I

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.

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Corporate Welfare Elimination Act of 1999’’.

6 (b) TABLE OF CONTENTS.—

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.
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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. 221. Definitions.

Sec. 222. Mining claim maintenance requirements.

Sec. 223. Royalty.

Sec. 224. Severance tax.

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.
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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.

1 TITLE I—TAX REFORM

2 SEC. 101. SHORT TITLE; REFERENCES TO INTERNAL REV3 ENUE CODE OF 1986.

4 (a) SHORT TITLE.—This title may be cited as the

5 ‘‘Termination of Energy and Natural Resource Tax Sub6 sidies Act of 1999’’.

7 (b) REFERENCES TO INTERNAL REVENUE CODE OF

8 1986.—Except as otherwise expressly provided, whenever

9 in this title an amendment or repeal is expressed in terms

10 of an amendment to, or repeal of, a section or other provi11 sion, the reference shall be considered to be made to a

12 section or other provision of the Internal Revenue Code

13 of 1986.

14 SEC. 102. REPEAL OF EXPENSING OF INTANGIBLE DRILL15 ING AND DEVELOPMENT COSTS AND OF MIN16 ING EXPLORATION AND DEVELOPMENT

17 COSTS.

18 (a) INTANGIBLE DRILLING AND DEVELOPMENT

19 COSTS.—Section 263(c) is hereby repealed.

20 (b) DEVELOPMENT EXPENDITURES.—Section 616

21 (relating to development expenditures) is hereby repealed.
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1 (c) EXPLORATION EXPENDITURES.—Subsection (i)

2 of section 617 is amended to read as follows:

3 ‘‘(i) TERMINATION.—No deduction shall be allowed

4 under this section for any expenditure paid or incurred

5 in a taxable year beginning after the date of the enactment

6 of this subsection.’’

7 (d) CONFORMING AMENDMENTS.—

8 (1) Paragraph (2) of section 56(a) is hereby re9 pealed.

10 (2) Subsection (a) of section 57 is amended by

11 striking paragraph (2).

12 (3) Paragraph (2) of section 59(e) is amended

13 by adding ‘‘and’’ at the end of subparagraph (A), by

14 striking the comma at the end of subparagraph (B)

15 and inserting a period, and by striking subpara16 graphs (C), (D), and (E).

17 (4) Subparagraph (A) of section 59(e)(5) is

18 amended by inserting before the period ‘‘, as in ef19 fect before the Termination of Energy and Natural

20 Resource Tax Subsidies Act of 1999’’.

21 (5) Subsection (c) of section 193 is amended to

22 read as follows:

23 ‘‘(c) APPLICATION WITH OTHER DEDUCTIONS.—No

24 deduction shall be allowed under subsection (a) with re25 spect to any expenditure with respect to which a deduction
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1 is allowed or allowable to the taxpayer under any other

2 provision of this chapter.’’

3 (6) Paragraph (1) of section 263(a) is amended

4 by striking subparagraph (A) and by redesignating

5 the succeeding subparagraphs accordingly.

6 (7) Section 263 is amended by striking sub7 section (i).

8 (8) Subsection (c) of section 263A is amended

9 by striking paragraph (3) and by redesignating the

10 succeeding paragraphs accordingly.

11 (9) Paragraph (5) of section 263A(c), as redes12 ignated by paragraph (8), is amended by striking

13 ‘‘subparagraphs (B), (C), (D), and (E)’’ and insert14 ing ‘‘subparagraph (B)’’.

15 (10) Section 291 is amended by striking sub16 section (b).

17 (11) Subsection (n) of section 312 is amended

18 by striking paragraph (2).

19 (12) Paragraph (1) of section 1254(a) is

20 amended—

21 (A) by inserting ‘‘(as in effect before the

22 Termination of Energy and Natural Resource

23 Tax Subsidies Act of 1999)’’ after ‘‘617’’ in

24 subparagraph (A)(i), and
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1 (B) by adding at the end the following:

2 ‘‘For purposes of clause (i), any deduction

3 under section 291(b)(2) (as in effect before the

4 Termination of Energy and Natural Resource

5 Tax Subsidies Act of 1999) shall be treated as

6 a deduction allowable under section 263, 616,

7 or 617 (whichever is appropriate).’’

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to amounts paid or incurred in tax10 able years beginning after the date of the enactment of

11 this Act.

12 SEC. 103. TERMINATION OF CREDIT FOR PRODUCING FUEL

13 FROM NONCONVENTIONAL SOURCE.

14 Section 29 is amended by adding at the end the fol15 lowing new subsection:

16 ‘‘(h) TERMINATION.—Notwithstanding any other

17 provision of this section, no credit shall be allowed under

18 this section with respect to any qualified fuels produced

19 by a facility placed in service after December 31, 1999.’’

20 SEC. 104. REPEAL OF PERCENTAGE DEPLETION.

21 (a) IN GENERAL.—Section 613 (relating to limita22 tions on percentage depletion in case of oil and gas wells)

23 is amended by adding at the end the following new sub24 section:
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1 ‘‘(f) TERMINATION.—The allowance under section

2 611 shall be determined without regard to this section for

3 taxable years beginning after the date of the enactment

4 of this subsection.’’

5 (b) TERMINATION OF SECTION 613A.—Section 613A

6 is amended by adding at the end the following new sub7 section:

8 ‘‘(f) TERMINATION.—The allowance under section

9 611 shall be determined without regard to this section for

10 taxable years beginning after the date of the enactment

11 of this subsection.’’

12 SEC. 105. REPEAL OF TAX BENEFITS FOR ALCOHOL FUELS.

13 (a) REPEAL OF ALCOHOL FUELS CREDIT.—

14 (1) IN GENERAL.—Section 40 (relating to alco15 hol used as fuel) is hereby repealed.

16 (2) CONFORMING AMENDMENTS.—

17 (A) Subsection (b) of section 38 is amend18 ed by striking paragraph (3) and by redesig19 nating the following paragraphs accordingly.

20 (B) Section 87 is hereby repealed.

21 (C) Subsection (c) of section 196 is

22 amended by striking paragraph (3) and by re23 designating the following paragraphs accord24 ingly.
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1 (D) Subsection (m) of section 6501 is

2 amended by striking ‘‘40(f)’’.

3 (E) The table of sections for subpart D of

4 part IV of subchapter A of chapter 1 is amend5 ed by striking the item relating to section 40.

6 (F) The table of sections for part II of

7 subchapter B of chapter 1 is amended by strik8 ing the item relating to section 87.

9 (3) EFFECTIVE DATE.—The amendments made

10 by this subsection shall apply to taxable years begin11 ning after the date of the enactment of this Act.

12 (b) REPEAL OF REDUCED FUEL TAX RATES.—

13 (1) GASOLINE AND DIESEL FUEL.—Section

14 4081 is amended by striking subsection (c) and by

15 redesignating subsections (d) and (e) as subsections

16 (c) and (d), respectively.

17 (2) AVIATION FUEL.—Section 4091 is amended

18 by striking subsection (c).

19 (3) SPECIAL MOTOR FUELS.—

20 (A) Section 4041 is amended by striking

21 subsections (k) and (m).

22 (B) Subsection (b) of section 4041 is

23 amended by striking paragraph (2).

24 (4) CONFORMING AMENDMENTS.—
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1 (A) Section 6427 is amended by striking

2 subsection (f).

3 (B) Subsection (i) of section 6427 is

4 amended by striking paragraph (3) and by re5 designating paragraph (4) as paragraph (3).

6 (C) Paragraph (3) of section 6427(i), as

7 redesignated by subparagraph (B), is amended

8 by striking the last sentence of subparagraph

9 (A) and inserting the following new flush sen10 tence:

11 ‘‘Notwithstanding subsection (l)(1), if the Sec12 retary has not paid pursuant to a claim filed

13 under the preceding sentence within 20 days of

14 the date of the filing of such claim, the claim

15 shall be paid with interest from such date de16 termined by using the overpayment rate and

17 method under section 6621.’’

18 (D) Section 9502 is amended by striking

19 subsection (e).

20 (E) Subsection (b) of section 9503 is

21 amended by striking paragraph (5).

22 (5) EFFECTIVE DATE.—The amendments made

23 by this subsection shall take effect on the date of the

24 enactment of this Act.
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1 SEC. 106. REPEAL OF ENHANCED OIL RECOVERY CREDIT.

2 (a) IN GENERAL.—Section 43 is hereby repealed.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Subsection (b) of section 38 is amended by

5 striking paragraph (5), as redesignated by section

6 105, and by redesignating the succeeding para7 graphs accordingly.

8 (2) The table of sections for subpart D of part

9 IV of subchapter A of chapter 1 is amended by

10 striking the item relating to section 43.

11 (c) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 1999.

14 SEC. 107. REPEAL OF CREDIT AND DEDUCTION FOR ELEC15 TRIC VEHICLES, CLEAN-FUEL VEHICLES, AND

16 CERTAIN REFUELING PROPERTY.

17 (a) REPEAL OF CREDIT FOR QUALIFIED ELECTRIC

18 VEHICLES.—Section 30 is hereby repealed.

19 (b) REPEAL OF DEDUCTION FOR CLEAN-FUEL VEHI20 CLES AND CERTAIN REFUELING PROPERTY.—Section

21 179A is hereby repealed.

22 (c) CONFORMING AMENDMENTS.—

23 (1) Paragraph (24) of section 1016(a) is

24 amended by inserting ‘‘(as in effect on the day be25 fore the date of the enactment of the Corporate Wel-
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1 fare Elimination Act of 1999)’’ after ‘‘section

2 179A(e)(6)(A)’’.

3 (2) Paragraph (25) of section 1016(a) is

4 amended by inserting ‘‘(as in effect on the day be5 fore the date of the enactment of the Corporate Wel6 fare Elimination Act of 1999)’’ after ‘‘section

7 30(d)(1)’’.

8 (3) The table of sections for subpart B of part

9 IV of subchapter A of chapter 1 is amended by

10 striking the item relating to section 30.

11 (4) The table of sections for part VI of sub12 chapter B of chapter 1 is amended by striking the

13 item relating to section 179A.

14 (d) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to taxable years beginning after

16 December 31, 1999.

17 SEC. 108. REPEAL OF DEDUCTION FOR TERTIARY

18 INJECTANTS.

19 (a) IN GENERAL.—Section 193 (relating to tertiary

20 injectants) is hereby repealed.

21 (b) CLERICAL AMENDMENT.—The table of sections

22 for part VI of subchapter B of chapter 1 is amended by

23 striking the item relating to section 193.
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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, 1999.

4 SEC. 109. REPEAL OF REHABILITATION CREDIT FOR NON5 HISTORIC STRUCTURES; REDUCTION OF RE6 HABILITATION CREDIT FOR CERTIFIED HIS7 TORIC STRUCTURES.

8 (a) IN GENERAL.—Subsection (a) of section 47 is

9 amended to read as follows:

10 ‘‘(a) GENERAL RULE.—For purposes of section 46,

11 the rehabilitation credit for any taxable year is 15 percent

12 of the qualified rehabilitation expenditures with respect to

13 any certified historic structure.’’

14 (b) CONFORMING AMENDMENTS.—

15 (1) Subparagraph (A) of section 47(c)(1) is

16 amended by adding ‘‘and’’ at the end of clause (ii),

17 by striking clause (iii) and by redesignating clause

18 (iv) as clause (iii).

19 (2) Paragraph (1) of section 47(c) is amended

20 by striking subparagraph (B) and by redesignating

21 subparagraphs (C) and (D) as subparagraphs (B)

22 and (C), respectively.

23 (c) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to property placed in service after

25 December 31, 1999.
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1 SEC. 110. REPEAL OF TREATMENT OF BLUE CROSS AND

2 BLUE SHIELD ORGANIZATIONS, ETC.

3 (a) IN GENERAL.—Section 833 (relating to treat4 ment of Blue Cross and Blue Shield organizations, etc.)

5 is hereby repealed.

6 (b) CLERICAL AMENDMENT.—The table of sections

7 for part II of subchapter L of chapter 1 is amended by

8 striking the item relating to section 833.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years beginning after

11 December 31, 1999.

12 SEC. 111. REPEAL OF SMALL LIFE INSURANCE COMPANY

13 DEDUCTION.

14 (a) IN GENERAL.—Section 806 is hereby repealed.

15 (b) CONFORMING AMENDMENTS.—

16 (1) The text of section 804 is amended to read

17 as follows:

18 ‘‘For purposes of this part, the term ‘life insurance

19 deductions’ means the general deductions provided in sec20 tion 805.’’

21 (2) Subparagraph (A) of section 815(c)(2) is

22 amended by adding ‘‘and’’ at the end of clause (i),

23 by striking clause (ii), and by redesignating clause

24 (iii) as clause (ii).
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1 (3) Subparagraph (B) of section 453B(e)(2) is

2 amended by striking ‘‘(as defined in section

3 806(b)(3))’’.

