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[House Report 113-643]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     113-643

======================================================================

 
   PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 5771) TO AMEND THE 
INTERNAL REVENUE CODE OF 1986 TO EXTEND CERTAIN EXPIRING PROVISIONS AND 
 MAKE TECHNICAL CORRECTIONS, AND FOR OTHER PURPOSES, AND PROVIDING FOR 
CONSIDERATION OF THE BILL (H.R. 647) TO AMEND THE INTERNAL REVENUE CODE 
 OF 1986 TO PROVIDE FOR THE TAX TREATMENT OF ABLE ACCOUNTS ESTABLISHED 
UNDER STATE PROGRAMS FOR THE CARE OF FAMILY MEMBERS WITH DISABILITIES, 
                         AND FOR OTHER PURPOSES

                                _______
                                

  December 2, 2014.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

              Mr. Sessions, from the Committee on Rules, 
                        submitted the following

                              R E P O R T

                       [To accompany H. Res. 766]

    The Committee on Rules, having had under consideration 
House Resolution 766, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for consideration of H.R. 5771, the 
Tax Increase Prevention Act of 2014, under a closed rule. The 
resolution provides one hour of debate equally divided and 
controlled by the chair and ranking minority member of the 
Committee on Ways and Means. The resolution waives all points 
of order against consideration of the bill. The resolution 
provides that the amendment printed in part A of this report 
shall be considered as adopted, and the bill, as amended, shall 
be considered as read. The resolution waives all points of 
order against provisions in the bill, as amended. The 
resolution provides one motion to recommit with or without 
instructions.
    Section 2 of the resolution provides for consideration of 
H.R. 647, the ABLE Act of 2014, under a closed rule. The 
resolution provides one hour of debate equally divided and 
controlled by the chair and ranking minority member of the 
Committee on Ways and Means. The resolution waives all points 
of order against consideration of the bill. The resolution 
provides that the amendment in the nature of a substitute 
printed in part B of this report shall be considered as 
adopted, and the bill, as amended, shall be considered as read. 
The resolution waives all points of order against provisions in 
the bill, as amended. The resolution provides one motion to 
recommit with or without instructions.
    The resolution directs the Clerk to, in the engrossment of 
H.R. 5771, add the text of H.R. 647, as passed by the House, as 
a new matter at the end of H.R. 5771 and make conforming 
modifications in the engrossment.

                         EXPLANATION OF WAIVERS

    The waiver of all points of order against consideration of 
H.R. 5771 includes a waivers of the following:
     Section 302(f) of the Congressional Budget Act of 
1974, which prohibits consideration of legislation providing 
new budget authority in excess of a committee's 302(a) 
allocation;
     Section 311 of the Congressional Budget Act of 
1974, which prohibits consideration of legislation that would 
cause revenues to be less than the level of total revenues for 
the first fiscal year or for the total of that first fiscal 
year and the ensuing fiscal years for which allocations are 
provided; and
     Clause 10 of rule XXI, which prohibits the 
consideration of legislation if it has the net effect of 
increasing mandatory spending over the five or ten-year period. 
The waiver is necessary because the bill increases direct 
spending over the five and ten-year periods.
    Although the resolution waives all points of order against 
provisions in H.R. 5771, as amended, the Committee is not aware 
of any points of order. The waiver is prophylactic in nature.
    The waiver of all points of order against consideration of 
H.R. 647 includes a waiver of section 311 of the Congressional 
Budget Act of 1974, which prohibits consideration of 
legislation that would cause revenues to be less than the level 
of total revenues for the first fiscal year or for the total of 
that first fiscal year and the ensuing fiscal years for which 
allocations are provided.
    Although the resolution waives all points of order against 
provisions in H.R. 647, as amended, the Committee is not aware 
of any points of order. The waiver is prophylactic in nature.

 SUMMARY OF THE AMENDMENT TO H.R. 5771 IN PART A CONSIDERED AS ADOPTED

    Camp (MI): Inserts a new section 161, which includes an 
extension of credit for alternative fuel vehicle refueling 
property and strikes a deadwood provision that is inconsistent 
with section 205 of the ABLE Act of 2014 (H.R. 647, as 
amended), which modifies the Inland Waterways Trust Fund 
financing rate.

  SUMMARY OF THE AMENDMENT TO H.R. 647 IN PART B CONSIDERED AS ADOPTED

    Crenshaw (FL): Makes changes to H.R. 647, as reported by 
the Committee on Ways and Means, that include clarifying and 
technical changes, a change to a definition, limitations on 
investment direction, bankruptcy protection, and provides 
offsets for the bill.

      PART A--TEXT OF AMENDMENT TO H.R. 5771 CONSIDERED AS ADOPTED

  Page 34, after line 4, insert the following (and conform the 
table of contents accordingly):

SEC. 161. EXTENSION OF CREDIT FOR ALTERNATIVE FUEL VEHICLE REFUELING 
                    PROPERTY.

  (a) In General.--Subsection (g) of section 30C is amended by 
striking ``placed in service'' and all that follows and 
inserting ``placed in service after December 31, 2014.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to property placed in service after December 31, 2013.
  Page 115, strike line 23 and all that follows though page 
116, line 2 (and redesignate the succeeding paragraphs 
accordingly).

      PART B--TEXT OF AMENDMENT TO H.R. 647 CONSIDERED AS ADOPTED

  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; ETC.

  (a) Short Title.--This Act may be cited as the ``Achieving a 
Better Life Experience Act of 2014'' or the ``ABLE Act of 
2014''.
  (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever in this Act 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) Table of Contents.--The table of contents of this Act is 
as follows:

Sec. 1. Short title; etc.

                    TITLE I--QUALIFIED ABLE PROGRAMS

Sec. 101. Purposes.
Sec. 102. Qualified ABLE programs.
Sec. 103. Treatment of ABLE accounts under certain Federal programs.
Sec. 104. Treatment of able accounts in bankruptcy.
Sec. 105. Investment direction rule for 529 plans.

                            TITLE II--OFFSETS

Sec. 201. Correction to workers compensation offset age.
Sec. 202. Accelerated application of relative value targets for 
          misvalued services in the Medicare physician fee schedule.
Sec. 203. Consistent treatment of vacuum erection systems in Medicare 
          Parts B and D.
Sec. 204. One-year delay of implementation of oral-only policy under 
          Medicare ESRD prospective payment system.
Sec. 205. Modification relating to Inland Waterways Trust Fund financing 
          rate.
Sec. 206. Certified professional employer organizations.
Sec. 207. Exclusion of dividends from controlled foreign corporations 
          from the definition of personal holding company income for 
          purposes of the personal holding company rules.
Sec. 208. Inflation adjustment for certain civil penalties under the 
          Internal Revenue Code of 1986.
Sec. 209. Increase in continuous levy.

                    TITLE I--QUALIFIED ABLE PROGRAMS

SEC. 101. PURPOSES.

