[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2648 Introduced in Senate (IS)]
<DOC>
114th CONGRESS
2d Session
S. 2648
To assist entrepreneurs, support development of the creative economy,
and encourage international cultural exchange, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 8, 2016
Mr. Udall introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To assist entrepreneurs, support development of the creative economy,
and encourage international cultural exchange, and for other purposes.
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 ``Comprehensive
Resources for Entrepreneurs in the Arts to Transform the Economy Act of
2016'' or the ``CREATE Act of 2016''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
TITLE I--SUPPORT FOR ARTISTS AND ENTREPRENEURS
Sec. 101. Charitable contributions of certain items created by the
taxpayer.
Sec. 102. Microloan program expansion.
Sec. 103. SBA business loans for the creative economy.
Sec. 104. SBA technical assistance programs.
Sec. 105. Arts-focused economic development.
Sec. 106. Arts-focused rural development.
Sec. 107. Expedited adjudication of employer petitions for aliens of
extraordinary artistic ability.
Sec. 108. Disaster support for artists through FEMA.
TITLE II--SUPPORT FOR THE CREATIVE ECONOMY
Sec. 201. Modification of rules for charitable contributions of
fractional gifts.
Sec. 202. Capital gains tax rate relating to art.
TITLE III--CREATIVE COMMUNITY DEVELOPMENT
Sec. 301. Artist corps.
Sec. 302. Community development entities focused on the arts for
purposes of the new markets tax credit.
Sec. 303. Demonstration program on support of local programs that
promote creative and performance arts in
local economic planning.
Sec. 304. Clarification of jurisdictional immunity for cultural objects
of foreign states.
TITLE I--SUPPORT FOR ARTISTS AND ENTREPRENEURS
SEC. 101. CHARITABLE CONTRIBUTIONS OF CERTAIN ITEMS CREATED BY THE
TAXPAYER.
(a) In General.--Subsection (e) of section 170 of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
paragraph:
``(8) Special rule for certain contributions of literary,
musical, or artistic compositions.--
``(A) In general.--In the case of a qualified
artistic charitable contribution--
``(i) the amount of such contribution shall
be the fair market value of the property
contributed (determined at the time of such
contribution), and
``(ii) no reduction in the amount of such
contribution shall be made under paragraph (1).
``(B) Qualified artistic charitable contribution.--
For purposes of this paragraph, the term `qualified
artistic charitable contribution' means a charitable
contribution of any literary, musical, artistic, or
scholarly composition, or similar property, or the
copyright thereon (or both), but only if--
``(i) such property was created by the
personal efforts of the taxpayer making such
contribution no less than 18 months prior to
such contribution,
``(ii) the taxpayer--
``(I) has received a qualified
appraisal of the fair market value of
such property in accordance with the
regulations under this section, and
``(II) attaches to the taxpayer's
income tax return for the taxable year
in which such contribution was made a
copy of such appraisal,
``(iii) the donee is an organization
described in subsection (b)(1)(A),
``(iv) the use of such property by the
donee is related to the purpose or function
constituting the basis for the donee's
exemption under section 501 (or, in the case of
a governmental unit, to any purpose or function
described under subsection (c)),
``(v) the taxpayer receives from the donee
a written statement representing that the
donee's use of the property will be in
accordance with the provisions of clause (iv),
and
``(vi) the written appraisal referred to in
clause (ii) includes evidence of the extent (if
any) to which property created by the personal
efforts of the taxpayer and of the same type as
the donated property is or has been--
``(I) owned, maintained, and
displayed by organizations described in
subsection (b)(1)(A), and
``(II) sold to or exchanged by
persons other than the taxpayer, donee,
or any related person (as defined in
section 465(b)(3)(C)).
``(C) Maximum dollar limitation; no carryover of
increased deduction.--The increase in the deduction
under this section by reason of this paragraph for any
taxable year--
``(i) shall not exceed the artistic
adjusted gross income of the taxpayer for such
taxable year, and
``(ii) shall not be taken into account in
determining the amount which may be carried
from such taxable year under subsection (d).
``(D) Artistic adjusted gross income.--For purposes
of this paragraph, the term `artistic adjusted gross
income' means that portion of the adjusted gross income
of the taxpayer for the taxable year attributable to--
``(i) income from the sale or use of
property created by the personal efforts of the
taxpayer which is of the same type as the
donated property, and
``(ii) income from teaching, lecturing,
performing, or similar activity with respect to
property described in clause (i).
