I
103D CONGRESS
2D SESSION
H. R. 3822
To amend the Merchant Marine Act, 1936, and the Internal Revenue Code
of 1986 to promote construction and operation of passenger vessels
in the United States, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 9, 1994
Mrs. UNSOELD (for herself, Mr. STUDDS, Mr. LIPINSKI, Mr. DICKS, Ms.
CANTWELL, Ms. DUNN, Mr. KRIEDLER, Mr. SWIFT, Mr. MANTON, Mr.
BORSKI, Mr. HOYER, Mr. CUNNINGHAM, and Mr. JOHNSON of South Da-
kota) introduced the following bill; which was referred jointly to the Com-
mittees on Merchant Marine and Fisheries and Ways and Means
A BILL
To amend the Merchant Marine Act, 1936, and the Internal
Revenue Code of 1986 to promote construction and oper-
ation of passenger vessels in the United States, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘United States Pas-
senger Vessel Development Tax Act’’.
SEC. 2. PURPOSE.
The purpose of this Act is to provide measures to en-
courage investment in new passenger vessels documented
under the laws of the United States.
SEC. 3. CHANGES TO CAPITAL CONSTRUCTION FUND.
(a) EXPANDING THE CCF PROGRAM TO PASSENGER
VESSELS IN DOMESTIC TRADES.—
(1) Paragraph (2) of section 607(k) of the Mer-
chant Marine Act, 1936 (46 App. U.S.C. 1177) is
amended by adding at the end thereof the following
new flush sentence:
‘‘In the case of a passenger vessel, subparagraph (C)
(and the second sentence of subsection (a)) shall be
treated as including a reference to all domestic
trades.’’
(2) Paragraph (1) of section 607(k) of such Act
(defining eligible vessel) is amended by adding at the
end the following: ‘‘For purposes of subparagraph
(B), documentation under section 12113 of title 46,
United States Code (as added by H.R. 3821 of the
103d Congress), shall be treated as documentation
under the laws of the United States.’’
(b) TREATMENT OF FUND EARNINGS.—
(1) Section 607 of such Act is amended by add-
ing at the end thereof the following new subsection:
‘‘(n) TAXATION OF EARNINGS ON INVESTMENTS IN
CERTAIN FUNDS.—
‘‘(1) IN GENERAL.—In the case of a capital
construction fund to which this subsection applies,
the tax imposed by chapter 1 of the Internal Reve-
nue Code of 1986 shall be determined—
‘‘(A) by excluding from gross income the
taxable earnings from the investment and rein-
vestment of amounts held in such capital con-
struction fund, and
‘‘(B) by increasing the tax imposed by
such chapter by the product of the amount of
such taxable earnings and the highest rate of
tax specified in section 1 (section 11 in the case
of a corporation) of such Code.
‘‘(2) MAXIMUM RATE ON CAPITAL GAINS.—If
there is a net capital gain on amounts held in a cap-
ital construction fund to which this subsection ap-
plies, the rate of tax taken into account under para-
graph (1)(B) with respect to such gain shall not ex-
ceed the rate applicable to net capital gain under
section 1(h) or 1201(a) of such Code, as the case
may be.
‘‘(3) FUNDS
TO
WHICH
SUBSECTION
AP-
PLIES.—This subsection shall apply to any capital
construction fund into which amounts are deposited
by reason of the operation of a passenger vessel.
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING
LOSSES.—Any earnings excluded
from gross income under paragraph (1) shall be ex-
cluded in determining taxable income under section
172(b)(2) of such Code.
‘‘(5) TAXABLE
EARNINGS.—For purposes of
this section, the term ‘taxable earnings’ means net
earnings determined with the following modifica-
tions:
‘‘(A) There shall be excluded interest in-
come exempt from taxation under section 103
of such Code.
‘‘(B) If the person maintaining the fund is
a corporation, there shall be excluded the per-
centage applicable under section 243(a)(1) of
such Code of any dividend received by the fund
with respect to which such person would (but
for paragraph (1)(A)) be allowed a deduction
under section 243 of such Code.
