[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2264 Public Print (PP)]
103d CONGRESS
1st Session
H. R. 2264
_______________________________________________________________________
AMENDMENT
June 29 (legislative day, June 22), 1993
Ordered to be printed as passed
June 29 (legislative day, June 22), 1993
Ordered to be printed as passed
In the Senate of the United States,
June 25 (legislative day, June 22), 1993.
Resolved, That the bill from the House of Representatives (H.R.
2264) entitled ``An Act to provide for reconciliation pursuant to
section 7 of the concurrent resolution on the budget for fiscal year
1994'', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Omnibus Budget Reconciliation Act of
1993''.
SEC. 2. TABLE OF CONTENTS.
The table of contents is as follows:
TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
TITLE II--COMMITTEE ON ARMED SERVICES
TITLE III--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
TITLE IV--COMMUNICATIONS AND TRANSPORTATION
TITLE V--COMMITTEE ON ENERGY AND NATURAL RESOURCES
TITLE VI--COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
TITLE VII--FINANCE COMMITTEE RECONCILIATION PROVISIONS RELATING TO
MEDICARE, MEDICAID, AND OTHER PROGRAMS
TITLE VIII--FINANCE COMMITTEE REVENUE PROVISIONS
TITLE IX--COMMITTEE ON FOREIGN RELATIONS
TITLE X--COMMITTEE ON GOVERNMENTAL AFFAIRS
TITLE XI--COMMITTEE ON THE JUDICIARY
TITLE XII--COMMITTEE ON LABOR AND HUMAN RESOURCES
TITLE XIII--VETERANS' PROGRAMS
TITLE XIV--ENFORCEMENT PROCEDURES
TITLE XV--MISCELLANEOUS PROVISIONS
TITLE I--COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
SEC. 1001. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Agricultural
Reconciliation Act of 1993''.
(b) Table of Contents.--The table of contents of this title is as
follows:
Sec. 1001. Short title and table of contents.
Subtitle A--Commodity Programs
Sec. 1101. Wheat program.
Sec. 1102. Feed grain program.
Sec. 1103. Upland cotton program.
Sec. 1104. Rice program.
Sec. 1105. Dairy program.
Sec. 1106. Tobacco program.
Sec. 1107. Sugar program.
Sec. 1108. Oilseeds program.
Sec. 1109. Peanut program.
Sec. 1110. Honey program.
Sec. 1111. Wool and mohair program.
Subtitle B--Restructuring of Loan Programs
Sec. 1201. Electric and telephone loan programs.
Subtitle C--Food Stamp Program
Sec. 1301. Uniform reimbursement rates.
Subtitle D--Agricultural Trade
Sec. 1401. Market promotion program.
Sec. 1402. Acreage reduction requirements.
Sec. 1403. End-use certificates.
Sec. 1404. Sense of Congress regarding the export of vegetable oil.
Subtitle E--Miscellaneous
Sec. 1501. Federal crop insurance.
Sec. 1502. Environmental conservation acreage reserve program
amendments.
Sec. 1503. Admission, entrance, and recreation fees.
Sec. 1504. Sense of the Senate regarding deficit reduction.
Subtitle A--Commodity Programs
SEC. 1101. WHEAT PROGRAM.
Section 107B(c)(1)(E) of the Agricultural Act of 1949 (7 U.S.C.
1445b-3a(c)(1)(E)) is amended--
(1) in the subparagraph heading, by striking ``0/92
program'' and inserting ``0/85 program''; and
(2) by inserting after ``8 percent'' both places it appears
in clause (i) the following: ``for each of the 1991 through
1993 crops, and 15 percent for each of the 1994 and 1995 crops
(except as provided in clause (vii)),'', and by adding at the
end of the subparagraph the following new clause:
``(vii) Exceptions to 0/85.--In the case of
each of the 1994 and 1995 crops of wheat,
producers on a farm shall be eligible to
receive deficiency payments as provided in
clause (ii) if an acreage limitation program
under subsection (e) is in effect for the crop
and--
``(I)(aa) the producers have been
determined by the Secretary (in
accordance with section 503(c)) to be
prevented from planting the crop or
have incurred a reduced yield for the
crop (due to a natural disaster); and
``(bb) the producers elect to
devote a portion of the maximum payment
acres for wheat (as calculated under
subparagraph (C)(ii)) equal to more
than 8 percent of the wheat acreage, to
conservation uses; or
``(II) the producers elect to
devote a portion of the maximum payment
acres for wheat (as calculated under
subparagraph (C)(ii)) equal to more
than 8 percent of the wheat acreage, to
alternative crops as provided in
subparagraph (F).''.
SEC. 1102. FEED GRAIN PROGRAM.
(a) 0/92 Program.--Section 105B(c)(1)(E) of the Agricultural Act of
1949 (7 U.S.C. 1444f(c)(1)(E)) is amended--
(1) in the subparagraph heading, by striking ``0/92
program'' and inserting ``0/85 program''; and
(2) by inserting after ``8 percent'' both places it appears
in clause (i) the following: ``for each of the 1991 through
1993 crops, and 15 percent for each of the 1994 and 1995 crops
(except as provided in clause (vii)),'', and by adding at the
end of the subparagraph the following new clause:
``(vii) Exceptions to 0/85.--In the case of
each of the 1994 and 1995 crops of feed grains,
producers on a farm shall be eligible to
receive deficiency payments as provided in
clause (ii) if an acreage limitation program
under subsection (e) is in effect for the crop
and--
``(I)(aa) the producers have been
determined by the Secretary (in
accordance with section 503(c)) to be
prevented from planting the crop or
have incurred a reduced yield for the
crop (due to a natural disaster); and
``(bb) the producers elect to
devote a portion of the maximum payment
acres for feed grains (as calculated
under subparagraph (C)(ii)) equal to
more than 8 percent of the feed grain
acreage, to conservation uses; or
``(II) the producers elect to
devote a portion of the maximum payment
acres for feed grains (as calculated
under subparagraph (C)(ii)) equal to
more than 8 percent of the feed grain
acreage, to alternative crops as
provided in subparagraph (F).''.
(b) Technical Amendment.--Section 105B(c)(1)(B)(iii)(IV)(bb) of
such Act is amended by striking ``clause (i)(I)'' and inserting
``clauses (i)(I) and (ii)(I)''.
SEC. 1103. UPLAND COTTON PROGRAM.
(a) 50/92 Program.--Section 103B(c)(1)(D) of the Agricultural Act
of 1949 (7 U.S.C. 1444-2(c)(1)(D)) is amended--
(1) in the subparagraph heading, by striking ``50/92
program'' and inserting ``50/85 program''; and
(2) by inserting after ``8 percent'' both places it appears
in clause (i) the following: ``for each of the 1991 through
1993 crops, and 15 percent for each of the 1994 and 1995 crops
(except as provided in clause (v)(II)),'', and in clause (v)--
(A) by striking ``(v) Prevented planting.--If'' and
inserting the following:
``(v) Prevented planting and reduced
yields.--
``(I) 1991 through 1993 crops.--In
the case of each of the 1991 through
1993 crops of upland cotton, if''; and
(B) by adding at the end the following new
subclause:
``(II) 1994 and 1995 crops.--In the
case of each of the 1994 and 1995 crops
of upland cotton, producers on a farm
shall be eligible to receive deficiency
payments as provided in clause (iii) if
an acreage limitation program under
subsection (e) is in effect for the
crop and--
``(aa) the producers have
been determined by the
Secretary (in accordance with
section 503(c)) to be prevented
from planting the crop or have
incurred a reduced yield for
the crop (due to a natural
disaster) and the producers
elect to devote a portion of
the maximum payment acres for
upland cotton (as calculated
under subparagraph (C)(ii))
equal to more than 8 percent of
the upland cotton acreage, to
conservation uses; or
``(bb) the producers elect
to devote a portion of the
maximum payment acres for
upland cotton (as calculated
under subparagraph (C)(ii))
equal to more than 8 percent of
the upland cotton acreage, to
alternative crops as provided
in subparagraph (E).''.
(b) Acreage Limitation Program.--Section 103B(e)(1)(D) of such Act
is amended by inserting after ``30 percent'' the following: ``for each
of the 1991 through 1994 crops, and 29\1/2\ percent for the 1995
crop''.
SEC. 1104. RICE PROGRAM.
Section 101B(c)(1)(D) of the Agricultural Act of 1949 (7 U.S.C.
1441-2(c)(1)(D)) is amended--
(1) in the subparagraph heading, by striking ``50/92
program'' and inserting ``50/85 program''; and
(2) by inserting after ``8 percent'' both places it appears
in clause (i) the following: ``for each of the 1991 through
1993 crops, and 15 percent for each of the 1994 and 1995 crops
(except as provided in clause (v)(II)),'', and in clause (v)--
(A) by striking ``(v) Prevented planting.--If'' and
inserting the following:
``(v) Prevented planting and reduced
yields.--
``(I) 1991 through 1993 crops.--In
the case of each of the 1991 through
1993 crops of rice, if''; and
(B) by adding at the end the following new
subclause:
``(II) 1994 and 1995 crops.--In the
case of each of the 1994 and 1995 crops
of rice, producers on a farm shall be
eligible to receive deficiency payments
as provided in clause (iii) if an
acreage limitation program under
subsection (e) is in effect for the
crop and--
``(aa) the producers have
been determined by the
Secretary (in accordance with
section 503(c)) to be prevented
from planting the crop or have
incurred a reduced yield for
the crop (due to a natural
disaster) and the producers
elect to devote a portion of
the maximum payment acres for
rice (as calculated under
subparagraph (C)(ii)) equal to
more than 8 percent of the rice
acreage, to conservation uses;
or
``(bb) the producers elect
to devote a portion of the
maximum payment acres for rice
(as calculated under
subparagraph (C)(ii)) equal to
more than 8 percent of the rice
acreage, to alternative crops
as provided in subparagraph
(E).''.
SEC. 1105. DAIRY PROGRAM.
(a) In General.--Section 204 of the Agricultural Act of 1949 (7
U.S.C. 1446e) is amended--
(1) in subsection (c)(3)--
(A) in the first sentence of subparagraph (A), by
striking ``The Secretary'' and inserting ``Subject to
subparagraph (B), the Secretary'';
(B) by redesignating subparagraph (B) as
subparagraph (C); and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Guidelines.--In the case of purchases of
butter and nonfat dry milk that are made by the
Secretary under this section on or after the date of
enactment of this clause, in allocating the rate of
price support between the purchase prices of butter and
nonfat dry milk under this paragraph, the Secretary may
not--
``(i) offer to purchase butter for more
than $0.65 per pound; or
``(ii) offer to purchase nonfat dry milk
for less than $1.034 per pound.''; and
(2) in subsection (h)(2)--
(A) by striking ``and'' at the end of subparagraph
(A);
(B) by striking the period at the end of
subparagraph (B) and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(C) during calendar year 1996, 10 cents per
hundredweight of milk marketed, which rate shall be
adjusted on or before May 1 of calendar year 1996 in
the manner provided in subparagraph (B).''.
(b) Sale, Marketing, or Use of Bovine Growth Hormone.--Section 204
of such Act is amended--
(1) by redesignating subsection (k) as subsection (l); and
(2) by inserting after subsection (j) the following new
subsection:
``(k) Sale, Marketing, or Use of Bovine Growth Hormone.--
``(1) Definition of bovine growth hormone.--As used in this
subsection, the term `bovine growth hormone' means a synthetic
growth hormone produced through the process of recombinant DNA
techniques that is intended for use in bovine animals.
``(2) Prohibition on sale, marketing, or use.--During the
period beginning on the date of enactment of this paragraph and
ending on September 30, 1994, it shall be unlawful for a person
to sell, market, or use bovine growth hormone for commercial
agricultural purposes.
``(3) Enforcement.--Not later than 30 days after the date
of enactment of this paragraph, the Secretary shall issue
regulations to provide for the enforcement of the prohibition
contained in paragraph (2).''.
(c) Conforming Amendments.--Section 204 of such Act is amended--
(1) in the section heading, by striking ``1995'' and
inserting ``1996'';
(2) by striking ``1995'' each place it appears (other than
in subsection (h)(2)(B)) and inserting ``1996''; and
(3) in subsection (g)(2), by striking ``1994'' and
inserting ``1995''.
SEC. 1106. TOBACCO PROGRAM.
(a) Domestic Marketing Assessment.--Part I of subtitle B of title
III of the Agricultural Adjustment Act of 1938 (7 U.S.C. 1311 et seq.)
is amended by adding at the end the following new section:
``SEC. 320C. DOMESTIC MARKETING ASSESSMENT.
``(a) Certification.--A domestic manufacturer of cigarettes shall
certify to the Secretary, for each calendar year, the percentage of the
quantity of tobacco that the manufacturer uses to produce cigarettes
during the year that is produced in the United States.
``(b) Penalties.--
``(1) In general.--A domestic manufacturer of cigarettes
that has failed, as determined by the Secretary after notice
and opportunity for a hearing, to use in the manufacture of
cigarettes during a calendar year at least 75 percent of
tobacco produced in the United States, or to comply with
subsection (a), shall be subject to the requirements of
subsections (c), (d), and (e).
``(2) Failure to certify.--For purposes of this section, if
a manufacturer fails to comply with subsection (a), the
manufacturer shall be presumed to have used only imported
tobacco in the manufacture of cigarettes produced by the
manufacturer.
``(3) Reports and records.--The Secretary may require a
manufacturer to make such reports and maintain such records as
are necessary to carry out this section in accordance with
section 373.
``(c) Domestic Marketing Assessment.--
``(1) In general.--A domestic manufacturer of cigarettes
described in subsection (b) shall remit to the Commodity Credit
Corporation a nonrefundable marketing assessment in accordance
with this subsection.
``(2) Amount.--The amount of an assessment imposed on a
manufacturer under this subsection shall be determined by
multiplying--
``(A) the quantity by which the quantity of
imported tobacco used by the manufacturer to produce
cigarettes during a preceding calendar year exceeds 25
percent of the quantity of all tobacco used by the
manufacturer to produce cigarettes during the preceding
calendar year; by
``(B) the difference between--
``(i) \1/2\ of the sum of--
``(I) the average price per pound
received by domestic producers for
Burley tobacco during the preceding
calendar year; and
``(II) the average price per pound
received by domestic producers for
Flue-cured tobacco during the preceding
calendar year; and
``(ii) the average price per pound of
unmanufactured imported tobacco during the
preceding calendar year, as determined by the
Secretary.
``(3) Collection.--An assessment imposed under this
subsection shall be--
``(A) collected by this Secretary and transmitted
to the Commodity Credit Corporation; and
``(B) enforced in the same manner as provided in
section 320B.
``(d) Purchase of Burley Tobacco.--
``(1) In general.--A domestic manufacturer of cigarettes
described in subsection (b) shall purchase from the inventories
of the producer-owned cooperative marketing associations for
Burley tobacco described in section 320B(a)(2), at the
applicable list price published by the association, the
quantity of tobacco described in paragraph (2).
``(2) Quantity.--Subject to paragraph (3), the quantity of
Burley tobacco required to be purchased by a manufacturer
during a calendar year under this subsection shall equal \1/2\
of the quantity of imported tobacco used by the manufacturer to
produce cigarettes during the preceding calendar year that
exceeds 25 percent of the quantity of all tobacco used by the
manufacturer to produce cigarettes during the preceding
calendar year.
``(3) Limitation.--If the total quantity of Burley tobacco
required to be purchased by all manufacturers under paragraph
(2) would reduce the inventories of the producer-owned
cooperative marketing associations for Burley tobacco to less
than the reserve stock level for Burley tobacco, the Secretary
shall reduce the quantity of tobacco required to be purchased
by manufacturers under paragraph (2), on a pro rata basis, to
ensure that the inventories will not be less than the reserve
stock level for Burley tobacco.
``(4) Noncompliance.--If a manufacturer fails to purchase
from the inventories of the producer-owned cooperative
marketing associations the quantity of Burley tobacco required
under this subsection, the manufacturer shall be subject to a
penalty of 75 percent of the average market price (calculated
to the nearest whole cent) for Burley tobacco for the
immediately preceding year on the quantity of tobacco as to
which the failure occurs.
``(5) Purchase requirements.--Tobacco purchased by a
manufacturer under this subsection shall not be included in
determining the quantity of tobacco purchased by the
manufacturer under section 320B.
``(e) Purchase of Flue-Cured Tobacco.--
``(1) In general.--A domestic manufacturer of cigarettes
described in subsection (b) shall purchase from the inventories
of the producer-owned cooperative marketing association for
Flue-cured tobacco described in section 320B(a)(2), at the
applicable list price published by the association, the
quantity of tobacco described in paragraph (2).
``(2) Quantity.--Subject to paragraph (3), the quantity of
Flue-cured tobacco required to be purchased by a manufacturer
during a calendar year under this subsection shall equal \1/2\
of the quantity of imported tobacco used by the manufacturer to
produce cigarettes during the preceding calendar year that
exceeds 25 percent of the quantity of all tobacco used by the
manufacturer to produce cigarettes during the preceding
calendar year.
``(3) Limitation.--If the total quantity of Flue-cured
tobacco required to be purchased by all manufacturers under
paragraph (2) would reduce the inventories of the producer-
owned cooperative marketing association for Flue-cured tobacco
to less than the reserve stock level for Flue-cured tobacco,
the Secretary shall reduce the quantity of tobacco required to
be purchased by manufacturers under paragraph (2), on a pro
rata basis, to ensure that the inventories will not be less
than the reserve stock level for Flue-cured tobacco.
``(4) Noncompliance.--If a manufacturer fails to purchase
from the inventories of the producer-owned cooperative
marketing association the quantity of Flue-cured tobacco
required under this subsection, the manufacturer shall be
subject to a penalty of 75 percent of the average market price
(calculated to the nearest whole cent) for Flue-cured tobacco
for the immediately preceding year on the quantity of tobacco
as to which the failure occurs.
``(5) Purchase requirements.--Tobacco purchased by a
manufacturer under this subsection shall not be included in
determining the quantity of tobacco purchased by the
manufacturer under section 320B.
``(f) Enforcement.--The Secretary may enforce this section in the
courts of the United States.''.
(b) Budget Deficit Assessment.--
(1) In general.--Section 106 of the Agricultural Act of
1949 (7 U.S.C. 1445) is amended--
(A) in subsection (g)(1), by striking ``1995'' and
inserting ``1998''; and
(B) by adding at the end the following new
subsection:
``(h)(1) Effective only for each of the 1994 through 1998 crops of
tobacco, an importer of tobacco that is produced outside the United
States shall remit to the Commodity Credit Corporation a nonrefundable
marketing assessment in an amount equal to the product obtained by
multiplying--
``(A) the number of pounds of tobacco that is imported by
the importer; by
``(B) the sum of--
``(i) the per pound marketing assessment imposed on
purchasers of domestic Burley tobacco pursuant to
subsection (g); and
``(ii) the per pound marketing assessment imposed
on purchasers of domestic Flue-cured tobacco pursuant
to subsection (g).
``(2) An assessment imposed under this subsection shall be paid by
the importer.
``(3)(A) The importer shall remit the assessment at such time and
in such manner as may be prescribed by the Secretary.
``(B) If the importer fails to comply with subparagraph (A), the
importer shall be liable for a marketing penalty at a rate equal to
37.5 percent of the sum of the average market price (calculated to the
nearest whole cent) of Flue-cured and Burley tobacco for the
immediately preceding year on the quantity of tobacco as to which the
failure occurs.
``(C) The Secretary may reduce an assessment in such amount as the
Secretary determines equitable in any case in which the Secretary
determines that the failure was unintentional or without knowledge on
the part of the person concerned.
``(D) Any assessment provided for under this subsection shall be
assessed by the Secretary after notice and opportunity for a hearing.
``(4)(A) Any person against whom a penalty is assessed under this
subsection may obtain review of the penalty in an appropriate district
court of the United States by filing a civil action in the court not
later than 30 days after the penalty is imposed.
``(B) The Secretary shall promptly file in the court a certified
copy of the record on which the penalty is based.
``(5) The district courts of the United States shall have
jurisdiction to review and enforce any penalty imposed under this
subsection.
``(6) An amount equivalent to any penalty collected by the
Secretary under this subsection shall be deposited for use by the
Commodity Credit Corporation.''.
(2) Importer assessments for no net cost tobacco fund.--
Section 106A of such Act (7 U.S.C. 1445-1) is amended--
(A) in subsection (c), by inserting ``and
importers'' after ``purchasers'';
(B) in subsection (d)(1)(A)--
(i) by striking ``and'' at the end of
clause (i); and
(ii) by inserting after clause (ii) the
following new clause:
``(iii) each importer of Flue-cured or
Burley tobacco shall pay to the appropriate
association, for deposit in the Fund of the
association, an assessment, in an amount that
is equal to the product obtained by
multiplying--
``(I) the number of pounds of
tobacco that is imported by the
importer; by
``(II) the sum of the amount of per
pound producer contributions and
purchaser assessments that are payable
by domestic producers and purchasers of
Flue-cured and Burley tobacco under
clauses (i) and (ii); and'';
(C) in subsection (d)(2)--
(i) by inserting ``or importer'' after ``or
purchaser'';
(ii) by striking ``and'' at the end of
subparagraph (B);
(iii) by inserting ``and'' at the end of
subparagraph (C); and
(iv) by adding at the end the following new
subparagraph:
``(D) if the tobacco involved is imported by an
importer, from the importer.''; and
(D) in subsection (h)(1)--
(i) by redesignating subparagraphs (B) and
(C) as subparagraphs (C) and (D), respectively;
and
(ii) by inserting after subparagraph (A)
the following new subparagraph:
``(B) Each importer who fails to pay to the association an
assessment as required by subsection (d)(2) at such time and in such
manner as may be prescribed by the Secretary, shall be liable, in
addition to any amount due, to a marketing penalty at a rate equal to
75 percent of the average market price (calculated to the nearest whole
cent) for the respective kind of tobacco for the immediately preceding
year on the quantity of tobacco as to which the failure occurs.''.
(3) Importer assessments to no net cost tobacco account.--
Section 106B of such Act (7 U.S.C. 1445-2) is amended--
(A) in subsection (c)(1), by striking ``producers
and purchasers'' and inserting ``producers, purchasers,
and importers'';
(B) in subsection (d)(1)--
(i) by designating the first and second
sentences as subparagraphs (A) and (B),
respectively; and
(ii) by adding at the end the following new
subparagraph:
``(C) The Secretary shall also require (in lieu of any requirement
under section 106A(d)(1)) that each importer of Flue-cured and Burley
tobacco shall pay to the Corporation, for deposit in the Account of the
association, an assessment, as determined under paragraph (2) and
collected under paragraph (3), with respect to purchases of all such
kind of tobacco imported by the importer.'';
(C) in subsection (d)(2), by adding at the end the
following new subparagraph:
``(C) The amount of the assessment to be paid by importers shall be
an amount that is equal to the product obtained by multiplying--
``(i) the number of pounds of tobacco that is imported by
the importer; by
``(ii) the sum of the amount of per pound producer and
purchaser assessments that are payable by domestic producers
and purchasers of the respective kind of tobacco under this
paragraph.'';
(D) in subsection (d)(3), by adding at the end the
following new subparagraph:
``(D) If Flue-cured or Burley tobacco is imported by an importer,
any importer assessment required by subsection (d) shall be collected
from the importer.''; and
(E) in subsection (j)(1)--
(i) by redesignating subparagraphs (B) and
(C) as subparagraphs (C) and (D), respectively;
and
(ii) by inserting after subparagraph (A)
the following new subparagraph:
``(B) Each importer who fails to pay to the Corporation an
assessment as required by subsection (d) at such time and in such
manner as may be prescribed by the Secretary, shall be liable, in
addition to any amount due, to a marketing penalty at a rate equal to
75 percent of the average market price (calculated to the nearest whole
cent) for the respective kind of tobacco for the immediately preceding
year on the quantity of tobacco as to which the failure occurs.''.
(c) Fees for Inspecting Imported Tobacco.--The second sentence of
section 213(d) of the Tobacco Adjustment Act of 1983 (7 U.S.C. 511r(d))
is amended by inserting before the period at the end the following: ``,
and which shall be comparable to fees and charges fixed and collected
for services provided in connection with tobacco produced in the United
States''.
(d) Extension of Quota Reduction Floors.--
(1) Burley tobacco.--Section 319(c)(3)(C)(ii) of the
Agricultural Adjustment Act of 1938 (7 U.S.C.
1314e(c)(3)(C)(ii)) is amended--
(A) by striking ``1993'' and inserting ``1996'';
and
(B) by inserting before the period at the end the
following: ``, except that, in the case of each of the
1995 and 1996 crops of Burley tobacco, the Secretary
may waive the requirements of this clause if the
Secretary determines that the requirements would likely
result in inventories of the producer-owned cooperative
marketing associations for Burley tobacco described in
section 320B(a)(2) to exceed 150 percent of the reserve
stock level for Burley tobacco''.
(2) Flue-cured tobacco.--Section 317(a)(1)(C)(ii) of such
Act (7 U.S.C. 1314c(a)(1)(C)(ii)) is amended--
(A) by striking ``1993'' and inserting ``1996'';
and
(B) by inserting before the period at the end the
following: ``, except that, in the case of each of the
1995 and 1996 crops of Flue-cured tobacco, the
Secretary may waive the requirements of this clause if
the Secretary determines that the requirements would
likely result in inventories of the producer-owned
cooperative marketing association for Flue-cured
tobacco described in section 320B(a)(2) to exceed 150
percent of the reserve stock level for Flue-cured
tobacco''.
SEC. 1107. SUGAR PROGRAM.
Section 206(i) of the Agricultural Act of 1949 (7 U.S.C. 1446g(i))
is amended--
(1) in paragraph (1), by striking ``equal to'' and all that
follows through the period and inserting the following: ``equal
to--
``(A) in the case of marketings during each of
fiscal years 1992 through 1994, .18 cents per pound of
raw cane sugar, processed by the processor from
domestically produced sugarcane or sugarcane molasses,
that has been marketed (including the transfer or
delivery of the sugar to a refinery for further
processing or marketing); and
``(B) in the case of marketings during each of
fiscal years 1995 and 1996, .198 cents per pound of raw
cane sugar, processed by the processor from
domestically produced sugarcane or sugarcane molasses,
that has been marketed (including the transfer or
delivery of the sugar to a refinery for further
processing or marketing).''; and
(2) in paragraph (2), by striking ``equal to'' and all that
follows through the period and inserting the following: ``equal
to--
``(A) in the case of marketings during each of
fiscal years 1992 through 1994, .193 cents per pound of
beet sugar, processed by the processor from
domestically produced sugar beets or sugar beet
molasses, that has been marketed; and
``(B) in the case of marketings during each of
fiscal years 1995 and 1996, .2123 cents per pound of
beet sugar, processed by the processor from
domestically produced sugar beets or sugar beet
molasses, that has been marketed.''.
SEC. 1108. OILSEEDS PROGRAM.
(a) Loan Level.--Section 205(c) of the Agricultural Act of 1949 (7
U.S.C. 1446f(c)) is amended--
(1) in paragraph (1), by inserting after ``$5.02 per
bushel'' the following: ``for each of the 1991 through 1993
crops and $4.92 per bushel for each of the 1994 and 1995
crops''; and
(2) in paragraph (2), by inserting after ``$0.089 per
pound'' the following: ``for each of the 1991 through 1993
crops and $0.087 per pound for each of the 1994 and 1995
crops''.
(b) Loan Maturity.--Section 205(h) of such Act is amended by
striking ``mature on the last day of the 9th month following the month
the application for the loan is made.'' and inserting the following:
``mature--
``(1) in the case of each of the 1991 through 1993 crops,
on the last day of the 9th month following the month the
application for the loan is made; and
``(2) in the case of each of the 1994 and 1995 crops, on
the last day of the 9th month following the month the
application for the loan is made, except that the loan may not
mature later than the last day of the fiscal year in which the
application is made.''.
(c) Loan Origination Fee.--Section 205(m) of such Act is amended by
adding at the end the following new paragraph:
``(3) Applicability.--This subsection shall apply only to
each of the 1991 through 1993 crops of oilseeds.''.
SEC. 1109. PEANUT PROGRAM.
Section 108B(g) of the Agricultural Act of 1949 (7 U.S.C. 1445c-
3(g)) is amended--
(1) in paragraph (1), by inserting after ``1 percent'' both
places it appears the following: ``for each of the 1991 through
1993 crops, and 1.1 percent for each of the 1994 and 1995
crops,''; and
(2) in paragraph (2)(A)--
(A) in clause (i), by striking ``\1/2\ percent''
and inserting ``.5 percent for each of the 1991 through
1993 crops, and .6 percent for each of the 1994 and
1995 crops,''; and
(B) in clause (ii), by striking ``\1/2\ percent''
and inserting ``.5 percent''.
SEC. 1110. HONEY PROGRAM.
(a) Reduced Support Rate.--Section 207(a) of the Agricultural Act
of 1949 (7 U.S.C. 1446h(a)) is amended by striking ``than 53.8 cents
per pound.'' and inserting the following: ``than--
``(1) 53.8 cents per pound for each of the 1991 through
1993 crops; and
``(2) 47 cents per pound for each of the 1994 through 1997
crops.''.
(b) Payment Limitations.--Section 207(e)(1) of such Act is
amended--
(1) by striking ``and'' at the end of subparagraph (C); and
(2) by striking subparagraph (D) and inserting the
following new subparagraphs:
``(D) $125,000 in the 1994 crop year;
``(E) $100,000 in the 1995 crop year;
``(F) $75,000 in the 1996 crop year; and
``(G) $50,000 in the 1997 crop year.''.
(c) Conforming Amendments.--Section 207 of such Act (as amended by
subsection (b)) is further amended by striking ``1995'' each place it
appears (other than in subsection (e)(1)(E)) and inserting ``1997''.
SEC. 1111. WOOL AND MOHAIR PROGRAM.
(a) Payment Limitations.--Section 704(b)(1) of the National Wool
Act of 1954 (7 U.S.C. 1783(b)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (C); and
(2) by striking subparagraph (D) and inserting the
following new subparagraphs:
``(D) $125,000 for the 1994 marketing year;
``(E) $100,000 for the 1995 marketing year;
``(F) $75,000 for the 1996 marketing year; and
``(G) $50,000 for the 1997 marketing year.''.
(b) Support Price for Shorn Wool.--Paragraph (3) of section 703(b)
of such Act (7 U.S.C. 1782(b)(3)) is amended to read as follows:
``(3) Effective only for each of the 1994 through 1997 marketing
years, the support price for shorn wool shall not exceed the support
price for shorn wool for the 1993 marketing year.''.
(c) Marketing Assessment.--Section 704(c) of such Act (7 U.S.C.
1783(c)) is amended by striking ``through 1995'' and inserting ``and
1992''.
(d) Marketing Charges.--Section 706 of such Act (7 U.S.C. 1785) is
amended by inserting after the second sentence the following new
sentence: ``In determining the net sales proceeds and national payment
rates for shorn wool and shorn mohair, the Secretary shall not deduct
marketing charges for commissions, coring, or grading.''.
(e) Technical and Conforming Amendments.--
(1) Technical amendment.--Section 703(b)(2) of such Act (7
U.S.C. 1782(b)(2)) is amended by striking ``1982'' and
inserting ``1990''.
(2) Conforming amendments.--Section 703 of such Act (7
U.S.C. 1782) is amended by striking ``1995'' both places it
appears in subsections (a) and (b) and inserting ``1997''.
Subtitle B--Restructuring of Loan Programs
SEC. 1201. ELECTRIC AND TELEPHONE LOAN PROGRAMS.
(a) Loan Programs Under the Rural Electrification Act of 1936.--
(1) Insured loan programs.--Section 305 of the Rural
Electrification Act of 1936 (7 U.S.C. 935) is amended--
(A) by striking subsections (b) and (d);
(B) by redesignating subsection (c) as subsection
(b); and
(C) by inserting after subsection (b) (as so
redesignated) the following new subsections:
``(c) Insured Electric Loans.--
``(1) Hardship loans.--
``(A) In general.--The Administrator shall make
insured electric loans, to the extent of qualifying
applications for the loans, at an interest rate of 5
percent per year to any applicant for a loan who meets
each of the following requirements:
``(i) The average revenue per kilowatt-hour
sold by the applicant is not less than 120
percent of the average revenue per kilowatt-
hour sold by all utilities in the State in
which the applicant provides service.
``(ii) The average residential revenue per
kilowatt-hour sold by the applicant is not less
than 120 percent of the average residential
revenue per kilowatt-hour sold by all utilities
in the State in which the applicant provides
service.
``(iii) The average per capita income of
the residents receiving electric service from
the applicant is less than the average per
capita income of the residents of the State in
which the applicant provides service, or the
median household income of the households
receiving electric service from the applicant
is less than the median household income of the
households in the State.
``(B) Severe hardship loans.--In addition to
hardship loans that are made under subparagraph (A),
the Administrator may make an insured electric loan at
an interest rate of 5 percent per year to an applicant
for a loan if, in the sole discretion of the
Administrator, the applicant has experienced a severe
hardship.
``(C) Limitation.--The Administrator may not make a
loan under this paragraph to an applicant for the
purpose of furnishing or improving electric service to
a consumer located in an urban area (as defined by the
Bureau of the Census) if the average number of
consumers per mile of line of the total electric system
of the applicant exceeds 17.
``(2) Municipal rate loans.--
``(A) In general.--The Administrator shall make
insured electric loans, to the extent of qualifying
applications for the loans, at the interest rate
described in subparagraph (B) for the term or terms
selected by the applicant pursuant to subparagraph (C).
``(B) Interest rate.--
``(i) In general.--Subject to clause (ii),
the interest rate described in this
subparagraph on a loan to a qualifying
applicant shall be--
``(I) the interest rate determined
by the Administrator to be equal to the
current market yield on outstanding
municipal obligations with remaining
periods to maturity similar to the term
selected by the applicant pursuant to
subparagraph (C), but not greater than
the rate determined under section
307(a)(3)(A) of the Consolidated Farm
and Rural Development Act (7 U.S.C.
1927(a)(3)(A)) that is based on the
current market yield on outstanding
municipal obligations; plus
``(II) if the applicant for the
loan makes an election pursuant to
subparagraph (D) to include in the loan
agreement the right of the applicant to
prepay the loan, a rate equal to the
amount by which--
``(aa) the interest rate on
commercial loans for a similar
period that afford the borrower
such a right; exceeds
``(bb) the interest rate on
commercial loans for the period
that do not afford the borrower
such a right.
``(ii) Maximum rate.--The interest rate
described in this subparagraph on a loan to an
applicant for the loan shall not exceed 7
percent if--
``(I) the average number of
consumers per mile of line of the total
electric system of the applicant is
less than 5.50; or
``(II)(aa) the average revenue per
kilowatt-hour sold by the applicant is
more than the average revenue per
kilowatt-hour sold by all utilities in
the State in which the applicant
provides service; and
``(bb) the average per capita
income of the residents receiving
electric service from the applicant is
less than the average per capita income
of the residents of the State in which
the applicant provides service, or the
median household income of the
households receiving electric service
from the applicant is less than the
median household income of the
households in the State.
``(iii) Exception.--Clause (ii) shall not
apply to a loan to be made to an applicant for
the purpose of furnishing or improving electric
service to consumers located in an urban area
(as defined by the Bureau of the Census) if the
average number of consumers per mile of line of
the total electric system of the applicant
exceeds 17.
``(C) Loan term.--
``(i) In general.--Subject to clause (ii),
the applicant for a loan under this paragraph
may select the term for which an interest rate
shall be determined pursuant to subparagraph
(B), and, at the end of the term (and any
succeeding term selected by the applicant under
this subparagraph), may renew the loan for
another term selected by the applicant.
``(ii) Maximum term.--
``(I) Applicant.--The applicant may
not select a term that ends more than
35 years after the beginning of the
first term the applicant selects under
clause (i).
``(II) Administrator.--The
Administrator may prohibit an applicant
from selecting a term that would result
in the total term of the loan being
greater than the expected useful life
of the assets being financed.
``(D) Call provision.--The Administrator shall
offer any applicant for a loan under this paragraph the
option to include in the loan agreement the right of
the applicant to prepay the loan on terms consistent
with similar provisions of commercial loans.
``(3) Other source of credit not required in certain
cases.--The Administrator may not require any applicant for a
loan made under this subsection who is eligible for a loan
under paragraph (1) to obtain a loan from another source as a
condition of approving the application for the loan or
advancing any amount under the loan.
``(d) Insured Telephone Loans.--
``(1) Hardship loans.--
``(A) In general.--The Administrator shall make
insured telephone loans, to the extent of qualifying
applications for the loans, at an interest rate of 5
percent per year, to any applicant who meets each of
the following requirements:
``(i) The average number of subscribers per
mile of line in the proposed service area of
the applicant is not more than 4.
``(ii) The applicant is capable of
producing net income or margins, after interest
payments on the loan applied for, of not less
than 100 percent (but not more than 300
percent) of the interest requirements on all of
the outstanding and proposed loans of the
applicant.
``(iii) The Administrator has approved a
telecommunications modernization plan for the
State under paragraph (3) and, if the plan was
developed by telephone borrowers under this
title, the applicant is a participant in the
plan.
``(B) Authority to waive tier requirement.--The
Administrator may waive the requirement of subparagraph
(A)(ii) in any case in which the Administrator
determines (and sets forth the reasons for the waiver
in writing) that the requirement would prevent
emergency restoration of the telephone system of the
applicant or result in severe hardship to the
applicant.
``(C) Effect of lack of funds.--On request of any
applicant who is eligible for a loan under this
paragraph for which funds are not available, the
applicant shall be considered to have applied for a
loan under title IV.
``(2) Cost-of-money loans.--
``(A) In general.--The Administrator may make
insured telephone loans for the acquisition, purchase,
and installation of telephone lines, systems, and
facilities (other than buildings used primarily for
administrative purposes, vehicles not used primarily in
construction, and customer premise equipment) related
to the furnishing, improvement, or extension of rural
telecommunications service, at an interest rate equal
to the then current cost of money to the Government of
the United States for loans of similar maturity, but
not more than 7 percent per year, to any applicant for
a loan who meets the following requirements:
``(i) The average number of subscribers per
mile of line in the service area of the
applicant is not more than 15.
``(ii) The applicant is capable of
producing net income or margins, before
interest payments on the loan applied for, of
not less than 100 percent (but not more than
500 percent) of the interest requirements on
all of the outstanding and proposed loans of
the applicant.
``(iii) The Administrator has approved a
telecommunications modernization plan for the
State under paragraph (3), and, if the plan was
developed by telephone borrowers under this
title, the applicant is a participant in the
plan.
``(B) Call provision.--The Administrator shall
offer any applicant for a loan under this paragraph the
option to include in the loan agreement the right of
the applicant to prepay the loan on terms consistent
with similar provisions of commercial loans.
``(C) Concurrent loan authority.--On request of any
applicant for a loan under this paragraph during any
fiscal year, the Administrator shall--
``(i) consider the application to be for a
loan under this paragraph and a loan under
section 408; and
``(ii) if the applicant is eligible for a
loan, make a loan to the applicant under this
paragraph in an amount equal to the amount that
bears the same ratio to the total amount of
loans for which the applicant is eligible under
this paragraph and under section 408, as the
amount made available for loans under this
paragraph for the fiscal year bears to the
total amount made available for loans under
this paragraph and under section 408 for the
fiscal year.
``(D) Effect of lack of funds.--On request of any
applicant who is eligible for a loan under this
paragraph for which funds are not available, the
applicant shall be considered to have applied for a
loan guarantee under section 306.
``(3) State telecommunications modernization plans.--
``(A) Approval.--If, not later than 180 days after
final regulations are promulgated to carry out this
paragraph, the public utility commission of any State
develops a telecommunications modernization plan that
meets the requirements of subparagraph (B), the
Administrator shall approve the plan for the State. If
a State does not develop a plan in accordance with the
requirements of the preceding sentence, the
Administrator shall approve any telecommunications
modernization plan for the State that meets the
requirements that is developed by a majority of the
borrowers of telephone loans made under this title who
are located in the State.
``(B) Requirements.--For purposes of subparagraph
(A), a telecommunications modernization plan must, at a
minimum, meet the following objectives:
``(i) The plan must provide for the
elimination of party line service.
``(ii) The plan must provide for the
availability of telecommunications services for
improved business, educational, and medical
services.
``(iii) The plan must encourage and improve
computer networks and information highways for
subscribers in rural areas.
``(iv) The plan must provide for--
``(I) subscribers in rural areas to
be able to receive through telephone
lines--
``(aa) multiple voices;
``(bb) video images; and
``(cc) data at a rate of at
least 1,000,000 bits of
information per second; and
``(II) the proper routing of
information to subscribers.
``(v) The plan must provide for uniform
deployment schedules to ensure that advanced
services are deployed at the same time in rural
and nonrural areas.
``(vi) The plan must provide for such
additional requirements for service standards
as may be required by the Administrator.
``(C) Finality of approval.--
``(i) In general.--A telecommunications
modernization plan approved under subparagraph
(A) may not subsequently be disapproved.
Notwithstanding subsection (c)(1)(A)(iii),
subsection (c)(2)(A)(iii), and section
408(b)(4)(C), the Administrator and the
Governor of the telephone bank may make a loan
to a borrower serving a State that does not
have a telecommunication modernization plan
approved by the Administrator if the loan is
made less than 1 year after the Administrator
has adopted final regulations implementing
subsection (c)(3).''.
(2) Rural telephone bank loan program.--Section 408 of such
Act (7 U.S.C. 948) is amended--
(A) in subsection (a), by striking ``, (2)'' and
all that follows through ``408 of this Act,'' and
inserting ``, (2) for the acquisition, purchase, and
installation of telephone lines, systems, and
facilities (other than buildings used primarily for
administrative purposes, vehicles not used primarily in
construction, and customer premise equipment) related
to the furnishing, improvement, or extension of rural
telecommunications service,''; and
(B) in subsection (b)--
(i) by striking paragraph (4) and inserting
the following new paragraph:
``(4) The Governor of the telephone bank may make a loan
under this section only to an applicant for the loan who meets
the following requirements:
``(A) The average number of subscribers per mile of
line in the service area of the applicant is not more
than 15.
``(B) The applicant is capable of producing net
income or margins, after interest payments on the loan
applied for, of not less than 100 percent (but not more
than 500 percent) of the interest requirements on all
of the outstanding and proposed loans of the applicant.
``(C) The Administrator has approved, under section
305(d)(3), a telecommunications modernization plan for
the State in which the applicant is located, and, if
the plan was developed by telephone borrowers under
title III, the applicant is a participant in the
plan.'';
(ii) in paragraph (8)--
(I) by inserting ``(A)'' after
``(8)'';
(II) by striking ``if such
prepayment is not made later than
September 30, 1988'' and inserting
``except for any prepayment penalty
provided for in a loan agreement
entered into before the date of
enactment of the Omnibus Budget
Reconciliation Act of 1993''; and
(III) by adding at the end the
following new subparagraph:
``(B) If a borrower prepays part or all of a loan made
under this section, then, notwithstanding section 407(b), the
Governor of the telephone bank shall use the full amount of the
prepayment to repay obligations of the telephone bank issued
pursuant to section 407(b) before October 1, 1991, to the
extent any such obligations are outstanding.''; and
(iii) by adding at the end the following
new paragraphs:
``(9) On request of any applicant for a loan under this
section during any fiscal year, the Governor of the telephone
bank shall--
``(A) consider the application to be for a loan
under this section and a loan under section 305(d)(2);
and
``(B) if the applicant is eligible for a loan, make
a loan to the applicant under this section in an amount
equal to the amount that bears the same ratio to the
total amount of loans for which the applicant is
eligible under this section and under section
305(d)(2), as the amount made available for loans under
this section for the fiscal year bears to the total
amount made available for loans under this section and
under section 305(d)(2) for the fiscal year.
``(10) On request of any applicant who is eligible for a
loan under this section for which funds are not available, the
applicant shall be considered to have applied for a loan under
section 305(d)(2).''.
(3) Funding.--Section 314 of such Act (7 U.S.C. 940d) is
amended to read as follows:
``SEC. 314. LIMITATIONS ON AUTHORIZATION OF APPROPRIATIONS.
``(a) Definition of Adjustment Percentage.--As used in this
section, the term `adjustment percentage' means, with respect to a
fiscal year, the percentage (if any) by which--
``(1) the average of the Consumer Price Index (as defined
in section 1(f)(5) of the Internal Revenue Code of 1986) for
the 1-year period ending on July 31 of the immediately
preceding fiscal year; exceeds
``(2) the average of the Consumer Price Index (as so
defined) for the 1-year period ending on July 31, 1993.
``(b) Fiscal Years 1994 through 1998.--In the case of each of
fiscal years 1994 through 1998, there are authorized to be appropriated
to the Administrator such sums as may be necessary for the cost of
loans in the following amounts, for the following purposes:
``(1) Electric hardship loans.--For loans under section
305(c)(1)--
``(A) for fiscal year 1994, $125,000,000; and
``(B) for each of fiscal years 1995 through 1998,
$125,000,000, increased by the adjustment percentage
for the fiscal year.
``(2) Electric municipal rate loans.--For loans under
section 305(c)(2)--
``(A) for fiscal year 1994, $600,000,000; and
``(B) for each of fiscal years 1995 through 1998,
$600,000,000, increased by the adjustment percentage
for the fiscal year.
``(3) Telephone hardship loans.--For loans under section
305(d)(1)--
``(A) for fiscal year 1994, $125,000,000; and
``(B) for each of fiscal years 1995 through 1998,
$125,000,000, increased by the adjustment percentage
for the fiscal year.
``(4) Telephone cost-of-money loans.--For loans under
section 305(d)(2)--
``(A) for fiscal year 1994, $198,000,000; and
``(B) for each of fiscal years 1995 through 1998,
$198,000,000, increased by the adjustment percentage
for the fiscal year.
``(c) Funding Levels.--The Administrator shall make insured loans
under this title for the purposes, in the amounts, and for the periods
of time specified in subsection (b), as provided in advance in
appropriations Acts.
``(d) Availability of Funds for Insured Loans.--Amounts made
available for loans under section 305 are authorized to remain
available until expended.''.
(4) Miscellaneous amendments.--
(A) Section 2 of such Act (7 U.S.C. 902) is
amended--
(i) by inserting ``(a)'' before ``The
Administrator'';
(ii) by striking ``telephone service in
rural areas, as hereinafter provided;'' and
inserting ``electric and telephone service in
rural areas, as provided in this Act, and for
the purpose of assisting electric borrowers to
implement demand side management and energy
conservation programs;''; and
(iii) by adding at the end the following
new subsection:
``(b) Not later than January 1, 1994, the Administrator shall issue
interim regulations to implement the authority contained in subsection
(a) to make loans for the purpose of assisting electric borrowers to
implement demand side management and energy conservation programs. If
the regulations are not issued by January 1, 1994, the Administrator
shall consider any demand side management program that is approved by a
State agency to be eligible for the loans.''.
(B) Section 4 of such Act (7 U.S.C. 904) is amended
by inserting after ``central station service'' the
following: ``and for the furnishing and improving of
electric service to persons in rural areas, including
by assisting electric borrowers to implement demand
side management and energy conservation programs''.
(C) Section 13 of such Act (7 U.S.C. 913) is
amended--
(i) by inserting ``, except as provided in
section 203(b),'' before ``shall be deemed to
mean any area''; and
(ii) by striking ``city, village, or
borough having a population in excess of
fifteen hundred inhabitants'' and inserting
``urban area, as defined by the Bureau of the
Census''.
(D) Section 203(b) of such Act (7 U.S.C. 924(b)) is
amended by striking ``one thousand five hundred'' and
inserting ``5,000''.
(E) Section 305 of such Act (7 U.S.C. 935) (as
amended by subsection (a)(1)) is further amended--
(i) by striking ``Sec. 305. Insured Loans;
Interest Rates and Lending Levels.--(a) The''
and inserting the following:
``SEC. 305. INSURED LOANS; INTEREST RATES AND LENDING LEVELS.
``(a) In General.--The''; and
(ii) in subsection (b), by striking ``(b)
Loans'' and inserting ``(b) Insured Loans.--
Loans''.
(F) Section 307 of such Act (7 U.S.C. 937) is
amended by adding at the end the following new
sentence: ``The Administrator may not request any
applicant for an electric loan under this Act to apply
for and accept a loan in an amount exceeding 30 percent
of the credit needs of the applicant.''.
(G) Section 406 of such Act (7 U.S.C. 946) is
amended by adding at the end the following new
subsection:
``(i) The Governor of the telephone bank may invest in obligations
of the United States the amounts in the account in the Treasury of the
United States numbered 12X8139 (known as the `RTB Equity Fund').''.
(H) Section 18 of such Act (7 U.S.C. 918) is
amended--
(i) by inserting ``(a) No Consideration of
Borrower's Level of General Funds.--'' before
``The Administrator''; and
(ii) by adding at the end the following new
subsections:
``(b) No Loan Origination Fees.--The Administrator and the Governor
of the telephone bank may not charge any fee or charge not expressly
provided in this Act in connection with any loan made or guaranteed
under this Act.
``(c) Consultants.--
``(1) In general.--To facilitate timely action on
applications by borrowers for financial assistance under this
Act and for approvals required of the agency pursuant to the
terms of outstanding loan or security instruments or otherwise,
the Administrator may use consultants funded by the borrower,
paid for out of the general funds of the borrower, for
financial, legal, engineering, and other technical advice and
services in connection with the review of the application by
the Rural Electrification Administration.
``(2) Conflicts of interest.--The Administrator shall
establish procedures for the selection and the provision of
technical services by consultants to ensure that the
consultants have no financial or other potential conflicts of
interest in the outcome of the application of the borrower.
``(3) Payment of costs.--The Administrator may not, without
the consent of the borrower, require, as a condition of
processing an application for approval, that the borrower agree
to pay the costs, fees, and expenses of consultants hired to
provide technical or advisory services to the Administrator.
``(4) Contracts, grants, and agreements.--The Administrator
may enter into such contracts, grants, or cooperative
agreements as are necessary to carry out this section without
regard to any requirement for competition, section 3709 of the
Revised Statutes (41 U.S.C. 5) and section 3324 of title 31,
United States Code.
``(5) Use of consultants.--Nothing in this subsection shall
limit the authority of the Administrator to retain the services
of consultants from funds made available to the Administrator
or otherwise.''.
(I) Title III of such Act is amended by inserting
after section 306B (7 U.S.C. 936b) the following new
sections:
``SEC. 306C. ELIGIBILITY OF DISTRIBUTION BORROWERS FOR LOANS, LOAN
GUARANTEES, AND LIEN ACCOMMODATIONS.
``For the purpose of determining the eligibility of a distribution
borrower not in default on the repayment of a loan made or guaranteed
under this Act for a loan, loan guarantee, or lien accommodation under
this title, a default by a borrower from which the distribution
borrower purchases wholesale power shall not--
``(1) be considered a default by the distribution borrower;
``(2) reduce the eligibility of the distribution borrower
for assistance under this Act; or
``(3) be the cause, directly or indirectly, of imposing any
requirement or restriction on the borrower as a condition of
the assistance, except such requirements or restrictions as are
necessary to implement a debt restructuring agreed on by the
power supply borrower and the Government.
``SEC. 306D. ADMINISTRATIVE PROHIBITIONS APPLICABLE TO ELECTRIC
BORROWERS.
``The Administrator may not require prior approval of, impose any
requirement, restriction, or prohibition with respect to the operations
of, or deny or delay the granting of a lien accommodation to, any
electric borrower under this Act whose net worth exceeds 110 percent of
the outstanding principal balance on all loans made or guaranteed to
the borrower by the Administrator.''.
(b) Expanded Eligibility for Loans for Water and Waste Disposal
Facilities.--Section 306(a)(1) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1926(a)(1)) is amended by inserting after the
first sentence the following new sentence: ``The Secretary may also
make loans to any borrower to whom a loan has been made under the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.), for the
conservation, development, use, and control of water, and the
installation of drainage or waste disposal facilities, primarily
serving farmers, ranchers, farm tenants, farm laborers, rural
businesses, and other rural residents.''.
(c) Rural Economic Development.--Section 364 of the Consolidated
Farm and Rural Development Act (7 U.S.C. 2006f) is amended by adding at
the end the following new subsection:
``(g) Rural Economic Development.--
``(1) In general.--A borrower of a loan or loan guarantee
under the Rural Electrification Act of 1936 (7 U.S.C. 901 et
seq.) shall be eligible for assistance under all programs
administered by the Rural Development Administration.
``(2) Participation.--The Administrator of the Rural
Development Administration shall encourage and facilitate the
full participation of borrowers referred to in paragraph (1) in
programs administered by the Rural Development
Administration.''.
(d) Regulations.--Not later than October 1, 1993, interim final
rules shall be issued by--
(1) the Administrator of the Rural Electrification
Administration in the case of amendments made by this section
to programs administered by the Administrator; and
(2) the Administrator of the Rural Development
Administration in the case of amendments made by this section
to programs administered by the Administrator.
Subtitle C--Food Stamp Program
SEC. 1301. UNIFORM REIMBURSEMENT RATES.
(a) In General.--Section 16 of the Food Stamp Act of 1977 (7 U.S.C.
2025) is amended--
(1) in the first sentence of subsection (a)--
(A) by striking ``and (5)'' and inserting ``(5)'';
(B) by inserting before ``: Provided,'' the
following: ``, (6) automated data processing and
information retrieval systems subject to the conditions
set forth in subsection (g), (7) food stamp program
investigations and prosecutions, and (8) implementing
and operating the immigration status verification
system established under section 1137(d) of the Social
Security Act (42 U.S.C. 1320b-7(d))''; and
(C) in the proviso, by striking ``authorized to pay
each State agency an amount not less than 75 per centum
of the costs of State food stamp program investigations
and prosecutions, and is further'';
(2) in subsection (g)--
(A) by striking ``an amount equal to 63 percent
effective on October 1, 1991, of'' and inserting ``the
amount authorized under subsection (a)(6) for''; and
(B) by striking ``automatic'' and inserting
``automated'';
(3) by striking subsection (j); and
(4) by redesignating subsection (k) as subsection (j).
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall be effective with respect
to calendar quarters beginning on or after April 1, 1994.
(2) Biennial legislatures.--In the case of a State whose
legislature meets biennially, and does not have a regular
session scheduled in calendar year 1994, and that demonstrates
to the satisfaction of the Secretary of Agriculture that there
is no mechanism, under the constitution and laws of the State,
for appropriating the additional funds required by the
amendments made by this section before the next such regular
legislative session, the Secretary may delay the effective date
of all or part of the amendments made by subsection (a) until
the beginning date of a calendar quarter that is not later than
the first calendar quarter beginning after the close of the
first regular session of the State legislature after the date
of enactment of this Act.
Subtitle D--Agricultural Trade
SEC. 1401. MARKET PROMOTION PROGRAM.
(a) Reduction of Funding Level.--Section 211(c) of the Agricultural
Trade Act of 1978 (7 U.S.C. 5641(c)) is amended--
(1) in paragraph (1)--
(A) by striking ``1995'' and inserting ``1993'';
and
(B) by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) in addition to any funds that may be specifically
appropriated to implement a market development program, for
each of fiscal years 1994 and 1995, of the funds of, or an
equal value of commodities owned by, the Commodity Credit
Corporation--
``(A) not less than $33,000,000 for--
``(i) branded promotion activities
involving small-sized commercial entities and
medium-sized commercial entities that are
beginning exporters; and
``(ii) activities other than branded
promotion activities that only benefit small-
sized commercial entities and medium-sized
commercial entities, or (as determined by the
Secretary) small-sized agricultural producers
and medium-sized agricultural producers; and
``(B) in addition to funding specified in
subparagraph (A), not less than $77,000,000 for program
activities by any eligible trade organization,
including organizations specified under subparagraph
(A); and''.
(b) Definitions.--Section 102 of such Act (7 U.S.C. 5602) is
amended by adding at the end the following new paragraph:
``(9) Commercial entity.--
``(A) In general.--The term `commercial entity'
means a cooperative or private organization that
exports or promotes an agricultural commodity,
including an entity that controls, is controlled by, or
is under common control with such a cooperative or
private organization.
``(B) Medium-sized commercial entity.--The term
`medium-sized commercial entity' means a commercial
entity that employs not less than 51, nor more than
500, individuals.
``(C) Small-sized commercial entity.--The term
`small-sized commercial entity' means a commercial
entity that employs not more than 50 individuals.''.
SEC. 1402. ACREAGE REDUCTION REQUIREMENTS.
(a) In General.--Section 1104 of the Omnibus Budget Reconciliation
Act of 1990 (7 U.S.C. 1445b-3a note) is amended--
(1) in subsection (a), by striking paragraph (2) and
inserting the following new paragraph:
``(2) corn under which the acreage planted to corn for
harvest on a farm would be limited to the corn crop acreage
base for the farm for the crop reduced by not less than 7\1/2\
percent.''; and
(2) in subsection (b)(2), by striking ``grain sorghum, and
barley,''.
(b) Readjustment of Support Levels.--Section 1302 of such Act (7
U.S.C. 1421 note) is amended--
(1) in subsection (b)--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2), respectively;
(2) in subsection (c), by striking ``and other programs'';
and
(3) in subsection (d)--
(A) in paragraph (1)--
(i) by striking subparagraph (A); and
(ii) by redesignating subparagraphs (B) and
(C) as subparagraphs (A) and (B), respectively;
(B) in paragraph (2), by striking ``(A), (B), and
(C)'' and inserting ``(A) and (B)''; and
(C) in paragraph (3)--
(i) by striking ``measures specified in
subparagraph (A) of paragraph (1) and''; and
(ii) by striking ``(B) or (C)'' and
inserting ``(A) or (B)''.
SEC. 1403. END-USE CERTIFICATES.
(a) In General.--Subtitle A of title IV of the Agricultural Trade
Act of 1978 (7 U.S.C. 5661 et seq.) is amended--
(1) by redesignating section 404 (7 U.S.C. 5664) as section
405; and
(2) by inserting after section 403 the following new
section:
``SEC. 404. END-USE CERTIFICATES.
``(a) Definitions.--As used in this section:
``(1) Covered foreign commodity.--The term `covered foreign
commodity' means any wheat or barley produced in a foreign
country that is imported into the United States, including any
imported commodity that will be subsequently commingled with a
like commodity produced in the United States.
``(2) End-use certificate.--The term `end-use certificate'
means a certification that describes--
``(A) the class, quantity, and country of origin of
the covered foreign commodity;
``(B) the importer and consignee of the covered
foreign commodity;
``(C) the end use for which the consignee will use
the covered foreign commodity; and
``(D) at the option of the Secretary, the sales
price and quality of the covered foreign commodity.
``(b) Statement of Purpose.--The Secretary shall improve monitoring
of the end use of covered foreign commodities, as provided in this
section, in order to ensure that exports of agricultural commodities
under the programs authorized by this Act and other agricultural trade
programs are entirely produced in the United States.
``(c) Requirement on Covered Foreign Commodities.--The Commissioner
of Customs shall not permit the entry into, or the withdrawal from a
warehouse for use in, the United States of a covered foreign commodity,
unless the importer of record presents an end-use certificate for the
covered foreign commodity that complies with this section at the time
of entry or withdrawal, as appropriate.
``(d) Maintenance of Certificate with Covered Foreign Commodity.--
The end-use certificate shall be maintained with the covered foreign
commodity until the commodity reaches the end use of the commodity
within the United States. The end use of a covered foreign commodity
includes feeding to livestock, first stage processing for human
consumption, exporting from the United States, or (as determined by the
Secretary) other end uses.
``(e) Certification.--The Secretary shall require any importer or
consignee of a covered foreign commodity to certify, on a quarterly
basis, the end use or transfer, during the period the commodity is a
covered foreign commodity, by the importer or consignee, along with any
additional information the Secretary determines to be appropriate.
``(f) Compliance.--Subsections (b), (c), and (d) of section 402
shall apply to an importer or consignee of a covered foreign commodity
subject to the terms and conditions specified in this section.''.
(b) Effective Date.--The amendments made by subsection (a) shall
become effective on the date that is 120 days after the date of
enactment of this Act.
SEC. 1404. SENSE OF CONGRESS REGARDING THE EXPORT OF VEGETABLE OIL.
It is the sense of Congress that the Secretary of Agriculture
should continue aggressively to promote the export of vegetable oil
through all available authorities, including but not limited to the
export enhancement program established under section 301 of the
Agricultural Trade Act of 1978 (7 U.S.C. 5651).
Subtitle E--Miscellaneous
SEC. 1501. FEDERAL CROP INSURANCE.
(a) Actuarial Soundness.--Section 506 of the Federal Crop Insurance
Act (7 U.S.C. 1506) is amended by adding at the end the following new
subsection:
``(n) Actuarial Soundness.--The Corporation shall take such actions
as are necessary to improve the actuarial soundness of Federal
multiperil crop insurance coverage made available under this title to
achieve, on and after October 1, 1995, an overall projected loss ratio
of not greater than 1.1, including--
``(1) instituting appropriate requirements for
documentation of the actual production history of insured
producers to establish recorded or appraised yields for Federal
crop insurance coverage that more accurately reflect the
associated actuarial risk, except that the Corporation may not
carry out this paragraph in a manner that would prevent
beginning farmers from obtaining adequate Federal crop
insurance, as determined by the Corporation;
``(2) establishing in counties, to the extent practicable,
a crop insurance option based on area yields in a manner that
allows an insured producer to qualify for an indemnity if a
loss has occurred in a specified area in which the farm of the
insured producer is located;
``(3) establishing a database that contains the social
security account and employee identification numbers of
participating producers and using the numbers to identify
insured producers who are high risk for actuarial purposes and
insured producers who have not documented at least 4 years of
production history, to assess the performance of insurance
providers, and for other purposes permitted by law; and
``(4) taking any other measures authorized by law to
improve the actuarial soundness of the Federal crop insurance
program while maintaining fairness and effective coverage for
agricultural producers.''.
(b) Conforming Amendments.--
(1) Reinsurance.--Section 508(h) of such Act (7 U.S.C.
1508(h)) is amended by striking the fifth sentence and
inserting the following new sentence: ``The Corporation shall
also pay operating and administrative costs to insurers of
policies on which the Corporation provides reinsurance in an
amount determined by the Corporation.''.
(2) Area yield plan.--Section 508 of such Act (7 U.S.C.
1508) is amended by adding at the end the following new
subsection:
``(n) Area Yield Plan.--
``(1) In general.--Notwithstanding any other provision of
this title, the Corporation may offer, only as an option to
individual crop insurance coverage available under this Act, a
crop insurance plan based on an area yield that allows an
insured producer to qualify for an indemnity if a loss has
occurred in an area, as specified by the Corporation, in which
the farm of the producer is located.
``(2) Level of coverage.--Under a plan offered under
paragraph (1), an insured producer shall be allowed to select
the level of production at which an indemnity will be paid
consistent with terms and conditions established by the
Corporation.''.
(3) Yield coverage.--Section 508A of such Act (7 U.S.C.
1508a) is amended--
(A) in subsection (a)(1), by striking ``may'' and
inserting ``shall''; and
(B) in subsection (b)--
(i) in paragraph (1)(A)--
(I) by striking ``A crop insurance
contract'' and all that follows through
``producer--'' and inserting ``Under
regulations issued by the Corporation,
a crop insurance contract offered under
this title to an eligible insured
producer of a commodity with respect to
which the Corporation provides crop
insurance coverage shall make available
to the producer either--'';
(II) by striking ``or'' at the end
of clause (i);
(III) in clause (ii)--
(aa) by striking ``5'' and
inserting ``4 building to 10'';
and
(bb) by striking the period
at the end and inserting ``;
or''; and
(IV) by adding at the end the
following new clause:
``(iii) yield coverage based on--
``(I) not less than 65 percent of
the transitional yield of the producer
(adjusted to reflect actual
experience), as specified in
regulations issued by the Corporation
based on production history
requirements; or
``(II) the area yield under section
508(n) for the crop established under
the program for the commodity
involved.'';
(ii) in paragraph (1)(B)--
(I) by striking ``two'' and
inserting ``3''; and
(II) by inserting after
``subparagraph (A)'' the following: ``,
where available (as determined by the
Corporation),'';
(iii) in paragraph (2)--
(I) by striking ``5'' and inserting
``4 building to 10''; and
(II) by inserting after ``previous
crops,'' the following: ``not less than
65 percent of the transitional yield of
the producer (adjusted to reflect
actual experience), or the area
yield,''; and
(iv) in paragraph (3)(A)(i), by inserting
after ``farm program yield'' the following: ``,
not less than 65 percent of the transitional
yield of the producer (adjusted to reflect
actual experience), as specified in regulations
issued by the Corporation based on production
history requirements, or the area yield under
section 508(n), whichever is applicable,''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), this
section and the amendments made by this section shall become
effective on October 1, 1993.
(2) Regulations.--Not later than 30 days after the date of
enactment of this Act, the Secretary of Agriculture shall
publish, for public comment, proposed regulations to implement
the amendments made by this section.
SEC. 1502. ENVIRONMENTAL CONSERVATION ACREAGE RESERVE PROGRAM
AMENDMENTS.
Subtitle D of title XII of the Food Security Act of 1985 (16 U.S.C.
3830 et seq.) is amended--
(1) in section 1230(b) (16 U.S.C. 3830(b)), by striking
``to place in'' and all that follows through ``acres'';
(2) in section 1231(d) (16 U.S.C. 3831(d))--
(A) by striking ``may'' and inserting ``shall'';
(B) by striking ``the amount of acres specified in
section 1230(b)'' and inserting ``a total of 38,000,000
acres during the 1986 through 1995 calendar years'';
and
(C) by striking ``each of calendar years 1994 and
1995'' and inserting ``the 1995 calendar year'';
(3) in section 1237 (16 U.S.C. 3837)--
(A) by striking subsection (b) and inserting the
following new subsection:
``(b) Minimum Enrollment.--The Secretary shall enroll into the
wetlands reserve program--
``(1) a total of not less than 330,000 acres by the end of
the 1995 calendar year; and
``(2) a total of not less than 975,000 acres during the
1991 through 2000 calendar years.''; and
(B) in subsection (c), by striking ``1995'' and
inserting ``2000''; and
(4) in section 1241 (16 U.S.C. 3841)--
(A) in subsection (a)--
(i) by striking ``(a)(1) During each of the
fiscal years ending September 30, 1986, and
September 30, 1987'' and inserting ``(a) During
each of fiscal years 1994 through 2000''; and
(ii) by striking paragraph (2); and
(B) in subsection (b), by striking ``(A) through
(E)'' and inserting ``A through E''.
SEC. 1503. ADMISSION, ENTRANCE, AND RECREATION FEES.
(a) Definitions.--As used in this section:
(1) Area of concentrated public use.--The term ``area of
concentrated public use'' means an area administered by the
Secretary that meets each of the following criteria:
(A) The area is managed primarily for outdoor
recreation purposes.
(B) Facilities and services necessary to
accommodate heavy public use are provided in the area.
(C) The area contains at least one major recreation
attraction.
(D) Public access to the area is provided in such a
manner that admission fees can be efficiently collected
at 1 or more centralized locations.
(2) Boat launching facility.--The term ``boat launching
facility'' includes any boat launching facility, regardless of
whether specialized facilities or services, such as mechanical
or hydraulic boat lifts or facilities, are provided.
(3) Campground.--The term ``campground'' means any
campground where a majority of the following amenities are
provided, as determined by the Secretary:
(A) Tent or trailer spaces.
(B) Drinking water.
(C) An access road.
(D) Refuse containers.
(E) Toilet facilities.
(F) The personal collection of recreation use fees
by an employee or agent of the Secretary.
(G) Reasonable visitor protection.
(H) If campfires are permitted in the campground,
simple devices for containing the fires.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Agriculture.
(b) Authority To Impose Fees.--The Secretary--
(1) may charge admission or entrance fees at national
monuments, national volcanic monuments, national scenic areas,
and areas of concentrated public use administered by the
Secretary;
(2) acting through the Forest Service, shall reimburse the
Agricultural Stabilization and Conservation Service for
administrative costs incurred under the Stewardship Incentive
Program for the actual cost of services provided by the
Agricultural Stabilization and Conservation Service, except
that the actual costs shall not exceed 10 percent of the total
annual appropriation for the program; and
(3) may charge recreation use fees at lands administered by
the Secretary in connection with the use of specialized outdoor
recreation sites, equipment, services, and facilities,
including visitors' centers, picnic tables, boat launching
facilities, and campgrounds.
(c) Amount of Fees.--The amount of the admission, entrance, and
recreation fees authorized to be imposed under this section shall be
determined by the Secretary.
SEC. 1504. SENSE OF THE SENATE REGARDING DEFICIT REDUCTION.
It is the sense of the Senate that--
(1) farmers should pay no more than their fair share of any
budget reduction necessary to achieve the goal of deficit
reduction; and
(2) the level of budget reduction should take into account
and be adjusted to reflect any BTU or energy taxes, any other
taxes, reduction in interest rates, and other user fees.
TITLE II--COMMITTEE ON ARMED SERVICES
SEC. 2001. LIMITATION ON COST-OF-LIVING ADJUSTMENTS FOR MILITARY
RETIREES.
Paragraph (2) of section 1401a(b) of title 10, United States Code,
is amended to read as follows:
``(2) Pre-august 1, 1986 members.--
``(A) General rule.--The Secretary shall increase
the retired pay of each member and former member who
first became a member of a uniformed service before
August 1, 1986, by the percent (adjusted to the nearest
one-tenth of 1 percent) by which--
``(i) the price index for the base quarter
of that year, exceeds
``(ii) the base index.
``(B) Special rules for fiscal years 1994 through
1998.--
``(i) Fiscal years 1994 through 1997.--In
the case of an increase in retired pay that,
pursuant to paragraph (1), becomes effective on
December 1 of 1993, 1994, 1995, or 1996, the
initial month for which such increase is
payable as part of such retired pay shall
(notwithstanding such December 1 effective
date) be September of the following year.
``(ii) Fiscal year 1998.--In the case of an
increase in retired pay that, pursuant to
paragraph (1), becomes effective on December 1,
1997, the initial month for which such increase
is payable as part of such retired pay shall
(notwithstanding such December 1 effective
date) be August 1998.
``(C) Inapplicability to disability retirees.--
Subparagraph (B) does not apply with respect to the
retired pay of a member retired under chapter 61 of
this title.''.
TITLE III--COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
SEC. 3001. NATIONAL DEPOSITOR PREFERENCE.
(a) In General.--Section 11(d)(11) of the Federal Deposit Insurance
Act (12 U.S.C. 1821(d)(11)) is amended to read as follows:
``(11) Depositor preference.--
``(A) In general.--Subject to section 5(e)(2)(C),
amounts realized from the liquidation or other
resolution of any insured depository institution by any
receiver appointed for such institution shall be
distributed to pay claims (other than secured claims to
the extent of any such security) in the following order
of priority:
``(i) Administrative expenses of the
receiver.
``(ii) Any deposit liability of the
institution.
``(iii) Any other general or senior
liability of the institution (which is not a
liability described in clause (iv) or (v)).
``(iv) Any obligation subordinated to
depositors or general creditors (which is not
an obligation described in clause (v)).
``(v) Any obligation to shareholders or
members arising as a result of their status as
shareholders or members (including any
depository institution holding company or any
shareholder or creditor of such company).
``(B) Effect on state law.--
``(i) In general.--The provisions of
subparagraph (A) shall not supersede the law of
any State except to the extent such law is
inconsistent with the provisions of such
subparagraph, and then only to the extent of
the inconsistency.
``(ii) Procedure for determination of
inconsistency.--Upon the Corporation's own
motion or upon the request of any person with a
claim described in subparagraph (A)(i) or any
State which is submitted to the Corporation in
accordance with procedures which the
Corporation shall prescribe, the Corporation
shall determine whether any provision of the
law of any State is inconsistent with any
provision of subparagraph (A) and the extent of
any such inconsistency.
``(iii) Judicial review.--The final
determination of the Corporation under clause
(ii) shall be subject to judicial review under
chapter 7 of title 5, United States Code.
``(C) Accounting report.--Any distribution by the
Corporation in connection with any claim described in
subparagraph (A)(vi) shall be accompanied by the
accounting report required under paragraph (15)(B).''.
(b) Technical and Conforming Amendments.--
(1) Section 11(c)(13) of the Federal Deposit Insurance Act
(12 U.S.C. 1821(c)(13)) is amended--
(A) in subparagraph (A), by striking ``subject to
subparagraph (B),'';
(B) by inserting ``and'' after the semicolon at the
end of subparagraph (A);
(C) by striking subparagraph (B); and
(D) by redesignating subparagraph (C) as
subparagraph (B).
(2) Section 11(g)(4) of the Federal Deposit Insurance Act
(12 U.S.C. 1921(g)(4)) is amended by striking ``If the
Corporation'' and inserting ``Subject to subsection (d)(11), if
the Corporation''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to insured depository institutions for which a
receiver is appointed after the date of the enactment of this Act.
SEC. 3002. TRANSFER OF FEDERAL RESERVE SURPLUSES.
(a) In General.--The 1st undesignated paragraph of section 7 of the
Federal Reserve Act (12 U.S.C. 289) is amended to read as follows:
``(a) Dividends and Surplus Funds of Reserve Banks.--
``(1) Stockholder dividends.--
``(A) In general.--After all necessary expenses of
a Federal reserve bank have been paid or provided for,
the stockholders of the bank shall be entitled to
receive an annual dividend of 6 percent on paid-in
capital stock.
``(B) Dividend cumulative.--The entitlement to
dividends under subparagraph shall be cumulative.
``(2) Deposit of net earnings in surplus fund.--That
portion of net earnings of each Federal reserve bank which
remains after dividend claims under subparagraph (A) have been
fully met shall be deposited in the surplus fund of the bank.
``(3) Payment to treasury.--During fiscal years 1997 and
1998, any amount in the surplus fund of any Federal reserve
bank in excess of the amount equal to 3 percent of the total
paid-in capital and surplus of the member banks of such bank
shall be transferred to the Board for transfer to the Secretary
of the Treasury for deposit in the general fund of the
Treasury.''.
(b) Additional Transfers for Fiscal Years 1997 and 1998.--
(1) In general.--In addition to the amounts required to be
transferred from the surplus funds of the Federal reserve banks
pursuant to section 7(a)(3) of the Federal Reserve Act, the
Federal reserve banks shall transfer from such surplus funds to
the Board of Governors of the Federal Reserve System for
transfer to the Secretary of the Treasury for deposit in the
general fund of the Treasury, a total amount of $106,000,000 in
fiscal year 1997 and a total amount of $107,000,000 in fiscal
year 1998.
(2) Allocation by fed.--Of the total amount required to be
paid by the Federal reserve banks under paragraph (1) for
fiscal year 1997 or 1998, the Board of Governors of the Federal
Reserve System shall determine the amount each such bank shall
pay in such fiscal year.
(3) Replenishment of surplus fund prohibited.--No Federal
reserve bank may replenish such bank's surplus fund by the
amount of any transfer by such bank under paragraph (1) during
fiscal years 1997 and 1998.
(c) Technical and Conforming Amendments.--
(1) The penultimate undesignated paragraph of section 7 of
the Federal Reserve Act (12 U.S.C. 290) is amended by striking
``The net earnings derived'' and inserting ``(b) Use of
Earnings Transferred to the Treasury.--The net earnings
derived''.
(2) The last undesignated paragraph of section 7 of the
Federal Reserve Act (12 U.S.C. 531) is amended by striking
``Federal reserve banks'' and inserting ``(c) Exemption From
Taxation.--Federal reserve banks''.
SEC. 3003. USE OF RETURN DATA FOR INCOME VERIFICATION UNDER CERTAIN
HOUSING ASSISTANCE PROGRAMS.
(a) Amendments to Housing Acts.--Section 904 of the Stewart B.
McKinney Homeless Assistance Amendments Act of 1988 (42 U.S.C. 3544) is
amended as follows:
(1) Definition.--In subsection (a), by adding at the end
the following:
``(4) Program of the department of housing and urban
development.--The term `program of the Department of Housing
and Urban Development' includes Indian housing programs
assisted under title II of the United States Housing Act of
1937.''.
(2) Consent forms.--In subsection (b)--
(A) in paragraph (1), by striking ``and'' at the
end;
(B) in paragraph (2), by striking the period at the
end and inserting ``; and'';
(C) by inserting after paragraph (2) the following
new paragraph:
``(3) sign a consent form approved by the Secretary
authorizing the Secretary to request the Commissioner of Social
Security and the Secretary of the Treasury to release
information pursuant to section 6103(l)(7)(D)(ix) of the
Internal Revenue Code of 1986 with respect to such applicant or
participant for the sole purpose of the Secretary verifying
income information pertinent to the applicant's or
participant's eligibility or level of benefits.''; and
(D) in the last sentence, by striking ``This'' and
inserting the following: ``Except as provided in this
subsection, this''.
(2) Applicant, participant, and public housing agency
protections.--In subsection (c)(2)--
(A) in subparagraph (A)--
(i) in the matter preceding clause (i)--
(I) by inserting after
``compensation law'' the following:
``or pursuant to section
6103(l)(7)(D)(ix) of the Internal
Revenue Code of 1986 from the
Commissioner of Social Security or the
Secretary of the Treasury''; and
(II) by inserting ``(in the case of
information obtained pursuant to such
section 303(i))'' before
``representatives''; and
(ii) in clause (ii), by inserting ``or
public housing agency'' after ``owner'' each
place it appears; and
(B) in subparagraph (B), by inserting after
``wages'' each place it appears the following: ``,
other earnings or income,''.
(3) Penalty.--In subsection (c)(3)--
(A) in subparagraph (A), by inserting ``or section
6103(l)(7)(D)(ix) of the Internal Revenue Code of
1986'' after ``Social Security Act''; and
(B) in the first sentence of subparagraph (B)--
(i) by striking clause (i) and inserting
the following: ``(i) a negligent or knowing
disclosure of information referred to in this
section, section 303(i) of the Social Security
Act, or section 6103(l)(7)(D)(ix) of the
Internal Revenue Code of 1986 about such person
by an officer or employee of any public housing
agency or owner (or employee thereof), which
disclosure is not authorized by this section,
such section 303(i), such section
6103(l)(7)(D)(ix), or any regulation
implementing this section, such section 303(i),
or such section 6103(l)(7)(D)(ix), or''; and
(ii) in clause (ii), by inserting ``such
section 6103(l)(7)(D)(ix),'' after ``303(i),''.
(4) Conforming amendment.--The heading of subsection (c) of
section 904 of the Stewart B. McKinney Homeless Assistance
Amendments Act of 1988 is amended by striking ``State
Employment''.
(5) Operating subsidy adjustments.--Section 9(a) of the
United States Housing Act of 1937 (42 U.S.C. 1437g(c)) is
amended by adding at the end the following:
``(4) Adjustments to a public housing agency's operating subsidy
made by the Secretary under this section shall reflect actual changes
in rental income collections resulting from the application of section
904 of the Stewart B. McKinney Homeless Assistance Amendments Act of
1988.''.
(b) Conforming Internal Revenue Code Amendments.--
(1) In general.--Subparagraph (D) of section 6103(l)(7) of
the Internal Revenue Code of 1986 (26 U.S.C. 6103(l)(7)(D);
relating to the disclosure of return information to Federal,
State, and local agencies administering certain programs) is
amended--
(A) in clause (vii), by striking ``, and'' at the
end and inserting a semicolon;
(B) in clause (viii), by striking the period at the
end and inserting ``; and'';
(C) by inserting after clause (viii) the following
new clause:
``(ix) any housing assistance program
administered by the Department of Housing and
Urban Development that involves initial and
periodic review of an applicant's or
participant's income, except that return
information may be disclosed under this
paragraph only to the Secretary of Housing and
Urban Development and only with respect to
applicants for and participants in such
programs who have signed consent forms under
section 904(b)(3) of the Stewart B. McKinney
Homeless Assistance Amendments Act of 1988.'';
and
(D) by adding at the end the following: ``Clause
(ix) shall not apply after September 30, 1998.''.
(2) Amendment to the heading.--The heading of paragraph (7)
of section 6103(l) of the Internal Revenue Code of 1986 is
amended by inserting after ``1977,'' the following: ``certain
housing assistance programs,''.
SEC. 3004. GNMA REMIC GUARANTEE FEES.
Section 306(g)(3) of the National Housing Act (12 U.S.C.
1721(g)(3)) is amended by adding at the end the following new
subparagraph:
``(E)(i) Notwithstanding subparagraphs (A) through (D), fees
charged for the guarantee of, or commitment to guarantee, multiclass
securities backed by a trust or pool of securities or notes guaranteed
by the Association under this subsection, and other related fees shall
be charged by the Association in an amount the Association deems
appropriate. The Association shall take such action as may be necessary
to reasonably assure that such portion of the benefit, resulting from
the Association's multiclass securities program, as the Association
determines is appropriate accrues to mortgagors who execute eligible
mortgages after the date of the enactment of this subparagraph.
``(ii) In its annual report, the Association shall provide a
summary of each activity of the Association pertaining to the
Association's multiclass securities program. Each summary shall contain
a description of the activity and shall include--
``(I) information pertaining to the size of the
transactions closed, the number of mortgages involved, the
amount of fees charged, those persons or entities receiving
payments for services provided and the amounts of such
payments; and
``(II) an estimate of the portion of the benefit of the
multiclass securities program accruing to mortgagors as well as
a description of any action taken by the Association to ensure
such accrual.
``(iii) The Association shall provide for the initial
implementation of the program for which fees are charged under the
first sentence of clause (i) by notice published in the Federal
Register. The notice shall be effective upon publication and shall
provide an opportunity for public comment. Not later than 12 months
after publication of the notice, the Association shall issue
regulations for such program based on the notice, comments received,
and the experience of the Association in carrying out the program
during such period.
``(iv) The Association shall consult with persons or entities in
such manner as the Association deems appropriate to ensure the
efficient commencement and operation of the multiclass securities
program.
``(v) No State or local law, and no Federal law (except Federal law
enacted expressly in limitation of this clause after the effective date
of this subparagraph) shall preclude or limit the exercise by the
Association of its power to contract with persons or entities, and its
rights to enforce such contracts, for the purpose of ensuring the
efficient commencement and continued operation of the multiclass
securities program.
``(vi) Prior to the commencement of the multiclass securities
program, the Association shall provide to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Banking,
Finance and Urban Affairs of the House of Representatives a report
describing the Association's design of the multiclass securities
program, including program elements that ensure the minimization of
risks arising from the operation of the multiclass securities program,
such as--
``(I) any industry proven safeguards, including capital
standards for sponsors and provisions for indemnification from
private parties for events that may result in the Association's
liability under its guaranty or commitment to guaranty; and
``(II) the sufficiency of the Association's staff resources
to administer the multiclass securities program.''.
SEC. 3005. MUTUAL MORTGAGE INSURANCE FUND PREMIUMS.
To improve the actuarial soundness of the Mutual Mortgage Insurance
Fund under the National Housing Act, the Secretary of Housing and Urban
Development shall increase the rate at which the Secretary earns the
single premium payment collected at the time of insurance of a mortgage
that is an obligation of such Fund (with respect to the rate in effect
on the date of the enactment of this Act). In establishing such
increased rate, the Secretary shall consider any current audit findings
and reserve analyses and information regarding the expected average
duration of mortgages that are obligations of such Fund and may
consider any other information that the Secretary determines to be
appropriate.
TITLE IV--COMMUNICATIONS AND TRANSPORTATION
Subtitle A--Spectrum Allocation and Auction
SEC. 4001. SHORT TITLE.
This subtitle may be cited as the ``Emerging Telecommunications
Technologies Act of 1993''.
SEC. 4002. FINDINGS.
The Congress finds that--
(1) the Federal Government currently reserves for its own
use, or has priority of access to, approximately 40 percent of
the electromagnetic spectrum that is assigned for use pursuant
to the Communications Act of 1934;
(2) many of such frequencies are underutilized by Federal
Government licensees;
(3) the public interest requires that many of such
frequencies be utilized more efficiently by Federal Government
and non-Federal licensees;
(4) additional frequencies are assigned for services that
could be obtained more efficiently from commercial providers or
other vendors;
(5) scarcity of assignable frequencies for licensing by the
Commission can and will--
(A) impede the development and commercialization of
new telecommunications products and services;
(B) limit the capacity and efficiency of
telecommunications systems in the United States;
(C) prevent some State and local police, fire, and
emergency services from obtaining urgently needed radio
channels; and
(D) adversely affect the productive capacity and
international competitiveness of the United States
economy;
(6) a reassignment of these frequencies can produce
significant economic returns;
(7) a reassignment of Federal Government frequencies can be
accomplished without adverse impact on amateur radio licenses
that currently share allocations with Federal Government
stations;
(8) current spectrum assignment procedures--comparative
hearings and lotteries--can be expensive and time consuming,
can strain the limited resources of the Federal Communications
Commission, and can result in an inefficient distribution of
spectrum and an unjustified windfall to speculators;
(9) competitive bidding could reduce the cost in time and
money--and increase the efficiency--of the spectrum assignment
process for certain radio services, discourage speculative
applications, encourage the efficient use of spectrum by
licensees, and fairly compensate United States taxpayers for
use of a scarce public natural resource;
(10) competitive bidding should be structured to--
(A) facilitate introduction of new spectrum-based
technologies and services and entry of new companies
into the telecommunications market;
(B) recognize the legitimate needs of rural
telephone companies in providing spectrum-based, common
carrier services in rural markets in which they provide
telephone exchange service by wire;
(C) give appropriate consideration to small
businesses and minority-owned businesses that want to
participate in the competitive bidding process;
(D) recognize the need to make reasonably priced
mobile communications services available to businesses
in rural areas;
(E) recognize the need to ensure that adequate
spectrum continues to be available for public safety
services; and
(F) otherwise further the public interest;
(11) competitive bidding should apply only to the granting
of new spectrum licenses and should not--
(A) disrupt the operations of existing spectrum
licensees;
(B) alter existing spectrum allocation procedures;
(C) apply to certain services governed by public
interest regulations;
(D) diminish the existing authority of the Federal
Communications Commission to regulate or reclaim
spectrum licenses;
(E) prevent or discourage the allocation of
spectrum to meet the current or future needs of public
safety services; or
(F) grant any right to a spectrum licensee
different from the rights awarded to licensees who
obtain their license through assignment methods other
than competitive bidding;
(12) in appropriating revenues received from competitive
bidding, priority should be given to--
(A) funding spectrum management, planning,
monitoring, and enforcement and other activities of the
Federal Communications Commission, the National
Telecommunications and Information Administration, and
other Federal agencies aimed at increasing the
efficiency and effectiveness of spectrum use,
facilitating the introduction of new spectrum-based
technologies and services, and enhancing the
international competitiveness of the United States and
the ability of American companies to enter new markets;
and
(B) extending the reach of public radio and
television to underserved areas of the United States
and underserved groups of Americans and enhancing the
ability of public telecommunications to deliver needed
original, high-quality public service programming; and
(13) because commercial mobile services require a Federal
license and the Federal Government is attempting to promote
competition for such services, and because providers of such
services do not exercise market power vis-a-vis telephone
exchange service carriers and State regulation can be a barrier
to the development of competition in this market, uniform
national policy is necessary and in the public interest.
SEC. 4003. NATIONAL SPECTRUM PLANNING.
(a) Planning Activities.--The Assistant Secretary of Commerce for
Communications and Information and the Chairman of the Commission shall
meet, at least biannually, to conduct joint spectrum planning with
respect to the following issues:
(1) the future spectrum requirements for public and private
uses, including State and local government public safety
agencies;
(2) the spectrum allocation actions necessary to
accommodate those uses; and
(3) actions necessary to promote the efficient use of the
spectrum, including spectrum management techniques to promote
increased shared use of the spectrum that does not cause
harmful interference, as a means of increasing commercial
access.
(b) Report On Planning Activities.--Not later than 24 months after
the date of enactment of this Act, the Assistant Secretary of Commerce
for Communications and Information and the Chairman of the Commission
shall submit a joint report to the Committee on Energy and Commerce of
the House of Representatives and the Committee on Commerce, Science,
and Transportation of the Senate on the joint spectrum planning
activities conducted under subsection (a) and recommendations for
action developed pursuant to such activities. The report shall contain
recommendations for the reform of the process of allocating spectrum
between Federal uses and non-Federal uses.
(c) Procedures To Ensure Opportunity for Minority-Owned Businesses
and Small Businesses.--The Commission shall develop procedures to
ensure that minority-owned businesses and small businesses are given
the opportunity to provide spectrum-based services. In developing such
procedures, the Commission shall consider the use of tax certificates
and bidding preferences.
(d) Study on Spectrum Needs of Public Safety Agencies.--The
Commission shall complete and submit to Congress, not later than 18
months after the date of enactment of this Act, a study of current and
future spectrum needs of State and local government public safety
agencies through the year 2010, and a specific plan to satisfy those
spectrum needs.
SEC. 4004. RECOMMENDATIONS FOR REALLOCATION OF CERTAIN FREQUENCIES.
(a) Identification Required.--For purposes of reallocation, the
Secretary shall identify frequencies that--
(1) are allocated on a primary basis for Federal Government
use;
(2) are not required for the present or identifiable future
needs of the Federal Government;
(3) can feasibly be made available, as of the date of such
identification or at any time during the next 15 years, for use
under the Act (other than for Federal Government stations under
section 305 of the Act) without resulting in costs to the
Federal Government, or loss of services or benefits to the
public, that are excessive in relation to the benefits to the
public that may be provided by non-Federal licensees; and
(4) are most likely to have the greatest potential for
productive uses and public benefits under the Act if allocated
for commercial uses.
(b) Minimum Amount of Spectrum Recommended.--
(1) Overall recommendation.--In accordance with the
provisions of this section, the Secretary shall recommend for
reallocation, for use other than by Federal Government stations
under section 305 of the Act (47 U.S.C. 305), at least 200
megahertz of frequencies identified under subsection (a) that
are located below 5 gigahertz. At least one-half of such
frequencies shall be located below 3 gigahertz.
(2) Mixed uses permitted to be counted.--Among the
frequencies recommended under this section for reallocation,
the Secretary may include frequencies and frequency bands that
are to be partially retained for use by Federal Government
stations but that are also recommended to be reallocated under
the Act for use by non-Federal stations, except that--
(A) such mixed-use frequencies and frequency bands
may not count toward more than one-half of the 200
megahertz minimum required by paragraph (1);
(B) such mixed-use frequencies and frequency bands
may not be so counted unless the assignments of the
frequencies to Federal Government stations under
section 305 of the Act (47 U.S.C. 305) are limited by
geographic area, by time, or by other means so as to
guarantee that the potential use to be made by such
Federal Government stations is substantially less (as
measured by geographic area, time, or otherwise) than
the potential use to be made by non-Federal stations;
and
(C) the operational sharing permitted under this
paragraph shall be subject to coordination procedures
that the Commission and the Secretary shall jointly
establish and implement to ensure against harmful
interference.
(c) Consideration of Criteria for Identification.--
(1) Needs of the federal government.--In determining
whether a frequency meets the criteria specified in subsection
(a)(2), the Secretary shall--
(A) consider whether the frequency is used to
provide a communications service that is or could be
made available from a commercial carrier or other
vendor;
(B) seek to promote--
(i) the maximum practicable reliance on
commercially available substitutes;
(ii) the sharing of frequencies (as
permitted under subsection (b)(2));
(iii) the development and use of new
communications technologies; and
(iv) the use of nonradiating communications
systems where practicable; and
(C) seek to avoid--
(i) serious degradation of Federal
Government services and operations;
(ii) excessive costs to the Federal
Government and users of Federal Government
services; and
(iii) excessive disruption of existing use
of Federal Government frequencies by amateur
radio licensees.
(2) Feasibility of use.--In determining whether a frequency
meets the criteria specified in subsection (a)(3), the
Secretary shall--
(A) assume that the frequency will be assigned by
the Commission under section 303 of the Act (47 U.S.C.
303) within 15 years;
(B) assume reasonable rates of scientific progress
and growth of demand for telecommunications services;
(C) seek to include frequencies which can be used
to stimulate the development of new technologies; and
(D) consider the immediate and recurring costs to
reestablish services displaced by the reallocation of
spectrum.
(3) Commercial use.--In determining whether a frequency
meets the criteria specified in subsection (a)(4), the
Secretary shall consider--
(A) the extent to which equipment is available that
is capable of utilizing such frequency;
(B) the proximity of frequencies that are already
assigned for commercial or other non-Federal use;
(C) the extent to which, in general, commercial
users could share the frequency with amateur radio
licensees; and
(D) the activities of foreign governments in making
frequencies available for experimentation or commercial
assignments in order to support their domestic
manufacturers of equipment.
(4) Other uses.--
(A) Applicability of criteria.--The criteria
specified by subsection (a) shall be deemed not to be
met for any purpose under this subtitle with regard to
any frequency assignment to, or any frequency
assignment used by, a Federal power agency for the
purpose of withdrawing that assignment.
(B) Mixed use eligibility.--The frequencies
assigned to any Federal power agency may only be
eligible for mixed use under subsection (b)(2) in
geographically separate areas, but in those cases where
a frequency is to be shared by an affected Federal
power agency and a non-Federal user, such use by the
non-Federal user shall not cause harmful interference
to the affected Federal power agency or adversely
affect the reliability of its power system.
(C) Definition.--As used in this paragraph, the
term ``Federal power agency'' means the Tennessee
Valley Authority, the Bonneville Power Administration,
the Western Area Power Administration, or the
Southwestern Power Administration.
(d) Procedure for Identification of Reallocable Bands of
Frequencies.--
(1) Report identifying 30 megahertz for immediate
reallocation.--Within 6 months after the date of enactment of
this Act, the Secretary shall prepare and submit to the
President and the Congress a report that recommends for
immediate reallocation no less than 30 megahertz of frequencies
identified under subsection (a). None of the frequencies
covered by such report may be allocated for mixed use as
described in subsection (b)(2). Not less than one-half of such
frequencies shall be located below 3 gigahertz.
(2) Preliminary report on other reallocable frequencies.--
Within 6 months after the date of enactment of this Act, the
Secretary shall prepare, make publicly available, and submit to
the President and the Congress a preliminary report that
recommends for reallocation at least 170 megahertz of
frequencies identified under subsection (a), other than those
recommended for immediate reallocation under paragraph (1).
(3) Public comment; changes to report.--The Secretary shall
receive public comment on the preliminary report required by
paragraph (2) and shall, based upon the comments, make such
changes to the report as are warranted to meet the objectives
of this section.
(4) Direct discussions.--The Secretary shall encourage and
provide opportunity for direct discussions among commercial
representatives and Federal Government users of the spectrum to
aid the Secretary in determining which frequencies to recommend
for reallocation. The Secretary shall provide notice to the
public of any such discussions, including the name or names of
any businesses or other persons represented in such
discussions, and shall provide the public with an opportunity
to comment on the results of any such negotiations prior to the
submission of the final report required by paragraph (5).
