text: SEC.   . STANDING FOR CERTAIN TAXPAYERS WITH REGARD TO SALE OF NET 
                OPERATING LOSSES.
  
      (a) Subsection (c) of section 5021 of the Technical and 
  Miscellaneous Revenue Act of 1988 (Public Law 100-647) is amended to 
  read as follows:
      ``(c) Special Administrative Rules.--
              ``(1) Income included in native corporation return.--At the 
          joint election of a Native Corporation and a corporation 
          (referred to in this subsection (c) as the `buyer corporation') 
          with which the Native Corporation entered into a transaction 
          permitted under section 60(b)(5) of the Tax Reform Act of 1984 
          and section 1804(e)(4) of the Tax Reform Act of 1986 (referred 
          to in this subsection (c) as a `Native Corporation 
          transaction'), income assigned, transferred or otherwise made 
          available by the buyer corporation through the use of a 
          corporation (referred to in this subsection (c) as the `profit 
          subsidiary') by reason of such transaction for a period in 
          which the profit subsidiary qualified as a member of the 
          affiliated group of which the Native Corporation was the common 
          parent shall be included in the taxable income of the Native 
          Corporation affiliated group solely for purposes of section 
          6212 of the Internal Revenue Code--
                      ``(A) Election.--The election under this subsection 
                  (c) for the taxable year to which the election relates 
                  shall be made no later than 120 days after the date of 
                  enactment of this amendment. The election shall be 
                  irrevocable and shall be made by filing with the 
                  district director for the Anchorage district office of 
                  the Internal Revenue Service a written statement signed 
                  by responsible officers of the Native Corporation and 
                  the electing buyer corporation that--
                              ``(i) identifies the Native Corporation, 
                          the profit subsidiary, and the buyer 
                          corporation (and their taxpayer identification 
                          numbers) and states their agreement to make the 
                          election provided in this subsection (c);
                              ``(ii) states the amount of income 
                          assigned, transferred or otherwise made 
                          available to the profit subsidiary for the 
                          taxable year by reason of the Native 
                          Corporation transaction;
                              ``(iii) if profit subsidiaries related to a 
                          buyer corporation other than the electing buyer 
                          corporation were members of the affiliated 
                          group of which the Native Corporation was the 
                          common parent, describes the order and the 
                          amount of the losses and credits of the Native 
                          Corporation affiliated group that were used to 
                          offset the income of each profit subsidiary;
                              ``(iv) states the agreement of the buyer 
                          corporation to consent under section 6501(c)(4) 
                          of the Internal Revenue Code to extend the 
                          periods of limitations for assessment and 
                          collection solely with respect to the income of 
                          the profit subsidiary for the affected taxable 
                          period(s) to a date not less than 180 days 
                          after the date the tax liability for the 
                          taxable year in which the Native Corporation 
                          transaction occurred is finally determined;
                              ``(v) states the agreement of the Native 
                          Corporation to consent under section 6501(c)(4) 
                          of the Internal Revenue Code to extend the 
                          periods of limitations for assessment and 
                          collection solely with respect to the income of 
                          the profit subsidiary for the affected taxable 
                          period(s) to a date not less than 120 days 
                          after the date on which the Native Corporation 
                          makes the election under this subsection; and
                              ``(vi) the Native Corporation and the buyer 
                          corporation agree that the Service is 
                          authorized to make any refund of any 
                          overpayment that is determined to be due, 
                          jointly to the Native Corporation and the 
                          electing buyer corporation.
                  If a Native Corporation has engaged in multiple Native 
                  Corporation transactions, such election shall be 
                  independently made by each buyer corporation on 
                  separate written statements. A buyer corporation that 
                  elects under this provision must so elect for all 
                  Native Corporation transactions with the particular 
                  Native Corporation with whom the election is made for 
                  which the statue of limitations for assessment is open.
                      ``(B) Taxable rate.--Notwithstanding section 11 of 
                  the Internal Revenue Code, any income of the profit 
                  subsidiary that is subject to the election provided in 
                  this subsection (c) shall be taxed at the rate that 
                  such income would have been taxed if it had been 
                  included in the return of the buyer corporation for the 
                  taxable year from which such income was assigned, 
                  transferred or otherwise made available. Solely for 
                  purposes of issuing a notice under section 6212 of the 
                  Internal Revenue Code to a Native Corporation for a 
                  Native Corporation transaction for which an election 
                  has been made under this subsection (c), the tax may be 
                  computed by applying the maximum corporate rate under 
                  section 11 of the Internal Revenue Code.
