HR 2203 IH
106th CONGRESS
1st Session
H. R. 2203
To eliminate corporate welfare.
IN THE HOUSE OF REPRESENTATIVES
June 15, 1999
Mr. ANDREWS introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committees on Resources,
Agriculture, Commerce, Transportation and Infrastructure, and the Budget, 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 eliminate 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; TABLE OF CONTENTS.
(a) SHORT TITLE- This Act may be cited as the `Corporate Welfare
Elimination Act of 1999'.
Sec. 1. Short title; table of contents.
TITLE I--TAX REFORM
Sec. 101. Short title; references to Internal Revenue Code of
1986.
Sec. 102. Repeal of expensing of intangible drilling and development
costs and of mining exploration and development costs.
Sec. 103. Termination of credit for producing fuel from nonconventional
source.
Sec. 104. Repeal of percentage depletion.
Sec. 105. Repeal of tax benefits for alcohol fuels.
Sec. 106. Repeal of enhanced oil recovery credit.
Sec. 107. Repeal of credit and deduction for electric vehicles,
clean-fuel vehicles, and certain refueling property.
Sec. 108. Repeal of deduction for tertiary injectants.
Sec. 109. Repeal of rehabilitation credit for nonhistoric structures;
reduction of rehabilitation credit for certified historic structures.
Sec. 110. Repeal of treatment of blue cross and blue shield
organizations, etc.
Sec. 111. Repeal of small life insurance company deduction.
Sec. 112. Repeal of alternative tax on small property and casualty
insurance companies.
Sec. 113. Cash accounting and expensing for agriculture.
Sec. 114. Repeal of exclusion for cancellation of qualified farm
indebtedness.
Sec. 115. Repeal of exclusion for certain cost-sharing payments.
Sec. 116. Reduction of expensing of timber-growing costs.
Sec. 117. Repeal of reforestation credit.
Sec. 118. Repeal of rapid amortization of reforestation
expenditures.
Sec. 119. Termination of exclusion of certain income of citizens or
residents of United States living abroad.
Sec. 120. Repeal of exclusion for income of foreign sales
corporations.
Sec. 121. Repeal of deferral of income of controlled foreign
corporations.
Sec. 122. Repeal of deferral of tax under merchant marine capital
constructions funds.
Sec. 123. Repeal of special treatment for magazine circulation
expenditures.
Sec. 124. Repeal of special treatment for returns of magazines,
paperbacks, and records.
TITLE II--NATURAL RESOURCES
Sec. 201. Public Resources Deficit Reduction Act of 1999.
Subtitle A--General Provisions
Sec. 211. Fair market value for resource disposal.
Sec. 212. Fees from program beneficiaries.
Sec. 213. Revenues from sale, lease, and transfer of assets.
Subtitle B--Revenue From Mining Claims
Sec. 222. Mining claim maintenance requirements.
Sec. 225. Fund for abandoned locatable minerals mine reclamation.
Sec. 226. Limitation on patent issuance.
Sec. 227. Purchasing power adjustment.
Sec. 228. Savings clause.
Sec. 229. Effective date.
Subtitle C--Use or Disposal of Federal Natural Resources
Sec. 241. Annual domestic livestock grazing fee.
Sec. 242. Elimination of below-cost sales of timber from National Forest
System lands.
Sec. 243. Timberland suitability.
Sec. 244. Reduction in maximum amount of payments under agricultural
assistance programs to reflect receipt of Federal irrigation water.
Sec. 245. Elimination of off budget expenditures.
Sec. 246. Deposit of Taylor Grazing Act receipts in Treasury.
Sec. 247. Repeal of livestock feed assistance program.
Sec. 248. Oil and gas rentals.
Sec. 249. Communication permits.
TITLE I--TAX REFORM
SEC. 101. SHORT TITLE; REFERENCES TO INTERNAL REVENUE CODE OF 1986.
(a) SHORT TITLE- This title may be cited as the `Termination of Energy and
Natural Resource Tax Subsidies Act of 1999'.
(b) REFERENCES TO INTERNAL REVENUE CODE OF 1986- Except as otherwise
expressly provided, whenever in this title an amendment or repeal is expressed
in terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a
section or other provision of the Internal Revenue Code of 1986.
SEC. 102. 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) is hereby
repealed.
(b) DEVELOPMENT EXPENDITURES- Section 616 (relating to development
expenditures) is hereby repealed.
(c) EXPLORATION EXPENDITURES- Subsection (i) of section 617 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) is hereby repealed.
(2) Subsection (a) of section 57 is amended by striking paragraph
(2).
(3) Paragraph (2) of section 59(e) 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) is amended by inserting before
the period `, as in effect before the Termination of Energy and Natural
Resource Tax Subsidies Act of 1999'.
(5) Subsection (c) of section 193 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) is amended by striking subparagraph
(A) and by redesignating the succeeding subparagraphs accordingly.
(7) Section 263 is amended by striking subsection (i).
(8) Subsection (c) of section 263A is amended by striking paragraph (3)
and by redesignating the succeeding paragraphs accordingly.
(9) Paragraph (5) of section 263A(c), as redesignated by paragraph (8),
is amended by striking `subparagraphs (B), (C), (D), and (E)' and inserting
`subparagraph (B)'.
(10) Section 291 is amended by striking subsection (b).
(11) Subsection (n) of section 312 is amended by striking paragraph
(2).
(12) Paragraph (1) of section 1254(a) is amended--
(A) by inserting `(as in effect before the Termination of Energy and
Natural Resource Tax Subsidies Act of 1999)' 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 Termination
of Energy and Natural Resource Tax Subsidies Act of 1999) shall be treated
as a deduction allowable under section 263, 616, or 617 (whichever is
appropriate).'
(c) 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. 103. TERMINATION OF CREDIT FOR PRODUCING FUEL FROM NONCONVENTIONAL
SOURCE.
Section 29 is amended by adding at the end the following new
subsection:
`(h) TERMINATION- Notwithstanding any other provision of this section, no
credit shall be allowed under this section with respect to any qualified fuels
produced by a facility placed in service after December 31, 1999.'
SEC. 104. REPEAL OF PERCENTAGE DEPLETION.
(a) IN GENERAL- Section 613 (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 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. 105. REPEAL OF TAX BENEFITS FOR ALCOHOL FUELS.
(a) REPEAL OF ALCOHOL FUELS CREDIT-
(1) IN GENERAL- Section 40 (relating to alcohol used as fuel) is hereby
repealed.
(2) CONFORMING AMENDMENTS-
(A) Subsection (b) of section 38 is amended by striking paragraph (3)
and by redesignating the following paragraphs accordingly.
(B) Section 87 is hereby repealed.
(C) Subsection (c) of section 196 is amended by striking paragraph (3)
and by redesignating the following paragraphs accordingly.
(D) Subsection (m) of section 6501 is amended by striking
`40(f)'.
(E) 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 40.
(F) The table of sections for part II of subchapter B of chapter 1 is
amended by striking the item relating to section 87.
(3) EFFECTIVE DATE- The amendments made by this subsection shall apply
to taxable years beginning after the date of the enactment of this
Act.
(b) REPEAL OF REDUCED FUEL TAX RATES-
(1) GASOLINE AND DIESEL FUEL- Section 4081 is amended by striking
subsection (c) and by redesignating subsections (d) and (e) as subsections
(c) and (d), respectively.
(2) AVIATION FUEL- Section 4091 is amended by striking subsection
(c).
(A) Section 4041 is amended by striking subsections (k) and
(m).
(B) Subsection (b) of section 4041 is amended by striking paragraph
(2).
(4) CONFORMING AMENDMENTS-
(A) Section 6427 is amended by striking subsection (f).
(B) Subsection (i) of section 6427 is amended by striking paragraph
(3) and by redesignating paragraph (4) as paragraph (3).
(C) Paragraph (3) of section 6427(i), as redesignated by subparagraph
(B), is amended by striking the last sentence of subparagraph (A) and
inserting the following new flush sentence:
`Notwithstanding subsection (l)(1), if the Secretary has not paid
pursuant to a claim filed under the preceding sentence within 20 days of
the date of the filing of such claim, the claim shall be paid with
interest from such date determined by using the overpayment rate and
method under section 6621.'
(D) Section 9502 is amended by striking subsection (e).
(E) Subsection (b) of section 9503 is amended by striking paragraph
(5).
(5) EFFECTIVE DATE- The amendments made by this subsection shall take
effect on the date of the enactment of this Act.
SEC. 106. REPEAL OF ENHANCED OIL RECOVERY CREDIT.
(a) IN GENERAL- Section 43 is hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) Subsection (b) of section 38 is amended by striking paragraph (5),
as redesignated by section 105, and by redesignating the succeeding
paragraphs accordingly.
(2) 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 December 31, 1999.
SEC. 107. REPEAL OF CREDIT AND DEDUCTION FOR ELECTRIC VEHICLES, CLEAN-FUEL
VEHICLES, AND CERTAIN REFUELING PROPERTY.
(a) REPEAL OF CREDIT FOR QUALIFIED ELECTRIC VEHICLES- Section 30 is hereby
repealed.
(b) REPEAL OF DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN REFUELING
PROPERTY- Section 179A is hereby repealed.
(c) CONFORMING AMENDMENTS-
(1) Paragraph (24) of section 1016(a) is amended by inserting `(as in
effect on the day before the date of the enactment of the Corporate Welfare
Elimination Act of 1999)' after `section 179A(e)(6)(A)'.
(2) Paragraph (25) of section 1016(a) is amended by inserting `(as in
effect on the day before the date of the enactment of the Corporate Welfare
Elimination Act of 1999)' after `section 30(d)(1)'.
(3) The table of sections for subpart B of part IV of subchapter A of
chapter 1 is amended by striking the item relating to section 30.
(4) The table of sections for part VI of subchapter B of chapter 1 is
amended by striking the item relating to section 179A.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 108. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.
(a) IN GENERAL- Section 193 (relating to tertiary injectants) is hereby
repealed.
(b) CLERICAL AMENDMENT- The table of sections for part VI of subchapter B
of chapter 1 is amended by striking the item relating to section 193.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 109. REPEAL OF REHABILITATION CREDIT FOR NONHISTORIC STRUCTURES;
REDUCTION OF REHABILITATION CREDIT FOR CERTIFIED HISTORIC STRUCTURES.
(a) IN GENERAL- Subsection (a) of section 47 is amended to read as
follows:
`(a) GENERAL RULE- For purposes of section 46, the rehabilitation credit
for any taxable year is 15 percent of the qualified rehabilitation
expenditures with respect to any certified historic structure.'
