120 STAT. 347PUBLIC LAW 109–222—MAY 17, 2006
purposes of this subparagraph, interest shall include fac-toring income which is treated as income equivalent tointerest for purposes of paragraph (1)(E). The Secretaryshall prescribe such regulations as may be appropriateto prevent the abuse of the purposes of this paragraph.‘‘(B) A
.—Subparagraph (A) shall apply totaxable years of foreign corporations beginning afterDecember 31, 2005, and before January 1, 2009, and totaxable years of United States shareholders with or withinwhich such taxable years of foreign corporations end.’’.(2) E
.—The amendment made by this sub-section shall apply to taxable years of foreign corporationsbeginning after December 31, 2005, and to taxable years of United States shareholders with or within which such taxableyears of foreign corporations end.
TITLE II—OTHER PROVISIONS
SEC. 201. CLARIFICATION OF TAXATION OF CERTAIN SETTLEMENTFUNDS.
.—Subsection (g) of section 468B (relating toclarification of taxation of certain funds) is amended to read asfollows:‘‘(g) C
.—Except as provided in paragraph (2),nothing in any provision of law shall be construed as providingthat an escrow account, settlement fund, or similar fund isnot subject to current income tax. The Secretary shall prescriberegulations providing for the taxation of any such account orfund whether as a grantor trust or otherwise.‘‘(2) E
XEMPTION FROM TAX FOR CERTAIN SETTLEMENTFUNDS
.—An escrow account, settlement fund, or similar fundshall be treated as beneficially owned by the United Statesand shall be exempt from taxation under this subtitle if—‘‘(A) it is established pursuant to a consent decreeentered by a judge of a United States District Court,‘‘(B) it is created for the receipt of settlement paymentsas directed by a government entity for the sole purposeof resolving or satisfying one or more claims assertingliability under the Comprehensive EnvironmentalResponse, Compensation, and Liability Act of 1980,‘‘(C) the authority and control over the expenditureof funds therein (including the expenditure of contributionsthereto and any net earnings thereon) is with such govern-ment entity, and‘‘(D) upon termination, any remaining funds will bedisbursed to such government entity for use in accordancewith applicable law.For purposes of this paragraph, the term ‘government entity’means the United States, any State or political subdivisionthereof, the District of Columbia, any possession of the UnitedStates, and any agency or instrumentality of any of the fore-going.‘‘(3) T
.—Paragraph (2) shall not apply toaccounts and funds established after December 31, 2010.’’.
Regulations.26 USC 468B.26 USC 954 note.
VerDate 14-DEC-200419:41 May 23, 2006Jkt 049139PO 00222Frm 00003Fmt 6580Sfmt 6581E:\PUBLAW\PUBL222.109APPS24PsN: PUBL222