I 

113TH CONGRESS 

1ST SESSION H. R. 243 

To adopt the seven immediate reforms recommended by the National Commission on Fiscal Responsibility and Reform to reduce spending and make 

the Federal Government more efficient. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 14, 2013 

Mr. ROSS introduced the following bill; which was referred to the Committee 

on Ways and Means, and in addition to the Committees on Oversight and 

Government Reform, House Administration, Rules, and the Budget, for 

a period to be subsequently determined by the Speaker, in each case for 

consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To adopt the seven immediate reforms recommended by the 

National Commission on Fiscal Responsibility and Reform to reduce spending and make the Federal Government more efficient. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) IN GENERAL.—This Act may be cited as the 

5 ‘‘Bowles-Simpson Plan of Lowering America’s Debt Act’’. 

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1 (b) TABLE OF CONTENTS.—The table of contents for 

2 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—REDUCED EXPENDITURES 

Sec. 101. Reduction in appropriations to the White House and Congress. 

Sec. 102. Denial of certain annual pay adjustments for Members of Congress. 

Sec. 103. Pay freeze for Federal employees. 

Sec. 104. Reduction in Federal workforce. 

Sec. 105. Reduction in Government travel costs. 

Sec. 106. Limitation on Government printing costs. 

Sec. 107. Reduction in Federal vehicle costs. 

Sec. 108. Sale of excess Federal property. 

Sec. 109. Prohibition on earmarks. 

TITLE II—TAX REFORM 

Sec. 200. Amendment of 1986 Code. 

Subtitle A—Tax Rates 

Sec. 201. Individual rates. 

Sec. 202. Repeal of alternative minimum tax on individuals. 

Sec. 203. Permanent repeal of personal exemption phaseout. 

Sec. 204. Permanent repeal of phaseout of overall limitation on itemized deductions. 

Sec. 205. Corporate income tax rate reduced to flat rate of 20 percent. 

Sec. 206. Renewed temporary dividends received deduction. 

Subtitle B—Elimination of Tax Expenditures 

Sec. 211. Termination of credit for increasing research activities. 

Sec. 212. Termination of deduction for intangible drilling and development 

costs. 

Sec. 213. Repeal of domestic production activities deduction with respect to 

production of coal, lignite, or oil shale. 

Sec. 214. Repeal percentage depletion for oil and natural gas wells. 

Sec. 215. Termination of credit for electricity produced from certain renewable 

resources. 

Sec. 216. Termination of energy credit. 

Sec. 217. Repeal of credit for alcohol used as fuel. 

Sec. 218. Repeal of credit for alcohol fuel, biodiesel, and alternative fuel mixtures. 

Sec. 219. Repeal of credit for biodiesel and renewable diesel used as fuel. 

Sec. 220. Repeal of credit for certain plug-in electric vehicles. 

Sec. 221. Early termination of credit for qualified fuel cell motor vehicles. 

Sec. 222. Repeal of deduction for energy conservation subsidies provided by 

public utilities. 

Sec. 223. Repeal of qualifying advanced coal project credit. 

Sec. 224. Repeal of qualifying gasification project credit. 

Sec. 225. Repeal of special allowance for cellulosic biofuel plant property. 

Sec. 226. Repeal of election to expense certain refineries. 

Sec. 227. Repeal of 2-year amortization of geological and geophysical expenditures. 

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Sec. 228. Repeal of deduction for energy efficient commercial building property. 

Sec. 229. Repeal of credit for construction of new energy efficient homes. 

Sec. 230. Repeal of credit for energy efficient appliances. 

Sec. 231. Repeal of credit for residential energy efficient property. 

Sec. 232. Repeal of advanced energy project credit. 

Sec. 233. Repeal of credit for carbon dioxide sequestration. 

Sec. 234. Repeal of low-income housing credit. 

Sec. 235. Repeal of Hope and Lifetime Learning Credits. 

Sec. 236. Repeal of work opportunity tax credit. 

Sec. 237. Repeal of credit for expenses for household and dependent care services necessary for gainful employment. 

Sec. 238. Repeal of credit for adoption expenses. 

Sec. 239. Repeal of credit for expenditures to provide access to disabled individuals. 

Sec. 240. Repeal of earned income tax credit. 

Sec. 241. Repeal of energy conservation subsidies provided by public utilities. 

Sec. 242. Repeal of election to expense certain refinery property. 

Sec. 243. Repeal of deduction for endangered species recovery expenditures. 

Sec. 244. Repeal of exclusion of cancellation of indebtedness income of solvent 

farmers. 

Sec. 245. Repeal of alternative minimum tax treatment of certain property and 

casualty insurance companies. 

Sec. 246. Repeal of small life insurance company deduction. 

Sec. 247. Termination of $25,000 exemption from passive loss rules for rental 

real estate activities. 

Sec. 248. Repeal of discharge of indebtedness exclusion. 

Sec. 249. Repeal of certain exceptions for imputed interest rules. 

Sec. 250. Termination of partial exclusion for gain from certain small business 

stock. 

Sec. 251. Termination of treatment of losses on small business stock as ordinary. 

Sec. 252. Repeal of student loan interest deduction. 

Sec. 253. Repeal of deduction of tuition and related expenses. 

Sec. 254. Repeal of gross income exclusion for United States savings bonds 

used to pay higher education expenses. 

Sec. 255. Elimination of personal exemption for students age 19 and older. 

Sec. 256. Elimination of above the line deduction for certain expenses of elementary and secondary school teachers. 

Sec. 257. Elimination of gross income exclusion for discharge of certain student 

loan debt. 

Sec. 258. Repeal of exclusion from gross income for rental value of parsonages. 

Sec. 259. Repeal of exclusion from gross income for benefits provided to volunteer firefighters and emergency medical responders. 

Sec. 260. Repeal of special treatment of Blue Cross and Blue Shield organizations, etc. 

Sec. 261. Sense of the House regarding a territorial tax system. 

Subtitle C—Phaseout of Tax Expenditures 

Sec. 271. Five-year phaseout of certain tax expenditures. 

Subtitle D—Special Status 

Sec. 381. Termination of qualified energy conservation bonds. 

Sec. 382. Termination of new clean renewable energy bonds. 

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Sec. 383. Termination of exempt facility bond treatment for water, sewage, and 

solid waste facilities. 

Sec. 384. Termination of expensing and amortization of reforestation expenditures and expensing of timber-growing costs. 

Sec. 385. Termination of deferral of gain on sales of stock in agricultural refiners and processors to eligible farm cooperatives. 

Sec. 386. Termination of election to expense certain depreciable business assets. 

Sec. 387. Termination of qualified small issue bonds. 

Sec. 388. Termination of exempt facility bond treatment for qualified highway 

or surface freight transfer facilities. 

Sec. 389. Termination of exempt facility bond treatment for airports, docks, 

and wharves. 

Sec. 390. Termination of tribal economic development bonds. 

Sec. 391. Termination of exclusion from gross income of United States savings 

bonds interest used to pay higher education expenses. 

Sec. 392. Termination of qualified zone academy bonds. 

Sec. 393. Termination of exempt facility bond treatment for qualified public 

educational facilities. 

Sec. 394. Termination of hospital bonds. 

1 TITLE I—REDUCED 

2 EXPENDITURES 

3 SEC. 101. REDUCTION IN APPROPRIATIONS TO THE WHITE 

4 HOUSE AND CONGRESS. 

5 (a) APPROPRIATIONS TO THE WHITE HOUSE.—Not6 withstanding any other provision of law, the total amount 

7 of funds appropriated to the appropriations account under 

8 the heading ‘‘THE WHITE HOUSE’’ under the heading 

9 ‘‘EXECUTIVE OFFICE OF THE PRESIDENT AND 

10 FUNDS APPROPRIATED TO THE PRESIDENT’’ for 

11 each of fiscal years 2014 through 2018 may not exceed 

12 85 percent of the total amount of funds appropriated to 

13 that account for fiscal year 2013. 

14 (b) APPROPRIATIONS TO CONGRESS.—Notwith15 standing any other provision of law, the total amount of 

16 funds appropriated under the headings ‘‘SENATE’’ and 

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1 ‘‘HOUSE OF REPRESENTATIVES’’ for each of fiscal 

2 years 2014 through 2018 may not exceed 85 percent of 

3 the total amount of funds appropriated under those head4 ings for fiscal year 2013. 

