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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2203 Introduced in House (IH)]

106th CONGRESS
  1st Session
                                H. R. 2203

                    To eliminate corporate welfare.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 15, 1999

 Mr. Andrews introduced the following bill; which was referred to the 
   Committee on Ways and Means, and in addition to the Committees on 
 Resources, Agriculture, Commerce, Transportation and Infrastructure, 
   and the Budget, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
                    To eliminate corporate welfare.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Corporate Welfare 
Elimination Act of 1999''.
    (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.
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.
Sec. 244. Reduction in maximum amount of payments under agricultural 
                            assistance programs to reflect receipt of 
                            Federal irrigation water.
Sec. 245. Elimination of off budget expenditures.
Sec. 246. Deposit of Taylor Grazing Act receipts in Treasury.
Sec. 247. Repeal of livestock feed assistance program.
Sec. 248. Oil and gas rentals.
Sec. 249. Communication permits.

                          TITLE I--TAX REFORM

SEC. 101. SHORT TITLE; REFERENCES TO INTERNAL REVENUE CODE OF 1986.

    (a) Short Title.--This title may be cited as the ``Termination of 
Energy and Natural Resource Tax Subsidies Act of 1999''.
    (b) References to Internal Revenue Code of 1986.--Except as 
otherwise expressly provided, whenever in this title an amendment or 
repeal is expressed in terms of an amendment to, or repeal of, a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of the Internal Revenue Code of 
1986.

SEC. 102. REPEAL OF EXPENSING OF INTANGIBLE DRILLING AND DEVELOPMENT 
              COSTS AND OF MINING EXPLORATION AND DEVELOPMENT COSTS.

    (a) Intangible Drilling and Development Costs.--Section 263(c) is 
hereby repealed.
    (b) Development Expenditures.--Section 616 (relating to development 
expenditures) is hereby repealed.
    (c) Exploration Expenditures.--Subsection (i) of section 617 is 
amended to read as follows:
    ``(i) Termination.--No deduction shall be allowed under this 
section for any expenditure paid or incurred in a taxable year 
beginning after the date of the enactment of this subsection.''
    (d) Conforming Amendments.--
            (1) Paragraph (2) of section 56(a) is hereby repealed.
            (2) Subsection (a) of section 57 is amended by striking 
        paragraph (2).
            (3) Paragraph (2) of section 59(e) is amended by adding 
        ``and'' at the end of subparagraph (A), by striking the comma 
        at the end of subparagraph (B) and inserting a period, and by 
        striking subparagraphs (C), (D), and (E).
            (4) Subparagraph (A) of section 59(e)(5) is amended by 
        inserting before the period ``, as in effect before the 
        Termination of Energy and Natural Resource Tax Subsidies Act of 
        1999''.
            (5) Subsection (c) of section 193 is amended to read as 
        follows:
    ``(c) Application With Other Deductions.--No deduction shall be 
allowed under subsection (a) with respect to any expenditure with 
respect to which a deduction is allowed or allowable to the taxpayer 
under any other provision of this chapter.''
            (6) Paragraph (1) of section 263(a) is amended by striking 
        subparagraph (A) and by redesignating the succeeding 
        subparagraphs accordingly.
            (7) Section 263 is amended by striking subsection (i).
            (8) Subsection (c) of section 263A is amended by striking 
        paragraph (3) and by redesignating the succeeding paragraphs 
        accordingly.
            (9) Paragraph (5) of section 263A(c), as redesignated by 
        paragraph (8), is amended by striking ``subparagraphs (B), (C), 
        (D), and (E)'' and inserting ``subparagraph (B)''.
            (10) Section 291 is amended by striking subsection (b).
            (11) Subsection (n) of section 312 is amended by striking 
        paragraph (2).
            (12) Paragraph (1) of section 1254(a) is amended--
                    (A) by inserting ``(as in effect before the 
                Termination of Energy and Natural Resource Tax 
                Subsidies Act of 1999)'' after ``617'' in subparagraph 
                (A)(i), and
                    (B) by adding at the end the following: ``For 
                purposes of clause (i), any deduction under section 
                291(b)(2) (as in effect before the Termination of 
                Energy and Natural Resource Tax Subsidies Act of 1999) 
                shall be treated as a deduction allowable under section 
                263, 616, or 617 (whichever is appropriate).''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date of the enactment of this Act.

SEC. 103. TERMINATION OF CREDIT FOR PRODUCING FUEL FROM NONCONVENTIONAL 
              SOURCE.

    Section 29 is amended by adding at the end the following new 
subsection:
    ``(h) Termination.--Notwithstanding any other provision of this 
section, no credit shall be allowed under this section with respect to 
any qualified fuels produced by a facility placed in service after 
December 31, 1999.''

SEC. 104. REPEAL OF PERCENTAGE DEPLETION.

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

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

    (a) Repeal of Alcohol Fuels Credit.--
            (1) In general.--Section 40 (relating to alcohol used as 
        fuel) is hereby repealed.
            (2) Conforming amendments.--
                    (A) Subsection (b) of section 38 is amended by 
                striking paragraph (3) and by redesignating the 
                following paragraphs accordingly.
                    (B) Section 87 is hereby repealed.
                    (C) Subsection (c) of section 196 is amended by 
                striking paragraph (3) and by redesignating the 
                following paragraphs accordingly.
                    (D) Subsection (m) of section 6501 is amended by 
                striking ``40(f)''.
                    (E) The table of sections for subpart D of part IV 
                of subchapter A of chapter 1 is amended by striking the 
                item relating to section 40.
                    (F) The table of sections for part II of subchapter 
                B of chapter 1 is amended by striking the item relating 
                to section 87.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (b) Repeal of Reduced Fuel Tax Rates.--
            (1) Gasoline and diesel fuel.--Section 4081 is amended by 
        striking subsection (c) and by redesignating subsections (d) 
        and (e) as subsections (c) and (d), respectively.
            (2) Aviation fuel.--Section 4091 is amended by striking 
        subsection (c).
            (3) Special motor fuels.--
                    (A) Section 4041 is amended by striking subsections 
                (k) and (m).
                    (B) Subsection (b) of section 4041 is amended by 
                striking paragraph (2).
            (4) Conforming amendments.--
                    (A) Section 6427 is amended by striking subsection 
                (f).
                    (B) Subsection (i) of section 6427 is amended by 
                striking paragraph (3) and by redesignating paragraph 
                (4) as paragraph (3).
                    (C) Paragraph (3) of section 6427(i), as 
                redesignated by subparagraph (B), is amended by 
                striking the last sentence of subparagraph (A) and 
                inserting the following new flush sentence:
                ``Notwithstanding subsection (l)(1), if the Secretary 
                has not paid pursuant to a claim filed under the 
                preceding sentence within 20 days of the date of the 
                filing of such claim, the claim shall be paid with 
                interest from such date determined by using the 
                overpayment rate and method under section 6621.''
                    (D) Section 9502 is amended by striking subsection 
                (e).
                    (E) Subsection (b) of section 9503 is amended by 
                striking paragraph (5).
            (5) Effective date.--The amendments made by this subsection 
        shall take effect on the date of the enactment of this Act.

SEC. 106. REPEAL OF ENHANCED OIL RECOVERY CREDIT.

    (a) In General.--Section 43 is hereby repealed.
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 38 is amended by striking 
        paragraph (5), as redesignated by section 105, and by 
        redesignating the succeeding paragraphs accordingly.
            (2) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 is amended by striking the item 
        relating to section 43.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 107. REPEAL OF CREDIT AND DEDUCTION FOR ELECTRIC VEHICLES, CLEAN-
              FUEL VEHICLES, AND CERTAIN REFUELING PROPERTY.

    (a) Repeal of Credit for Qualified Electric Vehicles.--Section 30 
is hereby repealed.
    (b) Repeal of Deduction for Clean-Fuel Vehicles and Certain 
Refueling Property.--Section 179A is hereby repealed.
    (c) Conforming Amendments.--
            (1) Paragraph (24) of section 1016(a) is amended by 
        inserting ``(as in effect on the day before the date of the 
        enactment of the Corporate Welfare Elimination Act of 1999)'' 
        after ``section 179A(e)(6)(A)''.
            (2) Paragraph (25) of section 1016(a) is amended by 
        inserting ``(as in effect on the day before the date of the 
        enactment of the Corporate Welfare Elimination Act of 1999)'' 
        after ``section 30(d)(1)''.
            (3) The table of sections for subpart B of part IV of 
        subchapter A of chapter 1 is amended by striking the item 
        relating to section 30.
            (4) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        179A.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 108. REPEAL OF DEDUCTION FOR TERTIARY INJECTANTS.

    (a) In General.--Section 193 (relating to tertiary injectants) is 
hereby repealed.
    (b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 is amended by striking the item relating to 
section 193.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 109. REPEAL OF REHABILITATION CREDIT FOR NONHISTORIC STRUCTURES; 
              REDUCTION OF REHABILITATION CREDIT FOR CERTIFIED HISTORIC 
              STRUCTURES.

    (a) In General.--Subsection (a) of section 47 is amended to read as 
follows:
    ``(a) General Rule.--For purposes of section 46, the rehabilitation 
credit for any taxable year is 15 percent of the qualified 
rehabilitation expenditures with respect to any certified historic 
structure.''
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 47(c)(1) is amended by 
        adding ``and'' at the end of clause (ii), by striking clause 
        (iii) and by redesignating clause (iv) as clause (iii).
            (2) Paragraph (1) of section 47(c) is amended by striking 
        subparagraph (B) and by redesignating subparagraphs (C) and (D) 
        as subparagraphs (B) and (C), respectively.
    (c) Effective Date.--The amendments made by this section shall 
apply to property placed in service after December 31, 1999.

SEC. 110. REPEAL OF TREATMENT OF BLUE CROSS AND BLUE SHIELD 
              ORGANIZATIONS, ETC.

    (a) In General.--Section 833 (relating to treatment of Blue Cross 
and Blue Shield organizations, etc.) is hereby repealed.
    (b) Clerical Amendment.--The table of sections for part II of 
subchapter L of chapter 1 is amended by striking the item relating to 
section 833.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 111. REPEAL OF SMALL LIFE INSURANCE COMPANY DEDUCTION.

