Page:United States Statutes at Large Volume 111 Part 1.djvu/914

 Ill STAT. 890 PUBLIC LAW 105-34—AUG. 5, 1997 "(ii) TESTING PERIOD.— The term 'testing period' means the first 3 taxable years beginning after the startup period. " (D) PORTIONS OF BUSINESS MAY BE ENTERPRISE ZONE BUSINESS.— The term 'enterprise zone business' includes any trades or businesses which would qualify as an enterprise zone business (determined after the modifications of subparagraph (B)) if such trades or businesses were separately incorporated.", (b) MODIFICATIONS RELATING TO QUALIFIED ZONE PROPERTY.— Paragraph (2) of section 1394(b) (defining qualified zone property) is amended to read as follows: "(2) QUALIFIED ZONE PROPERTY.—The term 'qualified zone property' has the meaning given such term by section 1397C; except that— "(A) the references to empowerment zones shall be treated as including references to enterprise communities, and " (B) section 1397C(a)(2) shall be applied by substituting 'an amount equal to 15 percent of the adjusted basis' for 'an amount equal to the adjusted basis'.". 26 USC 1394 (c) EFFECTIVE DATE.—The amendments made by this section note. shall apply to obligations issued after the date of the enactment of this Act. SEC. 956. MODIFICATIONS TO ENTERPRISE ZONE BUSINESS DEFINI- TION FOR ALL EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES. (a) IN GENERAL. —Section 1397B (defining enterprise zone business) is amended— (1) by striking "80 percent" in subsections (b)(2) and (c)(1) and inserting "50 percent", (2) by striking "substantially all" each place it appears in subsections (b) and (c) and inserting "a substsintial portion", (3) by striking ", and exclusively related to," in subsections (b)(4) and (c)(3), (4) by adding at the end of subsection (d)(2) the following new flush sentence: "For purposes of subparagraph (B), the lessor of the property may rely on a lessee's certification that such lessee is an enterprise zone business.", (5) by striking "substantially all" in subsection (d)(3) and inserting "at least 50 percent", and (6) by adding at the end the following new subsection: "(f) TREATMENT OF BUSINESSES STRADDLING CENSUS TRACT LINES. —For purposes of this section, if— "(1) a business entity or proprietorship uses real property located within an empowerment zone, "(2) the business entity or proprietorship also uses real property located outside the empowerment zone, "(3) the amount of real property described in paragraph (1) is substantial compared to the amount of real property described in paragraph (2), and "(4) the real property described in paragraph (2) is contiguous to part or all of the real property described in paragraph (1),

