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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3999 Introduced in House (IH)]

104th CONGRESS
  2d Session
                                H. R. 3999

     To ensure that the States have sufficient funds to assure the 
 effectiveness of the work requirements of the program of block grants 
  for temporary assistance for needy families, to provide such funds 
              through tax reforms, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             August 2, 1996

  Mr. Obey  introduced the following bill; which was referred to the 
    Committee on Ways and Means and in addition to the Committee on 
Science, 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 ensure that the States have sufficient funds to assure the 
 effectiveness of the work requirements of the program of block grants 
  for temporary assistance for needy families, to provide such funds 
              through tax reforms, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Making Work Requirements Work Act of 
1996''.

        TITLE I--GRANTS TO STATES FOR OPERATION OF WORK PROGRAMS

SEC. 101. GRANTS TO STATES FOR OPERATION OF WORK PROGRAMS.

    (a) In General.--Section 403(a) of the Social Security Act, as 
amended by the Personal Responsibility and Work Opportunity 
Reconciliation Act of 1996, is amended by adding at the end the 
following:
            ``(5) Supplemental grant for operation of work program.--
                    ``(A) Grants.--Each eligible State shall be 
                entitled to receive from the Secretary for each of 
                fiscal years 1997 through 2002 a grant for the purpose 
                of enabling the State to comply with section 407.
                    ``(B) Amount of grant.--The amount of the grant to 
                be made to a State for any fiscal year under 
                subparagraph (A) shall be the amount that bears the 
                same ratio to the amount specified in subparagraph (C) 
                for the fiscal year as the number of families that the 
                Secretary estimates will be eligible to receive 
                assistance during the fiscal year under the State 
                program funded under this part that include an adult or 
                a minor child head of household who may be required to 
                engage in work pursuant to section 407 bears to the 
                number of such families that the Secretary estimates 
                will be eligible to receive assistance during the 
                fiscal year under all State programs funded under this 
                part.
                    ``(C) Appropriations.--
                            ``(i) In general.--Out of any money in the 
                        Treasury of the United States not otherwise 
                        appropriated, there are appropriated for grants 
                        under this paragraph--
                                    ``(I) $178,000,000 for fiscal year 
                                1997;
                                    ``(II) $283,000,000 for fiscal year 
                                1998;
                                    ``(III) $898,000,000 for fiscal 
                                year 1999;
                                    ``(IV) $1,260,000,000 for fiscal 
                                year 2000;
                                    ``(V) $1,622,000,000 for fiscal 
                                year 2001; and
                                    ``(VI) $2,033,000,000 for fiscal 
                                year 2002.
                            ``(ii) Availability.--Amounts appropriated 
                        pursuant to clause (i) shall remain available 
                        until expended.''.
    (b) Effective Date.--The amendment made by subsection (a) of this 
section shall take effect as if included in section 103(a)(1) of the 
Personal Responsibility and Work Opportunity Reconciliation Act of 1996 
on the date of the enactment of such Act.

                       TITLE II--REVENUE OFFSETS

SEC. 200. AMENDMENT OF 1986 CODE; TABLE OF CONTENTS.

    (a) Amendment of 1986 Code.--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.
    (b) Table of Contents.--

                       TITLE II--REVENUE OFFSETS

Sec. 200. Amendment of 1986 Code; table of contents.
                     Subtitle A--Corporate Reforms

Sec. 201. Repeal of percentage depletion for certain nonfuel minerals 
                            mined on Federal lands.
                     Subtitle B--Foreign Provisions

Sec. 202. Definition of foreign personal holding company income.
Sec. 203. Modification to foreign tax credit carryback and carryover 
                            periods.
Sec. 204. Modifications of foreign tax credit rules applicable to dual 
                            capacity taxpayers.
Sec. 205. Rules relating to foreign oil and gas income.
                   Subtitle C--Accounting Provisions

Sec. 206. Termination of suspense accounts for family corporations 
                            required to use accrual method of 
                            accounting.

                     Subtitle A--Corporate Reforms

SEC. 201. REPEAL OF PERCENTAGE DEPLETION FOR CERTAIN NONFUEL MINERALS 
              MINED ON FEDERAL LANDS.

