I
107TH CONGRESS
1ST SESSION
H. R. 906
To amend the Internal Revenue Code of 1986 to allow a credit against
income tax for the costs of employers in providing certain transportation
fringe benefits for their employees.
IN THE HOUSE OF REPRESENTATIVES
MARCH 7, 2001
Mr. MCGOVERN (for himself, Mr. SHAYS, Mrs. MCCARTHY of New York, Mr.
FROST, Mr. NADLER, Mr. CLEMENT, Mr. PASCRELL, Mrs. MORELLA,
Ms. VELA´ZQUEZ, Mr. ISSA, Mrs. KELLY, Mr. FILNER, Ms. MCKINNEY,
Mr. DAVIS of Illinois, Mr. INSLEE, Mr. MICA, Mrs. TAUSCHER, Mr. MEE-
HAN, Mr. CONYERS, Mr. WEINER, Mr. SERRANO, Mr. CROWLEY, and Mr.
KING) 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 allow a
credit against income tax for the costs of employers
in providing certain transportation fringe benefits for
their employees.
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 ‘‘Mass Transit Tax
Credit Act of 2001’’.
SEC. 2. CREDIT FOR EMPLOYER COSTS OF PROVIDING CER-
TAIN TRANSPORTATION FRINGE BENEFITS
TO THEIR EMPLOYEES.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45E. CREDIT FOR EMPLOYER COSTS OF PROVIDING
CERTAIN MASS TRANSPORTATION FRINGE
BENEFITS TO THEIR EMPLOYEES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the mass transportation fringe credit is an amount equal
to 25 percent of the cost paid or incurred by an employer
during the taxable year for providing any qualified trans-
portation fringe described in subparagraph (A) or (B) of
section 132(f)(1) to employees of such employer.
‘‘(b) LIMITATION.—The amount of the credit under
subsection (a) for a month may not exceed the dollar
amount per month to which the amount of the fringe bene-
fits are limited under subparagraph (A) of section
132(f)(2).
‘‘(c) ELECTION TO HAVE CREDIT NOT APPLY.—A
taxpayer may elect to have this section not apply for any
taxable year.’’.
(b) CONFORMING AMENDMENTS.—
(1) CREDIT TO BE PART OF GENERAL BUSI-
NESS CREDIT.— Subsection (b) of section 38 of such
Code (relating to current year business credit) is
amended by striking ‘‘plus’’ at the end of paragraph
(12), by striking the period at the end of paragraph
(13) and inserting ‘‘, plus’’, and by adding at the
end the following new paragraph:
‘‘(14) the mass transportation fringe credit de-
termined under section 45E(a).’’.
(2) 
NO
CARRYBACK
BEFORE
EFFECTIVE
DATE.—Subsection (d) of section 39 of such Code
(relating to carryback and carryforward of unused
credits) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(10) NO CARRYBACK OF SECTION 45E CREDIT
BEFORE EFFECTIVE DATE.—No portion of the un-
used business credit for any taxable year which is
attributable to the credit determined under section
45E may be carried back to a taxable year beginning
before January 1, 2002.’’.
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of
chapter 1 of such Code is amended by adding at the
end the following new item:
‘‘Sec. 45E. Credit for employer costs of providing certain mass
transportation fringe benefits to their employees.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
Æ