade Act of 1978, transmitted on XXXXXXX.’, with the blank completed with the appropriate date.

      ‘(2) REFERRAL OF REPORT- The report described in subsection (d) shall be referred to the appropriate committee or committees of the House of Representatives and to the appropriate committee or committees of the Senate.

      ‘(3) REFERRAL OF JOINT RESOLUTION-

        ‘(A) IN GENERAL- A joint resolution shall be referred to the committees in each House of Congress with jurisdiction.

        ‘(B) REPORTING DATE- A joint resolution referred to in subparagraph (A) may not be reported before the eighth session day of Congress after the introduction of the joint resolution.

      ‘(4) DISCHARGE OF COMMITTEE- If the committee to which is referred a joint resolution has not reported the joint resolution (or an identical joint resolution) at the end of 30 session days of Congress after the date of introduction of the joint resolution--

        ‘(A) the committee shall be discharged from further consideration of the joint resolution; and

        ‘(B) the joint resolution shall be placed on the appropriate calendar of the House concerned.

      ‘(5) FLOOR CONSIDERATION-

        ‘(A) MOTION TO PROCEED-

          ‘(i) IN GENERAL- When the committee to which a joint resolution is referred has reported, or when a committee is discharged under paragraph (4) from further consideration of, a joint resolution--

            ‘(I) it shall be at any time thereafter in order (even though a previous motion to the same effect has been disagreed to) for any member of the House concerned to move to proceed to the consideration of the joint resolution; and

            ‘(II) all points of order against the joint resolution (and against consideration of the joint resolution) are waived.

          ‘(ii) PRIVILEGE- The motion to proceed to the consideration of the joint resolution--

            ‘(I) shall be highly privileged in the House of Representatives and privileged in the Senate; and

            ‘(II) shall not be debatable.

          ‘(iii) AMENDMENTS AND MOTIONS NOT IN ORDER- The motion to proceed to the consideration of the joint resolution shall not be subject to--

            ‘(I) amendment;

            ‘(II) a motion to postpone; or

            ‘(III) a motion to proceed to the consideration of other business.

          ‘(iv) MOTION TO RECONSIDER NOT IN ORDER- A motion to reconsider the vote by which the motion is agreed to or disagreed to shall not be in order.

          ‘(v) BUSINESS UNTIL DISPOSITION- If a motion to proceed to the consideration of the joint resolution is agreed to, the joint resolution shall remain the unfinished business of the House concerned until disposed of.

        ‘(B) LIMITATIONS ON DEBATE-

          ‘(i) IN GENERAL- Debate on the joint resolution, and on all debatable motions and appeals in connection with the joint resolution, shall be limited to not more than 10 hours, which shall be divided equally between those favoring and those opposing the joint resolution.

          ‘(ii) FURTHER DEBATE LIMITATIONS- A motion to limit debate shall be in order and shall not be debatable.

          ‘(iii) AMENDMENTS AND MOTIONS NOT IN ORDER- An amendment to, a motion to postpone, a motion to proceed to the consideration of other business, a motion to recommit the joint resolution, or a motion to reconsider the vote by which the joint resolution is agreed to or disagreed to shall not be in order.

        ‘(C) VOTE ON FINAL PASSAGE- Immediately following the conclusion of the debate on a joint resolution, and a single quorum call at the conclusion of the debate if requested in accordance with the rules of the House concerned, the vote on final passage of the joint resolution shall occur.

        ‘(D) RULINGS OF THE CHAIR ON PROCEDURE- An appeal from a decision of the Chair relating to the application of the rules of the Senate or House of Representatives, as the case may be, to the procedure relating to a joint resolution shall be decided without debate.

      ‘(6) COORDINATION WITH ACTION BY OTHER HOUSE- If, before the passage by 1 House of a joint resolution of that House, that House receives from the other House a joint resolution, the following procedures shall apply:

        ‘(A) NO COMMITTEE REFERRAL- The joint resolution of the other House shall not be referred to a committee.

        ‘(B) FLOOR PROCEDURE- With respect to a joint resolution of the House receiving the joint resolution--

          ‘(i) the procedure in that House shall be the same as if no joint resolution had been received from the other House; but

          ‘(ii) the vote on final passage shall be on the joint resolution of the other House.

        ‘(C) DISPOSITION OF JOINT RESOLUTIONS OF RECEIVING HOUSE- On disposition of the joint resolution received from the other House, it shall no longer be in order to consider the joint resolution originated in the receiving House.

      ‘(7) PROCEDURES AFTER ACTION BY BOTH THE HOUSE AND SENATE- If a House receives a joint resolution from the other House after the receiving House has disposed of a joint resolution originated in that House, the action of the receiving House with regard to the disposition of the joint resolution originated in that House shall be deemed to be the action of the receiving House with regard to the joint resolution originated in the other House.

      ‘(8) RULEMAKING POWER- This subsection is enacted by Congress--

        ‘(A) as an exercise of the rulemaking power of the Senate and House of Representatives, respectively, and as such this subsection--

          ‘(i) is deemed to be a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of a joint resolution; and

          ‘(ii) supersedes other rules only to the extent that this subsection is inconsistent with those rules; and

        ‘(B) with full recognition of the constitutional right of either House to change the rules (so far as the rules relate to the procedure of that House) at any time, in the same manner and to the same extent as in the case of any other rule of that House.’.

SEC. 404. SALE OR BARTER OF FOOD ASSISTANCE.

    It is the sense of Congress that the amendments to section 203 of the Agricultural Trade Development and Assistance Act of 1954 (7 U.S.C. 1723) made by section 208 of the Federal Agriculture Improvement and Reform Act of 1996 (Public Law 104-127; 110 Stat. 954) were intended to allow the sale or barter of United States agricultural commodities in connection with United States food assistance only within the recipient country or countries adjacent to the recipient country, unless--

      (1) the sale or barter within the recipient country or adjacent countries is not practicable; and

      (2) the sale or barter within countries other than the recipient country or adjacent countries will not disrupt commercial markets for the agricultural commodity involved.