(b) CONFORMING AMENDMENTS-
(1) Subparagraph (A) of section 47(c)(1) is amended by adding `and' at
the end of clause (ii), by striking clause (iii) and by redesignating clause
(iv) as clause (iii).
(2) Paragraph (1) of section 47(c) is amended by striking subparagraph
(B) and by redesignating subparagraphs (C) and (D) as subparagraphs (B) and
(C), respectively.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
property placed in service after December 31, 1999.
SEC. 110. REPEAL OF TREATMENT OF BLUE CROSS AND BLUE SHIELD ORGANIZATIONS,
ETC.
(a) IN GENERAL- Section 833 (relating to treatment of Blue Cross and Blue
Shield organizations, etc.) is hereby repealed.
(b) CLERICAL AMENDMENT- The table of sections for part II of subchapter L
of chapter 1 is amended by striking the item relating to section 833.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 111. REPEAL OF SMALL LIFE INSURANCE COMPANY DEDUCTION.
(a) IN GENERAL- Section 806 is hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) The text of section 804 is amended to read as follows:
`For purposes of this part, the term `life insurance deductions' means the
general deductions provided in section 805.'
(2) Subparagraph (A) of section 815(c)(2) is amended by adding `and' at
the end of clause (i), by striking clause (ii), and by redesignating clause
(iii) as clause (ii).
(3) Subparagraph (B) of section 453B(e)(2) is amended by striking `(as
defined in section 806(b)(3))'.
(4) Subsection (e) of section 453B is amended by adding at the end the
following new paragraph:
`(3) NONINSURANCE BUSINESS- For purposes of paragraph (2)--
`(A) IN GENERAL- The term `noninsurance business' means any activity
which is not an insurance business.
`(B) CERTAIN ACTIVITIES TREATED AS INSURANCE BUSINESSES- For purposes
of subparagraph (A), any activity which is not an insurance business shall
be treated as an insurance business if--
`(i) it is of a type traditionally carried on by life insurance
companies for investment purposes, but only if the carrying on of such
activity (other than in the case of real estate) does not constitute the
active conduct of a trade or business, or
`(ii) it involves the performance of administrative services in
connection with plans providing life insurance, pension, or accident and
health benefits.'
(5) Subclause (II) of section 465(c)(7)(D)(v) is amended by striking
`(within the meaning of section 806(b)(3))' and inserting `(within the
meaning of section 453B(e)(3))'.
(6) The table of sections for subpart C of part I of subchapter L of
chapter 1 is amended by striking the item relating to section 806.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 112. REPEAL OF ALTERNATIVE TAX ON SMALL PROPERTY AND CASUALTY INSURANCE
COMPANIES.
(a) IN GENERAL- Section 831 (relating to tax on insurance companies other
than life insurance companies) is amended by striking subsection (b) and by
redesignating subsection (c) as subsection (b).
(b) CONFORMING AMENDMENTS-
(1) Subparagraph (C) of section 501(c)(15) is amended to read as
follows:
`(C) For purposes of subparagraph (B), the term `controlled group'
means any controlled group of corporations (as defined in section
1563(a)); except that--
`(i) `more than 50 percent' shall be substituted for `at least 80
percent' each place it appears in section 1563(a), and
`(ii) subsections (a)(4) and (b)(2)(D) of section 1563 shall not
apply.'
(2) Sections 832(b)(7)(D)(ii) and 834(a) are each amended by inserting
`(as in effect on the day before the date of the enactment of the Corporate
Welfare Elimination Act of 1999)' after `831(b)'.
(3) Sections 904(b)(3)(D) and 1201(a) are each amended by striking
`831(a) or (b)' and inserting `831(a)'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 113. CASH ACCOUNTING AND EXPENSING FOR AGRICULTURE.
(a) REPEAL OF PROVISIONS PERMITTING FARMING BUSINESSES TO USE CASH METHOD
OF ACCOUNTING-
(1) Section 447 is amended by striking subsections (g), (h), and
(i).
(2) Subsection (b) of section 448 is amended by striking paragraph
(1).
(b) REPEAL OF DEDUCTION FOR SOIL AND WATER CONSERVATION EXPENDITURES-
(1) IN GENERAL- Section 175 (relating to soil and water conservation
expenditures) is hereby repealed.
(2) CLERICAL AMENDMENT- The table of sections for part VI of subchapter
B of chapter 1 is amended by striking the item relating to section
175.
(c) REPEAL OF DEDUCTION FOR EXPENDITURES BY FARMERS FOR FERTILIZER,
ETC-
(1) IN GENERAL- Section 180 (relating to expenditures by farmers for
fertilizer, etc) is hereby repealed.
(2) CLERICAL AMENDMENT- The table of sections for part VI of subchapter
B of chapter 1 is amended by striking the item relating to section
180.
(d) REPEAL OF CERTAIN EXCEPTIONS PERMITTING CERTAIN FARM BUSINESS TO USE
CASH METHOD OF ACCOUNTING- Section 447 (relating to method of accounting for
corporations engaged in farming) is amended by striking subsections (d)(2),
(e), (g), (h), and (i).
(e) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 114. REPEAL OF EXCLUSION FOR CANCELLATION OF QUALIFIED FARM
INDEBTEDNESS.
(a) IN GENERAL- Paragraph (1) of section 108(a) is amended by inserting
`or' at the end of subparagraph (B), by striking subparagraph (C), and by
redesignating subparagraph (D) as subparagraph (C).
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 115. REPEAL OF EXCLUSION FOR CERTAIN COST-SHARING PAYMENTS.
(a) IN GENERAL- Section 126 (relating to certain cost-sharing payments) is
hereby repealed.
(b) CLERICAL AMENDMENT- The table of sections for part III of subchapter B
of chapter 1 is amended by striking the item relating to section 126.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 116. REDUCTION OF EXPENSING OF TIMBER-GROWING COSTS.
(a) IN GENERAL- Paragraph (5) of section 263A(c) (relating to general
exceptions) is amended by striking `This section shall not apply to' and
inserting `This section shall not apply to 2/3 of the costs described in
subsection (a)(2) with respect to'.
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 117. REPEAL OF REFORESTATION CREDIT.
(a) IN GENERAL- Subsection (b) of section 48 is hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) The heading of section 48 is amended to read as follows:
`SEC. 48. ENERGY CREDIT.'
(2) The table of sections for subpart E of part IV of subchapter A of
chapter 1 is amended by amending the item relating to section 48 to read as
follows:
`Sec. 48. Energy credit.'
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 118. REPEAL OF RAPID AMORTIZATION OF REFORESTATION EXPENDITURES.
(a) IN GENERAL- Section 194 is hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) Subsection (a) of section 62 is amended by striking paragraph
(11).
(2) Subsections (a)(3)(C) and (b)(8) of section 1245 are each amended by
inserting `(as in effect
before its repeal by the Corporate Welfare Elimination Act of 1999)' after
`section 194'.
(3) The table of sections for part VI of subchapter B of chapter 1 is
amended by striking the item relating to section 194.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 119. TERMINATION OF EXCLUSION OF CERTAIN INCOME OF CITIZENS OR
RESIDENTS OF UNITED STATES LIVING ABROAD.
(a) IN GENERAL- Section 911 (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 December 31, 1999.'
(b) EFFECTIVE DATE- The amendment made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 120. REPEAL OF EXCLUSION FOR INCOME OF FOREIGN SALES CORPORATIONS.
(a) IN GENERAL- Subpart C of part III of subchapter N of chapter 1
(relating to taxation of foreign sales corporations) is hereby repealed.
(b) CLERICAL AMENDMENT- The table of subparts for such part III is amended
by striking the item relating to subpart C.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
SEC. 121. REPEAL OF DEFERRAL OF INCOME OF CONTROLLED FOREIGN
CORPORATIONS.
(a) GENERAL RULE- Subpart F of part III of subchapter N of chapter 1 is
amended by striking sections 952, 953, and 954 and inserting the following new
sections:
`SEC. 952. SUBPART F INCOME.
`(a) GENERAL RULE- For purposes of this subpart, the term `subpart F
income' means the earnings and profits of the controlled foreign corporation
for the taxable year computed with the following adjustments:
`(1) There shall be excluded the amount of the earnings and profits
which are attributable to income from sources within the United States which
is effectively connected with the conduct by the controlled foreign
corporation of a trade or business within the United States, except to the
extent such income is exempt from taxation (or subject to a reduced rate of
tax) pursuant to a treaty obligation of the United States. For purposes of
the preceding sentence, income described in paragraph (2) or (3) of section
921(d) shall be treated as derived from sources within the United
States.
`(2) In determining earnings and profits (or the deficit in earnings and
profits), the amount of any illegal bribe, kickback, or other payment
(within the meaning of section 162(c), except as otherwise provided in this
paragraph) shall not be taken into account to decrease such earnings and
profits or to increase such deficit. The payments referred to in the
preceding sentence include payments which would be unlawful under the
Foreign Corrupt Practices Act of 1977 if the payor were a United States
person.
`(3) Under regulations prescribed by the Secretary, there shall be
excluded any part of any earnings and profits if it is established to the
satisfaction of the Secretary that such part could not have been distributed
by the controlled foreign corporation to United States shareholders who own
(within the meaning of section 958(a)) stock of such controlled foreign
corporation because of currency or other restrictions or limitations imposed
under the laws of any foreign country.
`(4) Earnings and profits shall be determined without regard to
paragraphs (4), (5), and (6) of section 312(n). Under regulations, the
preceding sentence shall not apply to the extent it would increase earnings
and profits by an amount which was previously distributed by the controlled
foreign corporation.
Except as provided in this subsection and section 312(k)(4), the earnings
and profits of any foreign corporation, and the deficit and earnings and
profits of any foreign corporation for any taxable year shall be determined
according to rules similar to those applicable to domestic corporations, under
regulations prescribed by the Secretary.
`(b) CERTAIN DEFICITS MAY BE TAKEN INTO ACCOUNT-
`(1) TREATMENT OF CERTAIN PRIOR YEAR DEFICITS-
`(A) IN GENERAL- The amount included in the gross income of any United
States shareholder under section 951(a)(1)(A)(i) for any taxable year with
respect to any controlled foreign corporation shall be reduced by the
amount of such shareholder's pro rata share of any qualified deficit of
such controlled foreign corporation.
`(B) QUALIFIED DEFICIT- For purposes of this paragraph--
`(i) IN GENERAL- The term `qualified deficit' means any deficit in
the earnings and profits of the controlled foreign corporation for any
prior taxable year which began after December 31, 1999, and for which
such corporation was a controlled foreign corporation, but only to the
extent such deficit has not previously been taken into account under
this paragraph.
