[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3538 Introduced in House (IH)]

  2d Session
                                H. R. 3538

  To amend the Internal Revenue Code of 1986 to encourage the use of 
public transportation systems by allowing individuals a credit against 
  income tax for expenses paid to commute to and from work or school 
     using public transportation, and to reduce corporate welfare.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 27, 2000

 Mr. Gutierrez (for himself, Mr. McGovern, Mr. Lipinski, and Mr. Meeks 
 of New York) introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on Armed 
Services, for a period to be subsequently determined by the Speaker, in 
   each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
  To amend the Internal Revenue Code of 1986 to encourage the use of 
public transportation systems by allowing individuals a credit against 
  income tax for expenses paid to commute to and from work or school 
     using public transportation, and to reduce corporate welfare.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Transit Commuter Credit Act of 
2000''.

      TITLE I--CREDIT FOR PUBLIC TRANSPORTATION COMMUTING EXPENSES

SEC. 101. CREDIT FOR PUBLIC TRANSPORTATION COMMUTING EXPENSES.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. COMMUTING EXPENSES ON PUBLIC TRANSPORTATION.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to 20 percent of the aggregate amount paid 
by the taxpayer during the taxable year for transportation by public 
transit between the taxpayer's place of abode and place where the 
individual is employed, attending school, or receiving job training.
    ``(b) Maximum Credit.--The credit allowed by subsection (a) for the 
taxable year shall not exceed $175 for each individual.
    ``(c) Public Transit.--For purposes of subsection (a), the term 
`public transit' means any public transportation system (including by 
bus, train, or boat) available for use by the general public as 
passengers.
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under any provision of this chapter for any payment for which a credit 
is allowed under this section.
    ``(e) Verification of Expenses.--Credit shall be allowed under this 
section for any expense only if--
            ``(1) such expense is for a monthly or annual public 
        transit pass, and
            ``(2) the receipt for such expense is included with the 
        return of tax imposed by this chapter for the taxable year 
        during which such expense is paid.''
    (b) Clerical Amendment.--The table of sections for such subpart A 
is amended by inserting after the item relating to section 25A the 
following new item:

                              ``Sec. 25B. Commuting expenses on public 
                                        transportation.''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid after the date of the enactment of this Act in 
taxable years ending after such date.

   TITLE II--MODIFICATIONS TO TREATMENT OF FOREIGN OIL AND GAS INCOME

SEC. 201. MODIFICATIONS TO TREATMENT OF FOREIGN OIL AND GAS INCOME.