  The purposes of this title are as follows:
          (1) To encourage and assist individuals and families 
        in saving private funds for the purpose of supporting 
        individuals with disabilities to maintain health, 
        independence, and quality of life.
          (2) To provide secure funding for disability-related 
        expenses on behalf of designated beneficiaries with 
        disabilities that will supplement, but not supplant, 
        benefits provided through private insurance, the 
        Medicaid program under title XIX of the Social Security 
        Act, the supplemental security income program under 
        title XVI of such Act, the beneficiary's employment, 
        and other sources.

SEC. 102. QUALIFIED ABLE PROGRAMS.

  (a) In General.--Subchapter F of chapter 1 is amended by 
inserting after section 529 the following new section:

``SEC. 529A. QUALIFIED ABLE PROGRAMS.

  ``(a) General Rule.--A qualified ABLE program shall be exempt 
from taxation under this subtitle. Notwithstanding the 
preceding sentence, such program shall be subject to the taxes 
imposed by section 511 (relating to imposition of tax on 
unrelated business income of charitable organizations).
  ``(b) Qualified ABLE Program.--For purposes of this section--
          ``(1) In general.--The term `qualified ABLE program' 
        means a program established and maintained by a State, 
        or agency or instrumentality thereof--
                  ``(A) under which a person may make 
                contributions for a taxable year, for the 
                benefit of an individual who is an eligible 
                individual for such taxable year, to an ABLE 
                account which is established for the purpose of 
                meeting the qualified disability expenses of 
                the designated beneficiary of the account,
                  ``(B) which limits a designated beneficiary 
                to 1 ABLE account for purposes of this section,
                  ``(C) which allows for the establishment of 
                an ABLE account only for a designated 
                beneficiary who is a resident of such State or 
                a resident of a contracting State, and
                  ``(D) which meets the other requirements of 
                this section.
          ``(2) Cash contributions.--A program shall not be 
        treated as a qualified ABLE program unless it provides 
        that no contribution will be accepted--
                  ``(A) unless it is in cash, or
                  ``(B) except in the case of contributions 
                under subsection (c)(1)(C), if such 
                contribution to an ABLE account would result in 
                aggregate contributions from all contributors 
                to the ABLE account for the taxable year 
                exceeding the amount in effect under section 
                2503(b) for the calendar year in which the 
                taxable year begins.
        For purposes of this paragraph, rules similar to the 
        rules of section 408(d)(4) (determined without regard 
        to subparagraph (B) thereof) shall apply.
          ``(3) Separate accounting.--A program shall not be 
        treated as a qualified ABLE program unless it provides 
        separate accounting for each designated beneficiary.
          ``(4) Limited investment direction.--A program shall 
        not be treated as a qualified ABLE program unless it 
        provides that any designated beneficiary under such 
        program may, directly or indirectly, direct the 
        investment of any contributions to the program (or any 
        earnings thereon) no more than 2 times in any calendar 
        year.
          ``(5) No pledging of interest as security.--A program 
        shall not be treated as a qualified ABLE program if it 
        allows any interest in the program or any portion 
        thereof to be used as security for a loan.
          ``(6) Prohibition on excess contributions.--A program 
        shall not be treated as a qualified ABLE program unless 
        it provides adequate safeguards to prevent aggregate 
        contributions on behalf of a designated beneficiary in 
        excess of the limit established by the State under 
        section 529(b)(6). For purposes of the preceding 
        sentence, aggregate contributions include contributions 
        under any prior qualified ABLE program of any State or 
        agency or instrumentality thereof.
  ``(c) Tax Treatment.--
          ``(1) Distributions.--
                  ``(A) In general.--Any distribution under a 
                qualified ABLE program shall be includible in 
                the gross income of the distributee in the 
                manner as provided under section 72 to the 
                extent not excluded from gross income under any 
                other provision of this chapter.
                  ``(B) Distributions for qualified disability 
                expenses.--For purposes of this paragraph, if 
                distributions from a qualified ABLE program--
                          ``(i) do not exceed the qualified 
                        disability expenses of the designated 
                        beneficiary, no amount shall be 
                        includible in gross income, and
                          ``(ii) in any other case, the amount 
                        otherwise includible in gross income 
                        shall be reduced by an amount which 
                        bears the same ratio to such amount as 
                        such expenses bear to such 
                        distributions.
                  ``(C) Change in designated beneficiaries or 
                programs.--
                          ``(i) Rollovers from able accounts.--
                        Subparagraph (A) shall not apply to any 
                        amount paid or distributed from an ABLE 
                        account to the extent that the amount 
                        received is paid, not later than the 
                        60th day after the date of such payment 
                        or distribution, into another ABLE 
                        account for the benefit of the same 
                        designated beneficiary or an eligible 
                        individual who is a family member of 
                        the designated beneficiary.
                          ``(ii) Change in designated 
                        beneficiaries.--Any change in the 
                        designated beneficiary of an interest 
                        in a qualified ABLE program during a 
                        taxable year shall not be treated as a 
                        distribution for purposes of 
                        subparagraph (A) if the new beneficiary 
                        is an eligible individual for such 
                        taxable year and a member of the family 
                        of the former beneficiary.
                          ``(iii) Limitation on certain 
                        rollovers.--Clause (i) shall not apply 
                        to any transfer if such transfer occurs 
                        within 12 months from the date of a 
                        previous transfer to any qualified ABLE 
                        program for the benefit of the 
                        designated beneficiary.
                  ``(D) Operating rules.--For purposes of 
                applying section 72--
                          ``(i) except to the extent provided 
                        by the Secretary, all distributions 
                        during a taxable year shall be treated 
                        as one distribution, and
                          ``(ii) except to the extent provided 
                        by the Secretary, the value of the 
                        contract, income on the contract, and 
                        investment in the contract shall be 
                        computed as of the close of the 
                        calendar year in which the taxable year 
                        begins.
          ``(2) Gift tax rules.--For purposes of chapters 12 
        and 13--
                  ``(A) Contributions.--Any contribution to a 
                qualified ABLE program on behalf of any 
                designated beneficiary--
                          ``(i) shall be treated as a completed 
                        gift to such designated beneficiary 
                        which is not a future interest in 
                        property, and
                          ``(ii) shall not be treated as a 
                        qualified transfer under section 
                        2503(e).
                  ``(B) Treatment of distributions.--In no 
                event shall a distribution from an ABLE account 
                to such account's designated beneficiary be 
                treated as a taxable gift.
                  ``(C) Treatment of transfer to new designated 
                beneficiary.--The taxes imposed by chapters 12 
                and 13 shall not apply to a transfer by reason 
                of a change in the designated beneficiary under 
                subsection (c)(1)(C).
          ``(3) Additional tax for distributions not used for 
        disability expenses.--
                  ``(A) In general.--The tax imposed by this 
                chapter for any taxable year on any taxpayer 
                who receives a distribution from a qualified 
                ABLE program which is includible in gross 
                income shall be increased by 10 percent of the 
                amount which is so includible.
                  ``(B) Exception.--Subparagraph (A) shall not 
                apply if the payment or distribution is made to 
                a beneficiary (or to the estate of the 
                designated beneficiary) on or after the death 
                of the designated beneficiary.
                  ``(C) Contributions returned before certain 
                date.--Subparagraph (A) shall not apply to the 
                distribution of any contribution made during a 
                taxable year on behalf of the designated 
                beneficiary if--
                          ``(i) such distribution is received 
                        on or before the day prescribed by law 
                        (including extensions of time) for 
                        filing such designated beneficiary's 
                        return for such taxable year, and
                          ``(ii) such distribution is 
                        accompanied by the amount of net income 
                        attributable to such excess 
                        contribution.
                Any net income described in clause (ii) shall 
                be included in gross income for the taxable 
                year in which such excess contribution was 
                made.
          ``(4) Loss of able account treatment.--If an ABLE 
        account is established for a designated beneficiary, no 
        account subsequently established for such beneficiary 
        shall be treated as an ABLE account. The preceding 
        sentence shall not apply in the case of an account 
        established for purposes of a rollover described in 
        paragraph (1)(C)(i) of this section if the transferor 
        account is closed as of the end of the 60th day 
        referred to in paragraph (1)(C)(i).
  ``(d) Reports.--
          ``(1) In general.--Each officer or employee having 
        control of the qualified ABLE program or their designee 
        shall make such reports regarding such program to the 
        Secretary and to designated beneficiaries with respect 
        to contributions, distributions, the return of excess 