              ``(2) Treatment of native corporation as common parent as 
          sole agent.--The common parent of an affiliated group which 
          includes a Native Corporation that elects under subsection 
          (c)(1) shall be the sole agent for the profit subsidiary for 
          purposes of the Native Corporation transaction for the period 
          of affiliation.
              ``(3) Collection of tax from buyer corporation.--For 
          purposes of this subsection, the amount of any tax, interest, 
          addition to tax, penalty or other amount attributable to the 
          income of the profit subsidiary shall be paid by and be 
          collectible from the profit subsidiary and the buyer 
          corporation for the taxable year for which income was assigned, 
          transferred or otherwise made available by the buyer 
          corporation in connection with the Native Corporation 
          transaction.
              ``(4) Payment of tax by native corporation.--If, after the 
          election provided in subsection (c)(1) is made, the Native 
          Corporation pays all or any part of the tax, interest, addition 
          to tax, penalty or other amount attributable to the income of 
          the profit subsidiary, such payment shall be deemed to be a 
          payment by the buyer corporation for the taxable year for which 
          such income would otherwise have been included in the buyer 
          corporation's return if the election provided in subsection 
          (c)(1) was not made--
                      ``(A) Filing of refund claim.--A Native Corporation 
                  that elects under subsection (c)(1) shall be treated as 
                  the taxpayer for purposes of sections 6402 and 6511 of 
                  the Internal Revenue Code with respect to all payments 
                  of tax, interest, additions to tax, penalties, or other 
                  amounts attributable to the income of the profit 
                  subsidiary and shall be entitled to file a claim for 
                  refund as the taxpayer with respect to any taxes, 
                  interest, additions to tax, penalties or other amounts 
                  attributable to the income of the profit subsidiary.
                      ``(B) Filing of refund suit.--A Native Corporation 
                  that elects under subsection (c)(1) shall be treated as 
                  the taxpayer for purposes of section 7422 of the 
                  Internal Revenue Code with respect to all payments of 
                  tax, interest, additions to tax, penalties, or other 
                  amounts attributable to the income of the profit 
                  subsidiary, and as the plaintiff for purposes of 
                  section 1402 of title 28, United States Code, and shall 
                  be entitled to file and maintain a proceeding in court 
                  as the taxpayer for the recovery of such amounts.
                      ``(C) Refund of overpayment.--In the event that an 
                  overpayment is determined to be due, whether by final 
                  administrative or judicial decision, with respect to a 
                  Native Corporation transaction (c)(1), the Native 
                  Corporation shall be treated as the person who made the 
                  overpayment within the meaning of section 6402(a) of 
                  the Internal Revenue Code. Notwithstanding any law or 
                  rule of law, including the preceding sentence, any 
                  refund of such overpayment may be made jointly to the 
                  Native Corporation and to the electing buyer 
                  corporation, as agreed to under paragraph (A)(v) of 
                  subsection (c)(1).
              ``(5) Participatory rights of electing buyer corporation.--
          Any buyer corporation that makes an election under subsection 
          (c)(1) shall have the right to--
                      ``(A) submit a written statement and participate 
                  with the Native Corporation in any administrative 
                  proceeding relating to any proposed adjustment 
                  regarding a Native Corporation transaction for which an 
                  election has been made; and
                      ``(B) file an amicus brief in any proceeding in a 
                  Federal court or the United States Tax Court that has 
                  been filed by the Native Corporation involving a 
                  proposed adjustment regarding such a Native Corporation 
                  transaction.
          All written notices or other reports issued by the Secretary or 
          his delegate with respect to such a Native Corporation 
          transaction shall be issued to the Native Corporation, and it 
          shall be the obligation of the Native Corporation to provide 
          copies thereof to the electing buyer corporation. Rules similar 
          to the rules of subparagraphs (B) and (C) of paragraph (7) 
          shall apply for purposes of this paragraph.