    (a) Special Rules for Foreign Tax Credit With Respect to Foreign 
Oil and Gas Income.--
            (1) Certain taxes not creditable.--
                    (A) In general.--Subsection (a) of section 907 of 
                the Internal Revenue Code of 1986 (relating to 
                reduction in amount allowed as foreign tax under 
                section 901) is amended to read as follows:
    ``(a) Certain Taxes Not Creditable.--
            ``(1) In general.--For purposes of this subtitle, the term 
        `income, war profits, and excess profits taxes' shall not 
        include--
                    ``(A) any taxes which are paid or accrued to any 
                foreign country with respect to foreign oil and gas 
                income and which are not imposed under a generally 
                applicable income tax law of such country, and
                    ``(B) any taxes (not described in subparagraph (A)) 
                which are paid or accrued to any foreign country with 
                respect to foreign oil and gas income to the extent 
that the foreign law imposing such amount of tax is structured, or in 
fact operates, so that the amount of tax imposed with respect to 
foreign oil and gas income will generally be materially greater, over a 
reasonable period of time, than the amount generally imposed on income 
that is not foreign oil and gas income.
        In computing the amount not treated as tax under subparagraph 
        (B), such amount shall be treated as a deduction under the 
        foreign law.
            ``(2) Foreign oil and gas income.--For purposes of this 
        subsection, the term `foreign oil and gas income' means the 
        amount of foreign oil and gas extraction income and foreign oil 
        related income.
            ``(3) Generally applicable income tax law.--For purposes of 
        this subsection, the term `generally applicable income tax law' 
        means any law of a foreign country imposing an income tax if 
        such tax generally applies to all income from sources within 
        such foreign country--
                    ``(A) without regard to the residence or 
                nationality of the person earning such income, and
                    ``(B) in the case of any income earned by a 
                corporation, partnership, or other entity, without 
                regard to--
                            ``(i) where such corporation, partnership, 
                        or other entity is organized, and
                            ``(ii) the residence or nationality of the 
                        persons owning interests in such corporation, 
                        partnership, or entity.''
                    (B) Conforming amendment.--Section 907 of such Code 
                is amended by striking subsections (b), (c)(3), (c)(4), 
                (c)(5), and (f).
            (2) Separate baskets for foreign oil and gas extraction 
        income and foreign oil related income.--
                    (A) In general.--Paragraph (1) of section 904(d) of 
                such Code (relating to separate application of section 
                with respect to certain categories of income) is 
                amended by striking ``and'' at the end of subparagraph 
                (H), by redesignating subparagraph (I) as subparagraph 
                (K) and by inserting after subparagraph (H) the 
                following new subparagraphs:
                    ``(I) foreign oil and gas extraction income,
                    ``(J) foreign oil related income, and''.
                    (B) Definitions.--Paragraph (2) of section 904(d) 
                of such Code is amended by redesignating subparagraphs 
                (H) and (I) as subparagraphs (J) and (K), respectively, 
                and by inserting after subparagraph (G) the following 
                new subparagraphs:
                    ``(H) Foreign oil and gas extraction income.--The 
                term `foreign oil and gas extraction income' has the 
                meaning given such term by section 907(c)(1). Such term 
                shall not include any dividend from a noncontrolled 
                section 902 corporation.
                    ``(I) Foreign oil related income.--The term 
                `foreign oil related income' has the meaning given such 
                term by section 907(c)(2). Such term shall not include 
                any dividend from a noncontrolled section 902 
                corporation and any shipping income.''
                    (C) Conforming amendment.--Clause (i) of section 
                904(d)(3)(F) of such Code is amended by striking ``or 
                (E)'' and inserting ``(E), (I), or (J)''.
            (3) Effective date.--
                    (A) In general.--Except as otherwise provided in 
                this paragraph, the amendments made by this subsection 
                shall apply to taxable years beginning after December 
                31, 1997.
                    (B) Disallowance rule.--
                            (i) Section 907(a) of such Code (as amended 
                        by paragraph (1)) shall apply to taxes paid or 
                        accrued after December 31, 1997, in taxable 
                        years ending after such date.
                            (ii) In determining the amount of taxes 
                        deemed to be paid in a taxable year beginning 
                        after December 31, 1997, under section 902 or 
                        960 of such Code, section 907(a) of such Code 
                        (as amended by paragraph (1)) shall apply to 
                        all taxes whether paid or accrued before, on, 
                        or after December 31, 1997.
                    (C) Loss rule.--Notwithstanding the amendments made 
                by paragraph (1)(B), section 907(c)(4) of such Code 
                shall continue to apply with respect to foreign oil and 
                gas extraction losses for taxable years beginning 
                before January 1, 1998.
                    (D) Transitional rules.--
                            (i) Any taxes paid or accrued in a taxable 
                        year beginning before January 1, 1998, with 
respect to income which was described in subparagraph (I) of section 
904(d)(1) of such Code (as in effect on the day before the date of the 
enactment of this Act) shall be treated as taxes paid or accrued with 
respect to foreign oil and gas extraction income or foreign oil related 
income (as the case may be) to the extent such taxes were paid or 
accrued with respect to such type of income.
                            (ii) Any unused oil and gas extraction 
                        taxes which under section 907(f) of such Code 
                        (as so in effect) would have been allowed as a 
                        carryover to the taxpayer's first taxable year 
                        beginning after December 31, 1997 (determined 
                        without regard to the limitation of paragraph 
                        (2) of such section 907(f) for such first 
                        taxable year), shall be allowed as carryovers 
                        under section 904(c) of such Code in the same 
                        manner as if they were unused taxes under 
                        section 904(c) with respect to foreign oil and 
                        gas extraction income.
    (b) Elimination of Deferral for Foreign Oil and Gas Extraction 
Income.--
            (1) General rule.--Paragraph (1) of section 954(g) of the 
        Internal Revenue Code of 1986 (defining foreign base company 
        oil related income) is amended to read as follows:
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign oil and gas income' means any 
        income of a kind which would be taken into account in 
        determining the amount of--
                    ``(A) foreign oil and gas extraction income (as 
                defined in section 907(c)(1)), or
                    ``(B) foreign oil related income (as defined in 
                section 907(c)(2)).''
            (2) Conforming amendments.--
                    (A)(i) Subsections (a)(5), (b)(5), and (b)(8) of 
                section 954 of such Code are each amended by striking 
                ``base company oil related income'' each place it 
                appears (including in the heading of subsection (b)(8)) 
                and inserting ``oil and gas income''.
                    (ii) Subsection (b)(4) of section 954 of such Code 
                is amended by striking ``base company oil-related 
                income'' and inserting ``oil and gas income''.
                    (B) The subsection heading for subsection (g) of 
                section 954 of such Code is amended by striking 
                ``Foreign Base Company Oil Related Income'' and 
                inserting ``Foreign Oil and Gas Income''.
                    (C) Subparagraph (A) of section 954(g)(2) of such 
                Code is amended by striking ``foreign base company oil 
                related income'' and inserting ``foreign oil and gas 
                income''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years of foreign corporations beginning 
        after December 31, 1997, and to taxable years of United States 
        shareholders in which or with which such taxable years of 
        foreign corporations end.