        contributions, and such other matters as the Secretary 
        may require.
          ``(2) Certain aggregated information.--For research 
        purposes, the Secretary shall make available to the 
        public reports containing aggregate information, by 
        diagnosis and other relevant characteristics, on 
        contributions and distributions from the qualified ABLE 
        program. In carrying out the preceding sentence an item 
        may not be made available to the public if such item 
        can be associated with, or otherwise identify, directly 
        or indirectly, a particular individual.
          ``(3) Notice of establishment of able account.--A 
        qualified ABLE program shall submit a notice to the 
        Secretary upon the establishment of an ABLE account. 
        Such notice shall contain the name and State of 
        residence of the designated beneficiary and such other 
        information as the Secretary may require.
          ``(4) Electronic distribution statements.--For 
        purposes of section 4 of the Achieving a Better Life 
        Experience Act of 2014, States shall submit 
        electronically on a monthly basis to the Commissioner 
        of Social Security, in the manner specified by the 
        Commissioner, statements on relevant distributions and 
        account balances from all ABLE accounts.
          ``(5) Requirements.--The reports and notices required 
        by paragraphs (1), (2), and (3) shall be filed at such 
        time and in such manner and furnished to such 
        individuals at such time and in such manner as may be 
        required by the Secretary.
  ``(e) Other Definitions and Special Rules.--For purposes of 
this section--
          ``(1) Eligible individual.--An individual is an 
        eligible individual for a taxable year if during such 
        taxable year--
                  ``(A) the individual is entitled to benefits 
                based on blindness or disability under title II 
                or XVI of the Social Security Act, and such 
                blindness or disability occurred before the 
                date on which the individual attained age 26, 
                or
                  ``(B) a disability certification with respect 
                to such individual is filed with the Secretary 
                for such taxable year.
          ``(2) Disability certification.--
                  ``(A) In general.--The term `disability 
                certification' means, with respect to an 
                individual, a certification to the satisfaction 
                of the Secretary by the individual or the 
                parent or guardian of the individual that--
                          ``(i) certifies that--
                                  ``(I) the individual has a 
                                medically determinable physical 
                                or mental impairment, which 
                                results in marked and severe 
                                functional limitations, and 
                                which can be expected to result 
                                in death or which has lasted or 
                                can be expected to last for a 
                                continuous period of not less 
                                than 12 months, or is blind 
                                (within the meaning of section 
                                1614(a)(2) of the Social 
                                Security Act), and
                                  ``(II) such blindness or 
                                disability occurred before the 
                                date on which the individual 
                                attained age 26, and
                          ``(ii) includes a copy of the 
                        individual's diagnosis relating to the 
                        individual's relevant impairment or 
                        impairments, signed by a physician 
                        meeting the criteria of section 
                        1861(r)(1) of the Social Security Act.
                  ``(B) Restriction on use of certification.--
                No inference may be drawn from a disability 
                certification for purposes of establishing 
                eligibility for benefits under title II, XVI, 
                or XIX of the Social Security Act.
          ``(3) Designated beneficiary.--The term `designated 
        beneficiary' in connection with an ABLE account 
        established under a qualified ABLE program means the 
        eligible individual who established an ABLE account and 
        is the owner of such account.
          ``(4) Member of family.--The term `member of the 
        family' means, with respect to any designated 
        beneficiary, an individual who bears a relationship to 
        such beneficiary which is described in subparagraph 
        section 152(d)(2)(B). For purposes of the preceding 
        sentence, a rule similar to the rule of section 
        152(f)(1)(B) shall apply.
          ``(5) Qualified disability expenses.--The term 
        `qualified disability expenses' means any expenses 
        related to the eligible individual's blindness or 
        disability which are made for the benefit of an 
        eligible individual who is the designated beneficiary, 
        including the following expenses: education, housing, 
        transportation, employment training and support, 
        assistive technology and personal support services, 
        health, prevention and wellness, financial management 
        and administrative services, legal fees, expenses for 
        oversight and monitoring, funeral and burial expenses, 
        and other expenses, which are approved by the Secretary 
        under regulations and consistent with the purposes of 
        this section.
          ``(6) ABLE account.--The term `ABLE account' means an 
        account established by an eligible individual, owned by 
        such eligible individual, and maintained under a 
        qualified ABLE program.
          ``(7) Contracting state.--The term `contracting 
        State' means a State without a qualified ABLE program 
        which has entered into a contract with a State with a 
        qualified ABLE program to provide residents of the 
        contracting State access to a qualified ABLE program.
  ``(f) Transfer to State.--Subject to any outstanding payments 
due for qualified disability expenses, upon the death of the 
designated beneficiary, all amounts remaining in the qualified 
ABLE account not in excess of the amount equal to the total 
medical assistance paid for the designated beneficiary after 
the establishment of the account, net of any premiums paid from 
the account or paid by or on behalf of the beneficiary to a 
Medicaid Buy-In program under any State Medicaid plan 
established under title XIX of the Social Security Act, shall 
be distributed to such State upon filing of a claim for payment 
by such State. For purposes of this paragraph, the State shall 
be a creditor of an ABLE account and not a beneficiary. 
Subsection (c)(3) shall not apply to a distribution under the 
preceding sentence.
  ``(g) Regulations.--The Secretary shall prescribe such 
regulations or other guidance as the Secretary determines 
necessary or appropriate to carry out the purposes of this 
section, including regulations--
          ``(1) to enforce the 1 ABLE account per eligible 
        individual limit,
          ``(2) providing for the information required to be 
        presented to open an ABLE account,
          ``(3) to generally define qualified disability 
        expenses,
          ``(4) developed in consultation with the Commissioner 
        of Social Security, relating to disability 
        certifications and determinations of disability, 
        including those conditions deemed to meet the 
        requirements of subsection (e)(1)(B),
          ``(5) to prevent fraud and abuse with respect to 
        amounts claimed as qualified disability expenses,
          ``(6) under chapters 11, 12, and 13 of this title, 
        and
          ``(7) to allow for transfers from one ABLE account to 
        another ABLE account.''.
  (b) Tax on Excess Contributions.--
          (1) In general.--Subsection (a) of section 4973 
        (relating to tax on excess contributions to certain 
        tax-favored accounts and annuities) is amended by 
        striking ``or'' at the end of paragraph (4), by 
        inserting ``or'' at the end of paragraph (5), and by 
        inserting after paragraph (5) the following new 
        paragraph:
          ``(6) an ABLE account (within the meaning of section 
        529A),''.
          (2) Excess contribution.--Section 4973 is amended by 
        adding at the end the following new subsection:
  ``(h) Excess Contributions to ABLE Account.--For purposes of 
this section--
          ``(1) In general.--In the case of an ABLE account 
        (within the meaning of section 529A), the term `excess 
        contributions' means the amount by which the amount 
        contributed for the taxable year to such account (other 
        than contributions under section 529A(c)(1)(C)) exceeds 
        the contribution limit under section 529A(b)(2)(B).
          ``(2) Special rule.--For purposes of this subsection, 
        any contribution which is distributed out of the ABLE 
        account in a distribution to which the last sentence of 
        section 529A(b)(2) applies shall be treated as an 
        amount not contributed.''.
  (c) Penalty for Failure to File Reports.--Section 6693(a)(2) 
is amended by striking ``and'' at the end of subparagraph (D), 
by redesignating subparagraph (E) as subparagraph (F), and by 
inserting after subparagraph (D) the following:
                  ``(E) section 529A(d) (relating to qualified 
                ABLE programs), and''.
  (d) Records.--Section 552a(a)(8)(B) of title 5, United States 
Code, is amended--
          (1) in clause (viii), by striking ``or'' at the end;
          (2) in clause (ix), by adding ``or'' at the end; and
          (3) by adding at the end the following new clause:
                          ``(x) matches performed pursuant to 
                        section 3(d)(4) of the Achieving a 
                        Better Life Experience Act of 2014;''.
  (e) Other Conforming Amendments.--
          (1) Section 26(b)(2) is amended by striking ``and'' 
        at the end of subparagraph (W), by striking the period 
        at the end of subparagraph (X) and inserting ``, and'', 
        and by inserting after subparagraph (X) the following:
                  ``(Y) section 529A(c)(3)(A) (relating to 
                additional tax on ABLE account distributions 
                not used for qualified disability expenses).''.
          (2) Section 877A is amended--
                  (A) in subsection (e)(2) by inserting ``a 
                qualified ABLE program (as defined in section 
                529A),'' after ``529),'', and
                  (B) in subsection (g)(6) by inserting 
                ``529A(c)(3),'' after ``529(c)(6),''.
          (3) Section 4965(c) is amended by striking ``or'' at 
        the end of paragraph (6), by striking the period at the 
        end of paragraph (7) and inserting ``, or'', and by 
        inserting after paragraph (7) the following new 
        paragraph:
          ``(8) a program described in section 529A.''.
          (4) The heading for part VIII of subchapter F of 
        chapter 1 is amended by striking ``HIGHER EDUCATION'' 
        and inserting ``CERTAIN''.
          (5) The item in the table of parts for subchapter F 
        of chapter 1 relating to part VIII is amended to read 
        as follows:

                ``Part VIII. Certain Savings Entities.''.

          (6) The table of sections for part VIII of subchapter 
        F of chapter 1 is amended by inserting after the item 
        relating to section 529 the following new item:

``Sec. 529A. Qualified ABLE programs.''.

          (7) Paragraph (4) of section 1027(g) of the Consumer 
        Financial Protection Act of 2010 (12 U.S.C. 5517(g)(4)) 
        is amended by inserting ``, 529A'' after ``529''.
  (f) Effective Date.--
          (1) In general.--The amendments made by this section 
        shall apply to taxable years beginning after December 
        31, 2014.
          (2) Regulations.--The Secretary of the Treasury (or 
        the Secretary's designee) shall promulgate the 
        regulations or other guidance required under section 
        529A(g) of the Internal Revenue Code of 1986, as added 
        by subsection (a), not later than 6 months after the 
        date of the enactment of this Act.

SEC. 103. TREATMENT OF ABLE ACCOUNTS UNDER CERTAIN FEDERAL PROGRAMS.

  (a) Account Funds Disregarded for Purposes of Certain Other 
Means-Tested Federal Programs.--Notwithstanding any other 
provision of Federal law that requires consideration of 1 or 
more financial circumstances of an individual, for the purpose 
of determining eligibility to receive, or the amount of, any 
assistance or benefit authorized by such provision to be 
provided to or for the benefit of such individual, any amount 
(including earnings thereon) in the ABLE account (within the 
meaning of section 529A of the Internal Revenue Code of 1986) 
of such individual, any contributions to the ABLE account of 
the individual, and any distribution for qualified disability 
expenses (as defined in subsection (e)(5) of such section) 
shall be disregarded for such purpose with respect to any 
period during which such individual maintains, makes 
contributions to, or receives distributions from such ABLE 
account, except that, in the case of the supplemental security 
income program under title XVI of the Social Security Act--
          (1) a distribution for housing expenses (within the 
        meaning of such subsection) shall not be so 
        disregarded, and
          (2) in the case of such program, any amount 
        (including such earnings) in such ABLE account shall be 
        considered a resource of the designated beneficiary to 
        the extent that such amount exceeds $100,000.
  (b) Suspension of SSI Benefits During Periods of Excessive 
Account Funds.--
          (1) In general.--The benefits of an individual under 
        the supplemental security income program under title 
        XVI of the Social Security Act shall not be terminated, 
        but shall be suspended, by reason of excess resources 
        of the individual attributable to an amount in the ABLE 
        account (within the meaning of section 529A of the 
        Internal Revenue Code of 1986) of the individual not 
        disregarded under subsection (a) of this section.
          (2) No impact on medicaid eligibility.--An individual 
        who would be receiving payment of such supplemental 
        security income benefits but for the application of 
        paragraph (1) shall be treated for purposes of title 
        XIX of the Social Security Act as if the individual 
        continued to be receiving payment of such benefits.
  (c) Effective Date.--This section shall take effect on the 
date of the enactment of this Act.

SEC. 104. TREATMENT OF ABLE ACCOUNTS IN BANKRUPTCY.