    (a) In General.--Section 613 (relating to percentage depletion) is 
amended by adding at the end the following new subsection:
    ``(f) Denial of Percentage Depletion for Certain Nonfuel Minerals 
Mined on Federal Lands.--
            ``(1) In general.--In the case of any applicable nonfuel 
        mineral, the allowance for depletion shall be computed without 
        reference to this section.
            ``(2) Applicable nonfuel mineral.--For purposes of this 
        subsection, the term `applicable nonfuel mineral' means any 
        mineral which--
                    ``(A) is subject to a mining claim under chapter 
                six of title XXXII of the Revised Statutes (commonly 
                referred to as the `General Mining Law of 1872', 30 
                U.S.C. 21 et seq.), or
                    ``(B) was originally acquired (whether or not by 
                the taxpayer) pursuant to a patent granted under such 
                chapter.''
    (b) Aggregation of Mineral Interests.--Paragraph (1) of section 
614(c) (relating to election to aggregate separate interests) is 
amended by adding at the end the following new sentence: ``A taxpayer 
may not elect to aggregate a separate operating mineral interest in any 
applicable nonfuel mineral (as defined in section 613(f)(2)) with an 
interest in a mineral other than such an applicable nonfuel mineral.''
    (c) Effective Dates.--
            (1) In general.--The amendments made by this section shall 
        apply to taxable years beginning after the date of the 
        enactment of this Act.
            (2) Special rule for aggregated mineral interests.--
                    (A) In general.--If, on or before March 19, 1996, a 
                taxpayer aggregated separate operating mineral 
                interests in applicable nonfuel minerals (as defined in 
                section 613(f)(2) of the Internal Revenue Code of 1986) 
                and in minerals other than such applicable nonfuel 
                minerals, the amendments made by this section shall not 
                apply to such property, except that the allowance for 
                depletion under section 613 of such Code for taxable 
                years beginning after the date of the enactment of this 
                Act, with respect to such property shall be equal to 
                the amount which bears the same ratio to such allowance 
                computed without regard to this paragraph as the--
                            (i) number of acres in such property with 
                        respect to interests in minerals other than 
                        applicable nonfuel minerals (as so defined), 
                        bears to
                            (ii) the total number of acres in such 
                        property.
                    (B) Election to terminate aggregation.--
                Subparagraph (A) shall not apply if a taxpayer elects, 
                at such time and in such manner as the Secretary of the 
                Treasury may prescribe, to terminate the election under 
                section 614(c) of such Code with respect to the 
                property described in subparagraph (A) for all taxable 
                years beginning after the date of the enactment of this 
                Act. In making such election, the taxpayer may elect to 
                aggregate interests in applicable nonfuel minerals and 
                other minerals separately.

                     Subtitle B--Foreign Provisions

SEC. 202. DEFINITION OF FOREIGN PERSONAL HOLDING COMPANY INCOME.

    (a) Income From Notional Principal Contracts.--
            (1) In general.--Paragraph (1) of section 954(c) (defining 
        foreign personal holding company income) is amended by adding 
        at the end the following new subparagraph:
                    ``(F) Income from notional principal contracts.--
                Net income from notional principal contracts. Any item 
                of income, gain, deduction, or loss from a notional 
                principal contract entered into for purposes of hedging 
                any item described in any preceding subparagraph shall 
                not be taken into account for purposes of this 
                subparagraph but shall be taken into account under such 
                other subparagraph.''
            (2) Exception for dealers.--Paragraph (2) of section 954(c) 
        is amended by adding at the end the following new subparagraph:
                    ``(C) Exception for dealers.--Except as provided in 
                subparagraph (A), (E), or (F) of paragraph (1) or by 
                regulations, in the case of a regular dealer in 
                property, forward contracts, option contracts, or 
                similar financial instruments (including notional 
                principal contracts), there shall not be taken into 
                account in computing foreign personal holding income 
                any item of income, gain, deduction, or loss from any 
                transaction (including hedging transactions) entered 
                into in the ordinary course of such dealer's trade or 
                business as such a dealer.''
            (3) Conforming amendment.--Subparagraph (B) of section 
        954(c)(1) is amended--
                    (A) by striking the second sentence, and
                    (B) by striking ``also'' in the last sentence.
    (b) Payments in Lieu of Dividends.--Paragraph (1) of section 
954(c), as amended by subsection (a), is amended by adding at the end 
the following new subparagraph:
                    ``(G) Payments in lieu of dividends.--Payments in 
                lieu of dividends which are made pursuant to an 
                agreement to which section 1058 applies.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 203. MODIFICATION TO FOREIGN TAX CREDIT CARRYBACK AND CARRYOVER 
              PERIODS.

