49–008 

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 


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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): 


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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 


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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 


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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 


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‘‘(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 BENE- FICIARY.—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 DIS- ABILITY 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 


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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 


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‘‘(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 


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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: 


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‘‘(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— 


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(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 desVerDate Sep 11 2014 05:55 Dec 03, 2014 Jkt 049008 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\HR643.XXX HR643

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12 

ignated 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’’. 


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13 

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. 


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‘‘(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. 


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‘‘(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 DE- FINED.—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 materiVerDate Sep 11 2014 05:55 Dec 03, 2014 Jkt 049008 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\HR\OC\HR643.XXX HR643

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ally 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 


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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 


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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 ORGANI- ZATIONS.—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.’’. 


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(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: 


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‘‘(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, REGISTRA- TION 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 


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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 PREPA- RATION 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 

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ing 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. 

Æ 


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