5 SEC. 102. DENIAL OF CERTAIN ANNUAL PAY ADJUSTMENTS 

6 FOR MEMBERS OF CONGRESS. 

7 Notwithstanding any other provision of law, no ad8 justment shall be made under section 601(a) of the Legis9 lative Reorganization Act of 1946 (2 U.S.C. 31) during 

10 fiscal year 2014, 2015, or 2016. 

11 SEC. 103. PAY FREEZE FOR FEDERAL EMPLOYEES. 

12 (a) IN GENERAL.—Section 147 of the Continuing 

13 Appropriations Act, 2011 (Public Law 111–242; 5 U.S.C. 

14 5303 note), as amended by section 114(a) of the Con15 tinuing Appropriations Resolution, 2013 (Public Law 

16 112–175; 126 Stat. 1316) is amended— 

17 (1) in subsection (b)(1), by striking the matter 

18 after ‘‘ending on’’ and before ‘‘shall be made’’ and 

19 inserting ‘‘December 31, 2015’’; and 

20 (2) in subsection (c), by striking the matter 

21 after ‘‘ending on’’ and before ‘‘no senior executive’’ 

22 and inserting ‘‘December 31, 2015’’. 

23 (b) ELIMINATION OF DELAYED ADJUSTMENT.—Sec24 tion 114(b) of the Continuing Appropriations Resolution, 

25 2013 is repealed. 

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1 SEC. 104. REDUCTION IN FEDERAL WORKFORCE. 

2 (a) DEFINITION.—For the purpose of this section— 

3 (1) the term ‘‘total number of Federal employ4 ees’’ means the total number of Federal employees 

5 in all agencies; 

6 (2) the term ‘‘Federal employee’’ means an em7 ployee as defined by section 2105 of title 5, United 

8 States Code; and 

9 (3) the term ‘‘agency’’ means an Executive 

10 agency as defined by section 105 of title 5, United 

11 States Code, excluding the Government Account12 ability Office. 

13 (b) LIMITATION.—The President, through the Office 

14 of Management and Budget (in consultation with the Of15 fice of Personnel Management), shall take appropriate 

16 measures to ensure that, effective beginning in fiscal year 

17 2017, the total number of Federal employees (as deter18 mined under subsection (c)) shall not exceed 90 percent 

19 of the total number of Federal employees as of September 

20 30, 2013 (as so determined). 

21 (c) MONITORING AND NOTIFICATION.—The Office of 

22 Management and Budget (in consultation with the Office 

23 of Personnel Management)— 

24 (1) shall continuously monitor all agencies and 

25 make a determination, as of September 30, 2013, 

26 and the last day of each quarter of each fiscal year 

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1 beginning thereafter, as to whether or not the total 

2 number of Federal employees exceeds the maximum 

3 number allowable under subsection (b); and 

4 (2) whenever a determination under paragraph 

5 (1) is made that the total number of Federal em6 ployees exceeds the maximum number allowable 

7 under subsection (b), shall provide written notice to 

8 that effect to the President and Congress within 14 

9 days after the last day of the quarter to which such 

10 determination relates. 

11 (d) COMPLIANCE.—Whenever, with respect to the 

12 quarter ending on September 30, 2016, or any subsequent 

13 quarter, the Office of Management and Budget provides 

14 written notice under subsection (c)(2) that the total num15 ber of Federal employees exceeds the maximum number 

16 allowable under subsection (b), no agency may thereafter 

17 appoint any employee to fill any vacancy within such agen18 cy until the Office of Management and Budget provides 

19 written notice to the President and Congress of a deter20 mination under subsection (c)(1) that the total number 

21 of Federal employees no longer exceeds the maximum 

22 number allowable under subsection (b). Any notice under 

23 the preceding sentence shall be provided within 14 days 

24 after the last day of the quarter to which the determina25 tion relates. 

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1 (e) WAIVER.— 

2 (1) EMERGENCIES.—This section may be 

3 waived upon a determination by the President 

4 that— 

5 (A) the existence of a state of war or other 

6 national security concern so requires; or 

7 (B) the existence of an extraordinary 

8 emergency threatening life, health, public safe9 ty, property, or the environment so requires. 

10 (2) AGENCY EFFICIENCY OR CRITICAL MIS11 SION.—This section may be waived, with respect to 

12 a particular position or category of positions in an 

13 agency, upon a determination by the President that 

14 the efficiency of the agency or the performance of a 

15 critical agency mission so requires. 

16 (f) REPLACEMENT RATE.—To the extent necessary 

17 to achieve the workforce reduction required by subsection 

18 (b), the Office of Management and Budget (in consulta19 tion with the Office of Personnel Management) shall take 

20 appropriate measures to ensure that agencies shall ap21 point no more than 1 employee for every 3 employees retir22 ing or otherwise separating from Government service after 

23 the date of the enactment of this Act. This subsection 

24 shall cease to apply after September 30, 2016. 

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1 (g) COUNTING RULE.—For purposes of this section, 

2 any determination of the number of employees in an agen3 cy shall be expressed on a full-time equivalent basis. 

4 (h) LIMITATION ON PROCUREMENT OF SERVICE

5 CONTRACTS.—The President, through the Office of Man6 agement and Budget (in consultation with the Office of 

7 Personnel Management), shall take appropriate measures 

8 to ensure that there is no increase in the procurement of 

9 service contracts by reason of the enactment of this Act, 

10 except in cases in which a cost comparison demonstrates 

11 that such contracts would be to the financial advantage 

12 of the Government. 

13 SEC. 105. REDUCTION IN GOVERNMENT TRAVEL COSTS. 

14 (a) DEFINITION.—In this section, the term ‘‘agency’’ 

15 means an executive agency as defined under section 105 

16 of title 5, United States Code. 

17 (b) REDUCTION.—Notwithstanding any other provi18 sion of law, the total amount of funds appropriated to the 

19 appropriations account providing for travel expenses for 

20 each agency for each of fiscal years 2014, 2015, 2016, 

21 2017, and 2018 may not exceed 80 percent of the total 

22 amount of funds appropriated to each of those appropria23 tions accounts for fiscal year 2013. 

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1 SEC. 106. LIMITATION ON GOVERNMENT PRINTING COSTS. 

2 Not later than 180 days after the date of enactment 

3 of this Act, the Director of the Office of Management and 

4 Budget shall coordinate with the heads of Federal depart5 ments and independent agencies to— 

6 (1) determine which Government publications 

7 could be available on Government websites and no 

8 longer printed and to devise a strategy to reduce 

9 overall Government printing costs over the 10-year 

10 period beginning with fiscal year 2014, except that 

11 the Director shall ensure that essential printed docu12 ments prepared for social security recipients, medi13 care beneficiaries, and other populations in areas 

14 with limited internet access or use continue to re15 main available; 

16 (2) establish government-wide Federal guide17 lines on employee printing; 

18 (3) issue on the Office of Management and 

19 Budget’s public website the results of a cost-benefit 

20 analysis on implementing a digital signature system 

21 and on establishing employee printing identification 

22 systems, such as the use of individual employee 

23 cards or codes, to monitor the amount of printing 

24 done by Federal employees; except that the Director 

25 of the Office of Management and Budget shall en26 sure that Federal employee printing costs unrelated 

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1 to national defense, homeland security, border secu2 rity, national disasters, and other emergencies do 

3 not exceed $860,000,000 annually; and 

4 (4) issue guidelines requiring every department, 

5 agency, commission or office to list at a prominent 

6 place near the beginning of each publication distrib7 uted to the public and issued or paid for by the Fed8 eral Government— 

9 (A) the name of the issuing agency, de10 partment, commission or office; 

11 (B) the total number of copies of the docu12 ment printed; 

13 (C) the collective cost of producing and 

14 printing all of the copies of the document; and 

15 (D) the name of the firm publishing the 

16 document. 

17 SEC. 107. REDUCTION IN FEDERAL VEHICLE COSTS. 

18 Notwithstanding any other provision of law, for fiscal 

19 year 2014 and each fiscal year thereafter, the amount 

20 made available to the General Services Administration for 

21 the acquisition of new vehicles for the Federal fleet shall 

22 not exceed an amount equal to 80 percent of the amount 

23 made available for the acquisition of those vehicles for fis24 cal year 2012. 

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1 SEC. 108. SALE OF EXCESS FEDERAL PROPERTY. 