    (a) In General.--Subsection (c) of section 904 (relating to 
limitation on credit) is amended--
            (1) by striking ``in the second preceding taxable year,'', 
        and
            (2) by striking ``or fifth'' and inserting ``fifth, sixth, 
        or seventh''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to credits arising in taxable years beginning after December 31, 
1996.

SEC. 204. MODIFICATIONS OF FOREIGN TAX CREDIT RULES APPLICABLE TO DUAL 
              CAPACITY TAXPAYERS.

    (a) In General.--Section 901 (relating to credit for taxes of 
foreign countries and of possessions of the United States) is amended 
by redesignating subsection (k) as subsection (l) and by inserting 
after subsection (j) the following new subsection:
    ``(k) Special Rules Relating to Dual Capacity Taxpayers.--
            ``(1) General rule.--Notwithstanding any other provision of 
        this chapter, any amount paid or accrued by a dual capacity 
        taxpayer to a foreign country or possession of the United 
        States for any period shall not be considered a tax--
                    ``(A) if, for such period, the foreign country or 
                possession does not impose a generally applicable 
                income tax, or
                    ``(B) to the extent such amount exceeds the amount 
                (determined in accordance with regulations) which--
                            ``(i) is paid by such dual capacity 
                        taxpayer pursuant to the generally applicable 
                        income tax imposed by the country or 
                        possession, or
                            ``(ii) would be paid if the generally 
                        applicable income tax imposed by the country or 
                        possession were applicable to such dual 
                        capacity taxpayer.
                Nothing in this paragraph shall be construed to imply 
                the proper treatment of any such amount not in excess 
                of the amount determined under subparagraph (B).
            ``(2) Dual capacity taxpayer.--For purposes of this 
        subsection, the term `dual capacity taxpayer' means, with 
        respect to any foreign country or possession of the United 
        States, a person who--
                    ``(A) is subject to a levy of such country or 
                possession, and
                    ``(B) receives (or will receive) directly or 
                indirectly a specific economic benefit (as determined 
                in accordance with regulations) from such country or 
                possession.
            ``(3) Generally applicable income tax.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `generally applicable 
                income tax' means an income tax (or a series of income 
                taxes) which is generally imposed under the laws of a 
                foreign country or possession on income derived from 
                the conduct of a trade or business within such country 
                or possession.
                    ``(B) Exceptions.--Such term shall not include a 
                tax unless it has substantial application, by its terms 
                and in practice, to--
                            ``(i) persons who are not dual capacity 
                        taxpayers, and
                            ``(ii) persons who are citizens or 
                        residents of the foreign country or 
                        possession.''
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to taxes paid or accrued in taxable years beginning after 
        the date of the enactment of this Act.
            (2) Contrary treaty obligations upheld.--The amendments 
        made by this section shall not apply to the extent contrary to 
        any treaty obligation of the United States.

SEC. 205. RULES RELATING TO FOREIGN OIL AND GAS INCOME.