4 (4) Subsection (e) of section 453B is amended

5 by adding at the end the following new paragraph:

6 ‘‘(3) NONINSURANCE BUSINESS.—For purposes

7 of paragraph (2)—

8 ‘‘(A) IN GENERAL.—The term ‘noninsur9 ance business’ means any activity which is not

10 an insurance business.

11 ‘‘(B) CERTAIN ACTIVITIES TREATED AS IN12 SURANCE BUSINESSES.—For purposes of sub13 paragraph (A), any activity which is not an in14 surance business shall be treated as an insur15 ance business if—

16 ‘‘(i) it is of a type traditionally carried

17 on by life insurance companies for invest18 ment purposes, but only if the carrying on

19 of such activity (other than in the case of

20 real estate) does not constitute the active

21 conduct of a trade or business, or

22 ‘‘(ii) it involves the performance of ad23 ministrative services in connection with

24 plans providing life insurance, pension, or

25 accident and health benefits.’’
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1 (5) Subclause (II) of section 465(c)(7)(D)(v) is

2 amended by striking ‘‘(within the meaning of section

3 806(b)(3))’’ and inserting ‘‘(within the meaning of

4 section 453B(e)(3))’’.

5 (6) The table of sections for subpart C of part

6 I of subchapter L of chapter 1 is amended by strik7 ing the item relating to section 806.

8 (c) EFFECTIVE DATE.—The amendments made by

9 this section shall apply to taxable years beginning after

10 December 31, 1999.

11 SEC. 112. REPEAL OF ALTERNATIVE TAX ON SMALL PROP12 ERTY AND CASUALTY INSURANCE COMPA13 NIES.

14 (a) IN GENERAL.—Section 831 (relating to tax on

15 insurance companies other than life insurance companies)

16 is amended by striking subsection (b) and by redesig17 nating subsection (c) as subsection (b).

18 (b) CONFORMING AMENDMENTS.—

19 (1) Subparagraph (C) of section 501(c)(15) is

20 amended to read as follows:

21 ‘‘(C) For purposes of subparagraph (B),

22 the term ‘controlled group’ means any con23 trolled group of corporations (as defined in sec24 tion 1563(a)); except that—
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1 ‘‘(i) ‘more than 50 percent’ shall be

2 substituted for ‘at least 80 percent’ each

3 place it appears in section 1563(a), and

4 ‘‘(ii) subsections (a)(4) and (b)(2)(D)

5 of section 1563 shall not apply.’’

6 (2) Sections 832(b)(7)(D)(ii) and 834(a) are

7 each amended by inserting ‘‘(as in effect on the day

8 before the date of the enactment of the Corporate

9 Welfare Elimination Act of 1999)’’ after ‘‘831(b)’’.

10 (3) Sections 904(b)(3)(D) and 1201(a) are each

11 amended by striking ‘‘831(a) or (b)’’ and inserting

12 ‘‘831(a)’’.

13 (c) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to taxable years beginning after

15 December 31, 1999.

16 SEC. 113. CASH ACCOUNTING AND EXPENSING FOR AGRI17 CULTURE.

18 (a) REPEAL OF PROVISIONS PERMITTING FARMING

19 BUSINESSES TO USE CASH METHOD OF ACCOUNTING.—

20 (1) Section 447 is amended by striking sub21 sections (g), (h), and (i).

22 (2) Subsection (b) of section 448 is amended by

23 striking paragraph (1).

24 (b) REPEAL OF DEDUCTION FOR SOIL AND WATER

25 CONSERVATION EXPENDITURES.—
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1 (1) IN GENERAL.—Section 175 (relating to soil

2 and water conservation expenditures) is hereby re3 pealed.

4 (2) CLERICAL AMENDMENT.—The table of sec5 tions for part VI of subchapter B of chapter 1 is

6 amended by striking the item relating to section

7 175.

8 (c) REPEAL OF DEDUCTION FOR EXPENDITURES BY

9 FARMERS FOR FERTILIZER, ETC.—

10 (1) IN GENERAL.—Section 180 (relating to ex11 penditures by farmers for fertilizer, etc) is hereby re12 pealed.

13 (2) CLERICAL AMENDMENT.—The table of sec14 tions for part VI of subchapter B of chapter 1 is

15 amended by striking the item relating to section

16 180.

17 (d) REPEAL OF CERTAIN EXCEPTIONS PERMITTING

18 CERTAIN FARM BUSINESS TO USE CASH METHOD OF AC19 COUNTING.—Section 447 (relating to method of account20 ing for corporations engaged in farming) is amended by

21 striking subsections (d)(2), (e), (g), (h), and (i).

22 (e) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to taxable years beginning after

24 December 31, 1999.
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1 SEC. 114. REPEAL OF EXCLUSION FOR CANCELLATION OF

2 QUALIFIED FARM INDEBTEDNESS.

3 (a) IN GENERAL.—Paragraph (1) of section 108(a)

4 is amended by inserting ‘‘or’’ at the end of subparagraph

5 (B), by striking subparagraph (C), and by redesignating

6 subparagraph (D) as subparagraph (C).

7 (b) EFFECTIVE DATE.—The amendment made by

8 this section shall apply to taxable years beginning after

9 December 31, 1999.

10 SEC. 115. REPEAL OF EXCLUSION FOR CERTAIN COST11 SHARING PAYMENTS.

12 (a) IN GENERAL.—Section 126 (relating to certain

13 cost-sharing payments) is hereby repealed.

14 (b) CLERICAL AMENDMENT.—The table of sections

15 for part III of subchapter B of chapter 1 is amended by

16 striking the item relating to section 126.

17 (c) EFFECTIVE DATE.—The amendments made by

18 this section shall apply to taxable years beginning after

19 December 31, 1999.

20 SEC. 116. REDUCTION OF EXPENSING OF TIMBER-GROWING

21 COSTS.

22 (a) IN GENERAL.—Paragraph (5) of section 263A(c)

23 (relating to general exceptions) is amended by striking

24 ‘‘This section shall not apply to’’ and inserting ‘‘This section shall not apply to 2 25 ⁄3 of the costs described in sub26 section (a)(2) with respect to’’.
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1 (b) EFFECTIVE DATE.—The amendment made by

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

4 SEC. 117. REPEAL OF REFORESTATION CREDIT.

5 (a) IN GENERAL.—Subsection (b) of section 48 is

6 hereby repealed.

7 (b) CONFORMING AMENDMENTS.—

8 (1) The heading of section 48 is amended to

9 read as follows:

10 ‘‘SEC. 48. ENERGY CREDIT.’’

11 (2) The table of sections for subpart E of part

12 IV of subchapter A of chapter 1 is amended by

13 amending the item relating to section 48 to read as

14 follows:

‘‘Sec. 48. Energy credit.’’

15 (c) EFFECTIVE DATE.—The amendments made by

16 this section shall apply to taxable years beginning after

17 December 31, 1999.

18 SEC. 118. REPEAL OF RAPID AMORTIZATION OF REFOREST19 ATION EXPENDITURES.

20 (a) IN GENERAL.—Section 194 is hereby repealed.

21 (b) CONFORMING AMENDMENTS.—

22 (1) Subsection (a) of section 62 is amended by

23 striking paragraph (11).

24 (2) Subsections (a)(3)(C) and (b)(8) of section

25 1245 are each amended by inserting ‘‘(as in effect
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1 before its repeal by the Corporate Welfare Elimi2 nation Act of 1999)’’ after ‘‘section 194’’.

3 (3) The table of sections for part VI of sub4 chapter B of chapter 1 is amended by striking the

5 item relating to section 194.

6 (c) EFFECTIVE DATE.—The amendments made by

7 this section shall apply to taxable years beginning after

8 December 31, 1999.

9 SEC. 119. TERMINATION OF EXCLUSION OF CERTAIN IN10 COME OF CITIZENS OR RESIDENTS OF

11 UNITED STATES LIVING ABROAD.

12 (a) IN GENERAL.—Section 911 (relating to citizens

13 or residents of the United States living abroad) is amend14 ed by redesignating subsection (f) as subsection (g) and

15 by inserting after subsection (e) the following new sub16 section:

17 ‘‘(f) TERMINATION.—This section shall not apply to

18 any taxable year beginning after December 31, 1999.’’

19 (b) EFFECTIVE DATE.—The amendment made by

20 this section shall apply to taxable years beginning after

21 December 31, 1999.
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1 SEC. 120. REPEAL OF EXCLUSION FOR INCOME OF FOR2 EIGN SALES CORPORATIONS.

3 (a) IN GENERAL.—Subpart C of part III of sub4 chapter N of chapter 1 (relating to taxation of foreign

5 sales corporations) is hereby repealed.

6 (b) CLERICAL AMENDMENT.—The table of subparts

7 for such part III is amended by striking the item relating

8 to subpart C.

9 (c) EFFECTIVE DATE.—The amendments made by

10 this section shall apply to taxable years beginning after

11 December 31, 1999.

12 SEC. 121. REPEAL OF DEFERRAL OF INCOME OF CON13 TROLLED FOREIGN CORPORATIONS.

14 (a) GENERAL RULE.—Subpart F of part III of sub15 chapter N of chapter 1 is amended by striking sections

16 952, 953, and 954 and inserting the following new sec17 tions:

18 ‘‘SEC. 952. SUBPART F INCOME.

19 ‘‘(a) GENERAL RULE.—For purposes of this subpart,

20 the term ‘subpart F income’ means the earnings and prof21 its of the controlled foreign corporation for the taxable

22 year computed with the following adjustments:

23 ‘‘(1) There shall be excluded the amount of the

24 earnings and profits which are attributable to in25 come from sources within the United States which

26 is effectively connected with the conduct by the con-
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1 trolled foreign corporation of a trade or business

2 within the United States, except to the extent such

3 income is exempt from taxation (or subject to a re4 duced rate of tax) pursuant to a treaty obligation of

5 the United States. For purposes of the preceding

6 sentence, income described in paragraph (2) or (3)

7 of section 921(d) shall be treated as derived from

8 sources within the United States.

9 ‘‘(2) In determining earnings and profits (or

10 the deficit in earnings and profits), the amount of

11 any illegal bribe, kickback, or other payment (within

12 the meaning of section 162(c), except as otherwise

13 provided in this paragraph) shall not be taken into

14 account to decrease such earnings and profits or to

15 increase such deficit. The payments referred to in

16 the preceding sentence include payments which

17 would be unlawful under the Foreign Corrupt Prac18 tices Act of 1977 if the payor were a United States

19 person.

20 ‘‘(3) Under regulations prescribed by the Sec21 retary, there shall be excluded any part of any earn22 ings and profits if it is established to the satisfaction

23 of the Secretary that such part could not have been

24 distributed by the controlled foreign corporation to

25 United States shareholders who own (within the
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1 meaning of section 958(a)) stock of such controlled

2 foreign corporation because of currency or other re3 strictions or limitations imposed under the laws of

4 any foreign country.

5 ‘‘(4) Earnings and profits shall be determined

6 without regard to paragraphs (4), (5), and (6) of

7 section 312(n). Under regulations, the preceding

8 sentence shall not apply to the extent it would in9 crease earnings and profits by an amount which was

10 previously distributed by the controlled foreign cor11 poration.

12 Except as provided in this subsection and section

13 312(k)(4), the earnings and profits of any foreign corpora14 tion, and the deficit and earnings and profits of any for15 eign corporation for any taxable year shall be determined

16 according to rules similar to those applicable to domestic

17 corporations, under regulations prescribed by the Sec18 retary.

19 ‘‘(b) CERTAIN DEFICITS MAY BE TAKEN INTO AC20 COUNT.—

21 ‘‘(1) TREATMENT OF CERTAIN PRIOR YEAR

22 DEFICITS.—

23 ‘‘(A) IN GENERAL.—The amount included

24 in the gross income of any United States share25 holder under section 951(a)(1)(A)(i) for any
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1 taxable year with respect to any controlled for2 eign corporation shall be reduced by the amount

3 of such shareholder’s pro rata share of any

4 qualified deficit of such controlled foreign cor5 poration.

6 ‘‘(B) QUALIFIED DEFICIT.—For purposes

7 of this paragraph—

8 ‘‘(i) IN GENERAL.—The term ‘quali9 fied deficit’ means any deficit in the earn10 ings and profits of the controlled foreign

11 corporation for any prior taxable year

12 which began after December 31, 1999, and

13 for which such corporation was a con14 trolled foreign corporation, but only to the

15 extent such deficit has not previously been

16 taken into account under this paragraph.