    (a) In General.--Section 806 is hereby repealed.
    (b) Conforming Amendments.--
            (1) The text of section 804 is amended to read as follows:
    ``For purposes of this part, the term `life insurance deductions' 
means the general deductions provided in section 805.''
            (2) Subparagraph (A) of section 815(c)(2) is amended by 
        adding ``and'' at the end of clause (i), by striking clause 
        (ii), and by redesignating clause (iii) as clause (ii).
            (3) Subparagraph (B) of section 453B(e)(2) is amended by 
        striking ``(as defined in section 806(b)(3))''.
            (4) Subsection (e) of section 453B is amended by adding at 
        the end the following new paragraph:
            ``(3) Noninsurance business.--For purposes of paragraph 
        (2)--
                    ``(A) In general.--The term `noninsurance business' 
                means any activity which is not an insurance business.
                    ``(B) Certain activities treated as insurance 
                businesses.--For purposes of subparagraph (A), any 
                activity which is not an insurance business shall be 
                treated as an insurance business if--
                            ``(i) it is of a type traditionally carried 
                        on by life insurance companies for investment 
                        purposes, but only if the carrying on of such 
                        activity (other than in the case of real 
                        estate) does not constitute the active conduct 
                        of a trade or business, or
                            ``(ii) it involves the performance of 
                        administrative services in connection with 
                        plans providing life insurance, pension, or 
                        accident and health benefits.''
            (5) Subclause (II) of section 465(c)(7)(D)(v) is amended by 
        striking ``(within the meaning of section 806(b)(3))'' and 
        inserting ``(within the meaning of section 453B(e)(3))''.
            (6) The table of sections for subpart C of part I of 
        subchapter L of chapter 1 is amended by striking the item 
        relating to section 806.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 112. REPEAL OF ALTERNATIVE TAX ON SMALL PROPERTY AND CASUALTY 
              INSURANCE COMPANIES.

    (a) In General.--Section 831 (relating to tax on insurance 
companies other than life insurance companies) is amended by striking 
subsection (b) and by redesignating subsection (c) as subsection (b).
    (b) Conforming Amendments.--
            (1) Subparagraph (C) of section 501(c)(15) is amended to 
        read as follows:
                    ``(C) For purposes of subparagraph (B), the term 
                `controlled group' means any controlled group of 
                corporations (as defined in section 1563(a)); except 
                that--
                            ``(i) `more than 50 percent' shall be 
                        substituted for `at least 80 percent' each 
                        place it appears in section 1563(a), and
                            ``(ii) subsections (a)(4) and (b)(2)(D) of 
                        section 1563 shall not apply.''
            (2) Sections 832(b)(7)(D)(ii) and 834(a) are each amended 
        by inserting ``(as in effect on the day before the date of the 
        enactment of the Corporate Welfare Elimination Act of 1999)'' 
        after ``831(b)''.
            (3) Sections 904(b)(3)(D) and 1201(a) are each amended by 
        striking ``831(a) or (b)'' and inserting ``831(a)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 113. CASH ACCOUNTING AND EXPENSING FOR AGRICULTURE.

    (a) Repeal of Provisions Permitting Farming Businesses To Use Cash 
Method of Accounting.--
            (1) Section 447 is amended by striking subsections (g), 
        (h), and (i).
            (2) Subsection (b) of section 448 is amended by striking 
        paragraph (1).
    (b) Repeal of Deduction for Soil and Water Conservation 
Expenditures.--
            (1) In general.--Section 175 (relating to soil and water 
        conservation expenditures) is hereby repealed.
            (2) Clerical amendment.--The table of sections for part VI 
        of subchapter B of chapter 1 is amended by striking the item 
        relating to section 175.
    (c) Repeal of Deduction for Expenditures By Farmers for Fertilizer, 
Etc.--
            (1) In general.--Section 180 (relating to expenditures by 
        farmers for fertilizer, etc) is hereby repealed.
            (2) Clerical amendment.--The table of sections for part VI 
        of subchapter B of chapter 1 is amended by striking the item 
        relating to section 180.
    (d) Repeal of Certain Exceptions Permitting Certain Farm Business 
To Use Cash Method of Accounting.--Section 447 (relating to method of 
accounting for corporations engaged in farming) is amended by striking 
subsections (d)(2), (e), (g), (h), and (i).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 114. REPEAL OF EXCLUSION FOR CANCELLATION OF QUALIFIED FARM 
              INDEBTEDNESS.

    (a) In General.--Paragraph (1) of section 108(a) is amended by 
inserting ``or'' at the end of subparagraph (B), by striking 
subparagraph (C), and by redesignating subparagraph (D) as subparagraph 
(C).
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 115. REPEAL OF EXCLUSION FOR CERTAIN COST-SHARING PAYMENTS.

    (a) In General.--Section 126 (relating to certain cost-sharing 
payments) is hereby repealed.
    (b) Clerical Amendment.--The table of sections for part III of 
subchapter B of chapter 1 is amended by striking the item relating to 
section 126.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

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

    (a) In General.--Paragraph (5) of section 263A(c) (relating to 
general exceptions) is amended by striking ``This section shall not 
apply to'' and inserting ``This section shall not apply to \2/3\ of the 
costs described in subsection (a)(2) with respect to''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 117. REPEAL OF REFORESTATION CREDIT.

    (a) In General.--Subsection (b) of section 48 is hereby repealed.
    (b) Conforming Amendments.--
            (1) The heading of section 48 is amended to read as 
        follows:

``SEC. 48. ENERGY CREDIT.''

            (2) The table of sections for subpart E of part IV of 
        subchapter A of chapter 1 is amended by amending the item 
        relating to section 48 to read as follows:

                              ``Sec. 48. Energy credit.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 118. REPEAL OF RAPID AMORTIZATION OF REFORESTATION EXPENDITURES.

    (a) In General.--Section 194 is hereby repealed.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 62 is amended by striking 
        paragraph (11).
            (2) Subsections (a)(3)(C) and (b)(8) of section 1245 are 
        each amended by inserting ``(as in effect before its repeal by 
the Corporate Welfare Elimination Act of 1999)'' after ``section 194''.
            (3) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        194.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 119. TERMINATION OF EXCLUSION OF CERTAIN INCOME OF CITIZENS OR 
              RESIDENTS OF UNITED STATES LIVING ABROAD.

    (a) In General.--Section 911 (relating to citizens or residents of 
the United States living abroad) is amended by redesignating subsection 
(f) as subsection (g) and by inserting after subsection (e) the 
following new subsection:
    ``(f) Termination.--This section shall not apply to any taxable 
year beginning after December 31, 1999.''
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1999.

SEC. 120. REPEAL OF EXCLUSION FOR INCOME OF FOREIGN SALES CORPORATIONS.

    (a) In General.--Subpart C of part III of subchapter N of chapter 1 
(relating to taxation of foreign sales corporations) is hereby 
repealed.
    (b) Clerical Amendment.--The table of subparts for such part III is 
amended by striking the item relating to subpart C.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

SEC. 121. REPEAL OF DEFERRAL OF INCOME OF CONTROLLED FOREIGN 
              CORPORATIONS.

    (a) General Rule.--Subpart F of part III of subchapter N of chapter 
1 is amended by striking sections 952, 953, and 954 and inserting the 
following new sections:

``SEC. 952. SUBPART F INCOME.

    ``(a) General Rule.--For purposes of this subpart, the term 
`subpart F income' means the earnings and profits of the controlled 
foreign corporation for the taxable year computed with the following 
adjustments:
            ``(1) There shall be excluded the amount of the earnings 
        and profits which are attributable to income from sources 
        within the United States which is effectively connected with 
        the conduct by the controlled foreign corporation of a trade or 
        business within the United States, except to the extent such 
        income is exempt from taxation (or subject to a reduced rate of 
        tax) pursuant to a treaty obligation of the United States. For 
        purposes of the preceding sentence, income described in 
        paragraph (2) or (3) of section 921(d) shall be treated as 
        derived from sources within the United States.
            ``(2) In determining earnings and profits (or the deficit 
        in earnings and profits), the amount of any illegal bribe, 
        kickback, or other payment (within the meaning of section 
        162(c), except as otherwise provided in this paragraph) shall 
        not be taken into account to decrease such earnings and profits 
        or to increase such deficit. The payments referred to in the 
        preceding sentence include payments which would be unlawful 
        under the Foreign Corrupt Practices Act of 1977 if the payor 
        were a United States person.
            ``(3) Under regulations prescribed by the Secretary, there 
        shall be excluded any part of any earnings and profits if it is 
        established to the satisfaction of the Secretary that such part 
        could not have been distributed by the controlled foreign 
        corporation to United States shareholders who own (within the 
        meaning of section 958(a)) stock of such controlled foreign 
        corporation because of currency or other restrictions or 
        limitations imposed under the laws of any foreign country.
            ``(4) Earnings and profits shall be determined without 
        regard to paragraphs (4), (5), and (6) of section 312(n). Under 
        regulations, the preceding sentence shall not apply to the 
        extent it would increase earnings and profits by an amount 
        which was previously distributed by the controlled foreign 
        corporation.
Except as provided in this subsection and section 312(k)(4), the 
earnings and profits of any foreign corporation, and the deficit and 
earnings and profits of any foreign corporation for any taxable year 
shall be determined according to rules similar to those applicable to 
domestic corporations, under regulations prescribed by the Secretary.
    ``(b) Certain Deficits May Be Taken Into Account.--
            ``(1) Treatment of certain prior year deficits.--
                    ``(A) In general.--The amount included in the gross 
                income of any United States shareholder under section 
                951(a)(1)(A)(i) for any taxable year with respect to 
                any controlled foreign corporation shall be reduced by 
                the amount of such shareholder's pro rata share of any 
                qualified deficit of such controlled foreign 
                corporation.
                    ``(B) Qualified deficit.--For purposes of this 
                paragraph--
                            ``(i) In general.--The term `qualified 
                        deficit' means any deficit in the earnings and 
                        profits of the controlled foreign corporation 
                        for any prior taxable year which began after 
                        December 31, 1999, and for which such 
                        corporation was a controlled foreign 
                        corporation, but only to the extent such 
                        deficit has not previously been taken into 
                        account under this paragraph.
                            ``(ii) Special rule for deficits before 
                        2000.--The term `qualified deficit' includes 
                        any deficit in earnings and profits for any 
                        taxable year beginning before January 1, 2000, 
                        to the extent that such deficit qualified as a 
                        qualified deficit under subsection (c)(1)(B) of 
                        this section (as in effect on the day before 
                        the date of the enactment of this subsection); 
                        except that any such deficit may be taken into 
account under this paragraph only to offset amounts attributable to the 
same activity as the activity giving rise to such deficit.
                    ``(C) Pro rata share.--For purposes of this 
                paragraph, the shareholder's pro rata share of any 
                deficit shall be determined under rules similar to the 
                rules of section 951(a)(2) for whichever of the 
                following yields the smallest share:
                            ``(i) the close of the taxable year, or
                            ``(ii) the close of the taxable year in 
                        which the deficit arose.
            ``(2) Certain deficits of member of the same chain of 
        corporations may be taken into account.--
                    ``(A) In general.--A controlled foreign corporation 
                may elect to reduce the amount of its subpart F income 
                for any taxable year by the amount of any deficit in 
                earnings and profits of a qualified chain member for a 
                taxable year ending with (or within) the taxable year 
                of such controlled foreign corporation. To the extent 
                any deficit reduces subpart F income under the 
                preceding sentence, such deficit shall not be taken 
                into account under paragraph (1).
                    ``(B) Qualified chain member.--For purposes of this 
                paragraph, the term `qualified chain member' means, 
                with respect to any controlled foreign corporation, any 
                other corporation which is created or organized under 
                the laws of the same foreign country as the controlled 
                foreign corporation but only if--
                            ``(i) all the stock of such other 
                        corporation (other than directors' qualifying 
                        shares) is owned at all times during the 
                        taxable year in which the deficit arose 
                        (directly or through 1 or more corporations 
                        other than the common parent) by such 
                        controlled foreign corporation, or
                            ``(ii) all the stock of such controlled 
                        foreign corporation (other than directors' 
                        qualifying shares) is owned at all times during 
                        the taxable year in which the deficit arose 
                        (directly or through 1 or more corporations 
                        other than the common parent) by such other 
                        corporation.
                    ``(C) Coordination.--This paragraph shall be 
                applied after paragraph (1).
            ``(3) Determination of deficit.--In determining the amount 
        of any deficit in earnings and profits, the adjustments set 
        forth in subsection (a) shall apply.