`(ii) SPECIAL RULE FOR DEFICITS BEFORE 2000- The term `qualified
deficit' includes any deficit in earnings and profits for any taxable
year beginning before January 1, 2000, to the extent that such deficit
qualified as a qualified deficit under subsection (c)(1)(B) of this
section (as in effect on the day before the date of the enactment of
this subsection); except that
any such deficit may be taken into account under this paragraph only to
offset amounts attributable to the same activity as the activity giving rise to
such deficit.
`(C) PRO RATA SHARE- For purposes of this paragraph, the shareholder's
pro rata share of any deficit shall be determined under rules similar to
the rules of section 951(a)(2) for whichever of the following yields the
smallest share:
`(i) the close of the taxable year, or
`(ii) the close of the taxable year in which the deficit
arose.
`(2) CERTAIN DEFICITS OF MEMBER OF THE SAME CHAIN OF CORPORATIONS MAY BE
TAKEN INTO ACCOUNT-
`(A) IN GENERAL- A controlled foreign corporation may elect to reduce
the amount of its subpart F income for any taxable year by the amount of
any deficit in earnings and profits of a qualified chain member for a
taxable year ending with (or within) the taxable year of such controlled
foreign corporation. To the extent any deficit reduces subpart F income
under the preceding sentence, such deficit shall not be taken into account
under paragraph (1).
`(B) QUALIFIED CHAIN MEMBER- For purposes of this paragraph, the term
`qualified chain member' means, with respect to any controlled foreign
corporation, any other corporation which is created or organized under the
laws of the same foreign country as the controlled foreign corporation but
only if--
`(i) all the stock of such other corporation (other than directors'
qualifying shares) is owned at all times during the taxable year in
which the deficit arose (directly or through 1 or more corporations
other than the common parent) by such controlled foreign corporation,
or
`(ii) all the stock of such controlled foreign corporation (other
than directors' qualifying shares) is owned at all times during the
taxable year in which the deficit arose (directly or through 1 or more
corporations other than the common parent) by such other
corporation.
`(C) COORDINATION- This paragraph shall be applied after paragraph
(1).
`(3) DETERMINATION OF DEFICIT- In determining the amount of any deficit
in earnings and profits, the adjustments set forth in subsection (a) shall
apply.
`SEC. 953. SPECIAL RULES FOR CERTAIN INSURANCE COMPANIES.
`(a) SPECIAL RULE FOR CERTAIN CAPTIVE INSURANCE COMPANIES-
`(1) IN GENERAL- For purposes only of taking into account subpart F
income which is attributable to related person insurance income--
`(A) the term `United States shareholder' means, with respect to any
foreign corporation, a United States person (as defined in section 957(c))
who owns (within the meaning of section 958(a)) any stock of the foreign
corporation,
`(B) the term `controlled foreign corporation' has the meaning given
to such term by section 957(a) determined by substituting `25 percent or
more' for `more than 50 percent', and
`(C) the pro rata share referred to in section 951(a)(1)(A)(i) shall
be determined under paragraph (5) of this subsection.
`(2) RELATED PERSON INSURANCE INCOME- For purposes of this subsection,
the term `related person insurance income' means any insurance income
(within the meaning of subsection (c)) attributable to a policy of insurance
or reinsurance with respect to which the person (directly or indirectly)
insured is a United States shareholder in the foreign corporation or a
related person to such a shareholder.
`(A) CORPORATIONS NOT HELD BY INSUREDS- Paragraph (1) shall not apply
to any foreign corporation if at all times during the taxable year of such
foreign corporation--
`(i) less than 20 percent of the total combined voting power of all
classes of stock of such corporation entitled to vote, and
`(ii) less than 20 percent of the total value of such
corporation,
is owned (directly or indirectly) under the principles of section
883(c)(4) by persons who are (directly or indirectly) insured under any
policy of insurance or reinsurance issued by such corporation or who are
related persons to any such person.
`(B) DE MINIMIS EXCEPTION- Paragraph (1) shall not apply to any
foreign corporation for a taxable year of such corporation if the related
person insurance income (determined on a gross basis) of such corporation
for such taxable year is less than 20 percent of its insurance income (as
so determined) for such taxable year determined without regard to those
provisions of subsection (c)(1) which limit insurance income to income
from countries other than the country in which the corporation was created
or organized.
`(C) ELECTION TO TREAT INCOME AS EFFECTIVELY CONNECTED- Paragraph (1)
shall not apply to any foreign corporation for any taxable year
if--
`(i) such corporation elects (at such time and in such manner as the
Secretary may prescribe)--
`(I) to treat its related person insurance income for such taxable
year as income effectively connected with
the conduct of a trade or business in the United States, and
`(II) to waive all benefits (other than with respect to section
884) with respect to related person insurance income granted by the
United States under any treaty between the United States and any
foreign country, and
`(ii) such corporation meets such requirements as the Secretary
shall prescribe to ensure that the tax imposed by this chapter on such
income is paid.
An election under this subparagraph made for any taxable year shall
not be effective if the corporation (or any predecessor thereof) was a
disqualified corporation for the taxable year for which the election was
made or for any prior taxable year beginning after 1986.
`(D) SPECIAL RULES FOR SUBPARAGRAPH (C)-
`(i) PERIOD DURING WHICH ELECTION IN EFFECT-
`(I) IN GENERAL- Except as provided in subclause (II), any
election under subparagraph (C) shall apply to the taxable year for
which made and all subsequent taxable years unless revoked with the
consent of the Secretary.
`(II) TERMINATION- If a foreign corporation which made an election
under subparagraph (C) for any taxable year is a disqualified
corporation for any subsequent taxable year, such election shall not
apply to any taxable year beginning after such subsequent taxable
year.
`(ii) EXEMPTION FROM TAX IMPOSED BY SECTION 4371- The tax imposed by
section 4371 shall not apply with respect to any related person
insurance income treated as effectively connected with the conduct of a
trade or business within the United States under subparagraph
(C).
`(E) DISQUALIFIED CORPORATION- For purposes of this paragraph the term
`disqualified corporation' means, with respect to any taxable year, any
foreign corporation which is a controlled foreign corporation for an
uninterrupted period of 30 days or more during such taxable year
(determined without regard to this subsection) but only if a United States
shareholder (determined without regard to this subsection) owns (within
the meaning of section 958(a)) stock in such corporation at some time
during such taxable year.
`(4) TREATMENT OF MUTUAL INSURANCE COMPANIES- In the case of a mutual
insurance company--
`(A) this subsection shall apply,
`(B) policyholders of such company shall be treated as shareholders,
and
`(C) appropriate adjustments in the application of this subpart shall
be made under regulations prescribed by the Secretary.
`(5) DETERMINATION OF PRO RATA SHARE-
`(A) IN GENERAL- The pro rata share determined under this paragraph
for any United States shareholder is the lesser of--
`(i) the amount which would be determined under paragraph (2) of
section 951(a) if--
`(I) only related person insurance income were taken into
account,
`(II) stock owned (within the meaning of section 958(a)) by United
States shareholders on the last day of the taxable year were the only
stock in the foreign corporation, and
`(III) only distributions received by United States shareholders
were taken into account under subparagraph (B) of such paragraph (2),
or
`(ii) the amount which would be determined under paragraph (2) of
section 951(a) on the basis of the entire subpart F income of the
foreign corporation for the taxable year.
`(B) COORDINATION WITH OTHER PROVISIONS- The Secretary shall prescribe
regulations providing for such modifications to the provisions of this
subpart as may be necessary or appropriate by reason of subparagraph
(A).
`(6) RELATED PERSON- For purposes of this subsection--
`(A) IN GENERAL- Except as provided in subparagraph (B), the term
`related person' has the meaning given such term by section
964(a).
`(B) TREATMENT OF CERTAIN LIABILITY INSURANCE POLICIES- In the case of
any policy of insurance covering liability arising from services performed
as a director, officer, or employee of a corporation or as a partner or
employee of a partnership, the person performing such services and the
entity for which such services are performed shall be treated as related
persons.
`(7) COORDINATION WITH SECTION 1248- For purposes of section 1248, if
any person is (or would be but for paragraph (3)) treated under paragraph
(1) as a United States shareholder with respect to any foreign corporation
which would be taxed under subchapter L if it were a domestic corporation
and which is (or would be but for paragraph (3)) treated under paragraph (1)
as a controlled foreign corporation--
`(A) such person shall be treated as meeting the stock ownership
requirements of section 1248(a)(2) with respect to such foreign
corporation, and
`(B) such foreign corporation shall be treated as a controlled foreign
corporation.
`(8) REGULATIONS- The Secretary shall prescribe such regulations as may
be necessary to carry out the purposes of this subsection, including--
`(A) regulations preventing the avoidance of this subsection through
cross insurance arrangements or otherwise, and
`(B) regulations which may provide that a person will not be treated
as a United States shareholder under paragraph (1) with respect to any
foreign corporation if neither such person (nor any related person to such
person) is (directly or indirectly) insured under any policy of insurance
or reinsurance issued by such foreign corporation.
`(b) ELECTION BY FOREIGN INSURANCE COMPANY TO BE TREATED AS DOMESTIC
CORPORATION-
`(A) a foreign corporation is a controlled foreign corporation (as
defined in section 957(a) by substituting `25 percent or more' for `more
than 50 percent' and by using the definition of United States shareholder
under subsection (a)(1)(A) of this section),
`(B) such foreign corporation would qualify under part I or II of
subchapter L for the taxable year if it were a domestic
corporation,
`(C) such foreign corporation meets such requirements as the Secretary
shall prescribe to ensure that the taxes imposed by this chapter on such
foreign corporation are paid, and
`(D) such foreign corporation makes an election to have this paragraph
apply and waives all benefits to such corporation granted by the United
States under any treaty,
for purposes of this title, such corporation shall be treated as a
domestic corporation.
`(2) PERIOD DURING WHICH ELECTION IS IN EFFECT-
`(A) IN GENERAL- Except as provided in subparagraph (B), an election
under paragraph (1) shall apply to the taxable year for which made and all
subsequent taxable years unless revoked with the consent of the
Secretary.
`(B) TERMINATION- If a corporation which made an election under
paragraph (1) for any taxable year fails to meet the requirements of
subparagraph (A), (B), or (C) of paragraph (1) for any subsequent taxable
year, such election shall not apply to any taxable year beginning after
such subsequent taxable year.
