I 

113TH CONGRESS 

1ST SESSION H. R. 699 

To amend the Balanced Budget and Emergency Deficit Control Act of 1985 

to repeal and replace the fiscal year 2013 sequestration. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 14, 2013 

Mr. VAN HOLLEN (for himself, Mr. HOYER, Mr. GEORGE MILLER of California, Ms. DELAURO, Mr. POCAN, Ms. CASTOR of Florida, Mr. MORAN, 

Mr. KILDEE, Mr. HUFFMAN, and Mr. HOLT) introduced the following 

bill; which was referred to the Committee on Ways and Means, and in 

addition to the Committees on the Budget and Agriculture, 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 amend the Balanced Budget and Emergency Deficit Control Act of 1985 to repeal and replace the fiscal year 

2013 sequestration. 

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. 

4 This Act may be cited as the ‘‘Stop the Sequester 

5 Job Loss Now Act’’. 

6 SEC. 2. TABLE OF CONTENTS. 

Sec. 1. Short title. 


pwalker on DSK7TPTVN1PROD with BILLS
2 

•HR 699 IH

Sec. 2. Table of contents. 

TITLE I—BUDGET PROCESS AMENDMENTS TO REPLACE FISCAL 

YEAR 2013 SEQUESTRATION 

Sec. 101. Repeal and replace the 2013 sequester. 

Sec. 102. Protecting veterans programs from sequester. 

TITLE II—AGRICULTURAL SAVINGS 

Sec. 201. One-year extension of agricultural commodity programs, except direct 

payment programs. 

TITLE III—OIL AND GAS SUBSIDIES 

Sec. 301. Limitation on section 199 deduction attributable to oil, natural gas, 

or primary products thereof. 

Sec. 302. Prohibition on using last-in, first-out accounting for major integrated 

oil companies. 

Sec. 303. Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers. 

TITLE IV—THE BUFFETT RULE 

Sec. 401. Fair share tax on high-income taxpayers. 

TITLE V—SENSE OF THE HOUSE 

Sec. 501. Sense of the House on the need for a fair, balanced and bipartisan 

approach to long-term deficit reduction. 

1 TITLE I—BUDGET PROCESS 

2 AMENDMENTS TO REPLACE 

3 FISCAL YEAR 2013 SEQUES4 TRATION 

5 SEC. 101. REPEAL THE 2013 SEQUESTER AND DELAY THE 

6 2014 SEQUESTER. 

7 (a) CALCULATION OF TOTAL DEFICIT REDUCTION

8 AND ALLOCATION TO FUNCTIONS.—(1) Subparagraph 

9 (E) of section 251A(3) is amended to read as follows: 

10 ‘‘(E) For fiscal year 2014, reducing the amount 

11 calculated under subparagraphs (A) through (D) by 

12 $27,500,000,000.’’. 


pwalker on DSK7TPTVN1PROD with BILLS
3 

•HR 699 IH

1 (2) Paragraph (4) of section 251A of the Balanced 

2 Budget and Emergency Deficit Control Act of 1985 (2 

3 U.S.C. 901a) is amended by striking ‘‘On March 1, 2013, 

4 for fiscal year 2013, and in its sequestration preview re5 port for fiscal years 2014 through 2021’’ and inserting 

6 ‘‘On January 2, 2014, for fiscal year 2014, and in its se7 questration preview report for fiscal years 2015 through 

8 2021’’. 

9 (b) DEFENSE AND NONDEFENSE FUNCTION REDUC10 TIONS.—Paragraphs (5) and (6) of section 251A of the 

11 Balanced Budget and Emergency Deficit Control Act of 

12 1985 are amended by striking ‘‘2013’’ and inserting 

13 ‘‘2014’’ each place it appears. 

14 (c) IMPLEMENTING DISCRETIONARY REDUCTIONS.— 

15 (1) Section 251A(7)(A) of the Balanced Budget and 

16 Emergency Deficit Control Act of 1985 is amended by 

17 striking ‘‘2013.—On January 2, 2013, for fiscal year 

18 2013’’ and inserting ‘‘2014.—On January 2, 2014, for fis19 cal year 2014’’. 

20 (2) Section 251A(7)(B) of such Act is amended by 

21 striking ‘‘2014’’ and inserting ‘‘2015’’ each place it ap22 pears. 