17 ‘‘(ii) SPECIAL RULE FOR DEFICITS

18 BEFORE 2000.—The term ‘qualified deficit’

19 includes any deficit in earnings and profits

20 for any taxable year beginning before Jan21 uary 1, 2000, to the extent that such def22 icit qualified as a qualified deficit under

23 subsection (c)(1)(B) of this section (as in

24 effect on the day before the date of the en25 actment of this subsection); except that
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1 any such deficit may be taken into account

2 under this paragraph only to offset

3 amounts attributable to the same activity

4 as the activity giving rise to such deficit.

5 ‘‘(C) PRO RATA SHARE.—For purposes of

6 this paragraph, the shareholder’s pro rata share

7 of any deficit shall be determined under rules

8 similar to the rules of section 951(a)(2) for

9 whichever of the following yields the smallest

10 share:

11 ‘‘(i) the close of the taxable year, or

12 ‘‘(ii) the close of the taxable year in

13 which the deficit arose.

14 ‘‘(2) CERTAIN DEFICITS OF MEMBER OF THE

15 SAME CHAIN OF CORPORATIONS MAY BE TAKEN

16 INTO ACCOUNT.—

17 ‘‘(A) IN GENERAL.—A controlled foreign

18 corporation may elect to reduce the amount of

19 its subpart F income for any taxable year by

20 the amount of any deficit in earnings and prof21 its of a qualified chain member for a taxable

22 year ending with (or within) the taxable year of

23 such controlled foreign corporation. To the ex24 tent any deficit reduces subpart F income
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1 under the preceding sentence, such deficit shall

2 not be taken into account under paragraph (1).

3 ‘‘(B) QUALIFIED CHAIN MEMBER.—For

4 purposes of this paragraph, the term ‘qualified

5 chain member’ means, with respect to any con6 trolled foreign corporation, any other corpora7 tion which is created or organized under the

8 laws of the same foreign country as the con9 trolled foreign corporation but only if—

10 ‘‘(i) all the stock of such other cor11 poration (other than directors’ qualifying

12 shares) is owned at all times during the

13 taxable year in which the deficit arose (di14 rectly or through 1 or more corporations

15 other than the common parent) by such

16 controlled foreign corporation, or

17 ‘‘(ii) all the stock of such controlled

18 foreign corporation (other than directors’

19 qualifying shares) is owned at all times

20 during the taxable year in which the deficit

21 arose (directly or through 1 or more cor22 porations other than the common parent)

23 by such other corporation.

24 ‘‘(C) COORDINATION.—This paragraph

25 shall be applied after paragraph (1).
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1 ‘‘(3) DETERMINATION OF DEFICIT.—In deter2 mining the amount of any deficit in earnings and

3 profits, the adjustments set forth in subsection (a)

4 shall apply.

5 ‘‘SEC. 953. SPECIAL RULES FOR CERTAIN INSURANCE COM6 PANIES.

7 ‘‘(a) SPECIAL RULE FOR CERTAIN CAPTIVE INSUR8 ANCE COMPANIES.—

9 ‘‘(1) IN GENERAL.—For purposes only of tak10 ing into account subpart F income which is attrib11 utable to related person insurance income—

12 ‘‘(A) the term ‘United States shareholder’

13 means, with respect to any foreign corporation,

14 a United States person (as defined in section

15 957(c)) who owns (within the meaning of sec16 tion 958(a)) any stock of the foreign corpora17 tion,

18 ‘‘(B) the term ‘controlled foreign corpora19 tion’ has the meaning given to such term by

20 section 957(a) determined by substituting ‘25

21 percent or more’ for ‘more than 50 percent’,

22 and

23 ‘‘(C) the pro rata share referred to in sec24 tion 951(a)(1)(A)(i) shall be determined under

25 paragraph (5) of this subsection.
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1 ‘‘(2) RELATED PERSON INSURANCE INCOME.—

2 For purposes of this subsection, the term ‘related

3 person insurance income’ means any insurance in4 come (within the meaning of subsection (c)) attrib5 utable to a policy of insurance or reinsurance with

6 respect to which the person (directly or indirectly)

7 insured is a United States shareholder in the foreign

8 corporation or a related person to such a share9 holder.

10 ‘‘(3) EXCEPTIONS.—

11 ‘‘(A) CORPORATIONS NOT HELD BY IN12 SUREDS.—Paragraph (1) shall not apply to any

13 foreign corporation if at all times during the

14 taxable year of such foreign corporation—

15 ‘‘(i) less than 20 percent of the total

16 combined voting power of all classes of

17 stock of such corporation entitled to vote,

18 and

19 ‘‘(ii) less than 20 percent of the total

20 value of such corporation,

21 is owned (directly or indirectly) under the prin22 ciples of section 883(c)(4) by persons who are

23 (directly or indirectly) insured under any policy

24 of insurance or reinsurance issued by such cor-
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1 poration or who are related persons to any such

2 person.

3 ‘‘(B) DE MINIMIS EXCEPTION.—Paragraph

4 (1) shall not apply to any foreign corporation

5 for a taxable year of such corporation if the re6 lated person insurance income (determined on a

7 gross basis) of such corporation for such tax8 able year is less than 20 percent of its insur9 ance income (as so determined) for such taxable

10 year determined without regard to those provi11 sions of subsection (c)(1) which limit insurance

12 income to income from countries other than the

13 country in which the corporation was created or

14 organized.

15 ‘‘(C) ELECTION TO TREAT INCOME AS EF16 FECTIVELY CONNECTED.—Paragraph (1) shall

17 not apply to any foreign corporation for any

18 taxable year if—

19 ‘‘(i) such corporation elects (at such

20 time and in such manner as the Secretary

21 may prescribe)—

22 ‘‘(I) to treat its related person in23 surance income for such taxable year

24 as income effectively connected with
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1 the conduct of a trade or business in

2 the United States, and

3 ‘‘(II) to waive all benefits (other

4 than with respect to section 884) with

5 respect to related person insurance in6 come granted by the United States

7 under any treaty between the United

8 States and any foreign country, and

9 ‘‘(ii) such corporation meets such re10 quirements as the Secretary shall prescribe

11 to ensure that the tax imposed by this

12 chapter on such income is paid.

13 An election under this subparagraph made for

14 any taxable year shall not be effective if the

15 corporation (or any predecessor thereof) was a

16 disqualified corporation for the taxable year for

17 which the election was made or for any prior

18 taxable year beginning after 1986.

19 ‘‘(D) SPECIAL RULES FOR SUBPARAGRAPH

20 (C).—

21 ‘‘(i) PERIOD DURING WHICH ELEC22 TION IN EFFECT.—

23 ‘‘(I) IN GENERAL.—Except as

24 provided in subclause (II), any elec25 tion under subparagraph (C) shall
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1 apply to the taxable year for which

2 made and all subsequent taxable years

3 unless revoked with the consent of the

4 Secretary.

5 ‘‘(II) TERMINATION.—If a for6 eign corporation which made an elec7 tion under subparagraph (C) for any

8 taxable year is a disqualified corpora9 tion for any subsequent taxable year,

10 such election shall not apply to any

11 taxable year beginning after such sub12 sequent taxable year.

13 ‘‘(ii) EXEMPTION FROM TAX IMPOSED

14 BY SECTION 4371.—The tax imposed by

15 section 4371 shall not apply with respect

16 to any related person insurance income

17 treated as effectively connected with the

18 conduct of a trade or business within the

19 United States under subparagraph (C).

20 ‘‘(E) DISQUALIFIED CORPORATION.—For

21 purposes of this paragraph the term ‘disquali22 fied corporation’ means, with respect to any

23 taxable year, any foreign corporation which is a

24 controlled foreign corporation for an uninter25 rupted period of 30 days or more during such
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1 taxable year (determined without regard to this

2 subsection) but only if a United States share3 holder (determined without regard to this sub4 section) owns (within the meaning of section

5 958(a)) stock in such corporation at some time

6 during such taxable year.

7 ‘‘(4) TREATMENT OF MUTUAL INSURANCE COM8 PANIES.—In the case of a mutual insurance

9 company—

10 ‘‘(A) this subsection shall apply,

11 ‘‘(B) policyholders of such company shall

12 be treated as shareholders, and

13 ‘‘(C) appropriate adjustments in the appli14 cation of this subpart shall be made under reg15 ulations prescribed by the Secretary.

16 ‘‘(5) DETERMINATION OF PRO RATA SHARE.—

17 ‘‘(A) IN GENERAL.—The pro rata share

18 determined under this paragraph for any

19 United States shareholder is the lesser of—

20 ‘‘(i) the amount which would be deter21 mined under paragraph (2) of section

22 951(a) if—

23 ‘‘(I) only related person insur24 ance income were taken into account,
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1 ‘‘(II) stock owned (within the

2 meaning of section 958(a)) by United

3 States shareholders on the last day of

4 the taxable year were the only stock

5 in the foreign corporation, and

6 ‘‘(III) only distributions received

7 by United States shareholders were

8 taken into account under subpara9 graph (B) of such paragraph (2), or

10 ‘‘(ii) the amount which would be de11 termined under paragraph (2) of section

12 951(a) on the basis of the entire subpart

13 F income of the foreign corporation for the

14 taxable year.

15 ‘‘(B) COORDINATION WITH OTHER PROVI16 SIONS.—The Secretary shall prescribe regula17 tions providing for such modifications to the

18 provisions of this subpart as may be necessary

19 or appropriate by reason of subparagraph (A).

20 ‘‘(6) RELATED PERSON.—For purposes of this

21 subsection—

22 ‘‘(A) IN GENERAL.—Except as provided in

23 subparagraph (B), the term ‘related person’ has

24 the meaning given such term by section 964(a).
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1 ‘‘(B) TREATMENT OF CERTAIN LIABILITY

2 INSURANCE POLICIES.—In the case of any pol3 icy of insurance covering liability arising from

4 services performed as a director, officer, or em5 ployee of a corporation or as a partner or em6 ployee of a partnership, the person performing

7 such services and the entity for which such

8 services are performed shall be treated as re9 lated persons.

10 ‘‘(7) COORDINATION WITH SECTION 1248.—For

11 purposes of section 1248, if any person is (or would

12 be but for paragraph (3)) treated under paragraph

13 (1) as a United States shareholder with respect to

14 any foreign corporation which would be taxed under

15 subchapter L if it were a domestic corporation and

16 which is (or would be but for paragraph (3)) treated

17 under paragraph (1) as a controlled foreign

18 corporation—

19 ‘‘(A) such person shall be treated as meet20 ing the stock ownership requirements of section

21 1248(a)(2) with respect to such foreign cor22 poration, and

23 ‘‘(B) such foreign corporation shall be

24 treated as a controlled foreign corporation.
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1 ‘‘(8) REGULATIONS.—The Secretary shall pre2 scribe such regulations as may be necessary to carry

3 out the purposes of this subsection, including—

4 ‘‘(A) regulations preventing the avoidance

5 of this subsection through cross insurance ar6 rangements or otherwise, and

7 ‘‘(B) regulations which may provide that a

8 person will not be treated as a United States

9 shareholder under paragraph (1) with respect

10 to any foreign corporation if neither such per11 son (nor any related person to such person) is

12 (directly or indirectly) insured under any policy

13 of insurance or reinsurance issued by such for14 eign corporation.

15 ‘‘(b) ELECTION BY FOREIGN INSURANCE COMPANY

16 TO BE TREATED AS DOMESTIC CORPORATION.—

17 ‘‘(1) IN GENERAL.—If—

18 ‘‘(A) a foreign corporation is a controlled

19 foreign corporation (as defined in section

20 957(a) by substituting ‘25 percent or more’ for

21 ‘more than 50 percent’ and by using the defini22 tion of United States shareholder under sub23 section (a)(1)(A) of this section),
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1 ‘‘(B) such foreign corporation would qual2 ify under part I or II of subchapter L for the

3 taxable year if it were a domestic corporation,

4 ‘‘(C) such foreign corporation meets such

5 requirements as the Secretary shall prescribe to

6 ensure that the taxes imposed by this chapter

7 on such foreign corporation are paid, and

8 ‘‘(D) such foreign corporation makes an

9 election to have this paragraph apply and

10 waives all benefits to such corporation granted

11 by the United States under any treaty,

12 for purposes of this title, such corporation shall be

13 treated as a domestic corporation.

14 ‘‘(2) PERIOD DURING WHICH ELECTION IS IN

15 EFFECT.—

16 ‘‘(A) IN GENERAL.—Except as provided in

17 subparagraph (B), an election under paragraph

18 (1) shall apply to the taxable year for which

19 made and all subsequent taxable years unless

20 revoked with the consent of the Secretary.