(5) Final report on other reallocable frequencies.--Within
18 months after the date of enactment of this Act, the
Secretary shall prepare and submit to the President and the
Congress a final report that recommends the reallocation of at
least 170 megahertz of frequencies as described in paragraph
(2). Not less than one-half of such frequencies shall be
located below 3 gigahertz.
(6) Limitation on reallocation.--None of the frequencies
recommended for reallocation in the reports required by this
subsection shall have been recommended, prior to the date of
enactment of this Act, for reallocation to non-Federal use by
international agreement.
(e) Timetable for reallocation and limitation.--The Secretary
shall, as part of the reports required by paragraphs (1) and (2) of
subsection (d), include a timetable that recommends dates by which the
President shall withdraw or limit assignments of the frequencies
specified in the reports. In setting the recommended effectived dates,
the Secretary shall--
(1) consider the need to reallocate frequencies as early as
possible, taking into account the requirements of section 406;
(2) consider the useful remaining life of equipment that
has been purchased or contracted for purchase to operate on
identified frequencies;
(3) consider the need to coordinate frequency use with
other nations; and
(4) take into account the relationship between the costs to
the Federal Government of changing to different frequencies and
the benefits that may be obtained from commercial and other
non-Federal uses of the reassigned frequencies.
SEC. 4005. WITHDRAWAL OR LIMITATION OF ASSIGNMENT TO FEDERAL GOVERNMENT
STATIONS.
(a) In General.--The President shall--
(1) within 12 months after receipt of the report required
by section 404(d)(1), withdraw the assignment to a Federal
Government station of any frequency in the frequencies
recommended by that report for immediate reallocation;
(2) by the effective date recommended by the Secretary
under section 404(e) (except as provided in subsection (b)(4)
of this section), withdraw or limit the assignment to a Federal
Government station of any frequency which the report required
by section 404(d)(3) recommends be reallocated or made
available for mixed use on such recommended effective date;
(3) assign or reassign other frequencies to Federal
Government stations as necessary to adjust to such withdrawal
or limitation of assignments; and
(4) transmit a notice and description to the Commission and
each House of Congress of the actions taken under this
subsection.
(b) Exceptions.--
(1) Authority to substitute.--If the President determines
that a circumstance described in paragraph (2) exists, the
President--
(A) may substitute an alternative frequency for the
frequency that is subject to such determination and
withdraw (or limit) the assignment of that alternative
frequency in the manner required by subsection (a); and
(B) shall submit a statement of the reasons for
taking the action described in subparagraph (A) to the
Committee on Energy and Commerce of the House of
Representatives and the Committee on Commerce, Science,
and Transportation of the Senate.
(2) Grounds for substitution.--Each of the following
subparagraphs describes a circumstance referred to in paragraph
(1):
(A) The reassignment would seriously jeopardize the
national defense interests of the United States.
(B) The frequency proposed for reassignment is
uniquely suited to meeting important governmental
needs.
(C) The reassignment would seriously jeopardize
public health or safety.
(D) The reassignment will result in costs to the
Federal Government that are excessive in relation to
the benefits that may be obtained from commercial or
other non-Federal uses of the reassigned frequency.
(E) The reassignment will disrupt the existing use
of a Federal Government band of frequencies by amateur
radio licensees.
(3) Criteria for substituted frequencies.--For purposes of
paragraph (1), a frequency may not be substituted for a
frequency identified and recommended under section 404 for
reallocation, unless the substituted frequency also meets each
of the criteria specified by section 404(a).
(4) Delays in implementation.--If the President determines
that any action cannot be completed by the effective date
recommended by the Secretary pursuant to section 404(e), or
that such an action by such date would result in a frequency
being unused as a consequence of the Commission's plan under
section 404(b), the President may--
(A) withdraw or limit the assignment to Federal
Government stations on a later date that is consistent
with such plan, except that the President shall notify
each Committee specified in paragraph (1)(B) and the
Commission of the reason that withdrawal or limitation
at a later date is required; or
(B) substitute alternative frequencies pursuant to
this subsection.
(c) Costs of Withdrawing Frequencies Assigned to the Federal
Government.--
(1) Reimbursement authorized.--Any Federal agency, or non-
Federal entity operating on behalf of a Federal agency, whose
operation is displaced from a frequency pursuant to this
section may be reimbursed, from revenues received pursuant to
section 408, not more than the incremental costs such agency or
entity incurs (in such amounts as are provided in advance in an
appropriations Act) that are directly attributable to the
displacement from the frequency. The estimates of these costs
shall be prepared by the affected agency, in consultation with
the Department of Commerce.
(2) Authorization of appropriations.--There are authorized
to be appropriated to the affected Federal agencies such sums
as may be necessary to carry out the purposes of this
subsection.
(d) Existing Authority Retained.--
(1) Additional reallocation.--Nothing in this subtitle
prevents or limits additional reallocation of spectrum from the
Federal Government to the commercial or other sectors.
(2) Implementation of new technologies and services.--
Notwithstanding any other provision of this subtitle--
(A) the Secretary may at any time allow frequencies
allocated on a primary basis for Federal Government use
to be used by non-Federal licensees on a mixed-use
basis for the purpose of facilitating the prompt
implementation of new technologies or services; and
(B) the Commission shall expedite and give priority
to the allocation of any frequencies identified
pursuant to subparagraph (A), and any associated
licensing.
SEC. 4006. ALLOCATION AND ASSIGNMENT OF FREQUENCIES BY THE COMMISSION.
(a) Allocation and Assignment of Immediately Available
Frequencies.--With respect to the frequencies made available for
immediate reallocation pursuant to section 405(a)(1), the Commission,
not later than 18 months after the date of enactment of this Act, shall
issue rules to allocate such frequencies and shall propose rules to
assign such frequencies.
(b) Allocation and Assignment of Remaining Available Frequencies.--
With respect to the frequencies made available for reallocation
pursuant to section 405(a)(2), the Commission shall, not later than 1
year after receipt of the final report identified in section 404(d)(4),
prepare, in consultation with the Assistant Secretary of Commerce for
Communications and Information, submit to the President and the
Congress, and implement, a plan for the allocation and assignment under
the Act of such frequencies. Such plan shall--
(1) not propose the immediate allocation and assignment of
all such frequencies but, taking into account the timetable
recommended by the Secretary pursuant to section 404(e), shall
propose--
(A) gradually to allocate and assign the
frequencies remaining, after making the reservation
required by subparagraph (B), over the course of 10
years beginning on the date of submission of such plan;
and
(B) to reserve a significant portion of such
frequencies for distribution beginning after the end of
such 10-year period;
(2) contain appropriate provisions to ensure the
availability of frequencies for (A) new technologies and
services in accordance with the policies of section 7 of the
Act (47 U.S.C. 157) and (B) the safety of life and property in
accordance with the policies of section 1 of the Act (47 U.S.C.
151);
(3) address (A) the feasibility of reallocating portions of
the spectrum from current commercial and other non-Federal uses
to provide for more efficient use of the spectrum, and (B)
innovation and marketplace developments that may affect the
relative efficiencies of different spectrum allocations;
(4) not prevent the Commission from allocating frequencies,
and assigning licenses to use frequencies, not included in the
plan; and
(5) not preclude the Commission from making changes to the
plan in future proceedings.
(c) Amendment to the Act.--Section 303 of the Act (47 U.S.C. 303)
is amended by adding at the end the following new subsection:
``(v) Have authority to assign licenses to use the frequencies
reallocated from United States Government use to non-United States
Government use pursuant to the Emerging Telecommunications Technologies
Act of 1993; except that any such assignment shall be made expressly
subject to the right of the President to reclaim such frequencies under
section 7 of such Act.''.
SEC. 4007. AUTHORITY TO RECLAIM REASSIGNED FREQUENCIES.
(a) Authority of President.--Subsequent to the withdrawal of
assignment to Federal Government stations pursuant to section 405, the
President may reclaim reassigned frequencies for reassignment to
Federal Government stations in accordance with this section.
(b) Procedure for Reclaiming Frequencies.--
(1) Unallocated frequencies.--If the frequencies to be
reclaimed have not been allocated or assigned by the Commission
pursuant to the Act, the President shall follow the procedures
for substitution of frequencies established by section 405(b)
of this subtitle.
(2) Allocated frequencies.--If the frequencies to be
reclaimed have been allocated or assigned by the Commission,
the President shall follow the procedures for substitution of
frequencies established by section 405(b) of this subtitle,
except that the notification required by section 405(b)(1)(B)
shall include--
(A) a timetable to accommodate an orderly
transition for displaced licensees to obtain new
frequencies and equipment necessary for its
utilization; and
(B) an estimate of the cost of displacing spectrum
uses licensed by the Commission.
(c) Costs of Reclaiming Frequencies; Appropriations Authorized.--
The Federal Government shall bear all costs of reclaiming frequencies
pursuant to this section, including the cost of equipment which is
rendered unusable, the cost of relocating operations to a different
frequency, and any other costs that are directly attributable to the
reclaiming of the frequency pursuant to this section. There are
authorized to be appropriated such sums as may be necessary to carry
out the purposes of this section.
(d) Effective Date of Reclaimed Frequencies.--The Commission shall
not withdraw licenses for any reclaimed frequencies until the end of
the fiscal year following the fiscal year in which the President's
notification is received.
(e) Effect on Other Law.--Nothing in this section shall be
construed to limit or otherwise affect the authority of the President
under section 706 of the Act (47 U.S.C. 606).
SEC. 4008. COMPETITIVE BIDDING.
(a) Competitive Bidding.--
(1) In general.--
(A) Five-year authorization.--The Commission shall,
during fiscal years 1994 through 1998, use the
competitive bidding process authorized under the
amendment made by subsection (b) to grant all radio
spectrum licenses for which two or more mutually
exclusive applications have been filed, including the
200 megahertz of spectrum made available to the
Commission under this subtitle, and including the
licenses issued for a personal communications service
established pursuant to the proceeding entitled
``Amendment to the Commission's Rules to Establish New
Personal Communications Services'', or any successor
proceeding, except for those licenses identified in
subparagraphs (A) through (E) of section 309(j)(4) of
the Act and those licenses that the Commission
determines should in the public interest be issued by
comparative hearing under section 309(a) through (f) of
the Act. To the extent possible, and consistent with
the purposes of this subtitle, the Commission shall
seek to ensure that revenues received pursuant to the
competitive bidding process are received before the end
of fiscal year 1998.
(B) Expiration of requirements.--The requirements
of subparagraph (A) shall expire either--
(i) upon a determination by the Secretary
of the Treasury that competitive bidding has
resulted in or is reasonably expected to result
in the receipt of $7,200,000,000 by the end of
fiscal year 1998, or
(ii) at the end of fiscal year 1998,
whichever is earlier.
(C) Report to president and congress.--The
Commission shall prepare, in consultation with the
Assistant Secretary of Commerce for Communications and
Information, and submit to the President and the
Congress, not later than March 31, 1997, and March 31,
1999, reports on the use of competitive bidding under
subparagraph (A). Such reports shall examine, in
addition to any other matters deemed appropriate by the
Commission, whether and to what extent--
(i) competitive bidding significantly
improved the efficiency and effectiveness of
the process for granting radio spectrum
licenses;
(ii) competitive bidding facilitated the
introduction of new spectrum-based technologies
and the entry of new companies into the
telecommunications market;
(iii) the needs of rural spectrum users
were adequately addressed in the competitive
bidding process;
(iv) small businesses and minority-owned
businesses were able to participate
successfully in the competitive bidding
process; and
(v) statutory changes are needed to improve
the competitive bidding process.
(2) Retention of revenues.--Notwithstanding paragraph (6)
of section 309(j) of the Act, as added by this subtitle, the
salaries and expenses account of the Commission shall retain as
an offsetting collection such sums as may be necessary from the
receipts received pursuant to such section for the costs of
developing and implementing the program required by subsection
(a)(1)(A). Such offsetting collections shall be available for
obligation subject to the terms and conditions of the receiving
appropriations account, and shall be deposited in such accounts
on a quarterly basis. Any funds appropriated to the Commission
for fiscal years 1994 through 1998 for the purpose of assigning
licenses using random selection under section 309(i) of the Act
shall be used by the Commission to implement section 309(j) of
the Act.
(b) Competitive Bidding Authorization.--Section 309 of the Act (47
U.S.C. 309) is amended by adding at the end the following new
subsection:
``(j)(1) Subject to the exemptions and conditions set forth in the
other provisions of this subsection, if there are two or more mutually
exclusive applications for any construction permit or initial license
which will involve any use of the electromagnetic spectrum, the
Commission shall have authority to use competitive bidding in the
granting of such construction permit or initial license.
``(2)(A) The Commission shall, within 6 months after the date of
enactment of the Emerging Telecommunications Technologies Act of 1993
and following public notice and comment proceedings, issue rules
establishing competitive bidding procedures under this subsection. Such
rules shall include safeguards to protect the public interest in the
use of the spectrum and shall ensure the opportunity for successful
participation by small businesses and minority-owned businesses.
``(B)(i) In the rules issued pursuant to subparagraph (A), the
Commission shall require potential bidders to file a first-stage
application indicating an intent to participate in the competitive
bidding process and containing such other information as the Commission
finds necessary. After conducting the bidding, the Commission shall
require the wining bidder to file a second-stage application. After
determining that such application is acceptable for filing and that the
winning bidder is qualified as described in clause (ii), the Commission
shall grant the permit or license to the winning bidder.
``(ii) No permit or license shall be granted to a winning bidder
pursuant to clause (i) unless the Commission determines that such
winning bidder is qualified pursuant to section 308(b) and subsection
(a) of this section, on the basis of the information contained in the
first-stage and second-stage applications submitted pursuant to clause
(i).
``(iii) Each participant in the competitive bidding process shall
be subject to the schedule of charges contained in section 8.
``(C) In the rules issued pursuant to subparagraph (A), the
Commission, in addition to other actions it finds necessary to
implement competitive bidding fairly and effectively, shall--
``(i) establish the method of bidding (including but not
limited to sealed bids) and the basis for payment (such as
installment or lump sum payments, royalties on future income, a
combination thereof, or other reasonable forms of payment
specified by the Commission); and
``(ii) establish other appropriate conditions on such
permits and licenses that serve the public interest.
``(3)(A)(i) If the Commission decides to use competitive bidding to
grant two or more national, regional, or local licenses per market in a
terrestrial service that will compete with telephone exchange service
provided by a qualified common carrier, the Commission shall designate
one such license per market as a rural program license.
``(ii) The Commission shall define the geographic boundaries of the
rural program license to correspond to the geographic area of the
telephone exchange service by which the qualified common carrier became
eligible for the rural program license under subparagraph (E)(ii).
``(B)(i) Except as provided in subparagraph (D), the Commission
shall either grant a rural program license to the qualified common
carrier providing telephone exchange service in the area covered by
such license, or grant a license to a consortium of such qualified
carriers.
``(ii) No qualified common carrier that receives a rural program
license shall be eligible to--
``(I) receive any other license to provide the same service
in such area; or
``(II) own any equity interest in, become a creditor of, or
otherwise become affiliated with any entity that holds a
license to provide the same service in such area.
``(iii) Any qualified common carrier that receives a rural program
license shall (I) provide to all other licensees providing the same
service in such area the same quality of access to its wire network
that it provides itself, and (II) shall interconnect its wireless
service with the wireless service provided by another licensee
providing the same service on the same frequency in a different
geographic area. Such other licensee shall provide an equivalent
interconnection with the wireless service of such rural program
licensee.
``(iv) The Commission may establish other rules or conditions for
the award of a rural program license, consistent with the intent of
this paragraph.
``(C)(i) Upon the grant of a rural program license to a qualified
common carrier, such carrier shall pay a fee (in lump sum or
installment payments, in royalties on future income, in a combination
thereof, or on any other reasonable basis specified by the Commission)
equal to the value of such license. The value of such license shall be
the average of the amounts paid by persons granted licenses through
competitive bidding to provide the same service in such area, except
that the Commission shall determine the value of such license by any
reasonable means when the geographic area served by the rural program
license is not congruent with the geographic area served by the other
license or licenses. The Commission shall ensure that the total amount
paid by qualified common carriers for all the licenses issued to them
under the rural program shall equal the total value, as determined
under clause (ii), of such licenses.
``(ii) The Commission shall determine the total value of the
licenses issued under the rural program to qualified common carriers by
first adding the amounts paid for the licenses not subject to the rural
program, and dividing that sum by the number of licenses per market
that are not subject to the rural program. The Commission shall then
subtract from the amount found in the previous calculation the total
amount paid for the licenses issued for the non-rural areas under
bidding subject to the rural program and the total amount paid for
licenses issued pursuant to subparagraph (D). The amount remaining
shall be the total value of all the licenses issued under the rural
program to qualified common carriers.
``(D) If no qualified common carrier applies for a rural program
license in a particular market and the Commission awards the non-rural
program licenses through competitive bidding, the rural program shall
not apply for that particular market and the Commission shall use
competitive bidding to award the licenses for the former rural program
areas, either separately or as part of larger license areas.
``(E) For purposes of this paragraph--
``(i) the term `rural area' means any geographic area that
does not include either--
``(I) any incorporated place of 10,000 inhabitants
or more, or any part thereof; or
``(II) any territory, incorporated or
unincorporated, included in an urbanized area (as
defined by the Bureau of the Census as of the date of
enactment of the Emerging Telecommunications
Technologies Act of 1993); and
``(ii) the term `qualified common carrier' means a common
carrier that--
``(I) either provides telephone exchange service by
wire in a rural area, provides telephone exchange
service by wire to less than 10,000 subscribers, or is
a telephone utility whose income accrues to a State or
political subdivision thereof; and
``(II) submits an application for a rural program
license that meets the standards established by the
Commission to determine ability to provide the service
covered by the license.
``(F) The provisions of subparagraph (A)(ii) do not limit the
Commission's discretion to determine, for licenses issued other than
under this paragraph, the size of any market area or the number of
licensees for any service.
``(4) The competitive bidding authority provided to the Commission
in paragraph (1) shall not--
``(A) because of the need to avoid excessive service
disruption, extend to license renewals and modifications;
``(B) because of the essential services they provide,
extend to licenses reserved for the United States Government
and State or local government entities;
``(C) because of their public service obligations, extend
to licenses to provide amateur operator services, over-the-air
terrestrial radio and television broadcast services, public
safety services, and radio astronomy services;
``(D) because they do not involve mutually exclusive
applications, extend to private radio end-user licenses,
including Specialized Mobile Radio Service (SMRS), maritime,
and aeronautical end-user licenses;
``(E) because of the need to avoid excessive service
disruption, extend to any license grant to a non-Federal
licensee being moved from its current frequency assignment to a
different one by the Commission in order to make spectrum
available for new technologies; and
``(F) extend to any other service, class of services, or
assignments that the Commission determines, after conducting
public notice and comment proceedings, should be exempt from
competitive bidding because of public interest factors
warranting an exemption to the extent the Commission determines
the use of competitive bidding would jeopardize appropriate
treatment of those factors.
``(5) No provision of this subsection or of the Emerging
Telecommunications Technologies Act of 1993 shall be construed, in any
way, to--
``(A) alter spectrum allocation criteria and procedures
established by the other provisions of this Act;
``(B) allow the Commission to consider potential revenues
from competitive bidding when making decisions concerning
spectrum allocation;
``(C) diminish the authority of the Commission under the
other provisions of this Act to regulate or reclaim spectrum
licenses;
``(D) grant any right to a spectrum licensee different from
the rights awarded to licensees who obtained their license
through assignment methods other than competitive bidding; or
``(E) prevent the Commission from awarding licenses to
those persons who make significant contributions to the
development of a new telecommunications service or technology.
``(6) Moneys received from competitive bidding pursuant to this
subsection shall be deposited in the general fund of the Treasury.''
(c) State and Local Tax Treatment of Licenses and Permits.--Title
VII of the Act (47 U.S.C. 601 et seq.) is amended by adding at the end
the following new section:
``SEC. 714. STATE AND LOCAL TAX TREATMENT OF LICENSES AND PERMITS.
``A license or permit issued by the Commission under this Act shall
not be treated as the property of the licensee for property tax
purposes, or other similar tax purposes, by any State or local
government entity.''.
SEC. 4009. REGULATORY PARITY.
(a) Amendment.--Section 332 of the Act (47 U.S.C. 332) is amended--
(1) by striking ``private land'' from the heading of the
section; and
(2) by amending subsection (c) to read as follows:
``(c)(1)(A) A person engaged in the provision of commercial mobile
services shall, insofar as such person is so engaged, be treated as a
common carrier for purposes of this Act, except that the Commission may
waive the requirements of sections 203, 204, 205, and 214, and the 30-
day notice provision of section 309(a), for commercial mobile services
and such other provisions of title II as the Commission may, consistent
with the public interest, specify by rule. In prescribing any such
rule, the Commission may not waive for commercial mobile services the
requirements of section 201, 202, 206, 208, 209, 215(c), 216, 217, 220
(d) or (e), 223, 225, 226 (a), (b), (c), (d), (e), (f), (g), or (i),
227, or 228, or any other provision that is necessary in order to
ensure that the charges, practices, classifications, or regulations for
or in connection with commercial mobile services are just and
reasonable and are not unjustly or unreasonably discriminatory or that
is otherwise in the public interest.
``(B) Upon reasonable request of any person providing commercial
mobile service, the Commission shall order a common carrier to
establish physical connections with such service pursuant to section
201. Except to the extent that the Commission is required to respond to
such a request, this subparagraph shall not be construed as a
limitation or expansion of the Commission's authority to order
interconnection under this Act.
``(2) A person engaged in private land mobile service shall not,
insofar as such person is so engaged, be treated as a common carrier
for any purpose under this Act. A common carrier shall not provide any
dispatch service on any frequency allocated for common carrier service,
except to the extent that such dispatch service is provided on stations
licensed by the Commission in the Specialized Mobile Radio Service
prior to May 24, 1993, or is provided on stations licensed in the
domestic public land mobile radio service before January 1, 1982. The
Commission may by regulation terminate, in whole or in part, the
prohibition contained in the preceding sentence if the commission
determines that such termination will service the public interest.
``(3)(A) Notwithstanding sections 2(b) and 221(b), no State or
local government shall have any authority to regulate the entry of or
the rates charged by any commercial mobile service or any private land
mobile service, except that this paragraph shall not prohibit a State
from regulating the other terms and conditions of commercial mobile
services. Nothing in this subparagraph shall exempt providers of
commercial mobile services (where such services are a substitute for
land line telephone exchange service for a substantial portion of the
communications within such State) from requirements imposed by a State
commission on all providers of telecommunications services necessary to
ensure the continued availability of telephone exchange service at
affordable rates.
``(B) Notwithstanding subparagraph (A), a State may petition the
Commission for authority to regulate the rates for any commercial
mobile service if such State demonstrates that (i) such service is a
substitute for land line telephone exchange service for a substantial
portion of the communications within such State, or (ii) market
conditions with respect to such services fail to protect subscribers
adequately from unjust and unreasonable rates or rates that are
unjustly or unreasonably discriminatory. The Commission shall provide
reasonable opportunity for public comment in response to such petition,
and shall, within 9 months after the date of its submission, grant or
deny such petition. If the Commission grants such petition, the
Commission shall authorize the State to exercise under State law such
authority over rates, for such periods of time, as the Commission deems
necessary to ensure that such rates are just and reasonable and not
unjustly or unreasonably discriminatory.
``(C) If a State has in effect on June 1, 1993, any regulation
concerning the rates for any commercial mobile service, such State may,
no later than 1 year after the date of enactment of the Emerging
Telecommunications Technologies Act of 1993, petition the Commission
requesting that the State be authorized to continue exercising
authority over such rates. The State's existing regulation shall,
notwithstanding subparagraph (A), remain in effect until the Commission
issues a final order granting or denying such petition. The Commission
shall review such petition in accordance with the procedures and
schedule established in subparagraph (B), and shall grant such petition
if the State satisfies the showing required under subparagraph (B)(i)
or (B)(ii). If the Commission grants such petition, the Commission
shall authorize the State to exercise under the State law such
authority over rates, for such period of time, as the Commission deems
necessary to ensure that such rates are just and reasonable and not
unjustly or unreasonably discriminatory.
``(D) After a reasonable period of time, as determined by the
Commission, has elapsed from the issuance of an order under
subparagraph (B) or (C), any interested party may petition the
Commission for an order that the exercise of authority by a State
pursuant to such subparagraph is no longer necessary to ensure that the
rates for commercial mobile services are just and reasonable and not
unjustly or unreasonably discriminatory. The Commission shall provide
reasonable opportunity for public comment in response to such petition,
and shall, within 9 months after the date of its submission, grant or
deny such petition in whole or in part.
``(4) Nothing in this subsection shall be construed to alter or
affect the regulatory treatment required by title IV of the
Communications Satellite Act of 1962 of the corporation authorized by
title III of such Act.
``(5) The Commission shall continue to determine whether the
provision of space segment capacity by satellite systems to providers
of commercial mobile services shall be treated as common carriage.
``(6) The provisions of section 310(b) shall not apply to any
lawful foreign ownership in a provider of commercial mobile services
prior to May 24, 1993, if that provider was not regulated as a common
carrier prior to the date of enactment of the Emerging
Telecommunications Technologies Act of 1993 and is deemed to be a
common carrier under this Act.
``(7) As part of any proceeding under this subsection the
Commission (i) shall consider in such proceeding the ability of new
entrants to compete in the services to which such proceeding relates,
and (ii) shall have the flexibility to amend, modify, or forbear from
any regulation of new entrants under this subsection, or, consistent
with the public interest, take other appropriate action, to provide a
full opportunity for new entrants to compete in such services.
``(8) For purposes of this section--
``(A) the term `commercial mobile service' means any mobile
service (as defined in section 3(n)) that, as specified by
regulation by the Commission, is provided for profit and makes
interconnected service available (i) to the public or (ii) to
such broad classes of eligible users as to be effectively
available to a substantial portion of the public;
``(B) the term `interconnected service' means service that
is interconnected with the public switched network (as such
term is defined by regulation by the Commission) or service for
which interconnection pursuant to paragraph (1)(B) is pending;
and
``(C) the term `private land mobile service' means any
mobile service (as defined in section 3(n)) that is not a
commercial mobile service under subparagraph (A).''.
(b) Conforming Amendments.--
(1) Definition of mobile service.--Section 3 of the Act (47
U.S.C. 153) is amended--
(A) in subsection (n)--
(i) by inserting ``(1)'' immediately after
``and includes''; and
(ii) by inserting immediately before the
period at the end the following: ``, (2) a
mobile service which provides a regularly
interacting group of base, mobile, portable,
and associated control and relay stations
(whether licensed on an individual,
cooperative, or multiple basis) for private
one-way or two-way land mobile radio
communications by eligible users over
designated areas of operation, and (3) any
service for which a license is required in a
personal communications service established
pursuant to the proceeding entitled `Amendment
to the Commission's Rules to Establish New
Personal Communications Services' (GEN Docket
No. 90-314; ET Docket No. 92-100), or any
successor proceeding; but such term does not
include any rural radio service as defined by
the Commission and does not include the
provision, by a local exchange carrier, of
telephone exchange service by radio instead of
by wire''; and
(B) by striking subsection (gg).
(2) Regulation of intrastate communications.--Section 2(b)
of the Act (47 U.S.C. 152(b)) is amended by inserting ``and
section 332'' immediately after ``inclusive,''.
(c) Rulemaking Schedule; Effective Date.--
(1) Rulemaking required.--Within 1 year after the date of
enactment of this Act, the Commission shall--
(A) issue such modifications or terminations of its
regulations as are necessary to implement the
amendments made by subsection (a);
(B) make such other modifications of such
regulations as may be necessary to promote parity in
the regulatory treatment of providers of all commercial
mobile services that offer services that are
substantially similar; and
(C) include in such modifications and terminations
such provisions as are necessary to provide for an
orderly transition to the regulatory treatment required
by such amendments.
(2) Effective date.--The amendments made by subsection (a)
shall be effective 1 year after such date of enactment, except
that--
(A) section 332(c)(1)(A) of the Act, as added by
such amendments, shall take effect upon such date of
enactment; and
(B) any person that provides private land mobile
services before such date of enactment shall continue
to be treated as a provider of private land mobile
service until 3 years after such date of enactment.
SEC. 4010. DEADLINES FOR PCS ORDERS AND LICENSING.
The Commission shall--
(1) within 180 days after the date of enactment of this
Act, issue a final report and order (A) in the matter entitled
``Redevelopment of Spectrum to Encourage Innovation in the Use
of New Telecommunications Technologies'' (ET Docket No. 92-9);
and (B) in the matter entitled ``Amendment of the Commission's
Rules to Establish New Personal Communications Services'' (GEN
Docket No. 90-314; ET Docket No. 92-100); and
(2) within 270 days after such date of enactment, commence
issuing licenses and permits in the personal communications
service.
SEC. 4011. DEFINITIONS.
As used in this subtitle:
(1) The term ``allocation'' means an entry in the National
Table of Frequency Allocations of a given frequency band for
the purpose of its use by one or more radiocommunication
services.
(2) The term ``assignment'' means an authorization given to
a station licensee to use specific frequencies or channels in a
particular geographic area.
(3) The term ``commercial carrier'' means any entity that
uses a facility licensed by the Federal Communications
Commission pursuant to the Communications Act of 1934 for hire
or for its own use, but does not include Federal Government
stations licensed pursuant to section 305 of the Act (47 U.S.C.
305).
(4) The term ``Commission'' means the Federal
Communications Commission.
(5) The term ``Secretary'' means the Secretary of Commerce.
(6) The term ``the Act'' means the Communications Act of
1934 (47 U.S.C. 151 et seq.).
Subtitle B--Vessel Tonnage Duties
SEC. 4051. EXTENSION OF VESSEL TONNAGE DUTIES.
(a) Extension of Duties.--Section 36 of the Act of August 5, 1909
(36 Stat. 111; 46 App. U.S.C. 121), is amended--
(1) by striking ``and 1995,'' each place it appears and
inserting in lieu thereof ``1995, 1996, 1997, and 1998,'';
(2) by striking ``place,'' and inserting in lieu thereof
``place;''; and
(3) by striking ``port, not, however, to include vessels in
distress or not engaged in trade'' and inserting in lieu
thereof ``port. However, neither duty shall be imposed on
vessels in distress or not engaged in trade''.
(b) Conforming Amendment.--The Act of March 8, 1910 (36 Stat. 234;
46 App. U.S.C. 132), is amended by striking ``and 1995,'' and inserting
in lieu thereof ``1995, 1996, 1997, and 1998.''.
(c) Technical Correction.--
(1) Correction.--Section 10402(a) of the Omnibus Budget
Reconciliation Act of 1990 (104 Stat. 1388-398) is amended by
striking ``in the second paragraph''.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective on and after November 5, 1990.
TITLE V--COMMITTEE ON ENERGY AND NATURAL RESOURCES
Subtitle A--Recreation and Commercial Use Fees
SEC. 5001. ADMISSION FEES.
Section 4(a) of the Land and Water Conservation Fund Act of 1965
(16 U.S.C. 460l-6a(a)), is amended:
(1) by inserting in the first sentence of the first
paragraph after the words ``National Park System'' the words
``and for fiscal years 1994 through 1998, the Bureau of Land
Management'' and by inserting after the words ``National
Recreation Areas'' the words ``, and for fiscal years 1994
through 1998, National Monuments, National Volcanic Monuments,
National Scenic Areas, and areas of concentrated public use'';
and
(2) by adding at the end the following new paragraph:
``(13) For the purposes of this subsection, `areas of
concentrated public use' shall meet each of the following
criteria:
``(A) be managed primarily for outdoor recreation
purposes;
``(B) provide facilities and services necessary to
accommodate heavy public use;
``(C) contain at least one major recreation
attraction including, but not limited to, a lake,
river, historical site, or geologic feature; and
``(D) provide public access such that admission
fees can be efficiently collected at one or more
centralized locations.''.
SEC. 5002. RECREATION USE FEES.
(a) In General.--The first sentence of section 4(b) of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(b)) is amended
by striking out ``visitors' centers,'' and all that follows down
through the period at the end thereof and inserting the following:
``scenic drives, or toilet facilities: Provided, That in no event shall
there be any charge for the use of any campground not having a majority
of the following: tent or trailer spaces, picnic tables, drinking
water, access road, refuse containers, toilet facilities, fee
collection by an employee or agent of the Federal agency operating the
facility, reasonable visitor protection, and simple devices for
containing a campfire (where campfires are permitted). For purposes of
this subsection, the term `specialized outdoor recreation site'
includes but shall not be limited to campgrounds, swimming sites, boat
launch facilities, and managed parking lots.''.
(b) Costs of Collection.--Section 4(i) of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(i)) is amended by
inserting ``(A)'' after ``(1)'' and by adding the following at the end
of paragraph (1):
``(B) Notwithstanding subparagraph (A), in any fiscal year,
the Secretary of Agriculture and the Secretary of the Interior
may withhold from the special account established under
subparagraph (A) such portion of all receipts the fees
collected in that fiscal year under this section as such
Secretary determines to be equal to the additional fee
collection costs for that fiscal year. The amounts so withheld
shall be retained by the Secretary of Agriculture or the
Secretary of the Interior and shall be available, without
further appropriation, for expenditure by the Secretary
concerned in the fiscal year in which collected to cover such
additional fee collection costs. The Secretary concerned shall
deposit in the special account established pursuant to
subparagraph (A) any amounts so retained which remain
unexpended and unobligated at the end of such fiscal year. For
the purposes of this subparagraph, for any fiscal year, the
term `additional fee collection costs' means those costs for
personnel and infrastructure directly associated with the
collection fees imposed under this section which exceed the
costs for personnel and infrastructure directly associated with
the collection of such fees during fiscal year 1993.''.
(c) Commerical Tour Use Fees.--(1) For fiscal years 1994 through
1998, in the case of each unit of the National Park System for which an
admission fee is charged under section 4 of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l-4), the Secretary of the
Interior shall establish, by October 1, 1993, a commercial tour use fee
to be imposed on each vehicle entering the unit for the purpose of
providing commercial tour services within the unit. Fee revenue derived
from such commercial tour use fees shall be deposited into the special
account established under section 4(i) of the Land and Water
Conservation Fund Act of 1965.
(2) The Secretary shall establish the amount of fee per entry as
follows:
(A) $25 per vehicle with a passenger capacity of 25 persons
or less, and
(B) $50 per vehicle with a passenger capacity of more than
25 persons.
(3) The commercial tour use fee imposed under this subsection shall
not apply to either of the following:
(A) Any vehicle transporting organized school groups or
outings conducted for educational purposes by schools or
other bona fide educational institutions.
(B) Any vehicle entering a park system unit pursuant to a
contract issued under the Act of October 9, 1965 (16 U.S.C. 20-
20g) entitled ``An Act relating to the establishment of
concession policies in the areas administered by the National
Park Service and for other purposes.''.
(d) Non-Federal Golden Eagle Passport Sales.--Section 4(a)(1)(A) of
the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-
6a(a)(1)(A)) is amended by redesignating the paragraph as 4(a)(1)(A)(i)
and adding at the end thereof the following new paragraph:
``(ii) For fiscal years 1994 through 1998, the Secretary of the
Interior and the Secretary of Agriculture may authorize businesses,
non-profit entities, and other organizations to sell and collect fees
for the Golden Eagle Passport subject to such conditions as the
Secretaries may jointly prescribe. The Secretaries shall develop
detailed guidelines for promotional advertising of non-Federal Golden
Eagle Passport sales and shall monitor compliance with such guidelines.
The Secretaries may authorize the sellers to maintain an inventory of
Golden Eagle Passports for periods not to exceed 6 months, and to
withhold amounts up to, but not exceeding 7 per centum of the fees of
the gross fees collected from the sale of such passports as
reimbursement for actual expenses of the sales.''.
SEC. 5002A. EXTENSION OF AUTHORITY TO COLLECT FEE.
The third undesignated paragraph under the heading ``ADMINISTRATIVE
PROVISIONS'' in chapter VII of title I of Public Law 98-63 (97 Stat.
329) is amended by striking paragraph (3).
SEC. 5003. RADIO AND TELEVISION COMMUNICATION SITE FEES.
(a) Notwithstanding any other provision of law, the Secretary of
Agriculture and the Secretary of the Interior (hereinafter referred to
as ``the Secretaries''), shall assess and collect charges for
utilization of radio and television communications sites located on
Federal lands administered by the Forest Service or the Bureau of Land
Management at such rates as the Forest Service and the Bureau of Land
Management shall establish or at such modified rates as are established
pursuant to the provisions of subsection (b) of this section.
(b) The schedule of charges established under this section shall be
reviewed by the Forest Service and the Bureau of Land Management on an
annual basis, and shall be adjusted by the Forest Service and the
Bureau of Land Management to reflect changes in the Consumer Price
Index. Increases or decreases in charges shall apply to all categories
of charges, but any increase or decrease shall not total less than 3
percent or more than 5 percent of the charge assessed to the user in
the preceding year. The Bureau of Land Management and the Forest
Service shall transmit to the Congress notification of any such
adjustment not later than 60 days before the effective date of such
adjustment.
(1) Under the schedule of charges established under the
section, if any radio or television communications site user is
to be charged an amount that is greater than $1,000 more than
the amount such site user pays to the Bureau of Land Management
or the Forest Service as of January 1, 1993, then during the
first year in which the schedule of charges is in effect, such
site user shall pay an amount equal to the amount it paid to
the Bureau of Land Management or the Forest Service as of
January 1, 1993 plus $1,000. Each year thereafter, such site
user shall pay the full amount under the schedule of charges,
as modified pursuant to the subsection.
(2) Under the schedule of charges established under this
section, if any radio or television communications site user is
to be charged an amount that is less than the amount such site
user paid to the Bureau of Land Management or the Forest
Service as of January 1, 1993, such site user shall continue to
pay the higher amount until such time as the charge to the site
user in the schedule of charges equals or exceeds that amount,
as modified pursuant to this subsection.
(c)(1) If the radio or television communications site user is
permitted under the terms of its site use authorization from the Bureau
of Land Management or the Forest Service to grant access to the site to
additional users, then the radio or television communications site user
shall pay annually to the Bureau of Land Management or the Forest
Service an amount equal to 25 percent of the gross income it receives
from each such additional user during that year.
(2) Authorizations to radio and television communications site
users shall require such site users to provide the Bureau of Land
Management or the Forest Service with a certified list which identifies
all additional users of such sites and all gross revenues received from
such additional users. The Bureau of Land Management and the Forest
Service shall not require any additional user of a radio or television
communications site to obtain a separate authorization to use such a
site.
(d)(1) The Secretaries shall prescribe appropriate rules and
regulations to carry out the provisions of this section.
(2) Ten years after the date of enactment of this section, the
Secretaries shall establish a broad-based advisory group, including
representatives from the radio and television broadcast industry, to
review the schedule of charges and other acceptable criteria for
determining fair market value for radio and television communications
site users. The advisory group shall report its findings to the
Congress no later than 1 year after it is established.
(e)(1) Until modified pursuant to subsection (b) of this section,
the schedule of charges for television communications site users which
the Secretaries shall prescribe pursuant to subsection (a) of this
section shall be as listed in exhibit 3, (television rental fee
schedule) in the report of the radio and television broadcast use fee
advisory committee dated December 1992.
(2) Until modified pursuant to subsection (b) of this section, the
schedule of charges for radio communications site users which the
Secretaries shall prescribe pursuant to subsection (a) of this section
shall be as listed in exhibit 4, (radio rental fee schedule) in the
report of the radio and television broadcast use fee advisory committee
dated December 1992.
(f)(1) The Secretaries are directed to jointly establish a broad-
based advisory group comprised of representatives from the non-
broadcast communications industry (users of both private and public
communication sites) and the two agencies to review recommendations on
acceptable criteria for determining fair market values and next best
alternative use.
(2) The advisory group shall review the methodology used in any
previous studies and reach concurrence on such methodology.
(3) The advisory group shall also assess the validity of the
results of such studies, taking into account all reasonable options for
the establishment of fair market values and next best alternative use.
(4) The advisory group shall report its findings to the Committee
on Energy and Natural Resources of the United States Senate and the
Committee on Natural Resources of the United States House of
Representatives within one year after the enactment of this Act.
Subtitle B--Hardrock Mining Claim Maintenance Fee
SEC. 5101. FEE.
(a) Except as provided in section 2511(e)(2) of the Energy Policy
Act of 1992, for each unpatented mining claim, mill or tunnel site on
federally owned lands, whether located before or after enactment of
this Act, each claimant shall pay to the Secretary of the Interior, on
or before August 31 of each year, for years 1994 through 1998, a claim
maintenance fee of $100 per claim to hold such unpatented mining claim,
mill or tunnel site for the assessment year beginning at noon on the
next day, September 1. Such claim maintenance fee shall be in lieu of
the assessment work requirement contained in the Mining Law of 1872 (30
U.S.C. 28-28e) and the related filing requirements contained in section
314(a) and (c) of the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1744(a) and (c)).
(b)(1) The claim maintenance fee required under this section shall
be waived for a claimant who certifies in writing to the Secretary that
on the date the payment was due, the claimant and all related parties--
(A) held not more than 10 mining claims, mill sites, or
tunnel sites, or any combination thereof, on public lands; and
(B) have performed assessment work required under the
Mining Law of 1872 (30 U.S.C. 28-28e) to maintain the mining
claims held by the claimant and such related parties for the
assessment year ending on noon of September 1 of the calendar
year in which payment of the claim maintenance fee was due.
(2) For purposes of paragraph (1), with respect to any claimant,
the term ``all related parties'' means--
(A) the spouse and dependent children (as defined in
section 152 of the Internal Revenue Code of 1986), of the
claimant; or
(B) a person affiliated with the claimant, including--
(i) a person controlled by, controlling, or under
common control with the claimant; or
(ii) a subsidiary or parent company or corporation
of the claimant.
(c)(1) The Secretary shall adjust the fees required by this section
to reflect changes in the Consumer Price Index published by the Bureau
of Labor Statistics of the Department of Labor every 5 years after the
date of enactment of this Act, or more frequently if the Secretary
determines an adjustment to be reasonable.
(2) The Secretary shall provide claimants notice of any adjustment
made under this subsection not later than July 1 of any year in which
the adjustment is made.
(3) A fee adjustment under this section shall begin to apply the
calendar year following the calendar year in which it is made.
(d) Monies received under this section shall be deposited as
miscellaneous receipts in the Treasury.
SEC. 5102. LOCATION.
(a) Notwithstanding any provision of law, for every unpatented
mining claim, mill or tunnel site located after the date of enactment
of this subtitle and before September 30, 1998, the locator shall, at
the time the location notice is recorded with the Bureau of Land
Management, pay to the Secretary of the Interior a location fee, in
addition to the fee required by section 5101, of $25.00 per claim.
(b) Moneys received under this section shall be deposited as
miscellaneous receipts in the Treasury.
SEC. 5103. CO-OWNERSHIP.
The co-ownership provisions of the Mining Law of 1872 (30 U.S.C.
28-28e) will remain in effect except that the annual claim maintenance
fee, where applicable, shall replace applicable assessment requirements
and expenditures.
SEC. 5104. FAILURE TO PAY.
Failure to pay the claim maintenance fee as required by section
5101 of this subtitle shall conclusively constitute a forfeiture of the
unpatented mining claim, mill or tunnel site by the claimant and the
claim shall be deemed null and void by operation of law.
SEC. 5105. OTHER REQUIREMENTS.
(a) Nothing in this subtitle shall change or modify the
requirements of section 314(b) of the Federal Land Policy and
Management Act of 1976 (43 U.S.C. 1744(b)), or the requirements of
section 314(c) of the Federal Land Policy and Management Act of 1976
(43 U.S.C. 1744(c)) related to filings required by section 314(b),
which remain in effect.
(b) The third sentence of 2324 of the Revised Statutes (30 U.S.C.
28) is amended by inserting after ``On each claim located after the
10th day of May, 1972,'' the following: ``that is eligible for a waiver
under section 5101 of the Omnibus Budget Reconciliation Act of 1993,''.
SEC. 5106. REGULATIONS.
The Secretary of the Interior shall promulgate rules and
regulations to carry out the purposes of this subtitle as soon as
practicable after the date of enactment of this subtitle.
Subtitle C--Commonwealth of Northern Mariana Islands Agreement
SEC. 5201. COMMONWEALTH OF NORTHERN MARIANA ISLANDS AGREEMENT.
Public Law 94-241 (90 Stat. 263), as amended, is further amended by
striking ``law'' in subsection 4(b) and inserting in lieu thereof the
following: ``law: Provided, That for fiscal years 1994 through 1998,
payments shall be limited to the amounts and for the purposes set forth
in the Agreement of the Special Representatives on Future Federal
Financial Assistance of the Northern Mariana Islands, executed on
December 17, 1992 between the special representative of the President
and the special representatives of the Governor of the Northern Mariana
Islands: Provided further, That after 1998, the amount shall continue
at the annual amount of $27.720 million.
Subtitle D--Mineral Receipts
SEC. 5301. AMENDMENT TO THE MINERAL LEASING ACT.
Section 35 of the Mineral Leasing Act, as amended (30 U.S.C. 191)
is amended as follows:
(1) by deleting the last sentence and redesignating the
remaining language as subsection (a);
(2) by amending subsection (a) by inserting the words
``and, subject to the provisions of subsection (b),'' between
the words ``United States;'' and ``50 per centum'';
(3) by adding a new subsection (b) as follows:
``(b)(1) In calculating the amount to be paid to States during any
fiscal year under this section or under any other provision of law
requiring payment to a State of any revenues derived from the leasing
of any onshore lands or interest in land owned by the United States for
the production of the same types of minerals leasable under this Act or
of geothermal steam, 50 per centum of the portion of the enacted
appropriation of the Department of the Interior and any other agency
during the preceding fiscal year allocable to the administration of all
laws providing for the leasing of any onshore lands or interest in land
owned by the United States for the production of the same types of
minerals leasable under this Act or of geothermal steam, and in
enforcing such laws, shall be deducted from the receipts derived under
those laws in approximately equal amounts each month (subject to
paragraph (4)) prior to the division and distribution of such receipts
between the States and the United States.
``(2) The proportion of the deduction provided in paragraph (1)
allocable to each State shall be determined by dividing the monies
disbursed to the State during the preceding fiscal year derived from
onshore mineral leasing referred to in paragraph (1) in that State by
the total money disbursed to States during the preceding fiscal year
from such onshore mineral leasing in all States.
``(3) In the event the deduction apportioned to any State under
this subsection exceeds 50 per centum of the Secretary of the
Interior's estimate of the amounts attributable to onshore mineral
leasing referred to in paragraph (1) within that State during the
preceding fiscal year, the deduction from receipts received from leases
in that State shall be limited to such estimated amounts and the total
amount to be deducted from such onshore mineral leasing receipts shall
be reduced accordingly.
``(4) If the amount otherwise deductible under this subsection in
any month from the portion of receipts to be distributed to a State
exceeds the amount payable to the State during that month, any amount
exceeding the amount payable shall be carried forward and deducted
amounts payable to the State in subsequent months. If any amount
remains to be carried forward at the end of the fiscal year, such
amount shall not be deducted from any disbursements in any subsequent
fiscal year.
``(5) All deductions to be made pursuant to this subsection shall
be made in full during the fiscal year in which such deductions were
incurred.
``(6) All amounts deducted under this subsection from monies
otherwise payable to a State shall be credited to miscellaneous
receipts in the Treasury.''.
SEC. 5302. CONFORMING AMENDMENTS.
(a) Section 6 of the Mineral Leasing Act for Acquired Lands, as
amended (30 U.S.C. 355), is amended by adding the following words
``Subject to the provisions of 30 U.S.C. 191(b),'' at the beginning of
the first sentence.
(b) Section 5(a) of the Geothermal Steam Act, as amended (30 U.S.C.
1019), is amended by adding the words ``Subject to the provisions of 30
U.S.C. 191(b),'' at the beginning of that section.
TITLE VI--COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
SEC. 6001. NUCLEAR REGULATORY COMMISSION ANNUAL CHARGES.
Section 6101(a)(3) of the Omnibus Budget Reconciliation Act of 1990
(42 U.S.C. 2214(a)(3)) is amended by striking ``September 30, 1995''
and inserting ``September 30, 1998''.
SEC. 6002. CORPS OF ENGINEERS RECREATION USER FEES.
(a) In General.--Section 210 of the Flood Control Act of 1968 (16
U.S.C. 460d-3) is amended--
(1) by inserting ``(a)'' before ``No entrance'';
(2) by striking the second sentence; and
(3) by adding at the end the following new subsection:
``(b)(1) Except as provided in paragraph (2), notwithstanding
section 4(b) of the Land and Water Conservation Fund Act of 1965 (16
U.S.C. 460l-6a(b)), the Secretary of the Army may charge fees for the
use of developed recreation sites and facilities, including campsites,
swimming beaches, and boat launching ramps.
``(2) The Secretary may not charge fees for the use or provision of
drinking water, wayside exhibits, general purpose roads, overlook
sites, toilet facilities, or general visitor information.
``(3) Fees collected under this subsection shall be deposited into
the special account established in the Treasury of the United States
for the Army Corps of Engineers under section 4(i) of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(i)).''.
(b) Conforming Amendment.--Section 4(b) of the Land and Water
Conservation Fund Act of 1965 (16 U.S.C. 460l-6a(b)) is amended by
striking the second sentence.
TITLE VII--FINANCE COMMITTEE RECONCILIATION PROVISIONS RELATING TO
MEDICARE, MEDICAID, AND OTHER PROGRAMS
SEC. 7000. AMENDMENTS TO SOCIAL SECURITY ACT; REFERENCES; TABLE OF
CONTENTS.
(a) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this title an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(b) References to OBRA.--In this title, the terms ``OBRA-1986'',
``OBRA-1987'', ``OBRA-1989'', and ``OBRA-1990'' refer to the Omnibus
Budget Reconciliation Act of 1986 (Public Law 99-509), the Omnibus
Budget Reconciliation Act of 1987 (Public Law 100-203), the Omnibus
Budget Reconciliation Act of 1989 (Public Law 101-239), and the Omnibus
Budget Reconciliation Act of 1990 (Public Law 101-508), respectively.
(c) References to Omnibus Budget Reconciliation Act of 1993.--Any
reference in this title (or in any amendment made by this title) to the
Omnibus Budget Reconciliation Act of 1993 shall be deemed to be a
reference to this title.
(d) Table of Contents.--The table of contents of this title is as
follows:
Sec. 7000. Amendments to Social Security Act; references; table of
contents.
Subtitle A--Medicare
Part I--Provisions Relating to Part A
Sec. 7101. Payment updates for inpatient hospital services.
Sec. 7102. Loss of regional referral center status.
Sec. 7103. Medicare-dependent, small rural hospital payment extension.
Sec. 7104. Elimination of return on equity for proprietary skilled
nursing facilities.
Sec. 7105. Skilled nursing facility cost limits.
Part II--Provisions Relating to Part B
subpart a--physicians' services
Sec. 7201. Reduction in default update for conversion factor for 1994.
Sec. 7202. Reduction in performance standard rate of increase and
increase in maximum reduction permitted in
default update and classification of
primary care services as a separate
category of services.
Sec. 7203. Phased-in reduction in practice expense relative value units
for certain services.
Sec. 7204. Limitation on payment for the anesthesia care team.
Sec. 7205. Separate payment for interpretation of electrocardiograms.
Sec. 7206. Payments for new physicians and practitioners.
Sec.subpart b--outpatient hospital services and ambulatory surgical
services
Sec. 7221. Extension of 10 percent reduction in payments for capital-
related costs of outpatient hospital
services.
Sec. 7222. Extension of reduction in payments for other costs of
outpatient hospital services.
Sec. 7223. Reductisubpart c--durable medical equipments.
Sec. 7231. Revisions to payment rules for durable medical equipment.
Sec. 7232. Treatment of nebulizers and aspirators.
Sec. 7233. Payment for surgical dressings.
Sec. 7234. Payments forsubpart d--part b premium
Sec. 7251. Part B premsubpart e--other provisions
Sec. 7261. Payments for clinical diagnostic laboratory tests.
Part III--Provisions Relating to Parts A and B
Sec. 7301. Payments for direct graduate medical education costs.
Sec. 7302. Revision of home health agency cost limits.
Sec. 7303. Medicare as secondary payer.
Sec. 7304. Extension of self-referral ban to additional specified
services.
Sec. 7305. Reduction in payment for erythropoietin.
Subtitle B--Medicaid Program
Part I--Program Savings Provisions
subpart a--repeal of mandate
Sec. 7401. Personal care services furnished outside the home as
subpart b--outpatient prescription drugs
Sec. 7411. Permitting prescription drug formularies under State plans.
Sec. 7412. Elimination of special exemption from prior authorization
for new drugs.
Sesubpart c--restrictions on divestiture of assets and estate recovery
Sec. 7421. Medicaid estate recoveries.
Sec. 7422. Transfers of assets.
subpart d--improvement in identification and collection of third party
payments
Sec. 7431. Liability of third parties to pay for care and services.
Sec. 7432. Medical child support.
Sec. 7433. Offset of payment obligations relating to medical assistance
against overpayments of State and Federal
subpart e--assuring proper payments to disproportionate share hospitals
Sec. 7441. Assuring proper payments to disproportionate share
subpart f--anti-fraud and abuse provisions
Sec. 7451. Application of medicare rules limiting certain physician
referrals.
Part II--Other Medicaid Provisions
Sec. 7501. Extension of demonstration project on the effect of allowing
States to extend medicaid coverage to
certain low-income families.
Subtitle C--Income Security Programs
Sec. 7601. Matching of State administrative costs.
Sec. 7602. State paternity establishment programs.
Sec. 7603. Fees for Federal administration of State supplementary
payments.
Subtitle D--Miscellaneous Provisions
Part I--Trade Provisions
Sec. 7701. Extension of authority to levy customs user fees.
Sec. 7702. Extension of, and authorization of appropriations for, trade
adjustment assistance program.
Part II--Improved Access to Childhood Immunizations
Sec. 7801. Reimbursement to vaccine manufacturers.
Sec. 7802. State option to provide that certain payments under AFDC are
conditioned on receipt of immunizations.
Part III--Disclosure Provisions
Sec. 7901. Disclosure of return information for administration of
certain veterans programs.
Sec. 7902. Disclosure of return information to carry out income
contingent repayment of student loans.
Sec. 7903. Use of return information for income verification under
certain housing assistance programs.
Sec. 7904. Use of return information for health coverage clearinghouse.
Part IV--Other Provisions
Sec. 7950. Disallowance of interest on certain overpayments of tax.
Sec. 7951. Fees for applications for alcohol labeling and formula
reviews.
Sec. 7952. Use of Harbor Maintenance Trust Fund amounts for
administrative expenses.
Sec. 7953. Increase in presidential election campaign fund check-off.
Sec. 7954. Increase in public debt limit.
Subtitle A--Medicare
PART I--PROVISIONS RELATING TO PART A
SEC. 7101. PAYMENT UPDATES FOR INPATIENT HOSPITAL SERVICES.
(a) Reduction.--
(1) PPS hospitals.--
(A) In general.--Section 1886(b)(3)(B)(i) (42
U.S.C. 1395ww(b)(3)(B)(i)) is amended--
(i) in the matter preceding subclause (I),
by striking ``fiscal year'' and inserting
``particular time period'',
(ii) in subclause (VIII), by inserting
``and the 3 succeeding months'' after ``fiscal
year 1993'',
(iii) in subclause (IX)--
(I) by striking ``fiscal year'',
(II) by inserting ``minus 2.18
percentage points'' after ``market
basket percentage increase'' the first
place it appears, and
(III) by striking ``plus 1.5
percentage points'' and inserting
``minus .68 percentage point'',
(iv) in subclause (X)--
(I) by striking ``fiscal year'',
(II) by inserting ``minus 2.27
percentage points'' after ``market
basket percentage increase'', and
(III) by striking ``and'' at the
end,
(v) in subclause (XI)--
(I) by striking ``for fiscal year
1996 and each subsequent fiscal year''
and inserting ``for 1996'',
(II) by inserting ``minus 2.0
percentage points'' after ``market
basket percentage increase'', and
(III) by striking the period and
inserting a comma, and
(vi) by adding at the end the following new
subclauses:
``(XII) for 1997, the market basket percentage increase
minus 1.0 percentage point for hospitals in all areas, and
``(XIII) for 1998 and each subsequent year, the market
basket percentage increase for hospitals in all areas.''.
(B) Adjustment of labor and non-labor portions of
standardized amounts.--Section 1886(d)(3)(A) (42 U.S.C.
1395ww(d)(3)(A)) is amended by adding at the end the
following new clause:
``(vi) For discharges occurring on or after January
1, 1995, the Secretary shall adjust the ratio of the
labor portion to non-labor portion of each average
standardized amount to equal such ratio for the
national average standardized amount.''.
(2) Other hospitals.--Section 1886(b)(3)(B)(ii) (42 U.S.C.
1395ww(b)(3)(B)(ii)) is amended--
(A) by striking ``, (C), (D),''
(B) by striking ``and'' at the end of subclause
(III),
(C) by striking subclause (IV) and inserting the
following new subclauses:
``(IV) fiscal years 1988 through 1993 and the 3 succeeding
months, is the market basket percentage increase,
``(V) 1994, is 75 percent of the difference between the
market basket percentage increase and 1.0 percentage point,
``(VI) 1995 through 1997, is the market basket percentage
increase minus 1.0 percentage points, and
``(VII) 1998 and each subsequent year, is the market basket
percentage increase.''.
(3) Sole community and medicare-dependent, small rural
hospitals.--
(A) In general.--Section 1886(b)(3)(B) (42 U.S.C.
1395ww(b)(3)(B)) is amended by adding at the end the
following new clause:
``(iv) For purposes of subparagraphs (C) and (D), the applicable
percentage increase for discharges occurring during--
``(I) cost reporting periods beginning in fiscal year 1986
through fiscal year 1993 and the 3 succeeding months, is the
increase specified in clause (ii),
``(II) for 1994, is 75 percent of the difference between
the market basket percentage increase and 2.0 percentage
points,
``(III) for 1995, is the market basket percentage increase,
minus 2.0 percentage points, and
``(IV) for 1996 and each subsequent year, is the increase
described in clause (i) for such year.
For purposes of subclause (I), the annual update applied for a cost
reporting period beginning during calendar year 1993 is adjusted to
reflect only the time period occurring from the beginning of the
hospital's cost reporting period through December 31, 1993.''.
(B) Target amount adjustment.--
(i) Sole community hospital.--Section
1886(b)(3)(C) (42 U.S.C. 1395ww(b)(3)(C)) is
amended--
(I) in clause (i)(II), by striking
``or'',
(II) in clause (ii)--
(aa) by inserting ``or
portion of a cost reporting
period occurring before
December 31, 1993,'' before
``the target amount'',
(bb) by striking
``subparagraph (B)(ii)'' and
inserting ``subparagraph
(B)(iv)'', and
(cc) by striking the period
at the end and inserting a
comma, and
(dd) by adding at the end
the following new clauses:
``(iii) with respect to discharges occurring in 1994, the
target amount for the cost reporting period beginning in 1993
increased by the applicable percentage increase under
subparagraph (B)(iv), or
``(iv) with respect to discharges occurring in 1995 and
each subsequent year, the target amount for the preceding year
increased by the applicable percentage increase under
subparagraph (B)(iv).''.
(ii) Medicare-dependent, small rural
hospital.--Section 1886(b)(3)(D) (42 U.S.C.
1395ww(b)(3)(D)) is amended--
(I) in clause (i)(II), by striking
``or'',
(II) in clause (ii)--
(aa) by inserting ``or
portion of a cost reporting
period occurring before
December 31, 1993,'' before
``the target amount'',
(bb) by striking
``subparagraph (B)(ii)'' and
inserting ``subparagraph
(B)(iv)'', and
(cc) by striking the period
at the end and inserting ``,
or'' and
(dd) by adding at the end
the following new clause:
``(iii) with respect to discharges occurring in 1994, the
target amount for the cost reporting period beginning in 1993
increased by the applicable percentage increase under
subparagraph (B)(iv).''.
(4) Delay in increase in disproportionate share payments
for certain urban hospitals.--Section 1886(d)(5)(F)(vii)(II)
(42 U.S.C. 1395ww(d)(5)(F)(vii)(II)) is amended--
(A) in subdivision (b), by striking ``September 30,
1993'' and inserting ``December 31, 1993'', and
(B) in subdivision (c), by striking ``October 1,
1993'' and inserting ``January 1, 1994''.
(5) Regional floor extended.--Section 1886(d)(1)(A) (42
U.S.C. 1395ww(d)(1)(A)) is amended--
(i) in clause (ii), by striking ``or'' at
the end;
(ii) in clause (iii), by striking
``September 30, 1993, '' and inserting
``December 31, 1993''; and
(iii) by adding at the end the following
new clause:
``(iv) beginning on and after January 1, 1994, is equal to
the national adjusted DRG prospective payment rate determined
under paragraph (3) for such discharges.''.
(b) Conforming Amendments.--
(1) Section 1886(b)(3)(B)(iii) (42 U.S.C.
1395ww(b)(3)(B)(iii)) is amended--
(A) by inserting ``beginning in'' after ``cost
reporting periods'',
(B) by striking ``fiscal year'' the first place it
appears and inserting ``particular time period'',
(C) by striking ``or fiscal year'' the first and
second place it appears, and
(D) by striking ``cost reporting period or fiscal
year'' and inserting ``period''.
(2) The first sentence in the matter in section 1886(d)(3)
(42 U.S.C. 1395ww(d)(3)) preceding subparagraph (A) is amended
by inserting ``or calendar'' after ``fiscal'' the first place
it appears.
(3) Section 1886(d)(3)(A)(ii) (42 U.S.C.
1395ww(d)(3)(A)(ii)) is amended--
(A) by striking ``1994,'' and inserting ``1992, in
the 15-month period beginning on October 1, 1992, and
in 1994,'', and
(B) by striking ``fiscal year'' the second and
third place it appears and inserting ``time period''.
(4) Section 1886(d)(3)(A)(iii) (42 U.S.C.
1395ww(d)(3)(A)(iii)) is amended by striking ``the fiscal year
beginning on October 1, 1994'' and inserting ``1995''.
(5) Section 1886(d)(3)(A)(iv) (42 U.S.C.
1395ww(d)(3)(A)(iv)) is amended--
(A) by striking ``fiscal year beginning on or after
October 1, 1995'' and inserting ``year beginning on or
after January 1, 1996'',
(B) by striking ``and within each region'', and
(C) by striking ``fiscal'' each place it appears.
(6) Section 1886(d)(3)(D) (42 U.S.C. 1395ww(d)(3)(D)) is
amended--
(A) by inserting ``or calendar'' after ``fiscal''
each place it appears, and
(B) by inserting ``for each fiscal year through
1993'' after ``and shall establish''.
(7) Section 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)) is
amended--
(A) in the second sentence, by striking ``October
1, 1993'' and inserting ``January 1, 1994'', and
(B) in the last sentence, by inserting ``or
calendar'' after ``fiscal'' the first and last place it
appears.
(8)(A) Section 1886(d)(4)(C)(iii) (42 U.S.C.
1395ww(d)(4)(C)(iii)) is amended--
(i) by inserting ``or calendar'' after ``fiscal''
the first place it appears, and
(ii) by deleting ``fiscal'' the third place it
appears.
(B) The requirements of paragraphs (3)(E) and (4)(C)(iii)
of section 1886(d) of the Social Security Act (42 U.S.C.
1395ww(d)(4)(C)(iii)) shall be applied on a 15-month basis for
the period beginning on October 1, 1992, and ending on December
31, 1993.
(9) Section 1886(d)(4)(E) is (42 U.S.C. 1395ww(d)(4)(E)) is
amended by striking ``October 1, 1993'' and inserting ``January
1, 1994''.
(10)(A) Section 1886(d)(5)(A)(iv) (42 U.S.C.
1395ww(d)(5)(A)(iv)) is amended by inserting ``or calendar''
after ``fiscal''.
(B) The requirement of section 1886(d)(5)(A)(iv) of the
Social Security Act (42 U.S.C. 1395ww(d)(5)(A)(iv)) shall be
applied on a 15-month basis for the period beginning on October
1, 1992, and ending on December 31, 1993.
(11) Section 1886(d)(5)(B)(i) (42 U.S.C.
1395ww(d)(5)(B)(i)) is amended by striking ``or, if applicable,
the amount determined under paragraph (1)(A)(iii)'' and
inserting ``or, the amount determined under paragraphs
(1)(A)(iii) or (1)(A)(iv), as applicable''.
(12) Section 1886(d)(5)(E)(ii) (42 U.S.C.
1395ww(d)(5)(E)(ii)) is amended by inserting ``or calendar''
after ``fiscal''.
(13) Section 1886(d)(6) (42 U.S.C. 1395ww(d)(5)(6)) is
amended by striking ``the September 1 before each fiscal year
(beginning with fiscal year 1984)'' and inserting ``December 1
each year''.
(14) The matter in section 1886(d)(9)(A) (42 U.S.C.
1395ww(d)(9)(A)) preceding clause (i) is amended by striking
``fiscal year'' and inserting ``particular time period''.
(15) Section 1886(d)(9)(C)(i) (42 U.S.C.
1395ww(d)(9)(C)(i)) is amended--
(A) by striking ``fiscal year'' the first place it
appears and inserting ``time period'', and
(B) by striking ``fiscal years'' and inserting
``time periods''.
(16) Subparagraphs (A) and (B) of section 1886(e)(3) (42
U.S.C. 1395ww(e)(3)) are each amended by striking ``that fiscal
year'' and inserting ``the coming fiscal or calendar year''.
(17) The first sentence of section 1886(e)(4)(A) (42 U.S.C.
1395ww(e)(4)(A)) is amended by inserting ``or calendar'' after
``fiscal'' the first and last place it appears.
(18) Section 1886(e)(4)(B) (42 U.S.C. 1395ww(e)(4)(B)) is
amended by inserting ``or calendar'' after ``fiscal''.
(19) Section 1886(e)(5)(A) (42 U.S.C. 1395ww(e)(5)(A)) is
amended by striking ``that fiscal year'' and inserting ``the
coming fiscal or calendar year''.
(20) The second and third sentences of section 1886(e)(5)
(42 U.S.C. 1395ww(e)(5)) are each amended by inserting ``or
calendar'' after ``fiscal'' each place it appears.
SEC. 7102. LOSS OF REGIONAL REFERRAL CENTER STATUS.
(a) Continuation of Other Urban Payment Rate Through Calendar Year
1994.--Effective on the date of the enactment of this Act, any hospital
that was classified as a regional referral center under section
1886(d)(5)(C) of the Social Security Act as of September 30, 1992,
shall continue to be paid under this subsection the standardized amount
for hospitals located in other urban areas for discharges occurring
before the earlier of--
(1) January 1, 1995, or
(2) the reclassification of such hospital as an urban
hospital under section 1886(d)(10)(C) of such Act.
(b) Permitting Hospitals To Decline Reclassification.--If any
hospital fails to qualify as a rural referral center under section
1886(d)(5)(C) of the Social Security Act as a result of a decision by
the Medicare Geographic Classification Review Board under section
1886(d)(10) of such Act to reclassify the hospital as being located in
an urban area for fiscal year 1993 or fiscal year 1994, the Secretary
of Health and Human Services shall--
(1) notify such hospital of such failure to qualify,
(2) provide an opportunity for such hospital to decline
such reclassification, and
(3) if the hospital declines such reclassification,
administer the Social Security Act (other than section
1886(d)(8)(D)) for such fiscal year as if the decision by the
Review Board had not occurred.
(c) Requiring Lump-Sum Retroactive Payment for Hospitals Losing
Classification.--
(1) In general.--In the case of any regional referral
center described in subsection (a), the Secretary of Health and
Human Services shall make a lump-sum payment to the center
equal to the difference between--
(A) the aggregate payment made to the center under
section 1886 of the Social Security Act (excluding
outlier payments under subsection (d)(5)(A) of such
section) during the period of applicability described
in paragraph (2), and
(B) the aggregate payment that would have been made
to the center under such section if, during the period
of applicability, the center had been paid as if
subsection (a) of this section had been in effect.
(2) Period of applicability.--In paragraph (1), the
``period of applicability'' is the period that begins on
October 1, 1992, and ends on the date of the enactment of this
Act.
SEC. 7103. MEDICARE-DEPENDENT, SMALL RURAL HOSPITAL PAYMENT EXTENSION.
(a) Extension of Additional Payments.--
(1) In general.--Section 1886(d)(5)(G) (42 U.S.C.
1395ww(d)(5)(G)) is amended--
(A) in clause (i)--
(i) by inserting ``(or portion thereof)''
after ``cost reporting period'' in the matter
preceding subclause (I), and
(ii) by striking ``March 31, 1993,'' and
all that follows and inserting: ``January 1,
1995, in the case of a subsection (d) hospital
which is a medicare-dependent, small rural
hospital, payment under paragraph (1)(A) shall
be equal to the sum of the amount determined
under clause (ii) and the amount determined
under clause (iii) or (iv) of paragraph
(1)(A).'';
(B) by redesignating clauses (ii) and (iii) as
clauses (iii) and (iv); and
(C) by inserting after clause (i) the following new
clause:
``(ii) The amount determined under this clause is--
``(I) for discharges occurring during the first 3 12-month
cost reporting periods that begin on or after April 1, 1990,
the amount by which the hospital's target amount for the cost
reporting period (as defined in subsection (b)(3)(D)) exceeds
the amount determined under clause (iii) or (iv) paragraph
(1)(A); and
``(II) for discharges occurring during any subsequent cost
reporting period (or portion thereof), 50 percent of the amount
by which the hospital's target amount for the cost reporting
period (as defined in subsection (b)(3)(D)) exceeds the amount
determined under clause (iii) or (iv) of paragraph (1)(A).''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective as if included in the amendment made by
section 6003(f) of OBRA-1989.
(b) Permitting Hospitals To Decline Reclassification.--If any
hospital fails to qualify as a medicare-dependent, small rural hospital
under section 1886(d)(5)(G)(i) of the Social Security Act as a result
of a decision by the Medicare Geographic Classification Review Board
under section 1886(d)(10) of such Act to reclassify the hospital as
being located in an urban area for fiscal year 1993 or fiscal year 1994
the Secretary of Health and Human Services shall--
(1) notify such hospital of such failure to qualify,
(2) provide an opportunity for such hospital to decline
such reclassification, and
(3) if the hospital declines such reclassification,
administer the Social Security Act (other than section
1886(d)(8)(D)) for such fiscal year as if the decision by the
Review Board had not occurred.
(c) Requiring Lump-Sum Retroactive Payment.--
(1) In general.--In the case of a hospital treated as a
medicare-dependent, small rural hospital under section
1886(d)(5)(G) of the Social Security Act, the Secretary of
Health and Human Services shall make a lump-sum payment to the
hospital equal to the difference between--
(A) the aggregate payment made to the hospital
under section 1886 of such Act (excluding outlier
payments under subsection (d)(5)(A) of such section)
during the period of applicability described in
paragraph (2), and
(B) the aggregate payment that would have been made
to the hospital under such section if, during the
period of applicability, section 1886(d)(5)(G) of such
Act had been applied as if--
(i) the reference in clause (i) to ``March
31, 1993,'' had been deemed a reference to
``January 1, 1995,''; and
(ii) the amendments made by subsection (a)
had been in effect.
(2) Period of applicability.--In paragraph (1), the
``period of applicability'' is, with respect to a hospital, the
period that begins on the first day of the hospital's first 12-
month cost reporting period that begins after April 1, 1992,
and ends on the date of the enactment of this Act.
SEC. 7104. ELIMINATION OF RETURN ON EQUITY FOR PROPRIETARY SKILLED
NURSING FACILITIES.
(a) Repeal of Requirement for Return on Equity.--(1) Section
1861(v)(1)(B) (42 U.S.C. 1395x(v)(1)(B)) is amended to read as follows:
``(B) In the case of extended care services, the regulations under
subparagraph (A) shall not include provision for specific recognition
of a return on equity capital.''.
(2) Section 1878(f)(2) (42 U.S.C. 1395oo(f)(2)) is amended by
striking ``the rate of return on equity capital established by
regulation pursuant to section 1861(v)(1)(B) and in effect at the
time'' and inserting ``the average of the rates of interest on
obligations issued for purchase by the Federal Hospital Insurance Trust
Fund for each of the months any part of which is included in the cost
reporting period in which''.
(3) Section 1881(b)(2)(C) (42 U.S.C. 1395rr(b)(2)(C)) is amended by
striking all that follows ``capital'' up to the period.
(b) Effective Date.--The amendments made by subsection (a) apply to
portions of cost reporting periods occurring on or after October 1,
1993.
SEC. 7105. SKILLED NURSING FACILITY COST LIMITS.
(a) Skilled Nursing Facility Cost Limits.--
(1) In general.--Section 1888(a) (42 U.S.C. 1395yy(a)) is
amended by striking ``112 percent of the mean'' and inserting
``110 percent of the median'' each place it appears.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to cost reporting periods beginning on or after
October 1, 1993.
(b) Skilled Nursing Facility Wage Index.--Not later than 1 year
after the date of the enactment of this Act, the Secretary of Health
and Human Services shall begin to collect data on employee compensation
and paid hours of employment in skilled nursing facilities for the
purpose of constructing a skilled nursing facility wage index
adjustment to the routine service cost limits required under section
1888(a) of the Social Security Act.
(c) ProPAC Report.--The Prospective Payment Assessment Commission
shall, by March 31, 1994, study and report to the Congress on the
impact of applying the routine per diem cost limits for skilled nursing
facilities on a regional basis.
PART II--PROVISIONS RELATING TO PART B
Subpart A--Physicians' Services
SEC. 7201. REDUCTION IN DEFAULT UPDATE FOR CONVERSION FACTOR FOR 1994.
Section 1848(d)(3)(A) (42 U.S.C. 1395w-4(d)(3)(A)) is amended--
(1) in clause (i), by striking ``clause (iii)'' and
inserting ``clauses (iii) and (iv)'', and
(2) by adding at the end the following new clause:
``(iv) Adjustment in percentage increase
for 1994.--In applying clause (i) for services
(other than primary care services) furnished in
1994, the percentage increase in the
appropriate update index shall be reduced by--
``(I) 8 percentage points for
surgical services (as defined for
purposes of subsection (j)(1)), and
``(II) 4.4 percentage points for
other services.''.
SEC. 7202. REDUCTION IN PERFORMANCE STANDARD RATE OF INCREASE AND
INCREASE IN MAXIMUM REDUCTION PERMITTED IN DEFAULT UPDATE
AND CLASSIFICATION OF PRIMARY CARE SERVICES AS A SEPARATE
CATEGORY OF SERVICES.
(a) Reduction in Performance Standard Factor.--Section
1848(f)(2)(B) (42 U.S.C. 1395w-4(f)(2)(B)) is amended to read as
follows:
``(B) Performance standard factor.--For purposes of
subparagraph (A)--
``(i) In general.--Except as provided in
clause (ii), the performance standard factor--
``(I) for 1993 is 2 percentage
points,
``(II) for 1994 is 3\1/2\
percentage points, and
``(III) for each succeeding year is
4 percentage points.
``(ii) Primary care services.--The
performance standard factor for primary care
services (as defined in section 1842(i)(4)) is
0 percentage points.''.
(b) Increase in Maximum Reduction Permitted in Default Update.--
Section 1848(d)(3)(B)(ii) (42 U.S.C. 1395w-4(d)(3)(B)(ii)) is amended--
(1) in subclause (II), by striking ``or 1995'', and
(2) in subclause (III), by striking ``3'' and inserting
``5''.
(c) Classification of Primary Care Services as Separate Category of
Services.--
(1) In general.--Section 1848(j)(1) (42 U.S.C. 1395w-
4(j)(1)) is amended by inserting ``, primary care services (as
defined in section 1842(i)(4)),'' after ``Secretary)''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply--
(A) to volume performance standard rates of
increase established under section 1848(f) of the
Social Security Act for fiscal years beginning on or
after October 1, 1993, and
(B) to updates in the conversion factors for
physicians' services established under section 1848(d)
of such Act for physicians' services to be furnished in
calendar years beginning after 1995.
SEC. 7203. PHASED-IN REDUCTION IN PRACTICE EXPENSE RELATIVE VALUE UNITS
FOR CERTAIN SERVICES.
(a) In General.--Section 1848(c)(2) (42 U.S.C. 1395w-4(c)(2)) is
amended by adding at the end the following new subparagraph:
``(E) Reduction in practice expense relative value
units for certain services.--
``(i) In general.--Subject to clause (ii),
the Secretary shall reduce the practice expense
relative value units applied to services
described in clause (iii) furnished in--
``(I) 1994, by 25 percent of the
number by which the number of practice
expense relative value units
(determined for 1994 without regard to
this subparagraph) exceeds the number
of work relative value units determined
for 1994,
``(II) 1995, by an additional 25
percent of such excess, and
``(III) 1996, by an additional 25
percent of such excess.
``(ii) Floor on reductions.--The practice
expense relative value units for a physician's
service shall not be reduced under this
subparagraph to a number less than 110 percent
of the number of work relative value units.
``(iii) Services covered.--For purposes of
clause (i), the services described in this
clause are physicians' services that are not
described in clause (iv) and for which--
``(I) there are work relative value
units, and
``(II) the number of practice
expense relative value units
(determined for 1994) exceeds 110
percent of the number of work relative
value units (determined for such year).
``(iv) Excluded services.--For purposes of
clause (iii), the services described in this
clause are services which the Secretary
determines at least 75 percent of which are
provided under this title in an office
setting.''.
(b) Development of Resource-Based Methodology for Practice
Expenses.--
(1) The Secretary of Health and Human Services shall
develop a methodology for implementing in 1997 a resource-based
system for determining practice expense relative value units
for each physician's service.
(2) The Secretary shall transmit a report by June 30, 1996,
on the methodology developed under paragraph (1) to the
Committee on Ways and Means and the Committee on Energy and
Commerce of the House of Representatives and the Committee on
Finance of the Senate. The report shall include a presentation
of data utilized in developing the methodology and an
explanation of the methodology.
SEC. 7204. LIMITATION ON PAYMENT FOR THE ANESTHESIA CARE TEAM.
(a) Limit on Payment to a Physician for Medical Direction.--
(1) In general.--Section 1848(a) (42 U.S.C. 1395w-4(a)) is
amended by adding at the end the following new paragraph:
``(5) Special rule for medical direction.--
``(A) In general.--With respect to physicians'
services furnished on or after January 1, 1994, and
consisting of medical direction of 2, 3, or 4
concurrent anesthesia cases, the fee schedule amount to
be applied shall not exceed one-half of the amount
described in subparagraph (B).
``(B) Amount.--The amount described in this
subparagraph, for a physician's medical direction of
the performance of anesthesia services, is the
following percentage of the fee schedule amount
otherwise applicable under this section if the
anesthesia services were personally performed by the
physician alone:
``(i) For services furnished during 1994,
120 percent.
``(ii) For services furnished during 1995,
115 percent.
``(iii) For services furnished during 1996,
110 percent.
``(iv) For services furnished during 1997,
105 percent.
``(v) For services furnished after 1997,
100 percent.''.
(2) Elimination of reduction for medical direction of
multiple nurse anesthetists.--Section 1842(b) (42 U.S.C.
1395u(b)) is amended by striking paragraph (13).
(b) Payment to a Certified Registered Nurse Anesthetist for
Medically Directed Services.--Subparagraph (B) of section 1833(l)(4)
(42 U.S.C. 1395l(l)(4)) is amended--
(1) in clause (i), by inserting ``and before January 1,
1994,'' after ``1991,'';
(2) in clause (ii)--
(A) by adding ``and'' at the end of subclause (II),
(B) by striking the comma at the end of subclause
(III) and inserting a period, and
(C) by striking subclauses (IV) through (VII); and
(3) by adding at the end the following new clause:
``(iii) In the case of services of a certified registered nurse
anesthetist who is medically directed or medically supervised by a
physician which are furnished on or after January 1, 1994, the fee
schedule amount shall be 50 percent of the amount described in section
1848(a)(5)(B) with respect to the physician.''.
SEC. 7205. SEPARATE PAYMENT FOR INTERPRETATION OF ELECTROCARDIOGRAMS.
(a) In General.--Paragraph (3) of section 1848(b) (42 U.S.C. 1395w-
4(b)) is amended to read as follows:
``(3) Treatment of interpretation of electrocardiograms.--
The Secretary--
``(A) shall make separate payment under this
section for the interpretation of electrocardiograms
performed or ordered to be performed as part of or in
conjunction with a visit to or a consultation with a
physician, and
``(B) shall adjust the relative values established
for visits and consultations under subsection (c) so as
not to include relative value units for interpretations
of electrocardiograms in the relative value for visits
and consultations.''.
(b) Assuring Budget Neutrality.--Section 1848(c)(2) (42 U.S.C.
1395w-4(c)(2)), as amended by section 7203(a), is further amended by
adding at the end the following new subparagraph:
``(F) Budget neutrality adjustments.--The
Secretary--
``(i) shall reduce the relative values for
all services (other than anesthesia services)
established under this paragraph (and, in the
case of anesthesia services, the conversion
factor established by the Secretary for such
services) by such percentage as the Secretary
determines to be necessary so that, beginning
in 1996, the amendment made by section 7205(a)
of the Omnibus Budget Reconciliation Act of
1993 would not result in expenditures under
this section that exceed the amount of such
expenditures that would have been made if such
amendment had not been made, and
``(ii) shall reduce the amounts determined
under subsection (a)(2)(B)(ii)(I) by such
percentage as the Secretary determines to be
required to assure that, taking into account
the reductions made under clause (i), the
amendment made by section 7205(a) of the
Omnibus Budget Reconciliation Act of 1993 would
not result in expenditures under this section
in 1994 that exceed the amount of such
expenditures that would have been made if such
amendment had not been made.''.
(c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4) is
amended--
(1) in subsection (a)(2)(B)(ii)(I), by inserting ``and as
adjusted under subsection (c)(2)(F)(ii)'' after ``for 1994'';
(2) in subsection (c)(2)(A)(i), by adding at the end the
following: ``Such relative values are subject to adjustment
under subparagraph (F)(i).''; and
(3) in subsection (i)(1)(B), by adding at the end
``including adjustments under subsection (c)(2)(F),''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 1994.
SEC. 7206. PAYMENTS FOR NEW PHYSICIANS AND PRACTITIONERS.
(a) Equal Treatment of New Physicians and Practitioners.--(1)
Section 1848(a) (42 U.S.C. 1395w-4(a)), as amended by section 7204(a),
is further amended by striking paragraph (4) and by redesignating
paragraph (5) as paragraph (4).
(2) Section 1842(b)(4) (42 U.S.C. 1395u(b)(4)) is amended by
striking subparagraph (F).
(b) Budget Neutrality Adjustment.--Notwithstanding any other
provision of law, the Secretary of Health and Human Services shall
reduce the following values and amounts for 1994 (to be applied for
that year and subsequent years) by such uniform percentage as the
Secretary determines to be required to assure that the amendments made
by subsection (a) will not result in expenditures under part B of title
XVIII of the Social Security Act in 1994 that exceed the amount of such
expenditures that would have been made if such amendments had not been
made:
(1) The relative values established under section 1848(c)
of such Act for services (other than anesthesia services) and,
in the case of anesthesia services, the conversion factor
established under section 1848 of such Act for such services.
(2) The amounts determined under section
1848(a)(2)(B)(ii)(I) of such Act.
(3) The prevailing charges or fee schedule amounts to be
applied under such part for services of a health care
practitioner (as defined in section 1842(b)(4)(F)(ii)(I) of
such Act, as in effect before the date of the enactment of this
Act).
(c) Conforming Amendments.--Section 1848 (42 U.S.C. 1395w-4), as
amended by section 7205(c), is amended--
(1) in subsection (a)(2)(B)(ii)(I), by inserting ``and
under section 7206(b) of the Omnibus Budget Reconciliation Act
of 1993'' after ``subsection (c)(2)(F)(ii)'';
(2) in subsection (c)(2)(A)(i), by inserting ``and section
7206(b) of the Omnibus Budget Reconciliation Act of 1993''
after ``under subparagraph (F)(i)''; and
(3) in subsection (i)(1)(B), by inserting ``and section
7206(b) of the Omnibus Budget Reconciliation Act of 1993''
after ``under subsection (c)(2)(F)''.
(d) Effective Date.--The amendments made by subsection (a) shall
apply to services furnished on or after January 1, 1994.
SEC. 7207. EXTRA-BILLING LIMITS.
(a) Enforcement and Uniform Application.--
(1) Enforcement.--Paragraph (1) of section 1848(g) (42
U.S.C. 1395w-4(g)) is amended to read as follows:
``(1) Limitation on actual charges.--
``(A) In general.--In the case of a
nonparticipating physician or nonparticipating supplier
or other person (as defined in section 1842(i)(2)) who
does not accept payment on an assignment-related basis
for a physician's service furnished with respect to an
individual enrolled under this part, the following
rules apply:
``(i) Application of limiting charge.--No
person may bill or collect an actual charge for
the service in excess of the limiting charge
described in paragraph (2) for such service.
``(ii) No liability for excess charges.--No
person is liable for payment of any amounts
billed for the service in excess of such
limiting charge.
``(iii) Correction of excess charges.--If
such a physician, supplier, or other person
bills, but does not collect, an actual charge
for a service in violation of clause (i), the
physician, supplier, or other person shall
reduce on a timely basis the actual charge
billed for the service to an amount not to
exceed the limiting charge for the service.
``(iv) Refund of excess collections.--If
such a physician, supplier, or other person
collects an actual charge for a service in
violation of clause (i), the physician,
supplier, or other person shall provide on a
timely basis a refund to the individual charged
in the amount by which the amount collected
exceeded the limiting charge for the service.
The amount of such a refund shall be reduced to
the extent the individual has an outstanding
balance owed to the physician.
``(B) Sanctions.--If a physician, supplier, or
other person--
``(i) knowingly and willfully bills or
collects for services in violation of
subparagraph (A)(i) on a repeated basis, or
``(ii) fails to comply with clause (iii) or
(iv) of subparagraph (A) on a timely basis,
the Secretary may apply sanctions against the
physician, supplier, or other person in accordance with
paragraph (2) of section 1842(j). In applying this
subparagraph, paragraph (4) of such section applies in
the same manner as such paragraph applies to such
section and any reference in such section to a
physician is deemed also to include a reference to a
supplier or other person under this subparagraph.
``(C) Timely basis.--For purposes of this
paragraph, a reduction or refund under clauses (iii)
and (iv) of subparagraph (A) shall be treated as done
on a timely basis if the reduction or refund is made
not later than 30 days after the date the physician,
supplier, or other person is notified by the carrier
under this part of such violation and of the
requirements of subparagraph (A).''.
(2) Uniform application of extra-billing limits to
physicians' services.--
(A) In general.--Section 1848(g)(2)(C) (42 U.S.C.
1395w-4(g)(2)(C)) is amended by inserting ``or for
nonparticipating suppliers or other persons'' after
``nonparticipating physicians''.
(B) Conforming definition.--Section 1842(i)(2) (42
U.S.C. 1395u(i)(2)) is amended--
(i) by striking ``, and the term'' and
inserting ``; the term'', and
(ii) by inserting before the period at the
end the following: ``; and the term
`nonparticipating supplier or other person'
means a supplier or other person (excluding a
provider of services) that is not a
participating physician or supplier (as defined
in subsection (h)(1))''.
(3) Additional conforming amendments.--Section 1848 (42
U.S.C. 1395w-4) is amended--
(A) in subsection (a)(3)--
(i) by inserting ``and suppliers'' after
``physicians'' in the heading,
(ii) by inserting ``or a nonparticipating
supplier or other person'' after
``nonparticipating physician'', and
(iii) by adding at the end the following:
``In the case of physicians' services
(including services which the Secretary
excludes pursuant to subsection (j)(3)) of a
nonparticipating physician, supplier, or other
person for which payment is made under this
part on a basis other than the fee schedule
amount, the payment shall be based on 95
percent of the payment basis for such services
furnished by a participating physician,
supplier, or other person.'';
(B) in subsection (g)(1)(A), as amended by
subsection (a), in the matter before clause (i), by
inserting ``(including services which the Secretary
excludes pursuant to subsection (j)(3))'' after ``a
physician's service'';
(C) in subsection (g)(2)(D), by inserting ``(or, if
payment under this part is made on a basis other than
the fee schedule under this section, 95 percent of the
other payment basis)'' after ``subsection (a)'';
(D) in subsection (g)(3)(B)--
(i) by inserting after the first sentence
the following: ``No person is liable for
payment of any amounts billed for such a
service in violation of the preceding
sentence.'', and
(ii) in the last sentence, by striking
``previous sentence'' and inserting ``first
sentence'';
(E) in subsection (h)--
(i) by inserting ``or nonparticipating
supplier or other person furnishing physicians'
services (as defined in section 1848(j)(3))''
after ``physician'' the first place it appears,
(ii) by inserting ``, supplier, or other
person'' after ``physician'' the second place
it appears, and
(iii) by inserting ``, suppliers, and other
persons'' after ``physicians'' the second place
it appears; and
(F) in subsection (j)(3), by inserting ``, except
for purposes of subsections (a)(3), (g), and (h),''
after ``tests and''.
(b) Clarification of Mandatory Assignment Rules for Certain
Practitioners.--
(1) In general.--Section 1842(b) (42 U.S.C. 1395u(b)) is
amended by adding at the end the following new paragraph:
``(19)(A) Payment for any service furnished by a practitioner
described in subparagraph (C) and for which payment may be made under
this part on a reasonable charge or fee schedule basis may only be made
under this part on an assignment-related basis.
``(B) A practitioner described in subparagraph (C) or other person
may not bill (or collect any amount from) the individual or another
person for any service described in subparagraph (A), except for
deductible and coinsurance amounts applicable under this part. No
person is liable for payment of any amounts billed for such a service
in violation of the previous sentence. If a practitioner or other
person knowingly and willfully bills (or collects an amount) for such a
service in violation of such sentence, the Secretary may apply
sanctions against the practitioner or other person in the same manner
as the Secretary may apply sanctions against a physician in accordance
with subsection (j)(2) in the same manner as such section applies with
respect to a physician. Paragraph (4) of subsection (j) shall apply in
this subparagraph in the same manner as such paragraph applies to such
section.
``(C) A practitioner described in this subparagraph is any of the
following:
``(i) A physician assistant, nurse practitioner, or
clinical nurse specialist (as defined in section 1861(aa)(5)).
``(ii) A certified registered nurse anesthetist (as defined
in section 1861(bb)(2)).
``(iii) A certified nurse-midwife (as defined in section
1861(gg)(2)).
``(iv) A clinical social worker (as defined in section
1861(hh)(1)).
``(v) A clinical psychologist (as defined by the Secretary
for purposes of section 1861(ii)).
``(D) For purposes of this paragraph, a service furnished by a
practitioner described in subparagraph (C) includes any services and
supplies furnished as incident to the service as would otherwise be
covered under this part if furnished by a physician or as incident to a
physician's service.''.
(2) Conforming amendments.--
(A) Section 1833 (42 U.S.C. 1395l) is amended--
(i) in subsection (l)(5), by striking
subparagraph (B) and redesignating subparagraph
(C) as subparagraph (B);
(ii) by striking subsection (p); and
(iii) in subsection (r), by striking
paragraph (3) and redesignating paragraph (4)
as paragraph (3).
(B) Section 1842(b)(12) (42 U.S.C. 1395u(b)(12)) is
amended by striking subparagraph (C).
(c) Information on Extra-Billing Limits.--
(1) Part of explanation of medicare benefits.--Section
1842(h)(7) (42 U.S.C. 1395u(h)(7)) is amended--
(A) by striking ``and'' at the end of subparagraph
(B),
(B) in subparagraph (C), by striking ``shall
include'',
(C) in subparagraph (C), by striking the period at
the end and inserting ``, and'', and
(D) by adding at the end the following new
subparagraph:
``(D) in the case of services for which the billed amount
exceeds the limiting charge imposed under section 1848(g),
information regarding such applicable limiting charge
(including information concerning the right to a refund under
section 1848(g)(1)(A)(iv)).''.
(2) Determinations by carriers.--Subparagraph (G) of
section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended to read
as follows:
``(G) will, for a service that is furnished with respect to
an individual enrolled under this part, that is not paid on an
assignment-related basis, and that is subject to a limiting
charge under section 1848(g)--
``(i) determine, prior to making payment, whether
the amount billed for such service exceeds the limiting
charge applicable under section 1848(g)(2);
``(ii) notify the physician, supplier, or other
person periodically (but not less often than once every
30 days) of determinations that amounts billed exceeded
such applicable limiting charges; and
``(iii) provide for prompt response to inquiries of
physicians, suppliers, and other persons concerning the
accuracy of such limiting charges for their
services;''.
(d) Report on Charges in Excess of Limiting Charge.--Section
1848(g)(6)(B) (42 U.S.C. 1395w-4(g)(6)(B)) is amended by inserting
``the extent to which actual charges exceed limiting charges, the
number and types of services involved, and the average amount of excess
charges and'' after ``report to the Congress''.
(e) Miscellaneous and Technical Amendments.--Section 1833 (42
U.S.C. 1395l) is amended--
(1) in subsection (a)(1)--
(A) by striking ``and'' before ``(N)'';
(B) with respect to the matter inserted by section
4155(b)(2)(B) of OBRA-1990--
(i) by striking ``(M)'' and inserting ``,
and (O)''; and
(ii) by transferring and inserting it (as
amended) immediately before the semicolon at
the end;
(C) by striking ``and'' before ``(O)'', and
(D) by inserting before the semicolon at the end
the following: ``, and (P) with respect to services
described in clauses (i), (ii) and (iv) of section
1861(s)(2)(K), the amounts paid are subject to the
provisions of section 1842(b)(12)''; and
(2) in subsection (h)(5)(D)--
(A) by striking ``paragraphs (2) and (3)'' and by
inserting ``paragraph (2)'', and
(B) by adding at the end the following: ``Paragraph
(4) of such section shall apply in this subparagraph in
the same manner as such paragraph applies to such
section.''.
(f) Effective Dates.--
(1) Enforcement and uniform application; miscellaneous and
technical amendments.--The amendments made by subsections (a)
and (e) shall apply to services furnished on or after the date
of the enactment of this Act; except that the amendments made
by subsection (a) shall not apply to services of a
nonparticipating supplier or other person furnished before
January 1, 1994.
(2) Practitioners.--The amendments made by subsection (b)
shall apply to services furnished on or after January 1, 1994.
(3) EOMBs.--The amendments made by subsection (c)(1) shall
apply to explanations of benefits provided on or after January
1, 1994.