23 (d) SAVINGS.—The savings set forth by the enact24 ment of title II shall achieve the savings that would other25 wise have occurred as a result of the sequestration under 


pwalker on DSK7TPTVN1PROD with BILLS
4 

•HR 699 IH

1 section 251A of the Balanced Budget and Emergency Def2 icit Control Act of 1985. 

3 SEC. 102. PROTECTING VETERANS PROGRAMS FROM SE4 QUESTER. 

5 Section 256(e)(2)(E) of the Balanced Budget and 

6 Emergency Deficit Control Act of 1985 is repealed. 

7 TITLE II—AGRICULTURAL 

8 SAVINGS 

9 SEC. 201. ONE-YEAR EXTENSION OF AGRICULTURAL COM10 MODITY PROGRAMS, EXCEPT DIRECT PAY11 MENT PROGRAMS. 

12 (a) EXTENSION.—Except as provided in subsection 

13 (b) and notwithstanding any other provision of law, the 

14 authorities provided by each provision of title I of the 

15 Food, Conservation, and Energy Act of 2008 (Public Law 

16 110–246; 122 Stat. 1651) and each amendment made by 

17 that title (and for mandatory programs at such funding 

18 levels), as in effect on September 30, 2013, shall continue, 

19 and the Secretary of Agriculture shall carry out the au20 thorities, until September 30, 2014. 

21 (b) TERMINATION OF DIRECT PAYMENT PRO22 GRAMS.— 

23 (1) COVERED COMMODITIES.—The extension 

24 provided by subsection (a) shall not apply with re25 spect to the direct payment program under section 


pwalker on DSK7TPTVN1PROD with BILLS
5 

•HR 699 IH

1 1103 of the Food, Conservation, and Energy Act of 

2 2008 (7 U.S.C. 8713). 

3 (2) PEANUTS.—The extension provided by sub4 section (a) shall not apply with respect to the direct 

5 payment program under section 1303 of the Food, 

6 Conservation, and Energy Act of 2008 (7 U.S.C. 

7 7953). 

8 (c) EFFECTIVE DATE.—This section shall take effect 

9 on the earlier of— 

10 (1) the date of the enactment of this Act; and 

11 (2) September 30, 2013. 

12 TITLE III—OIL AND GAS 

13 SUBSIDIES 

14 SEC. 301. LIMITATION ON SECTION 199 DEDUCTION ATTRIB15 UTABLE TO OIL, NATURAL GAS, OR PRIMARY 

16 PRODUCTS THEREOF. 

17 (a) DENIAL OF DEDUCTION.—Paragraph (4) of sec18 tion 199(c) of the Internal Revenue Code of 1986 is 

19 amended by adding at the end the following new subpara20 graph: 

21 ‘‘(E) SPECIAL RULE FOR CERTAIN OIL

22 AND GAS INCOME.—In the case of any taxpayer 

23 who is a major integrated oil company (as de24 fined in section 167(h)(5)(B)) for the taxable 

25 year, the term ‘domestic production gross reVerDate Mar 15 2010 00:22 Feb 26, 2013 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H699.IH H699

pwalker on DSK7TPTVN1PROD with BILLS
6 

•HR 699 IH

1 ceipts’ shall not include gross receipts from the 

2 production, transportation, or distribution of 

3 oil, natural gas, or any primary product (within 

4 the meaning of subsection (d)(9)) thereof.’’. 

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

6 this section shall apply to taxable years ending after De7 cember 31, 2013. 

8 SEC. 302. PROHIBITION ON USING LAST-IN, FIRST-OUT AC9 COUNTING FOR MAJOR INTEGRATED OIL 

10 COMPANIES. 

11 (a) IN GENERAL.—Section 472 of the Internal Rev12 enue Code of 1986 is amended by adding at the end the 

13 following new subsection: 

14 ‘‘(h) MAJOR INTEGRATED OIL COMPANIES.—Not15 withstanding any other provision of this section, a major 

16 integrated oil company (as defined in section 

17 167(h)(5)(B)) may not use the method provided in sub18 section (b) in inventorying of any goods.’’. 

19 (b) EFFECTIVE DATE AND SPECIAL RULE.— 

20 (1) IN GENERAL.—The amendment made by 

21 subsection (a) shall apply to taxable years ending 

22 after December 31, 2013. 

