II

103D CONGRESS

1ST SESSION S. 19

To amend the Internal Revenue Code of 1986 to provide economic growth

incentives in 1993, and for no other purpose.

IN THE SENATE OF THE UNITED STATES

JANUARY 21 (legislative day, JANUARY 5), 1993

Mr. SPECTER (for himself, and Mr. DOMENICI) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to provide

economic growth incentives in 1993, and for no other

purpose.

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; AMEND4 MENT OF 1986 CODE.

5 (a) SHORT TITLE.—This Act may be cited as the

6 ‘‘High Value Economic Growth Act of 1993’’.

7 (b) TABLE OF CONTENTS.—The table of contents is

8 as follows:

Sec. 1. Short title; table of contents; amendment of 1986 Code.

TITLE I—ECONOMIC GROWTH INCENTIVES
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Sec. 101. Credit for first-time homebuyers.

Sec. 102. Special depreciation allowance for certain equipment acquired in

1992.

Sec. 103. Penalty-free withdrawals from pension plans through 1992.

Sec. 104. Passive loss equity for real estate professionals.

Sec. 105. Real property acquired by a qualified organization.

Sec. 106. Special rules for investments in partnerships.

TITLE II—REVENUE OFFSETS

Subtitle A—General Provisions

Sec. 201. Elimination of the statute of limitations on collection of guaranteed

student loans.

Sec. 202. Increase tax on ozone depleting chemicals.

Sec. 203. Mark to market inventory method for securities dealers.

Sec. 204. Disallowance of interest on certain overpayments of tax.

Subtitle B—Electromagnetic Spectrum Function

Sec. 211. Short title.

Sec. 212. Findings.

Sec. 213. National spectrum planning.

Sec. 214. Identification of reallocable frequencies.

Sec. 215. Withdrawal of assignment to United States Government stations.

Sec. 216. Distribution of frequencies by the Commission.

Sec. 217. Authority to reclaim reassigned frequencies.

Sec. 218. Competitive bidding.

Sec. 219. Definitions.

Subtitle C—Other Provisions

Sec. 221. Extension of current law regarding lump-sum withdrawal of retirement.

Sec. 222. Extension of the patent and trademark office user fee surcharge

through 1996.

Sec. 223. One-year extension of customs user fees.

Sec. 224. Disclosures of information for veterans benefits.

Sec. 225. Revision of procedure relating to certain loan defaults.

Sec. 226. Application of medicare part B limits to FEHBP enrollee age 65 or

older.

1 (c) AMENDMENT OF 1986 CODE.—Except as other2 wise expressly provided, whenever in this Act an amend3 ment or repeal is expressed in terms of an amendment

4 to, or repeal of, a section or other provision, the reference

5 shall be considered to be made to a section or other provi6 sion of the Internal Revenue Code of 1986.
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1 TITLE I—ECONOMIC GROWTH

2 INCENTIVES

3 SEC. 101. CREDIT FOR FIRST-TIME HOMEBUYERS.

4 (a) IN GENERAL.—Subpart A of part IV of chapter

5 1 is amended by inserting after section 22 the following

6 new section:

7 ‘‘SEC. 23. PURCHASE OF PRINCIPAL RESIDENCE BY FIRST8 TIME HOMEBUYER.

9 ‘‘(a) ALLOWANCE OF CREDIT.—If an individual who

10 is a first-time homebuyer purchases a principal residence

11 (within the meaning of section 1034), there shall be al12 lowed to such individual as a credit against the tax im13 posed by this subtitle an amount equal to 10 percent of

14 the purchase price of the principal residence.

15 ‘‘(b) LIMITATIONS.—

16 ‘‘(1) MAXIMUM CREDIT.—The credit allowed

17 under subsection (a) shall not exceed $5,000.

18 ‘‘(2) LIMITATION TO ONE RESIDENCE.—The

19 credit under this section shall be allowed with re20 spect to only one residence of the taxpayer.

21 ‘‘(3) MARRIED INDIVIDUALS FILING JOINTLY.—

22 In the case of a husband and wife who file a joint

23 return under section 6013, the credit under this sec24 tion is allowable only if both the husband and wife
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1 are first-time homebuyers, and the amount specified

2 under paragraph (1) shall apply to the joint return.

3 ‘‘(4) OTHER TAXPAYERS.—In the case of indi4 viduals to whom paragraph (3) does not apply who

5 together purchase the same new principal residence

6 for use as their principal residence, the credit under

7 this section is allowable only if each of the individ8 uals is a first-time homebuyer, and the sum of the

9 amount of credit allowed to such individuals shall

10 not exceed the lesser of $5,000 or 10 percent of the

11 total purchase price of the residence. The amount of

12 any credit allowable under this section shall be ap13 portioned among such individuals under regulations

14 to be prescribed by the Secretary.

15 ‘‘(5) APPLICATION WITH OTHER CREDITS.—

16 The credit allowed by subsection (a) shall not exceed

17 the amount of the tax imposed by this chapter for

18 the taxable year, reduced by the sum of any other

19 credits allowable under this chapter.

20 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur21 poses of this section—

22 ‘‘(1) PURCHASE PRICE.—The term ‘purchase

23 price’ means the adjusted basis of the principal resi24 dence on the date of the acquisition thereof.

25 ‘‘(2) FIRST-TIME HOMEBUYER.—
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1 ‘‘(A) IN GENERAL.—The term ‘first-time

2 homebuyer’ means any individual if such indi3 vidual has not had a present ownership interest

4 in any residence (including an interest in a

5 housing cooperative) at any time within the 36-

6 month period ending on the date of acquisition

7 of the residence on which the credit allowed

8 under subsection (a) is to be claimed. An inter9 est in a partnership, S corporation, or trust

10 that owns an interest in a residence is not con11 sidered an interest in a residence for purposes

12 of this paragraph except as may be provided in

13 regulations.

14 ‘‘(B) CERTAIN INDIVIDUALS.—Notwith15 standing subparagraph (A), an individual is not

16 a first-time homebuyer on the date of purchase

17 of a residence if on that date the running of

18 any period of time specified in section 1034 is

19 suspended under subsection (h) or (k) of sec20 tion 1034 with respect to that individual.

21 ‘‘(3) SPECIAL RULES FOR CERTAIN ACQUISI22 TIONS.—No credit is allowable under this section

23 if—

24 ‘‘(A) the residence is acquired from a per25 son whose relationship to the person acquiring
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1 it would result in the disallowance of losses

2 under section 267 or 707(b), or

3 ‘‘(B) the basis of the residence in the

4 hands of the person acquiring it is deter5 mined—

6 ‘‘(i) in whole or in part by reference

7 to the adjusted basis of such residence in

8 the hands of the person from whom it is

9 acquired, or

10 ‘‘(ii) under section 1014(a) (relating

11 to property acquired from a decedent).

12 ‘‘(d) RECAPTURE FOR CERTAIN DISPOSITIONS.—

13 ‘‘(1) IN GENERAL.—Except as provided in para14 graphs (2) and (3), if the taxpayer disposes of prop15 erty with respect to the purchase of which a credit

16 was allowed under subsection (a) at any time within

17 36 months after the date the taxpayer acquired the

18 property as his principal residence, then the tax im19 posed under this chapter for the taxable year in

20 which the disposition occurs is increased by an

21 amount equal to the amount allowed as a credit for

22 the purchase of such property.

23 ‘‘(2) ACQUISITION OF NEW RESIDENCE.—If, in

24 connection with a disposition described in paragraph

25 (1) and within the applicable period prescribed in
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1 section 1034, the taxpayer purchases a new principal

2 residence, then the provisions of paragraph (1) shall

3 not apply and the tax imposed by this chapter for

4 the taxable year in which the new principal residence

5 is purchased is increased to the extent the amount

6 of the credit that could be claimed under this section

7 on the purchase of the new residence (determined

8 without regard to subsection (e)) is less than the

9 amount of credit claimed by the taxpayer under this

10 section.

11 ‘‘(3) DEATH OF OWNER; CASUALTY LOSS; IN12 VOLUNTARY CONVERSION; ETC.—The provisions of

13 paragraph (1) do not apply to—

14 ‘‘(A) a disposition of a residence made on

15 account of the death of any individual having a

16 legal or equitable interest therein occurring dur17 ing the 36-month period to which reference is

18 made under paragraph (1),

19 ‘‘(B) a disposition of the old residence if it

20 is substantially or completely destroyed by a

21 casualty described in section 165(c)(3) or

22 compulsorily or involuntarily converted (within

23 the meaning of section 1033(a)), or

24 ‘‘(C) a disposition pursuant to a settlement

25 in a divorce or legal separation proceeding
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1 where the residence is sold or the other spouse

2 retains the residence as a principal residence.

3 ‘‘(e) PROPERTY TO WHICH SECTION APPLIES.—

4 ‘‘(1) IN GENERAL.—The provisions of this sec5 tion apply to a principal residence if—

6 ‘‘(A) the taxpayer acquires the residence

7 on or after February 1, 1993, and before Janu8 ary 1, 1994, or

9 ‘‘(B) the taxpayer enters into, on or after

10 February 1, 1993, and before January 1, 1994,

11 a binding contract to acquire the residence, and

12 acquires and occupies the residence before July

13 1, 1994.’’

14 (b) CLERICAL AMENDMENT.—The table of sections

15 for subpart A of part IV of chapter 1 is amended by in16 serting after section 22 the following new item:

‘‘Sec. 23. Purchase of principal residence by first-time homebuyer.’’

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

18 this section are effective on August 1, 1993.

19 SEC. 102. SPECIAL DEPRECIATION ALLOWANCE FOR CER20 TAIN EQUIPMENT ACQUIRED IN 1993.

21 (a) IN GENERAL.—Section 168 (relating to acceler22 ated cost recovery system) is amended by adding at the

23 end the following new subsection:
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1 ‘‘(j) SPECIAL ALLOWANCE FOR CERTAIN EQUIPMENT

2 ACQUIRED IN 1993.—

3 ‘‘(1) ADDITIONAL ALLOWANCE.—Except as pro4 vided in paragraph (2), in the case of any qualified

5 equipment—

6 ‘‘(A) the depreciation deduction provided

7 by section 167(a) for the taxable year in which

8 such equipment is placed in service shall include

9 an allowance equal to 15 percent of the ad10 justed basis of the qualified equipment, and

11 ‘‘(B) the adjusted basis of the qualified

12 equipment shall be reduced by the amount of

13 such deduction (without regard to paragraph

14 (2)) before computing the amount otherwise al15 lowable as a depreciation deduction under this

16 chapter for such taxable year and any subse17 quent taxable year.