  (a) Exclusion From Property of the Estate.--Section 541(b) of 
the title 11, United States Code, is amended--
          (1) in paragraph (8), by striking ``or'' at the end;
          (2) in paragraph (9), by striking the period at the 
        end and inserting a semicolon and ``or''; and
          (3) by inserting after paragraph (9) the following:
          ``(10) funds placed in an account of a qualified ABLE 
        program (as defined in section 529A(b) of the Internal 
        Revenue Code of 1986) not later than 365 days before 
        the date of the filing of the petition in a case under 
        this title, but--
                  ``(A) only if the designated beneficiary of 
                such account was a child, stepchild, 
                grandchild, or stepgrandchild of the debtor for 
                the taxable year for which funds were placed in 
                such account;
                  ``(B) only to the extent that such funds--
                          ``(i) are not pledged or promised to 
                        any entity in connection with any 
                        extension of credit; and
                          ``(ii) are not excess contributions 
                        (as described in section 4973(h) of the 
                        Internal Revenue Code of 1986); and
                  ``(C) in the case of funds placed in all such 
                accounts having the same designated beneficiary 
                not earlier than 720 days nor later than 365 
                days before such date, only so much of such 
                funds as does not exceed $6,225.''.
  (b) Debtor's Monthly Expenses.--Section 707(b)(2)(A)(ii)(II) 
of title 11, United States Code, is amended by adding at the 
end ``Such monthly expenses may include, if applicable, 
contributions to an account of a qualified ABLE program to the 
extent such contributions are not excess contributions (as 
described in section 4973(h) of the Internal Revenue Code of 
1986) and if the designated beneficiary of such account is a 
child, stepchild, grandchild, or stepgrandchild of the 
debtor.''.
  (c) Record of Debtor's Interest.--Section 521(c) of title 11, 
United States Code, is amended by inserting ``, an interest in 
an account in a qualified ABLE program (as defined in section 
529A(b) of such Code,'' after ``Internal Revenue Code of 
1986)''.
  (d) Effective Date.--The amendments made by this section 
shall apply with respect to cases commenced under title 11, 
United States Code, on or after the date of the enactment of 
this Act.

SEC. 105. INVESTMENT DIRECTION RULE FOR 529 PLANS.

  (a) Amendments Relating to Investment Direction Rule for 529 
Plans.--
          (1) Paragraph (4) of section 529(b) is amended by 
        striking ``may not directly or indirectly'' and all 
        that follows and inserting ``may, directly or 
        indirectly, direct the investment of any contributions 
        to the program (or any earnings thereon) no more than 2 
        times in any calendar year.''.
          (2) The heading of paragraph (4) of section 529(b)is 
        amended by striking ``No'' and inserting ``Limited''.
  (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2014.

                           TITLE II--OFFSETS

SEC. 201. CORRECTION TO WORKERS COMPENSATION OFFSET AGE.

  (a) Retirement Age.--Section 224(a) of the Social Security 
Act (42 U.S.C. 424a(a)) is amended, in the matter preceding 
paragraph (1), by striking ``the age of 65'' and inserting 
``retirement age (as defined in section 216(l)(1))''.
  (b) Effective Date.--The amendment made by subsection (a) 
shall apply with respect to any individual who attains 65 years 
of age on or after the date that is 12 months after the date of 
the enactment of this Act.

SEC. 202. ACCELERATED APPLICATION OF RELATIVE VALUE TARGETS FOR 
                    MISVALUED SERVICES IN THE MEDICARE PHYSICIAN FEE 
                    SCHEDULE.

  Section 1848(c) of the Social Security Act (42 U.S.C. 1395w-
4(c)) is amended--
          (1) in subclause (VIII) of paragraph (2)(B)(v), as 
        added by section 220(d)(2) of the Protecting Access to 
        Medicare Act of 2014 (Public Law 113-93)--
                  (A) by striking ``2017'' and inserting 
                ``2016''; and
                  (B) by redesignating such subclause as 
                subclause (IX);
          (2) in paragraph (2)(O)--
                  (A) in the matter preceding clause (i), by 
                striking ``2017 through 2020'' and inserting 
                ``2016 through 2018'';
                  (B) in clause (iii), by striking ``2017'' and 
                inserting ``2016''; and
                  (C) in clause (v), by inserting ``(or, for 
                2016, 1.0 percent)'' after ``0.5 percent''; and
          (3) in paragraph (7), by striking ``2017'' and 
        inserting ``2016''.

SEC. 203. CONSISTENT TREATMENT OF VACUUM ERECTION SYSTEMS IN MEDICARE 
                    PARTS B AND D.

   Section 1834(a)(1) of the Social Security Act (42 U.S.C. 
1395m(a)(1)) is amended by adding at the end the following new 
subparagraph:
                  ``(I) Treatment of vacuum erection systems.--
                Effective for items and services furnished on 
                and after July 1, 2015, vacuum erection systems 
                described as prosthetic devices described in 
                section 1861(s)(8) shall be treated in the same 
                manner as erectile dysfunction drugs are 
                treated for purposes of section 1860D-
                2(e)(2)(A).''.

SEC. 204. ONE-YEAR DELAY OF IMPLEMENTATION OF ORAL-ONLY POLICY UNDER 
                    MEDICARE ESRD PROSPECTIVE PAYMENT SYSTEM.

  Section 632(b)(1) of the American Taxpayer Relief Act of 2012 
(42 U.S.C. 1395rr note), as amended by section 217(a)(1) of the 
Protecting Access to Medicare Act of 2014 (Public Law 113-93), 
is amended by striking ``2024'' and inserting ``2025''.

SEC. 205. MODIFICATION RELATING TO INLAND WATERWAYS TRUST FUND 
                    FINANCING RATE.

  (a) In General.--Section 4042(b)(2)(A) is amended to read as 
follows:
                  ``(A) The Inland Waterways Trust Fund 
                financing rate is 29 cents per gallon.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to fuel used after March 31, 2015.

SEC. 206. CERTIFIED PROFESSIONAL EMPLOYER ORGANIZATIONS.

  (a) Employment Taxes.--Chapter 25 is amended by adding at the 
end the following new section:

``SEC. 3511. CERTIFIED PROFESSIONAL EMPLOYER ORGANIZATIONS.