       TITLE III--LIMITATIONS ON PAYMENTS UNDER DEFENSE CONTRACTS

SEC. 301. PROHIBITION ON PAYMENTS UNDER DEFENSE CONTRACTS FOR 
              RESTRUCTURING COSTS OF A DEFENSE CONTRACTOR MERGER OR 
              ACQUISITION.

    (a) Prohibition.--No funds appropriated or otherwise made available 
to the Department of Defense may be obligated or expended under section 
2324 of title 10, United States Code, for payment of any restructuring 
cost associated with a merger or acquisition that is incurred by a 
contractor under contract with the Department of Defense.
    (b) Applicability.--(1) The prohibition in subsection (a) applies 
with respect to any merger or acquisition occurring on or after the 
date of the enactment of this Act.
    (2) In the case of a merger or acquisition that occurred before the 
date of the enactment of this Act, funds appropriated or otherwise made 
available to the Department of Defense may be used to process or pay a 
claim for restructuring costs associated with the merger or acquisition 
only if the relevant contract or advance agreement specifies that 
payment for such costs may be made under the contract or agreement 
using funds appropriated or otherwise made available to the Department 
of Defense.
    (c) Conforming Repeal.--Subsection (a) of section 818 of the 
National Defense Authorization Act for Fiscal Year 1995 (Public Law 
103-337; 10 U.S.C. 2324 note) is repealed.
    (d) Reports by Secretary of Defense.--Subsection (e) of such 
section is amended--
            (1) in the matter preceding paragraph (1), by striking out 
        ``and 1997'' and inserting in lieu thereof ``1997, 1998, 1999, 
        and 2000''; and
            (2) by adding at the end of paragraph (3) the following:
                    ``(F) An analysis of the dollar amount of any 
                windfalls achieved by the combining defense contractors 
                which results from the reduction of overhead on fixed-
                price type contracts from the Department of Defense 
                that existed before the business combination.
                    ``(G) A list of each major weapons system purchased 
                by the Department of Defense since July 21, 1993, for 
                which actual prices have actually been reduced that are 
                attributable to the contractors' restructuring efforts.
                    ``(H) The total number of pending restructuring 
                proposals submitted to the Department of Defense as of 
                the date of the report and the total dollar amount of 
                the requests for restructuring costs contained in those 
                proposals.''.
    (e) Comptroller General Report.--Subsection (g)(3) of such section 
is amended by adding at the end the following: ``The report shall 
include an estimate and detailed description of the net effect on the 
Federal budget of reimbursing defense contractors for their merger-
related restructuring costs, including the following:
            ``(A) The payment by the Department of Defense of 
        restructuring costs resulting from business combinations of 
        defense contractors.
            ``(B) The reduction of Federal tax revenues from 
        unemployment resulting from business combinations of defense 
        contractors who have been reimbursed for their merger-related 
        restructuring costs.
            ``(C) The increase in Federal expenditures in other Federal 
        adjustment programs from unemployment resulting from business 
        combinations of defense contractors who have been reimbursed 
        for their merger-related restructuring costs, including food 
        stamps, housing and energy assistance, and any other programs 
        the Comptroller General determines that unemployed persons are 
        likely to use at a rate higher than employed persons.
            ``(D) The increase in Federal grants of cash and in-kind 
        assistance to States and local communities that have 
        experienced significant layoffs or facility relocation (or 
        both) resulting from the business combination, that are 
        attributable to losses in the State and local tax base and 
        increased the use of State and local government services 
        similar to those described in subparagraph (C).
            ``(E) The effect of reduced competition resulting from 
        business combinations on the prices the Department of Defense 
        pays for military equipment and services.''.
    (f) Definitions.--Such section is further amended by adding at the 
end the following new subsection:
    ``(h) Definitions.--For purposes of this section:
            ``(1) The term `windfall' means the savings, either 
        actually realized or anticipated, by the combining defense 
        contractors as a result of reducing overhead through merger-
        related restructuring which are foregone by the Government 
        because certain defense contracts are fixed-price type 
        contracts that existed before the business combination and 
        cannot be adjusted to reflect the contractor's reduced 
        overhead.
            ``(2) The term `significant layoffs' means a situation in 
        which the number of layoffs exceed 500 full-time equivalent 
        employees or in which one of the combining defense contractors 
        previously represented the fifth largest employer or greater in 
        the relevant State or local community.''.