18 ‘‘(2) MAXIMUM FIRST-YEAR DEDUCTION.—Of

19 the aggregate deduction allowable under paragraph

20 (1)—

21 ‘‘(A) 0 percent shall be allowed for the tax22 able year in which the property is placed in

23 service, and

24 ‘‘(B) 100 percent shall be allowed for the

25 succeeding taxable year.
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1 ‘‘(3) QUALIFIED EQUIPMENT.—For purposes of

2 this subsection—

3 ‘‘(A) IN GENERAL.—The term ‘qualified

4 equipment’ means property to which this sec5 tion applies—

6 ‘‘(i) which is section 1245 property

7 (within the meaning of section

8 1245(a)(3)),

9 ‘‘(ii) the original use of which com10 mences with the taxpayer on or after Feb11 ruary 1, 1993,

12 ‘‘(iii) which is—

13 ‘‘(I) acquired by the taxpayer on

14 or after February 1, 1993, and before

15 January 1, 1994, but only if no writ16 ten binding contract for the acquisi17 tion was in effect before February 1,

18 1993, or

19 ‘‘(II) acquired by the taxpayer

20 pursuant to a written binding contract

21 which was entered into on or after

22 February 1, 1993, and before Janu23 ary 1, 1994, and

24 ‘‘(iv) which is placed in service by the

25 taxpayer before July 1, 1994.
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1 ‘‘(B) EXCEPTIONS.—

2 ‘‘(i) ALTERNATIVE DEPRECIATION

3 PROPERTY.—The term ‘qualified equip4 ment’ shall not include any property to

5 which the alternative depreciation system

6 under subsection (g) applies, determined—

7 ‘‘(I) without regard to paragraph

8 (7) of subsection (g) (relating to elec9 tion to have system apply), and

10 ‘‘(II) after application of section

11 280F(b) (relating to listed property

12 with limited business use).

13 ‘‘(ii) ELECTION OUT.—If a taxpayer

14 makes an election under this clause with

15 respect to any class of property for any

16 taxable year, this subsection shall not

17 apply to all property in such class placed

18 in service during such taxable year.

19 ‘‘(C) SPECIAL RULES RELATING TO ORIGI20 NAL USE.—

21 ‘‘(i) SELF-CONSTRUCTED PROP22 ERTY.—In the case of a taxpayer manufac23 turing, constructing, or producing property

24 for the taxpayer’s own use, the require25 ments of clause (iii) of subparagraph (A)
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1 shall be treated as met if the taxpayer be2 gins manufacturing, constructing, or pro3 ducing the property on and after February

4 1, 1993, and before January 1, 1994.

5 ‘‘(ii) SALE-LEASEBACKS.—For pur6 poses of subparagraph (A)(ii), if prop7 erty—

8 ‘‘(I) is originally placed in service

9 on or after February 1, 1993, by a

10 person, and

11 ‘‘(II) is sold and leased back by

12 such person within 3 months after the

13 date such property was originally

14 placed in service,

15 such property shall be treated as originally

16 placed in service not earlier than the date

17 on which such property is used under the

18 leaseback referred to in subclause (II).

19 ‘‘(D) COORDINATION WITH SECTION

20 280F.—For purposes of section 280F—

21 ‘‘(i) AUTOMOBILES.—In the case of a

22 passenger automobile (as defined in section

23 280F(d)(5)) which is qualified equipment,

24 the Secretary shall increase the limitation

25 under section 280F(a)(1)(A)(i), and de-
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1 crease each other limitation under sub2 paragraphs (A) and (B) of section

3 280F(a)(1), to appropriately reflect the

4 amount of the deduction allowable under

5 paragraph (1).

6 ‘‘(ii) LISTED PROPERTY.—The deduc7 tion allowable under paragraph (1) shall be

8 taken into account in computing any re9 capture amount under section

10 280F(b)(2).’’

11 (b) ALLOWANCE AGAINST ALTERNATIVE MINIMUM

12 TAX.—

13 (1) IN GENERAL.—Section 56(a)(1)(A) (relat14 ing to depreciation adjustment for alternative mini15 mum tax) is amended by adding at the end the fol16 lowing new clause:

17 ‘‘(iii) ADDITIONAL ALLOWANCE FOR

18 EQUIPMENT ACQUIRED IN 1993.—The de19 duction under section 168(j) shall be al20 lowed.’’

21 (2) CONFORMING AMENDMENT.—Clause (i) of

22 section 56(a)(1)(A) is amended by inserting ‘‘or

23 (iii)’’ after ‘‘(ii)’’.

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

25 this section shall apply to property placed in service on
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1 or after February 1, 1993, in taxable years ending on or

2 after such date.

3 SEC. 103. PENALTY-FREE WITHDRAWALS FROM PENSION

4 PLANS THROUGH 1993.

5 (a) IN GENERAL.—In the case of any qualified with6 drawal—

7 (1) no additional tax shall be imposed under

8 section 72(t)(1) of the Internal Revenue Code of

9 1986 with respect to such qualified withdrawal, and

10 (2) except as provided in subsection (b), any

11 amount includible in gross income by reason of such

12 qualified withdrawal (determined without regard to

13 this section) shall be includible ratably over the 4-

14 taxable year period beginning with the taxable year

15 in which such qualified withdrawal occurs.

16 (b) ELECTION TO RECONTRIBUTE TO PLAN.—

17 (1) IN GENERAL.—The amount required to be

18 included in gross income for any taxable year under

19 subsection (a)(2) shall be reduced by any designated

20 recontribution.

21 (2) DESIGNATED RECONTRIBUTION.—For pur22 poses of paragraph (1), a designated recontribution

23 is any contribution to any plan described in sub24 section (c)(1)(B)—
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1 (A) which the taxpayer designates (in such

2 manner as the Secretary of the Treasury may

3 prescribe) as in lieu of all (or any portion of)

4 any amount required to be included in gross in5 come under subsection (a)(2) for a taxable year,

6 and

7 (B) which is made not later than the due

8 date (without extensions) for such taxable year.

9 (3) NO DEDUCTION ALLOWED FOR

10 RECONTRIBUTION, ETC.—For purposes of the Inter11 nal Revenue Code of 1986, a designated

12 recontribution shall not be treated as a contribution

13 for any taxable year.

14 (c) QUALIFIED WITHDRAWAL.—For purposes of this

15 section—

16 (1) IN GENERAL.—The term ‘‘qualified with17 drawal’’ means any payment or distribution—

18 (A) which is made to an individual during

19 1992,

20 (B) which is made from—

21 (i) an individual retirement plan (as

22 defined in section 7701(a)(37) of the In23 ternal Revenue Code of 1986) established

24 for the benefit of the individual, or
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1 (ii) amounts attributable to employer

2 contributions made on behalf of the indi3 vidual pursuant to elective deferrals de4 scribed in section 402(g)(3) (A) or (C) or

5 501(c)(18)(D)(iii) of such Code, and

6 (C) which is used by the individual for a

7 qualified acquisition not later than the earlier

8 of—

9 (i) the date which is 6 months after

10 the date of such payment or distribution,

11 or

12 (ii) the date on which the individual

13 files the individual’s income tax return for

14 the taxable year in which such payment or

15 distribution occurs.

16 (2) QUALIFIED ACQUISITION.—The term

17 ‘‘qualified acquisition’’ means—

18 (A) the payment of qualified acquisition

19 costs with respect to a principal residence of a

20 first-time homebuyer who is the taxpayer or the

21 child or grandchild of the taxpayer, or

22 (B) the purchase of a new passenger auto23 mobile.

24 (3) DOLLAR LIMITATION.—The aggregate

25 amount which may be treated as qualified withdraw-
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1 als under paragraph (1) with respect to all plans

2 and amounts of an individual described in paragraph

3 (1)(B) shall not exceed $10,000.

4 (4) DEFINITIONS AND SPECIAL RULES.—For

5 purposes of this subsection—

6 (A) QUALIFIED ACQUISITION COSTS.—The

7 term ‘‘qualified acquisition costs’’ means the

8 costs of acquiring, constructing, or reconstruct9 ing a residence. Such term includes any usual

10 or reasonable settlement, financing, or other

11 closing costs associated with such qualified ac12 quisition costs.

13 (B) FIRST-TIME HOMEBUYER; OTHER

14 DEFINITIONS.—

15 (i) FIRST-TIME HOMEBUYER.—The

16 term ‘‘first-time homebuyer’’ means any

17 individual if such individual (and if mar18 ried, such individual’s spouse) had no

19 present ownership interest in a principal

20 residence during the 2-year period ending

21 on the date of acquisition of the principal

22 residence to which this paragraph applies.

23 (ii) PRINCIPAL RESIDENCE.—The

24 term ‘‘principal residence’’ has the same

25 meaning as when used in section 1034.
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1 (iii) DATE OF ACQUISITION.—The

2 term ‘‘date of acquisition’’ means the

3 date—

4 (I) on which a binding contract

5 to acquire the principal residence to

6 which this subsection applies is en7 tered into, or

8 (II) on which construction or re9 construction of such a principal resi10 dence is commenced.

11 (C) SPECIAL RULE WHERE DELAY IN AC12 QUISITION.—If—

13 (i) any amount is paid or distributed

14 from an individual retirement plan to an

15 individual for purposes of being used as

16 provided in paragraph (1), and

17 (ii) by reason of a delay in the acqui18 sition of the residence, the requirements of

19 paragraph (1) cannot be met,

20 the amount so paid or distributed may be paid

21 into an individual retirement plan as provided

22 in section 408(d)(3)(A)(i) of the Internal Reve23 nue Code of 1986 without regard to section

24 408(d)(3)(B) of such Code, and, if so paid into

25 such other plan, such amount shall not be taken
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1 into account in determining whether section

2 408(d)(3)(A)(i) of such Code applies to any

3 other amount.