(4) Carrier determinations.--The amendments made by
subsection (c)(2) shall apply to contracts as of January 1,
1994.
(5) Report.--The amendment made by subsection (d) shall
apply to reports for years beginning after 1993.
Subpart B--Outpatient Hospital Services and Ambulatory Surgical
Services
SEC. 7221. EXTENSION OF 10 PERCENT REDUCTION IN PAYMENTS FOR CAPITAL-
RELATED COSTS OF OUTPATIENT HOSPITAL SERVICES.
Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(S)(ii)(I)) is
amended by striking ``fiscal year 1992, 1993, 1994, or 1995'' and
inserting ``fiscal years 1992 through 1998''.
SEC. 7222. EXTENSION OF REDUCTION IN PAYMENTS FOR OTHER COSTS OF
OUTPATIENT HOSPITAL SERVICES.
Section 1861(v)(1)(S)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is
amended by striking ``, 1992, 1993, 1994, or 1995'' and inserting
``through 1998''.
SEC. 7223. REDUCTION IN PAYMENTS FOR INTRAOCULAR LENSES.
(a) Payment for Intraocular Lens.--Section 4151(c)(3) of OBRA-1990
is amended--
(1) by striking ``center'' and all that follows and
inserting ``center--
``(A) on or after the date of the enactment of this
Act and on or before December 31, 1993, shall be equal
to $200; and
``(B) on or after January 1, 1994, and on or before
December 31, 1998, shall be equal to $150.''; and
(2) in the heading, by striking ``2-year freeze in
allowance'' and inserting ``Allowance''.
(b) Conforming Amendments.--
(1) Payment amounts for services furnished in ambulatory
surgical centers.--(A)(i) Section 1833(i)(2)(A)(i) (42 U.S.C.
1395l(i)(2)(A)(i)) is amended by striking the comma at the end
and inserting the following: ``, as determined in accordance
with a survey (based upon a representative sample of procedures
and facilities) taken not later than January 1, 1995, and every
5 years thereafter, of the actual audited costs incurred by
such centers in providing such services,''.
(ii) The second sentence of section 1833(i)(1) (42 U.S.C.
1395l(i)(1)) is amended by striking the period and inserting
the following: ``, in consultation with appropriate trade and
professional organizations.''.
(B) Section 4151(c)(3) of OBRA-1990, as amended in
subsection (a), is amended by striking ``for the insertion of
an intraocular lens'' and inserting ``for an intraocular lens
inserted''.
(2) Adjustments to payment amounts for new technology
intraocular lenses.--(A) Notwithstanding section 4151(c)(3) of
OBRA-1990 (as amended by subsection (a)), the Secretary of
Health and Human Services (in this paragraph referred to as the
``Secretary'') shall, not later than 1 year after the date of
the enactment of this Act, develop and implement a process
under which interested parties may request review by the
Secretary of the appropriateness of the reimbursement amount
provided under section 1833(i)(2)(A)(iii) of the Social
Security Act with respect to a class of new technology
intraocular lenses. For purposes of the preceding sentence, an
intraocular lens may not be treated as a new technology
intraocular lens unless it has been approved by the Food and
Drug Administration.
(B) In determining whether to provide an adjustment of
payment with respect to a particular lens under subparagraph
(A), the Secretary shall take into account whether use of the
lens is likely to result in reduced risk of intraoperative or
postoperative complication or trauma, accelerated postoperative
recovery, reduced induced astigmatism, improved postoperative
visual acuity, more stable postoperative vision, or other
comparable clinical advantages.
(C) The Secretary shall publish notice in the Federal
Register from time to time (but no less often than once each
year) of a list of the requests that the Secretary has received
for review under this subsection, and shall provide for a 30-
day comment period on the lenses that are the subjects of the
requests contained in such notice. The Secretary shall publish
a notice of the determinations with respect to intraocular
lenses listed in the notice within 90 days after the close of
the comment period.
(D) Any adjustment of a payment amount (or payment limit)
made under this paragraph shall become effective not later than
30 days after the date on which the notice with respect to the
adjustment is published under subparagraph (C).
(3) Blend Amounts for Ambulatory Surgical Center
Payments.--
(A) In general.--Subclauses (I) and (II) of section
1833(i)(3)(B)(ii) (42 U.S.C. 1395l(i)(3)(B)(ii)) are
each amended--
(i) by striking ``for reporting'' and
inserting ``for portions of cost reporting'';
and
(ii) by striking ``and on or before'' and
inserting ``and ending on or before''.
(B) Effective date.--The amendments made by
subparagraph (A) shall take effect as if included in
the enactment of OBRA-1990.
Subpart C--Durable Medical Equipment
SEC. 7231. REVISIONS TO PAYMENT RULES FOR DURABLE MEDICAL EQUIPMENT.
(a) Basing National Payment Limits on Median of Local Payment
Amounts.--
(1) Inexpensive and routinely purchased items; items
requiring frequent and substantial servicing.--(A) Paragraphs
(2)(C)(i)(II) and (3)(C)(i)(II) of section 1834(a) (42 U.S.C.
1395m(a)) are each amended--
(i) by striking ``1992'' the first place it appears
and inserting ``1992, 1993, and 1994''; and
(ii) by striking ``1992'' the second place it
appears and inserting ``the year''.
(B) Paragraphs (2)(C)(ii) and (3)(C)(ii) of section 1834(a)
(42 U.S.C. 1395m(a)) are each amended--
(i) by striking ``and'' at the end of subclause
(I);
(ii) by redesignating subclause (II) as (IV); and
(iii) by inserting after subclause (I) the
following new subclauses:
``(II) for 1992 and 1993, the
amount determined under this clause for
the preceding year increased by the
covered item update for such subsequent
year,
``(III) for 1994, the local payment
amount determined under clause (i) for
such item or device for that year,
except that the national limited
payment amount may not exceed 100
percent of the median of all local
payment amounts determined under such
clause for such item for that year and
may not be less than 85 percent of the
median of all local payment amounts
determined under such clause for such
item or device for that year, and''.
(2) Miscellaneous devices and items.--Section 1834(a)(8)
(42 U.S.C. 1395m(a)(8)) is amended--
(A) in subparagraph (A)(ii)(III), by striking
``1992'' and inserting ``1992, 1993, and 1994''; and
(B) in subparagraph (B)--
(i) by striking ``and'' at the end of
clause (i),
(ii) by redesignating clause (ii) as (iv),
and
(iii) by inserting after clause (i) the
following new clauses:
``(ii) for 1992 and 1993, the amount
determined under this subparagraph for the
preceding year increased by the covered item
update for such subsequent year;
``(iii) for 1994, the local purchase price
computed under subparagraph (A)(ii) for the
item for the year, except that such national
limited purchase price may not exceed 100
percent of the median of all local purchase
prices computed for the item under such
subparagraph for the year and may not be less
than 85 percent of the median of all local
purchase prices computed under such
subparagraph for the item for the year; and''.
(3) Oxygen and oxygen equipment.--Section 1834(a)(9) (42
U.S.C. 1395m(a)(9)) is amended--
(A) in subparagraph (A)(ii)(II), by striking ``1991
and 1992'' and inserting ``1991, 1992, 1993, and
1994''; and
(B) in subparagraph (B)--
(i) by striking ``and'' at the end of
clause (i),
(ii) by redesignating clause (ii) as (iv),
and
(iii) by inserting after clause (i) the
following new clauses:
``(ii) for 1992 and 1993, the amount
determined under this subparagraph for the
preceding year increased by the covered item
update for such subsequent year;
``(iii) for 1994, the local monthly payment
rate computed under subparagraph (A)(ii) for
the item for the year, except that such
national limited monthly payment rate may not
exceed 100 percent of the median of all local
monthly payment rates computed for the item
under such subparagraph for the year and may
not be less than 85 percent of the median of
all local monthly payment rates computed for
the item under such subparagraph for the year;
and''.
(b) Payment for Prosthetic Devices and Orthotics and Prosthetics.--
(1) In general.--Section 1834(h)(2) (42 U.S.C. 1395m(h)(2))
is amended--
(A) in subparagraph (A)(ii)(II), by striking ``1992
or 1993'' and inserting ``1992, 1993, or 1994'';
(B) in subparagraph (B)(ii), by striking ``each
subsequent year'' and inserting ``1993'';
(C) in subparagraph (C)(iv), by striking ``regional
purchase price computed under subparagraph (B)'' and
inserting ``national limited purchase price computed
under subparagraph (E)'';
(D) in subparagraph (D)(ii), by striking ``a
subsequent year'' and inserting ``1993''; and
(E) by adding at the end the following new
subparagraph:
``(E) Computation of national limited purchase
price.--With respect to the furnishing of a particular
item in a year, the Secretary shall compute a national
limited purchase price--
``(i) for 1994, equal to the local purchase
price computed under subparagraph (A)(ii)(II)
for the item for the year, except that such
national limited purchase price may not exceed
100 percent of the median of all local purchase
prices for the item computed under such
subparagraph for the year, and may not be less
than 85 percent of the median of all local
purchase prices for the item computed under
such subparagraph for the year; and
``(ii) for each subsequent year, equal to
the amount determined under this subparagraph
for the preceding year increased by the
applicable percentage increase for such
subsequent year.''.
(c) Effective Date.--The amendments made by this section shall
apply to items furnished on or after January 1, 1994.
SEC. 7232. TREATMENT OF NEBULIZERS AND ASPIRATORS.
(a) In General.--Section 1834(a)(3)(A) (42 U.S.C. 1395m(a)(3)(A))
is amended by striking ``(such as ventilators, aspirators, IPPB
machines, and nebulizers)''.
(b) Payment for Accessories Relating to Nebulizers and
Aspirators.--Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)) is amended--
(1) by striking ``or'' at the end of clause (i),
(2) by adding ``or'' at the end of clause (ii), and
(3) by inserting after clause (ii) the following new
clause:
``(iii) which is an accessory used in
conjunction with a nebulizer or aspirator,''.
(c) Effective Date.--The amendments made by this section shall
apply to items furnished on or after January 1, 1994.
SEC. 7233. PAYMENT FOR SURGICAL DRESSINGS.
(a) In General.--Section 1834 (42 U.S.C. 1395m) is amended by
adding at the end the following new subsection:
``(i) Payment for Surgical Dressings.--
``(1) In general.--Payment under this subsection for
surgical dressings (described in section 1861(s)(5)) shall be
made in a lump sum amount for the purchase of the item in an
amount equal to 80 percent of the lesser of--
``(A) the actual charge for the item; or
``(B) a payment amount determined in accordance
with the methodology described in subparagraphs (B) and
(C) of subsection (a)(2) (except that in applying such
methodology, the national limited payment amount
referred to in such subparagraphs shall be initially
computed based on local payment amounts using average
reasonable charges for the 12-month period ending
December 31, 1992, increased by the covered item
updates described in such subsection for 1993 and
1994).
``(2) Exceptions.--Paragraph (1) shall not apply to
surgical dressings that are--
``(A) furnished as an incident to a physician's
professional service; or
``(B) furnished by a home health agency.''.
(b) Conforming Amendment.--Section 1833(a)(1) (42 U.S.C.
1395l(a)(1)), as amended by section 7207(e)(1), is amended--
(1) by striking ``and'' before ``(P)'', and
(2) by inserting before the semicolon at the end the
following: ``, and (Q) with respect to surgical dressings, the
amounts paid shall be the amounts determined under section
1834(j)''.
(c) Effective Date.--The amendments made by this section shall
apply to items furnished on or after January 1, 1994.
SEC. 7234. PAYMENTS FOR TENS DEVICES.
(a) In General.--Section 1834(a)(1)(D) (42 U.S.C. 1395m(a)(1)(D))
is amended by striking ``15 percent'' the second place it appears and
inserting ``45 percent''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to items furnished on or after January 1, 1994.
Subpart D--Part B Premium
SEC. 7251. PART B PREMIUM.
Section 1839(e) (42 U.S.C. 1395r(e)) is amended--
(1) in paragraph (1)(A), by striking ``December 1983 and
prior to January 1991 shall be an amount equal to 50 percent''
and inserting ``after December 1995 and prior to January 1999
shall be an amount equal to 50 percent'', and
(2) in paragraph (2), by striking ``1991'' and inserting
``1998''.
Subpart E--Other Provisions
SEC. 7261. PAYMENTS FOR CLINICAL DIAGNOSTIC LABORATORY TESTS.
(a) Lower Cap.--Section 1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is
amended--
(1) by striking ``and'' at the end of clause (iii),
(2) in clause (iv), by inserting ``and before January 1,
1994,'' after ``1990,'',
(3) by striking the period at the end of clause (iv) and
inserting ``, and'', and
(4) by adding at the end the following:
``(v) after December 31, 1993, is equal to 76 percent of
the median of all the fee schedules established for that test
for that laboratory setting under paragraph (1).''.
(b) No Update for 1994 Through 1998.--Section 1833(h)(2)(A)(ii)(II)
(42 U.S.C. 1395l(h)(2)(A)(ii)(III)) is amended by inserting ``1994,
1995, 1996, 1997, and 1998'' after ``1988''.
PART III--PROVISIONS RELATING TO PARTS A AND B
SEC. 7301. PAYMENTS FOR DIRECT GRADUATE MEDICAL EDUCATION COSTS.
(a) Weighting Factors.--Section 1886(h)(4)(C) (42 U.S.C.
1395ww(h)(4)(C)) is amended to read as follows:
``(C) Weighting factors for certain residents.--
Subject to subparagraph (D), such rules shall provide,
in calculating the number of full-time-equivalent
residents in an approved residency program--
``(i) with respect to residents entering an
approved medical residency training program
before September 1, 1993--
``(I) for a resident who is in the
resident's initial residency period,
the weighting factor is 1.00, and
``(II) for a resident who is not in
the resident's initial residency
period, the weighting factor is .50;
and
``(ii) with respect to residents entering
an approved medical residency training program
on or after September 1, 1993--
``(I) for a resident who is in the
resident's initial residency period,
and is in--
``(aa) a primary care
residency, the weighting factor
is 1.10, and
``(bb) any other residency,
the weighting factor is 0.70,
and
``(II) for a resident who is not in
the resident's initial residency
period, the weighting factor is
0.50.''.
(b) Initial Residency Period.--
(1) In general.--Section 1886(h)(5)(F) (42 U.S.C.
1395ww(h)(5)(F)) is amended by striking ``plus one year''.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective on and after July 1, 1995.
(c) Primary Care Residency.--Section 1886(h)(5) (42 U.S.C.
1395ww(h)(5)) is amended by adding at the end the following new
subparagraph:
``(I) Primary care residency.--The term `primary
care residency' means a residency training program in
family medicine, general internal medicine, general
pediatrics, preventive care, geriatric care, or
osteopathic general practice.''.
(d) Preventive Care Services as Part of Initial Residency Period.--
Section 1886(h)(5)(F)(ii) (42 U.S.C. 1395ww(h)(5)(F)(ii)) is amended by
inserting ``or a preventive care residency or fellowship program''
after ``fellowship program''.
(e) Successor Exams Included in Definition of FMGEMS Examination.--
(1) In general.--Section 1886(h)(5)(E) is amended by
inserting ``or any successor examination'' after ``Medical
Sciences''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply as if included in the enactment of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272).
(f) Report by the Secretary.--
(1) Recommendations.--The Secretary shall make
recommendations--
(A) concerning the extent to which variation in the
approved FTE per resident amounts should be reduced;
(B) whether the approved FTE per resident amounts
should be adjusted to account for substantial changes
in the operation of an approved medical residency
training program since the base year calculation; and
(C) potential changes in the graduate medical
education payment system that would promote residency
training in nonhospital ambulatory site.
(2) Report.--Not later than July 31, 1994, the Secretary
shall deliver a report to Congress which shall contain
recommendations on each of the matters under paragraph (1).
SEC. 7302. REVISION OF HOME HEALTH AGENCY COST LIMITS.
(a) In General.--Section 1861(v)(1)(L) (42 U.S.C.
1395x(v)(1)(L)(i)) is amended--
(1) in clause (i), by striking ``for cost reporting
periods'' and all that follows through to the period and
inserting ``110 percent of the median of the labor-related and
nonlabor per visit costs for home health agencies.'', and
(2) in clause (ii), by striking ``specific basis,'' and all
that follows through ``agencies.'' and inserting ``specific
basis.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to cost reporting periods beginning on or after October 1, 1993.
SEC. 7303. MEDICARE AS SECONDARY PAYER.
(a) Extension of and Modifications to Data Match Program.--(1)(A)
Section 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is amended
by striking ``1995'' and inserting ``1998''.
(B) Section 6103(l)(12)(F) of the Internal Revenue Code of 1986 is
amended--
(i) in clause (i), by striking ``1995'' and inserting
``1998'',
(ii) in clause (ii)(I), by striking ``1994'' and inserting
``1997'', and
(iii) in clause (ii)(II), by striking ``1995'' and
inserting ``1998''.
(2)(A) Section 6103(l)(12)(B)(i) of the Internal Revenue Code of
1986 is amended by inserting ``, above an amount (if any) specified by
the Secretary of Health and Human Services,'' after ``section
3401(a))''.
(B) The matter in section 6103(l)(12)(B)(ii) of such Code preceding
subclause (I) is amended by inserting ``, above an amount (if any)
specified by the Secretary of Health and Human Services,'' after
``wages''.
(C) The heading to section 6103(l)(12) of such Code is amended by
striking ``taxpayer identity'' and inserting ``return''.
(3)(A) Section 6103(l)(12) of the Internal Revenue Code of 1986, as
amended by paragraph (1), is amended--
(i) by redesignating subparagraphs (E) and (F) as
subparagraphs (F) and (G), respectively, and
(ii) by inserting after subparagraph (D) the following new
subparagraph:
``(E) Disclosure concerning enforcement
activities.--The Secretary shall, upon written request
from the Secretary of Health and Human Services,
disclose to the Secretary of Health and Human Services
the status of any activities undertaken (with respect
to persons specified by the Secretary of Health and
Human Services) to enforce the requirements of section
5000.''.
(B) Section 6103(l)(12)(D)(i) of such Code is amended by striking
``this paragraph'' and inserting ``subparagraphs (A) through (C)''.
(C) The heading to section 6103(l)(12) of such Code is amended by
inserting ``and for facilitation of enforcement of medicare secondary
payer requirements'' before the period.
(D) Section 1862(b)(5)(C)(i) (42 U.S.C. 1395y(b)(5)(C)(i)) is
amended by striking ``6103(l)(12)(D)(iii)'' and inserting
``6103(l)(12)(F)(iii)''.
(b) Permanent Application to Disabled Active Individuals.--Section
1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended by striking clause
(iii).
(c) Application of ESRD Rules to Certain Aged and Disabled
Beneficiaries and Increase in Medicare Secondary Payer Coverage for
ESRD Services to 24-months.--(1) Subparagraphs (A)(iv) and (B)(ii) of
section 1862(b)(1) (42 U.S.C. 1395y(b)(1)) are each amended--
(A) by striking ``Clause (i) shall not apply'' and
inserting ``Subparagraph (C) shall apply instead of clause
(i)'', and
(B) by inserting ``(without regard to entitlement under
section 226)'' after ``individual is, or''.
(2) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
(A) in the second sentence, by striking ``on or before
January 1, 1996'' and inserting before ``January 1, 1994'', and
(B) by adding at the end the following: ``Effective for
items and services furnished on or after January 1, 1994, and
before October 1, 1998, (with respect to periods beginning on
or after July 1, 1992), this subparagraph shall be applied by
substituting `24-month' for `12-month' each place it
appears.''.
(d) Application of Excise Tax to Failure To Reimburse Federal
Government.--
(1) In general.--Section 5000(c) of the Internal Revenue
Code of 1986 is amended by striking ``of section 1862(b)(1)''
and inserting ``of paragraph (1), or with the requirements of
paragraph (2), of section 1862(b).''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to demands for repayment issued after the date of
the enactment of this Act.
(e) Retroactive Exemption for Certain Situations Involving
Religious Orders.--Section 1862(b)(1)(D) of the Social Security Act (42
U.S.C. 1395y(b)(1)(D)) applies, with respect to items and services
furnished before October 1, 1989, to any claims that the Secretary of
Health and Human Services had not identified before that date as
subject to the provisions of this subsection.
(f) Uniform Rules for Size of Employer.--(1) Section 1862(b)(1) (42
U.S.C. 1395y(b)(1)) is amended by adding at the end the following new
subparagraph:
``(E) General provisions.--
``(i) Exclusion of group health plan of a
small employer.--Subparagraphs (A) through (C)
shall not apply to a group health plan unless
the plan is a plan of, or contributed to by, an
employer or employee organization that has 20
or more individuals in current employment
status for each working day in each of 20 or
more calendar weeks in the current calendar
year or the preceding calendar year.
``(ii) Exception for small employers in
multiemployer or multiple employer group health
plans.--Subparagraphs (A) through (C) shall not
apply with respect to individuals enrolled in a
multiemployer or multiple employer group health
plan if the coverage of the individuals under
the plan is by virtue of current employment
status with an employer that does not have 20
or more individuals in current employment
status for each working day in each of 20 or
more calendar weeks in the current calendar
year or the preceding calendar year; but the
exception provided in this clause applies only
if the plan elects treatment under this clause.
``(iii) Special rules.--For purposes of
clauses (i) and (ii)--
``(I) all employees of corporations
which are members of a controlled group
of corporations (within the meaning of
section 1563(a) of the Internal Revenue
Code of 1986, determined without regard
to section 1563(a)(4) or section
(e)(3)(C) of such Code), shall be
treated as employed by a single
employer,
``(II) all employees of trades or
businesses (whether or not
incorporated) which are under common
control (under regulations prescribed
by the Secretary of the Treasury under
section 414(c) of such Code) shall be
treated as employed by a single
employer,
``(III) all employees of the
members of an affiliated service group
(as defined in section 414(m) of such
Code) shall be treated as employed by a
single employer, and
``(IV) leased employees (as defined
in section 414(n)(2) of such Code)
shall be treated as employees of the
person for whom they perform services
to the extent they are so treated under
section 414(n) of such Code.
In applying sections of the Internal Revenue
Code under this clause, the Secretary shall
rely upon regulations and decisions of the
Secretary of the Treasury respecting such
sections.''.
``(iv) Group health plan defined.--For
purposes of this subsection, the term `group
health plan' has the meaning given such term in
section 5000(b) of the Internal Revenue Code of
1986, without regard to section 5000(d) of such
Code.
``(v) Current employment status defined.--
For purposes of this subsection, an individual
has `current employment status' with an
employer if the individual is an employee, is
the employer, or is associated with the
employer in a business relationship.
``(vi) Employer defined.--For purposes of
this subsection, the term `employer' includes a
self-employed person.''.
(2)(A) Section 1862(b)(1)(A)(i)(I) (42 U.S.C. 1395y(b)(1)(A)(i)(I))
is amended to read as follows:
``(I) may not take into account
that an individual (or the individual's
spouse) who is covered under the plan
by virtue of the individual's current
employment status with an employer is
entitled to benefits under this title
under section 226(a), and''.
(B) Section 1862(b)(1)(A)(i)(II) (42 U.S.C. 1395y(b)(1)(A)(i)(II))
is amended to read as follows:
``(II) shall provide that any
individual age 65 or over (and the
individual's spouse age 65 or older)
who is covered under the plan by virtue
of the individual's current employment
status with an employer shall be
entitled to the same benefits under the
plan under the same conditions as any
such individual (or spouse) under age
65.''.
(C) Section 1862(b)(1)(A) (42 U.S.C. 1395y(b)(1)(A)), as amended by
subsection (c)(1), is amended--
(i) by striking clauses (ii), (iii), and (v), and
(ii) by redesignating clause (iv) as clause (ii).
(3)(A) Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)(i)) is
amended--
(i) by striking the heading and inserting the following new
heading:
``(B) Disabled individuals under group health
plans.--'', and
(ii) by striking clause (i) and inserting the following new
clause:
``(i) In general.--A group health plan may not take
into account that an individual (or a member of the
individual's family) who is covered under the plan by
virtue of the individual's current employment status
with an employer is entitled to benefits under this
title under section 226(b).''.
(B) Section 1862(b)(1)(B) (42 U.S.C. 1395y(b)(1)(B)) is amended by
striking clause (iv).
(4) Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is amended--
(A) in the matter preceding clause (i), by striking ``(as
defined in subparagraph (A)(v))'',
(B) by striking ``solely'' each place it appears,
(C) by striking ``by reason of'' and inserting ``under''
each place it appears, and
(D) by inserting ``or eligible for'' after ``entitled to''
the first and last place it appears.
(5) The second sentence of section 1862(b)(2)(A) (42 U.S.C.
1395y(b)(2)(A)) is amended by striking ``or large group health plan''.
(6)(A) Subsection (a) of section 5000 of the Internal Revenue Code
of 1986 is amended by inserting ``(including a self-employed person)''
after ``employer'';
(B) Subsection (b) of section 5000 of such Code is amended to read
as follows:
``(b) Group Health Plan.--The term `group health plan' means a plan
(including a self-insured plan) of, or contributed to by, an employer
(including a self-employed person) or employee organization to provide
health care (directly or otherwise) to the employees, former employees,
the employer, others associated or formerly associated with the
employer in a business relationship, or their families.''; and
(C) Subsection (c) of section 5000 of such Code by striking ``or
large group health plan''.
(D) Section 6103(l)(12)(F)(ii) of such Code (as redesignated by
subsection (a)(3)(A)(i) of this section) is amended to read as follows:
``(ii) Group health plan.--The term `group
health plan' means any group health plan (as
defined in section 5000(b)).''.
(g) Effective Date.--The amendments made by subsections (c)(1),
(d), and (f) apply to items and services furnished after the third
calendar month beginning after the date of enactment of this Act.
SEC. 7304. EXTENSION OF SELF-REFERRAL BAN TO ADDITIONAL SPECIFIED
SERVICES.
(a) Extension to Designated Health Services.--
(1) In general.--Section 1877(h) (42 U.S.C. 1395nn(h)) is
amended by adding at the end the following new paragraph:
``(8) Designated health services.--The term `designated
health services' means--
``(A) clinical laboratory services;
``(B) physical or occupational therapy services;
``(C) radiology or other diagnostic services;
``(D) radiation therapy services;
``(E) the furnishing of durable medical equipment;
``(F) the furnishing of parenteral and enteral
nutrition nutrients, supplies, and equipment;
``(G) home health services; and
``(H) the furnishing of prosthetics, orthotics, and
prosthetic devices.''.
(2) Conforming amendments.--Section 1877 (42 U.S.C. 1395nn)
is amended--
(A) by striking ``clinical laboratory services''
and ``clinical laboratory services'' and inserting
``designated health services'' and ``designated health
services'', respectively, each place either appears in
subsections (a)(1), (b)(2)(A)(ii), (d)(1), (d)(2), and
(d)(3); and
(B) by striking ``clinical laboratory service'' and
inserting ``designated health service'' each place it
appears in subsections (g)(1) and (h)(7)(B).
(b) Modification to Exception for In-Office Ancillary Services.--
Section 1877(b)(2) (42 U.S.C. 1395nn(b)(2)) is amended--
(1) by inserting ``(other than durable medical equipment
and parenteral and enteral nutrition equipment and supplies)''
after ``services'' the first place it appears; and
(2) in subparagraph (A)(ii)(II), by striking ``centralized
provision'' and inserting ``provision of some or all''.
(c) Treatment of Compensation Arrangements.--
(1) Rental of office space and equipment.--
(A) In general.--Paragraph (1) of section 1877(e)
(42 U.S.C. 1395nn(e)) is amended to read as follows:
``(1) Rental of office space; rental of equipment.--
``(A) Office space.--Payments made by a lessee to a
lessor for the use of premises if--
``(i) the lease is set out in writing,
signed by the parties, and specifies the
premises covered by the lease,
``(ii) the space rented or leased is
reasonable and necessary for the legitimate
business purposes of the lease or rental and is
used exclusively by the lessee when being used
by the lessee, except that the lessee may make
payments for the use of space consisting of
common areas if such payments do not exceed the
lessee's pro rata share of expenses for such
space based upon the ratio of the space used
exclusively by the lessee to the total amount
of space (other than common areas) occupied by
all persons using such common areas,
``(iii) the lease provides for a term of
rental or lease for at least one year,
``(iv) the rental charges over the term of
the lease are set in advance, are consistent
with fair market value, and are not determined
in a manner that takes into account the volume
or value of any referrals or other business
generated between the parties,
``(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
``(vi) the lease covers all of the premises
leased between the parties for the period of
the lease, and
``(vii) the compensation arrangement meets
such other requirements as the Secretary may
impose by regulation as needed to protect
against program or patient abuse.
``(B) Equipment.--Payments made by a lessee of
equipment to the lessor of the equipment for the use of
the equipment if--
``(i) the lease is set out in writing,
signed by the parties, and specifies the
equipment covered by the lease,
``(ii) the equipment rented or leased is
reasonable and necessary for the legitimate
business purposes of the lease or rental and is
used exclusively by the lessee when being used
by the lessee,
``(iii) the lease provides for a term of
rental or lease of at least one year,
``(iv) the rental charges over the term of
the lease are set in advance, are consistent
with fair market value, and are not determined
in a manner that takes into account the volume
or value of any referrals or other business
generated between the parties,
``(v) the lease would be commercially
reasonable even if no referrals were made
between the parties,
``(vi) the lease covers all of the
equipment leased between the parties for the
period of the lease, and
``(vii) the compensation arrangement meets
such other requirements as the Secretary may
impose by regulation as needed to protect
against program or patient abuse.''.
(B) Conforming amendment.--Section 1877(h) (42
U.S.C. 1395nn(h)) is amended by striking paragraphs (5)
and (6) and by redesignating paragraphs (7) and (8) (as
added by subsection (a)(1)) as paragraphs (5) and (6),
respectively.
(2) Bona fide employment relationships.--Section 1877(e)(2)
(42 U.S.C. 1395nn(e)(2)) is amended--
(A) by striking ``and service'' and ``with
hospitals'';
(B) by striking ``An arrangement'' and all that
follows through ``if'' and inserting ``Any amount paid
by an employer to a physician (or an immediate family
member of such physician) who has a bona fide
employment relationship with the employer for the
provision of services if'';
(C) in subparagraphs (A), (B), and (D), by striking
``arrangement'' and inserting ``employment
relationship'';
(D) in subparagraph (C), by striking ``hospital''
and inserting ``employer''; and
(E) by adding at the end the following new flush
sentence:
``Subparagraph (B)(ii) shall not be construed as prohibiting
the payment of remuneration in the form of a productivity bonus
based on services performed personally by the physician (or an
immediate family member of such physician).''.
(3) Personal service arrangements.--Section 1877(e)(3) (42
U.S.C. 1395nn(e)(3)) is amended to read as follows:
``(3) Service arrangements.--
``(A) Personal service arrangements.--Remuneration
from an entity under an arrangement if--
``(i) the arrangement is set out in
writing, signed by the parties, and specifies
the services covered by the arrangement,
``(ii) the arrangement covers all of the
services to be provided,
``(iii) the aggregate services contracted
for do not exceed those that are reasonable and
necessary for the legitimate business purposes
of the arrangement,
``(iv) the term of the arrangement is for
at least one year,
``(v) the compensation to be paid over the
term of the arrangement is set in advance, does
not exceed fair market value, and is not
determined in a manner that takes into account
the volume or value of any referrals or other
business generated between the parties,
``(vi) the services to be performed under
the arrangement do not involve the counseling
or promotion of a business arrangement of other
activity that violates any State or Federal
law, and
``(vii) the arrangement meets such other
requirements as the Secretary may impose by
regulation as needed to protect against program
or patient abuse.
``(B) Other service arrangements.--Remuneration
from an entity under an arrangement if--
``(i) the arrangement is--
``(I) for specific identifiable
services as the medical director or as
a member of a medical advisory board at
the entity pursuant to a requirement of
this title,
``(II) for specific identifiable
physicians' services to be furnished to
an individual receiving hospice care if
payment for such services may only be
made under this title as hospice care,
``(III) for specific physicians'
services furnished to a nonprofit blood
center, or
``(IV) for specific identifiable
administrative services (other than
direct patient care services), but only
under exceptional circumstances
specified by the Secretary in
regulations;
``(ii) the requirements described in
subparagraphs (B) and (C) of paragraph (2) are
met with respect to the entity in the same
manner as they apply to an employer; and
``(iii) the arrangement meets such other
requirements as the Secretary may impose by
regulation as needed to protect against program
or patient abuse.''.
(4) Health services furnished under certain hospital
arrangements.--Section 1877(e) (42 U.S.C. 1395nn(e)) is amended
by adding at the end the following new paragraph:
``(7) Certain group practice arrangements with a
hospital.--
``(A) In general.--An arrangement between a
hospital and a group under which designated health
services are provided by the group but are billed by
the hospital if--
``(i) the group would be a group practice,
but for the fact that it bills for such
services through the hospital;
``(ii) with respect to services provided to
an inpatient of the hospital, the arrangement
is pursuant to the provision of inpatient
hospital services under section 1861(b)(3);
``(iii) the arrangement began before
December 19, 1989, and has continued in effect
without interruption since such date;
``(iv) the group provides substantially all
of the designated health services furnished
under the arrangement to the hospital's
patients;
``(v) the arrangement is pursuant to an
agreement that is set out in writing and that
specifies the services to be provided by the
parties and the compensation for services
provided under the arrangement;
``(vi) the compensation paid over the term
of the agreement is consistent with fair market
value and the compensation per unit of services
is fixed in advance and is not determined in a
manner that takes into account the volume or
value of any referrals or other business
generated between the parties;
``(vii) the compensation is provided
pursuant to an agreement which would be
commercially reasonable even if no referrals
were made to the entity; and
``(viii) the arrangement between the
parties meets such other requirements as the
Secretary may impose by regulation as needed to
protect against program or patient abuse.''.
(5) Additional exception.--Section 1877(e) (42 U.S.C.
1395nn(e)) is further amended by adding at the end the
following new paragraph:
``(8) Payments by a physician for items and services.--
Payments made by a physician--
``(A) to a laboratory in exchange for the provision
of clinical laboratory diagnostic tests, or
``(B) to an entity as compensation for other items
or services if the items or services are furnished at a
price that is consistent with fair market value.''.
(6) Referring physicians.--Subparagraph (C) of section
1877(h)(5) (42 U.S.C. 1395nn(h)(5)), as redesignated by
subsection (c)(1)(B), is amended--
(A) by inserting ``a request by a radiologist for
diagnostic radiology services, and a request by a
radiation oncologist for radiation therapy,'' after
``examination services,'', and
(B) by inserting ``, radiologist, or radiation
oncologist'' after ``pathologist'' the second place it
appears.
(7) Conforming amendment.--Section 1877(b) (42 U.S.C.
1395nn(b)) is amended by striking paragraph (4) and
redesignating paragraph (5) as paragraph (4).
(d) Requirements for Group Practice.--
(1) Additional requirements.--Section 1877(h)(4) (42 U.S.C.
1395nn(h)(4)) is amended to read as follows:
``(4) Group practice.--
``(A) Definition of group practice.--The term
`group practice' means a group of 2 or more physicians
legally organized as a partnership, professional
corporation, foundation, not-for-profit corporation,
faculty practice plan, or similar association--
``(i) in which each physician who is a
member of the group provides substantially the
full range of services which the physician
routinely provides, including medical care,
consultation, diagnosis, or treatment, through
the joint use of shared office space,
facilities, equipment and personnel;
``(ii) for which substantially all of the
services of the physicians who are members of
the group are provided through the group and
are billed in the name of the group and amounts
so received are treated as receipts of the
group;
``(iii) in which the overhead expenses of
and the income from the practice are
distributed in accordance with methods
previously determined by members of the group;
``(iv) except as provided in subparagraph
(B)(i), in which no physician who is a member
of the group directly or indirectly receives
compensation based on the volume or value of
referrals by the physician;
``(v) in which, on average, there are no
less than 5 physicians per office location, but
if a group has less than 15 physicians such
group may have up to 3 office locations any one
of which may have less than 5 physicians;
``(vi) in which members of the group
personally conduct no less than 75 percent of
the physician-patient encounters of the group
practice; and
``(vii) which meets such other standards as
the Secretary may impose by regulation.
``(B) Special rules.--
``(i) Profits and productivity bonuses.--A
physician in a group practice may be paid a
share of overall profits of the group, or a
productivity bonus based on services personally
performed or services incident to such
personally performed services, so long as the
share or bonus is not determined in any manner
which is directly related to the volume or
value of referrals by such physician.
``(ii) Faculty practice plans.--In the case
of a faculty practice plan associated with a
hospital, institution of higher education, or
medical school with an approved medical
residency training program in which physician
members may provide a variety of different
specialty services and provide professional
services both within and outside the group, as
well as perform other tasks such as research,
subparagraph (A) shall be applied only with
respect to the services provided within the
faculty practice plan.
``(C) Definition of office location.--For purposes
of this paragraph, the term `office location' means an
office where physician services are offered to patients
except that--
``(i) such term does not include--
``(I) a location consisting solely of a
diagnostic facility, nursing facility, or
treatment facility such as a physical or
occupational therapy center, or a facility
providing administrative services affiliated
with the group practice; or
``(II) an office located in a rural area
(as defined in section 1886(d)(2)(D)) if at
least 85 percent of the physicians' services
furnished at the location are furnished to
individuals who reside in such a rural area;
and
``(ii) any office location which is located
immediately adjacent to another office location shall
be treated as the same office location.''.
(2) Use of billing numbers, etc.--Section 1877 (42 U.S.C.
1395nn) is amended--
(A) in subsection (b)(2)(B), by inserting ``under a
billing number assigned to the group practice'' after
``member'',
(B) in subsection (h)(4)(A)(ii), as added by
subsection (d)(1), by inserting ``and under a billing
number assigned to the group'' after ``in the name of
the group'', and
(C) in subsection (h)(4)(A)(iii), as so added, by
striking ``by members of the group''.
(3) Conforming amendment.--Section 1877(h) (42 U.S.C.
1395nn(h)) is amended by striking ``Definitions.--'' and
inserting ``Definitions and Special Rules.--''.
(e) Expanding Rural Provider Exception To Cover Compensation
Arrangements.--
(1) In general.--Section 1877(b) (42 U.S.C. 1395nn(b)) is
amended--
(A) by redesignating paragraph (4), as redesignated
by subsection (c)(7), as paragraph (5), and
(B) by inserting after paragraph (3) the following
new paragraph:
``(4) Rural providers.--In the case of designated health
services if--
``(A) the services are furnished in a rural area
(as defined in section 1886(d)(2)(D)), and
``(B) substantially all of the services furnished
by the entity furnishing the services described in
subparagraph (A) are furnished to individuals entitled
to benefits under this title who reside in such a rural
area.''.
(2) Conforming amendments.--Section 1877(d) (42 U.S.C.
1395nn(d)) is amended--
(A) by striking paragraph (2), and
(B) by redesignating paragraph (3) as paragraph
(2).
(f) Exemption of Compensation Arrangements Involving Certain Types
of Remuneration.--Section 1877(h)(1) (42 U.S.C. 1395nn(h)(1)) is
amended--
(1) in subparagraph (A), by inserting before the period at
the end the following: ``other than an arrangement involving
only remuneration described in subparagraph (C)'', and
(2) by adding at the end the following new subparagraph:
``(C) Remuneration described in this subparagraph is any
remuneration consisting of any of the following:
``(i) The forgiveness of amounts owed for
inaccurate tests or procedures, mistakenly performed
tests or procedures, or the correction of minor billing
errors.
``(ii) The provision of items, devices, or supplies
of minor value that are used to--
``(I) collect, transport, process, or store
specimens for the entity providing the item,
device, or supply, or
``(II) communicate the results of tests or
procedures for such entity.''.
(g) Exception for Publicly-Traded Securities.--Section 1877(c) (42
U.S.C. 1395nn(c)) is amended--
(1) in the matter preceding paragraph (1), by striking ``on
terms generally available to the public'' and inserting
``through public trading on a public exchange or which were
inherited''; and
(2) in paragraph (2), by striking ``total assets exceeding
$100,000,000'' and inserting ``stockholder equity exceeding
$75,000,000''.
(h) Miscellaneous and Technical Corrections.--Section 1877 (42
U.S.C. 1395nn) is amended--
(1) in subsection (b)(2)(A)(i), by striking ``who are
employed by such physician or group practice and who are
personally'' and inserting ``who are directly'';
(2) in the fourth sentence of subsection (f)--
(A) by striking ``provided'' and inserting
``furnished'', and
(B) by striking ``provides'' and inserting
``furnish'';
(3) in the last sentence of subsection (f)--
(A) by striking ``providing'' each place it appears
and inserting ``furnishing'',
(B) by striking ``with respect to the providers''
and inserting ``with respect to the entities'', and
(C) by striking ``diagnostic imaging services of
any type'' and inserting ``magnetic resonance imaging,
computerized axial tomography scans, and ultrasound
services''; and
(4) in subsection (a)(2)(B), by striking ``subsection
(h)(1)(A)'' and inserting ``subsection (h)(1)''.
(i) Effective Dates.--
(1) Except as provided in paragraph (2), the amendments
made by this section shall apply to referrals made on or after
January 1, 1992.
(2) The amendments made by subsection (a) apply with
respect to a referral by a physician for designated health
services (as defined in section 1877(h)(6) of the Social
Security Act) made after December 31, 1994.
SEC. 7305. REDUCTION IN PAYMENT FOR ERYTHROPOIETIN.
(a) In General.--Section 1881(b)(11)(B)(ii)(I) (42 U.S.C.
1395rr(b)(11)(B)(ii)(I)) is amended--
(1) by striking ``1991'' and inserting ``1994'', and
(2) by striking ``$11'' and inserting ``$10''.
(b) Effective Date.--The amendments made by subsection (a) apply to
erythropoietin furnished after 1993.
Subtitle B--Medicaid Program
PART I--PROGRAM SAVINGS PROVISIONS
Subpart A--Repeal of Mandate
SEC. 7401. PERSONAL CARE SERVICES FURNISHED OUTSIDE THE HOME AS
OPTIONAL BENEFIT.
(a) In General.--Section 1905(a) (42 U.S.C. 1396d(a)), as amended
by subsection (b), is amended--
(1) in paragraph (7), by striking ``including personal care
services'' and all that follows through ``nursing facility'';
(2) in paragraph (23), by striking ``and'' at the end;
(3) by redesignating paragraph (24) as paragraph (25); and
(4) by inserting after paragraph (23) the following new
paragraph:
``(24) personal care services furnished to an individual
who is not an inpatient or resident of a nursing facility or
other medical institution that are (A) authorized by a
physician for the individual in accordance with a plan of
treatment, (B) provided by an individual who is qualified to
provide such services and who is not a member of the
individual's family, (C) supervised by a registered nurse, and
(D) furnished in a home or other location; and''.
(b) Redesignations to Paragraphs Added by OBRA-1990.--Section
1905(a) (42 U.S.C. 1396d(a)) is amended--
(1) by striking ``and'' at the end of paragraph (21);
(2) in paragraph (24), by striking the comma at the end and
inserting ``; and''; and
(3) by redesignating paragraphs (22), (23), and (24) as
paragraphs (24), (22), and (23), respectively, and by
transferring and inserting paragraph (24), as so redesignated,
after paragraph (23), as so redesignated.
(c) Conforming Amendments.--(1) Section 1902(a)(10)(C)(iv) (42
U.S.C. 1396a(a)(10)(C)(iv)) is amended by striking ``through (21)'' and
inserting ``through (24)''.
(2) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking
``through (22)'' and inserting ``through (25)''.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the enactment of OBRA-1990.
Subpart B--Outpatient Prescription Drugs
SEC. 7411. PERMITTING PRESCRIPTION DRUG FORMULARIES UNDER STATE PLANS.
(a) Elimination of Prohibition Against Use of Formularies.--
Paragraph (54) of section 1902(a) (42 U.S.C. 1396a(a)) is amended to
read as follows:
``(54) in the case of a State plan that provides medical
assistance for covered outpatient drugs (as defined in section
1927(k)), comply with the applicable requirements of section
1927;''.
(b) Standards for Formularies.--Section 1927(d) (42 U.S.C. 1396r-
8(d)), as amended by section 7412(a), is amended--
(1) by adding at the end of paragraph (1) the following new
subparagraph:
``(C) In the case of a State that establishes a formulary
in accordance with paragraph (6), the State may exclude
coverage of a covered outpatient drug that is not included in
the formulary.''; and
(2) by inserting after paragraph (5) the following new
paragraph:
``(6) Requirements for formularies.--A State may establish
a formulary only if the following requirements are met:
``(A) The formulary is developed by a committee
consisting of physicians, pharmacists, and other
appropriate individuals appointed by the Governor of
the State or, at the option of the State, the State's
drug use review board established under subsection
(g)(3).
``(B) The formulary includes each covered
outpatient drug of a manufacturer which has entered
into and complies with an agreement under subsection
(a) unless the drug is contained in the list referred
to in paragraph (2) or excluded in accordance with
subparagraph (C).
``(C)(i) The committee may exclude a covered
outpatient drug with respect to the treatment of a
specific disease or condition for an identified
population (if any) only if the committee finds that
the excluded drug does not have a significant,
clinically meaningful therapeutic advantage in terms of
safety, effectiveness, or clinical outcome of such
treatment for such population over other drugs included
in the formulary.
``(ii) The committee's finding under clause (i)
shall be based on--
``(I) the drug's labeling, or
``(II) in the case of a drug the prescribed
use of which is not approved under the Federal
Food, Drug, and Cosmetic Act but is a medically
accepted indication, on information from the
appropriate compendia described in subsection
(k)(6).
``(D) With respect to a recommendation to exclude a
covered outpatient drug from the formulary or to
exclude a prescribed use of such a drug, the committee
issues a written explanation of its recommendation that
is available to the public.
``(E) The State plan permits coverage of a drug
excluded from the formulary pursuant to a prior
authorization program that is consistent with paragraph
(5) unless the drug is contained in the list referred
to in paragraph (2).
``(F) The formulary meets such other requirements
as the Secretary may impose.''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar quarters beginning on or after October 1, 1993,
without regard to whether or not regulations to carry out such
amendments have been promulgated by such date.
SEC. 7412. ELIMINATION OF SPECIAL EXEMPTION FROM PRIOR AUTHORIZATION
FOR NEW DRUGS.
(a) In General.--Section 1927(d) (42 U.S.C. 1396r-8(d)) is amended
by striking paragraph (6).
(b) Conforming Amendment.--(1) Section 1927(d)(1)(A) (42 U.S.C.
1396r-8(d)(1)(A)) is amended by striking ``Except as provided in
paragraph (6), a State'' and inserting ``A State''.
(2) Section 1927(d)(3) (42 U.S.C. 1396r-8(d)(3)) is amended by
striking ``(except with respect'' and all that follows through ``of
this paragraph)''.
(c) Effective Date.--The amendments made by this section shall
apply to calendar quarters beginning on or after October 1, 1993,
without regard to whether or not regulations to carry out such
amendments have been promulgated by such date.
SEC. 7413. MODIFICATIONS TO DRUG REBATE PROGRAM.
(a) Elimination of Additional Rebate Based on Weighted Average
Manufacturer Price.--Paragraph (2) of section 1927(c) (42 U.S.C. 1396r-
8(c)) is amended to read as follows:
``(2) Additional rebate for single source and innovator
multiple source drugs.--
``(A) In general.--The amount of the rebate for a
calendar quarter with respect to each dosage form and
strength of a single source drug or an innovator
multiple source drug, is increased by an amount equal
to the product of--
``(i) the total number of dosage units
dispensed after December 31, 1990, for which
payment was made under the State plan for the
period reported by the State under subsection
(b)(2), and
``(ii) the amount (if any) by which--
``(I) the average manufacturer
price for the dosage form and strength
of the drug for the period, exceeds
``(II) the average manufacturer
price for such dosage form and strength
for the calendar quarter beginning July
1, 1990, increased by the percentage by
which the average of the consumer price
indices for all urban consumers (U.S.
city average) for months during the
calendar quarter exceeds such index for
September 1990.
``(B) Special rule.--In the case of a covered
outpatient drug approved by the Food and Drug
Administration after October 1, 1990, subclause (II) of
subparagraph (A)(ii) shall be applied by substituting
`the first full calendar quarter after the drug was
marketed' for `the calendar quarter beginning July 1,
1990' and `the month prior to the first month of the
first full calendar quarter after the drug was
marketed' for `September 1990'.''.
(b) Base Date for Covered Outpatient Drug Sold or Transferred.--
Paragraph (2) of section 1927(c) (42 U.S.C. 1396r-8(c)), as amended by
subsection (a), is amended by adding at the end the following new
subparagraph:
``(C) Base date for covered outpatient drug sold or
transferred.--For purposes of computing the additional
rebate under this paragraph for any covered outpatient
drug that is sold or transferred to any entity,
including a division or subsidiary of a manufacturer,
the base date for such drug after such sale or transfer
shall be the original base date established for such
drug.''.
(c) Maximum Allowable Cost Limitations.--Section 1927 (42 U.S.C.
1396r-8) is amended by adding at the end the following new subsection:
``(l) Maximum Allowable Cost Limitations.--This section shall not
supersede or affect provisions in effect prior to January 1, 1991,
relating to maximum allowable cost limitations for payment by States
for covered outpatient drugs, and rebates under this section shall be
made without regard to whether or not payment by the State for such
drugs is subject to such limitations or the amount of such cost
limitations.''.
(d) Effective Dates.--(1) The amendments made by subsections (a)
and (c) shall be effective as if included in the enactment of section
4401 of OBRA-1990.
(2) The amendment made by subsection (b) shall be effective on the
date of the enactment of this Act.
Subpart C--Restrictions on Divestiture of Assets and Estate Recovery
SEC. 7421. MEDICAID ESTATE RECOVERIES.
(a) Mandate To Seek Recovery.--The matter preceding subparagraph
(A) of section 1917(b)(1) (42 U.S.C. 1396p(b)(1)) is amended to read as
follows: ``The State agency shall seek adjustment or recovery of any
medical assistance correctly paid on behalf of an individual under the
State plan--''.
(b) Hardship Waiver.--Section 1917(b) (42 U.S.C. 1396p(b)) is
amended by adding at the end the following new paragraph:
``(3) The State agency shall establish procedures (in accordance
with standards specified by the Secretary) under which the agency shall
waive the application of this subsection if such application would work
an undue hardship as determined on the basis of criteria established by
the Secretary.''.
(c) Definition of Estate.--Section 1917(b) (42 U.S.C. 1396p(b)), as
amended by subsection (b), is amended by adding at the end the
following new paragraph:
``(4) Definition.--For purposes of this section, the term `estate',
with respect to a deceased individual--
``(A) shall include all real and personal property and
other assets included within the individual's estate, as
defined for purposes of State law with respect to inheritance,
and
``(B) may include, at the option of the State, any or all
other real or personal property or other assets in which the
individual had any legal title or interest at the time of
death, including such assets conveyed to a survivor, heir, or
assign of the deceased individual through joint tenancy,
tenancy in common, survivorship, life estate, living trust, or
other arrangement.''.
(d) Effective Date.--(1)(A) Except as provided in subparagraph (B),
the amendments made by this section shall apply to payments under title
XIX of the Social Security Act for calendar quarters beginning on or
after October 1, 1993.
(B) In the case of a State plan for medical assistance under title
XIX of the Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirements imposed by the amendments made by this section, the State
plan shall not be regarded as failing to comply with the requirements
imposed by such amendments solely on the basis of its failure to meet
these additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
(2) The amendments made by this section shall not apply to
individuals who died before October 1, 1993.
SEC. 7422. TRANSFERS OF ASSETS.
(a) Mandatory and Optional Periods of Ineligibility.--Section
1917(c) (42 U.S.C. 1396p(c)) is amended--
(1) by amending paragraph (1) to read as follows:
``(1)(A) In order to meet the requirements of this subsection for
purposes of section 1902(a)(18), the State plan shall provide that any
institutionalized individual (or the spouse of such individual) who
disposes of assets for less than fair market value on the date
specified in subparagraph (B)(ii), or at any time thereafter during
such individual's lifetime, is ineligible for medical assistance for--
``(i) nursing facility services,
``(ii) a level of care in any institution equivalent to
that of nursing facility services, and
``(iii) home or community-based services under subsection
(c) or (d) of section 1915,
during any and all applicable periods specified in paragraph (2).
``(B)(i) The date specified in this clause, with respect to an
institutionalized individual, is the first date as of which the
individual--
``(I) is an institutionalized individual, and
``(II) has applied for or is receiving medical assistance
under the State plan.
``(ii) The date specified in this clause, with respect to an
institutionalized individual, is the date 30 months before the date
specified in clause (i) (or, at the option of the State, such earlier
date as provided by the State in accordance with paragraph
(3)(A)(iii)).'';
(2) by redesignating paragraphs (2) through (5) as
paragraphs (4) through (7) and by inserting after paragraph (1)
the following new paragraphs:
``(2) The period of ineligibility required under paragraph (1) with
respect to an institutionalized individual--
``(A) shall be a number of months equal to--
``(i) the total uncompensated value of all assets
transferred by the individual or the individual's
spouse on or after the date specified in paragraph
(1)(B)(ii), divided by
``(ii) the average cost to a private patient of
nursing facility services in the State (or, at the
option of the State, in the community in which the
individual is institutionalized) on the date specified
in paragraph (1)(B)(i) based on costs which include the
cost of services included in the State's nursing
facility reimbursement rate; and
``(B) shall begin with the first month in which--
``(i) the individual--
``(I) is an institutionalized individual,
``(II) is (or but for the provisions of
this subsection would be) entitled to have
medical assistance paid under the State plan
for services specified under paragraph (1), and
``(III) is receiving or is an applicant for
such medical assistance, and
``(ii) the State has become aware that assets have
been transferred.
``(3)(A) The State plan may include, in accordance with this
paragraph, any or all of the following provisions concerning
eligibility for medical assistance of individuals who (or whose
spouses) dispose of assets for less than fair market value:
``(i) The State plan may provide for periods of
ineligibility for medical assistance for long-term care
services specified by the State and approved by the Secretary
for any or all individuals (or groups of individuals) otherwise
eligible for such medical assistance, in addition to the
individuals specified in paragraph (1).
``(ii) Subject to such restrictions as the Secretary may
impose, the State plan may provide for periods of ineligibility
for medical assistance for any long-term care services (in
addition to the services specified in paragraph (1)(A)) for
which medical assistance is otherwise available under the plan.
``(iii) The State plan may provide for a date on and after
which transfers of assets are subject to review earlier than
the date specified in paragraph (1)(B)(ii), but not earlier
than 4 years before--
``(I) in the case of an institutionalized
individual, the date specified in paragraph (1)(B)(i),
or
``(II) in the case of any other individual, the
date on which the individual applied for medical
assistance under the State plan.
``(B)(i) The period of ineligibility imposed by the State pursuant
to this paragraph for services other than those specified in paragraph
(1)(A) shall not be longer than the period of ineligibility that would
have resulted if the individual had expended the assets transferred for
the costs of medical care furnished on and after the date the
individual applied for medical assistance, as determined by the State
in accordance with clause (ii).
``(ii) In determining the period of ineligibility of an individual
pursuant to clause (i), the State--
``(I) may presume that the individual's cost of medical
care furnished is equal to the average cost to a private
patient for such care on a daily, monthly, or other basis, or
``(II) may use any other method approved by the
Secretary.'';
(3) in paragraph (4), as redesignated--
(A) by amending subparagraph (B) to read as
follows:
``(B) the resources--
``(i) were transferred to the individual's spouse
or to another for the sole benefit of the individual's
spouse and did not exceed the amount permitted under
section 1924(f)(1);
``(ii) were transferred from the individual's
spouse to another for the sole benefit of the
individual's spouse and did not exceed the amount
permitted under section 1924(f)(1); or
``(iii) were transferred to the individual's child
described in subparagraph (A)(ii)(II);'';
(B) in subparagraph (C)--
(i) by striking ``any'';
(ii) by striking ``or (ii)'' and inserting
``(ii)''; and
(iii) by striking ``; or'' and inserting
``, or (iii) all assets transferred by an
individual for less than fair market value have
been returned to the individual;'';
(C) by amending subparagraph (D) to read as
follows:
``(D) the State determines (in accordance with regulations
promulgated by the Secretary) that denial of eligibility would
work an undue hardship; or'';
(D) by adding at the end the following new
subparagraph:
``(E) the State determines that the total fair market value
of all of the assets transferred by the individual during the
period between the date specified in paragraph (1)(B)(i) and
the date specified by the State under paragraph (1)(B)(ii) are
below an amount determined appropriate by the State and
approved by the Secretary.''; and
(E) by adding at the end the following flush
sentence:
``In determining whether an individual has made a satisfactory showing
to the State under subparagraph (C)(ii), the State shall consider the
individual's health status at the time of the transfer of assets and
whether, at the time of such transfer, the individual retained assets
sufficient to meet the individual's foreseeable future health care
needs based on such health status.'';
(4) by striking paragraph (5), as redesignated, and
inserting the following:
``(5) For purposes of this subsection, in the case of an asset held
by an individual in common with another person or persons in a joint
tenancy, tenancy in common, or similar arrangement, the asset (or the
affected portion of such asset) shall be considered to be transferred
by such individual when any action is taken, either by such individual
or by any other person, that reduces or eliminates such individual's
ownership or control of such asset, except to the extent an action
taken by a person other than the individual is an action consistent
with partial ownership of the asset, as provided in regulations issued
by the Secretary.'';
(5) by adding the following at the end of paragraph (6), as
redesignated: ``In the case of a transfer by the spouse of an
institutionalized individual which results in a period of
ineligibility for medical assistance under a State plan for the
institutionalized individual, a State shall apply a reasonable
methodology to transfer all or a portion of any such period of
ineligibility to such spouse if the spouse becomes an
institutionalized individual.''; and
(6) by amending paragraph (7), as redesignated, to read as
follows:
``(7) For purposes of this subsection:
``(A) The term `assets', with respect to an individual,
includes all income and resources of the individual and of the
individual's spouse, including any income or resources which
the individual or such individual's spouse is entitled to but
does not receive because of action--
``(i) by the individual or such individual's
spouse,
``(ii) by a person, including a court or
administrative body, with legal authority to act in
place of or on behalf of the individual or such
individual's spouse, or
``(iii) by any person, including any court or
administrative body, acting at the direction or upon
the request of the individual or such individual's
spouse.
``(B) The term `income' has the meaning given such term in
section 1612.
``(C) The term `resources' has the meaning given such term
in section 1613, without regard (in the case of an
institutionalized individual) to the exclusion described in
subsection (a)(1) of such section.
``(D) The term `institutionalized individual' means, and
the term `individual is institutionalized' refers to, an
individual receiving any of the services specified in paragraph
(1)(A).''.
(b) Conforming Amendments.--(1) Section 1902(a)(51) (42 U.S.C.
1396a(a)(51)) is amended--
(A) by striking ``(A)''; and
(B) by striking ``, and (B)'' and all that follows and
inserting a semicolon.
(2) Section 1924(f)(1) (42 U.S.C. 1396r-5(f)(1)) is amended by
striking ``transfer an amount'' and inserting ``transfer an amount
sufficient to make the resources of the community spouse''.
(c) Requirements for Nursing Facilities.--
(1) Medicaid program.--Section 1919(c)(5)(A)(i) (42 U.S.C.
1396r(c)(5)(A)(i)) is amended by striking ``and (III)'' and
inserting ``(III) not require individuals applying to reside or
residing in the facility, or family members of such
individuals, to provide any financial information other than to
identify the source of payment for such individual's stay in
the facility, and (IV)''.
(2) Medicare program.--Section 1819(c)(5)(A)(i) (42 U.S.C.
1395i-3(c)(5)(A)(i)) is amended by striking ``and (III)'' and
inserting ``(III) not require individuals applying to reside or
residing in the facility, or family members of such
individuals, to provide any financial information other than to
identify the source of payment for such individual's stay in
the facility, and (IV)''.
(d) Effective Date.--(1)(A) Except as provided in subparagraph (B),
the amendments made by this section shall apply to calendar quarters
beginning on or after October 1, 1993.
(B) In the case of a State plan for medical assistance under title
XIX of the Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirements imposed by the amendments made by this section, the State
plan shall not be regarded as failing to comply with the requirements
imposed by such amendments solely on the basis of its failure to meet
these additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
(2) The amendments made by this section shall not apply with
respect to assets disposed of before the date which is 60 days after
the date of the enactment of this Act.
SEC. 7423. TREATMENT OF CERTAIN TRUSTS.
(a) In General.--Section 1917 (42 U.S.C. 1396p) is amended by
adding at the end the following:
``(d)(1) For purposes of determining an individual's eligibility
for, or amount of, benefits under a State plan under this title, the
following rules shall apply to a trust established by such individual:
``(A) In the case of a revocable trust--
``(i) the corpus of the trust shall be considered
resources available to the individual,
``(ii) payments from the trust to or for the
benefit of the individual shall be considered income of
the individual, and
``(iii) any other payments from the trust shall be
considered a transfer of assets by the individual
subject to subsection (c).
``(B) In the case of an irrevocable trust--
``(i) the portion of the corpus from which, or the
income on the corpus from which, payment to the
individual could be made shall be considered resources
available to the individual, and payments from that
portion of the corpus or income--
``(I) to or for the benefit of the
individual, shall be considered income of the
individual, and
``(II) for any other purpose, shall be
considered a transfer of assets by the
individual subject to subsection (c); and
``(ii) any portion of the trust from which, or any
income on the corpus from which, no payment could under
any circumstances be made to the individual shall be
considered, as of the date of establishment of the
trust (or, if later, the date on which payment to the
individual was foreclosed) a transfer of assets by the
individual subject to subsection (c), and payments from
such portion of the trust after such date shall be
disregarded.
``(2)(A) For purposes of this subsection, an individual shall be
considered to have established a trust if--
``(i) any of the following individuals established such
trust other than by will:
``(I) the individual,
``(II) the individual's spouse,
``(III) a person, including a court or
administrative body, with legal authority to act in
place of or on behalf of the individual or the
individual's spouse, or
``(IV) a person, including any court or
administrative body, acting at the direction or upon
the request of the individual or the individual's
spouse; and
``(ii) assets of the individual were used to form all or
part of the corpus of the trust.
``(B) In the case of a trust the corpus of which includes assets of
an individual (as determined under subparagraph (A)) and assets of any
other person or persons, the provisions of this subsection shall apply
to the portion of the trust attributable to the assets of the
individual.
``(3) This subsection shall apply without regard to--
``(A) the purposes for which a trust is established,
``(B) whether the trustees have or exercise any discretion
under the trust,
``(C) any restrictions on when or whether distributions may
be made from the trust, or
``(D) any restrictions on the use of distributions from the
trust.
``(4)(A) This subsection shall not apply to any of the following
trusts:
``(i) A trust containing the assets of a disabled
individual (as determined under section 1614(a)(3)) established
for the benefit of such individual by a parent, grandparent,
legal guardian of the individual, or a court if the State will
receive all amounts remaining in the trust upon the death of
such individual up to an amount equal to the total medical
assistance received by the individual under a State plan under
this title.
``(ii) A trust established in a State for the benefit of an
individual if--
``(I) the trust is composed only of pension, Social
Security, and other income to the individual (and
accumulated income in the trust),
``(II) the State will receive all amounts remaining
in the trust upon the death of such individual up to an
amount equal to the total medical assistance received
by the individual under a State plan under this title,
and
``(III) the State makes medical assistance
available to individuals described in section
1902(a)(10)(A)(ii)(V), but does not make such
assistance available to individuals for nursing
facility services under section 1902(a)(10)(C).
``(B) For purposes of this subsection, the term `trust' includes
any legal instrument or device that is similar to a trust but includes
an annuity only to such extent and in such manner as the Secretary
specifies.
``(C) The State agency shall establish procedures (in accordance
with standards specified by the Secretary) under which the agency
waives the application of this subsection with respect to an individual
if the individual establishes that such application would work an undue
hardship on the individual as determined on the basis of criteria
established by the Secretary.
``(5) For purposes of this subsection, the terms `assets',
`income', and `resources' shall have the meaning given to such terms
under subsection (c)(7).''.
(b) Conforming Amendments.--(1) Section 1902(a)(18) (42 U.S.C.
1396a(a)(18)) is amended by striking ``and transfers of assets'' and
inserting ``, transfers of assets, and treatment of certain trusts''.
(2) Section 1902 (42 U.S.C. 1396a) is amended by repealing
subsection (k).
(c) Effective Date.--(1)(A) Except as provided in subparagraph (B),
the amendments made by this section shall apply to payments under title
XIX of the Social Security Act for calendar quarters beginning on or
after October 1, 1993.
(B) In the case of a State plan for medical assistance under title
XIX of the Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirements imposed by the amendments made by this section, the State
plan shall not be regarded as failing to comply with the requirements
imposed by such amendments solely on the basis of its failure to meet
these additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
(2) The amendments made by this section shall not apply with
respect to trusts established before the date which is 60 days after
the date of the enactment of this Act.
Subpart D--Improvement in Identification and Collection of Third Party
Payments
SEC. 7431. LIABILITY OF THIRD PARTIES TO PAY FOR CARE AND SERVICES.
(a) Liability of ERISA Plans.--(1) Section 1902(a)(25)(A) (42
U.S.C. 1396a(a)(25)(A)) is amended by striking ``insurers)'' and
inserting ``insurers, group health plans (as defined in section 607(1)
of the Employee Retirement Income Security Act of 1974), service
benefit plans, and health maintenance organizations)''.
(2) Section 1903(o) (42 U.S.C. 1396b(o)) is amended by striking
``regulation)'' and inserting ``regulation and including a group health
plan (as defined in section 607(1) of the Employee Retirement Income
Security Act of 1974)), a service benefit plan, and a health
maintenance organization''.
(b) Requiring State To Prohibit Insurers From Taking Medicaid
Status Into Account.--Section 1902(a)(25) (42 U.S.C. 1396a(a)(25)) is
amended--
(1) by striking ``and'' at the end of subparagraph (F);
(2) by adding ``and'' at the end of subparagraph (G); and
(3) by adding after subparagraph (G) the following new
subparagraph:
``(H) assurances satisfactory to the Secretary that
the State has in effect laws which prohibit any health
insurer (including a group health plan, as defined in
section 607(1) of the Employee Retirement Income
Security Act of 1974, a service benefit plan, and a
health maintenance organization), in enrolling an
individual or in making any payments for benefits to
the individual or on the individual's behalf, from
taking into account that the individual is eligible for
or is provided medical assistance under a plan under
this title for such State, or any other State;''.
(c) State Right to Third Party Payments for Recipient.--Section
1902(a)(25) (42 U.S.C. 1396a(a)(25)), as amended by subsection (b), is
amended--
(1) by striking ``and'' at the end of subparagraph (G);
(2) by adding ``and'' at the end of subparagraph (H); and
(3) by adding after subparagraph (H) the following new
subparagraph:
``(I) assurances satisfactory to the Secretary that
the State has in effect laws under which, to the extent
that payment has been made under the State plan for
medical assistance for health care items or services
furnished to an individual, the State is considered to
have acquired the rights of such individual to payment
by any other party for such health care items or
services;''.
(d) Effective Date.--(1) Except as provided in paragraph (2), the
amendments made by subsections (a)(1), (b), and (c) shall apply to
calendar quarters beginning on or after October 1, 1993, without regard
to whether or not final regulations to carry out such amendments have
been promulgated by such date.
(2) In the case of a State plan for medical assistance under title
XIX of the Social Security Act which the Secretary of Health and Human
Services determines requires State legislation (other than legislation
appropriating funds) in order for the plan to meet the additional
requirements imposed by the amendments made by subsections (a) and (b),
the State plan shall not be regarded as failing to comply with the
requirements of such title solely on the basis of its failure to meet
these additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of the enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
(3) The amendment made by subsection (a)(2) shall apply to items
and services furnished on or after October 1, 1993.
SEC. 7432. MEDICAL CHILD SUPPORT.
(a) State Plan Requirement.--Section 1902(a) (42 U.S.C. 1396a(a)),
as amended by subsection (c), is amended--
(1) by striking ``and'' at the end of paragraph (58);
(2) by striking the period at the end of paragraph (59) and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(60) provide that the State agency shall provide
assurances satisfactory to the Secretary that the State has in
effect the laws relating to medical child support required
under section 1908.''.
(b) Medical Child Support Laws.--Title XIX (42 U.S.C 1936 et seq.)
is amended by inserting after section 1907 the following new section:
``required laws relating to medical child support
``Sec. 1908. (a) In General.--The laws relating to medical child
support, which a State is required to have in effect under section
1902(a)(60), are as follows:
``(1) A law that prohibits an insurer from denying
enrollment of a child under the health coverage of the child's
parent on the ground that--
``(A) the child was born out of wedlock,
``(B) the child is not claimed as a dependent on
the parent's Federal income tax return, or
``(C) the child does not reside with the parent or
in the insurer's service area.
``(2) In any case in which a parent is required by a court
or administrative order to provide health coverage for a child
and the parent is eligible for family health coverage through
an insurer, a law that requires such insurer--
``(A) to permit such parent to enroll under such
family coverage any such child who is otherwise
eligible for such coverage (without regard to any
enrollment season restrictions and subject to the
requirements under paragraph (1)); and
``(B) if such a parent fails to provide such health
insurance coverage for any such child, to enroll such
child under such family coverage upon application by
the child's other parent or by the State agency
administering the program under this title or part D of
title IV.
``(3) In any case in which a parent is required by a court
or administrative order to provide health coverage for a child
and the parent is eligible for family health coverage through
an employer doing business in the State, a law that requires
such employer--
``(A) to permit such parent to enroll under such
family coverage any such child who is otherwise
eligible for such coverage (without regard to any
enrollment season restrictions and subject to the
requirements under paragraph (1));
``(B) if such a parent fails to provide such health
insurance coverage for a child, to enroll such child
under such family coverage upon application by the
child's other parent or by the State agency
administering the program under this title or part D of
title IV;
``(C) not to disenroll (or eliminate coverage of)
any such child unless the employer is provided
satisfactory written evidence that--
``(i) such court or administrative order is
no longer in effect, or
``(ii) the child is or will be enrolled in
comparable health coverage which will take
effect not later than the effective date of
such disenrollment; and
``(D) to withhold from such employee's compensation
the employee's share (if any) of premiums for health
coverage and to pay such share of premiums to the
insurer.
``(4) A law that prohibits an insurer from imposing
requirements on a State agency, which has been assigned the
rights of an individual eligible for medical assistance under
this title and covered for health benefits from the insurer,
that are different from requirements applicable to an agent or
assignee of any other individual so covered.
``(5) A law that requires an insurer, in any case in which
a child has health coverage through the insurer of a
noncustodial parent--
``(A) to provide such information to the custodial
parent as may be necessary for the child to obtain
benefits through such coverage;
``(B) to permit the custodial parent (or provider,
with the custodial parent's approval) to submit claims
for covered services without the approval of the
noncustodial parent; and
``(C) to make payment on claims submitted in
accordance with subparagraph (B) directly to such
custodial parent, the provider, or the State agency.
``(6) A law that permits the State agency under this title
to garnish the wages, salary, or other employment income of,
and requires withholding amounts from State tax refunds to, any
person who--
``(A) is required by court or administrative order
to provide coverage of the costs of health services to
a child who is eligible for medical assistance under
this title,
``(B) has received payment from a third party for
the costs of such services to such child, but
``(C) has not used such payments to reimburse, as
appropriate, either the other parent or guardian of
such child or the provider of such services,
to the extent necessary to reimburse the State agency for
expenditures for such costs under its plan under this title,
but any claims for current or past-due child support shall take
priority over any such claims for the costs of such services.
``(b) Special Rule.--The Secretary may provide by regulation for
such exceptions to the requirement under subsection (a)(3) as the
Secretary determines necessary to ensure compliance with the conditions
of any order referred to in such subsection or with the maximum amounts
permitted to be withheld under section 303(b) of the Consumer Credit
Protection Act.
``(c) Definition.--For purposes of this subsection, the term
`insurer' includes a group health plan, as defined in section 607(1) of
the Employee Retirement Income Security Act of 1974, a health
maintenance organization, and an entity offering a service benefit
plan.''.
(c) Redesignations to Paragraphs Added by OBRA-1990.--Section
1902(a) (42 U.S.C. 1396a(a)) is amended--
(1) by striking ``and'' at the end of paragraph (54);
(2) in the paragraph (55) inserted by section 4602(a)(3) of
OBRA-1990, by striking the period at the end and inserting a
semicolon;
(3) by redesignating the paragraph (55) inserted by section
4604(b)(3) of OBRA-1990 as paragraph (56), by transferring and
inserting it after the paragraph (55) inserted by section
4602(a)(3) of such Act, and by striking the period at the end
and inserting a semicolon;
(4) by placing paragraphs (57) and (58), inserted by
section 4751(a)(1)(C) of OBRA-1990, immediately after paragraph
(56), as redesignated by paragraph (3);
(5) in the paragraph (58) inserted by section 4751(a)(1)(C)
of OBRA-1990, by striking the period at the end and inserting
``; and''; and
(6) by redesignating the paragraph (58) inserted by section
4752(c)(1)(C) of OBRA-1990 as paragraph (59) and by
transferring and inserting it after the paragraph (58) inserted
by section 4751(a)(1)(C) of such Act.
(d) Effective Date.--(1) Except as provided in paragraph (2), the
amendments made by this section apply to calendar quarters beginning on
or after April 1, 1994.
(2) In the case of a State plan under title XIX of the Social
Security Act which the Secretary of Health and Human Services
determines requires State legislation in order for the plan to meet the
additional requirements imposed by the amendments made by this section,
the State plan shall not be regarded as failing to comply with the
requirements of such title solely on the basis of its failure to meet
these additional requirements before the first day of the first
calendar quarter beginning after the close of the first regular session
of the State legislature that begins after the date of enactment of
this Act. For purposes of the preceding sentence, in the case of a
State that has a 2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the State
legislature.
SEC. 7433. OFFSET OF PAYMENT OBLIGATIONS RELATING TO MEDICAL ASSISTANCE
AGAINST OVERPAYMENTS OF STATE AND FEDERAL INCOME TAXES.
(a) Amendments to the Internal Revenue Code of 1986.--
(1) In general.--Section 6402 of the Internal Revenue Code
of 1986 is amended--
(A) by redesignating subsections (e), (f), (g),
(h), and (i) as subsections (f), (g), (h), (i), and
(j), respectively; and
(B) by adding after subsection (d) the following
new subsection:
``(e) Collection of Certain Debts Owed to States.--
``(1) In general.--Upon receiving notice from any State
under section 1931(b)(1) of the Social Security Act that a
named person owes a legally enforceable debt for any payment
obligation relating to medical assistance, the Secretary
shall--
``(A) reduce the amount of any overpayment payable
to such person by the amount of such debt;
``(B) pay the amount by which such overpayment is
reduced under subparagraph (A) to such State; and
``(C) notify the person making such overpayment
that such overpayment has been reduced by an amount
necessary to satisfy such debt.
``(2) Priorities for offset.--Any overpayment by a person
shall be reduced pursuant to this subsection after such
overpayment is reduced pursuant to subsections (c) and (d) and
before such overpayment is credited to the future liability for
tax of such person pursuant to subsection (b). Any overpayment
by a person shall be applied against any debts described in
paragraph (1) in the order in which such debts accrued.
``(3) Notice; protection of other persons filing joint
return.--For purposes of this subsection, rules similar to the
rules described in clause (i) and the first sentence of clause
(ii) of subsection (d)(3)(B) shall apply.
``(4) Definition.--For purposes of this subsection, the
term `medical assistance' means medical assistance provided
under title XIX of the Social Security Act.''.
(2) Conforming amendment.--Section 6402(f) of the Internal
Revenue Code of 1986, as redesignated, is amended by striking
``(c) or (d)'' and inserting ``(c), (d), or (e)''.
(3) Effective date.--The amendments made by this subsection
shall be effective for taxable years beginning after December
31, 1993.
(b) Amendments to the Social Security Act.--
(1) State plan amendment.--Section 1902(a) (42 U.S.C.
1396a(a)), as amended by section 7432, is amended--
(A) by striking ``and'' at the end of paragraph
(59);
(B) by striking the period at the end of paragraph
(60) and inserting ``; and''; and
(C) by adding at the end the following new
paragraph:
``(61) provide that recovery of any legally enforceable
debt for any payment obligation relating to medical assistance
provided under this title shall be made in accordance with a
program for the collection of such debt from State and Federal
tax refunds in accordance with section 1931.''.
(2) Program for collections from state and federal tax
refunds.--Title XIX (42 U.S.C 1936 et seq.) is amended by
adding at the end the following new section:
``collection of payment obligations relating to medical assistance from
state and federal tax refunds
``Sec. 1931. (a) State Tax Refunds.--If a State with a State plan
approved under this title has a State income tax system, such State
shall require the State agency administering the State plan and the
State agency responsible for administering the States income tax system
to develop and implement a program under which any person determined
appropriate by the State agency administering the State plan who owes a
legally enforceable debt for any payment obligation relating to medical
assistance provided under this title will have withheld an appropriate
amount from any refund otherwise payable to such person under the State
income tax system.
``(b) Federal Tax Refunds.--
``(1) Notice to the secretary of the treasury.--
``(A) In general.--If a State with a State plan
approved under this title--
``(i) implements a program described in
subsection (a), or
``(ii) is a State that does not have a
State income tax system,
the State agency administering such plan may provide a
notice to the Secretary of the Treasury regarding any
person determined appropriate by such State agency who
owes a legally enforceable debt for any payment
obligation relating to medical assistance provided
under this title and the Secretary of the Treasury
shall withhold an appropriate amount from any refund
otherwise payable to such person in accordance with
section 6402(e) of the Internal Revenue Code of 1986
(hereafter in this section referred to as the `Code').
``(B) Regulations relating to notices.--The
Secretary of the Treasury shall issue regulations,
after consultation with the Secretary, which--
``(i) prescribe the timing by which State
agencies may submit notices of payment
obligations relating to medical assistance,
``(ii) specify the manner in which such
notices must be submitted,
``(iii) specify the necessary information
that must be contained in or accompany such
notices,
``(iv) specify the minimum payment
obligation relating to medical assistance to
which the offset procedures may be applied,
``(v) specify the fee that a State must pay
to reimburse the Secretary of the Treasury for
the full cost of applying the offset procedure,
and
``(vi) provide that the Secretary of the
Treasury will advise the Secretary, not less
frequently than annually, of the States which
have furnished notices under this subsection,
the number of cases in each State with respect
to which such notices have been furnished, the
total amount of payment obligations sought to
be collected under this subsection by each
State, and the amount of such collections
actually made in the case of each State.
``(2) Notice.--Prior to notifying the Secretary of the
Treasury under paragraph (1), the State agency shall send a
notice to the person owing the legally enforceable debt for a
payment obligation relating to medical assistance provided
under this title which--
``(A) explains that a withholding may be made under
6402(e) of the Code from any refund otherwise payable
to such person,
``(B) instructs the person having the payment
obligation of the steps which may be taken to contest
the State's determination that such payment obligation
is owed or the amount of the payment obligation, and
``(C) provides information with respect to
procedures to be followed, in the case of a joint
return, to protect the share of the refund which may be
payable to another person.
``(3) Excess withholding.--In any case in which an amount
was withheld under section 6402(e) of the Code and the State
subsequently determines that the amount certified as owing with
respect to medical assistance was in excess of the amount
actually owed at the time the amount withheld is distributed to
the State, the State shall pay the excess amount withheld to
the named person determined to have the payment obligation (or,
in the case of amounts withheld on the basis of a joint return,
jointly to the parties filing such return).''.
(3) Effective date.--
(A) In general.--The amendments made by this
paragraph shall apply to calendar quarters beginning on
or after December 31, 1993.
(B) Special rule.--In the case of a State which the
Secretary determines requires State legislation (other
than legislation authorizing or appropriating funds) in
order to comply with the amendments made by
subparagraph (A), the State shall not be regarded as
failing to comply with such amendments solely on the
basis of its failure to meet the requirements of such
amendments before the first day of the first calendar
quarter beginning after the close of the first regular
session of the State legislature that begins after the
date of the enactment of this Act. For purposes of the
preceding sentence, in the case of a State that has a
2-year legislative session, each year of such session
shall be deemed to be a separate regular session of the
State legislature.
Subpart E--Assuring Proper Payments to Disproportionate Share Hospitals
SEC. 7441. ASSURING PROPER PAYMENTS TO DISPROPORTIONATE SHARE
HOSPITALS.
(a) Disproportionate Share Hospitals Required To Provide Minimum
Level of Services to Medicaid Patients.--Section 1923 (42 U.S.C. 1396r-
4) is amended--
(1) in subsection (a)(1)(A), by striking ``requirement''
and inserting ``requirements'';
(2) in subsection (b)(1), by striking ``requirement'' and
inserting ``requirements'';
(3) in the heading to subsection (d), by striking
``Requirement'' and inserting ``Requirements'';
(4) by adding at the end of subsection (d) the following
new paragraph:
``(3) No hospital may be defined or deemed as a
disproportionate share hospital under a State plan under this
title or under subsection (b) or (e) of this section unless the
hospital has a medicaid inpatient utilization rate (as defined
in subsection (b)(2)) of not less than 1 percent.'';
(5) in subsection (e)(1)--
(A) by striking ``and'' before ``(B)'', and
(B) by inserting before the period at the end the
following: ``, and (C) the plan meets the requirement
of subsection (d)(3) and such payment adjustments are
made consistent with the fourth sentence of subsection
(c)''; and
(6) in subsection (e)(2)--
(A) in subparagraph (A), by inserting ``(other than
the fourth sentence of subsection (c))'' after ``(c)'',
(B) by striking ``and'' at the end of subparagraph
(A),
(C) by striking the period at the end of
subparagraph (B) and inserting ``, and'', and
(D) by adding at the end the following new
subparagraph:
``(C) subsection (d)(3) shall apply.''.
(b) Limiting Amount of Payment Adjustments for State or County
Hospitals to Uncovered Costs.--Subsection (c) of section 1923 (42
U.S.C. 1396r-4) is amended by adding at the end the following: ``A
payment adjustment during a year is not considered to be consistent
with this subsection with respect to a hospital owned or operated by a
State (or by an instrumentality of, or a unit of government within, a
State) if the payment adjustment exceeds the costs incurred during the
year of furnishing hospital services (as determined by the Secretary
and net of payments under this title, other than under this section,
and by uninsured patients) by the hospital to individuals who either
are eligible for medical assistance under the State plan or have no
health insurance (or other source of third party coverage) for services
provided during the year. For purposes of the preceding sentence,
payments made to a hospital for services provided to indigent patients
made by a State or a unit of local government within a State shall not
be considered to be a source of third party payment.''.
(c) Effective Date.--The amendments made by this section shall
apply to payments to States under section 1903(a) of the Social
Security Act which are for payments to hospitals made under State plans
after the end of the State fiscal year that ends during 1995.
Subpart F--Anti-Fraud and Abuse Provisions
SEC. 7451. APPLICATION OF MEDICARE RULES LIMITING CERTAIN PHYSICIAN
REFERRALS.
(a) In General.--Section 1903(i) (42 U.S.C. 1396b(i)), as amended
by subsection (b), is amended--
(1) in paragraph (12), by striking ``or'' at the end,
(2) in paragraph (13), by striking the period at the end
and inserting ``; or'', and
(3) by inserting after paragraph (13) the following new
paragraph:
``(14) with respect to any amount expended for an item or
service for which payment would be denied under section
1877(g)(1) if the item or service were furnished to an
individual entitled to benefits under title XVIII.''.
(b) Redesignations.--Section 1903(i) (42 U.S.C. 1396b(i)), as
amended by section 2(b)(2) of the Medicaid Voluntary Contribution and
Provider-Specific Tax Amendments of 1991, is amended--
(1) by redesignating the paragraph (12) inserted by section
4752(a)(2) of OBRA-1990 as paragraph (11), by transferring and
inserting it after the paragraph (10) inserted by section
4401(a)(1)(B) of OBRA-1990, and by striking the period at the
end and inserting a semicolon;
(2) by redesignating the paragraph (14) inserted by section
4752(e) of OBRA-1990 as paragraph (12), by transferring and
inserting it after paragraph (11), as redesignated by paragraph
(2), and by striking the period at the end and inserting ``;
or''; and
(3) by redesignating the paragraph (11) inserted by section
4801(e)(16)(A) of OBRA-1990 as paragraph (13) and by
transferring and inserting it after paragraph (12), as
redesignated by paragraph (3), and by striking ``; or'' and
inserting a period.
(c) Effective Date.--The amendment made by subsection (a) shall
apply to items and services furnished on or after October 1, 1993.
PART II--OTHER MEDICAID PROVISIONS
SEC. 7501. EXTENSION OF DEMONSTRATION PROJECT ON THE EFFECT OF ALLOWING
STATES TO EXTEND MEDICAID COVERAGE TO CERTAIN LOW-INCOME
FAMILIES.
(a) In General.--Section 4745 of OBRA-1990 is amended--
(1) in paragraph (1) of subsection (e), by striking
``$12,000,000 in each of fiscal years 1991, 1992, and 1993, and
to no more than $4,000,000 in fiscal year 1994'' and inserting
``$40,000,000''; and
(2) in paragraph (2) of subsection (f) by striking
``January 1, 1995'' and inserting ``one year after the
termination of the projects''.
(b) Effective Date.--The amendments made by paragraph (1) shall
take effect as if included in the enactment of OBRA-1990.
Subtitle C--Income Security Programs
SEC. 7601. MATCHING OF STATE ADMINISTRATIVE COSTS.
(a) AFDC Matching.--Section 403(a)(3) (42 U.S.C. 603(a)(3)) is
amended to read as follows:
``(3) in the case of any State, 50 percent of the total
amounts expended during such quarter as found necessary by the
Secretary for the proper and efficient administration of the
State plan, except that no payment shall be made with respect
to amounts expended in connection with the provision of any
service described in section 2002(a) of this Act other than
services furnished pursuant to section 402(g); and''.
(b) Territorial Programs for Aged, Blind, and Disabled.--Sections
3(a)(4), 1003(a)(3), 1403(a)(3), and 1603(a)(4) (42 U.S.C. 303(a)(3),
1203(a)(3), 1353(a)(3), and 1383 note) (as in effect as provided by
section 303 of the Social Security Amendments of 1972) are each amended
by striking ``the sum of'' and all that follows and inserting ``50
percent of the total amounts expended during such quarter as found
necessary by the Secretary for the proper and efficient administration
of the State plan.''.
(c) Requirements for Attesting to Citizenship Status.--Paragraph
(1)(A) of section 1137(d) (42 U.S.C. 1320b-7(d)) is amended to read as
follows:
``(1)(A) The State shall require, as a condition of an
individual's eligibility for benefits under a program listed in
subsection (b), a declaration in writing, under penalty of
perjury--
``(i) by the individual,
``(ii) in the case in which eligibility for program
benefits is determined on a family or household basis,
by any adult member of such individual's family or
household (as applicable), or
``(iii) in the case of an individual born into a
family or household receiving benefits under such
program, by any adult member of such family or
household no later than the next redetermination of
eligibility of such family or household following the
birth of such individual,
stating whether the individual is a citizen or national of the
United States, and, if that individual is not a citizen or
national of the United States, that the individual is in a
satisfactory immigration status.''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by--
(A) subsections (a) and (b) shall be effective with
respect to calendar quarters beginning on or after
April 1, 1994, and
(B) subsection (c) shall be effective on and after
the date of the enactment of this Act.
(2) Special rule.--In the case of a State whose legislature
meets biennially, and does not have a regular session scheduled
in calendar year 1994, the amendments made by subsections (a)
and (b) shall be effective no later than the first day of the
first calendar quarter beginning after the close of the first
regular session of the State legislature that begins after the
date of enactment of this Act.
SEC. 7602. STATE PATERNITY ESTABLISHMENT PROGRAMS.
(a) Performance Standards for State Paternity Establishment
Programs.--Section 452(g) (42 U.S.C. 652(g)) is amended--
(1) in paragraph (1)--
(A) by striking ``1991'' and inserting ``1994'';
(B) by inserting ``is based on reliable data and''
before ``equals or exceeds''; and
(C) by striking subparagraphs (A), (B), and (C) and
inserting the following new subparagraphs:
``(A) 75 percent;
``(B) for a State with a paternity establishment
percentage of not less than 50 percent but less than 75
percent for such fiscal year, the paternity
establishment percentage of the State for the
immediately preceding fiscal year plus 3 percentage
points; or
``(C) for a State with a paternity establishment
percentage of less than 50 percent for such fiscal
year, the paternity establishment percentage of the
State for the immediately preceding fiscal year plus 6
percentage points.''; and
(2) in paragraph (2)--
(A) by striking ``(or under all such plans)'' each
place it appears;
(B) by inserting ``or part (E)'' after ``under part
A'' each place it appears;
(C) by striking subparagraph (B) and inserting the
following new subparagraph:
``(B) the term `reliable data' means the most
recent data available which are found by the Secretary
to be reliable for purposes of this section.'';
(D) by inserting ``unless paternity is established
for such child'' after ``the death of a parent''; and
(E) by inserting ``or any child with respect to
whom the State agency administering the plan under part
E determines (as provided in section 454(4)(B)) that it
is against the best interest of such child to do so''
after ``cooperate under section 402(a)(26)''.
(b) State Plan Requirements for the Establishment of Paternity.--
Section 466(a) (42 U.S.C. 666(a)) is amended--
(1) in paragraph (2)--
(A) by striking ``at the option of the State,'';
and
(B) by inserting ``or paternity establishment''
after ``support order issuance and enforcement'';
(2) in paragraph (5) by adding at the end the following new
subparagraphs:
``(C) Procedures for a simple civil process for
voluntarily acknowledging paternity under which the
State must provide that the rights and responsibilities
of acknowledging paternity are explained and ensure
that due process safeguards are afforded. Such
procedures must include (i) a hospital-based program
for the voluntary acknowledgment of paternity during
the period immediately preceding or following the birth
of a child, and (ii) the inclusion of signature lines
on applications for official birth certificates which,
once signed by the father and the mother, constitute a
voluntary acknowledgment of paternity.
``(D) Procedures under which the voluntary
acknowledgment of paternity creates a rebuttable, or at
the option of the State, conclusive presumption of
paternity, and under which such voluntary
acknowledgment is admissible as evidence of paternity.
``(E) Procedures under which the voluntary
acknowledgment of paternity must be recognized as a
basis for seeking a support order without first
requiring any further proceedings to establish
paternity.
``(F) Procedures which provide that (i) any
objection to genetic testing results must be made in
writing within a specified number of days before any
hearing at which such results may be introduced into
evidence, and (ii) if no objection is made, the test
results are admissible as evidence of paternity without
the need for foundation testimony or other proof of
authenticity or accuracy.
``(G) Procedures which create a rebuttable or, at
the option of the State, conclusive presumption of
paternity upon genetic testing results indicating a
threshold probability of the alleged father being the
father of the child.
``(H) Procedures requiring a default order to be
entered in a paternity case upon a showing of service
of process on the defendent and any additional showing
required by State law.''; and
(3) by inserting after paragraph (10) the following new
paragraph:
``(11) Procedures under which a State must give full faith
and credit to a determination of paternity made by any other
State, whether established through voluntary acknowledgment or
through administrative or judicial processes.''.
(c) Effective Date.--The amendments made by this section shall
become effective with respect to a State on the later of--
(1) October 1, 1993 or,
(2) the date of enactment by the legislature of such State
of all laws required by such amendments,
but in no event later than the first day of the first calendar quarter
beginning after the close of the first regular session of the State
legislature that begins after the date of enactment of this Act. For
purposes of the previous sentence, in the case of a State that has a 2-
year legislative session, each year of such session shall be deemed to
be a separate regular session of the State legislature.
SEC. 7603. FEES FOR FEDERAL ADMINISTRATION OF STATE SUPPLEMENTARY
PAYMENTS.
(a) In General.--
(1) Optional state supplementary payments.--Section 1616(d)
(42 U.S.C. 1382e(d)) is amended--
(A) by inserting ``(1)'' after ``(d)'';
(B) by inserting ``, plus an administration fee
assessed in accordance with paragraph (2) and any
additional services fee charged in accordance with
paragraph (3)'' before the period; and
(C) by adding after and below the end the
following:
``(2)(A) The Secretary shall assess each State an administration
fee in an amount equal to--
``(i) the number of supplementary payments made by the
Secretary on behalf of the State under this section for any
month in a fiscal year; multiplied by
``(ii) the applicable rate for the fiscal year.
``(B) As used in subparagraph (A), the term `applicable rate'
means--
``(i) for fiscal year 1995, $1.67;
``(ii) for fiscal year 1996, $3.33;
``(iii) for fiscal year 1997, $5.00; and
``(iv) for fiscal year 1998 and each succeeding fiscal
year, $5.00, or such different rate as the Secretary determines
pursuant to criteria established in regulations is appropriate
for the State, taking into account the complexity of the
State's supplementary payment program.
``(C) All fees collected pursuant to this paragraph shall be
transferred to the United States at the same time that amounts for such
supplementary payments are required to be so transferred.
``(3)(A) The Secretary shall charge a State an additional services
fee if, at the request of the State, the Secretary provides additional
services beyond the level customarily provided, in the administration
of State supplementary payments pursuant to this section.
``(B) The additional services fee shall be in an amount that the
Secretary determines is necessary to cover all costs (including
indirect costs) incurred by the Federal Government in furnishing the
additional services referred to in subparagraph (A).
``(C) The additional services fee shall be payable in advance or by
way of reimbursement.
``(4) All administration fees and additional services fees
collected pursuant to this subsection shall be deposited in the general
fund of the Treasury of the United States as miscellaneous receipts.''.
(2) Mandatory state supplementary payments.--Section
212(b)(3) of Public Law 93-66 (42 U.S.C. 1382 note) is
amended--
(A) by inserting ``(A)'' after ``(3)'';
(B) by inserting ``, plus an administration fee
assessed in accordance with subparagraph (B) and any
additional services fee charged in accordance with
subparagraph (C)'' before the period; and
(C) by adding after and below the end the
following:
``(B)(i) The Secretary shall assess each State an administration
fee in an amount equal to--
``(I) the number of supplementary payments made by the
Secretary on behalf of the State under this subsection for any
month in a fiscal year; multiplied by
``(II) the applicable rate for the fiscal year.
``(ii) As used in clause (i), the term `applicable rate' means--
``(I) for fiscal year 1995, $1.67;
``(II) for fiscal year 1996, $3.33;
``(III) for fiscal year 1997, $5.00; and
``(IV) for fiscal year 1998 and each succeeding fiscal
year, $5.00, or such different rate as the Secretary determines
pursuant to regulations established in regulations is
appropriate for the State, taking into account the complexity
of the State's supplementary payment program.