21 ‘‘(B) TERMINATION.—If a corporation

22 which made an election under paragraph (1) for

23 any taxable year fails to meet the requirements

24 of subparagraph (A), (B), or (C) of paragraph

25 (1) for any subsequent taxable year, such elec-
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1 tion shall not apply to any taxable year begin2 ning after such subsequent taxable year.

3 ‘‘(3) TREATMENT OF LOSSES.—If any corpora4 tion treated as a domestic corporation under this

5 subsection is treated as a member of an affiliated

6 group for purposes of chapter 6 (relating to consoli7 dated returns), any loss of such corporation shall be

8 treated as a dual consolidated loss for purposes of

9 section 1503(d) without regard to paragraph (2)(B)

10 thereof.

11 ‘‘(4) EFFECT OF ELECTION.—

12 ‘‘(A) IN GENERAL.—For purposes of sec13 tion 367, any foreign corporation making an

14 election under paragraph (1) shall be treated as

15 transferring (as the 1st day of the 1st taxable

16 year to which such election applies) all of its as17 sets to a domestic corporation in connection

18 with an exchange to which section 354 applies.

19 ‘‘(B) EXCEPTION FOR PRE-1988 EARNINGS

20 AND PROFIT.—

21 ‘‘(i) IN GENERAL.—Earnings and

22 profits of the foreign corporation accumu23 lated in taxable years beginning before

24 January 1, 1988, shall not be included in

25 the gross income of the persons holding
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1 stock in such corporation by reason of sub2 paragraph (A).

3 ‘‘(ii) TREATMENT OF DISTRIBU4 TIONS.—For purposes of this title, any dis5 tribution made by a corporation to which

6 an election under paragraph (1) applies

7 out of earnings and profits accumulated in

8 taxable years beginning before January 1,

9 1988, shall be treated as a distribution

10 made by a foreign corporation.

11 ‘‘(iii) CERTAIN RULES TO CONTINUE

12 TO APPLY TO PRE-1988 EARNINGS.—The

13 provisions specified in clause (iv) shall be

14 applied without regard to paragraph (1),

15 except that, in the case of a corporation to

16 which an election under paragraph (1) ap17 plies, only earnings and profits accumu18 lated in taxable years beginning before

19 January 1, 1988, shall be taken into ac20 count.

21 ‘‘(iv) SPECIFIED PROVISIONS.—The

22 provisions specified in this clause are:

23 ‘‘(I) Section 1248 (relating to

24 gain from certain sales or exchanges
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1 of stock in certain foreign corpora2 tions).

3 ‘‘(II) This subpart to the extent

4 such subpart relates to earnings in5 vested in United States property or

6 amounts referred to in clause (ii) or

7 (iii) of section 951(a)(1)(A).

8 ‘‘(III) Section 884 to the extent

9 the foreign corporation reinvested

10 1987 earnings and profits in United

11 States assets.

12 ‘‘(5) EFFECT OF TERMINATION.—For purposes

13 of section 367, if—

14 ‘‘(A) an election is made by a corporation

15 under paragraph (1) for any taxable year, and

16 ‘‘(B) such election ceases to apply for any

17 subsequent taxable year,

18 such corporation shall be treated as a domestic cor19 poration transferring (as of the 1st day of such sub20 sequent taxable year) all of its property to a foreign

21 corporation in connection with an exchange to which

22 section 354 applies.

23 ‘‘(6) ADDITIONAL TAX ON CORPORATION MAK24 ING ELECTION.—
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1 ‘‘(A) IN GENERAL.—If a corporation

2 makes an election under paragraph (1), the

3 amount of tax imposed by this chapter for the

4 1st taxable year to which such election applies

5 shall be increased by the amount determined

6 under subparagraph (B).

7 ‘‘(B) AMOUNT OF TAX.—The amount of

8 tax determined under this paragraph shall be

9 equal to the lesser of—

‘‘(i) 3 10 ⁄4 of 1 percent of the aggregate

11 amount of capital and accumulated surplus

12 of the corporation as of December 31,

13 1987, or

14 ‘‘(ii) $1,500,000.

15 ‘‘(c) INSURANCE INCOME DEFINED.—For purposes

16 of this section, the term ‘insurance income’ means any in17 come which—

18 ‘‘(1) is attributable to the issuing (or rein19 suring) of any insurance or annuity contract—

20 ‘‘(A) in connection with property in, liabil21 ity arising out of activity in, or in connection

22 with the lives or health of residents of, a coun23 try other than the country under the laws of

24 which the controlled foreign corporation is cre25 ated or organized, or
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1 ‘‘(B) in connection with risks not described

2 in subparagraph (A) as the result of any ar3 rangement whereby another corporation receives

4 a substantially equal amount of premiums or

5 other consideration in respect of issuing (or re6 insuring) a contract described in subparagraph

7 (A), and

8 ‘‘(2) would (subject to the modifications pro9 vided by paragraphs (1) and (2) of subsection (d))

10 be taxed under subchapter L of this chapter if such

11 income were the income of a domestic insurance

12 company.

13 ‘‘(d) SPECIAL RULES.—In determining the amount

14 of insurance income—

15 ‘‘(1) The following provisions of subchapter L

16 shall not apply:

17 ‘‘(A) The small life insurance company de18 duction.

19 ‘‘(B) Section 805(a)(5) (relating to oper20 ations loss deduction).

21 ‘‘(C) Section 832(c)(5) (relating to certain

22 capital losses).

23 ‘‘(2) The items referred to in—

24 ‘‘(A) section 803(a)(1) (relating to gross

25 amount of premiums and other considerations),
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1 ‘‘(B) section 803(a)(2) (relating to net de2 crease in reserves),

3 ‘‘(C) section 805(a)(2) (relating to net in4 crease in reserves), and

5 ‘‘(D) section 832(b)(4) (relating to pre6 miums earned on insurance contracts),

7 shall be taken into account only to the extent they

8 are in respect of any reinsurance or the issuing of

9 any insurance or annuity contract described in sub10 section (a)(1).

11 ‘‘(3) All items of income, expenses, losses, and

12 deductions shall be properly allocated or apportioned

13 under regulations prescribed by the Secretary.’’

14 (b) REPEAL OF EXPORT TRADE CORPORATION PRO15 VISIONS.—Subpart G of part III of subchapter N of chap16 ter 1 (relating to export trade corporations) is hereby re17 pealed.

18 (c) CONFORMING AMENDMENTS TO SUBPART F.—

19 (1) Subparagraph (A) of section 955(a)(1) is

20 amended by inserting ‘‘(as in effect for taxable years

21 beginning before 1987)’’ after ‘‘section 954(b)(2)’’.

22 (2) Subsection (b) of section 955 is amended by

23 striking ‘‘within the meaning of section 954(d)(3)’’

24 and inserting ‘‘within the meaning of section

25 964(a)’’.
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1 (3) Paragraph (2) of section 956(c) is

2 amended—

3 (A) by striking ‘‘section 953(a)(1)’’ in sub4 paragraph (E) and inserting ‘‘section

5 953(c)(1)’’, and

6 (B) by inserting ‘‘(as in effect on the day

7 before the date of the enactment of this par8 enthetical) or under section 952(a)(1)’’ after

9 ‘‘section 952(b)’’ in subparagraph (H).

10 (4) Subsection (b) of section 957 is amended—

11 (A) by striking ‘‘income described in sec12 tion 953(a)’’ and inserting ‘‘subpart F income

13 attributable to income described in section

14 953(c)’’, and

15 (B) by striking ‘‘section 953(a)(1)’’ and in16 serting ‘‘section 953(c)(1)’’.

17 (5) Subsection (b) of section 958 is amended—

18 (A) by striking ‘‘954(d)(3), 956(b)(2), and

19 957’’ and inserting ‘‘956(b)(2), 957, and

20 964(a)’’, and

21 (B) by striking ‘‘954(d)(3)’’ the second

22 place it appears and inserting ‘‘964(a)’’.

23 (6) Subsection (b) of section 959 is amended by

24 striking ‘‘be also included in the gross income’’ and
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1 inserting ‘‘be also included in the subpart F in2 come’’.

3 (7) Subsection (a) of section 964 is amended to

4 read as follows:

5 ‘‘(a) RELATED PERSON.—For purposes of this part,

6 a person is a related person with respect to a controlled

7 foreign corporation, if—

8 ‘‘(1) such person is an individual, corporation,

9 partnership, trust, or estate which controls, or is

10 controlled by, the controlled foreign corporation, or

11 ‘‘(2) such person is a corporation, partnership,

12 trust, or estate which is controlled by the same per13 son or persons which control the controlled foreign

14 corporation.

15 For purposes of the preceding sentence, control means,

16 with respect to a corporation, the ownership, directly or

17 indirectly, of stock possessing more than 50 percent of the

18 total voting power of all classes of stock entitled to vote

19 or of the total value of stock of such corporation. In the

20 case of a partnership, trust, or estate, control means the

21 ownership, directly or indirectly, more than 50 percent (by

22 value) of the beneficial interests in such partnership, trust,

23 or estate. For purposes of this paragraph, rules similar

24 to the rules of section 958 shall apply.’’
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1 (8) Section 964 is amended by striking sub2 section (b).

3 (9) The table of sections for subpart F of part

4 III of subchapter N of chapter 1 is amended by

5 striking the items relating to sections 952, 953 and

6 954 and inserting the following:

‘‘Sec. 952. Subpart F income.

‘‘Sec. 953. Special rules for certain insurance companies.’’

7 (d) OTHER CONFORMING AMENDMENTS.—

8 (1) Paragraph (2) of section 552(c) is

9 amended—

10 (A) by amending subparagraph (A) to read

11 as follows:

12 ‘‘(A) is received from a related person

13 which (i) is a corporation created or organized

14 under the laws of the same foreign country

15 under the laws of which the foreign corporation

16 involved was created or organized, and (ii) has

17 a substantial part of its assets used in its trade

18 or business located in such same foreign coun19 try, and’’, and

20 (B) by striking ‘‘954(d)(3)’’ and inserting

21 ‘‘964(a)’’.

22 (2) Subparagraph (B) of section 861(c)(2) is

23 amended by striking ‘‘954(d)(3)’’ and inserting

24 ‘‘964(a)’’.
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1 (3) Subparagraph (A) of section 864(d)(5) is

2 amended by striking clauses (ii), (iii), and (iv).

3 (4) Subparagraph (A) of section 881(c)(5) is

4 hereby repealed.

5 (5) Subparagraph (D) of section 884(d)(2) is

6 amended by striking ‘‘953(c)(3)(C)’’ and inserting

7 ‘‘953(a)(3)(C)’’.

8 (6) Subparagraph (A) of section 898(b)(3) is

9 amended—

10 (A) by striking ‘‘953(c)(2)’’ and inserting

11 ‘‘953(a)(2)’’, and

12 (B) by striking ‘‘953(c)(1) and inserting

13 ‘‘953(a)(1)’’.

14 (7) Clause (i) of section 904(d)(2)(A) is amend15 ed by inserting ‘‘, as in effect on the day before the

16 date of the repeal of such section’’ after ‘‘section

17 954(c)’’.

18 (8) Subclause (III) of section 904(d)(2)(C)(ii)

19 is amended by striking ‘‘953(a)’’ and inserting

20 ‘‘953(c)’’.

21 (9) Subparagraph (D) of section 904(d)(2) is

22 amended—

23 (A) by inserting ‘‘, as in effect on the day

24 before the date of the repeal of such section’’

25 after ‘‘954(f)’’, and
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1 (B) by inserting ‘‘or passive income’’ be2 fore the period at the end thereof.

3 (10) Subparagraph (H) of section 904(d)(2) is

4 amended by striking ‘‘954(d)(3)’’ and inserting

5 ‘‘964(a)’’.

6 (11) Subparagraph (E) of section 904(d)(3) is

7 hereby repealed.

8 (12) Subparagraph (C) of section 988(a)(3) is

9 amended by striking ‘‘954(d)(3)’’ and inserting

10 ‘‘964(a)’’.

11 (13) Subsection (c) of section 999 is

12 amended—

13 (A) by striking ‘‘, 952(a)(3),’’ in para14 graph (1), and

15 (B) by striking ‘‘, the addition to subpart

16 F income under section 952(a)(3),’’ in para17 graph (2).

18 (14) Subsection (a) of section 6046 is amended

19 by striking ‘‘953(c)’’ and inserting ‘‘953(a)’’.

20 (15) The table of subparts for part III of sub21 chapter M of chapter 1 is amended by striking the

22 item relating to subpart G.

23 (e) EFFECTIVE DATE.—The amendments made by

24 this section shall apply to taxable years of controlled for25 eign corporations beginning after December 31, 1999, and
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1 to the taxable years of United States shareholders with

2 which (or in which) such taxable years of controlled for3 eign corporations end.