2 (a) IN GENERAL.—Chapter 5 of subtitle I of title 40, 

3 United States Code, is amended by adding at the end the 

4 following: 

5 ‘‘SUBCHAPTER VII—EXPEDITED DISPOSAL OF 

6 REAL PROPERTY 

7 ‘‘§ 621. Definitions 

8 ‘‘In this subchapter: 

9 ‘‘(1) DIRECTOR.—The term ‘Director’ means 

10 the Director of the Office of Management and Budg11 et. 

12 ‘‘(2) LANDHOLDING AGENCY.—The term ‘land13 holding agency’ means a landholding agency (as de14 fined in section 501(i) of the McKinney-Vento 

15 Homeless Assistance Act (42 U.S.C. 11411(i))). 

16 ‘‘(3) REAL PROPERTY.— 

17 ‘‘(A) IN GENERAL.—The term ‘real prop18 erty’ means— 

19 ‘‘(i) a parcel of real property under 

20 the administrative jurisdiction of the Fed21 eral Government that is— 

22 ‘‘(I) excess; 

23 ‘‘(II) surplus; 

24 ‘‘(III) underperforming; or 

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1 ‘‘(IV) otherwise not meeting the 

2 needs of the Federal Government, as 

3 determined by the Director; and 

4 ‘‘(ii) a building or other structure lo5 cated on real property described in clause 

6 (i). 

7 ‘‘(B) EXCLUSION.—The term ‘real prop8 erty’ excludes any parcel of real property, and 

9 any building or other structure located on real 

10 property, that is to be closed or realigned under 

11 the Defense Authorization Amendments and 

12 Base Closure and Realignment Act (10 U.S.C. 

13 2687 note; Public Law 100–526). 

14 ‘‘§ 622. Disposal program 

15 ‘‘(a) IN GENERAL.—Except as provided in subsection 

16 (e), the Director shall, by sale or auction, dispose of a 

17 quantity of real property with an aggregate value of not 

18 less than $100,000,000 that, as determined by the Direc19 tor, is not being used, and will not be used, to meet the 

20 needs of the Federal Government for the period of fiscal 

21 years 2014 through 2019. 

22 ‘‘(b) RECOMMENDATIONS.—The head of each land23 holding agency shall recommend to the Director real prop24 erty for disposal under subsection (a). 

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1 ‘‘(c) SELECTION OF PROPERTIES.—After receiving 

2 recommendations of candidate real property under sub3 section (b), the Director— 

4 ‘‘(1) with the concurrence of the head of each 

5 landholding agency, may select the real property for 

6 disposal under subsection (a); and 

7 ‘‘(2) shall notify the recommending landholding 

8 agency head of the selection of the real property. 

9 ‘‘(d) WEBSITE.—The Director shall ensure that all 

10 real properties selected for disposal under this section are 

11 listed on a website that shall— 

12 ‘‘(1) be updated routinely; and 

13 ‘‘(2) include the functionality to allow any 

14 member of the public, at the option of the member, 

15 to receive updates of the list through electronic mail. 

16 ‘‘(e) TRANSFER OF PROPERTY.—The Director may 

17 transfer real property selected for disposal under this sec18 tion to the Department of Housing and Urban Develop19 ment if the Secretary of Housing and Urban Development 

20 determines that the real property is suitable for use in 

21 assisting the homeless.’’. 

22 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

23 The table of sections for chapter 5 of subtitle I of title 

24 40, United States Code, is amended by inserting after the 

25 item relating to section 611 the following: 

‘‘SUBCHAPTER VII—EXPEDITED DISPOSAL OF REAL PROPERTY

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‘‘Sec. 621. Definitions. 

‘‘Sec. 622. Disposal program.’’. 

1 SEC. 109. PROHIBITION ON EARMARKS. 

2 Section 312 of the Congressional Budget Act of 1974 

3 is amended by inserting at the end the following: 

4 ‘‘(g) PROHIBITION ON EARMARKS.— 

5 ‘‘(1) BILLS AND JOINT RESOLUTIONS.— 

6 ‘‘(A) IN GENERAL.—It shall not be in 

7 order in the Senate or the House of Represent8 atives to consider a bill, resolution, or amend9 ment that includes an earmark, limited tax ben10 efit, or limited tariff benefit. 

11 ‘‘(B) PROCEDURE.—In the Senate, a point 

12 of order under this paragraph may be raised by 

13 a Senator as provided in section 313(e) of the 

14 Congressional Budget Act of 1974. 

15 ‘‘(2) CONFERENCE REPORT.— 

16 ‘‘(A) IN GENERAL.—It shall not be in 

17 order in the Senate or the House of Represent18 atives to vote on the adoption of a report of a 

19 committee of conference if the report includes 

20 an earmark, limited tax benefit, or limited tariff 

21 benefit. 

22 ‘‘(B) PROCEDURE.—When the Senate is 

23 considering a conference report on, or an 

24 amendment between the Houses in relation to, 

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1 an appropriation Act, upon a point of order 

2 being made by any Senator pursuant to this 

3 paragraph, and such point of order being sus4 tained, such material contained in such con5 ference report shall be deemed stricken, and the 

6 Senate shall proceed to consider the question of 

7 whether the Senate shall recede from its 

8 amendment and concur with a further amend9 ment, or concur in the House amendment with 

10 a further amendment, as the case may be, 

11 which further amendment shall consist of only 

12 that portion of the conference report or House 

13 amendment, as the case may be, not so strick14 en. Any such motion in the Senate shall be de15 batable under the same conditions as was the 

16 conference report. In any case in which such 

17 point of order is sustained against a conference 

18 report (or Senate amendment derived from such 

19 conference report by operation of this sub20 section), no further amendment shall be in 

21 order. 

22 ‘‘(3) WAIVER.—Any Senator may move to waive 

23 any or all points of order under this subsection by 

24 an affirmative vote of two-thirds of the Members, 

25 duly chosen and sworn. 

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1 ‘‘(4) DEFINITIONS.—For the purpose of this 

2 subsection— 

3 ‘‘(A) the term ‘earmark’ means a provision 

4 or report language included primarily at the re5 quest of a Senator or Member of the House of 

6 Representatives providing, authorizing, or rec7 ommending a specific amount of discretionary 

8 budget authority, credit authority, or other 

9 spending authority for a contract, loan, loan 

10 guarantee, grant, loan authority, or other ex11 penditure with or to an entity, or targeted to a 

12 specific State, locality or Congressional district, 

13 other than through a statutory or administra14 tive formula-driven or competitive award proc15 ess; 

16 ‘‘(B) the term ‘limited tax benefit’ means 

17 any revenue provision that— 

18 ‘‘(i) provides a Federal tax deduction, 

19 credit, exclusion, or preference to a par20 ticular beneficiary or limited group of 

21 beneficiaries under the Internal Revenue 

22 Code of 1986; and 

23 ‘‘(ii) contains eligibility criteria that 

24 are not uniform in application with respect 

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1 to potential beneficiaries of such provision; 

2 and 

3 ‘‘(C) the term ‘limited tariff benefit’ means 

4 a provision modifying the Harmonized Tariff 

5 Schedule of the United States in a manner that 

6 benefits 10 or fewer entities. 

7 ‘‘(5) APPLICATION.—This subsection shall not 

8 apply to any authorization of appropriations to a 

9 Federal entity if such authorization is not specifi10 cally targeted to a State, locality or congressional 

11 district.’’. 

12 TITLE II—TAX REFORM 

13 SEC. 200. AMENDMENT OF 1986 CODE. 

14 Except as otherwise expressly provided, whenever in 

15 this title an amendment or repeal is expressed in terms 

16 of an amendment to, or repeal of, a section or other provi17 sion, the reference shall be considered to be made to a 

18 section or other provision of the Internal Revenue Code 

19 of 1986. 

20 Subtitle A—Tax Rates 

21 SEC. 201. INDIVIDUAL RATES. 

22 (a) IN GENERAL.—Section 1(i) is amended to read 

23 as follows: 

24 ‘‘(i) POST-2012 RATE TABLE.— 

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1 ‘‘(1) IN GENERAL.—In the case of taxable years 

2 beginning after December 31, 2012, the following 

3 table shall apply in lieu of the tables under sub4 sections (a), (b), (c), (d), and (e): 

‘‘If taxable income is: The tax is: 

Not over $100,000 ........................ 10% of taxable income 

Over $100,000 ............................... $10,000, plus 20% of the excess over 

$100,000. 

5 ‘‘(2) INFLATION ADJUSTMENT.— 

6 ‘‘(A) IN GENERAL.—In the case of any 

7 taxable year beginning after 2013, the Sec8 retary shall prescribe, in the same manner as 

9 under subsection (f), a table which shall apply 

10 in lieu of the table under paragraph (1), except 

11 that subsection (f)(3)(B) shall be applied by 

12 substituting ‘2012’ for ‘1992’.’’. 

