[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1093 Reported in Senate (RS)]





                                                       Calendar No. 165

105th CONGRESS

  1st Session

                                S. 1093

                          [Report No. 105-83]

_______________________________________________________________________

                                 A BILL

  To extend nondiscriminatory (most-favored-nation) treatment to the 
    products of the Lao People's Democratic Republic, and for other 
                               purposes.

_______________________________________________________________________

                           September 17, 1997

                       Reported with an amendment





                                                       Calendar No. 165
105th CONGRESS
  1st Session
                                S. 1093

                          [Report No. 105-83]

  To extend nondiscriminatory (most-favored-nation) treatment to the 
    products of the Lao People's Democratic Republic, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 30, 1997

  Mr. Kerry (for himself, Mr. McCain, and Mr. Thomas) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

                           September 17, 1997

                Reported by Mr. Roth, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
  To extend nondiscriminatory (most-favored-nation) treatment to the 
    products of the Lao People's Democratic Republic, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. CONGRESSIONAL FINDINGS.</DELETED>

<DELETED>    The Congress finds that--</DELETED>
        <DELETED>    (1) the Lao People's Democratic Republic is 
        striving to shed centralized government control of its economy 
        in favor of market-oriented reforms;</DELETED>
        <DELETED>    (2) extension of unconditional most-favored-nation 
        treatment would assist the Lao People's Democratic Republic in 
        developing its economy based on free market principles and 
        becoming competitive in the global marketplace;</DELETED>
        <DELETED>    (3) establishing normal commercial relations on a 
        reciprocal basis with the Lao People's Democratic Republic will 
        promote United States exports to the rapidly growing Southeast 
        Asian region and expand opportunities for United States 
        business and investment in the Lao People's Democratic Republic 
        economy;</DELETED>
        <DELETED>    (4) United States and Laotian commercial interests 
        would benefit from a commercial agreement between the United 
        States and the Lao People's Democratic Republic providing for 
        market access and the protection of intellectual property 
        rights;</DELETED>
        <DELETED>    (5) economic reform in the Lao People's Democratic 
        Republic is increasingly important as that country integrates 
        into the ASEAN Free Trade Area and accedes to the World Trade 
        Organization; and</DELETED>
        <DELETED>    (6) expanding bilateral trade relations that 
        include a commercial agreement may promote further progress by 
        the Lao People's Democratic Republic on human rights and 
        democratic rule and assist that country in adopting regional 
        and world trading rules and principles.</DELETED>

<DELETED>SEC. 2. EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE 
              PRODUCTS OF THE LAO PEOPLES DEMOCRATIC 
              REPUBLIC.</DELETED>

<DELETED>    (a) Harmonized Tariff Schedule Amendment.--General note 
3(b) of the Harmonized Tariff Schedule of the United States is amended 
by striking ``Laos''.</DELETED>
<DELETED>    (b) Effective Date.--The amendment made by subsection (a) 
applies with respect to goods entered, or withdrawn from warehouse for 
consumption, on or after the effective date of a notice published in 
the Federal Register by the United States Trade Representative that a 
trade agreement obligating reciprocal most-favored-nation treatment 
between the Lao People's Democratic Republic and the United States has 
entered into force.</DELETED>

<DELETED>SEC. 3. REPORT TO CONGRESS.</DELETED>

<DELETED>    The President shall submit to the Congress, not later than 
18 months after the date of the enactment of this Act, a report on the 
trade relations between the United States and the Lao People's 
Democratic Republic pursuant to the trade agreement described in 
section 2(b).</DELETED>

      TITLE I--EXTENSION OF MOST-FAVORED-NATION TREATMENT TO LAOS

SEC. 101. CONGRESSIONAL FINDINGS.

