PUBLIC LAW 105-34—AUG. 5, 1997 111 STAT. 893 "(2) ELECTING 1987 PARTNERSHIP.—For purposes of this subsection, the term 'electing 1987 partnership meguis any publicly traded partnership if— "(A) such partnership is an existing partnership (as defined in section 10211(c)(2) of the Revenue Reconciliation Act of 1987), "(B) subsection (a) has not applied (and without regard to subsection (c)(1) would not have applied) to such partnership for all prior taxable years beginning after December 31, 1987, and before January 1, 1998, and "(C) such partnership elects the application of this subsection, and consents to the application of the tax imposed by paragraph (3), for its first taxable year beginning afl;er December 31, 1997. A pgirtnership which, but for this sentence, would be treated as an electing 1987 partnership shall cease to be so treated (and the election under subparagraph (C) shall cease to be in effect) as of the 1st day after December 31, 1997, on which there has been an addition of a substantial new line of business with respect to such partnership. "(3) ADDITIONAL TAX ON ELECTING PARTNERSHIPS.— "(A) IMPOSITION OF TAX.—There is hereby imposed for each taxable year on the income of each electing 1987 partnership a tax equal to 3.5 percent of such partnership's gross income for the taxable year from the active conduct of trades and businesses by the partnership. "(B) ADJUSTMENTS IN THE CASE OF TIERED PARTNER- SHIPS. —For purposes of this paragraph, in the case of a partnership which is a partner in another partnership, the gross income referred to in subparagraph (A) shall include the partnership's distributive share of the gross income of such other partnership from the active conduct of trades and businesses of such other partnership. A similar rule shall apply in the case of lower-tiered partnerships. "(C) TREATMENT OF TAX.— For purposes of this title, the tax imposed by this paragraph shall be treated as imposed by chapter 1 other than for purposes of determining the amount of any credit allowable under chapter 1. "(4) ELECTION. — An election and consent under this subsection shall apply to the taxable year for which made and all subsequent taxable years unless revoked by the partnership. Such revocation may be made without the consent of the Secretary, but, once so revoked, may not be reinstated.". (b) EFFECTIVE DATE.— The amendment made by this section 26 USC 7704 shall apply to taxable years beginning after December 31, 1997. note. SEC. 965. EXCLUSION FROM UNRELATED BUSINESS TAXABLE INCOME FOR CERTAIN SPONSORSHIP PAYMENTS. (a) IN GENERAL. —Section 513 (relating to unrelated trade or business income) is amended by adding at the end the following new subsection: " (i) TREATMENT OF CERTAIN SPONSORSHIP PAYMENTS.— "(1) IN GENERAL. — The term 'unrelated trade or business' does not include the activity of soUciting and receiving qualified sponsorship payments. "(2) QUALIFIED SPONSORSHIP PAYMENTS.—For purposes of this subsection—
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