``(E) Paragraph not to apply to certain
contributions.--Subparagraph (A) shall not apply to any
charitable contribution of any letter, memorandum, or
similar property which was written, prepared, or
produced by or for an individual while the individual
is an officer or employee of any person (including any
government agency or instrumentality) unless such
letter, memorandum, or similar property is entirely
personal.
``(F) Copyright treated as separate property for
partial interest rule.--In the case of a qualified
artistic charitable contribution, the tangible
literary, musical, artistic, or scholarly composition,
or similar property and the copyright on such work
shall be treated as separate properties for purposes of
this paragraph and subsection (f)(3).''.
(b) Effective Date.--The amendment made by this section shall apply
to contributions made after the date of the enactment of this Act in
taxable years ending after such date.
SEC. 102. MICROLOAN PROGRAM EXPANSION.
Section 7(m)(6) of the Small Business Act (15 U.S.C. 636(m)(6)) is
amended by adding at the end the following:
``(F) Loan criteria for artists and arts
entrepreneurs.--The Administration, in consultation
with eligible intermediaries, shall develop loan
criteria to ensure that small business concerns owned
and controlled by artists and small business concerns
that support the creative economy receive loan proceeds
under this subsection.''.
SEC. 103. SBA BUSINESS LOANS FOR THE CREATIVE ECONOMY.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is
amended by adding at the end the following:
``(35) Creative economy.--In providing assistance under
this subsection, the Administration shall develop procedures to
evaluate the business proposals and business plans of small
business concerns that focus on economic development, job
creation, and community growth with respect to the creative
economy.''.
SEC. 104. SBA TECHNICAL ASSISTANCE PROGRAMS.
Section 21 of the Small Business Act (15 U.S.C. 648) is amended by
adding at the end the following:
``(n) Technical Assistance Programs for Artists and Arts
Entrepreneurs.--The Administration, in consultation with relevant
stakeholders, shall develop technical assistance programs to be carried
out by small business development centers under this subsection that
target the specific needs of artists and arts entrepreneurs.''.
SEC. 105. ARTS-FOCUSED ECONOMIC DEVELOPMENT.
Title II of the Public Works and Economic Development Act of 1965
(42 U.S.C. 3141 et seq.) is amended by adding at the end the following:
``SEC. 219. ARTS-FOCUSED ECONOMIC DEVELOPMENT.
``(a) Definitions.--In this section:
``(1) Business incubation program.--The term `business
incubation program' means a program that--
``(A) accelerates the successful development of
entrepreneurial businesses through business support
resources and services, developed or orchestrated by
incubator management;
``(B) is designed to produce successful businesses;
and
``(C) provides management guidance, technical
assistance, and consulting designed for young, growing
businesses, including by providing--
``(i) rental space and flexible leases;
``(ii) shared basic business services and
equipment;
``(iii) technology support services; and
``(iv) assistance in obtaining financing
necessary for growth of the business.
``(2) Incubator.--The term `incubator' means a multitenant
facility with on-site management that directs a business
incubation program.
``(b) Arts-Focused Economic Development.--In providing grants and
assistance under this Act (including through the local technical
assistance, partnership planning, and comprehensive economic
development strategies programs of the Economic Development
Administration), the Secretary shall provide to artists and the
creative economy support through traditional economic development
tools, including--
``(1) incubators; and
``(2) economic development planning and technical
assistance.''.
SEC. 106. ARTS-FOCUSED RURAL DEVELOPMENT.
The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et
seq.) is amended by adding at the end the following:
``Subtitle J--Arts-Focused Economic Development
``SEC. 386A. ARTS-FOCUSED ECONOMIC DEVELOPMENT.
``(a) Definitions.--In this section:
``(1) Business incubation program.--The term `business
incubation program' means a program that--
``(A) accelerates the successful development of
entrepreneurial businesses through business support
resources and services, developed or orchestrated by
incubator management;
``(B) is designed to produce successful businesses;
and
``(C) provides management guidance, technical
assistance, and consulting designed for young, growing
businesses, including by providing--
``(i) rental space and flexible leases;
``(ii) shared basic business services and
equipment;
``(iii) technology support services; and
``(iv) assistance in obtaining financing
necessary for growth of the business.