13 (b) MAXIMUM CAPITAL GAINS RATE.—Paragraph 

14 (1) of section 1(h) is amended to read as follows: 

15 ‘‘(1) IN GENERAL.—If a taxpayer has a net 

16 capital gain for any taxable year, the tax imposed by 

17 this section for such taxable year shall not exceed 

18 the sum of— 

19 ‘‘(A) a tax computed at the rates and in 

20 the same manner as if this subsection had not 

21 been enacted on taxable income reduced by the 

22 net capital gain; 

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1 ‘‘(B) 0 percent of so much of the net cap2 ital gain as does not exceed $1,000,000; and 

3 ‘‘(C) 20 percent of so much of net capital 

4 gain as exceeds $1,000,000.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 December 31, 2012. 

8 SEC. 202. REPEAL OF ALTERNATIVE MINIMUM TAX ON INDI9 VIDUALS. 

10 (a) IN GENERAL.—Section 55(a) is amended by add11 ing at the end the following new flush sentence: 

12 ‘‘For purposes of this title, the tentative minimum tax on 

13 any taxpayer other than a corporation for any taxable year 

14 beginning after December 31, 2012, shall be zero.’’. 

15 (b) EFFECTIVE DATE.—The amendment made by 

16 this section shall apply to taxable years beginning after 

17 December 31, 2012. 

18 SEC. 203. PERMANENT REPEAL OF PERSONAL EXEMPTION 

19 PHASEOUT. 

20 (a) IN GENERAL.—Section 151(d) is amended by 

21 striking paragraph (3). 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to taxable years beginning after 

24 December 31, 2012. 

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1 SEC. 204. PERMANENT REPEAL OF PHASEOUT OF OVERALL 

2 LIMITATION ON ITEMIZED DEDUCTIONS. 

3 (a) IN GENERAL.—Part I of subchapter B of chapter 

4 1 is amended by striking section 68 (and the item relating 

5 to such section in the table of sections for such part). 

6 (b) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to taxable years beginning after 

8 December 31, 2012. 

9 SEC. 205. CORPORATE INCOME TAX RATE REDUCED TO 

10 FLAT RATE OF 20 PERCENT. 

11 (a) IN GENERAL.—Paragraph (1) of section 11(b) is 

12 amended by striking ‘‘shall be the sum of—’’ and all that 

13 follows through the period at the end and inserting ‘‘shall 

14 be 20 percent of taxable income.’’. 

15 (b) PERSONAL SERVICE CORPORATIONS.—Para16 graph (2) of section 11(b) is amended by striking ‘‘35 per17 cent’’ and inserting ‘‘20 percent’’. 

18 (c) CONFORMING AMENDMENTS.— 

19 (1) Subsection (a) of section 1201 is amend20 ed— 

21 (A) by striking ‘‘35 percent (determined 

22 without regard to the last 2 sentences of section 

23 11(b))’’ and inserting ‘‘20 percent’’, and 

24 (B) by striking ‘‘35 percent’’ each place it 

25 appears (other than in the matter preceding 

26 paragraph (1)) and inserting ‘‘20 percent’’. 

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1 (2) Paragraphs (1), (2), and (6) of section 

2 1445(e) are each amended by striking ‘‘35 percent’’ 

3 and inserting ‘‘20 percent’’. 

4 (d) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 the date of the enactment of this Act. 

7 SEC. 206. RENEWED TEMPORARY DIVIDENDS RECEIVED DE8 DUCTION. 

9 (a) ELECTION.—Subsection (f) of section 965 is 

10 amended to read as follows: 

11 ‘‘(f) ELECTION.—The taxpayer may elect to apply 

12 this section to— 

13 ‘‘(1) the taxpayer’s last taxable year which be14 gins before the date of the enactment of this sub15 section, or 

16 ‘‘(2) the taxpayer’s first taxable year which be17 gins during the 1-year period beginning on such 

18 date. 

19 Such election may be made for a taxable year only if made 

20 on or before the due date (including extensions) for filing 

21 the return of tax for such taxable year.’’. 

22 (b) LIMITATION.—Paragraph (1) of section 965(b) is 

23 amended to read as follows: 

24 ‘‘(1) IN GENERAL.—The amount of dividends 

25 taken into account under subsection (a) shall not exmstockstill on DSK4VPTVN1PROD with 

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1 ceed the sum of the current and accumulated earn2 ings and profits described in section 959(c)(3) for 

3 the year a deduction is claimed under subsection (a), 

4 without diminution by reason of any distributions 

5 made during the election year, for all controlled for6 eign corporations of the United States shareholder.’’. 

7 (c) FAILURE TO MAINTAIN EMPLOYMENT LEV8 ELS.—Paragraph (4) of section 965(b) is amended to read 

9 as follows: 

10 ‘‘(4) REDUCTION IN BENEFITS FOR FAILURE

11 TO MAINTAIN EMPLOYMENT LEVELS.— 

12 ‘‘(A) IN GENERAL.—If, during the period 

13 consisting of the calendar month in which the 

14 taxpayer first receives a distribution described 

15 in subsection (a)(1) and the succeeding 23 cal16 endar months, the taxpayer does not maintain 

17 an average employment level at least equal to 

18 the taxpayer’s prior average employment, an 

19 additional amount equal to $25,000 multiplied 

20 by the number of employees by which the tax21 payer’s average employment level during such 

22 period falls below the prior average employment 

23 (but not exceeding the aggregate amount al24 lowed as a deduction pursuant to subsection 

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1 payer during the taxable year that includes the 

2 final day of such period. 

3 ‘‘(B) AVERAGE EMPLOYMENT LEVEL.— 

4 For purposes of this paragraph, the taxpayer’s 

5 average employment level for a period shall be 

6 the average number of full-time United States 

7 employees of the taxpayer, measured at the end 

8 of each month during the period. 

9 ‘‘(C) PRIOR AVERAGE EMPLOYMENT.—For 

10 purposes of this paragraph, the taxpayer’s 

11 ‘prior average employment’ shall be the average 

12 number of full-time United States employees of 

13 the taxpayer during the period consisting of the 

14 24 calendar months immediately preceding the 

15 calendar month in which the taxpayer first re16 ceives a distribution described in subsection 

17 (a)(1). 

18 ‘‘(D) FULL-TIME UNITED STATES EM19 PLOYEE.—For purposes of this paragraph— 

20 ‘‘(i) IN GENERAL.—The term ‘full21 time United States employee’ means an in22 dividual who provides services in the 

23 United States as a full-time employee, 

24 based on the employer’s standards and 

25 practices; except that regardless of the emmstockstill on DSK4VPTVN1PROD with 

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1 ployer’s classification of the employee, an 

2 employee whose normal schedule is 40 

3 hours or more per week is considered a 

4 full-time employee. 

5 ‘‘(ii) EXCEPTION FOR CHANGES IN

6 OWNERSHIP OF TRADES OR BUSINESSES.— 

7 Such term does not include— 

8 ‘‘(I) any individual who was an 

9 employee, on the date of acquisition, 

10 of any trade or business acquired by 

11 the taxpayer during the 24-month pe12 riod referred to in subparagraph (A); 

13 and 

14 ‘‘(II) any individual who was an 

15 employee of any trade or business dis16 posed of by the taxpayer during the 

17 24-month period referred to in sub18 paragraph (A) or the 24-month period 

19 referred to in subparagraph (C). 

20 ‘‘(E) AGGREGATION RULES.—In deter21 mining the taxpayer’s average employment level 

22 and prior average employment, all domestic 

23 members of a controlled group shall be treated 

24 as a single taxpayer.’’. 

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1 (d) THRESHOLD PERIOD.—Section 965 is amended 

2 by striking ‘‘June 30, 2003’’ each place it occurs and in3 serting ‘‘June 30, 2011’’. 

4 (e) BASE PERIOD.—Paragraph (2) of subsection 

5 965(c) is amended by inserting at the end of subparagraph 

6 (A) the following flush sentence: 

7 ‘‘For purposes of this paragraph, taxable years shall not 

8 include any year for which an election under section 965 

9 was in effect.’’. 

10 (f) INDEBTEDNESS DETERMINATION DATE.—Sub11 paragraph (B) of section 965(b)(3) is amended by striking 

12 ‘‘October 3, 2004’’ and inserting ‘‘January 19, 2012’’. 