`(3) TREATMENT OF LOSSES- If any corporation treated as a domestic
corporation under this subsection is treated as a member of an affiliated
group for purposes of chapter 6 (relating to consolidated returns), any loss
of such corporation shall be treated as a dual consolidated loss for
purposes of section 1503(d) without regard to paragraph (2)(B)
thereof.
`(A) IN GENERAL- For purposes of section 367, any foreign corporation
making an election under paragraph (1) shall be treated as transferring
(as the 1st day of the 1st taxable year to which such election applies)
all of its assets to a domestic corporation in connection with an exchange
to which section 354 applies.
`(B) EXCEPTION FOR PRE-1988 EARNINGS AND PROFIT-
`(i) IN GENERAL- Earnings and profits of the foreign corporation
accumulated in taxable years beginning before January 1, 1988, shall not
be included in the gross income of the persons holding stock in such
corporation by reason of subparagraph (A).
`(ii) TREATMENT OF DISTRIBUTIONS- For purposes of this title, any
distribution made by a corporation to which an election under paragraph
(1) applies out of earnings and profits accumulated in taxable years
beginning before January 1, 1988, shall be treated as a distribution
made by a foreign corporation.
`(iii) CERTAIN RULES TO CONTINUE TO APPLY TO PRE-1988 EARNINGS- The
provisions specified in clause (iv) shall be applied without regard to
paragraph (1), except that, in the case of a corporation to which an
election under paragraph (1) applies, only earnings and profits
accumulated in taxable years beginning before January 1, 1988, shall be
taken into account.
`(iv) SPECIFIED PROVISIONS- The provisions specified in this clause
are:
`(I) Section 1248 (relating to gain from certain sales or
exchanges of stock in certain foreign corporations).
`(II) This subpart to the extent such subpart relates to earnings
invested in United States property or amounts referred to in clause
(ii) or (iii) of section 951(a)(1)(A).
`(III) Section 884 to the extent the foreign corporation
reinvested 1987 earnings and profits in United States
assets.
`(5) EFFECT OF TERMINATION- For purposes of section 367, if--
`(A) an election is made by a corporation under paragraph (1) for any
taxable year, and
`(B) such election ceases to apply for any subsequent taxable
year,
such corporation shall be treated as a domestic corporation transferring
(as of the 1st day of such subsequent taxable year) all of its property to a
foreign corporation in connection with an exchange to which section 354
applies.
`(6) ADDITIONAL TAX ON CORPORATION MAKING ELECTION-
`(A) IN GENERAL- If a corporation makes an election under paragraph
(1), the amount of tax imposed by this chapter for the 1st taxable year to
which such election applies shall be increased by the amount determined
under subparagraph (B).
`(B) AMOUNT OF TAX- The amount of tax determined under this paragraph
shall be equal to the lesser of--
`(i) 3/4 of 1 percent of the aggregate amount of capital and
accumulated surplus of the corporation as of December 31, 1987,
or
`(c) INSURANCE INCOME DEFINED- For purposes of this section, the term
`insurance income' means any income which--
`(1) is attributable to the issuing (or reinsuring) of any insurance or
annuity contract--
`(A) in connection with property in, liability arising out of activity
in, or in connection with the lives or health of residents of, a country
other than the country under the laws of which the controlled foreign
corporation is created or organized, or
`(B) in connection with risks not described in subparagraph (A) as the
result of any arrangement whereby another corporation receives a
substantially equal amount of premiums or other consideration in respect
of issuing (or reinsuring) a contract described in subparagraph (A),
and
`(2) would (subject to the modifications provided by paragraphs (1) and
(2) of subsection (d)) be taxed under subchapter L of this chapter if such
income were the income of a domestic insurance company.
`(d) SPECIAL RULES- In determining the amount of insurance income--
`(1) The following provisions of subchapter L shall not apply:
`(A) The small life insurance company deduction.
`(B) Section 805(a)(5) (relating to operations loss
deduction).
`(C) Section 832(c)(5) (relating to certain capital losses).
`(2) The items referred to in--
`(A) section 803(a)(1) (relating to gross amount of premiums and other
considerations),
`(B) section 803(a)(2) (relating to net decrease in
reserves),
`(C) section 805(a)(2) (relating to net increase in reserves),
and
`(D) section 832(b)(4) (relating to premiums earned on insurance
contracts),
shall be taken into account only to the extent they are in respect of
any reinsurance or the issuing of any insurance or annuity contract
described in subsection (a)(1).
`(3) All items of income, expenses, losses, and deductions shall be
properly allocated or apportioned under regulations prescribed by the
Secretary.'
(b) REPEAL OF EXPORT TRADE CORPORATION PROVISIONS- Subpart G of part III
of subchapter N of chapter 1 (relating to export trade corporations) is hereby
repealed.
(c) CONFORMING AMENDMENTS TO SUBPART F-
(1) Subparagraph (A) of section 955(a)(1) is amended by inserting `(as
in effect for taxable years beginning before 1987)' after `section
954(b)(2)'.
(2) Subsection (b) of section 955 is amended by striking `within the
meaning of section 954(d)(3)' and inserting `within the meaning of section
964(a)'.
(3) Paragraph (2) of section 956(c) is amended--
(A) by striking `section 953(a)(1)' in subparagraph (E) and inserting
`section 953(c)(1)', and
(B) by inserting `(as in effect on the day before the date of the
enactment of this parenthetical) or under section 952(a)(1)' after
`section 952(b)' in subparagraph (H).
(4) Subsection (b) of section 957 is amended--
(A) by striking `income described in section 953(a)' and inserting
`subpart F income attributable to income described in section 953(c)',
and
(B) by striking `section 953(a)(1)' and inserting `section
953(c)(1)'.
(5) Subsection (b) of section 958 is amended--
(A) by striking `954(d)(3), 956(b)(2), and 957' and inserting
`956(b)(2), 957, and 964(a)', and
(B) by striking `954(d)(3)' the second place it appears and inserting
`964(a)'.
(6) Subsection (b) of section 959 is amended by striking `be also
included in the gross income' and inserting `be also included in the subpart
F income'.
(7) Subsection (a) of section 964 is amended to read as follows:
`(a) RELATED PERSON- For purposes of this part, a person is a related
person with respect to a controlled foreign corporation, if--
`(1) such person is an individual, corporation, partnership, trust, or
estate which controls, or is controlled by, the controlled foreign
corporation, or
`(2) such person is a corporation, partnership, trust, or estate which
is controlled by the same person or persons which control the controlled
foreign corporation.
For purposes of the preceding sentence, control means, with respect to a
corporation, the ownership, directly or indirectly, of stock possessing more
than 50 percent of the total voting power of all classes of stock entitled to
vote or of the total value of stock of such corporation. In the case of a
partnership, trust, or estate, control means the ownership, directly or
indirectly, more than 50 percent (by value) of the beneficial interests in
such partnership, trust, or estate. For purposes of this paragraph, rules
similar to the rules of section 958 shall apply.'
(8) Section 964 is amended by striking subsection (b).
(9) The table of sections for subpart F of part III of subchapter N of
chapter 1 is amended by striking the items relating to sections 952, 953 and
954 and inserting the following:
`Sec. 952. Subpart F income.
`Sec. 953. Special rules for certain insurance companies.'
(d) OTHER CONFORMING AMENDMENTS-
(1) Paragraph (2) of section 552(c) is amended--
(A) by amending subparagraph (A) to read as follows:
`(A) is received from a related person which (i) is a corporation
created or organized under the laws of the same foreign country under the
laws of which the foreign corporation involved was created or organized,
and (ii) has a substantial part of its assets used in its trade or
business located in such same foreign country, and', and
(B) by striking `954(d)(3)' and inserting `964(a)'.
(2) Subparagraph (B) of section 861(c)(2) is amended by striking
`954(d)(3)' and inserting `964(a)'.
(3) Subparagraph (A) of section 864(d)(5) is amended by striking clauses
(ii), (iii), and (iv).
(4) Subparagraph (A) of section 881(c)(5) is hereby repealed.
(5) Subparagraph (D) of section 884(d)(2) is amended by striking
`953(c)(3)(C)' and inserting `953(a)(3)(C)'.
(6) Subparagraph (A) of section 898(b)(3) is amended--
(A) by striking `953(c)(2)' and inserting `953(a)(2)', and
(B) by striking `953(c)(1) and inserting `953(a)(1)'.
(7) Clause (i) of section 904(d)(2)(A) is amended by inserting `, as in
effect on the day before the date of the repeal of such section' after
`section 954(c)'.
(8) Subclause (III) of section 904(d)(2)(C)(ii) is amended by striking
`953(a)' and inserting `953(c)'.
(9) Subparagraph (D) of section 904(d)(2) is amended--
(A) by inserting `, as in effect on the day before the date of the
repeal of such section' after `954(f)', and
(B) by inserting `or passive income' before the period at the end
thereof.
(10) Subparagraph (H) of section 904(d)(2) is amended by striking
`954(d)(3)' and inserting `964(a)'.
(11) Subparagraph (E) of section 904(d)(3) is hereby repealed.
(12) Subparagraph (C) of section 988(a)(3) is amended by striking
`954(d)(3)' and inserting `964(a)'.
(13) Subsection (c) of section 999 is amended--
(A) by striking `, 952(a)(3),' in paragraph (1), and
(B) by striking `, the addition to subpart F income under section
952(a)(3),' in paragraph (2).
(14) Subsection (a) of section 6046 is amended by striking `953(c)' and
inserting `953(a)'.
(15) The table of subparts for part III of subchapter M of chapter 1 is
amended by striking the item relating to subpart G.
(e) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years of controlled foreign corporations beginning after December 31,
1999, and to the taxable years of United States shareholders with which (or in
which) such taxable years of controlled foreign corporations end.
SEC. 122. REPEAL OF DEFERRAL OF TAX UNDER MERCHANT MARINE CAPITAL
CONSTRUCTIONS FUNDS.
(a) IN GENERAL- Subsection (c) of section 7518 (relating to tax incentives
relating to Merchant Marine Capital Construction Fund) is amended by adding at
the end the following new paragraph:
`(3) TERMINATION- Subparagraphs (A), (B), and (C) of paragraph (1) shall
not apply to any taxable year beginning after December 31, 1999.'
(b) CONFORMING AMENDMENT TO MERCHANT MARINE ACT, 1936- Subsection (d) of
section 607 of the Merchant Marine Act, 1936, is amended by adding at the end
the following new paragraph:
`(3) TERMINATION- Subparagraphs (A), (B), and (C) of paragraph (1) shall
not apply to any taxable year beginning after December 31, 1999.'
SEC. 123. REPEAL OF SPECIAL TREATMENT FOR MAGAZINE CIRCULATION
EXPENDITURES.
