[Congressional Record Volume 147, Number 132 (Thursday, October 4, 2001)]
[Senate]
[Pages S10293-S10295]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KYL (for himself and Mr. Miller):
  S. 1500. A bill to amend the Internal Revenue Code of 1986 to provide 
tax and other incentives to maintain a vibrant travel and tourism 
industry, to keep working people working, and to stimulate economic 
growth, and for other purposes; to the Committee on Finance.
  Mr. KYL. Mr. President, today I rise to introduce critical 
legislation that will help restore confidence in our country's ailing 
travel and tourism industry as well as serve as an immediate stimulus 
to our economy in general.
  As recent economic data have confirmed, our economy was ailing before 
the terrorist attacks on Tuesday, September, 11, but few were talking 
about emergency measures to stimulate it. What is different after 
September 11 is the downward spiral of the economy, led by the travel 
industry.
  Proposals for stimulating the economy have centered on traditional 
arguments as to whether we should focus more on stimulating business 
investment, consumer demand, or infrastructure. Eager for a bipartisan 
approach, members of Congress and President Bush appear agreeable to 
splitting the difference and doing a little of each. To me, that's a 
political solution and it ignores the emergency created in the 
aftermath of September 11.
  I believe that we need to rethink what has happened to our economy to 
arrive at the stimulus legislation that attacks the major problem, and, 
therefore, will do the most overall good.
  Before September 11, our economy was ailing for precisely the reasons 
Federal Reserve Chairman Alan Greenspan articulated, a lack of business 
investment. The terrorist attacks have made the general situation worse 
and caused an absolute emergency in certain sectors of the economy. 
Although I certainly agree that Congress should stimulate business 
investment and shore up consumer expectations, for example, by making 
our recent tax law permanent, cutting capital gains taxes, eliminating 
corporate AMT and accelerating our outdated cost recovery periods, I 
contend that our first focus should be directly on the sector hardest 
hit by these events.
  To illustrate my point, an analogy is useful. Our economy had a bad 
case of the flu before September 11. Reducing interest rates, providing 
tax relief, and cutting regulatory burdens were all part of the 
antibiotic medicine needed to get the economy healthy again. During the 
economy's rehabilitation period, however, it sustained a major trauma. 
Under these circumstances, what should be a first priority, another 
dose of flue medication, or treatment applied directly to the gaping 
wound?
  I believe that we must focus an emergency economic stimulus on the 
sector that has been most harmed: our travel industry. If we are to 
prevent thousands of bankruptcies, hundreds of thousands of lost jobs, 
as well as numerous indirect consequences to the

[[Page S10294]]

rest of the economy, it is essential that we provide some immediate 
help to the travel industry.
  Accordingly, I am introducing legislation that seeks to treat this 
emergency economic situation or wound before it spreads an infection 
throughout the entire economy. Elements of my legislation include: 
Providing a temporary $500 tax credit per person ($1,000 for a couple 
filing jointly) for personal travel expenses for travel originating in 
and within the United States. This will help encourage Americans to 
resume their normal travel habits. Unlike general rebate checks to 
taxpayers, a tax credit conditioned on travel expenses ensures that the 
money is spent on a specific activity, in this case an activity that 
will generate positive economic ripples throughout the entire American 
economy. It will also help create confidence and encourage Americans to 
get back on airplanes.
  Since business travel expenses are already deductible, temporarily 
restoring full deductibility for all business entertainment expenses, 
including meals, that are now subject to a 50 percent limitation, would 
help bring back the backbone of the travel industry, the business 
traveler.
  Finally, in order to provide tax relief to those travel-related 
businesses most hurt by the terrorist attacks, Congress should allow 
these companies to ``carry back'' their losses incurred after September 
11, for a temporary period of three additional years, a total, 
temporary, ``carry back'' period of five years. This will allow 
companies that have been profitable until September 11, but then lost 
money in excess of the past two years' amount of profit, to offset 
previous years' profit. Without this relief, many companies will go 
bankrupt, solely due to the terrorist attacks.
  To be quick and temporary, the credit should be available for 
expenses incurred before December 31, 2001. The travel could occur 
later.
  This legislation meets the criteria set forth by President Bush and 
the chairman of the Finance Committee. By definition, the relief would 
be temporary. The revenue loss attributable to this legislation for 
2001 should occur no later than 2002 and so there would not be a long-
term, negative drag on our federal budget. In fact, I believe that it 
would help ensure a positive, long-term budgetary position by getting 
America moving and doing business again. As for the need to stimulate 
consumer spending, providing consumers with incentives to travel is 
clearly a demand-driven idea. I also contend that it will help stem the 
retrenchment in business investment that the economy is experiencing in 
the travel industry and many related industries. Finally, travel is not 
a partisan issue, it is one of the most bipartisan of all issues.
  As Secretary O' Neill said before the Finance Committee on October 3, 
``The medicine has to work and be worth the cost.'' Without airline 
travel, collateral consequences to related industries will be 
substantial. Of all the competing proposals I can think of, none more 
directly affects the major cause of the problem in our economy.
  So there it is. Our economy has sustained a specific trauma. We need 
a quick and focused response to this emergency condition. the ``Travel 
America Now Act'' provides the right medicine for the most acute 
problem. I urge my colleagues to join me and support this legislation.
  Mr. President, I ask unanimous consent that the text of this bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1500

