Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''National Security Sealift
Enhancement Act of 1999''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
TITLE I--CAPITAL CONSTRUCTION FUND

Sec. 101. Amendments of Internal Revenue Code of 1986.
Sec. 102. Amendment to the Tariff Act of 1930.
Sec. 103. Effective date.
TITLE II--ELECTION TO EXPENSE UNITED STATES FLAG VESSELS

Sec. 201. Election to expense certain United States flag vessels.
TITLE III--INCOME EXCLUSION FOR MERCHANT SEAMEN

Sec. 301. Income of merchant seaman excludable from gross income as
foreign earned income.
TITLE IV--EXEMPTION FROM ALTERNATIVE MINIMUM TAX

Sec. 401. Exemption from alternative minimum tax for corporations that
operate United States flag vessels.
TITLE V--CONVENTIONS ON UNITED STATES-FLAG CRUISE SHIPS

Sec. 501. Conventions on United States-flag cruise ships.

TITLE I--CAPITAL CONSTRUCTION FUND

SEC. 101. AMENDMENTS OF INTERNAL REVENUE CODE OF 1986.

(a) Treatment of Certain Lease Payments.--
(1) Paragraph (1) of section 7518(e) of the Internal
Revenue Code of 1986 is amended by striking ''or'' at the end
of subparagraph (B), by striking the period at the end of
subparagraph (C) and inserting '', or'', and by inserting after
subparagraph (C) the following new subparagraph:
''(D) the payments of amounts which reduce the
principal amount (as determined under regulations) of a
qualified lease of a qualified vessel or container
which is part of the complement of an eligible
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'' after ''indebtedness''.
(b) Authority To Make Deposits Under The Tariff Act of 1930.--
(1) Paragraph (1) of section 7518(a) 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 the following new
subparagraph:
''(E) the amount elected for deposit under
subsection (i) of section 466 of the Tariff Act of 1930
(19 U.S.C. 1466).''.
(2) Subparagraph (A) of section 7518(d)(2) of such Code is
amended to read as follows:
''(A) amounts referred to in subsections (a)(1)(B)
and (E).''.
(c) Authority To Make Deposits for Prior Years Based on Audit
Adjustments.--Subsection (a) of section 7518 of such Code is amended by
adding at the end thereof the following new paragraph:
''(4) Deposits for prior years.--To the extent permitted by
joint regulations, deposits may be made in excess of the
limitation described in paragraph (1) (and any limitation
specified in the agreement) for the taxable year if, by reason
of a change in taxable income for a prior taxable year that has
become final pursuant to a closing agreement or other similar
agreement entered into during the taxable year, the amount of
the deposit could have been made for such prior taxable
year.''.
(d) Treatment of Capital Gains and Losses.--
(1) Paragraph (3) of section 7518(d) of such Code is
amended to read as follows:
''(3) Capital gain account.--The capital gain account shall
consist of--
''(A) amounts representing long-term capital gains
(as defined in section 1222) on assets held in the
fund, reduced by
''(B) amounts representing long-term capital 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 assets held in
the fund, reduced by
''(ii) amounts representing short-term capital
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)(1)(C) or 1201(a), as the case may be''.
(e) 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'', and
(B) by striking ''paid at 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 redesignating 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), is amended by striking
''paragraph (5)'' and inserting ''paragraph (4)''.
(f) Other Changes.--
(1) Paragraph (2) of section 7518(b) of such Code is
amended by striking ''interest-bearing securities approved by
the Secretary'' and inserting ''interest-bearing securities and
other income-producing assets (including accounts receivable)
approved by the Secretary''.
(2) The last sentence of paragraph (1) of section 7518(e)
of such Code is amended by striking ''and containers'' each
place it appears.
(3) 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),''.
(4) Subsection (c) of section 56 of such Code is amended by
striking paragraph (2) and by redesignating paragraph (3) as
paragraph (2).
(5) Section 7518(e) is amended by adding at the end the
following new paragraph:
''(3) Qualified withdrawal.--In the case of amounts in any
fund as of the date of the enactment of this paragraph, and any
earnings thereon, for purposes of this subsection, the term
'qualified withdrawal' has the meaning given such term by
applying subsection (i)(2) as of such date.''
(g) Definitions.--Subsection (i) of section 7518 of such Code is
amended to read as follows:
''(i) Definitions.--
''(1) In general.--Except as provided in paragraph (2),
terms used in this section shall have the same meaning as in
section 607(k) of the Merchant Marine Act, 1936.
''(2) Other definitions.--For the purposes of this
section--
''(A) The term 'eligible vessel' means any vessel--
''(i) documented under the laws of the
United States, and
''(ii) operated in the foreign or domestic
commerce of the United States or in the
fisheries of the United States.
''(B) Qualified vessel.--The term 'qualified
vessel' means any vessel--
''(i) constructed in the United States and,
if reconstructed, reconstructed in the United
States,
''(ii) documented under the laws of the
United States, and
''(iii) which the person maintaining the
fund agrees with the Secretary will be operated
in the fisheries of the United States, or in
the United States foreign, Great Lakes,
noncontiguous domestic trade, or other
oceangoing domestic trade between two coastal
points in the United States or in support of
operations conducted on the Outer Continental
Shelf.
''(C) Vessel.--The term 'vessel' includes
containers or trailers intended for use as part of the
complement of one or more eligible vessels and cargo
handling equipment which the Secretary determines is
intended for use primarily on the vessel. The term
'vessel' also includes an ocean-going towing vessel or
an ocean-going barge or comparable towing vessel or
barge operated on the Great Lakes.
''(D) Foreign commerce.--The terms 'foreign
commerce' and 'foreign trade' have the meanings given
such terms in section 905 of the Merchant Marine Act,
1936, except that these terms shall include commerce or
trade between foreign ports.
''(E) Qualified lease.--The term 'qualified lease'
means any lease with a term of at least 5 years.''