4 SEC. 122. REPEAL OF DEFERRAL OF TAX UNDER MER5 CHANT MARINE CAPITAL CONSTRUCTIONS

6 FUNDS.

7 (a) IN GENERAL.—Subsection (c) of section 7518

8 (relating to tax incentives relating to Merchant Marine

9 Capital Construction Fund) is amended by adding at the

10 end the following new paragraph:

11 ‘‘(3) TERMINATION.—Subparagraphs (A), (B),

12 and (C) of paragraph (1) shall not apply to any tax13 able year beginning after December 31, 1999.’’

14 (b) CONFORMING AMENDMENT TO MERCHANT MA15 RINE ACT, 1936.—Subsection (d) of section 607 of the

16 Merchant Marine Act, 1936, is amended by adding at the

17 end the following new paragraph:

18 ‘‘(3) TERMINATION.—Subparagraphs (A), (B),

19 and (C) of paragraph (1) shall not apply to any tax20 able year beginning after December 31, 1999.’’

21 SEC. 123. REPEAL OF SPECIAL TREATMENT FOR MAGAZINE

22 CIRCULATION EXPENDITURES.

23 (a) IN GENERAL.—Section 173 (relating to circula24 tion expenditures) is hereby repealed.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Subparagraph (A) of section 56(b)(2) is

2 amended to read as follows:

3 ‘‘(A) IN GENERAL.—The amount allowable

4 as a deduction under section 174(a) in com5 puting the regular tax for amounts paid or in6 curred after December 31, 1986, shall be cap7 italized and shall be amortized ratably over the

8 10-year period beginning with the taxable year

9 in which the expenditures were made.’’

10 (2) Paragraph (2) of section 56(c) is amended

11 by striking subparagraph (C).

12 (3) Clause (ii) of section 56(g)(4)(D) is amend13 ed to read as follows:

14 ‘‘(ii) AMORTIZATION OF ORGANIZA15 TION EXPENDITURES NOT TO APPLY.—

16 Section 248 shall not apply to expenditures

17 paid or incurred in taxable year beginning

18 after December 31, 1989.’’

19 (4) Paragraph (1) of section 59(e) is amended

20 by striking ‘‘(3-year period in the case of circulation

21 expenditures described in section 173)’’.

22 (5) Paragraph (2) of section 59(e) is amended

23 by striking subparagraph (A) and by redesignating

24 the following subparagraphs accordingly.
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1 (6) Paragraph (3) of section 312(n) is amended

2 to read as follows:

3 ‘‘(3) AMORTIZATION OF ORGANIZATION EX4 PENDITURES NOT TO APPLY.—Section 248 shall not

5 apply.’’

6 (7) Subparagraph (B) of section 1016(a)(1) is

7 amended by striking ‘‘expenditures’’ and inserting

8 ‘‘expenditures, as in effect on the day before the

9 date of the enactment of the Corporate Welfare

10 Elimination Act of 1999’’.

11 (8) The table of sections for part VI of sub12 chapter B of chapter 1 is amended by striking the

13 item relating to section 173.

14 (c) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to amounts paid or incurred after

16 December 31, 1999.

17 SEC. 124. REPEAL OF SPECIAL TREATMENT FOR RETURNS

18 OF MAGAZINES, PAPERBACKS, AND RECORDS.

19 (a) IN GENERAL.—Section 458 (relating to maga20 zines, paperbacks, and records returned after the close of

21 the taxable year) is hereby repealed.

22 (b) CLERICAL AMENDMENT.—The table of sections

23 for subpart B of part II of subchapter E of chapter 1

24 is amended by striking the item relating to section 458.
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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, 1999.

4 TITLE II—NATURAL RESOURCES

5 SEC. 201. PUBLIC RESOURCES DEFICIT REDUCTION ACT OF

6 1999.

7 This title may be cited as the ‘‘Public Resources Def8 icit Reduction Act of 1999’’.

9 Subtitle A—General Provisions

10 SEC. 211. FAIR MARKET VALUE FOR RESOURCE DISPOSAL.

11 (a) IN GENERAL.—Notwithstanding any other provi12 sion of law, no timber, minerals, forage, or other natural

13 resource owned by the United States, no Federally owned

14 water, and no hydroelectric energy generated at a Federal

15 facility may be sold, leased, or otherwise disposed of by

16 any department, agency, or instrumentality of the United

17 States for an amount less than fair market value, as deter18 mined by such department, agency, or instrumentality.

19 (b) STAGGERED EFFECTIVE DATES.—

20 (1) EXISTING CONTRACTS, LEASES, AND

21 AGREEMENTS.—Subsection (a) shall not apply to

22 any existing contract, lease, or other binding ar23 rangement entered into before the date of the enact24 ment of this title unless such contract, lease, or
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1 other arrangement is renewed or extended after such

2 date.

3 (2) CONTRACTS, LEASES, AND AGREEMENTS

4 ENTERED INTO IN 5-YEAR PERIOD.—In the case of

5 any contract, lease, or other binding arrangement

6 entered into or renewed or extended during the 5-

7 year period beginning on the date of the enactment

8 of this title, subsection (a) shall apply immediately

9 upon the expiration of such period.

10 (3) CONTRACTS, LEASES, AND AGREEMENTS

11 ENTERED INTO AFTER 5-YEAR PERIOD.—Subsection

12 (a) shall apply immediately to all contracts, leases,

13 or other binding arrangements entered into or re14 newed or extended after the end of the 5-year period

15 beginning on the date of the enactment of this title.

16 (c) WAIVER.—The President may waive the require17 ments of subsection (a) whenever the President deter18 mines that such waiver is in the national interest. The

19 President shall submit a notice to Congress containing an

20 explanation of the reasons for any such determination

21 within 60 days after the date of the determination.

22 SEC. 212. FEES FROM PROGRAM BENEFICIARIES.

23 (a) GENERAL AUTHORITY.—The Secretary of the In24 terior and the Secretary of Agriculture are each author25 ized to establish and collect from persons subject to pro-
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1 grams administered by each such Secretary such user fees

2 as may be necessary to reimburse the United States for

3 the expenses incurred in administering such programs.

4 The aggregate amount of fees that may be assessed and

5 collected under this section by each such Secretary in any

6 fiscal year from persons subject to any such program shall

7 not exceed the aggregate amount of expenses incurred in

8 administering such program in such fiscal year.

9 (b) EFFECTIVE DATE; OIL AND GAS LEASE TRANS10 FERS.—The Secretary of the Interior and the Secretary

11 of Agriculture may, by rule, establish the applicable effec12 tive date of any fee to be imposed under this section, ex13 cept that fees shall be established and collected under this

14 section from each person receiving a transfer of a Federal

15 onshore oil and gas lease after the date of the enactment

16 of this title.

17 SEC. 213. REVENUES FROM SALE, LEASE, AND TRANSFER

18 OF ASSETS.

19 (a) IN GENERAL.—Section 1105(a) of chapter 11 of

20 title 31, United States Code, is amended by inserting after

21 paragraph (30) the following new paragraph:

22 ‘‘(31) a separate statement, asset by asset and

23 aggregated by major functional category, of—

24 ‘‘(A) projected revenues during the fiscal

25 year for which the budget is submitted from the
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1 anticipated sale, lease, or transfer of any phys2 ical asset; and

3 ‘‘(B) the estimated price at which this

4 asset or a comparable asset would be sold in an

5 arms length transaction in the private sector.’’.

6 (b) EFFECTIVE DATE.—The amendment made by

7 subsection (a) shall become effective for fiscal year 2001

8 and shall be fully reflected in the fiscal year 2001 budget

9 submitted by the President in February 2000 under sec10 tion 1105(a) of title 31, United States Code.

11 Subtitle B—Revenue From Mining

12 Claims

13 SEC. 221. DEFINITIONS.

14 (a) DEFINITIONS.—As used in this subtitle:

15 (1) The term ‘‘locatable mineral’’ means any

16 mineral not subject to disposition under any of the

17 following:

18 (A) The Mineral Leasing Act (30 U.S.C.

19 181 et seq.).

20 (B) The Geothermal Steam Act of 1970

21 (30 U.S.C. 1001 et seq.).

22 (C) The Act of July 31, 1947, commonly

23 known as the Materials Act of 1947 (30 U.S.C.

24 601 et seq.).
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1 (D) The Mineral Leasing Act for Acquired

2 Lands (30 U.S.C. 351 et seq.).

3 (2) The term ‘‘mineral activities’’ means any

4 activity for, related to, or incidental to mineral ex5 ploration, mining, beneficiation, and processing ac6 tivities for any locatable mineral, including access.

7 When used with respect to this term:

8 (A) The term ‘‘exploration’’ means those

9 techniques employed to locate the presence of a

10 locatable mineral deposit and to establish its

11 nature, position, size, shape, grade, and value.

12 (B) The term ‘‘mining’’ means the proc13 esses employed for the extraction of a locatable

14 mineral from the earth.

15 (C) The term ‘‘beneficiation’’ means the

16 crushing and grinding of locatable mineral ore

17 and such processes as are employed to free the

18 mineral from other constituents, including but

19 not necessarily limited to, physical and chemical

20 separation techniques.

21 (D) The term ‘‘processing’’ means proc22 esses downstream of beneficiation employed to

23 prepare locatable mineral ore into the final

24 marketable product, including but not limited

25 to, smelting and electrolytic refining.
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1 (3) The term ‘‘mining claim’’ means a claim for

2 the purposes of mineral activities.

3 (4) The term ‘‘Secretary’’ means, unless other4 wise provided in this subtitle, the Secretary of the

5 Interior acting through the Director of the Minerals

6 Management Service.

7 SEC. 222. MINING CLAIM MAINTENANCE REQUIREMENTS.

8 (a) IN GENERAL.—The holder of each mining claim

9 located on lands open to location shall pay to the Secretary

10 an annual claim maintenance fee of $100 per claim per

11 calendar year.

12 (b) TIME OF PAYMENT.—The claim maintenance fee

13 payable pursuant to subsection (a) for any year shall be

14 paid on or before August 31 of each year, except that for

15 the initial calendar year in which the location is made,

16 the locator shall pay the initial claim maintenance fee at

17 the time the location notice is recorded with the Bureau

18 of Land Management.

19 (c) OIL SHALE CLAIMS SUBJECT TO CLAIM MAINTE20 NANCE FEES UNDER ENERGY POLICY ACT OF 1992.—

21 This section shall not apply to any oil shale claims for

22 which a fee is required to be paid under section 2511(e)(2)

23 of the Energy Policy Act of 1992 (106 Stat. 3111; 30

24 U.S.C. 242).
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1 (d) CLAIM MAINTENANCE FEES PAYABLE UNDER

2 1993 ACT.—The claim maintenance fees payable under

3 this section for any period with respect to any claim shall

4 be reduced by the amount of the claim maintenance fees

5 paid under section 10101 of the Omnibus Budget Rec6 onciliation Act of 1993 (30 U.S.C. 28f) with respect to

7 that claim and with respect to the same period.

8 (e) WAIVER.—(1) The claim maintenance fee re9 quired under this section may be waived for a claim holder

10 who certifies in writing to the Secretary that on the date

11 the payment was due, the claim holder and all related par12 ties held not more than 10 mining claims on lands open

13 to location. Such certification shall be made on or before

14 the date on which payment is due.

15 (2) For purposes of paragraph (1), with respect to

16 any claim holder, the term ‘‘related party’’ means each

17 of the following:

18 (A) The spouse and dependent children (as de19 fined in section 152 of the Internal Revenue Code of

20 1986) of the claim holder.

21 (B) Any affiliate of the claim holder.

22 (f) CO-OWNERSHIP.—Upon the failure of any one or

23 more of several co-owners to contribute such co-owner or

24 owners’ portion of the fee under this section, any co-owner

25 who has paid such fee may, after the payment due date,
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1 give the delinquent co-owner or owners notice of such fail2 ure in writing (or by publication in the newspaper nearest

3 the claim for at least once a week for at least 90 days).

4 If at the expiration of 90 days after such notice in writing

5 or by publication, any delinquent co-owner fails or refuses

6 to contribute his portion, his interest in the claim shall

7 become the property of the co-owners who have paid the

8 required fee.

9 SEC. 223. ROYALTY.

10 (a) RESERVATION OF ROYALTY.—Production of all

11 locatable minerals from any mining claim located under

12 the general mining laws, or mineral concentrates or prod13 ucts derived from locatable minerals from any mining

14 claim located under the general mining laws, as the case

15 may be, shall be subject to a royalty of 8 percent of the

16 gross income from such production. The claimholder and

17 any operator to whom the claimholder has assigned the

18 obligation to make royalty payments under the claim and

19 any person who controls such claimholder or operator shall

20 be jointly and severally liable for payment of such royal21 ties.