    (a) Separate Basket for Foreign Tax Credit.--
            (1) In general.--Paragraph (1) of section 904(d) (relating 
        to separate application of section with respect to certain 
        categories of income) is amended by striking ``and'' at the end 
        of subparagraph (H), by redesignating subparagraph (I) as 
        subparagraph (J), and by inserting after subparagraph (H) the 
        following new subparagraph:
                    ``(I) foreign oil and gas income, and''.
            (2) Definition.--Paragraph (2) of section 904(d) is amended 
        by redesignating subparagraphs (H) and (I) as subparagraphs (I) 
        and (J), respectively, and by inserting after subparagraph (G) 
        the following new subparagraph:
                    ``(H) Foreign oil and gas income.--The term 
                `foreign oil and gas income' has the meaning given such 
                term by section 954(g).''
            (3) Conforming amendments.--
                    (A) Section 904(d)(3)(F)(i) is amended by striking 
                ``or (E)'' and inserting ``(E), or (I)''.
                    (B) Section 907(a) is hereby repealed.
                    (C) Section 907(c)(4) is hereby repealed.
                    (D) Section 907(f) is hereby repealed.
            (4) Effective dates.--
                    (A) In general.--The amendments made by this 
                section shall apply to taxable years beginning after 
                the date of the enactment of this Act.
                    (B) Transitional rules.--
                            (i) Separate basket treatment.--Any taxes 
                        paid or accrued in a taxable year beginning on 
                        or before the date of the enactment of this 
                        Act, with respect to income which was described 
                        in subparagraph (I) of section 904(d)(1) of 
                        such Code (as in effect on the day before the 
                        date of the enactment of this Act), shall be 
                        treated as taxes paid or accrued with respect 
                        to foreign oil and gas income to the extent the 
                        taxpayer establishes to the satisfaction of the 
                        Secretary of the Treasury that such taxes were 
                        paid or accrued with respect to foreign oil and 
                        gas income.
                            (ii) Carryovers.--Any unused oil and gas 
                        extraction taxes which under section 907(f) of 
                        such Code (as so in effect) would have been 
                        allowable as a carryover to the taxpayer's 
                        first taxable year beginning after the date of 
                        the enactment of this Act (without regard to 
                        the limitation of paragraph (2) of such section 
                        907(f) for first taxable year) shall be allowed 
                        as carryovers under section 904(c) of such Code 
                        in the same manner as if such taxes were unused 
                        taxes under such section 904(c) with respect to 
                        foreign oil and gas extraction income.
                            (iii) Losses.--The amendment made by 
                        paragraph (3)(C) shall not apply to foreign oil 
                        and gas extraction losses arising in taxable 
                        years beginning on or before the date of the 
                        enactment of this Act.
    (b) Elimination of Deferral for Foreign Oil and Gas Extraction 
Income.--
            (1) General rule.--Paragraph (1) of section 954(g) 
        (defining foreign base company oil related income) is amended 
        to read as follows:
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `foreign oil and gas income' means any 
        income of a kind which would be taken into account in 
        determining the amount of--
                    ``(A) foreign oil and gas extraction income (as 
                defined in section 907(c)), or
                    ``(B) foreign oil related income (as defined in 
                section 907(c)).''
            (2) Conforming amendments.--
                    (A) Subsections (a)(5), (b)(5), and (b)(8) of 
                section 954 are each amended by striking ``base company 
                oil related income'' each place it appears (including 
                in the heading of subsection (b)(8)) and inserting 
                ``oil and gas income''.
                    (B) Subsection (b)(4) of section 954 is amended by 
                striking ``base company oil-related income'' and 
                inserting ``oil and gas income''.
                    (C) The subsection heading for subsection (g) of 
                section 954 is amended by striking ``Foreign Base 
                Company Oil Related Income'' and inserting ``Foreign 
                Oil and Gas Income''.
                    (D) Subparagraph (A) of section 954(g)(2) is 
                amended by striking ``foreign base company oil related 
                income'' and inserting ``foreign oil and gas income''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years of foreign corporations beginning 
        after the date of the enactment of this Act, and to taxable 
        years of United States shareholders ending with or within such 
        taxable years of foreign corporations.

                   Subtitle C--Accounting Provisions

SEC. 206. TERMINATION OF SUSPENSE ACCOUNTS FOR FAMILY CORPORATIONS 
              REQUIRED TO USE ACCRUAL METHOD OF ACCOUNTING.

    (a) In General.--Subsection (i) of section 447 (relating to method 
of accounting for corporations engaged in farming) is amended by adding 
at the end the following new paragraph:
            ``(7) Termination.--
                    ``(A) In general.--No suspense account may be 
                established under this subsection by any corporation 
                required by this section to change its method of 
                accounting for any taxable year ending after September 
                13, 1996.
                    ``(B) 10-year phaseout of existing suspense 
                accounts.--Each suspense account under this subsection 
                shall be reduced (but not below zero) for each of the 
                first 10 taxable years beginning after September 13, 
                1995, by an amount equal to the applicable portion of 
                such account. Any reduction in a suspense account under 
                this paragraph shall be included in gross income for 
                the taxable year of the reduction. The amount of the 
                reduction required under this paragraph for any taxable 
                year shall be reduced (but not below zero) by the 
                amount of any reduction required for such taxable year 
                under any other provision of this subsection.
                    ``(C) Applicable portion.--For purposes of 
                subparagraph (B), the term `applicable portion' means, 
                for any taxable year, the amount which would ratably 
                reduce the amount in the account (after taking into 
                account prior reductions) to zero over the period 
                consisting of such taxable year and the remaining 
                taxable years in such first 10 taxable years.''
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after September 13, 1996.

   TITLE III--REPEAL OF PROTOTYPE DEMONSTRATION OF ADVANCED NUCLEAR 
                           REACTOR TECHNOLOGY

    Sec. 301. Sections 13493, 13494, and 13495 of the Energy Policy Act 
of 1992, Public Law 102-486, part C, 42 U.S.C. 13493, 13494, and 13495) 
are hereby repealed.
                                <all>
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