I 

111TH CONGRESS 

2D SESSION H. R. 6345 

To amend the Internal Revenue Code of 1986 to adjust personal exemptions 

for high cost-of-living areas. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 29, 2010 

Mr. ISRAEL (for himself and Mr. ANDREWS) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to adjust 

personal exemptions for high cost-of-living areas. 

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 ‘‘The Personal Exemp5 tion Fairness Act of 2010’’. 

6 SEC. 2. REGIONAL COST-OF-LIVING ADJUSTMENTS IN PER7 SONAL EXEMPTIONS. 

8 (a) IN GENERAL.—Subsection (d) of section 151 of 

9 the Internal Revenue Code of 1986 is amended by adding 

10 at the end the following new paragraph: 


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1 ‘‘(5) AREA COST-OF-LIVING ADJUSTMENT.— 

2 ‘‘(A) IN GENERAL.—Each of the dollar 

3 amounts otherwise in effect under paragraphs 

4 (1) and (3)(C) for any taxable year beginning 

5 after 2010 shall be multiplied by the applicable 

6 multiplier for the taxable year which applies to 

7 the statistical area in which the taxpayer’s pri8 mary place of abode during the taxable year is 

9 located. 

10 ‘‘(B) APPLICABLE MULTIPLIERS.—For 

11 purposes of this paragraph— 

12 ‘‘(i) IN GENERAL.—Not later than 

13 December 15 of each calendar year, the 

14 Secretary shall prescribe an applicable 

15 multiplier for each statistical area of the 

16 United States which shall apply to taxable 

17 years beginning during the succeeding cal18 endar year. 

19 ‘‘(ii) DETERMINATION OF MULTI20 PLIERS.— 

21 ‘‘(I) In the case of a statistical 

22 area where the cost-of-living differen23 tial for the calendar year does not ex24 ceed 125 percent, the applicable mul25 tiplier is 1. 


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1 ‘‘(II) In the case of a statistical 

2 area not described in subclause (I), 

3 the applicable multiplier is the cost-of4 living differential for the calendar 

5 year. 

6 ‘‘(iii) COST OF LIVING DIFFEREN7 TIAL.—The cost-of-living differential for 

8 any statistical area for any calendar year 

9 is the percentage determined by dividing— 

10 ‘‘(I) the cost-of-living for such 

11 area for the preceding calendar year, 

12 by 

13 ‘‘(II) the average cost-of-living 

14 for the United States for the pre15 ceding calendar year. 

16 ‘‘(iv) COST-OF-LIVING FOR AREA.— 

17 ‘‘(I) IN GENERAL.—For each cal18 endar year beginning after 2009, the 

19 Secretary of Labor shall determine 

20 and publish a cost-of-living index for 

21 each statistical area. 

22 ‘‘(II) METHODOLOGY.—The cost23 of-living index determined under sub24 clause (I) for any statistical area for 

25 any calendar year shall be based on 


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1 average market prices for the area for 

2 the 12-month period ending on Au3 gust 31 of such calendar year. The 

4 market prices taken into account 

5 under the preceding sentence shall be 

6 selected and used under the same 

7 methodology as is used by the Sec8 retary of Labor in developing the Con9 sumer Price Index for All Urban Con10 sumers. 

11 ‘‘(v) STATISTICAL AREA.—For pur12 poses of this subsection the term ‘statis13 tical area’ means— 

14 ‘‘(I) any metropolitan statistical 

15 area as defined by the Secretary of 

16 Commerce, and 

17 ‘‘(II) the portion of any State not 

18 within a metropolitan statistical area 

19 as so defined.’’. 

20 (b) EFFECTIVE DATE.— 

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

22 this section shall apply to taxable years beginning 

23 after December 31, 2010. 

24 (2) TRANSITION RULE.—Notwithstanding sec25 tion 151(d)(5)(B) of the Internal Revenue Code (as 


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1 added by this section), the date for prescribing ap2 plicable multipliers for taxable years beginning in 

3 calendar year 2011 shall be the date 1 year after the 

4 date of the enactment of this Act. 

Æ 


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