``(2) Incubator.--The term `incubator' means a multitenant
facility with on-site management that directs a business
incubation program.
``(b) Arts-Focused Economic Development.--In providing grants and
assistance under this Act (including through the local technical
assistance, partnership planning, and comprehensive economic
development strategies programs of the Office of Rural Development),
the Secretary, acting through the Under Secretary for Rural
Development, shall provide to artists and the creative economy support
through traditional economic development tools, including--
``(1) incubators; and
``(2) economic development planning and technical
assistance.''.
SEC. 107. EXPEDITED ADJUDICATION OF EMPLOYER PETITIONS FOR ALIENS OF
EXTRAORDINARY ARTISTIC ABILITY.
Section 214(c)(6)(D) of the Immigration and Nationality Act (8
U.S.C. 1184(c)(6)(D)) is amended--
(1) in the first sentence, by inserting ``(i)'' before
``Any person'';
(2) in the second sentence--
(A) by striking ``Once'' and inserting ``Except as
provided in clause (ii), once''; and
(B) by striking ``Attorney General shall'' and
inserting ``Secretary of Homeland Security shall'';
(3) in the third sentence, by striking ``The Attorney
General'' and inserting ``The Secretary''; and
(4) by adding at the end the following:
``(ii) The Secretary of Homeland Security shall adjudicate each
petition for an alien with extraordinary ability in the arts (as
described in clause (i) of section 101(a)(15)(O)), an alien
accompanying such an alien (as described in clause (ii) or (iii) of
such section), or an alien described in section 101(a)(15)(P) (other
than an alien described in section 214(c)(4)(A) (relating to athletes))
not later than 30 days after--
``(I) the date on which the petitioner submits the petition
with a written advisory opinion, letter of no objection, or
request for a waiver; or
``(II) the date on which the 15-day period described in
clause (i) has expired, if the petitioner has had an
opportunity, as appropriate, to supply rebuttal evidence.
``(iii) If a petition described in clause (ii) is not adjudicated
before the end of the 30-day period described in clause (ii) and the
petitioner is an arts organization described in paragraph (3), (5), or
(6) of section 501(c) of the Internal Revenue Code of 1986 and exempt
from tax under section 501(a) of such Code for the taxable year
preceding the calendar year in which the petition is submitted, or an
individual or entity petitioning primarily on behalf of such an
organization, the Secretary of Homeland Security shall provide the
petitioner with the premium-processing services referred to in section
286(u), without a fee.''.
SEC. 108. DISASTER SUPPORT FOR ARTISTS THROUGH FEMA.
(a) In General.--The President, acting through the Administrator of
the Federal Emergency Management Agency, shall promulgate rules to
ensure that expenses incurred, as a result of a major disaster or
emergency, by a self-employed or freelance worker, including a craft
artist, fine artist, designer, literary artist, performing artist, or
musician, to repair or replace tools needed by the self-employed or
freelance worker are considered eligible expenses for assistance under
section 408 of the Robert T. Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5174).
(b) Requirement.--The rules promulgated under subsection (a) may
not require, as a condition of receiving such assistance under section
408 of the Robert T. Stafford Disaster Relief and Emergency Assistance
Act (42 U.S.C. 5174), an applicant--
(1) to apply or be declined for assistance from the Small
Business Administration; or
(2) to demonstrate that assistance received from the Small
Business Administration does not satisfy the total necessary
expenses or serious needs arising out of a major disaster or
emergency.
TITLE II--SUPPORT FOR THE CREATIVE ECONOMY
SEC. 201. MODIFICATION OF RULES FOR CHARITABLE CONTRIBUTIONS OF
FRACTIONAL GIFTS.