‘‘(C) Losses from the sale or exchange of
capital assets shall be allowed only to the extent
of gains from such sales or exchanges.
‘‘(D) There shall be excluded—
‘‘(i) earnings on amounts deposited in
the fund which are attributable to vessels
documented under the laws of the United
States for operation in the fisheries of the
United States, and
‘‘(ii) earnings on earnings described in
clause (i).’’
(2) Subparagraph (D) of section 607(b)(1) of
such Act is amended by inserting ‘‘reduced by the
tax (if any) imposed on such receipts under sub-
section (n)’’ after ‘‘in such fund’’.
(3) Subparagraph (C) of section 607(d)(1) of
such Act is amended by inserting ‘‘except as pro-
vided in subsection (n),’’ before ‘‘the earnings’’.
(4) Paragraph (2) of section 607(e) of such Act
is amended by striking ‘‘and’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, and’’, and by adding
at the end thereof the following new subparagraph:
‘‘(E) in the case of any capital construc-
tion fund to which subsection (n) applies, the
taxable earnings (as defined in such subsection)
of such fund.’’
(5) Paragraph (3) of section 607(e) of such Act
is amended by adding at the end thereof the follow-
ing new flush sentence:
‘‘In the case of any capital construction fund to
which subsection (n) applies, the taxable earnings
(as defined in such subsection) of such fund shall
not be taken into account under this paragraph.’’
(6) Paragraph (4) of section 607(e) of such Act
is amended by adding at the end thereof the follow-
ing new flush sentence:
‘‘In the case of any capital construction fund to
which subsection (n) applies, the taxable earnings
(as defined in such subsection) of such fund shall
not be taken into account under subparagraph (B),
and subparagraphs (C) and (E) shall not apply.’’
(7) Paragraph (1) of section 607(f) of such Act
is amended by striking ‘‘or’’ at the end of subpara-
graph (B), by striking the period at the end of sub-
paragraph (C) and inserting ‘‘, or’’, and by inserting
after subparagraph (C) the following new subpara-
graph:
‘‘(D) the payment of the tax (if any) im-
posed by subsection (n).’’
(c) TREATMENT OF CERTAIN LEASE PAYMENTS.—
(1) Paragraph (1) of section 607(f) of such Act
is amended by striking ‘‘or’’ at the end of subpara-
graph (C), by striking the period at the end of sub-
paragraph (D) and inserting ‘‘, or’’, and by inserting
after subparagraph (D) the following new subpara-
graph:
‘‘(E) the payment of amounts which reduce
the principal amount (as determined under reg-
ulations) of a qualified lease of a passenger ves-
sel which is a qualified vessel.’’
(2) Paragraph (4) of section 607(g) of such Act
is amended by inserting ‘‘(or to reduce the principal
amount of any qualified lease a passenger vessel
which is a qualified vessel)’’ after ‘‘indebtedness’’.
(3) Subsection (k) of section 607 of such Act
is amended by adding at the end thereof the follow-
ing new paragraph:
‘‘(10) The term ‘qualified lease’ means any
lease with a term of at least 5 years.’’
(d) COMPUTATION OF INTEREST WITH RESPECT TO
NONQUALIFIED WITHDRAWALS.—Paragraph (3) of sec-
tion 607(h) of such Act is amended by adding at the end
the following flush sentence:
‘‘In the case of a withdrawal from a fund to which
subsection (n) applies, in lieu of applying subpara-
graph (C), no addition to the tax shall be payable
under section 6651 of such Code and interest on the
amount of the additional tax attributable to any
item referred to in subparagraph (A) or (B) shall be
paid in accordance with section 6601 of such Code.’’