    Congress finds that--
            (1) the Lao People's Democratic Republic is striving to 
        shed centralized government control of its economy in favor of 
        market-oriented reforms;
            (2) extension of unconditional most-favored-nation 
        treatment would assist the Lao People's Democratic Republic in 
        developing its economy based on free market principles and 
        becoming competitive in the global marketplace;
            (3) establishing normal commercial relations on a 
        reciprocal basis with the Lao People's Democratic Republic will 
        promote United States exports to the rapidly growing Southeast 
        Asian region and expand opportunities for United States 
        business and investment in the Lao People's Democratic Republic 
        economy;
            (4) United States and Laotian commercial interests would 
        benefit from a commercial agreement between the United States 
        and the Lao People's Democratic Republic providing for market 
        access and the protection of intellectual property rights;
            (5) economic reform in the Lao People's Democratic Republic 
        is increasingly important as that country integrates into the 
        ASEAN Free Trade Area and accedes to the World Trade 
        Organization; and
            (6) expanding bilateral trade relations that include a 
        commercial agreement may promote further progress by the Lao 
        People's Democratic Republic on human rights and democratic 
        rule and assist that country in adopting regional and world 
        trading rules and principles.

SEC. 102. EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PRODUCTS OF 
              THE LAO PEOPLES DEMOCRATIC REPUBLIC.

    (a) Harmonized Tariff Schedule Amendment.--General note 3(b) of the 
Harmonized Tariff Schedule of the United States is amended by striking 
``Laos''.
    (b) Effective Date.--The amendment made by subsection (a) applies 
with respect to goods entered, or withdrawn from warehouse for 
consumption, after December 31, 1997.

SEC. 103. REPORT TO CONGRESS.

    The President shall submit to Congress, not later than 18 months 
after the date of enactment of this Act, a report on the trade 
relations between the United States and the Lao People's Democratic 
Republic pursuant to the trade agreement described in section 102(b).

           TITLE II--INTERNATIONAL SHIPPING INCOME DISCLOSURE

SEC. 201. PENALTIES FOR FAILURE TO DISCLOSE POSITION THAT CERTAIN 
              INTERNATIONAL SHIPPING INCOME IS NOT INCLUDIBLE IN GROSS 
              INCOME.

    (a) In General.--Section 883 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(d) Penalties for Failure to Disclose Position That Certain 
International Shipping Income Is Not Includible in Gross Income.--
            ``(1) In general.--A taxpayer who, with respect to any tax 
        imposed by this title, takes the position that any of its gross 
        income derived from the international operation of a ship or 
        ships is not includible in gross income by reason of subsection 
        (a)(1) or section 872(b)(1) (or by reason of any applicable 
        treaty) shall be entitled to such treatment only if such 
        position is disclosed (in such manner as the Secretary may 
        prescribe) on the return of tax for such tax (or any statement 
        attached to such return).
            ``(2) Additional penalties for failing to disclose 
        position.--If a taxpayer fails to meet the requirement of 
        paragraph (1) with respect to any taxable year--
                    ``(A) the amount of the income from the 
                international operation of a ship or ships--
                            ``(i) which is from sources without the 
                        United States, and
                            ``(ii) which is attributable to a fixed 
                        place of business in the United States,
                shall be treated for purposes of this title as 
                effectively connected with the conduct of a trade or 
                business within the United States, and
                    ``(B) no deductions or credits shall be allowed 
                which are attributable to income from the international 
                operation of a ship or ships.
            ``(3) Reasonable cause exception.--This subsection shall 
        not apply to a failure to disclose a position if it is shown 
        that such failure is due to reasonable cause and not due to 
        willful neglect.''
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 872(b) of such Code is amended 
        by striking ``Gross income'' and inserting ``Except as provided 
        in section 883(d), gross income''.
            (2) Paragraph (1) of section 883(a) of such Code is amended 
        by striking ``Gross income'' and inserting ``Except as provided 
        in subsection (d), gross income''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after December 31, 1997, and 
        before April 1, 2000.
            (2) Coordination with treaties.--The amendments made by 
        this section shall not apply in any case where their 
        application would be contrary to any treaty obligation of the 
        United States.
    (d) Information To Be Provided by Customs Service.--The United 
States Customs Service shall provide the Secretary of the Treasury or 
his delegate with such information as may be specified by such 
Secretary in order to enable such Secretary to determine whether ships 
which are not registered in the United States are engaged in 
transportation to or from the United States.