(a) Income Tax.--
(1) Additional requirements for deduction.--Paragraph (1)
of section 170(o) of the Internal Revenue Code of 1986 is
amended to read as follows:
``(1) Denial of deduction in certain cases.--
``(A) In general.--No deduction shall be allowed
for a contribution of an undivided portion of a
taxpayer's entire interest in tangible personal
property unless--
``(i) all interests in the property are
held immediately before such contribution by--
``(I) the taxpayer, or
``(II) the taxpayer and the donee,
``(ii) in the case of an initial fractional
contribution, such contribution is an undivided
portion of not less than 10 percent of all
interests in the property,
``(iii) in the case of an initial
fractional contribution, the contribution is
made pursuant to a written binding contract
which requires the donor--
``(I) to contribute not less than
20 percent of all interests in the
property on or before the date that is
11 years after the date of the initial
fractional contribution, and
``(II) to contribute all of the
interests in such property to the donee
(or if such donee is no longer in
existence, to any person described in
subsection (c)) on or before the
earlier of the date of the death of the
donor or the date which is 20 years
after the date of the initial
fractional contribution, and
``(iv) if the value of the tangible
personal property with respect to which the
undivided portion of the taxpayer's entire
interest relates is greater than $1,000,000 (or
such greater amount as determined by the
Secretary), the taxpayer attaches to the return
for the taxable year in which such contribution
is made a statement of value obtained from the
Internal Revenue Service.
In the case of a donor who dies before the date which
is 20 years after the date of the initial fractional
contribution, clause (iii)(II) is satisfied with
respect to such initial fractional contribution if the
donor's will specifies that all of the interests in
such property will be contributed to the donee before
such date.
``(B) Exceptions.--The Secretary may, by
regulation, provide for exceptions to subparagraph
(A)(i) in cases where all persons who hold an interest
in the property make proportional contributions of an
undivided portion of the entire interest held by such
persons. Such regulations may modify the requirements
of clauses (ii) and (iii) of subparagraph (A) to the
extent necessary to carry out the purposes of this
subparagraph.''.
(2) Valuation of subsequent gifts.--Paragraph (2) of
section 170(o) of such Code is amended to read as follows:
``(2) Valuation of subsequent gifts.--In the case of any
additional contribution, the fair market value of such
contribution shall be determined by using a certified appraisal
from the Art Advisory Panel of the Commissioner of Internal
Revenue.''.
(3) Recapture of deduction.--Paragraph (3) of section
170(o) of such Code is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C), and
(B) by striking subparagraph (A) and inserting the
following:
``(A) Recapture.--The Secretary shall provide for
the recapture of the amount of any deduction allowed
under this section (plus interest) with respect to any
contribution of an undivided portion of a taxpayer's
entire interest in tangible personal property--
``(i) in any case in which the donor fails
to meet the requirements described in paragraph
(1)(A)(iii), and
``(ii) in any case where such property is
not in the physical possession of the donee
(other than in the case of art which is fragile
or unwieldy) and used in a use which is related
to a purpose or function constituting the basis
for the donee organization's exemption under
section 501 during any applicable period for a
period of time which bears substantially the
same ratio to 5 years as--
``(I) the percentage of the
undivided interest of the donee in the
property (determined on the day after
such contribution was made), bears to
``(II) 100 percent.
``(B) Applicable period.--For purposes of
subparagraph (A), the applicable period means--
``(i) the 5-year period beginning on the
date of the later of the initial fractional
contribution, and
``(ii) each subsequent 5-year period
occurring during the 20-year period described
in paragraph (1)(A)(iii)(II).''.
(b) Gift Tax.--
(1) Additional requirements for deduction.--Paragraph (1)
of section 2522(e) of the Internal Revenue Code of 1986 is
amended to read as follows:
``(1) Denial of deduction in certain cases.--
``(A) In general.--No deduction shall be allowed
for a contribution of an undivided portion of a
taxpayer's entire interest in tangible personal
property unless--
``(i) all interests in the property are
held immediately before such contribution by--
``(I) the taxpayer, or
``(II) the taxpayer and the donee,
``(ii) in the case of an initial fractional
contribution, such contribution is an undivided
portion of not less than 10 percent of all
interests in the property,
``(iii) in the case of an initial
fractional contribution, the contribution is
made pursuant to a written binding contract
which requires the donor--
``(I) to contribute not less than
20 percent of all interests in the
property on or before the date that is
11 years after the date of the initial
fractional contribution, and
``(II) to contribute all of the
interests in such property to the donee
(or if such donee is no longer in
existence, to any person described in
subsection (c)) on or before the
earlier of the date of the death of the
donor or the date which is 20 years
after the date of the initial
fractional contribution, and
``(iv) if the value of the tangible
personal property with respect to which the
undivided portion of the taxpayer's entire
interest relates is greater than $1,000,000 (or
such greater amount as determined by the
Secretary), the taxpayer attaches to the return
for the taxable year in which such contribution
is made a statement of value obtained from the
Internal Revenue Service.