(e) PASSENGER VESSEL DESIGN AND ENGINEERING
COSTS MAY BE PAID FROM FUNDS.—Paragraph (1) of
section 607(f) of such Act is further amended by striking
‘‘or’’ at the end of subparagraph (D), by striking the pe-
riod at the end of subparagraph (E) and inserting ‘‘, or’’,
and by inserting after subparagraph (E) the following new
subparagraph:
‘‘(F) the design and engineering of any
construction or reconstruction of a qualified
vessel which is a passenger vessel.’’
(f) EXPANSION OF PERMITTED INVESTMENTS BY
PASSENGER VESSEL FUNDS.—Subsection (c) of section
607 of such Act is amended by inserting ‘‘(and, in the
case of a fund to which subsection (n) applies, other in-
come-producing assets (including accounts receivable)’’
after ‘‘interest-bearing securities’’.
(g) WITHDRAWALS PERMITTED FOR CERTAIN PRIOR
EXPENDITURES.—Paragraph (1) of section 607(f) of such
Act is further amended by striking ‘‘or’’ at the end of sub-
paragraph (E), by striking the period at the end of sub-
paragraph (F) and inserting ‘‘, or’’, and by inserting after
subparagraph (F) the following new subparagraph:
‘‘(G) the reimbursement of the person
maintaining the fund for amounts expended by
such person in the reconstruction of any vessel
for which an interim certificate of documenta-
tion was issued under section 12113 of title 46,
United States Code (as added by H.R. 3821 of
the 103d Congress).’’
(h) AMOUNTS IN CAPITAL CONSTRUCTION FUND BY
REASON OF INTERIM CERTIFICATE VESSEL REQUIRED
TO BE COMMITTED TO CONSTRUCTION OF NEW QUALI-
FIED VESSEL.—Section 607 of the Merchant Marine Act,
1936, is amended by adding at the end the following new
subsection:
‘‘(o) TAX ON INTERIM CERTIFICATE VESSEL DEPOS-
ITS IN FUND WHICH ARE NOT COMMITTED TO NEW
CONSTRUCTION, ETC.—
‘‘(1) TAX
IMPOSED
IF
CONTRACT
FOR
CON-
STRUCTION OF QUALIFIED VESSEL NOT ENTERED
INTO WITHIN 3 YEARS.—If any person deposits any
amount into a capital construction fund by reason of
the treatment provided by the last sentence of sub-
section (k)(1), and such person fails to enter into a
qualified contract within the period of 3 years after
the date the certificate referred to in such sentence
was issued—
‘‘(A) such fund shall, at the close of such
period, cease to be treated as a capital con-
struction fund and shall be treated as distribut-
ing all amounts in such fund to such person,
and
‘‘(B) such person’s tax imposed by chapter
1 of the Internal Revenue Code of 1986 for the
taxable year in which such period ends shall be
determined—
‘‘(i) by excluding from gross income
the amount treated as distributed under
subparagraph (A), and
‘‘(ii) by increasing the tax imposed by
such chapter by the product of such
amount and the highest rate of tax speci-
fied in section 1 (section 11 in the case of
a corporation) of such Code.
‘‘(2) TAX ON WITHDRAWALS NOT USED IN FUR-
THERANCE OF CONSTRUCTION CONTRACT.—If there
is a withdrawal from a fund referred to in para-
graph (1) which is not in furtherance of entering
into a qualified contract within such 3 year period,
such withdrawal shall not be taxed as otherwise pro-
vided in this section and such person’s tax imposed
by chapter 1 of such Code for the taxable year in
which such withdrawal is made shall be deter-
mined—
‘‘(A) by excluding such withdrawal from
gross income, and
‘‘(B) by increasing the tax imposed by
such chapter by the product of the amount of
such withdrawal and the highest rate of tax
specified in section 1 (section 11 in the case of
a corporation) of such Code.
‘‘(3) QUALIFIED CONTRACT.—For purposes of
this subsection, the term ‘qualified contract’ means
any contract for the construction of a new qualified
vessel the consideration for which will be paid from
the capital construction fund referred to in para-
graph (1).
