HR 6 EAS1S/PP
SEC. 2504. SALE OF GASOLINE AND DIESEL FUEL AT DUTY-
1
FREE SALES ENTERPRISES.
2
(a) P
ROHIBITION
.—Section 555(b) of the Tariff Act of
3
1930 (19 U.S.C. 1555(b)) is amended—
4
(1) by redesignating paragraphs (6) through (8)
5
as paragraphs (7) through (9), respectively; and
6
(2) by inserting after paragraph (5) the fol-
7
lowing:
8
‘‘(6) Any gasoline or diesel fuel sold at a duty-
9
free sales enterprise shall be considered to be entered
10
for consumption into the customs territory of the
11
United States.’’.
12
(b) C
ONSTRUCTION
.—The amendments made by this
13
section shall not be construed to create any inference with
14
respect to the interpretation of any provision of law as such
15
provision was in effect on the day before the date of enact-
16
ment of this Act.
17
(c) E
FFECTIVE DATE
.—The amendments made by this
18
section shall take effect on the date of enactment of this Act.
19
SEC. 2505. TREATMENT OF DAIRY PROPERTY.
20
(a) Q
UALIFIED
D
ISPOSITION OF
D
AIRY
P
ROPERTY
21
T
REATED AS
I
NVOLUNTARY
C
ONVERSION
.—
22
(1) I
N GENERAL
.—Section 1033 (relating to in-
23
voluntary conversions) is amended by designating
24
subsection (k) as subsection (l) and inserting after
25
subsection (j) the following new subsection:
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HR 6 EAS1S/PP
‘‘(k) Q
UALIFIED
D
ISPOSITION
T
O
I
MPLEMENT
B
OVINE
1
T
UBERCULOSIS
E
RADICATION
P
ROGRAM
.—
2
‘‘(1) I
N GENERAL
.—For purposes of this subtitle,
3
if a taxpayer elects the application of this subsection
4
to a qualified disposition:
5
‘‘(A) T
REATMENT AS INVOLUNTARY CONVER
-
6
SION
.—Such disposition shall be treated as an
7
involuntary conversion to which this section ap-
8
plies.
9
‘‘(B) M
ODIFICATION OF SIMILAR PROPERTY
10
REQUIREMENT
.—Property to be held by the tax-
11
payer either for productive use in a trade or
12
business or for investment shall be treated as
13
property similar or related in service or use to
14
the property disposed of.
15
‘‘(C) E
XTENSION OF PERIOD FOR REPLAC
-
16
ING PROPERTY
.—Subsection (a)(2)(B)(i) shall be
17
applied by substituting ‘4 years’ for ‘2 years’.
18
‘‘(D) W
AIVER OF UNRELATED PERSON RE
-
19
QUIREMENT
.—Subsection (i) (relating to replace-
20
ment property must be acquired from unrelated
21
person in certain cases) shall not apply.
22
‘‘(E) E
XPANDED CAPITAL GAIN FOR CATTLE
23
AND
HORSES
.—Section 1231(b)(3)(A) shall be
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applied by substituting ‘1 month’ for ‘24
1
months’.
2
‘‘(2) Q
UALIFIED DISPOSITION
.—
3
‘‘(A) I
N GENERAL
.—For purposes of this
4
subsection, the term ‘qualified disposition’ means
5
the disposition of dairy property which is cer-
6
tified by the Secretary of Agriculture as having
7
been the subject of an agreement under the bovine
8
tuberculosis eradication program, as imple-
9
mented pursuant to the Declaration of Emer-
10
gency Because of Bovine Tuberculosis (65 Fed-
11
eral Register 63,227 (2000)).
12
‘‘(B) P
AYMENTS RECEIVED IN CONNECTION
13
WITH THE BOVINE TUBERCULOSIS ERADICATION
14
PROGRAM
.—For purposes of this subsection, any
15
amount received by a taxpayer in connection
16
with an agreement under such bovine tuber-
17
culosis eradication program shall be treated as
18
received in a qualified disposition.
19
‘‘(C) T
RANSMITTAL OF CERTIFICATIONS
.—
20
The Secretary of Agriculture shall transmit cop-
21
ies of certifications under this paragraph to the
22
Secretary.
23
‘‘(3) A
LLOWANCE OF THE ADJUSTED BASIS OF
24
CERTIFIED DAIRY PROPERTY AS A DEPRECIATION DE
-
25
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DUCTION
.—The adjusted basis of any property cer-
1
tified under paragraph (2)(A) shall be allowed as a
2
depreciation deduction under section 167 for the tax-
3
able year which includes the date of the certification
4
described in paragraph (2)(A).