``(iii) All fees collected pursuant to this subparagraph shall be
transferred to the United States at the same time that amounts for such
supplementary payments are required to be so transferred.
``(C)(i) The Secretary shall charge a State an additional services
fee if, at the request of the State, the Secretary provides additional
services beyond the level customarily provided, in the administration
of State supplementary payments pursuant to this subsection.
``(ii) The additional services fee shall be in an amount that the
Secretary determines is necessary to cover all costs (including
indirect costs) incurred by the Federal Government in furnishing the
additional services referred to in clause (i).
``(iii) The additional services fee shall be payable in advance or
by way of reimbursement.
``(D) All administration fees and additional services fees
collected pursuant to this paragraph shall be deposited in the general
fund of the Treasury of the United States as miscellaneous receipts.''.
(b) Effective Date.--The amendments made by this section shall
apply to supplementary payments made pursuant to section 1616(a) of the
Social Security Act or section 212(a) of Public Law 93-66 for any
calendar month beginning after September 30, 1994, and to services
furnished after such date, regardless of whether regulations to
implement such amendments have been promulgated by such date, or
whether any agreement entered into under such section 1616(a) or such
section 212(a) has been modified.
Subtitle D--Miscellaneous Provisions
PART I--TRADE PROVISIONS
SEC. 7701. EXTENSION OF AUTHORITY TO LEVY CUSTOMS USER FEES.
Section 13031(j)(3) of the Consolidated Omnibus Budget
Reconciliation Act of 1985 (19 U.S.C. 58c(j)(3)) is amended by striking
out ``1995'' and inserting ``1998''.
SEC. 7702. EXTENSION OF, AND AUTHORIZATION OF APPROPRIATIONS FOR, TRADE
ADJUSTMENT ASSISTANCE PROGRAM.
(a) Extension.--Section 285 of the Trade Act of 1974 (19 U.S.C.
2271, preceding note) is amended--
(1) by striking ``No'' and all that follows through ``and
no duty'' in subsection (b) and inserting ``No duty''; and
(2) by adding at the end the following new subsection:
``(c) No assistance, vouchers, allowances, or other payments may be
provided under chapter 2, and no technical assistance may be provided
under chapter 3, after September 30, 1998.''.
(b) Authorization of Appropriations.--
(1) Chapter 2 adjustment assistance.--Section 245 of the
Trade Act of 1974 (19 U.S.C. 2317) is amended by striking
``1988, 1989, 1990, 1991, 1992, and 1993'' and inserting
``1993, 1994, 1995, 1996, 1997, and 1998''.
(2) Chapter 3 adjustment assistance.--Section 256(b) of
such Act (19 U.S.C. 2346(b)) is amended by striking ``1988,
1989, 1990, 1991, 1992, and 1993'' and inserting ``1993, 1994,
1995, 1996, 1997, and 1998''.
PART II--IMPROVED ACCESS TO CHILDHOOD IMMUNIZATIONS
SEC. 7801. REIMBURSEMENT TO VACCINE MANUFACTURERS.
(a) In General.--Section 1902(a)(32) (42 U.S.C. 1396a(32)) is
amended--
(1) by striking ``and'' at the end of subparagraph (B);
(2) by striking the period at the end of subparagraph (C)
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(D) nothing in this paragraph shall be construed
to prevent the making of such payment to a manufacturer
of a childhood vaccine under a contract with the State
pursuant to which the manufacturer participates in a
vaccine replacement program described in subsection
(z).''.
(b) State Vaccine Bulk Purchase Program.--Section 1902 (42 U.S.C.
1396a) is amended by adding after paragraph (58) the following new
paragraph:
``(59) provide for the establishment of a State vaccine
bulk purchase program for the purchase of pediatric vaccines.''
and by adding at the end the following new subsection:
``(z)(1) For purposes of section 1396a(a)(59), a vaccine
replacement program described in this subsection is a vaccine bulk
purchase program under which a State with a State plan approved under
this title contracts with each manufacturer of childhood vaccines
selling such vaccines in the State to--
``(A) supply doses of childhood vaccines to providers (or
in the case of a State medicaid vaccine program, the State)
administering such vaccines to individuals eligible to receive
medical assistance under the State plan and replace such
vaccines as needed; and
``(B) charge the State agency for such doses of childhood
vaccine the price under the most recent bid (determined once
such a bid price is made public) submitted by a manufacturer
which receives the Centers for Disease Control and Prevention
contract with respect to the childhood immunization program
under the Public Health Services Act, plus a reasonable fee to
cover shipping and handling of returns for such doses.
``(2) Any manufacturer of childhood vaccines selling such vaccines
in a State which does not participate in a vaccine replacement program
described in paragraph (1) which is operated in such State shall be
ineligible to bid for Centers for Disease Control and Prevention
Immunization contracts under section 317(j) of the Public Health
Services Act.''.
(c) Definition of State Vaccine Bulk Purchase Program.--Section
1902 (42 U.S.C. 1396d) is amended by adding at the end the following
new subsection:
``(t) Vaccine Bulk Purchase Program.--The term `vaccine bulk
purchase program' means a State program which purchases vaccines at
prices negotiated by the Centers for Disease Control and Prevention's
childhood immunization program and distributes such vaccines free of
charge to entities providing medical assistance to individuals eligible
for such medical assistance under this title.''.
(d) Agreement With the State.--Section 1902(a)(27) (42 U.S.C.
1396a(a)(27)) is amended--
(1) by striking ``under the State plan'', and inserting
``under the State plan and with any entity that is a
manufacturer of a childhood vaccine under a contract with the
State pursuant to which the manufacturer participates in a
vaccine replacement program described in subsection (z)''; and
(2) by striking ``such person or institution'' each place
it appears and inserting ``such person, institution, or
entity''.
(e) CDC Price Plus CPI.--To the extent that, at the date of
enactment, a specific vaccine is purchased under contract with the
Centers for Disease Control and Prevention as provided in the Public
Health Service Act, no bid for the purchase of such vaccine shall be
accepted by the Centers for Disease Control and Prevention if the price
per dose of such vaccine exceeds the price in effect on the date of
enactment increased by the percentage increase in CPI from date of the
contract in effect on the date of the enactment to the date of the
contract. This provision shall be in effect for contracts made in
fiscal year 1994 through fiscal year 1998.
(f) Multiple Suppliers.--The Public Health Service provisions
relating to the Centers for Disease Control and Prevention purchase of
vaccine may not be construed as prohibiting the Secretary from entering
into a contract with each manufacturer of a vaccine that meets the
terms and conditions of the Secretary for an award of such a contract
(including terms and conditions regarding safety, quality, and price).
SEC. 7802. STATE OPTION TO PROVIDE THAT CERTAIN PAYMENTS UNDER AFDC ARE
CONDITIONED ON RECEIPT OF IMMUNIZATIONS.
(a) In General.--Section 402 (42 U.S.C. 602) is amended--
(1) in paragraph (44), by striking ``; and'' and inserting
a semicolon;
(2) in paragraph (45) by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(46) at the option of the State, provide that if a family
receiving aid to families with dependent children for any month
includes a child under the age of 6 who has not received
appropriate immunizations (as determined by the State), the
State will take actions to encourage the timely immunization of
such child including, but not limited to, reducing the total
benefits received by such family for such month by all or a
portion of the benefits allocable to the parent or guardian of
such child and either--
``(A) placing all or a portion of such amount in an
account until the family demonstrates to the State that
such child has been appropriately immunized; or
``(B) using all or a portion of such amount to
provide services to such family intended to ensure that
such child receives appropriate immunizations.''.
(b) State Programs to Encourage Appropriate Immunizations.--
(1) In general.--The Secretary of Health and Human Services
(hereafter referred to in this subsection as the ``Secretary'')
shall provide for the establishment or programs intended to
ensure the appropriate immunization of children to be operated
in the States electing to take actions to encourage the timely
immunization of children described in section 402(a)(46) of the
Social Security Act.
(2) Payments to states and limits on funding.--
(A) Payments to states.--Except as provided in
subparagraph (B), the Secretary shall pay to each State
conducting a program under this subsection for each
quarter in which such program is conducted an amount
equal such State's Federal percentage (as determined
under section 403(a) of the Social Security Act) of the
expenditures incurred by such State during such quarter
in conducting such program.
(B) Limits on funding.--In conducting programs
under this subsection, the Secretary shall limit the
total amount of the Federal share of expenses incurred
under title IV and section 1903 of the Social Security
Act to no more than $250,000 for each State in any
year.
(c) Effective Date.--The amendment made by subsection (a) and the
provisions of subsection (b) shall become effective on the date of the
enactment of this Act.
PART III--DISCLOSURE PROVISIONS
SEC. 7901. DISCLOSURE OF RETURN INFORMATION FOR ADMINISTRATION OF
CERTAIN VETERANS PROGRAMS.
(a) General Rule.--Subparagraph (D) of section 6103(l)(7) of the
Internal Revenue Code of 1986 (relating to disclosure of return
information to Federal, State, and local agencies administering certain
programs) is amended by striking ``September 30, 1997'' in the second
sentence following clause (viii) and inserting ``September 30, 1998''.
(b) Authority for Secretary of Veterans Affairs To Obtain
Information.--Section 5317(g) of title 38, United States Code, is
amended by striking out ``September 30, 1997'' and inserting
``September 30, 1998''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 7902. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT INCOME
CONTINGENT REPAYMENT OF STUDENT LOANS.
(a) General Rule.--Subsection (l) of section 6103 of the Internal
Revenue Code of 1986 (relating to confidentiality and disclosure of
returns and return information) is amended by adding at the end thereof
the following new paragraph:
``(13) Disclosure of return information to carry out income
contingent repayment of student loans.--
``(A) In general.--The Secretary may, upon written
request from the Secretary of Education, disclose to
officers and employees of the Department of Education
return information with respect to a taxpayer who has
received an applicable student loan and whose loan
repayment amounts are based in whole or in part on the
taxpayer's income. Such return information shall be
limited to--
``(i) taxpayer identity information with
respect to such taxpayer,
``(ii) the filing status of such taxpayer,
and
``(iii) the adjusted gross income of such
taxpayer.
``(B) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) may be used by officers and employees
of the Department of Education only for the purposes
of, and to the extent necessary in, establishing the
appropriate income contingent repayment amount for an
applicable student loan.
``(C) Applicable student loan.--For purposes of
this paragraph, the term `applicable student loan'
means--
``(i) any loan made under the program
authorized under part D of title IV of the
Higher Education Act of 1965, and
``(ii) any loan made under part B or E of
title IV of the Higher Education Act of 1965
which is in default and has been assigned to
the Department of Education.
``(D) Termination.--This paragraph shall not apply
to any request made after September 30, 1998.''
(b) Conforming Amendments.--
(1) So much of paragraph (4) of section 6103(m) of such
Code as precedes subparagraph (B) thereof is amended to read as
follows:
``(4) Individuals who owe an overpayment of federal pell
grants or who have defaulted on student loans administered by
the department of education.--
``(A) In general.--Upon written request by the
Secretary of Education, the Secretary may disclose the
mailing address of any taxpayer--
``(i) who owes an overpayment of a grant
awarded to such taxpayer under subpart 1 of
part A of title IV of the Higher Education Act
of 1965, or
``(ii) who has defaulted on a loan--
``(I) made under part B, D, or E of
title IV of the Higher Education Act of
1965, or
``(II) made pursuant to section
3(a)(1) of the Migration and Refugee
Assistance Act of 1962 to a student at
an institution of higher education,
for use only by officers, employees, or agents of the
Department of Education for purposes of locating such
taxpayer for purposes of collecting such overpayment or
loan .''
(2) Subparagraph (B) of section 6103(m)(4) of such Code is
amended--
(A) in clause (i), by striking ``under part B'' and
inserting ``under part B or D''; and
(B) in clause (ii), by striking ``under part E''
and inserting ``under subpart 1 of part A, or part D or
E,'';
(3) Section 6103(p) of such Code is amended--
(A) in paragraph (3)(A), by striking ``(11), or
(12), (m)'' and inserting ``(11), (12), or (13), (m)'';
(B) in paragraph (4)--
(i) in the matter preceding subparagraph
(A), by striking out ``(10), or (11),'' and
inserting ``(10), (11), or (13),'', and
(ii) in subparagraph (F)(ii), by striking
``(11), or (12),'' and inserting ``(11), (12),
or (13),''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 7903. USE OF RETURN INFORMATION FOR INCOME VERIFICATION UNDER
CERTAIN HOUSING ASSISTANCE PROGRAMS.
(a) In General.--Subparagraph (D) of section 6103(l)(7) of the
Internal Revenue Code of 1986 (relating to the disclosure of return
information to Federal, State, and local agencies administering certain
programs) is amended--
(1) in clause (vii), by striking ``and'' at the end;
(2) in clause (viii), by striking the period at the end and
inserting ``; and'';
(3) by inserting after clause (viii) the following new
clause:
``(ix) any housing assistance program administered by the
Department of Housing and Urban Development that involves
initial and periodic review of an applicant's or participant's
income, except that return information may be disclosed under
this clause only on written request by the Secretary of Housing
and Urban Development and only for use by officers and
employees of the Department of Housing and Urban Development
with respect to applicants for and participants in such
programs.''; and
(4) by adding at the end thereof the following: ``Clause
(ix) shall not apply after September 30, 1998.''
(b) Conforming Amendment.--The heading of paragraph (7) of section
6103(l) of such Code is amended by inserting after ``code'' the
following: ``, or certain housing assistance programs''.
(c) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 7904. USE OF RETURN INFORMATION FOR HEALTH COVERAGE CLEARINGHOUSE.
(a) Establishment of Health Coverage Clearinghouse.--Part A of
title XI (42 U.S.C. 1301 et seq.) is amended by adding at the end the
following new section:
``third party liability clearinghouse
``Sec. 1144. (a) Establishment of Clearinghouse.--
``(1) In general.--The Secretary shall establish and
operate a Third Party Liability Clearinghouse (hereafter in
this section referred to as the `Clearinghouse') for the
purpose of identifying third parties responsible for payment
for health care items and services furnished to beneficiaries
of the medicare program under title XVIII and the medicaid
program under title XIX.
``(2) Director.--The Clearinghouse established pursuant to
paragraph (1) shall be headed by a Director.
``(b) Data Bank.--
``(1) Maintenance of information.--The Clearinghouse shall
maintain a data bank containing information obtained pursuant
to section 6103(l)(12) of the Internal Revenue Code of 1986.
Information in the data bank shall be retained for not less
than 1 year after the date the information was obtained.
``(2) Disclosure of information in data bank.--The Director
is authorized (subject to the restriction in section
6103(l)(12)(E)(i) of the Internal Revenue Code of 1986) to
disclose any information in the data bank established pursuant
to paragraph (1) to the Commissioner of Social Security, the
Secretary of the Treasury, employers, group health plans, the
administrator of the medicare program under title XVIII, and
the administrators of the medicaid program under title XIX, to
the extent necessary to assist the administration of such
programs.
``(c) Requirement That Employers Furnish Information.--
``(1) In general.--An employer shall furnish to the
Director the information requested pursuant to section
6103(l)(12)(C)(i) of the Internal Revenue Code of 1986 within
60 days after receipt of such a request.
``(2) Civil money penalty for failure to cooperate.--An
employer (other than a Federal or other governmental entity)
who willfully or repeatedly fails to provide a timely and
accurate response to a request for information pursuant to
paragraph (1) shall be subject, in addition to any other
penalties that may be prescribed by law, to a civil money
penalty of not to exceed $1,000 for each individual or
individual's spouse with respect to which such a request is
made. The provisions of section 1128A (other than subsections
(a) and (b)) shall apply to such civil money penalty in the
same manner as such provisions apply to penalties or
proceedings under section 1128A(a).
``(d) Collections From Third Parties.--The Director is authorized,
upon request by the administrator of the medicare program under title
XVIII or any administrator of the medicaid program under title XIX, to
assist in the collection of amounts due from liable third parties to
reimburse costs incurred by such program for health care items and
services.
``(e) Fees for Clearinghouse Services.--The Director shall
establish fees for services provided under section 6103(l)(12)(C)(ii)
of the Internal Revenue Code of 1986 and subsection (d) which are
designed to cover the full costs to the Clearinghouse of providing such
services. Clearinghouse services under such section and subsection
shall be available subject to payment of such fees.
``(f) Evaluation Responsibilities.--The Director shall evaluate
methods for improving--
``(1) procedures for the collection, management, and
appropriate disclosure of health care coverage information, and
``(2) Federal laws and policies concerning third party
liability for medical care.
``(g) Definitions.--For purposes of this section, the term `group
health plan' has the meaning given to such term in section
6103(l)(12)(G) of the Internal Revenue Code of 1986.''.
(b) Disclosure of Tax Return Information.--
(1) In general.--Paragraph (12) of section 6103(l) of the
Internal Revenue Code of 1986, as amended by section 7303, is
amended to read as follows:
``(12) Disclosure of certain taxpayer return information
for purposes of identifying health insurance coverage of
certain individuals and spouses.--
``(A) Return information from internal revenue
service.--The Secretary shall, upon written request
from the Commissioner of Social Security (referred to
in this subparagraph as the `Commissioner'), disclose
to the Commissioner available filing status and
taxpayer identity information from the individual
master files of the Internal Revenue Service relating
to whether any individual identified by the
Commissioner was a married individual (as defined in
section 7703) for any specified year after 1986, and,
if so, the name of the spouse of such individual and
such spouse's TIN.
``(B) Return information from social security
administration.--The Commissioner shall, upon written
request from the Director of the Third Party Liability
Clearinghouse (referred to in this subparagraph as the
`Director'), disclose to the Director the following
information with respect to the individuals, and the
spouses of such individuals, specified in subparagraph
(A):
``(i) For each such individual who is
identified as having received wages (as defined
in section 3401(a)) above an amount (if any)
specified by the Secretary of Health and Human
Services from an employer in a previous year--
``(I) the name and TIN of the
individual,
``(II) the name, address, and TIN
of the employer, and
``(III) the information reported
under section 6051(a)(10).
``(ii) For each individual who was
identified as married under subparagraph (A)
and whose spouse is identified as having
received wages above an amount (if any)
specified by the Secretary of Health and Human
Services from an employer in a previous year--
``(I) the name and TIN of the
individual,
``(II) the name and TIN of the
spouse,
``(III) the name, address, and TIN
of the spouse's employer, and
``(IV) the information reported
under section 6051(a)(10) with respect
to the spouse.
``(C) Disclosure by third party liability
clearinghouse.--The Director may (subject to the
provisions of subparagraph (E)) disclose--
``(i) with respect to the information
disclosed under subparagraph (B), to the
employer referred to in such subparagraph the
name and TIN of each individual identified
under such subparagraph as having received
wages from the employer (hereafter referred to
in this subparagraph as the `employee') for
purposes of determining during what period such
employee or the employee's spouse may be (or
have been) covered under a group health plan of
the employer and what benefits are or were
covered under the plan (including the name,
address, and identifying number of the plan),
``(ii) to the administrator of the medicare
program under title XVIII of the Social
Security Act or to any administrator of the
medicaid program under title XIX of such Act
the information disclosed under subparagraph
(B) and clause (i) for purposes of providing
information concerning employment and group
health coverage of individuals and individual's
spouses who are program beneficiaries,
``(iii) to any agent of such Director the
information referred to in subparagraph (B) for
purposes of carrying out clauses (i) and (ii)
on behalf of such Director, and
``(iv) to any person specified in
subsection (b)(2) of section 1144 of the Social
Security Act, information in the data bank
established pursuant to subsection (b)(1) of
such section, for the purposes specified in
such subsection.
``(D) Disclosure by certain programs to group
health plans.--The administrator of the medicare
program under title XVIII of the Social Security Act or
any administrator of the medicaid program under title
XIX of such Act may (subject to the provisions of
subparagraph (E)) disclose information concerning an
employee or spouse disclosed to the Director pursuant
to subparagraph (B) and redisclosed to such
administrator pursuant to subparagraph (C)--
``(i) to any group health plan which
provides or provided coverage to such employee
or spouse, and
``(ii) to any agent of such administrator,
for purposes of identifying, or collecting on claims
under coverage of such employee or spouse under such
group health plan.
``(E) Special rules.--
``(i) Restrictions on disclosure.--
Information may be disclosed under
subparagraphs (A) through (D) only for purposes
of, and to the extent necessary in, determining
the extent to which any individual is covered
under any group health plan.
``(ii) Timely response to requests.--Any
request made under subparagraph (A) or (B)
shall be complied with as soon as possible but
in no event later than 120 days after the date
the request was made.
``(F) Disclosure concerning enforcement
activities.--The Secretary shall, upon written request
from the Secretary of Health and Human Services,
disclose to the Secretary of Health and Human Services
the status of any activities undertaken (with respect
to persons specified by the Secretary of Health and
Human Services) to enforce the requirements of section
5000.
``(G) Definitions.--For purposes of this paragraph,
the term `group health plan' means any group health
plan (as defined in section 5000(b)).''.
(2) Reporting of group health plan information.--Section
6051(a) of the Internal Revenue Code of 1986 is amended--
(A) by striking ``and'' at the end of paragraph
(8),
(B) by striking the period at the end of paragraph
(9) and inserting ``, and'', and
(C) by inserting after paragraph (9) the following
new paragraph:
``(10) whether a group health plan (as defined in section
6103(l)(12)(G)) is available to the employee and the plan
coverage (single or family) elected by such employee (if
any).''.
(c) Conforming Amendment.--Section 1862(b)(5) (42 U.S.C.
1395y(b)(5)), as amended by section 7303, is amended to read as
follows:
``(5) Identification of secondary payer situations.--In
addition to any other information provided under this title to
fiscal intermediaries and carriers, the Administrator shall
disclose to such intermediaries and carriers (or to such a
single intermediary or carrier as the Secretary may designate)
the information received under section 6103(l)(12)(C)(ii) of
the Internal Revenue Code of 1986.''.
(d) Exception From Privacy Act Requirements.--Subsection (a)(8)(B)
of section 552a of title 5, United States Code, is amended--
(1) in clause (v), by striking ``; or'' at the end;
(2) in clause (vi), by striking the semicolon at the end
and inserting ``; or''; and
(3) by adding at the end the following new clause:
``(vii) matches performed pursuant to
section 6103(l)(12) of the Internal Revenue
Code of 1986 and section 1144 of the Social
Security Act for the purpose of identifying
third parties responsible for payment for
health care items and services furnished to
beneficiaries of certain Federal and federally
assisted programs;''.
(e) Effective Date.--The amendments made by this section shall take
effect on April 1, 1995.
PART IV--OTHER PROVISIONS
SEC. 7950. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX.
(a) General Rule.--Subsection (e) of section 6611 of the Internal
Revenue Code of 1986 (relating to income tax refund within 45 days
after return is filed) is amended to read as follows:
``(e) Disallowance of Interest on Certain Overpayments.--
``(1) Refunds within 45 days after return is filed.--If any
overpayment of tax imposed by this title is refunded within 45
days after the last day prescribed for filing the return of
such tax (determined without regard to any extension of time
for filing the return) or, in the case of a return filed after
such last date, is refunded within 45 days after the date the
return is filed, no interest shall be allowed under subsection
(a) on such overpayment.
``(2) Refunds after claim for credit or refund.--If--
``(A) the taxpayer files a claim for a credit or
refund for any overpayment of tax imposed by this
title, and
``(B) such overpayment is refunded within 45 days
after such claim is filed,
no interest shall be allowed on such overpayment from the date
the claim is filed until the day the refund is made.
``(3) IRS initiated adjustments.--If an adjustment
initiated by the Secretary, results in a refund or credit of an
overpayment, interest on such overpayment shall be computed by
subtracting 45 days from the number of days interest would
otherwise be allowed with respect to such overpayment.''
(b) Effective Dates.--
(1) Paragraph (1) of section 6611(e) of the Internal
Revenue Code of 1986 (as amended by subsection (a)) shall apply
in the case of returns the due date for which (determined
without regard to extensions) is on or after January 1, 1994.
(2) Paragraph (2) of section 6611(e) of such Code (as so
amended) shall apply in the case of claims for credit or refund
of any overpayment filed on or after January 1, 1995,
regardless of the taxable period to which such refund relates.
(3) Paragraph (3) of section 6611(e) of such Code (as so
amended) shall apply in the case of any refund paid on or after
January 1, 1995, regardless of the taxable period to which such
refund relates.
SEC. 7951. FEES FOR APPLICATIONS FOR ALCOHOL LABELING AND FORMULA
REVIEWS.
(a) In General.--The Secretary of the Treasury or his delegate
(hereinafter in this section referred to as the `Secretary') shall
establish a program requiring the payment of user fees for--
(1) requests for each certificate of alcohol label approval
required under the Federal Alcohol Administration Act (27
U.S.C. 201 et seq.) and for each request for exemption from
such requirement, and
(2) requests for each formula review, and requests for each
statement of process (including laboratory tests and analyses),
under such Act or under chapter 51 of the Internal Revenue Code
of 1986.
(b) Program Criteria.--
(1) In general.--The fees charged under the program
required by subsection (a) shall be determined such that the
Secretary estimates that the aggregate of such fees received
during any fiscal year will be $5,000,000.
(2) Minimum fees.--The fee charged under the program
required by subsection (a) shall not be less than--
(A) $50 for each request referred to in subsection
(a)(1), and
(B) $250 for each request referred to in subsection
(a)(2).
(c) Application of Section.--Subsection (a) shall apply to requests
made on or after the 90th day after the date of the enactment of this
Act.
(d) Deposit and Credit as Offsetting Receipts.--The amounts
collected by the Secretary under the program required by subsection (a)
(to the extent such amounts do not exceed $5,000,000) shall be
deposited into the Treasury as offsetting receipts and ascribed to the
alcohol compliance program of the Bureau of Alcohol, Tobacco, and
Firearms.
SEC. 7952. USE OF HARBOR MAINTENANCE TRUST FUND AMOUNTS FOR
ADMINISTRATIVE EXPENSES.
(a) In General.--Paragraph (3) of section 9505(c) of the Internal
Revenue Code of 1986 (relating to expenditures from Harbor Maintenance
Trust Fund) is amended to read as follows:
``(3) for the payment of all expenses of administration
incurred by the Department of the Treasury, the Army Corps of
Engineers, and the Department of Commerce related to the
administration of subchapter A of chapter 36 (relating to
harbor maintenance tax), but not in excess of $5,000,000 for
any fiscal year.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to fiscal years beginning after the date of the enactment of this
Act.
SEC. 7953. INCREASE IN PRESIDENTIAL ELECTION CAMPAIGN FUND CHECK-OFF.
(a) In General.--Section 6096(a) of the Internal Revenue Code of
1986 (relating to designation by individuals) is amended--
(1) by striking ``$1'' each place it appears and inserting
``$3'', and
(2) by striking ``$2'' and inserting ``$6''.
(b) Effective Date.--The amendments made by subsection (a) apply
with respect to tax returns required to be filed after December 31,
1993.
SEC. 7954. INCREASE IN PUBLIC DEBT LIMIT.
(a) General Rule.--Subsection (b) of section 3101 of title 31,
United States Code, is amended by striking out the dollar limitation
contained in such subsection and inserting in lieu thereof
``$4,900,000,000,000''.
(b) Repeal of Temporary Increase.--Effective on and after the date
of the enactment of this Act, section 1 of Public Law 103-12 is hereby
repealed.
TITLE VIII--FINANCE COMMITTEE REVENUE PROVISIONS
SEC. 8000. SHORT TITLE; ETC.
(a) Short Title.--This title may be cited as the ``Revenue
Reconciliation Act of 1993''.
(b) Amendment to 1986 Code.--Except as otherwise expressly
provided, whenever in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or other
provision of the Internal Revenue Code of 1986.
(c) Section 15 Not To Apply.--Except in the case of the amendments
made by section 8221 (relating to corporate rate increase), no
amendment made by this title shall be treated as a change in a rate of
tax for purposes of section 15 of the Internal Revenue Code of 1986.
(d) Waiver of Estimated Tax Penalties.--No addition to tax shall be
made under section 6654 or 6655 of the Internal Revenue Code of 1986
for any period before April 16, 1994 (March 16, 1994, in the case of a
corporation), with respect to any underpayment to the extent such
underpayment was created or increased by any provision of this title.
(e) Table of Contents.--
Sec. 8000. Short title; etc.
Subtitle A--Training and Investment Incentives
Part I--Provisions Relating to Education and Training
Sec. 8101. Employer-provided educational assistance.
Sec. 8102. Targeted jobs credit.
Part II--Investment Incentives
subpart a--research credit
Sec. 8111. Extension of research credit.
Sec. 8112. Modification of fixed base percentage for startup companies.
Sec. 8113. Sense of Senate regarding permanent extension of research
subpart b--modification to minimum tax depreciation rules
Sec. subpart c--increase in expense treatment for small businesses
Sec. 8119. Increase insubpart d--tax exempt bondsl businesses.
Sec. 8121. Extension of qualified small issue bonds.
Part III--Expansion and Simplification of Earned Income Tax Credit
Sec. 8131. Expansion and simplification of earned income tax credit.
Part IV--Incentives for Investment in Real Estate
subpart a--extension of qualified mortgage bonds and low-income housing
credit
Sec. 8141. Extension of qualified mortgage bonds.
Sec. 8141A. Sense of the Senate regarding permanent extension of
qualified mortgage bonds.
Sec. 8142. Low-incomesubpart b--passive loss rules
Ssubpart c--provisions relating to real estate investments by pension
funds
Sec. 8144. Real estate property acquired by a qualified organization.
Sec. 8145. Repeal of special treatment of publicly treated
partnerships.
Sec. 8146. Title-holding companies permitted to receive small amounts
of unrelated business taxable income.
Sec. 8147. Exclusion from unrelated business tax of gains from certain
property.
Sec. 8148. Exclusion from unrelated business tax of certain fees and
option premiums.
Sec. 8149. Treatment of pension fund investments in real estate
subpart d--increase in recovery period for nonresidential real property
Sec. 8151. Increase in recovery period for nonresidential real
property.
Part V--Luxury Tax
Sec. 8161. Repeal of luxury excise taxes other than on passenger
vehicles.
Sec. 8162. Exemption from luxury excise tax for certain equipment
installed on passenger vehicles for use by
disabled individuals.
Sec. 8163. Tax on diesel fuel used in noncommercial boats.
Part VI--Other Changes
Sec. 8171. Alternative minimum tax treatment of contributions of
appreciated property.
Sec. 8172. Substantiation requirement for deduction of certain
charitable contributions.
Sec. 8173. Disclosure related to quid pro quo contributions.
Sec. 8174. Certain transfers to railroad retirement account made
permanent.
Sec. 8175. Temporary extension of deduction for health insurance costs
of self-employed individuals.
Part VII--Investment in Indian Reservations
Sec. 8181. Investment tax credit for property on Indian Reservations.
Sec. 8182. Indian employment credit.
Subtitle B--Revenue Increases
Part I--Provisions Affecting Individuals
subpart a--rate increases
Sec. 8201. Increase in top marginal rate under section 1.
Sec. 8202. Surtax on high-income taxpayers.
Sec. 8203. Modifications to alternative minimum tax rates and exemption
amounts.
Sec. 8203A. Rate increases not to take effect until July 1, 1993.
Sec. 8204. Overall limitation on itemized deductions for high-income
taxpayers made permanent.
Sec. 8205. Phaseout of personal exemption of high-income taxpayers made
permanent.
Sec. 8206. Provisions to prevent conversion of ordinary income to
subpart b--other provisions
Sec. 8207. Repeal of limitation on amount of wages subject to health
insurance employment tax.
Sec. 8208. Top estate and gift tax rates made permanent.
Sec. 8209. Reduction in deductible portion of business meals and
entertainment.
Sec. 8209A. Sense of the Senate relating to the deductibility of
business meals and entertainment expenses.
Sec. 8210. Elimination of deduction for club membership fees.
Sec. 8211. Disallowance of deduction for certain employee remuneration
in excess of $1,000,000.
Sec. 8212. Reduction in compensation taken into account in determining
contributions and benefits under qualified
retirement plans.
Sec. 8213. Modification to deduction for certain moving expenses.
Sec. 8214. Simplification of individual estimated tax safe harbor based
on last year's tax.
Sec. 8215. Social security and tier 1 railroad retirement benefits.
Part II--Provisions Affecting Businesses
Sec. 8221. Increase in top marginal rate under section 11.
Sec. 8222. Disallowance of deduction for lobbying expenditures.
Sec. 8223. Mark to market accounting method for securities dealers.
Sec. 8224. Clarification of treatment of certain FSLIC financial
assistance.
Sec. 8225. Modification of corporate estimated tax rules.
Sec. 8226. Modifications of discharge of indebtedness provisions.
Sec. 8227. Limitation on section 936 credit.
Sec. 8228. Modification to limitation on deduction for certain
interest.
Part III--Foreign Tax Provisions
subpart a--current taxation of certain earnings of controlled foreign
corporations
Sec. 8231. Earnings invested in excess passive assets.
Sec. 8232. Modification to taxation of investment in United States
property.
Sec.subpart b--allocation of research and experimental expenditures
Sec. 8234. Allocation subpart c--other provisionsl expenditures.
Sec. 8235. Repeal of certain exceptions for working capital.
Sec. 8236. Modifications of accuracy-related penalty.
Sec. 8237. Denial of portfolio interest exemption for contingent
interest.
Sec. 8238. Regulations dealing with conduit arrangements.
Sec. 8239. Treatment of export of certain softwood logs.
Part IV--Transportation Fuels Provisions
subpart a--transportation fuels tax
Sec. 8241. Trsubpart b--modifications to tax on diesel fuel
Sec. 8242. Modifications to tax on diesel fuel.
Ssubpart c--extension of motor fuel tax rates; increased deposits into
highway trust fund
Sec. 8244. Extension of motor fuel tax rates; increased deposits into
Highway Trust Fund.
Part V--Compliance Provisions
Sec. 8251. Modifications to substantial understatement and return-
preparer penalties.
Sec. 8252. Returns relating to the cancellation of indebtedness by
certain financial entities.
Part VI--Treatment of Intangibles
Sec. 8261. Amortization of goodwill and certain other intangibles.
Sec. 8262. Treatment of certain payments to retired or deceased
partner.
Part VII--Miscellaneous Provisions
Sec. 8271. Denial of deduction relating to travel expenses.
Sec. 8272. Increase in withholding from supplemental wage payments.
Sec. 8273. Excise tax on certain vaccines made permanent.
Subtitle A--Training and Investment Incentives
PART I--PROVISIONS RELATING TO EDUCATION AND TRAINING
SEC. 8101. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE.
(a) Extension of Exclusion.--
(1) In general.--Subsection (d) of section 127 (relating to
educational assistance programs) is amended to read as follows:
``(d) Termination.--
``(1) In general.--This section shall not apply to taxable
years beginning after June 30, 1994.
``(2) Special rule.--In the case of any taxable year
beginning in 1994, only amounts paid before July 1, 1994, by
the employer for educational assistance for any employee shall
be taken into account for purposes of this section.''
(2) Conforming amendment.--Paragraph (2) of section 103(a)
of the Tax Extension Act of 1991 is hereby repealed.
(b) Coordination With Section 132.--Paragraph (8) of section 132(i)
is amended to read as follows:
``(8) Application of section to otherwise taxable
educational or training benefits.--Amounts paid or expenses
incurred by the employer for education or training provided to
the employee which are not excludable from gross income under
section 127 shall be excluded from gross income under this
section if (and only if) such amounts or expenses are a working
condition fringe.''
(c) Effective Dates.--
(1) Subsection (a).--The amendments made by subsection (a)
shall apply to taxable years ending after June 30, 1992.
(2) Subsection (b).--The amendment made by subsection (b)
shall apply to taxable years beginning after December 31, 1988.
SEC. 8102. TARGETED JOBS CREDIT.
(a) Extension of Credit.--Paragraph (4) of section 51(c) (relating
to amount of targeted jobs credit) is amended by striking ``1992'' and
inserting ``1994''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to individuals who begin work for the employer after June 30,
1992.
PART II--INVESTMENT INCENTIVES
Subpart A--Research Credit
SEC. 8111. EXTENSION OF RESEARCH CREDIT.
(a) In General.--Subsection (h) of section 41 (relating to credit
for research activities) is amended to read as follows:
``(h) Nonapplicability.--
``(1) In general.--This section shall not apply to amounts
paid or incurred during any suspension period.
``(2) Base amount.--In the case of any taxable year which
includes a portion of any suspension period, the base amount
with respect to such taxable year shall be the amount which
bears the same ratio to the base amount for such year
(determined without regard to this paragraph) as the number of
days in such taxable year which are not in any suspension
period bears to the total number of days in such taxable year.
``(3) Fixed-base percentage.--The fixed-base percentage
under subsection (c)(3)(B)(ii) shall be computed as if this
section were in effect during any suspension period.
``(4) Suspension period.--For purposes of this subsection,
the term `suspension period' includes--
``(A) the period beginning July 1, 1992, and ending
June 30, 1993, and
``(B) any period after June 30, 1994.''
(b) Conforming Amendment.--Subparagraph (D) of section 28(b)(1) is
amended by striking ``for periods after June 30, 1992'' and inserting
``during any suspension period (as defined in section 41(h)(4))''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after June 30, 1992.
SEC. 8112. MODIFICATION OF FIXED BASE PERCENTAGE FOR STARTUP COMPANIES.
(a) General Rule.--Clause (ii) of section 41(c)(3)(B) is amended to
read as follows:
``(ii) Fixed-base percentage.--In a case to
which this subparagraph applies, the fixed-base
percentage is--
``(I) 3 percent for each of the
taxpayer's 1st 5 taxable years
beginning after December 31, 1993, for
which the taxpayer has qualified
research expenses,
``(II) in the case of the
taxpayer's 6th such taxable year, \1/6\
of the percentage which the aggregate
qualified research expenses of the
taxpayer for the 4th and 5th such
taxable years is of the aggregate gross
receipts of the taxpayer for such
years,
``(III) in the case of the
taxpayer's 7th such taxable year, \1/3\
of the percentage which the aggregate
qualified research expenses of the
taxpayer for the 5th and 6th such
taxable years is of the aggregate gross
receipts of the taxpayer for such
years,
``(IV) in the case of the
taxpayer's 8th such taxable year, \1/2\
of the percentage which the aggregate
qualified research expenses of the
taxpayer for the 5th, 6th, and 7th such
taxable years is of the aggregate gross
receipts of the taxpayer for such
years,
``(V) in the case of the taxpayer's
9th such taxable year, \2/3\ of the
percentage which the aggregate
qualified research expenses of the
taxpayer for the 5th, 6th, 7th, and 8th
such taxable years is of the aggregate
gross receipts of the taxpayer for such
years,
``(VI) in the case of the
taxpayer's 10th such taxable year, \5/
6\ of the percentage which the
aggregate qualified research expenses
of the taxpayer for the 5th, 6th, 7th,
8th, and 9th such taxable years is of
the aggregate gross receipts of the
taxpayer for such years, and
``(VII) for taxable years
thereafter, the percentage which the
aggregate qualified research expenses
for any 5 taxable years selected by the
taxpayer from among the 5th through the
10th such taxable years is of the
aggregate gross receipts of the
taxpayer for such selected years.''.
(b) Conforming Amendments.--
(1) Clause (iii) of section 41(c)(3)(B) is amended by
striking ``clause (i)'' and inserting ``clauses (i) and (ii)''.
(2) Subparagraph (D) of section 41(c)(3) is amended by
striking ``subparagraph (A)'' and inserting ``subparagraphs (A)
and (B)(ii)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 8113. SENSE OF SENATE REGARDING PERMANENT EXTENSION OF RESEARCH
CREDIT.
It is the sense of the Senate that the research credit under
section 41 of the Internal Revenue Code of 1986 be extended
permanently.
Subpart B--Modification To Minimum Tax Depreciation Rules
SEC. 8115. MODIFICATION TO MINIMUM TAX DEPRECIATION RULES.
(a) Elimination of ACE Depreciation Adjustment.--Clause (i) of
section 56(g)(4)(A) (relating to depreciation adjustments for computing
adjusted current earnings) is amended by adding at the end thereof the
following new sentence: ``The preceding sentence shall not apply to any
property placed in service after December 31, 1993, and the
depreciation deduction with respect to such property shall be
determined under the rules of subsection (a)(1)(A).''.
(b) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property placed
in service after December 31, 1993.
(2) Coordination with transitional rules.--The amendments
made by this section shall not apply to any property to which
paragraph (1) of section 56(a) of the Internal Revenue Code of
1986 does not apply by reason of subparagraph (C)(i) thereof.
Subpart C--Increase in Expense Treatment for Small Businesses
SEC. 8119. INCREASE IN EXPENSE TREATMENT FOR SMALL BUSINESSES.
(a) General Rule.--Paragraph (1) of section 179(b) (relating to
dollar limitation) is amended by striking ``$10,000'' and inserting
``$20,500''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1992.
Subpart D--Tax Exempt Bonds
SEC. 8121. EXTENSION OF QUALIFIED SMALL ISSUE BONDS.
(a) In General.--Subparagraph (B) of section 144(a)(12) is amended
by striking ``1992'' and inserting ``1994''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to bonds issued after June 30, 1992.
PART III--EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT
SEC. 8131. EXPANSION AND SIMPLIFICATION OF EARNED INCOME TAX CREDIT.
(a) General Rule.--Section 32 (relating to earned income credit) is
amended by striking subsections (a) and (b) and inserting the
following:
``(a) Allowance of Credit.--
``(1) In general.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by
this subtitle for the taxable year an amount equal to the
credit percentage of so much of the taxpayer's earned income
for the taxable year as does not exceed the earned income
amount.
``(2) Limitation.--The amount of the credit allowable to a
taxpayer under paragraph (1) for any taxable year shall not
exceed the excess (if any) of--
``(A) the credit percentage of the earned income
amount, over
``(B) the phaseout percentage of so much of the
adjusted gross income (or, if greater, the earned
income) of the taxpayer for the taxable year as exceeds
the phaseout amount.
``(b) Percentages and Amounts.--For purposes of subsection (a)--
``(1) Percentages.--The credit percentage and the phaseout
percentage shall be determined as follows:
``(A) In general.--In the case of taxable years
beginning after 1995:
In the case of an eligible
individual with: The credit percentage is: The phaseout percentage is:
1 qualifying child.......... 34.............................. 16.16
2 or more qualifying
children................... 39.............................. 20.72
``(B) Transitional percentages for 1995.--In the
case of a taxable year beginning in 1995:
In the case of an eligible
individual with: The credit percentage is: The phaseout percentage is:
1 qualifying child.......... 34.............................. 16.16
2 or more qualifying
children................... 34.............................. 15.94
``(C) Transitional percentages for 1994.--In the
case of a taxable year beginning in 1994:
In the case of an eligible
individual with: The credit percentage is: The phaseout percentage is:
1 qualifying child.......... 26.............................. 16.16
2 or more qualifying
children................... 30.............................. 15.94
``(2) Amounts.--The earned income amount and the phaseout
amount shall be determined as follows:
``(A) In general.--In the case of taxable years
beginning after 1994:
In the case of an eligible
individual with: The earned income amount is: The phaseout amount is:
1 qualifying child.......... $6,000.......................... $11,000
2 or more qualifying
children................... $8,500.......................... $11,000
``(B) Transitional amounts.--In the case of a
taxable year beginning in 1994:
In the case of an eligible
individual with: The earned income amount is: The phaseout amount is:
1 qualifying child.......... $7,750.......................... $11,000
2 or more qualifying
children................... $8,500.......................... $11,000.''
(b) Inflation Adjustments.--Section 32(i) (relating to inflation
adjustments) is amended--
(1) by striking paragraphs (1) and (2) and inserting the
following new paragraph:
``(1) In general.--In the case of any taxable year
beginning after 1994, each dollar amount contained in
subsection (b)(2)(A) shall be increased by an amount equal to--
``(A) such dollar amount, multiplied by
``(B) 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
1993' for `calendar year 1992'.'', and
(2) by redesignating paragraph (3) as paragraph (2).
(c) Conforming Amendments.--
(1) Subparagraph (D) of section 32(c)(3) is amended--
(A) by striking ``clause (i) or (ii)'' in clause
(iii) and inserting ``clause (i)'',
(B) by striking clause (ii), and
(C) by redesignating clause (iii) as clause (ii).
(2) Paragraph (3) of section 162(l) is amended to read as
follows:
``(3) Coordination with medical deduction.--Any amount paid
by a taxpayer for insurance to which paragraph (1) applies
shall not be taken into account in computing the amount
allowable to the taxpayer as a deduction under section
213(a).''
(3) Section 213 is amended by striking subsection (f).
(4) Subsection (b) of section 3507 is amended by
redesignating paragraphs (2) and (3) as paragraphs (3) and (4),
respectively, and by inserting after paragraph (1) the
following new paragraph:
``(2) certifies that the employee has 1 or more qualifying
children (within the meaning of section 32(c)(3)) for such
taxable year,''.
(5) Subparagraph (B) of section 3507(c)(2) is amended by
striking clauses (i) and (ii) and inserting the following:
``(i) of not more than the credit
percentage in effect under section 32(b)(1) for
an eligible individual with 1 qualifying child
and with earned income not in excess of the
earned income amount in effect under section
32(b)(2) for such an eligible individual, which
``(ii) phases out at the phaseout
percentage in effect under section 32(b)(1) for
such an eligible individual between the
phaseout amount in effect under section
32(b)(2) for such an eligible individual and
the amount of earned income at which the credit
under section 32(a) phases out for such an
eligible individual, or''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
PART IV--INCENTIVES FOR INVESTMENT IN REAL ESTATE
Subpart A--Extension of Qualified Mortgage Bonds and Low-Income Housing
Credit
SEC. 8141. EXTENSION OF QUALIFIED MORTGAGE BONDS.
(a) In General.--Subparagraph (B) of section 143(a)(1) (defining
qualified mortgage bond) is amended by striking ``1992'' each place it
appears and inserting ``1994''.
(b) Mortgage Credit Certificates.--Subsection (h) of section 25 is
amended by striking ``1992'' and inserting ``1994''.
(c) Effective Dates.--
(1) Bonds.--The amendment made by subsection (a) shall
apply to bonds issued after June 30, 1992.
(2) Certificates.--The amendment made by subsection (b)
shall apply to elections for periods after June 30, 1992.
SEC. 8141A. SENSE OF THE SENATE REGARDING PERMANENT EXTENSION OF
QUALIFIED MORTGAGE BONDS.
(a) Findings.--The Senate finds that:
(1) Low and moderate income families often have difficulty
in obtaining affordable mortgage financing.
(2) The mortgage revenue bond provisions of the Internal
Revenue Code are an important tool in providing affordable
financing for first-time home buyers.
(3) The tax-exempt status of mortgage revenue bonds have
enabled State and local housing agencies to finance home
mortgages for first-time buyers at rates below conventional
market rates. This cost differential enables buyers, who
otherwise might not be able to get mortgage financing, to
obtain a loan at an affordable rate.
(4) Mortgage revenue bonds are targeted to families with
the greatest need. In 1992, the average income of a mortgage
revenue bond borrower was 74 percent of median income. Mortgage
revenue bonds are only available to buyers who have not owned a
home within the past 3 years, earn 115 percent or less of the
applicable median income, and buy a principal residence that
does not exceed 90 percent of the average home purchase price.
(5) Prior to its expiration in June, mortgage revenue bonds
were the only Federal assistance targeted to first-time home
buyers. During the past 15 years, mortgage revenue bonds have
financed more than 2 million home purchases and accounted for 1
out of every 12 mortgages made to first-time buyers.
(6) In the last decade, mortgage revenue bonds have been
scheduled to sunset 7 times, making administration and timing
of bond issues extremely difficult and costly. The mortgage
revenue bond program lapsed on June 30, underscoring the need
for permanent extension.
(b) Sense of the Senate.--It is the sense of the Senate that
mortgage revenue bonds are a vital, proven tool for providing
affordable home ownership opportunities for low- and moderate-income
families and that Congress should adopt a permanent extension of the
mortgage revenue bond program as part of the Internal Revenue Code.
SEC. 8142. LOW-INCOME HOUSING CREDIT.
(a) Permanent Extension.--
(1) In general.--Section 42 (relating to low-income housing
credit) is amended by striking subsection (o).
(2) Effective date.--The amendments made by paragraph (1)
shall apply to periods ending after June 30, 1992.
(b) Modifications.--
(1) Housing credit agency determination of reasonableness
of project costs.--Subparagraph (B) of section 42(m)(2)
(relating to credit allocated to building not to exceed amount
necessary to assure project feasibility) is amended--
(A) by striking ``and'' at the end of clause (ii),
(B) by striking the period at the end of clause
(iii) and inserting ``, and'', and
(C) by inserting after clause (iii) the following
new clause:
``(iv) the reasonableness of the
developmental and operational costs of the
project.''
(2) Units with certain full-time students not
disqualified.--Subparagraph (D) of section 42(i)(3) (defining
low-income unit) is amended to read as follows:
``(D) Certain students not to disqualify unit.--A
unit shall not fail to be treated as a low-income unit
merely because it is occupied--
``(i) by an individual who is--
``(I) a student and receiving
assistance under title IV of the Social
Security Act, or
``(II) enrolled in a job training
program receiving assistance under the
Job Training Partnership Act or under
other similar Federal, State, or local
laws, or
``(ii) entirely by full-time students if
such students are--
``(I) single parents and their
children and such parents and children
are not dependents (as defined in
section 152) of another individual, or
``(II) married and file a joint
return.''
(3) Treasury waivers of certain de minimis errors and
recertifications.--Subsection (g) of section 42 (relating to
qualified low-income housing projects) is amended by adding at
the end thereof the following new paragraph:
``(8) Waiver of certain de minimis errors and
recertifications.--On application by the taxpayer, the
Secretary may waive--
``(A) any recapture under subsection (j) in the
case of any de minimis error in complying with
paragraph (1), or
``(B) any annual recertification of tenant income
for purposes of this subsection, if the entire building
is occupied by low-income tenants.''
(4) Discrimination against tenants prohibited.--Section
42(h)(6)(B) (defining extended low-income housing commitment)
is amended by redesignating clauses (iv) and (v) as clauses (v)
and (vi) and by inserting after clause (iii) the following new
clause:
``(iv) which prohibits the refusal to lease
to a holder of a voucher or certificate of
eligibility under section 8 of the United
States Housing Act of 1937 because of the
status of the prospective tenant as such a
holder,''.
(5) Effective dates.--
(A) In general.--Except as provided in subparagraph
(B), the amendments made by this subsection shall apply
to--
(i) determinations under section 42 of the
Internal Revenue Code of 1986 with respect to
housing credit dollar amounts allocated from
State housing credit ceilings after June 30,
1992, or
(ii) buildings placed in service after June
30, 1992, to the extent paragraph (1) of
section 42(h) of such Code does not apply to
any building by reason of paragraph (4)
thereof, but only with respect to bonds issued
after such date.
(B) Waiver authority and prohibited
discrimination.--The amendments made by paragraphs (3)
and (4) shall take effect on the date of the enactment
of this Act.
(c) Election To Determine Rent Limitation Based on Number of
Bedrooms and Deep Rent Skewing.--In the case of a building to which the
amendments made by subsection (e)(1) or (n)(2) of section 7108 of the
Revenue Reconciliation Act of 1989 did not apply, the taxpayer may
elect to have such amendments apply to such building but only with
respect to tenants first occupying any unit in the building after the
date of the election, and only if the taxpayer has met the requirements
of the procedures described in section 42(m)(1)(B)(iii) of the Internal
Revenue Code of 1986. Such an election may be made only during the 180
day period beginning on the date of the enactment of this Act and, once
made, shall be irrevocable.
Subpart B--Passive Loss Rules
SEC. 8143. MODIFICATION OF PASSIVE LOSS RULES.
(a) General Rule.--Section 469 (relating to passive activity losses
and credits limited) is amended by redesignating subsections (l) and
(m) as subsections (m) and (n), respectively, and by inserting after
subsection (k) the following new subsection:
``(l) Special Rules for Real Estate Activities.--
``(1) Loss from certain rental real estate activities
treated as not passive.--If the taxpayer meets the requirements
of paragraph (2) for the taxable year, subsection (a) shall not
apply to so much of the passive activity loss for such taxable
year as does not exceed the least of--
``(A) the lesser of--
``(i) the net loss for such taxable year
from rental real estate activities in which the
taxpayer materially participates, or
``(ii) the net loss for such taxable year
from all rental real estate activities of the
taxpayer,
``(B) the net income of the taxpayer for the
taxable year from real property trade or business
activities which are not passive activities, or
``(C) the taxable income of the taxpayer for the
taxable year determined without regard to this
subsection.
A similar rule shall apply to any passive activity credit.
``(2) Requirements.--The taxpayer meets the requirements of
this paragraph for any taxable year if more than one-half of
the personal services performed in trades or businesses by the
taxpayer during such taxable year are performed in real
property trades or businesses in which the taxpayer materially
participates.
``(3) Real property trade or business.--For purposes of
this paragraph, the term `real property trade or business'
means any real property development, redevelopment,
construction, reconstruction, acquisition, conversion, rental,
operation, management, leasing, or brokerage trade or business.
``(4) Special rules.--
``(A) Personal services as an employee.--For
purposes of paragraph (2), personal services performed
as an employee shall not be treated as performed in
real property trades or businesses. The preceding
sentence shall not apply if such employee is a 5-
percent owner (as defined in section 416(i)(1)(B)) in
the employer.
``(B) Closely held c corporations.--This subsection
shall not apply to any interests held by a closely held
C corporation.
``(5) Coordination with subsection (i).--
``(A) In general.--This subsection shall be applied
after the application of subsection (i).
`'(B) Amounts allowed under subsection (i).--For
purposes of this subsection--
``(i) the passive activity loss and passive
activity credit, and
``(ii) the net loss referred to in
paragraph (1)(A),
shall not include any amount allowed under subsection
(i).''
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
Subpart C--Provisions Relating to Real Estate Investments by Pension
Funds
SEC. 8144. REAL ESTATE PROPERTY ACQUIRED BY A QUALIFIED ORGANIZATION.
(a) Modifications of Exceptions.--Paragraph (9) of section 514(c)
(relating to real property acquired by a qualified organization) is
amended by adding at the end thereof the following new subparagraphs:
``(G) Special rules for purposes of the
exceptions.--Except as otherwise provided by
regulations--
``(i) Small leases disregarded.--For
purposes of clauses (iii) and (iv) of
subparagraph (B), a lease to a person described
in such clause (iii) or (iv) shall be
disregarded if no more than 25 percent of the
leasable floor space in a building (or complex
of buildings) is covered by the lease and if
the lease is on commercially reasonable terms.
``(ii) Commercially reasonable financing.--
Clause (v) of subparagraph (B) shall not apply
if the financing is on commercially reasonable
terms.
``(H) Qualifying sales by financial institutions.--
``(i) In general.--In the case of a
qualifying sale by a financial institution,
except as provided in regulations, clauses (i)
and (ii) of subparagraph (B) shall not apply
with respect to financing provided by such
institution for such sale.
``(ii) Qualifying sale.--For purposes of
this clause, there is a qualifying sale by a
financial institution if--
``(I) a qualified organization
acquires property described in clause
(iii) from a financial institution and
any gain recognized by the financial
institution with respect to the
property is ordinary income,
``(II) the stated principal amount
of the financing provided by the
financial institution does not exceed
the amount of the outstanding
indebtedness (including accrued but
unpaid interest) of the financial
institution with respect to the
property described in clause (iii)
immediately before the acquisition
referred to in clause (iii) or (v),
whichever is applicable, and
``(III) the present value
(determined as of the time of the sale
and by using the applicable Federal
rate determined under section 1274(d))
of the maximum amount payable pursuant
to the financing that is determined by
reference to the revenue, income, or
profits derived from the property
cannot exceed 30 percent of the total
purchase price of the property
(including the contingent payments).
``(iii) Property to which subparagraph
applies.--Property is described in this clause
if such property is foreclosure property, or is
real property which--
``(I) was acquired by the qualified
organization from a financial
institution which is in conservatorship
or receivership, or from the
conservator or receiver of such an
institution, and
``(II) was held by the financial
institution at the time it entered into
conservatorship or receivership.
``(iv) Financial institution.--For purposes
of this subparagraph, the term `financial
institution' means--
``(I) any financial institution
described in section 581 or 591(a),
``(II) any other corporation which
is a direct or indirect subsidiary of
an institution referred to in subclause
(I) but only if, by virtue of being
affiliated with such institution, such
other corporation is subject to
supervision and examination by a
Federal or State agency which regulates
institutions referred to in subclause
(I), and
``(III) any person acting as a
conservator or receiver of an entity
referred to in subclause (I) or (II)
(or any government agency or
corporation succeeding to the rights or
interest of such person).
``(v) Foreclosure property.--For purposes
of this subparagraph, the term `foreclosure
property' means any real property acquired by
the financial institution as the result of
having bid on such property at foreclosure, or
by operation of an agreement or process of law,
after there was a default (or a default was
imminent) on indebtedness which such property
secured.''.
(b) Conforming Amendment.--Paragraph (9) of section 514(c) is
amended--
(1) by adding the following new sentence at the end of
subparagraph (A): ``For purposes of this paragraph, an interest
in a mortgage shall in no event be treated as real property.'',
and
(2) by striking the last sentence of subparagraph (B).
(c) Effective Dates.--
(1) In general.--The amendments made by this section shall
apply to acquisitions on or after January 1, 1994.
(2) Small leases.--The provisions of section
514(c)(9)(G)(i) of the Internal Revenue Code of 1986 shall, in
addition to any leases to which the provisions apply by reason
of paragraph (1), apply to leases entered into on or after
January 1, 1994.
SEC. 8145. REPEAL OF SPECIAL TREATMENT OF PUBLICLY TREATED
PARTNERSHIPS.
(a) General Rule.--Subsection (c) of section 512 is amended--
(1) by striking paragraph (2),
(2) by redesignating paragraph (3) as paragraph (2), and
(3) by striking ``paragraph (1) or (2)'' in paragraph (2)
(as so redesignated) and inserting ``paragraph (1)''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to partnership years beginning on or after January 1, 1994.
SEC. 8146. TITLE-HOLDING COMPANIES PERMITTED TO RECEIVE SMALL AMOUNTS
OF UNRELATED BUSINESS TAXABLE INCOME.
(a) General Rule.--Paragraph (25) of section 501(c) is amended by
adding at the end thereof the following new subparagraph:
``(G)(i) An organization shall not be treated as
failing to be described in this paragraph merely by
reason of the receipt of any otherwise disqualifying
income which is incidentally derived from the holding
of real property.
``(ii) Clause (i) shall not apply if the amount of
gross income described in such clause exceeds 10
percent of the organization's gross income for the
taxable year unless the organization establishes to the
satisfaction of the Secretary that the receipt of gross
income described in clause (i) in excess of such
limitation was inadvertent and reasonable steps are
being taken to correct the circumstances giving rise to
such income.''
(b) Conforming Amendment.--Paragraph (2) of section 501(c) is
amended by adding at the end thereof the following new sentence:
``Rules similar to the rules of subparagraph (G) of paragraph (25)
shall apply for purposes of this paragraph.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning on or after January 1, 1994.
SEC. 8147. EXCLUSION FROM UNRELATED BUSINESS TAX OF GAINS FROM CERTAIN
PROPERTY.
(a) General Rule.--Subsection (b) of section 512 (relating to
modifications) is amended by adding at the end thereof the following
new paragraph:
``(16)(A) Notwithstanding paragraph (5)(B), there shall be
excluded all gains or losses from the sale, exchange, or other
disposition of any real property described in subparagraph (B)
if--
``(i) such property was acquired by the
organization from--
``(I) a financial institution described in
section 581 or 591(a) which is in
conservatorship or receivership, or
``(II) the conservator or receiver of such
an institution (or any government agency or
corporation succeeding to the rights or
interests of the conservator or receiver),
``(ii) such property is designated by the
organization within the 9-month period beginning on the
date of its acquisition as property held for sale,
except that not more than one-half (by value determined
as of such date) of property acquired in a single
transaction may be so designated,
``(iii) such sale, exchange, or disposition occurs
before the later of--
``(I) the date which is 30 months after the
date of the acquisition of such property, or
``(II) the date specified by the Secretary
in order to assure an orderly disposition of
property held by persons described in
subparagraph (A), and
``(iv) while such property was held by the
organization, the aggregate expenditures on
improvements and development activities included in the
basis of the property are (or were) not in excess of 20
percent of the net selling price of such property.
``(B) Property is described in this subparagraph if it is
real property which--
``(i) was held by the financial institution at the
time it entered into conservatorship or receivership,
or
``(ii) was foreclosure property (as defined in
section 514(c)(9)(H)(v)) which secured indebtedness
held by the financial institution at such time.
For purposes of this subparagraph, real property includes an
interest in a mortgage.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to property acquired on or after January 1, 1994.
SEC. 8148. EXCLUSION FROM UNRELATED BUSINESS TAX OF CERTAIN FEES AND
OPTION PREMIUMS.
(a) Loan Commitment Fees.--Paragraph (1) of section 512(b)
(relating to modifications) is amended by inserting ``amounts received
or accrued as consideration for entering into agreements to make
loans,'' before ``and annuities''.
(b) Option Premiums.--The second sentence of section 512(b)(5) is
amended--
(1) by striking ``all gains on'' and inserting ``all gains
or losses recognized, in connection with the organization's
investment activities, from'',
(2) by striking ``, written by the organization in
connection with its investment activities,'' and
(3) by inserting ``or real property and all gains or losses
from the forfeiture of good-faith deposits (that are consistent
with established business practice) for the purchase, sale, or
lease of real property in connection with the organization's
investment activities'' before the period.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received on or after January 1, 1994.
SEC. 8149. TREATMENT OF PENSION FUND INVESTMENTS IN REAL ESTATE
INVESTMENT TRUSTS.
(a) General Rule.--Subsection (h) of section 856 (relating to
closely held determinations) is amended by adding at the end thereof
the following new paragraph:
``(3) Treatment of trusts described in section 401(a).--
``(A) Look-thru treatment.--
``(i) In general.--Except as provided in
clause (ii), in determining whether the stock
ownership requirement of section 542(a)(2) is
met for purposes of paragraph (1)(A), any stock
held by a qualified trust shall be treated as
held directly by its beneficiaries in
proportion to their actuarial interests in such
trust and shall not be treated as held by such
trust.
``(ii) Certain related trusts not
eligible.--Clause (i) shall not apply to any
qualified trust if one or more disqualified
persons (as defined in section 4975(e)(2),
without regard to subparagraphs (B) and (I)
thereof) with respect to such qualified trust
hold in the aggregate 5 percent or more in
value of the interests in the real estate
investment trust and such real estate
investment trust has accumulated earnings and
profits attributable to any period for which it
did not qualify as a real estate investment
trust.
``(B) Coordination with personal holding company
rules.--If any entity qualifies as a real estate
investment trust for any taxable year by reason of
subparagraph (A), such entity shall not be treated as a
personal holding company for such taxable year for
purposes of part II of subchapter G of this chapter.
``(C) Treatment for purposes of unrelated business
tax.--If any qualified trust holds more than 10 percent
(by value) of the interests in any pension-held REIT at
any time during a taxable year, the trust shall be
treated as having for such taxable year gross income
from an unrelated trade or business in an amount which
bears the same ratio to the aggregate dividends paid
(or treated as paid) by the REIT to the trust for the
taxable year of the REIT with or within which the
taxable year of the trust ends (the `REIT year') as--
``(i) the gross income (less direct
expenses related thereto) of the REIT for the
REIT year from unrelated trades or businesses
(determined as if the REIT were a qualified
trust), bears to
``(ii) the gross income (less direct
expenses related thereto) of the REIT for the
REIT year.
This subparagraph shall apply only if the ratio
determined under the preceding sentence is at least 5
percent.
``(D) Pension-held reit.--The purposes of
subparagraph (C)--
``(i) In general.--A real estate investment
trust is a pension-held REIT if such trust
would not have qualified as a real estate
investment trust but for the provisions of this
paragraph and if such trust is predominantly
held by qualified trusts.
``(ii) Predominantly held.--For purposes of
clause (i), a real estate investment trust is
predominantly held by qualified trusts if--
``(I) at least 1 qualified trust
holds more than 25 percent (by value)
of the interests in such real estate
investment trust, or
``(II) 1 or more qualified trusts
(each of whom own more than 10 percent
by value of the interests in such real
estate investment trust) hold in the
aggregate more than 50 percent (by
value) of the interests in such real
estate investment trust.
``(E) Qualified trust.--For purposes of this
paragraph, the term `qualified trust' means any trust
described in section 401(a) and exempt from tax under
section 501(a).''
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 1993.
Subpart D--Increase in Recovery Period for Nonresidential Real Property
SEC. 8151. INCREASE IN RECOVERY PERIOD FOR NONRESIDENTIAL REAL
PROPERTY.
(a) General Rule.--Paragraph (1) of section 168(c) (relating to
applicable recovery period) is amended by striking the item relating to
nonresidential real property and inserting the following:
``Nonresidential real property................ 38 years.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by subsection (a) shall apply to property placed
in service by the taxpayer on or after February 25, 1993.
(2) Exception.--The amendments made by this section shall
not apply to property placed in service by the taxpayer before
January 1, 1994, if--
(A) the taxpayer or a qualified person entered into
a binding written contract to purchase or construct
such property before February 25, 1993, or
(B) the construction of such property was commenced
by or for the taxpayer or a qualified person before
February 25, 1993.
For purposes of this paragraph, the term ``qualified person''
means any person who transfers his rights in such a contract or
such property to the taxpayer but only if the property is not
placed in service by such person before such rights are
transferred to the taxpayer.
PART V--LUXURY TAX
SEC. 8161. REPEAL OF LUXURY EXCISE TAXES OTHER THAN ON PASSENGER
VEHICLES.
(a) In General.--Subchapter A of chapter 31 (relating to retail
excise taxes) is amended to read as follows:
``Subchapter A--Luxury Passenger Automobiles
``Sec. 4001. Imposition of tax.
``Sec. 4002. 1st retail sale; uses, etc.
treated as sales; determination
of price.
``Sec. 4003. Special rules.
``SEC. 4001. IMPOSITION OF TAX.
``(a) Imposition of Tax.--There is hereby imposed on the 1st retail
sale of any passenger vehicle a tax equal to 10 percent of the price
for which so sold to the extent such price exceeds $30,000.
``(b) Passenger Vehicle.--
``(1) In general.--For purposes of this subchapter, the
term `passenger vehicle' means any 4-wheeled vehicle--
``(A) which is manufactured primarily for use on
public streets, roads, and highways, and
``(B) which is rated at 6,000 pounds unloaded gross
vehicle weight or less.
``(2) Special rules.--
``(A) Trucks and vans.--In the case of a truck or
van, paragraph (1)(B) shall be applied by substituting
`gross vehicle weight' for `unloaded gross vehicle
weight'.
``(B) Limousines.--In the case of a limousine,
paragraph (1) shall be applied without regard to
subparagraph (B) thereof.
``(c) Exceptions for Taxicabs, Etc.--The tax imposed by this
section shall not apply to the sale of any passenger vehicle for use by
the purchaser exclusively in the active conduct of a trade or business
of transporting persons or property for compensation or hire.
``(d) Exemption for Law Enforcement Uses, Etc.--No tax shall be
imposed by this section on the sale of any passenger vehicle--
``(1) to the Federal Government, or a State or local
government, for use exclusively in police, firefighting, search
and rescue, or other law enforcement or public safety
activities, or in public works activities, or
``(2) to any person for use exclusively in providing
emergency medical services.
``(e) Inflation Adjustment.--
``(1) In general.--In the case of any calendar year after
1992, the $30,000 amount in subsection (a) and section 4003(a)
shall be increased by an amount equal to--
``(A) $30,000, multiplied by
``(B) the cost-of-living adjustment under section
1(f)(3) for such calendar year, determined by
substituting `calendar year 1990' for `calendar year
1992' in subparagraph (B) thereof.
``(2) Rounding.--If any amount as adjusted under paragraph
(1) is not a multiple of $100, such amount shall be rounded to
the nearest multiple of $100.
``(f) Termination.--The tax imposed by this section shall not apply
to any sale or use after December 31, 1999.
``SEC. 4002. 1ST RETAIL SALE; USES, ETC. TREATED AS SALES;
DETERMINATION OF PRICE.
``(a) 1st Retail Sale.--For purposes of this subchapter, the term
`1st retail sale' means the 1st sale, for a purpose other than resale,
after manufacture, production, or importation.
``(b) Use Treated as Sale.--
``(1) In general.--If any person uses a passenger vehicle
(including any use after importation) before the 1st retail
sale of such vehicle, then such person shall be liable for tax
under this subchapter in the same manner as if such vehicle
were sold at retail by him.
``(2) Exemption for further manufacture.--Paragraph (1)
shall not apply to use of a vehicle as material in the
manufacture or production of, or as a component part of,
another vehicle taxable under this subchapter to be
manufactured or produced by him.
``(3) Exemption for demonstration use.--Paragraph (1) shall
not apply to any use of a passenger vehicle as a demonstrator.
``(4) Exception for use after importation of certain
vehicles.--Paragraph (1) shall not apply to the use of a
vehicle after importation if the user or importer establishes
to the satisfaction of the Secretary that the 1st use of the
vehicle occurred before January 1, 1991, outside the United
States.
``(5) Computation of tax.--In the case of any person made
liable for tax by paragraph (1), the tax shall be computed on
the price at which similar vehicles are sold at retail in the
ordinary course of trade, as determined by the Secretary.
``(c) Leases Considered as Sales.--For purposes of this
subchapter--
``(1) In general.--Except as otherwise provided in this
subsection, the lease of a vehicle (including any renewal or
any extension of a lease or any subsequent lease of such
vehicle) by any person shall be considered a sale of such
vehicle at retail.
``(2) Special rules for long-term leases.--
``(A) Tax not imposed on sale for leasing in a
qualified lease.--The sale of a passenger vehicle to a
person engaged in a passenger vehicle leasing or rental
trade or business for leasing by such person in a long-
term lease shall not be treated as the 1st retail sale
of such vehicle.
``(B) Long-term lease.--For purposes of
subparagraph (A), the term `long-term lease' means any
long-term lease (as defined in section 4052).
``(C) Special rules.--In the case of a long-term
lease of a vehicle which is treated as the 1st retail
sale of such vehicle--
``(i) Determination of price.--The tax
under this subchapter shall be computed on the
lowest price for which the vehicle is sold by
retailers in the ordinary course of trade.
``(ii) Payment of tax.--Rules similar to
the rules of section 4217(e)(2) shall apply.
``(iii) No tax where exempt use by
lessee.--No tax shall be imposed on any lease
payment under a long-term lease if the lessee's
use of the vehicle under such lease is an
exempt use (as defined in section 4003(b)) of
such vehicle.
``(d) Determination of Price.--
``(1) In general.--In determining price for purposes of
this subchapter--
``(A) there shall be included any charge incident
to placing the passenger vehicle in condition ready for
use,
``(B) there shall be excluded--
``(i) the amount of the tax imposed by this
subchapter,
``(ii) if stated as a separate charge, the
amount of any retail sales tax imposed by any
State or political subdivision thereof or the
District of Columbia, whether the liability for
such tax is imposed on the vendor or vendee,
and
``(iii) the value of any component of such
passenger vehicle if--
``(I) such component is furnished
by the 1st user of such passenger
vehicle, and
``(II) such component has been used
before such furnishing, and
``(C) the price shall be determined without regard
to any trade-in.
``(2) Other rules.--Rules similar to the rules of
paragraphs (2) and (4) of section 4052(b) shall apply for
purposes of this subchapter.
``SEC. 4003. SPECIAL RULES.
``(a) Separate Purchase of Vehicle and Parts and Accessories
Therefor.--Under regulations prescribed by the Secretary--
``(1) In general.--Except as provided in paragraph (2),
if--
``(A) the owner, lessee, or operator of any
passenger vehicle installs (or causes to be installed)
any part or accessory on such vehicle, and
``(B) such installation is not later than the date
6 months after the date the vehicle was 1st placed in
service,
then there is hereby imposed on such installation a tax equal
to 10 percent of the price of such part or accessory and its
installation.
``(2) Limitation.--The tax imposed by paragraph (1) on the
installation of any part or accessory shall not exceed 10
percent of the excess (if any) of--
``(A) the sum of--
``(i) the price of such part or accessory
and its installation,
``(ii) the aggregate price of the parts and
accessories (and their installation) installed
before such part or accessory, plus
``(iii) the price for which the passenger
vehicle was sold, over
``(B) $30,000.
``(3) Exceptions.--Paragraph (1) shall not apply if--
``(A) the part or accessory installed is a
replacement part or accessory,
``(B) the part or accessory is installed to enable
or assist an individual with a disability to operate
the vehicle, or to enter or exit the vehicle, by
compensating for the effect of such disability, or
``(C) the aggregate price of the parts and
accessories (and their installation) described in
paragraph (1) with respect to the vehicle does not
exceed $200 (or such other amount or amounts as the
Secretary may by regulation prescribe).
The price of any part or accessory (and its installation) to
which paragraph (1) does not apply by reason of this paragraph
shall not be taken into account under paragraph (2)(A).
``(4) Installers secondarily liable for tax.--The owners of
the trade or business installing the parts or accessories shall
be secondarily liable for the tax imposed by this subsection.
``(b) Imposition of Tax on Sales, Etc., Within 2 Years of Vehicles
Purchased Tax-Free.--
``(1) In general.--If--
``(A) no tax was imposed under this subchapter on
the 1st retail sale of any passenger vehicle by reason
of its exempt use, and
``(B) within 2 years after the date of such 1st
retail sale, such vehicle is resold by the purchaser or
such purchaser makes a substantial nonexempt use of
such vehicle,
then such sale or use of such vehicle by such purchaser shall
be treated as the 1st retail sale of such vehicle for a price
equal to its fair market value at the time of such sale or use.
``(2) Exempt use.--For purposes of this subsection, the
term `exempt use' means any use of a vehicle if the 1st retail
sale of such vehicle is not taxable under this subchapter by
reason of such use.
``(c) Parts and Accessories Sold With Taxable Passenger Vehicle.--
Parts and accessories sold on, in connection with, or with the sale of
any passenger vehicle shall be treated as part of the vehicle.
``(d) Partial Payments, Etc.--In the case of a contract, sale, or
arrangement described in paragraph (2), (3), or (4) of section 4216(c),
rules similar to the rules of section 4217(e)(2) shall apply for
purposes of this subchapter.''
(b) Technical Amendments.--
(1) Subsection (c) of section 4221 is amended by striking
``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
(2) Subsection (d) of section 4222 is amended by striking
``4002(b), 4003(c), 4004(a)'' and inserting ``4001(d)''.
(3) The table of subchapters for chapter 31 is amended by
striking the item relating to subchapter A and inserting the
following:
``Subchapter A. Luxury passenger
vehicles.''
(c) Effective Date.--The amendments made by this section shall take
effect on January 1, 1993.
SEC. 8162. EXEMPTION FROM LUXURY EXCISE TAX FOR CERTAIN EQUIPMENT
INSTALLED ON PASSENGER VEHICLES FOR USE BY DISABLED
INDIVIDUALS.
(a) In General.--Paragraph (3) of section 4004(b) (relating to
separate purchase of article and parts and accessories therefor), as in
effect on the day before the date of the enactment of this Act, is
amended--
(1) by striking ``or'' at the end of subparagraph (A),
(2) by redesignating subparagraph (B) as subparagraph (C),
(3) by inserting after subparagraph (A) the following new
subparagraph:
``(B) the part or accessory is installed on a
passenger vehicle to enable or assist an individual
with a disability to operate the vehicle, or to enter
or exit the vehicle, by compensating for the effect of
such disability, or'', and
(4) by inserting after subparagraph (C) the following flush
sentence:
``The price of any part or accessory (and its installation) to
which paragraph (1) does not apply by reason of this paragraph
shall not be taken into account under paragraph (2)(A).''
(b) Effective Date.--The amendments made by this section shall take
effect as if included in the amendments made by section 11221(a) of the
Omnibus Budget Reconciliation Act of 1990.
(c) Period for Filing Claims.--If refund or credit of any
overpayment of tax resulting from the application of the amendments
made by this section is prevented at any time before the close of the
1-year period beginning on the date of the enactment of this Act by the
operation of any law or rule of law (including res judicata), refund or
credit of such overpayment (to the extent attributable to such
amendments) may, nevertheless, be made or allowed if claim therefor is
filed before the close of such 1-year period.
SEC. 8163. TAX ON DIESEL FUEL USED IN NONCOMMERCIAL BOATS.
(a) General Rule.--
(1) Paragraph (2) of section 4092(a) (defining diesel fuel)
is amended by striking ``or a diesel-powered train'' and
inserting ``, a diesel-powered train, or a diesel-powered
boat''.
(2) Paragraph (1) of section 4041(a) is amended--
(A) by striking ``diesel-powered highway vehicle''
each place it appears and inserting ``diesel-powered
highway vehicle or diesel-powered boat'', and
(B) by striking ``such vehicle'' and inserting
``such vehicle or boat''.
(3) Subparagraph (B) of section 4092(b)(1) is amended by
striking ``commercial and noncommercial vessels'' each place it
appears and inserting ``vessels for use in an off-highway
business use (as defined in section 6421(e)(2)(B))''.
(b) Exemption for Use in Fisheries or Commercial Navigation.--
Subparagraph (B) of section 6421(e)(2) is amended to read as follows:
``(B) Uses in boats.--
``(i) In general.--Except as otherwise
provided in this subparagraph, the term `off-
highway business use' does not include any use
in a motorboat.
``(ii) Fisheries and whaling.--The term
`off-highway business use' shall include any
use in a vessel employed in the fisheries or in
the whaling business.
``(iii) Exception for diesel fuel.--The
term `off-highway business use' shall include
the use of diesel fuel in a boat in the active
conduct of--
``(I) a trade or business of
commercial fishing or transporting
persons or property for compensation or
hire, or
``(II) any other trade or business,
except that this subclause shall not
apply to noncommercial uses described
in clause (iv) during a taxable period.
``(iv) Taxable periods for noncommercial
boats.--In the case of any use of diesel fuel
in a boat used predominantly in any activity
which is of a type generally considered to
constitute entertainment, amusement, or
recreation, the taxable period for purposes of
clause (iii)(II) shall be--
``(I) in the case so much of the
tax under section 4091 as is
attributable to 4.3 cents of the diesel
fuel deficit reduction rate imposed
under such section, any period
beginning after September 30, 1993, and
``(II) in the case so much of the
tax under section 4091 as is not
described in subclause (I) the period
beginning after January 1, 1994, and
ending on December 31, 1999.
(c) Retention of Taxes in General Fund.--
(1) Taxes imposed at highway trust fund financing rate.--
Paragraph (4) of section 9503(b) (relating to transfers to
Highway Trust Fund) is amended--
(A) by striking ``and'' at the end of subparagraph
(A),
(B) by striking the period at the end of
subparagraph (B) and inserting ``, and'', and
(C) by adding at the end thereof the following new
subparagraph:
``(C) there shall not be taken into account the
taxes imposed by sections 4041 and 4091 on diesel fuel
sold for use or used as fuel in a diesel-powered
boat.''
(2) Taxes imposed at leaking underground storage tank trust
fund financing rate.--Subsection (b) of section 9508 (relating
to transfers to Leaking Underground Storage Tank Trust Fund) is
amended by adding at the end thereof the following new
sentence: ``For purposes of this subsection, there shall not be
taken into account the taxes imposed by sections 4041 and 4091
on diesel fuel sold for use or used as fuel in a diesel-powered
boat.''
(d) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on October 1,
1993.
(2) Special rule.--No tax shall be imposed before January
1, 1994, under section 4091 of the Internal Revenue Code of
1986 by reason of the amendments made by this section, other
than the portion of such tax as is attributable to 4.3 cents of
the diesel fuel deficit reduction rate imposed by such section.
PART VI--OTHER CHANGES
SEC. 8171. ALTERNATIVE MINIMUM TAX TREATMENT OF CONTRIBUTIONS OF
APPRECIATED PROPERTY.
(a) Repeal of Tax Preference.--Subsection (a) of section 57 is
amended by striking paragraph (6) (relating to appreciated property
charitable deduction) and by redesignating paragraph (7) as paragraph
(6).
(b) Effect on Adjusted Current Earnings.--Paragraph (4) of section
56(g) is amended by adding at the end thereof the following new
subparagraph:
``(J) Treatment of charitable contributions.--
Notwithstanding subparagraphs (B) and (C), no
adjustment related to the earnings and profits effects
of any charitable contribution shall be made in
computing adjusted current earnings.''
(c) Conforming Amendment.--Subclause (II) of section
53(d)(1)(B)(ii) is amended by striking ``(5) and (6)'' and inserting
``(5)''.
(d) Effective Date.--The amendments made by this section shall
apply to contributions made after June 30, 1992, except that in the
case of any contribution of capital gain property which is not tangible
personal property, such amendments shall apply only if the contribution
is made after December 31, 1992.
SEC. 8172. SUBSTANTIATION REQUIREMENT FOR DEDUCTION OF CERTAIN
CHARITABLE CONTRIBUTIONS.
(a) Substantiation Requirement.--Section 170(f) (providing special
rules relating to the deduction of charitable contributions and gifts)
is amended by adding at the end the following new paragraph:
``(8) Substantiation requirement for certain
contributions.--
``(A) General rule.--No deduction shall be allowed
under subsection (a) for any contribution of $250 or
more unless the taxpayer substantiates the contribution
by a contemporaneous written acknowledgment of the
contribution by the donee organization that meets the
requirements of subparagraph (B).
``(B) Content of acknowledgment.--
``(i) In general.--An acknowledgment meets
the requirements of this subparagraph if it
provides information sufficient to substantiate
the amount of the deductible contribution.
Nothing in this clause shall be construed as
requiring the donee organization to estimate
the value of a noncash contribution.
``(ii) Quid pro quo contributions.--If the
contribution was made by means of a payment
part of which constituted consideration for
goods or services provided by the donee
organization, the acknowledgment must provide a
good faith estimate of the value of such goods
or services. The preceding sentence shall not
apply to any payment made to an organization,
organized exclusively for religious purposes,
in return for which the taxpayer receives
solely an intangible religious benefit that
generally is not sold in a commercial
transaction outside the donative context.
``(C) Contemporaneous.--For purposes of
subparagraph (A), an acknowledgment shall be considered
to be contemporaneous if the taxpayer obtains the
acknowledgment on or before the earlier of--
``(i) the date on which the taxpayer files
a return for the taxable year in which the
contribution was made, or
``(ii) the due date (including extensions)
for filing such return.
``(D) Substantiation not required for contributions
reported by the donee organization.--Subparagraph (A)
shall not apply to a contribution if the donee
organization files a return, on such form and in
accordance with such regulations as the Secretary may
prescribe, which includes the information described in
subparagraph (B) with respect to the contribution.
``(E) Regulations.--The Secretary shall prescribe
such regulations as may be necessary or appropriate to
carry out the purposes of this paragraph, including
regulations that may provide that some or all of the
requirements of this paragraph do not apply in
appropriate cases.''
(b) Effective Date.--The provisions of this section shall apply to
contributions made on or after January 1, 1994.
SEC. 8173. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.
(a) Disclosure Requirement.--Subchapter B of chapter 61 (relating
to information and returns) is amended by redesignating section 6115 as
section 6116 and by inserting after section 6114 the following new
section:
``SEC. 6115. DISCLOSURE RELATED TO QUID PRO QUO CONTRIBUTIONS.
``(a) Disclosure Requirement.--If an organization described in
section 170(c) (other than paragraph (1) thereof) receives a quid pro
quo contribution in excess of $75, the organization shall, in
connection with the solicitation or receipt of the contribution,
provide a written statement which--
``(1) informs the donor that the amount of the contribution
that is deductible for Federal income tax purposes is limited
to the excess of the amount of any money and the value of any
property other than money contributed by the donor over the
value of the goods or services provided by the organization,
and
``(2) provides the donor with a good faith estimate of the
value of such goods or services.
``(b) Quid Pro Quo Contribution.--For purposes of this section, the
term `quid pro quo contribution' means a payment made partly as a
contribution and partly in consideration for goods or services provided
to the payor by the donee organization. A quid pro quo contribution
does not include any payment made to an organization, organized
exclusively for religious purposes, in return for which the taxpayer
receives solely an intangible religious benefit that generally is not
sold in a commercial transaction outside the donative context.''
(b) Penalty for Failure To Disclose.--Part I of subchapter B of
chapter 68 (relating to assessable penalties) is amended by inserting
after section 6713 the following new section:
``SEC. 6714. FAILURE TO MEET DISCLOSURE REQUIREMENTS APPLICABLE TO QUID
PRO QUO CONTRIBUTIONS.
``(a) Imposition of Penalty.--If an organization fails to meet the
disclosure requirement of section 6115 with respect to a quid pro quo
contribution, such organization shall pay a penalty of $10 for each
contribution in respect of which the organization fails to make the
required disclosure, except that the total penalty imposed by this
subsection with respect to a particular fundraising event or mailing
shall not exceed $5,000.
``(b) Reasonable Cause Exception.--No penalty shall be imposed
under this section with respect to any failure if it is shown that such
failure is due to reasonable cause.''
(c) Clerical Amendments.--
(1) The table for subchapter B of chapter 61 is amended by
striking the item relating to section 6115 and inserting the
following new items:
``Sec. 6115. Disclosure related to quid
pro quo contributions.
``Sec. 6116. Cross reference.''
(2) The table for part I of subchapter B of chapter 68 is
amended by inserting after the item for section 6713 the
following new item:
``Sec. 6714. Failure to meet disclosure
requirements applicable to quid
pro quo contributions.''
(d) Effective Date.--The provisions of this section shall apply to
quid pro quo contributions made on or after January 1, 1994.
SEC. 8174. CERTAIN TRANSFERS TO RAILROAD RETIREMENT ACCOUNT MADE
PERMANENT.
Subsection (c)(1)(A) of section 224 of the Railroad Retirement
Solvency Act of 1983 (relating to section 72(r) revenue increase
transferred to certain railroad accounts) is amended by striking ``with
respect to benefits received before October 1, 1992''.
SEC. 8175. TEMPORARY EXTENSION OF DEDUCTION FOR HEALTH INSURANCE COSTS
OF SELF-EMPLOYED INDIVIDUALS.
(a) In General.--
(1) Extension.--Paragraph (6) of section 162(l) (relating
to special rules for health insurance costs of self-employed
individuals) is amended by striking ``June 30, 1992'' and
inserting ``December 31, 1993''.
(2) Conforming amendment.--Paragraph (2) of section 110(a)
of the Tax Extension Act of 1991 is hereby repealed.
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years ending after June 30, 1992.
(b) Determination of Eligibility for Employer-Sponsored Health
Plan.--
(1) In general.--Paragraph (2)(B) of section 162(l) is
amended to read as follows:
``(B) Other coverage.--Paragraph (1) shall not
apply to any taxpayer for any calendar month for which
the taxpayer is eligible to participate in any
subsidized health plan maintained by any employer of
the taxpayer or of the spouse of the taxpayer.''
(2) Effective date.--The amendment made by paragraph (1)
shall apply to taxable years beginning after December 31, 1992.
Part VII--Investment in Indian Reservations
SEC. 8181. INVESTMENT TAX CREDIT FOR PROPERTY ON INDIAN RESERVATIONS.
(a) Allowance of Indian Reservation Credit.--Section 46 (relating
to investment credits) is amended by striking ``and'' at the end of
paragraph (2), by striking the period at the end of paragraph (3) and
inserting ``, and'', and by adding after paragraph (3) the following
new paragraph:
``(4) the Indian reservation credit.''
(b) Amount of Indian Reservation Credit.--
(1) In general.--Section 48 (relating to the energy credit
and the reforestation credit) is amended by adding after
subsection (b) the following new subsection:
``(c) Indian Reservation Credit.--
``(1) In general.--For purposes of section 46, the Indian
reservation credit for any taxable year is the Indian
reservation percentage of the qualified investment in qualified
Indian reservation property placed in service during such
taxable year, determined in accordance with the following
table:
``In the case of qualified
Indian reservation property
The Indian reservation
which is:
percentage is:
Reservation personal property...... 10
New reservation construction 15
property.
Reservation infrastructure 15.
investment.
``(2) Qualified investment in qualified indian reservation
property defined.--For purposes of this subpart--
``(A) In general.--The term `qualified Indian
reservation property' means property--
``(i) which is--
``(I) reservation personal
property,
``(II) new reservation construction
property, or
``(III) reservation infrastructure
investment, and
``(ii) not acquired (directly or
indirectly) by the taxpayer from a person who
is related to the taxpayer (within the meaning
of section 465(b)(3)(C)).
The term `qualified Indian reservation property' does
not include any property (or any portion thereof)
placed in service for purposes of conducting or housing
class I, II, or III gaming (as defined in section 4 of
the Indian Regulatory Act (25 U.S.C. 2703)).
``(B) Qualified investment.--The term `qualified
investment' means--
``(i) in the case of reservation
infrastructure investment, the amount expended
by the taxpayer for the acquisition or
construction of the reservation infrastructure
investment; and
``(ii) in the case of all other qualified
Indian reservation property, the taxpayer's
basis for such property.
``(C) Reservation personal property.--The term
`reservation personal property' means qualified
personal property which is used by the taxpayer
predominantly in the active conduct of a trade or
business within an Indian reservation. Property shall
not be treated as `reservation personal property' if it
is used or located outside the Indian reservation on a
regular basis.
``(D) Qualified personal property.--The term
`qualified personal property' means property--
``(i) for which depreciation is allowable
under section 168,
``(ii) which is not--
``(I) nonresidential real property,
``(II) residential rental property,
or
``(III) real property which is not
described in (I) or (II) and which has
a class life of more than 12.5 years.
For purposes of this subparagraph, the terms
`nonresidential real property', `residential rental
property', and `class life' have the respective
meanings given such terms by section 168.
``(E) New reservation construction property.--The
term `new reservation construction property' means
qualified real property--
``(i) which is located in an Indian
reservation,
``(ii) which is used by the taxpayer
predominantly in the active conduct of a trade
or business within an Indian reservation, and
``(iii) which is originally placed in
service by the taxpayer.
``(F) Qualified real property.--The term `qualified
real property' means property for which depreciation is
allowable under section 168 and which is described in
clause (I), (II), or (III) of subparagraph (D)(ii).
``(G) Reservation infrastructure investment.--
``(i) In general.--The term `reservation
infrastructure investment' means qualified
personal property or qualified real property
which--
``(I) benefits the tribal
infrastructure,
``(II) is available to the general
public, and
``(III) is placed in service in
connection with the taxpayer's active
conduct of a trade or business within
an Indian reservation.
``(ii) Property may be located outside the
reservation.--Qualified personal property and
qualified real property used or located outside
an Indian reservation shall be reservation
infrastructure investment only if its purpose
is to connect to existing tribal infrastructure
in the reservation, and shall include, but not
be limited to, roads, power lines, water
systems, railroad spurs, and communications
facilities.
``(H) Coordination with other credits.--The term
`qualified Indian reservation property' shall not
include any property with respect to which the energy
credit or the rehabilitation credit is allowed.
``(3) Real estate rentals.--For purposes of this section,
the rental to others of real property located within an Indian
reservation shall be treated as the active conduct of a trade
or business in an Indian reservation.
``(4) Indian reservation defined.--For purposes of this
subpart, the term `Indian reservation' means a reservation, as
defined in--
``(A) section 3(d) of the Indian Financing Act of
1974 (25 U.S.C. 1452(d)), or
``(B) section 4(10) of the Indian Child Welfare Act
of 1978 (25 U.S.C. 1903(10)).
``(5) Limitation based on unemployment.--
``(A) General rule.--The Indian reservation credit
allowed under section 46 for any taxable year shall
equal--
``(i) if the Indian unemployment rate on
the applicable Indian reservation for which the
credit is sought exceeds 300 percent of the
national average unemployment rate at any time
during the calendar year in which the property
is placed in service or during the immediately
preceding 2 calendar years, 100 percent of such
credit,
``(ii) if such Indian unemployment rate
exceeds 150 percent but not 300 percent, 50
percent of such credit, and
``(iii) if such Indian unemployment rate
does not exceed 150 percent, 0 percent of such
credit.
``(B) Special rule for large projects.--In the case
of a qualified Indian reservation property which has
(or is a component of a project which has) a projected
construction period of more than 2 years or a cost of
more than $1,000,000, subparagraph (A) shall apply by
substituting `during the earlier of the calendar year
in which the taxpayer enters into a binding agreement
to make a qualified investment or the first calendar
year in which the taxpayer has expended at least 10
percent of the taxpayer's qualified investment, or the
preceding calendar year' for `during the calendar year
in which the property is placed in service or during
the immediately preceding 2 calendar years'.
``(C) Determination of indian unemployment.--For
purposes of this paragraph, with respect to any Indian
reservation, the Indian unemployment rate shall be
based upon Indians unemployed and able to work, and
shall be certified by the Secretary of the Interior.
``(6) Coordination with nonrevenue laws.--Any reference in
this subsection to a provision not contained in this title
shall be treated for purposes of this subsection as a reference
to such provision as in effect on the date of the enactment of
this paragraph.''
(2) Lodging to qualify.--Paragraph (2) of section 50(b)
(relating to property used for lodging) is amended--
(A) by striking ``and'' at the end of subparagraph
(C),
(B) by striking the period at the end of
subparagraph (D) and inserting ``; and'' and
(C) by adding at the end thereof the following
subparagraph:
``(E) new reservation construction property.''
(c) Recapture.--Subsection (a) of section 50 (relating to recapture
in case of dispositions, etc.), is amended by adding at the end thereof
the following new paragraph:
``(6) Special rules for indian reservation property.--
``(A) In general.--If, during any taxable year,
property with respect to which the taxpayer claimed an
Indian reservation credit--
``(i) is disposed of, or
``(ii) in the case of reservation personal
property--
``(I) otherwise ceases to be
investment credit property with respect
to the taxpayer, or
``(II) is removed from the Indian
reservation, converted or otherwise
ceases to be Indian reservation
property,
the tax under this chapter for such taxable year shall
be increased by the amount described in subparagraph
(B).
``(B) Amount of increase.--The increase in tax
under subparagraph (A) shall equal the aggregate
decrease in the credits allowed under section 38 by
reason of section 48(c) for all prior taxable years
which would have resulted had the qualified investment
taken into account with respect to the property been
limited to an amount which bears the same ratio to the
qualified investment with respect to such property as
the period such property was held by the taxpayer bears
to the applicable recovery period under section 168(g).
``(C) Coordination with other recapture
provisions.--In the case of property to which this
paragraph applies, paragraph (1) shall not apply and
the rules of paragraphs (3), (4), and (5) shall
apply.''