22 (b) DUTIES OF CLAIM HOLDERS, OPERATORS, AND

23 TRANSPORTERS.—(1) A person—

24 (A) who is required to make any royalty pay25 ment under this section shall make such payments
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1 to the United States at such times and in such man2 ner as the Secretary may by rule prescribe; and

3 (B) shall notify the Secretary, in the time and

4 manner as may be specified by the Secretary, of any

5 assignment that such person may have made of the

6 obligation to make any royalty or other payment

7 under a mining claim.

8 (2) Any person paying royalties under this section

9 shall file a written instrument, together with the first roy10 alty payment, affirming that such person is liable to the

11 Secretary for making proper payments for all amounts due

12 for all time periods for which such person has a payment

13 responsibility. Such liability for the period referred to in

14 the preceding sentence shall include any and all additional

15 amounts billed by the Secretary and determined to be due

16 by final agency or judicial action. Any person liable for

17 royalty payments under this section who assigns any pay18 ment obligation shall remain jointly and severally liable

19 for all royalty payments due for the claim for the period.

20 (3) A person conducting mineral activities shall—

21 (A) develop and comply with the site security

22 provisions in operations permit designed to protect

23 from theft the locatable minerals, concentrates, or

24 products derived therefrom which are produced or

25 stored on a mining claim, and such provisions shall
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1 conform with such minimum standards as the Sec2 retary may prescribe by rule, taking into account the

3 variety of circumstances on mining claims; and

4 (B) not later than the 5th business day after

5 production begins anywhere on a mining claim, or

6 production resumes after more than 90 days after

7 production was suspended, notify the Secretary, in

8 the manner prescribed by the Secretary, of the date

9 on which such production has begun or resumed.

10 (4) The Secretary may by rule require any person en11 gaged in transporting a locatable mineral, concentrate, or

12 product derived therefrom to carry on his or her person,

13 in his or her vehicle, or in his or her immediate control,

14 documentation showing, at a minimum, the amount, ori15 gin, and intended destination of the locatable mineral, con16 centrate, or product derived therefrom in such cir17 cumstances as the Secretary determines is appropriate.

18 (c) RECORDKEEPING AND REPORTING REQUIRE19 MENTS.—(1) A claim holder, operator, or other person di20 rectly involved in developing, producing, processing, trans21 porting, purchasing, or selling locatable minerals, con22 centrates, or products derived therefrom, subject to this

23 title, through the point of royalty computation shall estab24 lish and maintain any records, make any reports, and pro25 vide any information that the Secretary may reasonably
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1 require for the purposes of implementing this section or

2 determining compliance with rules or orders under this

3 section. Such records shall include, but not be limited to,

4 periodic reports, records, documents, and other data. Such

5 reports may also include, but not be limited to, pertinent

6 technical and financial data relating to the quantity, qual7 ity, composition volume, weight, and assay of all minerals

8 extracted from the mining claim. Upon the request of any

9 officer or employee duly designated by the Secretary or

10 any State conducting an audit or investigation pursuant

11 to this section, the appropriate records, reports, or infor12 mation which may be required by this section shall be

13 made available for inspection and duplication by such offi14 cer or employee or State.

15 (2) Records required by the Secretary under this sec16 tion shall be maintained for 6 years after cessation of all

17 mining activity at the claim concerned unless the Sec18 retary notifies the operator that he or she has initiated

19 an audit or investigation involving such records and that

20 such records must be maintained for a longer period. In

21 any case when an audit or investigation is underway,

22 records shall be maintained until the Secretary releases

23 the operator of the obligation to maintain such records.

24 (d) AUDITS.—The Secretary is authorized to conduct

25 such audits of all claim holders, operators, transporters,
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1 purchasers, processors, or other persons directly or indi2 rectly involved in the production or sales of minerals cov3 ered by this subtitle, as the Secretary deems necessary for

4 the purposes of ensuring compliance with the require5 ments of this section. For purposes of performing such

6 audits, the Secretary shall, at reasonable times and upon

7 request, have access to, and may copy, all books, papers

8 and other documents that relate to compliance with any

9 provision of this section by any person.

10 (e) COOPERATIVE AGREEMENTS.—(1) The Secretary

11 is authorized to enter into cooperative agreements with the

12 Secretary of Agriculture to share information concerning

13 the royalty management of locatable minerals, con14 centrates, or products derived therefrom, to carry out in15 spection, auditing, investigation, or enforcement (not in16 cluding the collection of royalties, civil or criminal pen17 alties, or other payments) activities under this section in

18 cooperation with the Secretary, and to carry out any other

19 activity described in this section.

20 (2) Except as provided in paragraph (4)(A) of this

21 subsection (relating to trade secrets), and pursuant to a

22 cooperative agreement, the Secretary of Agriculture shall,

23 upon request, have access to all royalty accounting infor24 mation in the possession of the Secretary respecting the

25 production, removal, or sale of locatable minerals, con-
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1 centrates, or products derived therefrom from claims on

2 lands open to location under the general mining laws.

3 (3) Trade secrets, proprietary, and other confidential

4 information shall be made available by the Secretary pur5 suant to a cooperative agreement under this subsection to

6 the Secretary of Agriculture upon request only if—

7 (A) the Secretary of Agriculture consents in

8 writing to restrict the dissemination of the informa9 tion to those who are directly involved in an audit

10 or investigation under this section and who have a

11 need to know;

12 (B) the Secretary of Agriculture accepts liabil13 ity for wrongful disclosure; and

14 (C) the Secretary of Agriculture demonstrates

15 that such information is essential to the conduct of

16 an audit or investigation under this subsection.

17 (f) INTEREST AND SUBSTANTIAL UNDERREPORTING

18 ASSESSMENTS.—(1) In the case of mining claims where

19 royalty payments are not received by the Secretary on the

20 date that such payments are due, the Secretary shall

21 charge interest on such under payments at the same inter22 est rate as is applicable under section 6621(a)(2) of the

23 Internal Revenue Code of 1986. In the case of an under24 payment, interest shall be computed and charged only on

25 the amount of the deficiency and not on the total amount.
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1 (2) If there is any underreporting of royalty owed on

2 production from a claim for any production month by any

3 person liable for royalty payments under this section, the

4 Secretary may assess a penalty of 10 percent of the

5 amount of that underreporting.

6 (3) If there is a substantial underreporting of royalty

7 owed on production from a claim for any production

8 month by any person responsible for paying the royalty,

9 the Secretary may assess an additional penalty of 10 per10 cent of the amount of that underreporting.

11 (4) For the purposes of this subsection, the term

12 ‘‘underreporting’’ means the difference between the roy13 alty on the value of the production which should have been

14 reported and the royalty on the value of the production

15 which was reported, if the value which should have been

16 reported is greater than the value which was reported. An

17 underreporting constitutes a ‘‘substantial underreporting’’

18 if such difference exceeds 10 percent of the royalty on the

19 value of production which should have been reported.

20 (5) The Secretary shall not impose the assessment

21 provided in paragraph (2) or (3) of this subsection if the

22 person liable for royalty payments under this section cor23 rects the underreporting before the date such person re24 ceives notice from the Secretary that an underreporting
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1 may have occurred, or before 90 days after the date of

2 the enactment of this section, whichever is later.

3 (6) The Secretary shall waive any portion of an as4 sessment under paragraph (2) or (3) of this subsection

5 attributable to that portion of the underreporting for

6 which the person responsible for paying the royalty dem7 onstrates that—

8 (A) such person had written authorization from

9 the Secretary to report royalty on the value of the

10 production on the basis on which it was reported,

11 (B) such person had substantial authority for

12 reporting royalty on the value of the production on

13 the basis on which it was reported,

14 (C) such person previously had notified the Sec15 retary, in such manner as the Secretary may by rule

16 prescribe, of relevant reasons or facts affecting the

17 royalty treatment of specific production which led to

18 the underreporting, or

19 (D) such person meets any other exception

20 which the Secretary may, by rule, establish.

21 (7) All penalties collected under this subsection shall

22 be deposited in the Treasury.

23 (g) EXPANDED ROYALTY OBLIGATIONS.—Each per24 son liable for royalty payments under this section shall

25 be jointly and severally liable for royalty on all locatable
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1 minerals, concentrates, or products derived therefrom lost

2 or wasted from a mining claim located or converted under

3 this section when such loss or waste is due to negligence

4 on the part of any person or due to the failure to comply

5 with any rule, regulation, or order issued under this sec6 tion.

7 (h) EXCEPTION.—No royalty shall be payable under

8 subsection (a) with respect to minerals processed at a fa9 cility by the same person or entity which extracted the

10 minerals if an urban development action grant has been

11 made under section 119 of the Housing and Community

12 Development Act of 1974 with respect to any portion of

13 such facility.

14 (i) EFFECTIVE DATE.—The royalty under this sec15 tion shall take effect with respect to the production of

16 locatable minerals after the enactment of this title, but

17 any royalty payments attributable to production during

18 the first 12 calendar months after the enactment of this

19 title shall be payable at the expiration of such 12-month

20 period.

21 SEC. 224. SEVERANCE TAX.

22 (a) SEVERANCE TAX ON MINERALS.—Chapter 36 of

23 the Internal Revenue Code of 1986 (relating to certain

24 other excise taxes) is amended by adding at the end the

25 following new subchapter:
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1 ‘‘Subchapter G—Tax on Severance of

2 Locatable Minerals

3 ‘‘SEC. 4500. TAX ON SEVERANCE OF LOCATABLE MINERALS.

4 ‘‘(a) IN GENERAL.—There is hereby imposed a tax

5 on gross income resulting from the severance of any

6 locatable mineral, or mineral concentrates or products,

7 from a mine or other natural deposit located within the

8 United States.

9 ‘‘(b) AMOUNT OF TAX.—The amount of the tax im10 posed by subsection (a) shall be 8 percent of the gross

11 income derived from the locatable mineral, or from the

12 mineral concentrates or products, severed as described in

13 such subsection.

14 ‘‘(c) EXCEPTION IF ROYALTY IMPOSED.—Subsection

15 (a) shall not apply to gross income with respect to which

16 a royalty is imposed by section 203 of the Public Re17 sources Deficit Reduction Act of 1999.’’.

18 (b) CONFORMING AMENDMENT.—The table of sub19 chapters for chapter 36 of such Code (relating to certain

20 other excise taxes) is amended by adding at the end the

21 following new item:

‘‘SUBCHAPTER G. Tax on severance of locatable minerals.’’.

22 SEC. 225. FUND FOR ABANDONED LOCATABLE MINERALS

23 MINE RECLAMATION.

24 (a) ESTABLISHMENT OF FUND.—(1) There is estab25 lished on the books of the Treasury of the United States
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1 a trust fund to be known as the Abandoned Locatable

2 Minerals Mine Reclamation Fund (hereinafter in this sub3 title referred to as the ‘Fund’). The Fund shall be admin4 istered by the Secretary acting through the Director of

5 the Office of Surface Mining Reclamation and Enforce6 ment.

7 (2) The Secretary shall notify the Secretary of the

8 Treasury as to what portion of the Fund is not, in the

9 Secretary’s judgment, required to meet current with10 drawals. The Secretary of the Treasury shall invest such

11 portion of the Fund in public debt securities with matu12 rities suitable for the needs of such Fund and bearing in13 terest at rates determined by the Secretary of the Treas14 ury, taking into consideration current market yields on

15 outstanding marketplace obligations of the United States

16 of comparable maturities. The income on such investments

17 shall be credited to, and form a part of, the Fund.

18 (b) AMOUNTS.—The following amounts shall be cred19 ited to the Fund:

20 (1) All moneys received from royalties under

21 section 223.

22 (2) All taxes collected under section 4500 of the

23 Internal Revenue Code of 1986.
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1 (3) All donations by persons, corporations, as2 sociations, and foundations for the purposes of this

3 section.

4 (c) USE AND OBJECTIVES OF THE FUND.—The Sec5 retary is authorized, subject to appropriations, to use

6 moneys in the Fund for the reclamation and restoration

7 of land and water resources adversely affected by past

8 mineral activities on lands the legal and beneficial title to

9 which resides in the United States, and of land within the

10 exterior boundary of any National Forest System unit.

11 (d) SPECIFIC SITES AND AREAS NOT ELIGIBLE.—

12 The provisions of section 411(d) of the Surface Mining

13 Control and Reclamation Act of 1977 (30 U.S.C.

14 1240a(d)) shall apply to expenditures made from the

15 Fund established under this section.

16 (e) FUND EXPENDITURES.—Moneys available from

17 the Fund may be expended for the purposes specified in

18 subsection (c) directly by the Director of the Office of Sur19 face Mining Reclamation and Enforcement. The Director

20 may also make such money available for such purposes

21 to the Director of the Bureau of Land Management, to

22 the Chief of the United States Forest Service, to the Di23 rector of the National Park Service, to the Director of the

24 United States Fish and Wildlife Service, to any other

25 agency of the United States, to an Indian tribe, or to any
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1 public entity that volunteers to develop and implement,

2 and that has the ability to carry out, all or a significant

3 portion of a reclamation program under this subtitle.

