S.Amdt. 3516

SA 3516. Mr. INOUYE submitted an amendment intended to be proposed to
amendment SA 3452 proposed by Mr. Rockefeller to the bill H.R. 1586, to
impose an additional tax on bonuses received from certain TARP
recipients; which was ordered to lie on the table; as follows:

On page 302, between lines 3 and 4, insert the following:

SEC. --. MODIFICATION OF THE APPLICATION OF THE TONNAGE TAX
ON VESSELS OPERATING IN THE DUAL UNITED STATES
DOMESTIC AND FOREIGN TRADES.

(a) In General.--Subsection (f) of section 1355 of the
Internal Revenue Code of 1986 (relating to definitions and
special rules) is amended to read as follows:
``(f) Effect of Operating a Qualifying Vessel in the Dual
United States Domestic and Foreign Trades.--For purposes of
this subchapter--
``(1) an electing corporation shall be treated as
continuing to use a qualifying vessel in the United States
foreign trade during any period of use in the United States
domestic trade, and
``(2) gross income from such United States domestic trade
shall not be excluded under section 1357(a), but shall not be
taken into account for purposes of section 1353(b)(1)(B) or
for purposes of section 1356 in connection with the
application of section 1357 or 1358.''.
(b) Regulatory Authority for Allocation of Credits, Income,
and Deductions.--Section 1358 of the Internal Revenue Code of
1986 (relating to allocation of credits, income, and
deductions) is amended--
(1) by striking ``in accordance with this subsection'' in
subsection (c) and inserting ``to the extent provided in such
regulations as may be prescribed by the Secretary'', and
(2) by adding at the end the following new subsection:
``(d) Regulations.--The Secretary shall prescribe
regulations consistent with the provisions of this subchapter
for the purpose of allocating gross income, deductions, and
credits between or among qualifying shipping activities and
other activities of a taxpayer.''.
(c) Conforming Amendments.--
(1) Section 1355(a)(4) of the Internal Revenue Code of 1986
is amended by striking ``exclusively''.
(2) Section 1355(b)(1)(B) of such Code is amended by
striking ``as a qualifying vessel'' and inserting ``in the
transportation of goods or passengers''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after the date of the
enactment of this Act.
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