(d) Basis Adjustment To Reflect Investment Credit.--Paragraph (3)
of section 50(c) (relating to basis adjustment to investment credit
property) is amended by striking ``energy credit or reforestation
credit'' and inserting ``energy credit, reforestation credit or Indian
reservation credit other than with respect to any expenditure for new
reservation construction property''.
(e) Certain Governmental Use Property To Qualify.--Paragraph (4) of
section 50(b) (relating to property used by governmental units or
foreign persons or entities) is amended by redesignating subparagraphs
(D) and (E) as subparagraphs (E) and (F), respectively, and inserting
after subparagraph (C) the following new subparagraph:
``(D) Exception for reservation infrastructure
investment.--This paragraph shall not apply for
purposes of determining the Indian reservation credit
with respect to reservation infrastructure
investment.''
(f) Application of At-Risk Rules.--Subparagraph (C) of section
49(a)(1) is amended by striking ``and'' at the end of clause (ii), by
striking the period at the end of clause (iii) and inserting ``, and'',
and by adding at the end the following new clause:
``(iv) the qualified investment in
qualified Indian reservation property.''
(g) Clerical Amendments.--
(1) Section 48 is amended by striking the heading and
inserting the following:
``SEC. 48. ENERGY CREDIT; REFORESTATION CREDIT; INDIAN RESERVATION
CREDIT.''
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by striking out the item
relating to section 48 and inserting the following:
``Sec. 48. Energy credit; reforestation
credit; Indian reservation
credit.''
(h) Effective Date.--The amendments made by this section shall
apply to property placed in service after December 31, 1993.
SEC. 8182. INDIAN EMPLOYMENT CREDIT.
(a) Allowance of Indian Employment Credit.--Section 38(b) (relating
to general business credits) is amended by striking ``plus'' at the end
of paragraph (6), by striking the period at the end of paragraph (7)
and inserting ``, plus'', and by adding after paragraph (7) the
following new paragraph:
``(8) the Indian employment credit as determined under
section 45(a).''
(b) Amount of Indian Employment Credit.--Subpart D of Part IV of
subchapter A of chapter 1 (relating to business related credits) is
amended by adding at the end thereof the following new section:
``SEC. 45. INDIAN EMPLOYMENT CREDIT.
``(a) Amount of Credit.--
``(1) In general.--For purposes of section 38, the amount
of the Indian employment credit determined under this section
with respect to any employer for any taxable year is 10 percent
(30 percent in the case of an employer with at least 85 percent
Indian employees throughout the taxable year) of the sum of--
``(A) the qualified wages paid or incurred during
such taxable year, plus
``(B) qualified employee health insurance costs
paid or incurred during such taxable year.
In no event shall the amount of the Indian employment credit
for any taxable year exceed the credit limitation amount
determined under subsection (e) for such taxable year.
``(2) Indian employee.--For purposes of paragraph (1), the
term `Indian employee' means an employee who is an enrolled
member of an Indian tribe or the spouse of such a member.
``(b) Qualified Wages; Qualified Employee Health Insurance Costs.--
For purposes of this section--
``(1) Qualified wages.--
``(A) In general.--The term `qualified wages' means
any wages paid or incurred by an employer for services
performed by an employee while such employee is a
qualified employee.
``(B) Coordination with targeted jobs credit.--The
term `qualified wages' shall not include wages
attributable to service rendered during the 1-year
period beginning with the day the individual begins
work for the employer if any portion of such wages is
taken into account in determining the credit under
section 51.
``(2) Qualified employee health insurance costs.--
``(A) In general.--The term `qualified employee
health insurance costs' means any amount paid or
incurred by an employer for health insurance to the
extent such amount is attributable to coverage provided
to any employee while such employee is a qualified
employee.
``(B) Exception for amounts paid under salary
reduction arrangements.--No amount paid or incurred for
health insurance pursuant to a salary reduction
arrangement shall be taken into account under
subparagraph (A).
``(c) Qualified Employee.--For purposes of this section--
``(1) In general.--Except as otherwise provided in this
subsection, the term `qualified employee' means, with respect
to any period, any employee of an employer if--
``(A) substantially all of the services performed
during such period by such employee for such employer
are performed within an Indian reservation,
``(B) the principal place of abode of such employee
while performing such services is on or near the
reservation in which the services are performed, and
``(C) the employee began work for such employer on
or after January 1, 1994.
``(2) Credit allowed only for first 7 years.--An employee
shall not be treated as a qualified employee for any period
after the date 7 years after the day on which such employee
first began work for the employer.
``(3) Individuals receiving wages in excess of $30,000 not
eligible.--An employee shall not be treated as a qualified
employee for any taxable year of the employer if the total
amount of the wages paid or incurred by such employer to such
employee during such taxable year (whether or not for services
within an Indian reservation) exceeds the amount determined at
an annual rate of $30,000. The Secretary shall adjust the
$30,000 amount contained in the preceding sentence for years
beginning after 1993 at the same time and in the same manner as
under section 415(d).
``(4) Employment must be trade or business employment.--An
employee shall be treated as a qualified employee for any
taxable year of the employer only if more than 50 percent of
the wages paid or incurred by the employer to such employee
during such taxable year are for services performed in a trade
or business of the employer. Any determination as to whether
the preceding sentence applies with respect to any employee for
any taxable year shall be made without regard to subsection
(f)(2).
``(5) Certain employees not eligible.--The term `qualified
employee' shall not include--
``(A) any individual described in subparagraph (A),
(B), or (C) of section 51(i)(1),
``(B) any 5-percent owner (as defined in section
416(i)(1)(B)),
``(C) any individual who is neither an enrolled
member of an Indian tribe nor the spouse of an enrolled
member of an Indian tribe, and
``(D) any individual if the services performed by
such individual for the employer involve the conduct of
class I, II, or III gaming as defined in section 4 of
the Indian Gaming Regulatory Act (25 U.S.C. 2703), or
are performed in a building housing such gaming
activity.
``(6) Indian tribe defined.--The term `Indian tribe' means
any Indian tribe, band, nation, pueblo, or other organized
group or community, including any Alaska Native village, or
regional or village corporation, as defined in, or established
pursuant to, the Alaska Native Claims Settlement Act (43 U.S.C.
1601 et seq.) which is recognized as eligible for the special
programs and services provided by the United States to Indians
because of their status as Indians.
``(7) Indian reservation defined.--The term `Indian
reservation' means a reservation, as defined in--
``(A) section 3(d) of the Indian Financing Act of
1974 (25 U.S.C. 1452(d)), or
``(B) section 4(10) of the Indian Child Welfare Act
of 1978 (25 U.S.C. 1903 (10)).
``(d) Early Termination of Employment by Employer.--
``(1) In general.--If the employment of any employee is
terminated by the taxpayer before the day 1 year after the day
on which such employee began work for the employer--
``(A) no wages (or qualified employee health
insurance costs) with respect to such employee shall be
taken into account under subsection (a) for the taxable
year in which such employment is terminated, and
``(B) the tax under this chapter for the taxable
year in which such employment is terminated shall be
increased by the aggregate credits (if any) allowed
under section 38(a) for prior taxable years by reason
of wages (or qualified employee health insurance costs)
taken into account with respect to such employee.
``(2) Carrybacks and carryovers adjusted.--In the case of
any termination of employment to which paragraph (1) applies,
the carrybacks and carryovers under section 39 shall be
properly adjusted.
``(3) Subsection not to apply in certain cases.--
``(A) In general.--Paragraph (1) shall not apply
to--
``(i) a termination of employment of an
employee who voluntarily leaves the employment
of the taxpayer,
``(ii) a termination of employment of an
individual who before the close of the period
referred to in paragraph (1) becomes disabled
to perform the services of such employment
unless such disability is removed before the
close of such period and the taxpayer fails to
offer reemployment to such individual, or
``(iii) a termination of employment of an
individual if it is determined under the
applicable State unemployment compensation law
that the termination was due to the misconduct
of such individual.
``(B) Changes in form of business.--For purposes of
paragraph (1), the employment relationship between the
taxpayer and an employee shall not be treated as
terminated--
``(i) by a transaction to which section
381(a) applies if the employee continues to be
employed by the acquiring corporation, or
``(ii) by reason of a mere change in the
form of conducting the trade or business of the
taxpayer if the employee continues to be
employed in such trade or business and the
taxpayer retains a substantial interest in such
trade or business.
``(4) Special rule.--Any increase in tax under paragraph
(1) shall not be treated as a tax imposed by this chapter for
purposes of--
``(A) determining the amount of any credit
allowable under this chapter, and
``(B) determining the amount of the tax imposed by
section 55.
``(e) Credit Limitation Amount.--For purposes of this section--
``(1) Credit limitation amount.--The credit limitation
amount for a taxable year shall be an amount equal to the
credit rate (10 or 30 percent as determined under subsection
(a)) multiplied by the increased credit base.
``(2) Increased credit base.--The increased credit base for
a taxable year shall be the excess of--
``(A) the sum of any qualified wages and qualified
employee health insurance costs paid or incurred by the
employer during the taxable year with respect to
employees whose wages (paid or incurred by the
employer) during the taxable year do not exceed the
amount determined under paragraph (3) of subsection
(c), over
``(B) the sum of any qualified wages and qualified
employee health insurance costs paid or incurred by the
employer (or any predecessor) during calendar year 1993
with respect to employees whose wages (paid or incurred
by the employer or any predecessor) during 1993 did not
exceed $30,000.
``(3) Special rule for short taxable years.--For any
taxable year having less than 12 months--
``(A) the amounts paid or incurred by the employer
shall be annualized for purposes of determining the
increased credit base, and
``(B) the credit limitation amount shall be
multiplied by a fraction, the numerator of which is the
number of days in the taxable year and the denominator
of which is 365.
``(f) Other Definitions and Special Rules.--For purposes of this
section--
``(1) Wages.--The term `wages' has the same meaning given
to such term in section 51.
``(2) Controlled groups.--
``(A) All employers treated as a single employer
under section (a) or (b) of section 52 shall be treated
as a single employer for purposes of this section.
``(B) The credit (if any) determined under this
section with respect to each such employer shall be its
proportionate share of the wages and qualified employee
health insurance costs giving rise to such credit.
``(3) Certain other rules made applicable.--Rules similar
to the rules of section 51(k) and subsections (c), (d), and (e)
of section 52 shall apply.
``(4) Coordination with nonrevenue laws.--Any reference in
this section to a provision not contained in this title shall
be treated for purposes of this section as a reference to such
provision as in effect on the date of the enactment of this
paragraph.''
(c) Denial of Deduction for Portion of Wages Equal to Indian
Employment Credit.--
(1) Subsection (a) of section 280C (relating to rule for
targeted jobs credit) is amended by striking ``51(a)'' and
inserting ``45(a), 51(a), and''.
(2) Subsection (c) of section 196 (relating to deduction
for certain unused business credits) is amended by striking
``and'' at the end of paragraph (5), by striking the period at
the end of paragraph (6) and inserting ``, and'', and by adding
at the end the following new paragraph:
``(7) the Indian employment credit determined under section
45(a).''
(d) Denial of Carrybacks to Preenactment Years.--Subsection (d) of
section 39 is amended by adding at the end thereof the following new
paragraph:
``(4) No carryback of section 45 credit before enactment.--
No portion of the unused business credit for any taxable year
which is attributable to the Indian employment credit
determined under section 45 may be carried to a taxable year
ending before the date of the enactment of section 45.''
(e) Clerical Amendment.--The table of sections for subpart D of
part IV of subchapter A of chapter 1 is amended by adding at the end
thereof the following:
``Sec. 45. Indian employment credit.''
(f) Effective Date.--The amendments made by this section shall
apply to wages paid or incurred after December 31, 1993.
Subtitle B--Revenue Increases
PART I--PROVISIONS AFFECTING INDIVIDUALS
Subpart A--Rate Increases
SEC. 8201. INCREASE IN TOP MARGINAL RATE UNDER SECTION 1.
(a) General Rule.--Section 1 (relating to tax imposed) is amended
by striking subsections (a) through (e) and inserting the following:
``(a) Married Individuals Filing Joint Returns and Surviving
Spouses.--There is hereby imposed on the taxable income of--
``(1) every married individual (as defined in section 7703)
who makes a single return jointly with his spouse under section
6013, and
``(2) every surviving spouse (as defined in section 2(a)),
a tax determined in accordance with the following table:
``If taxable income is: The tax is:
Not over $36,900...............
15% of taxable income.
Over $36,900 but not over
$89,150.
$5,535, plus 28% of the excess
over $36,900.
Over $89,150 but not over
$140,000.
$20,165, plus 31% of the excess
over $89,150.
Over $140,000..................
$35,928.50, plus 36% of the
excess over $140,000.
``(b) Heads of Households.--There is hereby imposed on the taxable
income of every head of a household (as defined in section 2(b)) a tax
determined in accordance with the following table:
``If taxable income is: The tax is:
Not over $29,600...............
15% of taxable income.
Over $29,600 but not over
$76,400.
$4,440, plus 28% of the excess
over $29,600.
Over $76,400 but not over
$127,500.
$17,544, plus 31% of the excess
over $76,400.
Over $127,500..................
$33,385, plus 36% of the excess
over $127,500.
``(c) Unmarried Individuals (Other Than Surviving Spouses and Heads
of Households).--There is hereby imposed on the taxable income of every
individual (other than a surviving spouse as defined in section 2(a) or
the head of a household as defined in section 2(b)) who is not a
married individual (as defined in section 7703) a tax determined in
accordance with the following table:
``If taxable income is: The tax is:
Not over $22,100...............
15% of taxable income.
Over $22,100 but not over
$53,500.
$3,315, plus 28% of the excess
over $22,100.
Over $53,500 but not over
$115,000.
$12,107, plus 31% of the excess
over $53,500.
Over $115,000..................
$31,172, plus 36% of the excess
over $115,000.
``(d) Married Individuals Filing Separate Returns.--There is hereby
imposed on the taxable income of every married individual (as defined
in section 7703) who does not make a single return jointly with his
spouse under section 6013, a tax determined in accordance with the
following table:
``If taxable income is: The tax is:
Not over $18,450...............
15% of taxable income.
Over $18,450 but not over
$44,575.
$2,767.50, plus 28% of the
excess over $18,450.
Over $44,575 but not over
$70,000.
$10,082.50, plus 31% of the
excess over $44,575.
Over $70,000...................
$17,964.25, plus 36% of the
excess over $70,000.
``(e) Estates and Trusts.--There is hereby imposed on the taxable
income of--
``(1) every estate, and
``(2) every trust,
taxable under this subsection a tax determined in accordance with the
following table:
``If taxable income is: The tax is:
Not over $1,500................
15% of taxable income.
Over $1,500 but not over $3,500
$225, plus 28% of the excess
over $1,500.
Over $3,500 but not over $5,500
$785, plus 31% of the excess
over $3,500.
Over $5,500....................
$1,405, plus 36% of the excess
over $5,500.''
(b) Conforming Amendments.--
(1) Section 531 is amended by striking ``28 percent'' and
inserting ``36 percent''.
(2) Section 541 is amended by striking ``28 percent'' and
inserting ``36 percent''.
(3)(A) Subsection (f) of section 1 is amended--
(i) by striking ``1990'' in paragraph (1) and
inserting``1993'', and
(ii) by striking ``1989'' in paragraph (3)(B) and
inserting ``1992''.
(B) Subsection (f) of section 1 is amended by adding at the
end thereof the following new paragraph:
``(7) Special rule for certain brackets.--
``(A) Calendar year 1994.--In prescribing the
tables under paragraph (1) which apply with respect to
taxable years beginning in calendar year 1994, the
Secretary shall make no adjustment to the dollar
amounts at which the 36 percent rate bracket begins or
at which the 39.6 percent rate begins under any table
contained in subsection (a), (b), (c), (d), or (e).
``(B) Later calendar years.--In prescribing tables
under paragraph (1) which apply with respect to taxable
years beginning in a calendar year after 1994, the
cost-of-living adjustment used in making adjustments to
the dollar amounts referred to in subparagraph (A)
shall be determined under paragraph (3) by substituting
`1993' for `1992'.''
(C) Subparagraph (C) of section 41(e)(5) is amended by
striking ``1989'' each place it appears and inserting ``1992''.
(D) Subparagraph (B) of section 63(c)(4) is amended by
striking ``1989'' and inserting ``1992''.
(E) Subparagraph (B) of section 68(b)(2) is amended by
striking ``1989'' and inserting ``1992''.
(F) Subparagraph (B) of section 132(f)(6) is amended by
striking ``, determined by substituting'' and all that follows
down through the period at the end thereof and inserting a
period.
(G) Subparagraphs (A)(ii) and (B)(ii) of section 151(d)(4)
are each amended by striking ``1989'' and inserting ``1992''.
(H) Clause (ii) of section 513(h)(2)(C) is amended by
striking ``1989'' and inserting ``1992''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 8202. SURTAX ON HIGH-INCOME TAXPAYERS.
(a) General Rule.--
(1) Subsection (a) of section 1 (as amended by section
8201) is amended by striking the last item in the table
contained therein and inserting the following:
``Over $140,000 but not over
$250,000.
$35,928.50, plus 36% of the
excess over $140,000.
Over $250,000..................
$75,528.50, plus 39.6% of the
excess over $250,000.''
(2) Subsection (b) of section 1 (as so amended) is amended
by striking the last item in the table contained therein and
inserting the following:
``Over $127,500 but not over
$250,000.
$33,385, plus 36% of the excess
over $127,500.
Over $250,000..................
$77,485, plus 39.6% of the
excess over $250,000.''
(3) Subsection (c) of section 1 (as so amended) is amended
by striking the last item in the table contained therein and
inserting the following:
``Over $115,000 but not over
$250,000.
$31,172, plus 36% of the excess
over $115,000.
Over $250,000..................
$79,772, plus 39.6% of the
excess over $250,000.''
(4) Subsection (d) of section 1 (as so amended) is amended
by striking the last item in the table contained therein and
inserting the following:
``Over $70,000 but not over
$125,000.
$17,964.25, plus 36% of the
excess over $70,000.
Over $125,000..................
$37,764.25, plus 39.6% of the
excess over $125,000.''
(5) Subsection (e) of section 1 (as so amended) is amended
by striking the last item in the table contained therein and
inserting the following:
``Over $5,500 but not over
$7,500.
$1,405, plus 36% of the excess
over $5,500.
Over $7,500....................
$2,125, plus 39.6% of the
excess over $7,500.''
(b) Surtax on Net Capital Gains.--Section 1(h) (relating to maximum
capital gains rate) is amended by striking the period at the end of
paragraph (2) and inserting ``, plus'', and by adding at the end the
following new paragraph:
``(3) a tax of 2.8 percent of the lesser of--
``(A) the net capital gain, or
``(B) the amount of taxable income in excess of the
dollar amount at which the last rate bracket begins for
such taxable year in the table contained in subsection
(a), (b), (c), (d), or (e), whichever is applicable.''
(c) Technical Amendment.--Sections 531 and 541 (as amended by
section 8201) are each amended by striking ``36 percent'' and inserting
``39.6 percent''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 8203. MODIFICATIONS TO ALTERNATIVE MINIMUM TAX RATES AND EXEMPTION
AMOUNTS.
(a) Increase in Rate.--Paragraph (1) of section 55(b) (defining
tentative minimum tax) is amended to read as follows:
``(1) Amount of tentative tax.--
``(A) Noncorporate taxpayers.--
``(i) In general.--In the case of a
taxpayer other than a corporation, the
tentative minimum tax for the taxable year is
the sum of--
``(I) 26 percent of so much of the
taxable excess as does not exceed
$175,000, plus
``(II) 28 percent of so much of the
taxable excess as exceeds $175,000.
The amount determined under the preceding
sentence shall be reduced by the alternative
minimum tax foreign tax credit for the taxable
year.
``(ii) Taxable excess.--For purposes of
clause (i), the term `taxable excess' means so
much of the alternative minimum taxable income
for the taxable year as exceeds the exemption
amount.
``(iii) Married individual filing separate
return.--In the case of a married individual
filing a separate return, clause (i) shall be
applied by substituting `$87,500' for
`$175,000' each place it appears. For purposes
of the preceding sentence, marital status shall
be determined under section 7703.
``(B) Corporations.--In the case of a corporation,
the tentative minimum tax for the taxable year is--
``(i) 20 percent of so much of the
alternative minimum taxable income for the
taxable year as exceeds the exemption amount,
reduced by
``(ii) the alternative minimum tax foreign
tax credit for the taxable year.''
(b) Increase in Exemption Amounts.--Paragraph (1) of section 55(d)
(defining exemption amount) is amended--
(1) by striking ``$40,000'' in subparagraph (A) and
inserting ``$45,000'',
(2) by striking ``$30,000'' in subparagraph (B) and
inserting ``$33,750'', and
(3) by striking ``$20,000'' in subparagraph (C) and
inserting ``$22,500''.
(c) Conforming Amendments.--
(1) The last sentence of section 55(d)(3) is amended by
striking ``$155,000 or (ii) $20,000'' and inserting ``$165,000
or (ii) $22,500''.
(2)(A) Subparagraph (A) of section 897(a)(2) is amended by
striking ``the amount determined under section 55(b)(1)(A)
shall not be less than 21 percent of'' and inserting ``the
taxable excess for purposes of section 55(b)(1)(A) shall not be
less than''.
(B) The heading for paragraph (2) of section 897(a) is
amended by striking ``21-percent''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 8203A. RATE INCREASES NOT TO TAKE EFFECT UNTIL JULY 1, 1993.
(a) In General.--Section 1 (relating to tax imposed) is amended by
adding at the end the following new subsection:
``(i) Special Rules for Taxable Years Beginning in 1993.--
``(1) In general.--In the case of taxable years beginning
in calendar year 1993, each of the tables contained in
subsections (a), (b), (c), (d), and (e) shall be applied--
``(A) by substituting `33.5 percent' for `36
percent',
``(B) by substituting `35.3 percent' for `39.6
percent', and
``(C) by substituting for the dollar amount of tax
in the last rate bracket the dollar amount determined
under the table contained in paragraph (2).
``(2) Dollar amount of tax.--The dollar amount substituted
under paragraph (1) shall be determined as follows:
``In the case of: The dollar amount is:
Subsection (a)...........
$72,778.50 for
$75,528.50.
Subsection (b)...........
$74,422.50 for
$77,485.00.
Subsection (c)...........
$76,397.00 for
$79,772.00.
Subsection (d)...........
$36,389.25 for
$37,764.25.
Subsection (e)...........
$2,075.00 for
$2,125.00.''
(b) Conforming Amendments.--
(1) Sections 531 and 541 (as amended by section 8202) are
each amended by inserting ``(35.3 percent in the case of
taxable years beginning in calendar year 1993)'' after ``39.6
percent''.
(2) Section 1(h)(3), as added by section 8202(b), is
amended by inserting ``(1.4 percent in the case of taxable
years beginning in calendar year 1993)'' after ``2.8 percent''.
(3) Paragraph (1) of section 55(b), as amended by section
8203, is amended by adding at the end the following new
subparagraph:
``(C) Special rules for 1993.--In the case of any
taxable year beginning in the calendar year 1993,
subparagraph (A)(i) shall be applied by substituting--
``(i) `25 percent' for `26 percent' in
subclause (I), and
``(ii) `26 percent' for `28 percent' in
subclause (II).''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 8204. OVERALL LIMITATION ON ITEMIZED DEDUCTIONS FOR HIGH-INCOME
TAXPAYERS MADE PERMANENT.
Subsection (f) of section 68 (relating to overall limitation on
itemized deductions) is hereby repealed.
SEC. 8205. PHASEOUT OF PERSONAL EXEMPTION OF HIGH-INCOME TAXPAYERS MADE
PERMANENT.
Section 151(d)(3) (relating to phaseout of personal exemption) is
amended by striking subparagraph (E).
SEC. 8206. PROVISIONS TO PREVENT CONVERSION OF ORDINARY INCOME TO
CAPITAL GAIN.
(a) Interest Embedded in Financial Transactions.--
(1) In general.--Part IV of subchapter P of chapter 1
(relating to special rules for determining capital gains and
losses) is amended by adding at the end the following new
section:
``SEC. 1258. RECHARACTERIZATION OF GAIN FROM CERTAIN FINANCIAL
TRANSACTIONS.
``(a) General Rule.--In the case of any gain--
``(1) which (but for this section) would be treated as gain
from the sale or exchange of a capital asset, and
``(2) which is recognized on the disposition or other
termination of any position which was held as part of a
conversion transaction,
such gain (to the extent such gain does not exceed the applicable
imputed income amount) shall be treated as ordinary income.
``(b) Applicable Imputed Income Amount.--For purposes of subsection
(a), the term `applicable imputed income amount' means, with respect to
any disposition or other termination referred to in subsection (a), an
amount equal to--
``(1) the amount of interest which would have accrued on
the taxpayer's net investment in the conversion transaction for
the period ending on the date of such disposition or other
termination (or, if earlier, the date on which the requirements
of subsection (c) ceased to be satisfied) at a rate equal to
120 percent of the applicable rate, reduced by
``(2) the amount treated as ordinary income under
subsection (a) with respect to any prior disposition or other
termination of a position which was held as a part of such
transaction.
The Secretary shall by regulations provide for such reductions in the
applicable imputed income amount as may be appropriate by reason of
amounts capitalized under section 263(g), ordinary income received, or
otherwise.
``(c) Conversion Transaction.--For purposes of this section, the
term `conversion transaction' means any transaction--
``(1) substantially all of the taxpayer's expected return
from which is attributable to the time value of the taxpayer's
net investment in such transaction, and
``(2) which is--
``(A) the holding of any property (whether or not
actively traded), and the entering into a contract to
sell such property (or substantially identical
property) at a price determined in accordance with such
contract, but only if such property was acquired and
such contract was entered into on a substantially
contemporaneous basis,
``(B) an applicable straddle,
``(C) any other transaction which is marketed or
sold as producing capital gains and as a transaction
described in paragraph (1), or
``(D) any other transaction specified in
regulations prescribed by the Secretary.
``(d) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable straddle.--The term `applicable straddle'
means any straddle (within the meaning of section 1092(c));
except that the term `personal property' shall include stock.
``(2) Applicable rate.--The term `applicable rate' means--
``(A) the applicable Federal rate determined under
section 1274(d) (compounded semiannually) as if the
conversion transaction were a debt instrument, or
``(B) if the term of the conversion transaction is
indefinite, the Federal short-term rates in effect
under section 6621(b) during the period of the
conversion transaction (compounded daily).
``(3) Treatment of built-in losses.--
``(A) In general.--If any position with a built-in
loss becomes part of a conversion transaction--
``(i) for purposes of applying this
subtitle to such position for periods after
such position becomes part of such transaction,
such position shall be taken into account at
its fair market value as of the time it became
part of such transaction, except that
``(ii) upon the disposition or other
termination of such position in a transaction
in which gain or loss is recognized, such
built-in loss shall be recognized and shall
have a character determined without regard to
this section.
``(B) Built-in loss.--For purposes of subparagraph
(A), the term `built-in loss' means the loss (if any)
which would have been realized if the position had been
disposed of or otherwise terminated at its fair market
value as of the time such position became part of such
transaction.
``(4) Position taken into account at fair market value.--In
determining the taxpayer's net investment in any conversion
transaction, there shall be included the fair market value of
any position which becomes part of such transaction (determined
as of the time such position became part of such transaction).
``(5) Special rule for options dealers and commodities
traders.--
``(A) In general.--Subsection (a) shall not apply
to transactions --
``(i) of an options dealer in the normal
course of the dealer's trade or business of
dealing with options, or
``(ii) of a commodities trader in the
normal course of the trader's trade or business
of trading section 1256 contracts.
``(B) Definitions.--For purposes of this
paragraph--
``(i) Options dealer.--The term `options
dealer' has the meaning given such term by
section 1256(g)(8).
``(ii) Commodities trader.-- The term
`commodities trader' means any person who is a
member (or, to the extent provided in
regulations, is entitled to trade as a member)
of a domestic board of trade which is
designated as a contract market by the
Commodity Futures Trading Commission.
``(C) Limited partners and limited entrepreneurs.--
In the case of any gain from a transaction recognized
by an entity which is allocable to a limited partner or
limited entrepreneur (within the meaning of section
464(e)(2)), subparagraph (A) shall not apply if--
``(i) substantially all of the limited
partner's (or limited entrepreneur's) expected
return from the entity is attributable to the
time value of the partner's (or entrepreneur's)
net investment in such entity,
``(ii) the transaction (or the interest in
the entity) was marketed or sold as producing
capital gains treatment and as a transaction
described in subsection (c)(1), or
``(iii) the transaction (or the interest in
the entity) is a transaction (or interest)
specified in regulations prescribed by the
Secretary.''
(2) Clerical amendment.--The table of sections for part IV
of subchapter P of chapter 1 is amended by adding at the end
thereof the following new item:
``Sec. 1258. Recharacterization of gain
from certain financial
transactions.''
(3) Effective date.--The amendments made by this section
shall apply to conversion transactions entered into after April
30, 1993.
(b) Repeal of Certain Exceptions to Market Discount Rules.--
(1) Market discount bonds issued on or before july 18,
1984.--The following provisions are hereby repealed:
(A) Section 1276(e).
(B) Section 1277(d).
(2) Tax-exempt obligations.--
(A) In general.--Paragraph (1) of section 1278(a)
(defining market discount bond) is amended--
(i) by striking clause (ii) of subparagraph
(B) and redesignating subclauses (iii) and (iv)
of such subparagraph as clauses (ii) and (iii),
respectively,
(ii) by redesignating subparagraph (C) as
subparagraph (D), and
(iii) by inserting after subparagraph (B)
the following new subparagraph:
``(C) Section 1277 not applicable to tax-exempt
obligations.--For purposes of section 1277, the term
`market discount bond' shall not include any tax-exempt
obligation (as defined in section 1275(a)(3)).''
(B) Conforming amendment.--Sections 1276(a)(4) and
1278(b)(1) are each amended by striking ``sections
871(a)'' and inserting ``sections 103, 871(a),''.
(3) Effective date.--The amendments made by this section
shall apply to obligations purchased (within the meaning of
section 1272(d)(1) of the Internal Revenue Code of 1986) after
April 30, 1993.
(c) Treatment of Stripped Preferred Stock.--
(1) In general.--Section 305 is amended by redesignating
subsection (e) as subsection (f) and by inserting after
subsection (d) the following new subsection:
``(e) Treatment of Purchaser of Stripped Preferred Stock.--
``(1) In general.--If any person purchases after April 30,
1993, any stripped preferred stock, then such person, while
holding such stock, shall include in gross income amounts equal
to the amounts which would have been so includible if such
stripped preferred stock were a bond issued on the purchase
date and having original issue discount equal to the excess, if
any, of--
``(A) the redemption price for such stock, over
``(B) the price at which such person purchased such
stock.
The preceding sentence shall also apply in the case of any
person whose basis in such stock is determined by reference to
the basis in the hands of such purchaser.
``(2) Basis adjustments.--Appropriate adjustments to basis
shall be made for amounts includible in gross income under
paragraph (1).
``(3) Tax treatment of person stripping stock.--If any
person strips the rights to 1 or more dividends from any stock
described in paragraph (5)(B) and after April 30, 1993,
disposes of such dividend rights, for purposes of paragraph
(1), such person shall be treated as having purchased the
stripped preferred stock on the date of such disposition for a
purchase price equal to such person's adjusted basis in such
stripped preferred stock.
``(4) Amounts treated as ordinary income.--Any amount
included in gross income under paragraph (1) shall be treated
as ordinary income.
``(5) Stripped preferred stock.--For purposes of this
subsection--
``(A) In general.--The term `stripped preferred
stock' means any stock described in subparagraph (B) if
there has been a separation in ownership between such
stock and any dividend on such stock which has not
become payable.
``(B) Description of stock.--Stock is described in
this subsection if such stock--
``(i) is limited and preferred as to
dividends and does not participate in corporate
growth to any significant extent, and
``(ii) has a fixed redemption price.
``(6) Purchase.--For purposes of this subsection, the term
`purchase' means--
``(A) any acquisition of stock, where
``(B) the basis of such stock is not determined in
whole or in part by the reference to the adjusted basis
of such stock in the hands of the person from whom
acquired.''
(2) Coordination with section 167(e).--Paragraph (2) of
section 167(e) is amended to read as follows:
``(2) Coordination with other provisions.--
``(A) Section 273.--This subsection shall not apply
to any term interest to which section 273 applies.
``(B) Section 305(e).--This subsection shall not
apply to the holder of the dividend rights which were
separated from any stripped preferred stock to which
section 305(e)(1) applies.''
(3) Effective date.--The amendments made by this subsection
shall take effect on April 30, 1993.
(d) Treatment of Capital Gain Under Limitation on Investment
Interest.--
(1) In general.--Subparagraph (B) of section 163(d)(4)
(defining investment income) is amended to read as follows:
``(B) Investment income.--The term `investment
income' means the sum of--
``(i) gross income from property held for
investment (other than any gain taken into
account under clause (ii)(I)),
``(ii) the excess (if any) of--
``(I) the net gain attributable to
the disposition of property held for
investment, over
``(II) the net capital gain
determined by only taking into account
gains and losses from dispositions of
property held for investment, plus
``(iii) so much of the net capital gain
referred to in clause (ii)(II) (or, if lesser,
the net gain referred to in clause (ii)(I)) as
the taxpayer elects to take into account under
this clause.''
(2) Coordination with special capital gains rate.--
Subsection (h) of section 1, as amended by section 8202(b), is
amended by adding at the end the following new sentence:
``For purposes of the preceding sentence, the net capital gain for any
taxable year shall be reduced (but not below zero) by the amount which
the taxpayer elects to take into account as investment income for the
taxable year under section 163(d)(4)(B)(iii).''
(3) Effective date.--The amendments made by this subsection
shall apply to taxable years beginning after December 31, 1992.
(e) Treatment of Certain Appreciated Inventory.--
(1) In general.--Paragraph (1) of section 751(d) is amended
to read as follows:
``(1) Substantial appreciation.--
``(A) In general.--Inventory items of the
partnership shall be considered to have appreciated
substantially in value if their fair market value
exceeds 120 percent of the adjusted basis to the
partnership of such property.
``(B) Certain property excluded.--For purposes of
subparagraph (A), there shall be excluded any inventory
property if a principal purpose for acquiring such
property was to avoid the provisions of this section
relating to inventory items.''
(2) Effective date.--The amendment made by paragraph (1)
shall apply to sales, exchanges, and distributions after April
30, 1993.
Subpart B--Other Provisions
SEC. 8207. REPEAL OF LIMITATION ON AMOUNT OF WAGES SUBJECT TO HEALTH
INSURANCE EMPLOYMENT TAX.
(a) Hospital Insurance Tax.--
(1) Paragraph (1) of section 3121(a) (defining wages) is
amended--
(A) by inserting ``in the case of the taxes imposed
by sections 3101(a) and 3111(a)'' after ``(1)'',
(B) by striking ``applicable contribution base (as
determined under subsection (x))'' each place it
appears and inserting ``contribution and benefit base
(as determined under section 230 of the Social Security
Act)'', and
(C) by striking ``such applicable contribution
base'' and inserting ``such contribution and benefit
base''.
(2) Section 3121 is amended by striking subsection (x).
(b) Self-Employment Tax.--
(1) Subsection (b) of section 1402 is amended--
(A) by striking ``that part of the net'' in
paragraph (1) and inserting ``in the case of the tax
imposed by section 1401(a), that part of the net'',
(B) by striking ``applicable contribution base (as
determined under subsection (k))'' in paragraph (1) and
inserting ``contribution and benefit base (as
determined under section 230 of the Social Security
Act)'',
(C) by inserting ``and'' after ``section
3121(b),'', and
(D) by striking ``and (C) includes'' and all that
follows through ``3111(b)''.
(2) Section 1402 is amended by striking subsection (k).
(c) Railroad Retirement Tax.--
(1) Subparagraph (A) of section 3231(e)(2) is amended by
adding at the end thereof the following new clause:
``(iii) Hospital insurance taxes.--Clause
(i) shall not apply to--
``(I) so much of the rate
applicable under section 3201(a) or
3221(a) as does not exceed the rate of
tax in effect under section 3101(b),
and
``(II) so much of the rate
applicable under section 3211(a)(1) as
does not exceed the rate of tax in
effect under section 1401(b).''
(2) Clause (i) of section 3231(e)(2)(B) is amended to read
as follows:
``(i) Tier 1 taxes.--Except as provided in
clause (ii), the term `applicable base' means
for any calendar year the contribution and
benefit base determined under section 230 of
the Social Security Act for such calendar
year.''
(d) Technical Amendments.--
(1) Paragraph (1) of section 6413(c) is amended by striking
``section 3101 or section 3201'' and inserting ``section
3101(a) or section 3201(a) (to the extent of so much of the
rate applicable under section 3201(a) as does not exceed the
rate of tax in effect under section 3101(a))''.
(2) Subparagraphs (B) and (C) of section 6413(c)(2) are
each amended by striking ``section 3101'' each place it appears
and inserting ``section 3101(a)''.
(3) Subsection (c) of section 6413 is amended by striking
paragraph (3).
(4) Sections 3122 and 3125 are each amended by striking
``applicable contribution base limitation'' and inserting
``contribution and benefit base limitation''.
(e) Effective Date.--The amendments made by this section shall
apply to 1994 and later calendar years.
SEC. 8208. TOP ESTATE AND GIFT TAX RATES MADE PERMANENT.
(a) General Rule.--The table contained in paragraph (1) of section
2001(c) is amended by striking the last item and inserting the
following new items:
``Over $2,500,000 but not over
$3,000,000.
$1,025,800, plus 53% of the
excess over $2,500,000.
Over $3,000,000................
$1,290,800, plus 55% of the
excess over
$3,000,000.''
(b) Conforming Amendments.--
(1) Subsection (c) of section 2001 is amended by striking
paragraph (2) and by redesignating paragraph (3) as paragraph
(2).
(2) Paragraph (2) of section 2001(c), as redesignated by
paragraph (1), is amended by striking ``($18,340,000 in the
case of decedents dying, and gifts made, after 1992)''.
(3) The last sentence of section 2101(b) is amended by
striking ``section 2001(c)(3)'' and inserting ``section
2001(c)(2)''.
(c) Effective Date.--The amendments made by this section shall
apply in the case of decedents dying, and gifts made, after December
31, 1992.
SEC. 8209. REDUCTION IN DEDUCTIBLE PORTION OF BUSINESS MEALS AND
ENTERTAINMENT.
(a) General Rule.--Paragraph (1) of section 274(n) (relating to
only 80 percent of meal and entertainment expenses allowed as
deduction) is amended by striking ``80 percent'' and inserting ``50
percent''.
(b) Substantiation Requirement.--In the case of taxable years
beginning after December 31, 1993, Treasury Regulation Sec. 1.274-
5T(c)(2)(iii)(B) shall be applied by substituting ``$20'' for ``$25''.
(c) Conforming Amendment.--The subsection heading for section
274(n) is amended by striking ``80'' and inserting ``50''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 8209A. SENSE OF THE SENATE RELATING TO THE DEDUCTIBILITY OF
BUSINESS MEALS AND ENTERTAINMENT EXPENSES.
(a) Findings.--The Congress finds the following:
(1) That--
(A) travel and tourism is the third largest retail
industry in the United States and accounts for 11
percent of the total value of goods and services
exported by the United States;
(B) in 1992, the tourism industry produced revenues
in the amount of $369,000,000,000 which produced
$44,000,000,000 in tax revenues; and
(C) of such tax revenues, the Federal Government
received $24,000,000,000.
(2) The restaurant industry provides thousands of jobs in
the United States.
(3) The American performing arts community supports,
develops, and exports world-class performing arts.
(4) The reduction in the rate of the tax deductibility of
business meals and entertainment expenses from 80 percent to 50
percent may have a negative impact on the United States
restaurant, entertainment, and tourism industries.
(5) Any loss of revenues due to the reduction described in
paragraph (4) may result in the loss of jobs in the restaurant,
entertainment, and tourism industries, many of which are filled
by young individuals in their first jobs and by members of
minority groups.
(6) The unemployment rate among individuals and members
described in paragraph (5) greatly exceeds the national
unemployment rate of 6.9 percent.
(b) Sense of the Senate.--It is the sense of the Senate that the
conferees with respect to this title will make every effort to reduce
or eliminate the proposed reduction in the deductibility of business
meals and entertainment expenses.
SEC. 8210. ELIMINATION OF DEDUCTION FOR CLUB MEMBERSHIP FEES.
(a) In General.--Subsection (a) of section 274 (relating to
disallowance of certain entertainment, etc., expenses) is amended by
adding at the end thereof the following new paragraph:
``(3) Denial of deduction for club dues.--Notwithstanding
the preceding provisions of this subsection, no deduction shall
be allowed under this chapter for amounts paid or incurred for
membership in any club organized for business, pleasure,
recreation, or other social purpose.''
(b) Exception for Employee Recreational Expenses Not To Apply.--
Paragraph (4) of section 274(e) is amended by adding at the end thereof
the following: ``This paragraph shall not apply for purposes of
subsection (a)(3).''
(c) Effective Date.--The amendments made by this section shall
apply to amounts paid or incurred after December 31, 1993.
SEC. 8211. DISALLOWANCE OF DEDUCTION FOR CERTAIN EMPLOYEE REMUNERATION
IN EXCESS OF $1,000,000.
(a) General Rule.--Section 162 (relating to trade or business
expenses) is amended by redesignating subsection (m) as subsection (n)
and by inserting after subsection (l) the following new subsection:
``(m) Certain Excessive Employee Remuneration.--
``(1) In general.--In the case of any publicly held
corporation, no deduction shall be allowed under this chapter
for applicable employee remuneration with respect to any
covered employee to the extent that the amount of such
remuneration for the taxable year with respect to such employee
exceeds $1,000,000.
``(2) Publicly held corporation.--For purposes of this
subsection, the term `publicly held corporation' means any
corporation issuing any class of common equity securities
required to be registered under section 12 of the Securities
Exchange Act of 1934.
``(3) Covered employee.--For purposes of this subsection,
the term `covered employee' means any employee of the taxpayer
if--
``(A) as of the close of the taxable year, such
employee is the chief executive officer of the taxpayer
or is an individual acting in such a capacity, or
``(B) the total compensation for the taxable year
of such employee is required to be reported to
shareholders under the Securities Exchange Act of 1934
by reason of such employee being among the 4 highest
compensated officers for the taxable year (other than
the chief executive officer).
``(4) Applicable employee remuneration.--For purposes of
this subsection--
``(A) In general.--Except as otherwise provided in
this paragraph, the term `applicable employee
remuneration' means, with respect to any covered
employee for any taxable year, the aggregate amount
allowable as a deduction under this chapter for such
taxable year (determined without regard to this
subsection) for remuneration for services performed by
such employee (whether or not during the taxable year).
``(B) Exception for remuneration payable on
commission basis.--The term `applicable employee
remuneration' shall not include any remuneration
payable on a commission basis solely on account of
income generated directly by the individual performance
of the individual to whom such remuneration is payable.
``(C) Other performance-based compensation.--The
term `applicable employee remuneration' shall not
include any remuneration payable solely on account of
the attainment of one or more performance goals, but
only if--
``(i) the performance goals are determined
by a compensation committee of the board of
directors of the taxpayer which is comprised
solely of 2 or more outside directors,
``(ii) the material terms under which the
remuneration is to be paid, including the
performance goals, are disclosed to
shareholders and approved by a majority of the
vote in a separate shareholder vote before the
payment of such remuneration, and
``(iii) before any payment of such
remuneration, the compensation committee
referred to in clause (i) certifies that the
performance goals and any other material terms
were in fact satisfied.
``(D) Exception for existing binding contracts.--
The term `applicable employee remuneration' shall not
include any remuneration payable under a written
binding contract which was in effect on February 17,
1993, and which was not modified thereafter in any
material respect before such remuneration is paid.
``(E) Remuneration.--For purposes of this
paragraph, the term `remuneration' includes any
remuneration (including benefits) in any medium other
than cash, but shall not include--
``(i) any payment referred to in so much of
section 3121(a)(5) as precedes subparagraph (E)
thereof, and
``(ii) any benefit provided to or on behalf
of an employee if at the time such benefit is
provided it is reasonable to believe that the
employee will be able to exclude such benefit
from gross income under this chapter.
For purposes of clause (i), section 3121(a)(5) shall be
applied without regard to section 3121(v)(1).
``(F) Coordination with disallowed golden parachute
payments.--The dollar limitation contained in paragraph
(1) shall be reduced (but not below zero) by the amount
(if any) which would have been included in the
applicable employee remuneration of the covered
employee for the taxable year but for being disallowed
under section 280G.''
(b) Effective Date.--The amendment made by subsection (a) shall
apply to amounts which would otherwise be deductible for taxable years
beginning on or after January 1, 1994.
SEC. 8212. REDUCTION IN COMPENSATION TAKEN INTO ACCOUNT IN DETERMINING
CONTRIBUTIONS AND BENEFITS UNDER QUALIFIED RETIREMENT
PLANS.
(a) Qualification Requirement.--
(1) In general.--Section 401(a)(17) is amended--
(A) by striking ``$200,000'' in the first sentence
and inserting ``$150,000'',
(B) by striking the second sentence, and
(C) by adding at the end the following new
subparagraph:
``(B) Cost-of-living adjustment.--
``(i) In general.--If, for any calendar
year after 1994, the excess (if any) of--
``(I) $150,000, increased by the
cost-of-living adjustment for the
calendar year, over
``(II) the dollar amount in effect
under subparagraph (A) for taxable
years beginning in the calendar year,
is equal to or greater than $10,000, then the
$150,000 amount under subparagraph (A) (as
previously adjusted under this subparagraph)
for any taxable year beginning in any
subsequent calendar year shall be increased by
$10,000.
``(ii) Cost-of-living adjustment.--The
cost-of-living adjustment for any calendar year
shall be the adjustment made under section
415(d) for such calendar year, except that the
base period for purposes of section
415(d)(1)(A) shall be the calendar quarter
beginning October 1, 1993.''
(2) Conforming amendment.--Section 401(a)(17) is amended by
striking ``(17) A trust'' and inserting:
``(17) Compensation limit.--
``(A) In general.--A trust''.
(b) Simplified Employee Pensions.--
(1) In general.--Paragraphs (3)(C) and (6)(D)(ii) of
section 408(k) are each amended by striking ``$200,000'' and
inserting ``$150,000''.
(2) Cost-of-living.--Paragraph (8) of section 408(k) is
amended to read as follows:
``(8) Cost-of-living adjustment.--The Secretary shall
adjust the $300 amount in paragraph (2)(C) at the same time and
in the same manner as under section 415(d) and shall adjust the
$150,000 amount in paragraphs (3)(C) and (6)(D)(ii) at the same
time, and by the same amount, as the adjustment under section
401(a)(17)(B).''
(c) Other Related Provisions.--
(1) In general.--Sections 404(l) and 505(b)(7) are each
amended--
(A) by striking ``$200,000'' in the first sentence
and inserting ``$150,000'', and
(B) by striking the second sentence and inserting
``The Secretary shall adjust the $150,000 amount at the
same time, and by the same amount, as the adjustment
under section 401(a)(17)(B).''
(2) Conforming amendment.--The heading for section
505(b)(7) is amended by striking ``$200,000''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to benefits
accruing in plan years beginning after December 31, 1993.
(2) Exception for collectively bargained plans.--In the
case of a plan maintained pursuant to 1 or more collective
bargaining agreements between employee representatives and 1 or
more employers ratified before the date of the enactment of
this Act, the amendments made by this section shall not apply
to contributions or benefits pursuant to such agreements for
plan years beginning before the earlier of--
(A) the latest of--
(i) January 1, 1994,
(ii) the date on which the last of such
collective bargaining agreements terminates
(without regard to any extension, amendment, or
modification of such agreements on or after
such date of enactment), or
(iii) in the case of a plan maintained
pursuant to collective bargaining under the
Railway Labor Act, the date of execution of an
extension or replacement of the last of such
collective bargaining agreements in effect on
such date of enactment, or
(B) January 1, 1997.
(3) Transition rule for state and local plans.--
(A) In general.--In the case of an eligible
participant in a governmental plan (within the meaning
of section 414(d) of the Internal Revenue Code of
1986), the dollar limitation under section 401(a)(17)
of such Code shall not apply to the extent the amount
of compensation which is allowed to be taken into
account under the plan would be reduced below the
amount which was allowed to be taken into account under
the plan as in effect on July 1, 1993.
(B) Eligible participant.--For purposes of
subparagraph (A), an eligible participant is an
individual who first became a participant in the plan
during a plan year beginning before the 1st plan year
beginning after the earlier of--
(i) the plan year in which the plan is
amended to reflect the amendments made by this
section, or
(ii) December 31, 1995.
(C) Plan must be amended to incorporate limits.--
This paragraph shall not apply to any eligible
participant of a plan unless the plan is amended so
that the plan incorporates by reference the dollar
limitation under section 401(a)(17) of the Internal
Revenue Code of 1986, effective with respect to
noneligible participants for plan years beginning after
December 31, 1995 (or earlier if the plan amendment so
provides).
SEC. 8213. MODIFICATION TO DEDUCTION FOR CERTAIN MOVING EXPENSES.
(a) Dollar Limitation.--
(1) In general.--Paragraph (3) of section 217(b) is amended
by striking subparagraphs (A) and (B) and inserting the
following:
``(A) Dollar limit.--
``(i) In general.--The aggregate amount
allowable as a deduction under subsection (a)
in connection with a commencement of work shall
not exceed $10,000, of which the aggregate
amount which is attributable to expenses
described in subparagraph (C) or (D) of
paragraph (1) shall not exceed $1,500.
``(ii) Cost-of-living adjustment.--In the
case of taxable years beginning in calendar
years after 1994, the $10,000 amount under
clause (i) shall be increased by an amount
equal to the product of such dollar amount and
the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year in which
the taxable year begins, except that section
1(f)(3)(B) shall be applied by substituting
`1993' for `1992'. Any amount determined under
this clause which is not a multiple of $50
shall be rounded to the next lowest multiple of
$50.
``(B) Husband and wife.--If a husband and wife both
commence work at a new principal place of work within
the same general location, subparagraph (A) shall be
applied as if there was only 1 commencement of work. In
the case of a husband and wife filing separate returns,
subparagraph (A) shall be applied by substituting
`$5,000' for `$10,000' and `$750' for `$1,500'.''
(2) Foreign moves.--Paragraph (1) of section 217(h) is
amended by striking subparagraphs (B) and (C) and inserting:
``(B) subsection (b)(2)(A) shall be applied by
substituting `$4,500' for `$1,500', and
``(C) subsection (b)(2)(B) shall be applied as if
the last sentence of such subsection read as follows:
`In the case of a husband and wife filing separate
returns, subparagraph (A) (as modified by subsection
(h)(1)(B)) shall be applied by substituting ``$2,250''
for ``$4,500''.'.''
(b) Repeal of Deduction for Qualified Residence Sale, Etc.,
Expenses.--
(1) In general.--Paragraph (1) of section 217(b) (defining
moving expenses) is amended by inserting ``or'' at the end of
subparagraph (C), by striking ``, or'' at the end of
subparagraph (D) and inserting a period, and by striking
subparagraph (E).
(2) Conforming amendments.--
(A) Subsection (b) of section 217, as amended by
subsection (a), is amended by striking paragraph (2)
and redesignating paragraph (3) as paragraph (2).
(B) Section 217 is amended by striking subsection
(e).
(c) Deduction Disallowed for Meal Expenses.--Paragraph (1) of
section 217(b) is amended--
(1) by striking ``meals and lodging'' in subparagraphs (B),
(C) and (D) and inserting ``lodging'', and
(2) by adding at the end thereof the following new
sentence:
``Such term shall not include any expenses for meals.''
(d) Effective Date.--The amendments made by this section shall
apply to expenses incurred after December 31, 1993.
SEC. 8214. SIMPLIFICATION OF INDIVIDUAL ESTIMATED TAX SAFE HARBOR BASED
ON LAST YEAR'S TAX.
(a) In General.--Paragraph (1) of section 6654(d) (relating to
amount of required estimated tax installments) is amended by striking
subparagraphs (C), (D), (E), and (F) and by inserting the following new
subparagraph:
``(C) Limitation on use of preceding year's tax.--
``(i) In general.--If the adjusted gross
income shown on the return of the individual
for the preceding taxable year exceeds
$150,000, clause (ii) of subparagraph (B) shall
be applied by substituting `110 percent' for
`100 percent'.
``(ii) Separate returns.--In the case of a
married individual (within the meaning of
section 7703) who files a separate return for
the taxable year for which the amount of the
installment is being determined, clause (i)
shall be applied by substituting `$75,000' for
`$150,000'.
``(iii) Special rule.--In the case of an
estate or trust, adjusted gross income shall be
determined as provided in section 67(e).''
(b) Conforming Amendments.--
(1) Subparagraph (A) of section 6654(j)(3) is amended by
striking ``and subsection (d)(1)(C)(iii) shall not apply''.
(2) Paragraph (4) of section 6654(l) is amended by striking
``paragraphs (1)(C)(iv) and (2)(B)(i) of subsection (d)'' and
inserting ``subsection (d)(2)(B)(i)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 8215. SOCIAL SECURITY AND TIER 1 RAILROAD RETIREMENT BENEFITS.
(a) Additional Inclusion for Certain Taxpayers.--
(1) In general.--Subsection (a) of section 86 (relating to
social security and tier 1 railroad retirement benefits) is
amended by adding at the end the following new paragraph:
``(2) Additional amount.--In the case of a taxpayer with
respect to whom the amount determined under subsection
(b)(1)(A) exceeds the adjusted base amount, the amount included
in gross income under this section shall be equal to the lesser
of--
``(A) the sum of--
``(i) 85 percent of such excess, plus
``(ii) the lesser of the amount determined
under paragraph (1) or an amount equal to one-
half of the difference between the adjusted
base amount and the base amount of the
taxpayer, or
``(B) 85 percent of the social security benefits
received during the taxable year.''
(2) Conforming amendments.--Subsection (a) of section 86 is
amended--
(A) by striking ``Gross'' and inserting:
``(1) In general.--Except as provided in paragraph (2),
gross'', and
(B) by redesignating paragraphs (1) and (2) as
subparagraphs (A) and (B), respectively.
(b) Adjusted Base Amount.--Section 86(c) (defining base amount) is
amended to read as follows:
``(c) Base Amount and Adjusted Base Amount.--For purposes of this
section--
``(1) Base amount.--The term `base amount' means--
``(A) except as otherwise provided in this
paragraph, $25,000,
``(B) $32,000 in the case of a joint return, and
``(C) zero in the case of a taxpayer who--
``(i) is married as of the close of the
taxable year (within the meaning of section
7703) but does not file a joint return for such
year, and
``(ii) does not live apart from his spouse
at all times during the taxable year.
``(2) Adjusted base amount.--The term `adjusted base
amount' means--
``(A) except as otherwise provided in this
paragraph, $32,000,
``(B) $40,000 in the case of a joint return, and
``(C) zero in the case of a taxpayer described in
paragraph (1)(C).''
(c) Transfers to the Hospital Insurance Trust Fund.--
(1) In general.--Paragraph (1) of section 121(e) of the
Social Security Amendments of 1983 (Public Law 92-21) is
amended by--
(A) striking ``There'' and inserting:
``(A) There'';
(B) inserting ``(i)'' immediately following
``amounts equivalent to''; and
(C) striking the period and inserting the
following: ``, less (ii) the amounts equivalent to the
aggregate increase in tax liabilities under chapter 1
of the Internal Revenue Code of 1986 which is
attributable to the amendments to section 86 of such
Code made by section 8215 of the Revenue Reconciliation
Act of 1993.
``(B) There are hereby appropriated to the hospital
insurance trust fund amounts equal to the increase in
tax liabilities described in subparagraph (A)(ii). Such
appropriated amounts shall be transferred from the
general fund of the Treasury on the basis of estimates
of such tax liabilities made by the Secretary of the
Treasury. Transfers shall be made pursuant to a
schedule made by the Secretary of the Treasury that
takes into account estimated timing of collection of
such liabilities.''
(2) Definition.--Paragraph (3) of section 121(e) of such
Act is amended by redesignating subparagraph (B) as
subparagraph (C), and by inserting after subparagraph (A) the
following new subparagraph:
``(B) Hospital insurance trust fund.--The term
`hospital insurance trust fund' means the fund
established pursuant to section 1817 of the Social
Security Act.''.
(3) Conforming amendment.--Paragraph (2) of section 121(e)
of such Act is amended in the first sentence by striking
``paragraph (1)'' and inserting ``paragraph (1)(A).''
(4) Technical amendments.--Paragraph (1)(A) of section
121(e) of such Act, as redesignated and amended by paragraph
(1), is amended by striking ``1954'' and inserting ``1986''.
(d) Effective Date.--The amendments made by subsections (a) and (b)
shall apply to taxable years beginning after December 31, 1993.
PART II--PROVISIONS AFFECTING BUSINESSES
SEC. 8221. INCREASE IN TOP MARGINAL RATE UNDER SECTION 11.
(a) General Rule.--Paragraph (1) of section 11(b) (relating to
amount of tax) is amended--
(1) by striking ``and'' at the end of subparagraph (B),
(2) by striking subparagraph (C) and inserting the
following:
``(C) 34 percent of so much of the taxable income
as exceeds $75,000 but does not exceed $10,000,000, and
``(D) 35 percent of so much of the taxable income
as exceeds $10,000,000.'', and
(3) by adding at the end thereof the following new
sentence: ``In the case of a corporation which has taxable
income in excess of $15,000,000, the amount of the tax
determined under the foregoing provisions of this paragraph
shall be increased by an additional amount equal to the lesser
of (i) 3 percent of such excess, or (ii) $100,000.''
(b) Certain Personal Service Corporations.--Paragraph (2) of
section 11(b) is amended by striking ``34 percent'' and inserting ``35
percent''.
(c) Conforming Amendments.--
(1) Clause (iii) of section 852(b)(3)(D) is amended by
striking ``66 percent'' and inserting ``65 percent''.
(2) Subsection (a) of section 1201 is amended by striking
``34 percent'' each place it appears and inserting ``35
percent''.
(3) Paragraphs (1) and (2) of section 1445(e) are each
amended by striking ``34 percent'' and inserting ``35
percent''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning on or after January 1, 1993; except
that the amendment made by subsection (c)(3) shall take effect on the
date of the enactment of this Act.
SEC. 8222. DISALLOWANCE OF DEDUCTION FOR LOBBYING EXPENDITURES.
(a) Disallowance of Deduction.--
(1) In general.--Part IX of subchapter B of chapter 1
(relating to items not deductible) is amended by adding at the
end the following new section:
``SEC. 280I. LOBBYING EXPENDITURES.
``(a) Deduction Disallowed.--No deduction shall be allowed under
this chapter for any amount paid or incurred--
``(1) for lobbying activities, or
``(2) to another person for the conduct of lobbying
activities.
``(b) Lobbying Activities.--For purposes of this section--
``(1) In general.--The term `lobbying activity' means--
``(A) any lobbying contact, or
``(B) any activity in support of a lobbying
contact.
``(2) Support activities.--For purposes of paragraph
(1)(B), the following shall be treated as in support of a
lobbying contact:
``(A) Any preparation or planning activity relating
to a lobbying contact (including, in the case of a
lobbyist, the formulation, review, and management of
the lobbying contacts on behalf of a client).
``(B) Any research or other background work
relating to a lobbying contact.
``(C) Any activity coordinating the lobbying
activity of 2 or more persons.
``(3) Meals, entertainment, or travel.--Any amount paid or
incurred in connection with the providing of meals,
entertainment, or travel to a covered legislative or executive
branch official (or to an individual accompanying such
official) shall be treated as paid or incurred for a lobbying
activity without regard to whether it is in support of a
lobbying contact.
``(c) Lobbying Contact.--For purposes of this section--
``(1) In general.--The term `lobbying contact' means--
``(A) in the case of a lobbyist, any oral or
written communication with a covered legislative or
executive branch official, and
``(B) in the case of any other person, any oral or
written communication with a covered legislative or
executive branch official in connection with an attempt
to influence governmental actions described in
paragraph (2).
``(2) Governmental actions affected.--The following
governmental actions are described in this paragraph:
``(A) The formulation, modification, adoption, or
repeal of legislation (including legislative
proposals).
``(B) The formulation, modification, adoption, or
repeal of a Federal rule, regulation, Executive order,
or any other program, policy, or position of the United
States.
``(C) The administration or execution of a Federal
program or policy (including the negotiation, award, or
administration of a Federal contract, grant, loan,
permit, or license).
``(3) Exceptions.--The term `lobbying contact' shall not
include any contact--
``(A) required by subpoena, civil investigative
demand, or otherwise compelled by statute, regulation,
or other action of Congress, a State or local
legislative body, or a Federal agency,
``(B) made in response to a notice in the Federal
Register, Commerce Business Daily, or other similar
publication soliciting communications from the public
and directed to the agency official specifically
designated in the notice to receive such
communications,
``(C) made to Federal agency officials with regard
to judicial proceedings, criminal or civil law
enforcement inquiries, investigations or proceedings,
or filings required by statute or regulation,
``(D) made in compliance with written agency
procedures regarding an adjudication conducted by the
agency under section 554 of title 5, United States
Code, or any substantially similar provision, or
``(E) made on behalf of an individual with regard
to such individual's benefits, employment, other
personal matters involving only that individual, or
disclosures by that individual pursuant to applicable
whistleblower statutes,
``(F) in the case of any governmental action
described in paragraph (2) (B) or (C), which consists
of written comments filed in a public docket or other
communications made on the record in a public
proceeding, or
``(G) in the case of any governmental action
described in paragraph (2)(C), which consists of
communications which are made to officials serving in
the agency responsible for taking such action who serve
in the Senior Executive Service or who are members of
the uniformed services whose pay grade is lower than 0-
9 under section 201 of title 37, United States Code.
``(d) Special Rule for Exempt Organizations.--
``(1) Treatment of dues, etc.--Subsection (a) shall apply
to dues, assessments, or other similar amounts paid by any
person to an organization exempt from taxation under this
chapter (other than an organization described in section
170(c)) to the extent such dues, assessments, or amounts are
attributable to amounts paid or incurred by the organization
which are described in subsection (a).
``(2) Special rule for charities.--In the case of an
organization described in section 170(c) (other than paragraph
(1) thereof or section 170(b)(1)(A)(i)), subsection (a) shall
apply to any dues, assessments, contributions, or other similar
amounts which are paid to the organization and which are
otherwise deductible under this chapter to the extent that any
such amount--
``(A) is attributable to amounts paid or incurred
by the organization which are described in subsection
(a),
``(B) is in connection with lobbying activities of
direct financial interest to the payor's (or a related
person's) trade or business, and
``(C) when added to all other payments made by the
payor (and any related person) to the organization
during the calendar year in which the taxable year
begins, exceeds $2,000.
``(3) Allocation rules.--For purposes of this subsection--
``(A) dues or other similar amounts paid during any
calendar year shall, except as provided by the
Secretary, only be attributable to amounts not
deductible under subsection (a) which are paid or
incurred by the organization during such calendar year,
and
``(B) amounts which are not deductible under
subsection (a) shall be treated as paid first out of
dues or other similar amounts.
``(4) Reporting requirements.--
``For requirements of organization to
notify contributors, see section 6050O.
``(e) Other Rules and Definitions.--For purposes of this section--
``(1) Special rule for certain taxpayers.--In the case of--
``(A) any taxpayer engaged in the trade or business
of conducting activities described in subsection (a),
or
``(B) any taxpayer who is an employee who is
reimbursed by his employer for expenses incurred in
conducting such activities,
subsection (a) shall not apply to expenditures of the taxpayer
in conducting such activities on behalf of another person or
his employer (but shall apply to payments by such other person
or the employer to the taxpayer for conducting the activities).
``(2) Agency.--The term `agency' has the same meaning
given such term by section 551(1) of title 5, United States
Code.
``(3) Covered executive branch official.--The term `covered
executive branch official' means--
``(A) the President,
``(B) the Vice President,
``(C) any officer or employee of the Executive
Office of the President, other than a clerical or
secretarial employee,
``(D) any officer or employee serving in an
Executive level I, II, III, IV, or V position, as
designated in statute or Executive order,
``(E) any officer or employee serving in a Senior
Executive Service position as defined under section
3232(a)(2) of title 5, United States Code,
``(F) any member of the uniformed services whose
pay grade is at or in excess of O-7 under section 201
of title 37, United States Code, and
``(G) any officer or employee serving in a position
of confidential or policy-determining character under
schedule C of the excepted service pursuant to section
7511 of title 5, United States Code.
``(4) Covered legislative branch official.--The term
`covered legislative branch official' means--
``(A) a Member of Congress,
``(B) an elected officer of Congress,
``(C) any employee of a Member of the House of
Representatives, of a committee of the House of
Representatives, or on the leadership staff of the
House of Representatives,
``(D) any employee of a Senator, of a Senate
committee, or on the leadership staff of the Senate,
and
``(E) any employee of a joint committee of the
Congress.
Such term includes any member, officer, or employee of a State
or local legislative body.
``(5) Lobbyist.--The term `lobbyist' means any person who
is employed or retained by another person to perform services
which include any attempt to influence a governmental action
described in subsection (c)(2). Such term does not include a
person whose lobbying activities are only incidental to, and
are not a significant part of, the services the person performs
for such other person. For purposes of the preceding sentence,
lobbying activities shall not include activities described in
subsection (c)(3).
``(6) Legislation.--The term `legislation' has the meaning
given such term by section 4911(e)(2).
``(7) Coordination with section 4911.--No tax shall be
imposed under section 4911 on any amount with respect to which
a deduction is not allowed by reason of subsection (d).
``(f) Cross Reference.--
``For disallowance of deductions for
grassroots lobbying expenditures, see section 162(e)(2).''
(2) Conforming amendments.--
(A) Section 162(e) (relating to appearances, etc.,
with respect to legislation) is amended to read as
follows:
``(e) Denial of Deduction for Certain Political Expenditures.--
``(1) In general.--No deduction shall be allowed under this
chapter for any amount paid or incurred--
``(A) for participation in, or intervention in, any
political campaign on behalf of (or in opposition to)
any candidate for public office, or
``(B) in connection with any attempt to influence
the general public, or segments thereof, with respect
to legislative matters, elections, or referendums.
``(2) Application to dues.--
``(A) In general.--No deduction shall be allowed
under this chapter for the portion of dues or other
similar amounts paid by the taxpayer to an organization
which is allocable to the expenditures described in
paragraph (1).
``(B) Allocation.--For purposes of subparagraph
(A), expenditures described in paragraph (1) shall be
treated as paid first out of dues or other similar
amounts.
``(3) Cross reference.--
``For disallowance of deductions for
lobbying expenditures, see section 280I.''
(B) The table of sections for part IX of subchapter
B of chapter 1 is amended by adding at the end the
following new item:
``Sec. 280I. Lobbying expenditures.''
(3) Effective date.--The amendments made by this subsection
shall apply to amounts paid or incurred after December 31,
1993.
(b) Reporting Requirements Relating to Lobbying Expenditures.--
(1) In general.--Subpart B of part III of subchapter A of
chapter 61 (relating to information concerning transactions
with other persons) is amended by adding at the end the
following new section:
``SEC. 6050O. RETURNS RELATING TO LOBBYING EXPENDITURES OF CERTAIN
ORGANIZATIONS.
``(a) Requirement of Reporting.--Each organization described in
section 280I(d) shall make a return, according to the forms or
regulations prescribed by the Secretary, setting forth the names and
addresses of persons paying dues to the organization, the amount of the
dues paid by such person, and the portion of such dues which is
nondeductible under section 280I.
``(b) Statements To Be Furnished to Persons With Respect to Whom
Information Is Furnished.--Any organization required to make a return
under subsection (a) shall furnish to each person whose name is
required to be set forth in such return a written statement showing--
``(1) the name and address of the organization, and
``(2) the dues paid by the person during the calendar year
and the portion of such dues which is nondeductible under
section 280I.
The written statement required under the preceding sentence shall be
furnished (either in person or in a statement mailing by first-class
mail which includes adequate notice that the statement is enclosed) to
the persons on or before January 31 of the year following the calendar
year for which the return under subsection (a) was made and shall be in
such form as the Secretary may prescribe by regulations.
``(c) De Minimus Exception.--This section shall not apply to any
organization for any calendar year if the organization's lobbying
expenditures described in section 280I(a) for such year are less than
$2,000. For purposes of the preceding sentence, overhead costs
otherwise allocable to lobbying activities shall not be taken into
account.
``(d) Waiver.--The Secretary may waive the reporting requirements
of this section with respect to any organization or class of
organizations if the Secretary determines that such reporting is not
necessary to carry out the purposes of section 280I.
``(e) Dues.--For purposes of this section, the term `dues' includes
assessments, contributions, and other similar amounts.''
(2) Penalties.--
(A) Returns.--Subparagraph (B) of section
6724(d)(1) (defining information return) is amended by
striking ``or'' at the end of clause (xi), by striking
the period at the end of the clause (xii) relating to
section 4101(d) and inserting a comma, by redesignating
the clause (xii) relating to section 338(h)(10) as
clause (xiii), by striking the period at the end of
clause (xiii) (as so redesignated) and inserting ``,
or'', and by adding at the end the following new
clause:
``(xiv) section 6050O(a) (relating to
information on nondeductible lobbying
expenditures).''
(B) Payee statements.--Paragraph (2) of section
6724(d) (defining payee statement) is amended by
striking ``or'' at the end of subparagraph (R), by
striking the period at the end of subparagraph (S) and
inserting ``, or'', and by adding at the end the
following new subparagraph:
``(T) section 6050O(b) (relating to returns on
nondeductible lobbying expenditures).''
(3) Conforming amendment.--The table of sections for
subpart B of part III of subchapter A of chapter 61 is amended
by adding at the end the following new item:
``Sec. 6050O. Returns relating to
lobbying expenditures of
certain organizations.''
(4) Effective date.--The amendments made by this subsection
shall apply to calendar years beginning after December 31,
1993.
SEC. 8223. MARK TO MARKET ACCOUNTING METHOD FOR SECURITIES DEALERS.
(a) General Rule.--Subpart D of part II of subchapter E of chapter
1 (relating to inventories) is amended by adding at the end thereof the
following new section:
``SEC. 475. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES.
``(a) General Rule.--Notwithstanding any other provision of this
subpart, the following rules shall apply to securities held by a dealer
in securities:
``(1) Any security which is inventory in the hands of the
dealer shall be included in inventory at its fair market value.
``(2) In the case of any security which is not inventory in
the hands of the dealer and which is held at the close of any
taxable year--
``(A) the dealer shall recognize gain or loss as if
such security were sold for its fair market value on
the last business day of such taxable year, and
``(B) any gain or loss shall be taken into account
for such taxable year.
Proper adjustment shall be made in the amount of any gain or
loss subsequently realized for gain or loss taken into account
under the preceding sentence. The Secretary may provide by
regulations for the application of this paragraph at times
other than the times provided in this paragraph.
``(b) Exceptions.--
``(1) In general.--Subsection (a) shall not apply to--
``(A) any security held for investment, and
``(B) any security which is a hedge with respect
to--
``(i) a security to which subsection (a)
does not apply, or
``(ii) a position, right to income, or a
liability which is not a security in the hands
of the taxpayer.
To the extent provided in regulations, subparagraph (B) shall
not apply to any security held by a person in its capacity as a
dealer in securities.
``(2) Identification required.--A security shall not be
treated as described in subparagraph (A) or (B) of paragraph
(1), as the case may be, unless such security is clearly
identified in the dealer's records as being described in such
subparagraph before the close of the day on which it was
acquired, originated, or entered into (or such other time as
the Secretary may by regulations prescribe).
``(3) Securities subsequently not exempt.--If a security
ceases to be described in paragraph (1) at any time after it
was identified as such under paragraph (2), subsection (a)
shall apply to any changes in value of the security occurring
after the cessation.
``(4) Special rule for property held for investment.--To
the extent provided in regulations, subparagraph (A) of
paragraph (1) shall not apply to any security described in
subparagraph (D) or (E) of subsection (c)(2) which is held by a
dealer in such securities.
``(c) Definitions.--For purposes of this section--
``(1) Dealer in securities defined.--The term `dealer in
securities' means a taxpayer who--
``(A) regularly purchases securities from or sells
securities to customers in the ordinary course of a
trade or business; or
``(B) regularly offers to enter into, assume,
offset, assign or otherwise terminate positions in
securities with customers in the ordinary course of a
trade or business.
``(2) Security defined.--The term `security' means any--
``(A) share of stock in a corporation;
``(B) partnership or beneficial ownership interest
in a widely held or publicly traded partnership or
trust;
``(C) note, bond, debenture, or other evidence of
indebtedness;
``(D) interest rate, currency, or equity notional
principal contract;
``(E) evidence of an interest in, or a derivative
financial instrument in, any security described in
subparagraph (A), (B), (C), or (D), or any currency,
including any option, forward contract, short position,
and any similar financial instrument in such a security
or currency; and
``(F) position which--
``(i) is not a security described in
subparagraph (A), (B), (C), (D), or (E),
``(ii) is a hedge with respect to such a
security, and
``(iii) is clearly identified in the
dealer's records as being described in this
subparagraph before the close of the day on
which it was acquired or entered into (or such
other time as the Secretary may by regulations
prescribe).
Subparagraph (E) shall not include any contract to which
section 1256(a) applies.
``(3) Hedge.--The term `hedge' means any position which
reduces the dealer's risk of interest rate or price changes or
currency fluctuations, including any position which is
reasonably expected to become a hedge within 60 days after the
acquisition of the position.
``(d) Special Rules.--For purposes of this section--
``(1) Coordination with certain rules.--The rules of
sections 263(g), 263A, and 1256(a) shall not apply to
securities to which subsection (a) applies, and section 1091
shall not apply (and section 1092 shall apply) to any loss
recognized under subsection (a).
``(2) Improper identification.--If a taxpayer--
``(A) identifies any security under subsection
(b)(2) as being described in subsection (b)(1) and such
security is not so described, or
``(B) fails under subsection (c)(2)(F)(iii) to
identify any position which is described in subsection
(c)(2)(F) (without regard to clause (iii) thereof) at
the time such identification is required,
the provisions of subsection (a) shall apply to such security
or position, except that any loss under this section prior to
the disposition of the security or position shall be recognized
only to the extent of gain previously recognized under this
section (and not previously taken into account under this
paragraph) with respect to such security or position.
``(3) Character of gain or loss.--
``(A) In general.--Except as provided in
subparagraph (B) or section 1236(b)--
``(i) In general.--Any gain or loss with
respect to a security under subsection (a)(2)
shall be treated as ordinary income or loss.
``(ii) Special rule for dispositions.--If--
``(I) gain or loss is recognized
with respect to a security before the
close of the taxable year, and
``(II) subsection (a)(2) would have
applied if the security were held as of
the close of the taxable year,
such gain or loss shall be treated as ordinary
income or loss.
``(B) Exception.--Subparagraph (A) shall not apply
to any gain or loss which is allocable to a period
during which--
``(i) the security is described in
subsection (b)(1)(B) (without regard to
subsection (b)(2)),
``(ii) the security is held by a person
other than in connection with its activities as
a dealer in securities, or
``(iii) the security is improperly
identified (within the meaning of subparagraph
(A) or (B) of paragraph (2)).
``(e) Regulatory Authority.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out the
purposes of this section, including rules--
``(1) to prevent the use of year-end transfers, related
parties, or other arrangements to avoid the provisions of this
section, and
``(2) to provide for the application of this section to any
security which is a hedge which cannot be identified with a
specific security, position, right to income, or liability.''
(b) Conforming Amendments.--
(1) Paragraph (1) of section 988(d) is amended--
(A) by striking ``section 1256'' and inserting
``section 475 or 1256'', and
(B) by striking ``1092 and 1256'' and inserting
``475, 1092, and 1256''.
(2) The table of sections for subpart D of part II of
subchapter E of chapter 1 is amended by adding at the end
thereof the following new item:
``Sec. 475. Mark to market accounting
method for dealers in
securities.''
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to all taxable years ending on or after December 31,
1993.
(2) Change in method of accounting.--In the case of any
taxpayer required by this section to change its method of
accounting for any taxable year--
(A) such change shall be treated as initiated by
the taxpayer,
(B) such change shall be treated as made with the
consent of the Secretary, and
(C) except as provided in paragraph (3), the net
amount of the adjustments required to be taken into
account by the taxpayer under section 481 of the
Internal Revenue Code of 1986 shall be taken into
account ratably over the 5-taxable year period
beginning with the first taxable year ending on or
after December 31, 1993.
(3) Special rule for floor specialists and market makers.--
(A) In general.--If--
(i) a taxpayer (or any predecessor) used
the last-in first-out (LIFO) method of
accounting with respect to any qualified
securities for the 5-taxable year period ending
with its last taxable year ending before
December 31, 1993, and
(ii) any portion of the net amount
described in paragraph (2)(C) is attributable
to the use of such method of accounting,
then paragraph (2)(C) shall be applied by taking such
portion into account ratably over the 15-taxable year
period beginning with the first taxable year ending on
or after December 31, 1993.
(B) Qualified security.--For purposes of this
paragraph, the term ``qualified security'' means any
security acquired--
(i) by a floor specialist (as defined in
section 1236(d)(2) of the Internal Revenue Code
of 1986) in connection with the specialist's
duties as a specialist on an exchange, but only
if the security is one in which the specialist
is registered with the exchange, or
(ii) by a taxpayer who is a market maker in
connection with the taxpayer's duties as a
market maker, but only if--
(I) the security is included on the
National Association of Security
Dealers Automated Quotation System,
(II) the taxpayer is registered as
a market maker in such security with
the National Association of Security
Dealers, and
(III) as of the last day of the
taxable year preceding the taxpayer's
first taxable year ending on or after
December 31, 1993, the taxpayer (or any
predecessor) has been actively and
regularly engaged as a market maker in
such security for the 2-year period
ending on such date (or, if shorter,
the period beginning 61 days after the
security was listed in such quotation
system and ending on such date).
SEC. 8224. CLARIFICATION OF TREATMENT OF CERTAIN FSLIC FINANCIAL
ASSISTANCE.
(a) General Rule.--For purposes of chapter 1 of the Internal
Revenue Code of 1986--
(1) any FSLIC assistance with respect to any loss of
principal, capital, or similar amount upon the disposition of
any asset shall be taken into account as compensation for such
loss for purposes of section 165 of such Code, and
(2) any FSLIC assistance with respect to any debt shall be
taken into account for purposes of section 166, 585, or 593 of
such Code in determining whether such debt is worthless (or the
extent to which such debt is worthless) and in determining the
amount of any addition to a reserve for bad debts arising from
the worthlessness or partial worthlessness of such debts.
(b) FSLIC Assistance.--For purposes of this section, the term
``FSLIC assistance'' means any assistance (or right to assistance) with
respect to a domestic building and loan association (as defined in
section 7701(a)(19) of such Code without regard to subparagraph (C)
thereof) under section 406(f) of the National Housing Act or section
21A of the Federal Home Loan Bank Act (or under any similar provision
of law).
(c) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection--
(A) The provisions of this section shall apply to
taxable years ending on or after March 4, 1991, but
only with respect to FSLIC assistance not credited
before March 4, 1991.
(B) If any FSLIC assistance not credited before
March 4, 1991, is with respect to a loss sustained or
charge-off in a taxable year ending before March 4,
1991, for purposes of determining the amount of any net
operating loss carryover to a taxable year ending on or
after March 4, 1991, the provisions of this section
shall apply to such assistance for purposes of
determining the amount of the net operating loss for
the taxable year in which such loss was sustained or
debt written off. Except as provided in the preceding
sentence, this section shall not apply to any FSLIC
assistance with respect to a loss sustained or charge-
off in a taxable year ending before March 4, 1991.
(2) Exceptions.--The provisions of this section shall not
apply to any assistance to which the amendments made by section
1401(a)(3) of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 apply.
SEC. 8225. MODIFICATION OF CORPORATE ESTIMATED TAX RULES.
(a) Increase in Required Installment Based on Current Year Tax.--
(1) In general.--Clause (i) of section 6655(d)(1)(B)
(relating to amount of required installment) is amended by
striking ``91 percent'' each place it appears and inserting
``100 percent''.
(2) Conforming amendments.--
(A) Subsection (d) of section 6655 is amended--
(i) by striking paragraph (3), and
(ii) by striking ``91 percent'' in the
paragraph heading of paragraph (2) and
inserting ``100 percent''.
(B) Clause (ii) of section 6655(e)(2)(B) is amended
by striking the table contained therein and inserting
the following:
``In the case of the following
re-
The applicable
quired installments:
percentage is:
1st........................ 25
2nd........................ 50
3rd........................ 75
4th........................ 100.''
(C) Clause (i) of section 6655(e)(3)(A) is amended
by striking ``91 percent'' and inserting ``100
percent''.
(b) Modification of Periods for Applying Annualization.--
(1) Clause (i) of section 6655(e)(2)(A) is amended--
(A) by striking ``or for the first 5 months'' in
subclause (II),
(B) by striking ``or for the first 8 months'' in
subclause (III), and
(C) by striking ``or for the first 11 months'' in
subclause (IV).
(2) Paragraph (2) of section 6655(e) is amended by adding
at the end thereof the following new subparagraph:
``(C) Election for different annualization
periods.--
``(i) If the taxpayer makes an election
under this clause--
``(I) subclause (I) of subparagraph
(A)(i) shall be applied by substituting
`2 months' for `3 months',
``(II) subclause (II) of
subparagraph (A)(i) shall be applied by
substituting `4 months' for `3 months',
``(III) subclause (III) of
subparagraph (A)(i) shall be applied by
substituting `7 months' for `6 months',
and
``(IV) subclause (IV) of
subparagraph (A)(i) shall be applied by
substituting `10 months' for `9
months'.
``(ii) If the taxpayer makes an election
under this clause--
``(I) subclause (II) of
subparagraph (A)(i) shall be applied by
substituting `5 months' for `3 months',
``(II) subclause (III) of
subparagraph (A)(i) shall be applied by
substituting `8 months' for `6 months',
and
``(III) subclause (IV) of
subparagraph (A)(i) shall be applied by
substituting `11 months' for `9
months'.
``(iii) An election under clause (i) or
(ii) shall apply to the taxable year for which
made and such an election shall be effective
only if made on or before the date required for
the payment of the first required installment
for such taxable year.''
(3) The last sentence of section 6655(g)(3) is amended by
striking ``and subsection (e)(2)(A)'' and inserting ``and,
except in the case of an election under subsection (e)(2)(C),
subsection (e)(2)(A)''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 8226. MODIFICATIONS OF DISCHARGE OF INDEBTEDNESS PROVISIONS.
(a) Repeal of Stock for Debt Exception in Determining Income From
Discharge of Indebtedness.--
(1) In general.--Subsection (e) of section 108 is amended--
(A) by striking paragraph (10) and by redesignating
paragraph (11) as paragraph (10), and
(B) by amending paragraph (8) to read as follows:
``(8) Indebtedness satisfied by corporation's stock.--For
purposes of determining income of a debtor from discharge of
indebtedness, if a debtor corporation transfers stock to a
creditor in satisfaction of its indebtedness, such corporation
shall be treated as having satisfied the indebtedness with an
amount of money equal to the fair market value of the stock.''
(2) Conforming amendment.--Subparagraph (C) of section
382(l)(5) is amended to read as follows:
``(C) Coordination with section 108.--In applying
section 108(e)(8) to any case to which subparagraph (A)
applies, there shall not be taken into account any
indebtedness for interest described in subparagraph
(B).''
(3) Effective date.--
(A) In general.--Except as otherwise provided in
this paragraph, the amendments made by this subsection
shall apply to stock transferred after June 17, 1993,
in satisfaction of any indebtedness.
(B) Exception for title 11 cases.--The amendments
made by this subsection shall not apply to stock
transferred in satisfaction of any indebtedness if such
transfer is in a title 11 or similar case (as defined
in section 368(a)(3)(A) of the Internal Revenue Code of
1986) which was filed on or before June 17, 1993.
(C) Exception for binding contracts.--The
amendments made by this section shall not apply to any
stock transferred after June 17, 1993, and before
January 1, 1994, if such transfer is pursuant to a
binding contract in effect on June 17, 1993, and at all
times thereafter before the transfer.
(D) Exception for certain filings.--The amendments
made by this section shall not apply to any stock
transferred in satisfaction of any indebtedness if--
(i) such transfer occurs after June 17,
1993, and before January 1, 1994, and
(ii) the taxpayer had filed with the
Securities and Exchange Commission on or before
June 17, 1993, a registration statement which
proposed a stock-for-debt exchange with respect
to such indebtedness, and which discussed the
possible application of the stock-for-debt
exception to such exchange.
(b) Tax Attributes Subject to Reduction.--
(1) Minimum tax credit.--Section 108(b)(2) (relating to tax
attributes affected; order of reduction) is amended by
redesignating subparagraphs (C), (D), and (E) as subparagraphs
(D), (E), and (F) and by adding after subparagraph (B) the
following new subparagraph:
``(C) Minimum tax credit.--The amount of the
minimum tax credit available under section 53(b) as of
the beginning of the taxable year immediately following
the taxable year of the discharge.''
(2) Passive activity losses and credits.--Section
108(b)(2), as amended by paragraph (1), is amended by
redesignating subparagraph (F) as subparagraph (G) and by
adding after subparagraph (E) the following new subparagraph:
``(F) Passive activity loss and credit
carryovers.--Any passive activity loss or credit
carryover of the taxpayer under section 469(b) from the
taxable year of the discharge.''
(3) Conforming amendments.--
(A) Subparagraph (B) of section 108(b)(3) is
amended to read as follows:
``(B) Credit carryover reduction.--The reductions
described in subparagraphs (B), (C), and (G) shall be
33\1/3\ cents for each dollar excluded by subsection
(a). The reduction described in subparagraph (F) in any
passive activity credit carryover shall be 33\1/3\
cents for each dollar excluded by subsection (a).''
(B) Subparagraph (B) of section 108(b)(4) is
amended by striking ``(C)'' in the text and heading
thereof and inserting ``(D)''.
(C) Subparagraph (C) of section 108(b)(4) is
amended by striking ``(E)'' in the text and heading
thereof and inserting ``(G)''.
(D) Subparagraph (B) of section 108(g)(3) is
amended--
(i) by striking ``subparagraphs (A), (B),
(C), and (E)'' and inserting ``subparagraphs
(A), (B), (C), (D), (F), and (G)'',
(ii) by striking ``subparagraphs (B) and
(E)'' and inserting ``subparagraphs (B), (C),
and (G)'', and
(iii) by inserting before the period at the
end the following: ``and the attribute
described in subparagraph (F) of subsection
(b)(2) to the extent attributable to any
passive activity credit carryover''.
(4) Effective date.--The amendments made by this section
shall apply to taxable years beginning after December 31, 1993.
SEC. 8227. LIMITATION ON SECTION 936 CREDIT.
(a) General Rule.--Subsection (a) of section 936 (relating to
Puerto Rico and possession tax credit) is amended--
(1) by striking ``as provided in paragraph (3)'' in
paragraph (1) and inserting ``as otherwise provided in this
section'';
(2) by adding at the end thereof the following new
paragraph:
``(4) Limitations on credit for active business income.--
``(A) In general.--The amount of the credit
determined under paragraph (1)(A) for any taxable year
shall not exceed the sum of the following amounts:
``(i) 95 percent of the sum of--
``(I) the aggregate amount of the
possession corporation's qualified
possession wages for such taxable year,
plus
``(II) the allocable employee
fringe benefit expenses of the
possession corporation for the taxable
year.
``(ii) The sum of--
``(I) 50 percent of the
depreciation deductions allowable under
section 167 to the possession
corporation for the taxable year with
respect to short-life qualified
tangible property,
``(II) 75 percent of the
depreciation deductions allowable under
section 167 to the possession
corporation for the taxable year with
respect to medium-life qualified
tangible property, and
``(III) 100 percent of the
depreciation deductions allowable under
section 167 to the possession
corporation for the taxable year with
respect to long-life qualified tangible
property.
``(iii) If the possession corporation does
not have an election to use the method
described in subsection (h)(5)(C)(ii) (relating
to profit split) in effect for the taxable
year, the amount of qualified possession income
taxes for the taxable year allocable to
nonsheltered income.
``(B) Election to take reduced credit.--
``(i) In general.--If an election under
this subparagraph applies to a possession
corporation for any taxable year--
``(I) subparagraph (A), and the
provisions of subsection (i), shall not
apply to such possession corporation
for such taxable year, and
``(II) the credit determined under
paragraph (1)(A) for such taxable year
shall be the applicable percentage of
the credit which would otherwise have
been determined under such paragraph.
Notwithstanding subclause (I), a possession
corporation to which an election under this
subparagraph applies shall be entitled to the
benefits of subsection (i)(3)(B) for taxes
allocable (on a pro rata basis) to taxable
income the tax on which is not offset by reason
of this subparagraph.
``(ii) Applicable percentage.--The term
`applicable percentage' means the percentage
determined in accordance with the following
table:
``In the case of taxable The percentage is:
year beginning in:
1994.......................................... 60
1995.......................................... 55
1996.......................................... 50
1997.......................................... 45
1998 and thereafter........................... 40.
``(iii) Election.--
``(I) In general.--An election
under this subparagraph by any
possession corporation may be made only
for the corporation's first taxable
year beginning after December 31, 1993,
for which it is a possession
corporation.
``(II) Period of election.--An
election under this subparagraph shall
apply to the taxable year for which
made and all subsequent taxable years
unless revoked.
``(III) Affiliated groups.--If, for
any taxable year, an election is not in
effect for any possession corporation
which is a member of an affiliated
group, any election under this
subparagraph for any other member of
such group is revoked for such taxable
year and all subsequent taxable years.
For purposes of this subclause, members
of an affiliated group shall be
determined without regard to the
exceptions contained in section 1504(b)
and as if the constructive ownership
rules of section 1563(e) applied for
purposes of section 1504(a). The
Secretary may prescribe regulations to
prevent the avoidance of this subclause
through deconsolidation or otherwise.
``(C) Cross reference.--
``For definitions and special rules
applicable to this paragraph, see subsection (i).''; and
(3) by inserting ``97.5 percent of'' after ``equal to'' in
paraagraph (1).
(b) Definitions and Special Rules.--Section 936 is amended by
adding at the end thereof the following new subsection:
``(i) Definitions and Special Rules Relating to Limitations of
Subsection (a)(4).--
``(1) Qualified possession wages.--For purposes of this
section--
``(A) In general.--The term `qualified possession
wages' means wages paid or incurred by the possession
corporation during the taxable year in connection with
the active conduct of a trade or business within a
possession of the United States to any employee for
services performed in such possession, but only if such
services are performed while the principal place of
employment of such employee is within such possession.
``(B) Limitation on amount of wages taken into
account.--
``(i) In general.--The amount of wages
which may be taken into account under
subparagraph (A) with respect to any employee
for any taxable year shall not exceed 85
percent of the contribution and benefit base
determined under section 230 of the Social
Security Act for the calendar year in which
such taxable year begins.
``(ii) Treatment of part-time employees,
etc.--If--
``(I) any employee is not employed
by the possession corporation on a
substantially full-time basis at all
times during the taxable year, or
``(II) the principal place of
employment of any employee with the
possession corporation is not within a
possession at all times during the
taxable year,
the limitation applicable under clause (i) with
respect to such employee shall be the
appropriate portion (as determined by the
Secretary) of the limitation which would
otherwise be in effect under clause (i).
``(C) Treatment of certain employees.--The term
`qualified possession wages' shall not include any
wages paid to employees who are assigned by the
employer to perform services for another person, unless
the principal trade or business of the employer is to
make employees available for temporary periods to other
persons in return for compensation. All possession
corporations treated as 1 corporation under paragraph
(6) shall be treated as 1 employer for purposes of the
preceding sentence.
``(D) Wages.--
``(i) In general.--Except as provided in
clause (ii), the term `wages' has the meaning
given to such term by subsection (b) of section
3306 (determined without regard to any dollar
limitation contained in such section). For
purposes of the preceding sentence, such
subsection (b) shall be applied as if the term
`United States' included all possessions of the
United States.
``(ii) Special rule for agricultural labor
and railway labor.--In any case to which
subparagraph (A) or (B) of paragraph (1) of
section 51(h) applies, the term `wages' has the
meaning given to such term by section 51(h)(2).
``(2) Allocable employee fringe benefit expenses.--
``(A) In general.--The allocable employee fringe
benefit expenses of any possession corporation for any
taxable year is an amount which bears the same ratio to
the amount determined under subparagraph (B) for such
taxable year as--
``(i) the aggregate amount of the
possession corporation's qualified possession
wages for such taxable year, bears to
``(ii) the aggregate amount of the wages
paid or incurred by such possession corporation
during such taxable year.
In no event shall the amount determined under the
preceding sentence exceed 15 percent of the amount
referred to in clause (i).
``(B) Expenses taken into account.--For purposes of
subparagraph (A), the amount determined under this
subparagraph for any taxable year is the aggregate
amount allowable as a deduction under this chapter to
the possession corporation for such taxable year
(determined without regard to paragraph (5)) with
respect to--
``(i) employer contributions under a stock
bonus, pension, profit-sharing, or annuity
plan,
``(ii) employer-provided coverage under any
accident or health plan for employees, and
``(iii) the cost of life or disability
insurance provided to employees.
Any amount treated as wages under paragraph (1)(D)
shall not be taken into account under this
subparagraph.
``(3) Treatment of possession taxes.--
``(A) Amount of credit for possession corporations
not using profit split.--
``(i) In general.--For purposes of
subsection (a)(4)(A)(iii), the amount of the
qualified possession income taxes for any
taxable year allocable to nonsheltered income
shall be an amount which bears the same ratio
to the possession income taxes for such taxable
year as--
``(I) the increase in the tax
liability of the possession corporation
under this chapter by reason of
subsection (a)(4)(A) (without regard to
clause (iii) thereof) and paragraph (5)
of this subsection, bears to
``(II) the tax liability of the
possession corporation for the taxable
year determined without regard to the
credit allowable under this section and
without regard to paragraph (5) of this
subsection.
``(ii) Limitation on amount of taxes taken
into account.--Possession income taxes shall
not be taken into account under clause (i) for
any taxable year to the extent that the amount
of such taxes exceeds 9 percent of the amount
of the taxable income for such taxable year.
``(B) Deduction for possession corporations using
profit split.--Notwithstanding subsection (c) if a
possession corporation is not described in subsection
(a)(4)(A)(iii) for any taxable year, such possession
corporation shall be allowed a deduction for such
taxable year in an amount which bears the same ratio to
the possession income taxes for such taxable year as--
``(i) the increase in the tax liability of
the possession corporation under this chapter
by reason of subsection (a)(4)(A) and paragraph
(5) of this subsection, bears to
``(ii) the tax liability of the possession
corporation for the taxable year determined
without regard to the credit allowable under
this section and without regard to paragraph
(5) of this subsection.
