ELECTION TO RECEIVE TAXABLE CASH COMPENSATION IN LIEU OF NONTAXABLE QUALIFIED TRANSPORTATION FRINGE BENEFITS.

SEC. 9010. ELECTION TO RECEIVE TAXABLE CASH COMPENSATION IN LIEU OF NONTAXABLE QUALIFIED TRANSPORTATION FRINGE BENEFITS. (a) No Constructive Receipt.— (1) In general.— Paragraph (4) of section 132(f) (relating to qualified transportation fringe) is amended to read as follows: “(4) No constructive receipt.— No amount shall be included in the gross income of an employee solely because the employee may choose between any qualified transportation fringe and compensation which would otherwise be includible in gross income of such employee.”. (2) Effective date.— The amendment made by this subsectionshall apply to taxable years beginning after December 31, 1997. (b) Inflation Adjustment Only After 1999.— (1) In general.— Paragraph (6) of section 132(f) (relating to qualified transportation fringe) is amended to read as follows: “(1) Inflation adjustment.— “(A) In general.— In the case of any taxable year beginning in a calendar year after 1999, the dollar amounts 112 STAT. 508contained in subparagraphs (A) and (B) of paragraph (2)shall be increased by an amount equal to— “(i) such dollar amount, multiplied by “(ii) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting ‘calendar year 1998’ for ‘calendar year 1992’. “(B) Rounding.— If any increase determined under subparagraph (A) is not a multiple of $5, such increase shall be rounded to the next lowest multiple of $5.”. (2) Conforming amendments.— Section 132(f)(2) is amended— (A) by striking “$60” in subparagraph (A) and inserting “$65”, and (B) by striking “$155” in subparagraph (B) and inserting “$175”. (3) Effective Date.— amendments made by this subsection shall apply to taxable years beginning after December 31, 1998. (c) Increase in Maximum Exclusion for Employer-Provided Transit Passes.— (1) In general.— Subparagraph (A) of section 132(f)(2) (relating to limitation on exclusion) is amended by striking“$65” and inserting “$100”. (2) New base period for inflation adjustment.— Subparagraph (A) of section 132(0(6) is amended by adding at the end the following flush sentence: “In the case of any taxable year beginning in a calendar year after 2002, clause (ii) shall be applied by substituting ‘calendar year 2001’ for ‘calendar year 1998’ for purposes of adjusting the dollar amount contained in paragraph(2)(A).”. (3) Effective date.— The amendments made by this subsection shall apply to taxable years beginning after December 31, 2001.