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING
LOSSES.—Any amount excluded
from gross income under this subsection shall be ex-
cluded in determining taxable income under section
172(b)(2) of such Code.’’
SEC. 4. AMENDMENTS OF INTERNAL REVENUE CODE OF
1986.
(a) TREATMENT OF FUND EARNINGS.—
(1) Section 7518 of the Internal Revenue Code
of 1986 is amended by redesignating subsections (h)
and (i) as subsections (j) and (k), respectively, and
by inserting after subsection (g) the following new
subsection:
‘‘(h) TAXATION OF EARNINGS ON INVESTMENT IN
CERTAIN FUNDS.—
‘‘(1) IN GENERAL.—In the case of a capital
construction fund to which this subsection applies,
the tax imposed by chapter 1 shall be determined—
‘‘(A) by excluding from gross income the
earnings from the investment and reinvestment
of amounts held in such capital construction
fund, and
‘‘(B) by increasing the tax imposed by
such chapter by the product of the amount of
such earnings and the highest rate of tax speci-
fied in section 1 (section 11 in the case of a
corporation).
‘‘(2) MAXIMUM RATE ON CAPITAL GAINS.—If
there is a net capital gain on amounts held in a cap-
ital construction fund to which this subsection ap-
plies, the rate of tax taken into account under para-
graph (1)(B) with respect to such gain shall not ex-
ceed the rate applicable to net capital gain under
section 1(h) or 1201(a), as the case may be.
‘‘(3) FUNDS
TO
WHICH
SUBSECTION
AP-
PLIES.—This subsection shall apply to any capital
construction fund into which amounts are deposited
by reason of the operation of a passenger vessel.
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING
LOSSES.—Any earnings excluded
from gross income under paragraph (1) shall be ex-
cluded in determining taxable income under section
172(b)(2).
‘‘(5) TAXABLE
EARNINGS.—For purposes of
this section, the term ‘taxable earnings’ means net
earnings determined with the following modifica-
tions:
‘‘(A) There shall be excluded interest in-
come exempt from taxation under section 103.
‘‘(B) If the person maintaining the fund is
a corporation, there shall be excluded the per-
centage applicable under section 243(a)(1) of
any dividend received by the fund with respect
to which such person would (but for paragraph
(1)(A)) be allowed a deduction under section
243.
‘‘(C) Losses from the sale or exchange of
capital assets shall be allowed only to the extent
of gains from such sales or exchanges.
‘‘(D) There shall be excluded—
‘‘(i) earnings on amounts deposited in
the fund which are attributable to vessels
documented under the laws of the United
States for operation in the fisheries of the
United States, and
‘‘(ii) earnings on earnings described in
clause (i).’’
(2) Subparagraph (D) of section 7518(a)(1) of
such Code is amended by inserting ‘‘reduced by the
tax (if any) imposed on such receipts under sub-
section (h)’’ after ‘‘in such fund’’.
(3) Subparagraph (C) of section 7518(c)(1) of
such Code is amended by inserting ‘‘except as pro-
vided in subsection (h),’’ before ‘‘the earnings’’.
(4) Paragraph (2) of section 7518(d) of such
Code is amended by striking ‘‘and’’ at the end of
subparagraph (C), by striking the period at the end
of subparagraph (D) and inserting ‘‘, and’’, and by
adding at the end thereof the following new subpara-
graph:
‘‘(E) in the case of any capital construc-
tion fund to which subsection (h) applies, the
taxable earnings (as defined in such subsection)
of such fund.’’
(5) Paragraph (3) of section 7518(d) of such
Code is amended by adding at the end thereof the
following new flush sentence:
‘‘In the case of any capital construction fund to
which subsection (h) applies, the taxable earnings
(as defined in such subsection) of such fund shall
not be taken into account under this paragraph.’’
(6) Paragraph (4) of section 7518(d) of such
Code is amended by adding at the end thereof the
following new flush sentence:
‘‘In the case of any capital construction fund to
which subsection (h) applies, the taxable earnings
(as defined in such subsection) of such fund shall
not be taken into account under subparagraph (B),
and subparagraphs (C) and (E) shall not apply.’’