4 (D) DISTRIBUTION RULES.—Any qualified

5 withdrawal shall not be treated as failing to

6 meet the requirements of sections

7 401(k)(2)(B)(i) or 403(b)(11) of such Code.

8 (d) ORDERING RULES FOR INCOME TAX PUR9 POSES.—For purposes of the Internal Revenue Code of

10 1986—

11 (1) all plans and amounts described in sub12 section (c)(1)(B) with respect to an individual shall

13 be treated as one plan, and

14 (2) qualified withdrawals from such plan shall

15 be treated as made—

16 (A) first from amounts which are includ17 ible in gross income of the individual when dis18 tributed to such individual, and

19 (B) then from amounts not so includible.

20 SEC. 104. PASSIVE LOSS EQUITY FOR REAL ESTATE PRO21 FESSIONALS.

22 (a) RENTAL REAL ESTATE ACTIVITIES OF PERSONS

23 IN REAL PROPERTY BUSINESS NOT AUTOMATICALLY

24 TREATED AS PASSIVE ACTIVITIES.—Section 469(c) (de-
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1 fining passive activity) is amended by adding at the end

2 thereof the following new paragraph:

3 ‘‘(7) RULES FOR TAXPAYERS IN REAL PROP4 ERTY BUSINESS TO END DISCRIMINATION.—

5 ‘‘(A) IN GENERAL.—If this paragraph ap6 plies to any taxpayer for a taxable year—

7 ‘‘(i) paragraph (2) shall not apply to

8 any rental real estate activity of such tax9 payer for such taxable year, and

10 ‘‘(ii) this section shall be applied as if

11 each interest of the taxpayer in rental real

12 estate were a separate activity.

13 Notwithstanding clause (ii), a taxpayer may

14 elect to treat all interests in rental real estate

15 as one activity.

16 ‘‘(B) TAXPAYERS TO WHOM PARAGRAPH

17 APPLIES.—This paragraph shall apply to a tax18 payer for a taxable year if more than one-half

19 of the personal services performed in trades or

20 businesses by the taxpayer during such taxable

21 year are performed in real property trades or

22 businesses in which the taxpayer materially par23 ticipates.

24 ‘‘(C) SPECIAL RULES FOR SUBPARAGRAPH

25 (B).—
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1 ‘‘(i) CLOSELY HELD C CORPORA2 TIONS.—In the case of a closely held C

3 corporation, the requirements of subpara4 graph (B) shall be treated as met for any

5 taxable year if more than 50 percent of the

6 gross receipts of such corporation for such

7 taxable year are derived from real property

8 trades or businesses in which the corpora9 tion materially participates.

10 ‘‘(ii) PERSONAL SERVICES AS AN EM11 PLOYEE.—For purposes of subparagraph

12 (B), personal services performed as an em13 ployee (other than as an owner-employee)

14 shall not be treated as performed in real

15 property trades or businesses.’’

16 (b) CONFORMING AMENDMENT.—Section 469(c)(2)

17 is amended by striking ‘‘The’’ and inserting ‘‘Except as

18 provided in paragraph (7), the’’.

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

20 this section shall apply to taxable years beginning after

21 February 1, 1993.

22 SEC. 105. REAL PROPERTY ACQUIRED BY A QUALIFIED OR23 GANIZATION.

24 (a) INTERESTS IN MORTGAGES.—The last sentence

25 of subparagraph (B) of section 514(c)(9) is hereby trans-
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1 ferred to subparagraph (A) of section 514(c)(9) and added

2 at the end thereof.

3 (b) MODIFICATIONS OF EXCEPTIONS.—Paragraph

4 (9) of section 514(c) is amended by adding at the end

5 thereof the following new subparagraph:

6 ‘‘(G) SPECIAL RULES FOR PURPOSES OF

7 THE EXCEPTIONS.—For purposes of subpara8 graph (B), except as otherwise provided by reg9 ulations, the following additional rules apply—

10 ‘‘(i) IN GENERAL.—

11 ‘‘(I) For purposes of clauses (iii)

12 and (iv) of subparagraph (B), a lease

13 to a person described in clause (iii) or

14 (iv) shall be disregarded if no more

15 than 10 percent of the leasable floor

16 space in a building is covered by the

17 lease and if the lease is on commer18 cially reasonable terms.

19 ‘‘(II) Clause (v) of subparagraph

20 (B) shall not apply to the extent the

21 financing is commercially reasonable

22 and is on substantially the same

23 terms as loans involving unrelated

24 persons; for this purpose, standards

25 for determining a commercially rea-
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1 sonable interest rate shall be provided

2 by the Secretary.

3 ‘‘(ii) QUALIFYING SALES OUT OF

4 FORECLOSURE BY FINANCIAL INSTITU5 TIONS.—In the case of a qualifying sale

6 out of foreclosure by a financial institution,

7 clauses (i) and (ii) of subparagraph (B)

8 shall not apply. For this purpose, a ‘quali9 fying sale out of foreclosure by a financial

10 institution’ exists where—

11 ‘‘(I) a qualified organization ac12 quires real property from a person (a

13 ‘financial institution’) described in

14 section 581 or 591(a) (including a

15 person in receivership) and the finan16 cial institution acquired the property

17 pursuant to a bid at foreclosure or by

18 operation of an agreement or of proc19 ess of law after a default on indebted20 ness which the property secured

21 (‘foreclosure’), and the financial insti22 tution treats any income realized from

23 the sale or exchange of the property

24 as ordinary income,
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1 ‘‘(II) the amount of the financing

2 provided by the financial institution

3 does not exceed the amount of the fi4 nancial institution’s outstanding in5 debtedness (determined without re6 gard to accrued but unpaid interest)

7 with respect to the property at the

8 time of foreclosure,

9 ‘‘(III) the financing provided by

10 the financial institution is commer11 cially reasonable and is on substan12 tially the same terms as loans between

13 unrelated persons for sales of fore14 closed property (for this purpose,

15 standards for determining a commer16 cially reasonable interest rate shall be

17 provided by the Secretary), and

18 ‘‘(IV) the amount payable pursu19 ant to the financing that is deter20 mined by reference to the revenue, in21 come, or profits derived from the

22 property (‘participation feature’) does

23 not exceed 25 percent of the principal

24 amount of the financing provided by

25 the financial institution, and the par-
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1 ticipation feature is payable no later

2 than the earlier of satisfaction of the

3 financing or disposition of the prop4 erty.’’

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

6 this section shall apply to debt-financed acquisitions of

7 real estate made on or after February 1, 1993.

8 SEC. 106. SPECIAL RULES FOR INVESTMENTS IN PARTNER9 SHIPS.

10 (a) MODIFICATION TO ANTI-ABUSE RULES.—Para11 graph (9) of section 514(c) (as amended by section 131

12 of this Act) is amended by adding at the end thereof the

13 following new subparagraph:

14 ‘‘(H) PARTNERSHIPS NOT INVOLVING TAX

15 AVOIDANCE.—

16 ‘‘(i) DE MINIMIS RULE FOR CERTAIN

17 LARGE PARTNERSHIPS.—The provisions of

18 subparagraph (B) shall not apply to an in19 vestment in a partnership having at least

20 250 partners if—

21 ‘‘(I) investments in the partner22 ship are organized into units that are

23 marketed primarily to individuals ex24 pected to be taxed at the maximum
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1 rate prescribed for individuals under

2 section 1,

3 ‘‘(II) at least 50 percent of each

4 class of interests is owned by such in5 dividuals,

6 ‘‘(III) the partners that are

7 qualified organizations owning inter8 ests in a class participate on substan9 tially the same terms as other part10 ners owning interests in that class,

11 and

12 ‘‘(IV) the principal purpose of

13 partnership allocations is not tax

14 avoidance.

15 ‘‘(ii) EXCEPTION WHERE TAXABLE

16 PERSONS OWN A SIGNIFICANT PERCENT17 AGE.—In the case of any partnership,

18 other than a partnership to which clause

19 (i) applies, in which persons who are ex20 pected (under the regulations to be pre21 scribed by the Secretary), at the time the

22 partnership is formed, to pay tax at the

23 maximum rate prescribed in section 1 or

24 11 (whichever is applicable) throughout the

25 term of the partnership own at least a 25-
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1 percent interest, the provisions of subpara2 graph (B) shall not apply if the partner3 ship satisfies the requirements of subpara4 graph (E).’’

5 (b) PUBLICLY TRADED PARTNERSHIPS; UNRELATED

6 BUSINESS INCOME FROM PARTNERSHIPS.—Subsection

7 (c) of section 512 is amended by striking paragraph (2)

8 (relating to publicly traded partnerships), by redesignating

9 paragraph (3) as paragraph (2), and by striking ‘‘para10 graph (1) or (2)’’ in paragraph (2) (as so redesignated)

11 and inserting ‘‘paragraph (1)’’.

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

13 this section shall apply to partnership interests acquired

14 on or after February 1, 1992.

15 TITLE II—REVENUE OFFSETS

16 Subtitle A—General Provisions

17 SEC. 201. ELIMINATION OF THE STATUTE OF LIMITATIONS

18 ON COLLECTION OF GUARANTEED STUDENT

19 LOANS.

20 Section 3(c) of the Higher Education Technical

21 Amendments of 1991 (Public Law 102–26) is amended

22 by striking out ‘‘that are brought before November 15,

23 1992’’.
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1 SEC. 202. INCREASED BASE TAX RATE ON OZONE-DEPLET2 ING CHEMICALS AND EXPANSION OF LIST OF

3 TAXED CHEMICALS.

4 (a) IN GENERAL.—Paragraph (1) of section 4681(b)

5 (relating to amount of tax) is amended to read as follows:

6 ‘‘(B) BASE TAX AMOUNT.—The base tax

7 amount for purposes of subparagraph (A) with

8 respect to any sale or use during a calendar

9 year before 1997 with respect to any ozone-de10 pleting chemical is the amount determined

11 under the following table for such calendar

12 year:

Base tax

Calendar year: amount:

1993 ............................................................... $1.85

1994 ............................................................... $2.75

1995 ............................................................... $3.65

1996 ............................................................... $4.55.’’