SEC. 302. LIMITATION ON COMPENSATION PAID UNDER DEFENSE CONTRACTS.

    (a) Limitation.--Section 2324 of title 10, United States Code, is 
amended--
            (1) by redesignating subsection (l) as subsection (m); and
            (2) by inserting after subsection (k) the following new 
        subsection (l):
    ``(l) Limitation on Compensation.--
            ``(1) In general.--Subject to paragraph (2), the head of an 
        agency may not obligate funds to pay a contractor under a 
        contract with the agency for the costs of compensation with 
        respect to the services of any one individual to the extent 
        that the total amount of the compensation paid in a fiscal year 
        to that individual exceeds $250,000.
            ``(2) Aggregation rule.--For purposes of determining the 
        limitation on payment to a contractor under paragraph (1), all 
        contracts entered into by the contractor with the agencies 
        covered by this chapter and with all executive agencies (if 
        any) shall be treated as one contract, and the $250,000 
        limitation with respect to the services of an individual in a 
        fiscal year shall be allocated among the contracts in the 
        manner prescribed in regulation by the Administrator for 
        Federal Procurement Policy.
            ``(3) Definitions.--In this subsection:
                    ``(A) The term `compensation' includes salaries, 
                bonuses, deferred compensation, stock options and 
                payouts, certified indirect costs, restructuring costs, 
                and performance-based payments.
                    ``(B) The term `executive agency' has the meaning 
                provided by section 3 of the Federal Property and 
                Administrative Services Act of 1949 (41 U.S.C. 472).''.
    (b) Applicability.--Subsection (l) of section 2324 of title 10, 
United States Code, as added by subsection (a), applies to contracts 
entered into after the date of the enactment of this Act.

TITLE IV--REPEAL OF CERTAIN INCENTIVES FOR OIL AND GAS EXPLORATION AND 
                       DEVELOPMENT AND FOR MINING

SEC. 401. REPEAL OF EXPENSING OF INTANGIBLE DRILLING AND DEVELOPMENT 
              COSTS AND OF MINING EXPLORATION AND DEVELOPMENT COSTS.