(7) Paragraph (1) of section 7518(g) of such
Code is amended by striking ‘‘subsection (h)’’ and
inserting ‘‘subsection (i)’’.
(8) Paragraph (1) of section 7518(e) of such
Code is amended by striking ‘‘or’’ at the end of sub-
paragraph (B), by striking the period at the end of
subparagraph (C) and inserting ‘‘, or’’, and by in-
serting after subparagraph (C) the following new
subparagraph:
‘‘(D) the payment of the tax (if any) im-
posed by subsection (h).’’
(b) TREATMENT OF CERTAIN LEASE PAYMENTS.—
(1) Paragraph (1) of section 7518(e) of such
Code is amended by striking ‘‘or’’ at the end of sub-
paragraph (C), by striking the period at the end of
subparagraph (D) and inserting ‘‘, or’’, and by in-
serting after subparagraph (D) the following new
subparagraph:
‘‘(E) the payment of amounts which reduce
the principal amount (as determined under reg-
ulations) of a qualified lease of a passenger ves-
sel which is a qualified vessel.’’
(2) Paragraph (4) of section 7518(f) of such
Code is amended by inserting ‘‘(or to reduce the
principal amount of any qualified lease of a pas-
senger vessel which is a qualified vessel)’’ after ‘‘in-
debtedness’’.
(c) COMPUTATION OF INTEREST WITH RESPECT TO
NONQUALIFIED WITHDRAWALS.—Paragraph (3) of sec-
tion 7518(g) of such Code is amended by adding at the
end the following flush sentence:
‘‘In the case of a withdrawal from a fund to which
subsection (n) applies, in lieu of applying subpara-
graph (C), no addition to the tax shall be payable
under section 6651 and interest on the amount of
the additional tax attributable to any item referred
to in subparagraph (A) or (B) shall be paid in ac-
cordance with section 6601.’’
(d) PASSENGER VESSEL DESIGN AND ENGINEERING
COSTS MAY BE PAID FROM FUNDS.—Paragraph (1) of
section 7518(e) of such Code is further amended by strik-
ing ‘‘or’’ at the end of subparagraph (D), by striking the
period at the end of subparagraph (E) and inserting ‘‘,
or’’, and by inserting after subparagraph (E) the following
new subparagraph:
‘‘(F) the design and engineering of any
construction or reconstruction of a qualified
vessel which is a passenger vessel.’’
(e) EXPANSION OF PERMITTED INVESTMENTS BY
PASSENGER VESSEL FUNDS.—Paragraph (2) of section
7518(b) of such Code is amended by inserting ‘‘(and, in
the case of a fund to which subsection (n) applies, other
income-producing assets (including accounts receivable)’’
after ‘‘interest-bearing securities’’.
(f) WITHDRAWALS PERMITTED FOR CERTAIN PRIOR
EXPENDITURES.—Paragraph (1) of section 7518(e) of
such Code is further amended by striking ‘‘or’’ at the end
of subparagraph (E), by striking the period at the end
of subparagraph (F) and inserting ‘‘, or’’, and by inserting
after subparagraph (F) the following new subparagraph:
‘‘(G) the reimbursement of the person
maintaining the fund for amounts expended by
such person in the reconstruction of any vessel
for which an interim certificate of documenta-
tion was issued under section 12113 of title 46,
United States Code (as added by H.R. 3821 of
the 103d Congress).’’