13 (b) CONFORMING AMENDMENTS.—

14 (1) Rates retained for chemical used in rigid

15 foam insulation.—The table in subparagraph (B) of

16 section 4682(g)(2) (relating to chemicals used in

17 rigid foam insulation) is amended—

18 (A) by striking ‘‘15’’ and inserting ‘‘13.5’’,

19 and

20 (B) by striking ‘‘10’’ and inserting ‘‘9.6’’.

21 (2) FLOOR STOCK TAXES.—
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1 (A) Subparagraph (C) of section

2 4682(h)(2) (relating to other tax-increase

3 dates) is amended by striking ‘‘and 1994’’ and

4 inserting ‘‘1994, 1995, and 1996, and July 1,

5 1993’’.

6 (B) Paragraph (3) of section 4682(h) (re7 lating to due date) is amended—

8 (i) by inserting ‘‘or July 1’’ after

9 ‘‘January 1’’, and

10 (ii) by inserting ‘‘or December 31, re11 spectively,’’ after ‘‘June 30’’.

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

13 this section shall apply to taxable chemicals sold or used

14 on or after July 1, 1993.

15 SEC. 203. MARK TO MARKET INVENTORY METHOD FOR SE16 CURITIES DEALERS.

17 (a) GENERAL RULE.—Subpart D of part II of sub18 chapter E of chapter 1 (relating to inventories) is amend19 ed by adding at the end thereof the following new section:

20 ‘‘SEC. 475. MARK TO MARKET INVENTORY METHOD FOR

21 DEALERS IN SECURITIES.

22 ‘‘(a) GENERAL RULE.—Notwithstanding any other

23 provision of this subpart, the following rules shall apply

24 to securities held by a dealer in securities:
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1 ‘‘(1) Any security which is inventory in the

2 hands of the dealer shall be included in inventory at

3 fair market value.

4 ‘‘(2) In the case of any security which is not in5 ventory in the hands of the dealer and which is held

6 at the close of any taxable year—

7 ‘‘(A) the dealer shall recognize gain or loss

8 as if such security were sold for its fair market

9 value on the last business day of such taxable

10 year, and

11 ‘‘(B) any gain or loss shall be taken into

12 account for such taxable year.

13 Proper adjustment shall be made in the amount of

14 any gain or loss subsequently realized for gain or

15 loss taken into account under the preceding sen16 tence. The Secretary may provide by regulations for

17 the application of this paragraph at times other than

18 the times provided in this paragraph.

19 ‘‘(b) EXCEPTIONS.—

20 ‘‘(1) IN GENERAL.—Subsection (a) shall not

21 apply to—

22 ‘‘(A) any security held for investment,

23 ‘‘(B) any security described in subsection

24 (c)(2)(C) which is originated or acquired by the

25 taxpayer in the ordinary course of a trade or
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1 business of the taxpayer and which is not held

2 for sale, and

3 ‘‘(C) any hedge with respect to—

4 ‘‘(i) a security to which subsection (a)

5 does not apply, or

6 ‘‘(ii) a position or a liability which is

7 not a security in the hands of the tax8 payer.

9 Subparagraph (C) shall not apply to any security

10 held by a person in its capacity as a dealer in securi11 ties.

12 ‘‘(2) IDENTIFICATION REQUIRED.—Any security

13 shall not be treated as described in subparagraph

14 (A), (B), or (C) of paragraph (1), as the case may

15 be, unless such security is clearly identified in the

16 dealer’s records as being described in such subpara17 graph before the close of the day on which it was ac18 quired, originated, or entered into (or such other

19 time as the Secretary may by regulations prescribe).

20 ‘‘(3) SECURITIES SUBSEQUENTLY NOT EX21 EMPT.—If a security ceases to be described in para22 graph (1) at any time after it was identified as such

23 under paragraph (2), this section shall apply to such

24 security as of the time such cessation occurs.
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1 ‘‘(4) SPECIAL RULE FOR PROPERTY HELD FOR

2 INVESTMENT.—To the extent provided in regula3 tions, subparagraph (A) of paragraph (1) shall not

4 apply to any security described in subparagraph (D)

5 or (E) of subsection (c)(2) which is held by a dealer

6 in such securities.

7 ‘‘(c) DEFINITIONS.—For purposes of this section—

8 ‘‘(1) DEALER IN SECURITIES DEFINED.—The

9 term ‘dealer in securities’ means a taxpayer who—

10 ‘‘(A) regularly purchases securities from or

11 sells securities to customers in the ordinary

12 course of a trade or business; or

13 ‘‘(B) regularly offers to enter into, assume,

14 offset, assign or otherwise terminate positions

15 in securities with customers in the ordinary

16 course of a trade or business.

17 ‘‘(2) SECURITY DEFINED.—The term ‘security’

18 means any—

19 ‘‘(A) share of stock in a corporation;

20 ‘‘(B) partnership or beneficial ownership

21 interest in a widely held or publicly traded part22 nership or trust;

23 ‘‘(C) note, bond, debenture, or other evi24 dence of indebtedness;
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1 ‘‘(D) any interest rate, currency, or equity

2 notional principal contract;

3 ‘‘(E) evidence of an interest in, or a deriv4 ative financial instrument in, any security de5 scribed in subparagraph (A), (B), (C), or (D),

6 or any currency, including any option, forward

7 contract, short position, and any similar finan8 cial instrument in such a security (but not in9 cluding any contract to which section 1256(a)

10 applies); and

11 ‘‘(F) position which—

12 ‘‘(i) is not a security described in sub13 paragraph (A), (B), (C), (D), or (E),

14 ‘‘(ii) is a hedge with respect to such

15 a security, and

16 ‘‘(iii) is clearly identified in the deal17 er’s records as being described in this sub18 paragraph before the close of the day on

19 which it was acquired or entered into (or

20 such other time as the Secretary may by

21 regulations prescribe).

22 ‘‘(3) HEDGE.—The term ‘hedge’ includes any

23 position which reduces the dealer’s risk of interest

24 rate or price changes or currency fluctuations.
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1 ‘‘(d) SPECIAL RULES.—For purposes of this sec2 tion—

3 ‘‘(1) CERTAIN RULES NOT TO APPLY.—The

4 rules of sections 263(g) and 263A shall not apply to

5 securities to which subsection (a) applies.

6 ‘‘(2) IMPROPER IDENTIFICATION.—If a tax7 payer—

8 ‘‘(A) identifies any security or position

9 under subsection (b)(2) as being described in

10 such subsection and such security or position is

11 not so described, or

12 ‘‘(B) fails under subsection (c)(2)(F)(iii) to

13 identify a security or position which is described

14 in such subsection at the time such identifica15 tion is required,

16 the provisions of subsection (a) shall apply to such

17 security or position, except that any loss under this

18 section prior to the disposition of the security shall

19 be recognized only to the extent of gain previously

20 recognized under this section with respect to such

21 security.

22 ‘‘(e) REGULATORY AUTHORITY.—The Secretary shall

23 prescribe such regulations as may be necessary or appro24 priate to carry out the purposes of this section, including

25 rules—
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1 ‘‘(1) to prevent the use of year-end transfers,

2 related parties, or other arrangements to avoid the

3 provisions of this section, and

4 ‘‘(2) to provide for the application of this sec5 tion to hedges which do not hedge a specific secu6 rity, position, or liability.’’

7 (b) CONFORMING AMENDMENTS.—

8 (1) Paragraph (1) of section 988(d) is amend9 ed—

10 (A) by striking ‘‘section 1256’’ and insert11 ing ‘‘section 475 or 1256’’, and

12 (B) by striking ‘‘1092 and 1256’’ and in13 serting ‘‘475, 1092, and 1256’’.

14 (2) The table of sections for subpart D of part

15 II of subchapter E of chapter 1 is amended by add16 ing at the end thereof the following new item:

‘‘Sec. 475. Mark to market inventory method for dealers in securities.’’

17 (c) EFFECTIVE DATE.—

18 (1) IN GENERAL.—The amendments made by

19 this section shall apply to all taxable years ending on

20 or after December 31, 1994.

21 (2) CHANGE IN METHOD OF ACCOUNTING.—In

22 the case of any taxpayer required by this section to

23 change its method of accounting for any taxable

24 year—
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1 (A) such change shall be treated as initi2 ated by the taxpayer,

3 (B) such change shall be treated as made

4 with the consent of the Secretary, and

5 (C) the net amount of the adjustments re6 quired to be taken into account by the taxpayer

7 under section 481 of the Internal Revenue Code

8 of 1986 shall be taken into account ratably over

9 the 10-taxable year period beginning with the

10 first taxable year ending on or after December

11 31, 1993.

12 SEC. 204. DISALLOWANCE OF INTEREST ON CERTAIN OVER13 PAYMENTS OF TAX.

14 (a) GENERAL RULE.—Subsection (e) of section 6611

15 is amended to read as follows:

16 ‘‘(e) DISALLOWANCE OF INTEREST ON CERTAIN

17 OVERPAYMENTS.—

18 ‘‘(1) REFUNDS WITHIN 45 DAYS AFTER RETURN

19 IS FILED.—If any payment of tax imposed by this

20 title is refunded within 45 days after the last day

21 prescribed for filing the return of such tax (deter22 mined without regard to any extension of time for

23 filing the return) or, in the case of a return filed

24 after such last date, is refunded within 45 days after
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1 the date the return is filed, no interest shall be al2 lowed under subsection (a) on such overpayment.

3 ‘‘(2) REFUNDS AFTER CLAIM FOR CREDIT OR

4 REFUND.—If—

5 ‘‘(A) the taxpayer files a claim for a credit

6 or refund for any overpayment of tax imposed

7 by this title, and

8 ‘‘(B) such overpayment is refunded within

9 45 days after such claim is filed,

10 no interest shall be allowed on such overpayment from the

11 date the claim is filed until the day the refund is made.

12 ‘‘(3) IRS INITIATED ADJUSTMENTS.—Notwith13 standing any other provision, if an adjustment, initi14 ated by or on behalf of the Secretary, results in a

15 refund or credit of an overpayment, interest on such

16 overpayment shall be computed by subtracting 45

17 days from the number of days interest would other18 wise be allowed with respect to such overpayment.’’