``SEC. 953. SPECIAL RULES FOR CERTAIN INSURANCE COMPANIES.

    ``(a) Special Rule for Certain Captive Insurance Companies.--
            ``(1) In general.--For purposes only of taking into account 
        subpart F income which is attributable to related person 
        insurance income--
                    ``(A) the term `United States shareholder' means, 
                with respect to any foreign corporation, a United 
                States person (as defined in section 957(c)) who owns 
                (within the meaning of section 958(a)) any stock of the 
                foreign corporation,
                    ``(B) the term `controlled foreign corporation' has 
                the meaning given to such term by section 957(a) 
                determined by substituting `25 percent or more' for 
                `more than 50 percent', and
                    ``(C) the pro rata share referred to in section 
                951(a)(1)(A)(i) shall be determined under paragraph (5) 
                of this subsection.
            ``(2) Related person insurance income.--For purposes of 
        this subsection, the term `related person insurance income' 
        means any insurance income (within the meaning of subsection 
        (c)) attributable to a policy of insurance or reinsurance with 
        respect to which the person (directly or indirectly) insured is 
        a United States shareholder in the foreign corporation or a 
        related person to such a shareholder.
            ``(3) Exceptions.--
                    ``(A) Corporations not held by insureds.--Paragraph 
                (1) shall not apply to any foreign corporation if at 
                all times during the taxable year of such foreign 
                corporation--
                            ``(i) less than 20 percent of the total 
                        combined voting power of all classes of stock 
                        of such corporation entitled to vote, and
                            ``(ii) less than 20 percent of the total 
                        value of such corporation,
                is owned (directly or indirectly) under the principles 
                of section 883(c)(4) by persons who are (directly or 
                indirectly) insured under any policy of insurance or 
                reinsurance issued by such corporation or who are 
                related persons to any such person.
                    ``(B) De minimis exception.--Paragraph (1) shall 
                not apply to any foreign corporation for a taxable year 
                of such corporation if the related person insurance 
                income (determined on a gross basis) of such 
                corporation for such taxable year is less than 20 
                percent of its insurance income (as so determined) for 
                such taxable year determined without regard to those 
                provisions of subsection (c)(1) which limit insurance 
                income to income from countries other than the country 
                in which the corporation was created or organized.
                    ``(C) Election to treat income as effectively 
                connected.--Paragraph (1) shall not apply to any 
                foreign corporation for any taxable year if--
                            ``(i) such corporation elects (at such time 
                        and in such manner as the Secretary may 
                        prescribe)--
                                    ``(I) to treat its related person 
                                insurance income for such taxable year 
                                as income effectively connected 
with the conduct of a trade or business in the United States, and
                                    ``(II) to waive all benefits (other 
                                than with respect to section 884) with 
                                respect to related person insurance 
                                income granted by the United States 
                                under any treaty between the United 
                                States and any foreign country, and
                            ``(ii) such corporation meets such 
                        requirements as the Secretary shall prescribe 
                        to ensure that the tax imposed by this chapter 
                        on such income is paid.
                An election under this subparagraph made for any 
                taxable year shall not be effective if the corporation 
                (or any predecessor thereof) was a disqualified 
                corporation for the taxable year for which the election 
                was made or for any prior taxable year beginning after 
                1986.
                    ``(D) Special rules for subparagraph (c).--
                            ``(i) Period during which election in 
                        effect.--
                                    ``(I) In general.--Except as 
                                provided in subclause (II), any 
                                election under subparagraph (C) shall 
                                apply to the taxable year for which 
                                made and all subsequent taxable years 
                                unless revoked with the consent of the 
                                Secretary.
                                    ``(II) Termination.--If a foreign 
                                corporation which made an election 
                                under subparagraph (C) for any taxable 
                                year is a disqualified corporation for 
                                any subsequent taxable year, such 
                                election shall not apply to any taxable 
                                year beginning after such subsequent 
                                taxable year.
                            ``(ii) Exemption from tax imposed by 
                        section 4371.--The tax imposed by section 4371 
                        shall not apply with respect to any related 
                        person insurance income treated as effectively 
                        connected with the conduct of a trade or 
                        business within the United States under 
                        subparagraph (C).
                    ``(E) Disqualified corporation.--For purposes of 
                this paragraph the term `disqualified corporation' 
                means, with respect to any taxable year, any foreign 
                corporation which is a controlled foreign corporation 
                for an uninterrupted period of 30 days or more during 
                such taxable year (determined without regard to this 
                subsection) but only if a United States shareholder 
                (determined without regard to this subsection) owns 
                (within the meaning of section 958(a)) stock in such 
                corporation at some time during such taxable year.
            ``(4) Treatment of mutual insurance companies.--In the case 
        of a mutual insurance company--
                    ``(A) this subsection shall apply,
                    ``(B) policyholders of such company shall be 
                treated as shareholders, and
                    ``(C) appropriate adjustments in the application of 
                this subpart shall be made under regulations prescribed 
                by the Secretary.
            ``(5) Determination of pro rata share.--
                    ``(A) In general.--The pro rata share determined 
                under this paragraph for any United States shareholder 
                is the lesser of--
                            ``(i) the amount which would be determined 
                        under paragraph (2) of section 951(a) if--
                                    ``(I) only related person insurance 
                                income were taken into account,
                                    ``(II) stock owned (within the 
                                meaning of section 958(a)) by United 
                                States shareholders on the last day of 
                                the taxable year were the only stock in 
                                the foreign corporation, and
                                    ``(III) only distributions received 
                                by United States shareholders were 
                                taken into account under subparagraph 
                                (B) of such paragraph (2), or
                            ``(ii) the amount which would be determined 
                        under paragraph (2) of section 951(a) on the 
                        basis of the entire subpart F income of the 
                        foreign corporation for the taxable year.
                    ``(B) Coordination with other provisions.--The 
                Secretary shall prescribe regulations providing for 
                such modifications to the provisions of this subpart as 
                may be necessary or appropriate by reason of 
                subparagraph (A).
            ``(6) Related person.--For purposes of this subsection--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `related person' has the 
                meaning given such term by section 964(a).
                    ``(B) Treatment of certain liability insurance 
                policies.--In the case of any policy of insurance 
                covering liability arising from services performed as a 
                director, officer, or employee of a corporation or as a 
                partner or employee of a partnership, the person 
                performing such services and the entity for which such 
                services are performed shall be treated as related 
                persons.
            ``(7) Coordination with section 1248.--For purposes of 
        section 1248, if any person is (or would be but for paragraph 
        (3)) treated under paragraph (1) as a United States shareholder 
        with respect to any foreign corporation which would be taxed 
        under subchapter L if it were a domestic corporation and which 
        is (or would be but for paragraph (3)) treated under paragraph 
        (1) as a controlled foreign corporation--
                    ``(A) such person shall be treated as meeting the 
                stock ownership requirements of section 1248(a)(2) with 
                respect to such foreign corporation, and
                    ``(B) such foreign corporation shall be treated as 
                a controlled foreign corporation.
            ``(8) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including--
                    ``(A) regulations preventing the avoidance of this 
                subsection through cross insurance arrangements or 
                otherwise, and
                    ``(B) regulations which may provide that a person 
                will not be treated as a United States shareholder 
                under paragraph (1) with respect to any foreign 
                corporation if neither such person (nor any related 
                person to such person) is (directly or indirectly) 
                insured under any policy of insurance or reinsurance 
                issued by such foreign corporation.
    ``(b) Election by Foreign Insurance Company To Be Treated as 
Domestic Corporation.--
            ``(1) In general.--If--
                    ``(A) a foreign corporation is a controlled foreign 
                corporation (as defined in section 957(a) by 
                substituting `25 percent or more' for `more than 50 
                percent' and by using the definition of United States 
                shareholder under subsection (a)(1)(A) of this 
                section),
                    ``(B) such foreign corporation would qualify under 
                part I or II of subchapter L for the taxable year if it 
                were a domestic corporation,
                    ``(C) such foreign corporation meets such 
                requirements as the Secretary shall prescribe to ensure 
                that the taxes imposed by this chapter on such foreign 
                corporation are paid, and
                    ``(D) such foreign corporation makes an election to 
                have this paragraph apply and waives all benefits to 
                such corporation granted by the United States under any 
                treaty,
        for purposes of this title, such corporation shall be treated 
        as a domestic corporation.
            ``(2) Period during which election is in effect.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an election under paragraph (1) shall 
                apply to the taxable year for which made and all 
                subsequent taxable years unless revoked with the 
                consent of the Secretary.
                    ``(B) Termination.--If a corporation which made an 
                election under paragraph (1) for any taxable year fails 
                to meet the requirements of subparagraph (A), (B), or 
                (C) of paragraph (1) for any subsequent taxable year, 
                such election shall not apply to any taxable year 
                beginning after such subsequent taxable year.
            ``(3) Treatment of losses.--If any corporation treated as a 
        domestic corporation under this subsection is treated as a 
        member of an affiliated group for purposes of chapter 6 
        (relating to consolidated returns), any loss of such 
        corporation shall be treated as a dual consolidated loss for 
        purposes of section 1503(d) without regard to paragraph (2)(B) 
        thereof.
            ``(4) Effect of election.--
                    ``(A) In general.--For purposes of section 367, any 
                foreign corporation making an election under paragraph 
                (1) shall be treated as transferring (as the 1st day of 
                the 1st taxable year to which such election applies) 
                all of its assets to a domestic corporation in 
                connection with an exchange to which section 354 
                applies.
                    ``(B) Exception for pre-1988 earnings and profit.--
                            ``(i) In general.--Earnings and profits of 
                        the foreign corporation accumulated in taxable 
                        years beginning before January 1, 1988, shall 
                        not be included in the gross income of the 
                        persons holding stock in such corporation by 
                        reason of subparagraph (A).
                            ``(ii) Treatment of distributions.--For 
                        purposes of this title, any distribution made 
                        by a corporation to which an election under 
                        paragraph (1) applies out of earnings and 
                        profits accumulated in taxable years beginning 
                        before January 1, 1988, shall be treated as a 
                        distribution made by a foreign corporation.
                            ``(iii) Certain rules to continue to apply 
                        to pre-1988 earnings.--The provisions specified 
                        in clause (iv) shall be applied without regard 
                        to paragraph (1), except that, in the case of a 
                        corporation to which an election under 
                        paragraph (1) applies, only earnings and 
                        profits accumulated in taxable years beginning 
                        before January 1, 1988, shall be taken into 
                        account.
                            ``(iv) Specified provisions.--The 
                        provisions specified in this clause are:
                                    ``(I) Section 1248 (relating to 
                                gain from certain sales or exchanges of 
                                stock in certain foreign corporations).
                                    ``(II) This subpart to the extent 
                                such subpart relates to earnings 
                                invested in United States property or 
                                amounts referred to in clause (ii) or 
                                (iii) of section 951(a)(1)(A).
                                    ``(III) Section 884 to the extent 
                                the foreign corporation reinvested 1987 
                                earnings and profits in United States 
                                assets.
            ``(5) Effect of termination.--For purposes of section 367, 
        if--
                    ``(A) an election is made by a corporation under 
                paragraph (1) for any taxable year, and
                    ``(B) such election ceases to apply for any 
                subsequent taxable year,
        such corporation shall be treated as a domestic corporation 
        transferring (as of the 1st day of such subsequent taxable 
        year) all of its property to a foreign corporation in 
        connection with an exchange to which section 354 applies.
            ``(6) Additional tax on corporation making election.--
                    ``(A) In general.--If a corporation makes an 
                election under paragraph (1), the amount of tax imposed 
                by this chapter for the 1st taxable year to which such 
                election applies shall be increased by the amount 
                determined under subparagraph (B).
                    ``(B) Amount of tax.--The amount of tax determined 
                under this paragraph shall be equal to the lesser of--
                            ``(i) \3/4\ of 1 percent of the aggregate 
                        amount of capital and accumulated surplus of 
                        the corporation as of December 31, 1987, or
                            ``(ii) $1,500,000.
    ``(c) Insurance Income Defined.--For purposes of this section, the 
term `insurance income' means any income which--
            ``(1) is attributable to the issuing (or reinsuring) of any 
        insurance or annuity contract--
                    ``(A) in connection with property in, liability 
                arising out of activity in, or in connection with the 
                lives or health of residents of, a country other than 
                the country under the laws of which the controlled 
                foreign corporation is created or organized, or
                    ``(B) in connection with risks not described in 
                subparagraph (A) as the result of any arrangement 
                whereby another corporation receives a substantially 
                equal amount of premiums or other consideration in 
                respect of issuing (or reinsuring) a contract described 
                in subparagraph (A), and
            ``(2) would (subject to the modifications provided by 
        paragraphs (1) and (2) of subsection (d)) be taxed under 
        subchapter L of this chapter if such income were the income of 
        a domestic insurance company.
    ``(d) Special Rules.--In determining the amount of insurance 
income--
            ``(1) The following provisions of subchapter L shall not 
        apply:
                    ``(A) The small life insurance company deduction.
                    ``(B) Section 805(a)(5) (relating to operations 
                loss deduction).
                    ``(C) Section 832(c)(5) (relating to certain 
                capital losses).
            ``(2) The items referred to in--
                    ``(A) section 803(a)(1) (relating to gross amount 
                of premiums and other considerations),
                    ``(B) section 803(a)(2) (relating to net decrease 
                in reserves),
                    ``(C) section 805(a)(2) (relating to net increase 
                in reserves), and
                    ``(D) section 832(b)(4) (relating to premiums 
                earned on insurance contracts),
        shall be taken into account only to the extent they are in 
        respect of any reinsurance or the issuing of any insurance or 
        annuity contract described in subsection (a)(1).
            ``(3) All items of income, expenses, losses, and deductions 
        shall be properly allocated or apportioned under regulations 
        prescribed by the Secretary.''
    (b) Repeal of Export Trade Corporation Provisions.--Subpart G of 
part III of subchapter N of chapter 1 (relating to export trade 
corporations) is hereby repealed.
    (c) Conforming Amendments to Subpart F.--
            (1) Subparagraph (A) of section 955(a)(1) is amended by 
        inserting ``(as in effect for taxable years beginning before 
        1987)'' after ``section 954(b)(2)''.
            (2) Subsection (b) of section 955 is amended by striking 
        ``within the meaning of section 954(d)(3)'' and inserting 
        ``within the meaning of section 964(a)''.
            (3) Paragraph (2) of section 956(c) is amended--
                    (A) by striking ``section 953(a)(1)'' in 
                subparagraph (E) and inserting ``section 953(c)(1)'', 
                and
                    (B) by inserting ``(as in effect on the day before 
                the date of the enactment of this parenthetical) or 
                under section 952(a)(1)'' after ``section 952(b)'' in 
                subparagraph (H).
            (4) Subsection (b) of section 957 is amended--
                    (A) by striking ``income described in section 
                953(a)'' and inserting ``subpart F income attributable 
                to income described in section 953(c)'', and
                    (B) by striking ``section 953(a)(1)'' and inserting 
                ``section 953(c)(1)''.
            (5) Subsection (b) of section 958 is amended--
                    (A) by striking ``954(d)(3), 956(b)(2), and 957'' 
                and inserting ``956(b)(2), 957, and 964(a)'', and
                    (B) by striking ``954(d)(3)'' the second place it 
                appears and inserting ``964(a)''.
            (6) Subsection (b) of section 959 is amended by striking 
        ``be also included in the gross income'' and inserting ``be 
        also included in the subpart F income''.
            (7) Subsection (a) of section 964 is amended to read as 
        follows:
    ``(a) Related Person.--For purposes of this part, a person is a 
related person with respect to a controlled foreign corporation, if--
            ``(1) such person is an individual, corporation, 
        partnership, trust, or estate which controls, or is controlled 
        by, the controlled foreign corporation, or
            ``(2) such person is a corporation, partnership, trust, or 
        estate which is controlled by the same person or persons which 
        control the controlled foreign corporation.
For purposes of the preceding sentence, control means, with respect to 
a corporation, the ownership, directly or indirectly, of stock 
possessing more than 50 percent of the total voting power of all 
classes of stock entitled to vote or of the total value of stock of 
such corporation. In the case of a partnership, trust, or estate, 
control means the ownership, directly or indirectly, more than 50 
percent (by value) of the beneficial interests in such partnership, 
trust, or estate. For purposes of this paragraph, rules similar to the 
rules of section 958 shall apply.''
            (8) Section 964 is amended by striking subsection (b).
            (9) The table of sections for subpart F of part III of 
        subchapter N of chapter 1 is amended by striking the items 
        relating to sections 952, 953 and 954 and inserting the 
        following:

                              ``Sec. 952. Subpart F income.
                              ``Sec. 953. Special rules for certain 
                                        insurance companies.''
    (d) Other Conforming Amendments.--
            (1) Paragraph (2) of section 552(c) is amended--
                    (A) by amending subparagraph (A) to read as 
                follows:
                    ``(A) is received from a related person which (i) 
                is a corporation created or organized under the laws of 
                the same foreign country under the laws of which the 
                foreign corporation involved was created or organized, 
                and (ii) has a substantial part of its assets used in 
                its trade or business located in such same foreign 
                country, and'', and
                    (B) by striking ``954(d)(3)'' and inserting 
                ``964(a)''.
            (2) Subparagraph (B) of section 861(c)(2) is amended by 
        striking ``954(d)(3)'' and inserting ``964(a)''.
            (3) Subparagraph (A) of section 864(d)(5) is amended by 
        striking clauses (ii), (iii), and (iv).
            (4) Subparagraph (A) of section 881(c)(5) is hereby 
        repealed.
            (5) Subparagraph (D) of section 884(d)(2) is amended by 
        striking ``953(c)(3)(C)'' and inserting ``953(a)(3)(C)''.
            (6) Subparagraph (A) of section 898(b)(3) is amended--
                    (A) by striking ``953(c)(2)'' and inserting 
                ``953(a)(2)'', and
                    (B) by striking ``953(c)(1) and inserting 
                ``953(a)(1)''.
            (7) Clause (i) of section 904(d)(2)(A) is amended by 
        inserting ``, as in effect on the day before the date of the 
        repeal of such section'' after ``section 954(c)''.
            (8) Subclause (III) of section 904(d)(2)(C)(ii) is amended 
        by striking ``953(a)'' and inserting ``953(c)''.
            (9) Subparagraph (D) of section 904(d)(2) is amended--
                    (A) by inserting ``, as in effect on the day before 
                the date of the repeal of such section'' after 
                ``954(f)'', and
                    (B) by inserting ``or passive income'' before the 
                period at the end thereof.
            (10) Subparagraph (H) of section 904(d)(2) is amended by 
        striking ``954(d)(3)'' and inserting ``964(a)''.
            (11) Subparagraph (E) of section 904(d)(3) is hereby 
        repealed.
            (12) Subparagraph (C) of section 988(a)(3) is amended by 
        striking ``954(d)(3)'' and inserting ``964(a)''.
            (13) Subsection (c) of section 999 is amended--
                    (A) by striking ``, 952(a)(3),'' in paragraph (1), 
                and
                    (B) by striking ``, the addition to subpart F 
                income under section 952(a)(3),'' in paragraph (2).
            (14) Subsection (a) of section 6046 is amended by striking 
        ``953(c)'' and inserting ``953(a)''.
            (15) The table of subparts for part III of subchapter M of 
        chapter 1 is amended by striking the item relating to subpart 
        G.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years of controlled foreign corporations beginning 
after December 31, 1999, and to the taxable years of United States 
shareholders with which (or in which) such taxable years of controlled 
foreign corporations end.

SEC. 122. REPEAL OF DEFERRAL OF TAX UNDER MERCHANT MARINE CAPITAL 
              CONSTRUCTIONS FUNDS.

    (a) In General.--Subsection (c) of section 7518 (relating to tax 
incentives relating to Merchant Marine Capital Construction Fund) is 
amended by adding at the end the following new paragraph:
            ``(3) Termination.--Subparagraphs (A), (B), and (C) of 
        paragraph (1) shall not apply to any taxable year beginning 
        after December 31, 1999.''
    (b) Conforming Amendment to Merchant Marine Act, 1936.--Subsection 
(d) of section 607 of the Merchant Marine Act, 1936, is amended by 
adding at the end the following new paragraph:
            ``(3) Termination.--Subparagraphs (A), (B), and (C) of 
        paragraph (1) shall not apply to any taxable year beginning 
        after December 31, 1999.''

SEC. 123. REPEAL OF SPECIAL TREATMENT FOR MAGAZINE CIRCULATION 
              EXPENDITURES.