(g) AMOUNTS IN CAPITAL CONSTRUCTION FUND BY
REASON OF INTERIM CERTIFICATE VESSEL REQUIRED
TO BE COMMITTED TO CONSTRUCTION OF NEW QUALI-
FIED VESSEL.—Section 7518 of such Code is amended by
inserting after subsection (h) the following new subsection:
‘‘(i) TAX ON INTERIM CERTIFICATE VESSEL DEPOS-
ITS IN FUND WHICH ARE NOT COMMITTED TO NEW
CONSTRUCTION, ETC.—
‘‘(1) TAX
IMPOSED
IF
CONTRACT
FOR
CON-
STRUCTION OF QUALIFIED VESSEL NOT ENTERED
INTO WITHIN 3 YEARS.—If any person deposits any
amount into a capital construction fund by reason of
the treatment provided by the last sentence of sec-
tion 607(k)(1) of the Merchant Marine Act, 1936,
and such person fails to enter into a qualified con-
tract within the period of 3 years after the date the
certificate referred to in such sentence was issued—
‘‘(A) such fund shall, at the close of such
period, cease to be treated as a capital con-
struction fund and shall be treated as distribut-
ing all amounts in such fund to such person,
and
‘‘(B) such person’s tax imposed by chapter
1 for the taxable year in which such period ends
shall be determined—
‘‘(i) by excluding from gross income
the amount treated as distributed under
subparagraph (A), and
‘‘(ii) by increasing the tax imposed by
chapter 1 by the product of such amount
and the highest rate of tax specified in sec-
tion 1 (section 11 in the case of a corpora-
tion).
‘‘(2) TAX ON WITHDRAWALS NOT USED IN FUR-
THERANCE OF CONSTRUCTION CONTRACT.—If there
is a withdrawal from a fund referred to in para-
graph (1) which is not in furtherance of entering
into a qualified contract within such 3 year period,
such withdrawal shall not be taxed as otherwise pro-
vided in this section and such person’s tax imposed
by chapter 1 for the taxable year in which such
withdrawal is made shall be determined—
‘‘(A) by excluding such withdrawal from
gross income, and
‘‘(B) by increasing the tax imposed by
chapter 1 by the product of the amount of such
withdrawal and the highest rate of tax specified
in section 1 (section 11 in the case of a cor-
poration).
‘‘(3) QUALIFIED CONTRACT.—For purposes of
this subsection, the term ‘qualified contract’ means
any contract for the construction of a new qualified
vessel the consideration for which will be paid from
the capital construction fund referred to in para-
graph (1).
‘‘(4) COORDINATION
WITH
DEDUCTION
FOR
NET
OPERATING
LOSSES.—Any amount excluded
from gross income under this subsection shall be ex-
cluded in determining taxable income under section
172(b)(2).’’
(h) OTHER CHANGES.—
(1) Subsection (j) of section 7518 of such Code
is amended by striking ‘‘this section.’’ and inserting
‘‘the United States Passenger Vessel Development
Tax Act.’’
(2) 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),’’.
(3) Subsection (c) of section 56 is amended by
striking paragraph (2) and by redesignating para-
graph (3) as paragraph (2).
SEC. 5. 3-YEAR RECOVERY PERIOD FOR UNITED STATES
FLAG PASSENGER VESSELS.
(a) IN GENERAL.—Subparagraph (A) of section
168(e)(3) of the Internal Revenue Code of 1986 is amend-
ed by striking ‘‘and’’ at the end of clause (i), by striking
the period at the end of clause (ii) and inserting ‘‘, and’’,
and by adding at the end thereof the following:
‘‘(iii) any eligible vessel (as defined in
section 607(k)(1) of the Merchant Marine
Act, 1936) which is a passenger vessel, but
only if the original use of such vessel and
containers commences with the taxpayer.’’
(b) MINIMUM TAX TREATMENT.—
Code is amended by adding at the end thereof the follow-
ing flush sentence:
‘‘For purposes of subparagraph (A), documentation
under section 12113 of title 46, United States Code
(as added by H.R. 3821 of the 103d Congress), shall
be treated as registration in the United States.’’
SEC. 7. EMPLOYER INCENTIVES FOR TRAVEL AWARDS.