(a) IN GENERAL- Section 173 (relating to circulation expenditures) is
hereby repealed.
(b) CONFORMING AMENDMENTS-
(1) Subparagraph (A) of section 56(b)(2) is amended to read as
follows:
`(A) IN GENERAL- The amount allowable as a deduction under section
174(a) in computing the regular tax for amounts paid or incurred after
December 31, 1986, shall be capitalized and shall be amortized ratably
over the 10-year period beginning with the taxable year in which the
expenditures were made.'
(2) Paragraph (2) of section 56(c) is amended by striking subparagraph
(C).
(3) Clause (ii) of section 56(g)(4)(D) is amended to read as
follows:
`(ii) AMORTIZATION OF ORGANIZATION EXPENDITURES NOT TO APPLY-
Section 248 shall not apply to expenditures paid or incurred in taxable
year beginning after December 31, 1989.'
(4) Paragraph (1) of section 59(e) is amended by striking `(3-year
period in the case of circulation expenditures described in section
173)'.
(5) Paragraph (2) of section 59(e) is amended by striking subparagraph
(A) and by redesignating the following subparagraphs accordingly.
(6) Paragraph (3) of section 312(n) is amended to read as follows:
`(3) AMORTIZATION OF ORGANIZATION EXPENDITURES NOT TO APPLY- Section 248
shall not apply.'
(7) Subparagraph (B) of section 1016(a)(1) is amended by striking
`expenditures' and inserting `expenditures, as in effect on the day before
the date of the enactment of the Corporate Welfare Elimination Act of
1999'.
(8) The table of sections for part VI of subchapter B of chapter 1 is
amended by striking the item relating to section 173.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
amounts paid or incurred after December 31, 1999.
SEC. 124. REPEAL OF SPECIAL TREATMENT FOR RETURNS OF MAGAZINES, PAPERBACKS,
AND RECORDS.
(a) IN GENERAL- Section 458 (relating to magazines, paperbacks, and
records returned after the close of the taxable year) is hereby repealed.
(b) CLERICAL AMENDMENT- The table of sections for subpart B of part II of
subchapter E of chapter 1 is amended by striking the item relating to section
458.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to
taxable years beginning after December 31, 1999.
TITLE II--NATURAL RESOURCES
SEC. 201. PUBLIC RESOURCES DEFICIT REDUCTION ACT OF 1999.
This title may be cited as the `Public Resources Deficit Reduction Act of
1999'.
Subtitle A--General Provisions
SEC. 211. FAIR MARKET VALUE FOR RESOURCE DISPOSAL.
(a) IN GENERAL- Notwithstanding any other provision of law, no timber,
minerals, forage, or other natural resource owned by the United States, no
Federally owned water, and no hydroelectric energy generated at a Federal
facility may be sold, leased, or otherwise disposed of by any department,
agency, or instrumentality of the United States for an amount less than fair
market value, as determined by such department, agency, or instrumentality.
(b) STAGGERED EFFECTIVE DATES-
(1) EXISTING CONTRACTS, LEASES, AND AGREEMENTS- Subsection (a) shall not
apply to any existing contract, lease, or other binding arrangement entered
into before the date of the enactment of this title unless such contract,
lease, or other arrangement is renewed or extended after such date.
(2) CONTRACTS, LEASES, AND AGREEMENTS ENTERED INTO IN 5-YEAR PERIOD- In
the case of any contract, lease, or other binding arrangement entered into
or renewed or extended during the 5-year period beginning on the date of the
enactment of this title, subsection (a) shall apply immediately upon the
expiration of such period.
(3) CONTRACTS, LEASES, AND AGREEMENTS ENTERED INTO AFTER 5-YEAR PERIOD-
Subsection (a) shall apply immediately to all contracts, leases, or other
binding arrangements entered into or renewed or extended after the end of
the 5-year period beginning on the date of the enactment of this
title.
(c) WAIVER- The President may waive the requirements of subsection (a)
whenever the President determines that such waiver is in the national
interest. The President shall submit a notice to Congress containing an
explanation of the reasons for any such determination within 60 days after the
date of the determination.
SEC. 212. FEES FROM PROGRAM BENEFICIARIES.
(a) GENERAL AUTHORITY- The Secretary of the Interior and the Secretary of
Agriculture are each authorized to establish and collect from persons subject
to programs administered by each such Secretary such user fees as may be
necessary to reimburse the United States for the expenses incurred in
administering such programs. The aggregate amount of fees that may be assessed
and collected under this section by each such Secretary in any fiscal year
from persons subject to any such program shall not exceed the aggregate amount
of expenses incurred in administering such program in such fiscal year.
(b) EFFECTIVE DATE; OIL AND GAS LEASE TRANSFERS- The Secretary of the
Interior and the Secretary of Agriculture may, by rule, establish the
applicable effective date of any fee to be imposed under this section, except
that fees shall be established and collected under this section from each
person receiving a transfer of a Federal onshore oil and gas lease after the
date of the enactment of this title.
SEC. 213. REVENUES FROM SALE, LEASE, AND TRANSFER OF ASSETS.
(a) IN GENERAL- Section 1105(a) of chapter 11 of title 31, United States
Code, is amended by inserting after paragraph (30) the following new
paragraph:
`(31) a separate statement, asset by asset and aggregated by major
functional category, of--
`(A) projected revenues during the fiscal year for which the budget is
submitted from the anticipated sale, lease, or transfer of any physical
asset; and
`(B) the estimated price at which this asset or a comparable asset
would be sold in an arms length transaction in the private
sector.'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall become
effective for fiscal year 2001 and shall be fully reflected in the fiscal year
2001 budget submitted by the President in February 2000 under section 1105(a)
of title 31, United States Code.
Subtitle B--Revenue From Mining Claims
SEC. 221. DEFINITIONS.
(a) DEFINITIONS- As used in this subtitle:
(1) The term `locatable mineral' means any mineral not subject to
disposition under any of the following:
(A) The Mineral Leasing Act (30 U.S.C. 181 et seq.).
(B) The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et
seq.).
(C) The Act of July 31, 1947, commonly known as the Materials Act of
1947 (30 U.S.C. 601 et seq.).
(D) The Mineral Leasing Act for Acquired Lands (30 U.S.C. 351 et
seq.).
(2) The term `mineral activities' means any activity for, related to, or
incidental to mineral exploration, mining, beneficiation, and processing
activities for any locatable mineral, including access. When used with
respect to this term:
(A) The term `exploration' means those techniques employed to locate
the presence of a locatable mineral deposit and to establish its nature,
position, size, shape, grade, and value.
(B) The term `mining' means the processes employed for the extraction
of a locatable mineral from the earth.
(C) The term `beneficiation' means the crushing and grinding of
locatable mineral ore and such processes as are employed to free the
mineral from other constituents, including but not necessarily limited to,
physical and chemical separation techniques.
(D) The term `processing' means processes downstream of beneficiation
employed to prepare locatable mineral ore into the final marketable
product, including but not limited to, smelting and electrolytic
refining.
(3) The term `mining claim' means a claim for the purposes of mineral
activities.
(4) The term `Secretary' means, unless otherwise provided in this
subtitle, the Secretary of the Interior acting through the Director of the
Minerals Management Service.
SEC. 222. MINING CLAIM MAINTENANCE REQUIREMENTS.
(a) IN GENERAL- The holder of each mining claim located on lands open to
location shall pay to the Secretary an annual claim maintenance fee of $100
per claim per calendar year.
(b) TIME OF PAYMENT- The claim maintenance fee payable pursuant to
subsection (a) for any year shall be paid on or before August 31 of each year,
except that for the initial calendar year in which the location is made, the
locator shall pay the initial claim maintenance fee at the time the location
notice is recorded with the Bureau of Land Management.
(c) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTENANCE FEES UNDER ENERGY POLICY
ACT OF 1992- This section shall not apply to any oil shale claims for which a
fee is required to be paid under section 2511(e)(2) of the Energy Policy Act
of 1992 (106 Stat. 3111; 30 U.S.C. 242).
(d) CLAIM MAINTENANCE FEES PAYABLE UNDER 1993 ACT- The claim maintenance
fees payable under this section for any period with respect to any claim shall
be reduced by the amount of the claim maintenance fees paid under section
10101 of the Omnibus Budget Reconciliation Act of 1993 (30 U.S.C. 28f) with
respect to that claim and with respect to the same period.
(e) WAIVER- (1) The claim maintenance fee required under this section may
be waived for a claim holder who certifies in writing to the Secretary that on
the date the payment was due, the claim holder and all related parties held
not more than 10 mining claims on lands open to location. Such certification
shall be made on or before the date on which payment is due.
(2) For purposes of paragraph (1), with respect to any claim holder, the
term `related party' means each of the following:
(A) The spouse and dependent children (as defined in section 152 of the
Internal Revenue Code of 1986) of the claim holder.
(B) Any affiliate of the claim holder.
(f) CO-OWNERSHIP- Upon the failure of any one or more of several co-owners
to contribute such co-owner or owners' portion of the fee under this section,
any co-owner who has paid such fee may, after the payment due date, give the
delinquent co-owner or owners notice of such failure in writing (or by
publication in the newspaper nearest the claim for at least once a week for at
least 90 days). If at the expiration of 90 days after such notice in writing
or by publication, any delinquent co-owner fails or refuses
to contribute his portion, his interest in the claim shall become the
property of the co-owners who have paid the required fee.
SEC. 223. ROYALTY.
(a) RESERVATION OF ROYALTY- Production of all locatable minerals from any
mining claim located under the general mining laws, or mineral concentrates or
products derived from locatable minerals from any mining claim located under
the general mining laws, as the case may be, shall be subject to a royalty of
8 percent of the gross income from such production. The claimholder and any
operator to whom the claimholder has assigned the obligation to make royalty
payments under the claim and any person who controls such claimholder or
operator shall be jointly and severally liable for payment of such
royalties.
(b) DUTIES OF CLAIM HOLDERS, OPERATORS, AND TRANSPORTERS- (1) A
person--
(A) who is required to make any royalty payment under this section shall
make such payments to the United States at such times and in such manner as
the Secretary may by rule prescribe; and
(B) shall notify the Secretary, in the time and manner as may be
specified by the Secretary, of any assignment that such person may have made
of the obligation to make any royalty or other payment under a mining
claim.
(2) Any person paying royalties under this section shall file a written
instrument, together with the first royalty payment, affirming that such
person is liable to the Secretary for making proper payments for all amounts
due for all time periods for which such person has a payment responsibility.