13 (g) CONFORMING AMENDMENTS.— 

14 (1) Subsection 965(c), as amended by sub15 section (e), is amended by striking paragraph (1) 

16 and redesignating paragraphs (2), (3), (4), and (5) 

17 as paragraphs (1), (2), (3), and (4), respectively. 

18 (2) Paragraph 965(c)(4), as redesignated by 

19 paragraph (1), is amended to read as follows: 

20 ‘‘(4) CONTROLLED GROUPS.—All United States 

21 shareholders which are members of an affiliated 

22 group filing a consolidated return under section 

23 1501 shall be treated as one United States share24 holder.’’. 

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1 (h) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years ending on or after 

3 the date of the enactment of this Act. 

4 Subtitle B—Elimination of Tax 

5 Expenditures 

6 SEC. 211. TERMINATION OF CREDIT FOR INCREASING RE7 SEARCH ACTIVITIES. 

8 Effective for taxable years beginning after the date 

9 of the enactment of this Act, section 41 is hereby repealed. 

10 SEC. 212. TERMINATION OF DEDUCTION FOR INTANGIBLE 

11 DRILLING AND DEVELOPMENT COSTS. 

12 (a) IN GENERAL.—Section 263(c) is amended by 

13 adding at the end the following new sentence: ‘‘This sub14 section shall not apply to any taxable year beginning after 

15 the date of the enactment of this sentence.’’. 

16 (b) CONFORMING AMENDMENTS.—Paragraphs (2) 

17 and (3) of section 291(b) are each amended by striking 

18 ‘‘section 263(c), 616(a),’’ and inserting ‘‘section 616(a)’’. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to costs paid or incurred in taxable 

21 years beginning after the date of the enactment of this 

22 Act. 

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1 SEC. 213. REPEAL OF DOMESTIC PRODUCTION ACTIVITIES 

2 DEDUCTION WITH RESPECT TO PRODUCTION 

3 OF COAL, LIGNITE, OR OIL SHALE. 

4 (a) IN GENERAL.—Subparagraph (B) of section 

5 199(c)(4), as amended by this Act, is amended by striking 

6 ‘‘or’’ at the end of clause (iii), by striking the period at 

7 the end of clause (iv) and inserting ‘‘, or’’, and by adding 

8 at the end the following new clause: 

9 ‘‘(v) the lease, rental, license, sale, exchange, or other 

10 disposition of coal, lignite, or oil shale.’’. 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to taxable years beginning after 

13 the date of the enactment of this Act. 

14 SEC. 214. REPEAL PERCENTAGE DEPLETION FOR OIL AND 

15 NATURAL GAS WELLS. 

16 (a) IN GENERAL.—Section 613A is amended by add17 ing at the end the following new subsection: 

18 ‘‘(f) TERMINATION.—After the date of the enactment 

19 of the Bowles-Simpson Plan of Lowering America’s Debt 

20 Act, this section and section 611 shall not apply to any 

21 oil or gas well.’’. 

22 (b) CONFORMING AMENDMENT.—Section 613A(c)(1) 

23 is amended by striking ‘‘subsection (d)’’ and inserting 

24 ‘‘subsections (d) and (f)’’. 

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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to taxable years beginning after 

3 the date of the enactment of this Act. 

4 SEC. 215. TERMINATION OF CREDIT FOR ELECTRICITY 

5 PRODUCED FROM CERTAIN RENEWABLE RE6 SOURCES. 

7 Effective for property placed in service after the date 

8 of the enactment of this Act, section 45 is repealed. 

9 SEC. 216. TERMINATION OF ENERGY CREDIT. 

10 Effective for property placed in service after the date 

11 of the enactment of this Act, section 48 is repealed. 

12 SEC. 217. REPEAL OF CREDIT FOR ALCOHOL USED AS 

13 FUEL. 

14 Effective for fuel sold or used after the date of the 

15 enactment of this Act, section 40 is repealed. 

16 SEC. 218. REPEAL OF CREDIT FOR ALCOHOL FUEL, BIO17 DIESEL, AND ALTERNATIVE FUEL MIXTURES. 

18 Effective for fuel sold and used after the date of the 

19 enactment of this Act, section 6426 is repealed. 

20 SEC. 219. REPEAL OF CREDIT FOR BIODIESEL AND RENEW21 ABLE DIESEL USED AS FUEL. 

22 Effective for fuel produced, and sold or used, after 

23 the date of the enactment of this Act, section 40A is re24 pealed. 

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1 SEC. 220. REPEAL OF CREDIT FOR CERTAIN PLUG-IN ELEC2 TRIC VEHICLES. 

3 Effective for property placed in service after the date 

4 of the enactment of this Act, section 30 is repealed. 

5 SEC. 221. EARLY TERMINATION OF CREDIT FOR QUALIFIED 

6 FUEL CELL MOTOR VEHICLES. 

7 Effective for property placed in service after the date 

8 of the enactment of this Act, section 30B is repealed. 

9 SEC. 222. REPEAL OF DEDUCTION FOR ENERGY CONSERVA10 TION SUBSIDIES PROVIDED BY PUBLIC UTILI11 TIES. 

12 Effective for amounts received after the date of the 

13 enactment of this Act, section 136 is repealed. 

14 SEC. 223. REPEAL OF QUALIFYING ADVANCED COAL 

15 PROJECT CREDIT. 

16 Effective for taxable years beginning after the date 

17 of the enactment of this Act, section 48A is repealed. 

18 SEC. 224. REPEAL OF QUALIFYING GASIFICATION PROJECT 

19 CREDIT. 

20 Effective for taxable years beginning after the date 

21 of the enactment of this Act, section 48B is repealed. 

22 SEC. 225. REPEAL OF SPECIAL ALLOWANCE FOR CELLU23 LOSIC BIOFUEL PLANT PROPERTY. 

24 (a) IN GENERAL.—Section 168 is amended by strik25 ing subsection (l). 

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1 (b) EFFECTIVE DATE.—The amendment made by 

2 this section shall apply to property placed in service after 

3 the date of the enactment of this Act. 

4 SEC. 226. REPEAL OF ELECTION TO EXPENSE CERTAIN RE5 FINERIES. 

6 Effective for property placed in service after the date 

7 of the enactment of this Act, section 179C is repealed. 

8 SEC. 227. REPEAL OF 2-YEAR AMORTIZATION OF GEOLOGI9 CAL AND GEOPHYSICAL EXPENDITURES. 

10 (a) IN GENERAL.—Paragraphs (1) and (4) of section 

11 167(h) are each amended by striking ‘‘24-month’’ and in12 serting ‘‘7-year’’. 

13 (b) CONFORMING AMENDMENT.—Subsection (h) of 

14 section 167 is amended by striking paragraph (5). 

15 (c) EFFECTIVE DATE.—The amendments made by 

16 this section shall apply to property placed in service after 

17 the date of the enactment of this Act. 

18 SEC. 228. REPEAL OF DEDUCTION FOR ENERGY EFFICIENT 

19 COMMERCIAL BUILDING PROPERTY. 

20 Effective for property placed in service after the date 

21 of the enactment of this Act, section 179D is repealed. 

22 SEC. 229. REPEAL OF CREDIT FOR CONSTRUCTION OF NEW 

23 ENERGY EFFICIENT HOMES. 

24 Effective for homes acquired after the date of the en25 actment of this Act, section 45L is repealed. 

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1 SEC. 230. REPEAL OF CREDIT FOR ENERGY EFFICIENT AP2 PLIANCES. 

3 Effective for property placed in service after the date 

4 of the enactment of this Act, section 25C is repealed. 

5 SEC. 231. REPEAL OF CREDIT FOR RESIDENTIAL ENERGY 

6 EFFICIENT PROPERTY. 

7 Effective for property placed in service after the date 

8 of the enactment of this Act, section 25D is repealed. 

9 SEC. 232. REPEAL OF ADVANCED ENERGY PROJECT CRED10 IT. 

11 Effective for property placed in service after the date 

12 of the enactment of this Act, section 48C is repealed. 

13 SEC. 233. REPEAL OF CREDIT FOR CARBON DIOXIDE SE14 QUESTRATION. 

15 Effective for carbon dioxide captured after the date 

16 of the enactment of this Act, section 45Q is repealed. 

17 SEC. 234. REPEAL OF LOW-INCOME HOUSING CREDIT. 

18 Effective for property placed in service after the date 

19 of the enactment of this Act, section 42 is repealed. 