    (a) In General.--Section 173 (relating to circulation expenditures) 
is hereby repealed.
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 56(b)(2) is amended to read 
        as follows:
                    ``(A) In general.--The amount allowable as a 
                deduction under section 174(a) in computing the regular 
                tax for amounts paid or incurred after December 31, 
                1986, shall be capitalized and shall be amortized 
                ratably over the 10-year period beginning with the 
                taxable year in which the expenditures were made.''
            (2) Paragraph (2) of section 56(c) is amended by striking 
        subparagraph (C).
            (3) Clause (ii) of section 56(g)(4)(D) is amended to read 
        as follows:
                            ``(ii) Amortization of organization 
                        expenditures not to apply.--Section 248 shall 
                        not apply to expenditures paid or incurred in 
                        taxable year beginning after December 31, 
                        1989.''
            (4) Paragraph (1) of section 59(e) is amended by striking 
        ``(3-year period in the case of circulation expenditures 
        described in section 173)''.
            (5) Paragraph (2) of section 59(e) is amended by striking 
        subparagraph (A) and by redesignating the following 
        subparagraphs accordingly.
            (6) Paragraph (3) of section 312(n) is amended to read as 
        follows:
            ``(3) Amortization of organization expenditures not to 
        apply.--Section 248 shall not apply.''
            (7) Subparagraph (B) of section 1016(a)(1) is amended by 
        striking ``expenditures'' and inserting ``expenditures, as in 
        effect on the day before the date of the enactment of the 
        Corporate Welfare Elimination Act of 1999''.
            (8) The table of sections for part VI of subchapter B of 
        chapter 1 is amended by striking the item relating to section 
        173.
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 1999.

SEC. 124. REPEAL OF SPECIAL TREATMENT FOR RETURNS OF MAGAZINES, 
              PAPERBACKS, AND RECORDS.

    (a) In General.--Section 458 (relating to magazines, paperbacks, 
and records returned after the close of the taxable year) is hereby 
repealed.
    (b) Clerical Amendment.--The table of sections for subpart B of 
part II of subchapter E of chapter 1 is amended by striking the item 
relating to section 458.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1999.

                      TITLE II--NATURAL RESOURCES

SEC. 201. PUBLIC RESOURCES DEFICIT REDUCTION ACT OF 1999.

    This title may be cited as the ``Public Resources Deficit Reduction 
Act of 1999''.

                     Subtitle A--General Provisions

SEC. 211. FAIR MARKET VALUE FOR RESOURCE DISPOSAL.

    (a) In General.--Notwithstanding any other provision of law, no 
timber, minerals, forage, or other natural resource owned by the United 
States, no Federally owned water, and no hydroelectric energy generated 
at a Federal facility may be sold, leased, or otherwise disposed of by 
any department, agency, or instrumentality of the United States for an 
amount less than fair market value, as determined by such department, 
agency, or instrumentality.
    (b) Staggered Effective Dates.--
            (1) Existing contracts, leases, and agreements.--Subsection 
        (a) shall not apply to any existing contract, lease, or other 
        binding arrangement entered into before the date of the 
        enactment of this title unless such contract, lease, or other 
        arrangement is renewed or extended after such date.
            (2) Contracts, leases, and agreements entered into in 5-
        year period.--In the case of any contract, lease, or other 
        binding arrangement entered into or renewed or extended during 
        the 5-year period beginning on the date of the enactment of 
        this title, subsection (a) shall apply immediately upon the 
        expiration of such period.
            (3) Contracts, leases, and agreements entered into after 5-
        year period.--Subsection (a) shall apply immediately to all 
        contracts, leases, or other binding arrangements entered into 
        or renewed or extended after the end of the 5-year period 
        beginning on the date of the enactment of this title.
    (c) Waiver.--The President may waive the requirements of subsection 
(a) whenever the President determines that such waiver is in the 
national interest. The President shall submit a notice to Congress 
containing an explanation of the reasons for any such determination 
within 60 days after the date of the determination.

SEC. 212. FEES FROM PROGRAM BENEFICIARIES.

    (a) General Authority.--The Secretary of the Interior and the 
Secretary of Agriculture are each authorized to establish and collect 
from persons subject to programs administered by each such Secretary 
such user fees as may be necessary to reimburse the United States for 
the expenses incurred in administering such programs. The aggregate 
amount of fees that may be assessed and collected under this section by 
each such Secretary in any fiscal year from persons subject to any such 
program shall not exceed the aggregate amount of expenses incurred in 
administering such program in such fiscal year.
    (b) Effective Date; Oil and Gas Lease Transfers.--The Secretary of 
the Interior and the Secretary of Agriculture may, by rule, establish 
the applicable effective date of any fee to be imposed under this 
section, except that fees shall be established and collected under this 
section from each person receiving a transfer of a Federal onshore oil 
and gas lease after the date of the enactment of this title.

SEC. 213. REVENUES FROM SALE, LEASE, AND TRANSFER OF ASSETS.

    (a) In General.--Section 1105(a) of chapter 11 of title 31, United 
States Code, is amended by inserting after paragraph (30) the following 
new paragraph:
            ``(31) a separate statement, asset by asset and aggregated 
        by major functional category, of--
                    ``(A) projected revenues during the fiscal year for 
                which the budget is submitted from the anticipated 
                sale, lease, or transfer of any physical asset; and
                    ``(B) the estimated price at which this asset or a 
                comparable asset would be sold in an arms length 
                transaction in the private sector.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective for fiscal year 2001 and shall be fully reflected in 
the fiscal year 2001 budget submitted by the President in February 2000 
under section 1105(a) of title 31, United States Code.

                 Subtitle B--Revenue From Mining Claims

SEC. 221. DEFINITIONS.

    (a) Definitions.--As used in this subtitle:
            (1) The term ``locatable mineral'' means any mineral not 
        subject to disposition under any of the following:
                    (A) The Mineral Leasing Act (30 U.S.C. 181 et 
                seq.).
                    (B) The Geothermal Steam Act of 1970 (30 U.S.C. 
                1001 et seq.).
                    (C) The Act of July 31, 1947, commonly known as the 
                Materials Act of 1947 (30 U.S.C. 601 et seq.).
                    (D) The Mineral Leasing Act for Acquired Lands (30 
                U.S.C. 351 et seq.).
            (2) The term ``mineral activities'' means any activity for, 
        related to, or incidental to mineral exploration, mining, 
        beneficiation, and processing activities for any locatable 
        mineral, including access. When used with respect to this term:
                    (A) The term ``exploration'' means those techniques 
                employed to locate the presence of a locatable mineral 
                deposit and to establish its nature, position, size, 
                shape, grade, and value.
                    (B) The term ``mining'' means the processes 
                employed for the extraction of a locatable mineral from 
                the earth.
                    (C) The term ``beneficiation'' means the crushing 
                and grinding of locatable mineral ore and such 
                processes as are employed to free the mineral from 
                other constituents, including but not necessarily 
                limited to, physical and chemical separation 
                techniques.
                    (D) The term ``processing'' means processes 
                downstream of beneficiation employed to prepare 
                locatable mineral ore into the final marketable 
                product, including but not limited to, smelting and 
                electrolytic refining.
            (3) The term ``mining claim'' means a claim for the 
        purposes of mineral activities.
            (4) The term ``Secretary'' means, unless otherwise provided 
        in this subtitle, the Secretary of the Interior acting through 
        the Director of the Minerals Management Service.

SEC. 222. MINING CLAIM MAINTENANCE REQUIREMENTS.

    (a) In General.--The holder of each mining claim located on lands 
open to location shall pay to the Secretary an annual claim maintenance 
fee of $100 per claim per calendar year.
    (b) Time of Payment.--The claim maintenance fee payable pursuant to 
subsection (a) for any year shall be paid on or before August 31 of 
each year, except that for the initial calendar year in which the 
location is made, the locator shall pay the initial claim maintenance 
fee at the time the location notice is recorded with the Bureau of Land 
Management.
    (c) Oil Shale Claims Subject to Claim Maintenance Fees Under Energy 
Policy Act of 1992.--This section shall not apply to any oil shale 
claims for which a fee is required to be paid under section 2511(e)(2) 
of the Energy Policy Act of 1992 (106 Stat. 3111; 30 U.S.C. 242).
    (d) Claim Maintenance Fees Payable Under 1993 Act.--The claim 
maintenance fees payable under this section for any period with respect 
to any claim shall be reduced by the amount of the claim maintenance 
fees paid under section 10101 of the Omnibus Budget Reconciliation Act 
of 1993 (30 U.S.C. 28f) with respect to that claim and with respect to 
the same period.
    (e) Waiver.--(1) The claim maintenance fee required under this 
section may be waived for a claim holder who certifies in writing to 
the Secretary that on the date the payment was due, the claim holder 
and all related parties held not more than 10 mining claims on lands 
open to location. Such certification shall be made on or before the 
date on which payment is due.
    (2) For purposes of paragraph (1), with respect to any claim 
holder, the term ``related party'' means each of the following:
            (A) The spouse and dependent children (as defined in 
        section 152 of the Internal Revenue Code of 1986) of the claim 
        holder.
            (B) Any affiliate of the claim holder.
    (f) Co-ownership.--Upon the failure of any one or more of several 
co-owners to contribute such co-owner or owners' portion of the fee 
under this section, any co-owner who has paid such fee may, after the 
payment due date, give the delinquent co-owner or owners notice of such 
failure in writing (or by publication in the newspaper nearest the 
claim for at least once a week for at least 90 days). If at the 
expiration of 90 days after such notice in writing or by publication, 
any delinquent co-owner fails or refuses to contribute his portion, his 
interest in the claim shall become the property of the co-owners who 
have paid the required fee.

SEC. 223. ROYALTY.