    (a) Intangible Drilling and Development Costs.--Section 263(c) of 
the Internal Revenue Code of 1986 is hereby repealed.
    (b) Development Expenditures.--Section 616 of such Code (relating 
to development expenditures) is hereby repealed.
    (c) Exploration Expenditures.--Subsection (i) of section 617 of 
such Code is amended to read as follows:
    ``(i) Termination.--No deduction shall be allowed under this 
section for any expenditure paid or incurred in a taxable year 
beginning after the date of the enactment of this subsection.''
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 56(a) of such Code is hereby 
        repealed.
            (2) Subsection (a) of section 57 of such Code is amended by 
        striking paragraph (2).
            (3) Paragraph (2) of section 59(e) of such Code is amended 
        by adding ``and'' at the end of subparagraph (A), by striking 
        the comma at the end of subparagraph (B) and inserting a 
        period, and by striking subparagraphs (C), (D), and (E).
            (4) Subparagraph (A) of section 59(e)(5) of such Code is 
        amended by inserting before the period ``, as in effect before 
        the Transit Commuter Credit Act of 1998''.
            (5) Subsection (c) of section 193 of such Code is amended 
        to read as follows:
    ``(c) Application With Other Deductions.--No deduction shall be 
allowed under subsection (a) with respect to any expenditure with 
respect to which a deduction is allowed or allowable to the taxpayer 
under any other provision of this chapter.''
            (6) Paragraph (1) of section 263(a) of such Code is amended 
        by striking subparagraph (A) and by redesignating the 
        succeeding subparagraphs accordingly.
            (7) Section 263 of such Code is amended by striking 
        subsection (i).
            (8) Subsection (c) of section 263A of such Code is amended 
        by striking paragraph (3) and by redesignating the succeeding 
        paragraphs accordingly.
            (9) Paragraph (5) of section 263A(c) of such Code, as 
        redesignated by paragraph (8), is amended by striking 
        ``subparagraphs (B), (C), (D), and (E)'' and inserting 
        ``subparagraph (B)''.
            (10) Section 291 of such Code is amended by striking 
        subsection (b).
            (11) Subsection (n) of section 312 of such Code is amended 
        by striking paragraph (2).
            (12) Paragraph (1) of section 1254(a) of such Code is 
        amended--
                    (A) by inserting ``(as in effect before the Transit 
                Commuter Credit Act of 1998)'' after ``617'' in 
                subparagraph (A)(i), and
                    (B) by adding at the end the following: ``For 
                purposes of clause (i), any deduction under section 
                291(b)(2) (as in effect before the Transit Commuter 
                Credit Act of 1998) shall be treated as a deduction 
                allowable under section 263, 616, or 617 (whichever is 
                appropriate).''
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date of the enactment of this Act.

SEC. 402. REPEAL OF PERCENTAGE DEPLETION.

    (a) In General.--Section 613 of the Internal Revenue Code of 1986 
(relating to limitations on percentage depletion in case of oil and gas 
wells) is amended by adding at the end the following new subsection:
    ``(f) Termination.--The allowance under section 611 shall be 
determined without regard to this section for taxable years beginning 
after the date of the enactment of this subsection.''
    (b) Termination of Section 613A.--Section 613A of such Code is 
amended by adding at the end the following new subsection:
    ``(f) Termination.--The allowance under section 611 shall be 
determined without regard to this section for taxable years beginning 
after the date of the enactment of this subsection.''

SEC. 403. REPEAL OF ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Section 43 of the Internal Revenue Code of 1986 is 
hereby repealed.
    (b) Conforming Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 is amended by striking the item 
relating to section 43.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

TITLE V--REPEAL OF EXCLUSION FOR CITIZENS OR RESIDENTS OF UNITED STATES 
                             LIVING ABROAD

SEC. 501. REPEAL OF EXCLUSION FOR CITIZENS OR RESIDENTS OF UNITED 
              STATES LIVING ABROAD.

    Section 911 of the Internal Revenue Code of 1986 (relating to 
citizens or residents of the United States living abroad) is amended by 
redesignating subsection (f) as subsection (g) and by inserting after 
subsection (e) the following new subsection:
    ``(f) Termination.--This section shall not apply to any taxable 
year beginning after the date of the enactment of this Act.''
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