I

105TH CONGRESS

1ST SESSION H. R. 878

To amend the Internal Revenue Code of 1986 to increase the amount of

employer-provided transit passes excludable from income and require

a cash-out option to excludable parking fringe benefits, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 27, 1997

Mr. LEWIS of Georgia (for himself, Mr. BLUMENAUER, Mr. FOX of Pennsylvania, Mr. SERRANO, Mr. MATSUI, Mr. CUMMINGS, Mr. GUTIERREZ, Mr.

MCDERMOTT, Ms. NORTON, Mr. MCGOVERN, Mr. DELLUMS, Ms. ESHOO,

Mr. BONIOR, Ms. JACKSON-LEE of Texas, Mr. BORSKI, Mr. OLVER, Mr.

OBERSTAR, Mr. PASTOR, and Mr. JACKSON of Illinois) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to increase

the amount of employer-provided transit passes excludable from income and require a cash-out option to excludable parking fringe benefits, and for other purposes.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Commuter Choice

5 Act’’.
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1 SEC. 2. INCREASE IN AMOUNT OF TRANSIT PASSES AND

2 COMMUTER HIGHWAY VEHICLE TRANSPOR3 TATION EXCLUDABLE FROM GROSS INCOME.

4 (a) IN GENERAL.—Paragraph (2) of section

5 132(f)(2) of the Internal Revenue Code of 1986 is amend6 ed—

7 (1) in subparagraph (A), by striking ‘‘$60’’ and

8 inserting ‘‘$170’’, and

9 (2) in subparagraph (B), by striking ‘‘$155’’

10 and inserting ‘‘$170’’.

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

12 subsection (a) shall apply to months beginning after the

13 date which is 6 months after the date of the enactment

14 of this Act.

15 SEC. 3. CASH-OUT OPTION REQUIREMENT.

16 (a) IN GENERAL.—Subsection (f) of section 132 of

17 the Internal Revenue Code of 1986 (relating to qualified

18 transportation fringe) is amended by redesignating para19 graphs (4) through (7) as paragraphs (5) through (8), re20 spectively, and by inserting after paragraph (3) the follow21 ing new paragraph:

22 ‘‘(4) CASH-OUT OPTION REQUIREMENT.—

23 ‘‘(A) IN GENERAL.—No amount may be

24 excluded from gross income under subsection

25 (a)(5) with respect to any qualified parking pro26 vided to any employee during any month unless
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1 the employer provides that each employee of

2 such employer may elect to receive a qualified

3 cash-out payment for such month.

4 ‘‘(B) QUALIFIED CASH-OUT PAYMENT.—

5 The term ‘qualified cash-out payment’ means a

6 payment, by the employer to an employee of the

7 employer, which meets each of the following re8 quirements:

9 ‘‘(i) Such payment is not less than

10 $15 per month.

11 ‘‘(ii) Such payment is in lieu of quali12 fied transportation fringe for the month

13 but is not in lieu of any other compensa14 tion or benefit.

15 ‘‘(iii) All employees of the employer

16 are given reasonable notice of the availabil17 ity of such payment.

18 ‘‘(C) NO INCLUSION BY REASON OF CASH19 OUT AVAILABILITY.—In the case of an employee

20 electing to receive a qualified transportation

21 fringe in lieu of a qualified cash-out payment,

22 no amount shall be included in gross income

23 with respect to such qualified transportation

24 fringe solely by reason of the availability of

25 such qualified cash-out payment.’’
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1 (b) CONFORMING AMENDMENTS.—

2 (1) Paragraph (5) of section 132(f) (relating to

3 benefit not in lieu of compensation), as redesignated

4 by subsection (a), is amended by inserting ‘‘de5 scribed in subparagraph (A) or (B) of paragraph

6 (1)’’ after ‘‘qualified transportation fringe’’.

7 (2) Paragraph (8) of section 132(f) (relating to

8 coordination with other provisions), as redesignated

9 by subsection (a), is amended by striking ‘‘para10 graph (2)’’ and inserting ‘‘paragraphs (2) and (4)’’.

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

12 this section shall apply to months beginning after the date

13 which is 6 months after the date of the enactment of this

14 Act.

15 SEC. 4. 5-YEAR FREEZE IN INFLATION ADJUSTMENT OF

16 QUALIFIED TRANSPORTATION FRINGE.

17 (a) IN GENERAL.—Paragraph (7) of section 132(f)

18 of the Internal Revenue Code of 1986 (as redesignated

19 by section 3) is amended to read as follows:

20 ‘‘(7) INFLATION ADJUSTMENT FOR YEARS

21 AFTER 2002.—In the case of any taxable year begin22 ning in a calendar year after 2002, the dollar

23 amounts contained in paragraph (2) (A) and (B)

24 and the dollar amount contained in paragraph
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1 (4)(B)(i) shall each be increased by an amount equal

2 to—

3 ‘‘(A) such dollar amount, multiplied by

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar

6 year in which the taxable year begins, deter7 mined by substituting ‘calendar year 2001’ for

8 ‘calendar year 1992’ in subparagraph (B)

9 thereof.

10 If any increase determined under the preceding sen11 tence is not a multiple of $5, such increase shall be

12 rounded to the next lowest multiple of $5.’’

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

14 subsection (a) shall apply to taxable years beginning after

15 the date of the enactment of this Act.

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