I

107TH CONGRESS

1ST SESSION H. R. 906

To amend the Internal Revenue Code of 1986 to allow a credit against

income tax for the costs of employers in providing certain transportation

fringe benefits for their employees.

IN THE HOUSE OF REPRESENTATIVES

MARCH 7, 2001

Mr. MCGOVERN (for himself, Mr. SHAYS, Mrs. MCCARTHY of New York, Mr.

FROST, Mr. NADLER, Mr. CLEMENT, Mr. PASCRELL, Mrs. MORELLA,

Ms. VELA ́ZQUEZ, Mr. ISSA, Mrs. KELLY, Mr. FILNER, Ms. MCKINNEY,

Mr. DAVIS of Illinois, Mr. INSLEE, Mr. MICA, Mrs. TAUSCHER, Mr. MEEHAN, Mr. CONYERS, Mr. WEINER, Mr. SERRANO, Mr. CROWLEY, and Mr.

KING) introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow a

credit against income tax for the costs of employers

in providing certain transportation fringe benefits for

their employees.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Mass Transit Tax

5 Credit Act of 2001’’.
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1 SEC. 2. CREDIT FOR EMPLOYER COSTS OF PROVIDING CER2 TAIN TRANSPORTATION FRINGE BENEFITS

3 TO THEIR EMPLOYEES.

4 (a) IN GENERAL.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to business-related credits) is amended by

7 adding at the end the following new section:

8 ‘‘SEC. 45E. CREDIT FOR EMPLOYER COSTS OF PROVIDING

9 CERTAIN MASS TRANSPORTATION FRINGE

10 BENEFITS TO THEIR EMPLOYEES.

11 ‘‘(a) GENERAL RULE.—For purposes of section 38,

12 the mass transportation fringe credit is an amount equal

13 to 25 percent of the cost paid or incurred by an employer

14 during the taxable year for providing any qualified trans15 portation fringe described in subparagraph (A) or (B) of

16 section 132(f)(1) to employees of such employer.

17 ‘‘(b) LIMITATION.—The amount of the credit under

18 subsection (a) for a month may not exceed the dollar

19 amount per month to which the amount of the fringe bene20 fits are limited under subparagraph (A) of section

21 132(f)(2).

22 ‘‘(c) ELECTION TO HAVE CREDIT NOT APPLY.—A

23 taxpayer may elect to have this section not apply for any

24 taxable year.’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) CREDIT TO BE PART OF GENERAL BUSI2 NESS CREDIT.— Subsection (b) of section 38 of such

3 Code (relating to current year business credit) is

4 amended by striking ‘‘plus’’ at the end of paragraph

5 (12), by striking the period at the end of paragraph

6 (13) and inserting ‘‘, plus’’, and by adding at the

7 end the following new paragraph:

8 ‘‘(14) the mass transportation fringe credit de9 termined under section 45E(a).’’.

10 (2) NO CARRYBACK BEFORE EFFECTIVE

11 DATE.—Subsection (d) of section 39 of such Code

12 (relating to carryback and carryforward of unused

13 credits) is amended by adding at the end the fol14 lowing new paragraph:

15 ‘‘(10) NO CARRYBACK OF SECTION 45E CREDIT

16 BEFORE EFFECTIVE DATE.—No portion of the un17 used business credit for any taxable year which is

18 attributable to the credit determined under section

19 45E may be carried back to a taxable year beginning

20 before January 1, 2002.’’.

21 (3) CLERICAL AMENDMENT.—The table of sec22 tions for subpart D of part IV of subchapter A of

23 chapter 1 of such Code is amended by adding at the

24 end the following new item:

‘‘Sec. 45E. Credit for employer costs of providing certain mass

transportation fringe benefits to their employees.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 2001.

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