19 (b) EFFECTIVE DATES.—

20 (1) Paragraph (1) of section 6611(e) of the In21 ternal Revenue Code of 1986 (as amended by sub22 section (a)) shall apply in the case of returns the

23 due date for which (determined without regard to

24 extensions) is on or after July 1, 1993.
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1 (2) Paragraph (2) of section 6611(e) of such

2 Code (as so amended) shall apply in the case of

3 claims for credit or refund of any overpayment filed

4 on or after July 1, 1993 regardless of the taxable

5 period to which such refund relates.

6 (3) Paragraph (3) of section 6611(e) of such

7 Code (as so amended) shall apply in the case of any

8 refund paid on or after July 1, 1993 regardless of

9 the taxable period to which such refund relates.

10 Subtitle B—Electromagnetic

11 Spectrum Function

12 SEC 211. SHORT TITLE.

13 This subtitle may be cited as the ‘‘Emerging Tele14 communications Technologies Act of 1993’’.

15 SEC. 212. FINDINGS.

16 The Congress finds that—

17 (1) spectrum is a valuable natural resource;

18 (2) it is in the national interest that this re19 source be used more efficiently;

20 (3) the spectrum below 6 gigahertz (GHz) is

21 becoming increasingly congested, and, as a result en22 tities that develop innovative new spectrum-based

23 services are finding it difficult to bring these services

24 to the marketplace;
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1 (4) scarcity of assignable frequencies can and

2 will—

3 (A) impede the development and commer4 cialization of new spectrum-based products and

5 services;

6 (B) reduce the capacity and efficiency of

7 the United States telecommunications system;

8 and

9 (C) adversely affect the productive capacity

10 and international competitiveness of the United

11 States economy;

12 (5) the United States Government presently

13 lacks explicit authority to use excess

14 radiocommunications capacity to satisfy non-United

15 States Government requirements;

16 (6) more efficient use of the spectrum can pro17 vide the resources for increased economic returns;

18 (7) many commercial users derive significant

19 economic benefits from their spectrum licenses, both

20 through the income they earn from their use of the

21 spectrum and the returns they realize upon transfer

22 of their licenses to third parties; but under current

23 procedures, the United States public does not suffi24 ciently share in their benefits;
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1 (8) many United States Government functions

2 and responsibilities depend heavily on the use of the

3 radio spectrum, involve unique applications, and are

4 performed in the broad national and public interest;

5 (9) competitive bidding for spectrum can yield

6 significant benefits for the United States economy

7 by increasing the efficiency of spectrum allocations,

8 assignment, and use; and for United States tax9 payers by producing substantial revenues for the

10 United States Treasury; and

11 (10) the Secretary, the President, and the Com12 mission should be directed to take appropriate steps

13 to foster the more efficient use of this valuable na14 tional resource, including the reallocation of a target

15 amount of 200 megahertz (MHz) of spectrum from

16 United States Government use under section 305 of

17 the Communications Act to non-United States Gov18 ernment use pursuant to other provisions of the

19 Communications Act and the implementation of

20 competitive bidding procedures by the Commission

21 for some new assignments of the spectrum.

22 SEC. 213. NATIONAL SPECTRUM PLANNING.

23 (a) PLANNING ACTIVITIES.—The Secretary and the

24 Chairman of the Commission shall, at least twice each
41

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1 year, conduct joint spectrum planning meetings with re2 spect to the following issues—

3 (1) future spectrum needs;

4 (2) the spectrum allocation actions necessary to

5 accommodate those needs, including consideration of

6 innovation and marketplace developments that may

7 affect the relative efficiencies of different portions of

8 the spectrum; and

9 (3) actions necessary to promote the efficient

10 use of the spectrum, including proven spectrum

11 management techniques to promote increased shared

12 use of the spectrum as a means of increasing non13 United States Government access; and innovation in

14 spectrum utilization including means of providing in15 centives for spectrum users to develop innovative

16 services and technologies.

17 (b) REPORTS.—The Secretary and the Chairman of

18 the Commission shall submit a joint annual report to the

19 President on the joint spectrum planning meetings con20 ducted under subsection (a) and any recommendations for

21 action developed in such meetings.

22 (c) OPEN PROCESS.—The Secretary and the Com23 mission will conduct an open process under this section

24 to ensure the full consideration and exchange of views
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1 among any interested entities, including all private, public,

2 commercial, and governmental interests.

3 SEC. 214. IDENTIFICATION OF REALLOCABLE FRE4 QUENCIES.

5 (a) IDENTIFICATION REQUIRED.—The Secretary

6 shall prepare and submit to the President the reports re7 quired by subsection (d) to identify bands of frequencies

8 that—

9 (1) are allocated on a primary basis for United

10 States Government use and eligible for licensing

11 pursuant to section 305(a) of the Communications

12 Act;

13 (2) are not required for the present or identifi14 able future needs of the United States Government;

15 (3) can feasibly be made available during the

16 next 15 years after enactment of this title for use

17 under the provisions of the Communications Act for

18 non-United States Government users;

19 (4) will not result in costs to the Federal Gov20 ernment that are excessive in relation to the benefits

21 that may be obtained from the potential non-United

22 States Government uses; and

23 (5) are likely to have significant value for non24 United States Government uses under the Commu25 nications Act.
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1 (b) AMOUNT OF SPECTRUM RECOMMENDED.—

2 (1) IN GENERAL.—The Secretary shall rec3 ommend as a goal for reallocation, for use by non4 United States Government stations, bands of fre5 quencies constituting a target amount of 200 MHz,

6 that are located below 6 GHz, and that meet the cri7 teria specified in paragraphs (1) through (5) of sub8 section (a). If the Secretary identifies (as meeting

9 such criteria) bands of frequencies totalling more

10 than 200 MHz, the Secretary shall identify and rec11 ommend for reallocation those bands (totalling not

12 less than 200 MHz) that are likely to have the

13 greatest potential for non-United States Government

14 uses under the Communications Act.

15 (2) MIXED USES PERMITTED TO BE COUNT16 ED.—Bands of frequencies which the Secretary rec17 ommends be partially retained for use by United

18 States Government stations, but which are also rec19 ommended to be reallocated and made available

20 under the Communications Act for use by non-Unit21 ed States Government stations, may be counted to22 ward the target 200 MHz of spectrum required by

23 paragraph (1) of this subsection, except that—

24 (A) the bands of frequencies counted under

25 this paragraph may not count toward more
44

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1 than one-half of the amount targeted by para2 graph (1) of this subsection;

3 (B) a band of frequencies may not be

4 counted under this paragraph unless the assign5 ments of the band to United States Government

6 stations under section 305 of the Communica7 tions Act are limited by geographic area, by

8 time, or by other means so as to guarantee that

9 the potential use to be made by which United

10 States Government stations is substantially less

11 (as measured by geographic area, time, or oth12 erwise) than the potential United States Gov13 ernment use to be made; and

14 (C) the operational sharing permitted

15 under this paragraph shall be subject to proce16 dures which the Commission and the Depart17 ment of Commerce shall establish and imple18 ment to ensure against harmful interference.

19 (c) CRITERIA FOR IDENTIFICATION.—

20 (1) NEEDS OF THE UNITED STATES GOVERN21 MENT.—In determining whether a band of fre22 quencies meets the criteria specified in subsection

23 (a)(2), the Secretary shall—

24 (A) consider whether the band of fre25 quencies is used to provide a communications
45

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1 service that is or could be available from a com2 mercial provider;

3 (B) seek to promote—

4 (i) the maximum practicable reliance

5 on commercially available substitutes;

6 (ii) the sharing of frequencies (as per7 mitted under subsection (b)(2));

8 (iii) the development and use of new

9 communications technologies; and

10 (iv) the use of nonradiating commu11 nications systems where practicable;

12 (C) seek to avoid—

13 (i) serious degradation of United

14 States Government services and oper15 ations;

16 (ii) excessive costs to the United

17 States Government and civilian users of

18 such Government services; and

19 (iii) identification of any bands for

20 reallocation that are likely to be subject to

21 substitution for the reasons specified in

22 section 405(b)(2)(A) through (C); and

23 (D) exempt power marketing administra24 tions and the Tennessee Valley Authority from

25 any reallocation procedures.
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1 (2) FEASIBILITY OF USE.—In determining

2 whether a frequency band meets the criteria speci3 fied in subsection (a)(3), the Secretary shall—

4 (A) assume such frequencies will be as5 signed by the Commission under section 303 of

6 the Communications Act over the course of fif7 teen years after the enactment of this title;

8 (B) assume reasonable rates of scientific

9 progress and growth of demand for tele10 communications services;

11 (C) determine the extent to which the

12 reallocation or reassignment will relieve actual

13 or potential scarcity of frequencies available for

14 non-United States Government use;

15 (D) seek to include frequencies which can

16 be used to stimulate the development of new

17 technologies; and

18 (E) consider the cost to reestablish United

19 States Government services displaced by the

20 reallocation of spectrum during the fifteen year

21 period.

22 (3) COSTS TO THE UNITED STATES GOVERN23 MENT.—In determining whether a frequency band

24 meets the criteria specified in subsection (a)(4), the

25 Secretary shall consider—
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1 (A) the costs to the United States Govern2 ment of reaccommodating its services in order

3 to make spectrum available for non-United

4 States Government use, including the incremen5 tal costs directly attributable to the loss of the

6 use of the frequency band; and

7 (B) the benefits that could be obtained

8 from reallocating such spectrum to non-United

9 States Government users, including the value of

10 such spectrum in promoting—

11 (i) the delivery of improved service to

12 the public;

13 (ii) the introduction of new services;

14 and

15 (iii) the development of new commu16 nications technologies.

17 (4) NON-UNITED STATES GOVERNMENT USE.—

18 In determining whether a band of frequencies meets

19 the criteria specified in subsection (a)(5), the Sec20 retary shall consider—

21 (A) the extent to which equipment is com22 mercially available that is capable of utilizing

23 the band; and
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1 (B) the proximity of frequencies that are

2 already assigned for non-United States Govern3 ment use.

