‘‘(B) amounts representing long-term cap-
ital losses (as defined in such section) on assets
held in the fund.’’.
(2) Subparagraph (B) of section 7518(d)(4) of
such Code is amended to read as follows:
‘‘(B)(i) amounts representing short-term
capital gains (as defined in section 1222) on as-
sets referred to in subsection (a)(1)(C), reduced
by
‘‘(ii) amounts representing short-term cap-
ital losses (as defined in such section) on assets
held in the fund,’’.
(3) Subparagraph (B) of section 7518(g)(3) of
such Code is amended by striking ‘‘gain’’ and all
that follows and inserting ‘‘long-term capital gain
(as defined in section 1222), and’’.
(4) The last sentence of subparagraph (A) of
section 7518(g)(6) of such Code is amended by
striking ‘‘20 percent (34 percent in the case of a
corporation)’’ and inserting ‘‘the rate applicable to
net capital gain under such section 1(h) or 1201(a),
as the case may be’’.
(d) COMPUTATION OF INTEREST WITH RESPECT TO
NONQUALIFIED WITHDRAWALS.—
(1) Subparagraph (C) of section 7518(g)(3) of
such Code is amended—
(A) by striking clause (i) and inserting the
following new clause:
‘‘(i) no addition to the tax shall be
payable under section 6651,’’, and
(B) by striking ‘‘paid as the applicable rate
(as defined in paragraph (4))’’ in clause (ii) and
inserting ‘‘paid in accordance with section
6601’’.
(2) Subsection (g) of section 7518 of such Code
is amended by striking paragraph (4) and by redes-
ignating paragraphs (5) and (6) as paragraphs (4)
and (5), respectively.
(3) Subparagraph (A) of section 7518(g)(5) of
such Code, as redesignated by paragraph (2) of this
subsection, is amended by striking ‘‘paragraph (5)’’
and inserting ‘‘paragraph (4)’’.
(e) OTHER CHANGES.—
(1) Paragraph (2) of section 7518(b) of such
Code is amended by striking ‘‘interest-bearing secu-
rities approved by the Secretary’’ and inserting ‘‘in-
terest-bearing securities and other income-producing
assets (including amounts receivable) approved by
the Secretary’’.
(2) Paragraph (1) of section 7518(e) of such
Code is amended by striking the last sentence.
(3) Subsection (i) of section 7518 of such Code
is amended by striking ‘‘enactment of this section’’
and inserting ‘‘enactment of the All American Cruise
Act of 1999’’.
(4) Subparagraph (B) of section 543(a)(1) of
such Code is amended to read as follows:
‘‘(B) interest on amounts set aside in a
capital construction fund under section 607 of
the Merchant Marine Act, 1936 (46 App.
U.S.C. 1177), or in a construction reserve fund
under section 511 of such Act (46 App. U.S.C.
1161).’’
(5) Subsection (c) of section 56 is amended by
striking paragraph (2) and by redesignating para-
graph (3) as paragraph (2).
SEC. 203. EFFECTIVE DATE.
(a) IN GENERAL.—Except as otherwise provided in
this section, the amendments made by this title shall apply
to taxable years beginning after the date of the enactment
of this Act.
(b) CHANGES IN COMPUTATION OF INTEREST.—The
amendments made by sections 201(e) and 202(d) shall
apply to withdrawals made after December 31, 1999, in-
cluding for purposes of computing interest on such a with-
drawal for periods on or before such date.
(c) QUALIFIED LEASES.—The amendments made by
sections 201(b) and 202(a) shall apply to leases in effect
on, or entered into after, December 31, 1999.
TITLE III—DOMESTIC CRUISE
INDUSTRY PHASE-IN
SEC. 301. DEFINITIONS.
In this title:
(1) CRUISE
SHIP.—The term ‘‘cruise ship’’
means a passenger vessel as defined in section 2101
of title 46, United States Code, that is at least
20,000 gross tons and provides a full range of over-
night accommodations, entertainment, dining, and
other services for its passengers.
(2) OWNER OR OPERATOR.—The term ‘‘owner
or operator’’ means, in the case of a vessel, a person
owning or operating the vessel, or chartering the
vessel by demise.
(3) PERSON.—The term ‘‘person’’ means a cor-
poration, partnership, association, or individual.
(4) RELATED PERSON.—The term ‘‘related per-
son’’ means a person that is—
(A) a holding company, subsidiary, affil-
iate, or association of another person; or
(B) an officer, director, or agent of an-
other person.
(5) SECRETARY.—The term ‘‘Secretary’’ means
the Secretary of Transportation.
SEC. 302. TEMPORARY DOCUMENTATION FOR FOREIGN-
BUILT CRUISE SHIP.
(a) IN GENERAL.—Notwithstanding the provisions of
section 8 of the Act of June 19, 1886 (46 U.S.C. App.
289), and chapter 121 of title 46, United States Code,
the Secretary may issue a certificate of documentation,
with a conditional coastwise trade endorsement, to a for-
eign-built cruise ship that is otherwise in compliance with
section 27 of the Merchant Marine Act, 1920 (46 U.S.C.
App. 883), and section 12106 of title 46, United States
Code, only if the Secretary, based on information provided
by the owner or operator of the cruise ship, determines
that—
(1) the owner or operator, or a related person,
is obligated under a binding contract to construct in
the United States 2 or more cruise ships of a size
equal to or greater than the cruise ship being con-
sidered for documentation;
(2) the contract provides that the first cruise
ship to be constructed be delivered no later than 4
years after the contract is entered into, and that the
or in any manner transfer, to a person that is not
a citizen of the United States, any interest in or
control of a foreign-built cruise ship documented
under subsection (a) of this section; or
(2) place that cruise ship under foreign registry
or operate that ship under the authority of a foreign
country.
SEC. 303. PERMIT REQUIRED FOR FOREIGN-BUILT CRUISE
SHIPS.
(a) IN GENERAL.—A foreign-built cruise ship docu-
mented under section 302 shall not operate in coastwise
trade unless the owner or operator holds a permit issued
by the Secretary that authorizes the ship to transport pas-
sengers on itineraries between ports of the United States
or between a port of the United States and a foreign port.
(b) EXCLUSIONS.—A permit issued under this section
shall prohibit the cruise ship from—
(1) operating as a ferry;
(2) regularly carrying for hire vehicles or other
cargo; or
(3) operating between or among islands or
other points in the State of Hawaii.
(c) EXPIRATION.—The permit shall expire on the ex-
piration date specified on the certificate of documentation
issued for the cruise ship involved, and the expiration date
shall be printed on the face of the permit.
(d) PENALTY.—A person who fails to comply with the
terms and conditions of a permit issued under this section,
or operates a foreign-built cruise ship in the coastwise
trade without such a permit, is liable to the United States
Government for a civil penalty of not more than $10,000.
Each day of a continuing violation is a separate violation.
SEC. 304. REVOCATION OF COASTWISE TRADE ENDORSE-
MENT AND PERMIT.
The Secretary shall revoke both the coastwise trade
endorsement issued under section 302, and the permit
issued under section 303, if the Secretary determines that
the owner or operator of the cruise ship involved is not
in substantial compliance with the terms and conditions
of—
(1) the ship construction contract that was the
basis for issuance of documentation under section
302; or
(2) the permit issued under section 303.
SEC. 305. APPLICATION TO OTHER PROVISIONS OF LAW.
Nothing in this title affects or otherwise modifies the
authority contained in and granted to a person by section
8109 of the Department of Defense Appropriations Act,
1998 (Public Law 105–56; 111 Stat. 1244).
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