5
‘‘(4) D
AIRY
PROPERTY
.—For purposes of this
6
subsection, the term ‘dairy property’ means all tan-
7
gible or intangible property used in connection with
8
a dairy business or a dairy processing plant.
9
‘‘(5) S
PECIAL
RULES
FOR
CERTAIN
BUSINESS
10
ORGANIZATIONS
.—
11
‘‘(A) S
CORPORATIONS
.—In the case of an
12
S corporation, gain on a qualified disposition
13
shall not be treated as recognized for the pur-
14
poses of section 1374 (relating to tax imposed on
15
certain built-in gains).
16
‘‘(B) P
ARTNERSHIPS
.—In the case of a
17
partnership which dissolves in anticipation of a
18
qualified disposition (including in anticipation
19
of receiving the amount described in paragraph
20
(2)(B)), the dairy property owned by the part-
21
ners of such partnership at the time of such dis-
22
position shall be treated, for the purposes of this
23
section and notwithstanding any regulation or
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HR 6 EAS1S/PP
rule of law, as owned by such partners at the
1
time of such disposition.
2
‘‘(6) T
ERMINATION
.—This subsection shall not
3
apply to dispositions made after December 31, 2006.’’.
4
(2) E
FFECTIVE DATE
.—The amendment made by
5
this subsection shall apply to dispositions made and
6
amounts received in taxable years ending after May
7
22, 2001.
8
(b) D
EDUCTION OF
Q
UALIFIED
R
ECLAMATION
E
X
-
9
PENDITURES
.—
10
(1) I
N GENERAL
.—Part VI of subchapter B of
11
chapter 1 (relating to itemized deductions for individ-
12
uals and corporations), as amended by this Act, is
13
amended by adding at the end the following new sec-
14
tion:
15
‘‘SEC. 199B. EXPENSING OF DAIRY PROPERTY RECLAMA-
16
TION COSTS.
17
‘‘(a) I
N
G
ENERAL
.—Notwithstanding section 280B (re-
18
lating to demolition of structures), a taxpayer may elect
19
to treat any qualified reclamation expenditure which is
20
paid or incurred by the taxpayer as an expense which is
21
not chargeable to capital account. Any expenditure which
22
is so treated shall be allowed as a deduction for the taxable
23
year in which it is paid or incurred.
24
‘‘(b) Q
UALIFIED
R
ECLAMATION
E
XPENDITURE
.—
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‘‘(1) I
N GENERAL
.—For purposes of this sub-
1
paragraph, the term ‘qualified reclamation expendi-
2
ture’ means amounts otherwise chargeable to capital
3
account and paid or incurred to convert any real
4
property certified under section 1033(k)(2) (relating
5
to qualified disposition) into unimproved land.
6
‘‘(2) S
PECIAL RULE FOR EXPENDITURES FOR DE
-
7
PRECIABLE PROPERTY
.—A rule similar to the rule of
8
section 198(b)(2) (relating to special rule for expendi-
9
tures for depreciable property) shall apply for pur-
10
poses of paragraph (1).
11
‘‘(c) D
EDUCTION
R
ECAPTURED
AS
O
RDINARY
I
N
-
12
COME
.—Rules similar to the rules of section 198(e) (relating
13
to deduction recaptured as ordinary income on sale, etc.)
14
shall apply with respect to any qualified reclamation ex-
15
penditure.
16
‘‘(d) T
ERMINATION
.—This section shall not apply to
17
expenditures paid or incurred after December 31, 2006.’’.
18
(2) C
LERICAL AMENDMENT
.—The table of sec-
19
tions for part VI of subchapter B of chapter 1, as
20
amended by this Act, is amended by adding at the
21
end the following new item:
22
‘‘Sec. 199B. Expensing of dairy property reclamation costs.’’.
(3) E
FFECTIVE DATE
.—The amendments made
23
by this subsection shall apply to expenditures paid or
24
incurred in taxable years ending after May 22, 2001.
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HR 6 EAS1S/PP
SEC. 2506. CLARIFICATION OF EXCISE TAX EXEMPTIONS
1
FOR AGRICULTURAL AERIAL APPLICATORS.
2
(a) N
O
W
AIVER BY
F
ARM
O
WNER
, T
ENANT
,
OR
O
PER
-
3
ATOR
N
ECESSARY
.—Subparagraph
(B)
of
section
4
6420(c)(4) (relating to certain farming use other than by
5
owner, etc.) is amended to read as follows:
6
‘‘(B) if the person so using the gasoline is
7
an aerial or other applicator of fertilizers or
8
other substances and is the ultimate purchaser of
9
the gasoline, then subparagraph (A) of this para-
10
graph shall not apply and the aerial or other ap-
11
plicator shall be treated as having used such gas-
12
oline on a farm for farming purposes.’’.