Such liability for the period referred to in the preceding sentence shall
include any and all additional amounts billed by the Secretary and determined
to be due by final agency or judicial action. Any person liable for royalty
payments under this section who assigns any payment obligation shall remain
jointly and severally liable for all royalty payments due for the claim for
the period.
(3) A person conducting mineral activities shall--
(A) develop and comply with the site security provisions in operations
permit designed to protect from theft the locatable minerals, concentrates,
or products derived therefrom which are produced or stored on a mining
claim, and such provisions shall
conform with such minimum standards as the Secretary may prescribe by rule,
taking into account the variety of circumstances on mining claims; and
(B) not later than the 5th business day after production begins anywhere
on a mining claim, or production resumes after more than 90 days after
production was suspended, notify the Secretary, in the manner prescribed by
the Secretary, of the date on which such production has begun or
resumed.
(4) The Secretary may by rule require any person engaged in transporting a
locatable mineral, concentrate, or product derived therefrom to carry on his
or her person, in his or her vehicle, or in his or her immediate control,
documentation showing, at a minimum, the amount, origin, and intended
destination of the locatable mineral, concentrate, or product derived
therefrom in such circumstances as the Secretary determines is appropriate.
(c) RECORDKEEPING AND REPORTING REQUIREMENTS- (1) A claim holder,
operator, or other person directly involved in developing, producing,
processing, transporting, purchasing, or selling locatable minerals,
concentrates, or products derived therefrom, subject to this title, through
the point of royalty computation shall establish and maintain any records,
make any reports, and provide any information that the Secretary may
reasonably require for the purposes of implementing this section or
determining compliance with rules or orders under this section. Such records
shall include, but not be limited to, periodic reports, records, documents,
and other data. Such reports may also include, but not be limited to,
pertinent
technical and financial data relating to the quantity, quality, composition
volume, weight, and assay of all minerals extracted from the mining claim. Upon
the request of any officer or employee duly designated by the Secretary or any
State conducting an audit or investigation pursuant to this section, the
appropriate records, reports, or information which may be required by this
section shall be made available for inspection and duplication by such officer
or employee or State.
(2) Records required by the Secretary under this section shall be
maintained for 6 years after cessation of all mining activity at the claim
concerned unless the Secretary notifies the operator that he or she has
initiated an audit or investigation involving such records and that such
records must be maintained for a longer period. In any case when an audit or
investigation is underway, records shall be maintained until the Secretary
releases the operator of the obligation to maintain such records.
(d) AUDITS- The Secretary is authorized to conduct such audits of all
claim holders, operators, transporters, purchasers, processors, or other
persons directly or indirectly involved in the production or sales of minerals
covered by this subtitle, as the Secretary deems necessary for the purposes of
ensuring compliance with the requirements of this section. For purposes of
performing such audits, the Secretary shall, at reasonable times and upon
request, have access to, and may copy, all books, papers and other documents
that relate to compliance with any provision of this section by any person.
(e) COOPERATIVE AGREEMENTS- (1) The Secretary is authorized to enter into
cooperative agreements with the Secretary of Agriculture to share information
concerning the royalty management of locatable minerals, concentrates, or
products derived therefrom, to carry out inspection, auditing, investigation,
or enforcement (not including the collection of royalties, civil or criminal
penalties, or other payments) activities under this section in cooperation
with the Secretary, and to carry out any other activity described in this
section.
(2) Except as provided in paragraph (4)(A) of this subsection (relating to
trade secrets), and pursuant to a cooperative agreement, the Secretary of
Agriculture shall, upon request, have access to all royalty accounting
information in the possession of the Secretary respecting the production,
removal, or sale of locatable minerals, concentrates, or products derived
therefrom from claims on lands open to location under the general mining
laws.
(3) Trade secrets, proprietary, and other confidential information shall
be made available by the Secretary pursuant to a cooperative agreement under
this subsection to the Secretary of Agriculture upon request only if--
(A) the Secretary of Agriculture consents in writing to restrict the
dissemination of the information to those who are directly involved in an
audit or investigation under this section and who have a need to know;
(B) the Secretary of Agriculture accepts liability for wrongful
disclosure; and
(C) the Secretary of Agriculture demonstrates that such information is
essential to the conduct of an audit or investigation under this
subsection.
(f) INTEREST AND SUBSTANTIAL UNDERREPORTING ASSESSMENTS- (1) In the case
of mining claims where royalty payments are not received by the Secretary on
the date that such payments are due, the Secretary shall charge interest on
such under payments at the same interest rate as is applicable under section
6621(a)(2) of the Internal Revenue Code of 1986. In the case of an
underpayment, interest shall be computed and charged only on the amount of the
deficiency and not on the total amount.
(2) If there is any underreporting of royalty owed on production from a
claim for any production month by any person liable for royalty payments under
this section, the
Secretary may assess a penalty of 10 percent of the amount of that
underreporting.
(3) If there is a substantial underreporting of royalty owed on production
from a claim for any production month by any person responsible for paying the
royalty, the Secretary may assess an additional penalty of 10 percent of the
amount of that underreporting.
(4) For the purposes of this subsection, the term `underreporting' means
the difference between the royalty on the value of the production which should
have been reported and the royalty on the value of the production which was
reported, if the value which should have been reported is greater than the
value which was reported. An underreporting constitutes a `substantial
underreporting' if such difference exceeds 10 percent of the royalty on the
value of production which should have been reported.
(5) The Secretary shall not impose the assessment provided in paragraph
(2) or (3) of this subsection if the person liable for royalty payments under
this section corrects the underreporting before the date such person receives
notice from the Secretary that an underreporting
may have occurred, or before 90 days after the date of the enactment of this
section, whichever is later.
(6) The Secretary shall waive any portion of an assessment under paragraph
(2) or (3) of this subsection attributable to that portion of the
underreporting for which the person responsible for paying the royalty
demonstrates that--
(A) such person had written authorization from the Secretary to report
royalty on the value of the production on the basis on which it was
reported,
(B) such person had substantial authority for reporting royalty on the
value of the production on the basis on which it was reported,
(C) such person previously had notified the Secretary, in such manner as
the Secretary may by rule prescribe, of relevant reasons or facts affecting
the royalty treatment of specific production which led to the
underreporting, or
(D) such person meets any other exception which the Secretary may, by
rule, establish.
(7) All penalties collected under this subsection shall be deposited in
the Treasury.
(g) EXPANDED ROYALTY OBLIGATIONS- Each person liable for royalty payments
under this section shall be jointly and severally liable for royalty on all
locatable minerals, concentrates, or products derived therefrom lost or wasted
from a mining claim located or converted under this section when such loss or
waste is due to negligence on the part of any person or due to the failure to
comply with any rule, regulation, or order issued under this section.
(h) EXCEPTION- No royalty shall be payable under subsection (a) with
respect to minerals processed at a facility by the same person or entity which
extracted the minerals if an urban development action grant has been made
under section 119 of the Housing and Community Development Act of 1974 with
respect to any portion of such facility.
(i) EFFECTIVE DATE- The royalty under this section shall take effect with
respect to the production of locatable minerals after the enactment of this
title, but any royalty payments attributable to production during the first 12
calendar months after the enactment of this title shall be payable at the
expiration of such 12-month period.
SEC. 224. SEVERANCE TAX.
(a) SEVERANCE TAX ON MINERALS- Chapter 36 of the Internal Revenue Code of
1986 (relating to certain other excise taxes) is amended by adding at the end
the following new subchapter:
`Subchapter G--Tax on Severance of Locatable Minerals
`SEC. 4500. TAX ON SEVERANCE OF LOCATABLE MINERALS.
`(a) IN GENERAL- There is hereby imposed a tax on gross income resulting
from the severance of any locatable mineral, or mineral concentrates or
products, from a mine or other natural deposit located within the United
States.
`(b) AMOUNT OF TAX- The amount of the tax imposed by subsection (a) shall
be 8 percent of the gross income derived from the locatable mineral, or from
the mineral concentrates or products, severed as described in such
subsection.
`(c) EXCEPTION IF ROYALTY IMPOSED- Subsection (a) shall not apply to gross
income with respect to which a royalty is imposed by section 203 of the Public
Resources Deficit Reduction Act of 1999.'.
(b) CONFORMING AMENDMENT- The table of subchapters for chapter 36 of such
Code (relating to certain other excise taxes) is amended by adding at the end
the following new item:
`SUBCHAPTER G. Tax on severance of locatable minerals.'.
SEC. 225. FUND FOR ABANDONED LOCATABLE MINERALS MINE RECLAMATION.
(a) ESTABLISHMENT OF FUND- (1) There is established on the books of the
Treasury of the United States a trust fund to be known as the Abandoned
Locatable Minerals Mine Reclamation Fund (hereinafter in this subtitle
referred to as the `Fund'). The Fund shall be administered by the Secretary
acting through the Director of the Office of Surface Mining Reclamation and
Enforcement.
(2) The Secretary shall notify the Secretary of the Treasury as to what
portion of the Fund is not, in the Secretary's judgment, required to meet
current withdrawals. The Secretary of the Treasury shall invest such portion
of the Fund in public debt securities with maturities suitable for the needs
of such Fund and bearing interest at rates determined by the Secretary of the
Treasury, taking into consideration current market yields on outstanding
marketplace obligations of the United States of comparable maturities. The
income on such investments shall be credited to, and form a part of, the
Fund.
(b) AMOUNTS- The following amounts shall be credited to the Fund:
(1) All moneys received from royalties under section 223.
(2) All taxes collected under section 4500 of the Internal Revenue Code
of 1986.
(3) All donations by persons, corporations, associations, and
foundations for the purposes of this section.
(c) USE AND OBJECTIVES OF THE FUND- The Secretary is authorized, subject
to appropriations, to use moneys in the Fund for the reclamation and
restoration of land and water resources adversely affected by past mineral
activities on lands the legal and beneficial title to which resides in the
United States, and of land within the exterior boundary of any National Forest
System unit.
(d) SPECIFIC SITES AND AREAS NOT ELIGIBLE- The provisions of section
411(d) of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C.
1240a(d)) shall apply to expenditures made from the Fund established under
this section.
(e) FUND EXPENDITURES- Moneys available from the Fund may be expended for
the purposes specified in subsection (c) directly by the Director of the
Office of Surface Mining Reclamation and Enforcement. The Director may also
make such money available for such purposes to the Director of the Bureau of
Land Management, to the Chief of the United States Forest Service, to the
Director of the National Park Service, to the Director of the United States
Fish and Wildlife Service, to any other agency of the United States, to an
Indian tribe, or to any
public entity that volunteers to develop and implement, and that has the
ability to carry out, all or a significant portion of a reclamation program
under this subtitle.