              ``(6) Final determination of issues.--
                      ``(A) All issues with respect to the Native 
                  Corporation transaction with respect to which an 
                  election is made under subsection (c)(1), including the 
                  applicability of any interest, addition to tax, penalty 
                  or other amount, shall be determined by administrative 
                  or judicial decision with respect to the consolidated 
                  return of the Native Corporation affiliated group.
                      ``(B) Upon such determination, any income of the 
                  profit subsidiary that is not offset in the Native 
                  Corporation transaction shall be reported on the buyer 
                  corporation's return as if it were originally reported 
                  thereon and subject to all adjustments, including net 
                  operating loss or other carrybacks, to which such 
                  income would otherwise be subject.
              ``(7) No effect on nonelecting corporations.--The absence 
          of an election by a Native Corporation and a buyer corporation 
          with respect to a Native Corporation transaction shall not 
          restrict the authority of the Secretary of the Treasury or his 
          delegate to settle or litigate with any nonelecting buyer 
          corporation with respect to any issue relating to such a 
          transaction--
                      ``(A) Rights of native corporation.--For any such 
                  Native Corporation transaction for which no election is 
                  made under subsection (c)(1), the Native Corporation 
                  shall have the right to submit a written statement and 
                  participate with the buyer corporation in any 
                  administrative proceeding relating to any proposed 
                  adjustment regarding such Native Corporation 
                  transaction; and to file an amicus brief in any 
                  proceeding in a Federal court or the United States Tax 
                  Court that has been filed by the non-electing buyer 
                  corporation involving a proposed adjustment regarding 
                  such Native Corporation transaction.
                      ``(B) Extension of statute of limitations.--
                  Subparagraph (A) shall not apply if the Secretary of 
                  the Treasury or his delegate determines that an 
                  extension of the statute of limitations is necessary to 
                  permit the participation described in subparagraph (A) 
                  and the taxpayer and the Secretary or his delegate have 
                  not agreed to such extension.
                      ``(C) Failures.--For purposes of the 1986 Code, any 
                  failure by the Secretary of the Treasury or his 
                  delegate to comply with the provisions of this 
                  subsection shall not affect the validity of the 
                  determination of the Internal Revenue Service of any 
                  adjustment of tax liability of any non-electing buyer 
                  corporation.
              ``(8) Effective date.--This provision shall be effective 
          for all taxable years for which the statute of limitations for 
          assessment with respect to an electing Native Corporation has 
          not expired prior to the date of enactment of this Act--
                      ``(A) Extension of statute of limitations.--Any 
                  Native Corporation for which the statue of limitations 
                  for assessment will expire within 120 days after the 
                  date of enactment of this section shall have the right 
                  upon request to extend such statute of limitations 
                  pursuant to section 6501(c)(4) of the Internal Revenue 
                  Code to a date not less than 120 days after the date of 
                  enactment of this section.
                      ``(B) Period for assessments.--If the statute of 
                  limitations for assessments with respect to an electing 
                  Native Corporation has not expired prior to the date of 
                  the enactment of this Act, such period shall not expire 
                  before the date 120 days after the date on which the 
                  Native Corporation makes the election under this 
                  subsection.''.
      (b) Section 5021 of the Technical and Miscellaneous Revenue Act of 
  1988 (Public Law 100-647) is amended by adding, after subsection (e), 
  new subsection (f) to read as follows:
      ``(f) Increase in Underpayment Rate.--For purposes of determining 
  the amount of interest payable under section 6601 of the Internal 
  Revenue Code on a tax underpayment attributable to a Native Corporation 
  transaction for which an election has been made under subsection (c) 
  hereof, the underpayment rate otherwise applicable under section 
  6621(a) (2) or (c) of the Internal Revenue Code of 1986 shall be 
  increased by 0.5 percentage points.''.
target: Amends the Technical and Miscellaneous Revenue Act of 1988 to permit Alaska Native Corporations to litigate the validity of the sale of their net operating losses to other corporate buyers as reported on their tax returns, if the buyers so agree.  Increases the interest on the underpayment rate for any underpayments resulting from such litigation.
feat_title: A bill to provide Alaska Native Corporations, through an election process, standing to contest the disallowance of certain tax losses by the Internal Revenue Service if the purchasers of the losses agree; and to offset any associated revenue losses by increasing the interest rate on certain related tax deficiencies.