In the case of a donor who dies before the date which
is 20 years after the date of the initial fractional
contribution, clause (iii)(II) is satisfied with
respect to such initial fractional contribution if the
donor's will specifies that all of the interests in
such property will be contributed to the donee before
such date.
``(B) Exceptions.--The Secretary may, by
regulation, provide for exceptions to subparagraph
(A)(i) in cases where all persons who hold an interest
in the property make proportional contributions of an
undivided portion of the entire interest held by such
persons. Such regulations may modify the requirements
of clauses (ii) and (iii) of subparagraph (A) to the
extent necessary to carry out the purposes of this
subparagraph.''.
(2) Recapture of deduction.--Paragraph (2) of section
2522(e) of such Code is amended--
(A) by redesignating subparagraphs (B) and (C) as
subparagraphs (C) and (D), respectively, and
(B) by striking subparagraph (A) and inserting the
following:
``(A) Recapture.--The Secretary shall provide for
the recapture of the amount of any deduction allowed
under this section (plus interest) with respect to any
contribution of an undivided portion of a taxpayer's
entire interest in tangible personal property--
``(i) in any case in which the donor fails
to meet the requirements described in paragraph
(1)(A)(iii), and
``(ii) in any case where such property is
not in the physical possession of the donee
(other than in the case of art which is fragile
or unwieldy) and used in a use which is related
to a purpose or function constituting the basis
for the donee organization's exemption under
section 501 during any applicable period for a
period of time which bears substantially the
same ratio to 5 years as--
``(I) the percentage of the
undivided interest of the donee in the
property (determined on the day after
such contribution was made), bears to
``(II) 100 percent.
``(B) Applicable period.--For purposes of
subparagraph (A), the applicable period means--
``(i) the 5-year period beginning on the
date of the later of the initial fractional
contribution, and
``(ii) each subsequent 5-year period
occurring during the 20-year period described
in paragraph (1)(A)(iii)(II).''.
(c) Effective Date.--The amendments made by this section shall
apply to contributions and gifts made after the date of the enactment
of this Act.
(d) Transition Rule.--In the case of any additional contribution
(as defined in section 170(o)(4) of the Internal Revenue Code of 1986)
with respect to an initial fractional contribution (as defined in such
section) made after August 17, 2006, and before the date of the
enactment of this Act--
(1) except for purposes of determining the fair market
value of such contribution under section 170(o)(2) of the
Internal Revenue Code of 1986 (as amended by this Act), such
contribution shall be treated as an initial fractional
contribution (as so defined) subject to the amendments made by
this section, and
(2) sections 170(o)(3)(A)(i) and 2522(e)(3)(A)(i) of such
Code (as in effect before the date of the enactment of this
Act) shall not apply with respect to any prior contribution of
an undivided portion of the taxpayer's interest in the
property.
SEC. 202. CAPITAL GAINS TAX RATE RELATING TO ART.
(a) Exclusion From 28-Percent Rate Gain.--Subparagraph (A) of
section 1(h)(5) of the Internal Revenue Code of 1986 is amended by
striking ``paragraph (3)'' and inserting ``paragraph (2)(A) or (3)''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
TITLE III--CREATIVE COMMUNITY DEVELOPMENT
SEC. 301. ARTIST CORPS.
(a) Corps.--Section 122(a) of the National and Community Service
Act of 1990 (42 U.S.C. 12572(a)) is amended by adding at the end the
following:
``(6) Artist corps.--
``(A) In general.--The recipient may carry out
national service programs through an Artist Corps that
identifies and meets unmet needs within communities
through artistic activities such as those described in
subparagraph (B) and improves performance on the
indicators described in subparagraph (C).
``(B) Activities.--An Artist Corps described in
this paragraph may carry out activities such as--
``(i) providing skilled visual and
performance artists to address community needs
through artistic activities in education,
health care, and therapeutic settings, and in
other settings in the community; or
``(ii) providing other artistic activities,
addressing unmet community needs, that the
Corporation may designate.
``(C) Artist corps indicators.--The indicators for
a corps program described in this paragraph are--
``(i) any indicator relating to meeting
critical needs that the Corporation
establishes; or
``(ii) any local indicator (applicable to a
particular recipient or community and on which
an improvement in performance is needed)
relating to meeting critical needs, that is
approved by the Corporation or a State
Commission.''.