(f) AUTHORIZATION OF APPROPRIATIONS- Amounts credited to the Fund are
authorized to be appropriated for the purpose of this section without fiscal
year limitation.
SEC. 226. LIMITATION ON PATENT ISSUANCE.
(a) MINING CLAIMS- After the date of enactment of this title, no patent
shall be issued by the United States for any mining claim located under the
general mining laws unless the Secretary determines that, for the claim
concerned--
(1) a patent application was filed with the Secretary on or before
January 27, 1995; and
(2) all requirements established under sections 2325 and 2326 of the
Revised Statutes (30 U.S.C. 29 and 30) for vein or lode claims and sections
2329, 2330, 2331, and 2333 of the Revised Statutes (30 U.S.C. 35, 36, and
37) for placer claims were fully complied with by that date.
If the Secretary makes the determinations referred to in paragraphs (1)
and (2) for any mining claim, the holder of the claim shall be entitled to the
issuance of a patent in the same manner and degree to which such claim holder
would have been entitled to prior to the enactment of this title, unless and
until such determinations are withdrawn or invalidated by the Secretary or by
a court of the United States.
(b) MILL SITES- After the date of enactment of this title, no patent shall
be issued by the United States for any mill site claim located under the
general mining laws unless the Secretary determines that for the mill site
concerned--
(1) a patent application for such land was filed with the Secretary on
or before January 27, 1999; and
(2) all requirements applicable to such patent application were fully
complied with by that date.
If the Secretary makes the determinations referred to in paragraphs (1)
and (2) for any mill site claim, the holder of the claim shall be entitled to
the issuance of a patent in the same manner and degree to which such claim
holder would have been entitled to prior to the enactment of this title,
unless and until such determinations are withdrawn or invalidated by the
Secretary or by a court of the United States.
SEC. 227. PURCHASING POWER ADJUSTMENT.
The Secretary shall adjust all dollar amounts established in this subtitle
for changes in the purchasing power of the dollar every 10 years following the
date of enactment of this title, employing the Consumer Price Index for
all-urban consumers published by the Department of Labor as the basis for
adjustment, and rounding according to the adjustment process of conditions of
the Federal Civil Penalties Inflation Adjustment Act of 1990 (104 Stat.
890).
SEC. 228. SAVINGS CLAUSE.
Nothing in this title shall be construed as repealing or modifying any
Federal law, regulation, order, or land use plan, in effect prior to the
effective date of this title, that prohibits or restricts the application of
the general mining laws, including such laws that provide for special
management criteria for operations under the general mining laws as in effect
prior to the effective date of this title, to the extent such laws provide
environmental protection greater than required under this subtitle.
SEC. 229. EFFECTIVE DATE.
Except as otherwise provided in section 226 (relating to limitation on
patent issuance), this subtitle shall take effect on the date 1 year after the
date of enactment of this title.
Subtitle C--Use or Disposal of Federal Natural Resources
SEC. 231. ANNUAL DOMESTIC LIVESTOCK GRAZING FEE.
The Federal Land Policy and Management Act of 1976 is amended by inserting
after section 401 (43 U.S.C. 1751) the following new section:
`SEC. 401A. ESTABLISHMENT OF FAIR MARKET VALUE GRAZING FEES.
`(a) ESTABLISHMENT OF ANNUAL DOMESTIC LIVESTOCK GRAZING FEE- (1)
Notwithstanding any other provision of law, the Secretary of Agriculture, with
respect to National Forest System lands in the 16 contiguous Western States
(except National Grasslands) administered by the Forest Service where domestic
livestock grazing is permitted under applicable law, shall establish an annual
domestic livestock grazing fee equal to fair market value.
`(2) Notwithstanding any other provision of law, the Secretary of the
Interior, with respect to public domain lands administered by the Bureau of
Land Management where domestic livestock grazing is permitted under applicable
law, shall establish an annual domestic livestock grazing fee equal to fair
market value.
`(b) CALCULATION OF FAIR MARKET VALUE- (1) For purposes of determining the
annual domestic livestock grazing fee under this section, the Secretary
concerned shall calculate fair market value using the following formula:
[ Formula's typesetting may mislead! ] Fair Market Value=Appraised Base Value x Forage Value Index / (100)
`(2) For purposes of the formula in paragraph (1):
`(A) The term `Forage Value Index' means the Forage Value Index (FVI)
computed annually by the Economic Research Service, United States Department
of Agriculture, and set with the 1999 FVI equal to 100; and
`(B) The term `Appraised Base Value' means the 1983 Appraisal Value
conclusions for mature cattle and horses (expressed in dollars per head or
per month), as determined in the 1986 report prepared jointly by the
Secretary of Agriculture and the Secretary of the Interior entitled `Grazing
Fee Review and Evaluation', dated February 1986, on a west-wide basis using
the lowest appraised value of the pricing areas adjusted for advanced
payment and indexed to 1999.
`(c) LIMITATION ON FLUCTUATIONS OF FEES- Notwithstanding the amount
calculated under subsection (b) for a year, the domestic livestock grazing fee
charged for any given year shall not increase nor decrease by more
than 33.3 percent from the domestic livestock grazing fee for the previous
year.
`(d) EFFECT ON EXECUTIVE ORDER- Executive Order No. 12548, dated February
14, 1986 (51 Fed. Reg. 5985), shall not apply to grazing fees established
pursuant to this section.
`(e) EFFECT ON GRAZING ADVISORY BOARDS- The grazing advisory boards
established pursuant to Secretarial action, notice of which was published in
the Federal Register on May 14, 1986 (51 Fed. Reg. 17874), are abolished,
effective as of the date of the enactment of this section, and the advisory
functions exercised by such boards shall be exercised only by the appropriate
councils established under section 309 of this Act.
`(f) USE OF FEES AND RANGE IMPROVEMENT FUNDS- Funds appropriated pursuant
to section 5 of the Public Rangelands Improvement Act of 1978 (43 U.S.C. 1904)
or any other provision of law related to disposition of the Federal share of
receipts from fees for grazing on public domain lands or National Forest lands
in the 16 contiguous western States shall be used for restoration and
enhancement of fish and wildlife habitat, for restoration and improved
management of riparian areas, and for implementation and enforcement of
applicable land management plans, allotment plans, and regulations regarding
the use of such lands for domestic livestock grazing. Such funds shall be
distributed as the Secretary concerned considers advisable after consultation
and coordination with the advisory councils established pursuant to section
309 of this Act and other interested parties.
`(g) COMMENCEMENT DATE FOR FEES- The first annual domestic livestock
grazing fee required by this section shall apply with respect to the grazing
season commencing on March 1, 2000.'.
SEC. 232. ELIMINATION OF BELOW-COST SALES OF TIMBER FROM NATIONAL FOREST
SYSTEM LANDS.
(a) IN GENERAL- The National Forest Management Act of 1976 is amended by
inserting after section 14 (16 U.S.C. 472a) the following new section:
`SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES FROM NATIONAL FOREST
SYSTEM LANDS.
`(a) REQUIREMENT THAT SALE REVENUES EXCEED COSTS- On and after October 1,
2003, in appraising timber and setting a minimum bid for trees, portions of
trees, or forest products located on National Forest System lands proposed for
sale under section 14 or any other provision of law, the Secretary of
Agriculture shall ensure that the estimated cash returns to the United States
Treasury from each sale exceed the estimated costs to be incurred by the
Federal Government in the preparation of the sale or as a result of the
sale.
`(b) COSTS TO BE CONSIDERED- For purposes of estimating under this section
the costs to be incurred by the Federal Government from each timber sale, the
Secretary shall assign to the sale the following costs:
`(1) The actual appropriated expenses for sale preparation and harvest
administration incurred or to be incurred by the Federal Government from the
sale and the payments to counties to be made as a result of the sale.
`(2) A portion of the annual timber resource planning costs,
silvicultural examination costs, other resource support costs, road design
and construction costs, road maintenance costs, transportation planning
costs, appropriated reforestation costs, timber stand improvement costs,
forest genetics costs, general administrative costs (including
administrative costs of the national and regional offices of the Forest
Service), and facilities construction costs of the Federal Government
directly or indirectly related to the timber harvest program conducted on
National Forest System lands.
`(c) METHOD OF ALLOCATING COSTS- The Secretary shall allocate the costs
referred to in subsection (b)(2) to each unit of the National Forest System,
and each proposed timber sale in such unit, on the basis of harvest volume.
`(d) TRANSITIONAL REQUIREMENTS- To ensure the elimination of all
below-cost timber sales by the date specified in subsection (a), the Secretary
shall progressively reduce the number and size of below-cost timber sales on
National Forest System lands as follows:
`(1) In fiscal years 2000 and 2001, the quantity of timber sold in
below-cost timber sales on National Forest System lands shall not exceed 75
percent of the quantity of timber sold in such sales in the preceding fiscal
year.
`(2) In fiscal year 2002, the quantity of timber sold in below-cost
timber sales on National Forest System lands shall not exceed 65 percent of
the quantity of timber sold in such sales in fiscal year 2000.
`(3) In fiscal year 2003, the quantity of timber sold in below-cost
timber sales on National Forest System lands shall not exceed 50 percent of
the quantity of timber sold in such sales in the fiscal year 2002.
`(e) BELOW-COST TIMBER SALE- For purposes of this section, the term
`below-cost timber sale' means a sale of timber in which the costs to be
incurred by the Federal Government exceed the cash returns to the United
States Treasury.'.
(b) FINDINGS- Section 2 of the Forest and Rangeland Renewable Resources
Planning Act of 1974 (16 U.S.C. 1600) is amended--
(1) by striking `and' at the end of paragraph (6);
(2) by striking the period at the end of paragraph (7) and inserting `;
and'; and
(3) by adding at the end the following new paragraph:
`(8) the practice of selling timber from National Forest System lands
for less than the cost to the Federal Government of growing the timber and
preparing the timber for sale is not in the best interests of the United
States, and such below-cost sales should be eliminated in an orderly manner
to achieve a more economically and environmentally sound timber program for
the National Forest System.'.
SEC. 233. TIMBERLAND SUITABILITY.
Subsection (k) of section 6 of the Forest and Rangeland Renewable
Resources Planning Act of 1974 (16 U.S.C. 1604) is amended to read as
follows:
`(k) DETERMINATION OF SUITABILITY OF LANDS FOR TIMBER PRODUCTION-
`(1) DETERMINATION REQUIRED- In revising land management plans developed
pursuant to this section, the Secretary shall identify lands within the
management area that are not suited for timber production based on physical,
economic, or other relevant factors. The Secretary shall review the
identifications made under this paragraph during each revision of the forest
plan.
