114 STAT. 2763A-602 PUBLIC LAW 106-554 —APPENDIX G "(B) in the case of obligations issued after December 31, 2001, all empowerment zones (other than the District of Columbia Enterprise Zone) were taken into account under sections 1397C and 1397D.". (b) EFFECTIVE DATE.—The amendments made by this section shall apply to obligations issued after December 31, 2001. SEC. 116. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWER- MENT ZONE INVESTMENTS. (a) IN GENERAL. —Part III of subchapter U of chapter 1 is amended— (1) by redesignating subpart C as subpart D, (2) by redesignating sections 1397B and 1397C as sections 1397C and 1397D, respectively, and (3) by inserting after subpart B the following new subpart: "Subpart C—Nonrecognition of Gain on Rollover of Empowerment Zone Investments "Sec. 1397B. Nonrecognition of gain on rollover of empowerment zone investments. "SEC. 1397B. NONRECOGNITION OF GAIN ON ROLLOVER OF EMPOWER- MENT ZONE INVESTMENTS. "(a) NONRECOGNITION OF GAIN.— In the case of any sale of a qualified empowerment zone asset held by the taxpayer for more than 1 year and with respect to which such taxpayer elects the application of this section, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds— "(1) the cost of any qualified empowerment zone asset (with respect to the same zone as the asset sold) purchased by the taxpayer during the 60-day period beginning on the date of such sale, reduced by "(2) any portion of such cost previously taken into account under this section. "(b) DEFINITIONS AND SPECIAL RULES. —For purposes of this section— "(1) QUALIFIED EMPOWERMENT ZONE ASSET.— "(A) IN GENERAL. —The term 'qualified empowerment zone asset' means any property which would be a qualified community asset (as defined in section 1400F) if in section 1400F— "(i) references to empowerment zones were substituted for references to renewal communities, "(ii) references to enterprise zone businesses (as defined in section 1397C) were substituted for ref- erences to renewal community businesses, and "(iii) the date of the enactment of this paragraph were substituted for 'December 31, 2001' each place it appears. "(B) TREATMENT OF DC ZONE.— The District of Columbia Enterprise Zone shall not be treated as an empowerment zone for purposes of this section. "(2) CERTAIN GAIN NOT ELIGIBLE FOR ROLLOVER. — This section shall not apply to— "(A) any gain which is treated as ordinary income for purposes of this subtitle, and
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