(a) CREDIT FOR CERTAIN TRAVEL AWARDS.—
(1) IN GENERAL.—Subpart B of part IV of
subchapter A of chapter 1 of the Internal Revenue
Code of 1986 is amended by adding at the end
thereof the following new section:
‘‘SEC. 30A. EMPLOYEE AWARDS FOR TRAVEL ON DOMESTIC
CRUISE SHIPS.
‘‘(a) GENERAL RULE.—In the case of an employer,
there shall be allowed as a credit against the tax imposed
by this section an amount equal to 10 percent of the
amount paid or incurred by the taxpayer as a qualified
travel award for an employee of the taxpayer.
‘‘(b) MAXIMUM CREDIT.—The credit allowed by sub-
section (a) for awards made to an employee during the
taxable year shall not exceed $200.
‘‘(c) QUALIFIED TRAVEL AWARD.—For purposes of
this section, the term ‘qualified travel award’ means any
award in recognition of an achievement by an employee
for travel on any cruise ship—
‘‘(1) which is registered in the United States,
and
‘‘(2) the home port of which is located in the
United States or a possession of the United States.
For purposes of paragraph (1), documentation under sec-
tion 12113 of title 46, United States Code (as added by
H.R. 3821 of the 103d Congress), shall be treated as reg-
istration in the United States.’’
‘‘(d) APPLICATION WITH OTHER CREDITS.—The
credit allowed by subsection (a) for any taxable year shall
not exceed the excess (if any) of—
‘‘(1) the regular tax for the taxable year re-
duced by the sum of the credits allowable under sub-
part A and sections 27, 28, 29, and 30, over
‘‘(2) the tentative minimum tax for the taxable
year.’’
(2) CLERICAL AMENDMENT.—The table of sec-
tions for such subpart B is amended by adding at
the end thereof the following new item:
‘‘Sec. 30A. Employee awards for travel on domestic cruise ships.’’
(b) REDUCTION OF DEDUCTION FOR TRAVEL ON
FOREIGN CRUISE SHIPS.—Subsection (m) of section 274
of such Code (relating to additional limitations on travel
expenses) is amended by adding at the end the following
new paragraph:
‘‘(3) FOREIGN CRUISE SHIPS.—
‘‘(A) IN GENERAL.—The amount allowable
as a deduction under this chapter for expenses
incurred for transportation on any foreign
cruise ship shall not exceed 90 percent of the
amount of such expenses which would (but for
this paragraph) be allowable as a deduction
under this chapter.
‘‘(B) FOREIGN
CRUISE
SHIP.—For pur-
poses of subparagraph (A), the term ‘foreign
cruise ship’ means any cruise ship which does
not meet the requirements of subparagraphs
(A) and (B) of section 274(h)(2).’’
SEC. 8. EFFECTIVE DATES.
(a) IN GENERAL.—Except as otherwise provided in
this section, the amendments made by this Act shall apply
to taxable years beginning after the date of the enactment
of this Act.
(b) DEFINITION
OF
QUALIFIED
VESSEL.—The
amendments made by section 3(a) shall apply for purposes
of determining whether any withdrawal made after De-
cember 31, 1992, is a qualified withdrawal (within the
meaning of section 607(f) of the Merchant Marine Act,
1936, as in effect after such amendments).
(c) TAXATION
OF EARNINGS.—The amendments
made by sections 3(b) and 4(a) shall apply to earnings
after December 31, 1992, in taxable years ending after
such date.
(d) CHANGES IN COMPUTATION OF INTEREST.—The
amendments made by sections 3(d) and 4(c) shall apply
to withdrawals made after December 31, 1992.
(e) QUALIFIED LEASES.—The amendments made by
sections 3(c) and 4(b) shall apply to leases in effect on,
or entered into after, December 31, 1992.
(f) DEPRECIATION.—The amendments made by sec-
tion 5 shall apply to property placed in service after De-
cember 31, 1992, in taxable years ending after such date.
(g) EFFECTIVE DATE.—The amendments made by
section 6 shall apply to cruises beginning after the date
of the enactment of this Act.
Æ
HR 3822 IH——2