4 (d) PROCEDURE FOR IDENTIFICATION OF

5 REALLOCABLE BANDS OF FREQUENCIES.—

6 (1) SUBMISSION OF REPORTS TO THE PRESI7 DENT TO IDENTIFY AN INITIAL 50 MHZ TO BE MADE

8 AVAILABLE IMMEDIATELY FOR REALLOCATION, AND

9 TO PROVIDE PRELIMINARY AND FINAL REPORTS ON

10 ADDITIONAL FREQUENCIES TO BE REALLOCATED.—

11 (A) Within 3 months after the date of the

12 enactment of this title, the Secretary shall pre13 pare and submit to the President a report

14 which specifically identifies an initial 50 MHz

15 of spectrum that are located below 3 GHz, to

16 be made available for reallocation to the Fed17 eral Communications Commission upon issu18 ance of this report, and to be distributed by the

19 Commission pursuant to competitive bidding

20 procedures.

21 (B) The Department of Commerce shall

22 make available to the Federal Communications

23 Commission 50 MHz as identified in subpara24 graph (A) of electromagnetic spectrum for allo25 cation of land-mobile or land-mobile-satellite
49

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1 services. Notwithstanding section 553 of the

2 Administrative Procedure Act and title III of

3 the Communications Act, the Federal Commu4 nications Commission shall allocate such spec5 trum and conduct competitive bidding proce6 dures to complete the assignment of such spec7 trum in a manner which ensures that the pro8 ceeds from such bidding are received by the

9 Federal Government no later than September

10 30, 1993. From such proceeds, Federal agen11 cies displaced by this transfer of the electro12 magnetic spectrum to the Federal Communica13 tions Commission shall be reimbursed for rea14 sonable costs directly attributable to such dis15 placement. The Department of Commerce shall

16 determine the amount of, and arrange for, such

17 reimbursement. Amounts to agencies shall be

18 available subject to appropriation Acts.

19 (C) Within 12 months after the date of the

20 enactment of this title, the Secretary shall pre21 pare and submit to the President a preliminary

22 report to identify reallocable bands of fre23 quencies meeting the criteria established by this

24 section.
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1 (D) Within 24 months after the date of en2 actment of this title, the Secretary shall prepare

3 and submit to the President a final report

4 which identifies the target 200 MHz for

5 reallocation (which shall encompass the initial

6 50 MHz previously designated under subpara7 graph (A)).

8 (E) The President shall publish the reports

9 required by this section in the Federal Register.

10 (2) CONVENING OF PRIVATE SECTOR ADVISORY

11 COMMITTEE.—Not later than 12 months after the

12 enactment of this title, the Secretary shall convene

13 a private sector advisory committee to—

14 (A) review the bands of frequencies identi15 fied in the preliminary report required by para16 graph (1)(C);

17 (B) advise the Secretary with respect to—

18 (i) the bands of frequencies which

19 should be included in the final report re20 quired by paragraph (1)(D); and

21 (ii) the effective dates which should be

22 established under subsection (e) with re23 spect to such frequencies;
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1 (C) receives public comment on the Sec2 retary’s preliminary and final reports under this

3 subsection; and

4 (D) prepare and submit the report re5 quired by paragraph (4).

6 The private sector advisory committee shall meet at

7 least quarterly until each of the actions required by

8 section 405(a) have taken place.

9 (3) COMPOSITION OF COMMITTEE; CHAIR10 MAN.—The private sector adviser committee shall in11 clude—

12 (A) the Chairman of the Commission, and

13 the Secretary, or their designated representa14 tives, and two other representatives from two

15 different United States Government agencies

16 that are spectrum users, other than the Depart17 ment of Commerce, as such agencies may be

18 designated by the Secretary; and

19 (B) Persons who are representative of—

20 (i) manufacturers of spectrum-de21 pendent telecommunications equipment;

22 (ii) commercial users;

23 (iii) other users of the electromagnetic

24 spectrum; and
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1 (iv) other interested members of the

2 public who are knowledgeable about the

3 uses of the electromagnetic spectrum to be

4 chosen by the Secretary.

5 A majority of the members of the committee shall be

6 members described in subparagraph (B), and one of

7 such members shall be designated as chairman by

8 the Secretary.

9 (4) RECOMMENDATIONS ON SPECTRUM ALLOCA10 TION PROCEDURES.—The private sector advisory

11 committee shall, not later than 12 months after its

12 formation, submit to the Secretary, the Commission,

13 the Committee on Energy and Commerce of the

14 House of Representatives, and the Committee on

15 Commerce, Science and Transportation of the Sen16 ate, such recommendations as the committee consid17 ers appropriate for the reform of the process of allo18 cating the electromagnetic spectrum between United

19 States Government users and non-United States

20 Government users, and any dissenting views thereon.

21 (e) TIMETABLE FOR REALLOCATION AND LIMITA22 TION.—The Secretary shall, as part of the final report re23 quired by subsection (d)(1)(D), include a timetable for the

24 effective dates by which the President shall, within 15

25 years after enactment of this title, withdraw or limit as-
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1 signments on frequencies specified in the report. The rec2 ommended effective dates shall—

3 (1) permit the earliest possible reallocation of

4 the frequency bands, taking into account the re5 quirements of section 406(a);

6 (2) be based on the useful remaining life of

7 equipment that has been purchased or contracted for

8 to operate on identified frequencies;

9 (3) be based on the need to coordinate fre10 quency use with other nations; and

11 (4) avoid the imposition of incremental costs on

12 the United States Government directly attributable

13 to the loss of the use of frequencies or the changing

14 to different frequencies that are excessive in relation

15 to the benefits that may be obtained from non-Unit16 ed States Government uses of the reassigned fre17 quencies.

18 SEC. 215. WITHDRAWAL OF ASSIGNMENT TO UNITED

19 STATES GOVERNMENT STATIONS.

20 (a) IN GENERAL.—The President shall—

21 (1) within 3 months after receipt of the Sec22 retary’s report under section 404(d)(1)(A), withdraw

23 or limit the assignment to a United States Govern24 ment station of any frequency on the initial 50 MHz
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1 which that report recommends for immediate

2 reallocation;

3 (2) with respect to other frequencies rec4 ommended for reallocation by the Secretary’s report

5 in section 404(d)(1)(D), by the effective dates rec6 ommended pursuant to section 404(e) (except as

7 provided in subsection (b)(4) of this section), with8 draw or limit the assignment to a United States

9 Government station of any frequency which that re10 port recommends be reallocated or available for

11 mixed use on such effective dates;

12 (3) assign or reassign other frequencies to

13 United States Government stations as necessary to

14 adjust to such withdrawal or limitation of assign15 ments; and

16 (4) publish in the Federal Register a notice and

17 description of the actions taken under this sub18 section.

19 (b) EXCEPTIONS.—

20 (1) AUTHORITY TO SUBSTITUTE.—If the Presi21 dent determines that a circumstance described in

22 section 405(b)(2) exists, the President—

23 (A) may, within 1 month after receipt of

24 the Secretary’s report under section

25 404(d)(1)(A), and within 6 months after receipt
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1 of the Secretary’s report under section

2 404(d)(1)(D), substitute an alternative fre3 quency or band of frequencies for the frequency

4 or band that is subject to such determination

5 and withdraw (or limit) the assignment of that

6 alternative frequency or band in the manner re7 quired by subsection (a); and

8 (B) shall publish in the Federal Register a

9 statement of the reasons for taking the action

10 described in subparagraph (A).

11 (2) GROUNDS FOR SUBSTITUTION.—For pur12 poses of paragraph (1), the following circumstances

13 are described in this paragraph:

14 (A) the reassignment would seriously jeop15 ardize the national security interests of the

16 United States;

17 (B) the frequency proposed for reassign18 ment is uniquely suited to meeting important

19 United States Governmental needs;

20 (C) the reassignment would seriously jeop21 ardize public health or safety; or

22 (D) the reassignment will result in incre23 mental costs to the United States Government

24 that are excessive in relation to the benefits
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1 that may be obtained from non-United States

2 Government uses of the reassigned frequency.

3 (3) CRITERIA FOR SUBSTITUTED FRE4 QUENCIES.—For purposes of paragraph (1), a fre5 quency may not be substituted for a frequency iden6 tified by the final report of the Secretary under sec7 tion 404(d)(1)(D) unless the substituted frequency

8 also meets each of the criteria specified by section

9 404(a).

10 (4) DELAYS IN IMPLEMENTATION.—If the

11 President determines that any action cannot be com12 pleted by the effective dates recommended by the

13 Secretary pursuant to section 404(e), or that such

14 an action by such date would result in a frequency

15 being unused as a consequence of the Commission’s

16 plan under section 406, the President may—

17 (A) withdraw or limit the assignment to

18 United States Government stations on a later

19 date that is consistent with such plan, by pro20 viding notice to that effect in the Federal Reg21 ister, including the reason that withdrawal at a

22 later date is required; or

23 (B) substitute alternative frequencies pur24 suant to the provisions of this subsection.
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1 (c) COSTS OF WITHDRAWING FREQUENCIES AS2 SIGNED TO THE UNITED STATES GOVERNMENT; APPRO3 PRIATIONS AUTHORIZED.—Any United States Govern4 ment licensee, or non-United States Government entity op5 erating on behalf of a United States Government licensee,

6 that is displaced from a frequency pursuant to this section

7 may be reimbursed not more than the incremental costs

8 it incurs, in such amounts as provided in advance in ap9 propriation Acts, that are directly attributable to the loss

10 of the use of the frequency pursuant to this section. The

11 estimates of these costs shall be prepared by the affected

12 agency, in consultation with the Department of Com13 merce.

14 (d) There are authorized to be appropriated to the

15 affected licensee agencies such sums as may be necessary

16 to carry out the purposes of this section.

17 SEC. 216. DISTRIBUTION OF FREQUENCIES BY THE COM18 MISSION.

19 (a) PLANS SUBMITTED.—

20 (1) With respect to the initial 50 MHz to be re21 allocated from United States Government to non22 United States Government use under section

23 404(d)(1)(A), not later than 6 months after enact24 ment of this title, the Commission shall complete a

25 public notice and comment proceeding regarding the
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1 allocation of this spectrum and shall form a plan to

2 assign such spectrum pursuant to competitive bid3 ding procedures, pursuant to section 408, during fis4 cal years 1994 through 1996.