    (a) Reservation of Royalty.--Production of all locatable minerals 
from any mining claim located under the general mining laws, or mineral 
concentrates or products derived from locatable minerals from any 
mining claim located under the general mining laws, as the case may be, 
shall be subject to a royalty of 8 percent of the gross income from 
such production. The claimholder and any operator to whom the 
claimholder has assigned the obligation to make royalty payments under 
the claim and any person who controls such claimholder or operator 
shall be jointly and severally liable for payment of such royalties.
    (b) Duties of Claim Holders, Operators, and Transporters.--(1) A 
person--
            (A) who is required to make any royalty payment under this 
        section shall make such payments to the United States at such 
        times and in such manner as the Secretary may by rule 
        prescribe; and
            (B) shall notify the Secretary, in the time and manner as 
        may be specified by the Secretary, of any assignment that such 
        person may have made of the obligation to make any royalty or 
        other payment under a mining claim.
    (2) Any person paying royalties under this section shall file a 
written instrument, together with the first royalty payment, affirming 
that such person is liable to the Secretary for making proper payments 
for all amounts due for all time periods for which such person has a 
payment responsibility. Such liability for the period referred to in 
the preceding sentence shall include any and all additional amounts 
billed by the Secretary and determined to be due by final agency or 
judicial action. Any person liable for royalty payments under this 
section who assigns any payment obligation shall remain jointly and 
severally liable for all royalty payments due for the claim for the 
period.
    (3) A person conducting mineral activities shall--
            (A) develop and comply with the site security provisions in 
        operations permit designed to protect from theft the locatable 
        minerals, concentrates, or products derived therefrom which are 
        produced or stored on a mining claim, and such provisions 
shall conform with such minimum standards as the Secretary may 
prescribe by rule, taking into account the variety of circumstances on 
mining claims; and
            (B) not later than the 5th business day after production 
        begins anywhere on a mining claim, or production resumes after 
        more than 90 days after production was suspended, notify the 
        Secretary, in the manner prescribed by the Secretary, of the 
        date on which such production has begun or resumed.
    (4) The Secretary may by rule require any person engaged in 
transporting a locatable mineral, concentrate, or product derived 
therefrom to carry on his or her person, in his or her vehicle, or in 
his or her immediate control, documentation showing, at a minimum, the 
amount, origin, and intended destination of the locatable mineral, 
concentrate, or product derived therefrom in such circumstances as the 
Secretary determines is appropriate.
    (c) Recordkeeping and Reporting Requirements.--(1) A claim holder, 
operator, or other person directly involved in developing, producing, 
processing, transporting, purchasing, or selling locatable minerals, 
concentrates, or products derived therefrom, subject to this title, 
through the point of royalty computation shall establish and maintain 
any records, make any reports, and provide any information that the 
Secretary may reasonably require for the purposes of implementing this 
section or determining compliance with rules or orders under this 
section. Such records shall include, but not be limited to, periodic 
reports, records, documents, and other data. Such reports may also 
include, but not be limited to, pertinent technical and financial data 
relating to the quantity, quality, composition volume, weight, and 
assay of all minerals extracted from the mining claim. Upon the request 
of any officer or employee duly designated by the Secretary or any 
State conducting an audit or investigation pursuant to this section, 
the appropriate records, reports, or information which may be required 
by this section shall be made available for inspection and duplication 
by such officer or employee or State.
    (2) Records required by the Secretary under this section shall be 
maintained for 6 years after cessation of all mining activity at the 
claim concerned unless the Secretary notifies the operator that he or 
she has initiated an audit or investigation involving such records and 
that such records must be maintained for a longer period. In any case 
when an audit or investigation is underway, records shall be maintained 
until the Secretary releases the operator of the obligation to maintain 
such records.
    (d) Audits.--The Secretary is authorized to conduct such audits of 
all claim holders, operators, transporters, purchasers, processors, or 
other persons directly or indirectly involved in the production or 
sales of minerals covered by this subtitle, as the Secretary deems 
necessary for the purposes of ensuring compliance with the requirements 
of this section. For purposes of performing such audits, the Secretary 
shall, at reasonable times and upon request, have access to, and may 
copy, all books, papers and other documents that relate to compliance 
with any provision of this section by any person.
    (e) Cooperative Agreements.--(1) The Secretary is authorized to 
enter into cooperative agreements with the Secretary of Agriculture to 
share information concerning the royalty management of locatable 
minerals, concentrates, or products derived therefrom, to carry out 
inspection, auditing, investigation, or enforcement (not including the 
collection of royalties, civil or criminal penalties, or other 
payments) activities under this section in cooperation with the 
Secretary, and to carry out any other activity described in this 
section.
    (2) Except as provided in paragraph (4)(A) of this subsection 
(relating to trade secrets), and pursuant to a cooperative agreement, 
the Secretary of Agriculture shall, upon request, have access to all 
royalty accounting information in the possession of the Secretary 
respecting the production, removal, or sale of locatable minerals, 
concentrates, or products derived therefrom from claims on lands open 
to location under the general mining laws.
    (3) Trade secrets, proprietary, and other confidential information 
shall be made available by the Secretary pursuant to a cooperative 
agreement under this subsection to the Secretary of Agriculture upon 
request only if--
            (A) the Secretary of Agriculture consents in writing to 
        restrict the dissemination of the information to those who are 
        directly involved in an audit or investigation under this 
        section and who have a need to know;
            (B) the Secretary of Agriculture accepts liability for 
        wrongful disclosure; and
            (C) the Secretary of Agriculture demonstrates that such 
        information is essential to the conduct of an audit or 
        investigation under this subsection.
    (f) Interest and Substantial Underreporting Assessments.--(1) In 
the case of mining claims where royalty payments are not received by 
the Secretary on the date that such payments are due, the Secretary 
shall charge interest on such under payments at the same interest rate 
as is applicable under section 6621(a)(2) of the Internal Revenue Code 
of 1986. In the case of an underpayment, interest shall be computed and 
charged only on the amount of the deficiency and not on the total 
amount.
    (2) If there is any underreporting of royalty owed on production 
from a claim for any production month by any person liable for royalty 
payments under this section, the Secretary may assess a penalty of 10 
percent of the amount of that underreporting.
    (3) If there is a substantial underreporting of royalty owed on 
production from a claim for any production month by any person 
responsible for paying the royalty, the Secretary may assess an 
additional penalty of 10 percent of the amount of that underreporting.
    (4) For the purposes of this subsection, the term 
``underreporting'' means the difference between the royalty on the 
value of the production which should have been reported and the royalty 
on the value of the production which was reported, if the value which 
should have been reported is greater than the value which was reported. 
An underreporting constitutes a ``substantial underreporting'' if such 
difference exceeds 10 percent of the royalty on the value of production 
which should have been reported.
    (5) The Secretary shall not impose the assessment provided in 
paragraph (2) or (3) of this subsection if the person liable for 
royalty payments under this section corrects the underreporting before 
the date such person receives notice from the Secretary that an 
underreporting may have occurred, or before 90 days after the date of 
the enactment of this section, whichever is later.
    (6) The Secretary shall waive any portion of an assessment under 
paragraph (2) or (3) of this subsection attributable to that portion of 
the underreporting for which the person responsible for paying the 
royalty demonstrates that--
            (A) such person had written authorization from the 
        Secretary to report royalty on the value of the production on 
        the basis on which it was reported,
            (B) such person had substantial authority for reporting 
        royalty on the value of the production on the basis on which it 
        was reported,
            (C) such person previously had notified the Secretary, in 
        such manner as the Secretary may by rule prescribe, of relevant 
        reasons or facts affecting the royalty treatment of specific 
        production which led to the underreporting, or
            (D) such person meets any other exception which the 
        Secretary may, by rule, establish.
    (7) All penalties collected under this subsection shall be 
deposited in the Treasury.
    (g) Expanded Royalty Obligations.--Each person liable for royalty 
payments under this section shall be jointly and severally liable for 
royalty on all locatable minerals, concentrates, or products derived 
therefrom lost or wasted from a mining claim located or converted under 
this section when such loss or waste is due to negligence on the part 
of any person or due to the failure to comply with any rule, 
regulation, or order issued under this section.
    (h) Exception.--No royalty shall be payable under subsection (a) 
with respect to minerals processed at a facility by the same person or 
entity which extracted the minerals if an urban development action 
grant has been made under section 119 of the Housing and Community 
Development Act of 1974 with respect to any portion of such facility.
    (i) Effective Date.--The royalty under this section shall take 
effect with respect to the production of locatable minerals after the 
enactment of this title, but any royalty payments attributable to 
production during the first 12 calendar months after the enactment of 
this title shall be payable at the expiration of such 12-month period.

SEC. 224. SEVERANCE TAX.

    (a) Severance Tax on Minerals.--Chapter 36 of the Internal Revenue 
Code of 1986 (relating to certain other excise taxes) is amended by 
adding at the end the following new subchapter:

         ``Subchapter G--Tax on Severance of Locatable Minerals

``SEC. 4500. TAX ON SEVERANCE OF LOCATABLE MINERALS.

    ``(a) In General.--There is hereby imposed a tax on gross income 
resulting from the severance of any locatable mineral, or mineral 
concentrates or products, from a mine or other natural deposit located 
within the United States.
    ``(b) Amount of Tax.--The amount of the tax imposed by subsection 
(a) shall be 8 percent of the gross income derived from the locatable 
mineral, or from the mineral concentrates or products, severed as 
described in such subsection.
    ``(c) Exception If Royalty Imposed.--Subsection (a) shall not apply 
to gross income with respect to which a royalty is imposed by section 
203 of the Public Resources Deficit Reduction Act of 1999.''.
    (b) Conforming Amendment.--The table of subchapters for chapter 36 
of such Code (relating to certain other excise taxes) is amended by 
adding at the end the following new item:

                              ``Subchapter G. Tax on severance of 
                                        locatable minerals.''.

SEC. 225. FUND FOR ABANDONED LOCATABLE MINERALS MINE RECLAMATION.

    (a) Establishment of Fund.--(1) There is established on the books 
of the Treasury of the United States a trust fund to be known as the 
Abandoned Locatable Minerals Mine Reclamation Fund (hereinafter in this 
subtitle referred to as the `Fund'). The Fund shall be administered by 
the Secretary acting through the Director of the Office of Surface 
Mining Reclamation and Enforcement.
    (2) The Secretary shall notify the Secretary of the Treasury as to 
what portion of the Fund is not, in the Secretary's judgment, required 
to meet current withdrawals. The Secretary of the Treasury shall invest 
such portion of the Fund in public debt securities with maturities 
suitable for the needs of such Fund and bearing interest at rates 
determined by the Secretary of the Treasury, taking into consideration 
current market yields on outstanding marketplace obligations of the 
United States of comparable maturities. The income on such investments 
shall be credited to, and form a part of, the Fund.
    (b) Amounts.--The following amounts shall be credited to the Fund:
            (1) All moneys received from royalties under section 223.
            (2) All taxes collected under section 4500 of the Internal 
        Revenue Code of 1986.
            (3) All donations by persons, corporations, associations, 
        and foundations for the purposes of this section.
    (c) Use and Objectives of the Fund.--The Secretary is authorized, 
subject to appropriations, to use moneys in the Fund for the 
reclamation and restoration of land and water resources adversely 
affected by past mineral activities on lands the legal and beneficial 
title to which resides in the United States, and of land within the 
exterior boundary of any National Forest System unit.
    (d) Specific Sites and Areas Not Eligible.--The provisions of 
section 411(d) of the Surface Mining Control and Reclamation Act of 
1977 (30 U.S.C. 1240a(d)) shall apply to expenditures made from the 
Fund established under this section.
    (e) Fund Expenditures.--Moneys available from the Fund may be 
expended for the purposes specified in subsection (c) directly by the 
Director of the Office of Surface Mining Reclamation and Enforcement. 
The Director may also make such money available for such purposes to 
the Director of the Bureau of Land Management, to the Chief of the 
United States Forest Service, to the Director of the National Park 
Service, to the Director of the United States Fish and Wildlife 
Service, to any other agency of the United States, to an Indian tribe, 
or to any public entity that volunteers to develop and implement, and 
that has the ability to carry out, all or a significant portion of a 
reclamation program under this subtitle.
    (f) Authorization of Appropriations.--Amounts credited to the Fund 
are authorized to be appropriated for the purpose of this section 
without fiscal year limitation.

SEC. 226. LIMITATION ON PATENT ISSUANCE.

