[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 2542 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 2542

    To amend the Internal Revenue Code of 1986 to modify the tax on 
commercial aviation to and from airports located on sparsely populated 
                                islands.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 2, 1998

  Mr. Chafee introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To amend the Internal Revenue Code of 1986 to modify the tax on 
commercial aviation to and from airports located on sparsely populated 
                                islands.

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

SECTION 1. MODIFICATION OF TAX ON AIR TRANSPORTATION TO AND FROM 
              SPARSELY POPULATED ISLANDS.

    (a) In General.--Subsection (e) of section 4261 of the Internal 
Revenue Code of 1986 is amended by redesignating paragraphs (4) and (5) 
as paragraphs (5) and (6) and by inserting after paragraph (3) the 
following new paragraph:
            ``(4) Segments to and from certain island airports.--
                    ``(A) Exception from segment tax.--The tax imposed 
                by subsection (b)(1) shall not apply to any domestic 
                segment beginning or ending at an airport which is a 
                qualified island airport for the calendar year in which 
                such segment begins or ends (as the case may be).
                    ``(B) Qualified island airport.--For purposes of 
                this paragraph, the term `qualified island airport' 
                means, with respect to any calendar year, any airport 
                if--
                            ``(i) such airport is located on an island 
                        having a population of 20,000 or less 
                        (determined under the 1990 decennial census), 
                        and
                            ``(ii) during the second preceding calendar 
                        year--
                                    ``(I) there were 400,000 or fewer 
                                commercial passengers departing by air 
                                from such airport, and
                                    ``(II) 50 percent or more of the 
                                initial flight segments of such 
                                commercial passengers are 100 miles or 
                                less.
                    ``(C) Ticket tax.--In the case of any domestic 
                segment beginning or ending at an airport which is a 
                qualified island airport for the calendar year in which 
                such segment begins or ends (as the case may be), 
                subsection (a) shall be applied by substituting `10 
                percent' for `7.5 percent' and paragraph (6) shall not 
                apply. A rule similar to the rule of paragraph 
                (1)(C)(ii) shall apply for purposes of this 
                subparagraph.''
    (b) Conforming Amendment.--Clause (i) of section 4261(e)(1)(C) of 
such Code is amended by striking ``Paragraph (5)'' and inserting 
``Paragraph (6)''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to transportation beginning 7 days after the date of 
        enactment of this Act.
            (2) Treatment of amounts paid.--The amendments made by this 
        section shall not apply to amounts paid before 7 days after the 
        date of enactment of this Act.
                                 <all>