5 (2) With respect to the remaining spectrum to

6 be reallocated from United States Government to

7 non-United States Government use under section

8 404(e), not later than 2 years after issuance of the

9 report required by section 404(d)(1)(D), the Com10 mission shall complete a public notice and comment

11 proceeding; and the Commission shall, after con12 sultation with the Secretary, prepare and submit to

13 the President a plan for the distribution under the

14 Communications Act of the frequency bands reallo15 cated pursuant to the requirements of this title.

16 Such plan shall—

17 (A) not propose the immediate distribution

18 of all such frequencies, but, taking into account

19 the timetable recommended by the Secretary

20 pursuant to section 404(e), shall propose—

21 (i) gradually to distribute the fre22 quencies remaining, after making the res23 ervation required by subparagraph (ii),

24 over the course of a 10-year period begin-
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1 ning on the date of submission of such

2 plan; and

3 (ii) to reserve a significant portion of

4 such frequencies for distribution beginning

5 after the end of such 10-year period;

6 (B) contain appropriate provisions to en7 sure—

8 (i) the availability of frequencies for

9 new technologies and services in accord10 ance with the policies of section 7 of the

11 Communications Act (47 U.S.C. 157); and

12 (ii) the availability of frequencies to

13 stimulate the development of such tech14 nologies; and

15 (C) not prevent the Commission from allo16 cating bands of frequencies for specific uses in

17 future rulemaking proceedings.

18 (b) AMENDMENT TO THE COMMUNICATIONS ACT.—

19 Section 303 of the Communications Act is amended by

20 adding at the end thereof the following new subsection:

21 ‘‘(u) Have authority to assign the frequencies reallo22 cated from United States Government use to non-United

23 States Government use pursuant to the Emerging Tele24 communications Technologies Act of 1991, except that

25 any such assignment shall expressly be made subject to
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1 the right of the President to reclaim such frequencies

2 under the provisions of section 407 of the Emerging Tele3 communications Technologies Act of 1991.’’.

4 SEC. 217. AUTHORITY TO RECLAIM REASSIGNED FRE5 QUENCIES.

6 (a) AUTHORITY OF PRESIDENT.—The President may

7 reclaim reallocated frequencies for reassignment to United

8 States Government stations in accordance with this sec9 tion.

10 (b) PROCEDURE FOR RECLAIMING FREQUENCIES.—

11 (1) UNASSIGNED FREQUENCIES.—If the fre12 quencies to be reclaimed have not been assigned by

13 the Commission, the President may reclaim them

14 based on the grounds described in section 405(b)(2).

15 (2) ASSIGNED FREQUENCIES.—If the fre16 quencies to be reclaimed have been assigned by the

17 Commission, the President may reclaim them based

18 on the grounds described in section 405(b)(2), ex19 cept that the notification required by section

20 405(b)(1) shall include—

21 (A) a timetable to accommodate an orderly

22 transition for licensees to obtain new fre23 quencies and equipment necessary for their uti24 lization; and
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1 (B) an estimate of the cost of displacing

2 the licensees.

3 (c) COSTS OF RECLAIMING FREQUENCIES.—Any

4 non-United States Government licensee that is displaced

5 from a frequency pursuant to this section shall be reim6 bursed the incremental costs it incurs that are directly at7 tributable to the loss of the use of the frequency pursuant

8 to this section.

9 (d) EFFECT ON OTHER LAW.—Nothing in this sec10 tion shall be construed to limit or otherwise affect the au11 thority of the President under section 706 of the Commu12 nications Act (47 U.S.C. 606).

13 SEC. 218. COMPETITIVE BIDDING.

14 (a) COMPETITIVE BIDDING AUTHORIZED.—Section

15 309 of the Communications Act is amended by adding the

16 following new subsection:

17 ‘‘(j)(1)(A) The Commission shall use competitive bid18 ding for awarding all initial licenses or new construction

19 permits, including licenses and permits for spectrum re20 allocated for non-United States Government use pursuant

21 to the Emerging Telecommunications Technologies Act of

22 1991, subject to the exclusions listed in paragraph (2).

23 ‘‘(B) The Commission shall require potential bidders

24 to file a first-stage application indicating an intent to par25 ticipate in the competitive bidding process and containing
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1 such other information as the Commission finds necessary.

2 After conducting the bidding, the Commission shall re3 quire the winning bidder to submit a second-stage applica4 tion. Upon determining that such application is acceptable

5 for filing and that the applicant is qualified pursuant to

6 subparagraph (C), the Commission shall grant a permit

7 or license.

8 ‘‘(C) No construction permit or license shall be grant9 ed to an applicant selected pursuant to subparagraph (B)

10 unless the Commission determines that such applicant is

11 qualified pursuant to section 308(b) and subsection (a) of

12 this section, on the basis of the information contained in

13 the first- and second-stage applications submitted under

14 subparagraph (B).

15 ‘‘(D) Each participant in the competitive bidding

16 process is subject to the schedule of changes contained in

17 section 8 of this Act.

18 ‘‘(E) The Commission shall have the authority in

19 awarding construction permits or licenses under competi20 tive bidding procedures to (i) define the geographic and

21 frequency limitations and technical requirements, if any,

22 of such permits or licenses; (ii) establish minimum accept23 able competitive bids; and (iii) establish other appropriate

24 conditions on such permits and licenses that will serve the

25 public interest.
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1 ‘‘(F) The Commission, in designing the competitive

2 bidding procedures under this subsection, shall study and

3 include procedures—

4 ‘‘(i) to ensure bidding access for small and

5 rural companies,

6 ‘‘(ii) if appropriate, to extend the holding period

7 for winning bidders awarded permits or licenses, and

8 ‘‘(iii) to expand review and enforcement require9 ments to ensure that winning bidders continue to

10 meet their obligations under this Act.

11 ‘‘(G) The Commission shall, within 6 months after

12 enactment of the Emerging Telecommunications Tech13 nologies Act of 1991, following public notice and comment

14 proceedings, adopt rules establishing competitive bidding

15 procedures under this subsection, including the method of

16 bidding and the basis for payment (such as flat fees, fixed

17 or variable royalties, combinations of flat fees and royal18 ties, or other reasonable forms of payment); and a plan

19 for applying such competitive bidding procedures to the

20 initial 50 MHz reallocated from United States Govern21 ment to non-United States Government use under section

22 404(d)(1)(A) of the Emerging Telecommunications Tech23 nologies Act of 1991, to be distributed during the fiscal

24 years 1994 through 1996.

25 ‘‘(2) Competitive bidding shall not apply to—
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1 ‘‘(A) license renewals;

2 ‘‘(B) the United States Government and State

3 or local government entities;

4 ‘‘(C) amateur operator services, over-the-air ter5 restrial radio and television broadcast services, pub6 lic safety services, and radio astronomy services;

7 ‘‘(D) private radio end-user licenses, such as

8 Specialized Mobile Radio Service (SMRS), maritime,

9 and aeronautical end-user licenses;

10 ‘‘(E) any license grant to a non-United States

11 Government licensee being moved from its current

12 frequency assignment to a different one by the Com13 mission in order to implement the goals and objec14 tives underlying the Emerging Telecommunications

15 Technologies Act of 1991;

16 ‘‘(F) any other service, class of services, or as17 signments that the Commission determines, after

18 conducting public comment and notice proceedings,

19 should be exempt from competitive bidding because

20 of public interest factors warranting an exemption;

21 and

22 ‘‘(G) small businesses, as defined in section

23 3(a)(1) of the Small Business Act.

24 ‘‘(3) In implementing this subsection, the Commis25 sion shall ensure that current and future rural tele-
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1 communications needs are met and that existing rural li2 censees and their subscribers are not adversely affected.

3 ‘‘(4) Monies received from competitive bidding pursu4 ant to this subsection shall be deposited in the general

5 fund of the United States Treasury.’’.

6 (b) RANDOM SELECTION NOT TO APPLY WHEN COM7 PETITIVE BIDDING REQUIRED.—Section 309(i)(1) of the

8 Communications Act is amended by striking the period

9 after the word ‘‘selection’’ and inserting ‘‘, except in in10 stances where competitive bidding procedures are required

11 under subsection (j).’’.

12 (c) SPECTRUM ALLOCATION DECISIONS.—Section

13 303 of the Communications Act is amended by adding the

14 following new subsection:

15 ‘‘(v) In making spectrum allocation decisions among

16 services that are subject to competitive bidding, the Com17 mission is authorized to consider as one factor among oth18 ers taken into account in making its determination, the

19 relative economic values and other public interest benefits

20 of the proposed uses as reflected in the potential revenues

21 that would be collected under its competitive bidding pro22 cedures.’’.

23 SEC. 219. DEFINITIONS.

24 As used in this subtitle:
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1 (1) The term ‘‘allocation’’ means an entry in

2 the National Table of Frequency Allocations of a

3 given frequency band for the purpose of its use by

4 one or more radiocommunications services.

5 (2) The term ‘‘assignment’’ means an author6 ization given by the Commission or the United

7 States Government for a radio station to use a radio

8 frequency or radio frequency channel.

9 (3) The term ‘‘Commission’’ means the Federal

10 Communications Commission.

11 (4) The term ‘‘Communications Act’’ means the

12 Communications Act of 1934 (47 U.S.C. 151 et

13 seq.).

14 (5) The term ‘‘Secretary’’ means the Secretary

15 of Commerce.

16 Subtitle C—Other Provisions

17 SEC. 221. EXTENSION OF CURRENT LAW REGARDING LUMP18 SUM WITHDRAWAL OF RETIREMENT CON19 TRIBUTIONS FOR CIVIL SERVICE RETIREES.

20 (a) CIVIL SERVICE RETIREMENT SYSTEM.—Section

21 8343a(f)(3) of title 5, United States Code, is amended by

22 striking out ‘‘October 1, 1995’’ and inserting in lieu there23 of ‘‘October 1, 1996’’.

24 (b) FEDERAL EMPLOYEES RETIREMENT SYSTEM.—

25 Section 8420a(f)(3) of title 5, United States Code, is
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1 amended by striking out ‘‘October 1, 1995’’ and inserting

2 in lieu thereof ‘‘October 6, 1996’’.

3 SEC. 222. EXTENSION OF THE PATENT AND TRADEMARK

4 OFFICE USER FEE SURCHARGE THROUGH

5 1996.