20 SEC. 235. REPEAL OF HOPE AND LIFETIME LEARNING 

21 CREDITS. 

22 Effective for amounts paid or incurred after the date 

23 of the enactment of this Act, section 25A is repealed. 

24 SEC. 236. REPEAL OF WORK OPPORTUNITY TAX CREDIT. 

25 Effective for wages paid after the date of the enact26 ment of this Act, section 51 is repealed. 

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1 SEC. 237. REPEAL OF CREDIT FOR EXPENSES FOR HOUSE2 HOLD AND DEPENDENT CARE SERVICES NEC3 ESSARY FOR GAINFUL EMPLOYMENT. 

4 Effective for expenses paid after the date of the en5 actment of this Act, section 21 is repealed. 

6 SEC. 238. REPEAL OF CREDIT FOR ADOPTION EXPENSES. 

7 Effective for expenses paid or incurred after the date 

8 of the enactment of this Act, section 23 is repealed. 

9 SEC. 239. REPEAL OF CREDIT FOR EXPENDITURES TO PRO10 VIDE ACCESS TO DISABLED INDIVIDUALS. 

11 Effective for expenditures paid or incurred after the 

12 date of the enactment of this Act, section 44 is repealed. 

13 SEC. 240. REPEAL OF EARNED INCOME TAX CREDIT. 

14 Effective for taxable years beginning after the date 

15 of the enactment of this Act, section 32 is repealed. 

16 SEC. 241. REPEAL OF ENERGY CONSERVATION SUBSIDIES 

17 PROVIDED BY PUBLIC UTILITIES. 

18 Effective for amounts received after the date of the 

19 enactment of this Act, section 136 is repealed. 

20 SEC. 242. REPEAL OF ELECTION TO EXPENSE CERTAIN RE21 FINERY PROPERTY. 

22 Effective for property placed in service after the date 

23 of the enactment of this Act, sections 168(l) and 179C 

24 are repealed. 

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1 SEC. 243. REPEAL OF DEDUCTION FOR ENDANGERED SPE2 CIES RECOVERY EXPENDITURES. 

3 (a) IN GENERAL.—Subsections (a) and (c)(1) of sec4 tion 175 are each amended by striking ‘‘, or for endan5 gered species recovery’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) The heading for section 175 is amended by 

8 striking ‘‘; ENDANGERED SPECIES RECOVERY

9 EXPENDITURES’’. 

10 (2) Paragraph (1) of section 175(c) is amended 

11 by striking the second sentence. 

12 (3) Subparagraph (A) of section 175(c)(3) is 

13 amended— 

14 (A) by striking ‘‘or the recovery plan pur15 suant to the Endangered Species Act of 1973’’, 

16 and 

17 (B) by striking ‘‘, OR ENDANGERED SPE18 CIES RECOVERY PLAN’’ in the heading thereof. 

19 (c) EFFECTIVE DATE.—The amendments made by 

20 this section shall apply to expenditures paid or incurred 

21 after the date of the enactment of this Act. 

22 SEC. 244. REPEAL OF EXCLUSION OF CANCELLATION OF IN23 DEBTEDNESS INCOME OF SOLVENT FARM24 ERS. 

25 (a) IN GENERAL.—Paragraph (1) of section 108(a) 

26 is amended by striking subparagraph (C) and by redesigmstockstill on DSK4VPTVN1PROD with 

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1 nating subparagraphs (D) and (E) as subparagraphs (C) 

2 and (D) respectively. 

3 (b) CONFORMING AMENDMENTS.— 

4 (1) Subparagraph (A) of section 108(a)(2) is 

5 amended by striking ‘‘(D), and (E)’’ and inserting 

6 ‘‘and (D)’’. 

7 (2) Subparagraph (B) of section 108(a)(2) is 

8 amended— 

9 (A) by striking ‘‘Subparagraphs (C) and 

10 (D)’’ and inserting ‘‘Subparagraph (C)’’, and 

11 (B) by striking ‘‘QUALIFIED FARM EXCLU12 SION AND’’. 

13 (3) Paragraph (1) of section 108(b) is amended 

14 by striking ‘‘(B), or (C)’’ and inserting ‘‘or (B)’’. 

15 (4) Subsection (c) of section 108 is amended by 

16 striking ‘‘under subparagraph (D)’’ each place it ap17 pears and inserting ‘‘under subparagraph (C)’’. 

18 (5) Section 108 is amended by striking sub19 section (g) and by redesignating subsections (h) and 

20 (i) as subsections (g) and (h), respectively. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to discharges of indebtedness after 

23 the date of the enactment of this Act. 

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1 SEC. 245. REPEAL OF ALTERNATIVE MINIMUM TAX TREAT2 MENT OF CERTAIN PROPERTY AND CAS3 UALTY INSURANCE COMPANIES. 

4 (a) IN GENERAL.—Clause (i) of section 56(g)(4)(B) 

5 is amended by striking the last sentence. 

6 (b) EFFECTIVE DATE.—The amendment made by 

7 this section shall apply to taxable years beginning after 

8 the date of the enactment of this Act. 

9 SEC. 246. REPEAL OF SMALL LIFE INSURANCE COMPANY 

10 DEDUCTION. 

11 (a) IN GENERAL.—Section 806 is repealed. 

12 (b) CONFORMING AMENDMENTS.— 

13 (1) Section 804 is amended by striking 

14 ‘‘means—’’ and all that follows through the period 

15 at the end and inserting the following: ‘‘means the 

16 general deductions provided in section 805.’’. 

17 (2) Subparagraph (B) of section 453B(e)(2) is 

18 amended by inserting ‘‘, as in effect on the day be19 fore the date of the enactment of the Bowles-Simp20 son Plan of Lowering America’s Debt Act’’ after 

21 ‘‘section 806(b)(3)’’. 

22 (3) Subclause (II) of section 465(c)(7)(D)(v) is 

23 amended by inserting ‘‘, as in effect on the day be24 fore the date of the enactment of the Bowles-Simp25 son Plan of Lowering America’s Debt Act’’ after 

26 ‘‘section 806(b)(3)’’. 

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1 (4) Subparagraph (A) of section 815(c)(2) is 

2 amended by striking clause (ii), by inserting ‘‘and’’ 

3 at the end of clause (i), and by redesignating clause 

4 (iii) as clause (ii). 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to taxable years beginning after 

7 the date of the enactment of this Act. 

8 SEC. 247. TERMINATION OF $25,000 EXEMPTION FROM PAS9 SIVE LOSS RULES FOR RENTAL REAL ESTATE 

10 ACTIVITIES. 

11 (a) IN GENERAL.—Section 469 is amended by strik12 ing subsection (i). 

13 (b) EFFECTIVE DATE.—The amendment made by 

14 this section shall apply to taxable years beginning after 

15 the date of the enactment of this Act. 

16 SEC. 248. REPEAL OF DISCHARGE OF INDEBTEDNESS EX17 CLUSION. 

18 Effective for discharges of indebtedness occurring on 

19 or after the date of the enactment of this Act, section 108 

20 is repealed. 

21 SEC. 249. REPEAL OF CERTAIN EXCEPTIONS FOR IMPUTED 

22 INTEREST RULES. 

23 (a) DETERMINATION OF ISSUE PRICE IN THE CASE

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1 ERTY.—Paragraph (3) of section 1274(c)(3) is amended 

2 by striking subparagraphs (A), (B), and (C). 

3 (b) SPECIAL RULE FOR CERTAIN TRANSACTIONS

4 WHERE STATED PRINCIPAL AMOUNT DOES NOT EXCEED

5 CERTAIN AMOUNT.—Section 1274A is amended by adding 

6 at the end the following new subsection: 

7 ‘‘(f) TERMINATION.—This section shall not apply to 

8 any sales or exchanges after the date of the enactment 

9 of this Act.’’. 

10 (c) EFFECTIVE DATE.—The amendment made by 

11 subsection (a) shall apply to sales or exchanges after the 

12 date of the enactment of this Act. 