    (a) Mining Claims.--After the date of enactment of this title, no 
patent shall be issued by the United States for any mining claim 
located under the general mining laws unless the Secretary determines 
that, for the claim concerned--
            (1) a patent application was filed with the Secretary on or 
        before January 27, 1995; and
            (2) all requirements established under sections 2325 and 
        2326 of the Revised Statutes (30 U.S.C. 29 and 30) for vein or 
        lode claims and sections 2329, 2330, 2331, and 2333 of the 
        Revised Statutes (30 U.S.C. 35, 36, and 37) for placer claims 
        were fully complied with by that date.
If the Secretary makes the determinations referred to in paragraphs (1) 
and (2) for any mining claim, the holder of the claim shall be entitled 
to the issuance of a patent in the same manner and degree to which such 
claim holder would have been entitled to prior to the enactment of this 
title, unless and until such determinations are withdrawn or 
invalidated by the Secretary or by a court of the United States.
    (b) Mill Sites.--After the date of enactment of this title, no 
patent shall be issued by the United States for any mill site claim 
located under the general mining laws unless the Secretary determines 
that for the mill site concerned--
            (1) a patent application for such land was filed with the 
        Secretary on or before January 27, 1999; and
            (2) all requirements applicable to such patent application 
        were fully complied with by that date.
If the Secretary makes the determinations referred to in paragraphs (1) 
and (2) for any mill site claim, the holder of the claim shall be 
entitled to the issuance of a patent in the same manner and degree to 
which such claim holder would have been entitled to prior to the 
enactment of this title, unless and until such determinations are 
withdrawn or invalidated by the Secretary or by a court of the United 
States.

SEC. 227. PURCHASING POWER ADJUSTMENT.

    The Secretary shall adjust all dollar amounts established in this 
subtitle for changes in the purchasing power of the dollar every 10 
years following the date of enactment of this title, employing the 
Consumer Price Index for all-urban consumers published by the 
Department of Labor as the basis for adjustment, and rounding according 
to the adjustment process of conditions of the Federal Civil Penalties 
Inflation Adjustment Act of 1990 (104 Stat. 890).

SEC. 228. SAVINGS CLAUSE.

    Nothing in this title shall be construed as repealing or modifying 
any Federal law, regulation, order, or land use plan, in effect prior 
to the effective date of this title, that prohibits or restricts the 
application of the general mining laws, including such laws that 
provide for special management criteria for operations under the 
general mining laws as in effect prior to the effective date of this 
title, to the extent such laws provide environmental protection greater 
than required under this subtitle.

SEC. 229. EFFECTIVE DATE.

    Except as otherwise provided in section 226 (relating to limitation 
on patent issuance), this subtitle shall take effect on the date 1 year 
after the date of enactment of this title.

        Subtitle C--Use or Disposal of Federal Natural Resources

SEC. 231. ANNUAL DOMESTIC LIVESTOCK GRAZING FEE.

    The Federal Land Policy and Management Act of 1976 is amended by 
inserting after section 401 (43 U.S.C. 1751) the following new section:

``SEC. 401A. ESTABLISHMENT OF FAIR MARKET VALUE GRAZING FEES.

    ``(a) Establishment of Annual Domestic Livestock Grazing Fee.--(1) 
Notwithstanding any other provision of law, the Secretary of 
Agriculture, with respect to National Forest System lands in the 16 
contiguous Western States (except National Grasslands) administered by 
the Forest Service where domestic livestock grazing is permitted under 
applicable law, shall establish an annual domestic livestock grazing 
fee equal to fair market value.
    ``(2) Notwithstanding any other provision of law, the Secretary of 
the Interior, with respect to public domain lands administered by the 
Bureau of Land Management where domestic livestock grazing is permitted 
under applicable law, shall establish an annual domestic livestock 
grazing fee equal to fair market value.
    ``(b) Calculation of Fair Market Value.--(1) For purposes of 
determining the annual domestic livestock grazing fee under this 
section, the Secretary concerned shall calculate fair market value 
using the following formula:

 
                            Appraised Base Value x Forage Value Index
   Fair Market Value=   ------------------------------------------------
                                               100
------------------------------------------------------------------------
 

    ``(2) For purposes of the formula in paragraph (1):
            ``(A) The term `Forage Value Index' means the Forage Value 
        Index (FVI) computed annually by the Economic Research Service, 
        United States Department of Agriculture, and set with the 1999 
        FVI equal to 100; and
            ``(B) The term `Appraised Base Value' means the 1983 
        Appraisal Value conclusions for mature cattle and horses 
        (expressed in dollars per head or per month), as determined in 
        the 1986 report prepared jointly by the Secretary of 
        Agriculture and the Secretary of the Interior entitled `Grazing 
        Fee Review and Evaluation', dated February 1986, on a west-wide 
        basis using the lowest appraised value of the pricing areas 
        adjusted for advanced payment and indexed to 1999.
    ``(c) Limitation on Fluctuations of Fees.--Notwithstanding the 
amount calculated under subsection (b) for a year, the domestic 
livestock grazing fee charged for any given year shall not increase nor 
decrease by more than 33.3 percent from the domestic livestock grazing 
fee for the previous year.
    ``(d) Effect on Executive Order.--Executive Order No. 12548, dated 
February 14, 1986 (51 Fed. Reg. 5985), shall not apply to grazing fees 
established pursuant to this section.
    ``(e) Effect on Grazing Advisory Boards.--The grazing advisory 
boards established pursuant to Secretarial action, notice of which was 
published in the Federal Register on May 14, 1986 (51 Fed. Reg. 17874), 
are abolished, effective as of the date of the enactment of this 
section, and the advisory functions exercised by such boards shall be 
exercised only by the appropriate councils established under section 
309 of this Act.
    ``(f) Use of Fees and Range Improvement Funds.--Funds appropriated 
pursuant to section 5 of the Public Rangelands Improvement Act of 1978 
(43 U.S.C. 1904) or any other provision of law related to disposition 
of the Federal share of receipts from fees for grazing on public domain 
lands or National Forest lands in the 16 contiguous western States 
shall be used for restoration and enhancement of fish and wildlife 
habitat, for restoration and improved management of riparian areas, and 
for implementation and enforcement of applicable land management plans, 
allotment plans, and regulations regarding the use of such lands for 
domestic livestock grazing. Such funds shall be distributed as the 
Secretary concerned considers advisable after consultation and 
coordination with the advisory councils established pursuant to section 
309 of this Act and other interested parties.
    ``(g) Commencement Date for Fees.--The first annual domestic 
livestock grazing fee required by this section shall apply with respect 
to the grazing season commencing on March 1, 2000.''.

SEC. 232. ELIMINATION OF BELOW-COST SALES OF TIMBER FROM NATIONAL 
              FOREST SYSTEM LANDS.

    (a) In General.--The National Forest Management Act of 1976 is 
amended by inserting after section 14 (16 U.S.C. 472a) the following 
new section:

``SEC. 14A. ELIMINATION OF BELOW-COST TIMBER SALES FROM NATIONAL FOREST 
              SYSTEM LANDS.

    ``(a) Requirement That Sale Revenues Exceed Costs.--On and after 
October 1, 2003, in appraising timber and setting a minimum bid for 
trees, portions of trees, or forest products located on National Forest 
System lands proposed for sale under section 14 or any other provision 
of law, the Secretary of Agriculture shall ensure that the estimated 
cash returns to the United States Treasury from each sale exceed the 
estimated costs to be incurred by the Federal Government in the 
preparation of the sale or as a result of the sale.
    ``(b) Costs To Be Considered.--For purposes of estimating under 
this section the costs to be incurred by the Federal Government from 
each timber sale, the Secretary shall assign to the sale the following 
costs:
            ``(1) The actual appropriated expenses for sale preparation 
        and harvest administration incurred or to be incurred by the 
        Federal Government from the sale and the payments to counties 
        to be made as a result of the sale.
            ``(2) A portion of the annual timber resource planning 
        costs, silvicultural examination costs, other resource support 
        costs, road design and construction costs, road maintenance 
        costs, transportation planning costs, appropriated 
        reforestation costs, timber stand improvement costs, forest 
        genetics costs, general administrative costs (including 
        administrative costs of the national and regional offices of 
        the Forest Service), and facilities construction costs of the 
        Federal Government directly or indirectly related to the timber 
        harvest program conducted on National Forest System lands.
    ``(c) Method of Allocating Costs.--The Secretary shall allocate the 
costs referred to in subsection (b)(2) to each unit of the National 
Forest System, and each proposed timber sale in such unit, on the basis 
of harvest volume.
    ``(d) Transitional Requirements.--To ensure the elimination of all 
below-cost timber sales by the date specified in subsection (a), the 
Secretary shall progressively reduce the number and size of below-cost 
timber sales on National Forest System lands as follows:
            ``(1) In fiscal years 2000 and 2001, the quantity of timber 
        sold in below-cost timber sales on National Forest System lands 
        shall not exceed 75 percent of the quantity of timber sold in 
        such sales in the preceding fiscal year.
            ``(2) In fiscal year 2002, the quantity of timber sold in 
        below-cost timber sales on National Forest System lands shall 
        not exceed 65 percent of the quantity of timber sold in such 
        sales in fiscal year 2000.
            ``(3) In fiscal year 2003, the quantity of timber sold in 
        below-cost timber sales on National Forest System lands shall 
        not exceed 50 percent of the quantity of timber sold in such 
        sales in the fiscal year 2002.
    ``(e) Below-Cost Timber Sale.--For purposes of this section, the 
term `below-cost timber sale' means a sale of timber in which the costs 
to be incurred by the Federal Government exceed the cash returns to the 
United States Treasury.''.
    (b) Findings.--Section 2 of the Forest and Rangeland Renewable 
Resources Planning Act of 1974 (16 U.S.C. 1600) is amended--
            (1) by striking ``and'' at the end of paragraph (6);
            (2) by striking the period at the end of paragraph (7) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(8) the practice of selling timber from National Forest 
        System lands for less than the cost to the Federal Government 
        of growing the timber and preparing the timber for sale is not 
        in the best interests of the United States, and such below-cost 
        sales should be eliminated in an orderly manner to achieve a 
        more economically and environmentally sound timber program for 
        the National Forest System.''.

SEC. 233. TIMBERLAND SUITABILITY.