6 Section 10101 of the Omnibus Budget Reconciliation

7 Act of 1990 (35 U.S.C. 41 note) is amended—

8 (1) in subsection (a) by striking ‘‘1995’’ and in9 serting ‘‘1996’’;

10 (2) in subsection (b)(2) by striking ‘‘1995’’ and

11 inserting ‘‘1996’’; and

12 (3) in subsection (c)—

13 (A) by striking ‘‘1995’’ the first place it

14 appears and inserting ‘‘1996’’; and

15 (B) by adding at the end the following new

16 paragraph:

17 ‘‘(6) $107,000,000 in fiscal year 1996.’’

18 SEC. 223. ONE-YEAR EXTENSION OF CUSTOMS USER FEES.

19 Paragraph (3) of section 13031(j) of the Consoli20 dated Omnibus Budget Reconciliation Act of 1985 (19

21 U.S.C. 58c(j)(3)) is amended by striking out ‘‘1995’’ and

22 inserting ‘‘1996’’.
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1 SEC. 224. DISCLOSURES OF INFORMATION FOR VETERANS

2 BENEFITS.

3 (a) IN GENERAL.—Section 6103(l)(7)(D) (relating to

4 programs to which rule applies) is amended by striking

5 ‘‘September 30, 1992’’ in the last sentence and inserting

6 ‘‘September 30, 1998’’.

7 (b) CONFORMING AMENDMENT.—Section 5317(g) of

8 title 38, United States Code, is amended by striking ‘‘Sep9 tember 30, 1992’’ and inserting ‘‘September 30, 1998’’.

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

11 this section shall take effect on September 30, 1992.

12 SEC. 225. REVISION OF PROCEDURE RELATING TO CER13 TAIN LOAN DEFAULTS.

14 (a) REVISION.—Section 3732(c)(1)(C)(ii) of title 38,

15 United States Code, is amended by striking out ‘‘resale,’’

16 and inserting in lieu thereof ‘‘resale (including losses sus17 tained on the resale of the property),’’.

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

19 subsection (a) shall take effect on October 1, 1991.

20 SEC. 226. APPLICATION OF MEDICARE PART B LIMITS TO

21 FEHBP ENROLLEE AGE 65 OR OLDER.

22 (a) FEDERAL EMPLOYEES HEALTH BENEFITS PRO23 GRAM.—Subsection 8904(b) of title 5, United States Code,

24 is amended:

25 (1) by amending paragraph (1) to read as fol26 lows:
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1 ‘‘(b)(1)(A) A plan, other than a prepayment plan de2 scribed in section 8903(4) of this title, may not provide

3 benefits under this chapter, in the case of any individual

4 enrolled in the plan who is not an employee and who is

5 age 65 or older, to the extent that—

6 ‘‘(i) a benefit claim involves a charge by a

7 health care provider for a type of service or medical

8 item which is covered for purposes of benefit pay9 ments under both this chapter and title XVIII of the

10 Social Security Act (42 U.S.C. 1395–1395ccc) relat11 ing to medicare hospital and supplementary medical

12 insurance, and

13 ‘‘(ii) benefits otherwise payable under such pro14 visions of law in the case of such individual would

15 exceed applicable limitations on hospital and physi16 cian charges established for medicare purposes

17 under sections 1886 and 1848 of the Social Security

18 Act (42 U.S.C. 1395ww and 1395w–4), respectively.

19 ‘‘(B)(i) For purposes of this subsection, hospitals,

20 physicians, and other suppliers of medical and health serv21 ices who have in force participation agreements with the

22 Secretary of Health and Human Services consistent with

23 sections 1842(h) and 1866 of the Social Security Act (42

24 U.S.C. 1395u(h) and 1395cc), whereby the participating

25 provider accepts medicare benefits in full payment of
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1 charges for covered items and services after applicable pa2 tient copayments under sections 1813, 1833 and

3 1866(a)(2) of the Social Security Act (42 U.S.C. 1395e,

4 1395l, and 1395cc(a)(2)) have been satisfied, shall accept

5 equivalent benefit payments and enrollee copayments

6 under this chapter as full payment for any item or service

7 described under subparagraph (A) which is furnished to

8 an individual who is enrolled under this chapter and is

9 not covered for purposes of benefit payments applicable

10 to such item or service under provisions of title XVIII of

11 the Social Security Act.

12 ‘‘(ii) Physicians and other health care suppliers who

13 are nonparticipating physicians, as defined by section

14 1842(i)(2) of the Social Security Act (42 U.S.C.

15 1395u(i)(2)) for purposes of services furnished to medi16 care beneficiaries, may not bill in excess of the limiting

17 charge prescribed under section 1848(g) of the Social Se18 curity Act (42 U.S.C. 1395w–4(g)) when providing serv19 ices described under subparagraph (A) to an individual

20 who is enrolled under this chapter and is not covered for

21 purposes of benefit payments applicable to those services

22 under provisions of title XVIII of the Social Security Act.

23 ‘‘(iii) The Office of Personnel Management shall no24 tify the Secretary of Health and Human Services if a hos25 pital, physician, or other supplier of medical services is
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1 found to knowingly and willfully violate this subsection

2 and the Secretary shall invoke appropriate sanctions in ac3 cordance with subsections 1128A(a)(2), 1848(g)(8), and

4 1866(b)(2) of the Social Security Act (42 U.S.C. 1320a–

5 7a(a)(2), 1395w–4(g)(8), and 1395cc(b)(2)) and applica6 ble regulations.’’; and

7 (2) by amending paragraph (3)(B) to read as

8 follows:

9 ‘‘(B) For purposes of this paragraph, the

10 term ‘medicare program information’ in11 cludes—

12 ‘‘(i) the limitations on hospital

13 charges established for medicare purposes

14 under section 1886 of the Social Security

15 Act (42 U.S.C. 1395ww) and the identity

16 of hospitals which have in force agree17 ments with the Secretary of Health and

18 Human Services consistent with section

19 1866 of the Social Security Act (42 U.S.C.

20 1395cc); and

21 ‘‘(ii) the annual fee schedule amounts

22 for services of participating physicians and

23 ‘limiting charge’ information for

24 nonparticipating physicians established for

25 medicare purposes under section 1848 of
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1 the Social Security Act (42 U.S.C. 1395w–

2 4) and the identity of physicians and sup3 pliers who have in force participation

4 agreements with the Secretary consistent

5 with subsection 1842(h) of the Social Se6 curity Act (42 U.S.C. 1395u(h).’’.

7 (b) MEDICARE AGREEMENTS WITH INSTITUTIONAL

8 PROVIDERS.—Section 1866(a)(1) of the Social Security

9 Act (42 U.S.C. 1395cc(a)(1)) is amended—

10 (1) by striking out ‘‘and’’ at the end of sub11 paragraph (P);

12 (2) by striking out the period at the end of sub13 paragraph (Q) and inserting ‘‘, and’’, and

14 (3) by inserting after subparagraph (Q) the fol15 lowing new paragraph:

16 ‘‘(R) to accept as payment in full the

17 amounts that would be payable under this part

18 (including the amounts of any coinsurance and

19 deductibles required of individuals entitled to

20 have payment made on their behalf) for an item

21 or service which the provider normally furnishes

22 to patients (or others furnish under arrange23 ment with the provider) and which is furnished

24 to an individual who has attained age 65, is in25 eligible to receive benefits under this part, and
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1 is enrolled, other than as an employee, under a

2 health benefits plan described in paragraphs (1)

3 through (3) of section 8903 and section 8903a

4 of title 5, United States Code, if such item or

5 service is of a type that is covered under both

6 this title and chapter 89 of title 5, United

7 States Code.’’.

8 (c) MEDICARE PARTICIPATING PHYSICIANS AND

9 SUPPLIERS.—Section 1842(h)(1) of the Social Security

10 Act (42 U.S.C. 1395u(h)(1)) is amended, after the second

11 sentence, by inserting the following new sentence: ‘‘Such

12 agreement shall provide, for any year beginning with

13 1993, that the physician or supplier will accept as pay14 ment in full the amounts that would be payable under this

15 part (plus the amounts of any coinsurance or deductibles

16 required of individuals on whose behalf payments are

17 made under this title) for an item or service furnished dur18 ing such year to an individual who has attained age 65,

19 is ineligible to receive benefits under this part, and is en20 rolled, other than as an employee, under a health benefits

21 plan described in paragraphs (1) through (3) of section

22 8903 and section 8903a of title 5, United States Code,

23 if such item or service is of a type that is covered under

24 both this part and chapter 89 of title 5, United States

25 Code.’’.
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1 (d) MEDICARE ACTUAL CHARGE LIMITATION FOR

2 NONPARTICIPATING PHYSICIANS.—Section 1848(g) of the

3 Social Security Act (42 U.S.C. 1359w–4(g)) is amended

4 by adding at the end thereof the following paragraph:

5 ‘‘(8) LIMITATION OF ACTUAL CHARGES FOR EN6 ROLLEES OF THE FEDERAL EMPLOYEES HEALTH

7 BENEFITS PROGRAM.—(A) A nonparticipating physi8 cian shall not impose an actual charge in excess of

9 the limiting charge defined in paragraph (2) for

10 items and services furnished after 1993 in any case

11 involving—

12 ‘‘(i) an individual who has attained age 65,

13 is ineligible to receive benefits under this part,

14 and is enrolled, other than as an employee,

15 under a health benefits plan described in para16 graphs (1) through (3) or section 8903 or sec17 tion 8903a of title 5, United States Code; and

18 ‘‘(ii) an item or service of a type that is

19 covered for benefits under both this part and

20 chapter 89 of title 5, United States Code.

21 ‘‘(B) If a person knowingly and willfully bills

22 for physicians’ services in violation of subparagraph

23 (A), the Secretary shall apply sanctions against the

24 person in accordance with section 1842(j)(2).’’.

25 (e) EFFECTIVE DATES.—
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1 (1) Except as provided in paragraph (2), the

2 amendments made by this section shall be effective

3 with respect to health care provider charges for

4 items and services furnished to individuals enrolled

5 in plans under chapter 89 of title 5, United States

6 Code, in contract years beginning after December

7 31, 1993.

8 (2) The amendment made by subsection (b) ap9 plies to agreements for periods after 1991.

Æ

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