In determining the credit under subsection (a) and in
applying the preceding sentence, taxable income shall
be determined without regard to the preceding sentence.
``(C) Possession income taxes.--For purposes of
this paragraph, the term `possession income taxes'
means any taxes of a possession of the United States
which are treated as not being income, war profits, or
excess profits taxes paid or accrued to a possession of
the United States by reason of subsection (c).
``(4) Categories of depreciable property.--For purposes of
this section--
``(A) Qualified tangible property.--The term
`qualified tangible property' means any tangible
property used by the possession corporation in a
possession of the United States in the active conduct
of a trade or business within such possession.
``(B) Short-life qualified tangible property.--The
term `short-life qualified tangible property' means any
qualified tangible property to which section 168
applies and which is 3-year property or 5-year property
for purposes of such section.
``(C) Medium-life qualified tangible property.--The
term `medium-life qualified tangible property' means
any qualified tangible property to which section 168
applies and which is 7-year property or 10-year
property for purposes of such section.
``(D) Long-life qualified tangible property.--The
term `long-life qualified tangible property' means any
qualified tangible property to which section 168
applies and which is not described in subparagraph (B)
or (C).
``(E) Transitional rule.--In the case of any
qualified tangible property to which section 168 (as in
effect on the day before the date of the enactment of
the Tax Reform Act of 1986) applies, any reference in
this paragraph to section 168 shall be treated as a
reference to such section as so in effect.
``(5) Denial of double benefit.--
``(A) In general.--Notwithstanding any other
provision of this chapter, no deduction shall be
allowed to a possession corporation for--
``(i) any qualified possession wages,
``(ii) any allocable employee fringe
benefit expenses, and
``(iii) any depreciation deductions
referred to in subsection (a)(4)(A)(ii).
``(B) Coordination with other provisions.--
Subparagraph (A) shall not apply for purposes of--
``(i) determining the amount of the credit
allowable under subsection (a)(1)(A) or
otherwise determining the taxable income of the
possession corporation under any other
provision of this section, and
``(ii) determining adjustments to the basis
of any property on account of depreciation
deductions.
``(6) Election to compute credit on consolidated basis.--
``(A) In general.--Any affiliated group may elect
to treat all possession corporations which would be
members of such group but for section 1504(b) (3) or
(4) as 1 corporation for purposes of this section. The
credit determined under this section with respect to
such 1 corporation shall be allocated among such
possession corporations in such manner as the Secretary
may prescribe.
``(B) Election.--An election under subparagraph (A)
shall apply to the taxable year for which made and all
succeeding taxable years unless revoked with the
consent of the Secretary.
``(7) Possession corporation.--The term `possession
corporation' means a domestic corporation for which the
election provided in subsection (a) is in effect.''
(c) Minimum Tax Treatment.--
(1) In general.--Clause (ii) of section 56(g)(4)(C)
(relating to treatment of special rule for certain dividends)
is amended by striking ``sections 936 and 921'' and inserting
``sections 936 (including subsections (a)(4) and (i) thereof)
and 921''.
(2) Treatment of foreign taxes.--Clause (iii) of section
56(g)(4)(C) is amended by adding at the end thereof the
following subclauses:
``(IV) Separate application of
foreign tax credit limitations.--In
determining the alternative minimum
foreign tax credit, section 904(d)
shall be applied as if dividends from a
corporation eligible for the credit
provided by section 936 were a separate
category of income referred to in a
subparagraph of section 904(d)(1).
``(V) Coordination with limitation
on 936 credit.--Any reference in this
clause to a dividend received from a
corporation eligible for the credit
provided by section 936 shall be
treated as a reference to the portion
of any such dividend for which the
dividends received deduction is
disallowed under clause (i) after the
application of clause (ii)(I).''
(d) Conforming Amendment.--Paragraph (4) of section 904(b) is
amended by inserting before the period at the end thereof the
following: ``(without regard to subsections (a)(4) and (i) thereof)''.
(e) Increase in Limitation on Cover Over.--Paragraph (1) of section
7652(f) is amended to read as follows:
``(1) $10.50 ($11.30 in the case of distilled spirits
brought into the United States during the 5-year period
beginning on July 1, 1995), or.''
(f) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993; except that
the amendment made by subsection (e) shall take effect on October 1,
1993.
SEC. 8228. MODIFICATION TO LIMITATION ON DEDUCTION FOR CERTAIN
INTEREST.
(a) General Rule.--Paragraph (3) of section 163(j) (defining
disqualified interest) is amended to read as follows:
``(3) Disqualified interest.--For purposes of this
subsection, the term `disqualified interest' means--
``(A) any interest paid or accrued by the taxpayer
(directly or indirectly) to a related person if no tax
is imposed by this subtitle with respect to such
interest, and
``(B) any interest paid or accrued by the taxpayer
with respect to any indebtedness to a person who is not
a related person if--
``(i) there is a disqualified guarantee of
such indebtedness, and
``(ii) no gross basis tax is imposed by
this subtitle with respect to such interest.''
(b) Definitions.--Paragraph (6) of section 163(j) is amended by
adding at the end thereof the following new subparagraphs:
``(D) Disqualified guarantee.--
``(i) In general.--Except as provided in
clause (ii), the term `disqualified guarantee'
means any guarantee by a related person which
is--
``(I) an organization exempt from
taxation under this subtitle, or
``(II) a foreign person.
``(ii) Exceptions.--The term `disqualified
guarantee' shall not include a guarantee--
``(I) in any circumstances
identified by the Secretary by
regulation, where the interest on the
indebtedness would have been subject to
a net basis tax if the interest had
been paid to the guarantor, or
``(II) if the taxpayer owns a
controlling interest in the guarantor.
For purposes of subclause (II), except as
provided in regulations, the term `a
controlling interest' means direct or indirect
ownership of at least 80 percent of the total
voting power and value of all classes of stock
of a corporation, or 80 percent of the profit
and capital interests in any other entity. For
purposes of the preceding sentence, the rules
of paragraphs (1) and (5) of section 267(c)
shall apply; except that such rules shall also
apply to interest in entities other than
corporations.
``(iii) Guarantee.--Except as provided in
regulations, the term `guarantee' includes any
arrangement under which a person (directly or
indirectly through an entity or otherwise)
assures, on a conditional or unconditional
basis, the payment of another person's
obligation under any indebtedness.
``(E) Gross basis and net basis taxation.--
``(i) Gross basis tax.--The term `gross
basis tax' means any tax imposed by this
subtitle which is determined by reference to
the gross amount of any item of income without
any reduction for any deduction allowed by this
subtitle.
``(ii) Net basis tax.--The term `net basis
tax' means any tax imposed by this subtitle
which is a not a gross basis tax.''
(c) Conforming Amendment.--Subparagraph (B) of section 163(j)(5) is
amended by striking ``to a related person''.
(d) Effective Date.--The amendments made by this section shall
apply to interest paid or accrued in taxable years beginning after
December 31, 1993.
PART III--FOREIGN TAX PROVISIONS
Subpart A--Current Taxation of Certain Earnings of Controlled Foreign
Corporations
SEC. 8231. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.
(a) General Rule.--Paragraph (1) of section 951(a) (relating to
amounts included in gross income of United States shareholders) is
amended by striking ``and'' at the end of subparagraph (A), by striking
the period at the end of subparagraph (B) and inserting ``; and'', and
by adding at the end thereof the following new subparagraph:
``(C) the amount determined under section 956A with
respect to such shareholder for such year (but only to
the extent not excluded from gross income under section
959(a)(3)).''
(b) Amount of Inclusion.--Subpart F of part III of subchapter N of
chapter 1 is amended by inserting after section 956 the following new
section:
``SEC. 956A. EARNINGS INVESTED IN EXCESS PASSIVE ASSETS.
``(a) General Rule.--In the case of any controlled foreign
corporation, the amount determined under this section with respect to
any United States shareholder for any taxable year is the lesser of--
``(1) the excess (if any) of--
``(A) such shareholder's pro rata share of the
amount of the controlled foreign corporation's excess
passive assets for such taxable year, over
``(B) the amount of earnings and profits described
in section 959(c)(1)(B) with respect to such
shareholder, or
``(2) such shareholder's pro rata share of the applicable
earnings of such controlled foreign corporation determined
after the application of section 951(a)(1)(B).
``(b) Applicable Earnings.--For purposes of this section, the term
`applicable earnings' means, with respect to any controlled foreign
corporation, the sum of--
``(1) the amount referred to in section 316(a)(1) to the
extent such amount was accumulated in taxable years beginning
after September 30, 1993, and
``(2) the amount referred to in section 316(a)(2),
but reduced by distributions made during the taxable year and reduced
by the earnings and profits described in section 959(c)(1) to the
extent that the earnings and profits so described were accumulated in
taxable years beginning after September 30, 1993.
``(c) Excess Passive Assets.--For purposes of this section--
``(1) In general.--The excess passive assets of any
controlled foreign corporation for any taxable year is the
excess (if any) of--
``(A) the average of the amounts of passive assets
held by such corporation as of the close of each
quarter of such taxable year, over
``(B) 25 percent of the average of the amounts of
total assets held by such corporation as of the close
of each quarter of such taxable year.
For purposes of the preceding sentence, the amount taken into
account with respect to any asset shall be its adjusted basis
as determined for purposes of computing earnings and profits.
``(2) Passive asset.--
``(A) In general.--Except as otherwise provided in
this section, the term `passive asset' means any asset
held by the controlled foreign corporation which
produces passive income (as defined in section 1296(b))
or is held for the production of such income.
``(B) Coordination with section 956.--The term
`passive asset' shall not include any United States
property (as defined in section 956).
``(3)Certain rules to apply.--For purposes of this
subsection, the rules of the following provisions shall apply:
``(A) Section 1296(c) (relating to look-thru
rules).
``(B) Section 1297(d) (relating to leasing rules).
``(C) Section 1297(e) (relating to intangible
property).
``(d) Treatment of Certain Chains of Controlled Foreign
Corporation.--
``(1) In general.--For purposes of applying subsection
(c)--
``(A) all controlled foreign corporations which are
members of the same CFC chain shall be treated as 1
controlled foreign corporation, and
``(B) the amount of the excess passive assets
determined with respect to such 1 corporation shall be
allocated among the controlled foreign corporations
which are members of such chain in proportion to their
respective amounts of applicable earnings.
``(2) CFC chain.--For purposes of paragraph (1), the term
`CFC chain' means any chain of controlled foreign corporations
connected through stock ownership, but only if more than 50
percent (by vote or value) of the stock of each member of such
chain (other than the top tier corporation) is owned (directly
or indirectly) by one or more other members of the chain.
``(e) Special Rule Where Corporation Ceases To Be Controlled
Foreign Corporation During Taxable Year.--If any foreign corporation
ceases to be a controlled foreign corporation during any taxable year--
``(1) the determination of any United States shareholder's
pro rata share shall be made on the basis of stock owned
(within the meaning of section 958(a)) by such shareholder on
the last day during the taxable year on which the foreign
corporation is a controlled foreign corporation, and
``(2) the amount of such corporation's excess passive
assets for such taxable year shall be determined by only taking
into account quarters ending on or before such last day, and
``(3) in determining applicable earnings, the amount taken
into account by reason of being described in paragraph (2) of
section 316(a) shall be the portion of the amount so described
which is allocable (on a pro rata basis) to the part of such
year during which the corporation is a controlled foreign
corporation.
``(f) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out the purposes of this section,
including regulations to prevent the avoidance of the provisions of
this section through reorganizations or otherwise.''
(c) Previously Taxed Income Rules.--
(1) In general.--Subsection (a) of section 959 (relating to
exclusion from gross income of previously taxed earnings and
profits) is amended by striking ``or'' at the end of paragraph
(1), by adding ``or'' at the end of paragraph (2), and by
inserting after paragraph (2) the following new paragraph:
``(3) such amounts would, but for this subsection, be
included under section 951(a)(1)(C) in the gross income of,''.
(2) Allocation rules.--
(A) Subsection (a) of section 959 is amended by
adding at the end thereof the following new sentence:
``The rules of subsection (c) shall apply for purposes
of paragraph (1) of this subsection and the rules of
subsection (f) shall apply for purposes of paragraphs
(2) and (3) of this subsection.''.
(B) Section 959 is amended by adding at the end
thereof the following new subsection:
``(f) Allocation Rules for Certain Inclusions.--
``(1) In general.--For purposes of this section--
``(A) amounts that would be included under
subparagraph (B) of section 951(a)(1) (determined
without regard to this section) shall be treated as
attributable first to earnings described in subsection
(c)(2), and then to earnings described in subsection
(c)(3), and
``(B) amounts that would be included under
subparagraph (C) of section 951(a)(1) (determined
without regard to this section) shall be treated as
attributable first to earnings described in subsection
(c)(2) to the extent the earnings so described were
accumulated in taxable years beginning after September
30, 1993, and then to earnings described in subsection
(c)(3).
``(2) Treatment of distributions.--In applying this
section, actual distributions shall be taken into account
before amounts that would be included under subparagraphs (B)
and (C) of section 951(a)(1) (determined without regard to this
section).''
(C) Paragraph (1) of section 959(c) is amended to
read as follows:
``(1) first to the aggregate of--
``(A) earnings and profits attributable to amounts
included in gross income under section 951(a)(1)(B) (or
which would have been included except for subsection
(a)(2) of this section), and
``(B) earnings and profits attributable to amounts
included in gross income under section 951(a)(1)(C) (or
which would have been included except for subsection
(a)(3) of this section),
with any distribution being allocated between earnings and
profits described in subparagraph (A) and earnings and profits
described in subparagraph (B) proportionately on the basis of
the respective amounts of such earnings and profits,''.
(3) Conforming amendments.--
(A) Subsections (a) and (b) of section 959 are each
amended by striking ``earnings and profits for a
taxable year'' and inserting ``earnings and profits''.
(B) Paragraph (2) of section 959(c) is amended to
read as follows:
``(2) then to earnings and profits attributable to amounts
included in gross income under section 951(a)(1)(A) (but
reduced by amounts not included under subparagraph (B) or (C)
of section 951(a)(1) because of the exclusions in paragraphs
(2) and (3) of subsection (a) of this section), and''
(C) Subsection (b) of section 989 is amended by
striking ``section 951(a)(1)(B)'' and inserting
``subparagraph (B) or (C) of section 951(a)(1)''.
(d) Modifications to Passive Foreign Investment Company Rules.--
(1) Adjusted basis used in certain determinations.--
Subsection (a) of section 1296 is amended by striking the
material following paragraph (2) and inserting the following:
``In the case of a controlled foreign corporation (or any other foreign
corporation if such corporation so elects), the determination under
paragraph (2) shall be based on the adjusted bases (as determined for
purposes of computing earnings and profits) of its assets in lieu of
their value. Such an election, once made, may be revoked only with the
consent of the Secretary.''
(2) Treatment of certain subpart f inclusions.--Subsection
(b) of section 1297 is amended by adding at the end thereof the
following new paragraph:
``(9) Treatment of certain subpart f inclusions.--Any
amount included in gross income under subparagraph (B) or (C)
of section 951(a)(1) shall be treated as a distribution
received with respect to the stock.''
(3) Treatment of certain dealers in securities.--Subsection
(b) of section 1296 is amended by adding at the end thereof the
following new paragraph:
``(3) Treatment of certain dealers in securities.--
``(A) In general.--In the case of any foreign
corporation which is a controlled foreign corporation
(as defined in section 957(a)), the term `passive
income' does not include any income derived in the
active conduct of a securities business by such
corporation if such corporation is registered as a
securities broker or dealer under section 15(a) of the
Securities Exchange Act of 1934 or is registered as a
Government securities broker or dealer under section
15C(a) of such Act. To the extent provided in
regulations, such term shall not include any income
derived in the active conduct of a securities business
by a controlled foreign corporation which is not so
registered.
``(B) Application of look-thru rules.--For purposes
of paragraph (2)(C), rules similar to the rules of
subparagraph (A) of this paragraph shall apply in
determining whether any income of a related person
(whether or not a corporation) is passive income.
``(C) Limitation.--The preceding provisions of this
paragraph shall only apply in the case of persons who
are United States shareholders (as defined in section
951(b)) in the controlled foreign corporation.''
(4) Leasing and intangible asset rules.--Section 1297 is
amended by redesignating subsection (d) as subsection (f) and
by inserting after subsection (c) the following new
subsections:
``(d) Treatment of Certain Leased Property.--For purposes of this
part:
``(1) In general.--Any tangible personal property with
respect to which a foreign corporation is the lessee under a
lease with a term of at least 12 months shall be treated as an
asset actually held by such corporation.
``(2) Determination of adjusted basis.--
``(A) In general.--The adjusted basis of any asset
to which paragraph (1) applies shall be the unamortized
portion (as determined under regulations prescribed by
the Secretary) of the present value of the payments
under the lease for the use of such property.
``(B) Present value.--For purposes of subparagraph
(A), the present value of payments described in
subparagraph (A) shall be determined in the manner
provided in regulations prescribed by the Secretary--
``(i) as of the beginning of the lease
term, and
``(ii) except as provided in such
regulations, by using a discount rate equal to
the applicable Federal rate determined under
section 1274(d)--
``(I) by substituting the lease
term for the term of the debt
instrument, and
``(II) without regard to paragraph
(2) or (3) thereof.
``(3) Exceptions.--This subsection shall not apply in any
case where--
``(A) the lessor is a related person (as defined in
section 954(d)(3)) with respect to the foreign
corporation, or
``(B) a principal purpose of leasing the property
was to avoid the provisions of this section.
``(e)Special Rules For Certain Intangibles.--
``(1) Research expenditures.--The adjusted basis of the
total assets of a controlled foreign corporation shall be
increased by the research or experimentation expenditures
(within the meaning of section 174) paid or incurred by such
foreign corporation during the taxable year and the preceding 2
taxable years.
``(2) Certain licensed intangibles.--In the case of any
intangible property (as defined in section 936(h)(3)(B)) with
respect to which a controlled foreign corporation is a licensee
and which is used by such foreign corporation in the active
conduct of a trade or business, the adjusted basis of the total
assets of such foreign corporation shall be increased by an
amount equal to 300 percent of the payments made during the
taxable year for the use of such intangible property. For
purposes of the preceding sentence, payments to a foreign
person shall not be taken into account if such foreign person
is a related person (as defined in section 954(d)(3)) with
respect to the controlled foreign corporation.
``(3) Controlled foreign corporation.--For purposes of this
subsection, the term `controlled foreign corporation' has the
meaning given such term by section 957(a).''
(e) Effective Date.--The amendments made by this section shall
apply to taxable years of foreign corporations beginning after
September 30, 1993, and to taxable years of United States shareholders
in which or with which such taxable years of foreign corporations end.
SEC. 8232. MODIFICATION TO TAXATION OF INVESTMENT IN UNITED STATES
PROPERTY.
(a) General Rule.--Section 956 (relating to investment of earnings
in United States property) is amended--
(1) by redesignating subsections (b) and (c) as subsections
(c) and (d), respectively, and
(2) by striking subsection (a) and inserting the following:
``(a) General Rule.--In the case of any controlled foreign
corporation, the amount determined under this section with respect to
any United States shareholder for any taxable year is the lesser of--
``(1) the excess (if any) of--
``(A) such shareholder's pro rata share of the
average of the amounts of United States property held
(directly or indirectly) by the controlled foreign
corporation as of the close of each quarter of such
taxable year, over
``(B) the amount of earnings and profits described
in section 959(c)(1)(A) with respect to such
shareholder, or
``(2) such shareholder's pro rata share of the applicable
earnings of such controlled foreign corporation.
The amount taken into account under paragraph (1) with respect to any
property shall be its adjusted basis as determined for purposes of
computing earnings and profits, reduced by any liability to which the
property is subject.
``(b) Adjustments for Certain Distributions; Other Special Rules.--
``(1) Applicable earnings.--For purposes of this section,
the term `applicable earnings' has the meaning given to such
term by section 956A(b), except that the provisions of such
section disregarding earnings and profits accumulated in
taxable years beginning before October 1, 1993 shall be
disregarded.
``(2) Special rule where corporation ceases to be
controlled foreign corporation.--Rules similar to the rules of
section 956A(e) shall apply for purposes of this section.''
(b) Conforming Amendments.--
(1) Subparagraph (B) of section 951(a)(1) is amended to
read as follows:
``(B) the amount determined under section 956 with
respect to such shareholder for such year (but only to
the extent not excluded from gross income under section
959(a)(2)); and''
(2) Subsection (a) of section 951 is amended by striking
paragraph (4).
(c) Effective Date.--The amendments made by this section shall
apply to taxable years of controlled foreign corporations beginning
after September 30, 1993, and to taxable years of United States
shareholders in which or with which such taxable years of controlled
foreign corporations end.
SEC. 8233. OTHER MODIFICATIONS TO SUBPART F.
(a) Same Country Exception Not To Apply to Certain Dividends.--
(1) In general.--Paragraph (3) of section 954(c) (relating
to certain income received from related persons) is amended by
adding at the end thereof the following new subparagraph:
``(C) Exception for certain dividends.--
Subparagraph (A)(i) shall not apply to any dividend
with respect to any stock which is attributable to
earnings and profits of the distributing corporation
accumulated during any period during which the person
receiving such dividend did not hold such stock.''
(2) Effective date.--The amendment made by paragraph (1)
shall apply to taxable years of controlled foreign corporations
beginning after September 30, 1993, and to taxable years of
United States shareholders in which or with which such taxable
years of controlled foreign corporations end.
(b) Simplification of Section 960(b).--
(1) In general.--Subsection (b) of section 960 is amended--
(A) by redesignating paragraphs (3) and (4) as
paragraphs (4) and (5), respectively, and
(B) by striking paragraphs (1) and (2) and
inserting the following new paragraphs:
``(1) Increase in section 904 limitation.--In the case of
any taxpayer who--
``(A) either (i) chose to have the benefits of
subpart A of this part for a taxable year beginning
after September 30, 1993, in which he was required
under section 951(a) to include any amount in his gross
income, or (ii) did not pay or accrue for such taxable
year any income, war profits, or excess profits taxes
to any foreign country or to any possession of the
United States,
``(B) chooses to have the benefits of subpart A of
this part for any taxable year in which he receives 1
or more distributions or amounts which are excludable
from gross income under section 959(a) and which are
attributable to amounts included in his gross income
for taxable years referred to in subparagraph (A), and
``(C) for the taxable year in which such
distributions or amounts are received, pays, or is
deemed to have paid, or accrues income, war profits, or
excess profits taxes to a foreign country or to any
possession of the United States with respect to such
distributions or amounts,
the limitation under section 904 for the taxable year in which
such distributions or amounts are received shall be increased
by the lesser of the amount of such taxes paid, or deemed paid,
or accrued with respect to such distributions or amounts or the
amount in the excess limitation account as of the beginning of
such taxable year.
``(2) Excess limitation account.--
``(A) Establishment of account.--Each taxpayer
meeting the requirements of paragraph (1)(A) shall
establish an excess limitation account. The opening
balance of such account shall be zero.
``(B) Increases in account.--For each taxable year
beginning after September 30, 1993, the taxpayer shall
increase the amount in the excess limitation account by
the excess (if any) of--
``(i) the amount by which the limitation
under section 904(a) for such taxable year was
increased by reason of the total amount of the
inclusions in gross income under section 951(a)
for such taxable year, over
``(ii) the amount of any income, war
profits, and excess profits taxes paid, or
deemed paid, or accrued to any foreign country
or possession of the United States which were
allowable as a credit under section 901 for
such taxable year and which would not have been
allowable but for the inclusions in gross
income described in clause (i).
Proper reductions in the amount added to the account
under the preceding sentence for any taxable year shall
be made for any increase in the credit allowable under
section 901 for such taxable year by reason of a
carryback if such increase would not have been
allowable but for the inclusions in gross income
described in clause (i).
``(C) Decreases in account.--For each taxable year
beginning after September 30, 1993, for which the
limitation under section 904 was increased under
paragraph (1), the taxpayer shall reduce the amount in
the excess limitation account by the amount of such
increase.
``(3) Distributions of income previously taxed in years
beginning before october 1, 1993.--If the taxpayer receives a
distribution or amount in a taxable year beginning after
September 30, 1993, which is excluded from gross income under
section 959(a) and is attributable to any amount included in
gross income under section 951(a) for a taxable year beginning
before October 1, 1993, the limitation under section 904 for
the taxable year in which such amount or distribution is
received shall be increased by the amount determined under this
subsection as in effect on the day before the date of the
enactment of the Revenue Reconcilation Act of 1993.''
(2) Effective date.--The amendment made by paragraph (1)
shall apply to taxable years beginning after September 30,
1993.
Subpart B--Allocation of Research and Experimental Expenditures
SEC. 8234. ALLOCATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES.
(a) General Rule.--Subparagraph (B) of section 864(f)(1) (relating
to allocation of research and experimental expenditures) is amended by
striking ``64 percent'' each place it appears and inserting ``50
percent''.
(b) Conforming Amendments.--
(1) Subsection (f) of section 864 is amended by striking
paragraph (5) and inserting the following new paragraphs:
``(5) Regulations.--The Secretary shall prescribe such
regulations as may be appropriate to carry out the purposes of
this subsection, including regulations relating to the
determination of whether any expenses are attributable to
activities conducted in the United States or outside the United
States and regulations providing such adjustments to the
provisions of this subsection as may be appropriate in the case
of cost-sharing arrangements and contract research.
``(6) Applicability.--This subsection shall apply to the
taxpayer's first taxable year (beginning on or before August 1,
1994) following the taxpayer's last taxable year to which
Revenue Procedure 92-56 applies or would apply if the taxpayer
elected the benefits of such Revenue Procedure.''
(2) Subparagraph (D) of section 864(f)(4) is amended by
striking ``subparagraph (C)'' and inserting ``subparagraph (B)
or (C)''.
Subpart C--Other Provisions
SEC. 8235. REPEAL OF CERTAIN EXCEPTIONS FOR WORKING CAPITAL.
(a) Provisions Relating to Oil and Gas Income.--
(1) Amendments to section 907.--
(A) Paragraph (1) of section 907(c) is amended by
adding at the end thereof the following new flush
sentence:
``Such term does not include any dividend or interest income which is
passive income (as defined in section 904(d)(2)(A)).''.
(B) Paragraph (2) of section 907(c) is amended by
adding at the end thereof the following new flush
sentence:
``Such term does not include any dividend or interest income which is
passive income (as defined in section 904(d)(2)(A)).''.
(2) Separate application of foreign tax credit.--Clause
(iii) of section 904(d)(2)(A) is amended by inserting ``and''
at the end of subclause (II), by striking ``, and'' at the end
of subclause (III) and inserting a period, and by striking
subclause (IV).
(3) Treatment under subpart f.--
(A) Paragraph (1) of section 954(g) is amended by
adding at the end thereof the following new flush
sentence:
Such term shall not include any foreign personal holding company income
(as defined in subsection (c)).''.
(B) Paragraph (8) of section 954(b) is amended by
striking ``(1),''.
(b) Treatment of Shipping Income.--Subsection (f) of section 954 is
amended by adding at the end thereof the following new sentence: ``Such
term shall not include any dividend or interest income which is foreign
personal holding company income (as defined in subsection (c)).''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1992.
SEC. 8236. MODIFICATIONS OF ACCURACY-RELATED PENALTY.
(a) Threshold Requirement.--Clause (ii) of section 6662(e)(1)(B)
(relating to substantial valuation misstatement under chapter 1) is
amended to read as follows:
``(ii) the net section 482 transfer price
adjustment for the taxable year exceeds the
lesser of $5,000,000 or 10 percent of the
taxpayer's gross receipts.''
(b) Certain Adjustments Excluded in Determining Threshold.--
Subparagraph (B) of section 6662(e)(3) is amended to read as follows:
``(B) Certain adjustments excluded in determining
threshold.--For purposes of determining whether the
threshold requirements of paragraph (1)(B)(ii) are met,
the following shall be excluded:
``(i) Any portion of the net increase in
taxable income referred to in subparagraph (A)
which is attributable to any redetermination of
a price if--
``(I) it is established that the
taxpayer determined such price in
accordance with a specific pricing
method set forth in the regulations
prescribed under section 482 and that
the taxpayer's use of such method was
reasonable,
``(II) the taxpayer has
documentation (which was in existence
as of the time of filing the return)
which sets forth the determination of
such price in accordance with such a
method and which establishes that the
use of such method was reasonable, and
``(III) the taxpayer provides such
documentation to the Secretary within
30 days of a request for such
documentation.
``(ii) Any portion of the net increase in
taxable income referred to in subparagraph (A)
which is attributable to a redetermination of
price where such price was not determined in
accordance with such a specific pricing method
if--
``(I) the taxpayer establishes that
none of such pricing methods was likely
to result in a price that would clearly
reflect income, the taxpayer used
another pricing method to determine
such price, and such other pricing
method was likely to result in a price
that would clearly reflect income,
``(II) the taxpayer has
documentation (which was in existence
as of the time of filing the return)
which sets forth the determination of
such price in accordance with such
other method and which establishes that
the requirements of subclause (I) were
satisfied, and
``(III) the taxpayer provides such
documentation to the Secretary within
30 days of request for such
documentation.
``(iii) Any portion of such net increase
which is attributable to any transaction solely
between foreign corporations unless, in the
case of any such corporations, the treatment of
such transaction affects the determination of
income from sources within the United States or
taxable income effectively connected with the
conduct of a trade or business within the
United States.''
(c) Coordination With Reasonable Cause Exception.--Paragraph (3) of
section 6662(e) is amended by adding at the end thereof the following
new subparagraph:
``(D) Coordination with reasonable cause
exception.--For purposes of section 6664(c) the
taxpayer shall not be treated as having reasonable
cause for any portion of an underpayment attributable
to a net section 482 transfer price adjustment unless
such taxpayer meets the requirements of clause (i),
(ii), or (iii) of subparagraph (B) with respect to such
portion.''
(d) Conforming Amendment.--Clause (iii) of section 6662(h)(2)(A) is
amended to read as follows:
``(iii) in paragraph (1)(B)(ii)--
``(I) `$20,000,000' for
`$5,000,000', and
``(II) `20 percent' for `10
percent'.''
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 1993.
SEC. 8237. DENIAL OF PORTFOLIO INTEREST EXEMPTION FOR CONTINGENT
INTEREST.
(a) General Rule.--
(1) Subsection (h) of section 871 (relating to repeal of
tax on interest of nonresident alien individuals received from
certain portfolio debt investments) is amended by redesignating
paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7),
respectively, and by inserting after paragraph (3) the
following new paragraph:
``(4) Portfolio interest not to include certain contingent
interest.--For purposes of this subsection--
``(A) In general.--Except as otherwise provided in
this paragraph, the term `portfolio interest' shall not
include--
``(i) any interest if the amount of such
interest is determined by reference to--
``(I) any receipts, sales or other
cash flow of the debtor or a related
person,
``(II) any income or profits of the
debtor or a related person,
``(III) any change in value of any
property of the debtor or a related
person, or
``(IV) any dividend, partnership
distributions, or similar payments made
by the debtor or a related person, or
``(ii) any other type of contingent
interest that is identified by the Secretary by
regulation, where a denial of the portfolio
interest exemption is necessary or appropriate
to prevent avoidance of Federal income tax.
``(B) Related person.--The term `related person'
means any person who is related to the debtor within
the meaning of section 267(b) or 707(b)(1), or who is a
party to any arrangement undertaken for a purpose of
avoiding the application of this paragraph.
``(C) Exceptions.--Subparagraph (A)(i) shall not
apply to--
``(i) any amount of interest solely by
reason of the fact that the timing of any
interest or principal payment is subject to a
contingency,
``(ii) any amount of interest solely by
reason of the fact that the interest is paid
with respect to nonrecourse or limited recourse
indebtedness,
``(iii) any amount of interest all or
substantially all of which is determined by
reference to any other amount of interest not
described in subparagraph (A) (or by reference
to the principal amount of indebtedness on
which such other interest is paid),
``(iv) any amount of interest solely by
reason of the fact that the debtor or a related
person enters into a hedging transaction to
reduce the risk of interest rate or currency
fluctuations with respect to such interest,
``(v) any amount of interest determined by
reference to--
``(I) changes in the value of
property (including stock) that is
actively traded (within the meaning of
section 1092(d)) other than property
described in section 897(c)(1) or (g),
``(II) the yield on property
described in subclause (I), other than
a debt instrument that pays interest
described in subparagraph (A), or stock
or other property that represents a
beneficial interest in the debtor or a
related person, or
``(III) changes in any index of the
value of property described in
subclause (I) or of the yield on
property described in subclause (II),
and
``(vi) any other type of interest
identified by the Secretary by regulation.
``(D) Exception for certain existing
indebtedness.--Subparagraph (A) shall not apply to any
interest paid or accrued with respect to any
indebtedness with a fixed term--
``(i) which was issued on or before April
7, 1993, or
``(ii) which was issued after such date
pursuant to a written binding contract in
effect on such date and at all times thereafter
before such indebtedness was issued.''
(2) Subsection (c) of section 881 is amended by
redesignating paragraphs (4), (5), and (6) as paragraphs (5),
(6), and (7), respectively, and by inserting after paragraph
(3) the following new paragraph:
``(4) Portfolio interest not to include certain contingent
interest.--For purposes of this subsection, the term `portfolio
interest' shall not include any interest which is treated as
not being portfolio interest under the rules of section
871(h)(4).''
(b) Conforming Amendments.--
(1) Clause (ii) of section 871(h)(2)(B) is amended by
striking ``paragraph (4)'' and inserting ``paragraph (5)''.
(2) Clause (ii) of section 881(c)(2)(B) is amended by
striking ``section 871(h)(4)'' and inserting ``section
871(h)(5)''.
(3) Paragraph (6) of section 881(c) (as redesignated by
subsection (a)) is amended by striking ``section 871(h)(5)''
each place it appears and inserting ``section 871(h)(6)''.
(4) Paragraph (9) of section 1441(c) is amended by striking
``section 871(h)(3)'' and inserting ``section 871(h)(3) or
(4)''.
(5) Subsection (a) of section 1442 is amended--
(A) by striking ``871(h)(3)'' and inserting
``871(h)(3) or (4)'', and
(B) by striking ``881(c)(3)'' and inserting
``881(c)(3) or (4)''.
(c) Effective Date.--The amendments made by this section shall
apply to interest received after December 31, 1993.
SEC. 8238. REGULATIONS DEALING WITH CONDUIT ARRANGEMENTS.
Section 7701 is amended by redesignating subsection (l) as
subsection (m) and by inserting after subsection (k) the following new
subsection:
``(l) Regulations Relating to Conduit Arrangements.--The Secretary
may prescribe regulations recharacterizing any multiple-party financing
transaction as a transaction directly among any 2 or more of such
parties where the Secretary determines that such recharacterization is
appropriate to prevent avoidance of any tax imposed by this title.''
SEC. 8239. TREATMENT OF EXPORT OF CERTAIN SOFTWOOD LOGS.
(a) Foreign Sales Corporations.--Paragraph (2) of section 927(a)
(relating to exclusion of certain property) is amended by striking
``or'' at the end of subparagraph (C), by striking the period at the
end of subparagraph (D) and inserting ``, or'', and by adding at the
end the following:
``(E) any unprocessed timber which is a softwood.
For purposes of subparagraph (E), the term `unprocessed timber'
means any log, cant, or similar form of timber.''
(b) Domestic International Sales Corporations.--Paragraph (2) of
section 993(c) (relating to exclusion of certain property) is amended--
(1) by striking ``or'' at the end of subparagraph (C), by
striking the period at the end of subparagraph (D) and
inserting ``, or'', and by adding after subparagraph (D) the
following new subparagraph:
``(E) any unprocessed timber which is a
softwood.'', and
(2) by adding at the end the following new sentence: ``For
purposes of subparagraph (E), the term `unprocessed timber'
means any log, cant, or similar form of timber.''
(c) Source Rule.--Subsection (b) of section 865 (relating to source
rules for personal property sales) is amended by adding at the end the
following: ``Notwithstanding the preceding sentence, any income from
the sale of any unprocessed timber which is a softwood and was cut from
an area in the United States shall be sourced in the United States and
the rules of sections 862(a)(6) and 863(b) shall not apply to any such
income. For purposes of the preceding sentence, the term `unprocessed
timber' means any log, cant, or similar form of timber.''
(d) Elimination of Deferral.--Subsection (d) of section 954 is
amended by adding at the end the following new paragraph:
``(4) Special rule for certain timber products.--For
purposes of subsection (a)(2), the term `foreign base company
sales income' includes any income (whether in the form of
profits, commissions, fees, or otherwise) derived in connection
with--
``(A) the sale of any unprocessed timber referred
to in section 865(b), or
``(B) the milling of any such timber outside the
United States.
Subpart G shall not apply to any amount treated as subpart F
income by reason of this paragraph.''
(e) Effective Date.--The amendments made by this section shall
apply to sales, exchanges, or other dispositions after the date of the
enactment of this Act.
PART IV--TRANSPORTATION FUELS PROVISIONS
Subpart A--Transportation Fuels Tax
SEC. 8241. TRANSPORTATION FUELS TAX.
(a) Gasoline.--
(1) In general.--Clause (iii) of section 4081(a)(2)(B)
(relating to rates of tax) is amended to read as follows:
``(iii) the deficit reduction rate is 6.8 cents a
gallon (4.3 cents a gallon on and after October 1,
1995).''
(2) Deficit reduction rate made permanent.--Section 4081(d)
(relating to termination) is amended by striking paragraph (3).
(b) Diesel Fuel and Aviation Fuel.--
(1) Diesel fuel.--
(A) In general.--Paragraph (4) of section 4091(b)
(relating to rate of tax) is amended by striking ``2.5
cents per gallon'' and inserting ``6.8 cents per gallon
(4.3 cents per gallon on and after October 1, 1995)''.
(B) Diesel fuel deficit reduction rate made
permanent.--Section 4091(b)(6) (relating to
termination) is amended by striking subparagraph (D).
(2) Aviation fuel.--
(A) Gasoline in noncommercial aviation.--Paragraph
(3) of section 4041(c) is amended to read as follows:
``(3) Rate of tax.--The rate of tax imposed by paragraph
(2) on any gasoline is 1 cent.''
(3) Conforming amendments.--
(A) Subparagraphs (A) and (B) of section 4093(c)(2)
are amended to read as follows:
``(A) No refund of certain taxes on fuel used in
diesel-powered trains.--In the case of fuel sold for
use in a diesel-powered train, paragraph (1) shall not
apply to so much of the tax imposed by section 4091 as
is attributable to the Leaking Underground Storage Tank
Trust Fund financing rate and the diesel fuel deficit
reduction rate imposed under such section. The
preceding sentence shall not apply in the case of fuel
sold for exclusive use by a State or any political
subdivision thereof.
``(B) No refund of certain taxes on fuel used in
aircraft.--In the case of fuel sold for use in any
aircraft (except supplies for vessels or aircraft
within the meaning of section 4221(d)(3)), paragraph
(1) also shall not apply to so much of the tax imposed
by section 4091 as is attributable to the Leaking
Underground Storage Tank Trust Fund financing rate and
the aviation fuel deficit reduction rate imposed by
such section. The preceding sentence shall not apply in
the case of fuel sold for exclusive use by a State or
any political subdivision thereof.''
(B) Section 4093(d) is amended by inserting ``and
the aviation fuel deficit reduction rate'' after
``rate''.
(c) Special Fuels.--Section 4041(m)(1)(A) is amended by striking
``1.25 cents'' and inserting ``5.55 cents (4.3 cents on and after
October 1, 1995)''.
(d) Fuel Used in Commercial Transportation on Inland Waterways.--
(1) In general.--Section 4042(b)(1) (relating to amount of
tax) is amended--
(A) by striking ``and'' at the end of subparagraph
(A),
(B) by striking the period at the end of
subparagraph (B) and inserting ``, and'', and
(C) by adding at the end thereof the following new
subparagraph:
``(C) the deficit reduction rate.''
(2) Rate.--Section 4042(b)(2) (relating to rates) is
amended by adding at the end the following new subparagraph:
``(C) The deficit reduction rate is 4.3 cents per
gallon.''
(e) Conforming Amendments.--
(1) Section 6421(f) is amended--
(A) by striking subparagraph (B) of paragraph (2)
and inserting the following:
``(B) in aviation which is not noncommercial
aviation (as so defined) with respect to the tax
imposed by section 4081 at the Leaking Underground
Storage Tank Trust Fund financing rate and at the
deficit reduction rate to the extent such deficit
reduction rate does not exceed 4.3 cents per gallon.'',
and
(B) by inserting ``and at the deficit reduction
rate to the extent such deficit reduction rate does not
exceed 4.3 cents per gallon'' after ``financing rate''
in paragraph (3), and
(C) by inserting ``and deficit reduction tax''
after ``tax'' in the heading for paragraph (3).
(2) Section 6427(l) is amended by striking paragraphs (3)
and (4) and inserting the following new paragraphs:
``(3) No refund of certain taxes on fuel used in diesel-
powered trains.--In the case of fuel used in a diesel-powered
train, paragraph (1) shall not apply to so much of the tax
imposed by section 4091 as is attributable to the Leaking
Underground Storage Tank Trust Fund financing rate and the
diesel fuel deficit reduction rate imposed by such section. The
preceding sentence shall not apply in the case of fuel sold for
exclusive use by a State or any political subdivision thereof.
``(4) No refund of certain taxes on fuel used in
aircraft.--In the case of fuel used in any aircraft (except
supplies for vessels or aircraft within the meaning of section
4221(d)(3)), paragraph (1) also shall not apply to so much of
the tax imposed by section 4091 as is attributable to the
Leaking Underground Storage Tank Trust Fund financing rate and
the aviation fuel deficit reduction rate imposed by such
section. The preceding sentence shall not apply in the case of
fuel sold for exclusive use by a State or any political
subdivision thereof.''
(3) Section 9502(b)(3) is amended by inserting ``and the
deficit reduction rate'' after ``financing rate''.
(4) Section 9503(b)(4)(B) is amended by inserting ``and the
deficit reduction rates under such sections to the extent such
rates do not exceed 4.3 cents per gallon'' after ``such
sections''.
(5) Section 9503(c)(4)(D) is amended by inserting ``and the
deficit reduction rates under such sections to the extent such
rates do not exceed 4.3 cents per gallon'' after ``such
sections''.
(6) Section 9503(c)(5)(B) is amended by inserting ``and the
deficit reduction rate under such section to the extent such
rate does not exceed 4.3 cents per gallon'' after ``such
section''.
(7) Section 9503(c)(6)(D) is amended by inserting ``and the
deficit reduction rate to the extent such rate does not exceed
4.3 cents per gallon'' after ``financing rate''.
(8) Section 9506(b) is amended by inserting ``and the
deficit reduction rate'' after ``financing rate''.
(f) Effective Date.--The amendments made by this section shall take
effect on October 1, 1993.
(g) Floor Stocks Taxes.--
(1) Imposition of tax.--In the case of gasoline, diesel
fuel, and aviation fuel on which tax was imposed under section
4081 or 4091 of the Internal Revenue Code of 1986 before
October 1, 1993, and which is held on such date by any person,
there is hereby imposed a floor stocks tax of 4.3 cents per
gallon on such gasoline, diesel fuel, and aviation fuel.
(2) Liability for tax and method of payment.--
(A) Liability for tax.--A person holding gasoline,
diesel fuel, or aviation fuel on October 1, 1993, to
which the tax imposed by paragraph (1) applies shall be
liable for such tax.
(B) Method of payment.--The tax imposed by
paragraph (1) shall be paid in such manner as the
Secretary shall prescribe.
(C) Time for payment.--The tax imposed by paragraph
(1) shall be paid on or before November 30, 1993.
(3) Definitions.--For purposes of this subsection--
(A) Held by a person.--Gasoline, diesel fuel, and
aviation fuel shall be considered as ``held by a
person'' if title thereto has passed to such person
(whether or not delivery to the person has been made).
(B) Gasoline.--The term ``gasoline'' has the
meaning given such term by section 4082 of such Code.
(C) Diesel fuel.--The term ``diesel fuel'' has the
meaning given such term by section 4092 of such Code.
(D) Aviation fuel.--The term ``aviation fuel'' has
the meaning given such term by section 4092 of such
Code.
(E) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury or his delegate.
(4) Exception for exempt uses.--The tax imposed by
paragraph (1) shall not apply to gasoline, diesel fuel, or
aviation fuel held by any person exclusively for any use to the
extent a credit or refund of the tax imposed by section 4081 or
4091 of such Code, as the case may be, is allowable for such
use.
(5) Exception for fuel held in vehicle tax.--No tax shall
be imposed by paragraph (1) on gasoline or diesel fuel held in
the tank of a motor vehicle or motorboat.
(6) Exception for certain amounts of fuel.--
(A) In general.--No tax shall be imposed by
paragraph (1)--
(i) on gasoline held on October 1, 1993, by
any person if the aggregate amount of gasoline
held by such person on such date does not
exceed 4,000 gallons, and
(ii) on diesel fuel or aviation fuel held
on October 1, 1993, by any person if the
aggregate amount of diesel fuel or aviation
fuel held by such person on such date does not
exceed 2,000 gallons.
The preceding sentence shall apply only if such person
submits to the Secretary (at the time and in the manner
required by the Secretary) such information as the
Secretary shall require for purposes of this paragraph.
(B) Exempt fuel.--For purposes of subparagraph (A),
there shall not be taken into account fuel held by any
person which is exempt from the tax imposed by
paragraph (1) by reason of paragraph (4) or (5).
(C) Controlled groups.--For purposes of this
paragraph--
(i) Corporations.--
(I) In general.--All persons
treated as a controlled group shall be
treated as 1 person.
(II) Controlled group.--The term
``controlled group'' has the meaning
given to such term by subsection (a) of
section 1563 of such Code; except that
for such purposes the phrase ``more
than 50 percent'' shall be substituted
for the phrase ``at least 80 percent''
each place it appears in such
subsection.
(ii) Nonincorporated persons under common
control.--Under regulations prescribed by the
Secretary, principles similar to the principles
of clause (i) shall apply to a group of persons
under common control where 1 or more of such
persons is not a corporation.
(7) Other law applicable.--All provisions of law, including
penalties, applicable with respect to the taxes imposed by
section 4081 of such Code in the case of gasoline and section
4091 of such Code in the case of diesel fuel shall, insofar as
applicable and not inconsistent with the provisions of this
subsection, apply with respect to the floor stock taxes imposed
by paragraph (1) to the same extent as if such taxes were
imposed by such section 4081 or 4091.
Subpart B--Modifications to Tax on Diesel Fuel
SEC. 8242. MODIFICATIONS TO TAX ON DIESEL FUEL.
(a) In General.--Subparts A and B of part III of subchapter A of
chapter 32 (relating to manufacturers excise taxes), as amended by
subpart A, are amended to read as follows:
``Subpart A--Gasoline and Diesel Fuel
``Sec. 4081. Imposition of tax.
``Sec. 4082. Exemptions for diesel fuel.
``Sec. 4083. Definitions and special
rule.
``Sec. 4084. Cross references.
``SEC. 4081. IMPOSITION OF TAX.
``(a) Tax Imposed.--
``(1) Tax on removal, entry, or sale.--
``(A) In general.--There is hereby imposed a tax at
the rate specified in paragraph (2) on--
``(i) the removal of a taxable fuel from
any refinery,
``(ii) the removal of a taxable fuel from
any terminal,
``(iii) the entry into the United States of
any taxable fuel for consumption, use, or
warehousing, and
``(iv) the sale of a taxable fuel to any
person who is not registered under section 4101
unless there was a prior taxable removal or
entry of such fuel under clause (i), (ii), or
(iii).
``(B) Exemption for bulk transfers to registered
terminals or refineries.--The tax imposed by this
paragraph shall not apply to any removal or entry of a
taxable fuel transferred in bulk to a terminal or
refinery if the person removing or entering the taxable
fuel and the operator of such terminal or refinery are
registered under section 4101.
``(2) Rates of tax.--
``(A) In general.--The rate of the tax imposed by
this section is the sum of--
``(i) the Highway Trust Fund financing
rate,
``(ii) the Leaking Underground Storage Tank
Trust Fund financing rate, and
``(iii) the deficit reduction rate.
``(B) Rates.--For purposes of subparagraph (A)--
``(i) the Highway Trust Fund financing rate
is--
``(I) 11.5 cents per gallon in the
case of gasoline, and
``(II) 17.5 cents per gallon in the
case of diesel fuel,
``(ii) the Leaking Underground Storage Tank
Trust Fund financing rate is 0.1 cent per
gallon, and
``(iii) the deficit reduction rate is 6.8
cents per gallon (4.3 cents per gallon on and
after October 1, 1995).
``(b) Treatment of Removal or Subsequent Sale by Blender.--
``(1) In general.--There is hereby imposed a tax at the
rate specified in subsection (a) on taxable fuel removed or
sold by the blender thereof.
``(2) Credit for tax previously paid.--If--
``(A) tax is imposed on the removal or sale of a
taxable fuel by reason of paragraph (1), and
``(B) the blender establishes the amount of the tax
paid with respect to such fuel by reason of subsection
(a),
the amount of the tax so paid shall be allowed as a credit
against the tax imposed by reason of paragraph (1).
``(c) Taxable Fuels Mixed With Alcohol at Refinery, Etc.--
``(1) Reduced rates.--
``(A) In general.--Under regulations prescribed by
the Secretary, subsection (a) shall be applied by
substituting rates which are the applicable fraction of
the otherwise applicable rates in the case of the
removal or entry of any taxable fuel for use in
producing at the time of such removal or entry a
qualified alcohol mixture. Subject to such terms and
conditions as the Secretary may prescribe (including
the application of section 4101), the treatment under
the preceding sentence also shall apply to use in
producing such a mixture after the time of such removal
or entry.
``(B) Applicable fraction.--For purposes of
subparagraph (A), the applicable fraction is--
``(i) in the case of a qualified alcohol
mixture which contains gasoline, the fraction
the numerator of which is 10 and the
denominator of which is--
``(I) 9 in the case of 10 percent
gasohol,
``(II) 9.23 in the case of 7.7
percent gasohol, and
``(III) 9.43 in the case of 5.7
percent gasohol, and
``(ii) in the case of a qualified alcohol
mixture which does not contain gasoline, \10/
9\.
``(2) Later separation of fuel from qualified alcohol
mixture.--If any person separates the taxable fuel from a
qualified alcohol mixture on which tax was imposed under
subsection (a) at the otherwise applicable Highway Trust Fund
financing rate (or its equivalent) by reason of this subsection
(or with respect to which a credit or payment was allowed or
made by reason of section 6427(f)(1)), such person shall be
treated as the refiner of such taxable fuel. The amount of tax
imposed on any removal of such fuel by such person shall be
reduced by the amount of tax imposed (and not credited or
refunded) on any prior removal or entry of such fuel.
``(3) Alcohol; qualified alcohol mixture.--For purposes of
this subsection--
``(A) Alcohol.--The term `alcohol' includes
methanol and ethanol but does not include alcohol
produced from petroleum, natural gas, or coal
(including peat). Such term does not include alcohol
with a proof of less than 190 (determined without
regard to any added denaturants).
``(B) Qualified alcohol mixture.--The term
`qualified alcohol mixture' means--
``(i) any mixture of gasoline with alcohol
if at least 5.7 percent of such mixture is
alcohol, and
``(ii) any mixture of diesel fuel with
alcohol if at least 10 percent of such mixture
is alcohol.
``(4) Otherwise applicable rates for gasoline mixtures.--
For purposes of this subsection--
``(A) In general.--In the case of the Highway Trust
Fund financing rate, the otherwise applicable rate for
gasoline in a qualified alcohol mixture is--
``(i) 6.1 cents a gallon for 10 percent
gasohol,
``(ii) 7.342 cents a gallon for 7.7 percent
gasohol, and
``(iii) 8.422 cents a gallon for 5.7
percent gasohol.
In the case of a mixture none of the alcohol in which
consists of ethanol, clauses (i), (ii), and (iii) shall
be applied by substituting `5.5 cents' for `6.1 cents',
`6.88 cents' for `7.342 cents', and `8.08 cents' for
`8.422 cents'.
``(B) 10 percent gasohol.--The term `10 percent
gasohol' means any mixture of gasoline with alcohol if
at least 10 percent of such mixture is alcohol.
``(C) 7.7 percent gasohol.--The term `7.7 percent
gasohol' means any mixture of gasoline with alcohol if
at least 7.7 percent, but not 10 percent or more, of
such mixture is alcohol.
``(D) 5.7 percent gasohol.--The term `5.7 percent
gasohol' means any mixture of gasoline with alcohol if
at least 5.7 percent, but not 7.7 percent or more, of
such mixture is alcohol.
``(5) Otherwise applicable rates for diesel fuel
mixtures.--For purposes of this subsection, in the case of the
Highway Trust Fund financing rate, the otherwise applicable
rate for diesel fuel in a qualified alcohol mixture is 12.1
cents per gallon (11.5 cents per gallon in the case of a
qualified alcohol mixture none of the alcohol in which consists
of ethanol).
``(6) Termination.--Paragraph (1) shall not apply to any
removal or sale after September 30, 2000.
``(d) Termination.--
``(1) Highway trust fund financing rate.--On and after
October 1, 1999, the Highway Trust Fund financing rate under
subsection (a)(2) shall not apply.
``(2) Leaking underground storage tank trust fund financing
rate.--The Leaking Underground Storage Tank Trust Fund
financing rate under subsection (a)(2) shall not apply after
December 31, 1995.
``(e) Refunds in Certain Cases.--Under regulations prescribed by
the Secretary, if any person who paid the tax imposed by this section
with respect to any taxable fuel establishes to the satisfaction of the
Secretary that a prior tax was paid (and not credited or refunded) with
respect to such taxable fuel, then an amount equal to the tax paid by
such person shall be allowed as a refund (without interest) to such
person in the same manner as if it were an overpayment of tax imposed
by this section.
``SEC. 4082. EXEMPTIONS FOR DIESEL FUEL.
``(a) In General.--Except as provided in subsection (d), the tax
imposed by section 4081 shall not apply to diesel fuel--
``(1) which the Secretary determines is destined for a
nontaxable use, and
``(2) which is indelibly dyed in accordance with
regulations which the Secretary shall prescribe.
Such regulations shall allow an individual choice of dye color approved
by the Secretary or chosen from any list of approved dye colors that
the Secretary may publish.
``(b) Nontaxable Use.--For purposes of this section, the term
`nontaxable use' means--
``(1) any use which is exempt from the tax imposed by
section 4041(a)(1) other than by reason of the imposition of
tax on any sale thereof,
``(2) any use in a train, and
``(3) any use described in section 6427(b)(1).
``(c) Regulations.--The Secretary shall prescribe such regulations
as may be necessary to carry out this section, including regulations
requiring the conspicuous labeling of retail diesel fuel pumps and
other delivery facilities to assure that persons are aware of which
fuel is available only for nontaxable uses.
``(d) Cross Reference.--
``For tax on train, motorboat, and
certain bus uses of fuel purchased tax-free, see section 4041(a)(1).
``SEC. 4083. DEFINITIONS AND SPECIAL RULE.
``(a) Taxable Fuel.--For purposes of this subpart--
``(1) In general.--The term `taxable fuel' means--
``(A) gasoline, and
``(B) diesel fuel.
``(2) Gasoline.--The term `gasoline' includes, to the
extent prescribed in regulations--
``(A) gasoline blend stocks, and
``(B) products commonly used as additives in
gasoline.
For purposes of subparagraph (A), the term `gasoline blend
stock' means any petroleum product component of gasoline.
``(3) Diesel fuel.--The term `diesel fuel' means any liquid
(other than gasoline) which is suitable for use as a fuel in a
diesel-powered highway vehicle, a diesel-powered train, or a
diesel-powered boat.
``(b) Certain Uses Defined as Removal.--If any person uses taxable
fuel (other than in the production of gasoline, diesel fuel, or special
fuels referred to in section 4041), such use shall for the purposes of
this chapter be considered a removal.
``SEC. 4084. CROSS REFERENCES.
``(1) For provisions to relieve farmers
from excise tax in the case of gasoline used on the farm for farming
purposes, see section 6420.
``(2) For provisions to relieve
purchasers of gasoline from excise tax in the case of gasoline used for
certain nonhighway purposes, used by local transit systems, or sold for
certain exempt purposes, see section 6421.
``(3) For provisions to relieve
purchasers from excise tax in the case of taxable fuel not used for
taxable purposes, see section 6427.
``Subpart B--Aviation Fuel
``Sec. 4091. Imposition of tax.
``Sec. 4092. Exemptions.
``Sec. 4093. Definitions.
``SEC. 4091. IMPOSITION OF TAX.
``(a) Tax on Sale.--
``(1) In general.--There is hereby imposed a tax on the
sale of aviation fuel by the producer or the importer thereof
or by any producer of aviation fuel.
``(2) Use treated as sale.--For purposes of paragraph (1),
if any producer uses aviation fuel (other than for a nontaxable
use as defined in section 6427(l)(2)(B)) on which no tax has
been imposed under such paragraph, then such use shall be
considered a sale.
``(b) Rate of Tax.--
``(1) In general.--The rate of the tax imposed by
subsection (a) shall be the sum of--
``(A) the Airport and Airway Trust Fund financing
rate,
``(B) the Leaking Underground Storage Tank Trust
Fund financing rate.
``(2) Airport and airway trust fund financing rate.--For
purposes of paragraph (1), the Airport and Airway Trust Fund
financing rate is 17.5 cents per gallon.
``(3) Leaking underground storage tank trust fund financing
rate.--For purposes of paragraph (1), the Leaking Underground
Storage Tank Trust Fund financing rate is 0.1 cent per gallon.
``(4) Deficit reduction rate.--For purposes of paragraph
(1), the deficit reduction rate is 4.3 cents per gallon.
``(5) Termination of rates.--
``(A) The Airport and Airway Trust Fund financing
rate shall not apply on and after January 1, 1996.
``(B) The Leaking Underground Storage Tank Fund
financing rate shall not apply during any period during
which the Leaking Underground Storage Tank Trust Fund
financing rate under section 4081 does not apply.
``(c) Reduced Rate of Tax for Aviation Fuel in Alcohol Mixture,
Etc.--
``(1) In general.--The Airport and Airway Trust Fund
financing rate shall be--
``(A) 4.1 cents per gallon in the case of the sale
of any mixture of aviation fuel if--
``(i) at least 10 percent of such mixture
consists of alcohol (as defined in section
4081(c)(3)), and
``(ii) the aviation fuel in such mixture
was not taxed under subparagraph (B), and
``(B) 4.56 cents per gallon in the case of the sale
of aviation fuel for use (at the time of such sale) in
producing a mixture described in subparagraph (A).
In the case of a sale described in subparagraph (B), the
Leaking Underground Storage Tank Trust Fund financing rate
shall be \1/9\ cent per gallon and the deficit reduction rate
shall be \10/9\ of such rate.
``(2) Later separation.--If any person separates the
aviation fuel from a mixture of the aviation fuel and alcohol
on which tax was imposed under subsection (a) at the Airport
and Airway Trust Fund financing rate equivalent to 4.1 cents
per gallon by reason of this subsection (or with respect to
which a credit or payment was allowed or made by reason of
section 6427(f)(1)), such person shall be treated as the
producer of such aviation fuel. The amount of tax imposed on
any sale of such aviation fuel by such person shall be reduced
by the amount of tax imposed (and not credited or refunded) on
any prior sale of such fuel.
``(3) Termination.--Paragraph (1) shall not apply to any
sale after September 30, 2000.
``(d) Lower Rates of Tax on Alcohol Mixtures Not Made From
Ethanol.--In the case of a mixture described in subsection (c)(1)(A)(i)
none of the alcohol in which is ethanol--
``(1) subsections (c)(1)(A) and (c)(2) shall each be
applied by substituting rates which are 0.6 cents less than the
rates contained therein, and
``(2) subsection (c)(1)(B) shall be applied by substituting
rates which are \10/9\ of the rates determined under paragraph
(1).
``SEC. 4092. EXEMPTIONS.
``(a) Nontaxable Uses.--The Airport and Airway Trust Fund financing
rate under section 4091 shall not apply to aviation fuel sold by a
producer or importer for use by the purchaser in a nontaxable use (as
defined in section 6427(l)(2)(B)).
``(b) Sales to Producer.--Under regulations prescribed by the
Secretary, the tax imposed by section 4091 shall not apply to aviation
fuel sold to a producer of such fuel.
``(c) Supplies for Vessels and Aircraft.--The Leaking Underground
Storage Tank Trust Fund financing rate and the deficit reduction rate
under section 4091 shall not apply to aviation fuel sold for use or
used as supplies for vessels or aircraft (within the meaning of section
4221(d)(3)).
``SEC. 4093. DEFINITIONS.
``(a) Aviation Fuel.--For purposes of this subpart, the term
`aviation fuel' means any liquid (other than any product taxable under
section 4081) which is suitable for use as a fuel in an aircraft.
``(b) Producer.--For purposes of this subpart--
``(1) Certain persons treated as producers.--
``(A) In general.--The term `producer' includes any
person described in subparagraph (B) and registered
under section 4101 with respect to the tax imposed by
section 4091.
``(B) Persons described.--A person is described in
this subparagraph if such person is--
``(i) a refiner, blender, or wholesale
distributor of aviation fuel, or
``(ii) a dealer selling aviation fuel
exclusively to producers of aviation fuel.
``(C) Reduced rate purchasers treated as
producers.--Any person to whom aviation fuel is sold at
a reduced rate under this subpart shall be treated as
the producer of such fuel.
``(2) Wholesale distributor.--For purposes of paragraph
(1), the term `wholesale distributor' includes any person who
sells aviation fuel to producers, retailers, or to users who
purchase in bulk quantities and deliver into bulk storage
tanks. Such term does not include any person who (excluding the
term `wholesale distributor' from paragraph (1)) is a producer
or importer.''
(b) Civil Penalty For Using Reduced-Rate Fuel For Taxable Use.--
(1) In general.--Part I of subchapter B of chapter 68
(relating to assessable penalties) is amended by adding at the
end thereof the following new section:
``SEC. 6714. DYED FUEL SOLD FOR USE OR USED IN TAXABLE USE.
``(a) Imposition of Penalty.--If any dyed fuel--
``(1) is sold or held for sale by any person for any use
which such person knows or has reason to know is not a reduced-
tax use of such fuel, or
``(2) is used by any person for a use other than a reduced-
tax use and such person knew, or had reason to know, that such
fuel was so dyed,
then, in addition to the tax, such person shall pay a penalty on such
sale or use.
``(b) Amount of Penalty.--The amount of the penalty under
subsection (a) on any sale or use shall be the greater of--
``(1) $1,000, or
``(2) an amount equal to twice the excess of the aggregate
taxes which should have been imposed under section 4081 on the
fuel so sold or used over the prior taxes (if any) imposed on
such fuel under such section which have not been credited or
refunded.
``(c) Definitions.--For purposes of this section--
``(1) Dyed fuel.--The term `dyed fuel' means diesel fuel
dyed in accordance with section 4082.
``(2) Reduced-tax use.--The term `reduced-tax use' means,
with respect to any fuel, the use for which such fuel was
dyed.''
(2) Clerical amendment.--The table of sections for such
part I is amended by adding at the end thereof the following
new item:
``Sec. 6714. Dyed fuel sold for use or
used in taxable use.''
(c) Registered Vendors To Administer Claims for Refund of Diesel
Fuel.--Section 6427(l) (relating to nontaxable uses of diesel fuel and
aviation fuel) is amended by adding at the end the following new
paragraph:
``(5) Registered vendors to administer claims for refund of
diesel fuel sold to farmers and state and local governments.--
``(A) In general.--Paragraph (1) shall not apply to
the ultimate purchaser of undyed diesel fuel used on a
farm for farming purposes (within the meaning of
section 6420(c)) or for the exclusive use of a State or
local government.
``(B) Payment to ultimate, registered vendor.--The
amount which would have otherwise been paid under
paragraph (1) (without regard to subparagraph (A))
shall be paid to the ultimate vendor of such fuel, if
such vendor--
``(i) is registered under section 4101, and
``(ii) meets the requirements of section
6416(a).''
(d) Technical and Conforming Amendments.--
(1) Subsection (c) of section 40 is amended by striking ``,
section 4081(c), or section 4091(c)'' and inserting ``or
section 4081(c)''.
(2) Subsection (a) of section 4101 is amended by striking
``4081'' and inserting ``4041(a)(1), 4081,''.
(3) Section 4102 is amended by striking ``gasoline'' and
inserting ``any taxable fuel (as defined in section 4083)''.
(4) Paragraph (1) of section 4041(a), as amended by
subtitle A, is amended to read as follows:
``(1) Tax on diesel fuel in certain cases.--
``(A) In general.--There is hereby imposed a tax on
any liquid other than gasoline (as defined in section
4083)--
``(i) sold by any person to an owner,
lessee, or other operator of a diesel-powered
highway vehicle, a diesel-powered train, or a
diesel-powered boat for use as a fuel in such
vehicle, train, or boat, or
``(ii) used by any person as a fuel in a
diesel-powered highway vehicle, a diesel-
powered train, or a diesel-powered boat unless
there was a taxable sale of such fuel under
clause (i).
``(B) Exemption for previously taxed fuel.--No tax
shall be imposed by this paragraph on the sale or use
of diesel fuel if there was a taxable removal of such
fuel under section 4081 and the tax thereon was not
credited or refunded.
``(C) Rate of tax.--
``(i) In general.--Except as otherwise
provided in this subparagraph, the rate of the
tax imposed by this paragraph shall be the sum
of the Highway Trust Fund financing rate on
diesel fuel and the deficit reduction rate in
effect under section 4081 at the time of such
sale or use.
``(ii) Certain rates not to apply to
trains.--
``(I) Highway trust fund financing
rate.--The Highway Trust Fund financing
rate shall not apply to any sale for
use, or use, of fuel in a train.
``(II) Deficit reduction rate.--The
deficit reduction rate shall not apply
to any sale for use, or use, of fuel in
a train if such fuel is used by a State
or any political subdivision thereof
``(iii) Certain bus uses.--If the
limitation in section 6427(b)(2)(A) applies to
fuel sold for use or used in an automobile bus,
the Highway Trust Fund financing rate shall be
3 cents per gallon and so much of the deficit
reduction rate as exceeds 4.3 cents per gallon
shall not apply.''
(5) Paragraph (2) of section 4041(a), as amended by
subtitle A, is amended by striking ``or paragraph (1) of this
subsection'' and by inserting ``on gasoline'' after ``Highway
Trust Fund financing rate''.
(6) Paragraph (1) of section 4041(c), as amended by subpart
A, is amended by striking ``the aviation fuel deficit reduction
rate'' and inserting ``the deficit reduction rate imposed under
section 4091 on''.
(7) Paragraph (2) of section 4041(c) is amended by striking
``any product taxable under section 4081'' and inserting
``gasoline (as defined in section 4083)''.
(8) Paragraph (2) of section 4041(d) is amended--
(A) by striking ``(other than a product taxable
under section 4081)'' and inserting ``(other than
gasoline (as defined in section 4083))'', and
(B) by striking ``section 4091'' and inserting
``section 4081''.
(9) Paragraph (3) of section 4041(d) is amended by striking
``(other than any product taxable under section 4081)'' and
inserting ``(other than gasoline (as defined in section
4083))''.
(10) Subparagraph (A) of section 4041(k)(1) is amended by
striking ``sections 4081(c) and 4091(c), as the case may be''
and inserting ``section 4081(c)''.
(11) Subparagraph (B) of section 4041(m)(1) is amended by
striking ``section 4091(d)(1)'' and inserting ``section
4091(c)(1)''.
(12) Section 6206 is amended by striking ``4041 or 4091''
and inserting ``4041, 4081, or 4091''.
(13) The heading for subsection (f) of section 6302 is
amended by inserting ``and Diesel Fuel'' after ``Gasoline''.
(14) Paragraph (1) of section 6412(a) is amended by
striking ``gasoline'' each place it appears (including the
heading) and inserting ``taxable fuel''.
(15)(A) Subparagraph (A) of section 6416(a)(4) is amended
by striking ``product'' each place it appears and inserting
``gasoline''.
(B) Subparagraph (B) of section 6416(a)(4) is amended by
striking all that follows ``substituting'' and inserting ```any
gasoline taxable under section 4081' for `aviation fuel'
therein).''
(16) The third sentence of section 6416(b)(2) is amended by
inserting ``any tax imposed under section 4081 on diesel fuel
and'' after ``in the case of''.
(17) Sections 6420(c)(5) and 6421(e)(1) are each amended by
striking ``section 4082(b)'' and inserting ``section 4083(a)''.
(18) Section 6421(e)(2)(B)(iv), as added in subtitle A, is
amended
(A) by striking ``4091'' both places it appears and
inserting ``4081'', and
(B) by striking ``diesel fuel deficit'' in
subclause (I) and inserting ``deficit''.
(19) Subsection (b) of section 6427 is amended--
(A) by striking ``if any fuel'' in paragraph (1)
and inserting ``if any fuel other than gasoline (as
defined in section 4083(a))'', and
(B) by striking ``4091'' each place it appears and
inserting ``4081''.
(20)(A) Paragraph (1) of section 6427(f) is amended by
striking ``, 4091(c)(1)(A), or 4091(d)(1)(A)'' and inserting
``or 4091(c)(1)(A)''.
(B) Paragraph (2) of section 6427(f) is amended to read as
follows:
``(2) Definitions.--For purposes of paragraph (1)--
``(A) Regular tax rate.--The term `regular tax
rate' means--
``(i) in the case of gasoline or diesel
fuel, the aggregate rate of tax imposed by
section 4081 determined without regard to
subsection (c) thereof, and
``(ii) in the case of aviation fuel, the
aggregate rate of tax imposed by section 4091
determined without regard to subsection (c)
thereof.
``(B) Incentive tax rate.--The term `incentive tax
rate' means--
``(i) in the case of gasoline or diesel
fuel, the aggregate rate of tax imposed by
section 4081 with respect to fuel described in
subsection (c)(1) thereof, and
``(ii) in the case of aviation fuel, the
aggregate rate of tax imposed by section 4091
with respect to fuel described in subsection
(c)(1)(B) thereof.''
(21) Subsection (h) of section 6427 is amended by striking
``section 4082(b)'' and inserting ``section 4083(a)(2)''.
(22) Paragraph (3) of section 6427(i) is amended--
(A) by striking ``gasohol'' in the heading and
inserting ``alcohol mixture'', and
(B) by striking ``gasoline used to produce gasohol
(as defined in section 4081(c)(1))'' in subparagraph
(A) and inserting ``gasoline or diesel fuel used to
produce a qualified alcohol mixture (as defined in
section 4081(c)(3))''.
(23) The heading of paragraph (4) of section 6427(i) is
amended by inserting ``4081 or'' before ``4091''.
(24) Subsection (l) of section 6427, as amended by subpart
A, is amended to read as follows:
``(l) Nontaxable Uses of Diesel Fuel and Aviation Fuel.--
``(1) In general.--Except as provided in subsection (k) and
in paragraphs (3) and (4) of this subsection, if--
``(A) any diesel fuel on which tax has been imposed
by section 4081, or
``(B) any aviation fuel on which tax has been
imposed by section 4091,
is used by any person in a nontaxable use, the Secretary shall
pay (without interest) to the ultimate purchaser of such fuel
an amount equal to the aggregate amount of tax imposed on such
fuel under section 4081 or 4091, as the case may be.
``(2) Nontaxable use.--For purposes of this subsection, the
term `nontaxable use' means--
``(A) in the case of diesel fuel, any use which is
exempt from the tax imposed by section 4041(a)(1) other
than by reason of the imposition of tax on any sale
thereof, and
``(B) in the case of aviation fuel, any use which
is exempt from the tax imposed by section 4041(c)(1)
other than by reason of the imposition of tax on any
sale thereof.
``(3) No refund of certain taxes on fuel used in diesel-
powered trains.--Fuel used in a diesel-powered train shall be
treated as a nontaxable use for purposes of this section,
except that paragraph (1) shall not apply to so much of the tax
imposed by section 4081 as is attributable to the Leaking
Underground Storage Tank Trust Fund financing rate and the
deficit reduction rate imposed by such section, unless such
fuel was used by a State or any political subdivision thereof.
``(4) No refund of certain taxes on fuels used in
aircraft.--In the case of fuel used in any aircraft (other than
as supplies for vessels or aircraft, within the meaning of
section 4221(d)(3)), paragraph (1) also shall not apply to so
much of the tax imposed by section 4091 as is attributable to
the Leaking Underground Storage Tank Trust Fund financing rate
and the deficit reduction rate imposed by such section. The
preceding sentence shall not apply if such fuel was used by a
State or any political subdivision thereof.''
(25) Paragraph (1) of section 9503(b) is amended--
(A) by striking ``gasoline),'' in subparagraph (E)
and inserting ``gasoline and diesel fuel), and'',
(B) by striking subparagraph (F), and
(C) by redesignating subparagraph (G) as
subparagraph (F).
(26)(A) Subparagraph (B) of section 9503(b)(4) is amended
by striking ``, 4081, and 4091'' and inserting ``and 4081''.
(B) Subparagraph (C) of section 9503(b)(4), as amended by
subtitle A, is amended by striking ``4091'' and inserting
``4081''.
(27) Subparagraph (D) of section 9503(c)(6) is amended by
striking ``, 4081, and 4091'' and inserting ``and 4081''.
(28) Paragraph (2) of section 9503(e) is amended--
(A) by striking ``, 4081, and 4091'' and inserting
``and 4081'', and
(B) by striking ``, 4081, or 4091'' and inserting
``or 4081''.
(29) Subsection (b) of section 9508 is amended--
(A) by inserting ``and diesel fuel'' after
``gasoline'' in paragraph (2),
(B) by striking ``diesel fuel and'' in paragraph
(3), and
(C) by striking ``4091'' in the last sentence, as
added by subtitle A, and inserting ``4081''.
(30) The table of subparts for part III of subchapter A of
chapter 32 is amended by striking the items relating to
subparts A and B and inserting the following new items:
``Subpart A. Gasoline and diesel fuel.
``Subpart B. Aviation fuel.''
(e) Effective Date.--The amendments made by this section shall take
effect on January 1, 1994.
SEC. 8243. FLOOR STOCKS TAX.
(a) In General.--There is hereby imposed a floor stocks tax on
diesel fuel held by any person on January 1, 1994, if--
(1) no tax was imposed on such fuel under section 4041(a)
or 4091 of the Internal Revenue Code of 1986 as in effect on
the day before the date of the enactment of this Act, and
(2) tax would have been imposed by section 4081 of such
Code, as amended by this Act, on any prior removal, entry, or
sale of such fuel had such section 4081 applied to such fuel
for periods before such date of enactment.
(b) Rate of Tax.--The rate of the tax imposed by subsection (a)
shall be the amount of tax which would be imposed under section 4081 of
the Internal Revenue Code of 1986 if there were a taxable sale of such
fuel on such date.
(c) Liability and Payment of Tax.--
(1) Liability for tax.--A person holding the diesel fuel on
January 1, 1994, to which the tax imposed by this section
applies shall be liable for such tax.
(2) Method of payment.--The tax imposed by this section
shall be paid in such manner as the Secretary shall prescribe.
(3) Time for payment.--The tax imposed by this section
shall be paid on or before July 31, 1994.
(d) Definitions.--For purposes of this section--
(1) Diesel fuel.--The term ``diesel fuel'' has the meaning
given such term by section 4083(a) of such Code.
(2) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or his delegate.
(e) Exceptions.--
(1) Persons entitled to credit or refund.--The tax imposed
by this section shall not apply to fuel held by any person
exclusively for any use to the extent a credit or refund of the
tax imposed by section 4081 is allowable for such use.
(2) Compliance with dyeing required.--Paragraph (1) shall
not apply to the holder of any fuel if the holder of such fuel
fails to comply with any requirement imposed by the Secretary
with respect to dyeing.
(f) Other Laws Applicable.--All provisions of law, including
penalties, applicable with respect to the taxes imposed by section 4081
of such Code shall, insofar as applicable and not inconsistent with the
provisions of this section, apply with respect to the floor stock taxes
imposed by this section to the same extent as if such taxes were
imposed by such section 4081.
Subpart C--Extension of Motor Fuel Tax Rates; Increased Deposits Into
Highway Trust Fund
SEC. 8244. EXTENSION OF MOTOR FUEL TAX RATES; INCREASED DEPOSITS INTO
HIGHWAY TRUST FUND.
(a) In General.--Clause (i) of section 4081(a)(2)(B), as amended by
subpart B, is amended--
(1) by striking ``11.5 cents'' and inserting ``14 cents'',
and
(2) by striking ``17.5 cents'' and inserting ``20 cents''.
(b) Conforming Amendments.--
(1) Subparagraph (A) of section 4081(c)(4), as so amended,
is amended to read as follows:
``(A) In general.--In the case of the Highway Trust
Fund financing rate, the otherwise applicable rate for
gasoline in a qualified alcohol mixture is--
``(i) 8.6 cents a gallon for 10 percent
gasohol,
``(ii) 9.842 cents a gallon for 7.7 percent
gasohol, and
``(iii) 10.922 cents a gallon for 5.7
percent gasohol.
In the case of a mixture none of the alcohol in which consists
of ethanol, clauses (i), (ii), and (iii) shall be applied by
substituting `8.0 cents' for `8.6 cents', `9.38 cents' for
`9.842 cents', and `10.58 cents' for `10.922'.''
(2) Paragraph (5) of section 4081(c), as so amended, is
amended--
(A) by striking ``12.1 cents'' and inserting ``14.6
cents'', and
(B) by striking ``11.5 cents'' and inserting
``14.0''.
(3) Subparagraph (A) of section 4041(m)(1), as amended by
subpart A, is amended to read as follows:
``(A) under subsection (a)(2) the Highway Trust
Fund financing shall be 7 cents per gallon and the
deficit reduction rate shall be 4.3 cents per gallon,
and''.
(4) Clause (ii) of section 4041(a)(1)(C), as so amended, is
amended--
(A) by striking ``The Highway Trust Fund financing
rate'' and inserting ``So much of the Highway Trust
Fund financing rate as exceeds 2.5 cents per gallon'',
and
(B) by striking ``Highway rate'' in the heading and
inserting ``Portion of highway rate''.
(5) Paragraph (4) of section 6427(l), as amended by subpart
B, is amended--
(A) by inserting ``2.5 cents per gallon of the
Highway Trust Fund financing rate and'' after
``attributable to'', and
(B) by striking ``deficit reduction tax'' in the
heading and inserting ``portion of tax''.
(6) Subsection (b) of section 9503 is amended by adding at
the end thereof the following new paragraph:
``(6) Retention of certain taxes in general fund.--
``(A) In general.--There shall not be taken into
account under paragraphs (1) and (2)--
``(i) the tax imposed by section 4081 on
diesel fuel used in any train, and
``(ii) so much of the nonhighway
recreational fuel taxes (as defined in
subsection (c)(6)(D)) as are attributable to
2.5 cents of the Highway Trust Fund financing
rate.
``(B) Transfers from highway trust fund.--For
purposes of determining the amount paid from the
Highway Trust Fund under subsection (c)(6), the Highway
Trust Fund financing rate shall be treated as being 2.5
cents less than the otherwise applicable rate.''
(c) Increase in Deposits in Mass Transit Account.--Paragraph (2) of
section 9503(e) is amended by striking ``1.5 cents'' and inserting ``2
cents''.
(d) Effective Date.--The amendments made by this section shall take
effect October 1, 1995, but the amendment made by subsection (c) shall
apply only to amounts attributable to taxes imposed on or after such
date.
PART V--COMPLIANCE PROVISIONS
SEC. 8251. MODIFICATIONS TO SUBSTANTIAL UNDERSTATEMENT AND RETURN-
PREPARER PENALTIES.
(a) Reasonable Basis Required.--
(1) Substantial understatement penalty.--Clause (ii) of
section 6662(d)(2)(B) (relating to reduction for understatement
due to position of taxpayer or disclosed item) is amended to
read as follows:
``(ii) any item if--
``(I) the relevant facts affecting
the item's tax treatment are adequately
disclosed in the return or in a
statement attached to the return, and
``(II) there is a reasonable basis
for the tax treatment of such item by
the taxpayer.''
(b) Effective Date.--The amendments made by this section shall
apply to returns the due dates for which (determined without regard to
extensions) are after December 31, 1993.
SEC. 8252. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY
CERTAIN FINANCIAL ENTITIES.
(a) In General.--Subpart B of part III of subchapter A of chapter
61 (relating to information concerning transactions with other persons)
is amended by adding at the end thereof the following new section:
``SEC. 6050P. RETURNS RELATING TO THE CANCELLATION OF INDEBTEDNESS BY
CERTAIN FINANCIAL ENTITIES.
``(a) In General.--Any applicable financial entity which discharges
(in whole or in part) the indebtedness of any person during any
calendar year shall make a return (at such time and in such form as the
Secretary may by regulations prescribe) setting forth--
``(1) the name, address, and TIN of each person whose
indebtedness was discharged during such calendar year,
``(2) the date of the discharge and the amount of the
indebtedness discharged, and
``(3) such other information as the Secretary may
prescribe.
``(b) Exception.--Subsection (a) shall not apply to any discharge
of less than $600.
``(c) Definitions and Special Rules.--For purposes of this
section--
``(1) Applicable financial entity.--The term `applicable
financial entity' means--
``(A) any financial institution described in
section 581 or 591(a) and any credit union,
``(B) the Federal Deposit Insurance Corporation,
the Resolution Trust Corporation, the National Credit
Union Administration, and any other Federal executive
agency (as defined in section 6050M), and any successor
or subunit of any of the foregoing, and
``(C) any other corporation which is a direct or
indirect subsidiary of an entity referred to in
subparagraph (A) but only if, by virtue of being
affiliated with such entity, such other corporation is
subject to supervision and examination by a Federal or
State agency which regulates entities referred to in
subparagraph (A).
``(2) Governmental units.--In the case of an entity
described in paragraph (1)(B), any return under this section
shall be made by the officer or employee appropriately
designated for the purpose of making such return.
``(d) Statements To Be Furnished to Persons With Respect to Whom
Information Is Required To Be Furnished.--Every applicable financial
entity required to make a return under subsection (a) shall furnish to
each person whose name is required to be set forth in such return a
written statement showing--
``(1) the name and address of the entity required to make
such return, and
``(2) the information required to be shown on the return
with respect to such person.
The written statement required under the preceding sentence shall be
furnished to the person on or before January 31 of the year following
the calendar year for which the return under subsection (a) was made.''
(b) Penalties.--
(1) Returns.--Subparagraph (B) of section 6724(d)(1) is
amended by redesignating clauses (viii) through (xv) as clauses
(ix) through (xvi), respectively, and by inserting after clause
(vii) the following new clause:
``(viii) section 6050P (relating to returns
relating to the cancellation of indebtedness by
certain financial entities),''.
(2) Statements.--Paragraph (2) of section 6724(d) is
amended by redesignating subparagraphs (P) through (S) as
subparagraphs (Q) through (T), respectively, and by inserting
after subparagraph (O) the following new subparagraph:
``(P) section 6050P(d) (relating to returns
relating to the cancellation of indebtedness by certain
financial entities),''.
(c) Clerical Amendment.--The table of sections for subpart B of
part III of subchapter A of chapter 61 is amended by adding at the end
thereof the following new item:
``Sec. 6050P. Returns relating to the
cancellation of indebtedness by
certain financial entities.''
(d) Effective Date.--The amendments made by this section shall
apply to discharges of indebtedness after the date of the enactment of
this Act.
PART VI--TREATMENT OF INTANGIBLES
SEC. 8261. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.
(a) General Rule.--Part VI of subchapter B of chapter 1 (relating
to itemized deductions for individuals and corporations) is amended by
adding at the end thereof the following new section:
``SEC. 197. AMORTIZATION OF GOODWILL AND CERTAIN OTHER INTANGIBLES.
``(a) General Rule.--A taxpayer shall be entitled to an
amortization deduction with respect to any amortizable section 197
intangible. The amount of such deduction shall be determined by
amortizing 75 percent of the adjusted basis (for purposes of
determining gain) of such intangible ratably over the 14-year period
beginning with the month in which such intangible was acquired.
``(b) No Other Depreciation or Amortization Deduction Allowable.--
Except as provided in subsection (a), no depreciation or amortization
deduction shall be allowable with respect to any amortizable section
197 intangible.
``(c) Amortizable Section 197 Intangible.--For purposes of this
section--
``(1) In general.--Except as otherwise provided in this
section, the term `amortizable section 197 intangible' means
any section 197 intangible--
``(A) which is acquired by the taxpayer after the
date of the enactment of this section, and
``(B) which is held in connection with the conduct
of a trade or business or an activity described in
section 212.
``(2) Exclusion of self-created intangibles, etc.--The term
`amortizable section 197 intangible' shall not include any
section 197 intangible--
``(A) which is not described in subparagraph (D),
(E), or (F) of subsection (d)(1), and
``(B) which is created by the taxpayer.
This paragraph shall not apply if the intangible is created in
connection with a transaction (or series of related
transactions) involving the acquisition of assets constituting
a trade or business or substantial portion thereof.
``(3) Anti-churning rules.--
``For exclusion of intangibles acquired
in certain transactions, see subsection (f)(9).
``(d) Section 197 Intangible.--For purposes of this section--
``(1) In general.--Except as otherwise provided in this
section, the term `section 197 intangible' means--
``(A) goodwill,
``(B) going concern value,
``(C) any of the following intangible items:
``(i) workforce in place including its
composition and terms and conditions
(contractual or otherwise) of its employment,
``(ii) business books and records,
operating systems, or any other information
base (including lists or other information with
respect to current or prospective customers),
``(iii) any patent, copyright, formula,
process, design, pattern, knowhow, format, or
other similar item,
``(iv) any customer-based intangible,
``(v) any supplier-based intangible, and
``(vi) any other similar item,
``(D) any license, permit, or other right granted
by a governmental unit or an agency or instrumentality
thereof,
``(E) any covenant not to compete (or other
arrangement to the extent such arrangement has
substantially the same effect as a covenant not to
compete) entered into in connection with an acquisition
(directly or indirectly) of an interest in a trade or
business or substantial portion thereof, and
``(F) any franchise, trademark, or trade name.
``(2) Customer-based intangible.--
``(A) In general.--The term `customer-based
intangible' means--
``(i) composition of market,
``(ii) market share, and
``(iii) any other value resulting from
future provision of goods or services pursuant
to relationships (contractual or otherwise) in
the ordinary course of business with customers.
``(B) Special rule for financial institutions.--In
the case of a financial institution, the term
`customer-based intangible' includes deposit base and
similar items.
``(3) Supplier-based intangible.--The term `supplier-based
intangible' means any value resulting from future acquisitions
of goods or services pursuant to relationships (contractual or
otherwise) in the ordinary course of business with suppliers of
goods or services to be used or sold by the taxpayer.
``(e) Exceptions.--For purposes of this section, the term `section
197 intangible' shall not include any of the following:
``(1) Financial interests.--Any interest--
``(A) in a corporation, partnership, trust, or
estate, or
``(B) under an existing futures contract, foreign
currency contract, notional principal contract, or
other similar financial contract.
``(2) Land.--Any interest in land.
``(3) Computer software.--
``(A) In general.--Any--
``(i) computer software which is readily
available for purchase by the general public,
is subject to a nonexclusive license, and has
not been substantially modified, and
``(ii) other computer software which is not
acquired in a transaction (or series of related
transactions) involving the acquisition of
assets constituting a trade or business or
substantial portion thereof.
``(B) Computer software defined.--For purposes of
subparagraph (A), the term `computer software' means
any program designed to cause a computer to perform a
desired function. Such term shall not include any data
base or similar item unless the data base or item is in
the public domain and is incidental to the operation of
otherwise qualifying computer software.
``(4) Certain interests or rights acquired separately.--Any
of the following not acquired in a transaction (or series of
related transactions) involving the acquisition of assets
constituting a trade business or substantial portion thereof:
``(A) Any interest in a film, sound recording,
video tape, book, or similar property.
``(B) Any right to receive tangible property or
services under a contract or granted by a governmental
unit or agency or instrumentality thereof.
``(C) Any interest in a patent or copyright.
``(D) To the extent provided in regulations, any
right under a contract (or granted by a governmental
unit or an agency or instrumentality thereof) if such
right--
``(i) has a fixed duration of less than 14
years, or
``(ii) is fixed as to amount and, without
regard to this section, would be recoverable
under a method similar to the unit-of-
production method.
``(5) Interests under leases and debt instruments.--Any
interest under--
``(A) an existing lease of tangible property, or
``(B) except as provided in subsection (d)(2)(B),
any existing indebtedness.
``(6) Treatment of sports franchises.--A franchise to
engage in professional football, basketball, baseball, or other
professional sport, and any item acquired in connection with
such a franchise.
``(7) Mortgage servicing.--Any right to service
indebtedness which is secured by residential real property
unless such right is acquired in a transaction (or series of
related transactions) involving the acquisition of assets
(other than rights described in this paragraph) constituting a
trade or business or substantial portion thereof.
``(8) Certain transaction costs.--Any fees for professional
services, and any transaction costs, incurred by parties to a
transaction with respect to which any portion of the gain or
loss is not recognized under part III of subchapter C.
``(f) Special Rules.--
``(1) Treatment of certain dispositions, etc.--If there is
a disposition of any amortizable section 197 intangible
acquired in a transaction or series of related transactions (or
any such intangible becomes worthless) and one or more other
amortizable section 197 intangibles acquired in such
transaction or series of related transactions are retained--
``(A) no loss shall be recognized by reason of such
disposition (or such worthlessness), and
``(B) appropriate adjustments to the adjusted bases
of such retained intangibles shall be made for any loss
not recognized under subparagraph (A).
All persons treated as a single taxpayer under section 41(f)(1)
shall be so treated for purposes of the preceding sentence.
``(2) Treatment of certain transfers.--
``(A) In general.--In the case of any section 197
intangible transferred in a transaction described in
subparagraph (B), the transferee shall be treated as
the transferor for purposes of applying this section
with respect to so much of the adjusted basis in the
hands of the transferee as does not exceed the adjusted
basis in the hands of the transferor.
``(B) Transactions covered.--The transactions
described in this subparagraph are--
``(i) any transaction described in section
332, 351, 361, 721, 731, 1031, or 1033, and
``(ii) any transaction between members of
the same affiliated group during any taxable
year for which a consolidated return is made by
such group.
``(3) Treatment of amounts paid pursuant to covenants not
to compete, etc.--Any amount paid or incurred pursuant to a
covenant or arrangement referred to in subsection (d)(1)(E)
shall be treated as an amount chargeable to capital account.
``(4) Treatment of franchises, etc.--
``(A) Franchise.--The term `franchise' has the
meaning given to such term by section 1253(b)(1).
``(B) Treatment of renewals.--Any renewal of a
franchise, trademark, or trade name (or of a license, a
permit, or other right referred to in subsection
(d)(1)(D)) shall be treated as an acquisition. The
preceding sentence shall only apply with respect to
costs incurred in connection with such renewal.
``(C) Certain amounts not taken into account.--Any
amount to which section 1253(d)(1) applies shall not be
taken into account under this section.
``(5) Treatment of certain reinsurance transactions.--In
the case of any amortizable section 197 intangible resulting
from an assumption reinsurance transaction, the amount taken
into account as the adjusted basis of such intangible under
this section shall be the excess of--
``(A) the amount paid or incurred by the acquirer
under the assumption reinsurance transaction, over
``(B) the amount required to be capitalized under
section 848 in connection with such transaction.
Subsection (b) shall not apply to any amount required to be
capitalized under section 848.
``(6) Treatment of certain subleases.--For purposes of this
section, a sublease shall be treated in the same manner as a
lease of the underlying property involved.
``(7) Treatment as depreciable.--For purposes of this
chapter, any amortizable section 197 intangible shall be
treated as property which is of a character subject to the
allowance for depreciation provided in section 167.
``(8) Treatment of certain increments in value.--This
section shall not apply to any increment in value if, without
regard to this section, such increment is properly taken into
account in determining the cost of property which is not a
section 197 intangible.
``(9) Anti-churning rules.--For purposes of this section--
``(A) In general.--The term `amortizable section
197 intangible' shall not include any section 197
intangible which is described in subparagraph (A) or
(B) of subsection (d)(1) (or for which depreciation or
amortization would not have been allowable but for this
section) and which is acquired by the taxpayer after
the date of the enactment of this section, if--
``(i) the intangible was held or used at
any time on or after July 25, 1991, and on or
before such date of enactment by the taxpayer
or a related person,
``(ii) the intangible was acquired from a
person who held such intangible at any time on
or after July 25, 1991, and on or before such
date of enactment, and, as part of the
transaction, the user of such intangible does
not change, or
``(iii) the taxpayer grants the right to
use such intangible to a person (or a person
related to such person) who held or used such
intangible at any time on or after July 25,
1991, and on or before such date of enactment.
For purposes of this subparagraph, the determination of
whether the user of property changes as part of a
transaction shall be determined in accordance with
regulations prescribed by the Secretary. For purposes
of this subparagraph, deductions allowable under
section 1253(d) shall be treated as deductions
allowable for amortization.
``(B) Exception where gain recognized.--If--
``(i) subparagraph (A) would not apply to
an intangible acquired by the taxpayer but for
the last sentence of subparagraph (C)(i), and
``(ii) the person from whom the taxpayer
acquired the intangible elects, notwithstanding
any other provision of this title--
``(I) to recognize gain on the
disposition of the intangible, and
``(II) to pay a tax on such gain
which, when added to any other income
tax on such gain under this title,
equals such gain multiplied by the
highest rate of income tax applicable
to such person under this title,
then subparagraph (A) shall apply to the
intangible only to the extent that the
taxpayer's adjusted basis in the intangible
exceeds the gain recognized under clause
(ii)(I).
``(C) Related person defined.--For purposes of this
paragraph--
``(i) Related person.--A person
(hereinafter in this paragraph referred to as
the `related person') is related to any person
if--
``(I) the related person bears a
relationship to such person specified
in section 267(b) or section 707(b)(1),
or
``(II) the related person and such
person are engaged in trades or
businesses under common control (within
the meaning of subparagraphs (A) and
(B) of section 41(f)(1)).
For purposes of subclause (I), in applying
section 267(b) or 707(b)(1), `20 percent' shall
be substituted for `50 percent'.
``(ii) Time for making determination.--A
person shall be treated as related to another
person if such relationship exists immediately
before or immediately after the acquisition of
the intangible involved.
``(D) Acquisitions by reason of death.--
Subparagraph (A) shall not apply to the acquisition of
any property by the taxpayer if the basis of the
property in the hands of the taxpayer is determined
under section 1014(a).