(b) Conforming Amendments.--Section 122 of such Act is amended--
(1) in subsection (b)(3), by striking ``or (5)'' and
inserting ``(5), or (6)''; and
(2) in subsection (c)(1), in the matter preceding
subparagraph (A), by striking ``through (5)'' and inserting
``through (6)''.
SEC. 302. COMMUNITY DEVELOPMENT ENTITIES FOCUSED ON THE ARTS FOR
PURPOSES OF THE NEW MARKETS TAX CREDIT.
(a) In General.--Not later than 1 year after the date of the
enactment of this Act, the Secretary of the Treasury shall develop and
promulgate guidelines for the creation and operation of qualified
community development entities--
(1) which will be eligible to be certified as such by the
Secretary of the Treasury under section 45D(c)(1)(C) of the
Internal Revenue Code of 1986;
(2) a qualified equity investment in which will, subject to
allocation under section 45D(f) of such Code, be eligible for
the credit under such section 45D; and
(3) which will focus on investment in and the development
and encouragement of the creative economy in low-income
communities.
(b) Definitions.--For purposes of this section, any term used in
subsection (a) which is also used in section 45D of the Internal
Revenue Code of 1986 has the same meaning as when used in such section.
SEC. 303. DEMONSTRATION PROGRAM ON SUPPORT OF LOCAL PROGRAMS THAT
PROMOTE CREATIVE AND PERFORMANCE ARTS IN LOCAL ECONOMIC
PLANNING.
(a) Demonstration Program Required.--The Secretary of Commerce
shall establish a demonstration program to assess the feasibility and
advisability of providing support to covered programs to promote
creative and performing arts in the economic planning of local
governments.
(b) Covered Programs.--For purposes of the demonstration program
required by subsection (a), a covered program is any program that--
(1) was in effect on the day before the date of the
enactment of this Act; and
(2) the Secretary considers part of an art community.
SEC. 304. CLARIFICATION OF JURISDICTIONAL IMMUNITY FOR CULTURAL OBJECTS
OF FOREIGN STATES.
(a) In General.--Section 1605 of title 28, United States Code, is
amended by adding at the end the following:
``(h) Jurisdictional Immunity for Certain Art Exhibition
Activities.--
``(1) In general.--If--
``(A) a work is imported into the United States
from any foreign country pursuant to an agreement that
provides for the temporary exhibition or display of
such work entered into between a foreign state that is
the owner or custodian of such work and the United
States or one or more cultural or educational
institutions within the United States;
``(B) the President, or the President's designee,
has determined, in accordance with subsection (a) of
Public Law 89-259 (22 U.S.C. 2459(a)), that such work
is of cultural significance and the temporary
exhibition or display of such work is in the national
interest; and
``(C) the notice thereof has been published in
accordance with subsection (a) of Public Law 89-259 (22
U.S.C. 2459(a)),
any activity in the United States of such foreign state, or of
any carrier, that is associated with the temporary exhibition
or display of such work shall not be considered to be
commercial activity by such foreign state for purposes of
subsection (a)(3).
``(2) Nazi-era claims.--Paragraph (1) shall not apply in
any case asserting jurisdiction under subsection (a)(3) in
which rights in property taken in violation of international
law are in issue within the meaning of that subsection and--
``(A) the property at issue is the work described
in paragraph (1);
``(B) the action is based upon a claim that such
work was taken in connection with the acts of a covered
government during the covered period;
``(C) the court determines that the activity
associated with the exhibition or display is commercial
activity, as that term is defined in section 1603(d);
and
``(D) a determination under subparagraph (C) is
necessary for the court to exercise jurisdiction over
the foreign state under subsection (a)(3).
``(3) Definitions.--For purposes of this subsection--
``(A) the term `work' means a work of art or other
object of cultural significance;
``(B) the term `covered government' means--
``(i) the Government of Germany during the
covered period;
``(ii) any government in any area in Europe
that was occupied by the military forces of the
Government of Germany during the covered
period;
``(iii) any government in Europe that was
established with the assistance or cooperation
of the Government of Germany during the covered
period; and
``(iv) any government in Europe that was an
ally of the Government of Germany during the
covered period; and
``(C) the term `covered period' means the period
beginning on January 30, 1933, and ending on May 8,
1945.''.
(b) Effective Date.--The amendment made by this section shall apply
to any civil action commenced on or after the date of the enactment of
this Act.
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