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

24 the case of any taxpayer required by the amendment 

25 made by this section to change its method of acVerDate Mar 15 2010 00:22 Feb 26, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H699.IH H699

pwalker on DSK7TPTVN1PROD with BILLS
7 

•HR 699 IH

1 counting for its first taxable year ending after De2 cember 31, 2013— 

3 (A) such change shall be treated as initi4 ated by the taxpayer, 

5 (B) such change shall be treated as made 

6 with the consent of the Secretary of the Treas7 ury, and 

8 (C) the net amount of the adjustments re9 quired to be taken into account by the taxpayer 

10 under section 481 of the Internal Revenue Code 

11 of 1986 shall be taken into account ratably over 

12 a period (not greater than 8 taxable years) be13 ginning with such first taxable year. 

14 SEC. 303. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

15 APPLICABLE TO MAJOR INTEGRATED OIL 

16 COMPANIES WHICH ARE DUAL CAPACITY 

17 TAXPAYERS. 

18 (a) IN GENERAL.—Section 901 of the Internal Rev19 enue Code of 1986 is amended by redesignating subsection 

20 (n) as subsection (o) and by inserting after subsection (m) 

21 the following new subsection: 

22 ‘‘(n) SPECIAL RULES RELATING TO MAJOR INTE23 GRATED OIL COMPANIES WHICH ARE DUAL CAPACITY

24 TAXPAYERS.— 


pwalker on DSK7TPTVN1PROD with BILLS
8 

•HR 699 IH

1 ‘‘(1) GENERAL RULE.—Notwithstanding any 

2 other provision of this chapter, any amount paid or 

3 accrued by a dual capacity taxpayer which is a 

4 major integrated oil company (as defined in section 

5 167(h)(5)(B)) to a foreign country or possession of 

6 the United States for any period shall not be consid7 ered a tax— 

8 ‘‘(A) if, for such period, the foreign coun9 try or possession does not impose a generally 

10 applicable income tax, or 

11 ‘‘(B) to the extent such amount exceeds 

12 the amount (determined in accordance with reg13 ulations) which— 

14 ‘‘(i) is paid by such dual capacity tax15 payer pursuant to the generally applicable 

16 income tax imposed by the country or pos17 session, or 

18 ‘‘(ii) would be paid if the generally ap19 plicable income tax imposed by the country 

20 or possession were applicable to such dual 

21 capacity taxpayer. 

22 Nothing in this paragraph shall be construed to 

23 imply the proper treatment of any such amount 

24 not in excess of the amount determined under 

25 subparagraph (B). 


pwalker on DSK7TPTVN1PROD with BILLS
9 

•HR 699 IH

1 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur2 poses of this subsection, the term ‘dual capacity tax3 payer’ means, with respect to any foreign country or 

4 possession of the United States, a person who— 

5 ‘‘(A) is subject to a levy of such country or 

6 possession, and 

7 ‘‘(B) receives (or will receive) directly or 

8 indirectly a specific economic benefit (as deter9 mined in accordance with regulations) from 

10 such country or possession. 

11 ‘‘(3) GENERALLY APPLICABLE INCOME TAX.— 

12 For purposes of this subsection— 

13 ‘‘(A) IN GENERAL.—The term ‘generally 

14 applicable income tax’ means an income tax (or 

15 a series of income taxes) which is generally im16 posed under the laws of a foreign country or 

17 possession on income derived from the conduct 

18 of a trade or business within such country or 

19 possession. 

20 ‘‘(B) EXCEPTIONS.—Such term shall not 

21 include a tax unless it has substantial applica22 tion, by its terms and in practice, to— 

23 ‘‘(i) persons who are not dual capacity 

24 taxpayers, and 


pwalker on DSK7TPTVN1PROD with BILLS
10 

•HR 699 IH

1 ‘‘(ii) persons who are citizens or resi2 dents of the foreign country or posses3 sion.’’. 

4 (b) EFFECTIVE DATE.— 

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

6 this section shall apply to taxes paid or accrued in 

7 taxable years beginning after the date of the enact8 ment of this Act. 