``(E) Special rule for partnerships.--With respect
to any increase in the basis of partnership property
under section 732, 734, or 743, determinations under
this paragraph shall be made at the partner level and
each partner shall be treated as having owned and used
such partner's proportionate share of the partnership
assets.
``(F) Anti-abuse rules.--The term `amortizable
section 197 intangible' does not include any section
197 intangible acquired in a transaction, one of the
principal purposes of which is to avoid the requirement
of subsection (c)(1) that the intangible be acquired
after the date of the enactment of this section or to
avoid the provisions of subparagraph (A).
``(g) Special Rules for Acquisition of Certain Computer Software
Businesses.--
``(1) In general.--In the case of any section 197
intangible acquired in a transaction to which this subsection
applies, subsection (a) shall be applied with respect to one-
half of the 75 percent of its adjusted basis which is
amortizable under subsection (a) by substituting `5-year
period' for `14-year period'.
``(2) Transactions to which subsection applies.--
``(A) In general.--This subsection shall apply to a
transaction (or series of related transactions)
involving the acquisition of assets constituting a
trade or business or substantial portion thereof if--
``(i) the principal business activity of
the trade or business (or portion) is computer
software development, computer sales,
licensing, or leasing, the provision of
computer software services, or a combination
thereof, and
``(ii) during the testing period, the
aggregate computer software development costs
of such trade or business (or portion) are not
less than 17 percent of the greater of--
``(I) the aggregate gross receipts
of such trade or business (or portion),
or
``(II) the aggregate gross
expenditures of such trade or business
(or portion).
``(B) Computer software development costs.--For
purposes of subparagraph (A), the term `computer
software development costs' means the sum of--
``(i) the computer software development
costs which qualify as research and
experimentation expenditures under section 174,
plus
``(ii) the amortization deductions of the
trade or business with respect to computer
software not acquired in a transaction (or
series of related transactions) involving the
acquisition of assets constituting a trade or
business or substantial portion thereof.
``(C) Testing period.--For purposes of subparagraph
(A), the term `testing period' means the 5-year period
ending on the date of the last transaction described in
subparagraph (A) pursuant to which the section 197
intangible was acquired (or, if shorter, the entire
period of existence of the trade or business (or
portion) before such date).
``(h) Regulations.--The Secretary shall prescribe such regulations
as may be appropriate to carry out the purposes of this section,
including such regulations as may be appropriate to prevent avoidance
of the purposes of this section through related persons or otherwise.''
(b) Modifications to Depreciation Rules.--
(1) Treatment of certain property excluded from section
197.--Section 167 (relating to depreciation deduction) is
amended by redesignating subsection (f) as subsection (g) and
by inserting after subsection (e) the following new subsection:
``(f) Treatment of Certain Property Excluded From Section 197.--
``(1) Computer software.--
``(A) In general.--If a depreciation deduction is
allowable under subsection (a) with respect to any
computer software, such deduction shall be computed by
using the straight line method and a useful life of 36
months.
``(B) Computer software.--For purposes of this
section, the term `computer software' has the meaning
given to such term by section 197(e)(3)(B); except that
such term shall not include any such software which is
an amortizable section 197 intangible.
``(2) Certain interests or rights acquired separately.--If
a depreciation deduction is allowable under subsection (a) with
respect to any property described in subparagraph (B), (C), or
(D) of section 197(e)(4), such deduction shall be computed in
accordance with regulations prescribed by the Secretary.
``(3) Mortgage servicing rights.--If a depreciation
deduction is allowable under subsection (a) with respect to any
right described in section 197(e)(7), such deduction shall be
computed by using the straight line method and a useful life of
108 months.''
(2) Allocation of basis in case of leased property.--
Subsection (c) of section 167 is amended to read as follows:
``(c) Basis for Depreciation.--
``(1) In general.--The basis on which exhaustion, wear and
tear, and obsolescence are to be allowed in respect of any
property shall be the adjusted basis provided in section 1011,
for the purpose of determining the gain on the sale or other
disposition of such property.
``(2) Special rule for property subject to lease.--If any
property is acquired subject to a lease--
``(A) no portion of the adjusted basis shall be
allocated to the leasehold interest, and
``(B) the entire adjusted basis shall be taken into
account in determining the depreciation deduction (if
any) with respect to the property subject to the
lease.''
(c) Amendments to Section 1253.--Subsection (d) of section 1253 is
amended by striking paragraphs (2), (3), (4), and (5) and inserting the
following:
``(2) Other payments.--Any amount paid or incurred on
account of a transfer, sale, or other disposition of a
franchise, trademark, or trade name to which paragraph (1) does
not apply shall be treated as an amount chargeable to capital
account.
``(3) Renewals, etc.--For purposes of determining the term
of a transfer agreement under this section, there shall be
taken into account all renewal options (and any other period
for which the parties reasonably expect the agreement to be
renewed).''
(d) Amendment to Section 848.--Subsection (g) of section 848 is
amended by striking ``this section'' and inserting ``this section or
section 197''.
(e) Amendments to Section 1060.--
(1) Paragraph (1) of section 1060(b) is amended by striking
``goodwill or going concern value'' and inserting ``section 197
intangibles''.
(2) Paragraph (1) of section 1060(d) is amended by striking
``goodwill or going concern value (or similar items)'' and
inserting ``section 197 intangibles''.
(f) Technical and Conforming Amendments.--
(1) Subsection (g) of section 167 (as redesignated by
subsection (b)) is amended to read as follows:
``(g) Cross References.--
``(1) For additional rule applicable to
depreciation of improvements in the case of mines, oil and gas wells,
other natural deposits, and timber, see section 611.
``(2) For amortization of goodwill and
certain other intangibles, see section 197.''
(2) Subsection (f) of section 642 is amended by striking
``section 169'' and inserting ``sections 169 and 197''.
(3) Subsection (a) of section 1016 is amended by striking
paragraph (19) and by redesignating the following paragraphs
accordingly.
(4) Subparagraph (C) of section 1245(a)(2) is amended by
striking ``193, or 1253(d) (2) or (3)'' and inserting ``or
193''.
(5) Paragraph (3) of section 1245(a) is amended by striking
``section 185 or 1253(d) (2) or (3)''.
(6) The table of sections for part VI of subchapter B of
chapter 1 is amended by adding at the end thereof the following
new item:
``Sec. 197. Amortization of goodwill and
certain other intangibles.''.
(g) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
with respect to property acquired after the date of the
enactment of this Act.
(2) Election to have amendments apply to property acquired
after july 25, 1991.--
(A) In general.--If an election under this
paragraph applies to the taxpayer--
(i) the amendments made by this section
shall apply to property acquired by the
taxpayer after July 25, 1991,
(ii) subsection (c)(1)(A) of section 197 of
the Internal Revenue Code of 1986 (as added by
this section) (and so much of subsection
(f)(9)(A) of such section 197 as precedes
clause (i) thereof) shall be applied with
respect to the taxpayer by treating July 25,
1991, as the date of the enactment of such
section, and
(iii) in applying subsection (f)(9) of such
section, with respect to any property acquired
by the taxpayer on or before the date of the
enactment of this Act, only holding or use on
July 25, 1991, shall be taken into account.
(B) Election.--An election under this paragraph
shall be made at such time and in such manner as the
Secretary of the Treasury or his delegate may
prescribe. Such an election by any taxpayer, once
made--
(i) may be revoked only with the consent of
the Secretary, and
(ii) shall apply to the taxpayer making
such election and any other taxpayer under
common control with the taxpayer (within the
meaning of subparagraphs (A) and (B) of section
41(f)(1) of such Code) at any time after
November 22, 1991, and on or before the date on
which such election is made.
(3) Elective binding contract exception.--
(A) In general.--The amendments made by this
section shall not apply to any acquisition of property
by the taxpayer if--
(i) such acquisition is pursuant to a
written binding contract in effect on the date
of the enactment of this Act and at all times
thereafter before such acquisition,
(ii) an election under paragraph (2) does
not apply to the taxpayer, and
(iii) the taxpayer makes an election under
this paragraph with respect to such contract.
(B) Election.--An election under this paragraph
shall be made at such time and in such manner as the
Secretary of the Treasury or his delegate shall
prescribe. Such an election, once made--
(i) may be revoked only with the consent of
the Secretary, and
(ii) shall apply to all property acquired
pursuant to the contract with respect to which
such election was made.
SEC. 8262. TREATMENT OF CERTAIN PAYMENTS TO RETIRED OR DECEASED
PARTNER.
(a) Section 736(b) Not To Apply in Certain Cases.--Subsection (b)
of section 736 (relating to payments for interest in partnership) is
amended by adding at the end thereof the following new paragraph:
``(3) Limitation on application of paragraph (2).--
Paragraph (2) shall apply only if--
``(A) capital is not a material income-producing
factor for the partnership, and
``(B) the retiring or deceased partner was a
general partner in the partnership.''
(b) Limitation on Definition of Unrealized Receivables.--
(1) In general.--Subsection (c) of section 751 (defining
unrealized receivables) is amended--
(A) by striking ``sections 731, 736, and 741'' each
place they appear and inserting ``, sections 731 and
741 (but not for purposes of section 736)'', and
(B) by striking ``section 731, 736, or 741'' each
place it appears and inserting ``section 731 or 741''.
(2) Technical amendments.--
(A) Subsection (e) of section 751 is amended by
striking ``sections 731, 736, and 741'' and inserting
``sections 731 and 741''.
(B) Section 736 is amended by striking subsection
(c).
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
apply in the case of partners retiring or dying on or after
January 5, 1993.
(2) Binding contract exception.--The amendments made by
this section shall not apply to any partner retiring on or
after January 5, 1993, if a written contract to purchase such
partner's interest in the partnership was binding on January 4,
1993, and at all times thereafter before such purchase.
PART VII--MISCELLANEOUS PROVISIONS
SEC. 8271. DENIAL OF DEDUCTION RELATING TO TRAVEL EXPENSES.
(a) In General.--Section 274(m) (relating to additional limitations
on travel expenses) is amended by adding at the end thereof the
following new paragraph:
``(3) Travel expenses of spouse, dependent, or others.--No
deduction shall be allowed under this chapter (other than
section 217) for travel expenses paid or incurred with respect
to a spouse, dependent, or other individual accompanying the
taxpayer (or an officer or employee of the taxpayer) on
business travel, unless--
``(A) the spouse, dependent, or other individual is
an employee of the taxpayer,
``(B) the travel of the spouse, dependent, or other
individual is for a bona fide business purpose, and
``(C) such expenses would otherwise be deductible
by the spouse, dependent, or other individual.''
(b) Effective Date.--The amendment made by this section shall apply
to amounts paid or incurred after December 31, 1993.
SEC. 8272. INCREASE IN WITHHOLDING FROM SUPPLEMENTAL WAGE PAYMENTS.
If an employer elects under Treasury Regulation 31.3402(g)-1 to
determine the amount to be deducted and withheld from any supplemental
wage payment by using a flat percentage rate, the rate to be used in
determining the amount to be so deducted and withheld shall not be less
than 28 percent. The preceding sentence shall apply to payments made
after December 31, 1993.
SEC. 8273. EXCISE TAX ON CERTAIN VACCINES MADE PERMANENT.
(a) Tax.--Subsection (c) of section 4131 (relating to tax on
certain vaccines) is amended to read as follows:
``(c) Application of Section.--The tax imposed by this section
shall apply--
``(1) after December 31, 1987, and before January 1, 1993,
and
``(2) during periods after the date of the enactment of the
Omnibus Budget Reconciliation Act of 1993.''
(b) Trust Fund.--Paragraph (1) of section 9510(c) (relating to
expenditures from Vaccine Injury Compensation Trust Fund) is amended by
striking ``and before October 1, 1992,''.
(c) Floor Stocks Tax.--
(1) Imposition of tax.--On any taxable vaccine--
(A) which was sold by the manufacturer, producer,
or importer before the date of the enactment of this
Act,
(B) on which no tax was imposed by section 4131 of
the Internal Revenue Code of 1986 (or, if such tax was
imposed, was credited or refunded), and
(C) which is held on such date by any person for
sale or use,
there is hereby imposed a tax in the amount determined under
section 4131(b) of such Code.
(2) Liability for tax and method of payment.--
(A) Liability for tax.--The person holding any
taxable vaccine to which the tax imposed by paragraph
(1) applies shall be liable for such tax.
(B) Method of payment.--The tax imposed by
paragraph (1) shall be paid in such manner as the
Secretary shall prescribe by regulations.
(C) Time for payment.--The tax imposed by paragraph
(1) shall be paid on or before the last day of the 6th
month beginning after the date of the enactment of this
Act.
(3) Definitions.--For purposes of this subsection, terms
used in this subsection which are also used in section 4131 of
such Code shall have the respective meanings such terms have in
such section.
(4) Other laws applicable.--All provisions of law,
including penalties, applicable with respect to the taxes
imposed by section 4131 of such Code shall, insofar as
applicable and not inconsistent with the provisions of this
subsection, apply to the floor stocks taxes imposed by
paragraph (1), to the same extent as if such taxes were imposed
by such section 4131.
TITLE IX--COMMITTEE ON FOREIGN RELATIONS
SEC. 9001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FOREIGN SERVICE
RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND
1996.
(a) Applicability.--This section shall apply with respect to any
cost-of-living increase scheduled to take effect under section 826 or
858 of the Foreign Service Act of 1980 during fiscal year 1994, 1995,
or 1996.
(b) Delay in Effective Date of Adjustments.--A cost-of-living
increase described in subsection (a) shall not take effect until the
first day of the third calendar month after the date such increase
would take effect but for this subsection.
(c) Rule of Construction.--
(1) Size of cost-of-living adjustment.--Nothing in this
section shall be considered to affect the size of the cost-of-
living adjustment under section 8340(b) or section 8462(b) of
title 5, United States Code, in the same fiscal year as a cost-
of-living increase described in subsection (a).
(2) Determinations of eligibility.--The delay in the
effective date of cost-of-living adjustments under subsection
(b) shall not affect any determination relating to eligibility
for an annuity increase or the amount of the first increase in
an annuity under section 826 or 858 of the Foreign Service Act
of 1980.
SEC. 9002. ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY OPTION UNDER
THE FOREIGN SERVICE RETIREMENT AND DISABILITY SYSTEM
EXCEPT FOR INDIVIDUALS WITH CRITICAL MEDICAL CONDITIONS.
(a) In General.--Section 807(e)(1) of the Foreign Service Act of
1980 (22 U.S.C. 4047(e)(1)) is amended by striking ``a participant
may,'' and inserting ``any participant who has a life-threatening
affliction or other critical medical condition may,''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect January 1, 1994.
TITLE X--COMMITTEE ON GOVERNMENTAL AFFAIRS
Subtitle A--Civil Service
SEC. 10001. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FEDERAL EMPLOYEE
RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND
1996.
(a) Applicability.--This section shall apply with respect to any
cost-of-living increase scheduled to take effect, during fiscal year
1994, 1995, or 1996, under--
(1) section 8340(b) or 8462(b) of title 5, United States
Code; or
(2) section 291 of the Central Intelligence Agency
Retirement Act (50 U.S.C. 2131), as set forth in section 802 of
the CIARDS Technical Corrections Act of 1992 (Public Law 102-
496; 106 Stat. 3196).
(b) Delay in Effective Date of Adjustments.--A cost-of-living
increase described in subsection (a) shall not take effect until the
first day of the third calendar month after the date such increase
would otherwise take effect.
(c) Rule of Construction.--Nothing in this section shall be
considered to affect any determination relating to eligibility for an
annuity increase or the amount of the first increase in an annuity
under section 8340(b) or (c) or section 8462 (b) or (c) of title 5,
United States Code, or comparable provisions of law.
SEC. 10002. PERMANENT ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY
OPTION EXCEPT FOR INDIVIDUALS WITH A CRITICAL MEDICAL
CONDITION.
(a) Civil Service Retirement System; Federal Employees' Retirement
System.--Sections 8343a and 8420a of title 5, United States Code, are
each amended--
(1) in subsection (a) by striking ``an employee or Member
may,'' and inserting ``any employee or Member who has a life-
threatening affliction or other critical medical condition
may,''; and
(2) by striking subsection (f).
(b) Central Intelligence Agency Retirement and Disability System.--
Section 294(a) of the Central Intelligence Agency Retirement Act (50
U.S.C. 2143(a)), as set forth in section 802 of the CIARDS Technical
Corrections Act of 1992 (Public Law 102-496; 106 Stat. 3196), is
amended by striking ``a participant may,'' and inserting ``any
participant who has a life-threatening affliction or other critical
medical condition may,''.
(c) Effective Date.--The amendments made by this section shall
become effective on October 1, 1995, and shall apply with respect to
any annuity commencing on or after that date.
SEC. 10003. DISTRICT OF COLUMBIA GOVERNMENT CONTRIBUTIONS FOR CERTAIN
EMPLOYEE AND ANNUITANT HEALTH BENEFITS.
(a) Contributions After 1993.--
(1) In general.--Section 8906(g) of title 5, United States
Code, is amended by adding at the end thereof the following new
paragraph:
``(3) The Government contributions authorized by this
section for health benefits for an annuitant shall be paid by
the government of the District of Columbia, in the case of an
annuitant whose eligibility for an annuity is based on a
separation from service with such government, or who is a
survivor of such an annuitant or a survivor of an employee who
died while employed by such government.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on October 1, 1993, and shall apply with
respect to amounts payable for periods beginning on or after
that date.
(b) Contributions for Period Between 1975 and 1993.--
(1) In general.--The government of the District of Columbia
shall pay into the Employees Health Benefit Fund, as payment
for any amounts which would, for the period beginning on
January 1, 1975 through September 30, 1993, have been payable
under the provisions of section 8906(g)(3) of title 5, United
States Code (as added by subsection (a)(1) of this section) if
such provision had been in effect as of January 1, 1975, of
which--
(A) at least 25 percent of the total of such
amounts shall be paid no later than January 1, 1994;
(B) at least 25 percent of the total of such
amounts shall be paid no later than January 1, 1995;
(C) at least 25 percent of the total of such
amounts shall be paid no later than January 1, 1996;
and
(D) any remaining balance shall be paid no later
than January 1, 1997.
(2) Prorated payments.--In determining any amount for which
the government of the District of Columbia is liable under
paragraph (1), the amount of the liability shall be prorated to
reflect only that portion of total service which is
attributable to civilian service performed (by the former
employee of the government of the District of Columbia or by
the deceased individual referred to under section 8906 (g)(3)
of title 5, United States Code, as the case may be) during the
period beginning on January 1, 1975, through September 30,
1993, as estimated by the Office of Personnel Management.
Subtitle B--Postal Service
SEC. 10101. PAYMENTS TO BE MADE BY THE UNITED STATES POSTAL SERVICE.
(a) Relating to Corrected Calculations for Past Retirement COLAs.--
In addition to any other payments required under section 8348(m) of
title 5, United States Code, or any other provision of law, the United
States Postal Service shall pay into the Civil Service Retirement and
Disability Fund a total of $693,000,000, of which--
(1) at least one-third shall be paid not later than
September 30, 1996;
(2) at least two-thirds shall be paid not later than
September 30, 1997; and
(3) any remaining balance shall be paid not later than
September 30, 1998.
(b) Relating to Corrected Calculations for Past Health Benefits.--
In addition to any other payments required under section 8906(g)(2) of
title 5, United States Code, or any other provision of law, the United
States Postal Service shall pay into the Employees Health Benefits Fund
a total of $348,000,000, of which--
(1) at least one-third shall be paid not later than
September 30, 1996;
(2) at least two-thirds shall be paid not later than
September 30, 1997; and
(3) any remaining balance shall be paid not later than
September 30, 1998.
Subtitle C--Miscellaneous
SEC. 10201. FEDERAL EMPLOYEES' SURVIVOR ANNUITY IMPROVEMENTS.
(a) Civil Service Retirement System.--
(1) Reduction for spousal annuity.--Section 8339(j) of
title 5, United States Code, is amended--
(A) in paragraph (3)--
(i) in the second sentence, by striking out
``, within such 2-year period,''; and
(ii) by striking out the fourth sentence
and inserting in lieu thereof the following:
``The Office shall, by regulation, provide for
payment of the deposit required under this
paragraph by a reduction in the annuity of the
employee or Member. The reduction shall, to the
extent practicable, be designed so that the
present value of the future reduction is
actuarially equivalent to the deposit required
under this paragraph, except that the total
reductions in the annuity of an employee or
Member to pay deposits required by the
provisions of this paragraph, paragraph (5), or
subsection (k)(2) shall not exceed 25 percent
of the annuity computed under subsections (a)
through (i), (n), and (q), including
adjustments under section 8340. The reduction,
which shall be effective on the same date as
the election under this paragraph, shall be
permanent and unaffected by any future
termination of the entitlement of the former
spouse. Such reduction shall be independent of
and in addition to the reduction required under
the first sentence of this paragraph.''; and
(B) in paragraph (5)(C)--
(i) in clause (ii), by striking out ``,
within 2 years after the date of the remarriage
or, if later, the death or remarriage of the
former spouse (or of the last such surviving
former spouse),''; and
(ii) by amending clause (iii) to read as
follows:
``(iii) The Office shall, by regulation, provide
for payment of the deposit required under clause (ii)
by a reduction in the annuity of the employee or
Member. The reduction shall, to the extent practicable,
be designed so that the present value of the future
reduction is actuarially equivalent to the deposit
required under clause (ii), except that total
reductions in the annuity of an employee or Member to
pay deposits required by the provisions of this
paragraph or paragraph (3) shall not exceed 25 percent
of the annuity computed under subsections (a) through
(i), (n), and (q), including adjustments under section
8340. The reduction required by this clause, which
shall be effective on the same date as the election
under clause (i), shall be permanent and unaffected by
any future termination of the marriage. Such reduction
shall be independent of and in addition to the
reduction required under clause (i).''.
(2) Reduction relating to former spouse.--Section
8339(k)(2) of title 5, United States Code, is amended--
(A) in subparagraph (B)(ii), by striking out
``Within 2 years after the date of the marriage, the''
and inserting in lieu thereof ``The''; and
(B) by amending subparagraph (C) to read as
follows:
``(C) The Office shall, by regulation, provide for payment
of the deposit required under subparagraph (B)(ii) by a
reduction in the annuity of the employee or Member. The
reduction shall, to the extent practicable, be designed so that
the present value of the future reduction is actuarially
equivalent to the deposit required under subparagraph (B)(ii),
except that total reductions in the annuity of an employee or
Member to pay deposits required by this subsection or
subsection (j)(3) shall not exceed 25 percent of the annuity
computed under subsections (a) through (i), (n), and (q),
including adjustments under section 8340. The reduction
required by this subparagraph, which shall be effective on the
same date as the election under subparagraph (A), shall be
permanent and unaffected by any future termination of the
marriage. Such reduction shall be independent of and in
addition to the reduction required under subparagraph (A).''.
(3) Deposits.--Section 8334(h) of title 5, United States
Code, is amended by striking out ``and by section 8339(j)(5)(C)
and the last sentence of section 8339(k)(2) of this title''.
(b) Federal Employees Retirement System.--Section 8418 of title 5,
United States Code, is amended--
(1) in subsection (a)(1), by striking out ``, before the
expiration of the 2-year period involved,''; and
(2) by amending subsection (b) to read as follows:
``(b) The Office shall, by regulation, provide for payment of the
deposit required under subsection (a) by a reduction in the annuity of
the employee or Member. The reduction shall, to the extent practicable,
be designed so that the present value of the future reduction is
actuarially equivalent to the deposit required under subsection (a),
except that the total reductions in the annuity of an employee or
Member to pay deposits required by this section shall not exceed 25
percent of the annuity computed under section 8415 or section 8452,
including adjustments under section 8462. The reduction required by
this subsection, which shall be effective at the same time as the
election under section 8416 (b) and (c) or section 8417(b), shall be
permanent and unaffected by any future termination of the marriage or
the entitlement of the former spouse. Such reduction shall be
independent of and in addition to the reduction required under section
8416 (b) and (c) or section 8417(b).''.
(c) Effective Date.--
(1) In general.--The amendments made by this section shall
take effect on the first day of the first month beginning 30
days after the date of the enactment of this Act and shall
apply to all deposits required under section 8339(j) (3) and
(5), 8339(k)(2), or 8418 of title 5, United States Code, on
which no payment has been made prior to such effective date.
(2) Partial deposit.--For any deposit required under
section 8339(j) (3) and (5), 8339(k)(2), or 8418 of title 5,
United States Code, or section 4 (b) and (c) of the Civil
Service Retirement Spouse Equity Act of 1984 that has been
partially, but not fully, paid before the effective date of
this Act, the Office shall by regulation provide for
determining the remaining portion of the deposit and for
payment of the remaining portion of the deposit by a
prospective reduction in the annuity of the employee or Member.
The reduction shall be similar to the reductions provided
pursuant to the amendments made under this section.
TITLE XI--JUDICIARY
SEC. 11001. PATENT AND TRADEMARK FEES.
Section 10101 of the Omnibus Budget Reconciliation Act of 1990 (35
U.S.C. 41 note) is amended--
(1) in subsection (a) by striking ``1995'' and inserting
``1998'';
(2) in subsection (b)(2) by striking ``1995'' and inserting
``1998''; and
(3) in subsection (c)--
(A) by striking ``through 1995'' and inserting
``through 1998''; and
(B) by adding at the end the following:
``(6) $111,000,000 in fiscal year 1996.
``(7) $115,000,000 in fiscal year 1997.
``(8) $119,000,000 in fiscal year 1998.''.
TITLE XII--COMMITTEE ON LABOR AND HUMAN RESOURCES
Subtitle A--Student Loan Provisions
SEC. 12001. SHORT TITLE; REFERENCES.
(a) Short Title.--This subtitle may be cited as the ``Student Loan
Reform Act of 1993''.
(b) References.--References in this subtitle to ``the Act'' are
references to the Higher Education Act of 1965 (20 U.S.C. 1001 et
seq.).
CHAPTER 1--FEDERAL DIRECT STUDENT LOAN PROGRAM
SEC. 12011. FEDERAL DIRECT STUDENT LOAN PROGRAM.
Part D of title IV (20 U.S.C. 1087a) is amended to read as follows:
``PART D--FEDERAL DIRECT STUDENT LOAN PROGRAM
``SEC. 451. PURPOSE; PROGRAM AUTHORIZATION.
``(a) Purpose.--It is the purpose of this part--
``(1) to simplify the delivery of student loans to
borrowers and eliminate borrower confusion;
``(2) to provide a variety of repayment plans, including
income contingent repayment, to borrowers so that borrowers
have flexibility in managing their student loan repayment
obligations, and so that those obligations do not foreclose
careers in community or public service for those borrowers;
``(3) to replace, through an orderly transition, the
Federal Family Education Loan Program under part B of this
title with the Federal Direct Student Loan Program under this
part;
``(4) to avoid the unnecessary cost, to taxpayers and
borrowers, and administrative complexity associated with the
Federal Family Education Loan Program under part B of this
title through the use of a direct student loan program; and
``(5) to create a more streamlined student loan program
that can be managed more effectively at the Federal level.
``(b) Program Authority.--There are hereby made available, in
accordance with the provisions of this part, such sums as may be
necessary to make loans to all eligible students in attendance at
participating institutions of higher education selected by the
Secretary (and the eligible parents of such students), to enable such
students to pursue their courses of study at such institutions during
the period beginning July 1, 1994. Such loans shall be made by
participating institutions, or consortia thereof, that have agreements
with the Secretary to originate loans, or by alternative originators
designated by the Secretary to make loans for students in attendance at
participating institutions (and their parents).
``SEC. 452. FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.
``(a) In General.--The Secretary shall provide funds for student
and parent loans under this part--
``(1) directly to an institution of higher education that
has an agreement with the Secretary under section 454(a) to
participate in the direct student loan program under this part
and that also has an agreement with the Secretary under section
454(b) to originate loans under this part; or
``(2) through an alternative originator designated by the
Secretary, on the basis of the need and the eligibility of
students at each participating institution, and parents of such
students, for such loans.
``(b) Fees for Origination Services.--
``(1) Fees for institutions.--The Secretary shall pay fees
to institutions of higher education or consortia thereof having
agreements under section 454(b), in an amount established by
the Secretary, to assist in meeting the costs of loan
origination. Such fees--
``(A) shall be paid by the Secretary based on all
the loans made under this part to a particular borrower
in the same academic year;
``(B) shall be subject to a sliding scale that
decreases the amount of such fees as the number of
borrowers increases; and
``(C)(i) for academic year 1994-1995, shall not
exceed a program-wide average of $10 per borrower for
all the loans made under this part to such borrower in
the same academic year; and
``(ii) for succeeding academic years, the Secretary
shall establish such average fee pursuant to
regulations.
``(2) Fees for alternative originators.--The Secretary
shall pay fees for loan origination services to alternative
originators of loans made under this part in an amount
established by the Secretary in accordance with the terms of
the contract described in section 456(b) between the Secretary
and each such alternative originator.
``(c) No Entitlement To Participate or Originate.--No institution
of higher education shall have a right to participate in the program
authorized by this part, originate loans, or perform any program
function under this part. Nothing in this subsection shall be construed
so as to limit the entitlement of an eligible student attending a
participating institution (or the eligible parent of such student) to
borrow under this part nor limit the borrower's contractual right
against the United States to receive any loan for which the student (or
parent) is eligible.
``(d) Delivery of Loan Funds.--Loan funds shall be paid and
delivered to an institution by the Secretary prior to the beginning of
the payment period established by the Secretary in a manner that is
consistent with payment and delivery of basic grants under subpart 1 of
part A.
``SEC. 453. SELECTION OF INSTITUTIONS FOR PARTICIPATION AND
ORIGINATION.
``(a) Phase-In of Program.--
``(1) General authority.--The Secretary shall enter into
agreements pursuant to section 454(a) with institutions of
higher education to participate in the direct student loan
program under this part, and agreements pursuant to section
454(b) with institutions of higher education, or consortia
thereof, to originate loans in such program, for academic years
beginning on or after July 1, 1994. Alternative origination
services, through which an entity other than the participating
institution at which the student is in attendance originates
the loan, shall be provided by the Secretary, through 1 or more
contracts under section 456(b) or such other means as the
Secretary may provide, for students attending participating
institutions that do not originate direct student loans under
this part. Such agreements for the academic year 1994-1995
shall, to the extent feasible, be entered into not later than
January 1, 1994.
``(2) Transition provisions.--In order to ensure an
expeditious but orderly transition from the loan programs under
part B of this title to the direct student loan program under
this part, the Secretary shall, in the exercise of the
Secretary's discretion, determine the number of institutions
with which the Secretary whall enter into agreements under
subsections (a) and (b) of section 454 for any academic year,
except that the Secretary shall exercise such discretion so as
to achieve the following goals:
``(A) For academic year 1994-1995, loans made under
this part shall represent 5 percent of the new student
loan volume for such year.
``(B) For academic year 1995-1996, loans made under
this part shall represent 30 percent of the new student
loan volume for such year.
``(C) For academic year 1996-1997, loans made under
this part shall represent 40 percent of the new student
loan volume for such year.
``(D) For academic year 1997-1998 and fiscal year
1998, loans made under this part shall represent 50
percent of the new student loan volume for such years.
``(3) New student loan volume.--For the purpose of this
part, the term `new student loan volume' means the estimated
sum of all loans that will be made, insured or guaranteed under
this part and part B in the year for which the determination is
made. The Secretary shall base the estimate described in the
preceding sentence on the most recent program data available.
``(4) Cash management.--The requirements of sections 3335,
6501, and 6503 of title 31, United States Code (the Cash
Management Improvement Act of 1990) shall apply to the program
under this part only to the extent specified in a schedule
established by the Secretaries of Education and the Treasury,
except that such schedule shall provide for the application of
all such requirements not later than July 1, 1998.
``(b) Selection Criteria.--
``(1) Application.--Each institution of higher education
desiring to participate in the direct student loan program
under this part shall submit an application satisfactory to the
Secretary containing such information and assurances as the
Secretary may require.
``(2) Selection criteria.--The Secretary shall select
institutions for participation in the direct student loan
program under this part, and shall enter into agreements with
such institutions under section 454(a), from among those
institutions that submit the applications described in
paragraph (1), and meet such other eligibility requirements as
the Secretary shall prescribe, by, to the extent possible--
``(A)(i) categorizing such institutions according
to anticipated loan volume, length of academic program,
control of the institution, highest degree offered,
size of student enrollment, percentage of students
borrowing under part B, geographic location, annual
loan volume, default experience and composition of the
student body; and
``(ii) beginning in academic year 1995-1996
selecting institutions that are reasonably
representative of each of the categories described
pursuant to clause (i); and
``(B) if the Secretary determines it necessary to
carry out the purposes of this part, selecting
additional institutions.
``(c) Selection Criteria for Origination.--
``(1) In general.--The Secretary may enter into a
supplemental agreement with an institution (or a consortium of
such institutions) that--
``(A) has an agreement under subsection 454(a);
``(B) desires to originate loans under this part;
and
``(C) meets the criteria described in paragraph
(2).
``(2) Transition selection criteria.--For academic year
1994-1995, the Secretary may approve an institution to
originate loans only if such institution--
``(A) made loans under part E of this title in
academic year 1993-1994 and did not exceed the
applicable maximum default rate under section 462(g)
for the most recent fiscal year for which data are
available;
``(B) is not on the reimbursement system of payment
for any of the programs under subpart 1 or 3 of part A,
part C, or part E;
``(C) is not overdue on program or financial
reports or audits required under this title;
``(D) is not subject to an emergency action, or a
limitation, suspension, or termination under section
428(b)(1)(T), 432(h), or 487(c);
``(E) in the opinion of the Secretary, has not had
significant deficiencies identified by a State
postsecondary review entity under subpart 1 of part H
of this title;
``(F) in the opinion of the Secretary, has not had
severe performance deficiencies for any of the programs
under this title, including such deficiencies
demonstrated by audits or program reviews submitted or
conducted during the 5 calendar years immediately
preceding the date of application;
``(G) provides an assurance that such institution
has no delinquent outstanding debts to the Federal
Government, unless such debts are being repaid under or
in accordance with a repayment arrangement satisfactory
to the Federal Government, or the Secretary in the
Secretary's discretion determines that the existence or
amount of such debts has not been finally determined by
the cognizant Federal agency; and
``(H) meets such other criteria as the Secretary
may establish to protect the financial interest of the
United States and to promote the purposes of this part.
``(3) Regulations governing approval after transaction.--
For academic year 1995-1996 and subsequent academic years, the
Secretary shall promulgate and publish in the Federal Register
regulations governing the approval of institutions to originate
loans under this part in accordance with section 458(a)(2).
``(d) Consortia.--Subject to such requirements as the Secretary may
prescribe, eligible institutions of higher education with agreements
under section 454(a) may apply to the Secretary as consortia to
originate loans under this part for students in attendance at such
institutions. Such institutions shall each be required to meet the
requirements of subsection (c) with respect to loan origination.
``SEC. 454. AGREEMENTS WITH INSTITUTIONS.
``(a) Participation Agreements.--An agreement with any institution
of higher education for participation in the direct student loan
program under this part shall--
``(1) provide for the establishment and maintenance of a
direct student loan program at the institution under which the
institution will--
``(A) identify eligible students who seek student
financial assistance at such institution in accordance
with section 484;
``(B) estimate the need of each such student as
required by part F of this title for an academic year,
except that, any loan obtained by a student under this
part with the same terms as loans made under section
428H (except as otherwise provided in this part), or a
loan obtained by a parent under this part with the same
terms as loans made under section 428B (except as
otherwise provided in this part), or obtained under any
State-sponsored or private loan program, may be used to
offset the expected family contribution of the student
for that year;
``(C) provide a statement that certifies the
eligibility of any student to receive a loan under this
part that is not in excess of the annual or aggregate
limit applicable to such loan, except that the
institution may, in exceptional circumstances
identified by the Secretary, refuse to certify a
statement that permits a student to receive a loan
under this part, or certify a loan amount that is less
than the student's determination of need (as determined
under part F of this title), if the reason for such
action is documented and provided in written form to
such student;
``(D) set forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with
the requirements of section 428G (other than subsection
(b)(1) of such section); and
``(E) provide timely and accurate information--
``(i) concerning the status of student
borrowers (and students on whose behalf parents
borrow under this part) while such students are
in attendance at the institution and concerning
any new information of which the institution
becomes aware for such students (or their
parents) after such borrowers leave the
institution, to the Secretary for the servicing
and collecting of loans made under this part;
and
``(ii) if the institution does not have an
agreement with the Secretary under subsection
(b), concerning student eligibility and need,
as determined under subparagraphs (A) and (B),
to the Secretary as needed for the alternative
origination of loans to eligible students and
parents in accordance with this part;
``(2) provide assurances that the institution will comply
with requirements established by the Secretary relating to
student loan information with respect to loans made under this
part;
``(3) provide that the institution accepts responsibility
and financial liability stemming from its failure to perform
its functions pursuant to the agreement;
``(4) provide that students at the institution and their
parents (with respect to such students) will be eligible to
participate in the programs under part B of this title at the
discretion of the Secretary for the period during which such
institution participates in the direct student loan program
under this part;
``(5) provide for the implementation of a quality assurance
system, as established by the Secretary and developed in
consultation with institutions of higher education, to ensure
that the institution is complying with program requirements and
meeting program objectives;
``(6) provide that the institution will not charge any fees
of any kind, however described, to student or parent borrowers
for origination activities or the provision of any information
necessary for a student or parent to receive a loan under this
part, or any benefits associated with such loan; and
``(7) include such other provisions as the Secretary
determines are necessary to protect the interests of the United
States and to promote the purposes of this part.
``(b) Origination.--An agreement with any institution of higher
education, or consortia thereof, for the origination of loans under
this part shall--
``(1) supplement the agreement entered into in accordance
with subsection (a);
``(2) include provisions established by the Secretary that
are similar to the participation agreement provisions described
in paragraphs (1)(E)(ii), (2), (3), (4), (5), (6), and (7) of
subsection (a), as modified to relate to the origination of
loans by the institution or consortium;
``(3) provide that the institution or consortium will
originate loans to eligible students and parents in accordance
with this part; and
``(4) provide that the note or evidence of obligation on
the loan shall be the property of the Secretary.
``(c) Withdrawal and Termination Procedures.--The Secretary shall
establish procedures by which institutions or consortia may withdraw or
be terminated from the program under this part.
``SEC. 455. TERMS AND CONDITIONS OF LOANS.
``(a) In General.--
``(1) Parallel terms, conditions, benefits, and amounts.--
Unless otherwise specified in this part, loans made to
borrowers under this part shall have the same terms,
conditions, and benefits as loans made to borrowers under
sections 428, 428B, and 428H of this title.
``(2) Designation of loans.--Loans made to borrowers under
this part that, except as otherwise specified in this part,
have the same terms, conditions, and benefits as loans made to
borrowers under--
``(A) section 428 shall be known as `Federal Direct
Stafford Loans';
``(B) section 428B shall be known as `Federal
Direct PLUS Loans'; and
``(C) section 428H shall be known as `Federal
Direct Unsubsidized Stafford Loans'.
``(b) Interest Rate.--
``(1) Rates for fdsl and fdusl.--(A) For Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford Loans
for which the first disbursement is made on or after July 1,
1994, the applicable rate of interest shall, during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to--
``(i) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(ii) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
``(B)(i) Notwithstanding the provisions of subparagraph
(A), with respect to any Federal Direct Stafford Loan or
Federal Direct Unsubsidized Stafford Loan for which the first
disbursement is made on or after July 1, 1994, the applicable
rate of interest for interest which accrues--
``(I) prior to the beginning of the repayment
period of the loan; or
``(II) during the period in which principal need
not be paid (whether or not such principal is in fact
paid) by reason of a provision described in section
428(b)(1)(M) or 427(a)(2)(C),
shall not exceed the rate determined under clause (ii).
``(ii) For purposes of clause (i) the rate determined under
this clause shall, during any 12-month period beginning on July
1 and ending on June 30, be determined on the preceding June 1
and be equal to--
``(I) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction prior to such June
1; plus
``(II) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
``(2) Rates for fdplus.--For Federal Direct PLUS Loans for
which the first disbursement is made on or after July 1, 1994,
the applicable rate of interest shall, during any 12-month
period beginning on July 1 and ending on June 30, be determined
on the preceding June 1 and be equal to--
``(A) the bond equivalent rate of 52-week Treasury
bills auctioned at final auction held prior to such
June 1; plus
``(B) 3.1 percent,
except that such rate shall not exceed 9 percent.
``(3) Publication.--The Secretary shall determine the
applicable rates of interest under this subsection after
consultation with the Secretary of Treasury and shall publish
such rate in the Federal Register as soon as practicable after
the date of determination.
``(c) Origination Fee.--The Secretary shall charge the borrower of
a loan made under this part an origination fee of 4.0 percent of the
principal amount of the loan.
``(d) Repayment Plans.--
``(1) Design and selection.--Consistent with criteria
established by the Secretary, the Secretary shall offer a
borrower of a loan made under this part a variety of plans for
repayment of such loan, including principal and interest on the
loan. The borrower shall be entitled to accelerate, without
penalty, repayment on the borrowers loans under this part. The
borrower may choose--
``(A) a standard repayment plan, with a fixed
annual repayment amount paid over a fixed period of
time;
``(B) an extended repayment plan, with a fixed
annual repayment amount paid over an extended period of
time, except that the borrower shall annually repay a
minimum amount determined by the Secretary in
accordance with section 428(b)(1)(L);
``(C) a graduated repayment plan, with annual
repayment amounts established at 2 or more graduated
levels and paid over a fixed or extended period of
time, except that the borrower's scheduled payments
shall not be less than 50 percent, nor more than 150
percent, of what the amortized payment on the amount
owed would be if the loan were repaid under the
standard repayment plan; and
``(D) an income contingent repayment plan, with
varying annual repayment amounts based on the income of
the borrower, paid over an extended period of time, not
to exceed 20 years, except that the plan described in
this subparagraph shall not be available to the
borrower of a Federal Direct PLUS loan.
``(2) Selection by secretary.--If a borrower of a loan made
under this part does not select a repayment plan described in
paragraph (1), the Secretary may provide the borrower with a
repayment plan described in subparagraph (A), (B), or (C) of
paragraph (1).
``(3) Changes in selections.--The borrower of a loan made
under this part may change the borrower's selection of a
repayment plan under paragraph (1), or the Secretary's
selection of a plan for the borrower under paragraph (2), as
the case may be, under such terms and conditions as may be
established by the Secretary.
``(4) Alternative repayment plans.--The Secretary may
provide, on a case by case basis, an alternative repayment plan
to a borrower of a loan made under this part who demonstrates
to the satisfaction of the Secretary that the terms and
conditions of the repayment plans available under paragraph (1)
are not adequate to accommodate the borrower's exceptional
circumstances. In designing such alternative repayment plans,
the Secretary shall ensure that such plans do not exceed the
cost to the Federal Government, as determined on the basis of
the present value of future payments by such borrowers, of
loans made using the plans available under paragraph (1).
``(5) Repayment after default.--The Secretary may require
any borrower who has defaulted on a loan made under this part
to--
``(A) pay all reasonable collection costs
associated with such loan; and
``(B) repay the loan pursuant to an income
contingent repayment plan.
``(e) Income Contingent Repayment.--
``(1) Information and procedures.--The Secretary may obtain
such information as is reasonably necessary regarding the
income of a borrower (and the borrower's spouse, if applicable)
of a loan made under this part that is, or may be, repaid
pursuant to income contingent repayment, for the purpose of
determining the annual repayment obligation of the borrower.
Return and return information (as defined in section 6103 of
the Internal Revenue Code of 1986) may be obtained under the
preceding sentence only to the extent authorized by section
6103(l)(13) of such Code. The Secretary shall establish
procedures for determining the borrower's repayment obligation
on that loan for such year, and such other procedures as are
necessary to implement effectively income contingent repayment.
``(2) Repayment based on adjusted gross income.--A
repayment schedule for a loan made under this part and repaid
pursuant to income contingent repayment shall be based on the
adjusted gross income (as defined in section 62 of the Internal
Revenue Code of 1986) of the borrower or, if the borrower is
married and files a Federal income tax return jointly with the
borrower's spouse, on the adjusted gross income of the borrower
and the borrower's spouse.
``(3) Additional documents.--A borrower who chooses, or is
required, to repay a loan made under this part pursuant to
income contingent repayment, and for whom adjusted gross income
is unavailable or does not reasonably reflect the borrower's
current income, shall provide to the Secretary other
documentation of income satisfactory to the Secretary, which
documentation the Secretary may use to determine an appropriate
repayment schedule.
``(4) Repayment schedules.--Income contingent repayment
schedules shall be established by regulations promulgated by
the Secretary and shall require payments that vary in relation
to the appropriate portion of the annual income of the borrower
(and the borrower's spouse, if applicable) as determined by the
Secretary.
``(5) Calculation of balance due.--The balance due on a
loan made under this part that is repaid pursuant to income
contingent repayment shall equal the unpaid principal amount of
the loan, any accrued interest, and any fees, such as late
charges, assessed on such loan. The Secretary may promulgate
regulations limiting the amount of interest that may be
capitalized on such loan, and the timing of any such
capitalization.
``(6) Notification to borrowers.--The Secretary shall
establish procedures under which a borrower of a loan made
under this part who chooses or is required to repay such loan
pursuant to income contingent repayment is notified of the
terms and conditions of such plan, including notification of
such borrower--
``(A) that the Internal Revenue Service will
disclose to the Secretary tax return information as
authorized under section 6103(l)(13) of the Internal
Revenue Code of 1986; and
``(B) that if a borrower considers that special
circumstances, such as a loss of employment by the
borrower or the borrower's spouse, warrant an
adjustment in the borrower's loan repayment as
determined using the information described in
subparagraph (A), or the alternative documentation
described in paragraph (3), the borrower may contact
the Secretary, who shall determine whether such
adjustment is appropriate, in accordance with criteria
established by the Secretary.
``(f) Deferment.--
``(1) Effect on principal and interest.--A borrower of a
loan made under this part who meets the requirements described
in paragraph (2) shall be eligible for a deferment, during
which periodic installments of principal need not be paid, and
interest--
``(A) shall not accrue, in the case of a Federal
Direct Stafford Loan or a Federal Direct Consolidation
Loan that consolidated only Federal Direct Stafford
Loans, or a combination of such loans and Federal
Stafford Loans for which the student borrower received
an interest subsidy under section 428; or
``(B) shall accrue and be capitalized or paid by
the borrower, in the case of a Federal Direct PLUS
Loan, a Federal Direct Unsubsidized Stafford Loan, or a
Federal Direct Consolidation Loan other than loans
described in subparagraph (A).
``(2) Eligibility.--A borrower of a loan made under this
part shall be eligible for a deferment during any period--
``(A) during which the borrower--
``(i) is carrying at least one-half the
normal full-time work load for the course of
study that the borrower is pursuing, as
determined by the eligible institution (as such
term is defined in section 435) the borrower is
attending; or
``(ii) is pursuing a course of study
pursuant to a graduate fellowship program
approved by the Secretary, or pursuant to a
rehabilitation training program for individuals
with disabilities approved by the Secretary,
except that no borrower shall be eligible for a
deferment under this subparagraph, or a loan made under
this part (other than a Federal Direct PLUS Loan or a
Federal Direct Consolidation Loan), while serving in a
medical internship or residency program;
``(B) not in excess of 3 years during which the
borrower is seeking and unable to find full-time
employment;
``(C) not in excess of 3 years during which the
Secretary determines, in accordance with regulations
prescribed under section 435(o), that the borrower has
experienced or will experience an economic hardship,
regardless of the reason for such hardship.
``(g) Federal Direct Consolidation Loans.--A borrower of a loan
made under this part may consolidate such loan with the loans described
in section 428C(a)(4) and section 428C(d)(1)(C) only under such terms
and conditions as the Secretary shall establish pursuant to regulations
promulgated under this part. Loans made under this subsection shall be
known as `Federal Direct Consolidation Loans'.
``(h) Borrower Defenses.--Notwithstanding any other provision of
law, the Secretary shall specify in regulations (except as authorized
under section 458(a)), which acts or omissions of an institution of
higher education a borrower may assert as a defense to repayment of a
loan made under this part, except that in no event may a borrower
recover from the Secretary, in any action arising from or relating to a
loan made under this part, an amount in excess of the amount such
borrower has repaid on such loan.
``(i) Optically Imaged Documents.--Records maintained in accordance
with section 484A(c) may be used in any proceeding, as permitted
pursuant to section 484A(c), with respect to a loan made under this
part.
``(j) Nondischargeability in Bankruptcy.--Notwithstanding any other
provision of law, a loan made under this part shall not be
dischargeable in any Federal or State bankruptcy proceeding.
``(k) Loan Application and Promissory Note.--The common financial
reporting form required in 483(a)(1) shall constitute the application
for loans made under this part. The Secretary shall develop, print, and
distribute to participating institutions a standard promissory note and
loan disclosure form.
``(l) Loan Disbursement.--
``(1) In general.--Payments of loan proceeds to students
under this part shall be made by crediting the student's
account for tuition and fees, and, in the case of
institutionally owned housing, room and board. The student may
elect to have the institution provide other such goods and
services by crediting the student's account. Loan proceeds that
remain after the application of the previous sentences shall be
delivered to the borrower in accordance with section 427(a)(3).
``(2) Payment periods.--The Secretary shall establish
periods for the payments described in paragraph (2) in a manner
that is consistent with payment of basic grants under subpart 1
of part A.
``(m) Fiscal Control and Fund Accountability.--
``(1) In general.--(A) An institution shall maintain
financial records in a manner consistent with records
maintained for other programs under title IV.
``(B) An institution may maintain loan funds under this
part in the same account as other Federal student financial
assistance.
``(2) Payments; refunds; enrollment status.--Payments,
refunds and enrollment status shall be reconciled in a manner
and schedule that is consistent with the manner and schedule
set forth for the quarterly submission of a payment summary
report required of institutions participating in the program
assisted under subpart 1 of part A.
``(3) Transaction histories.--All transaction histories
under this part shall be maintained using the same system
designated by the Secretary for the provision of basic grants
under subpart 1 of part A.
``(n) Entitlement Provision.--Except as provided in section
454(a)(1)(C), an eligible student in attendance at a participating
institution (or a parent borrower) shall have a contractual right
against the United States to receive any loan under this part for which
such student (or parent) is eligible.
``SEC. 456. CONTRACTS.
``(a) Contracts for Supplies and Services.--
``(1) In general.--The Secretary may award 1 or more
contracts for services and supplies described in subsection
(b). The entities with which the Secretary may enter into such
contracts shall include entities which the Secretary determines
are qualified to provide such services and supplies and will
comply with the procedures applicable to the award of such
contracts. In the case of awarding contracts for the servicing
of loans under this part, the Secretary shall only enter into
contracts with entities that have extensive experience and a
demonstrated record in loan servicing and collection.
``(2) Exemption.--The Secretary may award, through June 30,
1998, contracts under this section without regard to the
requirements in section 303 of the Federal Property and
Administrative Services Act of 1949, section 18 of the Office
of Federal Procurement Policy Act, and section 8(e) of the
Small Business Act, and the corresponding requirements of the
Federal Acquisition Regulations, if the Secretary determines,
on a case-by-case basis, that exemption from such requirements
is in the public interest and necessary for the orderly
transition from the loan programs under part B to the direct
student loan program under this part.
``(3) Application of requirements.--On and after July 1,
1998, all statutory and regulatory requirements described in
paragraph (2) shall apply to the award of a contract under this
section.
``(b) Contracts for Origination, Servicing, and Data Systems.--The
Secretary may enter into 1 or more contracts for--
``(1) the alternative origination of loans to students
attending institutions with agreements to participate in the
program under this part (or their parents), if such
institutions do not have agreements with the Secretary under
section 454(b);
``(2) the servicing and collection of loans made under this
part;
``(3) the establishment and operation of 1 or more data
systems for the maintenance of records on all loans made under
this part;
``(4) services to assist in the orderly transition from the
loan programs under part B to the direct student loan program
under this part; and
``(5) such other aspects of the direct student loan program
as the Secretary determines are necessary to ensure the
successful operation of the program.
``SEC. 457. PLAN FOR IRS PARTICIPATION AND OTHER REPAYMENT OPTIONS.
``(a) In General.--The Secretaries of Education and the Treasury
shall, within 6 months of the date of enactment of this part, submit a
plan to the President that--
``(1) provides for--
``(A) repayment of loans made under this part
through wage withholding by the Internal Revenue
Service;
``(B) procedures for the resolution of disputes
through the Secretary of Education; and
``(C) an alternate system of fees and penalties,
which shall not include the seizure of real property,
by the Internal Revenue Service for the nonpayment of
amounts due; and
``(2) evaluates the feasibility of other wage-withholding
repayment options for such loans.
``(b) Presidential Determination.--If the President determines that
the implementation of 1 or more repayment options contained in the plan
described in subsection (a) would further the purposes of this part,
the Secretaries of Education and the Treasury shall be authorized to
take such actions as are reasonable and necessary to implement such
repayment options, including entering into an agreement pursuant to
section 6306 of the Internal Revenue Code of 1986.
``(c) Funding.--The Secretary of Education may use such amounts as
the Secretary of Education determines necessary from the funds made
available under section 460 to implement the repayment options selected
by the President under subsection (b) and shall make available to the
Secretary of the Treasury such amounts from the funds made available
under section 460 as the Secretaries determine to be necessary to
implement the repayment options carried out by the Internal Revenue
Service.
``SEC. 458. SECRETARIAL ACTIVITIES.
``(a) Regulatory Activities.--
``(1) Notice in lieu of regulations for first year of
program.--The Secretary shall publish in the Federal Register
whatever standards, criteria, and procedures, consistent with
the provisions of this part, that the Secretary, in
consultation with members of the higher education community,
determine are reasonable and necessary to the successful
implementation of the direct student loan program under this
part in academic year 1994-1995. Section 431 of the General
Education Provisions Act shall not apply to the publication of
such standards, criteria, and procedures.
``(2) Negotiated rulemaking.--Beginning with academic year
1995-1996, all standards, criteria, procedures and regulations
implementing this part shall be subject to negotiated
rulemaking, including all such standards, criteria, procedures
and regulations promulgated from the date of enactment of this
part.
``(b) Closing Date for Applications From Institutions.--The
Secretary shall establish a date not later than October 1, 1993, as the
closing date for receiving applications from institutions of higher
education desiring to participate in the direct loan program under this
part in academic year 1994-1995.
``(c) Publication of List of Participating Institutions and Control
Group.--Not later than January 1, 1994, the Secretary shall publish in
the Federal Register a list of the institutions of higher education
selected to participate in the direct loan program under this part in
academic year 1994-1995.
``SEC. 459. REPORTS.
``(a) Annual Reports.--The Secretary shall submit to the Congress
not later than July 1, 1994, and each July 1 for the 4 succeeding years
an annual report describing the progress and status of the direct loan
program.
``(b) Research, Demonstration, and Evaluation.--The Secretary may
use a portion of the funds made available pursuant to section 460 for
research on, or the demonstration or evaluation of, any aspects of the
program authorized by this part, including flexible repayment plans.
``(c) GAO Interim Final Report.--The Comptroller General shall
submit to the Congress not later than January 1, 1997, an interim final
report evaluating the experience of the Department of Education, the
participating institutions of higher education, students, and parents
with respect to the direct student loan program. The report shall
include--
``(1) the administrative costs, including costs per loan,
incurred by participating institutions of higher education in
administering the direct student loan program;
``(2) the administrative costs, including costs per loan,
incurred by the Department of Education and its contractors in
carrying out its responsibilities, including the costs of
origination, data systems, servicing, and collection;
``(3) an evaluation of the effectiveness of the direct
student loan program in providing services to students and
parents, including loan application, loan origination, student
financial aid packaging, tracking of student status,
responsiveness to student inquiries and processing of
deferments, forbearances, and repayments;
``(4) the frequency and cost of borrower delinquency and
default under the direct student loan program and losses
incurred by institutions of higher education and servicers,
including losses caused by improper origination or servicing of
loans;
``(5) the timeliness of capital availability to
institutions of higher education and of loans to students and
parents and the cost of loan capital;
``(6) an evaluation of the effectiveness of the income
contingent repayment option;
``(7) a comparison of the experience of institutions of
higher education, students, and parents participating in direct
student loan program with the experience of institutions,
students, and parents in the control group described in
subsection (e) with respect to the subjects indicated in
paragraphs (1) through (6) of this subsection;
``(8) an evaluation of the administrative performance of
the Department;
``(9) an analysis of the reasons institutions selected by
the Secretary to participate in the direct student loan program
chose not to participate and the reasons institutions withdrew
or were terminated from such program;
``(10) an analysis of the experience of borrowers with
loans under both this part and part B and recommendations for
the most effective repayment procedures for such borrowers;
``(11) a comparison of the cost of loan capital for loans
for the direct student loan program with the cost of loan
capital for the comparable programs in part B of this title;
``(12) an analysis, where practicable, of the experience of
institutions which participate as part of a consortia; and
``(13) recommendations for modifications, continuation,
expansion, suspension, or termination of the direct student
loan program or replacement of all or some of the programs
authorized by part B.
``(d) GAO Final Report.--The Comptroller General shall submit to
the Congress not later than May 1, 1998, a final report evaluating the
experience of the Department of Education, the participating
institutions of higher education, and students with respect to the
direct student loan program. The report shall include the same matters
provided for in subsection (c) of this section.
``(e) Control Group.--To assist the Comptroller General in
preparing the reports required by subsections (c) and (d) of this
section, the Secretary shall select a control group of institutions of
higher education, which represent a cross-section of all institutions
of higher education participating in part B of this title and which is
comparable to the cross-section of institutions of higher education
selected for participating in the direct student loan program. The
Secretary shall select the control groups in the same manner that the
institutions of higher education are selected to participate in the
direct student loan program.
``(f) Treatment of Costs.--In reporting with respect to costs in
the reports required by subsections (c) and (d) of this section, the
Comptroller General shall report separately the nonrecurrent costs such
as start-up costs associated with the direct student loan program, the
administrative costs incurred by institutions of higher education in
providing information to enable the Comptroller General to prepare the
reports required by subsections (c) and (d) of this section and the
normal costs of operating the direct student loan program.
``SEC. 460. FUNDS FOR ADMINISTRATIVE EXPENSES.
``(a) In General.--In each fiscal year beginning with fiscal year
1994, there shall be available to the Secretary of Education from funds
not otherwise appropriated, funds to be obligated for administrative
costs under this part, including the costs of the transition from the
loan programs under part B to the direct student loan program under
this part and transition support for the expenses of guaranty agencies
in servicing outstanding loans in their portfolios and in guaranteeing
new loans, not to exceed $20,000,000 in fiscal year 1994, $70,000,000
in fiscal year 1995, $170,000,000 in fiscal year 1996, $305,000,000 in
fiscal year 1997, and $480,000,000 in fiscal year 1998. If in any
fiscal year, the Secretary determines that additional funds for
administrative expenses are needed as a result of such transition, or
the expansion of the direct student loan program under this part, the
Secretary is authorized to use funds available under this section for
any succeeding fiscal year for such expenses, except that the total
expenditures by the Secretary shall not exceed $1,045,000,000 in fiscal
years 1994 through 1998.
``(b) Availability.--Funds made available under subsection (a)
shall remain available until expended.
``(c) Budget Justification.--The Secretary shall include in the
Department of Education's annual budget justification to Congress a
detailed description of the specific activities for which the funds
made available by this section have been used in the prior and current
years (if applicable), the activities and costs planned for the budget
year, and the projection of activities and costs for each remaining
year for which administrative expenses under this section are made
available.
``(d) Notification.--In the event the Secretary finds it necessary
to use the authority provided to the Secretary under subsection (a) to
draw funds for administrative expenses from a future year's funds, the
Secretary shall immediately notify the Committees on Appropriations of
the Senate and of the House of Representatives, and the Labor and Human
Resources Committee of the Senate and the Education and Labor Committee
of the House of Representatives, of such action and explain the reasons
for such action.
``SEC. 460A. NATIONAL STUDENT LOAN REFORM COMMISSION.
``(a) Establishment.--There is hereby established a bipartisan
commission to be known as the National Student Loan Reform Commission
(hereafter in this section referred to as the `Commission').
``(b) Membership.--
``(1) In general.--The Commission shall be composed of 15
members appointed by the President with the advice and consent
of the Senate who are representative of a broad combination of
types of institutions of higher education, of whom at least 8
members shall be financial aid administrators.
``(2) Period of appointment; vacancies.--Members shall be
appointed for the life of the Commission. Any vacancy in the
Commission shall not affect its powers, but shall be filled in
the same manner as the original appointment.
``(3) Initial meeting.--Not later than 30 days after the
date on which all members of the Commission have been
appointed, the Commission shall hold its first meeting.
``(4) Meetings.--The Commission shall meet at the call of
the Chairman.
``(5) Quorum.--A majority of the members of the Commission
shall constitute a quorum, but a lesser number of members may
hold hearings.
``(6) Chairman and vice chairman.--The Commission shall
select a Chairman and Vice Chairman from among its members.
``(c) Duties.--The Commission shall--
``(1) advise the President and the Congress on the
operation of the Federal Direct Student Loan Program and the
Federal Family Education Loan Program;
``(2) evaluate and report to the Congress regarding such
programs on not less than an annual basis; and
``(3) not later than January 1, 1997, report to the
President and the Congress with final recommendations on the
advisability of replacing the Federal Family Education Loan
Program with direct lending.
``(d) Powers of the Commission.--
``(1) Hearings.--The Commission may hold such hearings, sit
and act at such times and places, take such testimony, and
receive such evidence as the Commission considers advisable to
carry out the purposes of this section.
``(2) Information from federal agencies.--The Commission
may secure directly from any Federal department or agency such
information as the Commission considers necessary to carry out
the provisions of this section. Upon request of the Chairman of
the Commission, the head of such department or agency shall
furnish such information to the Commission.
``(3) Postal services.--The Commission may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
``(4) Gifts.--The Commission may accept, use, and dispose
of gifts or donations of services or property.
``(e) Commission Personnel Matters.--
``(1) Compensation of members.--Each member of the
Commission who is not an officer or employee of the Federal
Government shall be compensated at a rate equal to the daily
equivalent of the annual rate of basic pay prescribed for level
IV of the Executive Schedule under section 5315 of title 5,
United States Code, for each day (including travel time) during
which such member is engaged in the performance of the duties
of the Commission. All members of the Commission who are
officers or employees of the United States shall serve without
compensation in addition to that received for their services as
officers or employees of the United States.
``(2) Travel expenses.--The members of the Commission shall
be allowed travel expenses, including per diem in lieu of
subsistence, at rates authorized for employees of agencies
under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular places of business
in the performance of services for the Commission.
``(3) Staff.--
``(A) In general.--The Chairman of the Commission
may, without regard to the civil service laws and
regulations, appoint and terminate an executive
director and such other additional personnel as may be
necessary to enable the Commission to perform its
duties. The employment of an executive director shall
be subject to confirmation by the Commission.
``(B) Compensation.--The Chairman of the Commission
may fix the compensation of the executive director and
other personnel without regard to the provisions of
chapter 51 and subchapter III of chapter 53 of title 5,
United States Code, relating to classification of
positions and General Schedule pay rates, except that
the rate of pay for the executive director and other
personnel may not exceed the rate payable for level V
of the Executive Schedule under section 5316 of such
title.
``(4) Detail of government employees.--Any Federal
Government employee may be detailed to the Commission without
reimbursement, and such detail shall be without interruption or
loss of civil service status or privilege.
``(5) Procurement of temporary and intermittent services.--
The Chairman of the Commission may procure temporary and
intermittent services under section 3109(b) of title 5, United
States Code, at rates for individuals which do not exceed the
daily equivalent of the annual rate of basic pay prescribed for
level V of the Executive Schedule under section 5316 of such
title.
``(6) Authority to contract.--Subject to the Federal
Property and Administrative Services Act of 1949, the
Commission is authorized to enter into contracts with Federal
and State agencies, private firms, institutions and individuals
for the conduct of activities necessary to the discharge of its
duties and responsibilities.
``(7) Source of administrative support.--Financial and
administrative support services (including those related to
budget and accounting, financial reporting, payroll, and
personnel) shall be provided to the Commission by the General
Services Administration (or other organization the Commission
determines appropriate) for which payment shall be made in
advance or by reimbursement, from funds of the Commission, in
such amounts as may be agreed by the Chairman of the Commission
and the Administrator of General Services (or head of another
organization the Commission determines appropriate).
``(f) Termination of the Commission.--The Commission shall
terminate 18 months after the date on which the Commission submits its
report under subsection (c)(3).
``(g) Funds for Expenses of the Commission.--In each fiscal year
beginning with fiscal year 1994, there shall be available to the
Secretary from funds not otherwise appropriated, funds to be obligated
for the costs of activities assisted under this section, not to exceed
$2,000,000 in each of the fiscal years 1994, 1995, 1996, 1997 and
1998.''.
CHAPTER 2--STUDENT LOAN SAVINGS
SEC. 12021. SECRETARY'S EQUITABLE SHARE.
Section 428(c)(6)(A)(ii) of the Act (20 U.S.C. 1078(c)(6)(A)(ii))
is amended by striking ``30 percent'' and inserting ``27 percent''.
SEC. 12022. INTEREST RATES.
Section 427A of the Higher Education Act of 1965 (20 U.S.C. 1077a)
is amended--
(1) in subsection (c)(4), by adding at the end the
following new subparagraph:
``(E) Notwithstanding subparagraphs (A) and (D) for
any loan made pursuant to section 428B for which the
first disbursement is made on or after July 1, 1994--
``(i) subparagraph (B) shall be applied by
substituting ``3.1'' for ``3.25''; and
``(ii) the interest rate shall not exceed 9
percent.'';
(2) by redesignating subsections (f), (g) and (h) as
subsections (g), (h) and (j), respectively;
(3) by adding after subsection (e) the following new
subsection:
``(f) Interest Rates for New Loans After July 1, 1994.--
``(1) In general.--Notwithstanding subsections (a), (b),
(d) and (e) of this section, with respect to any loan made,
insured, or guaranteed under this part (other than a loan made
pursuant to sections 428B and 428C) for which the first
disbursement is made on or after July 1, 1994, the applicable
rate of interest shall, during any 12-month period beginning on
July 1 and ending on June 30, be determined on the preceding
June 1 and be equal to--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
``(B) 3.10 percent,
except that such rate shall not exceed 8.25 percent.
``(2) Consultation.--The Secretary shall determine the
applicable rate of interest under paragraph (1) after
consultation with the Secretary of the Treasury and shall
publish such rate in the Federal Register as soon as
practicable after the date of determination.''; and
(4) by inserting after subsection (h) (as redesignated in
paragraph (2)) the following new subsection:
``(i) In-School and Grace Period Interest Rates.--
``(1) Applicable rate.--Notwithstanding any other provision
of this section, with respect to any loan for which the first
disbursement is made on or after October 1, 1993, the
applicable rate of interest for interest which accrues--
``(A) prior to the beginning of the repayment
period of the loan; or
``(B) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
428(b)(1)(M) or 427(a)(2)(C),
shall not exceed the rate determined under paragraph (2).
``(2) Method of calculation.--For purposes of paragraph (1)
the rate determined under this paragraph shall, during any 12-
month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to--
``(A) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction prior to such June
1; plus
``(B) 2.5 percent,
except that such rate shall not exceed 8.25 percent.''.
SEC. 12023. LENDER AND STUDENT LOAN FEES.
Section 438 of the Act (20 U.S.C. 1087-1) is amended--
(1) in the heading of subsection (c) by inserting ``From
Students'' after ``Origination Fees'';
(2) in subsection (c)--
(A) in paragraph (2)--
(i) by striking ``428B,'';
(ii) by inserting ``, and part D'' after
``439(o)''; and
(iii) by striking ``5 percent'' and
inserting ``3.0 percent'';
(B) in paragraph (6), by striking ``5 percent'' and
inserting ``3.0 percent'';
(3) by redesignating subsections (d) and (e) as subsections
(e) and (f), respectively; and
(4) by inserting after subsection (c) the following new
subsection:
``(d) Loan Fees From Lenders.--
``(1) Deduction from interest and special allowance
subsidies.--Notwithstanding subsection (b), the total amount of
interest and special allowance payable under section
428(a)(3)(A) and subsection (b) of this section, respectively,
to any holder shall be reduced by the Secretary by a loan fee
in an amount determined in accordance with paragraph (2) of
this subsection. If the total amount of interest and special
allowance payable under section 428(a)(3)(A) and subsection (b)
of this section, respectively, is less than the amount of such
loan fee, then the Secretary shall deduct such excess amount
from subsequent quarters' payments until the total amount has
been deducted.
``(2) Amount of loan fees.--With respect to any loan under
this part (other than loans made under sections 428B, 428C and
439(o)) for which a note or other written evidence of the loan
was sent or delivered to the borrower for signing on or after
October 1, 1993, the amount of the loan fee which shall be
deducted under paragraph (1) shall be equal to .50 percent of
the principal amount of the loan.
``(3) PLUS, consolidation, slma loans.--With respect to any
loans made under section 428B, 428C, and 439 on or after
October 1, 1993, each eligible lender under this part shall pay
to the Secretary a loan fee of .50 percent of the principal
amount of the loan.
``(4) Distribution of loan fees.--The Secretary shall
deposit all fees collected pursuant to paragraph (3) into the
insurance fund established in section 431.''.
SEC. 12024. OFFSET FEE.
Subsection (h) of section 439 of the Act (20 U.S.C. 1087-2(h)) is
amended by adding at the end the following new paragraph:
``(6) Offset fee.--(A) The Association shall pay to the
Secretary, on a monthly basis, an offset fee calculated on an
annual basis in an amount equal to 0.30 percent of the
principal amount of each loan made, insured or guaranteed under
this part which the Association holds on or after the date of
enactment of this paragraph.
``(B) The Secretary shall deposit all fees collected
pursuant to subparagraph (A) into the insurance fund
established in section 431.''.
SEC. 12025. ELIMINATION OF TAX EXEMPT FLOOR.
Section 438(b)(2)(B) of the Act (20 U.S.C. 1087-1(b)(2)(B)) is
amended by adding at the end the following new clause:
``(iv) Notwithstanding clauses (i) and (ii), the quarterly
rate of the special allowance for holders of loans which are
financed with funds obtained by the holder from the issuance of
obligations originally issued on or after October 1, 1993, the
income from which is excluded from gross income under the
Internal Revenue Code of 1986, shall be 85 percent of the
quarterly rate of the special allowance established under
subparagraph (A). Such rate shall also apply to holders of
loans which were made or purchased with funds obtained by the
holder from collections or default reimbursements on, or
interests or other income pertaining to, eligible loans made or
purchased with funds described in the preceding sentence of
this subparagraph or from income on the investment of such
funds.''.
SEC. 12026. REDUCTION IN INTEREST RATE FOR CONSOLIDATION LOANS; REBATE
FEE.
(a) Amendment.--Section 428C of the Act (20 U.S.C. 1078-3) is
amended--
(1) in paragraph (1) of subsection (c)--
(A) in subparagraph (A), by striking ``or (C)'';
(B) by amending subparagraph (B) to read as
follows:
``(B) A consolidation loan made on or after October
1, 1993, shall bear interest on the unpaid principal
balance of the loan, during any 12-month period
beginning on July 1 and ending on June 30, determined
on the preceding June 1, which interest shall be equal
to--
``(i) the bond equivalent rate of 91-day
Treasury bills auctioned at the final auction
held prior to such June 1; plus
``(ii) 3.10 percent,
except that such rate shall not exceed 9 percent.'';
and
(C) by striking subparagraph (C); and
(2) by adding at the end the following new subsection:
``(f) Interest Payment Rebate Fee.--
``(1) In general.--Each holder of a consolidation loan
under this section shall pay to the Secretary, on a monthly
basis and in such manner as the Secretary shall prescribe, a
rebate fee calculated on an annual basis equal to 0.70 percent
of the principal plus accrued unpaid interest on such loan.
``(2) Deposit.--The Secretary shall deposit all fees
collected pursuant to subsection (a) into the insurance fund
established in section 431.''.
(b) Enforcement.--Subsection (d) of section 435 of the Act (20
U.S.C. 1085(d)) is amended--
(1) in the matter preceding subparagraph (A) of paragraph
(1), by striking ``(5)'' and inserting ``(6)''; and
(2) by adding at the end the following new paragraph:
``(6) Rebate fee requirement.--To be an eligible lender
under this part, an eligible lender shall pay rebate fees in
accordance with section 428C(f).''.
SEC. 12027. INSURANCE PREMIUM.
(a) Insurance Premium.--Section 428(b)(1)(H) of the Act (20 U.S.C.
1078(b)(1)(H)) is amended by striking ``3 percent'' and inserting ``1
percent''.
(b) Reinsurance Fees.--Section 428(c) of the Act is amended--
(1) by striking paragraph (9); and
(2) by redesignating paragraph (10) as paragraph (9).
(c) Effective Date.--The amendments made by this section shall be
effective on July 1, 1994.
SEC. 12028. LOAN TRANSFER FEE.
Section 428(b)(2) of the Act (20 U.S.C. 1078(b)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (E);
(2) by striking the period at the end of subparagraph (F)
and inserting ``; and''; and
(3) by adding at the end thereof the following new
subparagraph:
``(G) provide that, if a lender or holder, on or
after October 1, 1993, sells, transfers, or assigns a
loan under this part, then the transferee shall pay to
the Secretary a transfer fee in an amount equal to 0.25
percent the principal and accrued unpaid interest of
the loan, which transfer fee shall be deposited into
the insurance fund established in section 431, except
that the provisions of this subparagraph shall not
apply to any such sale, transfer or assignment by a
lender or holder to such lender's or holder's affiliate
or pursuant to--
``(i) a merger or other consolidation
transaction; or
``(ii) a sale or other transfer of all or
any substantial portion of such lender's or
holder's business or student lending
business.''.
SEC. 12029. RISK SHARING.
(a) Guaranty Agency Reinsurance Percentage.--Section 428(c)(1) of
the Act (20 U.S.C. 1078(c)(1)) is amended--
(1) in subparagraph (A), by striking ``100 percent'' and
inserting ``98 percent'';
(2) in subparagraph (B)(i), by striking ``90 percent'' and
inserting ``88 percent'';
(3) in subparagraph (B)(ii), by striking ``80 percent'' and
inserting ``78 percent''; and
(4) by adding at the end the following new subparagraphs:
``(E) Notwithstanding any other provisions of this
section, in the case of a loan made pursuant to a
lender of last resort program, the Secretary shall
apply the provisions of--
``(i) the fourth sentence of subparagraph
(A) by substituting `100 percent' for `98
percent';
``(ii) subparagraph (B)(i) by substituting
`100 percent' for `88 percent'; and
``(iii) subparagraph (B)(ii) by
substituting `100 percent' for `78 percent'.
``(F) Notwithstanding any other provisions of this
section, in the case of an outstanding loan transferred
to a guaranty agency from another guaranty agency
pursuant to a plan approved by the Secretary in
response to the insolvency of the latter such guarantee
agency, the Secretary shall apply the provision of--
``(i) the fourth sentence of subparagraph
(A) by substituting `100 percent' for `98
percent';
``(ii) subparagraph (B)(i) by substituting
`90 percent' for `88 percent'; and
``(iii) subparagraph (B)(ii) by
substituting `80 percent' for `78 percent'.''.
(b) Risk Sharing by the Student Loan Marketing Association.--
Section 428(b)(1)(G) of the Act (20 U.S.C. 1078(b)(1)(G)) is amended by
inserting before the semicolon at the end thereof the following: ``,
except that for loans held by the Student Loan Marketing Association
(other than loans made with advances to guaranty agencies pursuant to
section 439(p)) such percentage shall be 95 percent''.
(c) Effective Date.--The amendments made by this section shall
apply to any loan made on or after October 1, 1993.
SEC. 12030. PLUS LOAN AMOUNTS AND DISBURSEMENTS.
(a) Loan Amounts.--
(1) Amendment.--Section 428B(b) of the Act (20 U.S.C. 1078-
2(b)) is amended to read as follows:
``(b) Limitations on Amounts of Loans.--
``(1) Annual limit.--Subject to paragraph (2), the maximum
amount parents may borrow for one student in any academic year
or its equivalent (as defined by regulation of the Secretary)
is $10,000.
``(2) Limitation based on need.--Any loan under this
section may be counted as part of the expected family
contribution in the determination of need under this title, but
no loan may be made to any parent under this section for any
academic year in excess of (A) the student's estimated cost of
attendance, minus (B) other financial aid as certified by the
eligible institution under section 428(a)(2)(A). The annual
insurable limit on account of any student shall not be deemed
to be exceeded by a line of credit under which actual payments
to the borrower will not be made in any year in excess of the
annual limit.''.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective for loans made on or after July 1, 1994.
(b) Multiple Disbursement Required.--
(1) Amendment.--The matter preceding paragraph (1) of
section 428B(c) of the Act (20 U.S.C. 1078-2(c)) is amended by
inserting ``shall be disbursed in accordance with the
requirements of section 428G and'' after ``under this
section''.
(2) Conforming amendments.--Section 428G(e) of the Act (20
U.S.C. 1078-7(e) is amended--
(A) by striking ``PLUS, Consolidation,'' and
inserting ``Consolidation''; and
(B) by striking ``section 428B or 428C'' and
inserting ``section 428C''.
CHAPTER 3--CONFORMING AMENDMENTS
Subchapter A--Conforming Amendments to the Higher Education Act of 1965
SEC. 12041. PRESERVING LOAN ACCESS.
(a) Purpose.--It is the purpose of the amendments made by this
section to provide the Secretary with flexible authority as needed to
preserve access to student and parent loans under part B of title IV of
the Act during the transition from the Federal Family Education Loan
Program under such part to the Federal Direct Student Loan Program
under part D of such title.
(b) Advances to Guaranty Agencies for Lender-of-Last-Resort
Services.--
(1) Amendment.--Section 428(j) of the Act (20 U.S.C.
1078(j)) is amended by adding at the end the following new
paragraph:
``(4) Advances to guaranty agencies for lender-of-last-resort
services during transition to direct lending.--(A) In order to ensure
the availability of loan capital during the transition from the Federal
Family Education Loan Program under this part to the Federal Direct
Student Loan Program under part D of this title, the Secretary is
authorized to provide a guaranty agency with additional advance funds
in accordance with section 422(c)(7), with such restrictions on the use
of such funds as are determined appropriate by the Secretary, in order
to ensure that the guaranty agency will make loans as the lender-of-
last-resort. Such agency shall make such loans in accordance with this
subsection and the requirements of the Secretary.
``(B) Notwithstanding any other provision in this part, a guaranty
agency serving as a lender-of-last-resort under this paragraph shall be
paid a fee, established by the Secretary, for making such loans in lieu
of interest and special allowance subsidies, and shall be required to
assign such loans to the Secretary on demand. Upon such assignment, the
portion of the advance represented by the loans assigned shall be
considered repaid by such guaranty agency.''.
(2) Conforming amendment.--Section 422(c)(7) of the Act (20
U.S.C. 1072(c)(7)) is amended by striking all beginning with
``to a guaranty agency'' through the period and inserting ``to
a guaranty agency--
``(A) in accordance with section 428(j), in order to ensure
that the guaranty agency shall make loans as the lender-of-
last-resort during the transition from the Federal Family
Education Loan Program under this part to the Federal Direct
Student Loan Program under part D of this title; or
``(B) if the Secretary is seeking to terminate the guaranty
agency's agreement, or assuming the guaranty agency's
functions, in accordance with section 428(c)(10)(F)(v), in
order to assist the agency in meeting its immediate cash needs,
ensure the uninterrupted payment of claims, or ensure that the
guaranty agency shall make loans as described in subparagraph
(A);''.
(c) Lender Referral Services.--Section 428(e) of the Act (20 U.S.C.
1078(e)) is amended--
(1) in paragraph (1)--
(A) by amending the paragraph heading to read as
follows: ``In general; agreements with guaranty
agencies.--'';
(B) by inserting the subparagraph designation
``(A)'' immediately before ``The Secretary'';
(C) by striking ``in any State'' and inserting
``with which the Secretary has an agreement under
subparagraph (B)''; and
(D) by adding at the end the following new
subparagraph:
``(B)(i) The Secretary may enter into agreements
with guaranty agencies that meet standards established
by the Secretary to provide lender referral services in
geographic areas specified by the Secretary. Such
guaranty agencies shall be paid in accordance with
paragraph (3) for such services.
``(ii) The Secretary shall publish in the Federal
Register whatever standards, criteria, and procedures,
consistent with the provisions of this part and part D
of this title, the Secretary determines are reasonable
and necessary to provide lender referral services under
this subsection and ensure loan access to student and
parent borrowers during the transition from the loan
programs under this part to the direct student loan
programs under part D of this title. Section 431 of the
General Education Provisions Act shall not apply to the
publication of such standards, criteria, and
procedures.'';
(2) in paragraph (2)--
(A) in the matter preceding subparagraph (A), by
striking ``in a State'' and inserting ``with which the
Secretary has an agreement under paragraph (1)(B)'';
(B) by amending subparagraph (A) to read as
follows:
``(A)(i) such student is either a resident of, or
is accepted for enrollment in, or is attending, an
eligible institution located in a geographic area for
which the Secretary (I) determines that loans are not
available to all eligible students, and (II) has
entered into an agreement with a guaranty agency under
paragraph (1)(B) to provide lender referral services;
and'';
(3) in paragraph (3), by striking ``The'' and inserting
``From funds available for costs of transition under section
460 of the Act, the''; and
(4) by striking paragraph (5).
(d) Student Loan Marketing Association.--Section 439(q) of the Act
(20 U.S.C. 1087-2(q)) is amended--
(1) in paragraph (1)(A)--
(A) in the first sentence, by striking ``the
Association or its designated agent may begin making
loans'' and inserting ``the Association or its
designated agent shall, not later than July 1, 1994,
begin making loans to such eligible borrowers''; and
(B) by striking the second sentence;
(2) in paragraph (2)(A), by striking ``the Association or
its designated agent may'' and inserting ``the Association or
its designated agent shall, not later than July 1, 1994,''; and
(3) in paragraph (3), by striking all beginning with
``that--'' through the period at the end of subparagraph (B)
and inserting ``that the conditions that caused the
implementation of this subsection have ceased to exist.''.
SEC. 12042. GUARANTY AGENCY RESERVES.
Section 422 of the Act (20 U.S.C. 1072) is amended by adding at the
end the following new subsection:
``(g) Preservation of Guaranty Agency Reserves.--
``(1) Authority to recover funds.--Notwithstanding any
other provision of law, the reserve funds of the guaranty
agencies, and any assets purchased with such reserve funds,
regardless of who holds or controls the reserves or assets,
shall be considered to be the property of the United States to
be used in the operation of the program authorized by this part
or the program authorized by part D of this title. However, the
Secretary may not require the return of all reserve funds of a
guaranty agency to the Secretary unless the Secretary
determines that such return is in the best interest of the
operation of the program authorized by this part or the program
authorized by part D of this title, or to ensure the proper
maintenance of such agency's funds or assets or the orderly
termination of the guaranty agency's operations and the
liquidation of its assets. The reserves shall be maintained by
each guaranty agency to pay program expenses and contingent
liabilities, as authorized by the Secretary, except that the
Secretary may--
``(A) direct a guaranty agency to return to the
Secretary a portion of its reserve fund which the
Secretary determines is unnecessary to pay the program
expenses and contingent liabilities of the guaranty
agency;
``(B) direct the guaranty agency to require the
return, to the guaranty agency or to the Secretary, of
any reserve funds or assets held by, or under the
control of, any other entity, which the Secretary
determines are necessary to pay the program expenses
and contingent liabilities of the guaranty agency, or
which are required for the orderly termination of the
guaranty agency's operations and the liquidation of its
assets; and
``(C) direct a guaranty agency, or such agency's
officers or directors, to cease any activities
involving expenditure, use or transfer of the guaranty
agency's reserve funds or assets which the Secretary
determines is a misapplication, misuse, or improper
expenditure of such funds or assets.
``(2) Termination provisions in contracts.--(A) To ensure
that the funds and assets of the guaranty agency are preserved,
any contract with respect to the administration of a guaranty
agency's reserve funds, or the administration of any assets
purchased or acquired with the reserve funds of the guaranty
agency, that is entered into or extended by the guaranty
agency, or any other party on behalf of or with the concurrence
of the guaranty agency, after the date of enactment of this
subsection shall provide that the contract is terminable by the
Secretary upon 30 days notice to the contracting parties if the
Secretary determines that such contract includes an
impermissible transfer of the reserve funds or assets, or is
otherwise inconsistent with the terms or purposes of this
section.
``(B) The Secretary may direct a guaranty agency to suspend
or cease activities under any contract entered into by or on
behalf of such agency after January 1, 1993, if the Secretary
determines that the misuse or improper expenditure of such
guaranty agency's funds or assets or such contract provides
unnecessary or improper benefits to such agency's officers or
directors.
``(3) Penalties.--Violation of any direction issued by the
Secretary under this subsection may be subject to the penalties
described in section 490 of this Act.''.
SEC. 12043. TERMS OF LOANS.
(a) Amendment.--Section 428 of the Act (20 U.S.C. 1078) is
amended--
(1) in subsection (b)(1)(D), by striking ``be subject to''
through the semicolon and inserting ``be subject to income
contingent repayment in accordance with subsection (m);''; and
(2) in subsection (m)--
(A) by amending paragraph (1) to read as follows:
``(1) Authority of secretary to require.--The Secretary may
require any borrower who has defaulted on a loan made under
this part that is assigned to the Secretary under subsection
(c)(8) to repay that loan under an income contingent repayment
plan, the terms and conditions of which shall be established by
the Secretary and the same as, or similar to, an income
contingent repayment plan established for purposes of part D of
this title.''; and
(B) by striking paragraphs (2), (3), and (4) and
inserting the following new paragraph:
``(2) Loans for which income contingent repayment may be
required.--A loan made under this part may be required to be
repaid under this subsection if the note or other evidence of
the loan has been assigned to the Secretary pursuant to
subsection (c)(8).''.
(b) Effective Date.--The amendments made by this section shall be
effective for loans made in accordance with section 428 for periods of
instruction beginning on or after July 1, 1993, or made on or after
July 1, 1993, in the case of loans made in accordance with section 428B
or 428C of the Act.
SEC. 12044. ASSIGNMENT OF LOANS.
Section 428(c)(8) of the Act (20 U.S.C. 1078(c)(8)) is amended--
(1) in the first sentence, by inserting the subparagraph
designation ``(A)'' before ``If the'';
(2) by striking the second and third sentences; and
(3) by adding at the end the following new subparagraph:
``(B) An orderly transition from the Federal Family
Education Loan Program under this part to the Federal
Direct Student Loan Program under part D of this title
shall be deemed to be in the Federal fiscal interest,
and a guaranty agency shall promptly assign loans to
the Secretary under this paragraph upon the Secretary's
request.''.
SEC. 12045. TERMINATION OF GUARANTY AGENCY AGREEMENTS; ASSUMPTION OF
GUARANTY AGENCY FUNCTIONS BY THE SECRETARY.
Section 428(c)(9) of the Act (as redesignated by section
12027(b)(2)) (20 U.S.C. 1078(c)(10)) is amended--
(1) in subparagraph (C), by inserting ``, as appropriate,''
after ``the Secretary shall require'';
(2) in subparagraph (D)--
(A) by inserting the clause designation ``(i)''
before ``Each'';
(B) by striking ``Each'' and inserting ``If the
Secretary is not seeking to terminate the guaranty
agency's agreement under subparagraph (E), or assuming
the guaranty agency's functions under subparagraph (F),
a'';
(C) by adding at the end the following new clause:
``(ii) If the Secretary is seeking to
terminate the guaranty agency's agreement under
subparagraph (E), or assuming the guaranty
agency's functions under subparagraph (F), a
management plan described in subparagraph (C)
shall include the means by which the Secretary
and the guaranty agency shall work together to
ensure the orderly termination of the
operations, and liquidation of the assets, of
the guaranty agency.'';
(3) in subparagraph (E)--
(A) in clause (ii), by striking ``or'' after the
semicolon;
(B) in clause (iii), by striking the period and
inserting a semicolon; and
(C) by adding at the end the following new clauses:
``(iv) the Secretary determines that such
action is necessary to protect the Federal
fiscal interest;
``(v) the Secretary determines that such
action is necessary to ensure the continued
availability of loans to student or parent
borrowers; or
``(vi) the Secretary determines that such
action is necessary to ensure an orderly
transition from the loan programs under this
part to the direct student loan programs under
part D of this title.'';
(4) in subparagraph (F)--
(A) in the matter preceding clause (i), by striking
``Except as provided in subparagraph (G), if'' and
inserting ``If'';
(B) by amending clause (v) to read as follows:
``(v) provide the guaranty agency with
additional advance funds in accordance with
section 422(c)(7), with such restrictions on
the use of such funds as is determined
appropriate by the Secretary, in order to--
``(I) meet the immediate cash needs
of the guaranty agency;
``(II) ensure the uninterrupted
payment of claims; or
``(III) ensure that the guaranty
agency will make loans as the lender-
of-last-resort, in accordance with
subsection (j)(4);'';
(C) in clause (vi)--
(i) by striking ``and to avoid'' and
inserting ``, to avoid'';
(ii) by striking the period and inserting a
comma and ``and to ensure an orderly transition
from the loan programs under this part to the
direct student loan programs under part D of
this title.''; and
(iii) by redesignating such clause as
clause (vii); and
(D) by inserting after clause (v) the following new
clause:
``(vi) use all funds and assets of the
guaranty agency to assist in the activities
undertaken in accordance with this subparagraph
and take appropriate action to require the
return, to the guaranty agency or the
Secretary, of any funds or assets provided by
the guaranty agency, under contract or
otherwise, to any person or organization; or'';
(5) by striking subparagraph (G);
(6) by redesignating subparagraphs (H), (I), and (J) as
subparagraphs (I), (J), and (K), respectively;
(7) by inserting after subparagraph (F) the following new
subparagraphs:
``(G) Notwithstanding any other provision of law,
if the Secretary has terminated or is seeking to
terminate a guaranty agency's agreement under
subparagraph (E), or has assumed a guaranty agency's
functions under subparagraph (F)--
``(i) such guaranty agency may not file for
bankruptcy;
``(ii) no State court may issue any order
affecting the Secretary's actions with respect
to such guaranty agency;
``(iii) any contract with respect to the
administration of a guaranty agency's reserve
funds, or the administration of any assets
purchased or acquired with the reserve funds of
the guaranty agency, that is entered into or
extended by the guaranty agency, or any other
party on behalf of or with the concurrence of
the guaranty agency, after the date of
enactment of this subparagraph shall provide
that the contract is terminable by the
Secretary upon 30 days notice to the
contracting parties if the Secretary determines
that such contract includes an impermissible
transfer of the reserve funds or assets, or is
otherwise inconsistent with the terms or
purposes of this section; and
``(iv) no provision of State law shall
apply to the actions of the Secretary in
terminating the operations of a guaranty
agency;
``(H) Notwithstanding any other provision of law,
the Secretary's liability for any outstanding
liabilities of a guaranty agency (other than
outstanding student loan guarantees under this part),
the functions of which the Secretary has assumed, shall
not exceed the fair market value of the reserves of the
guaranty agency, minus any necessary liquidation or
other administrative costs.''; and
(8) in subparagraph (K) (as redesignated by paragraph (5)),
by striking all beginning with ``system, together'' through the
period and inserting ``system and the progress of the
transition from the loan programs under this part to the direct
student loan programs under part D of this title.''.
SEC. 12046. CONSOLIDATION LOANS.
(a) Amendment.--Section 428C of the Act (20 U.S.C. 1078-3) is
amended--
(1) in subsection (a)(3)(A), by striking all beginning with
``(A)'' through the period at the end of clause (ii) and
inserting ``(A) For the purpose of this section, the term
`eligible borrower' means a borrower who, at the time of
application for a consolidation loan is in repayment status, or
in a grace period preceding repayment, or is a delinquent or
defaulted borrower who will reenter repayment through loan
consolidation.'';
(2) in subsection (b)--
(A) in paragraph (1)--
(i) in subparagraph (A)(ii), by inserting
``with income-sensitive repayment terms'' after
``obtain a consolidation loan'';
(ii) by redesignating subparagraph (E) as
subparagraph (F); and
(iii) by inserting after subparagraph (D)
the following new subparagraph:
``(E) that the lender shall offer an income-
sensitive repayment schedule, established by the lender
in accordance with the regulations promulgated by the
Secretary, to the borrower of any consolidation loan
made by the lender on or after July 1, 1994; and'';
(B) in paragraph (4), by amending subparagraph (C)
to read as follows:
``(C)(i) provides that periodic installments of
principal need not be paid, but interest shall accrue
and be paid in accordance with clause (ii), during any
period for which the borrower would be eligible for a
deferral under section 428(b)(1)(M), and that any such
period shall not be included in determining the
repayment schedule pursuant to subsection (c)(2) of
this section; and
``(ii) provides that interest shall accrue and be
paid--
``(I) by the Secretary, in the case of a
consolidation loan that consolidated only
Federal Stafford Loans for which the student
borrower received an interest subsidy under
section 428: or
``(II) by the borrower, or capitalized, in
the case of a consolidation loan other than a
loan described in subclause (I);''; and
(C) by adding at the end the following new
paragraph:
``(5) Direct loans.--In the event that a borrower is unable
to obtain a consolidation loan from a lender with an agreement
under subsection (a)(1), the Secretary shall offer any such
borrower who applies for it, a direct consolidation loan to be
repaid pursuant to income contingent repayment under part D of
this title or pursuant to any other repayment provision under
this section, except that the Secretary shall not offer such
loans if, in the Secretary's judgment, the Department of
Education does not have the necessary origination and servicing
arrangements in place for such loans.''; and
(3) in subsection (c)--
(A) in paragraph (2)--
(i) in subparagraph (A)--
(I) in the matter preceding clause
(i), by striking ``income sensitive
repayment schedules. Such repayment
terms'' and inserting ``income
sensitive repayment schedules,
established by the lender in accordance
with the regulations of the Secretary.
Except as required by such income
sensitive repayment schedules, or by
the terms of repayment pursuant to
income contingent repayment offered by
the Secretary under subsection (b)(5),
such repayment terms'';
(II) by redesignating clauses (i),
(ii), (iii), (iv), and (v) as clauses
(ii), (iii), (iv), (v), and (vi),
respectively; and
(III) by inserting before clause
(ii) (as redesignated by subclause
(II)) the following new clause:
``(i) is less than $7,500, then such
consolidation loan shall be repaid in not more
than 10 years;'';
(ii) by striking subparagraph (B); and
(iii) by redesignating subparagraph (C) as
subparagraph (B); and
(B) in paragraph (3)(A), by inserting ``except as
required by the terms of repayment pursuant to income
contingent repayment offered by the Secretary under
subsection (b)(5),'' before ``the lender''.