4 (f) AUTHORIZATION OF APPROPRIATIONS.—Amounts

5 credited to the Fund are authorized to be appropriated

6 for the purpose of this section without fiscal year limita7 tion.

8 SEC. 226. LIMITATION ON PATENT ISSUANCE.

9 (a) MINING CLAIMS.—After the date of enactment of

10 this title, no patent shall be issued by the United States

11 for any mining claim located under the general mining

12 laws unless the Secretary determines that, for the claim

13 concerned—

14 (1) a patent application was filed with the Sec15 retary on or before January 27, 1995; and

16 (2) all requirements established under sections

17 2325 and 2326 of the Revised Statutes (30 U.S.C.

18 29 and 30) for vein or lode claims and sections

19 2329, 2330, 2331, and 2333 of the Revised Statutes

20 (30 U.S.C. 35, 36, and 37) for placer claims were

21 fully complied with by that date.

22 If the Secretary makes the determinations referred to in

23 paragraphs (1) and (2) for any mining claim, the holder

24 of the claim shall be entitled to the issuance of a patent

25 in the same manner and degree to which such claim holder
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1 would have been entitled to prior to the enactment of this

2 title, unless and until such determinations are withdrawn

3 or invalidated by the Secretary or by a court of the United

4 States.

5 (b) MILL SITES.—After the date of enactment of this

6 title, no patent shall be issued by the United States for

7 any mill site claim located under the general mining laws

8 unless the Secretary determines that for the mill site

9 concerned—

10 (1) a patent application for such land was filed

11 with the Secretary on or before January 27, 1999;

12 and

13 (2) all requirements applicable to such patent

14 application were fully complied with by that date.

15 If the Secretary makes the determinations referred to in

16 paragraphs (1) and (2) for any mill site claim, the holder

17 of the claim shall be entitled to the issuance of a patent

18 in the same manner and degree to which such claim holder

19 would have been entitled to prior to the enactment of this

20 title, unless and until such determinations are withdrawn

21 or invalidated by the Secretary or by a court of the United

22 States.

23 SEC. 227. PURCHASING POWER ADJUSTMENT.

24 The Secretary shall adjust all dollar amounts estab25 lished in this subtitle for changes in the purchasing power
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1 of the dollar every 10 years following the date of enact2 ment of this title, employing the Consumer Price Index

3 for all-urban consumers published by the Department of

4 Labor as the basis for adjustment, and rounding accord5 ing to the adjustment process of conditions of the Federal

6 Civil Penalties Inflation Adjustment Act of 1990 (104

7 Stat. 890).

8 SEC. 228. SAVINGS CLAUSE.

9 Nothing in this title shall be construed as repealing

10 or modifying any Federal law, regulation, order, or land

11 use plan, in effect prior to the effective date of this title,

12 that prohibits or restricts the application of the general

13 mining laws, including such laws that provide for special

14 management criteria for operations under the general

15 mining laws as in effect prior to the effective date of this

16 title, to the extent such laws provide environmental protec17 tion greater than required under this subtitle.

18 SEC. 229. EFFECTIVE DATE.

19 Except as otherwise provided in section 226 (relating

20 to limitation on patent issuance), this subtitle shall take

21 effect on the date 1 year after the date of enactment of

22 this title.
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1 Subtitle C—Use or Disposal of

2 Federal Natural Resources

3 SEC. 231. ANNUAL DOMESTIC LIVESTOCK GRAZING FEE.

4 The Federal Land Policy and Management Act of

5 1976 is amended by inserting after section 401 (43 U.S.C.

6 1751) the following new section:

7 ‘‘SEC. 401A. ESTABLISHMENT OF FAIR MARKET VALUE

8 GRAZING FEES.

9 ‘‘(a) ESTABLISHMENT OF ANNUAL DOMESTIC LIVE10 STOCK GRAZING FEE.—(1) Notwithstanding any other

11 provision of law, the Secretary of Agriculture, with respect

12 to National Forest System lands in the 16 contiguous

13 Western States (except National Grasslands) administered

14 by the Forest Service where domestic livestock grazing is

15 permitted under applicable law, shall establish an annual

16 domestic livestock grazing fee equal to fair market value.

17 ‘‘(2) Notwithstanding any other provision of law, the

18 Secretary of the Interior, with respect to public domain

19 lands administered by the Bureau of Land Management

20 where domestic livestock grazing is permitted under appli21 cable law, shall establish an annual domestic livestock

22 grazing fee equal to fair market value.

23 ‘‘(b) CALCULATION OF FAIR MARKET VALUE.—(1)

24 For purposes of determining the annual domestic livestock

25 grazing fee under this section, the Secretary concerned
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1 shall calculate fair market value using the following for2 mula:

Fair Market Value=

Appraised Base Value×Forage Value Index

100

3 ‘‘(2) For purposes of the formula in paragraph (1):

4 ‘‘(A) The term ‘Forage Value Index’ means the

5 Forage Value Index (FVI) computed annually by the

6 Economic Research Service, United States Depart7 ment of Agriculture, and set with the 1999 FVI

8 equal to 100; and

9 ‘‘(B) The term ‘Appraised Base Value’ means

10 the 1983 Appraisal Value conclusions for mature

11 cattle and horses (expressed in dollars per head or

12 per month), as determined in the 1986 report pre13 pared jointly by the Secretary of Agriculture and the

14 Secretary of the Interior entitled ‘Grazing Fee Re15 view and Evaluation’, dated February 1986, on a

16 west-wide basis using the lowest appraised value of

17 the pricing areas adjusted for advanced payment

18 and indexed to 1999.

19 ‘‘(c) LIMITATION ON FLUCTUATIONS OF FEES.—

20 Notwithstanding the amount calculated under subsection

21 (b) for a year, the domestic livestock grazing fee charged

22 for any given year shall not increase nor decrease by more
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1 than 33.3 percent from the domestic livestock grazing fee

2 for the previous year.

3 ‘‘(d) EFFECT ON EXECUTIVE ORDER.—Executive

4 Order No. 12548, dated February 14, 1986 (51 Fed. Reg.

5 5985), shall not apply to grazing fees established pursuant

6 to this section.

7 ‘‘(e) EFFECT ON GRAZING ADVISORY BOARDS.—The

8 grazing advisory boards established pursuant to Secre9 tarial action, notice of which was published in the Federal

10 Register on May 14, 1986 (51 Fed. Reg. 17874), are abol11 ished, effective as of the date of the enactment of this sec12 tion, and the advisory functions exercised by such boards

13 shall be exercised only by the appropriate councils estab14 lished under section 309 of this Act.

15 ‘‘(f) USE OF FEES AND RANGE IMPROVEMENT

16 FUNDS.—Funds appropriated pursuant to section 5 of the

17 Public Rangelands Improvement Act of 1978 (43 U.S.C.

18 1904) or any other provision of law related to disposition

19 of the Federal share of receipts from fees for grazing on

20 public domain lands or National Forest lands in the 16

21 contiguous western States shall be used for restoration

22 and enhancement of fish and wildlife habitat, for restora23 tion and improved management of riparian areas, and for

24 implementation and enforcement of applicable land man25 agement plans, allotment plans, and regulations regarding
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1 the use of such lands for domestic livestock grazing. Such

2 funds shall be distributed as the Secretary concerned con3 siders advisable after consultation and coordination with

4 the advisory councils established pursuant to section 309

5 of this Act and other interested parties.

6 ‘‘(g) COMMENCEMENT DATE FOR FEES.—The first

7 annual domestic livestock grazing fee required by this sec8 tion shall apply with respect to the grazing season com9 mencing on March 1, 2000.’’.

10 SEC. 232. ELIMINATION OF BELOW-COST SALES OF TIMBER

11 FROM NATIONAL FOREST SYSTEM LANDS.

12 (a) IN GENERAL.—The National Forest Management

13 Act of 1976 is amended by inserting after section 14 (16

14 U.S.C. 472a) the following new section:

15 ‘‘SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES

16 FROM NATIONAL FOREST SYSTEM LANDS.

17 ‘‘(a) REQUIREMENT THAT SALE REVENUES EXCEED

18 COSTS.—On and after October 1, 2003, in appraising tim19 ber and setting a minimum bid for trees, portions of trees,

20 or forest products located on National Forest System

21 lands proposed for sale under section 14 or any other pro22 vision of law, the Secretary of Agriculture shall ensure

23 that the estimated cash returns to the United States

24 Treasury from each sale exceed the estimated costs to be
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1 incurred by the Federal Government in the preparation

2 of the sale or as a result of the sale.

3 ‘‘(b) COSTS TO BE CONSIDERED.—For purposes of

4 estimating under this section the costs to be incurred by

5 the Federal Government from each timber sale, the Sec6 retary shall assign to the sale the following costs:

7 ‘‘(1) The actual appropriated expenses for sale

8 preparation and harvest administration incurred or

9 to be incurred by the Federal Government from the

10 sale and the payments to counties to be made as a

11 result of the sale.

12 ‘‘(2) A portion of the annual timber resource

13 planning costs, silvicultural examination costs, other

14 resource support costs, road design and construction

15 costs, road maintenance costs, transportation plan16 ning costs, appropriated reforestation costs, timber

17 stand improvement costs, forest genetics costs, gen18 eral administrative costs (including administrative

19 costs of the national and regional offices of the For20 est Service), and facilities construction costs of the

21 Federal Government directly or indirectly related to

22 the timber harvest program conducted on National

23 Forest System lands.

24 ‘‘(c) METHOD OF ALLOCATING COSTS.—The Sec25 retary shall allocate the costs referred to in subsection
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1 (b)(2) to each unit of the National Forest System, and

2 each proposed timber sale in such unit, on the basis of

3 harvest volume.

4 ‘‘(d) TRANSITIONAL REQUIREMENTS.—To ensure the

5 elimination of all below-cost timber sales by the date speci6 fied in subsection (a), the Secretary shall progressively re7 duce the number and size of below-cost timber sales on

8 National Forest System lands as follows:

9 ‘‘(1) In fiscal years 2000 and 2001, the quan10 tity of timber sold in below-cost timber sales on Na11 tional Forest System lands shall not exceed 75 per12 cent of the quantity of timber sold in such sales in

13 the preceding fiscal year.

14 ‘‘(2) In fiscal year 2002, the quantity of timber

15 sold in below-cost timber sales on National Forest

16 System lands shall not exceed 65 percent of the

17 quantity of timber sold in such sales in fiscal year

18 2000.

19 ‘‘(3) In fiscal year 2003, the quantity of timber

20 sold in below-cost timber sales on National Forest

21 System lands shall not exceed 50 percent of the

22 quantity of timber sold in such sales in the fiscal

23 year 2002.

24 ‘‘(e) BELOW-COST TIMBER SALE.—For purposes of

25 this section, the term ‘below-cost timber sale’ means a sale
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1 of timber in which the costs to be incurred by the Federal

2 Government exceed the cash returns to the United States

3 Treasury.’’.

4 (b) FINDINGS.—Section 2 of the Forest and Range5 land Renewable Resources Planning Act of 1974 (16

6 U.S.C. 1600) is amended—

7 (1) by striking ‘‘and’’ at the end of paragraph

8 (6);

9 (2) by striking the period at the end of para10 graph (7) and inserting ‘‘; and’’; and

11 (3) by adding at the end the following new

12 paragraph:

13 ‘‘(8) the practice of selling timber from Na14 tional Forest System lands for less than the cost to

15 the Federal Government of growing the timber and

16 preparing the timber for sale is not in the best inter17 ests of the United States, and such below-cost sales

18 should be eliminated in an orderly manner to achieve

19 a more economically and environmentally sound tim20 ber program for the National Forest System.’’.

21 SEC. 233. TIMBERLAND SUITABILITY.

22 Subsection (k) of section 6 of the Forest and Range23 land Renewable Resources Planning Act of 1974 (16

24 U.S.C. 1604) is amended to read as follows:
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1 ‘‘(k) DETERMINATION OF SUITABILITY OF LANDS

2 FOR TIMBER PRODUCTION.—

3 ‘‘(1) DETERMINATION REQUIRED.—In revising

4 land management plans developed pursuant to this

5 section, the Secretary shall identify lands within the

6 management area that are not suited for timber pro7 duction based on physical, economic, or other rel8 evant factors. The Secretary shall review the identi9 fications made under this paragraph during each re10 vision of the forest plan.