9 (2) CONTRARY TREATY OBLIGATIONS

10 UPHELD.—The amendments made by this section 

11 shall not apply to the extent contrary to any treaty 

12 obligation of the United States. 

13 TITLE IV—THE BUFFETT RULE 

14 SEC. 401. FAIR SHARE TAX ON HIGH-INCOME TAXPAYERS. 

15 (a) IN GENERAL.—Subchapter A of chapter 1 of the 

16 Internal Revenue Code of 1986 is amended by adding at 

17 the end the following new part: 

18 ‘‘PART VII—FAIR SHARE TAX ON HIGH-INCOME 

19 TAXPAYERS 

20 ‘‘SEC. 59B. FAIR SHARE TAX. 

21 ‘‘(a) GENERAL RULE.— 

22 ‘‘(1) PHASE-IN OF TAX.—In the case of any 

23 high-income taxpayer, there is hereby imposed for a 

24 taxable year (in addition to any other tax imposed 

25 by this subtitle) a tax equal to the product of— 


pwalker on DSK7TPTVN1PROD with BILLS
11 

•HR 699 IH

1 ‘‘(A) the amount determined under para2 graph (2), and 

3 ‘‘(B) a fraction (not to exceed 1)— 

4 ‘‘(i) the numerator of which is the ex5 cess of— 

6 ‘‘(I) the taxpayer’s adjusted 

7 gross income, over 

8 ‘‘(II) the dollar amount in effect 

9 under subsection (c)(1), and 

10 ‘‘(ii) the denominator of which is the 

11 dollar amount in effect under subsection 

12 (c)(1). 

13 ‘‘(2) AMOUNT OF TAX.—The amount of tax de14 termined under this paragraph is an amount equal 

15 to the excess (if any) of— 

16 ‘‘(A) the tentative fair share tax for the 

17 taxable year, over 

18 ‘‘(B) the excess of— 

19 ‘‘(i) the sum of— 

20 ‘‘(I) the regular tax liability (as 

21 defined in section 26(b)) for the tax22 able year, 

23 ‘‘(II) the tax imposed by section 

24 55 for the taxable year, plus 


pwalker on DSK7TPTVN1PROD with BILLS
12 

•HR 699 IH

1 ‘‘(III) the payroll tax for the tax2 able year, over 

3 ‘‘(ii) the credits allowable under part 

4 IV of subchapter A (other than sections 

5 27(a), 31, and 34). 

6 ‘‘(b) TENTATIVE FAIR SHARE TAX.—For purposes 

7 of this section— 

8 ‘‘(1) IN GENERAL.—The tentative fair share tax 

9 for the taxable year is 30 percent of the excess of— 

10 ‘‘(A) the adjusted gross income of the tax11 payer, over 

12 ‘‘(B) the modified charitable contribution 

13 deduction for the taxable year. 

14 ‘‘(2) MODIFIED CHARITABLE CONTRIBUTION

15 DEDUCTION.—For purposes of paragraph (1)— 

16 ‘‘(A) IN GENERAL.—The modified chari17 table contribution deduction for any taxable 

18 year is an amount equal to the amount which 

19 bears the same ratio to the deduction allowable 

20 under section 170 (section 642(c) in the case of 

21 a trust or estate) for such taxable year as— 

22 ‘‘(i) the amount of itemized deduc23 tions allowable under the regular tax (as 

24 defined in section 55) for such taxable 


pwalker on DSK7TPTVN1PROD with BILLS
13 

•HR 699 IH

1 year, determined after the application of 

2 section 68, bears to 

3 ‘‘(ii) such amount, determined before 

4 the application of section 68. 

5 ‘‘(B) TAXPAYER MUST ITEMIZE.—In the 

6 case of any individual who does not elect to 

7 itemize deductions for the taxable year, the 

8 modified charitable contribution deduction shall 

9 be zero. 

10 ‘‘(c) HIGH-INCOME TAXPAYER.—For purposes of this 

11 section— 

12 ‘‘(1) IN GENERAL.—The term ‘high-income tax13 payer’ means, with respect to any taxable year, any 

14 taxpayer (other than a corporation) with an adjusted 

15 gross income for such taxable year in excess of 

16 $1,000,000 (50 percent of such amount in the case 

17 of a married individual who files a separate return). 