(b) Effective Date.--The amendments made by this section shall be
effective for loans made on or after July 1, 1994.
SEC. 12047. AUTHORITY TO USE OPTICALLY IMAGED DOCUMENTS.
(a) General Authority.--Section 484A of the Act (20 U.S.C. 1091a)
is amended--
(1) in the section heading, by inserting ``; optically
imaged documents'' after ``limitations''; and
(2) by adding at the end the following new subsection:
``(c) Optically Imaged Documents.--
``(1) Purpose.--It is the purpose of this subsection to--
``(A) allow the Secretary to use optical imaging
technology to store and retrieve documents and records,
including promissory notes and repayment agreements,
required for the administration of the programs
authorized under part D of this title, or for the
administration of loans made under part B of this title
that have been assigned to the Secretary;
``(B) permit the Secretary to destroy originals of
such documents and records, including promissory notes
and repayment agreements, after such documents and
records have been optically imaged, thereby achieving
significant savings in storage and retrieval costs; and
``(C) ensure that the Secretary may introduce as
evidence in any proceeding with respect to the programs
or loans described in subparagraph (A) optically imaged
documents and records, including promissory notes and
repayment agreements.
``(2) Evidence.--Notwithstanding any other provision of
law, an optically imaged copy of any document or record,
including a promissory note or repayment agreement, may be
introduced as evidence in any proceeding with respect to the
programs or loans described in paragraph (1)(A) in any Federal
or State court, or other tribunal, and such optically imaged
copy shall be admissible in any court or tribunal of the United
States or any State as if such copy were the original document
or record and have the same force and effect as the original.
``(3) Construction.--(A) Nothing in this subsection shall
be interpreted to preclude the admissibility of a duplicate of
a document or record required for the administration of the
programs or loans described in paragraph (1)(A) made by a
technology other than optical imaging consistent with the
Federal Rules of Evidence and section 1732 of title 28, United
States Code, or applicable State law.
``(B) Nothing in this subsection shall be interpreted to
preclude the admissibility of an optically imaged copy of any
document or record in a proceeding outside the scope of this
subsection consistent with the Federal Rules of Evidence and
section 1732 of title 28 of the United States Code, or
applicable State law.''.
(b) Optically Imaged Documents.--Section 432 of the Act (20 U.S.C.
1082) is amended by adding at the end the following new subsection:
``(q) Optically Imaged Documents.--Records maintained in accordance
with section 484A(c) may be used in any proceeding, as permitted by
section 484A(c), with respect to a loan that was made under this part
and has been assigned to the Secretary.''.
(c) Conforming Amendment.--Section 487 of the Act (20 U.S.C. 1094)
is amended by adding at the end the following new subsection:
``(f) Use of Optically Imaged Documents.--In any proceeding with
respect to a program or activity under part D of this title, or with
respect to a loan made under part B of this title that has been
assigned to the Secretary, records maintained in accordance with
section 484A may be used as provided in that section.''.
SEC. 12048. CONSOLIDATION OF PROGRAMS.
(a) In General.--Section 428H of the Act (20 U.S.C. 1078-9) is
amended--
(1) in the matter preceding paragraph (1) of subsection
(b), by inserting ``(including graduate and professional
students as defined in regulations promulgated by the
Secretary)'' after ``484'';
(2) in subsection (d), by inserting ``, except that--
``(1) the maximum annual amount of loans under this section
an independent student (or a student whose parents are unable
to borrow under the Federal Direct PLUS Loan Program) may
borrow in any academic year or its equivalent or in any period
of 7 consecutive months, whichever is longer, shall be as
follows:
``(A) In the case of such a student attending an
eligible institution who has not completed such
student's first 2 years of undergraduate study, the
amount determined in accordance with section 428(b)(1),
plus--
``(i) $4,000, if such student is enrolled
in a program whose length is at least one
academic year in length (as determined under
section 481);
``(ii) $2,500, if such student is enrolled
in a program whose length is less than one
academic year, but at least \2/3\ of such an
academic year; and
``(iii) $1,500, if such student is enrolled
in a program whose length is less than \2/3\,
but at least \1/3\, of such an academic year.
``(B) In the case of such a student attending an
eligible institution who has completed the first 2
years of undergraduate study but who has not completed
the remainder of a program of undergraduate study, the
amount determined in accordance with section 428(b)(1),
plus--
``(i) $5,000, if such student is enrolled
in a program whose length is at least one
academic year in length (as determined under
section 481);
``(ii) $3,325, if such student is enrolled
in a program whose length is less than one
academic year, but at least \2/3\ of such an
academic year; and
``(iii) $1,675, if such student is enrolled
in a program whose length is less than \2/3\,
but at least \1/3\, of such an academic year.
``(C) In the case of such a student who is a
graduate or professional student attending an eligible
institution, the amount determined in accordance with
section 428(b)(1), plus $10,000; and
``(2) the maximum aggregate amount of such loans such
student may borrow shall be adjusted to reflect the increased
annual limits described in paragraph (1)'' before the period;
(3) in subsection (e), by adding at the end the following
new paragraphs:
``(5) Amortization.--The amount of the periodic payment and
the repayment schedule for any loan made pursuant to this
section shall be established by assuming an interest rate equal
to the applicable rate of interest at the time the repayment of
the principal amount of the loan commences. At the option of
the lender, the note or other written evidence of the loan may
require that--
``(A) the amount of the periodic payment will be
adjusted annually; or
``(B) the period of repayment of principal will be
lengthened or shortened,
in order to reflect adjustments in interest rates occurring as
a consequence of section 427A(c)(4).
``(6) Repayment period.--For purposes of calculating the
10-year repayment period under section 428(b)(1)(D), such
period shall commence at the time the first payment of
principal is due from the borrower.''; and
(4) by adding at the end the following new subsection:
``(h) Refinancing.--
``(1) Refinancing to secure combined payment.--An eligible
lender may at any time consolidate loans held by such lender
which are made under this section to a borrower, including
loans which were made under sections 428A and 428B as such
sections were in effect prior to the date of enactment of the
Higher Education Amendments of 1986, under a single repayment
schedule which provides for a single principal payment and a
single payment of interest, and shall calculate the repayment
period for each included loan from the date of the commencement
of repayment of the most recent included loan. Unless the
consolidated loan is obtained by a borrower who is electing to
obtain variable interest under paragraph (2) or (3), such
consolidated loan shall bear interest at the weighted average
of the rates of all included loans rounded to the nearest whole
percent. The extension of any repayment period of an included
loan pursuant to this paragraph shall be reported (if required
by such loan) to the Secretary or guaranty agency insuring the
loan, as the case may be, but no additional insurance premiums
shall be payable with respect to any such extension. The
extension of the repayment period of any included loan shall
not require the formal extension of the promissory note
evidencing the included loan or the execution of a new
promissory note, but shall be treated as an administrative
forbearance of the repayment terms of the included loan.
``(2) Refinancing to secure variable interest rate.--An
eligible lender may reissue a loan which was made under this
section before July 1, 1987, or under sections 428A and 428B as
such sections were in effect prior to the date of enactment of
the Higher Education Amendments of 1986 in order to permit the
borrower to obtain the interest rate provided under section
427A(c)(4). A lender offering to reissue a loan or loans for
such purpose may charge a borrower an amount not to exceed $100
to cover the administrative costs of reissuing such loan or
loans, not more than one-half of which shall be paid to the
guarantor of the loan being reissued to recover costs of
reissuance. Reissuance of a loan under this paragraph shall not
affect any insurance applicable with respect to the loan, and
no additional insurance fee may be charged to the borrower with
respect to the loan.
``(3) Refinancing by discharge of previous loan.--A
borrower who has applied to an original lender for reissuance
of a loan under paragraph (2) and who is denied such reissuance
may obtain a loan from another lender for the purpose of
discharging the loan from such original lender. A loan made for
such purpose--
``(A) shall bear interest at the applicable rate of
interest provided under section 427A(c)(4);
``(B) shall not result in the extension of the
duration of the note (other than as permitted under
subsection (e)(5)(B));
``(C) may be subject to an additional insurance fee
but shall not be subject to the administrative cost
charge permitted by paragraph (2) of this subsection;
and
``(D) shall be applied to discharge the borrower
from any remaining obligation to the original lender
with respect to the original loan.
``(4) Certification in lieu of promissory note
presentation.--Each new lender may accept certification from
the original lender of the borrower's original loan in lieu of
presentation of the original promissory note.
``(5) Notification to borrowers of availability of
refinancing options.--Each holder of a loan made under this
section or under section 428B as in effect prior to the date of
enactment of this Act shall, not later than October 1, 1993, in
the case of loans made before the date of enactment of this
paragraph, notify the borrower of such loan--
``(A) of the refinancing options for which the
borrower is eligible under this subsection;
``(B) of those options which will be made available
by the holder and of the practical consequences of such
options in terms of interest rates and monthly and
total payments for a set of loan examples; and
``(C) that, with respect to any option that the
holder will not make available, the holder will, to the
extent practicable, refer the borrower to an eligible
lender offering such option.''.
(b) Repeal.--
(1) Repealer.--Section 428A of the Act is repealed.
(2) Effective date.--The amendment made by paragraph (1)
shall be effective on July 1, 1994.
(c) Terms, Conditions and Benefits.--Notwithstanding the amendments
made by this section, with respect to loans provided under sections
428A and 428H of the Higher Education Act of 1965 (as such sections
existed on the date preceding the date of enactment of this Act) the
terms, conditions and benefits applicable to such loans under such
sections shall continue to apply to such loans after the date of
enactment of this Act.
SEC. 12049. ORIGINATION FEE; INSURANCE PREMIUM.
Section 428H of the Act (20 U.S.C. 1078-8) is amended--
(1) in subsection (f)--
(A) in the subsection heading, by striking
``Insurance Premium'' and inserting ``Origination
Fee'';
(B) in the heading of paragraph (1), by striking
``/insurance premium'';
(C) in paragraph (1)--
(i) by striking ``a combined origination
fee and insurance premium in the amount of 6.5
percent'' and inserting ``an origination fee in
the amount of 3.0 percent''; and
(ii) by striking the second sentence;
(D) in paragraph (2), by striking ``combined fee
and premium'' and inserting ``origination fee'';
(E) in paragraph (3), by striking ``combined
origination fee and insurance premium'' and inserting
``origination fee'';
(F) in paragraph (4)--
(i) in the heading, by striking ``insurance
premium'' and inserting ``origination fee'';
(ii) by striking ``combined origination fee
and insurance premiums'' and inserting
``origination fees''; and
(iii) by striking ``and premiums to pay''
and inserting ``to pay''; and
(G) in paragraph (5)--
(i) in the heading, by inserting
``origination fee and'' before ``insurance'';
and
(ii) in the second sentence--
(I) by striking ``6.5 percent
insurance premium'' and inserting
``combined origination fee under this
subsection and the insurance premium
under subsection (h)''; and
(II) by inserting ``origination fee
and'' before ``insurance''; and
(2) by adding at the end the following new subsection:
``(h) Insurance Premium.--Each State or nonprofit private
institution or organization having an agreement with the Secretary
under section 428(b)(1) may charge a borrower under this section an
insurance premium equal to not more than 1 percent of the principal
amount of the loan, if such premium will not be used for incentive
payments to lenders.''
SEC. 12050. DISBURSEMENTS FOR FIRST YEAR STUDENTS.
Section 428(G) of the Act (20 U.S.C. 1078-7) is amended--
(1) in the heading for subsection (b), by striking ``and
Endorsement''; and
(2) in subsection (b)--
(A) by striking paragraph (1);
(B) in paragraph (2)--
(i) by striking ``other than a student
described in paragraph (1)''; and
(ii) by striking ``(2) Other students.--''.
Subchapter B--Amendments to Other Laws
SEC. 12055. DISCLOSURE OF TAX RETURN INFORMATION.
(a) Returns and Return Information.--Section 6103(a)(3) of the
Internal Revenue Code of 1986 (hereafter referred to in this part as
``the Code'') is amended by striking ``(l)(12)'' and inserting
``(l)(10), (12), or (13)''.
(b) Income Contingent Repayment of Student Loans.--Section 6103(l)
of the Code is amended--
(1) in paragraph (10)(B), by striking ``officers and
employees of an agency receiving return information under
subparagraph (A) shall use such information'' and inserting
``return information disclosed under subparagraph (A) may be
used by officers and employees of an agency, and by officers,
employees, and agents of the Department of Education,''; and
(2) at the end, by adding a new paragraph to read as
follows:
``(13) Disclosure of return information to carry out income
contingent repayment of student loans.--
``(A) In general.--The Secretary may, upon written
request from the Secretary of Education, disclose to
officers and employees of the Department of Education
return information with respect to a taxpayer who has
received a Federal loan under a student loan program
and whose loan repayment amounts are based in whole or
in part on the taxpayer's income. Such return
information shall be limited to--
``(i) taxpayer identity information with
respect to such taxpayer;
``(ii) the filing status of such taxpayer;
and
``(iii) the adjusted gross income of such
taxpayer (as defined in section 62).
``(B) Restriction on use of disclosed
information.--Return information disclosed under
subparagraph (A) may be used by officers, employees,
and agents of the Department of Education only for the
purposes of, and to the extent necessary in,
establishing an appropriate income contingent repayment
level under a student loan program.
``(C) Definitions.--For purposes of this paragraph,
the term `student loan program' means the program
authorized under part D of title IV of the Higher
Education Act of 1965 and includes loans under parts B
and E of title IV the Higher Education Act of 1965 that
are in default and have been assigned to the Department
of Education.''.
(c) Disclosure of Taxpayer Identity Information.--Section
6103(m)(4) of the Code is amended--
(1) in the heading, by inserting ``owe an overpayment on
federal pell grants or'' immediately after ``individuals who'';
(2) in subparagraph (A)--
(A) by redesignating clauses (i) and (ii) as
subclauses (I) and (II); and
(B) by striking ``of any taxpayer who has defaulted
on a loan--'' and inserting ``of any taxpayer--
``(i) who owes an overpayment of a grant
awarded to that taxpayer under subpart 1 of
part A of title IV of the Higher Education Act
of 1965, or
``(ii) who has defaulted on a loan--'';
(3) in subparagraph (B)--
(A) in clause (i), by striking ``under part B'' and
inserting ``under part B or D''; and
(B) in clause (ii), by striking ``under part E''
and inserting ``under subpart 1 of part A, part D, or
part E'';
(d) Procedure and Recordkeeping.--Section 6103(p) of the Code is
amended--
(1) in paragraph (3)(A), by striking ``(11), or (12), (m)''
and inserting ``(11), (12), or (13), (m)'';
(2) in paragraph (4)--
(A) in the matter preceding subparagraph (A), by
striking ``(10), or (11),'' and inserting ``(10), (11),
or (13),'';
(B) in subparagraph (F)(ii), by striking ``(11), or
(12),'' and inserting ``(11), (12), or (13),''; and
(C) in the flush left material after subparagraph
(F), by striking ``under subsection (l)(12)(B)'' and
inserting ``under paragraph (10), (12)(B), or (13) of
subsection (l)''.
(e) Collection of Payments.--(1) Subchapter A of chapter 64 of the
Code is amended by adding at the end the following new section:
``SEC. 6306. COLLECTION OF PAYMENTS ON FEDERAL DIRECT STUDENT LOANS.
``Upon a determination by the President under section 457(b) of the
Higher Education Act of 1965 concerning the implementation of a plan
for the repayment of Federal Direct Stafford Loans through wage
withholding or other means by the Internal Revenue Service, the
Secretary of the Treasury may enter into an agreement with the
Secretary of Education to provide for the collection of payments on
loans made pursuant to part D of title IV of such Act. The Secretary of
the Treasury may assess and collect such payments as though they were
additional income taxes due, and shall establish such procedures and
conventions as are necessary under such agreement, including--
``(1) procedures for the resolution of disputes through the
Secretary of Education;
``(2) an alternate system of fees and penalties, which
system shall not include the seizure of real property by the
Internal Revenue Service, for the nonpayment of amounts due;
and
``(3) provisions related to withholding, payment of
estimated tax and allocation of payments.''.
(2) The table of sections for subchapter A of chapter 64 of the
Code is amended by adding at the end the following new item:
``Sec. 6306. Collection of payments on Federal direct Stafford
loans.''.
(f) Unauthorized Disclosure.--Section 7213(a)(2) of the Code is
amended by striking ``(10) or (12)'' and inserting ``(10), (12), or
(13),''.
(g) Effective Date.--The amendments made by this section shall be
effective during the period beginning on the date of enactment of this
Act and ending on December 30, 1998.
CHAPTER 4--COST SHARING BY STATES
SEC. 12061. COST SHARING BY STATES.
(a) Amendment.--Section 428 of the Higher Education Act of 1965 (20
U.S.C. 1078) is amended by adding at the end the following new
subsection:
``(n) State Share of Default Costs.--
``(1) In general.--In the case of any State in which there
are located any institutions of higher education with cohort
default rates that exceed 20 percent, such State shall pay to
the Secretary an amount equal to--
``(A) the new loan volume attributable to all
institutions in the State for the current fiscal year;
multiplied by
``(B) the percentage specified in paragraph (2);
multiplied by
``(C) the quotient of--
``(i) the sum of the amounts calculated
under paragraph (3) for each such institution
in the State; divided by
``(ii) the total amount of loan volume
attributable to current and former students of
institutions located in that State entering
repayment in the period used to calculate the
cohort default rate.
``(2) Percentage.--For purposes of paragraph (1)(B), the
percentage used shall be--
``(A) 12.5 percent for fiscal year 1995;
``(B) 20 percent for fiscal year 1996; and
``(C) 50 percent for fiscal year 1997 and
succeeding fiscal years.
``(3) Calculation.--For purposes of paragraph (1)(C)(i),
the amount shall be determined by calculating for each
institution the amount by which--
``(A) the amount of the loans received for
attendance by such institution's current and former
students who (i) enter repayment during the fiscal year
used for the calculation of the cohort default rate,
and (ii) default before the end of the following fiscal
year; exceeds
``(B) 20 percent of the loans received for
attendance by all the current and former students who
enter repayment during the fiscal year used for the
calculation of the cohort default rate.
``(4) Fee.--A State shall charge a fee to an institution of
higher education that participates in the program under this
part and is located in that State according to a fee structure,
approved by the Secretary, that is based on the institution's
cohort default rate and the State's risk of loss under this
subsection. Such fee structure shall include a process by which
an institution with a high cohort default rate is exempt from
any fees under this paragraph if such institution demonstrates
to the satisfaction of the State that exceptional mitigating
circumstances, as determined by the State and approved by the
Secretary, contributed to its cohort default rate.''.
(b) Effective Date.--The amendment made by this section shall be
effective on October 1, 1994.
CHAPTER 5--GENERAL EFFECTIVE DATE
SEC. 12071. GENERAL EFFECTIVE DATE.
Except as otherwise provided in this subtitle, this subtitle and
the amendments made by this subtitle shall be effective on October 1,
1993.
Subtitle B--Public Health Service Act Provisions
SEC. 12101. HEALTH COVERAGE CLEARINGHOUSE.
(a) In General.--The Public Health Service Act is amended--
(1) by redesignating title XXVII (42 U.S.C. 300cc et seq.)
as title XXVIII; and
(2) by inserting after title XXVI the following new title:
``TITLE XXVII--HEALTH COVERAGE CLEARINGHOUSE
``SEC. 2701. ESTABLISHMENT OF CLEARINGHOUSE.
``(a) In General.--The Secretary shall establish and operate a
Health Coverage Clearinghouse (in this title referred to as the
`Clearinghouse') for the purpose of identifying, for beneficiaries
under a covered health program (as defined in subsection (c)), third
parties (which may include a covered health program) which may be
liable for payment for health care items and services furnished to such
beneficiaries under such program.
``(b) Director.--The Clearinghouse shall be headed by a Director
(in this title referred to as the `Director') appointed by the
Secretary.
``(c) Covered Health Program Defined.--As used in this title, the
term `covered health program' means any of the following under which
health care items or services are furnished to a beneficiary--
``(1) a migrant health center receiving assistance under
section 329;
``(2) a community health center receiving assistance under
section 330;
``(3) an entity receiving assistance under section 340;
``(4) an alcohol or drug treatment entity or mental health
entity receiving assistance under title V or title XIX;
``(5) a family planning project described in section 1001;
``(6) an entity receiving assistance under title XXVI;
``(7) a black lung clinic authorized under this Act;
``(8) a clinic that treats sexually transmitted diseases
and is authorized under section 318;
``(9) an entity receiving funds to provide primary health
services to residents of public housing under section 340A;
``(10) a non-Federal entity authorized under the Indian
Self-Determination Act;
``(11) a tuberculosis clinic receiving assistance under
section 317(j)(2) or 317(k)(2); or
``(12) any other Federally funded program that provides
payments for medical services provided to an individual which
are or may be covered under a private health insurance policy.
``(d) Other Definitions.--As used in this title:
``(1) Administrator.--The term `administrator' means, with
respect to a covered health program described in paragraphs (1)
through (12) of subsection (c), the individual responsible for
the overall administration of the program under which an entity
described in such paragraphs receives Federal funds.
``(2) Group health plan.--The term `group health plan' has
the same meaning given the term `employee welfare benefit plan'
in section 3(1) of the Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002(1)).
``(3) Qualified employer.--The term `qualified employer'
has the same meaning given the term `employer' in section 3(5)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002(1)).
``SEC. 2702. PROVISION OF INFORMATION
``(a) Request for Information.--An administrator of a covered
health program may request from the Director information concerning the
employment and group health coverage of a program beneficiary, the
beneficiary's spouse, and (if the beneficiary is a dependent child) the
beneficiary's parents. The Director shall provide such information if
the request--
``(1) is in such form and manner and at such a time as the
Director may require, and
``(2) specifies the name and tax identification number of
the beneficiary.
``(b) Data Matching Program.--
``(1) Request by director.--The Director shall, at such
intervals as the Director finds appropriate, transmit to the
Secretary of the Treasury the names and tax identification
numbers of beneficiaries with respect to whom a request has
been made pursuant to subsection (a), and request that such
Secretary disclose to the Secretary of Health and Human
Services the following information:
``(A) Whether the beneficiary is married and, if
so, the name of the spouse and such spouse's tax
identification number.
``(B) If the beneficiary is a dependent child, the
name of and tax identification numbers of the
beneficiary's parents.
``(2) Information from secretary.--The Secretary shall,
upon written request from the Director, disclose to the
Director, the following information:
``(A) For each individual who is identified as
having received wages (as defined in section 3401(a) of
the Internal Revenue Code of 1986) from an employer in
a previous year--
``(i) the name and taxpayer identification
number of the individual; and
``(ii) the name, address, and taxpayer
identification number of the employer, and
whether such employer is a qualified employer.
``(B) For each individual who is identified as
married and whose spouse is identified as having
received wages (as defined in section 3401(a) of the
Internal Revenue Code of 1986) from an employer in a
previous year--
``(i) the name and taxpayer identification
number of the individual and of the
individual's spouse; and
``(ii) the name, address, and taxpayer
identification number of the spouse's employer,
and whether such employer is a qualified
employer.
``(C) For each individual who is identified as a
dependent child and whose parent is identified as
having received wages (as defined in section 3401(a) of
the Internal Revenue Code of 1986) from an employer in
a previous year--
``(i) the name and taxpayer identification
number of the individual and of the
individual's parent; and
``(ii) the name, address, and taxpayer
identification number of the parent's employer,
and whether such employer is a qualified
employer.
``(3) Information from employers.--The Director shall--
``(A) request, from the employer of each individual
(including each spouse) with respect to whom
information was received from the Secretary pursuant to
paragraph (2), information concerning coverage of such
individual (and of the individual's spouse and
dependent children) under the employer's group health
plan, specifically the period and nature of the
coverage, and the name, address, and identifying number
of the plan, and
``(B) furnish the information received in response
to such request with respect to an individual (or such
individual's spouse or dependent children) to the
administrator requesting such information pursuant to
subsection (a).
Under no circumstances shall the information requested pertain
in any way to the health status of the individual, spouse or
dependent children, to the cost of such coverage, or to the
beneficiary-specific limitations on such coverage.
``SEC. 2703. REQUIREMENT THAT EMPLOYERS FURNISH INFORMATION.
``(a) In General.--An employer shall furnish to the Director the
information requested pursuant to section 2702(b)(3) within 90 days
after receipt of such a request.
``(b) Civil Money Penalty for Failure to Cooperate.--
``(1) In general.--An employer (other than a Federal or
other governmental entity) who willfully or repeatedly fails to
provide timely and accurate response to a request for
information pursuant to section 2702(b)(3) shall be subject, in
addition to any other penalties that may be prescribed by law,
to a civil money penalty of not to exceed $500 for each
individual with respect to whom such a request is made.
``(2) Enforcement authority.--In cases of failure to
respond to the Director in accordance with subsection (a) to
inquiries relating to requests pursuant to section 2702, the
provisions of section 353(h)(3), regarding procedures for the
imposition of civil money penalties developed by the Secretary,
shall apply in the same manner as such provisions apply to
penalties or proceedings under section 353.
``SEC. 2704. DATA BANK.
``(a) Maintenance of Information.--The Clearinghouse shall maintain
a data bank, containing information on individuals obtained pursuant to
this title. Individual information in the data bank shall be retained
for not less than one year after the date the information was obtained.
``(b) Disclosure of Information in Data Bank.--
``(1) In general.--The Director is authorized (subject to
paragraph (2)) to disclose any information in the data bank
established pursuant to subsection (a) with respect to an
individual (or an individual's spouse or parent)--
``(A) to the Secretary, administrators, employers,
and insurers, to the extent necessary to assist such
administrators;
``(B) to Federal and State law enforcement
officials responsible for enforcement of civil or
criminal laws, in connection with investigations or
administrative or judicial law enforcement proceedings
relating to a covered health program; and
``(C) for research or statistical purposes.
``(2) Restrictions on disclosure.--Information in the data
bank may be disclosed under this subsection only for purposes
of, and to the extent necessary in, determining the extent to
which an individual is covered under any group health plan.
``(c) Use of Contractors.--The responsibilities of the
Clearinghouse under this section may be carried out by contract.
``(d) Fees.--The Clearinghouse shall--
``(1) establish fees for services under this section
designed to cover the full costs to the Clearinghouse of
providing such services, and
``(2) require the payment of such fees to provide such
services.''.
(b) Conforming Amendments.--
(1) Sections 2701 through 2714 of the Public Health Service
Act (42 U.S.C. 300cc through 300cc-15) are redesignated as
sections 2801 through 2814, respectively.
(2) Sections 465(f) and 497 of such Act (42 U.S.C. 286(f)
and 289(f)) are amended by striking out ``2701'' each place
that such appears and inserting in lieu thereof ``2801''.
(c) ERISA Amendment.--Section 101 of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1021) is amended by adding at the end
thereof the following new subsection:
``(g) Compliance With Health Coverage Clearinghouse Requirements.--
In addition to providing the information required under this section,
the administrator of each employee benefit plan shall comply with the
requirements of section 2703(a) of the Public Health Service Act. The
enforcement provisions of this Act shall apply to an administrator that
fails to comply with this subsection in the same manner as such
provisions otherwise apply to such administrators under this
section.''.
(d) Effective Date.--The amendments made by subsections (a), (b),
and (c) shall take effect on April 1, 1995.
SEC. 12102. PHYSICIAN OWNERSHIP STUDY.
(a) Study.--The Secretary of Health and Human Services shall
conduct a study concerning--
(1) the desirability of establishing a Federal prohibition
on the referral of a patient by a health care provider to an
entity in which the provider has a financial interest or from
which the provider receives a financial benefit for such
referral; and
(2) different options with respect to the scope of any
prohibition recommended under paragraph (1), including options
for the application of rules defining prohibited activities
that are similar to those implemented under title XVIII of the
Social Security Act, and for the methods of enforcing such a
prohibition.
(b) Limitation.--The study conducted under subsection (a) shall be
restricted to determining the desirability of establishing a
prohibition of the type described in such subsection with respect to
patients for whom the health care services involved are not provided or
paid for under a Federal or State program.
(c) Report.--Not later than 6 months after the date of enactment of
this Act, the Secretary of Health and Human Services shall prepare and
submit to the President and the appropriate committees of Congress a
report concerning the results of the study conducted under subsection
(a).
SEC. 12103. DELAY IN COST-OF-LIVING ADJUSTMENTS IN FEDERAL EMPLOYEE
RETIREMENT BENEFITS DURING FISCAL YEARS 1994, 1995, AND
1996.
(a) Applicability.--
(1) In general.--This section shall apply with respect to
any cost-of-living increase for any person described under
paragraph (2) scheduled to take effect, during fiscal year
1994, 1995, or 1996, under section 8340(b) or 8462(b) of title
5, United States Code.
(2) Annuitants.--The provisions of paragraph (1) shall
apply to any annuitant who on the date preceding the date of
retirement was a member of the National Health Service Corps.
(b) Delay in Effective Date of Adjustments.--A cost-of-living
increase described in subsection (a) shall not take effect until the
first day of the third calendar month after the date such increase
would otherwise take effect.
(c) Rule of Construction.--Nothing in this section shall be
considered to affect any determination relating to eligibility for an
annuity increase or the amount of the first increase in an annuity
under section 8340(b) or (c) or section 8462 (b) or (c) of title 5,
United States Code, or comparable provisions of law.
SEC. 12104. PERMANENT ELIMINATION OF THE ALTERNATIVE-FORM-OF-ANNUITY
OPTION EXCEPT FOR INDIVIDUALS WITH A CRITICAL MEDICAL
CONDITION.
(a) Civil Service Retirement System; Federal Employees' Retirement
System.--A member of the National Health Service Corps who is covered
under chapter 83 or 84 of title 5, United States Code, and has a life-
threatening affliction or other critical medical condition may elect
annuity benefits under section 8343a or 8420a of title 5, United States
Code, as the case may be.
(b) Effective Date.--The amendments made by this section shall
become effective on October 1, 1995, and shall apply with respect to
any annuity commencing on or after that date.
SEC. 12105. FEDERAL TORT CLAIMS AMENDMENTS.
(a) Clarification of Coverage of Officers and Employees of
Clinics.--The first sentence of section 224(g)(1) of the Public Health
Service Act (42 U.S.C. 233(g)(1)) is amended by striking ``officer,
employee, or contractor'' and inserting the following: ``officer or
employee of such an entity, and any contractor''.
(b) Coverage for Services Furnished to Individuals Other Than
Patients of Clinic.--Section 224(g) of such Act (42 U.S.C. 233(g)(1)),
as amended by paragraph (1), is further amended--
(1) in the first sentence of paragraph (1), by inserting
after ``Service'' the following: ``with respect to services
provided to patients of the entity and (subject to paragraph
(7)) to certain other individuals''; and
(2) by adding at the end the following new paragraph:
``(7) For purposes of paragraph (1), an officer, employee, or
contractor described in such paragraph may be deemed to be an employee
of the Public Health Service with respect to services provided to
individuals who are not patients of an entity described in paragraph
(4) only if the Secretary determines--
``(A) that the provision of the services to such
individuals benefits health center patients and general
populations that could be served by the health center through
community-wide intervention efforts within the communities
served by such health center, and facilitates the provision of
services to health center patients; or
``(B) that such services are otherwise required to be
provided to such individuals under an employment contract (or
other similar arrangement) between the individual and the
entity.''.
(c) Determining Compliance of Entity With Requirements for
Coverage.--
(1) In general.--Section 224(h) of such Act (42 U.S.C.
233(h)), as added by section 2(b) of the Federally Supported
Health Centers Assistance Act of 1992, is amended by striking
``the entity--'' and inserting the following: ``the Secretary,
after receiving such assurances and conducting such
investigation as the Secretary considers necessary, finds that
the entity--''.
(2) Finding.--Section 224 of such Act (42 U.S.C. 233) is
amended by adding at the end thereof the following new
subsection:
``(i) With respect to subsection (h), the finding of the Secretary
that an entity meets all of the requirements under such subsection
shall apply for the period specified by the Secretary, and shall be
binding for all parties unless the Secretary reverses such finding for
good cause shown at a later date.''.
(d) Effective Date.--The amendments made by this section shall take
effect as if included in the enactment of the Federally Supported
Health Centers Assistance Act of 1992.
Subtitle C--Improved Immunization Delivery and Monitoring
SEC. 12201. SHORT TITLE, REFERENCES AND PURPOSE.
(a) Short Title.--This subtitle may be cited as the ``Comprehensive
Child Immunization Act of 1993''.
(b) References.--Except as otherwise expressly provided, whenever
in this subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provision of the
Public Health Service Act (42 U.S.C. 201 et seq.).
(c) Purpose.--It is the purpose of this subtitle to ensure that
children in the United States are appropriately immunized against
vaccine preventable infectious diseases at the earliest appropriate
age.
SEC. 12202. MONITORING OF CHILDHOOD IMMUNIZATIONS.
Title XXI of the Public Health Service Act (42 U.S.C. 300aa-1 et
seq.) is amended by adding at the end thereof the following new
subtitle:
``Subtitle 3--Improved Immunization Delivery and Monitoring Systems
``Part A--List of Vaccines and Administration
``SEC. 2141. LIST OF PEDIATRIC VACCINES; SCHEDULE FOR ADMINISTRATION.
``(a) Recommended Pediatric Vaccines.--
``(1) In general.--The Secretary shall establish a list of
the vaccines that the Secretary recommends for administration
to all children for the purpose of immunizing the children,
subject to such contraindications for particular medical
categories of children as the Secretary may establish under
subsection (b)(1)(D). The Secretary shall periodically review
the list, and shall revise the list as appropriate.
``(2) Rule of construction.--
``(A) The list of vaccines specified in
subparagraph (B) is deemed to be the list of vaccines
maintained under paragraph (1).
``(B) The list of vaccines specified in this
subparagraph is the list of vaccines that, for purposes
of paragraph (1), is established (and periodically
reviewed and as appropriate revised) by the Advisory
Committee on Immunization Practices, an advisory
committee established by the Secretary, acting through
the Director of the Centers for Disease Control and
Prevention.
``(b) Recommended Schedule for Administration.--
``(1) In general.--Subject to paragraph (2), in the case of
a pediatric vaccine, the Secretary shall establish (and
periodically review and as appropriate revise) a schedule of
nonbinding recommendations for the following:
``(A) The number of immunizations with the vaccine
that children should receive.
``(B) The ages at which children should receive the
immunizations.
``(C) The dose of vaccine that should be
administered in the immunizations.
``(D) Any contraindications regarding
administration of the vaccine.
``(E) Such other guidelines as the Secretary
determines to be appropriate with respect to
administering the vaccine to children.
``(2) Variations in medical practice.--In establishing and
revising a schedule under paragraph (1), the Secretary shall
ensure that, in the case of the pediatric vaccine involved, the
schedule provides for the full range of variations in medical
judgment regarding the administration of the vaccine, subject
to remaining within medical norms.
``(3) Rule of construction.--
``(A) The schedule specified in subparagraph (B) is
deemed to be the schedule maintained under paragraph
(1).
``(B) The schedule specified in this subparagraph
is the schedule that, for purposes of paragraph (1), is
established (and periodically reviewed and as
appropriate revised) by the advisory committee
specified in subsection (a)(2)(B).
``(c) Generally Applicable Rules of Construction.--This section
does not supersede any State law or requirements with respect to
receiving immunizations (including any such law relating to religious
exemptions or other exemptions under such State laws).
``(d) Issuance of List and Schedules.--Not later than 180 days
after the date of the enactment of this section, the Secretary shall
establish the initial list required in subsection (a) and the schedule
required in subsection (b).
``Part B--State Registry System for Immunization Information
``SEC. 2145. PURPOSE.
``It is the purpose of this part to authorize the Secretary, in
consultation with State public health officials, to establish State
registry systems to monitor the immunization status of all children.
``SEC. 2146. GRANTS FOR IMMUNIZATION REGISTRIES.
``(a) In general.--For the purpose described in section 2145, the
Secretary, acting through the Director of the Centers for Disease
Control and Prevention, shall make an allotment each fiscal year for
each State in an amount determined in accordance with section 2151. The
Secretary shall make a grant to the State of the allotment made for the
State for the fiscal year if the State submits to the Secretary an
application in accordance with section 2150 on behalf of the chief
executive officer of such State.
``(b) Design of State Registries.--To carry out the purpose
described in section 2145, a State registry established under this part
shall be designed to--
``(1) provide accurate and up to date surveillance data
regarding immunization rates at the State and local levels;
``(2) assist in identifying localities with inadequate
immunization rates to target for necessary remedial assistance;
``(3) assist in the effective administration and management
of immunization programs at State and local levels by providing
data to guide immunization program efforts;
``(4) assist the State in providing and receiving
information on the immunization status of children who move
across geographic boundaries that are covered by different
State or local registries; and
``(5) facilitate the linkage of vaccine dosage information
to adverse events reported to the Centers for Disease Control
and Prevention under section 2125(b) and disease outbreak
patterns, for the purpose of monitoring vaccine safety and
effectiveness.
``(c) Eligible Use of Funds.--The Secretary may make a grant under
subsection (a) only if the State agrees to expend the grant for the
purpose of--
``(1) collecting the data described in section 2147;
``(2) operating registries to maintain the data (and
establishing such registries, in the case of a State that is
not operating such a registry);
``(3) utilizing the data to monitor the extent to which
children have received immunizations in accordance with the
schedule established under section 2141;
``(4) notifying parents, as appropriate, if children have
not received immunizations in accordance with such schedule;
``(5) coordinating and exchanging information with other
State registries to allow the monitoring of the immunization
status of children changing State of residence; and
``(6) such other activities as the Secretary may authorize
with respect to achieving the objectives established by the
Secretary for the year 2000 for the immunization status of
children in the United States.
``(d) Requirement Regarding State Law.--
``(1) In general.--The Secretary may make a grant under
subsection (a) only if the State involved--
``(A) provides assurances satisfactory to the
Secretary that, not later than October 1, 1996, the
State will be operating a registry in accordance with
this part, including having in effect such laws and
regulations as may be necessary to so operate such a
registry; and
``(B) agrees that, prior to such date, the State
will make such efforts to operate a registry in
accordance with this part as may be authorized in the
law and regulations of the State.
``(2) Rules of construction.--
``(A) With respect to the agreements made by a
State under this part, other than paragraph (1)(B), the
Secretary may require compliance with the agreements
only to the extent consistent with such paragraph.
``(B) The provisions of this part do not authorize
the Secretary, as a condition of the receipt of a grant
under subsection (a) by a State, to prohibit the State
from providing any parent, upon the request of the
parent, with an exemption from the requirements
established by the State pursuant to this part for the
collection of data regarding any child of the parent.
``SEC. 2147. REGISTRY DATA.
``(a) In General.--For purposes of section 2146(c)(1), the data
described in this section are the data described in subsection (b) and
the data described in subsection (c).
``(b) Data Regarding Birth of Child.--With respect to the birth of
a child, the data described in this subsection is as follows:
``(1) The name of each child born in the State involved
after the date of the implementation of the registry (in no
event shall such date be later than October 1, 1996).
``(2) Demographic data on the child.
``(3) The name of one or both of the parents of the child.
If the child has been given up for adoption, any information
regarding the identity of the birth parent or parents of the
child may not be entered into the registry, or if entered,
shall be deleted.
``(4) The address, as of the date of the birth of the
child, of each parent whose name is received in the registry
pursuant to paragraph (3).
``(c) Data Regarding Individual Immunizations.--With respect to a
child to whom a pediatric vaccine is administered in the State
involved, the data described in this subsection is as follows:
``(1) The name, age, and address of the child.
``(2) The date on which the vaccine was administered to the
child.
``(3) The name and business address of the health care
provider that administered the vaccine.
``(4) The address of the facility at which the vaccine was
administered.
``(5) The name and address of one or both parents of the
child as of the date on which the vaccine was administered, if
such information is available to the health care provider.
``(6) The type of vaccine.
``(7) The lot number or other information identifying the
particular manufacturing batch of the vaccine.
``(8) The dose of vaccine that was administered.
``(9) A notation of the presence of any adverse medical
reactions that the child experienced in relation to the vaccine
and of which the health care provider is aware, in accordance
with section 2125.
``(10) The presence of contraindications noted by the
health care provider with respect to administration of the
vaccine to the child.
``(11) Such other data regarding immunizations for the
child, including identifying data, as the Secretary, in
consultation with State public health officials, may require
consistent with applicable law (including social security
account numbers furnished pursuant to section 205(c)(2)(E) of
the Social Security Act).
``(d) Limitation.--The Secretary may not establish information
reporting requirements in addition to those described in subsection (c)
if such requirements are unduly burdensome.
``(e) Date Certain for Submission to Registry.--The Secretary may
make a grant under section 2146 only if the State involved agrees to
ensure that, with respect to a child--
``(1) the data described in subsection (b) are submitted to
the registry under such section as soon as possible but in no
event later than 8 weeks after the date on which the child is
born; and
``(2) the data described in subsection (c) with respect to
a vaccine are submitted to such registry as soon as possible
but in no event later than 4 weeks after the date on which the
vaccine is administered to the child.
``(f) Uniformity in Methodologies.--The Secretary shall, in
consultation with State public health officials, establish standards
regarding the methodologies used in establishing and operating
registries under section 2146, and may make a grant under such section
only if the State agrees to comply with the standards. The Secretary
shall provide maximum flexibility to the States while also retaining a
reasonable degree of uniformity among the States in such methodologies
for the purpose of ensuring the utility, comparability, and exchange of
the data maintained in such registries.
``(g) Coordination Among States.--The Secretary may make a grant
under section 2146 to a State only if, with respect to the operation of
the registry of the State under such section, the State agrees to
transfer that information contained in the State registry pursuant to
section 2146 to other States upon the request of such States for such
information.
``SEC. 2148. FEDERAL STANDARDS ON CONFIDENTIALITY.
``(a) Establishment.--
``(1) In general.--The Secretary, in consultation with the
States, shall by regulation establish standards providing for
maintaining the confidentiality of the identity of individuals
with respect to whom data are maintained in registries under
section 2146. Such standards shall, with respect to a State,
provide that the State is to have in effect laws or regulations
regarding such confidentiality, including appropriate penalties
for violation of the laws. The Secretary may make a grant under
such section only if the State involved agrees to comply with
the standards.
``(2) Use of disclosure.--
``(A) No personally identifiable information
relating to a child or to the parent or guardian of
such child that is collected or maintained by the State
registry may be used or disclosed by any holder of such
information except as permitted for--
``(i) the monitoring of a child's
immunization status;
``(ii) oversight, audit, and evaluation of
the immunization delivery and registry systems;
``(iii) activities relating to establishing
and maintaining a safe and effective supply of
recommended childhood vaccine;
``(iv) processing of insurance claims for
payment for vaccine administration (but only to
the extent necessary for processing claims);
and
``(v) administration of the National
Vaccine Injury Compensation Program under
subtitle 2.
``(B) Information regarding immunizations provided
as described in subparagraph (A)(i) may be used or
disclosed only with the written authorization of the
individual to whom it refers or to the parent with
custody of such individual.
``(b) Use of Social Security Account Numbers.--Any usage or
disclosure of data in registries under section 2146 that consists of
social security account numbers and related information which is
otherwise permitted under this part may be exercised only to the extent
permitted under section 205(c)(2)(E) of the Social Security Act. For
purposes of the preceding sentence, the term `related information' has
the meaning given such term in clause (iv)(II) of such section.
``SEC. 2149. PROVIDER PARTICIPATION.
``(a) In General.--The State shall monitor and enforce compliance
by health care providers with the requirements of sections 2147 and
2148 and section 2155(b) for all doses of pediatric vaccine
administered in the State. The State shall establish procedures
satisfactory to the Secretary for discontinuing the distribution of
federally purchased or State purchased vaccine for any health care
provider who fails to comply with the requirements of section 2147 and
for reinstating such vaccine supply to such provider upon receiving
from such provider--
``(1) the reports necessary to make current and complete
the information that would have been furnished to the State
registry between the dates of the provider's termination and
reinstatement; and
``(2) satisfactory assurances regarding the provider's
future compliance.
``(b) Reports to Secretary.--The Secretary may make a grant under
section 2146 only if the State involved agrees to submit to the
Secretary such reports as the Secretary determines to be appropriate
with respect to the activities of the State under this part.
``SEC. 2150. APPLICATION FOR GRANT.
``An application by a State for a grant under section 2146 is in
accordance with this section if the application--
``(1) is submitted not later than the date specified by the
Secretary;
``(2) contains each agreement required in this part;
``(3) contains any information required in this part to be
submitted to the Secretary; and
``(4) is in such form, is made in such manner, and contains
such agreements, assurances, and information as the Secretary
determines to be necessary to carry out this part.
``SEC. 2151. DETERMINATION OF AMOUNT OF ALLOTMENT.
``The Secretary shall determine the amount of the allotments
required in section 2146 for States for a fiscal year in accordance
with a formula established by the Secretary that allots the amounts
appropriated under section 2152 for the fiscal year on the basis of the
costs of the States in establishing and operating registries under
section 2146.
``SEC. 2152. AUTHORIZATION OF APPROPRIATIONS.
``For the purpose of carrying out this part, other than section
2153, there are authorized to be appropriated $152,000,000 for fiscal
year 1994, $125,000,000 for fiscal year 1995, and $35,000,000 for each
of the fiscal years 1996 through 1999.
``SEC. 2153. NATIONAL IMMUNIZATION SURVEILLANCE PROGRAM.
``(a) In General.--The Secretary shall establish a national
immunization surveillance program for the purpose of assessing the
effects of the programs and activities provided for in this subtitle
towards appropriately immunizing children and facilitating State
immunization registries. The national immunization surveillance program
shall--
``(1) provide technical assistance to States for the
development of vaccination registries and monitoring systems;
and
``(2) receive aggregate epidemiologic data (that is in a
format that is not person specific) collected by States as
provided for in section 2147 at intervals determined
appropriate by the Secretary for the purpose of--
``(A) compiling accurate and up-to-date
surveillance data regarding immunization rates at the
State level in order to assess the progress made
towards achieving nationally established immunization
goals;
``(B) assisting in the effective administration and
management of immunization programs at the State level
by providing technical assistance to guide immunization
program efforts at the request of the State;
``(C) providing technical assistance to States and
localities to facilitate monitoring the immunization
status of children who move across geographic
boundaries that are covered by different State or local
registries at the request of such States or localities;
and
``(D) monitoring the safety and effectiveness of
vaccines by linking vaccine dosage information with
adverse events reporting under section 2125(b) and
disease outbreak patterns.
``(b) Rule of Construction.--Nothing in this subtitle shall be
construed to authorize the release of person specific information to
the Secretary for the purpose of immunization surveillance.
``(c) Authorization of Appropriations.--There are authorized to be
appropriated such sums as may be necessary to carry out this section in
each of the fiscal years 1994 through 1999.
``SEC. 2154. REPORT.
``Not later than January 1, 1995, and biennially thereafter, the
Secretary shall prepare and submit to the appropriate committees of
Congress a report concerning the planning, development, operation and
effectiveness of the national immunization surveillance program and the
State immunization registries.
``Part C--Distribution of Vaccines, Public Outreach and Education
``SEC. 2155. DISTRIBUTION OF VACCINES.
``(a) In General.--
``(1) Health care providers.--The Secretary shall provide
for the distribution, without charge, of recommended pediatric
vaccines (in accordance with section 2141) purchased by the
Secretary to health care providers who serve children and who--
``(A) are members of a uniformed service, or are
officers or employees of the United States;
``(B) are health centers (as defined in section
2162(2)); or
``(C) provide services under section 503 of the
Indian Health Care Improvement Act or pursuant to a
contract under section 102 of the Indian Self
Determination Act.
``(2) States.--The Secretary shall provide for the
distribution, without charge, of those recommended pediatric
vaccines that are purchased by the Secretary and provided to
States for the purposes of immunizing medicaid-eligible
children, and additional vaccines that may be purchased by the
Secretary for children within those States.
``(b) Duties of Health Care Providers.--
``(1) Free provision to children.--A health care provider
or entity receiving vaccine under this section may use such
vaccine only for administration to children and may not impose
a charge for such vaccine. A provider or health care entity may
impose a fee that reflects actual regional costs as determined
by the Secretary for the administration of such vaccine, except
that a provider may not deny a child a vaccination due to the
inability of the child's parent to pay an administration fee.
``(2) Reporting requirements.--A health care provider
receiving vaccine under this section shall report the
information required under section 2147 to the applicable State
registry operated pursuant to a grant under section 2146 if
such State registry exists. The provider shall additionally
report to such State registry any occurrence reported to the
Secretary pursuant to section 2125(b). The provider shall also
provide regular and periodic estimates to the State of the
provider's future dosage needs for recommended childhood
vaccines distributed under this section. All reports shall be
made with such frequency and in such detail as the Secretary,
in consultation with State public health officials, may
prescribe.
``SEC. 2156. IMPROVED IMMUNIZATION DELIVERY, OUTREACH AND EDUCATION.
``(a) Federal Efforts.--The Secretary, acting through the Centers
for Disease Control and Prevention and in conjunction with State health
officials and other appropriate public and private organizations, shall
conduct the following activities to improve Federal, State and local
vaccine delivery systems and immunization outreach and education
efforts:
``(1) National public awareness campaign.--
``(A) In general.--The Secretary, in conjunction
with State health officials and other appropriate
public and private organizations, shall develop and
implement a National Immunization Public Awareness
Campaign to assist families (through bilingual means if
necessary) of children under the age of 2 years, and
expectant parents, in obtaining knowledge concerning
the importance of having their children immunized and
in identifying the vaccines, schedules for
immunization, and vaccine provider locations,
appropriate with respect to their children.
``(B) Implementation.--In implementing the Campaign
under subparagraph (A), the Secretary shall ensure
that--
``(i) new and innovative methods are
developed and utilized to publicly advertise
the need to have children immunized in a timely
manner;
``(ii) print, radio and television media
are utilized to convey immunization information
to the public; and
``(iii) with respect to immunization
information, efforts are made to target
pregnant women and the parents of children
under the age of 2.
``(2) Interagency committee on immunization.--The
Secretary, in conjunction with the Secretary of Agriculture,
the Secretary of Housing and Urban Development, and the
Secretary of Education, shall carry out activities through the
Interagency Committee on Immunization to incorporate
immunization status assessments and referral services as an
integral part of the process by which individuals apply for
assistance under--
``(A) the food stamp program under the Food Stamp
Act of 1977;
``(B) section 17 of the Child Nutrition Act of
1966;
``(C) the Head Start Act;
``(D) part A of title IV of the Social Security
Act;
``(E) title XIX of the Social Security Act;
``(F) any of the housing assistance laws of the
United States; and
``(G) other programs determined appropriate by any
of the Secretaries described in this paragraph.
``(3) Expanded opportunity for national service.--The
Secretary, in conjunction with the Commission on National and
Community Service and other independent agencies, is encouraged
to develop opportunities for participants in national and
community service programs to contribute to local initiatives
for the improvement of immunization services, including public
outreach and education efforts.
``(b) Grants to States.--
``(1) In general.--
``(A) The Secretary may award grants to States to
enable such State to develop, revise and implement
immunization improvement plans as described in
paragraph (2).
``(B) To be eligible to receive a grant under
subparagraph (A), a State shall prepare and submit to
the Secretary an application at such time, in such
manner, and containing such information as the
Secretary may require.
``(2) Design.--A State immunization improvement plan shall
be designed to improve immunization delivery, outreach,
education and coordination within the State. Such plan shall
provide for the creation of--
``(A) a vaccine provider education campaign and the
distribution of any other materials determined to be
appropriate by State health officials--
``(i) to enable such providers to make the
best use of vaccination opportunities; and
``(ii) to educate such providers concerning
their obligation to report immunization
information with respect to their patients to
State registries;
``(B) expanded capacity for the delivery of
immunizations through--
``(i) increasing the number or type of
facilities through which vaccines may be made
available and the capacity of such facilities
to immunize more children;
``(ii) developing alternative methods of
delivering vaccines, such as mobile health
clinics;
``(iii) increasing the number of hours
during which vaccines are made available by
providers within the State; or
``(iv) coordinating with federally
qualified health centers to reach and immunize
underserved children through education,
outreach, tracking, and the provision of
services;
except that, the Secretary may waive any specific
requirement of this subparagraph if the Secretary
determines that State immunization delivery efforts are
sufficient without the imposition of such requirement;
``(C) population-based assessment criteria through
which the State is able to assess the effectiveness of
immunization activities in the State, which may be
fulfilled through the implementation of a State
immunization registry under section 2146;
``(D) a public awareness campaign, in conjunction
with the National Campaign established under subsection
(a)(1), to provide parents with information about the
importance of immunization, the types and schedules for
the administration of vaccines, and the locations of
vaccines providers;
``(E) coordinated community outreach activities
among public or private health programs, including
local health departments and health centers, and other
public or private entities, to encourage and facilitate
the ability of parents to obtain immunization services
for their children; and
``(F) other activities that are not inconsistent
with the purposes of this subtitle, subject to the
approval of the Secretary.
``(3) Immunization improvement plan approval.--
``(A) Goals.--As part of the immunization
improvement plan of a State, the State shall establish
immunization rate goals for children residing within
the State.
``(B) Approval.--The immunization improvement plan
developed by a State under this subsection shall be
submitted to the Secretary for approval prior to the
distribution of grant funds to the States under this
subsection. The Secretary shall periodically review the
progress that the State has made under such plan in
achieving the goals established under subparagraph (A).
``(C) Distribution of grants.--In awarding grants
under this section, the Secretary shall ensure that
grant awards will be equitably distributed between
rural and urban areas. In determining such
distribution, the Secretary shall take into account the
added costs of supporting the health care delivery
infrastructure in sparsely populated areas.
``(D) Reporting.--A State shall annually prepare
and submit to the Director of the Centers for Disease
Control and Prevention a report concerning the
implementation of the State immunization improvement
plan. If the Director or the Secretary, in reviewing
the reports submitted under this subparagraph determine
that the State has exceeded the goals established under
subparagraph (A), the Secretary may award a bonus to
the State in an amount not to exceed 5 percent of the
amount the State received under the grant for the
purposes of the grant.
``(c) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section, $250,000,000 for fiscal year
1994, and such sums as may be necessary for each of the fiscal years
1995 through 1999.
``Part D--General Provisions
``SEC. 2161. REPORT.
``Not later than October 1, 1995, and biennially thereafter, the
Secretary shall prepare and submit to the appropriate committees of
Congress a report concerning the costs, efficiency, and effectiveness
of procedures established to deliver vaccine to health care providers.
``SEC. 2162. NATIONAL VACCINE PROGRAM.
``The Secretary shall authorize a report to be prepared by the
National Academy of Sciences concerning the role of the National
Vaccine Program established under this title in achieving progress
towards the nationally established immunization goals for the year
2000, and recommendations with respect to the changes in such Program
that would facilitate greater progress towards achieving such goals.
``SEC. 2163. DEFINITIONS.
``For purposes of this subtitle--
``(1) Health care provider.--The term `health care
provider', with respect to the administration of vaccines to
children, means an entity that is licensed or otherwise
authorized for such administration under the law of the State
in which the entity administers the vaccine, subject to section
333(e).
``(2) Health center.--The term `health center' means--
``(A) a federally-qualified health center, as
defined in section 1905(l)(2) of the Social Security
Act; or
``(B) a public or nonprofit private entity
receiving Federal funds under--
``(i) section 329, 330 or 340;
``(ii) section 340A (relating to grants for
health services for residents of public
housing); or
``(iii) section 501(a)(2) of the Social
Security Act (relating to special projects of
regional and national significance).
``(3) Immunization.--The term `immunization' means an
immunization against a vaccine-preventable disease.
``(4) Parent.--The term `parent', with respect to a child,
means a legal guardian of the child.
``(5) Pediatric vaccine.--The term `pediatric vaccine'
means a vaccine included on the list established under section
2141.
``(6) State.--The term `State' means the 50 States, the
District of Columbia, the Commonwealth of Puerto Rico, Guam,
American Samoa, the U.S. Virgin Islands, the Republic of the
Marshall Islands, Micronesia, the Northern Mariana Islands, and
Palau.''.
SEC. 12203. NATIONAL VACCINE INJURY COMPENSATION PROGRAM AMENDMENTS.
(a) Amendment of Vaccine Injury Table.--
(1) Addition of vaccines.--Section 2114 (42 U.S.C. 300aa-
14) is amended by adding at the end thereof the following new
subsection:
``(f) Addition of Vaccines to Table.--
``(1) In general.--The Vaccine Injury table contained in
subsection (a) shall also include any recommended childhood
vaccine included in the list promulgated by the Secretary under
section 2141.
``(2) Review of information and revision.--Not later than 2
years after the addition of a new vaccine to the table
contained in subsection (a), and on a regular basis thereafter,
the Secretary shall review information obtained under sections
2125 and part B of subtitle 3, and based on such review (and
other relevant information) shall, as appropriate, develop with
respect to such new vaccine--
``(A) revisions with respect to illnesses,
disabilities, injuries or conditions covered by such
table;
``(B) appropriate specifications of the time period
for the first symptom or manifestation of onset or of
significant aggravation of such illnesses,
disabilities, injuries or condition after vaccine
administration, for purposes of receiving compensation
under the Program; and
``(C) recommendations as to the amount of tax that
should be imposed under section 4131 of the Internal
Revenue Code of 1986 for each dose of vaccine.
``(3) Limitation.--The Secretary may modify the table
contained in subsection (a) pursuant to paragraphs (1) and (2)
only in accordance with subsection (c).
``(4) Revision.--For purposes of section 2116(b), the
addition of vaccine to the table contained in subsection (a) by
operation of this subsection shall constitute a revision of the
table.''.
(2) Attorneys fees.--Section 2115(e) (42 U.S.C. 300aa-
15(e)) is amended by adding at the end thereof the following
new paragraph:
``(4) The special master may award reasonable attorneys
fees whether or not an election has been made under section
2121(a) to file a civil action concerning such petition.''.
(3) Consent for annuity.--Subparagraphs (A) and (B) of
section 2115(f)(4) are amended by striking ``, with the consent
of the petitioner,'' each place that such appears.
(4) Time periods for fees and costs.--
(A) In general.--Section 2115(e) (42 U.S.C. 300aa-
15(e)) (as amended by paragraph (3)) is further amended
by adding at the end thereof the following new
paragraph:
``(5) With respect to a petitioners' application for
attorneys' fees and costs--
``(A) if the respondent enters no objection to such
application within 21 days of the date on which the
application was filed (unless such time period is
extended by the special master with the consent of the
petitioner) the special master shall enter a decision
on such application within 30 days of such filing;
``(B) if the respondent files an objection to such
application and the special master does not enter a
decision with respect to the application within 60 days
after the date on which the objection is filed, the
special master involved shall, upon the written request
of the petitioner, enter a decision within 15 days
after the filing of such request; and
``(C) if the respondent files an objection to such
application and the petitioner moves to reduce costs
and fees as provided for in the objection, the special
master shall enter a decision within 5 days after the
receipt of the petitioner's motion.
The chief special master, upon the request of a special master,
may waive the time limitations applicable to the special master
under this paragraph if the special master demonstrates that
complicating factors exist with respect to the issues involved
to which the time limitation applies.''.
(B) Application.--The amendment made by
subparagraph (A) shall apply to all petitioners'
applications for attorneys' fees and costs filed under
section 2115(e) of the Public Health Service Act which
are pending on the date of enactment of this Act.
(5) Authorization of appropriations.--Section 2115(j) (42
U.S.C. 300aa-15(j)) is amended by striking ``$80,000,000 for
each succeeding fiscal year'' and inserting in lieu thereof
``$110,000,000 for each succeeding fiscal year''.
(6) Limitation of actions.--Section 2116(b) (42 U.S.C.
300aa-16(b)) is amended by striking ``such person may file''
and inserting ``or to significantly increase the likelihood of
obtaining compensation, such person may, notwithstanding
section 2111(b)(2), file''.
(b) Extension of Time for Decision.--
(1) Jurisdiction.--Section 2112(d)(3)(D) (42 U.S.C. 300aa-
12(d)(3)(D)) is amended by striking ``540 days'' and inserting
``30 months (but for not more than 6 months at a time)''.
(2) Report on collections.--Section 2117 (42 U.S.C. 300aa-
17) is amended by adding at the end thereof the following new
subsection:
``(c) Report.--The Attorney General shall, on January 1 of each
year, prepare and submit to the appropriate committees of Congress a
report concerning amounts collected under this section.''.
(3) Increased responsibilities of commission.--Section
2119(f) (42 U.S.C. 300aa-19(f)) is amended--
(A) by striking ``and'' at the end of paragraph
(4);
(B) by striking the period at the end of paragraph
(5) and inserting ``, and''; and
(C) by adding at the end thereof the following new
paragraph:
``(6) monitor the balance of the Vaccine Injury Trust Fund
established by section 9510 of the Internal Revenue Code and,
as appropriate, recommend changes in the tax per dose of
vaccine imposed under section 4131 of such Code.''.
(c) Simplification of Vaccine Information Materials.--
(1) Information.--Section 2126(b) (42 U.S.C. 300aa-26(b))
is amended--
(A) by striking ``by rule'' in the matter preceding
paragraph (1);
(B) in paragraph (1), by striking ``90'' and
inserting ``30''; and
(C) in paragraph (2), by striking ``, appropriate
health care providers and parent organizations''.
(2) Requirements.--Section 2126(c) (42 U.S.C. 300aa-26(c))
is amended--
(A) in the matter preceding paragraph (1), by
inserting ``shall be based on available data and
information,'' after ``such materials''; and
(B) by striking out paragraphs (1) through (10) and
inserting in lieu thereof the following new paragraphs:
``(1) a concise description of the benefits of the vaccine;
``(2) a concise description of the risks associated with
the vaccine;
``(3) a statement of the availability of the National
Vaccine Injury Compensation Program;
``(4) a statement of the availability from the Secretary of
more detailed written information concerning the information
required under paragraphs (1), (2), and (3), that shall be made
available to the parent, legal guardian, or other responsible
person upon request; and
``(5) such other relevant information as determined
appropriate by the Secretary.''.
(3) Other individuals.--Subsections (a) and (d) of section
2126 (42 U.S.C. 300aa-26(a) and (d)) are amended by inserting
``or to any other individual'' immediately after ``to the legal
representative of any child'' each place that such occurs.
(4) Provider duties.--Subsection (d) of section 2126 (42
U.S.C. 300aa-26(d)) is amended--
(A) by striking all after ``subsection (a),'' the
second place it appears in the first sentence and
inserting ``supplemented with visual presentations or
oral explanations, in appropriate cases.''; and
(B) by striking ``or other information'' in the
last sentence.
(d) Authorization of Appropriations.--Part A of subtitle 2 of title
XXI (42 U.S.C. 300aa-10 et seq.) is amended by adding at the end
thereof the following new section:
``authorization of appropriations
``Sec. 2120. (a) Secretary.--For purposes of administering this
part, there are authorized to be appropriated from the Vaccine Injury
Compensation Trust Fund established under section 9510(c) of the
Internal Revenue Code of 1986, to the Secretary, $3,000,000 for each of
the fiscal years 1994, 1995 and 1996.
``(b) Attorney General.--For purposes of administering this part,
there are authorized to be appropriated from the Vaccine Injury
Compensation Trust Fund described in subsection (a), to the Attorney
General, $3,000,000 for each of the fiscal years 1994, 1995 and 1996.
``(c) Court of Federal Claims.--For purposes of administering this
part, there are authorized to be appropriated from the Vaccine Injury
Compensation Trust Fund described in subsection (a), to the Court of
Federal Claims, $3,000,000 for each of the fiscal years 1994, 1995 and
1996.''.
SEC. 12204. MISCELLANEOUS PROVISIONS.
Section 317(k) (42 U.S.C. 247b(k)) is amended--
(1) by striking out paragraph (1); and
(2) by redesignating paragraphs (2) through (5) as
paragraphs (1) and (4), respectively.
SEC. 12205. PERFORMANCE BASED GRANT PROGRAM.
(a) Annual Report.--Not later than July 1 of each year, a State
shall prepare and submit to the Director of the Center for Disease
Control and Prevention a report that contains an estimate (based on a
base population sample) of the percentage of 2 year old residents of
the State who have been fully immunized as described in subsection (c).
(b) Payments to States.--
(1) In general.--Subject to the availability of
appropriations, the Secretary of Health and Human Services
shall provide to a State that has submitted an annual report
under subsection (a) that demonstrates that the State has fully
immunized at least 50 percent of the 2 year old residents of
that State, with respect to the year for which the report was
prepared, a payment in an amount equal to--
(A) with respect to a State that has demonstrated
the full immunization of at least 50 and less than 65
percent of all 2 year old residents of the State, $50
multiplied by the number of fully immunized 2 year old
resident children in excess of the number of children
equaling such 50 percent amount;
(B) with respect to a State that has demonstrated
the full immunization of at least 65 and less than 70
percent of all 2 year old residents of the State, $75
multiplied by the number of fully immunized 2 year old
resident children in excess of the number of children
equaling such 65 percent amount; and
(C) with respect to a State that has demonstrated
the full immunization of at least 70 and less than 91
percent of all 2 year old residents of the State, $100
multiplied by the number of fully immunized 2 year old
resident children in excess of the number of children
equaling such 70 percent amount.
(2) As a condition of receiving amounts under this
section--
(i) States which combine State and Federal funds to
reach immunization goals shall agree to reinvest in
activities related to improving immunization services
that percentage of the payment under subsection (b)(1)
which is equal to the Federal contribution to
immunization services in the State proportional to the
State contribution to such services.
(ii) States which verify that State-only funds are
responsible for the increase in immunization rates that
qualifies such State for payment under subsection
(b)(1) may use amounts awarded under this section for
other purposes at the State's discretion.
(3) Verification.--Prior to making a payment to a State
under this subsection, the Secretary of Health and Human
Services shall, in collaboration with the Centers for Disease
Control and Prevention, verify the accuracy of the State report
involved.
(c) Definition.--For purposes of this section, the term ``fully
immunized'' means a 2 year old child that has received four doses of
DTP vaccine (diphtheria, tetanus, pertussis), three doses of polio
vaccine, and one dose of MMR (measles, mumps, rubella) vaccine.
Subtitle D--ERISA Amendments
CHAPTER 1--GROUP HEALTH AMENDMENTS
SEC. 12301. COORDINATION OF ERISA PREEMPTION RULES WITH SOCIAL SECURITY
ACT PROVISIONS PROVIDING FOR LIABILITY OF THIRD PARTIES
AND CHILD HEALTH INSURANCE SUPPORT ENFORCEMENT.
(a) In General.--Paragraph (8) of section 514(b) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1144(b)(8)) is
amended to read as follows:
``(8)(A) Subsection (a) of this section shall not apply to any
State law to the extent necessary to permit the State to comply with
the following requirements for the receipt of Federal financial
assistance under title XIX of the Social Security Act:
``(i) subparagraphs (A), (B), and (I) of section
1902(a)(25) of such Act (relating to third-party liability) and
section 1903(o) of such Act (relating to medicaid as secondary
payor), as in effect on October 1, 1993; and
``(ii) sections 1902(a)(60) and 1908 of such Act (relating
to assignment of rights of payment and child health insurance
support), as in effect on the date of the enactment of the
Omnibus Budget Reconciliation Act of 1993.
``(B) Paragraph (2)(B) shall not apply to any State law to the
extent necessary to permit the compliance of the State with any of the
requirements described in subparagraph (A).''.
(b) Effective Date.--The amendment made by subsection (a) shall
take effect October 1, 1993.
SEC. 12302. CONTINUED COVERAGE OF COSTS OF A PEDIATRIC VACCINE UNDER
GROUP HEALTH PLANS.
(a) In General.--Part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1161 et seq.) is
amended by adding at the end the following new section:
``SEC. 609. CONTINUED COVERAGE OF COSTS OF A PEDIATRIC VACCINE UNDER
GROUP HEALTH PLANS.
``A group health plan may not reduce its coverage of the costs of
pediatric vaccines (as defined under section 2162 of the Public Health
Service Act) below the coverage it provided as of May 1, 1993.''.
(b) Conforming Amendment.--The table of contents in section 1 of
such Act is amended by adding after the item relating to section 608
the following new item:
``Sec. 609. Continued coverage of costs of a pediatric vaccine under
group health plans.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to plan years beginning after the date of the
enactment of this Act.
CHAPTER 3--PUBLIC HEALTH SERVICE ACT
SEC. 12321. PROHIBITION ON REDUCTION IN COVERAGE OF PEDIATRIC VACCINE.
Part D of subtitle 2 of title XXI of the Public Health Service Act
(42 U.S.C. 300aa-31 et seq.) is amended by adding at the end thereof
the following new section:
``SEC. 2135. PROHIBITION ON REDUCTION IN COVERAGE OF PEDIATRIC VACCINE.
``(a) In General.--Notwithstanding any other provision of law, a
health insurance policy in effect prior to May 1, 1993, may not reduce
the level of coverage for the costs of pediatric vaccines below the
level of coverage provided on the date of enactment of this section.
``(b) Civil Money Penalty.--
``(1) In general.--An entity that fails to comply with
subsection (a) shall be subject, in addition to any other
penalties that may be prescribed by law, to a civil money
penalty of not to exceed $1,000 for each individual with
respect to whom such a failure occurs.
``(2) Enforcement.--With respect to an entity that offers a
health insurance policy in violation of subsection (a), the
provisions of section 353(h)(3), regarding procedures for the
imposition of civil money penalties developed by the Secretary,
shall apply in the same manner as such provisions apply to
penalties or proceedings under section 353.
``(c) Definitions.--As used in this section:
``(1) Health insurance policy.--The term `health insurance
policy' has the same meaning given the term `employee welfare
benefit plan' in section 3(1) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1002(1)) and includes any other
policy or plan which provides coverage for the provision of
health care services (including a health maintenance
organization agreement).
``(2) Pediatric vaccines.--The term `pediatric vaccines'
has the same meaning given such term in section 2163.''.
TITLE XIII--VETERANS' PROGRAMS
SEC. 13001. PERMANENT EXTENSION OF LIMITATION ON PENSION FOR CERTAIN
RECIPIENTS OF MEDICAID-COVERED NURSING HOME CARE.
Section 5503(f) of title 38, United States Code, is amended by
striking out paragraph (7).
SEC. 13002. POLICY REGARDING COST-OF-LIVING ADJUSTMENT IN COMPENSATION
RATES.
The fiscal year 1994 cost-of-living adjustments in the rates of and
limitations for compensation payable under chapter 11 of title 38,
United States Code, and of dependency and indemnity compensation
payable under chapter 13 of such title will be no more than a
percentage equal to the percentage by which benefit amounts payable
under title II of the Social Security Act (42 U.S.C. 401 et seq.) are
increased effective December 1, 1993, as a result of a determination
under section 215(i) of such Act (42 U.S.C. 415(i)), with all increased
monthly rates and limitations (other than increased rates or
limitations equal to a whole dollar amount) rounded down to the next
lower dollar. The effective date of such adjustments shall not be
earlier than December 4, 1993.
SEC. 13003. REDUCTION IN BASIC PAY AND INCENTIVES OF MONTGOMERY GI BILL
PARTICIPANTS.
(a) Active Duty.--Section 3011(b) of title 38, United States Code,
is amended--
(1) by inserting ``(1)'' after ``(b)'';
(2) by designating the second sentence as paragraph (2);
and
(3) in paragraph (1), as so designated, by striking out
``shall be reduced by'' and all that follows through the period
and inserting in lieu thereof ``shall be reduced by--
``(A) in the case of an individual who first enters on
active duty before October 1, 1993, $100 for each of the first
12 months that such individual is entitled to such pay;
``(B) in the case of an individual who first enters on
active duty during the fiscal year beginning on October 1,
1993, $137 for each of the first 12 months that such individual
is entitled to such pay; and
``(C) in the case of an individual who first enters on
active duty during any fiscal year beginning after September
30, 1994, an amount for each of the first 12 months that such
individual is entitled to such pay that is equal to the amount
of the monthly pay reduction of an individual under this
paragraph during the previous fiscal year increased by the same
percentage, if any, as the percentage by which monthly rates of
educational assistance are increased for such fiscal year under
section 3015(g)(3) of this title.''.
(b) Selected Reserve.--Section 3012(c) of such title is amended--
(1) by inserting ``(1)'' after ``(c)'';
(2) by designating the second sentence as paragraph (2);
and
(3) in paragraph (1), as so designated, by striking out
``shall be reduced by'' and all that follows through the period
and inserting in lieu thereof ``shall be reduced by--
``(A) in the case of an individual who first enters on
active duty before October 1, 1993, $100 for each of the first
12 months that such individual is entitled to such pay;
``(B) in the case of an individual who first enters on
active duty during the fiscal year beginning on October 1,
1993, $137 for each of the first 12 months that such individual
is entitled to such pay; and
``(C) in the case of an individual who first enters on
active duty during any fiscal year beginning after September
30, 1994, an amount for each of the first 12 months that such
individual is entitled to such pay that is equal to the amount
of the monthly pay reduction of an individual under this
paragraph during the previous fiscal year increased by the same
percentage, if any, as the percentage by which monthly rates of
educational assistance are increased for such fiscal year under
section 3015(g)(3) of this title.''.
(c) Enrollment Before Involuntary Separation.--Section 3018A(b) of
such title is amended by striking out ``$1,200'' and inserting in lieu
thereof ``an amount equal to 12 times the amount of the monthly pay
reduction determined for the individual in accordance with section
3011(b)(1) or section 3012(c)(1) of this title. For the purposes of
such determination, the date of the individual's election to receive
assistance under subsection (a)(5) shall be considered the date that
the individual first enters on active duty.''.
(d) Enrollment by Voluntary Separation Incentive Recipients.--
Section 3018B(b)(1) of such title is amended by striking out ``$1,200''
and inserting in lieu thereof ``an amount equal to 12 times the amount
of the monthly pay reduction determined for the individual in
accordance with section 3011(b)(1) or section 3012(c)(1) of this title.
For the purposes of such determination, the date of the individual's
election to receive assistance under subsection (a)(1)(E) shall be
considered the date that the individual first enters on active duty.''.
SEC. 13004. PERMANENT EXTENSION OF PROCEDURES APPLICABLE TO LIQUIDATION
SALES UPON DEFAULT OF HOME LOANS GUARANTEED BY THE
DEPARTMENT OF VETERANS AFFAIRS.
(a) Inclusion of Resale Losses in Net-Value Calculation.--Paragraph
(1)(C) of section 3732(c) of title 38, United States Code, is amended
by inserting ``(including losses sustained on the resale of the
property)'' after ``resale''.
(b) Permanent Extension of Authority.--Paragraph (11) of such
section is repealed.
SEC. 13005. INCREASE IN CERTAIN LOAN FEES.
(a) Fee Increase.--Paragraph (2) of section 3729(a) of title 38,
United States Code, is amended--
(1) in the matter above subparagraph (A), by striking out
``1.25 percent'' and inserting in lieu thereof ``2 percent'';
(2) in subparagraph (A), by striking out ``one percent''
and inserting in lieu thereof ``1 percent'';
(3) in subparagraph (B), by striking out ``0.75 percent''
and inserting in lieu thereof ``1.50 percent'';
(4) in subparagraph (C), by striking out ``0.50 percent''
and inserting in lieu thereof ``1.25 percent''; and
(5) in subparagraph (D)--
(i) by striking out ``two percent'' in clause (i)
and inserting in lieu thereof ``2.75 percent'';
(ii) by striking out ``one percent'' in clause (ii)
and inserting in lieu thereof ``1 percent'';
(iii) by striking out ``1.50 percent'' in clause
(iii)(I) and inserting in lieu thereof ``2.25
percent''; and
(iv) by striking out ``1.25 percent'' in clause
(iii)(II) and inserting in lieu thereof ``2 percent''.
(b) Fee for Manufactured Homes.--Such paragraph is further
amended--
(1) in subparagraph (A), by striking out ``or for any
purpose specified in section 3712 of this title (other than
section 3712(a)(1)(F))'';
(2) by striking out ``and'' at the end of subparagraph (D);
(3) by striking out the period at the end of subparagraph
(E) and inserting in lieu thereof ``; and''; and
(4) by adding at the end the following:
``(F) in the case of a loan made for any purpose specified
in section 3712 of this title (other than subsection (a)(1)(F)
of such section), the amount of such fee shall be one percent
of the total loan amount.''.
(c) Repeal of Temporary Increase in Fees.--Such section is further
amended--
(1) in paragraph (2), by striking out ``Except as provided
in paragraph (6) of this subsection, the'' in the matter above
subparagraph (A) and inserting in lieu thereof ``The''; and
(2) by striking out paragraph (6).
SEC. 13006. PERMANENT EXTENSION OF MEDICAL CARE COST RECOVERY
AUTHORITY.
Section 1729(a)(2)(E) of title 38, United States Code, is amended
by striking out ``before August 1, 1994,''.
SEC. 13007. PERMANENT EXTENSION OF REQUIREMENT THAT CERTAIN VETERANS
MAKE COPAYMENTS FOR HEALTH-CARE SERVICES.
(a) Medication Copayment Requirement.--Section 1722A of title 38,
United States Code, is amended by striking out subsection (c).
(b) Health-Care Categories and Copayments.--Section 8013 of the
Omnibus Budget Reconciliation Act of 1990 (38 U.S.C. 1710 note) is
amended by striking out subsection (e).
SEC. 13008. PERMANENT AUTHORITY TO VERIFY INCOME ELIGIBILITY FOR NEED-
BASED BENEFITS.
(a) Authority for Secretary of Veterans Affairs To Obtain
Information.--Section 5317 of title 38, United States Code, is amended
by striking out subsection (g).
(b) Authority for Secretary of Treasury to Provide Information.--
Section 6103(l)(7)(D) of the Internal Revenue Code of 1986 is amended
by striking out the last sentence.
TITLE XIV--ENFORCEMENT PROCEDURES
Part A--Extension of Budget Enforcement
SEC. 14001. PURPOSE.
The Congress declares that it is essential to--
(1) preserve the deficit reduction achieved by this Act;
(2) extend the system of discretionary spending limits for
the single discretionary category set forth in section 601 of
the Congressional Budget Act of 1974;
(3) extend the pay-as-you-go enforcement system; and
(4) prohibit the consideration of direct spending or
receipts legislation that would decrease the pay-as-you-go
surplus achieved by this Act and created under section 252 of
the Balanced Budget and Emergency Deficit Control Act of 1985.
SEC. 14002. DISCRETIONARY SPENDING LIMITS.
(a) Definition of ``Discretionary Spending Limit''.--Section
601(a)(2) of the Congressional Budget Act of 1974 is amended--
(1) in subparagraph (D) by striking the word ``and''; and
(2) by inserting after subparagraph (E) the following:
``and
``(F) with respect to fiscal years 1996, 1997, and
1998, for the discretionary category, the amounts set
forth for those years in section 12(b)(1) of House
Concurrent Resolution 64 (One Hundred Third
Congress);''.
(b) Point of Order in the Senate.--Section 601(b)(1) of the
Congressional Budget Act of 1974 is amended to read as follows:
``(1) Except as otherwise provided in this subsection, it
shall not be in order in the Senate to consider any concurrent
resolution on the budget for fiscal year 1995, 1996, 1997, or
1998 (or amendment, motion, or conference report on such a
resolution) that would exceed any of the discretionary spending
limits in this section.''.
(c) Conforming Amendments.--(1) Section 251 of the Balanced Budget
and Emergency Deficit Control Act of 1985 is amended--
(A) in subsection (a) by striking ``Fiscal Years 1991-1995
Enforcement.--'' and inserting ``Fiscal years 1991-1998
Enforcement.--``;
(B) in subsection (b)(1)--
(i) in the matter before subparagraph (A), by--
(I) striking ``When the President submits
the budget under section 1105(a) of title 31,
United States Code, for budget year 1992, 1993,
1994, or 1995'' and inserting ``When the
President submits the budget under section
1105(a) of title 31, United States Code, for
budget year 1992, 1993, 1994, 1995, 1996, 1997,
or 1998''; and
(II) striking ``the budget shall include,
adjustments to discretionary spending limits
(and those limits as cumulatively adjusted) for
the budget year and each outyear through 1995''
and inserting ``the budget shall include,
adjustments to discretionary spending limits
(and those limits as cumulatively adjusted) for
the budget year and each outyear through
1998'';
(ii) in paragraph (1)(B), by inserting at the end
thereof the following new clause:
``(iii) For a budget submitted for budget
year 1996, 1997, or 1998, the adjustments shall
be those necessary to reflect changes in
inflation estimates since those of March 31,
1993, set forth on page 46 of House Conference
Report 103-48.'';
(iii) in the matter before subparagraph (A) in
paragraph (2) by--
(I) striking ``When OMB submits a
sequestration report under section 254 (g) or
(h) for fiscal year 1991, 1992, 1993, 1994, or
1995'' and inserting ``When OMB submits a
sequestration report under section 254 (g) or
(h) for fiscal year 1991, 1992, 1993, 1994,
1995, 1996, 1997, or 1998''; and
(II) striking ``for the fiscal year and
each succeeding year through 1995,'' and
inserting ``for the fiscal year and each
succeeding year through 1998,'';
(iv) in paragraph (2)(D)(i), by striking ``for
fiscal year 1991, 1992, 1993, 1994, or 1995,'' and
inserting ``for any fiscal year,'';
(v) in paragraph (2)(E), by--
(I) striking the final word ``and'' in
subparagraph (ii); and
(II) inserting before the final period the
following:
``; and
``(iv) if, for fiscal years 1994, 1995,
1996, 1997, and 1998, the amount of new budget
authority provided in appropriation Acts
exceeds the discretionary spending limit on new
budget authority due to technical estimates
made by the director of the Office of
Management and Budget, the adjustment is the
amount of the excess, but not to exceed an
amount (for any one fiscal year) equal to 0.1
percent of the adjusted descretionary spending
limit on new budget authority for that fiscal
year''; and
(vi) in paragraph (2)(F), by inserting immediately
before the final period the following: ``, and not to
exceed 0.5 percent of the adjusted descretionary
spending limit on outlays for the fiscal year in fiscal
year 1996, 1997, or 1998''.
(2) Reports.--Sections 254(d)(2) and 254(g)(2)(A) of the Balanced
Budget and Emergency Deficit Control Act of 1985 are each amended by
striking ``1995'' and inserting ``1998''.
(3) Expiration.--(A) Notwithstanding section 275(b) of the Balanced
Budget and Emergency Deficit Control Act of 1985, sections 250, 251,
252, and 254 through 258C of that Act shall expire on September 30,
1998.
(B) Section 607 of the Congressional Budget Act of 1974 is amended
by striking ``shall apply to fiscal years 1991 to 1995'' and inserting
``shall apply to fiscal years 1991 to 1998''.
SEC. 14003. ENFORCING PAY-AS-YOU-GO.
(a) Section 252 of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended--
(1) in subsection (a), by striking ``Fiscal Year 1992-1995
Enforcement.'' and inserting ``Fiscal Year 1992-1998
Enforcement.'';
(2) in subsection (d), by striking ``estimate of the amount
of change in outlays or receipts, as the case may be, in each
fiscal year through fiscal year 1995'' both places that it
appears and inserting ``estimate of the amount of change in
outlays or receipts, as the case may be, in each fiscal year
through fiscal year 1998'' both places; and
(3) in subsection (e), by striking ``for fiscal year 1991,
1992, 1993, 1994, or 1995,'' and inserting ``for any fiscal
year from 1991 through 1998,''.
(b) Section 254(g)(3) of the Balanced Budget and Emergency Deficit
Control Act of 1985 is amended by striking ``1995'' and inserting
``1998''.
(c) Upon enactment of this Act, the director of the Office of
Management and Budget shall reduce the balances of direct spending and
receipts legislation applicable to each fiscal year under section 252
of the Balanced Budget and Emergency Deficit Control Act of 1985 by an
amount equal to the net deficit reduction achieved through the
enactment in this Act of direct spending and receipts legislation for
that year.
SEC. 14004. EXERCISE OF RULE-MAKING POWERS.
The Congress enacts the provisions of this part--
(1) as an exercise of the rule-making power of the Senate
and the House of Representatives, respectively, and as such
these provisions shall be considered as part of the rules of
each House, respectively, or of that House to which they
specifically apply, and such rules shall supersede other rules
only to the extent that they are inconsistent therewith; and
(2) with full recognition of the constitutional right of
either House to change such rules (so far as relating to such
House) at any time, in the same manner, and to the same extent
as in the case of any other rule of such House.
TITLE XV--MISCELLANOUS PROVISIONS
SEC. 15001. SENSE OF THE SENATE WITH RESPECT TO FEDERAL ENTERPRISE
ZONES AND RURAL DEVELOPMENT INVESTMENT ZONES.
(a) Findings.--The Senate finds that--
(1) the crises of poverty, high unemployment, out-
migration, and job loss in America's inner-cities, rural areas
and Indian reservations demands an appropriate and timely
response from Congress;
(2) manufacturing and industry has largely disappeared from
many United States inner cities and rural areas. This, in turn,
has led to the severe decline in good high-wage jobs, wholesale
trade, retail businesses, and a large source of local tax
revenues;
(3) encouraging small and medium-sized businesses, which
create the majority of new jobs in the United States economy,
to locate and invest in poor areas is one of the keys to
revitalizing urban and rural America;
(4) Enterprise Zones will help attract businesses to build
and grow in poor areas; they will give people incentives to
invest in such businesses and to hire and train both unemployed
and economically disadvantaged individuals; they will create
jobs and stimulate entrepreneurship; and they will help restore
the local tax revenue base to these communities;
(5) the decline of small industry in rural areas has caused
thousands of people to leave such areas, thus hastening the
decay of rural communities and leaving the elderly in
particular stranded without the help of family and younger
neighbors;
(6) Enterprise Zones have been tested in 37 States since
1982 and have proven to be successful, having generated capital
investments in poor neighborhoods in excess of $28,000,000,000
and having created more than 258,000 jobs; and
(7) Enterprise Zones have been endorsed by, among others,
the National Governors Association, the National Council of
State Legislators, the Council of Black State Legislators, the
Conference of Mayors, and the Conference of Black Mayors.
(b) Definitions.--
(1) The term ``Enterprise Zone'' means any economically
distressed urban area, rural area, or Indian reservation
designated by the Secretaries of Housing and Urban Development,
Agriculture or Interior for special regulatory and tax
treatment, and for the targeting of Federal, State, and local
programs for the purposes of providing economic revitalization,
economic development, and job creation;
(2) The term ``empowerment zone'' means any designated
enterprise zone which is designated to receive the full package
of regulatory and tax relief and targeted programs as provided
for by the enterprise zone program; and
(3) The term ``enterprise community'' means any area
eligible for enterprise zone designation and ultimately
designated by the Secretaries of Housing and Urban Development,
Agriculture, or the Interior but does not receive the full
package regulatory relief, tax relief and targeted programs.
(c) Sense of the Senate.--It is the Sense of the Senate that--
(1) enterprise zones are a vital, proven tool for inner-
city, rural, and Indian reservation revitalization and that
Congress should adopt Federal enterprise zone legislation;
(2) to insure cooperation and coordination among Federal
agencies and to provide targeted regulatory relief, such
legislation shall include the establishment of an Enterprise
Board to development the selection criteria and to waive any
provision of Federal law or regulation administered by the
Secretary of the Department's of Housing and Urban Development,
Agriculture, Health and Human Services, Labor, or Education, if
the Board determines the waiver is necessary for achievement of
the comprehensive strategic plan of an enterprise zone;
(3) to adequately and substantially address the crisis in
urban and rural America, such legislation shall include at
least 75 empowerment zones; and
(4) each empowerment zone shall include each of the
following provisions:
(A) Enterprise Grants for implementing local
coordinated strategic plans such as:
(i) creating new, coordinated delivery
systems for relevant government services;
(ii) creating community lending or micro-
enterprise loan funds;
(iii) providing technical assistance,
entrepreneurial support, workforce skill
programs, and job-search and job matching
networks in the labor market;
(iv) leveraging private matching support;
and
(v) matching funds for community
development corporations;
(B) Community Policing Grants to increase police
presence, expand cooperative efforts between law
enforcement and the community, and to assure public
safety;
(C) Innovative programs and zone priority
investments of existing Federal agency funds targeted
towards empowerment zones;
(D) Tax incentives aimed at reducing both capital
and labor costs associated with operation of a business
in an empowerment zone;
(E) Tax incentives aimed at attracting equity
investments, including venture and seed capital, in
start-up or small enterprise zone businesses; and
(F) Tax incentives to encourage the hiring and
training of economically disadvantaged individuals;
(5) Because the migration of jobs from rural areas has
caused many families to migrate too, the indications of
distress are different for rural than for urban areas.
Specifically, in determining whether a rural area is eligible
for an enterprise zone, the factors shall include job loss and
out-migration, rather than just the poverty rate, which is an
appropriate factor for urban areas.
SEC. 15002. AMERICAN CITIZENS ANNUAL REPORT ACT.
(a) Short Title.--This section may be cited as the ``American
Citizens Annual Report Act''.
(b) Findings and Purposes.--
(1) Findings.--The Congress makes the following findings:
(A) Publicly owned corporations provide
shareholders with an annual report on the financial
status of the corporation.
(B) Americans are entitled to an annual report on
the financial status of the Federal Government, as all
citizens share an interest in the financial well-being
of our Federal Government. Accurate, consistent, and
broadly distributed reporting on the Nation's finances
are central to the conduct of democracy.
(C) Recent Federal budget deficits have resulted in
more than a tripling of the Federal debt. With
prospects for enormous Federal budget deficits for the
next several years, the debt is a burden that affects
the present and future generations of Americans.
(D) The actual financial performance of the Federal
Government often differs from the budget by tens, even
hundreds, of billions of dollars. For example, the
fiscal year 1991 budget was to result in a deficit of
$63,000,000,000. Instead, the actual deficit for the
year was $268,700,000,000.
(E) The Chief Financial Officers Act is leading
agencies to develop reliable and relevant financial
information that is to be useful to the public,
including audited financial statements.
(F) The Federal Government continues to lose
billions of dollars each year through fraud, waste,
abuse, and mismanagement. Standardized reporting to the
public is essential to the improvement of
accountability of public programs.
(G) The growing Federal debt is hindering economic
growth and competitiveness, and ultimately, reduces the
standard of living of all Americans.
(2) Purposes.--The purposes of this section are to--
(A) provide the American taxpayer with an annual
report on the financial status of the Federal
Government;
(B) increase the participation and awareness of the
public in finding solutions to the Federal Government's
budget problems;
(C) require the President, Congressional leaders,
and the chief financial officers of the Government to
report to the public on the well-being of the Federal
Government's finances as a part of their fiduciary
responsibilities; and
(D) bring a public focus to efforts already
underway that seek to develop and improve financial
standards, annual reporting, and systems in the
agencies of the Federal Government.
(c) Annual Report.--Section 3513 of title 31, United States Code,
is amended by adding at the end thereof the following:
``(d)(1) The Secretary of the Treasury shall distribute to all
taxpayers described in paragraph (6) an annual report (referred to in
this subsection as the `annual report') containing--
``(A) the most recent 5-year actual trends in Federal
receipts, expenditures, fund balances, assets and liabilities,
and debts by major category or source, along with a brief
description of those trends for the most recent year;
``(B) a comparison of the actual Federal spending and
revenues by major category or source for the most recent fiscal
year--
``(i) to the budget request estimates as submitted
by the President for that year; and
``(ii) to the enacted budget,
along with notes explaining differences;
``(C) statements from the President, the Majority Leader of
the Senate, and the Speaker of the House of Representatives
regarding significant aspects of the Government's financial
performance; and
``(D) any other relevant information on the Government's
performance and contributions to economic growth, productivity,
and investment in infrastructure recommended for inclusion by
the advisory committee and deemed appropriate by the Director
of the Office of Management and Budget.
``(2)(A) Preparation and content of the annual report shall be
supervised and directed by the Director of the Office of Management and
Budget.
``(B) There is established an advisory committee to provide the
Director of the Office of Management and Budget with comments and
suggestions on the design and content of the annual report. The
advisory committee shall consist of 9 members as follows:
``(i) 3 members to be appointed by the President.
``(ii) 2 members to be appointed by the Majority Leader of
the Senate.
``(iii) 1 member to be appointed by the Minority Leader of
the Senate.
``(iv) 2 members to be appointed by the Speaker of the
House of Representatives.
``(v) 1 member to be appointed by the Minority Leader of
the House of Representatives.
``(3) The annual report shall contain a statement of assurance by
the Director of the Office of Management and Budget and an audit
opinion the Comptroller General attesting to the reliability and
relevancy accuracy of the information contained in the annual report.
``(4) The annual report shall be prepared annually in a timely
fashion after the close of each fiscal year. If the final annual report
for a fiscal year is not available within 3 calendar months after the
close of that fiscal year, a preliminary annual report shall be
prepared and published within that period containing substantially all
the material described in subparagraphs (A) and (B) of paragraph (1)
and the final annual report shall be prepared and published as soon as
possible thereafter.
``(5)(A) In the case of any booklet of instructions for Form 1040,
1040A, or 1040EZ prepared by the Secretary for filing individual income
tax returns for taxable years beginning in any calendar year, the
Secretary shall include on the front inside cover of such booklet of
instructions (in addition to the information required in subsection (a)
of section 7523 of the Internal Revenue Code of 1986) a summary of the
annual report prepared by the Director.
``(B) The summary referred to in subparagraph (A) shall--
``(i) include the cumulative Federal debt at the end of
each of the 10 preceding fiscal years expressed in total
dollars and in dollars per capita;
``(ii) include the Federal deficit for each of the 10
preceding years expressed in total dollars and dollars per
capita; and
``(iii) be presented in a manner that is easily
comprehensible to a taxpayer.
``(6)(A) A taxpayer is described in this paragraph if such taxpayer
designates on the form for the return of the tax imposed by chapter 1
of the Internal Revenue Code of 1986 for any taxable year that such
taxpayer desires a copy of the annual report described in this
subsection and, in cases where a taxpayer requests more than one copy
of the report, submits a processing fee (if any) as described in
paragraph (7).
``(B) Space shall be made available for the designation referred to
in subparagraph (A) on the first page of the tax return forms for such
tax.
``(7) Notwithstanding any other provision of law, the Secretary of
the Treasury may impose a processing fee or may accept contributions
from corporations, foundations, and other private entities for
distribution or preparation of the report, or both.''.
(d) Authorization.--For the purpose of carrying out the provisions
of the amendment made by this section, there are authorized to be
appropriated to the Secretary of the Treasury and the Director of the
Office of Management and Budget $10,000,000 for fiscal year 1994, and
such sums as may be necessary for fiscal years 1995, 1996, 1997 and
1998. These amounts shall include any funds raised through the
authority established in section 3513(d)(7) of title 31, United States
Code, as added by this section.
Attest:
Secretary.
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