       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 ``Travel America Now Act of 
     2001''.

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) Prior to September 11, 2001, more than 19,000,000 
     Americans were employed in travel and travel-related jobs, 
     with an estimated annual payroll of $171,500,000,000.
       (2) In recent years, the travel and tourism industry has 
     grown to be the third largest industry in the United States 
     as measured by retail sales, with over $582,000,000,000 in 
     expenditures, generating over $99,600,000,000 in Federal, 
     State, and local tax revenues in 2000.
       (3) In 2000, the travel and tourism industry created a 
     $14,000,000,000 balance of trade surplus for the United 
     States.
       (4) The travel and tourism industry and all levels of 
     government are working together to ensure that, following the 
     horrific terrorist attacks on the World Trade Center and the 
     Pentagon on September 11, 2001, travel is safe and secure, 
     and that confidence among travelers is maintained.
       (5) Urgent, short-term measures are necessary to keep 
     working people working and to generate cash flow to assist 
     the travel and tourism industry in its ongoing efforts to 
     retain its economic footing.
       (6) Increased consumer spending on travel and tourism is 
     essential to revitalizing the United States economy.
       (7) The American public should be encouraged to travel for 
     personal, as well as business, reasons as a means of keeping 
     working people working and generating cash flow that can help 
     stimulate a rebound in the Nation's economy.

     SEC. 3. PERSONAL TRAVEL CREDIT.

       (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 25B the following new section:

     ``SEC. 25C. PERSONAL TRAVEL CREDIT.

       ``(a) Allowance of Credit.--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 the 
     qualified personal travel expenses which are paid or incurred 
     by the taxpayer on or after the date of the enactment of this 
     section and before January 1, 2002.
       ``(b) Maximum Credit.--The credit allowed to a taxpayer 
     under subsection (a) for any taxable year shall not exceed 
     $500 ($1,000, in the case of a joint return).
       ``(c) Qualified Personal Travel Expenses.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified personal travel 
     expenses' means reasonable expenses in connection with a 
     qualifying personal trip for--
       ``(A) travel by aircraft, rail, watercraft, or motor 
     vehicle, and
       ``(B) lodging while away from home at any commercial 
     lodging facility.
     Such term does not include expenses for meals, entertainment, 
     amusement, or recreation.
       ``(2) Qualifying personal trip.--
       ``(A) In general.--The term `qualifying personal trip' 
     means travel within the United States--
       ``(i) the farthest destination of which is at least 100 
     miles from the taxpayer's residence,
       ``(ii) involves an overnight stay at a commercial lodging 
     facility and
       ``(iii) which is taken on or after the date of the 
     enactment of this section.
       ``(B) Only personal travel included.--Such term shall not 
     include travel if, without regard to this section, any 
     expenses in connection with such travel are deductible in 
     connection with a trade or business or activity for the 
     production of income.
       ``(3) Commercial lodging facility.--The term `commercial 
     lodging facility' includes any hotel, motel, resort, rooming 
     house, or campground.
       ``(d) Special Rules.--
       ``(1) Denial of credit to dependents.--No credit shall be 
     allowed under this section to any individual with respect to 
     whom a deduction under section 151 is allowable to another 
     taxpayer for a taxable year beginning in the calendar year in 
     which such individual's taxable year begins.
       ``(2) Expenses Must Be Substantiated.--No credit shall be 
     allowed by subsection (a) unless the taxpayer substantiates 
     by adequate records or by sufficient evidence corroborating 
     the taxpayer's own statement the amount of the expenses 
     described in subsection (c)(1).
       ``(e) Denial of Double Benefit.--No deduction shall be 
     allowed under this chapter for any expense for which credit 
     is allowed under this section.''.
       (b) Conforming Amendment.--The table of sections for 
     subpart A of part IV of subchapter A of chapter 1 of the 
     Internal Revenue Code of 1986 is amended by inserting before 
     the item relating to section 26 the following new item:

``Sec. 25C. Personal travel credit.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 4. TEMPORARY INCREASE IN DEDUCTION FOR BUSINESS MEALS 
                   AND ENTERTAINMENT.