  ``(a) General Rules.--For purposes of the taxes, and other 
obligations, imposed by this subtitle--
          ``(1) a certified professional employer organization 
        shall be treated as the employer (and no other person 
        shall be treated as the employer) of any work site 
        employee performing services for any customer of such 
        organization, but only with respect to remuneration 
        remitted by such organization to such work site 
        employee, and
          ``(2) the exemptions, exclusions, definitions, and 
        other rules which are based on type of employer and 
        which would (but for paragraph (1)) apply shall apply 
        with respect to such taxes imposed on such 
        remuneration.
  ``(b) Successor Employer Status.--For purposes of sections 
3121(a)(1), 3231(e)(2)(C), and 3306(b)(1)--
          ``(1) a certified professional employer organization 
        entering into a service contract with a customer with 
        respect to a work site employee shall be treated as a 
        successor employer and the customer shall be treated as 
        a predecessor employer during the term of such service 
        contract, and
          ``(2) a customer whose service contract with a 
        certified professional employer organization is 
        terminated with respect to a work site employee shall 
        be treated as a successor employer and the certified 
        professional employer organization shall be treated as 
        a predecessor employer.
  ``(c) Liability of Certified Professional Employer 
Organization.--Solely for purposes of its liability for the 
taxes and other obligations imposed by this subtitle--
          ``(1) a certified professional employer organization 
        shall be treated as the employer of any individual 
        (other than a work site employee or a person described 
        in subsection (f)) who is performing services covered 
        by a contract meeting the requirements of section 
        7705(e)(2), but only with respect to remuneration 
        remitted by such organization to such individual, and
          ``(2) the exemptions, exclusions, definitions, and 
        other rules which are based on type of employer and 
        which would (but for paragraph (1)) apply shall apply 
        with respect to such taxes imposed on such 
        remuneration.
  ``(d) Treatment of Credits.--
          ``(1) In general.--For purposes of any credit 
        specified in paragraph (2)--
                  ``(A) such credit with respect to a work site 
                employee performing services for the customer 
                applies to the customer, not the certified 
                professional employer organization,
                  ``(B) the customer, and not the certified 
                professional employer organization, shall take 
                into account wages and employment taxes--
                          ``(i) paid by the certified 
                        professional employer organization with 
                        respect to the work site employee, and
                          ``(ii) for which the certified 
                        professional employer organization 
                        receives payment from the customer, and
                  ``(C) the certified professional employer 
                organization shall furnish the customer and the 
                Secretary with any information necessary for 
                the customer to claim such credit.
          ``(2) Credits specified.--A credit is specified in 
        this paragraph if such credit is allowed under--
                  ``(A) section 41 (credit for increasing 
                research activity),
                  ``(B) section 45A (Indian employment credit),
                  ``(C) section 45B (credit for portion of 
                employer social security taxes paid with 
                respect to employee cash tips),
                  ``(D) section 45C (clinical testing expenses 
                for certain drugs for rare diseases or 
                conditions),
                  ``(E) section 45R (employee health insurance 
                expenses of small employers),
                  ``(F) section 51 (work opportunity credit),
                  ``(G) section 1396 (empowerment zone 
                employment credit), and
                  ``(H) any other section as provided by the 
                Secretary.
  ``(e) Special Rule for Related Party.--This section shall not 
apply in the case of a customer which bears a relationship to a 
certified professional employer organization described in 
section 267(b) or 707(b). For purposes of the preceding 
sentence, such sections shall be applied by substituting `10 
percent' for `50 percent'.
  ``(f) Special Rule for Certain Individuals.--For purposes of 
the taxes imposed under this subtitle, an individual with net 
earnings from self-employment derived from the customer's trade 
or business (including a partner in a partnership that is a 
customer) is not a work site employee with respect to 
remuneration paid by a certified professional employer 
organization.
  ``(g) Reporting Requirements and Obligations.--The Secretary 
shall develop such reporting and recordkeeping rules, 
regulations, and procedures as the Secretary determines 
necessary or appropriate to ensure compliance with this title 
by certified professional employer organizations or persons 
that have been so certified. Such rules shall include--
          ``(1) notification of the Secretary in such manner as 
        the Secretary shall prescribe in the case of the 
        commencement or termination of a service contract 
        described in section 7705(e)(2) between such a person 
        and a customer, and the employer identification number 
        of such customer,
          ``(2) such information as the Secretary determines 
        necessary for the customer to claim the credits 
        identified in subsection (d) and the manner in which 
        such information is to be provided, as prescribed by 
        the Secretary, and
          ``(3) such other information as the Secretary 
        determines is essential to promote compliance with 
        respect to the credits identified in subsection (d) and 
        section 3302, and
shall be designed in a manner which streamlines, to the extent 
possible, the application of requirements of this section and 
section 7705, the exchange of information between a certified 
professional employer organization and its customers, and the 
reporting and recordkeeping obligations of the certified 
professional employer organization.
  ``(h) Regulations.--The Secretary shall prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of this section.''.
  (b) Certified Professional Employer Organization Defined.--
Chapter 79 is amended by adding at the end the following new 
section:

``SEC. 7705. CERTIFIED PROFESSIONAL EMPLOYER ORGANIZATIONS.