11 ‘‘(2) EVIDENCE OF ECONOMIC

12 UNSUITABILITY.—The Secretary shall identify lands

13 as economically unsuitable for timber production

14 under paragraph (1) if—

15 ‘‘(A) the expected cash returns to the

16 United States Treasury that would result from

17 the sale of standing timber on the lands do not

18 exceed the expected costs that would be in19 curred by the Federal Government in prepara20 tion or as a result of such sales; or

21 ‘‘(B) the expected cash returns to the

22 United States Treasury that would result from

23 the sale of subsequent timber stands on the

24 lands do not exceed the expected costs that
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1 would be incurred by the Federal Government

2 in preparation or as a result of such sales.

3 ‘‘(3) COSTS TO BE CONSIDERED.—For purposes

4 of estimating under paragraph (2) the costs to be in5 curred by the Federal Government from timber sales

6 conducted on the lands being reviewed, the Secretary

7 shall assign to sales on such lands the following

8 costs:

9 ‘‘(A) The appropriated expenses for sale

10 preparation and harvest administration that

11 would be incurred by the Federal Government

12 from such sales and the payments to counties

13 that would be made as a result of such sales.

14 ‘‘(B) A portion of the annual timber re15 source planning costs, silvicultural examination

16 costs, other resource support costs, road design

17 and construction costs, road maintenance costs,

18 transportation planning costs, appropriated re19 forestation costs, timber stand improvement

20 costs, forest genetics costs, general administra21 tive costs (including administrative costs of the

22 national and regional offices of the Forest Serv23 ice), and facilities construction costs of the Fed24 eral Government directly or indirectly related to
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1 the timber harvest program conducted on Na2 tional Forest System lands.

3 ‘‘(4) METHOD OF ALLOCATING COSTS.—The

4 Secretary shall allocate the costs referred to in para5 graph (3)(B) to each unit of the National Forest

6 System on the basis of harvest volume.

7 ‘‘(5) PROHIBITION ON TIMBER HARVESTS ON

8 UNSUITABLE LANDS.—In the case of lands identified

9 under paragraph (1) as unsuitable for timber pro10 duction, no timber harvesting shall occur on such

11 lands for a period of 10 years or the life of the plan,

12 whichever is greater.

13 ‘‘(6) DEFINITIONS.—For purposes of this sub14 section:

15 ‘‘(A) The term ‘standing timber’ means an

16 existing stand of timber that has not been har17 vested.

18 ‘‘(B) The term ‘subsequent timber stand’

19 means a regenerated stand of timber produced

20 on land from which standing timber has been

21 harvested.’’.
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1 SEC. 234. REDUCTION IN MAXIMUM AMOUNT OF PAYMENTS

2 UNDER AGRICULTURAL ASSISTANCE PRO3 GRAMS TO REFLECT RECEIPT OF FEDERAL

4 IRRIGATION WATER.

5 (a) PRICE SUPPORT PROGRAMS.—Title X of the

6 Food Security Act of 1985 is amended—

7 (1) by redesignating sections 1001D (7 U.S.C.

8 1308–4) and 1001E (7 U.S.C. 1308–5) as sections

9 1001E and 1001F, respectively; and

10 (2) by inserting after section 1001C (7 U.S.C.

11 1308–3) the following new section:

12 ‘‘SEC. 1001D. REDUCTION OF PAYMENT LIMITATIONS TO

13 REFLECT RECEIPT OF FEDERAL IRRIGATION

14 WATER.

15 ‘‘(a) REDUCTION OF PAYMENT LIMITATIONS RE16 QUIRED.—If a person subject to section 1001 receives

17 Federal irrigation water for agricultural purposes from the

18 operation of a Federal reclamation project, the payment

19 limitations specified in paragraphs (1) and (2) of such sec20 tion and applicable to such person shall be reduced for

21 the year in which such person receives irrigation water.

22 The amount of the reduction shall be equal to the total

23 value during that year of the subsidy portion of the con24 tract with such person for the delivery of the irrigation

25 water.
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1 ‘‘(b) DETERMINATION OF SUBSIDY PORTION OF

2 WATER CONTRACT.—The subsidy portion of an irrigation

3 water delivery contract is equal to the amount by which

4 full cost for the delivery of the irrigation water exceeds

5 the actual contract price for the delivery of the water.

6 ‘‘(c) DEFINITIONS.—For purposes of this section, the

7 terms ‘contract’, ‘full cost’, ‘irrigation water’, and ‘project’

8 have the meanings given such terms in section 202 of the

9 Reclamation Reform Act of 1982 (43 U.S.C. 390bb).’’.

10 (b) NONINSURED CROP DISASTER ASSISTANCE.—

11 Section 196(i) of the Federal Agriculture Improvement

12 and Reform Act of 1996 (7 U.S.C. 7333(i)) is amended—

13 (1) by redesignating paragraph (5) as para14 graph (6); and

15 (2) by inserting after paragraph (4) the fol16 lowing new paragraph:

17 ‘‘(5) EFFECT OF RECEIPT OF IRRIGATION

18 WATER.—

19 ‘‘(A) REDUCTION OF PAYMENT LIMITA20 TION.—If a person who receives payments

21 under this section also receives, during the

22 same year, Federal irrigation water for agricul23 tural purposes from the operation of a Federal

24 reclamation project, the payment limitation

25 specified in paragraph (2) for such person shall
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1 be reduced for that year. The amount of the

2 reduction shall be equal to the total value dur3 ing that year of the subsidy portion of the con4 tract with such person for the delivery of the

5 irrigation water.

6 ‘‘(B) DETERMINATION OF SUBSIDY POR7 TION OF WATER CONTRACT.—The subsidy por8 tion of an irrigation water delivery contract is

9 equal to the amount by which full cost for the

10 delivery of the irrigation water exceeds the ac11 tual contract price for the delivery of the water.

12 ‘‘(C) DEFINITIONS.—For purposes of this

13 paragraph, the terms ‘contract’, ‘full cost’, ‘irri14 gation water’, and ‘project’ have the meanings

15 given such terms in section 202 of the Reclama16 tion Reform Act of 1982 (43 U.S.C. 390bb).’’.

17 (c) CONFORMING AMENDMENTS.—Section

18 1001(5)(A) of the Food Security Act of 1985 (7 U.S.C.

19 1308(5)(A)) is amended by striking ‘‘through 1001C’’ and

20 inserting ‘‘through 1001D’’.

21 SEC. 235. ELIMINATION OF OFF BUDGET EXPENDITURES.

22 (a) KNUTSON-VANDENBERG FUND.—Section 3 of

23 the Act of June 9, 1930 (commonly known as the

24 Knutson-Vandenberg Act; 16 U.S.C. 576b), is amended

25 by striking ‘‘and shall constitute a special fund, which is
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1 hereby appropriated and made available until expended,’’

2 in the second sentence and inserting ‘‘and are authorized

3 to be appropriated’’.

4 (b) DEPOSITS FROM BRUSH DISPOSAL.—The para5 graph relating to deposits from brush disposal under the

6 heading ‘‘FOREST SERVICE’’ in the Act of August 11, 1916

7 (39 Stat. 462; 16 U.S.C. 490), is amended by striking

8 ‘‘and constitute a special fund, which is hereby appro9 priated and shall remain available until expended’’ and in10 serting ‘‘and are authorized to be appropriated for the

11 purpose of disposing of such brush and other debris’’.

12 (c) NATIONAL FORESTS ROADS AND TRAILS.—(1)

13 Section 6 of Public Law 88–657 (commonly known as the

14 Forest Roads and Trails Act; 16 U.S.C. 537) is amended

15 by striking ‘‘are hereby made available until expended’’

16 and inserting ‘‘are authorized to be appropriated’’.

17 (2) The fourteenth paragraph under the heading

18 ‘‘FOREST SERVICE’’ of the Act of March 4, 1913 (37

19 Stat. 843; 16 U.S.C. 501), is amended by striking ‘‘shall

20 be available at the end thereof, to be expended by’’ and

21 inserting ‘‘are authorized to be appropriated to’’.

22 (d) REFORESTATION TRUST FUND.—Section 303(d)

23 of Public Law 96–451 (16 U.S.C. 1606a) is amended by

24 striking ‘‘The Secretary of Agriculture’’ and inserting ‘‘In
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1 such amounts as are provided in advance in appropriations

2 Acts, the Secretary of Agriculture’’.

3 (e) TIMBER SALVAGE SALE FUND.—Section 14(h) of

4 the National Forest Management Act of 1976 (16 U.S.C.

5 472a(h) is amended by striking ‘‘are to be available’’ and

6 inserting ‘‘are authorized to be appropriated’’.

7 (f) COOPERATIVE WORK–OTHER FUND.—The penul8 timate paragraph under the heading ‘‘FOREST SERV9 ICE’’ in the Act of June 30, 1914 (38 Stat. 430; 16

10 U.S.C. 498), is amended by striking ‘‘which is hereby ap11 propriated and made available until expended, as the Sec12 retary of Agriculture may direct,’’ and inserting ‘‘from

13 which funds are authorized to be appropriated to the Sec14 retary of Agriculture’’.

15 SEC. 236. DEPOSIT OF TAYLOR GRAZING ACT RECEIPTS IN

16 TREASURY.

17 Section 10 of the Act of June 28, 1934 (commonly

18 known as the Taylor Grazing Act; 43 U.S.C. 315i), is

19 amended by striking all after ‘‘miscellaneous receipts’’ and

20 inserting a period.

21 SEC. 237. REPEAL OF LIVESTOCK FEED ASSISTANCE PRO22 GRAM.

23 The Emergency Livestock Feed Assistance Act of

24 1988 (title VI of the Agricultural Act of 1949; 7 U.S.C.

25 1471–1471j) is repealed.
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1 SEC. 238. OIL AND GAS RENTALS.

2 The Mineral Leasing Act (30 U.S.C. 181 et seq.) is

3 amended as follows:

4 (1) In section 14 by striking ‘‘a rental of $1 per

5 acre’’ and inserting ‘‘a rental established by the Sec6 retary of the Interior’’ and by adding the following

7 at the end thereof: ‘‘The Secretary shall establish

8 fair market value rental fees under this section

9 based upon the rental fees which would be charged

10 in arm’s length transactions for comparable leases of

11 oil and gas resources on non-Federal land.’’.

12 (2) In section 17(d) by striking ‘‘rental of not

13 less than $1.50 per acre per year for the first

14 through fifth years of the lease and not less than $2

15 per acre per year for each year thereafter’’ and in16 serting ‘‘rental established by the Secretary of the

17 Interior’’ and by adding the following at the end

18 thereof: ‘‘The Secretary shall establish fair market

19 value rental fees under this section based upon the

20 rental fees which would be charged in arms length

21 transactions for comparable leases of oil and gas re22 sources on non-Federal land.’’.

23 (3) In section 21(a) by striking ‘‘rental, payable

24 at the beginning of each year, at the rate of 50 cents

25 per acre per annum, for the lands included in the

26 lease,’’ and inserting ‘‘rental established by the Sec-
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1 retary of the Interior’’ and by adding the following

2 at the end thereof: ‘‘The Secretary shall establish

3 fair market value rental fees under this section

4 based upon the rental fees which would be charged

5 in arms length transactions for comparable leases on

6 non-Federal land.’’.

7 (4) In section 31(e)(2) by striking ‘‘rate of not

8 less than $10 per acre per year, or the inclusion in

9 a reinstated lease issued pursuant to the provisions

10 of section 17(c) of this Act of a requirement that fu11 ture rentals shall be at a rate not less than $5 per

12 acre per year’’ and inserting ‘‘fair market value rate

13 (but not less than $10 per acre per year)’’.

14 (5) In section 31(f)(3) by striking ‘‘of not less

15 than $5 per acre per year’’ and inserting ‘‘estab16 lished by the Secretary at fair market value based

17 upon the rental fees which would be charged in arms

18 length transactions for comparable leases on non19 Federal land’’.

20 SEC. 239. COMMUNICATION PERMITS.

21 (a) IN GENERAL.—No permit, lease, or authorization

22 for the use of any area of the public lands or National

23 Forests for communication uses, including but not limited

24 to radio and television broadcast, mobile radio, cellular

25 telephone, or microwave relay facilities, shall remain in
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1 force and effect after October 1, 1999, unless, by such

2 date, and by October 1 of each year thereafter, the holder

3 of such permit, lease, or authorization pays to the Sec4 retary of the Interior or the Secretary of Agriculture, as

5 appropriate, an amount equal to the fair market value,

6 as determined by such Secretary, of the right to use and

7 occupy such area for such communication uses.

8 (b) DEFINITION.—For the purposes of this section,

9 the term ‘‘public lands’’ shall have the same meaning as

10 defined in section 103(e) of the Federal Land Policy Man11 agement Act of 1976 (43 U.S.C. 1702(e)).

Æ