13
(b) E
XEMPTION
I
NCLUDES
F
UEL
U
SED
B
ETWEEN
A
IR
-
14
FIELD AND
F
ARM
.—Section 6420(c)(4), as amended by sub-
15
section (a), is amended by adding at the end the following
16
new flush sentence:
17
‘‘For purposes of this paragraph, in the case of an
18
aerial applicator, gasoline shall be treated as used on
19
a farm for farming purposes if the gasoline is used
20
for the direct flight between the airfield and 1 or more
21
farms.’’.
22
(c) E
XEMPTION FROM
T
AX ON
A
IR
T
RANSPORTATION
23
OF
P
ERSONS FOR
F
ORESTRY
P
URPOSES
E
XTENDED TO
24
F
IXED
-W
ING
A
IRCRAFT
.—Subsection (f) of section 4261 (re-
25
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HR 6 EAS1S/PP
lating to tax on air transportation of persons) is amended
1
to read as follows:
2
‘‘(f) E
XEMPTION FOR
C
ERTAIN
U
SES
.—No tax shall be
3
imposed under subsection (a) or (b) on air transportation—
4
‘‘(1) by helicopter for the purpose of transporting
5
individuals, equipment, or supplies in the exploration
6
for, or the development or removal of, hard minerals,
7
oil, or gas, or
8
‘‘(2) by helicopter or by fixed-wing aircraft for
9
the purpose of the planting, cultivation, cutting, or
10
transportation of, or caring for, trees (including log-
11
ging operations),
12
but only if the helicopter or fixed-wing aircraft does not
13
take off from, or land at, a facility eligible for assistance
14
under the Airport and Airway Development Act of 1970,
15
or otherwise use services provided pursuant to section 44509
16
or 44913(b) or subchapter I of chapter 471 of title 49,
17
United States Code, during such use. In the case of heli-
18
copter transportation described in paragraph (1), this sub-
19
section shall be applied by treating each flight segment as
20
a distinct flight.’’.
21
(d) E
FFECTIVE
D
ATE
.—The amendments made by this
22
section shall apply to fuel use or air transportation after
23
December 31, 2001, and before January 1, 2003.
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SEC. 2507. MODIFICATION OF RURAL AIRPORT DEFINITION.
1
(a) I
N
G
ENERAL
.—Clause (ii) of section 4261(e)(1)(B)
2
(defining rural airport) is amended by striking the period
3
at the end of subclause (II) and inserting ‘‘, or’’ and by
4
adding at the end the following new subclause:
5
‘‘(III) is not connected by paved
6
roads to another airport.’’.
7
(b) E
FFECTIVE
D
ATE
.—The amendments made by this
8
section shall apply to calendar years beginning after 2002.
9
SEC. 2508. EXEMPTION FROM TICKET TAXES FOR TRANS-
10
PORTATION PROVIDED BY SEAPLANES.
11
(a) I
N
G
ENERAL
.—The taxes imposed by sections 4261
12
and 4271 shall not apply to transportation by a seaplane
13
with respect to any segment consisting of a takeoff from,
14
and a landing on, water.
15
(b) E
FFECTIVE
D
ATE
.—The amendments made by this
16
section shall apply to calendar years beginning after 2002.
17
DIVISION I—IRAQ OIL IMPORT
18
RESTRICTION
19
TITLE XXVI—IRAQ OIL IMPORT
20
RESTRICTION
21
SEC. 2601. SHORT TITLE AND FINDINGS.
22
(a) S
HORT
T
ITLE
.—This title can be cited as the ‘‘Iraq
23
Petroleum Import Restriction Act of 2003’’.
24
(b) F
INDINGS
.—Congress finds that—
25
(1) the Government of the Republic of Iraq—
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(A) has failed to comply with the terms of
1
United Nations Security Council Resolution 687
2
regarding unconditional Iraqi acceptance of the
3
destruction, removal, or rendering harmless,
4
under international supervision, of all nuclear,
5
chemical and biological weapons and all stocks of
6
agents and all related subsystems and compo-
7
nents and all research, development, support and
8
manufacturing facilities, as well as all ballistic
9
missiles with a range greater than 150 kilo-
10
meters and related major parts, and repair and
11
production facilities and has failed to allow
12
United Nations inspectors access to sites used for
13
the production or storage of weapons of mass de-
14
struction;
15
(B) routinely contravenes the terms and.
16
conditions of UNSC Resolution 661, authorizing
17
the export of petroleum products from Iraq in ex-
18
change for food, medicine and other humani-
19
tarian products by conducting a routine and ex-
20
tensive program to sell such products outside of
21
the channels established by UNSC Resolution
22
661 in exchange for military equipment and ma-
23
terials to be used in pursuit of its program to de-
24
velop weapons of mass destruction in order to
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