  ``(a) In General.--For purposes of this title, the term 
`certified professional employer organization' means a person 
who applies to be treated as a certified professional employer 
organization for purposes of section 3511 and has been 
certified by the Secretary as meeting the requirements of 
subsection (b).
  ``(b) Certification Requirements.--A person meets the 
requirements of this subsection if such person--
          ``(1) demonstrates that such person (and any owner, 
        officer, and other persons as may be specified in 
        regulations) meets such requirements as the Secretary 
        shall establish, including requirements with respect to 
        tax status, background, experience, business location, 
        and annual financial audits,
          ``(2) agrees that it will satisfy the bond and 
        independent financial review requirements of subsection 
        (c) on an ongoing basis,
          ``(3) agrees that it will satisfy such reporting 
        obligations as may be imposed by the Secretary,
          ``(4) computes its taxable income using an accrual 
        method of accounting unless the Secretary approves 
        another method,
          ``(5) agrees to verify on such periodic basis as the 
        Secretary may prescribe that it continues to meet the 
        requirements of this subsection, and
          ``(6) agrees to notify the Secretary in writing 
        within such time as the Secretary may prescribe of any 
        change that materially affects the continuing accuracy 
        of any agreement or information that was previously 
        made or provided under this subsection.
  ``(c) Bond and Independent Financial Review.--
          ``(1) In general.--An organization meets the 
        requirements of this paragraph if such organization--
                  ``(A) meets the bond requirements of 
                paragraph (2), and
                  ``(B) meets the independent financial review 
                requirements of paragraph (3).
          ``(2) Bond.--
                  ``(A) In general.--A certified professional 
                employer organization meets the requirements of 
                this paragraph if the organization has posted a 
                bond for the payment of taxes under subtitle C 
                (in a form acceptable to the Secretary) that is 
                in an amount at least equal to the amount 
                specified in subparagraph (B).
                  ``(B) Amount of bond.--For the period April 1 
                of any calendar year through March 31 of the 
                following calendar year, the amount of the bond 
                required is equal to the greater of--
                          ``(i) 5 percent of the organization's 
                        liability under section 3511 for taxes 
                        imposed by subtitle C during the 
                        preceding calendar year (but not to 
                        exceed $1,000,000), or
                          ``(ii) $50,000.
          ``(3) Independent financial review requirements.--A 
        certified professional employer organization meets the 
        requirements of this paragraph if such organization--
                  ``(A) has, as of the most recent audit date, 
                caused to be prepared and provided to the 
                Secretary (in such manner as the Secretary may 
                prescribe) an opinion of an independent 
                certified public accountant as to whether the 
                certified professional employer organization's 
                financial statements are presented fairly in 
                accordance with generally accepted accounting 
                principles, and
                  ``(B) provides to the Secretary an assertion 
                regarding Federal employment tax payments and 
                an examination level attestation on such 
                assertion from an independent certified public 
                accountant not later than the last day of the 
                second month beginning after the end of each 
                calendar quarter.
        Such assertion shall state that the organization has 
        withheld and made deposits of all taxes imposed by 
        chapters 21, 22, and 24 in accordance with regulations 
        imposed by the Secretary for such calendar quarter and 
        such examination level attestation shall state that 
        such assertion is fairly stated, in all material 
        respects.
          ``(4) Controlled group rules.--For purposes of the 
        requirements of paragraphs (2) and (3), all certified 
        professional employer organizations that are members of 
        a controlled group within the meaning of sections 
        414(b) and (c) shall be treated as a single 
        organization.
          ``(5) Failure to file assertion and attestation.--If 
        the certified professional employer organization fails 
        to file the assertion and attestation required by 
        paragraph (3) with respect to any calendar quarter, 
        then the requirements of paragraph (3) with respect to 
        such failure shall be treated as not satisfied for the 
        period beginning on the due date for such attestation.
          ``(6) Audit date.--For purposes of paragraph (3)(A), 
        the audit date shall be six months after the completion 
        of the organization's fiscal year.
  ``(d) Suspension and Revocation Authority.--The Secretary may 
suspend or revoke a certification of any person under 
subsection (b) for purposes of section 3511 if the Secretary 
determines that such person is not satisfying the agreements or 
requirements of subsections (b) or (c), or fails to satisfy 
applicable accounting, reporting, payment, or deposit 
requirements.
  ``(e) Work Site Employee.--For purposes of this title--
          ``(1) In general.--The term `work site employee' 
        means, with respect to a certified professional 
        employer organization, an individual who--
                  ``(A) performs services for a customer 
                pursuant to a contract which is between such 
                customer and the certified professional 
                employer organization and which meets the 
                requirements of paragraph (2), and
                  ``(B) performs services at a work site 
                meeting the requirements of paragraph (3).
          ``(2) Service contract requirements.--A contract 
        meets the requirements of this paragraph with respect 
        to an individual performing services for a customer if 
        such contract is in writing and provides that the 
        certified professional employer organization shall--
                  ``(A) assume responsibility for payment of 
                wages to such individual, without regard to the 
                receipt or adequacy of payment from the 
                customer for such services,
                  ``(B) assume responsibility for reporting, 
                withholding, and paying any applicable taxes 
                under subtitle C, with respect to such 
                individual's wages, without regard to the 
                receipt or adequacy of payment from the 
                customer for such services,
                  ``(C) assume responsibility for any employee 
                benefits which the service contract may require 
                the certified professional employer 
                organization to provide, without regard to the 
                receipt or adequacy of payment from the 
                customer for such benefits,
                  ``(D) assume responsibility for recruiting, 
                hiring, and firing workers in addition to the 
                customer's responsibility for recruiting, 
                hiring, and firing workers,
                  ``(E) maintain employee records relating to 
                such individual, and
                  ``(F) agree to be treated as a certified 
                professional employer organization for purposes 
                of section 3511 with respect to such 
                individual.
          ``(3) Work site coverage requirement.--The 
        requirements of this paragraph are met with respect to 
        an individual if at least 85 percent of the individuals 
        performing services for the customer at the work site 
        where such individual performs services are subject to 
        1 or more contracts with the certified professional 
        employer organization which meet the requirements of 
        paragraph (2) (but not taking into account those 
        individuals who are excluded employees within the 
        meaning of section 414(q)(5)).
  ``(f) Public Disclosure.--The Secretary shall make available 
to the public the name and address of--
          ``(1) each person certified as a professional 
        employer organization under subsection (a), and
          ``(2) each person whose certification as a 
        professional employer organization is suspended or 
        revoked under subsection (d).
  ``(g) Determination of Employment Status.--Except to the 
extent necessary for purposes of section 3511, nothing in this 
section shall be construed to affect the determination of who 
is an employee or employer for purposes of this title.
  ``(h) Regulations.--The Secretary shall prescribe such 
regulations as may be necessary or appropriate to carry out the 
purposes of this section.''.
  (c) Conforming Amendments.--
          (1) Section 3302 is amended by adding at the end the 
        following new subsection:
  ``(h) Treatment of Certified Professional Employer 
Organizations.--If a certified professional employer 
organization (as defined in section 7705), or a customer of 
such organization, makes a contribution to the State's 
unemployment fund with respect to wages paid to a work site 
employee, such certified professional employer organization 
shall be eligible for the credits available under this section 
with respect to such contribution.''.
          (2) Section 3303(a) is amended--
                  (A) by striking the period at the end of 
                paragraph (3) and inserting ``; and'' and by 
                inserting after paragraph (3) the following new 
                paragraph:
          ``(4) if the taxpayer is a certified professional 
        employer organization (as defined in section 7705) that 
        is treated as the employer under section 3511, such 
        certified professional employer organization is 
        permitted to collect and remit, in accordance with 
        paragraphs (1), (2), and (3), contributions during the 
        taxable year to the State unemployment fund with 
        respect to a work site employee.'', and
                  (B) in the last sentence--
                          (i) by striking ``paragraphs (1), 
                        (2), and (3)'' and inserting 
                        ``paragraphs (1), (2), (3), and (4)'', 
                        and
                          (ii) by striking ``paragraph (1), 
                        (2), or (3)'' and inserting ``paragraph 
                        (1), (2), (3), or (4)''.
          (3) Section 6053(c) is amended by adding at the end 
        the following new paragraph:
          ``(8) Certified professional employer 
        organizations.--For purposes of any report required by 
        this subsection, in the case of a certified 
        professional employer organization that is treated 
        under section 3511 as the employer of a work site 
        employee, the customer with respect to whom a work site 
        employee performs services shall be the employer for 
        purposes of reporting under this section and the 
        certified professional employer organization shall 
        furnish to the customer and the Secretary any 
        information the Secretary prescribes as necessary to 
        complete such reporting no later than such time as the 
        Secretary shall prescribe.''.
          (4) Section 6652 is amended by adding at the end the 
        following new subsection:
  ``(n) Failure to Make Reports Required Under Sections 3511, 
6053(c)(8), and 7705.--In the case of a failure to make a 
report required under section 3511, 6053(c)(8), or 7705 which 
contains the information required by such section on the date 
prescribed therefor (determined with regard to any extension of 
time for filing), there shall be paid (on notice and demand by 
the Secretary and in the same manner as tax) by the person 
failing to make such report, an amount equal to $50 for each 
report with respect to which there was such a failure. In the 
case of any failure due to negligence or intentional disregard 
the preceding sentence shall be applied by substituting `$100' 
for `$50'.''.
  (d) Clerical Amendments.--
          (1) The table of sections for chapter 25 is amended 
        by adding at the end the following new item:

``Sec. 3511. Certified professional employer organizations.''.

          (2) The table of sections for chapter 79 is amended 
        by inserting after the item relating to section 7704 
        the following new item:

``Sec. 7705. Certified professional employer organizations.''.

  (f) User Fees.--Section 7528(b) is amended by adding at the 
end the following new paragraph:
          ``(4) Certified professional employer 
        organizations.--The fee charged under the program in 
        connection with the certification by the Secretary of a 
        professional employer organization under section 7705 
        shall be an annual fee not to exceed $1,000 per 
        year.''.
  (g) Effective Dates.--
          (1) In general.--The amendments made by this section 
        shall apply with respect to wages for services 
        performed on or after January 1 of the first calendar 
        year beginning more than 12 months after the date of 
        the enactment of this Act.
          (2) Certification program.--The Secretary of the 
        Treasury shall establish the certification program 
        described in section 7705(b) of the Internal Revenue 
        Code of 1986, as added by subsection (b), not later 
        than 6 months before the effective date determined 
        under paragraph (1).
  (h) No Inference.--Nothing contained in this section or the 
amendments made by this section shall be construed to create 
any inference with respect to the determination of who is an 
employee or employer--
          (1) for Federal tax purposes (other than the purposes 
        set forth in the amendments made by this section), or
          (2) for purposes of any other provision of law.