    Subsection (k) of section 6 of the Forest and Rangeland Renewable 
Resources Planning Act of 1974 (16 U.S.C. 1604) is amended to read as 
follows:
    ``(k) Determination of Suitability of Lands for Timber 
Production.--
            ``(1) Determination required.--In revising land management 
        plans developed pursuant to this section, the Secretary shall 
        identify lands within the management area that are not suited 
        for timber production based on physical, economic, or other 
        relevant factors. The Secretary shall review the 
        identifications made under this paragraph during each revision 
        of the forest plan.
            ``(2) Evidence of economic unsuitability.--The Secretary 
        shall identify lands as economically unsuitable for timber 
        production under paragraph (1) if--
                    ``(A) the expected cash returns to the United 
                States Treasury that would result from the sale of 
                standing timber on the lands do not exceed the expected 
                costs that would be incurred by the Federal Government 
                in preparation or as a result of such sales; or
                    ``(B) the expected cash returns to the United 
                States Treasury that would result from the sale of 
                subsequent timber stands on the lands do not exceed the 
                expected costs that would be incurred by the Federal 
                Government in preparation or as a result of such sales.
            ``(3) Costs to be considered.--For purposes of estimating 
        under paragraph (2) the costs to be incurred by the Federal 
        Government from timber sales conducted on the lands being 
        reviewed, the Secretary shall assign to sales on such lands the 
        following costs:
                    ``(A) The appropriated expenses for sale 
                preparation and harvest administration that would be 
                incurred by the Federal Government from such sales and 
                the payments to counties that would be made as a result 
                of such sales.
                    ``(B) A portion of the annual timber resource 
                planning costs, silvicultural examination costs, other 
                resource support costs, road design and construction 
                costs, road maintenance costs, transportation planning 
                costs, appropriated reforestation costs, timber stand 
                improvement costs, forest genetics costs, general 
                administrative costs (including administrative costs of 
                the national and regional offices of the Forest 
                Service), and facilities construction costs of the 
                Federal Government directly or indirectly related to 
                the timber harvest program conducted on National Forest 
                System lands.
            ``(4) Method of allocating costs.--The Secretary shall 
        allocate the costs referred to in paragraph (3)(B) to each unit 
        of the National Forest System on the basis of harvest volume.
            ``(5) Prohibition on timber harvests on unsuitable lands.--
        In the case of lands identified under paragraph (1) as 
        unsuitable for timber production, no timber harvesting shall 
        occur on such lands for a period of 10 years or the life of the 
        plan, whichever is greater.
            ``(6) Definitions.--For purposes of this subsection:
                    ``(A) The term `standing timber' means an existing 
                stand of timber that has not been harvested.
                    ``(B) The term `subsequent timber stand' means a 
                regenerated stand of timber produced on land from which 
                standing timber has been harvested.''.

SEC. 234. REDUCTION IN MAXIMUM AMOUNT OF PAYMENTS UNDER AGRICULTURAL 
              ASSISTANCE PROGRAMS TO REFLECT RECEIPT OF FEDERAL 
              IRRIGATION WATER.

    (a) Price Support Programs.--Title X of the Food Security Act of 
1985 is amended--
            (1) by redesignating sections 1001D (7 U.S.C. 1308-4) and 
        1001E (7 U.S.C. 1308-5) as sections 1001E and 1001F, 
        respectively; and
            (2) by inserting after section 1001C (7 U.S.C. 1308-3) the 
        following new section:

``SEC. 1001D. REDUCTION OF PAYMENT LIMITATIONS TO REFLECT RECEIPT OF 
              FEDERAL IRRIGATION WATER.

    ``(a) Reduction of Payment Limitations Required.--If a person 
subject to section 1001 receives Federal irrigation water for 
agricultural purposes from the operation of a Federal reclamation 
project, the payment limitations specified in paragraphs (1) and (2) of 
such section and applicable to such person shall be reduced for the 
year in which such person receives irrigation water. The amount of the 
reduction shall be equal to the total value during that year of the 
subsidy portion of the contract with such person for the delivery of 
the irrigation water.
    ``(b) Determination of Subsidy Portion of Water Contract.--The 
subsidy portion of an irrigation water delivery contract is equal to 
the amount by which full cost for the delivery of the irrigation water 
exceeds the actual contract price for the delivery of the water.
    ``(c) Definitions.--For purposes of this section, the terms 
`contract', `full cost', `irrigation water', and `project' have the 
meanings given such terms in section 202 of the Reclamation Reform Act 
of 1982 (43 U.S.C. 390bb).''.
    (b) Noninsured Crop Disaster Assistance.--Section 196(i) of the 
Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. 
7333(i)) is amended--
            (1) by redesignating paragraph (5) as paragraph (6); and
            (2) by inserting after paragraph (4) the following new 
        paragraph:
            ``(5) Effect of receipt of irrigation water.--
                    ``(A) Reduction of payment limitation.--If a person 
                who receives payments under this section also receives, 
                during the same year, Federal irrigation water for 
                agricultural purposes from the operation of a Federal 
                reclamation project, the payment limitation specified 
                in paragraph (2) for such person shall be reduced for 
that year. The amount of the reduction shall be equal to the total 
value during that year of the subsidy portion of the contract with such 
person for the delivery of the irrigation water.
                    ``(B) Determination of subsidy portion of water 
                contract.--The subsidy portion of an irrigation water 
                delivery contract is equal to the amount by which full 
                cost for the delivery of the irrigation water exceeds 
                the actual contract price for the delivery of the 
                water.
                    ``(C) Definitions.--For purposes of this paragraph, 
                the terms `contract', `full cost', `irrigation water', 
                and `project' have the meanings given such terms in 
                section 202 of the Reclamation Reform Act of 1982 (43 
                U.S.C. 390bb).''.
    (c) Conforming Amendments.--Section 1001(5)(A) of the Food Security 
Act of 1985 (7 U.S.C. 1308(5)(A)) is amended by striking ``through 
1001C'' and inserting ``through 1001D''.

SEC. 235. ELIMINATION OF OFF BUDGET EXPENDITURES.

    (a) Knutson-Vandenberg Fund.--Section 3 of the Act of June 9, 1930 
(commonly known as the Knutson-Vandenberg Act; 16 U.S.C. 576b), is 
amended by striking ``and shall constitute a special fund, which is 
hereby appropriated and made available until expended,'' in the second 
sentence and inserting ``and are authorized to be appropriated''.
    (b) Deposits From Brush Disposal.--The paragraph relating to 
deposits from brush disposal under the heading ``forest service'' in 
the Act of August 11, 1916 (39 Stat. 462; 16 U.S.C. 490), is amended by 
striking ``and constitute a special fund, which is hereby appropriated 
and shall remain available until expended'' and inserting ``and are 
authorized to be appropriated for the purpose of disposing of such 
brush and other debris''.
    (c) National Forests Roads and Trails.--(1) Section 6 of Public Law 
88-657 (commonly known as the Forest Roads and Trails Act; 16 U.S.C. 
537) is amended by striking ``are hereby made available until 
expended'' and inserting ``are authorized to be appropriated''.
    (2) The fourteenth paragraph under the heading ``FOREST SERVICE'' 
of the Act of March 4, 1913 (37 Stat. 843; 16 U.S.C. 501), is amended 
by striking ``shall be available at the end thereof, to be expended 
by'' and inserting ``are authorized to be appropriated to''.
    (d) Reforestation Trust Fund.--Section 303(d) of Public Law 96-451 
(16 U.S.C. 1606a) is amended by striking ``The Secretary of 
Agriculture'' and inserting ``In such amounts as are provided in 
advance in appropriations Acts, the Secretary of Agriculture''.
    (e) Timber Salvage Sale Fund.--Section 14(h) of the National Forest 
Management Act of 1976 (16 U.S.C. 472a(h) is amended by striking ``are 
to be available'' and inserting ``are authorized to be appropriated''.
    (f) Cooperative Work-Other Fund.--The penultimate paragraph under 
the heading ``FOREST SERVICE'' in the Act of June 30, 1914 (38 Stat. 
430; 16 U.S.C. 498), is amended by striking ``which is hereby 
appropriated and made available until expended, as the Secretary of 
Agriculture may direct,'' and inserting ``from which funds are 
authorized to be appropriated to the Secretary of Agriculture''.

SEC. 236. DEPOSIT OF TAYLOR GRAZING ACT RECEIPTS IN TREASURY.

    Section 10 of the Act of June 28, 1934 (commonly known as the 
Taylor Grazing Act; 43 U.S.C. 315i), is amended by striking all after 
``miscellaneous receipts'' and inserting a period.

SEC. 237. REPEAL OF LIVESTOCK FEED ASSISTANCE PROGRAM.

    The Emergency Livestock Feed Assistance Act of 1988 (title VI of 
the Agricultural Act of 1949; 7 U.S.C. 1471-1471j) is repealed.

SEC. 238. OIL AND GAS RENTALS.

    The Mineral Leasing Act (30 U.S.C. 181 et seq.) is amended as 
follows:
            (1) In section 14 by striking ``a rental of $1 per acre'' 
        and inserting ``a rental established by the Secretary of the 
        Interior'' and by adding the following at the end thereof: 
        ``The Secretary shall establish fair market value rental fees 
        under this section based upon the rental fees which would be 
        charged in arm's length transactions for comparable leases of 
        oil and gas resources on non-Federal land.''.
            (2) In section 17(d) by striking ``rental of not less than 
        $1.50 per acre per year for the first through fifth years of 
        the lease and not less than $2 per acre per year for each year 
        thereafter'' and inserting ``rental established by the 
        Secretary of the Interior'' and by adding the following at the 
        end thereof: ``The Secretary shall establish fair market value 
        rental fees under this section based upon the rental fees which 
would be charged in arms length transactions for comparable leases of 
oil and gas resources on non-Federal land.''.
            (3) In section 21(a) by striking ``rental, payable at the 
        beginning of each year, at the rate of 50 cents per acre per 
        annum, for the lands included in the lease,'' and inserting 
        ``rental established by the Secretary of the Interior'' and by 
        adding the following at the end thereof: ``The Secretary shall 
        establish fair market value rental fees under this section 
        based upon the rental fees which would be charged in arms 
        length transactions for comparable leases on non-Federal 
        land.''.
            (4) In section 31(e)(2) by striking ``rate of not less than 
        $10 per acre per year, or the inclusion in a reinstated lease 
        issued pursuant to the provisions of section 17(c) of this Act 
        of a requirement that future rentals shall be at a rate not 
        less than $5 per acre per year'' and inserting ``fair market 
        value rate (but not less than $10 per acre per year)''.
            (5) In section 31(f)(3) by striking ``of not less than $5 
        per acre per year'' and inserting ``established by the 
        Secretary at fair market value based upon the rental fees which 
        would be charged in arms length transactions for comparable 
        leases on non-Federal land''.

SEC. 239. COMMUNICATION PERMITS.

    (a) In General.--No permit, lease, or authorization for the use of 
any area of the public lands or National Forests for communication 
uses, including but not limited to radio and television broadcast, 
mobile radio, cellular telephone, or microwave relay facilities, shall 
remain in force and effect after October 1, 1999, unless, by such date, 
and by October 1 of each year thereafter, the holder of such permit, 
lease, or authorization pays to the Secretary of the Interior or the 
Secretary of Agriculture, as appropriate, an amount equal to the fair 
market value, as determined by such Secretary, of the right to use and 
occupy such area for such communication uses.
    (b) Definition.--For the purposes of this section, the term 
``public lands'' shall have the same meaning as defined in section 
103(e) of the Federal Land Policy Management Act of 1976 (43 U.S.C. 
1702(e)).
                                 <all>
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