SEC. 2. REPEAL OF

NONRECOGNITION ON FCC CERTIFIED SALES AND EXCHANGES.

(a) In General. - Subchapter O of chapter 1 of the Internal Revenue Code of 1986 is amended by striking part V (relating to changes to effectuate FCC policy).

(b) Conforming Amendments. —Sections 1245(b)(5) and 1250(d)(5) of the Internal Revenue Code of 1986 are each amended—

(1) by striking ‘‘section 1071 (relating to gain from sale or exchange to effectuate polices of FCC) or’’, and

(2) by striking ‘‘1071 AND’’ in the heading thereof.

(c) Clerical Amendment. —The table of parts for such subchapter O is amended by striking the item relating to part V.

(d) Effective Date. (1) In general. —The amendments made by this section shall apply to—

(A) sales and exchanges on or after January 17, 1995, and

(B) sales and exchanges before such date if the FCC tax certificate with respect to such sale or exchange is issued on or after such date.

(2) Binding contracts. (A) In general. —The amendments made by this section shall not apply to any sale or exchange pursuant to a written contract which was binding on January 16, 1995, and at all times thereafter before the sale or exchange, if the FCC tax certificate with respect to such sale or exchange was applied for, or issued, on or before such date.

(B) Sales contingent on issuance of certificate. (i) In general. —A contract shall be treated as not binding for purposes of subparagraph (A) if the sale or exchange pursuant to such contract, or the material terms of such contract, were contingent, at any time on January 16, 1995, on the issuance of an FCC tax certificate. The preceding sentence shall not apply if the FCC tax certificate for such sale or exchange is issued on or before January 16, 1995.

(ii) Material terms. —For purposes of clause (i), the material terms of a contract shall not be treated as contingent on the issuance of an FCC tax certificate solely because such terms provide that the sales price would, if such certificate were not issued, be increased by an amount not greater than 10 percent of the sales price otherwise provided in the contract.

(3) FCC tax certificate. —For purposes of this subsection, the term ‘‘FCC tax certificate’’ means any certificate of the Federal Communications Commission for the effectuation of section 1071 of the Internal Revenue Code of 1986 (as in effect on the day before the date of the enactment of this Act).

application of this subsection to a qualified sale or exchange, such sale or exchange shall be treated as an involuntary conversion to which this section applies.

‘‘(2) Qualified sale or exchange. For purpose of paragraph (1), the term ‘qualified sale or exchange’ means a sale or exchange before January 1, 2000, which is certified by the Federal Communications Commission as having been made by a taxpayer in connection with the relocation of the taxpayer from the 1850–1990MHz spectrum by reason of the Federal Communications Commission’s reallocation of that spectrum for use for personal communications services. The Commission shall transmit copies of certifications under this paragraph to the Secretary.’’

(2) Effective date. —The amendment made by paragraph (1) shall apply to sales or exchanges after March 14, 1995.