SEC. 207. EXCLUSION OF DIVIDENDS FROM CONTROLLED FOREIGN CORPORATIONS 
                    FROM THE DEFINITION OF PERSONAL HOLDING COMPANY 
                    INCOME FOR PURPOSES OF THE PERSONAL HOLDING COMPANY 
                    RULES.

  (a) In General.--Section 543(a)(1) is amended--
          (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively, and
          (2) by inserting after subparagraph (B) the 
        following:
                  ``(C) dividends received by a United States 
                shareholder (as defined in section 951(b)) from 
                a controlled foreign corporation (as defined in 
                section 957(a)),''.
  (b) Effective Date.--The amendments made by this Act shall 
apply to taxable years ending on or after the date of the 
enactment of this Act.

SEC. 208. INFLATION ADJUSTMENT FOR CERTAIN CIVIL PENALTIES UNDER THE 
                    INTERNAL REVENUE CODE OF 1986.

  (a) Failure to File Tax Return or Pay Tax.--Section 6651 is 
amended by adding at the end the following new subsection:
  ``(i) Adjustment for Inflation.--
          ``(1) In general.--In the case of any return required 
        to be filed in a calendar year beginning after 2014, 
        the $135 dollar amount under subsection (a) shall be 
        increased by such dollar amount multiplied by the cost-
        of-living adjustment determined under section 1(f)(3) 
        determined by substituting `calendar year 2013' for 
        `calendar year 1992' in subparagraph (B) thereof.
          ``(2) Rounding.--If any amount adjusted under 
        paragraph (1) is not a multiple of $5, such amount 
        shall be rounded to the next lowest multiple of $5.''.
  (b) Failure to File Certain Information Returns, Registration 
Statements, etc.--
          (1) In general.--Section 6652(c) is amended by adding 
        at the end the following new paragraph:
          ``(6) Adjustment for inflation.--
                  ``(A) In general.--In the case of any failure 
                relating to a return required to be filed in a 
                calendar year beginning after 2014, each of the 
                dollar amounts under paragraphs (1), (2), and 
                (3) shall be increased by such dollar amount 
                multiplied by the cost-of-living adjustment 
                determined under section 1(f)(3) determined by 
                substituting `calendar year 2013' for `calendar 
                year 1992' in subparagraph (B) thereof.
                  ``(B) Rounding.--If any amount adjusted under 
                subparagraph (A)--
                          ``(i) is not less than $5,000 and is 
                        not a multiple of $500, such amount 
                        shall be rounded to the next lowest 
                        multiple of $500, and
                          ``(ii) is not described in clause (i) 
                        and is not a multiple of $5, such 
                        amount shall be rounded to the next 
                        lowest multiple of $5.''.
          (2) Conforming amendments.--
                  (A) The last sentence of section 
                6652(c)(1)(A) is amended by striking ``the 
                first sentence of this subparagraph shall be 
                applied by substituting `$100' for `$20' and'' 
                and inserting ``in applying the first sentence 
                of this subparagraph, the amount of the penalty 
                for each day during which a failure continues 
                shall be $100 in lieu of the amount otherwise 
                specified, and''.
                  (B) Section 6652(c)(2)(C)(ii) is amended by 
                striking ``the first sentence of paragraph 
                (1)(A)'' and all that follows and inserting 
                ``in applying the first sentence of paragraph 
                (1)(A), the amount of the penalty for each day 
                during which a failure continues shall be $100 
                in lieu of the amount otherwise specified, and 
                in lieu of applying the second sentence of 
                paragraph (1)(A), the maximum penalty under 
                paragraph (1)(A) shall not exceed $50,000, 
                and''.
  (c) Other Assessable Penalties With Respect to the 
Preparation of Tax Returns for Other Persons.--Section 6695 is 
amended by adding at the end the following new subsection:
  ``(h) Adjustment for Inflation.--
          ``(1) In general.--In the case of any failure 
        relating to a return or claim for refund filed in a 
        calendar year beginning after 2014, each of the dollar 
        amounts under subsections (a), (b), (c), (d), (e), (f), 
        and (g) shall be increased by such dollar amount 
        multiplied by the cost-of-living adjustment determined 
        under section 1(f)(3) determined by substituting 
        `calendar year 2013' for `calendar year 1992' in 
        subparagraph (B) thereof.
          ``(2) Rounding.--If any amount adjusted under 
        subparagraph (A)--
                  ``(A) is not less than $5,000 and is not a 
                multiple of $500, such amount shall be rounded 
                to the next lowest multiple of $500, and
                  ``(B) is not described in clause (i) and is 
                not a multiple of $5, such amount shall be 
                rounded to the next lowest multiple of $5.''.
  (d) Failure to File Partnership Return.--Section 6698 is 
amended by adding at the end the following new subsection:
  ``(e) Adjustment for Inflation.--
          ``(1) In general.--In the case of any return required 
        to be filed in a calendar year beginning after 2014, 
        the $195 dollar amount under subsection (b)(1) shall be 
        increased by such dollar amount multiplied by the cost-
        of-living adjustment determined under section 1(f)(3) 
        determined by substituting `calendar year 2013' for 
        `calendar year 1992' in subparagraph (B) thereof.
          ``(2) Rounding.--If any amount adjusted under 
        paragraph (1) is not a multiple of $5, such amount 
        shall be rounded to the next lowest multiple of $5.''.
  (e) Failure to File S Corporation Return.--Section 6699 is 
amended by adding at the end the following new subsection:
  ``(e) Adjustment for Inflation.--
          ``(1) In general.--In the case of any return required 
        to be filed in a calendar year beginning after 2014, 
        the $195 dollar amount under subsection (b)(1) shall be 
        increased by such dollar amount multiplied by the cost-
        of-living adjustment determined under section 1(f)(3) 
        determined by substituting `calendar year 2013' for 
        `calendar year 1992' in subparagraph (B) thereof.
          ``(2) Rounding.--If any amount adjusted under 
        paragraph (1) is not a multiple of $5, such amount 
        shall be rounded to the next lowest multiple of $5.''.
  (f) Failure to File Correct Information Returns.--Section 
6721(f)(1) is amended by striking ``For each fifth calendar 
year beginning after 2012'' and inserting ``In the case of any 
failure relating to a return required to be filed in a calendar 
year beginning after 2014''.
  (g) Failure to Furnish Correct Payee Statements.--Section 
6722(f)(1) is amended by striking ``For each fifth calendar 
year beginning after 2012'' and inserting ``In the case of any 
failure relating to a statement required to be furnished in a 
calendar year beginning after 2014''.
  (h) Effective Date.--The amendments made by this section 
shall apply to returns required to be filed after December 31, 
2014.

SEC. 209. INCREASE IN CONTINUOUS LEVY.

  (a) In General.--Paragraph (3) of section 6331(h) is amended 
by striking the period at the end and inserting ``and by 
substituting `30 percent' for `15 percent' in the case of any 
specified payment due to a Medicare provider or supplier under 
title XVIII of the Social Security Act.''.
  (b) Effective Date.--The amendment made by this section shall 
apply to payments made after 180 days after the date of the 
enactment of this Act.
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