SEC. 102. AMENDMENT TO THE TARIFF ACT OF 1930.

Section 466 of the Tariff Act of 1930 (19 U.S.C. 1466) is amended
by adding at the end the following new subsection:
''(i) Election To Deposit Duty Into a Capital Construction Fund In
Lieu of Payment to the Secretary of the Treasury.--At the election of
the owner or master of any vessel referred to in subsection (a) of this
section which is an eligible vessel (as defined in section 7518(i)(2)
of the Internal Revenue Code of 1986), the portion of any duty imposed
by subsection (a) which is deposited in a fund established under
section 607 of the Merchant Marine Act, 1936 shall be treated as paid
to the Secretary of the Treasury in satisfaction of the liability for
such duty.''

SEC. 103. EFFECTIVE DATE.

(a) In General.--Except as otherwise provided in this section, the
amendments made by this title shall apply to taxable years ending after
the date of the enactment of this Act.
(b) Changes in Computation of Interest.--The amendments made by
section 101(e) shall apply to withdrawals made after December 31, 1998,
including for purposes of computing interest on such a withdrawal for
periods on or before such date.
(c) Qualified Leases.--The amendments made by section 101(a) shall
apply to leases in effect on, or entered into after, December 31, 1998.
(d) Amendment to the Tariff Act of 1930.--The amendment made by
section 102 shall apply with respect to entries not yet liquidated by
December 31, 1998, and to entries made on or after such date.

TITLE II--ELECTION TO EXPENSE UNITED STATES FLAG VESSELS

SEC. 201. ELECTION TO EXPENSE CERTAIN UNITED STATES FLAG VESSELS.

(a) In General.--Part VI of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
179A the following new section:

''SEC. 179B. DEDUCTION FOR UNITED STATES FLAG VESSELS.

''(a) Treatment as Expenses.--A taxpayer may elect to treat the
cost of any vessel that is a qualified United States flag vessel as an
expense which is not chargeable to its capital account.
''(b) Year in Which Deduction Allowed.--The deduction under
subsection (a) shall be allowed for the taxable year in which the
vessel first becomes a qualified United States flag vessel.
''(c) Definitions.--
''(1) Qualified united states flag vessel.--For purposes of
this section, the term 'qualified United States flag vessel'
means a United States flag vessel that is operated exclusively
in the foreign trade of the United States.
''(2) Cost.--For purposes of this section, the term 'cost'
means an amount equal to the lesser of--
''(A) the purchase price of the vessel, or
''(B) the adjusted basis of the vessel, determined
under section 1011, at the time that the vessel becomes
a qualified United States flag vessel.
''(d) Basis Reduction.--
''(1) In general.--For purposes of this title, the basis of
any property shall be reduced by the portion of the cost of
such property taken into account under subsection (a).
''(2) Ordinary income recapture.--For purposes of section
1245, the amount of the deduction allowable under subsection
(a) with respect to any property which is of a character
subject to the allowance for depreciation shall be treated as a
deduction allowed for depreciation under section 167.''
(b) Conforming Amendments.--
(1) Paragraph (1) of section 263(a) of such Code is amended
by striking ''or'' at the end of subparagraph (G), by striking
the period at the end of subparagraph (H) and inserting '';
or'', and by adding at the end the following new subparagraph:
''(I) expenditures for which a deduction is allowed
under section 179B.''.
(2) Subparagraph (B) of section 312(k)(3) of such Code is
amended by striking ''or 179A'' each place it appears and
inserting '', 179A, or 179B''.
(3) Subparagraph (C) of section 1245(a)(2) of such Code is
amended by inserting ''179B,'' after ''179A,''.
(4) The table of sections for part VI of subchapter B of
chapter 1 of such Code is amended by inserting after the item
relating to section 179A the following new item:

''Sec. 179B. Deduction for United States
flag vessels.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.