13 SEC. 250. TERMINATION OF PARTIAL EXCLUSION FOR GAIN 

14 FROM CERTAIN SMALL BUSINESS STOCK. 

15 Section 1202 is amended by adding at the end the 

16 following new subsection: 

17 ‘‘(l) TERMINATION.—This section shall not apply to 

18 any sale or exchange of stock after the date of the enact19 ment of the Bowles-Simpson Plan of Lowering America’s 

20 Debt Act.’’. 

21 SEC. 251. TERMINATION OF TREATMENT OF LOSSES ON 

22 SMALL BUSINESS STOCK AS ORDINARY. 

23 Section 1244 is amended by adding at the end the 

24 following new subsection: 

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1 ‘‘(f) TERMINATION.—This section shall not apply to 

2 any sale or exchange of stock after the date of the enact3 ment of the Bowles-Simpson Plan of Lowering America’s 

4 Debt Act.’’. 

5 SEC. 252. REPEAL OF STUDENT LOAN INTEREST DEDUC6 TION. 

7 Effective for any loan interest paid after the date of 

8 the enactment of this Act, section 221 is repealed. 

9 SEC. 253. REPEAL OF DEDUCTION OF TUITION AND RE10 LATED EXPENSES. 

11 Effective for amounts paid after the date of the en12 actment of this Act, section 222 is repealed. 

13 SEC. 254. REPEAL OF GROSS INCOME EXCLUSION FOR 

14 UNITED STATES SAVINGS BONDS USED TO 

15 PAY HIGHER EDUCATION EXPENSES. 

16 Effective for taxable years beginning after the date 

17 of the enactment of this Act, section 135 is repealed. 

18 SEC. 255. ELIMINATION OF PERSONAL EXEMPTION FOR 

19 STUDENTS AGE 19 AND OLDER. 

20 (a) IN GENERAL.—Subparagraph (A) of section 

21 152(c)(3) is amended— 

22 (1) by striking clause (ii), 

23 (2) by striking ‘‘, or’’ at the end of clause (i) 

24 and inserting a period, and 

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1 (3) by striking ‘‘child and’’ and all that follows 

2 through ‘‘(i) has not attained’’ and inserting ‘‘child 

3 and has not attained’’. 

4 (b) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to taxable years beginning after 

6 the date of the enactment of this Act. 

7 SEC. 256. ELIMINATION OF ABOVE THE LINE DEDUCTION 

8 FOR CERTAIN EXPENSES OF ELEMENTARY 

9 AND SECONDARY SCHOOL TEACHERS. 

10 (a) IN GENERAL.—Paragraph (2) of section 62(a) is 

11 amended by striking subparagraph (D) and by redesig12 nating subparagraph (E) as subparagraph (D). 

13 (b) CONFORMING AMENDMENTS.— 

14 (1) Section 62 is amended by striking sub15 section (d) and redesignating subsection (e) as sub16 section (d). 

17 (2) Paragraph (20) of section 62(a) is amended 

18 by striking ‘‘subsection (e)’’ and inserting ‘‘sub19 section (d)’’. 

20 (c) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to amounts paid or incurred after 

22 the date of the enactment of this Act. 

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1 SEC. 257. ELIMINATION OF GROSS INCOME EXCLUSION FOR 

2 DISCHARGE OF CERTAIN STUDENT LOAN 

3 DEBT. 

4 Section 108 is amended by adding at the end the fol5 lowing new paragraph: 

6 ‘‘(5) TERMINATION.—This subsection shall not 

7 apply to discharges of indebtedness after the date of 

8 the enactment of the Bowles-Simpson Plan of Low9 ering America’s Debt Act.’’. 

10 SEC. 258. REPEAL OF EXCLUSION FROM GROSS INCOME 

11 FOR RENTAL VALUE OF PARSONAGES. 

12 Effective for taxable years beginning after the date 

13 of the enactment of this Act, section 107 is repealed. 

14 SEC. 259. REPEAL OF EXCLUSION FROM GROSS INCOME 

15 FOR BENEFITS PROVIDED TO VOLUNTEER 

16 FIREFIGHTERS AND EMERGENCY MEDICAL 

17 RESPONDERS. 

18 Effective for taxable years beginning after the date 

19 of the enactment of this Act, section 139B is repealed. 

20 SEC. 260. REPEAL OF SPECIAL TREATMENT OF BLUE 

21 CROSS AND BLUE SHIELD ORGANIZATIONS, 

22 ETC. 

23 Effective for taxable years beginning after the date 

24 of the enactment of this Act, section 833 is repealed. 

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1 SEC. 261. SENSE OF THE HOUSE REGARDING A TERRI2 TORIAL TAX SYSTEM. 

3 It is the sense of the House that the Committee on 

4 Ways and Means of the House of Representatives should 

5 report legislation that will transition the United States to 

6 a territorial tax system. 

7 Subtitle C—Phaseout of Tax 

8 Expenditures 

9 SEC. 271. FIVE-YEAR PHASEOUT OF CERTAIN TAX EXPENDI10 TURES. 

11 (a) IN GENERAL.—Effective for taxable years begin12 ning after December 31, 2012, the amount allowable as 

13 a credit, exclusion from gross income, exemption from tax14 ation, or deduction for the taxable year under the tax pro15 visions specified in subsection (c) (determined without re16 gard to this section) shall be reduced by the applicable 

17 percentage of the amount so allowable. 

18 (b) APPLICABLE PERCENTAGE.—For purposes if this 

19 section, the applicable percentage shall be determined in 

20 accordance with the following table: 

In the case of taxable years 

beginning in: 

The applicable percentage 

shall be: 

2013 ............................................................................................. 20

2014 ............................................................................................. 40

2015 ............................................................................................. 60

2016 ............................................................................................. 80

2017 and thereafter ..................................................................... 100. 

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1 (c) SPECIFIED PROVISIONS.—For purposes of this 

2 section, the tax provisions specified in this subsection are 

3 as follows: 

4 (1) Section 911 of the Internal Revenue Code 

5 of 1986 (relating to citizens or residents of the 

6 United States living abroad). 

7 (2) Section 912 of such Code (relating to ex8 emption for certain allowances). 

9 (3) Section 41 of such Code (relating to credit 

10 for increasing research activities). 

11 (4) Section 631(c) of such Code (relating to 

12 disposal of coal or domestic iron ore with a retained 

13 economic interest). 

14 (5) Section 451(i) of such Code (relating to 

15 special rule for sales or dispositions to implement 

16 Federal Energy Regulatory Commission or State 

17 Electric Restructuring Policy). 

18 (6) Section 613 of such Code (relating to per19 centage depletion) in the case of nonfuel minerals. 

20 (7) Section 631(a) of such Code (relating to 

21 election to consider cutting as sale or exchange). 

22 (8) Section 512(b)(19) of such Code (relating 

23 to treatment of gain or loss on sale or exchange of 

24 certain brownfield sites). 

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1 (9) The exclusion from gross income of income 

2 on life insurance contracts (as determined under sec3 tion 7702(g) of the Internal Revenue Code of 1986). 

4 (10) Section 103(a) of such Code, to the extent 

5 the interest is attributable to a qualified mortgage 

6 bond (as defined in section 143(a) of such Code), a 

7 qualified veterans’ mortgage bond (as defined is sec8 tion 143(b) of such Code), or an issue described in 

9 section 142(a)(7) of such Code. 

10 (11) Section 199 of such Code (relating to in11 clude attributable to domestic production activities). 

12 (12) Section 181 of such Code (relating to 

13 treatment of certain qualified film and television 

14 productions). 

15 (13) Section 7518 of such Code (relating to tax 

16 incentives relating to merchant marine capital con17 struction funds) and chapter 535 of title 46, United 

18 States Code. 

19 (14) Section 132(a)(5) of such Code (relating 

20 to qualified transportation fringe) to the extent at21 tributable to a transit pass (as defined in section 

22 132(f)(5) of such Code) or qualified parking (as so 

23 defined). 

24 (15) Section 45G(a) of such Code (relating to 

25 railroad track maintenance credit). 

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1 (16) Section 46(a) of such Code (relating to re2 habilitation credit). 

3 (17) Section 45D of such Code (relating to new 

4 markets tax credit). 

5 (18) Section 131 of such Code (relating to cer6 tain foster care payments). 

7 (19) Section 213 of such Code (relating to med8 ical, dental, etc., payments). 

9 (20) Section 36B of such Code (relating to re10 fundable credit for coverage under a qualified health 

11 plan). 

12 (21) Section 45R of such Code (relating to em13 ployee health insurance expenses of small employ14 ers). 

15 (22) Section 45C of such Code (relating to clin16 ical testing expenses for certain drugs for rare dis17 eases or conditions). 

18 (23) Section 35 of such Code (relating to health 

19 insurance costs of eligible individuals). 

20 (24) Means-tested payments otherwise exclud21 able under the general welfare doctrine. 