`(2) EVIDENCE OF ECONOMIC UNSUITABILITY- The Secretary shall identify
lands as economically unsuitable for timber production under paragraph (1)
if--
`(A) the expected cash returns to the United States Treasury that
would result from the sale of standing timber on the lands do not exceed
the expected costs that would be incurred by the Federal Government in
preparation or as a result of such sales; or
`(B) the expected cash returns to the United States Treasury that
would result from the sale of subsequent timber stands on the lands do not
exceed the expected costs that would be incurred by the Federal Government
in preparation or as a result of such sales.
`(3) COSTS TO BE CONSIDERED- For purposes of estimating under paragraph
(2) the costs to be incurred by the Federal Government from timber sales
conducted on the lands being reviewed, the Secretary shall assign to sales
on such lands the following costs:
`(A) The appropriated expenses for sale preparation and harvest
administration that would be incurred by the Federal Government from such
sales and the payments to counties that would be made as a result of such
sales.
`(B) A portion of the annual timber resource planning costs,
silvicultural examination costs, other resource support costs, road design
and construction costs, road maintenance costs, transportation planning
costs, appropriated reforestation costs, timber stand improvement costs,
forest genetics costs, general administrative costs (including
administrative costs of the national and regional offices of the Forest
Service), and facilities construction costs of the Federal Government
directly or indirectly related to the timber harvest program conducted on
National Forest System lands.
`(4) METHOD OF ALLOCATING COSTS- The Secretary shall allocate the costs
referred to in paragraph (3)(B) to each unit of the National Forest System
on the basis of harvest volume.
`(5) PROHIBITION ON TIMBER HARVESTS ON UNSUITABLE LANDS- In the case of
lands identified under paragraph (1) as unsuitable for timber production, no
timber harvesting shall occur on such lands for a period of 10 years or the
life of the plan, whichever is greater.
`(6) DEFINITIONS- For purposes of this subsection:
`(A) The term `standing timber' means an existing stand of timber that
has not been harvested.
`(B) The term `subsequent timber stand' means a regenerated stand of
timber produced on land from which standing timber has been
harvested.'.
SEC. 234. REDUCTION IN MAXIMUM AMOUNT OF PAYMENTS UNDER AGRICULTURAL
ASSISTANCE PROGRAMS TO REFLECT RECEIPT OF FEDERAL IRRIGATION WATER.
(a) PRICE SUPPORT PROGRAMS- Title X of the Food Security Act of 1985 is
amended--
(1) by redesignating sections 1001D (7 U.S.C. 1308-4) and 1001E (7
U.S.C. 1308-5) as sections 1001E and 1001F, respectively; and
(2) by inserting after section 1001C (7 U.S.C. 1308-3) the following new
section:
`SEC. 1001D. REDUCTION OF PAYMENT LIMITATIONS TO REFLECT RECEIPT OF FEDERAL
IRRIGATION WATER.
`(a) REDUCTION OF PAYMENT LIMITATIONS REQUIRED- If a person subject to
section 1001 receives Federal irrigation water for agricultural purposes from
the operation of a Federal reclamation project, the payment limitations
specified in paragraphs (1) and (2) of such section and applicable to such
person shall be reduced for the year in which such person receives irrigation
water. The amount of the reduction shall be equal to the total value during
that year of the subsidy portion of the contract with such person for the
delivery of the irrigation water.
`(b) DETERMINATION OF SUBSIDY PORTION OF WATER CONTRACT- The subsidy
portion of an irrigation water delivery contract is equal to the amount by
which full cost for the delivery of the irrigation water exceeds the actual
contract price for the delivery of the water.
`(c) DEFINITIONS- For purposes of this section, the terms `contract',
`full cost', `irrigation water', and `project' have the meanings given such
terms in section 202 of the Reclamation Reform Act of 1982 (43 U.S.C.
390bb).'.
(b) NONINSURED CROP DISASTER ASSISTANCE- Section 196(i) of the Federal
Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 7333(i)) is
amended--
(1) by redesignating paragraph (5) as paragraph (6); and
(2) by inserting after paragraph (4) the following new paragraph:
`(5) EFFECT OF RECEIPT OF IRRIGATION WATER-
`(A) REDUCTION OF PAYMENT LIMITATION- If a person who receives
payments under this section also receives, during the same year, Federal
irrigation water for agricultural purposes from the operation of a Federal
reclamation project, the payment limitation specified in paragraph (2) for
such person shall
be reduced for that year. The amount of the reduction shall be equal to the
total value during that year of the subsidy portion of the contract with such
person for the delivery of the irrigation water.
`(B) DETERMINATION OF SUBSIDY PORTION OF WATER CONTRACT- The subsidy
portion of an irrigation water delivery contract is equal to the amount by
which full cost for the delivery of the irrigation water exceeds the
actual contract price for the delivery of the water.
`(C) DEFINITIONS- For purposes of this paragraph, the terms
`contract', `full cost', `irrigation water', and `project' have the
meanings given such terms in section 202 of the Reclamation Reform Act of
1982 (43 U.S.C. 390bb).'.
(c) CONFORMING AMENDMENTS- Section 1001(5)(A) of the Food Security Act of
1985 (7 U.S.C. 1308(5)(A)) is amended by striking `through 1001C' and
inserting `through 1001D'.
SEC. 235. ELIMINATION OF OFF BUDGET EXPENDITURES.
(a) KNUTSON-VANDENBERG FUND- Section 3 of the Act of June 9, 1930
(commonly known as the Knutson-Vandenberg Act; 16 U.S.C. 576b), is amended by
striking `and shall constitute a special fund, which is hereby appropriated
and made available until expended,' in the second sentence and inserting `and
are authorized to be appropriated'.
(b) DEPOSITS FROM BRUSH DISPOSAL- The paragraph relating to deposits from
brush disposal under the heading `FOREST SERVICE' in the Act of August 11,
1916 (39 Stat. 462; 16 U.S.C. 490), is amended by striking `and constitute a
special fund, which is hereby appropriated and shall remain available until
expended' and inserting `and are authorized to be appropriated for the purpose
of disposing of such brush and other debris'.
(c) NATIONAL FORESTS ROADS AND TRAILS- (1) Section 6 of Public Law 88-657
(commonly known as the Forest Roads and Trails Act; 16 U.S.C. 537) is amended
by striking `are hereby made available until expended' and inserting `are
authorized to be appropriated'.
(2) The fourteenth paragraph under the heading `FOREST SERVICE' of the Act
of March 4, 1913 (37 Stat. 843; 16 U.S.C. 501), is amended by striking `shall
be available at the end thereof, to be expended by' and inserting `are
authorized to be appropriated to'.
(d) REFORESTATION TRUST FUND- Section 303(d) of Public Law 96-451 (16
U.S.C. 1606a) is amended by striking `The Secretary of Agriculture' and
inserting `In such amounts as are provided in advance in appropriations Acts,
the Secretary of Agriculture'.
(e) TIMBER SALVAGE SALE FUND- Section 14(h) of the National Forest
Management Act of 1976 (16 U.S.C. 472a(h) is amended by striking `are to be
available' and inserting `are authorized to be appropriated'.
(f) COOPERATIVE WORK-OTHER FUND- The penultimate paragraph under the
heading `FOREST SERVICE' in the Act of June 30, 1914 (38 Stat. 430; 16 U.S.C.
498), is amended by striking `which is hereby appropriated and made available
until expended, as the Secretary of Agriculture may direct,' and inserting
`from which funds are authorized to be appropriated to the Secretary of
Agriculture'.
SEC. 236. DEPOSIT OF TAYLOR GRAZING ACT RECEIPTS IN TREASURY.
Section 10 of the Act of June 28, 1934 (commonly known as the Taylor
Grazing Act; 43 U.S.C. 315i), is amended by striking all after `miscellaneous
receipts' and inserting a period.
SEC. 237. REPEAL OF LIVESTOCK FEED ASSISTANCE PROGRAM.
The Emergency Livestock Feed Assistance Act of 1988 (title VI of the
Agricultural Act of 1949; 7 U.S.C. 1471-1471j) is repealed.
SEC. 238. OIL AND GAS RENTALS.
The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended as follows:
(1) In section 14 by striking `a rental of $1 per acre' and inserting `a
rental established by the Secretary of the Interior' and by adding the
following at the end thereof: `The Secretary shall establish fair market
value rental fees under this section based upon the rental fees which would
be charged in arm's length transactions for comparable leases of oil and gas
resources on non-Federal land.'.
(2) In section 17(d) by striking `rental of not less than $1.50 per acre
per year for the first through fifth years of the lease and not less than $2
per acre per year for each year thereafter' and inserting `rental
established by the Secretary of the Interior' and by adding the following at
the end thereof: `The Secretary shall establish fair market value rental
fees under this section
based upon the rental fees which would be charged in arms length transactions
for comparable leases of oil and gas resources on non-Federal land.'.
(3) In section 21(a) by striking `rental, payable at the beginning of
each year, at the rate of 50 cents per acre per annum, for the lands
included in the lease,' and inserting `rental established by the Secretary
of the Interior' and by adding the following at the end thereof: `The
Secretary shall establish fair market value rental fees under this section
based upon the rental fees which would be charged in arms length
transactions for comparable leases on non-Federal land.'.
(4) In section 31(e)(2) by striking `rate of not less than $10 per acre
per year, or the inclusion in a reinstated lease issued pursuant to the
provisions of section 17(c) of this Act of a requirement that future rentals
shall be at a rate not less than $5 per acre per year' and inserting `fair
market value rate (but not less than $10 per acre per year)'.
(5) In section 31(f)(3) by striking `of not less than $5 per acre per
year' and inserting `established by the Secretary at fair market value based
upon the rental fees which would be charged in arms length transactions for
comparable leases on non-Federal land'.
SEC. 239. COMMUNICATION PERMITS.
(a) IN GENERAL- No permit, lease, or authorization for the use of any area
of the public lands or National Forests for communication uses, including but
not limited to radio and television broadcast, mobile radio, cellular
telephone, or microwave relay facilities, shall remain in force and effect
after October 1, 1999, unless, by such date, and by October 1 of each year
thereafter, the holder of such permit, lease, or authorization pays to the
Secretary of the Interior or the Secretary of Agriculture, as appropriate, an
amount equal to the fair market value, as determined by such Secretary, of the
right to use and occupy such area for such communication uses.
(b) DEFINITION- For the purposes of this section, the term `public lands'
shall have the same meaning as defined in section 103(e) of the Federal Land
Policy Management Act of 1976 (43 U.S.C. 1702(e)).
END