TITLE III--INCOME EXCLUSION FOR MERCHANT SEAMEN

SEC. 301. INCOME OF MERCHANT SEAMAN EXCLUDABLE FROM GROSS INCOME AS
FOREIGN EARNED INCOME.

(a) Section 911 Exclusion.--Section 911(d) of the Internal Revenue
Code of 1986 (relating to citizens or residents of the United States
living abroad) is amended by redesignating paragraph (9) as paragraph
(10) and by inserting after paragraph (8) the following:
''(9) Application to certain merchant marine crews.--In
applying this section to an individual who is a citizen or
resident of the United States and who is employed for a minimum
of 90 days during a taxable year as a regular member of the
crew of a vessel or vessels owned, operated, or chartered by a
United States citizen--
''(A) the individual shall be treated as a
qualified individual without regard to the requirements
of paragraph (1); and
''(B) any earned income attributable to services
performed by that individual so employed on such a
vessel while it is engaged in transportation between
the United States and a foreign country or possession
of the United States shall be treated (except as
provided by subsection (b)(1)(B)) as foreign earned
income regardless of where payments of such income are
made.''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.

TITLE IV--EXEMPTION FROM ALTERNATIVE MINIMUM TAX

SEC. 401. EXEMPTION FROM ALTERNATIVE MINIMUM TAX FOR CORPORATIONS THAT
OPERATE UNITED STATES FLAG VESSELS.

(a) In General.--Section 55 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subsection:
''(f) Exemption for Corporations That Operate United States Flag
Vessels.--
''(1) In General.--The tentative minimum tax of a
corporation shall be zero for any taxable year in which the
corporation is a qualified corporation.
''(2) Definitions.--For purposes of this subsection--
''(A) Qualified corporation.--The term 'qualified
corporation' means any domestic corporation if--
''(i) substantially all of the assets of
such corporation are related to the maritime
transportation business, and
''(ii) such corporation owns or demise
charters a fleet of 4 or more qualified United
States flag vessels.
''(B) Qualified united states flag vessel.--The
term 'qualified United States flag vessel' means a
United States flag vessel having a deadweight tonnage
of not less than 10,000 deadweight tons that is
operated exclusively in the foreign trade of the United
States during each of the 360 days immediately
preceding the last day of the taxable year. Days during
which the vessel is drydocked, surveyed, inspected, or
repaired shall be considered days of operation for
purposes of this subsection.
''(C) Foreign trade.--The term 'foreign trade' has
the meaning given to such term by section 7518(i)(2).''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after the date of the enactment of this Act.

TITLE V--CONVENTIONS ON UNITED STATES-FLAG CRUISE SHIPS

SEC. 501. CONVENTIONS ON UNITED STATES-FLAG CRUISE SHIPS.

(a) In General.--Section 274(h)(2) of the Internal Revenue Code of
1986 (relating to conventions on cruise ships) is amended by striking
''that--'' and all that follows through ''possessions of the United
States.'' and inserting ''that the cruise ship is a vessel registered
in the United States.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years ending after the date of the enactment of this
Act.
Student:
Title II: Election to Expense United States Flag Vessels
- Permits, under the IRC, a taxpayer to elect to treat the cost of any vessel that is a qualified U. S. flag vessel as an expense which is not chargeable to its capital account.
Title III: Income Exclusion for Merchant Seamen
- Permits the income of certain merchant seaman to be excluded from gross income under IRC provisions permitting such exclusion for U.S. citizens or residents living abroad.
Title IV: Exemption from Alternative Minimum Tax
- Provides that the tentative minimum tax shall be zero for certain corporations which derive substantially all of their assets from the operation of U.S. flag vessels.
Title V: Conventions on United States-Flag Cruise Ships
- Eliminates the requirements that a cruise ship be U.S. registered and that all points of call be in the U.S. or its possessions in order to qualify for the deduction allowed for the attendance of a convention on a cruise ship.