22 (25) Section 79 of such Code (relating to 

23 group-term life insurance purchased for employees). 

24 (26) Section 106 of such Code (relating to con25 tributions by employer to accident and health plans) 

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1 to the extent attributable to employer provided cov2 erage under an accident or disability insurance plan. 

3 (27) Section 165 of such Code (relating to 

4 losses) to the extent the loss is described in section 

5 165(c)(3) of such Code. 

6 (28) Section 164(a)(1) of such Code (relating 

7 to real property taxes) to the extent not attributable 

8 to real property used in a trade or business or the 

9 principal residence of the taxpayer (within the mean10 ing of section 121 of such Code). 

11 Subtitle D—Special Status 

12 SEC. 381. TERMINATION OF QUALIFIED ENERGY CON13 SERVATION BONDS. 

14 Subsection (a) of section 54D is amended by striking 

15 ‘‘and’’ at the end of paragraph (2), by striking the period 

16 at the end of paragraph (3) and inserting ‘‘, and’’, and 

17 by adding at the end the following new paragraph: 

18 ‘‘(4) the bond is issued before the date of the 

19 enactment of the Implementation of Simpson-Bowles 

20 Spending Reductions Act of 2012.’’. 

21 SEC. 382. TERMINATION OF NEW CLEAN RENEWABLE EN22 ERGY BONDS. 

23 Subsection (a) of section 54C is amended by striking 

24 ‘‘and’’ at the end of paragraph (2), by striking the period 

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1 at the end of paragraph (3) and inserting ‘‘, and’’, and 

2 by adding at the end the following new paragraph: 

3 ‘‘(4) the bond is issued before the date of the 

4 enactment of the Implementation of Simpson-Bowles 

5 Spending Reductions Act of 2012.’’. 

6 SEC. 383. TERMINATION OF EXEMPT FACILITY BOND 

7 TREATMENT FOR WATER, SEWAGE, AND 

8 SOLID WASTE FACILITIES. 

9 (a) IN GENERAL.—Subsection (a) of section 142 is 

10 amended by striking paragraphs (4), (5), and (6). 

11 (b) EFFECTIVE DATE.—The amendments made by 

12 this section shall apply to bonds issued after the date of 

13 the enactment of this Act. 

14 SEC. 384. TERMINATION OF EXPENSING AND AMORTIZA15 TION OF REFORESTATION EXPENDITURES 

16 AND EXPENSING OF TIMBER-GROWING 

17 COSTS. 

18 (a) REFORESTATION EXPENDITURES.—Section 194 

19 is amended by adding at the end the following new sub20 section: 

21 ‘‘(e) TERMINATION.—This section shall not apply to 

22 amount paid or incurred after the date of the enactment 

23 of the Implementation of Simpson-Bowles Spending Re24 ductions Act of 2012.’’. 

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1 (b) EXPENSING OF TIMBER GROWING COSTS.—Sub2 section (c) of section 263A is amended by striking para3 graph (5). 

4 (c) EFFECTIVE DATE.—The amendment made by 

5 this section shall apply to expenses paid or incurred after 

6 the date of the enactment of this Act. 

7 SEC. 385. TERMINATION OF DEFERRAL OF GAIN ON SALES 

8 OF STOCK IN AGRICULTURAL REFINERS AND 

9 PROCESSORS TO ELIGIBLE FARM COOPERA10 TIVES. 

11 Subsection (g) of section 1042 is amended by adding 

12 at the end the following new paragraph: 

13 ‘‘(5) TERMINATION.—This subsection shall not 

14 apply to any sales after the date of the enactment 

15 of the Implementation of Simpson-Bowles Spending 

16 Reductions Act of 2012.’’. 

17 SEC. 386. TERMINATION OF ELECTION TO EXPENSE CER18 TAIN DEPRECIABLE BUSINESS ASSETS. 

19 (a) IN GENERAL.—Subparagraph (D) of section 

20 179(b)(1) is amended by striking ‘‘$25,000’’ and inserting 

21 ‘‘$0’’. 

22 (b) EFFECTIVE DATE.—The amendment made by 

23 this section shall apply to property placed in service after 

24 December 31, 2012. 

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1 SEC. 387. TERMINATION OF QUALIFIED SMALL ISSUE 

2 BONDS. 

3 Paragraph (1) of section 144(a) is amended by in4 serting ‘‘before the date of the enactment of the Imple5 mentation of Simpson-Bowles Spending Reductions Act of 

6 2012’’ after ‘‘any bond issued’’. 

7 SEC. 388. TERMINATION OF EXEMPT FACILITY BOND 

8 TREATMENT FOR QUALIFIED HIGHWAY OR 

9 SURFACE FREIGHT TRANSFER FACILITIES. 

10 (a) IN GENERAL.—Subsection (a) of section 142 is 

11 amended by striking paragraph (15). 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to bonds issued after the date of 

14 the enactment of this Act. 

15 SEC. 389. TERMINATION OF EXEMPT FACILITY BOND 

16 TREATMENT FOR AIRPORTS, DOCKS, AND 

17 WHARVES. 

18 (a) IN GENERAL.—Subsection (a) of section 142 is 

19 amended by striking paragraphs (1) and (2). 

20 (b) EFFECTIVE DATE.—The amendments made by 

21 this section shall apply to bonds issued after the date of 

22 the enactment of this Act. 

23 SEC. 390. TERMINATION OF TRIBAL ECONOMIC DEVELOP24 MENT BONDS. 

25 Subparagraph (A) of section 7871(f)(3) is amended 

26 by inserting ‘‘before the date of the enactment of the Immstockstill on DSK4VPTVN1PROD with 

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1 plementation of Simpson-Bowles Spending Reductions Act 

2 of 2012’’ after ‘‘any bond issued’’. 

3 SEC. 391. TERMINATION OF EXCLUSION FROM GROSS IN4 COME OF UNITED STATES SAVINGS BONDS 

5 INTEREST USED TO PAY HIGHER EDUCATION 

6 EXPENSES. 

7 Subparagraph (A) of section 135(c)(1) is amended by 

8 inserting ‘‘and before the date of the enactment of the Im9 plementation of Simpson-Bowles Spending Reductions Act 

10 of 2012’’ after ‘‘December 31, 1989,’’. 

11 SEC. 392. TERMINATION OF QUALIFIED ZONE ACADEMY 

12 BONDS. 

13 Subsection (a) of section 54E is amended by striking 

14 ‘‘and’’ at the end of paragraph (2), by striking the period 

15 at the end of paragraph (3), and inserting ‘‘, and’’, and 

16 by adding at the end the following new paragraph: 

17 ‘‘(4) the bond is issued before the date of the 

18 enactment of the Implementation of Simpson-Bowles 

19 Spending Reductions Act of 2012.’’. 

20 SEC. 393. TERMINATION OF EXEMPT FACILITY BOND 

21 TREATMENT FOR QUALIFIED PUBLIC EDU22 CATIONAL FACILITIES. 

23 (a) IN GENERAL.—Subsection (a) of section 142 is 

24 amended by striking paragraph (13). 

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1 (b) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to bonds issued after the date of 

3 the enactment of this Act. 

4 SEC. 394. TERMINATION OF HOSPITAL BONDS. 

5 (a) IN GENERAL.—Paragraph (1) of section 145(a) 

6 is amended by striking ‘‘or a governmental unit’’ and in7 serting ‘‘, or a governmental unit, other than a hospital’’. 

8 (b) CONFORMING AMENDMENTS.— 

9 (1) Section 145 is amended by striking sub10 section (c) and by redesignating subsections (d) and 

11 (e) as subsections (c) and (d), respectively. 

12 (2) Subsection (b) of section 145 is amended by 

13 striking ‘‘nonhospital’’ each place it appears. 

14 (3) Paragraph (1) of section 145(b) is amended 

15 by striking ‘‘(other than a qualified hospital bond)’’. 

16 (4) Paragraph (2) of section 145(b) is amend17 ed— 

18 (A) by striking ‘‘other than a qualified hos19 pital bond’’ in subparagraph (B), and 

20 (B) by striking subparagraph (C). 

21 (5) The heading for subsection (b) of section 

22 145 is amended by striking ‘‘ON BONDS OTHER

23 THAN HOSPITAL BONDS’’. 

24 (6) The heading for paragraph (2) of section 

25 145(b) is amended by striking ‘‘NONHOSPITAL’’. 

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1 (c) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to bonds issued after the date of 

3 the enactment of this Act. 

Æ 

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