18 ‘‘(2) INFLATION ADJUSTMENT.— 

19 ‘‘(A) IN GENERAL.—In the case of a tax20 able year beginning after 2014, the $1,000,000 

21 amount under paragraph (1) shall be increased 

22 by an amount equal to— 

23 ‘‘(i) such dollar amount, multiplied by 

24 ‘‘(ii) the cost-of-living adjustment de25 termined under section 1(f)(3) for the calVerDate Mar 15 2010 00:22 Feb 26, 2013 Jkt 029200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H699.IH H699

pwalker on DSK7TPTVN1PROD with BILLS
14 

•HR 699 IH

1 endar year in which the taxable year be2 gins, determined by substituting ‘calendar 

3 year 2013’ for ‘calendar year 1992’ in sub4 paragraph (B) thereof. 

5 ‘‘(B) ROUNDING.—If any amount as ad6 justed under subparagraph (A) is not a multiple 

7 of $10,000, such amount shall be rounded to 

8 the next lowest multiple of $10,000. 

9 ‘‘(d) PAYROLL TAX.—For purposes of this section, 

10 the payroll tax for any taxable year is an amount equal 

11 to the excess of— 

12 ‘‘(1) the taxes imposed on the taxpayer under 

13 sections 1401, 1411, 3101, 3201, and 3211(a) (to 

14 the extent such taxes are attributable to the rate of 

15 tax in effect under section 3101) with respect to 

16 such taxable year or wages or compensation received 

17 during the taxable year, over 

18 ‘‘(2) the deduction allowable under section 

19 164(f) for such taxable year. 

20 ‘‘(e) SPECIAL RULE FOR ESTATES AND TRUSTS.— 

21 For purposes of this section, in the case of an estate or 

22 trust, adjusted gross income shall be computed in the 

23 manner described in section 67(e). 

24 ‘‘(f) NOT TREATED AS TAX IMPOSED BY THIS CHAP25 TER FOR CERTAIN PURPOSES.—The tax imposed under 


pwalker on DSK7TPTVN1PROD with BILLS
15 

•HR 699 IH

1 this section shall not be treated as tax imposed by this 

2 chapter for purposes of determining the amount of any 

3 credit under this chapter (other than the credit allowed 

4 under section 27(a)) or for purposes of section 55.’’. 

5 (b) CONFORMING AMENDMENT.—Section 26(b)(2) of 

6 such Code is amended by redesignating subparagraphs (C) 

7 through (X) as subparagraphs (D) through (Y), respec8 tively, and by inserting after subparagraph (B) the fol9 lowing new subparagraph: 

10 ‘‘(C) section 59B (relating to fair share 

11 tax),’’. 

12 (c) CLERICAL AMENDMENT.—The table of parts for 

13 subchapter A of chapter 1 of such Code is amended by 

14 adding at the end the following new item: 

‘‘Part VII—Fair Share Tax on High-Income Taxpayers’’. 

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

16 this section shall apply to taxable years beginning after 

17 December 31, 2013. 

18 TITLE V—SENSE OF THE HOUSE 

19 SEC. 501. SENSE OF THE HOUSE ON THE NEED FOR A FAIR, 

20 BALANCED AND BIPARTISAN APPROACH TO 

21 LONG-TERM DEFICIT REDUCTION. 

22 (a) The House finds that— 

23 (1) every bipartisan commission has rec24 ommended—and the majority of Americans agree— 

25 that we should take a balanced, bipartisan approach 


pwalker on DSK7TPTVN1PROD with BILLS
16 

•HR 699 IH

1 to reducing the deficit that addresses both revenue 

2 and spending; and 

3 (2) sequestration is a meat-ax approach to def4 icit reduction that imposes deep and mindless cuts, 

5 regardless of their impact on vital services and in6 vestments. 

7 (b) It is the sense of the House that the Congress 

8 should replace the entire 10-year sequester established by 

9 the Budget Control Act of 2011 with a balanced approach 

10 that would increase revenues without increasing the tax 

11 burden on middle-income Americans, and decrease long12 term spending while maintaining the Medicare guarantee, 

13 protecting Social Security and a strong social safety net, 

14 and making strategic investments in education, science, 

15 research, and critical infrastructure necessary to compete 

16 in the global economy. 

Æ 


pwalker on DSK7TPTVN1PROD with BILLS