To amend the Internal Revenue Code of 1986 to provide for refunds to taxpayers of the budget surplus for each year of surplus.

Summary: Taxpayer Rebate and Responsibility Act - Amends the Internal Revenue Code to provide for refunds or credits to individual taxpayers of a portion of their income tax for any year in which the Director of the Office of Management and Budget certifies that there is a surplus in the U.S. budget.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Taxpayer Rebate and Responsibility 
Act''.

SEC. 2. REFUND OF CERTAIN BUDGET SURPLUS AMOUNTS.

    (a) In General.--Subchapter B of chapter 65 of the Internal Revenue 
Code of 1986 (relating to abatements, credits, and refunds) is amended 
by adding at the end the following new section:

``SEC. 6429. REFUND OF BUDGET SURPLUS AMOUNTS.

    ``(a) In General.--Each individual who was an eligible individual 
for such individual's first taxable year beginning in the calendar year 
in which a surplus year begins shall be treated as having made a 
payment against the tax imposed by chapter 1 for such first taxable 
year in an amount equal to the lesser of--
            ``(1) the taxpayer's allocable portion of the refund amount 
        for such taxable year, or
            ``(2) the taxpayer's limitation amount for such taxable 
        year.
    ``(b) Timing of Payments.--In the case of any overpayment 
attributable to this section, the Secretary shall, subject to the 
provisions of this title, refund or credit such overpayment as rapidly 
as possible.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Eligible individual.--The term `eligible individual' 
        means any individual other than--
                    ``(A) any estate or trust,
                    ``(B) any nonresident alien individual, and
                    ``(C) any individual with respect to whom a 
                deduction under section 151 is allowable to another 
                taxpayer for a taxable year beginning in the calendar 
                year in which the individual's taxable year begins.
            ``(2) Surplus year.--The term `surplus year' means a fiscal 
        year for which the Director of the Office of Management and 
        Budget certifies to the President and the Congress after the 
        close of such year that there is a surplus in the budget of the 
        United States for such fiscal year and the amount of such 
        surplus, determined without regard to the income and 
        expenditures of the Federal Old-Age and Survivors Insurance 
        Trust Fund, the Federal Disability Insurance Trust Fund, and 
        the Federal Hospital Insurance Trust Fund. Such term shall not 
        include any year if the Secretary determines that the cost of 
        carrying out this section with respect to such year would 
        exceed the refund amount for such year.
            ``(3) Refund amount.--
                    ``(A) In general.--The term `refund amount' means 
                with respect to a surplus year, the applicable 
                percentage of the amount of the surplus certified under 
                paragraph (2) for that year.
                    ``(B) Applicable percentage.--The term `applicable 
                percentage' means such percentage as the Secretary may 
                determine with respect to any surplus year, except that 
                such percentage shall not be less than 50 percent nor 
                more than 100 percent.
            ``(4) Taxpayer's allocable portion of the refund amount.--A 
        taxpayer's allocable portion of the refund amount is the 
        portion of the refund amount determined by the Secretary to be 
        the amount which bears the same ratio to the tax paid by the 
        taxpayer under subtitle A for the taxpayer's first taxable year 
        beginning in the calendar year in which the surplus year begins 
        as the total amount of taxes imposed under subtitle A on all 
        eligible individuals for such taxable year bears to the total 
        amount of the refund amount for the surplus year.
            ``(5) Limitation amount.--The term `limitation amount' 
        means, with respect to any taxable year, the excess (if any) 
        of--
                    ``(A) the sum of the regular tax liability (as 
                defined in section 26(b)) for such taxable year plus 
                the tax imposed by section 55 for such taxable year, 
                over
                    ``(B) the sum of the credits allowable under part 
                IV of subchapter A of chapter 1 (other than the credits 
                allowable under subpart C thereof, relating to 
                refundable credits) for such taxable year.
    ``(d) Special Rules.--
            ``(1) No interest.--No interest shall be allowed on any 
        overpayment attributable to this section.
            ``(2) Joint returns.--In the case of a refund or credit 
        made or allowed under this section with respect to a joint 
        return, half of such refund or credit shall be treated as 
        having been made or allowed to each individual filing such 
        return.''.
    (b) Clerical Amendment.--The table of sections for subchapter B of 
chapter 65 is amended by adding at the end the following new item:

``6429. Refund of budget surplus amounts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.