       (a) In General.--Subsection (n) of section 274 of the 
     Internal Revenue Code of 1986 (relating to only 50 percent of 
     meal and entertainment expenses allowed as deduction) is 
     amended by adding at the end the following new paragraph:
       ``(4) Temporary increase in limitation.--With respect to 
     any expense or item paid or incurred on or after the date of 
     the enactment of this paragraph and before January 1, 2002, 
     paragraph (1) shall be applied by substituting `100 percent' 
     for `50 percent'.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years ending after the date of the 
     enactment of this Act.

     SEC. 5. NET OPERATING LOSS CARRYBACK FOR TRAVEL AND TOURISM 
                   INDUSTRY.

       (a) In General.--Paragraph (1) of section 172(b) of the 
     Internal Revenue Code of 1986

[[Page S10295]]

     (relating to years to which loss may be carried) is amended 
     by adding at the end the following new subparagraph:
       ``(H) Travel and tourism industry losses.--In the case of a 
     taxpayer which has a travel or tourism loss (as defined in 
     subsection (j)) for a taxable year that includes any portion 
     of the period beginning on or after September 12, 2001, and 
     ending before January 1, 2002, such travel or tourism loss 
     shall be a net operating loss carryback to each of the 5 
     taxable years preceding the taxable year of such loss.''.
       (b) Special Rules for Travel and Tourism Industry Losses.--
     Section 172 of the Internal Revenue Code of 1986 (relating to 
     net operating loss deduction) is amended by redesignating 
     subsection (j) as subsection (k) and by inserting after 
     subsection (i) the following new subsection:
       ``(j) Rules Relating to Travel and Tourism Industry 
     Losses.--For purposes of this section--
       ``(1) In general.--The term `travel or tourism loss' means 
     the lesser of--
       ``(A) the amount which would be the net operating loss for 
     the taxable year if only income and deductions attributable 
     to the travel or tourism businesses are taken into account, 
     or
       ``(B) the amount of the net operating loss for such taxable 
     year.
       ``(2) Travel or tourism business.--The term `travel or 
     tourism business' includes the active conduct of a trade or 
     business directly related to travel or tourism, including--
       ``(A) the provision of commercial transportation (including 
     rentals) or lodging,
       ``(B) the operation of airports or other transportation 
     facilities or the provision of services or the sale of 
     merchandise within such facilities,
       ``(C) the provision of services as a travel agent,
       ``(D) the operation of convention, trade show, or 
     entertainment facilities, and
       ``(E) the provision of other services as specified by the 
     Secretary.
       ``(3) Coordination with subsection (b)(2).--For purposes of 
     applying subsection (b)(2), a travel or tourism loss for any 
     taxable year shall be treated in a manner similar to the 
     manner in which a specified liability loss is treated.
       ``(4) Election.--Any taxpayer entitled to a 5-year 
     carryback under subsection (b)(1)(H) from any loss year may 
     elect to have the carryback period with respect to such loss 
     year determined without regard to subsection (b)(1)(H). Such 
     election shall be made in such manner as may be prescribed by 
     the Secretary and shall be made by the due date (including 
     extensions of time) for filing the taxpayer's return for the 
     taxable year of the net operating loss. Such election, once 
     made for any taxable year, shall be irrevocable for such 
     taxable year.
       ``(5) Related taxpayers.--Under regulations prescribed by 
     the Secretary and at the election of a taxpayer entitled to a 
     5-year carryback under subsection (b)(1)(H) with respect to a 
     travel or tourism loss, such loss may be credited against the 
     taxable income earned during the 5-year carryback period by 
     any member of a controlled group of corporations (as defined 
     in section 1563(a)) of which the taxpayer is a component or 
     additional member within the meaning of section 1563(b).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending before, on, or after the 
     date of the enactment of this Act.
                                 ______